US Stocks Up; Tech Rallies On Window Dressing

Nice month for a change, but I can't help but have an uneasy feeling about this rally. This Friday's job report could be a real market mover if it surprises either way. The G-20 meeting starts on Thurday and it looks like it's not going to be a lovefest. French President Sarkozy has already threatened to bolt if he doesn't get his way. The markets will not like it if world leaders are not on the same page. Worse yet, protectionist measures are being imposed by 17 of the 20 nations that make up the G-20. The crisis in the auto industry will also be front page news as GM has 60 days and Chrysler only 30 to come up with a major restructuring or file for Chapter 11. Yesterday's stock market action showed you how investors feel about that possibility. This market is still very fragile, be careful.-Lou

US Stocks Up; Tech Rallies On Window Dressing

U.S. stocks pared their gains Tuesday as a rally in the financial and technology sectors petered out, though the Dow Jones Industrial Average looked to be headed to its best month since the bottom of the 2002 bear market.

For the first time in 17 months, the bulls have credible ammunition for stocks: There are tentative signs of stabilization in the U.S. economy and banking system. The bulls face their own stress test in April, however, as results of the Treasury Department's banking review or corporate first- quarter profit reports could wipe out recent gains.

The Dow was recently up 84 points, or 1.1%, at 7606. The Dow is up about 8% for the month to date, its best gain since October 2002, which turned out to be the bottom of the last bear market.

Read More:

http://www.marketwatch.com/news/story/US-Stocks-Up-Tech-Rallies/story.aspx?guid=%7B0ED5CC28%2D0BAE%2D4827%2D9E87%2D1CECD7C04889%7D

Beyond AIG: A Bill to let Big Government Set Your Salary

Creeping control over all us by both Congress and the President. It satrting to get a bit scary.-Lou

Beyond AIG: A Bill to let Big Government Set Your Salary

It was nearly two weeks ago that the House of Representatives, acting in a near-frenzy after the disclosure of bonuses paid to executives of AIG, passed a bill that would impose a 90 percent retroactive tax on those bonuses.

Despite the overwhelming 328-93 vote, support for the measure began to collapse almost immediately. Within days, the Obama White House backed away from it, as did the Senate Democratic leadership. The bill stalled, and the populist storm that spawned it seemed to pass.

But now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the "Pay for Performance Act of 2009," would impose government controls on the pay of all employees -- not just top executives -- of companies that have received a capital investment from the U.S. government.

It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.

The purpose of the legislation is to "prohibit unreasonable and excessive compensation and compensation not based on performance standards," according to the bill's language. That includes regular pay, bonuses -- everything -- paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.

Read More:

http://www.washingtonexaminer.com/politics/Beyond-AIG-A-Bill-to-let-Big-Government-Set-Your-Salary-42158597.html

Home Prices in 20 U.S. Cities Fell by a Record 19%

This is more bad news for housing. Keep in mind that this is January's numbers the last two months we have seen some evidence that housing may be improving somewhat.-Lou

Home Prices in 20 U.S. Cities Fell by a Record 19%

March 31 (Bloomberg) -- Home prices in 20 U.S. cities fell 19 percent in January from a year earlier, the fastest drop on record, as demand plummeted and foreclosures rose.

The S&P/Case-Shiller index’s decrease was more than forecast and compares with an 18.6 percent decrease in December. The gauge has fallen every month since January 2007, and year- over-year records began in 2001.

A glut of unsold properties may keep prices low, shrinking household wealth and damping spending. Still, sales of new and previously owned homes rose in February, indicating the housing slump, now in its fourth year, may ease as policy efforts to unclog credit and aid borrowers begin to take hold.

“There is still a lot of downward momentum,” said Michelle Meyer, an economist at Barclays Capital Inc. in New York. “We don’t think we’ll see a bottom in home prices until the second half of next year. The decline in home prices will continue to depress household balance sheets.”

Read More:

http://www.bloomberg.com/apps/news?pid=20601087&sid=amN9MrcX5IkY&refer=worldwide

10 Year Anniversary of Dow 10,000

click on picture to enlarge

Yesterday, March 30 was the tenth aniversary of Dow 10,000. Who would have thought that ten years later the Dow would be at 7,200? Here is a picture of The Wall Street Jornal from that day. Ahh, the good old days.-Lou

Mortgage Crisis Over? Please, It's Just Beginning

Mortgage Crisis Over? Please, It's Just Beginning

By Henry Blodget

Now that all those sub-prime loans have defaulted and folks who couldn't afford their houses have been evicted, the foreclosure crisis is over, right?
Wrong.

Why?

Because subprime loans aren't the only loans that began with a couple of years of fantastic teaser rates that made houses seem affordable. And over the next few years, all of those other loans will reset.

Now that interest rates are low, the folks who still have jobs and equity in their houses will refinance. Others, however, will be stuck paying higher rates--or they'll walk away from their houses.

Fund manager John Hussman of the Hussman Funds explains:
If there is any good news at present, it is that the capital infusions of late-2008 have temporarily stabilized the banking system, and that the U.S. economy is presently enjoying a brief and modest reprieve from the financial crisis.

This is largely the result of an ebbing in the rate of sub-prime mortgage resets, which reached their peak in mid-2008, with corresponding mortgage losses and foreclosures a few months later. Since this crisis began, the profile of mortgage resets has been well-correlated with subsequent foreclosures.

Read More:

http://www.businessinsider.com/henry-blodget-mortgage-crisis-over-please-its-just-beginning-2009-3

Pension Insurer Shifted to Stocks Just Before Crash

This is a big story. Just as many U.S. pensions are teetering on insolvency, the insurer of pensions decides to go "all in" into stocks just as the world economy was unraveling. The losses to the insurance fund are tremendous and most likely the PBGC will have to go to congress for a huge appropriation.-Lou

Pension insurer shifted to stocks

WASHINGTON - Just months before the start of last year's stock market collapse, the federal agency that insures the retirement funds of 44 million Americans departed from its conservative investment strategy and decided to put much of its $64 billion insurance fund into stocks.

