The Market Ticker

The most important information out today is from both FedEx and UPS, both of which are reporting falling shipment volumes:

"UPS, whose domestic volume has outperformed the gross domestic product for almost a century until last year, said April 8 that deliveries dropped in the first quarter. UPS also said earnings for the three months through March will miss its previous projection by as much as 7.4 percent, just the third time the Atlanta-based company has made a new forecast that was below an earlier one.

FedEx's U.S. shipments dropped 2 percent last quarter, and the company said last month it would have 'limited earnings growth' this year because of the slowing economy. Both companies are also struggling with soaring jet-fuel, gasoline and diesel costs after crude oil surged 80 percent in the past year."

The "kingpin" of the bull's case has been that Transports have not confirmed the Dow's relative weakness, and in fact recently have been amazingly strong. This, according to the Bull case, means that we're done recession-wise and are headed higher - both for the economy and the market.

The problem with this case is that most of the Transport strength hasn't come from organic, broad-based traffic growth but from specific sector favor - first "merger fever" in the airline industry, and then again in the rails due to exports both of agricultural products and resources (particularly coal)

And while there have been many who have argued that one of the "big shippers" was cannibalizing the other's customer base, we now have both reporting unit shipment declines.

There goes that argument.

United Airlines posted a wider loss and announced layoffs, citing fuel costs (no, you mean $118/bbl oil is a problem for an airline?)

AT&T posted a nice profit growth, but a lot of it came from merger savings with Bellsouth, mostly by firing 10,000 people. That of course reduces costs and boosts profit, but its not necessarily a good argument for the economy as a whole. The shift to wireless from wireline phones continues apace and is likely to increase even more over time; on-balance the argument for landlines look weaker by the day. As consumers get squeezed more and more the "paradigm shift" will become even more entrenched - why pay $30 for a landline when you already have a $50/month cellphone - that works in your house as well? If you ask me which line I'd drop given a need to get rid of one of them, the landline loses. Every time.

McDonalds continues to benefit from a "trade down" view, which ain't good for American's "wastelines" (sic) but is likely to be good for the firm's stock, at least for a while. I expect that the real 900lb gorilla for them will be when the cattle "kill off" runs its course later this spring and summer (ranchers giving up on the high price of feed and killing off herds rather than spending the money on finishing feeds) and beef prices start to move materially higher. That is likely to hit the stock and company hard right in the margin gut - if you're late to this party and not in the stock by now, you're probably too late. That squeeze may have already started - the firm said that US same-store sales were slightly negative. Further, the firm's intention to go after Starbucks by installing "trendy" coffee bars serving lattes and the like appears to me to be a few years late and potentially ruinous to the bottom line - these installations are not cheap, and if consumers are squeezed, will they really pony up for a $4 latte? I am reminded of the last time that McDonalds went after "expanding" its core competency a number of years ago and literally destroyed operating margins for a number of years, just recently emerging from its malaise. I would stay far, far away from the stock here - too much is already "priced in" on the upside, and not nearly enough of the risk is represented in the price.

Linens-N-Things is damn close to going under and is fighting mightily to remain where it can breathe air instead of swimming with the fishies. Sharper Image already went "glub" and now these folks. Not a great story, and I suspect that other retailers that are tied to "discretionary" purchases are going to get similarly hammered. Amusingly enough I have noted that a significant uptick in junk mail from Linens-n-Things here in the last couple of weeks - they're clearly doing the "let's stick our claws out and pray something catches" game as they slide down the bowl.

They will not be the last specialty retailer to go down the toilet.

The other piece of "truly bad news" comes from the health care front where United Health got positively hammered, cutting its outlook and citing anticipated loss of commercial customers. Oh, you mean that when people get laid off they lose their health "insurance" and that hammers managed care? No kidding? (As an aside, are we ready to have that discussion in this nation yet about health care and its cost? No? There's a ticker brewing on this one aimed for the end of the primary season, and intended for you to think about as we go into the election season. It echoes much of what I wrote years ago in "Musings.")

ICSC came in at -0.7 for the week, from a previous +0.9%. Redbook came in at -1.3%. Neither was reported on CNBC. Surprised? I'm not. I've been harping on this for a while, but you're never going to get reality reported in this regard.

I do expect that the balance of the earnings reports this quarter will be decent, but not great. Why? Because the real "crunch" with withdrawal of unspent home equity lines didn't hit people until March, and that of course is the end of the first quarter.

Going forward, however, the crunch on consumer credit is going to bite hard, and its one that nobody can fix - in The Fed or anywhere else. Any attempt to "spend our way out" via the deficit simply fuels price inflation and blows back on the very same consumers that are being "prodded" to "get out there and shop."

We have spent like drunken sailors for the last five years and now we've discovered that the rope given to us in the form of HELOCs and insane consumer credit policies in fact has a noose on the end of it and its around our collective necks. Consumer behavior is shifting as I predicted it would early last year, and as it continues to do so the equity markets will eventually be forced to recognize reality.

That reality is that the debt overhang is going to have to be either paid down or defaulted upon. If its paid down then we have an immediate negative impact on consumer spending. If its defaulted then the credit crunch deepens as banks will tighten up the rules to prevent it from happening again, and preserve their capital ratios.

Either way the result is the same - consumers spend less, either by choice or by force.

How much overhang? My "best guess" is that consumers have been spending at from five to ten percent beyond incomes, mostly supported by "home price appreciation" and expanding consumer debt. Now both are unwinding at once, and odds are that we will see consumer behavior shift in the other direction, not only to pay down that debt (when possible) but also to start socking back some sort of cushion in savings. The net impact could be a reduction of 5-7% in consumer spending, which will of course flow through directly into GDP, with the potential impact being as far as -5% in "contribution."

This would be an insanely negative GDP print for perhaps as long as two years going forward.

The media is now picking up on what I've been talking about for some time - the possibility of Fannie and Freddie failing outright and having to be nationalized. CNN/Money is putting this in stark relief, basically parroting what I have been saying - the bill for this to the taxpayer, if it happens, is likely to be up around $1 trillion!

"Although few are predicting an imminent need for a bailout just yet, credit rating agency Standard & Poor's recently placed an estimated price tag on this worst case scenario -- $420 billion to $1.1 trillion of taxpayer's money."

Bubble TV continues to look for people who will call for a "huge breakout" north in the stock market, all citing "lots of money on the sidelines."

