Congratulations Taxpayers, you now own an insurance company

[Methanolandbrats]

Madoff is back in his penthouse and they keep showing the building on the news. :mad: If the prick had a shred of morality in his body he'd do a Triple Lindy out the window. Now that would be some excellent reality TV.

[SurfaceUnits]

The talk has already started taking its toll on the cupcake industry.


It is with much sorrow that Cupcakes announces our immediate store closing.
We thank all of our customers for their many years of loyal patronage.
http://www.chicagocupcakes.com/closed/Chicago_Cupcakes_files/cupcake-wrapper.jpg

[Methanolandbrats]

I hope speculators don't drive the cost of cupcakes up to the point where it ruins tens of thousands of children's birthday parties :( Of course that will just fuel investment in alternative cake technology.

[chop456]

^ There's an interesting documentary out about how the Gold Medal Flour company spent millions behind the scenes to kill the alternative cupcake design that Duncan Hines was working on even though people loved them in the consumer test marketing stage. Scary stuff. A little conspiracy-minded for me, but it makes you think.

[Methanolandbrats]

^ There's an interesting documentary out about how the Gold Medal Flour company spent millions behind the scenes to kill the alternative cupcake design that Duncan Hines was working on even though people loved them in the consumer test marketing stage. Scary stuff. A little conspiracy-minded for me, but it makes you think.

Free market and all that, sounds about par for the course.

[SurfaceUnits]

Merrill Lynch and 25 billion tax dollars not such a bargain after all

Investment bankers made $20 million for a weekend's work blessing a deal that has gone bad, dragging down BofA and the whole banking sector.

http://money.cnn.com/2009/01/15/news/bofa.unfair.fortune/index.htm?postversion=2009011513

[SurfaceUnits]

Finally, someone with a realistic, rosy outlook on the financial crisis

http://www.moneyandmarkets.com/last-nail-in-the-coffin-29223

[SurfaceUnits]

and now for the doom & Gloom crowd

http://www.moneyandmarkets.com/the-biggest-flood-of-red-ink-the-world-has-ever-known-29202

[SurfaceUnits]

BREAKING NEWS

Citigroup splits in 2, loses $8.3B in quarter. Bank of America reports $1.8B loss - on top of $15.3B for Merrill; takes $20B bailout.

BofA: $20B bailout, huge Merrill loss
6:31am: Government to inject capital in nation's largest bank yet again and shield it from up to $118 billion in losses caused by merger with Merrill Lynch.

http://money.cnn.com/2009/01/16/news/companies/bofa_new_bailout/index.htm?postversion=2009011606

[Methanolandbrats]

They should have given the money to the banks that did'nt **** up and let the other fail. Then the successful banks would have extra cash to pick up the pieces. Now the same aholes are in business and wasting even more money. :mad: Nice job.

[cameraman]

If you look closely at the numbers most banks are losing more on their prime mortgages at the moment than on their subprimes. The losses on their home equity lines are larger than their prime & subprime combined.

It isn't a subprime loan disaster anymore - it is an entire loan portfolio disaster now.

[Methanolandbrats]

If you look closely at the numbers most banks are losing more on their prime mortgages at the moment than on their subprimes. The losses on their home equity lines are larger than their prime & subprime combined.

It isn't a subprime loan disaster anymore - it is an entire loan portfolio disaster now.
And it's just getting started, unemployment is going to get much worse. Circuit City took the gaspipe today and 35,000 people lost their jobs :(

[SurfaceUnits]

The ARMs are starting to kick in as well. The commercial real estate market is crashing too. Pretty soon, free housing and office space for all. The owner of the tallest office building in Indianner is selling off its assets in order to pay an upcoming debt deadline.

[SurfaceUnits]

http://money.cnn.com/2009/01/16/news/companies/circuit_city/index.htm?postversion=2009011611

[extramundane]

The current economic & financial climate certainly didn't help, but Circuit City has been headed towards a flameout for quite some time. The stuff that went on at Corporate HQ (or, more critically, didn't go on) is stupefying.

The only silver lining I can find is that everyone I know bailed out some time ago. :\

[KLang]

The current economic & financial climate certainly didn't help, but Circuit City has been headed towards a flameout for quite some time. The stuff that went on at Corporate HQ (or, more critically, didn't go on) is stupefying.

The only silver lining I can find is that everyone I know bailed out some time ago. :\

Long overdue payback for DIVX. :p

[Methanolandbrats]

The current economic & financial climate certainly didn't help, but Circuit City has been headed towards a flameout for quite some time. The stuff that went on at Corporate HQ (or, more critically, didn't go on) is stupefying.

The only silver lining I can find is that everyone I know bailed out some time ago. :\
Correct. Circuit City sucked. My only online transaction was a disaster. They did'nt apply my coupon that said web order only. When I got the bill I called them and they said they would correct the error, but it could only be done in person at a store. :saywhat: I had to drive to the nearest one and stand in line to get my money back. F'n tools.

[Sean Malone]

I feel for the 34,000 employees left looking elsewhere but Circuit City was the worst.

[extramundane]

Correct. Circuit City sucked. My only online transaction was a disaster. They did'nt apply my coupon that said web order only. When I got the bill I called them and they said they would correct the error, but it could only be done in person at a store. :saywhat: I had to drive to the nearest one and stand in line to get my money back. F'n tools.

