Daily Digest

Daily Digest - January 8

Friday, January 8, 2010, 11:41 AM

We'd like to take this opportunity to thank M.W. for her tireless contribution to the Daily Digest. If you're a regular reader, you know how many fascinating and varied articles are submitted by her each day. Unfortunately, this is her last day. Thank you so much, M.W., and we hope that the rest of you will pick up the slack! Please send submissions to [email protected] and have a wonderful day.

  • Geithner’s Fed Told AIG to Limit Swaps Disclosure
  • Contrarian Investor Predicts Economic Crash in China
  • 2010: Giant Gathering Storm Clouds
  • Tim Geithner's NY Fed told AIG to keep quiet about $105bn paid to banks
  • Global Financial Regulation Overhaul Seen In 2010
  • Unlimited Credit For Fannie/ Freddie Seen As Backdoor Bailout
  • Taking Another Whack At Stimulus
  • Departures Shake Democrats
  • Chris Dodd's Remarks On Retiring
  • Got Gold: New Format And Interesting New Gold And Silver Graphs
  • Fed Minutes Show Division In Housing Emergency Steps
  • Wall Street Hubris Soars As Obama Fails At Change
  • 'Move Your Money' Campaign Catching On
  • What Health Care Reform Means For The States
  • IRS Suddenly $32 Billion Short
  • The Young And The Jobless
  • Bank Sues Former CEO For Risky Loans
  • CREW Sues SEC For Records Of Reforms
  • McCain Now Gets It, Obama Doesn't
  • Looting Social Security
  • How To Stay Motivated And Get That Bonus
  • Goodbye Overpriced Cellphones?
  • No EU Bailout For Greece
  • Reducing Nukes: US And Russia Resume Intricate Dance
  • The Issues That Will Shape The World This Year
  • New Life for Solar-Updraft Technology?

Economy

Geithner’s Fed Told AIG to Limit Swaps Disclosure (Robert H.)

The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

Contrarian Investor Predicts Economic Crash in China (Ben Johnson)

James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other high-flying companies whose stories were too good to be true. Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc.

2010: Giant Gathering Storm Clouds (pinecarr)

Rather than make specific forecasts of extreme events, a list is presented much like a smorgasbord. The odds are 100:1 in favor at least one extreme event occurring in this current calendar year in my view. The odds are very high in favor of several events taking place this year.

Tim Geithner's NY Fed told AIG to keep quiet about $105bn paid to banks (pinecarr)

Tim Geithner's Federal Reserve Bank of New York urged American International Group (AIG) to remain silent on $105bn of payments made to banks including Goldman Sachs and Deutsche Bank at the height of the financial crisis.

Global Financial Regulation Overhaul Seen In 2010 (M.W.)

U.S. and EU authorities are expected to hammer out the final shape of a new regulatory order in 2010 that will fundamentally change how world banks and markets operate.

Unlimited Credit For Fannie/Freddie Seen As Backdoor Bailout (M.W.)

Dennis Kucinich thinks the Dec 24th move to extend unlimited credit to Fannie and Freddie is a backdoor way to help banks. "That's exactly what Treasury is doing," says Dean Baker, co-director of the Center for Economic Policy Research in Washington.

Taking Another Whack At Stimulus (M.W.)

The Senate will start looking at a $154 billion package to boost the economy the House passed last month. Here's what's in the bill:

Departures Shake Democrats (M.W.)

A string of unexpected retirements by Democrats this week demonstrated the daunting obstacles facing Democrats in this year's elections. Jack Markell, chairman of the DGA said, "When you've got as many people unemployed in the country as you do, it's understandable that folks will be looking to their leaders to do everything possible to create jobs. As Democrats, there's a burden of proof here."

Chris Dodd's Remarks On Retiring (Video) (M.W.)

I have been a Connecticut Senator for 30 years. I'm proud of the job I've done...

Got Gold: New Format And Interesting New Gold And Silver Graphs (M.W.)

In this special edition of the Got Gold Report we take a look at a new reporting format from the CFTC in graphs you (and we) have never seen before, and we call attention to GATA’s lawsuit against the U.S. Federal Reserve Board.

Fed Minutes Show Division In Housing Emergency Steps (M.W.)

Despite extensive government intervention in the housing market, some policy makers at the Federal Reserve are worried that even more might need to be done.

Wall Street Hubris Soars As Obama Fails At Change (M.W.)

