STOCK MARKET WATCH, Wednesday March 14

[ozymandius]

Wednesday March 14, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 677 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2270 DAYS
WHERE'S OSAMA BIN-LADEN? 1974 DAYS
DAYS SINCE ENRON COLLAPSE = 1934
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 9
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54


U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON March 13, 2007

Dow... 12,075.96 -242.66 (-1.97%)
Nasdaq... 2,350.57 -51.72 (-2.15%)
S&P 500... 1,377.95 -28.65 (-2.04%)
Gold future... 649.40 -0.90 (-0.14%)
30-Year Bond 4.66% -0.03 (-0.72%)
10-Yr Bond... 4.50% -0.06 (-1.27%)






GOLD, EURO, YEN, Loonie and Silver


PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. Today's Market WrapUp

Torpedoed by Sub-Prime -- Again
BY FRANK BARBERA, CMT

“2007 is going to suck, all 12 months of it,” said CEO of D.R. Horton, the nation's largest homebuilder, Don Tomnitz at the companies March 7th conference call. Criticized for bluntly speaking his mind, the rather extreme verbiage coming from a top drawer CEO underscores the outlook ahead with Tomnitz really telling it like it is. While his wording may offend more sensitive ears, the content of his message is at least honest, and probably on the mark -- a far better outcome than the seemingly endless industry lying, deceit, and cover-ups that has led so many in the falling housing market, proclaiming a bottom, and the “worst is probably” over at virtually every turn. Few industries have a lock on more disingenuous behavior than the homebuilders and realty crowd who “somehow’ manage to consistently find the world's most blindly optimistic economists, (i.e. shills). So much so, even the guys on Wall Street blush. After all, we are now treated to the admission by New Century Financial – the nation's #2 Sub-Prime Lender -- that they made an “inadvertent error” on the magnitude of $500 Million Dollars? -- only 500 Million!!!! -- Hello? Nope, nothing but honesty, and good intentions there…

-cut-

Of course, it is this writer's continued view that we are a long, long way from any type of important cyclical economic low, either for the broad economy which is weakening, or for the real estate/housing market which is in a serious recession. Just look at the latest information regarding the number of Homes For Sale that are Vacant. Going back to 1955, the US Vacancy Rate has never seen this type of dramatic surge. One year ago, the number of vacant homes waiting to be sold stood at a total of 1.57 million homes.

-see chart-

Today, the number of vacant homes waiting to be sold has surged by 34% to a total of 2.10 million homes, by far the most rapid increase ever recorded. As a result, the US Vacancy Rate for owned units has jumped to a record 2.70%, up from 2.00% a year earlier, which is now virtually double the long term average of 1.40% for the vacancy rate. From 1955 to 2005, the vacancy rate had never been above 2.00%, highlighting another element of just what kind of boom/bust dynamics are now potentially at work in the present cycle.

http://www.financialsense.com/Market/wrapup.htm

[ozymandius]

2. Today's Reports

8:30 AM Current Account Q4
Briefing Forecast -$204.0B
Market Expects -$203.5B
Prior -$225.6B

8:30 AM Export Prices ex-ag. Feb
Briefing Forecast NA
Market Expects NA
Prior 0.3%

8:30 AM Import Prices ex-oil Feb
Briefing Forecast NA
Market Expects NA
Prior 0.0%

10:30 AM Crude Inventories 03/09
Briefing Forecast NA
Market Expects NA
Prior -4848K

http://biz.yahoo.com/c/e.html

[UpInArms]

17. 8:30 reports: 2006 Current Account Deficit @ record $856.7 billion

02. U.S. export prices up 4.7% year-on-year
8:30 AM ET, Mar 14, 2007 - 1 minute ago

03. U.S. Feb. export prices rise 0.7%
8:30 AM ET, Mar 14, 2007 - 1 minute ago

04. U.S. 2006 current account deficit grows to record $856.7 bln
8:30 AM ET, Mar 14, 2007 - 1 minute ago

05. U.S. import prices up 1.3% year-on-year
8:30 AM ET, Mar 14, 2007 - 1 minute ago

06. U.S. Q4 current account deficit narrows to $195.8 bln
8:30 AM ET, Mar 14, 2007 - 1 minute ago

07. U.S. Feb. imported petroleum prices rise 2.0%
8:30 AM ET, Mar 14, 2007 - 1 minute ago

08. U.S. Feb. nonfuel import prices fall 0.2%, 19-month low
8:30 AM ET, Mar 14, 2007 - 1 minute ago

09. U.S. Feb. import prices up 0.2% vs. 0.7% expected
8:30 AM ET, Mar 14, 2007 - 1 minute ago

[Roland99]

18. U.S. current account narrows in Q4 (Annual deficit grows to record $856.7 bln)

http://www.marketwatch.com/news/story/us-current-account-gap-narrows/story.aspx?guid=%7B9D8F1B1E%2D1493%2D46EA%2DAF1E%2D51D2F7AE489B%7D

The U.S. current account deficit narrowed by 14.6% to $195.8 billion in the fourth quarter, the Commerce Department reported Wednesday.

The deficit, the lowest since the third quarter of 2005, amounted to 5.8% of the nation's gross domestic product.

For all of 2006, the current account deficit grew to a record $856.7 billion, totaling 6.5% of GDP.

Economists had expected the current account deficit narrow to about $205 billion in the fourth quarter.

[Ghost Dog]

22. The inflation in export prices and lower (consumer) imports

anything to do with that?

[Roland99]

31. Well, import prices fell (lower crude?)

http://www.marketwatch.com/news/story/us-import-prices-falling-outside/story.aspx?guid=%7BFF40AF8E%2D316C%2D4A1F%2D8A4A%2D7AE56783E444%7D

[ozymandius]

3. Oil prices hover around $58 a barrel

SINGAPORE - Oil prices edged higher in Asian trading Wednesday ahead of U.S. government oil inventories data expected to show declines in some fuel stocks.

"The crude oil futures market has rebounded above $58 as traders focus on the expectation that this week's U.S. inventory report will show declines in products inventories, both gasoline and distillates," said Victor Shum of Purvin & Gertz in Singapore.

Light, sweet crude for April delivery gained 23 cents to $58.16 a barrel in electronic trading on the New York Mercantile Exchange mid-afternoon in Singapore.

The contract dipped by almost a dollar on Tuesday to settle at $57.93 a barrel following a decline in Wall Street which stirred worries about the U.S. economy and demand for energy.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

4. Chevron sees output growth, but costs threaten

NEW YORK (Reuters) - Chevron Corp. (NYSE:CVX - news) said on Tuesday its developing oil and natural gas projects could produce about 1.1 million barrels of oil equivalent per day by 2011, but surging costs may threaten some of the ventures.

The second-largest U.S. oil company raised cost estimates for several of its huge projects and pulled previously disclosed cost projections for many others, as it evaluates those projects to see which are viable.

-cut-

Oil industry costs have soared in recent years as booming crude oil prices have fueled demand for drilling rigs, steel and other materials.

The company raised its cost projections for projects including its Athabasca oil sands project expansion in Canada, as well as projects in Indonesia and Kazakhstan.

http://news.yahoo.com/s/nm/20070314/bs_nm/chevron_projects_dc_2

[Roland99]

30. U.S. CRUDE SUPPLIES RISE; GASOLINE AND DISTILLATES INVENTORIES DIP

[Roland99]

36. oops...replied to wrong post.

[ozymandius]

5. U.S. mortgage applications rose last week: MBA

NEW YORK (Reuters) - U.S. mortgage applications rose last week, with both new purchases and refinancings driven up by the lowest long-term home loan rates since early December, an industry trade group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted mortgage application activity index rose 2.8 percent in the week ended March 9 to 690.5, the highest reading since 721.2 in the week ended December 8.

A year ago, this measure stood at 574.4 and 30-year loan rates were at 6.42 percent.

http://news.yahoo.com/s/nm/20070314/bs_nm/usa_economy_mortgages_dc_1

[ozymandius]

6. Treasury bond prices close higher

NEW YORK - U.S. Treasury prices rallied Tuesday as stocks lost ground and amid continued worries over the subprime mortgage market. A weaker-than-expected retail sales report also boosted government bonds.

At 5 p.m. EST, the 10-year Treasury note was up $5.00 per $1,000 in face value, or 16/32 point, from its level at 5 p.m. Monday. Its yield, which moves in the opposite direction, fell to 4.49 percent from 4.55 percent.

The 30-year bond rose 22/32 point. Its yield fell to 4.66 percent from 4.70 percent.

