Allocations of $825 Billion Stimulus Package Disclosed

A Bill introduced today by House Democrats, highlights the $825 billion stimulus plan that is supposed to lead America out of its current deplorable state. This will undoubtedly cause ripples in both the Congress and Senate as the fight for the spoils begins.

In a nutshell the proposed package consists of $275 billion in tax cuts, which may prove problematic with Republicans as it is less than the 40% of the bill that was supposed to win GOP support ($330 billion).

The $550 billion balance would be spent as follows:

• Energy: $32 billion to fund a "smart electricity grid", $20 billion for renewable energy tax cuts and tax credit for R&D; $6 billion to weatherize modest income homes.
• Science and Tech: $10 billion for science facilities, $6 billion for high speed Internet to rural areas, $1 billion for 2010 census.
• Infrastructure: $32 billion for transportation projects, $31 billion to build and repair federal buildings and other public infrastructure, $19 billion in water projects $10 billion in rail and mass transit projects.
• Aid to poor and unemployed: $43 billion for extended unemployment benefits, $20 billion for food stamp benefits, $4 billion for supplemental Social Security Income payment, $2.5 billion in temporary welfare payments, $1 billion in home heating subsidies, $1 billion for community action agencies.
• Education: $41 billion grants to local school districts, $79 billion in state fiscal relief to prevent cuts in state aid $21 billion for school modernization; $16 billion to boost Pell Grant; $2 billion for Head Start.
• Health care: $39 billion to subsidize health care insurance for unemployed, $90 billion to help states with MedicAid, $20 billion to modernize health info systems, $4 billion for preventative care, $1.5 billion for community health centers.
• Housing: $13 billion to repair and make more energy efficient public housing projects and help the homeless.
• Law enforcement: $4 billion in grants to state and local law enforcement.

We didn't care to add this up; we are sure it does not add up to the $550 total. After all it comes from the same people who wanted to repeal an excise tax for kids' arrows in the original TARP.

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Banc of America Moving Earnings Date to Coincide with Citi

The previously scheduled January 20 conference call is being pulled to January 16 Friday bright and early at 7am. Ken Lewis undoubtedly has many good news he cant wait to share. At least it is not at same time as Citi (8am), or one would think one is trying to hide behind the other... which is simply ludicrous Sphere: Related Content

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Death Watch Update: Smurfit Demise Rumors Exaggerated

According to debtwire, Smurfit Stone DID in fact make a payment on its 7,375% Notes. If you sold today, don't forget to reload tomorrow. Sphere: Related Content

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Breaking News: US Airways Plane Has Crash-Landed in Hudson River

Apparently the plane is an Airbus 320 flying from LaGuardia to Charlotte, NC. The plane is semi-submerged in the Hudson River and is "slowly sinking". According to the US Airways website this is flight 1549. Media reports there were 148 passengers and 6 crew members onboard when the plane crash-landed into the river. The plane struck a flock of geese on take off. The crash occurred off of 50th street in Manhattan. According to the FAA everyone on the plane is safe and off the plane.

Turbofan engines for the A-320 are apparently made by either CFM International with the CFM56 engine, or International Aero Engines with V2500. The CFM56, specifically the 5B variant, is assembled by GE in Evandale, OH and by Snecma in Villaroche, France. The V2500 engine is a two-shaft, high bypass engine, while International Aero Enginers is a consortium of four companies: Pratt & Whitney, Rolls-Royce, Japanese Aero Engine Corporation, and MTU Aero Engines. More than 1,300 V2500-powered aircraft are currently in operation and have accumulated over 40 million flight hours. In Addition to the A-320, the V2500 power the MD-90 airplane. Sphere: Related Content

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Death Watch Update: Fried Green Tomatoes Fried

Death Watch candidate, greenhouse tomato producer and employer of illegal immigrants, Eurofresh Farms, does not disappoint. The Company earlier filed an 8-K saying it will not pay interest on its 11.5% Senior Notes due 2013, but before bondholders scream bloody murder, "the non-payment does not constitute an event of default under the indenture" and that this is just a testing of whether this whole grace period things works....kinda like exactly a year ago when it did the same thing. Furthermore, Eurofresh "has initiated a strategic alternatives review process to take advantage of current market opportunities to enhance the capital structure." Well, they obviously know something Lazard doesn't cause last time we checked "market opportunities" thought that Nortel wasn't a very appropriate DIP candidate. It is likely that secured lender Silverpoint will just say enough, and take over the few hundred or so tomatoes that its secured credit facility is financing.

