Daily Digest

Daily Digest - December 26

Saturday, December 26, 2009, 10:29 AM
  • Brace For Impact: In 2010, Demand For US Fixed Income Has To Increase Elevenfold... Or Else
  • Gold, Dollar and Euro: A Love Triangle into 2010
  • Key Political Risks In 2010
  • Economists Are Trained To Ignore The Real World
  • Computer Science Reveals Impenetrable Problems With Derivatives
  • Top Ten CEOs In The World
  • Ten Countries That Will Survive 2010 Sovereign Meltdown
  • Where Americans Aren't Moving
  • Teenagers Coming To Grips With Reality Of Recession
  • Best Financial TV Ads Of 2009
  • Food Shows Whipping TV Networks Into A Frenzy
  • Russia Cuts Interest Rates For 10th Time This Year


Brace For Impact: In 2010, Demand For US Fixed Income Has To Increase Elevenfold... Or Else (pinecarr, M.W.)

As everyone is engrossed by assorted groundless Christmas (and other ongoing bear market) rallies, and oblivious to the debt monsters hiding in both the closet and under the bed, Zero Hedge has decided it is about time to present the ugliest truth faced by our 'intellectual superiors' and their Wall Street henchman who succeeded in pulling off Goal #1 for 2009 - the biggest ever bonus season.

Gold, Dollar and Euro: A Love Triangle into 2010 (pinecarr)

The greenback has been the primary beneficiary of Fitch and Standard & Poor’s credit rating downgrades of E.U. member Greece and similar worries about Portugal, Spain and Ireland.

Capital is fleeing out of the euro due to possible sovereign risk in the E.U. states, which sent the euro plunging, and dollar (quite ironically) reclaiming its status as "the currency of choice” on the risk aversion side.

Key Political Risks In 2010 (M.W.)

U.S.congressional elections, the standoff over Iran, high unemployment and the rising federal budget deficit could all affect financial markets and President Barack Obama's fortunes in 2010.

Economists Are Trained To Ignore The Real World (M.W.)

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession.

Computer Science Reveals Impenetrable Problems With Derivatives (M.W.)

In a result that may have implications for financial regulation, researchers in computer science and economics, using the intractability theory, have revealed potentially impenetrable problems with the pricing of derivatives. Findings in the research, which focused on collateralized debt obligations, (CDOs), show that sellers could purposefully include bad risks that no buyer could detect even with the most powerful computers.

Top Ten CEOs In The World (M.W.)

The study ranks CEOs by averaging three measures: How a company performed against the local stock market, how a company performed against the industry average, and how a company changed in market value.

Ten Countries That Will Survive 2010 Sovereign Meltdown (M.W.)

First, there were failed banks. Then, countries started to fold. In 2010, sovereign defaults are expected to be the economic story of the year. We have our picks for great safe havens for investors-- the world's safest sovereigns.

Where Americans Aren't Moving (M.W.)

Through most of the decade Florida was one of the fastest growing states. But the sunny clime -- and 6 others -- lost more residents than they gained in the year ending July 1.

Teenagers Coming To Grips With Reality Of Recession (M.W.)

After a year of observing their parents pinch pennies and fret about the economy, students understand the economic downturn, and data shows that they are cutting corners when they shop.

Best Financial TV Ads Of 2009 (M.W.)

As the economy continued to tank throughout 2009, businesses involved in financial services definitely pulled back on their advertising budgets. Still, there were some great commercials that aired over the year, including Ally Bank's ad campaign (that went viral) entitled 'Even kids know it's wrong.'

Food Shows Whipping TV Networks Into A Frenzy (M.W.)

Programmers say a recessionary trend toward home entertaining has driven the genre. "Culturally right now, food is a comfort device," says TLC chief Eileen O'Neill, who's peppered her network's schedule with shows about barbecue pitmasters, dwarf chocolatiers and that New Jersey cake guy.

Russia Cuts Interest Rates For 10th Time This Year (M.W.)

