STOCK MARKET WATCH, Monday December 3, 2007

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday December 2, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 415 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2512 DAYS
WHERE'S OSAMA BIN-LADEN? 2234 DAYS
DAYS SINCE ENRON COLLAPSE = 2195
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 November 30, 2007

Dow... 13,371.72 +59.99 (+0.45%)
Nasdaq... 2,660.96 -7.17 (-0.27%)
S&P 500... 1,481.14 +11.42 (+0.78%)
Gold future... 789.10 -13.20 (-1.67%)
30-Year Bond 4.40% +0.05 (+1.24%)
10-Yr Bond... 3.97% +0.03 (+0.81%)






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. Watch out for those futures charts!

They look pointy. Could put an eye out.

[ozymandius]

2. Market WrapUp: The Dow Theory Update

BY TIM W. WOOD

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

[ozymandius]

3. Today's Reports

10:00 AM ISM Index Nov
Briefing Forecast 51.5
Market Expects 50.5
Prior 50.9

5:00 PM Auto Sales Nov
Briefing Forecast 5.1M
Market Expects 5.2M
Prior 5.1M

5:00 PM Truck Sales Nov
Briefing Forecast 7.0M
Market Expects 7.1M
Prior 7.1M

http://biz.yahoo.com/c/ec/200749.html

[UpInArms]

34. U.S. Nov. ISM manufacturing index 50.8% vs 50.9% in Oct. (below concensus)

01. U.S. Nov. ISM manufacturing index 50.8% vs 50.9% in Oct.
10:01 AM ET, Dec 03, 2007 - 34 seconds ago

02. U.S. Nov. ISM manufacturing index below 51.0% consensus
10:01 AM ET, Dec 03, 2007 - 34 seconds ago

[ozymandius]

4. Oil prices rise in Asian trading

SINGAPORE - Oil prices rose Monday amid speculation that OPEC may not decide to boost output this week after last week's sharp price drop.

Crude oil contracts tumbled last week on expectations that members of the Organization of Petroleum Exporting Countries will agree at a meeting Wednesday to raise production to help ease record-high oil prices. That sent prices to their lowest level Friday since Oct. 25 — quite a turnaround from the start of that week when prices were approaching $100 a barrel.

-cut-

Light, sweet crude for January delivery gained 91 cents in electronic trading on the New York Mercantile Exchange midafternoon in Singapore. The contract fell $2.30 to settle at $88.71 a barrel Friday.

In recent days, several OPEC ministers have said their nations are ready to boost oil output to bring down high oil prices. Analysts speculate that the cartel will boost production by anywhere from 500,000 to 1 million barrels a day.

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

[UpInArms]

18. Oil prices fall ahead of OPEC meeting

http://news.yahoo.com/s/ap/20071203/ap_on_bi_ge/oil_prices;_ylt=AhkooVtroRpZDsFFUISUu62oOrgF

Oil prices fell about $1 a barrel Monday in a volatile market on speculation that OPEC may still boost output at its meeting this week, despite last week's sharp price drop.

Light, sweet crude for January delivery was down $1.01 to $87.70 in electronic trading on the New York Mercantile Exchange midday in Europe. Earlier Monday, the contract had traded as high as $89.94. On Friday, it fell $2.30 to settle at $88.71 a barrel.

In London, January Brent crude dropped 99 cents to $87.27 a barrel on the ICE Futures exchange.

Crude oil contracts tumbled last week on expectations that members of the Organization of Petroleum Exporting Countries will agree at a meeting Wednesday to raise production to help ease high oil prices. That sent prices to their lowest level Friday since Oct. 25 — quite a turnaround from the start of that week when prices were approaching $100 a barrel.

"With oil prices having since receded and comments from some OPEC officials quite noncommittal on what OPEC may or may not do, I think maybe there's just a bit more caution coming into the market," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.

...more...

[ozymandius]

5. Wall Street eyes jobs, retail sales data

NEW YORK - Wall Street's newfound confidence that interest rates are headed lower may not be enough to fuel a December rally if the economy looks like it's weakening.

This week's reports on the job market and retail sales, along with readings on the manufacturing and service sectors, will be key in determining how well the economy is weathering a housing market that most experts predict will keep deteriorating well into the new year.

The stock market heads into the final lap of 2007 having posted a 3.01 percent rise in the Dow Jones industrial average last week, a 2.81 percent gain in the Standard & Poor's 500 index, and a 2.48 percent advance in the Nasdaq composite index.

It was the best weekly point gain for the Dow — the blue chips rose nearly 391 — in more than four years. The advance was driven by hints of an upcoming rate cut from Federal Reserve officials and news that Citigroup Inc., Freddie Mac and E-Trade Financial Corp. were able to raise cash to offset some of their debt.

-cut-

Data so far have suggested respectable post-Thanksgiving sales, but investors are concerned that shoppers will be hesitant due to still-lofty gas prices and sinking home prices. Wall Street's also worried that sales have been decent so far only because prices have been sharply discounted, which is good for consumers but bad for companies' profits.

Consumer spending relies heavily on employment, so Wall Street will also be closely eyeing, as always, the Labor Department's monthly report on the job market. On Friday, economists surveyed by Thomson/IFR expect the report to show November payrolls rose solidly, but by a smaller amount than in October, and that the unemployment rate ticked up to 4.8 percent from 4.7 percent.

http://news.yahoo.com/s/ap/20071202/ap_on_bi_ge/wall_street_week_ahead

[AnneD]

29. Morning Marketeers.....

:donut: and lurkers...Looks like Wall Street has finally bought a vowel. Too bad the vowel doesn't show up on the board.x(

Who knows how long it will take them to figure out the jobs numbers are as bogus as the 2000 presidential election results. Most of the regulars to this thread know that the numbers they like to tout are the NEW JOBLESS CLAIMS. And you are carried in those numbers as long as you draw an unemployment check. Once you are dropped from the unemployment roles-problem solved-for the government. You have to dig deeper in those stats to get a true picture. There are folks here on the board more clever than I that have posted before on this subject that have mentioned fact about the number of new jobs is less than the population, the wages of jobs if they find them are much less, etc. etc. I hope they can chime in, but suffice it to say that this 'jobless recovery' has gone the way of other political myths like....trickle down economics, deficits don't count, guns and butter, and the WIN button.