-cut-

Treasury prices, already up at the start of New York trade, held higher throughout the day Tuesday, with investors initially cheered by February's softer retail sales report. Prices also rose as stocks stumbled.

http://news.yahoo.com/s/ap/20070314/ap_on_bi_ge/bonds_4

[ozymandius]

7. GMAC to get $1 bln from GM, cites subprime pressure

DETROIT (Reuters) - General Motors Corp. will inject $1 billion into GMAC, its former finance arm said on Tuesday, a capital infusion needed to complete the sale of the automaker's majority stake in the face of escalating defaults in the U.S. mortgage market.

GMAC, which reported results on Tuesday, said that even after the equity injection from GM, "continuing pressures in the U.S. mortgage sector" would weigh on its future earnings.

Under terms of its sale to a group led by Cerberus Capital Management, GM had guaranteed a minimum book value of $14.4 billion when the sale closed at the end of November.

However, a recalculation of GMAC's book value revealed a shortfall caused by the mortgage losses that GM is now trying to address with the $1 billion cash injection this quarter.

http://uk.reuters.com/article/wtMostRead/idUKWEN536020070314

[ozymandius]

8. Australia's Subprime Home Loans Less Risky Than U.S. (Update1)

March 14 (Bloomberg) -- Australia's A$10 billion ($7.8 billion) subprime mortgage market is smaller and has fewer loan defaults than the U.S., reducing the risk of home-loan companies being forced to close, analysts say.

U.S. subprime borrowers fell behind on mortgages at the highest rate in four years in the fourth quarter and foreclosures on all types of home loans rose to a record, the U.S. Mortgage Bankers Association said yesterday.

The data came after New Century Financial Corp., the second- biggest U.S. subprime mortgage lender, said March 12 it didn't have enough cash to pay creditors. Shares of Accredited Home Lenders Holding Co., a smaller U.S. rival, lost more than half their value yesterday as its lenders demanded repayments.

-cut-

In Australia, mortgage payments to non-bank lenders that were at least 90 days late rose to 0.87 percent of the total in 2006, from 0.33 percent in 2004, according to Standard & Poor's. Such lenders are the biggest providers of subprime home loans.

http://www.bloomberg.com/apps/news?pid=20601081&sid=aZoVcXwZGXhQ&refer=australia

[ozymandius]

9. Valley may be insulated from mortgage morass

More people nationwide are falling behind on their mortgage payments, especially those with poor credit ratings who bought their homes using subprime loans, and it's reverberating throughout the U.S. economy.

Local economists, however, say the fallout for the Bay Area housing market won't be severe.

-cut-

But on the local level, experts say, the effect on the housing market may be mild, though some first-time buyers will find it harder to get loans. "The difficulties with the subprime lenders will probably put more homes on the market and increase the possibility that prices will go down," said Stephen Levy of the Palo Alto-based Center for Continuing Study of the California Economy. However, "the effects will be less in Silicon Valley than in many other areas," he said.

That's largely because there are fewer subprime borrowers here than in many other metropolitan areas. Furthermore, Levy said, the proportion of buyers who used subprime loans has been falling in the San Jose area for the past few years, while it rose in more affordable areas of the state such as the Central Valley.

http://www.mercurynews.com/news/ci_5432047

[ozymandius]

10. Subprime meltdown "no sweat" for Goldman Sachs

BEIJING, March 14 (Xinhuanet) -- The big, bad words on Wall Street are "subprime mortgage market" because of its recent meltdown. But the reassuring words from the Street's leading investment bank, Goldman Sachs, could well be "no sweat."

Goldman, which surprised investors with the strength of its earnings for the first fiscal quarter of 2007, said the credit markets remained strong despite "significant weakness" in the subprime mortgage sector, media reports said Wednesday.

-cut-

Goldman said its mortgage business was strategically important, but relatively small. To the extent that it invests in mortgages, it tends to focus on prime mortgages and commercial mortgages. The mortgage business is part of Goldman's larger Fixed Income, Currency & Commodities unit.

-cut-

Goldman's overall financial performance for the sector easily beat investor expectations. It reported earnings of 3.20 billion dollars, or 6.67 dollars a share, on revenue of 12.73 billion dollars. Earnings were up 29 percent from 2.48 billion dollars, or 5.08 dollars a share, on revenues of 10.43 billion dollars during the first quarter of 2006.

http://news.xinhuanet.com/english/2007-03/14/content_5846735.htm

[Ghost Dog]

33. SEC, NYSE settle with Goldman Sachs

http://money.cnn.com/2007/03/14/news/companies/goldman_sec/index.htm?postversion=2007031410
Stock regulator and major exchange fine investment bank $2 million for f(a)iling to accurately mark stock sales, allowing customers to conduct an illegal trading scheme.

NEW YORK (CNNMoney.com) -- The Securities and Exchange Commission and NYSE Regulation settled enforcement proceedings against Goldman Sachs over an illegal trading scheme, the company said Wednesday.

Goldman (Charts) brokers failed to accurately mark stock trades, allowing customers to illegally sell securities short prior to public offerings of companies' shares, said the groups.

The SEC and NYSE will require the investment bank to pay $2 million in civil penalties and fines.

/...

[Ghost Dog]

34. Lehman says its U.S. subprime business is small

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=marketsNewsUS&storyID=2007-03-14T144936Z_01_N14283531_RTRIDST_0_LEHMAN-RESULTS-SUBPRIME-URGENT.XML

NEW YORK, March 14 (Reuters) - Lehman Brothers Holdings Inc.'s (LEH.N: Quote, Profile , Research) U.S. subprime exposure is small, with mortgage lending, securitization, and trading accounting for just 3 percent of the company's revenue, on average, over the last six quarters, Lehman's chief financial officer said on Wednesday.

Lehman sees headwinds continuing in subprime mortgages, but is also seeing the beginnings of the return of pricing power, CFO Chris O'Meara said on a conference call to investors.

Recent market difficulties do not represent serious trouble for the global economy, O'Meara said.

/..

[Ghost Dog]

35. Lehman sees more subprime woes

http://money.cnn.com/2007/03/14/news/companies/lehman/index.htm?section=money_latest
But Wall Street bank says meltdown in segment of mortgage industry may open up opportunities.

NEW YORK (CNNMoney.com) -- Lehman Brothers said Wednesday that turmoil in the subprime mortgage business is likely to persist but that could open up some opportunities for the firm.

"{The subprime mortgage business in the U.S.} will continue to face headwinds in the near term," CFO Chris O'Meara told analysts during a conference call. But Lehman is seeing the return of pricing power and "we expect to see various opportunities from the market dislocation," he said.

...

Fellow investment bank Goldman Sachs (Charts) downplayed the idea that it plans to delve deeper into subprime, which it said remains modest relative to its total business.

"We look at opportunities in all sectors if the price is right and if we think the point in the cycle is appropriate," a Goldman Sachs spokesman said Wednesday. "But we are not aggressively pursuing the subprime sector," he said.

So far, subprime woes don't appear to be hurting the bottom line for Wall Street banks.

Lehman (Charts) posted record quarterly results for the first quarter on Wednesday. The investment brokerage said net income rose 6 percent to $1.15 billion, or $1.96 a share, for its fiscal first quarter ended Feb. 28. Revenue jumped 13 percent to $5 billion.

Fellow investment bank Goldman Sachs, which kicked off earnings season for Wall Street on Tuesday, also posted record quarterly results. Bear Stearns (Charts) is next on tap with earnings due on Thursday.

/...

[ozymandius]

11. International stock markets rocked by Street woes

Fears over subprime lending extend around the globe

NEW YORK (MarketWatch) - Stock markets around the world tumbled Wednesday as investors moved to reduce risk, spooked by the sharp sell-off on Wall Street amid mounting fears over rising mortgage defaults.

"The rise in mortgage delinquencies in the U.S. has to be one of the most predictable events of the century so far, but has nevertheless provoked a further reaction in financial markets," said Paul Donovan, an economist at UBS, in a note to clients.

After a 242-point plunge in the Dow Jones Industrial Average, markets in Asia sold off heavily, with the Nikkei 225 losing 2.9% in Tokyo and the Hang Seng in Hong Kong losing 2.9%.

Also in Asia, the Shanghai Composite lost 2% and the Singapore Strait Times index lost 3.3% in late trading.

http://www.marketwatch.com/news/story/international-stock-markets-rocked-wall/story.aspx?guid=%7B1E18C694%2D4ACC%2D4C5F%2DBF4C%2DD57E0EEE83BB%7D&dist=morenews

[Ghost Dog]

20. Asian, European Stocks Plunge

http://www.forbes.com/feeds/ap/2007/03/14/ap3514568.html

Stocks in Japan, Hong Kong, Malaysia, India and Australia all fell more than 2 percent, while shares in Singapore and the Philippines tumbled at least 3 percent.