Switching from a heavy reliance on bonds, the Pension Benefit Guaranty Corporation decided to pour billions of dollars into speculative investments such as stocks in emerging foreign markets, real estate, and private equity funds.

The agency refused to say how much of the new investment strategy has been implemented or how the fund has fared during the downturn. The agency would only say that its fund was down 6.5 percent - and all of its stock-related investments were down 23 percent - as of last Sept. 30, the end of its fiscal year. But that was before most of the recent stock market decline and just before the investment switch was scheduled to begin in earnest.

No statistics on the fund's subsequent performance were released.
Nonetheless, analysts expressed concern that large portions of the trust fund might have been lost at a time when many private pension plans are suffering major losses. The guarantee fund would be the only way to cover the plans if their companies go into bankruptcy.

"The truth is, this could be huge," said Zvi Bodie, a Boston University finance professor who in 2002 advised the agency to rely almost entirely on bonds. "This has the potential to be another several hundred billion dollars. If the auto companies go under, they have huge unfunded liabilities" in pension plans that would be passed on to the agency.

In addition, Peter Orszag, head of the White House Office of Management and Budget, has "serious concerns" about the agency, according to an Obama administration spokesman.

Read More:

http://www.boston.com/news/nation/washington/articles/2009/03/30/pension_insurer_shifted_to_stocks?mode=PF

Listen To This Week's Radio Show

Listen to this past Sunday's "The Financial Physician" radio program

Listen Here:

http://wobmam.com/personalities_lou_scatigna.html

Obama Outlines Plans for GM, Chrysler

I have been calling GM "Government Motors" for months. The stock market is taking it on the chin today, Dow down almost 300 points.-Lou

Obama Outlines Plans for GM, Chrysler

WASHINGTON--Warning that they can't depend on unending taxpayer dollars, President Barack Obama on Monday gave General Motors Corp. and Chrysler LLC a brief window to craft plans that would justify fresh government loans.

"We cannot, we must not, and we will not let our auto industry simply vanish," President Obama said at the White House.

"What we are asking is difficult," he said. "It will require hard choices by companies. It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognize that they cannot hold out for the prospect of endless government bailouts."

The remarks come a day after the administration ousted GM Chief Executive Rick Wagoner and rejected the restructuring plans that GM and Chrysler had hoped would lead to another infusion of government cash. Instead, the White House is giving GM 60 days to come up with a strategy for viability. Chrysler has a month to wrap up a partnership with Italy's Fiat SpA.

Read More:

http://online.wsj.com/article/SB123841609048669495.html

The 'revolution' starts here as 35,000 pack the G20 march

It is going to be an interesting week for our friends across the pond.-Lou

The 'revolution' starts here as 35,000 pack the G20 march

The Observer, Sunday 29 March 2009

They hoped for 10,000, but in the end more than triple that number turned out on London's streets for the biggest demonstration since the beginning of the economic crisis.

The Put People First march yesterday was organised by a collaboration of more than 100 trade unions, church groups and charities including ActionAid, Save the Children and Friends of the Earth. The theme was "jobs, justice and climate" and the message was aimed at the world leaders who will be gathering for the

G20 summit here this week.

The marchers, estimated at 35,000 by

police, accompanied by brass bands and drummers and a colourful assortment of banners and flags, walked the four miles from Embankment to Hyde Park, where speeches from comedian Mark Thomas and environmental campaigner Tony Juniper, and music from the Kooks, made for a party-like atmosphere.

People came from all over the country and families with children in pushchairs were among those marching. Jyoti Fernandes, an organic farmer who travelled from Somerset with her four children, said: "We are here to remind people that we have to look after our land and look after our food."

Read More:

http://www.guardian.co.uk/world/2009/mar/29/g20-protests-london

Real Unemployment Numbers

John Williams gives us the "real" government numbers. His website, Shadow Government Statistics, composes government numbers using past methodologies.-Lou

GM CEO resigns at Obama's behest

So now the President has the power to decide who is CEO of a private corporation? This gives me a really bad feeling. I know that GM is coming to the government for billions and without it's help it will go under, but I don't know, it still gives me a chill. The stock market certainly doesn't like it, the Dow futures are down 180 points before the open.-Lou

GM CEO resigns at Obama's behest

The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.

On Monday, President Barack Obama is to unveil his plans for the auto industry, including a response to a request for additional funds by GM and Chrysler. The plan is based on recommendations from the Presidential Task Force on the Auto Industry, headed by the Treasury Department.

The White House confirmed Wagoner was leaving at the government's behest after The Associated Press reported his immediate departure, without giving a reason.

General Motors issued a vague statement Sunday night that did not officially confirm Wagoner's departure. "We are anticipating an announcement soon from the Administration regarding the restructuring of the U.S. auto industry. We continue to work closely with members of the Task Force and it would not be appropriate for us to speculate on the content of any announcement," the company said.

The surprise announcement about the classically iconic American corporation is perhaps the most vivid sign yet of the tectonic change in the relationship between business and government in this era of subsidies and bailouts.

Read More:

http://www.politico.com/news/stories/0309/20625.html

Long Treasurys Have Outperformed Stocks Over 5, 10 and 25 Year Periods

by Lou Scatigna


Safe U.S. Treasury Bonds Have Outperformed Stocks Over The Last 25 Years.

I was quite surprised when I came across the following information. This illustrates the extent of the decline in stock prices over just the last year.

Peter Bernstein writing in The Financial Times, cites data showing that long term U.S. Government Bonds have outperformed the S&P 500 on a total return basis over five, ten, and 25 year periods. I was stunned when I read this. In a capitalistic society equities should outperform riskless Treasurys or the incentive to put money at risk by investing in businesses is just not there.