I remember a time not long ago when a layoff notice would make a company's stock drop a few dollars and nick the sector for a few points. Today, Wall Street cheers and rewards the company for 'cutting the fat'. Well I hate to be the one to break it to these Bozos, but we cut all the fat long ago, we have already cut most of the muscle, and now are amputating the bone. You can make money shuffling paper, like technical traders are want to do-but if you haven't got a product, you don't have a trade, you just have paper. You cannot totally overlook conventional trades, based on strong business foundations. I hope these guys wake up soon, for their sake. The financial sector is starting to take some hard hits-but I believe there is more to come, and in other sectors. This will not go away in a few months either.

For more fact on unemployment, please be sure to check the website...

http://www.bls.gov/

there's good info there, you just have to dig a bit.

Happy hunting and watch out for the bears.

[ozymandius]

6. Citi economist sees another 100 bps in Fed rate cuts

SINGAPORE (Reuters) - The Federal Reserve will cut interest rates by 100 basis points before June to help the housing market, Citigroup's chief economist, Lewis Alexander, said on Monday.

Alexander, who worked at the Fed before joining Citi, also said Asian economies would probably suffer only a modest slowdown as a result of the U.S. housing turmoil as the spillover effect from housing was much smaller than from sectors such as information technology.

-cut-

Citi, he said, expected the Fed to cut its Fed funds rate by 25 basis points when it meets later this month and by 50 basis points in the first quarter of 2008. The final 25 basis-point cut would probably take place in the second quarter.

Alexander said the Fed would not be too concerned that the drop in the dollar would be inflationary. Studies carried out over the years had shown that the dollar's value had little impact on consumer prices in the United States, he said.

http://news.yahoo.com/s/nm/20071203/bs_nm/usa_economy_citi_dc

Alexander is obviously otherworldly. He purchases neither food nor energy.

[AnneD]

36. At first I thought...

they might be smoking something funny but not inhaling, thus not requiring food and explaining the bogus numbers. I have since concluded that they are dropping acid and just tripping. That would explain the otherworldly nature of the report. They get the acid, we get the bad trip.:spray:

[feminazi]

60. I don't know much

but even I know that's a crock.

"Alexander said the Fed would not be too concerned that the drop in the dollar would be inflationary. Studies carried out over the years had shown that the dollar's value had little impact on consumer prices in the United States, he said."

I agree with Anne...they're all on drugs.

[ozymandius]

7. Krugman: Innovating Our Way to Financial Crisis

The financial crisis that began late last summer, then took a brief vacation in September and October, is back with a vengeance.

How bad is it? Well, I’ve never seen financial insiders this spooked — not even during the Asian crisis of 1997-98, when economic dominoes seemed to be falling all around the world.

This time, market players seem truly horrified — because they’ve suddenly realized that they don’t understand the complex financial system they created.

-cut-

But what has really undermined trust is the fact that nobody knows where the financial toxic waste is buried. Citigroup wasn’t supposed to have tens of billions of dollars in subprime exposure; it did. Florida’s Local Government Investment Pool, which acts as a bank for the state’s school districts, was supposed to be risk-free; it wasn’t (and now schools don’t have the money to pay teachers).

How did things get so opaque? The answer is “financial innovation” — two words that should, from now on, strike fear into investors’ hearts.

http://www.nytimes.com/2007/12/03/opinion/03krugman.html?_r=1&oref=slogin

[Demeter]

13. I Thought the Currency Speculation That Bankrupted Barings Was Bad

but it was of limited scope. This mess is worse than Enron and its imitators, which did extend a bit beyond the US, but inflicted most of the damage here at home....

[antigop]

33. Hey, aren't you for globalization of capital? n/t

[Demeter]

35. Not Really

The only thing that gets "globalized" these days is pollution in one form or the other. Bad air, bad water, bad debt, bad business, bad ideas, etc.

[antigop]

37. Sorry, I forgot the sarcasm smilie. n/t

[Demeter]

38. No, You Prompted Some Thought There

no need to apologize.

[antigop]

31. Ah, yes, the wonderful "free market" and the wonders of limited regulation.

Yep. That ideology sure works, doesn't it?

[ozymandius]

8. Congratulations, Citizen! (so you invested $10k on January 22, 2001)

http://www.dailykos.com/storyonly/2007/12/2/131531/273

Back on 2001, right after Inauguration Day, $10,000 of your Social Security funds were placed in a special private personal magic pony account where it would enjoy the explosive benefits of the our surging prosperity, and the Longest Peacetime Terra-fightin' Expansion in HISTORY... History... history. All of this made possible by cutting taxes on the productive people at the top of the food chain and removing those regulations that prevented our financial institutions from using all their imagination in creating new ways to loan give... to give you money! We at the Treasury know there was some discussion about not going along with the president's plan, but I think you'll agree that what we've learned over the last seven years is that the president can do anything he wants and no one will do more than talk about stopping him. So we just did it! Say, why not send us a subpoena? That'd be a hoot!

Now, as we close in on the last year of this glorious wondertime, here's a quick report on how your outsourced, privately-managed fund has done.