Thing is, it probably did have to be done in person. Their internal systems were ancient and often refused to play with others. My old housemate's entire job was to make sure two of their inventory systems (one of which seemed to have been powered by hand-crank) communicated properly. Your web order probably happened when she actually took a full hour for lunch.

That, for years on end, they decided a $60,000 babysitter was a better investment than a $750,000 infrastructure upgrade speaks volumes. But hey, it allowed their former CEO to drop tons of bucks on private school education and horseback lessons. :\

[oddlycalm]

Long overdue payback for DIVX. :p

Exactly right, epic idiocy. That foray into the used car business was pure genius as well. Meanwhile their core business was left to slowly crumble. Too bad 34,000 people have to take the hit for the arrogance and stupidity of a few.

oc

[dando]

Exactly right, epic idiocy. That foray into the used car business was pure genius as well. Meanwhile their core business was left to slowly crumble. Too bad 34,000 people have to take the hit for the arrogance and stupidity of a few.

oc

I'm amazed this didn't happen sooner. Several of the stores they have (had) here are on oddball locations off the beaten path and not easily seen from the major roads nearby. :saywhat: I'm not a BBY fan either, so it's online for me exclusively now.

-Kevin

[SurfaceUnits]

Number of Americans filing unemployment insurance hits 589,000, highest since November 1982.

NEW YORK (CNNMoney.com) -- The number of Americans filing for first-time unemployment benefits rose last week to a 26-year high, according to a government report released Thursday.

The four-week average of new unemployment claims was unchanged from from the prior week's revised average of 519,250. A year ago, it was at 327,000.

The four-week moving average is designed to smooth out some of the week-by-week fluctuations, and give a broader view of the U.S. job market.

The number of people continuing to collect unemployment insurance for one week or more rose by 97,000 to 4.61 million in the week ended Jan. 10, the most recent data available. A year ago, it was at 2.68 million.

[Insomniac]

Number of Americans filing unemployment insurance hits 589,000, highest since November 1982.

NEW YORK (CNNMoney.com) -- The number of Americans filing for first-time unemployment benefits rose last week to a 26-year high, according to a government report released Thursday.

The four-week average of new unemployment claims was unchanged from from the prior week's revised average of 519,250. A year ago, it was at 327,000.

The four-week moving average is designed to smooth out some of the week-by-week fluctuations, and give a broader view of the U.S. job market.

The number of people continuing to collect unemployment insurance for one week or more rose by 97,000 to 4.61 million in the week ended Jan. 10, the most recent data available. A year ago, it was at 2.68 million.

I'm not surprised. Let's face it, we had a really long run of job creation, tons of young workers graduating and obtaining jobs over the last 11-13 years. Now some are going to be among those losing their jobs. The % unemployed probably means more than totals.

[cameraman]

The University is looking at laying off 70% of the part time janitorial staff. Looks like we will be emptying our own trash from here on out.

The thing is the University made a point of hiring much of the part time janitorial staff with well below normal IQs as a public service. Now they are all getting laid off and no one in private industry is going to hire them. They required far too much supervision. What happens to the 40 & 50 year olds with IQs hovering around room temperature and the academic skill set of a second grader?

[Ankf00]

I got a kick out of this graph. Veracity unknown.

http://i3.photobucket.com/albums/y54/PacmanJr_00/pic-png.png

[Gnam]

Probably doesn't take into account the number of government contractors.

[SurfaceUnits]

Mower grate housing news:

Flood of foreclosures: It's worse than you think
Banks are moving slowly to list repossessed homes for sale, which could mean that housing inventory is even more bloated than current statistics indicate.

The phenomenon of a growing ghost inventory doesn't promise to get better anytime soon, as long as the rate of foreclosures continues to ravage the market. There were more than 3.1 million foreclosure filings in 2008, according to RealtyTrac.

Said Sharga: "I don't see how we can avoid another 3 million in 2009."


http://money.cnn.com/2009/01/21/real_estate/ghost_inventory/index.htm?postversion=2009012314

[SurfaceUnits]

Peter Schiff: Oh, he saw it coming
'Dr. Doom' became a star by predicting last year's market meltdown. And now his 2009 forecast is even scarier.

'Ponzi economy'
As he outlined in 2007 in his first book, Crash Proof: How to Profit From the Coming Economic Collapse, Schiff believes that the U.S. economy has become dangerously and unsustainably dependent on consumption - fueled by trillions of dollars borrowed mainly from Asian countries like Japan and China.

"We have an economy that's based on the same principles as Bernie Madoff's investments," he says. "It's a Ponzi economy. It's not real. We don't save and we don't produce anything anymore. We simply borrow from the rest of the world, and then we spend it. We've had a giant party. We bought all these plasma TVs and iPods. We remodeled our houses and took vacations. But you know what? The bills are coming in."


http://money.cnn.com/2009/01/20/magazines/fortune/okeefe_schiff.fortune/index.htm

[SurfaceUnits]

Where the jobs aren't:
# Home Depot slashing 7,000 jobs
# Caterpillar to lay off 20,000 workers
# Sprint job cuts to total 8,000
ING to cut 7,000 jobs

Where the jobs are:
McDonald's: 1,000 new stores

[SurfaceUnits]

Bloody Monday: Over 68,000 jobs lost
Six companies announce massive job cuts in a scary start to the week.


