STOCK MARKET WATCH, Wednesday June 25

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday June 25, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 210
DAYS SINCE DEMOCRACY DIED (12/12/00) 2712 DAYS
WHERE'S OSAMA BIN-LADEN? 2437 DAYS
DAYS SINCE ENRON COLLAPSE = 2728
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 24, 2008

Dow... 11,807.43 -34.93 (-0.29%)
Nasdaq... 2,368.28 -17.46 (-0.73%)
S&P 500... 1,314.29 -3.71 (-0.28%)
Gold future... 891.60 +4.40 (+0.50%)
30-Year Bond 4.66% -0.05 (-1.10%)
10-Yr Bond... 4.11% -0.06 (-1.51%)






GOLD,EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

[ozymandius]

1. Market WrapUp: Trouble Ahead for the The Four Horsemen and Europe's Not So Sunny Side

BY FRANK BARBERA, CMT

Falling consumer confidence, falling home prices, profit warnings -- all of these are par for the course in a recession. Of course, there is nothing new about any of this, except that Alan Greenspan finally realized that the US may be in trouble with his comment yesterday that we are ‘on the brink’ of a recession. Now talk about a forecasting coup, huh? Now we know why they pay him the big bucks. “On the brink” -- really? How about admitting to the idea that the US economy has been mired in recession for months, let alone debating whether we are in a recession. In my view, such questions beg credulity. Oh, I suppose that we must all wait for the NBER to officially declare a recession and so far, quarterly GDP reports have just missed the mark of being negative.

Amazing what you can achieve by understating inflation and over-reporting growth, isn’t it? For anyone who actually believes the official party line on the US economy, you have my deepest sympathies. In his latest update to investors, PIMCO bond guru Bill Gross makes the case of how badly off mark US economic data has become by using a pair of charts courtesy ISI Group economist Ed Hyman. Ed is one the best economists out there and the good folks at ISI do a great job collecting and tracking the universe of economic stats. In the first chart, we see the reported inflation rate of 24 foreign countries, which in the most recent 12 months has moved up from 4% to close at 7%. In the second chart, we see the US CPI which has remained unchanged now for a decade at 4%. Makes you wonder who the government statisticians think they are fooling. If global inflation is on the rise everywhere else, should it not be moving up here as well?

.....

In our view, the path ahead is going to be very difficult and last for a very long time. While there may be statistical ‘rallies’ in the economic data from time to time, this is a function of any time series to at least partially, periodically, mean revert. Real world, for average Joe six-pack, the economic path ahead will be unchanged or deteriorating in all likelihood for the remainder of 2008 and likely all of 2009. How could things get worse? One very real possibility is a currency crisis later this year, possibly following the Chinese Olympics. When I got up this morning, the major news channels were already counting down the days, with headlines like, “45 day to go” to the Chinese Olympics. It hit me that once the games are over, China may very well decide to let the Yuan appreciate at an even faster rate, or revalue the Yuan all together. That type of sudden sea-change in policy would not be a shocker as domestic inflation rates in China are putting a huge strain on the current status quo. For Wal-Mart shoppers, and indeed the US population at large, a Yuan revaluation will be felt in dramatic fashion and would serve to intensify to a high exponent, the current inflationary shock we are already experiencing in food and energy. For the US consumer under siege, much higher prices for clothing and other basic goods would be a huge negative and would accelerate what is clearly already a consumption led recession.

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

[alterfurz]

29. memo to Alan "On the Brink" Greenspan from the pResident

[ozymandius]

2. Today's Reports

08:30 Durable Orders May
Briefing.com 0.3%
Consensus 0.0%
Prior -0.5%

10:00 New Home Sales May
Briefing.com 520K
Consensus 510K
Prior 526K

10:30 Crude Inventories 06/21
Briefing.com NA
Consensus NA
Prior -1242K

14:15 FOMC Policy Statement

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

[UpInArms]

32. May durable goods flat - April revised lower to -1.0% (ergo May decreased -1.0%)

04. U.S. April durable-goods orders revised lower to -1.0%
8:30 AM ET, Jun 25, 2008

05. U.S. May durable-goods inventories rise 0.4%
8:30 AM ET, Jun 25, 2008

06. U.S. May durable-goods shipments fall 1.1%
8:30 AM ET, Jun 25, 2008

07. U.S. May core capital equipment orders fall 0.8%
8:30 AM ET, Jun 25, 2008

08. U.S. May durable-goods orders ex-transportation fall 0.9%
8:30 AM ET, Jun 25, 2008

09. U.S. May durable-goods orders flat vs. -1.0% expected
8:30 AM ET, Jun 25, 2008

Isn't that a great spin job - revise April's lower so that May can stay "flat"?

:eyes:

[ozymandius]

35. I feel the urge to smack 'em around a bit.

What a great job. You get paid just to make stuff up.

[UpInArms]

40. here's some made up blather to make it better

http://www.reuters.com/article/bondsNews/idUSN2438032420080625

WASHINGTON (Reuters) - New orders for long-lasting U.S. manufactured goods were unchanged in May after two consecutive months of decline, government data on Wednesday showed, while a key barometer of business investment fell by less than expected.

Analysts polled by Reuters had forecast durable goods orders to creep up by 0.1 percent last month after a revised 1.0 percent drop in April, previously reported as a 0.6 percent decline, as weak U.S. growth chilled factory activity.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, fell by 0.8 percent in May.

This was somewhat less than analyst forecasts for a 1.4 percent drop but followed a 3.1 percent rise in April, revised down from a previously reported 4.0 percent gain.

[Dr.Phool]

36. It won't look so flat next month when they revise it lower again.

[radfringe]

44. depends on the couch

some couches make it higher

some couches make it lower

and your mother's couch doesn't do anything at all

:shrug: go ask alice

[UpInArms]

51. U.S. new-home sales down 40.3% in past year

01. U.S. May new-home sales in West fall to 26-year low
10:00 AM ET, Jun 25, 2008

02. U.S. new-home inventories rise to 10.9-month supply
10:00 AM ET, Jun 25, 2008

03. U.S. new-home sales down 40.3% in past year
10:00 AM ET, Jun 25, 2008

04. U.S. May new-home median sales prices down 5.7% in past year
10:00 AM ET, Jun 25, 2008

05. U.S. May new-home sales fall 2.5% to 512,000 as expected
10:00 AM ET, Jun 25, 2008

[UpInArms]

55. Petroleum Inventories Report:

03. U.S. crude supply up 800,000 brls last week: Energy Dept.
10:37 AM ET, Jun 25, 2008

04. U.S. distillate supply up 2.8 mln brls: Energy Dept.
10:37 AM ET, Jun 25, 2008

05. U.S. gasoline supply down 100,000 brls: Energy Dept.
10:37 AM ET, Jun 25, 2008

[UpInArms]

84. Fed still blowing bubbles (or at least trying to)

65. FOMC says uncertainty about inflation remains high
2:10 PM ET, Jun 25, 2008

66. FOMC expects inflation to moderate this year and next
2:10 PM ET, Jun 25, 2008

67. Fed's Fisher dissents, votes to raise interest rates
2:10 PM ET, Jun 25, 2008

68. FOMC says downside risks to growth have diminished
2:10 PM ET, Jun 25, 2008

69. FOMC says inflation risks have grown
2:10 PM ET, Jun 25, 2008

70. FOMC holds interest rates steady at 2% as expected
2:10 PM ET, Jun 25, 2008

http://www.reuters.com/article/bondsNews/idUSN2543305920080625?sp=true

WASHINGTON, June 25 (Reuters) - The U.S. Federal Reserve held interest rates steady on Wednesday and voiced greater concern about inflation, taking a small step down a road toward higher borrowing costs.

The decision by the U.S. central bank, announced at the end of a two-day meeting, leaves the benchmark federal funds rate at 2 percent.

"Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased," the Fed said.

U.S. stock prices rose and prices for U.S. government bonds initially fell after the announcement. Bond prices, however, later reversed course as traders scaled back expectations for a rate hike at the Fed's next meeting in August.

"The Fed is going to need to start hiking interest rates at some point to start to deal with inflation," said Matt King, chief investment strategist with Bell Investment Advisors in Oakland, California. "That's a bigger risk than recession."

In its statement, the Fed said "overall economic activity continues to expand." After its last policy meeting on April 30, it described economy activity as "weak."

...more...

at some point never comes for these asswipes :grr:

[ozymandius]

3. Oil prices up slightly ahead of US stocks report

VIENNA, Austria - Expectations of diminishing U.S. oil supplies and concerns about high fuel costs lessening demand in America kept prices within a narrow band Wednesday, with crude up only slightly over previous closing levels.

.....

Light, sweet crude for August delivery was up 37 cents at $137.37 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. The contract on Tuesday rose 26 cents to settle at $137.00 a barrel.

In a weekly report Tuesday, MasterCard's SpendingPulse survey found that demand for gasoline in the U.S. fell 2.7 percent last week compared to the same week last year, and is off by an average of 3.6 percent over the last four weeks compared to the same period in 2007. A series of recent reports from the U.S. Energy and Transportation departments has offered concrete evidence American consumers are driving less in response to high prices.

.....

Analysts expect gasoline inventories to fall by 750,000 barrels while stocks of distillates, which include heating oil and diesel fuel, were projected to grow by 1.7 million barrels.

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

[ozymandius]

4. Opec shuns calls to produce more

Opec president Chakib Khelil has said the cartel of oil producing nations is pumping enough output, and that high prices are down to other factors.

He put the current price rises down to other factors outside Opec control, such as US pressure on Iran and the weak US dollar.

Mr Khelil was speaking after talks with European Union nations.

His comments sent oil prices above $138 a barrel during Tuesday trade, before prices dropped back in later trade.

New York's main oil futures contract - light sweet crude for August delivery - rose as high as $138.75 before dropping back to $137 at the end of the normal trading session.

http://news.bbc.co.uk/2/hi/business/7471376.stm

[ozymandius]

5. Gas prices ease in California and most of U.S.

Pump prices eased slightly in most of the country, including California, but analysts warned that the small respite may be short-lived, especially after oil traded higher Monday in spite of a pledge by Saudi Arabia to increase production.

After a weekend summit where producers and oil-consuming nations discussed head-spinning crude prices, Saudi Arabian officials said that they would raise output by 200,000 barrels a day to 9.7 million.

.....

On an even happier note for drivers, the Internal Revenue Service said Monday that it was raising the automobile mileage deduction for the last six months of 2008. For business vehicles, the rate is increasing to 58.5 cents a mile from 50.5 cents. For individuals deducting medical and moving expenses, the rate is rising to 27 cents a mile from 19 cents.

Analysts offered few assurances that gasoline prices had finally peaked.

http://www.latimes.com/business/la-fi-gas24-2008jun24,0,1098931.story

[ozymandius]

13. House fails to move gas pump price gouging bill

WASHINGTON - House Democrats failed Tuesday to resurrect a bill to punish price gouging at the gas pump, while maneuvering to block Republican attempts to expand offshore drilling, an idea gaining in popularity amid $4-a-gallon gas prices.

