STOCK MARKET WATCH, Wednesday February 20

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday February 20, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 336
DAYS SINCE DEMOCRACY DIED (12/12/00) 2586 DAYS
WHERE'S OSAMA BIN-LADEN? 2312 DAYS
DAYS SINCE ENRON COLLAPSE = 2603
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 February 19, 2008

Dow... 12,337.22 -10.99 (-0.09%)
Nasdaq... 2,306.20 -15.60 (-0.67%)
S&P 500... 1,348.78 -1.21 (-0.09%)
Gold future... 929.80 +23.70 (+2.62%)
30-Year Bond 4.66% +0.06 (+1.31%)
10-Yr Bond... 3.88% +0.10 (+2.51%)






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: Decoupling Discredited and Deflation

BY FRANK BARBERA, CMT

As we look ahead at the deteriorating financial landscape it is hard, if not impossible, to see what, if anything, could begin to arrest the brewing ‘perfect storm.' Yes, we know the Fed has cut rates, and that lower rates will eventually equate to a positively sloped yield curve, which will help re-liquefy the banks. Yet, there are so many domino style pieces that seem irrevocably interconnected in today’s global financial system that it is hard to see how the ‘daisy chain’ of cascading debt defaults will be stopped and brought under control. Perhaps the most imminent threat comes from the monoline insurers, where rating agency downgrades seem poised to force at least another $150 Billion in write-downs on ABS portfolios for various financial institutions which already have massive losses. Of course, this week should be quite the tell, as last week New York State Governor Eliot Spitzer gave the monolines, AMBAC and MBIA just five days to come up with and devise their own rescue plan or else face a potential break up by the New York State Insurance regulator. As the week develops, there are several directions this unfolding drama can take, including a belated bank rescue, a take over by New York State, or ultimately, a Federal Bailout.

To date, odds seem to be fading rapidly for any hope of a bank-led rescue fund, as had been thought only a few weeks ago. Instead, banks are hoarding capital to shore up their sagging loan-loss reserves. At the same time, under Mr. Spitzer’s proposal, if New York State takes over, the companies will see their healthy assets and damaged assets separated into individual companies. The thought along these lines would be to help shield the 2.6 Trillion dollar municipal bond market from being downgraded in tandem with the monolines. Because the monolines have been the big players in the muni-bond market, any downgrade of the monolines would automatically hurt the ratings of umpteen billions of values in muni-bonds. This would make it infinitely more difficult for State and Local governments to raise cash to help fund government projects, as without insurance, these bonds would trade at much higher yields.

However, the downside to Mr. Spitzer’s plan seems to be that in separating out the good from the bad assets, that those companies holding the bad assets would be, in all likelihood, nearly worthless. This could then force the major banks to realize even larger write-downs on assets in coming quarters exposing the broad financial system to the threat of a systemic banking shock. Another option which is also being discussed is that of a Federal Government take-over, wherein it would be hoped that the full faith and credit of the US Government would restore the bad credit of the monocline insurers. Unfortunately in this scenario, the exact opposite outcome would likely unfold with the bad credit of the financial sector dragging down the good faith in US government debt, which would likely see Bond yields rise.

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

[TalkingDog]

34. This reminds me of one of my bad days.

Once or twice a year, I'll have a totally cr@ppy day. Not just your average bad day. Those tend to have the edge blunted after venting to someone...anyone about that one niggling thing that has bugged the bejeebus out of you all day.

No, I mean a day that starts bad - sometimes in the dream life - and goes downhill from there. Nothing feels right, taste right, looks right. Any stupid, petty thing that can happen, will. Sometimes in spades. Any mouth-breathing, no-necked monster in your vacinity somehow develops a type of psychic radar that allows them to hone in on your location and compound the day by leaving their sticky, odiferous,loud children to run loose in the aisle you are in and then slinging their head around the end cap and shrieking with enough volume to fracture lead, vague empty threats that somehow never come to fruition. Or they decide, just as you get to checkout, to tell the cashier that they want to "use up all the pennies" in their pocket, even though they have more than enough other coins to finish the transaction. Meanwhile, the woman behind you has enough perfume on that your eyes start to water and you are pretty sure she is covering up something with that smell if she has to use so much of it.

Traffic snarls for no apparent reason, your check engine light comes on, that bump you keep feelng under the front tire has to mean a bum tire that is getting ready to send you veering into oncoming cars and you've got a 45 minute Interstate drive ahead.

The power hs gone off, putting every electrical item in your house on standby, the dog ate something foul then left clues about it's digestive upset on the carpet, dinner burns and you when you run a hot bath so you can finally unwind, you don't notice that you have set the faucet so that when you get in, the water is about 5 degrees less than body temperature.

And when I have one of those truly awful, bad, nasty days my only consolation, and what I keep telling myself as I try to keep it together is: All in all, I'm okay. I survived today. Yes it's been cr@ppy. And it may have all piled up on one day, but that just means I don't have to space it out over months. And I don't ever have to go through that particular bad day again, ever....

It's like a band-aide. Grab and rip.

[ozymandius]

2. Today's Reports

8:30 AM CPI Jan
Briefing Forecast 0.3%
Market Expects 0.3%
Prior 0.4%

8:30 AM Core CPI Jan
Briefing Forecast 0.2%
Market Expects 0.2%
Prior 0.2%

8:30 AM Housing Starts Jan
Briefing Forecast 1020K
Market Expects 1015K
Prior 1006K

8:30 AM Building Permits Jan
Briefing Forecast 1005K
Market Expects 1040K
Prior 1068K

10:30 AM Crude Inventories 02/16
Briefing Forecast NA
Market Expects NA
Prior 1066K

2:00 PM FOMC Minutes Jan 30

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

[UpInArms]

31. 8:30 reports in: U.S. CPI up 4.3% in past 12 months

01. U.S. Jan. CPI energy prices up 0.7%
8:30 AM ET, Feb 20, 2008 - 1 minute ago

02. U.S. CPI core up 2.5% in past 12 months
8:30 AM ET, Feb 20, 2008 - 1 minute ago

03. U.S. CPI up 4.3% in past 12 months
8:30 AM ET, Feb 20, 2008 - 1 minute ago

04. U.S. Jan. core CPI largest gain since June '06
8:30 AM ET, Feb 20, 2008 - 1 minute ago

05. U.S. Jan. core CPI up 0.3% vs. 0.2% expected
8:30 AM ET, Feb 20, 2008 - 1 minute ago

06. U.S. Jan. CPI up 0.4% vs 0.3% expected
8:30 AM ET, Feb 20, 2008 - 1 minute ago

07. U.S. Jan. housing starts fall 27.9% year over year
8:30 AM ET, Feb 20, 2008 - 1 minute ago

08. U.S. Jan. building permits fall 3.0% to 1.05 million
8:30 AM ET, Feb 20, 2008 - 1 minute ago

09. U.S. Jan. housing starts rise 0.8% to 1.01 million
8:30 AM ET, Feb 20, 2008 - 1 minute ago

[UpInArms]

37. Inflation remains hot in January - Energy, food and a host of core prices rise

http://www.marketwatch.com/news/story/us-retail-level-inflation-runs-hotter/story.aspx?guid=%7B4DA3466C%2DF37D%2D49EF%2D9DC8%2D2326516988B4%7D&dist=morenews_ts

excerpt:

CPI in detail
Energy prices rose 0.7% in January after much larger increases in the past two months. Gasoline prices rose 1.2% after seasonal adjustment. Natural-gas prices rose 2.2%.

Food prices rose 0.7% in January, the largest increase since last February.

The gain in the core rate reflects accelerated prices for apparel, medical care, recreation and education. Shelter prices, which represent about 30% of the CPI, rose 0.3% in January.

Transportation prices rose 0.5%, led by higher fuel prices.

Medical-care prices increased 0.5%, as prescription drug prices rose 0.7%, the largest gain in a year. Apparel prices rose 0.4% after seasonal adjustments. Airline fares rose 0.8% in the month.

...more at link...

[UpInArms]

60. FOMC and Fedspew

05. Fed sets sight on credit ratings, bank risk management
2:00 PM ET, Feb 20, 2008 - 13 minutes ago

06. Some on Fed doubt wisdom of fiscal stimulus
2:00 PM ET, Feb 20, 2008 - 13 minutes ago

07. Risk of vicious downward cycle a factor in rate cut: minutes
2:00 PM ET, Feb 20, 2008 - 13 minutes ago

08. Fed trims '08 growth forecast, raises inflation projections
2:00 PM ET, Feb 20, 2008 - 13 minutes ago

09. Fed agrees inflation disappointing since year-end: minutes
2:00 PM ET, Feb 20, 2008 - 13 minutes ago

10. Rapid rate hikes may be needed once growth improves: minutes
2:00 PM ET, Feb 20, 2008 - 13 minutes ago

11. Downside risks remain even after Jan rate cuts: Fed minutes
2:00 PM ET, Feb 20, 2008 - 14 minutes ago

14. Poole warns Fed not to focus solely on growth risks
1:34 PM ET, Feb 20, 2008 - 40 minutes ago

15. Poole: U.S. will skirt recession
1:34 PM ET, Feb 20, 2008 - 40 minutes ago

16. Fed's Poole: U.S. economy 'limping along'
1:34 PM ET, Feb 20, 2008 - 40 minutes ago

[Ghost Dog]

3. Asian Stocks Decline as Oil Surges Past $100; Banks Retreat

Feb. 20 (Bloomberg) -- Asian stocks fell, sending the region's benchmark to its biggest decline in two weeks, on concern banks will report more subprime-related losses and after oil surged above $100 a barrel.

Mitsubishi UFJ Financial Group Inc. led banks lower after KKR Financial Holdings LLC deferred repayment on commercial paper debt and the Financial Times said Credit Agricole SA may announce further writedowns. Hyundai Motor Co. tumbled on concern higher gasoline bills will cut demand for cars. Tokyo Electric Power Co. fell on speculation fuel costs will rise.

``KKR is not going to be the only one affected by this credit squeeze and that is heightening anxiety levels in the market,'' said Satoru Sakumoto, a fund manager at Shinsei Bank Ltd. in Tokyo.

The MSCI Asia Pacific Index fell 2.9 percent to 141.89 at 4:02 p.m. in Tokyo, its biggest decline since Feb. 6. It has slumped 10 percent this year amid mounting losses related to investments in U.S. subprime, or higher-risk, mortgages. A gauge of financial stocks had the largest loss among the index's 10 industry groups.

Japan's Nikkei 225 Stock Average sank 3.3 percent to 13,310.37. Sumitomo Realty & Development Co. had the biggest percentage decline on MSCI's Asian index, after a researcher forecast lower condominium sales. All Asian benchmarks open for trading retreated except in Pakistan.

