STOCK MARKET WATCH, Tuesday June 10

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday June 10, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 225
DAYS SINCE DEMOCRACY DIED (12/12/00) 2697 DAYS
WHERE'S OSAMA BIN-LADEN? 2422 DAYS
DAYS SINCE ENRON COLLAPSE = 2713
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 June 9, 2008

Dow... 12,280.32 +70.51 (+0.58%)
Nasdaq... 2,459.46 -15.10 (-0.61%)
S&P 500... 1,361.76 +1.08 (+0.08%)
Gold future... 898.10 -0.90 (-0.10%)
30-Year Bond 4.62% -0.03 (-0.62%)
10-Yr Bond... 3.99% +0.05 (+1.37%)






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: The Science of Scape-Goating

BY ROB KIRBY

Economics is often referred to as the ‘Dismal Science.’ The moniker is alleged to have originated in the nineteenth century when historian Thomas Carlyle responded to the writings of The Reverend Thomas Robert Malthus, who had grimly predicted that starvation would result as projected global population growth exceeded the rate of increase in the food supply.

For the past one hundred and fifty years, give-or-take, the mainstream has scoffed at Multhus and his dire predictions; but to be honest, I’m now wondering if he might have simply been early with his call.

For the past one hundred and fifty years, give-or-take, the mainstream has scoffed at Multhus and his dire predictions; but to be honest, I’m now wondering if he might have simply been early with his call.

.....

If you believe the yeomen’s work of John Williams of Shadow Gov’t Stats – this helps explain how we get bogus inflation reports from officialdom in the 2% range when, in reality, it is running “double-digits.”

Historically, bond vigilantes would have spotted the ruse and sold bonds raising rates of interest to levels commensurate with real inflation rates at 10% plus the historic premium of 250 points or 12 – 14% nominal market rates.

If you’re wondering where the bond vigilantes have gone:

They have all lost their jobs. Long ago, the last of the true bond vigilantes sold bonds – intuitively correct I would argue – not realizing that J.P. Morgan’s Swap Book was a “black hole” of stealth artificial demand. They lost their shirts along with their jobs.

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

[ozymandius]

2. Today's Report

08:30 Trade Balance Apr
Briefing.com -$58.0B
Consensus -$60.0B
Prior -$58.2B

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

[UpInArms]

41. U.S. April trade deficit widens to $60.9 bln on record oil prices

01. U.S. April trade deficit widens to $60.9 bln
8:33 AM ET, Jun 10, 2008

02. U.S. April trade deficit widens on record oil prices
8:33 AM ET, Jun 10, 2008

[UpInArms]

47. U.S. trade deficit widens in April

http://www.marketwatch.com/news/story/us-trade-deficit-widens-april/story.aspx?guid=%7B847896C1%2D231A%2D4DC5%2DA101%2D73539E4F78A3%7D

WASHINGTON (MarketWatch) -- The U.S. trade deficit widened to $60.9 billion in April behind higher prices for crude oil and other commodities, the Commerce Department reported Tuesday. Imports rose 4.5% to $216.4 billion, while exports increased 3.3% to $155.5 billion. Excluding the impact of inflation, the real trade deficit slipped by 0.1% to the lowest level in nearly five years.

[ozymandius]

3. Oil slips in Asia, falling $4.19 to $134.35/barrel

KUALA LUMPUR, Malaysia - Oil slipped in Asia on Tuesday, but traders saying prices could climb higher amid concerns over supplies, growing global demand and other geopolitical issues.

Crude futures pulled back Monday from last week's record highs, falling $4.19 to $134.35 a barrel on the New York Mercantile Exchange, after the dollar strengthened and Saudi Arabia voiced willingness to meet any increase in demand.

Late Tuesday afternoon in Singapore, light, sweet crude for July delivery was down 31 cents at $134.04 a barrel. Earlier, it rose above $135.

"The market is taking a breather after the very sharp gain last week but it's undeniable we have a strong uptrend in the oil markets. The market is still prone to further price spike," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

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

[ozymandius]

4. Energy Agency cuts oil demand forecasts

PARIS - The International Energy Agency lowered its forecast for global oil demand this year amid surging prices, but said Tuesday that global hunger for oil is knocking markets out of kilter.

"Supply growth so far this year has been poor and higher prices are needed to choke off demand to balance the market," the Paris-based watchdog said in a monthly report.

The agency predicted global oil product demand in 2008 to grow by 0.9 percent, or 800,000 barrels a day, down from the 1.2 percent, or 1 million barrels, forecast earlier.

The change follows decisions by several developing countries to reduce fuel subsidies because of high oil prices. The agency has also made upward revisions to its 2006 and 2007 data.

The agency lowered its 2008 global demand forecast to 86.8 million barrels a day, down 80,000 barrels from last month. The agency has been steadily lowering its demand predictions for the past several months as oil climbs repeatedly into record territory.

http://news.yahoo.com/s/ap/20080610/ap_on_bi_ge/iea_oil_forecast_1

[ozymandius]

5. Gasoline pump price relief nowhere in sight

WASHINGTON (Reuters) - Average U.S. gasoline pump prices -- already above $4 a gallon -- could run up 20 cents or more by mid-summer, if crude oil prices don't fall from record levels near $140 a barrel, analysts said.

Gasoline prices are up almost $1 from a year ago, heaping pressure on a U.S. economy beleaguered by falling home values, a sagging dollar and an anemic job market. Oil prices have risen six-fold in the past six years and are up 40 percent since January.

For the first time ever, average retail U.S. pump prices tracked by the Energy Information Administration rose above $4 a gallon on Monday to average $4.04, up 96 cents from a year ago. California prices averaged $4.43 a gallon.

.....

Oil prices could top $150 a barrel by July 4, one of the busiest U.S. travel holidays, as strong demand in Asia triggers a slowdown in shipments of crude to the United States, investment bank Morgan Stanley said last week.

A $150 oil price would equate to about $4.50 a gallon for gasoline, if refinery profit margins hold steady, according to Tancred Lidderdale, an analyst with the federal Energy Information Administration.

http://news.yahoo.com/s/nm/20080609/bs_nm/usa_gasoline_price_dc

[ozymandius]

27. When Buying a Gas Guzzler Makes Sense (*cough*)

The gasoline-price-induced collapse of the sport-utility-vehicle market presents a quandary for consumers. With gas at $4 a gallon, SUVs no longer make affordable commuter vehicles. But at the same time, they've never been cheaper.

Manufacturers are offering between $2,000 and $5,000 in discounts on once strong-selling models like the Ford Explorer and Chevrolet Suburban, and dealers say there's plenty of negotiating room after that. Discounting is even heavier on used vehicles, with some selling at roughly one-third the price they would have fetched new four years ago.

The bottom line is that, for people who don't drive much, today's deeply discounted SUVs may actually make financial sense.

http://finance.yahoo.com/loans/article/105216/When-Buying-a-Gas-Guzzler-Makes-Sense

The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.

- John Kenneth Galbraith

[trogdor]

70. Good time to buy a truck - if you actually need one.

It might also be a good time to start a truck rental business. You don't need a truck every day, but it would be nice to be able to rent one at a reasonable price on the rare occasions when you do.

[Demeter]

78. Especially if Living In Your Car is a Real Possibility

Elbow room and hauling capacity.

