Wall Street took a bit of a nosedive today ....

And so ...

"More Rensselaer County residents turning to government assistance"

September 30, 2009 4:00 PM

Michelle Kim

TROY -- More Rensselaer County residents are relying on government assistance and consequently putting a strain on the county's funds, county executive Kathy Jimino said today.

County residents are increasingly relying on state and federally mandated assistance programs that are administered and in almost all cases partially funded with local tax dollars, said Jimino.

Those programs include Medicaid, Temporary and Family Assistance, Safety Net and food stamps.

From August 2008 to August 2009, the number of Medicaid recipients has risen 8.2 percent from 20,836 to 22,545, according to Jimino.

Total individuals receiving Temporary Family Assistance has risen from 1,983 to 2,273, an increase of 14.6 percent.

Individuals receiving support under the Safety Net Program increased from 620 to 759, an increase of 22.3 percent.

And the number of individuals qualifying for food stamps has risen from 12,861 to 15,286, an 18.9 percent increase.

The mandated programs is forcing the county to dip into its own taxpayer dollar pool to fund those state and federal programs, said Jimino.

"As those relying on the programs increase, so does the mandated expense to the county and our property taxpayers," she said.

Over 90 cents of each tax dollar collected in Rensselaer County goes to pay for the programs mandated by the state and federal programs, leaving under 10 cents of every local tax dollar to fund programs including but not limited to the sheriff's road patrol, county highway and bridge maintenance, as well as senior and veterans services, said Jimino.

MARKETWATCH

"No rush to tighten, Atlanta Fed's Lockhart says"

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) -- There is no rush for the Federal Reserve to begin to tighten monetary policy, said Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, on Wednesday.

"I think it may well be some time before a comprehensive exit need be under way," Lockhart said in a speech in Mobile, Ala.

There has been much speculation in financial markets and economic circles about the U.S. central bank's so-called "exit strategy" -- when and how it will start winding down the stimulus and liquidity measures implemented to battle the financial crisis that took hold a year ago.

Worries that the Fed's credit-easing policy, which has expanded bank reserves, will fuel inflation are exaggerated, Lockhart said.

He conceded there are signs of recovery but said it remains uncertain when the U.S. economy can begin growing again without the benefit government stimulus.

"Assuming stable inflation, I would like to see more evidence of private activity in the economy before advocating change in the Fed's overall monetary-policy stance," Lockhart said.

Analysts have been listening particularly closely to Fed officials for hints of how it plans to unwind purchases of longer-term securities and eventually raise rates now that there are signs that the recession is, at least technically, at an end.

Late Tuesday, Charles Plosser, the president of the Philadelphia Federal Reserve Bank, said he didn't think the time to tighten had arrived.

Lockhart is a voting member of the Fed's monetary-policy committee this year.

Plosser won't be a member until 2011.

In his remarks, Lockhart said that economic vital signs are mixed among the evidence suggesting a recovery.

"There are pluses and minuses, positives and negatives," he said.

"The flow of credit through the U.S. banking system is not yet approaching anyone's notion of normal," Lockhart said.

The banking system is healing but it will take time, he added.

Lockhart said the Atlanta Fed was raising its estimates for near-term growth but remains cautious about the medium term.

"To elaborate, I see as uncertain the time required for the housing market to return to health, the potential commercial real estate drag on the financial system, the sustainability of recovery in the absence of government supports, and the resurgence of private demand," Lockhart said.

Greg Robb is a senior reporter for MarketWatch in Washington.

http://www.marketwatch.com/story/feds-in-n...says-2009-09-30

Well, that kind of decisiveness from a respected member of the FED pretty much cinches it for me ....

Tomarrow, I'm going to go to the bank and see if they will lend me a couple of million with zero interest so I too can go and gamble in the stock market ...

I mean, here is this FED dude saying in no uncertain terms that the recession is over ....

So now must be the time to get in ...

And so ...

The current account in the second quarter was $99 billion, which means the U.S. needs to borrow more than $1 billion a day.

- MARKETWATCH, Oct. 1, 2009, 12:41 p.m. EDT, "Bernanke: A new super-currency would weaken the dollar" By Ronald D. Orol & Nick Godt, MarketWatch

http://www.marketwatch.com/story/bernanke-...llar-2009-10-01

HERE IS A REAL SURPRISE, ALRIGHT ...

"Sept. US auto sales fall amid clunkers letdown - Clunkers hangover hits automakers; only Hyundai posts higher sales among big car companies"

By TOM KRISHER and DAN STRUMPF, Associated Press

Last updated: 6:55 p.m., Thursday, October 1, 2009

DETROIT -- A Cash for Clunkers hangover hit every major automaker except Hyundai last month, pushing down sales and leaving the industry searching for signs of a recovery in October.

U.S. sales of cars and light trucks fell to just under 746,000 in September, down 41 percent from August.

Both GM and Chrysler were the biggest losers last month, while Ford, the healthiest of the Detroit Three, reported the smallest drop of major automakers.

Of the top companies, only Hyundai posted higher sales, up 27 percent from September 2008.

Last month's slump brings car and truck makers back to earth following a heady August.

Automakers got a lift from clunkers, which spurred sales of nearly 700,000 new vehicles during the summer months.

Big rebates lured in many buyers who otherwise would have waited until later in the year to walk into dealerships.

Still, both GM and Ford said the clunkers letdown should pass by next month.

They also forecast a slight recovery in sales with signs of economic improvement.

October, however, is traditionally a slow month for sales.

On top of that, shoppers are guarding their wallets, worried about keeping their jobs in a fragile economy.

The question remains whether dealers can really lure them back and help the industry recover over the remainder of the year.

Higher incentives didn't shake buyers from their September slumber.

Automakers spent an average of $2,557 per vehicle in the U.S., up $83 from August, according to the auto Web site Edmunds.com.

"After five straight months of decline, incentives are on the rise again," Edmunds analyst Jessica Caldwell said.

"Now that Cash for Clunkers is over, automakers have to give consumers an incentive to buy -- out of their own pockets, not the taxpayers'."

Ford Motor Co.'s sales fell 5.1 percent, but the decline followed two straight months of rising sales.

Two of the Dearborn, Mich. company's vehicles -- the Focus and Escape -- were top sellers in the clunkers program.

General Motors Co.'s sales plunged 45 percent while Chrysler Group LLC's fell 42 percent.

The weak results continued a string of monthly sales drops for the troubled pair.

Now the question is whether their government-funded recovery plans are working.

Sales fell in every GM division.

Saturn led the way with an astounding 84 percent decline in September, the same month GM announced plans to abolish the brand after its sale to former race-car driver Roger Penske collapsed.

"It was a more difficult month than we anticipated," said Mark LaNeve, GM's vice president of U.S. sales.

A spokeswoman for the U.S. Treasury Department, which has provided roughly $65 billion to keep GM and Chrysler going, would not comment on the sales figures.

Most automakers reported low inventories during September but said production increases were starting to replenish them.

GM's LaNeve said last month sales were compared with a strong September in 2008 when GM offered employee discounts to every customer in celebration of its 100th birthday.

With easier comparisons, October will show better results.

He said the company could have had stronger September sales but it was struggling to keep up with demand for newly launched vehicles such as the Buick LaCrosse sedan, Chevrolet Camaro sports car, and the Chevrolet Equinox crossover vehicle.

GM could have sold 10,000 to 12,000 more car and light trucks had it been able to get them to dealers in September.

Japan's Toyota Motor Corp. said sales fell 13 percent while Nissan Motor Co. said its sales eased 7 percent.

Honda's sales dropped 20 percent.

Toyota blamed its sales drop on low stocks, and also said it was confident of a recovery through the rest of the year.

Automakers also reported that luxury car sales were starting to show life, another sign of recovery.

Toyota's Lexus line saw a 12 percent sales increase in September, which the company attributed to several new model launches.

Last month's sales, if projected for an entire year, dropped to 9.2 million vehicles, far less than the clunker-fueled 14.1 million reported in August, according to Autodata Corp.

------

Dan Strumpf reported from New York. AP Auto Writers Kimberly S. Johnson in Detroit and Bree Fowler in New York contributed to this report.

People wonder why the housing market hasn't improved after all the
bail-outs all the promised refinancing of mortgages...all the "green shoots" talk.

Well, the facts are that government has made it more profitable to slow foreclosure
to gain as many "fees" as possible, while not refinancing a thing. Lenders can't
lose as much as they can make because taxpayers (you and me) gaurantee the loans!


Thursday, October 1. 2009
Posted by Karl Denninger in Housing at 12:32

US Senate: STOP BEING STUPID

Dick Durbin is once again flapping his gums instead of actually addressing problems:

The legislation, introduced today by Senator Jack Reed of Rhode Island, would require lenders to evaluate
all borrowers for affordable loan modifications before initiating foreclosure. It would also require banks to offer
and approve a loan modification if the restructured mortgage returns more money, the so-called net-present value,
to investors than would foreclosure.

The proposal would establish new penalties and would let borrowers overturn foreclosures
if lenders fail to comply. It would also place new limits on fees charged in foreclosure.
The reason we have this crap going on is quite simple, and fixing it is also quite simple:

Banks are holding homes back and foreclosing when they should be modifying as a direct consequence
of the policies and actions of the government.

