I now look for next week to harsh!

Levels to Watch in Trading:


Dow Jones Industrial Average (DJIA – 7,062.93) - support at 6,500; resistance at 8,000


S&P 500 Index (SPX – 735.09) - support at 600; resistance at 900


Nasdaq Composite (COMP – 1,377.84) - support at 1,300; resistance at 1,750

California unemployment rate reaches 10.1%

http://www.latimes.com/business/la-fi-california-jobs28-2009feb28,0,3811550.story

Wow it is the day we went to the 1980's!
First GDP and now Califorina!
What other fun things could we soon be at?

December 29, 1989 DJI 2753.20, Not yet!

inflation reached a startling 13.5%, not yet!

interest rates 11%, not yet!

unemployment rate in the U.S. reached 10.8%, not yet!

Bank failures reached a post-depression high of 42, not yet!

Federal Deposit Insurance Corporation (FDIC) listed another 540 banks as "problem banks". not yet!

Continental Illinois National Bank and Trust Company, the nation's seventh-largest bank (with $45 billion in assets), failed. Whoops, Passed that one!

So in Summary a ways to go! Party like it is 1996, the last time we have a seen a close this low!

'We're Not Paying For Your Crisis!'

http://www.spiegel.de/international/europe/0,1518,610099,00.html

How long before the class warfare of europe is popular here and we start talking about siezing people weath?

FDIC to double fee's

http://online.wsj.com/article/SB123576149160196327.html?mod=googlenews_wsj

Emergency fees will also be levied at .20 to $100 of deposits.

Financial crisis sparks unrest in Europe

http://uk.reuters.com/article/businessNews/idUKTRE51P5R520090226

You can only bailout the banks for so long before eveyone expects to be saved as well. When hope fades you will get more of this.

Nouriel Roubini on Eastern Europe

http://www.forbes.com/2009/02/25/eastern-europe-eu-banks-euro-opinions-columnists_nouriel_roubini.html

Government doubles down on Citi, taxpayers cry.

http://www.ritholtz.com/blog/2009/02/worlds-worst-investment-to-get-worse/

Like watching a train wreck, you want to turn away. Then you realize you are on the train. We have reach a binary point. Either we rally next week or we go down another 20%-30%

Bad news in China being ignored

http://www.minyanville.com/articles/index/a/21353

There are things happen in the world which have never happen. We have as I said before gone off book. Trying to explain thing using the last 20 years of histroy is useless. With the fall in exports we have surpassed anything that happen in the Great Depression.

Eastern Europe tossed a life saver to help, needs much more.

http://ftalphaville.ft.com/blog/2009/02/27/53033/eastern-europe-gets-e245bn/

GDP in the 4QT -6.2

http://www.cnbc.com/id/29426821

Way uglier then thought. Make all the rose talks in the 2010 budget and the bank stress test a joke.

Deals I love them!

http://blog.dairyqueen.com/2009/02/25/dq-sweet-deals/

So since I am poor blogger, yes it does not pay. Yes I would do I lot for free food and espeical a DQ blizzard!

My deal I would bring my whole company to DQ (90 people) and treat everyone with the sweet DQ card

The Iran-Israel nuclear endgame is now much closer

http://www.jpost.com/servlet/Satellite?cid=1235410719930&pagename=JPost%2FJPArticle%2FShowFull

This is counter to my though that Obama would not support such action. However with the election of the hardliners in Israel I fear this place the whole region on a war path.

Insured Banks and Thrifts Lost $26.2 Billion in the Fourth Quarter

http://www.fdic.gov/news/news/press/2009/pr09027.html

For all of 2008, insured institutions earned $16.1 billion, a decline of 83.9 percent from 2007 and the lowest annual total since 1990.

Sounds bad. Guess that why the bank index is down like 80%

The FDIC's "Problem List" grew during the quarter from 171 to 252 institutions, the largest number since the middle of 1995. Total assets of problem institutions increased from $115.6 billion to $159 billion.

that is not a good figure to be increasing

Loan-loss provisions totaled $69.3 billion in the fourth quarter, a 115.7 percent increase from the same quarter in 2007.

Just think we are not done yet.

At the end of 2008, a total of 2.93 percent of all loans and leases were noncurrent, the highest level for the industry since the end of 1992.

