STOCK MARKET WATCH, Monday, September 26, 2011

[Pale Blue Dot]

Source: du

STOCK MARKET WATCH, Monday September 26, 2011

AT THE CLOSING BELL ON September 23, 2011

Dow 10,771.48 +37.65 (+0.35%)
Nasdaq 2,483.23 +27.56 (+1.11%)
S&P 500 1,136.43 +6.87 (+0.60%)
10-Yr Bond... 1.85 +0.01 (+0.71%)
30-Year Bond 2.91 +0.01 (+0.21%)

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren
Dishonorable Mention: former House majority leader, Tom DeLay

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

Financial Sector Officials Convicted since 1/20/09 = 12

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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

[Pale Blue Dot]

1. Today's Report

Sep 26 10:00 New Home Sales Aug 290K 293K 298K

Read more: http://www.briefing.com/investor/calendars/economic/#ixzz1Z3Wf6oVz

[Pale Blue Dot]

2. Oil near $79 as Europe debt crisis moves awaited

BANGKOK – Oil prices fell below $79 a barrel Monday in Asia as markets awaited Europe's next moves to tackle a prolonged debt crisis that threatens to drag the continent into recession.

Benchmark oil for November delivery was down $1.12 to $78.75 at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. Crude fell 66 cents to finish at $79.85 per barrel on the Nymex on Friday.

In London, Brent crude for November delivery was down 59 cents at $103.38 on the ICE Futures exchange.

U.S. Treasury Secretary Timothy Geithner told his European colleagues Saturday at the annual meeting of the International Monetary Fund that Europe's governments must join with the European Central Bank to solve Greece's debt crisis once and for all.

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

[Pale Blue Dot]

3. U.S. Stock Futures Advance; Dow May Rebound From Biggest Drop Since 2008

U.S. stock futures rose, indicating the Dow Jones Industrial Average will rebound from the biggest weekly decline since October 2008, as investors weighed policy makers’ response to Europe’s debt crisis.

General Electric Co., the world’s biggest maker of jet engines, and McDonald’s Corp. rose in European trading.

Standard & Poor’s 500 Index futures expiring in December climbed 0.7 percent to 1,137.4 at 10:39 a.m. in London after earlier rising and falling as much as 1.3 percent. Dow average futures advanced 49, or 0.5 percent, to 10,746.

Finance ministers and central bankers urged European officials to intensify efforts to contain their 18-month debt crisis as Greece teetered on the edge of default. Bank of Canada Governor Mark Carney estimated 1 trillion euros ($1.3 trillion) may have to be deployed. U.K. Chancellor of the Exchequer George Osborne said a solution is needed by the time Group of 20 leaders meet in Cannes, France, on Nov. 3-4.

http://www.bloomberg.com/news/2011-09-25/u-s-stock-futures-slump-as-europe-fails-to-take-steps-to-contain-crisis.html

So, right back up again this week?

[Demeter]

7. Maybe, Maybe Not

The Rubes are getting restless, and the presses are getting tired.

[Demeter]

37. I'd Guess "Not"

Europe's sinking like a souffle, and the old PPT just can't get it up this morning...

[Demeter]

44. Although they will keep trying

I'd lay odds they won't succeed, and after 3:15, there's a net loss for the day.

[bread_and_roses]

14. "Let the games begin" (n/t)

[xchrom]

39. Stocks Weaken as Apple Leads Tech Lower

http://www.bloomberg.com/news/2011-09-25/u-s-stock-futures-slump-as-europe-fails-to-take-steps-to-contain-crisis.html

U.S. stocks were little changed, after erasing an earlier rally, as Apple Inc. led technology shares lower after an analyst said it is cutting orders for iPad parts and data showed new-home sales fell to a six-month low.

Apple slumped 2.7 percent after JPMorgan Chase & Co. said several supply-chain vendors indicated the company lowered fourth-quarter iPad orders by 25 percent. Schlumberger Ltd. and Newmont Mining Corp. slumped at least 1.3 percent as commodities fell. PulteGroup Inc dropped 2.2 percent, pacing losses in homebuilders. JPMorgan Chase & Co. rose 2.3 percent, as the European Central Bank is said to consider restarting covered- bond purchases along with measures to ease monetary conditions.

The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,135.99 at 10:34 a.m. in New York. The Dow Jones Industrial Average added 47.98 points, or 0.5 percent, to 10,819.46 today.

“The economic numbers say -- yes, it’s weak, it’s sluggish, but it still looks different than three years ago,” Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc., said in a telephone interview. His firm oversees $3.66 trillion as the world’s largest asset manager. “If you start to have evidence of the 2008 financial crisis, stocks are going to get cheaper. You had some quasi-positive comments out of Europe. Still, the situation in Europe is a near term risk.”

[Warpy]

55. Look at what's happening to oil

That loud hiss you hear is the air being let out of the spot market futures bubble. There are other commodities bubbles out there and smart money is being pulled out of those.

Since there's a limit to the housing that can be bought up by vulture funds, a lot of that smart money is going back into stocks, at least short term, until they start the bubble cycle again.

[Demeter]

56. You mean, Positions are being abandoned

because nobody wants to be caught holding a bank of dog poop that they have to pay for...

[Warpy]

76. They just wait for the suckers to rush in

to take advantage of a boom that suckers always think is going to last long enough for them to cash in. Once the suckers come in, the big money pulls out and the suckers are left holding the dog shit futures.

[DemReadingDU]

4. toon: should be banker heads

[Demeter]

13. Soon, DRDU, Soon

Patience has a limit.

[xchrom]

5. good morning! -- and for your listening pleasure...

http://www.youtube.com/watch?v=OmBxVfQTuvI dinah washington -- what a difference a day makes.

:donut:

[Tansy_Gold]

43. Indeed

My a/c quit Saturday night.

[Demeter]

45. How long will you need it till winter?

[Tansy_Gold]

46. At least another month

And of course the same unit provides heat, which *I* could squeak through the winter without but other people in the household can't. Know what I mean?



It's always something.

[xchrom]

53. wow -- that's no fun. nt

[xchrom]

6. europe: Barclays and Aviva lead FTSE 100 higher

http://www.marketwatch.com/story/fresnillo-randgold-lead-ftse-100-lower-2011-09-26?dist=markets

LONDON (MarketWatch) — Gains for banks and other financials helped lift the U.K.’s benchmark index Monday amid hopes for a more concerted response to the European debt crisis, while mining stocks mostly fell.

The FTSE 100 index /quotes/zigman/3173262 UK:UKX +1.13% recovered from an early drop to trade up 0.9% at 5,114.52 in afternoon action.

Other European markets were also sharply higher as bank stocks soared amid hopes for an expanded European rescue fund and as Ewald Nowotny, a member of the European Central Bank’s governing council, reportedly said an interest-rate cut can’t be ruled out. See Europe Markets for more on the gains for bank stocks.

[xchrom]

10. Demonstrators take to streets to protest against home seizures

http://www.elpais.com/articulo/english/Demonstrators/take/to/streets/to/protest/against/home/seizures/elpepueng/20110925elpeng_2/Ten

Thousands of people marched through several of Spain's biggest cities on Sunday to protest against banks seizing the homes of borrowers unable to meet their mortgage repayments.

The marchers called for a change to Spanish mortgage law, which currently allows banks to not only reclaim property, but also to freeze borrowers' accounts and other assets until the full debt is paid.

Since 2007, more than 200 families a day have lost their homes. An organization representing borrowers in difficulty has staged a series of sit-ins aimed at preventing officials from carrying out evictions.

The organization is also calling for Spain to introduce walk-away mortgages, whereby those in debt can simply return the keys to the bank, thus canceling out their debt. The move has been blocked in parliament by both main parties.

