So Much For The Volcker Plan: Shelby, Dodd And Kanjorsky All But Kill The Prop Ban Proposal

Pulling Volcker out of the closet following the Massachusetts debacle was a useful diversion: the whole prop trading ban seemed almost credible. And now that there are no immediate public votes in the future, it is safe to put Volcker back where he belongs, but quietly, lest the morts and general peasantry think that Obama is all bluster and no actions. Alas, if the latest development in the ongoing Wall Street "regulatory" saga, as reported by the FT is any indication, the prop trading plan, as proposed by Volcker, is now dead. This time, the last chance to put the financial system on some stable footing comes courtesy of Dick Shelby, Chris Dodd and Paul Kanjorski.

Kanjorski Admits There Is A "Growing Bubble In Commercial Real Estate" As S&P Observes Recognition Of CRE Losses Could Wipe Out Banking...

Even as ever more Congressmen express concern about the implications of the ongoing CRE "bubble" (yes, this is a quote), S&P comes out with a report noting that should the banking system be forced to take all appropriate CRE-associated writedowns, it likely would not survive. And all this is occurring as REITs probe new 52 week highs. Welcome to the new economy.

The Treasury Is Soliciting Your Feedback Regarding The Proposed Annuitization Of 401(k)

Yes, slowly but surely it is happening. In a federal notice filed earlier, the DOL and Treasury are soliciting a response on what has been on many investors' mind, namely the process of converting 401(k)s into annuity-like products. To wit:

The Department of Labor and the Department of the Treasury (the "Agencies") are currently reviewing the rules under the Employee Retirement Income Security Act (ERISA) and the plan qualification rules under the Internal Revenue Code (Code) to determine whether, and, if so, how, the Agencies could or should enhance, by regulation or otherwise, the retirement security of participants in employer-sponsored retirement plans and in individual retirement arrangements (IRAs) by facilitating access to, and use of, lifetime income or other arrangements designed to provide a lifetime stream of income after retirement.

A Majority Of States Are Now Insolvent: Quantifying The Disastrous Unemployment Situation

Zero Hedge recently highlighted the ever increasing Federal outlays on unemployment insurance, leading to questions on whether the true unemployment rate, as indicated by actual cash outlays, may be materially higher than indicated in increasingly dubious governmental reports. One proposed alternative has been that the Federal government is directly subsidizing standalone states' depleted unemployment insurance trust funds. Using data provided by ProPublica we have been able to confirm that indeed standalone states are for the most part now bankrupt and have no reserves left in their coffers when it comes to funding ever increasing insurance benefits. As ProPublica indicates, there are now 26 states which have depleted their trust funds, among these are the usual suspects including California, Michigan, New York, Pennsylvania and Ohio, which now rely exclusively on borrowings from the Federal government to prevent the cessation of insurance payments to recently unemployed workers. Currently all states collectively posses $10.7 billion in trust fund assets(with the bulk held by less impacted states such as Washington ($2.6 billion), Louisiana ($1.1 billion) and Oregon ($1.1 billion). On the other hand, 26 states currently rely exclusively on the Federal Government, and have borrowed a combined $30 billion through December to fund payments. ProPublica estimates that another 8 states will be insolvent within 6 months, as their trust funds also approach 0.

Rosenberg - Expect Big Time Revisions To The Houdini Q4 GDP

Rosie already shared some insights on last week's blockbuster GDP number. Today, he refuses to leave the topic alone, and warns investors to "expect big-time [downward] revisions." Additionally, and more relevantly, the entire validity of the economic reporting segment of the administration is put into ever greater question, and with good reason: "if you believe that GDP result, then you de facto are of the view that all of a sudden, with no capital deepening or major technological change in the past half decade to speak of, the potential growth rate in the United States has reached an epic scale of 7%." And this key reading into the divergence between pumped-up and real revenue growth "When one weighs in a zero Fed funds rate, $862 billion in “stimulus” (and counting) and $700 billion in bank and auto sector bailouts, sales should be running at a 10% clip by now — not 1.7%." With economic data increasingly unreliable (to keep it politically correct), and China having the ability to make or break the U.S., what is the point of continuing the charade that the U.S. is nothing more than an extension of the Chinese experiment across the Pacific.

Goldman: "Blankfein $100 Million Bonus Is Speculative Nonsense"

In response to The Times' article on Lloyd's alleged $100 million bonus, Goldman has sent out an email early Monday in which it refutes the number and claims the whole story is "speculative nonsense." As the Dow Jones reports, Goldman's email appeals to everyone's heartstrings in realizing just what a generous, competitor-friendly, bailout-free and, in a word, godly organization it truly is:

"Everything Goldman Sachs has said and done in terms of compensation this year gives the lie to The Times story," the spokesman said. He added that Blankfein received no bonus in 2008, and that Goldman's ratio of compensation and benefits to net revenue in 2009 was the lowest in its
history as a public company.

Goldman has yet to state if the actual bonus number is lower or higher.