And we are just now getting the big unemployment numbers. Since the last 2 million where just lost in the last 5 months.

In addition to having $19 billion available in the fund, $22 billion has been set aside for estimated losses on failures anticipated in 2009. The fund reserve ratio declined from 0.76 percent at September 30 to 0.40 percent at year end.

I am guess the FDIC fee's that banks pay will increase. FDIC is reaching a crises point in terms of failures and money. And we have not yet reach the peak of the problem

A look at the human toll

http://www.bloomberg.com/apps/news?pid=20601109&sid=as3PyDwmDEQY&refer=home

Once again we are accerlating downward. Any talk of bottoms or light at the end of the tunnel are just people's dreams

There will be blood

http://www.theglobeandmail.com/servlet/story/RTGAM.20090223.wferguson0223/BNStory/crashandrecovery/home?pageRequested=all&print=true

IMF seeks to double loan capacity

http://business.theglobeandmail.com/servlet/story/RTGAM.20090226.wIMFreport0226/BNStory/Business/home

No big shock, says 16 countries on the verge of collapase.

Obama’s Budget Proposes Up to $750 Billion More for Bank Aid

http://www.bloomberg.com/apps/news?pid=20601087&sid=awP3Namn_Xa4&refer=home?ref=fp2

President Barack Obama’s first budget request would provide as much as $750 billion in new aid to the financial industry,

Are you kidding us?

record deficit of $1.75 trillion in the year ending Sept. 30, equal to about 12 percent of the nation’s gross domestic product, the highest since World War II

That is just the deficit amount, not the Total budget amount. He is talking about spending up to 20% of the GDP next year.

The budget office calculated a $250 billion net cost to taxpayers this year, because it anticipates it would eventually recoup some, though not all, of the money expended to help financial companies.

Now that is some hope!

The spending plan assumes the government would begin taking in at least $75 billion in 2012 from a cap-and-trade system that requires companies to buy credits if they exceed greenhouse-gas limits.

Carbon Caps, One of the most anti-business and anti-economy things.

While the federal government has taken over Fannie Mae and Freddie Mac, the Obama administration opted to exclude most of the costs of running the mortgage financiers in its budget plan.

Shocking. Cause they are burning about $200 Billion a quarter, and will likely increase with the mortgage bailout. So you can add another $1 Trillion to the defict spending.

Ukraine, Russia face March gas crisis

http://www.google.com/hostednews/afp/article/ALeqM5jycSAdQCzzsQRpf25sF_yeA1Xlig

At least it will be warmer this time :)

Obama Will Mix Taxes, Spending Cuts to Fund Health Reform

http://online.wsj.com/article/SB123559630127675581.html?mod=article-outset-box

A taxpayer who pays a 35% rate on his income may deduct 35% of various expenses -- such as mortgage interest or charitable contributions -- from his taxable income.

So if you accept is that housing is important and must rebound for econmy to imporve, how does lowering the Mortgage deduction do that? Seems to me it becomes less attactive to own real estate for high income people. There by driving down prices.

The Obama plan would have private plans bid to offer coverage in a given geographic area; insurers would then be paid based on an average of the bids.

Sounds a little too free market for the Dems in congress.

The administration will also propose a new measure to make generic drugs available more quickly.

So you are going to lower profits for the drug compaines. hmm. Once again it seems very bad to hurt a econmoic sector durning a downturn.

As GM goes so goes the USA

http://www.minyanville.com/articles/C-gm-GMAC-general-motors-cars/index/a/21332

In the end it looks more likey we are both BK.

Weekly Claims: Continued Claims Over 5 Million

http://www.calculatedriskblog.com/2009/02/weekly-claims-continued-claims-over-5.html

We are quickly approaching the record from 1982 (this stat is not that old).

UBS and the Gun to the head of the swiss.

http://zerohedge.blogspot.com/2009/02/ubs-tax-fugitives-doomed-to-public.html
LOL funny.

Bob janjuah is Chief Credit Strategist at RBS. Today's Must read

http://zerohedge.blogspot.com/2009/02/deep-thoughts-from-bob-janjuah.html

review of the Obama state of the union speech

http://www.powerlineblog.com/archives/2009/02/022923.php

Best one I found.