[xchrom]

11. Spanish banks outraged by funding-boost hint

http://www.elpais.com/articulo/english/Spanish/banks/outraged/by/funding-boost/hint/elpepueng/20110923elpeng_7/Ten

Spanish banks have reacted with indignation to suggestions from a European Union commissioner that they need to recapitalize.

In an interview published Thursday in French daily Le Figaro, the European commissioner for the internal market, Michel Barnier, said the 16 European banks that barely passed the stress test under the auspices of the European Banking Authority (EBA) in July needed to seek more funding.

Seven of the 16 referred to by Barnier are Spanish, including Bankia, Banco Popular, Banco Sabadell, Novacaixagalicia, Banca Cívica, Bankinter and Caixa Ontinyent.

None of the banks in question wanted to go on record but the overriding feeling was that Barnier's remarks were "irresponsible." José Carlos Díez, the chief economist with Intermoney, went further. "Barnier should resign because he can't make such accusations without proof," he said. "The only thing that can save him is for him to explain with concrete figures what the capital needs of the banks are and why."

[xchrom]

12. UBS Shares Rise on Chief’s Departure

http://dealbook.nytimes.com/2011/09/26/ubs-shares-rise-on-ceo-departure/

Shares of the UBS rose more than 3 percent on Monday, after the resignation of its chief executive, Oswald J. Grübel.

Mr. Grübel stepped down after a rogue trading scandal that cost the embattled Swiss bank $2.3 billion. He told his staff in an e-mail on Saturday that “it is in the best interests of UBS to approach the future with a new leader.”

UBS tapped Sergio P. Ermotti, head of Europe, the Middle East and Africa for the bank, as chief executive on a interim basis. The board is now looking for a permanent successor, a search that could take up to six months.

Investors are being cautious about the bank’s prospects. In trading on Monday, shares of UBS were selling below the price before scandal broke in mid-September.

[Demeter]

15. One has to wonder what they are drinking over there

They think they've pulled it off, again. Led by General Timmy...and friend.

[xchrom]

20. ...

:spray:

[xchrom]

21. Eurozone rescue plan 'emerging' as IMF and Greece talk

http://www.bbc.co.uk/news/business-15055713

The outline of a large and ambitious eurozone rescue plan is taking shape, reports from the International Monetary Fund (IMF) in Washington suggest.

It is expected to involve a 50% write-down of Greece's massive government debt, the BBC's business editor Robert Peston says.

The plan also envisages an increase in the size of the eurozone bailout fund to 2 trillion euros (£1.7tn; $2.7tn).

European governments hope to have measures agreed in five to six weeks.

[xchrom]

22. German business sentiment falls further, Ifo says

http://www.bbc.co.uk/news/business-15062564

German business sentiment has fallen for the third month in a row, a survey has indicated, but the decline was less than analysts had expected.

The business climate index from the Ifo economic think tank fell to 107.5 in September, its lowest showing since June 2010, from 108.7 in August.

Ifo said firms were concerned that the continuing eurozone debt crisis could affect the wider economy.

It added that the large manufacturing sector was particularly cautious.

[xchrom]

8. asia: Asia stocks drop as Europe debt fears linger

http://www.marketwatch.com/story/asia-stocks-weak-but-australia-shares-gain-2011-09-25?dist=markets

MUMBAI (MarketWatch) — Asian stocks fell sharply Monday, adding to recent losses, as a lack of apparent progress on solving Europe’s sovereign-debt problems fueled risk aversion and sent investors out of equities.

Japan’s Nikkei Stock Average /quotes/zigman/5986735 JP:NIK -2.17% ended down 2.2%, catching up with a heavy sell-off in Asia on Friday when the Tokyo market was closed for a holiday.

Hong Kong’s Hang Seng Index /quotes/zigman/2622475 HK:HSI -1.48% fell 1.5%, while the Shanghai Composite Index /quotes/zigman/1859015 CN:000001 -1.64% lost 1.6%, South Korea’s Kospi KR:0100 -2.64% lost 2.6% and Australia’s S&P/ASX 200 index /quotes/zigman/1653884 AU:XJO -1.01% declined 1.1%.

Some of the smaller markets were seeing severe selling, with the Stock Exchange of Thailand Index zooming down 5.8%, while the Jakarta JSX Index was down 3.8% in Indonesia. Read more on Southeast Asian stock sell-off.

[xchrom]

18. Japan eyes rare earth deal with Myanmar

http://search.japantimes.co.jp/cgi-bin/nn20110926a2.html

Japan plans to jointly develop rare earth metals and other natural resources with Myanmar as it attempts to diversify its supply chain for the minerals, which are used in a slew high-tech goods, sources close to the matter said Sunday.

The move was prompted by China, which virtually has a monopoly over rare earth metals but reportedly stopped shipments to Japan last year during an escalating diplomatic spat.

Japan is informally sounding out Myanmar about sending Foreign Minister Wunna Maung Lwin to Japan later this year to advance the plan, the sources said.

But the strengthening of economic ties between the two countries might be criticized as premature on the grounds that Myanmar has been slow to advance toward democracy, although it nominally shifted to civilian rule in March.

[xchrom]

19. Taiwan, Japan sign investment pact

http://search.japantimes.co.jp/cgi-bin/nb20110923a3.html

Taiwan and Japan on Thursday signed an agreement that lowers bilateral investment barriers, a significant step toward an eventual free-trade deal between the two countries.

In the absence of diplomatic ties, the agreement was signed in Taipei by Mitsuo Ohashi, chairman of the Japan Interchange Association, and his Taiwanese counterpart, Peng Run-tsu, chairman of Taipei's East Asian Relations Commission.

The accord covers three areas: trade liberalization, trade promotion and protection of investment. It will now be sent to Taiwan's Parliament, the Legislative Yuan, for review before it enters into force.

The investment arrangement is the first economic deal Taiwan has signed with a nonallied country since Taipei and Beijing inked a preferential free-trade agreement in June last year.

[xchrom]

23. Mongolia eyes 50% stake in key Oyu Tolgoi project{rio tinto}

http://www.bbc.co.uk/news/business-15056287

Mongolia is seeking greater control of one the biggest mining projects in the country, which is being developed by Rio Tinto and Ivanhoe Mines.

The government said it wants to raise its stake in the Oyu Tolgoi project to 50% from 34%.

According to the original contract signed in 2009, Mongolia can increase its stake only after 30 years.

When completed, the project is expected to account for as much as 5% of Mongolia's gross domestic product.

[xchrom]

35. Asia slide deepens

http://www.atimes.com/atimes/Asian_Economy/MI27Dk01.html

MONTREAL - The MSCI Asia Pacific Index closed last week down 5.7% (including a 4.1% drop on Thursday alone) to 111.73, with all significant short-term technical indicators negative, including the absence of an oversold signal.

The index is now only 2.7% off the lower bound of the lowest (108.8-118.7) of its three contiguous post-crisis trading ranges. Volatility increased all over, and was higher in the historically less volatile markets than in those usually most volatile.

Correlation between volatility and percentage loss was a significantly high +0.81. There was no stratification by sub-region, and within sub-regions there was little homogeneity. This makes for individually orderly declines within the general disorder.

The Australian All Ordinaries Index was the least volatile in all of


Asia, but to say that its loss of 5.9% was a median performance tells the kind of week it was. The index stood at 3,978 at the end of the week, within striking of a long-term potential support (based January 1991 and November 2008) at 3,918. The level of that support rises about four points per week. Below it, there is only choppy support down to 3,500s. Short-term technical indicators are mostly negative except for one or two that are closer to neutral. Momentum turned increasingly negative throughout the week. The index is approaching an oversold situation but is not there.

The Greater China complex was well stratified. Hong Kong was the second-most volatile and second-biggest loser; Taiwan, the fourth on both counts; Shanghai, the sixth-most volatile but second least-bad performer.