In Europe, London's FTSE 100 dropped 1.7 percent shortly after the open, while Germany's DAX lost 1.8 percent. France's CAC 40 was also 1.7 percent lower.

On the Tokyo Stock Exchange, Asia's biggest bourse, the benchmark Nikkei 225 index sank 501.95 points, or 2.92 percent, to finish at 16,676.89 points. Foreign investors who bought up stocks during the recent rally led the selling, traders said.

Hong Kong's Hang Seng index fell 2.6 percent, Indian stocks dropped 3.1 percent, while Philippine stocks plunged 3.4 percent.

...

"The U.S. sub-prime concern has cast a great shadow on Asia. The worry is that it could spill over and cause the U.S. economy to slow down, and this will cause a domino effect on the world economy," said Lee Cheng Hooi, technical analysis manager at EON Capital in Kuala Lumpur. "There could be more bloodbath to come."

Still, other analysts maintained that Asia's economic fundamentals remain strong and that the recent round of declines in stock prices were more likely a correction to cool markets that had risen too far too fast over recent months.

/...

[Ghost Dog]

21. European stocks slump as global sell-off resumes

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=eurMktRpt&storyID=2007-03-14T114711Z_01_L2734524_RTRIDST_0_MARKETS-EUROPE-STOCKS-UPDATE-2.XML&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage2

LONDON, March 14 (Reuters) - European shares slid further by midday on Wednesday as a fresh phase of selling underlined worries about the U.S. economy over losses in mortgage lending, and raised the prospect of continued stockmarket weakness.

At 1128 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was down 1.7 percent at 1,440.48 points, adding to Tuesday's 1 percent fall. Shares in the United States slid 2 percent overnight, followed by sharp falls in Asia.

The European benchmark was not far from the lowest level it hit on March 5 in an earlier sell-off that was set in motion by rumours of a crackdown on speculation in China.

The Morgan Stanley index of world stock markets <.MSCIWD> fell 6.5 percent between Feb 27 and March 5 but shares then gained for five days in a row, raising the prospect of a recovery, only to start falling again on Monday.

"Markets were clearly premature in thinking 'right, we've done it, let's start behaving as were earlier'," said Dresdner Kleinwort strategist Philip Isherwood. "This isn't going to wash through within a week." He said that widespread talk of a 10-percent correction in global markets was likely to become a self-fulfilling prophecy. "The 10 percent correction has been spoken of so much that it's now too much of a target not to be a reality," he said.

Banking stocks accounted for more than a third of the FTSEurofirst's fall, with Credit Suisse (CSGn.VX: Quote, Profile , Research), UBS (UBSN.VX: Quote, Profile , Research), Barclays (BARC.L: Quote, Profile , Research), Deutsche Bank (DBKGn.DE: Quote, Profile , Research) and Royal Bank of Scotland (RBS.L: Quote, Profile , Research) all down more than 3 percent.

/...

[ozymandius]

12. U.S. stock futures lower after Tuesday's rout

LONDON (MarketWatch) -- U.S. stock futures declined on Wednesday after the previous session's rout on lingering concerns over the fallout from subprime mortgage lending woes. One piece of good news came from a return to profitability at General Motors, with earnings from investment bank Lehman Brothers also likely to affect sentiment.

S&P 500 futures dropped 0.9 of a point at 1,391.00 and Nasdaq 100 futures fell 5 points at 1739.25. Dow industrial futures declined 29 points at 12,140.

On Tuesday, further trouble for subprime lenders and data showing mortgage defaults on the rise sent the Dow industrials down 242 points, the Nasdaq Composite down 51.7 points and the S&P 500 down 28 points.

http://www.marketwatch.com/news/story/Indications?dist=morenews

[burf]

13. Good morning Ozy,

I guess some folks have now found out that the light at the end of the tunnel was another train!

Question sir, How hard do you think the PPT and other major players are going to push to keep the Dow over 12,000? I think falling below that level is going to be a significant blow to some of the smaller guys in the market.

[ozymandius]

14. Every even number has some psychological effect.

I do believe that our Working Group on Financial Markets (PPT) will be hard at work today to preserve that psychologically important 12000 number. Probably covering shorts on the S&P - even bidding against itself. It would be interesting to hear from SpecimenFred1984 today.

[UpInArms]

19. U.S. home loan fears spark renewed stocks slide

http://www.reuters.com/articlePrint?articleId=USN1318011620070314

LONDON (Reuters) - Global stocks tumbled on Wednesday as fears about the impact of U.S. home owners falling behind with mortgage payments hit financial shares, prompting money to flow into safe-haven government bonds.

By 1138 GMT, the pan-European FTSEurofirst 300 index was down 27 points, or 1.8 percent, at 1,439 points, within striking distance of year's low of 1,428.2, hit earlier this month.

"This seems to be the second leg of the global fall in equities and there is very little impetus to jump in and buy," said one trader. "It's time to fasten seat belts."

U.S. stock futures were pointing to a lower start on Wall Street, extending Tuesday's 2 percent slide driven by falling financial stocks and weaker-than-expected U.S. retail sales.

Lenders in the United States launched foreclosure actions against more than one in every 200 U.S. mortgage borrowers in the fourth quarter of 2006, the biggest share of homes facing the start of the repossession process on record.

...more...

[Loge23]

15. Wage-price pressure

In my industry, we are facing a serious crisis of attracting and retaining service workers (truck drivers, warehouse personnel, counter help). Why? Because these workers cannot afford to live here in South Florida anymore.
A guy in the Keys recently told me that pretty soon in the Keys "millionaires will be cutting the billionaires grass".
This is what it's coming to down here as workers in the below $20/hr range are fleeing for the (northern) border. Those who can flee will leave rented houses/apartments, those who can't sell will be foreclosed, or take the R.E. back down to pre-bubble levels.

This is a critical underpinning of the trickle-down economics so championed by the right. When all the sap has been drained out of the tree, the tree dies. No resourceful recycling here, just take all you can and move on, wait until the next cycle (after the Dems get the blame for the recession).

This economy is not sustainable and we will almost certainly experience significant wage-price pressure in the near term.

Remember (it seems like just yesterday) when all of the economic pundits were debating whether or not the R.E. market was in a bubble?

[UpInArms]

16. dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DX&v=i

Last trade 83.76 Change +0.05 (+0.06%)

Will the Sub-Prime Crisis Cause a Downdraft in the Dollar?

http://www.dailyfx.com/story/special_report/special_reports/Will_the_Sub_Prime_Crisis_Cause_1173861373103.html

New foreclosures on US houses at record highs. Late payments for the sub-prime loans reach the highest level in four years. New Century Financial one of the largest sub-prime finance companies in US and the self-proclaimed “new shade of a blue chip” delisted from the New York Stock Exchange as it teeters on the verge of bankruptcy. Suddenly the crisis in the sub-prime loan market has become the biggest story in the world quickly moving from the financial sections of the Wall Street Journal and New York Times to command the top heading on the nightly news.

Since the start of the year more than 30 sub prime lenders have been forced out of business, while large commercial banks such as HSBC have taken a write down of more than $10 billion on their sub-prime portfolio. The situation has become so dire that Angelo Mozilo Chief Executive of Countrywide Financial, the nation’s largest independent mortgage lender, stated yesterday in a CNBC interview, “This is now becoming a liquidity crisis," and "it's going to get uglier." Meanwhile Washington Mutual, the nation's largest savings and loan, told analysts that its sub prime loan portfolio was performing "exceedingly poorly" and would be a drag on its earnings.

The collapse of the sub-prime market is already creating a slowdown in US consumption. Yesterday’s US Retail Sales ex-autos printed at a much weaker then expected -0.1% loss versus forecasts of 0.3% gain. Spending on housing related sectors such as furniture and building materials dropped -1.7% and -1.4% respectively from the month prior.

A Political Problem

If the rate of defaults and delinquencies in the sub-prime loan market continues to escalate as the year progresses, the story will take on political as well as economic ramifications. Faced with the prospect of more than 2 million new foreclosures this year, US politicians are already scrambling to assert control over the situation. Senate Banking Committee Chairman Christopher Dodd, a Democrat from Connecticut said today, "The impact of losing 2.2 million homes I suspect will be in a lot of areas of our cities and towns that are already pretty hard hit, so we clearly want to look at that and legislate,"

...more...