The weak are dragging down the Strong. Germany CDS Spread at new highs

http://www.telegraph.co.uk/finance/economics/4800828/German-CDS-debt-spreads-hit-record-as-economy-crumbles.html

The rating agency Standard & Poor’s said in a report on Tuesday that the region was “shuddering to a halt”, with a number of countries were “crumbling under the weight of high foreign currency debt.” It is unclear whether they can roll over debts as Western banks retreat to their home market.

So you either go down or hunker down.

So we watch the Market moves and try to figure out is the end near

http://www.minyanville.com/articles/index/a/21304

To non-market participants it must have seemed as if the country was being defeated in a war that it was not told was ongoing. We are at a point of recognition; a juncture recognition where the last battle of this economic war may be about over if the market collapses further because the public may decide that paying taxes is out of the question.

After all, that is what is at the heart and soul of any government’s survival. It is no coincidence that one of President Bush’s last acts was to create a 20,000 militia for domestic disturbances. Forget about a mortgage boycott, if a tax revolt erupts we will have martial law sooner than later. Some of the cycles I study, which I will go into for Monday’s report, indicate that the current period should be the toughest for this country since the Revolutionary War and 1789 when George Washington was sworn in.

The anger being generated under the surface is growing on Main Street and Wall Street awaits more than eloquent or not so eloquent oratory. The market is at juncture recognition 50% down from its high as it tests the Train Tracks Reversal Signal from November.

Tax revolt, unrest and other themse are all things I am sure will happen soon. There is much unrest in the usa. None has bubbled up to civil unrest but there is already talk of 'tea parties' in the summer. In the end you can bailout the bankers and leave main street hanging. Especial when each day brings new outrage at the bankers.

Krugamn: rearrange the deck chairs

http://krugman.blogs.nytimes.com/2009/02/24/mysterious-plans/

I’m trying to be sympathetic to the various plans, or rumors of plans, for bank aid; but I keep not being able to understand either what the plans are, or why they’re supposed to work. And I don’t think it’s me.

I just don’t get it. And my sinking feeling that the administration plan is to rearrange the deck chairs and hope the iceberg melts just keeps getting stronger.

Yet another person calls the war unwinable....

Japan Exports Plummet 45.7%, Deficit Widens to Record

http://www.bloomberg.com/apps/news?pid=20601087&sid=al5sm1ywSxoA&refer=home

Is anyone else tired of worse ever on record? Or is it just me.

The gold in fort knox again...

http://gregor.us/currency/revaluing-gold/
Why does ever theroy revole around this? If this did go through you would see massive price increase in Oil.

How will this mess end? Paths to repudiation of Debt

http://gregor.us/crisis/paths-to-repudiation/

The Mormon Index is a rising sign of troubled economy

http://www.stltoday.com/stltoday/news/stories.nsf/religion/story/08BB87BA6856701B862575460004954D?OpenDocument

AIG's Distress: Are There Enough Fingers for This Dike?

http://www.time.com/time/business/article/0,8599,1881420,00.html

Management at AIG has calculated exactly how much money the Treasury and Fed will have access to after all of the TARP, financial stimulus, and mortgage bailout projects have been funded. The insurance company then plans to ask for whatever is left to fund its deficits so that it can stay in business, effectively making the federal government insolvent.

I am sorry I had to reread this one twice. Then I had to make sure I was reading Time and not some crazy blogger.

Just like Detroit, Bank of America (BAC), and Citigroup (C), AIG is playing a game of chicken with Washington that the government does not feel it can afford to lose. Imagine what it would be like if all of these businesses failed at the same time.

-2000 points in the DJI in one day?

It is actually worth imagining. The government has so many balls in the air between the financial systems and deteriorating parts of the industrial sector that it may not have either the capital or intellectual capacity to go around.

And I thought I was negative!

In the intricate global financial system, there is no such things as one big player going down in a vacuum.

I was thinking the other day about the Vietnam war and when Cronkite call the war unwinable. I think we are approaching the point in this war against the bailouts.
It is unwinable. Where we go from here is going to be exciting if nothing else.

