STOCK MARKET WATCH, Wednesday April 2, 2008

[Demeter]

Source: DU

STOCK MARKET WATCH, Wednesday April 2, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 295
DAYS SINCE DEMOCRACY DIED (12/12/00) 2627 DAYS
WHERE'S OSAMA BIN-LADEN? 2352 DAYS
DAYS SINCE ENRON COLLAPSE = 2643
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 April 1, 2008

DJIA....... 12,654.36 +391.47 (+3.19%)
Nasdaq...... 2,362.75 +83.65 (+3.67%)
S&P 500..... 1,370.18 +47.48 (+3.59%)
Gold future... 887.80 -33.70 (-3.80%)
30-Year Bond... 4.38% +0.08 (+1.76%)
10-Year Bond... 3.55% +0.11 (+3.29%)




GOLD, EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

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

For information on protests and other actions
Citizens For Legitimate
Government>

---

No link yet.

[Demeter]

1. Technical Update: Healthcare Sector

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

This week we step away from the depressing specter of the Real Estate debt deflation and our ongoing economic miasma, to present a piece for those of you who are ‘die in the wool’ stock and sector pickers. In our own research, we constantly track various market industry groups and we rank them regularly to get an idea what is currently IN and OUT of favor. While we all know that Finance in all is various iterations, including Investment Banks, Broker-Dealers, Banks, Mortgage Companies etc., has been at the bottom of the list for months, while Precious Metals have resided near the high end of the list. However, over the last few weeks, we have watched in amazement at the striking collapse in the Healthcare sector, which has historically been a defensive corner of the market and which has recently undergone one of its greatest shake outs in several years.

Dotting the bottom of the sector performance ranking at this time are names like Health Maintenance Organizations (HMO’s), Healthcare Insurance Companies, Drug Distributors, Nursing Homes, Medical Products and Drugs. To that end, we should start this piece with a reminder that back in 2000-2002, during the great NASDAQ Bear Market, Healthcare stocks trended higher for much of the period during which the NASDAQ Composite moved lower.

We see this positive action within the Healthcare Sector illustrated by the performance of Fidelity Select Healthcare which, from the beginning of the NASDAQ Bear began to rise and held up with a NET gain throughout the Bear Market until the very last days of the bear market where it finally capitulated. Thus, since we are once again in the grip of a bear, we thought it might be worth a little time to inspect the sector and discern whether or not there could be a good opportunity approaching for a day when the major indices are not performing as spectacularly well as they did today. In bear markets, rallies are often headline grabbing, but it is the primary trend which must be of the utmost importance, and for the US and Global Stock markets, even with today’s powerful rally, the primary trend remains strongly down. For Healthcare, we track the sector using our index which consists of 20 large cap stocks and which does not include any large cap pharma, which in our work, is a different sector. To present a flavor of our index, the group contains names like McKesson (MCK), Aetna (AET), United Healthcare (UNH), Cardinal Health (CAH), Humana (HUM), Amerisource Bergen Corp (ABC), Cigna (CI), Lincare (LNCR), Coventry (CVH), Varian Medical (VAR), St. Jude Medical (STJ), Medtronic (MDT), Stryker (SYK), Davita (DVA), Express Scripts (ESRX), Medco Containment (MHS), Covidien (COV) etc. In the chart below, on the top clip, we show the decline in the GST Healthcare Index which is now down 30% from its highs last February. In addition, on the lower clip, we plot the Relative Strength Ratio versus the S&P 500. Around both the index itself and around the Ratio, we plot a 3 Standard Deviation Band for 12 months...

SEE GRAPHS AT LINK

[Demeter]

2. Today's Reports

ADP Employment March

Consensus -45K
Prior -23K

Factory Orders Feb

Briefing.com -0.5%
Consensus -0.8%
Prior -2.5%

Crude Inventories 03/29

Prior 88K

[UpInArms]

27. ADP predicts jobs up by 8,000 in March

05. Private sector jobs up 8,000 in March: ADP
8:16 AM ET, Apr 02, 2008

this report is notoriously unstable and is not a predictor of anything - it makes shit up for the markets and then when the other report comes in at the end of the week with its made up shit numbers that are based on a "if you die you give your job to someone and when you are born you automatically have a job" crap - but I still think there will be a net job loss for March

[Ghost Dog]

32. ADP report says US gained 8,000 private jobs in March vs 70,000 loss seen

WASHINGTON (Thomson Financial) - The US economy added 8,000 private sector jobs in March, according to payroll services firm ADP, a surprise gain and well above the expected loss of as many as 70,000 jobs in the month.

ADP said the service sector of the economy added 85,000 jobs, while employment in the goods-producing sector shed 77,000 jobs. That's the sixteenth consecutive decline for goods-producing jobs.

Manufacturing lost 58,000 jobs in the month, the nineteenth consecutive monthly decline.

ADP estimates private-sector employment only, while the Labor Department report for March, due out Friday, will include government jobs as well. Adding the roughly 25,000 new government jobs created monthly over the last year, today's ADP report would suggest 33,000 total jobs gained in March.

However, economists have noted that the ADP survey is not always an accurate predictor of monthly job losses and gains. Economists polled by Thomson's IFR Markets are expecting the government to report a loss of 50,000 jobs for March on Friday, a slight improvement from the 63,000 jobs lost in February.

For February, the ADP report originally said 23,000 private sector jobs had been lost, but today revised that upward by 5,000 to a loss of 18,000 jobs. The government said 63,000 private and public sector jobs were lost in February.

/. http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=463db5c3-d1d2-4fd4-8727-14904f6c84b5

[TalkingDog]

60. Can I put that on a tee-shirt?

No?

Damn....too bad.

[Ghost Dog]

55. US crude oil inventories rise by far more than expected - EIA

LONDON (Thomson Financial) - US crude inventories rose by far more than expected in the week to March 28, jumping 7.4 million barrels in data released by the U.S. Energy Information Administration.

Analysts polled by Thomson Financial News had predicted a rise of just 2.8 million barrels.

Gasoline stocks fell by 4.5 million barrels, against market expectations for a fall of just 1.4 million barrels, while distillate stocks -- which include heating oil -- fell by 1.6 million barrels, more than the predicted 1.4 million barrel decline.

Refineries operated at 82.4 percent of their capacity, the EIA said, up from 82.2 percent in the previous week. Analysts had expected a rise of 0.3 percentage points.

/. http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=069b6d96-c38e-4fdc-9ba0-7aa61d22db5a

[Demeter]

3. U.S. February factory orders seen falling 0.8 percent

http://news.yahoo.com/s/nm/20080402/bs_nm/usa_economy_factoryorders_dc_1;_ylt=AnBrtBYd.6lWbVxfw9kDgX2b.HQA



New orders to U.S. factories for manufactured goods will likely post their second straight monthly drop in February, providing further evidence of a flagging industrial sector, according to a Reuters poll. The median forecast of 58 economists showed February orders falling 0.8 percent after a 2.5 percent January fall. Forecasts ranged from a 2.7 percent decline to an 0.8 percent rise.

Analysts polled expect the key durable goods component, which measures demand for long-lasting goods like new cars and refrigerators, to post a 1.7 percent February fall unrevised from the 1.7 percent decline originally reported last week...Manufacturing had been helping to offset weakness in the housing sector, but back-to-back declines -- in concert with other gloomy economic information -- would help set the stage for the Federal Reserve to cut interest rates further.

The central bank's policy-setting committee meets from April 29-30. Investors expect it to cut rates by another half a percentage point. That would come on top of the three percentage points that it has already lowered its benchmark overnight funds rate since mid-September to head off a recession. The rate now stands at 2.25 percent.

The Commerce Department is scheduled to release the report at 10 a.m. (1400 GMT) on Wednesday.

[burf]

33. So those 8,000 new jobs

that were supposedly created in the previous post were burger flipper positions?

[Demeter]

44. No the 85,000 Service Jobs Were All Imaginary

How many burgers can a nation eat, when the market's already saturated?

[InsultComicDog]

52. lots of jobs if one is willing to travel

to fucking IRAQ, that is

[AnneD]

71. If those 8000 new jobs were in...

manufacturing, they were burger flipping. But with the cost of basic food going up, I don't know how much longer burgers will be within the reach of most Americans.

[Ghost Dog]

53. Factory orders drop double what expected (sic)

WASHINGTON (AP) - Orders to U.S. factories fell for a second straight month, a worse-than-expected performance that reinforced worries that the risk of recession is rising.

The Commerce Department reported Wednesday that factory orders dropped by 1.3 percent in February, about double the downturn that economists had been expecting. Orders had fallen an even bigger 2.3 percent in January, the largest decline in five months.

The falloff in demand was widespread, with steep declines in orders for motor vehicles, various types of heavy machinery and demand for iron and steel.

...

The report on factory orders showed demand falling by 1.1 percent for durable goods, items expected to last at least three years, while orders for non-durable goods, products such as oil and chemicals, fell by 1.5 percent.

The weakness in manufacturing occurred even though orders for commercial airplanes rose by 5.1 percent in February, rebounding from a big decline in January. Orders for motor vehicles fell by 2 percent in February after no gain in January. Automakers are struggling with weak demand in the face of soaring gasoline prices.

Overall, orders for transportation products posted a 1.8 percent rise in February as the strength in commercial and defense aircraft orders as well as higher demand for ships and boats offset the drop in motor vehicles.

Orders for heavy machinery plunged by 12.3 percent in February, the biggest decline since January 2004, while orders for iron and steel fell by 2.3 percent.

/... http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=c8a5230f-4209-4aaa-85e8-942008ed11fc

[Demeter]

4. Bernanke to give Congress economic update By JEANNINE AVERSA, AP

http://news.yahoo.com/s/ap/20080402/ap_on_go_ot/bernanke_congress_8;_ylt=AgRA.uiL2Y3AAxaFXT3oDkZ2wPIE


Bernanke was to visit Capitol Hill on Wednesday to give members of Congress' Joint Economic Committee an update on the country's economic situation. The Fed chief was expected to assure lawmakers that the central bank was prepared to keep on lowering a key interest rate and take any other actions that may be necessary to keep problems from spreading even more.

A trio of crises — housing, credit and financial — are threatening to push the country into a deep recession. The situation has emerged as a top concern for presidential contenders and a hot-button issue for Congress. It has thrust the White House and the Fed in crisis-management mode.

To try to limit the damage, the Federal Reserve has aggressively cut a key interest rate, now at 2.25 percent, to spur buying and investing by individuals and businesses. Many economists predict the Fed will drop that rate again when it next meets April 29-30.

Many analysts believe the economy contracted in the first three months of this year, signaling the start of a recession. The government releases first-quarter results later this month. The economy lost jobs in January and February, with many economists bracing for more losses when the report for March is released on Friday.

On Tuesday Bernanke met privately with House Republicans, and participants said he steered clear of saying the country is in a recession.

