Saturday, March 20, 2010

37 Bank Failures

3/20/10 37 Bank Failures

Four additional banks in
Georgia, Alabama and Minnesota were closed by regulators Friday,
bringing the national total to 37 for the year to date. Ellijay,
Ga.-based Appalachian Community Bank,
Hiawassee, Ga.-based Bank of Hiawassee, Fort Deposit, Ala.-based First
Lowndes Bank and Aurora, Minn.-based State Bank of Aurora were all
closed. The four bank failures will cost the deposit-insurance fund
$599.5 million, according to the Federal Deposit Insurance Corp. Largest of Friday's seven bank failures is Advanta Bank of Draper, Utah, with $1.6B in assets. The FDIC found no acquiring
bank, so the cost to the Deposit Insurance Fund will be roughly $636M.

Greece is pressing for a concrete standby
package from its European Union partners to help bring its borrowing
costs down. The overborrowed country currently pays almost twice as
much as Germany to refinance its debt.
Union leaders are set to discuss a support mechanism for Greece when
they meet in Brussels on March 25-26. Greece has said it may have to
turn to the IMF if a European solution is not found to help it manage
its debt mountain.

Barry Ritholtz: "My own views are that this is a cyclical bull rally within a secular
bear market, and that it ends with an approximate 20-30% correction,
followed by a broader trading range. As of today, we see no signs that
the end is imminent. However, the closer we get to the day when the
market believe a Fed removal of accommodation is imminent, the closer
we will be to the top. Alternatively, once the current unwind of the armageddon trade encounters the heavier resistance of Dow 11,500k and S&P 1250, the upwards momentum is likely to wane.
Until then, the bias remains to the upside."

Doug Noland: "I wish we could implement a gold standard. Global Credit systems and
economies are in dire need of a mechanism that would work to promote at
least a semblance of stability. Regrettably, at this stage of massive
global debt and synchronized global inflationism, a gold-based monetary
regime is implausible. As such, I am a proponent of sound central
banking – the kind that doesn’t exist today. It’s our last resort.
And it’s in this vein that I am so frustrated with Mr. Greenspan. He
just refuses to address the dangerous flaws of contemporary central
So we learn so little from the past and set course for another
historic Bubble – The Global Government Finance Bubble. Flawed central
banking doctrine leads to mistake after bigger mistake. The
consequences of previous government market interventions ensure only
more intrusive interference. And Alan Greenspan, the seeming
free-market ideologue, works to ensure he goes down in history as the
father of modern inflationism."

Jim Rogers Says 2012 Recession Will be Worse

The lies of Lehman were multifold. Three times, in late 2007 and the
first half of 2008, Lehman used "balance sheet manipulation," according
to the examiner's report, to hide debt of $38.6 billion,
$49.1 billion
and $50.4 billion.

Germany's central bank - the Deutsche
Bundesbank (German for German Federal Bank) - has admitted in writing
that banks create credit out of thin air.
As the Bundesbank states in a publication entitled "Money and Monetary Policy" (pages
88-93; translation provided by Google translate, but German speaker and
economic writer Festan von Geldern confirmed the basic translation).

ZeroHedge:"Federated Investors' David Tice has a thing or two to say about the
rally - "We've been the beneficiary of a massive credit bubble that
we've not yet worked off the excesses... This secular bear market will
not bottom until we get back until we get back below book value." In a
portion of the interview not caught by the Bloomberg clip below, Tice
says that the decline potential for the market is "huge." Don't tell
that to the algos whose one and only program for the past month and a
half is Buy.The.Dips."

Bharti Airtel Ltd., the Indian phone company planning
a $9 billion purchase of Zain’s African wireless assets, intends to
make an offer next week, after Bharti’s board today approved the bid,
according to two people with knowledge of the negotiations.
Zain, Kuwait’s biggest phone company, may be asked
to provide legal protection from a dispute in Nigeria, one of the
people said, declining to be identified because the discussions aren’t
public. The board didn’t specifically ask for this protection, and was
satisfied with the proposals that Bharti management made with regards
to Nigeria, the second person said.
Bharti and Zain are in exclusive talks until March
25 to complete a transaction that would give India’s largest wireless
carrier 42 million new subscribers in 15 African countries. Bharti has
sought overseas businesses as competition at home has reduced call
rates for many of its 122 million Indian subscribers to as little as
half a U.S. cent a minute. This is Bharti’s third attempt to enter
Africa, after being thwarted twice in efforts to merge with South
Africa’s MTN Group Ltd.

Thespread between 2- and 10-year yields, charted on the
yield curve, dropped yesterday to 2.70 percentage points, the
lowest level on a closing basis since Jan. 1. The yield on the
10-year note was little changed at 3.69 percent at the end of
this week.
The last time the yield curve flattened for five
consecutive weeks or more was in June 2005, when then Fed
Chairman Alan Greenspan said in congressional testimony that
underlying inflation remained “contained.”

Friday, March 19, 2010


3/19/10 Greece

China’s yuan is destined to become a global reserve currency rivaling
the dollar and the euro, as the nation’s economic power increases the
currency’s allure, said Jim O’Neill, chief economist at Goldman Sachs
Group Inc.

