STOCK MARKET WATCH, Wednesday June 2

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday June 2, 2010

AT THE CLOSING BELL ON June 1, 2010

Dow... 10,024.02 -112.61 (-1.11%)
Nasdaq... 2,222.33 -34.71 (-1.54%)
S&P 500... 1,070.71 -18.70 (-1.72%)
Gold future... 1,225 -1.70 (-0.14%)
10-Yr Bond... 3.29 +0.03 (+0.89%)
30-Year Bond 4.21 +0.03 (+0.67%)

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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Handy Links - Market Data and News:Economic Calendar    Marketwatch Data    Bloomberg Economic News    Yahoo! Finance    Google Finance    Bank Tracker    
Credit Union Tracker    Daily Job Cuts

Handy Links - Economic Blogs:
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Handy Links - Government Issues:
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Handy Links - Videos:
The Coming Collapse of the Middle Class    Charlie Rose talks with Roubini    Charlie Rose talks with Krugman
    William Black: This Economic Disaster    Bill Moyers with Kevin Drum and David Corn

Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren

Bush Administration Officials Charged = 1
Name(s): Richard Lopez Razo

Financial Sector Officials Convicted since 1/20/09 = 11

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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[vaberella]

1. +1 for the Cartoon. n/t

[ozymandius]

3. Thanks!

And good morning :donut: :donut: :donut:

[DemReadingDU]

5. another +1 for toon!

[Dr.Phool]

50. The toon's not very accurate.

If that was really the Czechago Police, that guy would have had 2 black eyes, a broken nose, and a few cracked or broken ribs.

Nasty suckers up there.

[tclambert]

14. I never understood how a birth certificate is a form of identification.

What links it to the person holding it? If I presented George Clooney's birth certificate, how would they know it's not mine? (Oh, shut up. Just shut up right now.)

[ozymandius]

16. Well, I was going to post a reply...

But I will withhold comment. :7

[Demeter]

22. I wonder If I could get Sent Back to the Land of My Birth

It's not nostalgia, it's utter frustration.

[ozymandius]

27. Planning to vacation in Arizona this year?

Sounds like a solid plan to leave behind any identification.

No offense to Arizonans - just to their moronic government.

[AnneD]

54. Morning Marketeers...

:donut: and lurkers. Ozy, Mom was born and now lives in Az. She was the person that infused me with democratic principals. And yet she has become more RW as time goes by. I don't know if it due to her age, the desert heat, or too much Fox News but some days it is hard to listen to her talk-she taught me better than that.

If I had to title my life now-It would be The Good, The Bad,and the Ugly.

First the Good.....WE ARE OUT OF DEBT!!!!!!! I am buying back time on my Texas Teachers Retirement Account, but I figure that is retirement so it really isn't a debt. I finally paid off the IRS last week. My freedom may be short lived though. I have been car shopping. We can't pay in cash and we really do need a better car soon. We will probably get the car this week. I am test driving today. Thanks to the Marketeers for their vehicle suggestions. We loved the Town and Country and in our looking, the Carmax salesman told us that the Dodge Caravan was the same thing, only less expensive. The back space is exactly what we need for the instruments and gear. So far, I have a 2008 Dodge with less than 31K for 16K as a top contender. It was a rental and looks really nice. I have some others lined up. They each have an assortment of bells and whistles at assorted prices. The test drive will tell me a lot.

Next, the Bad.... Hubby came in showed me a some sores that he said was bothering him. As best I can tell-it looks like the chicken pox. He doesn't remember having anything like it when he was a child in India. I was making a 3am run to the local 24hr pharmacy for benedryl and calamine lotion. His doctor friend will confirm my dx., but I am pretty sure. No school, no OT, and a canceled concert.

Finally, the Ugly.....My school is now an 'internal charter school'. THat is the new slimy way they have of taking a public school and making it a charter. Thank God I have my benefits as a public school employee. But I will be working longer days and a longer school day. We will be 7:30 to 4:30 Mon-Thur and 7:30-3:30 on Fri. We are currently 8:30-3:45 Mon-Fri. We will go 190 days instead of the 180 and we are suppose to have 2 faculty meetings a month that will take us to 5:30. I will be fighting traffic both ways. I will be leaving the house at 6:30 and getting home at 6. The didn't consult the parents or staff. They had a token meeting to ask us what we wanted in a principal-but the fix was in. They were wanting us to start school July 23rd, but the union informed them that there were steps that they legally had to take before they did that-and there was not enough time to due them. I think the Superintendent is about to get slapped down by the legislature this year and that adds even more importance and pressure on our school to raise scores. I will be updating the resume. I may go back o working in an MD Anderson clinic. It will be less hassle and more money.

Happy Hunting and watch out for the bears.

[ozymandius]

2. Today's Reports

14:00 Auto Sales May
Briefing.com NA
Consensus 4.1M
Prior 3.9M

14:00 Truck Sales May
Briefing.com NA
Consensus 4.8M
Prior 4.9M

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

[ozymandius]

4. Oil near $72 as economy concerns drag on optimism

SINGAPORE – Oil prices slipped to near $72 a barrel Wednesday in Asia as flagging investor optimism about the global economy drags down stocks and commodities.

Equity markets and oil prices have been battered for the last month amid fears Europe's debt crisis could spread and slow global economic growth. The Dow Jones industrial average fell 1.1 percent Tuesday while Asian stocks were mixed on Wednesday.

"I can think of no reason for the price of oil to rally at this point," said Mike Sander of Sander Capital Advisors in Seattle. "The outlook for equities and commodities for now looks bleak."

In other Nymex trading in June contracts, heating oil rose 0.78 cent to $1.9782 a gallon and gasoline gained 0.61 cent at $1.9886 a gallon. Natural gas was up 1.8 cents at $4.266 per 1,000 cubic feet.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

6. Rates mixed at weekly Treasury bill auction

WASHINGTON – Interest rates on short-term Treasury bills were mixed in Tuesday's auction with rates on three-month bills falling to the lowest level in three weeks while six-month bills were unchanged.

