Official Stock Market & Economy Thread

[finnns2003]

Originally Posted by TBONE95860

Originally Posted by nicefro

how the heck is it obama's fault. the dow first broke 8K when Bush was in office anyway as a result of years of cheap !%*$ credit, deregulation and greed you guys need to get pho blaming this on obama.

i don't agree with all this stimulus money though.

Will it's Obama's fault starting now or soon..... since he passed HIS STIMULUS PLAN & making HIS economic moves like raising taxes.
And clearly the market has NOT responded well.

Hopefully things pick up.... and if they do then the markets will go back up.

But at this point that's not the case.

The next few months will be VERY interesting.

what is this, instant coffee? you cannot be serious here. put aside your partisan bias and think on a structural level.

 

[Fong$tarr]

Originally Posted by btrbean

AIG's core insurance businesse are fine . . . their life insurance, foreign life insurance and property/casualty insurance subsidiaries are fine and all have policyholder surpluses above regulated minimums . . . its the holding company that is trouble and the holding company cannot extract surplus from its admitted subsidiaries without the approval of the NAIC and I think the state insurance commissioner . . . thus, if you work for AIG in one of their core businesses you're not going under, but you may be sold if things get worse. Its was AIG financial products that screwed up by selling unregulated credit default swaps . . . AIG is going real aggressive on its pricing now, at least for commercial insurance ( I don't do life/health . . .) . . . their restructuring of their line of credit to $30 more billion dollars of TARP funds enabled their main businesses to keep their ratings from the main agencies today.

You work for AIG? I am just a UT here and I've had countless meetings about it and I am still confused, granted I never went to college for this (graphicsmajor) and I just got lucky and am very like here in the San Francisco office. I work in the core business (commercial insurance - public D&O) so at leastmy job is safe for now.

 

[nicefro]

http://www.bloomberg.com/apps/news?pid=20601103&sid=aCrzJbsxzKdk&refer=us

 

[tsman]

Geithner....

The market hates this guy, and you can see why. His explanations, answers, are joke. Especially compared to Bernanke.

Little Timmy, step down.

 

[briannnnn]

Tiny Tim Geithner [/Jim Cramer]

 

[elgrenas]

http://www.breitbart.com/article.php?id=D96MMP3O3&show_article=1

 

[devildog1776]

WHAT DONT U PEOPLE UNDERSTAND ? THIS IS GOING TO BE THE "GREATEST DEPRESSION"... ITS BY DESIGN... NOT A CONSPIRACY BUT ACTUALLY.... THIS MARKET NEEDSTO CRASH SO THE GLOBALIST CAN MOVE FORWARD WITH THEIR AGENDA.... YOU GUYS ARE THE SAME PEOPLE WHO PREDICTED THAT THE BOTTOM WAS AT 9000 THEN 8500 THEN 7500THEN 7000 NOW 6000... THE BOTTOM IS WHEN WE FALL ON OUR FACES... OBAMA IS DOING WHAT HE;S TOLD TO DO.... THEIR AINT TOO MUCH DIFFERNCE IN POLICYS BETWEEN HEAND G.W. BUSH... THEY HAVE PRETTY MUCH THE SAME CABINET.... IM NOT A "CONSPIRACY THEORIST" but more of a truth deliverer.....some people are socaught up in the system that they fail to see whats right in front of them...

AIG lost 61.2 BILLION dollars in the 4th qtr....... HOW DID THEY LOSE THE ENTIRE INTIAL BAILOUT MONEY THAT WAS GIVEN TO THEM?

when feces hits the fan and we are asking ourselves how this happened just remember I SAID it here first



FOLLOW THE MONEY

 

[tsman]

Be quiet

 

[devildog1776]

Originally Posted by Tsman

Be quiet

why should I???? if u go to my previous post in this thread you would see that I PREDICTED THIS TO GO PAST 9 8 7 AND 6 THOUSAND.... Im not talking farfetchedor taking food out ur mouth .... just trying to kick game to some of u

 

[sundoobie]

Originally Posted by NostrandAve68

Originally Posted by SunDOOBIE

Originally Posted by wizards23

and he is messing up badly as each day goes by.....

Dow Jones
on Jan 20 - 7,949.09
today Mar 2 - 6,763.29

Went down by 1,200 points in just over a month. I just filed my paperwork to stop contributing to my 401(k). Freaking pointless.

Dow Jones Jan 22nd, 2008 - 12,207.
Dow Jones Jan 20th, 2009 - 7,949.

Obama's fault aswell huh

Where did I post that all this was Obama's fault? Since Jan 20th the dow went down 15%. That's a fact.