On Wall Street, the past year was filled with one opportunity after another to fix the myriad fundamental structural deficiencies that continue to plague the country’s large securities firms. At year’s end, not a single one had been adequately addressed, let alone resolved. This ongoing failure to act is especially disappointing since President Obama was elected on a promise to bring constructive and lasting change.

'Move Your Money' Campaign Catching On (M.W.)

Changing your bank, as Felix Salmon observes, "is hard, and people are lazy." But plugging your zip code into an online database to see if there is a fiscally sound community bank near you is super-easy. And by that metric, the Move Your Money campaign has been a big success, after just one week of existence.

What Health Care Reform Means For The States (M.W.)

As the battle enters its final stage in Washington, a rebellion is taking shape in the states, which are alarmed about the new financial burdens they will face in a revamped system. Governors are complaining that reform will drive their budgets into even deeper holes, with some feeling the effects far more than others. But just how much will be riding on the states? Here's a look at 4 changes that lie ahead.

IRS Suddenly $32 Billion Short (M.W.)

The IRS suddenly reduced the amount of revenue it reported from delinquent collections by $32 billion, or about 27%, providing little information about what happened to the money. "There is an astonishing lack of transparency as to what is included in these revenue figures and how they are computed."

The Young And The Jobless (M.W.)

In November, the unemployment rate for 20- to 24-year-olds rose to 16%, almost double that of everyone older than them. The numbers convey a dire situation, but you don't have to share the data with recent graduates and other young people -- they know all too well what the job market looks like, and that odds aren't looking up anytime soon.

Bank Sues Former CEO For Risky Loans (M.W.)

Wheatland Bank in Chicago has sued its former CEO, Michael Sykes, accusing him of misleading the three-year-old Naperville lender into making loans to shaky borrowers and personally profiting because those customers were clients of another lender he owned.

CREW Sues SEC For Records Of Reforms (M.W.)

Citizens for Responsibility and Ethics in Washington filed a lawsuit against the SEC, challenging the SEC’s failure to produce records in response to CREW’s October 6, 2009 Freedom of Information Act request for records related to reforms the SEC has taken in the wake of its failure to detect Bernard Madoff’s $65 billion Ponzi scheme.

McCain Now Gets It, Obama Doesn't (M.W.)

Maybe I got it wrong. During the presidential campaign I wrote columns blasting John McCain for siding with the big banks on deregulation. Barack Obama, on the other hand, repeatedly blasted the repeal of Glass-Steagall, that radically deregulated the financial industry. But now the roles are reversed, and it is McCain who has sponsored a bill to repeal Glass-Steagall, while Obama seeks to preserve it.

Looting Social Security (M.W.)

He's baaack --the Wall Street billionaire who wants to loot Social Security.. This time, Pete Peterson has invented his own "news network" to promote his rants about shrinking the only retirement security system available to millions of working people. Peterson styles himself as a patriot saving the nation from fiscal insolvency and has committed $1 billion to buying Washington reporters to spread his dire warnings.

How To Stay Motivated And Get That Bonus (M.W.)

Daniel Pink became well known for "A Whole New Mind," in which he stated that right-brainers -- people who are strong in qualities such as empathy, storytelling and inventiveness -- will rule the future. In his new book, "Drive," Mr. Pink explores the concept of human motivation and what he calls "the surprising truth" about what motivates us.

Goodbye Overpriced Cellphones? (M.W.)

Mobile phones may be almost indispensable to modern life, but they are costly, too–far more than most people realize. These little gadgets pick your pocket while they sit in it, filching many thousands of dollars from you over the years.The Google Nexus, unveiled Tuesday, may mark a healthy step in a better direction.

No EU Bailout For Greece (M.W.)

The European Central Bank has given its clearest warning to date that there will be no EU bail-out for Greece if it fails to control its spiralling deficit, raising the stakes in a game of brinkmanship over the future of the euro.

Reducing Nukes: US And Russia Resume Intricate Dance (M.W.)

When President Obama pledged to move toward the abolition of nuclear weapons in April 2009, replacing the Strategic Arms Reduction Treaty was supposed to be the easy first step. But the 1991 agreement, which limits the number of long-range nuclear weapons in Russia and the U.S., expired on Dec. 5. And a replacement has yet to be agreed upon.

The Issues That Will Shape The World This Year (M.W.)

The past year seemed a fitting end to a decade during which the world lurched from crisis to crisis. The list of unfinished business is long and many pressing issues are set to demand attention in 2010..

