STOCK MARKET WATCH, Thursday March 27

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday March 27, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 300
DAYS SINCE DEMOCRACY DIED (12/12/00) 2622 DAYS
WHERE'S OSAMA BIN-LADEN? 2348 DAYS
DAYS SINCE ENRON COLLAPSE = 2639
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 March 26, 2008

Dow... 12,422.86 -109.74 (-0.88%)
Nasdaq... 2,324.36 -16.69 (-0.71%)
S&P 500... 1,341.13 -11.86 (-0.88%)
Gold future... 949.20 +14.20 (+1.50%)
30-Year Bond 4.33% +0.03 (+0.72%)
10-Yr Bond... 3.49% +0.00 (+0.06%)






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: Let the Games (Spin) Begin

BY CHRIS PUPLAVA

The markets rebounded Tuesday in the face of some serious negative economic news. The Conference Board’s Consumer Expectations Index fell to 47.9, the lowest reading in over 35 years and the second lowest number in the history of the index. The index is now below the levels of the last four recessions.

.....

The market's ability to shrug off negative news and stage a late afternoon rally yesterday (Tuesday) and today shows the market's current resiliency, and supports the notion of a short-term bottom after being relatively oversold. In fact, the markets are showing positive divergences and all three indices have marginally broken through their 50 day moving averages.

Helping to support the markets and turn investor sentiment is the financial press with their spin. Last week I commented on how Maria Bartiromo from CNBC said we were talking ourselves into a recession, and yet we never hear from the press how we can talk ourselves into a bubble. The financial press appears to be predominantly on the optimistic side of the coin and so it’s not surprising to see them spin negative news in a positive light. For example, last year I remember seeing a “CNBC ALERT” on the bottom of the channel that read, “Two out of 30 Dow stocks up on the day.” What would be the converse? “Twenty eight out of 30 Dow stocks down on the day!” Talk about the glass being half-full!

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

[TalkingDog]

20. And John Conlee just keeps on singin' it to me.......

I don't know why I keep on believin' you need me,
When you've proved so many times that it ain't true,
And I can't find one good reason for stayin',
Maybe my leaving would be the best for you,



But these rose colored glasses, that I'm looking through
Show ooo.......nly the beauty, cause they hide all the truth,


And they let me hold on to the good times, the good lines,
The ones I used to hear when I held you,
And they keep me from feeling so cheated, defeated,
When reflections in your eyes show me a fool



But these rose colored glasses, that I'm looking through
Show ooo.......nly the beauty, cause they hide all the truth,


So I just keep on hopin', believin that maybe,
By countin the many times that I've tried,
You'll believe me when I say I love you and
I'll lay these rose colored glasses aside,



But these rose colored glasses, that I'm looking through
Show ooo.......nly the beauty, cause they hide all the truth,

[Ghost Dog]

33. Ok. Cue John Coltrane's "A Love Supreme"

(almost without lyrics):

http://www.youtube.com/watch?v=HMrK7564Egs

:-)

[ozymandius]

2. Today's Reports

08:30 GDP-Final Q4
Briefing.com 0.6%
Consensus 0.6%
Prior 0.6%

08:30 Chain Deflator-Final Q4
Briefing.com 2.7%
Consensus 2.7%
Prior 2.7%

08:30 Initial Claims 03/22
Briefing.com 360K
Consensus 371K
Prior 378K

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

[UpInArms]

22. Initial Claims @ 366,000 - U.S. Q4 domestic purchases fall 0.4%, 1st drop in 6 years

06. U.S. Q4 consumer spending grows 2.3%
8:30 AM ET, Mar 27, 2008 - 3 minutes ago

07. U.S. Q4 domestic purchases fall 0.4%, 1st drop in 6 years
8:30 AM ET, Mar 27, 2008 - 3 minutes ago

08. U.S. GDP revisions see higher spending, lower inventories
8:30 AM ET, Mar 27, 2008 - 3 minutes ago

09. U.S. Q4 corporate profits after tax fall $37.9 billion
8:30 AM ET, Mar 27, 2008 - 3 minutes ago

10. U.S. Q4 core consumer prices up 2.5% vs. 2.7% previous
8:30 AM ET, Mar 27, 2008 - 3 minutes ago

11. U.S. Q4 GDP unrevised at 0.6% annualized growth as expected
8:30 AM ET, Mar 27, 2008 - 4 minutes ago

12. U.S. 4-wk. avg. continuing jobless claims up 25,250 to 2.82M
8:30 AM ET, Mar 27, 2008 - 4 minutes ago

13. U.S. continuing jobless claims fall 5,000 to 2.85 million
8:30 AM ET, Mar 27, 2008 - 4 minutes ago

14. U.S. 4-wk. avg. initial jobless claims rise 1,750 to 358,000
8:30 AM ET, Mar 27, 2008 - 4 minutes ago

15. U.S. weekly initial jobless claims fall 9,000 to 366,000
8:30 AM ET, Mar 27, 2008 - 4 minutes ago

[UpInArms]

37. U.S. newspaper help-wanted ads ease in February

http://www.reuters.com/article/bondsNews/idUSNAT00385120080327

NEW YORK, March 27 (Reuters) - The number of help-wanted
ads in U.S. newspapers slipped in February as economic weakness
has slowed job growth, a private research group said on
Thursday.

The Conference Board said its gauge measuring help-wanted
ad volume slipped to 21 from 22 in January, which was revised
up from the original 21. The index was 30 a year earlier.

"More regions of the country are experiencing economic
distress and the impact is now evident in the labor markets,"
said Ken Goldstein, labor economist at the Conference Board, in
a statement.

"There's been very little profit growth, and virtually no
job growth in the past three months," Goldstein said.

Help-wanted ads have declined in seven of the nine U.S.
regions tracked in the last three months, with the steepest
decrease in the East South Central. The ads in that region
decreased 12.5 percent.

...more...

[ozymandius]

3. Oil above $106 after overnight jump

SINGAPORE - Oil prices rose to near $106 a barrel Thursday after soaring more than $4 in the previous session as lower U.S. fuel inventories and the further depreciation of the dollar spurred buying.

U.S. stockpiles of gasoline and distillates, which include heating oil and diesel fuel, fell more than forecast last week, according to data released Wednesday by the U.S. Energy Department's Energy Information Administration.

The inventory report in particular stoked worries that stockpiles of gasoline are falling right when analysts would like to see them rising — in advance of peak summer driving season. Gasoline inventories slid 3.3 million barrels last week, more than four times the decline analysts had expected.

.....

Light, sweet crude for May delivery added 6 cents to $105.96 a barrel in Asian electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract rose $4.68 to settle at $105.90 a barrel Wednesday.

The EIA reported that U.S. refinery activity also dropped, which analysts attributed to some refiners cutting gasoline production due to low profit margins. Gasoline inventories are 9 percent higher than a year ago.

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

[Ghost Dog]

13. Oil rises as heavy fighting rocks crude-rich Iraq

LONDON (Thomson Financial) - Oil rose as heavy fighting rocked crude-rich Iraq and as dollar weakness sparked a fresh round of buying.

A bomb struck an oil pipeline today in Iraq's southern city of Basra, where Iraqi security forces have been clashing with Shiite militia fighters, an oil official said, the second such attack this week.

"The main current fundamental risk for oil is the extended fighting in Basra and this morning's report of a bomb attack on one of the export pipelines will bring a risk premium for the weekend," said Petromatrix analyst Olivier Jakob.

Heavy fighting has erupted in a bastion of Shiite cleric Moqtada al-Sadr's militia in Basra, witnesses said, as military operations against gunmen in the southern oil city entered a third day.

The ailing dollar, meanwhile, has made commodities priced in the greenback cheaper for those trading in stronger currencies. Some investment from those buying commodities as an asset class has also returned after heavy liquidation and sharp price falls last week.

A poor economic outlook, however, as the US flirts with recession, still worried players who reckon oil demand could get hit in the longer term.

"The markets are again being distracted by geopolitical factors and the weaker dollar, but the rapidly deteriorating US macro backdrop and the weak demand implications this will certainly have, is still an overriding negative, albeit somewhat lost in the upside shuffle for now," said MF Global analyst Ed Meir.