[UpInArms]

40. July crude up $3.25 at $137.60 a barrel on Nymex

06. July crude up $3.25 at $137.60 a barrel on Nymex
8:14 AM ET, Jun 10, 2008

[ozymandius]

55. Holy jumping beans Batman!

Could it be that no one believes Bernanke is a born-again inflation hawk?

[ozymandius]

6. Futures drop after Bernanke inflation warning

(Reuters) - Dow Jones futures were down 0.7 percent at 5:23 a.m. EDT, while S&P 500 futures were down 0.9 percent and Nasdaq futures were down 1 percent.

http://news.yahoo.com/s/nm/20080610/bs_nm/markets_stocks_dc

[ozymandius]

8. Inflation fears hound Wall Street

.....

Bernanke: The Fed chairman said in a speech Monday night that inflation has remained high and that the central bank would "strongly resist an erosion of longer-term inflation expectations." The comments unnerved investors as they bet that the Fed would raise rates sooner than expected.

A recent jump in the unemployment rate had led some to lower their rate hike expectations, but Bernanke said in his speech that the danger that the economy has fallen into a "substantial downturn" appears to have eased.

http://money.cnn.com/2008/06/10/markets/stockswatch/

[burf]

13. Imagine what the futures

would be if the true inflation and unemployment numbers were being reported.

[ozymandius]

16. Efforts will be made to hide this data anymore come Jan '09.

It will be hard to blame the new administration. Curbs have been removed from the fail-safe system. So the shock of actual numbers would burn down Wall Street.

[RUMMYisFROSTED]

64. Double digits both.

[TalkingDog]

17. Bernanke: Danger of 'substantial downturn' faded

cites mysterious "force" as deus ex machina which saves the economy from collapse

http://money.cnn.com/2008/06/09/news/economy/bernanke_economy.ap/index.htm?postversion=2008060922


Addressing a Fed conference in Chatham, Mass., on Monday night, Bernanke said a government report last week showing the unemployment rate rising from 5 percent in April to 5.5 percent in May - the biggest one-month jump in two decades - was "unwelcome." However, the Fed chief said other forces should "provide some offset to the headwinds that still face the economy."

The Fed's powerful doses of interest rate cuts, the government's $168 billion stimulus package, further progress in the repair of problems in financial and credit markets, a gradual ebbing of the drag from the deep housing slump and still solid demand from abroad for U.S. exports should help the economy over the remainder of this year, he said.

Although economic activity is "likely to be weak" during the current April-to-June quarter, Bernanke said "the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so."

snip:

However, Bernanke said, "Recent incoming data, taken as a whole, have affected the outlook for economic activity and employment only modestly."

[ozymandius]

19. The preacher preaches and the choir responds.

"Hallelujah! Our asses are saved!"

Except for this one little snag (and the fact that the preceding data has been dumbed-down):

Fed, 17 Banks Agree on Credit-Default Swaps Changes (Update1)

June 9 (Bloomberg) -- Regulators and 17 banks that handle about 90 percent of the trading in credit-default swaps agreed to changes aimed at easing the risk of a collapse of the $62 trillion market, the Federal Reserve Bank of New York said.

Morgan Stanley, Deutsche Bank AG and Goldman Sachs Group Inc. are among the banks creating a system to move trades through a clearinghouse that would absorb a failure by one of the market- makers, the New York Fed said today in a statement following a meeting with the firms.

The central counterparty, more automated trading and settlement and other fixes ``will help improve the system's ability to manage the consequence of failure by a major institution, and we expect to make meaningful progress over the next six months,'' New York Fed President Timothy Geithner said in a speech to the Economic Club of New York.

Concerns that the market could fail erupted in March when Bear Stearns Cos., then the fifth-biggest U.S. securities firm, faced a cash squeeze. The central bank agreed to back an emergency sale of Bear to JPMorgan Chase & Co. in part because of the systemic losses that would have resulted if the firm had filed for bankruptcy, Geithner said today.

hat-tip to Joanne98

[InkAddict]

58. This seems HUGE!

Who sets the value of these agreements? The buyers, sellers, the regulators, or all of them colluding together? Does the Fed make up the difference in the agreed value in newly printed cash and then deliver it via armored vehicle to the banks fed accounts or just "magic money"? So, they agree on $2 and the Fed says that's not big enough, make it 10 and we'll print some off for ya'll and you don't even need to provide proof this is a legit transaction with at least some REAL assets, urp, nausea beginning-restated debts,:puke:, behind the agreement?

I don't get it. Won't this fuel more speculation by condoning and assigning validity to these bogus ass-et-/debt instruments? and what about diluting the value of the dollar?

[InkAddict]

65. This is how they "fix" the speculation?

The group will reduce the volume of outstanding contracts through multilateral trade terminations. They also agreed to extend the changes in credit-default swaps to other derivatives contracts backed by equities, interest rates, currencies and commodities

emphasis mine

See #59?

[janetblond]

20. Hanging on till January ...

Ben & Co. can keep this above water till shrub's term is almost up.
Unfortunately, all this will fall on the "presumptive nominee's" lap.

[burf]

31. Then the comparison

to Jimmy Carter will be the topic du jo ur.

[janetblond]

49. Obama needs some more advisers ... a good comeback would've been ..

YES!! I'd like to be Jimmy Carter's second term.
It would be better than bush's 3rd time.
$20/barrel vs. $140/barrel.
You do the math and make your choice.

These are no brainers.
Obama doesn't respond.
tsk tsk ...
His advisors are s-l-o-w ...

Same with the Iraq comment:
McCain: You (Obama) should go to Iraq. You havent' been there since 2006.
Obama: I'm not interested in hanging out in Iraq. I'm trying to get us OUT of Iraq as fast as possible.

Again .. Obama has poor advisors ... or maybe he's just a nice guy .. not used to being mean on his feet.

[DemReadingDU]

67. And when asked about the flag lapel pin

Obama might have reflected:

“Our economy is collapsing, hundreds of thousands of our citizens are losing their homes, our Constitution has been shredded, 4,000 of our soldiers are dead in Iraq along with a million innocent Iraqis, and you are asking me about lapel pins? Which, by the way, I notice than no one at this table is wearing...”

5/13/08 Some Unsolicited Advice for Barack Obama by Ernest Partridge
more...
http://www.crisispapers.org/essays8p/advice.htm

[Tansy_Gold]

69. Jimmy Carter's second term

I got no problem with a second term for Jimmy Carter.



Reliance on imported oil went DOWN during Carter's administration.
Energy efficiency -- houses, cars, appliances -- went UP during Carter's administration.

People might not have liked being forced -- yes, forced -- to alter their lifestyles, be more conservationist (as opposed to conservative) but they did it.

What clinched Carter's downfall was Iran, and much of that was manipulated by Reagan's machine. (I won't give Reagan himself credit for anything; he was nothing but a lousy actor set up as the front man for the neo-cons). The U.S. military was weakened by decades in Vietnam and a popular sentiment that had grown weary of a fat military budget and a draft, NOT by Carter's policies alone.

Read Kevin Phillips.



Tansy Gold

[Demeter]

79. People Are Being Forced to Alter Their Lifestyles As We Speak

Just not the right people (imagine Cheney in stripes, or orange jumpsuit...)

