STOCK MARKET WATCH, Tuesday October 9

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday October 9, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 469 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2468 DAYS
WHERE'S OSAMA BIN-LADEN? 2180 DAYS
DAYS SINCE ENRON COLLAPSE = 2141
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 October 8, 2007

Dow... 14,043.73 -22.28 (-0.16%)
Nasdaq... 2,787.37 +7.05 (+0.25%)
S&P 500... 1,552.58 -5.01 (-0.32%)
Gold future... 738.70 -8.50 (-1.15%)
30-Year Bond 4.86% -0.01 (-0.21%)
10-Yr Bond... 4.64% -0.00 (-0.04%)






GOLD, EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

[ozymandius]

1. Market WrapUp

Inconvenient Truths
BY ROB KIRBY

I’d like to spend a few minutes on a topic that Jim frequently covers on his radio program – Peak Oil. It bears mentioning – over-and-over – because too many folks are still caught up in the notion that Peak Oil is something “we all” don’t have to worry about in the here-and-now.

Nothing could be further from the truth.

-cut-

On a related note, I wonder how many folks have stopped to consider; is it really any wonder that the U.S. Petro-dollar hegemony – as measured by the US. Dollar Index – has entered uncharted territory at the very same time as global crude oil demand is exceeding supply?

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

[Demeter]

2. Gee, That Will Solve Everything (Mortgage Problems)

http://www.dailyreckoning.us/blog/?p=566

With millions of Americans stuck in subprime adjustable-rate mortgages due to reset in the next year, what can be done to ensure they won't go into foreclosure? The head of the FDIC says she has a cracker-jack idea:
...............................................................................................
The heat on U.S. mortgage lenders and servicers was turned up a few degrees this week when the country's chief bank regulator publicly proposed that they permanently freeze interest rates on subprime adjustable-rate mortgages (ARMs) for many homeowners.

"Keep it at the starter rate. Convert it into a fixed rate. Make it permanent. And get on with it," Federal Deposit Insurance Corp. Chairman Sheila Bair said in prepared remarks at an investor's conference…

Bair proposed that servicers convert only those ARMs that haven't reset yet and only for borrowers who are current in their payments and occupy their homes. Loans taken out by speculators who don't live in the homes they bought would not qualify for the automatic conversion.

Consumer advocates have also been calling on lenders and servicers to modify subprime mortgages to make the payments affordable for homeowners who would struggle to keep the house once their rates reset. But rate reductions, while they do happen in some cases, are far from widespread, they say.

"We can't just sit here doing this kind of case-by-case, laborious restructuring process with all these millions of subprime hybrid ARMs," Bair said, citing a recent Moody's survey, which found that less than 1 percent of problem subprime ARMs were being restructured.
.................................................................................................
Gee, that'll solve everything, won't it? Bair is telling the banking industry to swallow the losses and, in her words, "Get on with it." Easy for her to say, given Ms. Bair's background. Let's review her Wikipedia entry:
=================================================================================================
Before her appointment to the FDIC, Ms. Bair was the Dean's Professor of Financial Regulatory Policy for the Isenberg School of Management at the University of Massachusetts-Amherst since 2002. Other career experience includes serving as Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury (2001 to 2002), Senior Vice President for Government Relations of the New York Stock Exchange (1995 to 2000), a Commissioner and Acting Chairman of the Commodity Futures Trading Commission (1991 to 1995), and Research Director, Deputy Counsel and Counsel to Senate Majority Leader Robert Dole (1981 to 1988). While an academic, Chairman Bair also served on the FDIC's Advisory Committee on Banking Policy.
=====================================================================================================
In other words, a lot of wonky academic and government work and not a bit of practical experience doing real, practical, day-to-day… well, banking-type stuff.

The Survival Report's Mish Shedlock — who has decades of such experience — says there's another name for Ms. Bair's proposal — central planning.

The proposal to cap the Rate of ARMs is no different than long failed Russian central planners attempts to fix prices, President Nixon's foolish wage and price control mandates, the Fed's irrational insistence that it can "control" prices, or China's recent attempt to rein in price hikes by decree…

It should not take a genius to figure out that if ARMs rates are "frozen" at a point where the market does not think rates should be, there simply will be no more ARMs offered. Furthermore, to cover the cost of existing ARMS, prices would rise on new fixed rate mortgages. Oddly enough, price fixing ARMs would not even help the person most at risk because that person cannot afford the teaser rate, let alone the cost of a current ARMS rate. Thus price fixing ARMs is a sure fired guaranteed way to cause a continued weakness in home prices, if not an actual out and out crash.

But we shouldn't expect Ms. Bair to be any more cognizant of the consequences of her proposals than Alan Greenspan was of his 18 years of actions at the Fed, now should we?


QUERY: WOULD THE END OF THE ARM BE SUCH A HORRIBLE THING?

[InkAddict]

17. Due diligence was/is such a nuisance, says Bair

"We can't just sit here doing this kind of case-by-case, laborious restructuring process with all these millions of subprime hybrid ARMs," Bair said, citing a recent Moody's survey, which found that less than 1 percent of problem subprime ARMs were being restructured.