Stephen Roach: "Isn't it the height of hypocrisy that America can articulate a
particular position in its currency but the Chinese are not allowed to
do that."

Ways and Means Republicans on Thursday assailed a provision in the
proposed health care reform bill under consideration this week. Subcommittee
on Oversight ranking member Charles Boustany (R-La.) said the IRS
provision in the bill "dangerously expands, in an ominous way the
tentacles of the IRS and it's reach into every American family," he
said today during a press conference. "This is a vast expanse of power," he said. Boustany said the bill would allow the IRS to confiscate refunds if there are penalties for not buying health care.

Earthfiles: "

March 18, 2010 - Huge V-Shaped UFO Emitted Beam
On C-5 At Vandenberg AFB. Click for report.“The big V-shaped craft was in its silent hover position
and it turned on a beam of light ... and directed it like a laser
beam onto the C-5, like it was aiming the beam right towards the cargo
bay area.” - “Steve,” former USAF Airman, Southern California"

The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system. (Are you for real Ben?)

Democrats need about six more votes
from House members to pass a U.S. health-care overhaul, Obama
administration officials said today. White House and Democratic leaders aim to collect those
votes from a pool of about 14 to 15 undecided lawmakers to get
to the 216 votes needed to pass the measure, according to the
officials, who spoke on condition of anonymity.

Why drill with natural gas at $4? May as well have producers donate it for a tax deduction.

The Senate bill requires insurers to spend at
least 85 cents of every premium dollar on medical care in small group
markets and 80 cents in large group markets. The proposed changes also
would require Medicare Advantage insurers to spend at least 85 percent
of revenues on medical care.
Firms with more than 50 workers who do not offer medical coverage could face fines of $2,000 per full-time employee.
subsidies would be provided to help people with incomes up to 400
percent of the poverty level purchase coverage on the exchange.
Proposed changes would sweeten those subsidies for lower income people.
The Senate bill included a 40 percent excise
tax on high-cost health insurance plans. The proposed changes would
delay implementation of the tax until 2018 instead of 2013. The tax
would kick in on plans costing $10,200 for individuals and $27,500 for
family coverage. A higher threshold is allowed for plans covering
mostly women, older workers and retirees as well as those in high-risk
The bill calls for
raising the payroll taxes for Medicare, the government health insurance
plan for the elderly, to 2.35 percent from the current 1.45 percent for
individuals earning $200,000 or more and for couples earning $250,000
or more. The proposed changes would apply the tax to some investment
income as well for those high-income groups.
The legislation would freeze payments to
insurers that provide coverage to Medicare patients in 2011 and begin
reducing the subsidy in 2012.
would also gradually close the gap in drug coverage for Medicare
beneficiaries by 2020. Those who enter the coverage gap, the so-called
doughnut hole, in 2010 will get a $250 rebate. In 2011 they would get a
50 percent discount on brand-name drugs.

Supply of foreclosed homes on the rise again, putting pressure on home prices.

.In the account given by the Merrill officials, the SEC, the lead
regulator, and the New York Federal Reserve were given warnings about
Lehman’s balance sheet calculations as far back as March 2008."

American National Bank of
Parma, Ohio, became the 31st bank failure of the year, according to the
Federal Deposit Insurance Corp. Friday. National Bank and Trust Co. of
Wilmington, Ohio, will assume all of the deposits and buy the assets of
American National. The bank had about $70.3 million in assets and $66.8
million in deposits.

Gold for April delivery finished down $19.90, or 1.8%, at $1,107.60 an ounce at the New York Mercantile Exchange.

The Federal Reserve will be
required to identify the names of banks that could have collapsed if
not for the central bank's emergency lending, a federal appeals court
said Friday. The U.S. Court of Appeals for the Second Circuit in New
York ruled on Friday that the Fed needs to disclose documents in
response to Freedom of Information Act requests by Bloomberg L.P. and
other news organizations. "We are reviewing the decision and
considering our options for reconsideration or appeal," said Fed
spokeswoman Barbara Hagenbaugh.

Greece is just a step away from
being unable to borrow, Greek Prime Minister George Papandreou told
union members Friday, according to Reuters, as he sought to drum up
support for the government's austerity measures. "With full honesty
towards Greeks, we talked about the point we have reached -- one step
from being unable to borrow," he said. "We must avoid paying usurious
interest for decades, condemning the country to a deep recession."
Papandreou has pressed European Union leaders to come up with a
concrete standby aid plan next week, saying it is essential to reduce
the nation's borrowing costs and allow it to meet its deficit-reduction

The Reserve Bank of India
raised its key lending and borrowing rates by a quarter-percentage
point on Friday to contain inflation and anchor expectations of rising
prices, the central bank said in a release. The RBI raised the
repurchase rate, or key lending rate, to 5.00% and the reverse
repurchase rate, or the borrowing rate, to 3.50% with immediate effect,
it said.