/.. http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=82cbad15-7f06-450a-a5a8-259b9096b78b

[54anickel]

29. Heh-heh, yeah right...we get sooooo much of our crude oil from there. It's all about the buck and

the Cluster-f* our nation has become with Iraq as one of several albatrosses around it's neck. That dang headline doesn't come close to matching the topic of that article. Guess I should be happy that the Iraq fiasco is getting some mention in the headlines these days. Wonder effect the latest cowboy spin from the Whitehouse is having. Someone posted this in another thread, I'll edit to give proper credit and a link to the original post.

http://tpmmuckraker.talkingpointsmemo.com/2008/03/todays_must_read_303.php
And White House spokeswoman Dana Perino, as always, has put the brightest face possible on things: "I would characterize it as a bold decision — precisely what the critics have asked to see in Iraq, more movement by the Iraqi Security Forces."


On edit:
Here's the original thread by druidity33. Has a nice little collection of todays articles.
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3244668&mesg_id=3244688

[Ghost Dog]

30. Ah, glad you commented on that.

As you say, the RoW is more interested, actually, in OPEC basket prices & other more exotic sources.

So, we know about the price of (headline) West Texas "Sweet Light" Crude;
the price of (is there any left?) somewhat heavier Brent Crude(UK reference);
and, looking a little harder, of the OPEC Basket (cf. this from yesterday's SMW: "VIENNA, March 26 (KUNA) -- The Organization of Petroleum Exporting Countries' (OPEC) basket of 12 crudes gained five cents on Tuesday to settle at USD 96.20 per barrel, after being at USD 96.15 the day before. According to the OPEC bulletin on Wednesay, the average annual price of the basket last year was USD 69.10 per barrel. OPEC Reference Basket (ORB), implemented as of 10 September 2007, is currently made up of the following: Saharan Blend (Algeria), Girassol (Angola), Minas (Indonesia), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and BCF 17 (Venezuela).").

Now, where would one go to get a handle on the various prices of the various weights and prices and various pumped volumes of the various crudes in that OPEC basket (Iran Heavy and Basra Light, for examples), as compared with other sources? And just who buys?

edit to add: I don't have the numbers at hand, but if we say that the average Euro-USD rate was around $1.15 last year, and is now around $1.55, then you'll see that that OPEC basket prices has remained pretty stable at around €60 or so per barrel all this time...

[Ghost Dog]

53. ... And see undoubtedly related new thread here:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3064034#3067199

[54anickel]

60. I'm afraid that may end up filed in the pile of "known unknowns"...

The poetry of Rumsfeld...

The Unknown
As we know,
There are known knowns.
There are things we know we know.
We also know
There are known unknowns.
That is to say
We know there are some things
We do not know.
But there are also unknown unknowns,
The ones we don't know
We don't know.



The Situation
Things will not be necessarily continuous.
The fact that they are something other than perfectly continuous
Ought not to be characterized as a pause.
There will be some things that people will see.
There will be some things that people won't see.
And life goes on.



Happenings
You're going to be told lots of things.
You get told things every day that don't happen.

It doesn't seem to bother people, they don't—
It's printed in the press.
The world thinks all these things happen.
They never happened.

Everyone's so eager to get the story
Before in fact the story's there
That the world is constantly being fed
Things that haven't happened.

All I can tell you is,
It hasn't happened.
It's going to happen.



http://www.slate.com/id/2081042/

[Ghost Dog]

70. It is very fine poetry, ain't it.

...In the beginning there was nothing
And then there was some thing...

[Ghost Dog]

4. GLOBAL MARKETS-Shares ease on cloudy bank outlook, weak data

Thu Mar 27, 2008 5:17am EDT
SINGAPORE, March 27 (Reuters) - Asian stocks fell on Thursday as financials slipped on concerns over bank earnings, and the dollar hovered near a record low after a drop in U.S. durable goods signalled the world's top economy is in a recession.

Gains in commodities boosted shares in resources companies, such as Japan's Sumitomo Metal Mining (5713.T: Quote, Profile, Research) and Australia's BHP Billiton (BHP.AX: Quote, Profile, Research), helping lift some indexes off earlier lows.

...

Bank shares, such as Japan's Mitsubishi UFJ (8306.T: Quote, Profile, Research) and Australia's Macquarie Group (MQG.AX: Quote, Profile, Research), were among the biggest fallers, following the bank downgrades, a profit warning from Deutsche Bank (DBKGn.DE: Quote, Profile, Research) and comments from European central bankers that there was no end in sight to the global credit crunch.
...

Tokyo's Nikkei .N225 closed 0.8 percent lower, recouping some of an earlier near-2 percent drop, but still pressured by weaker exporters such as Honda Motor Co Ltd (7267.T: Quote, Profile, Research) as the stronger yen promised to erode their profits.

MSCI's index of other Asian shares .MSCIAPJ fell 0.5 percent by 0612 GMT, taking its losses so far this year to around 14 percent.

Seoul's KOSPI and Sydney's S&P/ASX 200 index both shed 0.2 percent, while Taipei's TAEIX dropped 1.9 percent and Shanghai .SSEC sank 3.4 percent.

Hong Kong's Hang Seng .HSI was a bright spot, rising 0.4 percent on reassuring earnings from conglomerate Hutchison (0013.HK: Quote, Profile, Research) and property group Cheung Kong (0001.HK: Quote, Profile, Research).

OIL AT $106

Oil traded above $106 dollars a barrel after a U.S. government report showed larger-than-expected drops in fuel stocks and declining fuel production in the world's top oil consumer.

U.S. crude oil futures CLc1 added 41 cents to $106.33, while London Brent LCOc1 traded at $104.38.

The dollar edged up but stayed within striking distance of a record low versus against the euro after the European Central Bank president's remark that euro zone rates were at the right level cooled expectations for a near-term ECB rate cut.

...

Japanese government bond futures were lifted by the Nikkei's fall and strength in the yen.

June 10-year JGB futures rose as high as 141.03, before trimming gains to 140.77 2JGBv1, a rise of 0.33 of a point on the day.

The 10-year JGB yield fell 0.5 basis points to 1.270 percent <JP10YTN=JBTC>, edging back towards a three-year low of 1.215 percent reached on Wednesday.

Surging oil and a weaker dollar sent investors to gold. Spot prices <XAU=> rose to $952.30/953.10 an ounce.

/... http://www.reuters.com/article/marketsNews/idINSP15005920080327?rpc=611

[Ghost Dog]

7. European Stocks Rise, Led by H&M, Man Group; U.S. Futures Gain

March 27 (Bloomberg) -- European stocks rose as better-than- expected profit from Hennes & Mauritz AB and upbeat outlooks from Man Group Plc and Q-Cells AG helped bolster confidence that earnings will weather an economic slowdown. U.S. index futures gained, while Asian shares fell for the first time in five days.

...

Europe's Dow Jones Stoxx 600 Index added 1.2 percent to 308.24 as of 9:15 a.m. in London. The index has lost 15 percent this year after credit losses and mortgage writedowns for banks worldwide have reached more than $208 billion.

``The market is taking advantage of the lack of bad news to rebound,'' said Laurent Vallee, a fund manager at Richelieu Finance, which oversees $6.3 billion. ``The earnings reports, which are pretty good, are the catalyst.''

...

National benchmark indexes rallied in all 17 western European markets that were open. The U.K.'s FTSE 100, France's CAC 40 and Germany's DAX all rose 1 percent.

Hennes & Mauritz advanced 4.1 percent to 352 Swedish kronor. The retailer said first-quarter profit rose 28 percent to 2.94 billion kronor ($493 million), beating the 2.8 billion-krona average estimate of seven analysts.

Man Group climbed 3.2 percent to 562.5 pence after saying annual earnings will exceed analysts' estimates, helped by rising performance fees.

Q-Cells gained 8.2 percent to 55.87 euros. Germany's largest solar-energy company expects to report 2008 revenue of 275 billion euros ($2 billion), compared with an earlier forecast of 1.2 billion euros.

Compass Group, the biggest provider of food services to companies, hospitals and schools, jumped 3.3 percent to 320.75 pence. Five-month sales and profit beat its forecasts after the company negotiated better terms with suppliers and won contracts.