Paradox of thrift debunked -Must read of the day

http://web-xp2a-pws.ntrs.com/content//media/attachment/data/econ_research/0902/document/ec022309.pdf

Love the second chart in this article

http://bespokeinvest.typepad.com/bespoke/2009/02/financials-wipeout.html

Avoid USO

http://ftalphaville.ft.com/blog/2009/02/24/52836/the-united-states-oil-fund-mystery/

Case Shiller worse then expected again.

http://www.calculatedriskblog.com/2009/02/case-shiller-house-prices-decline.html

U.S. Is Pressed to Add Billions to Bailouts

http://www.nytimes.com/2009/02/24/business/24bailout.html?_r=2&ref=business
The slow move towards the N word.

The Formula That Killed Wall Street

http://www.wired.com/techbiz/it/magazine/17-03/wp_quant?currentPage=all

Funny I had a long discussion with a trader in 2006 who told me the quants would kill wall street. Looks like he was right.

The Fall of UK -Today's Must

http://www.spiegel.de/international/europe/0,1518,609391,00.html

The War on Drugs Is a Failure

http://online.wsj.com/article/SB123535114271444981.html

How California Became France

http://online.wsj.com/article/SB123517419077037281.html

Humor of the day Why did the chicken cross the road

http://organizationsandmarkets.com/2009/02/21/why-did-the-chicken-cross-the-road-strategic-management-edition/

Genreal Growth in deeper trouble

http://zerohedge.blogspot.com/2009/02/general-growth-properties-in-default.html

SFCG Goes Bankrupt With 338 Billion Yen Debt, Citi is major loser

http://benbittrolff.blogspot.com/2009/02/sfcg-big-bankruptcy-in-japan-citigroup.html

Eleanor Clift from The McLaughlin Group

So dear readers, let me ask a simple quesiton.
If you bailout the banks first and then bailout the home owners. Are you a bastard if you support the first one and complain about the second. Think about that statement. You saved the bankers and wont save the people. Sounds like a trap to me.

Things darken in the UK

http://ftalphaville.ft.com/blog/2009/02/23/52786/cds-report-banks-under-pressure/

Why the government is going the wrong way with Citi

http://www.informationarbitrage.com/2009/02/citigroup-the-difference-between-dramatic-action-and-drama.html

Baltic Currency-Peg Defense Cuts Reserves Amid Regional Slump

http://www.bloomberg.com/apps/news?pid=20601109&sid=aW7Voe3QaHX8&refer=home

U.S. Eyes Large Stake in Citi

http://online.wsj.com/article/SB123535148618845005.html

Citigroup's low share price already reflects, at least in part, a fear among shareholders that their stakes might be further diluted. A government move to take a big stake could backfire, potentially spurring investors to flee other banks, even healthier ones.

You think?

From CNBC

At this point of time, Citigroup does not know how much money it is getting from the federal government. However, if you compare Citigroup's market capitalization with the number of preferred shares the government currently owns, if these shares were converted right now,
they would worth more than 100 percent of Citi's total market capitalization.

So goes Citi. What this means for BAC is that its turn will come soon.

The US government frozen in the headlights

http://mpettis.com/2009/02/the-us-government-frozen-in-the-headlights/

The best description yet. And you know what happens to the deer and the car?
Yeah neither one walk away clean.

Obama wantss to raise taxes and cut spending.

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/21/AR2009022100911_pf.html

Talk about terrible idea's. Lets raise taxes durning a recession. That should work out well. Let try to fix things in half hearted mannor. More nonsense.

Argentina on the Danube? Today's must read

http://www.economist.com/opinion/displayStory.cfm?story_id=13144925&source=hptextfeature

Bank Run and the survial of C or BAC

http://benbittrolff.blogspot.com/2009/02/citigroup-bank-of-america-prisoners.html

The Obama administration is once again playing a risky game. Either nationalzaiton these two or let them be taken down by a bank run. Going to be a fun week.

120,000 Protest in Ireland

http://www.google.com/hostednews/afp/article/ALeqM5h-2YAiEAC9OSrsNnMxYl0ZbagLrw
looks like Ireland is quickly approaching the edge.

THe Pension Fund crisies

http://zerohedge.blogspot.com/2009/02/look-at-one-of-worlds-largest-fund-of.html

Clearly there is going to be a serious reset.

Lets take a look back at the Olympics

http://www.latimes.com/business/la-fg-beijing-bust22-2009feb22,0,1213023.story?page=2
It is funny, in almost all cases the Olympics produces a recession for the city that host it. With overbuilding a key problem. Beijing is suffering on the same scale as building. Way too much boom bulding is producing a major bust.