Respected market analyst, Don Coxe of Coxe Advisors stated in his book "If Treasurys outperform stocks, then capitalism is dead".

Larry Summers, economic czar to the president said last week that the U.S. stock market, adjusted for inflation was back to where it was when Lyndon Johnson was president. That's a zero rate of return over 35 years.
Is capitalism really dead, and if so what is going to replace it?

Very Funny Take On Financial Crisis by The South Park Gang

Bread Lines forming in California along with Tent Cities

This is terribly sad to read about. Unfortunately, we will be seeing more of this in cities and towns across the country. Thank God if you have a roof over your head-Lou

ANTHONY BARTKEWICZ, MyFox National

Many say a depression doesn't have to be great, that the economy can sink into a milder depression. The Salvation Army says it's happening now, and in San Diego County, people are standing in line outside a Salvation Army waiting for donated bread.

Salvation Army director of communications Suzi Woodruff Lacey said they are seeing people from all walks of life: "white collar, blue collar, people who have lost their jobs, people who are in danger of losing their homes."Bread lines were regularly seen in the 1930s during the Great Depression, when unemployment peaked at more than 25 percent and the stock market lost 90 percent of its value.

Today, California's unemployment rate hit 8.4 percent.TENT CITIESTent cities reminiscent of the "Hoovervilles" of the Great Depression have been springing up in cities across the United States - from Reno in Nevada to Tampa in Florida - as foreclosures and redundancies force middle-class families from their homes."Where the tent city is now is literally a toxic waste dump, it's unsafe, but these people are very resourceful," Burke said. "Some people are living in squalor, with just a tarp tied to a chainlink fence.

But then you'll see someone with several tents: The tent they live in, plus some outbuilding tents. And they couldn't be more neat and more tidy.

They're working hard to create a sense of home."Many of the 200 residents of Sacramento's Tent City, as with those around the country, are not recent victims of the downturn: They are the chronically homeless, some of them mentally ill. But the encampment seized national attention after Oprah Winfrey featured it on her daytime television show, part of a series of reports she has been running on the "new faces" of homelessness.

click to enlarge

Financier sees oil shock from credit crunch

Financier sees oil shock from credit crunch

LONDON (Reuters) - The global financial crisis and collapse in the oil market have stalled vital investment in oil exploration and production and are likely soon to lead to a sharp spike in prices, an energy consultant and financier says.

Matt Simmons, founder of Houston-based investment bank Simmons & Co, argues the underlying rate of decline of the world's aging oilfields is as much as 20 percent a year and only high levels of investment can reduce that to single digits.

With credit tight and oil prices almost $100 a barrel below their highs last year, oil companies are unable to sustain previous levels of spending and the result is falling production, he said in an interview on Thursday.
"We are three, six, maybe nine months away from a price shock. We are not talking about three to five years away -- it will be much sooner," Simmons told Reuters in London.

"These prices now are dangerously low. The lower prices fall, the less oil will be produced and the greater the chance of an oil spike," he said.

Read More:
http://www.reuters.com/article/newsOne/idUSTRE52P2D620090326

Stocks end Up 6.8% For Week

This Week's Market Action

by Lou Scatigna

U.S stocks declined on Friday but still finished the week up 6.8%. During the past three weeks the Dow has soared over 20%. It marks the best three week run since September 1982. Since the prior run came just after the inflection point in the 1981-1982 bear market some market analyists are hopeful we have seen the lows for this bear market, I'm not so sure. This month's broad based rally has brought hope to dazed and bloodied investors, but hope when appiled to financial markets usually ends in dashed hope.

Although recent economic reports have been better (less worse) than expected, I suspect there is another down leg to come. Earnings for the first quarter will be announced late April and don't expect them to be pretty. The market is expecting anemic earnings and will be listening more closely to management's guidance for the second half of the year. Recent enthusiasm for bank stocks may be short lived when first quarter earnings are announced. Expect more multi-billion dollar writeoffs at major banks.

March 2009 has been an impressive month for sure. With only three trading sessions left in the month, March is turning one of the top three in the stock market history. Just keep in mind that the biggest bull markets occur in bear markets.

I put some money to work this week in the energy and natural resource sector. Oil has put in a strong performance in March, rallying to over $50/bbl. Gasoline prices are on the rise and could be closer to $3.00 a gallon by mid summer.

Gold was relatively calm this week closing Friday at $923.50/oz down 3.5% for the week.

Atlanta's Omni National Bank becomes 21st failure of 2009

This week's bank closure Friday features only one bank this week. Remember, stay within FDIC limits, now $250,000 in most cases.-Lou

Atlanta's Omni National Bank becomes 21st failure of 2009

SAN FRANCISCO (MarketWatch) -- Omni National Bank of Atlanta became the 21st bank to fail in 2009, after the Federal Deposit Insurance Corporation said regulators closed the bank. SunTrust Bank of Atlanta will operate the six former branches of Omni National until April 27. Omni had assets of $956 million and total deposits of $796.8 million as of March 9. The failure marks the 46th bank to fail since the recession began.

Dollar Under Attack: Glenn Beck

Great Glenn Beck piece on the bailouts and the debasement of the U.S. dollar. John Rich sings his hit "They Are Shutting Detroit Down".-Lou

Postal Service Asks Congress for Bailout

Postal Service Asks Congress for Bailout

Postmaster General John Potter said Wednesday the financially strapped U.S. Postal Service will run out of money this year without help from Congress.

The only lingering question, Potter told a House subcommittee, is which bills will get paid and which will not. He did say ensuring the payment of workers’ salaries comes first. But Potter also said other bills may have to wait.

Potter’s appearance came as the agency, which has lived on a reputation of serving through wind, rain and all sorts of obstacles, seeks permission to reduce mail delivery to five days a week. It also wants to change the way retiree health benefits are amassed to save money.