[burf]

82. But the problem is

the number of people who believe the neocon spin championed by the likes of Limbaugh and Hannity. They would have us believe that history began when Carter took office. But how much of the trouble started when Nixon messed with the gold standard? As far as Reagan how much of his economic growth was based on deficit spending. Two questions I always ask are : What was the national debt when Reagan started versus when he left office? And: What was the number of Federal employees when Reagan started versus when he finished? So much for the economic growth and small government. But he made good speeches that of course were written by other people.

[UpInArms]

26. BlackRock's Doll says Fed on hold for now (Chopper Ben shooting blanks)

http://news.yahoo.com/s/nm/20080610/bs_nm/blackrock_dc

HONG KONG (Reuters) - One of the biggest U.S. money managers said on Tuesday the Federal Reserve was unlikely to raise interest rates despite surging oil prices until the U.S. economy shows more signs of stabilization.

"We don't think the Fed will be raising interest rates anytime soon," said Bob Doll, chief investment officer for equities and also vice chairman of BlackRock (BLK.N), which managed $1.36 trillion in assets at the end of March.

"The Fed is on hold for the indefinite future," Doll said during a Hong Kong news conference.

He added that recent comments from Fed Chairman Ben Bernanke were meant to signal to investors the U.S. central bank is well aware of the inflationary effects of the weak dollar, not to flag an imminent increase in its benchmark interest rate.

Candid comments about the risk of higher inflation from the weak dollar and high oil prices last week and on Tuesday from Bernanke have roiled financial markets, particularly since they came amid data showing the biggest jump in U.S. unemployment in 22 years.

The Fed has cut its fed funds rate seven times since mid-September 2007 for a cumulative 325 basis points.

...more...

[Loge23]

30. Bernanke passes the graveyard

I originally posted this late late night on Monday's SW, please forgive if you already read it.
I have gotten uncomfortably used to the statements out of Washington the past seven years. Clearly, nothing is as they say.
But yesterdays pronouncement from Fed Chair Bernanke is either shamefully deceitful or blissfully ignorant of what's really happening in America these days.
In case you missed it, here's one bon mot from the de facto CFO of the USA: Bernanke said “the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”
He said this today, Monday June 9, 2008.

Now nothing would cheer me up more than if this were true, but at least in my corner of the world, SE FL, I don't see anything even close to this. It appears to me that we're still falling and falling fast. But what do I know? I only live here.

...and what was he whistling anyway? "Happy Days Are Here Again"?

http://www.msnbc.msn.com/id/25068662/

[UpInArms]

35. I wish I could offer more comfort than your own knowledge and wisdom

in recognizing a liar when you see one.

:hi:

[ozymandius]

36. I read that Loge23.

It's a very good description of what many feel is happening now. Chopper Ben is trying to be a cryptic as Greenscam was while effusing his speeches with enough happy talk to hide outright panic. How does this talk make any sense if Bernanke & Co. (of 17 huge banks) are taking measures to insulate themselves from a $62 Trillion meltdown in the credit-default swap market?

[ozymandius]

7. Inflation fears stalk Asian stock markets

TOKYO (AFP) - Asian stocks fell sharply Tuesday, with Shanghai suffering its worst slump in a year on worries that soaring oil prices will stoke inflation and force central banks to tighten credit.

Investors were worried that rising energy costs and interest rates will hurt consumers and eat away at company profits, dealers said.

In Shanghai, share prices plunged 7.7 percent, the biggest one-day percentage loss in around one year after the Chinese central bank announced fresh credit-tightening measures to contain inflation.

Hong Kong was down 3.9 percent in late trade while Sydney ended 2.8 percent lower. Seoul shed 1.9 percent and Tokyo gave up 1.1 percent.

http://news.yahoo.com/s/afp/20080610/bs_afp/stocksworld

[ozymandius]

9. Shanghai stock market drops 7.7%

SHANGHAI -- Shanghai's stock market plummeted 7.7% today, its biggest drop in 15 months, leading a second straight day of broad declines in Asia amid jitters over inflation and economic growth.

The 257-point loss brought the Shanghai composite index to 3,072, the lowest close since March 2007. Analysts said the primary catalyst was another round of credit-tightening measure by China's central bank, which is intent on curbing inflation even at the expense of slowing the world's fourth-largest and fastest-growing economy.

On Saturday, Chinese officials announced banks would have to raise their reserve ratio requirements, making less money available for loans, the fifth such move this year. Trading in China was closed Monday for a public holiday.

"I think the decline today is a sign that (China's) economic growth will slow down - or at least that is the signal that government wants to give by lifting the deposit reserve to a historical high level," said Chen Wei, a director at Shenzhen Eastern Bay Investment Management Co., a private equity firm in Shanghai. However, he added: "In many cases, individual investors, as well as many fund investors, are making investment decisions out of panic or a rush of fever."

http://www.latimes.com/business/la-fi-asia11-2008jun11,0,2533856.story

[TalkingDog]

10. CNN: Pending Home Sales Up, Pending Home Sales also Down

America's best source of boot-licking sophistry and soft news:

http://money.cnn.com/2008/06/09/news/economy/pending_home_sales/

snip:
The Pending Home Sales Index from the National Association of Realtors (NAR) rose to 88.2 in April, up 6.3% from March's reading of 83 and the highest level since October. The increase defied the consensus estimate of economists polled by Briefing.com, which forecast pending sales to fall by 1%.

Despite the increase, April's reading remains down 13.1% from the same period last year, and off 29% from the index's peak in April 2005.

And NAR revised its existing home price outlook for 2008 downward. The group's June projections see prices falling 6.4% by the end of the year; in May it said 2008 prices would fall by 2.4%.

[ozymandius]

14. I swear - it would be great if the writers knew something about their subject.

Year-over-year data matters. Monthly changes do not. It's just like that incremental measure of inflation. Monthly changes hide the inflationary pressures we have endured over the past few years. But no doubt - some people will insist on drinking this kool-aid.

[TalkingDog]

32. I hate to stereotype an entire segment of the population

But (I'm going to anyway, obviously) I have noticed that those with conservative and Republican leanings suffer from an inability to take a long range view. They also don't seem to be able to grasp how small pieces of information can fit into a larger whole.

Basically, it's about me, now. Ego and Id driven. Unless it exists in their direct personal experience it has no bearing on their lives. Euphemistically they are "empathy challenged".

It reminds me of an apocryphal story I heard about George Will. (whom I've only ever agreed with twice in my life. Once when he proclaimed, thinking he was off mike, that the 2nd Inaugural Parade "looks like a Banana Republic")

When mandatory seatbelt laws took affect, naturally Mr. Will had a problem with Government interfering in the lives of the people. Never mind that the State has an interest in protecting it's citizens from physical harm and itself from monetary harm.

The story goes that he was sitting in his study pounding out his weekly column on that very subject, when a crash occurred at the intersection near his home. He goes out to investigate and finds that a young woman had run a stop sign and crashed into another car. She was not wearing a seatbelt and flew through the windshield.

After viewing the damage caused, he reportedly goes back into his house, tears up the column he is working on and writes another explaining why mandatory seat belts can be a good idea.

Is it true? I have no idea. I can't find any documentation. Is it typical? In my experience, yes.


