STOCK MARKET WATCH, Wednesday July 9

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday July 9, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 196
DAYS SINCE DEMOCRACY DIED (12/12/00) 2726 DAYS
WHERE'S OSAMA BIN-LADEN? 2451 DAYS
DAYS SINCE ENRON COLLAPSE = 2742
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.
$1 USD = EUR 1.06678
$1 USD = JPY 116.6200

AT THE CLOSING BELL ON July 8, 2008

Dow... 11,384.21 +152.25 (+1.36%)
Nasdaq... 2,294.44 +51.12 (+2.28%)
S&P 500... 1,273.70 +21.39 (+1.71%)
Gold future... 923.30 -5.50 (-0.59%)
30-Year Bond 4.46% -0.05 (-1.07%)
10-Yr Bond... 3.88% -0.05 (-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

---

Read more: du

[ozymandius]

1. Market WrapUp: GSE's Falling Into the Abyss

BY FRANK BARBERA, CMT

Last week, we alluded to financial margin call rippling through US Capital markets as falling real estate collateral values continue to undermine loan portfolios and balance sheets. In Monday’s trading, we saw still more manifestations of high anxiety as the contagious cloud of financial fears settled atop the GSE’s. Ironically, the concerns hovering above the GSE’s in Monday’s session centered on a potential change in a new rule at FASB (Financial Accounting Standards Board). The Rule, FAS 140, is said to consider removing the ‘qualified special purpose entity‘ which in the case of the GSE’s, would force Fannie Mae and Freddie Mac to repatriate off balance sheet ‘assets.’ If enacted, the fear suggested by Lehman Brothers analyst Bruce Harting is that the GSE’s would be on the hook to raise huge new sums of money to meet minimum capital requirements. Bandied about were figures of $46 billion in new capital for Fannie Mae, and $29 billion in new capital for Freddie Mac. In both cases, the result would undoubtedly be a fast track ticket into bankruptcy, as raising that type of capital in today’s market might be all but impossible.

However, it seems on closer inspection, that the rule is not aimed at the GSE’s which may actually be exempted from these FASB requirements. In the case of Fannie Mae, the company currently has 2.27 Trillion in off-balance sheet mortgage backed securities while Freddie Mac has 1.42 Trillion. Nevertheless, the GSE’s remain in the center of the housing maelstrom with the Mortgage Bankers Association reporting last Thursday that the amount of foreclosed properties rose more then 70% in the first quarter of 2008. According to the MBA, that data suggests that 1% of all mortgages in America have been foreclosed in the first three months of 2008.

....

In the case of Fannie Mae, even without the FAS 140 negative impact, the company currently sports about $40 billion in overall capital. Within the loan portfoliom FNM currently has around $80 billion in sub-prime loans, and another $200 billion in tier Alt-A. Assuming a 40% loss rate on the sub-prime loans and 30% loss rate on Alt-A (which we believe could actually be considerably higher), that’s $32 Billion (sub-prime) + $60 Billion (Alt-A) for a total of $92 billion in poor quality mortgage losses. In our view, those types of losses equate to nearly twice the companies' total capital suggesting that FNM is insolvent and heading for a further collapse. Shareholders may end up losing everything with the demise of the GSE’s, likely to carry devastating implications for the U.S. housing market which could accelerate lower in crash like behavior. Of course, FNM and FRE will probably both end up being nationalized by the US government along with the remains of the airline industry and other casualties of the current down cycle. Of course, there are those who point to the idea that the GSE’s have some degree of mortgage portfolio insurance, with Fannie and Freddie having SWAP agreements with bond insurers like PMI, MGIC, Genworth and others.

...

Unfortunately, a glance at the collapse in bond insurers of all types suggests that when the time comes for Fannie and Freddie to look for insurance re-payment, the odds are high that none of the insurance entitites will be able to pay off, creating a daisy chain of counter-party risk and collapsing corporations. For those with any doubt, the worst of this crisis is still in front of us, and as I said a number of weeks back, ‘the only light at the end of the tunnel’ is a large freight train rolling down the tracks.

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

[Demeter]

15. Holy Moly!

Either I'm not awake yet, or he said 1% of all mortgages in the country have been foreclosed....
in 3 months!

What will it be over 3 years, then?

[DemReadingDU]

17. Check out the graphs in that article!

Fannie, bond insurers, IndyMac bank are all in freefall

[Tansy_Gold]

27. But why the "!"? Isn't this what we've all seen coming. . . .

. . . . down the track? It's a freight train, all right, moving into the classic slow-motion wreck.

I'm still waiting for someone to explain how the figures were arrived at. What actually accounts for $4.2tr in mortgages or MBSes or whatever they are?


The Loofah family buys a house, pays $400K for it. They put $100K down, get a mortgage for $300K. The mortgage is through Biggo Banko. That much is pretty simple, I think.

Is this what then happens?

Biggo Banko then sells the $300K mortgage, which has a "value" of $1000K over its 30-year life, to Rich Idiots Investment Bank for $500K. Thus Biggo Banko is free and clear from the risks, makes some money, and RIIB takes the big risk. They've got $500K invested, but the property is only worth $400K. They're okay if the Loofahs pay on the loan, but the Loofahs default and/or the property value goes down, RIIB is screwn.

So then RIIB bundles up the Loofahs' mortgage and similar others from the Hoohaha and the Yahoos and the Moomaws, and sells off slices (tranches??) of the bundle to other investors. If there are 100 identical mortgages, the total actual value can't exceed $100MM, correct? One million each, 100 mortgages = $100 million, right?

Does something happen after this that inflates (sic) the value of this bundle of mortgages? Did they get sold and sold and sold and sold, possibly even to people who were gambling that the loans would in fact go bad and the "investors" would get the property which would be going up in value more than the cash value of the mortgages?

I just last night finished reading Kevin Phillips' "Bad Money." I enjoyed it -- well, as much as anyone can enjoy that slow-motion train wreck -- but I still don't have a mental handle on how the valuations of these derivatives and other "exotics" are arrived at. Someone had to come up with the Nov. 2007 figure of $516 or $517 trillion sitting out there. We know that kind of real money doesn't exist. So where did it come from?

Is it all in credit? Is it all speculation that the $100 worth of tangible goods purchased today for $200 of borrowed money will be worth $300 when the bill comes due? Have we reached the point where the original $100 worth of stuff has been used to extend/obtain a million dollars worth of credit and now someone is suddenly waking up and realizing NO ONE can pay the money back?

This is making my head hurt.


Tansy Gold, still wanting to know.

[Warpy]

33. You get the gold star along with the headache

because I had a similar experience when I was following the money (debt) and starting to figure out the derivatives game, which is why that $300K loan was worth $500K to RIIB until they looked at the asset backing it, something all the RIIBs started to do last August.

All that funny paper is still making the rounds, although it's doing it a little more slowly, tranches being bid up every time they change hands, nobody knowing who owns what part of which loan and the homeowner paying a mortgage service company that doesn't own the mortgage.

It's all a magnificent mess that might never be fully straightened out, and that's deeply disturbing. What's even more disturbing is that credit card debt which isn't backed by assets is likely being traded much the same way.

A lot of paper wealth is going to evaporate and soon. That means institutional investors like banks, brokerages, pension funds, and states are going to get hammered first, then everybody who has invested in those institutions from fat cats who own the RIIBs and hedge funds to Joe Blow who is tired and sick and wants to retire are going to find themselves due a lot of hot air and nothing else.

The train wreck is still in slow motion, but it's due to pick up speed very soon. I suggest all of us who have spotted the process find a connection at the people's pharmacy. We're going to need chemical help to endure this headache.

[Tansy_Gold]

43. Thanks, Warpy. That makes it a lot clearer.

My headache just got worse, but it has nothing to do with the stock market or the derivatives. It has to do with Office Max selling their brand of remanufactured printer cartridges for my HP all-in-one printer and then the all-in-one refusing to accept it! :grr: because I NEED to print two pages today and can't. It will cost me a gallon in gas to replace and an hour of lost time. Yes, I will scream.


Anyway -- Warpy, you actually filled in a huge gap in my understanding, because I hadn't even got as far as the credit card debt. And with the exhorbitant interest rates and other fees they're charging, the value of the "debt" (as asset in this up-is-down world) does indeed keep going up. We already know the cc companies and banks are making more off FEES than even off the interest, except of course for the pawnbrokers and the payday loan sharks, who are making out like, well, like bandits (imagine that!). And because I have my own small business and have an account to accept cc, I know just how much they're sucking in. So they -- the banks, etc., -- are getting a cut off each sale from the seller as well as the fees and interest from the buyers. (There's not only a monthly fee, regardless whether the seller sells anything or not, but also a HUGE fee for cancelling the contract!)

The worst of it is that the entities that will "fail" in the event of collapse are the banks and other conduits for the investments, but they also provide the essential financial services for the entire economy. If the credit card companies, debit card processors, even check clearing houses fail, everything comes to a halt. Or so the fearmongering goes. And so the institutions must be propped up.