More Writedowns?

Mitsubishi UFJ, Japan's largest publicly traded bank, dropped 4.4 percent to 919 yen, the biggest decline since Feb. 6. Sumitomo Mitsui Financial Group Inc., the No. 2 Japanese bank, tumbled 5.7 percent to 748,000 yen.

Commonwealth Bank of Australia, which last week posted the slowest profit growth in more than three years on higher bad debt provisions, slumped 4.3 percent to A$43.33.

KKR Financial, the publicly traded affiliate of private equity group Kohlberg Kravis Roberts Co., said it extended the repayment deadline of its asset-backed commercial papers for the second time to March, according to a regulatory filing.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=aoykbyDYs4pY&refer=asia

[Ghost Dog]

5. Japan Stocks Drop on Renewed Credit Concern, Property Outlook

Feb. 20 (Bloomberg) -- Japanese stocks fell, led by real- estate companies and banks, after a research report said condominium sales will drop and on concern losses will widen at financial companies.

Sumitomo Realty & Development Co. declined the most in more than nine years amid concern tight credit will restrict funding. Sumitomo Mitsui Financial Group Inc. slumped the most in a month. Losses accelerated in the afternoon after a report said KKR Financial Holdings LLC has delayed payment of billions of dollars in commercial paper and is working with its creditors to restructure the debt.

``KKR is not going to be the only one affected by this credit squeeze and that's heightening anxiety levels in the market,'' said Satoru Sakumoto, an asset adviser at Shinsei Bank Ltd. in Tokyo.

The Nikkei 225 Stock Average slumped 447.54, or 3.3 percent, to 13,310.37 at the close in Tokyo. The broader Topix index lost 42.57, or 3.2 percent, to 1,302.72. Both benchmarks dropped the most since Feb. 6.

/... http://www.bloomberg.com/apps/news?pid=20601101&sid=aF5SXbUeaO14&refer=japan

[Ghost Dog]

6. Japan's 10-Year Bonds Gain, Erasing Losses, as Equities Decline

Feb. 20 (Bloomberg) -- Japanese 10-year bonds completed the biggest gain in two weeks after falling stocks spurred investor demand for the relative security of government debt.

Benchmark 10-year yields declined from the highest level in three weeks as the Nikkei 225 Stock Average slumped 3.3 percent, the largest drop since Feb. 6. Shares fell after KKR Financial Holdings LLC said it extended the repayment deadline of its asset-backed commercial papers for the second time to March.

``The report led to speculation that stocks in Europe and the U.S. will drop, supporting bond purchases,'' said Susumu Kato, chief economist at Calyon Securities in Tokyo. ``This boosted concern that credit-market conditions haven't improved, which is negative for the stocks and positive for bonds.''

The yield on 10-year notes fell 3.5 basis points, the biggest decline since Feb. 6, to 1.425 percent as of 4:50 p.m. in Tokyo at Japan Bond Trading Co., the nation's largest interdealer debt broker. Yields earlier climbed to 1.48 percent, the highest since Jan. 25. The price increased 0.302 to 100.645. A basis point is 0.01 percentage point.

Ten-year bond futures for March delivery advanced 0.40 to 137.75 at the Tokyo Stock Exchange.

KKR Financial, the publicly traded credit fund backed by Kohlberg Kravis Roberts & Co., agreed with holders of its residential mortgage-backed securities to extend the repayment for about 50 percent of the debt to March 3, 2008. The extension will allow for ``restructuring discussions,'' KKR Financial said in a filing. The repayments were first extended in October.

/... http://www.bloomberg.com/apps/news?pid=20601101&sid=a5muEZy99rNY&refer=japan

[Ghost Dog]

13. Yen Gains Versus Euro on Concern Credit Markets Losses to Widen

Feb. 20 (Bloomberg) -- The yen rose against all 16 of the most-active currencies on concern widening credit-market losses will prompt traders to reduce holdings of higher-yielding assets funded in Japan.

The currency gained the most against the South African rand and the Norwegian krone after KKR Financial Holdings LLC, the publicly traded affiliate of private equity firm Kohlberg Kravis Roberts & Co., delayed repayment of its asset-backed commercial paper for the second time. Alliance & Leicester Plc, a U.K. mortgage lender, said profit slumped 67 percent in the second half as funding costs rose.

``We could see the yen gain further,'' said Tadahiko Nashimoto, director of foreign exchange at Barclays Bank Plc based in Tokyo. ``Concerns that credit markets will tighten are likely to weigh on sentiment. This makes everyone reluctant to take risk.''

The yen advanced to 158.18 against the euro as of 8:26 a.m. in London from 158.71 late yesterday in New York. It rose to 107.54 per dollar from 107.78. The euro declined to $1.4697 from $1.4725. The yen may rise to 107.20 versus the dollar today, Nashimoto forecast.

/... http://www.bloomberg.com/apps/news?pid=20601101&sid=ayFQc87fffsA&refer=japan

[Ghost Dog]

8. China's Stocks Drop; Pudong Bank Declines on Share Sales Plan

Feb. 20 (Bloomberg) -- China's stocks fell for the first time in three days. Shanghai Pudong Development Bank Co. tumbled by the daily limit on speculation it will sell 1 billion additional new shares, sapping demand for existing equities.

``Given the amount of capital the bank's going to raise, it's a bit large,'' said Fan Dizhao, who helps manage the equivalent of $8.3 billion at Guotai Asset Management Co. in Shanghai. ``The market doesn't welcome the increase in the stock supply amid weak sentiment.''

The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, fell 78.48, or 1.6 percent, to 4,942.27 as of 1:30 p.m. local time, snapping a two-day, 4.3 percent gain.

Jiangxi Copper Co. jumped by the daily limit, pacing the advance among metals stocks after commodity prices rose to records and the company said production has returned to normal after halts caused by the worst winter storms in 50 years.

/... http://www.bloomberg.com/apps/news?pid=20601089&sid=a3jHFOg5c11M&refer=china

[Ghost Dog]

14. China Wealth Fund to Pick Asset Managers This Month, People Say

Feb. 20 (Bloomberg) -- China Investment Corp., the nation's $200 billion sovereign wealth fund, will pick money managers for its overseas equity investments by the end of the month, people involved in the selection process said.

Two to three companies will be chosen for each of the four mandated product areas, according to one of the people, who declined to be named because the plan hasn't been made public. CIC hasn't decided if it will disclose a final list, said a press officer at the Beijing-based company, who also asked not to be identified.

China is seeking to diversify its $1.5 trillion in currency reserves to obtain higher returns than U.S. Treasury bonds. The Beijing-based fund will recruit asset management companies to oversee equity investments benchmarked against indexes for the world, developing countries, emerging markets and Asia ex-Japan.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=af4IDcBsJlk4&refer=asia

[Ghost Dog]

16. Yuan Climbs After China Pledges New Policies to Curb Inflation

Feb. 20 (Bloomberg) -- The yuan rose for a fifth day after China's central bank pledged new policies and increased currency flexibility to curb the fastest inflation in 11 years.

The currency rose to the highest since a link to the dollar ended in July 2005 after the People's Bank of China said in a five-year plan released yesterday that it will ``innovate'' to address problems including growth in money supply. Global commodity prices surged to a record yesterday, as oil jumped above $100 a barrel and copper rallied.

``The constant message is the need to mop up excess liquidity,'' said Dwyfor Evans, a strategist with State Street Global Markets in Hong Kong. ``Commodity prices are also a threat so they will need currency strength as an offset.''

The yuan advanced 0.1 percent to 7.1510 per dollar as of 1:27 p.m. in Shanghai, from 7.1580 yesterday, according to China Foreign Exchange Trade System. The currency gained 2.2 percent this year after rising about 7 percent in 2007.

Consumer prices rose 7.1 percent from a year ago in January, the statistics bureau said yesterday. Accelerating inflation adds to evidence the world's fastest-growing major economy is at risk of overheating. The nation's trade surplus rose more than forecast in January and money supply grew at the quickest pace in 20 months. Oil surged above $100 a barrel yesterday.

Import Prices

China is stepping up the pace of yuan appreciation to bring down the cost of imports and help curb inflation, driven higher by the worst snowstorms in five decades. It raised interest rates six times in 2007 and has boosted the proportion of deposits that banks must hold as reserves to 15 percent.

``We will further improve monetary policy controls, continue to use quantitative measures, widen usage of price- related policy tools and increase innovation in monetary policy measures,'' the central bank said in the report, without elaborating.

China's currency will rally to 6.70 per dollar by the end of 2008, according to the median estimate of 27 analysts surveyed by Bloomberg News. Forward contracts show traders are betting on a 9.3 percent advance to 6.55 in the next 12 months.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=ahX3iEZDiyB0&refer=asia

[Ghost Dog]

9. HK shares chill amid record oil, credit worries

HONG KONG, Feb 20 (Reuters) - Hong Kong stocks slid on
Wednesday amid worries that record oil prices could fan inflation
risks, damping hopes for more deep interest rate cuts by the U.S.
Federal Reserve and depressing rate-sensitive property shares.

A report that KKR Financial Holdings (KFN.N: Quote, Profile, Research), the listed
affiliate of private equity group Kohlberg Kravis Robers & Co
had delayed repayments on billions of dollars of debt
stoked credit worries and sent the market to
steeper losses in the afternoon.

Record oil above $100 a barrel and rallying copper and gold
prices boosted some resource stocks, but high crude prices were
an overall negative for the broad market.

...

The benchmark Hang Seng Index .HSI finished down 2.2
percent, or 532.59 points, at 23,590.58, near the day's low. The
China Enterprises index of H-shares , or Hong Kong-listed
shares in mainland companies, fell 3 percent, or 420.12 points,
to 13,552.82.

/.. http://www.reuters.com/article/marketsNews/idCAHKG30016520080220?rpc=611

[ozymandius]

4. Oil retreats after closing above $100

BANGKOK, Thailand - Oil prices retreated Wednesday in Asia after closing above $100 a barrel for the first time overnight as investors seized on a refinery explosion and the possibility that OPEC may cut its output.

The spike in crude Tuesday rattled Asian financial markets, with Tokyo's benchmark stock index falling more than 3 percent.

Many recent forecasts have said oil demand growth this year will be less than initially expected — yet prices continue to rise. That suggests oil may continue rising as the weakening dollar attracts new investors to the futures market.

Other factors lifting oil above the $100 mark were concerns about a falling dollar, the threat of new violence in Nigeria and continuing tensions between the U.S. and Venezuela.
.....

