Stocks: Market Crash Looming

[HOLLYWOOD]

Best part of this on the numbers released this morning...comment by CNBC Pump monkey , Steve LIESman states: " "No, these numbers are wrong. They must be wrong" simply incredible

Economic Deterioration Continues: Initial Claims And GDP Revision BOTH MISS!

Initial jobless claims come in at 460,000, on expectations of 455,000, down slightly from a revised last week number of 474,000. This number is indicative of a general Nonfarm Payroll deterioration, as a reduction in the unemployment rate needs initial claims to be below 400k. This further confirms that the Fed is on some alternative planet when it comest to making economic projections, as recently quantified by ConvergEx:

"According to the minutes from its latest Federal Open Market Committee (FOMC) meeting in April, the Fed predicts unemployment will fall to 9.3% this year followed by 8.2% in 2011. In order to reach these projections, by our calculations, the economy will need to add 385,000 jobs each month from now through December 2010 and 323,000 each month from now through December 2011.



These already seemingly high numbers appear even more extraordinary when taking the government’s temporary hiring of census workers out of the equation. Also, in the 3 months since the FOMC’s prior meeting, unemployment projections became more optimistic: The average expected unemployment rate for this year dropped 0.3 percentage points from 9.6% to 9.3%." With every month that the economy keeps not adding the number of needed people to hit the target rate, the back end just gets heavier, thus making the attainment of the Fed's expectations ludicrious.Also today, the revised GDP number of 3.0% came in, well below both estimates (3.4%, and 3.7% by Goldman Sachs as pointed out two days ago), and below the initial read of 3.2%. Time to get those QE2.0 printers ready.

 

[dwdollar]

You've got to be kidding me... Take a look at the intraday so far...

The whole thing is a farce.

 

[MsDoodahs]

Best part of this on the numbers released this morning... CNBC Pump monkey, Steve LIESman states: " "No, these numbers are wrong. They must be wrong" simply incredible

I saw that, too! Unreal....and sad...

 

[Cowlesy]

I invested in Mike Church by purchasing Sirius/XM stock (not very much of it because it's a dollar stock), but I am up a nice 14% right now today

 

[HOLLYWOOD]

WOW! This thread has broke the 100,000+ VIEWS mark!

High visibility Very Kewl

 

[audienceofone]

Dont look now.....
On Drudge in red Spains credit rating has been cut because of massive debt.

And 100,000 views is awsome!
Soon we will pass CNBC and Bloomberg hahaha

 

[HOLLYWOOD]

Rally ON... PPT in play this morning to keep the dow above 10K and not to spool the fiscal natives.

Worst Memorial Weekend at the Movies in 15 Years



http://www.dailyfinance.com/story/company-news/hp-layoffs-enterprise-services/19498441/

Euro hits new 4-year low against dollar


(AP) – 3 hours ago
BERLIN — The euro hit another four-year low against the dollar on Tuesday as worries that European banks could still face large loan losses next year added to concerns about the continent's economic outlook.
The euro hit $1.2112 in European trading — its lowest since it sank as far as $1.2029 in April 2006 — before pulling back up to $1.2169, still below the $1.2243 it bought a day earlier.

[h1]HP to Lay Off 9,000 in Enterprise Services Revamp[/h1]
By DOUGLAS MCINTYRE Posted 9:35 AM 06/01/10 Company News, Technology, Hewlett-Packard, IBM
Comments: 2 Print Text Size A A A EmailMore

Hewlett-Packard (HPQ) announced Tuesday that it would put $1 billion into its enterprise services division -- and lay off 9,000 workers in the process. In the last quarter for which it has reported results, which ended on Jan. 31, HP had revenue of $21 billion and net income of $2.3 billion. The enterprise unit provides consulting, outsourcing and technology services.

HP's 10-Q shows that the revenue from the division was $8.7 billion, down slightly from the same period a year ago. Operating income was $1.3 billion. So, the business is critical to HP's success, but it isn't doing terribly well.

The enterprise operation is part of HP's plan to diversify beyond hardware and become more competitive with rival IBM (IBM). HP bought information-technology consulting firm EDS in May 2008 for $13.1 billion. In March 2009, HP said it would eliminate 24,600 jobs during the integration of EDS -- but it's not entirely clear whether the new layoffs are a subset of those or in addition to them.

Say What?

Describing the new initiative, HP said it "will invest in fully automated, standardized, state-of-the-art commercial data centers built on its Converged Infrastructure and operated by its industry-leading management software. Leveraging its experience from its own IT transformation, HP will enable clients to migrate their applications to these modernized infrastructure platforms, allowing them to run their businesses faster and more efficiently."

