STOCK MARKET WATCH, Thursday March 20

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday March 20, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 307
DAYS SINCE DEMOCRACY DIED (12/12/00) 2615 DAYS
WHERE'S OSAMA BIN-LADEN? 2341 DAYS
DAYS SINCE ENRON COLLAPSE = 2632
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 March 19, 2008

Dow... 12,099.66 -293.00 (-2.36%)
Nasdaq... 2,209.96 -58.30 (-2.57%)
S&P 500... 1,298.42 -32.32 (-2.43%)
Gold future... 945.30 -59.00 (-6.24%)
30-Year Bond 4.22% -0.11 (-2.47%)
10-Yr Bond... 3.36% -0.09 (-2.58%)






GOLD, EURO, YEN, Loonie and Silver

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PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

[ozymandius]

1. Market WrapUp: The "Bottom" Will Remain Elusive

BY CHRIS PUPLAVA

Ignore the endless bottom calling in the press that is buzzing around with some financial pundits pointing to the Bear Stearns blow-up as a likely capitulation in the markets. One thing that should be abundantly clear is that Wall St. tends to err on the side of optimism. I recently watched a clip of Maria Bartiromo being interviewed while in the U.K. who said that the financial media was playing a role of talking ourselves into a recession. What struck me was nowhere in the interview did the other side of the coin come up, that we can talk ourselves into a euphoric bubble. I guess it's important to keep up consumer confidence, at least that's what Stephen Colbert from Comedy Central maintains in his segment, "The Audacity of Hopelessness."

From 2004 to early 2006 all we heard about was the booming economy led by housing and the record homeownership in the country, which was supposed to be a “good thing,” and never any mention of the “bubble” that was brewing in housing with risky mortgages being made and the garbage being securitized all over the world. Not only had the financial press failed to take a balanced view of the economy by presenting the risks of bubbles brewing, but they have also played down the bubbles bursting with endless bottom calling and “containment” nonsense.

.....

What is important to understand and also why the bottom in the markets will remain elusive is that bank losses in residential real estate are nowhere close to peaking and bank losses are now spilling over to other loan categories as the credit crisis infects the other areas of the baking sector. Many in the financial press are solely focusing on subprime losses while ignoring (denying) the losses in other areas. For example, bank loan exposure to residential mortgages is just under 28% of total loans outstanding and represents 32% of total bank net charge-offs. Non-residential mortgage’s make up 72% of bank loans outstanding and 68% of bank charge-offs. Credit cards represent only 5% of loans outstanding yet make up 26% of bank charge-offs with other consumer loans representing 8% of loans outstanding and 19% of charge-offs.

.....

Today’s Market

Despite the markets initial rally in early morning trading driven by a positive earnings surprise from Morgan Stanley, and from news that OFHEO will relax its excess capital restrictions on Fannie Mae and Freddie Mac, stocks gave back more than half of yesterday’s gains as a sell off in commodities led the markets lower. There was a serious flight-to-quality into Treasuries as the yield on the 3-month T-bill fell 25 basis points to 0.65%, the lowest yield on the 3-month T-Bill in nearly 50 years.

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

[Ghost Dog]

2. GLOBAL MARKETS-Gold, oil slump on global economy fears

HONG KONG, March 20 (Reuters) - Gold prices slumped more than 2 percent to their lowest in a month and oil dropped as doubts about the global economy continued to unnerve commodity asset classes that had soared to record highs as early as this week.

Asian resource and mining stocks fell, while renewed credit crisis fears also dragged down indexes across the region just one day after investors had cheered hefty U.S. interest rate cuts and resilient results from leading U.S. investment banks.

...

"We're seeing a return to reality with regard to the situation in the U.S.," said Savanth Sebastian, equities economist at CommSec in Australia.

"The trend in the U.S. remains the same, credit markets remain tight and possible writedowns can continue."

...

Shares in Australia and Hong Kong .HSI dropped more than 3 percent each on Thursday as resource firms such as BHP Billiton (BHP.AX: Quote, Profile, Research), the world's biggest miner, and Petrochina (0857.HK: Quote, Profile, Research), the world's most valuable energy producer, slumped.

Shares in Singapore .FTSTI edged lower, though markets in China .SSEC gained 1.5 percent, in a technical recovery from recent sharp losses.

Taiwan shares gained 1.9 percent amid hopes of better ties with China after the country elects a new president on Saturday, while South Korean shares ended flat, erasing earlier losses as the slumping won currency <KRW=> lifted exporters.

The falls in commodity prices helped lift the dollar after initial weakness earlier in the session, with the U.S .currency reaching $1.5566 per euro <EUR=> up slightly from late U.S. trade, and still off its recent record low against major currencies.

/... http://www.reuters.com/article/marketsNews/idINSP30150720080320?rpc=44&pageNumber=1&virtualBrandChannel=0

[Ghost Dog]

3. Asian Stocks Fall, Led by Commodity Producers; BHP Tumbles

March 20 (Bloomberg) -- Asian stocks fell, led by commodity producers, after oil, copper and gold prices plunged on concern a U.S. recession will reduce demand for raw materials.

BHP Billiton Ltd., the world's largest mining company, tumbled the most in more than 20 years in Sydney. PetroChina Co., the country's biggest oil producer, declined in Hong Kong after reporting less-than-estimated profit. National Australia Bank Ltd. led financial companies lower after the cost of protecting Asian bonds from default increased.

``The U.S. is still the biggest contributor to global growth, so any slowdown will have implications for commodity prices,'' said Jason Teh, who helps manage the equivalent of $5.3 billion at Investors Mutual Ltd. in Sydney. ``It's going to be a one-way street for resources today.''

The MSCI Asia Pacific excluding Japan Index fell 1.9 percent to 428.16 as of 4:28 p.m. in Hong Kong, snapping a two-day, 3.6 percent advance. About three stocks dropped for every two that rose. The benchmark has slumped 19 percent this year, poised for its worst quarter in more than six years, on concern the U.S. will sink into a recession amid mounting losses tied to the country's subprime mortgage industry.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=aR6P.9OEIUXo&refer=asia

[Ghost Dog]

13. Rupee Set to Rebound as India Weathers U.S. Slowdown, BOA Says

March 20 (Bloomberg) -- India's rupee, Asia's second-worst performer this year, will rebound from a six-month low as domestic demand and trade with Asia and Europe will help the nation weather a U.S. recession, Bank of America Corp. said.

The currency may touch a decade-high by month-end as U.S. interest-rate cuts weaken the dollar, said Yeo Han Sia, Singapore-based strategist for the largest U.S. bank by market value. Indian policy makers will also use gains in the rupee to curb inflation that is threatening to flare up as crude oil trades near a record, Yeo said.

``We are positive on the rupee as domestic demand drives India's growth,'' Yeo said in an interview yesterday. ``Exports account for a low 14 percent of GDP, well below other emerging Asian economies. India's heavier reliance on Asian and European markets also should provide a buffer against a U.S. slowdown.''

...

The Indian currency advanced 12.3 percent last year, the most since at least 1974, as overseas funds invested a record $17.2 billion in local equities to benefit from the second-fastest growth rate among major economies. The government expects the economy to expand 8.7 percent in the year ending March 31 after growing 9.6 percent the previous year, the most since 1989.

/... http://www.bloomberg.com/apps/news?pid=20601091&sid=axWlqwE6OOQk&refer=india

[Ghost Dog]

15. India Inflation Accelerates to Highest in Ten Months (Update1)

March 20 (Bloomberg) -- India's inflation accelerated to a ten-month in the first week of March, making it more difficult for the central bank to reduce interest rates to bolster slowing economic growth.

Wholesale prices rose 5.92 percent in the week ended March 8 from a year earlier, faster than the previous week's 5.11 percent, the Ministry of Commerce and Industry said in New Delhi. A Bloomberg survey of 13 economists forecast a 5.11 percent gain.

India this week banned exports of edible oils on concern a smaller winter oilseed crop may worsen a shortage and fan prices. Finance Minister Palaniappan Chidambaram said March 17 his battle against inflation is becoming more intense due to rising commodity and food costs.

``Inflation from primary articles is expected to remain a concern with a seasonal up-tick in prices of fruits, vegetables, milk among others in the summer months.'' said Shubhada M. Rao, chief economist at Yes Bank Ltd. in Mumbai. ``Higher fuel prices and manufactured prices will also push inflation.''

Inflation accelerated as the onset of summer hurt output of fruits and vegetables.

India's winter-sown oilseeds harvest may decline to 9.6 million tons from 10.3 million tons last year, the government said Feb. 28. The South Asian nation relies on imports to meet half its edible oil needs. It buys palm oil from Indonesia and Malaysia, and soybean oil from Argentina and Brazil.

Fiscal Measures

The government will take more measures to subsidize food items and will urge the Reserve Bank of India to take monetary steps to contain inflation, Chidambaram said this week.

/... http://www.bloomberg.com/apps/news?pid=20601091&sid=aXicinJS6oTY&refer=india

[Ghost Dog]

16. Indian Market Regulator Says Short Selling to Start April 21

March 19 (Bloomberg) -- India's capital markets regulator said individual and institutional investors will be able to start short-selling stocks, lifting a six-year ban, on April 21.

The Securities & Exchange Board of India had on Dec. 20 announced that it will put in place a stock lending and borrowing program to facilitate short sales, the regulator said in a release issued on its Web site in Mumbai today.

The stock exchanges and the depositaries have been asked to make amendments to the relevant regulations for the implementation of the decision, the regulator said.

The move was aimed at protecting ``the interests of investors in securities and to promote the development of, and to regulate the securities market,'' SEBI said.

Investors will initially be allowed to short sell shares trading in the derivatives market, the regulator had said on Dec. 20. The list of eligible stocks will be reviewed periodically, it said at the time.

The regulator banned short selling in March 2001 to try and prevent traders from precipitating a drop in the benchmark Sensitive Index, or Sensex. The measure, which surged 47 percent in 2007, has dropped 26 percent this year.

/... http://www.bloomberg.com/apps/news?pid=20601091&sid=asMKXFKGEgyM&refer=india

[AnneD]

106. Morning Marketeers......

:donut: and lurkers. Funny thing to run across this article. Just last night Hubby was talking to his brothers in India. When we went to India 4 years ago, we got 54-52 rupees to the dollar. Now despite our sometimes rocky relationship with the Indian government-the Indian people have appreciated and respected the Americans and loved our dollar. When we were there, his brothers would hold on to out dollars until the exchange rate would go up and then cash them in for a nice profit. Our trip to India was dirt cheap.

It was different when he went there last summer. The exchange rate was one dollar to 40 rupee. This was before the latest free fall. Fortunately, he toured Europe first and payed for his trip to India via the profit on the Euro. His brother said the USD/Rupee rate went up again to 38R/1USD and his brothers unloaded some dollars the other day. He said it was so bad that at the airport now-the baggage inspectors were shaking the tourist down for Euro's-they don't want dollars. Boy, is that an insulting vote of no confidence.:rofl:

Well, we got some good news-My daughter was accepted to Cal Art University. The bad news-I don't have money. They were very impressed with her resume but she will have to talk to them about financial aid. We will not be getting bank based student loans nor will I co-sign. From my angle-she is independent now. If she wants this-she will have to figure out her own way. As some of you that know me and our situation know-it just isn't happening. As a parent, this breaks my heart-CalArts is a hard school to get into and she meets their criteria. She still may have to do her first 2 years here and transfer. As Charles Dickinson once said-"It was the best of times, it was the worst of times."

The preparations for the recital and reception are coming along. Next Thursday, I go to DC for my CPR/AED/First Aid training and national certification. We are working like man men to get things finished this week, because I will be out next week. The reward for me is that if my luck hold out-I will hit DC during cherry blossom time-something on my 100 things to do and see before I die list-oh wait...that's called bucket list these days. I want to go to the Jefferson Memorial (I missed it when I first went to DC in '78)

Happy hunting and watch out for the bears.

[Karenina]

114. Oh ANNE!!! Kid-unit got ACCEPTED!!!

What wonderful news! There ARE ways for her to raise the money, I'm simply KNOWING that, also that she can and will do it against all odds. Cal Arts IS the right address for her. :hug::loveya::hug:

[AnneD]

120. Thank you..

She is on cloud nine. Our Ace in the Hole is the fact that her Oboe teacher knows the Chairman of the Financial Aid Committee personally. I did not know that until I took her to her lesson today. Boy, that is a connection you want to have. Her teacher know how tough it has been for her, so she will work hard to help get funding. My daughter said when she spoke to the Cal Arts folks they were very interested and let her know there would be aid available. She will take her academics and advanced placement tests this summer and next, so she can focus on her core subjects in college,

[Karenina]

121. Another "branching out" oboe unit!!!

You already know how excited I am! :bounce::bounce::bounce:

[AnneD]

126. She is practicing so hard for her Senior Recital,,,

she said her embouchure was going out and she needed to whistle. Those 2 hour practice sessions were killing her. I started laughing and said-less than 1% of the population of this country would understand our conversation. Any tips to help the lips. She will be recording her recital and we will try to post it. I'll get some photos too.

She has a head for business so I think she will be opening a few doors for folks down the road. She has a friend that is a potential NFL player. They joke all the time about the 'I remember you when you were a running back at JVHS and don't call me again until you are in the NFL.' and she is 'I remember you went to HSPVA, and don't call me until you sign the record deal with Sony and co star with Beyonce.' Looks like the revenge of the Nerds around here. We are very excited....she had to wlk around the pond a number of times to burn off that nervous energy last night,

[Ghost Dog]

5. China's Stocks Gain, Reversing Loss, on Stock Trading Tax Cut

March 20 (Bloomberg) -- China's stocks rose, reversing an earlier loss, on speculation the government will cut a tax on stock transactions to bolster share prices.

China Vanke Co., the nation's biggest listed property developer, and ZTE Corp., China's second-biggest phone-equipment maker, gained after reporting higher earnings.

The CSI 300 Index gained 112.97, or 2.9 percent, to 4,001.83 at the close. It earlier lost as much as 5.9 percent. The benchmark is down 32 percent from its Oct. 16 record on concern more government measures to tame inflation will dent economic growth.