-cut-

2007 – Boom! $11,795 is yours. Everyone who ever said the market wouldn't take care of this thing is proven wrong. Don't say those fund managers weren't worth the $90 million a year we've been paying them, just because they only match the Dow mix. Best of all, when you account for inflation, that's still a $201 gain in only six years. $34 a year. We're completely sure you don’t mind us putting $10K at risk for those kinds of gains.

-cut-

Sure, median family income was down about $2,000 from 2001 to 2004, but that was the bad times. We don't have the numbers yet, but we're sure it's soared since then, because as we all know, when the people at the top making their money off the stock market are doing well, that rising tinkle-down stream of Reaganomic voodoo raises all the little boats on a warm yellow tide. Sure, the median family is carrying more of the tax burden than they were back then. Sure, health care costs have destroyed most of the value of your savings. Sure, the average family is working more hours, carrying more debt, and seeing less return.

Laugh, rage, or weep... I don't know which to choose.

[TalkingDog]

14. That. Was. Awesome.

Thanks for the link.


My Favorite Master Artist: Karen Parker GhostWoman Studios

[KoKo]

44. Best Argument for preserving SS I've seen in awhile.

Puts it all into perspective, doesn't it.. :wow:

[CountAllVotes]

45. this is how I figured it myself

IRA has been out of the market since 2001. Gains were 5.75% for 3 years after this; abt. 5% for 2 years; now at 6.25% for another 4 years (until 2012).

This works out to be close to 6% per year over the past 6 years realizing a gain of abt. 35%, not a paltry >2%.

You are way better off at this point in time having your retirement funds in certificates of deposit at a place called a bank (or credit union).

:kick:

[JNelson6563]

48. Wonderful

Doesn't get anymore real than that. :toast:

Julie

[AnneD]

50. A truly great read.......

well worth your time. Kudos for that post Ozy-you da man.

[Emillereid]

52. A boring CD at 5% would have done better! I got out of equities a

few months ago - I just couldn't stand the volatility.

[Ghost Dog]

9. Global Markets

____

Asian Stocks Rise; Mitsubishi UFJ Leads Advance Among Banks

Dec. 3 (Bloomberg) -- Asian stocks rose for a third day, led by Mitsubishi UFJ Financial Group Inc. and National Australia Bank Ltd., on speculation the Federal Reserve will cut U.S. interest rates to bolster growth in the world's largest economy.

Sun Hung Kai Properties Ltd. led gains by developers in Hong Kong as lower borrowing costs would spur demand for real estate. Hong Kong's interest rates typically move in step with those in the U.S. because the currency is pegged to the dollar. Banks also climbed on speculation U.S. Treasury Secretary Henry Paulson will reach an agreement to stem further credit-market losses.

``There's a perception the Fed is getting ahead of the curve and as a result the U.S. economy won't fall into recession,'' said Troy Angus, who helps manage the equivalent of $3.5 billion at Paradice Investment Management Ltd. in Sydney.

The MSCI Asia Pacific Index gained 0.2 percent to 162.21 at 6:33 p.m. in Tokyo. Japan's Nikkei 225 Stock Average fell 0.3 percent to 15,628.97, and the broader Topix was little changed. Most benchmarks across the region rose.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=ag24lxfXgP48&refer=asia
____

Tokyo stocks take a breather

The Japanese market ran out of steam on Monday, with shares closing lower after a mini-rally last week that pushed the benchmark Nikkei up 5.3 per cent. Sentiment was subdued ahead of a series of US economic data points and by a dearth of corporate activity domestically.

The Nikkei 225 fell 0.3 per cent to close at 15,628.97, while the broader Topix index was flat at 1,532.16.

Exporters were marked lower as the yen strengthened marginally against the US dollar.

/... http://news.yahoo.com/s/ft/20071203/bs_ft/fto120320070358016332;_ylt=AmBtRfOnkbbpBhmHPZcjfmX2ULEF
____

European stocks flat as miners offset media deals
Mon Dec 3, 2007 5:16am EST

PARIS, Dec 3 (Reuters) - European stocks were little changed in early trade on Monday, pausing after a three-session winning run as falling mining shares offset the positive impact of deals in the media sector.

/... http://www.reuters.com/article/marketsNews/idCAL032041120071203?rpc=611
____

[Ghost Dog]

10. ECB fears inflation more than slowdown

Investors discover this week whether turbulent trading conditions and tight money markets have influenced the interest rate-setting committees of both the Bank of England and the European Central Bank.

Jean-Claude Trichet and his fellow governing council members at the ECB will continue to be more concerned about inflation when they meet on Thursday. Consumer price data last week showed the eurozone consumer prices index rose to3 per cent in November, the highest level since 2001.

This will have disappointed interest rate doves, as most analysts now believe eurozone rates will be on hold at 4 per cent well into next year, in spite of signs of slowing growth.

"The eurozone economy has entered a difficult period in which rising inflation will prevent the ECB from responding quickly to a further slowdown in activity," says Jonathan Loynes at Capital Economics.

No change is expected by the Bank of England, but a case can be made for a quarter-point cut to 5.5 per cent, says Global Insight's Howard Archer. "The bank does not want to see too sharp a slowdown in growth, and is very aware of the danger of this occurring."

In parliamentary testimony last week, Bank of England governor Mervyn King said the UK economy faced an uncomfortable short-term future.

/... http://news.yahoo.com/s/ft/20071202/bs_ft/fto120220071158286232;_ylt=Aq3cc.VvMD06f6Q6ITaD8HH2ULEF

[Ghost Dog]

11. Fed seeks to ease money market strains

The Federal Reserve is considering new steps to make liquidity more readily available to financial institutions, in the hope of easing strains in the money market.

Analysts close to the Fed believe that a cut in the rate at which it lends directly to banks and steps to reduce the stigma associated with such borrowing are under active consideration. They believe the Fed could an-nounce plans to cut the discount rate at which it lends directly to banks by 25 basis points to 4.75 per cent.

