STOCK MARKET WATCH, Monday September 10

[ozymandius]

Source: du

Monday September 10, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 500 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2439 DAYS
WHERE'S OSAMA BIN-LADEN? 2151 DAYS
DAYS SINCE ENRON COLLAPSE = 2112
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

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

AT THE CLOSING BELL ON September 7, 2007

Dow... 13,113.38 -249.97 (-1.87%)
Nasdaq... 2,565.70 -48.62 (-1.86%)
S&P 500... 1,453.55 -25.00 (-1.69%)
Gold future... 709.70 +5.10 (+0.72%)
30-Year Bond 4.69% -0.10 (-2.03%)
10-Yr Bond... 4.37% -0.13 (-2.93%)






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. Market WrapUp

Will the Fed Continue to Cut Rates?
BY TIM W. WOOD

It seems like the hot debate on the upcoming Fed meeting is whether or not they will cut the discount rate. Given that we had a cut in August, I’m not sure if we will see another cut in September. But, I can tell you that at present, the charts do in fact say that we have entered into an environment in which rates will continue to be cut over the longer-term. Here’s why.

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

[Ghost Dog]

49. Central bankers warn housing crisis could hit whole US economy

http://www.channelnewsasia.com/stories/afp_world_business/view/299000/1/.html

BASEL, Switzerland : The crisis in the US housing market risks spreading to the whole of the nation's economy, European Central Bank chief Jean-Claude Trichet said Monday on behalf of world central bankers.

Trichet was speaking in his capacity as head of the G10 group of central bankers from industrialised and emerging economies, who met at the Bank for International Settlements (BIS) here.

"There is a probability of fallout on the real economy in the USA," Trichet said.

"We will have to follow very carefully what happens particularly in the USA. We will remain ... alert, (there is) no time for complacency," he added.

/...

[ozymandius]

2. Today's Report

3:00 PM Consumer Credit Jul
Briefing Forecast $8.0B
Market Expects $9.5B
Prior $13.2B

http://biz.yahoo.com/c/ec/200737.html

[ozymandius]

3. Oil falls towards $76 ahead of OPEC

SINGAPORE (Reuters) - Oil slid towards $76 on Monday, as traders waited to see if top exporter Saudi Arabia will continue to back steady OPEC supply curbs, after weak U.S. jobs data raised concerns of a recession that could hit demand.

U.S. light crude fell 55 cents to $76.15 a barrel by 0850 GMT, after climbing 40 cents on Friday. London Brent crude shed 66 cents to $74.41 a barrel.

Ahead of its meeting in Vienna on Tuesday, most oil ministers in OPEC, which supplies more than a third of the world's oil, have stuck to the line that current output was sufficient to meet demand.

But Saudi Oil Minister Ali al-Naimi has declined comment, after a report by Washington-based consultancy PFC Energy saying Saudi Arabian sources signaled OPEC may need to consider an output boost of up to 1 million barrels per day (bpd).

http://news.yahoo.com/s/nm/20070910/bs_nm/markets_oil_dc_2

[ozymandius]

4. OPEC oil ministers say crude plentiful

VIENNA, Austria - Iran's acting oil minister said Monday he's convinced there are ample supplies of crude on world markets, joining Kuwait and Libya in signaling that OPEC will maintain its current output targets at this week's meeting.

Arriving in Vienna on the eve of a meeting that analysts said was unlikely to result in higher production quotas for the Organization of Petroleum Exporting Countries, Gholam Hossein Nozari suggested the 12-nation cartel felt little pressure to loosen its taps.

With the summer driving season over, and demand for gasoline and diesel fuel slackening, OPEC was almost certain to maintain its official output quota of 25.8 million barrels a day.

-cut-

Kuwait's acting oil minister, Mohammed Abdullah Al-Aleem, also said he believes there is plenty of oil to meet world demand and no compelling reason to boost production at Tuesday's meeting — echoing earlier comments by Libya and OPEC's secretary general, Abdalla Salem El-Badri.

-cut-

But analysts said that could change quickly if prices already hovering around $75 a barrel edge much higher, or if supplies tighten with the approach of winter in the Northern Hemisphere.

http://news.yahoo.com/s/ap/20070910/ap_on_bi_ge/opec_meeting_2

[Roland99]

46. Oct. reformulated gas falls 2.3% to $1.94/gal

[ozymandius]

5. Gas costs spark high-speed rail interest

BLOOMINGTON, Ill. - Seven hours after boarding a train in Kansas City, Douglas Lewandowski finally arrived at Chicago's Union Station — rested after the 500-mile trip but anxious to get home to Elkhart, Ind.

-cut-

While sleek new passenger trains streak through Europe, Japan and other corners of the world at speeds nearing 200 mph, most U.S. passenger trains chug along at little more than highway speeds — slowed by a half-century of federal preference for spending on roads and airports.

But advocates say millions of Americans may be ready to embrace high-speed rail for everything from business travel to vacations because of soaring gas prices, airport delays and congested freeways that slow travel and contribute to air pollution.

http://news.yahoo.com/s/ap/20070909/ap_on_bi_ge/high_speed_rail

[Roland99]

6. Stock futures inch up

LONDON (MarketWatch) -- U.S. stock futures pointed to a mild rise after the shock economic news of the last session, with Countrywide Financial seeing some strength after the mortgage lender said it may cut up to 12,000 jobs.

S&P 500 futures were up 1.6 points at 1,461.40 and Nasdaq 100 futures gained 4 points at 1,974.50. Dow industrial futures rose 22 points.

Morning everyone!

:hi:

[ozymandius]

9. Good morning Roland and everyone!

:donut: :donut: :donut:

I wonder if pre-open trading has figured out that overseas markets are coughing and wheezing.

:hi:

[ozymandius]

7. Asia stocks slide

TOKYO (Reuters) - Asian stocks fell more than 1 percent on Monday, with exporters hit hard as the dollar slumped to a 15-year low against a basket of major currencies on concerns the U.S. economy may be heading into a recession.

Data on Friday showing U.S. payrolls shrank in August for the first time in four years suggested that a credit squeeze stemming from problems in the U.S. subprime mortgage market is beginning to stifle growth in Asia's top export market.