Beware buying anything that looks like that happening - headfakes are very, very common in the market, and they can ruin your account's balance.

The reality of the market is that ultimately it always - always - responds to the fundamentals of the economy. It often takes a while for reality to intrude, but it always does.

False bottoms and false hope reigned supreme in the 2000-03 tech wreck, and the same sort of "bottom calling" was prevalent then. Yet that "tech recession" was in fact nearly all business-centered; consumers never really slowed down.

This is different because the bubble was blown directly into consumer balance sheets. Now we're getting this ugly thing called "reality" that is intruding into consumer credit card statements, HELOC-revocation letters and other forms of "nastygram" appearing in mailboxes across America.

This recession is far more like the traditional consumer recessions that we had in the 70s and 80s, yet is likely to be deeper than either, because the damage then was more inflationary (or the correction of that inflation) than speculative froth-based. The latter is especially bad because it leads to horrifyingly bad behavior by consumers, and boy, did we live up to our reputation as being "stupid Americans" this time around in the shopping malls.

BTW if you're wondering how those "market callers" would treat you and your money, I will point out that last summer Cramer called for Downey Savings and Loan to be one of his famous "$80-100-120" stocks, and for WaMu to buy them at $100, with the argument that they had and will have an insanely low percentage of defaults.

Really? Here's truth folks - a loss of $8.89/share for the last quarter.

Oh, and those "low defaults"? Here's the actual performance .vs. Cramer's call:

"Non-performing assets increased during the quarter by $521 million to $1.562 billion and represented 11.90% of total assets, compared with 7.77% at year-end 2007 and 0.94% a year ago."

Hmmmm..... Low defaults eh? 11.90% from 0.94% is a roughly 1,300% increase.

That's pretty damn impressive, and exactly what I predicted was coming.

You want to listen to the clowns on TV eh? You could have bought DSL for $74 last spring on Cramer's recommendation.

This morning it will open under $14, for a total net loss from listening to the market callers of 81%. If you did buy it back then, and haven't yet sold, you're running the risk of a 100% loss as this sort of acceleration in NPAs usually winds up with the FDIC stepping in, wiping out shareholder equity (read that as "the stock goes to zero") Bet on a nice little short squeeze, which may be your last chance to get out with some of your money intact before they go to zero.

This is what you get if you listen to Bubble TV, and no, they won't mention that on CNBC before they run the next "Stop Trading" episode, but they will (and are) running ads every 15 minutes telling you that CNBC will tell you how to "protect your wealth" and "keep your money safe."

You've done a great job CNBC, just as you did during the 2000 Tech Wreck.

Existing home sales fell 2%, inventories rose (again), median home prices down 7.7% y/o/y, with the biggest fall in prices in the west - off 14%.

Oh, and 18% of the homes listed for sale have negative equity, which means they are either foreclosures or short sales.

Don't listen to the market crooners.

We're nowhere near the end of this mess.

Buy buy buy!

Oh really?

"First-quarter net income declined 77 percent to $1.21 billion from $5.26 billion a year earlier, the Charlotte, North Carolina-based bank said today in a statement. Results included $1.31 billion in trading losses and $2.72 billion in costs for uncollectible loans. Earnings per share shrank to 23 cents from $1.16, falling short of analysts' estimates and sending the bank's stock down as much as 2.2 percent in today's trading."

'The decline in housing prices has to be solved for things to get better,'' said Chris Hagedorn, portfolio manager at Fifth Third Asset Management in Cincinnati, in an interview before earnings were disclosed. 'In terms of the maximum point of pain, I don't think we're there yet.' Fifth Third manages $22 billion and owns Bank of America shares.

Hmmm.... $3 billion in uncollectibles eh? How long before those uncollectibles swamp the balance sheet and Tier Capital?

Decline in housing prices has to be solved?

See, this is the problem folks - there is no "solution" to the decline in housing prices.

Yet the delusional bulls like Dick Bove in the financial sector keep refusing to face reality. This morning he was on CNBC claiming that "its all about cash flow."

Well, yes and no. Obviously so long as you bring in more cash than you spend you could technically keep the doors open but the problem becomes this pesky thing called "Tier Capital" when we are talking about banks, and if you go under 6%, you go "boom."

These firms - virtually all of them - are playing games with their balance sheet to avoid marking to the market and recognizing losses. 25% - 50% increases in "held for sale" and/or "Level 3" assets, coming from other buckets, instead of actual new business? Enough of a change to wipe the market cap of these firms, in some cases more than once?

Example? Right here:

"The same was true at Merrill. The broker had $6.6 billion in write-downs, leading to a loss of $1.9 billion. But Merrill took at least $3.1 billion in other write-downs that didn't count toward its loss.

So, where did those other charges go? Into a special bucket in shareholders' equity called "other comprehensive income." The beauty of this bucket is the charges land on the balance sheet, but don't dent the companies' bottom line."

This sort of balance sheet trick is legal under current accounting rules, but its still a trick and it remains unsustainable and ill-advised. The "wish and dream" that these "assets" will magically go from declining in value to rising in value, recovering the entirety of the currently-unrecognized loss, is pure delusion when we are talking about houses.

The "bubble" values are at least 20 years in the future before wage inflation rates catch up with them, and yet the carrying costs over those 20 years exceed their net present value.

This sort of "reclassification" is, for that reason, a sham. A fraud. A legal fraud, but a fraud nonetheless, and one that should be absolutely barred.

Don't believe for a second that this is over. Here are some recent stats - from today - on the deterioration in HELOC credit lines from S&P, as a measure of total delinquency:

2005 issued HELOCs - 6.49% increase February to March, now at 9.19%.

2006 issued HELOCs - 6.51% increase February to March, now at 11.45%.

The credit crunch is "over", the consumer is "fine", and the economy will turn imminently?

With those statistics?

Nobody wants to talk about the truth here. There are a lot of very, very delusional people in the markets nowadays, and they're out pounding the table about various stocks screaming "Buy".

Why?

Have they forgotten basic statistics? It appears so. The consumer remains 70% of the economy in the US, and 20% of global GDP. Consumers have spent beyond their means - beyond their incomes - for the last ten years.

This is the same sort of delusional horsecrap that was run during the housing bubble - "buy now or be priced out forever" screamed the Realtors.

This sort of Ponzi Finance violates the basic laws of mathematics, but that doesn't seem to bother these market "callers."

It should - and in fact, I would argue that there should be criminal sanction applied to those who argue on national television for positions that are mathematically impossible.

