STOCK MARKET WATCH, Monday August 6

[ozymandius]

Source: DU

Monday August 6, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 535 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2404 DAYS
WHERE'S OSAMA BIN-LADEN? 2116 DAYS
DAYS SINCE ENRON COLLAPSE = 2077
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 August 3, 2007

Dow... 13,181.91 -281.42 (-2.09%)
Nasdaq... 2,511.25 -64.73 (-2.51%)
S&P 500... 1,433.06 -39.14 (-2.66%)
Gold future... 684.40 +7.80 (+1.14%)
30-Year Bond 4.87% -0.03 (-0.65%)
10-Yr Bond... 4.70% -0.05 (-1.12%)






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

Going With the Flow?
BY BRIAN PRETTI

You probably saw that the 2Q GDP report came in relatively strong, as was absolutely no surprise at all. Inventories were rebuilt, which is academically added to the GDP calculation. Government spending was also quite strong, especially defense spending. Non-residential real estate construction also added to the strength in the headline number. But what stood out quite strongly is that personal consumption expenditures slowed dramatically, up a whopping 1.3% on an annualized basis. For those who have read our work over the years, you know that one of the primary macro themes is that the US economy is not running on a traditional business cycle, but rather on a credit cycle. These days that thought can, in a sense, be extended to the global economy in that the growth rate in monetary aggregates among the major industrialized countries across the planet has been running double digits.

If indeed this thematic view of life is anywhere near correct, data in the 1Q Fed Flow of Funds statement demands attention and monitoring as we move forward. Getting right to the point, the issue that stood out like a sore thumb in reviewing this material was what sure as heck appears to be change at the margin in terms of the character of household leverage. Who knows, maybe this discussion will be making a big deal out of nothing, but what we are seeing are the very first signs of change in the direction of household leverage acceleration that until now has been consistent and intact for many years, if not decades in a good number of cases.

-cut-

So let’s start with a very brief review of household asset inflation circumstances as perhaps being the genesis responsible for this change at the margin that we are seeing in recent quarterly numbers. As always, the charts tell a big story, so I’ll try my best to keep the commentary short. First, the big overview of asset inflation. What’s done in the chart below is to calculate the percentage of real estate and equity price appreciation responsible for household net worth growth by decade over the last half century plus. As you can see, increasingly gains in real estate and stock prices have accounted for ever greater amounts of total household net worth growth since the 1970’s. And importantly we need to remember that the baby boomers as a group really began to come of age in the late 1970’s/early 1980’s. In essence, what they’ve known in their adult life and have thoroughly enjoyed is household asset class inflation. Of course as a group they drove this very phenomenon in purchasing ever more into residential real estate and common stocks (in IRA’s, etc.). You get the picture.

-cut-

So the big question now becomes, how is this impacting household financial management choices? Let’s get right to what sure appears to be the early anecdotes of what may ultimately become very important change. Change that if it becomes a trend will most definitely influence domestic economic outcomes ahead. Very simplistically, let’s start with the character of household debt. The following chart could not be more basic in character. It’s the year over year change in household debt outstanding. What I’ve done is mark the periods in red of official US recessionary occurrences.

-chart-

The conceptual message seems pretty darn clear. When the rate of change in household debt growth decelerates meaningfully, the US has experienced recession. You don’t need me to tell you that this makes all the sense in the world. We’re a consumption based domestic economy that has been heavily debt financed. When the rate of change in debt slows, so does the economy. Simple enough? And what we see in the current period is a very sharp slowdown in household debt growth as of now. This demands monitoring as we move forward.

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

[ozymandius]

2. no goobermint numbers today n/t

[mojavekid]

26. Bloomberg: Bernanke May Alter Rhetoric, Not Rates After Market Turmoil

http://www.bloomberg.com/apps/news?pid=20601103&sid=aSMmIcFpHz4U&refer=us

Aug. 6 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke may respond to the latest squall in financial markets the same way he did when turbulence hit four months ago: with a change in words rather than policy.

Bernanke and his colleagues may suggest after their meeting tomorrow that the risks to economic growth have increased following the rout in stock and credit markets -- just as they did after their March meeting.

When it comes to their focus on inflation and the outlook for interest rates, their message will likely be steady as she goes.

``This episode of turmoil is not enough to alter Fed policy,'' says Laurence Meyer, a former Fed governor who's now vice chairman of St. Louis-based Macroeconomic Advisers LLC. He sees the Fed holding its target for the federal funds rate at 5- 1/4 percent through the end of 2008.

By changing what it says, and not what it does, the Fed can show it isn't oblivious to the 7 percent plunge in stock indexes since July 19 and the possible impact that could have on the economy. At the same time, the Fed can avoid being seen as losing its anti-inflationary zeal or as standing ready to bail out investors.

more...

[mojavekid]

27. Chi Trib: Farm workforce shrivels

http://www.chicagotribune.com/business/chi-sun_pickers0805aug05,0,7970216.story

FRESNO, Calif. - It is 100-plus degrees and climbing, the sun is blasting through the orchard's thick leafy blanket, and the pickers, their shirts soaked with sweat, want to call it a day.

"Vamanos," they shout to their crew boss, who wants to keep them working beyond their 8 hours. He finally lets them go, but reluctantly.

There are lots more plums to pick because there are fewer pickers here in the nation's fruit basket. Since the crew started a day late and is operating with only a dozen hands instead of the usual 20, heaps of luscious-looking fruit likely will soon rot on their trees.

Recounting similar scenes across the U.S., farmers predict a swelling labor shortage as harvests roll from field to field, from picking raisins in coming days in California to apples in the next few weeks in Washington state and Michigan and New England.

From California to Texas to Michigan to New York, farmers blame the tight labor on tougher U.S. immigration measures that have blocked much of the seasonal surge of workers who come north for the harvests. The growers and their allies say they can no longer wait for the right political moment to resurrect the drive for immigration reform that collapsed this summer in the Senate.

And the growers are now counting on a string of troubled harvests to persuade Congress to come to agriculture's rescue, pointing to Michigan, where farmers say they lost 20 percent of their asparagus crop earlier this year because they didn't have enough workers. Last year Michigan apple growers say they lost up to 15 percent of their crop for the same reason, and they are now anxiously waiting to see if enough farmhands show up for the coming harvest.

more...

