STOCK MARKET WATCH, Thursday December 6

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday December 6, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 412 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2515 DAYS
WHERE'S OSAMA BIN-LADEN? 2237 DAYS
DAYS SINCE ENRON COLLAPSE = 2198
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
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 December 5, 2007

Dow... 13,444.96 +196.23 (+1.48%)
Nasdaq... 2,666.36 +46.53 (+1.78%)
S&P 500... 1,485.01 +22.22 (+1.52%)
Gold future... 803.70 -3.90 (-0.49%)
30-Year Bond 4.39% +0.05 (+1.04%)
10-Yr Bond... 3.91% +0.02 (+0.57%)






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

---

Read more: du

[ozymandius]

1. Market WrapUp: "Survey Says: Watch Out Below"

BY CHRIS PUPLAVA
No matter where you look, whether it’s business sentiment, consumer sentiment, or even foreign sentiment, expectations and confidence are falling by the wayside and sharply. Despite the strong deterioration in confidence, many financial pundits and economists remain optimistic in their future growth projections for the U.S. economy, and Fed Chairman Bernanke is no different.

However, the messages sent by those who exercise their vote with their wallets and balance sheets are far less optimistic. This is of great concern because a widespread loss of confidence typically brings about a recession. This arises because as businesses become pessimistic on the future economic outlook, they reduce spending and hiring and cut back on their appetite for debt. Moreover, as confidence falls credit markets become more risk averse and credit begins to dry up, driving up borrowing costs, with the final blow being consumers curtailing spending.

The loss in business confidence really took a turn for the worse after the start of the recent credit crisis. For example, the Duke/CFO Magazine Global Business Outlook Survey’s results for the third quarter showed the nation's CFOs have turned quite sour on the economy as well as their own businesses.

-cut-

The CFO survey above highlights the widespread pessimism coming from those in charge of company pocketbooks. They are concerned about a weak consumer, rising labor costs, and the fallout from the credit markets, all of which will affect their business decisions going forward. One thing to note, the CFOs have a great pulse on the economy as they correctly called the bottom in economic activity where more than 80% were optimistic about the economy late in 2003, right when the stock markets bottomed and the economy picked up steam. What then does it say when their confidence levels are below levels seen in the last recession, and at all-time lows? Certainly not encouraging!

-cut-

A little reality check is needed. For one, the ADP employment number, as well as the jobs report from the Labor Department (released Friday) are subject to major revisions. Anyone remember the August employment data from the Labor Department that showed a LOSS of more than 4,000 jobs that turned into a GAIN of 93,000 jobs when later revised? The most important thing to remember is the trend to remove the market's noise, and no leading employment indicator has bottomed yet and so one should not turn optimistic on the job front. Temporary employment, which leads nonfarm employment, has not officially bottomed yet, and is in fact in recession territory (below orange horizontal line).

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

[Buttercup McToots]

16. Washington Post-Credit Crunch-"you ain't seen nothing, yet"

Washington Post-Credit Crunch-"you ain't seen nothing, yet"


By Steven Pearlstein
Wednesday, December 5, 2007

It was Charles Mackay, the 19th-century Scottish journalist, who observed that men go mad in herds but only come to their senses one by one.

We are only at the beginning of the financial world coming to its senses after the bursting of the biggest credit bubble the world has seen. Everyone seems to acknowledge now that there will be lots of mortgage foreclosures and that house prices will fall nationally for the first time since the Great Depression. Some lenders and hedge funds have failed, while some banks have taken painful write-offs and fired executives. There's even a growing recognition that a recession is over the horizon.
But let me assure you, you ain't seen nothing, yet.

What's important to understand is that, contrary to what you heard from President Bush yesterday, this isn't just a mortgage or housing crisis. The financial giants that originated, packaged, rated and insured all those subprime mortgages were the same ones, run by the same executives, with the same fee incentives, using the same financial technologies and risk-management systems, who originated, packaged, rated and insured home-equity loans, commercial real estate loans, credit card loans and loans to finance corporate buyouts.

It is highly unlikely that these organizations did a significantly better job with those other lines of business than they did with mortgages. But the extent of those misjudgments will be revealed only once the economy has slowed, as it surely will.


At the center of this still-unfolding disaster is the Collateralized Debt Obligation, or CDO. CDOs are not new -- they were at the center of a boom and bust in manufacturing housing loans in the early 2000s. But in the past several years, the CDO market has exploded, fueling not only a mortgage boom but expansion of all manner of credit. By one estimate, the face value of outstanding CDOs is nearly $2 trillion.

But let's begin with the mortgage-backed CDO.

By now, almost everyone knows that most mortgages are no longer held by banks until they are paid off: They are packaged with other mortgages and sold to investors much like a bond.

In the simple version, each investor owned a small percentage of the entire package and got the same yield as all the other investors. Then someone figured out that you could do a bigger business by selling them off in tranches corresponding to different levels of credit risk. Under this arrangement, if any of the mortgages in the pool defaulted, the riskiest tranche would absorb all the losses until its entire investment was wiped out, followed by the next riskiest and the next.