As just one example the "loss share" agreement made with the buyers of IndyMac has set up a
perverse incentive system where the usual incentives to modify loans have been intentionally and wantonly destroyed.

If you remember this was the deal announced:

As part of the deal, the FDIC entered into a loss-sharing agreement with IMB HoldCo. IndyMac will assume
the first 20 percent of losses on a portfolio of "qualifying loans," after which the FDIC will assume 80 percent
on the next 10 percent of losses, and 95 percent on losses thereafter.

Ok, so we have a maximum loss that the investors (which include George Soros and Michael Dell, by the way) can take which is:
20% + 2% (80% of 10%) + 3.5% or about 25% of the total is theirs - but note that "theirs" is all at the top - once you get into the
"meat" of the losses only 5% of whatever is left is theirs.

Here's the problem: As part of the deal they also get to write down the portfolio as of the date of the deal.
They took that, taking roughly a 25% mark against the assets at purchase (in other words, they bought
$20.7 billion of assets at a discount of $4.7 billion)

Now here's the issue - in a deteriorating market the incentive to modify a loan exists only when the loss on a foreclosure
will be materially higher than the loss on a modification.

But if someone "else" (like THE TAXPAYER) will eat (almost all, in this case, essentially 95% of) the loss,
then your incentives shift - in a big way.

See, if you modify, you stop earning "fees" on the delinquent note. You can't charge late fees any more,
you can't charge "special servicing costs" and similar types of things that you can (and do) get to add to a delinquent note
that is "headed for foreclosure." These are all immediate cash - and they're all yours, never mind that if just 1 in 10 of these
notes "cures" (after you hound the living hell out of them to pay somehow by hook or crook) you win huge since you got to buy at a 25% discount up front!

These "incentives" to NOT modify are usually outweighed by the much higher loss you'd take if you foreclose.

BUT THESE FOLKS ARE PROTECTED BY THE "LOSS SHARE" AGAINST ANY MATERIAL AMOUNT OF LOSS (95% IS EATEN BY SOMEONE OTHER THAN THEM!)

So now the incentives are wildly tilted toward them telling borrowers to go stuff it up their backside, and they are.

These "loss share" deals are a big, big problem.

It gets worse.

Regulators are refusing to force a mark-to-market on this paper. We continue to see banks fail where the
FDIC reports 20, 30, 40, up to nearly 50% losses, with some sector-specific losses of 60%! Colonial, again,
had a 39% realized loss against their balance sheet claimed values when BB&T came in and purchased them.

The argument for permitting cost-basis (or other forms of "mark to mythology") accounting is that the market price is in fact "not real."

That's a nice fantasy put forward by the banking industry and lobby but we now have nearly 100 bank failures under our belt
and in fact the market price seems to be about where these things wind up - putting the lie to any claim that market prices
are "too pessimistic." Indeed I have yet to find one instance of a failed institution where balance sheet values ended up being
too pessimistic once the regulators came in and started selling things off.

Such "extend and pretend" games, in addition to the ridiculously false view this presents of a financial institution's balance sheet
effectively precludes either modification or foreclosure and resale of the property, because either of those events "finalizes"
any embedded and hidden loss and thus forces a mark to be taken. That could be a wee problem if the bank or other institution
doesn't have sufficient capital to absorb these losses, never mind the hit to so-called "earnings" even if they do have the money.

The reason banks are not modifying loans in good faith and are playing these games is because the regulators
AND LAWMAKERS are PERMITTING THEM TO LIE and HIDE losses.

Then, in compounding the error they are entering into "loss share" deals where there is NO INCENTIVE to modify
because on a strict financial analysis IT IS MORE PROFITABLE TO "PURSUE FORECLOSURE" since the loss differential
IS NOT THEIRS while the fees they can earn from NOT modifying ARE!

Finally, adding insult to injury you have the impact on local and state governments - these properties are not paying property taxes
either, being in arrears in some cases by as much as two years. Yes, this will eventually be recovered via tax certificate sales but
the state and local governments deserve to get paid NOW - not five years down the road, when the cause of the delay and
non-payment is intentional game-playing by regulators and banks.

Folks, this is really simple: If you want to see those modifications that make sense get done, including but not limited
to principal forgiveness where it makes sense, and foreclosures to be prosecuted and properties resold at the market,
thereby clearing it, you need to do the following:

Force recognition of past-due loans on their current recovery value - all of them - as soon as they go past due.

Force banks to foreclose on all loans more than 90 days past due in a diligent fashion. To punish failure to do so
provide that a foreclosure not diligently-prosecuted results in a clear deed being conveyed to the homeowner
(that is, 100% loss to the bank!) That will get their attention - FAST.

Force banks to sell into the market at absolute auction all property held by them no later than 90 days after foreclosure.
They get 90 days to market privately for a higher price, after which it goes to the courthouse steps.

Force ALL off-balance sheet exposures onto the balance sheet immediately, and prohibit as a matter of law the hiding
of exposures off balance sheet (such as the infamous Wachoiva CDS)

In short if you want modifications that make sense to happen you have to stop making it profitable for banks to play games
with the accounting so that they are forced to recognize losses as they are realized in the market rather than hiding them
in the hope that they will magically "self-cure" (when the data says that is a statistical impossibility.)

You must also get rid of the perverse incentives that make it more profitable for the corporate raiders -
who have been given a "no lose" proposition in their acquisition prices - to foreclose instead of making sustainable modifications.

As for the States, I have a solution there too - and perhaps that's where we should focus our ire, since we can't seem
to get anyone's attention in Washington DC given all the bribed, er, "lobbied" lawmakers.

Change state tax certificate laws. Sell off delinquent taxes in the fall following the delinquency (assuming a spring "due date")
thereby putting the certificate in someone's hands six months after non-payment and shorten the allowed redemption ("cure")
period to 12 months - after which the certificate holder can pay the delinquent taxes in full and gain a clear title. This will put an
immediate stop to banks refusing to foreclose or dispose of delinquent properties, leaving them vacant (since they will wind up losing
them to a tax sale) and it will stop the bleeding at the state revenue level. As a beneficial side effect it will force a clearing of the
market and re-establish occupancy, maintenance and upkeep of these homes.


----------------------------------

The idea is that banks have consolidated to become "too big to fail" and have developed such complicated systems
(investment vehicles, bail-outs and gaurantees from government, and fees for "services") most don't even take the
time to read about what is happening...most just "hope" the "change" they voted for will take care of them...it's not.


Now I'm waiting for the CBO to figure the price tag on the Senate Finance Committee's form of health care...Lord help us.

YEAH, RIGHT ....

In whose lifetime is that going to happen?

AND IN THE MEANTIME ...

"Generous pay for new Freddie Mac CFO - Pay package for new Freddie Mac CFO is sending a disturbing message"

By RACHEL BECK, Associated Press

Last updated: 12:37 p.m., Friday, October 2, 2009

NEW YORK -- The pay package given to Freddie Mac's new chief financial officer should have sent a message from Washington to corporate America about how executive compensation standards must change.

Instead, it did just the opposite.

The government-controlled mortgage finance company is giving CFO Ross Kari compensation worth as much as $5.5 million.

That includes an almost $2 million cash signing bonus and a generous salary that could top $2.3 million.

The Federal Housing Finance Agency, which oversees Freddie Mac, approved the pay package.

A spokeswoman pointed to a statement that justified the agency's approval of the pay, which was done in part because the amount was comparable to what others in the financial services industry make.

That way of thinking is exactly what helped feed the surge in executive pay over the last decade.

Everyone wants to make at least as much, or more, than their peers.

Freddie Mac is not just another company.

It's alive today, and nearly 80 percent owned by the government, only because almost $51 billion in taxpayer funds were pumped into it over the last year.

More bailout money also may be needed in the quarters ahead as losses from its troubled mortgages mount.

Outside pay experts are outraged.

"We are in a period when this shouldn't be acceptable," said Paul Hodgson, a senior research associate at The Corporate Library, an independent corporate governance research firm.

"Even if pay is competitive to the market, that doesn't make it OK today."

Lawmakers, regulators and corporate directors have spent the last year talking about how to "fix" executive pay following the outcry over what many Americans deem as excessive compensation.

Banks have come under fire for paying top executives big bonuses, which many see as encouraging excessive risk-taking and a focus on short-term results.

The Obama administration also has proposed giving shareholders of all public companies a nonbinding vote on compensation.

Financial companies that receive bailout funds under the $700 billion Troubled Asset Relief Program, or TARP, are bound by rules on compensation.

So long as they hold the government money, they can't pay cash bonuses to top executives, retention awards to top managers or stock compensation subject to performance-based vesting.

Freddie Mac doesn't have to follow those restrictions because its government aid has come from outside TARP.

Instead, Freddie Mac and its sibling, Fannie Mae, operate under "conservatorship" of the U.S. government after being crippled by losses last year.

That was done because of the vital role both companies play in the mortgage market by purchasing loans from lenders and selling them to investors.

Together, they own or guarantee about half of all U.S home mortgages.

The McLean, Va.-based Freddie Mac has been without a permanent CFO for more than a year, when its two top executives stepped down as part of the government takeover in early September 2008.

Acting CFO David Kellermann committed suicide in April.

Given the close government control over Freddie Mac, the pay package for its new CFO could have been held up as an example of reasonable compensation.