Dick Bove: Housing Market Will Fall 10%-15% When Fed Stops Subsidizing Home Prices

The Dow Jones industrial average dropped 37.19 points, or 0.35 percent, to end at 10,741.98. The Standard & Poor's 500 Index lost 5.93 points, or 0.51 percent, to 1,159.90. The Nasdaq Composite Index shed 16.87 points, or 0.71 percent, to 2,374.41.

For the week, the Dow rose 1.1 percent, the S&P added 0.9 percent and the Nasdaq gained 0.3 percent.

Thursday, March 18, 2010

Current Account Deficit

3/18/10 Current Account Deficit

The U.S. current account deficit widened less than expected to
$115.6 billion in the fourth quarter of 2009, largely driven by the
swelling U.S. trade deficit, a Commerce Department report showed on
current account gap rose from a downwardly revised $102.3 billion in
the third quarter. Analysts had expected the fourth quarter deficit to
widen to $119 billion.
The fourth quarter deficit equaled 3.2 percent of gross domestic product, up from 2.9 percent in the July-September period.
current account deficit for all of 2009 narrowed to $419.9 billion, the
smallest since 2001. It equaled 2.9 percent of GDP, down from 4.9
percent in 2008.
The number of people applying for unemployment benefits fell by 5,000 to a
seasonally adjusted 457,000 in the week ended March 13, marking the
third straight decline, the Labor Department reported Thursday. It was
in line with expectations. The four-week average of initial claims - a
better gauge of employment trends than the volatile weekly number -
fell by 4,250 to 471,250. The number of people who continue to get
regular unemployment checks rose by 12,000 to a seasonally adjusted
4.58 million in the week ended March 6.

U.S. consumer prices were
unchanged on a seasonally adjusted basis in February, with falling
energy prices offsetting increases in prices of cars, medical care and
food, the Labor Department reported Thursday. Economists surveyed by
MarketWatch had predicted the flat reading on the consumer price index.
The core CPI - which excludes food and energy prices - rose 0.1%, also
as expected. In the past year, the CPI has risen 2.1%. The core rate is
up 1.3% in the past year, the smallest year-over-year increase in six
years. Shelter prices were unchanged last month. Energy prices fell
0.5%, while food prices rose 0.1%.

German industrial conglomerate Siemens AG said Thursday it will eliminate 4,200 jobs worldwide by 2011 in its IT business unit.

Greece raised the stakes on Thursday in its quest for EU help to
tackle its debt crisis, warning it cannot achieve promised deficit cuts
if its borrowing costs remain so high and may have to call in the IMF.
country, however, strongly denied a report that it was scheduled to
turn to the international lender as soon as April and said all options
for getting support were still open.
"This (report) is ridiculous," Finance Minister George Papaconstantinou told Reuters.
have said from the beginning that all options are open ... we are not
any closer now to the IMF (than before). These reports are just plain

Brett Steenbarger: "We've once again seen the equity
put-call ratio dip below .50, indicating a relatively high level of
bullishness among traders. With 2706 20-day highs and 272 lows on
Wednesday, however, we still don't see a level of deterioration in the
broad market that would normally be associated with a significant
market reversal. Demand continues to outpace Supply and we're seeing
Supply expansion at successively higher price levels, characteristic of
an uptrending market. We're also seeing fresh bull market highs in the
advance-decline line specific to NYSE common stocks."

During the evening news on March 15, 2010, KTVU (Channel 2) in the San Francisco Bay Area reported, "State of California issued 23,255 pink slips to CA teachers." The state is required to notify teachers no later than March 15th if they might be terminated and not teaching the following fall semester.

More Americans Disapprove of Obama's Performance Than Approve, Polls Finds.
For the first time since President Obama took office, more Americans
are unhappy with the job he's doing than are happy with it, according
to the latest Gallup poll. In the poll, 47 percent of Americans
disapprove of Obama's job performance compared to 46 percent who
approve. Obama's job approval rating fell to 46 percent last week, an
all-time low for the president.

The Energy Department on Thursday is expected to report a draw of 27
billion to 31 billion cubic feet of natural gas storage inventories for
the week ended March 12, according to a survey of analysts by Platts,
the energy information arm of McGraw-Hill Cos.
Natural gas burns clean and is the preferred fuel for industrial use.
Transportation is as simple as hooking up to the underground line
running down most streets in America. Natural gas is also used for
demand load electrical generation. Natural gas electrical plants are
inexpensive and can be built quickly. At present prices, electricity
produced with natural gas is cheaper than from coal.

Natural gas supplies down 11 Bcfs -- EIA. Working gas in storage was 1,615 Bcf as of Friday, March 12, 2010, according to
EIA estimates. This represents a net decline of 11 Bcf from the previous week.
Natural gas for April delivery was down 17 cents, or 3.8%, at $4.14 per
million British thermal units. It earlier traded as high as $4.33 per
million Btus.

A slow recovery is expected this
summer, and economic conditions will improve moderately in the near
term, the Conference Board said Thursday. As expected by analysts, the
index of leading economic indicators rose 0.1% in February, marking 11
consecutive gains, following an increase of 0.3% in January. The
interest rate spread and real money supply made the largest positive
contributions in February, while average weekly manufacturing hours and
stock prices made the largest negative contributions. "Going forward,
the big question remains the strength of demand," said Ken Goldstein,
economist at the Conference Board. "Without increased consumer demand,
job growth will likely be minimal over the next few months."

