STOCK MARKET WATCH, Thursday June 14

[ozymandius]

Source: DU

Thursday June 14, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 585 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2353 DAYS
WHERE'S OSAMA BIN-LADEN? 2065 DAYS
DAYS SINCE ENRON COLLAPSE = 2026
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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

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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 June 13, 2007

Dow... 13,482.35 +187.34 (+1.41%)
Nasdaq... 2,582.31 +32.54 (+1.28%)
S&P 500... 1,515.67 +22.67 (+1.52%)
Gold future... 652.70 -0.40 (-0.06%)
30-Year Bond 5.28% -0.08 (-1.49%)
10-Yr Bond... 5.20% -0.05 (-0.91%)






GOLD, EURO, YEN, Loonie and Silver

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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. Sorry to be so late folks.

I massively overslept. Now, onward through the groggy fog.

:donut:

[UpInArms]

2. dollar watch

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

Last trade 83.103 Change +0.053 (+0.06%)

Dow Jumps 187 Points, Leading to Strong Gains in Carry Trades

http://www.dailyfx.com/story/bio1/Dow_Jumps_187_Points__Leading_1181771099962.html

Dow Jumps 187 Points, Leading to Strong Gains in Carry Trades
The biggest story of the day is the rally in US stocks and given our extensive coverage about the correlation between carry trades and the Dow , it is not surprising that currencies pairs like AUD/JPY, GBP/JPY and EUR/JPY all rose in lockstep with US stocks, which did not begin to take off until the release of the Beige Book report. As the last event risk of an otherwise busy trading day, the slightly more optimistic conditions in the various Fed districts were enough to take the Dow higher. Our friends at IFR Markets made a very interesting point. They said that in “today’s Beige Book, words with the root weak appeared 38 times compared to 63 (65% more) occurrences of strong. This compares to the prior month, where weak appeared 48 times while strong appeared 66.” The rally in the Yen crosses was so strong today that the US dollar hit a 4 year high against the Japanese Yen while the Australian dollar rose to a new 15 year high. The Bank of Japan will be starting its 2 day monetary policy meeting this evening. Even though interest rates are not expected to be changed, there is a minority looking for one. Interestingly enough, the current surplus increased in the month of April while the trade surplus decreased. The divergence between the two numbers is a reflection of increased foreign investment into Japan and the weakness of the Japanese Yen most likely contributed to the overall demand. The strength of today’s move suggests that there is a decent chance that carry trades will continue to rally. As for the bill introduced by the Senate today, although it is new, it contained no major threats. It only removed the requirement that the Treasury label a country a currency manipulator before the administration can take action.

US Dollar Shrugs Off Stronger Data, Volatility Continues to Remain Low
With so much economic data released out of the US today, the hope was high for some meaningful activity in the US dollar. Unfortunately that did not happen despite solid retail sales, import prices and business inventories. Why? Because the voracious appetite of US consumers and the higher inflationary pressures do nothing more than validate the Federal Reserve’s plans to keep interest rates unchanged. The interest rate curve is now pricing in a greater chance of a rate hike over a rate cut, but with growth only beginning to improve, it is far too early for the central bank to actually consider lifting rates especially since high bond yields are still a problem that the economy faces. RealtyTrac Inc recently announced that foreclosures increased 90 percent in the month of May which indicates that even though the stock market is continuing to rise there is a part of the country that faces very serious economic problems. Yet this should not undermine the fact that consumer spending was very hot in the month of May. Not only did headline retail sales double expectations and sales excluding autos increase by 1.3 percent, but stripping out the record gasoline prices, we still saw a 1.2 percent rise in spending. The strength of the labor market is clearly is helping to fuel spending because as long as people have jobs, paying their rent or mortgages will be their number one priority. Meanwhile both the Treasury Report on Currency Manipulation and the Beige Book triggered lame reactions in the currency market. There were no major surprises in the Beige Book and as we expected, the recent policy changes by China saved them from being branded a currency manipulator. The US dollar is mixed today with moderate strength seen against the Euro and Japanese Yen, but weakness against the British pound and Canadian dollar. Inflation reports continue with producer prices up for release tomorrow. The weak dollar helped to boost import prices; we expect the same impact on producer prices as well.

...more...

US Senate Takes Aim At Chinese Yuan: Is This The Beginning?

http://www.dailyfx.com/story/topheadline/US_Senate_Takes_Aim_At_1181772982528.html

Well it’s out the first step has been taken by US legislators in initiating what could be an all trade confrontation between the world’s largest and the world’s fastest growing economies. Released shortly after the US Treasuries exchange policy evaluation, US legislators made it clear that flexibility must be the number one priority of Chinese policy makers.

The new bill, should it become US law would enable the US Treasury to coordinate intervention in the currency markets if there is fixed proof that the country’s currency is “fundamentally undervalued”. Although targeting every global participant, the central theme is clearly China and its rather rigid currency regime. Including potential participation from the International Monetary Fund and World Trade Organization, does the bill really turn heads in Beijing?

