STOCK MARKET WATCH, Friday June 27

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday June 27, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 208
DAYS SINCE DEMOCRACY DIED (12/12/00) 2714 DAYS
WHERE'S OSAMA BIN-LADEN? 2439 DAYS
DAYS SINCE ENRON COLLAPSE = 2730
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 26, 2008

Dow... 11,453.42 -358.41 (-3.03%)
Nasdaq... 2,321.37 -79.89 (-3.33%)
S&P 500... 1,283.15 -38.82 (-2.94%)
Gold future... 915.10 +32.80 (+3.58%)
30-Year Bond 4.60% -0.05 (-1.16%)
10-Yr Bond... 4.03% -0.08 (-1.99%)






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: Is the Inflation Scare Over Yet?

BY MIKE SHEDLOCK

Treasuries have been on a bit of a rally recently as the Lehman iShares 20+ year duration treasury fund (TLT) chart shows.

....

Destruction of credit via massive writedowns in banks and financials, accompanied by sharply rising unemployment rates, falling wages, and curtailment in credit lines everywhere is simply not an inflationary environment.

Of course, this all starts with a proper definition of inflation. In Austrian economic terms, inflation is an expansion of money and credit. Money is not expanding and neither is credit. There is an illusion that they are as discussed in Bank Credit Is Contracting.

We have reached Peak Credit, a once in a lifetime event.

.....

Credit Deflation

Some choose to call what is happening "credit deflation." In this regard "credit" is an unnecessary label. Deflation is about the contraction in money supply and credit. The conditions now are very similar to what happened in 1929. The primary difference is that prices of many goods and services (notably energy and food) have been rising.

....

The Big Hit Is Coming

Here is the key stat: 15.17% foreclosed and 91.7% is still rated AAA or Aaa by Moody’s and the S&P. If this is indicative of what is happening in other pools, and I suspect it is, the number of tranches downgraded by Moody's is a very misleading indicator. Have Moody's and the S&P have been downgrading the lower rated tranches, (higher in number but way lower in volume), while ignoring the big problem? It sure looks like it.

The big hit is coming when those "A" tranches get downgraded. Expect more credit writedowns. Lots more. What's happening is not inflationary in any way, shape, or form.

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

---

I find it odd that Mr. Shedlock does not blame the Fed at all for the dollar's weakness.

[ozymandius]

2. Today's Reports

08:30 Personal Income May
Briefing.com 0.4%
Consensus 0.4%
Prior 0.2%

08:30 Personal Spending May
Briefing.com 0.7%
Consensus 0.7%
Prior 0.2%

08:30 PCE Core Inflation May
Briefing.com 0.2%
Consensus 0.2%
Prior 0.1%

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

[Pale Blue Dot]

32. Personal Income 1.9%(???), Personal spending .8%, Core Inflation .1%(???)

Bizarre numbers, but will they be enough for a (sucker) rally today?

[Ghost Dog]

40. Weird numbers

U.S. Consumer Spending Rose 0.8% as Incomes Surged (Update2)

June 27 (Bloomberg) -- Spending by U.S. consumers rose more than forecast in May as the tax rebates propelled the biggest gain in incomes in almost three years, enabling households to overcome soaring fuel bills.

The 0.8 percent rise in purchases was the biggest since November, the Commerce Department said today in Washington. Incomes grew 1.9 percent, the most since September 2005, and measures of inflation were lower than anticipated.

After filling up their autos' gas tanks, Americans used the stimulus checks to buy electronics, clothes and furniture last month, helping to keep the economy expanding. At the same time, the slump in confidence, a loss of jobs and tighter credit raise concern spending will slow once the rebate effect fades.

``Consumers aren't fooled -- they know this is a temporary boost to their income,'' Ellen Zentner, an economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said in an interview with Bloomberg Television. ``If you strip out tax rebates, personal income probably rose about 0.3 percent.''

Wages and salaries grew just 0.3 percent in May, the Commerce Department figures showed.

Treasuries were higher, with the benchmark 10-year note yielding 4.01 percent as of 8:51 a.m. in New York, down 3 basis points from yesterday.

Economists had forecast spending would rise 0.7 percent, according to the median of 72 estimates in a Bloomberg News survey. Projections ranged from gains of 0.1 percent to 1 percent. The spending estimate for April was revised up to 0.4 percent from an originally reported 0.2 percent increase.

Disposable Income

The gain in income was almost five times larger than the median forecast of a 0.4 percent gain. Disposable income, or the money left over after taxes, surged 5.7 percent, the largest increase since May 1975.

The report also contained good news on inflation for Federal Reserve policy makers. The central bankers' preferred gauge of prices, which excludes food and fuel, increased 0.1 percent, compared with a 0.2 percent median estimate in the Bloomberg survey.

/... http://www.bloomberg.com/apps/news?pid=20601068&sid=a6dmLvwwxRAI&refer=economy

[Roland99]

41. The tax rebates distort the numbers. Stock futures rise.

Wall St. is falling for the ruse.