Instead, his pay package doesn't reflect much restraint.

When Kari joins Freddie Mac on Oct. 12, he will receive a base salary of $675,000 and is entitled to an additional $1.66 million in cash for the year.

The company said Kari will be paid in installments, but did not specify the timing of those payments in a Sept. 24 securities filing.

The company declined to comment beyond the filing.

Kari will also receive performance-based pay at the board's discretion.

The target amount for that cash compensation is $1.16 million, but what is actually given to Kari could be higher or lower.

His cash signing bonus totals $1.95 million and will be paid out in semi-monthly installments over the year.

That money is supposed to cover what he forfeited in stock options and grants when he left Fifth Third Bancorp, where he served as CFO since last November.

Freddie Mac also said it would immediately allow him to sell his home to the company, waiving a 60-day offer period that is required for other executives.

It did not, however, specify which of his homes would be covered; Kari has residences in Ohio, Oregon and Washington State, according to the filing.

No doubt that Kari is an able executive and has a hard task at hand.

Before his 10-month stint at Fifth Third, he worked in the executive ranks at the insurance company Safeco and Wells Fargo.

Freddie Mac's regulator, the FHFA, highlighted his qualifications in a statement it made after the pay package was disclosed.

The agency said the approval of Kari's pay was done after consulting with the Treasury Department.

The FHFA declined further comment, and the Treasury Department didn't return a request for comment.

In its statement, FHFA also said that Kari's hire came at a "critical time for our nation's economy and for the company."

A better approach for Kari's compensation would have been to require him to wait at least three years to receive a bulk of his compensation, instead of allowing him to get as much as 80 percent of it in cash over one year.

"It's that kind of pay package that got us into trouble in the first place, because it encourages short-term thinking," said Richard Ferlauto, director of pension and benefits policy for the American Federation of State, County and Municipal Employees, a Washington-based labor group representing government workers.

At Fifth Third, Kari's yearly salary was $580,000 and he received a $100,000 signing bonus.

He also received a restricted stock grant of 20,000 shares and 40,000 stock appreciation rights, both of which would have vested after four years but were terminated once he left the Cincinnati-based bank.

Had he stayed at Fifth Third, he would not have been able to cash out of his equity compensation until the bank repaid the $3.4 billion in TARP funds it received.

But Carol Bowie, head of the Governance Institute at RiskMetrics Group, a financial risk management firm, notes that his cash signing bonus at Freddie Mac effectively allows him to accelerate his receipt of equity he forfeited when he left Fifth Third.

Bowie acknowledges that attracting top talent is critically important to a troubled company like Freddie Mac, and supports the idea of executives being paid for their skills.

But she also thinks figuring out what's fair in pay doesn't mean sticking with the bad practices from the past.

------

Rachel Beck is the national business columnist for The Associated Press. Write to her at rbeck(at)ap.org

"This recovery looks like roadkill," said Christopher Rupkey, economist at Bank of Tokyo-Mitsubishi.

"The heavy layoffs have stopped, but there are simply no new jobs available, and the harder the jobs are to get, the harder and longer this road to recovery is going to be."

- "Despite recovery, employers aren't ready to hire - Jobless rate heads for 10 percent; employers skeptical of recovery aren't ready to hire" By JEANNINE AVERSA and CHRISTOPHER S. RUGABER, Associated Press, Last updated: 5:45 p.m., Friday, October 2, 2009

WikiAnswers - How much is the army signing bonus
Uncategorized question: How much is the army signing bonus?
For a 11B Infantryman from $3000-$20000 based on education, ASVAB score and record.

...and I'm too old to get that...

your insurance is almost free
that is eqhivelant to $30,000 for those who are self-employed
Instead of whining, you should thank God and Obama yours is so cheap

THAT IS TOTALLY F***ING RIDICULOUS, graham, thirty grand a year for health insurance ....

What doofus would pay that kind of money?

I used to have a bidness, graham, with employees, and I provided health insurance for them OUT OF MY POCKET, and it cost me nowhere near thirty grand a year ...

If it was going to cost me thirty grand for insurance, then I would go without and take my chances, which is what I have to do, anyway, already ....

BECAUSE FREE GUMMINT HEALTHCARE THROUGH THE VA IS WORTH JUST WHAT YOU ARE PAYING FOR IT, WHICH IS NOTHING ....

And so ...

And how much of that thirty grand is for taxes to the state and federal governments on health insurance plans, graham?

About fifteen grand would you say?

And how much goes for profits?

About fourteen grand?

And so ...

OBAMA KEEPS GRASPING AT MORE AND MORE STRAWS HERE, AND WHILE HE DOES SO, HE KEEPS BLOWING MORE AND MORE HOT AIR ....

WHAT HE IS SAYING HERE ABOUT ENTREPRENEURS FEARING TO CHANGE JOBS BECAUSE OF HEALTH INSURANCE IS A BUNCH OF CRAP ....

I KNOW A PERSON JUST SO AFFECTED AND HE HAS INSURANCE THROUGH COBRA ....

SO ALL OBAMA IS DOING IS SHOWING HIS OWN IGNORANCE PLUS A PROPENSITY TO BULL**** US AS IF WE WERE ALL STUPID CHILDREN SITTING AT HIS KNEE ...

And so ...

"Obama links job growth to health care proposal"

By CHARLES BABINGTON, Associated Press Writer

3 OCTOBER 2009

WASHINGTON – President Barack Obama says passage of his health care proposals would create new jobs by making small business startups more affordable.

In his weekly radio and Internet video address Saturday, the president linked one of his biggest challenges — a worse-than-expected loss of jobs — with a top priority: passage of far-reaching changes to the nation's health care system.

If aspiring entrepreneurs believe they can stay insured while switching jobs, Obama said, they will start new businesses and hire workers.

He said he has met people "who've got a good idea and the expertise and determination to build it into a thriving business."

"But many can't take that leap because they can't afford to lose the health insurance they have at their current job."

Small businesses create many of the nation's jobs, the president said, and some have the potential to become big companies.

Obama praised the Senate Finance Committee for crafting a health care bill that includes many of his priorities.

Small businesses could buy health insurance through an exchange, he said, "where they can compare the price, quality and services of a wide variety of plans."

The government would subsidize health insurance for many businesses and individuals, the president said.

Obama acknowledged that a health care bill is far from final passage in the Democratic-controlled Congress.

The Senate Finance bill will be merged with another version and sent to the Senate floor, where scores of amendments might be offered and Republicans could mount a filibuster.

The House, meanwhile, is advancing a more liberal bill that includes a public option to compete with private health insurers.

The Senate Finance Committee rejected that idea.

Obama said "reforming our health insurance system will be a critical step in rebuilding our economy so that our entrepreneurs can pursue the American dream again and our small businesses can grow and expand and create new jobs again."

In the weekly Republican address, Rep. Candice Miller of Michigan blamed the continued job losses on Democratic policies and said Obama's health proposals won't help.

Miller said the Obama-backed $789 billion economic stimulus package fell far short of its goals.

And she criticized a House-passed energy bill that would set limits and costs on greenhouse gas emissions.

The plan, which the Senate has not taken up, "would increase electricity bills, raise gasoline prices and ship more American jobs overseas," Miller said.

She called for deeper tax cuts for small businesses "to put our economy back on track."

As for health care, Miller said, "Washington Democrats intend to fund their government-run health care plan with cuts to Medicare benefits" and with new taxes on businesses.
___

On the Net:

Obama's address: http://www.whitehouse.gov

The Republican address: http://www.youtube.com/RepublicanConference

THOSE WITH THE MONEY AND CONNECTIONS TO PAY THE BRIBES ....

And so ...

As for the rest, they shall get to pay for those subsidies ....

And so ....

Getting rid of government corruption is the very first thing that is needed to rebuild our economy ....

And so ...

"Benefits likely to lag for state's unemployed - U.S. Senate's failure to pass extension will impact New Yorkers"

By CHRIS CHURCHILL, Business writer, Albany, New York Times Union

First published in print: Saturday, October 3, 2009

ALBANY -- Haggling in the U.S. Senate is likely to interrupt the unemployment benefits received by about 40,000 New Yorkers, who are looking for work amid the highest national unemployment rate in 26 years.

The House has already passed a bill that would extend unemployment benefits for 13 weeks in states with unemployment rates of at least 8.5 percent, which includes New York.

But Senators from low-unemployment states balked at being left out of the extension, meaning the measure couldn't garner enough support to pass.

New Hampshire Democratic Sen. Jeanne Shaheen said on Friday that she would seek next week to give at least another 13 weeks of unemployment benefits to workers in all states.

Patricia Smith, commissioner of the New York Department of Labor, said the Senate's failure to pass an extension on Friday would almost certainly delay the checks received by New Yorkers, including more than 1,000 people in the Capital Region.

"We're going to see a lag in benefits," said Smith.

"People's benefits are running out this week."

Smith said she was confident Congress would eventually agree on an extension, but she said that for many New Yorkers the payments would not be "seamless."

The Senate debate occurred as new numbers from the U.S. Department of Labor showed continuing job losses.

The unemployment rate rose to 9.8 percent in September, up from 9.7 percent in August.

That's the highest national rate since June 1983 and a sign that employers are still cutting jobs.

