STOCK MARKET WATCH, Monday April 21

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday April 21, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 275
DAYS SINCE DEMOCRACY DIED (12/12/00) 2647 DAYS
WHERE'S OSAMA BIN-LADEN? 2372 DAYS
DAYS SINCE ENRON COLLAPSE = 2663
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 18, 2008

Dow... 12,849.36 +228.87 (+1.81%)
Nasdaq... 2,402.97 +61.14 (+2.61%)
S&P 500... 1,390.33 +24.77 (+1.81%)
Gold future... 915.20 -27.70 (-3.03%)
30-Year Bond 4.52% -0.01 (-0.15%)
10-Yr Bond... 3.74% +0.01 (+0.38%)






GOLD,
EURO, YEN, Loonie and Silver>

---

PIEHOLE ALERT

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

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

---

Read more: du

[ozymandius]

1. Market WrapUp: Bull and Bear Market Relationships

Bull and Bear Market Relationships
BY TIM W. WOOD

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

[Hugin]

2. The toon gives us today's Market Mood Theme... "Baby Elephant Walk" -- Henry Mancini

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

[54anickel]

25. NOOOOOOOOOOOO! Get it outta my head!!!!! n/t

[InkAddict]

37. LOL - (Columbus) Zoo says elephant pregnant

http://www.daytondailynews.com/n/content/gen/ap/OH_Pregnant_Elephant.html

The Columbus Zoo and Aquarium says one of its Asian elephants is pregnant.

Zookeepers said Friday that Phoebe is scheduled to deliver next March at the end of an almost two-year pregnancy.

[Hugin]

50. Hmm, I wonder how that happened?

:lol:

[InkAddict]

52. Guess it wasn't attendance in "abstinence only" classes?

Per cartoon: Who's your daddy?

And in tribute to OmahaSteve: Phoebe's gonna have perfectly timed "labor pains", no?

[Hugin]

53. "labor pains"...

:rofl: Stop! Stop! Yer killin' me here!

[Demeter]

57. You Are So EVIL!

Anyone who wants to hear it,

http://nascarulz.tripod.com/elebabywalk.mid

[wordpix]

84. the toon is perfect for these days and times

[ozymandius]

3. no goobermint reports today n/t

[ozymandius]

4. Oil spikes to record above $117 a barrel after tanker attack

BANGKOK, Thailand - Oil prices spiked to a record $117.40 a barrel after a Japanese oil tanker was attacked in Middle Eastern waters, off the east coast of Yemen.

The 150,000-ton tanker Takayama was attacked about 270 miles off the Yemen coast in the Gulf of Aden while it was heading for Saudi Arabia, its Japanese operator, Nippon Yusen K.K., said in a statement posted on its Web site.

None of the ship's 23 crew members was injured, and the extent of damage to the tanker was under investigation, the company said. Kyodo News agency reported that the Japanese tanker was leaking fuel after it was fired on by a rocket launcher from a small boat. No other details were immediately available.

.....

Abdullah el al-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said Sunday that oil prices would likely go higher and that the group was ready to raise production if the price pressure was due to a shortage of supply — something he doubted.

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

[ozymandius]

5. Oil price unlikely to fall back below $90: Venezuela

ROME (AFP) - Oil prices, which surged to record 117.40 dollars a barrel on Monday, are unlikely to fall back below 90 dollars, the Venezuelan energy minister Rafael Ramirez said here.

"We believe that prices will remain around this level, at least around 90 dollars," Ramirez told reporters on the sidelines of the International Energy Forum here.

"Oil prices can't fall" much further because "production costs have increased," he said.

Oil prices would only begin to weigh on demand once they had reached a certain level, but that level had not yet been reached, the minister said.

.....

Finally, quizzed about billing oil in euros rather than dollar so as to protect producers against the declining dollar, Ramirez said that the issue would continue to be discussed within OPEC.

Last month, Venezuela said it would sell some of its oil in euros to help offset the economic impact of the falling US dollar.

http://news.yahoo.com/s/afp/20080421/bs_afp/worldenergyoiloutputopecvenezuelairaq_080421100530

[54anickel]

29. Doubt that's gonna fly with any of the GCC members

This is from back in March, think it still holds true...

http://www.bloomberg.com/apps/news?pid=20601109&sid=a7zTpsL44WNI&refer=news

snip>

Political pressure keeps Gulf states wedded to the dollar. Al-Suwaidi received calls from U.S. government officials after saying in November he might drop the peg, a person familiar with the matter said Jan. 3 on condition of anonymity. He received more calls this month after Dow Jones Newswires reported that the central bank had started a study into linking the dirham to a currency basket, a central bank official said.

``The U.S. has always been the guarantor of the Arabian Gulf's military security,'' said Anoushka Marashlian, senior Middle East analyst at Global Insight in London. ``Gulf policy makers wouldn't do anything to compromise that relationship, especially considering current tensions surrounding Iran.''

`Magnitude of Decision'

Before adopting the pegs, five of the GCC states used the Gulf rupee issued by the Reserve Bank of India and linked to the British pound. The U.A.E. began pegging the dirham to the dollar in 1978, while Saudi Arabia began tying the riyal to the U.S. currency in 1986. Kuwait pegged the dinar to a basket of currencies from 1975 to 2003 before using the dollar in preparation for a single Gulf currency. It abandoned that system in May.

``Analysts from outside the Gulf tend to look just at the economics,'' said HSBC's Williams. ``They see that depegging from the dollar makes sense and assume that change is imminent. What they sometimes miss is the politics of regional decision- making. They underestimate the magnitude of the decision.''

more...

[ozymandius]

8. Drivers paying record pump prices

NEW YORK (Reuters) - U.S. drivers are paying record prices to fill their gas tanks and they could see prices surge as much as 30 cents more per gallon over the next few weeks, according to an industry analyst.

U.S. average retail gasoline prices hit a record $3.4737 per gallon on April 18, up 15.66 cents from the April 4 average, according to the nationwide Lundberg survey of about 7,000 gas stations.

Higher driving costs come at a tough time for U.S. consumers, who are already struggling with higher food prices, a slowing economy, job losses and sinking home prices. In addition, surges in gasoline demand during the peak driving months of June, July and August and higher costs could force motorists to cut back on their vacation travel plans, or reduce spending in other areas.

http://news.yahoo.com/s/nm/20080420/bs_nm/energy_gasoline_retail_dc

[ozymandius]

10. Bears Baffled by Oil Highs

As crude-oil prices edge further into uncharted territory, life as a bear has become lonelier than ever.

Benchmark crude futures have registered an electric performance so far this year and now -- near $117 a barrel -- hover well above some of the highest near-term forecasts. The speed of the ascent has caught many market participants off guard and forced banks and brokerages to repeatedly revise their oil-price outlook upward.

Yet some analysts continue to warn that oil prices are teetering close to a steep fall -- at least back near $80 a barrel. For these observers who see the world's oil supply-and-demand balance loosening and weighing on prices, the red-hot rally is nothing short of astonishing.

.....

The case for lower oil prices is straightforward: The prospect of a deep U.S. recession or even a marked period of slower economic growth in the world's top energy consumer making a dent in energy consumption. Year to date, oil demand in the U.S. is down 1.9% compared with the same period in 2007, and high prices and a weak economy should knock down U.S. oil consumption by 90,000 barrels a day this year, according to the federal Energy Information Administration.

.....