That would halve the interest penalty on discount window borrowing compared to the main interest rate, the Fed funds rate, which is currently 4.5 per cent.

The reduction of the discount rate penalty could come before the next meeting of the Federal Open Market Committee on December 11 if credit market conditions remain highly stressed. Alternatively, the Fed may cut the discount rate by an extra 25 basis points over and above any reduction in the Fed funds rate at that meeting, the analysts said.

/... http://news.yahoo.com/s/ft/20071202/bs_ft/fto120220071557456267;_ylt=AqUCKCkcRCJazZihcbYdF_n2ULEF

[radfringe]

12. WHOA!!!! what happened to the crude oil futures

big drop(...incomparison to other drops)

[Demeter]

15. It's Called Reality

shaking out the speculators...

[radfringe]

16. shake harder... lol

[TalkingDog]

20. Unfortunately it won't keep the price of gasoline from going up.

Maybe short term, but in the long term the simple physics are: it is becoming more costly and more difficult to locate oil that does not need a lot of expensive refinement. In other words most of the light, sweet crude is gone. The rest, dark, sour stuff, needs more processing right out of the gate.

The lifespan of a rig used to be 25 years. After which it would be dismantled and rebuilt if a field was not tapped out. Now 25 years is the average age of a rig. The equipment and platforms are not being replaced. And like any piece of complicated machinery, you can keep repairing it piecemeal for quite a while before expenses outweigh the benefits of retiring it and starting over.

More money is going into exploration and processing procedures to try to eke out the last usable bits of crude from sand or shale.

The oil companies know this. So do the workers. They just aren't sure how to figure out how to do anything else. Cost/Benefit hasn't dented their waking consciousness at this point.

My Favorite Master Artist: Karen Parker GhostWoman Studios

[TrogL]

42. Maybe this had something to do with it

http://business.timesonline.co.uk/tol/business/economics/article2988001.ece

Dollar faces new sell-off if Gulf states end greenback pegs

Foreign exchange markets are on alert this week for the embattled dollar to face a further, severe sell-off after key talks between the Middle East’s Gulf states that could lead to them scrapping their currencies’ pegs to the greenback.

Rulers of the six nations of the Gulf Cooperation Council (GCC) meet today and tomorrow in the Qatari capital of Doha amid significant pressures to sever their currency ties to the falling dollar, which is fuelling record inflation in their countries.

[Zynx]

47. Quick explanation: $100 oil was ridiculous.

Long Explanation: $90 oil is also ridiculous and it should drop to at most $65.

[Warpy]

49. The spot market was seeing a bit of a panic

because they thought Stupid was going to start dropping bombs on Iran. We're very likely to see the same thing again. It seems every time the administration opens its collective piehole on how dangerous Iran is and how it needs to be blasted off the face of the earth all the oil futures traders start to panic. Go figure.

Expect the prices to normalize a little as weather gets warmer. There's little chance of major military action in that region in the summer. The people who live there are well acclimated. We're not.

However, expect the drums to start to thunder for war once again next fall, especially since the GOP needs to convince enough stupid, provincial people as it can that Iran is only minutes away from developing a full complement of ICBMs with nuclear warheads and must be stopped at all costs to drive prices sky high again.

We won't see anything approaching a normal spot market until the GOP is GONE, and with them the threat of another war that will fuck up the oil supply.

[UpInArms]

17. dollar watch

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

Last trade 76.049 Change -0.121 (-0.16%)

Dollar's Destiny Depends on NFPs

http://www.dailyfx.com/story/topheadline/Dollars_Destiny_Depends_on_NFP_1196662233957.html

Existing Home Sales, Durable Goods, Personal Income and Spending and Consumer Confidence numbers all missed their mark this week, but despite the dour economic news and the gloomy sentiment around the dollar, the greenback managed to gain 130bp on the euro and given the price action on Friday now looks more likely to reach 1.4500 rather than 1.5000. What caused this turn in price? The most important event to drive trade last week wasn’t on the economic calendar. Rather, it was the announcement by the Abu Dhabi investment authority that it was willing to inject 7.5 Billion in Citibank which caused a turn in sentiment providing a boost for the buck. The Abu Dhabi news suggests that foreign capital investment may not leave US but will rather be redirected into equities instead of fixed income assets. For the greenback which has been reeling partly on the fears of massive foreign capital outflows this was welcome news indeed.

Last week we noted that, “there is no doubt that the pair wants to target 1.5000 again … but it will have to do so with more substantial reasons than mere stop running.” This week the moment of truth may be upon us. The US calendar is chuck full of important data including ISM Manufacturing and ISM Non-Manufacturing surveys, both of which are expected to be softer than last month, though still above the 50 boom/bust line. Dollar’s destiny however, is quite likely to be determined by Friday’s NFP data. The bears argument has been predicated on the assumption of an imminent recession in the US, but until and unless the jobs data shows clear deterioration there is little evidence that the US economy is in serious trouble. Last Thursday’s weekly jobless claims which jumped by 10% certainly provide little cheer for dollar bulls, but the ultimate decision on the direction of the pair will be governed by next Friday’s data. If the NFPs can expand by 100K or more the talk of doom and gloom may be overdone.– BS.



...more...