Kinda like the Family Guy episode where Peter lays out a box and stick trap baited with Reese's Pieces for James Woods. Every time James Woods spots a piece of candy, he says in the same excited tone each time: "Oooo, piece of candy! Oooo, piece of candy! Oooo, piece of candy!" and follows it down a dark alley right into the trap.

[Hugin]

43. Once...

I've agreed with George Will exactly once. (so far)

[TalkingDog]

72. My first time with George

Was when he wrote an article on exactly how out of touch those "inside the beltway" really are.

He used a friend as a point of comparison. This friend made, by hand, custom-made pajamas.

George's point was that his friend ran a business, literally touched every part of his product (resist the temptation here to snark) and knew his customers very well. -He's seen them in their PJs after all- And tended to know them for a long time.

Inside the Beltway, people had pieces of paper with abstract concepts printed on them that they read, signed and passed on to other people. If the laws they make pass, fine, if they don't fine. There is no real connection to the end result.

Back before Air Conditioning (I still have never owned one) summers in DC were unbearable. Lawmakers, CongressCritters and the like, couldn't work on legislating so they had to go home for the summer. Back to live amongst the people who were affected by the laws they had just passed. There were consequences to making judgments that were inappropriate for the community you served.

I say rip out the AC. Make them go home for the summer. And not to some posh address either. Maybe with a "host" family. Kinda like that reality show with Paris Hilton and Nicole Richie.....

[ozymandius]

57. good reporting and bad reporting

Being in media for so long - I've known each. There's a good reason for reporters to have a beat: they really need to know their stuff to be good. The adage about reporters goes something like, "they are educated just enough to be dangerous." I feel that to be the case today with this housing report. There's a strong enough sense to understand the basic situation - but not enough knowledge to correlate.

As for George Will: a wise man will experience the world and allow those experiences to shape his perspective. A poorer man will adopt a perspective without experience and allow that to define the world. George Will has shown his capacity to learn over the seatbelt issue. That's an aberration. He to this day remains so doggedly didactic.

[Dr.Phool]

15. Yippee! We're winning!

Except we're losing.

[ozymandius]

18. I just found this at the Big Picture.

Pending Home Sales Index, NAR Housing Market "Bottoms"

The National Association of Realtors Pending Home Sales Index has been released, and it is once again, an exercise in spin.

Stable Existing-Home Sales Expected in Early 2008, then Gradual Rise
Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of Realtors

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in November, fell 2.6 percent to a reading of 87.6 from a strong upward revision of 89.9 in October, but remains above the August and September readings and indicates a broad stabilization. The index was 19.2 percent below the November 2006 level of 108.4. “Although there could be some minor slippage in the first quarter, existing-home sales should hold in a narrow range before trending up,” Yun said.

As we previously noted in December, the year-over-year data is what matters, not the monthly changes. This release revealed a 19.2% drop in the index from last year, forecasting not stabilization, but even greater slippage.

However, since the NAR insists on including their cheerful forecasts (i.e., spin) with each data release, why don't we review their prior prognostications about the Real Estate and housing markets, via Jim Stack's Investech. Jim writes:

"Most bear markets in stocks result in investors feeling as if they’re being sandpapered to death. Two steps down are followed by one step up... then another two steps down. Meanwhile, each and every step is accompanied by reassurances that a bottom is at hand and the outlook will soon improve.

http://bigpicture.typepad.com/comments/2008/01/a-history-of-ho.html

[Demeter]

80. Realtors Are In the Business of Lying

That's why they invented a title with the word "Real" in it. To obfuscate.

[ozymandius]

11. Lehman's Moves to Steady Ship

It's hardly unusual for financial firms to post multibillion-dollar quarterly losses. A handful have recently made a habit of it. So it might seem a tad harsh to take Lehman Brothers Holdings to task for stumbling into the red for the first time. But the Wall Street firm's estimated $2.8 billion hit for the three months to May is embarrassing, considering the investment bank has long touted its risk-management prowess.

Granted, it was a harsh quarter, with Carlyle Capital, Peloton Partners and Bear Stearns all hitting the skids. But if rivals like Goldman Sachs and Morgan Stanley don't report similar problems with their mortgage holdings and with failed hedges, Lehman will look exposed.

The good news is the investment bank now has $45 billion in liquidity, has raised all the unsecured funding it thinks it needs for the rest of the year and, after raising another $6 billion of capital Monday, has a low net-leverage ratio of about 10 times equity. What's more, Lehman has sold some $30 billion of mortgage assets to hundreds of investors. That ought to have provided enough price discovery to convince investors that the firm's remaining inventory is properly valued.

http://online.wsj.com/article/SB121305363381758989.html?mod=googlenews_wsj

[Ghost Dog]

12. Irish asked to support EU treaty to boost economy

Tue Jun 10, 2008 5:49am EDT
By Andras Gergely

DUBLIN, June 10 (Reuters) - The Irish government urged voters on the last day of campaigning to back the European Union reform treaty in Thursday's referendum as the best way to shore up a faltering economy.

Latest polls indicate the "No" camp is gaining ground, with one survey last week putting opponents of the Lisbon Treaty, which replaces a constitution rejected by French and Dutch voters in 2005, ahead for the first time.

Ireland is the only one of the 27 member states holding a referendum on the treaty -- meaning that a country accounting for less than 1 percent of the bloc's 490 million population could derail a pact designed to reform how it is run.

On the last day before a pre-poll news moratorium, the government said Ireland needed to show its commitment to Europe to protect exports, the engine of growth.

/... http://www.reuters.com/article/marketsNews/idINL1064230720080610?rpc=44

--> See/Listen to comment I totally agree with here: http://scratchpad-siboney.blogspot.com/2008/06/jim-corr-on-lisbon-treaty-nwo-911-lies.html

--> HOWEVER, the bottom line: I reckon the Irish would, nevertheless, be better off signing it now; and then work from the INSIDE to change the way thinghs get done in practice. The EU (unbelivably so for the Brits) has never been about "hard-and-fast" rules. Everything is flexible, around here.

¡Salud! :hi:

[ozymandius]

21. So how flexible is the treaty?

The Reuters article says that Ireland would retain the power to set its corporate tax rates. Ireland's foreign investment laws are very strict. Since this nation is overwhelmingly pro-business -- the foreign investment hitch is understandable. So I do wonder if Ireland's interests in foreign investment are as flexible as P.M. Cowen claims the tax code to be.

[UpInArms]

22. dollar watch

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

Last trade 73.440 Change +0.557 (+0.76%)

Dollar Propped By Ben Bernanke – But Are His Words Enough?

http://www.dailyfx.com/story/bio2/Dollar_Propped_By_Ben_Bernanke_1213090941513.html

Escalating his rhetoric in the defense of the dollar Fed Chairman Ben Bernanke stated on Monday at conference at MIT that, “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so," adding further, ”The Federal Open Market Committee will strongly resist an erosion of longer-term inflation expectations."

Dr. Bernanke new found role as an inflation hawk helped fuel a dollar rally overnight. EURUSD traded down to 1.5550 and USDJPY spiked all the way to 106.84 on expectations of possible rate hikes from US monetary officials sometime in the near future. However, whether Chairman Bernanke’s will have any lasting market repercussions remains to be seen. Note that he was similarly sanguine about the state of the US housing market before that sector of the economy started to crumble.