The Treasury Department auctioned $27 billion in three-month bills at a discount rate of 0.160 percent, down from 0.165 percent last week. Another 27 billion in six-month bills was auctioned at a discount rate of 0.220 percent, unchanged from last week.

The three-month rate was the lowest since these bills averaged 0.155 percent on May 10.

http://news.yahoo.com/s/ap/20100601/ap_on_bi_ge/us_treasury_bills

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Demand for short term T-notes show a lack of confidence in equities.

[Festivito]

7. Debt: 05/28/2010 12,992,539,130,957.22 (UP 4,622,348,248.67) (Fri)

(Down a little. Treasury website was down for a lot of time yesterday. Worked in the morning. At 6PM it would not respond and still would not at 11PM. Works now. News reports over the weekend showed projections of debt over 13T$. As of yesterday's report of the work-day before(Friday), it's not. Perhaps today's report on Tuesday's borrowing will show the projections, not mine, correct around 3PM -- if the website is working. Good day.)

(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat.)
= Held by the Public + Intragovernmental(FICA)
= 8,494,419,432,586.19 + 4,498,119,698,371.03
DOWN 294,414,430.12 + UP 4,916,762,678.79

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 309-Million person America.
If every American, man, woman and child puts in $3.23 THAT'S 1B$, and $3,232.47 makes 1T$.
A family of three: Mom, Dad, Child: $9.70, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,360,731 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $41,998.02.
A family of three owes $125,994.07. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 days.
The average for the last 22 reports is 5,263,866,236.89.
The average for the last 30 days would be 3,860,168,573.72.

There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 165 reports in 240 days of FY2010 averaging 6.56B$ per report, 4.51B$/day.
Above line should be okay

PROJECTION:
There are 968 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 18.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
05/28/2010 12,992,539,130,957.22 BHO (UP 2,365,662,082,044.14 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +1,082,710,127,445.50 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,646,621,652,156.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
05/07/2010 +000,000,195,077.74 ------------*****
05/10/2010 +000,804,647,162.22 ------------******** Mon
05/11/2010 -000,148,047,510.67 ---
05/12/2010 +000,782,970,242.92 ------------********
05/13/2010 +003,301,759,550.17 ------------*********
05/14/2010 -000,440,383,687.55 ---
05/18/2010 +000,360,533,772.20 ------------******** Tue
05/19/2010 +000,208,812,715.15 ------------********
05/20/2010 +010,103,129,083.31 ------------**********
05/21/2010 +000,263,393,058.28 ------------********
05/24/2010 +000,371,674,396.55 ------------******** Mon
05/25/2010 +000,937,216,055.27 ------------********
05/26/2010 +001,057,190,066.84 ------------*********
05/27/2010 +015,241,764,354.27 ------------**********
05/28/2010 -000,294,414,430.12 ---

32,550,439,906.58 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock
http://www.usdebtclock.org/
DUer primer on National debt

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4406463&mesg_id=4406469

[Festivito]

66. Debt: 06/01/2010 13,050,826,460,886.97 (UP 58,287,329,929.75) (Tue)

(Up a lot. We hit 13T$ by end of day Tuesday. Good day.)

(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat.)
= Held by the Public + Intragovernmental(FICA)
= 8,572,779,158,729.50 + 4,478,047,302,157.47
UP 78,359,726,143.31 + DOWN 20,072,396,213.56

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 309-Million person America.
If every American, man, woman and child puts in $3.23 THAT'S 1B$, and $3,232.19 makes 1T$.
A family of three: Mom, Dad, Child: $9.70, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,387,316 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $42,182.81.
A family of three owes $126,548.43. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 32 days.
The average for the last 21 reports is 4,861,311,668.10.
The average for the last 30 days would be 3,402,918,167.67.
The average for the last 32 days would be 3,190,235,782.19.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 166 reports in 244 days of FY2010 averaging 6.87B$ per report, 4.68B$/day.
Above line should be okay

PROJECTION:
There are 964 days remaining in this Obama 1st term.
By that time the debt could be between 14.4 and 18.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
06/01/2010 13,050,826,460,886.97 BHO (UP 2,423,949,411,973.89 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +1,140,997,457,375.20 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,706,819,966,975.20 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
05/10/2010 +000,804,647,162.22 ------------******** Mon
05/11/2010 -000,148,047,510.67 ---
05/12/2010 +000,782,970,242.92 ------------********
05/13/2010 +003,301,759,550.17 ------------*********
05/14/2010 -000,440,383,687.55 ---
05/18/2010 +000,360,533,772.20 ------------******** Tue
05/19/2010 +000,208,812,715.15 ------------********
05/20/2010 +010,103,129,083.31 ------------**********
05/21/2010 +000,263,393,058.28 ------------********
05/24/2010 +000,371,674,396.55 ------------******** Mon
05/25/2010 +000,937,216,055.27 ------------********
05/26/2010 +001,057,190,066.84 ------------*********
05/27/2010 +015,241,764,354.27 ------------**********
05/28/2010 -000,294,414,430.12 ---
06/01/2010 +078,359,726,143.31 ------------********** Tue

110,909,970,972.15 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock
http://www.usdebtclock.org/
DUer primer on National debt

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4408452&mesg_id=4408466

[ozymandius]

8. World stocks lower amid Europe, US jitters

BANGKOK – World stocks were mostly down Wednesday as Europe's debt woes continued to undermine confidence and after a fall on Wall Street connected to the massive oil spill in the Gulf of Mexico.

In early trading in Europe, Britain's FTSE index was down 65 points, or 1.3 percent, at 5,098.97. The CAC 40 index of leading French shares was down 1.4 percent at 3,453.40 while Germany's DAX stood was off 1.2 percent at 5,908.51. Wall Street was poised for a higher opening, with Dow futures up 11 points, or 0.1 percent, at 10,030.

It was the second day of losses for Asia's markets, with benchmark indexes in Japan, Australia and Hong Kong down. The Shanghai Composite Index rebounded slightly, up 3.14 points, or 0.1 percent, to close at 2,571.42. South Korea's market was closed for nationwide local elections.

Hong Kong's Hang Seng dipped 0.1 percent to close at 19,471.80 and Australia's S&P/ASX 200 dropped 0.7 percent to 4,381.0.