Swiss Life Holding climbed 3.8 percent to 259.75 francs. Switzerland's largest life insurer said 2007 profit rose 44 percent to a record 1.35 billion Swiss francs ($1.36 billion) on the sale of its Belgian and Dutch units and the Banca del Gottardo private bank. That beat analysts' estimates.

/... http://www.bloomberg.com/apps/news?pid=20601085&sid=aseMbkxJU6qQ&refer=europe

[Ghost Dog]

8. Banks' liquidity moves boost Europe shares further

Thu Mar 27, 2008 9:13am GMT
LONDON, March 27 (Reuters) - European stocks extended gains to above 1 percent on Thursday, after the European Central Bank said it was keeping an eye on tensions in money markets and is ready to add extra liquidity as needed.

The Bank of England said it would offer 13.62 billion pounds at its regular one-week open market operation.

/.. http://uk.reuters.com/article/eurMktRpt/idUKL2774091220080327

[Ghost Dog]

12. ECB: To Closely Monitor Liquidity Conditions Amid Market Tension

FRANKFURT -(Dow Jones)- The European Central Bank Thursday said it will continue "to closely monitor liquidity conditions" in light of tensions in the interbank euro money markets.

The ECB "notes tensions in short-term rates as the end-of-quarter approaches, notwithstanding the ample liquidity conditions," it said in an unscheduled announcement, adding that it "stands ready to provide additional liquidity if needed."

Overnight money market rates Thursday continue to exceed the ECB's comfort level of around 4%. At 0845, overnight rates were at 4.04%-4.15%, and traders said they are unlikely to ease before banks close the quarter on Monday. The ECB aims to steady overnight cash rates in line with the minimum bid rate at its main refinancing operations.

Three-month Euribor broke above the 4.70% mark on Wednesday and the rate isn't expected to fall back at Thursday's fixing, traders said.

The ECB announcement comes just two days after the bank pumped EUR50 billion more than estimated into money markets in its regular refinancing operation, and provided $15 billion in fresh dollar funds to cash-hungry banks.

/. http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20080327\ACQDJON200803270517DOWJONESDJONLINE000458.htm

[Ghost Dog]

69. Banks lead Europe shares up 1 pct, techs lag

Thu Mar 27, 2008 4:41pm GMT

LONDON, March 27 (Reuters) - European shares closed up 1 percent on Thursday, buoyed by financial shares after the top three European central banks vowed to pump extra cash into the money markets, while technology shares fell.

The FTSEurofirst 300 index of top European shares gained 1 percent to close at an unofficial 1,271.03 points, having risen by as much as 1.7 percent earlier in the day.

HSBC (HSBA.L: Quote, Profile, Research) gained 1.1 percent, while Banco Santander (SAN.MC: Quote, Profile, Research) rose 1.2 percent and HBOS (HBOS.L: Quote, Profile, Research) and Natixis (CNAT.PA: Quote, Profile, Research) gained 2.6 to 3 percent.

"The market is still very, very jittery but I think it wants to believe that the central banks can solve the problem," said Andrew Lynch, a portfolio manager at Schroders.

"We're going to remain very data-dependent, very event-dependent so if we see unemployment really accelerate in the States, if we see consumer confidence in Europe, which has remained remarkably high, start to crack, then I think the market goes down again."

/... http://uk.reuters.com/article/eurMktRpt/idUKL2755192020080327

[ozymandius]

5. More government bailouts may be on way

WASHINGTON - The economy is listing. So it must be time to bail. While there is little enthusiasm for government bailouts in general, voters are increasingly demanding immediate government relief as the economy ebbs.

The Fed-engineered bailout of investment banker Bear Stearns and other assistance to financial institutions has further raised expectations. To some, the $30 billion JP Morgan-Bear Stearns deal also raised a fairness issue: Should the government bail out a prestigious investment bank while doing little to address the hardships of Americans facing foreclosures on their homes, or caught in other troubled segments of the economy, such as laid-off factory workers?

Members of Congress, particularly Democrats, will press the issue when they return from their spring break next week. Bailout proposals for homeowners abound, including several measures to get lenders to rework home loans. There are also bills to increase federal regulation over the nation's financial system.

http://news.yahoo.com/s/ap/20080327/ap_on_go_ot/government_bailouts

[ozymandius]

6. Paulson says new financial rules needed

WASHINGTON - If big Wall Street investment houses are allowed to run to the Federal Reserve for emergency lending, they must face stepped-up regulation, Treasury Secretary Henry Paulson declared Wednesday.

The demise of once-mighty Bear Stearns proves "the world has changed," underscoring a need for the government to adapt, too, he said.

The Bush administration will soon put forth an oversight blueprint in an effort to promote smoother functioning of financial markets, Paulson said in a speech to the U.S. Chamber of Commerce.

The implosion of investment house Bear Stearns and fears that others could be in jeopardy have sent a tremor rippling through trading rooms of Wall Street, the corridors of official Washington and the living rooms of many Americans. The situation has raised new questions about whether regulations need to be revamped to better keep up with the world of modern finance and to avert a repeat of the chaos now confronting the country.

.....

The secretary said commercial banks' access to the Fed's emergency lending "discount window" has traditionally been accompanied by regulatory oversight and supervision. "Certainly any regular access to the discount window should involve the same type of regulation and supervision," Paulson said.

And he suggested that the Federal Reserve collect as much information as necessary on investment houses to "make informed lending decisions." He said the Fed is currently working to do that. Paulson suggested the Fed, the Securities and Exchange Commission and the Commodity Futures Trading Commission also continue to work to build a framework on this.

http://news.yahoo.com/s/ap/20080327/ap_on_bi_ge/paulson_credit_crisis

[alterfurz]

44. Paulson: "in our system, innovation always precedes regulation"

translation into any other language: theft always precedes arrest
( as seen at sideshow.me.uk )

[Demeter]

56. It is Better to Seek Forgiveness, Than Ask Permission

the Opportunists' Creed.

[burf]

21. Tough new rules

1. Lunch breaks will now be limited to one hour and forty five minutes instead of the current two hours.

2. Company provided lattes will be limited to four days a week from the current five.

3. Bonuses will now be cut from the current average of $340,000 to $338,000.

[Robbien]

45. lol

And the most important new rule of all

Wall Streeters must learn their manners and say please when demanding government perks and bailouts.

[Ghost Dog]

47. ... And Spring Breaks will last ...

how long?

[UpInArms]

54. Fed's Stern wary of support for ailing banks

http://www.reuters.com/article/bondsNews/idUSN2734220820080327?sp=true

By creating the perception of a safety net, financial bailouts could lead to irresponsible risk-taking in the future, Minneapolis Fed President Gary Stern said in prepared remarks on Thursday.

"While governments cannot and should not uniformly avoid public support for creditors of failing banks, they should seek to minimize that support because of the distortions it produces," he told an audience at London's European Economics and Financial Centre.

pardon me while I :puke:

lips flapping and nothing else - these Fed pigs will never stop their support of corporate risk taking and saddling/enslaving the masses with the losses

[UpInArms]

67. Fed's Stern: expect further economic deterioration

http://www.reuters.com/article/bondsNews/idUSL271385320080327

LONDON, March 27 (Reuters) - Further U.S. economic deterioration is expected due to a lag in statistics, but lower interest rates should go a long way towards getting the economy back on track, Minneapolis Fed Reserve Bank President Gary Stern said on Thursday.

Stern told a seminar organised by the European Economics and Financial Centre in London that it had not been easy to address asset price falls.

"It's been neither easy or costless to address asset price collapses," he said.

...more with dead cat spin involved...

[ozymandius]

9. Merrill, UBS to Post Loss, Oppenheimer's Whitney Says (Update1)

March 27 (Bloomberg) -- Merrill Lynch & Co. and UBS AG probably will post a first-quarter loss because of writedowns on the value of debt securities, said Oppenheimer & Co. analyst Meredith Whitney, lowering earlier estimates.

``Based on the declines in the ABX indices, we expect the brokers and banks to take another round of writedowns on their mortgage-related positions,'' Whitney wrote in a report dated yesterday. She raised her forecast for asset writedowns at Merrill to $6 billion from $2 billion in the first quarter and said UBS may write down a total $11 billion.

Whitney correctly predicted two months in advance that Citigroup Inc. would reduce its dividend to preserve capital. Earlier this week she cut her estimate for first-quarter U.S. bank earnings by 84 percent.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aDVwDA8bv8CQ&refer=us

[formercia]

17. The Vultures at Oppenheimer

You wonder why Oppenheimer is hiring?