While the Federal Reserve's aggressive interest-rate easing cycle is aimed at stimulating the economy at a dangerous impasse, the oil market has taken its monetary policy cues squarely from the weak dollar. As fears gather that the rate cuts are leaving the U.S. economy extremely vulnerable to inflation, the rise in the price of oil is also seen by some as an early harbinger of those gathering price pressures, reminiscent of the commodity price spike in the early 1970s.

http://online.wsj.com/article/SB120872913572529541.html?mod=googlenews_wsj

[Tansy_Gold]

21. answer me these --

broad and highly simplified questions --

Oil price is high in dollars, because the dollar is weak, correct?

Part (not all, but part) of the dollar's weakness is caused by cash being poured into the system by the Fed?

Oil price in euros is stable?


China is flush with dollars because we buy so much stuff from them, correct?

China is buying oil at unprecedented rates of consumption, correct?


*IF* the above are correct, doesn't it stand to reason that oil prices will either remain stable or rise, but not drop simply because the U.S. economy is, pardon the pun, tanking? OPEC has at least one huge market to take the place of the U.S., don't they, and thus no real need to drop the price?

And it's therefore going to become incumbent (again, pardon the pun) on the U.S. to materially alter its economy -- from financial services to, well, something a bit more tangible -- or go down the drain?

Finally, isn't that kind of a shift going to require also a shift away from a speculative market back to an investment market, decreasing the enormous but very few pay-outs and increasing the smaller but more widely distributed dividends?

Just some idle Monday morning speculating, if you'll again pardon the pun, by


Tansy Gold

[54anickel]

33. Well the theory used go go something like this....

If the US tanks, we won't be buying cheap Chinese shit at Wal-Mart anymore, which would cause a huge slow-down in China, and erase all of the gains they've made in employing their massive population that keeps coming into the urban areas from the hills looking for work and prosperity. China's been biding their time, building a Chinese consumer group. They are attempting to mold something new, piecing together parts of a communist government with parts of a capitalist economy. You might call it the great Chinese experiment (weren't we once considered that?). At least that's how the discussion went a few years back. When you compare China today with China 5 years ago, you'd have to say they are making some great strides - slow but steady wins the race and all. Of course our being bogged down with that messy little war in the Mideast has given them quite an edge as well. They can and have pretty much ignored our demands to float their currency - hell, that's gone way beyond a dead horse topic, long buried. It's the big Mideast oil countries (mainly the Bush-friendly Sauds) that have stepped up to the plate to prop the buck now, since if we go down, so do they and they're in a war zone.

Meanwhile China forges on, slow and steady, filling oil and banking reserves....

[Tansy_Gold]

39. I'll see your theory and raise you a hypothesis. . . . .

Now, understand that this is all coming from my own personal twisted logic, not from any great academic study of The Markets.

I personally believe that the whole derivative market Ponzi scheme that lies at the bottom of this deep and dark well is going to crash; the sub-prime crash that appears to be the cause is in fact just a shift in blame by the real perpetrators: the ultra wealth and ultra greedy speculators. I don't think there's enough real money in the U.S. system to prop it up indefinitely, and there is no other way to keep it going.

Further, I think this Ponzi scheme has been well orchestrated by a small group of individuals, maybe a couple thousand, working in small groups and/or families not unlike feudal nobility.

Thirdly, I think it can be overturned. Not easily, mind you, and not without some figurative or literal bloodshed, but I do think it can be changed.

My hypothesis, therefore, is predicated on a massive electoral sweep in November, bringing in not only a Democratic White House administration but a filibuster-proof Senate.

My question, then, is could this theoretically, hypothetically, actually work?

If the hedge funds and derivatives markets are allowed to fail, meaning the gamblers actually are allowed to lose their bets, could a bail-out of the suckered institutions -- pension funds, legitimate investors -- be effected? In other words, is there enough money in the Fed to bail them out? And/or would it be possible to recapture any of the lost "investments" by confiscating -- through lawsuit/criminal action -- the real wealth converted by the speculators?

If the hedge funds that survive are then taxed -- or their managers are taxed -- at normal rates for income, would this add sufficient funds to the Treasury to help fund the pension fund/institutional investor bail-out?

If taxation of hedge fund managers puts them out of business -- "We need tax breaks as incentives to continue the business of 'making' all this paper money!" -- would this necessarily be a bad thing for the economy?

What incentives/programs could a new Administration offer to revitalize a real U.S. economy? Would major reforms to health care administration make a difference? Would a gradual elimination -- or even a massive traumatic elimination -- of the health insurance industry have a beneficial or detrimental effect on the economy, as you counter the massive layoffs with the cost savings and the universal availability of health care? Would the actual employment in health care -- nurses, doctors, etc. -- offset some of the insurance paper-pusher job losses?

What strategies can be employed to revitalize the U.S. manufacturing sector? Can shifts to "green" energy production -- other than biofuels as currently constituted -- offset other job losses? Can shifts to "green" energy counter the stranglehold of Mideast oil?

What would be the ultimate effects of a quick withdrawal from Iraq? Obviously the halt to massive Treasury bleeding would be one thing, as well as the emotional and physical trauma to the national well-being, but are there other results that we'd need to take a serious big-picture look at? Health care for veterans is certainly one thing, but can we change the social structure of the military industrial complex? Can we loosen its stranglehold on government-by-military?

Would an economic depression, with its concommitant decline in consumer spending, alter the national consumer mentality sufficiently to prevent such a thing happening again? What is the underlying foundation for the consumer, shop-'til-you-drop mentality and can we/should we attempt to alter that on a long-term basis? (Note to self -- How long after the "revolutions" did it take for the Russian and Chinese populace, rather than just the elites, to break away psychologically from a "peasant" ethic to a consumer one?)

I think it's going to take a coordinated effort on the part of a lot of different sciences to bring about any kind of meaningful change. And I think it's going to require a massive shock to the system before any change can be effected. I think those of us who are able to prepare for it and can weather it will come out on the other side stronger and in a better position than we are now relative to the existing economy, but I think it's going to be a very, very ugly and dangerous time in the near future.

How soon it comes and how long it lasts are beyond my capacity to imagine right now. But I think it's going to be sooner rather than later and longer rather than shorter.

Thinking too much,

Tansy Gold

[NMDemDist2]

40. when our $$ aren't worth chit, it will be cheaper to rev up our own

factories again (on a smaller scale) than import many goods.

if we can get back to a more localized base of production (saving the fuel costs of shipping half way around the globe) there is hope.

Alvin Toffler wrote a book back in the 70s called "The Third Wave" and it may be time to revisit some of his ideas IMO

[Tansy_Gold]

44. Sadly, I think we'll have to wait until it reaches that point

before we can even "prepare." In other words, ramping up any kind of mfg base prior to the crash won't work, because we still can't compete with the cheap crap from Everywhere Else.

TG

[InkAddict]

51. You've missed something very important..

Both sides of the aisle are complicit...neither side is interested in representing regular citizens except in such a way as it will benefit themselves and their "private" hypocracies. You can bet that the lobbyists will make sure Diogenes isn't gonna find what he's looking for anywhere in DC. Cynical and bitter, here!

[Tansy_Gold]

55. Also cynical and bitter, but just testing the strength of the

hypothesis as a means for heading off the train wreck.

Because actually, I tend to agree with you, in that NOTHING will happen until the train is off the tracks and upside down in Quail Springs Wash.