Don't they want to analyze how this situation really came to be??? Their own predation, greed and laziness (undocumented income loans?-huh?), uncontrolled medical costs and programs of no assistance,(insured or not), outsourcing of American jobs?

[UpInArms]

3. dollar watch

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

Last trade 78.846 Change +0.126 (+0.16%)

Dollar: Recession Postponed

http://www.dailyfx.com/story/topheadline/Dollar__Recession_Postponed_1191822336174.html

While Friday’s strong NFP report may not have definitively stopped speculation about a US recession, it certainly postponed its oncoming anytime soon. The labor data revealed that despite turbulence in capital markets, Main Street fared relatively well. In September US jobs grew by 100K and more importantly the reports for August and July were revised upward by a total of 118K jobs suggesting that growth may have slowed but not ceased.

The dollar initially gained on all the majors as EURUSD plunged in a knew jerk fashion, but the move was quickly reversed and the pair traded back above the 1.4150 level. There was talk in the markets of large buyers from Europe and Middle East at Friday lows. Certainly the 1.4030 level must have looked good to euro bulls who were looking to buy on the retrace back to the 1.40 figure. Furthermore, the good US employment number reignited risk appetite in the currency market driving all the high yielders yen crosses higher and taking the euro up in the process.

Still the rally in the EURUSD is clearly overdone and the pair looks like its in the process of setting a double top. The commentary from Fed officials suggests that the Fed may now hold at the October meeting and that fact should cap dollar weakness for the time being. Next week the key report will come on Friday as markets will focus on the Retail Sales data. If the consumer can remain resilient in the face of the housing fiasco and rising energy costs then the greenback may be able to finally put in a near term bottom-BS



...more...

US Dollar: What to Look for in the FOMC Minutes

http://www.dailyfx.com/story/bio1/US_Dollar__What_to_Look_1191878069081.html

A delayed reaction to Friday’s non-farm payrolls report as well as the market’s expectation for tomorrow’s FOMC minutes has taken the US dollar higher against every major currency today. Even the New Zealand dollar, which was firmer against the US dollar for most of the day turned lower towards the end of the US trading session. Tomorrow’s FOMC minutes are from the September 18th monetary policy meeting, which was when the central bank lowered both the Fed funds and discount rate by 50bp each. Although the credit markets have stabilized quite a bit since the rate cut and there have been no new blowups in the financial sector, the Fed’s reasons for taking the preemptive move could still trigger sharp market movements. If thee Fed decided to deliver the larger interest rate cut not because the US economy needed it, but because they wanted to avoid making successive cuts, then that would lower the likelihood for interest rates to be cut at the end of the month and consequently rally the US dollar. On the other hand if the move was taken because the Fed felt that the US economy had deteriorated so much that a 50bp Fed Funds and discount rate cut was necessitated, then that would be bearish for the US dollar. We expect the market to react more significantly to the former rather than the latter because recent economic data including non-farm payrolls could give the Fed the luxury of waiting until December before lowering interest rates again. Towards the end of the week, our focus will turn to trade, inflation and consumer spending. The weakness of the US dollar should help to narrow the trade deficit while boosting inflation. Consumer spending is the biggest potential market mover this week (it is not due out until Friday). The strength of payrolls in September and the upward revision to retail sales in August suggest that retail sales could be stronger than the market is currently expecting. Overall, it seems to be shaping up to be a dollar positive week.

...more...

[UpInArms]

4. The Short View: Weak dollar

http://news.yahoo.com/s/ft/20071008/bs_ft/fto100820071446417279

This equity rally lacks conviction. The Dow Jones Industrial Average and the S&P 500, the most watched US indices, have retouched all-time highs, suggesting a belief that the summer money-market crisis is behind us. But they seem exhausted by the effort.

Meanwhile, European markets remain below their highs. The sectors that benefit most from economic growth - materials, financials and consumer discretionary stocks - still lag behind their July highs, as do smaller companies. The rally is led by US multinationals and, spectacularly, by the biggest emerging markets.

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

Why? It looks like the rally is about two related bets: that the dollar will continue to weaken and that the Fed will make money cheaper with more cuts to the Fed Funds rate. That explains the surge of funds into emerging markets and the outperformance of companies with profits outside the US. They benefit from a weak dollar.

Both those bets look in jeopardy. Since its low at the end of September, the dollar has enjoyed a bounce this month. It is up about 1.5 per cent from its lows against a trade-weighted index.

...more...

[Ghost Dog]

11. Asian Stocks Rise to Record

These businesses don't need a stable dollar and a more buoyant US consumer, then? There's no doubt the 'regional' market and regional 'consumer' are growing apace...

Asian Stocks Rise to Record; Honda Motor, Bharti Airtel Advance
http://www.bloomberg.com/apps/news?pid=20601080&sid=ackuKsbsmTAU&refer=asia

Oct. 9 (Bloomberg) -- Asian stocks rose, driving indexes in eight countries to records. Honda Motor Co. led Japan's exporters higher after the yen reached a two-month low against the dollar.