US Dollar: What to Expect in December

http://www.dailyfx.com/story/bio1/US_Dollar__What_to_Expect_1196460784029.html

We are entering the last trading month of the year which usually draws out a lot of unique factors that can affect the demand for US dollars. A few weeks ago, we published a report on the seasonality of the US dollar and we found that based on 20 years of data, the dollar has a greater tendency to fall in the month of December (see report). These risks are higher this year with problems in the financial sector still plaguing the US economy; we could see another month of volatility because options are expiring and traders across different markets are divided on what to expect from the Federal Reserve. The futures market is currently pricing in a 100 percent chance of a quarter point rate cut with 42 percent of that probability in favor of a half point cut; in other words the odds for 50bp over 25bp is quickly nearing fifty-fifty. The dollar however was stronger across the board today and the main reason for that is the expectation that the Fed will come to the market’s rescue. However over the medium term their rescue efforts should be dollar negative and regardless of what the Fed decides to do, half of the market will be surprised. For the US dollar and the currency market this means one thing and that is volatility. Fundamentally, Federal Reserve Chairman Ben Bernanke has set the tone for trading last night when he reiterated the cautionary comments made by Fed Vice Chairman Kohn earlier this week. Bernanke told the markets that the relapse of funding problems has tightened credit conditions significantly and he believes that consumer spending could be particularly vulnerable this month given higher energy prices and mortgage payments, a weak housing market, and unfavorable volatility in equities. Today’s US numbers were mixed. Personal income and personal spending growth declined but the PCE deflator and Chicago PMI accelerated. Ultimately the bad news outweighed the good which is why rate cut expectations continued to rise. The Middle East Council meeting begins on Monday read our special report on what this could entail for the US dollar.

5 Central Bank Meetings Will Make for a Busy Trading Week in the FX Market
Five central bank meetings in the coming week will make it an exceptionally busy time in the foreign exchange market. The Bank of Canada, Reserve Banks of Australia and New Zealand, the European Central bank and the Bank of England will all be convening to discuss interest rates. No one is expected to make a move, but many could surprise with one. Now more than ever the upcoming interest rate decisions require close attention by anyone who may be interested in where currencies may be headed over the next few weeks. The comments made by the central bankers after their rate decisions can and will confirm or deny current market sentiment. The biggest impact may be on carry trades, which live and die by the expectations for interest rates. The Japanese economic calendar is pretty empty with only labor cash earnings, the leading economic index and the final figures for third quarter GDP due for release. Even if there were some meaningful surprises, the data should have a minimal impact on the Japanese Yen. Last night we had what could have potentially been very market moving Japanese data, but unfortunately the mixed reports failed to lift the Yen. National consumer prices were stronger than expected due to the rise in oil prices and housing starts improved. The unemployment rate remained unchanged but the job to applicant ratio fell to 1.02, reflecting the tough conditions that the Japanese economy still faces.

...more...

[UpInArms]

19. CDS trade strategy heaps pressure on US borrowers

http://www.reuters.com/article/bondsNews/idUSL3047328320071203?sp=true

LONDON, Dec 3 (Reuters) - A trading strategy in the credit default swaps market is contributing to higher borrowing costs for some companies in the U.S. investment-grade index and may be one way the credit crisis leads to an economic slowdown, analysts say.

Bear Stearns strategists point to an unusual pattern in CDS prices of 18 companies out of the 125 in the U.S. CDX investment-grade index: The cost of buying one-year to five-year default protection on these companies is about equal to or higher than for their 10-year protection.

Analysts Alberto Gallo, Abel Elizalde and Kunal Shah say a trading strategy popular among hedge funds and other investors in the CDS market is contributing to push up these companies' five-year spreads and thus increase financing costs.

Their analysis shows that the derivatives market and the real economy have become intertwined to such a degree that trading patterns can have an influence on companies' financial health.

"How are they (some companies on the index) going to refinance in 2008 if spreads are so high?" Gallo said. "It pushes them into expensive credit or no access to credit."

Market analysts are forecasting that defaults are likely to rise from historically low levels this year to 4 to 5 percent of U.S. high-yield, or junk-rated, corporate borrowers in 2008.

Spreads for companies in the high-yield, or junk, CDX index show a normal pattern for a market concerned about coming defaults, Gallo said. About eight have inverted yield curves, i.e. paying more for five-year than 10-year money, and those credits have five-year spreads of 700 basis points and higher. In the CDX investment-grade index, however, there are 10 names with inverted curves, and the inversion starts at five-year spread levels under 300 basis points.

...more...

[UpInArms]

21. Fed's Rosengren says foreclosures to get worse

http://www.reuters.com/article/bondsNews/idUSNAT00347520071203

NEW YORK, Dec 3 (Reuters) - The U.S. economy will grow "well below" potential in coming quarters, and the foreclosure crisis plaguing the housing and banking sectors is likely to worsen, a top Federal Reserve official said on Monday.

Eric Rosengren, president of the Boston Fed, said lenders and borrowers should work together to modify loans so as to avoid even greater pain than has already been felt.

Many subprime borrowers are "experiencing a very painful human toll," Rosengren said in prepared remarks to be delivered in Boston.

...more pap at link...

[DemReadingDU]

22. the TED spread

The willingness of banks to LEND TO EACH OTHER is truly measured by the TED spread.

The TED spread is the difference between 3-month LIBOR and 3-month Treasuries.

The significance of this spread is that it represents the spread between the rate charged for lending to a bank and the rate charged for lending to the government.

It effectively measures the perceived credit risk of banks relative to the government (the credit risk premium).

That spread generally indicates how much FEAR is in the banking system (about the banking system ITSELF).

Even though the media doesn't focus much attention on this indicator (AS IT SHOULD), it should not be dismissed or taken lightly. It is very serious.

The spread has risen sharply to 200 basis points now---very close to the peak it hit last August. Prior to that, the highest reading recorded was about 270 basis points in 1987.

You can bet that the Fed is watching this very closely.

You can find the rate for 3-month LIBOR and 3-month Treasuries at this link:
http://www.bloomberg.com/markets/rates/index.html

Written by Bernard on 2007-12-01 08:33:06
http://www.rgemonitor.com/blog/roubini/229674

[DemReadingDU]

23. more on the TED spread

To reinforce my earlier point about the great importance of watching the TED spread, this chart will demonstrate in stark visual form what I am talking about:
http://tinyurl.com/28zzsb



The spread is spiking rapidly upward right now to an extent not seen since the 1987 stock market crash.