With these tranches, mortgage debt could be divided among classes of investors. The riskiest tranches -- those with the lowest credit ratings -- were sold to hedge funds and junk bond funds whose investors wanted the higher yields that went with the higher risk. The safest ones, offering lower yields and Treasury-like AAA ratings, were snapped up by risk-averse pension funds and money market funds. The least sought-after tranches were those in the middle, the "mezzanine" tranches, which offered middling yields for supposedly moderate risks.

Stick with me now, because this is where it gets interesting. For it is at this point that the banks got the bright idea of buying up a bunch of mezzanine tranches from various pools. Then, using fancy computer models, they convinced themselves and the rating agencies that by repeating the same "tranching" process, they could use these mezzanine-rated assets to create a new set of securities -- some of them junk, some mezzanine, but the bulk of them with the AAA ratings more investors desired.

It was a marvelous piece of financial alchemy, one that made Wall Street banks and the ratings agencies billions of dollars in fees. And because so much borrowed money was used -- in buying the original mortgages, buying the tranches for the CDOs and then in buying the tranches of the CDOs -- the whole thing was so highly leveraged that the returns, at least on paper, were very attractive. No wonder they were snatched up by British hedge funds, German savings banks, oil-rich Norwegian villages and Florida pension funds.
What we know now, of course, is that the investment banks and ratings agencies underestimated the risk that mortgage defaults would rise so dramatically that even AAA investments could lose their value.

One analysis, by Eidesis Capital, a fund specializing in CDOs, estimates that, of the CDOs issued during the peak years of 2006 and 2007, investors in all but the AAA tranches will lose all their money, and even those will suffer losses of 6 to 31 percent.
And looking across the sector, J.P. Morgan's CDO analysts estimate that there will be at least $300 billion in eventual credit losses, the bulk of which is still hidden from public view. That includes at least $30 billion in additional write-downs at major banks and investment houses, and much more at hedge funds that, for the most part, remain in a state of denial.

As part of the unwinding process, the rating agencies are in the midst of a massive and embarrassing downgrading process that will force many banks, pension funds and money market funds to sell their CDO holdings into a market so bereft of buyers that, in one recent transaction, a desperate E-Trade was able to get only 27 cents on the dollar for its highly rated portfolio.

Meanwhile, banks that are forced to hold on to their CDO assets will be required to set aside much more of their own capital as a financial cushion. That will sharply reduce the money they have available for making new loans.


And it doesn't stop there. CDO losses now threaten the AAA ratings of a number of insurance companies that bought CDO paper or insured against CDO losses. And because some of those insurers also have provided insurance to investors in tax-exempt bonds, states and municipalities have decided to pull back on new bond offerings because investors have become skittish.

If all this sounds like a financial house of cards, that's because it is. And it is about to come crashing down, with serious consequences not only for banks and investors but for the economy as a whole.

That's not just my opinion. It's why banks are husbanding their cash and why the outstanding stock of bank loans and commercial paper is shrinking dramatically.

It is why Treasury officials are working overtime on schemes to stem the tide of mortgage foreclosures and provide a new vehicle to buy up CDO assets.

It's why state and federal budget officials are anticipating sharp decreases in tax revenue next year.

And it is why the Federal Reserve is now willing to toss aside concerns about inflation, the dollar and bailing out Wall Street, and move aggressively to cut interest rates and pump additional funds directly into the banking system.

This may not be 1929. But it's a good bet that it's way more serious than the junk bond crisis of 1987, the S&L crisis of 1990 or the bursting of the tech bubble in 2001

[Demeter]

31. I'm Speechless

Of all the hare-brained schemes this has got to take the cake. It's a Ponzi scheme where the only ones to make money are the fee-collectors. And everybody fell for it. PT BArnum was right.

[ozymandius]

2. Today's Report

8:30 AM Initial Claims 12/01
Briefing Forecast 335K
Market Expects 335K
Prior 352K

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

[Nimrod2005]

5. Wasn't this 70K just 2 days ago?

Good morning

[UpInArms]

12. Initial claims @ 338,000

01. U.S. continuing jobless claims fall 59,000 to 2.599 mln
8:30 AM ET, Dec 06, 2007 - 1 minute ago

02. U.S. 4-wk. avg. initial jobless claims up 4,750 to 340,250
8:30 AM ET, Dec 06, 2007 - 1 minute ago

03. U.S. weekly initial jobless claims fall 15,000 to 338,000
8:30 AM ET, Dec 06, 2007 - 1 minute ago

[ozymandius]

3. Oil drops as US fuel supplies rise

SINGAPORE - Oil prices dropped below $87 a barrel Thursday to their lowest levels in six weeks after an overnight report showed an increase in U.S. supplies of gasoline and distillates, as well as of crude at a key Midwestern terminal.

Traders shrugged off OPEC's decision to keep production levels steady and a big drop in overall U.S. crude stockpiles.

Organization of Petroleum Exporting Countries ministers said Wednesday in Abu Dhabi, United Arab Emirates, the cartel would leave output unchanged "for the time being," because the world was "well supplied," with crude reserves at comfortable levels.

Light, sweet crude for January delivery fell 92 cents to $86.57 a barrel in Asian electronic trading on the New York Mercantile Exchange by late afternoon in Singapore.

-cut-

Some of the decline in crude supplies can be explained by oil imports, which fell last week by an average of 980,000 barrels a day to 9.4 million barrels a day. Gasoline imports rose last week by 334,000 barrels a day to an average of 1.2 million barrels a day.