[ozymandius]

3. Oil prices decline further in Asia

SINGAPORE - Oil prices fell Monday in Asia, extending a decline prompted at the close of last week by news of a cooling U.S. job market.

Light, sweet crude for September delivery fell $1.10 to $74.38 a barrel in Asian electronic trading on the New York Mercantile Exchange, late afternoon in Singapore.

The contract declined $1.38 to settle at $75.48 a barrel Friday after the U.S. Labor Department reported the U.S. unemployment rate rose to 4.6 percent in July, a six-month high. That suggests the U.S. economy might be slowing and could lower demand for oil and gasoline.

While crude futures set new price records above $78 last week, they ended the week $1.54 a barrel, 2 percent lower.

-cut-

Oil prices tend to peak in the summer, then slide in the fall. Last year, for instance, oil dropped nearly $20 between early August and early October.

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

[ozymandius]

4. Bear Stearns co-president, co-COO quits

NEW YORK - Bear Stearns Cos. said Sunday that co-President and co-Chief Operating Officer Warren Spector has resigned following the meltdown of two hedge funds that invested in risky mortgage-backed securities.

Alan Schwartz, who had been Bear Stearns' other co-president and co-COO, will become the sole president effective immediately, and Samuel Molinaro Jr. will assume the role of chief operating officer in addition to his current duties as chief financial officer, the firm said in a statement Sunday afternoon. Jeffrey Mayer, co-head of the fixed income division, will take Spector's seat on Bear Stearns' executive committee, the firm said.

-cut-

Spector, 49, had spent his entire career at Bear Stearns since joining the firm as a trader in 1983 and had been considered a likely successor to Cayne, 73.

But the collapse of the two hedge funds in the asset management unit that Spector oversaw put him and the firm under pressure. The funds filed for bankruptcy protection Tuesday, two weeks after the company told investors that one with assets of about $638 million was essentially worthless, and another worth about $925 million before taking on losses in March had lost more than 90 percent of its value.

Both funds were squeezed after Bear Stearns made wrong-way bets on the home mortgage market and was caught as loans to risky borrowers began to default. Bonds backed by home loans and other similar investments have lost value amid rising homeowner defaults as the housing market enters its third year of decline.

http://news.yahoo.com/s/ap/20070805/ap_on_bi_ge/bear_stearns

[ozymandius]

5. Asian stocks hit by U.S. economic worries

HONG KONG (Reuters) - Asian stock markets tumbled on Monday with financial shares such as Macquarie Bank hit by global credit jitters, while fresh concerns about the health of the U.S. economy knocked the dollar lower.

-cut-

Data last Friday showing U.S. employers added jobs at the slowest rate in five months and weaker growth in the U.S. service sector all added to concerns about the world's biggest economy, Asia's top export destination.

Bear Stearns further weighed on market sentiment after saying credit markets were in their worst shape in two decades and after ratings agency Standard & Poor's warned mortgage credit problems could hurt the investment bank's profits.

-cut-

By the end of morning trade, Tokyo's Nikkei average had shed 0.9 percent, while other major markets across the region fell between 1 percent and 4 percent.

Investors sold financial issues including Mitsubishi UFJ , Australia's Macquarie Bank and HSBC Holdings as well as exporters such as Canon Inc., Sony, Hyundai Motor and Samsung Electronics.

http://news.yahoo.com/s/nm/20070806/bs_nm/markets_asia_dc

[Buttercup McToots]

6. USD $80.03 @ 7:00 am Was $79.97 @ 5:15 am

:donut:

Good Morning Ozy

[ozymandius]

7. Delphi reaches labor deal with union

DETROIT - Delphi Corp. cleared another hurdle in its efforts to emerge from bankruptcy proceedings when a key union ended a strike threat and tentatively agreed to a four-year contract.

The two sides reached the revised labor agreement about 10 p.m. Sunday, the Communications Workers union said in a news release.

The union's industrial division said its members will hold a ratification vote by mail. The union represents about 2,000 Delphi employees.

-cut-

The company recently secured concessions from the United Auto Workers, its largest union and representative for about 16,000 Delphi employees, to cut labor costs. The Delphi-UAW deal slashes wages for longtime workers from $27 per hour to a range of $14 to $18.50 an hour.

http://news.yahoo.com/s/ap/20070806/ap_on_bi_ge/delphi_bankruptcy

[ozymandius]

8. Wall Street awaits Fed rate decision

NEW YORK - With two weeks of volatility behind it, Wall Street faces the prospect of more turbulence — unless the Federal Reserve comes to the rescue.

Waxing and waning worries about a shrinking availability of credit have sent stocks gyrating, with the Dow Jones industrials swinging by triple digits four straight days last week.

On Friday, the Dow plunged more than 280 points after Bear Stearns Cos.' chief financial officer described the current turmoil in the credit market as being the worst he'd seen in 22 years. On other days, news of mortgage lenders' problems or disappointing housing data provided the impetus to sell.

The Fed's Open Market Committee's regularly scheduled August meeting on Tuesday might be key in whether the markets can settle down or not. The Fed is widely expected to keep the benchmark rate steady at 5.25 percent, as it has done since last summer, so the focus will as usual be on its economic policy statement.

http://news.yahoo.com/s/ap/20070806/ap_on_bi_ge/wall_street_week_ahead

[ozymandius]

9. Stocks point to higher open

NEW YORK (AP) - Stock futures rose Monday, pointing toward an opening rebound after concerns about the credit market sent the Dow Jones industrials down more than 2 percent Friday.

Wall Street was looking for signs of encouragement after last week's fractious trading. In a day devoid of economic news and withi few earnings reports, investors were expected to be cautious, especially with the Federal Reserve's meeting on interest rates scheduled for Tuesday. Policy makers are widely expected to hold the benchmark rate steady at 5.25 percent; as usual, the greater concern is with the Fed's economic assessment statement.

European markets were mostly lower, waiting for the U.S. markets to open. London's FTSE 100 fell 0.80 percent, France's CAC-40 dipped 0.70 percent, while Germany's DAX index rose 0.11 percent.