But the individuals -- the hedge fund managers, the CEOs, the manipulators, etc., -- have already wrung all the real wealth out of the system. If the banks fail, if the mortgage companies fail, if the credit card companies fail, the big boys won't get hurt. WE will ultimately pay the price. The CEOs and other thieves will continue to pull their cut and that will make any attempt at "rescue" an exercise in futility.


Won't it?


Tansy Gold, getting ready to do battle with Office Max

[DemReadingDU]

62. We surely will pay for a very long time

Not only we, but also our children and grandchildren. Except for the top 1%, who have ultimately stolen our savings, our pensions, and our retirement funds.

:mad:

[Warpy]

87. If it makes you feel any better, my DSL

finally conked out. I know what the problem is but the phone company keeps losing me before they schedule Mr. Greenjeans to come out, shinny up the damn pole, and fix it.

It's been an intermittent problem for over a year. I know what it is and where it is but am physically incapable of fixing it myself.

Frustration, thy name is Warpy.

[Zenlitened]

60. I heard a talking-head "expert" on CNBC use the phrase...

... "the world is awash in excess liquidity." Swear-ta-gawd, he said it, Monday morning. I thought I was watching a re-run from a year ago.

A year ago, all the disciples of Dr. Pangloss were using that phrase. Then in August, as you noted, they all admitted to themselves -- nearly simultaneously -- that the "liquidity" was a vast mirage.

Ever since, the Powers That Be have been scrambling not to maintain the illusion -- an impossibility -- but to control the pace at which the illusion fades away.

Amazing to hear this guy reading from a script a year out-of-date!

[lcdnumber6]

88. Tansy this hurts my head too.

I sit here and read all of this, knowing fully well that I have no control over the situation, but then I dutifully do my budget management in Microsoft Money. I hate the intro music to Money. It's a chimera of cowboy and horror film theme music.

[ozymandius]

2. Today's Report

10:30 Crude Inventories 07/05
Briefing NA
Consensus NA
Prior -1982K

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

[UpInArms]

39. Petroleum Inventories: U.S. crude inventories down 5.9 mln brls latest week

02. U.S. gasoline supply up 900,000 brls last week: Energy Dept.
10:36 AM ET, Jul 09, 2008

03. U.S. distillate stocks up 1.8 mln brls last week: Energy Dep
10:36 AM ET, Jul 09, 2008

05. U.S. crude inventories down 5.9 mln brls latest week
10:35 AM ET, Jul 09, 2008

[ozymandius]

3. Oil prices rebound on Iran missile tests

BANGKOK, Thailand - Oil prices rebounded Wednesday in Asia from a tumble of more than $5 in the previous session after Iran test-fired nine missiles, renewing fears of a conflict that could cut global oil supplies.

Iran's elite Revolutionary Guards fired nine long and medium range missiles Wednesday during war games officials say are a response to U.S. and Israeli threats, state television reported.

....

The drill was conducted in the Persian Gulf and the strategic Strait of Hormuz, through which about 40 percent of global oil exports pass, and comes less than a day after Iranian President Mahmoud Ahmadinejad said he sees no possibility of a war with the United States or Israel.

....

Midafternoon in Singapore, light, sweet crude for August delivery was up $1.20 at $136.24 a barrel in Asian electronic trading on the New York Mercantile Exchange. In the floor session Tuesday, the contract fell $5.33 to settle at $136.04 a barrel.

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

[ozymandius]

4. BP Thwarts Ouster of Oil Venture’s Chief

MOSCOW — The Russian partners in BP’s joint venture tried to fire the chief executive at a board meeting on Monday, but they were outvoted by directors nominated from the British side.

Beyond proving an adage in Russian investing — do not turn your back on your Russian partner — the vote highlighted the continuing struggle of BP to maintain control over a pumping asset that is exceptionally important for its global business.

Once held up as a model of foreign investment in Russia, the TNK-BP venture is unraveling amid a broad trend of Kremlin assertiveness over the country’s oil resources. The government’s control serves a blend of commercial and geopolitical aims. At stake is a company operating fields in Siberia that pump about 25 percent of BP’s global output. BP bought 50 percent of TNK-BP in 2003 for about $8 billion.

http://www.nytimes.com/2008/07/08/business/worldbusiness/08venture.html?_r=1&ref=todayspaper&oref=slogin

[Dogmudgeon]

9. Well, THAT was quick

:eyes:

Back to reality.

--p!

[ozymandius]

11. OPEC makes soooo much money on stunts like this.

Even rhetorical ones. An OPEC head of state may make some remark like a slight against Israel, tempers flare, then the price of oil jumps. Cha-ching.

[TalkingDog]

57. Drama Queens.

I know those people. Hangnails that are going to become gangrenous. Sniffles that are bird flu.

And yes, it pays off for them too.


Unfortunately one can't grab them by the ear, give it a tweak and say in a stern tone: "That is quite enough. Just stop it!"

*sigh....in my fantasy life*:

[UpInArms]

31. U.S. says Iran should stop missile tests

http://www.reuters.com/article/politicsNews/idUST7762220080709?sp=true

TOYAKO, Japan (Reuters) - The United States said on Wednesday Iran should immediately halt development of ballistic missiles and stop conducting tests if it wanted to gain the trust of the world.

The comments came after Tehran test-fired nine long- and medium-range missiles, including one it previously said could reach Israel and U.S. bases in the region.

Iran should "refrain from further missile tests if they truly seek to gain the trust of the world", White House spokesman Gordon Johndroe said in Japan where U.S. President George W. Bush was attending the Group of Eight summit.

"The Iranians should stop the development of ballistic missiles, which could be used as a delivery vehicle for a potential nuclear weapon, immediately," he said.

The missile tests occurred at a time of heightened tension between Iran and Israel over Tehran's disputed nuclear program, which the West suspects is aimed at making bombs. Iran says its nuclear program is for power generation.

...more...

[Ghost Dog]

51. Maybe the U.S. and Israel, the only parties with an overtly aggressive,

rather than defensive, posture would like to offer to do the same?

Yeah yeah, I know, multi-cultural internationalism and international treaties, such as the Nuclear Non-Proliferation Treaty, are not supposed to apply to some...

[UpInArms]

40. Crude extends gains as inventories fall more than expected - @ $137.09 bbl

http://www.marketwatch.com/news/story/crude-extends-gains-inventories-fall/story.aspx?guid=%7B01C3A7E7%2D78FD%2D43BF%2DBE8F%2DEFAA65773EFC%7D&dist=msr_2

SAN FRANCISCO (MarketWatch) - U.S. crude inventories fell more than expected, down 5.9 million barrels to 293.9 million barrels in the week ending July 4, U.S. Energy Information Administration reported on Wednesday. Analysts surveyed by energy information provider Platts expected a drop of 1.9 million barrels. After the data, crude-oil futures for August delivery rose $1.05, or 0.8%, to $137.09 a barrel on the New York Mercantile Exchange. Futures were up 0.3% before the report. Gasoline supplies rose by 900,000 barrels in the latest week, and distillate stocks gained by 1.8 million barrels, EIA reported.

[Ghost Dog]

41. Kazakhstan starts building gas pipeline to China

NEAR ALMATY, Kazakhstan, July 9 (Reuters) - Kazakhstan joined construction of a pan-Central Asia pipeline on Wednesday, a major project to link up Caspian Sea gas reserves with energy-hungry China.

The pipeline is the first significant independent gas link connecting the former Soviet region with eastern markets while bypassing Russia. Russian gas monopoly Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) is currently the main buyer of Central Asian gas.

Under the scorching sun of southern Kazakhstan, Kazakh and Chinese flags flapped in the wind as engineers assembled segments of the pipeline in a symbolic ceremony attended by senior energy officials.

"This project will be implemented in five stages with the final stage scheduled for completion by 2013," said Sauat Mynbayev, Kazakhstan's energy minister.

...

The Kazakh link is part of a route that links Turkmenistan's natural gas deposits with China via Uzbekistan and Kazakhstan.

Uzbekistan also started construction of its part this month while Turkmenistan launched its segment last year.

Gas shipments will start in 2010 at 4.5 billion cubic metres (bcm) a year and will eventually reach 40 bcm a year. China will receive 30 bcm and Kazakhstan 10 bcm for its southern regions which face an energy deficit due to growing consumption.

China's CNPC, the leading operator of the project, has signed deals with state oil and gas firms of Turkmenistan, Uzbekistan and Kazakhstan giving them 50 percent stakes in their respective parts of the pipeline.

/... http://www.reuters.com/article/marketsNews/idINL0939802620080709?rpc=44&sp=true

[Ghost Dog]

47. Cuba sees continued growth in sugar production

HAVANA, July 9 (Reuters) - Cuba is investing in sugar cutting combines, trucks and other equipment and retooling mills in preparation for a big jump in output in 2008-2009, the official media said Wednesday.

"The country is planning a 25 percent to 30 percent increase in sugar and molasses for the coming harvest and will meet refined sugar demand," the Juventud Rebelde newspaper quoted Orlando Garcia Ramirez, vice minister of sugar who testified before a parliament hearing on Tuesday.

"It is investing in refineries, distilleries, electrical generation capacity, increasing storage space and introducing high productivity sugar cutting combines," the paper said.

