Lets check on GM

http://uk.reuters.com/article/motoringAutoNews/idUKTRE51D0LD20090214

GM may need threat of failure to survive

Looks like Tuesday will be a busy day. We can announce the stimulus and how we saved GM. We are going to zero at an accelerating rate. Some day soon the government will not be able to save everyone.

Dodd and the pay caps.

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/13/AR2009021303288.html?hpid=topnews

In one of the most clear signs yet that Obama is not in charge of the stimulus Dodd was able to slip this in. None of our congressman knew about it cause no one was giving time to read the bill. Our Government at work.

There is much to fear beyond fear itself.

http://www.voxeu.org/index.php?q=node/3065

Another Sign That Volcker is Marginalized

http://www.nakedcapitalism.com/2009/02/another-sign-that-volcker-is.html

In the mean time the FDIC is overwhelemed already

http://money.cnn.com/2009/02/13/news/economy/bank_failure/index.htm
And there is no sign of a slow down.

4 More Banks Failed

http://money.cnn.com/2009/02/13/news/economy/bank_failure/index.htm
Total goes to 13.

How is Eastern Europe doing?

http://www.marketwatch.com/news/story/Economic-data-highlight-depth-crisis/story.aspx?guid=%7B0F143F05%2D8DC8%2D4AF9%2DA017%2D7A5ACEEA4914%7D&dist=hplatest

Estonia, one of the three Baltic nations, reported the most dismal figures. Its gross domestic product plunged by 9.4% in the fourth quarter of 2008 compared with a year earlier, according to preliminary data released Friday by Statistics Estonia.
Elsewhere in the region, Hungary's GDP fell by 2% year-on-year in the fourth quarter, while Slovakia's GDP grew by 2.7% and the Czech Republic's economy grew by 1.0%, official estimates showed.

All are clearly recessionary, The Baltic is in a depression. This is very bad for the EU Banks as the have massive loan exposure to the East.

Blowback from the Mexico drug War. Phoenix, kidnap-for-ransom capital

http://www.latimes.com/news/nationworld/world/latinamerica/la-na-drug-kidnappings12-2009feb12,0,544773.story

15% chance of SP500 below 500.

http://nickgogerty.typepad.com/designing_better_futures/2009/01/phat-pe-analysis-say-dow-has-could-see-4400.html
Scary stuff Part II

So lets pay people to quit there jobs.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aT2itP1ao8kQ&refer=home

The stimulus legislation would revamp the 74-year-old U.S. unemployment compensation program by encouraging states to give benefits to those who quit their jobs to care for ailing relatives.

The provision, sponsored by Representative Jim McDermott, is in the $789 billion compromise reached by House and Senate negotiators. Critics say the change would undermine the original intent of the Depression-era program as a cushion only for people whose jobs disappear.

This was in place and was removed by Clinton during the welfare reform act cause of abuses.

TPM has a very interesting memo from DB

http://tpmmuckraker.talkingpointsmemo.com/2009/02/deutsche_bank_analyst_pay_a_good_price_for_our_ass.php

Gun to head, pay us or we take you with us.

When the looting of our retrirements accounts begin

http://jessescrossroadscafe.blogspot.com/2009/02/next-phase-in-march-of-greed-looting.html
The end is near.

SP 440?

So Big Picture has this story about the SP500 being worth about 440. It looks like they are not the only ones to think so. Take a look at this picture above and be very afraid.
http://www.ritholtz.com/blog/2009/02/fair-value-for-sp-440/

Geithner’s plan leaves out key number: Size of the problem

http://blownmortgage.com/2009/02/12/geithners-plan-leaves-out-key-number-size-of-the-problem/#more-2370

Zero. That is the total worth of the banking system.

Europe economies collapsed in Q4. Japan to report on Monday

http://www.businessinsider.com/catastrophic-decline-in-japan-gdp-2009-2

TWC play Super Dividend Payout by March 31

http://www.businessweek.com/bwdaily/dnflash/content/feb2009/db2009024_582577.htm?campaign_id=rss_daily
Easy Money $10 per share!