However you don't have to be a rocket scientist to realize that Obama's decisions, actions and inactions since being elected drove the DOW even lower. Obama is just following Bush's footsteps. Obama is no different to the mess we had with Bush. So now instead of all these moronic Bush supporters thatrefuses to realize fact from fiction and whom continue to blame Clinton for Bush's mistakes, I am now seeing the same with Obama supporters who will blameBush no matter what their mesiah does.

Pathetic.

 

[shoedinidc]

So is it time to dump all stocks that have been held for longterm value?

 

[elgrenas]

Originally Posted by SunDOOBIE

Originally Posted by NostrandAve68

Originally Posted by SunDOOBIE

Originally Posted by wizards23

and he is messing up badly as each day goes by.....

Dow Jones
on Jan 20 - 7,949.09
today Mar 2 - 6,763.29

Went down by 1,200 points in just over a month. I just filed my paperwork to stop contributing to my 401(k). Freaking pointless.

Dow Jones Jan 22nd, 2008 - 12,207.
Dow Jones Jan 20th, 2009 - 7,949.

Obama's fault aswell huh

Where did I post that all this was Obama's fault? Since Jan 20th the dow went down 15%. That's a fact.

However you don't have to be a rocket scientist to realize that Obama's decisions, actions and inactions since being elected drove the DOW even lower. Obama is just following Bush's footsteps. Obama is no different to the mess we had with Bush. So now instead of all these moronic Bush supporters that refuses to realize fact from fiction and whom continue to blame Clinton for Bush's mistakes, I am now seeing the same with Obama supporters who will blame Bush no matter what their mesiah does.

Pathetic.

and now this moron is blaming the people for following the stock market. him and moron brown from britain in this mornings press conference.

 

[shatterkneesinc]

Originally Posted by devildog1776

WHAT DONT U PEOPLE UNDERSTAND ? THIS IS GOING TO BE THE "GREATEST DEPRESSION"... ITS BY DESIGN... NOT A CONSPIRACY BUT ACTUALLY.... THIS MARKET NEEDS TO CRASH SO THE GLOBALIST CAN MOVE FORWARD WITH THEIR AGENDA.... YOU GUYS ARE THE SAME PEOPLE WHO PREDICTED THAT THE BOTTOM WAS AT 9000 THEN 8500 THEN 7500 THEN 7000 NOW 6000... THE BOTTOM IS WHEN WE FALL ON OUR FACES... OBAMA IS DOING WHAT HE;S TOLD TO DO.... THEIR AINT TOO MUCH DIFFERNCE IN POLICYS BETWEEN HE AND G.W. BUSH... THEY HAVE PRETTY MUCH THE SAME CABINET.... IM NOT A "CONSPIRACY THEORIST" but more of a truth deliverer.....some people are so caught up in the system that they fail to see whats right in front of them...

AIG lost 61.2 BILLION dollars in the 4th qtr....... HOW DID THEY LOSE THE ENTIRE INTIAL BAILOUT MONEY THAT WAS GIVEN TO THEM?

when feces hits the fan and we are asking ourselves how this happened just remember I SAID it here first



FOLLOW THE MONEY

hindsight is 20/20

 

[wizards23]

 

[theone2401]

Originally Posted by brettTHEjett


Can someone give me cliff notes on what exactly DOW is?

Also, does it make sense that since AIG "cannot fail" and just dropped 61 billion, it would be WISE to buy stocks now since they will inevitably go up?

Dow is 30 "blue" chip stocks averaged together in an index.

they aint blue chip anymore though.

And no it doent make sense that AIG cannot fail. Anyone who drinks the Kool Aid and thinks the world will end if these companies go down is part of theproblem. The government could have liquidated AIG and unwinded all of AIG's CDS trades for a fraction of what they have already spent. They want to protectthe bondholders and counterparties (Goldman Sachs) in these companies for some reason...I wont go into details because I will sound like a conspiracy theorist.On NT everything is what it seems no room for questioning.

Oh and Obama's policies are not going to work...and if by some how they do all it does is ensure there will be a "greater depression" down theline. Cause that means he created another debt bubble bigger then the one we have now. Anyone who knows a damn thing should not want anything Obama does towork, because it will be at the expense of all of your children

 

[theone2401]

How do all of you people feel about your tax dollars going to pay someone else retirement?

Hidden Pension Fiasco May Foment Another $1 Trillion Bailout

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By David Evans

March 3 (Bloomberg) -- The Chicago Transit Authority retirement plan had a $1.5 billion hole in its stash of assets in 2007. At the height of a four-year bull market, it didn't have enough cash on hand to pay its retirees through 2013, meaning it was underfunded to the tune of 62 percent.