/.. http://www.bloomberg.com/apps/news?pid=20601089&sid=agI.N1Jy82oI&refer=china

[Ghost Dog]

6. Yuan Gains to Highest Since Peg as China Seeks to Cool Prices

March 20 (Bloomberg) -- The yuan climbed to the highest since the end of a dollar peg in 2005 on speculation China will quicken the pace of appreciation to cool inflation. Bonds gained.

The currency extended the year's advance to 3.4 percent as China's Premier Wen Jiabao pledged this week to take ``forceful'' steps to combat inflation. The central bank yesterday forecast the dollar to drop in the first half as the U.S. economy slows.

``Authorities are getting increasingly explicit on the utility of the exchange rate in containing inflation,'' said Emmanuel Ng, a currency strategist with Oversea-Chinese Banking Corp. in Singapore. Ng forecasts a 10 percent yuan appreciation this year.

The yuan rose 0.11 percent to 7.0549 versus the dollar at 4 p.m. in Shanghai, according to the China Foreign Exchange Trade System. The currency has gained 17 percent since a decade-old link to the dollar was scrapped in July 2005.

Standard Chartered Plc forecast the yuan will advance 15 percent against the dollar this year and add 7 percent more in 2009 as the U.S. currency slumps and China focuses on cooling inflation.

/... http://www.bloomberg.com/apps/news?pid=20601089&sid=aYI3iwsOMwek&refer=china

[Ghost Dog]

8. Swiss bank Credit Suisse gives profit warning

ZURICH (AFP) - Swiss banking giant Credit Suisse took another hit to earnings Thursday on its exposure to the US subprime loan crisis and warned there could be no profit in this year's first quarter.

Credit Suisse, revising figures released in February, reduced its 2007 net profit to 7.76 billion Swiss francs (five billion euros/7.76 billion dollars) due to the subprime loan collapse.

That gave a six percent decrease, as opposed to the three percent increase when it posted a net profit of 8.55 billion Swiss francs for 2007 last month.

At that time, the bank had sought to reassure investors it had largely weathered the collapse in the US property market after making huge write-downs on its exposure to the subprime or higher risk mortgage sector.

Credit Suisse said Thursday that "because of difficult market conditions in March ... it is unlikely that the company will be profitable in the first quarter."

The announcement added to concerns about the health of the banking sector as a whole and hit the stock price, dealers said.

In early Zurich trade, Credit Suisse shares were down 5.2 percent at 49.04 Swiss francs while the market overall lost 1.6 percent.

/... http://news.yahoo.com/s/afp/20080320/bs_afp/switzerlandbankingcompanyearningscreditsuisse_080320082928

[Ghost Dog]

10. Credit Suisse and miners weigh on European shares

FRANKFURT, March 20 (Reuters) - European shares fell on Thursday as a profit warning from Credit Suisse (CSGN.VX: Quote, Profile, Research) kept credit market woes firmly in the spotlight, while mining shares fell on lower commodity prices.

Credit Suisse shares slid almost 9 percent and were the strongest negative weight on the pan-European FTSEurofirst 300 index after the Swiss bank cautioned it was unlikely to be profitable in the first quarter due to big debt writedowns.

By 0938 GMT, the benchmark index was down 0.6 percent at 1,222.91 points, having fallen to as low as 1,217.51 points earlier in the session. It fell 0.9 percent on Wednesday, mainly due to technology and telecom stocks.

"The market is still driven by uncertainty," said Britta Paech, portfolio manager at M.M. Warburg. "We continue to battle with the financial crisis and it'll stay that way for a while," she added.

Banks were the main decliners in Europe. The DJ Stoxx index of European banking shares dropped 0.9 percent with UBS (UBSN.VX: Quote, Profile, Research) down 4 percent, Societe Generale (SOGN.PA: Quote, Profile, Research) down 3.5 percent and Deutsche Bank (DBKGn.DE: Quote, Profile, Research) falling 1.7 percent.

/... http://uk.reuters.com/article/eurMktRpt/idUKL2066761320080320

Snapshot:

^ATX ATX 3,562.07 6:09AM ET Down 36.21 (1.01%)
^BFX BEL-20 3,612.59 6:24AM ET Down 28.89 (0.79%)
^FCHI CAC 40 4,537.33 6:24AM ET Down 18.62 (0.41%)
^GDAXI DAX 6,367.38 6:09AM ET Up 6.16 (0.10%)
^AEX AEX General 426.55 6:24AM ET Down 0.39 (0.09%)
^OSEAX OSE All Share 459.48 Mar 19 Down 3.80 (0.82%)
^MIBTEL MIBTel 23,217.00 6:24AM ET Down 241.00 (1.03%)
^IXX ISE National-100 86.76 Mar 19 0.00 (0.00%)
^SMSI Madrid General 1,403.99 6:20AM ET Down 1.20 (0.09%)
^OMXSPI Stockholm General 296.37 6:23AM ET Down 1.98 (0.66%)
^SSMI Swiss Market 6,997.61 6:24AM ET Down 75.38 (1.07%)
^FTSE FTSE 100 5,520.50 6:09AM ET Down 25.10 (0.45%)

[Robbien]

95. More rogue traders at Credit Suisse causing another $1.2 B writeoff

. . .Thursday Credit Suisse confirmed that nearly 50.0% of the total write down, or $1.2 billion, was being written down for the last quarter of 2007, in addition to the $1.2 billion it had already marked down, which will force the company to revise its annual results for that year.

It concluded that the pricing errors in 2007 were due to "the intentional misconduct by a small number of traders" and that "the controls put in place to prevent or detect this activity were not effective." "This incident is unacceptable and it does not represent the high standard of Credit Suisse," admitted Chief Executive Brady Dougan.

"This raises questions about their credibility," said Helvea's Thorne.

http://www.forbes.com/markets/equities/2008/03/20/credit-suisse-update-markets-equity-cx_vr_0320markets11.html


One has to wonder how many of Credit Suisse traders are not rogue.

[donkeyotay]

99. A rogue trader is like a disgraced lobbyist or a dead insurgent,

prior to that they were stellar performers, GOP shakers and movers, and Iraqis.

[Ghost Dog]

67. European stocks trim losses after Philly Fed

Thu Mar 20, 2008 2:15pm GMT
PARIS, March 20 (Reuters) - European stocks trimmed their losses on Thursday afternoon but remained in the red after a survey showed factory activity in the U.S. Mid-Atlantic region fell less than expected.

The Philadelphia Federal Reserve Bank said its business activity index was at minus 17.4 in March versus minus 24.0 in February. Economists polled by Reuters had forecast a reading of negative 18.3.

Any reading below zero indicates contraction in the region's manufacturing sector. At 1410 GMT, the FTSEurofirst 300 index of top European shares was down 0.5 percent at 1,223.94 points. European commodity-related stocks and banking shares were among the biggest losers. Credit Suisse (CSGN.VX: Quote, Profile, Research), which issued a profit warning, was down 8.6 percent, Total (TOTF.PA: Quote, Profile, Research) down 2 percent and Rio Tinto (RIO.L: Quote, Profile, Research) down 5.1 percent.

/. http://uk.reuters.com/article/eurMktRpt/idUKL2082655920080320

[Ghost Dog]

70. FTSE falls as commodities weigh

Thu Mar 20, 2008 12:09pm GMT
LONDON, March 20 (Reuters) - Britain's FTSE 100 .FTSE index edged down by mid-session on Thursday as falls in metal and oil prices weighed on commodity shares, though Rentokil Initial (RTO.L: Quote, Profile, Research) rose sharply after hiring a turnaround team.

By 1147 GMT, the FTSE 100 was down 25.2 points, or 0.45 percent, at 5,520.4, having fallen 1.1 percent on Wednesday. The London stock market will close on Thursday (sic) for a four-day Easter break and will resume trading on Tuesday.

The UK benchmark index has lost more than 14 percent this quarter, on course for its worst three-monthly loss since the third quarter of 2002.

"There is a bit of market fatigue setting in and oil being down below $100 ... mining and resource stocks fall on the back of that because of the unwinding of risk," said Martin Slaney, head of derivatives at GFT Global Markets.

"Whether it's the beginning of the end of the commodity bubble, I don't think it is, it's an inevitable correction," he said. "Gold is still a long-term haven but ahead of the long weekend it's time for people to wrap things up and step aside."

Miners were the worst hit as metal prices fell, with gold down more than 4 percent to a one-month low as investors took profits in the face of the rising dollar.

Vedanta Resources (VED.L: Quote, Profile, Research) slumped 6.4 percent, while Antofagasta (ANTO.L: Quote, Profile, Research) shed 4.3 percent and Anglo American (AAL.L: Quote, Profile, Research) dropped 4.8 percent.

Oil shares were also weaker, tracking lower crude prices CLc1. BP (BP.L: Quote, Profile, Research) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research) lost 2 percent, while Cairn Energy (CNE.L: Quote, Profile, Research) fell 6.5 percent.

...

The Bank of England (BoE) pumped an extra 5 billion pounds ($9.9 billion) in weekly loans into the interbank market on Thursday but some analysts said it was not enough to ease tensions in fragile money markets.

David Buik of Cantor Index said he hoped Thursday's scheduled meeting on financial stability between the BoE and top UK banks could help stabilise the market.

HBOS REBOUNDS

Mortgage lender HBOS (HBOS.L: Quote, Profile, Research), which bore the brunt of rumours of banking sector troubles on Wednesday, rebounded 5.4 percent. Lloyds TSB (LLOY.L: Quote, Profile, Research) was up 1.5 percent.

Royal Bank of Scotland (RBS.L: Quote, Profile, Research), HSBC (HSBA.L: Quote, Profile, Research), Alliance & Leicester (ALLL.L: Quote, Profile, Research) and Standard Chartered (STAN.L: Quote, Profile, Research), however, were down.

The credit crisis took another turn in the hedge fund sector.

The Financial Times said Endeavour Capital, a $3 billion London hedge fund, lost more than a quarter of its value as it became the biggest victim of the unwinding of a popular Japanese government bond trade.

/... http://uk.reuters.com/article/londonMktRpt/idUKL2078546320080320?pageNumber=1&virtualBrandChannel=0

[Ghost Dog]

108. Europe stocks slide on weak commods, Credit Suisse

PARIS, March 20 (Reuters) - European stocks ended lower on Thursday, losing ground for the fifth time in six sessions as mining and energy shares retreated along with commodity prices on fears over demand and global economic growth.

Credit Suisse (CSGN.VX: Quote, Profile, Research) was the biggest laggard among Europe's blue chips, losing 6.4 percent after the Swiss lender warned it could report its first quarterly loss in five years.

But buoyant pharmaceutical stocks and a late rally among a number of European banks helped cushion the fall.

AstraZeneca (AZN.L: Quote, Profile, Research) rose 2 percent, Sanofi Aventis (SASY.PA: Quote, Profile, Research) gained 1.1 percent and Banco Santander (SAN.MC: Quote, Profile, Research) added 2 percent. Note: Banco Santander is a Spanish bank :freak: not pharma.

The FTSEurofirst 300 index of top European shares closed 0.3 percent lower at 1,226.67 points.

The index -- on track to record its worst quarterly performance since the third quarter of 2002 -- closed the roller-coaster week with a loss of 2.3 percent. Major European markets will be closed on Friday and Monday for the Easter holiday.

Miners and oil firms took a beating, with Anglo American (AAL.L: Quote, Profile, Research) sinking 8.1 percent, Xstrata XTA.PA losing 6.3 percent and Total (TOTF.PA: Quote, Profile, Research) slipping 2.2 percent.

...

"There's little doubt, in our mind, that commodities are seeing the same liquidity-driven bubble that led to all the strength and excesses in areas like structured derivatives -- and the subsequent collapse," Steve Barrow, chief currency strategist at Bear Stearns, wrote in a note.

"Hence we should always be ready to admit that commodity prices will, undoubtedly, fall in a very big way at some point. The question is whether this point is right now."

The banking sector ended mixed, with Societe Generale (SOGN.PA: Quote, Profile, Research) down 1.8 percent, Deutsche Bank (DBKGn.DE: Quote, Profile, Research) down 1.2 percent and UBS (UBSN.VX: Quote, Profile, Research) down 1.1 percent.

...

"There's not one valuation tool left to measure banking stocks: P/E ratios are not relevant at this point, price-to-book ratios are at very low levels... Investors are left in the dark. We don't know what to expect from the banks' results," said Emmanuel Morano, head of equity management at La Francaise des Placements, in Paris.

...

Around Europe, Germany's DAX index .GDAXI lost 0.7 percent, UK's FTSE 100 index .FTSE dropped 0.9 percent and France's CAC 40 .FCHI shed 0.5 percent.

On the year, the DAX is down 23 percent, the FTSE 100 down 15 percent and the CAC 40 down 19 percent.

/... http://uk.reuters.com/article/eurMktRpt/idUKL2076586820080320

[Ghost Dog]

113. So forget the RoW: Looks like US totally decoupled from reality.

^ATX ATX 3,569.32 12:39PM ET Down 28.96 (0.80%)
^BFX BEL-20 3,623.02 1:07PM ET Down 18.46 (0.51%)
^FCHI CAC 40 4,533.72 1:10PM ET Down 22.23 (0.49%)
^GDAXI DAX 6,319.99 12:45PM ET Down 41.23 (0.65%)
^AEX AEX General 425.79 1:07PM ET Down 1.15 (0.27%)
^OSEAX OSE All Share 459.48 Mar 19 Down 3.80 (0.82%)
^MIBTEL MIBTel 23,114.00 12:40PM ET Down 344.00 (1.47%)
^IXX ISE National-100 89.23 3:12PM ET Up 2.47 (2.85%)
^SMSI Madrid General 1,405.14 12:40PM ET Down 0.05 (0.00%)
^OMXSPI Stockholm General 295.24 8:11AM ET Down 3.11 (1.04%)
^SSMI Swiss Market 7,009.86 12:30PM ET Down 63.13 (0.89%)
^FTSE FTSE 100 5,495.20 12:35PM ET Down 50.40 (0.91%)

(RoW = "Rest of World").