Cuba imported 22 Mann combines from Brazil for the just concluded harvest.

...

Raw sugar production was 1.5 million tonnes for the just concluded 2007-2008 harvest, compared with 1.2 million tonnes the previous harvest, refined sugar doubled to 200,000 tonnes and molasses for animal feed increased 300 percent, the first increases in output since the industry was downsized by more than 50 percent in 2003.

Cuba consumes a minimum 700,000 tonnes of sugar per year, and 400,000 tonnes are destined for China.

/... http://www.reuters.com/article/marketsNews/idINN0936704020080709?rpc=44&sp=true

Related news:

Sugar rises to four-month high on ethanol demand
By Moming Zhou, MarketWatch
Last update: 4:59 p.m. EDT July 1, 2008
Comments: 34
SAN FRANCISCO (MarketWatch) -- Sugar futures rose Tuesday to their highest point in nearly four months on concerns that record crude-oil prices will increase global demand for ethanol produced from sugarcane as an alternative.

/... http://www.marketwatch.com/news/story/sugar-rises-four-month-high-ethanol/story.aspx?guid={B8E594B2-C3B9-4CDB-A0D6-4EEA5C85D80D}&dist=msr_6

[ozymandius]

5. Bush Hails G-8 summit's (meaningless) work on climate change

TOYAKO, Japan - President Bush on Wednesday hailed the move by G-8 leaders to coalesce behind a global climate-change strategy, claiming "significant progress."

"In order to address climate change, all major economies must be at the table, and that's what took place today," Bush said at the conclusion of the summit of leading industrialized nations — a get-together that he said also worked to advance free trade and combat hunger and disease around the world, particularly in Africa.

The global warming statement represented quite a progression for Bush, who in his first term disputed scientists' assertions about this problem. He backed the G-8 summit declaration that greenhouse gas emissions should be halved by the middle of the century.

.....

Bush took no questions from reporters in delivering his departure statement. Nor did he address criticisms that emerged about the G-8's positions, such as the contention by some environmental activists that the group's stance on reducing global warming amounted to political window-dressing and did not go far enough — or fast enough.

Instead, he sought to frame the summit as a glowing success.

http://news.yahoo.com/s/ap/20080709/ap_on_re_as/bush_g8

---

Another photo-op for his new frame...

[ozymandius]

13. G-8 Failure on Emissions Plan Threatens Climate Fight (Update1)

July 9 (Bloomberg) -- The Group of Eight's climate-change strategy may fail to contain rising temperatures that threaten to cause more floods, droughts and storms.

The world's richest countries, which are responsible for almost half of the world's emissions, yesterday pledged to reduce the production of heat-trapping pollution by at least 50 percent by 2050. They didn't specify how those cuts should be reached or provide intermediate targets.

http://www.bloomberg.com/apps/news?pid=20601072&sid=adc7p960TeKs&refer=energy

[Ghost Dog]

42. Spanish and Catalan press today comment

that this Japan-G8-Eco trip is mostly a sham (like the aid to Africa has turned out to be).

Greetings from the city of Barcelona, today...

[Dr.Phool]

54. Yo, Harper! The President of Nigeria.

Mr. President, we're so proud of our Nigerian-Americans. I'm reminded of it every time I look at how well my shoes are shined.

Yo, Merkel, honey!

What an embarrassing piece of shit.

Six months, 11 days.

[skoalyman]

23. he was just there for the 18 course meal lol

I doubt they served pretzels

[ozymandius]

6. Can A More Powerful Fed Really Help The Banks?

U.S. Federal Reserve Chairman Ben Bernanke called on lawmakers Tuesday to consider new rules to expand the central bank's authority over the financial markets, saying financial markets need to be more stable and resilient.

Of course, the financial companies themselves need to be more stable too, and so far no matter what the Fed and other regulators have done, they haven't been able to prevent negative sentiment from wreaking havoc.

Bernanke's speech, at a conference on mortgage lending sponsored by the Federal Deposit Insurance Corp. (FDIC), comes after global stock markets swooned over new fears that the credit crisis will deepen.

....

The central banker admitted, however, that none of these efforts can guarantee that another big market participant won't be taken down. He even called on Congress to consider new ways to assist the orderly unwinding of a big securities company (the way the FDIC handles the liquidation of a bank, for example), urging it to work with the Treasury Department on ideas.

http://www.forbes.com/home/2008/07/08/bernanke-fed-banks-biz-wall-cx_lm_0708mortgage.html

[ozymandius]

7. BOND REPORT: Treasurys Ease After Fed Oversight Request

Treasurys declined slightly Tuesday after Federal Reserve Chairman Ben Bernanke suggested the central bank be given new powers, and mortgage lenders recovered from losses yesterday over concerns of their need to raise capital.

The two-year note yield rose (UST2YR) 4 basis points to 2.48%.

Government debt has also traded down as U.S. stocks gained ground throughout the day. Earlier confusion over whether new accounting rules may force mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) to raise more capital also drove some bond trading. Stocks of the two companies plunged yesterday when reports of the possible fund-raising needs came out, dragging down equity markets and pulling investors toward the safety of Treasurys. That trade is being unwound today, analysts said.

http://money.cnn.com/news/newsfeeds/articles/djhighlights/200807081610DOWJONESDJONLINE000552.htm

[Demeter]

16. It's to Help the Fed, not the Banks!

It's time to cover those tracks, campers.

[ozymandius]

8. Fannie, Freddie Downgraded by Derivatives Traders (Update1)

July 9 (Bloomberg) -- Fannie Mae and Freddie Mac, ranked Aaa by the world's largest credit-rating companies, are being treated by derivatives traders as if they are rated five levels lower.

Credit-default swaps tied to $1.45 trillion of debt sold by the two biggest U.S. mortgage finance companies are trading at levels that imply the bonds should be rated A2 by Moody's Investors Service, according to data compiled by the firm's credit strategy group. The price of contracts used to speculate on the creditworthiness of Fannie Mae and Freddie Mac and to protect against a default doubled in the past two months.

Traders are overlooking the government's implied guarantee of the debt as credit losses grow and concern rises that the companies don't have enough capital to weather the biggest housing slump since the Great Depression. Washington-based Fannie Mae fell 73 percent in the past year on the New York Stock Exchange and McLean, Virginia-based Freddie Mac lost 60 percent of its market value.

....

The cost to protect the companies' subordinated debt from default rose at a faster rate. That debt is rated Aa2 by Moody's. Credit-default swaps on Fannie Mae's subordinated notes jumped 108 basis points to 195 basis points since May 1, while contracts on Freddie Mac's rose 105 basis points to 193 basis points.

http://www.bloomberg.com/apps/news?pid=20601068&sid=aY0CwXhA.F3w&refer=economy

---

A rise indicates deterioration in the perception of credit quality; a decline, the opposite.

[ozymandius]

10. Stocks Rise in Europe, Asia, Led by Banks; U.S. Futures Decline

July 9 (Bloomberg) -- Stocks rose in Europe and Asia after JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the credit crisis will ease and lower oil prices boosted profit outlooks for automakers and airlines. U.S. index futures fell.

Barclays Plc, the U.K.'s fourth-biggest bank, and Australia's Macquarie Group Ltd. gained after Dimon said buyers are returning to some types of mortgage products. Daimler AG, Air France-KLM Group and Korean Air Lines Co. climbed as crude traded near a two-week low. Norsk Hydro ASA and BHP Billiton Ltd. led metal producers higher after Alcoa Inc.'s profit topped analysts' estimates and copper rose in London.

The MSCI World Index added 0.6 percent to 1,374.55 at 10:52 a.m. in London, trimming the decline from an October record to 18 percent. Financial stocks, which have led a rout that erased more $11 trillion from global equities this year, climbed the most in two months today. The U.K.'s FTSE 100 Index jumped 1.6 percent, after briefly entering a bear market yesterday.

http://www.bloomberg.com/apps/news?pid=20601084&sid=akCkxoCG1Mh0&refer=stocks

[Ghost Dog]

44. Banks lead European stocks up, strategists cautious

Wed Jul 9, 2008 7:47am EDT
FRANKFURT, July 9 (Reuters) - European shares rose on Wednesday as reassuring comments on banking from the U.S. Federal Reserve and signs that UK mortgage lender Bradford & Bingley (B&B) (BB.L: Quote, Profile, Research, Stock Buzz) would be bailed out buoyed financials.

Banks rose on a broad front, with Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) up 6.3 percent, Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) 6 percent, Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz) and Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) 5.3 percent, CS Group (CSGN.VX: Quote, Profile, Research, Stock Buzz) 4.6 percent, Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) 4.2 percent and UBS UBSV.VX 3.6 percent.

The DJ Stoxx European bank index was the top sectoral performer with a gain of 2.9 percent, trimming its year-to-date loss to 34 percent.

...

At 1115 GMT, the FTSEurofirst 300 index of top European shares was up 1.2 percent at 1,174.99 points. The European benchmark, which lost 1.5 percent on Tuesday, is down 22 percent so far this year.

"The market is driven mainly by financials," said Heinz-Gerd Sonnenschein, equity stategist at Postbank in Germany.