Not Likely…
Although the bill does reek of protectionism, the piece of legislation itself is visibly less harmful than the Graham-Schumer bill from last year. Dismissed on the advice of then newly initiated Treasury Secretary Paulson, the Graham Schumer initiative aimed at implementing tariffs of up to 27.5 percent of all Chinese imported goods. This time around, with the approval stamp of Democratic representatives Charles Schumer of New York and Max Baucus of Montana, as well as Republicans Lindsey Graham of South Carolina and Charles Grassley of Iowa, the bill looks to take the route of American currency intervention in the markets, something that hasn’t happened for approximately 7 years. However, the actual intervention, under the auspices of the legislation, would take a considerable amount of time from start to finish. In order for intervention to take place:

• The US Treasury Department’s twice a year report would identify "misaligned currencies" and not just currency manipulators. This is a shift from requiring that the Treasury find evidence that the country is deliberately trying to get a trade advantage.

...more...

[mojavekid]

34. Daily Pfennig 6/14/07: The Resilient U.S. Consumer...

http://www.kitcocasey.com/displayArticle.php?id=1438

The dollar continued to trade in a fairly tight range yesterday even after the retail sales number came in double the economists' estimates. Retail sales in the U.S. jumped by the most in more than a year in May, increasing 1.4%. The labor department also reported that import prices climbed .9 percent, also more than analysts predicted. These numbers seem to suggest the U.S. economy is beginning to grow again, eliminating the need to cut rates. In fact, some traders are again betting the Fed will have to raise interest rates by year's end due to the pickup in inflation.

Today's producer price data will add more fuel to these calls for an increase in rates, as PPI is expected to show a .6% gain in May. As with the retail sales number, the producer price number is being driven by the jump in fuel costs, which trickle down to drive up the prices of just about every item we buy. I don't think anyone can argue that global inflation is heating up, and that interest rates need to be raised in order to combat this inflation. But in spite of yesterday's numbers which suggest the U.S. economy is growing again, I am still not convinced the U.S. economy has "turned the corner." The FOMC will not be able to raise rates to combat this inflation, they are going to have to keep rates right where they are, whether or not inflation continues to increase.

snip...


The Swiss Central Bank raised its benchmark interest rate to a six-year high today and said more increases are likely to prevent an expanding economy and weaker franc from stoking inflation. SNB President Jean-Pierre Roth toughened his tone on inflation today as the decline in the franc pushes up the cost of imported goods. "Switzerland's economy is in excellent shape," Roth said at a press conference in Bern today. "Should economic momentum remain unchanged or should movements in the Swiss franc result in further relaxation of monetary conditions, further increases in the interest rate are likely in the months ahead." I still feel the Swiss franc is one of the best investments going into the end of this year. The carry trade, which has kept the franc down in value, will start to unwind, and the Swiss economy will continue to benefit from the growth in Europe.

more...

[UpInArms]

3. A.I.G. Sues Ex-Officers Over Deals and Earnings

http://www.nytimes.com/2007/06/14/business/14aig.html?ex=1339473600&en=d18161c171c8dde5&ei=5088&partner=rssnyt&emc=rss

The American International Group sued its former chief executive, Maurice R. Greenberg, and its former chief financial officer, Howard I. Smith, yesterday, becoming the sole plaintiff in a case seeking more than $1 billion in damages.

The insurer, according to an amended complaint filed in Delaware Court of Chancery, is taking over a lawsuit filed by A.I.G. shareholders. The original actions began in 2004 shortly after Eliot Spitzer, who was then the New York attorney general, accused A.I.G. and Mr. Greenberg of entering into sham reinsurance transactions and manipulating earnings.

<snip>

A.I.G.’s lawsuit says Mr. Greenberg and Mr. Smith caused “A.I.G. to be exposed to liability for violations of the federal securities laws and potential criminal liability.”

The executives also bear responsibility for the insurer’s continuing legal costs, the complaint said. A.I.G. said that it incurred the costs of an internal investigation, an $800 million settlement with the Securities and Exchange Commission, a $25 million settlement with the Justice Department and a $100 million fine to New York.

A spokeswoman for Mr. Greenberg could not be reached immediately for comment.

...more...

[UpInArms]

4. S.E.C. Ends Decades-Old Price Limits on Short Selling

http://www.nytimes.com/2007/06/14/business/14sec.html?ex=1339473600&en=675a4ae124e29ccc&ei=5088&partner=rssnyt&emc=rss

The Securities and Exchange Commission voted yesterday to end price restrictions on short selling, meaning that investors seeking to sell a share that they do not own will no longer be barred from doing so because the price of the stock is falling.

The 5-to-0 vote, ending a rule that had been in place since 1938, when short sellers were blamed by some critics for having caused the 1929 market crash and the Depression that followed, came as the commission also voted to make it harder to engage in naked shorting, the practice of selling shares that have not been purchased or borrowed.

Christopher Cox, the S.E.C. chairman, called naked short selling “a fraud that the commission is bound to prevent and to punish.”

When a naked short sale is made, it leads to a failure to deliver the stock when the trade settles three business days later. There are many other reasons for fails, but such sales are believed to be the primary one for many stocks.

...more...

[ozymandius]

5. Today's Market WrapUp

Interest Rate Rally May Be Over Short-Term,
but Ripple Effects Will Only Worsen Housing Situation
BY CHRIS PUPLAVA

The bond sell-off that began last month with the 10-year UST rising from a low of 4.602% on May 11th to a high of 5.316% yesterday may have reached a short-term top with the RSI near 90, the highest level seen in more than 20 years. Readings over 70 have marked peaks in interest rates previously (as marked below), and the current reading near 90 hints at either a pause or a pullback in rates.