That description is vague enough so that many observers outside the company may not fully understand HP's plans.

HP will take a charge of approximately $1 billion over several years that will be included in its GAAP financial results. Once completed, this transformation is expected to generate annualized gross savings of approximately $1 billion and net savings after reinvestment in a range between $500 million and $700 million, the company said.

A Net Loss of 3,000 Jobs/ YEAH... RIGHT

On the plus side, two-thirds of those layoffs are expected to be offset by growth elsewhere in the company: According to HP's 8-K form, filed with the SEC Tuesday: "During that same period, HP also plans to replace approximately 6,000 of those positions to increase its global sales and delivery resources." It's all about the bottom line... that will set the baseline for any new hires.

Still, that will be cold comfort for those losing their jobs. The era of big layoffs was supposed to be over now that the economy has begun to recover. HP apparently didn't get the memo.

See full article from DailyFinance: http://srph.it/9JNVMJ

 

[Todd]

The U.S. Economic Collapse Top 20 Countdown

great article

http://theeconomiccollapseblog.com/archives/the-u-s-economic-collapse-top-20-countdown

20 - Gallup's measure of underemployment hit 20.0% on March 15th. That was up from 19.7% two weeks earlier and 19.5% at the start of the year.

19 - According to RealtyTrac, foreclosure filings were reported on 367,056 properties in the month of March. This was an increase of almost 19 percent from February, and it was the highest monthly total since RealtyTrac began issuing its report back in January 2005.

18 - According to the Bureau of Labor Statistics, in March the national rate of unemployment in the United States was 9.7%, but for Americans younger than 25 it was well above 18 percent.

17 - The FDIC's list of problem banks recently hit a 17-year high.

16 - During the first quarter of 2010, the total number of loans that are at least three months past due in the United States increased for the 16th consecutive quarter.

15 - The Spanish government has just approved a 15 billion euro austerity plan.

14 - The U.S. Congress recently approved an increase in the debt cap of the U.S. government to over 14 trillion dollars.

13 - The FDIC is backing 8,000 banks that have a total of $13 trillion in assets with a deposit insurance fund that is basically flat broke. In fact, the FDIC's deposit insurance fund now has negative 20.7 billion dollars in it, which actually represents a slight improvement from the end of 2009.

12 - The U.S. national debt soared from the $12 trillion mark to the $13 trillion mark in a frighteningly short period of time.

11- It is being reported that a massive network of big banks and financial institutions have been involved in blatant bid-rigging fraud that cost taxpayers across the U.S. billions of dollars. The U.S. Justice Department is charging that financial advisers to municipalities colluded with Bank of America, Citigroup, JPMorgan Chase, Lehman Brothers, Wachovia and 11 other banks in a conspiracy to rig bids on municipal financial instruments.

10 - The Mortgage Bankers Association recently announced that more than 10 percent of all U.S. homeowners with a mortgage had missed at least one payment during the January-March time period. That was a record high and up from 9.1 percent a year ago.

9 - The official U.S. unemployment number is 9.9%, although the truth is that many economists consider the true unemployment rate to be much, much higher than that.

8 - The French government says that its deficit will increase to 8 percent of GDP in 2010, but by implementing substantial budget cuts they hope that they can get it to within the European Union's 3 percent limit by the year 2013.

7 - The biggest banks in the U.S. cut their collective small business lending balance by another $1 billion in November. That drop was the seventh monthly decline in a row.

6 - The six biggest banks in the United States now possess assets equivalent to 60 percent of America's gross national product.

5 - That is the number of U.S. banks that federal regulators closed on Friday. That brings that total number of banks that have been shut down this year in the United States to a total of 78.

4 - According to a study published by Texas A&M University Press, the four biggest industries in the Gulf of Mexico region are oil, tourism, fishing and shipping. Together, those four industries account for approximately $234 billion in economic activity each year. Now those four industries have been absolutely decimated by the Gulf of Mexico oil spill and will probably not fully recover for years, if not decades.

3 - Decent three bedroom homes in the city of Detroit can be bought for $10,000, but no one wants to buy them.

2 - A massive "second wave" of adjustable rate mortgages is scheduled to reset over the next two to three years. If this second wave is anything like the first wave, the U.S. housing market is about to be absolutely crushed.