“We are facing losses of historic proportion,” he said. “Our situation is critical.”

Read More:

http://www.cnsnews.com/public/content/article.aspx?RsrcID=45624

Reid Leaves Open Option for Extreme Maneuver on Health Care, Energy Overhauls

These guys are going to try to ram down our throats government run universal health care using a parlimentary procedure to avoid minority opposition and debate? This is government gone wild. The Constitution is being totally trashed.-Lou

Reid Leaves Open Option for Extreme Maneuver on Health Care, Energy Overhauls

Senate Majority Leader Harry Reid is holding the option of using a legislative maneuver to create not only a sweeping overhaul of the nation's health care system but also a controversial cap and trade energy program, a move that could torpedo bipartisanship.

The maneuver, known as "reconciliation," protects legislation to which it's attached from a Senate filibuster. Republicans, in their deep minority status, are in an uproar over the possibility that they will be all but eliminated from the legislative process.

But Republicans are not alone in their opposition. A sizable number of Democrats have protested the move; first and foremost, Budget Committee Chairman Kent Conrad, D-N.D., who excluded it from his committee's budget passed Thursday.

The House has reconciliation instructions in its budget for health care, and Reid left open the door Thursday to adding energy protections as well.

"We're leaving nothing off the table," Reid told reporters Thursday, a move that has touched off a firestorm of concern behind the scenes.

Read More:

http://www.foxnews.com/politics/first100days/2009/03/26/reid-leaves-open-option-extreme-maneuver-health-care-energy-overhauls/

Economy: Worst in 26 years

Economy: Worst in 26 years

NEW YORK (CNNMoney.com) -- The government confirmed Thursday that the U.S. economy suffered its largest drop in 26 years during the fourth quarter.

The nation's gross domestic product, the broadest measure of economic activity, fell at an annual rate of 6.3% during the final three months of 2008. That's slightly worse than the government's previous estimate of a 6.2% drop in the period.

Economists surveyed by Briefing.com had forecast that GDP would fall at a 6.6% rate in the latest reading.

The drop is the biggest one-quarter decline in this key measure since the first three months of 1982.

Read More:

http://money.cnn.com/2009/03/26/news/economy/gdp/index.htm

IRS squeezes Swiss bank clients for evidence

If you have money socked away in a secret Swiss bank account the IRS is going to hunt you down. I think I'll catch a plane to Geneva this week and get my money out of there.-Lou

IRS squeezes Swiss bank clients for evidence

WASHINGTON: The IRS is ratcheting up the pressure on Americans who kept secret Swiss bank accounts, giving them six months to come clean and cough up any evidence against their advisers or bankers.

Tax lawyers told The Associated Press Thursday that demands for information and evidence have increased sharply since the government sued UBS AG to try to get the names of tens of thousands of U.S. citizens who may have dodged taxes through Swiss accounts.

Putting the squeeze on rich Americans who hid their wealth, IRS Commissioner Douglas Shulman on Thursday also laid out a six-month window for those with secret offshore accounts to come clean under specific terms and penalties.

Read More:
http://www.iht.com/articles/ap/2009/03/26/business/UBS-Secrets-Clients.php

Fixed Mortgage Rate Falls to Lowest on Record

This is the goal of the Fed's move to buy $750 billion in mortgage backed securities. The Fed's target is 4.5% or lower for 30 year fixed rate mortgages. I'm going to refinance when the rates hit the Fed's target. Lower mortgage rates is just what the housing market need to stabilze. Remember there is an $8,000 tax credit for first time home buyers this year.-Lou

Fixed Mortgage Rate Falls to Lowest on Record

March 26 (Bloomberg) -- The U.S. 30-year fixed mortgage rate fell to 4.85 percent, the lowest on record, on a government plan to increase purchases of mortgage-backed bonds and buy up to $300 billion of Treasuries.

The average rate is the lowest in the Freddie Mac weekly survey dating back to 1971, the McLean, Virginia-based mortgage buyer said today in a statement. The rate fell from 4.98 percent a week earlier, Freddie Mac said.

The Federal Reserve said March 18 it will purchase up to an additional $750 billion of mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae to support home lending. The Fed is trying to lower rates by reducing the supply of outstanding mortgage bonds, boosting their price and lowering yields. That would allow banks to reduce the rates on new mortgages and still sell mortgage securities at a profit.

Read More:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHwZSvIeKL4Y&refer=home

Threats to AIG: "We Will Get Your Children"Documents reveal the level of threats against AIG employees

Most are unaware that civilization and social order can break down very quickly. In addition to these threats, buses of protesters demonstrated (intimidated) in front of AIG employees homes this weekend. Class warfare has arrived with to America.-Lou

Threats to AIG: "We Will Get Your Children"Documents reveal the level of threats against AIG employees

The anger in the threats against AIG executives is palpable."Get the bonus, we will get your children," someone identified only as "Jacob the Killer" hauntingly writes in an e-mail.


Threats to AIG: "We Will Get Your Children"

Documents reveal the level of threats against AIG employees

Protestors outside the AIG office aren't the only ones upset about executives' bonuses. The insurance giant has also been receiving harassing e-mails.

The anger in the threats against AIG executives is palpable."Get the bonus, we will get your children," someone identified only as "Jacob the Killer" hauntingly writes in an e-mail.

His is one of dozens of threats against AIG and its employees that were obtained from Connecticut Attorney General Richard Blumenthal's office under a Freedom of Information Act request by NBC Connecticut.

Surprisingly, some of those making the threats left their e-mail addresses and phone numbers - making the job of law enforcement officers easier.
Here are some of the highlights (or rather, low-lights). We've cleaned up some of the nasty language, but you can use your imagination:

-- All you motherf***ers should be shot. Thanks for f***ing up our economy then taking our money.