Those write downs ar going to their very wealthy clients who depend on Oppenheimer's staff to make sure the taxes and mortgages get paid and to throw people out on the street when they don't. The uber-rich won't soil their hands with such plebeian tasks, that's what Oppenheimer is for.

[ozymandius]

10. Fed May Buy Mortgages Next, Treasury Investors Bet (Update4)

March 24 (Bloomberg) -- Forget lower interest rates. For the Federal Reserve to keep the financial markets from imploding it needs to buy troubled mortgage bonds from banks and securities firms, say the world's biggest Treasury investors.

Even after cutting rates by 3 percentage points since September, expanding the range of securities it accepts as collateral for loans and giving dealers access to its discount window, the Fed has been unable to promote confidence. The difference between what the government and banks pay for three- month loans almost doubled in the past month to 1.69 percentage points.

The only tool left may be for the Fed to help facilitate a Resolution Trust Corp.-type agency that would buy bonds backed by home loans, said Bill Gross, manager of the world's biggest bond fund at Pacific Investment Management Co. While purchasing some of the $6 trillion mortgage securities outstanding would take problem debt off the balance sheets of banks and alleviate the cause of the credit crunch, it would put taxpayers at risk.

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

Put the taxpayers at risk? :woohoo: You know the Fed cannot pass up this golden opportunity.

[formercia]

18. You can be sure the best paper has been high-graded

and all the taxpayer will get are the junk sub-prime notes that none of the boys will touch.

[Ghost Dog]

49. Ahem, they are "girls" as well as "boys",

as far as I have been able to observe (London, at closeish hand). One fairly common denominator: most of them have been "educated" at the "right" schools...

[formercia]

57. Lemmings, educated by lemmings

at Ali-Baba U.

[burf]

19. Mean while the po' folk

will continue to lose their homes and the fat cats will pick the places up for pennies on the dollar. If Mr & Mrs Rich get into a tight squeeze. Hank and Ben Financial will help them out. Is this a great country or WHAT?

[Roland99]

31. Have you noticed the wild swings in 30-year mortgage rates?

5.5% one week, 6.1% the next, now back to 5.6%.

I'd hate to be a mortgage broker right now. Deals falling thru one week and then springing back to life the next and then dead again and then....

[54anickel]

34. BINGO!!!! What'd I win? What'd I win?!?!?!

"The only tool left may be for the Fed to help facilitate a Resolution Trust Corp.

[burf]

38. Congratulations!

You have won a wheelbarrow full of MBSs. But, we will want the wheelbarrow back next week.

Good to see ya' hanging around. Have a great day!

[54anickel]

42. Woo-hoo!!! Meanwhile I've started collecting headlines and articles for

a new board game. Maybe I'll just call it "Greed". At first I thought of creating an on-line version but I like the idea of a board game to play by the light of the oil lamp beeswax candle hmmmm, some sort of fire based lighting of the future. Most of us wouldn't be able to afford the luxury of powering a computer-based game anyway. :crazy:

[Ghost Dog]

50. PM me if you need a co-idea-worker on that concept...

(or maybe socialize it (in a more genuine sense) as a SMW/DU team collaborative project...).

Yeah, I know...

[54anickel]

66. It would make a great collaborative project, wouldn't it? n/t

[Ghost Dog]

73. Playing (&/or living seriously) all sides of the many equations, yeah. n/t

[Robbien]

11. More monoline trouble looms

SCA became the first of the AAA-badged bond insurers to have its rating slashed to below investment grade. ACA, which succumbed to junk status some months ago, was never rated top notch to start with.

Fitch, of course, was the one doing the downgrading. It cut the financial-strength rating of SCA’s subsidiary XLCA from A to BB, citing an updated assessment of the company’s capital position as well as the “material erosion in SCA’s franchise value and competitive business position.”

The agency now expected losses on SCA’s subprime CDOs to fall between $3bn and $4bn, compared to the company’s resources to cover losses of $4.2bn at the turn of the year. The company, which suspended the writing of new business earlier this month, has said it won’t resume normal operations until it has regained a rating of at least AA, and preferably AAA.

But the signs are not good. Fitch reckons that the insurer would need to raise as much as $5.9bn to regain a triple-A badge.


SCA was swiftly joined in the downgrade camp by FGIC, cut to BBB by Fitch from AA. It is short of between $5.1bn and $5.3bn in capital, compared to levels required for an AAA rating. The insurer has ceased writing new business, as it fights to bring its capital levels back above the regulatory minimum under New York insurance law.


http://ftalphaville.ft.com/blog/2008/03/27/11852/more-monoline-trouble-looms/

[ozymandius]

14. U.S. Stock-Index Futures Climb; Coca-Cola, Wal-Mart Advance

March 27 (Bloomberg) -- U.S. stock-index futures rose as investors speculated reports today may show economic growth and consumer spending were stable in the fourth quarter of 2007.

Coca-Cola Co., the world's largest soft-drink maker, and Wal-Mart Stores Inc., the biggest retailer, gained in Europe. Hartford Financial Services Group Inc. may rise after Sanford C Bernstein & Co. lifted its recommendation on the shares.

Standard & Poor's 500 Index futures expiring in June added 8.2 to 1,343.6 at 9:09 a.m. in London. Dow Jones Industrial Average futures gained 59 to 12,442. Nasdaq-100 Index futures climbed 10.75 to 1,821.

``The U.S. is first into this crisis and will probably be first out that is why we are more positive on U.S. equities then Europe and the U.K.,'' Nick Nelson, a London-based equity strategist at UBS AG, said in a Bloomberg television interview.

http://www.bloomberg.com/apps/news?pid=20601084&sid=a2FYlFmzq3N8&refer=stocks

Mr. Nelson then wiggled his pixie wings and sprinkled silver glitter on his tulips while muttering, "Where's my bong?".

[Robbien]

15. KPMG allowed fraud at New Century (and actually promoted fraud)

Auditor KPMG either initiated accounting fraud at New Century Financial Corp or stood idly by as the failed subprime mortgage lender committed fraud in 2005 and 2006, an independent report requested by the U.S. Department of Justice shows.

The 581-page report by court examiner Michael Missal concluded that New Century "engaged in a number of significant improper and imprudent practices related to its loan originations, operations, and financial reporting."

KPMG contributed to some of these accounting and financial errors "by enabling them to persist and, in some instances, precipitating the company's departures from applicable accounting standards," Missal concluded.

. . .

"In the post-Enron era, one of the lessons should have been that accountants need to be skeptical, strong, and independent," Missal told Reuters in a phone interview. "You didn't have any of those attributes here."

Missal added that creditors might also be entitled to remuneration from New Century officers, whose bonuses were tied to inaccurate financial statements and were sometimes three times what they should have been.

That could result in millions of dollars in recoveries, Missal said.

Missal's report was submitted to and sealed by the U.S. Bankruptcy Court on February 29. A judge unsealed the report on Wednesday at the request of former New Century employees, who said they could not approve the company's liquidation plan without more information.

The report details how New Century was "brazen" in increasing its loans and extending them to borrowers who were increasingly unlikely to repay.

. . .

Missal said the accounting firm's most obvious error was suggesting another method for calculating New Century reserves needed to cover potential defaulting loans.

New Century was already underestimating these coming payments when KPMG professionals suggested a new scheme that not only violated the accounting industry's Generally Accepted Accounting Principles but also exacerbated the situation.

"This is really the origin of the credit crisis," Missal concluded.

http://www.reuters.com/article/ousiv/idUSN2631813920080327?sp=true

The auditing firm actually suggested bad practices to New Century? They didn't just overlook bad practices but even suggested more ways to cheat.

No wonder the court documents were sealed.

[Roland99]

32. They weren't alone. See this LBN thread on Chase and fraud re: mortgages

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3244586

[54anickel]

39. Ya, but in "defense" of the sleezy brokers who lie and cheat, what else were they

to do in an environment where lying and cheating were the norm, the result of which were rewarded while the lying and cheating were overlookied with a wink-n-nudge and thus became part of "the competitive edge". When you work in an unscrupulous company or industry you tend to slowly grow to accept unacceptable pratices. Sure, maybe if you're lucky you change jobs, but chances are there's the same shit going on there as well and hey, you've got to make a living...so you suck it up, do your job and either loath yourself daily for what you've been become or you become some sort of self-centered sociopath. Either way, you've make your mark on the society at large and the cycle continues spiralling to new depths of deceit and despair....personally I've been there, done that and while certainly not proud of it, I recognize how it happens.