Japan's Nikkei 225 stock average lost 108.59 points, or 1.1 percent, to 9,603.24 amid news that embattled Japanese Prime Minister Yukio Hatoyama was resigning.

http://news.yahoo.com/s/ap/20100602/ap_on_bi_ge/world_markets

[ozymandius]

9. BP at Risk as Share Plunge Fuels Takeover Speculation

BP Plc’s failure to stop an oil leak from spewing millions of gallons of crude into the Gulf of Mexico may leave the biggest oil and gas producer in the U.S. in a fight to stay independent.

BP shares have plunged 36 percent since the Deepwater Horizon drilling rig leased by the company exploded on April 20, wiping more than 40 billion pounds ($58 billion) from the company’s value. That may make BP cheap enough to attract acquisition interest, investors said.

With a permanent end to the leak depending on so-called relief wells that are some two months from completion, Hayward faces costs that may reach $22 billion, or more than last year’s profit, according to ING Wholesale Banking. The company also faces a criminal and civil investigation in the U.S. into the disaster.

Some analysts estimate the potential for criminal investigation and civil lawsuits facing BP could be as high as $40 billion, which would justify the roughly $50 billion loss in market value, said Gordon Kwan, the Hong Kong-based head of regional energy research at Mirae Asset Securities Ltd.

http://preview.bloomberg.com/news/2010-06-02/bp-s-future-at-risk-as-oil-spill-share-plunge-prompt-takeover-speculation.html

[ozymandius]

10. BP Oil Leak May Last Until Christmas in Worst Case Scenario

BP Plc’s failure since April to plug a Gulf of Mexico oil leak have prompted forecasts the crude may continue gushing into December in what President Barack Obama has called the greatest environmental disaster in U.S. history.

Ending the year with a still-gushing well would mean about 4 million barrels of oil spilled into the Gulf, based on the government’s current estimate of 12,000 to 19,000 barrels leaking a day. That would wipe out marine life deep at sea near the leak and elsewhere in the Gulf, and along hundreds of miles of coastline, said Harry Roberts, a professor of Coastal Studies at Louisiana State University.

So much crude pouring into the ocean may alter the chemistry of the sea, with unforeseeable results, said Mak Saito, an Associate Scientist at Woods Hole Oceanographic Institution in Massachusetts.

The crude oil could enter a current that would draw it out of the Gulf and up along the East Coast of the U.S. all the way to Nantucket, Roberts, of Lousiana State University, said.

Marine life may take decades to recover, wiping out businesses along the coastline that depend on the fishing and seafood industry.

http://preview.bloomberg.com/news/2010-06-02/bp-gulf-of-mexico-oil-leak-may-last-until-christmas-in-worst-case-scenario.html

[tclambert]

17. I just heard a worse case than that on the TeeVee.

The expert on the Today Show talked about the difficulties of drilling the relief wells. He said it could take several tries to hit the right spot, and the oil might leak FOR YEARS!

[ozymandius]

18. In which case BP will have destroyed an ocean.

The Gulf of Mexico is a nursery for marine life in the Atlantic. Likewise, marine life that people depend on for their livelihoods will be damaged to the point of relative nonexistence or become outright nonexistent.

The worst-worst case scenario scares the hell out of me. No punishment can be too harsh for those responsible for the blowout.

[Loge23]

28. To which Tony Hayward would say:

"Big deal, we still have four more!" (not an actual quote)
But!
The Tony Hayward Greatest Actual Quote Hits collection is rapidly growing:
‘The Gulf of Mexico is a very big ocean,’ he said. ‘The volume of oil and dispersant we are putting into it is tiny in relation to the total water volume.’ Daily Mail 5/14/10 www.dailymail.co.uk/news/article-1278279/
"I'd like my life back" - May 31, 2010 - Various sources.
"...our financial strength will also allow us to come through the other side of this crisis, both financially secure and stronger..."
http://industry.bnet.com/energy/10004504/bp-and-the-oil-spill-what-ceo-tony-hayward-is-telling-employees/

[ozymandius]

30. Dead Man Talking

I see Tony Hayward and see a dead man walking. I hear and read his quotes and hear a dead man talking. He looks and sounds damn near suicidal.

[UpInArms]

33. here are some old lyrics from 10,000 maniacs

Tell me what's gone wrong. I tilt my head there, under the faucet,
but when I turn it on -- dry as paper.
Call the neighbors.
Who's to blame for what's going on?
In the dark without a clue I'm just the same as you.
O, they tell us there's poison in the well,
that someone's been a bit untidy and there's been a small spill.
Not a lot, no, just a drop.
But there you are mistaken, you know you are.
I wonder just how long they knew our well was poisoned
but they let us just drink on.
O, they tell us there's poison in the well,
that someone's been a bit untidy and there's been a small spill.
All that it amounts to is a tear in a salted sea.
Someone's been a bit untidy, they'll have it cleaned up in a week.
But the week is over and now it's grown into years
since I was told that I should be calm, there's nothing to fear here.
But I drank that water for years, my wife and my children.
Tell me, where to now,
if your fight for a bearable life can be fought and lost in you backyard?
O, don't tell us there's poison in the well,
that someone's been a bit untidy, that there's been a small spill.
All that it amounts to is a tear in a salted sea.
Someone's been a bit untidy,
they'll have it cleaned up in a week.

[Demeter]

31. There was a Sci-Fi Short Story About This

The oil company drills the deepest well ever, and instead of hitting oil, a substance like blood gushes out, and the earth dies. I'll see if I can find the title and author...

[AnneD]

67. Bet that blowout preventer cap for 1/2 mil.....

looks real cheap now. I have said it before and I'll say it again....BP has had a poor rep in the oil patch for years. Broke and Patch has been the nickname for years. Exxon's spill years ago was a bit of a surprise but this BP GUlf blow out is not.

