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Originally posted by Hx3_1963
Was hearing earlier our current market losses of 50+% are actually steeper than a comparable time frame from the 30's...sooo...
Just his opinion but...
Is This a Depression? For Markets, It May Not Matter
Many think the word "depression" is, in fact, incidental to the real state of affairs. Things are bad, really bad, and everybody knows it.
"The closest thing we can find to the market collapse that we are experiencing now would really be '73-'74," says Peter J. Tanous, president and director of Lynx Investment Advisory in Washington, D.C. "The market went down over the two-year period 45 percent. I was already in the business 10 years in '73, and I can tell you this is far, far worse."
Picking a Market Bottom: Why the Pros Are All Wrong
Picking a stock market bottom during the past year of mayhem has been like playing a game where nobody ever wins.
Some of the smartest minds on both Wall Street and Washington have tried numerous times to identify an ultimate low for stocks and have failed—in some cases miserably.
The bookend collapses of both Bear Stearns and Lehman Brothers served in the minds of some as critical points of capitulation. For others, the "bottom" was election-related. Still others tied their bottom calls to various legislative developments.
So far such pronouncements have had one thing in common: They have all been wrong.
But how could so many people have misread the market so dramatically?
"Smart people tend to look at history, and history would have mitigated against such a decline," says Uri Landesman, head of global growth strategies at ING Investment Management in New York. "People felt various support levels would hold. With every support level collapsing, the confidence that the next level will hold wanes."
With the Dow hovering in the 6,500 range some experts are again looking for a bottom.
Lower Wages May Be Next Shoe To Drop For Workers
With "no end in sight" for U.S. job losses amid a recession that could stretch into 2010, American workers will soon have to contend with another blow to their confidence: stagnant, or even falling wages.
Job seekers—already coping with the highest unemployment rate in a quarter century, their savings mugged by a plunging stock market—can also expect lower pay once they land a new job, labor market experts say, because the current downturn shows no signs of turning around anytime soon.
"There's no end in sight," said Tig Gilliam, chief executive of Adecco Group North America, the third-largest U.S. employer behind Wal-Mart [WMT 48.91 -0.84 (-1.69%) ] and the postal service.
"March is going to be the same, and I don't see anything that will make April better." Lower wages, in turn, could further erode the outlook for the U.S. economy by hurting consumers' spending power.
...this is tied into the BofA disclosure suit...
Merrill Lynch Says It Discovered `Irregularity' in Review of Trading Unit
Undisclosed Losses at Merrill Lead to Trading Probe
One Merrill Lynch trader apparently gambled away more than $120 million in the currency markets. Others seemingly lost hundreds of millions on tricky credit derivatives.
But somehow all this red ink did not spill into plain view until after Merrill earmarked billions for bonuses and staggered into the arms of Bank of America [BAC 3.14 -0.03 (-0.95%) ].
Inside Bank of America headquarters here, executives are asking why. The bank is investigating how Merrill accounted for wayward trades in the final, frantic months of 2008 — and why at least one big loss was slow to appear on Merrill’s books.
Of particular concern are the activities of a Merrill currency trader in London, Alexis Stenfors, whose trading has come under scrutiny by British regulators, according to people briefed on the investigation. The loss Mr. Stenfors is believed to have incurred so alarmed Bank of America that this week the bank examined the books of other traders who were on vacation.
Bank of America’s embattled chief executive, Kenneth D. Lewis, is trying to bridle Merrill’s traders, whose rush into risky investments nearly brought down the brokerage firm. But questions over the Merrill losses — in particular, who knew about them, and when — keep swirling. Merrill hemorrhaged $13.8 billion during the final three months of 2008 alone.
Falling 6x faster so far this year...?
Dow's Blue Chips Are Akin to Penny Stocks
The banking giant Citigroup [C 1.03 0.01 (+0.98%) ] commanded a stock price of $55 just two years ago. But at one point Thursday, as markets hurtled to their lowest close in 12 years, the shares were worth less than an item at the Dollar Store.
After months of breathtaking declines, this is what Wall Street has come to: Blue-chip companies, once considered safe investments and cornerstones of the economy, are akin to penny stocks.
The bear market is tightening its grip, despite efforts by the government to support the economy and some of its biggest companies. Fears about the depth and breadth of the recession drove the Dow Jones industrial average down another 4 percent on Thursday, bringing its losses so far this year to 25 percent — just shy of the 33 percent decline recorded for all of 2008.
Rules for the New Reality
Back in September, before we were all inured to the tottering nature of so many financial giants, investors were looking for someone to blame.
So when Prince & Associates, a market research firm in Redding, Conn., polled people with more than $1 million in investable assets, it wasn’t any great surprise that 81 percent intended to take money out of the hands of their financial advisers. Nearly half planned to tell peers to avoid them, while 86 percent were going to recommend steering clear of their firms.