[Robbien]

43. So true

Which is why I do not have much faith in this government of ours. With the atmosphere created by this administration, all good career workers have either left or have had to conform to the mold.

Not much hope this is going to get much better when the current resident POTUS leaves.

[54anickel]

52. Gotta hang on to hope, but it's been 30 years of chipping away at regulations while at

the same time getting the public to believe the fallacy that what benefits the corporation that pays their salary also benefits them personally. It's not going to get "undone" that quickly. We've slowly been indoctrinated into the notion that so long as it's "legal" anything goes and is fair game in the name of profits. We've accepted the notion of predatory lending by believing the stereo-type of "they deserved it, they had it coming, they're just some deadbeat low-life". In some ways it goes all the way back to the debate of punishment vs rehabilitation for crimes. Take it further into the religious debate and the rising acceptance of the notion of a hell and eternal damnation as punishment for "sins" defined by man. Funny how those defined "sins" have less and less to do with how we treat our neighbor...somehow the religious-right have managed to "deregulate" humanity in the name of profits and greed. It truly boggles the mind. :crazy:

[DemReadingDU]

16. 2nd Healthcare fraud trial in Columbus, Ohio - Guilty

3/26/08 Pair convicted of witness tampering in National Century case
Poulsen and Demmler could get 35 years each

Federal officials are now 10 for 10 against National Century Financial Enterprises officials after former President Lance K. Poulsen was convicted today of intimidating the key witness in the fraud case against him.

Poulsen's fraud case is still pending, but the decision today means 10 former executives have been convicted or pleaded guilty to crimes related to the nation's largest fraud case involving a privately held company.

Investors lost more than $1.9 billion nationwide, and 350 people locally lost their jobs when the health-care financing company, which was based in Dublin, went bankrupt in 2002.

A jury convicted Poulsen and his friend, Karl A. Demmler, of obstruction of justice, conspiracy and two counts of witness tampering.

“Poulsen tried to buy justice, but justice is not for sale,” Assistant U.S. Attorney Doug Squires said after the verdicts were read. The U.S. District Court jury had deliberated for six hours.

Federal prosecutors convinced the jury that Poulsen had used Demmler as a middleman to offer the company's former vice president, Sherry Gibson, money if she would fake amnesia. Gibson, who went to prison after pleading guilty in 2003 to falsifying National Century records, is the government's key witness in the fraud case against Poulsen.

Defense attorneys noted that no money changed hands. And Poulsen testified that he offered money so Gibson could hire a new attorney.

However, Demmler gave Gibson a signed blank check minutes before he was arrested. And with the FBI's help, she had recorded all of their conversations.

A court-approved wiretap also recorded hours of conversations, including one where Demmler told Gibson that she would “need to have some moolah to not remember.”

In other taped conversations, Poulsen referred to “ways for our friend to recover our friend's losses.” Gibson testified that she was the friend.

Poulsen was silent after the verdicts were read. He rubbed his eyes and beard and didn't look back as a U.S. Marshal led him out of the courtroom in handcuffs.

In a monotone voice, Demmler said, “All right, let's go,” as another marshal took hold of his arm.

Federal Judge Algenon L. Marbley has not sentenced either man yet. Both face a maximum of 35 years in prison, which could amount to life for Poulsen, 64, or Demmler, 57. Poulsen is from Port Charlotte, Fla., and Demmler is from Columbus.

In addition, Poulsen still faces trial in August on fraud charges tied to the company's collapse.

“August is a new day. It's a new trial,” Poulsen's attorney, William R. Terpening said.

Five former National Century executives were convicted this month of fraud and other charges related to their business dealings that led to the company's collapse. The five are expected to be sentenced this summer.

Four other executives had previously pleaded guilty.

In this trial, Demmler was depicted as a rough character who was taped saying things such as “ I'd cut (the judge) up to pieces and feed him to the fish” and that he'd “like to choke (Gibson's attorney) to death.”

Noting those comments, Marbley ordered Demmler, who had been on house arrest, jailed immediately.

Defense attorneys Peter C. Anderson and Darryl Parker said it was too early to say whether they would appeal.

Other charges are possible.

When Demmler was arrested in October, he was on his way to Venezuela with several hundred thousand dollars in fake bonds, testimony showed. In recorded conversations, Demmler said he was involved in money laundering and used fake credit cards.

FBI Special Agent Jeffrey Williams was asked on the stand whether Demmler had been charged with money laundering.

“Not yet,” he said.

Squires, too, wouldn't comment further: “The investigation is still ongoing.”

http://dispatch.com/live/content/business/stories/2008/03/26/nat_cen.html


link to previous articles...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3243112&mesg_id=3243160


edit: many papers carrying the trial's verdit today
http://news.google.com/news?sourceid=navclient&ie=UTF-8&rls=GGLR,GGLR:2006-16,GGLR:en&q=national+Century+Financial+Enterprises+trial&um=1&tab=wn&scoring=n


edit: link to guilty convictions of 1st trial
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3226076&mesg_id=3226186

[Demeter]

23. HERE COME THE MODERN 1930s by Tom Au

http://www.dailyreckoning.com/


Former Fed Chairman Alan Greenspan, one of the major architects of the current crisis finally “fessed up” the other day when he referred to the current crisis as the “most wrenching since the end of the Second World War.” But the end of the Second World War marked the start of the boom times in America (at least for those who lived to tell the tale) so he must really be referring to the crisis since the beginning of the Second World War, which would be the late 1930s. And this decade is basically where we are now.

The modern 1930s are the logical consequence of the “New Economy” of the past decade, just as the original was a logical consequence of the “Roaring Twenties.” In each case, technology and leverage combined to create a potent but ultimately poisonous brew of wildly inflated asset prices. In essence, greedy CEOs (and investment managers) said, “we brought you the new economy, please cash us out now.” And a gullible American public affirmed this by bidding up prices to insane levels, expecting to share, rather than subsidize, the wealth of the selling shareholders. First the tech companies, then the financial intermediaries were then caught in traps of their own making, and escaped as sorely crippled entities, if they survived at all. But by this time, the more privileged players had “taken their money and run.”


.....................

And what’s worse, we are only in the early stages of the crisis. Last year, 2007, was the year that the mortgage market unwound. This year, 2008, will feature the collapse of major financial institutions, starting, but not ending, with Bear Stearns. Next year, 2009, will be the year when the problems make their way to the rest of the U.S. economy, including the still-buoyant industrial sector. By 2010, the recession (or worse) will be global.

Some take comfort in the fact that we haven’t yet seen soup lines, or 25% unemployment. But soup lines are merely an unnecessary (and hopefully unrepeated) appendage of the above. And anecdotal evidence suggests that many welfare agencies are now stretched to the absolute limit, meaning that new soup lines will appear if the system is tested just a bit more. And unemployment hasn’t risen because companies have so far chosen to cut health care and pension contributions rather than lay off workers. One can easily get to the 1930s 25% unemployment with a 0% headline unemployment rate – by assuming that half the work force will be “temps” working half time without fringe benefits.

But perhaps one of the better definitions of the modern 1930s was given in a previous article on this site – a two decade pullback in the American standard of living to the 1980s (the original took American consumption back to the 1910s). Such a pullback seems inevitable from the deleveraging and loss of wealth that is now taking place. Moreover, such a retreat would last for an extended period of time. That’s because we had the best of all possible worlds (relative to the true state of the global economy) for most of the past decade and half. The next decade and half will probably see the worst of all such worlds.

[Demeter]

24. Does Anybody Here Believe That Soup Kitchens Won't Be Coming Back?

The emergency food services have been over-subscribed for years already.

[54anickel]

40. I've become so jaded these days that I don't believe there will be anyone willing to

run them without a profit incentive of some sort.
My biggest nightmare is that they will be run by the religious right funded thru the right-wing "faith-based" initiative. That will give the TV-vangelists even more money and a wider audience to promote their hate and bigotry.
"Soup for your soul" anyone? :puke:

[Ghost Dog]

51. Just putting paint on canvas,

or similar, sounds like a great idea right now.

