STOCK MARKET WATCH, Friday July 20

[ozymandius]

Source: DU

Friday July 20, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 552 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2387 DAYS
WHERE'S OSAMA BIN-LADEN? 2099 DAYS
DAYS SINCE ENRON COLLAPSE = 2060
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 July 19, 2007

Dow... 14,000.41 +82.19 (+0.59%)
Nasdaq... 2,720.04 +20.55 (+0.76%)
S&P 500... 1,553.08 +6.91 (+0.45%)
Gold future... 678.10 +4.40 (+0.65%)
30-Year Bond 5.12% +0.02 (+0.33%)
10-Yr Bond... 5.03% +0.02 (+0.36%)






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

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more Radical Fringe here


Read more: DU

[ozymandius]

1. Today's Market WrapUp

Gold Stocks -- Impending Breakout or Just Another Failure to Launch
BY MARTIN GOLDBERG, CMT

Since correcting off of a high of 400 made in the spring of 2006, the $HUI Gold Bugs Index has attempted to break above 370 on four separate occasions. But each time it was turned back. Now, it is trying to accomplish this feat once again. There is strong technical evidence to suggest that it will eventually accomplish this bullish breakout, but when this will happen is not quite clear. Tonight I wish to take an intermediate term technical look at the $HUI and illustrate the technical evidence that suggests a strong bullish upside trend is going to occur.

-cut-

Less obvious in terms of simple logic is the breakdown structure of long term trends. Whereas long term bull markets occur in 3 distinct up waves with 2 corrective waves in between, each of the 3 distinct up waves also break down into smaller components of 3 up waves with 2 corrective waves in between. In the case of Wave I in the gold bugs index, these 5 sub-waves are indicated in blue. Similarly less obvious in simple logic is the breakdown of the 2 corrective waves that tend to form in three sub-waves, labeled a, b, and c in blue. (The corrective waves tend to be more difficult to characterize compared to the waves that follow the long term trend.) It is my belief that gold stocks are in a long term bull market, and that we have only completed Wave I and corrective Wave II of the 5 waves. Long term Wave III (up) is now in progress since early summer of 2005. Within the Wave III sub-structure, we have only completed Wave 1 (up), and since spring of 2006, the gold bugs’ index has been in a corrective (down) pattern (Wave 2) within Wave III.

-cut-

Today’s Market

The $HUI finished today’s trading at 371, thereby breaking the illusive 370 barrier albeit, not yet decisively. Spot gold is at 677/ounce as I write this. Both gold and the market were up, and Bernanke told us for the second consecutive day that everything was A-okay as in sustained economic growth and tame inflation for the US economy. Although a concern, the subprime debacle according to Bernanke is not a big deal. IBM supplied the fuel to take the market higher while the Dow and S&P made all time highs. And what can be better than the background noise of paying homage to Dow 14,000? There is nothing one can say that is politically correct about the stock market except to get behind this roaring bull market and cheer! The trend is up and should be enjoyed by everyone. Just try to criticize this stock market party and you will get hung up there – first to dry and then burned in effigy. (You will then be deemed a contrarian indicator.) If you are a money manager, you will lose clients. If you are a newsletter writer, you will lose subscribers. (Hey, who cares, I’m neither.) While this is happening, the media and financial professionals have convinced everyone, including themselves, that valuations are quite reasonable at these levels, and there is no reason to think about the lack of dividends. Buyouts are a good thing of course, even though it is clear that insiders from most companies buying back shares are themselves strong net sellers of their company stock.

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

[ozymandius]

2. no gubbermint numbers today n/t

[Ghost Dog]

4. What a relief. 'Morning Ozzie! n/t

:-)

[ozymandius]

8. Thanks. And thanks to UpInArms for saving the day.

:toast: :hug:

The last thing I expected was for the morbidly huge AT&T to set things right. Yesterday I was told that a technician would need to come to my home to patch things up.

Wonder of wonders - my modem being reset restored the connection, perhaps after tech support did something on their end last night.

[UpInArms]

12. g'morning, Ozy!

So glad to have you back!

You were sorely missed by one and all :grouphug:

:hi:

[ozymandius]

18. Thank you!

:grouphug:

Though it was just a day without connectivity - it seemed much, much longer. Per our off-line conversation: I am shopping for a new computer. In human terms this computer would be about to enter the Third Grade.

:hi:

[Ghost Dog]

3. Asian Stocks Rise to Record on LG Electronics Profit, Metals

http://www.bloomberg.com/apps/news?pid=20601080&sid=ayNpgzF2omak&refer=asia

July 20 (Bloomberg) -- Asian stocks rose, pushing a regional benchmark to a record, after LG Electronics Inc. and Ranbaxy Laboratories Ltd. reported better-than-expected earnings, and metals prices climbed.

LG, Asia's No. 2 mobile-phone maker, jumped the most in 19 months. BHP Billiton, the world's largest miner, gained after copper prices climbed the most in a month. Nippon Steel Corp., Asia's biggest producer, posted its best two-day gain since September 2005.

...

The Morgan Stanley Capital International Asia Pacific Index added 0.9 percent to 160.07 at 3:37 p.m. in Tokyo, surpassing its previous record close of 159.50 on July 13. This week, it's gained 0.3 percent.

China's CSI 300 Index was the best-performing benchmark in the region, climbing 4.3 percent to its highest this month. All markets open for trading advanced, with key indexes in Australia, Hong Kong, Indonesia and South Korea all setting new highs.

Japan's Nikkei 225 Stock Average gained 0.2 percent. Honda Motor Co. gained after U.S. earnings reports damped concern a housing slump is eroding demand in the world's biggest economy.

/...

[Ghost Dog]

7. Japan Stocks Rise on Earnings Expectations; Nippon Steel Gains

http://www.bloomberg.com/apps/news?pid=20601101&sid=aidvlczuikKg&refer=japan

July 20 (Bloomberg) -- Japanese shares advanced, led by steelmakers and electronics manufacturers, after U.S. earnings reports damped concern a housing slump is eroding demand in the world's biggest economy.

Nippon Steel Corp. and Canon Inc. climbed on speculation their earnings will beat analyst estimates for the quarter ended June, as 60 percent of the 121 Standard & Poor's 500 companies to report so far have done.

``Steelmakers were up because of strong investor expectations that Japanese makers will report good results,'' said Naoki Fujiwara, who helps oversee $3.24 billion in investments at Shinkin Asset Management Co. in Tokyo. ``Earnings in the U.S. confirmed its economy has stable growth and that's raising speculation Japanese technology companies, many of which rely on U.S. sales, will report better earnings next week.''

Automakers including Honda Motor Co. advanced after parts supplier Riken Corp. said an earthquake-damaged factory will resume operations next week.

The Nikkei 225 Stock Average added 41.36, or 0.2 percent, to 18,157.93. The broader Topix index climbed 8.17, or 0.5 percent, to 1,776.17. A measure tracking steelmakers jumped 3.1 percent, the best performer among the 33 industry groups in the index.

Trading houses such as Mitsui & Co. rose after oil jumped to the highest since August 2006 and a measure of six metals traded on the London Metal Exchange, including copper and zinc, surged the most since June 11.

KDDI Corp. declined after the company said yesterday it will cut the price on its most basic monthly package by 50 percent. The move prompted rival Softbank Corp. to also announce a price cut.

/...

[ozymandius]

5. Oil prices extend rise

VIENNA, Austria - Oil prices rose Friday after news of new violence in southern Nigeria, where police said a Lebanese businessman was shot dead in his home in an apparent kidnapping attempt.

-cut-

Light, sweet crude for August delivery on the New York Mercantile Exchange rose 18 cents to $76.10 a barrel by midday in Europe.

The contract had risen 87 cents, or 1.2 percent, to close at $75.92 a barrel Thursday, after hitting an 11-month high of $76 right before the end of the trading day. A front-month contract last settled over $76 a barrel on Aug. 9.

The Nymex September crude contract, which becomes the front-month contract at the end of Friday trading in New York, was up 30 cents at $76.37 a barrel.

In London, Brent crude for September delivery advanced 23 cents to $77.90 on the ICE Futures exchange.

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

[ozymandius]

9. Gas price slide continues, futures mixed

NEW YORK - Gas prices fell more than a cent overnight, and gas and oil futures closed mixed on Thursday as investors tried to decipher a confusing picture of domestic gasoline production.