Light, sweet crude for March delivery fell $1.05 to $98.96 a barrel in Asian electronic trading on the New York Mercantile Exchange by late afternoon in Singapore.

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

[UpInArms]

64. March crude ends up 73 cents at $100.74 a barrel on Nymex

04. March crude ends up 73 cents at $100.74 a barrel on Nymex
2:53 PM ET, Feb 20, 2008 - 29 minutes ago

[ozymandius]

7. America's economy risks the mother of all meltdowns

"I would tell audiences that we were facing not a bubble but a froth - lots of small, local bubbles that never grew to a scale that could threaten the health of the overall economy." Alan Greenspan, The Age of Turbulence.

That used to be Mr Greenspan's view of the US housing bubble. He was wrong, alas. So how bad might this downturn get? To answer this question we should ask a true bear. My favourite one is Nouriel Roubini of New York University's Stern School of Business, founder of RGE monitor.

Recently, Professor Roubini's scenarios have been dire enough to make the flesh creep. But his thinking deserves to be taken seriously. He first predicted a US recession in July 2006*. At that time, his view was extremely controversial. It is so no longer. Now he states that there is "a rising probability of a 'catastrophic' financial and economic outcome"**. The characteristics of this scenario are, he argues: "A vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe."

Prof Roubini is even fonder of lists than I am. Here are his 12 - yes, 12 - steps to financial disaster.
.....

Can the Fed head this danger off? In a subsequent piece, Prof Roubini gives eight reasons why it cannot***. (He really loves lists!) These are, in brief: US monetary easing is constrained by risks to the dollar and inflation; aggressive easing deals only with illiquidity, not insolvency; the monoline insurers will lose their credit ratings, with dire consequences; overall losses will be too large for sovereign wealth funds to deal with; public intervention is too small to stabilise housing losses; the Fed cannot address the problems of the shadow financial system; regulators cannot find a good middle way between transparency over losses and regulatory forbearance, both of which are needed; and, finally, the transactions-oriented financial system is itself in deep crisis.

http://news.yahoo.com/s/ft/20080219/bs_ft/fto021920081334359078

[DemReadingDU]

19. Roubini's original article

2/5/08 The Rising Risk of a Systemic Financial Meltdown: The Twelve Steps to Financial Disaster by Nouriel Roubini

Here are the twelve steps or stages of a scenario of systemic financial meltdown associated with this severe economic recession…

http://www.rgemonitor.com/blog/roubini/242290/

note: His blog is still free to read.

[Roland99]

33. Heck, I was 18 months ahead of him! ha ha!

[AnneD]

54. Morning Marketeers....

:donut: and lurkers. I think Roland, that most of us on this thread were way ahead of these guys.

I am not the pessimistic type by nature. I am a bargain hunter along with the best but I don't see much I want to invest in right now. I have watched the house continually (WS) rig the game to the point that I haven't much of a prayer. I have concluded I stand a better chance in Vegas than WS. I have put my money in tangibles and not paper at this point. IF (and that is a mighty big if) I have extra-it goes to pay down debt. The investment waters are too choppy and most of the economic fundamentals are not strong. I have to deep sea dive for some good bargains.

Happy hunting and watch out for the bears.

[Roland99]

65. Stock tip for ya: Pioneer Aviation!

Got it from a Major who served in Korea. He was a doc in a M*A*S*H unit, actually. Funny fellow. Practical joker type.


;-)



he he

[AnneD]

68. God...am I dated....

I remember the episode.:(

[Roland99]

74. *You're* dated?!?!

:D :D

[AnneD]

79. It's like that fashion axiom....

if you wore it the first time around-you probably should not were it a second time around.

When you saw it the first broad casted episode........

I like to think of myself as a timeless classic-but I am to honest to delude myself.

[Roland99]

80. he he...

I remember anxiously awaiting each week's new episode. And that one has always stuck in my mind, esp. when someone asks for stock tips. :)

[AnneD]

81. You naughty little boy...

:evilgrin:

[Warpy]

73. Hell, most of us on DU's economic board

have been way ahead of him.

He's wrong about the order. The "shadow economy" of hedge funds and derivative markets will be the first to pop. It's been overdue for some time.

[ozymandius]

10. Student loan stress reshapes industry

WASHINGTON - The supply of education loans is shrinking as credit tightens, creating an opportunity for Sallie Mae and some big banks to pick up market share as some lenders retrench. College-bound students are the ones who might get squeezed in the process.

Smaller lenders such as College Loan Corp. and Nelnet Inc. are being forced to scale back as their ability to sell packages of student loans to Wall Street and other investors is crimped. Sallie Mae, the nation's largest student lender, and investment banks, on the other hand, are well-financed and have more flexibility to keep the lending spigot open.

Even though the Federal Reserve has cut a key interest rate five times in recent months, the shakeout in the student-loan industry will make it more expensive for students to borrow money, assuming a reduced supply of funds.

Lower-income students will feel the brunt of it, college administrators say. Both federally guaranteed student loans and higher-priced private loans are being affected.
.....

The latest squeeze on student lending is tied to trouble in the $330 billion market for auction-rate securities, about $80 billion of which is made up of bundles of student loans. Since some of these investments are backed by troubled bond insurers, investors have been particularly reluctant to buy these securities, straining the student lenders that sell them to raise cash.

http://news.yahoo.com/s/ap/20080220/ap_on_bi_ge/student_loan_squeeze

[ozymandius]

11. Officials: Delta-Northwest deal at risk

ATLANTA - An impasse among pilot negotiators over blending seniority lists put a $20 billion deal to combine Delta Air Lines Inc. and Northwest Airlines Corp. in "serious jeopardy" as the boards of the two companies prepared to meet Wednesday, two people close to talks told The Associated Press.

The people said the pilots unions have agreed on a comprehensive joint contract, but they are unable to agree to how seniority for the 12,000 pilots would work under a combined carrier. The people asked not to be named because of the sensitive stage of the talks.

They said late Tuesday that the pilot talks were expected to continue Wednesday, but if no agreement is reached, a deal on a combination of the two airlines would be in real trouble.
.....

The clock is ticking to get any deals accomplished quickly, some observers say. That's because industry observers believe a combination has a better chance of surmounting the considerable political and regulatory hurdles under the current administration than under President Bush's successor.

http://news.yahoo.com/s/ap/20080220/ap_on_bi_ge/delta_northwest

[ozymandius]

12. Subprime loans defaulting even before resets

NEW YORK (CNNMoney.com) -- For months, we've fretted about the Armageddon that will hit when subprime adjustable rate mortgages start resetting to much higher interest rates.

What's happening is even worse: Many of these loans are defaulting well before their rates increase.

Defaults for subprime loans issued in 2007 - none of which have reset yet - hit 11.2 percent in November. That represents perhaps 300,000 households, and is twice the default rate that 2006 loans had 10 months after being issued, according to Friedman, Billings Ramsey analyst Michael Youngblood.

Defaults are spiking well before resets come into play thanks to the lax lending environment of the past few years. Many borrowers were approved for mortgages that they had little chance of affording, even at the low-interest teaser rates .
.....

Hybrid ARMs start with very affordable fixed-rate terms of two or three years. After that, rates can jump three percentage points or more, and then re-adjust even higher every six months to a year. On a $200,000 mortgage, a reset could add nearly $400 to the monthly mortgage payment.

http://money.cnn.com/2008/02/20/real_estate/loans_failing_pre_resets/index.htm?postversion=2008022005

[ozymandius]

15. Stocks set for rough start

LONDON (CNNMoney.com) -- U.S. stocks looked set for a rough open Wednesday after fresh fears in the credit markets overshadowed solid results from tech heavyweight Hewlett-Packard.

About three hours before the start of trading, futures were lower, with a comparison to fair value indicating a negative start for the broader market and slight gains for the tech-heavy Nasdaq.

Credit fears were reignited by a unit of private-equity firm KKR. KKR Financial (KFN) said in a SEC filing that it is in restructuring talks with creditors after delaying repayment of billions of dollars of short-term debt.
.....

On the economic front, investors are bracing for the minutes from the Fed's meeting last month. They will also take in a key reading on consumer prices and reports on the housing sector, both set for release at 8:30 a.m. ET.

http://money.cnn.com/2008/02/20/markets/stockswatch/index.htm?postversion=2008022006

[ozymandius]

17. latest futures numbers

06:21 ET
S&P futures vs fair value: -3.7. Nasdaq futures vs fair value: +3.0.

http://www.briefing.com/Investor/Public/MarketSnapshot/StockMarketUpdate.htm

[Roland99]

27. Much worse than that at 7:43am!

DJIA INDEX 12,305.00 -83.00 07:43
S&P 500 1,342.50 -12.90 07:47
NASDAQ 100 1,766.75 -14.75

[Demeter]

18. ING reports small Q4 impairment, shares rise

http://news.yahoo.com/s/nm/20080220/bs_nm/ing_results_dc_3

LONDON (Reuters) - Dutch financial services group ING took a lower-than-expected impairment charge of 194 million euros ($286 million) on riskier investments in its fourth-quarter results on Wednesday, while a stake sale helped offset the loss.

ING's shares rose as much as 5.6 percent, bucking a lower market, after the Dutch lender and insurer said net profit in the quarter rose 18 percent from a year earlier to 2.48 billion euros, or 1.18 euros per share, just ahead of analysts' average forecast of 2.34 billion euros, or 1.12 euros per share.

The impairment charge was offset by a gain of 1.03 billion euros on the sale of its stake in local rival ABN AMRO to a consortium of three banks in October. ING had also booked gains from ABN and other asset sales in the third quarter.

Analysts had expected ING to take a charge of 200 million to 1 billion euros on its riskier investments, including residential mortgage-backed securities in subprime mortgages made to risky borrowers and "Alt-A" loans, which are made to borrowers with a slightly better credit profile, as well as from collateralized debt obligations (CDOs).

ING's writedown was smaller than its European rivals, including Credit Suisse, which took a $2.85 billion charge this week on its asset-backed investments, and HSBC, which took an $880 million charge last year.

U.S. banks have written off even larger amounts in the credit crisis, triggered last year by widespread defaults on mortgages extended to less creditworthy borrowers.

Underscoring the risk of further losses, ING said it made an additional provision of 751 million euros in the quarter on investments in subprime, Alt-A and CDO assets. This was taken to a revaluation reserve, not against profit, as these assets were still considered recoverable, despite a fall in market value.

For 2007, ING said it had provided for a total 1.38 billion euros in such assets.

ING Chief Financial Officer John Hele said the revaluation was "nothing very special," and the company had taken steps such as taking out credit protection on its portfolio.