Overnight, the often volatile Shanghai Composite Index rose 1.5 percent to a record 4628.11. Japan's Nikkei stock average dropped 0.39 percent at the close.

Ahead of Monday's opening, Dow futures expiring in September rose 74, or 0.60 percent, to 13,340.00. Standard & Poor's 500 futures rose 9.80, or 0.68 percent, to 1,452.80. Nasdaq 100 futures gained 11.50, or 0.59 percent, to 1,951.00.

http://money.cnn.com//news/newsfeeds/articles/newstex/AFX-0013-18689431.htm

[ozymandius]

10. Chrysler's Nardelli Hiring Could Raise Concerns At UAW

DETROIT -(Dow Jones)- Former Home Depot Inc. (HD) Chief Bob Nardelli couldn't have come to Detroit at a more fragile time, as the Big Three domestic auto makers are locked in critical labor negotiations with a United Auto Workers union that has made criticizing executive compensation a key rallying cry.

Nardelli, who recently made headlines with a $210 million Home Depot severance package, takes the Chrysler helm just days after private-equity firm Cerberus Capital Management closed its purchase of Chrysler from DaimlerChrysler AG (DCX) . Nardelli has recently become the poster boy for corporate excess thanks to the severance package that drew criticism from investors, lawmakers and unions.

That image promises to not sit well with Detroit's biggest union.

UAW President Ron Gettelfinger was initially against a private-equity takeover, mostly because he believed the firms were full of people who used other people's money to "strip and flip" corporations. The union, however, surprisingly warmed up to Cerberus after being assured former Chrysler Chief Executive Tom LaSorda's so-called Recovery and Transformation Plan turnaround plan was still intact.

Now, harmony between the deep-pocketed investment firm and the 72-year-old labor union may face a challenge. Gettelfinger, in past interviews with the media, has said he supports LaSorda, whose family has deep union ties and who had been paying his own health-care tab in a show of shared sacrifice with the UAW. LaSorda, who will remain president, took over as Chrysler CEO in September 2005, and had a rocky tenure capped by Daimler AG's decision to sell Chrysler in May.

http://money.cnn.com//news/newsfeeds/articles/djf500/200708060705DOWJONESDJONLINE000176_FORTUNE5.htm

[ozymandius]

11. Four Sings of An Emerging Credit Crunch

http://bonddad.blogspot.com/2007/08/four-sings-of-emerging-credit-crunch.html

From CBS Marketwatch:

Early signs of an impending credit crunch are everywhere:

* Mortgage lenders going out of business, and the lenders left standing are closing their subprime and Alt-A origination channels.

* The spread between corporate debt and riskless Treasurys has widened dramatically. Standard & Poor's has said most corporate debt is now speculative grade.

* Credit for leveraged buyouts has dried up, with dozens of deals canceled, postponed or repriced. The market for complex derivatives such as collateralized debt obligations has shut down like a "constipated owl," according to bond fund manager Bill Gross.

* The price of insuring asset-backed securities against default has soared.

[UpInArms]

21. U.S. credit squeeze frays world financial markets

http://www.reuters.com/article/bankingfinancial-SP-A/idUSN0364594520070803?sp=true

NEW YORK (Reuters) - The unraveling U.S. subprime mortgage market is causing other markets to fray around the edges faster than anyone expected.

As the Federal Reserve convenes for its latest meeting on Tuesday, the corporate credit markets are grinding to a halt. About $90 billion of bonds and nearly $250 billion of loans are still awaiting buyers, several high-profile hedge funds from the U.S. East Coast to Australia have failed, and a major U.S. mortgage lender this week closed its doors.

"All these people saying there is no credit crunch and no economic impact - 'Are you kidding me?'", said Jeffrey Gundlach, chief investment officer at TCW Group in Los Angeles, which manages assets worth $160 billion.

"Ask Goldman if there is no credit crunch, ask Bear Stearns if there is no credit crunch, call up American Home Mortgage and ask them if there is no credit crunch. Come on! It is staring you in the face," Gundlach added.

<snip>

"The fallout from the U.S. subprime crisis continues to inflict damage, the ensuing rout in the marketplace has been frightening, and there is growing concern over whether the crisis will widen and threaten the entire U.S. banking system's stability," said Zhao of Bank Credit Analyst.

Indeed, Corporate America has not found demand for any of its paper as bonds and loans have not been able to price, according to Greg Peters, chief U.S. credit strategist at Morgan Stanley.

...more...

[UpInArms]

23. American Home Mortgage files for bankruptcy

http://www.reuters.com/article/bondsNews/idUSN0639518120070806?sp=true

NEW YORK, Aug 6 (Reuters) - American Home Mortgage Investment Corp. (AHM.N: Quote, Profile, Research), a large home lender catering to people considered good credit risks, completed its rapid descent on Monday when it filed for Chapter 11 bankruptcy protection.

The Melville, New York-based real estate investment trust, one of the largest independent U.S. home loan providers, filed for protection from creditors with the U.S. Bankruptcy Court in Delaware.

The filing came after American Home closed most operations on Friday, laying off all but about 750 workers. The company said it had started the year with more than 7,400 employees.

American Home's bankruptcy reflects how worries about loan defaults fueled by slumping U.S. housing prices have spread beyond subprime lenders, which lend to people with weaker credit, to companies that make higher-quality loans.

...more...

[UpInArms]

31. NYSE suspends trading in American Home Mortgage

NYSE suspends trading in American Home Mortgage

NEW YORK (MarketWatch) -- NYSE Regulation Inc. said Monday it suspended trading of American Home Mortgage Investment Corp (AHM 0.44, -0.25, -36.7% ) in the wake of the company's bankruptcy filing.

[UpInArms]

29. Countrywide, broker debt protection costs rise

http://www.reuters.com/article/bondsNews/idUSN0640536020070806

NEW YORK, Aug 6 (Reuters) - The cost to insure the debt of Countrywide Financial Corp. (CFC.N: Quote, Profile, Research), the largest U.S. mortgage lender, and U.S. brokers with exposure to mortgages including Bear Stearns Cos. (BSC.N: Quote, Profile, Research), surged on Monday.