In January, Prince took another poll of people with similar assets, and only a percentage in the teens had engaged in trash-talking. Just under half of the investors had taken money away from their advisers.
All of the bad feelings, however, raised a simple question that’s even more essential when we’ve all been so severely tested. What, exactly, does your wealth manager owe you? And what can you never reasonably expect?
Originally posted by Hastobemoretolife
Remember life is good, life is short.
Japan’s Bonds Complete Worst Week in a Month on Supply Concern
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By Yasuhiko Seki
March 7 (Bloomberg) -- Japan’s 10-year bonds posted the biggest weekly decline in a month on concern the U.S., Japan and Europe will increase spending to help counter the deepening global recession.
Benchmark yields approached a four-week high as Chief Cabinet Secretary Takeo Kawamura said the government needs to make the “utmost effort” to prevent stocks from collapsing, spurring concern the nation’s debt burden will increase. Sales of government bonds will rise to 113.3 trillion yen ($1.17 trillion) in the year starting April 1 from 106.3 trillion yen this financial year, the Ministry of Finance said in December.
“Given the severe state of the Japanese economy, the government may need to boost budget spending by an additional 15 to 20 trillion yen,” said Hirokata Kusaba, a senior economist in Tokyo at Mizuho Research Institute Ltd., a unit of Japan’s second-largest bank. “The issuance of new bonds may increase by 30 trillion yen, boding ill for the debt market.”
The yield of the benchmark 10-year bond rose two basis points to 1.29 this week at Japan Bond Trading Co., the nation’s largest interdealer debt broker, the biggest increase since the five days ended Feb. 6.
Ten-year bond futures fell 0.86 to 138.64 in Tokyo and touched 138.49, the lowest since Feb. 10.
N. Carolina delaying tax refunds
Raleigh, N.C. — Dwindling revenue and a widening budget shortfall mean that North Carolina taxpayers will wait longer for their tax refunds, Secretary of Revenue Kenneth Lay said Thursday.
The state is not issuing refund checks to taxpayers as quickly as planned because the recession has state revenue flowing in slower than usual, Lay said.
Obama Repeats Bush's Worst Market Mistakes
Bad accounting rules are the cause of the banking crisis.
By STEVE FORBES
What is most astounding about President Barack Obama's radical economic recovery program isn't its breadth, but its continuation of the most destructive policies of the Bush administration. These Bush policies were in themselves repudiations of Franklin Delano Roosevelt, Mr. Obama's hero.
The most disastrous Bush policy that Mr. Obama is perpetuating is mark-to-market or "fair value" accounting for banks, insurance companies and other financial institutions. The idea seems harmless: Financial institutions should adjust their balance sheets and their capital accounts when the market value of the financial assets they hold goes up or down.
That works when you have very liquid securities, such as Treasurys, or the common stock of IBM or GE. But when the credit crisis hit in 2007, there was no market for subprime securities and other suspect assets. Yet regulators and auditors kept pressing banks and other financial firms to knock down the book value of this paper, even in cases where these obligations were being fully serviced in the payment of principal and interest. Thus, under mark-to-market, even non-suspect assets are being artificially knocked down in value for regulatory capital (the amount of capital required by regulators for industries like banks and life insurance).
Banks and life insurance companies that have positive cash flows now find themselves in a death spiral. Of the more than $700 billion that financial institutions have written off, almost all of it has been book write-downs, not actual cash losses. When banks or insurers write down the value of their assets they have to get new capital. And the need for new capital is a signal to ratings agencies that these outfits might deserve a credit-rating reduction.
So although banks have twice the amount of cash on hand that they did a year ago, they lend only under duress, or apply onerous conditions that would warm Tony Soprano's heart. This is because they know that every time they make a loan or an investment there is a risk of a book write-down, even if the loan is unimpaired.
If this rigid mark-to-market accounting had been in effect during the banking trouble in the early 1990s, almost every major commercial bank in the U.S. would have collapsed because of shaky Latin American and commercial real estate loans. We would have had a second Great Depression.
Deception at Core of Obama Plans
By Charles Krauthammer
WASHINGTON -- Forget the pork. Forget the waste. Forget the 8,570 earmarks in a bill supported by a president who poses as the scourge of earmarks. Forget the "$2 trillion dollars in savings" that "we have already identified," $1.6 trillion of which President Obama's budget director later admits is the "savings" of not continuing the surge in Iraq until 2019 -- 11 years after George Bush ended it, and eight years after even Bush would have had us out of Iraq completely.
Forget all of this. This is run-of-the-mill budget trickery. True, Obama's tricks come festooned with strings of zeros tacked onto the end. But that's a matter of scale, not principle.
All presidents do that. But few undertake the kind of brazen deception at the heart of Obama's radically transformative economic plan, a rhetorical sleight of hand so smoothly offered that few noticed.