The Philiadelphia Federal Reserve's index on manufacturing in the region rose to 18.9 last month from 17.6 in January.

The Dow finished up 46 points to 10,779. The Nasdaq Composite Index was up 2 points to 2,391.

The Standard & Poor's 500 Index slid a half-point to 1,166.

Wednesday, March 17, 2010


3/17/10 Seven

Wholesale prices fell a
larger-than-expected 0.6% in February after seasonable adjustments,
with energy prices falling 2.9%, the Labor Department reported
Wednesday. This is the largest decline since last July.The producer
price index has risen 4.4% in the past year, the government said. The
core PPI - which excludes food and energy prices - rose 0.1% in
February, more than expected. Core prices are up 1.0% in the past year.
Economists surveyed by MarketWatch expected a 0.3% fall in the headline
PPI and a 0.1% decline in the core rate. The PPI had risen 1.4% in
January, while the core rate was up 0.3%.

Members of the Organization of
the Petroleum Exporting Countries have agreed to keep the cartel's
production quota unchanged at 24.845 million barrels a day, as
expected, according to media reports on Wednesday citing delegates.
OPEC is holding a meeting in Vienna. An official announcement is
expected later on Wednesday.

The Bank of Japan loosened monetary policy on Wednesday in a split
vote that suggested the central bank would struggle in the future to
meet government demands for easier monetary conditions.
government has prodded the BOJ for weeks to ease policy, a tactic
analysts say is aimed at preventing a rise in the yen from derailing an
export-driven recovery and deepening deflation.
The BOJ doubled
to 20 trillion yen ($221 billion) the funds available to banks for
three-month loans at the policy rate of 0.1 percent. The outcome was in
line with expectations.

The euro is unlikely to still exist as a currency over the longer term,
the pound will fall substantially in the next few years and US
Treasurys and some real estate in China are the world's two current
bubbles, legendary investor Jim Rogers told Wednesday.

Sol Palha: "Clearly, the US does not favour stronger dollar policy for though it mouths this, its actions speak otherwise. The bandits in congress want to print all the money in the world, and then they want other nations to let their currencies appreciate. China is too smart to fall for this game and the US is no longer the big bad wolf that can huff and puff and blow all the straw houses down. Now many of the houses are built with brick and steel and so no matter how hard this big bad wolf blows the Chinese house is not going to fall down.
One must remember that the one that controls the strings to the purse is the one that is in command and at this point China with its huge holding of US treasuries appears to be in charge. Thus the US can make a lot of noise out there but China will not listen because they know that all they have to do is threaten to unload their treasury holdings (they do not even have to really sell them) and it could have a severe impact on our markets. The story below clearly indicates that China is not going to be bullied into allowing its currency to appreciate against the dollar.
A Commerce Ministry spokesman repeated Chinese complaints that Washington was acting unreasonably by expecting other countries to raise their value of their currencies in order to boost U.S. exports. The United States and other trading partners complain Beijing keeps the yuan undervalued and are pressing for it to rise.
"Politicizing the exchange rate issue is not helpful to coordination among all parties in the course of fighting the global financial crisis," spokesman Yao Jian said at a news briefing.

An obscure parliamentary maneuver favored by House Speaker Nancy Pelosi (D-Calif.) suddenly ignited Tuesday as the latest tinder in the year-long partisan strife over reshaping the nation's health-care system, triggering debate over the strategy's legitimacy and political wisdom.
Republicans condemned Pelosi's idea -- in which House members would make a final decision on broad health-care changes without voting directly on the Senate version of the bill -- as an abuse of the legislative process.
House Minority Leader John A. Boehner (R-Ohio) called it "the ultimate in Washington power grabs." Pelosi
shot back: "I didn't hear any of that ferocity when the Republicans
used this, perhaps, hundreds of times."
Off Capitol Hill, parliamentary experts of both parties said the
tactic has been used with increasing frequency in recent years by
Democrats and Republicans alike, usually earlier in the legislative
process. And political analysts wrangled over whether the use of the "self-executing rule," also known as a "deem and pass," would further antagonize an electorate
whose enthusiasm for Democrats has dimmed in the past year.
Legal scholars disagreed about whether it would be a constitutional
way to pass the legislation. Yet even critics said they doubt that the
procedure would put the measure at risk of being struck down by the
"I feel pretty confident it is unconstitutional," said Michael W. McConnell, director of Stanford Law School's Constitutional Law Center and a former appellate judge appointed by President George W. Bush. "What a court would do about it is a murkier problem."

"The economy is poised to start seeing unemployment begin to drop,"
says John Challenger, CEO of Challenger, Gray & Christmas.
who've been very cautious [will] begin to start turning the temp
workers they are hiring into permanent people," Challenger says,
predicting positive growth in payrolls will emerge by the second half
of 2010.