European stocks, which sank on Friday in the wake of the data, were set for a largely flat start according to financial bookmakers. (.EU)

-cut-

Tokyo's Nikkei share average (.N225) closed down 2.2 percent at a three-week low, with major exporters such as Sony (6758.T) leading the market lower. (.T)

Sentiment was further dented by news Japan's economy contracted more than expected in the second quarter, bolstering views that the Bank of Japan is unlikely to raise interest rates next week.

Hong Kong shares (.HSI) fared better than elsewhere, falling 0.5 percent as blue chip Hong Kong Exchanges and Clearing Ltd (0388.HK) surged 17 percent after the government raised its shareholding in the city's bourse operator.(.HK)

http://news.yahoo.com/s/nm/20070910/bs_nm/markets_global_dc

[ozymandius]

8. Wall Street awaits Fed announcement

NEW YORK - There are 6 1/2 trading sessions until the Federal Reserve says for certain whether it's lowering interest rates. They're apt to be some of the most anxiety-ridden times on Wall Street in years.

Investors have been hoping for weeks for a rate cut from the Federal Reserve, which meets Sept. 18. But now, after last week's disagreeable jobs report, Wall Street is more nervous than ever over the possibility that even the expected quarter-point rate cut next week may not be enough to save the economy from slipping into recession and stocks from sliding into negative territory for the year.

On Friday, investors got a shock when the Labor Department reported a drop in August payrolls, the first monthly decline in four years. The report was seen as evidence that problems with the sluggish housing market and tightening credit have, indeed, become a real threat to growth. Consumer spending accounts for about 70 percent of the economy, and when consumers don't have jobs, they tighten their purse strings and miss their bill payments.

-cut-

There are worries that Wall Street has already priced in quarter-point rate cut, so even if it gets one, it may not boost stocks. Some investors are angling for a half-point rate cut, or even a rate cut before the Fed's meeting — a move that many analysts consider unlikely.

http://news.yahoo.com/s/ap/20070909/ap_on_bi_ge/wall_street_week_ahead

[ozymandius]

10. Disney to start testing toys after recalls: report

NEW YORK (Reuters) - Walt Disney Co (DIS.N: Quote, Profile, Research) will start its own testing of toys featuring Disney characters following recalls of Mattel Inc (MAT.N: Quote, Profile, Research) toys found to have unsafe levels of lead paint, the New York Times reported on its online edition on Monday.

Disney executives intend to inform Mattel and other toy makers on Monday, the report said. The process will include random testing of products already on store shelves, the report said.

http://www.reuters.com/article/ousiv/idUSN1040588720070910

[ozymandius]

11. Lessons learnt help Japan avoid subprime upheaval

TOKYO (Reuters) - Japan has escaped the global credit market storm relatively unscathed thanks to lessons learnt from a decade-long battle to clean up mountains of bad loans in the wake of its bubble economy of the 1980s.

Japan's markets are expected to remain sheltered from the turbulence seen in European and U.S. markets, and any spikes in short-term rates are likely to be driven more by domestic factors -- such as funding needs at the end of Japan's fiscal first-half year this month -- than by the global credit squeeze.

-cut-

Banks were forced to drastically reduce risk in the aftermath of Japan's bursting property and equity bubbles as banks slashed about 100 trillion yen ($885 billion) of bad loans while taking steps to strengthen risk management.

As a result, Japanese financial institutions largely kept clear of the innovations in leveraged structured products, especially in the United States in Europe, that have become the source of trouble from defaults on U.S. subprime mortgages.

http://www.reuters.com/article/reutersEdge/idUST2191520070910

[Buttercup McToots]

12. Well, What will today bring us?

:donut:

Good Morning all...

[Roland99]

14. Mr. Toad's Wild Ride?

[AnneD]

20. Morning Marketeers....

:donut: and lurkers. In my never ending efforts to remain cool, be able to translate kid/teen lingo, and to kill a little time on the internet-I happened to hit on the urban dictionary. some of the terms are outrageously funny, some are tasteless, and some are outright rude. But the one that struck me as funny was NAD SAQ- that's slang for the New York Stock exchange. I can't figure out if they have us by the balls or we are totally screwed, but either way-we be f!@#ked.

WWW.urbandictionary.com

I hope this is the site. There is a filter here and I can't double check.


Happy hunting and watch out for the bears.

[ozymandius]

13. Subprime: Let the finger-pointing begin!

These are just snippets. The blame review is a bit more thorough.

The borrowers
Let's start at the very end of the credit chain and work up. That means we begin with the borrowers themselves - in other words, with us. Thanks to low interest rates in the wake of the stock market crash, getting rich in real estate, always part of the culture, became a national pastime, with cable-TV shows like Flip This House, Flip That House and The Property Ladder (not to mention newspapers and magazines) stoking everyone's inner Donald Trump. Admit it - how often did you go on the Web to check the prices of homes in your neighborhood, just to see how much you could get for yours?

Mortgage brokers

To get these loans they couldn't afford, many borrowers turned to mortgage brokers, who were especially good at enabling borderline borrowers to get their dough. "The brokers have always been a disproportionately large part of subprime origination, so they were well positioned to help fuel the boom in subprime lending," says Guy Cecala, publisher of the newsletter Inside Mortgage Finance.

Mortgage lenders

Point your finger at mortgage brokers and appraisers, and they will quickly point theirs at the banks and mortgage companies. -cut-

Once they'd made all the loans they could reasonably make to qualified borrowers, the banks began relaxing the rules and reaching further down the credit scale. No income? No job? No assets? No problem! The industry even came up with a cute acronym for such deals: NINJA loans.

Wall Street

The banks and mortgage companies never would have made all those loans if they'd had to keep them on their books. But they didn't have to, thanks to the remarkable mortgage machine Wall Street's investment banks and hedge funds concocted.

Rating agencies

While the wizards of Wall Street could use financial alchemy to turn shoddy mortgages into respectable bonds, they still needed the blessing of rating agencies like Standard & Poor's and Moody's. And the agencies were often all too willing to comply.

The Federal Reserve

If we want to talk about one player that certainly had the power to put a stop to the excesses, we have to look at the Federal Reserve, which sets interest rates and therefore heavily influences the amount of lending that takes place in the economy.