-see chart-

One of the causes of the rise in interest rates has been a slew of economic reports over the past month that have been surprising to the upside, removing the hopes of a Fed cut and raising the possibility of a Fed hike with inflation returning to front and center with concern of a slowing economy taking a back seat.

-cut-

The housing recession is far from over and the subprime fallout, with more than two dozen lenders in the subprime mortgage sector collapsing, is beginning to spread into other areas of the economy. Evidence of the subprime fallout was presented in last week’s WrapUp with examples of Bed Bath & Beyond as well as housing-related employment.

Another indication of the subprime fallout spreading can be seen in the asset-backed security (ABS) market with securities backed by home equity. Markit, the administration and calculation agent for the Dow Jones CDX (credit default indices) index program, has constructed indices for various tranches of ABS backed by home equity. These indices are created from qualifying deals of 20 of the largest sub-prime home equity ABS shelf programs from the six month period preceding the roll.

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

[whistle]

6. It would be nice to start tracking the number of BushCo administrative

...people in handcuffs and convictions now that Scooter Libby will be hearing his sentence order today. Thanks for these by the way, I look forward to them each week

[ozymandius]

8. That would be worthy of its own serial thread.

Libby is just the first of many to be sure. I wonder if convictions will exceed the number established by the Reagan administration - which I believe is 27 convictions.

[ozymandius]

7. Today's Reports

8:30 AM Initial Claims 06/09
Actual 311K
Briefing Forecast 315K
Market Expects 310K
Prior 311K
Revised From 309K

8:30 AM PPI May
Actual 0.9%
Briefing Forecast 0.7%
Market Expects 0.6%
Prior 0.7%

8:30 AM Core PPI May
Actual 0.2%
Briefing Forecast 0.2%
Market Expects 0.2%
Prior 0.0%

http://biz.yahoo.com/c/e.html

[ozymandius]

11. Gas prices push whole inflation rate up

WASHINGTON - The biggest jump in gasoline prices in six months helped push inflation at the wholesale level higher in May although inflation outside of energy remained well-behaved.

The Labor Department reported that wholesale prices rose by 0.9 percent last month, worse than the 0.6 percent advance that analysts were expecting. The price surge was led by a 10.2 percent jump in gasoline prices, the biggest one-month increase since last November.

However, food prices declined for the first time in seven months and, outside the volatile food and energy sectors, core inflation posted a moderate 0.2 percent increase. That was slightly better than the 0.3 percent advance that analysts were expecting.

http://news.yahoo.com/s/ap/20070614/ap_on_bi_go_ec_fi/economy

[whistle]

39. YEASSSS....and bullshit on the food price decline because the grocery

....registers are running higher than ever for nearly all basic food stuff. Milk is now $3.89 per gallon, meat is almost out of sight and no matter what I put in the basket it all comes out much higher than the same mix from a year ago and the year before that, and the year before that, going back to before Bush came in in Jan 2001

[UpInArms]

21. 8:30 reports:

40. U.S. May crude goods PPI up 2%
8:30 AM ET, Jun 14, 2007 - 1 hour ago

41. U.S. core PPI up 1.6% in past 12 months
8:30 AM ET, Jun 14, 2007 - 1 hour ago

42. U.S. PPI up 4.1% in past 12 months, most in a year
8:30 AM ET, Jun 14, 2007 - 1 hour ago

43. U.S. core intermediate PPI up 2.9% yoy, 3-year low
8:30 AM ET, Jun 14, 2007 - 1 hour ago

44. U.S. May PPI energy prices up 4.1%
8:30 AM ET, Jun 14, 2007 - 1 hour ago

45. U.S. May PPI food prices fall 0.2%, 1st drop in 7 months
8:30 AM ET, Jun 14, 2007 - 1 hour ago

46. U.S. weekly continuing jobless claims fall 43,000 to 2.49mln
8:30 AM ET, Jun 14, 2007 - 1 hour ago

47. U.S. weekly initial jobless claims unchanged at 311,000
8:30 AM ET, Jun 14, 2007 - 1 hour ago

48. U.S. May core PPI up 0.2% vs. 0.1% expected
8:30 AM ET, Jun 14, 2007 - 1 hour ago

49. U.S. May PPI up 0.9% vs. 0.6% expected
8:30 AM ET, Jun 14, 2007 - 1 hour ago

[ozymandius]

9. Crude oil prices drop to $66.18 a barrel

Oil prices fell slightly Thursday on a U.S. government report indicating refiners are not producing enough gasoline to meet demand.

Light, sweet crude for July delivery dropped 8 cents to $66.18 a barrel on the New York Mercantile Exchange midday in Europe — after jumping 91 cents to settle at $66.26 a barrel on Wednesday.

Prices rose Wednesday after the U.S. Energy Information Administration's weekly snapshot showed U.S. gasoline stockpiles were unchanged last week and refinery utilization fell.

-cut-

Gasoline inventories were unchanged at 201.5 million barrels for the week ended June 8, the EIA report said. Analysts had expected inventories to rise by 2 million barrels. Stockpiles are 6 percent lower than inventories in the same week a year ago.