Energy

New Life for Solar-Updraft Technology? (Dorrian)

Now, an Australian company, EnviroMission Ltd., hopes to convince investors to support its plans to build two utility-scale solar updraft towers in the desert of Arizona. The company has submitted applications to use several hundred acres of public land in La Paz County for the plants. [...] Each solar-tower plant would require a 2,400-foot-tall chimney – just 200 hundred feet shorter than the Burj Dubai, the world’s tallest building – to be situated over a four-square-mile-wide greenhouse. The company estimates the 200-megawatt plants will both cost $750 million.

21 Comments

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest - January 8

"Idaho farmers sold $5.4 billion worth of products in 2009, down 17 percent from the year before. That's the largest single-year decline in more than 40 years.

The University of Idaho released the report on Wednesday"

"The Treasury Department said Thursday it will sell $74 billion in notes and bonds and an additional $10 billion in Treasury-inflation protected securities next week. "

"The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS). In the holiday shortened work week between December 31, 2009 and January 6, 2010, the Federal Reserve purchased $14.50 billion agency MBS. In those four days the Federal Reserve sold $2.50 billion (supported the roll market) for a net total of $12 billion purchases.

The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers."

"A veteran U.S. Federal Reserve official said Thursday the central bank shouldn't wait long to tighten the stance of monetary policy in order to keep longer-run inflation pressure contained, in what appears to be a recovering economy."

""The ballooning federal deficit must be controlled and reduced," because if it isn't, "eventually, there will be pressure put on the Federal Reserve to keep interest rates artificially low as a means of providing the financing," Hoenig said. And that would be a recipe for hyperinflation, he warned."

"There are 920 football fields of available office space in Manhattan. More than 180 major buildings totaling $12.5 billion in value — from Columbus Tower at 1775 Broadway to the office tower 400 Madison Avenue — are in trouble, meaning in many cases they face foreclosure or bankruptcy, or have had problems making mortgage payments. Rents for commercial office space fell faster over the past two years than in any such period in the last half century.

“I have been in the business for 12 years. I have never seen it this bad,” Peter Von Der Ahe, vice president of investments for the brokerage Marcus & Millichap, said of New York City’s commercial real estate market."

"Bankruptcy filings in Sacramento and the Central Valley soared to an all-time high in 2009, up nearly 50 percent from 2008's totals, figures from the U.S. Bankruptcy Court in Sacramento showed Thursday."

.........6A) San Jose area bankruptcy filings at 20-year high

"Driven in large part by layoffs and the mortgage crisis, bankruptcy filings have doubled in the past two years, and are up 50 percent over last year, according to a Mercury News review of filings in U.S. Northern District Bankruptcy Court in San Jose. The court covers Santa Clara, Santa Cruz, Monterey and San Benito counties. "

"Hotel foreclosures in California more than quadrupled last year as business travelers and vacationers cut spending and commercial real estate values plunged, forcing owners into default, according to a survey released today.

There were 62 foreclosures on hotels in the state last year, compared with 15 in 2008, Atlas Hospitality Group said.

Properties in default jumped almost six-fold to 307, said Atlas, which specializes in selling hotels."

"China overtook the United States as the biggest auto market in 2009 and automakers should see more strong growth this year, an industry group reported Friday."

"Illinois, the second-lowest-rated U.S. state, is seeking to attract overseas investors as it sells $3.47 billion in taxable bonds amid a warning from its comptroller that state finances are in a “downward slide.”

The debt offering will go toward an annual payment to the employee pension fund."

Frequent reader, Joe, dug a little deeper in to the household survey and found that it is a “disaster.” Here are the numbers he found, they are astonishing:

Here are some year over year stats first:

In December 2008, there were 235.035 million working-age adults. In December 2009 there were 236.924 million, an increase of 1.889 million in a year. During the same period of time, the size of the labor force (those actually looking for/holding a job) decreased from 154.3 million to 152.6 million, a drop of about 1.7 million. This creates a gap of about 3.6 million people who are working-age but who either can't or won't find a job. About 3 million new jobs would need to be created just to be at the same employment/population percentage we were at a year ago. That would be break even. [about 250,000 per month]

Actually employed working-age adults dropped from 143.3 million in Dec of 2008 to 137.95 million in Dec 2009. A drop of 5.35 million working people in one year.

In month over month terms, things look pretty bad. The number of employed people dropped by 1.1 MILLION from November to December. The number of people who dropped out of the labor force (not looking for work any more) increased by 1 million.