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

[Demeter]

6. I'll Say It Did! $2.85 yesterday

vs $3.15 last week

[radfringe]

9. went from a high of 3.19

to 3.09 in my neck of the woods...

[ozymandius]

4. Shallow first-half recession seen for U.S. economy

SAN FRANCISCO (Reuters) - A recession looms for the U.S. economy in the first half of 2008 due to faltering consumer spending and nonresidential construction, which have so far helped offset the housing slump, a report released on Wednesday said.

"Some of the fundamentals that helped prop up the economy in 2007 are beginning to look shaky," said the forecast report from Chapman University's A. Gary Anderson Center for Economic Research in Orange, California.

The Anderson Center anticipates real gross domestic product will shrink by 1.0 percent in the first quarter and by 1.9 percent in the second quarter, said Esmael Adibi, the center's director.

The U.S. economy will recover in the second half, but its growth will be slow and full-year growth will only be 0.9 percent, said Adibi, adding that nonresidential construction will no longer offset the home-building downturn.

Total private construction spending will shrink next year by $125 billion, compared with an expected $91 billion drop this year, Adibi told Reuters in a telephone interview.

-cut-

U.S. exports will grow rapidly thanks to the weak dollar and demand from emerging markets, but that will not make up for the ripple effect of shrinking construction and consumer spending, Adibi said.

http://news.yahoo.com/s/nm/20071205/bs_nm/usa_economy_recession_dc

[Demeter]

8. Economists Need to Review the Death Spiral

Or stop believing in magic.

[DemReadingDU]

15. NFP: Birth/Death Adjustments as related to creation of jobs

NFP indicates Non-farm Payrolls (?)

from this article...
12/6/07 NFP: Birth/Death Adjustments
http://bigpicture.typepad.com/comments/2007/12/more-on-birthde.html


One of the things we have harped on for quite a long time here at The Big Picture is the flawed BLS Birth Death Model (BDM).

Since 2003, the B/D adjustment has been part and parcel to BLS' Current Employment Statistics (CES) program, the official measure of US employment.

In brief, the Birth Death adjustment imagines (hypothesizes) how many jobs were created by companies too new and/or too small to participate or be found by CES. The model attempts to create what is perceived as a BLS error at the start of any recovery, when many new jobs are created but missed by BLS.

In October 2007, the BLS data on job creation has ballooned up to 80% imagined, and a mere 20% measured. That is not a formula for accuracy or precision.

several more charts included at the link above

[feminazi]

33. Wow! I didn't realize the percentage of hypothesized jobs was that high.

The so called pundits celebrate every puny increase in employment. They must know the data is skewed like that. So either they're willfully ignorant or lying.

[Demeter]

7. House prices seen falling 30 pct By Julie Haviv / Reuters / Moody's

http://news.yahoo.com/s/nm/20071206/bs_nm/usa_economy_housing_dc_2



NEW YORK (Reuters) - Housing markets from Punta Gorda, Florida, to Stockton, California, will crash and suffer price drops of more than 30 percent before the housing crisis is over, a report from Moody's Economy.com said on Thursday. On a national level, the housing market recession will continue through early 2009, said the report, co-authored by Mark Zandi, chief economist, and Celia Chen, director of housing economics...While activity will stabilize in 2009, it will not be until 2010 before a measurable improvement in sales, construction and pricing will emerge, the report said.

House prices are forecast to fall 13 percent from their peak through early 2009. After accounting for incentives home sellers are offering buyers, effective declines peak-to-trough will total well over 15 percent, the report said.

Punta Gorda, Florida, and Stockton, California, are the hardest hit markets in the U.S., with price declines from peak-to-trough forecast at 35.3 percent and 31.6 percent, respectively...Home sales, however, should hit a bottom in early 2008, which will mark a 40 percent drop from peak-to-trough.

"The housing market's most fundamental problem is it is awash in unsold inventory," the report said.

In addition, the housing downturn will take a large toll on the rest of the economy. During the height of the boom in 2004-05, housing contributed nearly a percentage point to annual real gross domestic product, or GDP, growth.

In the current downturn, housing will subtract more than one percentage point from U.S. economic growth this year, and a percentage point and a half in 2008, with the effect on growth seen most pronounced next spring and early summer.

THAT'S FUNNY--ANYBODY SEE ANYTHING TALKING ABOUT UNEMPLOYMENT OR BANKRUPTCY?

[UpInArms]

10. dollar watch

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

Last trade 76.694 Change +0.263 (+0.34%)

US Dollar Strengthens, but Some Traders Think the ADP Number is Fishy

http://www.dailyfx.com/story/bio1/US_Dollar_Strengthens__but_Some_1196894940930.html