1 - The bottom 40 percent of all income earners in the United States now collectively own less than 1 percent of the nation’s wealth. But of course many on Wall Street and in the government would argue that there is nothing wrong with an economy where nearly half the people are dividing up 1 percent of the benefits.





And the article has plenty of links to substantiate the claims.

 

[HOLLYWOOD]

US Treasury's WEBSITE for Daily monthly statements has been down all day!

Cooking The Books offline? LOL!

http://www.fms.treas.gov/

www.[B]treasury[/B]direct.gov/govt/reports/pd/mspd/mspd.htm

 

[squarepusher]

i like my books medium well, with a side of baked potato

 

[HOLLYWOOD]

 

[AmericasLastHope]

NY Nearly Goes Broke Again, Delays Paying Bills

New York state delayed paying $2.5 billion of bills as a short-term way of staying solvent but its cash crunch could get even worse in August and September, Budget Director Robert Megna said on Tuesday.

"Had we not done that, I think we would have been close to broke," Megna told reporters in Albany. This is the third time since December the cash-poor state has withheld funds.

This time, the state's general fund, which counts everything but federal aid and some specific revenues, ran in the red by about $500 million to $600 million, Megna told reporters.

The state was able, however, to borrow from other funds, including the short-term investment fund. About $1.5 billion of the withheld funds must be paid to schools in June. The rest of the total could be paid in July.

"The next big bottleneck is in August and September," Megna said, adding that tax revenues have recently improved slightly, which is a slight bright spot.

http://www.cnbc.com/id/37463314

 

[Sarge]

H,

Here you go. It looks like receipts, less refunds, ran around 107,000M vs. last year May 117,000M

Have fun tearing it apart. It is ugly. June should be the wake up call.

https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=10052800.pdf

I wonder what accounting gimmick they will use on the final monthly report.

I am seeing jobs in the hundreds getting cut. Citi group is getting ready to close 376 branches and cut 720 jobs. AT & T to cut 136 in East Bay. Morgan Stanley to cut 200 brokers and consolidate offices.

 

[Sarge]

Jobless Claims 453K. Consensus was for 450K. Prior 460K.

Not getting much better folks. A bunch of job cuts on the way.

Ford to close St. Paul plant. 750 jobs will be impacted. LA shutters 200 class rooms. Yep all is well.

Wait for the Teacher and PD cuts on the way. Let alone what happens when people loose their jobs due to oil on the gulf. 21M people work and live in the gulf States.

Anyone working on that clean up better insist on the proper equipment for health.

 

[HOLLYWOOD]

[h3]Treasury Supplementary Financing Program (SFP)[/h3]
The SFP, the U.S. Treasury's program for assisting with the balance sheet of the Federal Reserve, is making a sudden and dramatic comeback.
First a little background. Whenever the Federal Reserve buys an asset or makes a loan, it simply credits new reserve deposits to the account that the receiving bank maintains with the Fed. The bank would then be entitled to convert those deposits into physical dollar bills that it could ask the Fed to deliver in armored trucks. Banks currently hold $1.2 trillion in such reserves, or more than a hundred times the average level of these balances in 2006, and more than the total cash the Fed has delivered since its inception a century ago. The traditional way the Fed would bring those reserves back in (and thus prevent them from ending up as circulating cash) would be to sell off some of its assets.
The Treasury's Supplementary Financing Program was introduced in the fall of 2008 to assist the Fed in its massive operations to prop up the financial system at the time. The SFP represents an alternative device by which the Fed could reabsorb the reserves it created. Essentially the Treasury borrows on behalf of the Federal Reserve, and simply holds the funds in the Treasury's account with the Fed. When a bank delivers funds to the Treasury for purchase of a T-bill sold through the SFP, those reserve deposits move from the bank's account with the Fed to the Treasury's account with the Fed, where they now simply sit idle, and aren't going to be withdrawn as cash. In a traditional open market sale, the Fed would sell a T-bill out of its own portfolio, whereas with the SFP, the Fed is asking the Treasury to create a new T-bill expressly for the purpose. But in either case, the sale of the T-bill by the Fed or by the Treasury through the SFP results in reabsorbing previously created reserve deposits.
The Treasury's press release says only this:

Treasury anticipates that the balance in the Treasury's Supplementary Financing Account will increase from its current level of $5 billion to $200 billion. This will restore the SFP back to the level maintained between February and September 2009.
This action will be completed over the next two months in the form of eight $25 billion, 56-day SFP bills. Starting tomorrow, SFP auctions will be held each Wednesday at 11:30 a.m. EST, unless otherwise noted.
​

