Turning Japanese?

Fed cuts rates to 0%

That's it, all done, close up and go home, there's nothing left to do.

The Federal Open Market Committee today agreed unanimously to cut the Fed Funds rate to a target range of 0% to 0.25%.

Read the FOMC statement.

CPI falls by largest amount since 1932

US consumer prices fell in November at the fastest rate since 1932. The CPI fell by a seasonally adjusted 1.7% and by 1.9% on a non-seasonally adjusted basis, the biggest decline since January 1932, at the nadir of the Great Depression.

Full-on deflation is here. All the bullshit you've heard all your life about how another Great Depression can't happen because of circuit breakers in the system is just that ... bullshit.

Bernard Madoff arrested over alleged $50 billion fraud

Bernard Madoff, a quiet force on Wall Street for decades, was arrested and charged on Thursday with allegedly running a $50 billion "Ponzi scheme" in what may rank among the biggest fraud cases ever. The former chairman of the Nasdaq Stock Market is best known as the founder of Bernard L. Madoff Investment Securities LLC, the closely-held market-making firm he launched in 1960. But he also ran a hedge fund that U.S. prosecutors said racked up $50 billion of fraudulent losses. Madoff told senior employees of his firm on Wednesday that "it's all just one big lie" and that it was "basically, a giant Ponzi scheme," with estimated investor losses of about $50 billion, according to the U.S. Attorney's criminal complaint against him.

Dilbert

Trump Organization in Bankruptcy

AGAIN!

Trump Hotels & Casino Resorts and related operations sought a Chapter 11 restructuring after reaching agreement with most of its creditors on a new financial structure for the business. Trump's stake would be slashed to 27% from 47%, even after he plows $72 million into the new operation. Other common shareholders would be mostly wiped out, and bondholders would control about two-thirds of the equity in the reorganized company under the proposed restructuring plan, which is subject to court approval.

Their last bankruptcy (in which Trump also made out like a bandit) was reported in this blog just 3.5 years ago.

Tribune Files for Bankruptcy, Stock Falls 94%

Tribune, the owner of several of the nation’s largest newspapers, has filed for Chapter 11 bankruptcy protection. The company cited a $13 billion "heavy debt load" as the reason to seek protection. The media giant, which owns The Chicago Tribune, The Los Angeles Times, the Orlando Sentinel, 23 television stations and the Chicago Cubs, was battered in the past year. Their stock is now trading at $1, down 94% from yesterday's $18 closing price.

0% Interest Rates are Here!

Worldwide!

In the US, the Fed funds rate may be 1%, but 3-month Treasuries are currently yielding 0.01%.

The Bank of England dropped its rate from 3% to 2%, the lowest rate since the central bank's founding in 1694.

Japan-style near-zero interest rates are here and may be here for a while. I predict a lost decade, for the entire world this time rather than just Japan.

Jobs, Jobs, Jobs

This is bad, and getting worse very very quickly

AT&T cutting 12,000 jobs
Credit Suisse cutting 5,300 jobs (mostly in the US)
Dow Chemical cutting 5,000 jobs (and 6000 contractors)
UBS cutting 4,500 jobs
DuPont cutting 2,500 jobs (and 4000 contractors)
Belden cutting 1,800 jobs
3M cutting 1800 (more) jobs
Anheuser-Busch InBev cutting 1,400 US jobs
Nomura cutting 1,000 jobs
Viacom cutting 800 jobs
Adobe cutting 600 jobs

Retail sinking ... fast

Abercrombie Same-store Sales Down 28%
Kohl's same-store sales fell 17%
Nordstrom's same-store sales fell 16%
Macy's Same-store Sales Down 13%
Limited Brands same-store sales fell 12%
J C Penney same-store sales fell 12%
American Eagle Outfitters Same-store Sales Down 11%
Saks Fifth Avenue same-store sales fell 11%
Target same-store sales fell 10%
Dillard's Nov. Same-store Sales Down 9%
Children's Place same-store sales fell 7%
Costco's same-store sales fell 5%
Aeropostale same-store sales fell 5%

(all this news was reported today)

4% Mortgage Delinquency Rate

For the quarter ended September 30, 3.96% of people holding a mortgage were at least 60 days behind in payments, compared with 2.56% in the 2007 third quarter. "It's nothing short of staggering," said Ezra Becker, principal consultant in TransUnion's financial services group. Becker noted the rate had hovered at about 2% for years, until the second quarter 2007, when it started climbing. Moreover, the climb is not likely going to slow, he said. "Our projections are that it's not only going to be increasing but it's increasing at a faster pace," he said. The fourth quarter of 2008 could see the percentage of mortgages past due jump as high as 4.6 to 4.7%, he said, an estimate that reflects the recession and rising unemployment rates. "This is more pessimistic than what we would have forecast a quarter ago," he acknowledged. The highest delinquency rates continue to be in Florida, at 7.8%, Nevada, at 7.7%, California, at 5.8% and Arizona, at 5.5%.

Goldman To Post Loss

Goldman Sachs Group is likely to report a fiscal fourth-quarter loss of as much as $2 billion, or $5 a share, five times the current analyst consensus, The Wall Street Journal reported. The expected loss for the quarter ended Nov. 28 would be the firm's first quarterly deficit since it went public in 1999. The company will write down the value of assets in private equity, commercial real estate and more.

Sears Holding Posts Loss

Sears Holdings Corp reported a wider-than-expected quarterly loss Tuesday as sales fell at its US Kmart and Sears Roebuck divisions and said it would close additional stores. The loss was $146 million, or $1.16 a share, for the third quarter ended Nov. 1, compared with profit of $4 million, or 3 cents a share, a year earlier.

US sales at stores open at least a year declined 11% at Sears and 7% at Kmart.

Sears Holdings is now trading at 33.00; it was trading above $100 as recently as two months ago. Merging Kmart and Sears Roebuck was a marriage made in hell from the beginning.

Dow down 7.7%

Dow down 678 points (7.7%) to 8149, its 10th worst day in history, bumping 10/9/2008 from the top 10 list.

Oct. 19, 1987	-22.60
Oct. 28, 1929	-12.80
Oct. 29, 1929	-11.70
Nov. 6. 1929	-9.90
Dec. 18, 1899	-8.72
Aug. 12, 1932	-8.40
Mar. 14, 1907	-8.29
Oct. 26, 1987	-8.00
Oct. 15, 2008	-7.87
July 21, 1933	-7.84
Oct. 18, 1937	-7.75
Dec. 1, 2008	-7.70
Oct. 9, 2008	-7.33

From the Department of the Bleeding Obvious

The US economy entered a recession in December 2007, a committee of economists at the private National Bureau of Economic Research said Monday.