-- Dear Sir: Ya'll should have the balls and come clean and give back the bonuses. I know you would never do this so the gov't ought to take you out back and shoot everyone of you crooked sonofb****es...I would be very careful when I went out side. This is just a warning. If I were ya'll I would be real afraid. Thanks, Bill.

-- I don't hope that bad things happen to the recipients of those bonuses. I really hope that bad things happen to the children and grandchildren of them! Whatever hurts them the most!!

-- You f***ing suck. Paying bonuses to the d*****s that made bad bets losing your company billions of dollars. I want to f***ing puke. Publish the list of those yankee scumbags so some good old southern boys can take care of them.

-- If the bonuses don't stop, it will be very likely that every CEO @ AIG has a bulls-eye on their backs.

-- We will hunt you down. Every last penny. We will hunt your children and we will hunt your conscience. We will do whatever we can to get those people getting the bonuses. Give back the money or kill yourselves.

-- All the executives and their families should be executed with piano wire around their necks --- my greatest hope.

-- You mother-f***ing, c***s***ing, d***l****ers need to be taken out one by one and shot in the head. There's a special place in hell for you pond scum. Watch your backs because someone will come to get you, you can be sure.

-- The Revolution is coming. The family members of your executives are not safe. Your blood will run through the streets in the coming months.
Among the documents is an e-mail from an unknown individual, who may be or may have been an employee: "Just arrived home to several threats on the answering machine. 'Give your money back or else,' terrible things going to happen, etc. Both private caller numbers."

Read More:
http://www.nbcconnecticut.com/news/local/AIG-Threats-We-will-get-your-children.html

The Golden Days Of Detroit

This is a bit before my time when America was the car capital of the world. Dad, do you see your car here?-Lou

Watch and Enjoy:

http://thefiftiesandsixties.com/CarsWeDrove.htm

Dollar dips on Geithner’s ‘loose talk’

Be careful Tim, the markets do react to comments from the U.S. Treasury Secretary.-Lou

Dollar dips on Geithner’s ‘loose talk’

The dollar fell briefly on Wednesday after US Treasury secretary Tim Geithner said he was open to exploring a Chinese proposal to reduce reliance on the US dollar as the world’s reserve currency.
Mr Geithner told the Council for Foreign Relations that he had not studied the proposal by Chinese central bank governor Zhou Xiaochuan for greater use of Special Drawing Rights in international reserves, but said “we are quite open to that”.

He said increased use of SDRs should be thought of as an “evolutionary” step rather than a step towards “global monetary union”. The SDR is a synthetic currency unit maintained by the International Monetary Fund that represents a basket of actual currencies.
The dollar fell 1.3 per cent against the euro as headlines saying “Geithner open to SDR currency” flashed across traders’ screens. With the currency falling, Mr Geithner’s interviewer – Roger Altman, a deputy Treasury secretary in the Clinton administration – gave Mr Geithner the chance to clarify his remarks

Read More:
http://www.ft.com/cms/s/0/e4c56948-1946-11de-9d34-0000779fd2ac.html

More Seniors Turning To Reverse Mortgages To Survive

When used properly, reverse mortages are a life saver for our country's senior citizens. I have seen many of my clients financial lives turn around by using reverse mortgages. It is a shame that so many are doing so because they lost so much of their nest eggs.-Lou

Data Shows Seniors Turning to Reverses to Make Up for Investment Losses (Reverse Mortgages)

OAKLAND, CA - More senior citizens are looking into reverse mortgage loans as a way to offset the income that has vanished as the result of losses in their investments. This is from data gleaned by Golden Gateway Financial here from usage data for its online reverse mortgage calculator.
However, on the other side of the equation, the company said, homeowners are seeing their home values drop, as evidenced by changes in the S&P/Case-Shiller Home Price Indices.

"For many older Americans, the time to act to stave off continuing losses is now," said Eric Bachman, founder and chief executive of Golden Gateway Financial. "Retirees who are unable to tap their investments or even return to work are turning to their home as their last line of defense, only to find its value is greatly diminished. This economy is effectively rewriting the financial rules of retirement."

Read More:

http://brokeruniverse.com/reverse/fullstory/?story_id=135

BRITISH PM SAVAGED AT EU MEET: 'YOU HAVE RUN OUT OF OUR MONEY!'

Daniel Hannan, MEP for South East England, gives a speech during Gordon Brown´s visit to the European Parliament on 24th March, 2009.

Boy does he let Britain's Prime Minister have it.

Watch Here:

http://www.youtube.com/watch?v=94lW6Y4tBXs

Obama Asks Volcker to Lead Panel on Tax-Code Overhaul

Flat tax sounds good to me.-Lou

Obama Asks Volcker to Lead Panel on Tax-Code Overhaul

March 25 (Bloomberg) -- President Barack Obama is putting former Federal Reserve Chairman Paul Volcker in charge of a tax- code review aimed at closing loopholes, streamlining the law and generating revenue, budget Director Peter Orszag said.

Volcker, 81, who heads the president’s Economic Recovery Advisory Board, is being asked to take a look at the laws in an effort to rebalance the tax system.

Orszag said the review, given a deadline of Dec. 4, is being ordered to make recommendations on steps to simplify the code, built over the last 96 years, in ways that would reduce tax evasion and what he called “corporate welfare.”

“There are hundreds of billions of dollars in uncollected taxes each year,” Orszag said in a conference call. The Volcker board “will be examining ways of being even more aggressive on reducing the tax gap.”

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

Demand for durable goods jumps 3.4% in February

Some surprisingly good news. Some recent economic numbers are pointing to a leveling out of the economic contraction. More positive reports and it may be safe to say the worst may be over.-Lou

Demand for durable goods jumps 3.4% in February

First gain after six monthly declines surprises economists


WASHINGTON (MarketWatch) -- Demand for machinery and other capital goods rose in February, driving orders for durable goods up 3.4%, the Commerce Department reported Wednesday.