US Dollar Hit By Another Meltdown in the Dow

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Hit_By_Another_1173822307897.html

US Dollar –The problems in the sub-prime lending market have become too much for even the most optimistic trader to handle. New Century Financial Corp, the poster child of the meltdown in the sub-prime lending sector had its shares suspended from trading on the NYSE today and will most likely be de-listed in the near future. Although the market had become somewhat accustomed to hearing about the problems at New Century Financial, it was not prepared to hear that mortgage delinquencies hit a 4 year high in the fourth quarter. In the sub-prime market, delinquencies reached 13.33 percent and even though non-subprime borrowers are far less likely to be delinquent on their loans, the rate has been growing since the first quarter of 2006. With the housing market just beginning to turn, the worst may be yet to come. The Dow has fallen close to 245 points or 2 percent today, marking the biggest one day sell-off since the 3.3 percent move on February 27th. Risk aversion has returned to markets with traders liquidating all of their risky and high yielding positions. Carry trades have been hit the worst with NZD/JPY falling by 2.2 percent, AUD/JPY falling by 1.51 percent and USD/JPY falling by 1.12 percent. In addition to the problems in the sub-prime sector, consumer spending fell short of expectations for the month of February. Headline sales rose a meager 0.1 percent while sales excluding autos fell 0.1 percent. This is the first drop in sales excluding autos since Oct 2006 and suggests that first quarter GDP will be particularly weak since sales were flat in the month of January. Cold weather and a downturn in the housing market are to blame as sales of furniture and building materials slip significantly. Weaker consumer spending at a time when the sub-prime lending sector is in disarray could force the Federal Reserve to cut rates as early as this summer. With both stock market and housing market wealth of Americans slipping, future growth looks extremely bleak. At this point, the US dollar has few reasons to rally but any further extension lower may not come until Thursday when we have producer prices, net foreign purchases of US Securities and the Philadelphia Fed index on the docket.

...more...

[Ghost Dog]

23. Dollar jumps vs yen on Q4 US current account

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=usDollarRpt&storyID=2007-03-14T130059Z_01_N14248905_RTRIDST_0_MARKETS-FOREX-UPDATE-7.XML
Wed Mar 14, 2007 13:01 PM GMT

NEW YORK, March 14 (Reuters) - The dollar rose to session highs against the yen on Wednesday after a report showed the U.S. current account gap in the fourth quarter was the narrowest since 2005.

Wednesday's data prompted traders to take profits on the yen's gain of more than 1 percent against the dollar on Tuesday.

"The current account picture looks a little better, but (consumer inflation) is still going to be more important for future interest rate moves in the States going into the second half of the year," said Steven Butler, director of foreign exchange with Scotia Capital in Toronto.

"I don't expect dollar/yen to rally too much more, as there seems to be resistance around 116.80," he said.

The dollar climbed against the yen, trading at about 116.63 yen <JPY=> from about 116.35 yen, where it was shortly prior to the economic data. It was up 0.4 percent from late Tuesday.

The euro <EUR=> dipped against the dollar, trading at $1.3184 soon after the report from about $1.3190.

Prior to the data, the dollar and the euro had been strengthening against the yen as bargain hunters moved in following Tuesday's sharp rise in the Japanese currency.

/..

[Ghost Dog]

40. Sterling recovers from 8-month low vs euro

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=ukPoundRpt&storyID=2007-03-14T152142Z_01_L14428117_RTRIDST_0_MARKETS-STERLING-CLOSE.XML

LONDON, March 14 (Reuters) - Sterling rose broadly on Wednesday, recovering from an earlier eight-month low versus the euro in a jittery market where investors were torn over whether they should take on risky carry trade positions.

Sharp falls in equity markets and concerns about the health of the U.S. economy have made some reluctant to shoulder the risk of carry trades, where low-yielding currencies like the yen are borrowed to fund purchases of higher return units.

For others though, with Japanese rates at just 0.25 percent compared to 5.25 percent in Britain, there is still much to play for, resulting in volatile currency markets.

"We are in an environment where it's very hard to predict what's going to happen in the short-term, it's got nothing to do with fundamentals and everything to do with positioning," said Derek Halpenny, currency economist at BTM-UFJ.

Stop-loss levels in sterling versus the dollar and the yen triggered sterling buying in the afternoon, prompting a sharp reversal of earlier losses on carry unwinding, traders said.

By 1456 GMT, sterling was 0.3 percent higher on the day at $1.9338 <GBP=>, having bounced from a session low of $1.9214.

/...

[Ghost Dog]

24. Dollar Holds Up - Could This Be a Signal of Pending Strength?

http://www.dailyfx.com/story/dailyfx_reports/daily_technicals/Dollar_Holds_Up___Could_1173874984198.html?engine=rss&keyword=article
Wednesday, 14 March 2007 12:22:43 GMT
Written by Jamie Saettele, Technical Currency Analyst

• Euro Ready to Dive
• Japanese Yen Channel
• British Pound Takes Out 1.9300
• Swiss Franc Changing Trend
• Canadian Dollar Set to Weaken
• Australian Dollar Correcting Lower
• New Zealand Dollar Set For a 5th Down



/Analysis, charts, read on...

Ed. See also: Will the Sub-Prime Crisis Cause a Downdraft in the Dollar?

[Ghost Dog]

27. European companies feel pain of a strong euro

http://www.iht.com/articles/2007/03/14/business/euro.php
But many companies have shored up their currency safeguards

FRANKFURT: When Louis Gallois, the chief executive of Airbus, sought recently to explain why the plane maker needed to cut thousands of jobs to improve competitiveness, he had a ready culprit — the strong euro.

"A strong euro is a choice," Gallois told workers this month. "Unfortunately, I am not in charge of the currency policy of Europe."

A four-year run-up in the euro against the dollar, and a more recent rise in the euro against the yen, have been cutting into the bottom lines of Europe's blue-chip companies.

For big players like Airbus, whose costs are priced in euros while their products are priced internationally in dollars, the euro's strength can spell trouble if not adequately managed.

But over the last decade, many European corporations have shored up their safeguards against currency movements. Convinced that exchange rates are fundamentally uncontrollable, major companies as diverse as LVMH Moët Hennessy Louis Vuitton, BMW, Volkswagen and GlaxoSmithKline have created business models that account for this reality.

Driven by the need to cut costs and diversify globally, many have smartly rearranged their sourcing of products and services, built new facilities around the world and employed new financial instruments, turning the euro into what raw material prices have long been — a manageable risk.

/read on...

[nitpicker]

25. Whoa, what a ride this morning.

Up about 30/5/5 points at 9:45, back down to -10/-2/1 at 9:50.

[nitpicker]

26. Dipbuyers versus sellers?

Must be the dipbuyers fighting those selling off the firms that invested in subprime.

US STOCKS-Futures fall as mortgage worries spread
Wed Mar 14, 2007 8:25am ET
By Jennifer Coogan
NEW YORK, March 14 (Reuters) - U.S. stock index futures fell on Wednesday after investment bank Lehman Brothers Holdings Inc. (LEH.N: Quote, Profile , Research) added to worries about losses in the U.S. mortgage market that sent stocks tumbling on Tuesday.
Lehman announced record quarterly earnings but said the results were partially offset by weakness in the U.S. residential mortgage sector. Its shares fell 2 percent to $70.58 in electronic trading before the opening bell.
H&R Block Inc. (HRB.N: Quote, Profile , Research), the largest U.S. income tax preparer, fell 10 percent before the bell after it announced it expects to delay filing its quarterly results with regulators and that estimated losses related to its subprime lending unit were $29 million higher than previously estimated. For details, see . For more about the subprime mortgage crisis, see .
Investors fear the problems of lenders who make subprime loans to people with weak credit are spreading to mainstream financial firms and will worsen the U.S. housing slowdown.
Stocks dropped on Tuesday after a bankers' group reported the proportion of mortgages in the initial stages of foreclosure rose to a record. Major stock indexes in Asia and Europe fell more than 1 percent on Wednesday, with shares of financial services companies slumping the most.
"You hate to see the market close on the low of the day. It typically indicates there's more selling to come," said Barry Ritholtz, chief market strategist at Ritholtz Research & Analytics in New York. "Futures don't look too bad, but I've got to think its going to be a choppy trading day. The market has plenty to worry about."

(snip)

[Tace]

28. Getting Some Tactical Nuclear Weapons (Mogambo Guru)

And if you are a Junior Mogambo Ranger (JMR), then you are probably salivating, literally, at the prospect of reaping a lot of those enormous oil riches for yourself so that you could easily afford to stretch your Second Amendment rights to include getting some tactical nuclear weapons and showing that pesky Skyview Neighborhood Association who's REALLY the freaking boss around here.

Richard Daughty, the angriest guy in economics -- World News Trust

March 14, 2007 -- While Total Fed Credit was down by a miniscule $1.7 billion last week, the Federal Reserve managed to buy up, for themselves and their Treasury co-conspirators, $1.3 billion of U.S. government securities. Not much, to be sure, but this slimy tactic is called "monetizing the debt"; the government wants to spend money, but doesn't have any, so it creates and sells some bonds, and the Federal Reserve (to its everlasting shame) dutifully creates the money to buy them, and then actually buys the bonds with the money!