[Demeter]

20. Considering the Price of Tea in China

http://www.dailyreckoning.com/

If the future is really as bleak as economists seem to think, how come the stock market hasn’t gone down more? The stock market looks ahead; why couldn’t it see trouble on the way?

Our answer is that the stock market sees trouble coming from two directions. On the one side, deflation is dragging down capital values – houses, stocks, bad credits. (Corporate debt is the next debacle, warns The Wall Street Journal .)

But on the other side, inflation is battering the value of cash itself. Who wants to hold dead presidents when they are losing 4% per year and inflation is rising? Historically, in times of inflation, it’s better to hold shares in profit making businesses that can raise their prices than it is to hold cash.

With cannons to the left of them... and cannons to the right...all volleying and thundering...what direction should stocks go? Maybe they see it all...and sit tight?

SEEMS TO ME A RISKY FORM OF HIDING--AT LEAST WITH GOLD, THERE'S SOMETHING TANGIBLE. OR OTHER SURVIVALIST PURCHASES.

[Demeter]

21. Another Snippit from DailyReckoning

As we pointed out at the end of last week, all the latest products of Wall Street had a bit of Ponzi in them. Ponzi was a schemer from the early 20th century who figured out that he could pay people a high rate of return...entice more money into his hands...and pay the first investors’ yields with the capital investments from the last. It worked beautifully for people who got in early. But Ponzi schemes always blow up. The problem is essentially the same in all extraordinary financial episodes – from the South Sea Bubble to the Dotcom Bubble...to the Housing Bubble.

“Finance” itself adds very little to the world’s wealth. And the returns from “finance”...or, broadly speaking, from investing...can never actually exceed the real rate of wealth creation in the economy – at least, not for very long. Most financial activity is merely shuffling money from one person to another...giving the financial industry an opportunity to collect a toll along the way. But when a Bubble gets going, it begins to look as though there is a lot more wealth available to shuffle. The act of financing, itself, causes the value of the thing financed to rise. The first people in – who bought at low prices – make money. People coming in after them think they are buying into a booming market and bid up prices. What they are really doing is transferring money to the early investors – just like the late arrivals to a Ponzi scheme.

George Soros described the process as follows:

“Boom-bust processes usually revolve around credit and always involve a bias or misconception. This is usually a failure to recognise a reflexive, circular connection between the willingness to lend and the value of the collateral. Ease of credit generates demand that pushes up the value of property, which in turn increases the amount of credit available

[UpInArms]

22. dollar watch

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

Last trade 76.341 Change +0.298 (+0.39%)

Pound Drops on Conflicted MPC Meeting Notes, Will Dollar Benefit From Hot CPI?

http://www.dailyfx.com/story/bio2/Pound_Drops_on_Conflicted_MPC_1203506957306.html

The pound dropped to 1.9450 after February’s MPC minutes revealed that David Blanchflower, the most dovish of UK monetary authorities, voted to cut rates by full 50bp rather than 25bp preferred by rest of his colleagues. The news took traders by surprise suggesting that concerns about the health of the UK economy may expedite BoE’s easing policy. For the time being most analysts forecast no change in short term rates at the next meeting in March. However, if tomorrows UK retail sales data shows yet another subpar print indicating further deterioration consumer demand, UK monetary officials may conclude that they have no choice but to follow the Fed and cut rates aggressively at every meeting of the MPC.

BoE officials are deeply conflicted between their desire to avert a serious slowdown in the UK economy and their mandate to control inflation which continues to rage at least on the producer level. However as we noted a few weeks back, “despite escalating price pressures on producers, pricing power in UK economy remains remarkably weak as consumers, burdened by record debt are beginning to curb spending. “ UK Retail sales have contracted for 2 out of the last 3 months and should they do so again, the pressure on the BoE to cut rates in March may become intense. Needless to say, none of this news is supportive of the pound and the unit could experience further waves of selling unless the data tomorrow demonstrates some resilience on the part of the UK consumer.

Meanwhile inflation remains the key theme across the G-10 universe. Tonight German Producer prices printed far stronger than expected at 0.8% vs. 0.3% forecast signaling that price pressures continue to plague the Euro-zone. As a result tonight’s report will likely reinforce ECB’s restrictive stance despite growing evidence of a slowdown in the region.

In US today, traders will keep their attention focused on CPI data due at 13:30 GMT. The numbers are projected to match last months 2.4% pace but any upside surprise could spur speculation that Fed’s ultra easy monetary policy is stoking the flames of inflation. With core readings already above the Central Banks target of 2% while headline data hovers above 4.2%, the dangers of runaway prices have increased markedly. Dr Bernanke and company may therefore find themselves facing the unpleasant choice of either further aggravating inflation or risking the possibility of a US recession. Clearly the closer the Fed moves to 0% interest rate level the more perilous the situation becomes. A hot CPI number therefore may force US policymakers to temper their easing perhaps lowering rates by only 25bp rather than the 50bp already priced in. That in turn may help the dollar find some support especially against the yen

...more...

What are the Best and Worst Performing Currencies Against the US Dollar?

http://www.dailyfx.com/story/bio1/What_are_the_Best_and_1203459564047.html

With President’s Day now behind us, volatility has returned to the currency and stock market. Having been up over 100 points intraday, the Dow Jones Industrial Average ended the day down 10 points. Long gone are the days of universal dollar strength or weakness. The US dollar sold off against most of the major currencies except for the British pound and Canadian dollars. The best performing currency today was the Australian dollar and Swiss Franc which benefitted from the $22 dollar jump in gold prices and signs that Australian interest rates will head higher. The Canadian dollar and the British pound on the other hand were the worst performing currencies against the dollar because next to the US, the most aggressive easing is expected to come from the UK and Canada. We only see cohesive price action when central banks around the world employ the same monetary policy of raising or lowering interest rates. Unfortunately when we have the Reserve Bank of Australia raising interest rates and the Bank of Canada lowering them, trading currencies has become much more complicated than being pro dollar or anti dollar. Tomorrow we have consumer prices due for release. Food and energy prices have been on a tear and for those reasons we expect consumer prices to rise as well. If CPI surprises to the upside, the best trades to take may be long USDCAD and short the GBPUSD. If CPI disappoints, expect the Australian dollar to continue to be one the currency market’s best performers. The NAHB housing market index rebounded in the month of February due to an increase in buyer traffic. We do not that think the rise in the homebuilder’s survey will be repeated in building permits and housing starts. With interest rates and house prices declining, bottom fishers are slowly beginning to sniff out the inventory, but just because they are sniffing does not mean that they are buying.

...more...

[Demeter]

23. Monoline Death Watch: Is There Really a Plan Here?

http://www.nakedcapitalism.com/2008/02/monoline-death-watch-is-there-really.html



Ever since Eliot Spitzer threatened the troubled monoline insurers that he'd break them up, everyone has acted as if that's a viable option... the break up notion is still at the high concept stage, little more than, "let's separate the muni operations from the rest." ..Consider: they've already backpedaled. Now Ambac wants to raise $2 billion first, then divide later...Ambac Financial Group Inc. is discussing a plan to raise at least $2 billion in much-needed capital to help the world's second-biggest bond insurer retain its top-notch credit rating, according to people familiar with the matter...The extra cash, to be raised by selling shares to existing investors at a discount, would likely be a prelude to a trickier and lengthier move: splitting itself into two businesses.

Remember, Ambac was trying, like all the other bond guarantors, to raise money before Spitzer delivered his ultimatum. That went nowhere. But we are now back to Plan A, except with the break up idea added. But does that make investing any more attractive?...The answer is no. Before, you had a situation that was either going to end badly, if you believed Bill Ackman and the shorts, or was misunderstood and therefore perhaps a buy, if you believed the insurers. (Aside: my sense is no one has lifted the kimono enough for anyone to get a reading as to the exposures, which does not encourage investors). In other words, you had a high degree of uncertainty (how bad will the mortgage business get? How much capital might be needed over time to keep an AAA rating?), but it could be analyzed.

Now, Ambac is seeking to raise money. It hopes to split up, but gee, we aren't certain we can do that, and even if we can, we aren't exactly sure yet how this will work...Is any one with any sense going to invest in a proposition like that? You have absolutely no idea what you are getting into. This whole discussion of a breakup plan has increased uncertainty enormously and raised the specter of litigation risk. Those are not exactly comforting to investors.
...It appears they have discovered that they lack a legal basis for preferring the muni policyholders over the others, and even if they try not to prefer one group over another, it is going to be well nigh impossible to come up with a formula that won't be contested. The Journal, along with others, sounded the litigation drumbeat:

In addition, you have the minor detail that a break up may Destroy the World of Finance as We Know It. From Bloomberg:

Credit ratings on more than $580 billion of asset-backed securities may be cut, sparking writedowns by banks, under New York regulator Eric Dinallo's plan to break up bond insurers....

``This is one of the worst possible outcomes for the market,'' Gregory Peters, head of credit strategy at Morgan Stanley in New York, said in a telephone interview. Lower ratings would force banks that own the mortgage-backed debt to write down the value of the securities by as much as $35 billion, he estimated.

And that $35 billion is far from the biggest damage estimate we've read.

[Demeter]

24. Tim Duy: Fed Would Like to Stop Cutting, But Lacks Nerve

http://www.nakedcapitalism.com/2008/02/tim-duy-fed-would-like-to-stop-cutting.html



Fedwatcher Tim Duy (posting on Mark Thoma's Economist's View) read Bernanke's recent Congressional testimony as saying that further rate cuts really weren't warranted give the Fed's medium term forecast. However, Duy has muffed some calls before by assuming that the Fed would stick by its official pronouncements rather than be swayed by the baying of traders. Now chastened and wise, he expects the Fed to cut again in March, but to moderate the pace, meaning only (only?) a 50 basis point cut.

But one sign of possible relief: Duy also sees signs among traders that their expectations are that rate cuts will cease when the Fed funds target rate hits 2%.

As readers know, I have long been frustrated with the Fed's "if the only tool you have is a hammer, every problem looks like a nail" behavior. The US's woes ultimately stem from excessive consumption as a percent of GDP. The only way to rectify that is to save and invest more. That means a slowdown, likely a recession. These efforts to halt American moving towards a more balanced economy will only cause more dislocation in the end.

From Duy:


Reading Fed Chairman Ben Bernanke’s testimony, I couldn’t help but be drawn to the following:

A critical task for the Federal Reserve over the course of this year will be to assess whether the stance of monetary policy is properly calibrated to foster our mandated objectives of maximum employment and price stability and, in particular, whether the policy actions taken thus far are having their intended effects. Monetary policy works with a lag. Therefore, our policy stance must be determined in light of the medium-term forecast for real activity and inflation, as well as the risks to that forecast. At present, my baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year as the effects of monetary and fiscal stimulus begin to be felt. At the same time, overall consumer price inflation should moderate from its recent rates, and the public's longer-term inflation expectations should remain reasonably well anchored.