The CTA, which manages the second-largest public transit system in the U.S., had to hope for a huge contribution from the Illinois state legislature. That wasn't going to happen.

Then the authority found an answer.

"We've identified the problem and a solution," said CTA Chairman Carole Brown on April 16, 2007. The agency decided to raise money from a bond sale.

A year later, it asked Illinois Auditor General William Holland to research its plan. The state hired an actuary, did a study and, on July 17, concluded that the sale of bonds would most likely result in a loss of taxpayers' money.

Thirteen days after that, the CTA ignored the warning and issued $1.9 billion in bonds. Before the year ended, the pension fund was paying out more to bondholders than it was earning on its new influx of money. Instead of closing its funding gap, the CTA was falling further behind.

Public pension funds across the U.S. are hiding the size of a crisis that's been looming for years. Retirement plans play accounting games with numbers, giving the illusion that the funds are healthy.

The paper alchemy gives governors and legislators the easy choice to contribute too little or nothing to the funds, year after year.

30 Percent Shortfall

The misleading numbers posted by retirement fund administrators help mask this reality: Public pensions in the U.S. had total liabilities of $2.9 trillion as of Dec. 16, according to the Center for Retirement Research at Boston College. Their total assets are about 30 percent less than that, at $2 trillion.

With stock market losses this year, public pensions in the U.S. are now underfunded by more than $1 trillion.

That lack of funds explains why dozens of retirement plans in the U.S. have issued more than $50 billion in pension obligation bonds during the past 25 years -- more than half of them since 1997 -- public records show.

The quick fix for pension funds becomes a future albatross for taxpayers.

In the CTA deal, the fund borrowed $1.9 billion by promising to pay bondholders a 6.8 percent return. The proceeds of the bond sale, held in a money market fund, earned 2 percent -- 70 percent less than what the fund was paying for the loan.

The public gets nothing from pension bonds -- other than a chance to at least temporarily avoid paying for higher pension fund contributions. Pension bonds portend the possibility of steep tax increases.

'Very Risky'

By law, states must guarantee public pension fund debts.

"What appears to be a riskless strategy is actually very risky," says David Zion, director of accounting research for New York-based Credit Suisse Holdings USA Inc. "If the returns on the pension bond-financed assets don't exceed the cost of servicing the debt, the taxpayers bear the brunt."

With the recession that started in December 2007, cities and states are running huge deficits, which they're closing by cutting services and firing employees. The economic downturn gives state legislatures another reason to cut back on funding pensions.

Government retirement plans nationwide don't calculate their shortfalls based on market values of their assets and liabilities, says Orin Kramer, chairman of the New Jersey State Investment Council, which oversees that state's pension fund.

Paper Over Losses

Fund accountants resort to a grab bag of tricks to get by. They set unrealistically high expected rates of return to reduce governments' annual contributions. And they use smoothing techniques to paper over investment reverses so they make losing years look like winners.

Accountants do that by averaging gains and losses, usually over a five-year period -- sometimes for as long as 15 years of investment returns.

That means actual results of any one year aren't used to calculate how much a state legislature contributes, which can delay governments catching up with losses for more than a decade.

This ruse can pass the buck to future taxpayers, who will pay for the retirement benefits of today's government workers.

"There are accounting gimmicks in pension land which create economic fictions and which disguise the severity of the real problem," Kramer says. "Unfortunately, pension board members don't have much of an appetite for disclosing inconvenient truths."

Calpers' Numbers

The Teacher Retirement System of Texas, the seventh-largest public pension fund in the U.S., reports each year that its expected rate of return is 8 percent. Public records show the fund has had an average return of 2.6 percent during the past 10 years.

The nation's largest public pension fund, California Public Employees' Retirement System, has been reporting an expected rate of return of 7.75 percent for the past eight years, and 8 percent before that, according to Calpers spokesman Clark McKinley.

Its annual return during the decade from Dec. 31, 1998, to Dec. 31, 2008, has been 3.32 percent, and last year, when markets tanked, it lost 27 percent.

'It's Pitiful'

"It's pitiful, isn't it?" says Frederick "Shad" Rowe, a member of the Texas Pension Review Board, which monitors state and local government pension funds. "My experience has been that pension funds misfire from every direction. They overstate expected returns and understate future costs. The combination is debilitating over time."

Rowe, 62, is chairman of Greenbrier Partners, a private investment firm he founded in Dallas 24 years ago.

Texas teacher retirement fund spokesman Howard Goldman and Calpers's McKinley declined to comment on Rowe's views.

Most public pension funds, like the one in Chicago, were already treading water before the 2008 stock market crash. Now they're closer to sinking.

State government pension fund assets in the U.S. fell 30 percent in the 14 months ended on Dec. 16, losing $900 billion, according to the Center for Retirement Research.