The very strange thing is though: the stock market isn't crashing at all RIGHT NOW.

Hmmm, why is that? What do you think is the reason?

Written by Bernard on 2007-12-02 07:32:25
http://www.rgemonitor.com/blog/roubini/229948

[DemReadingDU]

24. Panzner: Off the Charts: Are We Headed for Another Crash?

12/3/07 Off the Charts: Are We Headed for Another Crash?
Michael Panzner

Commentators have compared the current upheaval in credit markets to the crisis that took place a decade ago, when hedge fund Long-Term Capital Management collapsed after numerous multi-billion-dollar leveraged bets all went wrong at the same time.

Yet, based on the spread between three-month U.S. dollar LIBOR, the rate at which banks offer to lend unsecured funds to each other, and U.S. Treasury bills of the same maturity, conditions are more akin to the chaos that developed around the time of the 1987 stock market crash.

http://seekingalpha.com/article/55983-off-the-charts-are-we-headed-for-another-crash

[UpInArms]

25. Fed's Rosengren says Libor surprisingly elevated

I guess he's been keeping his head in a dark place :eyes:

http://www.reuters.com/article/bondsNews/idUSNAT00347620071203

has been surprisingly elevated lately, making it reasonable to consider alternative benchmarks, Boston Fed President Eric Rosengren said on Monday.

Rosengren said it was curious that many mortgages were tied to the London Interbank Offered Rate (Libor), given that many borrowers didn't even know that rate existed.

Libor has spiked because capital has become scarce amid a banking crisis that began with rising mortgage defaults.

[DemReadingDU]

28. Makes you go, hmmm

Thanks for another link about the TED spread. It's possible that the TED spread has been linked in a previous SMW, but I don't recall reading about it.

[HCE SuiGeneris]

61. K & R for this information alone

Thanks for increasing my knowledge. Great stuff in this offshoot thread.

[UpInArms]

26. "bailing out the fat cats"

"The government is punishing people who were more responsible in the way they took out mortgages," said Peter Schiff, president of Euro Pacific Capital in Connecticut. "Of course they're going to be pissed."

Schiff also wonders how the government will pay for the bailout -- and said the looming November 2008 presidential election was likely behind its timing.

"They're trying to keep the you-know-what from hitting the fan until after the election," he said. "The rhetoric is 'We've got to help homeowners,' but the reality is it's designed to help the fat cats, Wall Street. It's bailing out the lenders."

[UpInArms]

27. Discover to take charge for Goldfish write-off

http://www.reuters.com/article/bondsNews/idUSWNAS357520071203

NEW YORK, Dec 3 (Reuters) - Discover Financial Services (DFS.N: Quote, Profile, Research), the credit card company spun off by Morgan Stanley (MS.N: Quote, Profile, Research) at the end of June, on Monday said it will take a charge to write off substantially all goodwill and other intangible assets of its Goldfish credit card business in Britain.

The business had goodwill and intangible assets of $422 million as of Aug. 31, Discover said. It will take the charge in the quarter that ended Nov. 30.

...more...

What's with the stupid names?

[TrogL]

53. How can you have goodwill on a credit card?

Everybody I know hates them with a passion. They drove me into bankruptsy. I dunno what it's like down there, but the Discover card is not widely accepted up here. Most places that do (eg. Zellers) have their own card they push at you right at the door. The Discover logo is on the door just so they can claim they accept pretty much anything.

[UpInArms]

30. A Vivisection of the US Economy - DU Post by Phoebe Loosinhouse

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x2393420

I call this a vivisection, since at the moment anyway, the economy is still breathing feebly, albeit on life support with the family members gathered.

Basic Premise : Alan Greenspan was and is a moron as are all the Republican supply siders and trickle downers who espoused and put into practice measures that for decades have favored corporations and the wealthy while cannibalizing the middle class and ending upward mobility as we know it.

Our real spending power is an illusion. Our economy as a whole is an illusion.

Deregulation was supposed to make goods and services cheap and affordable for the American consumer. Did you ever think 20 years ago that you would be spending HUNDREDS of dollars a month for telephone and television services? How about those utility costs - Boy, they really went WAAY down too, didn't they? And your health insurance went from double digits a month to triples with your employers paying less and less every year or picking a crappier provider every year. Fuel costs - they did a good job with that too, didn't they?

One basic premise of Greenspan and the supply siders was that the cost of money (interest rates) should be cheap.

...more well worth reading...

Wow - to think that there are some DUers that are so articulate and, well - brilliant and perceptive - I am honored to be in their presence.

hat's off to Phoebe Loosinhouse! :applause:

[ozymandius]

59. We need this.

One (1) Howard Dean to point a finger in the face of economic oppression is enough. More voices like this. Bravo!

[UpInArms]

32. Check-kiting process in progress: Fed adds $8.75 bln in reserves via overnight repos

http://www.reuters.com/article/bondsNews/idUSNYD00013520071203

NEW YORK, Dec 3 (Reuters) - The U.S. Federal Reserve said on Monday it added $8.75 billion of temporary reserves to the banking system through overnight repurchase agreements.

The Fed said the collateral accepted on the overnight repurchase was made up of solely of Treasuries. A total of $73.35 billion in bids were submitted for the overnight repurchase.