[Tansy_Gold]

23. Treating the disease or just masking symptoms?

Once again, here I am with one of my questions that seems to me to have such an obvious answer that I can't believe none of these higher up geniuses :rofl: picked up on it.

If the whole "financial markets crisis" originated in the sub-prime mortgage crisis -- subprimes got repackaged, resold, etc., etc., etc. -- wouldn't it make more sense to treat that problem than to just keep giving the banks (commercial as well as investment type) more money to make their paper money look like it's worth something? I mean, if you've got a fever, you take aspirin to bring down the fever, true, but you also try to find out what's causing the fever and treat the cause.

Of course, I understand perfectly that much of this whole course of treatment is a scam to strip working people of any wealth they may have and hand it on a silver platter to those greedy fucking bastards who are playing with it. (short rant over)

Suppose, just for radical instance, someone (Congress? oh, don't make me laugh!) came along and said "All ARMs contracted since 01/01/2000 are immediately reset to a fixed rate equal to their original interest rate plus 1%, except ARMs that have not yet reset; they will be capped at their first scheduled reset date to a 1% increase and then frozen for the life of the mortgage."

Wouldn't that potentially put more money in the hands of consumers than the tax rebate sop? And wouldn't it make all the MBSes worth a little more? And wouldn't it help out the banks and the whole economy?

But, as usual, what the fuck do I know?


Tansy Gold, awake at 3:30 a.m. because the economy is giving her nightmares

[AnneD]

38. Tansy.....

Diversify your portfolio. I've found that on sleepless nights-a quick looksee at my pantry and other assets is the best seditive. I sleep very soundly after I have counted my blessings.

[Demeter]

45. And Sampled a Few?

Midnight snacking, in moderation, mind you! is not the worst thing for insomnia.

[Tansy_Gold]

47. Great suggestion!

Actually, I have a bottle of good dry sherry around here somewhere that I could take a tiny nip of. It's in a pretty bottle, too, that when empty could provide some raw material for a crafting project I've had in mind. . ..

Tansy Gold, who should have edited her post to emphasize that is her own personal economic crises that have her falling asleep utterly exhausted at 10 p.m. and then waking up thoroughly rested and with nothing constructive to do at 3:45 in the morning

[antigop]

51. I can relate, Tansy. Best of luck to you. n/t

[Demeter]

59. I've Been LIke That Since the Divorce

Which is how I ended up delivering newspapers. I figured if I couldn't sleep, I might as well be making some money. With the price of gas what it is today, and the NYTimes going for the blood, I've given it up. I don't want to pay for the privilege of delivering it, especially since the quality of its coverage has fallen off in the last 8 years. They didn't even give Reagan that much cover!

[Warpy]

70. It gets better, trust me

One day you'll wake up and realize that you're no longer in survival mode.

That doesn't guarantee 8 hours a night, though, especially when you've spent most of the last 25 years working nights...

As for the NYT, this too shall pass. Anybody who's ever been constipated can tell you that the passing might be uncomfortable, but it eventually does go.

[Demeter]

72. Only 15 Years

But the fight with the state over whether I've abused my disabled autistic child is wearing me down, now.

[Demeter]

5. Nissan, Honda rally after upbeat U.S. sales in March by Chris Oliver, MarketWatch

http://www.marketwatch.com/news/story/nissan-honda-rally-after-upbeat/story.aspx?guid={5B42EA58-AE24-4DCA-9028-8DFC7DF6EE2C}&siteid=yahoomy

HONG KONG (MarketWatch) -- Shares of Nissan Motor Co. and Honda Motor Co. climbed sharply in Tokyo trading Wednesday after the Japanese automakers outperformed rivals in U.S. sales for March, posting sales gains that helped bolster market share.

Only Nissan and Honda of the six big U.S. and Japanese automakers posted monthly gains in vehicle sales.

Nissan said car sales jumped 6.8% to 66,475 units during the month from a year earlier, bolstered by strong demand for its Versa compact and Altima sport coupe. Adjusted to compensate for the 26 selling days in the month versus the 28 selling days in the year-earlier period, Nissan's cars and light trucks sales climbed 3.6% to 106,921 units. On an unadjusted basis Nissan's vehicle sales fell 3.8% during the month.

Honda's car division also posted monthly gains, with consumers snapping up a record 83,214 units during the month, a 3.2% rise from the year earlier. The gains were underpinned by demand for the Fit compact and growth in sales for the Accord and Civic models. On an adjusted basis, Honda's combined sales of cars and light trucks climbed 4.2% to 138,734 vehicles. Without the adjustment, Honda's sales fell 3.2%.

[Demeter]

6. National City mulls sale to KeyCorp (Banks in Mich)

http://news.yahoo.com/s/nm/20080402/bs_nm/nationalcity_keycorp_dc_1



National City Corp (NCC.N), which has been battered by the housing downturn, is considering a plan to sell itself to rival KeyCorp (KEY.N), the Wall Street Journal reported on Wednesday, citing sources familiar with the matter.

If the transaction is to occur, the combined company would receive a capital infusion from private equity firm Kohlberg Kravis Roberts & Co (KKR.UL), sources told the newspaper.

On Tuesday the U.S. regional bank said its board is reviewing a range of strategic alternatives and that it had hired Goldman Sachs (GS.N) as its advisor.

Representatives of National City, KeyCorp, or KKR could not immediately be reached for comment.

[Demeter]

7. ADB sees Asia growth slowing, warns on inflation By Raju Gopalakrishnan

http://news.yahoo.com/s/nm/20080402/bs_nm/asia_economy_adb_dc_1;_ylt=AlvVqHJ9d7zQNEWYfC6cGZub.HQA


Growth in Asia's developing economies will slow in 2008 to the weakest in five years, but the region needs to tackle inflationary pressures before they spiral out of control, the Asian Development Bank said on Wednesday.

While growth would remain relatively robust in the face of the global credit crisis, inflation will rise to a decade-long high, presenting a major risk.

"If this genie gets out of the bottle and inflation becomes ingrained, it could bring the growth process to a grinding halt," Ifzal Ali, the ADB's chief economist, told Reuters in an interview in Hong Kong. "Economically, socially and politically it will become very dangerous. In Asia we have been focusing a lot on growth and we have taken price stability for granted -- this is a reality check."

The region, which includes China, India, the "Tiger" economies of Southeast Asia, South Korea and Central Asia, should register average GDP growth of 7.6 percent in 2008, the ADB said in its annual economic outlook. But it follows an 8.7 percent surge in 2007 and is the lowest annual growth figure since 7.1 percent in 2003. The ADB itself has trimmed the 2008 growth forecast from the 8.2 percent it predicted in its last regional outlook six months ago.

[Ghost Dog]

19. Inflation hits Japanese consumers, dimming outlook

TOKYO, April 2 (Reuters) - Rising prices for household items from milk to electricity are adding to the clouds hanging over Japan's already lacklustre consumer consumption, raising new questions about the central bank's outlook for the economy.

The bleak prospects for householders -- on top of the fallout from the global credit crisis and U.S. slowdown -- has analysts questioning the long-held view of the Bank of Japan that corporate strength will spill over to consumer spending, which makes up more than half the economy. It is that ongoing belief in a virtuous growth cycle, despite the credit crunch, that is behind the central bank's stated aim of gradually raising Japan's very low interest rates to more normal levels. "The economy may be entering a vicious cycle as corporate activity has peaked while personal consumption remains sluggish," said Toshihiro Nagahama, chief economist at Dai-ichi Life Research Institute. "It's wrong to believe the BOJ's view that the favourable cycle of output, household income and spending is intact."

The research institute estimates that rising food and energy prices could curtail gross domestic product by 0.2 percentage points in the fiscal year that started on Tuesday, as it prompts household shoppers to trim their spending.

April 1 was no joke for Japanese consumers, as many companies used the date to raise prices. While a political row means petrol prices will be slashed for a few weeks, a trip to the supermarket is not likely to be so forgiving. Items ranging from bread, butter and soy sauce will cost more in the kitchen, as will the gas used to cook there and the beer a householder may seek out to forget the rising cost of living. Officially, core consumer inflation, which excludes fresh fruit, vegetable and fish prices, is running at 1 percent a year but people feel the pain from rising prices at the supermarket. "Seasonings, flour, soy sauce, everything is going up far more than 1 percent. It surprises me to find prices up from the last time when I shop," said Keiko Fujii, a housewife in Tokyo.

...

Disposable incomes among salaried workers have been steadily falling in the past several months, and yet they have increased spending, suggesting that households might be eating into savings to maintain their lifestyles, analysts say. "Such spending will not last long unless workers see their salaries raised substantially," said Yasukazu Shimizu, senior market economist at Mizuho Securities.

In one hopeful sign, Japanese wages rose 1.3 percent in February from a year earlier following a 1.6 percent increase in January -- the biggest gain in two years -- due partly to a rise in full-time workers, pointing to firmness in wages this year. Still, many firms, particularly the multitude of small ones that employ seven out of 10 workers, are seen as reluctant to raise salaries at a time when a strengthening yen, rising raw materials costs and tumbling stock prices have them worried about their futures.

/... http://www.reuters.com/article/marketsNews/idINT1623720080402?rpc=44

[Ghost Dog]

21. Nikkei jumps 4 percent to 1-month high

TOKYO (Reuters) - Japan's Nikkei stock average surged 4 percent to a one-month peak on Wednesday as banks roared higher, with credit fears easing after a capital boost by Lehman Brothers (LEH.N: Quote, Profile, Research) and a write-down by Swiss Bank UBS AB <UBSN.VX). Japan's top lender, Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research), saw its greatest one-day gain since July 2004, while No.2 bank Mizuho Financial Group (8411.T: Quote, Profile, Research) made its biggest one-day gain since January.

Tokyo shares got an additional boost as Asian stocks powered higher, with Hong Kong's Hang Seng Index .HSI up 4.4 percent, while the dollar's surge above 102 yen also gave the Nikkei upward momentum.

"All of this is due to relief about credit worries after Lehman's capital boost and the news about the UBS write-downs," said Noritsugu Hirakawa, a strategist at Okasan Securities. "Investor confidence has returned." But he said there was still danger that the current rebound may be short-lived, citing a raft of economic indicators and events lying in wait, including U.S. jobs data on Friday. "After all, we still have both U.S. and Japanese financial earnings coming up, and there's the chance of some disappointment here. But we may be past the worst of it all."

Others were more pessimistic. "It really all depends on the United States -- have they truly fixed the financial system, or not?" said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.

/... http://www.reuters.com/article/hotStocksNews/idUST7713920080402

[Demeter]

8. Fannie Mae tightens rules for mortgages

http://news.yahoo.com/s/nm/20080402/bs_nm/fanniemae_lending_dc_1;_ylt=Aj4qoX8poMMBvvdDyC8kemWb.HQA



Fannie Mae (FNM.N), the largest U.S. home funding company, told lenders on Monday that it will require a minimum credit score for loans it buys on an individual basis, the Wall Street Journal reported Wednesday in its online edition.