(That's where the Amtrak train derailed in AZ in 95. I've been out to the site several times, and considering the condition of the track -- you can literally pull the spikes out of the rails with one finger -- it's no wonder the wreck occurred, even without "sabotage." I often think of the U.S. economy as being in similar straits.)

TG

[Demeter]

58. Only If We Have a Massive Spine & Ethics Transplant Into the Government

and the odds of the country surviving that operation are not good. It's revolution, Baby, that you're talking. Just don't call it that, and people might be willing to go along.

[donkeyotay]

69. Tansy Gold for President. But wait, your platform includes actual change.

Wouldn't it be easier to just keep blaming the Left? I mean, like, you're saying Ponzi finance caused the problem and it should be changed. The Disease Industry Enterprises is killing us. Consumerism is an insufficient basis for society, and that bloated tick of a MIC is sapping our strength is the name of defense?

No, Tansy. Wrong. Wrong. Wrong. The problem is that the Left was too shrill. Really.

Giving up thinking for lint,

donkeyotay

[Demeter]

71. "Lint" is About All They'll Pay for Thinking, These Days

Pocket change without the change.

[donkeyotay]

72. I like it: pocket change without the change.

We should be able to make millions directing Tansy's campaign.

Lintheads for hope.
Change like you won't believe.
Is that a wad of lint in your pocket, or are you just glad to see me?

...:silly:

Maybe you'd better be in charge.

[AnneD]

75. Howz about this...

Bitter lint heads for change
Tansy 08

I think that covers the base....oh forget

Bitter gun totin' lint heads for change
Tansy 08

Big shoulder pads will come back in style cause the lapel pin won't fit otherwise.

I'm in. Count de Monee at your service.

[donkeyotay]

79. Lapel pins? Hell, we're going to need hubcaps

Frustrated anti-trade gun-totin' bitterly religious sentimental lint clingers against hope and change in 08 or ever.

“They get bitter, they cling to guns or religion or antipathy to people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations,” Barack Obama

[AnneD]

80. Hub caps are too expensive....

we gotta go with the tinfoil hats. The little streamer off the side can carry the political message (like a Hershey Kiss-a bitter Chocolate kiss).

[Hugin]

85. Haha! Here's mine!

:tinfoilhat:

[Demeter]

77. Muwahahahaha! I've Been Waiting All My Life For Somebody To Say That!

Not only pocket change without the change, but Bush wants to steal the pocket, too!

(There's still time to withdraw your suggestion)

[Tansy_Gold]

81. "Tansy Gold for President." It would be funny except that. . . .

. . . . I dunno when it was, maybe 2000 but certainly by 2004, I jokingly told some friends in an email group that I was going to run for president. I generated an AOL home page for my "campaign" and listed the planks in my platform.

It was, of course, meant as a joke, and yet there was something of a serious side to it, too. After all, what was to prevent someone, someone like me, from launching an Internet-based campaign for high public office? With no funds raised, no funds spent, with only word-of-cyber-mouth for a campaign, why not? Why not at least get some public notoriety for a truly progressive agenda?

Most of us in the group were -- and are -- of an age to remember the campaigns of comedian Pat Paulsen. We are also of an age to remember the idealism of the 60s and to wonder what happened to it. Of course, because we're all also women, most of us fell into the socially-constructed roles of wife and mother and helpmeet and employee and maid-of-all-work and chauffeur, and we watched as our companions in life fell into the socially-constructed roles of breadwinner and ass-kisser-because-the-bills-have-to-be-paid and leaky roof mender and clunker-car-fixer. We watched as the 60s faded into the 70s and morphed into the horrors of the 80s and the renewed hope of the 90s and the catastrophe of the 00s. And now the 60s have returned, but in the form of our ages, not the calendar, and we feel not only a sense of responsibility but a sense of desperation and even a sense of regret.

So I made up my little "Tansy Gold for President" page and we laughed and we knew it was a pipe dream because no one would pay attention, no one at all outside our tiny little group and even if anyone else did pay attention it would only be to laugh -- and then to forget.

At the same time, as campaign gave way to campaign, and our side continued to lose and wimp out and act like spineless maroons, we knew our personal ideals were more in synch with Dennis Kucinich and yet we had more personal resonance with John Edwards, but as women we felt a down to the bone sisterhood with Hillary, even though we all really knew that Obama would probably get the nomination. And we knew we'd vote for him willingly and eagerly, because not to do so was to vote for our own annihilation. And we feared a protracted primary and an intra-party battle that separate those of us who needed each other most, but we'd do our own personal damnedest to see that didn't turn us from the only path to survival.

In the end we tucked the "Tansy Gold for President" campaign all away because it was only a joke, and who needs jokes when there's a world to save from the destructive forces of the vast and evil right wing conspiracy, from war and starvation and global warming and global poverty. And no one ever talked about Kevin Kline and "Dave," or Robin Williams and "Man of the Year." We let Stephen Colbert be the silliness for 2008, not Tansy Gold.

And now, as I watch the economy crumble and I worry about what's really happening in Iraq that "they" aren't telling us about (see Tom Engelhardt at http://www.truthout.org/docs_2006/042108K.shtml), as I see my own fragile security eroded bit by bit each day, as I listen to my children voice their fears for themselves and their young children, then I start to wonder if maybe we on the left, we who are the radicals, we who are the children and then the grandchildren of those idealistic 60s, we who are not ashamed to call ourselves socialists, maybe we ought to have a candidate who speaks for us in a voice that will be heard if only because it is so "out there," so "radical," so "silly."

:shrug:

It took me half an hour to find it, because all the places I thought I'd saved it, well, they weren't the right places. My AOL campaign page is still there, not, of course, under the name Tansy Gold, although I have an AOL account in that name. No, it's under my real name which a few of you may know.

I'm not sure when I put it up, except that it had to be sometime before May 2003. It was probably before March 2003, too, because there's no direct mention of Iraq and the war the boooosh/cheeeeneys exploded upon it.

Other than that, it's pretty much the same platform I'd run on today.

If I were running.

And I were really



Tansy Gold

[AnneD]

86. OK Tansy....

While you may not consider yourself a 'president al hopeful'....I certainly think you should be in the WH press corp-maybe sitting next to Helen. The two of you have a way of asking the "good" questions. We need to get you internet blog press credentials.

[Tansy_Gold]

87. The idea of sitting next to Helen, or even in the same ROOM with Helen

gives me goosebumps!

:D

Catch you on the 4/22 thread.

[donkeyotay]

88. True, and well-spoken, again. Not entirely something to laugh about,

but if it's any comfort, I also have a presidential platform posted on the internet. I come to the SMW hoping to figure out how to protect my family. Sometimes, I get so tired of studying the disaster de jour, I just have to laugh at it all. Not because it's funny, but because sometimes that's all you can do when you are irrelevant. Sorry, if it was a sore spot. I sure did't mean to salt any wounds.

:hug:

[ozymandius]

6. Bank of England offers $100B plan to ease credit crisis

LONDON - The Bank of England on Monday announced a $100 billion plan to allow banks to swap mortgage-backed securities for Treasury bills.

The bank's aim is to unblock the interbank lending market, by giving banks assets they can use to operate, in hopes they will then resume lending more — and support the housing market and the overall British economy. Banks have become increasingly reluctant to lend to rivals in the wake of the global credit crunch.

The bank is offering the asset swaps for one year, but they will be renewable for up to three years. Only assets that existed at the end of last year will be eligible, the central bank said.