NEW YORK (CNNMoney.com) -- The final week of January began with a bloodbath for the job market, as over 68,000 more cuts were announced on Monday alone.

At least six companies from manufacturing and service industries announced cost-cutting initiatives that included slashing thousands of jobs.

More than 200,000 job cuts have been announced so far this year, according to company reports. Nearly 2.6 million jobs were lost over 2008, the highest yearly job-loss total since 1945.

http://money.cnn.com/2009/01/26/news/economy/job_cuts/index.htm?postversion=2009012615

[SurfaceUnits]

Bank bailout could cost $4 trillion
Banks don't have enough capital to fix their problems. Tim Geithner's first task may be to assess how much it'll cost to clean up the financial mess.

[eiregosod]

banks hoping something will save them before they have to disclose thier off balance sheet expenditures.

[STD]

A more fuel efficient French built corporate jet? Citigroup's just trying to cut costs. :laugh:

Or more lobbists...
http://www.kansascity.com/438/story/998218.html

Surely they know what they're doing and needed less regulation all along. :shakehead

[oddlycalm]

Bank bailout could cost $4 trillion
Banks don't have enough capital to fix their problems. Tim Geithner's first task may be to assess how much it'll cost to clean up the financial mess.

In the absence of any regulation forcing financial institutions to fess up I don't see anything more than wild guesses any time soon. Some guesses are $4-5 trillion but the real number could be ten times that amount. Nobody has given much thought to what happens if the number is too big for the government to digest. Meanwhile the value of the underlying assets keep falling.

Warren Buffet tells a story that's instructive. A few years back Berkshire acquired a company with some derivative positions. Based on it's history I think we can all agree that Berkshire's due diligence has an excellent track record yet it cost over $400 million to unwind that particular derivatives book, many times their original estimates. If Berkshire can get it that wrong how much faith do we have that the Fed will get it right...?

oc

[eiregosod]

^ and we know what Warren said about derivatives? weapons of mass financial destruction

[cameraman]

Given the cost of unwinding these things I have to wonder what would happen if the government somehow declared all derivatives to be null and void. Simply unenforceable contracts. Any loans that they were based on would remain but the instruments themselves would simply go away.

It would make for one hell of a goodwill write off but how much worse could it be than it is now?

[SurfaceUnits]

When Citi split the other day, they kept one profitable business and moved all the junk to the second entity. We'll see how long that one lasts before bankruptcy.

[Insomniac]

Where the jobs aren't:
# Home Depot slashing 7,000 jobs
# Caterpillar to lay off 20,000 workers
# Sprint job cuts to total 8,000
ING to cut 7,000 jobs

Where the jobs are:
McDonald's: 1,000 new stores

Sprint is offering their employees a pretty good payout if they want it.

[Insomniac]

Given the cost of unwinding these things I have to wonder what would happen if the government somehow declared all derivatives to be null and void. Simply unenforceable contracts. Any loans that they were based on would remain but the instruments themselves would simply go away.

It would make for one hell of a goodwill write off but how much worse could it be than it is now?

Seems like the government would've been better off just paying monthly mortgages for people, stabilize the house of cards and as you said, force them to settle all derivatives (with a new tax). Then let the real estate mess play out. Offer 6.5% 30 year fixed refinance to anyone through Fannie/Freddie. Then start raising interest rates after 1 year.

[SurfaceUnits]

Fer sure...tens of thousands of families losing their homes...no problem...wall street billionaires losing their billionaire status...big problem

[JLMannin]

Fer sure...tens of thousands of families losing their homes...no problem...wall street billionaires losing their billionaire status...big problem

Yep - especially since the billionaires became billionaires by shorting derivatives based on the housing market, or something like that.

[Ankf00]

Seems like the government would've been better off just paying monthly mortgages for people, stabilize the house of cards and as you said, force them to settle all derivatives (with a new tax). Then let the real estate mess play out. Offer 6.5% 30 year fixed refinance to anyone through Fannie/Freddie. Then start raising interest rates after 1 year.

interest rates rising after a period of time helped get people into this mess. people are incapable of understanding the concept of variable rate.

Personally, I think funding unemployment ins. funds & public works is a better option than propping up bankrupt corps or instituting a version of price controls. The market does what it likes to do, and govt does what it likes to do.

[SurfaceUnits]

Japan's mess:

In Japan, rising unemployment, slowing household spending and a dim industrial outlook added to investors' fears that Japan was flirting with deflation and would post a horror fourth-quarter GDP figure.

Japan's biggest electronics maker, Hitachi, warned on Friday it faced the biggest ever annual loss by a Japanese manufacturer while chipmaker NEC announced 20,000 job cuts, the biggest cutback in Asia since the financial crisis began.

Japan's quarterly GDP data, due in February, are expected to show its economy fell at a double-digit rate.

Industrial production fell a record 9.6 percent in December, with companies cutting output of cars, electronics and machinery while annual core inflation slowed to 0.2 percent.

[Insomniac]

interest rates rising after a period of time helped get people into this mess. people are incapable of understanding the concept of variable rate.

Personally, I think funding unemployment ins. funds & public works is a better option than propping up bankrupt corps or instituting a version of price controls. The market does what it likes to do, and govt does what it likes to do.