[ozymandius]

21. Stocks set for shaky open

LONDON (CNNMoney.com) -- U.S. stock futures pointed to a weak open for stocks Thursday as investors remained unsettled by the credit crisis and awaited earnings from FedEx.

At 4:51 a.m. ET, Nasdaq and S&P futures were a shade higher, suggesting a lackluster start for Wall Street.

http://money.cnn.com/2008/03/20/markets/stockswatch/index.htm

[ozymandius]

22. Futures at 6:19 ET

S&P futures vs fair value: +7.3. Nasdaq futures vs fair value: +6.0.

[ozymandius]

4. Today's Reports

8:30 AM Initial Claims 03/15
Briefing Forecast 355K
Market Expects 360K
Prior 353K

10:00 AM Leading Indicators Feb
Briefing Forecast -0.3%
Market Expects -0.3%
Prior -0.1%

10:00 AM Philadelphia Fed Mar
Briefing Forecast -20.0
Market Expects -18.0
Prior -24.0

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

[Ghost Dog]

18. Leading Economic Indicators in U.S. Probably Fell in February

March 20 (Bloomberg) -- The index of U.S. leading economic indicators fell for a fifth month in February, reflecting mounting signs that a recession has begun, economists said before a report today.

The Conference Board's gauge, which points to the direction of the economy over the next three to six months, fell 0.3 percent last month, according to the median forecast in a Bloomberg News survey. The last time the index dropped for as many months was in 1990, when the economy was shrinking.

The leading index dropped as building permits, stock prices and consumer sentiment sank and first-time claims for jobless benefits jumped. Federal Reserve policy makers this week said risks to growth remain even after lowering the benchmark interest rate and making billions of dollars available to banks and securities firms to try to stabilize financial markets.

``A losing streak of five months is usually reserved for recessionary periods,'' said Jonathan Basile, an economist at Credit Suisse Holdings in New York. ``Once the labor market cracks, like it did last month, it shows the cycle is starting to turn down.''

...

Reports so far this month signal the leading index will keep falling. A report from the Labor Department due at 8:30 a.m. in Washington is forecast to show that initial jobless claims rose to 360,000 last week, according to the median survey projection.

...

A 10:00 a.m. report from the Fed Bank of Philadelphia is forecast to show manufacturing in the region contracted for a fourth month in March.

...

Companies are counting on gains overseas as the U.S. economy slows. General Electric Co. Chief Executive Officer Jeffrey Immelt told investors on March 13 that demand for the company's products from infrastructure projects and growth in Europe, Asia and Africa is helping offset any drag from a slump in the U.S.

``I still believe in the strength of the global economy now, but the U.S. consumer is in a tougher patch,'' Immelt said in a forum on the company's Web site.

/... http://www.bloomberg.com/apps/news?pid=20601068&sid=a2Gb0BDuDuA0&refer=economy

[UpInArms]

104. Leading index shows US economy in recession, ECRI says

http://www.reuters.com/article/bondsNews/idUSN2016212820080320

NEW YORK, March 20 (Reuters) - The United States is "unambiguously" in a recession, a New York-based forecasting group said on Thursday, citing a nine-month decline in its weekly measure of the economy.

The Economic Cycle Research Institute, which correctly predicted the 2001 recession at a time when many on Wall Street still maintained a rosy outlook, said their numbers indicate the economic contraction is already under way.

Extending its weakening trend, the firm's Weekly Leading Index fell to 130.8 in the week of March 14 from 132.1 in the prior week, revised down from 132.2.

"It is exhibiting a pronounced, pervasive and persistent decline that is unambiguously recessionary," said Lakshman Achuthan, managing director at ECRI.

At last glance, the WLI's drop due to unfavorable moves in most of its components including lower stock prices, higher jobless claims and interest rates, and weaker housing, said Achuthan. The index's annualized growth rate was steady at minus 10.4 percent.

...more...

[UpInArms]

37. U.S. weekly initial jobless claims rise 22,000 to 378,000 - last wk rev'd up 3,000

01. U.S. 4-wk. avg. continuing jobless claims up 19,750 to 2.83M
8:30 AM ET, Mar 20, 2008 - 52 seconds ago

02. U.S. continuing jobless claims rise 32,000 to 2.87 million
8:30 AM ET, Mar 20, 2008 - 52 seconds ago

03. U.S. 4-wk. avg. initial jobless claims rise 6,000 to 365,250
8:30 AM ET, Mar 20, 2008 - 52 seconds ago

04. U.S. weekly initial jobless claims rise 22,000 to 378,000
8:30 AM ET, Mar 20, 2008 - 52 seconds ago

[UpInArms]

57. U.S. March Philly Fed -17.4 vs. -24.0 in Feb. - U.S. Feb. leading indicators fall 0.3%

01. U.S. March Philly Fed above consensus -18.0
10:01 AM ET, Mar 20, 2008 - 3 minutes ago

02. U.S. March Philly Fed -17.4 vs. -24.0 in Feb.
10:01 AM ET, Mar 20, 2008 - 3 minutes ago

03. U.S. Feb. coincident indicators flat for 3rd month in row
10:00 AM ET, Mar 20, 2008 - 4 minutes ago

04. Economy 'grinding to halt,' Conference Board says
10:00 AM ET, Mar 20, 2008 - 4 minutes ago

05. U.S. leading indicators down 5 months in a row
10:00 AM ET, Mar 20, 2008 - 4 minutes ago

06. U.S. Feb. leading indicators fall 0.3%
10:00 AM ET, Mar 20, 2008 - 4 minutes ago

[ozymandius]

7. Oil near mid-$102 on waning demand

SINGAPORE - Oil prices extended their sharp retreat Thursday on the previous day's release of data that showed demand for petroleum products is waning in the face of record high prices.

The U.S. Energy Information Administration's weekly inventory report said Wednesday that overall consumption of oil and its products fell 3.2 percent over the last four weeks compared to the same period last year. Demand for gasoline fell 1 percent during the same period.

The demand numbers in the report overshadowed data showing that supplies of crude oil grew less than expected last week, while gasoline and heating oil supplies fell.

Light, sweet crude for May delivery dropped 13 cents to $102.41 a barrel in Asian electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract fell $5.96 to settle at $102.54 a barrel on Wednesday.

.....

Further depressing demand for oil was refinery activity, which fell by 1.2 percentage points last week to 83.8 percent of capacity, a sign refiners are cutting back on production of low-margin gasoline. Gasoline crack spreads — the difference between what refiners pay for oil and make for selling gasoline — have dipped into negative territory several times in the last week, analysts said.

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

[ozymandius]

9. Gov't eases Fannie, Freddie restraints

WASHINGTON - The government on Wednesday relaxed capital requirements at Fannie Mae and Freddie Mac as part of a plan to quickly inject an additional $200 billion of financing for home loans.

The initiative, which will require Fannie and Freddie to raise substantial funds, is part of a broader government strategy to ease a credit crisis that has made it difficult for consumers and businesses to borrow, and spread fear throughout global financial markets.

The Office of Federal Housing Enterprise Oversight, which oversees the government-sponsored companies, said the mandatory cash cushion for Fannie and Freddie — now nearly $20 billion for the two — will be reduced by a third under the new plan. The goal is to free-up money to help new home buyers take out loans and to help existing home owners refinance into more affordable mortgages.

The capital requirement for each company will be reduced from the current 30 percent to 20 percent, and further reductions will be considered by the regulator in the future. Fannie and Freddie will likely raise billions of dollars through special sales of stock.

.....

The two companies together hold or guarantee around $4.9 trillion in home-loan debt. As the mortgage crisis and ensuing credit crunch have worsened in recent months, policy makers have increasingly looked to them to step up their participation in the hobbled market for securities backed by mortgages.

http://news.yahoo.com/s/ap/20080320/ap_on_bi_ge/fannie_freddie_capital

There it is. They want a quasi-government entity to shoulder the burden of Big Shitpile along with the Fed.

[donkeyotay]

101. No, "The goal is to free-up money to help new home buyers"

How could you be so cynical? ;-)

[ozymandius]

11. Starbucks CEO sees "tailspin," outlines change

SEATTLE (Reuters) - Warning of an economic "tailspin," Starbucks Corp (SBUX.O) outlined long-awaited plans to turn around its U.S. business on Wednesday, but details from new coffee machines to a rewards program for frequent customers failed to excite investors, who sent shares down 4 percent.

Chief Executive Howard Schultz told the company's annual meeting there was no "silver bullet" for fixing Starbucks, whose stock has dropped 40 percent over the last 12 months.

The company's blazing U.S. sales growth stalled in the most recent quarter, when a decline in traffic caused sales at domestic stores open at least 13 months to fall 1 percent -- the first quarterly fall in company history.

.....

Starbucks has long said its $3 to $5 coffee is an "affordable luxury," but that assumption is being challenged because consumers are spending less on everything, from dining out to buying clothing, as home prices fall and the cost of necessities such as gas and fuel continue to rise.

http://news.yahoo.com/s/nm/20080319/bs_nm/starbucks_dc

[Hugin]

49. I suppose everybody and their monkey opening a coffee lounge has...

contributed as well.

I must admit I flinched when I read that a "$3 to $5 coffee is an 'affordable luxury'". ;)

[TalkingDog]

87. It's all those coffee and donuts you guys keep bringing to the SMW in the A.M.

You can't be giving that stuff away for free you know. There are addicts like the Spousal Unit - the self-named Caffeine Crack Baby- who are willing to pay a price for that monkey on their backs....





Speaking of monkeys... ??? A question: Is there an opinion here as to whether Bumbles Bounce Bernanke is trying to force us into hyperinflation with the idea that we can recover from that more quickly than a recessionary deflation?


Peeking in when I can.

Best to all.

TD

[Hugin]

90. Is this one of your famous 'lateral market observations'?

If so, I congratulate you on your critical thinking skills.

But, no... I haven't seen that particular line of *coff* thought expressed *cough* openly *coff* in the mass financial media or here on the SMW. Yet... Well, at least from an 'officious' source.

[TalkingDog]

94. I've had access to several sources (2 print, 1 TV, 2 personal)

Who suggest hyperinflation is the expected outcome of dumping lots of money into the market system.

They also seem to suggest (perhaps hopefully rather than realistically) that this "turmoil" will be over before 2010, with at least one source giving a 5 month absolute bottom and others suggesting several months instead of the years a deflationary path would take.

Given they are leaning toward hyperinflation (which masks bad debt and effectively erases it) it suggests they might be taking the tack that ripping the band-aide off in 5 months seems preferable to the several years of peeling it down.

Just being pragmatic (something you can surely appreciate) in trying to walk through the cesspool of their thinking process.


(Hugh McColl, Charlotte's millionaire philanthropist type was the TV source.)

[Robbien]

103. My TV has been telling me the same thing

Recession is a long term event from which it is hard to recover. Inflation, don't worry about it. A short term event.

The TV goes on to say the reason the EU/UK is worried about inflation is that the nasty ole EU/UK doesn't have a handle on wages. The US has kept wages low but dumb Europeans haven't figured out how to keep their slaves on the farm without increasing their pay.

[AnneD]

107. I have always maintained from the very start of this inflation is...

the up side is paying old debt with cheaper dollars. It is a thought that warms my heart as I pay off these blood sucking bastards.:evilgrin:

and about all of us bringing coffee and donuts to the thread....this is fast becoming the only coffee I can afford so drink up Shriners......

:donut: :donut: :donut: :donut: :donut: :donut: :donut: :donut: :donut: :donut: :donut: :donut:

[ozymandius]

12. JPMorgan Chase erases early gains to close down, as financials reverse course

NEW YORK, Mar. 19, 2008 (Thomson Financial delivered by Newstex) -- Shares of JPMorgan Chase pulled back from a 6-week high, and from the 200-day moving average, to close lower, as concerns over possible further writedowns at Merrill Lynch helped spark a reversal in the financial sector.

The stock, a component of the Dow industrials, lost 0.6% to $42.47. Earlier in the session, the stock was up as much as 5.1% at its intraday high of $44.89, the highest price seen since Feb. 8.

The high was also slightly above the 200-day simple moving average, a technical indicator viewed by many as a bull-vs.-bear market barometer, which came in at $44.73. The last time the stock traded above its 200-day SMA was on Feb. 4.

http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-23898904.htm

The Fed's magic ammo is nearly spent.

[ozymandius]

14. Bear Holder Lewis May Seek Alternative to JPMorgan (Update1)

March 20 (Bloomberg) -- Billionaire investor Joseph Lewis, the largest shareholder of Bear Stearns Cos., said he may push the company to consider alternatives to the $339 million buyout offer from JPMorgan Chase & Co.

Lewis will take ``whatever action'' he deems necessary to protect his $1.26 billion investment in New York-based Bear Stearns, he said in a filing yesterday with the U.S. Securities and Exchange Commission. He said he may ``encourage'' the firm and ``third parties to consider other strategic transactions.''

Lewis, 71, and Thunderstorm Capital's John Dorfman have threatened to oppose the JPMorgan purchase. The third-biggest U.S. bank agreed March 16 to buy Bear Stearns in an all-stock deal that values the securities firm at $2.32 a share, or $339 million, based on yesterday's closing price. Bear Stearns stock closed at $30 two days before the firm was forced to accept JPMorgan's terms or face bankruptcy after customers and lenders abandoned the broker because of concern about a cash shortage. The Federal Reserve agreed to provide as much as $30 billion to JPMorgan to get the deal done.

.....

Lewis paid an average of $103.89 apiece for his 12.14 million Bear Stearns shares, according to yesterday's filing. He started accumulating most of his shares last July and has lost about $1.19 billion on the investment, or almost half his wealth, which Forbes magazine estimated at $2.5 billion in its 2007 survey.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aq8pSeudZm4Q&refer=home

[ozymandius]

28. Dimon Offers Bear Stearns Bankers Stock, Cash to Stay (Update1)

March 20 (Bloomberg) -- JPMorgan Chase & Co. Chairman Jamie Dimon offered Bear Stearns Cos. managing directors cash and stock incentives to win their support for a takeover and prevent them from leaving the firm, two people familiar with the matter said.