Action on legislation that would assure continuation of the ban on oil and natural gas drilling in most of the country's coastal waters was put off until later this summer after it became increasingly clear that Republican lawmakers may have the votes to lift the drilling moratorium.

.....

Meanwhile, House Democratic leaders failed to get the two-thirds vote needed to push through a measure that would have made gasoline and diesel fuel price gouging a federal crime, with penalties of up to $2 million for individuals and possible jail time. The vote was 276-146.

The House has passed similar gouging legislation previously, as has the Senate, only to be abandoned. Supporters of the bill argued that gouging is widespread, while opponents said it is not and would be difficult to prove even if it occurred.

http://news.yahoo.com/s/ap/20080625/ap_on_go_co/congress_gasoline_11

[fasttense]

25. Yeah but they had no problem passing bills giving away our 4th Amendment rights

and protecting the telecom monopolies and the bushes from law suits and criminal prosecution.

[ozymandius]

27. More and better Democrats is what we need.

I felt the same sentiment when reading this story. My reaction to spit venom at these f*cking clowns, supposedly doing the people's work, was visceral to the point that I rediscovered a new reservoir of outrage.

[UpInArms]

50. World oil prices may hit $186 a barrel in 2030: EIA

09. World energy consumption may rise by 57% by 2030: EIA
9:10 AM ET, Jun 25, 2008

10. World oil prices may hit $186 a barrel in 2030: EIA
9:09 AM ET, Jun 25, 2008

[Hugin]

54. There's something fishy going on here... (Correction)

Okay... I'll buy that consumption will rise by more than half by 2030. I maintain supporting that increase
by developing renewables is do-able.

But, why is the crude price estimate so low for 2030? Only $186/b? Are they LYING to us now? When oil has
increased by more than 3(Corrected to -FIVE-) times in the last 7 years? Hmm...

If 2030 at more than twice the demand is $186, then right now it -should- be (excluding speculation) ~$93/b (Corrected to $55.26/b).

I'm sure there is more fishiness if the numbers were corrected for the price/b prior to 2000.

Makes my head hurt.

[Hannah Bell]

69. good catch.

[ozymandius]

6. Fed talking tough on the threat of inflation

WASHINGTON - Federal Reserve Chairman Ben Bernanke and his colleagues are updating Teddy Roosevelt's admonition to speak softly and carry a big stick. The Fed policymakers are starting to raise their voices while brandishing the stick even though they don't appear ready to use it.

When the Fed concludes a two-day meeting on Wednesday, it is widely expected that the central bank will express more concerns about inflation and in that way signal that rate increases could be on the way.

However, at the same time, private economists are widely in agreement that the Fed will not actually start raising interest rates, given how weak the economy is at the moment.

"The Fed is caught between a rock and a hard place," said Sung Won Sohn, an economics professor at California State University. "The economy seems to be slipping into a recession at the same time that inflation is getting worse."

.....

The opposing forces of weak growth and recession put the central bank in a bind. Its main policy tool — changes in interest rates — can only address one of those problems at a time. The Fed can cut interest rates to spur consumer and business spending and economic growth or it can raise interest rates to slow spending and growth and ease inflation pressures.

http://news.yahoo.com/s/ap/20080625/ap_on_go_ot/fed_interest_rates

[ozymandius]

16. Whatever Happened To Inflation Targets?

Remember when Ben Bernanke was a fan of a more transparent Fed, with bright lines on where inflation should be and how to get there?

"Inflation-targeting countries have achieved lower inflation rates and lower inflation expectation," he wrote in his 1999 book Inflation Targeting: Lessons from the International Experience. "There is also evidence that the use of inflation targeting increases public understanding of monetary policy, improves policy-maker accountability, and provides a discipline-enhancing 'nominal anchor' for monetary policy." In 2003 Bernanke said targeting in the 2% range seemed "the optimal long-run average inflation rate" for the U.S.

But since taking office, you'll hear no such comments from the chairman. The reason? Reality. While the European Central bank's primary concern is controlling inflation, the American Federal Reserve has the dual responsibility of maintaining both price stability and employment, making Bernanke's job a tough one.

.....

As Bernanke knows, there's a strong case to be made for targeting. Countries including the United Kingdom, Australia, Sweden, Canada and New Zealand all use it in their monetary policy. Economists Manfred J.M. Neumann and Jürgen von Hagen argue that by reducing drastic volatility in short-term interest rates, inflation targets "have helped monetary policymakers to focus less on transitory, short-term developments and adopt a steadier course of monetary policy."

http://www.forbes.com/business/2008/06/24/inflation-fed-bernanke-biz-beltway-cx_jw_0625fed.html

[ozymandius]

7. Barclays announces $8.85 billion share issue

LONDON - Barclays PLC hopes to raise $8.85 billion through a share issue that will draw in new investment from the Middle East and Asia, the company said Wednesday.

The company said the cash would bolster its financial position after losses from the U.S. subprime crisis and allow it to capitalize on current disruptions in financial markets.

Barclays is the third big British bank to go to its shareholders to shore up its financial position. Royal Bank of Scotland recently raised $23.6 billion in Europe's biggest-ever rights issue, and HBOS PLC has announced a $7.9 billion rights issue.

Barclays, Britain's third-largest bank, said its plan would bring in new investment from Sumitomo Mitsui Banking Corp., the Qatar Investment Authority and Challenger, a company representing Sheikh Hamad Bin Jassim Bin Jabr Al-Thani, the chairman of Qatar Holding, and his family.

.....

The bank has reported write-downs of 2.6 billion pounds ($5.1 billion) through the first quarter of this year related to the subprime lending crisis in the United States, a smaller hit than reported by some of its peers, including RBS. The company said the share issue would boost its capital and equity ratios above its long-term target, and it intends to keep them at that level "particularly while current market turbulence persists."

http://news.yahoo.com/s/ap/20080625/ap_on_bi_ge/britain_barclays

[ozymandius]

8. Countrywide shareholders set to vote on BofA takeover

LOS ANGELES - Bank of America Corp.'s takeover of Countrywide Financial Corp. could be wrapped up as early as next week, but first it must clear one last hurdle — getting the OK from the struggling mortgage lender's shareholders.

Countrywide shareholders are scheduled to vote on the proposed buyout Wednesday morning during a special meeting at the lender's headquarters in Calabasas, Calif.

The all-stock deal, valued in January at about $4 billion, is now valued at around $2.8 billion, reflecting a decline in Bank of America's stock price over the last six months.

Countrywide's board, which has unanimously backed the transaction, needs stockholders to vote a majority of the company's outstanding shares in favor of the deal.

.....

Illinois Attorney General Lisa Madigan's office said late Tuesday that she plans to file a civil lawsuit Wednesday against Countrywide claiming the lender engaged in "unfair and deceptive" practices to get homeowners to apply for risky mortgages far beyond their means.

http://news.yahoo.com/s/ap/20080625/ap_on_bi_ge/countrywide_bank_of_america

[ozymandius]

9. Ill. AG to sue Countrywide over lending practices

CHICAGO - The nation's biggest mortgage lender engaged in "unfair and deceptive" practices to get homeowners to apply for risky mortgages far beyond their means, according to a civil lawsuit Illinois' attorney general planned to file Wednesday.

The lawsuit against Countrywide Financial Corp. — planned for the same day shareholders were scheduled to vote on the company's takeover by Bank of America Corp. — stems from information from documents subpoenaed by the state beginning last fall, as the number of foreclosures nationwide began to skyrocket.

"Countrywide's conduct has contributed to the high number of foreclosures in Illinois and caused significant harm to the public, the market, and scores of Illinois borrowers and homeowners," according to a draft of the lawsuit provided by Attorney General Lisa Madigan's office Tuesday evening.

.....

Madigan spokeswoman Robyn Ziegler said the lawsuit would be filed Wednesday in Cook County Circuit Court. In the complaint, Madigan says that Countrywide offered unfair loans with risky features, used misleading sales techniques and encouraged employees and brokers through incentives to sell more high-risk loans.

.....

As the nation's largest mortgage lender and servicer, Countrywide has been under scrutiny by federal and state authorities. It also faces numerous other lawsuits related to its lending practices.

http://news.yahoo.com/s/ap/20080625/ap_on_bi_ge/countrywide_financial_lawsuit

[ozymandius]

10. Treasury bonds spike after more economic doubt

NEW YORK - Treasury bonds rose Tuesday on a report that consumer confidence fell in June more than economists expected, the latest another indication that higher gas and food prices are taking a toll on consumer spending. The market was also awaiting the results of the Federal Reserve's two-day meeting on interest rates.

Prices also got a boost from a successful auction of new 2-year notes.

The Conference Board reported that its U.S. consumer confidence index sank to 50.4, far below forecasts of 56.5 and May's reading of 58.1. The research group also said its reading of consumers' expectations hit an all-time low as the economy continues to struggle.

With consumer spending accounting for two-thirds of the economy, the report raised concerns about economic growth in the coming months. Investors reacted by pulling their money out of stocks and into the relative safety of government bonds.

The benchmark 10-year note rose 20/32 to 98 9/32, and its yield fell to 4.09 percent from 4.17 percent late Monday, according to BGCantor Market Data. Yields move in the opposite direction from prices.

http://news.yahoo.com/s/ap/20080624/ap_on_bi_ge/bonds

[ozymandius]

11. Stocks head for higher open ahead of Fed decision

NEW YORK - U.S. stocks headed for a higher open Wednesday as investors awaited economic reports and the Federal Reserve's latest decision on interest rates.

Though findings are due on durable goods orders, new home sales and domestic oil inventories, investors will likely focus on the Fed decision and the comments from policymakers about the economy and the threat of inflation.

Wall Street expects the Fed will stand pat on rates after cutting rates quickly earlier this year, and to signal it could start raising rates. But most market watchers contend the central bank is hesitant to begin hiking rates now, even with rising prices, because an increase could hobble the economy.

At its last meeting, in April, the Fed lowered rates by a quarter point, leaving the federal funds rate at 2 percent. When the central bank began its campaign to inject the economy with cheaper money in September the funds rate, which banks charge each other for overnight loans, stood at 5.25 percent. Policymakers were worried that tightening credit over fears souring mortgage debt would destabilize the economy.

.....

Dow Jones industrial average futures rose 52, or 0.44 percent, to 11,865. Standard & Poor's 500 index futures rose 7.20, or 0.55 percent, to 1,322.70, and the Nasdaq 100 index futures advanced 9.75, or 0.51 percent, to 1,921.25.

http://news.yahoo.com/s/ap/20080625/ap_on_bi_st_ma_re/wall_street

[UpInArms]

12. dollar watch

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

Last trade 73.202 Change -0.051 (-0.07%)

FOMC Preview: Fed Decision Can Have a Big Impact on the US Dollar

http://www.dailyfx.com/story/topheadline/FOMC_Preview__Fed_Decision_Can_1214323426134.html

The summer doldrums may not last for long with the Federal Reserve interest rate decision right around the corner. Over the past few weeks, many currency pairs including the EUR/USD and GBP/USD have been trading in a range as the market tries to figure out how central banks will respond to the continual rise in inflationary pressures.