India's Sensitive Index surged 4.5 percent, the biggest gain among Asia's benchmarks, after Citigroup Inc. boosted its price targets for Bharti Airtel Ltd. on expectations of higher earnings. Bank of Communications Ltd. lifted Hong Kong's Hang Seng Index to a record on speculation funds from China's mainland will pour into local equities as the government eases investing rules.

``There's still a lot of liquidity trying to find a home,'' said Lim Kok Boon, chief investment officer at Fortis Private Banking in Singapore. ``Here the valuations are good, domestic confidence is strong. We're still pretty upbeat about the region's prospects.''

Taiwan's Chi Mei Optoelectronics Corp. climbed after it reported a 68 percent rise in sales last month. Hyundai Heavy Industries Co. led gains among shipbuilders after Goldman, Sachs & Co. said higher vessel prices will lead to ``strong'' earnings.

Benchmarks in China, Australia, Hong Kong, South Korea, Singapore, India, Indonesia and Pakistan climbed to intraday or closing records. The Morgan Stanley Capital International Asia- Pacific Index rose 0.5 percent to 166.69 as of 8:02 p.m. in Tokyo, set to surpass the previous record close of 166.41 on Oct. 3.

Indexes in New Zealand, Taiwan, the Philippines and Sri Lanka were the only decliners. The Nikkei 225 Stock Average added 0.6 percent to 17,159.90 in Japan, where the market was closed yesterday, catching up with a rally fueled by a pickup in U.S. hiring.

/...

[Ghost Dog]

12. Brics: coherent strategy or catchy name?

http://news.yahoo.com/s/ft/20071009/bs_ft/fto100920070131407372;_ylt=Ajm.lo_3coeZcIlQuy8Pzvj2ULEF

It is nearly six years since "Brics", encompassing the might of the fast-growing economies of Brazil, Russia, India and China, entered the financial lexicon. Today the catchy acronym has a second home - in the portfolios of investors attracted by so-called Bric funds.

The term - coined by Jim O'Neill, head of global economic research at Goldman Sachs (NYSE:GS) - spawned a popular investment trend. EPFR Global, a Cambridge, Massachusetts-based research firm, estimates that about $13.38bn is invested in the 18 Bric funds it tracks.

Fans of the Bric concept say the four emerging market powerhouse economies account for about a third of global growth and represent a virtuous cycle: China and India are big consumers of commodities and building materials, while Russia is a leading oil producer and Brazil is rich in natural resources.

"Brics are the engine room of growth in the global economy," says Allan Conway, head of global emerging market equities at Schroders. These countries "are on a journey from early emergence to full emergence. That journey will take 10-15 years and investors are likely to see returns measured in 100s of per cent but it won't be a straight line and investors need to look through the volatility".

/more ...

[Ghost Dog]

13. ECB pledges indefinite liquidity boosts

http://news.yahoo.com/s/ft/20071008/bs_ft/fto100820071801477315;_ylt=AoTcG3FIH0RUe960ZGvcu_f2ULEF

The European Central Bank pledged on Monday that it would inject extra liquidity into money markets for as long as is necessary in order to stabilise short-term interest rates.

The move suggested that the ECB had accepted its work in attempting to ease financial market tensions was far from completed.

"The ECB continues to closely monitor liquidity conditions," it said in a statement ahead of its latest weekly refinancing operation, and would aim to reduce "volatility" in short term rates around its 4 per cent main policy interest rate.

With three-month euro Libor - the average interbank rate offered in London for the single currency for the next three months - trading at 4.767 per cent, close to the six year high of 4.795 per cent recorded last week, market participants backed the ECB stance.

Amanda Sudworth, director of interest rate derivatives at Liffe, the international derivatives exchange based in London, said: "The market has normalised a bit since the summer, but interbank rates are still high because of the continuing uncertainty in the market."

She said short-term money market rates suggested there was still tension in the system.

With many in the market expecting the ECB to raise base rates from 4 per cent, three-month euro Libor would in normal times trade at about 25 basis points higher, rather than nearly 80bp higher.

/...

[Ghost Dog]

14. European shares rise

European shares rise with Sanofi-Aventis in lead
Tue Oct 9, 2007 1:09 PM BST
http://today.reuters.co.uk/news/articleinvesting.aspx?type=eurMktRpt&storyID=2007-10-09T120941Z_01_L09673022_RTRIDST_0_MARKETS-EUROPE-STOCKS-UPDATE-2.XML&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage3

FRANKFURT, Oct 9 (Reuters) - European shares were higher at midday on Tuesday led by French pharma group Sanofi-Aventis, up 2.5 percent on takeover talk, and with telecoms and utilities stocks lending support.

Trading was quiet ahead of U.S. aluminium maker Alcoa's (AA.N: Quote, Profile , Research) results, which traditionally kick off the U.S. quarterly earnings season, as well as the minutes of the Federal Reserve's Sept. 18 policy meeting at which it cut key intererst rates, sparking a rally in stock markets.

...

By 1140 GMT the FTSEurofirst 300 index <.FTEU3> of leading European shares was up 0.27 percent at 1,583.92 points. The DJ EuroSTOXX 50 index <.STOXX50E> was 0.1 percent higher.