Dimon said executives asked to remain after the takeover will be granted additional JPMorgan stock, said the people, who attended a meeting yesterday evening at Bear Stearns's New York headquarters when he made the proposal. The people asked not to be identified because the meeting was private.

.....

Bear Stearns employees not offered a job by JPMorgan will receive cash payouts of 25 percent to 35 percent of their 2006 compensation provided they stay until the deal is completed, Dimon said, according to the two people. JPMorgan hasn't decided how many employees it will retain.

http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aEVFUU2sy0Ss

Dimon is clearly fighting Lewis' counter-maneuver to JP Morgan's acquisition of BS.

[UpInArms]

43. SEC probing options activity in Bear Stearns: report

http://news.yahoo.com/s/nm/20080320/bs_nm/bearstearns_sec_dc

NEW YORK (Reuters) - The Securities and Exchange Commission is investigating the events leading up to the collapse of Bear Stearns (BSC.N), specifically a surge in options contracts betting that the investment bank's share price would fall sharply, according to the Wall Street Journal.

Citing people familiar with the matter, the paper reported the SEC probe focuses on a surge last week in "put" options that came days before the firm's proposed sale to J.P. Morgan Chase & Co. (JPM.N) for stock now valued at about $278.5 million, or $2.32 a share.

A put option allows the buyer of the option the right to sell a certain number of shares in the company at a specific price within a set time.

[ozymandius]

17. Auto executives weigh impacts of U.S. economy (slowest sales in a decade)

NEW YORK -- This year's models at the New York Auto Show didn't catch quite as much attention Wednesday as the most pressing question facing the industry: Which way is the economy heading?
Advertisement

Executives at several major automakers, including General Motors Corp. and Chrysler LLC, put their best game faces on the wild economic news of the past few weeks. But with credit markets in turmoil, skyrocketing gas prices, housing prices in decline and inflation edging up, uncertainty has taken center stage.

.....

A weaker U.S. economy could threaten the latest turnarounds at GM, Chrysler and Ford Motor Co. While many forecasters began the year predicting U.S. auto sales close to last year's total of 16.1 million, industry analysts have been marking their estimates down in recent days. J.D. Power and Associates cut its forecast Tuesday to 14.95 million, which would be the lowest level since 1994.

http://www.freep.com/apps/pbcs.dll/article?AID=/20080320/BUSINESS01/803200319

[ozymandius]

19. Goldman, Morgan try out Fed discount window

Goldman Sachs Group Inc. and Morgan Stanley, the two biggest U.S. securities firms, said they tried out a newly available Federal Reserve lending program this week.

In a move to help relieve the credit crunch and prevent another collapse of a Wall Street firm after Bear Stearns Cos. was forced to accept a fire-sale takeover by JPMorgan Chase & Co., the Fed on Sunday opened its so-called discount window to investment banks such as Goldman and Morgan Stanley. Traditionally the Fed has used the window to lend to commercial banks only.

Representatives of Goldman and Morgan Stanley emphasized that they were interested in the option for borrowing money overnight because it might be an attractive alternative, not because they faced a liquidity squeeze.

.....

Securities firms can borrow from the Fed overnight at the discount rate, currently 2.5%. Commercial banks can borrow from the central bank for as long as 90 days; the Fed extended those terms from 30 days this month and from overnight in August.

http://www.latimes.com/business/la-fi-wrap20mar20,1,157479.story

[Demeter]

30. Quelle Surprise! Wall Street Reluctant to Borrow at New Discount Window

http://www.nakedcapitalism.com/2008/03/quelle-surprise-wall-street-reluctant.html

The Wall Street Journal reports that primary dealers have been loath to use their new-found access to the discount window (technically, it's a "temporary clone of the discount window"), despite the favorable rates on offer. Why? For commercial banks, the assumption is that only the distressed would go to the Fed for dough (the discount window was originally designed for emergencies). In these jittery and rumor-prone markets, the last thing you want to do is create concerns. Bear's liquidity went poof in a mere three days.

This response was entirely predictable. As we said when primary dealers were granted access on Monday:


This move is intended to last only for six months, but if the financial markets continue to be rocky (likely) and broker dealers use the facility, it's hard to know how long it will take to wean them off it. However, use of the discount window has been seen as a sign of weakness, and use has therefore been minimal. That may mean this move proves to be largely symbolic, since the broker-dealers may not avail themselves of it either. The next measure would then be to allow them to use the TAF. Expect that to come soon.

Indeed, we saw the same behavior the Fed lowered discount rates last August to encourage greater use. But it got few takers, even though four big firms, Bank of America, Citi, J.P. Morgan, and Wachovia each took down $500 million each to try to alleviate the negative taint. But of course, Citi was considered a strong player back then.

From the Wall Street Journal:

The Federal Reserve's emergency decision last weekend to extend borrowing to investment banks was designed to stem a worsening credit crisis ravaging the financial markets. The question is: Will it work?

Wall Street firms were reluctant to borrow from the program Monday out of concern it could be seen as a sign of weakness, if their identities became known.

Late yesterday, Lehman Brothers borrowed a small amount, according to a person familiar with the transaction, and Goldman Sachs is likely to do the same before the end of the week. Because Goldman Sachs is seen as financially stronger than some of its counterparts, that could diminish any stigma and encourage other firms to step forward....

The new loan facility works much like the Fed's discount window, the central bank's traditional tool for lending directly to banks. Banks, which hold customer deposits and are regulated by the Fed, have long been able to use the discount window to meet emergency funding needs. But they have been somewhat leery about using it, because of concerns that if word got around, they might be stigmatized as distressed institutions....

Fed officials maintain that just the existence of all of its expanded lending programs is an important confidence builder. Even if the new program for securities firms isn't used much at first, "the Fed may decide it doesn't mind making this a remote backstop," said Lou Crandall, chief economist at Wrightson-ICAP.

Firms are expected to use the new program to help get financing for clients, such as hedge funds, that are facing liquidity problems.

The Fed did say at the time of the announcement that the primary dealers could act as conduits and submit collateral on behalf of counterparties. But how will Main Street react when it learns that the Fed is helping hedge fund while individual borrowers are under stress?

[54anickel]

75. I'm not gonna try it...You try it first. Let's get Goldman!

[ozymandius]

20. Borders Group mulls sale

DETROIT (AP) -- Borders Group Inc. said it is launching a review to consider the possible sale of part or all of the company.

The announcement Thursday morning from the nation's second-largest bookseller came after it delayed the scheduled Wednesday release of its fourth-quarter earnings.

http://money.cnn.com/2008/03/20/news/companies/borders.ap/index.htm?postversion=2008032006

[Ghost Dog]

23. The Great Unwind has begun, Citigroup warns

Avoid leveraged companies, countries and consumers, bank's strategists say

SAN FRANCISCO (MarketWatch) -- The Great Unwind has begun, Citigroup Inc. strategists warned on Wednesday.

As markets and economies de-leverage across the globe, investors should avoid companies and countries that have grown to rely too much on borrowed money, they said.

That means favoring public-equity markets over hedge funds, private-equity and real estate, while leaning toward emerging market countries and away from developed nations like the U.S., the bank's global equity strategy team advised.

/... http://www.marketwatch.com/news/story/great-unwind-has-started-avoid/story.aspx?guid=%7B1DC25DFD%2D3543%2D4CF4%2DBE26%2D74EA4B9C9330%7D&dist=hplatest
--> DU: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x36637

[ozymandius]

27. Citigroup Plans to Cut More Than 5% of Securities Employees

March 20 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank by assets, plans to cut more than 5 percent of staff in the securities unit to rein back expenses after U.S. subprime- mortgage related losses.

.....

Citigroup plans to fire 2,000 investment bankers and traders by the end of the month, the New York Times reported earlier today, citing unidentified people close to the situation. Castellani would not confirm nor deny the report.

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

...very short...

[formercia]

38. It's going to be lonely

on the Darien to NYC train.

How much did you pay for that house?

[UpInArms]

45. longer version: Citigroup plans more securities job cuts

http://news.yahoo.com/s/nm/20080320/bs_nm/citigroup_jobs_dc

NEW YORK (Reuters) - Citigroup Inc, the largest U.S. bank, plans further job cuts in its securities operations in a bid to cut costs after subprime mortgage and credit problems led to a record quarterly loss.

Any job losses would be on top of 4,200 cuts companywide announced in January by Chief Executive Vikram Pandit, and 17,000 announced last April by predecessor Charles Prince. Citigroup has said it ended 2007 with 375,000 employees.

"Each year we identify the bottom 5 percent of performers in the institutional clients group, and some number of these people leave the firm," spokesman Adam Castellani said on Thursday. "This year, we will have a larger number of reductions as we continue to strengthen the business and lower our expense base."

The institutional clients group includes investment banking and trading operations, as well as alternative investments, which offers hedge fund and private equity services.

According to the New York Times, citing people close to the situation, Citigroup plans to lay off 2,000 investment bankers and traders before the end of March. Most cuts will be in New York and London, though other markets in Europe and Asia will be affected, the newspaper said. Traders are more at risk given market conditions, the newspaper said.

...more...

[formercia]

72. In 6 Months all will be left

are the most hard-core Pirates. Arghh, Matey, hands me that there harpoon.

[AnneD]

110. So.....

Will the book be retitled Mopey Dick

An Easter joke from my daughter.....

What did the egg say to the pan of boiling water........










it may take me a while to get hard-I was just laid yesterday....... :evilgrin: Save your popcorn folks, save your popcorn.

[Zynx]

46. The problem with that strategy is that in global slowdowns emerging market economies

get hit harder than developed economies because international trade always contracts faster than overall economic growth. This is uniformly true. Also, emerging market economies need a fairly free and open flow of credit in order to expand. Export earnings are not sufficient by themselves.

[InkAddict]

76. Re-enter drug lords and arms dealers.

who will feel empowered to trade freely and gorge at the trough of both global and local misery, North-style, in whatever currency works best.

[formercia]

93. Carpetbagger economy

like the South during 'Reconstruction'.

BFEE goes native and puts on their pointy little white hoods.

[DemReadingDU]

86. Citigroup Taps $7.3 Billion Credit Lines, Citing Market `Disruption'

March 20 (Bloomberg) -- CIT Group Inc. drew on its $7.3 billion in credit lines, citing ``protracted disruption'' in capital markets.

The proceeds will be used to repay debt maturing in 2008, New York-based CIT said today in a statement distributed by Business Wire.


http://www.bloomberg.com/apps/news?pid=20601087&sid=aeHc5N31KojU&refer=home


this doesn't bode well
:(

[Tansy_Gold]

127. I know it's late, but can someone explain this to me?

CIT Group is "drawing" on "credit lines." Does this mean they're "borrowing" the money?

And if this "borrowed" money is to "be used to repay debt," are they borrowing to pay off already borrowed money? Is this, like, the same as not making any progress? Kind of like paying one credit card by writing a "balance transfer" check on another one?


Tansy Gold

[wordpix]

109. "investors should avoid companies and countries that have grown to rely too much on borrowed money"

Citigrp is saying AVOID INVESTING IN THE U.S., our latest thrid-world country. Unfuckingbelievable.
:grr:

[Ghost Dog]

24. Dollar extends gains as commodities tumble

Thu Mar 20, 2008 6:03am EDT
LONDON, March 20 (Reuters) - The dollar extended gains on Thursday breaking through $1.55 versus the euro, above 100 yen and up nearly 2 percnt versus the Swiss franc as commodity prices tumbled. By 0955 GMT the dollar was up 1.1 percent versus the euro at $1.5460 <EUR=>. It was up 1.4 percent versus the yen at 100.15 yen <JPY=> and up 1.75 percent at 1.0140 Swiss francs. "In general its a commodity price move taking the dollar higher and the oil price decline is an important factor," said Adarsh Sinha, currency strategist at Barclays Capital.

/.. http://www.reuters.com/article/marketsNews/idINL2037273620080320?rpc=611

[Ghost Dog]

26. Euro= USD 1.548, CHF 1.568 JPY 155.1 and GBP 0.781 at this time

[Ghost Dog]

65. Euro= USD 1.542, CHF 1.566 JPY 153.8 and GBP 0.778 at this time

[ozymandius]

25. Northern Rock Secret Memo Shows CEO Dismissed Subprime Threats

March 20 (Bloomberg) -- Downstream from the 80-year-old cast-iron Tyne Bridge, abandoned shipyards on river banks tell the story of a once thriving coal mining and steelmaking center in Newcastle-upon-Tyne in northeast England.

.....

It was on the Tyne Bridge that Adam Applegarth and four fellow directors of Northern Rock Plc celebrated the bank's initial public offering on Oct. 1, 1997. During the next 10 years, the bank became the Newcastle area's largest private employer, with a staff of 6,000.

Northern Rock, whose origins go back to the city's prime in the mid-19th century, saw itself as a corporate standard-bearer for the region, says Sir John Riddell, a director from 1990 and chairman from 2000 to 2004. The bank chose to focus on making home mortgage loans. It had little income from commercial loans and unsecured lending, credit cards or checking accounts.

.....

For almost a decade, Northern Rock prospered. It funded home loans by packaging an increasing amount of its mortgages into securities it sold as bonds. Applegarth, Northern Rock's rising local star, who became chief executive officer in 2001 at the age of 38, more than doubled profit to 394.5 million pounds ($788 million) from 2001 to 2006 by following that plan.

.....

Northern Rock's fatal mistake was that it didn't adequately hedge against the possibility of a steep rise in the cost of borrowing in international credit markets, says Simon Maughan, a London-based analyst at MF Global Securities Ltd.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aSBkfv1FFfDo&refer=home

[formercia]

29. Winnebago 2Q Profit Drops 67 Pct

http://biz.yahoo.com/ap/080320/earns_winnebago.html

AP

Thursday March 20, 7:23 am ET
Motor Home Maker Winnebago Reports 67 Pct Profit Slide in 2Q on Lower Sales, Economic Fallout

DES MOINES, Iowa (AP) -- Motor home manufacturer Winnebago Industries says second quarter profits fell nearly 67 percent as consumer confidence in the economy continues to drag down sales of recreational vehicles.