Going into Friday’s non-farm payrolls report, the financial market had resigned itself to softer job growth. Today that sentiment was thrown out the window after the shockingly strong ADP employment report. According to the payroll provider, US companies added 189k jobs in the month of November, which was three times greater than the market’s forecast. This number is fishy because it goes against the signals given by nearly all of the other non-farm payrolls leading indicators, but the number is so strong that it cannot be dismissed. Currency traders seem to believe that this number means a lot and perhaps it does, but the price action in bonds and Fed fund futures suggests otherwise. Bond yields are only up marginally and the chance for a 50bp rate cut is still close to fifty-fifty. If the market believed that the strong ADP number translates into a strong non-farm payrolls release, the odds for a half point cut would be back where it was a week ago which is 6 percent instead of 42 percent. Granted private sector payroll growth of 189k does point to non-farm payroll growth in excess of 200k. We think that this forecast is a bit lofty because that would call for the strongest payroll growth in over a year. We do believe that payrolls will be much stronger than the market’s 80k forecast, but probably closer to 150k than 200k. Productivity and factory orders were also better than expected, but service sector growth fell short of expectations. The employment component of the ISM survey slipped to 50.8, which puts it right around the expansionary and contractionary level. Part of the reason why the dollar is strong today is also the hope that Treasury Secretary Paulson will save struggling homeowners from foreclosure by announcing an interest rate freeze on subprime mortgages tomorrow. If this manages to work, we could have some respite for the US economy.

...more...

Dollar - Will The BoE and ECB Stop Its Rally?

http://www.dailyfx.com/story/bio2/Dollar___Will_The_BoE_1196937586750.html

Central bank announcement night in FX and as might be expected trading is cautious ahead of the key monetary events later in the day. Both the BoE and the ECB will set their interest rate policy at 12GMT and 12:45GMT respectively. The currency markets forecast no change out of the ECB but nearly half of analysts expect the BoE to lower rates by 25bp to 5.5%.

UK data has been woeful of late with Retail Sales, consumer sentiment and housing surveys all missing the mark. But while the economic news from British Isles has certainly shown a slowdown in aggregate demand it has not conclusively demonstrated risk of possible recession. PMI Manufacturing for example has remained surprisingly robust and today’s Industrial Production and Manufacturing Production data both exceeded forecasts printing at 0.4% vs. 0.2% and 0.3% vs. 0.2% respectively.

Pound bears however, argue that UK economic woes are not centered in industry, but rather in services. As the center of global capital finance, UK is perhaps more vulnerable than any other G-10 country to the credit crunch affecting the financial sector. As such, pound shorts state that BoE must lower rates in order to ease the credit conditions and avoid further stress to the system. Yet if the BoE chooses to remain neutral keeping rates at 5.75% for the time being, cable could see a strong snap back rally. The unit has been sold down heavily on anticipation of a rate cut and if none is forthcoming the late arriving shorts may be forced to cover.

Meanwhile the EURUSD continued to weaken against the greenback after yesterday’s very strong ADP reading which suggested that the NFP will print well above 100K. But the ECB press conference is likely to drive trade today. Despite the fact that price pressures remain elevated in the 13 member region, most traders expect the ECB to remain stationary well into Q1 of 2008. However, the focus this morning will be squarely on ECB President Jean Claude Trichet. If Trichet hints at a possible hike in January the EURUSD could reverse its losses as quickly as it sustained them.

...more...

[Ghost Dog]

18. ECB rates remain 4.0%; BoE cuts to 5.5%

ECB leaves rates on hold amid uncertain economic outlook

FRANKFURT (AFP) - The European Central Bank (ECB) left its key interest rate on hold at 4.0 percent Thursday, treading a cautious line in face of the twin risks of rising inflation and slower growth, analysts said.

Earlier in London however, the Bank of England cut its main interest rate by a quarter-point to 5.50 percent, highlighting tighter commercial credit conditions for households and companies that it felt posed a risk to growth.

Analysts had widely expected the ECB to hold its main lending rate steady for the eurozone, a region of some 320 million people that represents around 15 percent of global gross domestic product.

Given a recent surge in inflation, the central bank's main concern, it would have been hard to justify cutting interest rates despite growth that has been undermined by a global banking crisis, tighter commercial bank credit and the dollar's slide against the euro.

/... http://news.yahoo.com/s/afp/20071206/ts_afp/eueurozoneecbbankrateforexmoney_071206134345

Bank of England cuts interest rates for first time in two years

LONDON (AFP) - The Bank of England cut its key interest rate by a quarter-point to 5.50 percent on Thursday, the first reduction in more than two years, and warned of slowing growth due to world financial turmoil.

The decision, after which the European Central Bank froze eurozone borrowing costs at 4.0 percent, came as world finance chiefs were grappling with the risk of higher inflation and the economic impact of the global credit crunch.

"Although output in the United Kingdom has expanded at a brisk pace for the past two years, there are now signs that growth has begun to slow," the BoE said in a statement announcing the news.

"Conditions in financial markets have deteriorated and a tightening in the supply of credit to households and businesses is in train, posing downside risks to the outlook for both output and inflation further ahead."

/... http://news.yahoo.com/s/afp/20071206/wl_uk_afp/britaineconomybankrateforexmoney_071206132622;_ylt=AgNxPVsejZaXxeuWFCXVAW6mOrgF

[UpInArms]

11. Toll Brothers (luxury home builder) drops to 4th-quarter loss

http://news.yahoo.com/s/ap/20071206/ap_on_bi_ge/earns_toll_brothers

HORSHAM, Pa. - Luxury homebuilder Toll Brothers Inc. said Thursday it fell to a fiscal fourth-quarter loss — its first loss in more than 20 years — as the housing downturn continued to weigh on results.