The forecast, my nemesis, back again and with perhaps the clearest message we have seen that the Fed is looking for an endgame sooner than later. Most importantly is the reminder that policy works only with a lag – if there is to be a recession, it will be regardless of what the Fed does at the March meeting. Today’s policy impacts next year’s data.

To be sure, Bernanke left the door open to additional cuts, but he wants to reassert control over expectations. He wants market participants to conform their expectations to the medium run forecast, a failed effort to date as each near-term forecast was rendered obsolete within days of utterance. With this speech, Bernanke clearly lays out a rather dire near term scenario, including direct references to the widening credit crunch and stagnant consumer spending. All of which suggest he incorporates a considerable amount of negative news into his forecast. Which further suggests that he actually believes the line from the last Fed statement:

Today’s policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity.

I want to believe. Really, I do. Especially after Chicago Fed President Charles Evans mirrored Bernanke closely, including:

At 3 percent, the current federal funds rate is relatively accommodative and should support stronger growth. Indeed, because monetary policy works with a lag, the effects of last fall's rate cuts are probably just being felt, while the cumulative declines should do more to promote growth as we move through the year.

It actually sounds after if he would like to sit at 3% for awhile. And I think you can read the same into Bernanke’s testimony.

And yet still all this Fedspeak does little to sway me from my expectation that the Fed will cut rates another 50bp in March, and had minimal impact on market expectations as well. Fed policymakers lost credibility long ago; Bernanke’s testimony at best simply lays the foundation to rebuild the credibility in the months ahead. It is simply difficult to see how the Fed halts its easing campaign when faced with a steady stream of lackluster data at best. This has always been the danger of the Fed’s aggressive front loading of policy. Even more so now that political pressure is on, with three Fed nominees blocked by the Senate. And a special award should go to the Wall Street Journal’s Sudeep Reddy, who I believe is the first to write a “Bernanke’s days may be numbered” piece, complete with the requisite list of potential candidates for the Fed’s top job. The pressure is on, and the Fed has only one tool.

Rather than a pause now, I find it easier to see an end to end this cycle at a Fed Funds rate of 2%. Another 100bp can be broken in 50-25-25 increments, which keeps Bernanke’s foot on the gas into the summer, by which time I expect that the impact of past policy will begin to be felt. Indeed the bond market appears to be sensing this as well; from Across the Curve:

Some of the curve flattening represents prudent traders booking profits because no one has ever been fired for doing that. Banks, mortgage servicers and hedge funds were all busy unwinding steepening trades today. In addition, I did pick up the first faint rumblings of traders alluding to some terminal funds rate at the end of the process. Conversations with participants leads me to the conclusion that many expect that the Federal Funds rate will probably reach the 2.00 percent level and then the FOMC will enter cease, desist, and assess mode.

If 2% is the right target, then the 2 year bond is looking a little pricey. Moreover, reflect on the yield curve’s essentially sustained steepness despite the recent stream of less than reassuring economic data, suggesting that a lot of bad news is already priced into the markets. At least we can hope so.

Of course, this outlook assumes the Fed will have an impact on economic activity. And, of course, there will be those that argue the Fed is impotent, such as Paul Krugman here and Bloomberg here. Indeed, even Fed officials appear to be less than confident themselves:

''The increase in credit spreads has sort of worked against our policy,'' San Francisco Fed President Janet Yellen told reporters at her bank yesterday. ''The fact that the spreads went up so dramatically really resulted in an effective tightening of financial conditions that our cuts were partly meant to address.''

Not exactly credibility enhancing – “we didn’t understand what was going on, and we are powerless to do anything about it anyway.” In my mind, these criticisms fail to acknowledge the appropriate benchmark – it is only failed policy if you believe that the outcome would have been would be the same without the policy. I don’t – I think the carnage in the financial markets would have been much worse had the Fed not acted.

Also, the Fed can’t stop the credit crunch; they are probably doing the best the can. The US has lived beyond its means for decades, and the party was going to stop sooner or later – see Paul Krugman here. Moreover, there is more than one channel by which monetary policy impacts economic activity. As I have said before, by running a monetary policy that is out of sync with virtually every other economy on the planet, Bernanke is leveraging the willingness of foreign central banks to accumulate dollar denominated assets to support US fiscal stimulus. Someone has to buy the fresh flow of debt from Washington, and it won’t be savings constrained US households. And apparently, foreign central banks are willing to absorb endless amounts of US assets.

Or are they? Indeed, all the housing market doom and gloomers are missing the big story – how Bernanke is actually fueling a housing boom! Trouble is, the boom is in Hong Kong. From the Wall Street Journal:

…because two weeks ago and half a world away, the U.S. Federal Reserve cut interest rates again, hoping to stimulate an economy dragged down by a housing sector in disarray. Since Hong Kong pegs its dollar to the U.S. currency, it followed the Fed's lead, knocking the city's base rate down twice in less than two weeks for a total of 1.25 percentage points.

The unintended result: home-loan rates so cheap that they are throwing more fuel on an already scalding property market.

A typical mortgage here -- which is pegged to the prime rate which, in turn, is tied to the base rate -- now carries interest of about 3.1%. But compared with Hong Kong's inflation rate of about 3.8%, which is hovering at a more-than-nine-year high, that looks especially inviting, creating a so-called negative real interest rate.



The rest of the world can only absorb dollar denominated assets until inflation in the rest of the world becomes unsustainable. And the last thing that US policymakers need is for foreign central bankers to cease being the buyers of last resort for US debt. Which leaves domestic policymakers in a rather unfortunate position – they need to provide enough stimulus to lean against the credit crunch and soften the transition to a new and likely lower growth path, but not so much that they bite the hands that feed them. What is the tipping point? We don’t know, but in addition to the Fed, Congress looks set to seek the boundaries – the checks are not even in the mail, and Democrats are looking for a second stimulus package. And, if we emerge on the other side of this downturn with a lackluster economic environment characterized by a severely weakened consumer, expect another. And another. It is easy to talk about lower expectations for sustainable growth than to actually live with the reality of slower growth. I hate to sound pessimistic, but I anticipate rivers of red ink in the future – especially if a return to the Clinton-era employment to population ratio is the ultimate goal of future policymakers.

Bottom Line: It is difficult to pull away from expectations of another 50bp in March, although it looks like that Bernanke would like to do just that. 2% looks like a reasonable bottom at this point. Low US interest rates will resonate across the globe as central banks work overtime to absorb US debt – it should not be a surprise that commodity prices have failed to roll over as one might have expected given dire predictions for a global recession

[UpInArms]

25. Home loan demand plunges as interest rates soar

http://www.reuters.com/article/bondsNews/idUSN2033753520080220

NEW YORK (Reuters) - Mortgage applications plunged last week, and demand hit the lowest level since the start of the year as interest rates surged, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended February 15 fell 22.6 percent to 822.8, the lowest level since the week ended January 4.

It was the second straight week that the index fell, after having risen every week since the start of the year. The index in the prior week dropped by 2.1 percent.

The U.S. housing market is currently suffering one of the worst downturns in history. Last week's plummet in demand may indicate what is in store for the hard-hit sector this spring, which is the peak home-buying season.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.09 percent, up 0.37 percentage point from the previous week, the highest since late December.

...more...

[Kolesar]

39. Mortgage rates follow Treasury auction rates, not the Federal Reserve rates

I am :crazy:. Why is this stuff so hard to understand?

[UpInArms]

40. Federal Reserve rates are what the banks charge each other in

their constant bank-to-bank lending - which is garbage but it is driving the markets regardless.

Those rates do not translate to the consumer - the consumer will be the one shafted and the taxpayers will be the ones stuck with propping up the banks when they fail (and I said when - not if)

:hi:

[Kolesar]

42. (The end process) sounds like the Savings and Loan "Bailouts" in the 1980s

Wasn't John McCain somehow involved with Charles Keating?? thanks for the info

[UpInArms]

44. McCain was one of the Cheating Keating Five

and Keating was an anti-porn crusader who went after Larry Flynt and when he was charged with his bank scam, he hired Alan Greenspan as his economic consultant

http://en.wikipedia.org/wiki/Charles_Keating

Charles Humphrey Keating Jr. (born December 4, 1923 in Cincinnati, Ohio) is an American lawyer, politician and banker. In 1999, he was convicted of fraud as a result of his central involvement in the savings and loan scandal of 1989. He is also noted as a vehement anti-pornography campaigner.

<snip>

Failure of Saving & Loan, the Keating Five

In 1972, Keating began to work for American Financial Corp., a company involved in insurance and banking. Four years later he moved to Phoenix, Arizona to run the real estate firm American Continental Corporation, a spin-off of American Financial Corp. In 1984, American Continental Corporation bought Lincoln Savings. Such savings and loan associations had been deregulated in the early 1980s, allowing them to make highly risky investments with their depositors' money, a change of which Keating took advantage.

Some regulators noted the danger and pushed for more oversight, but Congress refused. Some of this may be due to the Keating Five, five Senators (Dennis DeConcini, Alan Cranston, John Glenn, Don Riegle and Keating's good friend John McCain) who had received some $300,000 from Keating in the 1980s as political contributions. They later met twice with regulators who were investigating American Continental Corp., in an attempt to end the investigation. (In 1990, they would be rebuked to various degrees by the Senate Ethics Committee.)

In 1985, Keating hired Alan Greenspan as an economic consultant, in an effort to convince an oversight agency to exempt Lincoln Savings from certain regulations. Greenspan delivered a favorable report, writing that Lincoln Savings was "a financially strong institution that presents no foreseeable risk to depositors or the government." (Greenspan produced similar favorable reports on numerous other banks that also failed soon after.) The agency ultimately declined the request.

American Continental Corporation, the parent of Lincoln Savings, went bankrupt in 1989; more than 21,000 mostly elderly investors lost their life savings, in total about $285 million, largely because they held securities backed by the parent company rather than deposits in the federally insured institution, a distinction apparently lost on many if not most of them until it was too late. The federal government covered almost $3 billion of Lincoln's losses when it seized the institution. Many creditors were made whole, and the government then attempted to liquidate the seized assets through its Resolution Trust Corporation, often at pennies on the dollar compared to what the property had allegedly been worth and the valuation at which loans against it had been made.