Those rate decisions showed that Greenspan had chosen to use the housing market as his main instrument to prop up the economy after the 9/11 attacks.

http://money.cnn.com/galleries/2007/fortune/0709/gallery.subprime_blame.fortune//index.html

[formercia]

15. What better way to make slaves.

Give them a loan they can barely afford so ever thing they earn besides bare necessities goes into the home. After a couple of years, you jack up the rate, foreclose and throw them back on the street.

[DemReadingDU]

18. Why didn't people with sub-prime variable rates, refinance?

Isn't there an option on a variable rate mortgage to refinance to a fixed rate within a few years? So I'm wondering why people didn't refinance rather than let the rate go adjust to a higher and higher rate, and then have to foreclose because the payment became too large?

[AnneD]

22. From what I can gather...

their initial payments are interest only first-thus the homeowner builds no equity in the house (which lowers the total amount of money that the homeowner needs to borrow-in essence the equity acts like a down payment).

This is what is so cruel-the lender have been getting their interest first and with the prices going down, these folks are not only upside down in their loan-they have nothing to show for all their had work. And then the interest rates reset. So who wants to keep pouring money into a sink hole, (getting no equity) when they can use that money to rent (which is about what they did anyway) and afford the ever increasing cost of living. Actually, being tied to that type of loan seems like slavery to me.

Once folks figure this out, then the shit will really hit the sub prime fan.

[DemReadingDU]

30. Makes sense now, thanks

really bad times coming :(

[NMDemDist2]

25. many of those loans started out with Interest Only or even lower payments

if the house cost $300,000 say a normal loan would have a $3000 a month payment

people got loans that got them into the house for half that. so when the loan resets *or* if they refinance they need to be at the $3000 a month mark, but they could never afford a payment that high in the first place.

so a refi wouldn't help them. the other side of that situation is that the house they bought for $300K is now worth only $260,ooo and they now owe $320,000 because the lower payments added more debt to the back end of the loan.

they're screwn

[DemReadingDU]

31. Where I live in SW Ohio, this would affect people

in yuppie neighborhoods. And if their $75,000 job gets sent to India/Mexico, there is no way to make that house payment with no job.

They're really screwn :(

[NMDemDist2]

34. 75000 a year should put them in a house around $200000

and that's assuming they had 10K to put down. the payment on that is around 1800 a month

http://www.ourbroker.com/cgi-bin/howmuch.cgi?ai=75000&md=250&dp=10000&pt=1&hi=0.5&ir=8.25&yr=30

looking at home prices in Dayton, that's pretty do-able as long as their jobs hold as you said

[AnneD]

38. They are not screwen...

they are reamed, steamed, and dry cleaned
stewed, glued, and tattoed
nailed, jailed, and impaled
etc,etc etc (fill in your own).........

[Warpy]

37. Refinancing costs money they don't have

on property that isn't worth as much. They'd have to make up the difference up front, plus pay closing costs.

A lot of people are already treading water. They're in an upside down loan position on their cars, their houses, and in hock by plastic.

[AnneD]

44. Although I am not in ...

the financial place I want to be (still owe folks), we own our living space and our cars. We have all we could want and we can pay our bills (overhead). Because we keep our overhead low, we have extra money to pay off our debts and save a little too.

We will have some harsh economic winds blow through and I feel sorry for those folks that are stressed now-it will only get worse before it gets better. Hubby and I are fairly secure in our jobs and we hope our health holds out. At worst we postpone retirement, but then we were planning to retire earlier than most.

This storm coming through was hard to miss. Most folks didn't and STILL don't have their eyes open to the enormity of the problem. This will be the Houston RE bust on a grand scale.

[formercia]

39. The difference between a slave and a serf:

A slave gets a place to sleep.

I think part of the problem is the fixed mortgages also have higher initial interest rates, so the payments are higher.

Those teaser variable rates are the killer. If you want to refinance at a fixed rate, you pay big fees and your house payment goes up, plus the lender is going to look more closely at your ability to pay. Right now, money is tight at any rate. It's like musical chairs. The lender doesn't want to be caught without a chair when the music stops.

A lot of people are definitely screwn.

This was all done deliberately. The boys get real property in exchange for paper that was worthless to begin with, even when the economy was good.

[Roland99]

53. Plus early repayment penalties so even if you do refi, you're hit with 2-3% penalty

[JNelson6563]

16. Don't put your eye out on those futures charts!

I think safety glasses should be issued to market watchers when there are so many sharp, pointy peaks.

Looks like a good day to be ready for battoning down the hatches. :scared:

Cheers to all you Marketeers! :hi: :toast:

Julie

[displacedtexan]

17. Back-to-School Sales: *Weaker Than They Appear

Ouch.

From The Big Picture:

It turns out that a the retail data came with a big fat *asterisk, which (as happens all too often) presented a very misleading view of the data.

Why? Well, we track these numbers so as to have a good read on the strength of the consumer, and how sustainable their present spending pattens are. Given that the US consumer is 70% of the economy, their actions are quite significant.

That's what makes today's asterisks so significant: Much of the volume gains came via one offs, unusual factors, and huge discounting, with retailers sacrificing margin in exchange for volume:

"But chains like Wal-Mart Stores and Macy’s, which led the pack, have slashed prices and dangled large discounts to lure customers, which could hurt profits and mask troubles that might spill out during the crucial holiday season."

For many retailers, the August and September same-store sales period have a very high correlation with fourth-quarter results. Its a 91% for department stores, 86% for discounters, and 84% for teen retailers, according to Bear Stearns analyst Christine Augustine. (Emphasis mine)

There's much more info at the link.

