The Market Ticker

Those arrogant pricks over at The Fed thought they could ignore a Congressional request for information on the BAC/Merrill merger.

Note that they didn't say "nuts", they apparently ignored the request.

Well, there is now a subpoena floating over toward Bernanke's office.

Here's the Bloomie article:

June 9 (Bloomberg) -- The Federal Reserve was subpoenaed by the House Oversight Committee for e-mails and documents related to Bank of America Corp.’s purchase of Merrill Lynch & Co. after the panel was unable to obtain them through a request last week.

The committee served the subpoena today, Jenny Rosenberg, a spokeswoman for the panel, said in a telephone interview. The panel is seeking the internal Fed documents for a hearing scheduled for June 11, and Bank of America Chief Executive Officer Kenneth Lewis has agreed to testify, she said.

CNBS is reporting that The Fed has said they will "respond", which may or may not mean "comply".

We shall see.

Remember we had a graph trotted out with Obama's economic team when they proposed their "stimulus", and projected unemployment (and GDP!) with and without their stimulus?

Well, another blogger has plotted that first graph against actual results.

Keep in mind - the stimulus passed, of course.

Here's the graph:

How dumb can you be, America?

You were sold the stock market when that "stimulus" plan was announced.  You were sold specific projections on unemployment, which of course tie directly to the economy and its health.

Employment is, in fact, everything.  It is payments on credit cards, it is payments on mortgages, it is ability to buy a new house, it is the ability to buy a car, pay for your iPhone and so on.

Without employment - sustainable, high-quality, high-paying employment that provides at least a solid middle-class wage, there is no economic stability, say much less economic growth.

Period.

Now look at the so-called "stimulus" projection, both with and without, and then take a gander at the actual results.

Did you buy the 666 low in the SPX?  Good.

Are you buying into this "green shoot" crap today, after a 40% rise in the market that was sold to you on the premise, in no small part, that the above graph, with the stimulus program would in fact pass?

You now have the actual results for five months against so-called "projections".

Who "sold" that projection to you?

The Administration.

Goldman Sachs and other 'analysts' who have been raising earnings estimates and projecting "the end of the recession."

Big banks who have had a lot of new stock to sell into the market so they can avoid being shut down by the government as a consequence of being bankrupt.

CNBC, owned and operated by GE - who is rather interested in you buying a new refrigerator or washer - made by them, of course.

How many of those fine folks who want to sell something to you have bothered to mention the facts against the entire premise upon which they claim that the market is a good value here and that you should buy stocks? That is, have any bothered to show you the above chart?

To compare projected results upon which their recommendations are based against actual results in the economy?

Just one more question: What do you think earnings, that is, profits, and thus stock prices, will look like when one adjusts those expectations for the actual unemployment rate as opposed to the "projections" against which all those "strong buy" recommendations were made?

Disclosure: Short the broad market.  This one is best filed under the category labeled "duh".

PS: This is a quick pictorial representation of what's about to happen:

It takes some real BALLS to cough up this load of crap:

WASHINGTON - President Barack Obama on Tuesday challenged Congress to force itself to pay for new spending as it goes rather than sink the nation deeper into a debt, calling it a matter of public responsibility. Republicans lashed back that Obama is no voice of fiscal restraint as the deficit soars.

I'll be interested in that if and only if it is retroactive to Obama's submitted budget, and holds deficits to no more than George W. Bush's average deficit.

Remember, we're not going to be fighting any more wars, right?  So no need for big deficits, right?

Oh wait - we're going to run somewhere around $1.8 trillion in deficits this year, and Obama wants to talk about "PayGo"?

To increase the deficit from HERE?

Who cares?  A deficit four times larger than ever run before, and now we're going to say "we'll cap it here"?

This is a joke, right?

No, its not:

The deficit figures flow from the deep recession, the Wall Street bailout and the cost of the economic stimulus bill. Obama has defended the massive stimulus plan as essential to helping pump some life back in the economy, one that is still shedding jobs but showing more signs of life in recent weeks.

But that "stimulus" and "bailout" won't and mathematically cannot work, because the excessive debt is still there, having been simply shifted to The Federal Government instead of forced to default on the balance sheets of the imprudent where it would have blown them to smithereens.  Instead, it will blow all of us to smithereens.

How in the hell does anyone support this crap?  How does this sort of thing not lead to immediate jeers from the peanut gallery, the Press and the people?

How does this sort of flat LIE not lead to 100,000 people surrounding 1600 Pennsylvania Avenue with signs, pitchforks and torches - tomorrow?

We are truly a nation of sheep, and we are not going to get sheared this time - we're going to get slaughtered and eaten.

Talk about stupid:

June 9 (Bloomberg) -- Former House Speaker Newt Gingrich said President Barack Obama’s plan to fix the economy through stimulus spending and government intervention to boost companies like General Motors Corp. has “already failed.”

And this is distinct from threatening Congress with "martial law" and managing to steal $700 billion for a "revolving charge card" in 2008, along with Paulson's bone-smoking games with Donaldson of the SEC in 2004, exactly how?

Let us not forget this essential fact:

But for the actions of Henry Paulson before the SEC in 2004, specifically, the lobbying he personally engaged in that led to the removal of broker/dealer leverage limits that formerly constrained investment banks to 12:1 gearing, neither Bear Stearns or Lehman, both of whom were covered by the former limit, would have failed.

Had Henry Paulson not been able to "save" his former employer Goldman by siphoning more than $13 billion through AIG, and more than $100 billion in total, to cover bets Goldman made to "hedge" which Goldman either knew or should have known AIG did not have the capital to back, Goldman might have also blown up along side Lehman and Bear Stearns!