In the past, Fannie Mae had no minimum score, the Journal said. A credit score is a predictor of how likely a customer is to pay on time, and the Journal said the company will require a minimum score of 580 for most loans, adding it will still acquire loans with lower credit scores in certain circumstances.

According to the Journal, Fannie said it will increase the period needed for borrowers to re-establish their credit history after a foreclosure to five years from four years. Fannie also it will allow shorter recovery periods for borrowers with "documented extenuating circumstances" which caused the foreclosure, the newspaper added. Fannie representatives could not immediately be reached for comment.

Fannie Mae and rival Freddie Mac (FRE.N) hold charters from the government to support home ownership. They do that by raising money from investors to support combined investments of $1.4 trillion, and honor guarantees on loans backing mortgage securities they issue.

[Demeter]

9. US: Returning veterans face mounting joblessness and low wages By Alex Lantier

http://www.wsws.org/articles/2008/mar2008/vets-m29.shtml



On March 25, the Wall Street Journal published a brief summary of a US Veterans Affairs Department study on discharged veterans’ employment and wage prospects. The report, not yet publicly released and largely blacked out in the broader US media, paints a devastating picture of surging unemployment and low wages for returning veterans.

It found that the percentage of veterans not in the labor force—due to unemployment, having returned to school for further training, or having given up looking for work—had more than doubled between 2000 and 2005, jumping from 10 to 23 percent. Veterans aged 20-24 had an unemployment rate of 12 percent, 50 percent larger than the overall US unemployment rate for adults aged 20-24, which stands at 8 percent. On March 27, the military newspaper Stars and Stripes, writing on the same report, noted that 18 percent of veterans reported being unemployed.

Many employed veterans earn salaries leaving them at constant risk of financial hardship. Twenty-five percent reported earning less than $21,840 a year. Half of those aged 20-24 earned less than $25,000 a year.

The report also exposed one of most commonly promoted claims of military recruiters: that recruits will gain valuable gain job skills for future civilian life. The Journal wrote: “The report found that most of the returning veterans were unable to find civilian jobs that matched their previous military occupations. The only exceptions were the veterans working for private security firms such as Blackwater or in the maintenance and repair fields.”

[Demeter]

10. Thirty-Six U.S. States to Face Water Shortages in the Next Five Years by David Gutierrez

http://www.naturalnews.com/022915.html

(NaturalNews) At least 36 states are expected to face water shortages within the next five years, according to U.S. government estimates. Available freshwater supplies are dwindling across the country due to rising temperatures and droughts, while increasing sprawl, population and inefficient resource usage are leading to rising demand.

"Is it a crisis? If we don't do some decent water planning, it could be," said Jack Hoffbuhr, executive director of the American Water Works Association. Rising temperatures due to global warming have increased evaporation rates across the country and reduced the availability of important water sources. One of these is the Sierra Nevada snowpack, which supplies a significant portion of California's water. Across the West, similar trends are expected to reduce flows of the Colorado River, which supplies water for seven states.

Meanwhile, rising sea levels are expected to cause saltwater to infiltrate freshwater aquifers in coastal states, rendering that water unusable.

California uses about 23 trillion gallons of fresh water per year. The United States as a whole uses more than 148 trillion gallons for all purposes, including agriculture, manufacturing and other uses.
Other threatened regions include the Midwest, where the Great Lakes are shrinking, and upstate New York, where reservoir levels have fallen to record lows. Georgia's crisis has already arrived, and Florida's is expected to hit soon.

While Florida has no shortage of rainfall, widespread draining and paving of the region's natural wetlands has left the water unable to drain back into the soil. As a consequence, the state is forced to flush millions of gallons of water into the ocean per year to avert floods. The state's environmental chief, Michael Sole, has asked the Florida legislature to increase the use of reclaimed wastewater. Other states are encouraging measures such as desalinization, but it is widely accepted that conservation is the cheapest alternative.

Even with such measures, the forecast is not expected to improve. "Unfortunately, there's just not going to be any more cheap water," said Randy Brown, utilities director for Pompano Beach, Fla.

[mdmc]

87. yikes!

oh no!

[Demeter]

11. US credit crunch hits education as banks abandon student loans / Suzy Jagger

http://business.timesonline.co.uk/tol/business/economics/article3649021.ece

One of America’s leading banking associations has given warning that the United States faces a growing educational apartheid as some lenders withdraw from student loans amid new evidence that the credit crisis has spread across all types of borrowing.

In the past fortnight, some banks, including HSBC, have pulled out of the $85 billion (£42 billion) a year US student loans market, fuelling anxiety that the turmoil that hit debt markets on Wall Street last summer is spilling over into the wider economy and making credit more difficult to secure for ordinary American households. Banks have become reluctant to offer private student loans because worsening credit conditions have meant that they cannot package up the loans and sell them on. Last October, as the credit crisis on Wall Street was gathering pace, Washington introduced legislation limiting the returns that banks could extract from student loans... Joe Belew, president of the Consumer Bankers’ Association, said: “Some of the banks are getting out. Part of the reason is that Congress has cut the fees they could charge, making some loans pretty much unprofitable. But part of the reason is that they can’t securitise the debt. The problems they have had with mortgage-backed debt – it’s the same thing at play in student lending."

In the academic year 2005-06, $17 billion in private student loans was used to finance higher education...Although the brightest students who win places at America’s rich Ivy League universities will be affected less because of generous bursaries - which do not have to be repaid – less able students applying to other institutions are expected to face difficulty in securing private loans to fund their study. At one end of the field is Harvard University, with $34 billion of endowments, and at the other are many community colleges and low-tier universities with limited resources.

Last week, Iowa Student Loan said that it would soon stop offering private loans altogether. The group, which made 29,000 student loans last year, said: “This is really a reaction to the economy’s recent situation, the sub-prime market in particular.”

Concern over funding for students is also spreading to Ivy League institutions. The University of Pennsylvania’s head of financial aid, William Schilling, has just written to banks demanding assurances they will continue to offer student loans. Speaking to The Times, Dr Schilling said: “We want the banks to tell us whether they will continue to offer loans and private loans for the next academic year. The key thing is not just whether they will lend at all, but what the terms will be.” Dr Schilling said that although some of the loans are guaranteed by Washington and are therefore “very low risk”, the market for them “has just gone away”.

[Demeter]

12. Ian Welsh / The Paulson Plan: Doing What He Wanted To Do Anyway

http://www.huffingtonpost.com/ian-welsh/the-paulson-plan-doing-w_b_94378.html?view=screen


So Paulson has come out with a plan. It's primarily a reorganization plan, pushing the Thrift regulator into the SEC, creating a federal mortgage regulator, giving the Fed the right to inspect the new firms that now have access to its liquidity. There's some talk about objectives based It's almost always a bad sign when the primary "reform" is to create new agencies or merge old ones and Krugman is right to ridicule it as The Dilbert Strategy. What don't I see here?

1) I see no hard and fast statements about leverage in the plan. 30/1 leverage is what made many of these companies so vulnerable. Any plan that does not put hard caps on leverage, get rid of "default insurance" and so on, will change nothing.


2) I see talk of a federal agency for regulating mortgages, but I see no talk about securitization of mortgages. A federal agency pre-empting state ones could actually reduce standards, not increase them.

3) I see no specific talk about forbidding certain types of mortgages such as balloon mortgages and liars mortgages.

4) I see no requirement for banks to keep mortgages on their own books rather than securitizing them.

5) I see no discussion of the ratings agencies, who rated a ton of absolute crap as the highest investment grade and were behind the curve in recognizing when both mortgages and companies were at risk. The current crisis, as a ton of folks have pointed out, is not a liquidity crisis. It is a confidence crisis. How are we going to become confident in the quality of mortgages and various other securities again if no one is checking them to make sure they're worth what issuers say they are?

6) Worse than all this, I see that the plan actually suggests effectively reducing oversight of the creation of new security products, which given that exotic instruments are what got us into this problem in the first place, is insane:(pdf)

The SEC should consider streamlining and expediting the SROrule approval process, including a firm time limit for the SEC to publish SRO rule filings and more clearly defining and expanding the type of rules deemed effective upon filing, including trading rules and administrative rules. The SEC should also consider streamlining the approval for any securities products common to themarketplace as the agency did in a 1998 rulemaking vis-à-vis certain derivativessecurities products. An updated, streamlined, and expedited approval process will allow U.S. securities firms to remain competitive with the over-the-counter markets and international institutions and increase product innovation and investor choice.

• The SEC should undertake a general exemptive rulemaking under the InvestmentCompany Act of 1940 ("Investment Company Act"), consistent with investor protection, to permit the trading of those products already actively trading in the U.S. or foreign jurisdictions. Treasury also recommends that the SEC propose to Congress legislation that would expand the Investment Company Act by permitting registration of a new "global" investment company.


The creation of the Department of Homeland Security did nothing to improve security in the US. Nada. Zip. What it did was allow billions of dollars to go to rural red states which are unlikely to be attacked by terrorists, while ignoring real security needs. Organizational reform does not, by itself, do a damn thing -- they are almost always power grabs.

Now power grabs aren't always bad. It depends what you're going to do with the power you grab. Paulson's plan either doesn't tell me what specifically will be done with the increased power, or when it does (as with the SEC or the mortgage regulatory body) it tells me the plan is decrease regulation (the SEC) or to preempt state regulation (mortgages). In no place do I see stern words about leverage, about default insurance, about exotic securities. Instead I read about streamlining and about making business "easier" to do.

The commission that came up with this plan was seated a year ago. What they have proposed is nothing more than what they wanted anyway, such as a federal charter for insurance companies, which as Marcy Wheeler points out, seems to have nothing to do with the current crisis. But there's been talk of a federal charter for insurance for a long time. I used to work in insurance compliance and it's a mess of 50 state laws. Some of them are a joke, but the toughest (currently New York) are far tougher than anything I can see a federal charter creating. But a federal charter would save insurance companies a lot of money to have only one regulator and many of the larger companies have been pushing it hard for years. So yes, this is just something they wanted to do anyway.

Paulson's plan is meaningless and will do nothing to slow this meltdown. More importantly, I doubt it will do much if anything to slow the next meltdown. Fundamental changes are needed, and reorganizations absent a hard mandate, mean nothing. Ultimately, this remains "shock therapy" -- wait for a shock, in this case the market collapse, then do what you wanted to do anyway, but couldn't get through in normal times.

[donkeyotay]

75. The man from Goldman Sachs is the proverbial fox in the hen house

To let him fix the problem that he helped create, while protecting his buds and dumping the costs onto the Public whose Treasury he is allegedly minding is absurd. But it adds injury to insult to use this disaster to give the extremely lucrative insurance bidness another way to hide from meaningful oversight. After all, state regulators wanted to go after some of the predatory lending practices, but were told by this administration that the comptroller had jurisdiction. Moving oversight to the federal level, and then letting industry insiders run the regulators, is just an efficient way of making sure their money-making operations aren't interfered with.