Fund managers don't have many options for increasing assets. They need adequate funding from state legislatures, which in many cases they don't get. Beyond that, they're at the mercy of financial markets.

Easy Money

Typically, public pension funds put 60 percent of their assets in stocks, 30 percent in fixed income, 5 percent in real estate and the rest in riskier investments such as hedge funds and commodities.

That mix requires the nonbond assets to earn double-digit gains in order to reach expected rates of return.

The easiest way for retirement plans to increase cash is to issue pension obligation bonds. For the funds, that means borrowing money at no risk -- because the bonds are backed by taxpayers.

A government retirement plan can't go bankrupt, even if it's insolvent; state treasuries must put up the money if a fund runs dry.

What for retirement plans in the U.S. has been a simple solution -- issuing $50 billion in pension bonds --has become a growing headache for the public.

'Where Did The Money Go?'

"When the actuary is finished with his magic, where did the money go?" asks Jeremy Gold, who was one of the first actuaries to work for a Wall Street firm when he joined Morgan Stanley in 1985.

The answer, he says, is that future taxpayers may cover what fund administrators had hoped to get from investment returns.

For investors, these debt sales are similar to ordinary municipal bonds. Because both forms of debt are ultimately backed by taxpayers, credit rating firms give them high grades for safety. The difference for bondholders in states is that pension bonds aren't tax-exempt.

General obligation bonds are typically used to pay for construction of schools, hospitals and other public works; pension bonds just fund needy retirement plans. For that reason, Congress decided in 1986 that pension bond income should be subject to federal income taxes.

Government officials say they issue pension bonds believing that their fund managers can earn more money from investing the proceeds than what they have to spend in interest payments to bondholders.

'Risk Is Minimal'

The government of Puerto Rico borrowed $2.9 billion through pension bonds in 2008, betting that it could reap annual returns of 8.5 percent investing the money, while paying its bondholders 6.5 percent.

"The risk is minimal," says Jorge Irizarry, who was chairman of the Employees Retirement System of Puerto Rico from August 2007 through December 2008.

A political appointee, he departed after his party lost the governorship in November. Before working for Puerto Rico, Irizarry was an executive on the island at PaineWebber Group Inc., now UBS Puerto Rico, from 1986 to 1998.

So far, Puerto Rico's wager isn't paying off. The 8.5 percent expected rate of return has instead been a loss of more than $200 million, according to a Dec. 12 presentation by fund administrators to legislators.

'Turned Against Us'

"It was an arbitrage transaction, and the market has turned against us," says Carlos Garcia, former president of Banco Santander Puerto Rico, who replaced Irizarry as chairman of the pension fund in January. "I don't know if the benefits intended will be realized."

Actuaries consistently permit public pension funds to report artificially high expected rates of return -- most often 8 percent and as much as 8.75 percent. That's more than the 6.9 percent billionaire investor Warren Buffett sets for his Omaha, Nebraska-based Berkshire Hathaway Inc.'s pension fund.

"Public pension promises are huge and, in many cases, funding is woefully inadequate," Buffett wrote in his 2008 letter to shareholders. "Because the fuse on this time bomb is long, politicians flinch from inflicting tax pain, given that the problems will only become apparent long after these officials have departed."

Determining how much expected rates of return should be isn't complicated, says Rowe, who oversees Texas pension funds.

"Why do they choose high expected rates of return?" he says. "The only reason is to sneak through promising a lot to pensioners -- which means worrying about it later. It's madness."

The Rules

The Governmental Accounting Standards Board, a nonprofit group that provides guidance for accountants, has rules for financial reporting by public pension funds.

A study commissioned by the U.S. Senate Finance Committee, released on July 10, 2008, found that GASB guidelines could be meaningless.

"GASB operates independently and has no authority to enforce the use of its standards," the report said. Each state sets its own rules. The GASB rules don't mention pension bonds.

Illinois sold the largest pension bond issue ever, $10 billion in 2003, to shore up its state pension funds. In 2007, former Governor Rod Blagojevich proposed an even larger, $16 billion pension bond issue, as the state's unfunded pension liability exceeded $40 billion.

The legislature impeached Blagojevich in January after he allegedly sought bribes in return for filling President Barack Obama's vacant U.S. Senate seat.

Ignoring Advice

When the Chicago Transit Authority decided to issue debt in 2008, it did its own calculations.

The CTA concluded it could borrow $1.9 billion, paying an interest rate of 6 percent to bondholders, and invest the proceeds to receive its expected rate of return of 8.75 percent. Such an annual return would add $52 million a year to bolster the fund.