[xchrom]

38. Asian Central Banks Signal Rate Rises Off Table as Europe Crisis Deepens

http://www.bloomberg.com/news/2011-09-26/asian-central-banks-signal-rate-rises-off-table-as-europe-crisis-deepens.html

Central bankers from three Southeast Asian nations signaled that global financial-market turmoil will diminish inflation pressures in their economies, making interest-rate increases unlikely in coming months.

Bangko Sentral ng Pilipinas will probably refrain from boosting rates for the rest of 2011, Governor Amando Tetangco said in a Sept. 24 interview. Thailand’s central bank may cut its economic growth projections, Governor Prasarn Trairatvorakul said the same day. Bank Negara Malaysia Governor Zeti Akhtar Aziz said yesterday her country’s inflation has probably peaked.

The reduced likelihood of rate increases may curb demand for Asian currencies, which already last week tumbled the most since the region’s financial crisis in 1998, as investors flocked to the U.S. dollar as a haven. Policy makers may turn to cutting commercial banks’ reserve requirements as their next response, Standard Chartered Plc economists said today.

“Growth concerns are beginning to outweigh inflation worries,” said Robert Prior-Wandesforde, Singapore-based head of India and Southeast Asia economics at Credit Suisse Group AG. “It doesn’t make sense for interest-rate increases given the stock market rout we’ve seen.”

[xchrom]

9. Gold and silver futures extend losses

http://www.marketwatch.com/story/gold-silver-extend-tumbles-in-asia-2011-09-26?link=MW_popular

LONDON (MarketWatch) — Gold and silver futures fell further Monday following dramatic drops late last week, as investors hedged against a possible global liquidity crunch and reacted to increases in margin requirements.

Gold for December delivery /quotes/zigman/661658 GC1Z -1.41% dropped $16.40 to $1,623.40 an ounce in electronic trade on Globex. Gold futures pared some of their losses after slumping below $1,600 an ounce in earlier trade.

December silver futures /quotes/zigman/663010 SI1Z -4.74% fell 42 cents, or 1.5%, to $29.68 an ounce on Monday, also paring earlier declines.

“Europe’s ‘Lehman moment’ is here, interbank lending seizing up, credit spreads rising, investors fleeing all risk in a liquidation phase,” said Robert Howe of Hong Kong-based hedge fund Geomatrix in a note.

[xchrom]

16. Catching up is so very hard to do

http://www.economist.com/node/21530122



THIS month Italy’s government sold a slug of five-year paper at one of its regular bond auctions. There was barely enough demand for the bonds to meet supply, even at a steep interest rate. Contrast that with the sale in August of 20 billion yuan ($3.1 billion) of paper by China in Hong Kong’s fledgling offshore market. The yield was miserly yet there were more than four times as many bids as there were bonds for sale.

This tale of two bond auctions is a parable for the contrasting fortunes of near-stagnant rich economies and fast-growing emerging markets. Twenty of the 42 economies covered in the back pages of The Economist grew by 3% or more in the year to the latest quarter. Only two of these, Austria and Sweden, are from the traditional group of rich countries. The rest are developing economies, such as Brazil and Turkey, or newly rich ones, such as Taiwan and Hong Kong. The IMF’s latest forecast is that emerging economies will grow by more than 6% in 2011 and 2012. But growth in the rich world is likely to be below 2%.

The other half lives

The rotten economic news over the summer and the deepening euro-zone mess mean it is easy to forget that countries that now account for half the world’s output and most of its population are doing rather well. That is the focus of our special report on the world economy this week. But it is equally easy—and unwise—to think that rapid and trouble-free growth in the emerging economies is assured for years to come.

It seems almost churlish to question the outlook for emerging markets after the great strides they have made. China and India are twice as rich as they were a decade ago, taking millions out of poverty. Nor is the good news confined to the two Asian giants. Even before the global financial crisis battered the rich world, dozens of emerging markets were growing at a faster rate than America, the world’s leading economy. The crisis has merely widened what was already a large gap.

[xchrom]

17. Protectionism in Argentina Keep out

http://www.economist.com/node/21530136

IN RECENT years BlackBerrys have become an essential component in the young professional’s toolkit in Buenos Aires. But if you failed to buy one before the southern-hemisphere winter, you may be out of luck. “We have trouble getting them,” says an assistant at a Claro mobile-phone store in posh Recoleta. “We haven’t had them for months,” is the answer at a Personal shop in leafy Palermo. Movistar advertises the 8520 model on its home page, but the phone is in fact sold out.

At South America’s southern tip, the missing BlackBerrys are almost ready to roll off the line. On October 3rd Brightstar, a multinational manufacturer, will begin importing kits of the phones’ parts to its factory in Tierra del Fuego, the normal base for cruise ships going to Antarctica. Some 300 workers will brave the frigid austral fog to assemble the pieces and put them in locally sourced packaging.

Making BlackBerrys south of the Magellan strait will cost $23m upfront, plus $4,500-5,000 a month per worker, some 15 times more than in Asia. But the government touts the project as a triumph of its trade policy. It will help cut foreigners’ share of Argentina’s mobile-phone market from 96% in 2009 to a forecast 20% by the end of 2011. “We have a domestic market with growing demand. The goal is to supply it with local labour and production,” said Débora Giorgi, the industry minister, when the deal was announced.

Argentine manufacturers have been booming ever since the 2001 crash. Over most of that period, a cheap peso has ensured their competitiveness. But since 2005 inflation has been in double digits. As the trade surplus has dwindled, Cristina Fernández, the president, has beefed up her industrial policy. According to Global Trade Alert, a database of restrictions on international commerce, Argentina now imposes more trade limitations deemed “harmful” than any country save Russia.

[xchrom]

25. Journey to Argentina's forgotten territory

http://www.bbc.co.uk/news/magazine-14895944

Argentina has one of the biggest economies in Latin America, but in this huge country there are still some areas that are worlds away from the wealth and technology of the capital.

There is an advert on Argentine television for a bank that sends a mobile unit to the remote town of Iruya in the north-western province of Salta.

Getting there is not easy. The final two and a half hours are along unpaved roads that wind their way through the mountains at more than 4,000m (13,000ft) above sea-level.

Iruya is a picturesque, thriving little town full of hostels and quaint restaurants that attract tourists from both Argentina and beyond. The purpose of the advert is to show that the bank cares, even about the country's most remote communities.

[Demeter]

24. Morning, All!

We have something like an inland hurricane centered over the south tip of Lake Michigan and dumping rain on us. On the weatherunderground, it looks like a doughnut of jetstream swirling in a circle...something I've never seen before.

It must be a massive Low Pressure. It's been there overnight already.

[Fuddnik]

27. Expect it to hangout for a couple of days.

There's nothing moving across the country to push it out.

[xchrom]

29. wow -- well hunker down if you can. nt

[DemReadingDU]

31. it's in SW Ohio too

Flood advisory for most of our area
:(

[AnneD]

49. And still.......

nothing in Texas. We had a sprinkling those few days but it was nothing but a cruel tease...sigh.

[xchrom]

26. Betting on Bernanke Returns 28% for Treasuries

http://www.bloomberg.com/news/2011-09-25/betting-on-bernanke-returns-28-for-treasuries-as-twist-divides-investors.html

Betting on Ben S. Bernanke has been the most profitable trade for government bond investors in 16 years, defying lawmakers in the U.S. and abroad who said the Federal Reserve chairman’s policies would lead to runaway inflation and the dollar’s debasement.

Treasuries due in 10 or more years have returned 28 percent in 2011, exceeding the 24.4 percent gain in all of 2008 during worst financial crisis since the Great Depression, according to Bank of America Merrill Lynch indexes. Not since 1995, when the securities soared 30.7 percent, have investors done so well owning longer-dated U.S. government debt.