The unexpected rise in orders for big-ticket items marked the first increase after six straight monthly drops, an indication that domestic demand may have bottomed.

Economists surveyed by MarketWatch had been looking for total orders to fall 1.2%. See Economic Calendar.
The monthly durable-goods figures, although extremely volatile, are seen as key leading indicators for tracking the path of economic growth

Read More:
http://www.marketwatch.com/news/story/Durable-goods-orders-jump-Feb/story.aspx?guid=%7BF6B658F2%2DACC6%2D4E1D%2DB5A4%2D3F4A6E38739C%7D

Geithner plan will rob American taxpayers: Stiglitz

Geithner plan will rob American taxpayers: Stiglitz

HONG KONG (Reuters) - The U.S. government plan to rid banks of toxic assets will rob American taxpayers by exposing them to too much risk and is unlikely to work as long as the economy remains weak, Nobel Prize-winning economist Joseph Stiglitz said on Tuesday.

"The Geithner plan is very badly flawed," Stiglitz told Reuters in an interview during a Credit Suisse Asian Investment Conference in Hong Kong.

U.S. Treasury Secretary Timothy Geithner's plan to wipe up to US$1 trillion in bad debt off banks' balance sheets, unveiled on Monday, offered "perverse incentives," Stiglitz said.

The U.S. government is basically using the taxpayer to guarantee against downside risk on the value of these assets, while giving the upside, or potential profits, to private investors, he said.

"Quite frankly, this amounts to robbery of the American people. I don't think it's going to work because I think there'll be a lot of anger about putting the losses so much on the shoulder of the American taxpayer."

Even if the plan clears banks of massive toxic debt, worries about the economic outlook mean banks could still be unwilling to make fresh loans, while the prospect of a higher tax burden to pay for various government stimulus plans could further undermine U.S. consumers, he said.

Read More:
http://www.reuters.com/article/topNews/idUSTRE52N1IO20090324?virtualBrandChannel=10112

RADIO TALK SHOW HOST PENS BOOK DEAL

PRESS RELEASE

_______________________________________________________
FOR IMMEDIATE RELEASE

DATE: 3/23/09
CONTACT: Suzanne Hilton, Hilton Media, LLC
PHONE: 732-995-2115

RADIO TALK SHOW HOST PENS BOOK DEAL

New York, NY- Louis Scatigna, financial guru and known to tens of thousands of devoted radio listeners as “The Financial Physician”, has announced the inception of his latest venture The Financial Physician: How to Cure Your Money Problems and Boost Your Financial Health. The book, written by Scatigna himself, is an ultra timely must -have whereby Scatigna uses his own brand of money management to solve the financial ailments plaguing so many families in the country today.

Lou Scatigna, already a successful radio talk show host with his live weekly call-in show “The Financial Physician” on 1160 WOBM -AM, employs his special approach to money, treating personal financial issues like medical conditions. He stops the bleeding, performs triage, assesses the symptoms, renders his diagnosis, and then gives readers his Rx. Scatigna is able to shed light on many potential financial catastrophes through this no nonsense approach to money. “The real reward here is the ability to have a book that readers can really use - that they can take away some real information from to apply in their daily lives.”

“I know this will be a very useful tool for everyone in the tough times we’re in, as well as the tough times to come” says the author of his upcoming book.

In the book, Scatigna tackles some of the most daunting financial ailments plaguing Americans today. Chapters include: Buying Too Much House, Trusting that Wall Street has your Best Interests at Heart, Financial Illiteracy, Wasting Money on a Lifetime of Cars, and Lack of Generosity.

“We're definitely positioning Mr. Scatigna’s book as our lead financial title for the season with a November 2009 publication tentatively planned” says Michael Pye, Senior Acquisitions Editor and Director of Product Development for Career Press.

The Financial Physician: How to Cure your Money Problems and Boost your Financial Health promises to be a much needed and welcomed guide to financial health in these turbulent times. For more information on Lou Scatigna, The Financial Physician, contact Hilton Media at 732-995-2115 or visit Lou’s website www.thefinancialphysician.com.

Gold Ready To Soar?

Richard Russsell is from the old school. He has witnessed almost every kind of market. I agree with him that the Fed has rung the bell, the dollar will be devalued and gold will be wealth protection as it has always been. Go to the link to read about what other well respected newsletter writers are saying about gold.-Lou

(Marketwatch)........Dow Theory Letters' Richard Russell was even more dramatic. On Friday he said: "I've written in the past that if you want to make 'BIG' money in the market, you have to take an over-sized position and be dead right on the trend. The last time I did that was in late 1958. ... I did extremely well on that fateful ride, and I never again had the nerve to take that large a position -- until now.

"I started building my gold position in 1999. ... My gold position now is comparable to my market position back in 1958 ... maybe 30% of my total worth. Why have I done this again?

"(1) I believe gold is in a major or primary bull market. I believe the gold bull market is currently in its second phase. This is the phase where sophisticated and seasoned investors and the funds enter the market. ...

"(2) If there is only one bull market in progress, it will attract broad new coverage and attention -- just as Thursday's $70 rise in gold did.

"(3) I believe the bear market in stocks will continue erratically and the deflationary trends will persist. ... Bernanke will stop at nothing

(including massive printing of dollars) in his effort to halt deflation." See Dow Theory Letters Web site.