The CTA chose to ignore not only Illinois's auditor general but also its own actuarial firm, Detroit-based Gabriel Roeder Smith & Co. The company had determined there was just a 30 percent chance of earning 8.75 percent.

"We executed the best transaction we could, given the legislative and political restraints," says CTA Chairman Brown, who is also co-head of municipal finance at Chicago-based Mesirow Financial Inc.

Credit Crunch

Since the bond sale, the authority has held the money as cash, earning 2 percent. And, with the credit crunch forcing municipal bond interest rates up to attract buyers, the CTA wasn't able to sell bonds with a 6 percent return.

A team of underwriters, including Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley, sold the CTA bonds in August 2008, at a yield of 6.8 percent, so the fund had to pay bondholders more than it had expected.

"There is negative arbitrage," Brown says. "It's better than having dumped the money into the equity market."

The one group that benefits from the pension bond sales is the CTA's retirement plan members. The authority is responsible for contributing more than twice as much to the fund as its employees. Thus the retirees are virtually certain to enjoy pension contribution savings from the pension bonds, the auditor general's report says.

Puerto Rico Mistakes

Neither workers nor the government are thrilled with the public pension system in Puerto Rico. As of 2005, the Caribbean island's government pension, with 278,000 participants, had assets that totaled just 19 percent of its long-term liabilities. That made it less funded than any state retirement fund in the U.S., public records show.

Puerto Rico's pension system is a model for common mistakes made by public funds across the U.S.

Puerto Rico, a U.S. commonwealth with a population of 4 million, has underfunded its main public pension fund since 1951 to save cash.

The island, whose capital building in Old San Juan is as close to the turquoise ocean waves as are the tourists taking photos on the edge of the beach, is far from being a financial paradise.

The legislature has repeatedly ignored annual suggested contributions calculated by its own actuaries, according to the Employees Retirement System's records.

Boosting Benefits

Puerto Rico's legislature raised pension benefits without funding the increased expense 30 years ago. Edmund Garza, the retirement system's administrator from 1992 to 1996, says pensions were boosted from 45 percent of average salary to 75 percent after 30 years of employee service.

"They didn't prepare a detailed actuarial analysis to see the financial impact of this decision, but definitely it was huge," Garza, 47, says.

The government skipped nearly $2 billion in contributions urged by its actuaries from 2000 to '05, according to fund records. The pension system continued a course toward insolvency as it paid out more in benefits than it took in.

By 2005, the Employees Retirement System had $12.3 billion of pension obligations with just $2.3 billion of assets. Puerto Rico itself has a BBB- credit rating, one notch above junk, from Standard & Poor's.

"We are very near bankruptcy," says economist Jose Villamil, speaking of the commonwealth. He is founder of Estudios Tecnicos Inc., a San Juan-based economics consulting firm. "The budget is out of control; the treasury is in sad shape."

'Continue to Deteriorate'

In 2007, the actuary for the Puerto Rico fund, Hector Gaitan of Buck Consultants LLC, recommended that the legislature make an annual contribution of $564 million.

"The financial status of the System will continue to deteriorate," Gaitan said in a Feb. 12, 2007, letter to the pension board that urged a boost in commonwealth contributions.

The legislature ignored Gaitan's warning. It chose to put $398 million into the pension fund. Just months after Gaitan suggested bigger government contributions to the retirement system, the pension board dismissed Gaitan and his firm.

"Those comments may have gotten us in trouble," says Gaitan, seated at his desk in a small cramped office in a San Juan business park landscaped with palm trees. "We were terminated shortly thereafter."

Irizarry, who chaired the fund's board until Dec. 31, declined to say why the board dismissed Gaitan.

Outdated Mortality Tables

Gaitan says the retirement system's underfunding may actually be an additional $1 billion or more than the fund reports, because the board relies on outdated mortality tables based on 1960s statistics to compute its future obligations. The shorter life spans in those outdated tables reduce the apparent size of the fund's liabilities.

The legislature has taken one step to improve pension funding -- on the backs of employees hired after Dec. 31, 1999. New employees are denied fixed annual pensions. They must self- fund their retirement accounts.

The legislature diverts 9.275 percent of salary pension contributions for new workers to help scrape together the money needed to provide pensions for pre-2000 employees. By not making pension payments to employees hired after 1999, the pension fund will cut future liabilities.

The states of Alaska and Michigan, like Puerto Rico, have eliminated traditional public pension funds for new employees in the past 12 years.

Ana Reyes, an attorney in Puerto Rico, decided to take a job with the city of Caguas in 2008 so she could lock into a government pension.

'My Insurance'

"I wanted to have a good life when I get old," Reyes, 33, says. "That was my insurance."