Clearly, the FOMC officials are concerned about the growing threat of runaway inflation in the US economy but given the serious slowdown in demand they may have few options to combat it. Much like in the late 1970’s and early 1980’s the Fed faces the prospect of both rising prices and rising unemployment. At thst time Chairman Volker decided to increase interest rates to combat inflation at the expense of growth. As a result the “misery” index (the combined level of unemployment and inflation ) rose to record highs.

We remain skeptical that Dr. Bernanke and the rest of the FOMC will choose this path, especially in a election year when such policy action could grossly alter the political landscape. At best, the Fed will keep rates stationary for the rest for the year and will try to use the power of its pulpit to talk the dollar up. However, the power of it rhetoric will soon lose it punch if the US economic data continues to deteriorate.

Meanwhile data on the other side of the ocean remain remarkably buoyant with Both French and Italian Industrial Production printing better than forecast. The French IP rose 1.4% versus 0.3% while Italian rebounded 0.7% from –0.2% the month prior. Taken together with yet another sharp rise in German Producer prices which increased to their highest level since 2005, the economic news from Europe is far more supportive of President Trichtet’s threat of a rate cut than any piece of data of from US.

The currency markets were clearly scared of Mr. Bernanke remarks fearing the power of US authenticities to intervene in trade. However, once the power of Chairman’s words fades from memory, trades will once again have to asses the health of the US economy and if consumer demand shows signs of significant deterioration, no rhetoric will help the buck. That’s why this Thursday’s US Retail Sales report remains the key event risk of the week.

...more...

US Treasury and Federal Reserve Join Forces to Talk Up US Dollar

http://www.dailyfx.com/story/bio1/US_Treasury_and_Fed_Joining_1213046554116.html

With inflation skyrocketing and gas prices hitting an average of $4 a gallon, the US government wants the dollar to rise. Federal Reserve Chairman Ben Bernanke first hinted that FX intervention is possible last week and today US Treasury Secretary Paulson confirmed that the US government is not ruling out any policy tool including intervention. The last time the Federal Reserve intervened in the currency markets was shortly after the launch of the Euro. At that time, the currency fell to a low of 84 cents, triggering panic for the European Central Bank. In response to the sharp sell-off in the EUR/USD, the ECB convinced the Fed to jointly intervene in the currency markets to buy euros and sell US dollars. Since there has been no intervention for more than 7 years, stepping into the markets would represent a dramatic policy shift for the US government. The reason why talk of intervention has resurfaced is because the US government may be running of options. Typically, raising interest rates is the most effective way to curb inflation, but with the labor market deteriorating and high energy prices threatening consumer spending, the Federal Reserve is reluctant to raise interest rates. This leaves strengthening the dollar as one of the easiest and possibly the quickest way to bring down inflation. Although we do not expect the US government to do more than jawbone the dollar, their bias for where the dollar should head is now clear. In the past, the Federal Reserve wanted the dollar to fall to boost exports and growth, but they have now flipped their stance and instead they want the dollar to rise. Meanwhile the surprising jump in pending home sales added fuel to the recovery in the greenback as the 6.3 percent rise was the strongest one-month increase in 6 years. The trade balance is due for release tomorrow, we expect the deficit to shrink as exports rebound.

...more...

[ozymandius]

28. "Dr. Bernanke new found role as an inflation hawk helped fuel a dollar rally overnight."

"Waiter, I'll have what smoldering substance that gentleman over there is having."

This is just jaw-boning the Forex as they have done for years.

[UpInArms]

33. talk is cheap and these crapweasels have been doing it out of both

sides of their pieholes their entire lives.

the push to cheapen the buck has been an ongoing part of their agenda since the squatter moved into 1600 Pennsylvania - it was part of RayGun's policy and this POS just continued on the path of dollar destruction.

Chopper Ben's and Paulson's marionette strings are showing

[54anickel]

62. Ben the hawk? Bwahahaha!!!! Clap your hands Foghorn, clap your hands!!!

[UpInArms]

44. WSJ teaser: Intervention, Other Tools On Table for Dollar

http://online.wsj.com/article/SB121305835617859195.html?mod=mktw

WASHINGTON -- The Bush administration kept up its efforts to arrest the dollar's decline after last week's tough talk was derailed by weak economic data in the U.S. and talk of an interest-rate increase in Europe.

President Bush talked up the dollar's prowess Monday before leaving on a trip to Europe, saying "long-term strength" of the U.S. economy would be reflected in the currency. Later in the day he went even further, telling the Times of London in an interview that "we want the dollar to strengthen." Treasury Secretary Henry Paulson, meanwhile, refused to rule out intervening in the markets

...that's all you get without a subscription...

[UpInArms]

23. (Executive) Heirs get millions in exec death benefits: report (golden coffin benefits)

http://www.reuters.com/article/businessNews/idUSN1031348620080610?feedType=RSS&feedName=businessNews

NEW YORK (Reuters) - Corporate death benefits are under scrutiny with the Wall Street Journal reporting on Tuesday that heirs of some company chiefs are set to get hundreds of millions of dollars in so-called golden coffin benefits.

For instance, Nabors Industries (NBR.N: Quote, Profile, Research) would owe the estate of CEO Eugene Isenberg a "severance" payment of at least $263.6 million, which is more than the first-quarter earnings at the Houston oil-service company, the Journal said.

According to the paper, many companies accelerate unvested stock awards after a death and some promise severance payouts, supercharged pensions or a continuation of executives' salaries or bonuses for years after they are dead.

Compensation critics call the practice the ultimate in pay that is not based on performance.

Death benefits are not a new feature of executive contracts, but a federal rule change 18 months ago that forced companies to provide more detail on severance arrangements has exposed just how lavish some of these arrangements are, the Journal said.

It said the CEO of Shaw Group Inc (SGR.N: Quote, Profile, Research) is in line to be paid $17 million for not competing with the engineering and construction company after he dies.

...more...

emphasis mine - :wtf:

[TalkingDog]

34. I swear, I promise not to compete with ANYBODY after I die. Where are my Benjamins?

Okay, 5 dollars then.....

*shakes head in dismay*

[ozymandius]

38. This somehow makes sense to me.

I've known engineers who I assumed were dead for years. A cadaver might have had a go at their jobs.

[UpInArms]

24. from today's liars: U.S. slowdown to be long, but no recession: survey

http://news.yahoo.com/s/nm/20080610/bs_nm/economy_bluechip_dc

WASHINGTON (Reuters) - Economists have trimmed forecasts for U.S. growth in the second half of this year and in 2009, but more have come to the view that the United States will dodge a recession, a survey released on Tuesday showed.

Blue Chip Economic Indicators, a monthly newsletter, said 53.5 percent of the 48 private economists surveyed for its June issue do not believe the U.S. economy is in or will enter a recession in 2008, up from 40 percent in the May survey.

"The consensus now suggests the downturn in economic growth will be less steep than earlier feared, but the subsequent recovery in growth to its trend rate will take longer than hoped a few months ago," the newsletter said.

The economists polled on June 2 and 3 projected third-quarter growth at a 1.5 percent annual rate, down from the 1.7 percent pace forecast a month ago. For the fourth quarter, they said the economy would likely expand by 1.2 percent, down from the 1.5 percent projected a month ago.

Despite the downgraded expectations for the second half of 2008, the consensus forecast for the year as a whole moved up to 1.5 percent from 1.4 percent as economists took into account an upward revision to first-quarter growth and bumped up their expectations for the second quarter to a still-anemic 0.4 percent from 0.2 percent.