Oil briefly hit $76 a barrel for the first time in 11 months.

Gas futures stalled a day after they rose 9 cents a gallon on a surprise decline in inventories that didn't square with higher refinery utilization levels and a lingering sentiment that gas prices likely have peaked for the season.

Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill., called Wednesday's price jump an overreaction to the inventory data from the Energy Department's Energy Information Administration. He expects utilization levels will continue to grow as refineries return shuttered operations to service. That would translate to an inventory build next week.

http://news.yahoo.com/s/ap/20070719/ap_on_bi_ge/oil_prices_92

[Ghost Dog]

6. (Midday) European shares flat(ish) as tech losses weigh

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B9aff5f35%2Df822%2D4415%2D92a1%2D7db6ce0d3ea0%7D

European equities were flat on Friday as losses for technology and telecoms stocks offset gains in the mining and power sectors. Ericsson, the Swedish mobile phone equipment maker, was the worst performer on the Eurofirst 300 after it missed market forecasts with its second-quarter profit as its push into the multimedia market proved disappointing. The shares fell 4.1 per cent to SKr26.66. Meanwhile, Ericsson’s suggestion that it was taking market share from its rivals hit other shares in the sector. France’s Alcatel-Lucent fell 1.6 per cent to €10.03, while Finland’s Nokia shed 0.7 per cent to €21.45. SGS, the Swiss auditing company, was the best performing stock on the Eurofirst, rising 2.6 per cent to SFr1,495, after upgrades followed Monday’s better-than-expected results. Merrill Lynch upgraded the stock from ”neutral” to ”buy”, saying it was time for the company to use the estimated SFr1bn cash on its balance sheet to target earnings growth, either through acquisitions, buybacks or special dividends. This followed similar upgrades earlier in the week from Cheuvreux and Sal Oppenheim. By late morning in London, the FTSE Eurofirst 300 was flat at 1,618.54, Frankfurt’s Xetra Dax was down 0.3 per cent to 7,968.13, the CAC 40 in Paris lost 0.3 per cent to 6,046.31 and London’s FTSE 100 gained 0.1 per cent to 6,647.9.

[Ghost Dog]

51. Downbeat earnings weigh on European shares (Catching Cold?)

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=eurMktRpt&storyID=2007-07-20T154344Z_01_WEB5034_RTRIDST_0_MARKETS-EUROPE-STOCKS-URGENT.XML

FRANKFURT, July 20 (Reuters) - European shares fell on Friday, erasing gains from the previous session, after downbeat earnings weighed and as concerns over the U.S. housing sector regained momentum.

The pan-European FTSEurofirst 300 index <.FTEU3> unofficially closed down 1.16 percent at 1,599.63 points.

Around Europe, Germany's DAX index <.GDAXI> fell 1.46 percent, UK's FTSE 100 index .FTSE was down 0.83 percent and France's CAC 40 <.FCHI> dropped 1.79 percent.

Losses on the U.S. markets added to the weak performance in Europe, after Caterpillar (CAT.N: Quote, Profile , Research) and Google (GOOG.O: Quote, Profile , Research) posted disappointing earnings.

"It's essentially Caterpillar's disappointing results. With all the concerns over the U.S. construction and housing sector, it creates a little moment of panic. It revives the doubts on the performance of the U.S. economy," one trader said.

/..

[UpInArms]

10. dollar watch

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

Last trade 80.487 Change +0.082 (+0.10%)

US Dollar : Waiting for the Next Big Catalyst, What Could it Be?

http://www.dailyfx.com/story/bio1/US_Dollar___Waiting_for_1184880588731.html

As a big proponent of transparency, Federal Reserve Chairman Ben Bernanke had no surprises for the market when he delivered his testimony on the economy and monetary policy to the Senate today. The question and answer session continued to center on the problems in the sub-prime sector and Bernanke responded by reiterating the Fed’s growing concern that the problems in housing could get worse before they get better. He even went so far as to say that sub-prime losses could hit $50-100 billion. This concern is the main reason why the market did not react to the more optimistic minutes from last month’s monetary policy meeting. Bernanke’s take is a far more accurate and current account of how the Fed really feels. Despite a larger drop in leading indicators and a much weaker than expected Philly Fed manufacturing survey, the dollar failed to budge. This was due to the fact that oil prices continued to rise while jobless claims were much lower than expected last week. As long as the labor market holds steady, the economy could still recover. In the near term, the dollar looks prime for a breakout against both the Euro and Japanese Yen. What could cause the next big move? Housing and the Dow. With everyone focusing on the contagion effect of sub-prime problems, next week’s existing and new homes sales will be particularly important. Also, the Dow is struggling to stay above 14,000. If that proves to be unsurpassable resistance, then a reversal in US stocks could also lead to big movements elsewhere in the currency markets.

...more...

Chinese Yuan Rockets Higher On Record Growth

http://www.dailyfx.com/story/dailyfx_reports/top_fx_market_movers/Chinese_Yuan_Rockets_Higher_On_1184879456960.html

Chinese Yuan Rockets Higher On Record Growth
Economic data was bullish for the Chinese economy as it becomes evidently clear that policy makers will have to do far more in curbing the possibility of an overheating economy. For the quarter, overall growth surged to the highest level in 12 years, advancing by 11.9 percent. The figure overshot estimates of 11 percent growth and were coupled by healthy rates of output in the industrial production survey. Not a surprise for the market, the growth figures were widely supported by healthy consumer spending figures which topped at 16 percent for the month. Ultimately, traders continued to side with further speculation on a possible shift to a more flexible exchange rate regime in order to curb price increases which accelerated at an impressive 4.4 percent. Far above forecasts by policy makers, the consumer prices report suggests that the Chinese economy may be accelerating too far too fast. As a result, aggressive tightening is expected, bolstering a likely revaluation in the near term. Estimates pit the currency to gain by almost 3 percent in the next 6-12 months. The Chinese yuan gained considerably against the dollar, trading at 7.5635, and the British pound currently at 15.4995.

Fed’s Bernanke Notes China Development
Speaking for a second day in front of politicians on Capitol Hill, Chairman Ben Bernanke noted that it is in the best interest of China to allow the currency to float freely. Echoing sentiment from previous US figures like US Treasury Secretary Paulson, the Fed Chairman noted that without a freely floating currency, Chinese monetary policy remains non-existent. Bernanke additionally stated that with an artificially low currency, the Chinese economy will tend to be distorted. As a result, more attention and development should be targeting domestic demand and not the advancement of simply the export sector.

...more...

[UpInArms]

14. As Dollar Crumples, Tourists Overseas Reel (but it's just play money!)

http://www.nytimes.com/2007/07/19/business/worldbusiness/19dollar.html?ex=1342497600&en=0b4981eda155e865&ei=5088&partner=rssnyt&emc=rss

HEIDELBERG, Germany, July 17 — A day after Michael Kingsley arrived in this romantic university town, he was in no mood to savor the cobblestone streets, the half-timbered houses or the flower-bedecked windows — to say nothing of the camera-ready castle on the hill.

<snip>

For Americans visiting Europe this summer, the steep decline of the dollar against the euro and the British pound has made eye-popping prices a lamentable part of the traveler’s tale. (The Kingsley family’s hotel room in London was $500 a night; five bite-sized chocolates at Harrods cost $10.)

“It’s O.K.,” said Mr. Kingsley, 59, with a resigned laugh. “I’ll just have to work a few extra years to pay off this vacation.” His wife, Laura, did her best to soothe him. “It’s just play money,” she said.

By now, five summers after the dollar began its long swoon against the euro and the pound, American travelers are used to $5 cups of coffee and triple-digit dinner checks in Europe’s great capitals. But the dollar’s latest plunge — to $2.05 to the pound and to a record of $1.38 to the euro — has turned mere sticker shock into a form of suspended disbelief for many tourists.

For Kaelon Kroft, a custodian from San Bernardino, Calif., it was the cost of Coke that shocked him most in Paris. “We just paid 9.5 euros for a can of Coke at a cafe,” he said. “At our hotel, the bar was serving a glass of Coke for four euros.”

“That’s over five bucks,” his wife, Kristi, added. Actually, at the current exchange rate, it is a fizzy bubble or two over $5.52.



...more...