The Forest City-based company said Thursday it cut employment by 9 percent, or about 300 people during the quarter to bring production in line with slowing sales.

Net income was $2.5 million, or 9 cents a share, down from $7.5 million, or 24 cents a share a year ago.

Sales fell 17.5 percent to $164.2 million from $199 million for the same period a year ago.

[Demeter]

31. Are Hedge Funds a Scam?

http://www.nakedcapitalism.com/2008/03/are-hedge-funds-scam.html

Martin Wolf comes perilously close to declaring hedge funds a scam in his article today, "Why today’s hedge fund industry may not survive." However, in a departure for the normally clearthinking Wolf, the article conflates issues that would have benefitted from being discussed separately.

First, he seems shocked, shocked that investment managers can make a lot of dough while delivering mediocre returns. Where has he been? It's almost a truism that active managers don't earn their fees; numerous analyses have found that ones that outperform don't sustain it over time. It's just that hedge funds have elevated the fee extraction to unimagined levels.

What Wolf points out is that hedge funds that pursue low risk strategies (ones that exploit predictable patterns that reverse only rarely, say something as mundane as the fact that the yield curve is generally positive) and then leverage it heavily, a hedge fund manager can deliver years of good returns (good these days is in the mid teens; the eagerness of institutional investors to put their money with hedge funds has lowered return requirements). But those strategies will eventually hit that one-in-ten year wall when their strategy blows up and wipes the investors out.

Wolf argues that it's hard for investors to discern luck from skill, which is accurate and vexing. He then invokes George Akerlof's theory of lemon markets, which posits when there is information asymmetry (ie, the seller inevitably knows more about his product than the buyer) that bad supply eventually drives out good. Customers come to recognize that there is only overpriced junk on offer, and the market dies. However, Akerlof's thought example of a lemon market was used cars, and it is still thriving. So Wolf's prediction of hedge funds dying off, or the industry shrinking considerably, seems a bit premature (although costly borrowings alone will make strategies that depend on high gearing much less viable).

Wolf misses quite a few issues: first, there are a number hedge fund strategies that don't use much or any leverage. The term hedge fund initially referred to the ability to go long or short; now as one wag observed, it's a compensation scheme, not an investment strategy. What is pernicious is not hedge funds generally, but the particular pattern that Wolf describes, of using leverage to make a mediocre-but-highly-predictable-most-of-the-time strategy look sexy.

Second, the industry has gotten very clever in selling institutional investors on attributes other than return (that's why they now accept those mid-teen returns as good, when before, the reason to pay those exorbitant fees was the expectation of 25+% returns) was that they deliver synthetic beta (aka alternative beta), or uncorrelated returns, which makes them a desirable addition to a portfolio. But this is a real scam; you can create synthetic beta cheaply, so there is no reason to pay 2 and 20 for it.

What might lead the hedge fund industry to shrink considerably is if a large number of funds in a fairly wide range of strategies were to blow up in a fairly compressed period, say a year to eighteen months, That would give the product such a taint as to deter risk averse investors (particularly institutional investors) for quite a while.

From the Financial Times:


Hardly a week goes by without the implosion of a hedge fund. Last week it was Carlyle Capital, with an astonishing $31 of debt for each dollar of equity. But we should not be surprised. These collapses are inherent in the hedge-fund model. It is even conceivable that this model will join securitised subprime mortgages on the scrap heap.

Every week, 50 of the world’s most influential economists discuss Martin Wolf’s articles on FT.com
Getting away with producing adulterated milk is hard; getting away with an investment strategy that adds no value is not. That was the point made by John Kay, in a superb column last week (this page, March 11). With the “right” fee structure mediocre investment managers may become rich as they ensure that their investors cease to remain so.

Two distinguished academics, Dean Foster at the Wharton School of the University of Pennsylvania and Peyton Young of Oxford university and the Brookings Institution, explain the point beautifully*. They start by asking us to consider a rare event – that the stock market will fall by 20 per cent over the next 12 months, for example. They assume, too, that the options market prices this risk correctly, say at one in 10. An option costs $0.1 and pays out $1.

Now imagine that we set up a hedge fund with $100m from investors on the normal terms of 2 per cent management fees and 20 per cent of the return above a benchmark. We put our $100m in Treasury bills yielding 4 per cent. We also sell 100m covered options on the event, which nets us $10m. We put this $10m, too, in Treasury bills, which allows us to sell another 10m options. This nets another $1m. Then we go on holiday.

There is a 90 per cent chance that this bet will pay off in the first year. The fund then grosses $11m on the sale of the options, plus 4 per cent interest on the $110m in Treasury bills, for a handsome 15.4 per cent return. Our investors are delighted. Assume our benchmark was 4 per cent. We then earn $2m in management fees, plus 20 per cent of $11.4m, which amounts to over $4m gross. Whatever subsequently happens, we need never give this money back.

The chances are nearly 60 per cent that the bad event will not occur over five years. Since the fund is compounding at a rate of 11.4 per cent a year after fees, we will make well over $20m even if no new money is attracted into this apparently stellar enterprise. In the long run, however, the bad event is highly likely to occur. Since we have made huge profits, our investors have paid us handsomely for the near certainty of losing them money.

The immediate response may be that so naked a scam is inconceivable. Well, imagine a fund that leverages investors’ money by borrowing massively in short-term money markets in order to purchase higher-yielding paper. Assume, again, that the premium gives a correct estimate of the risk. With sufficient leverage, this fund, too, is likely to make profits for years. But it is also very likely to be wiped out, at some point. Does this strategy sound familiar? It certainly should by now.

We can identify two huge problems to be solved. First, many investment strategies have the characteristics of a “Taleb distribution”, after Nicholas Taleb, author of Fooled by Randomness. At its simplest, a Taleb distribution has a high probability of a modest gain and a low probability of huge losses in any period.

Second, the systems of reward fail to align the interests of managers with those of investors. As a result, the former have an incentive to exploit such distributions for their own benefit.

Professors Foster and Young argue that it is extremely hard to resolve these difficulties. It is particularly difficult to know whether a manager is skilful rather than lucky. In their telling example, the chances are more than 10 per cent that the fund will run for 20 years without being exposed. In other words, even after 20 years the outside investor cannot be confident that the results were not being generated by luck or a scam.

It is also tricky to align the interests of managers with those of investors. Obvious possibilities include rewarding managers on the basis of final returns, forcing them to hold a sizeable equity stake or levying penalties for underperformance.

None of these solutions solves the problem of distinguishing luck from skill. The first also encourages managers to take sizeable risks when they are close to the return at which payouts begin. Managers can evade the effects of the second alternative by taking positions in derivatives, which may be hard to police. Finally, even under the apparently attractive final alternative it appears that any clawback contract harsh enough to keep unskilled managers away will also discourage skilled ones.

It is obviously best not to pay the manager, as a manager, at all, but rather to invest alongside him, as at Berkshire Hathaway, Warren Buffett’s investment company. But we still have the challenge of knowing whether the manager is any good. We know this today of Mr Buffett. Fifty years ago, that would have been very hard to know.

What we have then is a huge “lemons” problem: in this business it is really hard to distinguish talented managers from untalented ones. For this reason, the business is bound to attract the unscrupulous and unskilled, just as such people are attracted to dealing in used cars (which was the original example of a market in lemons). The lemons theorem states that such markets are likely to disappear. The same may happen to today’s hedge-fund industry.

Now consider the financial sector as a whole: it is, again, hard either to distinguish skill from luck or to align the interests of management, staff, shareholders and the public. It is in the interests of insiders to game the system by exploiting the returns from higher probability events. This means that businesses will suddenly blow up when the low probability disaster occurs, as happened spectacularly at Northern Rock and Bear Stearns.

Moreover, if these unfavourable events – stock market crashes, mortgage failures, liquidity freezes – come in stampeding herds (because so many managers copy one another), they will say: “Nobody could have expected this, but, now that it has happened to all of us the government must come to the rescue.”

The more one believes this is how an unregulated financial system operates, the more worried one has to become. Rescue from this crisis may be on the way, but what about next time and the time after next?

[Robbien]

73. The raid hedgers made on UK's HBOS Wednesday is being called a Bank Robbery

A hunt has been launched for a stock market trader who may have made £100 million in a "modern day bank robbery" after an attack on the share price of the country's biggest mortgage lender.

Shares in Halifax Bank of Scotland fell by 17 per cent as traders attempted to make a fortune by betting on the bank's falling stock.

Malicious rumours circulated by speculators were blamed for the run, which saw more than £3 billion wiped off the bank's value.

Britain's financial watchdog launched a criminal investigation to hunt down "ruthless" rogue traders, including one speculator thought to have made £100m from buying and selling shares during the day.

A senior HBOS executive said: "This is the modern day version of bank robbery."

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/19/bcnrumour419.xml

The Brits are going after them hard and fast

Over in Australia, their fed regulators are starting to go after their hedgers:

Australian Hedge Funds Reject Market Manipulation Accusations

The Australian hedge funds industry body said it supports greater disclosure when investors sell borrowed shares, as regulators investigate whether market manipulation pushed some stocks to record lows in recent weeks.

The Australian chapter of the Alternative Investment Management Association rejected accusations hedge funds targeted troubled companies through short-selling and spreading rumors directors received margin calls, AIMA's Chairman Kim Ivey said in a note to members that was e-mailed to Bloomberg yesterday.

Australia's benchmark S&P/ASX 200 Index has dropped 17 percent this year, led by plunges in companies including Allco Finance Group Ltd., MFS Ltd. and City Pacific Ltd. The three companies have all tumbled more than 75 percent, dropping their combined market worth to about A$500 million, compared with A$7 billion on June 30.



http://www.bloomberg.com/apps/news?pid=20601081&sid=aE634VBeQ88k&refer=australia

So the Brits, Aussies, and the EU are fast moving against these guys.

Our Feds are moseying along saying "hey maybe we should take a look a what happened to Bear Sterns. Let's think about maybe perhaps putting together a committee or something, someday."

[Demeter]

74. Sounds Like the Gloves Are Off

[Robbien]

79. Ha! Over at UK Financial Times: "We’re raising a posse"

A bank robber was still on the loose on Thursday, having reportedly drained the London equity market of £100m on Wednesday, before spending much of the proceeds on champagne in a Mayfair drinkery. He/she is said to have posed as a hedge fund manager.

We will be tracking this bad ‘un down on Markets Live, FT Alphaville’s daily markets chat.

Join the posse at 11am.

http://ftalphaville.ft.com/blog/2008/03/20/11753/were-raising-a-posse-markets-live-at-11am/

Gotta love the Brit humor.

[Karenina]

97. Two Brits 'splain it all to you!

http://www.brasschecktv.com/page/187.html

[54anickel]

88. That's because the Brits, Aussies and EU have a public that is still

paying attention to what's going on and will happily take to the streets when they feel they've been done wrong.

We'd only get that massive response here if American Idol was pre-empted. :eyes:

Here the person would be held up as an Idol, a role model...."Someday I'll be able to do that and get mine too!" If there's no precise, written law against it, anything goes these days no matter how unethical or immoral - so long as it's "legal" (wink-wink-nudge-nudge).

[Robbien]

92. Even Russia is getting into investigations, audits and regs

The European Central Bank launched a three-year program with the Bank of Russia Thursday aimed at boosting cooperation in bank supervision and auditing.

http://insurancenewsnet.com/article.asp?n=1&neID=20080320375.4_30e90038f6a652fb

While latest US headline reads:

SEC Mulling Bear Stearns Probe
http://www.newsinferno.com/archives/2763

UK is creating a Posse, Aussies are forming an international coalition, Russians are launching programs. The US mulls.

[Ghost Dog]

111. Banks urge BoE to be generous and flexible

LONDON (Reuters) - Top bankers urged the Bank of England to be more generous and flexible to ease tensions in fragile money markets at a meeting on Thursday.

The central bank pumped an extra 5 billion pounds into money markets on Thursday, but banks, facing their toughest period for over a decade, believe it must do more to restore confidence in the financial system, according to bank industry sources.

The BoE said in a short statement after the meeting that it and the banks "agreed to continue their close dialogue with the objective of restoring more orderly market conditions."

Boosting banks' access to liquidity and limiting damage from rumour mongering topped the meeting of bank executives and officials, chaired by Bank of England Governor Mervyn King. Details of the talks were not disclosed.

After months of turmoil, the banking industry was shaken further on Wednesday by speculation that a bank faced liquidity problems. HBOS, the biggest UK mortgage provider, bore the brunt of the chatter and its shares plunged 17 percent.

HBOS slammed the rumours and authorities joined in with an unprecedented public reaction. The BoE said no bank was in trouble and the Financial Services Authority warned it will hunt out people spreading "unfounded rumours"..

By Thursday's close, HBOS had clawed back almost all of its loss, but investors remain jittery about UK banks.

/plenty more... http://uk.reuters.com/article/topNews/idUKL202723420080320

[Demeter]

32. BERNANKE IS GOING TO RUN OUT OF BULLETS by Dan Denning

DailkyReckoning.com

The Fed is not literally printing new money to lend to Wall Street banks. What it IS doing is trading its stock of healthy (if you can call them that) U.S. Treasury bonds, bills, and notes for illiquid, not healthy at all, mortgage backed bonds. Fed-followers argue the Fed can actually make money on this deal by demanding a large discount on the collateral and charging borrowers a hefty fee for the temporary asset exchange. Blah blah blah.

The Fed’s current collateral-laundering policy is clearly inflationary. While not directly increasing the liabilities of the U.S. government (yet) the Fed only has about $700 billion in Treasury’s it can lend out for 28-days at a time (or longer, if it sees fit.) The promise to lend up to US$200 billion as of March 27 eats into this US$700 billion. And that leads us to what comes next.

First, the Fed lowered the discount rate on direct loans to commercial banks from 3.50% to 3.25%. It also, as we expected, extended the terms of this emergency loans (collateral swaps) from 30 days to 90 days.

Next, according to the Fed’s release, "the Federal Reserve Board voted unanimously to authorize the Federal Reserve Bank of New York to create a lending facility to improve the ability of primary dealers to provide financing to participants in securitization markets."