Me, while blocked (gathering moss) as a putative writer, I'm sort-of sculpting some small volcanic rocks these days (as well as eco-tuning (water control Arab-style, and gardening)) even more the house), using German and Japanese power tools (while they last) as well as more intricately by hand.

[Demeter]

55. Well, The Profit Would Be The Faith-Based Initiative Type

Pass the governmental restrictions and they foot the bill and pay salaries, without regulation or oversight...the model's already out there! The 30's updated!

[AnneD]

58. Morning Marketeers.....

:donut: and lurkers. 54anickel, some might do that because there has, is, and always be hypocrites. But there are also those that try their best to follow the example that Christ left for us.

And speaking of examples, I think, that as a quid pro quo for bailing out Bear Sterns, the public should have these companies esp JP Morgan, redo the mortgages for those folks in danger of foreclosure. They should be reset at a low fixed rate close to what it was before it went up, a moratorium should be placed on ARM's adjusting up. This would buy us time to safely untie this knot instead of kicking folks out that could at one time make the notes. If I am bailing these ass holes out I want something to show for my money instead of a worthless piece of paper. I want to see that money working in my neighbourhood. What good is it to have good people in tent cities while empty houses are all around. With this recession deepening, it will be a while before anyone can afford to buy again. How long do they plan to sit on these things. In Houston, we went for almost 10 years before we fully recovered. Somewhere in that time-banks started getting realistic. These folks have a way to go.

I will be out of pocket this afternoon. I will be heading to Washington, DC for some training. I am hoping to catch it during cherry blossom time. I will keep my eyes and ears open while I am there.

Happy hunting and watch out for the bears.

[54anickel]

63. Ya, but those that try their best to follow that example by running a soup kitchen

will get shut down for lack of the proper permits. :P

[54anickel]

71. I posted the following article late last night in yesterday's thread. Bears repeating

in light of your tent city comment.

http://features.us.reuters.com/cover/news/A089C8D8-FA97-11DC-A47A-9939C5584F1C.html

Cities grapple with surge in abandoned homes

snip>

LAWSUITS

In western New York, the city of Buffalo filed a lawsuit on Feb. 21 against 36 lenders -- including big names like JPMorgan Chase & Co Inc and Countrywide Financial Corp -- who were involved in 57 foreclosures that led to properties being abandoned and ultimately demolished by authorities.

The struggling Rust Belt city, plagued by about 10,000 vacant homes and commercial buildings, estimated the 57 foreclosures cost Buffalo $1 million in demolition work and another $1 million in nuisance costs -- from police patrols to boarding up buildings, to the social toll on communities. "We have found homicide victims in these structures," Buffalo Mayor Byron Brown said in a telephone interview. "Dog fighting has taken place in these structures. Drug dealing has been conducted. Last year one of our fire fighters was critically injured, losing one of his legs from the knee down, fighting a fire at a vacant structure," he said.

Alisa Lukasiewicz, who runs the city's law department, said Buffalo drew inspiration from similar lawsuits in Cleveland and Baltimore. "These properties are in a state of legal limbo," she said. "Banks walk away. The homeowners are gone, and the property is still there."

The city also launched "Bank Day" in a housing courtroom to consolidate cases against lenders into one afternoon each month. About 50 cases are pending, mostly against creditors accused of housing code violations -- from trash-strewn lawns to chipped paint and collapsing ceilings.

In some cases, mortgage companies threaten foreclosure if borrowers fall behind in loan payments but never go through with it, leaving the borrower technically the property's owner and complicating efforts to revive an abandoned home. "Another big problem we have had is this new wave of lending," said Cindy Cooper, a Buffalo city prosecutor who specializes in housing. "It's difficult to work out who holds the note, who is in control of a property. These mortgages have been packaged into portfolios and sold on Wall Street."

HOMES FOR A $1 EACH

Further east, Syracuse, New York, began selling vacant homes last year for $1 each to non-profit groups who promise to tear them down and renovate them. Last month, Syracuse Mayor Matthew Driscoll extended the deal to private companies.

The aim is to get abandoned homes back on the market in one to two years and back on the tax rolls. "The foreclosure crunch has now meant that no neighborhood is exempt from having a vacant property pop up," said Kerry Quaglia, executive director of Home Headquarters, a non-profit that demolished about 100 homes and renovated 40 last year.

Some cities such as Cleveland are developing land banks to buy and either demolish or repair distressed properties. "Because of the foreclosure crisis we are seeing this incredible glut of inexpensive distressed houses being sold at pennies on the dollar," Cleveland city councilman Tony Brancatelli said in a telephone interview. "The mortgage companies don't want to hold onto them so they are dumping them on the Internet at a rapid rate. People are buying them 15 to a 100 at a time," he added. "One of the most significant parts of the land bank is stopping this cycle of abandonment."

more...

[UpInArms]

25. dollar watch

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

Last trade 71.535 Change +0.166 (+0.23%)

Financial Markets Still Struggling, Traders Bet On Another 50bp In April

http://www.dailyfx.com/story/topheadline/Financial_Markets_Still_Struggling__Traders_1206563462512.html

The credit markets are still under considerable pressure, though investor confidence in corporate debt seems to be on the rebound. Over the past week, the Federal Reserve made another attempt at reviving confidence among borrowers and lenders to thaw the credit freeze. On the back of the announced TSLF plan and 75bp rate cut, policy makers offered their first $50 billion liquidity injection into the market and expanded the range of acceptable collateral for the auctions. In addition to AAA rated commercial mortgages, the Fed has said it will now accept bundled mortgage debt (what many consider to be the bane of the credit market). However, while risk premium in insuring corporate debt has eased on these efforts; demand for short-term, comparatively risk free paper has yet to respond significantly.



<snip>

U.S. CONSUMER: HOW ARE THEY DOING?

Though the Fed’s dual efforts to settle the financial markets and avert a recession have paid off for the corporate sector, consumers have yet to feel the full effect. On Tuesday, the Conference Board released its consumer confidence gauge for the month of March. The indicator’s headline revealed an unexpectedly sharp drop to a five-year low. However, the truly concerning element of this report was a drop in the outlook component to its lowest level since 1974. If such dour forecasts are translated into spending, the outlook for growth is in jeopardy. Further stoking concerns of an impending recession, the Leading Indicators composite from the same statistics group reported a fifth consecutive month, negative reading. As this is a gauge of growth in the coming three to six months, the probability of recession is looking better than even.



...more...

Euro Breaks 1.58, Is the Next Stop 1.60?

http://www.dailyfx.com/story/bio1/Euro_Breaks_1_58__Is_the_1206567335189.html

The Euro broke 1.58 against the US dollar today, leaving many traders wondering whether the next stop will be 1.60. Economic data out of the Eurozone continues to beat expectations while data from the US consistently falls short. As we predicted in yesterday’s Daily Fundamentals, German business confidence improved in the month of March. Once again, analysts had underestimated the resilience of German corporations even though the rise in the flash estimates for the service and manufacturing sector PMI reports should have given them a clue that business activity accelerated. In fact, German businesses have not been this confident in 7 months. Eurozone industrial new orders also increased strongly in the month of January, adding fuel to the rally in the EUR/USD. The market completely ignored the sharp deterioration in the Eurozone current account balance which was the only thing that would have been impacted by the strength of the Euro. Just from an economic data perspective, the EUR/USD has a good chance of testing 1.60. Meanwhile, the big story of the day was French President Sarkozy’s call for the UK to join forces with them to pressure the US into strengthening the dollar. That is nothing but wishful thinking considering that the US would never bow to the pressure of France or the UK at a time when they need a weak dollar to boost exports. Although Trichet noted that excessive volatility in the currency market is undesirable for growth, he also added that there is “no need to change framework due to market turmoil.” In other words, inflation is still a big problem and for that reason intervention is off the table for the ECB. Earlier this month, we had said that the ECB would not consider verbal intervention until the EUR/USD broke 1.60. In 2004, the last time the central bank become extremely worried about the movements in the Euro, the currency had rallied 13 percent in 2 months. If we count 1.59 as the record high in the Euro, the currency pair has only appreciated 10 percent over the last 2 months. A 13 percent move would put the EUR/USD at 1.62.