[UpInArms]

21. Dollar slides, stays near record low vs euro

http://news.yahoo.com/s/nm/20070720/bs_nm/markets_forex_corrected_dc

TOKYO (Reuters) - The dollar hovered near a record low against the euro on Friday due to continuing concerns about weakness in the U.S. housing market and its impact on the broader economy.

High-yielding currencies gained, with the New Zealand dollar hitting a 22-year high against the dollar and a 21-year high against the low-yielding yen, while the Australian dollar touched a 16-year high versus the Japanese currency.

The dollar limped after Federal Reserve Chairman Ben Bernanke on Thursday said that losses on subprime loans -- those to customers with poor credit -- could hit $100 billion and threaten consumer spending, while also reiterating that inflation is the central bank's biggest concern.

Bernanke's testimony to the U.S. Senate Banking Committee supported the market's view that the Fed is unlikely to lower interest rates from 5.25 percent this year.

Minutes from the central bank's June policy meeting were largely in line with market expectations, showing that officials see the housing sector as the biggest risk to growth and that core inflation is "relatively subdued."

...more...

[Ghost Dog]

29. Yen Trades Near Record Low Versus Euro as Carry Trades Increase

http://www.bloomberg.com/apps/news?pid=20601101&sid=ahn3b2wQ2lwU&refer=japan

July 20 (Bloomberg) -- The yen traded near a record low against the euro and a 16-year low versus Australia's dollar as gains in global stocks encouraged investors to borrow in Japan's currency to buy assets elsewhere.

The yen has dropped against all of the 16 most-active currencies this week as investors added to so-called carry trades, taking advantage of the Bank of Japan's 0.5 percent benchmark interest rate. A gain in the Standard & Poor's 500 Index to a record yesterday eased concern mortgage defaults will slow the U.S. economy.

``Yen weakness is manifest'' against all currencies, said Sue Trinh, a strategist at RBC Capital Markets in Sydney. ``There is pretty strong appetite for yield out there and the Japanese rate is causing people to look overseas.''

The yen traded at 168.79 per euro and 122.29 against the dollar at 8:15 a.m. in London. It's likely to fall to 170 per euro in the next three months, Trinh said. The currency dropped yesterday as U.S. stock indexes rose, with the Dow Jones Industrial Average ending above 14,000 for the first time.

Japan's currency fell to a record low of 168.95 per euro on July 13 and to 250.53 per pound on July 18, the weakest since July 1992. It touched 107.74 per Australian dollar, the lowest since 1991, and a 21-year low of 97.29 per New Zealand dollar.

Federal Reserve Chairman Ben S. Bernanke yesterday told the Senate Banking Committee the yen is a ``market determined exchange rate,'' which is the ``way to go.'' He also said the Bank of Japan is deciding monetary policy based on domestic conditions and he wouldn't recommend any policy changes to Japan.

Japan's overnight lending rate is the lowest among industrialized nations and compares with 4 percent in the euro zone, 5.25 percent in the U.S., 5.75 percent in the U.K. and 6.25 percent in Australia.

/...

[roamer65]

43. I really wonder if the Japanese are going to follow the dollar...

into oblivion. At some point the Japanese are going raise rates to defend the yen.

[Ghost Dog]

47. A Yen rate rise appears to have been signalled

for next month, I believe...

[Ghost Dog]

40. China raises interest rate, slashes interest income tax

http://news.xinhuanet.com/english/2007-07/20/content_6408388.htm
www.chinaview.cn 2007-07-20 23:46:53

BEIJING, July 20 (Xinhua) -- China announced Friday it will raise interest rates for the third time this year and slash interest tax for bank savings, one day after the release of strong first-half economic data.

China will raise one-year benchmark deposit and lending rates by 27 basis points to 3.33 percent and 6.84 percent respectively from July 21, the central bank said.

The move would "guide rational growth in lending and investment, adjust and stabilize inflationary expectations and maintain general price stability", the People's Bank of China (PBoC) said in a statement on its website.

Meanwhile, the State Council, or cabinet, announced Friday the reduction of tax on the interest on personal bank savings from 20 to five percent from Aug. 15. The tax was introduced in November 1999 to encourage domestic consumption.

The reduction in savings interest tax would increase earnings from bank savings and would slow rapid increases in investment and rising inflation, the State Council said in a news release.

Experts said the measures would help to slow down China's fast economic growth, rapid increases in fixed asset investment and inflation.

Cai Zhizhou, deputy director of the China Center for National Accounting and Economic Growth at Peking University, predicted slower economic growth in the second half due to a series of macro-control policies.

/...

[Ghost Dog]

46. Emerging Markets: Chinese Yuan Advances Along with Stronger Singapore Dollar Testing 1.5150

http://www.dailyfx.com/story/strategy_pieces/weekly_option_strategy/Emerging_Markets__Chinese_Yuan_Advances_1184945962661.html?engine=rss&keyword=article

Recap Of The Week’s Top Stories…

Economic data was bullish for the Chinese economy as it becomes evidently clear that policy makers will have to do far more in curbing the possibility of an overheating economy. For the quarter, overall growth surged to the highest level in 12 years, advancing by 11.9 percent. The figure overshot estimates of 11 percent growth and were coupled by healthy rates of output in the industrial production survey.

Chinese Yuan Rockets Higher On Record Growth

Economic data was bullish for the Chinese economy as it becomes evidently clear that policy makers will have to do far more in curbing the possibility of an overheating economy. For the quarter, overall growth surged to the highest level in 12 years, advancing by 11.9 percent. The figure overshot estimates of 11 percent growth and were coupled by healthy rates of output in the industrial production survey. Not a surprise for the market, the growth figures were widely supported by healthy consumer spending figures which topped at 16 percent for the month. Ultimately, traders continued to side with further speculation on a possible shift to a more flexible exchange rate regime in order to curb price increases which accelerated at an impressive 4.4 percent. Far above forecasts by policy makers, the consumer prices report suggests that the Chinese economy may be accelerating too far too fast. As a result, aggressive tightening is expected, bolstering a likely revaluation in the near term. Estimates pit the currency to gain by almost 3 percent in the next 6-12 months.

<chart>

Europe’s Trade Balance Widens With China

Surprising officials, it was revealed today that Europe’s trade gap with China widened in the first four months of the year by as much as 29 percent to 35.2 billion euros from 27.2 billion in the year earlier comparison. In detail, imports from China grew by 23 percent in the period as exports to China rose by less, rising only 12 percent. Bearish for the Euro, the findings will further fuel recent pleas by French President Sarkozy of global trade partners to allow their currencies to weaken, helping to take speculative pressure off of the Euro as an appreciated single currency has dampened the competitiveness of Europe’s exports. “The problem isn’t the value of the Euro, but the value of other currencies…France wants to put an end to monetary dumping which leads some currencies in the world to be managed in ways that have nothing to do with the market,” Sarkozy noted in a meeting with German Chancellor Merkel earlier this week. Incidentally, Chancellor Merkel has recently come round backing the notion and stating that the G8 nations “must keep an eye” on current yuan exchange rates.

/...

[roamer65]

49. They're getting real close to a renminbi float, IMHO.

[Ghost Dog]

42. Dollar slump sends euro to all time high

http://www.businessworld.ie/livenews.htm?a=1781071;s=rollingnews.htm
Friday, July 20 16:05:48

The euro was at a fresh all time high after the dollar came under renewed pressure amid ongoing concerns about the US housing market.

The euro reached a peak of USD1.3841 while the pound rose to a fresh 26-year high of USD2.0570.

'Credit concerns, rating reviews, yields tumbling; it has been one-way traffic against the dollar in recent minutes and euro/dollar has rallied up a fresh all time high,' said Matthew Foster-Smith at Thomson IFR Markets.

The concerns over troubles in the subprime lending sector have prompted losses on the US DJIA index of close to 1 pct, with 10-year US government bond yields also dropping sharply.

Earlier today, Standard amd Poor's Ratings Services lowered its ratings on 93 tranches from 75 US synthetic collateralised debt obligations (CDOs) of asset-backed securities, following a review of CDO transactions with exposure to US residential mortgage-backed securities

/.

