STOCK MARKET WATCH, Thursday January 3

[UpInArms]

Source: du

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 383 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2543 DAYS
WHERE'S OSAMA BIN-LADEN? 2265 DAYS
DAYS SINCE ENRON COLLAPSE =2226
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 January 2, 2008

Dow... 13,043.96 Down 220.86 (1.67%)
Nasdaq... 2,609.63 Down 42.65 (1.61%)
S&P 500... 1,447.16 Down 21.20 (1.44%)
10-Yr Bond... 3.9010% Down 0.1340
Gold future... $856.70





GOLD, EURO, YEN, Dollars and Loonie



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


(UIA - just filling in for Ozy!)

Read more: du

[NMDemDist2]

1. ha! you're quick LOL

and thanks for filling in!

:hi:

[UpInArms]

3. ...

:blush:

you must have seen that "TOCK"!

:hi:

[kickysnana]

15. As iin Tick, Tock, Tick Tolk, Tick Tolk?.

It is still on the Greatest page.

[UpInArms]

2. Today's Market WrapUp: Markets Start Off 2008 On a Sour Note

The markets sold off in early morning trading after the Institute for Supply Management (ISM) released their manufacturing report. The index fell 3.1 points in December to 47.7, putting it below the expansionary threshold of 50.0 for the first time since January of last year. December’s decline also marked the sixth consecutive decline in the overall manufacturing index, something that hasn’t happened since late 2000 into 2001 just prior to the last recession.



Manufacturing activity is likely to continue to decelerate as customer inventories are building, which then leads to a decline in new orders as retailers work off rising inventory levels. The inventory and new orders indices typically move in opposite directions as seen in the chart below. The chart also shows the inventory index rising above 50 with the new orders index breaking below 50, a development last seen before the 2001 recession. In 2006 the inventory index breached 50 though the new orders index did not.

...more...

[UpInArms]

4. Today's Reports:

Jan 3 12:00 AM Auto Sales Dec
market expects 5.4M
briefing.come expects 5.5M
last 5.6M

Jan 3 12:00 AM Truck Sales Dec
market expects 7.0M
briefing.com expects 6.8M
last 6.8M

Jan 3 8:15 AM ADP Employment Dec

Jan 3 8:30 AM Initial Claims 12/29
market expects 340K
last 349K

Jan 3 10:00 AM Factory Orders Nov
market expects 1.0%
briefing.com expects 1.0%
last 0.5%

[UpInArms]

10. U.S. Dec. ADP employment up 40,000 vs. 173,000

02. U.S. Dec. ADP employment up 40,000 vs. 173,000
8:17 AM ET, Jan 03, 2008 - 12 minutes ago

[Roland99]

11. U.S. Dec. private-sector job growth slows to 40,000: ADP

http://www.marketwatch.com/news/story/us-dec-private-sector-job-growth/story.aspx?guid=%7BCE8E5A21%2D7073%2D4A33%2DA582%2D034611E7F074%7D&dist=hplatest

Companies in the U.S. private sector added 40,000 jobs in December, according to the ADP employment report released Thursday. The report comes a day before the Labor Department reports on nonfarm payroll growth for December. Adding in some 25,000 jobs created by government, the ADP report suggests nonfarm payrolls grew by about 65,000, close to the 58,000 now expected. Services industries added 71,000 jobs in December, while goods-producing industries cut 31,000 jobs, including 16,000 in manufacturing.

Hmmm...w/o Christmas shopping season, would have been even uglier.

[Roland99]

12. U.S. initial jobless claims fall 21,000

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B105DB9ED%2D650F%2D46A5%2DB889%2D8D8F16DEDB0E%7D

Seasonally adjusted initial jobless claims fell 21,000 to 336,000 in the week ended Dec. 29, the government reported Thursday. The four-week moving average for initial jobless claims fell 750 to 343,750, according to the Labor Department. The prior week's initial jobless claims level was revised to 357,000 from an earlier estimate of 349,000. Continuing jobless claims gained 46,000, reaching 2.76 million for the week ended Dec. 22 - the highest level since Oct. 22, 2005. The four-week moving average for continuing jobless claims rose 42,000 to 2.69 million - the highest since Nov. 19, 2005. A Labor Department spokesman said states with large increases in claims cited short-term layoffs.

[UpInArms]

13. Initial Claims @ 336,000 - last week rev'd upward 8k to 357,000

02. U.S. continuing jobless claims rise 46,000 to 2.76 mln
8:30 AM ET, Jan 03, 2008 - 2 minutes ago

03. U.S. 4-wk. avg. initial jobless claims down 750 to 343,750
8:30 AM ET, Jan 03, 2008 - 2 minutes ago

04. U.S. weekly initial jobless claims fall 21,000 to 336,000
8:30 AM ET, Jan 03, 2008 - 2 minutes ago

[UpInArms]

16. U.S. Nov. factory shipments up 1.5% on higher oil prices

02. U.S. Nov. nondurable-goods orders rise 3% on oil prices
10:00 AM ET, Jan 03, 2008 - 16 minutes ago

03. U.S. Nov. durable-goods orders revised to -0.1% vs. 0.1%
10:00 AM ET, Jan 03, 2008 - 16 minutes ago

04. U.S. Nov. factory inventory-sales ratio falls to 1.22
10:00 AM ET, Jan 03, 2008 - 16 minutes ago

05. U.S. Nov. core capital-equipment orders revised to -0.1%
10:00 AM ET, Jan 03, 2008 - 16 minutes ago

06. U.S. Nov. factory shipments up 1.5% on higher oil prices
10:00 AM ET, Jan 03, 2008 - 16 minutes ago

07. U.S. Nov. factory orders up 1.5% vs. 0.7% expected
10:00 AM ET, Jan 03, 2008 - 16 minutes ago

[UpInArms]

22. U.S. crude inventories down 4 mln barrels in latest week

02. U.S. gasoline inventories up 1.9 mln barrels in latest week
10:31 AM ET, Jan 03, 2008 - 21 minutes ago

03. U.S. distillate stocks up 600,000 barrels in latest week
10:31 AM ET, Jan 03, 2008 - 21 minutes ago

04. U.S. crude inventories down 4 mln barrels in latest week
10:30 AM ET, Jan 03, 2008 - 22 minutes ago

[UpInArms]

25. GM U.S. December vehicle sales down 5.2 percent

http://www.reuters.com/article/ousiv/idUSWNASS557920080103

DETROIT (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research) said on Thursday its U.S vehicle sales fell 5.2 percent in December as consumer demand softened amid a weak housing market and higher gas prices.

GM said it sold 319,837 cars and light trucks in the United States last month, down 4.4 percent from 334,501 vehicles a year earlier. Including heavier trucks, total vehicle sales were down 5.2 percent to 323,453 units in December, GM said.

[UpInArms]

26. Ford U.S. December U.S. sales down 9 percent

http://www.reuters.com/article/ousiv/idUKWNAS557120080103

DETROIT (Reuters) - Ford Motor Co (F.N: Quote, Profile, Research) on Thursday posted a 9 percent decline in U.S. sales for December.

The struggling No. 2 U.S. automaker said it sold 212,094 vehicles in the United States in December, compared with 233,621 vehicles a year earlier.

Sales results for Ford included its import brands Volvo, Jaguar and Land Rover, and some medium- and heavy-duty trucks.

Ford said its full-year sales for 2007 were down 12 percent from a year earlier at 2.57 million vehicles.

Retail sales through showrooms were down 10 percent for the year, while sales to corporate fleet operators declined 18 percent, Ford said. That included a 32 percent reduction in sales to rental car agencies, it said.

<snip>

For December, Ford's retail sales were down 13 percent while its fleet sales were down 1 percent. Sales of Ford's market-leading F-Series pickup trucks were down 22 percent.

...more...

[UpInArms]

5. dollar watch

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

Last trade 75.817 Change -0.201 (-0.26%)

US Dollar Falls as Traders Consider 50bp Rate Cut for January

http://www.dailyfx.com/story/bio1/US_Dollar_Falls_as_Traders_1199308958204.html

The first trading day of 2008 has not been good for the US dollar as the greenback weakened against every major currency with the exception of the British pound. Although the dollar had already started the US trading session on softer footing, the second wave of selling was triggered by the manufacturing ISM report which dipped into contractionary territory and fell to the lowest level in over four years. Not only did this number suggest that the manufacturing sector could be in a recession, but it also indicates that the dollar’s weakness is not helping exports. Instead, this disappointing data reinvigorated speculation that the US economy is already in a recession as argued by Pimco’s Bill Gross or could fall into one in the first quarter of 2008. Rate cut expectations have also shifted dramatically on the heels of the release. On Monday, the futures market was pricing in a 92 percent chance for a quarter point rate cut and an 8 percent chance that rates will be left unchanged at 4.25 percent. After today’s numbers, the futures market is now pricing in a 74 percent chance for a quarter point rate cut and a 26 chance of a half point cut. In other words, the situation in the manufacturing sector have become severe enough for traders to believe that the Federal Reserve will need to take more aggressive measures to stabilize the US economy. The minutes from the last FOMC meeting confirmed that growth is the Fed’s primary concern at the moment. The deterioration in incoming economic data has forced them to lower their growth estimates for 2007 and 2008. The sectors that face the biggest downside risks are housing and capital spending. On inflation, they were worried about the impact of higher import costs and a weaker dollar, but the Fed felt that labor costs were well controlled. Tomorrow, we turn our focus to the leading indicators for non-farm payrolls. Even though the current forecast is for weaker job growth, surprises in the Challenger layoffs report, jobless claims and the ADP employment report could shift expectations.

...more...

Euro Breaks Above 1.4750 As Greenback Continues To Get Burned, British Pound Still Heavy

http://www.dailyfx.com/story/bio2/Euro_Breaks_Above_1_4750_As_1199361060149.html

Take a look at a chart of USDJPY and it will become rather obvious that the US Dollar is taking a beating. Indeed, the pair tumbled throughout the morning, breaking below support at 109 to target 108, while EURUSD punched above 1.4750. On the other hand, GBPUSD has remained heavy near 1.9750 as the GBPJPY cross has plummeted over 4 percent during the past two days. Check out Chief Strategist Kathy Lien’s recent special report on the topic for more on the weakness of the British Pound.

Looking at today’s economic data, European news helped support the Euro’s bullish break higher. The German labor markets tightened more than expected in December, as the unemployment change dropped for the 23rd consecutive month by 78,000, helping to pull the unemployment rate down to a nearly 15-year low of 8.4 percent. With German expansion widely expected to take a hit in 2008, the news indicated that household spending may help to pick up some of the slack of an anticipated slowdown in export demand. Furthermore, as the Euro-zone’s largest economy, the status of German expansion carries a bit more weight for the European Central Bank. Meanwhile, Euro-zone M3 money supply growth accelerated 12.3 percent in November from a year earlier, the fastest pace in 28 years. Commentary by ECB President Jean-Claude Trichet has frequently cited the issue of money supply growth as a sign of strong inflation pressures. As a result, the combination of resilient labor markets and rapid M3 growth could leave the ECB feeling somewhat hawkish and will support a Euro bid until Trichet starts to back away from his focus on price stability.

In the US this morning, the greenback faces a spate of second-tier reports, and nearly all of them will be used to attempt to handicap Friday’s non-farm payrolls report. While the NFP report hasn’t sparked a significant amount of price action upon release in recent months, traders will still pay heed as a disappointing figure will essentially guarantee a January 30 rate cut. Yesterday’s release of the December FOMC meeting minutes showed that some members have become worried about “the risk of an unfavorable feedback loop...leading to additional tightening of credit...(that) could require a substantial further easing of policy.” Fed fund futures are completely pricing in a 25bp cut, but as US economic news gets worse and the DJIA tumbles relentlessly, speculation increasingly mounts in favor of the 50bp cut that FOMC members suggest is possible. As a result, the odds remain stacked against a sustained rebound in the US Dollar in the near term, and the prospects of the Euro hitting record highs above 1.50 once again continue to grow.

...more...

[UpInArms]

6. Oil at $100 not our fault: OPEC

http://www.reuters.com/article/businessNews/idUSL0357026020080103?feedType=RSS&feedName=businessNews

TEHRAN/LONDON (Reuters) - OPEC officials lined up to say the exporter group could do little to tame oil prices that hit $100 a barrel for the first time on Wednesday and world markets had enough crude oil.

The comments underline the view of the producer group that factors other than supply are driving oil's record run. Officials said there was no plan for an emergency OPEC meeting before a scheduled February 1 gathering.

"The problem is not shortage of supply," Hojjatollah Ghanimifard, international affairs director at the National Iranian Oil Company, told Reuters on Thursday. Iran is OPEC's second-largest producer after Saudi Arabia.

"I think the main problem is outside the oil market. Too much liquidity is available," Ghanimifard said. "A big part of it is in the paper market of crude oil."

Oil in New York hit $100 a barrel on Wednesday, the first trading day of the year, and analysts said the price could make further gains. Crude rallied almost 58 percent last year and is up from below $20 in early 2002.

...more...

[Danascot]

27. Remember all those pundits who scoffed at analysts

who were predicting $100/barrel oil by the end of 2007? They were right ... it took all of one more day.

[UpInArms]

7. Gold, platinum hit record highs

http://www.reuters.com/article/hotStocksNews/idUSL028236520080103

LONDON (Reuters) - Gold and platinum soared to historic highs on Thursday as speculators and investors snapped them up on the back of strong oil prices and expectations for further U.S. interest rate cuts, analysts said.

Gold's allure as a hedge against inflation and a safe-haven asset got a boost as oil leapt to a lifetime high of $100 a barrel on Wednesday and the dollar tumbled.

"With the dollar under pressure once again and new year fund allocations being made, it is not surprising that a range of commodities has started 2008 very strongly," said Tom Kendall, metals strategist at Mitsubishi Corporation.

"We do not see any change to the bullish drivers for gold in the short term and the market could easily add another $15 to $20 over the next few days before correcting," he said, adding the metal was getting help from geopolitical instability.

Spot gold rose as high as $868 an ounce and was quoted at $863.70/864.40 by 1301 GMT, up from $855.70/856.50 late in New York on Wednesday. The metal jumped more than 30 percent in 2007, its biggest annual gain since 1979.

...more...

[UpInArms]

8. US mortgage applications lowest since July 2006 - MBA

http://www.reuters.com/article/bondsNews/idUSN0317458420080103

NEW YORK, Jan 3 (Reuters) - U.S. mortgage applications tumbled for the third straight week to the lowest level since July 2006 even as borrowing costs declined, an industry trade group said on Thursday.

Applications for loans to buy homes fell to the lowest level in more than four years, while demand for refinancing loans dropped to the lowest since December 2006, the Mortgage Bankers Association said.

The trade group's seasonally adjusted index of total mortgage application activity fell 11.6 percent in the week ending Dec. 28 to 533.9. Its purchase index dropped 8.5 percent to 360.8 and the refinancing index slid 15.4 percent to 1,620.9.

Purchase demand has not been as low since the week of Oct. 10, 2003, when the gauge hit 359.0, the MBA said.

Applications were stunted during the Christmas holiday week despite falling mortgage rates.

"There's probably an exaggerated holiday effect in the most recent week's release" even with the seasonal and holiday adjustments, Doug Duncan, chief economist at the MBA, told Reuters.

...more...

[Demeter]

9. Economic Cold and Flu Season / DailyReckoning.Com

We are just two days into 2008, and the tendency is, as it always is this time of year, to look in the rearview...So, how did the U.S. economy fare in 2007? Well, the dollar declined 10% in the last year. Today, the greenback extended that decline, falling further against the euro (EUR) and dropping near the lowest point in three weeks against the yen (JPY). This dollar weakness has pushed the price of gold to almost $860 this morning.

Today’s stumble for the already flailing U.S. currency followed the Institute of Supply Management reporting that the U.S. factory sector contracted in December...

Some of the main concerns for the health of the U.S. economy are the effects that are still being felt from the bursting housing bubble. The rate of foreclosures is unheard of – even before many mortgages have reset to higher rates...This leads many to believe that homeowners are falling behind on mortgage payments because suddenly, inexplicably, their home is worth less that it was months earlier...Unfortunately, we haven’t hit the bottom of the housing market quite yet. Many expect housing prices to fall by 5 or 10 percent more in 2008...Meanwhile, unsold homes continue to sit, vacant. “2.6 percent of the nation’s housing stock is unsold,” reports The NYT . “Even in the worst years of recessions in the early 1980s and 1990s, the share of vacant homes did not exceed 1.9 percent.

“Either the negatives finally metastasize and drag the economy down, or a fresh source of growth emerges, helping to sustain consumer spending despite the ongoing worries about housing and tight credit,” says The New York Times .

“There are even odds of a recession,” said Mark Zandi, chief economist at Moody’s Economy.com. “It literally could go either way.”

Either way, stay tuned, dear reader. We have an interesting 12 months ahead.

STILL WHISTLING PAST THE GRAVEYARD, AS YOU SEE. HOW ABOUT THAT NYTIMES?

[Demeter]

14. FORECAST 2008 by James Howard Kunstler

DAILYRECKONING.COM

For the tiny fraction of people who actually pay attention to real events – those, for instance, who know the difference between Narnia and Kandahar – the final hours of 2007 leading into the fog-shrouded abyss of 2008 must induce great racking shudders of nausea. Has there ever been a society so exquisitely rigged for implosion? The whole listing, creaking, reeking edifice stands like one of those obsolete Las Vegas pleasure palaces awaiting a mere pulse of electrons to ignite a thousand explosive charges perfectly placed to blow away the structural supports.

The inertia holding everything together that I described in last year’s forecast finally melted away at mid-summer and events began spooling out of control. Specifically, the massive tonnage of debt-backed securities circulating through the financial sector stood revealed for the mostly worthless bales of paper they truly are, and the investment community was left suspended in mid-air, grinning unconvincingly, like Wile E. Coyote thirteen yards beyond the edge of the mesa, with a sputtering grenade in each hand and an anvil tied to his ankles.

The whole second half of 2007 in the ranks of finance was a desperate rear-guard action to stave off the inevitable work out. The fiasco over at Bear Stearns was instructive. Not long after two of their hedge funds blew up in August, the company announced that the funds had been chartered in the Cayman Islands and were therefore beyond the reach of official U.S. legal machinery – meaning, forget about lawsuits, you losers, chumps, and suckers who bought into our jerry-rigged scams...submit your complaints to the Tough Noogies desk and begone with you! This dodge might have benefited Bear Stearns in the short term, but in the long term it’s hard to see why anybody would ever after cast one red cent in Bear Stearns’ direction (in the life of this universe or several like it).

The summer’s blow-ups were followed by truckloads, boatloads, and helicopter loads of rescue “liquidity” delivered through autumn by the Federal Reserve and other central banks in a continuing effort to allow investment houses, mortgage originators, reinsurance firms, and other companies trafficking in suspect paper to avoid declaring greater losses. Then the foreign sovereign wealth funds jumped in with five billion here, ten billion there, coming away with big chunks of ownership, but of what? Of companies with liabilities in excess of assets? Mostly, these desperation moves worked to paper over virtual bankruptcy through the crucial Christmas holiday, when yearly bonuses are doled out, which spared the boards of directors from having to explain why executives were lined up at the loading docks filling their Lincoln Navigators with stupid dope piles and knots of the shareholders’ loot.

On the ground out in the heartland, in the anxiety-drenched, over-valued beige subdivisions of California and the ennui-saturated pastel McHousing tracts of Florida (not to mention the pathetic vinyl outlands of Cleveland and Detroit) a mighty keening welled forth as mortgage rates adjusted upward, and loans stopped “performing,” and “for sale” signs failed to turn up buyers, and sheriff’s deputies showed up with the rolls of yellow foreclosure tape, and actual ownership of the re-poed collateral entered a legal twilight zone somewhere north of the Florida State Teacher’s Pension Fund and south of the Norwegian Municipal Councils’ investment portfolios. What a mighty mess was left out there by the boyz at the Wall Street genius desks, who engineered a magical system for eliminating risk from the capital markets – only to see it leak back in from a million holes and seams and collapse the greatest bubble ever blown.

In the background, the US dollar sank to record lows against the euro and the pound sterling, the price of oil jumped 56 percent across the year just grazing the $100-a-barrel mark, drought punished the American southeast and Australia’s grain belt, floods ravaged Texas and England, the polar ice shrank dramatically, but the US escaped any major hurricane action for a second year in a row.

Except for the murder of Mrs. Bhutto just a few days ago, the international scene was supernaturally quiet. Even Iraq fell into a torpor, variously attributed to utter exhaustion among the warring factions or to the US troop “surge” under general Petreus. Iran got a surprise clean bill-of-health on its nuclear bomb-making activity from America’s own investigators, to the consternation of Mr. Bush & Co. The non-human denizens of Planet Earth didn’t have such a good year. Honeybees, Yangtze river dolphins, and house sparrows took big hits, and Al Gore went up another suit size (as well as winning part of the Nobel Prize for his Powerpoint show). Which brings us finally to the heart of the matter: what’s coming down the pike in 2008?

I shudder to imagine how things will play out now as we turn the corner into 2008. Not to put too fine a point on it, but my little walnut brain can’t imagine any scenario in which the US economy doesn’t end up on a gurney in history’s emergency room. It’s not necessary to rehash the particulars of the Greenspan bubble-blowing disaster. The outcome is what concerns us. The web cables have been blazing for months with arguments as to what form the workout will take. There’s little disagreement about the fundamentals at the housing end of things.

The housing market is in a death spiral. Eventually, the median price of a house will have to fall back to the median income, and it has a very long way to go, perhaps 50 percent. Until that happens, houses will be generally unsellable. At the same time, of course, an anxious finance sector will be offering fewer mortgages and on much more rigorous terms, so there will be far fewer qualified buyers even for distress sales. And the median income itself may soon not be what it has been. The whole equation has changed. As the painful re-pricing process plays out, many owners/sellers will be upside-down and under water in what they owe on the mortgage in relation to the value of the house they occupy. Quite a few may have lost jobs and incomes along the way. Most of these unfortunates would be better off just mailing in the keys and walking away. But in so far as these awful liabilities are peoples’ homes, full of all their stuff and their childrens’ stuff, not to mention being the repository of all their previously-imagined wealth, as well as their hopes and dreams, walking away is psychologically more easily said than done.

Surely in this election year, schemes will be advanced to bail out these poor suckers. But the beneficiaries of such a putative bail out would be far outnumbered by the home-owners still making mortgage payments, plus property taxes jacked up during the recent orgy by greedy public officials, and I don’t think this majority would stand for the unfairness of seeing their neighbors simply let off the hook on their obligations. Perhaps the one thing that congress could do is change the insane law that treats foreclosures like some kind of bizzaro capital gain and piles additional huge tax demands on people who can no longer afford to buy their kids a frozen burrito. The issue of what to do about the dispossessed will be so politically red-hot that it could upset the election process --but I get a bit ahead of myself.

One thing the public doesn’t get about the housing debacle is that it is not just the low point in a regular cycle – it is the end of the suburban phase of US history. We won’t be building anymore of it, and those employed in its development will have to find something else to do. Now, unfortunately the whole point of the housing bubble was not really to put X-million people in so many vinyl and chipboard boxes, but rather to ramp up a suburban sprawl-building industry as a replacement for America’s dwindling manufacturing economy. This stratagem ran into the implacable force of Peak Oil, which not only puts the schnitz on America’s whole Happy Motoring/suburban nexus, but implies a pervasive trend for contraction in everything from the daily distances we can travel to the very core idea of regular economic growth per se – at least in the way we have understood it through the age of industrial capital.

But to return to my point, something like 40 percent of all new jobs after the year 2000 were created in the final burst of suburban expansion – everything from the excavators to the framers to the sheet-rockers, and then the providers of granite countertops, the sellers of appliances and furnishings, and cars to service the far-out new subdivisions, and so on. This is the end, therefore, not only of the production “home-builders,” but perhaps everything from Crate and Barrel to Wal-Mart, too, eventually.

By the way, the housing collapse was only one phase of a more generalized real estate debacle, because the commercial side of the business has also begun a nauseating slide into non-performance and equity destruction. In other words, we built way too many strip malls, power centers, and office parks. God knows what will happen to the owners of these white elephants, or the mortgage and lien holders of these things – but as one wag remarked to me some years ago as we both gazed upon a forlorn abandoned strip mall outside of Tulsa, “...we don’t need that many evangelical roller rinks....”

What happens out there on the housing market scene will certainly redound in banking and finance and whatever still constitutes the US economy generally. The fears and uncertainties surrounding all credit-backed tradable securities derive first from the millions of troubled home mortgages dangling slowly in the wind. These fears and uncertainties will multiply as defaults commence in commercial real estate, and desperate individuals next enter a wave of credit card default, all of it, too, securitized and sprinkled all over the world. None of this stuff has yet been priced into the public disclosures of the many troubled banks and bank-like companies holding it. Nor does anyone really know how this is affecting the hedge funds, and their staggering leveraged positions in things that are looking more and more like quicksand. I can’t imagine that quite a few major banks will not collapse in the first half of 2008. It is hard to escape the conclusion that many hedge funds will also blow up, given the unsoundness of their counter-parties’ positions, not to mention the frailty of the bond reinsurers. But the death of more than a few hedge funds could easily unwind the entire global finance system – meaning a period of destructive chaos followed by a set of severely different institutional arrangements, with untold loss of imagined capital wealth along the way and big changes in everyday life. The world has never really been in a situation like this before and it is impossible to say what it might lead to. But there is no doubt that the American public has enjoyed an artificially high standard of living in relation to the value of what we actually produce – fried chicken, hair extensions, and the Flava Flav Show – so the conclusion is pretty self-evident.

Others have said (and I concur) that 2008 will be the year that the issue of Peak Oil not only takes stage in the forefront of American politics, but pushes global warming aside as the most immediate threat to the “modern” way-of-life. There is every reason to believe that the world has arrived at its all-time oil production peak – and some statisticians would even pinpoint the exact moment as July 2006. Since then a few new and crucial story lines have emerged to allow us to understand what is happening out there on the world oil scene.

One story line is that only “demand destruction” among the world’s poorest nations has kept the oil markets functioning “normally” among the OECD nations and the rising Asian players. Even so, oil priced in US dollars more than doubled in 2007. It remains to be seen whether demand destruction in a wobbling US economy – with the suburban builders crippled – will keep oil prices from jumping into the uncharted territory beyond $100-a-barrel. But two other forces are in operation now.

One is the growing oil export problem, soon to be a crisis. It now appears that exports, in nations with surplus oil to sell, are going down at an even steeper rate than production declines. Why? They are using more of their own oil. The population is growing robustly. The Saudi Arabians are building the world’s largest aluminum smelter and many chemical factories. This takes a lot of oil. Russia, another big exporter, saw its car sales jump by 50 percent in 2007. Mexico is depleting so rapidly, and using so much more of its own oil, that it might be out of the export game altogether in three years. That will be bad news for the US, since Mexico is tied with Saudi Arabia as America’s number two leading source of oil imports. Remember, the United States now imports close to three-quarters of all the oil we use.

The second new factor on the Peak oil scene is “oil nationalism.” It is prompting countries like Norway and Russia to husband more of their own resources as the awareness hits that they are past peak and might want to keep their own motors humming further into the future. Oil surplus nations are also trending more toward selling their oil on the basis of long-term contracts with favored customers rather than just auctioning the stuff off on the futures market. This makes oil a much more important element in geopolitical power politics. Note that the US may not enjoy “favored customer” standing among many of these nations.

Matt Simmons, the leading investment banker to the oil industry, predicted at a major conference in October that the United States is much closer to encountering a problem with chronic spot shortages of oil (and gasoline, of course) than the public realizes, and Simmons says that this supply problem will be extremely disruptive in every imaginable way – economically, politically, and socially. Most of the commentators I take seriously see the price of oil oscillating in 2008 between $80 and $160-a-barrel. Simmons says Americans will keep sucking up the price increases, but they will probably freak out over spot shortages.

I have no idea how presidential election politics will play out in 2008. It must be obvious that so many nasty pitfalls lie out there in the months ahead that something’s got to shake up the current scripted mummery among the contenders. The current batch of candidates will soon find their story lines and pre-cooked messages out-of-date as the nation faces crises in finance and energy (at least). Given the uneventful geopolitical scene of the past 18 months (since the Hezbollah-Israel War and up to the murder of Mrs. Bhutto in Pakistan), odds are that the US will have more rather than less trouble from the rest of the world in 2008 – especially if our own financial recklessness trips up the global economy.

In the immortal words of TV’s erstwhile “Mr. T,” I pity da fool who gets elected into this mess. There will be a whole continent full of bankrupt, re-poed, and idle former Wal-Mart shoppers, many of them with half of their skin tattooed and many of that bunch all revved up to “roll heavy and gun up” against the folks who screwed them.

Which leads me to my penultimate observation of the moment: 2008 will be the year that celebrity wealth goes into hiding. A land full of people crying into their foreclosure notices will take a dim view of the Donald Trumps and P. Diddys luxuriating out there and may come looking for scalps -- though in the case of Mr. Trump they’ll be sorry they woke up the wolverine that lives on his head. Basically, though, I’m not kidding. Conspicuous displays of wealth will be so “out” that Mr. Diddy might take to club-hopping in a 1999 Mazda.

Okay, my final comment. After being chastised endlessly about mis-calling the DOW in 2006 (I said 4000), I have learned my lesson about making numerical predictions for the stock markets. So let’s just say there is no way that the DOW, the NASDAQ, and the S & P will not end the year 2008 absolutely on their backsides. The charade of permanent prosperity based on getting something for nothing is over. That sound you hear out there is reality knocking on the door. It has been standing out in the cold for a long time and it is not happy with us.

Regards,

James Howard Kunstler
for The Daily Reckoning

[Trucker Bob]

17. WOW!

Hang on folks, it's going to get ugly. :hurts:

[Hugin]

19. Great read...

Thanks for posting. :D

[Karenina]

28. WOW! WOW!!!

:wow::wow: Now THAT was HYSTERICAL!!! :scared::hide::scared:

[antigop]

18. State Street's subprime mess

http://dailybriefing.blogs.fortune.cnn.com/2008/01/03/state-streets-subprime-mess/

Subprime problems are smacking State Street (STT). The asset manager warned Thursday morning that it will have to set aside $618 million to cover legal costs tied to the company’s foray into subprime investments via its State Street Global Advisors unit. State Street said the legal worries stem from “customer concerns as to whether the execution of these strategies was consistent with the customers’ investment intent.” Their suitability aside, the strategies have already been costly for State Street and its clients: Assets in 12 fixed-income strategies plunged 67 percent over the course of three months to $2.6 billion at the end of the third quarter, Financial Week reported, amid hefty losses and customer defections.

http://biz.yahoo.com/bw/080103/20080103005435.html?.v=1

State Street Corporation (NYSE:STT - News) announced today that it will record a net charge, after taxes, in the fourth quarter of 2007 of $279 million, or $0.71 per share. The purpose of the charge is to establish a reserve to address legal exposure and other costs associated with the underperformance of certain active fixed-income strategies managed by State Street Global Advisors (SSgA), the company’s investment management arm, and customer concerns as to whether the execution of these strategies was consistent with the customers’ investment intent. As a consequence of the unprecedented events in the credit markets over the past six months, these strategies were adversely impacted by exposure to, and the lack of liquidity in, sub-prime mortgage markets. In aggregate, the reserve will be $618 million on a pre-tax basis. The impact to earnings of the net charge, after taking into account the tax effect of the reserve and associated lower incentive compensation cost, will be $279 million.

<edit to add additional link>
http://www.financialweek.com/apps/pbcs.dll/article?AID=/20071227/REG/519421468/1036

State Street Global Advisors announced new leadership to turn around its beleaguered active bond business, but consultants and lawyers say it’s too soon to predict when the manager will be able to put problems sparked by recent steep investment losses behind it.

In particular, consultants say three pending lawsuits against the firm over losses on supposedly conservative bond strategies will serve as a distraction to management, risking negative publicity as clients continue to seek explanations for what went wrong during the summer.

As part of a broad restructuring announced last month, State Street Global Advisors (SSgA) named Mark Marinella to the new post of global chief investment officer of fixed income, responsible for addressing “the recent underperformance experienced in a number of SSgA’s active fixed-income strategies,” a news release said. Mr. Marinella previously was executive vice president of fixed-income trading initiatives at State Street Global Markets.