[DemReadingDU]

104. Maybe that's why its Paulson

Why would Paulson leave Goldman Sachs where he was probably earning $25 million, to be the Secretary of Treasury earning $200,000?

He wouldn't have left to fix problems, but to protect his rich cronies' investments.

[formercia]

13. Another British bank in trouble

http://news.bbc.co.uk/2/hi/business/7325692.stm

First Direct withdraws mortgages

First Direct has temporarily stopped offering any of its mortgages to people who are not already its customers.

The bank, which is part of HSBC, said the withdrawal was to allow it to cope with the unprecedented demand for its range of mortgages.

Many providers have withdrawn mortgages or raised interest rates this year, leaving some smaller banks and building societies unable to cope with demand.

--snip--

[Ghost Dog]

22. Spanish banks well placed for slowdown-B/Spain

MADRID, April 2 (Reuters) - The rate of loan defaults in Spain is likely to rise this year but banks are highly solvent and are well placed to face a slowdown in the economy, the Bank of Spain said on Wednesday.

"Stress tests we have done, using adverse macroeconomic scenarios, confirm the Spanish financial system's ability to resist changes in the environment," the central bank said in a note accompanying a report on the banking system.

Spanish banks have avoided writedowns from U.S. subprime holdings, due to Bank of Spain restrictions on off-balance sheet investments and because they also focused investments on their profitable home market.

But Standard & Poor's said on Wednesday that credit ratings on residential mortgage-backed securities issued by Spanish banks would be affected if defaults rose rapidly in a housing market which the credit rating agency expected faced a "major, and likely painful adjustment."

/.. http://www.reuters.com/article/marketsNews/idUSL0267026520080402

...For a lengthy 'blogger's disquisition' on conditions in and prospects for the Spanish economy, see: http://www.reuters.com/article/blogBurst/investing?type=hotStocksNews&w1=B7ovpm21IaDoL40ZFnNfGe&w2=B7pJeHult9GszE37UXlSpmUm&src=blogBurst_investingNews&bbPostId=Cz48AWP4apRgTCzAHwOpcsTPWoB3Ym9LKwaaYPB1GVBRW6LArV&bbParentWidgetId=B7gSUbux1hpbz8uOa7TWsLnV

<snippet>"...Perhaps the first thing to get absolutely clear in our minds right from the outset here is that the economic correction which is currently taking place in Spain is a very unusual one in terms of what we have become accustomed to in developed economies in modern times, since the transmission mechanism for Spain’s current difficulties does not run in simple one-way-street fashion from problems which have their source in the real economy (a correction in house prices for example, or a downsizeing of the construction industry, although both of these undoubtedly form part of the picture), nor does it run from an attempt by a central bank to “burst” some sort of perceived asset bubble or other (Trichet and the ECB’s tightening of interest rates), rather the mechanism operates via a direct blow-out in the cylinder-head-gasket of the global financial system, a blow-out which has produced an immediate and direct change in global credit and lending conditions, and in the level of risk appetite which prevails in the securitised mortgages/covered bonds sector of the wholesale money markets (leading to a situation where these markets are now effectively closed to Spanish banks) , and it is this change in financial and credit conditions which is now making its impact felt on the real economy in Spain, with the actual and present danger that these negative consequences for the real economy may then in their turn feed back into the financial sector, in the process creating some kind of ongoing lose-lose dynamic.

"As I say, such a phenomenon is certainly unusual in a modern European context, although some may wish to point to parallels with what happened in Japan in the early 1990s, and the subsequent “lost decade”. I wouldn’t go so far at this point as to suggest that Spain is facing a lost decade, although the situation is very very serious (as I hope to show in the data and arguments that follow), and at the very least Spain now faces several “lost years” and a massive macroeconomic structural adjustment..."

See also this very useful specialised blog (with links to others on the various European economies: http://spaineconomy.blogspot.com/

[Demeter]

14. April Fools from DailyReckoning.com (or, What They'd LIKE to See in the News!)

What a remarkable day! We never thought we’d see the likes of it.

First, Ben Bernanke appeared in the U.S. Senate, with former Fed governor Paul Volcker by his side, and announced an incredible turnaround in Fed policy. Yes, he said, he and his fellow Fed governors were very concerned about weakness in the financial sector. And yes, they were very sympathetic to all those people who had high mortgage payments to make and all those people who had bought shares in Bear Stearns and other high-flying investment firms. But he went on to say that the Fed’s primary mission was not to protect people from the consequences of their own mistakes; it was to protect the nation’s money and its credit.

Bernanke went on to hint strongly that there would be no further rate cuts. Instead, Fed policy has turned back to its more traditional role of fighting inflation, he said. The Fed has become serious about stabilizing the value of the dollar.

“We can no longer ignore the economic consequences of price increases in fundamental resources, such as oil, wheat and iron ore,” he said. “These price increases not only cause suffering on the part of average citizens who now pay an average of $3.23 for a gallon of gas. They also cause huge distortions and malinvestments in the whole world economy.”

While he was still speaking, prices of stocks began to fall – in anticipation of higher interest rates – with the Dow closing down 535 points. The dollar rose against all foreign currencies; the euro dropped back to $1.30. A shop owner in Paris was heard to say that he actually liked Americans. Commodities fell, and the price of gold dropped to $750 an ounce.

That was just the beginning. At 11AM a group of corporate executives, present and former – including Stan O’Neal, Richard Fuld, Ray Irani, John Mack, Barry Diller and William Foley – appeared at a press conference in New York. The spokesman for the group startled reporters when he announced the group’s intention to return a considerable part of its earnings to the shareholders for whom they worked.

“We’ve thought long and hard about this,” said Mr. Fuld. “And we’ve come to realize that these salaries are just absurdly high. None of us can think of anything we’ve done anytime in the last ten years to warrant a salary of even half of what we get paid – much less the $38 million Stan got or the $322 million Ray got. Speaking for myself, I spent practically all of last year attending meetings, parties, and ceremonies – and frankly I can’t recall what any of them was about. None of them needed me. And I’ll tell you something else, when I attend those board meetings, half the time I don’t even know what the accountants and lawyers are talking about. We got together this morning and asked each other how those CDSs work, for example. None of us had any idea. And apparently, believe it or not, between us, we’ve got billions of them on our books.”

As we’ve been saying here at The Daily Reckoning , executive salaries are preposterous. But we never thought we’d see the day when executives would admit it.

But the day wasn’t over.

Hedge funds have had the worst quarter since they’ve been keeping records. Fifty of them went broke last year. About 8,000 more to go, by our estimate.

What is remarkable is the hedgies response. According to the American Hedge Fund Association, managers are reversing their typical “2 and 20” compensation package, to make up for their lost income. Instead of charging 2% of capital and 20% of performance (usually over a benchmark), they’re charging 20% of capital and a 2% performance fee.

An article in the Financial Times demonstrated recently how the previous fee structure worked. Managers were encouraged to take risks, knowing that “heads I win, tails I lose someone else’s money.” Taking a big chunk of the gains, while not participating in the losses, gradually transfers ownership of the capital from the investor to the manager. This new system of fees merely speeds up the process.

Finally, Alan Greenspan himself stepped up to the microphones yesterday.

“I think it is time for me to apologize,” said the former head man at the Fed. “This crisis in the financial markets; it’s really my fault. It was on my watch that the bubble in residential real estate developed. It was while I was at the Fed, too, that the huge parallel banking system grew to its monstrous size – with trillions of dollars worth of CDSs, SIVs, MBSs, and all the other crazy alphabet derivatives, that are causing so much trouble.

“I knew all along that the only real money is money backed by gold. And I knew that there would be Hell to pay when people got carried away with the cheap paper-dollar credit that I was helping to make available. I remember that I said at the time that the growth in sophisticated investment vehicles helped spread out the risk. And I also told homebuyers that they should take advantage of those ARMS that they now regret.

“I am truly sorry for what I have done.”

What a day!

[Ghost Dog]

24. !

:-)

[donkeyotay]

82. Crickey! It didn't stop there! President Bush held a press conference

" I realize that my privatization schemes have enriched my cronies at the expense of the citizens of this nation, and today I set about reversing that flow of wealth. I will be expecting the industries that benefited from my era of neglect to pay for their own cleanup as well as meaningful regulatory oversight. I support special tax brackets for special profits, including a CEO tax that reflects their true cost to society.

The citizens who have suffered under my rule deserve a break. Today I am requesting cutting the payroll tax in half. It's been a sham to claim it was supporting social security when we were stealing those funds anyway. So today I am requesting congress approve lowering the taxation of work, and I will recommend cutting the defense budget in order to pay for it.

I am sorry that I have made such a mess of your country. As a token of my regret, I am stepping up enforcement against corporate crime in order to finance elections so that future administrations will not be wholly owned subsidiaries of multinational corporations. We will also allow your votes to actually count. Hopefully this will cheer you up enough to survive my legacy."

[Demeter]

84. Link? Or Is This Your Own Creation?

What a lovely dream!

[donkeyotay]

85. No link. I was caught up in the moment.... nt

[Demeter]

98. It was a splendid moment, then. Bravo!

[formercia]

15. EU launches probe of Rock bailout

http://news.bbc.co.uk/2/hi/business/7326023.stm



The EU has said it will launch a full investigation of the state bailout plan of troubled UK bank Northern Rock.

Northern Rock was given emergency government funding last year, after it was hard hit by the credit crunch.

In February, the government said the bank would be temporarily nationalised, but it needs European regulators to approve its rescue plan.

--snip--

The total bailout package was 107 Billion Dollars.

[Demeter]

17. Good Morning All!

Have at it, while I try to Update Internet Explorer so my computer stops crashing...

--Demeter

[formercia]

18. Try Firefox

Even Microsoft quit shipping IE in their Server package due to security concerns.

[Ghost Dog]

20. Absolutely.

Absolutely free here: http://www.mozilla.com/en-US/firefox/

[Demeter]

43. Wow! My Computer Is So Fast (and So Quiet!)

The only thing I don't like about /Foxfire is the font. Is there any way to change it to something less painful to read?

It is so nice not to hear the chuckle of the trojans and hijackers reloading themselves every time I clear them out....

Shyould I uninstall internet explorer?

[formercia]

48. I don't know if you can uninstall it.

just don't use it. I haven't used Windows in years, so someone else can advise you on that.

In Firefox, go to Edit>Preferences>content and select your font.

[DemReadingDU]

56. question about favorites links

I don't use Firefox yet, but am considering the switch because I read that Firefox is great at blocking those annoying flashing banner ads and pop-ups.

But I must have over 100 favorite links in IE. If I download Firefox, do these favorite links automatically get moved to Firefox, or do I need to manually move them? Is there an easy way to move my favorites in IE to Firefox? Thanks.

[formercia]

57. It should ask you if you want to move them when you install it.

and make it the default browser.