Actually, interests rates rising weren't the problem as much as the drop in housing prices. people were upside down on mortgages and walking away was better than selling. If interest rates were high in the first place, ARMs are tougher to push on people. Ultimately, securitization is the root cause here (IMO). Once banks could easily dump any loan on someone else, people who had no business owning a house were given the worst types of loans they should have.

[SurfaceUnits]

Slim chance of a turnaround in 2009

Consumers and businesses have retrenched so deeply that it will take a long time for the economy to stage a meaningful comeback.

By Anthony Karydakis, contributor
Last Updated: January 30, 2009: 4:00 PM ET


1. The consumer pullback is severe and enduring.

2. Warehouses are filling up at a fast rate.

3. Companies have slashed their budgets.

4. The numbers may get worse.


http://money.cnn.com/2009/01/30/news/economy/Karydakis_turnaround.fortune/index.htm

[oddlycalm]

2. Warehouses are filling up at a fast rate.
Maybe, but there are a lot of wholesalers that are simply not ordering more product. While there may initially be drastically lowered prices to move existing inventory a more likely long term result will be shortages and lack of availability of a lot of items.

oc

[TravelGal]

Seems like the government would've been better off just paying monthly mortgages for people, stabilize the house of cards and as you said, force them to settle all derivatives (with a new tax). Then let the real estate mess play out. Offer 6.5% 30 year fixed refinance to anyone through Fannie/Freddie. Then start raising interest rates after 1 year.

Although it smacks of socialism, you've got a point. Spend the same money to keep the lenders solvent and the people in their homes. Reminds me of TravelGuy's suggestion that the governement should take all junkers (massively polluting vehicles) off the road and replace them with new ones. Once again, using the same money to accomplish two goals. Clean the emissions in one fell swoop and give a giant boost to the auto industry. Good in theory; impossible in practice.

[Insomniac]

Although it smacks of socialism, you've got a point. Spend the same money to keep the lenders solvent and the people in their homes. Reminds me of TravelGuy's suggestion that the governement should take all junkers (massively polluting vehicles) off the road and replace them with new ones. Once again, using the same money to accomplish two goals. Clean the emissions in one fell swoop and give a giant boost to the auto industry. Good in theory; impossible in practice.

My thinking was the stated purpose of TARP (which seems to pretty much be ignored) was to purchase the bad assets and get them out of the financial system. This made sense to me. Instead, they handed over cash so the firms could lend. Of course, instead they wrote down losses and used the money for anything but lending.

They were talking about reverse auctions 4 months ago. Now they're all "outraged" that TARP has been a disaster. You have Dodd saying that he's going to insist that Treasury find a way to get that money back from firms who paid bonuses. You are the Congress! Make a law to get it back. (Note that if I was a Wall St. executive, I'd do the same thing and pay me and my friends huge bonuses. Take the 2 day PR hit for $millions.)

Now I was thinking that the derivatives and CDS are bottomless pits. It would've cost far less to prop up mortgages for 6 months. You could work out some system where any homeowner (to make it fair to all) with a mortgage could apply for up to 50% of their payment with the caveat that amount would be offset against any future deductions for mortgage interest on their taxes. So there would be short term help with a potential long term payback for people who want to keep the homes.

In theory that would put the mortgages on more solid ground (even if home values are dropping, as long as people are paying their mortgage then the securities should be a bit better; I imagine the price may drop since home values are dropping, but the yield would be OK). Then you couple a new tax on derivatives contracts and force settlement.

I'd think/hope that the future lack of deductions from home owners plus the new tax would at a minimum break even.

Right now, only one thing is different from September. House values are dropping, foreclosures are going up, the bad assets are still out there and the credit markets are frozen. Taxpayers are out $350B+ just from TARP.

[SurfaceUnits]

You have Dodd saying that he's going to insist that Treasury find a way to get that money back from firms who paid bonuses. You are the Congress! Make a law to get it back.
And jeopardize the hundreds of millions of dollars wall street funnels to congress members? you are outta your mind

[oddlycalm]

Jon Stewart's suggestion was the the TARP funds should be dispersed to people with mortgages and credit card debt so they could make payment on them and make the banks healthier....:D

oc

[dando]

Jon Stewart's suggestion was the the TARP funds should be dispersed to people with mortgages and credit card debt so they could make payment on them and make the banks healthier....:D

oc

Yeah, but then the Gov would be required to make the minimum monthly payment while the banks are increasing those. Perhaps the funds should be used to play Powerball. :gomer:

-Kevin

[trish]

I'll have my card charged up just in case...

[SurfaceUnits]

What's with the tax problems of these nominees? Maybe Washington should take a look at the tax code.
I had to get a 100 page instruction booklet and dig around in it to find info to fill in one block on the 1040.
Reedickulus

[Insomniac]

What's with the tax problems of these nominees? Maybe Washington should take a look at the tax code.
I had to get a 100 page instruction booklet and dig around in it to find info to fill in one block on the 1040.
Reedickulus

They like to cheat on their taxes. Seems pretty simple. It wasn't an "accident" or "mistake" until they got caught.

[SurfaceUnits]

They like to cheat on their taxes. Seems pretty simple. It wasn't an "accident" or "mistake" until they got caught.

Seems that way. How many unpaid nanny tax incidents have we been through?