The risk of losses on the swapped assets will remain with the commercial banks, not the taxpayers, the Bank of England said.

http://news.yahoo.com/s/ap/20080421/ap_on_bi_ge/britain_credit_crisis

[fedsron2us]

36. Not quite the bail out the banks were hoping for.

They are being asked to take up to a 30% haircut on the value of their RMBS when they do their swaps.

This means they only get £70-80 of gilts for every £100 of securities and the BOE get to pocket the interest difference between the asset backed paper and the treasury stock.

http://www.bankofengland.co.uk/markets/money/marketnotice080421.pdf

Mervyn King still seems to be reading his Bagehot.

Needless to say the financial institutions in the City of London are already whining about the deal.

http://www.forbes.com/markets/2008/04/21/britain-banks-liquidity-markets-commodities-cx_vr_0421markets05.html

[ozymandius]

7. Investors eye more earnings this week in the stock market

NEW YORK - The stock market has reacted well to the recent stream of glum earnings. But this week, Wall Street faces an even bigger flood of first-quarter results, and as General Electric Co.'s bleak report earlier this month showed, bad earnings can even hurt a stock market with low expectations.

Out of the 30 components that make up the Dow Jones industrial average, Bank of America Corp., American Express Co., Merck & Co., McDonald's Corp., AT&T, DuPont, Boeing Co., 3M Co. and Microsoft Corp. will be reporting quarterly results this week.

Other big technology players besides Microsoft — notably Yahoo Inc. and Apple Inc. — are also scheduled to release earnings. So are toy makers Hasbro Inc. and Mattel Inc., homebuilder Pulte Homes Inc., and shipper UPS Inc.

Overall, Wall Street has been pleased with how companies fared during the first quarter. Their upbeat mood, however, is relative. After months of shocking news — financial institutions on the brink of failure, demand sapped in the credit markets, and declines in the nation's payrolls and discretionary spending — even poor earnings gave investors relief.

.....

Though sentiment on Wall Street is clearly better than it was earlier this year, the market can rise only so much due to mediocre news — no matter how much investors have already priced in a recession.

http://news.yahoo.com/s/ap/20080421/ap_on_bi_st_ma_re/wall_street_week_ahead

---

WTF? We heard how the market had "already priced in a recession" six months ago.

[ozymandius]

9. Wall St. braces for thousands of pink slips

NEW YORK (Reuters) - Citigroup Inc, Merrill Lynch & Co and Wachovia Corp this week announced 12,400 job cuts, and the number of pink slips is likely to rise as losses mount and the economy works its way out of its malaise.

So far this year, 36,000 job cuts have been announced in the U.S. financial services sector, according to job placement consultancy Challenger, Gray & Christmas, Inc. The figure does not include Citi's announcement on Friday to cut another 9,000 jobs.

.....

The cuts will have an oversized impact on New York City, whose fortunes are closely tied to Wall Street. Everything from Manhattan real estate prices to high-end restaurants and private car services could come under severe pressure, as highly paid investment bankers and traders face job losses.

http://www.reuters.com/article/ousiv/idUSN1827726720080419

[Demeter]

59. So, NOW It's a Depression, Right?

By definition: if you lose YOUR job, it's a recession, if I lose MINE....

[Hugin]

60. -checks watch-

No, not quite yet.

Although, I'm thinking your definition is right on track.

Edit to add: :hi:

[ozymandius]

11. U.S. Companies More Pessimistic About Outlook, Survey Says

April 21 (Bloomberg) -- U.S. companies grew more pessimistic in the first quarter as the intensifying credit crisis and slump in housing weakened sales, a private survey found.

A net 6 percent of firms said demand improved last quarter, down from 20 percent in the previous three months and the fewest since the 2001 recession, according to the National Association for Business Economics.

The report, which also shows more companies plan to slow hiring and investment this year, reinforces concern the economy is in, or may slide into, a recession. Deterioration in housing, employment and consumer spending led Federal Reserve policy makers to cut interest rates at the fastest pace in two decades.

.....

Less Profit

The combination of slower sales and soaring expenses for raw materials is taking a toll, the survey showed. For the first time since 2003, reports of falling profit margins outnumbered increases in the past three months. Almost two-thirds of the firms reported they paid more for raw materials in the first quarter, the most since 2004.

http://www.bloomberg.com/apps/news?pid=20601103&sid=afyTNDrETJcU&refer=us

[ozymandius]

12. Auction-Rate Market Shrinks (read: evaporates) by 18% as SEC, States Investigate

April 21 (Bloomberg) -- The U.S. auction-rate bond market is starting to disappear.

At least $58.9 billion, or 18 percent of the securities outstanding in January, have been redeemed or will be converted by states, cities, hospitals and closed-end mutual-funds, data compiled by Bloomberg show. Citigroup Inc. predicted last week that the $330 billion market, which started to unravel in February, will ``cease to exist.''

Borrowers are replacing bonds whose yields are set through periodic auctions after the market's collapse raised taxpayers' debt costs to as high as 20 percent, kept investors from selling their holdings and sparked probes by at least 10 states and the Securities and Exchange Commission. Municipalities from New York to California sold tax-exempt bonds during the past two months to refinance auction debt as investors took advantage of yields that rose to half a percentage point above taxable Treasuries.

.....

New York Attorney General Andrew Cuomo subpoenaed 18 banks and securities firms including UBS AG and Merrill Lynch & Co. in an investigation that may lead to criminal charges. Officials from nine other states formed a task force to determine whether brokers misrepresented the debt as an alternative to money- market investments when they sold it to individuals.

http://www.bloomberg.com/apps/news?pid=20601103&refer=us&sid=ac7LaZwDJAoM

---

Here they go again, socializing losses.

[ozymandius]

13. The trillion-dollar mortgage time bomb

NEW YORK (CNNMoney.com) -- Among the nightmares lurking around the corner for the already battered housing and credit markets would be a meltdown at mortgage financing giants Fannie Mae and Freddie Mac.

Although few are predicting an imminent need for a bailout just yet, credit rating agency Standard & Poor's recently placed an estimated price tag on this worst case scenario -- $420 billion to $1.1 trillion of taxpayer's money.

This dwarfs how much it cost to help banks during the savings and loan crisis of the late 1980's and early 1990's. That cost taxpayers about $250 billion in today's dollars.

S&P added that saving Fannie (FNM) and Freddie (FRE, Fortune 500) might cost so much that the federal government's AAA credit rating, the top possible rating, might even be at risk. If that was lost, then all federal government borrowing would become more expensive.

http://money.cnn.com/2008/04/21/news/economy/fannie_freddie/index.htm?postversion=2008042105

[Tansy_Gold]

23. Bailing out Fannie and Freddie??? Isn't that like, you know, bailing out

the gummint????

And wasn't their bail-out of the mortgage mess supposed to, um, fix everything? Does this mean that everything isn't, well, you know, like, fixed?

:sarcasm:

Am I allowed to say "WHAT FUCKING MORONS! Don't these people understand that the bail out the mortgage mess, you have to go to the root cause, which is people not making enough money to pay their mortgages! Giving the banks more money won't help, and giving the investment brokerages more money won't pay anyone's monthly PITI. And you're surprised that the whole thing isn't cleaned up by some magical white tornado?"

what a fucking bunch of idiots.



Tansy Gold

[DemReadingDU]

32. That is so logical!

But it's not logic running the banks and investment brokerages.


It's greed.

[ozymandius]

14. I hope today's number acrobatics are, at least, insightful.

...and good morning..