This is, in essence, the government buying its own debt by creating the money (increasing the money supply) for the purpose! This is absolutely crazy! And while there are plenty of you who correctly say that the Federal Reserve is a private bank and not a part of the government at all, I will agree that, yes, it is a private bank, but their website address suffix of ".gov" says it all for me about the supposed independence of the Federal Reserve, partly because I am so paranoid and distrusting, mostly because the Fed has done such a pathetically poor job of preserving the value of the dollar, but also with Very Damned Good Reason (VDGR), as the economic history of the results of central banks colluding with governments is bleak, bleak, bleak indeed.

And if you don’t think that this monetization of debt is an economic horror, I will note that: 1) this means that you have never uttered such nonsense around The Mogambo or you would still be carrying scars to remind you of your folly, and: 2) this kind of monetary crap does not appear anywhere, in any book on economics, except as an illustration of how an economy was horrifically destroyed by its government acting like idiots and debasing the currency, which set off a war, or revolution, or something. Never anything good.

more

http://www.worldnewstrust.com/index.php?option=com_content&task=view&id=1573&Itemid=10029

[natrat]

29. will the ppt jam the shorts- stay tuned

[Roland99]

39. Further down the rabbit hole....

[Ghost Dog]

50. AFX TOP STORIES Macroeconomics 15:30 GMT

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=dd27f457-08c9-4d17-b43a-ca7f67c5a907
Wed, Mar 14 2007, 15:45 GMT

...

2007-03-14 14:55:28
ALL BUSINESS: Global liquidity worries
NEW YORK (AP) - The Federal Reserve and financial markets don't see eye to eye on liquidity. The Fed says it isn't scarce, but investors don't entirely agree.

...

2007-03-14 10:52:44
Credit Suisse/ZEW March economic indicator drops to minus 28.0 pts vs minus 17.3

ZURICH (AFX) - Financial market experts have turned more pessimistic regarding the economic outlook for Switzerland, according to Credit Suisse Group/German ZEW's March survey, with the benchmark indicator dropping to minus 28.0 points from minus 17.3 points in February.

/...

[Ghost Dog]

61. World Liquidity Crisis Emerging

http://www.financialsense.com/fsu/editorials/laird/2007/0314.html
WORLD LIQUIDITY CRISIS EMERGING

With the unraveling of the Yen carry trade, a sequence of events has been set in motion for a world liquidity crisis. Combining this with ongoing pressure from US sub prime deterioration will further harm confidence in US and consequently Asian stock markets.

As of this writing, Asian markets are again down 2 to 3%. I had written last week that confidence in financial markets were dealt a major blow in the first wave of Yen Carry unwinding a week or so ago in the article titled Damage Has Been Done.

This week, we are seeing the second phase of market declines, the US Dow down 230, and as I said Asian markets down 2 to 3% again. To say the least, market sentiment is getting crushed globally.

Now, combine this with still huge Yen carry overhang, and a seriously deteriorating US economy, and we will now see, and are seeing, the emergence of a world liquidity crisis.

I am going to discuss some of the components, there are many facets. But first, I want to say that, with market sentiment now so badly damaged, and the fundamental problems central banks will now have trying to re inflate financial markets – pushing on a string-

the central banks will ultimately fail re inflating financial markets. I do not believe they can either save market sentiment in 07, nor overcome consumer sentiment that is falling like a stone right after the stock crashes of the last weeks. In my judgment, we are possibly right at the cusp of a stock decline of the magnitude of the 1929 stock crash sometime this year.

Now, many people believe that markets will likely recover, that this present world stock decline is merely a correction. But, I view the market recoveries in the US and Asia last week as a dead cat bounce. I am fairly sure that we are going to see a great world stock crash that will make last years stock declines near this time of year look rather benign. The trouble is, this time, the US is now facing the necessity of lowering interest rates, and that will add further fuel to Yen carry unwinding. Many other factors also will just drain liquidity from financial markets, including housing and commercial real estate… and so on, there are many facets to this emerging liquidity crisis so lets get started….

/read on...

[Ghost Dog]

32. 11:30 - Wall St. Bounce #1

Dow 12,060.74 Down 15.22 (0.13%)
Nasdaq 2,351.44 Up 0.87 (0.04%)
S&P 500 1,378.51 Up 0.56 (0.04%)
10-Yr Bond 4.4990% Up 0.0040
NYSE Volume 1,269,827,000
Nasdaq Volume 734,106,000

11:30 am : The indices remain confined to relatively tight trading ranges as both buyers and sellers continue to err on the side of caution. Such uncertainty is further reflected in the fact that sector leadership is now evenly split. Of the five sectors trading higher, Energy (+1.0%) leads the way, extending its reach to the upside as oil prices climb back into positive territory and stall the market's recent momentum.

Technology is posting a respectable gain, but that's due in large part to Qualcomm (QCOM 43.19 +1.36) tacking on an analyst upgrade induced 3.3% surge onto yesterday's 4.3% advance. Two of the other areas attracting buyers are Consumer Staples and Utilities, but that's due primarily to their defensive characteristics. DJ30 -10.37 NASDAQ +1.72 SP500 +0.70 NASDAQ Dec/Adv/Vol 1522/1251/692 mln NYSE Dec/Adv/Vol 1646/1399/592 mln

11:00 am : The market has rebounded but not nearly enough to make a significant change in the standings. Sure, all three indices are retracing their highs of the morning but gains remain modest at best.

As was expected, oil prices have had an impact on today's choppy trading. Crude for April delivery has spiked lower since the last update as traders were expecting a larger than expected build in weekly crude supplies. Fortunately for the bulls, not only are oil prices now languishing near one-month lows below $58/bbl, but the Energy sector's (+0.8%) resilience so far in the face of oil's reversal is also acting as an additional source of market support.

DJ30 +17.65 NASDAQ +6.52 SP500 +4.44 XOI +0.4% NASDAQ Dec/Adv/Vol 1468/1262/552 mln NYSE Dec/Adv/Vol 1594/1370/450 mln

10:30 am : The major averages are still trading in split fashion as investors have few market-moving news items to sustain early recovery efforts. Oil prices, however, may act as a catalyst to set a more definitive tone to today's action.

Crude for April delivery is currently flat near $58/bbl ahead of the Energy Dept's weekly inventories, which will be out momentarily. DJ30 -4.80 NASDAQ +0.96 SP500 +1.41 NASDAQ Dec/Adv/Vol 1806/842/370 mln NYSE Dec/Adv/Vol 2010/865/282 mln

10:00 am : As we presaged less than an hour ago, with regard to this morning's surprise start to the upside potentially running into some headwinds amid volatile market conditions, the market's recent reversal isn't all that unexpected. The Dow and Nasdaq are now in negative territory, but basically flat, as split sector leadership dictates what has so far been little more than a reflexive bounce.

Financials, yesterday's huge disappointment (-3.2%), has recently relinquished what little momentum bargain hunters were trying to muster and is now in the red. With the market closely eyeing this morning's Q1 report from Lehman Brothers (LEH 70.09 -1.91) to provide some color on the health of the troubling subprime mortgage market, the lack of any overwhelming evidence to suggest weakness in the U.S. residential-mortgage sector won't continue to weigh on its securitized products has prompted shareholders to push the stock further into negative territory for the year (-10.1%). ..XBD -1.2%.DJ30 -1.28 NASDAQ -1.56 SP500 +1.06 NASDAQ Dec/Adv/Vol 1073/1372/156 mln NYSE Dec/Adv/Vol 930/1686/86 mln

09:40 am : What was shaping up earlier to be a much lower open for stocks, due largely to follow-through from yesterday's sell-off and ongoing concerns about subprime mortgage woes spilling over into the broader economy, has actually turned out to be a decent open for equities.

A growing sense that yesterday's broad-based downturn was an overreaction is prompting some early bottom fishing. Investors are also finding comfort on the subprime mortgage front after it was reported that Goldman Sachs (GS 199.95 +0.92) and several Wall Street firms are bankrolling subprime lenders with credit in anticipation of a rebound in the troubling sector. With concerns still looming about a possible liquidity crunch tied to an unwinding in the carry trade, further deterioration in the yen following a narrower than expected current account deficit is helping to alleviate such worries. DJ30 +36.16 NASDAQ +8.39 SP500 +6.40 NASDAQ Vol 92 mln NYSE Vol 26 mln

Ed. to add 11:30 blah.