[SurfaceUnits]

job market much worse than we were led to believe:


x8hMJVXt09E

[coolhand]

^ Dam, That means I must of lost two jobs today

[cameraman]

Uh oh, that ain't good. I've already got one RIF letter, I don't really want to collect ummm, maybe five more.

[eiregosod]

Harry Markopolos (sp?) testified before congress today about Bernie made-off.

looks like regulation will no longer be a dirty word in US politics anymore.

[trish]

I think she meant 500 thousand. I hope.

[SurfaceUnits]

I knew there were more illegals than we were told

[nrc]

Harry Markopolos (sp?) testified before congress today about Bernie made-off.

looks like regulation will no longer be a dirty word in US politics anymore.

But politics will remain a dirty word around here. :)

[SurfaceUnits]

Bank of America or THE Bank of America?

Fears that the struggling bank may be nationalized have resurfaced as BofA's stock hits a nearly 20-year low. Some think CEO Ken Lewis needs to step down.

NEW YORK (CNNMoney.com) -- Is Bank of America literally destined to become THE Bank of America?

The Charlotte-based banking giant has already received $45 billion in taxpayer money. And the scary thing is that some think it may need even more to survive....possibly even an outright takeover by the government.

Shares tumbled nearly 18% early Thursday morning before bouncing back sharply later in the day and clawing into positive territory.

But at one point Thursday, the stock was trading below $4 a share, its lowest point in nearly 20 years.

That followed an 11% plunge Wednesday amid renewed speculation of nationalization.

http://money.cnn.com/2009/02/05/markets/thebuzz/index.htm?postversion=2009020513

[Ankf00]

AIG is 2 cows.

I laughed.

http://clusterstock.alleyinsider.com/2009/2/aig-implodes-the-two-cows-version

http://thrandur.net/chitchat/two-cows-economics-world-iceland/



Still confused about how AIG lost its shirt by going into the securities lending business big time? We understand. It's terribly complex and full of words that make your eyes glaze over.

So we decided to break it down into the simplest terms Wall Street transactions can be explained: the two cows story.

You have two cows.

John Paulson borrows one cow so he can sell it for $100. He gives you $10 as collateral.

You buy your neighbors cow for $100, which you finance by taking out a $90 loan from the bank and use John's $10 to make up the rest.

You brag to everyone about your financial health. You have assets--two cows you own, plus one Paulson owes you--worth $300, and liabilities of just $100.

A third of the country goes vegetarian.

You thought your two cows were worth $200 and now they are worth $140.

You express confidence in your financial health. Your assets are now worth only $200--your two cows plus the one John owes you--but your liabilities are still only $100. If necessary, you could sell the assets at this distressed price and pay off all your loans.

You hold onto your cows because you are sure the market is "dislocated." Some day someone will want to eat beef again.

The rest of the country goes vegetarian. Your two cows are now worth $2 each to guys who want to make dog food.

John Paulson buys a cow in the market for $2 and he gives it to you as repayment of the loan. You now have three cows worth six bucks.

John wants his $10 back.

The bank calls. It wants its $90 back.

You call the Federal Reserve and ask for a bailout.

[cameraman]

Okay I'm confused.


You have two cows.

John Paulson borrows one cow so he can sell it for $100. He gives you $10 as collateral. You buy your neighbors cow for $100, which you finance by taking out a $90 loan from the bank and use John's $10 to make up the rest. You brag to everyone about your financial health. You have assets--two cows you own, plus one Paulson owes you--worth $300, and liabilities of just $100.

The assets are calculated by three cows x $100.


A third of the country goes vegetarian. You thought your two cows were worth $200 and now they are worth $140.

Asset valuation $140 divided by two cows = $70 per cow


You express confidence in your financial health. Your assets are now worth only $200--your two cows plus the one John owes you--but your liabilities are still only $100. If necessary, you could sell the assets at this distressed price and pay off all your loans.

Here is the wtf moment, shouldn't your assets be $210??? Three cows at $70?


You hold onto your cows because you are sure the market is "dislocated." Some day someone will want to eat beef again. The rest of the country goes vegetarian. Your two cows are now worth $2 each to guys who want to make dog food. John Paulson buys a cow in the market for $2 and he gives it to you as repayment of the loan. You now have three cows worth six bucks. John wants his $10 back. The bank calls. It wants its $90 back. You call the Federal Reserve and ask for a bailout.

[SurfaceUnits]

Congressional Budget Office: Stimulus Will Harm the Economy in the Long Run

President Obama's economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.

CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.

CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.

[SurfaceUnits]

A case of Paulson padding his buddies' pockets

Bailout watchdog: Treasury paid too much
Government's assets acquired in the financial sector bailout are worth less than what they initially paid for them, according to an oversight official.

NEW YORK (CNNMoney.com) -- The Treasury Department overpaid for the assets it purchased as part of the $700 billion financial sector bailout, according to testimony of a bailout oversight official before Congress on Thursday.

At a Senate Banking Committee hearing, Elizabeth Warren, head of the Congressional Oversight Panel, testified that the more than $254 billion in assets that the government purchased in 2008 are worth just $176 billion - $78 billion less than what Treasury paid for them.

Warren said the shortfall happened on the date of the transaction, and is not representative of the market's movements since then. She noted that Treasury has failed to delineate a clear reason for such an overpayment.