This is one of them.

Simply put, the consumer cannot continue to spend beyond his income for long periods of time. Once the consumer does spend beyond his income for any material period of time they must then spend below their income level for a longer period of time in order to pay down the debt they have incurred plus interest, or they must default on that debt (in which case the creditors get to book a nice fat loss.)

Since our GDP is $13 trillion, give or take one, overspending leads to some serious problems for these institutions that granted that credit, and for the economy in general.

This is a matter of mathematics, not prognostication.

Every year or two someone comes up with what amounts to a perpetual motion machine. It always turns out to be crap, because the laws of physics, thermodynamics and mathematics are not subject to negotiation - that's why they're called "laws."

Well, all this financial "alchemy" is just as fraudulent as that practiced hundreds of years ago in a futile attempt to turn lead into gold.

It can't be done, and 1 + 1 = 2, no matter how much you'd prefer it to be 6.

Arguing that "it will all be ok", "the consumer will be strong", or "we'll rebound and be healthy later this year" is in fact a fraud. Until the excessive debt unwinds we cannot fix this. It is not mathematically possible for debt-to-income ratios to rise on a perpetual basis; you eventually reach the point where cash demand to service debt exceeds cash flow, and at that point the game is inevitably over irrespective of what anyone wants.

Arguing otherwise is fraud, not disagreement over the direction of the economy.

Yet this is the premise of every single one of those who are calling for a "quick turnaround" or a "short and shallow recession."

Fact is that either the debt must be defaulted, the debt must be paid down, or incomes must rise dramatically.

The first two slam earnings and spending, and the latter slams price inflation and forces huge amounts of monetary inflation ala Zimbabwe. None are good for equities and earnings.

The Bank of England has joined our "turd sandwich hiding party" initiated by our own Ben Bernanke, now trying to play the same game in England that was played here in taking crap paper and exchanging it for Gilts, British Treasuries. This sort of insanity as a means of "liquefying" garbage paper is a disastrous practice that ultimately leads to the sort of zombified "lost decade" that Japan suffered under.

"'There is no arbitrary limit on this so it could well go higher,' King told reporters in London today. He said the plan aims to restore confidence to the banking system and the most important aspect is that 'everyone needs to know this is there for them to access as needed.'"

Yeah, ok. The problem with this sort of scheme is that it will backfire, because contaminating Treasuries by taking this sort of crap in at the windows of the Central Banks ultimately drives debt costs for government debt higher, which then flows through to all private debt.

This in turn tightens the noose on the neck of those who think they "benefited" from this debt swap arrangement, driving even worse quality collateral to the window, because the base against which spread is computed is driven higher.

That in turn hurts performance of that private debt, which then needs to go to the window too, which.......

Yeah.

Folks, there is no solution for overpriced homes other than for home prices to fall and there is no solution to a consumer who has spent beyond his or her means other than for their consumption to fall below income for a period of time to pay down that excess debt, or for that debt to default. Either way you get losses in the economy.

Real losses.

I know that everyone wants to search for the "magic financial elixir" to bring back the housing bubble and both the prices and orgiastic consumer spending that came with it, but it is mathematically impossible for this ponzi scheme to continue on indefinitely.

If we are not very careful with this nonsense we are going to find ourselves in a re-run of either Japan's "lost decade" or worse, trigger a bond market collapse. The latter will result in a re-run of the 1930s worldwide - this is not a problem limited to the United States, and its effects will not be limited to the US either.

Before you go out and buy equities, ask yourself - given the precipitous rise in debt-to-income ratios in the Untied States - rising over 1.0 in 2000 and now over 1.2 - how can the game be continued?

The simple answer is that it can't be and until credit quality begins to turn upward in a meaningful fashion there can be no economic record of significance either.

A long-term sustainable debt-to-income ratio for American Consumers is somewhere between 0.6 and 0.8. From the 1960s until 1995 we managed to hold our consumer debt ratios in this range, coming off the historical lows from the exit of the Depression (where debt-to-income ratios were under 0.2 in 1945.) Note that the period from 1960 to 1995 included both historically low and very high interest rates, and coincided with "good times" during low interest rate periods and "tough times" when rates were higher.

If our banking and financial system attempts to "reflate" the economy without first working down the level of debt held on consumer balance sheets we will inevitably wind up with one of two outcomes - either a failure of the policy, leading to an immediate "explosion" across the board, or worse, we will wind up with a speculative blow-off in some other area of "investment" that will simply suck even more of American's money and wealth into an unsustainable bubble where it will be vaporized.

Let's look at the record of rampant consumerism and Greenspan's "I never saw a regulation that should be enforced" policy, which Bernanke has adopted wholesale:

• A few million Americans had their wealth vaporized in the Tech Market crash.
• This time around every American has been impacted significantly via high oil and food prices as a result of bubble-blowing-finance and willful ignorance of rampant fraud and deception, along with tens of millions of Americans who will either lose their homes or have their wealth significantly damaged or destroyed.

Haven't we had enough of this nonsense?

Wasn't the fraud of the 1990s with the "Internet Bubble", then "The Housing Bubble", enough to convince you, dear reader, that this sort of Ponzi Finance ought to result in prison terms for all involved instead of billion-dollar bonuses for a few while everyone else in America gets screwed?

Or will you sit on your collective hands until you need them to hold your tin cup in a soup line?

230 years ago men with the names of Jefferson, Hamilton, Madison and more pledged their "lives, wealth and sacred honor" to give us a nation.

Over the last few months I have heard every possible excuse in the world as to why "we're doomed" from this or that from an economic (or physical) threat, and why nobody thinks that getting off their butts will make a difference.

I've even had a couple of dozen people I've sent tickers or other calls to direct action (letter writing, petition signing, etc) turn around and tell me they're afraid of ending up on some "list" if they make noise.

People are afraid of going to Washington DC or even sending a petition or picking up the phone to call their Congressman because they'll end up on some sort of "list"?

Are you kidding me?

The markets over the last month have rallied because...... corporations are lying and our government sits by while quasi-government organizations, including and especially The Fed, act outside of their legal mandates.

Yes, really.

Goldman and other banks increase "Level 3" assets by 50% and take profits from the degradation in their credit book (!) and this is met with huge market rallies.

Let's dissect Google for a second - note that I have Google's "Adsense" on this blog, and its also on my forum.