<snip>

Analysts polled by Thomson Financial had expected a loss of 77 cents per share. Estimates typically exclude one-time charges.

Quarterly revenue slipped 35 percent to $1.17 billion from $1.81 billion in the previous year, meeting Wall Street's expectations.

Fourth-quarter net signed contracts sagged to $365.3 million from $706.3 million. Contracts after cancellations dropped 35 percent to 656 units from 1,010 units.

"By many measures, fiscal 2007 was the most challenging of the forty years that Toll Brothers has been in business," said Robert I. Toll, chairman and chief executive. "1974 was perhaps rougher, but the difficult times only lasted one year. It's not a matter of if, but a matter of when, this oversupply is absorbed. Then we shall return to better times. I believe those who wanted to buy but didn't will kick themselves for their reticence, but the biggest hurdle for our clients right now is their concern about their ability to sell their old homes."

...more...

[UpInArms]

13. Retailers post sluggish November sales

http://news.yahoo.com/s/ap/20071206/ap_on_bi_ge/retail_sales?_ylt=AsRaS6Wv0NE_weSrdAeyjxRv24cA

NEW YORK - The holiday shopping season got off to an uncertain start despite a big Thanksgiving weekend as consumers took advantage of big discounts and then pulled back, leaving retailers with sluggish sales results for November.

As retailers reported their sales results Thursday morning, Costco Wholesale Corp. proved to be a big winner, but plenty of stores including Limited Brands Inc. and teen retailer Wet Seal Inc. had disappointing results. Wal-Mart Stores Inc. beat expectations.

"It's still early, but it looks like that while Black Friday was strong, the follow-through the following week doesn't appear strong," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "Consumers are still facing the same old economic headwinds."

According to a tally by Thomson Financial, only four merchants beat sales estimates, while 15 missed expectations. The tally is based on same-store sales or sales at stores opened at least a year. Same-store sales are a key indicator of a retailer's health.

...more...

[Roland99]

14. We're about 40% of what we had last year on Angel Tree donations.

We take up a collection here at work instead of giving each other gag gifts and it spread to the whole company. Raised almost $1200 last year. Only at $400 right now.

[AnneD]

17. Morning Marketeers......

:donut: and lurkers. I am going to start rewarding good Economists. You have probably chocked on your donut at this point. That 's ok.....catch your breathe. Have a sip of coffee. I know what your thinking, a good Economist is a mythical beast, like the unicorn or a dragon. NO, no my friends. I actually saw one. He was on the CBS early morning show with Meg Oliver. His name is Jack Howe and he writes for Money magazine. He was being interviewed by Meg to get the take on this 'foreclosure' package that Bush was proposing. She asked him how many home owners he thought this proposal would help. He paused a minute and said 'Not very many'. After I fell out of the bed and pulled myself up off the floor-I turned up the volume. I was not believing my ears.
He then explained that this would for stall the inevitable. He also did a quick explanation for the housing bubble STARTING AT THE DOT.COM crash. It was a clean precise explanation that had no mumbo jumbo. He did the same thing with the sub prime mess. She then asked about the proposed rate cut he said (and this is priceless)'The purpose of the FED is to protect the economy-not assets. I hope they don't cut the rates.' Meg seemed a tad surprised. I don't know if he will be invited back but :wow:

So, Jack Howe, I nominate you for 'The Straight Arrow Award'. Your aim was true and you destroyed an economic myth with stunning accuracy and deadly logic.

:applause::applause::applause:

Happy hunting and watch out for the bears

[DemReadingDU]

20. Is this the video?

Solving The Mortgage Meltdown
As more homeowners face foreclosure, many people are wondering how they will make ends meet. Jack Hough, author and Columnist for SmartMoney.com, breaks down the logistics

http://www.cbsnews.com/sections/i_video/main500251.shtml?id=3582144n


edit to add: I found the video at this article, under the videos
http://www.cbsnews.com/stories/2007/12/06/earlyshow/contributors/raymartin/main3582864.shtml

[AnneD]

28. Thank you thank you...

That is the interview. I miss the first part so I misspelled the name and got half of the magazine name. Hey early in the am with no coffee:blush:
Jack Hough....I salute you.

[DemReadingDU]

29. Yeh, Jack Hough was great

Thanks for letting us know about this gem

[Hugin]

21. Good Morning AnneD... (and congrats to Jack Hough on his award)

:hangover:

After hearing about the Implosion Delay Plan (IDP) yesterday afternoon and after being severely flamed for speaking
my mind to the Hillerista and Bushenite Supply Sider apologists on the topic here at DU... (I had no idea there were so
many) It dawned on me the real reason for the delay... It's to give the FRICKEN BANKS time to GET THEIR FRIGGING PAPERS
IN ORDER so they CAN FORECLOSE. Anybody remember the judge's ruling the other day? The one where he ruled the banks
couldn't foreclose because they didn't have the note? They didn't even know where the note was. Well, it looks like
somebody is looking out for those poor corporations.

Way to stick up for the little guys. :eyes:

Anyway, I went home and pushed some numbers around and the best I can come up with it'll take every cent of the
US's GDP every year for around 3,000 years to pay this off... If we started today... Depending on the breaks.

We're gonna get awful hungry in 3,000 years.