Rigzone: "Indian conglomerate Reliance Industries Ltd. is in late-stage talks
to buy a big stake in a U.S. natural-gas field, according to several
people familiar with the matter.
Reliance is nearing a deal to partner with Atlas Energy Inc., which
controls about 584,000 acres in the expansive Marcellus Shale, a huge
gas-bearing formation that stretches from West Virginia to New York.
The deal would likely make Reliance the first Indian company to buy
into the Marcellus, which has drawn big investments from other foreign
Under the deal as considered, Reliance would pay between $1 billion
and $1.5 billion to take a joint-venture stake with Atlas, which has
been seeking a joint-venture partner for several months. It was not
clear how the size of Reliance's stake in the deal, but Atlas is said
to be seeking a 50-50 partner, said these people."

Siemens AG's information-technology unit SIS is facing job cuts in
the four-digit range, a person familiar with the matter said Wednesday. "World-wide, probably more than 1,000 positions will be
eliminated," the person said. Currently, the unit has around 35,000

Shell will cut a further 1,000 global jobs by the end of 2011.

The amount California workers contributed to their employer-backed
health coverage increased 83 percent between 2000 and 2008 while their
income stayed the same, according to a report released today.

Daniel Dicker: "Natural gas prices have nowhere to go but up, and I think they are headed there. Now's the time to get involved. "

Democrats remain 16 votes short of the overall majority needed
to pass health care reform, at 190 Yes and 206 No, according to David
Dayen's Whip Count. There is still time to get the floaters on board,
however, it remains extremely close.

An Energy Department storage report on March 18 may show that supplies
fell 35 billion cubic feet last week, based on the median of six
analyst estimates compiled by Bloomberg. The five- year average decline
for the week is 65 billion. Above-normal temperatures are predicted for
the Midwest and Northeast through March 20, crimping demand for the
furnace and power-plant fuel.

Companies will get a tax break
if they hire new workers under a bill approved by the Senate on
Wednesday. The Senate voted 68-29 to approve the bill and send it to
President Barack Obama for his signature. The bill also extends highway
spending through the end of the year, and extends a tax break for small
businesses that buy new equipment.

The US housing market will face another retreat while mortgage-backed
securities and Treasurys are likely to go through a "material"
correction, Meredith Whitney, CEO of Meredith Whitney Advisory Group,
told CNBC Tuesday. "The housing market surely will double dip," Whitney told "Worldwide Exchange." "The asset classes of MBS and Treasurys are
priced for a material correction in my opinion," she said. "The only
buyers of agency MBS are the Fed and banks so you see how precarious
that market is."
"If the Fed pulls back, that's a really big deal... because there's no substitute buyer."

Up for a seventh day, the Dow industrials added 47.69 points, or 0.5%, to 10,733.67. The S&P 500 Index rose 6.75 points, or 0.6%, to 1,166.21. The Nasdaq Composite Index climbed 11.08 points, or 0.5%, to 2,389.0

Tuesday, March 16, 2010

The Fed

3/16/10 The Fed

ZeroHedge: "The Herald of Scotland, however, may have credible
proof that a US-led attack on Iran approaches and could be just days
away. The newspaper has procured proof of an arms shipment to Diego
Garcia, which consists of "of 195 smart, guided, Blu-110 bombs and 192
massive 2000lb Blu-117 bombs...put in place for an assault on Iran’s
controversial nuclear facilities." Additional insight comes from Dan
Plesch, director of the Centre for International Studies and Diplomacy
at the University of London: “They are gearing up totally for the
destruction of Iran. US bombers are ready today to destroy 10,000
targets in Iran in a few hours." Is war imminent? And will Obama repeat
Bush's mistake with Iraq, resulting in a huge spike in oil, coupled
with a rush to safety in dollars and/or gold? If inflation will not
start on its own, its has to be kindled: preferably by a Blu-117 bomb.
Is the relatively long period of market stability and low volatility
about to come to a sudden end?

U.S.housing starts fell about 5.9% to a seasonally adjusted annual rate of
575,000 in February as several massive snow storms hit the East and
South, according to data released Tuesday by the Commerce Department.
New construction was down in the Northeast and South, but up in the
Midwest and West. Starts of single-family homes fell 0.6% to a 499,000
pace, while starts of large condos and apartment building plunged 43%.
In the past year, starts of single-family homes are up 39%, while
starts of multifamily units are down 41%. Building permits - which
aren't as affected by weather as starts are - dropped 1.6% to 612,000
in February. Permits for single-family homes fell 0.2% to a 503,000

Chain-store sales for the week
ended March 13 rose 3.2% from the year-earlier period, according to a
survey released Tuesday by the International Council of Shopping
Centers and Goldman Sachs. On a week-over-week basis, sales fell 0.4%.

A magnitude 4.4 earthquake hit
the greater Los Angeles area at 4:04 a.m. local time, the U.S.
Geological Survey said on its Web site.

Ambac said it is evaluating the
need for additional or modified disclosures as a result of ongoing
discussions with financial counterparties and the Office of the
Commissioner of Insurance of the State of Wisconsin. "The company
anticipates that the outcome of these discussions could have a material
impact on the disclosure and financial statements included in its form
10-K" Ambac said.