[JNelson6563]

19. Check this out

Great toon posted in GD: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x1772509

[54anickel]

73. Heh-heh. There it is again....Something called "d-o-o" economics. Anyone? Anyone?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2981218#2982020

[Buttercup McToots]

21. USD $79.87 @ 9:17 am

:eyes:

[Buttercup McToots]

33. USD $79.78 @ 9:40 am

:thumbsdown:

[Kolesar]

70. Dom Perignon?

[UpInArms]

23. dollar watch (achieving new 52 week lows - actually 16 yr lows)

Last trade 79.884 Change -0.074 (-0.09%)

Settle Time 15:12 Open 79.860

Previous Close 79.958 High 80.000

Low 79.814 2007-09-10 08:48:06, 30 min delay

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

52wk Low 79.841 52wk Low Date 2007-09-07

Dollar - Where Is The Bottom?

http://www.dailyfx.com/story/topheadline/Dollar___Where_Is_The_1189403475759.html

Last week, we wrote “The rate cut issue may be settled once and for all after Non-Farm Payrolls next week. If the employment data once again produces the second sub-100K job performance in a row the rate cut will be almost assured. Despite the soothing rhetoric a weak July NFP would indicate that the economy was already slowing before the sub-prime mess became front page news and the markets will demand action from monetary authorities. Should that occur the greenback will likely weaken against the euro and the other high yielders as markets will begin to price in possibility of a change in policy towards a new loosening cycle.”

With the first negative print in NFPs in four years, the question of rate cut appears to have been settled once and for all, although the Fed remains highly resistant to a systematic approach of lowering rates. Inflation continues to stoke the hawkish bias of US monetary policy makers and with oil at $76/bbl and gold over $700/oz they can hardly be sanguine about pricing pressures within the US economy. Yet the Fed is caught between a rock and hard place. The employment data was so incontrovertibly bad that the risk of recession looms very real over the US economy, especially in light of the fact that most of the massive job cuts in the housing sector have yet to be recorded on BLS’s books.

For the first time in weeks, despite carry trade liquidation, the greenback actually lost ground against the euro and the pound as the safe haven story started to fade and the currency market started to worry about the prospect of a US recession. Yet whether the euro or the pound will be able to maintain their gains against the buck will depend to a very large extent on how successfully the rest of the world will be able to decouple from the US slowdown. Once the US consumer goes, he may drag the rest of the G-3 with him especially if high exchanger rates makes imports even less affordable. In short this dynamic could trigger a race to the bottom as every major central bank will scramble to lower rates to stimulate their economies with no clear winner in sight.

Next week, the market will pay very careful attention the Retail Sales numbers to gauge extent of the damage from the collapse of housing on US consumer spending . Yet this story is like a slow motion car wreck and will continue to unfold for months to come. We have the feeling that there will be quite a few more negative surprises to come -BS



...more...

US Dollar: Will the Fed be Proactive or Reactive?

http://www.dailyfx.com/story/bio1/US_Dollar__Will_the_Fed_1189200641471.html

US Dollar: Will the Fed be Proactive or Reactive?

Volatility has rocked the financial markets after the shockingly weak non-farm payrolls report. Economists were looking for companies to add 100k jobs last month, but they ended up firing more people than they hired. The Federal Reserve can no longer pretend that the subprime and credit crisis is not having an impact on the overall economy. It is and in a very serious way. At the end of trading today, Countrywide Financial announced job cuts of up to 12k. The only choice that they have at this point is between cutting interest rates by 25 or 50bp. After today’s non-farm payrolls number, the interest rate curve is pricing in 75bp of easing. There are even rumors about the possibility of an emergency intermeeting cut. The chance of this is low since the FOMC meeting is only 7 trading days away. The bigger question will be whether the Fed chooses to be proactive or reactive. If they really want to do more than put a band aid on the problems that the US economy currently faces, they will need to surprise the markets with a half point cut, but based upon the measures that we have seen from Bernanke so far, it is more likely that the Fed to play it safe with by cutting interest rates 25bp. The weak non-farm payrolls number has sent stocks, carry trades and the Dow tumbling. The dollar has been completely stripped of its safe haven status as job losses point to weak spending in the months to come as well as the risk for a recession. Retail sales are the most important release on the economic calendar next week. After today’s payrolls number, everyone will be looking for consumer spending to confirm that the economy is continuing on a downward spiral but we actually don’t think that retail sales in August will be that bad. The last time job growth was negative was in August 2003. That month retail sales jumped 1.6 percent but in September and October, spending fell -.8 percent and -.5 percent respectively. Therefore it may be another month before we see a meaningful contraction in spending.

Carry Trades: Expect More Losses

None of the Japanese Yen crosses have been spared from today’s massive and widespread exodus out of carry trades. With the exception of CHFJPY, every other yen cross lost a minimum of 200 pips. Risk aversion is back and we expect it to be here to stay. Unless the Fed steps in with an intermeeting rate cut, the Dow will want to test the 13,000 level by the end of next week. As currencies and equities continue to move together, this should have a negative impact on the Yen crosses as well. When Asian traders return to the markets on Sunday night, we expect them to react the same way as US and European traders. Further losses in the Dow will also make it a difficult night for carry trades. Risk or no risk is still the big driver of the markets and based upon today’s movements, it seems that no one wants to take on any risk. Japan will be releasing second quarter GDP along with industrial production CGPI, current account and consumer confidence next week. These reports will probably matter little to the overall market as they focus on figuring out how much worse the US economy can get.

...more...

my thought - the fed will be radioactive - boxed in with sandwich-board signs on their necks reading "I'm with Stupid" and fingers pointing everywhere :evilgrin:

[UpInArms]

42. Fed's Lockhart: worry of dollar selloff exaggerated

http://www.reuters.com/article/bondsNews/idUSWBT00752720070910

ATLANTA (Reuters) - Atlanta Federal Reserve Bank President Dennis Lockhart on Monday said he is not overly worried that foreign investors will dramatically shed dollars because doing so would hurt their own interests.

"I think the concern for a dollar sell-off is exaggerated," he said in response to questions after a speech. "If you are a central bank and if you are selling, a little bit of activity would conceivably shoot yourself in the foot by driving rates down."

I am not soothed - if anything, I am more alarmed than ever.

[roamer65]

61. Go ahead, Lockhart...

keep dancing on the dollar "land mine".

[nadinbrzezinski]

55. Oh wow and believe it or not I know a trader

that feigns ignorance of all of this

[DemReadingDU]

24. Bond Funds May Be Next to Feel Subprime Shockwaves

Could the housing market's woes spread to bonds held in mutual funds by millions of ordinary investors?