[Roland99]

37. Goldman Sachs says it's not over-regulation

Goldman disagrees with Paulson
Commentary: Treasury Secretary's old firm says it's not over-regulation
http://www.marketwatch.com/news/story/goldman-disagrees-paulson/story.aspx?guid=%7B8CD2B0BD%2DB05E%2D4849%2DBC8F%2D570CF03A7350%7D

One of the great ironies of the debate on whether too much regulation is crimping the U.S. capital markets -- a recurrent theme of Treasury Secretary Hank Paulson -- is a month-old study from the London-based global economists of the firm he used to run, Goldman Sachs.

...

I'm the first guy to say we should get rid of excessive bureaucracy and red tape. But blaming Sarbanes-Oxley (under the guise of "regulation") for a downturn in U.S. competitiveness is like blaming a bad tile job for a house's faulty foundation. Oh, I know there's a cost to regulation that has bitten into profits and steered some companies to either go private or stay private. (As if that is supposedly counter-competitive? Isn't that the cost of the privilege of going public?) And I know some companies are blaming Sarbox for choosing to list elsewhere, such as London's AIM market. (As if some of them would've ever qualified for the Nasdaq in the first place?)

The reality, again courtesy of Goldman "Natural advantages, such as time zone, geographic adjacency and language suggest that other markets will enjoy strong growth ahead. London, Hong Kong and Dubai are all close to large emerging economies with growing pools of capital. Trends that have supported the growth of domestic capital markets in countries like China -- including privatizations, rising household wealth, aging populations and improved corporate transparency and governance -- are likely to occur elsewhere, as well."

What about the much-ballyhooed loss of IPOs, which in turn is being blamed for hurting the economy of New York? "New York's pre-eminence as a global financial center reflects the remarkable rise of the US economy over the past century," the report says. "If the world continues to evolve broadly in line with our projections, it seems likely that capital market outside the U.S. will develop more quickly. In this regard, both London and Hong Kong have natural advantages that New York lacks."

[Ghost Dog]

38. Today's Hot Stock (+3.48%):

Cornell Companies, Inc. provides correction, detention, education, rehabilitation, and treatment services in the United States. It offers its services to adults and juveniles in federal, state, and government agencies...

http://finance.yahoo.com/q/pr?s=CRN

Does this say it all?

[Ghost Dog]

41. 12:25 - How far before next bounce?

Dow 11,973.10 Down 102.86 (0.85%)
Nasdaq 2,332.77 Down 17.80 (0.76%)
S&P 500 1,368.23 Down 9.72 (0.71%)
10-Yr Bond 4.4810% Down 0.0140
NYSE Volume 1,715,727,000
Nasdaq Volume 1,001,307,000

12:00 pm : After lackluster attempts to recover some of yesterday's bloodletting, stocks are trading near session lows midday as subprime mortgage concerns continue to act as an overhang.

With the market closely eyeing this morning's Q1 report from Lehman Brothers (LEH 69.55 -2.45) to provide some color on the health of the subprime mortgage market, management saying the troubling sector will "continue to face headwinds in the near term" has prompted shareholders to push the stock further into negative territory for the year.

On a positive note, Goldman Sachs (GS 200.50 +1.47) reportedly bankrolling subprime lenders with credit in anticipation of a rebound is helping to offset more aggressive deterioration in the brokerage space and minimizing consolidation in yesterday's worst performing sector, Financials. However, the absence of the latter's leadership again is sorely missed since Financials, today's worst performer (-0.5%), accounts for more than 22% of the total weighting on the S&P 500.

Consumer Discretionary ranks a close second as Specialty Consulting Services remains today's worst performing S&P industry group (-2.7%). H&R Block (HRB 19.51 -0.54) delayed its Q3 regulatory filing because it needs added time to account for "rapidly declining loan values" at its subprime-lending subsidiary. Autos have also been in focus after General Motors (GM 30.07 -0.44) swung to a profit in Q4, but its delayed report checked in well shy of Wall Street expectations. That has given investors a reason to keep selling GM shares following news yesterday that it agreed to pay about $1 bln to make up for subprime-lending losses at its part-owned GMAC unit. DJ30 -40.53 NASDAQ -5.78 SP500 -2.75

[Ghost Dog]

42. 12:31 - Bouncing Now

Dow 11,983.43 Down 92.53 (0.77%)
Nasdaq 2,336.62 Down 13.95 (0.59%)
S&P 500 1,368.27 Down 9.68 (0.70%)
10-Yr Bond 4.4770% Down 0.0180
NYSE Volume 1,797,056,000
Nasdaq Volume 1,045,865,000

[Roland99]

43. Faeries called back early from lunch to PPT that 12k level?

[Ghost Dog]

46. Yup. But, Hell, maybe they're really not working off of unlimited liquidity.

for technical reasons, (even if they melt down more gold...)?

[Roland99]

55. Sure has been a retreat on gold of late, eh? People covering their arses?

[Ghost Dog]

62. Per Gold. It says here:

Gold slides to one-week low, follows equities
http://investing.reuters.co.uk/news/articleinvesting.aspx?type=goldMktRpt&storyID=2007-03-14T154150Z_01_L14335346_RTRIDST_0_MARKETS-PRECIOUS-EUROPE-UPDATE-3.XML&pageNumber=1&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage1

LONDON, March 14 (Reuters) - Gold slid to a one-week low on Wednesday as equity markets tumbled and risk-averse investors sold the precious metal, which has lost its lustre as a haven against economic turmoil.

Spot gold <XAU=> fell to $638.90 an ounce, the lowest since March 6. By 1520 GMT it was at $643.30/644.30 from $645.50/646.50 late in New York on Tuesday. Gold has tumbled around 7 percent since touching a nine-month high of $689 on February 26.

"We turn from oil and currency watching to stock watching. We expect more stop loss triggers and more downside," said Michael Kempinski, vice-president at Commerzbank.

"Gold really needs some fresh buying from the investor side, but as long as they are losing money on stocks, there will be no new money for investment in gold."

Behind the sell-off is a perception that the liquidity created by cheap money, which has fuelled the commodity and stock market bull run for years now, is about to dry up.

...

Also the relationship between gold and equities has become more positive in recent years as investors have become more involved in commodities. So when investors cut their exposure during uncertain times, gold is included.

"The price action in the gold market continues to question the theory that gold is an asset that performs well during periods of risk aversion," JPMorgan said in a research note.

...

Those jitters would normally spark a flight to precious metals, but investors are already holding a lot of gold, which may have to be sold to cover losses on equity markets.

/...

But see also eg.: GOLD - WHERE TO NOW + POLITICAL RISK ASSESSMENT

And also: AND I WILL SHOW YOU FEAR IN A HANDFUL OF FUND MANAGERS

[Roland99]

65. That last line is quite the summary and that chart from that last link...

You'd think the major investors knew something in late 2001. Prescient on US aggression?

[Ghost Dog]

44. 12:54 - Bounce #2 over & down

Dow 11,944.58 Down 131.38 (1.09%)
Nasdaq 2,333.28 Down 17.29 (0.74%)
S&P 500 1,364.14 Down 13.81 (1.00%)
10-Yr Bond 4.4850% Down 0.0100
NYSE Volume 1,993,102,000
Nasdaq Volume 1,152,896,000

12:30 pm : In similar fashion to yesterday's midday downturn, U.S. stocks are taking a bearish cue from a late-day selloff in European bourses which are poised to close at their lows of the day, averaging declines of about 2.5%.

A technical breakdown is adding to the market's recent struggles. The Dow has slipped below the 12,000 level for the first time since November 6, 2006. The S&P 500 and Nasdaq have also been unable to find support, recently slipping through key technical levels of 1369 and 2330, respectively. DJ30 -100.50 NASDAQ -15.81 SP500 -10.50 NASDAQ Dec/Adv/Vol 1928/957/964 mln NYSE Dec/Adv/Vol 2038/1081/808 mln

--> Me, I'd swear I saw European markets, down but steady all day, reacting to the fresh US plunge in the final 30 minutes with plunges of their own...

[Roland99]

45. It's just more of "an overly pessimistic market exaggerated everything"

:sarcasm:

[Ghost Dog]

47. "Move along now. No fundamentals to see here."