Charts suggested that the EuroSTOXX 50 was "heavily overbought," UniCredit said in a technical analysis note.

/...

[Ghost Dog]

18. China resists European pressure on currency

http://news.yahoo.com/s/ft/20071009/bs_ft/fto100920070832287419;_ylt=Ai0nfEcbiPPjMn40t2iu9j32ULEF

The European Union and China locked horns over exchange rates on Tuesday after the Chinese authorities deflected a European call for a rise in the level of the renminbi.

Only hours after eurozone finance ministers said the renminbi's exchange rate should more accurately reflect China's vast and growing current account surplus, China's central bank set a noticeably low official reference rate for the currency against the dollar. Market participants interpreted the action as a signal that China had no intention of yielding to foreign pressure for a faster appreciation of the renminbi against the currencies of its western trade partners.

The EU is frustrated with the euro-renminbi exchange rate not only because of China's ever-increasing trade surplus with Europe, but also because the dollar's decline means that the euro is bearing the brunt of China's reluctance to allow an appreciation of the renminbi. "China and other emerging nation economies should introduce more flexibility in their exchange rate management. This is good for China's growth," Joaquin Almunia, the EU monetary affairs commissioner, said before the start yesterday of an EU finance ministers' meeting.

The 13-nation eurozone's ministers broke new ground on Monday night with a statement that for the first time identified the renminbi's level as a greater source of concern to Europe than the level of the dollar or yen.

...

While the European trade deficit with China has continued to grow this year, the renminbi has fallen by at least 5 per cent against the euro over the past two years.

However, the strong words on China obscured to some extent the European ministers' inability to find common ground for a tough statement on the dollar's fall last week to all-time lows against the euro. The ministers confined themselves to noting "with great attention" that US policymakers had stated that a strong dollar was in the US economy's interests - an observation that US officials would have little difficulty in endorsing.

For many eurozone ministers, the problem was that the use of stronger language against the Americans might have risked playing into the hands of France and its unremitting public campaign against the ECB. Nicolas Sarkozy, France's president, and his government have demanded that the ECB play a more active role in bringing down the euro against the dollar, if necessary by cutting interest rates. But Germany, backed by Austria, the Netherlands and other governments, are extremely wary of any initiatives that risk compromising the ECB's independence from political interference.

/...

[UpInArms]

5. Today's Cooked Book Release:

Oct 9 2:00 PM
FOMC Minutes
Sep 18

[UpInArms]

34. FOMC - YeeHaw! Let's go Rate-Cuttin'!

13. Fed had first conference call on markets on Aug. 10
2:00 PM ET, Oct 09, 2007 - 2 hours ago
14. Some Fed members worried discount rate cut wouldn't work
2:00 PM ET, Oct 09, 2007 - 2 hours ago

15. One Fed member questioned need for Aug. 17 discount rate cut
2:00 PM ET, Oct 09, 2007 - 2 hours ago

16. FOMC bit more confident drop in inflation would be sustained
2:00 PM ET, Oct 09, 2007 - 2 hours ago

17. Some anecdotal reports hinted at slowdown: FOMC minutes
2:00 PM ET, Oct 09, 2007 - 2 hours ago

18. Fed staff trims Q4, 2008 growth forecast after turmoil
2:00 PM ET, Oct 09, 2007 - 2 hours ago

19. Fed took no action on market steps, keep reviewing options
2:00 PM ET, Oct 09, 2007 - 2 hours ago

20. FOMC left out risk statement, did not want to appear certain
2:00 PM ET, Oct 09, 2007 - 2 hours ago

21. FOMC agreed half-point cut on Sept. 18 was prudent course
2:00 PM ET, Oct 09, 2007 - 2 hours ago

22. Fed discussed further steps to help markets on Sept. 18
2:00 PM ET, Oct 09, 2007 - 2 hours ago

23. FOMC minutes: Future moves depend on markets, other factors
2:00 PM ET, Oct 09, 2007 - 2 hours ago

[UpInArms]

35. Fed's Yellen - out there flapping lips - rate cuts!!!

01. Yellen: Effects of turmoil likely to show up in Q4, not Q3
3:40 PM ET, Oct 09, 2007 - 25 minutes ago

02. Yellen says exports might not boost U.S. growth
3:40 PM ET, Oct 09, 2007 - 25 minutes ago

03. Yellen sees downward pressure on growth from turmoil
3:40 PM ET, Oct 09, 2007 - 25 minutes ago

04. Yellen: Half-point cut needed so not to fall behind curve
3:40 PM ET, Oct 09, 2007 - 25 minutes ago

05. Yellen said rates were restictive before the Sept. meeting
3:40 PM ET, Oct 09, 2007 - 25 minutes ago

06. Yellen saw case for rate cut even if no financial shock
3:40 PM ET, Oct 09, 2007 - 25 minutes ago

07. Yellen says inflation is 'well contained'
3:40 PM ET, Oct 09, 2007 - 25 minutes ago

08. Fed's Yellen says keeping open mind about future rate moves
3:40 PM ET, Oct 09, 2007 - 25 minutes ago

[UpInArms]

6. Coors, Miller to combine operations (to create a new toxic brew)

http://news.yahoo.com/s/ap/20071009/ap_on_bi_ge/molson_coors_sab_miller?_ylt=AlS1QRlg.hkBKKltipIuSST3ULEF

DENVER - Brewers Molson Coors Brewing Co. and SABMiller PLC said Tuesday they will combine their U.S. operations in a joint venture.