...more...

[Demeter]

26. The Lost Decade

http://www.dailyreckoning.us/blog/?p=768


The Fox Business Channel editorial meeting must be a painful experience today. I mean, they're under a virtual mandate from Neil Cavuto to speak positive, soothing words about the stock market (and blame any turbulence that occurs on the prospect of Democrats getting elected)… and then out of the blue, the newest arm of the Murdochtopus tells us today — on page A1, no less — about a "lost decade" for stock investors.

Over the past 200 years, the stock market's steady
upward march occasionally has been disrupted for long stretches, most
recently during the Great Depression and the inflation-plagued 1970s.
The current market turmoil suggests that we may be in another lost
decade.

The stock market is trading right where it was nine
years ago. Stocks, long touted as the best investment for the long
term, have been one of the worst investments over the nine-year period,
trounced even by lowly Treasury bonds.

The Standard & Poor's 500-stock index, the basis for about half of
the $1 trillion invested in U.S. index funds, finished at 1352.99 on
Tuesday, below the 1362.80 it hit in April 1999. When dividends and
inflation are factored into returns, the S&P 500 has risen an
average of just 1.3% a year over the past 10 years, well below the
historical norm, according to Morningstar Inc. For the past nine years,
it has fallen 0.37% a year, and for the past eight, it is off 1.4% a
year. In light of the current wobbly market, some economists and market
analysts worry that the era of disappointing returns may not be over.

[Demeter]

27. The Roubini Ratio

http://www.dailyreckoning.us/blog/?p=767

I've just come up with another unscientific but nonetheless revealing indicator of economic health — the Roubini Ratio. (Constant readers will recall some of my other attempts in this regard — the Stress Index and especially the iPhone Index. None of them have caught on, but it won't stop me from trying.)

The Roubini Ratio is the difference between NYU professor Nouriel Roubini's forecast of $1 trillion in losses from the credit debacle and the forecasts of more mainstream economic analysts.
The gap is wide, but it's been steadily narrowing, and this week it approached the vital .5 threshold.

Wall Street banks, brokerages and
hedge funds may report $460 billion in credit losses from the
collapse of the subprime mortgage market, or almost four times
the amount already disclosed, according to Goldman Sachs Group
Inc. Profits will continue to wane, other analysts said.

“There is light at the end of the tunnel, but it is still
rather dim,'' Goldman analysts including New York-based Andrew
Tilton said in a note to investors today. They estimated that
residential mortgage losses will account for half the total, and
commercial mortgages as much as 20 percent.

Oops, hold on, the gap might be widening. A quick Google News search reveals that Roubini is thinking about upping his $1 trillion forecast.

The losses that we're facing at this point — $1 trillion — is the
floor, not the ceiling. Losses might be much bigger than that. Even if
you believe subprime losses might be in the order of $300 billion to
$400 billion, more losses are going to be derived from commercial real
estate, credit cards, auto loans, student loans and leverage loans, as
well as from corporate defaults and losses from city assets.

Eventually
the monolines will be downgraded, which means we'll see another round
of write-downs on the things that they insured…

I would argue this is the worst financial crisis the U.S. has had since
the Great Depression. We haven't seen this type of real financial
turmoil for the last 70 years. Of course, it's not going to be as bad
as the Great Depression. But this isn't your typical run-of-the-mill
recession that in the last two episodes lasted only eight months with a
minor contraction in output. This is going to last at least 12 months
and more likely 18 months, which is something we haven't seen in
decades.

That last remark that brings me back around to generational thinking. No one in the current Millennial generation has any memory of a significant prolonged economic downturn. The oldest of them were born during the second dip of the vicious double-dip recession of 1981-82. How might this most protected and coddled of generations react to this cold, cruel reality?

[DemReadingDU]

35. Roubini interview in Investment News

Interview in Investment News...A Deep Recession and a Severe Financial Crisis Ahead
Nouriel Roubini | Mar 26, 2008
Here is an article and interview with yours truly recently published in Investment News.

NOURIEL ROUBINI: Superbear says there's more to come

By Janet Morrissey March 24, 2008, Investment News

Nouriel Roubini, one of the biggest bears on Wall Street, wasn't surprised by the fire sale at The Bear Stearns Cos Inc. of New York. He said it just reinforces his 12-point gloom-and-doom outlook, which he unleashed on Wall Street in February, and he now thinks that total financial losses in the credit debacle may top the $1 trillion he previously projected.

Mr. Roubini, 49, a professor at New York University's Stern School of Business and founder of RGE Monitor, a New York-based economic research firm, was met by skepticism when he first predicted a downturn in a July 2006 report, "A Coming Recession in the U.S. Economy." Today, few doubt his early insight.

Since then, his predictions have become even more dire, with forecasts of mounting financial losses and a possible "catastrophic" meltdown in U.S. financial markets.

Mr. Roubini's 12-point outlook forecasts that housing prices will plummet 20% to 30% from their peak, subprime mortgage losses will exceed $300 billion and credit losses will spread outside the subprime arena to credit cards, auto loans and other areas.

He further expects monoline companies, which insure against defaults on certain municipal bonds and mortgage-related securities, to be downgraded, leading to more write-downs.

Other predictions include a meltdown in commercial real estate (see story, Page 44), a wave of defaults on corporate debt and credit default swaps and a sharp drop in liquidity, which could lead to fire sales of assets.

Reached by phone in Stockholm, Mr. Roubini spoke about current conditions and what he expects next.

interview continues...
http://www.rgemonitor.com/blog/roubini/251661


3/24/08 Superbear says there's more to come by Janet Morrissey
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080324/REG/767507756&template=printart

[Robbien]

28. Judge orders banks to fund Clear Channel buyout

LONDON (MarketWatch) -- A Texas judge ordered banks to fund the proposed $19 billion buyout of Clear Channel Communications by two private-equity firms, the San Antonio radio broadcaster said in a statement on Thursday.
District Court Judge John D. Gabriel of Bexar County, Texas, granted a temporary restraining order against the banks, Clear Channel said.

"He found in favor of Clear Channel's claim that irreparable harm would result if the banks were not immediately enjoined from tortiously interfering with the merger agreement," the company said.

"Accordingly, Judge Gabriel ordered that the banks, among other things, must not 'interfere with or thwart consummation of the merger agreement' by refusing to fund the merger transaction, insisting on terms that are inconsistent with the commitment letter, or refusing to act in good faith in the drafting of definitive loan documents," the company added.

http://www.marketwatch.com/News/Story/judge-orders-banks-fund-19/story.aspx?guid=%7BBBD75EDC%2DC0D1%2D4E4D%2DB3AD%2DD738CFE14EFC%7D

Sure does get bloody when vultures are fighting amongst themselves. There is no one to root for in this mess.

[Demeter]

36. Can a Court Order a Private Firm to Do Business Like That?

And why would the private equity firms want to continue the deal if the deal's prospects got so much worse?

[Robbien]

41. Well it is only a temporary injunction

but yes, a court can order companies to honor a contract or pay restitution to the injured party.

Since the contract was written by Bain Capital, one would expect it to be ironclad in favor of Bain and Clear Channel.

[kickysnana]

46. CP DU Rural-Farm: "Bear-Proof composting...is it possible?"

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=268x1501#1506

Stumbled on to this while still half asleep and thought of STMW and also the trickle-down theory.

[54anickel]

68. Heh-heh, trickle-down. There's a bear raiding the compost....

Oh, just piss on it! That'll piss him off!

[Robbien]

48. Canadian Bank CIBC discloses $25 billion in mono-line exposure

Canadian Imperial Bank of Commerce confirmed Wednesday it has $25 billion of previously undisclosed investments tied to the health of mono-line insurers and the U.S. economy.

But the new disclosure, concerning investments not tied to the U.S. subprime-mortgage market, was welcomed by some analysts who had feared the bank's problems were even worse than they now appear.

"Bottom line - there are more write-downs to come, but the less-toxic nature of non-subprime assets is a positive," said Sumit Malhotra, an analyst at Merrill Lynch & Co.

A number of analysts had been frustrated by the bank's earlier refusal to give more details of this book of non-subprime investments.