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

[ozymandius]

10. (*ahem*) Oil prices climb above 70 dollars a barrel in London

LONDON (AFP) - World oil prices rose on Thursday, breaching 70 dollars in London, after data showed no increase in US gasoline stockpiles last week as the peak driving season in North America begins.

Brent North Sea crude for July delivery climbed 37 cents to 70.31 dollars per barrel in electronic trading. The contract had closed up more than a dollar on Wednesday in the wake of the US inventory data.

On Thursday, New York's main oil futures contract, light sweet crude for delivery in July, gained 19 cents to 66.45 dollars per barrel in electronic deals before the official open of the US market.

Crude prices began rising strongly on Wednesday after the US Department of Energy (DoE) said US inventories of motor fuel were flat at 201.5 million barrels in the week ending June 8, well below the average range for this time of year and ending a five-week streak of gains.

http://news.yahoo.com/s/afp/20070614/bs_afp/commoditiesenergyoil_070614123237

I wish we as a nation could get rid of the middle man.

[whistle]

40. That's right, no drop this week that I saw

[ozymandius]

12. Theft rising at U.S. Wal-Mart stores (cry me a river)

NEW YORK - Shoppers at Wal-Mart stores across America are loading carts with merchandise — maybe a flat-screen TV, a few DVDs and a six-pack of beer — and strolling out without paying. Employees also are helping themselves to goods they haven't paid for.

The world's largest retailer is saying little about these kinds of thefts, but its recent public disclosures that it is experiencing an increase in so-called shrinkage at its U.S. stores suggests that inventory losses due to shoplifting, employee theft, paperwork errors and supplier fraud could be worsening.

The hit is likely to rise to more than $3 billion this year for Wal-Mart Stores Inc., which generated sales of $348.6 billion last year, according to retail consultant Burt Flickinger III.

Flickinger and other analysts say the increase in theft may be tied to Wal-Mart's highly publicized decision last year to no longer prosecute minor cases of shoplifting in order to focus on organized shoplifting rings. Former employees also say staffing levels, including security personnel, have been reduced, making it easier for theft to occur. And a union-backed group critical of the retailer's personnel policies contends general worker discontent is playing a role.

http://news.yahoo.com/s/ap/20070614/ap_on_bi_ge/wal_mart_theft

Maybe paying their employees a living wage would spurn theft.

[Maeve]

15. I wonder if that is part of why they closed the self-checkout lanes

Of course, closing those lanes leads to longer lines, since they didn't increase the staff and it was one clerk to four self-check lanes...which leads to customer anger...which leads to...okay, in my case it leads to dumping the merchandise up by the counters and walking out to go buy elsewhere, but I can see where some might just pocket small items rather than wait forever to pay.

Still, it's less than 1% shrinkage.

[ozymandius]

17. Welcome back Maeve!

Jeebus - you have been missed. Thanks for chiming in about the inner workings of Sprawl-Mart.

Less than 1% of sales hardly makes a dent in the overall picture. I just wonder how shareholders view this report considering that profits have been razor-thin over the past few quarters.

[Maeve]

19. Thanks, Ozy!

I've been really busy lately and I've missed y'all, too. Elder daughter (17) is in France with a school group for the week and I have been trying to dig her room out--first layer took a backhoe! I found her floor, but now I've got to get it reasonably back together before Saturday when she returns and that just might take the whole two days!!

Mal-wart is going to have to make some changes--there has been too much not-good and downright-bad news coming from them the past few months.
And as for the market--I think Cedar Point is watching to get ideas for their next great rollercoaster. :crazy:

[ozymandius]

23. I don't envy you that task.

The excavation project currently underway reminds me of times in my youth when my parents would not attempt to dig out my mess at all. They quickly covered everything under a few inches of topsoil and started over.

What a treat for your daughter. I hope you get some enjoyment out of her trip.

[ozymandius]

13. Imported toothpaste recalled

WASHINGTON - The Colgate-Palmolive Company said Thursday that 5-ounce tubes of counterfeit toothpaste sold in discount stores in four states under a Colgate label are being recalled because they may contain a poisonous chemical.

A Food and Drug Administration official, Doug Arbesfeld, said Wednesday that testing had found the chemical in a product with the Colgate label, but said in the initial announcement that the FDA was unsure whether it really was Colgate or a counterfeit.

-cut-

MS USA Trading, Inc. of North Bergen, N.J., the importer involved in the initial recall announcement, said the toothpaste may contain diethylene glycol, a chemical found in antifreeze.

The company said the toothpaste, imported from South Africa, was sold in discount stores in New Jersey, New York, Pennsylvania and Maryland.

-cut-

The same chemical has led to the recall of several brands of toothpaste imported from China in recent weeks.

http://news.yahoo.com/s/ap/20070614/ap_on_bi_ge/toothpaste_recall

[ozymandius]

14. Colgate warns of fake toothpaste in U.S.

NEW YORK (Reuters) - Colgate-Palmolive Co. (NYSE:CL - news) on Thursday said counterfeit "Colgate" toothpaste that may contain a toxic chemical had been found in discount stores in four U.S. states.