Folks off the Gulf coast here have a there but by the grace of God go I attitude. I have purposefully avoided all but the most cursory news coverage of the spill-it is too painful. I have gone out fishing in the Gulf many times. I have crabbed, caught shrimp, and bird watched. In fact, when we went to Galveston on our first post Ike visit, I was saddened by the missing places I remembered but was so happy to see the shrimping boats so close to the shore and I saw more pelicans than I had ever see in my life flocking around. The bay was alive and well and we may be able to seed some of Louisiana's estuaries. I am afraid the hurricane season may just spread the oil and do more damage. I hope that in some unforeseen way it may be a blessing in disguise-but I am not holding out much hope. Like Prince William Sound and the herring Industry-we could lose one of our sea crops. And that would be a tragedy. Exxon didn't pay enough and BP can't either.

To quote Forest Gump-Sometimes, there aren't enough rocks.

[Demeter]

24. I think It Spells Premature Death for the Obama Administration

I don't see how he can recover. Like Carter and the Iranian hostage crisis, Obama will waste away in the Rose Garden going through the motions, and the GOP will have totally plausible deniability, too.

We better have a challenger in the primaries.

[Loge23]

37. Interesting piece by Dowd today in the NYT

Dowd suggests that the narrative is slipping away for the Obama presidency.

I found her take on the Memorial Day observence quite interesting - he seemed so distant that day on the news reports.
http://www.nytimes.com/2010/06/02/opinion/02dowd.html?hp

[Demeter]

51. Now THAT'S a Dowd Column Worthy of Newsprint!

Good to see she can still do it, sometimes.

[AnneD]

68. I saw a bumper sticker today....

Vote No for the Incumbent Parties. It be getting fugly out here.

[Po_d Mainiac]

11. To create another TBTB?

Too Big Too BE :wtf:
:donut:

[ozymandius]

13. Keeping in mind that they are a multinational company -

I do not see why the U.S. government would even consider bailing out BP. Quite to the contrary - I expect the Feds to prosecute civil and criminal cases to the extent that BP's North American presence will cease to be.

[Po_d Mainiac]

23. You misundertook me

Not thinking bailout...RDS coupled with BP would just narrow the field down that much further.

I'm sure that Congress would love to see it (or a similar merger) so they wouldn't have to be seen kowtowing to an evil empire by us un-washed masses.

Would add a whole new meaning to RDS "ruling da senate" or "raging dip shits" Meh, never mind

[ozymandius]

15. BP: Beyond payment?

Bets that BP will default on its bonds hit an all-time high Tuesday, as investors fled the scene of the Gulf of Mexico oil spill.

The cost of insuring against a default on BP (BP) debt soared 79%, according to CMA. The spike came as the London-based company admitted the failure of its latest effort to contain the biggest-ever U.S. oil spill and the government said it would stop holding joint press conferences with the company. Attorney General Eric Holder promised a criminal investigation of the spill.

BP shares have lost $70 billion over the past six weeks, prompting some observers to say the stock is now oversold. But with oil now washing ashore in Alabama and estimates of the cost of cleaning up the disaster skyrocketing, it's clear there's risk even at lower levels.

It now costs $179,000 annually to insure $10 million of BP bonds against default for five years, CMA said. That compares with $350,000 for Transocean and $250,000 for Anadarko.

http://wallstreet.blogs.fortune.cnn.com/2010/06/01/bp-beyond-payment/

[ozymandius]

20. Understating the Benefits of Avoiding Low-Probability Disastrous Consequences

Ritholtz on the deregulatory zeal that brought us the BP disaster:

The big flaw in the business critique of regulation is not so much that it overstates the costs, but that it understates its benefits — in particular, the benefits of avoiding low-probability events with disastrous consequences.

Think of oil spills, mine explosions, financial meltdowns or even global warming. There is a natural tendency of human beings to underestimate the odds of such seemingly unlikely events — of forgetting that the 100-year flood is as likely to happen in Year 5 as it is in Year 95. And if there are insufficient data to calculate the probability of a very bad outcome, as is often the case, that doesn’t mean we should assume the probability is zero.

-Steven Pearlstein

What we have done, in essence, by following the ideologies of the Chicago school and others, is to adopt the Victor Niederhoffer approach to risk. Niederhoffer writes puts on low probability events, and for a few years in a row, he does very well — until he blows up spectacularly. Indeed, the way Nassim Taleb came to prominence was being on the other side of Niederhoffer’s trades.

The deregulatory approach is quite similar: We get faster growth, more profits, but occasional spectacular blowups.

more at The Big Picture

[Demeter]

25. No, It's the AE Neumann Economic Philosophy

[tclambert]

21. From a pure profit point of view, disregarding any outside influence from "morality"

someone buying BP could be a good move. The cleanup effort and the legal fights will cost BP hundreds of millions of dollars, maybe a few billion. But one deep sea oil rig costs billions and they make that back. There are about 3,800 deep sea oil platforms in the Gulf of Mexico (see "oil platform" in wikipedia). Oil companies have been clearing tens of billions in profits. BP can afford to absorb the cleanup and legal costs, spread out over several years, and barely feel it. How much did the Exxon Valdez disaster really hurt Exxon?

Yet BP's stock price has plunged from $60 to $37 and will likely continue to drop for awhile. Somebody could make big bucks here. (Not me. There are limits to what I will do for money. I'd rather invest in drug dealing or prostitution than oil companies.)

[ozymandius]

29. Strong point.

I am surprised Brit Hume at Faux News has not mentioned this with stone faced seriousness. Nonetheless, for ghouls, this could be their moment.

The extent to which BP is damaged looks to dramatically exceed Exxon's exposure. If worst case scenarios emerge then anyone holding BP stock would lose all their money. Bondholders would have some measure of protection against losses.

[Demeter]

34. Another Week of this, and the SMW Readership Ought to Be Able to Buy BP

with our pocket change.

[tclambert]

60. BP stock is up about 2.6% today.

[ozymandius]

65. Did Brit Hume mutter something on the tee-vee?

It looks like ghouls saw a buying opportunity with BP trying to fix this gusher on the cheap.

[AnneD]

69. I found....

about $2.63 in the couch. Should I make a white knight offer?

[Demeter]

70. Only if you REALLY Think It's a Good Price!

Wouldn't want to overpay,,,

[AnneD]

71. You're right....

I'll offer 63 cent and we'll take the two bucks, go to burger King and have lunch and pretend we are eating like kings and wear those paper crowns.