Have fun.... and would the last one out of the former democracy please shut off the lights.

[AnneD]

25. OMG...Prag!!!!

I think you hit upon the real reasoning behind this sudden "compassion" for the everyday folk. In the rush for this new deal-they CAN get the paperwork they need.

You won't be flamed on this thread-I believe you are on to something.

One of the thing Jack Howe was talking about was that if these folks couldn't stand an adjustment of 3-4%, they couldn't afford the house. He went on to say this program just forestalls the inevitable. I really liked his take on what the misson of the FED really was. Now, if that doesn't add clarity to the decision making I don't know what does.

The FED's lower the rate, dropping the dollar and kills the average citizen on the 'unmeasured inflation' while helping investors on Wall Street. The average citizen in an ARM gets so squeezed with just daily cost increases that he is desperate.....in walks the 'white knight' mortgage broker with a 'generous' offer to freeze the ARM, the banker has the new PAPERWORK with the borrowers signature. The banker gets it occupied for 5 years (collecting money), the housing market reabsorbes a bit and then at 5 years the loans 'reset'. Joe 6 pack still can't afford it. I think it will take at least 2-3 years for the prices to bottom out and Joe 6 pack has watched the value of his house plummet but the loan will still be high or higher. And this time banks CAN foreclose. You lose the house and 5 more years of income.

Damn, they will screw you every which way.

[Hugin]

27. Yep, it's a dirty business...

I'm thinking it's time to take a cue from Robert Redford and check out of this Mutual Admiration Society.
(If I was ever really any part of it.)

I read an article the other day where he said he's through with the activist scene after he attended a dinner
where he witnessed all of the back patting and glad handing among all of the so-called political rivals.

Different face, same crap was his conclusion.

*sigh* seems like he was correct.

[zabet]

22. Whoa!

A good economist, a rare
find indeed. Presumed extinct
in the last, oh 7 years or so.
Most of the economists you see
are just 'mathemagicians'.

[AnneD]

26. LOL...

"mathemagicians". My new word for the day.:spray:

[Buttercup McToots]

19. Francisco's money speech by Ayn Rand

Quote:
"Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion--when you see that in order to produce, you need to obtain permission from men who produce nothing--when you see that money is flowing to those who deal, not in goods, but in favors--when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you--when you see corruption being rewarded and honesty becoming a self-sacrifice--you may know that your society is doomed. Money is so noble a medium that is does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.

"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, 'Account overdrawn.'

"When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, 'Who is destroying the world? You are.

"You stand in the midst of the greatest achievements of the greatest productive civilization and you wonder why it's crumbling around you, while you're damning its life-blood--money. You look upon money as the savages did before you, and you wonder why the jungle is creeping back to the edge of your cities. Throughout men's history, money was always seized by looters of one brand or another, whose names changed, but whose method remained the same: to seize wealth by force and to keep the producers bound, demeaned, defamed, deprived of honor. That phrase about the evil of money, which you mouth with such righteous recklessness, comes from a time when wealth was produced by the labor of slaves--slaves who repeated the motions once discovered by somebody's mind and left unimproved for centuries. So long as production was ruled by force, and wealth was obtained by conquest, there was little to conquer, Yet through all the centuries of stagnation and starvation, men exalted the looters, as aristocrats of the sword, as aristocrats of birth, as aristocrats of the bureau, and despised the producers, as slaves, as traders, as shopkeepers--as industrialists.


http://www.capmag.com/article.asp?ID=1826

[Trailrider1951]

23. Hey, thanks for reminding me of my long gone youth

THAT is the reason I LAUGH at today's neocons. They think that they are John Galt, when in reality they are really Wesley Mouch. That goes double for dubya.

[TrogL]

24. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



30-day vs. Euro, Yen, UK Pound and Swiss Franc




Currency Comparison: http://members.shaw.ca/trogl/looniewatch.html

Detailed analysis: http://quotes.ino.com/exchanges/?r=CME_CD

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.Y%24%24&v=s&w=5&t=l&a=1

Historical values http://www.x-rates.com/d/USD/CAD/data30.html

2007-11-05 Monday, November 5 1.07101 USD
2007-11-06 Tuesday, November 6 1.0819 USD
2007-11-07 Wednesday, November 7 1.09075 USD
2007-11-08 Thursday, November 8 1.07492 USD
2007-11-09 Friday, November 9 1.06553 USD
2007-11-12 Monday, November 12 1.06553 USD
2007-11-13 Tuesday, November 13 1.03745 USD
2007-11-14 Wednesday, November 14 1.0408 USD
2007-11-15 Thursday, November 15 1.01999 USD
2007-11-16 Friday, November 16 1.02807 USD
2007-11-19 Monday, November 19 1.01636 USD
2007-11-20 Tuesday, November 20 1.01543 USD
2007-11-21 Wednesday, November 21 1.01071 USD
2007-11-22 Thursday, November 22 1.01071 USD
2007-11-23 Friday, November 23 1.01143 USD
2007-11-26 Monday, November 26 1.01245 USD
2007-11-27 Tuesday, November 27 1.00321 USD
2007-11-28 Wednesday, November 28 1.00939 USD
2007-11-29 Thursday, November 29 1.00725 USD
2007-11-30 Friday, November 30 0.9993 USD
2007-12-03 Monday, December 3 1 USD
2007-12-04 Tuesday, December 4 0.989511 USD
2007-12-05 Wednesday, December 5 0.987459 USD