[Demeter]

61. I Did that Right Away--It was Easy!

It's under Bookmarks!

[UpInArms]

29. oh no!

you can also use Opera - it's a great browser!

www.opera.com

:hug:

[DrDebug]

94. Even though Opera is not popular, I think it rocks as well

I switched to Opera after the Netscape 4 nightmare years ago, and never regretted the move. No pop-ups, no pop-unders, no animated gifs, no flash bullshit, and almost 100% ad-free everywhere... A month ago my virus scanner complained of a virus from a cybersquatter (the domain no longer existed and squater put a virus on it). I just had to look at the source and it was an Active X exploit and I could just laugh because I wouldn't have worked anyhow.

I know that Firefox is a lot more popular, however there's nothing from with Opera. The best part is Opera doesn't make me sea sick like IE with their continous redrawing and moving of the text while loading a page.

Good to see that there is still one other Opera user left... We're like Saab drivers...

:hug:

[Demeter]

16. Kevin Phillips The Destructive Rise of Big Finance

http://www.huffingtonpost.com/kevin-phillips/the-destructive-rise-of-b_b_94351.html?view=screen

Economic, financial and regulatory issues should dominate politics and government in the United States for the next two or three years, which is important enough. National discourse may also have a new and deserving bogeyman. Franklin D. Roosevelt had Big Business, Ronald Reagan had Big Labor, and my guess is that the new president inaugurated next January will have Big Finance....
True, finance has been whupped by presidents before. Thomas Jefferson and Andrew Jackson, for example. But that was in the quill-pen era when the financial sector was a pup. Today's financial services sector, by contrast, is a grasping, gargantuan combination of banks, stockbrokers, insurancemen, loan sharks, credit-card issuers, hedge fund speculators, securitization mavens and mortgage operators. Over the last five years, financial services has reached a swollen 20-21% of U.S. GDP -- the largest sector of the private economy...Manufacturing led financial services by 2:1 back in the 1970s, but by 2006 beaten goods production had shrunk to just 12% of GDP.

Do most Americans understand this? Of course not. Newspaper front pages have shunned any discussion; 60 Minutes has not even spared the transformation sixty seconds, despite its vast implications. This upheaval is probably "the greatest story never told" about the two decades between, say, 1986 and 2006...Nor was it an economic accident. Computerization was a prequisite, as was the rise of financial mathematics. However, I would say that the two most important underpinnings of financialization lay in the rise of public and private debt as a mainstay of American culture and economics and the perpetual liquidity and bail-out support of the Federal Reserve Board under Alan Greenspan. During Greenspan's 1987-2005 tenure, the sum of public and private debt in the United States quadrupled from just over $10 trillion to $43 trillion. Finance became the industry that was not allowed to fail but was permitted to enlarge and metastasize its behavior almost at will. Regulation was minimal. Favoritism was omnipresent.

The result, alas, has been all over recent headlines. America's biggest ever housing bubble, with 57 varieties of exotic mortgages and home prices now plummeting at rates unseen since the 1930s. The United States turned Credit Card Nation, with a citzenry in thrall to plastic, 20% interest rates and late fees for just about everything. Huge banks like Citigroup feel no shame in paying billion-dollar fines for colluding with Enron's tax and accounting deceits. And since mid-2007, national and world credit markets have been panicked and paralyzed by hitherto obscure instruments -- the stand-outs are collateralized debt obligations (CDOs) -- that not even their designers and packagers can explain.

Adolescent versions of Frankenstein finance became a crash and a disaster for Americans in 1929 when the industry was new and represented only 10-15% of the economic weight of American manufacturing. Now, by contrast, the unraveling of a second financial sector-turned casino involves literally the biggest force in the American economy. Who knows how much of this hubris and malfeasance is going to unwind unpleasantly or how long that will take? In fact, phony Washington statistics and warped market measurements make it doubly hard to tell. The federal Consumer Price Index is already regarded by many Americans as a con job, and the press periodically quotes investors who state their belief that current U.S. inflation is really 6 to 9 percent a year, not the 2-4 percent the government alleges. I agree. On top of which, because the value of the dollar has dropped so far, the Dow Jones Industrial Average at the end of March was not really 12,200, a number barely up from its 11,700 peak in 2000. If you measure the Dow in Swiss francs or euros, two strong currencies, it has already lost some forty percent of its 2000 value. Too many Americans live in a dream-world of economic misinformation.



-------------------------------------
I began writing about these matters with a 1990 book entitled The Politics of Rich and Poor, and in several other volumes since then. Today, the economic negligence of Washington and Wall Street, more than two decades in the making, has led to a multi-dimensional crisis in which this country faces an unprecedented convergence of problems: unprecedented debt, tumbling home prices, reckless money supply expansion, growing inflation, insufficient and expensive oil, and an eroding dollar. Sadly, there may no longer be a plausible way out.

Kevin Phillips' new book, Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism, is being published in April by Viking.

[Tansy_Gold]

30. Oil price comparison???

A combination of a half-remembered post on SMW from a few days ago and this bit from Kevin Phillips' article sparked my (insatiable) curiosity:

<snip>
On top of which, because the value of the dollar has dropped so far, the Dow Jones Industrial Average at the end of March was not really 12,200, a number barely up from its 11,700 peak in 2000. If you measure the Dow in Swiss francs or euros, two strong currencies, it has already lost some forty percent of its 2000 value.
<end snip>

Someone posted within the last week or two that when the change in the dollar's value is compared to the stability of the euro, the price of a barrel of crude oil actually hasn't changed that much; the higher price is actually reflecting the fall of the value of the dollar.

So my question is, is there any way to compare U.S. gasoline-at-the-pump price with, say, European prices over the past year or two years or whatever? Would that give us a true comparison of not only how much the price of oil/gas has risen here and/or (not) risen elsewhere, but perhaps also an indication of why it's risen, meaning domestic inflation rather than those greedy OPEC people gouging us to the point that we'll just have to invade them and take OUR oil out from under THEIR real estate?



Tansy Gold, the insatiable

[Ghost Dog]

66. Check out the USD/EUR oil price data/analyses you'll start finding here?:

http://www.google.com/search?q=oil+price+historical+dollar+euro

http://webdiary.com.au/cms/?q=node/2295#comment&PHPSESSID=b126c8a2b43ba55056e616146cb2f199

Sample European transport fuel prices:

http://www.aaroadwatch.ie/eupetrolprices/
(There are 3.785 litres in a US gallon. So at today's, say $1.56 per €1, Germany's €1.368/l unleaded regular gas price would come to rather more than $8 per gallon.

[wordpix]

93. "economic negligence" & "current U.S. inflation is really 6-9 %/yr, not the 2-4% the govt. alleges"

I'm glad Kevin Phillips, who has credibility among both repukes and Dems, sees it. And why does the gov. keep saying our inflation rate is 2-4% when the price of homes nearly doubled every two years in the early 2000's, food prices are up at least 10%/yr. in the past few years and oil and gasoline have increased 50%/yr.? I am getting these numbers off the top of my head, but that's a quick calculation.

[Ghost Dog]

25. (FT yesterday) Radical (international) action considered to fight crisis

By Krishna Guha
Published: April 1 2008 03:00 | Last updated: April 1 2008 03:00

Radical strategies to fight the credit crisis including temporary suspension of capital requirements, taxpayer-funded recapitalisation of banks and outright public purchase of mortgage-backed securities are being actively discussed by governments and central banks.

These were among possible next steps discussed in Rome on Friday at a meeting of the Financial Stability Forum, the body co-ordinating the global response to the market turmoil.

The discussion highlights the fact that global policymakers remain deeply concerned about the financial outlook and willing to explore extreme measures in spite of the stabilisation of markets following the rescue of Bear Stearns, the US investment bank.

The steps are set out in an options paper prepared for governments, banks and regulators by the FSF, led by Mario Draghi, the former governor of the Bank of Italy, a copy of which has been obtained by the Financial Times.

Among the ideas floated was getting a large group of the most important banks simultaneously to disclose their financial positions based on a "common template" including information on the prices attributed to different securities and the methodologies used to derive them.

This would include standardised disclosure of exposures to collateralised debt obligations, residential and commercial mortgage-backed securities, leveraged finance, exposure to off-balance sheet entities and capital and liquidity resources. One party present said there was widespread interest in this idea.

The FSF proposed temporarily suspending capital and reporting rules that tie prudential requirements to market values of securities.

Regulators could temporarily change capital rules under Basel II to allow trading assets to be treated as available-for-sale, reducing their impact on capital calculations.

Alternatively, regulators could temporarily relax regulatory capital minimums wholesale, the FSF said. It noted that an alternative approach would be to suspend accounting rules for some assets, but said this could "damage market confidence."

/plenty more... http://www.ft.com/cms/s/0/f839771c-ff84-11dc-b556-000077b07658.html

See also Roubini's opinions, 31 Mar 08 (.pdf): http://www.rgemonitor.com/redir.php?sid=1&tgid=10000&cid=252412

...First, the system of compensation of bankers and operators in the financial system is
flawed as it is a source of moral hazard in the form of gambling for redemption. The
typical agency problems between financial firms’ shareholders and the firms’
managers/bankers/traders are exacerbated by the way the latter are compensated: since a
large fraction of such compensation is in the form of bonuses tied to short-term profits
and since such bonuses are one-sided (positive in good times and, at most zero, when
returns are poor) managers/bankers/traders have a huge incentive to take larger risks than
warranted by the goal of shareholders’ value maximization...

[UpInArms]

26. dollar watch

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

Last trade 72.477 Change -0.036 (-0.05%)

Why Did the Dollar Rally?

http://www.dailyfx.com/story/bio1/Why_Did_the_Dollar_Rally__1207086346304.html

The first day of trading in the second quarter has been positive for both the US equity market and the US dollar. Investors that have cut back on dollar denominated holdings in the Q1 are jumping back in force with Lehman Brothers raising $4 billion from a stock sale to calm investors and UBS announcing a similar plan to replenish capital. The US dollar is up across the board while the Dow Jones Industrial Average surged close to 400 points. On a percentage basis, this is the strongest start to the second quarter in 70 years and the improvement in risk appetite is the main reason for the dollar’s recovery. Manufacturing sector ISM was stronger than expected, but it remained in contractionary levels, which means that the data does alone would not have triggered today’s dollar rally. Prices paid surged to the highest level in 2 years, which is the only other reason for dollar strength. Inflation is roaring its ugly head with gas prices hitting a record high and rice prices estimated to rise by 55 percent this year according to the World Bank. This leaves Bernanke in a tough spot ahead of tomorrow’s testimony before the Joint Economic Committee. Although Big Ben will most certainly face tough criticism about the current state of the US economy, he has to decide whether greater emphasis should be placed on growth or inflation. How much longer can he turn a blind eye? Growth in the US is still a serious problem, but the continual rise in food prices also puts pressure on the pocketbooks of US consumers. The dollar should resume its slide if Bernanke puts a greater emphasis on growth, but if he stresses the need to balance inflation with growth, the odds for a 25bp rate cut will increase significantly, extending the dollar’s rise. The futures market is currently pricing in an 80 percent chance that the Federal Reserve will only cut interest rates by 25bp at the end of the month compared to a 20 percent chance of a 50bp cut. In addition to Bernanke’s speech, we are also expecting the ADP Employment and the Challenger Layoff reports. These numbers will help to determine if March will be another month of weak non-farm payrolls growth.