The rally continued last week, driving yields to record lows, as the Fed said it would exchange $400 billion of short- term Treasuries for those maturing in more than six years. The move, dubbed Operation Twist by traders, is designed to lower borrowing costs and keep the economy growing. Previous Fed efforts unlocked credit markets and helped ward off deflation.

[Demeter]

40. OMG

the fix was in and a long time coming....

[xchrom]

47. weird, huh? -- & don't you wonder if this will be 'revised'? nt

[Demeter]

48. Revised Up, or Down?

or do you mean "erased from public view"?

[xchrom]

52. ...

:spray:

[AnneD]

78. "erased from public view".....

much like cat dropping, erased from public view but the smell still lingers in the air.

[xchrom]

28. Trader Pay May Face Limits Under Volcker Rule

http://www.bloomberg.com/news/2011-09-26/trader-pay-may-face-restrictions-under-dodd-frank-s-volcker-rule.html

U.S. banks would have to change the way they compensate traders involved in market-making activities under one of the proposed restrictions of the so-called Volcker rule, according to a draft circulating among regulators.

The rule, which aims to ban most proprietary trading by banks with federally insured deposits, would exempt trades related to market-making as long as the activity met at least seven standards, or principles. One principle would be that traders get paid from fees and the spread of the transactions rather than the appreciation or profit from their positions, according to a copy of the draft reviewed by Bloomberg News.

The Volcker rule, part of the Dodd-Frank Act, is being written by regulators in five Washington agencies and may be released as early as October, according to three people briefed on the discussions. It aims to reduce the chance that banks will make risky investments with their own capital that put their deposits at risk.

[Demeter]

30. Europe Readying Yet Another “This Really Will Do the Trick” Bailout Package

http://www.nakedcapitalism.com/2011/09/europe-readying-yet-another-this-really-will-do-the-trick-bailout-package.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Well, we are clearly in crisis mode. We are back to weekends being a period when you need to watch the news in a serious way....And in another bit of deja vu all over again, the powers that be in Europe are readying yet another bailout plan, this one supposedly big enough to do the trick once and for all. The problem is that was the premise of several of the last grand schemes, such as the EFSF and the ESM. The market calming effect WAS relatively short lived because analysts' quickly pencilled-out programs were inadequate in size and failed to address the problems of lack of a fiscal mechanism at the EU level and the need to address the elephant in the room, bank solvency.

The program in the works claims TO address the underlying issue of bank solvency, but even the sketchy leak of this weekend reveals it falls short, both in concept and in size.

The new rescue program seeks to create a sovereign debt crisis firebreak at Greece, Portugal, and Ireland, when contagion has already put Spain, Ireland, and Belgium in the crosshairs. The high concept is leverage on leverage plus monetization: the EFSF, which is basically a CDO, would then provide the equity to a new fund, and the ECD would provide “protected ‘debt’” I’m not at all certain what the latter is supposed to mean; reader input is welcome. But this sounds like a CDO squared, with an unfunded equity tranche, as a legal/political cover for the ECB monetizing Euro sovereign debt.

Nevertheless, this mechanism will allegedly allow for sovereign bailout program of €2 trillion.

Similarly, the size of the bank recapitalization program is in the “tens of billions”, vastly short of the €2-€3 trillion that some experts think is necessary. And note this is backwards: the debt needs to be written down directly (rather than trying to squeeze blood out of turnips via austerity) and banks recapitalized directly. Instead, the focus is (yet again) on bailing out the sovereigns, who will presumably still be expected to wear austerity hairshirts, which will worsen their debt to GDP ratios (even if this program does succeed in getting them cheaper debt in sufficient volumes).

The Eurocrats are going to be slow out of the gate. They want to launch the plan at the next G20 meeting, which is six weeks away, November 4. Mr. Market doesn’t care about the schedules of the officialdom, and is highly unlikely to wait that long.

From the Telegraph (hat tip Richard Smith):

First, Europe’s banks would have to be recapitalised with many tens of billions of euros to reassure markets that a Greek or Portuguese default would not precipitate a systemic financial crisis. The recapitalisation plan would go much further than the €2.5bn (£2.2bn) required by regulators following the European bank stress tests in July and crucially would include the under-pressure French lenders…

The second leg of the plan is to bolster the EFSF. Economists have estimated it would need about Eu2 trillion of firepower to meet Italy and Spain’s financing needs in the event that the two countries were shut out of the markets. Officials are working on a way to leverage the EFSF through the European Central Bank to reach the target.

The complex deal would see the EFSF provide a loss-bearing “equity” tranche of any bail-out fund and the ECB the rest in protected “debt”. If the EFSF bore the first 20pc of any loss, the fund’s warchest would effectively be bolstered to Eu2 trillion. If the EFSF bore the first 40pc of any loss, the fund would be able to deploy Eu1 trillion.

Using leverage in this way would allow governments substantially to increase the resources available to the EFSF without having to go back to national parliaments for approval, which in a number of eurozone countries would prove highly problematic.

The arrangement is similar to the proposal made by US Treasury Secretary Tim Geithner to the eurozone at the September 16 EcoFin meeting in Poland. Gathering turmoil in financial markets has convinced Germany to begin work of some kind of variant of the US plan, despite having initially rejected the notion as unworkable as threatening to compromise ECB independence.

The proposal would be hugely sensitive in Germany as its parliament has yet to ratify the July 21 agreement to allow the EFSF to inject capital into banks and buy the sovereign debt of countries not under a European Union and International Monetary Fund restructuring programme. The vote is due on September 29.

[Demeter]

32. "This time, for sure!"

http://www.youtube.com/watch?v=kRW7pITY5Cg&feature=related

[bread_and_roses]

33. Illness in Cambodian factories called "mass hysteria"

Gee - who do we think benefits from promulgating this POV?

from something called "live science" linked on yahoo (I know, i know - yahoo - but it's my personal e-mail provider so it's my home page (and having used three variants of Outlook, gmail, and several other lesser known e-mail systems for work, I still think yahoo's e-mail is the easiest, most intuitive program out there - at least for free. However worthless the rest of the site. Besides, yahoo is pretty widely used, thus making it a good gauge of what distractions are being offered today for the hoi polloi)

http://news.yahoo.com/mystery-illness-plagues-asian-factories-142804130.html

Mystery Illness Plagues Asian Factories
LiveScience.comBy Benjamin Radford | LiveScience.com – 22 hrs ago

Researchers from the United Nations recently met in Cambodia to solve the mystery of why large numbers of female workers in that nation have succumbed to an unknown (and temporary) illness. But rather than a physical illness as the source, the scientists may want to look at the mind as the root cause.

... Workers in shoe and clothing factories have reported feeling fatigued, dizzy and nauseated. Most claimed that they felt faint, though none actually fainted. After some rest and medical attention, the women quickly recovered and went back to work; few if any reported lingering symptoms. So far no one has found any toxin or environmental contamination that could cause the symptoms.

... The Cambodian factories — full of women, chemicals, smells, stress and boredom — are ideal environments for the development of mass hysteria. Denial is typical in these cases; victims usually reject the diagnosis and remain convinced that some unknown agent is causing their discomfort. Unless investigators find another cause for the mystery illness, it will likely be traced to mass hysteria.

(notice "women" included that list.... )

So, in a factory full of chemicals, the most likely cause of what sure sounds like the symptoms of exposure to an airbourne toxin is "mass hysteria?"

Now, I live near a huge abandoned shoe factory - ancient brick buildings that I've been told (I cannot vouch for how reliably, but having talked to people who worked in them years ago I think likely) that among the reasons these huge buildings are not torn down is that they are so full of toxins from the shoe-making process that there is no way to demolish them without releasing vast clouds of dangerous pollutants.

But even aside from that - notice not a word in the article talks about working conditions or worker safety in these factories other than to note that they are "full of...stress."