:donut: :donut: :donut:

If you gain any insight from market performance slight-of-hand, would you please share it with me? The rallies of late have left me baffled. Sure, earnings have been up for some companies like Google - but the devil in the details says that higher profits repatriated from overseas clients come from a declining dollar.

Why can't the investment cheerleading squads figure this one out? Go figure.

:hi:

[Roland99]

18. Chasing rainbows

Good news for global conglomos with a cheap dollar and then one day as the dollar recovers, good news on the domestic front.


It's all relative, see?


:eyes:

[Demeter]

78. I'd Say It Was a 3 Goose Day

And that's my insight for April 21.

[DemReadingDU]

15. Fleckenstein: The market's worst is yet to come

4/21/08 The market's worst is yet to come by Bill Fleckenstein

Now that a few Wall Street folks have finally dared to utter the word 'recession' aloud, most of the rest are assuming this downturn is practically over. Expect the bulls to stumble.

This week's Contrarian Chronicles focuses on the multitrillion-dollar question on Wall Street: Has the worst been seen, or is the worst yet to be seen?

The majority of market participants find themselves in the former camp (which, regular readers know, is not where I stand). They believe that because a handful of folks have now said the word "recession," it's nearly over. As a result, they say all the bad news we see is a function of what we "already know." Thus it has been discounted and should be ignored.

I believe folks in that camp never understood that the housing bubble was the economy, which is why they are now quite sanguine.

Listening to the speakers at a recent conference hosted by Grant's Interest Rate Observer, I found that some thoughtful people remain in the it's-going-to-get-better camp because it hasn't yet gotten all that bad. Perhaps they are right, but I don't think so.

I think the better arguments are made by those who understood what the unwinding of the credit bubble meant, who understood that it wasn't just subprime, who understood that it wasn't contained -- and, armed with that knowledge, realized the ramifications of that bubble's unwinding are quite large.

more...
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/TheMarketsWorstIsYetToCome.aspx

[TalkingDog]

24. Mindset: "I can't be out of money. I still have plenty of checks in my checkbook."

I don't think they are intentionally kiting checks. They just don't realize that owning, getting or giving any old piece of paper does not automatically give it value.

It's like those people you hear about who have been in horrific accidents at home. They are set on automatic pilot and the fact that they are bleeding out and in shock does not stop them from getting their lunch together or feeding the cat before they go out.

It's probably some kind of survival mechanism.


All I really want is for one of them to explain what is supposed to keep our economy going over the next few years.

The Spousal Unit says the County Govt. has put a hiring freeze on any new jobs for the entire county. And we're just North of Charlotte NC and one of the few places in the US where the economy here is still passing fair thanks to our bedroom community status.

We've been seeing a lot of trucks and cars from Texas and New York. People looking for work most likely.

What can you do, but feel sorry for them? If I won the lottery I'd start up an alternative energy R&D. But barring that, all I have to offer is sympathy.

[DemReadingDU]

31. This country needs a new industry employing hundreds of thousands

There used to be the manufacturing industry. All but gone.

Then there was the auto industry. All but gone.

Then there was the computer industry. All but gone.

The service industry with minimum wage jobs...going going


Perhaps an industry(s) researching alternative energy will be the next wave of the future. But for now, there just isn't any industry employing the masses to make decent wages to live the American Dream.

[Dr.Phool]

27. I know a woman, who was fairly well off, on paper.

Single mom, nice house in a desirable area. She had a good, well-paying job at Citbank. She lost her job in the first wave of layoffs. No problem, she thought she'd be rehired soon in another capacity. Just take the vacation and collect unemployment for a little while.

She started paying her bills, and keeping up her lifestyle using her home equity line of credit. No problem until they cut off her line of credit, and the layoffs keep coming. Now she's down to just credit cards and unemployment. No more equity in the house and a dead real estate market.

[DemReadingDU]

28. LIkely, she is not the only one caught in this spiral

It's going to get really ugly

[Roland99]

30. That's why I'm busting butt to build up a 2-3 month buffer of expenses.

When I was unemployed for several months I knew my standard of living was going to take a severe hit (was couple with divorce, too...wheee!)

But, knowing how the economy is anemic, at best, anyone who is in danger of losing a job or has lost a job and continues living the same lifestyle and, even worse, goes further into debt to maintain that lifestyle is just begging for hard fall. Losing a job means it's time to pound the pavement, beef up the resume, spread it around to agency after agency, cold call places, and scrimp on monthly costs as much as possible.

Hopefully she comes out of this ok, though.

[Roland99]

34. ignore

[AnneD]

43. Morning Marketeers....

:donut: and Lurkers. Isn't it funny Roland, how a brush with unemployment changes up your priorities. One of the things we do in medical field is triage emergencies (determine what to do first). Most of you are familiar with my talking about the baby steps to get out of debt:

$1000 emergency fund
Pay off all debt using the Debt Snowball
3 to 6 months of expenses in savings
Invest 15% of household income into Roth IRAs and pre-tax retirement
College funding for children
Pay off home early
Build wealth and give!
Invest in mutual funds and real estate

That is what one does in decent time, but if the storm has hit this is how you triage:

1 build your 4 walls-food, shelter(and utilities), clothing, transportation.
2 all severance money goes into emergency fund, you need a cushion
3 pay minimum on your credit cards: DO NOT USE YOUR CARDS as emergency fund
4 try to get out of car payments or leases. Get you a cheaper paid for vehicle.
5 if you can't find work-create your own... child care, yard work, tutoring
6 build positive cash flow-garage sales, selling what you don't use
7 learn the difference between a want and a need and cut mercilessly
8 do not cash in 401K-you loose up to 1/4 your money

These are basic guidelines created to preserve YOUR capital. looks like the pink snowstorm is hitting WS. The big boys can run their numbers racket all they want, but I am content to sit on the sidelines. In the words of that Sage of the Oklahoma Territory, Will Rodgers-the best way to double your monet is to fold it and put it in your pocket.

Happy hunting and watch out for the bears.

[InkAddict]

45. Know the signs of impending layoff

1) Increased credit card offers in your mailbox and/or agents/lenders looking for a listing/refi;
2) Brand new business cards you can pitch the week after delivery;
3) "Team-building" blow-outs at resorts; the last meal.
4) The free lunch from the boss and/or the "great job - take a half day"; same deal.
4) A few new Indian consultants in-house.

Roland99 - Two to three months won't cut it; some analyst somewhere has already figured out just how much they can suck out of your "security" and, let me tell you, they want it all. This crew enjoys economic torture until they get exactly what they want: layoff (until you're not quite dead financially); relief, rinse, lather, repeat. You can be as confident in your skills and have a lot of "great" interviews; in fact, they even say at your exit that it was one of the best interview sessions they've ever experienced...don't be flattered, keep looking, they have no spot for Americans who need work if the torturers objective has not yet been met. Don't be persuaded to start a 401(K)at the new gig; whatever you save will be subjected to the penalty next time around; when you are hired, don't use that healthcare - you might get yourself a pre-existing condition and a helpful maintenance script that is dangerous to halt; don't be flattered they start you off w/2 weeks vacation on the books - that's your severence at the other end and too bad for you if you actually need a respite for say, a family funeral OOT. The objective is not to pay less annually, but to escape benefit-paying and weasel away your assets until you succumb.

I am tempted to think this is not necessarily a GOP plan either, rather one devised by the other side to say, see, those *lover's are soooooooo evil.