...

But investors remained cautious as tensions surrounding Iran's nuclear programme pushed oil prices higher after Tuesday's steep drop. Iranian state media reported that the country had test-fired missiles with a range that could reach Israeli and U.S. bases in the region.

"We are walking on thin ice ... We will have shaky days and weeks ahead of us. We have no clear signs that we can move up strongly," said Sonnenschein.

Dominique Strauss-Kahn, the International Monetary Fund's managing director, said it was hard to know how far the global financial crisis still had to run, with the extent of further credit losses hinging on the U.S. housing sector.

"What is sure is that the consequences for the real (economy) sector of the financial crisis are still in front of us," Strauss-Kahn said.

SLOWER GROWTH

The European Union's statistics office downgraded its gross domestic product growth estimate for the euro zone to 0.7 percent in the first quarter from 0.8 percent previously.

The foreign trade surplus for Germany, Europe's largest economy and the world's top exporter, narrowed more than expected in May as exports fell sharply, adding to evidence that economic growth slowed sharply in the second quarter.

"The (stock) market is in the process of adapting expectations to a less optimistic view of the macro environment," Goldman Sachs said in a research note.

"And what looks cheap now may not look that cheap in the near future, should fundamentals turn even less friendly going forward," Goldman said, referring to equity valuations.

Many such valuation metrics rely on corporate earnings estimates, and Societe Generale in a strategy note said: "It may now be the turn for 2009 earnings to be revised down," as current expectations of over 13 percent profit growth in Europe next year looked "increasingly unlikely".

The focus of investors, analysts and traders is shifting to the second-quarter corporate earnings season traditionally kicked off by U.S. aluminium producer Alcoa (AA.N: Quote, Profile, Research, Stock Buzz), which posted stronger-than-expected results late on Tuesday.

Miners were among the biggest gainers in Europe, with Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) rising 3.2 percent, Vedanta (VED.L: Quote, Profile, Research, Stock Buzz) up 2.9 percent and BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz) 2.5 percent higher.

/... http://www.reuters.com/article/marketsNews/idCAL098768720080709?rpc=44&sp=true

[Ghost Dog]

53. European Stocks Rise, Led by Banks; Barclays, Daimler Advance

July 9 (Bloomberg) -- European stocks rallied the most in two months on speculation losses at financial companies will ease and commodities will fall, reducing inflation and pressure on profit margins.

Barclays Plc, the U.K.'s fourth-biggest bank, and Credit Suisse Group AG advanced after JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said buyers are returning to some types of mortgage products. Daimler AG and DSG International Plc climbed as crude traded near a two-week low, while Norsk Hydro ASA led metal producers higher after Alcoa Inc.'s profit topped analysts' estimates.

The Dow Jones Stoxx 600 Index added 1.5 percent to 283.14 at 3:35 p.m. in London, the steepest gain since May 2 and paring this year's decline to 22 percent. Bank stocks, which have led a rout that erased more than $11 trillion from global equities this year, climbed the most since April today in Europe. The U.K.'s FTSE 100 Index jumped 1.5 percent, after briefly entering a bear market yesterday.

``Bear markets tend to overdo the negativity,'' said Alan Beaney, London-based head of investments at Principal Investment Management Ltd., which oversees about $2 billion. ``We are getting to the stage today where we think we should be reinvesting.'' He said he is ``overweight'' banks.

...

National indexes advanced in all 18 western European markets today. Germany's DAX added 1.2 percent, as did France's CAC 40.

/... http://www.bloomberg.com/apps/news?pid=20601085&sid=aTCm2nZAjaI0&refer=europe

[Ghost Dog]

55. U.K. Mortgage Rates Surge, Consumer Confidence Slumps

July 9 (Bloomberg) -- U.K. mortgage rates surged to the highest in eight years and consumer confidence dropped as the worst housing slump in three decades deepened.

``This is doom and gloom,'' said Alan Clarke, an economist at BNP Paribas SA in London. ``The housing market is in freefall and unemployment is rising.''

The rate on a home loan fixed for two years rose to 6.63 percent in June, the highest since February 2000, the Bank of England said today in London. The 0.37 percentage point increase from a month earlier is the biggest since October 2003. Nationwide Building Society's index of consumer sentiment dropped to the lowest level since the survey began in May 2004.

The U.K. is skirting a recession as house prices fall, oil costs rise to a record and lenders refuse to pass on the Bank of England's three interest-rate cuts since December. Policy makers, who make a rate decision tomorrow, said last month that they considered increasing borrowing costs after inflation accelerated to 3.3 percent, the fastest pace in at least a decade.

``The Bank of England's credibility is in question with the worst peak in inflation in its history, but there are a lot of reasons not to hike now,'' BNP's Clarke said.

Rate Decision

All but one of 49 economists in a Bloomberg News survey predict the Bank of England will keep the key rate unchanged at 5 percent tomorrow. Nationwide said there is a 20 percent chance that the bank will raise interest rates.

Evidence of the economy's deterioration sent the pound lower against the euro today. The currency fell to 79.59 pence from 79.57 pence yesterday.

House prices fell the most since 1992 in June, Nationwide said July 1. Unemployment may rise 58 percent to 1.3 million by the middle of 2010, the Centre for Economic and Social Inclusion, a government-supported research group, predicted this week.

/... http://www.bloomberg.com/apps/news?pid=20601085&sid=aPxqIUWAS5aw&refer=europe

[ozymandius]

12. Gold Advances in London as Crude Trades Higher, Dollar Weakens

July 9 (Bloomberg) -- Gold rose for the first time in five days in London as oil advanced and the dollar declined against the euro, bolstering demand for the metal as a hedge against a weaker U.S. currency and faster inflation.

Crude oil, which has climbed 43 percent this year, advanced for the first time this week after Iran test-fired a long-range missile capable of reaching Israel and the dollar fell.

....

Gold for immediate delivery rose $1.85, or 0.2 percent, to $921.47 an ounce as of 11:26 a.m. in London. Futures for August delivery fell 80 cents, or 0.1 percent, to $922.50 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.

http://www.bloomberg.com/apps/news?pid=20601012&sid=ajMV9fHlRZYY&refer=commodities

[ozymandius]

14. Stocks set for rough start

LONDON (CNNMoney.com) -- U.S. stocks looked set for a tough start Wednesday as oil prices rebounded from a sharp two-day decline.

At 5:26 a.m. ET, Nasdaq and S&P futures were narrowly lower, suggesting a negative start for Wall Street.

U.S. stocks rebounded Tuesday, as bargain hunters scooped up shares pummeled in the recent selloff and oil futures sank more than $5.

http://money.cnn.com/2008/07/09/markets/stockswatch/index.htm?postversion=2008070905

[UpInArms]

18. dollar watch

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

Last trade 72.782 Change -0.178 (-0.24%)

What Bernanke Could be Hinting About Interest Rates

http://www.dailyfx.com/story/bio1/What_Bernanke_Could_be_Hinting_1215554046268.html

The sharp drop in oil prices has helped to strengthen the US dollar. Pending home sales dropped more than expected, but it has failed to put a dent in the greenback which continues to follow equities higher. The dollar is becoming a safe haven bet as the Federal Reserve reminds us that they will be the lender of last resort. With stocks falling close to a 2 year low on Monday, Fed President Ben Bernanke attempted to stabilize the stock market and the US dollar by saying that they are thinking about "extending the duration" of their emergency lending facilities to investment banks. Is Bernanke trying to tell us something about interest rates? Perhaps, because to extend the availability of emergency lending facilities means that there could still be liquidity problems in the financial markets. Keeping the lifeline open to banks and raising borrowing costs at the same time would actually be counterproductive, especially if they expect the banks to tap into the lifeline. Bernanke is hinting to us that raising interest rates this year, even by 25bp is not a done deal. Oil prices have fallen to $136 a barrel and if crude continues to drop, the Fed's decision about interest rates will be an easy one. Bernanke and his colleagues are becoming extremely sensitive to market prices which could be very dangerous but for the time being its working. Both the stock market and the US dollar have recovered. However oil prices are really dictating Fed policy at the moment. Hawkish comments from Fed President Lacker suggest that some Fed officials are still nervous about inflationary pressures and stand ready to act if necessary. Fed fund futures are currently pricing in a 45 percent chance that interest rates will be increased in September, down from a 65 percent chance a week ago. As for the October meeting, there is only a 53 percent chance that rates will be increased; the odds for December are about the same. If the duration of the emergency lending facility is actually increased, then a rate hike by the Federal Reserve in 2008 becomes highly unlikely. The G8 Summit comes to an end tomorrow, no comment about currencies are expected to be made.

...more...

Federal Reserve vs. European Central Bank: Who is the Least Hawkish?

http://www.dailyfx.com/story/topheadline/Federal_Reserve_vs__European_Central_1215535552806.html

Federal Reserve Chairman Ben Bernanke has the market guessing about whether interest rates will be increased this year. His comments this morning about increasing the duration of emergency lending to investment banks reduces the chance that borrowing costs will rise. Take a look at the recent comments from Fed and ECB officials:

US Fed: Down Playing an Interest Rate Hike?