After surprising the markets with hawkish comments on April 30th, currency traders not only expect the Federal Reserve to pause on Wednesday, but to also raise interest rates before the end of the year. The tone of the FOMC statement and more specifically the degree of the Fed’s hawkishness will play a big role in determining where the US dollar is headed next. Dollar bulls will not be happy with anything short of unambiguously hawkish comments from the Federal Reserve. Anything close to a wishy-washy statement will be dollar bearish. For the dollar to continue to rally, markets need reassurance that rates will be increased over the next few months.

Federal Reserves Draws an End to the Easing Cycle

Although the market is primarily focused on finding forward-looking hints in the FOMC statement, traders should not lose sight of the fact that the Federal Reserve will be drawing an end to their 8 month long easing cycle. Since August, the central bank has cut interest rates by 325bp from 5.25 percent to 2.00 percent in an aggressive attempt to alleviate the credit crisis. Unfortunately the economy has not turned around but at the same time, a second major financial crisis has been averted. Even though the unemployment rate hit 5.5 percent in May, the biggest increase in more than 10 years, there hasn’t been another major blowup in the banking sector. Inflation on the other hand has gone through the roof as oil prices hit an intraday high just shy of $140 a barrel while corn prices hit record highs. Since the beginning of the year, crude oil prices have increased 45 percent while corn prices are up more than 60 percent causing companies across the nation to increase prices or add fuel surcharges. The Federal Reserve’s biggest fear at the moment is that these price increases will stick, meaning that these same companies who have increased prices will need a lot of convincing before agreeing to reduce them. That is why the Federal Reserve may be in such a rush to raise interest rates because once inflation sticks, it will be very difficult to reverse and because of that, the impact on growth over the long term can be more damaging than the impact of an interest rate hike. The futures market is pricing in at least two quarter point rates hikes before the end of the year.

How Many Rate Hikes are Priced In?

According to the latest Fed Fund futures, there is an 88.6 percent probability that interest rates will be at 2.25 percent on September 19th and a 67 percent chance that it will be at 2.50 percent on October 29th. Although the future contracts are pricing in a near guarantee of tightening before the end of the year, there has been a lot of speculation that the futures contracts are overestimating rate hikes because traders who were banking on 1.50 or 1.75 percent interest rates have been forced to reverse their positioning.



...more...

How to Trade the Fed Rate Decision

http://www.dailyfx.com/story/bio1/How_to_Trade_the_Fed_1214343433035.html

The FOMC interest rate decision is less than 24 hours away and the currency market is itching for a breakout. FX option volatilities are nearing 4 month lows and whenever they get to such extreme levels, a sharp expansion in volatility is usually right around the corner. USD/JPY for example has been fluctuating within a slightly more than 100 pip trading range since last Thursday while the EUR/USD has been trading within a 200 pip range. The Federal Reserve interest rate decision is one of the most market moving events in the currency market and given the recent contraction in volatility, we are almost certain that currency traders will not be disappointed by the volatility induced by tomorrow’s announcement. For the first time since August, the Federal Reserve is expected to leave interest rates unchanged. With inflationary pressures continuing to grow they have no choice but to put an end to their 8 month long easing cycle. However their decision tomorrow will not be an easy one because the outlook for growth remains grim. The Conference Board reported today that consumer sentiment fell to the lowest level in 16 years, while house prices dropped by the most on record and manufacturing in the Richmond area slowed to a 4.5 year low (Full FOMC Preview). With this in mind, the Federal Reserve will have a particularly difficult time picking their words for the FOMC statement. There is just as much chance that they will run out with their guns blazing by being unambiguously hawkish as they may try to buy themselves time before the August meeting. The best way to trade the FOMC meeting is reactively, or following the Fed announcement. Given the significance of this meeting and the fact that market is skewed heavily in favor of a rate hike before the end of the year, there should be decent continuation a few hours following the announcement and most likely for remainder of the week. Before the FOMC decision, durable goods orders and a report on new home sales are due for release. Mortgage applications have been on the rise, so there is a decent chance that new home sales could rebound.

...more...

[ozymandius]

14. Ford's Volvo Car unit says to cut 2,000 jobs

STOCKHOLM (Reuters) - Volvo Car Corporation, owned by struggling auto giant Ford Motor Co (F.N), said on Wednesday it would cut 2,000 jobs across its operations in an effort to trim costs.

Volvo Cars said it planned to cut its work force by 1,400 white collar staff and 600 blue collar workers to offset the impact of a weak auto market and surging raw material costs.

The company has long been struggling with negative currency swings, mainly due to a weaker dollar, as well as steep rises in steel prices, but recently the situation had worsened, it said.

http://news.yahoo.com/s/nm/20080625/bs_nm/ford_volvo_dc

[DemReadingDU]

15. The collapse in auto makers' securities is about finance as much as car sales.

6/24/08 Credit Crisis Moves Westward By RANDALL W. FORSYTH

IS THE CREDIT CRISIS about to move from Wall Street to Detroit?

some snippets...

Shares, debt securities and credit derivatives of General Motors (ticker: GM) and Ford Motor (F) have been pummeled in the last few days, with shares of GM plunging to levels not seen since dismal days of the 1973-74 recession and bear market.


Moody's Investors Service and Standard & Poor's Friday warned that the credit ratings of GM, Ford and Chrysler (now also owned by Cerberus) face the potential for downgrades. Yet the credit default swap market showed how truly parlous the auto makers' situations really are.

The cost to insure $10 million of GM debt against default for five years rose to $2.8 million Monday from $2.7 million Friday (on top of a $500,000 annual fee), according to CMA Datavision, as reported by DJ Newswires. For Ford, the cost of insuring $10 million of debt jumped to $2.65 million from $2.4 million, in addition to the $500,000 annual fee.

Such huge costs to insure GM and Ford debt against default indicate the market's assessment of their financial conditions is perilous indeed. Which raises the obvious question in the post-Bear Stearns rescue world: What happens if GM and Ford find themselves out of cash with no sources of financing? How does the Federal Reserve refuse the Detroit car makers when it provided financing for a Wall Street broker-dealer's takeover by the descendant of the Morgan Bank?

The widely misquoted statement of former GM Chief Executive Charlie Wilson held that what was good for General Motors was good for the U.S. The precedent of the Chrysler loan guarantees from the federal government nearly three decades ago stands. If JPMorgan Chase got taxpayer backing to take over Bear Stearns, how can GM or Ford be denied?

The sad truth about the American economy is that it has shifted from producing things to moving money; in other words, from manufacturing to finance. That's not only true in New York but even in Detroit. The profound consequences of this transition only now are becoming apparent.

more...
http://online.barrons.com/article/SB121428092415099441.html?mod=googlenews_barrons

[ozymandius]

23. If wishes were horses...

then every MBA program in the world would throw away its textbook, revamp its curriculum and start anew. How many MBA graduates have espoused the virtues of this "new economy"? Too many have crossed my path, staking the credibility of their degree on the virtue of economic expansion through investment in the "new" while jettisoning the old world notion of work, and wealth growth, through manufacturing.

We really need to disenthrall ourselves from the idea of growth-through-money-moving.

[Warpy]

34. Ozy, we're about to have that done for us

if my nose is still detecting what's in the air.

All the money-moving wealth of the past 30 years has been false wealth, just a run up in numbers with nothing to back them up but hot air and wishful thinking. Look at the derivatives market for an example of this: it's estimated derivatives represent $10trillion in total "wealth," yet they are intrinsically worthless pieces of paper that have simply been bid up by a bunch of Rover Boys in the financial industry to convince the obscenely wealthy that they're getting obscenely wealthier.

Much of the "wealth" held by the wealthiest is being held up by hot air and wishful thinking, especially if they've moved funds to hedge funds in order to give themselves the illusion of the sort of wealth increase the Dow showed in the 90s.

In any case, as people begin to recognize the Emperor is as nekkid as a jaybird and that paper worth is worth the paper it's printed on, we are going to live in some very interesting times.

The one positive story I've read recently is the proposed startup of limited manufacturing here because shipping on items from China is getting prohibitively expensive. We'll still get the plastic WalMart junk, but we're going to have to start making our own refrigerators and furniture again. Hallelujah.

[ozymandius]

37. Oh! But that's called "Protectionism"!

At least, it is, according to some supply-siders out there. To me - it's just a practical approach to girding the economy and adapting to the new realty of our situation. I have been wondering what the future of places like Big Lots and Dollar Tree will become since 97% of the items they sell are made in China. Perhaps they will only carry pencils and masking tape? Cheap, crappy toilet paper, maybe? (No pun intended.)

[radfringe]

45. heard some reich-winger kool-aid drinker whine

about "protectionism" on the radio yesterday

and there I am driving down the road yelling "AND WHAT THE HELL IS WRONG WITH PROTECTING OUR JOBS??? OUR MANUFACTURING BASE???"

[Hugin]

48. Um, my guess is...

Nothing. :)

[Tansy_Gold]

56. Well, I still think my analogy holds true, and what we may see won't be

"protectionism" at all, but just a shift back to manufacturing and real services, which is what a healthy economy should be based on.

In contrast, our economy has been like the people moving into the new house: They gotta buy EVERYTHING and they gotta buy it NOW, so it all goes on the credit cards with the expectation of paying it all off over the next several years.

Problem is, too much of the cheap plastic crap wears out long before it's paid for -- and this sometimes goes for cars and houses and refrigerators and, yes, couches, too -- but the bills are still there. So since the income is all outgoing to pay for the stuff already bought, there's no cash left to buy replacements. It goes on the credit card, and essentially these people are living on their future earnings. If the future doesn't contain any earnings -- lay-offs, outsourcing, etc. -- then the whole house of cards starts to collapse.

In order to rebound, the individuals have to learn to do without the steady stream of cheap plastic crap. They have to trim the budget to match the income or find additional sources of income that don't involve adding to the debt. Home equity loans and refinancings do generate "income" that can generate consumption, but they also increase debt and do NOT solve the problem; they make it worse. And of course on a national scale, we've seen exactly the same situation.

The U.S. economy, however, still has the capacity to restore itself. Whether it will or not remains to be seen.

Protectionism, to me, is the passing of legislation that unfairly protects the businesses and industries at substantial cost to the consumer. On the other hand, growing local industries is intended to SAVE the consumer as well as the industry, so the wingnuts have absolutely no understanding of the principles behind the rhetoric they spout.

The biggest whiners, of course, are those who insist we can't possibly go back to the way it used to be -- air travel as a luxury, using public transportation instead of every family having four vehicles, fresh fruit year 'round regardless of normal "season," etc. -- and at the same time they whine about "the good ol' days" in terms of moral absolutes and self-reliance and so on. They have no clue.