...more...

Using Currencies To Time Equity Moves

http://www.dailyfx.com/story/topheadline/Using_Currencies_To_Time_Equity_1207055172196.html

Many traders and analysts have taken advantage of the growing correlation between asset classes to forecast movements in one market by analyzing the changes in another. However, while using the changes in equities to forecast price action in risk-sensitive currency pairs has grown in popularity, the reverse (using FX moves to anticipate changes in the equities market) has not. And, considering the currency market’s deep liquidity and 24-hour session, overlooking such an advantage would be missing out on one of the best strategies in current market conditions.


Why FX is a better leading Indicator for Equities

Without a doubt, the top reason for using the currency market as a leading indicator for stocks – instead of the other way around – is the fact that Forex trades 24 hours a day. In comparison, equity traders typically have only six to eight hour sessions. This creates a huge gap of time where an economic release or exogenous event that effects the general appetite for risk can cross the wires without being incorporated into stock prices. The only reprieve for pure equity traders is to anticipate the reaction from a stock market to data or breaking news is to perhaps look at how another country’s benchmark index responded to the data and assume the latter index will follow suit when trading starts. However, many times certain countries’ equity markets will hold off on a response to a macro event until a financial center (like London or the US) comes online and offers its own direction.

<snip>

Over the past few years, the correlation between equities and those currency pairs considered top carry trade candidates has tightened remarkably. This distinct connection has developed from greater access to global markets and, more importantly, an intensified appetite for risk. However, where the demand for yield was a commonality that would initially tighten the relationship between these two markets, it has been the flight from risk and demand for liquidity over the past six months that has truly synced the movements between the currency and stock markets on the intraday level. Since the last major bull market run through the end of the millennium raised the importance of return over the potential for risk, it has been estimated that the capital behind the carry trade has grown seven fold. This should not only offer some perspective into the overwhelming influence the appetite for risk has over price action across the markets; it more poignantly reveals how long the subsequent unwinding of this build up of bullish sentiment and positioning can last.




...more...

[Ghost Dog]

31. Euro= USD 1.559, CHF 1.583 JPY 159.5 and GBP 0.787 at this time

Dollar Rises Against Yen as Report Shows Companies Added Jobs
April 2 (Bloomberg) -- The dollar rose against the yen after a private report showed U.S. companies unexpectedly added jobs in March, indicating the economy may be weathering the worst housing slump in a generation.

``The market is telling you that the downturn of the U.S. economy is potentially going to be not as deep as originally expected,'' said Jeff Gladstein, global head of foreign-exchange trading at AIG Financial Products in Wilton, Connecticut. ``The dollar is trying to bottom from here.'' The dollar rose 0.5 percent to 102.36 yen at 8:31 a.m. in New York, from 101.85 yesterday. It traded at $1.5603 per euro, compared with $1.5614. The euro increased 0.4 percent to 159.63 yen, compared with 158.99.

U.S. employers added 8,000 jobs in March, after shedding a revised 18,000 the previous month, ADP Employer Services said in its monthly employment report. The median forecast of 24 economists surveyed by Bloomberg News was for 45,000 fewer jobs.

Federal Reserve Chairman Ben S. Bernanke gives testimony to Congress on the U.S. economy at 9:30 a.m. in Washington. Traders see 72 percent odds the Fed will cut its benchmark lending rate to 2 percent at its next meeting April 30, according to futures contracts on the Chicago Board of Trade. The odds of a cut of a half-percentage point are 28 percent.

Treasury Secretary Henry Paulson, in an interview today with Bloomberg Television after meetings with Chinese officials in Beijing, praised China for the pace of the yuan's gains. The currency has advanced more than 5 percent versus the dollar since his visit to China in December, and is up 18 percent since the Chinese abandoned a strict peg in July 2005.

/. http://www.bloomberg.com/apps/news?pid=20601083&sid=aNJ2GHPUBT.s&refer=currency

EU's Almunia: Global Econ Imbalances "Unsustainable"
BRUSSELS -(Dow Jones)- Global economic imbalances, particularly the massive accumulation of foreign-exchange reserves in China and the Middle East, have reached "unsustainable levels," European Commissioner for Economic and Monetary Affairs Joaquin Almunia said Wednesday.

Almunia, speaking at an economic conference in Brussels, said China and other Asian countries should make their currencies more flexible. More flexible exchange rates in China and other emerging Asian economies "would ease the pressure off the euro, which is currently bearing the burden of adjustment alone," Almunia said. He urged oil states in the Middle East to spend more money on developing and diversifying their economies.

Almunia also cited the U.S. current account deficit and Japan's current account surplus as key risks to the global economy. "A disorderly correction of global imbalances would have dire consequences for the global economy as a whole, with the potential to disrupt international trade and fuel protectionist pressures that would restrict growth and prosperity worldwide," Almunia said. He noted that sovereign wealth funds, the deep-pocketed state investment vehicles from China, the Middle East and other emerging-market economies, are a byproduct of the current global imbalances.

/.. http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=d0690eca-b141-40fd-8e52-03991af42220

[Demeter]

62. Same Reason Why People Remarry--Triumph of Hope Over Experience!

or "Rocky, watch me pull a rabbit out of my hat!"

[AnneD]

73. That is probably why....

GOP's keep getting elected to public office too.

[Demeter]

74. That Is FEAR over Experience!

Fear of all the bad things out there (that the GOP talks about) and then believing that the GOP isn't actually promoting those bad things, and turning to the GOP for protection!

Actually, sounds like stupid gullible PT Barnum America.

[AnneD]

77. Good Point Demeter....

maybe it's why I keep voting for Democrats and cheering the Cubs and 'Stros. Hold that football for me Lucy.

[UpInArms]

28. US home loan demand plunges; refinancing drops

http://www.reuters.com/article/bondsNews/idUSN0235223720080402?sp=true

NEW YORK, April 2 (Reuters) - U.S. mortgage applications plunged last week, largely reflecting a drop in demand for home refinancing loans, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications <USMGM=ECI>, which includes both purchase and refinance loans, for the week ended March 28 fell 28.7 percent to 688.3.

The index, however, gained 48.1 percent the previous week.

Overall mortgage applications last week were 6.0 percent above their year-ago level. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 0.11 percent to 744.5.

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

<snip>

The MBA's seasonally adjusted purchase index <USMGPI=ECI>, widely considered a timely gauge of new home sales, dropped 11.8 percent to 356.0. The index came in below its year-earlier level of 402.9, a drop of 11.6 percent.

...more...

[Ghost Dog]

34. GLOBAL MARKETS-Stocks, dollar rise as ADP adds to optimism

Wed Apr 2, 2008 8:47am EDT
LONDON, April 2 (Reuters) - World stocks leapt to a one-month peak on Wednesday and the dollar rose, while save-haven government bonds fell after a survey showed an unexpected gain in U.S. private-sector jobs in March.

The report by ADP Employers Services, coming ahead of Friday's official U.S. jobs data, showed U.S. private-sector employers added 8,000 jobs in March, after cutting 18,000 in February.

It added to investor optimism fanned by major banks' efforts this week to come clean about their financial woes and raise fresh capital relieved investors.

"It's another piece of positive news for the U.S.," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey.

The FTSEurofirst 300 index extended gains to 1.1 percent on the day after the report while the MSCI main world equity index .MIWD00000PUS rose more than 1 percent to its highest level since late February.

U.S. stock futures SPc1 erased early losses to point to a firmer open on Wall Street later. On Tuesday, U.S. stocks posted their biggest one-day rally since March 18.

The dollar hit a one-week high against a basket of major currencies .DXY before trimming gains as optimism grew about the health of the banking sector and the U.S. economy.

/... http://www.reuters.com/article/marketsNews/idUSL0240920220080402?rpc=401&

[AnneD]

35. Morning Marketeers.....

:donut: and lurkers. Well, the dust has settled and a calm has now descended over the house. My daughter Senior Oboe Recital went very well. Thanks for all the well wishes. The music was very good, but the surprise (to all that didn't know my daughter's talents) and what folks wanted to hear more of, was the song she wrote. We laughed when she sat down at the piano and kicked off her shoes-but then she played her original works. The song she played was a duet. The song was a question about God and whether he existed in this world. The first verse which she sang was as a nonbeliever, her friend sang the believer's verse, and together they sang a chorus verse that could be taken both ways. The lyrics were really rather clever-but the tune was great. Hope she does go into composition and conducting-she really does have a knack.

And speaking of talent or lack there of....does Congress really want to put the Fed's in charge of regulating and policing the WS. That seems wrong on so many levels to me. I think WS's reaction should be Congresses first clue. Remember, these were the folks that wanted deregulation. And what about all that economic Darwinism they have been espousing for year. Yeah, it doesn't feel so good when it's your company that's about to go extinct, ey. As a small investor (and there are a few of us), I will not put my money into something that is transparent and regulated. Until they I'd do better to plan a trip to Vegas-at least they are honest about the odds being in favour of the house and I am always promised a bus ticket home should I go belly up.

Happy hunting and watch out for the bears.

[Hugin]

88. I'm going to assume you meant to say...

"I will not put my money into something that is NOT transparent and regulated."

*tsk*

Gotta watch the typos... Those Neocons are literalistic! ;)

:hi:

[DemReadingDU]

36. IMF Cuts Global Forecast on Worst Crisis Since 1930s

April 2 (Bloomberg) -- The International Monetary Fund cut its forecast for global growth this year and said there's a 25 percent chance of a world recession, citing the worst financial crisis in the U.S. since the Great Depression.

The world economy will expand 3.7 percent in 2008, the slowest pace since 2002, according to a document obtained by Bloomberg News at a meeting of Southeast Asian deputy finance ministers and central bankers in Da Nang, Vietnam. In January the fund projected growth of 4.1 percent.

The reduction is the third by the Washington-based lender since last July, when it predicted the world economy would cope with the U.S. credit squeeze and grow 5.2 percent this year. Central banks will need to conduct policy ``as flexibly'' as the circumstances warrant, the statement said, adding that the European Central Bank has room to lower borrowing costs.

``The financial shock that originated in the U.S. subprime mortgage market in August 2007 has spread quickly, and in unanticipated ways, to inflict extensive damage on markets and institutions at the core of the financial system,'' the statement said. ``The global expansion is losing momentum in the face of what has become the largest financial crisis in the United States since the Great Depression.''