Economists expect more gradual trims in the coming months as policymakers try to stimulate the country's blighted economy.


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Re: Daily Digest - December 26

"Japan on Friday approved a record trillion-dollar budget, seeking to aid an economic recovery but also fuelling concerns about its swelling national debts."

"Gross domestic product was $4.6 trillion last year, the statistics bureau said. That compares with a previous $4.4 trillion and the World Bank's estimate of $4.9 trillion for Japan.

China's expansion will be more than 8 percent in 2009, according to government officials, and the nation is poised to overtake Japan next year, International Monetary Fund projections show. "

"JEFFREY BROWN: Now, in a weak economy, what may be a ticking time bomb for many states, cities and towns: hundreds of billions of dollars in pension liabilities that are currently underfunded.

In California, Governor Arnold Schwarzenegger warned just this week that his state will need billions more from the federal government for basic operations, even as longer-term pension requirements loom."

"Projected deficits are especially deep in some places and tax revenues could be pinched for years as consumers turn thrifty and real-estate prices remain diminished. That means the relatively painless measures such as borrowing, deferred payments to pension plans and scattered layoffs that have been used during past episodes of fiscal strain are unlikely to be effective in some cities.

In the decade through 2008, municipal tax revenues grew at a rate of 6.5% a year, faster than the overall economy's 5.1%, unadjusted for inflation. Those revenues have started to slip. A national tally isn't yet available, but state tax collections fell 11% across 44 states in the third quarter of 2009, from the same period a year ago, according to a report by the Nelson A. Rockefeller Institute of Government at the State University of New York"

"WASHINGTON: The US government has pledged virtually unlimited aid to mortgage finance giants Fannie Mae and Freddie Mac through 2012 to allow the government-sponsored firms to weather any new crisis.

The announcement Thursday by the US Treasury allows the government to postpone an exit strategy for aid to the two firms that underpin trillions of dollars in mortgages and play a key role in the global financial system.

Officials said they amended the congressionally mandated deadline of Dec 31 from the firm’s September 2008 rescue."

.......................5A) U.S. Move to Cover Fannie, Freddie Losses Stirs Controversy (Wall Street Journal)

"The Obama administration's decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday.

The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies to $200 billion each.

Unlimited access to bailout funds through 2012 was "necessary for preserving the continued strength and stability of the mortgage market," the Treasury said. Fannie and Freddie purchase or guarantee most U.S. home mortgages and have run up huge losses stemming from the worst wave of defaults since the 1930s."

...................5B) Treasury uncaps credit line for Fannie, Freddie (Reuters)

"WASHINGTON (Reuters) - The Obama administration pledged on Thursday to back beleaguered mortgage finance giants Fannie Mae and Freddie Mac no matter how big their losses may be in the next three years.

It also jettisoned a demand that the two companies cut the size of their mortgage-related investment portfolios next year, allowing them to provide even more support in the near term for a housing market recovering from its worst slump in decades."

"For the state of Alabama, it's time to raise more money for the state's rapidly depleting unemployment compensation fund.

That means employers will pay a lot more in unemployment compensation taxes starting Jan. 1.

But the timing of that tax increase couldn't be worse, experts say. It comes at a time when many hoped employers might hire more workers — an action that not only will be more expensive but also more difficult as employers have to find additional money to pay the higher assessments for the workers they already have."

"Private sector employers paid between $64 and $512 in state unemployment compensation taxes in 2009 for each worker. "

"On Jan. 1, the annual unemployment compensation tax businesses will pay for each employee will rise to between $172 to $664 per employee.

That's an extra $108 to $152 per employee over the amount paid in 2009. The rate increases will be from 30 percent to 169 percent, Dennis said."

"Oklahoma has paid out more than $575 million in unemployment claims so far this year, a record as the number of jobless in the state remains near a 21-year high, a spokesman for the Oklahoma Employment Security Commission said Wednesday.

Spokesman John Carpenter said that last week, the state paid $23.72 million in benefits on 74,814 jobless claims, down slightly from the week before when it paid out $23.77 million on 74,845 claims — a new weekly record.