BTW, I've never been a camper, what do I need besides a tent and sleeping bag?

[Hugin]

48. I didn't realize the movie...

"Office Space" was a docu-drama until recently.

But, IT'S ALL TRUE!

[Roland99]

54. Not to mention Boiler Room....

[Hugin]

56. I'll have to add that one to the local SMW 'Research Library'...

Yes, indeed. :)

[AnneD]

61. Bug spray....

or netting, matches, lamp. Watch out on Thursday and Friday too. If you can't log in to start-you've been laid off.

[DemReadingDU]

16. Schiff: The Collapse of America's Service Economy

4/18/08 The Collapse of America's Service Economy by Peter Schiff


Recent high profile bankruptcies of mainstay American retailers, such as The Sharper Image and Linens 'n Things, as well as the proposed mergers between Blockbuster/Circuit City and Delta/Northwest, and the admissions from the nation's leading student lenders that their business models are no longer viable, mark the beginning of a long overdue overhaul of the American economy. In short, the economy will be getting smaller and more expensive.

The success of all of these seemingly disparate sectors depends, to a large extent, on the ability of Americans to continue to borrow cheaply and easily. Now that home equity extractions and zero interest credit card rollovers can no longer be used to fund electronics purchases, vacations or tuition, those corresponding sectors are suffering. The foundation of our bloated service sector economy, supported by overseas savings and production, is now giving way.

This diminished capacity will result in a wave of bankruptcies and consolidations to restore profitability in what will become a much smaller service sector. The days of cheap consumer goods at Wal-Mart and cheap airfares at Jet Blue are coming to an end. It is all part of the process of an unprecedented decline in America's standard of living, which is the inevitable result of years of living beyond our means.

For retailers, the business model of selling cheap foreign imported goods to over- leveraged Americans was doomed from the start. It is fitting that just prior to the collapse, Wall Street private equity firms decided to jump aboard a sinking ship (Linens 'n Things was purchased by the Apollo Group for $1.3 billion back in 2006). No doubt the added debt subsequently piled on to the firm by the profit-squeezing buy out boys hastened the company's demise. As revenues decline and debt servicing costs rise for many retailers (who have been similarly hog-tied by private equity firms), look for additional blow-ups down the road.

As the dollar continues its historic decline, imported goods will become too costly for many Americans. In addition, more of those products still made (or more likely grown) here will be exported to wealthier foreign consumers whose appreciated currencies increase their purchasing power. As a result, fewer products will be available to fill our shelves and those that remain will carry much higher price tags.

more...
http://www.safehaven.com/article-10009.htm

[UpInArms]

17. dollar watch

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

Last trade 71.667 Change -0.247 (-0.34%)

Dollar: 1.60 Does Not Fall. Yet.

http://www.dailyfx.com/story/topheadline/Dollar__1_60_Does_Not_Fall__1208731674732.html

We wrote on Friday, that “The 1.60 figure remained tantalizingly out of reach for euro bulls for yet another day, as many option barriers at that level remained well protected. Having failed to break that level four times over the past few days, the EURUSD weakened in quiet overnight trade as bears tried to capitalize on lack on momentum and push the pair below the 1.5900 figure.”

Ironically enough, late week the market was looking for any vulnerability in EZ data assuming that US data would prove predictably dour. However, US economy registered several positive surprises last week with Empire Manufacturing and Industrial Production both printing far better than expected. The last possible argument of dollar bulls – namely that the weakness in the currency would fuel growth in US manufacturers offsetting some of the downward pressures in finance and housing sectors - turned out to have some merit and helped keep dollar from collapsing further.

Next week the US calendar is nearly barren with only Existing Home Sales and Durable Goods orders on the docket. The housing numbers are forecast to dip below the key 5MM annual run rate once again, but given the low expectations are not likely to have any meaningful impact on price action. The Durable Goods report will be of far greater interest to traders if the weak-dollar-will-help-manufacturers argument is to have any legs. Ultimately however, it is the EZ data that could hold sway next week. 1.60 hasn’t fallen yet, but it may be just a matter of time.



...more...

Will Dollar Strength Continue?

http://www.dailyfx.com/story/bio1/Will_Dollar_Strength_Continue__1208551342478.html

The US dollar has rallied significantly against the Japanese Yen and the Euro as risk appetite returns to the market. Since the beginning of the week, the Dow Jones Industrial Average has increased 600 points, leading many market participants to believe that a break above 13,000 is very possible. US earnings have been mixed, but stock market traders are simply happy that at least some companies are beating expectations. There have been no big misses like the one reported by General Electric at the end of last week and instead there have been nice upside surprises from companies like Google. This has been the primary reason why the dollar is higher and could be the reason why the dollar continues to rise in the coming week. The US economic calendar is relatively sparse with only housing and durable goods numbers due for release. Mortgage applications have rebounded and this suggests that sales of existing or new homes could have actually increased during the month of March. Given the lack of any major economic data to threaten the latest rebound in the US dollar, the rally could continue. However, we still believe that the medium term trend for the US dollar is down. With rice prices hitting $1000 a ton for the first time ever and oil prices breaking $117 a barrel, the pocketbooks of consumers are getting pinched by the day. It certainly doesn’t help that this is coming at a time when job security is a premium. Layoffs continue to build. This morning, Citigroup announced 9000 job cuts while earlier this week Merrill Lynch announced 4000 layoffs, matching the slashes at AT&T. This does not include potential layoffs by JPMorgan - Bear Stearns and Delta - Northwest. The US labor market is still in trouble and in a few weeks, this will come back to the haunt the US economy.

...more...

[UpInArms]

19. Bank of America's profit drops 77 percent in first quarter

http://news.yahoo.com/s/ap/20080421/ap_on_bi_ge/earns_bank_of_america

CHARLOTTE, N.C. - Bank of America Corp. said Monday its profit fell 77 percent in the first quarter, hurt by trading losses and a $3.3 billion increase in reserves for problem loans.

The Charlotte-based bank, which recently bought struggling mortgage lender Countrywide Financial, reported earnings of $1.21 billion, or 23 cents per share, on $17 billion in revenue.

Analysts on average expected a profit of 41 cents per share on revenue of $16.5 billion, according to Thomson Financial.

The bank's shares fell 67 cents to $37.89 in premarket trading.

"These results clearly did not meet our expectations," Chief Executive Ken Lewis said in a statement. "The weakness in the economy and prolonged disruptions in the capital markets took their toll.

<snip>

The company said it "remains concerned" about the health of the consumer.

...more at link...

[UpInArms]

20. Amid strong farm economy, some worry about increased debt

http://news.yahoo.com/s/ap/20080421/ap_on_bi_ge/farm_debt_concerns

DES MOINES, Iowa - At a time of record agricultural profits, concerns are mounting that American farmers could be edging toward a financial crisis not seen since the 1980s farm-economy collapse.

Soaring land values, increasing debt and a reliance on government subsidies for ethanol production have prompted economists to warn that what some describe as a golden age of agriculture could come to a sudden end. At risk are the livelihoods of thousands of farmers, the health of hundreds of banks and the vitality of an agricultural industry that has been one of the nation's few economic bright spots in recent months.

"We're in a very risky time, and yet we don't seem concerned about that risk nearly as much as we should be," said Barry L. Flinchbaugh, an agricultural economist at Kansas State University.

The potential problem, economists said, is that strong demand for corn and other grains has caused prices to reach historic highs. That has led to record farmland values and steadily increasing debt as farmers borrow money to buy more land, finance the higher costs of fertilizer and seed and upgrade their equipment.