Time Warner (TWX -2.1%) and Time Warner Cable (TWC +0.3%) get the favorable IRS ruling they were looking for (see), and say they're forging ahead with separation - which should be complete by end of quarter.

NEW YORK--(BUSINESS WIRE)--Time Warner Inc. (NYSE:TWX - News) and Time Warner Cable Inc. (NYSE:TWC - News) today issued the following statement regarding the regulatory and other reviews related to the separation of the two companies:


“With today's favorable IRS ruling, we're pleased to report that all regulatory and other necessary governmental reviews of the pending separation of Time Warner and Time Warner Cable are concluded. Now we’re working through the process to achieve the separation. That process is on track and expected to be completed by the end of the current quarter.”

Report from Director of National Secuirty

http://www.dni.gov/testimonies/20090212_testimony.pdf

Short Version
http://www.dni.gov/press_releases/20090212_release.pdf

Scary Stuff, the global economic crisis is now the biggest U.S. security concern.

Get a free week of Elliott Wave

http://www.elliottwave.com/freeweek/fjs/default.aspx?code=23544

Stimulus Bill Abolishes Welfare Reform and Adds New Welfare Spending

http://www.heritage.org/Research/Welfare/wm2287.cfm

What is even more funny is these changes date from the Clinton days. More signs the congress is tone deaf.

Is a question of experence?

http://tpmcafe.talkingpointsmemo.com/2009/02/12/rahm_emanuels_and_david_axelrods_new_dilemma/

If so we are in deep trouble and I agree wtih the main points.

going Long on DBA

Buying calls around $50. Why? Drought.

Geithner Crazy Like A Fox

http://www.businessinsider.com/geithner-crazy-like-a-fox-2009-2
Just a gut call here, but I buy it. When very tough things happen Obama has alwys played the game like a pro. This would fit that profile.

Steve Ballmer a K-wave fan?

http://globaleconomicanalysis.blogspot.com/2009/02/wealth-does-not-pass-three-generations.html
My grandfather was a huge beilver in the K-Wave theroy and predicted the 1983 Bull market. I am sure if he was alive today he would not surprised by anything we are seing now.

Roubini on Zombie Banks

http://paul.kedrosky.com/archives/2009/02/11/qotd_roubini_on.html

nationalization must be done or will face very bad problems soon.

http://paul.kedrosky.com/archives/2009/02/10/obama_on_bank_n.html
Obama confirms he is sacred of this option. Why I don't know, he has the political capital to pull this off. Now is better then later.

Taking hope and change to the bank

http://busmovie.typepad.com/ideoblog/2009/02/taking-hope-and-change-to-the-bank.html
So we are all screwed. Great. Best post yet about yesterday.

Lets see what up with Russia

http://zerohedge.blogspot.com/2009/02/russian-bond-market-facing-80-yields.html

A Proposal to Bolster Banks With Pension Funds

http://dealbook.blogs.nytimes.com/2009/02/10/a-proposal-to-shore-up-banks-with-pension-funds/?scp=1&sq=pension%20plan%20investment%20banks&st=cse

So let me get this striaght, we will take money from a underfunded fund and use it to buy worthless assets. Right. I am sure this will work out well.

Global Cooling? Global Warming?

http://dyn.politico.com/printstory.cfm?uuid=D0C4924D-18FE-70B2-A808D77A9C1FFFD3
No knows, but we are heading down path of warming. I find in these cases to ask who gets paid?

Ask the right questions

http://www.thestreet.com/_googlen/university/personalfinance/10356450.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

“It” is Happening Already

http://blownmortgage.com/2009/02/09/it-is-happening-already/

A key point of black swans is that they are preceded by ripples. It is looking likely we will see a major black swan very soon.

Stimulus Effect

http://gregmankiw.blogspot.com/2009/02/ray-fair-on-stimulus.html

So we get most of the benift in 2010 and raise taxs the following year.
Great.

European bank bail-out could push EU into crisis

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4590512/European-banks-may-need-16.3-trillion-bail-out-EC-dcoument-warns.html

Just ugly, the euro or the EU failing would be a nuclear event. Causing widespread carnage. Yes it is possible we could get a multiple effect in short order. The collapse of Euro, Bank nationalization in the us and other problems would drive the DJ to 4300 or so.