So this is going to be implemented immediately and on a large scale. But why? If the goal were indeed to drain reserves, the Fed could do this by selling some T-bills out of its own holdings, currently some 3/4 trillion, or could do this with reverse repos or the Term Deposit Facility, not to mention selling some of its trillion dollars worth of MBS. And just two weeks ago Fed Chair Ben Bernanke seemed to be saying that such steps were still far in the future, and did not even mention the possibility of a surge in the SFP.
You want more information? We've got this:

"We're committed to working with the Federal Reserve to ensure they have the flexibility to manage their balance sheet," a Treasury official said on background.
​

Anonymous and on background in order to say nothing at all? What's the big secret?
An alternative hypothesis is that the Fed intends not to retire reserves but instead to expand its balance sheet without increasing reserves, that is, use the funds to make new asset purchases or loans with the SFP sterilizing the operations. But what loan is the Fed about to make or asset is it about to purchase? WSJ Real Time speculates:

The practical effect of this move is that the Fed will be able to finish $1.25 trillion of purchases of mortgage backed securities by the end of March without printing more money. Instead, it will have the cash on hand from the Treasury deposits to fund the purchases. As of February 17, the Fed's portfolio of mortgage backed securities had reached $1.025 trillion, roughly $200 billion short of the objective.
​

But I'm puzzled with how that reconciles with this statement from the Federal Reserve Bank of Atlanta on February 10 (hat tip: Calculated Risk):

The Fed purchased a net total of $12 billion of agency-backed MBS through the week of February 3, bringing its total purchases up to $1.177 trillion, and by the end of the first quarter 2010 the Fed will have purchased $1.25 trillion (thus, it is 94% complete).... the Fed needs to purchase only about $9.2 billion per week through March 2010 to reach its goal.
​

The discrepancy seems to arise from the fact that the Fed's February 18 H41 release listed its MBS holdings on Feb 17 as $1,025 billion, or $152 billion less than the $1,177 billion that the Federal Reserve Bank of Atlanta claimed the Fed had purchased as of Feb 3. The Atlanta numbers seem to be the accumulation of weekly net MBS purchases (that is, gross purchases minus gross sales) reported by the Federal Reserve Bank of New York. Perhaps it takes a while between the time the NY Fed executes the purchases and the time they are settled and show up on the Fed's H41 balance sheet, or perhaps there is some separate device for accounting for maturation and prepayment on the MBS. If the latter, then at a minimum the WSJ and FRB Atlanta had a different understanding of how far the Fed intended to go with its MBS program. And under either interpretation, if the $200 billion in new funding is just for something that was already etched in stone weeks ago, the sudden announcement that it is going to be implemented with an immediate resurrection of the SFP seems all the more mysterious.
WSJ Real Time offers this perspective from Lou Crandall:

The intention always was to resume SFP issuance when the debt ceiling was increased on a permanent basis, which finally happened earlier this month.
​

So maybe this has been in the cards for a while, with the apparent suddenness and clunkiness from the perspective of an outsider like me having an explanation in the fact that the political negotations behind such a move may in fact force a certain suddenness and clunkiness on steps that the Federal Reserve on its own might wish to see implemented with more transparency and predictability.
Still, one is led to wonder whether there might be a connection between today's announcement about the SFP and last week's announcement of an increase in the Fed's discount rate. Numerous Fed officials encouraged us to interpret the latter as a routine and technical management tool. Are the discount hike and SFP renewal separate and purely technical developments, or is something more involved?
Perhaps Bernanke's remarks tomorrow will give us more to go on.

 

[HOLLYWOOD]

Jobless Claims 453K. Consensus was for 450K. Prior 460K.

Not getting much better folks. A bunch of job cuts on the way.

Ford to close St. Paul plant. 750 jobs will be impacted. LA shutters 200 class rooms. Yep all is well.

Wait for the Teacher and PD cuts on the way. Let alone what happens when people loose their jobs due to oil on the gulf. 21M people work and live in the gulf States.

Anyone working on that clean up better insist on the proper equipment for health.

The number of people continuing to claim benefits rose by 31,000 to 4.67 million.


The claims figures come a day before the Labor Department is scheduled to release the May jobs report. Analysts expect that report to show the economy added 513,000 jobs, the most in 26 years. But at least 300,000 of those positions are likely to be temporary Census workers.