"We're shedding jobs," Smith said at the Labor Department's job resource center on Washington Avenue at Albany.

"I don't when we're going to see an increase."

Those words weren't encouraging to those who had arrived at the resource center to check job listings.

But many of those folks already know how tough the job market is.

"The job hunt is very challenging," said John Pinkney, an unemployed 32-year-old from Albany.

"Every job you go to there's at least 15 people who have been there ahead of you."

The Labor Department said Friday that the economy lost a net total of 263,000 jobs last month, from a downwardly revised 201,000 in August.

Still, many economists say the economy is improving, even if it's not being reflected in the job numbers.

"This is just a slow recovery," said Anthony Riccardi, an economist in Albany who doesn't expect a quick jobs turnaround.

"It's just a slow and painful process."

All told, 15.1 million Americans are now out of work, the department said.

And 7.2 million jobs have been cut since the recession began in December 2007.

Chris Churchill can be reached at 454-5442 or by e-mail at cchurchill@timesunion.com. The Associated Press contributed to this story.

People are looking for the American Dream in crack pipes up here where I am, Obama ....

I think that it is way past time for these politicians to scrap that hackneyed phrase "THE AMERICAN DREAM" ......

Tell people in America to start living THE AMERICAN REALITY, instead ...

YOU WANT MONEY IN YOUR POCKET?

STOP THE F***ING GAMBLING ON LOTTO AND POWERBALL AND CASINOS AND WORK FOR IT ...

And don't expect endless GIVE-AWAYS from Obama and the DEMOCRATS, because the rest of us in America are being taxed to death to pay for it and the OBAMA FREE RIDES ...

And so ...

G4A can't help it...he believes the former head of Goldman Sachs should remain
governor in the highest taxed state in the country, and Obama is the Messiah.

Meanwhile...going forward...remember prior comments about banks?

To those I add a question:


It's late, do you know where your money is?

First, to the continuing collapse of regional and local banks that are not "to big to fail".

http://www.bloomberg.com/apps/news?pid=206...id=aPV9iy8dmGo0

Three U.S. Banks Close, Bringing Failure Toll This Year to 98

By Dakin Campbell

Oct. 3 (Bloomberg) -- Banks in Minnesota, Michigan and Colorado were shut by regulators,
bringing this year’s toll of U.S. failures to 98 amid the worst financial crisis in more than seven decades.

Jennings State Bank of Spring Grove, Minnesota, and Warren Bank of Warren, Michigan, were closed
by state regulators and the Federal Deposit Insurance Corp. was named receiver, the agency said yesterday
in statements on its Web site. Southern Colorado National Bank of Pueblo was closed by the
Office of the Comptroller of the Currency, the FDIC said.

“Deposits will continue to be insured by the FDIC,” the agency said. “There is no need for customers to change
their banking relationship to retain their deposit insurance coverage.”
Regulators this year have closed the most banks since the savings-and-loan crisis of the early 1990s
as lenders struggle with mounting losses on real-estate loans. U.S. job losses accelerated last month
as the unemployment rate climbed to the highest level since 1983.

U.S. payrolls dropped by 263,000 in September, exceeding the median forecast in a Bloomberg survey,
the Labor Department said yesterday. The jobless rate rose to 9.8 percent from 9.7 percent in August,
while working hours matched a record low.

The FDIC deposit-insurance fund has been depleted by 120 bank failures in the past two years.
The agency proposed asking banks to prepay three years of premiums to raise $45 billion.
Yesterday’s failures cost the fund $293.3 million.
...
-------------------------------------------------

Some people, therefore, have started to wonder...is the FDIC a bottomless pit?
Or maybe, just maybe we are in a bailout bubble...obscured by a mirage?

-------------------------------------------------

http://www.marionstar.com/article/20091004/NEWS01/910040314

Local funds moved from bank due to FDIC order

By JOHN JARVIS • The Marion Star • October 4, 2009

Marion City Schools withdrew approximately $5 million from The Ohio State Bank on July 13
after bank officials informed the school district the bank could not accept any additional
public investment, City Schools Treasurer Bob Wood said.

"We just wanted to protect the public dollars, which is always the utmost, important thing to do,"
Wood said, adding that bank officials were "more than professional" in alerting the district to the bank's situation.

Marion County has $5,923,313 in Ohio State Bank, one of several banks in which it has deposited a total
of $12 million to $15 million, County Treasurer Jan Draper said.

The county has withdrawn $1,717,513 in certificates of deposit that have matured and due to state law,
which prohibits the investing of public funds in a bank under a cease-and-desist order, will withdraw its
remaining CDs as they mature, the last one scheduled to mature in July 2010, she said.

Mike Lamping, Ohio State Bank president, chairman and chief executive officer, said the withdrawals
haven't had a significant effect on the bank's efforts to fulfill the requirements of the cease-and-desist order
issued Aug. 7; the FDIC ordered the bank to build its capital ratio to at least 6.5 percent and its total
risk-based capital ratio to at least 10 percent within 180 days.

"It doesn't really impact it at all because we planned for it to happen," Lamping said. The six-month deadline
doesn't provide much time, "but we've been working on it for the better part of a year, so we're not starting from now."

The FDIC order addresses the bank's management, lending practices and assets and sets a timeline
of corrective measures the bank must take.

Draper said the county's funds are secure, $250,000 insured by the FDIC and the rest covered by collateral pledged
by the bank for investments in excess of the amount insured by the FDIC, as required by state law.

"At this point I'm going to let them stay," she said, adding that she is "going to be discussing it with people,
find out any alternatives we have if we need any."

Draper said bank officials notified then-Treasurer Tom Sheskey shortly before the Aug. 7 effective date
of the FDIC order, "and they really didn't go into a great deal. But they did assure us we were covered,
our CDs were covered."

Marion Public Library has moved approximately $1.5 million, including an operating account and CDs,
to other banks since learning verbally from an Ohio State Bank official that the bank could no longer accept
deposits from public entities, said Cheryl Corbin, the library's fiscal officer. She said she had not received
any written notification that the FDIC had issued a cease-and-desist order to the bank.
...

A lot of pledging and promising going on...but not in the local paper until at least 60 days later...it's getting late.
And, the FDIC had to order them to "build its capital ratio to at least 6.5 percent and its total
risk-based capital ratio to at least 10 percent". What had it gotten down to that couldn't be rebuilt after
a bank official said: "we've been working on it for the better part of a year"?...don't look behind that curtain...
accept the bank's pledge to cover millions with bank-held assests...but, don't ask for the books...
if the county and the library are protecting their money...isn't it time to know where your money is?

The colder it gets, the less the odds this mirage will remain much longer...humm thread titles for 2010...

Note that all of these are from the BLS "A" tables - that is the actual count of people from a survey,
not the cooked, "birth-death-adjusted" nonsense that BLS calls a "headline" number.

This first chart shows the bad news - the blue line is monthly change from the previous month. It is very noisy, as you'd expect.
The solid line is annualized change - that is, the actual count compared to one year prior.

Notice that employment went to a negative 12-month rate of change right at the start of 2008
- coincidentally, right at the start of the official "start" of the recession.

I want to to pay particular attention to the bottom of the last recession, which was (officially) 11/01.
Notice that the spike bottom in the first derivative, that is, when the rate of change on a 12 month
basis turned positive, was almost exactly when NBER called that recession (in retrospect) "over".
Has the first derivative turned in the table at this point on an annualized basis? NO.

First question: What does this say about the calls that "the recession is over"?

You will also note that in terms of the 12 month rate of change this recession is more than three times
as severe in its impact on employment as was the 2001 recession. In fact, "by the numbers" we have
8,236,000 fewer people employed now than we had at the peak in July of 2007.

It is, however, worse than it first appears. Here's the second chart,
and this is the chart that, if you're sentient, should be sending cold chills up and down your spine:



Again, the monthly change data is in light blue, the annualized in red.

This chart shows that since 1999 (the furthest back I have ready access to the BLS data in easy-to-chart form)
the number of persons that are not in the labor force has continually risen on a 12 month trend basis.
While it has reached "zero" on two occasions and gotten close once more the number of people
in the country but not in the labor force continues to rise.

If we were a "gentifying" population this would be bad. But the boomers are not yet starting to retire
in significant numbers; at present we are adding about 150,000 "working age" people to the population
each and every month, or about 1.8 million annually.

YET WE ARE LOSING PEOPLE IN THE LABOR FORCE AS THEY EITHER GIVE UP OR DECIDE TO LIVE ON THE DOLE!

This is an unmitigated catastrophe, and it did NOT abate during the so-called "economic expansion" of the 2000s.
If that was a true economic expansion - that is, driven by people going to work and earning a productive living
- then the "NILF" numbers would have contracted on a 12 month trailing basis during that so-called "expansion."

They did not, which means the so-called "expansion" didn't come through productive labor.

To put this in context unless this number is at -1800 (or less) we are not "absorbing" the new workers
that come into the market - that is, while we "lost" 8.2 million jobs in this recession thus far we have also
managed to stuff at least twice that many more people of working age who aren't working into this country
in that same amount of time, and none of them show up in the official "unemployment" statistics because
none of the people in the "Not In Labor Force" bucket are "looking for work."

If that "expansion" did not come through productive labor, where did it come from?
Do I REALLY need to put this graph up again?