[FTG]

It's more like this. Wall Street says that if you mix crap with a whole bunch of different kinds of meat, people will still want to eat it. Wall Street makes a fortune selling crap/meat combos. AIG sells insurance just in case Wall Street is wrong - agreeing to give money to the purchasers of the crap/meat combos if no one wants to eat them - but they convince the government not to call it insurance because the government has regulations designed to ensure that insurance companies are always able to pay off claims, and AIG never had any intention of actually paying off the claims.

Wall Street makes a fortune selling crap. AIG makes a fortune selling insurance contracts it can't honor. Everything is set up so that no one actually has to eat the crap for two or three years.

Two or three years pass. In a shocking development, that no one could see coming, people refuse to eat crap.

AIG needs to pay off a bunch of claims it was never capable of paying off.

Clinton, Greenspan and a whole bunch of politicians can't believe selling crap as food - and allowing insurance companies to issue contracts they can't honor - could ever cause a problem because supply and demand is supposed to eliminate all problems.

Some people, blame the poor people for not eating the crap and believe the best way to fix the economy is by giving Wall Streeter's and AIG executives tax cuts.

[Ankf00]

AMD had a 10% pay cut across the board, 20% for chief exec, TI dumped 12% of workforce

today find out all of Applied has mandatory 1 week leave per month through July.

:eek:

[cameraman]

The news report I saw had Applied Materials shutting down its Austin facility for four weeks starting June 8.

[SurfaceUnits]

nine banks have failed so far this year

[Sean Malone]

They yanked our bonus for this year. Directors and above got a 20% salary reduction. But at least we're working...for now.

[oddlycalm]

Americans, Churchill once remarked, will always do the right thing..... after they have exhausted all the other alternatives.

BTW, is anyone else wondering what happens when the US as well as dozens of other countries all issue massive quantities of debt notes a the same time? China and Japan's exports have come to a screeching halt, along with the attendant dollar cash flow, while the Gulf oil states are looking at <$40 oil for the medium term future, so their $ cash flow has also slowed. So who buys the $ trillions in debt instruments? Am I missing something...?

oc

[dando]

BTW, is anyone else wondering what happens when the US as well as dozens of other countries all issue massive quantities of debt notes a the same time? China and Japan's exports have come to a screeching halt, along with the attendant dollar cash flow, while the Gulf oil states are looking at <$40 oil for the medium term future, so their $ cash flow has also slowed. So who buys the $ trillions in debt instruments? Am I missing something...?

oc

Dude, go back and read the thread...I've been asking the same question for some time now. Japan, Germany and China have been buying U$ debt for quite some time over the past 20 years or so. Who's gonna buy it next? IMO, Nobody. :saywhat: The Indians have their own issues, the Russkies? :laugh: The velocity of $$$ is coming home to roost, yo. :shakehead

-Kevin

[trish]

The FED is going to buy it.

http://money.cnn.com/2009/02/06/markets/thebuzz/index.htm

http://money.cnn.com/2009/02/07/news/economy/fed_yellen.reut/index.htm?postversion=2009020712

[trish]

Watch this video.

_NMu1mFao3w

[SurfaceUnits]

A Report Alleges Further Financial Follies From Congressman Charles Rangel

Now some fresh pickings from the Political Grapevine:

Funny Money

A report says House Ways and Means Committee Chairman Charles Rangel failed to report acquiring, owning, or disposing of assets — a total of 28 times during the past 30 years.

Researchers with the Sunlight Foundation say "Assets worth between $239,026 and $831,000 appear or disappear with no disclosure of when they were acquired, how long they were held, or when they were sold."

The New York Democrat is currently under investigation by the ethics committee for a variety of other issues. The New York Post reports he dismissed the finding as a "cheap political stunt."

Rangel, 78, requested an investigation by the House Ethics Committee in July, following published reports that he was leasing four rent-stabilized apartments in a luxury development in the upper Manhattan neighborhood of Harlem. He was using one of the apartments as a campaign office, despite city and state laws requiring that rent-controlled properties be used as a primary residence. He has since moved his office out of that apartment, but has remained in the other three.

He is also under investigation for using his congressional stationery to solicit funds for a local college’s academic center that will bear his name.


Sorry, Charlie—Rangel Makes More Excuses for His Failure to Pay Taxes

The list of excuses offered by Rep. Charles Rangel for failing to pay taxes on at least $75,000 in rental income from his luxury beachfront villa in the Caribbean grows longer. Now the Associated Press takes the Harlem Democrat, who is chairman of the powerful tax-writing House Ways and Means Committee, to task for inaccuracies in his personal financial disclosures to Congress.

There's nothing new that's overly juicy—although the sloppy form-filling only reinforces the perception that Rangel is a financial scofflaw. But his excuse is priceless: "While over the years I delegated to my staff the completion of my annual House financial disclosure statements, I had the ultimate responsibility."

This kind of linguistic deviance, in which one seemingly takes responsibility while in fact deflecting blame elsewhere, is fast becoming an art form with Rangel. It's probably best summed up by two lines from a news conference he held last Wednesday to deflate the issue: "I sincerely regret and take personal responsibility for these errors," he said. And then, "I personally feel that I have done nothing morally wrong."


http://www.usnews.com/blogs/sam-dealey/2008/09/15/sorry-charlie--rangel-makes-more-excuses-for-his-failure-to-pay-taxes.html

[Ankf00]

The news report I saw had Applied Materials shutting down its Austin facility for four weeks starting June 8.

believable, revenues are down 75% and semiconductors across the board have hiring freezes & cuts in place at the moment. but a buddy from HS & UT's at the Austin joint and didn't mention that.