Pumping for the Piehole :eyes:

[AnneD]

39. It's pimping, UIA...

pimping for the piehole. The grammar police have spoken.:evilgrin:

[TrogL]

40. 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

2007-10-22 Monday, October 22 1.01926 USD
2007-10-23 Tuesday, October 23 1.03381 USD
2007-10-24 Wednesday, October 24 1.02987 USD
2007-10-25 Thursday, October 25 1.03381 USD
2007-10-26 Friday, October 26 1.03961 USD
2007-10-29 Monday, October 29 1.04745 USD
2007-10-30 Tuesday, October 30 1.04888 USD
2007-10-31 Wednesday, October 31 1.05307 USD
2007-11-01 Thursday, November 1 1.05296 USD
2007-11-02 Friday, November 2 1.06838 USD
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

Current values

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

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9988 0.9988 0.9968 0.9968 -0.0026 -0.26% 
CD.Z07 Dec 2007 0.9985 0.9985 0.9969 0.9970 -0.0026 -0.26% 
CD.H08 Mar 2008 1.0017 1.0020 0.9993 0.9999 -0.0042 -0.42% 
CD.M08 Jun 2008 1.0125 1.0130 1.0125 0.9995 -0.0045 -0.45% 
CD.U08 Sep 2008 0.9997 1.0002 0.9997 0.9993 -0.0046 -0.46% 
CD.Z08 Dec 2008 0.9993 0.9993 0.9993 0.9991 -0.0046 -0.46% 
CD.H09 Mar 2009 1.0005  1.0000 0.9989 -0.0046 -0.46% 

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

Market              Open    High     Low    Last   Change     Pct 
AUSTRALIAN $/CANADIAN $ (NYBOT:AS)
AS.Z07 Dec 2007 0.87540 0.87540 0.87540 0.88000 +0.00145 +0.16%  
AUSTRALIAN $/US$ (NYBOT:AU)
AU.Z07 Dec 2007 0.88150 0.88150 0.87600 0.87995 -0.00225 -0.26%  
CANADIAN $/JAPANESE YEN (NYBOT:HY)
HY.Z07 Dec 2007 109.02 109.02 109.02 110.84 +0.92 +0.83%  
EURO/AUSTRALIAN $ (NYBOT:RA)
RA.Z07 Dec 2007 1.68450 1.68450 1.68450 1.66385 -0.01000 -0.60%  
EURO/BRITISH POUND (NYBOT:GB)
GB.Z07 Dec 2007 0.71310 0.71395 0.71280 0.71395 +0.00145 +0.20%   
EURO/CANADIAN $ (NYBOT:EP)
EP.Z07 Dec 2007 1.47000 1.47000 1.47000 1.46415 -0.00600 -0.41%  
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.Z07 Dec 2007 162.04 162.14 161.58 161.58 -0.77 -0.47%   
EURO/US$ (LARGE) (NYBOT:EU)
EU.Z07 Dec 2007 1.4832 1.4836 1.4832 1.4640 -0.0123 -0.84% % 

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

The December Canadian Dollar was lower overnight as it extends last week's breakout below the 38% retracement level of this year's rally crossing at 100.75. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If December extends the decline off November's high, the 50% retracement level of this year's rally crossing at 97.76 is the next downside target. Closes above the 20-day moving average crossing at 102.78 would temper the near-term bearish outlook in the market. First resistance is the 10-day moving average crossing at 100.90. Second resistance is the 20-day moving average crossing at 102.78. First support is the overnight low crossing at 99.60. Second support is the 50% retracement level crossing at 97.76.

Analysis

I saw a thread yesterday warning that the Gulf states could decouple oil from the greenback. If so I would expect another market panic stampeding the loonie back up again.

Currently it's around prime, pretty much where it belongs, at least for the moment.

Canadian banks have released all their figures concerning their exposure to the US banking/housing crisis. Nobody went really out on a limb so nobody's hurting really badly. Near as I can make out, BMO's about the worst off.

[TrogL]

43. Gulf oil greenback thread

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3087079

[DemReadingDU]

41. Citibank: Limits $2000 outgoing Inter Institution Transfers

Add Citibank's urging corporates not to borrow with preventing retail from transferring more than $2,000 a day and they must have really, really ugly liquidity problems.

THIS IS VERY WORRYING!

This was the text of Citi's e-mail to depositors:

Dear Customer:

On December 20, 2007, the User Agreement for Inter Institution Transfers will change. Here what's changing:

After a review of our security practices, the daily limit on Outgoing Standard (3-day) transfers was changed temporarily to $2,000 on October 30, 2007. That $2,000 limit will be made permanent with this upcoming change to the User Agreement.

To review the entire User Agreement that will go into effect on December 20, you can see it at:
www.citibank.com/iit_agreement
If you use the Inter Institution Transfer service after December 20, you'll have to agree to this new version.

Thank you for your attention.

Sincerely,
Citibank Customer Service


Written by London Banker on 2007-12-03 08:36:35
http://www.rgemonitor.com/blog/roubini/229948

[ret5hd]

46. question:

<snip>

Limits on IIT Transfers
Type of Limit Standard Transfers Next Day Transfers 

Incoming 
Daily              $100,000            $1,000 
Monthly*           $100,000            $2,500 

Outgoing 
Daily              $2,000              $1,000 
Monthly*           $10,000             $2,500 

</snip>

what kinds of transfers are these?

are these transfers i (as an individual "consumer type" pereson)would be making, such as transferring money from one account to another?

does this cover withdrawals, like if i went to the teller window?

[DemReadingDU]

51. Inter Institution Transfers

Sounds like Citi is limiting the dollars a person can transfer to another institution, to prevent a bank-run(?).

I suppose if a person needed lots bucks to buy a new car or pay bills or go on vacation, I would think you should still be able to withdraw for that. Maybe a person might need to talk to someone at Citi first, but sounds like a person can't just automatically transfer greater than $2000 from Citi to another institution.

From the Citi user agreement...

"We may permit transfers in excess of these limits from time to time, based on our loss experience, security issues and other factors."
https://web.da-us.citibank.com/tandcFiles/printable_cashedge.htm

[ret5hd]

56. Does this affect checking acct's? Savings? Or only long-term...

acct's like CDs?