Last fall I noted that the "eCPM" that I was earning dropped precipitously (by 30%!) just before earnings were released. They then "blew out estimates" and the stock soared.

A few months later Comscore started bleating about bad numbers and they stuttered, then tanked.

Well, guess what? The last week of March it happened again. The eCPM dropped here once more, this time by about 40%. And once again Google reports a "blow out" quarter.

But is there any transparency in how they're hitting those numbers? Oh hell no. What do I see here? A nine-month pattern that has repeated twice, where the company has "hit the numbers" by, as far as I can tell, by simply changing how much it pays the people who display their ads, pocketing far more than they used to.

Now this is very profitable for them up to now, but here's the problem - my eCPM is down some 70% in the last six months. I am now getting a small enough return from being a Google "Adwords" placement target that I may drop it entirely, as there's not much point given what they're giving me, and I have little reason to let these folks effectively have placement on my sites for free!

And if I and lots of other display ad places do exactly that, how much is their "placement" worth to an advertiser? As people like me leave their ability to sell that space plummets.

A bit of careful analysis would disclose that when you go from 50 cents eCPM to fourteen over the space of nine months (and no, the click rate hasn't materially changed) that there's not much more room for that game to be run, is there?

What happens when the game ends?

Can I validate that this is how they've hit their numbers? No, because they don't give us enough color in their reports to be able to do that. But does it make sense? Yes it does, and that's a bit of a problem going forward for those who are Google (and tech in general) Bulls.

(By the way, if you're a potential advertiser in this space, your opportunity to get exclusive placement on both the forum and the blog just got a lot cheaper. Talk to me if you're interested in displacing Google for this site. Yes, I'm serious.)

Is this sort of thing common? Absolutely. Look at the financial "earnings" this quarter. Regional banks nearly all hit their numbers from profits on the Visa IPO - which was not part of the estimates, because it wasn't known when those estimates were published. That's the mother and father of all "one time" gains but boy, you wouldn't see that featured prominently in the press release, would you? Nope!

Or how about the "Level 3" asset moves? The last two quarters have seen absolutely enormous gains in "Level 3" assets - which came from "Level 2" assets, not new production.

Crooked? You decide - is it crooked accounting when a bank or other institution simply doesn't like the price its being quoted, so it stops asking and makes up a number?

Or how about all these "REO" houses that banks are sending to auction with a reserve, the reserve is not hit and they get 'em back. How are those homes "valued"? Are they counting the "value" as the high bid that they refused to accept? Hell no.

Is that crooked? You decide, but keep in mind while you're thinking about it that 97% of all homes sent out to auction in California are coming back unsold!

Our government says it is (we are) $9 trillion in debt but ignores the forward liability of Social Security and Medicare, which totals, at present, $53 trillion dollars in the mother and father of all "SIV"s.

Oh, and David Walker, Comptroller General of the GAO, the nation's "chief accountant" resigned in February of this year, after screaming for years about the accounting that our nation practices and what it will lead to. He was ignored.

Crooked? You decide.

We have $4/gas in some parts of our nation, diesel is over $4 virtually everywhere, and this is likely to continue to escalate. Why?

Because our accounting is crooked - not only corporately but nationally.

We have sat back while Morton Grove effectively banned firearms and the City of Chicago banned handguns. Never mind that the 2nd Amendment was given to us by those very same "balls that clank" men 230 years ago not so you can shoot some thug who is trying to invade your home, but precisely so that if the government goes so far out of the boundaries of reasonable conduct that no human should have to tolerate it, you can shoot them. If you disagree with this interpretation of The Second Amendment, by the way, I suggest that you spend a few hours reading The Federalist.

The intent of the Second Amendment really is rather clear if you bother to read the material.

And don't start with "the army has more guns than I do, therefore it doesn't matter." Of course the military and police have more guns than you do! They're also better trained. So what? The purpose of the Second Amendment isn't to allow you to "go postal" against the government, it is so that you and all 299,999,999 if your neighbors in this great nation can do so all at once if it ever becomes necessary.

It is this very fact that the people can exercise the ultimate check and balance on government that will keep it from ever needing to occur. Government should be afraid of the people, not the other way around, because this is how government is forced to act within the boundaries of reason, proper conduct, and the law.

But you, each and every one of you, have allowed this rampant lawlessness to go on.

You're the frog put in a pot with the water slowly being heated, boiling in the pot, and you refuse to act because you're afraid.

Or, you say, it doesn't matter what I say or do.

This is where we've gotten to as a nation?

Every time we pull into the gas station and insert the nozzle into our tanks we siphon the money out of our wallets and into the pockets of people like Lord Blankfein, Vickram Pandit and the CEOs of Wall Street banks, who have demolished transparency of accounting and caused our dollar to crater.

You will sit still for this and have another beer?

People blame "Cheney" for the high price of oil and invading Iraq to "boost his buddies" but in point of fact the remaining reason we have high oil prices that are squeezing you like a turnip is that our nation's accounting is fraudulent, corporately and nationally, and other nations have had enough of it, driving down the value of our currency. The consequence is served up upon you as a consumer in the form of higher costs for food and energy as the price of everything we import translates directly into your wallet.

You will sit still for this and have another beer?

When the Japanese attacked us on a Sunday morning in 1941 the nation was outraged. Our boys suddenly grew balls that clanked and soldiered off to kill the evil people who had done that to us. We did so without fear or favor. Doolittle's Raiders took off on a suicide mission just to prove that we could bomb Tokyo with aggregate bomb loads that they knew full well would not make a strategic difference - knowing full well they didn't have the fuel to get home, and counting on the possibility of being able to land in China. Most of those brave men either died outright or were captured and tortured mercilessly. They did it, willingly, because they had balls that clanked and wanted to tell the Japanese - you screwed up and now you're going to pay.

A few years later we dropped an atomic weapon - twice - on Japanese cities. Many today claim it was an "unpardonable act of cruelty." Oh really?

Perhaps the Japanese should have thought about the consequences of their actions before they bombed Pearl Harbor!

Fast-forward to 2001.

Evil men commandeered a few aircraft and killed more people than died on December 7th, 1941. Worse, nearly all of the people they killed were not soldiers nor were the places they attacked "military targets" - they were civilians just like you and I. Two friends of mine worked at Cantor-Fitzgerald and one of them was on one of the impact floors - I assume he was instantly vaporized in a 4500F fireball, as there never was a body recovered. A third friend of mine caught a plane out of NY the night before it happened; she missed being vaporized by less than eight hours.

