Clusterstock Chart of the Day: Black Friday Weekend Shopping

Yesterday's overwhelming response to the 2 Year T-Note Auction

www.mikenormaneconomics.org posted a link for the CNBC post below.  Reason being because Mike called it exactly like this. Late last year as the Fed began handing the bail-outs to the banks he told us (blog readers) to watch for increased demand for treasuries. He also said it would be the financial institutions at the forefront of these rallies and why -
"The money to by government securities comes from governement spending.  Where else would it come from?" 
One very important thing to note as you watch this:  Rick Santelli thinks that because the banks are buying the securities they will have less money to lend but THIS IS NOT TRUE!  Bail out money was given to the banks in order to meet reserve requirements.









Banks are NEVER lending constrained EVER.  Ask any one whose ever worked in a loan funding department and they'll tell you that a loan creates a new deposit that comes from directly from the Federal Reserve not from the holder of the note.

Labor's Days Past

America's Labor Day may be summer's last hurrah, but labor's days past were no picnic. A few generations ago, American working men and women (and often children, too) struggled just to get weekends off--let alone a long one. A few generations ago, people died when labor struggled. Example: the Pullman railway strike of 1894.

"I Owe My Soul to the Company Store"
Just south of Chicago, the town of Pullman was literally owned by George M. Pullman, manufacturer of the Pullman sleeping car used by railroads. Company brochures painted the town as a workers' paradise, "where all that is ugly and discordant and demoralizing is eliminated, and all that inspires to self-respect is generously provided."
In reality, the company town was just that, run by and for the company as a moneymaking venture. One worker said, "We are born in a Pullman house, fed from the Pullman shop, taught in the Pullman school, catechized in the Pullman church, and when we die we shall be buried in the Pullman cemetery and go to the Pullman hell."

"There Is Nothing to Arbitrate"
When depression struck America in 1893, Pullman slashed wages 25 percent, without reducing rents at company houses or prices at the company store. Some 5,000 workers and their families sank deep into the company's debt.
Finally, in May 1894, the workers went on strike. Pullman closed the plant and rebuffed all requests for arbitration. "There is nothing to arbitrate," he said. Stymied, the union called for a boycott of Pullman cars. Beginning June 26, switchmen refused to attach Pullman cars to trains. When railway officials fired the men, trainmen everywhere walked off the job. Railroad traffic across the country ceased.
Railway officials turned to the federal government for help, and got it in spades. The U.S. attorney general, a former railway lawyer, convinced the federal courts to issue a sweeping injunction against all strike activity, arguing that the strikers had formed an illegal conspiracy in restraint of trade under the Sherman Anti-Trust Act, a law passed, ironically, to combat big business. On July 4, 1894, federal troops descended on Chicago to enforce the injunction.

Out of "Pullman Hell"
In the powder-keg atmosphere that followed, soldiers shot into crowds trying to stop trains, and mobs set hundreds of freight cars alight. The strike collapsed. More ominously for workers, though, companies learned to use injunctions from business-friendly courts as a weapon against labor. One injunction threatened to arrest anyone "inducing or attempting to induce.any person or persons to abandon the employment of...railway companies."
Yet even as the Pullman strike crumbled, the political winds began to shift. In fact, a federal commission called to investigate the incident blamed the government "for not adequately controlling monopoly and corporations, and for failing to reasonably protect the rights of labor." A new, Progressive era was born out of labor's pains.
Eventually, victories would come: the 8-hour workday, the 5-day workweek, improved working conditions, child labor laws, collective bargaining rights--even a national Labor Day, approved by Congress the same year as the Pullman strike.
--By Michael Himick

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Reproduced with permission. Copyright c 2002-2009 Every Learner, Inc. All rights reserved.

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Hope For Homeowners and Mini Skirts - Part One