How convenient. I guess those sickened by Mountaintop removal pollutants or oil poisoning from refineries are just succumbing to "mass hysteria" too? Like the indigenous in the rainforest - I guess someone got a belly-ache one day and all of a sudden everyone is sick and blaming it on water full of pollutants - mass hysteria!

What else could it possibly be?

[xchrom]

41. wow -- because they haven't found a physical link there isn't one?

it's in their heads?

of course i am skeptical at just how hard anybody looked in those countries.

[AnneD]

51. It's just those hysterical ....

uterus' talking. Nothing to see folks, keep moving. Forget that women have a keener sense of smell than men, they are just lazy. Anything for a break from work. That is why they get pregnant you know. As long as the feteus dosen't have 3 arms, everything is ok. :sarcasm:

[Hotler]

34. I was watching c-span this morning....

and the first segment was call in for republicans only talking about O saying that repugs are crippling the country. All I heard was regulations and the unions ruined this country. My oh my the stupid is neck deep in this country. We have asked this question many times here. Why do so many working folks go against their own interest. Thinking about it makes my head hurt. I have no hope. I see no future

K&R

[Demeter]

42. Neck deep from the top down

there's no cure for it but experience, and Experience is a dear teacher, but fools will learn no other way.

I'd look up who said that, but does it really matter?

One big difference between us Democrats and the GOP: we can recognize shit when we smell it. At least those who are Progressive and pragmatic.

The Cultists haven't a clue, unfortunately.

[plumbob]

77. Ben Franklin said it.

Cultists not only don't have a clue - they'd burn it if they actually got one.

[xchrom]

36. New Homes Sales Fall to Six-Month Low, Prices Decline

http://www.bloomberg.com/news/2011-09-26/sales-of-new-u-s-homes-decreased-to-six-month-low-in-august.html

Purchases of new houses in the U.S. declined in August to a six-month low as the biggest drop in prices in two years failed to lure buyers away from even less expensive distressed properties.

Sales, tabulated when contracts are signed, dropped 2.3 percent to a 295,000 annual pace, figures from the Commerce Department showed today in Washington. The median estimate of 73 economists in a Bloomberg News survey called for a decline to 293,000. The median price slumped 7.7 percent from August 2010, the steepest 12-month drop since July 2009.

Foreclosure-driven price decreases for previously owned homes may keep attracting investors away from new properties, hurting builders like Lennar Corp. Limited access to credit, rising unemployment and waning consumer confidence also signal the industry that helped precipitate the recession will take time to find its footing.

“Housing demand has been, and will continue to be, weak,” Michelle Meyer, a senior economist at Bank of America Corp. in New York, said before the report. “With momentum in the economy weakening and confidence impaired, the risk is that prices continue to slide.”

[Demeter]

50. I had a whole string of interesting stuff to post, and the the power went out

THREE TIMES!

This has been happening on a weekly basis. I am sick of losing everything I'm doing thanks to DTE. All our lines are buried, so it's something they are doing outside the condos.

It can't be construction. Nobody is building anything in the area, not even the University.

[xchrom]

61. could it be due to all the wet weather you've had? nt

[Demeter]

64. No, I don't Think So

It seems to happen at the same time every Monday. And it comes right back up.

[xchrom]

66. wow -- very strange -- you're right must be something they're fiddling w/ off somewhere. nt

[Pale Blue Dot]

54. New Study – Traders Are Worse Than Psychopaths

The University in St. Gallen, Switzerland (how appropriate) has come out with a study that compares traders with psychopaths. The surprising result was that not only do traders act like psychos, they're worse. I'm not surprised at this at all. From NZZ:

The study reviewed the direct comparison of results with an existing study of 24 psychopaths in German high-security hospitals and a control group of 27 "normal" people.

The "normal people" that is referred to are 27 traders. Stock guys, FX/commodities traders and derivative types were the "normal' people that were stacked up against the actual crazies in the German nut house.

Even the experts were surprised by the result. They attest to the stock market professionals with a penchant for immense destruction.


The performance of the 27 dealers is even worse than the psychopaths.


"It's like beating one of the neighbor's expensive cars with a baseball bat with the sole objective of owning the most beautiful car in the neighborhood."

http://www.istockanalyst.com/finance/story/5438760/new-study-traders-are-worse-than-psychopaths

This is a tiny study, but fascinating.

[Demeter]

57. US tax authorities target bank deals

US tax authorities are targeting cross-border finance deals worth billions of dollars between leading US and UK banks as they step up efforts to clamp down on abusive tax avoidance, a joint investigation by the Financial Times and ProPublica, the not-for-profit news organisation, has found. Four US banks – BB&T, Bank of New York Mellon, Sovereign (now part of Santander of Spain), and Wells Fargo – are in turn suing the US government over more than $1bn in tax credits that the Internal Revenue Service has disallowed over the past decade.

Read more >>
http://link.ft.com/r/OZMCDD/2OAXT1/06MUC/JEI33E/4CZ4VN/VU/t?a1=2011&a2=9&a3=25

[Demeter]

58. Raghuram Rajan: Only the IMF can solve the eurozone crisis

The world markets expected concrete steps from Washington over the weekend on how governments would resolve the European crisis. They did not get it.

Instead, the International Monetary Fund’s policy setting body asserted that the “Euro-area countries will do whatever is necessary to resolve the euro-area sovereign debt crisis”.

Unfortunately, this statement seems to be based more on hope and prayer than on evidence...


Read more >>
http://link.ft.com/r/CTBPCC/PF10DC/VTVRG/08GZHD/ZG076D/MQ/t?a1=2011&a2=9&a3=26

NO, THE IMF IS NOT GOING TO BE ABLE TO FIX THIS, EITHER. KILL THE ZOMBIES, REPUDIATE THE DEBTS, PROSECUTE THE FRAUD, AND REGULATE THE HELL OUT OF FINANCE--THEN WE CAN TALK ABOUT FIXING THE PROBLEMS...

[Tace]

59. Global Systemic Crisis Fourth Quarter 2011: Implosive Fusion Of Global Financial Assets (LEAP/E2020)

Sept. 16, 2011 (LEAP/E2020) -- Public announcement GEAB N°57 -- As anticipated by LEAP/E2020 since November 2010, and often repeated up to June 2011, the second half of 2011 has started with a sudden and major relapse of the crisis.

Nearly USD 10 trillion of the USD 15 trillion in ghost assets announced in GEAB N°56 have already gone up in smoke. The rest (and probably much more) will vanish in the fourth quarter of 2011, which will be marked by what our team calls "the implosive fusion of global financial assets."

It’s the two major global financial centers, Wall Street in New York and the City of London, that will be the "preferred reactors" of this fusion. And, as predicted by LEAP/E2020 for several months, it’s the solution to the public debt problems in some Euroland countries that will enable this reaction to reach critical mass, after which nothing is controllable; but the bulk of the fuel that will drive the reaction and turn it into a real global shock (1) is found in the United States. Since July 2011 we have only started on the process that led to this situation: the worst is ahead of us and very close!

In this issue N°57, we have chosen to address, very directly, the great manipulation organized around the Greek crisis and the Euro (2), whilst describing its direct link with the implosive fusion process of financial assets worldwide. Also in this issue, LEAP/E2020 presents its anticipations for the gold market for the period 2012-2014 as well as its analyses on neo-protectionism which will be introduced from the end of 2012. In addition to our monthly recommendations on Switzerland and the Swiss Franc, currencies, real estate and financial markets, we also present our strategic advice to the G20 leaders less than two months from the G20 summit to be held in Cannes.

more

http://worldnewstrust.com/global-systemic-crisis-fourth-quarter-2011-implosive-fusion-of-global-financial-assets-leap/e2020.html

[Tace]

60. Punked World (James Howard Kunstler)

James Howard Kunstler -- World News Trust

Sept. 26, 2011 -- Europe is a three-card monte game and Greece is the pea and for the moment I'd guess that the pea is under a walnut shell called France. Or the French banks, to be specific.