I wrote something yesterday about believing that those who have benefited most from the various bubbles of the past 20-30 years will be most negatively impacted by any crash in the near future. But I think the flip side of that is that those who have benefited LEAST will also be impacted least, at least on the general average.

There is also some comfort to be taken with a full understanding of how we got to this predicament and what will happen when we emerge on the other side. The gloom- and doomsayers tend to a certain extent to paint a picture of total American collapse followed by a world dominated by a nefarious all-powerful government composed of a diabolical junta that's a cross between Chinese slavemasters from Nike and Gap factories and the Taliban. I don't think that's going to happen, any more than the Spanish, French, Dutch, or British national identities disappeared with the collapse of their economic empires. "America" may be very different in, say, 2025, than it is in 2008, but I don't think it will be totally gone. And who knows -- it may even be a better America!


Tansy Gold, who is not on drugs and has not been drinking this morning but has no friggin' idea where she came up with all this cockamamie OPTIMISM!!!! ;-)

[Hugin]

58. It goes back to understanding...

the difference between "Want and Need".

Also, the expression "That's so -Insert Decade-" needs to go away. Buy -good- stuff! Quality stuff! Don't be driven
by what others think of you based on external possessions. Be happy with what you've got and as the Guardian of the
Grail says in Indiana Jones... "Choose Wisely".

[Hugin]

47. Couches -will- save America!

"start making our own refrigerators and furniture again"

:patriot:

[Demeter]

89. That's the Best News I've Heard Since 11/2000, Warpy!

Let's see the great unwinding begin!

[Hugin]

43. Hear Hear, Ozy.

I'm in line with that track of thought.

[ozymandius]

17. Americans' loss of confidence: Worse even than it looks

Like a hypnotherapist, the Federal Reserve keeps trying to talk us into an economic recovery.

.....

But the latest survey of consumer confidence shows the Fed's relatively hopeful message isn't resonating.Nixon Americans feel downright terrible about the economy as it is, and their expectations for the near future are even more depressed, according to the Conference Board's June consumer-confidence report, issued on Tuesday.

.....

Worse, the expectations index in the survey -- how people figure things will look in six months -- dropped literally off the chart, to 41.0. That was the lowest figure in the 40 years of the survey, and broke through the previous low of 45.2 reached in December 1973 -- just as the economy was beginning to plunge into recession from the effects of the surge in oil prices that followed the Arab embargo announced that fall.

But something else in the latest survey really disturbed Lynn Franco, director of the Conference Board's consumer research center in New York, she tells me: The percentage of people who expect their income to drop in the next six months jumped to a record 15.9%. Even in December 1973, when consumers' overall expectations for the economy were dismal, only 10.8% expected their income to decline in the following six months.

Just 12.3% of consumers are expecting a rise in income over the next six months, compared with 19.4% a year ago.

http://latimesblogs.latimes.com/money_co/2008/06/like-a-hypnothe.html

---

Attaboy! Sinking lower than Nixon ever did - again!

[Dr.Phool]

28. It's all the media's fault. Talking us into a recession and all.

I just returned for a trip to Bumfuck, South Carolina to visit my Limbaugh and O'Reilly addled father. When he's not ranting about "environmental wackos", he's cutting loose on the media talking us into recession.

I finally had to cut loose on him. "You're sitting here in one of the lowest paid states in the country. Do you need the media to tell you what the sign on the gas station says? Do you need the media to tell you what it cost you for a loaf of bread, or eggs, or milk, versus a year ago? You own 2 gas wells. You watch the price of natural gas on CNBC all day long. Have you figured out that it's more than doubled in the last year? People, especially around here, don't have any money left!"

Goddamn liberal biased facts.

[Hugin]

49. That and those darned kids on the Internets tubes...

Blarging and blocking all the dump trucks. :silly:

[UpInArms]

18. Home-price declines will eat into boomer retirement nest eggs: report

http://www.marketwatch.com/news/story/home-price-declines-eat-baby-boomer/story.aspx?guid=%7B408882CB%2D7FF8%2D4473%2D8E46%2DE0483DC5A4D5%7D

CHICAGO (MarketWatch) -- The collapse of the housing bubble will likely have drastic implications on the wealth and retirement of certain baby boomers, according to a report Tuesday by the Center for Economic and Policy Research.

The median household headed by those between 45 and 54 in 2009 will have about 25% less wealth than the median household of that age in 2004, according to the report. That household's wealth will decline to $113,268 in 2009, from $150,113 in 2004.

And that's if housing prices remain at the level they were in March.

The report, "The Housing Crash and the Retirement Prospects of Late Baby Boomers," extrapolates from data in the Federal Reserve's 2004 Survey of Consumer Finances (the most recent available). The authors also used the Case-Shiller home price index for their estimates. Read the report (PDF).

<snip>

The picture gets even worse if real home prices fall more. If prices, adjusted for inflation, fall 10% by 2009, the median household would see a 35% drop in wealth compared with the same age group in 2004; and if prices fall by 20%, there would be a 46% difference.
Renters were better off in all three scenarios than homeowners, according to the report. Renters haven't experienced home-price gains and didn't have an opportunity to tap home equity, said Dean Baker, co-director of CEPR and co-author of the report.

...more...

[ozymandius]

24. Wealth Evaporates as Gas Prices Clobber McMansions (dated but relevant)

June 9 (Bloomberg) -- Sky-high gasoline prices aren't just raising the cost of Eugene Marino's 120-mile (193-kilometer) round-trip to his job in the Washington area. They're reducing his wealth, too.

House prices in his rural subdivision beyond the Blue Ridge Mountains in Charles Town, West Virginia, have plunged as commuting expenses have soared. A four-bedroom home down the street from his is listed for $239,000, after selling new for $360,000 five years ago.

Homeowners in the exurbs aren't the only ones whose assets have taken a hit because of the surge in energy costs. Companies such as General Motors Corp. are writing off billions of dollars in plants and equipment that are no longer viable in an age of dearer oil. The destruction of wealth and capital will weigh on U.S. growth for years to come.

.....

Emerging suburbs and exurbs -- commuter towns that lie beyond cities and their traditional suburbs -- grew about 15 percent from 2000 to 2006, nearly three times as fast as the U.S. population, as Americans moved further out in search of more affordable houses or the bigger ones that are sometimes derided as McMansions.

``It was drive until you qualify'' for a mortgage, says Robert Lang, director of the Metropolitan Institute at Virginia Tech in Alexandria, Virginia. ``You can't do that anymore. Your cost of transportation will spike too much.''

http://www.bloomberg.com/apps/news?pid=20601109&sid=a4kOXcpI3dQg

[ozymandius]

26. from Calculated Risk: story link to post above

More on the Decline of the Exurban Lifestyle

Peter Goodman at the NY Times writes about an upscale Denver exurb that is getting hit hard by a combination of the housing bust and high oil prices: Rethinking the Country Life as Energy Costs Rise. Here is a great quote:

“Living closer in, in a smaller space, where you don’t have that commute,” said. “It’s definitely something we talk about. Before it was ‘we spend too much time driving.’ Now, it’s ‘we spend too much time and money driving.’ ”

Michael Corkery at the WSJ writes in the Development blog: Rising Gas Prices Crushing Housing Recovery in Inland Empire

Even though falling prices in California’s Inland Empire are making homes more affordable, rising gasoline prices are crushing hopes of a housing recovery in this area, east of Los Angeles.
...
“Land that was purchased with expanding metro areas in mind has already been hard hit in value,” says (Deutsche Bank analyst Nishu Sood). ”Sustained higher gas prices could render it effectively worthless.”

http://calculatedrisk.blogspot.com/2008/06/more-on-decline-of-exurban-lifestyle.html

[Tansy_Gold]

60. Back in 1987. . . ..

the Town of Buckeye, Arizona, annexed thousands and thousands and thousands of acres, making it the second-largest municipality in Arizona in terms of acreage, even though it had a population somewhere under 5,000. "Someday speculators are gonna build lotsa houses out here and we're gonna get rich off the tax base!" the town councilmembers proclaimed as they rubberstamped the speculators' annexation petitions.

By 2000, when the speculators actually started building houses, putting in roads and freeway exits and stoplights and schools and retail centers, I wondered, "Where are these people going to work? Are they all going to commute to Phoenix, Glendale, Peoria, on a freeway that can't handle existing traffic?"

Thousands of homes went up like mushrooms, literally a few hundred yards from my house. Wal-Mart came in and Lowe's and heaven only knows who else. More houses went up and more and more and more. They were crackerboxes, shoddily built on tiny lots, but they sold and sold and sold.

And people commuted. There were no jobs in Buckeye. There were a few in nearby Goodyear and Avondale, more in Glendale and Peoria. But most of the jobs were retail or service: restaurants, car washes, real estate agencies, doctors and dentists and physical therapists, beauticians and nail salons.

The new housing developments that started in 2001 sit 30 miles on a jam-packed freeway from downtown Phoenix. Buckeye made the news last week because it can't handle the rising tide of foreclosures and home abandonments in those developments that went up with such fanfare less than a decade ago.

I left in 2006. I haven't been back.


Tansy Gold

[Hugin]

62. Dayum...

If you're talking about the same Buckeye, AZ I looked up... The Streets haven't even been shown on the map
yet, but, there's already 1927 properties listed as being somewhere in the foreclosure process.

:whoowhee:

[Tansy_Gold]

76. That's the same Buckeye

Dayum is right.

Sad thing is, there were people who saw this coming years before it happened, but the various members of the town council and several very short-sighted mayors (Mike "I wanta live outside town so annex my property for me" Baker, Dusty "The Town Drunk" Hull, Bobby "It'll bring more business to my crappy motel" Bryant) didn't care.

The worst thing, though, is that the developers went in and bulldozed the desert to put up these little boxes made of ticky tacky. Just levelled it. Made no attempt whatsoever -- beyond very limited watercourse preservation mandated by state and federal laws -- to maintain any of the natural vegetation, land contours, nothing. Several huge golf courses had to go in, the aforementioned retail plexes, and all those crappy little houses, one on top of another.

Don't get me started; my earlier optimism has faded.


Tansy Gold

[ozymandius]

80. Good Gods!

Search Results in Maricopa County
35,126 Properties match your search.

http://www.all-foreclosure.com/countysearch.htm?&state=Arizona&county=Maricopa&code=AZMA

[Hugin]

82. I saw a property on there which was...

146% OVER Estimated value.

That's when I stopped reading. :scared:

[TalkingDog]

70. And the hardscrabble wastrels are getting restless:

http://www.wsoctv.com/news/16678908/detail.html

snip:
Several people in a south Charlotte gated community woke up to vandalism Sunday morning.

snip:
Eyewitness News crews on the scene said one vehicle even had profanity painted on it. A witness told Eyewitness News an SUV was painted with the phrase “Share the wealth.”