The state paid just $182.6 million in unemployment benefits in all of 2008."

"TRENTON - A tax increase that could cost employers $1 billion is needed to replenish New Jersey's depleted unemployment-insurance fund, according to Gov. Corzine's labor commissioner.

With large shortfalls in the fund expected for several years, David Socolow said, the state needs to let an automatic tax increase take effect July 1 to rebuild reserves. Once the fund recovers, a process likely to take several years, taxes would begin to fall to previous levels."

"The fund, which temporarily aids workers who lose their jobs, is expected to have a $1.2 billion deficit on March 31. That would move the tax rate on employers, beginning in July, to the highest level allowed.

The increase would add about $1 billion to the current $1.7 billion levy on businesses, according to the Department of Labor and Workforce Development."

"A $1.5 billion deposit into the unemployment-insurance fund would be needed to reduce the tax increase to $550 million. Nearly $2 billion would have to be deposited to avoid any tax hike.

The prospects for such an infusion seem unlikely given the dire budget, which has a shortfall of $8 billion or more. The money would have to be committed by the end of March, a month when Christie aides are worried the state might run out of cash."

"The record credit binge – fuelled largely by the first-home buyer's grant – means every adult, on average, owes more than $74,000.

The extraordinary rise in debt means we now owe more per person than the US, the one-time credit capital of the world where household debt stands at just under $50,000 per person.

Reserve Bank figures show personal debt now equates to 100.4 per cent of Australia's annual GDP, one of the highest ratios in the developed world.

"It's the first time household debt has cracked 100 per cent of annual GDP and it's a terrible, terrible sign," said University of NSW economics professor Steve Keen.

"It shows we are living beyond our means.""

"Ercole said the lawsuit will allege that Arrow Trucking violated the Worker Adjustment and Retraining Notification Act when it closed its operations Tuesday, laying off scores of truckers and leaving many of them stranded across the United States.

"I have handled several cases like this, but I think this is one of the most egregious examples of a shutdown that I have seen," Ercole said. "I have never seen a situation where you strand people around the country during the holidays without money or a sure method of getting home. It is adding insult to injury because it is happening at Christmas."

Ercole said he is investigating allegations of bounced payroll checks, failure to reimburse expenses and failure to pay health insurance premiums. "

"The blanket shortage comes at time when the county is experiencing an increase in the homeless population. In June, the county Board of Supervisors received a report that homeless numbers had jumped to 2,407 from 1,400 in 2007 — a 72 percent increase."

gregroberts's picture
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Super Thermite Paint Demo time .50

Headless's picture
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Posts: 363
Re: Super Thermite Paint Demo time .50

I passed a group of painters  that were leaving 85 Broad about a week ago (none of them seemed to speak English; I speak Japanese, Korean, Spanish and French, and whatever they were speaking wasn't one of those). Maybe Goldman's future is about to get a little brighter...

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A True Inquiry Into Climate & Weather (well worth listening too)

The plot really does thicken as we continue our inquiry into climate and weather. If addressed improperly and not by an open mind, this incredibly complex up-and-coming piece of inquiry could lead humanity to shocking and chilling new discoveries about climate that will overshadow global politics and outweigh any ideology.

The verifiable data offered in this interview is both fascinating and disturbing. Astrophysicist Dr. Willie Soon (Harvard-Smithsonian Center for Astrophysics) and climatologist Dr. David Legates (University of Delaware) come together to brief listeners on key scientific data that cannot be overlooked or dismissed. I learned so much here and deeply appreciate the gift of real knowledge that they have given us.

Speaking with clarity, passion, and openness, they separate out elements that leave the average activist and global warming advocate with a totally different understanding of what is really occurring. They display a rare courage in standing up for the integrity of verifiable science as they continue to speak truth to power against vicious attacks.

Have a listen. See what you come up with and ask the questions that need to be asked. Whether you agree or not, we appreciate you being here. Thank you for listening.


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