[Demeter]

72. Those crowns are LONG gone!

They disappeared when the Kids were small--and the Younger is 23 next month! Yikes!

[ozymandius]

35. How much worse can it get for BP?

...BP's plummeting share price, although an alarming index of sentiment, poses no immediate danger either for BP or for long-term investors. More worrying are the costs of the catastrophe, for which BP is liable. The $990m price tag for the clean-up and containment attempts so far is easily manageable. And even if costs run as high as $25bn – the top estimate – BP will not go under. The group generated nearly $30bn last year, and oil prices are expected to carry on rising.

That oil may continue to gush into the Gulf until August is bad enough in itself. But there are bigger dangers still. The first is the hurricane season, which will start within days. Meteorologists are predicting a tumultuous 2010 after two relatively quiet years. The timing could not be worse. Not only will storms put a stop to clean-up operations, they will also endanger the rigs drilling the relief wells, and, worse still, could spread the slick way beyond its existing extent. Compensation costs for the Louisiana fishing industries may be high. But if the oil interrupts Florida's tourism, BP's bill will go through the roof.

Worse still for BP, President Obama would be forced to take measures against the group. At the moment, BP has more leases in the Gulf of Mexico than any other oil company. While the administration may be loath to confiscate them as a "nationalisation without compensation", it could make a case that BP failed in its "stewardship of the environment", and invite a syndicate of other oil companies to take the leases over in its stead. And given that the region accounts for some 25 per cent of BP's total production, the impact on the company would be devastating.

The other major risk for BP is the inquiry into the explosion itself. BP's own initial internal investigation has suggested that warning signs may have been overlooked in the hours before the explosion. The US Attorney General, Eric Holder, yesterday visited the Gulf Coast to talk to federal and state prosecutors, and said a criminal and civil investigation had been opened into the spill, raising the possibility that BP could face a prosecution and a punitive fine.

The good news for Britain's pension holders is that even in the worst-case scenario it is almost unthinkable that BP – until recently the UK's largest company – could cease to exist. It is too big a component of British industry for it to be feasibly forced into bankruptcy by the US government. But the doomsday scenario could see BP forced to split off its US operations to absorb the costs, or even the loss of its Gulf of Mexico operations. Such drastic outcomes are still far from being a reality. But they are real enough risks to have wiped nearly £2bn off the value of the company in a single day.

http://www.independent.co.uk/news/business/news/how-much-worse-can-it-get-for-bp-1988968.html

[DemReadingDU]

39. BP Disaster Sinks British Pensions

6/2/10 BP Disaster Sinks British Pensions

BILLIONS of pounds were wiped off the value of pension funds yesterday as shares in BP slumped dramatically because of the Gulf of Mexico oil spill.

One of Britain’s biggest companies and a key indicator of its economy, the oil giant suffered its worst one-day share fall for 18 years.

At its lowest point, the company’s share price was nearly 17 per cent down, although it recovered slightly by the close of trading. Even so, £12billion had been wiped off its market value.

Last night experts were warning that the company had “the smell of death about it” as fears grew that the disastrous leak off the Louisiana coast could continue for another two months after the latest attempt to stem it failed.

Market experts warned that the extraordinary decline of the City heavyweight – a key stock for many UK pension fund investments – would inevitably leave British pensioners poorer.

more...
http://www.dailyexpress.co.uk/posts/view/178568/BP-oil-disaster-sinks-our-pensions/
http://www.zerohedge.com/article/bp-disaster-sinks-british-pensions

[Po_d Mainiac]

42. Factbox: Laws that could be used in oil spill prosecution

(Reuters) - Following are federal laws that could be used to prosecute the companies involved in the oil spill in the Gulf of Mexico, including BP Plc, Transocean Ltd, Halliburton Co and Cameron International Corp, among others.

Clean Water Act - This is the primary law aimed at keeping U.S. waters clean by making it illegal to discharge any pollutants, unless a permit was obtained. It has been used to prosecute offenders who leak pollution into major bodies of water including the Gulf of Mexico as well as lakes, streams and rivers. Civil penalties can include $1,100 per barrel or up to $4,300 per barrel if negligence is found. There are also criminal misdemeanor or felony charges that could be pursued.

Oil Pollution Act - The 1990 law was passed after the 1989 Exxon Valdez spill and expanded the Clean Water Act. It broadened enforcement authority, boosted damages and liabilities as well as mandated contingency planning. It enables the government to hold parties liable for the costs of cleanup and force reimbursement for the government's efforts.

There is a $75 million cap on damages but removal costs are not subject to that limit. Further that cap can be waived if the violator is found to have engaged in gross negligence, willful misconduct or violated federal safety, construction or operating regulations.

Migratory Bird Treaty Act - The law is aimed at protecting migratory birds and makes it illegal to harm some 836 species of birds as well as their nests or eggs. There is no requirement that intent be proven for there to be a violation, an injured or dead bird would constitute a violation.

Endangered Species Act - Passed in 1973, this law makes it illegal to harm or kill any animal on the endangered species list. That includes actions that change or degrade the habitat, feeding, breeding or sheltering of the endangered wildlife. Permits are sometimes issued for violating those restrictions but usually only for conservation and scientific purposes.

SOURCE: U.S. Environmental Protection Agency, U.S. Fish and Wildlife Service.

http://www.reuters.com/article/idUSTRE6506J820100601

[Hugin]

41. My internalized fury over this whole tragedy and the response to it are the main reason...

for my lack of posting lately.

Somehow, it's manifested itself as a type of Selective Mutism.

This is true in my offline life as well and has been commented on by some of my IRL associates.

I'm really not sure what to do about it... :/

I've been robbed of my 1st Amendment Rights by a Corporatist Cluster Fuck.

[Demeter]

43. Rage is Inhibiting in the Civilized

Until a way is found to channel it constructively.

[Tansy_Gold]

44. I agree.

I spent most of yesterday arguing school vouchers with a young man who had fewer than 200 posts and a great deal of, to put it politely, self importance. I'm not sure how I held my patience with him, though the rage did spill out a couple of times. I finslly said screw it, he can have the last word, I'm hiding this thread.