What comes next?

-------------------------------------------------------

Oh...but everything would be better if a huge new stimulus bill is passed to hire millions of people,
a liberal pundant said this morning on This Week on ABC. She said she wasn't concerned with debt.

That's the genius of the new-left economic thought...debt doesn't matter. Problem is, they are dead wrong.

"Recession's end marks start of states' budget woes - Rebound in taxes will take years, forcing states to make deeper cuts to jobs and services"

By DAVID A. LIEB, Associated Press

Last updated: 1:05 a.m., Sunday, October 4, 2009

The recession is probably over, which means states' financial troubles have only begun.

History suggests it could take six or more years for sales and income taxes -- which make up roughly two-thirds of states' revenue -- to return to pre-recession levels.

That augurs deeper cuts to state jobs and services in order to maintain funding for core programs such as public schools and Medicaid.

What's different from the three previous recessions, which took states three to five years to recover from, is that employment and consumer spending aren't expected to bounce back as quickly.

To balance their budgets in the meantime, states are likely to further raise taxes on the money people earn and spend; increase college tuition; reduce funding for the arts and other cultural programs; and push costs into the future by delaying pay raises for employees and repairs of government buildings.

Some states, including Massachusetts, Missouri and Arizona, already are making or considering fresh cuts just months after lawmakers agreed on new budgets.

Rising unemployment and a decline in consumer spending have put a big dent in states' tax revenues.

Census figures show states' income taxes plunged almost 28 percent in the second quarter of 2009, falling even further in places such as Arizona and California that were among the hardest hit by the housing market collapse.

States' quarterly sales taxes fell almost 10 percent compared to the previous year.

Unlike the federal government, states generally must balance their budgets.

That's why one-third of states have raised taxes this year.

They've hit the wealthy with income tax surcharges, hiked sales taxes that disproportionately affect the poor and targeted smokers, drinkers and motorists with higher taxes and fees.

Hundreds of thousands of state employees have been furloughed.

And government "rainy day" funds have been diminished to half their highs of just three years ago.

Billions of dollars in federal stimulus money has enabled state lawmakers to maintain funding for programs like Medicaid and public schools.

But that emergency aid will run out long before the labor market improves and states' budgets have healed.

At that point, further cuts to less vital services are a near certainty.

"Even though this national recovery will happen, state revenues are still going to be facing some pretty horrific times," says Sujit CanagaRetna, a senior fiscal analyst for the Council of State Governments.

After the recession that began in July 1981 it took three years before states' revenues fully rebounded, adjusting for inflation, population growth and tax increases, says Donald Boyd, a senior fellow at the Rockefeller Institute of Government at the State University of New York in Albany.

He says it took states between four and five years to recover from the recessions that began in July 1990 and March 2001.

Based on that analysis, "I wouldn't be surprised for it to take (states) six or seven years to get back to where they were" before this recession began in December 2007, he says.

"What certainly is going to have to happen is several rounds of significant tax increases and, or, spending cuts."

State lawmakers responded to the early 1980s recession with three consecutive years of higher taxes that, when compounded, amounted to a nearly 11 percent hike over the pre-recession tax levels, Boyd said.

The early 1990s recession resulted in a similar three-year tax pattern that affected virtually all economic classes by raising levies on individual and corporate incomes, retail sales and motor fuel.

Part of the reason for the prolonged recovery is that states are starting from a deep financial hole.

They face a combined budget gap for 2010-2011 of more than $350 billion and, in some states, next year's shortfall is expected to exceed one-quarter of their general fund budgets, according to the Center on Budget and Policy Priorities.

Another reason why most states can expect a slow rebound is that personal income taxes account for more than one-third of revenues, on average, in the 41 states that levy them, according to the National Association of State Budget Officers.

Following the recession of the early 2000s, the national unemployment rate peaked at 6.3 percent.

It now stands at 9.8 percent, but is above 10 percent in a dozen states.

The last time the nationwide unemployment rate surpassed 10 percent was after the recession that began in 1981.

Federal Reserve Chairman Ben Bernanke says the recession is "very likely over," but that unemployment is likely to get worse before it gets better.

Some economists say it could take at least four years for the jobless rate to drop down to a more normal range of 5 percent.

While sales taxes typically rebound more quickly than income taxes, that is not necessarily going to happen this time around.

Retail sales have fallen further this recession than in any other during the past four decades, according to Boyd's research.

That's because jobs remain scarce, credit has tightened and home prices are down, instilling a frugality that appears to have staying power.

In anticipation of a slow budgetary recovery, some states are seeking to push costs into the future.

In Rhode Island, a proposal to avoid a government shutdown would require state employees to work 12 days without pay over the next two years.

In return, they would get extra vacation days and could receive pay for some of their lost wages -- but not until they retire or leave their jobs.

In Minnesota, Gov. Tim Pawlenty is balancing the budget by delaying nearly $1.8 billion of payments to schools until after the end of the current school year.

The state's action has created a ripple effect for school districts, which are tapping reserves and borrowing money to pay staff, food and utility bills.

Complicating the recovery is the fact that some state services have barely rebounded from the last recession.

Funding for Missouri's public colleges and universities, for example, peaked at just under $950 million in the 2001 fiscal year before getting sliced the following two years.

State higher education aid didn't inch past the 2001 level until 2009.

But core funding for Missouri's public colleges and universities now has been frozen indefinitely because of the recession.

Told that any requested funding increases would require equal cuts from elsewhere its budget, the Missouri Coordinating Board for Higher Education last month recommended yet another flat year of funding for 2011.

The result is that Missouri's colleges and universities would get about the same amount of money as they did a decade ago, despite rising operating costs and enrollments that the state board says have grown as the recession prompts more people to seek new job training.

"The economy might improve, but the state's budget is still going to have some serious problems," says Paul Wagner, Missouri's deputy higher education commissioner.

I spent last week with a bunch of Millennials at my stepson's wedding. They think the recession is over and they certainly don't anticipate a Depression...

Good to see you back among us, rla ....

Hope all went well at the weddiing ....

And what, pray tell, is a "millenial"?

I can't say that I am familiar with the term ....

And so ...

Five industries grew last month: utilities, health care, retail, construction and wholesale trade.

And while activity is rising, only three areas reported an increase in jobs: health care, support services for companies and educational services.

Overall, service-sector employment shrank in September, though at a slightly slower pace than in August.

- "Service sector grows in Sept., 1st time in year - Private trade group: service sector grew in Sept. for 1st time in year, but jobs remain scarce" By TALI ARBEL, Associated Press, Last updated: 12:15 p.m., Monday, October 5, 2009

The Millenial Generation, sometimes called Generation Y are people born between 1978 and 2000. Tend to be progressive and futuristic technocrats...The wedding party (about 100) had gathered from all over the country and two or three from other countries and were all well-to-do professionals. The wedding and reception was great and the brides parents were most generous in staging a major event...My wife and I did a big rehersal dinner (with her
money) which was also quite a party. A good time was had by all. I enjoyed the trip very much and was also glad to get home.

Those beliefs seem popular, with the market climbing 250 points in the past 48 hours.
(With no basis for the rise in reports, expansions, new products or earnings.)
However, until the hidden debts on bank books is balanced and employment returns,
I just don't know on what basis the belief is based. Today, worry about the dollar
has gold up to the highest in history. Belief can push the herd no doubt...but until
the fundamentals (personal consumption, debt to asset ratios, rising federal expenditures
and falling federal revenues) correct we just push the bubble larger and larger.

Investments in markets, currencies, metals, oil (and other commodities) are all "timing",
just as real estate is all "location". Since March the timing has been right...but there is
a capacity to the elasticity of all bubbles...and when reached, inevitability is re-learned.

http://www.marketwatch.com/story/gold-hits...umps-2009-10-06

Metals Stocks
Oct. 6, 2009, 12:03 p.m. EDT · Recommend (1) · Post:

Gold hits record at $1,045, gains on report of dollar's demise
Silver and copper contracts also move higher

By Nick Godt, MarketWatch

NEW YORK (MarketWatch) -- Gold futures hit a new high on Tuesday, lifted by weakness in the dollar
after Australia hiked interest rates and after a report that Gulf-area oil producers, along with China,
Russia, Japan and France, are planning to eventually end dollar-based oil pricing.

With the greenback under selling pressure, investors moved into dollar-denominated commodities such as gold.

Gold for December delivery rose as high as $1,045.00 an ounce in electronic trade, topping the previous record
of $1,033.90 in March 2008. It recently gained $16.30, or 1.6%, to $1,034.10 an ounce.

Pushing through a new high is "very bullish for gold," said Tom di Galoma, strategist at Guggenheim Securities.

The dollar index , a measure of the greenback against a trade-weighted basket of currencies, fell to 76.166
from 76.668 in late trading Monday.

...