Their vaults are stuffed with Greek bond paper that is giving the whole neighborhood a headache from a stench like unto rotting carp. Everybody else in the neighborhood has their own cache of deliquescing fish-heads, but they pretend the air is fresh and bracing. In fact, so exhilarating that they are avid to dump $3 trillion into a Euro bailout fund that will solve the problem of that fugitive aroma wafting down the boulevards.

Europe can really only put out stories at this point, and the $3 Tril bailout fund is just another story in a tedious string of them. Where are they going to get the money? From the machinists' union in Dusseldorf? The waiters and chambermaids in Munich? There's that rumored swap line opening from the Federal Reserve to the European Central Bank, but that's nothing more than a cheap loan window, and for a measly half a trillion ($500 billion -- the late Senator Ev Dirkson is cackling in his grave). And where do those dollars come from anyway? Who is supposed to pay it back, and how? What kind of collateral is Ben Bernanke going to hold -- the contents of the south wing of the Louvre? One hundred million free dinners (wine and tip included) at Taillevent? This game of musical chairs with a hot potato is not fooling anyone, really.

more

http://worldnewstrust.com/punked-world-james-howard-kunstler.html

[Demeter]

65. Thanks for bringing this over, Tace!

[Demeter]

62. QUOTE FOR THE DAY

"O liberty! O liberty! What crimes are committed in thy name!"

- -- Madame Jeanne-Marie Roland - (1754-1793) November 8, 1793,

her last words before being executed on the guillotine, quoted in Alphonse de Lamartine's Histoire des Girondins

Jean-Marie Roland, de la Platière (18 February 1734 – 15 November 1793) was a French manufacturer in Lyon and became the leader of the Girondist faction in the French Revolution, largely influenced in this direction by his wife, Marie-Jeanne "Manon" Roland de la Platiere. He served as a minister of the interior in King Louis XVI's government in 1792...he married Marie-Jeanne Phlipon, better known simply as Madame Roland, the daughter of a Parisian engraver. Madame Roland was just as involved in Jean-Marie's work as he was, editing much of his writing and supporting his political goals. For the first four years of their marriage, Roland continued to live in Picardy and work as a factory inspector. His knowledge of commercial affairs enabled him to contribute articles to the Encyclopédie Méthodique,a three volume encyclopedia of manufacturing and industry, in which, as in all his literary work, he was assisted by his wife.

...During the first year of the Revolution, the Rolands moved to Lyon, where their influence grew and their political ambitions became clear. From the beginning of the Revolution, they affiliated with the liberal cause. The articles they contributed to the Courrier de Lyon came to the attention of the Parisian press; although Roland signed them, it was Madame Roland who wrote them. The city then sent Roland to Paris to inform the Constituent Assembly of the critical state of the silk industry and to ask for relief of Lyon's debt. As a result, a correspondence began between Roland, Jacques Pierre Brissot and other supporters of the Revolution, whom he had met in Paris. The Rolands arrived in Paris during February 1791, and remained there until September. They frequented the Society of the Friends of the Constitution, entertaining deputies who later became leading Girondists, and taking an active part in the political landscape. Meanwhile Madame Roland opened her first salon, helping her husband's name become better known in the capital.

In September 1791, Roland's mission was complete and he returned to Lyon. By then, however, inspectorships of manufacture had been abolished, so the Roland family decided to move and make their new home in Paris. Roland became a member of the Jacobin Club, and their influence continued to grow. Madame Roland's salon becoming the rendezvous of Brissot, Jérôme Pétion de Villeneuve, Maximilien Robespierre, and other leaders of the popular movement - especially François Nicolas Leonard Buzot.

When the Girondins assumed power, Roland found himself appointed minister of the interior on 23 March 1792, displaying both his administrative ability and what the Encyclopædia Britannica (Eleventh Edition, 1911) characterized as "a bourgeois brusqueness". His wife's influence on his declarations of policy was particularly strong in this period: as Roland was ex officio excluded from the Legislative Assembly, these declarations were in writing, and so most prone to exhibit Madame Roland's personal beliefs.

King Louis XVI used his veto power to prevent decrees against émigrés and the non-juring clergy. Madame Roland therefore wrote a letter addressing the royal refusal to sanction the decrees and the role of the king in the state, which her husband addressed and sent to the king. When it remained unanswered, Roland read it aloud in full council and in the king's presence. Judged inconsistent with a minister's position and disrespectful in tone, the incident led to Roland's dismissal. However, he then read the letter to the Assembly, which ordered it printed and circulated. It became a manifesto of dissatisfaction, and the Assembly's subsequent demand that Roland and other dismissed ministers be reinstated eventually led to the king's dethronement.

After the insurrection of 10 August, Roland was reinstated as Interior Minister, but was dismayed by what he saw as the lack of progress made by the Revolution. As a provincial, he opposed the Montagnards who aimed at supremacy not only in Paris but in the government as well. His hostility to the Paris Commune prompted him to propose transferring the government to Blois; and his attacks on Robespierre and his associates made him very unpopular. After failing to seal the armoire de fer (iron chest) found in the Tuileries Palace, containing documents that indicated Louis XVI's relations with France's enemies, he was accused of destroying some of the evidence within. Finally, during the trial of the king, he and the Girondists demanded that the sentence should be decided by a poll of the French people rather than the National Convention. Two days after the king's execution, he resigned his office.
Death

Not long after he resigned as minister, the Girondins came under attack and Roland was denounced as well. Roland fled Paris and went into hiding; in his absence, he was sentenced to death. Madame Roland remained in Paris and was arrested and executed. When Roland learned of his wife's death, he wandered away from his refuge in Rouen and wrote a few words expressing his horror at the Reign of Terror: "From the moment when I learned that they had murdered my wife, I would no longer remain in a world stained with enemies." He attached the paper to his chest, sat up against a tree, and ran a cane-sword through his heart.

IF I THOUGHT I COULD DO IT JUSTICE AT ALL, LET ALONE IN A WEEKEND, I'D ADDRESS THE FRENCH REVOLUTION. BUT I QUAIL AT THE THOUGHT.

[xchrom]

63. U.S. stocks rebound in choppy trade

http://www.marketwatch.com/story/us-stocks-mostly-give-up-gains-on-housing-data-2011-09-26

NEW YORK (MarketWatch) — U.S. stocks climbed Monday as the lure of cheap valuations and a sliver of optimism that lifted European markets countered data showing a drop in new home sales for August.

“I think it’s going to be choppy for some time. I’d expect to see a little bit of rebound and some positive days, because we had such tremendous downside pressure and a lot of folks are thinking the markets are cheap,” said Robert Pavlik, chief market strategist at Banyan Partners.

The benchmark Dow Jones Industrial Average /quotes/zigman/627449/delayed DJIA +1.16% rose 163 points, or 1.5%, to 10,935.

On the Dow, 27 of its 30 constituents were higher, led by a 3.9% improvement in Boeing Co. /quotes/zigman/220026/quotes/nls/ba BA +3.16% , a 3.5% increase for JPMorgan Chase & Co. /quotes/zigman/272085/quotes/nls/jpm JPM +2.64% . Hewlett-Packard Co. /quotes/zigman/229301/quotes/nls/hpq HPQ +1.14% rose 2.4%.

[Demeter]

67. UBS chief quits after clash over strategy

Bank’s board gave unanimous support for Oswald Grübel to remain but refused to back his plans to overhaul strategy and corporate governance

Read more >>
http://link.ft.com/r/S4XZQQ/MS381N/4VXHZ/C45QL9/97WYJS/KI/t?a1=2011&a2=9&a3=26

MORE BACKING AND FILLING--DID HE QUIT OR WAS HE PUSHED STORY

[Demeter]

68. Dimon in attack on Canada’s bank chief

JPMorgan chief executive has launched a tirade at Mark Carney, in a closed-door meeting, focusing on a capital surcharge for the largest banks

Read more >>
http://link.ft.com/r/S4XZQQ/MS381N/4VXHZ/C45QL9/2O2MD3/KI/t?a1=2011&a2=9&a3=26

OH, TO BE A FLY ON THAT WALL...