In 1989, Keating, when subpoenaed to testify before the House Banking Committee, invoked his right against self-incrimination under the Fifth Amendment to the United States Constitution.<1><2>

...more at link...

[Kolesar]

45. They put the office buildings up for rent for cheap after the taxpayer bailed them out

Then the owners promoted how low the cost of doing business in the Southwest is and screwed over Ohio by giving our companies a relocation package to move to Arizona or whereever.

After WE bailed them out

[UpInArms]

61. Fast Forward to Now: Thrifts and S&Ls post $5.24 billion record quarterly loss

http://www.reuters.com/article/bondsNews/idUSN2036605120080220?sp=true

WASHINGTON (Reuters) - Thrifts and savings institutions lost a record $5.24 billion in the fourth quarter of 2007, mainly due to write-downs of good will, the U.S. Office of Thrift Supervision said on Wednesday.

The thrift industry, which is largely comprised of mortgage lenders, is facing a major downturn in the U.S. housing market and losses stemming from home loans to borrowers with poor credit histories.

The loss in the October through December period of 2007 was the first for the industry since the third quarter of 1996, the OTS said. By comparison, the U.S. thrift industry had net income of $657 million in the third quarter and $3.14 billion in the fourth quarter of 2006.

"2008 is going to be a very difficult year for the industry," OTS Director John Reich said at a briefing with reporters.

Record provisions totaling $5.1 billion for loan losses in the fourth quarter tamped down earnings. It was the highest loan loss provision level since thrifts put aside $4.2 billion in the second quarter of 1988, said James Caton, OTS director of financial monitoring and analysis.

...more...

[Demeter]

48. Just Doing My Little Happy Dance Here

I told you so! I told you so! (That's for the delusional members of my co-op, who think that despite the massive drop in real estate values county-wide, state-wide, nation-wide, the falling valuations and rising taxes, and the precarious state of the banking industry, that they are going to convert us to condos, get big mortgages at low rates, and live happily ever after following a sale of their grossly inflated housing to a greater fool).

Sorry Marketeers! There was a Board meeting last night. I'm living on chocolate, and contemplating alcohol at 13:30 in the morning.

[UpInArms]

26. Wal-Mart to source more IT activities from India

http://www.reuters.com/article/businessNews/idUSBOM2488020080220?feedType=RSS&feedName=businessNews&sp=true

MUMBAI (Reuters) - Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research) said on Wednesday it would increase technology activities in India, as it seeks to expand its remote sourcing model.

Wal-Mart, which has a joint venture with India's Bharti Enterprises for a wholesale cash-and-carry operation, will work with several top technology firms in the country to support its global operations, it said in a statement.

"As we deepen our relationship with India it only made sense that we take advantage of the 24-hour development cycle that India offers," it cited Vice Chairman Michael Duke as saying.

India is one of several countries that the world's largest retailer is targeting as part of its remote sourcing model for IT activities, it said.

Wal-Mart has sourced some IT applications from a couple of Indian technology firms in the past year, and will now expand these operations to cover more firms to augment its work in the United States, a spokesman said, without specifying details.

...more...

[UpInArms]

28. Stewart Title parent posts annual loss (first loss since 1974), cuts jobs

http://www.reuters.com/article/bondsNews/idUSN2034096620080220?sp=true

NEW YORK, Feb 20 (Reuters) - Stewart Information Services Corp (STC.N: Quote, Profile, Research), which runs one of the largest U.S. title insurers, on Wednesday reported a fourth-quarter loss and its first annual loss since 1974, and said it plans deeper job cuts to cope with a severe decline in the nation's housing market.

The parent of Stewart Title Co said it lost $31.3 million, or $1.74 per share, in the fourth quarter, compared with a profit of $10.7 million, or 59 cents per shares, a year earlier.

Results included a $20 million pre-tax charge, or 72 cents per share, tied to higher reserves for claims. Revenue fell 23 percent to $499.7 million.

<snip>

Stewart cut 675 jobs in the fourth quarter, bringing total job losses for the year to about 1,500, and said it has cut more jobs in 2008. It is also closing more offices, after shutting about 145 in 2007.

Stewart also in 2007 set aside 8.5 percent of title operating revenue for future losses, up from 6 percent in 2006. It said the increase was tied primarily to policies issued from 2004 to 2006, and some large claims.

...more...

[Roland99]

29. Sharper Image files under Chapter 11 of bankruptcy law

Sharper Image files under Chapter 11 of bankruptcy law
http://www.marketwatch.com/news/story/sharper-image-files-under-chapter/story.aspx?guid=%7B19441526%2DFC70%2D44A4%2DAD0A%2DB83461309419%7D&dist=hplatest

TEL AVIV (MarketWatch) -- Sharper Image Corp., the San Francisco retailer, said in a statement Wednesday that it had filed under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the District of Delaware. "The company intends to continue to conduct business as usual while it devotes renewed efforts to resolve its operational and liquidity problems and develops a reorganization plan," it said.

[Demeter]

49. The Iconic James Bond Retailer Goes Belly Up!

Truly the end of an era.

[MilesColtrane]

53. They just need to adjust their inventory to the current economic climate.

Sharper Image™ Deluxe Shiatsu Massaging Barrel Cat. # L-324...$19.95

[AnneD]

56. Too true Miles.....

They always marketed a dream-these day they need to sell reality.

A portable housing unit (moon roof optional)....a large cardboard box...$21.99
Eco friendly thermal blanket.....newspapers $12.99
Space age multipurpose adhesive......duct tape $5.99

[DemReadingDU]

30. GMAC to Shut U.S., Canada Field Offices After $2.3 Billion Loss

By Greg Bensinger

Feb. 19 (Bloomberg) -- GMAC LLC, the lender partially owned by General Motors Corp., plans to close about 75 percent of its auto-financing offices in the U.S. and Canada after losing $2.3 billion last year.

GMAC will reduce the number of offices serving U.S. auto dealers to four and eliminate three of four outlets in Canada, said Barbara Stokel, executive vice president of North American operations, in a letter scheduled to be sent to dealers tomorrow. GMAC had 16 regional auto-lending offices in the U.S., according to a May 17 statement.

``Given the recent macro-economic conditions during the past year and anticipated well into 2008, we need to make structural cost reductions to restore our competitive position,'' said Stokel in the letter. GMAC spokeswoman Gina Proia declined to comment.

The plan to cut North American field operations follows a Jan. 22 letter to investors in GMAC's majority owner, Cerberus Capital Management LP, that predicted GMAC may run into ``substantial difficulty'' if credit markets fail to improve. GMAC's 2007 loss came as profit from auto lending declined and record U.S. home foreclosures squeezed available credit for consumers.

The four remaining U.S. offices will be in Dallas, Pittsburgh, Atlanta and Chicago. ``The new Regional Business Center alignment will enable us to reduce our cost structure,'' Stokel said in an advance copy of the letter.

The lone Canadian office will be in Toronto.

more...
http://www.bloomberg.com/apps/news?pid=20601087&sid=aqBv0GLc5x_Q&refer=home

[DemReadingDU]

32. Northern Rock deal could cost £3,500

How much is that in dollars?


2/20/08 The cost of the Northern Rock crisis has reached the equivalent of £3,500 for every taxpayer as experts warned that the nationalisation rescue of the bank was bound to fail.

Taxpayers' exposure to the beleaguered bank has doubled since the beginning of the year and now stands at about £110 billion - more than the annual budget of the NHS and the equivalent of 27p on the basic rate of income tax.

The newly-installed chairman has been forced to admit that the bank may remain in public hands for "years" - undermining claims by Gordon Brown that the nationalisation was only temporary.

Plans are being drawn up to lay off thousands of bank workers, reduce the savings rates of a million customers and sell branches in an attempt to persuade the European Union to sanction the biggest nationalisation in Britain's history.

more...
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/02/19/nrock119.xml

[cosmicdot]

59. 6,796.98 USD

3,500.00 GBP

=

6,796.98 USD
United Kingdom Pounds United States Dollars
1 GBP = 1.94199 USD 1 USD = 0.514935 GBP

http://www.xe.com/ucc/

[DemReadingDU]

63. Great, thank you

That's a handy currency converter

[DemReadingDU]

35. Healthcare fraud trial in Columbus, Ohio - Update

2/19/08 Witness: National Century owed investment firm $183 million

The weeks preceding National Century Financial Enterprises Inc.'s collapse included heated exchanges between investors and CEO Lance Poulsen, an investment manager testified Tuesday in the fraud trial for five company executives.

Amy Boothe-Fuentes, a former executive at AllianceBernstein Holding LP, told jurors that when her New York firm and other investors became concerned by a warning from Poulsen that National Century's bond funds had fallen out of compliance with financial covenants, they visited the company's Dublin headquarters only to have Poulsen kick them out and threaten to call the police.

Boothe-Fuentes, a witness for the Justice Department, was in charge of researching potential investments for AllianceBernstein's institutional clients, such as pension funds. AllianceBernstein invested in National Century bonds in 2000, she said, because they were considered safe and reliable. National Century bonds had attained AAA ratings from agencies such as Fitch Inc. and Moody's Investors Service because the company was considered the expert in health-care receivables and raters saw little chance of a default.

Indeed, until mid-2002, just before the company fell into bankruptcy, National Century bonds were good investments, Boothe-Fuentes testified in federal court. But in mid-October, Poulsen called to ask AllianceBernstein to sign a waiver that would allow National Century's NPF VI Inc. and NPF XII Inc. bond funds to go out of compliance, she told the jury. After the call, National Century investors formed a committee to investigate the problem, hired forensic accountants and lawyers, and traveled to Dublin to meet with National Century executives a few days later, she said.

After committee members arrived, Boothe-Fuentes said she tried to join a meeting Poulsen was having with another investor. She could hear Poulsen yelling, so she knocked on the door in hopes of joining the meeting, but Poulsen refused to let her into the office. He then kicked the investor committee out of National Century's offices, she testified.

more...
http://www.bizjournals.com/columbus/stories/2008/02/18/daily10.html


2/19/08 From the Columbus dispatch
Investors who questioned the business practices of National Century Financial Enterprises in its final weeks were threatened with losing their money if they didn't keep reinvesting, according to testimony this morning in federal court.
more...
http://www.columbusdispatch.com/live/content/local_news/stories/2008/02/19/natcen.html?sid=101

link to previous articles...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3187952&mesg_id=3188029

[UpInArms]

36. U.S. stock futures drop as inflation accelerates

http://www.marketwatch.com/News/Story/Story.aspx?column=Indications

LONDON (MarketWatch) - U.S. stock futures dropped sharply Wednesday after data showed inflation grew at a hotter clip than forecast, with worries about the credit market stoked by problems at an affiliate of buyout giant Kohlberg Kravis Roberts.