Something's happening, or about to, but I'm not sure of the timing. I keep hearing the lyrics:

"Something is happening here,
but you don't know what it is,
do you, Mister Jones?" -

Ballad of a Thin Man-

Bob Dylan

The biggest sucker punch that could be handed to Obama, if the powers that be wanted to, would be to allow the bottom to fall out of the market again before the 2010 elections...

again, there are NO polls whatsoever that republicans pick up any support a democrat loses

if there was a 3rd party,then that party might make gains

But, remember something else
Bush lied about each and every economy figure for his benefit

Dems are polling 18.7% better now than they were 2 months ago, and republicans are still at 20% way below the dems.

asnd remember in 1994, the game changer was all the dems that retired. almost NO dem is retiring, so there are not empty seats, and all

but indianhead will keep reading the rightwing rags and quoting them

there are plenty of smiles outside and people are recovering
trouble with indianheads doom and gloom is two fold

one-if its the economy and it rises the dems will gain and have 75 senators
two-if the economy tanks(and I love how indianhead is hoping the nation plummets into depression, so odd that he wants people to die and fry, isn't it? His voodoo is very weird.

I think the Obama team is close enough to Wall Street to keep that from happening
(if at all possible). There would be another stimulus or something, they are already
going to extend (for the second time) unemployment insurance payments.

But eventually inflation is going to explode...an international devaluation of the dollar
would push that up...because of the massive money printing and teasury bond sales.
Debt doesn't "go away" it's either paid down to a reasonable rate or monitary value succumbs.


http://www.bloomberg.com/apps/news?pid=206...id=aE48docaZFJQ

Gold Jumps to Record as Inflation Outlook Fuels Investor Demand

By Pham-Duy Nguyen, Nicholas Larkin and Kim Kyoungwha

Oct. 6 (Bloomberg) -- Gold rose to a record on speculation that currencies will depreciate,
spurring inflation and boosting the appeal of the precious metal for investors seeking to preserve their wealth.

Gold futures climbed as high as $1,045 an ounce in New York, topping the previous record of $1,033.90
in March 2008. The spot price is headed for a ninth straight annual gain, the longest rally since
at least 1948. The dollar fell as much as 0.7 percent against a basket of six major currencies.

“Gold is acting like the ultimate currency,” said Chip Hanlon, the president of Delta Global Advisors Inc.
in Huntington Beach, California. “Central banks are following the same monetary course and trying to
stimulate and inflate their way back to growth. Everyone’s concerned about the dollar, but it’s not like
you can hate the dollar and fall in love with the euro or the yen.”

U.S. President Barack Obama has increased the nation’s marketable debt to an unprecedented $6.78 trillion
as he borrows to spur the world’s largest economy. Goldman Sachs Group Inc. predicts the country will sell
about $2.9 trillion of debt in the two years ending next September.

...............

...and then there's those pesky $1-trillion-each bills:
Heath Care and Cap and Trade (the carbon tax bill).
I said it before the election and I say again: we can not afford it!

But hey, that's just me, the proverbial voice in the wilderness.


Silent Running - Mike & the Mechanics

Take the children and yourself
And hide out in the cellar
By now the fighting will be close at hand
Dont believe the church and state
And everything they tell you
Believe in me, Im with the high command

Can you hear me, can you hear me running?
Can you hear me running, can you hear me calling you?
Can you hear me, can you hear me running?
Can you hear me running, can you hear me calling you?

Theres a gun and ammunition
Just inside the doorway
Use it only in emergency
Better you should pray to god
The father and the spirit
Will guide you and protect from up here

(chorus)

Swear allegiance to the flag
Whatever flag they offer
Never hint at what you really feel
Teach the children quietly
For some day sons and daughters
Will rise up and fight while we stood still

(chorus twice)

boy, if only in 2002 the interest rate was 15%

I would be a millionaire today, as I own no stock, and have zero debt myself.

I would not be sorry if it goes up to double digits
I pray it will

the common person who has cds, bank accounts, they will finally make something off their interest

so let's get it on as Marvin Gaye said.

G4A:

You are correct an increase in the lending rate (which the Fed has kept around zero)
will cause rates paid on CDs etc. to increase...assuming banks have actually more assets
than toxic assests (debt to asset ratio), are liquid, and can pay out said interest rates.
The value of the "pay outs" also drops as inflation depresses currency values.

However, I am having reservations about what most see as "money" and "credit" (debt).

Karl Denninger at market-ticker.denninger.net says it pretty well. He says "economists"
that think "money" (currency) is money, or "credit" is money are off-base:

...

If you noticed in my previous Ticker I specifically referenced The Monetary Base.
This was not a mistake nor was it an "aside"; it is, in fact crucial to get this definition
correct or everything from that point forward will be wrong. To repeat:

Monetary Base: The monetary base of all credit-based monetary systems is the sum total
of all unencumbered assets against which one is both able and willing to borrow. (No, it is not
"M1", "M'" or any such nonsense.) If you run into a so-called "Economist" who claims to have
letters after his name yet makes the argument that "base money" (or any such thing) is the
monetary base in a debt-based system find out where he got those letters from and petition
them to revoke his degree; he fails at the fundamental skill of logic and deduction, yet it is a
near-certainty that he carries proof that his claimed position is wrong in his wallet (a credit card,
which spends identically to the dead president it resides next to.)

The "hard money" folks (and many "fiat money" folks) are wrong because they are attached
to an ideology that has been subsumed in ALL credit-based monetary systems - an anachronistic
ideology that they have elevated to idolatry yet is in fact FALSE.

The ugly part of this willful suspension of mental capacity is that each and every one of these people
personally proves the falsity of their foundational premise every single day with their actions in the
real economy! They buy and sell using credit, proving in their personal life the fungible nature of both,
yet they reside in a home and drive a car that in fact are money - that is, the product of mining, growing
and/or manufacturing. It takes a profound level of intentional blindness and mental incapacity to refuse
to admit that which is shoved in your face literally on a daily basis.

I have repeatedly said that if you start from a false premise every single conclusion you reach
from that point forward will be wrong.

The false premise that all of these people adopt and defend against overwhelming proof that
they're wrong is that "the monetary base" is some sort of currency, whether fiat or specie.

This is a false belief in all credit-based monetary systems as it violates the fundamental axiom
of what a "base" is - it is that which underlies or underpins what follows.

Yet it is patently obvious that the base upon which a credit-based monetary system rests
is in fact the prior productive output of that society - that is, the unencumbered asset base
that can be pledged as security for the issue of credit.

Currency is an abstraction; even in a "hard money" world it contains a "promise of conversion"
that is in fact a promise, not the conversion itself. Further, the "hard money" folks define "money"
as that which is inexorably linked (e.g. gold and currency convertible into gold on demand) yet they
ignore every other output of production as "money" - even though such outputs ARE, in fact, money!

Consider what happens when you adopt a correct view of the monetary base:

Lending someone $9,000 to buy an $18,000 car (they put the other half down in case) is in fact
not a fractional loan. The lending is in fact fully-secured and thus bears no fractional reserve of any sort.
The same is true when one lends $200,000 to buy a $300,000 house. The house and the car embody
ACTUAL MONEY as both are the fruits of production and thus fully secure the credit issued in such an instance.
Yes, some of their "price" (in dollars) is speculative - but not all, and so long as one does not invade the
actual monetary value of these created items no fractional lending has in fact taken place.

Lending someone $9,000 on a credit card where that loan is 100% backed by excess capital is also not a
fractional loan - there is exactly $1 of excess capital (actual money) against every dollar lent out.

Mish and others like him are wrong because they have their premise incorrect. This incorrect base premise
leads to shrill calls for that which will not work (hard currency) and in fact has a thousand-year plus history
of not working to stop depressions and other serious economic imbalances.

Yet despite over a thousand years of history none of these people ever examine their premise to discover
why these so-called "fixes" never, ever work. They instead wave their arms and try to come up with all sorts
of other "explanations" for things like the Panic of 1873 and the Depression beginning in 1929 instead of examining
the foundation of their premise and recognizing it's infirmity.

Idolatry is dangerous in all it's forms, and nowhere is it more dangerous then when so-called writers and pundits
fail to recognize that which is sitting right under their face.

There is an old saying that there are two constants in the universe: Death and Taxes. To that some add
a third that seems particularly appropriate in this case: willful blindness, otherwise known as idiocy.

----------------------

The banks (insurance companies, hedge firms, a variety of funds and others) have a ratio of unencumbered assets
to debt they can not expose. It's why mark-to-market can not be used and instead we have a form of Enron
accounting claiming to have unencumbered assests, which are actually toxic (not worth near their face value
which is claimed on the banks' books). And, now the federal government (and some state governments) are
making the same mistake - taking over majority ownership in companies, that left on their own would fail...and
thus lying to taxpayers (and purchasers of treasuries) about the value of our unencumbered assests.

There are natural resources, refined commodities, and manufactured assets.
As Denninger said, houses are the product of wood (grown), lumber, nails etc. (refined),
and construction (manufacturing). These things he says are "money" because they have a
real value: shelter that remains at the same value. Currency, to some extent metals, oil etc.
all have a relative value and fluxuate wildly at times. Thus, the problem is we don't have
a real monitary base in "money" (unemcubered assests) and are "playing around" (making up
theories/"fixes") with the economy until we make mistakes. It's not the system (Capitalism) it's the "playing around"
with it that is making the economy weak. But, I'm a simple guy...I think the way Denninger does when it comes to "money".

They say the night Babylon fell, that the king was holding a fancy dinner party for the upper crust of Babylon ....

Talking about some investment opportunities over brie served on filet mignon ....

And red wine, of course .......

And so ....

(I don't want to be the guy with the woman hanging on him...I want to be in the woods...far away from city-center.)