The makers of Miller Lite, Original Coors and Coors Light said they will share ownership equally in the new venture which they said should help them compete more effectively.

The industry leader in the United States is Anheuser-Busch Cos., maker of Budweiser, Michelob and Bud Light.

The financial terms of the deal were not disclosed.

The new company will be called MillerCoors, the companies said. London-based SABMiller, which brews Miller Lite as well as a slew of European beers, and Molson Coors, the brewer of Coors Light and the craft beer Blue Moon, will each have a 50 percent voting interest in the venture and have five representatives on its board of directors.

Under the terms of the agreement, the companies said they will conduct all of their U.S. business exclusively through the venture.

...more...

edited to fix link

[CatholicEdHead]

23. Yuck

I do not think the futures are very good on this. A light beer is a light beer, yuck.

/self-proclaimed beer snob

[ozymandius]

37. Now you can have cow piss and horse piss in the convenience of the same bottle.

:puke:

[UpInArms]

7. S&P expects U.S. unemployment to rise further

http://news.yahoo.com/s/nm/20071009/bs_nm/sp_economy_us_dc

MUMBAI (Reuters) - The chief economist of international ratings agency Standard and Poor's expects unemployment in the U.S. to rise further and said the world's largest economy was only halfway through the present housing crisis.

"I still think we are not through with the housing crisis yet -- housing starts are going to drop further, the unemployment rate is going to tick up further, we are expecting another year of sluggish U.S. economic growth. We are not halfway through with this crisis yet," David Wyss, S&P's chief economist, told reporters in Mumbai on Tuesday.

[AnneD]

36. Not if the gov can continue....

to low ball the numbers then go back at a quiter time and readjust. Gee, how many times, esp since Bush was in office have they done that?

[UpInArms]

8. Defaults to rise if credit squeeze persists -S&P

http://www.reuters.com/article/bondsNews/idUSL0971440120071009?sp=true

LONDON, Oct 9 (Reuters) - More companies around the world will default on their credit payments if the present credit squeeze persists, ratings agency Standard & Poor's said in a report published on Tuesday.

Recent turmoil in the credit markets has reduced investor's appetite for risk, limiting the options of struggling companies to refinance, the report said.

"The current market correction is refocusing investors on the realities of credit risk and a sounder balance between risk and rewards," the report said.

Companies with a 'B' or lower rating are expected to be especially hit, Standard & Poor's said. Liquidity has already dried up for high-yield issuers and has impacted the U.S. and European commercial paper markets.

By sectors, chemicals, metals and mining, telecommunications and media may be more vulnerable to the credit shortage, especially in countries such as Britain, Germany, Italy, Turkey and Russia, the report said. "Covenant breaches could prevent companies from further drawing on backup facilities as banks become more cautious and possibly seek to restrict corporate lending to preserve their own liquidity," the report said.

However, the credit squeeze is not expected to be as bad as the credit downturn in 2001 to 2003, when European companies defaulted on debt of about 26.5 billion euros ($37.2 billion), the report said.

...more...

[UpInArms]

9. S&P says underestimated extent of mortgage fraud (outsourced reporting from Mumbia)

http://www.reuters.com/article/bondsNews/idUSBMA00164820071009

MUMBAI (Reuters) - The chief economist of Standard and Poor's said on Tuesday that the ratings agency had underestimated the extent of fraud in the U.S. mortgage industry.

"We underestimated the extent to which fraud was occurring in the industry," David Wyss, S&P's chief economist, said at a news conference in Mumbai.

"It looks, based on some surveys that had been done, the extent of frauds increased sharply in 2006."

[TrogL]

39. So they finally decided it was time to get their heads out of their asses?

A little late now.

[UpInArms]

10. S&P says subprime defaults may reach $150 billion (again from Mumbia)

http://www.reuters.com/article/bondsNews/idUSBOM1564320071009

MUMBAI (Reuters) - The chief economist of international ratings agency Standard and Poor's said on Tuesday that losses from the U.S. subprime mortgage crisis will not peak until 2009, and estimates defaults will total $100 billion to $150 billion.

"These problems are not over. We think in the United States the housing market is not going to bottom until winter. We think the losses in these sectors won't really hit their peak until 2009," David Wyss, S&P's chief economist, said at a news conference in Mumbai on Tuesday.

[KoKo]

26. hmmm....so we have to get the Real News about our Economy from Mumbai these days....

Figures... Sure can't find much here but hype, coverup, hype and more hype. :-(

[Ghost Dog]

15. Large investors wary of new bull market

http://today.reuters.co.uk/news/articleinvesting.aspx?type=stocksNews&storyid=2007-10-09T112806Z_01_NOA940886_RTRUKOC_0_INVESTORS-ANALYSIS.xml&WTmodLoc=InvArt-C2-AlsoToday-3

LONDON (Reuters) - Institutional investors may be tilting away from risky assets just as equity markets across the world are hitting record highs.