[Indy]

So who buys the $ trillions in debt instruments? Am I missing something...?

At some point they will have to raise the interest rates until someone buys them.

Refinance now, babies.

[Tifosi24]

Dude, go back and read the thread...I've been asking the same question for some time now. Japan, Germany and China have been buying U$ debt for quite some time over the past 20 years or so. Who's gonna buy it next? IMO, Nobody. :saywhat: The Indians have their own issues, the Russkies? :laugh: The velocity of $$$ is coming home to roost, yo. :shakehead

-Kevin

Speaking of the money supply, one of my fellow economists at work sent me a link a couple weeks ago that looked at M1 money supply. Generally the M1 supply has a velocity around 1.8 to 2.0 (in other words one dollar created by the Feds leads to roughly two dollars in the market), but in this link the M1 supply was at 0.95. So, at this point, the government can't even get a dollar for dollar return on its M1 money supply. Very scary. I will keep people apprised on this, because it is important considering there is no room for more interest rate cuts.

Edit: I was able to find the information in question on the St Louis Federal Reserve's website. In fact, the M1 multiplier has gotten worse since December, it is at 0.885. See link: http://research.stlouisfed.org/fred2/series/MULT?cid=25

[trish]

Speaking of the money supply, one of my fellow economists at work sent me a link a couple weeks ago that looked at M1 money supply. Generally the M1 supply has a velocity around 1.8 to 2.0 (in other words one dollar created by the Feds leads to roughly two dollars in the market), but in this link the M1 supply was at 0.95. So, at this point, the government can't even get a dollar for dollar return on its M1 money supply. Very scary. I will keep people apprised on this, because it is important considering there is no room for more interest rate cuts.

Edit: I was able to find the information in question on the St Louis Federal Reserve's website. In fact, the M1 multiplier has gotten worse since December, it is at 0.885. See link: http://research.stlouisfed.org/fred2/series/MULT?cid=25

What does that mean for our bank accounts?

[SurfaceUnits]

It means, the new dollars aren't being loaned out and are being consumed (horded) by the financial institutions. Also the economy is in a deflationary trend; so a dollar saved is a dollar earned + interest earned + deflation rate (as long as the items and services you will purchase are decreasing in price) - taxes.

[SurfaceUnits]

How many people could have purchased a Ferrari or other fine automobile with the money they've lost in the market?

[SurfaceUnits]

Report: Government May Force GM, Chrysler Bankruptcies

The U.S. government may force General Motors Corp. (NYSE:GM) and Chrysler LLC into bankruptcy in order to receive repayment of $17.4 billion in federal bailout loans. Bloomberg reports the automakers have dismissed calls to reorganize under bankruptcy protection, saying a Chapter 11 restructuring would scare away buyers and lead to liquidation. They are working toward a February 17 deadline to show progress on a plan.

[SurfaceUnits]

Economy rescue: Adding up the dollars
The government is engaged in an unprecedented - and expensive - effort to rescue the economy. Here are all the elements of the bailouts.

Total Allocated: $9.1 trillion

http://money.cnn.com/news/specials/storysupplement/bailout_scorecard/

[SurfaceUnits]

Geithner's plan falls flat

The Treasury Secretary's financial stability plan is underfunded and woefully short on details, experts said.

NEW YORK (Fortune) -- Treasury Secretary Tim Geithner failed Tuesday to persuade Wall Street that he will succeed where his predecessor Henry Paulson failed.

But observers said the Obama administration's plan is neither well-funded enough to recapitalize troubled banks, nor detailed enough to assure investors that the government can solve the toxic asset problem plaguing banks.

http://money.cnn.com/2009/02/10/news/geithner.questions.fortune/index.htm

[cameraman]

What experts? This is where hip waders come in. I love how these "experts" can hear a news conference and "analyze" a massive program and determine its effects across the entire banking sector and write up a report in oh say 45 minutes.

experts my ass:flame:

[SurfaceUnits]

How much T&E did you require to formulate your opinion of experts?

[Gnam]

USA may need to run a fundraiser the way the Vikings did in Europe or the Spanish did in the New World.[/pocyclypse]

Dollar dollar bill y'all.

[trish]

Report: Government May Force GM, Chrysler Bankruptcies

The U.S. government may force General Motors Corp. (NYSE:GM) and Chrysler LLC into bankruptcy in order to receive repayment of $17.4 billion in federal bailout loans. Bloomberg reports the automakers have dismissed calls to reorganize under bankruptcy protection, saying a Chapter 11 restructuring would scare away buyers and lead to liquidation. They are working toward a February 17 deadline to show progress on a plan.


What happens with those credit default swaps if this happens?

[Indy]

Industrial Disease, Dire Straits, 1982

Warning lights are flashing down at Quality Control
somebody threw a spanner and they threw him in the hole
there's rumors in the loading bay and anger in the town
somebody blew the whistle and the walls came down
there's a meeting in the boardroom they're trying to trace the smell
there's leaking in the washroom there's a sneak in personnel
somewhere in the corridors someone was heard to sneeze
'goodness me could this be Industrial Disease?

