How to Puff Up Earnings, Goldman Sachs Style http://bit.ly/1mjiGW Truly astounding . . the word Chutzpah simply does not do it justice . . .

These figures confirm what I suspected - People ran out in January and February and used the hundreds of millions of dollars of gift cards they got for Christmas, out of concerns that the retailers would file for bankruptcy and the cards would be worthless. We all saw those e-mail message running around the web that certain major retailers were closing after the first of the year and to use the gift cards or lose them.

The increases in January and February were an accounting gimic - the gift cards were sold in November and December but the accounting rules do not permit the retailer to recognize the income until the cards are used. November and December retails sales were artificially lower due to the gift card sales (that is the month the retailer took in the cash), and January and February were artificially higher (more goods went out the door but the figures just moved on the balance sheet). They still have not figured out how much the increse in gift card sales skews the monthly retail sales figures.

It is worth pointing out over and over and over that all the Fed's zero interest rate and easing of every imaginable type and blatant income redistribution to the cronies has had absolutely zero, zip, nada... NO effect toward resolving our fundamental economic problems. This in spite of the enormous amount of damage and dislocation it is causing.
Bernanke and the Fed did not see problems coming two years ago, blew off everybody who did see them, then misdiagnosed the situation and continue to this day to apply incorrect remedies.
A doctor who was that ignorant and stubborn would have killed all his patients by now.
Even if Bernanke, Geithner and Summers were out tomorrow they have done damage that cannot be undone, possibly for decades. And we have no progress other than lies and gloating from the big bankers that our gift to them constitutes a profit that they 'earned'.

Pravda was the Soviet mouthpiece back in the day. One could easily discount any news they reported, because it was all propaganda, nothing more...

Pravdamerica in the guise of the talking heads on tv, is our version.

Great Carly Simon aggiornamento.

Arbitrage Macht Froh!

It is worth pointing out over and over and over that all the Fed's zero interest rate and easing of every imaginable type and blatant income redistribution to the cronies has had absolutely zero, zip, nada... NO effect toward resolving our fundamental economic problems. This in spite of the enormous amount of damage and dislocation it is causing.

The Free Lunch Economists say otherwise.

"taxing grandma to pay Goldman"

"Many retirees depend on interest from certificates of deposit. Those rates are down dramatically, and as CDs expire retirees are compelled to reinvest their savings at lower rates and live on less............"

Inflationary and monetary policy benefit the financial industry with the side effect of destroying the middle class - the banks are experts at making money from deliberate manipulation of the money supply; the average Joe/Jane has no clue about these things. So it ends up creating this huge asymmetry and being a giant conduit to suck money straight out of the real economy and into the loving arms of Wall Street.

As you have witnessed over the past few decades of Free Lunch Economics.

good read

http://hussmanfunds.com/wmc/wmc090413.htm

Here's an example of Goldman's double-talk on the AIG bailout.

http://online.wsj.com/article/SB123967007321015621.html

My question is this: if GS had both a Plan A and a Plan B with respect to AIG, then why did the government have to bail out AIG? Goldman supposedly spent $100 million hedging itself (Plan B). So what if collecting against these hedges would have been costly to Goldman's counter-parties? Perhaps they in turn were hedged with their own Plan B.

All of this just illustrates the folly of letting the government jump into the middle of commercial contracts between sophisticated institutional investors.

These numbers along with the PPI are a "buy, buy, buy" signal, because we don't need to worry about inflation.

If say, the powers that be wanted to cash out and stick their filthy lucre into gold bullion, but had to do it rather clandestinely, wouldn't 405 tons coming up for sale all of the sudden @ the IMF, provide the proper vehicle to get there?

Guess we know now why Goldman announced early last night, and set the price of their secondary in pre-market.

I'm sure they had no idea what those retail numbers would look like...

"At what point does Wall Street then collapse on itself?
If they're so smart, why are they putting themselves out of business?"

That's a really, really good question. They really need a strong middle class for the US to prosper, but they work very hard to undercut it. In addition, some of the most blockheaded, tin-ear statements imaginable have recently come out of the mouths of top bank execs - like announcing 'record profits' right into the face of increasing unemployment and pending BKs. I think that the answer is that these guys really are not very smart at all; they are simply good at using their carbide-tipped elbows to climb to the top of their peer group. At base, they seem to be amoral and endlessly greedy, short term, with not a clue about the long term. It is a crowd of people we would be better off without... and since I really believe that the Fed and Treasury are heading down the wrong track, i also really believe here will be a train wreck and someday they will be gone.

Local news paper poll asked if you have had your wages reduced? 25% said yes. That is a lot of spending money and sales tax money gone from the local economy. We are in pretty good shape here in the heartland.

So what country do all the pre-felons flock to?

I guess it boils down to extradition treaties.

Felix, interesting if sales were indeed the weakest during the last two weeks of March, since that is when the market was soaring and everyone was chirping that the recession was over now and it was all sunshine and puppy dogs from here on out.

Waffen GS wrote on Tue, 04/14/2009 - 7:06am.

Arbitrage Macht Frei wrote: "Your commode. it was in the shade of apricot"

Commode: I do not think it means what you think it means.
=================================================

As per Thain's $35k gold-colored commode.