Some experts -- and hedge fund investors who have made big bets that the mortgage crisis will worsen -- are saying that's exactly what will happen. Some bond funds that invest in riskier short-term debt already have been whacked by soaring default rates on bonds backed by subprime loans made to borrowers with weak credit.

Critics charge that Standard & Poor's, Moody's Investors Service and Fitch Ratings routinely give triple-A ratings -- the safest rating there is -- to far too many mortgage-backed bonds backed by subprime home loans.

"The rating agencies just completely missed the boat in their methodology for rating these things," said Janet Tavakoli, president of Tavakoli Structured Finance, a Chicago consulting firm.

About 80 percent of debt in bonds backed by subprime loans is rated triple-A, the same rating on virtually risk-free U.S. Treasury bonds, experts say.

http://www.cnbc.com/id/20678256

[Roland99]

26. Americans living beyond their means

Americans living beyond their means
Commentary: Economist Paul Kasriel sees party ending, hangover beginning

http://www.marketwatch.com/news/story/proof-americans-living-beyond-means/story.aspx?guid=%7B66122EA4%2DB773%2D46D0%2D9BFC%2DCC94968EEE77%7D

The 60-year-old economist, tapped in 2006 as the top economic forecaster by Arizona State University's W.P. Carey School of Business, has spent a good deal of that time trying to warn anybody who would listen about such things as excessive household debt while taking a jab or two (or three) at then-Federal Reserve Chairman Alan Greenspan. "Illusory" is how, in October 2004, Kasriel described the wealth created by Greenspan's interest-rate cuts in one of his edgy and somewhat irregular reports dubbed, "The Econtrarian," which are available on Northern Trust's Web site. A few months later, as household spending continued to sizzle, he wrote, "Today's 'partying' in terms of a disproportionate share of national output being 'consumed' by the household sector is a recipe for a 'hangover' tomorrow."

...

Sailing on that lake, known for its unpredictable conditions, is an appropriate hobby for an economist like Kasriel. He believes sailing makes him a better forecaster. And as a forecaster, he is concerned more than ever about the economy, which he believes could be headed toward a "painful" recession. His analysis confirms the anecdotal evidence presented earlier this year in my column and blog items that suggested Americans are living well beyond their means. "I don't make up the numbers," Kasriel says. "And since the late 1990s, I've been seeing trends that are very disturbing."

He is particularly alarmed at the relationship between personal disposable income and personal consumption expenditures and residential investment expenditures. That is eco-babble for the amount of money people take home after taxes minus the amount they are spending on everyday goods and services and what they spend on buying and fixing up their homes. According to that calculation, Americans have been running deficits in six of the past seven years.

Prior to the recent, unprecedented string of deficits, Kasriel says there have been only seven other years American households have been so upside-down in their finances since 1929. Two of those were during the Great Depression. Three more were just after the end of World War II. Another was in 1955, then again in 1999. That leads to an obvious question: If they can't afford it, how are people continuing to spend as Thursday's report of retail sales suggested they are continuing to do as if all is well?
The answer, which has become all too obvious in recent weeks and months, Kasriel says: They appear, in large part, to be borrowing against their homes, which will become less available as a piggy bank going forward. "Households are going into debt like never before," he says. They also have been net sellers of stocks. All of this means, Kasriel says, that there will be less cash for things we like to buy.

[UpInArms]

27. Countrywide to cut up to 12,000 jobs

http://www.marketwatch.com/news/story/countrywide-cut-up-12000-jobs/story.aspx?guid=%7B63ADD1B6%2D9F15%2D43CF%2D8A6B%2D3BA21F03E45D%7D

SAN FRANCISCO (MarketWatch) -- Countrywide Financial Corp. said late Friday that up to 20% of its employees stand to get laid off within three months, as the nation's largest mortgage lender slashes costs in a desperate attempt to stay financially afloat.

The Calabasas, Calif.-based company (CFC: 18.21, -0.27, -1.5%) announced that it plans to reduce its workforce by 10,000 to 12,000 jobs, or up to 20%, mostly in areas impacted by lower mortgage-market origination volumes.

Countrywide said that the reductions could be less than projected if the interest-rate environment and outlook for market volume outlook improve. Based on current interest-rate levels, the company added that it expects total origination volumes will fall about 25% in 2008 from 2007.

Countrywide had grown its payrolls rapidly in past years to take advantage of the U.S. boom in real estate. But it has been hit hard by recent turmoil in home-loan markets, triggered by a wave of subprime defaults, and the lender already has suffered a sharp drop in originations this year.

This turmoil has made it harder for companies like Countrywide to tap debt markets. Last month, Countrywide borrowed $11.5 billion from a group of 40 banks because the company struggled to get financing in the secondary mortgage market or the commercial-paper market.

...more...

[UpInArms]

28. 'R' word could spell trouble for Republicans

http://www.marketwatch.com/news/story/r-word-may-spell-trouble/story.aspx?guid=%7BDEDAC273%2D85D4%2D482D%2DBD58%2DA60C40404CA0%7D

WASHINGTON (MarketWatch) -- Recessions usually aren't pretty for the party that controls the White House, and the August employment report issued Friday could spell trouble for Republican contenders and efforts by the GOP to regain control of Congress.

Economists say odds of a recession increased after the Labor Department reported a surprise 4,000 dip in August non-farm payrolls. The decline, which marked the first monthly drop since 2003, came in against Wall Street expectations for a rise of 115,000. See full story.

"Everyone will soon start using the 'R' word," said Richard Bernstein, chief investment strategist at Merrill Lynch, in a research note.

Political strategists note that since Herbert Hoover fell to Franklin Roosevelt in 1932, election-year economic contractions have wreaked havoc on the incumbent president's party. They contributed to Democrat Jimmy Carter's defeat by Ronald Reagan in 1980 and Republican Vice President Richard Nixon's loss to John F. Kennedy in 1960.

And President Bush's father saw his re-election bid trumped by Democrat Bill Clinton amid the lingering sub-par performance of the economy in 1992 despite the fact the recession had actually ended in March of the previous year.

...more...