Mexico's Drug War

http://www.csmonitor.com/2009/0211/p99s01-duts.html

So many problems, so little time. Obama is being overwhelmed by problems. I would put this high on the list.

China Needs U.S. Guarantees for Treasuries, Yu Says

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aG_eSDsmh7rw

China Export numbers continue to fall

http://blogs.cfr.org/setser/2009/02/11/it-is-hard-to-put-lipstick-on-a-pig-or-even-an-ox/

The charts say it all, a huge acceleration downward.

What did the New deal do for Unemployment

http://blog.heritage.org/2009/01/08/new-deal-never-solved-unemployment-crisis/
Nothing good.

http://blog.heritage.org/2009/01/14/were-spending-more-than-ever-and-it-doesnt-work/

No hope No Change

The sums up the tradegy playing out with Obama and Turbotax Tim.
I know this sounds crazy but there is hope. It is not too late to due the right things.
You must fix the banks and that will be painful. The common shareholder is gone. The bond holders will take massive losses. The big 9 need to be nationalized and cleansed. Once you do that everything else can be tackled. Letting this fester will only bring us closer to the edge. Stop the madness now.

Dr Doom and the Black Swan

http://www.cnbc.com/id/15840232?video=1027496846

trust but Verify. F.D.A. Finds ‘Natural’ Diet Pills Laced With Drugs

http://www.nytimes.com/2009/02/10/business/10pills.html?hp

Maybe we should give the FDA some more funds. Just saying.

Russia and the $400 Billion problem in loans

http://fistfulofeuros.net/afoe/economics-and-demography/russian-debt-and-the-euro/#more-4618

FT's Wolf: U.S. Too "Politically Frightened" to Admit Truth About Banks, Part I

http://finance.yahoo.com/tech-ticker/article/172003/FT's-Wolf-U.S.-Too-%22Politically-Frightened%22-to-Admit-Truth-About-Banks-Part-I?tickers=XLF,C,RBS,LYG,BCS,FAZ,SKF

So Obama is not bold and does not have the will. We are all so screwed.

Bailout plan 2.5

http://www.nytimes.com/2009/02/10/business/economy/10bailout.html?pagewanted=1&_r=1

Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions

Cause who needs tough conditions for tax payer money.

He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid.

Cause the people in charge have done so well so far.

The Fed will use its balance sheet to provide the financing, and the Federal Deposit Insurance Corporation might provide guarantees to investors who participate in the program

So we are going to leverage (Borrow more then we have) the Fed and let the FDIC write insurance.

A separate $50 billion initiative to enable millions of homeowners facing imminent foreclosure to renegotiate the terms of their mortgages is to be announced next week.

Let's try more of the same that has not worked.

The White House is hoping that its rescue plan will be perceived as a more coherent rescue effort than the Bush administration’s,

Cause more of the same is coherent right?

Abandoning any pretense about limiting the moral hazards at companies that made foolhardy investments, the plan also will not require shareholders of companies receiving significant assistance to lose most or all of their investment. Some officials had suggested that the next bailout phase not protect existing shareholders.

Cause we trust these guys right?

Finally, while the administration will urge banks to increase their lending, and possibly provide some incentives, it will not dictate to the banks how they should spend the billions of dollars in new government money.

Cause the listen to us right?

And for all of its boldness, the plan largely repeats the Bush administration’s approach of deferring to many of the same companies and executives who had peddled risky loans and investments at the heart of the crisis and failed to foresee many of the problems plaguing the markets.

So we are going to continue what Bush did?!!?!? WTF?

There is no market value for most of those troubled assets because they are not trading. Investors want to buy them at the lowest price possible, but banks want to avoid selling them at rock-bottom prices and realizing huge losses.

And this plan does what for that? Oh right nothing.