Ben Bernanke, Federal Reserve Chairman (Voting Member) ``The Federal Reserve is strongly committed'' to financial stability and is ``considering several options, including extending the duration of our facilities for primary dealers beyond year-end,''

"We are currently monitoring developments in financial markets closely and considering several options, including extending the duration of our facilities for primary dealers beyond year-end, should the current unusual and exigent circumstances continue to prevail in dealer funding markets," Bernanke said. – July 8, 2008

Janet Yellen, San Francisco Fed President (Non-Voting Member)

"Things could get worse before they get better," “The unemployment rate could increase”

"The risks to inflation are likely not symmetric and they have definitely increased. We cannot and will not allow a wage-price spiral to develop," – July 7, 2008

Henry Paulson, US Treasury Secretary

There is a strong possibility that we will be growing at the end of the year - that we will have stronger growth at the end of the year than we have now."

"Our biggest concern is the downturn.”

“There's no doubt that high headline inflation numbers are a real concern to Americans, but core inflation is relatively contained and my biggest focus today is on the downside risks, which are housing, oil prices, and what is going on in the capital markets." – July 3, 2008

Federic Mishkin, Fed Governor (Voting Member)

"Growth could continue to be quite weak, though I would hope it would pick up next year," - July 2, 2008

...more...

[Ghost Dog]

45. Dollar edges lower as geopolitical tensions weigh

NEW YORK, July 9 (Reuters) - The U.S. dollar weakened on Wednesday, as oil prices rebounded and geopolitical tensions resurfaced with news Iran test-fired missiles and unknown gunmen attacked the U.S. consulate in Turkey.

Iran's state media reported that the country had test-fired nine long- and medium-range missiles, including one which it had previously said could reach Israel and U.S. bases in the region.

"Geopolitical tensions are slightly weighing on the dollar, although, we haven't seen such big moves and we're still within trading ranges," said David Powell, a currency strategist at Bank of America in New York.

Tensions in the Middle East were further exacerbated after three policemen and three gunmen were killed in an attack on the United States consulate in Istanbul.

The dollar index, which tracks the greenback against a basket of six major currencies, fell 0.2 percent on the day to 72.771 .DXY in early New York trading.

Rising geopolitical concerns also gave safe-haven currencies like the Swiss franc <CHF=> a bid tone. The dollar fell 0.1 percent to 1.0324 Swiss francs and versus the Japanese unit, it was slightly down at 107.37 yen <JPY=>.

Analysts, however, said geopolitics could soon take a back seat once the macroeconomic news-flow picks up after a lack of first-tier economic releases from U.S. or euro zone on Wednesday.

/... http://www.reuters.com/article/marketsNews/idINN0932748720080709?rpc=44&sp=true

[TalkingDog]

58. Well, it looks as though we've got things in order.

Majority of the wealth accumulated by a small percentage of the people? Check.

Environmental uncertainty? Check.

Disgruntled, under-employed populace? Check.

Now we're ready. Let's have us a big ol' World War.......

[UpInArms]

19. Delta dismissed from fatal 2006 crash lawsuits

http://news.yahoo.com/s/ap/20080709/ap_on_bi_ge/kentucky_crash

LEXINGTON, Ky. - A federal judge has dismissed Delta Air Lines Inc. from more than 19 pending lawsuits involving a plane crash that killed 49 people two years ago.

U.S. District Judge Karl Forester said in a 13-page opinion Tuesday that no Delta employee could be held liable for the crash of Comair Flight 5191. Comair is a subsidiary of Delta, but Delta argued that each has separate management and policies, and employs its own pilots.

Forester said Comair carries out its own flight operations, while Delta did not own or operate the Comair plane and had no legal control over the pilots of the crashed jet.

"Delta has no right to fire or otherwise discipline Comair pilots for violating Comair's polices or procedures and/or aviation regulations," the judge wrote.

<snip>

"Out of an abundance of caution, some plaintiffs had simply named Delta, Comair's parent company, as an additional defendant," Royse told the newspaper.

<snip>

The plane crashed shortly after taking off from the wrong runway at Blue Grass Airport on Aug. 27, 2006, killing 49 of 50 people on board.

...more...

[UpInArms]

20. Comair to cut 520 crew members

http://www.bizjournals.com/cincinnati/stories/2008/07/07/daily14.html?b=1215489600%5E1665276

Regional carrier Comair expects to cut more than 500 of its crew positions after the summer, as it follows through with previously announced plans to ground 14 of its 50-seater jets.

The Erlanger-based airline estimates it will eliminate 300 pilot and 220 flight attendant positions. Comair employs roughly 6,400 in total, 1,477 of whom are pilots and 940 are flight attendants.

In an e-mail, Comair spokeswoman Kate Marx said the carrier is still operating the 14 earmarked aircraft through the summer but that its flight schedule will decline significantly in September.

"We have steadily reduced non-crew staff since the beginning of the year," Marx said. "Because our pilot and flight attendant staffing is directly related to our flying, we need to adjust our crew complement for the fall."

Comair follows several other airlines that have been reducing their ranks as high fuel prices cause them to cut routes. AirTran on July 7 said it would eliminate 300 attendant and 180 pilot positions, and United Airlines recently announced plans to cut 150 customer service and ramp jobs.

Still, Ted Bushelman, spokesman for the Greater Cincinnati/Northern Kentucky International Airport, was surprised by the number of expected reductions at Comair. The carrier and its parent, Delta Air Lines, control about 85 percent of the airport's traffic.

...more...

[UpInArms]

21. U.S. regulators probe 2 ex-Credit Suisse brokers: report

http://www.reuters.com/article/businessNews/idUSBNG25922720080709?feedType=RSS&feedName=businessNews?sp=true

(Reuters) - Federal prosecutors are investigating whether two former Credit Suisse (CSGN.VX: Quote, Profile, Research, Stock Buzz) brokers lied to investors about how they placed their money into short-term securities, the Wall Street Journal reported, citing people familiar with the matter.

The investigation involves the $330 billion market for auction rate securities, including municipal bonds, corporate bonds, and preferred stocks whose rates are reset periodically, which broke down following auction failures caused by the credit crunch.

The probe by the Justice Department's U.S. attorney's office for New York's Eastern District represents the first known criminal matter stemming from the crumbling auction-rate securities market, the paper said.

Until now, the fallout in the auction-rate securities market has led only to civil litigation.

Credit Suisse isn't a target of the Justice Department's investigation, people familiar with the matter told the paper.

Two New York-based brokers, Eric Butler and Julian Tzolov, resigned from Credit Suisse on September 7, 2007, amid accusations by clients that they were misled about the nature of the auction-rate securities they bought, the paper said.

...more...

[Ghost Dog]

56. Credit Suisse Helps With U.S. Probe of Former Brokers

July 9 (Bloomberg) -- Credit Suisse Group, Switzerland's second-biggest bank, said it is helping U.S. prosecutors in an investigation of two former cash management employees who resigned after engaging in ``prohibited activity'' related to the sale of auction-rate debt.

Investigators are looking into whether the brokers lied to investors about how their funds were put into short-term securities, the Wall Street Journal said, citing people familiar with the situation. The investigation, which doesn't target the Swiss bank, is the first criminal probe stemming from the collapse of the auction-rate market, the newspaper said.

Credit Suisse said it found out about the two employees' actions almost a year ago and notified regulators. The brokers were immediately suspended and resigned in September, the Zurich- based bank said in an e-mail.

The employees ``violated their obligations to Credit Suisse and to our clients,'' the bank said. ``We promptly notified our regulators when this matter arose last year and we have continued to work closely with them.''

Auction-rate securities, with maturities of 20 years or longer, were treated like money-market investments by individuals and corporations because they were easy to buy and sell at the auctions run by dealers to set rates, typically every seven, 28 or 35 days. The $330 billion market was used by states, cities, hospitals, student loan agencies and mutual funds to raise money.

/... http://www.bloomberg.com/apps/news?pid=20601085&sid=aTCpAgALCYHg&refer=europe

[UpInArms]

22. Traders plead guilty to foreign exchange scam

http://news.yahoo.com/s/nm/tradingscheme_pleas_dc

NEW YORK (Reuters) - Two currency traders pleaded guilty on Tuesday to defrauding investors, admitting their firm engaged in almost no trading and that they misappropriated money from investors and used it to buy luxury homes and cars, federal prosecutors said.

Michael MacCaull and Bradley Eisner, both 36 years old, pleaded guilty to conspiracy to commit mail and wire fraud at a hearing before U.S. Magistrate Judge Joan Azrack in federal court in Brooklyn, New York, the U.S. Attorney's office in Brooklyn said.

They each face a maximum of 20 years in prison and a $250,000 fine under their plea agreements, according to prosecutors who investigated the case with the U.S. Postal Inspection Service.

MacCaull and Eisner also have forfeited more than $28 million in U.S. currency and property, prosecutors said.

According to court papers, in 2001 MacCaull and Eisner started soliciting investments from the public through their company, Razor FX, which had offices in Great Neck, New York and a mailing address in Upper Saddle River, New Jersey. The company purportedly bought and sold currencies in the spot foreign exchange market, prosecutors said.