[UpInArms]

29. Broker earnings to give investors early damage report from credit crunch

http://www.marketwatch.com/news/story/stress-test-wall-street-soon/story.aspx?guid=%7B0ADCFB73%2D4EBE%2D435D%2DBF91%2D99B4BF7B608E%7D

SAN FRANCISCO (MarketWatch) -- Investors are about to get a look at the first major reports on the damage from this summer's credit crunch.

In a little more than a week, Wall Street's biggest firms report quarterly results. These companies are lynchpins of the global financial system, so their performance will be scrutinized for clues on how banks, other companies, capital markets and the broader economy are coping with a crisis that has hit close to home for some top brokers.

"This quarter is the most anticipated earnings event for the brokers for years," said Brad Hintz, an analyst at Bernstein Research and former chief financial officer at Lehman. "There's huge amounts of uncertainty about brokerage firms' results. Questions are swirling."

Goldman Sachs (GS: 178.98, -0.20, -0.1%) , Morgan Stanley (MS: 62.50, 0.00, 0.0%) , Lehman Brothers (LEH: 52.95, -0.88, -1.6%) and Bear Stearns (BSC: 105.37, -2.30, -2.1%) , four of the five leading U.S. investment banks, unveil fiscal third-quarter results on Sept. 18, 19 and 20. (Merrill Lynch (MER: 73.18, -0.54, -0.7%) , the other big broker, reports after the end of September).

More than their peers, Lehman and Bear may be the most exposed to the credit crunch because they rely on fixed-income sales and trading more than rivals such as Morgan Stanley and Merrill, analysts said. Indeed, Lehman gets almost half its 2006 revenue from the business, while Bear got 44% of its revenue from there last year, according to Bernstein estimates.

...more...

[UpInArms]

32. 9:39 EST happy numbers and blather

Dow 13,173.29 59.91 (0.45%)
Nasdaq 2,583.22 17.52 (0.68%)
S&P 500 1,458.87 5.32 (0.37%)
10-Yr Bond 4.372% 0.004

NYSE Volume 87,435,000
Nasdaq Volume 99,569,000

09:20 am : S&P futures vs fair value: +7.5. Nasdaq futures vs fair value: +18.8. Stock futures got a pop after Intel (INTC) came out and raised its revenue guidance for the third quarter to $9.4 billion to $9.8 billion from $9.0 billion to $9.6 billion. Intel cited stronger than expected worldwide demand for its computing products. As expected, the good news has cheered the tech sector which is expected to lead the early market advance. Look for big-cap tech stocks to assume the leadership position.

08:55 am : S&P futures vs fair value: +5.0. Nasdaq futures vs fair value: +12.1. The major indices are indicated higher at the open in a reflex bid that follows Friday's large losses. Per usual, there are a lot of news items crossing the wires, but none are having any significant impact in their own right. One thing that is noteworthy is the absence of any big deals announced this Monday morning. Separately, several Fed officials will be giving speeches today that could have some impact on trading as a few speeches will touch on the economic outlook. Fed Chairman Bernanke will be speaking tomorrow on global imbalances.

08:19 am : S&P futures vs fair value: +7.5. Nasdaq futures vs fair value: +18.8. Stock futures got a pop after Intel (INTC) came out and raised its revenue guidance for the third quarter to $9.4 billion to $9.8 billion from $9.0 billion to $9.6 billion. Intel cited stronger than expected worldwide demand for its computing products. As expected, the good news has cheered the tech sector which is expected to lead the early market advance. Look for big-cap tech stocks to assume the leadership position.

08:15 am : S&P futures vs fair value: +4.2. Nasdaq futures vs fair value: +6.3. The futures market is signaling a modestly higher start for the major indices as some bargain hunting activity emerges after Friday's sell-off. There isn't a lot of noteworthy corporate news this morning, but Countrywide's announcement that it will eliminate roughly 20% of its workforce is certainly grabbing some attention.

07:35 am : S&P futures vs fair value: +3.0. Nasdaq futures vs fair value: +8.5.

06:18 am : S&P futures vs fair value: +4.5. Nasdaq futures vs fair value: +10.1.

06:16 am : FTSE...6198.70...+7.50...+0.1%. DAX...7426.63...-10.00...-0.1%.

06:16 am : Nikkei...15764.97...-357.19...-2.2%. Hang Seng...23999.70...+17.09...+0.1%.

[happygoluckytoyou]

35. IT ONLY MATTERS IF YOU HAVE MONEY

FOR THE MILLIONS OF HUNGRY CHILDREN IN AMERICA... THE FAMILIES OF THE DEAD SOLDIERS ON BOTH SIDES OF IRAQ... THOSE WITHOUT HEALTHCARE... THOSE LOST IN KATRINA... THOSE LOSING THEIR HOUSES AND JOBS....

WHO GIVES A SHIT ABOUT THE STOCK MARKET.....

[silverlib]

36. It affects everyone...

It's like trickle down economics. It will first affect the stock holders and market investors, but the poor will eventually be affected too, by prices of the bare essentials.

[fasttense]

45. It's more like trickle all over economics.

The poor can't pay their bills because the rich took the jobs away. Now the rich have no one to pay the bills and buy their junk. So they need to bring some jobs back so the poor can pay the bills. And around and around it goes.

The stock market is a good indicator of how the rich are doing. When the rich suffer even mild losses, there tends to be immediate social changes. But on the other hand, if the poor and middle class suffer long and hard enough, there also tends to be social change. When the rich suffer even mildly, it shows how badly the rest of us are really suffering. So the stock market can also indicate how bad it is for real people. Drip, drip, drip....

[nadinbrzezinski]

57. It is not exactly like that

though the stock exchange is the LAST place where the economic instablity shows up

If the fundamentals are wrong, it will show up there last

[ozone_man]

59. Stock market is usually a leading indicator.

I believe it leads the economy by about three months as I recall. It's a bunch of speculators gambling on what they think is going to happen in the future more than the present. In 1929, before the depression hit, there was a stock market crash, right?

In 2000 in January the Nasdaq crashed, but it was several months (~April IIRC)before a recession was declared.

In the same way, before the end of a recession, the stock market climbs, because the speculators see what is about to happen.