As long as the demand remains, good times for farmers should continue. But if demand falls, they could find themselves in a situation reminiscent of the early 1980s when the farm economy largely crumbled.

...more...

[UpInArms]

22. Survey: 30 percent believe economy will shrink (70% eCONomists are still doing shuck/jive routine)

http://news.yahoo.com/s/ap/20080421/ap_on_bi_ge/economic_outlook

WASHINGTON - The odds the country will fall into its first recession since 2001 are rising sharply.

Thirty percent of economists now believe the economy will shrink in the first half of this year, up from 10 percent who thought this in January, according to a survey being released Monday by the National Association for Business Economics, known by its acronym NABE.

"That's a striking difference," said Ken Simonson, chief economist for the Associated General Contractors of America and the NABE's point person on the survey. The tone of the overall survey, he said, was "extremely gloomy."

Under one rough rule, if the economy contracts for six straight months it would be considered in a recession. Many economist and the public believe we are in one. Even Federal Reserve Chairman Ben Bernanke recently acknowledged, for the first time, that a recession is possible.

Forecasters "were notably downbeat about their own companies and the overall economy," Simonson said.

The majority of forecasters polled — 51 percent — thought the economic growth during the first half of this year would clock in between zero and 1 percent, which would still mark a feeble showing. Sixteen percent pegged growth in the first half at between 1 and 2 percent, while only three percent put it at between 2 and 3 percent. No forecaster believed growth during this period would exceed 3 percent.

...more...

[DemReadingDU]

26. Roubini: The worst is ahead of us rather than behind us

4/20/08 The worst is ahead of us rather than behind us in terms of the housing recession and its economic and financial implications by Nouriel Roubini

How bad is the US housing recession and are we close to its bottom? In recent interviews and remarks I have argued that the worst is ahead of us rather than behind us for housing, the real economy and the losses in financial markets.

The blogger Calculated Risk has certainly provided, by far, the best coverage of the US housing recession; a most excellent blog. This week he first linked to the Canadian TV interview where I expressed my concerns about the consequences of the US housing slump; he next provided three arguments on why he is not as pessimistic as me about this housing recession and its economy-wide and financial implications. His three arguments go as follows: first, by now housing starts have fallen as much as new home sales; so we are close to the point where the excess supply of new homes is reaching its peak. Second, he argues that, in California if the borrower has refinanced the mortgage is a recourse loan and the lender can pursue a deficiency judgment; so the number of folks who will walk away is more limited. Third, he argues that losses for banks from the credit crisis may be less than my estimate of $1 trillion.

There is certainly some uncertainty on each one of the issues that Calculated Risk has highlighted. Let me provide some additional details for the pessimistic case…

lots more...
http://www.rgemonitor.com/blog/roubini/252512/


4/20/08 Calculated Risk responds to Roubini...

On Friday I posted a video of an interview of Professor Roubini on Canadian TV. It is well worth watching.

On Saturday, I posted a few comments on why I thought Professor Roubini might be a little too pessimistic. I gave three reasons: 1) I believe starts of single family homes built for sale has finally fallen below the current level of new home sales (note: I'll have more on the housing starts vs. new home sales issue soon.) 2) I think we may be a little further along in the write down process than Roubini, and 3) I felt Roubini might be overestimating the number of homeowners that "walk away'.

Clearly we agree on more points than we disagree, and I hold Professor Roubini in the highest regard (for those that don't know, Roubini is very well respected among his peers).

more...
http://calculatedrisk.blogspot.com/2008/04/roubini-worst-is-ahead-of-us.html



These two have been going back and forth for the past week. The 2 postings include links to more links and videos too. Lots more than I have the time for, but posting for others who may enjoy their discussions.

[fedsron2us]

38. I will second your recommendation

Both Roubini and the Calculated Risk blog are must reads, particularly for those who want to understand the impact of the unravelling of the US property market.

[Roland99]

35. Fed auctioning $50 billion in 28-day-credit to banks

http://www.marketwatch.com/news/story/fed-auctioning-50-billion-28-day-credit/story.aspx?guid=%7B3BA4D5D8%2DF25B%2D4FA1%2DBE91%2D68E6D5B5DA98%7D&dist=hplatest

Looking to alleviate liquidity problems in global financial markets, the Federal Reserve on Monday is offering $50 billion in 28-day-credit through its term auction facility. Monday's auction is the second of two special auctions in April that aim to support banks. Notification to winners is Tuesday, and settlement is on Thursday. In the prior auction, there were 79 bidders, with a total of $92 billion in proposals.

[mdmc]

41. This year I am eligable for my companies 'retirement' plan

It is through TIAA CRFT (I think).
My employer puts in 1%. I must put in 1%, but I can put in as much as 5%.

What should I do. I think I could afford 5%. Should I?

[w8liftinglady]

42. as a newbie,explain this to me-things suck,but not as bad..stocks soar!

what am I not getting?

[Hugin]

46. See: Ponzi Scheme

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

"A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns ("profits") to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business. It is named after Charles Ponzi."

"The system is doomed to collapse because there are little or no underlying earnings from the money received by the promoter. However, the scheme is often interrupted by legal authorities before it collapses, because a Ponzi scheme is suspected and/or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases."

_______________________________________________________________________________________

Oh, and unless your name is one of those mentioned making Billions off of this mess. You're one of the "Subsequent
Investor Class". ;)

[Zynx]

47. Okay, I will use a simplified example.

Let's say a stock is trading at $100 a share and the company is currently earning $10 a share.

A recession hits and the company reduces its forecast to $5 a share earnings. All other things held constant, the stock will drop to $50*. However, when the company actually announces its earnings it turns out that it will earn $6 a share in earnings so the stock rallies from the surprise to $60 a share, a 20% increase from its most recent price, but still down 40%.

*I am assuming a constant ratio of price to earnings, which rarely happens. In a similar case the stock usually declines far less than earnings if there is an expectation the earnings will recover at some point.

[Hugin]

49. Either that or the price increases as the smart money pulls out...

I've seen that happen many times.

They sell their stock which naturally causes the price of that stock to increase on the short term.

[bain_sidhe]

65. Interesting illustration for this...

From one of Kevin Phillips' books (Wealth and Democracy) with the corresponding periods outlined in red, since the graphs are on different time scales. Still, it's pretty clear that the "insiders" dumped their stocks into ordinary Americans' portfolios.

[Hugin]

66. I wasn't going to use the...

"Insider" word, bain_sidhe.

But, since you did, often that's exactly what is happening. Sometimes, however, the price increases are seen
during so-called Stock Buy-back programs. Which do serve a useful purpose for a Company and does somewhat
protect the value of the stocks it's shareholders own.

You've got some great charts there... Very illustrative.

[bain_sidhe]

68. I used it 'cause Phillips did

But, yeah, company stock buy backs were probably part of that equation.

Now I'm off to buy the new Phillips book! (Barnes & Noble has a monthly 15% off coupon it sends by email every month, and it's been burning a hole in my ... well inbox.)

Plus, it's grocery day. I am SO looking forward to seeing what's gone up in price since the last time!

:sarcasm: (In case anybody wasn't sure)

**edit: close parenthesis, damn it**

[Demeter]

62. Too many choices may not be good

http://www.26econ.com/too-many-choices-may-not-be-good/#comment-6136

A common assumption in economics is that people are not made worse off by having more choices. Adding a choice gives people another option which they can choose if they like better than the existing options, or reject if they don’t. Thus another option should be (at least weakly) beneficial.