Combine this with the stories yesterday about the colossal increase in number of people on emergency unemployment in the last month, and you have an employment mess on your hands.

Wow, Joe. More than 1 million dropped out of the work force in one month and amazingly they are able to hold the unemployment rate steady at 10%. Amazing what seasonal adjustments and changes to their procedures can accomplish at covering up.

Here's John William's chart, it will automatically update with the latest figures. Note that his rate is now just under 22%, but may have gone over once this updates:

Chart of U.S. Unemployment

"Jan. 8 (Bloomberg) -- A record 1.81 million U.S. home loans backing the securities that roiled the global financial system were “nonperforming” last month, adding to threats to the housing market, according to Amherst Securities Group LP.

Mortgages at least 60 days delinquent in so-called non- agency securities equaled 32 percent of the total as of late December bond disclosures, up from 25 percent a year earlier, according to a report e-mailed yesterday by the Austin, Texas- based securities firm.

Soured mortgages ballooned last year even as new defaults eased as the Obama administration pushed loan servicers to assess homeowners for debt modifications and state moves slowed foreclosures, cutting liquidations of properties after borrowers stopped paying, according to Amherst. Higher seized-home sales as the government efforts mature may undermine a stabilization in housing after its worst slump since the 1930s."

"WASHINGTON (Reuters) - Two prominent U.S. lawmakers on Friday called for Treasury Secretary Timothy Geithner to testify to help determine if the New York Federal Reserve Bank improperly influenced insurer AIG to withhold information on payments it made to banks after a government bailout."

Click on the link above and look at the graph!

"Latest Observations:

Date 2009-08 2009-09 2009-10 2009-11 2009-12
Value 5024 5447 5620 5901 6130"

 

........13A) The St. Louis Fed just updated all of their employment/unemployment numbers and graphs. I posted them a month ago here. 

Click on the links for the updated numbers and graphs (they aren't pretty at all). Look at what has happened to the manufacturing and construction numbers.

============ 

Thanks, Davos. I meant to say something earlier about your advice on gold. Nice idea.

Thanks M.W. for all of the news you've been bringing here.

Davos's picture
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Re: Daily Digest - January 8

Sax, awesome JW chart! Thanks for all you do.

SagerXX's picture
SagerXX
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Re: Daily Digest - January 8

Here's where the consumer culture's at.  Disgusting.

http://shine.yahoo.com/channel/beauty/h-m-and-wal-mart-destroy-and-trash...

cipher's picture
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Re: Daily Digest - January 8

SagerXX,

It is so saddening......... I don't know what happened to chrismas spirit ....

idoctor's picture
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Re: Daily Digest - January 8

Here It Comes: Consider Yourself Warned

http://seekingalpha.com/article/181488-here-it-comes-consider-yourself-warned?source=email

 

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Re: Daily Digest - January 8
cipher wrote:

SagerXX,

It is so saddening......... I don't know what happened to chrismas spirit ....

Indeed.  Not just unconsciously wasteful behavior, but actively ruining the garments -- going out of their way to waste the clothes?  It boggles the mind.  

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Re: Daily Digest - January 8
SagerXX wrote:
cipher wrote:

SagerXX,

It is so saddening......... I don't know what happened to chrismas spirit ....

Indeed.  Not just unconsciously wasteful behavior, but actively ruining the garments -- going out of their way to waste the clothes?  It boggles the mind.  

Sager -

While not much surprises me anymore, it's entirely possible that some disgruntled former employee, or any number of other organizations with an agenda could have got their hands on the clothing, destroyed them, then "found" them and alerted the media all in an effort to discredit H&M and WalMart.

At least that's what I'd prefer to believe happened.

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SagerXX
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Re: Daily Digest - January 8
Dogs_In_A_Pile wrote:

Sager -

While not much surprises me anymore, it's entirely possible that some disgruntled former employee, or any number of other organizations with an agenda could have got their hands on the clothing, destroyed them, then "found" them and alerted the media all in an effort to discredit H&M and WalMart.

At least that's what I'd prefer to believe happened.

What does Occam's Razor have to say about it?  Wink

idoctor's picture
idoctor
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Re: Daily Digest - January 8

Here's where the consumer culture's at.  Disgusting.

http://shine.yahoo.com/channel/beauty/h-...

Wow Sager more Clunkernomics at work.

Clunkers: Taxpayers paid $24,000 per car

http://money.cnn.com/2009/10/28/autos/clunkers_analysis/index.htm

But don't worry Obamacare will be a "savings" as they will be able to do it better eliminating waste & abuse LOLLaughing.