[nadinbrzezinski]

63. If you examine 1929 the crash

came after the liquidity crisis and companies could not get easy money, aka credit... among other fundamental reasons

(which by the way, paralels today to a T)

So it is not a leading indicator... but a trailer in the fundamentals

For the average person in the street it might be a leading indicator, mostly because most folks do not pay atttention to things such as liquidity, (or in this case lack off)

Or other trading matters such as indices of confidence in the economy.


I mean most folks yawn when you mention some of these tihngs

As to the stock climing, yep, it is trailing better conditions in the fundamentals, such as better credit, and liquidity... and the leading edges of sales and employment figures that are starting to spike

Also... and this is a truism about the market that most folks don't get, it can be and is manipulated by certain groups of investors.

[ozone_man]

66. Maybe it was your wording

"the stock exchange is the LAST place where the economic instablity shows up" I was reacting to.

Here's a description of a more typical view that the stock market is a leading indicator of the economy and recession. I think what most people call the economy may not apply to certain fundamentals weakening early on. But as we know, the stock market doesn't always move according to fundamentals. Lot's of psychology in that process.

Leading: Leading economic indicators are indicators which change before the economy changes. Stock market returns are a leading indicator, as the stock market usually begins to decline before the economy declines and they improve before the economy begins to pull out of a recession. Leading economic indicators are the most important type for investors as they help predict what the economy will be like in the future.

http://economics.about.com/cs/businesscycles/a/economic_ind.htm

As far as I know, a recession has not been declared and probably won't for several months. And then there is the election year coming up. How will that affect the economy? I'm sure they will try to prime the economy and stock market one more time by lowering rates, but after the election the bottom will fall out. Maybe before even.

[nadinbrzezinski]

68. Well the indicators also include inflation and

unemployment.

We both know that the employment figures are highly gamed

And inflation...

The last time things like energy and oh bread were figured in was the Carter Administration

Here is an observation based on this household and I have to wonder how far this goes across the economy.

Our food budget is strethed, quite a bit actually. Why? The prices of basic things such as oh bread, cereal, milk, and eggs has skyrocketed to the point that my money for discretionary is down.

In fact, it is to the point where I will not be looking at a minituare (we play miniature games), even though it would help me to round up my force. You see, those thirty or forty bucks in "artillery" are now needed for things such as oh food

And just like me many more are lookng at luxury spending and going... food or movies. food or books... food or...

This is where we are as a country right now...

But you look at the official inflation rates and aparently the real economy is working

And they deceive themselves... yep the "number" may be low, what 4%, but I cannot buy any discretionary items

I'm looking forwards to a great (NOT) holiday shopping season... (For the recrod that is a general statement, since we really don't play that game and have not for a while)

[specimenfred1984]

41. True, the unregulated "investor class" is quickly becoming despised

Second only to politicians, "Wall St." types are useless, self-serving hypocrites. If more of them spoke out and stood up for America, we'd have a lot better country.

[nadinbrzezinski]

56. Yep, that is why the poor in 1929

didn't suffer, right?

RIGHT!

In fact the very rich DIDN'T suffer...

Oh pleezze if you think this will not affect you, I have news for you... when your employer does not have the loans he\she needs to operate his\her business, who do you think will hit the road?

[UpInArms]

40. Fed Pumping Continues Unabated: Fed adds $2.75 bln temporary reserves in overnight repo

http://www.reuters.com/article/bondsNews/idUSNYG00073120070910

NEW YORK, Sept 10 (Reuters) - The U.S. Federal Reserve on Monday said it added $2.75 billion of temporary reserves to the banking system through an overnight repurchase agreement.

Federal funds traded steady in the market at 5.00 percent after the amount was announced, below the 5.25 percent target rate the Fed sets.

The Fed said it accepted as collateral in the repurchase operation $2.07 billion of Treasuries, $340 million of agency debt and $340 million of mortgage-backed securities.

A total of $30.05 billion in bids were submitted for the operation.

[roamer65]

62. Annual M3 Money supply growth hits 14% in August.

http://www.shadowstats.com

[UpInArms]

43. Washington Mutual sees more 2007 loan losses

http://www.reuters.com/article/bondsNews/idUSN1029956220070910

NEW YORK, Sept 10 (Reuters) - Washington Mutual Inc (WM.N: Quote, Profile, Research), the largest U.S. savings and loan, may set aside $500 million more than it had previously forecast for loan losses in 2007, amid what Chief Executive Kerry Killinger called a "near perfect storm" in U.S. housing.

The Seattle-based thrift had in July projected setting aside $1.5 billion to $1.7 billion for loan losses.

Speaking at a Lehman Brothers Inc. financial services conference, Killinger said the housing market is struggling with stagnant home prices, rising borrowing costs, tighter underwriting standards, and tough capital markets conditions.

...more...

[UpInArms]

47. US STOCKS-Indexes flat as recession concern returns

http://www.reuters.com/article/bondsNews/idUSN1030127620070910

NEW YORK, Sept 10 (Reuters) - U.S. stocks were flat on Monday after an early technology-led rally faded and as financial shares dropped and uncertainty about the economic outlook returned.

Washington Mutual Inc.'s (WM.N: Quote, Profile, Research) chief executive said the largest U.S. savings and loan may set aside $500 million more than it had previously expected for loan losses in 2007, blaming a "near perfect storm" in the U.S. housing market. For details, see .

"Financials have been lagging," said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore.

"That's not going to change -- not until people get a better feeling of where we're heading, if we're going into a recession or not."

The Dow Jones industrial average (.DJI: Quote, Profile, Research) was up 17.72 points, or 0.14 percent, at 13,131.10. The Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) was down 0.40 point, or 0.03 percent, at 1,453.15. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was down 3.80 points, or 0.15 percent, at 2,561.90.

Recession fears dominated on Friday after a report showed employers cut jobs in August, sending all three major indexes down nearly 2 percent.

...more...

[UpInArms]

48. Fed's Yellen sounds the alarm

01. Yellen: Market turmoil has increased risks to economy
11:13 AM ET, Sep 10, 2007 - 4 minutes ago

02. Yellen: Fed needs forward-looking approach
11:13 AM ET, Sep 10, 2007 - 4 minutes ago

03. Yellen: Financial conditions can change quickly
11:13 AM ET, Sep 10, 2007 - 4 minutes ago

04. Fed's Yellen sees significant downside pressure on demand
11:13 AM ET, Sep 10, 2007 - 4 minutes ago

[Roland99]

50. 11:38am - Testing 13k level again?