Our nation once again grew balls that clank but instead of five years, these balls lasted about a month, then they turned into nerfballs that smush.

We went into Afghanistan and kicked some ass but then the panzies got their panties in a wad (as has happened since WWII - see Vietnam, Korea, etc) and we started caring more about the bad guys than our own boys. We handcuffed - again - our military. As a consequence we once again proved that America has turned into a nation of panzies - we will neither defend ourselves nor conduct our business in an honorable fashion.

Over the last 15 years insider trading has become a game that is played relentlessly to the point that people don't only trade on inside baseball they actually create fake news after trading it so to to make absolutely certain that they are right.

We have hedge funds and others who have, for example, placed huge CALL buys and then started rumors that "Buffett is going to buy X" and cashed in. Number of prosecutions or even investigations for this? Zero, up until they did the same thing in reverse with Bear Stearns and suddenly the SEC shows up.

Once.

So we have 100 scams run on Wall Street in the last year fleecing you and I and out of those 100 there's one time that the cops take a look. Gee, that's effective police work. The other 99 times they not only don't prosecute they don't even investigate!

You, at the same time, sit on your ass and swill beer. You watch CNBC and cheer. You watch CNBC anchors of both genders have an orgasm on national television when the market goes up, keeping the camera clean only because they have pants on, and cry when it goes down.

Are you pissed off enough to to grow some steel between your legs and clank when you walk? Or will you wait until you are out of a job, your home has been foreclosed on and your job shipped off to India?

Will those balls of steel last more than 15 minutes if you do grow them?

Here's what you can do, right here, right now. No, its not "signing a petition"; its more direct, more personal, and more "real". It will also put a fork into the fuel for the fraud - money - and send a very strong signal to both Wall Street and Congress.

• Call your Congressperson. Tell them that you have had enough, and you're going to organize your neighborhood and city to throw them out of office come November, irrespective of their political party and yours, unless they act to stop the fraud right now, both at the corporate and national level. You tell them clearly - you don't care what other issues are being run in the election - you're voting this issue, and this issue alone. Period.
• Next, take direct action. Go to Sam's Club and buy a safe. Go to Lowes and buy a hammerdrill and 4 lead anchors plus bolts. These two items will cost you less than $200. Go home and mount your new safe to the floor. You now have your own "bank" and while it pays no interest, neither does your bank right now anyway, does it?
• Now, on each and every payday, go directly to your bank and withdraw the entire direct deposited amount of your paycheck less $100, just to keep your account open. Put the money in your safe. By doing this you are depriving the system of the money to keep playing their game. You are staging a strike against the fraud and corruption in our financial system in a way that hurts them, but not you. Every dollar you pull out of the system like this deprives the very same system of $10 to play its fraudulent games with due to the way fractional reserve banking works. Its your money, and you're fueling the fraud. Grow a pair and take away the gas can from the arsonists who are burning up your 401k and wallet!
• Spend within your means. Not one penny more. Pay your debts off as you can, but take no new debt. Yes, this means you have to be responsible. Fewer meals at O'Charlies or Outback, and when you do go, you pay in CASH. Tell those businesses when you do go in there WHY you're doing it - and that you will not be back with your credit card until the fraud across both Wall and Main street stops. Enlist THEM in the fight the best way possible - by threatening THEIR pocketbooks.
• Stop playing the credit game. Stop giving financial institutions the ability to rape you. Your credit card company can and will raise your interest rate on existing balances any time they want. This is documented fact. Why are you consenting to this? Stop consenting by paying cash and living within your means. Wanting a new IPOD is not an emergency. Put the card in the Bank you installed in your closet and leave it there.
• Need a car? Buy a used one - with cash. Do you need a new car? No. Instead of a payment, pay yourself. Buy a cheap used car and when it breaks, throw it away. Drop your collision coverage - you don't need it on a cheap car - and pocket that money too. This will literally save you thousands of dollars a year.

Now let me make a prediction.

None of this will happen. Not one person in 1,000 that reads this Ticker will do it, and not one of the 50 that do take this step will enlist their neighbors to do it too.

Why not?

Because you have to actually get off your ass and go to Sam's Club to buy the safe. You have to spend 15 minutes to drill the holes and anchor it. You have to spend the 10 minutes every Friday to get the money. You have to live within your means. You have to spend the time to educate your neighbors.

You will not grow balls that clank.

You will instead sit back and whine about $4, then $5, then $6 gasoline. You will continue to whine when your job is lost just as you did when your last job was eliminated and sent overseas. You will whine when your credit card interest rate goes up and when, as the bond market sells off, mortgage rates skyrocket. 10 years from now you will whine when Medicare is dramatically cut back. 20 years from now you will whine some more when your 401k is shredded and Social Security is magically "redone" to either tax the hell out of your benefit checks or worse, simply repudiated.

You can stop it, but you have to stop it now. 1, 2, 5, 10, 20 years from now the damage will be done and we will be living with the consequences - as will our children and grandchildren.

America is a bunch of softies and we are going to get creamed as a consequence.

Don't read the Asian papers.

They "get it" and they're going to tattoo us. In fact, they've been running articles for the last two days that strongly suggest that they intend to rape us standing up without a reach-around for our pleasure.

They don't need us - we need them. We need $2 billion of foreign money each and every day to keep our government running. Those nations are tired of the games and the chatter level is going up dramatically about their intent to give us a very painful economic lesson.

Its YOUR fault when - not if - it happens.

Enjoy this "rally"; when markets trade against fundamentals it does not last, so you have to ask yourself, since we're a credit-driven economy - where do consumers get the ability to take on more debt, say much less buy a house, when we're back to needing 20% down in most markets - which is where we should have been all along?

Think this is over do you? Better not read this:

"Just got off the phone with three of my top contacts at three of the nations leading mortgage lenders/banks. These programs are not selling at all. The volumes are very low. Banks are highly disappointed. The difference between a standard Fannie/Freddie (Agency) is roughly 75 to 100bps depending on the lender. Agency 30-yr fixed are roughly 6.25% with no points and Agency Jumbos are roughly 7 to 7.25%. Mortgage rates have gone up about .375% in the past few days.