The powers that be need an excuse to bugger the buck, to enable their dollar debts to be greatly reduced to creditors abroad.

They must of course, individually rid themselves of their own holdings and turn it into the next best thing, financially.

So when does it happen?

Teaching jobs are being ruthlessly cut by local governments in California, as teachers don't put up much of a fight, and class loads are doubling up.

A friend tells me that the pivotal year for kids: 1st and 2nd grade, which used to have 15 students per teacher, is now closer to 35, @ her school.

CR do you still feel that PCE is bottoming?

This supports other evidence that economic activity is stabilizing at a reduced level. It seems reasonable that derivative effects from the increasing unemployment have yet to make an impact. I suspect more gradual declines from here rather than the drop off unless we encounter another credit storm or currency crisis.

Well the story of the Great Depression is one of destructive feedback loops:

Declines in economic activity would trigger another wave of credit problems leading to another wave down in the economy despite previous signs of stabilization.

This is the idea behind having so much government spending and bailouts to halt the credit problems so they don't lead to additional down waves.

The problem with that idea is that it simply transplants the credit problems to the government/taxpayer and so may only transform a private sector/consumer credit crisis into a public credit crisis.

Borrowing and bailouts do not make problems go away, they merely relocate them.

This retail number is very negative because we were supposed to have a increase in sales. Things don't look much better for April

Dead Monkey

Texas to Northeast: Thanks for nothing you Wall St schmucks.

The Anti-Christ will be handsome and debonair, but will smell of fecal matter.

All this talk about a New Regime (Reich)...Seems like a bit of a reminder.

In in Germany circa 1932 times were tough, the leadership left with no options caved and decided to let the people blame those who were better of. Take what hey have!, we can rebuild or nation clean. We can confiscate what wealth they own and start anew, get rid of them, they are no people. They are all of another race. We are better. They are Jews.

Hmm...

...The following graph shows the year-over-year change in nominal and real retail sales since 1993.
...Year-over-year change in Retail Sales Click on graph for larger image in new window.
...To calculate the real change, the monthly PCE price index from the BEA was used...

From Wikipedia : "The PCE rises about 1/3% less than the CPI, .... This may be due to the failure of CPI to take into account substitution."

And as we know the CPI assumes that american consumers neither eat or drink or use energy !
What a nice american statistic .
How do you spell " fraud , deception , deceit , scam , cheat , humbug , fiddle , imposture , trickery , defraud , swindle , amboozlement " ? You guessed it : "A-m-e-r-i-c-a" !

This board provides a wealth of worthwhile information. I'm truly grateful for it. But, I believe most here are incorrectly assuming the end of the world at the same time while complaining about the game is rigged (as if you didn't know this already).

What if this situation is a 7 - 8 out of 10 (worldwide deep recession and crisis) on the scale of the GD being a 9.5 (worldwide calamity) and the deeper recessions of the last century being a 5 - 6 (73-74, 80 -82 etc).

To Crazy's point, the consumer's not coming back in the US...too much credit has been taken away, unemployment increasing for the coming year(, temporary energy savings won't likely remain, home atm's are gone. Wealth affect in full affect with homes and investment portfolios/401ks. None of this should improve in the coming year and how long would you expect prior to it "normalizing" back to 2003 - 2007 levels...I assume at least a decade, if ever.

The world is flat and the world has changed. Competition has increased, wages will permanently decline, we might have more anouncements ie Sallie Mae to bring back a portion of oversees jobs as due to the above, talent pool increased for jobs available. US standard of living is on permanent decline. Work week hours will increase.

Retailers without distinguishable/remarkable brands will suffer greatly. Those branding and running well, WalMart, Target, McD's, Nordstrom, Apple, Best Buy..those stuck in the middle of branding hell, JCPenny, Macy's, probably Sears etc. Online shopping will become more prevelant, mall shopping on permanent decline. Most retailers will be in the midst of permanent decline.

It's not the end of the world, just a brand new one imo.

Also if the uprising puts in a populist state they next guys might decide to swear a "letter of marque and reprisal" on the SOB's.

Its perfectly legal under the US Constitution to take a hit out on them -- 10 kilos gold (or diamonds or whatever) for the head -- that +10% of all the assets we seize if you bring them in alive.

After a couple of years in Supermax I can guarantee they'll spill and even a big bleeding heart, ACLU guy like me probably wouldn't object to a bit of the old waterboarding either.

"make you think we can discount more shocks?"

"I conclude that continued, systemic shocks are likely. A growing number of participants are sidelined until reasonably convinced the storms are over. Critical mass realization of economic decline could itself lead to another drop off. Perhaps another characterization is steady deterioration with the potential for continued shocks leading to drop offs."

I agree. The only real path out of the mess is the big three (not the auto industry) and I see no movement in any of those directions

#1 Fair trade with peers only -- W make it here, buy it here and sell it here and unless they buy our stuff, they don't get to sell us stuff. The exception is of course raw materials but when it comes to most everything else -- well yes you can outsource that help desk but our calls will never reach it and so on. To quote Bob Heinlein -- Specialization if for Insects

#2 Direct redistribution of cash to US citizens. 12k a year for everybody 18+-- no taxes, fees or debts allowed + health care

#3 Cut the work week to 30 to count for improve efficiency

Those rules would make the economy grow pretty fast