;-)

[Ghost Dog]

48. FTSE sinks as Wall Street extends losses

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39155.5358333333-891612346&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

London equities tracked Wall Street sharply lower on Wednesday as growing concerns about the health of the US subprime lending sector harried the financials sector and resurrected fears of a wider slowdown. Financial stocks were the worst hit amid concern that the problems in the subprime lending sector in the US could lead to similar difficulties in the UK. Several of the big high street banks had already reported higher provisions for bad debts including HSBC, down 2.5 per cent to 880p. The day’s biggest faller was HBOS, the mortgage lender, which was down 5.8 per cent to £10.19, although the fall was exacerbated by the stock moving ex-dividend. Of the other banks, Royal Bank of Scotland was 4.5 per cent lower at £19.56 and Barclays lost 4.6 per cent to 673½p. Man Group, the listed hedge fund, fell 4 per cent to 492¾p while Amvescap, the fund manager highly exposed to US markets, was 3.7 per cent lower at 565p and venture capital group 3i was down 5.4 per cent to £10.75 as investors once more felt less inclined to risk. The FTSE 100 closed down 160.5 points, or 2.6 per cent, to 6,000.7 after a fall of 92 points, or 0.8 per cent, for the Dow Jones Industrial Average. The FTSE 250 lost 316.8 points, or 2.8 per cent to 10,944.1.

[Ghost Dog]

49. Swiss SMI down 2.85%

http://www.postfinance.ch/pf/content/en/topics/etrade/news/stockreportchev.html

Swiss shares closed Wednesday's session in negative territory even though Wall Street showed first signs of a rebound in early deals.

The Swiss Market Index closed 251.43 points or 2.85% lower at 8,577.66 with all 25 stocks pointing south. The broader Swiss Performance Index lost 196.05 points or 2.78% to 6,853.21.

Credit Suisse and UBS down on New Century troubles

Credit Suisse plunged 4.37% to CHF 82.00 after New Century Financial, the largest independent US subprime mortgage firm, on Tuesday said it underestimated its debt to Credit Suisse by USD 500 million. New Century's lenders plan to halt financing, pushing the struggling company closer to bankruptcy.

UBS closed 3.85% lower at CHF 67.50 after reports it has been issued a subpoena after issuing a bullish note about New Century Financial. Other financials were also stuck in the red: Baloise dropped 3.39% to CHF 119.70, Swiss Life Holding shed 3.83% to CHF 295.00 and Julius Baer fell 4.37% to CHF 151.10. Zurich Financial Services moved 3.14% lower at CHF 331.50 after the Financial Times on Tuesday reported that the insurance group expects its future China business to be highly dependent on China's domestic enterprises' activities overseas.

Novartis defies the odds

Pharma heavyweight Novartis proved resilient, closing only 1.23% lower at CHF 68.00, while sector peer Roche dipped 2.11% to CHF 208.50 and food group Nestle slipped 2.39% to CHF 459.25.

/..

[Ghost Dog]

51. German shares close sharply down as Wall Street slide continues

http://www.forbes.com/afxnewslimited/feeds/afx/2007/03/14/afx3515861.html

FRANKFURT (AFX) - Shares closed sharply down as Wall Street continued to slide, with the global banking sector hit hard on concerns weakness in the US subprime mortgage lending sector will affect the entire industry, dealers said.

DAX closed 176.29 points or 2.66 pct lower at 6,447.70 after trading between 6,444.70 and 6,567.24.

The MDAX fell 285.89 points or 2.96 pct to 9,371.86, while the TecDAX was 26.88 points or 3.29 pct lower at 789.80.

DAX futures were down 82.50 points or 1.26 pct at 6,467.00.

/..

[Ghost Dog]

52. European stocks close near 3-1/2 month low

http://today.reuters.co.uk/news/articleinvesting.aspx?type=eurMktRpt&storyID=2007-03-14T163959Z_01_L14107354_RTRIDST_0_MARKETS-EUROPE-STOCKS-URGENT.XML

PARIS, March 14 (Reuters) - European shares closed at their lowest level in nearly 3-1/2 months on Wednesday, with banks leading the march down amid worries that a deepening mortgage lending crisis is spreading to the rest of the U.S economy.

A sell-off in mining and energy stocks added to the market's woes, with Anglo American (AAL.L: Quote, Profile , Research) falling in step with metal prices while a dip in oil prices well below $58 a barrel skimmed around 2 percent in Total (TOTF.PA: Quote, Profile , Research) and BP (BP.L: Quote, Profile , Research) stocks.

The FTSEurofirst 300 <.FTEU3> index of top European shares ended unofficially down 2.5 percent at 1,429.22 points, its lowest closing level since Dec. 1, 2007, bringing to 3.7 percent its overall decline since the start of the year.

/.

[alfredo]

53. It's dropped below 12,000 Down 121.61 at 11,954.35 13:26

[Ghost Dog]

57. Yes, I've noticed some 'clocking' inconsistencies...

I wonder at what time the 'curbs' were applied today (it was at 15:04 yesterday, according to Reuters) - and possibly 'glitches', too?

[alfredo]

60. Not sure, but I am amazed at how fast it is losing and gaining

today. It's back up over 12,000 at 13:54.

[Ghost Dog]

54. 13:25 - "Heroic" rebound underway...

Dow 12,041.67 Down 34.29 (0.28%)
Nasdaq 2,354.10 Up 3.53 (0.15%)
S&P 500 1,376.59 Down 1.36 (0.10%)
10-Yr Bond 4.4890% Down 0.0060
NYSE Volume 2,293,830,000
Nasdaq Volume 1,334,273,000

1:00 pm : The bottom is falling out of the market as an overly pessimistic market continues to exaggerate the implications of subprime concerns that we still believe are vastly overblown.

The Dow is now down more than 1% as 26 of 30 components are now posting losses. All 10 economic sectors are now trading lower, led for a second straight day by a sell-off in Financials (-1.4%) and spearheaded by a recent reversal in Technology. Consumer Discretionary, Materials, Telecom are also logging declines of more than 1%. DJ30 -126.73 NASDAQ -17.94 SP500 -13.38 NASDAQ Dec/Adv/Vol 2020/897/1.13 bln NYSE Dec/Adv/Vol 2329/864/984 mln

:eyes:

[Roland99]

56. Holy F-ing Shit!! They regurgitated the exact same phrase!!!

:rofl:

[Ghost Dog]

58. .

:rofl:

[BluePatriot]

59. "Pay no attention to the man behind the curtain"

:rofl:

[loudsue]

63. Ouch! I've sure lost some $$ in the past 2 weeks.

My retirement looks like it may have to wait until, oh, sometime in 2030. I'll be about 80 by then.

:kick:

[burf]

64. MSNBC home page

has Dow up 23? The PPT to the rescue!

[bdamomma]

66. BBC Front Page News

Stocks plunge in global sell-off


http://news.bbc.co.uk/2/hi/business/6451031.stm

[Ghost Dog]

67. 14:45 - Faeries. Fear. Not! (at least in US)

:eyes:

Dow 12,094.07 Up 18.11 (0.15%)
Nasdaq 2,363.42 Up 12.85 (0.55%)
S&P 500 1,382.55 Up 4.60 (0.33%)
10-Yr Bond 4.5200% Up 0.0250
NYSE Volume 2,974,519,000
Nasdaq Volume 1,734,628,000

2:30 pm : The major averages are back to trading in split fashion. While gains on the S&P 500 and Nasdaq are minimal, it is worth noting that both were down nearly 1.0% on average.

The Dow, which was off more than 136 points earlier (-1.1%) briefly turned positive within the last 10 minutes and is now unchanged as the Financials sector is also relatively flat after having been down as much as 1.5% less than two hours ago. DJ30 -3.54 NASDAQ +5.60 SP500 +1.91 NASDAQ Dec/Adv/Vol 1788/1182/1.58 bln NYSE Dec/Adv/Vol 1994/1255/1.40 bln

2:00 pm : The recovery try continues as selling pressure has abated over the course of the past hour. Stability, however, is not a word that has been associated with recent market activity so there is no telling if this effort will persist.

The market is watching the financials for leadership. Right now, they're looking better than they did earlier, but the sector still remains underwater (-0.4%) and is currently down 9.1% from its February high. A pullback of 10% from a high is typically regarded as the definition of an official correction.DJ30 -27.08 NASDAQ -0.57 SP500 -1.77 NASDAQ Dec/Adv/Vol 1690/1254/1.45 bln NYSE Dec/Adv/Vol 2046/1179/1.26 bln

[nitpicker]

68. Housing crash to be cancelled?

http://www.bloomberg.com/apps/news?p...r=realestat e <http://www.bloomberg.com/apps/news?pid=20601206&sid=aq9tV0nxdHF0&refer=realestat e>

Fannie Asked by HUD to Back Subprime Loan Forbearance (Update1)
By James Tyson
March 14 (Bloomberg) -- Housing and Urban Development Secretary Alphonso Jackson is calling on Fannie Mae, Freddie Mac and private banks to support forbearance to U.S. subprime mortgage borrowers who are having trouble making their payments.

``We are asking banks, we are asking others, Fannie Mae and Freddie Mac, to do forbearance,'' HUD Secretary Alphonso Jackson told members of the House Financial Services Committee at a hearing today. ``We don't have the powers to dictate to them what they should do, but we are doing everything in our power.''