“This facility will be available for business on Monday, March 17. It will be in place for at least six months and may be extended as conditions warrant. Credit extended to primary dealers under this facility may be collateralized by a broad range of investment-grade debt securities. The interest rate charged on such credit will be the same as the primary credit rate, or discount rate, at the Federal Reserve Bank of New York.”

The Fed said the cut in the discount rate and the new lending facility are “designed to bolster market liquidity and promote orderly market functioning. Liquid, well-functioning markets are essential for the promotion of economic growth.” Yes, they are.

But will the Fed’s surprise Sunday double-barreled policy action turn the tide for stocks?

If not, there is always the Fed funds rate to cut. The Fed lower(ed) short-term rates again this week from 3% to 2.25%. Keep in mind this puts real U.S. interest rates below the rate of inflation. Negative real rates are obviously inflationary.

But here’s the other thing. If the current liquidity crisis spreads beyond Bear Stearns, the Fed will be compelled to make all of its US$700 billion in Treasury assets exchangeable to distressed firms. It has said as much in accepting a “broad range of collateral” it is willing to accept in exchange for short-term funds. Once the Fed depletes or exhausts its inventory of Treasuries it can swap for illiquid assets, what does it do?

It has to go out and buy more Treasuries on the open market. And to do that it WILL need to create new cash, which is definitely inflationary. The Fed hasn’t yet monetized bad mortgage debt by creating new cash to buy it from banks. Instead, it’s trading good debt for bad debt.

We reckon – the way this thing is playing out – that the Fed is going to have print more money soon. It will either print more money to buy more Treasuries to lend to illiquid, poorly capitalized financial institutions (Fannie Mae and Freddie Mac come to mind).

Or, if things really get desperate, the Fed will have to create new cash to directly purchase impaired assets from financial institutions. This is why it’s called “monetizing debt” by the way. The central banks turn liabilities into cash by printing new money to buy the debt from its current owners.

This kind of deal bails out the owners of the bad debt (the investment banks and mortgage lenders). It keeps the financial system alive. It prevents the further sale of assets and the loss of depositor’s money. And it prevents a complete collapse of confidence in the financial sector, as happened in the Great Depression. But it does it all at a great cost: the viability of the U.S. dollar as the world’s reserve currency.

So, the Fed’s liquidity efforts will become truly inflationary when it runs out of Treasury bonds to exchange for dodgy mortgage collateral. There is an interesting argument to be had over whether the new dodgy collateral becomes the backing for the U.S. dollar. But we will leave that aside. We wonder today how many bullets the Fed has left in its monetary policy gun.

“The Fed has committed as much as 60 percent of the $709 billion in Treasury securities on its balance sheet to providing liquidity and opened the door to more with yesterday’s decision to become a lender of last resort for the biggest Wall Street dealers,” reports Scott Lanman at Bloomberg.

It also cut the discount rate this weekend, he ads. “The action comes on top of Chairman Ben S. Bernanke’s other balance-sheet commitments totaling as much as $430 billion through other auctions, repurchase agreements and $30 billion in financing to help JPMorgan Chase & Co. purchase Bear Stearns Cos.”

Pretty soon Bernanke is going to run out of bullets. He’ll have to throw the gun!

Here’s the question though, how does any of these help Americans pay their mortgage? Does it? Making inter-bank credit cheaper isn’t even encouraging banks to lend to one another. The Fed has had to step in and become a direct lender to prime brokers.

Air Marshall Bernanke is in trouble. As soon as he runs out of his stock of Treasury bonds to lend to distressed banks, he’s going to have to buy more. He’ll have to create new money to do it. And if he somehow escapes that necessity, he may have to purchase outright the collateral held by Fannie Mae and Freddie Mac. That will take new money too.

It is probably Henry Paulson’s turn to do something to save the system, although we are not sure what. Paulson opposes a bailout of investment banks. But maybe he won’t be as opposed to the creation of a new authority set up to purchase the assets of Fannie Mae and Freddie Mac and hold them in trust. Then, millions of Americans will have Uncle Sam as their landlord (overlord).

[InkAddict]

80. How much will rent , all utilities included, be in a Rex 84 camp?

Will residents be set up with a PX-type quickie-mart for basic necessities like sterno, shoes, postage,and cardboard(green)coffins?

If and when things improve(?), will the camp-schooled kids face discrimination on the outside or will token IQ-tested and approved be removed and fostered on the outside long before graduation from kindergarten?

[kineneb]

82. Fed simply postponing the inevitable...

break out the popcorn... it may be all there is to eat...
:popcorn: :shrug:

[UpInArms]

33. dollar watch

Last trade 72.773 Change +0.743 (+1.03%)

Is it Time to Go Long Dollars?

http://www.dailyfx.com/story/bio1/Is_it_Time_to_Go_1205962275157.html

As we warned in yesterday’s Daily Fundamentals, dollar weakness is not over. However that statement is only true for the US dollar against the Japanese Yen, Swiss Franc and to some degree the Euro. This is because the US dollar actually strengthened against the commodity currencies and the British pound as risk aversion triggers dominates the currency market. Even though we expect the US dollar to continue to weaken against the Euro, Japanese Yen and Swiss Franc, we could see a further recovery against the high yielders. Being long dollars may not be the wrong trade if it is against the right currencies. Triple digit swings in the US stock market and 300 pip swings in currencies will make it very difficult for carry trades to recover. In fact, we are more bearish carry trades than we are the US dollar. Since the AUD/USD and NZD/USD are also carry trades, they are vulnerable to further weakness. The US dollar is now a funding currency for carry trades and it is important for traders not to forget that. Thankfully the Federal Reserve is not alone. According to Barney Frank, the Chair of the Financial Services Committee, the Treasury department is finally willing to discuss ways to help the hundreds of thousands of Americans facing foreclosure. Proposals by Frank include forgiving a portion of some of the remaining principal and insuring up to $300 billion in refinanced, affordable-cost mortgages. Capital requirements have also been cut for Fannie Mae and Freddie Mac, which will allow them to use some of their excess funds to buy mortgages. This would add up to $200 billion of immediate liquidity into the mortgage backed securities market and hopefully the combination of efforts from the US government and the Federal Reserve will put an end to the market’s misery. Realistically, it will be some time before these plans are passed and any stimulus will also need time to filter into the markets. In the meantime, the Philadelphia Fed manufacturing survey and leading indicators are due for release tomorrow. The drop in the Empire State manufacturing survey to a record low suggests that we could see a similar move in the Philly Fed index. Leading indicators should also be dollar negative given the sharp deterioration in the US economy and in the stock market.

...more...

Dollar Rises As Profit Taking Kicks in - Will ECB Finally Relent?

http://www.dailyfx.com/story/bio2/Dollar_Rises_As_Profit_Taking_1206009779347.html

Ahead of the holiday week-end the EURUSD came under a very heavy bombardment of profit taking as the pair crumbled through the key 1.5500 support level in early European trade. The unwind of the recent rally to 1.5900 was initially trigged by sharp decline in the price if gold during the Asia session and the selling pressure continued through the London open as both long term players and short term specs all dumped their long euro positions.

One possible reason for euro’s sudden weakness is the growing body of evidence that EZ economy is beginning to slow down. Yesterday’s worst trade deficit in a decade and today’s lower than expected PMI services readings suggest that the high exchange rate and the collapse of demand in US are finally starting to impact EZ businesses. Should the situation worsen, talk will turn to the possibility of an ECB rate cut sometime in Q2 of this year.

The euro has been the biggest beneficiary of dollar’s weakness over the past several months as interest rate spread between the two currencies has continued to widen. With the Fed lowering rates by another 75bp on Tuesday, the spread now stands at 175bp. However, should the market sense a slowdown in EZ growth, it will begin to discount ECB easing and euro’s relentless climb against the dollar may come to an end.

Meanwhile in UK, the economic news was decidedly more positive, as Retail Sales jumped 1.0% from –0.1% expected on stronger sales of clothing. Far from curling up, the UK consumer appear to be alive and well. That news should keep the BoE relatively hawkish, suggesting that at best the UK central bank will only lower rates by 25bp rather than 50bp. As a result EURGBP which hit yet another record high yesterday of 7914, dropped to 7815 in the aftermath of the release. Unless financial markets see another cataclysmic event in the near future and the pound comes in for another wave of selling, the pair should continue to trade down working off its grossly overbought condition.

...more...

I just don't see that with all the central banks intervening that 2 up days for the dollar constitutes a "trend".

[UpInArms]

35. Toppled commodities breathe life into dollar

http://www.reuters.com/article/bondsNews/idUSL2040933920080320?sp=true

LONDON, March 20 (Reuters) - Investors called time on the rush to commodities on Thursday with repatriated profits lifting an ailing dollar, while stock markets saw seepage as bank stress dominated sentiment with a profit warning from Credit Suisse.

Flagship precious metal gold tumbled to a one-month low as funds cashed in on a surge that had taken bullion to a record high above the $1,000 milestone.

Spot metal <XAU=> fell as low as $911.80 per troy ounce from $944.20/945.00 quoted late in New York on Wednesday and well away from Monday's record $1,030.80.

Similarly, oil CLc1 and base metal price losses deepened on fears that global consumption could contract if the United States slipped into recession.

Analysts said hefty profits seen in commodities markets already this year were proving too hard to resist in the current uncertain global climate.

"Since August 2007 when we all first learnt what subprime meant, gold has risen by close to 50 percent. So it's no surprise that it's given back some of that money," said Ross Norman, Managing Director of TheBullionDesk.com.

"Anyone who bought gold has been rewarded with a very healthy return. There's a temptation to take profit, people have done so and it's quite healthy," he added.

...more...

[UpInArms]

53. ECB lends banks extra 15 bln euros over Easter

http://www.reuters.com/article/bondsNews/idUSL2080003120080320

FRANKFURT, March 20 (Reuters) - The European Central Bank lent euro zone banks an extra 15 billion euros on Thursday to tide them over the Easter holiday period, although banks bid for four times as much.

The unscheduled tender failed to dampen money market rates noticeably, with the bid-ask spread on overnight cash still high at 4.17/4.22 percent at 1108 GMT, above the ECB's 4 percent benchmark.

Indicative rates for borrowing for one week also moved up, with the benchmark Euribor interbank rate rising to 4.279 percent on Thursday from Wednesday's 4.268 percent, its highest in almost three months.

Three-month Euribor <EURIBOR=> rose to 4.674 percent from 4.664 percent, also the highest since late December.

Other major central banks have also added extra funds to markets this week as the fire sale of U.S. investment bank Bear Stearns fanned concerns about widening fallout from the subprime crisis.

...more...

[Zynx]

119. This whole situation affirms why central banks exist.

I can't conceive of where we would be without them.

[ozone_man]

54. Monday was a better day to go long.

;)

Is the FED still relevant? They seem to be shooting blanks.

[citizen snips]

63. Dollar Holds As Oil Declines

BERLIN (AP) -- The dollar was up versus the 15-nation euro Thursday as oil dropped below $100 for the first time in two weeks.

The euro bought $1.5408 in morning European trading, below the $1.5613 it bought the night before in New York and well off its all-time high of $1.5904 set Monday.

The dollar dropped to 99.38 Japanese yen from 100.00 yen the night before, above its 12-year low of 95.77 set on Tuesday. The British pound drifted lower to $1.9818 from the $1.9849 it bought in New York the night before.

Data has begun to suggest that record high prices for a barrel of oil have begun to drive down demand.

more...
http://biz.yahoo.com/ap/080320/dollar.html?.v=4

[Doctor_J]

34. Help me with an NPR blurb from this AM

They said that Fannie & Freddie are going to get some more "relief" which they will turn into cash which will in turn be used to reduce rates & hopefully savve some close calls from foreclosure. Is this just going to cause more Berankflation, or will it do some good?

[UpInArms]

42. Fannie and Freddie are GSE (goverment sponsored entities)

and as such, have implied warranty that the taxpayer will bail them out if things go wrong.

hmmmm.... cutting the reserves to flood the market with more liquidity?

you decide

:hi:

[UpInArms]

44. Fannie and Freddie Set Free

http://news.yahoo.com/s/bw/20080320/bs_bw/mar2008pi20080319754797

Another stone fell into place in the federal government's plan to build a path to credit market recovery. On Mar. 19, the Office of Federal Housing Enterprise Oversight, or OFHEO, said it was reducing the amount of capital it requires Fannie Mae (NYSE:FNM - News) and Freddie Mac (NYSE:FRE - News) to maintain on their balance sheets above statutory requirements. By reducing the capital surplus level from 30% to 20%, the regulator will provide up to $200 billion in immediate liquidity to the distressed mortgage-backed securities market.

Investors welcomed the announcement, pushing up Fannie's share price by 8.8%, to close at 30.71, and boosting Freddie's shares by 14.9%, to 29.90.

The latest move, combined with earlier actions to loosen controls on Fannie and Freddie, should enable the two government-sponsored enterprises to buy hundreds of billions of dollars worth of mortgages. Starting Apr. 1, the mortgage limits on loans the two outfits can guarantee will rise from $417,000 to $729,750. The caps on their portfolios have also been lifted.

An Infusion of Cash

The key factor in the decision to ease capital rules on the two companies was that they reported audited financial results on time at the end of February, OFHEO's director, James Lockhart, said on CNBC Business News. With the proper risk-management and financial controls in place, "now is the time they can truly help the mortgage markets," Lockhart said.

...more...

[DemReadingDU]

36. 2nd Healthcare fraud trial in Columbus, Ohio - update

3/20/08 Tapes: Witness offered millions to 'have amnesia'

The chief government witness in this month's National Century Financial Enterprises trial was promised at least a million dollars and as much as $20 million by a friend of the company's president, tape recordings played in a related trial revealed yesterday.

That's what the friend, Karl A. Demmler, offered witness Sherry Gibson during a rambling two- to three-hour dinner conversation on Aug. 29 last year.

Federal prosecutors say it's one of a series of meetings between the two that help prove that Demmler and Lance K. Poulsen, formerly chairman, chief executive and president of National Century, tried to bribe Gibson to influence her testimony about Poulsen in his trial.

Yesterday was the third day of the bribery trial before federal Judge Algenon L. Marbley in Columbus, where Poulsen and Demmler are charged with witness tampering.