MARKETS DATA CENTER
from The Wall Street Journal Online

MOST ACTIVE STOCKS BY VOLUME CLOSING SNAPSHOT
4:35 pm ET 10/06/2009

__________________________________


NYSE:

Issue (symbol)
Price Chg % Chg Volume
---------------------------------

Citigroup ©
$4.67 0.00 0.00 473,540,081


The most active stock today is the weakest financial. Almost half-a-billion shares traded
and it came out even. Hummm, think someone is playing with the market? Nawwww.

To me, the question is whether Obama will give the people who could land the sucker punch reason to want to...

Which political party is helped or hurt is more or less immaterial...

Your discussion about the nature of money is interesting. Reminds me of Albert Borgman's distinction between,
"commanding reality" and "disposable reality," which corresponds to the distinction between, "Things" and "Devices." A musical instrument is a thing, a stereo is a device. The former convey meaning through their own
inherent qualities, while the latter answer to our shifting psychic needs...

"Consumers cut borrowing by $12B in August - Consumers reduce their outstanding debt by $12 billion in August, 7th straight drop"

By CHRISTOPHER S. RUGABER, Associated Press

Last updated: 4:46 p.m., Wednesday, October 7, 2009

WASHINGTON -- Consumers reduced their borrowing for the seventh straight month in August, as households worked to pay off debt and banks reduced credit card limits.

Americans are saving more and borrowing less as widespread job losses, stagnant wages and dwindling home values have spurred a move to greater frugality.

While that's a positive trend in the long run, economists say, it can weaken the fledgling recovery as consumer spending powers about 70 percent of the economy.

The Federal Reserve said Wednesday that total consumer debt outstanding fell in August by $12 billion, a 5.8 percent annual rate.

Wall Street economists expected a $10 billion decline.

That follows a downwardly revised drop of $19 billion, or 9.1 percent, in July, the largest decline in dollar terms on records dating from 1943.

July's decrease was the steepest percentage drop since a 16.3 percent decline in June 1975.

"Consumers are clearly becoming much more conservative about their spending habits (and) paying down debts," said Zach Pandl, an economist at Nomura Securities.

"This is likely to continue."

The declines reflect both a drop in demand for credit by consumers, as well as tighter standards among banks and other lenders.

Total consumer credit outstanding is now $2.46 trillion, down about 4.6 percent from its peak in July.

The Fed's report covers credit cards, store cards, auto and other personal loans.

It doesn't include mortgages or other real-estate related debt.

The retrenchment in August occurred even as consumer spending increased 1.3 percent, according to a report last week from the Commerce Department.

That suggests consumers are increasingly buying with cash rather than credit, Pandl said.

The Cash for Clunkers auto rebate program helped boost personal spending in August.

Economists noted that auto loans and other non-revolving debt dropped only 1.6 percent that month, according to the Fed, compared with a 12.6 percent fall in July.

Credit card debt, meanwhile, fell 13.1 percent, its steepest drop since February.

That may also reflect cuts in card limits.

A report earlier this year by FICO, which produces the most widely known credit scores, found that companies slashed limits for an estimated 58 million card holders in the 12 months ended in April.

Consumers also are likely to restrain spending as long as jobs remain scarce.

The Labor Department reported last week that the unemployment rate rose to 9.8 percent in September, the highest in 26 years.

Many economists believe the rate will peak above 10 percent sometime next year.

Retailers already are bracing for another meager holiday season.

The National Retail Federation said Tuesday that it expects sales during November and December to fall 1 percent from last year.

While that's not as steep a drop as in 2008, last year's holiday sales saw the worst annual drop on records dating to 1967.

The NRF also expects retail sales for all of 2009 to fall 3 percent.

It's as though we are looking through a glass darkly...and I do blame the media somewhat.

Snuff had a post in financial turmoil linking to:

http://globalresearch.ca/index.php?context=va&aid=15570

...
Max Wolff who works in the financial industry, and also teaches about it, shared his view as we stood outside the New York Stock Exchange:

“I think the media mostly did unpaid press releases for various businesses looking to sale financial products and while that made sense given the advertising driven the media, they became cheerleaders instead of critics and that took of the table out of the discussion a critical voice that would have help people realize what was going on, stop it before it got too big and deal with the crisis in a way that was relatively transparent, democratic and broadly beneficial as opposed to quite and partial and very muddy and unclear."

The strange thing about the course taken involving Wall Street is that there was no change between the past and present
administrations...most other things, yes...Wall Street...no.

Apparently, out in Detroit, people thought that Obama was going to be giving away free money at some event, so a mass of people descended on the venue, with pushing and shoving and fights breaking out ....

Fights...hummm...and deep in a story about the demise of the dollar
was a paragraph...right at the end, that hinted at a coming fight...

http://www.independent.co.uk/news/business...ar-1798175.html
...
Iran announced late last month that its foreign currency reserves would henceforth be held in euros
rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer
to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision,
the Americans and British invaded Iraq.

Tighten those straps, secure your gear...what's coming ain't gonna be pretty.

MARKETWATCH Bond Report

Oct. 8, 2009, 3:43 p.m. EDT

"Treasurys decline after tepid demand for long bond sale"

By Deborah Levine, MarketWatch

NEW YORK (MarketWatch) -- Treasury prices declined on Thursday, pushing 30-year bond yields over 4%, after the government elicited tepid demand for its sale of the long bonds.

Bidders offered $2.37 for every $1 of notes available, compared to $2.65 on average in the last three reopenings, where the debt sold has the same maturity and coupon as the original issue.

Indirect bidders, a class of investors that includes foreign central banks, bought 34.5% of the auction, compared to an average of 48.6% at the last three reopenings.

Deborah Levine is a MarketWatch reporter, based in New York.

http://www.marketwatch.com/column/Bond%20Report

I was listening to an eye-witness account on the radio news ....

It sounded like quite a show out there ....

Pushing ...

Shoving ....

Fighting ....

All because people thought that there would be some more Obama FREE GIVE-AWAYS of cash there ...

And so ...

See how they run ....

And so ...

Why did they pack 35,000 people striving to get 3,500 checks for $3,000?
Don't they know about green shoots? The recession is over? All is well?

Well maybe not in Michigan, and Detroit in particular as this Free Press graphic shows:



But, these people won't move...they sit and wait for help. They know nothing else. A hard rain, my friend.

Those are the same types of people, cocksure about their intelligence, who got scammed and taken in the DOT.COM bust ....

And so ....

Do you take advice on life and living, rla, from people in their 20's and 30's?

"Next asset bubble could come sooner than you think - Amid the wreckage of the financial crisis, building blocks for the next bubble are with us"

By STEVENSON JACOBS, Associated Press

Last updated: 4:15 p.m., Thursday, October 8, 2009

NEW YORK -- The next financial bubble could come sooner than you think.

A year after the collapse of home values triggered the financial crisis and Great Recession, another rapid and irrational rise in the price of assets -- whether stocks, home values, oil or something else -- would seem unlikely.

After all, major bubbles through history have been spaced decades, if not centuries, apart.

Today, though, amid the wreckage of the last bubble, the ingredients for the next are still with us.

The price of gold spiking to its highest level ever -- $1,060 an ounce on Thursday -- is one warning sign, as is the 66 percent surge since March in the Nasdaq Stock Market index.

One reason is that there's a sharp rise in the amount of capital sloshing around the world in search of the best returns.

Investors are still fixated on short-term gains over long-term performance.

And information now travels instantly, fueling a herd mentality and feeding the optimism wired into our brains.

Bubbles feel good when they're inflating, but even that upside isn't a replacement for slow-and-steady growth -- the type of economy the U.S. mostly had for decades.

The problem comes when the music stops and the wreckage spreads far beyond the assets that were inflated.

After the housing bubble popped, we're lucky to still have a functioning financial system.

And because millions of working Americans now depend on 401(k) plans instead of pensions for their retirement savings, they're more vulnerable when the stock market plunges as it did last fall.

"It's not a matter of could it happen again; it's a matter of when," says Kenneth Rogoff, an economics professor at Harvard University and co-author of a new book on bubbles called "This Time Is Different: Eight Centuries of Financial Folly."

Reckless day traders and unqualified home buyers got blamed for the Internet stock bubble at the beginning of this decade and the still-deflating housing bubble.

But they're just bit players in the story.

The surge of global capital seeking the quickest and most profitable investments played a larger role.

Over the last 30 years, the value of financial assets -- such as stocks, bonds and bank deposits -- grew to be four times larger than annual global gross domestic product.

Key factors: personal savings rates rose in Asian economies, companies piled up profits year after year and Middle Eastern oil-exporting countries grew wealthier.

Mckinsey Global Institute estimates this measure of wealth peaked at $194 trillion in 2007.

And while it fell back to $178 trillion at the end of last year, it is still dramatically larger than the $43 trillion in 1990 or the $94 trillion in 2000.

That money helped fuel the Internet boom.

Billions of dollars in seed money enabled Silicon Valley startups to go public with only vague business plans -- and attract more investors.

After tech lost its luster in 2000, capital stampeded into another promising asset: the U.S. residential housing market.

That money made it easy for millions of Americans -- even those without good credit or money for a down payment -- to get mortgage loans because global institutional investors were eager to buy the high-yielding securities the mortgages were packaged into.