Current values

http://quotes.ino.com/exchanges/?r=CME_CD)

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9814 0.9869 0.9814 0.9869 +0.0026 +0.26% 
CD.Z07 Dec 2007 0.9824 0.9882 0.9823 0.9860 +0.0017 +0.17% 
CD.H08 Mar 2008 0.9823 0.9872 0.9823 0.9870 +0.0022 +0.22% 
CD.M08 Jun 2008 0.9883 0.9883 0.9883 0.9846 -0.0015 -0.15% 
CD.U08 Sep 2008 0.9871 0.9880 0.9871 0.9843 -0.0014 -0.14% 
CD.Z08 Dec 2008 0.9871 0.9871 0.9870 0.9840 -0.0013 -0.13% 
CD.H09 Mar 2009 0.9870 0.9870 0.9870 0.9836 -0.0013 -0.13% 

Other combinations: (http://quotes.ino.com/exchanges/?c=currencies)

Market              Open    High     Low    Last   Change     Pct 
AUSTRALIAN $/CANADIAN $ (NYBOT:AS)
AS.Z07 Dec 2007   0.8840  0.8754  0.8754  0.8831  -0.0011  -0.12%  
AUSTRALIAN $/US$ (NYBOT:AU)
AU.Z07 Dec 2007  0.87060 0.88150 0.87600 0.86905 -0.00310  -0.36%  
CANADIAN $/JAPANESE YEN (NYBOT:HY)
HY.Z07 Dec 2007   108.87  108.87  108.87  108.61    +0.42  +0.39%  
EURO/AUSTRALIAN $ (NYBOT:RA)
RA.Z07 Dec 2007   1.6926  1.6845  1.6845  1.6812  -0.0113  -0.67%  
EURO/BRITISH POUND (NYBOT:GB)
GB.Z07 Dec 2007   0.7182  0.7182  0.7182  0.7182  -0.0041  -0.57%   
EURO/CANADIAN $ (NYBOT:EP)
EP.Z07 Dec 2007  1.49680 1.47000 1.47000 1.48470 -0.01215  -0.81%  
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.Z07 Dec 2007   162.14  162.14  162.14  162.66    +1.40  +0.86%   
EURO/US$ (LARGE) (NYBOT:EU)
EU.Z07 Dec 2007   1.4740  1.4836  1.4832  1.4611  -0.0159  -1.08%  

Blather (from http://quotes.ino.com/exchanges/?r=CME_CD)

The March Canadian Dollar was lower overnight as it extends the decline off November's high. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off November's high, the 50% retracement level of this year's rally crossing at 97.84 is the next downside target. Closes above the 20-day moving average crossing at 101.41 would confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 100.06. Second resistance is the 20-day moving average crossing at 101.41. First support is Wednesday's low crossing at 97.99. Second support is the 50% retracement level crossing at 97.84.


Analysis

Reminder: the powers that be up here are deliberately scuttling the loonie to satisfy Ontario manufacturers who are getting pummeled by the sunken greenback. Problem is, they keep hitting it and it keeps coming up for more.

[TrogL]

35. Closing numbers

Current values

http://quotes.ino.com/exchanges/?r=CME_CD)

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9814 0.9905 0.9814 0.9905 +0.0062 +0.63% 
CD.Z07 Dec 2007 0.9824 0.9926 0.9823 0.9905 +0.0062 +0.63% 
CD.H08 Mar 2008 0.9823 0.9919 0.9823 0.9910 +0.0062 +0.63% 
CD.M08 Jun 2008 0.9912 0.9912 0.9912 0.9908 +0.0062 +0.63% 
CD.U08 Sep 2008 0.9882 0.9918 0.9882 0.9905 +0.0062 +0.63% 
CD.Z08 Dec 2008 0.9871 0.9871 0.9870 0.9902 +0.0062 +0.63% 
CD.H09 Mar 2009 0.9870 0.9870 0.9870 0.9898 +0.0062 +0.63% 

Blather

The March Canadian Dollar closed higher on Thursday as it consolidated some of this week's decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the
decline, the 75% retracement level of the August-November rally crossing at .9733 is the next downside target. Closes above the 10-day moving average crossing at 100.14 would confirm that a short-term low has been posted. First resistance is the 62%
retracement level crossing at 99.56. Second resistance is the 10-day moving average crossing at 100.14. First support is today's low crossing at 98.23 then the 75% retracement level crossing at 97.33.

Analysis

Told'ya so. Ya can't keep a good loonie down.

[antigop]

30. Paulson's bailout may boost GOP's prospects

http://money.cnn.com/2007/12/06/news/economy/easton_1206.fortune/index.htm?postversion=2007120610

Among those free-marketers inside the administration and out, who unapologetically label themselves ideologues, Henry Paulson has a nickname: "Mr. Fixit."

This is not a compliment. Staunch free-marketers harbor a special brand of disdain for government officials like the Treasury Secretary, who combines an instinct for action with a corporate chieftain's confidence that he can untie even the most gnarly financial knot.