Read More:

http://www.marketwatch.com/news/story/bugs-triumphant-about-gold-terrified/story.aspx?guid=%7B39440865%2D467F%2D4035%2D9154%2D5C30BB1B7EE6%7D&dist=TNMostRead

British Feb. consumer prices rise more than expected

By year-end I expect we will be seeing some nasty inflation surprises here in the U.S. Basic material prices have begun to rise. Oil and especially copper have rallied nicely this year. Food commodities have been rising as well. The inevitable decline of the U.S. dollar will result in import inflation. It should have been no surprise to the Brits that inflation would begin appear. The pound has dropped dramatically and inflation follows currency destruction.-Lou

British Feb. consumer prices rise more than expected

LONDON (MarketWatch) -- British consumer price inflation rose 0.9% in February, for a 3.2% rise compared to the same month a year ago, the Office for National Statistics reported Tuesday. Expectations were for a 0.2% monthly increase and a 2.5% annual jump.

Bank Bailout Website

Here is a great website with all the details of the Treasury's bank rescue plan announced yesterday.-Lou

http://financialstability.gov/

China calls for new reserve currency

This is from the Financial Times, do you understand how huge this news is? Russia is calling for the same thing. Who is going to buy the $1 trillion of our debt this year, the Federal Reserve?.......yes..... Be ready for inflation.-Lou

China calls for new reserve currency

China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.

In an essay posted on the

People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies .

Analysts said the proposal was an indication of Beijing’s fears that actions being taken to save the domestic US economy would have a negative impact on China.

“This is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money,” said Qu Hongbin, chief China economist for HSBC.

Read More:

http://www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html

Stock Market Takes Off

Wow, what a day. The Dow rallies almost 500 points (7%) on a day when U.S. Treasury announced toxic asset bank deal. Existing home sales up over 5% in February was also helpful. Oil also shot up to $54/bbl.-Lou

Nobel laureate Krugman slams Geithner bailout plan

Nobel laureate Krugman slams Geithner bailout plan

WASHINGTON (Reuters) - Nobel-prize winning economist Paul Krugman said in remarks published on Monday that the latest U.S. Treasury bailout program is nearly certain to fail, triggering a sense of personal despair.

U.S. Treasury Secretary Timothy Geithner on Monday unveiled a plan aimed at persuading private investors to help rid banks up to $1 trillion in toxic assets that that are seen as a roadblock to economic recovery.
"This is more than disappointing," Krugman wrote in The New York Times. ""In fact it fills me with a sense of despair."

"The Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt," the Princeton University economist said, citing weekend reports outlining the plan.

Read More:
http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52M4SS20090323

Geithner: "My Plan for Bad Bank Assets"

Here is Tim Geithner's Op/Ed piece in todays Wall Street Journal. The stock market and especially bank stocks like the plan. Dow is up 436 points at this time-nice.-Lou

My Plan for Bad Bank Assets

By TIMOTHY GEITHNER

The American economy and much of the world now face extraordinary challenges, and confronting these challenges will continue to require extraordinary actions.

No crisis like this has a simple or single cause, but as a nation we borrowed too much and let our financial system take on irresponsible levels of risk. Those decisions have caused enormous suffering, and much of the damage has fallen on ordinary Americans and small-business owners who were careful and responsible. This is fundamentally unfair, and Americans are justifiably angry and frustrated.

The depth of public anger and the gravity of this crisis require that every policy we take be held to the most serious test: whether it gets our financial system back to the business of providing credit to working families and viable businesses, and helps prevent future crises.

Over the past six weeks we have put in place a series of financial initiatives, alongside the Recovery and Reinvestment Program, to help lay the financial foundation for economic recovery. We launched a broad program to stabilize the housing market by encouraging lower mortgage rates and making it easier for millions to refinance and avoid foreclosure.

We established a new capital program to provide banks with a safeguard against a deeper recession. By providing confidence that banks will have a sufficient level of capital even if the outlook is worse than expected, more credit will be available to the economy at lower interest rates today -- making it less likely that the more negative economy they fear will take place.

Read More:
http://online.wsj.com/article/SB123776536222709061.html#printMode

U.S. Feb. existing-home sales rise 5.1% on deep discounting

A bit of good news on housing for a change. A 5.7% increase in inventories to 9.7 months is a cause for concern.-Lou

U.S. Feb. existing-home sales rise 5.1% on deep discounting

WASHINGTON (MarketWatch) - Sales of pre-owned homes rose 5.1% to a seasonally adjusted annual rate of 4.72 million in February, boosted by "deep price discounts," the National Association of Realtors reported Monday. It was the largest percentage gain since July 2003. Sales are down 4.6% in the past year, the industry trade group reported. Economists surveyed by MarketWatch were expecting a decline to a 4.45 million pace from January's 4.49 million annual rate. The median sales price dropped 15.5% in the past year to $165,400. Inventories of unsold homes on the market rose by 5.2% to 3.80 million, a 9.7 month supply at the February sales pace.

Listen To This Week's Radio Show

Listen to this past Sunday's "The Financial Physician" radio show.

Listen Here:

http://wobmam.com/personalities_lou_scatigna.html

U.S. - with firms - to buy 'bad' assets

"Public Private Investment Program"? Public and private are opposites and cannot be linked together. I am reading George Orwell's classic "1984". This is right out of the book. Newspeak is what Orwell called government phrases designed to make people believe the opposite of reality. I suggest giving the book a read, Orwell was off by 25 years. Scary stuff. The stock market seems to like the news that the Treasury is doing something to unfreeze the banking system. Dow futures are up almost 200 points. -Lou

U.S. - with firms - to buy 'bad' assets

WASHINGTON (CNNMoney.com) -- The Obama administration on Monday will formally unveil a program to help banks clean up their books by subsidizing private investors' purchase of troubled assets.
The effort marks the next big step in Washington's six-month-old bank rescue, which has so far mostly entailed making capital investments and backstopping bank debt.

Administration officials, in a briefing with reporters late Sunday night, said they plan to commit $75 billion to $100 billion to start wiping out bad assets and would evaluate how programs are working before deciding how to commit more money.