The consensus projection for 2009, however, slipped for a sixth straight month, dropping to 1.9 percent from 2 percent.

...more...

[UpInArms]

25. U.S. hiring seen weaker in third quarter: Manpower

http://www.reuters.com/article/businessNews/idUSN0930367520080610?feedType=RSS&feedName=businessNews?sp=true

NEW YORK (Reuters) - A measure of U.S. employment expectations fell to its lowest since the fourth quarter of 2003, suggesting employers are increasingly cautious about hiring over the next three months, according to a quarterly survey by Manpower Inc (MAN.N: Quote, Profile, Research) released on Tuesday.

The staffing services company said its seasonally adjusted net employment outlook fell for the third consecutive quarter, to a level of 12, compared with 14 last quarter and 18 a year ago. The index measures the difference between employers saying they plan to add jobs and those planning to cut them.

Of 10 sectors tracked by Manpower, only one -- mining -- has a stable outlook for job seekers compared with the previous quarter. Prospects in the other nine sectors have weakened.

"It is saying (the outlook is) softer, with some real trouble spots in construction and finance and real estate, and the rest is holding its own, but tenuous," Manpower Chief Executive Jeff Joerres said. "It's clearly a time that's a bit spooky and not clear what's coming next."

The outlook for the construction, finance, insurance and real estate sectors is the weakest since the 1991 recession. Hiring intentions in education, manufacturing, and wholesale and retail trade are also at multi-year lows when adjusted for seasonal factors, Manpower said.

...more...

[UpInArms]

29. HSBC says excessive bank leverage model "bankrupt"

http://www.reuters.com/article/bondsNews/idUSL1014625020080610

LONDON, June 10 (Reuters) - Banks need to return to more basic business plans as the model based on the excessive leverage of recent years is "bankrupt", the head of HSBC (HSBA.L: Quote, Profile, Research) said on Tuesday.

That could see return on capital fail to match levels seen in recent years, although some of that has been inflated, HSBC Chairman Stephen Green said.

"The huge build up of leverage in the system over the last five years where profit depended on high and ever increasing leverage, that model is gone, and that model is gone because it is bankrupt," Green said at a British Bankers' Association conference.

"This isn't just the end of a bubble, it's the end of the business model," he added.

Asked if that left banks facing lower return on capital, Green said: "I don't think we're in an era, looking forward, where returns on capital will look as good as they did looking backwards. But it's worth noting that some of the returns of capital looking backwards were inflated, and much of the returns were subsequently given back."

...more...

[InkAddict]

61. Then what's good about Ozy's #19?

[hatrack]

37. I hate to say this, but . . .

That is one freaking stupid cartoon.

[ozymandius]

39. Sorry you're disappointed.

The selection was slim. I figure most cartoonists are on vacation. There are too many out there about primary season and Scott McClellan's book.

[hatrack]

75. Well, I'm looking on the bright side - it's not Glenn McCoy!

:toast:

[ozymandius]

76. Indeed.

I almost pity those conservative cartoonists. They're still raging against the Clinton administration like so many AM radio blowholes.

[UpInArms]

42. S&P chief: business lost for "years" (killed the goose - who could have predicted?)

http://www.reuters.com/article/InvestmentOutlookMid08/idUSN0928205620080609?sp=true

NEW YORK (Reuters) - Standard & Poor's President Deven Sharma said on Monday that the rating company's structured finance business may be lost for "years."

To make up for lost revenue, S&P will be looking for growth in emerging markets such as Asia, the Middle East, South Africa and Dubai, as well as new rating business in the loan market, he said at the Reuters Investment Outlook Summit in New York.

Top rating agencies, such as S&P, Moody's Investors Service and Fitch Ratings, have been criticized for exacerbating a credit crisis that hit last year, due to assigning high marks for risky structured debt that later tumbled in value. The rating firms generated large profits through charging fees, which have largely dried up with the credit downturn.

"Will (new business) completely make it up?" Sharma asked. "It will be in the order of a few years" and the business will not be recouped this year, he said.

Moreover, financial firms will likely face earnings pressure for another six to 12 months, Sharma said.

In a defense of S&P, Sharma said he understood criticism of agency rating methods, but noted that their assumptions of 5 percent housing price declines in 2004 and 2005 were widely shared.

Few analysts could have predicted the 20 percent declines that struck the U.S. housing market, he said.

...more...

emphasis mine - but why can't they find a better line - that one's getting old :eyes:

[ozymandius]

46. This will be the motto for the Bush era: "(no one) could have predicted..."

They deserve it. And Lehman is revising away eight years of earnings. Fools.

[Hugin]

51. My stale calculations show it'll take...

32.5 years... If we started back in March! Depending on the breaks, of course.

[Demeter]

81. That's Two Generations, Prag

Which will never happen, as the first one will not be able to afford to reproduce...

[UpInArms]

45. Boston Fed's chief plays down oil, food

http://www.marketwatch.com/news/story/boston-feds-rosengren-seeks-ease/story.aspx?guid=%7BF0DCCFFB%2D17A5%2D432B%2D9633%2D0CAE8E7A0EF7%7D

CHATHAM, Mass. (MarketWatch) -- Boston Fed president Eric Rosengren sought Tuesday to throw a little cold water on feverish speculation that the Federal Reserve is close to hiking U.S. interest rates to combat inflation.

In remarks opening his bank's conference on inflation dynamics, Rosengren said that the spike in food and energy prices have historically had a very minor impact on the underlying rate of inflation.

Rosengren, considered one of the most dovish Fed presidents, acknowledged that not everyone on the Fed shares his view.

At the last Federal Open Market Committee meeting in mid-May, the Boston Fed was seeking an aggressive rate cut of half a percentage point. The central bank's policymakers chose a safer quarter-point cut, and many of the hawkish Fed members opposed even that small move.

...more...

[Joanne98]

48. Trade deficit jumps to highest level in 13 months

Trade deficit jumps to $60.9 billion in April, highest level in 13 months reflecting oil surge


WASHINGTON (AP) -- The trade deficit jumped to the highest level in 13 months in April as America's bill for foreign crude oil soared to an all-time high.
The Commerce Department reported Tuesday that the gap between what the nation imports and what it sells abroad rose by 7.8 percent to $60.9 billion, the largest imbalance since March 2007. The April deficit was $4.4 billion higher than the March imbalance of $56.5 billion.

http://biz.yahoo.com/ap/080610/economy.html

[Joanne98]

50. Premarket Movers: Lehman Bros., Apple fall

Lehman Bros. down in premarket on downgrades; Apple falls despite faster, cheaper iPhone


NEW YORK (AP) -- Shares of Lehman Brothers Holdings Inc. fell in premarket trading Tuesday as analysts weighed in on the investment bank's plan to raise $6 billion in anticipation of a heavier-than-expected quarterly loss.
ADVERTISEMENT


Analysts are saying Lehman may post smaller profits for years due to dilution, leading a Wachovia analyst to cut his rating on the stock to "Market Perform" from "Outperform," and a Credit Suisse analyst to downgrade shares to "Neutral" from "Outperform."

The stock declined 48 cents to $29 in trading before the bell.