There were fears the portfolio of securities backed by corporate loans, commercial mortgages and other assets would be hit by the same sort of charges CIBC has recorded in its subprime book. The bank has already taken $4.2-billion hit in subprime and other credit-crunch write-downs, more than any of its Canadian peers.

http://www.canada.com/topics/news/story.html?id=58af9ee8-bfac-4026-b756-8f1c56363d86&k=50644

They are celebrating monoline investments?

[Robbien]

59. Credit card rates in Peru to jump 40 percent

Just be glad we don't live in Peru. A recent article published on livinginperu.com announced that some credit card holders in Peru will see interest rate jumps as high as 40 percent in the next few weeks. The APR for cash withdrawals will increase from 59.92 percent to 98.95 percent. Wow. It makes you wonder what the late fees and over-the-limit fees are.

Why so high? The country is trying to combat accelerating inflation (incited in part by the U.S. currency's decline in value) and Peru's Central Reserve Bank is implementing these measures and others to ward off runaway prices. According to the article, letters were sent to credit card customers announcing the rate increases, which will take effect April 15, while also reassuring customers that they were not being targeted for bad behavior.

http://blogs.creditcards.com/2008/03/credit-card-rates-peru-jump-40-percent.php

[Demeter]

61. Okay, Somebody Explain to Me

Why they just don't give it up as a lose-lose-lose proposition?

Isn't Peru one of the semi-non-aligned states in South America?

[formercia]

64. That's nice to know

"while also reassuring customers that they were not being targeted for bad behavior. "


It's not you, we're just fuckin' everybody.

[54anickel]

65. Bwahahaha!!! "It's not you..."

Reminds me, did anyone catch the GMA segment on fee harvesting credit cards this morning?

Under the title: Poor Credit, Big Fees

http://abcnews.go.com/Video/playerIndex?id=4534827

[InkAddict]

74. That's the same thing they say when you're RIF'd:

Nothing personal--just (greedy, unscrupulous) business.

[Demeter]

62. The REsident Didn't Discuss the Economy

Markets rise in relief!

[UpInArms]

72. end o' the day numbers and blather

Dow 12,302.46 120.40 (0.97%)
Nasdaq 2,280.83 43.53 (1.87%)
S&P 500 1,325.76 15.37 (1.15%)
10-Yr Bond 3.534% 0.04

NYSE Volume 3,941,274,000
Nasdaq Volume 2,038,792,250

4:30 pm : The major indices finished Thursday with steep losses in volatile trade. A disappointing report from a tech bellwether and continued concerns over financial companies drove the market lower. The stock market ended the day near its lows, sending it into negative territory for the month.

Oracle (ORCL 19.43, -1.51) reported third quarter non-GAAP earnings rose 23%, which met analysts' expectations. However, its stock got clipped 7.2% after the company reported revenue that was just short of estimates, and said on its conference call that customers were a little more cautious at the end of its quarter.

Disappointment over Oracle's view on consumer behavior weighed on the tech sector (-2.4%), which finished the day as the main laggard. Google (GOOG 444.08, -14.11) also got hit on reports that its most recent "pay per click" number was weak. Also fueling selling interests was news Lehman Brothers cut its price target to $580 on shares of Google.

Following the completion of the Fed's first Term Securities Lending Facility auction, the Fed said it will be lending $75 billion for 28 days. The bid-to-cover ratio came in at 1.15--which is the volume of bids divided by the total of funds available at auction. The stop-out rate--the lowest rate the Fed accepted--was 0.33%. The auctions stand to improve liquidity by lending financial firms highly liquid Treasury securities in return for less liquid assets as collateral.

The stock market’s initial response was positive to the TSLF auction results, as the low stop-out rate might indicate that financial firms are not desperate for capital. Sentiment soon soured as the market fell to its session lows.

Financials had a volatile day of trading, trading up as much as 0.9%, and ending the day at its lows with a loss of 2.0%. The sector was a laggard for most of the session due to negative rumors regarding Lehman Brothers (LEH 38.71, -3.78) and a number of earnings estimate cuts.

Oppenheimer shaved its earnings estimates on Merrill Lynch (MER 41.90, -2.52) and UBS (UBS 29.13, -0.03). Lehman Brothers cut its estimates on several banks. Some of the bigger names on the estmate chopping block included Citigroup (C 21.79, -0.26), Bank of America (BAC 38.64, -1.20) and Wells Fargo (WFC 30.26, -0.55).

Interestingly, there was not a Treasury market flight-to-quality as stocks fell. However, defensive oriented sectors utilities (+0.6%), health care (-0.1%) and consumer staples (-0.2%) outperformed on a relative basis.

Economic data were better than expected, but it was not enough to stave off selling pressure. New unemployment claims for the week ended March 22 fell to 366,000 from 375,000. This was slightly better than the 371,000 claims economists expected.

Separately, final fourth quarter GDP was left unchanged at 0.6%. However, consumption was revised higher to 2.3% from 1.9%, and the price deflator was revised downward to 2.4% from 2.7% In other words, the numbers showed better than expected spending, and lower than expected inflation.

In commodity trading, crude oil extended Wednesday’s steep gains. The commodity ending the day up 1.2% to $107.21 per barrel on news an attack in Iraq caused a pipeline explosion. As a whole, the CRB Commodity Index advanced 0.7%.
DJ30 -120.40 NASDAQ -43.53 NQ100 -2.2% R2K -1.4% SP400 -1.2% SP500 -15.37 NASDAQ Dec/Adv/Vol 1804/1086/2.03 bln NYSE Dec/Adv/Vol 1965/1172/1.43 bln

3:30 pm : The major indices are falling back toward their pre-Fed auction levels. Financials made it all the way back to positive territory, but are now down 1%.

At current levels, the S&P 500 is up 0.2% this month. If it holds onto a gain, it will mark the first positive monthly finish since October. If the market ends the month in the red, the market will have posted a loss for five consecutive months--the first time since 1990.DJ30 -58.45 NASDAQ -28.73 SP500 -7.22 NASDAQ Dec/Adv/Vol 1582/1265/1.64 bln NYSE Dec/Adv/Vol 1637/1459/1.11 bln

3:05 pm : Action has been choppy following the results of the Fed's new auction. The stock market climbed to the unchanged mark, but is now going back on the retreat.

The Fed will be lending $75 billion for 28 days due to the completion of itsfirst Term Securities Lending Facility auction. The bid-to-cover ratio came in at 1.15--which is the amount of bids divided by what was lent out. The stop-out rate--the lowest rate the Fed accepted--was 0.33%.

The TSLF auction results were akin to a seller listing a house for $300K in a weak housing market only to see multiple bids come in at $200K. It can be said that demand for the asset is technically high, but only at a discounted price, implying the buyers don't really need to buy the asset but they will if they get it at an extremely discounted rate. The bid-to-cover ratio at 1.15 shows that there is demand, but the stop-out rate at 0.33% indicates it isn't really needed. DJ30 -41.78 NASDAQ -25.01 SP500 -4.52 NASDAQ Dec/Adv/Vol 1534/1303/1.50 bln NYSE Dec/Adv/Vol 1505/1590/995 mln

[Wednesdays]

75. Something to make you go

Financials had a volatile day of trading, trading up as much as 0.9%, and ending the day at its lows with a loss of 2.0%. The sector was a laggard for most of the session due to negative rumors regarding Lehman Brothers (LEH 38.71, -3.78) and a number of earnings estimate cuts.

Oppenheimer shaved its earnings estimates on Merrill Lynch (MER 41.90, -2.52) and UBS (UBS 29.13, -0.03). Lehman Brothers cut its estimates on several banks. Some of the bigger names on the estmate chopping block included Citigroup (C 21.79, -0.26), Bank of America (BAC 38.64, -1.20) and Wells Fargo (WFC 30.26, -0.55).

I looked at today's charts for all of these companies--each closing lower--and volume was at or well above six-month highs. Something definitely is up.

On edit: I just rolled laughing at post #5 on this thread...
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=3052577

So, baseballhead, how's that $35 per share Citigroup purchase workin' out? :rofl:

[UpInArms]

76. I do believe I'll join you in that

On edit: I just rolled laughing at post #5 on this thread...
http://www.democraticunderground.com/discuss/duboard.ph...

So, baseballhead, how's that $35 per share Citigroup purchase workin' out?