Credit default swaps on Countrywide's home loan unit Countrywide Home Loans, its most actively traded swap, rose by around 100 basis points to 445 basis points, or $445,000 per year for five years to insure $10 million in debt, according to data from CMA DataVision.

Countrywide's debt protection costs have doubled from 210 basis points on Thursday on accelerating concerns about profits as mortgage borrowers struggle with payments.

Countrywide last week posted a 33 percent decline in quarterly profit and slashed its 2007 forecast as more homeowners fell behind on payments. For details, see

Bear Stearns Cos.' credit default swap spreads widened around 40 basis points to 200 basis points.

...more...

[UpInArms]

30. RPT-PREVIEW-Fed to weigh hit of credit crunch, market slide

http://www.reuters.com/article/bondsNews/idUSN0532719020070806?sp=true

WASHINGTON, Aug 5 (Reuters) - U.S. Federal Reserve officials meeting on Tuesday will grapple with how turmoil in financial markets and tighter credit may damage the economy, and could hint at some concern growth could falter.

The Fed is widely expected to hold overnight interest rates steady at 5.25 percent, where they have been for more than a year. The policy-setting Federal Open Market Committee is expected to release a statement outlining its views on the economy at around 2:15 p.m. (1815 GMT) on Tuesday.

Markets will watch keenly for any sign the U.S. central bank, which has persistently identified the risk of inflation as its main concern, is beginning to worry a bit more about the potential for an undesirable weakening in the economy.

The possibility of such a shift rose late on Friday as stocks tumbled sharply in the closing hours of trading after comments by a senior executive at investment bank Bear Stearns that credit conditions were the worst in two decades.

...more...

[Hugin]

33. Could the focus on the Little Guys be a red herring?

If one were to add up all of the sub-prime mortgages that are all the buzz do they even come
close to all of the fake moolah (credit) used as the financial engines in all of these highly leveraged
mega mergers going on up at the Big Boys House these days?

As everyone keeps saying... Follow the money, and I for one am beginning to doubt the bulk of it stops at
the average sub-prime borrower's door.

[roamer65]

37. "Riskless Treasuries"???...LOL.

Anything primarily denominated in USD is at risk.

[UpInArms]

12. dollar watch

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

Last trade 80.182 Change +0.086 (+0.11%)

Settle Time 15:00 Open 80.111

Previous Close 80.096 High 80.320

Low 79.958 2007-08-06 06:49:06, 30 min delay

52wk High 87.3 52wk High Date 2006-10-13

52wk Low 80.016 52wk Low Date 2007-07-24

Contract High 0.7 Contract High Date 2007-03-12

Contract Low 0.05 Contract Low Date 2007-06-07

Open Time 19:00 Close Time 15:00

Dollar Drops as Labor Slumps

http://www.dailyfx.com/story/topheadline/Dollar_Drops_as_Labor_Slumps_1186377793319.html

For the first time since February, Non-Farm payrolls printed below 100K raising the specter of a serious slowdown in the US economy that may force the Fed to consider lowering rates before the end of the year. Certainly on the surface the news appears to be rather bleak as the unemployment rate picked up as well and the month’s prior numbers was revised downward. The only bright spot in the report came from manufacturing which contracted only -2K jobs versus forecasts of -18K. It appears as through manufacturing is the sole beneficiary of the lower dollar, yet even in that sector the ISM survey printed worse than expected coming in at 53.8 versus 55.0 projected.

Overall US data was decidedly dollar bearish with Consumer Confidence the only unambiguous positive report for the week. Yet the readings were taken before news of further turmoil in the housing sector and the dour jobs data, so it remains to be seen if the US consumer will hold up. Given the preponderance of evidence so far, it seems unlikely at best. Next week the only event of note is the FOMC meeting. While few analysts expect the Fed to cut rates - indeed a cut next Tuesday would border almost on desperation likely sending markets into turmoil – any change in the language by Dr. Bernanke and company that acknowledges the growing problem in the credit markets be viewed as precursor to a rate cut and could cause further dollar selling.

The one bullish argument for the dollar comes in the form of a back handed compliment. Some analysts argue that the credit crunch and the unwind of positions will create a bid for the dollar as all capital becomes parked in short term Treasuries. Thus, contrary to the popular view that growth differentials will hurt the greenback this thesis basically says the buck rises on safe haven flows.
While the safe haven idea is plausible it likely to have only have only temporary effect on trade. If US economy truly slows and rates start to fall the dollar will weaken irrespective of the safe haven bid. -BS



...more...

Will Weak Payrolls and ISM this Force the Fed to Drop their Inflation Bias Next Week?

http://www.dailyfx.com/story/bio1/Will_Weak_Payrolls_and_ISM_1186174971394.html

Bad news begets bad news which begets even more bad news. This is why both the US dollar and the Dow are lower in Friday trading. This morning, we had much weaker than expected non-farm payrolls. Despite a sharp rise in consumer confidence and a drop in average weekly jobless claims, US corporations only added 92k jobs onto their payrolls, which was the weakest level since February 2007 and the third weakest in 2 years. This brought the unemployment rate up to 4.6 percent, the highest since September 2006 (for more details see our NFP Instant Insight). The divergence between jobless claims and non-farm payrolls indicates that even though companies are not firing, they are also not hiring. With hedge funds and mortgage lenders blowing up left and right, August could be ugly for the labor market. American Home Financial announced that they will be cutting their staff from 7000 to 750, which is a loss of 6250 jobs. We are sure that they are not the only ones to be downsizing. In addition to American Home Financial’s announcement and the bad non-farm payrolls number, Standard and Poor’s also cut its outlook on Bear Stearns to negative while Wells Fargo raised its mortgage rates on 30 year jumbo loans from 6 7/8 percent to 8 percent. The last piece of US data released today was service sector ISM which dropped from 60.7 to 55.8. The fall in bond yields yesterday was an accurate sign that we have yet to see the worst. Will there be respite next week? Possibly - the economic calendar is very light and the only piece of US data with any market moving potential is the Federal Reserve’s monetary policy decision. Rates are expected to be left unchanged, but as usual, the market will be focusing on the accompanying statement. Will the recent movements in the stock market and endless troubles in the US economy force the central bank to drop their hawkish inflation bias? The potential exists, but based upon the latest Fed rhetoric, they are not ready to do so.