Reyes, who lives in the island's Central Mountain Range 20 miles (32 kilometers) south of San Juan, says she didn't know that new employees get no retirement payments funded by the government.

"If I'd known this, I might have made a different career decision," says Reyes, who is the mother of a 2-year-old girl. "When I started here, they didn't explain that."

Even states that have had fully funded pensions --such as New Jersey in the 1990s -- now have retirement plans with fewer assets than future liabilities and aren't moving to plug the gaps.

Jon Corzine

New Jersey Governor Jon Corzine, a former co-chief executive officer of Goldman Sachs, has proposed allowing government pension funds to put off half their pension contributions because of the state's growing deficit during the recession.

Corzine's suggestion follows a recent New Jersey pension track record of mistakes. When the state's pensions were healthy in the 1990s, the state legislature eliminated nearly all of its annual pension contributions for almost a decade, while adding $4.6 billion of benefits.

New Jersey sold $2.75 billion of pension bonds in July 1997. Then-Governor Christine Todd Whitman said at the time that the bonds would save taxpayers $47 billion and make the system fully funded.

"You'd be crazy not to have done this," Whitman said in a Bloomberg News interview in June 1997. "It's not a gimmick. This is an ongoing benefit to taxpayers."

Whitman's prediction hasn't held up. While the state pays pension bondholders a fixed 7.64 percent interest rate, the fund has earned 4.8 percent annualized since the bond sale, according to Tom Bell, spokesman for the New Jersey Treasury Department.

'Outrageous Gimmick'

New Jersey's pension bonds haven't saved taxpayers $47 billion. To date, the state has lost more than $500 million on those bonds, according to state records.

"Governor Whitman came up with this outrageous gimmick in order to give people tax cuts," says Kramer, chairman of the board that oversees New Jersey state pension funds.

As the global economic crisis deepens, public pension funds will lose more money. The solution shouldn't be more accounting tricks, Kramer says.

"Virtually every pension system has suffered losses in excess of 20 percent since they created the last set of artificial numbers," he says.

The best step forward would be for states to negotiate benefits down, increase pension contributions and reduce the expected rate of return, Texas pension oversight board member Rowe says.

Public pension funds have to stop pushing the costs of retirement benefits for current workers into the future, actuary Gold says.

"You're putting a bigger burden on your children," he says. "It amounts to a transfer from tomorrow's taxpayers to today's employees."

For Related News and Information:

Cliff notes

Pensions and retirement funds are another ponzi scheme that will never be able to meet their obligations unless the stock market goes up parabolically or theyget bailed out by the government. What do you think Obama is going do? I bet he will take your money and give it to pay peoples retirements. Write theobligations down to the money they actually have to pay? NO WAY! who does the right thing now a days....

 

[throwedindagame]

@people blaming Obama.

This is like blaming a Captain for sinking a ship that already had a gaping hole in it before he took command.

Some of you guys act like you work for Goldman Sachs or have a Ph.D in macro-economics.

 

[theone2401]

Originally Posted by ThrowedInDaGame

@people blaming Obama.

This is like blaming a Captain for sinking a ship that already had a gaping hole in it before he took command.

Some of you guys act like you work for Goldman Sachs or have a Ph.D in macro-economics.

How does a Ph.D in economics help your credibility if the theories they teach you do not work? (Keynesian) And if the models you are able to create areinherently flawed?

How does being a Goldman Sachs employee help your credibility if they are one of the main culprits in creating these financial weapons of mass destruction?

stop drinking the kool aid. Unless of course you believe all of this is intentional and they are just appearing to be stupid.

Sad part is you probably dont see how you backed your self into a corner.Usually when people continuously mess up...you stop trusting them. But I guess that is just me.

 

[theone2401]

EU claims has solution to euro state default

By AOIFE WHITE - 16 hours ago

BRUSSELS (AP) - The European Union's top economy official said Tuesday that the 16 countries using the euro have a solution ready to rescue any member in danger of defaulting on public debt payments - but said it "is not clever" to give details in public.

EU Monetary Affairs Commissioner Joaquin Almunia said "the solution exists," and indicated that "it is possible and it is reasonable" for two euro countries to raise money by issue bonds together.

But he hedged that by saying such combined bonds were not "politically viable today because some important member states said no."

Germany has denied reports that it was weighing up issuing bilateral bonds with other nations - although German Chancellor Angela Merkel said last week that euro nations would "find ways of solidarity" if necessary.

Almunia said the euro zone's solution would kick in before a member nation needed to approach the International Monetary Fund for a bailout.

EU spokeswoman Amelia Torres said it was unlikely that any euro country will hit this kind of trouble.