-cut-

Colgate-Palmolive said it does not use, nor has ever used, diethylene glycol as an ingredient in its toothpaste anywhere in the world. The chemical, known as DEG and sometimes illegally used as an inexpensive sweetener and thickening agent, is commonly found in solvents and antifreeze.

-cut-

Colgate-Palmolive said the counterfeit toothpaste was found in New York, New Jersey, Pennsylvania and Maryland. It can be recognized because it is labeled as being manufactured in South Africa, and the company does not import toothpaste to the United States from South Africa.

The packaging also contains several misspellings, Colgate said, adding that it was working closely with the FDA to help identify those responsible for the counterfeit product.

-- Brands seized earlier included Cooldent, Clean Rite and Oralmax that are usually found at discount retailers such as so-called dollar stores, the agency said.

http://news.yahoo.com/s/nm/20070614/bs_nm/colgate_fake_dc

[ozymandius]

16. U.S. Stocks Signal Flat Open

NEW YORK - Stocks moved toward a flat open Thursday following a lower-than-expected reading of wholesale inflation excluding food and energy costs.

Inflation at the wholesale level rose 0.9 percent in May, rather than the expected 0.6 percent rise. But excluding often-volatile food and energy costs — the core figure of the producer price index — the increase was 0.2 percent; Wall Street had seen an increase of 0.3 percent. The lower core reading could help ease some concerns about inflation.

The yield on the benchmark 10-year Treasury note rose to about 5.23 percent from 5.21 percent late Wednesday.

The inflation reading is important as investors are trying to determine whether a stock market rally Wednesday that followed a string of volatile back-and-forth sessions was justified. Another important inflation reading — the consumer price index — comes Friday.

http://news.yahoo.com/s/ap/20070614/ap_on_bi_st_ma_re/wall_street

[ozymandius]

18. pre-open blather

09:00 am : S&P futures vs fair value: flat. Nasdaq futures vs fair value: -1.0. The futures market is off its recent lows but still signals a lackluster start for the major averages. Further analysis of a core PPI reading that isn't troublesome and the realization tomorrow's CPI will provide a much clearer read on inflation are providing some semblance of stabilization.

However, the lack of improvement in Treasuries, as the 10-year yield still stands at 5.23%, is acting as an overhang as bond traders were evidently hoping for a smaller core rate. This morning's earnings reports also aren't providing investors with much incentive to extend such an impressive rally yesterday. Bear Stearns (BSC) missed analysts' expectations for the first time since 2001 while Goldman Sachs (GS) handily beat again but posted a paltry 1.0% rise in Q2 profits. Both brokers are down about 2% in pre-market action.

08:35 am : S&P futures vs fair value: -1.0. Nasdaq futures vs fair value: -2.5. Total PPI rose 0.9% (consensus 0.6%) in May. The more closely-watched core rate rose 0.2%, matching economists' forecasts; but the year/year rate ticked up 0.1% to 1.6%. Initial claims were unchanged at 311K (consensus 310K), still reflective of healthy labor conditions.

The futures market has pulled back, now signaling a slightly lower start for equities. Bonds have also weakened following the first increase in the core PPI in three months; the 10-year note is now down 9 ticks to yield 5.23%.

[ozymandius]

20. *** THOMAS THE TANK ENGINE, TRAIN RECALL DUE TO HAZARD***

Mods - I am posting more than the usual info from the article due to the very serious nature of the story.

Thomas The Tank Engine Train Recall - RC2 Corp has recalled various Thomas The Tank Engine Train toys due to a possible lead poisoning hazard.

In cooperation with the CPSC, RC2 issued a voluntary recall on June 13th, 2007, of various Thomas & Friends Wooden Railway vehicles and wooden train set components sold at toy stores and other retailers nationwide from January 2005 through June 2007.

The recall involves specific wooden vehicles, buildings and other train set components listed in the chart below. Surface paints on the recalled products have been reportedly determined to contain lead. Lead is toxic if ingested and is known to cause severe health problems.

A manufacturing code may be located on the bottom of the product or inside the battery cover.

Toys listed below marked with codes containing "WJ" or "AZ" are not included in this recall.

Recalled Product Names Red James Engine & Red James' # 5 Coal Tender
Red Lights & Sounds James Engine & Red James' #5
Lights & Sounds Coal Tender
James with Team Colors Engine & James with Team Colors #5 Coal Tender
Red Skarloey Engine
Brown & Yellow Old Slow Coach
Red Hook & Ladder Truck & Red Water Tanker Truck
Red Musical Caboose
Red Sodor Line Caboose
Red Coal Car labeled "2006 Day Out With Thomas" on the Side
Red Baggage Car
Red Holiday Caboose
Red "Sodor Mail" Car
Red Fire Brigade Truck
Red Fire Brigade Train
Deluxe Sodor Fire Station
Red Coal Car
Yellow Box Car
Red Stop Sign
Yellow Railroad Crossing Sign
Yellow "Sodor Cargo Company" Cargo Piece
Smelting Yard
Ice Cream Factory

Consumers can visit http://recalls.rc2.com, or call RC2's customer service at 866-725-4407 Monday through Thursday between 8 a.m. - 5 p.m. CT and Friday 8 - 11 a.m. CT.

http://www.postchronicle.com/news/breakingnews/article_21286425.shtml

[ozymandius]

22. off to a happy-go-lucky start

9:45
Dow 13,518.04 Up 35.69 (0.26%)
Nasdaq 2,592.06 Up 9.75 (0.38%)
S&P 500 1,519.68 Up 4.01 (0.26%)
10-Yr Bond 5.223% Up 0.023
NYSE Volume 186,262,000
Nasdaq Volume 120,943,000

[mojavekid]

24. AP: Switzerland to Sell 250 Tons of Gold

http://news.moneycentral.msn.com/provider/providerarticle.aspx?Feed=AP&Date=20070614&ID=7032489

BERN, Switzerland (AP) - The Swiss National Bank said Thursday it will sell 276 US tons of gold reserves over the next two years.