[h1]Hershey Co. union faces losing 600 Jobs[/h1]
http://www.pennlive.com/midstate/index.ssf/2010/06/hershey_co_union_faces_possibl.html

 

[Sarge]

H,

Gaylord to layoff 1,700 employees. Due to the flooding it is taking longer than they thought to repair Opryland.

Census workers gone the middle of this month. NY still playing kick the can by delaying 2.5B in payments for a couple of months. Duh, Try they are broke. Two more months and it will be kick the can again. Try not paying your bills to NY for two months.

 

[squarepusher]

in anecdotal comments, my company recently laid off about 90% of its staff, including myself.

I thought the economy was improving too and I dodged the bullet!

 

[Sarge]

SP,

So sorry to hear that. Good luck on finding a new job.

I was asking my barber what he is hearing and it isn't good.

There are a bunch more job cuts coming when States deal with reality on falling revenues.

 

[HOLLYWOOD]

SP,

So sorry to hear that. Good luck on finding a new job.

I was asking my barber what he is hearing and it isn't good.

There are a bunch more job cuts coming when States deal with reality on falling revenues.

ONLY IN CALIFORNIA... CHECK THIS CRAP OUT!

Despite government workers layoffs and furloughs... the budgets are going up.

http://www.sacbee.com/2010/05/26/2776967/county-layoffs-hit-lower-paid.html

The ranks of the highest-paid employees in Sacramento County rose in 2009 even as the county laid off hundreds of low- and middle-income workers, cutting programs and services in the process.


The number of county workers earning a base salary of $100,000 and up was about 14.5 percent higher in calendar year 2009 than it was in 2008, according to an analysis of personnel data obtained through a Public Records Act request.


During that same period, the number of workers earning between $30,000 and $39,999 a year dropped 17 percent.


And there was a nearly 19 percent drop in those earning between $20,000 and $29,999.


"That tells me the rich are getting richer," said Ted Somera, executive director of United Public Employees Local 1, which represents about 3,900 county employees. "It's the working class that are getting laid off."
Struggling through a second year of budget cuts, the county laid off more than 700 workers in 2009 and eliminated positions for scores of temporary and part-time hires.
Taken together, nearly 1,000 fewer workers drew a paycheck from Sacramento County in 2009, a drop of about 6.2 percent.


However, the base salary for all workers combined in 2009 was $801.4 million – slightly more than the $799.3 million Sacramento County paid in 2008. <=== Expense Up, WTF?



This means the loss of 1,000 workers didn't quite make up for the salary bumps that went to some of those left behind. The job cuts still saved money, however, because the county did not need to pay benefits for those who left the work force.
The decline in the number of lower-paid workers and rise in the number of higher-paid holds true in various slices of the salary data:


• In 2008, 676 county employees earned a base salary of $100,000 or more. That number increased to 774 in 2009, a 14.5 percent increase.
• In 2008, 5,167 county workers earned a base salary of $60,000 or more. That number increased to 5,877 in 2009, a 13.7 percent increase.
• In 2008, 8,789 county workers made between $20,000 and $59,999. That number dropped to 7,609 in 2009, a 13.4 percent decrease.
The unions and county officials offered competing explanations for the trend.
Union leaders say the county has gotten top-heavy because it focused its job cuts on frontline workers.



County officials say union contracts are to blame. Seniority rules and bumping rights – the right of a senior worker targeted for layoff to bump a less-senior worker out of a job – helped push lower-paid workers out the door, officials said. Contracts also required pay increases for most unionized employees.
In 2009, about 80 percent of the county work force got a 2.9 percent cost-of-living increase as their contracts required, said Steve Szalay, who became interim county executive in January.
Another 18 percent got additional raises as scheduled. Those raises helped push people into upper pay tiers, Szalay said.
Unlike rank-and-file workers, managers took pay cuts in the form of furlough days in the 2009-10 fiscal year, he said.
Of the nearly 100 workers who crossed into the $100,000 salary club, 71 got there through negotiated salary adjustments, Szalay said.
"It was a result of bargaining unit increases and not necessarily higher-level management," he said.
The cuts enacted from 2008 to 2009 happened under former County Executive Terry Schutten. Szalay said the budget he will propose to the board next month includes a larger percentage of cuts to managers and top-tier employees than to frontline staff.


Sacramento County is facing a projected general fund shortfall of $166.5 million in the fiscal year that starts July 1. It marks the third straight year the county has faced deficits greater than $100 million.

Read more: http://www.sacbee.com/2010/05/26/2776967/county-layoffs-hit-lower-paid.html#ixzz0poxf8mKQ
​