[UpInArms]

79. Treasury sent $7.5 bln in stimulus checks in latest week

http://www.marketwatch.com/news/story/treasury-sent-75-bln-stimulus/story.aspx?guid=%7B4FB3458E%2D5875%2D4BD4%2D94EA%2DFF7D748FD7CC%7D&dist=hplatest

WASHINGTON (MarketWatch) -- The Treasury Department said Friday it sent out $7.5 billion in payments to 9.7 million households in the latest week. These checks, which are separate from standard refunds from taxes paid last year, are part of the more than $110 billion rebates designated for consumers as part of the 2008 fiscal and economic stimulus packaged authorized by the White House to support the flagging U.S. economy. So far, Treasury has sent out more than $78.3 billion to 94.8 million households. The vast majority of the checks are scheduled to be sent by the middle of July. A new government report earlier Friday said U.S. incomes, spending and savings surged in May after the government sent out the initial batch of tax rebate checks.

Wouldn't it have been easier just to write one check and send it to Saudi Arabia?

[Pale Blue Dot]

34. Stimulus checks jolt home finances in May

WASHINGTON - The millions of economic stimulus payments gave a massive jolt to household finances in May, sending after-tax incomes up by the largest amount in 33 years.

The payments helped boost consumer spending by the largest amount in six months.

The Commerce Department reported that disposable incomes, the amount left after paying taxes, surged by 5.7 percent last month. It was the biggest increase since May 1975, reflecting $48.1 billion in rebate payments made last month. The surge in incomes helped boost consumer spending by 0.8 percent, the biggest gain since last November.

http://www.msnbc.msn.com/id/25407969/

[54anickel]

136. WTF? This becomes something to boast about? We're dirt poor, impoverished and enslaved to debt -

were it not for robbing from future generations to satisfy our own greed and materialism as we live for the moment as captured by the current batch of economic reports.

By Bob, do they think we are we stupid or what? Then again, maybe we are. :banghead:





http://www.radioshackblows.com/post/32905586/radioshack-stimulus-plan-news

RadioShack Announces Plan to Help Consumers Redeem, Spend and Save Their Federal Stimulus Checks and IRS Tax Refunds

That’s right folks, RS is looking to have all its loyal and idiotic customers stop in to their local store, and use their stimulus checks to pay for even more worthless sh*t.

My favorite part of the whole article:

Customers who use their stimulus or IRS refund checks in amounts up to $2,500 as a form of payment at their neighborhood RadioShack store between May 4 and July 12, 2008, and make a minimum qualifying purchase of $50 will receive a 10-percent discount. However, as an added value customers will not be required to commit the entire amount of their federal stimulus or IRS refund checks to the consumer electronics retailer. Any remaining unspent balance will be placed on a Vision Silver(SM) Prepaid MasterCard card that can be used wherever MasterCard cards are accepted.

Translation: The money you don’t spend at RS will be put onto a credit card that most definitely carries an interest rate anywhere between 18-26%!!

Yes, by all means, stop in, give RadioShack that hard earned stimulus plan check and see how much money you actually get back. Better yet, drop by your local CVS first and pick up a container of Vaseline, it makes the anal rape by RS taking your money more bearable.

[UpInArms]

35. line items

03. U.S. May core inflation up 0.1%, vs. 0.2% expected
8:32 AM ET, Jun 27, 2008

04. U.S. May incomes rise 1.9% vs. 1.5% expected
8:32 AM ET, Jun 27, 2008

05. U.S. May incomes, spending get boost from rebates
8:32 AM ET, Jun 27, 2008

06. U.S. May real disposable incomes flat excluding rebates
8:32 AM ET, Jun 27, 2008

[Pale Blue Dot]

37. It seems to me that #6 is the big news (if anyone's paying attention). nt

[UpInArms]

43. U.S. May real disposable incomes flat excluding rebates

let's make certain it's seen then

:hi:

[UpInArms]

55. U.S. June UMich consumer sentiment 56.4 - index 3rd lowest since 1952

02. Consumers' inflation expectations reach highest in 2 decades
9:59 AM ET, Jun 27, 2008

03. U.S. June consumer sentiment index 3rd lowest since 1952
9:58 AM ET, Jun 27, 2008

04. Record percentage of consumers say finances have worsened
9:58 AM ET, Jun 27, 2008

05. U.S. June UMich consumer sentiment 56.4: reports
9:57 AM ET, Jun 27, 2008

[UpInArms]

82. Consumers descend further into economic funk - Nine of 10 said the economy was in recession

http://www.marketwatch.com/news/story/economic-report-consumers-descend-further/story.aspx?guid=%7BB55D733A%2D1F01%2D4B26%2DA3A2%2D1C51D30B5C94%7D&dist=hplatest

WASHINGTON (MarketWatch) - Pummeled by high gas prices, rising foreclosures and weak job growth, U.S. consumers' mood turned even gloomier in June despite the stimulus checks they got from Uncle Sam, according to the University of Michigan and Reuters.