But, prosecutors said, almost no foreign exchange trading was being done by them. Instead, they said, MacCaull and Eisner deposited the investments in a bank account for their personal use. They sent bogus account statements to investors, and investors who withdrew money were paid with funds from other investors, prosecutors said.

...more...

[skoalyman]

25. good grief people do some of the stupidest things

misappropriated money from investors and used it to buy luxury homes and cars, federal prosecutors said.
talk about the perfect crime N0T :eyes:

[Robbien]

49. They took in over a hundred million, returned about 20-30%, forfeited $28million

which means about fifty million was spent by this robber baron duo.

If they were as smart as they were corrupt, they would have socked away quite a bit of that loot in some Cayman Island super secret account.

[UpInArms]

24. U.S. mortgage applications increased last week after "adjustment" -MBA

http://www.reuters.com/article/bondsNews/idUSN0832101420080709

NEW YORK, July 9 (Reuters) - Applications for U.S. home mortgages rose to their highest level since early June last week after an adjustment made for the Independence Day holiday, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity increased 7.5 percent to 513.4 in the week ended July 4. Banks and financial markets were closed on July 4 for the holiday.

The seasonally adjusted index of refinancing applications climbed 8.7 percent to 1,379.3 last week, while the gauge of loan requests for home purchases rose 6.7 percent to 365.8, the MBA said. Both indexes are also at their highest since the week ending June 6.

Reflecting the flood of applicants to programs sponsored by the Federal Housing Administration, the MBA's government index surged 19.8 percent in the week.

...more...

Would those programs be involved in the subprime crapweasel cheating home loans that are about to be foreclosed?

[Tansy_Gold]

46. Wow! Applications rose! Wow!

This is -- if I read the article correctly -- a slight rise over a three- or four-week span. I wouldn't even classify it as a bump in the road. More like a paint stripe.


When there's a steady climbing trend, then report it as news. Otherwise........

[ozymandius]

26. More Bad News for Malls: Steve & Barry's BK

From the WSJ: Steve & Barry's Nears Bankruptcy

Fast-growing retailer Steve & Barry's is expected to file for Chapter 11 bankruptcy protection as early as Wednesday ... A filing would be devastating to mall owners across the country, who ponied up hundreds of millions of dollars to attract Steve and Barry's into huge, empty spaces often as large as 100,000 square feet. Potentially all of those 275 stores could close ...

Steve & Barry's was the retailer we discussed a few weeks that was using up-front fees from mall owners to fuel their rapid expansion:

People close to the company's finances say most of the retailer's earnings came in the form of one-time so-called "tenant improvement" payments from landlords of $2 million to $7 million per store.

This is another major blow to already reeling mall owners. Just today Reis announced that the strip mall vacancy rate climbed to 8.2% in Q2 2008, the highest vacancy rate since 1995.

more...

http://calculatedrisk.blogspot.com/2008/07/more-bad-news-for-malls-steve-barrys-bk.html

[Demeter]

77. They Lost The Blue and Maize Franchise

U of Mich pulled their license.

[ozymandius]

28. bidness is flat

9:39
Dow 11,384.29 Up 0.08 (0.00%)
Nasdaq 2,281.55 Down 12.89 (0.56%)
S&P 500 1,273.87 Up 0.17 (0.01%)
10-Yr Bond 3.894% Up 0.014
NYSE Volume 178,612,859.375
Nasdaq Volume 89,059,585.938

08:29 am : S&P futures vs fair value: +2.9. Nasdaq futures vs fair value: -4.0.

08:00 am : S&P futures vs fair value: +1.4. Nasdaq futures vs fair value: -6.0. S&P 500 stock futures suggest a slightly higher start to the day as they trade near their best levels of the morning. Alcoa kicked off second quarter earnings season yesterday after the close. The aluminum company reported a drop in earnings, but the results topped Wall Street's expectations. Crude prices are up 1.1% to $137.52 per barrel, which follows two consecutive sessions of steep losses.

[antigop]

29. Rigged Casinos and the PPT (oops, the secret is out)

Bernanke acknowledges greater intervention in the markets

http://discuss.epluribusmedia.net/node/2046

Back on Saturday when I promised to write more about Kevin Phillips and his take on the Plunge Protection Team, I had little idea that the PPT would have such a public coming out party so soon.

This morning, according the to Wall Street Journal, Fed Chair Bernanke said “federal regulators, policymakers and private sector groups are already taking steps to address some of the concerns laid bare during the turmoil last year.”

Translation #1: The myth of the free market is debunked.
Translation #2: Investing in the US Stock Market is about as wise as gambling in a rigged casino.

Ironically, Bernanke and US Secretary of the Treasury Hank Paulsen were scheduled to address a seminar entitled "Mortgage Lending for Low and Moderate Income Households" in Arlington, VA at 7:30 this AM.

Lots of links to read...sorry I don't have time to post them all.

[ozymandius]

32. There comes a time when one ceases to be a conspiracy theorist and becomes a conspiracy analyst.

Although for many years its existence was denied and those who spoke of it were often labeled conspiracy nuts, now many in the business press speak openly about it and its alleged actions to finagle the Savings and Loan bailout, orchestrate the rescue of Citibank, ameliorate the disasters with the tech bubble, and salvage the stock market during the subprime August 16th meltdown. But what with the fixing of the Bear Sterns deal in spring 2008, the Plunge Protection team was clearly operating more obviously. Earlier this year the press reported President Bush convened in the Oval Office a meeting of the President’s Working Group on Financial Markets -- what Ambrose Evans-Pritchard International Business editor of the UK Telegram calls the “black arts unit.”

Why would its operations need to be hush hush? According to Phillips again,

Frequent intervention in nonemergency situations would only prompt unwelcome investigative reportage. Drawn-out credit-market problems could also increase that likelihood.

…Proof of federal orchestration could it be established, might lead to some very messy lawsuits.

...

Recognizing the huge risks to the US economy, President Bush called for a special meeting of his economic advisors on July 27th, to discuss the stock market, which had plunged as much as 456 points the previous day.

However, the PPT wouldn’t stand idle and allow the panic swirling around the Wall Street power brokers to turn into a crisis. "The market understands that the Fed will act in due time, if and when evidence accumulates that action would be appropriate,” said St. Louis Fed chief William Poole on July 31st.

---

Imagine the tumult if the actions of the PPT were laid bare such that specific stocks and funds were supported while others were allowed to fail. In terms of funds - think retirement funds, pension plans, etc.

[Dr.Phool]

38. I was out for most of the day yesterday,

And after the market closed, it seemed like all the news that came out yesterday was bad, other than the price of oil (which is still ridiculously high). You would have expected a major drop, not a 150 pt jump.

[DemReadingDU]

64. Maybe the superwealthy haven't yet moved all their toxic waste

I'm thinking that once the superwealthy have transferred all their toxic securites from their portfolios to supersecret places, then there will be a major drop.

:shrug:

[Karenina]

71. Supersecret??? They will swap their toxic paper

wit da U.S. gubmint, leaving the taxpayers holding the bag. And you're correct, that process is not yet completed.

[DemReadingDU]

85. Oh yeh, that makes more sense

:P


I needed to pickup my grandkids, and wasn't clearly thinking earlier. Of course the wealthy must first swap their toxic stuff for good stuff, then move the good stuff, to some foreign country?, where nobody else can touch it.

[Pale Blue Dot]

30. Layoffs 7/9

At least while school is out, I'm going to try to make this a daily feature: One spot to consolidate all of the days layoff news. Let me know if you find this useful. There were several layoffs in the news in the past 24 hours:

AirTran - Atlanta - 500 jobs

AirTran has confirmed that they are removing nearly 500 positions this fall.
AirTran plans on disposing of 180 pilots and 300 flight attendants on Sept. 6, 2008, in a mix of layoffs and voluntary departures. As of now, AirTran has 1,450 pilots and 2,000 flight attendants.

They said the largest effect of the layoffs will be felt in Atlanta, their largest hub.
http://www.wesh.com/news/16814060/detail.html

Comair - New York & Kentucky - 500+ jobs

Comair announced Tuesday that the airline will layoff more than 500 employees.

Officials say the layoffs will happen once 14 of its 50-seat regional jets are taken out of service this fall.

Among the employees affected are 300 pilots and 220 flight attendants.

Comair has two flight operations centers, one at the CVG airport in Northern Kentucky and another in New York City.

The majority of the layoffs will happen in New York because that's where most of the planes will be pulled from service.
http://www.kypost.com/content/wcposhared/story.aspx?content_id=6ab6ffba-d7f1-412b-bc33-079b01383139

Columbia Falls Aluminum - Columbia Falls, Montana - 124 jobs

COLUMBIA FALLS, Mont. (AP) - Columbia Falls Aluminum expects to lay off about 125 hourly workers when it shuts down a pot line later this month.

Soaring power prices are the main reason that CFAC officials announced a curtailment in aluminum production at the plant this spring. The company gave a 60-day notice of pending layoffs on May 21 and plans to start laying people off over an 11-day period starting on July 21.