[Demeter]

69. BNP Paribas rules out external help

Chief executive Baudouin Prot says bank is in ‘solid position in terms of solvency’ and does not need to use the ECB’s dollar lending facility

Read more >>
http://link.ft.com/r/S4XZQQ/MS381N/4VXHZ/C45QL9/WT8CMW/KI/t?a1=2011&a2=9&a3=26

METHINKS THE BANK PROTESTS TOO MUCH

[Demeter]

70. Greece denies reports on default scenarios

http://in.finance.yahoo.com/news/Greece-denies-reports-default-reuters-2067385919.html?x=0

Greece denied on Friday newspaper reports that one option in the debt crisis would be an orderly default with a 50 percent haircut for bondholders...

[Demeter]

73. Greek despair over further cuts sees suicide and crime rates on the rise

http://www.guardian.co.uk/world/2011/sep/24/greek-despair-cuts-suicide-crime

[Demeter]

74. EU given six weeks to protect itself against 'inevitable Greek default'

http://www.guardian.co.uk/business/2011/sep/24/eu-six-weeks-greek-default

IMF tells eurozone EFSF may need to be boosted five-fold to £1.7tn to convince markets that default could be contained...European Union governments will spend the next six weeks building a financial firewall to protect their fragile banking systems against what is now seen as an inevitable Greek default.

G20 sources said that up to 50% was likely to be wiped from the face value of Greece's €350bn debt – but not until Europe had put into place a war chest to prevent the contagion spreading...More money will be disbursed by the International Monetary Fund and the EU next month to keep the Greek government afloat, but this is seen as a short-term fix while Europe's leaders beef up the eurozone bailout fund, the European Financial Stability Facility.

Europe came under ferocious pressure at this weekend's IMF meeting in Washington to contain the spiralling crisis, which is blamed for dragging the global economy to the brink of a double-dip recession. The IMF is reportedly willing to continue bailing out Greece in the short-term, provided that Europe uses the time to tackle the issue of debt once and for all. The Washington-based lender believes the 18-month delay since Greece was first bailed out last spring has exacerbated the crisis.

Tim Geithner, the US treasury secretary, said: "The threat of cascading default, bank runs and catastrophic risk must be taken off the table, otherwise it will undermine all other efforts, both within Europe and globally...Decisions as to how to conclusively address the region's problems cannot wait until the crisis gets more severe."

[Demeter]

75. Meltdown fears for euro as G20 makes plans for Athens to default on debt

http://www.independent.co.uk/news/business/news/meltdown-fears-for-euro-as-g20-makes-plans-for-athens-to-default-on-debt-2360641.html

The world's leading economic powers are moving towards an acceptance that Greece will default on up to half of its €350bn sovereign debts, according to reports from meetings in Washington yesterday. They are believed to be working on concrete plans to deal with these huge losses and their repercussions.

This news – almost regardless of any words of qualification that emerge this weekend – will have a resounding effect on the febrile markets when they open on Monday.

Unconfirmed reports circulated yesterday that G20 leaders have recognised that the Athens government cannot cope with the scale of its debt burden and that there will eventually need to be a considerable reduction in the face value of Greek debt. The Finance Minister, Evangelos Venizelos, was quoted by two Greek newspapers as suggesting that a 50 per cent writedown for the holders of Greek bonds would be the "best option"...

[Demeter]

71. No Shots Left in the Locker: The Big Plunge By MIKE Whitney

http://www.informationclearinghouse.info/article29202.htm

from Scott Reckard at the LA Times:

”Bank deposits soar despite rock-bottom interest rates Americans are pumping money into bank accounts at a blistering pace this year, sending deposits to record levels near $10 trillion …In the last three months, accounts at U.S. commercial banks have increased $429 billion, or 10%, almost double the increase for all of last year.

…

The large amount of cash only adds to expenses such as paying for deposit insurance premiums. ……

{Some banks are} stashing it in a safe but unrewarding place: Federal Reserve banks, which are paying them an interest rate of just 0.25% to tend the funds. Such deposits rose to more than $1.6 trillion at the end of August from about $1 trillion a year earlier, according to the Fed.” (“Bank Deposits increase Sharply”, Calculated Risk)

Have you ever seen a more damning indictment of Fed monetary policy? Three years after Lehman Brothers, and people are still so petrified that they’re slamming their life’s savings into deposits that earn zilch. What’s next? Stuffing money into mattresses?!? There are no productive outlets for investment because the economy is dead. But that doesn’t matter, because people are not in a “wealth enhancing” mode anyway. They’re in a “wealth preservation” mode. The surge in deposits is a sign of panic; hoarding equals fear. And the reason people are scared is because the system is out-of-whack, the policy is wrong, and things are getting worse not better.

Do you know why people cling to money when they get scared?...Bernanke doesn’t. Bernanke’s a technocrat who thinks that if he moves the right lever at the Fed, people will start borrowing again and the economy will kick back into gear. There’s just one flaw in Bernanke’s theory; it doesn’t work. After 3 years of trimming rates, expanding the Fed’s balance sheet will trillions in worthless bonds, and endless rounds of quantitative shell games; people are dumping more money in bank deposits than ever. Monetary policy has been a total flop.

On the other hand, there was someone who understood why people cling to money when they’re scared. John Maynard Keynes. Keynes understood that markets were driven by human psychology not interest rates. Here’s a clip from The General Theory that gives a sample of his thinking:

“Our desire to hold money as a store of wealth is a barometer of the degree of our distrust of our own calculations and conventions concerning the future….The possession of actual money lulls our disquietude; and the premium we require to make us part with money is the measure of the degree of our disquietude.”

Bingo. This explains why a sudden downturn in the market can quickly turn into a full-blown crash. Investors get antsy, withdraw their money and hunker down. Pretty soon, the equity share supporting the markets vanishes and a bank run ensues thrusting the economy into a long-term swoon. And it’s all because people are afraid, so they grab their money and hang on for dear life.

So, what’s the remedy?

We need to restore confidence, and building confidence depends on three things; jobs, jobs and jobs. When people are employed; they’re less fearful and more optimistic about the future. And, they spend money, too, which boosts demand, increases growth and leads to a virtuous circle. FDR said it best in his First Inaugural Address, March 4, 1933. Here’s a clip:

“Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. It can be accomplished in part by direct recruiting by the Government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing great — greatly needed projects to stimulate and reorganize the use of our great natural resources….

And finally, in our progress towards a resumption of work, we require two safeguards against a return of the evils of the old order. There must be a strict supervision of all banking and credits and investments. There must be an end to speculation with other people’s money. And there must be provision for an adequate but sound currency.

These, my friends, are the lines of attack.” –Franklin Delano Roosevelt, First Inaugural Address, March 4, 1933.

[Demeter]

72. Welcome to Your Hungarian Internet

OR SHOULD THAT BE HUNG?

http://www.savetheinternet.com/blog/11/09/14/welcome-your-hungarian-internet

The New York Times reported on Wednesday that the U.S. has sunk to 25th in a global ranking of Internet speeds, just behind Romania. Why? Because our nation's regulators abandoned an earlier commitment to foster competition in the marketplace for Internet access providers. In the years that followed the signing of the 1996 Telecommunications Act, lobbyists working for powerful providers like AT&T, Comcast and Verizon pressured a compliant FCC to tear down all of the important safeguards established by Congress.