For refi's, nobody wants out of their 5/1 ARM, ALT-A interest only or Pay Option ARM into a 30-yr fixed at 7.25% where their payments increase substantially. Also, in over 50% of cases appraisal are not coming in at value. For example, the loan application is taken with an estimate of $600k and the loan is an 80% loan-to-value (LTV). When appraisal comes in, the value is actually $500k making the loan a 100% LTV and there are no programs available. This is happening on a vast amount the $417k conforming loans as well.

For the purchase money folk, rates are also too high for current property values. Plus, a down payment required is 10%+. Debt to income ratios have tightened, further reducing buying power. A household wanting to take advantage of a $700k Agency loan at 7.25% must earn about $175k per year at current rates. And that only buys a $770k home, which is low to moderate in most areas in CA. Surely not the first-pick neighborhood of some earning $175k per year. That same person could have purchase a $1.5 million home with little to no down payment nine short months ago."

Any questions? Ignore this at your considerable peril - California is an absolutely enormous part of our national economy and if people can't afford to get their housing act together there, the economy will NOT recover.

Oh, and get your butt over to Sam's.

If you care about this country.

Prove to me that America still has what made this a great nation.

I dare you.

Philly Fed came in -24.9. Much worse than expected. New orders, employment, prices paid and received - all going the wrong direction. I can't find anything good in that report.

LEIs came in +0.1, a bit better than expected. But - that was during one of the major market bounces, and stock market prices are one of the components. In general? Nothing to cheer about there either.



Notice anything about that LEI and Coincident Index, and how it corresponds with this thing that starts with an "R". Yep.

Yet the crooners keep talking about how "the worst is behind us."

Uh huh. The Check is in the mail, I won't get you pregnant, and I won't (censored - that one's obscene)

Reality folks is that the insane credit-market explosion - giving anyone a loan if they can fog a mirror, whether a homeowner, a car buyer or an LBO-wielding hedge fund - has now led to a circumstance where debt service requirements are uncomfortably close to cash flow.

Note that this is debt service - we're not talking about paying down the principle - just paying the interest.

There is no way to support this paradigm going forward and a small minority of this excess debt and credit has been "worked off" thus far.

The rest will be worked off, with disastrous results for those who are knife-catchers in the markets, whether it be credit or equity.

While hope springs eternal in our capital markets the fact remains that earnings are all that matters, and earnings have been hyperinflated in recent years due to the credit bubble.

Everyone, from homeowners to leveraged buyout shops have been gorging themselves on "stuff" they cannot pay for in cash.

Then McCain comes out this morning and says "The Fundamentals of the US Economy remain strong."

Liar.

The fundamentals of the US Economy have been intentionally trashed by McCain and his cronies in the administration and Congress, who have intentionally and with malice aforethought spawned the growth of a gigantic credit bubble in our housing and personal financial systems that has placed our households into debt to an unprecedented degree.

In addition McCain and the rest of Congress practiced that same sort of insane and irresponsible crap with Medicare Part D, Social Security and all other manner of government spending. The profligacy in this regard is beyond disgusting and reaches into the realm of the treasonously criminal.

Projections at this point are that we will run a one trillion dollar deficit against a $3 trillion budget this year, or net credit growth against spending of thirty three percent. Nearly $500 billion of that deficit is already booked.

The reason Congress doesn't "get it" is that they are just as married to the idea of unsupportable, criminally insane credit growth as are American households. Congress and the Executive refuse to stop this among American business and households because they are doing it themselves, and so far, until today, the world has gone along with the scam.

Those of you who believe that our markets will continue to levitate or even make new highs need to ask yourself - how will all these people who are in debt up to their eyeballs not just service the existing debt but continue to expand their debt at the previous rate or better? Not just American households, but America the nation.

Paying existing debt service doesn't buy anything. It causes no production. It results in no GDP contribution. At all.

To make the Bull Thesis work you need to figure out how we manage to continue to grow sales and profits and thus earnings. Where is the money going to come from when the American Consumer has levered up to the maximum degree and now his collateral (the house) is falling in value, not rising? How does America the nation continue to do this when the world sees what we're doing to our personal and national balance sheets and responds by discounting the dollar?

As long as this continues the value of the dollar will continue to fall and the price of all necessities linked to energy, from gasoline to food, will continue to rise at a rate that not only offsets this credit growth but also provides a measure of "risk premium".

In other words we will lose from this credit growth, not gain, as the rest of the world will simply not let us take on more and more credit without associating a risk premium that we will be unable to pay with those transactions. The higher the leverage goes, the higher the premium charged.

This premium has an exponential curve to it and once that inflection point is reached we are finished, as the premium will rise at a rate that exceeds the growth in available credit. This "knee" is a point of no return and the collapse of our both our currency and economy.

We are very close to that point now.

You are paying $4/gallon for gasoline - instead of $2 - because you sit on your butt and nod your head instead of insisting that both US Business and the US Government cut this crap out!

You think this is a zero-sum game? Nope. You lose Americans. Your food and fuel bill will continue to rise at an increasingly parabolic rate not due to inflation but due to the profligate abuse of credit both by YOU and by our Government (which you want to continue to abuse credit so you can "get yours", whether its a stimulus check, farm subsidies, prescription drugs or the EITC)

Reality, however is that all these "benefits" from the government are immediately offset by higher food and fuel prices, and what's worse, you get taxed on the money you buy that food and fuel with, while you get no tax benefit from the increased interest expense and debt service.

The "Medicare Part D" benefit, for example, might save the average Senior $2,000 a year. That's a lot of money. Guess what? That $2,000 came right out of your pocket anyway and went directly to the grocer and gas station. You cheer the government's action but in fact you saved exactly nothing. You've been played as a fool for votes and screwed at the same time.

Everyone wants to pile into banks and other sectors of the market in the belief that "we'll be out of this in the 3rd quarter at the latest."

Really?

How are we going to pay off the debt? How are we going to be able to originate new debt? And how are we going to keep moving forward on new debt origination, which is absolutely necessary if we are going to see sales, earnings and profits continue to grow?

If you're buying stocks here, or if you're bullish on America in general, you need to be able to make that argument work.

I wish you the best of luck in doing so.

BASEL claims to have released "new regulations":

"The Basel Committee on Banking Supervision released new regulations Wednesday as part of the global fallout from the market-crippling credit crunch. The world's top bank regulator said it will patch up tears in the regulatory cloth, and will institute tougher consequences to stave off risky practices which led to the current financial turmoil."

Yeah, right. They will do no such thing - if Basel gave a good damn about the truth they would get rid of "Level 3" fiction entirely and force recognition of marks.