Apple Inc. faces investor skepticism after unveiling the latest iteration of its iPhone on Monday. The iconic smartphone will feature faster Internet access and a lower price tag. Shares fell 3 cents Monday to $181.61 and were down a half percent to $180.66 in premarket action.

Apple's exclusive U.S. wireless service provider for the iPhone, AT&T Inc., is down 60 cents to $36.96.

Shares of United Rentals Inc. jumped 15 percent to $22.50 after the equipment-rental company said it will buy back up to $679 million of its class C and class D preferred stock.
http://biz.yahoo.com/ap/080610/premarket_movers.html?.v=1

[Joanne98]

52. Energy Agency cuts oil demand forecasts

International Energy Agency cuts oil demand forecasts amid surging prices


PARIS (AP) -- The International Energy Agency lowered its forecast for global oil demand this year amid surging prices, but said Tuesday that global hunger for oil is knocking markets out of kilter.
"Supply growth so far this year has been poor and higher prices are needed to choke off demand to balance the market," the Paris-based watchdog said in a monthly report.

ADVERTISEMENT


The agency predicted global oil product demand in 2008 to grow by 0.9 percent, or 800,000 barrels a day, down from the 1.2 percent, or 1 million barrels, forecast earlier.

The change follows decisions by several developing countries to reduce fuel subsidies because of high oil prices. The agency has also made upward revisions to its 2006 and 2007 data.

The agency lowered its 2008 global demand forecast to 86.8 million barrels a day, down 80,000 barrels from last month. The agency has been steadily lowering its demand predictions for the past several months as oil climbs repeatedly into record territory.

Oil prices have risen more than 8 percent since the IEA's last monthly report. Light, sweet crude for July delivery rebounded 67 cents to $135.02 a barrel in Singapore trading Tuesday.

The IEA predicted U.S. oil demand would contract by up to 2.5 percent this year to 20.3 million barrels a day.

http://biz.yahoo.com/ap/080610/iea_oil_forecast.html

[antigop]

53. NY Times: Derivatives trading is scrutinized

http://www.nytimes.com/2008/06/10/business/10fed.html

The Federal Reserve moved Monday to overhaul the financial apparatus behind derivatives trading, a regulatory step intended to assure that the failure of a major bank or investment firm would not create the systemic threat seen in March after the collapse of Bear Stearns.

Timothy F. Geithner, the president of the Federal Reserve Bank of New York and one of the chief architects of the Bear Stearns bailout, convened a meeting of 17 major financial institutions Monday afternoon to discuss creating a central system for the trading and settlement of credit derivatives, a sophisticated type of financial instrument.

Oh, I feel better now....

[InkAddict]

66. NOT.

So, when the speculators agree to over-value a commodity-based derivative swap, the Feds will make up the difference in cash! Am I getting this?

Swell.

[ozymandius]

54. opening with a thud

9:40
Dow 12,227.72 Down 52.60 (0.43%)
Nasdaq 2,437.57 Down 21.89 (0.89%)
S&P 500 1,352.73 Down 9.03 (0.66%)
10-Yr Bond 4.0460% Up 0.0540
NYSE Volume 225,916,690
Nasdaq Volume 118,937,520

08:31 am : S&P futures vs fair value: -13.7. Nasdaq futures vs fair value: -18.5. Stocks futures point to a sharply lower open as they slip toward their session lows. The April U.S. deficit increased 7.8% to $60.9 billion, compared to the expected deficit of $60.0 billion.

08:05 am : S&P futures vs fair value: -10.2. Nasdaq futures vs fair value: -12.0. Stock futures point to a lower open following some hawkish comments regarding inflation risks from Fed Chairman Bernanke. Bernanke noted the risk of a substantial economic downturn has fallen, while cautioning there are upside risks to inflation and inflation expectations. The dollar is up 0.8% as a result. Crude oil is back on the rise, up 1.5% to $136.32 per barrel.

[Joanne98]

56. Investment banks open lower. Lehman down 7%

Tuesday June 10, 9:53 am ET
Investment banks fall as broader markets decline on rising oil prices, inflation worries


NEW YORK (AP) -- Shares of investment banks mostly fell early Tuesday as broader markets declined amid another rise in oil prices and indications the Federal Reserve might raise interest rates to fight inflation.
Here's how investment banks fared early Tuesday morning:

Goldman Sachs Group Inc. fell $2.32 to $163.44.

Lehman Brothers Holdings Inc. fell $1.86, or 6.3 percent, to $27.62. The stock also was downgraded by Wachovia and Credit Suisse Tuesday.

Merrill Lynch & Co. rose 6 cents to $37.82.

Morgan Stanley fell 73 cents to $38.66.
http://biz.yahoo.com/ap/080610/investment_banks_opening_glance.html?.v=1

http://finance.yahoo.com/q?s=LEH

[Joanne98]

59. Oil Traders Face New Regulation

Under pressure from Congress—and runaway oil prices—U.S. regulators are moving to exert far greater oversight
by Moira Herbst

http://www.businessweek.com/bwdaily/dnflash/content/jun2008/db2008068_580706.htm?campaign_id=yhoo

[InkAddict]

68. Don't trading transactions move through banks?

How's this stack up with the Fed picking up the difference in "cash" as in #19?

[MattSh]

60. Russia raises spectre of depression, faults U.S.

Wanted to post this yesterday, but my internet connection took a vacation.


Russia raises spectre of depression, faults U.S.

ST. PETERSBURG–Russian President Dmitry Medvedev said "economic egoism" has led to what may be the worst economic contraction since the depression of the 1930s, and placed some of the blame on the United States.

The Russian leader said no single country, even the U.S., can reverse the global economic decline alone, and claimed a role for Russia in finding a solution.

"An underestimation of risks by the largest financial companies together with the aggressive financial policy of the world's largest economy led not only to corporate losses. Unfortunately, the majority of people on the planet became poorer," Medvedev said.

"For global financial markets, 2007 was one of the hardest years in recent decades and, if experts are to be believed, the most complicated since the Great Depression of the 1930s," Medvedev said, speaking at the opening of the St. Petersburg International Economic Forum.

<more> ===>> http://www.thestar.com/Business/article/439353

[InkAddict]

63. Guess somewhere in the fog is the truth...

and a great plate of piping "hot" sushi.

http://www.guardian.co.uk/news/2006/nov/25/guardianobituaries.russia

[MattSh]

71. Not sure what that has to do with my post, though...

???

[antigop]

73. Warren Buffett's hedge fund wager

http://dealbook.blogs.nytimes.com/2008/06/09/warren-buffetts-hedge-fund-wager/?hp

Warren Buffett, a longtime critic of the fees charged by some money managers, has put his own cash on the line — or, at least, a small chunk of it — in an attempt to prove his point.

Fortune.com reports that Mr. Buffett, the legendary value investor who runs Berkshire Hathaway, has entered into a bet with a firm that runs funds of hedge funds over whether or not funds handpicked by experts can beat the S&P 500 index over 10 years.

There is about $640,000 in the kitty, Fortune.com said, half put up by Mr. Buffett and half put up by Protege Partners, the fund-of-hedge-fund manager on the other side of the wager. At the end of the 10 years, the pool is expected to be worth about $1 million, which will go to a charity of the winner’s choice.

The bet, which Fortune said hadn’t been previously reported, has been in place since Jan. 1 of this year.