[DemReadingDU]

57. Sorry, I really don't have the answer

Maybe someone with a Citi account knows the specific details.

[AnneD]

54. Strangers become lenders

The Web brings a new dimension to the age-old practice of peer-to-peer loans, as those seeking money post pictures and explanations of their needs


Associated Press


Colin Nash, 35, was struggling with $12,000 in credit card debt late last year. Meanwhile, Michael Fisher, 24, was looking for a new investment. So, Fisher loaned Nash $200.

<snip>

Nash and Fisher are members of Prosper.com, the U.S. leader in a growing trend known as peer-to-peer lending, which facilitates loans between complete strangers.

Social lending has been around since the days when needy families turned to the richest man in town, but the Web is breathing new life into the practice. Loans on Prosper and Facebook’s LendingClub have risen to $100 million this year from $27 million in 2006, according to Online Banking Report. By 2010, the report forecasts $1 billion in peer-to-peer loan originations.

“I’m sure banks are watching it,” said Jim Bruene, the report’s author.

Zopa.com, a social lending site founded in Britain in March 2005, also planned to offer services in the U.S. this year but its launch has been delayed, according to a company spokeswoman.

more......

http://www.chron.com/disp/story.mpl/business/5343851.html

I had heard this on NPR. Wonder what the big boys will think of folks muscling in on their business.

[AnneD]

55. Housing mess forces Bush admin change

WASHINGTON — This past summer, President Bush favored government restraint as troubles grew in the nation's housing market.

Now, with top Wall Street banks losing billions of dollars in investments tied to home loans, executives losing their jobs and concerns about wider economic fallout mounting, the Bush administration is pressuring the mortgage industry to offer a sweeping approach to fix, or at least mitigate, the problem.

The sudden momentum behind a government-backed proposal to freeze interest rates on hundreds of thousands of loans made to risky borrowers before they reset at higher rates is a direct response to the shifting financial and political realities, analysts say.

"The administration is running out of options if it wants to avoid having a slowing economy pinned on (Republicans) next year," as the presidential election looms, mortgage industry consultant Howard Glaser wrote in a research note Sunday night. The Bush administration is "willing to consider action that would have been inconceivable just weeks ago."

more......

http://www.chron.com/disp/story.mpl/ap/business/5347212.html

If you listen carefully, you can hear the faeries pumping iron and injecting steroids. I think this puts to bed the question...."Is the market being manipulated"?

[ozymandius]

58. the end of today's sordid managed mess

Dow 13,314.57 Down 57.15 (0.43%)
Nasdaq 2,637.13 Down 23.83 (0.90%)
S&P 500 1,472.42 Down 8.72 (0.59%)
10-Yr Bond 3.8950% Down 0.0770
NYSE Volume 3,295,402,750
Nasdaq Volume 1,995,402,620

4:25 pm : On Monday, stocks kicked off the month of December on a negative note, finishing near their worst levels of the session. Stocks traded in positive territory for a decent portion of the day following a White House official's comments, but momentum eventually fizzled as the major indices fell back into the red. A bit of a pullback is not surprising, considering the S&P surged 40.88 points (2.8%) last week.

Treasury Secretary Henry Paulson said he hoped the plan to provide relief for homeowners with subprime mortgages will be ready by the end of the week. He noted that the Treasury is working with the mortgage industry to give suitable borrowers sustainable home loans. The Wall Street Journal previously reported that the plan involves temporarily freezing interest rates on certain subprime loans that would be at increased risk of default following a reset in the low teaser rates.

In corporate news, homebuilder Lennar Corp. (LEN 16.74, +0.90) and Morgan Stanley Real Estate, an affiliate of Morgan Stanley (MS 52.28, -0.44), announced an investment joint venture to acquire, develop, manage and sell residential real estate. Concurrently, Lennar, which is reeling from a slowdown in the U.S. housing market, agreed to sell the venture a diversified portfolio of land valued at $1.3 billion for $525 million. This in itself isn't a big deal, but it could reflect a trend in which capital is attracted to the housing market wreck.

Shares of Lennar opened lower, but quickly recovered. The homebuilding group (+2.5%) had the largest gain today, as investors warmed up to news of the deal.

Shares of Activision (ATVI 24.97, +2.82) soared almost 13% on news that Vivendi SA has agreed to acquire a controlling stake in the company, and combine the company with its Vivendi Games unit. Activision shareholders will receive $27.50 per share, which is a 24% premium to Friday's closing price.

Berkshire Hathaway (BRK.A 143,200.00, +3,100.00) is purchasing $2.1 billion in junk bonds from power producer TXU Corp.'s $3.9 billion offering. Berkshire's participation in the offering should not be mistaken as a signal the bottom of the debt market has been reached. The purchase is pertinent only to Berkshire and TXU and does not reflect financial conditions across the entire market.

U.S. automakers were under pressure today. General Motors (GM 28.61, -1.22) reported North American auto sales of -11% versus -3.6% Street expectations. Meanwhile, Ford Motor Company (F 7.25, -0.26 ) reported November North American auto sales of +0.4% versus -3.4% Street expectations.

On the economic front, the November ISM Index, a national survey of purchasing managers, came in at 50.8, which is basically unchanged from the previous month and in-line with expectations. A number above 50 is intended to reflect growth. Stocks traded in a choppy manner following the announcement.

Seven of the ten major sectors finished in the red, with financials ( 1.2%) pacing the decline. The defensive oriented utilities sector ( +0.7%) provided leadership. DJ30 -57.15 NASDAQ -23.83 SP500 -8.72 NASDAQ Dec/Adv/Vol 2003/1018/2.01 bln NYSE Dec/Adv/Vol 1929/1350/1.33 bln