...more...

[UpInArms]

13. Dollar falls to four-month low against yen

http://news.yahoo.com/s/afp/20070806/bs_afp/forexeurope

LONDON (AFP) - The dollar dropped to a four-month low point against the yen and slid against the euro on Monday amid increasing concerns about the US economy, dealers said.

In early European trade, the single currency climbed to 1.3827 dollars, from 1.3775 dollars in New York late on Friday.

During Asian trade Monday the euro struck 1.3839 dollars, not far from its all-time high of 1.3852 dollars which was reached on July 24.

In early Tokyo trade, the dollar fell to 117.18 yen -- a four-month low.

"The drop in the dollar/yen rate below the 118.00 level in response to the sell-off in US equity markets on Friday has resulted in a fresh spike in foreign exchange volatility," said Derek Halpenny, senior currency economist at The Bank of Tokyo-Mitsubishi in London.

The dollar remains on the backfoot as heavy losses on Wall Street Friday prompted players to buy back the yen as they reduce risky positions funded with cheap Japanese credit, dealers said.

...more...

[UpInArms]

17. Dollar slides broadly as credit mkt jitters weigh

http://www.reuters.com/article/hotStocksNews/idUSL0688826920070806?sp=true

LONDON (Reuters) - The dollar weakened across the board on Monday, hitting a 15-year low against a basket of currencies as investors speculated rising credit market risk and softening U.S. data could force a cut in U.S. interest rates.

The dollar index (.DXY: Quote, Profile, Research) fell below the psychologically key 80.0 level, while the euro rose to within sight of its record high above $1.3850 struck two weeks ago.

The deepening malaise in global credit markets sent U.S. stocks tumbling on Friday, a move encouraged by a weaker-than-expected U.S. July employment report.

The spillover continued into the weekend with the resignation of the president of Bear Stearns which had said on Friday fixed income markets were going through their roughest patch in over 20 years.

<snip>

But fed funds futures are now pricing in around a 40 percent chance of the Fed cutting rates by 50 basis points before the end of the year. A month ago, the Fed was seen on hold for the rest of the year.

...more...

[mojavekid]

36. Daily Pfenning

http://www.dailypfennig.com/

Proving that even a blind squirrel can find an acorn... I thought that the Jobs Jamboree would be disappointing and cause the dollar to be taken to the woodshed on Friday... And that's exactly what happened!

The euro saw a lot of pent of frustration trading take place, and vaulted to a healthy 1.38 and change... In the Asian market Sunday night, I'm seeing profit taking, although right now the euro is remaining above 1.38.

The yen has reached a 4 month high VS the dollar... So it's not all about the euro!

The BIG NEWS this week is the Fed's FOMC meeting tomorrow... I don't expect any rate moves... And I don't expect Big Ben Bernanke to alter his somewhat hawkish stance... And his claim that the economy will weather the mortgage meltdown storm, and growth will remain what he calls "moderate"...

There are more credit issues every day with regards to the mortgage meltdown / sub prime mess... And these are playing dangerous games with stocks... And the dollar!"

Chuck called it right Friday, and the disappointing jobs data let the dollar index slide all the way to 80. This morning, in European trading, the dollar index moved down to 79.96 before moving back up to trade just above 80 this morning. Without any data due out today, the markets will be waiting on the FOMC announcement tomorrow. No rate change is expected, but it will be interesting to see how Bernanke handles the latest squall in financial markets. Four months ago, when we had a miniature version of what has occurred here the past two weeks, Bernanke and his colleagues made slight changes to the wording of their rate announcement. But rhetoric won't rescue the US$ this time, and unless he makes a suggestion that they are getting very worried about the subprime mess, look for the dollar to continue to slide.

I was at a party this weekend, and struck up a conversation with a local money manager who I've known for a number of years. He is convinced the Fed will be 'rescuing' the markets with a cut in rates either tomorrow or at the next FOMC meeting. When I disagreed and gave inflation as my reason, he countered with 'what inflation?'. I brought up the obvious answers of food and energy, to which he pointed out 'food makes up just 12% of GDP, and energy prices are falling again'. I then brought up the growth of M3, to which he said 'nobody looks at M3 anymore, it’s the core inflation data which drives the markets.'

more...

[UpInArms]

14. Being Unhealthy Could Cost You -- Money

http://news.yahoo.com/s/bw/20070803/bs_bw/aug2007db2007081804238

For employees at Clarian Health, feeling the burn of trying to lose weight will take on new meaning.

In late June, the Indianapolis-based hospital system announced that starting in 2009, it will fine employees $10 per paycheck if their body mass index (BMI, a ratio of height to weight that measures body fat) is over 30. If their cholesterol, blood pressure, and glucose levels are too high, they'll be charged $5 for each standard they don't meet. Ditto if they smoke: Starting next year, they'll be charged another $5 in each check.

Clarian has been making headlines for its aggressive and unusual approach to covering escalating health-care costs. Rather than taking the more common step of giving employees incentives for merely participating in its wellness programs, such as joining a smoking cessation group or using a health coach, Clarian is actually measuring outcomes. And unlike most employers, it is penalizing workers for poor health instead of rewarding them for taking healthy steps.

"More Transparent"

But some employment lawyers and wellness program administrators believe Clarian's approach may not be so unusual in coming years. They see employers, already overwhelmed by rising health-care costs, getting more aggressive in mandating changes in employee behavior. Garry Mathiason, a senior partner at employment law firm Littler Mendelson, says more than 300 companies have requested its assistance on mandatory wellness initiatives since it released a study on the topic in April. "In reality, you only get a certain amount of participation with incentive and encouragement," he says. "The demand for (curtailing health-care costs) is so great that (employers) are willing to take the next step. It's tough love." As BusinessWeek chronicled in February, some outlier companies have even banned tobacco use for its employees altogether (see BusinessWeek.com, 2/26/07, "Get Healthy -- or Else").

...more...