The sale would fetch about $5.2 billion (euro3.9 billion) at current prices.

The proceeds will be used to increase Switzerland's foreign currency reserves, national bank directorate member Thomas Jordan told reporters.

The share of gold in Switzerland's currency reserves has risen to 42 percent from 33 percent since mid-2005 due to the increase in gold prices. Jordan said the sale would return the share of gold in the currency reserves to their previous level.

more...

[mojavekid]

25. Bloomberg: Southern California Home Sales Fall 34 Percent; Prices Increase

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPVgrFLSmH0c

June 13 (Bloomberg) -- The number of homes sold in Southern California fell 34 percent last month to the lowest level in 12 years even as prices matched a record, DataQuick Information Systems said.

A total of 19,874 new and existing single-family homes and condominium units were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month, down from 30,303 a year earlier, La Jolla, California-based DataQuick said today in a statement. It was the lowest sales count for any May since 1995, when 17,712 homes changed owners.

A surge in purchases in 2004 and 2005 helped meet demand in the market, leading to a drop in home sales this year and last, DataQuick analyst John Karevoll said. Sales have been falling for 20 months in Southern California. The drop has yet to have a significant impact on the median price in the region, he said.

``For pressure to push prices down there, there needs to be a real imbalance between supply and demand,'' Karevoll said in an interview. ``Right now the market's a bit sanguine. We're not finding that those selling right now are taking prices down much. They'd rather take the houses off the market.''

more...

[cosmicdot]

35. May home sales in Orange County slowest in 20 years

Thursday, June 14, 2007

May home sales in O.C. slowest in 20 years
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Sales fell nearly 29 percent from the same month a year ago, but prices still are holding. The median price of home in the county was $500 more than the same time last year.

By JEFF COLLINS
The Orange County Register

The Orange County housing market continues to struggle through the slowest spring in at least two decades, caused chiefly by the reduced demand for lower-cost homes, market tracker DataQuick Information Systems reported Wednesday. (CLICK HERE http://www.ocregister.com/ocregister/money/housing/article_1723239.php for the complete chart of O.C. home prices and sales)

Still, prices are holding despite the competition among sellers, buoyed in part by a strong economy and the unwillingness of lenders to sell repossessed homes at steep losses.

A total of 2,675 homes closed escrow in May, DataQuick reported. That's the smallest number of May sales in the 20 years that DataQuick has been tracking the local housing market. Sales fell nearly 29 percent from a year ago and were down almost by half from May 2005.

The May figures confirm earlier reports that the meltdown in the subprime lending industry, which caters to homebuyers with lower credit scores, put the brakes on the local market since mid-March. May's closed sales represented deals made in March and April.

~snip~

http://www.ocregister.com/ocregister/homepage/abox/article_1729469.php

[ozymandius]

26. The air is clean, water pure, everyone has enough food ...

10:49
Dow 13,554.94 Up 72.59 (0.54%)
Nasdaq 2,600.93 Up 18.62 (0.72%)
S&P 500 1,524.62 Up 8.95 (0.59%)
10-Yr Bond 5.19% Down 0.01
NYSE Volume 617,494,000
Nasdaq Volume 506,630,000

10:30 am : Not much has changed within the last 30 minutes as the indices settle into a relatively narrow trading range. Oil prices, though, have spiked to fresh session highs, which may be stalling the recent momentum.

Crude for July delivery is now up 1.3% and back above $67/bbl for the first time this week. Refiners unexpectedly cutting utilization rates and Iran reiterating it will not suspend its nuclear program is attributing to the renewed risk premium being priced into crude.DJ30 +60.99 NASDAQ +15.45 SP500 +6.70 NASDAQ Dec/Adv/Vol 855/1815/342 mln NYSE Dec/Adv/Vol 765/2163/196 mln

10:00 am : The indices are extending their reach to the upside as the Financials sector turning positive provides some influential leadership. As the most heavily-weighted sector in the S&P 500, and the only sector initially failing to participate in this morning's follow-through efforts, a turnaround in Treasuries is renewing enthusiam for rate-senstive banks and REITs. The 10-year note is now up 4 ticks, pushing the yield down two basis points since the last update to 5.18%.