With losses accelerating after the CPI data, S&P 500 futures dropped 17.5 points to 1,338.10 and Nasdaq 100 futures dropped 18.25 points to 1,763.25. Dow industrial futures dropped 122 points.

The consumer price index increased 0.4% in January, driven by 0.7% gains in both energy and food prices. But other prices were also higher. The core CPI, which excludes food and energy costs, was up 0.3%in January, the largest gain since June 2006.

Economists were expecting the CPI to rise 0.3% in January after a 0.4% gain in December. The core rate was expected to rise 0.2% after rising 0.2% in the previous month.

...more...

[DemReadingDU]

38. S&P lower than when Bush took office: 1,338.84

[UpInArms]

41. 9:49 EST numbers and blather - nobody's happy

Dow 12,266.88 70.34 (0.57%)
Nasdaq 2,298.66 7.54 (0.33%)
S&P 500 1,340.12 8.66 (0.64%)
10-Yr Bond 3.923% 0.048

NYSE Volume 285,243,000
Nasdaq Volume 184,591,250

09:40 am : Stocks open on a low note, fueled by liquidity and inflation concerns.

Regarding inflation, January CPI rose 0.4% month over month, higher than the expected reading of 0.3%. Core CPI, which excludes volatile energy and food prices, rose 0.3%, which was also higher than the expected 0.2% rise.

The CPI reading weighed on sentiment, which was already weak due to a delayed repayment of asset-backed commercial paper from KKR Financial Holdings (KFN), a unit of Kohlberg Kravis Roberts & Co. Bloomberg.com reports KKR Financial is involved in restructuring talks with its creditors.

There are some bright spots this morning. Both Hewlett-Packard (HPQ) and Garmin (GRMN) are posting large gains after topping their earnings expectations and providing strong outlooks. DJ30 -77.61 NASDAQ -8.94 SP500 -8.27 NASDAQ Dec/Adv/Vol 1451/775/113 mln NYSE Dec/Adv/Vol 1985/621/73 mln

09:17 am : S&P futures vs fair value: -13.5. Nasdaq futures vs fair value: -11.3.

09:00 am : S&P futures vs fair value: -14.1. Nasdaq futures vs fair value: -14.8. Futures continue to point to a lower start as they trade a few points above their worst levels of the session. The higher than expected inflation reading is fueling a large portion of the negative bias this morning. Crude oil prices have eased $1.25 to $98.45 per barrel, as investors take some profits after yesterday’s record closing price.

[Roland99]

46. 10:05am - In the words of Aerosmith..."goin' dooowwn"

Dow 12,245.39 -91.83
Nasdaq 2,293.54 -12.66
S&P 500 1,338.64 -10.14
10 YR 3.88% 0.00
Oil $100.01 $4.51
Gold $922.50 $-7.30

[Hugin]

47. ~10:25 ET: Which brings us to today's song... "Trouble" - Shampoo.

Emphasis on "Sham". ;)

Index Last Change % change
• DJIA 12272.33 -64.89 -0.53%
• NASDAQ 2302.45 -3.75 -0.16%
• S&P 500 1342.65 -6.13 -0.45%


"Trouble" -- Shampoo

-Chorus- Uh-Oh, We're In Trouble, Something's Come Along And It's Burst Our Bubble
-Yeah, Yeah!- Uh-Oh, We're In Trouble,
Gotta Get Home Quick March On The Double!
We've Been Out All Night And We Havn't Been Home,
We're Walkin' Through The Back Streets ...All Alone!
The Party Was Great, Yeah We Were Really Frilled!
And When We Get In We're Gonna Get Killed!
-Chorus-
We Couldn't Get A Cab, 'Cause We Ain't Got No Money!
We Missed The Last Train But We Thought.... Don't Worry!
We'd Get The Night Bus But The Night Bus Never Came!
We're Eight Miles From Home And It Started To.....
-Chorus-
Yeah Yeah, Trouble...
We Tried To Steal A Car But We Soon Realized, We Got On The Road, None Of Us Could Drive!
Police Car Came Along And They Took Us For A Ride, And When We Get Home We're Gonna Get,
Gonna Get, Gonna Get Fried!
-Chorus-
Uh-Oh We're In Trouble, -Yeah Yeah!- Uh-Oh We're In Trouble....
Uh-Oh We're In Trouble, Something's Come Along And It's Burst Our Bubble!
Uh-Oh We're In Trouble, Book Us A Ticket On The Next Space Shuttle!
-Chorus x2-

[UpInArms]

43. Insolvencies to rise in developed countries -report

http://www.reuters.com/article/bondsNews/idUSL2063206320080220?sp=true

MADRID, Feb 20 (Reuters) - The number of insolvencies is set to rise in Western economies due to the global credit crunch and the end of housing booms in countries such as the United States, Britain and Spain, a report said on Wednesday.

The number of insolvencies in Western Europe is expected to grow by 5 percent in 2008, after dropping 11 percent last year, according to a report by Euler Hermes (ELER.PA: Quote, Profile, Research), the world's biggest credit insurer.

Insolvencies have remained at historic lows over the past few years as low interest rates and abundant credit helped struggling companies refinance their debt, avoiding collapse. The situation is different now.

"The scene ahead is not catastrophic but we have to be very cautious because we have a change in the world economy that can have an effect on many countries," Nicolas Delzant, member of the board at Euler Hermes, told a news conference in Madrid.

The United States will suffer less this year, with an expected 5 percent increase in insolvencies, after seeing them soar by 50 percent last year, the report said.

...more...

Has anyone seen a report from 2007 for insolvencies of 50 percent?

something about this article makes my head hurt :shakesheadbackandforth:

[Ghost Dog]

50. Europe shares slide after US data

LONDON, Feb 20 (Reuters) - European shares fell in early afternoon trade on Wednesday after data showed U.S. consumer inflation picked up more than expected in January, tempering expectations for more aggressive cuts in interest rates.

By 1333 GMT the FTSEurofirst 300 index of top European shares was down 1.7 percent at 1,314.94 points, compared with a 1.38 percent loss before the data.

Banks were the worst performing sector after another flurry of results from European institutions including Alliance & Leicester (ALLL.L: Quote, Profile, Research) and BNP Paribas (BNPP.PA: Quote, Profile, Research), which reported writedowns.

A&L shares were down nearly 10 percent while BNP Paribas was down 2 percent.

/... http://www.reuters.com/article/marketsNews/idCAL206086220080220?rpc=611

[Ghost Dog]

51. Warning from A&L hits FTSE

The UK banks were again at the forefront of volatility on Tuesday after a profit warning from Alliance & Leicester.

A day after Credit Suisse (NYSE:CS) announced writedowns of almost $3bn, A&L said profits would be lower this year because of higher funding costs.

Impairment charges and adjustments on treasury investments cut pre-tax profits for 2007 from £569m to a less-than-expected £399m as the bank held its final dividend and said 2008 dividends would to be maintained at the 2007 level.

The news is just the latest blow to hit a sector that continues to suffer from what A&L described as "unprecedented conditions in the world's financial markets".

James Hutson, analyst at Keefe, Bruyette & Woods, said: "The outlook reads poorly, with volumes down, costs rising, margin guidance slashed, the earnings target cut and the dividend guided flat in 2008.

"Add in a weak capital position and risk of impairments rising from a low level, and the outlook is miserable, with significant earnings cuts likely."

A&L shares slumped 9.7 per cent to 477p, having been as low as 428p earlier.

In afternoon trade the FTSE 100 was down 84 points, or 1.4 per cent, to 5,882.5, a loss of 1.4 per cent. The FTSE 250 was 124 points, or 1.2 per cent, lower at 10,085.5.

The market was spooked by overnight news that KKR Financial Holdings, the listed affiliate of the private equity group, has delayed repayment of billions of dollars of commercial paper for the second time and begun a new round of restructuring talks with creditors less than six months after a rescue rights issue.

The move is a further embarrassment for KKR, following a $270m bail-out of the leveraged investment vehicle last September, which saw founders Henry Kravis and George Roberts personally inject cash.

/... http://news.yahoo.com/s/ft/20080220/bs_ft/fto022020081007449242;_ylt=AnP8BaJx9GbShvahwsvpMNz2ULEF

[Ghost Dog]

52. StanChart gives up on Whistlejacket SIV

Standard Chartered on Wednesday gave up its efforts to provide liquidity to Whistlejacket, the $7.2bn structured investment vehicle which went into receivership earlier this month.

...

Last week the receiver decided to to suspend interest payments to senior debt holders which is expected to put those investments into default tomorrow, causing rating agencies to slash their ratings.

The identity of investors in the fund is not known, although they are believed to be a number of international financial institutions, including some based in the UK.

The fall in the value of SIVs has been one substantial cause of impairment charges at banks following the credit market turmoil. Much of the £185m impairment taken at Alliance & Leicester on Wednesday was related to its investments in SIVs.

SIVs are balance sheet funding vehicles, usually set up and managed by banks. They invest in financial instruments which although often with good credit ratings, have become highly illiquid as credit markets have seized up, causing sharp falls in prices.

The deterioration in the value of the underlying investments triggered Whistlejacket's receivership on February 11.

/... http://news.yahoo.com/s/ft/20080220/bs_ft/fto022020080838009235;_ylt=Am1V5Qgv.AZMdxZJxO_Snz32ULEF

[DemReadingDU]

55. Court says 401(k) participants can sue

WASHINGTON - The Supreme Court ruled Wednesday that individual participants in the most common type of retirement plan can sue under a pension protection law to recover their losses.

ADVERTISEMENT

The unanimous decision has implications for 50 million workers with $2.7 trillion invested in 401(k) retirement plans.

James LaRue of Southlake, Texas, said the value of his stock market holdings plunged $150,000 when administrators at his retirement plan failed to follow his instructions to switch to safer investments.

The issue in the LaRue case was whether the Employee Retirement Income Security Act permits an individual account holder to sue plan administrators for breaching their fiduciary duties.

The language of the law refers to recovering money for the "plan" rather than for an individual, raising the question of whether a participant can sue solely for himself.

Justice John Paul Stevens, in his opinion for the court, said that such lawsuits are allowed. "Fiduciary misconduct need not threaten the solvency of the entire plan to reduce benefits below the amount that participants would otherwise receive," Stevens said.

The decision overturned a ruling by the 4th U.S. Circuit Court of Appeals in Richmond, Va.

more...
http://news.yahoo.com/s/ap/20080220/ap_on_go_su_co/scotus_pension

[Roland99]

57. 12:57pm - "She turned me into a newt! Well...I got better."