Watch on Swiss Franc (CHF), Pound Sterling (GBP)

[Ghost Dog]

48. Dollar Drops to Record Low Versus Euro on Subprime Loan Concern

http://www.bloomberg.com/apps/news?pid=20601083&sid=a_PJg5W86VFE&refer=currency
By Min Zeng

July 20 (Bloomberg) -- The dollar fell to a record low versus the euro and headed for a sixth straight weekly drop as concern increased that losses in subprime mortgages will worsen a slowdown in U.S. housing and curb economic growth.

The currency also tumbled versus the yen as investors exited riskier bets. Standard & Poor's cut ratings on European collateralized debt obligations and gauges of investor appetite for corporate bonds and loans fell. Federal Reserve Chairman Ben S. Bernanke said yesterday there will be ``significant financial losses'' on mortgages given to people with poor credit.

``The dollar is in a bear market,'' said Paresh Upadhyaya, who helps manage $29 billion in currency assets at Putnam Investments in Boston. ``The concern is that the credit issue will weigh on the corporate sector and hurt consumer spending and the U.S. growth will get hit.''

The dollar dropped to $1.3835 per euro at 12:05 p.m. in New York from $1.3804 late yesterday, and touched $1.3843, the weakest since the euro's January 1999 debut. It has lost 0.38 percent this week. The U.S. currency's prior record low was $1.3833 on July 18. The dollar fell to 121.14 yen from 122.01 yen yesterday, the lowest since June 8.

The U.S. currency slumped to 79.92 U.S. cents per New Zealand dollar, the weakest since the central bank allowed the currency to trade freely in 1985. The dollar dropped to a 26- year low of $2.0587 per pound and touched 88.34 U.S. cents per Australian dollar, the lowest since 1989.

Standard & Poor's cut credit ratings on 14 portions of European collateralized debt obligations, nine of which it said may be cut again. U.S. stock benchmarks dropped. Treasuries rose, pushing the benchmark 10-year note's yield to the lowest in six weeks as investors sought safety in government debt.

`Weighing' on Dollar

``The subprime issue is still weighing on the dollar,'' said Matthew Kassel, director of proprietary trading at ING Financial Markets LLC in New York. ``The fallout of the subprime market is not a one-week issue.''

The LCDX, a two-month-old index tied to the loans of 100 companies with high-yield, high-risk ratings dropped 0.6 to 94.7 as of 9:58 a.m. in New York, according to Goldman, Sachs & Co. In Europe, the iTraxx LevX Index of contracts on loans to 35 companies dropped 1.25 to 96.5, the lowest since it began trading in October, according to Deutsche Bank AG.

The yen rebounded as losses in equities prompted investors to pare holding of riskier assets funded by loans in Japan, in the so-called carry trade.

The Japanese currency rose to 167.59 per euro from 168.44 per euro yesterday. It hit a record low of 168.95 on July 13. The Japanese currency gained against all 16 major currencies tracked by Bloomberg.

/...

[ozymandius]

11. Consumer bankruptcy rate up in 3 states

WASHINGTON - Almost two years after lawmakers amended the U.S. Bankruptcy Code to reduce filing rates, several regions in the Southeast continue to see elevated numbers of consumer bankruptcy cases, a phenomenon some experts attribute in part to local culture.

Bankruptcy numbers over the past few months appear to be slowing down or leveling off in many regions. More than 73 percent of the nation's federal court districts saw bankruptcy filings drop between May and June, according to Jupiter eSources, a company that tracks bankruptcy data. But bankruptcies continue to climb or remain elevated in the three highest-filing states in the country — Tennessee, Georgia and Alabama.

In Tennessee, 5.8 residents out of every 1,000 file for bankruptcy on an annual basis, compared with the national average of 2.52 per 1,000. In Georgia and Alabama, the rates are 4.87 and 4.77, respectively.

Some experts say the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 may have little effect on filing rates in states with chronically high bankruptcy rates. Economic and social factors such as low paying jobs and high divorce rates often lead to financial hardship, but local bankruptcy experts say the sheer frequency of filings may also be whittling down the social stigma of filing.

http://news.yahoo.com/s/ap/20070720/ap_on_bi_ge/consumers_bankruptcy

[kineneb]

34. new law changed little for the low-income filers

We know this because we just received the Final Decree for our Ch. 7 filing several weeks ago. The "middle income" people were the ones hit hardest by the law change. For us, it added the (really stupid) "counseling" part, but that was about the only difference. Oh, and we filed for medical reasons- Hubby went on disability due to renal failure/dialysis.

There are only two classes of dialysis patients/families: the very rich and everybody else- who are living at poverty level.
-paraphrase from a dialysis support forum

[AnneD]

59. What lame brained reporting and conclusions....

The causes of bankruptcy have been and still remain-catastrophic health care costs, divorce and unemployment. I'd personally add supressed wages and underemployment, but that is just me.

The bankruptcy bill that was passed did nothing. Now, pass a comprehensive health care coverge plan and minumn wage laws and tax breaks that favour local manufacturing and penalize overseas outsourcing and I think that will help 2 of the 3 root causes.

Tie religion into it is a crock of shit. Yes you ask for mercy in extreme cases, but there is very much a stigma to declaring bankruptcy. A better conclusion would be that the average worker has little if any bargining power, no workers rights, low wages,and almost non existant consumer protection. They have always been right to work states. To my mind-that is far more significant.

[UpInArms]

13. Subprime losses could hit $100 billion: Bernanke

http://news.yahoo.com/s/nm/usa_fed_bernanke_dc

WASHINGTON (Reuters) - U.S. Federal Reserve Chairman Ben Bernanke said on Thursday that subprime mortgage losses could hit $100 billion and threaten consumer spending, but he sought to reassure lawmakers that the central bank was working quickly to strengthen lending regulations.

"The credit losses associated with subprime have come to light and they are fairly significant," Bernanke told the Senate Banking Committee in a second day of testimony on the Fed's twice-yearly economic report.

"Some estimates are in the order of between $50 billion and $100 billion of losses associated with subprime credit problems," he said, referring to a segment of the mortgage market that caters to borrowers with shaky credit.

That figure may sound large, but it would represent a tiny fraction of the $56.2 trillion in U.S. household net worth. Still, many investors have worried that problems in the subprime sector could spill over into other credit markets.

In his prepared remarks, Bernanke acknowledged those concerns but pointed out that while credit spreads on lower-quality corporate debt had widened somewhat, they remain near the low end of their historical ranges. He also said inflation remained the Fed's primary concern.

...more...

[texpatriot2004]

15. K & R nm

[Buttercup McToots]

16. Is it? It’s Official: The Crash of the U.S. Economy has begun

http://www.globalresearch.ca/index.php?context=va&aid=5964

It’s Official: The Crash of the U.S. Economy has begun

by Richard C. Cook

Global Research, June 14, 2007

snip>
It’s official. Mark your calendars. The crash of the U.S. economy has begun. It was announced the morning of Wednesday, June 13, 2007, by economic writers Steven Pearlstein and Robert Samuelson in the pages of the Washington Post, one of the foremost house organs of the U.S. monetary elite.
Pearlstein’s column was titled, “The Takeover Boom, About to Go Bust” and concerned the extraordinary amount of debt vs. operating profits of companies currently subject to leveraged buyouts.
In language remarkably alarmist for the usually ultra-bland pages of the Post, Pearlstein wrote, “It is impossible to predict when the magic moment will be reached and everyone finally realizes that the prices being paid for these companies, and the debt taken on to support the acquisitions, are unsustainable. When that happens, it won't be pretty. Across the board, stock prices and company valuations will fall. Banks will announce painful write-offs, some hedge funds will close their doors, and private-equity funds will report disappointing returns. Some companies will be forced into bankruptcy or restructuring.”

snip>
Among those poised to profit from the crash is the Carlyle Group, the equity fund that includes the Bush family and other high-profile investors with insider government connections. A January 2007 memorandum to company managers from founding partner William E. Conway, Jr., recently appeared which stated that, when the current “liquidity environment”—i.e., cheap credit—ends, “the buying opportunity will be a once in a lifetime chance.”
The fact that the crash is now being announced by the Post shows that it is a done deal. The Bilderbergers, or whomever it is that the Post reports to, have decided. It lets everyone know loud and clear that it’s time to batten down the hatches, run for cover, lay in two years of canned food, shield your assets, whatever.
Those left holding the bag will be the ordinary people whose assets are loaded with debt, such as tens of millions of mortgagees, millions of young people with student loans that can never be written off due to the “reformed” 2005 bankruptcy law, or vast numbers of workers with 401(k)s or other pension plans that are locked into the stock market.
snip>
Key to what is going on is that the Federal Reserve is refusing to follow the pattern set during the long reign of Fed Chairman Alan Greenspan in responding to shaky economic trends with lengthy infusions of credit as he did during the dot.com bubble of the 1990s and the housing bubble of 2001-2005. This time around, Greenspan’s successor, Ben Bernanke, is sitting tight. With the economy teetering on the brink, the Fed is allowing rates to remain steady. The Fed claims their policy is due to the danger of rising “core inflation.” But this cannot be true. The biggest consumer item, houses and real estate, is tanking. Officially, unemployment is low, but mainly due to low-paying service jobs. Commodities have edged up, including food and gasoline, but that’s no reason to allow the entire national economy to be submerged.
snip>
So what is really happening? Actually, it’s simple. The difference today is that China and other large investors from abroad, including Middle Eastern oil magnates, are telling the U.S. that if interest rates come down, thereby devaluing their already-sliding dollar portfolios further, they will no longer support with their investments the bloated U.S. trade and fiscal deficits.