I would like to see healthier food on the shelves - no more high fructose corn syrup - i.e. karo syrup in everything!

[ozymandius]

15. Good morning everyone.

:donut: :donut: :donut:

It was by some hair-thin chance that I posted the thread today. Chez Ozymandius has moved about 1/2 mile south of its former location. ("But didn't you just move?" - you may ask. Yes I did. Reasons why are a long and sore story. I'll spare you the details of heavy construction being done in a building where no one had any business living in the first place.)

So AT&T lost the dsl service transfer order. The new place has a bird's nest of wires sprouting from the from the phone jack (previous tenants botched installation of a security system). So I had to splice wires into the bird's nest. Next was a broken crossover connection at the street, resulting in no internet service anywhere I might have plugged in.

To close this tale: It all came together about fourteen hours ago. The broken connection at the street was repaired. AT&T expedited my service order. I apparently navigated the M.C. Escher phone jack successfully.

One observation: I think AT&T has assumed too much under its umbrella by re-inflating itself. Wishful thinking says that this is a temporary, yet painful, adjustment to AT&T's new bloat. This new company has extra crew available on the weekend - indicating to me that bad PR from poor customer service is high on somebody's mind.

I'm heading away from the computer for awhile. I get the feeling that today's trading will dither and crawl as investors await the FOMC report due Tuesday. Vultures will undoubtedly feast on some carcasses from Friday's massacre.

Have fun!

Ozy :hi:

[UpInArms]

19. g'morning Ozy!

Well, I for one am glad that you're here this a.m. :)

Hopefully, you can get out of connectivity hell. I have to contact my ISP this morning, as my dial-up says that it doesn't recognize my username on my regular connection. Thankfully, I have another number that connects without a problem. Go figure :shrug:

:hi:

[Roland99]

24. I commerisate with ya. I'm still looking at another week before I can fully move in.

Left my apt. on July 1 and still waiting to be able to setup my furniture in the new place...


so close but yet so far...

[NC_Nurse]

28. We just moved too.

Time Warner is right behind AT&T for the worst customer service EVAH! award.
We are connected at the moment, but I've had it die a couple of times already. Sigh.

We have downsized and rented out our big house. It will probably go on the market in the spring. We are
renting for now. I'm not sure WHAT to do with the current economic situation, it's crazy scary.

Good to see everyone's still here getting all the best info for me! Y'all are so great! Thanks.
:hi:

[UpInArms]

16. Mortgage stress to spur more stock volatility

http://www.reuters.com/article/businessNews/idUSN0135773520070805?feedType=RSS&sp=true

NEW YORK (Reuters) - More signs of weakness in the mortgage market, another surge in oil prices and a Federal Reserve rate decision could create more turbulence for Wall Street this week.

Widening fallout from the U.S. housing slump has rattled credit markets, putting investors on edge about the outlook for corporate takeovers and share buybacks -- two catalysts of the market's recent rally to record highs.

On Friday, Standard & Poor's cut its ratings outlook on the debt of investment bank Bear Stearns Cos.(BSC.N: Quote, Profile, Research), fanning concern that troubles in the subprime mortgage market are spreading, which could threaten the economy's health.

The rating agency's move came as American Home Mortgage Investment Corp. (AHM.N: Quote, Profile, Research), a subprime mortgage lender, announced plans to close most of its operations, joining a growing list of casualties hit by the stalled housing market.

"The market is really struggling with defining the size of the subprime problem. The market does not like uncertainty," said Jim Fehrenbach, head of Nasdaq trading at Piper Jaffray, in Minneapolis.

...more...

[UpInArms]

18. Suspicious U.S. share trades up fourfold in past 5 yrs: report

http://www.reuters.com/article/ousiv/idUSL0612637720070806

LONDON (Reuters) - Suspicious share market trading before news of large U.S. mergers and acquisitions has risen fourfold in the past five years, the Financial Times said on Monday, citing analysis it had commissioned.

Almost 60 percent of 27 big deals so far this year in North America were preceded by unexplained spikes in trading in the stock of the target company, the study by Toronto research firm Measuredmarkets showed.

...a bit more...

[Demeter]

39. Well, That Explains Today's Market

[Hugin]

40. Hmm, very interesting UIA...

Thanks for the blurb.

[UpInArms]

20. "Fake Steve Jobs" blogger exposed as Forbes editor

http://www.reuters.com/article/newsOne/idUKN0224453820070806?sp=true

SAN FRANCISCO (Reuters) - A blogger calling himself "Fake Steve Jobs," whose parody of the Apple Inc. (AAPL.O: Quote, Profile, Research) chief executive amused and enthralled Silicon Valley, revealed himself on Sunday as an editor of Forbes business magazine.

Dan Lyons, a senior editor at Forbes, admitted to writing as Fake Steve after a New York Times reporter found resemblances between the blog and Lyons' published work and asked him whether he was behind the long-running satire.

Lyons told the Times he had started the fake blog last year to poke fun at the lack of candidness he saw in the growing number of CEO blogs that were attracting media attention.

Forbes.com confirmed the Times' account and posted an audio interview with Lyons, who lives near Boston and who had managed to evade media sleuths for more than a year.

...more...

and being a fake makes him "candid" how?

[UpInArms]

22. (Fallon, Nev) Dairies dump milk on radiation threat (polonium-210)

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

FALLON, Nev. - Two dairy farms have dumped milk after the discovery of a naturally occurring radioactive isotope in 25 nearby drinking water wells.

Officials from Sorensen's Dairy and Oasis Dairy said they will stop selling milk until it is tested for the isotope, polonium-210, by the Food and Drug Administration. Officials said there's no known health risk at this time.

A study released Friday by the U.S. Geological Survey found the radioactive isotope in 24 private wells and one public well around Fallon, about 60 miles east of Reno. Polonium-210 is known to cause cancer in humans.

All dairies around Fallon sell their milk to the Dairy Farmers of America cooperative, which in turn markets the milk to a dairy in Reno and plants in northern California.

Fallon farmer Bret Sorensen said he began dumping 6,000 gallons of milk Friday morning at the cooperative's request.

...more...

[UpInArms]

25. 9:38 EST and it's all good!

Dow 13,243.44 61.53 (0.47%)
Nasdaq 2,521.90 10.65 (0.42%)
S&P 500 1,441.31 8.25 (0.58%)
10-Yr Bond 4.696% 0.004

NYSE Volume 126,454,000
Nasdaq Volume 85,286,000

09:00 am : S&P futures vs fair value: +8.5. Nasdaq futures vs fair value: +12.5. The stage remains set for stocks to bounce back following Friday's sizable downturn. Modest weakening in the futures market, however, diminishes what was shaping up to be a much more convincing rebound about two hours ago.

Aside from some expected short covering and potentially renewed leadership in beaten-down areas like Financials, investors may also be hoping that tomorrow's Fed policy statement reflects concern about credit conditions and provides assurances that policy makers will act to prevent serious disruptions.

08:30 am : S&P futures vs fair value: +9.0. Nasdaq futures vs fair value: +14.5. The futures market is off its best levels but still trades above fair value to suggest a healthy rebound in equities. With the heavily weighted Financial sector now down 12.7% year to date, 12.4% of which has occurred over the last three weeks, some encouraging developments in the space implies it may provide a floor of notable support.

Merrill Lynch (MER) is up 2.0% in pre-market action after being upgraded to Buy at UBS while Bear Stearns (BSC) is also catching an early bid after co-president and C.O.O. Warren Spector resigned.

[Roland99]

34. 12:37pm - Even better at lunch!!

Dow 13,279.05 +97.14
Nasdaq 2,517.52 +6.27
S&P 500 1,444.53 +11.47
10 YR 4.70% 0.00
Oil $73.15 $-2.33
Gold $680.50 $-3.90


BTW, I've noticed 30-year fixed rate mortgages have dropped from 6.33% to 6.23% over the last week and a half or so.

[antigop]

32. Business Week: The U.S.'s Hidden Asset: Global Capitalism

http://www.businessweek.com/careers/content/aug2007/ca2007085_158545.htm

Our bid to spread democracy has had mixed results. What other countries really want is capitalism—and there, the U.S. is the undisputed leader

by Bill George

>>
For the past seven years our political leaders have been trumpeting the spread of U.S.-style democracy, with decidedly mixed results. Developing countries aren't eager for the U.S. to impose its form of democracy on their fledgling—and often fragile—governments. In fact, many of them resent our government's attempt to tell them how to run their countries, especially when threats of "regime change" are not so subtly mentioned. It is U.S.-style capitalism, not democracy, that is spreading like wildfire around the globe.

Every government leader and business executive I have met in developing countries—from the mayor of Beijing to the ruler of the United Arab Emirates—is eager for one thing: U.S.-style capitalism to build their economies, create jobs and wealth for their people, and bring their countries fully into the global trading network. From Kazakhstan to Vietnam, people are hungry for capitalism. They want to study it in the U.S., learn how to create local capital markets, acquire our technology and know-how, and build companies that can export their goods around the world, especially to the U.S. But most of all they want our hidden asset: leadership of global capitalism.
>>

My apologies if this article has already been posted on one of the stock market threads.

[mojavekid]

35. WSJ Online: The Secrets of the World's Richest Man

http://online.wsj.com/article/SB118615255900587380.html?mod=home_we_banner_left

Carlos Slim is Mexico's Mr. Monopoly.

It's hard to spend a day in Mexico and not put money in his pocket. The 67-year-old tycoon controls more than 200 companies -- he says he's "lost count" -- in telecommunications, cigarettes, construction, mining, bicycles, soft-drinks, airlines, hotels, railways, banking and printing. In all, his companies account for more than a third of the total value of Mexico's leading stock market index, while his fortune represents 7% of the country's annual economic output. (At his height, John D. Rockefeller's wealth was equal to 2.5% of U.S. gross domestic product.)

As one Mexico City eatery jokes on its menu: "This restaurant is the only place in Mexico not owned by Carlos Slim."

Mr. Slim's fortune has grown faster than any in the world during the past two years, rising by more than $20 billion to about $60 billion currently. While the market value of his stake in publicly traded companies could decline at any time, at the moment he is probably wealthier than Bill Gates, whom Forbes magazine estimated at $56 billion last March. This would mark the first time that a person from the developing world held the top spot since Forbes started tracking the wealthy outside the U.S. in the 1990s.

"It's not a competition," Mr. Slim said in a recent interview, fiddling with an unlit Cuban cigar in a second-story office decorated with 19th century Mexican landscape paintings. A relatively modest man who wears ties from his own stores, the mogul says he doesn't feel any richer just because he is wealthier on paper.

How did a Mexican son of Lebanese immigrants rise to such heights? By putting together monopolies, much like John D. Rockefeller did when he developed a stranglehold on refining oil in the industrial era. In the post-industrial world, Mr. Slim has a stranglehold on Mexico's telephones. His Teléfonos de México SAB and its cellphone affiliate Telcel have 92% of all fixed-lines and 73% of all cellphones. As Mr. Rockefeller did before him, Mr. Slim has accumulated so much power that he is considered untouchable in his native land, a force as great as the state itself.

more...

[RUMMYisFROSTED]

38. Worth as much as 50 million Mexicans.

:cry:

[UpInArms]

41. Rah-Rah Closing numbers and blather

Dow 13,468.78 286.87 (2.18%)
Nasdaq 2,547.33 36.08 (1.44%)
S&P 500 1,467.67 34.61 (2.42%)
10-Yr Bond 4.731% 0.031

NYSE Volume 773,437,000
Nasdaq Volume 2,833,736,000

4:20 pm : After tumbling 2.4% on average last Friday, the Dow, S&P 500, and Nasdaq bounced back in impressive fashion Monday as the belief that stocks are oversold on a short-term basis sparked a wave of bargain-hunting interest.

The Dow turned in its biggest point gain since October 2002, but the S&P 500 was the best performing major average as all 10 sectors finished noticeably higher. Advancers outpaced decliners on the NYSE by a mere 17-to-15 margin, however, while declining issues only outpaced advancing issues on the Nasdaq by a small margin.

With the very influential Financial sector down 12.7% year to date heading into today's action, 12.4% of which occurred over the prior three weeks, some encouraging developments in the space fueled a short-covering rally throughout the group. The S&P 500's most heavily weighted sector more than recouped all of the 3.9% it lost on Friday by soaring to the tune of 4.7%.

An analyst upgrade on Merrill Lynch (MER 74.50 +4.45) at UBS, which said the fallout from the mortgage and credit businesses is mostly discounted in MER's valuation, was the driving catalyst. Morgan Stanley saying insurance stocks are down unjustifiably and Wells Fargo (WFC 34.72 +1.91) approving a 50 mln share buyback intraday also helped restore confidence throughout the battered sector.

A day after recording its worst one-day decline (-3.2%) since October 2002, the KBW Bank Index (+5.4%) turned in its best performance in nearly five years. Regional Banks (+5.8%) and Diversified Banks (+5.8%) ranked No. 2 and No. 3 in terms of today's best performers.

Thrifts & Mortgage (+7.7%), one of this year's 10 worst performing S&P industry groups (-15.5%), was today's biggest winner. Talk that regulatory restrictions may be lifted lit a fire under the likes of Fannie Mae (FNM 62.41 +5.78) and Freddie Mac (FRE 59.99 +4.29).

Bear Stearns (BSC 112.95 +4.60) spiking into positive territory about an hour before the close, following upbeat analyst commentary, helped exacerbate the rebound in brokerage stocks. An S&P analyst said the market overreacted to Bear Stearns' outlook, that BSC's liquidity remains "solid", and that liquidity at the Big 5 brokers remains sound.

Crude oil prices closing near session lows and plunging 4.5% to $72.06/bbl, coupled with the Energy sector's ability to completely shrug off oil's downturn and analyst downgrades on several sector components, provided additional relief.

As a reminder, all eyes tomorrow will be on the FOMC meeting, which will conclude at 14:15 ET. The Fed is widely expected to leave the fed funds rate unchanged at 5.25% again, but what isn't a foregone conclusion is what the accompanying policy directive will imply about future rate decisions.

As reflected in today's relief rally, many on Wall Street are apparently hoping the accompanying directive reflects concern about credit conditions and provides assurances that policy makers will act to prevent serious disruptions. DJ30 +286.87 NASDAQ +36.08 SP500 +34.61 NASDAQ Dec/Adv/Vol 1614/1450/2.61 bln NYSE Dec/Adv/Vol 1558/1779/2.04 bln

3:30 pm : The indices continue to climb going into the close as buying remains widespread across most areas. The Financial sector has now recouped all of the 3.9% it surrendered on Friday while the Utilities sector has more than matched its 2.6% year-to-date gain. Energy (-0.3%) continues to be the market's only big blemish; but it's resilience in the face of a 4.5% sell-off in crude and a multitude of downgrades within the sector is commendable.

About the only thing not playing into the bulls' favor is the fact that market breadth is only modestly positive. Advancers on the NYSE only hold a 17-to-15 advantage over decliners while decliners actually outpace advancers on the Nasdaq by a 16-to-13 margin. DJ30 +198.55 NASDAQ +25.43 SP500 +25.28 NASDAQ Dec/Adv/Vol 1661/1391/2.23 bln NYSE Dec/Adv/Vol 1727/1591/1.75 bln

3:00 pm : Onward and upward remains the driving mantra this afternoon. After being down almost 8% earlier at a two-year low, Bear Stearns (BSC 109.59 +1.24) spiking into positive territory following upbeat analyst commentary is providing another leg of support. The battered Financial sector has tacked on another 1.0% advance within the last 30 minutes. The AMEX Securities Broker/Dealer Index is now up 2.3%.

An S&P analyst recently said the market overreacted to BSC's outlook, that BSC's liquidity remains "solid", and that liquidity at Big 5 brokers is sound. Oil prices closing near session lows and down a whopping 4.5% on the day to $72.06/bbl, without the Energy sector (-1.2%) turning in a similarly miserable performance, is also noteworthy. DJ30 +161.19 NASDAQ +21.29 SP500 +20.16 NASDAQ Dec/Adv/Vol 1682/1358/2.06 bln NYSE Dec/Adv/Vol 1845/1466/1.59 bln

2:30 pm : A renewed wave of buying interest within the last 30 minutes has the indices retracing their afternoon highs. The most heavily weighted of all 10 economic sectors (Financials) not only pacing the day's gains but also surging 2.4% continues to be the key to today's recovery effort; but the sector is still well shy of recouping all of the 3.9% it lost on Friday.

There are three other sectors posting gains of more than 1.0% on the day. Unfortunately for market bulls, all three -- Staples (+1.8%), Utilities (+1.5%), and Health Care (+1.4%) -- have garnered added interest because of their defensive qualities in a jittery market. Their procilivity to outperform during periods of uncertainty or an economic slowdown is why Briefing.com has an Overweight rating on all three.DJ30 +104.13 DJUA +1.2% NASDAQ +10.83 SP500 +12.53 NASDAQ Dec/Adv/Vol 1900/1133/1.84 bln NYSE Dec/Adv/Vol 2174/1135/1.42 bln

2:00 pm : The market continues to pare its gains even as oil prices spike to fresh intraday lows. Crude for September delivery is now down 3.7% near $72.70/bbl, its biggest one-day decline in four months. On the surface any downturn in oil is bullish, especially since crude is still up 19% for the year; however, the commodity is selling off amid expectations that a slowing economy will reduce demand for gasoline.

Further, since the Energy sector now accounts for nearly 11% of the total weighting on the S&P 500, a 1.9% drop in the sector removes much of the leadership that helped lift the broader market to historic highs in mid July. When the S&P 500 last closed in record territory (July 19), it was up nearly 10% on the year while Energy was up almost 26%. The latter has seen that gain more than halved over the last 2 1/2 weeks while the S&P 500's year-to-date gain now stands at only 1.5%. DJ30 +64.95 NASDAQ +0.23 SP500 +6.77 XOI -1.6% NASDAQ Dec/Adv/Vol 1868/1146/1.71 bln NYSE Dec/Adv/Vol 2030/1262/1.33 bln