But the oil situation, I can't even talk about it any more. It does indeed feel as if we've pierced the heart of the heart of the earth and it's dying beneath our feet.



Tansy Gold

[ozymandius]

46. I'm sorry I missed that exchange, Tansy.

I would have enjoyed taking a few whacks at his argument.

I am so sick of my fellow humans (favored company excepted, of course) because we arrogate ourselves such self-importance. Dispensationalist bullshit about the earth being ours to subdue and exploit drives me nuts. If any pleasure comes from this - it will be in the form of schadenfreude watching those who've enriched themselves from this hellish endeavor choke on their own venom.

[Tansy_Gold]

58. It's over in GD, Ozy. The subject line is something about

an interesting film from Davis Guggenheim. If I didn't have the thread hidden, I'd give you the link. It has close to 200 replies, so you should be able to find it. His name is BrentWil.

He claims to be a grad student at Kansas State, in what subject I have no idea. Maybe I and the others on my side were wrong, maybe he's correct, but he had no supporters.

I suspect the film, which is from the same producer as "An Inconvenient Truth," will garner much support for the anti-teacher movement, although reviews of the film online have drawn a lot of criticism from the profession. Not that I expect much to come of that.

But I'm in a bad mood. My daughter the school speech pathologist -- the perfect student whom every teacher loved, the should've been valedictorian, the private college scholarship winner, the dedicated social worker until she got burned out and who went back to school to get her master's while working full time and having a baby and completely remodeling their barely affordable little house -- was laid off a couple weeks ago in the latest of Gov. Christie's budget slashing moves in NJ. She is stoic about it, but because her husband is a teacher in another district, they are understandably concerned. She had tenure, too, and it meant nothing. She said there are already lawsuits filed.


TG

[Demeter]

62. My condolences to the family

what are the authorities thinking? Are the authorities thinking?

[ozymandius]

64. I am very sorry, Tansy, for your daughter's hardship.

It is a bad time to be a teacher in a state with a Republican governor, and even worse with a Republican legislature too. I have never seen a group of people so enchanted with the promotion of ignorance.

One note of encouragement: these budget slashing tactics will not endear those in office to the voters. And you can bet they will be tossed to the wolves winds come the next election. As a school speech pathologist, she should have little difficulty finding another position - speaking from a Georgia perspective. I certainly wish her and the family a swift recovery from this low blow.

[Dr.Phool]

47. It's bad.

We've become a nation of morons, without critical thinking ability. And no long term memory.

Yesterday, the usual suspects in GD-Jonestown, discussing what a great idea a VAT is. I give up.

[ozymandius]

12. Hedge Funds Post Biggest Monthly Losses Since Lehman Crisis

John Paulson, Louis Bacon and Andreas Halvorsen navigated the global market turmoil of 2008 with little or no damage. They weren’t as successful last month as the Dow Jones Industrial average had its worst May since 1940.

Hedge funds lost an average of 2.7 percent through May 27, according to the HFRX Global Hedge Fund Index, as the sovereign debt crisis in Europe triggered declines in stocks, the euro and commodities, and the gap in yields between U.S. short-term and long-term debt narrowed. It was the biggest decline since November 2008, when hedge funds lost 3 percent in the wake of Lehman Brothers Holdings Inc.’s bankruptcy two months earlier.

Almost every strategy lost money in May, according to Hedge Fund Research Inc. in Chicago, as the Dow index of 30 big stocks sank 7.6 percent including dividends amid speculation that Greece’s debt problems would spread to nations such as Spain and Portugal. Some of the best-known funds saw their gains for this year erased.

Paulson’s Advantage fund dropped 6.9 percent through May 21, dragging it to a year-to-date loss of 3.3 percent, according to investors with knowledge of the results, who asked not to be named because the information is private. Halvorsen’s Viking Global fund fell 3.4 percent in the same span and 2.9 percent for the year. Bacon’s Moore Global declined 7.7 percent as of May 20 and 4.8 percent in 2010, investors said.

Their bets on falling stocks didn’t make enough money to counter losses in shares the managers expected to climb. Commodities retreated 8.2 percent in May, as measured by the UBS Bloomberg CMCI Index. Traders who positioned themselves for the U.S. yield curve to steepen, a sign of expected economic growth, suffered losses when the difference between payouts on two-year and 10-year Treasury notes narrowed instead.

http://preview.bloomberg.com/news/2010-05-31/paulson-drops-6-9-as-hedge-funds-post-biggest-monthly-losses-since-lehman.html

[Roland99]

19. Financial Regulation: The Devil in the Details

Financial Regulation: The Devil in the Details

(Roubini email)

The SEC’s case against Goldman Sachs has revitalized the regulatory reform dialogue and renewed concerns of earnings volatility and valuations. The outcome is of little consequence now that Goldman Sachs, and by association other large banks, have been publicly vilified. The case has demonstrated the logic behind Glass-Steagall, calling into question the remit and obligations of entities that operate under the protection of implicit federal assistance.

The Volcker rule aims to unbundle highly risky activities from the institutions we entrust with our savings by pulling the shadow banking system under the scrutiny of regulation. However, it could fall victim to “soft-touch” habits by allowing financial institutions control of its interpretation. Ideally, universal banks would be disaggregated into smaller specialized entities whose risk profiles could be more accurately priced by investors while insured deposit-takers would be restricted in their activities. Removing the expectation of federal assistance would reduce the impact and frequency of failures. Yet we are a long way away from such a potentiality.

The core dilemma in regulatory reform entails a choice between a robust financial system and leverage-fueled economic growth. Derivatives that allow banks effectively to “shed” risk, to free capital, and to grow more and faster, have become a focal point. Current proposals, aimed at decreasing the counterparty risk of individual participants or banning certain products, fail to combat the mispricing of risk, which enabled significant leverage. Legislation though, is only one step and the devil will be in the details.