/snip:
very short story

I agree with the police, it's probably bored kids because as the Spousal Unit pointed out, real Anarchists wouldn't ask.......

[ozymandius]

19. Dow Chemical Raises Prices for Second Time in a Month

The Dow Chemical Company said Tuesday that it was raising prices for the second time in a month to offset a “relentless rise” in energy costs, a sign that companies may increasingly have to pass on price increases to their customers.

The increase of as much as 25 percent — the largest in the company’s history — comes after a 20 percent rise last month that the company said did not go far enough given the continuing surge in energy prices.

Dow, which makes products ranging from pesticides to plastic wraps, also said it would impose freight surcharges of $300 for each truck shipment and $600 for each rail shipment beginning Aug. 1 in the United States. In addition, it will scale back production in plants across North America and Europe.

.....

Dow’s announcement is the latest indication that companies are beginning to pass along the burden of high energy prices to consumers. Until now, those prices had largely been absorbed by company profits because market competition prevented retailers from increasing prices at their stores even as skyrocketing costs continued to strain earnings. But extreme pressure is building in the production chain.

http://www.nytimes.com/2008/06/25/business/25dow.html?em&ex=1214539200&en=8c9298be183dfb40&ei=5087%0A

[ozymandius]

20. The Ratings Racket

How badly do the major credit-rating firms have to perform before investors stop using their services? That's a trick question, because investors aren't allowed to stop using them. State and federal regulations that lock in the rating oligopoly remain untouched by recent "reforms."

The major credit-rating agencies – Standard and Poor's, Moody's and Fitch – assess the likelihood of default on corporate bonds and other debt instruments. Their famous failures in rating mortgage-backed securities have led to several recent efforts at reform. New York Attorney General Andrew Cuomo struck a settlement with the big three requiring them to charge for preliminary research, not merely for a final rating. The hope is that they will not feel pressured simply to sell good grades to the issuers of the securities they rate.

At the federal level, since the enactment of a 2006 law to encourage more competition, the SEC has anointed seven other firms as "Nationally Recognized Statistical Rating Organizations" (NRSROs), the same favored status enjoyed by the big three. Two weeks ago, the SEC proposed more disclosure of the firms' track record and more investor-friendly descriptions of rated securities. If the SEC now follows through at a meeting today on its plans to eliminate regulations requiring the use of NRSRO-rated securities, investors will be freer to discover the best methods for judging credit risk.

http://online.wsj.com/article/SB121435051391301517.html?mod=googlenews_wsj

[ozymandius]

21. SEC Wants Investors to Reduce Reliance on Ratings

June 24 (Bloomberg) -- The U.S. Securities and Exchange Commission, responding to losses on top-rated mortgage securities, will push investment funds to rely on criteria such as an asset's liquidity and risk instead of credit rankings.

The SEC will propose tomorrow that references to credit ratings in its rules be replaced ``by something that refers to, say, the characteristic for which the credit rating was proxying: liquidity, volatility, probability of loss,'' Erik Sirri, who heads the SEC division of trading and markets, said at a conference in Washington.

.....

The world's largest banks and securities firms absorbed almost $400 billion of losses and writedowns since the start of 2007 after home loans made to the least creditworthy borrowers started defaulting and began infecting mortgaged-backed assets that carried the highest ratings.

Pension and bond funds also reported losses after buying mortgage securities that offered higher returns than government debt with the same AAA rankings. Lawrence White, a professor at New York University's Stern School of Business, said the SEC has been ``outsourcing'' regulation by incorporating ratings into its rules.

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

[DemReadingDU]

22. Mike Whitney: Gas-Pump Gouging; Just Don't Blame The Saudis

6/24/08 Gas-Pump Gouging; Just Don't Blame The Saudis By Mike Whitney

I've seen this bad movie before. It's the Enron movie, which hit the West Coast power-markets like a bomb because the federal government was asleep at the switch. Now it's happening again with oil prices." Rep. Jay Inslee D-WA

There is no oil shortage, not yet at least. That doesn't mean we're not quickly sliding towards Peak Oil. We probably are, but that has nothing to do with today's gas prices. The reason oil has skyrocketed to nearly $140 per barrel is because of speculation; rampant, "unregulated" speculation. The peak oil doom-sayers are simply confusing the issue. This is not about shortages or scarcity; it's about gaming the system to fatten the bottom line. The whole scam is being executed with excruciating precision by the same carpetbagging scoundrels who engineered the subprime fiasco; the investment bankers. The Wall Street Goliaths are using the futures market to recapitalize their flagging balance sheets after sustaining massive losses in the mortgage-backed securities boondoggle. That's the whole thing in a nutshell. Now they're on to their next swindle; distorting the futures market with humongous leveraged bets on food and oil.

MarketWatch summed it up like this on Monday:

NEW YORK (MarketWatch) — Speculators now account for about 70% of all benchmark crude-oil trading on the New York Mercantile Exchange, up from 37% in 2000, according to congressional findings cited in a Wall Street Journal report Monday.


There's no shortage, no scarcity. In fact, oil is being deliberately kept off the market to keep prices high. Consider this: if supply isn't keeping up with demand then why aren't there any lines at the gas stations like there were during the '70s?

..it also explains where billions of dollars from the Fed’s “auction facilities” are going. After all, they’re certainly not going into mortgage-backed securities anymore, and MBS represented nearly 70 per cent of bank revenue. So, where would a desperate banker turn if his main revenue-stream had dried up and the corporate bond market was frozen solid?

How about oil futures and commodities; the only game in town?

Why would an investment banker care if the economy tanks and people in Asia starve? That's not his problem. His job is to keep the shareholders happy, right?

As the MarketWatch article suggests, oil prices are inflated by about 70 per cent. Bernanke could stop Wall Street's feeding frenzy in short-order by just raising interest rates by 50 basis points at the next FOMC meeting on Wednesday. That would poke a hole in the oil bubble and send the speculators scuttling for the exits. But don't count on it. There's as much chance that Bernanke will do the right thing as there is of Congress actually doing their job. Only a fool would take that bet.


more...
http://www.informationclearinghouse.info/article20167.htm


edit: same article, different website, with highlighting
http://dandelionsalad.wordpress.com/2008/06/24/gas-pump-gouging-just-dont-blame-the-saudis-by-mike-whitney/



MarketWatch article referred to by Mike Whitney
http://www.marketwatch.com/news/story/gas-could-fall-2-if/story.aspx?guid=%7B2673C102-68E0-41D9-9C9A-10EE2E723948%7D&dist=msr_13

[Dr.Phool]

31. And the Fed Auction Facility is using our money to screw us.

[ozymandius]

33. It's nerve-racking to see how this argument has taken shape.

Republicans say, "There is no speculation. There's an oil shortage due to high demand. Time to drill offshore."

Democrats say, "Speculation has driven up oil prices. The math proves it. No need to drill offshore - nary a drop of oil will come online for ten years anyway."

In this argument, I am glad to see that Democrats are gearing for this fight with little nuance. The oil/gasoline bogeyman is glaringly obvious at this point. Funny how the Republicans are willing to throw themselves on Phil Gramm's political funeral pyre.

[ozymandius]

30. Wachovia hires Goldman to help sort loan portfolio

NEW YORK (MarketWatch) -- Wachovia Corp. said Tuesday that it has hired Goldman Sachs Group to review its loan portfolio, another sign that the bank is bracing for further mortgage-related trouble when it reports earnings next month.

"Goldman Sachs is performing analytics on our loan portfolio to evaluate various alternatives," said Christy Phillips-Brown, a spokeswoman for Wachovia.

.....

Wachovia has written down more than $5 billion in bad investments over the last year -- many of them in a struggling loan portfolio related to its ill-timed acquisition of mortgage lender Golden West in 2006.

.....

Wall Street recently has scaled back its earnings forecasts for the bank, with analysts cutting price targets for Wachovia based on concerns that it will continue to feel pressure from its loan portfolios and a tougher operating environment.

"Risks include worse than expected market conditions, which may include increased competition or worse economic conditions, higher loan losses than expected (especially in residential real estate) and a slower mortgage-banking recovery, as well as merger-integration risks," Mike Mayo, an analyst for Deutsche Bank, wrote to investors.

http://www.marketwatch.com/news/story/wachovia-braces-losses-hires-goldman/story.aspx?guid=%7B3AF32DA9-D41F-4105-BC5A-09C2115F9CBB%7D&dist=msr_2

[ozymandius]

38. Bye for much of the day.

More stuff to do away from the computer.

ozy :hi:

[Hugin]

46. After dragging the net through the Pool one last time...

I think I found everyone from yesterday. (Hopefully, none went under more than three times... eek!)


Have a good one, Ozy! :hi:

Updated Pool list for AnneD---

**************************************************************************************
Happyslug.....Needs Update
Yael.....Needs Update
distant earlywarning.... Needs Update
AzDemDist6..... Needs Update
SpecimenFred..... Needs Update
bahrbearian.....7/1
Finnfan......7/2
InkAddict.....7/3
Karenia.....7/8
UIA.....7/15
alterfurz... 7/22
Roland99.....7/28 (Alternate 10/17)
TOJ........... 7/31
Abelenkpe.....8/2
Ghost Dog... 8/5
Kineneb.....8/8
TalkingDog... 8/16
dweller.... 8/19
Dr.Phool... 8/23
Nadinebrezezinski.....9/1
Prag.....9/5
MoJo Rabbit.....9/5
kickysnana.... 9/8
MuleBoy(aka hiz honna da mayor).....9/11
radfringe.... 9/11
Nickster.....9/12
ozymandius... 9/19
Demeter......9/21
ozone_man.... 9/23
Birthmark....10/10
Tansy_Gold...10/13
DemReadingDU.10/16
AnneD....10/24
Neshanic.....10/24
MsLeopard.....10/31
Wordpix.....11/3
PassingFair...11/4
Ship wrack.....11/5
Wednesdays..... 1/16/09 (Subscribes to the 'turned 3 corners too many' theory.)
********************************************************************************

[MattSh]

57. My April date has come and gone...

I guess I misunderestimated the power of the Central Banks and the CNBC money honeys.

So let's change mine to Sept 2, the day after Labor Day. Labor has been getting screwed forever, maybe it's time for the investor class to feel it too.

[Hugin]

59. Sure enough...

Consider it done. :)

[kineneb]

74. want to change date if possible

I was going for the magic number day of 08-08-08, but I think the manure will hit the ventilator right after Labor Day. I'll go for Thurs. 9/4 since some of the other dates are taken.

[Hugin]

75. For you...

The pool is always open. :)

[UpInArms]

39. Freddie Mac portfolio jumps annual 53.4 pct in May

http://www.reuters.com/article/bondsNews/idUSWNAS917220080625

NEW YORK, June 25 (Reuters) - Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), the second largest provider of U.S. home funding, on Wednesday said its mortgage portfolio jumped at a 53.4 percent annual rate in May to $770.4 billion.

The government-sponsored company said it entered into mortgage purchase and sales commitments worth $26.2 billion in the month, down from $43.5 billion in April.

