STOCK MARKET WATCH, Friday September 5

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday September 5, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 138
DAYS SINCE DEMOCRACY DIED (12/12/00) 2784 DAYS
WHERE'S OSAMA BIN-LADEN? 2509 DAYS
DAYS SINCE ENRON COLLAPSE = 2800
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 September 4, 2008

Dow... 11,188.23 -344.65 (-2.99%)
Nasdaq... 2,259.04 -74.69 (-3.20%)
S&P 500... 1,236.83 -38.15 (-2.99%)
Gold future... 803.20 -5.00 (-0.62%)
30-Year Bond 4.28% -0.04 (-0.86%)
10-Yr Bond... 3.64% -0.05 (-1.46%)






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

Not a Pretty Picture
BY MICHAEL PANZNER

Last week, the Commerce Department announced that U.S. gross domestic product for the second quarter rose by a higher-than-expected 3.3%. But was the number as good as many bulls made out? One way to answer that question is to look at what other economic indicators were doing during earlier periods when GDP was roughly similar to what it was in the latest quarter. As the chart below illustrates, jobless claims, unemployment and inflation rates were generally lower, while employment, manufacturing, housing starts, industrial production, and consumer confidence were generally higher than they are now. Based on what lawyers call a “preponderance of the evidence,” it seems clear that last week’s GDP report had little to do with reality.

-chart-

Over the past decade, moves in the S&P 500 index have loosely tracked swings in the ratio of the iBoxx high yield bond index relative to the investment grade bond index. Odd as it seems, the relationship makes sense. That is because the iBoxx ratio provides something of a read on economic conditions, risk tolerance levels and available liquidity -- all factors that can influence the appetite and environment for stocks.

Last summer, the relationship between the two measures diverged somewhat. Despite all the turmoil that was taking place in fixed-income markets, equities held up relatively well. But things did not stay that way for long. In recent months, stocks have done a bit of catching-up on the downside. Still, while the disconnect is no longer what it was, the two remain somewhat out-of-synch. Perhaps the stock market sell-off that began this week will bring them closer together?

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

[Demeter]

26. Reality! What a Novel Concept!

I don't think BushCo has ever heard of it. Nor Wall Street, not in this generation.

[ozymandius]

2. Today's Reports

08:30 Average Workweek Aug
Briefing.com 33.7
Consensus 33.6
Prior 33.6

08:30 Hourly Earnings Aug
Briefing.com 0.3%
Consensus 0.3%
Prior 0.3%

08:30 Nonfarm Payrolls Aug
Briefing.com -70K
Consensus -75K
Prior -51K

08:30 Unemployment Rate Aug
Briefing.com 5.7%
Consensus 5.7%
Prior 5.7%

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

[UpInArms]

30. U.S. Aug. nonfarm payrolls down 84,000 vs drop 75,000 expect - Unemply rate @ 6.1%

01. U.S. Aug. average hourly earnings up 0.4%, up 3.6 yr-on-yr
8:30 AM ET, Sep 05, 2008

02. Factory, employment services have biggest job losses in Aug.
8:30 AM ET, Sep 05, 2008

03. More jobs lost in June, July much weaker than previous est.
8:30 AM ET, Sep 05, 2008

04. U.S. Aug. nonfarm payrolls down 84,000 vs drop 75,000 expect
8:30 AM ET, Sep 05, 2008

05. U.S. Aug. unemployment rate 6.1% vs 5.7% in July
8:30 AM ET, Sep 05, 2008

[UpInArms]

38. U.S. Aug. jobless rate jumps to 6.1%, payroll jobs down 84K

http://www.marketwatch.com/news/story/us-aug-jobless-rate-jumps/story.aspx?guid=%7B955128A1%2DA7F6%2D4FD7%2DA9E5%2D628BA2C84E28%7D&dist=morenews

WASHINGTON (MarketWatch) - The nation's unemployment rate jumped unexpectedly to 6.1% in August, the highest in almost five years, the Labor Department said Friday. Nonfarm payrolls shrank by 84,000 in August, more than the 75,000 decline expected by economists surveyed by MarketWatch. The labor market was also much weaker over the summer than previously estimated. Job losses totaled 160,000 in June and July, more than the previous estimate of 100,000. The rise in the unemployment rate was unexpected. Economists forecast the unemployment rate to remain steady at 5.7%. Average hourly earnings increased 7 cents, or 0.4% to $18.14. Economists had been expecting a 0.3% gain. Earnings are up 3.6% in the past year. The average workweek remained steady at 33.7 hours.

[UpInArms]

39. Job losses totaled 160,000 in June and July (rev'd the NFPs for those months down by 100,000!)

[UpInArms]

41. August jobless rate at 4-1/2 year high

http://www.reuters.com/article/newsOne/idUSN0439189920080905

WASHINGTON (Reuters) - The U.S. unemployment rate unexpectedly shot up to 6.1 percent in August, its highest in more than 4-1/2 years, as employers cut payrolls for an eighth straight month and labor markets showed signs of accelerating decline.

The Labor Department said 84,000 jobs were lost in August, significantly higher than the 75,000 that economists surveyed by Reuters had forecast. In addition, July's job losses were revised up to 60,000 and June's to 100,000 from a previously reported 51,000 in each month.

Department officials said the August unemployment rate was the highest since December 2003. Analysts had expected the rate to remain steady at July's 5.7 percent rate rather than to jump.

There were steep cuts in hiring in nearly every major category of employment. Some 61,000 manufacturing jobs were lost in August, the most for any month since mid 2003, and 8,000 more construction jobs were cut. There were 53,000 jobs eliminated in professional and business services and 4,000 in leisure and hospitality industries.

...more...

[UpInArms]

51. INSTANT VIEW: U.S. non-farm payrolls down in August

http://www.reuters.com/article/newsOne/idUSN0540060420080905?sp=true

<snipping to the comments>

PHIL FLYNN, ANALYST, ALARON TRADING, CHICAGO:

"There's a realization that we're going into an economic slowdown with the rest of the world, but there is a sense that the U.S. is further along in this issue and that the crisis here is probably heading towards the end while the rest of the world is still grappling with it. We in the U.S. have already priced in a lot of bad news on the dollar."

DANA SAPORTA, ECONOMIST, DRESDNER KLEINWORT SECURITIES LLC, NEW YORK:

"The job market is getting softer and companies are trying to use their payrolls as efficiently as they can. As they try to adjust to slowing demand, they unfortunately have to reduce jobs. But this could lead to a perpetual cycle because more job losses could lead to even slower consumer spending."

"The risk to the economy is still clearly on the downside. The Fed had already cut rates aggressively in anticipation of a slowdown. Fed officials will keep monetary policy on hold for a long time, probably well into 2009."

<snipping out the cheerleader>

DOUG ROBERTS, CHIEF INVESTMENT STRATEGIST, CHANNEL CAPITAL RESEARCH, SHREWSBURY, NEW JERSEY:

"It's very sobering and shows that credit crises of this magnitude can be cushioned by the Fed, but not cured. The credit situation will take longer to work itself out.

"Treasuries are up because the flight to quality has returned. And the bond market is now more attractive than it was when oil prices were rising. Right now with oil prices coming down, people are saying this does not look like a stagflationary environment. And with the dollar rallying, international investors are starting to say that U.S. Treasuries look like a nice safe haven for their money."

BORIS SCHLOSSBERG, HEAD OF CURRENCY RESEARCH, GFT FOREX, NEW YORK:

"Very ugly across the board. The most startling thing for the market was this huge jump in the unemployment rate. That's the highest number in five years. The jobless rate suggests that the climate for job expansion has become much more difficult and suggests we are probably going to have a much harder fourth quarter facing us. The impact on the dollar itself is very problematic. We are entering a global economic slowdown and a global decline in interest rates. All of those factors are going to be positive for the yen. The euro may not be the primary benefactor of this bad news, the yen is. We don't think U.S. interest rates are going to rise anytime in the near future, given the statistics we are seeing now, especially on the labor front."

...more...

[spotbird]

55. Stupid question

If stock, financials, commodities, etc. are all down, where did the money go?

Who is getting rich off of the collapse?

[UpInArms]

59. I really don't have an exact answer,

but you might look at the Pirates of the Carribean

:hi:

[MrsCorleone]

60. Seems money is flowing into treasuries this week.

Folks are playing it safe.

[TalkingDog]

80. The people who sold when they were at their peak.

And the people who will find clever ways to take advantage of the folks who didn't.

The Spousal Unit relayed a story to me a few days ago about a family in CA who had borrowed too heavily against their "credit line" on their house and when their payments became to much to bear, considered filing for bankruptcy. But they had no money, no back-up plan, and no-where to go.

A speculator with ready cash, came along and bought the house from the bank. He let the original owners stay there and charged them rent equal to their original (read: pre-credit line) mortgage payment.

He got a great property, the bank got their money, the folks are paying a rent they can afford and will allow them to restructure their credit without going into bankruptcy.

It ain't perfect, but everybody is getting something positive out of the deal.

[Robbien]

109. The money went to hedgers who were holding shorts

The shorts make a ton of money when markets are rapidly changing in the downward projection.

The big players in this market are of course the four big investment firms; foreign govt investors (i.e. China, Dubai); and the specialty hedge firms of the rich.

The biggest losers are the long term holders, mainly pension funds.

[UpInArms]

57. Mortgage delinquencies at highest level in history: MBA

01. U.S. foreclosures hit another record in second quarter: MBA
10:03 AM ET, Sep 05, 2008

02. Mortgage delinquencies at highest level in history: MBA
10:03 AM ET, Sep 05, 2008

http://www.marketwatch.com/news/story/foreclosures-mortgage-delinquencies-hit-record/story.aspx?guid=%7B21015C68%2DEDCF%2D4E8B%2DBB4E%2D4259C721F9C1%7D&dist=hplatest

CHICAGO (MarketWatch) -- The rate of mortgages entering foreclosure hit another record high in the second quarter, as did the percentage of loans somewhere in the foreclosure process, the Mortgage Bankers Association reported on Friday.

The delinquency rate, which measures mortgages that aren't in foreclosure but have at least one overdue payment, also was the highest ever recorded in the MBA's quarterly survey.

<snip>

The percentage of loans that entered the foreclosure process in the second quarter was 1.08%, up from 1.01% in the first quarter and 0.59% a year ago. Meanwhile, 2.75% of loans in the survey were somewhere in the foreclosure process, up from 2.47% last quarter and 1.4% in the second quarter of 2007.

The delinquency rate was 6.41% of all loans outstanding, according to the survey. The rate was 6.35% in the first quarter, and 5.12% a year ago.

...more...

[UpInArms]

76. U.S. home foreclosures reach record high (highest since 1979)

http://www.reuters.com/article/bondsNews/idUSN0547420520080905

NEW YORK, Sept 5 (Reuters) - U.S. home foreclosures and the rate of homes entering foreclosure rose to record highs in the second quarter, the Mortgage Bankers Association said on Friday.

"The national foreclosure numbers continue to be driven by the hardest-hit states continuing to get much worse," Jay Brinkmann, the association's chief economist and senior vice president for research and economics, said in a news release.

The increases in foreclosures in California and Florida overwhelmed improvements in states such as Texas, Massachusetts and Maryland, he said.

For the quarter, a majority of the states saw relatively little change one way or the other, with California and Florida alone accounting for 39 percent of all of the foreclosures started in the country during the second quarter and 73 percent of the increase in foreclosures between the first and second quarters, he said.

The seasonally adjusted foreclosure starts rate, the percentage of loans that entered the foreclosure process during the April-June quarter, was 1.19 percent, up from 0.99 percent in the first three months of 2008 and 0.65 percent in the second quarter of 2007.

The percentage of loans in the foreclosure process at the end of the second quarter was 2.75 percent, up from 2.47 percent in the first quarter and from 1.40 percent in the second quarter of 2007.

The U.S. mortgage delinquency rate of 6.41 percent was the highest since at least 1979, which was when the trade group began its current method of measuring failing home loans.

...more...

[UpInArms]

77. No sign of US business cycle upturn - ECRI (lowest since 1980)

http://www.reuters.com/article/bondsNews/idUSNAT00434920080905

NEW YORK, Sept 5 (Reuters) - A measure of future economic growth in the United States edged up slightly from a more than five-year low and its annualized growth rate inched up but remained near a 28-year low with no sign of a U.S. business cycle upturn in sight, a research group said on Friday.

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose to 126.3 in the week to Aug. 29 from 125.4 in the previous period, revised from 125.5.

Its annualized growth ticked up to negative 11.7 percent from minus 11.8 percent in the previous week, its lowest mark since June 1980.

The index's rise was due to lower interest rates and higher stock prices and the uptick was partly offset by higher jobless claims, said Lakshman Achuthan, managing director at ECRI.

...more...

[ozymandius]

3. Oil steady in Asia ahead of OPEC meeting

SINGAPORE - Oil prices were steady Friday in Asia below $108 a barrel as investors wait to see if OPEC moves to restrict output at its meeting next week amid a two-month plunge in prices.

Light, sweet crude for October delivery was down 17 cents to $107.72 a barrel in electronic trading on the New York Mercantile Exchange midday in Singapore. The contract overnight fell $1.46 to settle at $107.89.

....

The Organization of the Petroleum Exporting Countries is scheduled to meet next Tuesday in Vienna and has indicated it may take action to defend the $100 a barrel level.

....

In other Nymex trading, heating oil futures fell 0.83 cent to $3.0154 a gallon, while gasoline prices dropped 0.54 cent to $2.735 a gallon. Natural gas for October delivery gained 5.4 cents to $7.376 per 1,000 cubic feet.

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

[Tandalayo_Scheisskopf]

89. I have seen them attempt that move before...

At other levels. It delays, but does not succeed. Ultimately, the market collapses.

OPEC, for all its chest-thumping, is pretty fragmented. And quite frankly, while I admire Hugo Chavez for what he is doing for his poorest, he can go intercourse himself on propping up prices.

[ozymandius]

4. Asia, Europe markets sink after Wall Street plunge

TOKYO - Asian stock markets plunged Friday in the wake of a sell-off on Wall Street amid mounting concerns about a slump the U.S. economy and its impact on the global economy. European shares also opened lower.

.....

In Japan, the benchmark Nikkei 225 index sank 2.75 percent at 12,212.23. Hong Kong's Hang Seng index tumbled 2.24 percent to 19,933.28, dropping below 20,000 for the first time in more than a year.

Markets in mainland China, India, Australia and Singapore were also down sharply.

In morning trading in Europe, Britain's FTSE 100 plunged 1.73 percent to 5,269.10, Germany's DAX fell 1.72 percent to 6,171.28, and France's CAC 40 lost 1.62 percent to 4,234.26.

http://news.yahoo.com/s/ap/20080905/ap_on_bi_ge/world_markets

[Ghost Dog]

17. JGBs soar on Nikkei slide, futures hit 5-month high

TOKYO, Sept 5 (Reuters) - Japanese government bond futures soared more than a full point on Friday to a five-month high, with investors dumping risky positions in stocks and shifting funds into safe-haven debt.

The Nikkei average .N225 lost 2.8 percent to finish at a 5-1/2-month low as investors fretted about the global economy's health.

Data during the day showed Japanese companies unexpectedly cut capital spending in the second quarter, likely meaning the economy contracted even more than previously estimated during the April-June period.

JGB futures reversed a sharp slide the previous day in what analysts said were very thin conditions where it is easy for players to shove the market around.

But analysts also said that 10-year yields would likely have a tough time falling below their four-month low of 1.400 percent as long as the Japanese economy does not deteriorate much more and the Bank of Japan keeps interest rates on hold.

...

The benchmark 10-year yield <JP10YTN=JBTC> dropped 5 basis points to 1.460 percent, but for the week yields were down only slightly and holding above the 1.400 percent level.

The five-year yield <JP5YTN=JBTC> was down 5.5 basis points at 1.025 percent, while the two-year yield <JP2YTN=JBTC> dipped 2 basis points to 0.725 percent as the yield curve flattened.

...

Global markets have been shaken by a fierce bout of deleveraging by hedge funds and other investors who had bet the world economy would better withstand the U.S. downturn and credit crisis, leading to heavy selling of the euro, Australian dollar and commodities.

The pain has spread to emerging markets, raising fears that the sell-off has further to run. The impact on JGB yields depends on how much further the Nikkei falls with any global equity slide, analysts said.

For the year, the Nikkei is down 20 percent, worse than the 16 percent drop in the S&P 500 .SPX and 17 percent drop in Britain's FTSE 100 .FTSE but better than the 31 percent slide in the MSCI Asia ex-Japan index .MIAPJ0000PUS.

/... http://www.reuters.com/article/marketsNews/idINT18633420080905?rpc=44&sp=true

[Ghost Dog]

18. Banks, miners lead Europe lower on economic woes

LONDON, Sept 5 (Reuters) - European shares fell in early trade on Friday, extending losses from the previous session, as investors sold banking and mining stocks amid intensified worries over the global economy.

At 0838 GMT, the FTSEurofirst 300 index of top European shares was down 1.6 percent at 1,133.30 points.

Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), Banco Santander (SAN.MC: Quote, Profile, Research, Stock Buzz), BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz) were all down between 1-3 percent and ranked among the top negative weights on the benchmark.

European shares lost 2.6 percent on Thursday and sparked a global equities decline after European Central Bank projections showed a cut in growth expectations compared with their last prognosis three months ago.

The ECB also unveiled tougher rules on the assets banks can submit as collateral in central bank lending operations, hurting bank stocks.

...

"Investors are still shell-shocked after yesterday's comments by Bill Gross, chief investment officer at Pimco that the financial system was heading into becoming a financial tsunami," added Urqurhart Stewart. Gross said on Thursday that the U.S. government should give the Treasury the right to buy debt and other assets to halt a "financial tsunami".

Miners also weighed heavily on the European index, BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz), Kazkhmys (KAZ.L: Quote, Profile, Research, Stock Buzz), Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz) and Eurasian (ENRC.L: Quote, Profile, Research, Stock Buzz) were trading down between 2.5-6.8 percent as copper futures <MCU3=LX> slumped more than 3 percent.

Also under pressure were exporting companies hurt by a weak euro with the automobile sector one of the weakest sectors in Europe. <-- :freak:

Daimler (DAIGn.DE: Quote, Profile, Research, Stock Buzz), BMW (BMWG.DE: Quote, Profile, Research, Stock Buzz), Peugeot (PEUP.PA: Quote, Profile, Research, Stock Buzz) and Fiat (FIA.MI: Quote, Profile, Research, Stock Buzz) all fell 0.8-1.5 percent.

...

Retailers in Europe were also feeling the pinch from worries over diminished consumer spending with Carrefour (CARR.PA: Quote, Profile, Research, Stock Buzz) and Inditex (ITX.MC: Quote, Profile, Research, Stock Buzz) trading between 0.8-1.4 percent lower.

...

Pharmaceutical stocks were outperforming the market as Deutsche Bank raised its target price on AstraZeneca (AZN.L: Quote, Profile, Research, Stock Buzz) to 2,610 pence from 2,450 pence.

Peers Sanofi-Aventis (SASY.PA: Quote, Profile, Research, Stock Buzz) and Roche (ROG.VX: Quote, Profile, Research, Stock Buzz) were higher by around 0.5 percent.

/... http://www.reuters.com/article/marketsNews/idCAL559275720080905?rpc=44&sp=true:freak:

[Ghost Dog]

92. European Stocks Retreat, Led by Barclays, Nokia, BHP Billiton

Sept. 5 (Bloomberg) -- European stocks fell for a third day, sending the Dow Jones Stoxx 600 Index to its worst weekly slump since January 2003, as U.S. unemployment climbed to a five-year high and concern mounted credit losses at banks will increase.

Barclays Plc dropped 3.5 percent and UBS AG sank 4.4 percent, leading financial firms lower, as Goldman Sachs Group Inc. advised clients to sell Merrill Lynch & Co. shares on concern the bank may post more writedowns. Nokia Oyj plunged 11 percent after the world's biggest maker of mobile phones forecast said it's losing market share. BHP Billiton Ltd. slipped 3.2 percent as copper headed for its second straight weekly drop.

The Stoxx 600 tumbled 2.2 percent to 272.04 at 4:30 p.m. in London, the lowest since July 16. The measure has slumped 5.6 this week, bringing the loss in 2008 to 25 percent as subprime- related losses at global banks topped $500 billion and the global economy cooled.

...

Almost $17 trillion has been wiped off global stock markets since the peak in October 2007. Financial stocks have led the rout, with a measure for the industry in the Stoxx 600 dropping 33 percent this year. Banks from UBS AG to Citigroup Inc. had to raise more than $360 billion worldwide in capital after contagion from the subprime-mortgage crisis in the U.S. eroded earnings.

The cost of protecting European corporate bonds from default rose today, according to traders of credit-default swaps.

The European Central Bank yesterday cut its 2008 economic growth forecast to 1.4 percent from 1.8 percent and its 2009 prediction to 1.2 percent from 1.5 percent.

National benchmark indexes decreased in all 18 western European markets today. France's CAC 40 lost 2.5 percent, and Germany's DAX retreated 2.6 percent. The U.K.'s FTSE 100 tumbled 2.3 percent.

/... http://www.bloomberg.com/apps/news?pid=20601085&sid=a8Jn8mszBUok&refer=europe

[Ghost Dog]

95. FTSE posts worst weekly fall in 6 yrs on growth woe

LONDON, Sept 5 (Reuters) - Britain's top share index ended down 2.3 percent on Friday, registering its biggest weekly fall in six years, as banks and commodity stocks fell on global economic worries after the U.S. jobless rate jumped last month.

...

The FTSE 100 .FTSE ended down 121.4 points at 5,240.7 for a weekly loss of 7 percent -- the biggest such fall since July 2002. The UK benchmark is down nearly 19 percent so far this year.

"It's surprising how things can change in a few days. Earlier in the week there was talk of the inflation threat receding with crude oil prices falling. Markets were looking a little bit rosy. We were thinking there might be a rally towards the end of the year," said Tim Whitehead, head of portfolio services at Redmayne-Bentley. <-- :freak:

"Now things have turned on their heads ... We are in a bear market and these are the bear rallies that we should expect. The best we can hope is for the market to continue to trade in a range between 5,200 and 5,600 which it has been doing in the last few months."

/... http://www.reuters.com/article/marketsNews/idCAL55008120080905?rpc=44

How can these so-called professionals be allowed to keep their jobs, when they are constantly being taken by surprise?

[Ghost Dog]

22. U.K., Irish Banks' Costs to Rise as ECB Rules Tighten

Sept. 5 (Bloomberg) -- Banks in the U.K., Spain and Ireland that have relied on the European Central Bank for low-cost funding will have to pay more as it tightens lending rules.

ECB President Jean-Claude Trichet, concerned that some banks were abusing its willingness to make loans backed by securities most investors won't accept, said yesterday the central bank will increase the so-called ``haircut'' on securities used as collateral for loans to 12 percent from as little as 2 percent, meaning it will lend just 88 percent of their value.

``It's a call to discipline from the ECB,'' said Tomas Varela, chief financial officer at Banco Sabadell SA, Spain's fourth-largest bank, which holds about 5 billion euros ($7.2 billion) of securities that will be worth less after Feb. 1, 2009, under the new ECB rules. ``It's a signal to the financial industry to start opening up more normal avenues of liquidity.''

The ECB, which lent 467 billion euros last week to banks with operations in the 15-country euro area, accepts a broader range of collateral for loans than the Federal Reserve or the Bank of England, including bonds with credit ratings five levels below AAA and asset-backed securities. This leeway prompted some firms to create bonds specifically as collateral for ECB borrowing.

``It is a bit like a drug and they don't want the banks to become dependent on it,'' said Neil Smith, a Dusseldorf-based analyst at WestLB AG. ``There have been concerns the facility is being exploited, and the ECB wants the banks to start finding alternative ways of funding their business.''

`Waking Up'

Irish and British banks fell the most in European trading after the ECB clampdown. Anglo Irish Bank Corp. dropped 12 percent in the past two days. HBOS Plc, the U.K. mortgage lender that has tapped the ECB via its Irish operation, declined 8.2 percent in the period, and Barclays Plc, the country's third-biggest lender, slumped 9 percent.

...

Barclays and HBOS spokesmen declined to comment on yesterday's ECB decision or say how much they have borrowed.

In Madrid, Banco Sabadell fell 4.4 percent in two days, Banco Santander SA, the country's largest bank, sank 6.1 percent and Bankinter SA fell 7.7 percent.

...

Credit-default swaps on the subordinated debt of Spanish and Irish banks led a rise in the cost of protecting banks from default.

...

Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements. An increase indicates a decline in the perception of credit quality; a drop signals the opposite.

...

``This is clearly bad news for the profit and loss of banks, especially Spanish and Irish-based ones, that have retained asset- backed securities,'' said Luca Jellinek, head of interest-rate strategy in London at Royal Bank of Scotland Group Plc. ``ECB financing is a significant feature of their balance sheet.''

...

``It highlights the dependency of U.K. banks on the central banks for a significant proportion of their funding,'' said Sandy Chen, an analyst at Panmure Gordon in London. ``With a significant increase in the cost of that funding, the read across is into earnings and the liquidity issues that gave rise to the funding programs in the first place.''

Central banks made borrowing easier after losses from subprime mortgage defaults in the U.S. caused credit markets to seize up worldwide. Banks have lost or written down $509 billion since the credit crisis began last year, with Europe accounting for $230 billion.

``The losers are the banks retaining bonds to raise cheap collateral, now the cost will be higher,'' said RBS's Jellinek. ``The winners are the rest of the euro system whose collateral has been edged out.''

/... http://www.bloomberg.com/apps/news?pid=20601085&sid=al1R6.GhSakI&refer=europe

[Ghost Dog]

23. Russian Stocks, Bonds Tumble as Central Bank Props Up Ruble

Sept. 5 (Bloomberg) -- Russian stocks plunged and the cost to protect government bonds jumped to the highest in almost four years as the central bank shored up its currency pummeled by the conflict in Georgia and tumbling commodity prices.

The central bank said it intervened in the currency market after the ruble fell to the lowest level in almost a year against the dollar yesterday. Russia's RTS Index fell the most among 88 stock indexes tracked by Bloomberg today, capping its worst week since May 2006, and credit-default swaps on the government's debt rose 12 basis points to 164, the highest since November 2004, according to CMA Datavision prices.

...

``They have to intervene because people are selling ruble assets and taking the money out of the country,'' said Nigel Rendell, senior emerging-markets strategist at Royal Bank of Canada Ltd. in London. ``In a time of uncertainty, I think it's a sensible move to get out of Russia. The political situation doesn't look good.''

...

The central bank in Moscow sold a ``significant'' amount of foreign currency yesterday to prop up the ruble, First Deputy Chairman Alexei Ulyukayev said. ``The ruble had got to the higher end of the trading band, so it was reasonable,'' he told reporters in Sochi today, declining to give the exact amount.

The bank sold about $4.5 billion of foreign reserves yesterday, according to Mikhail Galkin, a fixed-income analyst at MDM Bank in Moscow.

The dollar-denominated RTS stock index retreated 4.9 percent to 1,451.24, bringing its weekly decline to 12 percent. The ruble-denominated Micex Index sank 5.5 percent to 1,211.02, the lowest since June 2006.

The ruble fell to as low as 25.4602 per dollar yesterday, the weakest level since Sept. 12.

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

[Demeter]

27. Death Spiral, Anyone?

I think this is the beginning of the end, and 6 weeks earlier than usual.

[Ghost Dog]

34. Um, for a while:

[skoalyman]

102. that pic got me a thinking if a toilet flushes and no one's there

to see it does it really flush :shrug:

[Ghost Dog]

116. And what's more, does it bounce?

:bounce:

[skoalyman]

120. I supposed if it were on the second floor and

:wow: fell through the floor onto the bed below it might bounce:hurts: llol

[radfringe]

5. worker productivity report

heard on the radio yesterday...

it was pointed out that normally a positive worker productivity report would help rally the market. Productivity was up, so why did the market go down?

when you take into consideration all of the other reports, the only reason productivity is up is because employers have cut their work forces and/or worker hours. This indicates a slow-down not expansion

[ozymandius]

7. makes sense to me

Truncated work hours give less incentive for breaks, lunches and other time away from the workstation. Fewer hours on the job tends to focus one's mind on the task, too.

[ozymandius]

6. Dell Plans to Sell Its Computer Factories Worldwide, WSJ Says

Sept. 5 (Bloomberg) -- Dell Inc. is seeking to sell all of its manufacturing plants worldwide and has approached contract computer manufacturers, the Wall Street Journal reported today, citing people familiar with the matter.

The proposed factory sales, intended to slash costs, mark a significant shift from Dell's long-standing strategy of making its own products, the Journal said. Instead, Dell plans to have contract manufacturers make all its computers, the paper reported.

Dell, the world's second-biggest maker of personal computers, is seeking to raise profitability after reporting earnings that missed analysts' estimates as it cut prices to take market share from industry leader Hewlett-Packard Co. Selling its production sites to focus on sales and marketing may aid efforts by the Round Rock, Texas-based company to expand its product range.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a82VPcTaufXU&refer=home

[Tandalayo_Scheisskopf]

73. This is the death spiral for Dell.

Dell not making its own computers is like cows outsourcing milk production. Start waving goodbye.

[NeoConsSuck]

8. Greenspan: Don't use Fed as a 'magical piggy bank'

Troubled by the Bear Stearns debacle, former Federal Reserve Chairman Alan Greenspan is advocating a new way of dealing with government bailouts of companies whose sudden collapse could wreak havoc on the country's economic and financial stability.

Greenspan says Congress needs to give the government new powers to handle troubled companies to minimize any potential losses to American taxpayers. A self-described libertarian Republican, Greenspan has a reputation for being wary of giving the government extra powers. However, in crisis situations, there needs to be a clear process for handling bailouts, rather than depending on the Fed to do so, he reckons.

A high-level panel of financial officials should be given broad authority to quickly determine whether a failing company poses a sufficient threat to the entire U.S. economy, he recommends. If so, the company would be shut down.

http://biz.yahoo.com/ap/080905/greenspan_book.html

[radfringe]

10. with the repubs

that's what social security trust fund is for....

[rfranklin]

11. Arsonist sets fire, then criticizes fire department...

or something like that.

[ozymandius]

13. Aye. There's the rub.

He is the cause of so much of this mess.

[ozymandius]

12. This is the first time I've ever agreed with something this WAHBPH

has said, either in spirit or letter, since 1966. One caveat: so long as this idea does not include accumulating more power inside the FED to make these decisions. Once the Fed is given power you can bet that it will either never give it back once the plan has run its course or abuse the new power.

He admits that some companies need to fail. Yes, true. He says that a blank check to cover losses will encourage more reckless behavior in the future. That's true too. He acknowledges that equity in the companies will be wiped out when the companies go into receivership. Also true.

Every once in a while even the most dim-witted and infamous will utter what sensible people have been thinking.

[UpInArms]

25. Flashback to 1998: Greenspan defends hedge-fund bail-out

http://news.bbc.co.uk/1/hi/business/the_economy/184505.stm

The Chairman of the US Federal Reserve Bank, Alan Greenspan, has defended the publicly organised bail-out of Long-Term Capital Management (LTCM), a hedge fund specialising in large-scale speculation.

Speaking to the banking committee of the US House of Representatives, Mr Greenspan said a failure of LTCM's failure could have caused substantial damage to banks and investors and might have impaired the economies of many nations, including the United States.

LTCM lost hundreds of millions of dollars when its financial experts misjudged the extent of the crisis in Russia. Co-ordinated by the Federal Reserve, 14 large banks got together to bail out the fund to prevent its collapse.

Mr Greenspan insisted that for LTCM's bailout "no Federal Reserve funds were put at risk, no promises were made by the Federal Reserve, and no individual firms were pressured to participate."

The "fragile" condition of the markets had prompted the Federal Resevere to act quicker than usual, he said, promising that the bail-out would be a "rare occasion."

US lawmakers raised critical questions about the fund's rescue. Jim Leach, chairman of the House Banking Committee, called on the Justice Department to make an antitrust review of the group of big banks and brokerage firms involved.

<snip>

Mr Greenspan suggested that it would have been wrong to let LTCM go under. The unwinding of the fund's "complicated portfolio" would have been very risky, and could have seriously distorted financial markets around the world.

At the same time he ruled out direct regulation of hedge funds, saying it was possible to monitor the fund's activity and act when necessary.

...more...

I guess with this WAHBPH, it's do as I say, not as I do.

:eyes:

[Dr.Phool]

65. "No individual firms were pressured to participate".

Everyone on Wall Street seems to think that Bear Stearns got it's ass handed to them because they refused to participate in the bailout.

[Demeter]

112. I'll Bite, What's a WAHBPH?

[TalkingDog]

81. Ah...Today's Theme Song: China Pig by Captain Beefheart

I don't wanna kill my china pig
No I don't
Uh man's gotta live,
Uh man's gotta eat
Uh man's gotta have shoes t' walk out on the street
I don't wanna kill my china pig
Well he was uh baby I want yuh t' see

I don't wanna kill my china pig
Well I used t' go t' school
With uh' little red box
'n I used to have m' pig go with me
We walked for blocks
I don't wanna kill my china pig
His tail curled five times in uh circle round

It's glazed

He's got uh slot in his back flowers grow
My china pig be uh quite uh show
I don't wanna kill m' china pig
Woe no
My china pig

I got him by the snout
'n I takes him by the cuff
'n I whipped out m' fork
'n I poked at um
Three hairs laid out on m' floor

I remember my china pig
I fed the neighborhood
It was uh big neighborhood
Uh lot uh people liked my pig
One little girl used t' put her fingers in his snout
I put uh fork in his back
I didn't wanna kill my china pig



Audio player is on the right column:
http://www.last.fm/music/Captain%2BBeefheart%2B%2526%2BHis%2BMagic%2BBand/_/China+Pig

[Hugin]

96. Haha! Perfect...

I wasn't aware there were any Cpt. Beefheart fans left... Other than moi. :o

^5!

:D

[TalkingDog]

100. He's definitely an acquired taste.

But here's the song that won me over....


The black paper between a mirror breaks my heart
The moon frayed thru dark velvet lightly apart
Steal softly thru sunshine
Steal softly thru snow

The wild goose flies from winter
Breaks my heart that I can't go
Energy flys thru a field
'n the sun softly melts a nothing wheel
Steal softly thru sunshine
Steal softly thru snow

The black paper between a mirror breaks my heart that I can't go
The swan their feathers don't grow
They're spun
They live two hundred years of love
They're one
Breaks my heart to see them cross the sun

Grain grows rainbows up straw hill
Breaks my heart to see the highway cross the hills
Man's lived a million years 'n still he kills
The black paper between a mirror
Breaks my heart that I can't go
Steal softly thru sunshine
Steal softly thru snow


http://www.last.fm/music/Captain%2BBeefheart%2B%2526%2BHis%2BMagic%2BBand/_/Steal+Softly+Thru+Snow

[ozymandius]

9. Fannie Mae Investor Sues Citigroup, Merrill Over Stock Drop

Sept. 5 (Bloomberg) -- Citigroup Inc., Merrill Lynch & Co. and three other banks were accused in a shareholder lawsuit of failing to warn investors about proposed accounting-rule changes that lowered the value of preferred Fannie Mae stock.

Karen Orkin, who bought 600 shares of Fannie Mae's Series T Preferred Stock in May, filed a complaint in New York State Supreme Court in Manhattan in a proposed class-action, or group, lawsuit. Orkin said about 89 million shares of the stock were sold, and the stock dropped 44 percent in value in four months.

....

The banks were a syndicate of underwriters to the Series T preferred shares, Orkin said in the complaint. Proposed changes in accounting rules, known as FAS No. 140, by the Financial Accounting Standards Board, ``allowed Fannie Mae to remove certain liabilities from its balance sheet and to put them into trusts,'' Orkin said in the lawsuit. Morgan Stanley, UBS AG and Wachovia Corp. are also defendants in the case.

http://www.bloomberg.com/apps/news?pid=20601103&sid=awGWI3NJX3Rs&refer=us

[ozymandius]

14. Investments Are Faltering in Chrysler and GMAC (NYT)

Mr. Feinberg’s giant investment fund, Cerberus Capital Management, is racing to salvage multibillion-dollar investments in Chrysler, the smallest of the Detroit automakers, and GMAC, the financing arm of General Motors.

But for Cerberus, named after the mythological three-headed dog who guards the gates of hell, the news keeps getting worse.

On Wednesday, Chrysler ... said its sales in the United States fell by a third in August — nearly twice the industry average ... Honda eclipsed Chrysler as the nation’s No. 4 seller of cars, and Nissan is closing in fast.

The same day, GMAC, in which Cerberus holds a 51 percent stake, said it was trying to stanch the bleeding from ... home mortgage lending. GMAC and its home loan unit, Residential Capital, announced that they would dismiss 5,000 employees, or 60 percent of the unit’s staff, and close all 200 of its retail mortgage branches.

http://www.nytimes.com/2008/09/04/business/04lend.html

---

Story found at Calculated Risk

[NeoConsSuck]

15. No job turnaround on horizon

Economists expect another weak job report when the government releases its August employment figures Friday. But many also are predicting job losses to continue deep into 2009 as well.

U.S. employers have already trimmed 463,000 jobs from the payrolls during the first seven months of the year. For the month of August, economists are predicting that 75,000 jobs were lost, according to Briefing.com. That would be the biggest decline since March.

The unemployment rate is forecast to remain at a four-year high of 5.7%.

While the monthly job losses so far this year have been modest compared to levels in past recessions, filings for initial jobless claims and continuing jobless benefits have both climbed in the last month to levels typical with a recession.

http://money.cnn.com/2008/09/04/news/economy/jobs_outlook/index.htm?cnn=yes

[ozymandius]

16. Merrill Downgraded to "Sell" by Goldman

A little late, don't'cha think?

(Dang! Look at the one year price chart!)

...

One of the best buy indicators on a stock is when analysts are close to unanimity in designating it a sell. Like rating agencies, analysts are loath to downgrade a stock. By the time things are so indisputably dreadful that they can risk annoying management by recommending an exit, pretty much all the bad news is out. But the Goldman analyst William Tarona is among a minority in having a sell recommendation on Merrill. While he thinks there is more downside even from this fallen level, his dim view will need to be more widely shared before aspiring brokerage industry bottom fishers might venture into the pool.

From Bloomberg:

Merrill, the third-largest U.S. securities firm, is rated the equivalent of sell by four of 20 firms, including Goldman, according to recommendations collected by Bloomberg. The same number recommend clients buy the stock while the remaining 12 rate Merrill the equivalent of neutral....

The credit crunch has produced more than $500 billion of credit losses and writedowns at the world's biggest banks and securities firms. Merrill, with $51.8 billion, ranks second after Citigroup Inc.'s $55.1 billion, data compiled by Bloomberg show.

and more writedowns on the way...

http://www.nakedcapitalism.com/2008/09/merrill-downgraded-to-sell-by-goldman.html

[Dr.Phool]

20. I just love it.

One bankrupt investment banks analyst downgrades another bankrupt investment bank. It's so transparent. "Lookie over there! Those guys suck!" The next day, that guy says, "Oh yeah? Those guys suck too".

That sound was the toilet being flushed, and these guys are circling the drain without a paddle.

[UpInArms]

43. Merrill falls after Goldman downgrade

http://www.marketwatch.com/news/story/ratings-game-merrill-falls-after/story.aspx?guid=%7B27E240BC%2D4E07%2D406B%2DB206%2D99959733FEB6%7D&dist=hplatest

NEW YORK (MarketWatch) -- Shares of Merrill Lynch & Co. were down more than 5% in pre-trading Friday after Goldman Sachs downgraded the bank to sell from neutral. Goldman also added Merrill to its Conviction Sell list, citing valuation and the likelihood of further write-downs.

Goldman lowered its third-quarter forecast, saying it now expects Merrill (MER: 26.21, -2.12, -7.5%) to report a loss of $5.75 a share compared to its previous forecast of a loss of $4.75 a share.

As of about 8.30 a.m., Merrill's stock was down 5.23% in pre-trading. The stock fell 7.48% Thursday, closing at $26.21, close to its 52-week low of $22, reached on July 29.

"Merrill currently trades at the highest price-to-book multiple in our large-cap brokerage universe, despite having some of the most significant exposures to troubled assets such as collateralized debt obligations, mortgages and leveraged loans," said the Goldman note.

Goldman said that weak third-quarter results from investment banks will pressure the entire sector. It also sees "a meaningful slowdown" in corporate and institutional activity due in part to deleveraging.

Merrill is one of the biggest losers of the credit crunch, having suffered more than $46 billion in write-downs since June 2007. In July, it agreed to sell just over $30 billion in mortgage-related assets for 22 cents on the dollar.

Also in July, Merrill raised $8.5 billion by selling new stock and sold its 20% stake in Bloomberg LP. At the same time, it said it expects to take a $5.7 billion pre-tax write-down in the third quarter.

...more finger pointing...

it really is a very bad joke, eh?

Bad Bank #1 pointing at Bad Bank #4 and saying - that one's the problem!

[Tandalayo_Scheisskopf]

70. Goldman has been a real bad actor lately.

Downgrading competitors, holding huge physical stocks of oil and releasing analyses that predict huge runups in the price of a barrel of oil. Generally slimy stuff. I certainly hope some day of reckoning is on the horizom for Goldman.

[UpInArms]

74. that day of reckoning? See my post #72 (eom)

[UpInArms]

50. Merrill off 7.6 pct as Goldman cuts to "sell"

http://www.reuters.com/article/hotStocksNews/idUSN0537783220080905

NEW YORK (Reuters) - Merrill Lynch & Co (MER.N: Quote, Profile, Research, Stock Buzz) shares fell 7.6 percent to $21.24 before the bell on Friday after a Goldman Sachs analyst cut the stock to "sell" and warned Merrill will likely incur more write-downs.

Merrill shares closed on Thursday at $26.21.

[UpInArms]

79. Janus drops as J.P. Morgan cuts earnings outlook

http://www.marketwatch.com/news/story/janus-drops-jp-morgan-cuts/story.aspx?guid=%7B2B477A84%2DB280%2D47FD%2D96AF%2D1F85403CADA5%7D&dist=hplatest

NEW YORK (MarketWatch) -- Janus Capital Group (JNS: 24.76, -1.34, -5.1%) saw its stock fall nearly 7% Friday morning as J.P. Morgan cut its earnings estimate for Janus' third quarter to 26 cents a share from 30 cents a share. It also lowered fourth quarter estimates to 25 cents a share from 28 cents a share. At around 11.30 a.m., Janus stock was down 6%, at $24.46. "Janus is the most exposed asset manager to deteriorating market conditions due to far fewer fixed income and money fund assets relative to peers as well as...big overweight positions in underperforming international securities and commodities," said J.P. Morgan. In early August, J.P. Morgan downgraded Janus to underweight from neutral.

foxes guarding henhouses - how quaint!

[UpInArms]

19. dollar watch

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

Last trade 78.897 Change +0.060 (+0.08%)

Euro Weakens As Inflation Concerns Abate, Will NFP's End Dollar Rally?

http://www.dailyfx.com/story/topheadline/Euro_Weakens_As_Inflation_Concerns_1220610162063.html

The Euro retested the 1.4220 price level twice in overnight trading after reaching the level yesterday. The first attempt came after ECB official Nowotny stated 'What we see is that there is an expectation that the inflation development will weaken in 2009 compared to 2008, though unfortunately a clear weakening of the economic growth as well.

Talking Points

· Japanese Yen: Risk Aversion Supporting Yen Crosses
· Pound: Consolidating above 1.7600
· Euro: German Production And Easing Inflation Concerns Weigh On EURUSD.
· US Dollar: NFP’s On Tap

Euro Weakens As Inflation Concerns Abate, Will NFP’s End Dollar Rally?

The Euro retested the 1.4220 price level twice in overnight trading after reaching the level yesterday. The first attempt came after ECB official Nowotny stated 'What we see is that there is an expectation that the inflation development will weaken in 2009 compared to 2008, though unfortunately a clear weakening of the economic growth as well.' Although, the Austrian central bank head would caution of second round effects, his remarks only reinforced the dour outlook for the Euro-Zone economy. German industrial production declining 1.8% in July from a revised lower 0.1% the month prior, would lead to a second run at the support level.

Industrial production in Germany fell as durable good orders dropped 6.5% followed by a 3.7% drop in capital goods. The data demonstrated that the outlook for the economy has deteriorated which has curbed longer term investments. President Trichet’s remarks following yesterday’s decision to keep the benchmark rate at 4.25%, did little to ease concerns of a possible recession in the economic union. Although the central bank leader delivered his usual hawkish rhetoric, comments such as the Euro-zone economy is ”currently experiencing an episode of weak activity” fueled bearish sentiment. Traders have increased their bets that a rate cut will be the next policy action by the MPC, as Credit Suisse overnight index swaps pricing in 42bps worth of cuts by the ECB over the next 12 months.

The USDJPY has consolidated after yesterday’s monumental fall as heightened risk aversion sparked a flight to safety. The declining global growth outlook and the more troubles from the financial sector sent the pair briefly below 106.00. We could see further weakness if the upcoming labor report prints worse than expected.

Typically, the Non-Farm Payrolls release has been a major market mover in the past, and highlights the main event risk for the US dollar. Market participants expect payrolls to fall 75,000 in August, while the unemployment rate is anticipated to hold steady at 5.7%. The bigger than expected decline in the ADP employment index paired with the upward trend in initial jobless claims continues to reflect the growing weakness in employment demands, and raises the argument that NFP’s could fall well below expectations. Meanwhile, the unexpected recovery in the service sector paired with a rise in durable goods demands may help to limit the downside risks for employment, and add to dollar strength. However, comments from FOMC member Janet Yellen that the U.S. economy will experience stalled growth into 2009 may keep the greenback in check.

...more...

US NFP And Canadian Employment Data Leverages A USDCAD Setup

http://www.dailyfx.com/story/special_report/special_reports/US_NFP_And_Canadian_Employment_1220551595407.html

The market's top market moving economic indicator (the non-farm payrolls release) is due Friday; and the release couldn't have come at a more critical time for the US dollar. After a significant rally against nearly everyone of its major counterparts the currency may finally be losing steam. Will an eighth consecutive contraction in employment break the dollar's rally? Where are the best opportunities to play this event risk? Read on to find out.

What is the Market Expecting for August Non-Farm Payrolls?

Change in Non-Farm Payrolls: -75k Forecast, -51k Previous
Unemployment Rate: 5.7% Forecast, 5.7% Previous
Change in Manufacturing Payrolls: -35k Forecast, -35k Previous
Average Hourly Earnings: 3.4% Forecast, 3.4% Previous
Average Weekly Hours: 33.6 Forecast, 33.6 Previous

In order to determine the strength of non-farm payrolls, we typically look at 10 pieces of data that we call the leading indicators for non-farm payrolls. Seven out of the ten releases point to greater job losses, putting the odds in favor of a weak non-farm payrolls reading in line with expectations. More specifically:

The Negatives

• ISM Services Employment Signals Contraction for the Fourth Consecutive Month
• ISM Manufacturing Employment Below 50 During 9 of the Past 10 Months
• ADP Employment Falls by 33K Vs. Improvement of 1K Last Month
• Work Stoppages Increase as Striking Workers Amount to 4.2K
• Initial Jobless Claims 4-Week Moving Average Holds Near 5-Year High
• Continuing Claims Edge Toward November 2003 Highs
• Challenger Job Cuts Rise for 6th Consecutive Month

The Positives
• U of M, Conference Board Consumer Confidence Both Improve For Second Consecutive Month
• Help Wanted Online Index Rises by 7% from Last Month
• Monster.com Index Improves Slightly For First Time In 4 Months

Clearly, the odds are in favor of yet another round of disappointing non-farm payrolls numbers, and this is likely to mark the eighth consecutive month of job losses while the unemployment rate is forecasted to hold at a 4+ year high of 5.7 percent. From a fundamental perspective, additional evidence of surging job losses should weigh on the US dollar and lead fed fund futures to price in fewer Federal Reserve rate hikes over the next 12 months. However, the impact of this 8:30 EDT release could be relatively muted for USD/CAD in particular. Why? Canada will release their employment numbers at 7:00 EDT, and this tends to be one of the biggest market-movers for the Canadian dollar.

...more...

[UpInArms]

21. Columbia Bancorp to close mortgage business, cut jobs

http://news.yahoo.com/s/nm/20080905/bs_nm/columbiabancorp_jobcuts_dc

(Reuters) - Columbia Bancorp (CBBO.O), the holding company for Columbia River Bank, said it plans to close its mortgage banking division, affecting about 39 jobs, as it strives to cut costs amid a difficult mortgage market.

"Columbia's decision to no longer operate an in-house mortgage lending service was necessary because of the uncertainty in the mortgage markets and the risk associated with the industry," CEO Roger Christensen said.

The Dalles, Oregon-based company said it had notified its staff on Thursday of a reduction in workforce impacting about 20 other employees. About 15 additional positions have been eliminated through normal attrition, Columbia Bancorp said.

The move is the latest in a series of steps the bank holding company has taken following a surge in problem loans and increased provisions. In July, the bank, suspended payment of director's fees for the remainder of 2008 and also slashed its dividend to one cent per share.

...more...

[UpInArms]

24. Hedge fund Atticus denies liquidation rumors: report

http://news.yahoo.com/s/nm/20080904/bs_nm/atticus_dc

NEW YORK (Reuters) - Hedge fund company Atticus Capital denied market rumors it was liquidating its positions and closing down and said it had a large net capital position and was looking for investment opportunities, the Wall Street Journal reported on Thursday.

Atticus's two main hedge funds have been hit with losses of between 25 percent and 32 percent this year through August, but investors are largely sticking with it, according to unnamed investors cited by the Journal.

Stocks the Wall Street Journal said Atticus held in recent months, including Burlington Northern Santa Fe Corp (BNI.N), Union Pacific Corp (UNP.N) and MasterCard Inc (MA.N), fell 3.7 percent, 6 percent and 5.9 percent, respectively, amid a broad market sell-off.

Atticus officials could not immediately be reached for comment.

Investors have sought redemptions for the end of September for less than 10 percent of Atticus' capital, Tim Barakett, its founder, told the Journal, adding its flagship fund had seen redemptions accounting for just 3 percent of its capital.

...more...

[Demeter]

28. National City offers cash to cut equity lines

http://www.ft.com/cms/s/0/4a296670-7a07-11dd-bb93-000077b07658.html


National City, the US bank that has been among the hardest hit by the subprime crisis, is trying to reduce its exposure to the riskiest category of home loans by offering customers cash to close their untapped home equity lines.

If the scheme is successful, analysts say other banks could follow suit, choosing to spend money now to avoid taking on more exposure to the US housing slump.

Lenders such as National City have tightened their lending standards and reduced lending volumes sharply, but portfolio exposures could still grow as a result of so-called “open-ended” home equity lines that are committed but as yet undrawn. The bank’s initiative, which was launched at the end of July, encourages National City customers to surrender their unused home equity lines by waiving fees it would normally charge for closing the line and by writing customers a $200 cheque.

“We are giving customers an opportunity to close their lines without incurring termination fees and then we give them a reward to thank them for their business,” said National City.

The bank’s customers are normally charged up to $350 to close a home equity line.

Home equity loans, which people use to stretch for a more expensive home or to raise funds by taking out a second mortgage on their houses, are leading to growing losses for US regional banks that have huge portfolios of such loans on their balance sheets.

National City had $18bn of drawn home equity loans at the end of the second quarter. The bank declined to comment on the extent of its untapped exposure.

“The programme aligns with our strategy to manage our home equity portfolio,” said National City.

“We are spending resources on lines that are not being used, and this programme will allow us to focus on other products.”

Standard & Poor’s on Wednesday cut National City’s credit rating on concerns over its concentrated exposure to the mortgage and housing sectors. Loose lending standards and falling home prices have contributed to rates of late payment as high as 27 per cent on such lines, according to research from Deutsche Bank.

National City reported a $1.76bn loss in the second quarter as it liquidated mortgage portfolios and put aside $1.6bn in provisions for future loan losses.

Some banks, such as Bank of America, Wachovia and Chase, have frozen borrowers’ access to home equity lines or changed the terms to reduce their potential home equity exposure.

National City’s scheme in essence buys back the borrower’s right to access the line, and reduces the bank’s exposure to lending money against houses that have fallen in value.

The bank declined to comment on whether the bank was targeting borrowers in a particular region or with any particular credit characteristics, but it added that customers were thus far “responding well” to the scheme.

[Demeter]

29. Top food exporters ease restrictions

http://www.ft.com/cms/s/0/2db8d524-7a9e-11dd-adbe-000077b07658.html


Top food-exporting countries including India and Kazakhstan have relaxed their trade restrictions on agricultural commodities such as rice and wheat in a move that could help to ease a year-long food crisis.

India on Thursday said it would allow exports of top-grade aromatic rice from mid-October, although it imposed a minimum price of $1,200 (€836, £679) a tonne.

The move is the first easing of India’s rice trade restrictions since the country imposed an export ban on non-basmati rice in April.

Kazakhstan, one of the world’s 10 largest wheat exporters, allowed its suspension of overseas wheat sales, in place since late April, to expire on Monday.

However, it imposed a fresh ban on its less significant soya exports.

Earlier this year, a series of trade restrictions – from Argentina banning soya exports, to Russia stopping shipments of wheat – sent food prices soaring and triggered panic buying by importers concerned about scarce supplies.

The restrictions were made in an effort to keep local markets well supplied in the face of sharply rising food prices.

The moves by India and Kazakhstan follow decisions by Vietnam, Ukraine and Russia to relax or even remove their bans on agricultural commodities ex-ports and are helping to improve global food supplies, say analysts.

Concepción Calpe, an economist at the United Nations’ Food and Agriculture Organisation in Rome, said while the supply of agricultural commodities such as rice was improving, the food supply system was still under stress. “We are still very cautious,” she said.

The monthly FAO food index, a global benchmark for agricultural commodities wholesale prices, fell in August to 213 points, the lowest level since January but still up 37 per cent over the past 12 months.

New Delhi’s decision is likely to be welcomed by Middle East countries, traditional buyers of premium rice. India’s higher grade varieties of rice are usually exported, with the local market absorbing medium and low grades.

Rice traders warned that the move was not an indication that all India’s rice exports were about to be resumed. In an average year, India is the world’s third-largest rice exporter, after Thailand and Vietnam. Ben Savage, of Jackson Son & Co, the London-based rice brokerage, said India was likely to maintain its rice trade restrictions until next year due to the political sensitivity to high inflation ahead of a general election.

“However, India could grant further concessions to export rice to some friendly countries,” Mr Savage said.

Thai medium-quality rice, the global benchmark, was on Thursday at about $730 a tonne, down from a record of more than $1,100 a tonne in May but still significantly higher than the $200-$300 range during 2000-07.

[Demeter]

31. Moscow forced to shore up rouble

http://www.ft.com/cms/s/0/a56c6662-7ab7-11dd-adbe-000077b07658.html


Russia’s central bank intervened heavily to support the rouble on Thursday as analysts said $21bn of foreign capital might have been pulled out of the country as Moscow paid the price for its conflict with Georgia.

The rouble fell as low as R30.41, its weakest level since the Russian central bank adopted its euro/dollar basket in February 2007. The central bank governor admitted there had been capital outflows since the war but said the amount was much lower.

The currency intervention was the first since the height of the war with Georgia at the beginning of August. Before the conflict the central bank’s interventions in the market were aimed at stemming the rise of the rouble, which it manages to a basket weighted 55 per cent in dollars and 45 per cent in euros.

The attractions of resource-rich Russia, a net foreign creditor with sustainable trade and fiscal surpluses and the third-largest foreign exchange reserves, had made the rouble a one-way upward bet. However, the rouble has suffered as foreign investors have pulled money out of Russia.

The outflow of capital from Russia has slowed markedly from its pace in the middle of August, when capital flight was $21bn in the two weeks to the end of August 22, according to Goldman Sachs, the investment bank, and foreign currency reserves fell at their most precipitous rate since the 1998 currency crisis. Capital outflows in the week ending August 29 were a much lower $1.7bn, though over the past two days the value of the rouble against the dollar and euro sank 2 per cent indicating renewed capital flight. To stop the rouble falling further, the central bank sold $3.5bn-$4bn in reserves, currency dealers were reporting.

Dealers at MDM Bank in Moscow believe the central bank sold up to $4.5bn in an effort to halt the rouble’s fall, said Mikhail Galkin an MDM analyst.

The rouble sell off is a sign that in spite of the stabilisation of the conflict in Georgia, and the absence of tough sanctions on Russia, investors still perceive political risk. Russia’s Rts stock market index fell 3.94 per cent after dropping 4.25 per cent on Wednesday.

The central bank said that the capital outflow from Russia last month, when unnerved investors headed for the exits, was $5bn. “According to very preliminary estimates, the outflow totalled around $5bn,” said Russian news agencies quoting Sergei Ignatyev, central bank chairman.

Ivan Tchakarov, a vice-president of emerging markets research at Lehman Brothers, said: “We find CBR claim that only $5bn has left Russia in August highly unlikely ... In our view, August capital outflows may amount to at least $15bn-$20bn.”

Russia’s central bank still has an impressive war chest to defend its currency. Its reserves measured in this week at $582bn, the third-largest foreign currency reserves in the world.

[MrsCorleone]

32. Unemployment numbers

Morning. Big red candle on the ES.

08:30 ECONX August Hourly Earnings y/y +3.6% vs +3.4% consensus, prior +3.4%

08:30 ECONX August Average Weekly Hours 33.7 vs 33.6 consensus, prior 33.6

08:30 ECONX Average Hourly Earnings MoM +0.4% vs +0.3% consensus; prior revised to +0.4% from +0.3%

08:30 ECONX August Unemployment Rate 6.1% vs. 5.7% consensus; prior 5.7%

08:30 ECONX August Nonfarm Payrolls -84K vs -75K consensus, prior revised to -60K from -51K

[UpInArms]

48. Welcome to DU and the SMW, MrsCorleone!

:hi:

[MrsCorleone]

53. Thanks! It's good to be here!

[Hugin]

62. Good morning!

And Welcome! :hi:

[MrsCorleone]

63. Thanks Prag! :hi:

[TalkingDog]

83. Welcome to DU and welcome to the SMW.

These folks can be a bit rowdy and bit of black humor now and then...

But to a person, smart and sane and caring. (and they answer stupid questions too)

[MrsCorleone]

85. Thanks TalkingDog! Love rowdy, love black humor!

[Demeter]

33. Banks reel as ECB redraws funding rules

http://www.ft.com/cms/s/0/b65c2842-7a6a-11dd-adbe-000077b07658.html


Bank stocks in Europe and the UK fell sharply and the risk of owning their debt leapt on Thursday after the European Central Bank declared a crackdown on abuses of its bank liquidity operations.

Jean-Claude Trichet, ECB president, used his regular interest rate conference to announce rule changes more radical than had been expected. These will affect financial firms that have developed too great a dependence on cheap funding from the bank.


Mr Trichet announced a series of measures to increase the cost of using asset-backed securities to obtain ECB funds and to exclude some such deals when underlying mortgages or other loans are not denominated in euros. The announcement follows comments by ECB council member Yves Mersch last month. He said there were still cases where “you see dangers of gaming the system”.

This year it emerged Macquarie Bank had constructed a deal backed by Australian car loans that could be used at the ECB and Lehman Brothers had formed a huge collateralised loan obligation of risky buy-out debt to use at the central bank.

Mr Trichet said the “general character” of its broad-based operations remained unaffected. “We’re not changing it, we’re refining it,” he said.

Only a “small fraction” of collateral would be affected. Banks’ ability to take part in its financing operations would be unimpaired, the ECB president said.

Analysts said the changes would affect banks sharply. “ a further squeeze on banks, increasing the pressure on them to do more expensive longer-term funding ... when there is already investor concern about ... their existing refinancing needs,” said Matt King, credit strategist at Citigroup.

UK banks saw the biggest share falls with HBOS down almost 7 per cent at 282.5p, Barclays down 6 per cent at 336.96p and Lloyds TSB down 5.7 per cent at 288.9p. The worst-affected European banks were UBS of Switzerland and some smaller regional banks such as Erste Group of Austria and Piraeus Bank of Greece.

Since the credit squeeze a year ago, the ECB has boasted its broad-based system had proved more effective than those of other central banks. But in recent months fears have intensified that banks could be exploiting the system by – for example – using riskier collateral than envisaged to get ECB funds.

The changes, which take effect from February 1, include increases in the average “haircuts” applied to asset-backed securities. A haircut is the amount deducted from the market value of a product when judging its value as collateral. In future, a blanket 12 per cent haircut will apply, replacing a previous sliding scale of between 2 per cent and 18 per cent. There will be penalties for asset-backed securities valued using models and for unsecured bank bonds.

Restrictions already in place on banks using assets they themselves had formed were extended to stop banks using assets from issues to which they had offered currency hedges or liquidity support above a certain level.

Analysts at Barclays Capital said the extra haircuts would mean banks might have to post an additional €25bn-€45bn of securities for collateral purposes. “That could cost €375m to €450m annually to banks ... Not in­significant, but probably bearable,” said Laurent Fransolet, analyst at Barcap.

[Robbien]

114. New rule will cost banks €375m to €450m

Meaning banks are right now receiving a €375m to €450m subsidy from government funds.

[trthnd4jstc]

35. Even the low end of the Rich are losing because of BushCo policies.

I am an electrician, and obviously, the work I get, usually, comes from people with money. I have met several low end millionaires who have lost money and seriously question the BushCo values, and said they are considering voting Non-Republican. Yet, one looks at the polls, and Sen. McSame, and Gov. Caribou Barbie are doing so well. What gives? How can so many people continue to think that the Republican Way is working and acceptable. Anyway, back to my original point even the rich are becoming poorer with Bush.

[MrsCorleone]

42. I'm very suspicious of these polls. Looked at an pretty extensive NPR national

poll last week & the demographics skewed heavily to 40-60+ age group, with low internet & cell use. In other words, the younger voters weren't represented.

[MrsCorleone]

44. BTW, being an electrician, do any security work?

The reason I ask, my BIL does soft wiring, but is holding on to hope that homebuilding will come back. I tried to explain why it won't anytime soon. Was wondering if security systems might be something for him to focus on if the market is there.

[trthnd4jstc]

117. I believe that the demand for home security systems is up.

I primarily do repair, and retrofit, and remodelling electrical work for both commercial, and residential clients. Thank G-d! It is uncommon for me to perform new wiring. I know that the demand for home security systems overall is up.

[MrsCorleone]

119. Thanks! I will push him to consider this market.

[Dr.Phool]

71. On the other end, my BIL is a masonry contractor. Or was.

Always was, and still is a Republican. A little over a year ago, he had over 30 people working for him. Times were good. Lots of vacations. A few years ago, he bought almost 8 acres off the Firestone Estate, near Akron. Built a beautiful home.

Now, his company is gone, and he's working through the union again. Filed bankruptcy last week. And, I still can't get near a political conversation with him or my sister.

[Hugin]

78. ...

Those I know are all blaming "Cawngreiz".

I've tried a couple of times to explain through the nuance that #1: A properly operating Congress (No constant filibusters
by the minority party) still needs the President to sign off on what few things do pass. #2: I suspect the Dem Leadership
in Congress is loath to press hard enough to cause Bush to call in his pet USSC to make all of his signing statements permanent. Re-writing the entire Constitution in his image during the process. You know they'd do it in a heartbeat.

[MrsCorleone]

82. I hear ya about the staunch republicanism.

My father has always been this way. Part of the reason, in his case, is that he's been fairly removed from the real marketplace by working in the government all his life. Plus, he's fully immersed in the MSM & talk radio. He's like a walking right wing talking point. Very sad. He did, however, confess a few months ago that he may not vote this Nov, likely because Limbaugh told him to dislike McCain.

On the upside, a 2-time Bush supporting evangelical I know is considering Obama. She votes on the one big, ridiculous issue: abortion. My husband & I have explained to her about the markets and this seemed to resonate with her. Also, watching Obama speak last week may have sealed the deal. Time will tell.

Sorry to hear about your BIL. Mine is the same, only the bottom is just starting to fall out for him. It's a hard lesson to learn.

[Demeter]

36. Coke offers $2.4bn for China juice maker

http://www.ft.com/cms/s/0/ef07b10a-7963-11dd-9d0c-000077b07658.html

Coca-Cola has offered $2.4bn in cash to buy China Huiyuan Juice Group, in what would be the biggest takeover by a foreign company in China.

The deal will help the US-based company’s expand in the world’s most populous nation and allow it to diversify its drinks portfolio at a time when growth in the carbonated drinks market in China is slowing.

Muhtar Kent, Coke’s chief executive, said the acquisition would “provide a unique opportunity to strengthen our business in China, especially since the juice segment is so dynamic and fast growing ”.

Coke’s efforts to expand beyond carbonated drinks have included buying Multon, Russia’s second largest juice company, three years ago, and its $4.1bn acquisition of Glacéau, maker of vitamin water, in 2007.

Consumers in China, as in Europe and America, have increasingly turned to juices, water and other non-carbonated drinks in recent years. Last year, sales volume of fruit juices in China surpassed that of carbonated drinks for the first time, according to Michelle Huang, an analyst at Euromonitor International.

Ms Huang said China’s fruit and vegetable juice market was worth $10.6bn at the end of last year and is growing at an annual rate of 18 per cent.

Coke said it had agreed to buy a 23 per cent stake in Huiyuan, China’s biggest juice-maker, from France’s Danone and another 6.8 per cent from Warburg Pincus, the private equity group.

While Coke has already secured commitments for 66 per cent of Huiyuan’s shares – from Danone, Warburg Pincus and Zhu Xinli, Huiyuan’s chairman – the deal still needs the approval of the Chinese authorities.

Danone said it decided to sell its stake because “the price is good, it’s three times the market price and reflects a ratio of 50.”

Danone said it was also not in a position fully to take over Huiyuan as it was focusing on the natural water segment of the drinks market.

Coke is offering to pay HK$12.20 ($1.60) a share in cash, which is nearly three times Huiyuan’s latest closing price of HK$4.14.

Huiyuan’s shares, which had fallen by half since the beginning of the year, closed up 164 per cent at HK$10.94.

Coke was advised by RBS and Huiyuan by Goldman Sachs.

[MilesColtrane]

87. Mmmmm.....crab juice.

[Ghost Dog]

97. Interesting moves.

Eco-freaky though I would like to increasingly be, I predict plenty of action in the huge Food and Beverage Conglomerate field in the future, if there is to be a future. So I'm still haven't cashed in these (legacy) shares.

[UpInArms]

37. Look Out Below! U.S. stock futures extend losses on jobs data

http://www.marketwatch.com/news/story/us-stock-futures-extend-losses/story.aspx?guid=%7B50662B43%2D67D0%2D4837%2D911F%2DBD449EF4191E%7D&dist=hplatest

NEW YORK (MarketWatch) -- U.S. stock futures shot lower after the government reported the nation's unemployment rate climbed to 6.1% in August from 5.7% in July. Down about 30 points ahead of the data, futures for the Dow Jones Industrial Average ($INDU: 11,188.23, -344.65, -3.0%) were off more than 100 points in its wake. Futures for the S&P 500 ($SPX) declined 14.6 points to 1,222.00, while Nasdaq 100 futures fell 17 points to 1,758.75.

[radfringe]

40. but the economy is fundamentally sound.....

somebody please ask mccain how his economic plan is different than bush's....

[UpInArms]

45. Box plant closures loom in the U.S

http://www.reuters.com/articlePrint?articleId=USN2241483020080822

NEW YORK (Reuters) - Industry consolidation, improved efficiencies and a slowdown in the U.S. economy are likely to drive further U.S. box plant closures in the months ahead, top industry executives told the Reuters Paper Summit.

The containerboard industry has been battling with falling domestic demand and a sharp escalation in costs, bruising stocks in the sector over the last few months.

"I think we will be in a position later this year to start talking about where some of the box plant rationalizations might take place," said Tim Nicholls, chief financial officer of International Paper (IP.N: Quote, Profile, Research, Stock Buzz).

Memphis, Tennessee-based International Paper just completed its $6 billion acquisition of Weyerhaeuser Co's (WY.N: Quote, Profile, Research, Stock Buzz) packaging assets, a deal that made International Paper the largest North American containerboard maker, ahead of rival Smurfit-Stone Container Corp (SSCC.O: Quote, Profile, Research, Stock Buzz).

<snip>

The company has closed more than 30 box plants and cut about 5,700 jobs since it announced its restructuring program in 2005. It has also closed a few of its containerboard mills.

...more...

Nicholls said the company intends to close 10 to 13 box plants during the first phase of reductions, but not all these closures would be announced at the same time.

Latest statistics indicate that year-to-date box shipments in the U.S. are down about 1.8 percent, while containerboard inventory levels are at historic lows.

[Buttercup McToots]

46. Not

gonna be a good day at the casino...
Think I'll make cookies...
:silly:

[AnneD]

103. What kind.....

I like mine Chock Full of Nuts ;) . Maybe we should do like they do in England.....You could be Baker to Wall Street royalty.

[UpInArms]

47. US RATE FUTURES-See chance for '08 Fed cut after jobs data (to 1.75)

http://www.reuters.com/article/economicNews/idUSN0541155820080905

LOS ANGELES, Sept 5 (Reuters) - U.S. short-term interest rate futures jumped on Friday after a weaker than expected August payrolls report, to levels that showed a chance the Federal Reserve will cut rates late this year.

Futures point to the Fed holding the fed funds rate steady at 2 percent at this month's policy-setting meeting.

By year-end futures show a 10 percent chance that the Fed will cut rates to 1.75 percent.

...more...

[UpInArms]

49. Bank of America: Ready to settle on auction rates

http://www.reuters.com/article/bondsNews/idUSN0538649120080905?sp=true

NEW YORK, Sept 5 (Reuters) - Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz), said it is ready to settle federal and state probes into the marketing of auction-rate securities, joining eight other companies that reached deals.

The bank said it has been in talks for nearly a month with the U.S. Securities and Exchange Commission and regulators in New York and Massachusetts on a resolution that would provide "liquidity relief" to customers hurt when the $330 billion market seized up in February.

"We are ready and willing to enter into an agreement that follows the same basic terms of previously announced settlements," bank spokeswoman Shirley Norton said in a statement Thursday. "We understood that we had reached such an agreement in principle nearly two weeks ago."

Auction-rate debt has rates that reset in periodic auctions. Regulators say brokerages misled investors into believing the debt was safe and the equivalent of cash.

But after the market seized up, tens of thousands of investors could not sell the debt or could only sell it at a loss, according to regulators.

Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz), Deutsche Bank AG (DBKGn.DE: Quote, Profile, Research, Stock Buzz), Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz), JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz), Merrill Lynch & Co (MER.N: Quote, Profile, Research, Stock Buzz), Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz), UBS AG (UBSN.VX: Quote, Profile, Research, Stock Buzz) and Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz) have settled regulatory allegations tied to how auction-rate debt was sold.

The eight companies agreed to buy back more than $44 billion of the securities and pay in excess of $520 million of fines and penalties.

...more...

[UpInArms]

52. China central bank in talks to shore up capital-NYT (US investments losing money)

http://www.reuters.com/article/bondsNews/idUSN0541698220080905

WASHINGTON, Sept 5 (Reuters) - China's central bank has begun discussions with the country's finance ministry to discuss ways to shore up the bank's capital as its investments in U.S. Treasury and mortgage debt decline in value, the New York Times reported on Friday.

The Times, citing three unnamed people familiar with the talks, said the People's Bank of China's tiny capital base of $3.2 billion has not grown during a seven-year buying binge of roughly $1 trillion in Treasury debt and mortgage-backed bonds issued by Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz).

The newspaper said that most likely the finance ministry would simply transfer bonds of other Chinese government agencies to the bank to increase its capital.

<snip>

China's central bank has been one of the main advocates of a steady strengthening of the yuan over the past three years, the Times said. But the yuan's rise, combined with low returns on U.S. assets, has resulted in a real annual loss of about 10 percent on the PBOC's dollar investments, the report said.

...more...

[AnneD]

54. Morning Marketeers....

:donut: and lurkers....Some of you were naughty little elves after the WS shops closed.tsk, tsk, tsk.;)

I endured the McCain's greatest hit GOP tour last night-I think that is why I have a headache this morning and my wallet is hung over. Wonder when the rest of the Middle Class will wake up with the same ailments. GOP luddites are quick to say Obama doesn't have a plan, he doesn't explain HOW he is going to do it. Frankly, I GOT zipppo from McCain other than he wants to shake my hand while they want to continue picking my pocket. You can just colour me cynical I guess. Even if I weren't a DEM, I'd vote then out just to air the linens so to speak, things are getting awfully state.

Guess I need to get the pool supplies ready....

Happy hunting and watch out for the bears.

[AnneD]

56. UFO IN THE POOL....

Unidentified floating object found in the pool. It's attracting sharks and flies. It will take me all day to clean up this mess. Swim at your own risk....

Guess the date the DJIA rolls back to the level it was when the chimp took office-10,578.24. You can revise your dates until the DJIA hits(IMPORTANT CHANGE) 10700 (got to have a cut off). Anyone can join, just give a date and your reasoning for that date. Note the change on the cut off. That should make for a good horse race. I will check the post date/time for last minute posters but those that guessed the date way in advance get extra points. The earlier posters are at the top in the cases of multiple guesses on the same day.

Prag.....9/5
MoJo Rabbit.....9/5
Kicksana.....9/8
JuneBourder.....9/4
MuleBoy(aka hiz honna da mayor).....9/11
Nickster.....9/12
Ozy.....9/19
AnneD..... 9/19 Like the triple witching thang.
Demeter.....9/21
Ozone man.....9/23
JuneBourder.....9/29
Birthmark....10/10
Demreading DU.....10/16
TansyGold.....10/13
Roland99.....10/17, you have 2 dates, are they correct?
AnneD....10/24
Neshanic.....10/24
MsLeopard.....10/31
Wordpix.....11/3
Passingfair.....11/4
Ship wrack.....11/5
Wednesdays.....1/16/2009 your optimism is so refreshing.



Remember-you can change the dates as we learn more. If your date isn't on the list, e-mail me and I'll add it the next time I post. I erased expired dates so you can guess again. I post about one a week-more often the closer we get to the number. The winner get the praise and admiration of those on the Stock Watch Thread. We have also kicked in for a years worth of bragging rights and Karl Rove as you own pool boy if we can find Speedos to fit. There is still time to place your bets.....And please-no Reggie bars in the pool.

IMPORTANT ADDENDUM: I believe, as an investor, one day does not a trend make. So as activity coordinator of the pool, additional guesses are allowed should it dip down but pop up above the cut off. Call it the Indian Summer Clause. I personally think that 11000 is their PIN, but the fact that it cannot be pumped up any further anymore points to weakness in the system-for my $0.02.

[UpInArms]

58. g'morning AnneD!

My first pick has come and gone and now I'm going to give a new pick on the pool date

October 30 - Thursday - because the new down days are Thursdays and they are pumping on Fridays to make it look like people want to hold stocks over the weekend



anyway - thanks for keeping the pool open!

[Hugin]

66. Looks like I may be a smidgen pre-mature...

Can't see the Dow making it -600 points today and if it did... Something tells me we'd all have something more
important to worry about like greeting our new Interplanetary Overlords or looking for open Mine Shaft Space
to prevent a "Mine Shaft Gap"_*. Now, I know some here will say McCain-Bush/Palin-Bush should warrant
such a thing, but, I'm not even going to give them credit for being that bad.

But, these things are never precise.

So, maybe I'll work out a few more days... Wouldn't want anyone to be shocked seeing me in my speedos. :D

* Daily reference to "Dr. Strangelove".

[radfringe]

84. my pick -- 9/11 9/11 9/11

[Ghost Dog]

98. That's a Thursday,

and apart from the more recent obvious, is the date in 1973 of the unforgivable events in Santiago de Chile, and is also a national(ist) holiday in Catalonia known as "La Diada" commemorating a long-ago apparent defensive victory over Castillian invaders.

So I reckon the US variety of RW nationalism will not allow the Dow to crash that far on that day.

But, put me down for one week later, Thursday September 18th, would you please, AnneD - that's the day before your own first pick (you have 2 dates, are they correct?). :evilgrin:

Ommmm.

[AnneD]

104. Just like royality...

you can have an heir and a spare;)

[Mojorabbit]

99. Hi Anne

my date has come and almost gone so I will go with 10/11. I am amazed they have propped it up this long.Thanks!