It is truly staggering that none of the “mainstream” political candidates from either party has attacked this subject on the campaign trail. All are heavily funded by the financier elite who will profit no matter how bad the U.S. economy suffers. Every candidate except Ron Paul and Dennis Kucinich treats the Federal Reserve like the fifth graven image on Mount Rushmore. And even the so-called progressives are silent. The weekend before the Perlstein/ Samuelson articles came out, there was a huge progressive conference in Washington, D.C., called “Taming the Corporate Giant.” Not a single session was devoted to financial issues.
snip>
What is likely to happen? I’d suggest four possible scenarios:
1. Acceptance by the U.S. population of diminished prosperity and a declining role in the world. Grin and bear it. Live with your parents into your 40s instead of your 30s. Work two or three part-time jobs on the side, if you can find them. Die young if you lose your health care. Declare bankruptcy if you can, or just walk away from your debts until they bring back debtor’s prison like they’ve done in Dubai. Meanwhile, China buys more and more U.S. properties, homes, and businesses, as economists close to the Federal Reserve have suggested. If you’re an enterprising illegal immigrant, have fun continuing to jack up the underground economy, avoid business licenses and taxes, and rent out group houses to your friends.
2. Times of economic crisis produce international tension and politicians tend to go to war rather than face the economic music. The classic example is the worldwide depression of the 1930s leading to World War II. Conditions in the coming years could be as bad as they were then. We could have a really big war if the U.S. decides once and for all to haul off and let China, or whomever, have it in the chops. If they don’t want our dollars or our debt any more, how about a few nukes?
3. Maybe we’ll finally have a revolution either from the right or the center involving martial law, suspension of the Bill of Rights, etc., combined with some kind of military or forced-labor dictatorship. We’re halfway there anyway. Forget about a revolution from the left. They wouldn’t want to make anyone mad at them for being too radical.
4. Could there ever be a real try at reform, maybe even an attempt just to get back to the New Deal? Since the causes of the crisis are monetary, so would be the solutions. The first step would be for the Federal Reserve System to be abolished as a bank of issue and a transformation of the nation’s credit system into a genuine public utility by the federal government. This way we could rebuild our manufacturing and public infrastructure and develop an income assurance policy that would benefit everyone.
The latter is the only sensible solution. There are monetary reformers who know how to do it if anyone gave them half a chance.

[Joanne98]

20. That's a really good article!

[ozymandius]

23. some good things here

So what is really happening? Actually, it’s simple. The difference today is that China and other large investors from abroad, including Middle Eastern oil magnates, are telling the U.S. that if interest rates come down, thereby devaluing their already-sliding dollar portfolios further, they will no longer support with their investments the bloated U.S. trade and fiscal deficits.

This statement is a fundamental truth. For years it has been rhetorically asked: "How can China remain an economic powerhouse without the U.S. consumer?" These days it has now become a question of: "How can the U.S. remain an economic powerhouse without China?" China has taken care of itself. The United States, under its idiotic financial stewardship of the last twenty years, has allowed itself to be driven into insolvency for the sake of cheap products and boondoggle defense spending, among other inept expenditures.

I will take issue with this column in one regard. The acceleration from where we are to the suspension of the Bill of Rights to martial law and absolute dictatorship is incredibly abbreviated. This summary takes no account of the economy being propelled under its own momentum. Or whatever faction of the economy you look at: barter, off-the-books cash transactions, in-kind labor, etc.

Consider that every economic meltdown since the Great Depression has taken about two years to percolate through the rest of the economy to the point that you and I feel the result.

[DemReadingDU]

26. 'Made in China'

Just about anything and everything today either is either made in China, or has a component that was made in China. Really, there is no way to totally avoid China. But what happened to the stigma that identified 'Made in China' as cheap. It seems today, that cheap is the bottom line - buy it, it's cheap, it's low cost. If it breaks, buy another one.

But growing up in the 50's, whenever we saw toys, usually trinkets, that were made in China, and we knew that it was made of inexpensive plastic and would break soon, and to AVOID those kinds of toys, or clothes, or tools, or appliances. The mindset in the 50's was that American products were good and durable, but products made in China weren't worth having.

Globalization changed all this. And a few people have become very wealthy selling out our country. But heck, if you want low prices, go to Wal-Mart. :(

[InkAddict]

31. Percolate(?) - Dump it and start a new pot NOW!

Consider that every economic meltdown since the Great Depression has taken about two years to percolate through the rest of the economy to the point that you and I feel the result.

Well..., someone, the current host (that would be the */Cheney Admin) turned on the coffee pot that Nixon/Reagan had all set up for morning, and it's been a long night. Percolation has been in progress for a long time-- >20 years. I can testify that this family is indeed one drip in the cracked pot prepared with ground up American jobs, poisonous healthcare, and abusive banking/taxing reforms.

Politically, we even allowed our perverted hosts to shower and change before breakfast through the Clinton years. While he did a great job keeping everyone smoozing while the pot was brewing, they came back fresh and full of bad ideas to share with Middle Class America and the poor and, after digging a still deeper pit in the ground, they are now cleaning up before the great feast on America, It also appears as though the "respite host" family might get the nod to spell the crooks again!

Is it time to dump the fascist carafe, buy one that's not cracked, and compost the old grounds in a soil that's grown fallow. Better yet--ask Lady Liberty (step up, Nancy!)to pull the plug, wipe up the spills, and start a new pot for the People! Unfortunately, we can only hope it perks quicker and tastes better...(I've got doubts I'll be around to get a cup though)

Note to analogy: Oh, and bar the room where the cognac and cigars are taken after coffee with the press club. It's just not healthy!

[DemReadingDU]

24. The Takeover Boom, About to Go Bust - Steven Pearlstein

from
6/13/07 “The Takeover Boom, About to Go Bust” Steven Pearlstein

To understand why there's a credit bubble, how it's inflating the price of stocks and what it will mean for you when it bursts, let's consider the acquisition of Avaya, a large telecommunications equipment maker, announced last week by two private-equity firms, Texas Pacific Group and Silver Lake Partners.

Avaya is expected to post revenue of about $5.4 billion this year. It has virtually no debt and has $825 million in the bank. Operating earnings -- profit before counting things like interest payments, taxes, depreciation and amortization -- are expected to reach $700 million. And if that's correct, it means the price being paid for Avaya, $8.2 billion, is 12 times operating profit, making it one of this season's richest deals.

What's driving such high valuations is cheap debt, and plenty of it. We don't know yet how the all-cash purchase of Avaya will be financed, but if it follows the pattern of other recent buyouts, the new owners will take on at least $6 billion in debt. Given the junk-bond rating that has already been assigned to the deal, that is likely to work out to an average interest rate of about 8 percent, along with the obligation to pay back 1 percent of principal every year. Add it all together, and the new, improved Avaya will have to pay about $540 million more a year in debt service than it does now.

more...
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/12/AR2007061201801.html

[UpInArms]

17. Dow Jones director quits to protest News Corp deal

http://www.reuters.com/article/businessNews/idUSWEN948920070720?feedType=RSS&sp=true

NEW YORK (Reuters) - A director on the board of Dow Jones & Co Inc (DJ.N: Quote, Profile, Research) has resigned because he could not support its endorsement of a $5 billion takeover offer from Rupert Murdoch's News Corp. (NWSa.N: Quote, Profile, Research)

Dieter von Holtzbrinck said on Thursday that Murdoch's $60-per-share offer was "very generous in financial terms" but he was concerned that Dow Jones's journalistic values would "strongly suffer" if the sale goes through.