CFAC spokesman Haley Beaudry says salaried workers will also be laid off.

Beaudry says shutting down one pot line can leave between 120 and 160 people out of work.
http://www.montanasnewsstation.com/Global/story.asp?S=8641881

Siemens - Knoxville, TN - 300(?) jobs

Layoffs announced Tuesday within Europe's largest engineering company could have an impact on East Tennessee.

Siemens AG plans to eliminate nearly 17,000 jobs worldwide.

Currently Siemens Medical Solutions employs 300 people in Knoxville.

A spokesperson from the company says administrative costs are too high to withstand the current economy.

There are about 15 administrative positions in Knoxville that could be at risk.
http://www.volunteertv.com/home/headlines/24080574.html

Hartford Public Library - Hartford, CT - 40 jobs

HARTFORD, Conn. -- A group of Hartford Public Library employees have voted to take pay cuts and work fewer hours in the hopes of preventing layoffs.

Last week, the city announced an $870,000 shortfall in the library's budget and said there would be about 40 layoffs by August.

Full-time and part-time union employees voted 42-4 on a new contract Monday night. The changes should save about $230,000 but it's unclear how much that will help.
http://www.nbc30.com/news/16823687/detail.html

Emergency Medical Services - Ocala, FL - 233 jobs

OCALA - Marion County's Emergency Medical Services Alliance took another formal step toward extinction Monday, notifying the state it will lay off 233 workers Sept. 30.

EMSA, which has been the county's ambulance service provider for the past five years, is going out of business at the end of the fiscal year, after the city of Ocala, Munroe Regional Medical Center and Ocala Regional Medical Center dropped out of the alliance...

All the EMSA workers were eligible to apply for positions with Marion County Fire Rescue. As of Tuesday, the county had received 366 applications for 238 positions, said Fire Rescue spokeswoman Heather Danenhower. Some EMSA workers applied for more than one position, Danenhower said, resulting in the large number of applications.

Of the available positions, 48 are single-certification, meaning they will be filled by people who are physically unable to become firefighters. The remainder will be dual-certification, meeting the county requirement that emergency medical technicians and paramedics also be trained as firefighters. Those who are not already trained will have to complete firefighter training within three years.
http://www.ocala.com/article/20080709/NEWS/807090328/1025/NEWS&title=Notice_of_233_EMSA_layoffs_a_legal_formality

North Hawaii Community Hospital - Hawaii - 460-480 jobs

North Hawaii Community Hospital officials are trying to stave off a financial crisis, but they are expected to announce employee layoffs today as part of a turnaround plan.

Contracts of three administrators already have been terminated...

Comer developed a plan calling for a 15 percent reduction in areas affecting the bottom line, which includes the 460 to 480 employees, Dunne said. He said the 40-bed hospital "is overstaffed according to national hospital standards."

Dunne said the employees "are a wonderful group of people. Part of the reason it's taking so long is we're agonizing over every person in one of these layoffs. We're saying, as opposed to cutting a person, can we maybe job share?"
http://starbulletin.com/2008/07/09/news/story03.html

Again, please leave comments about whether this is useful, how the format could be improved, etc.

[burf]

34. This is interesting

The normal reporting of job data comes and goes, then revised, usually downward, and then promptly forgotten. In addition, how many of these were decent paying positions that people who are being dumped will have to take service sectors jobs that are part time, no benefits, lower paying gigs? I think it was Mike Whitney that wrote a while back that something like 29% of the new jobs created were waitstaff and bartender jobs. The smoke they are trying to blow up our buts is ridiculous. Then their willing accomplices in the corporate media just repeat the standard line. Strong dollar, free trade, short and shallow recession if there is even one happening. It makes a persons head hurt. Sorry, I just had to get that out!

[UpInArms]

35. I think it's a great daily post of information

and a very nice and easily followed format.

Thanks Finnfann!

:thumbsup:

[Dr.Phool]

36. Thanks, I just kicked the Ocala EMS link to a friend.

She's running for State Senate, and parts of Ocala and Marion County are in her district.

[abelenkpe]

37. This is fabulous

Please keep it up. thanks!

[Tansy_Gold]

48. Great report! Keep it up!

One line from the first notice jumped out at me.


"...plans on disposing of 180 pilots and 300 flight attendants..."

I'm sure it's just a freudian slip, but don't you sometimes get the feeling that these employers really do think of employees as, well, disposable?



Tansy Gold, who is not

[UpInArms]

50. Adding to your list: Student Loan to cut 174 jobs in a bid to reduce costs

Student Loan to cut 174 jobs in a bid to reduce costs

(Reuters) - The Student Loan Corp, a unit of Citigroup Inc's Citibank N.A., said it will cut 174 jobs to reduce costs in a difficult student lending environment.

Of the total job cuts, 146 positions will be with Student Loan while an additional 28 positions will be at Citibank, the company said in a statement.

Most of the jobs will be discontinued in August 2008.

Recently, the Stamford, Connecticut-based company suspended lending at certain schools and withdrew from the Federal Consolidation Loan market because of market turmoil and federal legislation.

In April, the U.S. House of Representatives approved a bill calling for federal intervention to stabilize the student loan market amid turmoil brought on by the mortgage crisis.
http://www.reuters.com/article/bondsNews/idUSBNG10612920080709

[TalkingDog]

61. As NASCAR goes, so goes the world.....

http://www.nytimes.com/2008/07/08/sports/othersports/08nascar.html

While I'm not a fan. I can't say the same for my mother or the Spousal Unit. It gave them a point of common discussion where I didn't have to participate...Yay me!

This has been the SU's newest interest. This is a local team. 71 people laid off.

It seems that the NASCAR officials fell prey to the same short sighted policy making as the Beltway leaders....it must be in the water..... and structured the rules so that those with money could make a lot more money, go on to develop better, faster cars. Thereby winning more races and gaining more sponsors, thereby making more money and etc. Leaving the increasingly marginalized teams suffering for sponsorship.

I can see this becoming more common as sponsorship and ticket purchases dry up.

[burf]

63. I read yesterday that the Navy

is not going to renew with Dale Jr's Nationwide Series team next year.

[wordpix]

74. no doubt about it, green collar jobs and the New Apollo project needed

[UpInArms]

81. Adding to the List: Northwest Airlines to cut 2,500 jobs

Northwest Airlines to cut 2,500 jobs

MINNEAPOLIS - Northwest Airlines Corp. said on Wednesday it will cut 2,500 jobs because of high oil prices, and will soon begin charging $15 to check luggage and up to $100 to redeem a frequent-flier award ticket.

The airline said it expects the new fees to add $250 million to $300 million a year in revenue.

Northwest said the job cuts — which represent about 8.3 percent of its work force — will include front-line and management workers. It said it will start with voluntary departures and leaving open jobs unfilled before moving to furloughs to reach the 2,500 total.

Northwest had said previously it would have fewer workers after it cuts 8.5 percent to 9.5 percent of mainline flying in the fourth quarter of this year. It has said overall capacity would shrink 3 percent to 4 percent because it is adding regional seats. As of the end of 2007, Northwest employed about 30,000 people.

President and Chief Executive Doug Steenland said Northwest's fuel costs have more than doubled in the past year.

"These reductions are the direct result of our extraordinary fuel costs and the necessary actions we must take to right-size our airline and eliminate unprofitable flying," Steenland said in a written statement.
http://news.yahoo.com/s/ap/20080709/ap_on_bi_ge/northwest_job_cuts?_ylt=As4uDYvVzYTmy7kv43cW5Upv24cA

[UpInArms]

52. Morgan Stanley cuts targets on retailers

http://www.reuters.com/article/ousiv/idUSLAU95141920080709

(Reuters) - Retailers may have a challenging 2009 as sales at its domestic stores continue to fall and in the absence of a stimulus like this year's tax rebates, analysts at Morgan Stanley said, as they lowered their price targets and 2009 earnings estimates across the sector.

Morgan Stanley cut its 2009 earnings-per-share estimates by 3 percent, on average, and price targets by 8 percent.

Decline in home values, rising unemployment, higher food and fuel costs, and a reduction in the level of construction spending - all point toward continued pressure on retailers through the end of 2008, Morgan Stanley said in a note to clients.

"While we believe that around $15 billion of stimulus checks will make it into retail sales and may provide a modest boost to retailer earnings, the checks are insufficient to offset macro headwinds into 2009," Morgan Stanley said.

The stimulus will provide some relief in the second and third quarters, but will not follow through to 2009, it added.

...more...

[Ghost Dog]

59. Is the war against Iran on hold?

Tehran is to allow foreign investors, in what might be interpreted as an overture to the West, to acquire full ownership of Iran's State enterprises in the context of a far-reaching "free market" style privatization program.

With the price of crude oil at 140 dollars a barrel, the Iranian State is not in a financial straightjacket as in the case of most indebted developing countries, obliged by their creditors to sell their State assets to pay off a mounting external debt.

What are the political motivations behind this measure? And why Now?

Several Western companies have already been approached. Tehran will allow foreign capital "to purchase unlimited shares of state-run enterprises which are in the process of being sold off".