Greater regulation will potentially alter relative valuations and should reduce price volatility across the capital structure. In its most “effective” form, it should reduce potential leverage/credit growth and lead to more sustainable macroeconomic growth. The bulk of the impact will affect equity through repeated bouts of volatility due to earnings uncertainty on the back of litigation risk and political/regulatory risk as completed legislation gives way to debates on specific standards.

In isolation, these rules would have a marginal effect on the largest U.S. banks, but in aggregate, they could account for anywhere from 10-25% of annual earnings, depending upon asset allocations and the cycle, which should have a negative effect on sustainable earnings power and ROE (and therefore equity valuations). These potential effects do not consider the impact of potential size caps nor do they capture the ancillary, albeit potentially significant effect on earnings and credit extension implicit in a systematic reduction of leverage in the financial system. The full extent of the impact will depend upon the details of implementation. This rule would have the most significant impact on brokers, but universal banks would face negative repercussions as well.

The Volcker Rule is a step in the right direction in that it aims to withdraw federal assistance expectations from entities that engage in risky activities, therefore reducing moral hazard and bringing parts of the shadow banking system under regulation. It would reduce a volatile form of income, but falls short of addressing conflicts and the continued leveraging of insured deposits in securities underwriting. Its utility and potential loopholes will rely upon how prop trading is defined. While there is no such Volcker rule on the table in the EU, there is a strong impetus in the EU to bring alternative investments under greater regulatory oversight (to the chagrin of the UK). Recent proposals envision significantly increased disclosure requirements, minimum capital and liquidity requirements, and greater investor protections. Stopping short of a ban could limit the earnings impact associated with passage of the Volcker rule in the United States. However, should a Volcker rule be implemented in Europe, earnings in the European “core” (UK, France and Germany) and Switzerland would be most affected, given that these countries have the largest universal/investment banks.

RGE believes that more radical reforms like eliminating the “too-big-to-fail” card and adopting Glass-Steagall-like regulation that unbundles different types of financial activity is necessary to ward off asset bubbles and combat systemic risks, but may not be feasible for political reasons. In the event of a Glass-Steagall type separation, we would expect a divergence in credit spreads between banks with and without insured deposits (a differential that would fluctuate with the credit cycle, and would be tighter at the top), but expect the cost of credit for depository institutions to be very close to sovereign risk. On the flip side, dilution risk will be concentrated in depository institutions. We could see higher PEs/ROEs in the non-depository institutions, though the ability to increase leverage will be dependent upon the level of regulation of non-depository institutions. All of this, of course, rides upon the credibility of regulatory agents and the utility of the reform.

[tclambert]

26. Buffett to testify before financial crisis panel

By STEVENSON JACOBS (AP) – 7 hours ago

NEW YORK — Billionaire investor Warren Buffett and the CEO of credit rating agency Moody's Corp. are scheduled to face questions Wednesday from a bipartisan panel probing the roots the financial crisis.

The congressionally chartered Financial Crisis Inquiry Commission subpoenaed Buffett to appear at the New York hearing on the credibility of credit ratings and the investments made based on those ratings.

Rating agencies like Moody's, Standard & Poor's and Fitch Ratings have been criticized for giving unrealistically high ratings to complex investments backed by risky mortgages and other assets. When homeowners started defaulting on their mortgages, the rating agencies downgraded billions of dollars of investments at once. That helped spark the financial crisis.

Buffett will appear alongside Moody's Corp. CEO Raymond McDaniel. Berkshire Hathaway, which Buffett leads as chairman and CEO, is Moody's largest shareholder.

more at: http://www.google.com/hostednews/ap/article/ALeqM5iJIc7q3-D3yK_B26PmMHt3Wu4algD9G2TJBO2
____________________________________

I find Warren Buffett quite entertaining. So I thought this might be interesting.

[Demeter]

32. I Think Slick Warren Just Got His Foot Stuck in the Door

[ozymandius]

36. Why is Washington Dithering with Unemployment High?

Brad DeLong points out that Ronald Reagan was far more concerned about unemployment than Team Obama (or Washington generally) is, and also took far more aggressive measures to combat it. From The Week (hat tip reader Marshall):

By the start of 1983, labor unions were frantically giving back previously-promised wage increases and offering wage cuts to employers who were delighted to reopen labor contracts. The unemployment rate hit 10.5 percent. The Mexican government was bankrupt. And the Federal Reserve began shifting course, acknowledging that its policies had overshot their mark.

Washington, D.C. was in a panic. With high unemployment perceived as a genuine national emergency, the Federal Reserve embarked on a policy of massive monetary ease. The Reagan administration promised that the deficits created by its 1981 tax cuts and increased defense spending were the recipe for putting America back to work. Everybody had a plan to reduce unemployment. And every lobbyist or speculator with a scheme unrelated to jobs recast his pet project as a magic unemployment-reducing bullet.

Today, the unemployment rate is kissing 10 percent. Global financial markets are sending us a message that the excess demand for high-quality financial assets is growing again.

Yet, unlike 1983, there is no sense of urgency in Washington.

Yves here. The fact that Washington is wildly out of touch with America becomes more apparent with every passing day. Pat Caddell (pollster to Carter, who has since left the Democrats) has told me that he has never seen anything like the gap in responses on various issues between the population and the governing apparatus in the capital.

So what explains this bizarre, self-destructive posture? One simple explanation is that the neoclassical economics orthodoxy has become so hopelessly entrenched despite its manifest failure (witness the crisis) that few can see how deeply captured they are by its ideology. A key tenet is the demonization of organized labor, combined with a refusal to recognize that many forms of commercial activity tend to lead naturally to agglomeration of power. Thus unions serve as a useful counterweight to concentrations of corporate power.

Before I hear reader howls, it is important to recognize that anti-union sentiments have been marketed aggressively since the early 1980s. I grew up with a father who ran major manufacturing operations, dealt with multiple unions throughout his career, and was horribly right wing. I never once heard him say anything bad about unions. Similarly, I graduated from Harvard Business School in 1981. I cannot recall a single person at the school, either faculty or students, criticizing unions. And this was after a near-decade of stagflation, with Japanese and German manufacturers on the rise. Germany, then as now, had strong unions; Japan did not, but was famous for having enlightened policies towards workers. In other words, treating workers decently was not seen as contradictory to economic might.