Official forecasts may be underestimating the future demand for oil by
30 million barrels a day, according to a research paper by Joyce Dargay
of the University of Leeds and Dermot Gately of New York University. If
so, the next oil crisis is going to be a whopper. Dargay and Gately base their logic on the observation that the demand for oil no longer appears to respond to price.

A report says nearly a quarter of Californians under age 65 had no health insurance in 2009. The UCLA Center for Health Policy Research study reported in Monday's
Los Angeles Times said the state's uninsured population jumped to 8.2
million last year. That's up from 6.4 million in 2007, marking the
highest number of uninsured over the last decade.

After laying the groundwork for a decisive vote this week on the Senate's health-care bill, House Speaker Nancy Pelosi suggested Monday that she might attempt to pass the measure without having members vote on it.
Instead, Pelosi (D-Calif.) would rely on a procedural sleight of hand:
The House would vote on a more popular package of fixes to the Senate
bill; under the House rule for that vote, passage would signify that
lawmakers "deem" the health-care bill to be passed.
The tactic -- known as a "self-executing rule" or a "deem and pass" -- has been commonly used, although never to pass
legislation as momentous as the $875 billion health-care bill.
Democrats would thus send the
Senate bill to President Obama for his signature even as they claimed
to oppose the same Senate bill. They would be declaring themselves to
be for and against the Senate bill in the same vote.

The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 26%
of the nation's voters Strongly Approve of the way that Barack Obama is
performing his role as President. Forty-two percent (42%) Strongly
Disapprove giving Obama a Presidential Approval Index rating of -16.

Economic Disconnect: "Not to worry those of you with a bullish mind, reality has long since departed the collective soul of US markets."

* Technical Analyst Charles Nenner Predicts the Market May Crash in April
Posted by: madhedgefundtrader
Post date: 03/15/2010 - 23:09
A second deflationary tidal wave may hit the US early as April. The Dow
is going to crash, possibly heading for a double bottom at 6,000, and
bonds are going up for the rest of the year. Gold has had it for the
foreseeable future. First, deflation, then inflation. The greatest
trade of your lifetime is setting up. This trend could start tomorrow,
or in two years. Blow your entry point, and you’ll get wiped out. Oh,
and by the way, crude oil futures are discounting war with Iran by
2013!Wal-Mart StoresInc., years after a failed effort to obtain a bank charter, plans a 50%
increase this year in the number of the company's stores offering
bank-like services. The expansion would push the number of
Wal-Marts with "Money Centers" to 1,500, or a little less than one for
every two Wal-Marts in the U.S., giving the nation's biggest retailer a
financial presence that only a handful of banks have. Wal-Mart plans to
open its 1,000th money center Tuesday.

Xinjiang oilfield, a subsidiary oilf ield of PetroChina, is to build a large-sized na tural gas storage facility in
Hutubi gasfield to cushion natural gas s hortage in northern part of
Xinjiang during the cold winter, a local g overnment official said
According to an official with the local government of
Karamay, t he storage, with a capacity of about several billion cubic
meters, wil l be part of a national energy security plan that focuses
on solving natural gas shortage.

U.S. import prices fell 0.3 percent in February, led by a drop in
prices for crude oil and other petroleum products, the Labor Department
reported on Tuesday.

The Federal
Reserve kept its benchmark interest rate at a record low level Tuesday
and made no changes to the key "extended period" policy pledge. The
Fed's policy statement, released after a closed-door meeting, said the
economic situation is "likely to warrant exceptionally low levels of
the federal funds rate for an extended period." The Fed's description
of the economy was a little more upbeat about the job market. But Fed
officials also noted that housing remained weak. The Fed said that its
purchases of more than a trillion dollars of mortgage-backed securities
would be finished by the end of the month as scheduled. The Fed kept
the door open for more purchases, saying that it will employ its policy
tools as necessary to promote growth. There was one dissent to the
policy stance. Thomas Hoenig, the president of the Kansas City Federal
Reserve Bank, objected to the extended period wording for the second
straight meeting.

Crude oil futures added to gains
in late afternoon electronic trade Tuesday after the American Petroleum
Institute said U.S. crude oil inventories rose 403,000 in the week
ended March 12, less than analysts expected. Analysts polled by Platts
expected an increase of 1.9 million barrels for the week ending March
12. Crude oil for April delivery recently gained 27 cents, or 0.3%, to
$81.97 a barrel in electronic trade. The API said gasoline supplies
fell 3.654 million barrels and distillate stocks fell 756,000 barrels.
Analysts polled by Platts expected gasoline supplies to fall by 1.5
million barrels and distillate stocks to fall by 1.6 million barrels.

The Dow Jones Industrial Average rose 43.83 points, or 0.4%, to 10,685.98. The S&P 500 Index climbed 8.95 points, or 0.8%, to 1,159.46. The Nasdaq Composite Index added 15.8 points, or 0.7%, to 2,378.01.