But investors see the risk that euro-zone nations like Ireland, Spain, Portugal, Greece and Italy could default on debt payments because of the world economic slump and are charging them more to borrow through government bonds.

Almunia rejected speculation that any euro nation would quit the currency - a move that might allow it devalue its currency and stoke sluggish demand.

No government has raised the prospect of leaving the euro area - which would trigger a range of political and economic problems and undermine European efforts to join their economies.

"Who is crazy enough to leave the euro area? Nobody," Almunia said. "The number of candidates to join the euro area increases, the number of candidates to leave the euro area is zero."

The EU's executive Commission says that the shared currency has helped create a safe haven for member nations, increasing trade between them and helping shield them against the worst of the global financial crisis.

But he said he was concerned by recent exchange rate volatility, even though he welcomed the recent fall of the euro against the U.S. dollar.

Almunia said the current euro exchange rate of $1.26 was "within the range of what we can consider normal" because it fell between $1.20 to $1.30. He said the EU's executive still sees the Chinese yuan as undervalued.

He was more pessimistic about the economy after a raft of gloomy data indicated a bad start to the year. He said "downside risks are bigger" than January when the Commission forecast that the euro-zone would contract 1.9 percent this year and the entire European Union by 1.8 percent.

Almunia said governments needed to lay out plans to cut public debt in the longer-term to stabilize their economies.

But he said it was too soon for the European Union's 27 nations to consider follow-up stimulus programs to the plans they have already announced to stoke growth this year.

Existing spending plans cost 3.3 percent of the EU's gross domestic product, he said, including 1.1 percent of GDP for stimulus programs and 1.7 percent of GDP for 'automatic stabilizers' when governments spend more on welfare as the economy slows.

Copyright [emoji]169[/emoji] 2009 The Associated Press. All rights reserved.

We have a plan we just dont know what it is yet

This should instill someconfidence in the Euro Zone We are so screwed.

Cliff notes
Euro Zone is about to collapse and their top economic official says they have plan in case of the "worst case scenario" but they arent tellinganyone. Thank god these guys have P.h D's or we would be in real trouble

 

[banks2pierce]

Originally Posted by theone2401

Originally Posted by ThrowedInDaGame

@people blaming Obama.

This is like blaming a Captain for sinking a ship that already had a gaping hole in it before he took command.

Some of you guys act like you work for Goldman Sachs or have a Ph.D in macro-economics.

How does a Ph.D in economics help your credibility if the theories they teach you do not work? (Keynesian) And if the models you are able to create are inherently flawed?

How does being a Goldman Sachs employee help your credibility if they are one of the main culprits in creating these financial weapons of mass destruction?

stop drinking the kool aid. Unless of course you believe all of this is intentional and they are just appearing to be stupid.

Sad part is you probably dont see how you backed your self into a corner. Usually when people continuously mess up...you stop trusting them. But I guess that is just me.

Yea, it's acting. One of the best quotes ever is this: "the only function of the government is to pretend to fail."

 

[dey know yayo]

last post for a while, so listen up for my thoughts on market direction from here...

leading stocks that have held up very well since the crash are selling off hard on high volume and approaching or are at november lows. that's verybearish. i think a mini-crash is coming soon in equities, though we could get an oversold bounce for a few days first.

i think TALF opens up march 25... that's a $1 trillion credit expansion if i'm not wrong. that could hold the market up for a little while before theselling wave this summer.

deflation and deleveraging will reign king for most of 2009, but we could see the first signs of inflation this fall as fed-synthesized credit bleeds intoequities and commodities. the minute the fed stops issuing interest on banks' excess deposits (which are currently an unprecedented 8x required reserves bcof the fed's unprecedented policy) could also be the beginning of a huge expansion in liquid credit.

gold has already started rising on inflationary risk and as structural weakness in EUR, CAD, and AUD cause holders of those currencies to shift theirliquidity into safer havens. the exodus out of USD and JPY could finally begin this fall as deleveraging eases up and credit spreads start tightening.inflation could kick in around 2010 and really kick into full force 2011-2012, especially in europe. hyperinflation in ukraine, latvia, hungary, sweden, andmexico are possible. too early to tell but gold is a buy in a few weeks to months once it bases out after its double top at $1000/oz.

insurers are facing huge headwinds. pru and hig could end up like aig. european banks face huge selling pressures bc of eastern european crisis. cs, db, rbsall potential 0s. REITs are gonna go down big in 2009 as commercial real estate enters crisis, stocks like spg, vno, and bxp. airliners, same.

kids, eastern european debacle is just as bad if not worse than subprime (which western european banks already have to deal with). europe is toast. someeastern european nations may see hyperinflation in a few years. ukraine, latvia, hungary, romania just look horrendous. euro = toast.