...a bit more...

I'm confused :crazy:

[UpInArms]

41. Truck transporter JHT files Chapter 11 bankruptcy (from the outsourced news)

http://www.reuters.com/article/bondsNews/idUSBNG27376320080625

BANGALORE, June 25 (Reuters) - JHT Holdings Inc, a major transporter of medium- and heavy-duty trucks to retailers from their original manufacturers, filed for Chapter 11 bankruptcy protection, citing a big drop in demand for diesel trucks as economic growth slowed.

The 75-year-old Kenosha, Wisconsin-based company and 16 affiliates sought protection from creditors on Tuesday with the U.S. bankruptcy court in Delaware, court papers show.

Among closely held JHT's equity investors are MTGLQ Investors LP, an affiliate of Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz); DB Zwirn Special Opportunities Fund LP and ZM Private Equity Fund I; Spectrum Investment Partners LP, and Stonehouse Investment Co LLC, the papers show.

The company said it transports about 95 percent of the heavy-duty Class 8 trucks made in North America, with such customers as Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz), General Motors Co (GM.N: Quote, Profile, Research, Stock Buzz), Mack Trucks Inc and Paccar Inc's (PCAR.O: Quote, Profile, Research, Stock Buzz) Peterbilt Motors Co.

It said it has between $100,000,001 and $500 million of assets and debts, employs 1,600 people, and delivers to 12,000 retailers and end users.

JHT said the bankruptcy followed significant reductions in demand for large diesel trucks, after new emission standards in 2007 increased the costs of making diesel engines, leading to higher truck prices.

...more...

See how wonderful news is from Bangalore? It reads like a press release from the * admin - blaming the bankruptcy on the "new emission standards". Welcome to Pravda USA!

:nuke:

[UpInArms]

42. Mortgage applications drop to 6-1/2-yr low: MBA

http://www.reuters.com/article/bondsNews/idUSNAT00415820080625?sp=true

NEW YORK (Reuters) - U.S. mortgage applications fell for a second consecutive week, hitting their lowest level in nearly 6-1/2 years despite a sharp drop in interest rates, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications <USMGM=ECI> for the week ended June 20, which includes both purchase and refinance loans, dropped 9.3 percent to 461.3 -- the lowest level since the week ended December 28, 2001.

The report offers additional evidence of a U.S. housing market that is suffering one of the worst downturns in its history. Significantly tighter lending standards and an unwieldy supply of homes for sale are some of the factors preventing the U.S. housing market from rebounding out of its two-year-long slump.

The frenzy of foreclosures hitting the market is aggravating matters adding to the supply of unsold homes and depressing home prices nationwide, analysts say.

The jump in foreclosure sales explains part of the sharp drop in home prices since foreclosures typically sell at about a 20-percent discount to the market, according to Michelle Meyer, an economist at Lehman Brothers in New York.

...more...

[UpInArms]

52. 10:09 EST numbers and "better than expected housing report" blather

Dow 11,839.67 32.24 (0.27%)
Nasdaq 2,390.63 22.35 (0.94%)
S&P 500 1,323.39 9.10 (0.69%)
10-Yr Bond 4.119% 0.014

NYSE Volume 563,694,062.5
Nasdaq Volume 281,797,500

10:05 am : The major indices extend their opening gains and get an additional boost on the release of a better-than-expected housing report.

Just hitting the wires, the Department of Commerce said May new home sales fell 2.5% month-over-month on a seasonally adjusted annualized basis, which follows the upwardly revised 4.8% gain in April. The results are slightly better than the median estimate that called for a drop of 2.7%. The current level of new home sales, at 512,000, is down 40% from the previous year.

The financial sector is up 2.1%. European banks Barclays (BCS 26.17, +1.47) and UBS (UBS 22.77, +0.74) are posting hefty increases. Barclays is raising nearly $9 billion in fresh capital according to reports, and UBS hired Lazard to perform a strategic review its businesses, according to the New York Post.DJ30 +45.27 NASDAQ +24.37 SP500 +10.38 NASDAQ Adv/Vol/Dec 1581/225 mln/810 NYSE Adv/Vol/Dec 1956/136 mln/846

09:40 am : The stock market opens on a positive note ahead of the FOMC policy announcement at 2:15 ET. The Fed is expected to leave rates unchanged at 2.00%, and its directive is likely to highlight the importance of keeping inflation in check.

In corporate news, agriculture company Monsanto (MON 130.86, -4.92) topped its earnings expectations and raised its 2008 earnings guidance. General Mills (GIS 62.15, -0.27) reported in-line earnings, but issued downside guidance for fiscal year 2009.

Boeing (BA 71.76, -3.02) is down 4% after being added to the Conviction Sell List at Goldman Sachs, according to reports.

In economic news, May durable orders were flat, matching expectations. The data will not alter economic perceptions of a moderately growing economy.DJ30 +36.41 NASDAQ +18.60 SP500 +7.71 NASDAQ Adv/Vol/Dec 1404/91 mln/746 NYSE Adv/Vol/Dec 1699/62 mln/884

[Hugin]

53. Eh, it'll only last until it gets 'restated' two weeks from now...

I'll check in then.

[TrogL]

61. Loonie Watch

(on edit, I know a female Fish and Wildlife officer. She scares me.)

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

2008-05-14 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
2008-06-11 Wednesday, June 11 0.983284 USD
2008-06-12 Thursday, June 12 0.977517 USD
2008-06-13 Friday, June 13 0.972573 USD
2008-06-16 Monday, June 16 0.979432 USD
2008-06-17 Tuesday, June 17 0.980296 USD
2008-06-18 Wednesday, June 18 0.98174 USD
2008-06-19 Thursday, June 19 0.987167 USD
2008-06-20 Friday, June 20 0.982994 USD
2008-06-23 Monday, June 23 0.984155 USD
2008-06-24 Tuesday, June 24 0.98668 USD

Current values

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

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9880 0.9903 0.9880 0.9883 +0.0005 +0.05% 
CD.U08 Sep 2008 0.9866 0.9899 0.9866 0.9895 +0.0031 +0.31% 
CD.Z08 Dec 2008 0.9800 0.9800 0.9800 0.9859 +0.0021 +0.21% 
CD.H09 Mar 2009 0.9757 0.9757        0.9857 +0.0021 +0.21% 
CD.M09 Jun 2009 0.9995 0.9995        0.9855 +0.0021 +0.21% 
CD.U09 Sep 2009 0.9865 0.9865 0.9865 0.9853 +0.0021 +0.21%  

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

Market          Open    High    Low     Last    Change   Pct 
AUSTRALIAN $/CANADIAN $ (CME:ACD)
ACD.U08 Sep 2008 0.9584 0.9584 0.9584 0.9584 +0.0025 +0.26% 
BRITISH POUND/US$ (SMALL) (NYBOT:MP) 
MP.U08.E Sep 2008 (E) 1.9566 1.9566 1.9562 1.9558 +0.0044 +0.22% 
EURO/BRITISH POUND (NYBOT:GB)
GB.U08.E Sep 2008 (E) 0.79620 0.79620 0.78815 0.79275 +0.00090 +0.11%    
EURO/JAPANESE YEN (NYBOT:EJ)
EEJ.U08.E Sep 2008 (E) 166.400 166.980 166.400 166.980 +0.415 +0.25%     
EURO/US$ (SMALL) (NYBOT:EO)
EO.U08.E Sep 2008 (E) 1.54115 1.54115 1.54115 1.55040 +0.00530 +0.34%    

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

The September Canadian Dollar was steady to slightly higher overnight as it consolidates above the 20-day moving average crossing at 98.43. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If September extends this week's breakout above the 20-day moving average, the reaction high crossing at 99.90 is the next upside target. Closes below the 10-day moving average crossing at 98.06 would temper the near-term friendly outlook in the market. First resistance is last Friday's high crossing at 98.95. Second resistance is the reaction high crossing at 99.90. First support is the 20-day moving average crossing at 98.42. Second support is the 10-day moving average crossing at 98.06.


Analysis

The Alberta government declared a 4 billion that's right $CAN4,000,000,000 surplus. $CAN1.7 billion goes to something called the Heritage Trust Fund which is basically a rainy-day fund if the bottom ever falls out of the resource industry (forestry's also big in Alberta). Another big whack of it goes to infrastructure - roads, schools, hospitals. While Alberta has already been rich in resources, the reason it's STILL big in resources (and still has a booming tourism industry) is because of strict environmental controls over the resource industry. You spill oil in a lake and you are in big, big doodoo. You cut down a tree you plant another one or go to jail. You finish doing a open mining dig (eg. for coal), you do something creative with the hole or say goodbye to all your profits for the last umpteen years. Start a fire without permit, people with guns will be on your doorstep. Wanna do anything on your land more complicated that digging a fire pit, ESPECIALLY a drainage ditch, apply for a permit. For that matter, there's strict regulations on fire pits - I've got one in my back yard that made the bylaw officer smile.

Yes, we've got the cesspool of the Oil Sands, but I've been to Fort McMurray well before this all got started and it was the asshole of the universe then. Yes, the oil industry is a dirty business, but refusing to buy Oil Sands oil isn't going to make it go away - the Chinese are begging for it.

[TrogL]

91. Closing Blather

Blather

The September Canadian Dollar closed higher on Wednesday as it extends this week's breakout above the 20-day moving average crossing at 98.44. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near- term. The high-range close sets the stage for a steady to higher opening on Thursday. If September extends this week's rally, the 50% retracement level of the May-June decline crossing at 99.23 is the next upside target. Closes below the 10-day moving average crossing at 98.10 would temper the near-term friendly outlook in the market. First resistance is today's high crossing at 99.05. Second resistance is the 50% retracement level crossing at 99.23. First support is the 20-day moving average crossing at 98.44. Second support is the 10-day moving average crossing at 98.10.

[Ghost Dog]

63. ECB Weber: ECB In State Of Heightened Alterness (sic, or !)

Wed, Jun 25 2008, 15:38 GMT FRANKFURT -(Dow Jones)- The European Central Bank is "in a state of heightened alertness" in light of strong upside risks to price stability, Axel Weber, a member of the ECB's governing council, said Wednesday.

"Financial markets should by now have understood our readiness to act. It is our strong determination to secure a firm anchoring of medium- and long-term inflation expectations in line with price stability," Weber said, according to the text of a speech.

The ECB currently faces record-high inflation rates in the euro zone. Inflation in the area accelerated to 3.7% on the year in May from 3.3% in April. By comparison, the ECB aims to anchor inflation at just below 2.0% over the medium term.

/... http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=3a8141c5-b61b-4e19-9b5e-d8085e880aca

----------

2008-06-25 13:13:38 Norway central bank hikes interest rates to 5.75 percent from 5.50 percent

OSLO (Thomson Financial) - Norges Bank, the Norwegian central bank, said it has decided to hike interest rates by 25 basis points to 5.75 percent, in a move that contradicts economist expectations.