So in the end we are getting more of the same. I am speechless. Obama basiclly picked a bush economy guy and is letting him run the show. I am sure this will work out fine.....


http://www.nakedcapitalism.com/2009/02/geithner-bank-bailout-plan-fiasco.html

A second opinion from naked capitalism

Five Deflationary Forces to Watch Now

http://www.minyanville.com/articles/index/a/21045

I urge everyone to call

http://www.nytimes.com/2009/02/10/washington/10stimulus.html?_r=1&ref=business

The three Republicans, Senators Susan Collins and Olympia J. Snowe of Maine and Arlen Specter of Pennsylvania, joined 56 Democrats and two independents in favor.

These three senators are the key. Call them now and tell them we don't want this bill.

How Government Created the Financial Crisis

http://online.wsj.com/article/SB123414310280561945.html

It did not have to be this way. To prevent misguided actions in the future, it is urgent that we return to sound principles of monetary policy, basing government interventions on clearly stated diagnoses and predictable frameworks for government actions.

Massive responses with little explanation will probably make things worse. That is the lesson from this crisis so far.

Update to the scary chart of the day

http://www.calculatedriskblog.com/2009/02/job-losses-during-recessons.html

an awesome clip from the McLaughlin Group

Thursday Sept 18 Must read of the day

http://zerohedge.blogspot.com/2009/02/how-world-almost-came-to-end-at-2pm-on.html
The day the US Banking system almost collapsed.

If they had not done that, their estimation is that by 2pm that afternoon, $5.5 trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it.

Wow, Just wow.

9.7 Trillion

http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aGq2B3XeGKok

“We’ve seen money go out the back door of this government unlike any time in the history of our country,” Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor Feb. 3. “Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?”

Does this sounds bad to anyone?

The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve.

And they (Congress) wonder why we hate the bailouts.

The difference between

http://www.economicroadmap.com/2009/02/running-dry.html
A depression and a recession is Famine. Things are taking a turn for the worse in China.

Why we may another 40% to go.

http://www.moneyandmarkets.com/stocks-to-fall-at-least-another-40-here%e2%80%99s-why-29613

The major US money center banks will be nationalized.

http://jessescrossroadscafe.blogspot.com/2009/02/when-will-big-us-moneycenter-banks-be.html

I agree why have we not done this?

IMF to be out cash in six months

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4560897/IMF-may-run-out-of-cash-to-fight-crisis-in-six-months-Strauss-Khan-warns.html

Welcome to 1932

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4560901/Bond-market-calls-Feds-bluff-as-world-falls-apart.html

The end is nearing. When we can not borrow we are done.

New Group same as the old group.

http://www.nakedcapitalism.com/2009/02/now-its-semi-official-mlec-to-rise-from.html

So the big plan for tomorrow is the one that got rejected by Hank cause no one wanted to play.

It quietly faded from the headlines.. Why? It was supposed to be a private sector solution, but guess what? Investors had no desire to buy assets at phony prices, and banks didn't want to unload them at market. Various efforts to finesse the basic problem predictably got nowhere.

You can not make the banks sell at market cause they would be Bankrupt and you can not over pay cause you are in huge money losing position. Does the Obama team have no new idea's? Why the hell is it changing every second? Who the heck is running this show? Change? WTF!

US to force automakers into Bankruptcy?

http://www.nakedcapitalism.com/2009/02/us-desire-for-priority-repayment-lead.html
And screw the TARP main recipients at the same time. This what you get if you hurry and don't have a plan. Every get the feeling all the bad things are trying to occur at once? Looking like Hank 'the bazooka' Paulson help with come back to bite everyone in the ass.

Trust in Crammer? Not so much

http://online.barrons.com/public/article/SB123397107399659271.html

Scary Chart of the day!

unemployment vs the last two recession. WOW!

The coming Money Market Problems

http://www.news-record.com/content/2007/11/13/article/bank_of_america_to_write_down_3_billion

The Charlotte-based bank said it will also spend about $600 million to support a group of its money market funds because of "uncertainty around the value" of the funds investments in structured investment vehicles, which use borrowed money to invest in risky but high-yielding investments.

We have a huge problem coming in March, with rates at zero we are facing a major money market problem. This is just the tip of a huge iceberg.