america is pretty much immune because everyone bought into the $13 trillion ponzi scheme known as the US Treasury. i must say, however, obama is doing amuch less than spectacular job as staving off equity collapse, even worse than i thought he'd do. clearly there's little he can do, especially becausehe believes the solution is increasing government recklessly, but even given those premises, confidence has not improved. at the end of the day, the fed andtreasury will prevent any real collapse in america, tho we could see 15%+ unemployment rates in the not-so-distant future.

watch for civil unrest in europe (especially eastern part), north africa, persian gulf, and latin america in the next 4-5 years.

long: precious metals and miners on pullback. stocks like gg, rgld, gold, abx, aem, iag, jag, ng, bvn, etc.
short: Airliners
American Airlines (AMR)
UAL Corp (UAUA)
Delta Airlines (DAL)
Continental Airlines (CAL)
US Airways (LCC)

REITs
Simon Property Group (SPG)
Vornado Realty Trust (VNO)
Boston Property Group (BXP)
Brookfield Properties (BPO)
Equity Residential (EQR)
Kimco Realty (KIM)
HCP (HCP)
Public Storage (PSA)

Insurers
Allstate (ALL)
Metlife (MET)
Prudential (PRU)
Hartford (HIG)
China Life Insurance (LFC)
Principal Financial Group (PFG)
Loews (L)

Banks
Goldman Sachs (GS)
Morgan Stanley (MS)
Wells Fargo (WFC)
JP Morgan Chase (JPM)
PNC Financial (PNC)
M&T Bankcorp (MTB)
Comerica (CMA)

Educations
ITT (ESI)
Apollo Group (APOL)
Strayer (STRA)
New Oriental (EDU)

Securities Exchanges
CME (CME)
NYSE Euronext (NYX)
Intercontinental Exchange (ICE)

European Equities
Vodafone (VOD)
J Sainsbury (JSAIY)
RWE (RWEOY)
Telefonica (TEF)
Deutsche Bank (DB)
Credit Suisse (CS)
UBS (UBS)
Royal Bank of Scotland (RBS)
Societe Generale (SCGLY)
Telenor (TELNY)
BNP Paribas (BNPQY)
Allianz (AZ)
Itrion (ITRI)

 

[dey know yayo]

Oh and also for all of you morons out there...

CAPITALISM/FREE MARKETS DID NOT CAUSE THIS CRISIS. GOVERNMENT INTERVENTIONALISM/MICROMANAGEMENT/SOCIALISM DID.

For all of you ultralibertarian conspiracy theorists out there...

A SUDDEN RETURN TO FREE MARKETS IS NOT THE SOLUTION EITHER. LIBERTY IS IRRELEVANT IF THERE ISN'T PUBLIC ORDER FOR THE LIBERTY TO EXIST.

www.naufalsanaullah.com

 

[finnns2003]

thanks for the info DKY. because i hold most foreign currency as yen, any quick thoughts on japan's economy?

 

[tbone95860]

Originally Posted by SunDOOBIE

Originally Posted by NostrandAve68

Originally Posted by SunDOOBIE

Originally Posted by wizards23

and he is messing up badly as each day goes by.....

Dow Jones
on Jan 20 - 7,949.09
today Mar 2 - 6,763.29

Went down by 1,200 points in just over a month. I just filed my paperwork to stop contributing to my 401(k). Freaking pointless.

Dow Jones Jan 22nd, 2008 - 12,207.
Dow Jones Jan 20th, 2009 - 7,949.

Obama's fault aswell huh

Where did I post that all this was Obama's fault? Since Jan 20th the dow went down 15%. That's a fact.

However you don't have to be a rocket scientist to realize that Obama's decisions, actions and inactions since being elected drove the DOW even lower. Obama is just following Bush's footsteps. Obama is no different to the mess we had with Bush. So now instead of all these moronic Bush supporters that refuses to realize fact from fiction and whom continue to blame Clinton for Bush's mistakes, I am now seeing the same with Obama supporters who will blame Bush no matter what their mesiah does.

Pathetic.

SunDoobie........

these remarks....... plus the remarks about the troops........ I never would have imagined you making these remarks about Obama.

You're really changing my mind about you. You're a respectable guy for the fact that you're looking at it (Obama) OBJECTIVELY. Kudos.

 

[dey know yayo]

oh and everyone keep following wawaweewa's posts. he knows his stuff.

finns- japan's economy is contracting huge bc its exports are getting killed. the yen carry trade held it up for a while but as the deleveraging andunwinding finally comes to a close (maybe this fall), the yen could get hit hard bc of the low interest rates and quantitative easing in japan. i think thedollar may overtake the yen as the best of the worst (fiat currencies) soon.