Prosecutor Leo Wise spent much of the time playing recordings of conversations between Gibson and Demmler that the FBI taped in 2007.

At that time, Gibson had just finished serving three years in prison for her part in the National Century collapse. She agreed to wear a wire after she concluded that Demmler was trying to influence her future testimony.

Demmler is heard on the tapes numerous times telling Gibson she could "have amnesia" or "remember nothing" about dealings at National Century when prosecutors question her. Demmler tells her that, at Poulsen's direction, he then could provide her with cash.

"At the same time, you need to have some moolah to not remember," Demmler said in one of the conversations with Gibson.

Although Gibson said she never spoke directly to Poulsen, Demmler played two messages for her that Poulsen left for him. In one, Poulsen said: "There are some ways for our friend to recover our friend's losses."

Gibson said she was the "friend" Poulsen was referring to and that Demmler told her he could pay her through a company he ran or through a "secret fund."

Demmler also had harsh words for many people connected with the case. He says he'd "hang every" judge if he had his way.

About U.S. Bankruptcy Judge Donald Calhoun he had this to say: "I'd cut him up in pieces and feed him to the fish." Calhoun presided over National Century's bankruptcy case.

Demmler refers to Gibson's attorney, Terry Sherman, saying he'd like to "choke that guy to death, too."

On cross-examination by Poulsen's attorney, Peter C. Anderson, Gibson said she thought Demmler was exaggerating when he made those statements and didn't really plan to kill any judges or attorneys.

http://dispatch.com/live/content/business/stories/2008/03/20/bribeday2.ART_ART_03-20-08_C8_HV9MOMM.html?sid=101


link to previous articles
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3233685&mesg_id=3233724

[DemReadingDU]

39. bonddad: Why Transports Matter

3/20/08
Simply put, the transports are a great way to keep track of how the economy is doing. If it's going well, people will have to ship more and more stuff from point A to point B. If things aren't going well, people will be shipping less stuff from point A to point B.

The transportation index was one of the charts that originally led to to make a bear market call. The index had dropped pretty hard.

Airlines are clearly in a downtrend. They've been selling off since the beginning of 2007.

Rail has a stronger chart.

Trucking has essentially been in a three year long consolidation pattern since the beginning of 2005.

more... and several charts to view
http://bonddad.blogspot.com/2008/03/why-transports-matter.html

[formercia]

40. FedEx 3Q Earnings Fall, Beat Views

http://biz.yahoo.com/ap/080320/earns_fedex.html

AP

Thursday March 20, 8:49 am ET
By Woody Baird, Associated Press Writer
High Oil Prices, Slow US Economy Send FedEx 3rd-Qtr Earnings Down 6 Pct, Offers Grim Outlook

MEMPHIS, Tenn. (AP) -- FedEx Corp. reported a 6 percent drop in third-quarter earnings Thursday due to high oil prices and a slow U.S. economy, and indicated it would miss Wall Street forecasts for the fourth quarter.

[Demeter]

48. Warren Buffet Buying Rails

Nostalgia buff?

[Hugin]

55. He digs the cool engineer hats...

Woo! Woo! Chuga-chuga-chuga...

Which brings me to today's Market Mania Harmony... "On the Atchison, Topeka and the Santa Fe" music by Buffet, Warren "Harry" and lyrics by Johnny "(All three)" Mercer.

Good tune.

Not Depression Era.

[Demeter]

66. But Prag--The Sun DID Come Out!

For the first time in weeks Michigan is bathed in healing rays. It's still freezing, and the windchill is 24F, but I'll take it as an improvement.

[Hugin]

81. My dear Demeter... The whole point behind "Tomorrow" is that I'm always...

calling for it to be played "Tomorrow".

;)

(Yes, I've discovered the 'underline' tag.)

[Demeter]

83. You Will Have Your Joke, I See

I thought today's theme ought to be "Big Spender" from Sweet Charity, in honor of the ex-governor and crime fighter Elliot Spitzer, and in homage to "Wait, Wait, Don't Tell Me" from NPR.

Musical: Sweet Charity
Song: Big Spender

Girls:
The minute you walked in the joint,
I could see you were a man of distinction,
A real big spender,
Good looking, so refined.
Say, wouldn't you like to know
What's going on in my mind?

So, let me get right to the point,
I don't pop my cork for ev'ry guy I see.
Hey, big spender, spend...
A little time with...me...me...me!

Do you wanna have fun?
How's about (fun) a few laughs?
I can show you a...good time...
Do you wanna have fun...fun...fun?
How's about (fun) a few (fun) laughs (fun)
Laughs (fun) laughs
(I can show you a...)
(fun) laughs (fun) laughs
(good time)
Fun, laughs (good time)
Fun, laughs (good time)
Fun, laughs (good time)...shhh...
What did you say you are?
How's about a ...(laugh)
I could give you some...
Are you ready for...(fun)
How would you like a...
Let me show you a ...(good time)
Hey, big spender...
Hey, big spender...

The minute you walked in the joint,
I could see you were a man of distinction,
A real big spender.
Good looking, so refined.
Say wouldn't you like to know
What's going on in my mind?
So, let me get right to the point,
I don't pop my cork for every guy I see.
Hey, big spender,
Hey, big spender!
Hey, big spender!
Spend...a little time with ...me!
Fun...Laughs...Good Time!
Fun...Laughs...Good Time!
Fun...Laughs...Good Time!
How about a palsy?...Yeah!

[Hugin]

85. True... True...

Would be a song befitting the current market Zeitgeist. :) (If only a week late. *tsk* )

"How about a palsy?" <---- Whaaat? Uh, um... I'll pass. :/

[kineneb]

84. and happy Norooz (Persian new year) to all

spring equinox celebration, only about 5000 years old...

may as well enjoy nature, the markets are depressing...

[Ghost Dog]

100. Industry lobbies against climate change

BILLINGS, Mont. (AP) - Energy companies and other business interests have launched a nationwide campaign to undermine climate change legislation pending in Congress, saying it could cost millions of jobs, drive gasoline prices sharply higher and suck thousands of dollars from household incomes.

The effort comes as the Senate prepares to take up a bill in the coming months that would impose mandatory emissions reductions. The proposed bill would set a nationwide cap on emissions, and create a cap-and-trade system for greenhouse gas emissions, forcing companies to pay to pollute.

A recent study commissioned by the National Association of Manufacturers and the American Council for Capital Formation estimates that the U.S. economy would have fewer jobs and face at least $631 billion in costs by 2020 should Congress institute an emissions reduction program.

On a 17-state tour that began this week with stops in North Dakota and Montana, industry-funded economists said the legislation threatens to sacrifice three to four million jobs over the next two decades, as higher energy prices dampen industrial production.

Higher gas and electricity prices also would take a bite out of workers' paychecks, to the tune of up to $6,700 a year by 2030, said Margo Thorning, chief economist with the American Council for Capital Formation, whose supporters include ExxonMobil Corp.

"The link between economic growth and energy can't be broken," Thorning said. "There will be cutbacks in production, losses in productivity."

/... http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=55c032d0-871f-4c52-a30d-a3c84963771e

Sorry... Happy Norooz¡! (enjoy while lasts)...

[DemReadingDU]

78. Here's link

3/12/08 Why Warren Buffett is buying railroads
Improved technology and fuel efficiency have made the rails a perfect industry for the 21st century.

Astute investors are climbing aboard. Warren Buffett has been loading up on shares of Burlington Northern Santa Fe and was buying in January at prices only 13% below current levels. (News of his buying boosted the stock.) At last count, he owned more than 18% of the company.

more...
http://money.cnn.com/2008/03/07/pf/sivy_apr.moneymag/index.htm?postversion=2008031218

[DemReadingDU]

41. bonddad: What's Happening With Commodities?

3/19/08
For the last 3-5 months I've been writing about the huge spike in commodity prices. Well commodities have taken a big hit over the last two trading sessions.

Putting this all together, I think commodities traders are thinking there is growing dissent within the Fed about interest rate policy. The rate cut was smaller than we thought it would be and more Fed governors are voting against cutting rates. Therefore, the rate cuts may be near the end. This would also explain why the dollar is rising the last few days:

more...and several charts to view
http://bonddad.blogspot.com/2008/03/whats-happening-with-commodities.html

[4dsc]

47. De-leveraging is why commodities are falling

Lets face it, there's a been a big silent margin call of hedge funds that's driving these prices down..

[Zynx]

52. Considering they were driven up by hedge fund manipulation in the first place this is

only to be expected. These commodity prices are artificially high.

[jdog]

56. Link? nt

[Zynx]

62. This is from a while ago, but anyone who pays attention on a daily basis knows about this:

http://www.iht.com/articles/2006/10/23/bloomberg/bxinvest.php

This is more recent:
http://www.nytimes.com/2008/03/20/business/20commodity.html?em&ex=1206158400&en=8a43b9c2f504045f&ei=5087%0A

Make no mistake, individual investors will be massacred here just like they were in housing and in internet stocks in the 1990s. This is no different at all.

Also, look at the rate of advance in these charts:
http://bloomberg.com/markets/commodities/cfutures.html

That rate of growth is not sustainable and is not reflective of any reasonable behavior.

[MattSh]

102. If you buy late or hold too long, you'll be massacred in any investment.

That's the old "buy high, sell low" mentality.

The only way to make money in any market is to "buy low, sell high". Unfortunately, there's way too many people who only buy when the "money honies" tell them to buy (way too late), then hold an investment for way too long. Or worse, don't understand the investment in the first place.

[Demeter]

51. The Fed Will Cut Until It Runs Out of Points

and then crank up the printing press.

[Robbien]

64. Interesting that the WSJ blog today

said that Bonddad was one of the five financial blogs it watches.

[DemReadingDU]

71. that's interesting

Bonddad (aka Hale Stewart) does have a keen market analysis, and lots of charts and graphs. He used to post every day, but lately only posts Mon - Fri. He is quite busy, with finishing his Masters, planning a wedding, and working.

Occasionally he also posts at DailyKos, and at HuffingtonPost

[Robbien]

77. Which is why it was so surprising

to see his blog being recommended by the right wing establishment cheerleader WSJ. Hard concept to wrap one's mind around.

[UpInArms]

50. Fed Pumping Actions:

Fed adds $5 bln in reserves through 14-day repos

NEW YORK, March 20 (Reuters) - The U.S. Federal Reserve said on Thursday it added $5 billion of temporary reserves to the banking system through 14-day repurchase agreements.

The Fed said the collateral accepted on the 14-day repurchase was made up entirely of mortgage-backed securities. A total of $63 billion in bids were submitted for the 14-day repurchase.

Fed adds reserves via 14-day repurchase agreement

NEW YORK, March 20 (Reuters) - The U.S. Federal Reserve said on Thursday it added temporary reserves to the banking system through 14-day repurchase agreements.

Federal funds, the benchmark overnight lending rate to banks, last traded at 2.375 percent, above the Fed's targeted rate of 2.25 percent.

just a little pop

[Demeter]

69. What Would The Marketplace Look Like, If the Government Lackeys Let It Be?

[Zynx]

118. The whole reason they are there is to prevent financial market excesses from undermining the

stability of the system. I don't know why people are even opposed to this.

[UpInArms]

105. Fed to auction $75 billion in new term securities plan

02. Fed to auction $75 billion in Treasurys on March 27
2:35 PM ET, Mar 20, 2008 - 1 minute ago

03. Fed to accept mortgage-backed securities in auction
2:35 PM ET, Mar 20, 2008 - 1 minute ago

04. Fed to auction $75 billion in new term securities plan
2:35 PM ET, Mar 20, 2008 - 1 minute ago

[roamer65]

124. Mmmm...this ought to help drive M3 growth even further.

[citizen snips]

58. Jobless Claims Jump by 22,000

WASHINGTON (AP) -- The number of newly laid off workers filing for unemployment benefits rose last week to the highest level in nearly two months, providing more evidence that the weak economy is having an adverse impact on the labor market.

The Labor Department said Thursday that applications for jobless benefits totaled 378,000 last week. That was an increase of 22,000 from the previous week and was a far bigger jump than had been expected.

The four-week average for new claims rose to 365,250, which was the highest level since a flood of claims caused by the 2005 Gulf Coast hurricanes.

The current economic slowdown, which many economists believe has already turned into a full-blown recession, is starting to show up in the labor market in terms of higher layoffs and weaker hiring numbers.

more...
http://biz.yahoo.com/ap/080320/jobless_claims.html

[citizen snips]

59. Borders Book Stores May Be Sold

DETROIT (AP) -- Borders, the nation's second-largest bookseller, said Thursday it may put itself up for sale and has lined up $42.5 million in financing to help the chain continue operations.

Borders has lost market share both to online companies and to Wal-Mart Stores Inc.

Borders Group Inc. said the financing commitment comes from investment funds affiliated with Pershing Square Capital Management LP, a major shareholder, and includes an offer to buy Borders' international businesses.

"We believe that consummation of the transactions under the commitment will make us fully funded for 2008, where absent these measures, liquidity issues may otherwise have arisen in the next few months," Borders CEO George Jones said in a statement.

more...
http://biz.yahoo.com/ap/080320/borders_group_sale.html

[citizen snips]

60. Pepsi Buys Control of Russian Juicemaker

NEW YORK (AP) -- PepsiCo Inc. and its biggest bottler said Thursday that they are paying $1.4 billion to buy a majority stake in Russia's biggest juice company, JSC Lebedyansky.

That price tag that makes it PepsiCo's biggest acquisition since it bought The Quaker Oats Co. in 2001 and its biggest foreign acquisition ever, PepsiCo International chief executive Mike White said.

"It's a strategic home run for PepsiCo," White said.

White said the deal fits two criteria important to the company: building its portfolio of healthier products and getting market share in the key growth markets of Brazil, India, Russia and China.

more...
http://biz.yahoo.com/ap/080320/pepsi_russia.html

[MilesColtrane]

68. I can see it now.... Borschtski Cola™.

[TalkingDog]

89. Or to "revive" and oldie goldie

"Come Alive with Lebedyansky
Lebedyansky comes Alive!"