The fate of the deal is now in the hands of the Bancroft family, which controls Dow Jones through voting shares.

Some analysts said von Holtzbrinck's vocal opposition could sway some members of the family when they meet on Monday to discuss whether to allow Dow Jones properties like The Wall Street Journal to be added to Murdoch's media empire.

"If there are Bancrofts who are wavering, I think that would be a factor in pushing them to vote 'no,'" said veteran newspaper analyst John Morton. "I'm sure some of the Bancrofts had probably wished he'd stayed there to vote 'no.'"

Von Holtzbrinck is the first non-family director to publicly oppose Murdoch's bid for Dow Jones, which also publishes the Barron's investor's newspaper, the MarketWatch.com financial news site and Dow Jones Newswires.

...more...

[UpInArms]

19. Caterpillar 2Q profit falls 21 percent

http://news.yahoo.com/s/ap/20070720/ap_on_bi_ge/earns_caterpillar

PEORIA, Ill. - Caterpillar Inc., one of the world's largest construction equipment makers, said Friday its second-quarter profit fell 21 percent, hurt by weakness in North American construction markets.

The results missed Wall Street expectations, and Caterpillar shares skidded 4 percent lower in premarket trading.

Caterpillar earned $823 million, or $1.24 per share, in the three months ended June 30, down from $1.05 billion, or $1.52 per share during the same period last year.

Revenue rose 7 percent to $11.36 billion from $10.61 billion last year.

...more...

[UpInArms]

22. TREASURIES-10Y yield falls to 6-week low on credit concerns

http://www.reuters.com/article/bondsNews/idUSNYG00063620070720

NEW YORK, July 20 (Reuters) - The benchmark 10-year Treasury note's yield slipped to a six-week low on Friday on worries about riskier nongovernment bonds and as futures pointed to a lower opening for stocks on Wall Street.

U.S. government bonds tap a safe haven bid out of more volatile assets when stocks and corporate bonds sell off.

The benchmark 10-year note's yield dipped briefly below 4.984 percent <US10YT=RR> to the lowest level since June 7th. Bond yields and prices move inversely.

[UpInArms]

25. 9:35 EST bailing out before the weekend?

Dow 13,953.91 down 46.50 (0.33%)
Nasdaq 2,710.00 down 10.04 (0.37%)
S&P 500 1,550.47 down 2.61 (0.17%)
10-Yr Bond 5.00% up 0.028

NYSE Volume 335,126,000
Nasdaq Volume 224,054,000

08:30 am : S&P futures vs fair value: -5.6. Nasdaq futures vs fair value: -10.8. A negative bias persists in early action as evidenced by both the S&P 500 and Nasdaq 100 futures languishing well below fair value. Technology, the market's saving grace yesterday, looks to be the thorn in its side today following disappointments from two of the sector's bellwethers (e.g. MSFT, GOOG).

Fortunately for the bulls, the bulk of news tied to the more influential Financial sector is positive. Citigroup (C) reported an 18% jump in Q2 profits, Wachovia (WB) also posted record results, and the 10-year yield has slipped to as low as 4.97% this morning. There is also no potentially troubling economic data scheduled today; however, St. Louis Fed President Poole, who is also a voting member, will be speaking about the subprime mortgage market at 11:00 ET.

08:00 am : S&P futures vs fair value: -5.7. Nasdaq futures vs fair value: -12.0. Early indications are pointing to a sharply lower open for the cash market. Google (GOOG) missing expectations for just the second time since its 2004 IPO and Microsoft (MSFT) merely matching forecasts, after a long history of upside surprises, set the negative tone last night and leave investors again questioning the tech sector's optimistic growth prospects.

[Viva_La_Revolution]

27. Great article on the Housing bubble posted in Economics by Joanne98

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=114&topic_id=26235&mesg_id=26235

[Buttercup McToots]

28. $80.25 at 10 am

:crazy:

[DemReadingDU]

37. $80.06 at 11:45am

http://www.kitco.com/market/index.html


:wow:

[Ghost Dog]

30. Mogambo: The Market Price of Road Kill

http://dailyreckoning.com/Writers/Mogambo/DREssays/MG071907.html

<snip>...

-- Peter Schiff of Euro Pacific Capital writes, "In current theory, the excess cash piling up around the world is like manna from heaven. Don't believe the hype. Liquidity is merely a euphemism for inflation. Asset prices, including stocks, are simply rising to reflect the diminished value of the currencies in which they are traded. Wealth is not being created, merely re-priced."

Well, I don't know where Mr. Schiff lives, but around here, it's not wealth that is being re-priced, but poverty. As the inflation in the prices of everything continues to outstrip "income after taxes and deductions", standards of living are being eroded because people can't buy as much stuff as they used to; their relatively static stream of discretionary income has lost buying power against rapidly rising prices.

For example, from the Financial Times we read that inflation is finally affecting food, and that Hovis bread said it was "preparing to raise bread prices for the second time in six months. The pending increase - which the company attributed to rising wheat costs - is merely the latest in a series of price increases food and drink companies have been trying to pass on to consumers this year. The series has seen costs of making bread, beer, yoghurt and chocolate as well as dozens of others packaged food products become increasingly expensive."

I know what you are thinking. You are thinking, "Who cares about bread? I don't need no stinkin' bread! I can eat pizza!", which is wrong, whereas you would have been correct if you had instead thought "I don't need no stinkin' bread! I can eat the bodies of dead animals that I find alongside the highway!"

And indeed you could, as the current market price of road kill is still a very economical zero, which may explain why it is not included in the Lehman Brothers' ingredients cost index, which "covers cocoa, coffee, oats, tea, soyabeans and milk, among other commodities and which is based on spot rates." This index, in case you were wondering, "rose 14.9% in the first half of the year", which "follows a 16.5% increase in the second half of 2006." Yikes! Prices of foodstuffs are up over 30% in twelve months? Yow!

And what is the biggest gainer? "The biggest increase has occurred in powdered milk prices. These have nearly doubled compared with the same period a year ago. Barley prices have also shot up 53%, while corn prices are up 68%."

/more...

[InkAddict]

33. Road kill on the menu sounds icckkyyy...Does Mogambo suggest...

heading off to the stocked preserve, flushing the game, being careful not to shoot the other parties in the hunt (but, if it happens, hey, a simple apology will do--no harm done except to your face?)and everything's good - potted hare and pheasant in a couple hours?

or use of the energy-efficent sling shot?

Seems fire lines have a way of getting out of control (The shoot 'em as they come out of the forest approach) Here again, a lot of the game might run the wrong direction in a great Stampede or over the cliff????

Hmmm....Cut bait?

Going vegan's expensive too.

Road Kill it is...though those in the wrong place/wrong time are just a fraction of what's out there and they have no souls anyway? As all the hunters dive for the same splats on the pavement? Will that be enough for the table? There's a lot to feed.

Gotta put food on the family...:shrug:

[kineneb]

38. Mogambo only half right

the dude has never been really poor or he would not decry "entitlements"... wonder what he would do if he were disabled and had no assistance? Become roadkill?

[Ghost Dog]

53. Yeah, I'm afraid Mogambo's like that. A 'libertarian', I guess it's called over there.

He's only lukewarm, and only occasionally, about decrying USG military spending, what's more.

...But, otherwise, his economics appear to be mostly sound; and his sense of humor is nicely cutting...

[UpInArms]

32. 10:40 EST down-dated numbers and blather

Dow 13,878.72 121.69 (0.87%)
Nasdaq 2,692.02 28.02 (1.03%)
S&P 500 1,541.61 11.47 (0.74%)
10-Yr Bond 4.939% 0.089

NYSE Volume 1,010,513,000
Nasdaq Volume 661,790,000

-8=10:30 am : Stocks continue to tumble, pushing the indices to fresh session lows. The Dow is now off more than 100 points, paced by the 8% bloodletting in Caterpillar (CAT 79.82 -7.16) and being dragged lower amid a reversal in one of the price-weighted index's most expensive names, Boeing (BA 102.37 -0.11).