Asked in a Bloomberg Television interview about the IMF's analysis, U.S. Treasury Secretary Henry Paulson said today ``that sounds overblown to me.'' The IMF forecasts were on a slide presentation prepared by its Asia-Pacific department. Bill Murray, an IMF spokesman in Washington, declined to comment on the report. The lender is scheduled to publish its new forecasts on April 9.

more...
http://www.bloomberg.com/apps/news?pid=20601087&sid=aWNW6ABxw9.Y&refer=home

[Demeter]

63. When Even the IMF Admits It, It Must Be True n/t

[Wednesdays]

100. And if there's one person who has learned not to dwell on the

dark side of the financial world...it's Bill Murray.




(Sorry, couldn't resist.) :evilgrin:

[UpInArms]

37. Chopper Ben Spews and proves his lack of understanding

05. Bernanke defends Bear Stearns bailout
9:30 AM ET, Apr 02, 2008 | Comments: 0 | Tags: none

06. Fed liquidity moves seem to have been helpful: Bernanke
9:30 AM ET, Apr 02, 2008 | Comments: 0 | Tags: none

07. Risks to growth remain to the downside: Bernanke
9:30 AM ET, Apr 02, 2008 | Comments: 0 | Tags: none

08. Financial markets remain under considerable stress: Bernanke
9:30 AM ET, Apr 02, 2008 | Comments: 0 | Tags: none

09. Some signs that inflation expectations are rising: Bernanke
9:30 AM ET, Apr 02, 2008 | Comments: 0 | Tags: none

10. Inflation a source of concern: Bernanke
9:30 AM ET, Apr 02, 2008 | Comments: 0 | Tags: none

11. Fed actions have helped stabilize financial system: Bernanke
9:30 AM ET, Apr 02, 2008 | Comments: 0 | Tags: none

12. Financial turmoil weighing on economic activity: Bernanke
9:30 AM ET, Apr 02, 2008 | Comments: 0 | Tags: none

13. Can't rule out chance economy will "contract:" Bernanke
9:30 AM ET, Apr 02, 2008 | Comments: 0 | Tags: none

14. Bernanke gloomier about near-term U.S. economic outlook
9:30 AM ET, Apr 02, 2008 | Comments: 0 | Tags: non

[Zynx]

46. I think that's largely a fair assessment that he laid out there.

The Bear Stearns move was controversial, but having a pessimistic outlook on the economy and also saying that Fed moves have stabilized markets is not incorrect. Credit spreads and conditions have improved and that cannot be debated.

[TalkingDog]

64. For who?

Improved that is.

Serious question, not snark.

[DemReadingDU]

39. Breaking: Bernanke says economy could shrink - the closest he's come to proclaiming a recession.

4/2/08 Bernanke sees downturn risk
Fed chairman says economy may now shrink in first half of year - the closest he has come to proclaiming a recession. He defends Bear Stearns bailout.

Federal Reserve Chairman Ben Bernanke said Wednesday that the U.S. economy could shrink in the first half of the year - the closest that the nation's central bank chief has yet come to proclaiming a recession.

In prepared remarks to the Joint Economic Committee of Congress, Bernanke said he also expects further rises in unemployment and says the economic outlook has worsened since the Fed's economic outlook was released in January.

"It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly," said Bernanke in his prepared remarks.


more...
http://money.cnn.com/2008/04/02/news/economy/bernanke_testimony/index.htm?postversion=2008040209


edit: Watch Bernanke on CSPAN3
http://www.c-span.org/watch/cs_cspan3_rm.asp?Cat=TV&Code=CS3

[UpInArms]

40. 9:41 EST profit taking after yesterday's sucker rally

Dow 12,613.57 40.79 (0.32%)
Nasdaq 2,355.41 7.34 (0.31%)
S&P 500 1,366.69 3.49 (0.25%)
10-Yr Bond 3.585% 0.04

NYSE Volume 221,672,296.875
Nasdaq Volume 114,479,789.062

[DemReadingDU]

41. Someone manipulated the market yesterday

Get those stocks high in price and take profits because they knew Bernanake was speaking today about the economy shrinking.

[formercia]

49. I had the same feeling.

Banks report big write-downs and the market goes up? It's counterintuitive.

More like pump and dump by the big players.

Can you say RICO?

[Zynx]

50. The big write-downs have been priced in for some time.

Just because news on its surface is bad does not mean the market will decline. It has never been a 1 to 1 correlation. On seemingly good news the market does not go up in many cases. Take recent earnings reports from Google where they look good at a headline level, but the stock has declined.

[Ghost Dog]

67. In a way, I think, yes.

We see the froth forming at the crest of the wave that's in fact a tsunami

[54anickel]

99. Bwahaha...nice link - thanks. (n/t)

[Dancing_Dave]

90. Ironically, the Fed itself funded yesterday's asset bubble

The Fed's "emergency" policies have placed billions worth of "liquidity" in the worst possible hands...we're sure to see a variety of bubbles in the coming weeks ... none of which will do us any good in the long run.

[DemReadingDU]

42. Steven Leser: It's not a Recession or even a Depression that is coming

it is a Stagflationary Abyssal

Here's the link to Seven Leser's posting...
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x349946

[Tansy_Gold]

103. Not to be picky, but. . . .

. . ..his syntax is screwy.

"Abyssal" is an adjective, not a noun. "Abyssal stagflation" would be better, or "stagflationary abyss," though the novelist in me prefers "black hole from which there is no escape whatsofuckingever."

His logic, however, seems to be solid. Well, maybe that's because it seems to agree with mine. Either way, it don't look pretty out there.


TG

[antigop]

54. Fed's rescue halted a derivatives Chernobyl (posted in Economy forum last night)

My apologies if this article has already been posted here.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/23/ccfed123.xml&page=1

We may never know for sure whether the Federal Reserve's rescue of Bear Stearns averted a seizure of the $516 trillion derivatives system, the ultimate Chernobyl for global finance.

"If the Fed had not stepped in, we would have had pandemonium," said James Melcher, president of the New York hedge fund Balestra Capital.

"There was the risk of a total meltdown at the beginning of last week. I don't think most people have any idea how bad this chain could have been, and I am still not sure the Fed can maintain the solvency of the US banking system."

All through early March the frontline players had watched in horror as Bear Stearns came under assault and then shrivelled into nothing as its $17bn reserve cushion vanished.

[formercia]

58. in a picture..

[TalkingDog]

65. Nice choice.

I'll be glad when (bill-gates-dies-and-burns-in-eternal-fire) my computer is "fixed". I'll be able to actually ponder and respond rather than hit and run.

As suggested above: Later, gotta run.

Take care.

TD

[Demeter]

68. Analysts: 200,000 Banking Industry Layoffs Predicted

http://www.huffingtonpost.com/2008/04/01/analysts-200000-banking_n_94564.html


NEW YORK — The U.S. financial industry has been shedding jobs at a record clip, and some analysts predict the pace will only accelerate over the next year-and-a-half as banks cut costs in the face of the housing market slump and the weak economy.

Analysts at the financial research firm Celent LLC said in a report Tuesday that it expects the U.S. commercial banking industry _ essentially, all companies that lend or collect deposits _ to lose 200,000 of its 2 million jobs over the next 12 to 18 months.

An annual loss of 200,000 jobs at the nation's commercial banks would be an unprecedented number.

In 2007, the entire financial services sector _ which consists of mostly commercial banks _ announced job cuts that totaled a record 153,000, according to the job placement consultancy Challenger, Gray & Christmas, Inc. More than half of those cuts were in the mortgage-lending business, and occurred all over the country, particularly in New York and California.

Octavio Marenzi, the head of Celent's financial consultancy unit, said more layoffs are inevitable as the subprime crisis hits other parts of the banking industry and spreads beyond mortgages to mortgage-related products, such as home-equity loans, and other types of lending, such as credit cards.

[Demeter]

69. The Liquidity Society

http://www.financialarmageddon.com/2008/04/the-liquidity-s.html

TV pundits and Wall Street "strategists" believe that "cash on the sidelines" can only mean one thing: it's time to be bullish. In their view, such a build-up of liquidity has always signaled a pent-up demand for stocks.

But what if the money's there (and growing) because individual investors, in particular, are beginning to realize that:

* Equities are a riskier asset class than they thought (or were led to believe by their brokers and the rest of the financial services industry)
* True diversification means having a portion of their portfolios in an asset class called "cash"
* Portfolio volatility may not be such a good thing, especially for those who are in or near retirement

If any or all of these apply, then the recent cash-raising, which the "experts" -- I use that term loosely -- believe is bullish, may actually be pointing to a secular change in attitudes towards the stock market. If so, such perspectives could weigh on share prices for the foreseeable future.

Of course, it is always dangerous to think that "this time is different," and maybe I am wrong. However, the following report from Jennifer Levitz of the Wall Street Journal, "Americans Delay Retirement As Housing, Stocks Swoon," seems to indicate that at least some segments of the "ownership society" are embracing a new mantra: what some might call the "liquidity society."

..............................................................................................

Nest Eggs Shrink, Deferring Dreams; 'Freaked Out' Elite

As the falling real-estate and stock markets erode their savings, many aging Americans are delaying retirement, electing labor over leisure in uncertain times.

A three-decade veteran at International Business Machines Corp., Dick Boice had planned to sell his house, pack up and move to Arizona with his wife, Lauren, to take early retirement. But two months after the January date he set to exit the work world, Mr. Boice, who is 59 years old, is still on the job. He figures he'll stay put for another couple of years.

The Boices had counted on proceeds from the house sale to boost their retirement income. After a year on the market, the roomy colonial in Blue Springs, Mo., didn't move, forcing the couple to cut the asking price by $40,000 to around $250,000. The house remains unsold. Meanwhile, Mr. Boice has watched the value of his 401(k) and individual retirement accounts fall by roughly 20% so far this year, to a combined $240,000.

"Everything is just heading south," says Mr. Boice, who works in client support for IBM in Kansas City, Mo. "You can't hardly make any kinds of plans because you don't know what you can count on."

Mr. Boice has plenty of graying company at the grindstone. Millions of retirement-age Americans, stung by the recent economic pall, suddenly are having to reassess their plans -- with many forced to quickly change course. In February, the proportion of people ages 55 to 64 in the work force rose to 64.8%, up 1.5 percentage points from last April. That translates to more than an additional million people in the job pool, according to the U.S. Labor Department. The ranks of those 65 and over in the work force rose to 16.2% from 16% in the same time span -- meaning 212,000 more hands on deck. So far, the numbers for March continue to show a "sharp" increase, says Steve Hipple, a department economist.

While many Americans are still sitting on large gains from homes and stocks bought years ago, today's market turmoil is shaping up to be the most painful in decades. Nationally, house prices have fallen 10% or so in the past year. And the quarter ended Monday marked the worst period for stocks in 5½ years, with equities off 15.5% from their October highs.