If correct, it may bode badly for future equity gains and make markets particularly vulnerable to sudden shocks.

Flow data from both financial services firm State Street and fund tracker EPFR Global suggest that long-term investors, many of whom bought into the market turbulence of August, are less bullish than actual market moves would imply.

/details ...

[Roland99]

16. IOW, a sucker rally.

[AnneD]

20. Morning Marketeers.....

:donut: and lurkers. So Ghost.... it seems like the institutional investors don't have the appetite for BRIC or risk either. I have my only 403b account with AXA (until I get it out). Glad to see they are going to have a cash position for a while.

We still have at least 2-5 years before the Real Estate market to correct IMHO, and that can be made longer and deeper if proper is not taken. Everything from legislating loan programs, to setting standards for bond ratings. Let's throw in a few tax laws to keeps jobs in this country instead of exporting. There needs to be more transparency and honesty in book keeping. And while we are at it, how about a little less greed. Hubby and I would love to buy a house but we are realistic about what we can afford on our income and have refused to be suckered in to more than we could afford. Contractors and developers-want to be employed-build affordable homes. There are millions of us waiting for affordable houses. You may not make as much profit...but you won't suffer a loss either.


Happy hunting and watch out for the bears.

[Ghost Dog]

28. On the other hand, there's liquidity in "expanding markets",

lots of it, we're told. I reckon it's that the big money is increasingly in "private equity funds" and other more "opaque" instruments and activity.

[jdog]

19. Scary.

Other than gold, where the heck are you supposed to put your money that's safe anymore???

Snip:

People view MM funds as safe havens for cash and forget about any potential risk based on a long history of stability, but there's risk in everything and instability is at an all-time high. If the MM Funds fail to hold a $1 NAV because they were in junk paper chasing yield we could have a New Era Bank Run. An Old Era Bank Run is one like Northern Rock just suffered through. A New Era Bank Run will take place on a computer as investors desperately attempt to move their money out of sub-par MM Funds. Eventually it could spread to any and all MM funds. As we've seen, once confidence is lost it's very hard to restore.


http://www.321gold.com/editorials/chuhran/chuhran100907.html

[DemReadingDU]

29. It is scary

Maybe we should just take out our money in MM funds and stash it under the mattress, or freeze it.

I don't even know if a bank CD is even safer than MM funds. Oh the FDIC insures for $100,000 at a bank, but if there if the dollar becomes worthless, then nothing guarantees nothing.

:(

[specimenfred1984]

31. Gold's just as manipulated as everything else

http://finance.yahoo.com/q/bc?s=%5EDJI&t=2y&l=on&z=m&q=l&c=gld

[DemReadingDU]

33. That's a cool chart! n/t

[TrogL]

40. Foreign currencies?

Loonie? Euro? Ozzie? Kiwi?

Take your pick.

[antigop]

21. Wachovia in $140M credit facility

http://biz.yahoo.com/bizj/071009/1532233.html?.v=1

>>
Wachovia Corp. is the co-syndication agent on Knight Capital Group Inc.'s recent credit facility of up to $140 million.

The Jersey City, N.J.-based finance company established two $70 million lines of credit with a syndicate of banks. The first line can be drawn upon until Dec. 31 and repaid within three years. The second line can be drawn upon for the next three years before being repaid.
>>

[Roland99]

22. 11:24am- All's well across the board

Dow 14,073.81 +30.08
Nasdaq 2,791.46 +4.09
S&P 500 1,556.18 +3.60
10 YR 4.63% -0.01
Oil $80.05 $1.03
Gold $745.50 $6.80

[Buttercup McToots]

24. Congressman: Dollar Could Collapse To Absolute Zero

Congressman: Dollar Could Collapse To Absolute Zero

--------------------------------------------------------------------------------

Presidential candidate Ron Paul warns of coming global economic depression

Monday, October 8, 2007

Presidential candidate Ron Paul has made a dire prediction that the dollar could collapse to absolute zero - precipitating hyper inflation, soaring oil prices and a global economic depression if current policies are continued.

"Once they realize the American people have awakened to the con game that's been going on - I think those people running the banking and monetary system aren't going to be too happy," Paul told the Alex Jones Show on Friday.

The Texas Congressman forecasts that if current policies are prolonged, the dollar could crash all the way to nothing and be forced to start over.


If Bush is foolish enough to start bombing Iran, that might precipitate such a crisis as oil going to $200 dollars a barrel and really dampening the enthusiasm of the whole dollar," said Paul.

"If they continue what they're doing, it's gonna go to zero, we're gonna have runaway inflation, all paper currencies eventually self-destruct and are ruined, and we're in uncharted waters right now - this is the first time in the history of man you've had no solid currencies around the world and this has been going on for 35 years."

Paul agreed that elitists would seize upon a global depression by posing as the saviors and offering more control, police state and big government as the solution.