"Employees of Halliburton Energy Services, one of the largest drilling contractors in Colorado’s Piceance Basin, were laid off Thursday, the company confirmed.
There was no word on how many Halliburton employees were let go.
“It simply is not business as usual in the current economic environment and we continue to work hard to minimize personnel reductions; however, we can confirm, unfortunately, that there were some Halliburton personnel reductions in Grand Junction [Thursday],” said a statement from Larry Kent, Halliburton’s Grand Junction district manager, issued by the company.
“Halliburton remains committed to deliver exceptional solutions and services to our customers in the Grand Junction area as we have since 1996,” Kent continued.
Halliburton had about 1,400 employees in Colorado, according to a statement issued by the company.
The layoff were first reported Thursday by Grand Junction-area news media.
CHAVEZ CALLS ON OBAMA TO FOLLOW PATH OF SOCIALISM
Caracas - Venezuelan President Hugo Chavez on Friday called upon US President Barack Obama to follow the path to socialism, which he termed as the "only" way out of the global recession. "Come with us, align yourself, come with us on the road to socialism. This is the only path. Imagine a socialist revolution in the United States," Chavez told a group of workers in the southern Venezuelan state of Bolivar.
The controversial Venezuelan leader, who taunted the United States as a source of capitalistic evil under former president George W Bush, added that the United States needs a leader who can take it to a "higher" destiny and bring it out of "the sad role that it has been given, as a murderous, attacking power that is hated all around the world."
Anecdotal report re: HAL Layoff:
- HAL has three Mesa County Sheriff's cruisers on site preemptively
- HAL gathers the targeted employees
- HAL has a group of their own security staff escort said employees out the gate
- HAL management comes out and tells aforementioned security staff to leave 'cause they're laid off too!
...they're starting to catch up to us...
Lloyds Said to Cede Control to U.K. to Tap Government Insurance
March 7 (Bloomberg) -- Lloyds Banking Group Plc, Britain’s biggest mortgage lender, will cede control to Prime Minister Gordon Brown’s government in exchange for tapping a guarantee program backing 260 billion pounds ($367 billion) of assets, two people familiar with the plan said.
Lloyds will convert preference shares into ordinary stock, paying about 16 billion pounds to participate in the program, according to the people, who declined to be identified before a formal announcement later this morning.
The bank, which will be up to 75 percent owned by the government, is the fourth to tip into the Treasury’s hands since the run on Northern Rock Plc in September 2007 prompted Brown to take unprecedented powers to seize failing institutions.
Never waste a good crisis, Clinton says on climate
BRUSSELS (Reuters) - Secretary of State Hillary Clinton told an audience Friday "never waste a good crisis," and highlighted the opportunity of rebuilding economies in a greener, less energy-intensive way.
Highlighting Europe's unease the day after Russia warned that gas flows via Ukraine might be halted, she also condemned the use of energy as a political lever.
Clinton told young Europeans at the European Parliament that global economic turmoil provided a fresh opening. "Never waste a good crisis ... Don't waste it when it can have a very positive impact on climate change and energy security," she said.
If this stock market collapse has proven anything it is that the gains of the stock market do not represent tangible assets. During the escalating boom period of stocks – which encompassed President Clinton’s second term and the entire administration of George W. Bush – there was a significant push among many in the government to “privatize Social Security.” This move would have made the largest entitlement program in America subject to the fluctuation of the stock markets, essentially making all of us our own investor. That would have sounded like a great plan two years ago, when the markets were rising, but had the privatization gone through, our retirees would be left with less than they had when the privatization started. They would have less money now than they did a decade ago, and if one factors in annual inflation rates over 10 years the situation would be even worse.
...not like we didn't see this coming either...
Stimulus Sparks Fights in States
MARCH 7, 2009
State legislatures are bickering as billions of federal stimulus dollars arrive -- and not always about economic recovery.
In Texas, toll roads are the flash point. In Mississippi, it's the Ten Commandments. In Nevada, it's wages for journeymen carpenters. And in Missouri, anger has flared over a crumbling bridge in tiny Tuscumbia, population 223.
Controversies are erupting as lawmakers and state agencies begin to draw up plans for the roughly $200 billion in stimulus money going to the states for programs including transportation, education, and health care. Wish lists are long -- and tempers short.
Now this should get some major bitchin' from TPTB...Darth Cheneys not gonna like this...
President Puts Defense Contractors on Notice: Crackdown on Costs Is Coming
WASHINGTON -- President Barack Obama fired a surprise broadside at the defense industry, saying he intends to clamp down on practices that have resulted in billions of dollars in cost overruns and delays in recent years.
At a time when Washington faces the prospect of bailing out multiple sectors of the economy, contractors' cost overruns are showing up on the radar of many in the capital. And the Pentagon, which spends about $330 billion a year to buy everything from fighters to paper clips, is a particular focus of the new administration.