The goal is to buy up at least $500 billion of bad assets -- loans, such as those for subprime mortgages, that are now in danger of default.
Investors have been waiting expectantly for details since last month when Treasury Secretary Tim Geithner announced the framework of a plan to address two of the biggest problems in the banking sector: the toxic assets keeping banks from lending and the shortage of capital at major institutions.

Under the new Public Private Investment Program, taxpayer funds will be used to seed partnerships with private firms to buy up assets backed by mortgages and other loans.

Read More:

http://money.cnn.com/2009/03/21/news/economy/bank_bailout_next_step/index.htm?postversion=2009032209

Obama Warns of a Possible Depression

I'm sorry but I have little confidence that the government knows what to do. It seems like they are just making it up as they go along.-Lou

Kroft to Obama: Are you punch-drunk?

President Barack Obama said he believes the global financial system remains at risk of implosion with the failure of Citigroup or AIG, which could touch off “an even more destructive recession and potentially depression.”

His remarks came in a“60 Minutes” interview in which he was pressed by Steve Kroft for laughing and chuckling several times while discussing the perilous state of the world’s economy.“You're sitting here. And you're— you are laughing. You are laughing about some of these problems. Are people going to look at this and say, ‘I mean, he's sitting there just making jokes about money—’ How do you deal with— I mean: explain. . .” Kroft asked at one point.“Are you punch-drunk?” Kroft said.

“No, no. There's gotta be a little gallows humor to get you through the day,” Obama said, with a laugh.

His talk of depression could be viewed as alarmist—but it also seemed aimed at bracing Congress and the public for the unpopular prospect of spending even more taxpayer dollars to prop up Wall Street. Treasury Secretary Timothy Geithner is set to roll out a plan Monday aimed at restoring the flow of credit that would back up private investments with government funds.

Even his awkward laughter highlighted an issue Obama has faced dating back to the campaign, a sense that he sometimes is too “cool” and detached to fully grasp the public anxiety over mounting job losses and economic worries.

Read Article and Watch Video Here:

http://www.politico.com/news/stories/0309/20339.html

Obama Printing Money Into Hyperinflation - U.N. To Recommend Ditching U.S. Dollar

Obama Printing Money Into Hyperinflation - U.N. To Recommend Ditching U.S. Dollar

Watch Video Here:

http://www.youtube.com/watch?v=ef5OmZkzjDI

AIG Corporate Security's Tips for Surviving an Angry Mob

Click On Document To See In Full

An AIG corporate security memo, advises employees on how not to fall victim to the populist horde calling for their heads.

Did Goldman Sachs Kill AIG?

Goldman Sachs may have been able to save AIG (and $170 billion (so far) of taxpayer money). Goldman Sachs would not take a discounted price to settle trades. Then AIG fails and ex Goldman CEO and U.S. Treasury Secretary Hank Paulson bails out AIG and Goldman gets billions that they would have lost if AIG went Chapter 11. It's nice to have friends in high places. -Lou

Goldman rejected settling of AIG trades at discount

NEW YORK (MarketWatch) -- Goldman Sachs Group rejected overtures from American International Group to settle trades with the troubled insurer at a discount, instead holding the company to the letter of its contracts, the investment bank's chief financial officer said Friday.

CFO David Viniar also said that Chief Executive Lloyd Blankfein had no meetings with former Treasury Secretary Henry Paulson about AIG.

Goldman and other large firms that were counterparties to
American International Group In have come under criticism in recent weeks because a lot of the government money that was initially loaned to the insurer was paid back out to these trading partners.

AIG almost collapsed in September after credit rating downgrades made it impossible for the insurer to meet obligations on derivative-based contracts it had sold to protect against losses on complex mortgage-related securities known as collateralized debt obligations, or CDOs.

Read More:
http://www.marketwatch.com/news/story/Goldman-rejected-offers-settle-AIG/story.aspx?guid=%7bD7078A9C-86CD-482E-A977-D5FCB0A0F827%7d&print=true&dist=printMidSection

AIG financial unit received $218 million in bonuses: report

Way to go AIG. Pour some more fuel on the fire.-Lou

AIG financial unit received $218 million in bonuses: report

SAN FRANCISCO (MarketWatch) -- American International Group Inc. paid out $218 million in bonuses to employees of its troubled financial-products unit, millions more than previously thought, the Associated Press reported Saturday, citing documents obtained by the office of Connecticut Attorney General Richard Blumenthal. AIG previously disclosed it had paid out $165 million in bonuses to the financial-products unit, with 73 employees receiving bonuses of $1 million or more. Blumenthal had issued a subpoena for the documents, which his office received late Friday, according to the AP.

Banker fury over tax ‘witch-hunt’

Using the tax code as a weopen against a handful of individuals is very dangerous regardless of the distasteful nature of the bonuses granted at AIG. This article is spot on, it will further destroy America's already wounded financial system. Government is out of control and our country will never be the same.-Lou

Banker fury over tax ‘witch-hunt’

Bankers on Wall Street and in Europe have struck back against moves by US lawmakers to slap punitive taxes on bonuses paid to high earners at bailed-out institutions.

Senior executives on both sides of the Atlantic on Friday warned of an exodus of talent from some of the biggest names in US finance, saying the “anti-American” measures smacked of “a McCarthy witch-hunt” that would send the country “back to the stone age”.

There were fears that the backlash triggered by AIG’s payment of $165m in bonuses to executives responsible for losses that forced a $170bn taxpayer-funded rescue would have devastating consequences for the largest banks.

“Finance is one of America’s great industries, and they’re destroying it,” said one banker at a firm that has accepted public money. “This happened out of haste and anger over AIG, but we’re not like AIG.”
The banker added: “It’s like a McCarthy witch-hunt...This is the most profoundly anti- American thing I’ve ever seen.”

Read More:
http://www.ft.com/cms/s/0/4ff2f77e-1584-11de-b9a9-0000779fd2ac.html