"This was the whole thing that started in the last depression," said Paul, "Scare people to death instead of blaming the Federal Reserve for the depression and the financial bubble of the 20's, they said 'well capitalism failed, it was that stupid gold standard', therefore we have to have welfare and of course everything they did prolonged the depression."

Paul said his warnings about the impending collapse of the U.S. economy, which stretch back years, were helping his campaign gain credibility due to the unfolding crises in the market and the credit crunch.

"When the people understand how the Fed screws up the economy and causes all the bubbles and all the changes that have to come from that, I'm getting a lot more calls," said Paul.

The Congressman also discussed the continued success of his campaign and the establishment's attempts to stifle its importance.

The presidential candidate said the reason that the Democrats and Republicans are trying to speed up the primaries is because they don't like competition from third party and grass roots candidates and are trying to prevent them from gaining traction.

"The move right now is to try to close the primaries - do you think they're sincere when they say they want to have a big tent and invite new people in? They can invite a lot of new people in but they don't want constitutionalists evidently because they want to make it tough to vote in a Republican primary," said the Congressman.

"It confirms the fact that the control of this whole system has been one party so to speak, it's one group of people that control both parties and right now I think the people are getting disgusted with it and they're starting to wake up," he added.

The Congressman stated that the popularity of his campaign outstripped even his expectations and slammed the establishment networks for attempting to skew Paul as a fringe candidate.

"It doesn't discourage our supporters, it enrages them," said Paul, "They always claimed that there were just a few of us out there that cared and that they were bloggers manipulating the Internet - well you can't manipulate to the point where you get 35,000 new donors who average about $40 dollars a piece and raise $5 million dollars and outpace many of the other candidates."

Paul said the other candidates had initially tried to ignore his platform, before ridiculing it, to the point where they are now being forced to adopt constitutionalist rhetoric in order to compete with his burgeoning popularity.

[CatholicEdHead]

25. If we bomb Iran, there goes the petrodollar

and there goes the US dollar into global market freefall.

[TrogL]

27. Just what we need - President Gold Bug

[TrogL]

30. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



30-day vs. Euro, Yen, UK Pound and Swiss Franc




Currency Comparison: http://members.shaw.ca/trogl/looniewatch.html

Detailed analysis: http://quotes.ino.com/exchanges/?r=CME_CD

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.Y%24%24&v=s&w=5&t=l&a=1

Historical values http://www.x-rates.com/d/USD/CAD/data30.html

2007-09-10 Monday, September 10 0.949487 USD
2007-09-11 Tuesday, September 11 0.958773 USD
2007-09-12 Wednesday, September 12 0.964134 USD
2007-09-13 Thursday, September 13 0.968617 USD
2007-09-14 Friday, September 14 0.971628 USD
2007-09-17 Monday, September 17 0.970214 USD
2007-09-18 Tuesday, September 18 0.977135 USD
2007-09-19 Wednesday, September 19 0.985513 USD
2007-09-20 Thursday, September 20 0.998901 USD
2007-09-21 Friday, September 21 0.999201 USD
2007-09-24 Monday, September 24 0.998901 USD
2007-09-25 Tuesday, September 25 0.9995 USD
2007-09-26 Wednesday, September 26 0.99552 USD
2007-09-27 Thursday, September 27 0.99691 USD
2007-09-28 Friday, September 28 1.00412 USD
2007-10-01 Monday, October 1 1.00715 USD
2007-10-02 Tuesday, October 2 0.9998 USD
2007-10-03 Wednesday, October 3 1.00392 USD
2007-10-04 Thursday, October 4 1.002 USD
2007-10-05 Friday, October 5 1.01885 USD
2007-10-08 Monday, October 8 1.01885 USD

Current values

http://quotes.ino.com/exchanges/?r=CME_CD)

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash          1.0117 1.0175 1.0117 1.0175 +0.0041 +0.40% 
CD.Z07 Dec 2007      1.0128 1.0184 1.0120 1.0184 -0.0010 -0.10% 
CD.H08 Mar 2008      1.0148 1.0180 1.0148 1.0180 -0.0018 -0.18% 
CD.M08 Jun 2008      0.9495        0.9495 1.0201 0.0000   0.00% 
CD.U08 Sep 2008      1.0163 1.0195 1.0163 1.0185 -0.0019 -0.19% 
CD.Z08 Dec 2008      0.9530 0.9530 0.9530 1.0205 0.0000   0.00% 
CD.H09 Mar 2009      1.0055 1.0060 1.0050 1.0206 0.0000   0.00% 

Other combinations:

AU.Z07 AUSTRALIAN $/US$ Dec (NYBOT)          0.8944  -0.0005 
HY.Z07 CANADIAN $/JAPANESE YEN Dec (NYBOT) 117.57    -0.64 
GB.Z07 EURO/BRITISH POUND Dec (NYBOT)        0.69360 +0.00075 
EP.Z07 EURO/CANADIAN $ Dec (NYBOT)           1.38885 +0.00025 
EJ.Z07 EURO/JAPANESE YEN Sep (NYBOT)       163.820   -0.375 
EU.Z07 EURO/US$ (LARGE) Sep (NYBOT)          1.41005 -0.00560 

Blather (from http://quotes.ino.com/exchanges/?r=CME_CD)

The December Canadian Dollar was lower overnight as it consolidates some of last Friday's rally but remains above the previous high crossing at 1.0101. Stochastics and the RSI are overbought but are neutral signaling that sideways to higher prices are possible near-term. Upside targets are hard to project as December continues to extend this fall's rally into new uncharted territory. Closes below last Thursday's low crossing at .9990 would confirm that a short-term top has been posted. First resistance is last Friday's high crossing at 1.0225. First support is the 10-day moving average crossing at crossing at 1.0075 then last Thursday's low crossing at .9990.