Dow 12,347.88 +10.66
Nasdaq 2,313.22 +7.02
S&P 500 1,351.03 +2.25
10 YR 3.89% 0.02
Oil $100.30 $0.29
Gold $933.00 $3.20

[Demeter]

58. So, Who Goosed the Dow?

[UpInArms]

62. Ruh-Roh! Crossover index yields invert only for 2nd time

http://www.reuters.com/article/bondsNews/idUSL2071659520080220?sp=true

LONDON, Feb 20 (Reuters) - The yield curve of the Markit iTraxx Crossover indexes inverted for the second time in its history on Wednesday, with the five-year index reaching up to 5 basis points wider than the 10-year index.

Analysts at Barclays Capital advised investors to bet that the inversion of the curve is likely to become even steeper as the credit crisis deepens and corporate defaults pick up.

The five-year Markit iTraxx Crossover <ITCRS5EA=GFI>, a key indicator of European credit spreads made up of 50 mostly "junk"-rated credits, reached an all-time high of 614 basis points on Wednesday, according to data from Markit.

The 10-year index, which has lower trading volume, was quoted at about 609 basis points at the time, traders said.

By making an historical comparison with 2002 when defaults peaked in the last credit downturn, the analysts found that the inversion could reach 100 to 150 basis points .

"There is still a lot of room for further inversion if market turmoil continues," said Graham Rennison, a Barclays quantitative credit strategist.

The Crossover curve inverted for the first time in January but mostly for technical reasons, he said, while Wednesday's inversion was the result of "a much more measured kind of flattening", in line with the general widening of the index.

...more...

[kickysnana]

66. KKR arm delays debt payment

http://www.businessweek.com/ap/financialnews/D8UU5MUG0.htm

A unit of Kohlberg Kravis Roberts & Co., one of the world's largest private-equity firms, on Wednesday said it has delayed payment on billions in loans and opened debt restructuring talks with creditors.

It was the second time the fixed-income fund KKR Financial Holdings LLC, an affiliate of the U.S. buyout shop, has put off repaying asset-backed commercial paper. The fund, which invests in corporate debt and mortgages, did not provide details of how much debt was affected, according to a filing with the Securities and Exchange Commission.

It was a further embarrassment for KKR following a $270 million bailout in September of the leveraged investment vehicle amid a widening credit crisis that has swept through global financial markets. KKR founders Henry Kravis and George Roberts personally injected cash into the fund to prevent further hemorrhaging.

KKR shares fell 33 cents, or 2.3 percent, to $14.20 in midday trading. The stock has been sliced in half during the past 12 months.

more...

[Roland99]

67. At the close - "We're a happy family. We're a happy family...."

Dow 12,427.26 +90.04
Nasdaq 2,327.10 +20.90
S&P 500 1,360.03 +11.25
10 YR 3.92% +0.04
Oil $100.74 $0.73
Gold $937.80 $8.00

[UpInArms]

71. crapweasel blather to go with those numbers

4:25 pm : Readers may recall that the stock market flip-flopped on Tuesday, rallying in the early-going and then selling off into the close. On Wednesday it was just the opposite. Stocks languished in the early-going amid concerns about credit market liquidity and a worse-than-expected January CPI report, but eventually turned things around and advanced in the afternoon trade.

The performance was remarkable as there seemed to be some legitimate reasons for participants to assume a bearish view of matters and to maintain that view throughout the session.

News that KKR Financial Holdings, the publicly traded credit fund of Kohlberg Kravis Roberts & Co., had delayed repayment of its asset-backed commercial paper debt for a second time, and was involved in restructuring talks with creditors, sparked concerns about liquidity in the credit market that took a heavy toll on foreign markets.

This news, however, soon took a backseat to the CPI report, which revealed a 0.4% increase in total CPI for January and a 0.3% increase in core-CPI, which excludes food and energy. Both numbers were slightly ahead of expectations that called for increases of 0.3% and 0.2%, yet the year-over-year increases of 4.3% and 2.5%, respectively, are what really grabbed the market's attention.

The initial reaction was understandably negative as the report fueled inflation concerns and suggested the FOMC might not be as aggressive with future rate cuts as had been previously anticipated.

On a related note, the FOMC Minutes from the January 29-30 meeting indicated that members felt inflation expectations would remain reasonably well anchored. Still, it was not lost on the market, which saw oil prices top $100 again in Wednesday's trading, that the Fed raised its core inflation forecast for 2008 to 2.0% to 2.2% from 1.7% to 1.9%. The Fed also cut its 2008 GDP forecast to 1.3% to 2.0% from 1.8% to 2.5%.

The takeaway for the market was that the updated forecasts continue to support the view that further rate cuts remain likely. Accordingly, the stock market pressed higher following the release of the minutes.

In a separate release, it was reported that Housing Starts rose 0.8% in January. That seemingly good news was offset by the realization that starts had dropped 21% over the prior two quarters and that building permits slipped 3.0% to a 16-year low of 1.04 million units on an annualized basis.

After digesting the economic data, the stock market found a bullish stride that was helped along by the outperformance of the financial and technology sectors, which rose 1.6% and 1.7%. At the same time, the lack of follow through selling pressure after the negative open led to some bargain hunting activity that, in turn, forced some short covering that aided in the market's turnaround.

Other leading sectors included energy, which gained 1.5%, and basic materials, which jumped 1.2%.

Dow component Hewlett-Packard (HPQ 47.44, +3.49) provided its fair share of support for the broader market as it got a healthy 8.0% boost following its better than expected fiscal first quarter earnings report and full-year outlook. Its good news trickled down to other tech stocks that resulted in technology being the best-performing sector on the day.

Telecom services remained a drag, however, as it slipped 2.9%. Verizon (VZ 35.24, -0.10) and AT&T (T 34.36, -1.53) led the retreat, having been hit by a Credit Suisse downgrade of both stocks to Neutral from Outperform.

Strikingly, the defensive-oriented sectors consumer staples, health care and utilities underperformed today in a trade that was driven by more growth-oriented issues.DJ30 +90.04 NASDAQ +20.90 NQ100 +1.3% R2K +1.1% SOX +2.7% SP400 +1.4% SP500 +11.25 NASDAQ Dec/Adv/Vol 1249/1696/2.29 bln NYSE Dec/Adv/Vol 1198/1936/1.43 bln

[RUMMYisFROSTED]

69. Oil- $100.01

*Psychology Test In Progress*
*Psychology Test In Progress*
*Psychology Test In Progress*
*Psychology Test In Progress*

[radfringe]

70. tell me about it

yesterday morning on the way to work, I got stuck behind a heating fuel delivery truck - ironically, the company name was DISCOUNT HEATING FUEL...

it had a PRICE chart on the back, one of those flip card type. Current price $2.99/gallon

OUCH!

not sure what our heating fuel place is charging...but I'm sure glad we stacked 10 cords of wood this fall.. saved our butts and pocketbook

and I know where the bush-stimulus check is going too - in the bank so we can buy more wood for next winter

[RUMMYisFROSTED]

72. Lol.

[citizen snips]

75. Fed Lowers Economic Forecast

WASHINGTON (AP) -- The Federal Reserve on Wednesday lowered its projection for economic growth this year, citing damage from the double blows of a housing slump and credit crunch. It said it also expects higher unemployment and inflation.

The updated forecasts come at a time Federal Reserve Chairman Ben Bernanke and his colleagues are concerned the economy could continue to weaken, even after their aggressive interest rate cuts in January, according to minutes of those private deliberations released Wednesday.

"With no signs of stabilization in the housing sector and with financial conditions not yet stabilized, the committee agreed that downside risks to growth would remain even after this action," according to minutes of the Fed's Jan. 29-30 closed door meeting.

The Fed at that session voted to cut a key interest rate by one-half percentage point to 3 percent. Just eight days earlier, the Fed, in an emergency session, slashed its rate by a rare three-quarters percentage point. The two rate cuts together marked the most dramatic rate reductions in a single month by the Fed in a quarter century.

more...
http://biz.yahoo.com/ap/080220/fed_economy.html

[citizen snips]

76. US Bancorp Spent $300k to Lobby Congress

WASHINGTON (AP) -- US Bancorp spent $300,000 in 2007 to lobby on home equity and student lending issues.

The regional bank spent $280,00 in the second half of 2007 to lobby Congress, according to a disclosure form posted online Thursday by the Senate's public records office. It lobbied on home equity and student lending legislation.

U.S. Bank spent $20,000 during the first half of the year lobbying Congress on similar issues.

Lobbyists are require to disclose activities that could influence members of the executive and legislative branches, under a federal law enacted in 1995.

http://biz.yahoo.com/ap/080220/us_bancorp_lobbying.html?.v=1

[citizen snips]

77. Treasurys Mixed After CPI, FOMC Minutes

NEW YORK (AP) -- Treasury prices closed mixed Wednesday after a session made volatile by a worrisome rise in consumer inflation and news that the Federal Reserve cut its growth forecast.

Prices in all maturities alternated uneasily between losses and gains throughout the session. In morning trade, long-term Treasurys were pressured by inflation worries, but the selling later ran its course as the Fed minutes shifted investors' focus to weak growth. Economic weakness in general creates demand for Treasurys and other guaranteed assets.

The minutes from the Fed's Jan. 29-30 monetary policy meeting showed central bankers taking a dim view of the economy. The meeting minutes "were about as close to revealing a Fed panic as officials will let on in public," said Action Economics.

By the end of the session, the price situation had reversed. Long-term bonds closed higher in price as shorter maturities succumbed to selling.

more...
http://biz.yahoo.com/ap/080220/bonds.html?.v=9

[citizen snips]

78. Gold Hits Record on Oil Rally

NEW YORK (AP) -- Gold surged to a record in aftermarket trading Wednesday after oil rallied above $100 a barrel and investors bet the Federal Reserve will again slash interest rates -- boosting the metal's appeal as a hedge against inflation.

Other precious metals traded mixed, with silver also touching a record-high and platinum retreating from historic levels.

Gold has risen more than 12 percent this year, driven mainly by oil's ascent to $100 and steep declines in the U.S. dollar. Gold for April delivery jumped as high as $949.20 an ounce in electronic trading on the New York Mercantile Exchange -- the highest ever and within striking distance of the psychologically important $1,000 barrier. Earlier Wednesday, gold settled $8 higher at $937.80.

"I would point to oil as the primary driver. Oil and gold seem to be in lockstep right now," said Jon Nadler, senior analyst of Kitco Bullion Dealers Montreal.

more...
http://biz.yahoo.com/ap/080220/commodities_review.html?.v=4