It is perverse that unions for middle and lower income workers are demonized, but unions for the educated, like the legal, accounting, and medical professions, get nary a second thought.

http://www.nakedcapitalism.com/2010/06/why-is-washington-fiddling-with-unemployment-high.html

[Demeter]

52. Because the Fix Is In, and Voters Aren't Necessary Anymore

That is the only conclusion I can draw. Reagan knew he had to keep the sheeple employed, even as he drained their pensions, broke their unions, and shipped their best jobs overseas, or they wouldn't vote for his second term.

Bush Senior ignored this necessity and was handed his hat after 4 years. But Junior fixed the pesky voter problem forever.

[ozymandius]

55. Starting with Nixon

The "Southern Strategy" defined by social wedge issues used to split the electorate based on their prejudices (read: bigotry) helped send votes to the GOP. Really this was the foundation for the religious right's ascension (no pun intended) in American politics with Reagan. The rest of the right's electoral strategy was a "bread and circuses" campaign.

For anyone reading this who is unfamiliar with "bread and circuses" - it comes from the Roman idea that the electorate can be bought into giving up their civic duty with handouts that amount to bribes. In the American sense: this amounts to the electorate being bribed with its own money. Tax cuts for the wealthy, for example, have been marketed under Republican administrations as "tax cuts for all" while being regressively structured to favor the rich. Easy credit in lieu of an increase in the minimum wage (or living wage, as is often the case) is another. Debt has been so easy so acquire so that people can buy distractions. Not so easily done anymore...

Edited to add: "Bread and circuses" violates one of the foundations of economics: There Is No Such Thing As A Free Lunch (TINSTAAFL).

[Demeter]

63. There is if you have enough money

http://www.youtube.com/watch?v=YnIW-eIAJxE

[ozymandius]

38. Fannie Mae: Serious Delinquencies decline in March

Fannie Mae reported today that the rate of serious delinquencies - at least 90 days behind - for conventional loans in its single-family guarantee business decreased to 5.47% in March, down from 5.59% in February - and up from 3.13% in March 2009.

"Includes seriously delinquent conventional single-family loans as a percent of the total number of conventional single-family loans."

This is the first decline since early 2006 and could be because Fannie (and Freddie and the FHA) are moving ahead with foreclosures.

Even with all the delays in foreclosure, the REO inventory has increased sharply over the last three quarters, from 135,868 at the end of Q2 2009, to 153,007 in Q3 2009, 172,357 at the end of Q4 2009 and now 209,500 at the end of Q4 2010.

http://www.calculatedriskblog.com/2010/06/fannie-mae-serious-delinquencies.html

[Roland99]

40. Index Futures: Protecting that 10K

S&P 500 1,072 +2.50 +0.23%
DOW 10,040 +21.00 +0.21%
NASDAQ 1,842 +11.00 +0.60%

[midnight]

45. I'm glad that I clicked on this post. First I want to say the cartoon at

the bottom is over the top concerning.... Second, that the new supreme court justice voted to change our miranda rights. Thirdly I really have never had interest in the stock market, but it became interesting after the lobbiest for the insurance co. wrote the new health bill. So after we collapse the middle class who will purchase their plastic trinkets?

[Dr.Phool]

48. Welcome to SMW.

We're here every day, just posting and analyzing things we learn. We figure the est thing we can do is stay informed and prepare appropriately. We have some fun too.

[ozymandius]

49. Welcome, midnight, to the SMW

All of your points of concern are addressed regularly here. Of particular interest is the hollowing out of the middle class through public policy decisions. We pay close attention to to those policies that favor those concerned more with personal profit than with the common good.

So who will buy their plastic trinkets when the market for them has disappeared? That is a question for which there is little evidence that it has been considered by bauble makers.

[Demeter]

53. Goldman Sachs sold $250 million of BP stock before spill

http://rawstory.com/rs/2010/0602/month-oil-spill-goldman-sachs-sold-250-million-bp-stock/

The brokerage firm that's faced the most scrutiny from regulators in the past year over the shorting of mortgage related securities seems to have had good timing when it came to something else: the stock of British oil giant BP.

According to regulatory filings, RawStory.com has found that Goldman Sachs sold 4,680,822 shares of BP in the first quarter of 2010. Goldman's sales were the largest of any firm during that time. Goldman would have pocketed slightly more than $266 million if their holdings were sold at the average price of BP's stock during the quarter.

If Goldman had sold these shares today, their investment would have lost 36 percent its value, or $96 million. The share sales represented 44 percent of Goldman's holdings -- meaning that Goldman's remaining holdings have still lost tens of millions in value...

[Hugin]

56. It would be interesting to mesh this with the revelation over the weekend in the NYT...

that problems with the DWH drilling project had started as early as March.

Insider? Nah, GS would never do something like that. :eyes:

[ozymandius]

Well, they are ONLY human.

As they are greedy, nasty humans - I would not be surprised if they bought life insurance policies on the oil rig workers.

[ozymandius]

57. oops

dodgy mouse double-clicked

[DoBotherMe]

59. K&R

Kicked the wrong thread (yesterday's). Dana ; )

[tclambert]

61. Sinkhole in Guatemala: Giant Could Get Even Bigger

Ker Than
for National Geographic News
Published June 1, 2010

A huge sinkhole in Guatemala City (map), Guatemala, crashed into being on Sunday, reportedly swallowing a three-story building—and echoing a similar, 2007 sinkhole in Guatemala.

The sinkhole has likely been weeks or even years in the making—floodwaters from tropical storm Agatha caused the sinkhole to finally collapse, scientists say.

The sinkhole appears to be about 60 feet (18 meters) wide and about 30 stories deep, said James Currens, a hydrogeologist at the University of Kentucky.


http://news.nationalgeographic.com/news/2010/06/100601-sinkhole-in-guatemala-2010-world-science/
_____________________________________

Not a financial story, but very interesting. Great photo. The sinkhole appears to be almost a perfect circle and leads down close to 300 feet, right to the doorway of an underground pyramid overrun with ALIENS. I'm rooting for the Predators.