At issue here is a fundamental question in the hedge fund world: Whether or not management fees, imposed along the chain of advisers, eat away at investors’ returns to the point where a plain-vanilla index fund would fare as well.

[TrogL]

74. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



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




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

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

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

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

2008-04-30 Wednesday, April 30 0.990884 USD
2008-05-01 Thursday, May 1 0.981643 USD
2008-05-02 Friday, May 2 0.982125 USD
2008-05-05 Monday, May 5 0.987654 USD
2008-05-06 Tuesday, May 6 0.996413 USD
2008-05-07 Wednesday, May 7 0.998004 USD
2008-05-08 Thursday, May 8 0.985319 USD
2008-05-09 Friday, May 9 0.993838 USD
2008-05-12 Monday, May 12 0.996314 USD
2008-05-13 Tuesday, May 13 1.0004 USD
2008-05-14 Wednesday, May 14 0.998203 USD
2008-05-15 Thursday, May 15 1.0004 USD
2008-05-16 Friday, May 16 1.00341 USD
2008-05-19 Monday, May 19 1.00867 USD
2008-05-20 Tuesday, May 20 1.00725 USD
2008-05-21 Wednesday, May 21 1.01626 USD
2008-05-22 Thursday, May 22 1.0141 USD
2008-05-23 Friday, May 23 1.01184 USD
2008-05-26 Monday, May 26 1.01184 USD
2008-05-27 Tuesday, May 27 1.00685 USD
2008-05-28 Wednesday, May 28 1.00878 USD
2008-05-29 Thursday, May 29 1.01307 USD
2008-05-30 Friday, May 30 1.00624 USD
2008-06-02 Monday, June 2 0.998901 USD
2008-06-03 Tuesday, June 3 0.994926 USD
2008-06-04 Wednesday, June 4 0.985707 USD
2008-06-05 Thursday, June 5 0.980873 USD
2008-06-06 Friday, June 6 0.981643 USD
2008-06-09 Monday, June 9 0.978186 USD
2008-06-10 Tuesday, June 10 0.976467 USD

Current values

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

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9716 0.9793 0.9700 0.9781 +0.0003 +0.03% 
CD.M08 Jun 2008 0.9705 0.9808 0.9705 0.9765 -0.0010 -0.10% 
CD.U08 Sep 2008 0.9704 0.9790 0.9697 0.9766 -0.0003 -0.03% 
CD.Z08 Dec 2008 0.9800 0.9800 0.9800 0.9770 -0.0033 -0.34% 
CD.H09 Mar 2009 0.9757 0.9757        0.9772 -0.0033 -0.34% 
CD.M09 Jun 2009 0.9995 0.9995        0.9776 -0.0030 -0.31% 
CD.U09 Sep 2009 0.9865 0.9865 0.9865 0.9780 -0.0027 -0.28% 

 

Other combinations: (http://quotes.ino.com/exchanges/?c=currencies)

Market          Open    High    Low     Last    Change   Pct 
AUSTRALIAN $/CANADIAN $ (CME:ACD)ACD.M08 
Jun 2008 0.9695 0.9695 0.9695 0.9695 -0.0120 -1.24%   
EURO/BRITISH POUND (NYBOT:GB)GB.M08.E 
Jun 2008 (E) 0.7939 0.7939 0.7927 0.7927 +0.0001 +0.01%   
EURO/JAPANESE YEN (NYBOT:EJ).M08.E 
Jun 2008 (E) 166.11 166.20 165.79 165.79 -0.07 -0.04%   
EURO/US$ (SMALL) (NYBOT:EO)EO.M08.E 
Jun 2008 (E) 1.5520 1.5529 1.5474 1.5474 -0.0171 -1.09%   

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

The June Canadian Dollar was lower overnight as it extends this month's decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If June extends this month's decline, April's low crossing at 96.69 is the next downside target. Closes above the 10-day moving average crossing at 99.09 would confirm that a short-term low has been posted. First resistance Monday's high crossing at 98.48. Second resistance is the 10-day moving average crossing at 99.09. First support is the overnight low crossing at 96.86. Second support is April's low crossing at 96.69.


Analysis

The Bank of Canada has held its its policy-setting interest rate unchanged at three per cent, despite predictions from some economists of lower interest rates. (courtesy CNKW and CBC)

There's no need for a lower rate. The housing market has levelled off and is coming down. Everybody with any sense has already done their deal (I got mine) or doesn't care about interest rates.

The price of oil is still on the rise, which means tax revenues, but also puts yet another damper on tourism except for the folks close to the Canadian/US border. It'll also affect the price of anything (eg. fresh fruit) that needs to move.

[ozymandius]

77. Quittin time. So little enthusiasm among traders.

Wonder why?

Dow 12,289.76 Up 9.44 (0.08%)
Nasdaq 2,448.94 Down 10.52 (0.43%)
S&P 500 1,358.44 Down 3.32 (0.24%)
10-Yr Bond 4.0990% Up 0.1070
NYSE Volume 4,565,238,000
Nasdaq Volume 2,026,839,880

4:15 pm : Stocks fluctuated on Tuesday as crude retreated from a gain of 2.7% to a decline of 2.0% and traders digested stern words on inflation from Fed officials. The S&P 500 eventually settled the day with modest losses, while the Dow settled with a slight gain.

Fed Chairman Bernanke noted policy makers will "strongly resist" any surge in inflation expectations, although he acknowledged downside risks to growth remain. The Fed has indicated that it is done cutting rates, and its next move is likely an increase in rates. Fed funds futures suggest an 87% probability that rates will be increased by the end of September.

Market participants are not pleased with the possibility of rate increases while growth is still sluggish, aware of the adverse earnings implications this scenario is likely to have.

The hawkish inflation comments sparked a 1.15% rally in the dollar -- its largest one-day gain since 2005. This prompted a 1.9% drop in crude prices and a 3.0% decline in gold. As a result, the energy (-2.2%) and materials (-1.3%) sectors posted the largest declines.

Four of the ten economic sectors posted a gain. Financials stocks led the way after rebounding from their 7.2% loss over the last two sessions. Large-cap names such as JPMorgan Chase (JPM 38.27, +0.76), Wells Fargo ( 25.92, +0.65) and Citigroup (C 20.27, +0.67) showed notable strength. Recently hard hit Lehman Brothers (LEH 27.32, -2.16) did not participate in the advance, with shares falling 7% after being downgraded at several brokerages.

The consumer staples sector posted a solid gain of 0.9%. Coca-Cola (KO 58.01, +2.15) surged 3.9% after being upgraded to Buy from Hold at Deutsche Bank.

In economic news, the April trade deficit widened to $60.9 billion from a downwardly revised $56.5 billion in March. However, the real trade deficit (inflation adjusted) -- which is factored into GDP forecasts -- dipped 0.1% to $46.898 billion from $46.966 billion. If the real trade deficit stays at the current level, the net export component of GDP should boost the second quarter calculation by over 1.0%. DJ30 +9.44 NASDAQ -10.52 NQ100 -0.4% R2K -0.4% SP400 -0.7% SP500 -3.32 NASDAQ Dec/Adv/Vol 1636/1184/2.05 bln NYSE Dec/Adv/Vol 2077/1085/1.39 bln

[dweller]

83. 35 for 43

them's the magic numbers.

:D

dp