But no, we have banks that get back ninety-seven percent of the properties they send to "auction" as a consequence of reserves and bid-rigging (self-dealing) and thus their "reserve" (or is it their full loan value? We never do find out as the model is not disclosed) is then allowed to be used as "the mark" on that property's value, even though there was a bid for some amount by an arms-length buyer for a lesser amount.

The bank just didn't like the number, so they refused to sell.

They're within their right to refuse to sell.

But it is fraud to claim that the actual value of that property is above the highest bid placed by an arms-length buyer.

Nor is it limited to real estate. Emboldened by the absolute lack of prosecutorial sanction banks appear to be intentionally under reporting borrowing costs and, as a consequence, manipulating LIBOR.

LIBOR is a key indication of stress in the banking system and borrowing costs as expressed by LIBOR is one of the key inputs into the interest rate puzzle. It affects borrowing costs on virtually all commercial and much consumer credit, either directly or indirectly.

What's even worse is that Eurobor Futures are one of the most liquid swap contracts on the planet and are used by people to hedge interest rate risk. If the underlying is fraudulently manipulated then a LOT of people that are on both sides of those trades are going to get ocularly penetrated unjustly.

If you think this disconnect between "what I think its worth" and what the market says its worth is unusual, however, there is nothing unusual about it. What's "unusual" is allowing people to ignore those differences when they don't like it, and taking advantage when they do.

This difference in opinion is in fact exactly why we have a stock market! I buy a stock from you because I believe that the price is too low; that is, I'm buying for less than the stock's actual value. You sell to me because you think that the stock is worth less than what is sells for to me - that is, you think the "market price" is too high.

One of us is right and one of us is wrong, but today when the market closes I am forced by law to count the value of that stock I bought at what the market says its worth - whether I agree with that price or not.

There is exactly one way to know what something is worth, and that is to put it out for bid and find out what an arm's length buyer will pay for it. That is its value - whether you like it or not - for today.

I view other claims of value and flat-out manipulation of marks, whether in credit instruments, LIBOR, stocks or home prices to be nothing other than organized fraud - that is, racketeering on a grand international scale.

Wells Fargo (NYSE: WFC) reported an 11% drop in first-quarter net income, but in yet another example of the pernicious horsecrap - again fed by the utter lack of prosecutorial oversight - their credit reserves dropped from the 4th quarter. Their CEO said:

"Looking forward, Mr. Stumpf said "We may not have seen the last of the challenges for this cycle, but we're very excited about our opportunities to continue to gain market share prudently in our core businesses at a time when many of our competitors are struggling.""

I'm sure you are Mr. Stumpf, especially considering that The Cops have not forced you to take a reserve for all those HELOCs and 2nds that exceed the value of the house they are written on, and you're quite sure they never will either, as those cops are all bought and paid for. In California, that would be a lot of them right? In previous recessions those loans (not to mention complex securities based on them) have proven to be worth a big fat zero - nothing. Not a "little less", nothing. Zero.

Without cops to prosecute that fraud and send some bank executives off for 20 years of a good old-fashioned ass-pounding in prison this practice will never change.

This practice of blatant fraud is nothing new and neither is the flat-out refusal to enforce the law displayed by our so-called "securities regulators" and both the executive and judiciary.

Back in the 1990s the "meme" was to claim that Internet traffic was "doubling every three months." This was paraded out as justification for pulling enough fiber across the nation for the next five years worth of expansion at that claimed exponential growth rate by firms as large as Sprint, MCI and AT&T to those as small as upstart LDDS.

All of these firms took on hundreds of billions of dollars in debt that was gleefully provided by Wall Street, syndicated off to investors who were convinced by the near-universal claims of exponential growth that there was a decade or more of growth at these levels in the offing.

The problem is that the claim was only true for a very short period of time - literally a couple of quarters - in 1995. That time surrounded the introduction of Windows 95, which was the first "real" windows operating system for the PC, and the first "integrated" dialer that made getting on the Internet for consumers a reasonably-simple process.

That "unleashing" of pent-up demand, of course, resulted in an explosion of users (and traffic.)

As early as 1996 it became clear that while growth was continuing in a serious way the "spike" that introduction of Win/95 introduced was just that - a spike that was flattening out, not a trend that was going to continue on for the next ten years.

Yet quarter after quarter, the same claim was made. S1 after S1 issued with the same projection in "management discussion", along with the same quote in earnings release after earnings release, all showing a non-GAAP "gain". Buried in the disclosures of all those S1s and "Risk Factors" in the earnings releases was the one line statement "growth of traffic may not continue at projected levels."

May not?

It wasn't happening even at the time these S1s and Earnings Releases were printed. That's a fact. I know because I had access to the core Internet routing tables, being the guy with the "keys to the CISCOs" for AS 3365, owned by my company, MCSNet. The routing table was expanding, but it most certainly was not doubling at a quarterly rate, nor was traffic.

I also had full route table (and administrative) access to Net99's equipment and in fact was peered with them.

That sort of geometric growth projected out 10 years, by the way, would have led to the wiring of every home in the world within just a few years - a clear impossibility.

And by the way, there were a few people who was talking with various government officials who were saying this quite loudly - including me. Yet I can count on my nose the number of investigations that I saw initiated into these knowingly-false "forward looking statements."

How many people went to prison as a consequence of this, or were even prosecuted?

MCI's Ebbers and friends, right?

That's it.

There were literally thousands of firms that flim-flammed, robbed and raped investors for five full years from 1995 to 2000 when it all started to come apart. Jim Cramer pounded the table just a month before the explosion insisting that you must buy a passel of tech stocks which began imploding just a month later, as every one of their "growth plans" were in fact based on this little piece of fraud. Over 50 million Americans had their retirement portfolios shredded and turned into dust, and yet of the literal thousands of CEOs who participated knowingly in this fraud a grand total of ONE went prison for it?

The rest are still enjoying their yachts, while Cramer was rewarded with a TV show.

The same thing is happening right now.

As I write this I am seeing earnings releases that are simply false. They were false in the spring of 2007, where WaMu claimed "earnings" that in fact were more than half capitalized interest from "Option ARMs" - that is, negative amortization - and they still are.

The difference is that this time they're playing with the accounting rules to get their numbers.

Due to the fiction of fitting accounting "rules" to whatever executives would like in order to steal, this was claimed as "earnings" yet there was no reserve taken for the fact that it was easily foreseeable even then that home values would decline, rendering that interest uncollectable.