Monday, March 15, 2010


3/15/10 Indices

Mike Burk: "The market is about as over bought as it has ever been.
Two significant, although not major, indices have been up for 13 consecutive days, they are:
The NASDAQ 100 (NDX) up 7.3%, its longest run since January 1992.
The S&P mid cap (MID) up 7.3%, the longest run in its slightly less than 20 year history.
The extreme overbought condition is only a short term negative because all of the major indices and indicators are confirming the high.
Volume is what's been missing from this rally...
Nearly everything that matters confirmed last week's highs. The implications of that are if a cycle top were to begin to develop next Monday, a final top would take 4-6 weeks to develop.
I expect the major averages to be higher on Friday March 19 than they were on Friday March 12."

Chinese Premier Wen Jiabao rebuffed calls for the yuan to appreciate and sought assurances
that the U.S. will protect the value of China’s dollar assets.
“I don’t think the yuan is undervalued,” Wen said at a
press conference in Beijing marking the end of China’s annual
parliamentary meetings. Dollar volatility is a “big” concern
and “I’m still worried” about China’s U.S. currency holdings,
he said.
Wen urged America to “take concrete steps to reassure
investors” about the safety of dollar assets, repeating
concerns that he expressed a year ago, sparked by a growing U.S.
fiscal deficit. Treasury Department figures show China’s
holdings of Treasury securities dropped for a second month in
December to $894.8 billion.

Cnooc to Buy 50% of Argentina Crude Exporter Bridas Corp. for $3.1 Billion

“Dick Fuld is going to be bankrupted and he’s going to spend the rest of his life in court fighting legal battles,” observes Dick Bove of Rochedale Securities in
a phone call this afternoon. Bove, who said he’s having the nine
volumes of the examiner’s report printed and bound, added, “There maybe
others forced to do the same.”

John Hussman: "It should be evident that the recent credit
crisis did not emerge as some unpredictable surprise, but was instead
the very ordinary outcome of extraordinary recklessness. Though the
mounting problems in 2005 were utterly ignored by the stock market for
more than two years after this analysis was published, the fact is that
even with the recent rebound, the S&P 500 remains below where it
was in mid-2005. Overvaluation and reckless lending do not always
translate into near-term market weakness, but they invariably haunt
investors in the form of poor long-term returns."

Apparel company Phillips-Van Heusen Corp said it will buy fashion
brand Tommy Hilfiger in a cash and stock deal for about $3 billion in a
bid to boost its presence in markets like Europe and Asia.Tommy Hilfiger is currently owned by private equity firm Apax Partners.

Walmart is planning for another big weekend, preparing all 24-hour
stores to entertain fans shortly after twilight, Friday evening.
"Twilight-themed" giveaways will go to the first 100 in line.
Additionally some stores will have more giveaways to fans that can
prove their "Twilight trivia" knowledge in the run-up to the midnight
release. Among the many offerings in its Twilight Saga Shops, Walmart
will bring out at midnight the "New Moon Ultimate Fan Edition" -- the
only DVD to be released with a "sneak peek" of "The Twilight Saga:
Eclipse." Last year "Twilight" became one of the most pre-ordered DVD
movies in Walmart history, and the most successful DVD release event.

Net foreign purchases of
long-term securities slowed markedly in January, the Treasury
Department said Monday. Total holdings of equities, notes and bonds
increased a net $19.1 billion in January. This is down from $63.3
billion in the previous month. Including short-term securities and bank
lending data, foreigners sold a net $33.4 billion compared with
purchases of $53.6 billion a month earlier. The Treasury Department said Monday that China's holdings dipped by
$5.8 billion to $889 billion in January compared to December. Japan,
the second largest foreign holder of U.S. government debt, also trimmed
its holdings but by a much smaller $300 million to $765.4 billion.

Rob Hanna: "Some readers may recall that I’ve previously labeled December op-ex week “The Most Wonderful Time of the Year”.
Op-ex week in general is normally pretty good. And while December has
been the most reliable month, both March and April have produced more
profits going back to 1984."

US gas heating demand last week was 16.5% below normal vs. forecast of 28.5% below normal.

The retirement nest egg of an entire
generation is stashed away in this small town along the Ohio River:
$2.5 trillion in IOUs from the federal government, payable to the
Social Security Administration.
It's time to start cashing them in.
For more than two decades, Social Security collected more money
in payroll taxes than it paid out in benefits - billions more each
Not anymore. This year, for the first time since the 1980s, when
Congress last overhauled Social Security, the retirement program is
projected to pay out more in benefits than it collects in taxes -
nearly $29 billion more.
Sounds like a good time to start tapping the nest egg. Too bad
the federal government already spent that money over the years on
other programs, preferring to borrow from Social Security rather
than foreign creditors. In return, the Treasury Department issued a
stack of IOUs - in the form of Treasury bonds - which are kept in a
nondescript office building just down the street from Parkersburg's
municipal offices.
Now the government will have to borrow even more money, much of
it abroad, to start paying back the IOUs, and the timing couldn't
be worse. The government is projected to post a record $1.5
trillion budget deficit this year, followed by trillion-dollar
deficits for years to come.