The brokerage group (XBD +0.3%) clawing its way into positive territory is also contributing to the sector's improvement. That's especially surprising since Goldman Sachs (GS 226.46 -7.17), among the sector's more influential names, is down 3% after Q2 profits rose only 1% year/year and its CFO said he expects 'more pain' in the subprime mortgage market. Bear Stearns (BSC 146.95 -2.54) is another disappointment after reporting its first quarterly shortfall in six years. DJ30 +58.53 NASDAQ +15.68 SP500 +6.50 NASDAQ Dec/Adv/Vol 910/1588/178 mln NYSE Dec/Adv/Vol 864/1870/76 mln

[Roland99]

27. Why Rates only Matter to Over Leveraged Owners and Banks: A Few Good Mortgages

Saw this posted in GD

http://drhousingbubble.blogspot.com/2007/06/you-want-mortgage-rates-you-cant-handle.html

Yet we forgot one thing in all this free money. Rates only encourage spending or stifle spending. Sound economic policy is based on monitoring credit expansion. Of course asking the wolves to mind the hen house isn’t the smartest thing, this is the policy we have been following since the start of the millennium. But for consumers, rates do not matter. The first thing you learn in real estate investing is location, location, location. Okay, lesson one is finished. But the second paramount thing to understand is you become successful by the purchase price of the home.

Rates Do Not Matter!

This fixation on the monthly payment I’m starting to find is based in behavioral economics and psychology. Everything is boiled down to the monthly payment.

“ReplayTV for only $39.99 a month!”

“Cell phone family plans for only $69.99 a month!”
“Enjoy credit protection for $19.99 a month.”
“Your interest-only payment for $1,600 a month.”

Sound familiar? When was the last time you heard an ad for “cell phone family plans for $840 a year?” How do you eat an elephant? One bite at a time. How do you bamboozle the public? Apparently by breaking everything down to the monthly payment.

Ironically this only works with spending and not savings. Why not save this much a month in your 401(K)? Why not sock away 10% a month for 30 years and be a millionaire like every self-help financial books discusses? Psychologically spending and saving are processed differently. They are diametrically opposed. If you spend $5 you cannot save that same $5. Marketing companies have honed into this message and have it down to a science. But again, the monthly amount does not matter, it is the price of the item.

[Gregorian]

28. But rates do matter.

Maybe I missed the point here. I agree with the overall assessment of the total cost of an item. But the reality is we are dealing with a nation that has no concept of math and savings. And compound that with decreasing salaries. Rising interest rates are going to have a phenomenal effect on real estate. People are not going to continue buying when they cannot afford the payments. Of course payments will be less on a house that is reduced in price by a third. But remember, those same people reduced the price of THEIR home in order to sell.

I personally am in complete agreement with the author. I purchased my last three properties with 100% down. There is no way in the world I would rent cash unless I had to. Of course the first property I did that with was a Kamikaze run. I had to sell after two years. But I knew the market was not crashing. I took a risk. And I made sure the property I bought was one I wouldn't mind owning foreever.

He's right. But rising rates are going to have the same affect that a gas pedal. A big one.

[Roland99]

29. I think that was the point. That rates *do* matter but only for those who don't know it

like those over-leveraged with 125% mortgages or ARMs that are leaving them struggling to make the new payments.

People think in monthly terms..."Can I get by *this month*?"

[Gregorian]

30. It's going to matter to those who do know it also.

My point is, there are only so many people who have that monthly income. Yes, there are those who thought Greenspan was being honest when he promoted ARMs. But the reality is that not everyone has the salary of a radiologist.

I am probably missing the point again. I think the idea was that a lot of Americans are now trapped by their stupid decision.

At any rate, I'm having a hard time being patient as this all unfolds. I'm ready for a long slow train wreck.

[TrogL]

33. My house has a great location

Drug house down the street. Hookers on every corner. Group home end of the block.

What more could I want?

I even get a supply of free (used) condoms and needles.

But I got a great mortgage.

[ozymandius]

37. Mortgage rates: biggest spike in 4 years

NEW YORK (CNNMoney.com) -- Mortgage rates made their largest upward movement in nearly 4 years, and the 30-year fixed-rate reached its highest level since July 2006, Freddie Mac said Thursday.

The average rate on 30-year fixed-rate loans climbed to 6.74 percent for the week ending June 14, from 6.53 percent the previous week. That marked the biggest one-week increase since July 2003.

Last year at this time, 30-year mortgage rates averaged 6.63 percent. The rate is the highest since July 20, 2006, when it averaged 6.80 percent.

The 30-year rate stood at 6.15 percent on May 10th, just before it turned sharply up.

-cut-

Rising rates, among other factors, have caused the MBA and the National Association of Realtors to push back their forecasts for a home price recovery. Both groups are now looking to early 2008, compared with a previous outlook for mid-2007.

http://money.cnn.com/2007/06/14/real_estate/mortgage_rates/index.htm

[mojavekid]

31. Bloomberg: U.S. Mortgages Enter Foreclosure at Record Pace (Update1)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aiJo5wu40LSo&refer=worldwide

June 14 (Bloomberg) -- The number of U.S. homeowners who face possible eviction because of late mortgage payments rose to an all- time high in the first quarter, led by subprime borrowers, as the economy grew at the slowest pace in four years.

The share of mortgages entering foreclosure rose to 0.58 percent, including so-called prime loans made to the most credit- worthy borrowers, from 0.54 percent in the fourth quarter, the Mortgage Bankers Association said in a report today. Subprime loans entering foreclosure rose to a five-year high of 2.43 percent, up from 2 percent in the prior quarter, and prime loans rose to 0.25 percent, the highest ever, from 0.24 percent.