Was this reserved against? No. The stock traded at $30, and the Yahoo boards were full of people cheering that they were paying their 50 cent dividend, even though their cash income was insufficient to pay it - they were digging into their cash reserves since "capitalized interest" can't be spent.

What's WaMu's stock trading at now, a year later?

Now we have analyst after analyst showing up on CNBC saying that its "wrong" to force mark-to-market, in that it "doesn't fairly value" these assets. Yeah, right. The truth is, as usual, a bit more complex.

During the last few years we've seen firms "lever up" to insane degrees, trying to get yet more out of the market by increasing gearing rather than improving internal operating efficiency. But leverage is the great destroyer, in that when the market turns it changes what could be a middling and very survivable loss into a life-threatening event.

Buried in JP Morgan's results was the disclosure of huge increases in delinquencies against all consumer credit classifications - home equity, auto, credit card, along with yet more "Level 3" shifting.

The Investment (and many commercial) banks in the United States had "Level 3" claimed "assets" that, a couple of quarters ago, were in excess of their shareholder equity, with some in excess 2-3 times over.

Over the last two earnings reports these "assets" have gone parabolic - and yet we know for a fact that these banks are not doing deals and generating "new" assets. They are shifting assets for which they do not like the market price to the "Level 3" bin and keeping the marked "value" wherever they want, because what the market will pay for those assets is a number that they find "distasteful."

Well I find it distasteful when I buy a stock and then it gets cut in half, or I buy a PUT and then it goes to zero, but that doesn't entitle me to claim that the market price is wrong. I am in fact forced to take my mark, whether I like it or not, and whether it results in a realized loss or not.

But in the world of fraud, theft and scamming that is Wall Street - a world that has spanned both Democrat and Republican administrations and Congresses, the fiction of claiming that something is worth whatever a bank wants it to be worth is alive and well.

These banks could take dogsqueeze, put it in a box and slap a $1 million price tag on it, and given the utter lack of prosecutorial supervision of the law - existing law - they'd get away with it literally forever.

They could then make loans against this "value" and yet what they actually hold is worth zero.

When they ran low on cash they'd then tender that dogcrap to The Fed for a TAF or PDCF loan, and that's ok too - our Congress simply doesn't give a damn as the hundred million dollars in bribes, er, "campaign contributions", insure that blatant violations of The Federal Reserve Act are not only tolerated but cheered whenever Wall Street needs more "slop" for its pigtrough - at your expense.

Nor is it confined to banks. Sallie Mae this evening said:

"SLM Corp. (SLM) swung to a first-quarter loss and warned it can't make profitable loans at this time, prompting the nation's largest student lender to assess its operation and call for a "system-wide liquidity solution."

The company, known as Sallie Mae, also said tightened credit markets have " dramatically" increased the cost of funds."

Wait a second! If you can't profitably operate you are bankrupt! Perhaps not this instant, but certainly down the road. In the real world when you come to this conclusion you put together a plan to wind up your business and close the doors.

Hello! Is anyone home?

Congress and Wall Street can't change the world's opinion of what this all means on the world stage, and here's the answer that has been given to us by the rest of the world's economies and governments:



This is what you, Joe Reader, get for sitting on your ass and thinking this isn't worth raising hell about.

The change in your real wealth - the squeeze you are feeling on your genitals as your disposable income disappears - is entirely due to your refusal to get off your fat ass and raise a stink about this.

That nice little triangle, by the way, will take us to 65 on the DX if it breaks as expected, likely all at once, which is another 15% devaluation of the dollar from where we are here, and that will immediately translate into oil, food, and all products (we import basically everything, as we've allowed corporations to send most of our industrial production overseas to Vietnam and China, with "customer disservice" going to India.)

Gas prices, for example, are not high because of "evil oil companies making record profits."

They are high because you have sat on your ass while Wall Street cooked up one fraud after another since the 1990s and you have refused to make a phone call, write a letter or fax, or send an email - at least one a week - to your lawmakers demanding that they cut this crap out.

Add into that a supply/demand imbalance and you get a rocketshot in prices - partially fueled by supply and demand and then multiplied in effect by currency imbalance.

If Congress wants to address this it can start with the refusal of all PAC money from Wall Street and then issue congressional subpoenas for the valuation models that these scam artists have been using, with that to be followed up by referrals to a special prosecutor for investigation of racketeering.

Real consumer earnings (you know, what you take home in your pocket?) are, in fact, down for the 5th straight month year over year, the media admits. But even that's a fraud - it understates the problem.

In reality, earnings for all but the top 1% of Americans have been down since 2000 and yet prices are up dramatically. Food has more than doubled in eight years, gasoline and heating oil are up 300% and medical costs have more than doubled. Education has more than doubled in cost.

Google, the "darling" of the tech sector, has had the monitoring folks at Comscore state that paid clicks - the metric of growth in Internet advertising and sales - have been flat as a board since Christmas. There has been a violent deceleration in this metric since the 3rd quarter - stats for 3Q07 were up 48%, yet only up 25% in Q407 and now we're in the low single digits - with March registering at 2.7%.

In short, growth of Internet Advertising (and thus, one should assume, sales) has basically gone to zero.

If those numbers are anywhere near accurate then pricing cannot possibly be maintained either which means Google is about to miss by a mile on both revenues and profits.

More importantly, it means that "The Internet Will Save Retailing" meme is, once again, false - just like it was false in 1999.

Once again, the fraudsters will escape with your money.

All of it will happen because of you.

Its not their fault, really. Bank robbers exist to rob banks. Its what they do.

Expecting anything different from a bank robber goes beyond the realm of stupid; those who believe that an entire industry that has made its money by systematically lying for the last 20 years is going to become "honorable" on their own are, to be blunt, insane.

The only check and balance against this behavior is lots of cops with open eyes. But now we not only have a dearth of cops, those that we do have are either bribed or sleeping - and in some cases both.

What do you think the outcome would be at your local bank if they hung out a big sign that said "our security guard has no bullets in his gun, and our cameras don't work"?

I hope you like your 401k being shredded - just don't come looking to me for help when it happens, you try to retire, and find that not only is your 401k gone but Washington DC has given your Social Security to Wall Street and The Builders to bail them out!

If you do, you'll find that I'm a quite-cantankerous old cuss and your request will not meet with a polite response.

Want it all in video format? Here 'ya go....