By MICHAEL GRAY

As we wrote last week: Welcome to USSA.

We said under the United Socialist States of America charter, bailed out companies will no longer be able to:
•    Own private planes.
•    Pay private club fees.
•    Restrict top tier salaries to a percentage of the lowest paid worker.
•    No bonuses in firm if you layoff workers.
•    No bonuses if the firm’s stock price is down 50% for last 12 months.
•    No executive gyms or lunchrooms. All facilities open to all.
•    No executive retreats or offsite meetings that exclude some workers.

Welcome to France without great food with rich sauces.

As President Barack Obama’s chief of staff Rahm Emanuel is quoted as saying, never let a crisis pass without effecting massive change. In effect the Wall Street model is so broken, let’s wipe it out and start again.

Gordon Gekko meets Karl Marx. Greed is gone.

Capitalism is no longer the driving force within the US markets. Creeping socialism, where the government’s hand is the driving force within markets.

This is so evident in the bond market. From the size of the government’s offerings to its backstopping other marketplaces to prop up pricing and available credit to no-functioning banks and financial firms.

Jobs Report

The Bureau of Labor Statistics is slated to issue its January unemployment number on Friday. Estimates range in the low 500Ks, with private sector cuts.

Let’s remember the January number does not include phantom jobs that the BLS says was created but cannot be accounted for under its “Birth/Death Model.”

For whatever reason economist never take this fact into account for January’s number and therefore the number usually surprises Wall Street.

Therefore my estimate will be 575K with the bogus employment rate at 7.5%. Although the true unemployment rate is closer to 14% if you include people taking part-time jobs because they can’t find full-time work and also include people who have fallen off the jobless rolls because they could not find work and their benefits have run out.

Modifying Mortgages

Next week’s economic pronouncements from Team Obama on turning the credit crisis around and bailing out the banks will have mortgage mediation and modification as a large component to placate those who say TARP 1 was for Wall Street not Main Street.

I will have more on this on Saturday.

For more on Wall and Washington and the cratering economy see: http://mgray12.wordpress.com