Apparently Alvarez and Marsal has been hired to succeed where Lazard has failed.

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Banc Of America Bail-Out #2

CNBC reporting that Banc of America to receive more tax money to fund their phenomenally well-run operation. With purchases such as Angelo Mozillo's golden parachute and Merrill Lynch's empty cubicles this makes lots of sense. Looks like federal guarantee will be $100-$200 billion...

Erin Burnett asking the right questions; market not giving rat's ass Sphere: Related Content

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Step-By-Step Guide to Near-Term Budget Deficit Funding

With the U.S. government unable to print money fast enough, and "sophisticated" investors rushing to buy every bond Washington will peddle to fund the upcoming multi-trillion budget deficit, Zero Hedge has decided to make life easier for everyone and provide a cribsheet for all upcoming Bill, Note, Bond and TIPS auctions. We wish everyone the best as they earn negative 2-100% real interest rates on their investments.

Gold -> Lead

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Market Not Sure Why It Is Rallying But Doing So Anyway

S&P posting a 20 point rally in past hour. Talking heads speculating this is due to expections of more taxpayer money about to come and bail everyone out via TARP 2 any second. This obviously did miracles last time around. Sphere: Related Content

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Death List Update: Six Flags On Defibrilator Alert

According to sources, the indenture trustee on Six Flags' 12.25% Notes due 2016 has confirmed that a $24.5 million interest payment on the notes was made. This buys the company a whopping two weeks before it has to make its February 1 coupon payment on its 8.875% Notes due February 2010. If the Company decides not to pay that particular coupon, it will have paid $1.6 million a day to keep operating out of bankruptcy between now and then.

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GM - The Plane Has Crashed Into The Mountain

Conference call with slides in progress...

DETROIT, Jan. 15 /PRNewswire/ -- General Motors today provided an update on company restructuring efforts included in the viability plan submitted to the federal government last month, and announced more conservative industry volume planning assumptions to ensure the viability plan is successful even in the most challenging of markets. Sphere: Related Content

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Breaking News: Governator About to Hire Lazard to Find DIP

*SCHWARZENEGGER SAYS CALIFORNIA IS IN `STATE OF EMERGENCY' Sphere: Related Content

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Blackstone Doesn't Owe Break-Up Fee to ADS

Insider trading powerhouse Blackstone has been granted some relief over its scuttled $6.6 Billion acquisition of Alliance Data Systems, and Delaware Chancery Court Judge Leo Strine has ruled they are off the hook for the $170 million break up fee. Sphere: Related Content

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Lehman Carcass: Feeding Ground for 513 Lawyers

A notice sent out yesterday to all known and unknown lawyers involved in the "biggest bankruptcy of all time" can be found here.


Lawyers A Thru C, for full list click above

Since we at Zero Hedge have lots of free time, we decided to count 'em and came up with a grand total of 513 lawyers! Do all these people need to be involved in the case? No. Are all of them providing any benefits? Of course not. Are they all getting paid by the company's creditors as its estate they "help" unwind? Most definitely. Even Judge Peck's head is starting to spin with all the associated legal costs "I'm deeply concerned about the overall costs and expenses of this case," Peck said. "Just because the case is large, doesn’t mean the case should be viewed as a blank check for professionals."

In the meantime, finance professionalw who have a morbid interest in Lehman events pre- and post-petition, and would like to be considered for the examiner post, should submit their resumes to U.S. Trustee Diana Adams who is currently interviewing candidates for Dick Fuld's future executioner.

Speaking of lawyers, Milbank Tweed, whose official status in the case is to counsel the official creditor committee (i.e., provide the guys who have lost gobs of money with information, not just monthly invoices), is doing all it can to limit how much information becomes available in the case, while an unlikely hero for the creditors is emerging in the face of New York Comptroller Tom DiNapoli. DiNapoli himself is in some deep doodoo, as the New York Pension fund that he manages has lost over 40% in the past year and seems hell bent on recovering at least some of that: whether or not he is successful before he has to tell thousands of policemen and teachers that their retirement funds are, well, gone, is unknown.