While Iran's privatization program was launched during the government of Mohammed Khatami in the late 1990s, the recent sell-off of shares in key state enterprises points to a new economic design. The underlying measure is far-reaching. It goes beyond the prevailing privatization framework applied in several developing countries within America's sphere of influence:

"The move is designed to attract greater foreign investment and is part of the country's sweeping economic liberalization program.

Iran will no longer make a distinction between domestic and foreign firms that wish to purchase state-run companies as long as the combined foreign ownership in any particular industry does not exceed 35%. ... As an example, a foreign firm may purchase an Iranian steel company but it would not be allowed to buy every business enterprise in Iran's steel industry.

Among the new incentive measures announced, foreign firms may also transfer their annual profit from their Iranian company out of the country in any currency they wish." (Iran to Allow 100% Foreign Ownership, Press TV, June 30, 2008)

It is important to carefully analyze this decision. The timing of the announcement by Iran's Privatization Organization (IPO) coincides with mounting US-Israeli threats to wage an all out war against Iran.

Moreover, the divestment program is compliant with the demands of the "Washington Consensus". The International Monetary Fund (IMF) has confirmed, with some reservations, that Tehran is committed to a "continued transition toward a viable and efficient market economy" while also implying .that the building of "investor confidence" requires an acceleration of the privatization program.

/... http://www.globalresearch.ca/index.php?context=va&aid=9501

[Robbien]

65. FORTUNE Global 500 List; Only 153 US companies on list (6 of top ten are oil companies)

NEW YORK, Jul 09, 2008 (BUSINESS WIRE) -- FORTUNE announced today that only 153 U.S. companies have made the FORTUNE Global list, the lowest in over a decade.

Wal-Mart Stores sustained the top spot on the latest FORTUNE Global 500 list after a nearly 8% increase in revenue--remaining the only retailer in the top ten. Wal-Mart was followed by a close second, Exxon Mobil (U.S.); No. 3 -- Royal Dutch Shell (Netherlands); No. 4 -- BP (Britain); No. 5 -- Toyota Motor (Japan); No. 6 -- Chevron (U.S.); No. 7 -- ING Group (Netherlands); No. 8 -- Total (France); No. 9 -- General Motors (U.S.); and No. 10 -- ConocoPhillips (U.S.).

. . .

Brazil, Russia, India, and China all came up winners this year, due to the inflow of cash from pumping oil and mining metals. But China is stealing the show with an unprecedented total of 29 companies on the list. That's as many as Italy, Spain, and Australia combined.

Where the economy has been the weakest, companies have suffered--particularly those in retail and those no longer bolstered by subprime lending in the States. Bear Stearns, Nike, and the Gap are off the list. Sanyo (No. 459) plunged 103 spots and Motorola fell to No. 200 from No. 143. Meanwhile, Washington Mutual landed at No. 318 and Countrywide (recently acquired by Bank of America) at No. 352, each dropping about 70 spots.

http://www.marketwatch.com/news/story/fortune-global-500-list-confirms/story.aspx?guid=%7B0200CE5A-85CB-4F45-9DC0-A9374DEC6036%7D&dist=hppr

[Robbien]

66. Toxic CDOs Given Up for Dead Coming to Life With Pension Funds.

“Collateralized debt obligations that helped drive banks to $400 billion of writedowns and credit losses are finding buyers under a different name: Re-Remics. Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and at least six other firms are repackaging unwanted mortgage bonds as sales of CDOs composed of asset-backed securities fall to less than $1 billion this year from $227 billion in 2007 because of the global credit crunch. Re-Remics contain parts that are structured to guard against higher losses on underlying loans than most CDOs, allowing holders to sell or retain other sections at lower prices that can translate to potential yields of more than 20%.”

http://seekingalpha.com/article/84275-cdos-are-back-housing-tracker

Now Goldman etal are setting out to raid pension plans selling CDO's under a fancy new name. Pension plans = sheep to the slaughter

[DemReadingDU]

86. This is criminal

That's my pension they're stealing, and spouse, all pensions

:mad:

[bill]

67. Whee!

Another exciting day on the street

[Dr.Phool]

68. So much for yesterdays sucker rally.

I left for a couple of hours to get clipped by the barber and Best Buy. I hope Best Buy is the next one to go under. Them and their 15% restocking fee.

They sold me a defective GPS, and claimed they tested it, and it was fine. They just lost a lot of future business.

[EconomyCollapsesInUS]

69. Sorry To Tell You....

Best Buy is not the one going under. In fact, they sound like they're in pretty good shape.

Circuit City on the other hand, might follow "The Good Guys" and the other electronics retailers which have come and gone.

[EconomyCollapsesInUS]

70. 200 Points Gone.....About 2,000 Points To Go!

I apologize for the Stock Bulls on this board, but I sincerely hope that we see the Dow in the 8,000's in the next couple of months.

[Dr.Phool]

72. You won't find many bulls here.

However on occasion, you can find a little bullshit.:evilgrin:

[Karenina]

73. Please elucidate your position and opinion.

We like to discuss things in these parts! :hi: Welcome to DU!

[EconomyCollapsesInUS]

75. My Opinion Is That We're SCREWED!!

Of course, I've been saying that for about 7 years, and so far, it hasn't come to pass.

Far too much smoke, and too many mirrors.

[Doctor_J]

76. My pool entry of Jul 31 is looking like a winner

Sorry all. Of course I am still in the market, so it hurts when I laugh at you all

[Karenina]

78. I need a new date.

August 8th popped into my mind as I read your post. ANNE!!!!!

[skoalyman]

79. not a purdy day

DJIA
11,147.44 -236.77 2.08%
the rest of the week should be interesting who knows we might see our ole friend 10,ooh.0uch by Friday oils also creeping back up only a penny today
:popcorn:

[kineneb]

82. got that date already...

but you can share...
something about the numbers 08/08/08 that seemed...ominous?

[UpInArms]

80. fugly numbers and blather

Dow 11,147.44 236.77 (2.08%)
Nasdaq 2,234.89 59.55 (2.60%)
S&P 500 1,244.68 29.02 (2.28%)
10-Yr Bond 3.834% 0.046

NYSE Volume 5,221,624,000
Nasdaq Volume 2,317,125,000

4:20 pm : Stock market bulls are not happy with the market's performance on Wednesday. Stocks plummeted, led by weakness in financials and tech, giving up the market's entire advance made in the previous session. News was slow, with only one major company reporting earnings and no economic reports.

The financial sector struggled, falling 5.2% -- which is a large portion of Tuesday's 5.7% advance. There was not a specific item for the decline, although selling intensified as traders became disappointed that the sector was unable to maintain its previous gains. Weakness was broad-based, but the thrift and mortgages group (-11%) was hit especially hard as Fannie Mae (FNM 15.35, -2.27) and Freddie Mac (FRE 10.38, -3.08) got clipped. Traders are concerned about the current capital position of both companies.

The tech sector -- which is the largest sector -- also posted a steep decline, with weakness in large-cap names. Cisco (CSCO 21.56, -1.32) acted as the largest drag after UBS said that Cisco faces challenges due to slowing sales in the U.S. and Europe. UBS cut its price target on CSCO to $25.50 from $27.00.

Crude oil prices (-0.4% at $135.50) failed to rally on a seemingly bullish oil inventory report, spurring a 2.1% decline in the energy sector. The government's weekly report showed a larger-than-expected drop in inventory levels. Crude prices traded in a choppy manner after the report, eventually falling into negative territory.

Defensive investments outperformed on a relative basis. Utilities rose 0.9%, while consumer staples (-0.6%) and health care (-0.4%) fell by relatively small amount. On a related note, Treasuries saw some buying interest, with the 10-year note rising 18 ticks, sending its yield down to 3.81%.

The materials sector also outperformed on a relative basis with a loss of 0.8%, although the end result was well below its session high when it was up 2.8%. The sector benefited from a 3.7% rise in steel stocks. UBS upgraded Nucor (NUE 65.59, +2.43) and Steel Dynamics (STLD 33.21, +1.51) to Buy from Neutral. UBS feels that North American steel stocks are oversold.

In earnings news, Dow component Alcoa (AA 31.51, -0.82) marked the start of second quarter earnings season with its report after Tuesday's close. The aluminum company reported a drop in earnings due to high energy costs, but the results met Wall Street's forecast. DJ30 -236.77 NASDAQ -59.55 NQ100 -2.8% R2K -2.8% SP400 -1.4% SP500 -29.01 NASDAQ Adv/Vol/Dec 800/2.28 bln/2012 NYSE Adv/Vol/Dec 1072/1.49 bln/2093

[ozymandius]

83. Thank you for picking up the slack.

I've been away for long periods during the day. Of course when I read the word 'fugly' I had to ask, "Whaaa...?"

But Lo and Behold those are some fugly numbers. And sooner that I expected too. The sucker rally, I thought, would hang on for at least another day. GE is expected to report its earnings on Friday. If numbers were to take a dive then surely it would wait for that revelation. Alas...

See you in the morning.

:hi:

[UpInArms]

84. glad to know that you are holding up the other end

:yourock: