STOCK MARKET WATCH, Wednesday July 11

[ozymandius]

Source: DU

Wednesday July 11, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 561 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2378 DAYS
WHERE'S OSAMA BIN-LADEN? 2090 DAYS
DAYS SINCE ENRON COLLAPSE = 2051
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

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

AT THE CLOSING BELL ON July 10, 2007

Dow... 13,501.70 -148.27 (-1.09%)
Nasdaq... 2,639.16 -30.86 (-1.16%)
S&P 500... 1,510.12 -21.73 (-1.42%)
Gold future... 664.40 +1.90 (+0.29%)
30-Year Bond 5.13% -0.11 (-2.17%)
10-Yr Bond... 5.04% -0.12 (-2.35%)






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

[UpInArms]

1. dollar watch

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

Last trade 80.729 Change -0.043 (-0.05%)

US Dollar Sets Multi-Year Lows on US Treasury Yield Tumbles

http://www.dailyfx.com/story/currency/eur_news/US_Dollar_Sets_Multi_Year_Lows_1184091883911.html

The US dollar plummeted to fresh record lows against the Euro and multi-decade depths against the British Pound, as a sharp drop in bond yields left the greenback with little fundamental support on the day’s price action. The Euro moved to an impressive $1.3720 through late New York trade, while the Pound changed hands at $2.0250 at time of writing. Despite the American currency’s modest gains against its Canadian counterpart, the trade-weighted US dollar index fell to its lowest since January, 2005 at 80.95.

Dollar declines came on a largely empty economic calendar, with the morning’s Wholesale Inventories report failing to elicit noteworthy reactions across USD pairs. A previously anticipated speech by the Fed’s Ben Bernanke likewise did nothing to the greenback’s performance; the Chairman spoke on largely academic subjects and said little about the current outlook on price pressures and monetary policy. Instead, traders moved on a sudden return to risk aversion across worldwide financial markets.

Renewed fears about the US subprime lending sector were enough to spark a sharp rally in US Treasury debt—setting off a chain reaction in the domestic currency and the presumably risky global carry trade. The Standard and Poor’s debt rating agency announced that it would place $12 billion in subprime debt under review for a potential downgrade. Such news arguably comes of little surprise to seasoned fixed income traders; collateralized debt obligations (CDO’s) carried very favorable ratings despite elevated risk of subprime default. Yet the actual announcement was enough to spark a pronounced flight to safety across asset classes. The low-yielding Japanese Yen and Swiss Franc posted their largest single-day gains since early March as speculators liquidated overleveraged carry trade longs.

...more...

Chinese Yuan Rises To Record, Surplus Widens To $26.9 Billion

http://www.dailyfx.com/story/dailyfx_reports/top_fx_market_movers/Chinese_Yuan_Rises_To_Record__1184093939587.html

Boosting the Chinese yuan to another record at 7.5773 in the overnight, the market couldn’t help but notice that China’s surplus widened far past any expectation for the month. In June, China’s trade surplus with global partners widened to an impressive $26.9 billion according to the customs bureau. Higher by 86 percent on the annualized comparison, the report overshadowed estimates which pitted the surplus at $23.8 billion. For the record, exports surged 27 percent to a record $103.27 billion as imports rose a paltry 14 percent to $76.4 billion. Notably, the trade surplus with the world’s largest economy grew to $14.1 billion in the month and $73.9 billion for the first half of the year. As a result, today’s figure will continue to help the case put forth by US legislators that an artificially low currency continues to help the Chinese economy sport an incredible trade surplus and a torrid pace of economic growth. Traders can likely expect further rhetoric from US Congressmen as further sanctions are likely to be concocted.

...more...

[UpInArms]

3. Dollar falls as sentiment dented

http://news.yahoo.com/s/ft/20070711/bs_ft/fto071120070640224066

The dollar fell to fresh lows on Wednesday as concerns over subprime mortgages and US corporate earnings dented economic sentiment and raised the likelihood of interest rates being left on hold for the foreseeable future.

On Tuesday, ratings agency Standard and Poor's said it was considering downgrading $12bn of bonds backed by US subprime mortgages. Meanwhile, profit warnings from housebuilder DR Horton and home improvement retailer Home Depot (NYSE:HD - news), raised concerns over both the state of the US housing market and the quality of quarterly corporate earnings.

The prospect of US interest rates being left on hold for the rest of the year were heightened after Federal Reserve chairman Ben Bernanke failed to send the hawkish message on inflation most had expected from his speech on Tuesday.

Brian Garvey at State Street said debate should begin to centre around the question: "Do the risks of a hard landing as a result of the housing downturn now outweigh the inflation risks posed by rising resource utilisation?"

He added: "We expect more and more Fed officials to ultimately gravitate towards the first viewpoint over the course of the summer."

...more...

[Buttercup McToots]

9. $80.50

:eyes:

[UpInArms]

12. I would say -

hang on, it's going to be a bumpy ride -- but I am starting to think it will just be one smooth steep slide.

:hi:

[54anickel]

13. Will Japan Destroy the yen to save the dollar?

(Couple of days old - sorry if it's a dupe)

http://www.europac.net/newspop.asp?id=9132&from=home

As the Japanese government continues holding short-term interest rates near zero while printing yen like it is going out of style, getting out of the yen has now replaced pachinko as the national pastime for rank and file Japanese. With housewives and cab drivers debating the best techniques to exchange their yen savings for higher yielding non-yen assets, the Japanese monetary authorities are facing the prospect of the complete destruction of their own currency, subjecting their citizens to the horrors of hyperinflation.

For years, the storied efficiency of the Japanese economy has kept its citizens from understanding just how much purchasing power they were losing to inflation. As the extremely productive Japanese economy worked to lower consumer prices, the inflationary monetary policy of the BOJ reversed those declines, robbing Japanese consumers of the benefits of falling prices. This loss represents a massive subsidy to American consumers.

However, inflation is about to get so out of control in Japan that prices will soon rise despite the natural forces that would otherwise have lowered them. As rising prices become impossible to ignore, perhaps the Japanese will borrow a page from the U.S. playbook and recalculate their CPI to hide the grim reality. However, with the carry trade kicking into high gear, such propaganda efforts will likely not succeed.

The Japanese are pursuing this reckless monetary policy with the deliberate goal of creating inflation, and they are in danger of succeeding beyond their wildest dreams. Despite the tendency of central bankers to argue that consumers are better served by rising prices rather than falling prices, “deflation” was never a real threat to Japan. On the contrary, falling consumer prices are one of the natural rewards that people enjoy in market economies. The fact that this benefit has been denied to most people in modern times as a result of government created inflation is one of the great tragedies of our time. To spare its citizens from suffering the "scourge" of being able to buy products at lower prices, the Japanese are close to destroying one of the greatest savings hordes in history. The question is why are they doing it?

The only logical answer I can offer is that the Japanese realize that if they stop the flow of global liquidity they will destroy the dollar and the U.S. economy. To survive, the U.S. must be able to both limitlessly exchange the dollars it prints for the goods the rest of the world makes and then pay low rates of interest on its IOU’s that foreigners accumulate as a result. Were the Japanese to turn off the monetary spigot and raise interest rates to normal levels, Americans would not be able to do either.

more...

[54anickel]

30. Japan Should Diversify Reserves, Abe Adviser Ito Says (Update2)

http://www.bloomberg.com/apps/news?pid=20601080&sid=aoJJUD7FH_7Q&refer=asia

July 11 (Bloomberg) -- Japan, the largest overseas holder of U.S. Treasuries, should invest $700 billion of its currency reserves in higher-yielding assets such as stocks and corporate bonds, said Takatoshi Ito, an adviser to the prime minister.

The reserves should be managed by a special fund that will gradually diversify into euros, Australian dollars and emerging- market currencies, Ito said in an interview in Tokyo.

Central banks in South Korea, China and Taiwan have announced plans to buy assets with higher returns than U.S. debt, contributing to a 7.4 percent drop in the dollar against the euro in the past year. The establishment of sovereign wealth funds, pioneered by Singapore in 1981, may also reduce demand for Treasuries, pushing up U.S. borrowing costs.

``Japan should make more use of its reserves, following Singapore's example,'' said Yuji Kameoka, senior economist and currency analyst at Daiwa Institute of Research in Tokyo. ``In order to manage these funds safely, a more appropriate amount is $300 billion.''

snip>

A Carry Trade

Ito said that the Ministry of Finance, which expanded its currency reserves by selling yen in 2003 and 2004, has essentially borrowed the funds from the Japanese people.

``Foreign currency reserves are assets that belong to our citizens,'' Ito said in an interview July 6. ``The government has borrowed the money from the people and it is engaged in a kind of carry trade. So it has to show some higher return on the investment.''

Ito, a member of Prime Minister Shinzo Abe's economic advisory panel, may need to overcome opposition from the finance ministry. Carry trades involve borrowing yen to invest in higher- yielding assets overseas.

``It's true that foreign-currency reserves in Japan represent a broadly defined carry trade position, because they are kept by borrowing,'' said Tomoko Fujii, head of Japan economics and strategy at Bank of America N.A. in Tokyo. ``I would not expect any significant change in foreign-currency reserve management.''

Selling Treasuries

more...

[Ghost Dog]

53. ¿"Limitlessly"?

Great stuff, 54aN.

Those who know me will know that around the end of 2005 I moved out of my accounts most everything that remained denominated in US dollars (which had already fallen considerably in value since, uh, around 1999).

Recently (or not so recently), on the Yen account (5% or so at one stage) after having made 25% or more profits on the Tokyo exchange, in high-quality companies I still strongly believe in, I have been selling out of Yen into other currencies, viz: €uro, and even Swiss Francs (The Pound Sterling I don't play with. It sits there, relatively solid, earning interest at compound rates). Some minor plays in the Canadian economy, in Canadian dollars, have also paid well.

Sure, most ordinary people over there and over here just have no clue (or worse, believe what the TV tells them). Sheep ripe for the fleecing.

However, I do expect my residual Yen current cash account to rebound, to significantly revalue, before this current phase of history is over...

Thanx for the honesty, people.

[54anickel]

16. I noticed the housing bubble and subprime lending has been making the snewz again

lately. Caught a segment on the Miami condo craze early this AM on that ABC middleofthenight news insomniac thingy they run instead of infomercials. Can't find any link to it, but came across this Housing Bubble Tracker over at Seeking Alpha

http://usmarket.seekingalpha.com/article/40630

Check out all of these listed stories on Subprime....
(I got too lazy to put in all of the links)

Subprime Fallout and Foreclosure Impact

Minority Families Face Wave of Foreclosures (RIS Media, July 10th): "More than 250,000 black and Hispanic families are expected to lose their homes in the next few years due to foreclosure. For many, the financial trouble a mortgage they should never have been given… Center for Responsible Lending: African American and Hispanic borrowers were more than 30% more likely than their white counterparts to receive a higher rate on… loans, even after accounting for differences in risk... In 2005 alone, black and Hispanic borrowers took on about 870,000 high-priced loans (conventional first mortgages for 1-4 family, owner-occupied dwellings)— with one out of five expected to go into foreclosure."

ForeclosureS.com: 3 Out of 1000 Owners Have Lost Their Homes This Year (Business Wire, July 9th): "ForeclosureS.com: 3 out of every 1,000 homeowners in the US lost their homes to foreclosure in the first half of the year. That’s up 41% compared to the same period last year… Per capita 247,907, that ended up in the hands of banks or lenders this year because homeowners couldn’t get their mortgage default problems solved… ForeclosureS.com tracks and analyzes foreclosure filing through its database of more than 3.2 million listings nationwide. Per capita reflects the number of filings as a percent of the number of households in an area."

Banks Losing Up To $52 Bln Over Subprime (Reuters, July 9th): "Credit Suisse: Banks could lose up to $52 billion over time due to their exposure to collateralized debt obligations that invested in U.S. subprime mortgages. Most of the losses would stem from loans to hedge funds, compared with an expected $5b-$10b from banks' direct investment in subprime CDOs… Troubles at several other hedge funds have came to light since Bear Stearns' fund problems: Cheyne Capital's Queens' Walk, Cambridge Place Investment's Caliber Global Investment, and United Capital's Horizon Funds."

Hedge Fund Executive Wants Block To Return To Tax-Preparation Roots (Kansas City Star, July 9th): "In a preliminary prospectus filed with the SEC, the hedge fund executive Richard Breeden described H&RBlock’s (HRB) late 1990s expansion into a variety of financial-service business as ill-conceived and ineffectively executed… Two weeks ago, the Breeden group announced plans to nominate three directors to Block’s board in an effort to improve returns to shareholders. Breeden Capital Management… owns a 1.86% stake in HRB: "We will urge the board to end further use of shareholder capital to pursue subprime mortgage lending, securities brokerage, banking and other noncore activities.”

Few Foreclosures for N.O. (New Orleans City Business, July 9th): "New Orleans spokesman Alfred King: Four is the total of properties in New Orleans Fannie Mae (FNM) foreclosed last year. There’s been no jump in FNM foreclosures in the city. The foreclosure picture in New Orleans is better than many feared and much better than the national outlook. RealtyTrac: Louisiana foreclosures jumped 454% from 341 in Q1'06 to 1,890 in Q1'07. That’s an increase of 1,549 foreclosures. Experts explain the hefty increase in Q1'07 by the lengthy 2006 moratorium instituted by the Department of Housing and Urban Development for hurricane victims eligible for grant funds."

More Missing Monthly Mortgage Repayments (Find-a-Property.com, July 9th): "The Council of Mortgage Lenders revealed that by the end of 2006 there were approximately 59,000 mortgages that were three to six months in arrears… MoneyExpert.com revealed that up to 77,000 mortgage repayments are now being missed each month, and with the prospect of further rate rises still on the cards, the situation could easily worsen. Variable-rate and tracker mortgages have inevitably risen as a result of the rate increases, pushing up monthly repayments."

Truly Al-ARM-ing (Barron's, July 9th): "MacroMavens report: An astounding percentage of adjustable-rate mortgages already are underwater… "Based on the share of ARMs in some state of negative equity at the end of last year and the decline in home prices so far in 2007, a stunning $693 billion in mortgage loans are already in the red. Assuming lenders are able to recover 70% of those assets -- which seems optimistic given the massive amount of housing inventory yet to be unwound -- that means mortgage lenders are already grappling with $210b in outright losses… leverage, the total financial exposure to these claims is many multiples of that."
Terror in the Mortgage Pools (Eye on Miami Blog, July 9th): "FDIC: “The amount of foreclosed real estate owned by Florida-based banks and thrifts has nearly tripled since the fall of last year, when foreclosure rates began their upward trek -- to $94 million as of March 31, from $34 million Sept. 30… Miami banking analyst Ken Thomas: Total real estate owned by banks and thrifts rose 37% in Q1, compared to 12% nationally. At a Miami auction on Thursday, of roughly 70 properties offered for sale, investors bought only two. A handful were scratched. The rest were bought back by lawyers for various lenders.”

Speculation Swirls Over CIBC's Subprime Exposure (Financial Post, July 9th): "CIBC: Speculation CIBC exposure to the subprime market of up to $2.6-billion was "simply not true… Our exposure to the subprime market is indirect through our participation in structured credit transactions. The majority of this exposure is rated triple-A. Our direct exposure is well below what the report suggests." BMO Capital Markets analyst Ian de Verteuil: CIBC's "most material" exposure was to a $330-million senior secured tranche of an underwriting that ran into problems in April with the decline in fixed income markets… … We believe the impact of the meltdown in subprime in the U.S. is limited for CIBC."

Monroe Home Foreclosures Through The Roof (Pocono Record, July 8th): "Monroe County Prothonotary's Office: There have been 635 foreclosure cases in 2007, through Thursday — more than for all of 2005 or 2004. If the present pace continues, it will result in 1,246 filings for the year the previous record high of 941 mortgage default filings during 2003 and 925 in 2002. There were 835 foreclosures filed with the Prothonotary's Office in 2006… despite state Attorney General's Office civil suits and criminal investigations, probes by the Monroe County D.A… congressional and state House hearings… and a state foreclosure study that focused solely on Monroe County."

Bagholders in Tears (Mish's Global Economic Trend Analysis, July 6th): "Coral Springs law Blum & Silver, is representing about 25 investors who had invested $20 million with Brookstreet Securities are planning legal action to recover their losses, damages and attorney's fees. The SEC and brokerage regulator NASD are reviewing Brookstreet's financial records and the firm has started shutting down… The seniors invested in securities called collateralized mortgage obligations, … Brookstreet has said the money was lost in part because of too much securities trading on borrowed money… The margin losses mean that investors not only lost their funds, but could owe money that was borrowed to trade in their accounts."

[54anickel]

25. CDOs could be Wall Street's next bogeyman

http://www.washingtonpost.com/wp-dyn/content/article/2007/07/10/AR2007071000720.html

NEW YORK (Reuters) - After escaping a rising tide of subprime defaults earlier this year, leading U.S. investment banks and brokerages face an opaque offshoot of those risky mortgages.

Collateralized debt obligations, or CDOs, are complex bonds that repackage pieces of other loans, including "subprime" mortgages granted to borrowers with weak credit. Analysts say these investments could hurt profits at Merrill Lynch & Co. Inc. <MER.N> and other Wall Street companies.

CDO-related activity could shave about $132 million, or 1.6 percent, off Merrill's 2007 expected net income of $7.85 billion, Bernstein Research analyst Brad Hintz estimated.

Moreover, Standard & Poor's Rating Services on Tuesday slapped a negative view on about $12 billion of rated mortgage securities tied to subprime loans.

The losses on mortgages packaged into securities by leading U.S. investment banks continue to exceed historical precedents and the rating agency's initial expectations, S&P said.

more...

[54anickel]

44. Just reading Mogambo's take on CDOs....Probably was posted last week

but I really love this part....

But this CDO thing being on everyone's lips is not too surprising, as this whole CDO markdown thing is Big Bad News (BBN), although this few-hundred-billion-dollar subprime mortgage stinker is just emblematic of the whole derivatives stinker, a similar convoluted global spider web of a leveraged-to-the-hilt financial mess that is so big (audience shouts out, "How big, Mogambo?") that it is estimated to be in the $450 trillion range, which is roughly nine (pause) times (pause) global (pause) G (pause) D (pause) freaking P!!

Nine times bigger than the sum total of the complete, total annual Gross Domestic Product output of the entire freaking globe!!!

So this CDO meltdown thing is truly (bravely disregarding the risk of repeating myself), B (pause) B (pause) N, without exclamation points, as I am just too drained by it all.

For an example of what I mean, MoneyWeek.com refers us to "Monday view: Credit Crunch will 'Shred Investment Portfolios to Ribbons'" by Ambrose Evans-Pritchard at Telegraph.co.uk.

The "ribbons" thing was from Albert Edward of Dresdner Kleinwort, whose quote was, "This is the big one: all investment portfolios will be shredded to ribbons."

Mr. Evans-Pritchard actually opens his piece with a delightfully apropos description of the stinking, slimy economic mess that the Congress, the Federal Reserve and the Supreme Court have gotten us into by waxing lyrical with, "The near collapse of two Bear Stearns hedge funds has lifted the rock on our 21st century mutant capitalism, exposing the bugs beneath to a rare shock of naked light." Ahhh! Perfectly phrased!

The specifics, stripped of the disgusting-yet-highly-appropriate grubbiness, he relates by saying, "When creditors led by Merrill Lynch forced a fire-sale of assets, they inadvertently revealed that up to $2 trillion of debt linked to the crumbling US sub-prime and 'Alt A' property market was falsely priced on books." Oops! Hahaha!

snip>

As you have probably guessed, he really didn't use those exact words, but I say it was obviously implied when he did say that the reason was, "The ultra-loose policy of the world's central banks over a decade. They 'fixed' the price of money too low in the 1990s, prevented a liquidation purge to clear the dotcom excesses, then kept rates too low again from 2003 to 2006."

Therefore, he says this CDO mess "is a 100pc-proof government-created monster. Bureaucrats (yes, Alan Greenspan) have distorted market signals, leading to the warped behaviour we see all around us."

more....http://www.kitco.com/ind/Daughty/jul062007.html

[Ghost Dog]

58. Thanks for that. I've also been away, this last week or two,

X.

I've been reading Ayn Rand's "Atlas Shrugged". So engrossed I haven't even been purchasing newspapers.

Nearly finished, now. More later...

[54anickel]

45. Mortgage resets: Record bill coming due

http://money.cnn.com/2007/07/09/real_estate/resets_are_coming/index.htm

NEW YORK (CNNMoney.com) -- More than two million subprime adjustable rate mortgages (ARMs) are poised to reset at much higher rates in coming months, worsening an already suffering housing market.

Borrowers who took out hybrid ARMs in 2004 and 2005 to secure low "teaser" rates for the first two or three years of the loan may see their monthly mortgage payments climb by 35 percent or more.

Consumer groups and politicians worry that hundreds of thousands of subprime ARM borrowers will be unable to keep up with their mortgage payments and will lose their homes.

"In October alone more than $50 billion in ARMs will reset," according to Mark Zandi, chief economist and co-founder of Moody's Economy.com. That's a record, according to Zandi.

Foreclosures: Hardest hit zip codes

A buyer in 2005 with poor credit and limited means might have signed on for a $200,000 2/28 hybrid ARM, locking in a fixed rate of 4 percent for two years. After paying $955 a month, his bill would now be set to spike to $1,331, a 39 percent increase.

Until recently, rising home prices bailed out many ARM borrowers in trouble. They could raise cash with cash-out refinancings or home equity lines of credit. If worse came to worse, they could sell the house and get some money back.

But prices have stabilized or slipped in many markets. (Latest home prices.)

more...

[mojavekid]

41. Daily Pfennig 7/11/07: Euro Hits a New Record High...

http://www.kitcocasey.com/displayArticle.php?id=1487

Good day... The dollar slid to a record low against the euro yesterday, with investors continuing to focus on the narrowing interest rate differentials. The euro shot up to $1.3787 yesterday, surpassing the previous record set in December 2004. Other currencies also moved up vs. the dollar as the pound sterling moved above $2.03 and the Chinese let the renminbi continue to climb. Even the Japanese yen got in on the fun and moved below 122 for the first time in a month to trade at 121.55.

Helping to drive the dollar down was Standard & Poor's warning that it may cut ratings on $12 billion of bonds backed by subprime mortgages. S&P is a little slow to the realization of the huge mess the subprime market is in; but better late than never. The possibility of a cut in ratings has thrown cold water on all U.S. dollar-denominated investments, with the exception of Treasuries. Investors sold nongovernment bonds and stocks to move into safe havens, including U.S. Treasuries (yes, even with all the current mess, the U.S. Treasuries are still seen as the safest investment for US$). Many foreign investors simply moved out of the US$ all together, causing the slide in the greenback.

Readers know exactly where Chuck and I stand on the U.S. housing market, and the rest of the investment world finally seems to be realizing just how long and deep the slowdown is going to be. DR Horton, the country's largest homebuilder, forecast its first quarterly loss as a public company, and U.S. home improvement retailer Home Depot lowered its 2007 earnings outlook because of the deteriorating housing market. Homebuilders failed to adjust quickly enough to the slowdown in demand and have a large inventory of new homes that are sitting on the market. Driving home last night, I listened to interviews with two separate economists who predicted we won't see the worst of the housing market downturn until this time next year, and the recovery would take at least 2.5 years.

more...

[54anickel]

54. Pound Hits New High Amid US Fears

http://news.sky.com/skynews/article/0,,30400-13598993,00.html

snip>

Sterling charged to new 26-year highs as the US currency weakened amid further fears over America's economy.

The pound reached its highest level against the dollar since the beginning of April 1981 - at more than $2.03 - following persistent concerns over the high-risk US mortgage market.

Forecasts of a further rise in the UK interest rate to 6% before the end of the year has also given a boost to sterling.

snip>

"While there is not much economic news to drive sterling's strength, it seems to be momentum-driven and we'd expect to see it go even higher against the dollar again."

Sterling broke through the symbolic $2 barrier in April, climbing past the level seen after Black Wednesday in September 1992.

It was at that date when the pound dropped out of the European Exchange Rate Mechanism.

more...

[UpInArms]

2. STMicroelectronics: Chip Maker to Close 3 Plants - cut 4,000

http://www.nytimes.com/2007/07/11/business/worldbusiness/11fobriefs-CHIPMAKERTOC_BRF.html?ex=1341806400&en=67046d53cc69969a&ei=5088&partner=rssnyt&emc=rss

The Swiss chip maker STMicroelectronics said it would close manufacturing plants in Texas, Arizona and Morocco, cutting 4,000 jobs. The company employs more than 50,000 people, its Web site says. The factories in Carrollton, Tex.; Phoenix; and Ain Sebaa, Morocco, are being phased out over two to three years.

that was the entire article - move along folks, no story here :grr:

[ozymandius]

4. Today's Market WrapUp

Finding Good Value in Energy -- Natural Gas
BY FRANK BARBERA, CMT

Over these last few months, it has undoubtedly been a frustrating period of time if you are a ‘value’ investor. Very few markets have been passed over by the long boom in cheap credit, which has spilled excess liquidity into massive pools of capital. In turn, those pools of capital have combed the world over, in an ongoing quest to seek hidden values driven by a seemingly unquenchable thirst for ever greater levels of asset inflation, and ever greater levels of total return.

Amid all of this hedge fund arbitrage, it is possible that some stone has been left unturned by the performance gods of global capitalism? In our view, while it is hard to believe, we do see pockets of “good value” remaining within the Energy Sector. Yes, we know that Oil Shares are still not expensive on a fundamental P/E metric, and in light of the coming age of Peak Oil, in all likelihood, we will all look back one day with fondness on the “low price” of Crude Oil near $73. “Remember the time when Crude Oil cost less per gallon than Milk?” That will probably be a common refrain. Yet, Oil Stocks have had an enormous advance in the last few months, and will undoubtedly not fair that well in a more generalized market decline, that is, IF a decline of substance ever materializes.

-cut-

So where does one find “Value” in Energy at the present time? Our answer: Natural Gas. For a time, we were tempted to title this article: “Got Gas?” But then we thought better of that idea. Hence the more conservative approach shown above. Nevertheless, having Gas could be just the ticket over the next few months if you are in the market for solid investment gains. Mind you, we are not talking about Gas Stocks, No, No, No! We are strictly interested in gas -- the commodity. So why Gas? Well, Gas is cheap. How cheap? Answer: Very cheap, and therein lies the opportunity.

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

I am not absolutely thrilled that Mr. Barbera would advocate a runup in prices on our monthly utility bill. But if gas behaved like oil - this would be the case.

[texpatriot2004]

5. K & R nm

[54anickel]

6. Good Mornin Ozy, UIA and all! Had to check in and ask - wtf is up with gas prices?

They've been climbing like crazy here the past couple of days, 3.09 to 3.29 to 3.49 at a few in the big city.

[UpInArms]

10. hiya 54anickel!

you are a sight for sore eyes!

:grouphug:

Oil is going through the roof again - summer driving time and all that :eyes:

OPEC says that they are no longer "in control" of oil prices :shrug:

[Hugin]

15. Not to mention...

The SCOTUS by doing away with the Sherman Anti-Trust Act provisions against Price Floors opened
the doors for the Oil Cartels to charge whatever they damn well please.

All it takes is for a half a dozen Haves to call each other on the phone to fix the prices.

[UpInArms]

22. Oil eases below $76 ahead of U.S. data

http://www.reuters.com/article/hotStocksNews/idUSKRA93325920070711

LONDON (Reuters) - Oil eased from an 11-month high on Wednesday ahead of U.S. data that will give a snapshot of fuel and crude supplies in the world's top consumer.

London Brent crude, now seen as a better indicator of the global market, was down 52 cents at $75.88 a barrel by 1310 GMT. It hit $76.63 on Tuesday, the highest since August 10.

U.S. crude was down 33 cents at $72.48.

Despite calls from consumer nations for more oil, the Organization of the Petroleum Exporting Countries is showing no sign of easing output restraint.

Top exporter Saudi Arabia has told its major customers and refiners in Asia and Europe that it will not relent on its oil export curbs next month.

...more...

Gasoline was $3.09 in my little backwater this morning - up from $2.89 yesterday :eyes:

[Demeter]

50. $3.39 up from $3.06 This Week in Ann Arbor

What's the excuse this week? Refineries, pipelines, stockpiles, or just the hell of it?


It's the plunging dollar, isn't it? That's the real reason.

[UpInArms]

51. you are way too quick!

here's your prize!

[mojavekid]

35. Hiya 54!

Things have gone all to hell since you been gone!

...Boy somebody's gonna have to clean this up!

-mojavekid

[54anickel]

40. Hi Mojavekid! It does look as though TPTB have lost their grip for a bit.

We'll have to see how well they recover. Interesting that they're talking about bringing back the Treasury debt buyback program.

(From earlier post)

The fiscal improvement has come so quickly that Citigroup's Wiegand suggested in a July 9 report that the Treasury Department may consider restarting a debt buyback program, which was suspended in April 2002 as borrowing needs rose.

The government sells Treasury debt to make up the difference between expenditures and receipts in the annual budget. Treasury borrowing has declined to about $100 billion this year, from a peak of $385 billion in 2004, according to Wiegand.

Buybacks

``The growth in the net supply of Treasuries is slowing and slowing pretty dramatically, to the point where it's possible that the Treasury could consider reinstituting a buyback program,'' Wiegand said. ``There's a growing case to be made, to help manage the debt, that buybacks become a tool of Treasury's debt management.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=a68p9yIpABC8&refer=home

[UpInArms]

7. China's foreign reserves hit $1.33 trillion

http://www.reuters.com/article/businessNews/idUSL1180131120070711

BEIJING (Reuters) - China's foreign exchange reserves, the world's largest, swelled to $1.33 trillion by the end of the first half on the back of massive trade flows that contributed to an acceleration in money supply growth in June.

The central bank said on Wednesday that reserves had grown by $266.3 billion to $1.3326 trillion between January and June, in excess of the $247.3 billion reserves accumulation for the whole of 2006.

Analysts said the jump, which will have intensified upward pressure on the yuan <CNY=CFXS>, was largely in line with expectations given a widening in the country's trade surplus in the first six months.

"The figures are totally in line with expectations because the trade surplus surged very rapidly and we also expected FDI (foreign direct investment) to have been good," said Cheng Manjiang, an economist with Bank of China International in Beijing.

...more...

[UpInArms]

8. Liz Claiborne to cut 800 jobs, eyes option for 16 brands

http://www.reuters.com/article/businessNews/idUSN1129347220070711

NEW YORK (Reuters) - U.S. apparel company Liz Claiborne Inc. (LIZ.N: Quote, Profile, Research) said on Wednesday that it will cut up to 800 jobs and consider its options for 16 apparel brands under a plan to cut costs.

The brands under review, which include Dana Buchman, Ellen Tracy and Laundry, are expected to generate 2007 sales of approximately $800 million, the company said.

Liz Claiborne, suffering from a downturn in department-store sales, made the announcement ahead of an analyst meeting on Wednesday. It also plans to aggressively expand the specialty retail store base of its Juicy Couture, Kate Spade, Lucky Brand Jeans and Mexx brands.

The company expects a net reduction in 2007 of 600 to 800 positions, or 7 percent to 9 percent of its non-retail based global work force, which includes significant staff reductions at the more senior levels of the organization.

...more...

[Buttercup McToots]

11. Interesting read

I have been writing a column a week for Gold Eagle for over six years. I have heard that I get (got?) more hits than any other writer. There are prohibitions. I am not allowed to get into politics, criticize numismatic dealers or the government...for some reason. Below is the regular column I wrote for Gold Eagle on June 27th, and sent it in on the 28th. I wrote and asked if they got the column. The answer was "yes." Later, I asked why the column was not posted, since it didn't abuse the government, numismatic dealers, or politicians. I got no answer. Maybe they don't want my columns any longer, I don't know. If you like them, write to Gold Eagle and ask them why they didn't post my latest one. At any rate, here it is:

Roosevelt's Gold

"Well, suppose they confiscate my gold just like Roosevelt did 75 years ago?" If I have heard that once, I must have heard it a hundred times. Did Roosevelt confiscate everyone's gold back in 1933? If he did, how come there's still a lot of it for sale in a thousand coin shops and numismatic dealers?

Let's start at the beginning and see what really did happen. The first thing we must remember, is that America was in the midst of a severe depression, caused by loose money issued by the Federal Reserve, which they still are doing. There was such an enormous amount of "liquidity" floating around, as today, that everyone was buying stocks on margin of over 90% at times, which is not happening today. The stock market was on everyone's lips and minds. Bootblacks and janitors were buying stocks. Stocks would supposedly go up forever, and there was no risk. Ha Ha. The market crumbled and crashed, leaving everyone out on the well known limb, owing for stocks which often times weren't worth much more than the paper on which they were printed. The result was that in fairly quick order, over 25% of the American work force was on the street selling apples, on the dole, or in bad shape in one way or another. Times were tough, to make it sound kind!

Roosevelt wanted to pull America out of the depression. He thought up all sorts of make-work schemes, and anything to put people back to work. But he didn't have any money. Remember, unlike now, the dollar was BACKED BY GOLD. He therefore needed all the gold he could get, so he could print more dollars to spend in placing more people in those make-work jobs. Everyone knew that gold and dollars were synonymous. Americans were carrying gold coins in their pockets just like they were money, which they were. Small, dime size gold coins were a dollar, and there were $5, $10 (Eagles) and $20 (Double Eagles) coins in general circulation everywhere. Gold was money, dollars were money, and the two were the same. How could FDR get gold, so he could print more dollars to spend, to get us out of the depression?

He also had the farmers on his neck. They wanted higher prices for their crops, and there wasn't any money around to give to them. On March 9th, 1933, FDR declared a "Bank Holiday," with all the banks closed. Bank "runs" had posed another problem for the "New Deal," as Roosevelt called his massive move towards abject socialism. People were closing their savings accounts, and bouncing checks by the millions, just to survive in some cases. Today, we have millions of credit cards maxed out for the same reason. There was no FDIC then, so no savings account was insured. (Today, the FDIC has less than a nickel in its accounts for every $100 worth of insurance). Banks had made huge margin loans on now worthless stocks, and they had no money to pay for savings account closures. FDR said they could close for a "Holiday," so they could get their troops in order. Many didn't, and never re-opened again. My parents lost money in a bank which never re-opened.

Follow the link...
http://www.coloradogold.com/donscolumn.htm

[UpInArms]

18. thanks for the post and the article, BMTs!

:hi:

[jdog]

20. A few harsh examples may be all it takes though.

Seems to me they don't have to prosecute a large number - - just harshly prosecute a chosen few in a high-profile manner. That could make it quite difficult to move your gold if you happen to have it - true?

[54anickel]

14. The same old shortcomings

http://www.prudentbear.com/articles/show/2061

On the face of it, it seemed like a great idea: an insurance policy for investment portfolios. No wonder it was popular with the Wall Street crowd. Unfortunately, it was not until the strategy was put to the test in the fall of 1987 that its many shortcomings came to light. By then, of course, it was too late.

“Portfolio insurance” was first developed more than two decades ago in an attempt to limit the damage caused by significant share-price declines. Previously, fund managers found it hard to adjust quickly to sudden market turbulence, mainly because of practical issues associated with rebalancing large portfolios at a time when technological solutions were limited and communications networks sluggish.

Dreamed up by academics Hayne Leland and Mark Rubinstein -- who were later joined by marketing whiz John O’Brien -- portfolio insurance involved adjusting hedges or cash holdings in discrete steps that were tied to changes in market values, a process known as “dynamic hedging.” The lower prices went, the larger the offset and the smaller the exposure to additional downside risk.

Generally speaking, the Leland O’Brian Rubinstein Associates, Inc. (LOR) approach necessitated selling more and more index futures as prices fell. The goal was to immunize portfolios against the full bore of bearish red ink. In some respects, it was a glossed-up version of the mechanical stop-loss tactics long employed by traders and chartists.

For a while, the strategy worked reasonably well, and it gained widespread acceptance. That was because once threshold levels were hit, portfolio managers would find themselves effectively in cash without the logistical hassles or high transaction costs of the past. By 1987, it was estimated that portfolio insurance covered some $60 billion of equity-related assets.

In the wake of the October crash, however, investors learned a few hard lessons. They suddenly realized, for example, that the strategy assumed trading conditions would remain as liquid as they had been and that there would always be willing buyers at a price. LOR and its clients also reckoned that various structural and statistical relationships would remain intact, even when markets were under stress, which proved to be wide of the mark.

more...

[plasticsundance]

17. Dollar sinks in U.S. subprime, credit quicksand

LONDON - The dollar weakened broadly on Wednesday, striking a record low versus the euro and a 26-year trough against sterling as growing fears surrounding the U.S. subprime mortgage and credit sectors gripped financial markets.

These concerns, heightened on Tuesday after two ratings agencies issued warnings on more than $17 billion of debt linked to risky mortgages, made investors less willing to take on risk.

This helped trigger a sharp selloff in equity markets, a slide in bond yields, a rise in implied FX volatility and some unwinding of carry trades -- where low yielders like the yen are sold for higher return units such as the New Zealand dollar.

The Federal Reserve's broad dollar index on Tuesday showed the greenback's nominal, weighted value at its lowest level in a decade. Against a selection of major currencies, the dollar hit its lowest level ever in the free-floating currency period since the Fed's records began in 1973.


Dollar sinks in U.S. subprime, credit quicksand

[54anickel]

19. In Economics Departments, a Growing Will to Debate Fundamental Assumptions

http://www.nytimes.com/2007/07/11/education/11economics.html?_r=1&ref=business&oref=slogin

For many economists, questioning free-market orthodoxy is akin to expressing a belief in intelligent design at a Darwin convention: Those who doubt the naturally beneficial workings of the market are considered either deluded or crazy.

But in recent months, economists have engaged in an impassioned debate over the way their specialty is taught in universities around the country, and practiced in Washington, questioning the profession’s most cherished ideas about not interfering in the economy.

“There is much too much ideology,” said Alan S. Blinder, a professor at Princeton and a former vice chairman of the Federal Reserve Board. Economics, he added, is “often a triumph of theory over fact.” Mr. Blinder helped kindle the discussion by publicly warning in speeches and articles this year that as many as 30 million to 40 million Americans could lose their jobs to lower-paid workers abroad. Just by raising doubts about the unmitigated benefits of free trade, he made headlines and had colleagues rubbing their eyes in astonishment.

“What I’ve learned is anyone who says anything even obliquely that sounds hostile to free trade is treated as an apostate,” Mr. Blinder said.

And free trade is not the only sacred subject, Mr. Blinder and other like-minded economists say. Most efforts to intervene in the markets — like setting a minimum wage, instituting industrial policy or regulating prices — are viewed askance by mainstream economists, as are analyses that do not rely on mathematical modeling.

That attitude, the critics argue, has seriously harmed the discipline, suppressing original, creative thinking and distorting policy debates. “You lose your ticket as a certified economist if you don’t say any kind of price regulation is bad and free trade is good,” said David Card, an economist at the University of California, Berkeley, who has done groundbreaking research on the effect of the minimum wage.

more...

[UpInArms]

23. OMG! Hang the truth-teller!

Just by raising doubts about the unmitigated benefits of free trade, he made headlines and had colleagues rubbing their eyes in astonishment.

The morans that hang their hats on the "free trade" mantra should be hung. They are deluded and fanatical to the extreme.

[54anickel]

24. Couldn't help but notice they failed to drop Greenspin's name in - Wasn't

he the father of using abstract theories and mathematical modeling in policy setting?

Although the meaning of the term is slippery, Frederic S. Lee, an economist at the University of Missouri-Kansas City who edits the Heterodox Economics Newsletter, says it refers to those who reject the neoclassical model, which Milton Friedman helped create, and which Ronald Reagan championed when he took over the White House.

Mr. Reny and others point out that the increasing popularity in the mainstream of behavioral economics, which looks at people’s complex psychological reactions to events, has offered a fuller picture of how consumers operate in the marketplace. Still, Mr. Lee criticizes neoclassical economics for maintaining that the market, if left alone, would ultimately find a happy balance. He also takes the discipline to task for relying on abstract theories and mathematical modeling instead of observation and sociological analysis.

[UpInArms]

21. PIEHOLE ALERT: Bush to forecast U.S. deficit of $205 billion

http://www.reuters.com/article/bondsNews/idUSN1127930820070711

WASHINGTON, July 11 (Reuters) - The White House will estimate on Wednesday that the U.S. budget deficit for fiscal year 2007 will come in at $205 billion, a drop from last year, U.S. administration officials said.

<snip>

But the new estimate is still slightly higher than private forecasts, which pegged the deficit at around $150 billion.

U.S. officials confirmed the number on condition of anonymity so as not to upstage Bush, who is scheduled to unveil the numbers at 1 p.m. EDT (1700 GMT) on Wednesday.

...a bit more at link...

[54anickel]

27. Bush Budget Aides to Lower '07 Deficit Forecast (Smallest since 02)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYRAf1njMID4&refer=home

snip>

``The deficit is improving faster than almost anybody had anticipated and it's entirely because revenue growth has far exceeded even the most optimistic expectations,'' said Chris Wiegand, a Citigroup Inc. economist in New York, who forecasts a $140 billion deficit in 2007 and a $75 billion gap next year.

Exactly what's driving revenue higher has divided Democrats and Republicans, and the new OMB forecasts come at the beginning of a budget debate that lawmakers and administration officials expect to last for months.

Bush and his fellow Republicans credit some $2 trillion in tax reductions during his 6 1/2 years in office with fueling economic growth that has brought about the revenue windfall, while Democrats argue that the tax cuts had only minimal, if any, impact on growth.

Dissenting View

``The bottom line is the revenue surprise the administration claims is evidence that its tax cuts are boosting the economy is neither a surprise nor evidence of the beneficial effect of tax cuts,'' said James Horney, director of federal fiscal policy at the Center on Budget and Policy Priorities. Horney's Washington- based research organization focuses on the impact of fiscal policy on low- and moderate-income families.

snip>

The fiscal improvement has come so quickly that Citigroup's Wiegand suggested in a July 9 report that the Treasury Department may consider restarting a debt buyback program, which was suspended in April 2002 as borrowing needs rose.

The government sells Treasury debt to make up the difference between expenditures and receipts in the annual budget. Treasury borrowing has declined to about $100 billion this year, from a peak of $385 billion in 2004, according to Wiegand.

Buybacks

``The growth in the net supply of Treasuries is slowing and slowing pretty dramatically, to the point where it's possible that the Treasury could consider reinstituting a buyback program,'' Wiegand said. ``There's a growing case to be made, to help manage the debt, that buybacks become a tool of Treasury's debt management.''

snip>

Numbers Game

The new OMB outlook probably won't be as optimistic as Wall Street economists who track the budget. Most private-sector economists already have slashed their 2007 deficit forecasts and cautioned that OMB has a history of releasing conservative predictions to make the eventual outcomes look like bigger-than- expected improvements.

[hatrack]

43. Did they mention Iraq and Afghanistan being completely off the books?

Nah, I didn't think they would either . . .

[JNelson6563]

26. We are so screwn!!11!

After yesterdays' bloodletting and the on-going bad news on the dollar and more bloodletting apparently going on today....

Seems Wall St. has stopped by the Cluestore and they are running for cover. I hope things don't get as bad as I fear they might.

Thanks for covering everything so thoroughly Marketeers! I see that many DUers check out this thread for info when things get dramatic. You provide an invaluable service to us all.

Julie

[UpInArms]

55. Hey Julie!

What with you and 54anickel here today, it feels like "old home" week!

:grouphug:

Drop by more often!

:hi:

[54anickel]

28. Private equity ready to target miners: report

http://www.reuters.com/article/ousiv/idUSSYD33311920070711

SYDNEY (Reuters) - Private equity corporate raiders who have so far sidestepped the mining sector despite widespread consolidation, could soon reset their sights, global accounting and consulting firm Ernst & Young said on Wednesday.

According to a report from the group's global mining and metals group, traditional barriers to investment in mining by private equity are dropping and even the biggest companies in the sector could be potential targets.

Private equity dealmakers have historically avoided the sector because of its boom-to-bust cycles, specialist requirements and lack of easy exit strategies.

"But increased action in the mining sector indicates that the historical reasons behind the lack of private equity may no longer apply," Ernst & Young said.

Mining companies' balance sheets, flush with cash thanks to soaring prices for industrial metals, fit well with the low cashflow-to-debt ratio favored by private equity, which tends to rely on high leverage.

more...

[54anickel]

29. Little Guy Has Little Recourse

http://www.msnbc.msn.com/id/19649919/site/newsweek/

July 16, 2007 issue - Remember the "ownership society" that the administration swore to promote and protect? Remember the admiration lavished on the so-called shareholding class? You probably thought that meant you, because you invest in the stock market and own mutual funds. You would be wrong.

Even with the corporate frauds of the '90s barely out of the headlines and 21st-century frauds taking over (rampant insider trading; backdated stock options for executives), your government is rolling back some investor-protection rules. It's also urging the courts to side with corporate captains against their trusting shareholders. Key people in Congress, mindful of campaign contributions, stand on the captains' side.

I have three cases in point.

Block the SOX: The Sarbanes-Oxley law, SOX for short, passed in the wake of the WorldCom and Enron accounting frauds....

snip>

Bash the class: When shareholders think they've been had, they bring a class-action suit....

snip>

Free the team: Here's something you probably didn't know. Under a 1994 Supreme Court decision, shareholders cannot sue any corporate advisers—lawyers, accountants, investment banks—that "aid and abet" a fraud. A federal court recently stopped a lawsuit against Merrill Lynch, Deutsche Bank and Barclays, among others, for their alleged role in Enron's collapse.

Next term the court will hear a similar case known as StoneRidge. Details don't matter; here's the gist: Did third parties "merely" aid and abet in a communications company's fraudulent transactions, in which case they go free? Or were they primary players and hence liable? The SEC planned to enter the case on the investors' side, but both the White House and Treasury Secretary Henry Paulson (himself an investment banker) said no.

more...

[54anickel]

32. Congress eyes private equity, hedge fund titans

http://www.reuters.com/article/ousiv/idUSN1037541320070711

WASHINGTON (Reuters) - The new kings of Wall Street -- as the managers of booming private equity and hedge funds have been dubbed in the business press -- will come under unaccustomed scrutiny on Wednesday before the U.S. Congress.

In three separate hearings on Capitol Hill, lawmakers are expected to ask whether these secretive and super-rich financiers pay enough taxes and whether the Bush administration does enough to protect the economy and investors from them.

A handful of bills have been filed in both the Senate and the House of Representatives that would sharply raise tax rates paid by both private equity and hedge fund leaders, many of whom are billionaires but largely unknown to the public.

"People are definitely worried that this represents a chance to raise tax rates .... We'll see how much momentum it gains. But it's a big topic. It's getting a lot of attention," said Chrisanne Corbett, head of the private equity team and a managing director at Big Four accounting firm KPMG.

The Senate Finance Committee will hold a hearing on Wednesday on taxing "carried interest," or the 20 percent cut of profits above targeted returns typically kept by senior partners of private equity and hedge funds on major deals.

more...

[54anickel]

48. Congress Eyes Private Equity Tax Issue

http://www.forbes.com/feeds/ap/2007/07/11/ap3903430.html

Technology industry representatives warned lawmakers on Wednesday that efforts to increase taxes on private equity funds could create a harmful ripple throughout the economy, drying up the capital that spurs innovation.

Congress is debating whether to force private equity groups and hedge funds - and their managers - to pay more taxes, but a wide swath of industries, including venture capitalists, is concerned that the effort could affect all companies set up as limited partnerships.

The issue gained prominence last month as Blackstone Group, one of the biggest private equity firms, went public, enriching its top executives.

Private equity is a juicy target for lawmakers eyeing burgeoning federal budget deficits and seeking new ways to boost tax receipts.

In testimony prepared for a Senate hearing, the National Venture Capital Association said efforts to raise the tax rate for the private equity and hedge fund industries could have unintended negative consequences for similarly structured companies that helped launch Google Inc., Microsoft Corp. and other big technology players.

snip>

Critics of the private equity industry, which has reaped enormous financial rewards in recent years, say that investment partnerships should not be allowed to pay taxes at lower rates than other Wall Street players such as investment banks Goldman Sachs Group Inc. and Merrill Lynch & Co.

more...

I got mine, go getchyerown. :eyes:

[54anickel]

31. A middle-class proposal falters - Democrats split on protections from alternative minimum tax

http://www.chron.com/disp/story.mpl/business/4957983.html

WASHINGTON — House Democrats' promise to permanently protect millions of middle-class families from a tax increase most don't know is coming is faltering before the plan is even unveiled.

Senate Democrats are instead pressing a Band-Aid approach to delay for a year or two the alternative minimum tax, or AMT, from adding an average $2,000 more in taxes to families with incomes between $100,000 and $200,000 a year.

New York Rep. Charles Rangel, chairman of the tax-writing House Ways and Means Committee, would like to rewrite the AMT to firmly prevent it from ensnaring about 20 million additional unsuspecting middle-class taxpayers. He and Rep. Richard Neal, D-Mass., planned to unveil their plan in May, but now are not likely to do so before September, if then.

The plan is a nonstarter in the Senate, where Finance Committee's chairman, Sen. Max Baucus, D-Mont., is up for re-election next year in a state whose voters overwhelmingly favored President Bush in 2004.

Baucus has shown no interest in a Rangel-Neal proposal to pay to protect middle-class voters by imposing a new surcharge on incomes above $500,000 a year — effectively raising the marginal tax rate for that income bracket to 39 percent — where it was in 2000 before Bush took office.

The tax increase on the wealthy would raise an eye-popping $800 billion over 10 years, enough to both fix the AMT and spread smaller benefits to lower income taxpayers.

more...

[54anickel]

34. Mr. Kravis Goes to Washington (Capra Rolls Over)

http://www.nytimes.com/2007/07/11/business/11tax.html?_r=1&ref=business&oref=slogin

WASHINGTON, July 10 — Henry R. Kravis, the billionaire founder of the corporate buyout movement, was working the hallways of Capitol Hill, hoping to kill legislation that would raise his taxes and those of other investment fund executives.

While known to powerful people in Washington through longstanding personal and social ties, Mr. Kravis is an unfamiliar figure in many suites of Congress and typically leaves the glad-handing of lobbying to lesser functionaries.

Meeting two weeks ago with Representative Sander M. Levin, a senior Democrat who is proposing to more than double the amount of tax that Mr. Kravis now pays, the buyout titan mustered his best arguments. He said that firms like Kohlberg Kravis Roberts play a central role in the economy, participants recalled, citing the example of how his firm had produced many jobs in Mr. Levin’s home state when it turned around a troubled electricity company in Michigan. He asserted that the lower tax rate benefited all Americans. And he said that an increase in tax rates would harm American competitiveness abroad.

Mr. Levin and his staff were unswayed. One aide asked Mr. Kravis to explain whether the measure would hurt workers and middle-income families by lowering the returns for pension funds that invest in Kohlberg Kravis funds, two aides at the meeting recalled. They said Mr. Kravis agreed with an answer by a partner that the proposal would not hurt returns, and the meeting ended soon afterward.

(An adviser to Kohlberg Kravis on Tuesday described the meeting slightly differently and said that Mr. Kravis said he believed the legislation could have an adverse effect on pension fund returns.)

On the eve of Congressional hearings, managers of private equity firms and hedge funds, who for years remained aloof to Washington’s concerns about their growing financial power, have been caught flat-footed. Fighting a fierce lobbying battle over one of the most contentious and consequential tax proposals in the last decade, they have quickly assembled a huge lobbying machine, formed alliances with other industries, and quietly worked the hallways of Congress.

more...

[54anickel]

33. Fed Chairman’s Talk Further Dims Hope for a Rate Cut

http://www.nytimes.com/2007/07/11/business/11fed.html?ref=business

The Federal Reserve is not satisfied with the current rate of inflation. And it is apparently not satisfied with the public’s expectations about inflation either.

In a speech yesterday, Ben S. Bernanke, the Fed chairman, said that Americans had less erratic expectations about inflation than they used to but were still likely to let short-term events shape their long-term perceptions about price increases.

snip>

“Although inflation expectations seem much better anchored today than they were a few decades ago, they appear to remain imperfectly anchored,” Mr. Bernanke said in a speech to an economics conference in Cambridge, Mass.

The notion that the public’s expectation about future inflation helps determine prices is an important one for the Fed and Mr. Bernanke. He and other Fed officials have said that to achieve a slower rate of inflation, Americans need to be reassured about the stability of prices in the future.

“Undoubtedly, the state of inflation expectations greatly influences actual inflation and thus the central bank’s ability to achieve price stability,” he said yesterday.

By repeating the message that inflation is still too high, Mr. Bernanke and other Fed officials hope that Americans will not accept the current trend of price increases as the norm. That would help foster lower inflation expectations — and thus lower inflation — in the future.

“There’s a tendency for people to settle into a range of inflation that they expect, and it’s very hard to change their minds about it,” said Ethan Harris, chief United States economist for Lehman Brothers. “If I expect 2 percent inflation, I’ll raise my prices 2 percent a year. It’s like everybody is matching what they think everybody else is doing.”

more...:crazy:

[54anickel]

36. Is HIV a time bomb under the mining industry?

http://www.reuters.com/article/newsOne/idUSL0263192420070710?pageNumber=2&sp=true

LONDON (Reuters) - From Africa to Russia, from Peru to China, mining companies face a problem: the workers who haul up the earth's riches are coming down with AIDS, and it is hampering operations at a time of booming demand for minerals.

"The epidemic is extremely severe, it's worse than any of us admit to, there are a lot of undiagnosed cases that don't get reported," Brian Brink, medical senior vice-president at Anglo American's South Africa operations, told Reuters.

snip>

Miners -- many migrant workers -- risk their lives to make money daily, so unprotected sex seems a minor hazard.

Remote mine sites attract sex workers. In the mining province Yunnan in China, sex workers from Myanmar and Vietnam are a high-risk group likely to spread the disease as illegal migrants fear the threat of deportation if they contact public health services.

"This is the nature of our business, it attracts sex workers, whether we like it or not we cannot wish it away," said Stella Ntimbane, group HIV/AIDS coordinator for Gold Fields in South Africa.

Clients of sex workers are a major bridge of HIV transmission to the general population. In 2005 the ILO estimated that 1.4 million sex workers were forced labor, without access to treatment.

snip>

For instance, Gold Fields gives each miner who takes an HIV/AIDS test a lottery ticket, offering monthly prizes of cell phones, televisions and cash, plus a final sweepstake where one worker wins a new pick-up truck.

If more governments addressed the pandemic it would secure the sustainability of HIV programs, especially when a mine closes and the firm leaves, say South African executives.

"It is certainly one of the biggest concerns for us, again that really points to the importance of a collaborative approach with other partners," said Rob Barbour, medical coordinator in Tanzania for gold producer Barrick Gold.

BHP Billiton -- the world's largest mining company -- said for every dollar it invests in HIV training, education and medical programs the return is four-fold in terms of benefits such as re-training, absenteeism and productivity.

"There is an overwhelming business case,"..... :eyes: Doing the right thing for the wrong reason, but I'll gladly take it!

more...

[mojavekid]

37. Forbes: Metals - Gold steady as dollar continues weaker

http://www.forbes.com/markets/feeds/afx/2007/07/11/afx3903048.html

LONDON (Thomson Financial) - Gold was steady in early afternoon trade, supported by weakness in the US dollar against the major currencies.

Stronger oil prices, an early sign of rising inflation, against which gold is typically seen as a hedge, are also underpinning the precious metal, analysts said.

'The latest gains in gold have been achieved largely on the dollar's ills,' noted Kitco Bullion Dealers analyst Jon Nadler.

At 2.33 pm, spot gold was quoted at 662.90 usd per ounce, up from 662.70 usd seen in late New York trade yesterday.

Earlier the metal rose as high as 665.85 usd, its strongest level in almost five weeks, as the US currency languished at all-time lows against the euro.

The dollar also posted fresh declines against sterling this morning as worries over the health of the US economy resurfaced.

more...

[54anickel]

38. Home Prices Expected to Rebound in 2008 (Heh-heh!)

http://www.forbes.com/feeds/ap/2007/07/11/ap3903162.html

The prices of existing and new homes are expected to bounce back next year after a dreary 2007, a real estate trade group said Wednesday.

The National Association of Realtors also said it expects existing-home sales to rise to nearly 6.4 million in 2008, up from the 2007 estimate of more than 6.1 million. Nearly 6.5 million existing homes were sold in 2006, the association said.

As for new homes, sales are projected at 865,000 in 2007 and 878,000 next year, but the 2008 projection would still be down more than 20 percent compared with the nearly 1.1 million new homes sold in 2006.

More than 1.4 million housing starts, including multifamily units, are forecast this year and in 2008, but that is down from 1.8 million last year.

snip>

"Markets that sharply reduce new construction in 2007 will generally experience respectable price increases in 2008," Lawrence Yun, NAR senior economist, said in a release. "Buyers now have an overwhelming advantage given the wide selection of homes available in many markets. But with profit margins coming under pressure, homebuilders will limit new construction well into 2008."

more...

[onecent]

39. I lurk a lot, and I always look at the Stock Market Watch thread and

have a question. Probably lots of questions.

I don't understand 85% of what I am reading and wish I did because I do have some investments.

Is there a threat of the stock market crashing? I do have a rep at Fidelity but I'm afraid to ask some questions....because I don't want him to know I know very little.

If there is a threat, why would anyone want to invest in the stock market?

Is there a safer place to put money? Such as interest income accounts or savings bonds, or savings accounts or money markets?

See, I told you, I know very little. Please don't make fun of me. I seriously would like to know more but I need to begin with
Stock Market 101.

Thanks...

[UpInArms]

47. hiya onecent!

glad to have you here and you probably know more than you think :)

We here at the SMW do not give advice, but hopefully can direct you to places or people that might be able to do that.

hmmmm.... will the stock market crash? the gazillion dollar question!

we don't know, but what we do know if if something doesn't make sense, it is usually nonsense - so just apply as much "common" sense to any situation and hope for the best.

here is one of my favorite investment links

http://www.karmabanque.com/

maybe some of the other regulars around here will chime in with theirs :D

drop in and "see" us anytime!

:hi:

[onecent]

59. Thanks for your response. I will check that site out.

And I will be back. I like to see what all the knowledgeable people are saying.

[54anickel]

42. 11:34 numbers and yada

Dow 13,559.58 57.88 (0.43%)
Nasdaq 2,645.51 6.35 (0.24%)
S&P 500 1,516.88 6.76 (0.45%)
10-yr Bond 5.0550% 0.0170
30-yr Bond 5.1540% 0.0220
NYSE Volume 928,726,000
Nasdaq Volume 749,207,000

11:00 am : Equities are still on the offensive but are off their recent highs. After being down about 1% near $72/bbl, oil prices spiking almost $1 after the EIA reported an unexpected drawdown in weekly crude supplies has taken some steam out of early recovery efforts. The Energy sector has subsequently clawed its way back into the green as well; but its 0.2% advance has not been enough to act as an offset.

The absence of leadership in the Financial sector continues to be the market's Achilles heel; but fortunately for the bulls, it is the only sector trading lower and its 0.1% pullback pales in comparison to the 2.2% sell-off it endured yesterday. DJ30 +29.83 NASDAQ +3.66 SP500 +3.18 NASDAQ Dec/Adv/Vol 1410/1366/534 mln NYSE Dec/Adv/Vol 1569/1455/364 mln

10:30 am : After approaching their 50-day moving averages, the Dow and S&P 500 have found some support and are hitting fresh morning highs. The SEC's market regulation chief saying that the Bear Stearns (BSC 136.94 -1.02) hedge funds facing severe liquidity issues will be able to "unwind in an orderly fashion" appear to be offering some relief.

Investors are also sifting through some commentary from Fed Governor Warsh. While he has not addressed monetary policy or the economic outlook, he has made some encouraging remarks regarding banks' management of hedge fund exposures. DJ30 +45.31 NASDAQ +4.14 SP500 +4.08 NASDAQ Dec/Adv/Vol 1448/1232/348 mln NYSE Dec/Adv/Vol 1638/1255/224 mln

10:00 am : So much for market bulls trying to recoup losses at the onset of trading as sellers jump back in to try and finish what they started a session earlier. Stocks have spiked lower within the last 15 minutes, pushing the major averages into the red amid reversals in several sectors. Financials (-0.4%) and Energy (-0.5%) were already slightly weak; but further deterioration in both, coupled with Technology, Industrials, Discretionary, and Staples turning negative, has removed some notable leadership.

Materials is the only area exhibiting decent strength as takeover activity continues to provide a bid in this year's second best performing sector (+17.3%). Alcan (AL 86.90 +0.76), which has repeatedly rejected Alcoa's (AA 42.22 +0.56) hostile $29 bln offer, is reportedly begun negotiating a $34 bln friendly offer from Rio Tinto (RTP 320.07 +4.53). Since Materials ranks as the least influential of the 10 S&P 500 sectors, though, its modest 0.4% advance is barely being noticed. DJ30 -25.76 NASDAQ -6.26 SP500 -3.26 NASDAQ Dec/Adv/Vol 1107/1394/168 mln NYSE Dec/Adv/Vol 1459/1251/88 mln

09:40 am : With the S&P 500 still up more than 20% over the last 12 months, it's not surprising to see valuations occasionally come into question, especially amid renewed mortgage concerns and a slowdown in earnings growth. What was shocking yesterday, though, was the fact that a potential downgrade of $12 bln in subprime debt contributed to a 1.4% sell-off on the S&P 500 that erased $193 bln in market capitalization.

For that reason, such an overreaction is prompting a reflexive rebound in equities right out of the gate. Early gains, however, are minimal and hardly suggest that investors no longer believe stocks are overbought at current levels. DJ30 +14.50 NASDAQ +5.25 SP500 +1.79 NASDAQ Vol 88 mln NYSE Vol 26 mln

09:15 am : S&P futures vs fair value: -1.7. Nasdaq futures vs fair value: -4.0.

09:00 am : S&P futures vs fair value: -0.1. Nasdaq futures vs fair value: -3.0. Still shaping up to be a sluggish start for stocks as both S&P 500 and Nasdaq 100 futures continue to languish below fair value. Meanwhile, a pullback in Treasuries suggests that some of the subprime risk premium priced into bonds yesterday is being unwound. Unfortunately, a reversal in the credit market has subsequently tacked five basis points on to the 10-year yield and lifted it back above the psychologically significant 5.00% level.

08:30 am : S&P futures vs fair value: -1.2. Nasdaq futures vs fair value: -3.3. Futures indications continue to claw their way back from earlier lows but still suggest Tuesday's sell-off may carry over into this morning's open. On a positive note, investors are sifting through some M&A news. Last night, Gerdau Ameristeel (GNA) said it agreed to buy Chaparral Steel (CHAP) for $4.22 bln.

However, since that's hardly a blockbuster deal and lingering subprime woes may again remove leadership from the influential Financial sector, buyers are struggling to find any incentive, other than viewing yesterday's sizable pullback as an overreaction, to get back in.

08:00 am : S&P futures vs fair value: -2.8. Nasdaq futures vs fair value: -4.3. After suggesting yesterday's bloodletting was overdone and that stocks would bounce back this morning, about two hours ago, the futures market has since spiked lower and now points to another day of consolidation. As evidenced by another flight-to-quality bid in bonds, subprime concerns returning to the forefront Tuesday continue to give investors an excuse to take some money out of an overbought market.

Yesterday, reports merely suggesting S&P may downgrade $12 bln in subprime mortgage bonds prompted widespread profit taking; but last night, Moody's actually downgraded $5.2 bln of subprime-related debt, and that reality is acting as an overhang.

[54anickel]

46. 1:16 and markets ask Bear who?

Dow 13,559.41 57.71 (0.43%)
Nasdaq 2,647.09 7.93 (0.30%)
S&P 500 1,516.26 6.14 (0.41%)
10-Yr Bond 5.0730% 0.0350
30-yr Bond 5.1740% 0.0420
NYSE Volume 1,477,280,000
Nasdaq Volume 1,104,453,000

1:00 pm : The major averages have pulled back a bit since the last update but hardly enough to make a significant change in the standings. On the Dow, JP Morgan (JPM 48.29 +0.78) leads the way with a 1.6% advance; but a 1.3% gain in Caterpillar (CAT 82.30 +1.08) accounts for nearly nine Dow points versus JP Morgan's 6-point contribution. Other notable Dow winners include AA +1.5%, HON +1.5%, T +0.8%, and VZ +0.9%.

Of the seven Dow components trading lower, Intel (INTC 24.68 -0.29) is the biggest laggard (-1.1%); but some consolidation in the stock is understandable since shares were up more than 5% over the previous six days. DJ30 +46.66 NASDAQ +6.17 SP500 +4.67 NASDAQ Dec/Adv/Vol 1351/1547/1.01 bln NYSE Dec/Adv/Vol 1447/1711/730 mln

12:30 pm : No real change in the proceedings as the afternoon session gets underway and every index is in positive territory. It is worth noting, though, that market gains remain modest at best, especially considering the extend of damage endured a session earlier.

The Dow, S&P 500, and Nasdaq are only up 0.4% on average compared to respective declines of 1.1%, 1.4%, and 1.2% yesterday. Market breadth also offers little conviction on the part of buyers as advancers outpace decliners on both the NYSE and Nasdaq by a much tighter margin than Tuesday's roughly 3-to-1 ratio to the downside. DJ30 +52.77 NASDAQ +8.37 R2K +0.2% SP400 +0.4% SP500 +5.31 NASDAQ Dec/Adv/Vol 1286/1592/934 mln NYSE Dec/Adv/Vol 1338/1792/668 mln

12:00 pm : A day after renewed subprime concerns rattled equities, new evidence suggesting that such troubles can be contained along with some M&A news are helping stocks trade higher across the board midday.

It is also worth noting that, in the wake of yesterday's sizable market sell-off, a short-term bounce isn't overly surprising since such pullbacks can typically whet the appetites of bargain hunters.

A much needed rebound in Financials, the S&P 500's most influential sector, is the biggest reason behind stocks bouncing back this morning. The turnaround began after the SEC's market regulation chief said that the Bear Stearns (BSC 139.64 1.68) hedge funds facing severe liquidity issues will be able to "unwind in an orderly fashion."

Philadelphia Fed President Plosser later said the financial system is well-equipped to handle subprime troubles. Fed Governor Warsh and Treasury undersecretary Steel recently stated that the turmoil in subprime mortgage markets is not causing systemic risks. Such encouraging remarks have given rate-sensitive brokerage and bank stocks even more of a reason to ignore the unwinding of subprime risk in Treasuries that is lifting yields across the curve. The 10-year note yield is up five basis points at 5.07%.

Another day of deal making is also offering some support, reminding investors that liquidity remains prevalent. Gerdau Ameristeel (GNA 14.69 -0.99) agreeing to pay $4.2 bln for Chaparral Steel (CHAP 83.61 +7.92) is the only confirmed deal. However, investors are also embracing reports that Alcan (AL 87.85 +1.71) has begun friendly talks with Rio Tinto (RTP 324.74 +9.20) to fend off rival Alcoa's (AA 42.33 +0.67) hostile $29 bln takeover bid and that Colgate-Palmolive (CL 66.51 +0.74) may be eyeing a purchase of Unilever (UL 34.13 +1.02).