From the 30's
"Twice as Much for a Nickel too,
Lebedyansky is the one for you!"

[MilesColtrane]

91. Da

"Pepsi: The Choice of Those Being in the Glorious Post-Socialist Generation"

[hatrack]

96. Lebedyansky - Cultural Learnings Of M&A For Make Benefit Glorious Nation Of Pepsistan

I'll :toast: to that.

[citizen snips]

61. FedEx 3Q Earnings Fall, Beat Views

MEMPHIS, Tenn. (AP) -- FedEx Corp. reported a 6 percent drop in third-quarter earnings Thursday due to high oil prices and a slow U.S. economy, and indicated it would miss Wall Street forecasts for the fourth quarter.

The shipping company said its fourth quarter earnings would fall from a year ago and said it expects only limited earnings growth for its next fiscal year.

Its shares fell $1.72, or 2 percent, to $84.51 in premarket trading.

FedEx said it earned $393 million, or $1.26 a share, in the three months ended Feb. 29 versus $420 million, or $1.35 a share, for the same period last year. Revenue rose 10 percent to $9.44 billion, from $8.59 billion.

Analysts with Thomson Financial expected earnings of $1.22 a share on revenues of $9.11 billion.

more...
http://biz.yahoo.com/ap/080320/earns_fedex.html

[Robbien]

98. Private equity 'staring into the jaws of hell'

A good quote has been making the rounds in cyberspace. It comes from a New York Times article about the state of the private equity industry these days:

"They see the handwriting on the wall," said Martin S. Fridson, a leading expert on junk bonds, said of buyout firms. "They're staring into the jaws of hell."

The message is as true today as it was last week when the original article came out. Here are some of the key data points from the piece:

* Blackstone (NYSE: BX) earnings tumbled 89% in the final three months of 2007.
* On paper, Blackstone's CEO Stephen Schwarzman has personally lost $3.9 billion as the price of Blackstone's stock has sunk -- and that loss is even bigger today, as Blackstone's stock continues to fall (as of Thursday morning, it is below $15 a share).
* Banks are saddled with billions of dollars of buyout-related debt they cannot sell, serving as the next possible wave of write-downs after the subprime mortgage debacle. Citigroup, Goldman Sachs and Lehman Brothers are currently holding what some analysts estimate is $130 billion in leveraged loans, or those supporting private equity deals.
* Surveying junk debt offerings since 2002, the analytical firm FridsonVision found that companies taken private tend to suffer more distress than their peers.

Amazingly, a former Blackstone executive claims that no one saw this collapse coming: "'No one saw this kind of outcome,' Michael Holland, chairman of the New York investment firm Holland & Company, and a former Blackstone executive, said of the buyout industry's troubles."

It's hard to know what to make of that. Is this statement evidence that at least some bankers believed their own hype, that what goes up never comes down?

But the more practical question is, when are things likely to turn around, or at least hit bottom? Not until the market has fully accounted for the bad debt stuffed into all the corners of the global capital system. And that may take a while. As Hamilton James, Blackstone's president, put it: "Our view is that things will get worse before they get better."

http://www.bloggingbuyouts.com/2008/03/20/private-equity-staring-into-the-jaws-of-hell/

"Companies taken private suffered." It took a highly paid survey to tell them that?

[RUMMYisFROSTED]

112. That's a good quote.

[Zynx]

117. Private equity is worthless. I'm looking forward to its collapse.

[DemocratInSoCal]

115. The Reason I Hate CNBC, And Watch It Less With Each Passing Day

When the stock market drops, all they can talk about is....."Have We Reached A Bottom?" When the financial stocks are collapsing, they'll devote segment after segment to...."Is This A Buying Opportunity In The Financials?"

But when commodities give back some of their enormous gains, do they ask the same questions? OF COURSE NOT!!!

Instead, we get...."Is The Commodity Boom Over?" And we get, "Is It Time To Start Selling Commodities And Put Money Into Stocks?"

What a bunch of Fucking ASSHOLES! Check back next month, when Gold is back over $1,000, and Oil is again at $110. Only then, the question will be...."Can They Sustain This? Have They Reached A Top?"

[Zynx]

116. That's BS. I've seen so many commentators on CNBC say commodities are good from here on in.

They've been pimping commodities for months. The collapse in commodities in the last few days is just as real a story as the collapse in financials. Analysts have been talking trash about financials for months. I own two bank stocks long term that haven't been hit as bad as others, PNC and Wells Fargo, but they still get trashed even though their earnings are reasonably strong even with huge one time write-offs.

[roamer65]

122. I see the extreme bias as well.

But CNBC is the "Corporate Whore Channel", so I take their crap with a grain of salt. I really hate Kudlow. He's a useless bag of shit.

[roamer65]

123. Bank of England now accepting more poison paper as collateral.

Just on BBC, BoE accepting a wider range of poison paper as collateral for loans to banks. Looks like they're opening the floodgates of money just like the Fed.

[Robbien]

125. Cramer is all upset by the loss of the Up Tick Rule

He wants you to write your congresscritters.

Under the so-called ‘up tick rule’ a short sale may only take place if the market price moves up to the price at which the sale is being offered. There was also a 10 per cent restriction on the overall number of securities of an entity that can be short sold at any point in time.

The SEC eliminated the up tick rule in the summer of '07.

bloggers have been complaining about it ever since:

http://www.americanchronicle.com/articles/55075

there is the financial adventure of Short Selling, in which speculators expect to make money from a continued decline in a stock's market value. It is disturbing that the elimination of the up-tick rule has allowed large-scale traders to sell securities they don't even own in large enough quantities to wage war on target companies. This strategy involves selling borrowed securities at the current price and then "covering" the position with stock purchased at a lower price and pocketing the difference.

http://seekingalpha.com/article/67111-investor-political-priorities-a-survey

The up-tick rule that applied to short selling since 1929 was eliminated in July of 2007; the markets have been feeling the impact ever since. Theoretically, if not actually, unscrupulous persons could bring target companies to their financial knees for their own purposes. In the wake of the sub-prime mess, for example, it became difficult for some companies involved to raise capital efficiently because of shorting tactics employed by hedge fund operators.

[UpInArms]

128. shutting up shop for the Easter weekend with ponies for everyone!

Dow 12,361.32 261.66 (2.16%)
Nasdaq 2,258.11 48.15 (2.18%)
S&P 500 1,329.51 31.09 (2.39%)
10-Yr Bond 3.328% 0.034

NYSE Volume 6,374,377,500
Nasdaq Volume 2,806,126,250

(wowie zowie - check out that volume!)

4:20 pm : On Thursday, the stock market closed the shortened week on a high note. The major indices surged more than 2% in heavy trading, and finished near their best levels of the session. Financials led the way higher, thanks to a pair of upgrades and news that the Fed is expanding its previously announced plan to increase liquidity.

The financial sector (+6.9%) was the driving force behind this session’s strength. It got off to a strong start after Fannie Mae (FNM 34.30, +3.59) and Freddie Mac (FRE 32.58, +2.68) were upgraded to Outperform from Market Perform at Keefe, Bruyette & Woods.

Financials, and the market, got a further boost after the New York Fed announced modifications to its new Term Securities Lending Facility (TSFL). The TSFL auctions will now allow schedule 2 collateral, instead of the schedule 1 collateral previously proposed. Schedule 2 collateral will now include collateralized mortgage obligations (CMOs) and AAA rated commercial mortgage-backed securities

In other words, the Fed will be lending banks highly liquid Treasury securities in exchange for less liquid assets. Banks will now be able to use a wider range of collateral than previously announced. The first auction will take place on March 27 with an offering size of $75 billion for a term of 28 days. Up to $200 billion in loans have been authorized. This is a positive development as it temporarily relieves holders of the difficult to trade securities.

The thrifts & mortgages group (+10.3%) was a standout for the third day in a row. The group has spiked 53% from its low on Monday. Investment banks & brokerages was also a leader with a 11.2% gain.

The March Philadelphia Fed, a regional manufacturing survey, also gave stocks a boost. The survey came in at -17.4, which is higher than the previous reading of -24.0. Economists expected a reading of -18.0. The stock market spiked on the release even though the number was only slightly better than expected. Since the reading is below zero, it reflects contraction in manufacturing in the Philadelphia region. The survey has shown contraction for the last four months.

Other economic data were bearish, although the market shrugged off the news. Jobless claims for the week ended March 15 rose to 378,000 from the prior reading of 356,000. Economists expected 360,000 claims.

In a separate report, February leading indicators fell 0.3%, which was in-line with expectations. The prior reading, however, was revised lower to -0.4% from -0.1%.

Also of note, General Electric (GE 37.49, +1.90) posted a healthy 5.3% gain after being upgraded to Buy from Sell at Merrill Lynch.

Nine of the ten sectors trended higher. Consumer discretionary (+3.2%) was the second best performing group behind financials, thanks to a 4.9% surge in retailers. Materials (-0.5%) was the only sector to finish in the red, as the Commodity Index (-1.7%) has slid four of the last five days.

The strengthening dollar (+0.84%) weighed on commodities, with oil sliding -1.0% to $101.54 per barrel, and gold giving up 3.5% to $912.22 per ounce. Gold is down 11.8% from its all-time non inflation adjusted high of $1033.90 per ounce that was reached on Monday.

For the week the S&P advanced 3.2%, the Dow gained 2.2% and the Nasdaq advanced 2.1%. The CRB Commodity Index slipped 8.3%, while the dollar gained 1.5%.

The stock and bond markets will be closed tomorrow in observance of Good Friday. Trading will resume on Monday.DJ30 +261.66 NASDAQ +48.15 NQ100 +2.1% R2K +2.6% SP400 +2.4% SP500 +31.09 NASDAQ Dec/Adv/Vol 971/1867/2.67 bln NYSE Dec/Adv/Vol 825/2338/2.77 bln

3:35 pm : The stock market is up more than 2% as the market continues to respond positively to the Fed's increased collateral options. It has been a volatile week, but it looks like it will end on a high note.

Meanwhile gold has extended its decline, and is now down 3.2% to $915.20 per ounce. Gold is down 11.5% from its all-time non inflation adjusted high of $1033.90 per ounce that was reached on Monday.DJ30 +234.71 NASDAQ +40.56 SP500 +28.07 NASDAQ Dec/Adv/Vol 998/1820/2.23 bln NYSE Dec/Adv/Vol 866/2296/2.04 bln

3:05 pm : The stock market is catching a bid on news that the Fed is allowing a broader range of assets to be put up as collateral for its new auctions. Financials have seen the largest gain, as they are now up 6.0%. Only the materials sector (-0.1%) remains in the red, although its loss is slight. The recent gains have returned the Dow to positive territory for the month, now up 0.5%.

Verizon (VZ 35.95, +0.82) spent more than $4.7 billion for the 700 MHZ spectrum, according to the FCC. The spectrum will increase wireless capabilities, and was freed due to the transition to HDTV.DJ30 +240.20 NASDAQ +40.91 SP500 +30.39 NASDAQ Dec/Adv/Vol 1016/1769/2.05 bln NYSE Dec/Adv/Vol 892/2250/1.88 bln

2:35 pm : The major indices climb to their best levels of the session. The New York Fed has announced modifications to its new Term Securities Lending Facility (TSFL). The TSFL auctions will now allow schedule 2 collateral, instead of the schedule 1 collateral previously proposed. Schedule 2 collateral will now include collateralized mortgage obligations (CMOs) and AAA rated commercial mortgage-backed securities

In other words, the Fed will be lending banks highly liquid Treasury securities in exchange for less liquid assets. Banks will now be able to use a wider range of collateral than previously announced. The first auction will take place on March 27.DJ30 +202.60 NASDAQ +36.41 SP500 +21.77 NASDAQ Dec/Adv/Vol 1116/1660/1.90 bln NYSE Dec/Adv/Vol 1004/2120/1.77 bln

2:00 pm : The major indices climb to fresh highs. According to reports, Standard & Poor's said its rating on CIT Group (CIT 8.58, -3.06) is unaffected by CIT drawing on its credit lines. The financial sector (+4.4%) has climbed to its best level of the session. Over the last five sessions the sector is up 4.9%.

As a reminder the bond market closed early today in observance of Good Friday. The stock market remains open until its normal closing time of 4:00 ET. Tomorrow, the stock market and bond market will be closed. Trading will resume on Monday.DJ30 +171.70 NASDAQ +29.50 SP500 +18.87 NASDAQ Dec/Adv/Vol 1124/1640/1.75 bln NYSE Dec/Adv/Vol 1081/2038/1.66 bln

1:30 pm : The S&P 500 and Dow are both posting a gain of more than 1% thanks to a recent broad-based pickup in buying interest. Fitch Ratings affirmed its AA- rating on Credit Suisse (CS 48.41, -1.44), with a stable outlook. Credit Suisse has been under pressure this session after the company said it does not expect to be profitable in the first quarter.

Agriculture company Monsanto (MON 95.03, -3.84) is the main S&P 500 laggard. This session's 3.6% slide in corn, 4.0% slide in soybeans, and the 7.2% retreat in wheat are weighing on the seed producer.

DJ30 +134.17 NASDAQ +19.08 SP500 +14.06 NASDAQ Dec/Adv/Vol 1190/1544/1.63 bln NYSE Dec/Adv/Vol 1207/1895/1.57 bln

1:00 pm : The stock market is holding onto decent gains, but remains off its best level. Large cap tech is underperforming on a relative basis, with the Nasdaq 100 up 0.5% compared to the market's 0.9% gain. Google (GOOG 424.23, -7.77) is a laggard after getting its price target cut to $530 per share from $675 at RBC. RBC lowered its earnings estimates on Google by 5% in 2008 and by 11% in 2009.

Market breadth is slightly positive. Advancers outpace decliners by 3-to-2 on the NYSE and by 6-to-5 on the Nasdaq. Volume is on the heavy side, with 1.5 billion shares exchanging hands on the NYSE.DJ30 +107.87 NASDAQ +13.29 SP500 +11.07 NASDAQ Dec/Adv/Vol 1244/11465/1.53 bln NYSE Dec/Adv/Vol 1247/1834/1.47 bln

Have a great weekend everyone!