[AnneD]

105. This pool thing...

has drawn a little extra attention to them propping this thing up....Reminds me of Disney's Dance of the Hours, when the Gators were propping up the Hippos. Still, a clip that never fails to make me laugh, just like their feeble efforts at rigging the system.

[Demeter]

113. AnneD You Still Got Me on Sunday! 9/22 Please!

[UpInArms]

61. Need a good laugh? Nominee for worst hotel in Europe

http://www.marketwatch.com/news/story/bra-thief-busted-other-crazy/story.aspx?guid=%7B6708128C%2D1B6E%2D4EFD%2D9299%2D3B96D3BC278A%7D&dist=hplatest

A British family had the unfortunate experience of checking into "Hotel Hell" on a recent vacation to Bulgaria. As if food poisoning wasn't enough during their stay at the Egyptian-style, four-star Royal Park Hotel in Elenite, they witnessed a staff member shoot a teenage guest in the face with a stun gun after accusing her of stealing towels. "The lassie who was shot just kept on screaming. It was horrific, I was terrified," hotel guest Margaret Strachen told the Sunday Mail. A melee ensued that involved six "massive" security guards and other hotel guests. The Strachens grabbed the children and fled the violence by running into the hotel's bar -- only to find themselves in the middle of a porno shoot. Naked actors frolicked in the foyer in full view of the children. After spending nearly $2,700 on their Bulgarian getaway, we think the Strachens will probably opt for an American style "staycation" for their next holiday. The travel agent offered the family 400 bucks compensation for their ordeal. No comment from the hotel. There's service with a smile.

there are more stories at the link :D

[Hugin]

64. Sounds like my last trip to visit the relations...

It's not all bad, tho. Pa has started sending me clippings from the "Rolling Stone Magazine".

[Dr.Phool]

88. Even Miami is better than that!

[Hugin]

67. ~11:15 EMT: Floor is getting pretty slick...

Dow 11,060.32 -127.91 (-1.14%)
Nasdaq 2,221.88 -37.16 (-1.64%)
S&P 500 1,219.18 -17.65 (-1.43%)

10y bond 3.57% +0.01 (0.28%)

[UpInArms]

75. 11:29 EST gaining traction

Dow 11,098.18 90.05 (0.80%)
Nasdaq 2,228.16 30.88 (1.37%)
S&P 500 1,222.34 14.49 (1.17%)
10-Yr Bond 3.576% 0.067

NYSE Volume 1,826,652,375
Nasdaq Volume 820,558,250

[Tandalayo_Scheisskopf]

68. Kasino Kalamities

CLV08.NYM Crude Oil Oct 08 106.93 10:33am ET Down 0.96 (0.89%)
HOV08.NYM Heating Oil Oct 08 2.9888 10:09am ET Down 0.0349 (1.15%) <--==:woohoo: 1.
NGV08.NYM Natural Gas Oct 08 7.349 10:33am ET Up 0.027 (0.37%)
PNV08.NYM Propane Gas Oct 08 1.65 8:06am ET 0.00 (0.00%)
RBV08.NYM RBOB Gasoline Oct 08 2.702 10:09am ET Down 0.0384 (1.40%)

1. This is the first time HO has been below 3.00 in recent memory. Damned good to see. May it continue its fall.

Story on BB, yesterday, was saying that the hedge funds, pension funds and sovereign wealth funds are getting out of commodities in general and energy in particular, at a fast and furious rate. If they are going underwater. Look for more drops.

Also, the CFTC is hot on the trail of holders of physical petroleum and distillate stocks under-reporting their stocks to the EIA. There should be more to come on this, as the investigations *should* last beyond November and January and then it's gonna be cloacal pucker time for some folks.

[Hugin]

69. Didn't I read only yesterday...

that the EIA was claiming it knew of no investigations? Was that a Red-Herring?

[UpInArms]

72. somehow, all of the

nascent activity on the regulatory side for the past 7+ years - seeing some movement now reminds me of that saying:

"Just wait 'til your father gets home!"

Looks like they are attempting to get their ducks in line before Obama and the Dems come in and see exactly who has been asleep (?) at the wheel.

:hi:

[Ghost Dog]

101. Manipulated, much?

Running scared in the face of, and/or dropping prices to fight off forthcoming serious action on alternative (non-oil, at least if not completely renewable) energy?

[Tandalayo_Scheisskopf]

86. Whoo Boyee.

Looks like some of the harsher economic realities are starting to filter into the puddin' heads in the Kasino:

CLV08.NYM Crude Oil Oct 08 106.21 11:17am ET Down 1.68 (1.56%)
HOV08.NYM Heating Oil Oct 08 2.9658 11:17am ET Down 0.0579 (1.91%)<--== 1.
NGV08.NYM Natural Gas Oct 08 7.356 11:17am ET Up 0.034 (0.46%)
PNV08.NYM Propane Gas Oct 08 1.65 8:06am ET 0.00 (0.00%)
RBV08.NYM RBOB Gasoline Oct 08 2.6831 11:17am ET Down 0.0573 (2.09%) <--== I wonder when the pump price goes below 3.00?

1. I guess they are starting to figure out that, with heating season coming on, that you ain't gonna sell what people can't afford. That, and people freezing to death in their own homes is terrible public relations.

[antigop]

90. Employers say IASB proposal could put them off DB (pension) plans

http://financialweek.com/apps/pbcs.dll/article?AID=/20080905/REG/809059993/1036

Nearly half of employers believe proposed International Accounting Standards Board rule changes in how retirement benefits are accounted for in financial statements would discourage them from offering defined benefit plans, according to a new survey conducted by Watson Wyatt Worldwide.

Though most executives of companies surveyed believe the proposed changes would not weaken their commitment to pension and retiree medical plans, 46% of respondents said the proposed changes to cost recognition would discourage them from offering defined benefit plans, while 24% believe the measurement of contribution-based plans would also deter them from offering the plans, an 11-page report about the survey said.

“If implemented, the proposed changes could mean higher assessments of liabilities and increased volatility in employer financial statements,” John Steele, a senior retirement consultant at Watson Wyatt, said in the statement. “The more companies engage the IASB in a dialogue, the better. Providing early feedback could help influence the development of standards that might be adopted down the road.”

The proposed rules could have a significant impact on U.S. corporate financial statements following the SEC vote last week to recommend U.S. companies move toward international accounting standards, said a Watson Wyatt statement on the survey.

[AnneD]

107. I was listening to Obama when he was in Ohio...

He was wanting to make the employee pension plan the first creditor in a bankruptcy-not the last. I think more folks would go for that, but I guess it is not a sexy topic for most folks. How do they handle pension in Europe and companies go under. I know universal health will go a long way toward helping American companies compete. If there is no tax break businesses will jettison DB plans like warm potato salad at a picnic.

[Roland99]

91. 12:39pm - What? Me worry?

Dow 11,185.63 -2.60
Nasdaq 2,248.26 -10.78
S&P 500 1,232.39 -4.44
Oil $105.85 -$2.04
10-year 3.64 %0.00
Gold $810.50 $7.30

[Hugin]

94. In the halcyon days of the old west...

Right about now they'd be shaking down the Dealer looking for loose cards and extra Aces.

You realize this is led by Financials, right?

Oh, and bad employment news is always good for the Markets. (In a Supply-sider's world.)

[UpInArms]

93. Yeah! Lehman will be saved by selling bad assets at 6 cents on the dollar!

01. Blackstone, KKR may buy Lehman assets: report

[skoalyman]

106. 11,228.94 + 40.71 no fear the super ppt is hear

:crazy:

[AnneD]

108. I'm telling you ......

11,000 is their PIN. That's when everyone start counting cards-to carry on with the old west analogy.

[Karenina]

110. Yup, yup!

Hey Anne, OCTOBER 20. Black Monday.

[RUMMYisFROSTED]

111. Always in October.

[Robbien]

115. NYT Believe it or not, China's CB needs cash.

The People's Bank of China, China's highly-leveraged central bank, is in need of a capital infusion. It owns about $1T in Treasury and mortgage-backed debt - on a capital base of just $3.2B - the value of which is declining sharply on the heels of a strong yuan. It could, of course, print more money, but not without running the risk of stoking inflation. The predicament could prompt China to stop allowing the yuan to continue rising vs. the dollar, heightening its trade tensions with the U.S.

http://seekingalpha.com/article/94081-wall-street-breakfast-must-know-news

[ozymandius]

118. Calling it a day.

Dow 11,220.96 Up 32.73 (0.29%)
Nasdaq 2,255.88 Down 3.16 (0.14%)
S&P 500 1,242.31 Up 5.48 (0.44%)
10-Yr Bond 3.66% Up 0.017
NYSE Volume 5,085,734,500
Nasdaq Volume 2,270,395,250

4:25 pm : Friday was shaping up to be another session of hefty losses until buyers emerged midsession to lend support. Leadership came from the financial sector, which carried the major indices off their session lows.

The tone Friday turned decidedly pessimistic early on when the latest dose of government data revealed nonfarm payrolls fell by 84,000 during August, bringing the unemployment rate to 6.1%. The decline in payrolls was essentially in-line with expectations, but the headline unemployment rate was higher than expected.

Sentiment received little help from technology, which is the largest among the major economic sectors. Shares of tech firms have been hit during recent sessions amid fears that a global slowdown will weigh on their performance. Nokia (NOK 20.62, -1.69), a global leader in phones and handsets, believes its third quarter market share will be down sequentially, which seemed to confirm the aforementioned concerns.

Meanwhile, Dell (DELL 20.41, +0.05) is looking to divest its factories, according to The Wall Street Journal. The move would free up capital for the firm by ridding itself of aging assets and allow Dell to avoid the costs of idling factories during slow demand.

However, the tech sector did receive leadership from flash memory storage company SanDisk (SNDK 17.64, +4.18). SanDisk saw its shares surge amid takeover chatter.

Financials garnered attention after Reuters reported that Blackstone Group (BX 16.43, -0.31) and KKR are each looking to buy parts of Lehman Brothers (LEH 16.20, +1.03). Their interest reportedly centers on the firm's real estate and asset management businesses. Shares of LEH finished near their session high after showing losses early on.

The news helped financials emerge as a leader, helping induce broad-based gains. They were down 1.7% at their session low, right about the time the S&P 500 was down 1.6%. However, financials finished the day as the best performing sector, up 3.2%. The S&P 500 ascended to close with decent gains.

Sliding oil prices also also helped the overall sentiment. Oil retreated 1.4% to settle around $106.40 per barrel. It is down 7.8% this week.

Oil's decline was helped by a stronger dollar. Given the concerns of a global slowdown, the U.S. continues to attract funds as investors seek a safe investment environment. As such, the dollar climbed 0.5% against a basket of trade-weighted currencies. It is now up 3.0% this year. DJ30 +32.73 NASDAQ -3.16 NQ100 -0.4% R2K +0.0% SP400 +0.4% SP500 +5.48 NASDAQ Adv/Vol/Dec 1265/2.26 bln/1512 NYSE Adv/Vol/Dec 1583/1.20 bln/1518