All 10 economic sectors are trading higher, paced by a 1.2% advance in Materials but more notably, a led by a 0.6% rebound in Financials. BTK +0.3% DJ30 +56.42 DJTA +1.4% DJUA +0.3% DOT +0.5% NASDAQ +7.67 NQ100 +0.5% R2K +0.3% SOX -0.3% SP400 +0.5% SP500 +5.83 XOI +0.3% NASDAQ Dec/Adv/Vol 1291/1550/820 mln NYSE Dec/Adv/Vol 1334/1787/576 mln

11:30 am : Finally, a turnaround in the S&P 500's most heavily weighted sector, Financials (+0.5%), is helping to set a more positive tone. After being up 2.6% year to date a month ago, the sector has been in a downtrend ever since and was off more than 3.0% this year as of yesterday's close. A sense that such a sizable swing of more than 5% in one month is overdone has helped clear the way for bargain hunters to jump back into beaten-down areas like brokers (XBD +0.8%) and banks (BKX +0.6%). Bear Stearns (BSC 138.74 +0.78), which was down nearly 2% after confirming it will offload about $450 mln of securities tied to one of its troubled hedge funds, has clawed its way back.

Strangely, the rate-sensitive sector is not getting any help whatsoever from bond yields, which have been heading higher all morning. On a positive note, the pullback in Treasuries does imply that some of the subprime risk premium that has been priced into bonds of late is being unwound. The yield on the 10-year note (-10/32), which fell to 4.98% overnight, is back at 5.06%. Philadelphia Fed President Plosser saying within the last 30 minutes that the financial system is well-equipped to handle subprime troubles has helped ease the worst of fears tied to subprime lending. DJ30 +63.16 NASDAQ +8.86 SP500 +7.36 NASDAQ Dec/Adv/Vol 1323/1501/696 mln NYSE Dec/Adv/Vol 1433/1649/475 mln

[54anickel]

52. 2:56 Whoopsie, now they gotta worry about Sallie Mae

(Edit to add 3:00 blather)

Dow 13,531.13 29.43 (0.22%)
Nasdaq 2,640.58 1.42 (0.05%)
S&P 500 1,511.95 1.83 (0.12%)
10-yr Bond 5.0860% 0.0480
30-yr Bond 5.1900% 0.0580
NYSE Volume 2,289,236,000
Nasdaq Volume 1,482,461,000

3:00 pm : The indices are now on the brink of turning negative as a reversal in the Financial sector, led by downturns in brokers and banks, removes much of the very leadership the bulls were trying to hang their hat during today's recovery.

The influential Tech and Discretionary sectors now trading relatively flat are also contributing to the bulls' uphill battle.DJ30 +28.88 NASDAQ +1.22 SP500 +1.72 NASDAQ Dec/Adv/Vol 1504/1494/1.44 bln NYSE Dec/Adv/Vol 1594/1638/1.06 bln

2:30 pm : Stocks are back in buying mode after taking a breath to evaluate the circumstances should a proposed $25 bln leveraged buyout of Sallie Mae not come to fruition.

The knee-jerk reaction to SLM Corp (SLM 52.16 -5.65) possibly failing to get legislative approval to go private has been short lived. The stock was halted before plunging more than 14% but has since reopened and recouped about 4% of its initial pullback as SLM management plans to proceed towards the closing of the merger transaction as rapidly as possible. Fortunately for market bulls, the Financial sector is still finding enough support from the likes of brokers and banks to stay in positive territory.DJ30 +61.05 NASDAQ +8.88 SP500 +5.88 NASDAQ Dec/Adv/Vol 1496/1477/1.34 bln NYSE Dec/Adv/Vol 1635/1587/978 mln

2:00 pm : Since the last update, equities have extended their reach to the upside Exacerbating the move higher was the ability by the Dow, S&P 500 and Nasdaq to break through key resistance levels of 13570, 1515, and 2648, respectively.

However, reports have surfaced within the last 15 minutes that JP Morgan Chase (JPM 48.36 +0.85) has informed SLM Corp (SLM 50.47 -7.33) that it believes current legislative proposals pending before the U.S. Congress "could result in a failure of the conditions to the closing of the merger." SLM Corp, also known as Sallie Mae, has been halted; and, with M&A activity providing an underlying bid in stocks for so long, the news has taken the wind out of the market's sails for the time being.DJ30 +71.78 NASDAQ +8.34 SP500 +6.51 NASDAQ Dec/Adv/Vol 1378/1578/1.21 bln NYSE Dec/Adv/Vol 1414/1797/874 mln

1:30 pm : Not much has changed since the last update as the major averages settle into a relatively narrow range. From a leadership standpoint, Materials (+1.0%) is still pacing the way among the 10 sectors trading higher, followed by a 0.7% advance in Telecom.

A similar performance in Industrials, though, is having an even bigger impact on today's action since its upwardly revised 11.4% weighting on the S&P 500 is nearly three times larger than the Telecom sector's influence on the broader market. Industrials is getting its biggest boost from continued momentum in Construction & Farming (e.g. CAT +1.4%, CMI +3.2%, DE +1.3%), Electrical Components (EMR +2.1%, ROK +1.0%), and Railroads (e.g. BNI +3.1%, CSX +3.5%, NSC +1.9%, UNP +2.0%). DJ30 +51.68 NASDAQ +6.93 SP500 +5.60 NASDAQ Dec/Adv/Vol 1420/1515/1.12 bln NYSE Dec/Adv/Vol 1507/1665/808 mln

[54anickel]

49. White House says no evidence terrorist attack is nearing (Chertoff's gut not credible)

http://www.earthtimes.org/articles/show/81695.html

Washington - The White House said Wednesday there is "no credible intelligence" suggesting a possible terrorist attack against the United States this summer. "There continues to be no credible intelligence to suggest that there is an imminent threat to the homeland," Tony Fratto, a White House spokesman, said.

Fratto's comments came after Homeland Security Secretary Michael Chertoff said in an interview with the Chicago Tribune that he had a "gut feeling" al-Qaeda was poised to carry out an attack on US soil this summer.

snip>

Fratto said there was no emergency meeting planned at the White House to address terrorism - as reported by the Tribune - beyond a routine meeting Thursday.

:eyes:

[ozymandius]

56. Wow! It looks like I missed quite a bit today.

54anickel, Julie and new faces. Plus there was that little bit about the dollar falling like a ton of lead.

Our fridge went on the blink this morning. Then my Stone Age computer stopped working. Is Mercury retrograde?

With luck I'll be able to post the final numbers and blather without our brick wall catching on fire.

[Ghost Dog]

61. No no. Mercury orbits in the same direction as everybody else,

or so I am led to believe, in this solar system. <ç>.

Just don't eat too much fish, right?

Hi Ozy :hi:

[ozymandius]

57. The finals. Was Greenscam running the Big Board today?

Dow 13,577.87 Up 76.17 (0.56%)
Nasdaq 2,651.79 Up 12.63 (0.48%)
S&P 500 1,518.76 Up 8.64 (0.57%)
30-Yr Bond 5.18% +0.05 (+0.99%)
10-Yr Bond 5.08% +0.04 (+0.83%)
NYSE Volume 2,983,645,000
Nasdaq Volume 1,948,480,000

4:20 pm : After posting their worst performance in three weeks, stocks bounced back Wednesday as investors digested some more deal making and got some relief regarding the very concerns that rattled equities a day earlier.

Fed Governor Warsh and Treasury undersecretary Steel stated the turmoil in subprime is not causing systemic risks. Philadelphia Fed President Plosser said most banks remain in "good shape'' to handle subprime losses. The SEC's market regulation chief, meanwhile, said that Bear Stearns' (BSC 138.10 +0.14) troubled hedge funds should be able to "unwind in an orderly fashion."

Although government officials downplaying any spillover of the subprime fallout helped improve overall sentiment, the remarks more notably sparked a much needed rebound in the S&P 500's most heavily weighted sector -- Financials.

The rate-sensitive sector did not get any help whatsoever from bond yields, which closed at session highs. However, the pullback in Treasuries was due in part to an unwinding of the subprime risk premium that has recently been priced into bonds. The yield on the 10-year note (-15/32), which fell below the psychologically significant 5.00% level (to 4.98%) overnight, climbed to 5.08%.

Of the other nine sectors recovering from the bloodletting that saw all 10 sectors drop 1.5% on average yesterday, Materials paced the way. Takeover activity, which has been a big reason behind the Materials sector turning in this year's second best performance (+18%), reared its head again.

Alcan (AL 89.58 +3.44), which has repeatedly rejected Alcoa's (AA 42.30 +0.64) hostile $29 bln offer, reportedly began negotiating a $34 bln friendly offer from Rio Tinto (RTP 323.11 +7.57). Steel was another sector bright spot after Gerdau Ameristeel (GNA 14.55 -1.14) said it agreed to buy Chaparral Steel (CHAP 83.67 +7.98) for $4.2 bln.

On a related note, Briefing.com recently reiterated our Overweight rating on the Materials sector.

Other deal news included Colgate-Palmolive (CL 66.82 +1.05), which is allegedly eyeing a takeover of Unilever (UL 33.97 +0.86). That speculation kept a bid in Consumer Staples.

SLM Corp (SLM 52.24 -5.56), better known as Sallie Mae, also made M&A headlines; but it did so for all the wrong reasons.

Just before 2:00 ET, reports surfaced that the proposed $25 bln leveraged buyout of Sallie Mae may fail due to pending legislative proposals. The news initially took the wind out of the market's sails, but further analysis of the company-specific ramifications behind an already questionable takeover kept the door open for buyers to step back in.

It is also worth noting that, in the wake of yesterday's sizable market sell-off, a short-term bounce wasn't overly surprising since such pullbacks can typically whet the appetite of bargain hunters, especially for such a beaten-down area like the Financial sector. BTK +0.7% DJ30 +76.17 DJTA +1.7% DJUA +0.5% DOT +0.7% NASDAQ +12.63 NQ100 +0.6% R2K +0.3% SOX -0.2% SP400 +0.5% SP500 +8.64 XOI +0.4% NASDAQ Dec/Adv/Vol 1414/1620/1.97 bln NYSE Dec/Adv/Vol 1569/1696/1.44 bln

[UpInArms]

60. it certainly felt like "Chopper" Ben was

doing the full-tilt printing press boogie ;)