2008-06-25 13:02:43 1-Polish c.bank raises rates by 25 basis points raised interest rates by 25 basis points on Wednesday, in line with market expectations, because inflation remains well above the bank's target.

2008-06-25 12:49:31 Dutch central bank's Wellink says inflation to top 3 percent in Q3

AMSTERDAM (Thomson Financial) - Dutch central bank chief Nout Wellink said Wednesday he expects inflation in the Netherlands to be above 3 percent in the third quarter of the year.

2008-06-25 12:42:31 BoE's Gieve says the worst is still to come for UK economy

LONDON (Thomson Financial) - Bank of England outgoing deputy governor John Gieve said on Wednesday he believes the worst is still to come for the UK economy.

2008-06-25 12:37:09 Trichet says ECB has not said it envisages series of rate hikes

BRUSSELS (Thomson Financial) - European Central Bank (ECB) President Jean-Claude Trichet said while the ECB may raise interest rates at its July 3 council meeting, it has not said that it envisages a series of rate hikes.

/... http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=140771fa-30dd-4b14-9b5a-eb2e38cd6c5b

[Ghost Dog]

64. -Japan May exports rise as Asia offsets U.S. slump

TOKYO, June 25 (Reuters) - Japan's annual export growth beat expectations in May as shipments to Asia and other developing countries helped delay the impact of a U.S. slowdown on global demand.

Exports to the United States fell for a ninth consecutive, month and the data showed ripples spreading across the Atlantic. Exports to the European Union, which had been holding up, recorded their first annual drop in 2-½ years.

/... http://www.reuters.com/article/marketsNews/idINT25778320080625?rpc=44


TOKYO, June 25 (Reuters) - Japan's trade surplus in May fell
a smaller-than-expected 7.6 percent from a year earlier to 365.6
billion yen ($3.39 billion), Ministry of Finance data showed on
Wednesday.

That compared with economists' median forecast for a 74.7
percent fall in the surplus to 40.0 billion yen.

/... http://www.reuters.com/article/marketsNews/idINTKF00322220080624?rpc=44

[Ghost Dog]

65. Fed Keeps Rate at 2%, Ending Most Aggressive Easing Since 1980s

June 25 (Bloomberg) -- The Federal Reserve left its benchmark interest rate at 2 percent, ending the most aggressive series of rate cuts in two decades, as higher energy costs threaten to boost inflation.

``The Committee expects inflation to moderate later this year and next year,'' the Federal Open Market Committee said in a statement today in Washington. ``However, in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high.''

/... http://www.bloomberg.com/apps/news?pid=20601068&sid=abQ3cIKi7qEQ&refer=economy


U.S. Federal Open Market Committee June 25 Statement: Text

June 25 (Bloomberg) -- The following is the full text of the statement released today by the Federal Reserve:

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent.

Recent information indicates that overall economic activity continues to expand, partly reflecting some firming in household spending. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and the rise in energy prices are likely to weigh on economic growth over the next few quarters.

The committee expects inflation to moderate later this year and next year. However, in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high.

The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time. Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased. The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; Charles I. Plosser, Gary H. Stern; and Kevin M. Warsh. Voting against was Richard W. Fisher, who preferred an increase in the target for the federal funds rate at this meeting.

/. http://www.bloomberg.com/apps/news?pid=20601068&sid=aSDPH6MGf29U&refer=economy

[Ghost Dog]

66. Dollar Falls Versus Euro as Fed Says Inflation Will Moderate

June 25 (Bloomberg) -- The dollar dropped against the euro after the Federal Reserve held interest rates steady, ending the most aggressive series of rates cuts in two decades.

...

The dollar fell 0.1 percent to $1.5589 per euro at 2:17 p.m. in New York, from $1.5568 yesterday. It traded at 108.22 yen, compared with 107.82. Japan's currency traded at 168.80 per euro, compared with 167.85.

The U.S. currency has dropped 12 percent against the euro since Sept. 18, when the Fed made the first of seven reductions in the target lending rate. The dollar touched $1.6019 per euro on April 22, the weakest level since the European currency made its debut in 1999.

The world's biggest financial institutions have incurred $396 billion in asset writedowns and credit losses since the beginning of 2007, including reserves set aside for bad loans.

U.S. regional bank stocks are in ``capitulation mode,'' said Merrill Lynch & Co. in a research note on June 20, citing credit market losses, potential dividend cuts and capital raisings. The S&P 500 Regional Banks Index fell to 53.82 on June 19, the lowest since at least 2003.

...

The unemployment rate rose in May by a half-percentage point to 5.5 percent, the biggest increase in more than two decades. A measure of consumer confidence in the U.S. dropped this month to a 16-year low, and house prices in 20 cities fell in April by the most on record.

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

[Ghost Dog]

83. Dollar advances to multi-month high versus most major Latin American currencies (NASDAQ dixit)

(RTTNews) - The US dollar advanced to multi-month highs versus the Chilean peso, Peruvian Sol and Colombian peso in New York trading on Wednesday. On the other hand, the greenback showed weakness against Brazilian real and Mexican peso.

...

The US dollar advanced against its Chilean counterpart during New York mid-day trading on Wednesday. At about 12:05 pm ET, the dollar-Chilean peso pair surged to a 7-month high of 509.75, compared to yesterday's close of 504.45. Currently, the pair is worth 508.78.

During New York afternoon trading today, the US dollar strengthened against the Colombian currency. The dollar climbed to a monthly high of 1787.50 by about 12:45 pm ET against the peso, compared to yesterday's close of 1750.60. The dollar has been in an upward channel against the peso for the past 7days. As of now, the pair is trading near 1778.50.

The dollar, which closed yesterday's New York session at 2.9325 against the Peruvian Nuevo Sol, soared to a new multi-month high of 2.9850 in New York afternoon trading on Friday.

The US currency declined against its Brazilian counterpart in New York afternoon deals today. At about 3:25 pm ET, the greenback ticked down to a fresh multi-year low of 1.5910, compared to yesterday's North American close of 1.6040.

After moving sideways in New York morning session, the US dollar ticked down against the Mexican peso after the releasing of Fed's rate decision that held interest rate at 2 percent.

/... http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20080625\ACQRTT200806251624RTTRADERUSEQUITY_0897.htm

[Ghost Dog]

86. Mexican Peso Rises to Five-Year High as Fed Holds Rates Steady

June 25 (Bloomberg) -- Mexico's peso strengthened to a five-year high after the Federal Reserve keep borrowing costs unchanged, maintaining the interest-rate advantage of local fixed-income securities after U.S. government debt.

The peso rose 0.2 percent at 10.2673 per dollar at 4:06 p.m. New York time, from 10.2908 yesterday. That's the lowest since June 2003. The currency has appreciated 6.2 percent this year, buoyed by the widening gap between U.S. and Mexican benchmark interest rates.

Mexico's central bank increased its benchmark lending rate to 7.75 percent on June 20, saying inflation was ``worrying.'' Mexico's consumer prices rose 0.29 percent in the first half of the month, the central bank said yesterday, causing investors to bet on additional rate increases.

/... http://www.bloomberg.com/apps/news?pid=20601083&sid=aM1UNLqIW778&refer=currency

[Ghost Dog]

87. Brazil's Real Closes At Nine-Year High

SAO PAULO (Dow Jones)--The Brazilian real closed at a nine-year high Wednesday on continued inflows by foreign investors.

The real closed at BRL1.5908, compared with the Tuesday close of BRL1.6060.

Foreign investors are attracted by high Brazilian interest rates. The Selic base rate is currently 12.25%.

In its quarterly inflation report, published earlier Wednesday, the Brazilian central bank hinted at more interest rate hikes to come because of worries about inflation.

These worries were underscored Wednesday by the release of official inflation figures for the 12 months through mid-June, showing inflation at 5.89%.

Meanwhile, investors liked the news that the Federal Reserve's Federal Open Market Committee had voted Wednesday to hold the U.S. Fed Funds rate steady at 2%.

The combination of low U.S. interest rates and high Brazilian rates should help keep Brazilian markets attractive for foreign investors, according to analysts.

/... http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=45d04fc1-ba50-4461-8de8-160a4385ed73

[Ghost Dog]

88. Canada's Dollar Gains as Fed Leaves Borrowing Costs Unchanged

June 25 (Bloomberg) -- Canada's dollar rose for a third day after the U.S. Federal Reserve left its benchmark interest rate at 2 percent, ending a series of seven cuts since September.

A change in U.S. monetary policy will reduce pressure on the Bank of Canada to cut its borrowing costs as the U.S. consumes about 80 percent of the nation's exports. Canada's central bank before June 10 had cut interest rates at every meeting since December to shield the economy from the U.S.-led slowdown. The Canadian currency has traded near parity with its U.S. counterpart this year.

``The concern for inflation is certainly there,'' said Stewart Hall, market strategist at HSBC Securities Canada in Toronto. ``To break the Canadian dollar out of that range, you have to get a sense there was some sense of urgency.''

/... http://www.bloomberg.com/apps/news?pid=20601083&sid=aN.FPa7IC13U&refer=currency

[Ghost Dog]

85. Indian Rupee gains 23 paise against USD after rate hike

Mumbai, June 25 (UNI) The Rupee today gained 23 paise to close firm at 42.73/74 against the US Dollar on the key rate hike by the Central Bank.

The Indian Rupee opened stronger at 42.88/90 per dollar from its previous close of 42.96/97 per dollar and further strengthened on the expectaions that RBI's move to tame inflation will help the economy to sustain comfortable growth, dealers said.

The Rupee rose after the RBI raised key interest rates by 50 basis points to tame price pressures, prompting dollar sales by exporters on expectations of a stronger currency, a senior dealer with a leading private bank said.

The local unit today traded in a wide range band between 42.73 and 42.90 per dollar in a volatile interbank foreign exchange market and is expected to be near the 42.70 level as reportedly the Central bank was willing to hold Rupee stronger against the greenback.

/... http://www.deepikaglobal.com/ENG5_sub.asp?ccode=ENG5&newscode=21786

[Ghost Dog]

90. China May FX reserves hit $1.797 trillion

BEIJING: China’s foreign exchange reserves rose $40.3 billion in May to $1.79696 trillion, a source familiar with the data told Reuters on Wednesday.

That marked a slowdown from a record $74.46 billion rise in April, based on data disclosed to Reuters last month. But it was still significantly greater than the nearly $28 billion that flowed into China in May from the trade surplus and foreign direct investment — a strong indication for many economists that speculative capital is still pouring into the country.

The source declined to be identified because he was not allowed to speak officially to the media. China’s official foreign exchange reserves have now risen $268.8 billion in the first five months of the year, compared with $461.9 billion in all of 2007.

Reserves in May grew by more than the combined inflows from China’s trade surplus and FDI for the fifth month in a row. But Beijing will take heart that unexplained capital inflows, an indicator of hot money, dropped sharply to $12.3 billion in May from $50.2 billion in April.