More than 24 mortgage lenders have shut down or sold operations since January 2006 amid a surge in late payments from borrowers who had poor or limited credit histories. Investors and lawmakers are concerned that the rise in subprime mortgage delinquencies to a four-year high last quarter will damp consumer spending and derail U.S. economic growth.

House Financial Services Committee Chairman Barney Frank said at the hearing that Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac should use their clout to push banks to offer forbearance to distressed subprime mortgage borrowers.

``We certainly will be asking Fannie Mae and Freddie Mac to the extent that these things are in their portfolios to show forbearance,'' Frank, a Massachusetts Democrat, told Jackson at the start of the hearing in Washington.

Fannie Mae and Freddie Mac own or guarantee 40 percent of the $10.5 trillion U.S. residential mortgage market. The companies mostly hold mortgage-backed securities from private banks in their portfolios, with only a small portion being the actual loans themselves. Fannie Mae has about 2 percent of its holdings in securities and loans tied to subprime mortgages.

Ample Cooperation
Fannie Mae and Freddie Mac are helping HUD to determine the most distressed loans and ``work with the homeowners'' to help avoid default, Jackson said in an interview during a break in the hearing.

The two government-chartered companies ``have worked with us well,'' Jackson said. ``If we can get that kind of cooperation from the banks that we've gotten from Fannie Mae and Freddie Mac, we'll be fine.''

Congress created Fannie Mae and Freddie Mac to increase financing for low-income homebuyers. Subprime mortgages are home loans made to borrowers with poor or limited credit histories or high debt burdens.

U.S. Senate Banking Committee Chairman Christopher Dodd, a Democrat from Connecticut, reiterated today that he plans to propose federal support for subprime mortgage borrowers in danger of losing their homes.

``No one is talking about a bailout,'' Dodd said in an interview, while not specifying what form aid would take.
Senate Majority Leader Harry Reid said today in an interview that Democratic leaders, while not committing to any legislation, have asked Dodd to propose ways to help distressed mortgage borrowers.

``It's excellent that Senator Dodd is on top of this and I'll look to him from some direction and leadership on it,'' Reid said.

To contact the reporter on this story: James Tyson in Washington at [e-mail] <mailto:[e-mail]>

[Ghost Dog]

70. "No one is talking about a bailout,'' Dodd said in an interview, while not specifying what form aid

would take...

Keep your eyes on the smoke & mirrors there, folks.

[Ghost Dog]

69. 15:37 - A Miraculous Performance (though drooping a bit, now?)

Dow 12,108.65 Up 32.69 (0.27%)
Nasdaq 2,366.00 Up 15.43 (0.66%)
S&P 500 1,384.65 Up 6.70 (0.49%)
10-Yr Bond 4.5220% Up 0.0270
NYSE Volume 3,417,326,000
Nasdaq Volume 2,018,554,000

(Check small print)

3:30 pm : Onward and upward is now today's mantra as sellers continue to run for cover going into the close. Just over two hours ago, the VIX (CBOE Volatility Index) was up more than 17%, suggesting investors were still actively buying put options in anticipation of further deterioration in equities.

However, the index has since slipped into negative territory, further underscoring a change in sentiment that is also reflected in market internals now holding a positive bias for the first time since market opened. Advancers outpace decliners on the NYSE a 9-to-7 margin while advancing issues on the Nasdaq have finally edged past declining issues and now hold a slim 15-to-14 advantage. DJ30 +64.69 NASDAQ +21.01 SP500 +10.14 NASDAQ Dec/Adv/Vol 1414/1583/1.85 bln NYSE Dec/Adv/Vol 1446/1829/1.64 bln

3:00 pm : Finally, investors get the leadership they've been waiting for all day. The influential Financials sector is now in positive territory while a turnaround in Health Care is also providing a notable floor of support behind the renewed wave of buying interest.

As evidenced by the Nasdaq turning in the best performance among the majors, Technology is providing the bulk of support. A 2.1% surge in Microsoft (MSFT 27.28 +0.56), which is the Dow's best performer on news Lenovo Group will make Microsoft's search technology the main portal on its PCs, is a big reason why the three major indices are at session highs. Systems Software ranks fourth among today's best performing S&P industry groups (+1.3%). DJ30 +26.67 NASDAQ +13.88 SP500 +4.88 NASDAQ Dec/Adv/Vol 1500/1477/1.74 bln NYSE Dec/Adv/Vol 1470/1788/1.55 bln

[Eugene]

71. Judge Drops Charges Against HP's Dunn

Associated Press
Judge Drops Charges Against HP's Dunn
By JORDAN ROBERTSON 03.14.07, 2:55 PM ET

A judge dropped the charges Wednesday against former Hewlett-Packard Co.
board Chairwoman Patricia Dunn, who was accused of fraud in the company's
boardroom spying scandal.

Three other defendants in the case will also avoid jail time after their lawyers
entered no contest pleas to misdemeanor charges of fraudulent wire
communications in Santa Clara Superior Court.

The charges against former HP ethics chief Kevin Hunsaker, and private
investigators Ronald DeLia and Matthew DePante will also be dropped in
September after they complete 96 hours of community service and make
restitution, the judge said.

-snip-

http://www.forbes.com/feeds/ap/2007/03/14/ap3516404.html

[Roland99]

72. Closing numbers: PPT to the rescue! 192pt. turnaround from day's low

DJIA 12,133.40 +57.44 +0.48%
Nasdaq 2,371.74 +21.17 +0.90%
S&P 500 1,387.17 +9.22 +0.67%
Dow Util 476.60 +2.73 +0.58%
NYSE 8,958.60 +31.72 +0.36%
AMEX 2,063.37 -1.62 -0.08%
Russell 2000 775.68 +6.56 +0.85%
Semcond 472.89 +1.56 +0.33%
Gold future 642.50 -6.90 -1.06%
30-Year Bond 4.69% +0.04 +0.77%
10-Year Bond 4.52% +0.03 +0.60%


1st time since Nov. 2006 that the Dow dropped below 12,000 during trading.

[Ghost Dog]

73. The Amazing Closing Spiel

4:20 pm : After the Dow posted its second-biggest drop in nearly four years on Tuesday, a growing sense that yesterday's broad-based downturn was an overreaction eventually prompted some afternoon short covering and helped investors get over an underlying pessimistic hump Wednesday.

Technical breakdowns on all major averages, as evidenced by the Dow slipping below the 12,000 mark intraday for the first time since November 6, 2006, exacerbated intraday declines before things finally turned around.

Today's whipsaw trading activity was also attributed to this Friday's quarterly options expiration. Also known as "quadruple witching," the simultaneous expiration of index options, stock options, index futures, and single stock futures typically adds to market volatility... and Wednesday was no exception.

With concerns still looming about a possible liquidity crunch tied to an unwinding of the carry trade, further deterioration in the yen following a narrower than expected current account deficit helped to alleviate such worries. However, the bigger issue on investors' minds again was whether potential defaults by subprime borrowers will spill over into the broader economy -- a concern we still believe is overblown.

With the market closely eyeing today's Q1 report from Lehman Brothers (LEH 71.59 -0.41) to provide some clarity on the health of the troubling subprime mortgage market, management following up its record report by saying the sector will "continue to face headwinds in the near term" pushed the stock down as much as 5.5%.

That exacerbated the mortgage delinquency news that rattled stocks Tuesday and left investors questioning whether the Financial sector's earnings potential will play out as expected.

After tumbling 3.2% yesterday, Financials was down as much as 1.5% today, removing some notable leadership in the process. It wasn't until the sector turned the corner, due in part to Goldman Sachs (GS 200.03 +1.00) reportedly bankrolling subprime lenders with credit in anticipation of a rebound, that the rest of the market took notice and garnered enough confidence to suggest that stocks may have finally bottomed.

Couple the Financial sector's recovery with widespread bargain-hunting efforts throughout the next most heavily-weighted sector - Technology - and stocks turned in a respectable performance.

Dow component Microsoft (MSFT 27.40 +0.68), surging 2.5% on news Lenovo Group will make Microsoft's search technology the main portal on its PCs, was a big reason why all three major indices closed near session highs. All 10 economic sectors were posting losses at one point but all three finished with gains. DJ30 +57.44 NASDAQ +21.17 SP500 +9.22 NASDAQ Dec/Adv/Vol 1405/1619/2.15 bln NYSE Dec/Adv/Vol 1394/1904/1.93 bln

[Roland99]

74. "turned the corner"?? Woo hooo!! BTW, is that like a Glockenspiel?

:-)

[Ghost Dog]

75. Or a cat?