The double dip, affecting asset owners of every age bracket, is unprecedented in recent decades. In 1987, property and market values dropped in tandem -- but nowhere near the extent to what's happening now. To document similar conditions, "you'd have to go back to the era of the Depression," says financial historian Richard Sylla of New York University's Stern School of Business.

With their homes worth less, fewer people feel confident enough to retire, even if they plan to continue living in them. And unlike younger workers, they don't have years to make up for downturns in the stock market. As a result, they worry that their investments will diminish to the point that they won't have enough money to get through retirement.

According to economists and demographers, a huge exodus from the work force should be happening. The first of 78 million baby boomers, those born between 1946 and 1964, passed the 60-year-old mark two years ago. And 2008 was expected to be a banner retirement year, with the oldest boomers reaching 62 -- the earliest age for collecting Social Security. When the first boomer drew a benefit on Feb. 12, the Social Security Administration described it as the start of "America's silver tsunami."

AND IT GOES ON IN EXCRUCIATING DETAIL--SEE LINK

[AnneD]

76. I think our theme song today should be the classic

The Gambler by Kenny Rogers....

On a warm summers evenin on a train bound for nowhere,
I met up with the gambler; we were both too tired to sleep.
So we took turns a starin out the window at the darkness
til boredom overtook us, and he began to speak.

He said, son, Ive made a life out of readin peoples faces,
And knowin what their cards were by the way they held their eyes.
So if you dont mind my sayin, I can see youre out of aces.
For a taste of your whiskey Ill give you some advice.

<snip>

Now evry gambler knows that the secret to survivin
Is knowin what to throw away and knowing what to keep.
cause evry hands a winner and evry hands a loser,
And the best that you can hope for is to die in your sleep.

So when hed finished speakin, he turned back towards the window,
Crushed out his cigarette and faded off to sleep.
And somewhere in the darkness the gambler, he broke even.
But in his final words I found an ace that I could keep.

<snip>
You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count you r money when youre sittin at the table.
Therell be time enough for countin when the dealins done.


Sage advice to us all...........

[Hugin]

80. That's the ticket, AnneD!

:thumbsup:

[Demeter]

81. Oh, Yes! Excellent Choice!

Whole buncha people I'd like to introduce to the heavy end of a cluestick!

[specimenfred1984]

78. 400 points up yesterday, absolutely nothing so far today. Hmnnnn....

That "bullish sentiment" those "speculators" had yesterday sure seemed to disappear in a hurry. Hey here's an idea, what if it's not "speculators" at all in these corrupt as hell markets and it's really just fascist corporations looking for ways to steal each others money along with stealing anyone else's money who happens to get in the way?

Nah, it couldn't be, our markets are "free", WEEEEEEEEEEEEEEEEE!

[Demeter]

83. Let the Wrold's Greatest Detective Explain It For You:

Colonel Ross still wore an expression which showed the poor opinion which he had formed of my companion's ability, but I saw by the inspector's face that his attention had been keenly aroused.

"You consider that to be important?" he asked.

"Exceedingly so."

"Is there any point to which you would wish to draw my attention?"

"To the curious incident of the dog in the night-time."

"The dog did nothing in the night-time."

"That was the curious incident," remarked Sherlock Holmes.

The Memoirs of Sherlock Holmes (1893)
Inspector Gregory and Sherlock Holmes in "Silver Blaze" (Doubleday p. 346-7)

[Warpy]

91. They're taking their profits today

and maybe tomorrow, too.

I admit I expected a bigger drop today.

[54anickel]

79. Bit OT....Howard Zinn: The End of Empire?

http://www.alternet.org/audits/81005/

In Iraq, in Afghanistan, and at home, the position of the globe's "sole superpower" is visibly fraying. The country that was once proclaimed an "empire lite" has proven increasingly light-headed. The country once hailed as a power greater than that of imperial Rome or imperial Britain, a dominating force beyond anything ever seen on the planet, now can't seem to make a move in its own interest that isn't a disaster. The Iraq government's recent offensive in Basra is but the latest example with -- we can be sure -- more to come.

In the meantime, the fate of that empire, lite or otherwise, is the subject of Howard Zinn today at Tomdispatch, and of a new addition to his famed People's History of the United States. The new book represents a surprise breakthrough into cartoon format. It's a rollicking graphic history, illustrated by cartoonist Mike Konopacki, that takes us from the Indian Wars to the Iraqi "frontier" (with some striking autobiographical asides from Zinn's own life). It's called A People's History of American Empire. It's a gem and it's being published today.

In honor of publication day, Tomdispatch offers the equivalent of a little online extravaganza. Below, you can read Zinn's essay on how he first learned about the American Empire; and you can also click here for two special treats. You can view an animated video, using some of the book's art, with voiceover by none other than Viggo Mortensen. (Think of it as Lord of the Rings, Part IV: The American Mordor Chronicles.) Finally, if you look below the video on that same page, you'll see an autobiographical section of the new book, focusing on Zinn's early years. (Click on each illustration to view a single page of text.) Have fun. Introduction by TomDispatch editor Tom Engelhardt.

more...

[Ghost Dog]

86. Nice rant on EU economies (from letters to Asia Times):

http://www.atimes.com/atimes/Letters.html

...I have no complaints with Chan Akya's being a member of the "moral hazard" crowd and his indictment of G7 central bankers as "utterly corrupt". Most of us on the Left are of the same opinion. My position is, perhaps, more extreme as I see systemic, ongoing criminal enterprise where he sees corruption. I see the capitalist system as more a less a pyramid scheme in as much as it cannot exist without exponential growth, and is supported by a large base of working "peasants" whose generated wealth rises to the apex of financial "kings". Mine is not an irrational notion; it is supported by the rush of central bankers to prop up "money changers" in deregulated free-market capitalist systems around the world. For the moral hazard crowd, this propping up goes against their fundamentalist faith in neoclassical liberal economics. Too bad. Central bankers know how the system works; they know it is fundamentally "corrupt"; they know the free-market is a myth carefully nurtured by its beneficiaries and their paid-for politicians and media spokesmen; they know from the experience of the Great Depression that neo-liberalism, left unregulated, will itself collapse - and the whole world with it if they have run "the pyramid" deep, wide, and long enough. As for Europe's "fractured" economy, there is no doubt that there are structural problems, particularly around labor issues and the ongoing integration issues that are being addressed within countries, and in the EU parliament, in a slow and "mind-numbing" way. That said, the efficiencies in transportation and health care, both largely socialized, are alone enough to give the EU important competitive advantage over the US. Not to be ignored in the petro-scarce future is the fact that Europe's per-capita carbon footprint is one-fifth that of the US; France's is one-tenth; even Germany's is nearly a third of ours. And how does Chan Akya explain Europe's higher worker productivity (on an hour basis) than the US? Chan Akya laments Europe's high tax rates without mentioning what people get for their money. My daughter and son-in-law, who have lived and worked in Europe more than me, explained it to me this way when I expressed shock at how much the government took from their paychecks: "Daddy, we felt the same way our first year or so, but when we began to see how much we get back in benefits, not to mention almost no poverty, and low-crime, we calmed down. And so should you." How forward-looking was it of France to recently put in place a carbon tax on cars at point of purchase that progressively taxes cars that emit more than 160kg/km of carbons up to <$4,555> on the worst guzzlers, and rebates to purchasers up to <$594> for cars that emit less than 160kg/km? As James Dimon, CEO of JPMorgan, said at the Economic Club of Washington last week, " ... look at France; they have a long term, well thought through, non partisan energy policy ... , where we have none. The US, since 1974, has a policy of default." In many important ways trying to compare the economies of Europe and the US is "apples and oranges". Not to say that they can't learn something from the US (although I would like for someone to point out what), it is certain that we could learn from Europe...

- also linked here: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3094424

The letter refers to a Mar 29, 2008 article, "The new Brahmins" By Chan Akya

[antigop]

89. Eight steps to a trillion dollar meltdown

http://www.foreignpolicy.com/story/cms.php?story_id=4240

No, it’s not the Great Depression, but the United States is facing a nasty economy-wide retrenchment following the excesses of the 2000s, with no easy way to dance through it. Think 1979 to 1982, when then U.S. Federal Reserve Chairman Paul Volcker exorcised consumer price inflation from the economy. The difference today is that the inflationary explosion has been absorbed by prices of assets—houses, stocks and bonds, office buildings—rather than by the prices of things you buy at the store. Here’s how it happened.

[specimenfred1984]

92. Yesterday "The Worst is Behind Us": Today "Recession is Possible"

"Just say whatever has to be said", Rule No. 1 for fascist propaganda whether what's being said completely contradicts what was just said.

[Theres-a]

95. Catapulting the propaganda. nt

[RUMMYisFROSTED]

96. 1984 is still holding it's own.

[UpInArms]

97. and don't you just love the amnesia from day to day?

the flipping and the flopping always looks like a dying trout on the dock.

:hi:

[ozone_man]

102. Keep hope alive!

We'll know when the bottom is reached, when there is no more hope. Until then there will always be bubble headed economists saying the worst is over. And then a new bottom forms, and a new one, ...

[slipslidingaway]

101. BEING STREET SMART By Sy Harding

http://decisionpoint.com/TAC/HARDING.html

"AT WHAT POINT DOES PESSIMISM BECOME A POSITIVE? March 28, 2008.

Every week brings headlines of another well known financial firm being in so much trouble that a meltdown of the financial system is feared...

On Tuesday the closely watched Conference Board's Consumer Confidence Index showed the index fell to 64.5 in March from an already gloomy 76.4 in February. Consumer confidence is now at its lowest level since the Iraq War began in 2003...

The Investors Intelligence sentiment survey two weeks ago showed more bears than bulls for the first time in 5.4 years, and by the highest plurality of bears since October 11, 2002...

In market analysis, investor and consumer sentiment is considered a 'contrary' indicator. That is, confidence is always at an extreme of optimism at economic and market tops. In the other direction, consumer confidence tends to reach a level of extreme gloom and pessimism about the time steps have been taken that will soon have the economy recovering. And investor sentiment usually reaches an extreme of pessimism and bearishness about the time the stock market has reached a significant bottom and, looking six months or so ahead, is ready to anticipate that economic recovery..."


Is it different this time???

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x37175

"...Although we've detailed so many of the now current reasons why in discussions over the recent past, a standout anecdote is the fact that the LEI (leading economic indicators) report for February that hit the Street a few weeks back has now shown us a consistent five straight months of decline. We'll spare you an exhaustive look at historical precedent when we tell you that the LEI of the last half year is completely consistent with initial recessionary periods past. In essence, it's corroborating the fact that recession has already arrived, although "officially" that fact will be revealed some time in the future when its usefulness as a piece of factual investment information will be essentially useless. By the way, if the LEI deteriorates meaningfully further from here in the coming months ahead, it will be suggesting a severe or lengthy recession to come, as opposed to the mild recession we believe the consensus is expecting (if any recession at all) and the LEI suggests for now..."