/.. http://www.dailytimes.com.pk/default.asp?page=2008\06\26\story_26-6-2008_pg5_14

[Ghost Dog]

67. Fed Is Losing Control of Inflation

POSTED: Tuesday, June 24, 2008
FROM BLOG: Contrarian Profits - Stock marketing investing news and opinion from a contrarian perspective. Insights about value investing, commodities, gold, oil, energy, China, the Fed, inflation, deflation, and global markets.


Bill Bonner in The Daily Reckoning takes on the Fed's big dilemma. How can the it simultaneously fight inflation and deflation of asset prices?

Whatever the feds do, you can be sure it's going to involve a lot of doublespeak.

According to AP, they are "looking for a new message to keep inflation expectations in check, without having to boost interest rates."

It's to be a "finely tuned message" to "ward off inflation," says AP.

We thought raising interest was the best way to do that. Then again, so did ex-Fed chief Paul Volcker, and look what happened to him.

Brown Brothers Harriman economist Marc Chandler, quoted in BusinessWeek, says it's the third paragraph of the Fed's post-meeting statement that's the one to look out for. The third paragraph will deal directly with the Fed's assessment of the inflation risk...

Here the wording is likely to stiffen a bit to reflect that commodity prices have continued to rise and that inflation expectations appear to be creeping higher. The FOMC will likely signal not just that it will "continue to monitor inflation developments carefully," as it said in March and April, but will likely indicate that it is on heightened alert or something in that vein.

More from Bill Bonner. He says the Fed is "fighting a mighty war against deflation... and losing."

Surging inflation all over the world is putting pressure on the Fed to raise rates. But raising rates in an economy with rising employment and falling house prices could be disastrous.

On the other hand, not raising rates could provoke a disaster of its own. It could cause the dollar to collapse as prices soar.

On Friday, the Dow fell 220 points. Gold held steady at $903. Oil rose $2 to $135.

Here at The Daily Reckoning headquarters our "Crash Alert" flag has been up so long it's almost in tatters. Even we don't bother to look up any more. We know what to do – keep our money in cash...in gold...in Japan...and, lately, in emerging markets.

But the best place for you money over the last year has been energy. Energy stocks on the S&P are up about 20%. The worst place for your money has been the financial sector, which is down about 36%. The banking index, BKX, was at 110 last year. Now, it's below 65, down about 40%.

The Fed is fighting a mighty war against deflation... and losing. Its cheap money and credit no longer seem to help its buddies on Wall Street or the little guy out on the prairies or down in the bayous. Instead, the money drives up consumer prices...and ends up in the hands of the energy exporters – Russia, Venezuela, and the Gulf. The Financial Times reports that there are 15 times as many houses for sale than there are buyers looking for them. And now, it appears that the very temporary boost given to the U.S. economy by the tax rebates is fizzling out. Look out below...

But you rarely get what you expect from the financial markets; instead, you get what you deserve.

Wall Street is getting what it deserves. The hotshots made fortunes by loading up the whole country with debt. Finally, they're taking some losses.

...

/... http://www.reuters.com/article/blogBurst/investing?type=hotStocksNews&w1=B7ovpm21IaDoL40ZFnNfGe&w2=B7pJeHult9GszE37UXlSpmUm&src=blogBurst_investingNews&bbPostId=Cz854tWRKKaRnCzAVm294vh37CB67STWm2ucCtB2rJ9mMvZSpT&bbParentWidgetId=B7gSUbux1hpbz8uOa7TWsLnV

[RUMMYisFROSTED]

68. 12-15%

[Dr.Phool]

71. "A finely tuned message to ward off inflation".

And if the incantations don't work, we'll string garlic around the windows, and if that doesn't work, we'll turn them into toads.

Or did they already try that on Bear Stearns.

[ozymandius]

72. Averages droppping rapidly as Witching Hour ensues.

Dow 11,853.84 Up 46.41 (0.39%)
Nasdaq 2,406.60 Up 38.32 (1.62%)
S&P 500 1,327.25 Up 12.96 (0.99%)
10-Yr Bond 4.115% Up 0.01
NYSE Volume 3,371,222,000
Nasdaq Volume 1,713,509,625

3:00 pm : The stock market sports solid gains in choppy trading as the market digests the FOMC statement. Crude is now down 1.9% to $134.47 per barrel after being down as much as 3.7%.

Nine of the ten economic sectors are in positive territory. Financials (+1.6%) gave up some of their advance, but it is being offset by the energy (-0.1%) and materials (+0.6%) sectors paring their losses.

Treasuries pared a good portion of their losses, with the 10-year note now down 7 ticks after being down more than 20 ticks.DJ30 +68.56 NASDAQ +37.26 SP500 +14.19 NASDAQ Adv/Vol/Dec 1833/1.51 bln/978 NYSE Adv/Vol/Dec 2282/921 mln/842

[ozymandius]

73. 3:34

Dow 11,832.83 Up 25.40 (0.22%)
Nasdaq 2,402.64 Up 34.36 (1.45%)
S&P 500 1,324.87 Up 10.58 (0.80%)
10-Yr Bond 4.115% Up 0.01
NYSE Volume 3,481,272,000
Nasdaq Volume 1,767,407,500

[ozymandius]

78. like a stone

3:53
Dow 11,814.03 Up 6.60 (0.06%)
Nasdaq 2,398.49 Up 30.21 (1.28%)
S&P 500 1,321.56 Up 7.27 (0.55%)
10-Yr Bond 4.115% Up 0.01
NYSE Volume 3,772,831,500
Nasdaq Volume 1,937,132,250

3:35 pm : The major indices retreat off their recently reached session highs, although they still sport solid gains. The financial sector is seeing the bulk of the selling interest, which is now up only 0.3% after being up as much as 3.4%.

The tech sector (+2.0%) takes the leadership spot. Within tech, shares of Jabil Circuit (JBL 16.65, +2.32) are up 16% after the company reported better-than-expected earnings this morning.

Looking ahead, Nike (NKE 66.17, +0.16), Oracle (ORCL 22.69, +0.46) and Research In Motion (RIMM 140.98, +0.50) are notable names set to report their earnings after the close. Tomorrow morning, ConAgra (CAG 22.25, -0.67) and Discover Financial Services (DFS 13.97, -1.08) are among the eight companies reporting.DJ30 +35.09 NASDAQ +36.02 SP500 +11.83 NASDAQ Adv/Vol/Dec 1817/1.74 bln/1018 NYSE Adv/Vol/Dec 2219/1.07 bln/905

[Robbien]

77. American Express Ad on CNBC

Has an average guy standing at ticket counter presenting a non-AMEX card for payment of his ticket. TSA bozos come take him away for using such an inferior credit card. Ticket agent is then all smiles for the next customer in line since the well dressed, clearly well-heeled businessman presents the golden AMEX card.

Is class warfare getting so acceptable it is used in advertisements? Having the non-rich carted off to the nether regions is a selling point?

[ozymandius]

79. Quote of the day -

Frankly, there's very few levers left ... (T)his energy crisis is affecting consumers ... People aren't spending. People aren't driving. Really, you need to look at ways to control what's happened in the inflationary world and really take the risk that by raising rates, you may actually cause some demand to go weaker. I think it's back to where Paul Volcker was in the early '80s. There's a real risk here and we've got stagflation. You can only break out of it one way and you better take on inflation head-on."

Andrew Liveris, chairman and CEO of Dow Chemical, June 24, 2008

[ozymandius]

81. at the close

Dow 11,811.83 Up 4.40 (0.04%)
Nasdaq 2,401.26 Up 32.98 (1.39%)
S&P 500 1,321.97 Up 7.68 (0.58%)
10-Yr Bond 4.115% Up 0.01
NYSE Volume 4,831,819,500
Nasdaq Volume 2,092,463,750

4:15 pm : The stock market ended the session with a decent-sized gain after some volatile action following the Fed's decision to leave the fed funds rate unchanged. The S&P 500 was up 0.8% ahead of the Fed announcement, climbed to a gain of 1.4% on its release and then settled the day up 0.6%.

The Fed left rates unchanged as expected, and its wording in the directive largely reiterated more hawkish comments leading up to the meeting from Fed Chairman Bernanke and other Fed officials. In its FOMC directive, the Fed said overall economic activity continues to expand, partially due to "firming" in household spending. However, the fed expects economic growth will face the burdens of tight credit conditions, housing contraction and the rise in energy prices.

The statement says that uncertainty over the inflation outlook remains high, although it expects inflation to "moderate later this year and next year." The FOMC feels that downside economic risks have somewhat diminished, while inflation risks have increased.

The Fed is likely to keep rates steady for quite a while, as economic growth will remain moderate at best for at least a few more meetings. Credit market conditions are also likely to remain fragile. These factors will inhibit any rate hikes. Addressing any uptick in inflation will not come immediately, particularly as the Fed expects inflation to moderate next year.

In corporate news, MasterCard (MA 289.79, +9.42) will pay American Express (AXP 40.94, -1.16) $1.8 billion after settling their antitrust litigation. American Express claimed that MasterCard illegally blocked AXP from the U.S. bank-issued card business.

Boeing (BA 69.64, -5.15) tumbled 7% on reports that it was added to a Conviction Sell List at Goldman Sachs, which cited economic concerns and fuel costs.

In terms of economic news, May durable orders were flat, matching expectations, while orders excluding transportation fell by a less-than-expected amount. The data will not alter economic perceptions of a moderately growing economy.

The decline in new home sales is leveling off after the steep fall in 2007 and early 2008. May new home sales fell 2.5% month-over-month on a seasonally adjusted annualized basis, which follows the upwardly revised 4.8% gain in April. The results are better than the expected drop of 2.7%. Homebuilding stocks ended the session nearly flat with a 0.2% gain.

Eight of the ten economic sectors advanced. The tech sector (+1.5%) led the way, with strength in large-cap names. The financial sector settled with a gain of 0.4%, after a steep retreat from its session high of 3.4%. The sector went on the defensive following the FOMC announcement.

The energy (-0.5%) and industrial sectors (-0.5%) were the main laggards.

Separately, crude prices settled the session down 1.9% to $134.43 after inventory stockpiles unexpected rose. Commodity as a whole fell 0.5%.DJ30 +4.40 NASDAQ +32.98 NQ100 +1.6% R2K +1.2% SP400 +0.6% SP500 +7.68 NASDAQ Adv/Vol/Dec 1820/2.14 bln/1031 NYSE Adv/Vol/Dec 2179/1.40 bln/950

[dweller]

93. watching the stock market end these days

is akin to hearing a half-hearted -ttthhhpphhhttt- raspberry.

there are the occasional 200 +/- ups and downs that grabs the attention, but now?


4 .... :boring:


yay <yawn> team
dp

[Yavin4]

92. Anyone Here Recall Larry Kudlow in Jan. 2001

I recall him beaming with pride about how the Dow was gonna take off under Bush, and we would hit 20,000 on the Dow.