However, Physorg reports on a recent series of experiments which showed that having to make complicated choices can worsen people’s performance in subsequent tasks. For example, in experiments, people who had to make choices among many options performed worse, on average, on subsequent math tests compared to people who made simpler choices prior to the math tests.

If true, it seems that people’s concentration is also a scarce resource. Making a complicated choice uses some of this up, so less is available for subsequent thinking. Obviously at some point the resource is replenished, by resting or sleeping I guess. There are some interesting implications for businesses in terms of product design, e.g. having a smaller product range with less variety may be preferable to broad range with lots of choices.


COMMENTS FOLLOWING ARE VERY GOOD! CALL ME A STICK-IN-THE-MUD, BUT I THINK TOO MUCH CHOICE IS FALSE CHOICE, 'CAUSE YOU NEVER GET WHAT YOU REALLY WANT!

[Hugin]

64. I would guess that the types of choices also vary in their impact on concentration...

Let's say... An Aesthetic (color) choice vs. a Functional (capability) choice.

Hmm... Good find Demeter, I shall ponder this.

[TalkingDog]

67. Scarce concentration: A practical example. Try this at home!!!

The next time you want to throw somebody off their game, tell them you can prevent them from climbing a flight of stairs if they agree to the condition of answering a simple question. (betting is allowed if legal in your state)

Go to said stairs and as they start climbing, ask them what 23 x 14 is. (or any multiplication of 2 digit numbers). I haven't run across anyone able to do both at the same time.

That's what a blind panic is all about. You don't think, you just run.....


As for false choices, you are exactly correct. We don't really have every option we want. Just the ones they offer us. That, by any means, is not a true choice.

I hope you all are doing well.

[DemReadingDU]

70. That's difficult

That's difficult even without climbing stairs. Where's my calculator?!?!


BTW, How is Mr. Spot after the run-in with the coyote?

[TalkingDog]

73. An "honorable" scar on the muzzle. (allowed in the dog show reg.s)

No, he's not a show dog, but I've always loved that caveat for hunting dogs.....scarring is allowed as long as it is "honorable" scarring. Don't know what constitutes honorable, but we'll pretend he was defending me rather than being a putz.

He was stiff that day, but I loaded him up with medicinal herbs for bacterial infection and stiffness and the next day he was good to go.

As for Missy Coyote, I called the States Wildlife Biologist for our region and he agreed with my surmise that it's probably a female with a den of pups. It's that time of year. He said she might move on after the pups have been weaned.

I haven't seen her directly again, but have seen many smallish white scats around the same area. White scat comes from eating raw bones. So, a medium sized meat eater that has enough jaw force to crack a raw bone; probably her. If you find those white scats, put them in the compost for your non-food plants. Lots of calcium.

And I've smelled her a couple of times on the evening breeze.

Mr. Spot got covered in her scent during their tussle and it's quite distinctive and *coff* aromatic. Out here it's easy to pick up deer scent, skunk (natch) and now I've got a new one...coyote.

[DemReadingDU]

82. Sounds like Mr.Spot is being well taken care of

and is mending nicely. One of my sisters is into herbs, vitamins and other special treatments. Many times we heal quicker and fewer side effects than with prescription drugs.


I don't think I'm aware of a coyote fragrance. Skunks occasionally roam our neighborhood though. P.U.

[Warpy]

74. You're correct, of course

Take the supermarket as an example. There is a dizzying array of products on the shelves, all with different packaging. If we narrowed the stock down to one brand of, say, shredded wheat cereal, one brand of trans fat adulterated peanut butter, one brand of balloon bread, and one brand of every other foodstuff (after getting customers to vote on their favorites, of course) the store could be a quarter its size and shopping trips would be over in a quarter of the time it now takes. Staff would be reduced because fewer would have to put out stock and face up the shelves.

All the choice out there now is an illusion. Choosing among ten packages of the same contents is a false choice. Having to do this over and over again is an exhausting proposition for a lot of us.

[Karenina]

76. What I find even more exasperating

are the differences in price, often significant, for the same product at different stores over a large range of items.

[Demeter]

63. Is the 2007 U.S. Sub-Prime Financial Crisis So Different? An International

mASSIVE pdf FILE at link---


http://www.economics.harvard.edu/faculty/rogoff/files/Is_The_US_Subprime_Crisis_So_Different.pdf

[ozymandius]

83. Let's get some rest. Here's the close.

Dow 12,825.02 Down 24.34 (0.19%)
Nasdaq 2,408.04 Up 5.07 (0.21%)
S&P 500 1,388.17 Down 2.16 (0.16%)
10-Yr Bond 3.7120% Down 0.0310
NYSE Volume 3,422,844,250
Nasdaq Volume 1,650,265,380

16:10 ET
Financials Keep S&P 500 in the Red
Dow -24.34 at 12825.02, Nasdaq +5.07 at 2408.04, S&P -2.16 at 1388.17

The stock market posted a slight loss on Monday. The end results are actually pretty good considering the scope of last week’s gains. Weakness in the financials was mostly offset by strength in tech and energy companies.

A worse than expected earnings report from Bank of America (BAC 37.61, -0.95) spurred profit-taking within the financial sector early in the morning. The nation’s second largest bank by asset size, behind Citigroup (C 25.03, -0.08), Bank of America announced it earned $0.23 per share, which fell well short of the expected earnings of $0.41. The firm incurred $1.3 billion in trading losses, and increased its loan loss reserve by $3.3 billion.

Fellow struggling bank National City (NCC 6.01, -2.32) announced a plan to shore up its balance sheet that includes raising $7 billion capital and cutting its dividend to just one penny per share from $0.21. The majority of the capital will come from a common stock offering priced at $5 per share -- a 40% discount from last Friday’s closing price of $8.33 per share. The regional bank also announced it lost $0.27 per share in the first quarter, compared to the expected profit of $0.31. The unexpected loss and the dilutive nature of the capital offering caused shares to tumble 28%.

As a whole, earnings reports were mixed. Merck (MRK 39.63, -0.13), Halliburton (HAL 47.53, +0.10), Weatherford (WFT 84.41, -1.14) and Hasbro (HAS 34.69, +3.14) all beat estimates. Eli Lilly (LLY 49.61, -2.46) and Mattel (MAT 20.04, -1.74) reported earnings that fell short of estimates.

Five of the ten sectors closed in negative territory, led by weakness in financials (-1.7%). Strength in tech (+0.8%) helped offset weakness in the financial sector. Apple (AAPL 168.16, +7.12) had a strong showing after RBC Capital Markets raised its price target on shares of Apple to $190 from $175. The firm expects Apple to top earnings estimates when it reports on Wednesday.

The energy sector (+0.9%) also gave the broader market a boost, as crude oil settled at an all-time closing high of $117.48 per barrel and hit an all-time intraday high of $117.76 on reports of supply disruptions.

At the same time, the dollar (-0.54%) came under some selling pressure, with the euro gaining 1.08%. A European Central Bank official noted European inflation significantly exceeds the tolerance level.

The market will have another barrage of earnings reports to sift through before the open on Tuesday. A total of 100 companies are confirmed to report, including Dow components AT&T (T 37.59, +0.08), DuPont (52.25, +0.23) and McDonald’s (MCD 58.67, +0.37). On the economic front, the March existing home sales reading will be released at 10:00 AM ET.