Under the Bush administration, the FCC tossed out competitive broadband safeguards such as open-access requirements, which opened lines to other providers. In 2002 the agency declared that high-speed cable Internet access would no longer be considered a telecommunications service that opened the network to competitors, but rather an “information service” that did not. Following a 2005 court decision, the FCC also reclassified broadband delivered by the phone companies as an “information service.”

These were radical policy shifts that went against the long-held assumption that open communications in competitive markets were essential to economic growth and innovation.

While the U.S. blindly followed a path of "deregulation," other nations in Europe and Asia beefed up their pro-competitive policies. The results are evident in our free fall from the top of almost every global measure of Internet services, availability and speed...

[Festivito]

79. Debt: 09/22/2011 14,726,790,407,953.74 (UP 21,602,320,961.78) (Thu, DOWN some.)

(UNDER the new 2011 debt limit of 14.694-trillion dollars by 432.790-billion dollars. Good day.)
Oops, forgot Friday I guess.
(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)
= 10,074,726,277,456.50 + 4,652,064,130,497.22
DOWN 6,079,650,583.40 + UP 27,681,971,545.18

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 313-Million person America.
If every American, man, woman and child puts in $3.20 THAT'S 1B$, and $3,195.41 makes 1T$.
A family of three: Mom, Dad, Child: $9.59, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain another American, so at the end of the workday of the report, there should be 312,948,992 people in America.
http://www.census.gov/population/www/popclockus.html ON 10/04/2010 04:37 -> 310,403,677
Currently, each of these Americans owe $47,058.12.
A family of three owes $141,174.35. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 4,971,952,591.96.
The average for the last 30 days would be 3,811,830,320.50.
The average for the last 31 days would be 3,688,868,052.10.
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$/day.
There were 251 reports in 365 days of FY2010 averaging 6.58B$ per report, 4.53B$/day.
There were 243 reports in 357 days of FY2011 averaging 4.79B$ per report, 3.26B$/day.
Above line should be okay

PROJECTION:
There are 486 days remaining in this Obama 1st term.
By that time the debt could be between 15.4 and 17.2T$.
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)
09/22/2011 14,726,790,407,953.74 BHO (UP 4,099,913,359,040.64 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 +1,651,794,027,380.00 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
FY2011 +1,165,167,377,062.00 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof11 +1,191,277,570,385.52 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
09/01/2011 +034,131,323,630.30 ------------**********
09/02/2011 +000,182,220,803.10 ------------********
09/06/2011 -000,290,117,782.20 --- Tue
09/07/2011 +015,583,261,687.60 ------------**********
09/08/2011 -006,211,008,386.30 --
09/09/2011 +000,079,600,651.10 ------------*******
09/12/2011 -000,033,661,156.40 ---- Mon
09/13/2011 -000,041,637,039.50 ----
09/14/2011 +000,269,185,032.20 ------------********
09/15/2011 +011,965,856,345.50 ------------**********
09/16/2011 +000,192,253,298.50 ------------********
09/19/2011 +000,239,468,823.00 ------------******** Mon
09/20/2011 +000,489,658,328.70 ------------********
09/21/2011 -000,003,830,602.70 -----
09/22/2011 -006,079,650,583.40 --

50,472,923,049.50 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=5003692&mesg_id=5003720

[Festivito]

80. Debt: 09/23/2011 14,700,040,072,613.72 (DOWN 26,750,335,340.09) (Fri, DOWN a little.)

(UNDER the new 2011 debt limit of 14.694-trillion dollars by 406.040-billion dollars. Good day.)
Restoration of old old old houses.
(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)
= 10,074,503,215,028.60 + 4,625,536,857,585.03
DOWN 223,062,427.90 + DOWN 26,527,272,912.19

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 313-Million person America.
If every American, man, woman and child puts in $3.20 THAT'S 1B$, and $3,195.34 makes 1T$.
A family of three: Mom, Dad, Child: $9.59, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain another American, so at the end of the workday of the report, there should be 312,956,192 people in America.
http://www.census.gov/population/www/popclockus.html ON 10/04/2010 04:37 -> 310,403,677
Currently, each of these Americans owe $46,971.56.
A family of three owes $140,914.68. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 2,206,539,228.95.
The average for the last 30 days would be 1,691,680,075.53.
The average for the last 31 days would be 1,637,109,750.51.
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$/day.
There were 251 reports in 365 days of FY2010 averaging 6.58B$ per report, 4.53B$/day.
There were 244 reports in 358 days of FY2011 averaging 4.67B$ per report, 3.18B$/day.
Above line should be okay

PROJECTION:
There are 485 days remaining in this Obama 1st term.
By that time the debt could be between 15.4 and 17.2T$.
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)
09/23/2011 14,700,040,072,613.72 BHO (UP 4,073,163,023,700.55 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 +1,651,794,027,380.00 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
FY2011 +1,138,417,041,722.00 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof11 +1,160,676,592,817.12 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
09/02/2011 +000,182,220,803.10 ------------********
09/06/2011 -000,290,117,782.20 --- Tue
09/07/2011 +015,583,261,687.60 ------------**********
09/08/2011 -006,211,008,386.30 --
09/09/2011 +000,079,600,651.10 ------------*******
09/12/2011 -000,033,661,156.40 ---- Mon
09/13/2011 -000,041,637,039.50 ----
09/14/2011 +000,269,185,032.20 ------------********
09/15/2011 +011,965,856,345.50 ------------**********
09/16/2011 +000,192,253,298.50 ------------********
09/19/2011 +000,239,468,823.00 ------------******** Mon
09/20/2011 +000,489,658,328.70 ------------********
09/21/2011 -000,003,830,602.70 -----
09/22/2011 -006,079,650,583.40 --
09/23/2011 -000,223,062,427.90 ---

16,118,536,991.30 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=5006267&mesg_id=5006823

[RUMMYisFROSTED]

81. We're back, baby!

[DemReadingDU]

82. Denninger - FLASH: Euro Zone Has Gone ENRON

9/26/11 FLASH: Euro Zone Has Gone ENRON

Ok, the latest little scheme coming out of Euroland is that they're going to use the European Stability Fund to capitalize a SPV, which will then buy up sovereign bonds, package and then (presumably) repo those to the ECB and then of course buy more bonds.

I will simply remind everyone that this is not materially different than what ENRON did, and we know exactly how that ended and why.
http://market-ticker.org/akcs-www?post=194853

[DemReadingDU]

83. Trader on the BBC says Eurozone Market will crash

9/26/11 Trader on the BBC says Eurozone Market will crash
"Savings Of Millions Of People Are Going To Vanish"

In a scary and painfully frank interview a freaked out BBC interviewer is visibly shaken when market trader Alessio Rastani predicts that the "Market is Toast." Apparently there is nothing Euro governments can do.

http://www.youtube.com/watch?v=aC19fEqR5bA&feature=player_embedded

[bread_and_roses]

84. "Governments don't rule the world. Goldman Sachs rules the world."

And the psychopath on the screen dreams about situations like this - "savings of millions of people is going to vanish" - because he can make money off it because he knows how to - or so he says. He thinks the Depression was just fine and dandy because "some people made money" off it - never mind the children who were permanently stunted by malnutrition or outright starved to death. It's all good.

Why anyone would trust someone with that sort of morality baffles me, but then, hey, I'm no "trader."

[DemReadingDU]

85. Traders are only interested in making money

when the markets go up and down, any way they can

[bread_and_roses]

87. er...i do understand that. One could say the same of capitalism as a system, I think

... which is, of course, among the reason that capitalism will make the earth uninhabitable ... to make money. That I understand it hardly means I am not outraged by it. And, re: trust - if the only outcome sought is making money, what happens to loyalty, ethics? In the "old days" the Libertarians used to tell us that those who behaved unethically would be weeded out by the logic of the market - we see how that's worked out.

[Demeter]

86. That Was Obscene

All he (the independent trader) can do is STEAL money. He doesn't "Make" anything.

Since I have no savings....