Adding to the market's recent struggles have been the Dow, S&P 500 and Nasdaq's inability to find support above key technical levels of 13925, 1548 and 2699, respectively. DJ30 -114.44 NASDAQ -26.54 SP500 -10.23 NASDAQ Dec/Adv/Vol 2050/597/540 mln NYSE Dec/Adv/Vol 2202/736/492 mln

10:00 am : The major averages are extending their reach to the downside as the bulk of industry leadership slips further into negative territory. Of the nine sectors trading lower, Industrials paces the way with a 0.9% decline as Caterpillar's (CAT 79.77 -7.20) huge shortfall earmarks Construction & Farming (-4.5%) as today's biggest laggard.

Technology (-0.9%) isn't too far behind, surrendering more than half of yesterday's 1.3% gain. Not surprising, Internet Software & Services (-3.8%) ranks as today's second worst performing S&P industry group as Google's (GOOG 513.50 -35.09) quarterly let down prompts several analysts to lower price targets.

Energy is the only sector catching a bid; but its measly 0.2% gain is being dwarfed by broad-based weakness. Oil & Gas Equipment (+2.0%) is today's best performing group after Schlumberger (SLB 95.44 +1.99) posted a 47% surge in Q2 earnings while Oil & Gas Storage (+1.9%) is a close second after Williams Cos. (WMB 35.40 +1.01) approved a $1.0 bln buyback.DJ30 -89.10 NASDAQ

and a peek at the tumbling buck

Last trade 80.353 Change -0.052 (-0.06%)

[UpInArms]

35. Poole the Tool goes off the reservation: Sounds alarm on Subprime

http://www.reuters.com/article/bondsNews/idUSWAT00790820070720

ST. LOUIS, July 20 (Reuters) - St. Louis Federal Reserve President William Poole said on Friday the U.S. central bank cares about the stress in the subprime mortgage market in part because the market is large enough to impact the overall economy.

"The non-prime mortgage market -- with 2006 originations of about one trillion dollars -- clearly is large enough to affect aggregate homebuilding activity and consumer spending," Poole told a real estate group

Poole, however, said nothing about how stresses evident in the subprime mortgage market would impact the broader economy.

[UpInArms]

36. P Morgan sees rate reset, refi problems looming

http://www.reuters.com/article/bondsNews/idUSN2036032420070720

NEW YORK, July 20 (Reuters) - Many U.S. homeowners will have more problems as troubled loans reset at higher rates and it becomes more difficult to refinance over the next 18 months, J.P. Morgan Chase & Co. (JPM.N.: Quote, Profile, Research) said on Friday.

"We are really heading into the reset storm," said J.P. Morgan analyst Chris Flanagan. "We are on the cusp of that."

Flanagan, J.P. Morgan's global head of asset-backed securities and collateralized debt obligation research, spoke during a conference call with clients on Friday.

Flanagan also forecast more rating downgrades of ABS and ABS CDOs over the next six to 12 months.

...more...

[DemReadingDU]

39. White Paper on the Housing Market's Problems

Mike Larson: I don't pretend to have all the answers. I don't think anyone does. But clearly, regulators and policymakers are focused like a laser on these issues. Hopefully, the paper we've just published will help them navigate these difficult times. If you feel so inclined, you can read more at the Weiss Group links.
http://interestrateroundup.blogspot.com/2007/07/housing-paper.html

How Federal Regulators, Lenders, and
Wall Street Created America’s Housing Crisis
Nine Proposals for a Long-Term Recovery
http://www.weissgroupinc.com/whitepaper1/ summary

full white paper, 66 pages
http://www.weissgroupinc.com/whitepaper1/Housing_white_paper.pdf

note: recommended by bonddad
http://bonddad.blogspot.com/2007/07/great-paper-on-housing-markets-problems.html

[DemReadingDU]

41. Something stinks out there...

another from Mike Larson:
You can see it in the action in Treasuries. Bond prices are rising sharply, yields are falling sharply, despite ostensibly poor fundamental events, like Ben Bernanke's delivery of hawkish testimony on inflation.

You can see it in the dollar. It's been falling for a while on subprime spillover concerns. Now, the Dollar Index is plunging through its 2004 low, leaving its April 1995 low at 80.05 as the next level of support. Another index of the dollar's value -- the U.S. Trade Weighted Major Currency Index -- is at its lowest level since 1971, when the index was conceived.

You can see it in the financial stocks, which have been getting beaten with the ugly stick for weeks.

You can see it in the stock IPO and bond markets, which are seeing more postponed deals and poorly performing deals.

Is there something ugly lurking out there? Is this the wholesale repricing of risk we've all been afraid of, but somehow managed to keep avoiding? Unclear. But judging by the smell of napalm in the air, it could be. Time will tell.

http://interestrateroundup.blogspot.com/2007/07/something-stinks-out-there.html

If you click on this link, you will find embedded links to other articles.

[roamer65]

45. Yup... the ugly out there is a massive dollar crisis.

We break the 78-80 resistance level on the dollar index and we're in uncharted waters.

[ret5hd]

50. looks like the $'s support at 80.05 has been broken:

[ozymandius]

44. lunchtime check-in

I guess folks just don't feel like holding onto stocks over the weekend. :eyes:
12:08
Dow 13,837.50 Down 162.91 (1.16%)
Nasdaq 2,679.26 Down 40.78 (1.50%)
S&P 500 1,533.04 Down 20.04 (1.29%)
10-Yr Bond 4.943% Down 0.085
NYSE Volume 1,730,224,000
Nasdaq Volume 1,138,887,000

11:30 am : The major averages continue to hit fresh session lows are buyers continue to head for the exits. Of the 10 sectors now trading lower, half are down more than 1.0% with a now 1.7% sell-off in Financials really taking a toll on the broader market. The S&P 500's most heavily weighted sector is now down 3.4% for the week, paced by a five-day losing streak in Investment Banks (-2.8%). The latter now ranks among today's worst performers.

On a positive note, bonds continue to attract buyers, which has pushed yields lower across the curve. The yield on the 10-year note was as low as 4.92% and down nine basis points about an hour ago. However, the flight-to-quality bid in Treasuries more than offsets the welcome decline in borrowing costs that typically bodes well for rate-sensitive areas like Financials. DJ30 -145.08 NASDAQ -32.95 SP500 -15.09 NASDAQ Dec/Adv/Vol 2077/729/854 mln NYSE Dec/Adv/Vol 2261/792/750 mln

[Buttercup McToots]

52. $80.13... at 1:35

Geeze...I go to the grocery store and the dow drops 200...

[ozymandius]

54. 2:09

Dow 13,883.27 Down 117.14 (0.84%)
Nasdaq 2,695.18 Down 24.86 (0.91%)
S&P 500 1,540.87 Down 12.21 (0.79%)
10-Yr Bond 4.946% Down 0.082
NYSE Volume 2,510,663,000
Nasdaq Volume 1,620,504,000

2:00 pm : The market continues to claw its way back after bottoming out about an hour ago. Oil prices recently hitting session lows, falling as much as 1.0% to $75.16/bbl, and the Energy sector actually recovering some ground at the same time, have worked into the bulls favor.

Investors may also simply be viewing today's sell-off as an overreaction, since such sizable pullbacks tend to create intraday buying opportunities. Losses are so extensive, however, that the bears are almost assuredly on pace to declare victory when today's session comes to a close in two hours. DJ30 -136.32 NASDAQ -29.44 SP500 -14.89 NASDAQ Dec/Adv/Vol 2236/705/1.54 bln NYSE Dec/Adv/Vol 2531/719/1.27 bln

[ozymandius]

55. Stocks fall as Caterpillar, Google miss

NEW YORK - Stocks pulled back Friday, retreating from record levels following disappointing results from longtime favorites Caterpillar Inc. and Google Inc. The Dow Jones industrials fell more than 150 points.

Falling bond yields — often a catalyst for propping up stocks — perhaps helped stave off a deeper sell-off. But stocks moved decidedly lower even as the yield on the benchmark 10-year Treasury note at times slipped below the 5 percent threshold.

The drop in stocks came a day after the Dow finished above 14,000 for the first time and the Standard & Poor's 500 index likewise logged a record close. While a retrenchment might not be surprising following weeks of somewhat volatile trading and the big gains Thursday, Caterpillar has been one of the best-performers among the 30 stocks that make up the Dow and a big contributor in the blue chips' march to 14,000. The heavy equipment maker unnerved investors when its results came in well below expectations.