The caretaker was crucified for sleeping at his post
they're refusing to be pacified it's him they blame the most
the watchdog's got rabies the foreman's got fleas
and everyone's concerned about Industrial Disease
there's panic on the switchboard tongues are ties in knots
some come out in sympathy some come out in spots
some blame the management some the employees
and everybody knows it's the Industrial Disease

The work force is disgusted downs tools and walks
innocence is injured experience just talks
everyone seeks damages and everyone agrees
that these are 'classic symptoms of a monetary squeeze'
on ITV and BBC they talk about the curse
philosophy is useless theology is worse
history boils over there's an economics freeze
sociologists invent words that mean 'Industrial Disease'

Doctor Parkinson declared 'I'm not surprised to see you here
you've got smokers cough from smoking, brewer's droop from drinking beer
I don't know how you came to get the Betty Davis knees
but worst of all young man you've got Industrial Disease'
he wrote me a prescription he said 'you are depressed
but I'm glad you came to see me to get this off your chest
come back and see me later - next patient please
send in another victim of Industrial Disease'

I go down to Speaker's Corner I'm thunderstruck
they got free speech, tourists, police in trucks
two men say they're Jesus one of them must be wrong
there's a protest singer singing a protest song - he says
'they wanna have a war to keep us on our knees
they wanna have a war to keep their factories
they wanna have a war to stop us buying Japanese
they wanna have a war to stop Industrial Disease
they're pointing out the enemy to keep you deaf and blind
they wanna sap your energy incarcerate your mind
they give you Rule Brittania, gassy beer, page three
two weeks in Espana and Sunday striptease'
meanwhile the first Jesus says 'I'd cure it soon
abolish monday mornings and friday afternoons'
the other one's on a hunger strike he's dying by degrees
how come Jesus gets Industrial Disease

[trish]

Is martial law next? (http://www.smmirror.com/MainPages/DisplayArticleDetails.asp?eid=9419)

[Indy]

A year ago I would have laughed at your tin foil hat. Not so much now.

[SurfaceUnits]

The Marines were conducting urban warfare training (sounds like preparation now) in Indianapolis last year, with helicopter assault landings, Ospreys and other equipment. There was a group of people out protesting it.

With California doing its thing with the peoples' money and the feds being able to control your access to your bank accounts anything is possible.

I just received my tax refund today and it's going in a shoe box.

[SurfaceUnits]

FINAL STIMULUS BILL BALLOONS TO 1,071 PAGES...
Dem Senator Predicts: None of His Colleagues 'Will Have Chance' to Read It...
Lobbyists had Bill Before Lawmakers Did...

HURRY, FELLAS, LET'S VOTE, I AM OFF TO ROME!

[SurfaceUnits]

WASHINGTON — The compromise economic stimulus plan agreed to by negotiators from the House of Representatives and the Senate is short on incentives to get consumers spending again and long on social goals that won't stimulate economic activity, according to a range of respected economists.

"I think (doing) nothing would have been better," said Ed Yardeni, an investment analyst who's usually an optimist, in an interview with McClatchy. He argued that the plan fails to provide the right incentives to spur spending.

In a brief on the stimulus compromise, William Galston, a senior fellow at the center-left Brookings Institution and a former Clinton White House adviser, warned Thursday that a bank-rescue plan being finalized will make the $789 billion look like "pocket change."

"While the stimulus bill is a necessary condition for economic stabilization and recovery, it is hardly sufficient," Galston wrote. "As the lesson of Japan in the 1990s shows, fiscal stimulus without financial rescue yields stagnation — at best."

http://www.mcclatchydc.com/227/story/62082.html

[trish]

The Marines were conducting urban warfare training (sounds like preparation now) in Indianapolis last year, with helicopter assault landings, Ospreys and other equipment. There was a group of people out protesting it.

With California doing its thing with the peoples' money and the feds being able to control your access to your bank accounts anything is possible.

I just received my tax refund today and it's going in a shoe box.

This recently happened in New Orleans too except they claim it's police training. Who knows? http://www.katc.com/Global/story.asp?S=9752120 Then you have the "emergency camps". http://thebulletin.us/articles/2009/02/05/news/nation/doc498a746b75fb8881612741.txt

[SurfaceUnits]

Marines To Wage War In Indianapolis
Central Indiana To Host Urban Battle Training

A force of about 2,300 Marines will use Indianapolis for urban combat training for two weeks, beginning June 4, 6News' Jack Rinehart reported.

The Indiana State Fairgrounds is one of many landing zones in which Marines will jump out of helicopters to fight mock battles.

The city offered 26 sites, many of them parks, identified as realistic urban training zones.

The Marines will land for two weeks of situational training. The expeditionary force of 2,300 troops will fire weapons, conduct patrols and react to ambushes in an unfamiliar urban environment.

[KLang]

What's everyone going to do with their $13 a week stimulus windfall?

Can anyone explain how this is supposed to stimulate the econony:

Passports: $90 million is going to the State Department to deal with domestic facilities that deal with passports and training. :irked:

[Sean Malone]

What's everyone going to do with their $13 a week stimulus windfall?

Can anyone explain how this is supposed to stimulate the econony:
:irked:

Like the one guy said today, they let the appropriators write the package. :gomer: