STOCK MARKET WATCH, Friday July 18

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday July 18, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 187
DAYS SINCE DEMOCRACY DIED (12/12/00) 2735 DAYS
WHERE'S OSAMA BIN-LADEN? 2460 DAYS
DAYS SINCE ENRON COLLAPSE = 2751
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.
$1 USD = EUR 1.06678
$1 USD = JPY 116.6200

AT THE CLOSING BELL ON July 17, 2008

Dow... 11,446.66 +207.38 (+1.85%)
Nasdaq... 2,312.30 UNCH (UNCH)
S&P 500... 1,260.32 +14.96 (+1.20%)
Gold future... 970.70 +8.00 (+0.83%)
30-Year Bond 4.64% +0.06 (+1.22%)
10-Yr Bond... 4.04% +0.10 (+2.64%)




http://futures.tradingcharts.com/chart/CO/88

GOLD,EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

[ozymandius]

1. Market WrapUp: Invest on the Correct Side of the Long Trend

by Martin Goldberg, CMT

Investors would be well served to maintain those positions that are on the correct side of the long term trend. This is simple common sense. In spite of this simple theme, investors are bombarded by the much-espoused philosophy to invest in stocks for the long term and stay diversified. This philosophy is being tested as baby boomers bear down on impending retirement with their assets largely tied up in the US market. This philosophy is at odds with the trend US stock market which is in a relatively new down trend. These folks are extremely vulnerable in my view. With the only first hand experience of these people being the most powerful bull market in history – 1982 to 2007 – there is nothing in their personal experience for them to do anything other than what has worked over that same time. They haven’t studied history. Stay the course! This is the conventional wisdom.

.....

Look at a long term chart of the S&P 500 below. Ask yourself the question, “Is this going up, or is this going down?” It looks to me like it is going down. Also look at the climatic volume in recent months and ask yourself, “Could this climatic volume be signaling a long term change in trend? Is there anything that you can think of to suggest that this index can’t go a lot lower than it is today?” To be sure and accurate, the possibility for short and sharp rallies is always characteristics of bear markets. We could be getting one that started on Wednesday. Markets don’t crash all at once; at least they haven’t so far. There will always be these exciting rallies; especially when there are many large money speculative interests who know when to schedule the rallies to their best advantage. The stocks-for-the-long-term crowd is full of highly educated and credentialed individuals, even Ivy League professors. There are a lot of media types (think that glib morning guy on financial cable). Look at the chart again and ask yourself, “Do you really trust these folks? Do you trust them more than you trust me?”

-egads! the chart-

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

[DemReadingDU]

7. Not just the S&P chart, but also the volume chart

So much volume being traded lately, even discussed in yesterday's thread. Crazy.

:crazy:

[ozymandius]

11. UpInArms posted yesterday this side-by-side comparison.

yesterday's volume:
NYSE Volume 7,441,283,000
Nasdaq Volume 2,653,712,750

volume on 9/29/05:
NYSE Volume 2,159,075,000
Nasdaq Volume 1,832,012,000

Gaaaa!

[Demeter]

18. It Appears that the Current Trend is to Divest, NOT Invest

and to short-sell and day trade and otherwise "Play" the markets.

[Tansy_Gold]

37. Now I could be wrong, but. . . . .

wouldn't that be kind of like, uh, oh I don't know, maybe somewhat similar to gambling? Or maybe speculating?

But what do I know? :shrug:




Tansy Gold, remembering the :sarcasm: thingy






PS Isn't there a commercial for some investment company that shows a guy at an auction, bidding on a painting, buying it for $50K and then immediately saying "And now I want to sell that. . . . . "

[ozymandius]

2. no goobermint reports today

:hi:

[ozymandius]

3. Oil rises above $131 a barrel in Asia

SINGAPORE - Oil rebounded to near $131 a barrel Friday in Asia as news of an output cut in Nigeria helped to halt the sharp decline in prices that began three days ago.

Eni SpA said Thursday that it had shut down pipelines carrying 47,000 barrels of oil a day after a "sudden drop of pressure."

A Nigerian military official said an explosion had damaged an Eni pipeline in the country's oil-rich south early Thursday, although he didn't know how severely.

.....

Midafternoon in Singapore, light, sweet crude for August delivery was up $1.66 at $130.95 a barrel in electronic trading on the New York Mercantile Exchange.

The contract fell $5.31 to settle at $129.29 a barrel in the overnight floor session. That brought the total decline over the past three days to nearly $16.

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

[ozymandius]

4. Oil markets: Bottoming out or taking a breather?

NEW YORK - Oil prices tumbled below $130 a barrel for the first time in more than a month Thursday, as crude's dramatic slide entered a third day accompanied by a sharp sell-off in natural gas.

The declines accelerated amid growing concerns that the weakening economy and creeping inflation are eroding demand for fossil fuels in the U.S. and other large energy-consuming nations.

Oil is now more than 10 percent cheaper per barrel than it was on Monday; natural gas prices are down more than 20 percent just since the Fourth of July. Still, experts are not convinced that prices have turned a corner.

.....

The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories rose by 104 billion cubic feet to more than 2.31 trillion last week. Analysts had been expecting supplies to grow by only 86 billion to 91 billion cubic feet, according to a Platts survey.

A similar report Wednesday showed oil, gasoline and other fuel supplies unexpectedly rose sharply. Traders saw both the petroleum and natural gas reports as reasons to sell, as they reinforce data that show consumers are cutting back on their energy use.

http://news.yahoo.com/s/ap/20080717/ap_on_bi_ge/oil_prices_96

[AnneD]

45. Morning Marketeers......

:donut: and lurkers. That is the 64K question-is the oil bottoming out or taking a breather?

The only answer I can give is a history lesson...some of it is a vague memory refreshed by Mom and some is actual personal experience. In the 70's, I remember inflation creeping up. While Dad was making decent enough, more of our money was going to the basics and my stay at home Mom could not cut anymore corners (she was growing a 1/2 acre garden, making repairs of all kinds, sewing, and basically running herself ragged). Mom took a part-time job and eventually a full time job and that took a lot of pressure off.

Fast forward a few years and I had my first job. I was so proud of having my first car.....but then we hit the Arab oil embargo. Oil was scarce and expensive. I switched from my first 'job' into my first 'career' move working for an oil company. They were expanding due to profits and I was in high cotton so to speak. OK, the fact that the interest rate was really going up was bad but I had a great career so maybe I could find a way around the 15%+ interest rate on a home loan. Then, as the embargo was lifted, the price of oil dropped but damage had been done to the automotive industry and lay-offs happened in Detroit and other parts of the country began having lay offs. And then the number of foreclosures began edging up. And then the stock crash of 87 hit. Now lay offs escalated as did foreclosures. And S&L's that made a majority of mortgages started going belly up. They had devised balloon mortgages as a way to get folks into homes-and in a stroke of bad timing....many balloon payments came at the time when these home owners had recently gotten those pink slips. I avoided one round and left for a company that was more stable, only to be laid off anyway. It was so bad and lasted for so long that all my saving, cash on hand, unemployment, and pantry was consumed. I had just enough cash to retool into another job but it took me years to get back up on my feet again.

So my final answer is yes the price will go down some. The economic slowdown in the USA and Europe will blow back and hit China and India. Their economies will still show growth, but it will be taken down a peg or two. Thus the squeeze on commodities will abate a bit. We will not see the 'good old day' prices, but we won't see a running price meter either. But the interesting question is...how much have we changed. I have seen more consumer core changes this time around than the last and they have been bigger. And environmental issues are more pressing than ever.I think some of the changes being implemented will stick this time,

Happy hunting and watch out for the bears.

[Hugin]

50. Morning AnneD...

:hangover:

Not much newsy this Morning... Not that there isn't any News, it's that we're not allowed to see it if
it's not politically advantageous to TPIP.

Such is the current world.

:hi:

[AnneD]

52. Any day I can spend some time here with friends....

is a newsworthy, informative day.

[Tandalayo_Scheisskopf]

29. Right on time.

Last night, someone half-humorously posted in the SM thread a question about "when would a Nigerian pipeline blow up?". Thus the word is made flesh.

The Nigerian Delta seems to be the nexus of market manipulation. I find it hard to believe that mere impoverished agrarians with rusty AKs are able to have such uncanny market timing. It is impossible to confirm many of these events, and if these events are occurring, then where are these guys getting the military expertise and supplies?

They supposedly captured an oil rig 100 miles offshore. Right. An op that would give the SEALs pause to contemplate and these guys pulled it off. Right. Sure they did. And if they were a popular movement, why did they not seize and hold it to create leverage and a stage for their demands? Something doesn't pass the smell test here, at all.

[Ghost Dog]

62. Point. I have the impression that such 'events' occur in that region (W. Africa)

more-or-less all the time. Which 'events' then receive media 'exposure', however, would appear to depend on, um, certain criteria.

BTW, I read that now, at present, some 20% of crude oil supplied to the USA comes out of Africa. And the intention is to increase that.

[ozymandius]

5. Citigroup posts $2.5B loss as loan defaults mount

NEW YORK - Citigroup says it posted a $2.5 billion loss and laid off more employees in the second quarter as it struggled with surging loan defaults.

The nation's biggest banking company by assets reported Friday it lost $2.5 billion, or 54 cents per share, in the April-June period. In the same timeframe last year, the bank earned $6.23 billion, or $1.24 per share.

http://news.yahoo.com/s/ap/20080718/ap_on_bi_ge/earns_citigroup

[ozymandius]

16. U.S. Stock-Index Futures Rise After Citigroup Beats Estimates

July 18 (Bloomberg) -- U.S. stock-index futures advanced after Citigroup Inc.'s smaller-than-estimated loss outweighed disappointing results from Merrill Lynch & Co., Google Inc. and Microsoft Corp.

Citigroup gained more than 3 percent after beating forecasts for the first time in three quarters. Standard & Poor's 500 Index futures had fallen as much as 1 percent, driven lower by Merrill, Google and Microsoft. Merrill fell short of projections for the fourth straight quarter. Google trailed forecasts for only the third time since 2005 as growth in clicks on Internet advertisements slowed. Microsoft cut its profit estimate.

S&P 500 futures expiring in September rose 3.10 points, or 0.3 percent, to 1,256.50 at 7:14 a.m. in New York. Dow Jones Industrial Average futures added 25, or 0.2 percent, to 11,426. Nasdaq-100 Index futures rose 0.25, or less than 0.1 percent, to 1,840.

.....

Citigroup gained 56 cents to $18.53. The bank, which has tumbled almost 40 percent in New York trading this year, posted a loss of 49 cents a share from continuing operations. That was less than the 60-cent loss analysts estimated on average in a Bloomberg survey. Citigroup took about $7.2 billion of credit- market writedowns.

http://www.bloomberg.com/apps/news?pid=stocksonmove&refer=&sid=aZBDl4Pcebo8

---

Oooh. Where can I get a share of Citigroup? I just love burning money. :sarcasm:

[Hugin]

21. Oh Joy! A smaller-that-estimated-loss!

W00t! Here's some more money so you can go lose it TOO! :dance:





(This may make me sound like an old coot, but, I can remember when companies were supposed to earn more money than
they lost... Call me, nostalgic.)

[Ghost Dog]

64. "Citigroup took about $7.2 billion of credit- market writedowns" is not the chosen headline... n/t

[UpInArms]

22. more: Citigroup swings to loss on $7.2 bln writedown

http://www.marketwatch.com/news/story/citigroup-swings-loss-72-bln/story.aspx?guid=%7BF890F8F3%2DC6CC%2D482F%2D80B8%2D0CA36BD54837%7D

NEW YORK (MarketWatch) -- Citigroup, the largest U.S. bank by assets, said on Friday that it lost money for the third consecutive quarter after writing down $7.2 billion of investments related to fixed-income weakness and consumer credit woes.

Analysts had expected the firm to report write-downs of up to $9 billion.

The company (C) said it lost $2.5 billion, or 54 cents a share, compared to
a profit of $6.23 billion, or $1.24 a share.

On a continuing operations basis, the firm lost $2.22 billion, or 49 cents a share, compared to a profit $6.14 billion, or $1.23 a share.

Revenues were $18.7 billion, down 29%.

Analysts polled by FactSet had expected the firm to lose 62 cents a share.

<snip>

It made a downward-credit value-adjustment of $2.4 billion related to exposure to monoline insurers, compared to $1.5 billion in the first quarter.

...more...

wow! such "good" news! let's party! talk about reducing expectations :eyes: - and I'll just bet the P/E looks "grand"!

[Hugin]

24. All of this Citi losing stuff talk reminded me...

I haven't gotten my Title from them yet. Wonder if they lost that, too? :scared:

Butterfingers! (and I'm not referring to the confection)

[Tansy_Gold]

70. Oh, Prag, been there, done that! {{{hugs}}}

It took me SEVEN SHRUGGING MONTHS to get my deed from Lawyer's Title, a.k.a. LandAmerica, dba NoteWorld.

In my case, the problems were ENTIRELY caused by simple and complete incompetence, not ulterior motives or financial difficulties. But it was a very, very, very long nightmare.

May you be saved that much.


Tansy Gold

[Hugin]

74. Aw, thanks.

:blush:

One does not need a government to have a bureaucracy.

[UpInArms]

33. Citi CFO says prime mortgage portfolio deteriorating (Whoopsie!)

01. Citi CFO says prime mortgage portfolio deteriorating
9:45 AM ET, Jul 18, 2008

[burf]

42. So I guess that leaves them

with the not so prime mortgage portfolio? In other words, the junk.

[ozymandius]

6. Mattel's 2Q profit falls sharply, but tops view

EL SEGUNDO, Calif. - Toy maker Mattel says its second-quarter profit fell by nearly half, as global Barbie sales dropped off 6 percent and costs increased, but results still beat Wall Street expectations.

.....

Analysts surveyed by Thomson Financial had expected profit of 2 cents per share on revenue of $1.04 billion.

http://news.yahoo.com/s/ap/20080718/ap_on_bi_ge/earns_mattel

[ozymandius]

8. Economic worries loom over Google's 2Q earnings

SAN FRANCISCO - Google Inc. has successfully tackled a lot of complex problems during its first decade in business, but even the Internet search leader may be hard pressed to find a way to sustain its rapid earnings growth amid a sputtering economy in the United States and parts of Europe.

The challenge came into sharper focus late Thursday after Google released second-quarter earnings that fell below analysts' expectations and management acknowledged the economic turmoil appears to be causing consumers to click less frequently on the ads that generate virtually all its profits.

.....

Google shares fell $40.69, or 7.6 percent, in extended trading after finishing Thursday's regular session at $533.44. If the descent holds in Friday's trading, it will wipe out about $13 billion in shareholder wealth and leave Google's stock price below $500 for the first time in three months

.....

Google earned $1.25 billion, or $3.92 per share, during the three months ended in June. That represented a 35 percent increase from net income of $925 million, or $2.93 per share, at the same time last year.

http://news.yahoo.com/s/ap/20080718/ap_on_hi_te/earns_google

[ozymandius]

9. When did Phil "The Pill" Gramm leave McSame's campaign?

This was posted late last night to yesterday's thread.

Has the venerable old prostitute/scalawag just gone into hiding or is he just plain gone? It would make sense to me that he would leave. He no doubt needs to spend more time with his possessions and consult non-stop with his attorneys.

[Tandalayo_Scheisskopf]

23. Ozy, I could be wrong...

But I read something within the last two days that said he was formerly with the McNasty campaign. Perhaps they told him to quietly make his exit, because of his exposure in the UBS mess.

[Hugin]

25. Boy, that was quick...

I'll keep my eyes peeled to see if this is an emerging thing. I hadn't heard it either. If so, good eyes Tandalayo_Scheisskopf.

[AnneD]

46. That is exactly what I was thinking....

and I wonder if it is tied into that guy that has come foreword with a list of folks using the Lichtenstein tax shelters. Hey it sound like history might be coming too close to repeating it's self a la the Keating Scandal.

[AnneD]

47. Here we go....hot off the press.........

RS Probes Audit Firms on Tax Shelters


The Internal Revenue Service plans to hold a conference call on July 8 with the six largest audit firms to convince them to do more to help track the use of secret foreign bank accounts for tax evasion.

Bloomberg News reported that IRS deputy commissioner Barry Shott wrote an e-mail to the firms in which he said the IRS was concerned about what it was "seeing and hearing" about the practices of some foreign banks. The IRS wants to discuss with the auditing firms the Qualified Intermediary program, which was launched in 2000 as a way for the IRS to keep tabs on U.S. taxpayer funds in foreign bank accounts.

The IRS has been probing the use of tax shelters in Switzerland, Lichtenstein and other countries.

Earlier this week, a judge gave the IRS the authority to serve a "John Doe" summons ordering UBS to provide information about U.S. taxpayers who use Swiss bank accounts to evade taxes (see Justice Department Seeks UBS Taxpayer Records). In June, a former UBS banker, Bradley Birkenfeld, pleaded guilty to conspiring to defraud the IRS by helping clients avoid U.S. reporting requirements on income in Swiss bank accounts.

much more........

www.webcpa.com/article.cfm?articleid=28396

Say, isn't Phil associated with them in some way she said in a sarcastic knowing way. She called her broker to buy share of fruit of the loom because she knew there would be a rush to purchase new underware, for she had heard the sounds of sphincter's puckering.

[ozymandius]

10. Merrill Lynch posts 2Q loss; sells Bloomberg stake (reported after Thursday's close)

NEW YORK - Merrill Lynch & Co. on Thursday issued its latest assessment of the damage it has suffered from the credit crisis: its fourth straight quarterly loss and write-downs from failed investments approaching $40 billion.

The world's biggest brokerage announced a wider-than-expected $4.89 billion second-quarter loss and said it was selling assets — its stake in media company Bloomberg LP for $4.4 billion and its Financial Data Services Inc. subsidiary for $3.5 billion.

After Wells Fargo & Co. and JPMorgan Chase & Co. announced stronger-than-expected earnings this week, Merrill's results served as a reminder that the credit crisis isn't fading. Global banks and brokerages have been forced to take some $300 billion of write-downs in the past year, an amount that some believe could grow to $1 trillion before the turmoil has passed.

.....

Merrill's report was clearly disappointing to investors. The stock, which closed up 9.8 percent at $20.73 in regular trading amid a general stock market rally, plunged in after-hours trading after the results were announced.

http://news.yahoo.com/s/ap/20080718/ap_on_bi_ge/earns_merrill_lynch

---

Did they attempt to bury this bad news by reporting after the close? Hmmmmm?

[UpInArms]

43. Analysts see much higher 2008 loss for Merrill

http://www.reuters.com/article/bondsNews/idUSBNG11290820080718?sp=true

(Reuters) - At least seven analysts significantly widened their 2008 loss estimates for Merrill Lynch & Co (MER.N: Quote, Profile, Research, Stock Buzz) on Friday, a day after the investment bank posted a quarterly loss way above market expectations and unveiled plans to sell billions of dollars of assets to shore up capital.

"That management has to hold a yard sale to keep Merrill afloat is troubling enough, and now the margin for error for equity holders is getting precariously thin," Fox-Pitt Kelton analyst David Trone said.

Wall Street's third-largest investment bank said it has completed and is helping finance the long-expected sale of its 20 percent stake in Bloomberg LP, the news and financial data company, to Bloomberg Inc for $4.43 billion.

Merrill also said it intends to sell Financial Data Services Inc unit, which provides mutual fund administrative services and retail banking products, to an undisclosed party in a transaction valuing the unit at more than $3.5 billion.

"The Bloomberg sale is unfortunate," Bernstein Research analyst Brad Hintz. "Nevertheless, Bloomberg was not strategically important. We think the potential Financial Data Services Inc sale is fortuitous."

Merrill, which last November appointed John Thain as its chief executive officer, posted its fourth straight loss as it grapples with huge write-downs of complex debt securities.

<snip>

Merrill recorded $9.4 billion of write-downs from exposure to CDOs, residential mortgages, bond insurers and other investments for the quarter. It has written down about $40 billion since the credit crisis began a year ago, leading to net losses exceeding $19.2 billion.

...more...

[Hugin]

48. Who did they sell Bloomberg to?

Or hasn't it been done yet?

[UpInArms]

49. Merrill may still sell BlackRock, CreditSights says

http://www.reuters.com/article/bondsNews/idUSN1826673220080718?sp=true

NEW YORK (Reuters) - Merrill Lynch & Co (MER.N: Quote, Profile, Research, Stock Buzz) may still be forced to sell its valuable stake in fund manager BlackRock to bolster its balance sheet, research firm CreditSights said in a report.

Merrill, Wall Street's third-largest investment bank, posted a $4.9 billion loss on Thursday and sold its 20 percent stake in Bloomberg LP back to the news and financial data company for $4.43 billion to raise capital.

The latest results mean Merrill has racked up losses of $19 billion over the past four quarters, effectively wiping out four years of profit leading up to the year-long credit crisis.

The BlackRock stake "may be in play if hot stove losses continue, even though the company indicates otherwise," CreditSights analyst David Hendler co-wrote in a report, released late Thursday.

Merrill Chief Executive John Thain last month said a sale of its nearly 50 percent stake in BlackRock Inc (BLK.N: Quote, Profile, Research, Stock Buzz) was possible. On Thursday, Thain told reporters that Merrill decided against a BlackRock sale because it was a strategic asset.

Merrill's stake in BlackRock is currently worth about $12 billion.

...more...

[Demeter]

80. How Amusing! Co-op Just Had a Presentation from Merrill/BlackRock

regarding how they can help us with financial planning and investing our "working capital".

Sic Semper Gloria Mundi

[ozymandius]

12. Chip maker AMD posts further loss

Chip maker Advanced Micro Devices has reported its seventh quarterly loss in a row as it continues to lose market share to its rival Intel.

AMD lost $1.19bn (£596m) between April and June, even though sales were up on the same period a year ago.

http://news.bbc.co.uk/2/hi/business/7513387.stm

[ozymandius]

13. Freddie Mac mulling stock sale - report

LONDON (CNNMoney.com) -- Battered U.S. mortgage finance giant Freddie Mac is mulling a plan to raise capital by selling up to $10 billion in new shares, according to a published report.

Freddie's board met Thursday to consider options for selling new shares, the Wall Street Journal reported, citing sources familiar with the matter.

The move could help Freddie Mac and Fannie Mae avoid a government rescue, the newspaper said.

http://money.cnn.com/2008/07/18/news/companies/freddie_capital/?postversion=2008071804

[ozymandius]

14. Lawmakers Want Fannie-Freddie Aid Tied to Debt Limit (Update1)

July 18 (Bloomberg) -- Democratic lawmakers sought to put a constraint on the Treasury's request for unlimited power to buy and lend to Fannie Mae and Freddie Mac, a step that didn't temper Secretary Henry Paulson's optimism about a deal.

``Any expenditure under this bill would be subject to the debt limit,'' House Financial Services Committee Chairman Barney Frank told reporters in Washington yesterday, referring to the ceiling on federal government borrowing. That ``is a cap in effect on the amount'' of taxpayer funds officials can use to help finance the mortgage firms, he said.

Frank's comments reflect lawmakers' concern that the Paulson proposal may expose the taxpayer to unlimited risk and confer unprecedented authority. The Treasury chief reiterated his optimism about a deal by the end of next week, indicating he may be open to compromise on a measure he said will restore investor confidence in the beleaguered companies.

http://www.bloomberg.com/apps/news?pid=20601068&sid=a5bJwreJORH0&refer=economy

[Hugin]

28. I heard an interesting theory about this yesterday...

from one of my more sober sources.


It was theorized that all of the other Private Mortgage Banks/et al are going to push through their foreclosures as fast as possible and then dump them on Fannie/Freddie. I can see it happening as sort of a back door bailout to get those losses off of their books and dump them on the GSEs. All at Tax Payer expense.

Made too much sense, with the overall privatizing profit and socializing risk (and losses) Supply-sider mentality.

Hopefully, this move by the Demos is a means to circumvent this happening.

[AnneD]

61. That's what they did....

in the S&L debacle.

[ozymandius]

15. Freddie Gets Asia, Europe Buyers for $3 Billion Bonds (Update1)

July 18 (Bloomberg) -- Investors in Asia and Europe snapped up a $3 billion sale of Freddie Mac bonds at near record yields, a sign that the beleaguered mortgage finance company has the support of foreign central banks.

Investors outside North America including central banks bought 61 percent of the two-year notes yesterday, McLean, Virginia-based Freddie Mac said. That compares with 55 percent in its last sale of securities with the same maturity in May.

.....

Freddie Mac and Fannie Mae rely on foreign institutions to finance their business. The Federal Reserve held $983.9 billion of so-called agency debt on behalf of international investors as of July 16, up from $950.9 billion on June 4 and $1.83 billion in 2003.

http://www.bloomberg.com/apps/news?pid=20601068&sid=auCzH3jARWPU&refer=economy

[progressive_realist]

40. I'm no expert, but...

Doesn't "near record (high) yields" also mean "near record (low) prices"? And isn't this a sign of lack of confidence?

[Demeter]

81. Let's Throw Good Money After Bad!

Where are they going to find a bigger bunch of suckers than the ones they already have on board?

[Pale Blue Dot]

17. Layoffs 7/18

Good morning everyone. This first one today sounds like it's going to be devastating. But hey, the P/E ratios look good, right? :sarcasm:

Monaco Coach - Elkhart County, IN - 1,000 jobs lost

WAKARUSA — One of Elkhart County's largest employers is cutting more than a thousand jobs. Monaco Coach is permanently closing plants in Elkhart, Wakarusa and Nappanee. This enormous layoff will have the biggest impact on the small town of Wakarusa.
Multimedia

The Wakarusa plant had the most employees with over 1,000 workers in that location. The entire town’s population is only a little over 1,600.

It’s not only going to hurt hundreds of families, but it's going to hurt the town as well — everything from local businesses to property taxes.

Wakarusa Town Manager Tom Roeder told WSBT News a lot of the town budget came from Monaco. In fact, he says they paid about $200,000 in property taxes. Without that money, the town may have to cut services and employees as well.
http://www.wsbt.com/news/local/25558944.html

Palm Beach Post - Palm Beach, FL - 350 jobs lost

More than 300 Palm Beach Post employees have applied for buyouts and all have been accepted, according to an internal memo obtained by the Pulp.

Though the newspaper announced it would cut 300 jobs, there will be additional layoffs. According to the memo:

The number of applications was more than expected. However, we received too many in some areas and not enough in others, So we still expect to begin a small number of involuntary separations, or layoffs, the week of Aug. 18 in some departments as needed. Thanks to all who applied. You have greatly reduced the number of involuntary separations needed. Your contribution to PBNI over the years and your dedication and patience during these recent difficult times is greatly appreciated.

Those layoffs, according to sources, are expected to hit the newsroom, which had 81 buyout applications by the initial deadline on Friday. The newspaper plans to cut a total of 130 from the newsroom. Sources say that since the Friday dealine, several newsroom staffers have applied for the buyout and been accepted. The buyouts become official on August 11.
http://blogs.browardpalmbeach.com/pulp/2008/07/more_than_300_palm_beach.php

Joint Systems Manufacturing Center - Lima, OH - 83 jobs lost

LIMA, Ohio — A slowdown in military contract orders will result in the layoff next month of 83 workers at the Joint Systems Manufacturing Center, formerly the Lima Tank plant.

Plant manager Keith Deters said the job cuts are the result of the Marine Corps reducing orders for a mine-resistant vehicle. The plant, which has about 1,000 employees and is managed jointly by General Dynamics Corp. and the federal government, makes military vehicles and armor including the Abrams M1A2 tank and chassis for the U.S. Army Stryker combat vehicle.

Mr. Deters said some laid-off workers could be recalled if orders increase next spring.
http://toledoblade.com/apps/pbcs.dll/article?AID=/20080718/BUSINESS06/887179626

Ingham Regional Medical Center - Flint, MI - 100 jobs lost

Ingham Regional Medical Center plans to cut 100 positions starting Friday.
Advertisement

The hospital, owned by Flint-based McLaren Health Care Corp., said in a memo to employees it is paring its payroll because of financial challenges and a tough economic climate.

"This week, we are moving forward with more immediate and sustained efforts to bring our expenses into line with our revenues," Ingham Regional President and Chief Executive Officer Robert Wright said in the memo sent Tuesday.

Lance Rhines, service representative for Office and Professional Employees International Union Local 459, which represents some of the 2,200 people who work at Ingham Regional, said layoffs will include 20 managers or supervisors, 40 non-unionized employees and 40 unionized workers.
http://www.lansingstatejournal.com/apps/pbcs.dll/article?AID=/20080717/NEWS03/807170349/1004/NEWS03

Qantas Airlines - Worldwide - 1,500 jobs lost

The Qantas Group said today it would cut 1,500 jobs worldwide in response to sustained high oil prices and changing economic conditions. The chief executive of Qantas Airways Limited, Geoff Dixon, said that in addition to the job cuts, the airline would not implement its budgeted growth in the 2008/09 financial year and would cancel plans to hire a further 1,200 people for that growth.

Dixon said every effort would be made to achieve the job cuts through voluntary redundancy, early retirements, leave without pay, an accelerated leave program and converting positions from full-time to part time, however, there would be some compulsory redundancies.

"The jobs to be cut will be principally concentrated in non-operational areas, although operational positions will also go," said Dixon. "Over 20 per cent of our management and head office support jobs will be cut."

Dixon said the aviation industry was facing a major crisis throughout the world and Qantas needed to act decisively to ensure its future.
http://www.impactpub.com.au/aircargo/index.php?option=com_content&task=view&id=1935&Itemid=60

Quebecor World Inc. - Dubuque, IO - 23 jobs lost

The city recently approved a $100,000 urban development action grant, a zero-interest loan for the project. Quebecor initially would trim its work force from 369 to 333, but it would create 13 jobs with the new project for a net loss of 23 jobs, according to a memo filed by Heiar earlier this month.

Call it the price of modernization.

The upgrade would bring in updated equipment that would increase efficiency and require fewer employers, Heiar said.

The item was approved at a City Council meeting earlier this month in a 7-0 vote.
http://www.thonline.com/article.cfm?id=209238

Rubbermaid, Inc - ??? Potential jobs lost

The rising cost of plastic ingredients is forcing Newell Rubbermaid, Inc. to lay off workers, stop manufacturing some of its basic home and office products, and raise prices on janitorial and other products by as much as 22 percent, according to several sources, including the Associated Press (AP) via the Google Web site.

A spokesperson for Newell Rubbermaid told sources the company has not yet determined how many of its 22,500 employees will lose their jobs, but that the company would divest, downsize, or exit product categories accounting for up to US$500 million in sales, including some of its plastic floor mats and storage bins. Meanwhile, prices for higher-margin items, such as janitorial products and stackable food containers are expected to rise, it said.

Newell Rubbermaid has already boosted prices twice this year. It plans a third round of increases in October and will begin adjusting prices for resin products each quarter in January, the AP/Google site said.

Newell Rubbermaid has said it expects its cost-cutting efforts to save between $175 million and $200 million when they are fully implemented by 2010.

The company is scheduled to release second-quarter results on July 31.
http://www.issa.com/?m=news&event=view&id=1810&lg=

Activision Blizzard - ?? jobs lost

In an exclusive interview with MCV, Tippl claimed that the Activision Blizzard operation will need to shed staff in the short term – but softened the blow by pointing out that the company’s headcount is likely to grow in the future.

“With every merger, there is overlap and redundancy, and so the same will be true here. Of course we’re going to go to our customers with one face. We don’t need two sales forces,” he explained.

“Having said that, if you look at our industry, it’s rapidly growing – last year it grew 30 per cent. So over time I expect our headcount to grow.”

“But in the short term we will exterminate some of our overlap through redundancy – but we will treat people respectfully.”
http://www.mcvuk.com/news/31280/Activision-Blizzard-to-suffer-job-cuts

[Pale Blue Dot]

19. An Alternative to Layoffs- California's Partial Unemployment Program

With the difficult economic climate of today’s markets cutting into profit margins across almost all sectors, employers may be considering layoffs as a way to minimize financial hardship. California employers, however, should be aware that there is an alternative to layoffs through California’s Work Sharing, or “partial unemployment” Program. The goal of the Work Sharing program is to ease the difficulties of a layoff situation for both the employer and the employee – while the employee avoids a period of total unemployment, the employer can avoid the costs of hiring and retraining new employees when business conditions improve. The program gives the employer the option to, instead of discharging an employee, allow the employee to work a reduced schedule and collect the percentage of their weekly unemployment insurance benefit amount equal to the percentage reduction in wages for that week.

To be eligible, the employer must show that a minimum of 10% of the regular permanent workforce requires a reduction in wages and hours worked, and that at least 2 employees, but not less than 10% of the regular permanent workforce, participate in the program. Employers with employees subject to a collective bargaining agreement must also obtain the written approval of the bargaining agent. To apply, employers must submit their plan for approval to the California Employment Development Department (“EDD”) using form DE 8686 (http://www.edd.ca.gov/pdf_pub_ctr/de8686.pdf). Each Work Sharing Plan is effective for six months, but the employer may be approved for subsequent plans so long as it continues to meet the criteria for participation.

http://www.callaborlaw.com/archives/legal-information-an-alternative-to-layoffs-californias-partial-unemployment-program.html

[radfringe]

34. sounds good

how well is it working? pros/cons?

[UpInArms]

27. Citigroup cuts 6,000 staff in second quarter

http://www.marketwatch.com/news/story/citigroup-cuts-6000-staff-second/story.aspx?guid=%7B426A3665%2DEEBB%2D4C2A%2DAC3E%2D4A68AE5E9D39%7D&dist=hplatest

NEW YORK (MarketWatch) -- Citigroup (C: 17.97, +1.50, +9.1%) said Friday it reduced headcount by about 6,000 in the second quarter and about 11,000 in the first half of 2008. The bank Citigroup, the largest U.S. bank by assets, reported Friday a $7.2 billion write-down and a $2.5 billion loss in the second quarter. But the loss and write-downs were less than expected and Citi shares rose 8% in pre-open trade.

[UpInArms]

30. Sony Ericsson plans to cut work force by 2,000

02. Sony Ericsson plans to cut work force by 2,000
9:27 AM ET, Jul 18, 2008

03. Sony Ericsson: Savings to also from lower R&D expenses
9:26 AM ET, Jul 18, 2008

06. Sony Ericsson: 3G market share 16%-17%
9:23 AM ET, Jul 18, 2008

08. Sony Ericsson: To continue to launch 7-10 products a quarter
9:21 AM ET, Jul 18, 2008

10. Sony Ericsson President: Good growth in Latin America
9:19 AM ET, Jul 18, 2008

[UpInArms]

20. dollar chart

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

Last trade 72.243 Change +0.195 (+0.27%)

Oil at $130 Pushing US Dollar and Stocks Higher

http://www.dailyfx.com/story/bio1/Oil_at__130_Pushing_US_1216327159658.html

Oil prices have continued to fall, helping to lift the US dollar and stocks. The reversed roles of oil and stocks, with the former falling and the latter rising comes as a big relief to traders around the world who may have feared for the worst – crude prices hitting $150 a barrel and the Dow falling below 10,500. Lower oil prices act as a free tax cut for consumers and businesses who are currently crumbling under the weight of rising food and energy prices. The answer to many of the Fed’s problems would be oil at $100 a barrel. Since Monday, oil prices have fallen close to $18 or more than 12 percent, which is in line with the degree of prior corrections that we have seen in the commodity. This has made investors cautiously hopeful that the stock market has bottomed and oil prices have topped. Whether or not this is true remains to be seen. For the sake of the global economy, we hope that oil prices continue to ease, but we have seen similar recoveries over the past 2 years (oil charts) be nothing more than a hiccup. As for the US dollar, it has strengthened significantly against the Japanese Yen and recovered impressively against the Euro and British pound. Since the beginning of 2007, there has been a strong correlation between USD/JPY and the S&P500 Index, which explains why the currency pair has rallied more than 200 pips. A strong dollar not only helps to lower oil prices but it also increases investor confidence. The Financial Times reported that the weakness of the dollar and the problems in the US capital markets are encouraging Sovereign Wealth funds to look at diversifying out of dollar denominated assets. Economic data from the US was mixed. Housing starts, building permits and jobless claims were all better than expected but the Philadelphia Fed index failed to rebound. The improved housing market numbers are somewhat distorted by a change in the NYC building code which has triggered a sharp rise in multi-family starts in the Northeast. Claims on the other hand are unambiguously positive. There will no US data due for release tomorrow which means that oil and equities will continue to drive the price action of the US dollar.

...more...

Dollar Damaged By Poor Equity Results -Will Citi Compound the Problem?

http://www.dailyfx.com/story/bio2/Dollar_Damaged_By_Poor_Equity_1216374420311.html

A relatively quiet and data free night in the currency market as FX trading continues to be influenced by macro rather than micro factors. After the US equity close yesterday Microsoft, Google and most importantly Merrill Lynch reported disappointing results stoking fears that US economy may be on the verge of a recession while the financial sector troubles show no signs of improvement.

The misses in MSFT and GOOG had an instant impact on USDJPY which dropped below the 106.00 level in early European trade before bouncing slightly. Yesterday the pair hit a high of 107.17- its best showing in a week - as risk appetite appeared to have returned to the market. But those flows may be quickly reversed if US equities close negative today and could pull the pair back towards 105.00 figure if investor sentiment sours once again.

On the economic front, German Producer Prices rose the most in 26 years as price pressures continue to plague the 15 member union. The news kept the EURUSD bid on further speculation of more rate hikes. On the other hand EZ Trade Balance deteriorated far worse than expected printing at –4.6 Billion euros versus forecast of –1.5 Billion as higher euro and weaker global demand clearly hit exports hard. The market had absolutely no reaction to the report, preferring to focus on the weakness in US equity results. However, today’s EZ trade data shows a troubling trend of increasing trade deficits over the past several months. If that trend intensifies it may damage the euro as time goes on. One of euro’ s strongest advantages over the greenback has been the much better balance sheet position of EZ vis a vis the US. While US Current Account deficit continues to be massive, the fact that the EZ to is also slipping into a negative trade position weakens the euro bulls argument of euro’s financial superiority and could spur some speculative outflow from the currency if the situation worsens as we approach the end of 2008.

Finally, with no economic data on the calendar all eyes will be on Citibank which reports earnings before the US open. If the financial behemoth disappoints it could drag stocks lower and push EURUSD above 1.5900 before the weekend. If on the other hand it surprises to the upside, the buck could close out the week on an uptick as investor sentiment improves.

...more...

[UpInArms]

26. Game of Hot Potato Revealed: Funds bought M Fadesa debt from M Stanley -sources

http://www.reuters.com/article/bondsNews/idUSL182796620080718?sp=true

LONDON, July 18 (Reuters) - "Vulture funds" bought debt in Spain's Martinsa Fadesa (MFAD.MC: Quote, Profile, Research, Stock Buzz), now in administration, from U.S. bank Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) in the secondary market, sources familiar with the situation said on Friday.

Morgan Stanley sold some of its loans in Fadesa, the largest Spanish property firm, to reduce its risk, the sources said.

Distressed debt funds, including some from Morgan Stanley, Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz), Japan's Shinsei Bank, Citigroup (C.N: Quote, Profile, Research, Stock Buzz), and Collateralised Debt Obligation fund Coltrane, bought Fadesa debt at discounts of as much as 50 percent, a source involved in the company's administration said on condition of anonymity.

Morgan Stanley, Lehman and Citigroup declined to comment, while Coltrane and Shinsei could not immediately be reached.

"There are a number of funds of private equity and hedge funds that have raised capital to take advantage of these opportunities," said Mark Fennessy, a restructuring partner at Orrick, a law firm in London.

"Access to capital is at a premium, and often investment banks need to sell risk-weighted assets in order to ensure that they have sufficient capital resources," he said.

In Fadesa's case, it was the hedge funds -- not Spain's regional banks, which are used to cosy relationships with their clients -- that imposed tough conditions on a refinancing deal earlier this year aimed at saving the company from insolvency.

...more...

[Tandalayo_Scheisskopf]

31. NYMEX open

The usual morning follies of upward pressure in Energy futures. Pressure is feeble against what seems to be some spirited downward forces. Broke 130 for a second and went right down. Yahoo indicators showing up.

If it's like yesterday, the real action will be after lunch and in the globex.

On edit: Tried up, moving back down. My sense is that shorts are exceeding longs in the market right now.

[Hugin]

32. ~09:40 EDT: And, they're open!

Index Last Change % change
• DJIA 11427.20 -19.46 -0.17%
• NASDAQ 2285.89 -26.41 -1.14%
• S&P 500 1256.53 -3.79 -0.30%

[Hugin]

35. ~Oh, ten hundred EDT: Still red.

Index Last Change % change
• DJIA 11396.99 -49.67 -0.43%
• NASDAQ 2276.79 -35.51 -1.54%
• S&P 500 1254.13 -6.19 -0.49%

Oh Joy! Oh Joy! Losses!

(If I hear one more person say... Buy into Panic, Sell into Euphoria. I'm going to :hurl: )

[Hugin]

36. ~10:10 ET: Losses less than expected! Oh joy!

Index Last Change % change
• DJIA 11417.02 -29.64 -0.26%
• NASDAQ 2277.19 -35.11 -1.52%
• S&P 500 1255.60 -4.72 -0.37%

[AnneD]

51. Prag....

step away from the kool aid.....It is radioactive.

[TrogL]

38. 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

2008-06-06 Friday, June 6 0.981643 USD
2008-06-09 Monday, June 9 0.978186 USD
2008-06-10 Tuesday, June 10 0.976467 USD
2008-06-11 Wednesday, June 11 0.983284 USD
2008-06-12 Thursday, June 12 0.977517 USD
2008-06-13 Friday, June 13 0.972573 USD
2008-06-16 Monday, June 16 0.979432 USD
2008-06-17 Tuesday, June 17 0.980296 USD
2008-06-18 Wednesday, June 18 0.98174 USD
2008-06-19 Thursday, June 19 0.987167 USD
2008-06-20 Friday, June 20 0.982994 USD
2008-06-23 Monday, June 23 0.984155 USD
2008-06-24 Tuesday, June 24 0.98668 USD
2008-06-25 Wednesday, June 25 0.986777 USD
2008-06-26 Thursday, June 26 0.988045 USD
2008-06-27 Friday, June 27 0.988142 USD
2008-06-30 Monday, June 30 0.981836 USD
2008-07-01 Tuesday, July 1 0.978474 USD
2008-07-02 Wednesday, July 2 0.987459 USD
2008-07-03 Thursday, July 3 0.980008 USD
2008-07-04 Friday, July 4 0.980008 USD
2008-07-07 Monday, July 7 0.982898 USD
2008-07-08 Tuesday, July 8 0.979912 USD
2008-07-09 Wednesday, July 9 0.989315 USD
2008-07-10 Thursday, July 10 0.989805 USD
2008-07-11 Friday, July 11 0.990786 USD
2008-07-14 Monday, July 14 0.994036 USD
2008-07-15 Tuesday, July 15 0.998502 USD
2008-07-16 Wednesday, July 16 0.998004 USD
2008-07-17 Thursday, July 17 0.998203 USD

Current values

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

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9956 0.9976 0.9954 0.9969 +0.0033 +0.33% 
CD.U08 Sep 2008 0.9942 0.9970 0.9942 0.9970 +0.0043 +0.43% 
CD.Z08 Dec 2008 0.9991 0.9991 0.9991 0.9921 -0.0051 -0.51% 
CD.H09 Mar 2009 0.9757 0.9757        0.9916 -0.0051 -0.51% 
CD.M09 Jun 2009 0.9880 0.9880 0.9880 0.9911 -0.0050 -0.50% 
CD.U09 Sep 2009 0.9865 0.9865 0.9865 0.9907 -0.0050 -0.50% 
CD.Z09 Dec 2009 0.9845 0.9845 0.9845 0.9903 -0.0050 -0.50%  

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

Market          Open    High    Low     Last    Change   Pct 
AUSTRALIAN $/CANADIAN $ (CME:ACD)
ACD.U08 Sep 2008 0.9698 0.9698 0.9698 0.9698 +0.0022 +0.23%   
EURO/BRITISH POUND (NYBOT:GB)
GB.U08.E Sep 2008 (E) 0.7928 0.7934 0.7928 0.7927 0.0000 0.00%    
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.U08.E Sep 2008 (E) 167.48 168.03 167.48 167.88 +0.24 +0.14%     
EURO/US$ (SMALL) (NYBOT:EO)
EO.U08.E Sep 2008 (E) 1.5778 1.5799 1.5772 1.5799 +0.0029 +0.18%   

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

The September Canadian dollar closed down 50 points at .9928 today. Prices closed nearer the session low today and
scored a bearish "outside day" down on the daily bar chart. Bulls still have the slight near-term technical advantage.


Analysis

What really happened was the greenback took off like a rocket in the last hour of trading and threw all the numbers out of whack.

[TrogL]

73. Update

Current values

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

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9956 0.9976 0.9938 0.9938 +0.0002 +0.02% 
CD.U08 Sep 2008 0.9942 0.9970 0.9930 0.9927 +0.0003 +0.03%  
CD.Z08 Dec 2008 0.9991 0.9991 0.9991 0.9921 +0.0003 +0.03% 
CD.H09 Mar 2009 0.9757 0.9757        0.9916 +0.0003 +0.03% 
CD.M09 Jun 2009 0.9880 0.9880 0.9880 0.9911 +0.0004 +0.04% 
CD.U09 Sep 2009 0.9865 0.9865 0.9865 0.9907 +0.0005 +0.05% 
CD.Z09 Dec 2009 0.9845 0.9845 0.9845 0.9903 +0.0006 +0.06% 
 

Blather

The September Canadian dollar was firmer at midday Friday. Bulls still have the slight near-term technical advantage. Bulls' next upside price objective is producing a close above solid chart resistance at this week's high of 1.0018. The next downside price objective for the bears is closing prices below solid technical support at .9850.


Analysis

OK, the new guy's started doing mid-day numbers. I'd love to know what he means by "firmer".

[Tandalayo_Scheisskopf]

39. NYMEX update.

Oil keeps trying to rally and keeps getting smacked down. Some people really want it below that 130 support.

On Edit: Bloomberg is running the following on its front page. It might have something to do with things: http://www.bloomberg.com/apps/news?pid=20601087&sid=aTacplWsM2cc&refer=home

On Edit2: Oil just broke 130 support again, moments ago. That might be the signal for more downside activity, a head and shoulders for the day.

[Hugin]

41. Thanks for the update.

The NYMEX is going to be a real driver for the next few sessions. Interesting to hear about the busted rallies.

There's got to be some speculators out there who don't want a Tanker Full of Oil delivered to their doorstep. (They
bought high and not now or then could they afford it.)

[Tandalayo_Scheisskopf]

44. I agree.

The market is up again, but heading back down. The resistance to the upside is real feeble, but there are evidently people who do not want it below support. Like I said before, if today is like tomorrow, the real downside action will be after lunch and afterhours. There are no real upside pressures(Fuck that Nigeria news. It stinks to high heaven.) and a lot of reason to short.

[AnneD]

53. SEC short of wisdom on short-selling

As the dust settled from the rout of financial stocks earlier this week, the little clown cars came zigzagging up the Street. Have no fear, the Securities and Exchange Commission is on the case.

Christopher Cox, the regulator whose only visibility during this financial crisis has been to proclaim Bear Stearns' soundness just hours before its collapse, will shake down every short-seller in America if he must to find someone he can blame for the financial flameout.

On Tuesday, Cox announced the SEC is restricting short sales of Fannie Mae and Freddie Mac and a gaggle of other financial firms. The new rules, which take effect Monday, are a smoke screen, but the message behind them is disturbing. It's as if the country's market regulator has no confidence in the working of our markets.

And Phil Gramm wonders why we whine.

The SEC's plan landed with all the grace of Miss America because it's just as superficial. What Cox did, essentially, was ban "naked short-selling" in 19 financial institutions.


more.......

www.chron.com/disp/story.mpl/business/steffy/5894371.html

More Steffy, what can I say.

[specimenfred1984]

63. Excellent post, the article nails it

It's all a show with the repukes, "manufactured consent". The repukes have no conscience, no moral compass, nothing to direct them as they are empty inside, all they do is react to their own crimes and try to misdirect attention away from them.

[AnneD]

69. If Steffy were a baseball player....

he'd have one hell of a batting average. His columns are intelligent, well written, frequently humorous, and immensely understandable.

[antigop]

54. Marketeers, I'd like your opinions on this article : Shorting makes "billions" for fund managers

For some time, I have wondered about the practice of "securities lending".

http://www.ft.com/cms/s/0/8919240e-543e-11dd-aa78-000077b07658.html

Conservative fund management firms and custody banks are making billions of dollars from short-selling by lending stocks to facilitate such trades in exchange for lucrative fees.

Even as short-sellers attract blame for driving big falls in financial stocks, financial services firms – including those targeted by short-sellers – are profiting from the investing strategy.

US prime brokerage firms, most of which are owned by big Wall St banks, will reap revenue of $11bn (£5.5bn) this year, according to a recent study by Tabb Group, a research business.

Prime brokerage units provide services to hedge funds. They do not reveal their financial results, but executives who work for the units say they make most of their money from lending to short-sellers.

Fund management companies gain the lion’s share of fees derived from lending the shares, and also the bulk of profits from reinvesting the collateral which short-sellers must provide them.

This quote in particular from the article:

These institutional investors, such as mutual funds and pension funds, which are frequently in an adversarial position towards short-sellers, thus earn billions of dollars from the practice.

If you look through your 401(k) prospectus, I'll bet you will find that some of your 401(k) funds do securities lending. The article doesn't specifically mention 401(k)'s -- it just says "mutual funds and pension funds". However, technically, 401(k) funds are pension funds -- they are defined contribution pension funds. (Most people, I think, tend to think of pension funds only as defined benefit pension funds.)

So here is my question: If your 401(k) fund does securities lending and makes money off of that practice, where do the profits go -- back to the 401(k) fund shareholders? Into the pockets of the company managing the fund? Into the pockets of the company (your employer) who sponsors the 401(k) plan?

Please note that State Street made $303 million in fees from it stock lending business IN THE FIRST QUARTER! Out of that $303 million, how much was made (if any) LOANING SHARES FROM THE 401(k)'S THAT STATE STREET MANAGES?

<edit to add>...not sure if I'll be able to check back in this afternoon, but I will look for any replies this evening. TIA.

[antigop]

55. Second question: What are companies allowed to use as collateral when they borrow securities?

Um, like, maybe CDOs, or something?

[Hugin]

57. These days... A wink and a handshake.

and I think they view the handshake as too much to ask.

[Hugin]

56. The push for 401(k)s and Social Security...

privatization only makes sense if this is what is being done. Of course, I doubt that the profits go back to the
fund shareholders. It's heaps of stuff laying there to be used.

I think your suspicions of this are justified, in other words.

But, I have no actual knowledge... Probably by design. TPTB like it that way. Dumbed down and out of the loop.

[antigop]

58. And it would make sense that people are not allowed to get "their money" out of their 401(k)

unless they leave the company or retire.

Maybe my tinfoil hat is on too tight.

[antigop]

60. AIG to absorb $5 billion losses on securities lending

Not sure what year this article is from...

http://www.bloomberg.com/apps/news?pid=20601103&sid=aoGjre8ctFFk&refer=us

American International Group Inc. plans to absorb losses for a dozen insurance units after their securities-lending accounts suffered $13 billion of writedowns tied to the subprime-mortgage collapse during the past year.

The world's largest insurer will assume as much as $5 billion of any losses on sales of the investments, up from a previous commitment of $500 million, said Christopher Swift, vice president for life and retirement services, in an interview. AIG also will inject an undisclosed amount of capital into some of the subsidiaries, he said.

Moody's Investors Service and A.M. Best Co. both cited the writedowns in May when they downgraded New York-based AIG's credit ratings. State regulators in Texas said they didn't know AIG was investing cash collateral from the securities-lending business in subprime-linked assets and were concerned the insurance units hadn't put aside enough capital to cover potential losses.

``We were aware of this portfolio, but we didn't have transparency on what was in it because it was off-balance sheet'' in the company's statutory accounting reports, said Doug Slape, chief analyst at the Texas Department of Insurance in Austin, which oversees three AIG insurers that have suffered about 60 percent of the writedowns.

"State regulators in Texas said they didn't know AIG was investing cash collateral from the securities-lending business in subprime-linked assets and were concerned the insurance units hadn't put aside enough capital to cover potential losses."

In this case, cash was put up as collateral, but AIG put the money in subprime-linked assets.

[Tandalayo_Scheisskopf]

71. And that is why...

Insurance rates keep going up. We need financial system regulations again, like revamped and stronger Glass-Steagall.

[AnneD]

59. Good weekend reading......

The Five Dumbest Things on Wall Street This Week: July 18



1. Naked Stupidity From the SEC
Don't even think of getting naked on Wall Street these days. And by no means should you get naked anywhere near Fannie or Freddie.

The consequences will surely be dire now that SEC Chairman Chris Cox issued an executive order banning naked short-selling of Fannie Mae(FNM - Cramer's Take - Stockpickr) or Freddie Mac(FRE - Cramer's Take - Stockpickr) shares. Naked short-selling involves selling shares short without having borrowed some first.

Tuesday, Cox announced to the world that the SEC was taking emergency action to prohibit the naked short-selling of shares of the two gigantic mortgage firms.

"In addition to this emergency order, we will undertake a rule making to address the same issues across the entire market," Cox said to Congress.

more.....


www.thestreet.com/story/10427301/1/the-five-dumbest-things-on-wall-street-this-week-july-18.html


A long read but funny and illuminating.

[Ghost Dog]

65. European Stocks Gain for Third Day

July 18 (Bloomberg) -- European stocks climbed for a third day, capping the first weekly gain since May, after Citigroup Inc.'s smaller-than-estimated loss outweighed disappointing earnings at Merrill Lynch & Co. and Microsoft Corp.

Royal Bank of Scotland Group Plc and BNP Paribas SA led the Dow Jones Stoxx 600 Banks Index to its biggest three-day advance in five years. Air France-KLM Group, Europe's largest airline, and Daimler AG, the world's second-biggest maker of luxury cars, also rallied for a third day as oil posted a weekly decline.

The Stoxx 600 added 1.6 percent to 280.69, extending this week's gain to 3.8 percent. Shares climbed as Citigroup joined JPMorgan Chase & Co., Wells Fargo & Co. and Nokia Oyj this week in reporting better-than-expected earnings.

``Investors were very worried heading into this week and Citigroup's results are just good enough to reassure people,'' said Jonathan Monk, a U.S.-stock fund manager at Aerion Fund Management Ltd. in London, which oversees about $23 billion. ``The rally could last longer than most expect. The banks are starting to get on top of the issues.''

About $14 trillion has been wiped off the value of global equities since October as more than $447 billion in credit- related losses prolong the global economy's slump and higher commodity prices stoke inflation. Banks worldwide have raised $331 billion to offset losses stemming from the financial market turmoil and slowdown in lending.

/... http://www.bloomberg.com/apps/news?pid=20601085&sid=aLLw990WAASw&refer=europe

[Ghost Dog]

66. Euro zone growth to hit trough in Q2, Q3-Trichet

DUBLIN/FRANKFURT, July 18 (Reuters) - Euro zone economic growth is likely to be weak in the second and third quarters before staging a recovery, and second-round inflation effects need to be prevented, ECB President Jean-Claude Trichet said.

"Our base-line scenario is that we will have a trough in the profile of growth in the euro area in the second and third quarters of this year and, following this, a progressive return to ongoing moderate growth," he said.

Trichet made the comments in an interview with four European newspapers conducted on July 11 and published on Friday.

Growth risks included the "very significant financial market correction, the possible further increases in oil and commodity prices, and the possible unwinding of global financial imbalances", Trichet said, in a transcript of the interview which was published on the ECB's website.

/... http://www.reuters.com/article/marketsNews/idINSP6594820080718?rpc=44

ECB's Jean-Claude Trichet interview with European papers: http://www.reuters.com/article/marketsNews/idINSP9410420080718?rpc=44

[Ghost Dog]

67. German June Producer Prices Increase Most in 26 Years

July 18 (Bloomberg) -- German producer prices rose at the fastest pace in 26 years in June, adding to pressure on the European Central Bank to keep interest rates high even as economic growth slows.

Prices for goods from newsprint to plastics increased 6.7 percent from a year earlier, the most since March 1982, after rising an annual 6 percent in May, the Federal Statistics Office in Wiesbaden said today. Economists expected a 6.5 percent gain, the median of 25 estimates in a Bloomberg News survey shows.

/... http://www.bloomberg.com/apps/news?pid=20601085&sid=aYqXWIX2j4u8&refer=europe

[Ghost Dog]

68. U.K. Budget Deficit Balloons to Widest Since 1946

July 18 (Bloomberg) -- The U.K. budget deficit ballooned to the widest since records started in 1946, adding pressure on Prime Minister Gordon Brown to ease his decade-old borrowing rules.

The shortfall was 24.4 billion pounds ($49 billion) in the three months through June, the Office for National Statistics said today. Last month, the deficit expanded to 9.2 billion pounds, more than the median forecast of 7.4 billion pounds in a Bloomberg News survey of 17 economists.

Brown's pledge to hold debt below 40 percent of gross domestic product is under threat as the economy edges towards its first recession since the early 1990s. The government, which has already cut taxes, may find it hard to meet its March forecast of a 43 billion-pound deficit this year as the slowdown saps revenues. Government bond yields soared today.

Relaxing the rules ``would in essence offer scope for more spending and lower tax revenues, a larger budget shortfall in the years ahead and more gilt issuance, and it deals a major blow to the credibility of macroeconomic policy making in the U.K.,'' said Russell Jones, the head of global fixed-income and currency research in London at RBC Capital Markets.

Chancellor of the Exchequer Alistair Darling may change the rules on borrowing later this year, a Treasury spokesman said yesterday. He dismissed a Financial Times report that the exercise would initially result in higher borrowing as ``pure speculation.''

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

[Tandalayo_Scheisskopf]

72. NYMEX 4:15 EDT Update

The market floor is closed now, but trading continues on the GLOBEX Electronic Trading System. The action on the floor today saw oil trading in a tight range around 130, with obvious pressure from the bulls to keep it above that important price support. Now that the trading floor is closed and traders are heading to their summer getaways, the GLOBEX is running the price of a barrel of oil back down, just as they did yesterday. Presently, oil is at 128.94 on an 8/08 contract and that is .34 off the opening.

In the broader market, grains and metals were also down.

If one thing is apparent from the last week, the broader market wants the price of the barrel of oil down. There is apparently institutional resistance that is trying to prop up the price, so it does not head to the next resistance level, but it appears that the bears are not particularly interested in playing their game. The sense I get is that once the trading moves to GLOBEX, the people that want out are in control.

Next week should be interesting, to see whether the downward trend continues.

[ozymandius]

75. Ending: Dow overcame "the vapors" at the last minute.

Dow 11,496.57 Up 49.91 (0.44%)
Nasdaq 2,282.78 Down 29.52 (1.28%)
S&P 500 1,260.68 Up 0.36 (0.03%)
10-Yr Bond 4.081% Up 0.043
NYSE Volume 5,593,507,500
Nasdaq Volume 2,288,737,250

16:30 ET
Session Ends Flat, Week Ends Higher

Financial stocks led a late-session push to help the stock market finish the session just above the unchanged mark after spending virtually the entire session in the red. Though crude prices closed lower for the fourth straight session, weakness in the tech sector, the largest in the S&P 500, limited gains. Despite the lower finish, stocks still finished the week 1.7% higher.

The financial sector finished 1.1% higher, bringing its week-to-date advance to 11.4%. Citigroup (C 19.35, +1.38) provided leadership after reporting a smaller-than-expected loss for its second quarter. Citi also announced write-downs of more than $7 billion in its securities and banking unit, though the adjustments were 40% less than the first quarter.

Fannie Mae (FNM 13.40, +2.47) and Freddie Mac (FRE 9.18, +0.85) also helped sentiment in the financial sector. Freddie reiterated it has committed to its regulator, the Office of Federal Housing Enterprise Oversight (OFHEO), to raise $5.5 billion of new capital, but stated today it does not have any immediate plans under current market conditions. Freddie reiterated it exceeded its regulatory capital requirements, in addition to the 20% mandatory target capital surplus, at March 31.

Despite finishing slightly higher, Merrill Lynch (MER 30.91, +0.18) played a less supportive role throughout the session after announcing second quarter losses that were actually larger than expected.

Large-cap tech names countered the financial sector’s advance as heavyweights Microsoft (MSFT 25.86, -1.66) and Google (GOOG 481.32, -52.12) both reported disappointing earnings results. Their combined influence in the sector proved too much for IBM (IBM 129.89, +3.37). Big Blue reported solid results for the quarter, earning $1.98 per share. Analysts were expecting just $1.82 per share, on average. In turn, the Nasdaq 100 declined 1.6%.

Before finishing 0.5% lower at $128.70 per barrel, crude prices traded back and forth between gains and losses during the session. Crude's lower finish brought its downturn to nearly 11.4% for the week. Oil’s decline can be taken as generally positive for stock investors as it reduces inflationary pressures associated with fuel prices.

Treasuries saw their share of selling pressure during the session. The 10-year Note finished 26 ticks lower, lifting its yield to 4.09%. The yield on the 10-year Note increased roughly 28 basis points, a significant gain for Treasuries, from the week’s low. That low coincided with a disappointingly high CPI report earlier in the week. ..Nasdaq 100 -1.6%. ..S&P Midcap 400 -0.2%. ..Russell 2000 -0.5%.

[UpInArms]

76. I do believe I've got the vapors now - from $3 trillion to $62 in 7 years -

just posted this one on LBN

http://www.reuters.com/article/bondsNews/idUSN1859388220080718

US CREDIT-Large defaults could test CDS market
Fri Jul 18, 2008 4:43pm EDT


NEW YORK, July 18 (Reuters) - The credit derivative market,
which has ballooned to over $62 trillion to dwarf the
underlying debt market, has yet to experience the default of a
significant issuer since its rapid growth.

Corporate defaults, however, are on the uptick and expected
to accelerate, and the number of companies with credit default
swaps trading at distressed levels are also on the rise,
indicating the market may soon be tested.

"I don't see a lot of risk around one big event. I think
the market, particularly following the auto sector stresses in
2005, has prepared for such episodes," said Matthew Mish, high
yield credit strategist at Barclays Capital in New York.

"I'm more worried about an environment characterized by a
high frequency of defaults among large issuers," he added. "The
related settlement and back-office issues would be more complex
and laborious. But I would not expect a breakdown in the
market."

Some lags in processing credit derivative trades have made
regulators and market participants nervous there could be
confusion if a large borrower, or even worse a counterparty,
failed.

In many cases the amount of protection written on a
borrower's debt also outstrips the amount of bonds outstanding,
necessitating an auction to determine the cash value of the
contracts.

Volumes in credit derivatives were significantly smaller,
at less than $3 trillion, when the market last saw significant
corporate defaults, capped by Enron Corp in 2001 and WorldCom
in 2002.

...more...

[ozymandius]

78. As always: who has the largest amount of exposure?

There you will find the greatest risk of collapse. Then the question will be asked again: "who is too big to fail?"

[DemReadingDU]

77. RTTnews: Audio interview with Nouriel Roubini

7/18/08 INTERVIEW: NYU Economics Professor Nouriel Roubini:
More Bank Failures To Come, Lehman To Go “Belly Up”

http://www.rttnews.com/Audio2/2008/July/18/INTV-ROUBINI-BanksFail-07.18.08.mp3


edit: That is the title of the mp3 file on the home page
http://rttnews.com/

[DemReadingDU]

79. Real-Estate Financier's Death Hints At Trouble for Lenders

Real-Estate Financier's Death Hints At Trouble for Lenders By JONATHAN KARP
July 16, 2008; Page A1

PHOENIX -- Flamboyant real-estate financier Scott Coles penned a farewell letter, put on a tuxedo and climbed into bed, where he was later found dead in what police believe was a suicide. The tragedy last month is drawing attention to the condition of the nation's commercial real-estate market, which is beginning to show mounting signs of distress.

Mr. Coles, who was 48 years old, had built his company, Mortgages Ltd., into one of Arizona's biggest private lenders during the real-estate boom. It specialized in short-term, high-interest-rate loans to commercial developers -- builders of malls, office parks, condominiums and other projects -- who either had bad credit or a need for quick cash with no red tape. But he overreached, and the debacle that has devastated the U.S. housing market the past year is now squeezing Mortgages Ltd.

To keep growing and outrun the problems, Mr. Coles leaned increasingly on loans -- totaling roughly $200 million -- from an obscure company, Radical Bunny LLC, run by his accountant. He also sought to raise new money on terms that undermined his existing investors. These moves triggered the departure of several senior managers at the firm in recent months.

Mr. Coles cut a larger-than-life profile. He owned several homes, including two adjacent mansions in Phoenix's exclusive Biltmore area, and a nearby estate with its own private 18-hole pitch-and-putt golf course. A regular on the Arizona charity circuit, he contributed to some 100 organizations and socialized with members of the Phoenix Suns basketball team, some of whom were his investors. His funeral drew a standing-room-only crowd of 700 people.

In the weeks before his death, Mr. Coles was beset by personal and professional difficulties. His second wife, 26-year-old Ashley Coles, had just left him for a 48-hour trial separation, according to the police report on his death. A lawyer for Ashley Coles declined to comment. At the same time, a string of lawsuits brought by Mortgages Ltd.'s borrowers and investors in Arizona Superior Court alleged fraud, racketeering and breach of fiduciary duty, among other things.

more...
http://online.wsj.com/article/SB121617220846656637.html

[Demeter]

82. It Wasn't Until I Started Following This Thread SEries That I Knew How Many Ways to Commit Fraud

existed out there, with new twists on old themes dreamed up almost daily.

Thanks, Everybody (I think).

Beginning to think ignorance truly was bliss.

[DemReadingDU]

83. It's amazing the shell games have continued so long

I'm glad to have found these SMW threads to read, to become informed.

Ignorance may be bliss, but knowledge is power!

We can prepare, as much as we are able, by stocking food, cash, and other necessities.

Those who are clueless, will have nothing. :(