Technology shares also took a hit after a strong run Thursday. Google turned in a second-quarter profit that fell short of Wall Street's high expectations. Meanwhile, Microsoft Corp. also fell after disappointing investors.

http://news.yahoo.com/s/ap/20070720/ap_on_bi_st_ma_re/wall_street

[Ghost Dog]

56. IMF to Revise Economic Forecasts

http://www.iran-daily.com/1386/2897/html/ieconomy.htm#s243924

WASHINGTON, July 20--The International Monetary Fund is going to revise its economic growth forecasts amid a “global boom,“ the IMF chief economist, Simon Johnson, said Thursday, suggesting a hike in expectations. “We were criticized for being optimistic at the time of our spring forecast,“ Johnson said at a news briefing, referring to an IMF forecast of world growth at 4.9 percent this year and in 2008.

“Let me just say we are quite pleased that we were optimistic,“ he told reporters, without giving any precise figures. The IMF will release an update of its World Economic Outlook on Wednesday, AFP wrote.

“The global picture, broadly speaking, is the US continuing to show weakness, as we expected, but the rest of the world economy has done very well,“ he said citing Germany and the fast-growing emerging economies of China and India. “This is a global boom,“ he said.

The United States, the world’s biggest economy, is poised for a lift after limping along at a 0.7 percent growth pace in the first quarter.

“We think it’s going to turn around, though, quite quickly as the dollar already depreciated--that’s going to help exports, but also because we think that business investment is going to pick up,“ he said, adding, “consumption looks very solid.“

On the inflation front, he said, a rising demand for food, observed since the IMF and World Bank’s annual meetings in April, “puts pressure on food prices at the same time that you have an ethanol shock coming in the United States.“

Food prices in the US have shot higher as farmers plant more corn to make ethanol, a lucrative, alternative energy fuel, reducing the acreage for crops for human consumption.

“What happened since April was not expected,“ he said. “Nobody expected the size of this impact this year.“

Yet Japan, the world’s second-biggest economy, has a surprising lack of inflation. “What we hope will happen is a little bit of inflation in Japan,“ he said.

Johnson presented a benevolent view of China’s monetary policy: “The direction has been good for a while.“ “We should recognize that China has done very well for itself,“ he said.

[Ghost Dog]

57. DLC: Idea of the Week: A Progressive Economic Message

http://www.ndol.org/ndol_ci.cfm?kaid=131&subid=207&contentid=254397
DLC | New Dem Dispatch | July 20, 2007

There's been some discussion recently among Democrats, and in press accounts, suggesting that a robust critique of George W. Bush's economic policies requires abandonment of the Clinton-Gore administration's highly successful approach to the economic challenges of the last decade. We think that would be a terrible mistake.

First of all, you have to be pretty obtuse, or pretty extremist, to think of Clintonomics and Bushonomics as being similar in any fundamental sense. The former focused on, and actually produced, broad income gains and an explosion of innovation, in the context of fiscal probity and progressive social goals. The latter focused on, and actually produced, top-end income gains accompanied by an erosion of middle-class incomes and security, along with a retreat from U.S. scientific and technological leadership, in the context of massive public and private debt and regressive social goals. Ask Republicans if they think Bush continued Clinton's economic policies, and you'd get a pretty unambiguous negative answer.

Secondly, no Democrats are arguing for a mechanical reduplication of Bill Clinton's economic policies. A lot's changed since 1993 and different times call for different policies.

Thirdly, certain elements of the Clinton economic legacy retain strong appeal to Democrats of every stripe, most notably the commitment to fiscal discipline that has now separated Democrats from Republicans since 2001.

Lastly, all major factions in the Democratic Party agree on certain essential economic policies that sharply differentiate them from virtually all Republicans, most notably commitments to achieve universal health coverage, to make college affordable for all, to deal aggressively with global climate change; to end corporate welfare and restore corporate accountability; and to maintain and modernize the "social safety net," including the right of workers to unionize.

At the same time, there's no question Democrats (and for that matter, Republicans) are divided on trade policy, and more generally on how to cope with globalization. Moreover, in terms of rhetoric as much as policy, some Democrats are flirting with an unfortunately retrograde economic message that would place the party in staunch opposition to trade, globalization, business-driven growth, and any positive role for the private sector in public policy.

On trade, you don't have to like Bush's policies (we don't) to worry that many Democrats are in danger of throwing out the baby with the bathwater. Support for expanded trade as part of an equal opportunity agenda is the oldest continuing policy tradition of the Democratic Party, supported, without exception, by every Democratic president since Martin Van Buren. There's a reason for that: The alternative of a protectionist approach artificially rewards as many corporate interests as it might punish, and boosts consumer costs in a way that especially hurts the low-to-moderate Americans Democrats are supposed to care about (not to mention the wretchedly poor folk of the rest of the world, who are treated as deadly competitors).

/read on...

[ozymandius]

58. Jeebus! the volumes were hugh1!!!11

Dow 13,851.08 Down 149.33 (1.07%)
Nasdaq 2,687.60 Down 32.44 (1.19%)
S&P 500 1,534.10 Down 18.98 (1.22%)
10-Yr Bond 4.956% Down 0.072
NYSE Volume 3,745,932,000
Nasdaq Volume 2,394,165,000

4:20 pm : Stocks closed off their lows of the day but some large scale earnings disappointments and more subprime mentions kept sellers in charge of the action from start to finish. For the first time in about a month, the Dow, S&P 500, and Nasdaq closed out the week with losses. Broad-based weakness today knocked them down 1.1%, 1.2%, and 1.2%, respectively.

A day after the Dow finally closed above 14,000, logging its 32nd record finish this year and 8th victory in 10 sessions, it wasn't overly surprising to see some on Wall Street sense the market was a bit overbought. Throw in a huge earnings miss from the index's second best performer this year, however, and blue-chip valuations became even more vulnerable.

Caterpillar (CAT 83.20 -3.78) badly missed analysts' expectations, paced the Dow's decliners (-4.4%) with a 30-point contribution to the downside, and blamed the housing correction for most of the weakness in all of its North American markets. Homebuilders (-3.6%) were already tacking more losses onto their year-to-date lagging 31% performance after KB Home (KBH 35.03 -1.29) said it doesn't see a bottom in housing until the end of 2008.

Before Caterpillar upset the apple cart, market sentiment was already bearish as disappointing quarterly reports from two tech bellwethers left investors again wondering if the sector's growth prospects are overly optimistic. For just the second time as a public company, Google (GOOG 520.12 -28.47) missed analysts' expectations while the typically dependable Microsoft (MSFT 31.16 -0.35) broke a long string of upside surprises with an inline Q4 report. When two of the Nasdaq's three largest stocks by market cap post disappointing results, it's easy to see why the tech-heavy Composite faced such an uphill battle Friday.

From a leadership standpoint, the Financial sector was also in focus. Citigroup (C 50.73 -0.40) and Wachovia (WB 49.98 -1.63) posting record results, Capital One (COF 77.66 +2.15) enjoying a 36% jump in Q2 profits, and the 10-year yield slipping to as low as 4.97% early on helped the influential sector actually open to the upside.

However, the way in which Treasury yields tumbled acted as more of an offset to the welcome drop in borrowing costs. Bonds caught a flight-to-quality bid amid renewed talks of Australian hedge-fund troubles and reports that Standard & Poor's cut ratings on European collateralized debt obligations (CDOs). Even though St. Louis Fed President Poole said that subprime problems are isolated and have not spread to banks, the damage was already done leaving market bulls no chance whatsoever to lift the Dow and S&P 500 back into record territory.

As an aside, volume today was much heavier than usual due to double witching options expiration. That lent even more conviction on the part of the naysayers struggling to have their overbought arguments heard of late. BTK -1.0% DJ30 -149.33 DJTA -1.6% DJUA -1.7% DOT -1.0% NASDAQ -32.44 NQ100 -0.8% R2K -1.8% SOX -1.2% SP400 -1.0% SP500 -18.98 XOI -1.4% NASDAQ Dec/Adv/Vol 2222/801/2.15 bln NYSE Dec/Adv/Vol 2531/749/1.98 bln