But back to Milbank - much to the chagrin of Judge Peck himself, Evan Fleck of Milbank argues that the examiner should have a narrower job description than being endowed with a "broad scope" of powers, to which Peck's response is that he has a "cognitive problem" with limiting the examiner's report to just facts. "Any useful investigation would have to be colored by some form of judgment." ($$$ link here) Why Milbank, who, contractually, should be interested in getting as much info as possible, is pushing hard to keep developments under wraps is a bit of a mystery to us. But then again, in this case, where every motion has been steamrolled with blistering speed and where the only beneficiaries have been select insiders, and where Peck has been signing off on wrong decision after wrong decision with the same aplomb as Henry VIII used to sign divorce papers (from the original sale of the Lehman brokerage unit to Barclays for pennies, after Barclays declined to buy Lehman outright in the day prior to filing, to the subsequent sales of the R3 and Neuberger Berman investment unit to ex-Lehman professionals) nothing surprises us any more.

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Breaking News: GM Cuts 2009 Sales Outlook as Economy Worsens

Translation: taxpayers, give us your wallets. Allegedly, GM will present a new top end estimate (which recently was the absolutely worst case estimate) of 10.5 million, down from 12 million, at a Deutsche Bank conference later today. Sphere: Related Content

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Turkey Central Bank Rate Cut To 13%

Now that's some aggressive rate cutting Sphere: Related Content

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Chris Whalen: Bankruptcy Inevitable "End Game" for Citi

In a Bloomberg TV telephonic interview, Christopher Whalen, managing director of Institutional Risk Analytics, discusses the possibility that Citi may file for bankruptcy, which according to him is "inevitable". Our advice to Vikram regardless of what he does - don't hire Lazard if you need a DIP. Sphere: Related Content

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ETF Pick of the Week: SRS

Zerohedge has invested its collective $0.69 (this by the way is also our disclaimer that we are unabashedly pushing our book) in the SRS ETF. SRS is an ultra short fund, double inverse tracker of the Dow Jones U.S. Real Estate Index. We would post the links that disclose the current state of the U.S. residential and commercial mortgage markets but frankly unless you have been living in 740 Park for the past 2 years, you should have an idea by now.

Technicals are sweet, with this baby hitting $260 the last time Citi was at this price so there is some nice post short squeeze upside... Top 10 Index constituents of the 79-company fund, are such future DIP hunters as Simon Property Group (7.76%), Vornado Realty (4.69%), Public Storage (4.56%), Equity Residential (4.31%), Boston Properties (3.99%), ProLogis (3.87%), HCP (3.59%), Plum Creek (3.08%), Kimco Realty (2.90%) and Avalonbay (2.71%). The P/E ratio as given by proshares is 15.89x, and a 5.28% dividend yield... We would probably recommend selling once it hits the low to mid 200s for a nice 3x return. Start buying.

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View the full srs chart at Wikinvest

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Ezra Merkin's 6/7B Duplex at 740 Park About to Go For Sale

According to CNBC sources, NY AG Cuomo has issued a subpoena to Merkin to explain his relationship to Madoff, some charities, and encompasses Ezra's Ascot and Ariel funds.

********UPDATE********

"At least 10 prosecutors are involved in the investigation"..... uh oh, they really are regrouping forces on this one Sphere: Related Content

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Moody's Lowers JPM to Aa3 from AA2

Buffett's cronies finally waking up Sphere: Related Content

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Despite Huge Cash Hoard, Potential DIP Lenders Say Throw To Lions

According the the Globe and Mail, the main reason Nortel decided to file for bankruptcy was Lazard's pathetic inability to raise even a dollar of Debtor In Possession financing.... Just for that we will go thru Lazard's court-filed fee applications with a fine-toothed comb, scouring for any expenses at these select Toronto establishments. As Zero speculated three days ago, the DIP market has ceased to exist, and no amount of TARP funding will force banks to lend, even when it comes to super secured loans, even when the interest rate that can be extracted would be considered usurious if people still cared about that thing, even when the creditor is such a formerly-legendary names as Nortel Networks.

Sources said "said the company's board opted for court protection because it was unable to raise conventional bankruptcy loans, known as debtor-in-possession or DIP financing. Typically, banks are eager to make DIP loans because they charge high rates and rank as one of the best-secured loans, but during the deepening credit crunch few banks are willing to lend well-protected loans to distressed borrowers. Without a DIP loan, one source said, Nortel's board opted to file for protection while it still had a large cash reserve and before it was required to pay more than $100-million Thursday to certain bondholders."

M&A bankers who recently left their posts in droves to join restructuring advisories in hopes of catching the upswing of the next bubble, may be left in the cold as Chapter 7 (where monthly retainers are non-existent) becomes the new Chapter 11.

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