[Roland99]

20. 10:38am - Sucker rally commencing

Dow 13,095.90 51.94
Nasdaq 2,608.48 -1.15
S&P 500 1,451.66 4.50
10 YR 3.96% 0.06
Oil $99.59 $-0.03
Gold $862.10 $2.10


Markets are starting to price in a rate cut in a few weeks.


Morons.

[Hugin]

21. Based solely on the "Jobs numbers not quite as bad as we thought..."

"It depends on how you look at them...."
"Good lighting helps..."
"Presentation is everything..."
"Throw on a sprig of parsley..."
"Things could be worse..."
"We've seen worse..."
"Has anyone mentioned wheat is up..."

Blather. :eyes:

[TrogL]

23. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



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




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

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

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

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

2007-11-22 Thursday, November 22 1.01071 USD
2007-11-23 Friday, November 23 1.01143 USD
2007-11-26 Monday, November 26 1.01245 USD
2007-11-27 Tuesday, November 27 1.00321 USD
2007-11-28 Wednesday, November 28 1.00939 USD
2007-11-29 Thursday, November 29 1.00725 USD
2007-11-30 Friday, November 30 0.9993 USD
2007-12-03 Monday, December 3 1 USD
2007-12-04 Tuesday, December 4 0.989511 USD
2007-12-05 Wednesday, December 5 0.987459 USD
2007-12-06 Thursday, December 6 0.987654 USD
2007-12-07 Friday, December 7 0.994926 USD
2007-12-10 Monday, December 10 0.989805 USD
2007-12-11 Tuesday, December 11 0.989413 USD
2007-12-12 Wednesday, December 12 0.989413 USD
2007-12-13 Thursday, December 13 0.978857 USD
2007-12-14 Friday, December 14 0.98668 USD
2007-12-17 Monday, December 17 0.992851 USD
2007-12-18 Tuesday, December 18 0.989609 USD
2007-12-19 Wednesday, December 19 0.994431 USD
2007-12-20 Thursday, December 20 1.0017 USD
2007-12-21 Friday, December 21 1.00573 USD
2007-12-24 Monday, December 24 1.01307 USD
2007-12-25 Tuesday, December 25 1.01307 USD
2007-12-26 Wednesday, December 26 1.01688 USD
2007-12-27 Thursday, December 27 1.01958 USD
2007-12-28 Friday, December 28 1.02208 USD
2007-12-31 Monday, December 31 1.01204 USD
2008-01-01 Tuesday, January 1 1.01204 USD
2008-01-02 Wednesday, January 2 1.00786 USD

Current values

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

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     1.0060 1.0093 1.0060 1.0093 -0.0004 -0.04% 
CD.H08 Mar 2008 1.0080 1.0115 1.0057 1.0080 -0.0023 -0.23% 
CD.M08 Jun 2008 1.0110 1.0140        1.0100 +0.0004 +0.04% 
CD.U08 Sep 2008 0.9785 0.9785 0.9780 1.0095 +0.0004 +0.04% 
CD.Z08 Dec 2008 0.9750 0.9750 0.9750 1.0087 +0.0004 +0.04% 
CD.H09 Mar 2009 0.9870 0.9870 0.9870 1.0079 +0.0004 +0.04% 
CD.M09 Jun 2009 0.9995 0.9995        1.0071 +0.0004 +0.04% 

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

Market              Open    High     Low    Last   Change     Pct 
AUSTRALIAN $/CANADIAN $ (NYBOT:AS)
AS.H08 Mar 2008 0.88730 0.88730 0.88730 0.87000 +0.00575 +0.67%  
AUSTRALIAN $/US$ (NYBOT:AU)
AU.H08 Mar 2008  0.8784 0.8784 0.8784 +0.0053 +0.61% 
CANADIAN $/JAPANESE YEN (NYBOT:HY)
HY.H08 Mar 2008 111.020 111.020 111.020 109.660 -2.365 -2.11%  
EURO/AUSTRALIAN $ (NYBOT:RA)
RA.H08 Mar 2008 1.68250 1.68250 1.68250 1.67645 +0.00620 +0.37%  
EURO/BRITISH POUND (NYBOT:GB)
GB.H08 Mar 2008 0.74500 0.74880 0.74500 0.74880 +0.00355 +0.48%   
EURO/CANADIAN $ (NYBOT:EP)
EP.H08 Mar 2008 1.45950 1.45950 1.45950 1.45950 +0.00095 +0.07%  
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.H08 Mar 2008 159.970 160.230 159.500 160.300 +0.365 +0.23%   
EURO/US$ (SMALL) (NYBOT:EO)
EO.H08 Mar 2008 1.4612 1.4670 1.4612 1.4725 +0.0140 +0.95%  

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

The March Canadian Dollar was lower overnight as it extends Monday's decline and is trading below the 10-day moving average crossing at 101.11. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 100.01 would confirm that a short-term top has been posted. If March renews the rally off December's low, the 50% retracement level crossing at 103.95 is the next upside target. First resistance is the 38% retracement level crossing at 102.43. Second resistance is the 50% retracement level of the November-December decline crossing at 103.95. First support is the overnight low crossing at 100.37. Second support is the 20-day moving average crossing at 100.01.

Analysis

Either the bot's having a bad day or something's gone wacky. My template shows stuff like "First resistance is Monday's high crossing at 1.0514" so I'm not quite sure what to make of values in the hundreds. Regardless, there's no mention of the dip below par so I'd take all the numbers with a grain of salt until things get sorted out.