Dow 13,040.63 -72.75
Nasdaq 2,538.03 -27.67
S&P 500 1,440.37 -13.18
Oil $75.95 $-0.75
10 YR 4.30% -0.07
Gold $712.00 $2.30

[JNelson6563]

51. 11:37 update

Dow 13,034.69 -78.69 (0.60%)
Nasdaq 2,539.20 -26.50 (1.03%)
S&P 500 1,439.29 -14.26 (0.98%)
10-Yr Bond 4.3110% -0.0570

Money fleeing the markets and flowing into Treasuries. Getting harder to tell the days apart when they all start to follow the same storyline.

Julie

[Roland99]

54. Jinx!

:)

[nadinbrzezinski]

52. Not unexpeced or surprising

but boy it is still gonna be fun NOT!

And I wish people understood why outside of the few who obviously do here

[Roland99]

58. Credit crunch to crimp hedge-fund bonuses: report

Credit crunch to crimp hedge-fund bonuses: report
http://www.marketwatch.com/news/story/hedge-fund-manager-bonuses-hit-credit/story.aspx?guid=%7BFD210881%2D823F%2D4A52%2D939A%2D20028A92BD3F%7D&dist=hplatest

Estimates for bonuses to be paid to hedge fund managers this year have been scaled back after the turmoil that unsettled global credit markets this summer, according to a report released Monday.

Cash bonuses are seen rising between 1% and 9% from the previous year, a "substantially lower" increase than predicted before the credit crunch, according to a study conducted by executive search firm Glocap Search LLC, Institutional Investors News and Lipper HedgeWorld.

Still, 2007 base salaries for investment professionals of all types working at hedge funds experienced single-digit increases, regardless of fund size or performance, the report said.

The hedge fund industry, which often charges 2% of assets and 20% of any investment gains, continues to enjoy some of the highest compensation levels on Wall Street.

Oh damn! How will they live?? How will they survive?!?!

[kineneb]

65. tell them to stop whining

-I have some spare USDA-issue tomato sauce and spaghetti noodles for them; tell 'em to tough it out. The rest of us already are doing so.

...kineneb, now investigating recipes for all those USDA free canned string beans...

my heart bleeds...

[JNelson6563]

60. 12:27 update

It appears our fortunes have taken a turn for the better. :-)

Dow 13,082.82 -30.56 (0.23%)
Nasdaq 2,553.95 -11.75 (0.46%)
S&P 500 1,446.63 -6.92 (0.48%)
10-Yr Bond 4.3160% -0.0520

Julie

[nadinbrzezinski]

64. Look at the day chart

it is flat

[Roland99]

67. Approaching the close and all's well!!

Dow 13,166.95 53.57
Nasdaq 2,569.94 4.24
S&P 500 1,456.55 3.00
10 YR 4.32% -0.04
Oil $77.49 $0.79
Gold $712.20 $2.50

[PATRICK]

69. Does anyone ever use the words

"has lost a thousand points" when describing the recent setback?

[nadinbrzezinski]

71. No

I have, when people tell me, but all is peachy...

I go, really?

I expect this to be bumpy, per pattern all week

[ozymandius]

72. a know-nonsense end to the day

Dow 13,127.85 Up 14.47 (0.11%)
Nasdaq 2,559.11 Down 6.59 (0.26%)
S&P 500 1,451.70 Down 1.85 (0.13%)
10-Yr Bond 4.324% Down 0.044
NYSE Volume 2,838,845,000
Nasdaq Volume 1,819,379,000

4:20 pm : In the wake of Friday's sell-off, the major indices opened today's session with a positive bias that was aided by bargain hunting interest and an upbeat third quarter outlook from Intel (INTC 25.35, -0.12).

Citing stronger than expected worldwide demand for its computing products, Intel boosted its revenue guidance to a range of $9.4 billion to $9.8 billion from $9.0 billion to $9.6 billion. In addition, Intel said gross margins are now expected to be at the upper end of its guidance for 52%, plus or minus a couple of points, indicating strong acceptance of its products.

Intel's good news, though, didn't take the market - or its own stock - very far. In fact, both Intel and the S&P 500 ended the day with modest losses after some roller-coaster action late in the session that saw the S&P swing from a loss of 14 points to a gain of 9 points and then back to a modest decline by the closing bell.

The buying momentum waned in the last half hour of trading when the S&P 500 again failed to hold above its 200-day moving average, which is viewed as a key technical level.

Prior to the late-day failure, buying activity in the comeback effort was broad-based and led by the influential financial (-0.1%), technology (+0.1%) and energy (-0.6%) sectors. Each of those groups faded into the close, though, to leave the major indices mixed and close to unchanged when it was all said and done.

Participation was limited in today's session. Volume at the NYSE just topped 1.2 billion shares; activity was heavier at the Nasdaq where 1.8 billion shares traded.

Several Fed officials gave speeches today that touched on the economic outlook. Per usual, there was enough room for interpretation in the body of those comments that they ultimately didn't have any significant impact on the proceedings. In other words, there was a little something for everybody, but ultimately, nothing of note for the market to really sink its teeth into as a uniting, or dividing, factor.

Separately, Countrywide Financial (CFC 17.21, -1.00) was a notable laggard following its announcement that it plans to cut nearly 20% of its workforce over the next three months as it deals with changing market conditions. Home Depot (HD 33.81, -0.40) also slipped after affirming its long-term sales and earnings forecasts, but acknowledging that it doesn't expect an improvement in the housing market until late 2008. (HINT: This is the bubble talking.)

Key happenings on Tuesday will include a speech on global imbalances from Fed Chairman Bernanke at 11:00 ET and the OPEC meeting in Vienna where the cartel is expected to leave production quotas unchanged at 25.8 million barrels per day.DJ30 +14.47 NASDAQ -6.59 SP500 -1.85 NASDAQ Dec/Adv/Vol 1931/1073/1.80 bln NYSE Dec/Adv/Vol 1890/1405/1.20 bln