Gingrich is 100% full of crap blaming Democrats for this and trying to deflect attention from his own party's outrageous and radical failures in this regard.

Senate Minority Leader Mitch McConnell of Kentucky said Obama has a “radical agenda.” Republicans have “watched them take over banks, insurance companies, auto companies,” he said, “and now they want to take over your health care.”

As distinct from the bailout of GM and Chrysler that happened by the Republican Treasury Department during George Bush's Presidency, along with the guaranteeing or otherwise backstopping of nearly $10 trillion in bad paper by your Treasury department and Fed during the Bush Presidency?

“We are becoming a weak nation,” said Voight, calling Obama a “false prophet.” Republicans need to find their way back to power to free the nation from “this Obama oppression,” he said.

Yeah, ok.

You folks in The Republican Party seem to have forgotten that "conservative" does not mean simply shooting terrorists.

It also includes:

• Locking down the goddamn southern border and deporting the illegal immigrants, along with arresting all their employers, instead of sucking off your corporate bribery sources who want illegal immigrant labor because they can cheat the tax man, pay less than minimum wage, and screw those who want to come to America legally, thereby destroying the wage base of this country and the tax base at the same time, pocketing the difference.
• NOT bailing out the failed.  When you come to The SEC and ask for leverage limits to be removed and then blow up as a consequence the proper remedy for that sort of stupidity is called BANKRUPTCY.
• NOT spending more than you make.  Medicare Part "D" anyone?  Kennedy's education bill anyone?  You want to spend more, you figure out how to obtain the revenue to do so.
• NOT ordering states to stand down in their protection of citizens from predatory lending, never mind the OIG's report showing that under Bush's government OTS actively conspired with thrifts to commit accounting fraud and thereby cost the FDIC insurance fund more than 2/3rds of its funds!

In short, The Republican Party has become the party of fraud and abuse.

That, Mr. Gingrich, is why Republicans lost in November.

If I'm going to get bent over the table I will always choose the guy who tells me up front he's going to do it so I have time to assume the position and get ready for the assault, as opposed to being randomly and repeatedly raped by those who run on a platform of "conservatism" when in fact their policies amount to raw theft and fraud from The American Taxpayer for the benefit of those who generate the largest amount of bribes, er, "campaign contributions."

Go %#@^ yourself (perform an anatomically-impossible act) Mr. Gringrich.

Oh, and don't call me again looking for money.  I'll simply repeat what I wrote here, and be none-too-polite about it.

Disclosure: I'm a lifelong Republican but I cannot vote for a party that practices and supports "in your face" theft, fraud, and financial rape.

When the "Stress Tests" were announced, which not coincidentally was a big part of what led to the bank stock (and broad market) rally, I said at the time:

Once again, America, you've been whitewashed by a bunch of insiders who have infested our government and then between the executives and government have conned you.

Indeed, Ken Lewis was on CNBC this morning and all-but-admitted that "the rules didn't apply", a fairly strong implication (if not an admission) that the law was simply ignored when it was inconvenient.

What makes you think its being followed now?

Further, Lewis also said that if unemployment continues to ramp neither he or any other bank will find it reasonably possible to make money due to default rates on consumer loans, especially unsecured paper such as credit cards and that the government will find that "politically unacceptable."

Well? 

We're about to get an unemployment number that will be within a point of the worst case scenario in these "stress tests", and the true internal unemployment number (U-6), which represents the number of people not working far better than ignoring anyone inconvenient to count is several points higher than the "worst case" - and its only May!

American Idol is almost over; I recommend exercising your rights and responsibilities of citizenship and raising hell over this faux piece of garbage that was sold to America as "hope".

Well, here we go again: I told you so!

But, the panel added, the Fed's worst-case scenario does not go far enough. For example, the "stress tests" conducted by the Fed were based on the 2009 unemployment rate average of 8.9 percent. Unemployment in May climbed to 9.4 percent.

"While no one should gainsay the potentially positive results of the tests, it would be equally unwise to think that those results reflect a diagnosis of all of the potential weaknesses or create a necessarily sufficient buffer against future reverses for the banking system," the panel wrote.

No kidding?

Folks, I keep coming up with this stuff, but before you prepare to lionize me for being some sort of "soothsayer" please understand that nothing more complicated than sixth grade math is required to understand this crap, and the facts are being intentionally hidden from you, the public.

It gets better.  Geithner has the balls to press Europe for "tougher" stress tests - on their banks:

The Obama administration wants Europeans to put their banks through more rigorous public stress tests to help ensure that the institutions survive if the economy slips from bad to worse.

Treasury Secretary Timothy Geithner will likely discuss the issue in Italy later this week during closed-door meetings with finance ministers from the Group of Eight leading nations.

So let me see if I get this right: We put forward a rigged test that is proved to be inadequately rigorous before its even run, we then "certify" the capital adequacy of our banks based on a known-bad test (after all, unemployment is already above the test levels!) and then we have the unmitigated gall to demand that Europe run more stringent stress tests?

This is some kind of joke, right?  No, in fact it is an outright scam, with all levels of our government involved, including The Fed:

The Federal Reserve said Monday that plans submitted by those banks, if implemented, would be enough to help them survive a deeper recession.

The Fed (and Treasury) lied. 

Again.

Period.

Oh, and while we're at it, how about if The Fed discloses the mark-to-market losses on their portfolio of garbage securities?

Anyone care to take the "over/under" on $100 billion?

That's what I thought.

Disclosure: Short Bernanke, Congress and The American People for putting up with this crap coming out of Washington DC.  Long Merkel - if she displays an atomic bird in Geithner's direction.