Dogs_In_A_Pile's picture
Dogs_In_A_Pile
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Re: Daily Digest - January 8
SagerXX wrote:
Dogs_In_A_Pile wrote:

Sager -

While not much surprises me anymore, it's entirely possible that some disgruntled former employee, or any number of other organizations with an agenda could have got their hands on the clothing, destroyed them, then "found" them and alerted the media all in an effort to discredit H&M and WalMart.

At least that's what I'd prefer to believe happened.

What does Occam's Razor have to say about it?  Wink

Since either scenario is easily accomplished, it's running about 51/49 for the one I want to believe.

pinecarr's picture
pinecarr
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Re: Daily Digest - January 8

Hey M. W. (Swt Melissa), thanks for all the great stories you gathered for us on the Daily Digest!  I hope we see you around on the threads!

-pinecarr

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Re: Daily Digest - January 8
pinecarr wrote:

Hey M. W. (Swt Melissa), thanks for all the great stories you gathered for us on the Daily Digest!  I hope we see you around on the threads!

-pinecarr

Ditto

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Re: Daily Digest - January 8

 

Here's where the consumer culture's at.  Disgusting.

http://shine.yahoo.com/channel/beauty/h-...

 

 And insanely stupid. Since if they donated the clothing they could collect on a tax deduction. Instead they paid to have a trash company haul it away.

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Gungnir
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Re: Daily Digest - January 8

They get a tax deduction anyway, it's called wastage.

There's no financial incentive to donate, it costs to arrange and transport it. Although it could be said that it does buy goodwill, but Walmart has never been too keen on goodwill, just ask their employees.

idoctor's picture
idoctor
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Re: Daily Digest - January 8

Look what the Govt is handing out now LOL.

https://www.safelinkwireless.com/EnrollmentPublic/home.aspx

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Re: Daily Digest - January 8

Thanks, M.W., great links!

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Re: Daily Digest - January 8
idoctor wrote:

 

The end of this video is so true. I have a high deductible health plan and I tried to get the prices for the cost of the surgery beforehand. No one was able to provide it. And I also tried to get the cost of the follow-up treatments from my doctor. Although, I was given prices, none of them were correct or even close. Some were half as much and some were double. It was so frustrating.

I also complained to my surgeon that I had started experiencing heartburn after the surgery for everyday 2 weeksand I never in my life had heartburn tha latest more than a day. He wrote me a prescription for Prilosec. I asked him, isn't that available over the counter now. He said yes, but it's not as strong, so if you want to do that, take double the dose of the OTC. Since I pay for prescriptions myself, I decided to check the price of each treatment. The prescription would have been $330, the OTC option cost $18.93 for the generic equivilent or $24.88 for Prilosec OTC. But if I had a cadillac prescription plan,  I would have just filled the prescription.

Eye's picture
Eye
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Re: Daily Digest - January 8

Walmart's "generics" program, at something like $4 per month supply, is offering more and more meds on it's formulary.  Tremendous savings here if your med is on the list.

They are changing the way I write Rx's because that is even less than the generic copays on most insurance plans.  I am saving patients money by sending them to Walmart and I am saving time because the pharmacuetical reps are spending less time with me.  It is the only win win situation I've seen in a while.

 

idoctor's picture
idoctor
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Re: Daily Digest - January 8

I am saving patients money by sending them to Walmart

This is feeding the corporatism (the beast) IMHO. Starve the beast! Soon everyone will be sending people to their $4 Doc in their box......you watch. The more money they have the more people they control or strangle.

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Re: Daily Digest - January 8

I just wanted to say that this site has such great information.  I have gained so much insight and have better prepared myself for the future.  It is not biased, but links other sites and sources for information.  Instead of the typical wesbite that states their own ideas, they use other's information to back up a fairly general conclusion about our economy and future as a nation.  I hope, God willing, that this site will continue; if not for my sake, but the sake of thousands of Americans.

 

THANK YOU!!!

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Re: Daily Digest - January 8

With the recent increase in unemployment among 20-24 year olds I would be willing to bet that there is spike in Armed Service recruitment.

I would also expect a spike in crime as 16% is the overall number but the number is 33.5 for those without a high school diploma and 23.3 % for those without a college degree.

These are the youth hanging out on the corner of your street.

Does anyone know where to get recruitment numbers? I would think it interesting to see if there is a correlation. 

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