[antigop]

24. State Street exec steps down after $279M hit

http://money.cnn.com/2008/01/03/news/companies/bc.apfn.statestreet.ap/index.htm?postversion=2008010310

State Street Corp. set aside $618 million to cover costs associated with its investment arm and replaced the head of the unit, the world's largest money manager for institutions said Thursday.

The Boston company will take an after-tax charge of $279 million, or 71 cents a share, to set up the reserve, but State Street also said that excluding the charge, revenue and profits would likely top the expectations it released two months ago.

State Street said it expects to report fiscal 2007 earnings per share between $3.42 and $3.45 on revenue growth of more than 30 percent.

William Hunt, who headed the State Street Global Advisors investment wing, resigned and was replaced on an interim basis by James Phalen.

[UpInArms]

29. ending numbers - was the S&P even trading today?

Dow 13,056.72 12.76 (0.10%)
Nasdaq 2,602.68 6.95 (0.27%)
S&P 500 1,447.16 0.00 (0.00%)
10-Yr Bond 3.901% 0.00

NYSE Volume 3,434,195,500
Nasdaq Volume 1,982,167,375

4:15 pm : Thursday was another disappointing session on Wall Street. The stock market finished flat after it was unable to hold modest gains despite a number of better than expected economic reports. Yesterday, stocks plunged after the ISM Index indicated national manufacturing contracted, which reignited recession concerns.

In economic news, ADP said private employment grew by a larger than expected 40K in December, compared to the expected rise of 33K. Many economists question the accuracy of this report. The more closely watched nonfarm payroll employment report from the Dept. of Labor will be released tomorrow at 8:30 ET.

Briefing.com expects a 75K rise in December payrolls, slightly more than the consensus estimate that calls for a rise of 70K.

Meanwhile, weekly initial jobless claims dropped to 336K compared to the prior revised reading of 349K. Economists were expecting 345K claims. This is good news, as claims are not yet showing significant layoffs by businesses or recessionary trends.

November factory orders unexpectedly rose 1.5%, compared with the expected 1% rise. Orders have been on an uptrend the last three months, which is also good news for the economy.

There were a few notable corporate headlines.

Walgreen (WAG 35.04, -2.30) reported December same-store sales rose 2.6% and CVS Caremark (CVS 36.77, -2.58) said sales rose 1.8%. Both reports disappointed market participants, sending the companies' shares lower. Drug retail (-6.3%) was the worst-performing group in response to the reports.

Shares of agriculture company Monsanto (MON 120.67, +9.20) made some nice gains after the company raised its FY2008 earnings guidance and reported first quarter earnings that handily topped estimates. The strong report lifted other agriculture names, which caused the fertilizer & agriculture chemicals group (+8.3%) to take the leadership position on Thursday.

Shares of Ford (F 6.45, -0.15) and General Motors (GM 23.92, -0.49) finished lower today. GM reported December auto sales dropped 5.2% compared to the expected drop of 5.6%, and Ford said sales dropped 9% compared to the expected drop of 7.8%. On a related note, Toyota Motor (TM 106.90, +0.44) overtook Ford for the No. 2 spot in U.S. sales.

Six of the ten sectors traded higher, led by materials (+1.5%). Some of the most heavily-weighted sectors were the main laggards including financials (-0.7%), tech (-0.2%) and consumer discretionary (-1.2%).

Crude oil hit a fresh all-time intraday high of $100.09 after crude inventories decreased by a larger then expected amount. After some choppy trade, crude for February delivery finished down $0.44 to $99.18 per barrel. By most accounts, crude is still trading slightly under the inflation adjusted high of roughly $103 reached in 1980.

Although $100 oil is certainly not good for consumer spending, the media gives it too much attention. There is not much of a difference between $98 and $100 oil, other than $100 oil makes a better headline.DJ30 +12.76 NASDAQ -6.95 NQ100 +0.1% R2K -1.1% SP400 -0.7% SP500 +0.00001 NASDAQ Dec/Adv/Vol 1893/1084/1.94 bln NYSE Dec/Adv/Vol 1489/1690/1.32 bln

3:35 pm : Stocks fall into the red, and their intraday lows, in a broad-based decline. There is some relative weakness in financials (-0.8%) and tech (-0.8%). Trading has been choppy today.

Tomorrow brings the market-moving December jobs report from the Dept. of Labor and the ISM Services reading. Briefing.com expects a 75K rise in December payrolls, slightly more than the consensus estimate of 70K. Briefing.com agrees with consensus estimate that unemployment will rise to 4.8% and the workweek will hold steady at 33.8. Briefing.com expects ISM services to dip to 53.0 from 54.1. DJ30 -15.17 NASDAQ -2.28 SP500 -10.00 NASDAQ Dec/Adv/Vol 1795/1182/1.55 bln NYSE Dec/Adv/Vol 1359/1809/956 mln

3:00 pm : There is a lack of buying interest as the Dow and S&P trade with slight gains, and the Nasdaq trades with a slight loss.

In commodity trading, crude finished down $0.44 to $99.18 per barrel, after hitting an all-time intraday high of $100.09. Gold finished up $8.80 to $868.80 per ounce. In the first two trading days of 2008, gold is up 3.7% and oil is up 4.1%. As a whole, commodites are up 0.4% on the session.DJ30 +29.10 NASDAQ -4.91 SP500 +2.35 NASDAQ Dec/Adv/Vol 1679/1277/1.39 bln NYSE Dec/Adv/Vol 1307/1846/867 mln