Analysis

The bot really needs to get out more. Yesterday it was claiming no trading for Columbus day. Sorry, bot, yesterday was Canadian Thanksgiving. AFAIK, the bot generates these numbers based upon the fundamentals of the Canadian economy and past market behaviour. Unforunately, its a Brave New World out there. The Canaidan economy used to have one type of relationship with the US based upon the US having primary fundamentals. Those fundamentals are gone and the Canadian economy is re-writing itself based upon new realities. Past Liberal Governments (full disclosure - I'm a card-carrying Party member) spent a fortune on junkets to China and fostering an economic climate where innovative startups could flourish in niche markets. Now it's all coming to fruition in nanotech, medicine and even gaming, which is now Big Business. The US government tooks its tax dollars and gave them to the rich. Canada's educational system fosters an educated, flexible workforce and its health care system keeps them healthy. As a result, Canadian workers can live comfortably if not lavishly on the kinds of income that US workers would refuse to work for. Hence, a number of industries eg. call centres have moved to the Great White North. Both my daughters work in call centres for US companies and my son's in talks with Bioware.

Bluntly, my kids have your jobs. Blame Dubya.

[specimenfred1984]

32. Stocks love recession, collapsing dollar, bubble, stagflation and war!

Either that or stocks are rigged and propped up like never before. Take your pick.

[Amonester]

41. The day-traders who gambled on buying low today...

will bank in tomorrow by selling high, and they'll gamble their floor low again "praying" for the day after (or a few).

Long-term investors are keeping away from the casino these days around...

[ozymandius]

38. FOMC innuendo means evrybody gets a pony.

Dow 14,164.53 Up 120.80 (0.86%)
Nasdaq 2,803.91 Up 16.54 (0.59%)
S&P 500 1,565.15 Up 12.57 (0.81%)
10-Yr Bond 4.651% Up 0.013
NYSE Volume 2,872,891,000
Nasdaq Volume 1,907,886,500

4:25 pm : The equity market was in a meandering mode for a good part of Tuesday's session, but it soon perked up following the release of the FOMC Minutes from the September 18th meeting.

The end result is that the Dow and S&P 500 both closed at new highs in a low volume move while the Nasdaq logged its fourth consecutive winning session. Remarkably, the Nasdaq is now up 17% from its August 16th low.

With respect to the rally that followed the release of the minutes, we aren't buying the notion that it was predicated on a sense of optimism that the Fed will again cut rates at the October 31 FOMC meeting.

On the contrary, our interpretation of the minutes was that they did more to weaken the case for a rate cut than they did to strengthen it.

The Fed noted that future actions would depend on the economy and market developments. Although the Fed could cut rates again if economic growth weakens, recent data and the behavior of the capital markets suggest otherwise.

In looking at the rally, the explanation that makes sense is that it was driven by a sense of optimism that the economy is in good enough shape that another rate cut isn't needed. To be sure, it is more important for the market that the economy not enter a recession than it is to get another rate cut.

Our view aside, there was no mistaking the bullish bias in the market following the release of the minutes. The late day surge was powered by broad-based buying interest and was led by a resurgent financial sector (+0.8%) that was in negative territory prior to the minutes.

Goldman Sachs (GS 239.20, +12.24) was a winning standout whose outperformance provided a real boost for other financial stocks.

All ten economic sectors closed the day with a gain. The biggest movers were the materials (+2.0%), energy (+1.8%) and utilities (+1.4%) sectors. The consumer staples sector (+0.2%) brought up the rear as it was held back by a relatively weak showing from many retailers ahead of the September same-store sales reports later this week.

The tech sector (+0.6%), which has been so strong of late, underpeformed the broader market, yet it was underpinned by leadership from Microsoft (MSFT 30.10, +0.26). The latter stock rose in response to Goldman Sachs lifting its profit estimates for 2008, 2009 and 2010.

Despite the stock rally, the dollar came under some pressure as seen in the 0.2% decline in the dollar index (DXY). The dip in the greenback helped spark buying interest in the commodity arena. Oil futures tacked on 1.4%, rising to $80.13 per barrel, while gold futures jumped 0.6% to $743.10.

In Wednesday's trade, the weekly inventory report from the Dept. of Energy and the earnings report from Aloca (AA 39.752, +1.42) will be focal points.DJ30 +120.80 NASDAQ +16.54 SP500 +12.57 NASDAQ Dec/Adv/Vol 1244/1711/1.89 bln NYSE Dec/Adv/Vol 1007/2277/1.16 bln