Before last year's financial crisis, China had amassed $376 billion in long-term U.S. agency debt, mostly in assets issued or backed by mortgage-finance giants Freddie Mac and Fannie Mae.

Today, record-low rates for short-term loans in the U.S. -- tied to the Federal Reserve cutting its target rate for overnight bank loans close to zero -- are also now playing a role.

And there's more incentive for money managers around the globe to use dollar-denominated short-term loans to buy stocks, commodities and other investments that typically deliver higher returns.

That's contributing to the dollar's 6.5 percent decline in value this year against a basket of six major currencies.

As the dollar has fallen, gold, copper and other commodities priced in dollars have become cheaper for overseas buyers.

Gold, for example, has risen 21.7 percent in the last six months in dollar terms.

But measured in terms of the euro, the currency used by Germany, France and 14 other European nations, gold is up only 7 percent over that period.

While buying gold is viewed as a way for investors to protect themselves against inflation, it can be a way for money managers to profit off other investors' inflation fears.

This is called momentum trading.

And as money managers shift funds around the globe in search of the highest returns, they often end up piling into the same asset classes so they can show clients they're wise to the next hot investment.

This is the kind of herd mentality that leads to asset prices inflating beyond their fundamental value.

Harvard professor Rogoff and others say that's why tougher rules on risk-taking, Wall Street compensation and borrowing are needed.

"Good policy changes could put off the next (bubble) by 50 to 75 years, instead of five or 10," he says.

Asset bubbles date to the 1600s.

During Holland's "Tulip Mania" in the 17th century, the slender flower became a status symbol and sparked a brief but ruinous bubble that saw tulip bulbs sell for as much as the price of a house before the market crashed.

In the late 1800s, shares of U.S. railroads soared and crumbled.

And just a few decades later, after the birth of the U.S. auto industry helped pump up the economy -- and home prices -- the stock market made its historic ascent and 1929 crash, triggering the Great Depression.

From World War II up until the 1980s, large-scale asset bubbles in the U.S. were rare.

World economies were tightly regulated and the flow of international capital was restricted, making it much harder for bubbles to form, says Carmen Reinhart, an economics professor at the University of Maryland.

It's a vastly different picture today.

International financial markets have become deeply enmeshed, and the cross-border flow of money has ballooned, making the U.S. economy "much more crisis prone," Reinhart says.

It's true that credit is harder to come by today and that could temper the threat.

But until lending standards are further tightened, a "misalignment" between the risks and rewards of investing with borrowed money will persist, says Mark T. Williams, professor of finance and economics at Boston University.

The Obama administration is calling for tougher measures against subprime lending to ensure only qualified borrowers get loans.

It also has proposed limiting executive pay to discourage excessive risk-taking and making banks keep more capital on their books to safeguard against risky borrowing, or leverage.

Harrison Hong, an economist at Princeton University who researches bubbles, says the same short-term mindset that prods investors to pile into the next boom also allows them to forget the previous bust.

After the bursting of the tech bubble in 2000, it only took a few years before the same investors who lost money on Internet stocks turned their attention to real estate as home prices rose rapidly.

"Memories are fairly short," Hong says.

"My sense is that we're going to be in for a repeat of this stuff somewhere down the line."

"Dollar weaker after ECB holds rates steady - Dollar stays weak after ECB holds rates steady; in US, retailers, jobs data boosts markets"

Associated Press

Last updated: 4:45 p.m., Thursday, October 8, 2009

NEW YORK -- The dollar remained lower versus the euro after the European Central Bank and Bank of England left interest rates unchanged Thursday.

The euro had been up before the ECB's decision and didn't move much after Jean-Claude Trichet, president of the central bank, said the eurozone economy was "stabilizing and is expected to recover at a gradual pace."

His comments also suggested the bank does not see a threat from inflation, while the recovery would be "uneven," signaling that interest-rate increases would probably not come any time soon.

Higher interest rates can boost a currency, as better yields make it more attractive to investors.

The ECB's rate remained at 1 percent, while the Bank of England kept its rate at 0.5 percent.

The Federal Reserve's federal funds rate is at a range near zero, among the lowest of the major economies.

The 16-nation euro rose to $1.4778 in late New York trading, up from the $1.4671 late Wednesday.

That's slightly below a 12-month high of $1.4803.

The British pound also rose to $1.6067 from $1.5938, while the dollar slipped to 88.52 Japanese yen from 88.63 yen late Wednesday.

Gold prices, meanwhile, rose to a record.

Gold for December delivery surged to $1,062.70 an ounce on the New York Mercantile Exchange before trading down to $1,056.30 in late trading.

Gold prices are up about 20 percent in 2009.

Gold is often used as a hedge against inflation and a falling dollar.

In London, the Bank of England also said it would not, for now, increase its program to expand the money supply.

Such a move could weigh on the pound as it triggers inflation fears.

Trichet also reiterated concerns about the euro's recent rise against the dollar, which can harm European exports.

In the U.S., better-than-expected retail sales and a government report saying the fewest number of people filed for first-time unemployment aid last week since early January helped boost feelings about the American economic recovery.

Retail sales in September rose -- the first monthly gain compared with a year ago since July 2008.

In other trading, the dollar hit a 14-month low against the Australian dollar at 90.51 U.S. cents after the Australian government said the country's unemployment rate dropped to 5.7 percent in September.

Analysts had expected joblessness to rise to 6 percent.

The greenback also fell to 1.0516 Canadian dollars from 1.0637 late Wednesday, and dropped to 1.0272 Swiss francs from 1.0342 francs.

"Gold prices show no sign of slowing, hit new high - Gold prices soar to fresh high of $1,062 as dollar falls; Other commodities also rally"

By SARA LEPRO, Associated Press

Last updated: 5:05 p.m., Thursday, October 8, 2009

NEW YORK -- Gold continued its record-setting climb Thursday, rallying to a fresh high as the dollar weakened.

Gold rose to as high as $1,062.70 an ounce on the New York Mercantile Exchange before settling at $1,056.30, up $11.90, or 1.1 percent.

Gold had plowed past its previous record on Tuesday, and has posted new highs each day since then.

Prices have rallied 21.7 percent from a recent low of $867.90 an ounce in April, and are up 5.2 percent this week alone.

The unrelenting rise comes as the dollar continues to fall against other currencies.

Gold is used as a hedge against a weak greenback, which can trigger inflation.

The U.S. Dollar index, which tracks the dollar against a group of other currencies, hit its lowest level since last August on Thursday, and was recently down 0.6 percent.

Analysts say there is little standing in the way of more advances for gold.

"The only way this doesn't continue would be a stronger dollar," said David Beahm, vice president of economic research at Blanchard & Co., a precious metals investment firm.

"I can't find anybody out there that is saying that is going to happen."

The dollar has fallen steadily since early March as investors, more upbeat on the economy, dump traditionally safe-haven assets and move into riskier investments like stocks.

The dollar has also taken a beating this year from the government's record-low interest rates and massive fiscal spending designed to get the economy back on its feet.

Though data continues to suggest that inflation is not an immediate threat, investors believe that so long as the Federal Reserve keeps interest rates low, the dollar will continue to fall.

"Gold is an early predictor of inflation, so even though inflation may be a year or two down the road, gold typically begins moving earlier," said Jeffrey Nichols, managing director of American Precious Metals Advisors.

Australia surprised financial markets earlier this week when it became the first major economy to raise interest rates, leading some to question whether the Fed will be pressured to raise its own rates sooner rather than later.

Most analysts expect the Fed to stand pat on rates for now.

Other precious metals, particularly silver, have benefited from gold's rise.

December silver rallied 31.5 cents to $17.8150 an ounce, after earlier rising to $17.9550, its highest point since July 2008.

Among other precious metals, October platinum jumped $25.50, or 2 percent, to $1,346 an ounce.

Palladium rose 2.7 percent.

December copper futures rose 11.9 cents, or 4.3 percent, to $2.8985 a pound.

In addition to the weak dollar, there was good news on the economic front Thursday that helped lift commodities.

A closely watched index on retail sales posted its first gain in more than a year and aluminum maker Alcoa Inc. reported a surprisingly strong quarterly profit.

News from the Labor Department that initial claims for jobless benefits fell more than expected last week also cheered the market.

The day's news sent major stock indicators up more than 0.5 percent.

Elsewhere on the Nymex, crude prices jumped $2.12 to settle at $71.69 a barrel, buoyed by the weak dollar and rise in stocks.

Heating oil rose 6.58 cents to $1.8469 a gallon, while gasoline for November delivery gained 5.94 cents to $1.7797 a gallon.

Natural gas for November delivery added 5.9 cents to settle at $4.963 per 1,000 cubic feet.

Cocoa prices hit a new contract high, rising to $3,280 a ton before settling up $2 at $3,244 a ton.

Orange juice jumped 4.6 percent, while coffee rose 2.7 percent.

On the Chicago Board of Trade, December wheat futures rose 10.75 cents to $4.74 a bushel, while corn for December delivery added 4.25 cents to $3.64 a bushel.

November soybeans jumped 24 cents to $9.36 a bushel.

Bucking the broad trend in commodities, March sugar fell 2.5 percent, losing 0.58 cent to 22.54 cents a pound.