But to
illustrate the government's commitment to repaying Social Security,
the Treasury Department has been issuing special bonds that earn
interest for the retirement program. The bonds are unique because
they are actually printed on paper, while other government bonds
exist only in electronic form.
They are stored in a three-ring binder, locked in the bottom
drawer of a white metal filing cabinet in the Parkersburg offices
of Bureau of Public Debt.
The agency, which is part of the Treasury Department, opened
offices in Parkersburg in the 1950s as part of a plan to locate
important government functions away from Washington, D.C., in case
of an attack during the Cold War.

Michael Lynch: "Natural gas consumption has been on the rise for decades. According to
the BP Statistical Review of World Energy which is published each June,
for 2008, natural gas accounted for 24.1% of total world energy
consumption. For the year 1978, total consumption of natural gas was
1,212 million tonnes of oil equivalent. By 2008, that figure had
increased to 2,726 million tonnes. Consumption has more than doubled in
the last 30 years. A major contributor to consumption growth has been
the liquefied natural gas (LNG) sector which has grown from 150 million
cubic meters in 1994 to 380 million in 2008. Just in the last decade,
shale gas has also become a powerful sector of the market, particularly
in the U.S. Besides the substantial price advantage, natural gas now
has two other important factors that drive consumption. Being a clean
burning fuel is one factor. Realization that natural gas can be a
transportation fuel is the other. Worldwide, over 10 million natural
gas vehicles NGV) are on the road. Asia is the high growth region with
Pakistan, Iran, China, India and Bangladesh leading the way.The U.S.
has been a laggard but this is changing fast as the advantages of
natural gas as vehicle fuel become evident."

The NAHB/Wells Fargo housing market index fell two points to 15 in March, reversing a slight pop in February.
Buyer traffic dropped from 12 to 10, the lowest since March 2009. Current sales fell from 17 to 15. Expected sales fell from 27 to 24, the lowest since April 2009.

The Dow Jones Industrial Average, once off 54 points, finished with a 17-point gain to 10,642. The Standard & Poor's 500 Index, ended up a half-point to 1,151, its best close of the year. But the Nasdaq Composite Index was off about 5 points to 2,362.

Sunday, March 14, 2010


3/13/10 Borrowing

Neither recession nor gadget overload shall slow the mania surrounding the introduction of Apple's iPad mobile computer.
On Friday, the first day that buyers could pre-order the device (it
arrives in stores next month), Apple racked up an estimated 91,000
sales in just the first six hours of availability, putting temporarily
to rest the Internet's persistent "iPad fail" meme. Analysts predict
the first-year sales could reach 5 million.

Doug Noland: "I have asserted that the monetary and fiscal policy response to the
2008 bursting of the Wall Street/Mortgage Finance Bubble fostered the
emergence of the Global Government Finance Bubble. Over the past 6
quarters, Treasury debt has jumped $2.531 TN, or 48%, to $7.782 TN.
During the same period, federally-backed GSE-MBS expanded $624bn, or
13%, to $5.383 TN. Combined “federal” finance ballooned an incredible
$3.155 TN in just 18 months. At the same time, the Federal Reserve’s
balance sheet jumped $1.315 TN, or 138%, to $2.267 TN....The market today perceives that essentially no amount of stimulus or
monetization is out of bounds. The Fed is there as a backstop bid for
debt securities, while the Treasury and Federal Reserve have teamed to
establish a floor under GDP/national income. Market malformations now
lie at the heart of the unfolding Bubble and go a long way toward
explaining the market’s complacency when it comes to the simultaneous
contraction in private-sector Credit and explosion of federal debt and
obligations....As we look forward to 2010 data, I would expect a meaningful uptick in
the rate of system Credit expansion. It is my view that, in a more
normal rate/liquidity environment, it will take in the neighborhood of
$2.0 TN of system Credit growth to sustain our current economic
structure. I expect that – until the debt markets say otherwise – the
majority of this will be “federal” Credit. "

Tim W. Wood: "As equities moved into their January highs, a very short-term Dow
theory non-confirmation developed. The Transports made their January
closing high on January 11th at 4,262.86 while the Industrials pressed
higher marking their January closing high 5 trading days later at
10,725.43. On March 9th the Transports closed above their January high
and this time around the Industrials have lagged. As a result, we now
have another Dow theory non-confirmation that spans a couple of months
in duration. It seems that this latter non-confirmation is getting some
attention.... So, my point here is to warn those that are jumping to
conclusions just because one average beat the other one back above its
previous closing high. Now, if the averages begin to breakdown from
this point and it becomes much more apparent that this non-confirmation
is going to stand, then at that time it will serve to give more merit
to any such downturn. Until such time, this non-confirmation should be
kept in perspective. This is only a warning of caution and is not an
automatic death sentence to the market. It is what develops from here
that will serve to validate or invalidate this non-confirmation.Now,
that all being said, the orthodox Dow theory primary bullish trend
change that occurred in conjunction with the advance out of the March
2009 low still remains intact. However, it is very important to
understand that this bullish primary trend change continues to operate
within the context of a much longer-term secular bear market in
accordance with Dow theory phasing."

Last month the U.S. borrowed two dollars out of every three dollars spent! Revenue was $107 billion, expenditures $328 billion.