As Paulson today unveils a plan he brokered to freeze rates on some 2 million troubled mortgages, economic conservatives are issuing a new round of warnings about the unintended consequences of his well-intentioned tinkering in the housing market.

Economically, their warnings could be right, but so is this political truth: With a heated presidential contest moving into full-swing, an activist Paulson is in the Republican Party's best interest.

[AnneD]

32. The only folks I know...

that have nicknames like 'Mr. Fixit' are mobsters. There's your first clue.:eyes:

[antigop]

34. HA! I was wondering if anyone would comment....thanks! n/t

[AnneD]

37. It was too tempting....

a target-and too obvious. And what is with Bush's penchant for nicknames anyway. I can't figure out if it is mob mentality or a boy's club only thing.

[UpInArms]

36. the surge toward 14K is working! YeeHaw! We will spare no go-juice in pursuing that girl -errr -goal

Dow 13,619.89 174.93 (1.30%)
Nasdaq 2,709.03 42.67 (1.60%)
S&P 500 1,507.34 22.33 (1.50%)
10-Yr Bond 3.998% 0.087

NYSE Volume 3,572,256,000
Nasdaq Volume 2,022,166,000

4:15 pm : Stocks rallied on Thursday as investors welcomed the White House's subprime mortgage-relief plan.

Stocks traded modestly above the unchanged mark for the majority of the trading day as investors awaited President Bush's speech on housing, and subsequently rallied as market participants embraced the White House's subprime plan.

President Bush laid out three ways for people to get help that can afford their current starter mortgage rate, but would not be able to afford the higher payments when their mortgage rate resets higher: 1) refinancing into a new private loan; 2) moving into a Federal Housing Authority-Secure loan; or 3) by freezing their rate for 5-years.

Treasury Secretary Henry Paulson spoke after Bush. He stated the subprime relief involves "no government money."

On a related note, according to the Mortgage Bankers Association (MBA), third quarter U.S. mortgage delinquencies rose to a 20-year high and foreclosures hit an all-time high. News of the subprime fix outweighed the negative MBA report, as indicated by the strong performance in the homebuilding (13.4%) and thrifts & mortgages (6.7%) group.

The plan will indeed help some people keep their home who otherwise would have lost it. Their ability to stay in their homes means fewer homes will be pushed on the market through foreclosure, and hence, it creates a modicum of relief for a housing market already afflicted by bloated inventory levels. On the margin, then, this is a favorable development for the economy and, by extension, for the stock market.

In economic news, new claims for unemployment for the week ended Dec. 1 fell to 338,000 from 353,000 the week before. This is actually fairly important as it shows last week's rise is not a part of an uptrend that typically precedes a recession.

Retailers were in the spotlight today following their November same-store sales results. Readings can be characterized as mixed, discount retailers and department stores put up some of the best numbers while the specialty retailers were hit and miss.

Target (TGT 55.57, -4.56) warned sales trends would need to improve meaningfully in December in order to achieve its fourth quarter EPS growth, which mitigated much of the enthusiasm for the strength seen at some retailers. The S&P 500 Retailing Index (+0.1%) spent most of the day in the red, but managed to post a small gain thanks to the late-day White House induced rally.

Nine of the ten economic sectors traded higher with financials (+2.6%) and energy (+2.4%) pacing the way. Only the utilities sector (-0.1%) ended the day with a loss.

Crude oil rallied $2.74 at $90.23 per barrel. Yesterday, crude prices actually declined despite a large draw in inventories and OPEC deciding to not increase output. DJ30 +174.93 NASDAQ +42.67 NQ100 +1.4% R2K +2.8% SP400 +2.1% SP500 +22.33 NASDAQ Dec/Adv/Vol 853/2135/1.88 bln NYSE Dec/Adv/Vol 707/2493/1.17 bln

3:30 pm : In the past half-hour, the stock market trekked higher, but has since taken a bit of a breather as the major indices hold slightly below their best levels of the session. The rally in equities has caused bonds to slump. The 10-year note is now down 17 ticks to yield 4.02%.

The potentially market-moving November Employment report is due out tomorrow morning at 8:30AM ET. Briefing.com expects payrolls to be 110k, unemployment at 4.8%, 0.4% hourly earnings and a 33.8 hour work week. The market consensus is for payrolls of 70k, 4.8% unemployment, 0.3% hourly earnings and 33.8 hour workweek. DJ30 +152.90 NASDAQ +35.71 SP500 +18.68 NASDAQ Dec/Adv/Vol 846/2113/1.55 bln NYSE Dec/Adv/Vol 766/2404/944 mln

2:55 pm : Stocks are marching upward as investors continue to digest the White House's subprime mortgage fix. The energy sector (+2.5%) continues to extend its gains as it follows crude higher.

Crude oil, now up 3.5% to $90.54 per barrel, continues to rally. Bloomberg reports that Nigeria has halted about 900,000 barrels a day of crude output due to unrest in the Niger Delta. Yesterday, OPEC decided to stand pat on oil output, and inventories showed a much larger decline than expected, yet crude prices still finished the day lower. DJ30 +128.76 NASDAQ +32.79 SP500 +15.50 NASDAQ Dec/Adv/Vol 860/2074/1.40 bln NYSE Dec/Adv/Vol 830/2337/842 mln