Hope For Homeowners and Mini Skirts - Part One

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From MMG Weekly
Last Week in Review
"The fact that an opinion has been widely held doesn't mean that it's not utterly absurd." Bertrand Russell True words - and last week was one that was full of opinions that moved the financial markets - here are some highlights.
The week began with bank analyst Mike Mayo spewing out a negative forecast, which included his thoughts that loan losses by financial institutions would ultimately exceed levels from the Great Depression. This was followed by word from hedge fund giant George Soros that the US banking system is insolvent and that the economy won't recover in 2009.
However, as mentioned in many previous newsletters, the recent changes to mark-to-market should prove to have a positive impact on the economics and overall operations of financial institutions. Why? Because the recent ruling to look at mark-to-market accounting in a more relaxed light will free up the banks' capital ratios and allow them to do more lending, which will help their profitability, as well as ultimately help the economy unlock as businesses and consumers are once again able to borrow and use credit in a more normal fashion.
Lo and behold...as earnings season began last week, there was already evidence of this playing out as true, when Wells Fargo said Thursday that it expects record 1st quarter earnings and that their Wachovia acquisition was exceeding their expectations. In addition, the New York Times said Thursday that the US banking system overall may be in better shape than most people think.
As you can see in the chart below, Stocks hit an all time high in October 2007...until mark-to-market accounting practices were instituted. And notice also that Stocks reversed course, and have been on a strong rise since early March of this year, buoyed simply by the speculation that there would be a change in mark-to-market, which was finally announced on April 2nd by the Financial Accounting Standards Board.
Chart: Dow Jones

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. And this is exactly what happened in the early part of the week when Stocks were plagued by the negative opinions mentioned above. However, Stocks rallied on the good news that ended the week, causing Bonds and home loan rates to give back some of the gains they had made, ending the week unchanged to slightly worse from where they began. The Bond market closed early Thursday and both the Stock and Bond markets were closed Friday in observance of the holiday weekend.

Bills.com’s top eight tax topics that filers should know

1. Maximize deductions: Consult with a tax advisor to receive all qualified tax deductions. Remember that donations to nonprofit organizations of money, vehicles, clothing and household items, or stocks or other investments should be included as well as contributions to retirement accounts, medical savings accounts, health savings accounts and 529 college savings plans.
In addition, medical and dental expenses that exceed 7.5% of adjusted gross income as well as flexible spending account contributions for expenses such as child care and medical care should not be overlooked. Some health insurance premiums, such as those for self-employed individuals or people who cannot choose to purchase health insurance at work are also included, as well as student loan interest and some education expenses.

2. Take credit for economic impacts: Ask a tax advisor how you are affected by any losses in investments, or how a job loss affects current or future tax.

3. Deduct an investment in America: Taxpayers who bought a first home in 2008 can claim a maximum $7,500 income tax credit on their 2008 tax return. That credit must be repaid in $500 increments on future annual tax returns. Americans who purchase a first home between Jan. 1, 2009, and Dec. 1, 2009, may be eligible for a tax credit of up to $8,000, which does not need to be repaid. Home buyers can claim this credit on their 2008 tax return (either filed on time or with a six-month extension) or on the 2009 tax return.

4. Get paid back for green improvements: 2008 investments in home energy efficiency - such as solar systems, geothermal heat pumps or small home wind turbines - qualify for a credit for 30% of the equipment cost, up to $2,000. (That limit no longer applies in 2009). Energy-saving home improvements, such as windows, exterior doors and high-efficiency heating or air conditioning equipment, bring a 10% credit for 2008, with a maximum credit of $200 per category. In 2009 and 2010, the credit will be 30%, up to a maximum $1,500 total, with no category cap.

5. When a refund is not great: Some people are disappointed if they do not get a refund. But a refund means the taxpayer gave the IRS an interest-free loan. For most people, that cash would serve them better in their wallets every week. Those who have a sizable refund coming should talk with a tax advisor about completing a new W-4 with their employer and choosing a number of exemptions that will provide for the most appropriate withholding of taxes.

6. File on time: Filing late incurs penalties and interest for those who owe money to the IRS. If a return is filed more than three years late, the filer forfeits any refund on that return. The penalties for not paying tax owed with a filed return are much less than the penalties for not filing a return with an unpaid balance. Filers who are considering not filing a return because they cannot pay the bill are probably better off filing and avoiding the substantial late-filing penalties. When individuals or couples cannot pay because of a death in the family, serious illness, financial records lost in a natural disaster, or a reason the IRS deems “reasonable cause,” the IRS might waive penalties for those who contact the agency to negotiate solutions.

7. Get an extension: If for some reason a taxpayer cannot complete his or her return, he or she can file for an extension (IRS Form 4868). Keep in mind that this is an extension to file, not an extension to pay taxes owed. Penalties might still apply, but they will be less than if the person simply does not file.

8. Get help: Specialists, often found at or through reputable debt settlement firms, can negotiate directly with the IRS on behalf of consumers who owe $10,000 or more. Tax relief specialists usually are attorneys, enrolled agents or certified public accountants with special training and experience. They can navigate the intricacies of IRS forms and calculations, help consumers understand the criteria the IRS imposes, and then help them get back into good standing with the IRS.

“Tax filing season is a necessary evil,” Ewing said. “With appropriate preparation, you can make sure you are paying only what you owe and no more.”

For more information, visit www.bills.com.