Falling home prices have boosted the number of loans entering foreclosure because homeowners who fall behind on their payments are finding it more difficult to sell the property or refinance into another loan, said Doug Duncan, chief economist for the Washington-based bankers' group.

``Housing is in a recession, and we're seeing that reflected in prices,'' Duncan said. ``If you're in a position where you can refinance or sell, but house prices have fallen below your outstanding loan balance, you're in trouble.''

more...

[mojavekid]

32. Treasuries Little Changed With Yields Close to Five-Year High

http://www.bloomberg.com/apps/news?pid=20601009&sid=a.PsYPCZs9ys&refer=bond

June 14 (Bloomberg) -- Treasuries were little changed, with yields close to a five-year high, as a report on producer prices signaled that inflation rose at a faster pace last month.

Yields on 10-year U.S. notes are set to rise for a sixth straight week amid growing concern among investors that inflation won't moderate. Faster inflation erodes the value of Treasuries' fixed payments and may fuel speculation the Federal Reserve will lift interest rates later this year.

``There's no bullish message for bonds'' in today's inflation data, said Jonathan Lewis, a principal at New York- based Samson Capital Advisors LLC, which has $2 billion in assets, including Treasuries. ``Pricing pressures exist. The bond market has reason to be concerned.''

The yield on the benchmark 10-year note rose 1 basis point, or 0.01 percentage point, to 5.21 percent at 1:25 p.m. in New York, after reaching 5.25 percent earlier, according to bond broker Cantor Fitzgerald LP. The price of the 4 1/2 percent security maturing in May 2017 fell about 1/8, or $1.25 per $1,000 face amount, to 94 1/2. Prices move inversely to yields. The yield ended last week at 5.10 percent and touched 5.32 percent yesterday, the highest since April 2002.

more...

[ozymandius]

36. end of the day in La La Land

Dow 13,553.73 Up 71.38 (0.53%)
Nasdaq 2,599.41 Up 17.10 (0.66%)
S&P 500 1,522.97 Up 7.30 (0.48%)
10-Yr Bond 5.217% Up 0.017
NYSE Volume 2,793,851,000
Nasdaq Volume 1,937,228,000

blather to come...

[ozymandius]

38. blather ready

I wonder what would happen if Goldman Sachs failed to meet Wall Street expectations...

4:20 pm : Despite showing signs of fatigue initially after Wednesday's sizable rally, it didn't take long for the bulls to get back to their winning ways Thursday as more signs of bond yields topping out left the bears with little to work with.

Given the Fed's repeatedly hawkish stance on inflation, investors weren't placing any big bets on a follow-through effort before getting an update on inflation at the wholesale level. At 8:30 ET, total PPI rose a larger than expected 0.9% in May while the more closely-watched core rate rose 0.2%.

Even though the latter component matched economists' forecasts and offered no evidence of building price pressures, the first increase in three months and the year/year rate ticking up to 1.6% didn't exactly convince bond traders that inflation is abating.

The yield on the 10-year note closed slightly higher at 5.21% as traders eventually opted to wait for tomorrow's CPI report to get a better inflation read for Fed policy direction. Nonetheless, a multitude of S&P industry groups attracting buyers, and eight of 10 sectors averaging gains of 0.7%, were more than enough to offset a slight 0.2% pullback in the heavily-weighted Financials sector.

Per usual, Goldman Sachs (GS 225.33 -8.31) handily beat analysts' expectations. However, given Goldman's first quarter blowout and record results from Lehman Brothers (LEH 78.82 +0.95) earlier in the week, shareholders were clearly expecting more than a paltry 1.0% year/year rise in Q2 profits.

Bear Stearns (BSC 149.50 +0.01) posting its first quarterly shortfall in six years was also a drag on a rate-sensitive sector still reeling from rising bond yields before bargain hunters eventually lifted it to breakeven on the day. Challenging comparisons and weakness in mortgage-related activity tied to subprime challenges, which contributed to our downgrade of Financials in mid April, were two of the reasons behind BSC's miss.

Among the biggest areas of support for the broader market was Energy. The sector surged 1.9% in conjunction with a 2.1% rise in oil prices ($67.65/bbl) that contributed to the belief the sector is in good position to be a notable contributor to aggregate earnings growth on the S&P 500.

Continued resilience on the part of transportation stocks in the face of surging energy prices was also commendable since logistics companies contribute notable influence within the Industrials sector (+0.7%).

As evidenced by the Nasdaq outpacing the major averages to the upside, strength across the board in Technology (+0.7%) was an even more influential source of support. The sector got its biggest boost from a 2.5% advance in Intel (INTC 23.23 +0.56), which lifted the Dow component and Briefing.com Active Portfolio holding to a new 52-week high. BTK +0.3% DJ30 +71.38 DJTA +1.5% DJUA +0.4% DOT +0.3% NASDAQ +17.10 NQ100 +0.56% R2K +0.54% SOX +1.2% SP400 +0.75% SP500 +7.30 XOI +2.0% NASDAQ Dec/Adv/Vol 1204/1807/1.97 bln NYSE Dec/Adv/Vol 1148/2147/1.44 bln