The consumer sentiment index fell to 56.4 in June, the lowest since 1980 and the third-lowest reading in the 56-year history of the survey. The index had read 59.6 in May and 56.6 in the mid-June preliminary report.

The plunge in sentiment came in as the last of $110 billion in fiscal stimulus checks were being delivered by the IRS, which helped boost personal incomes in May by 1.9%.

"Surging gas prices, high food prices, disappearing jobs, declining home values, and record foreclosures were cited by consumers as the basis for their pessimism, and most consumers expected each of these problems to continue to worsen in the months ahead," said Richard Curtin, who runs the survey for the university.

More consumers than ever before said their own finances had worsened, and their outlook for their real disposable incomes were the bleakiest ever.

Nine of 10 said the economy was in recession. Two-thirds expect the slump to last several years.

...more...

[AnneD]

114. Government puts lipstick on pig, other economic news to follow

You know it is getting bad when companies are offering one time fuel bonuses to keep employees from jumping ship. Most of teachers these days can only afford to live in the suburbs and pass several districts to come to work in the inner city. The school district is afraid they will lose folks (this is part of why our principal retired). We will be losing more next year, I fear. I will be taking the bus next school year.

At hubby's work (in the medical center) they are now offering 10 hour shifts (they pay the security folks next to nothing). He plans to take the 10 hour shifts and use the extra day to do his music biz-which is really doing well right now. He told me he though he might want to be a substitute teacher for one day, but it absolutely didn't pay and once I showed him on pencil and paper-he gave that up (he didn't believe me all this time). By packing our lunches and taking the bus-we do so much better.

[UpInArms]

93. No imminent recovery for US economy - ECRI

http://www.reuters.com/article/bondsNews/idUSNAT00416520080627

NEW YORK, June 27 (Reuters) - A gauge of future U.S. economic growth and its annualized growth rate fell in the latest week, erasing hopes that a recovery in the economy is close at hand, a research group said on Friday.

The Economic Cycle Research Institute, a New York-based forecasting group, said its Weekly Leading Index slipped to 131.7 in the week to June 20 from 132.6 in the previous period.

The fall in the index was due to weaker readings in measures of stock prices, housing activity and money supply growth, said Lakshman Achuthan, managing director at ECRI, in an instant message interview.

The index's annualized growth rate edged down to negative 6.0 percent from minus 5.8 percent a week earlier.

...more...

[ozymandius]

3. Oil climbs to record above $141 in Asia

SINGAPORE - Oil prices climbed to a record above $141 a barrel in Asian trading Friday as the dollar's protracted slump prompted investors to flock to oil as a hedge against inflation.

Prices were also lifted Thursday after OPEC's president said crude prices could rise well above $150 a barrel this year and Libya said it may cut oil production.

Light, sweet crude for August delivery rose as high as $141.71 a barrel before pulling back to $141.10, up $1.46 in Asian electronic trading on the New York Mercantile Exchange, midafternoon in Singapore. The contract Thursday rose $5.09 to settle at a record $139.64.

The previous trading record for a front-month contract was $139.89, set on June 16.

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

[ozymandius]

4. Oilfield thefts soar in Texas as prices boom

MIDLAND, Texas (AFP) - The wide open oilfields of West Texas are ripe pickings for thieves these days.

Some drive up to one of the thousands of pump jacks that dot the countryside and siphon crude out of the storage tanks.

Some pull up to a drill site after the crews have gone for the night and haul away tools, pipes and equipment.

Others take kickbacks, file false invoices or just plain steal knowing their bosses are too busy riding the oil boom to keep a close eye on accounting.

It's gotten so bad that the Federal Bureau of Investigation is launching a joint task force to tackle oilfield theft next month.

http://news.yahoo.com/s/afp/20080626/bs_afp/commoditiesoilenergypriceusboomcrime

[mdmc]

21. oil up a buck from when you posted

http://news.yahoo.com/s/ap/20080627/ap_on_bi_ge/oil_prices
LONDON - Oil prices climbed to a record above $142 a barrel Friday as the U.S. dollar's protracted slump and falling stock markets prompted investors to take refuge in oil.

[UpInArms]

42. Oil climbs above $142 on sliding dollar

http://news.yahoo.com/s/ap/20080627/ap_on_bi_ge/oil_prices_141?_ylt=Amzj6iZV2WcLOQ2g3uO3QfSoOrgF

LONDON - Oil prices climbed to a record above $142 a barrel Friday as the U.S. dollar's protracted slump and falling stock markets prompted investors to take refuge in oil.

Prices were also lifted Thursday after OPEC's president said crude prices could rise well above $150 a barrel this year and Libya said it may cut oil production.

Light, sweet crude for August delivery rose as high as $142.26 a barrel before pulling back to $141.40, up $1.76 in electronic trading on the New York Mercantile Exchange by early afternoon European time. The contract Thursday rose $5.09 to settle at a record $139.64.

The previous trading record for a front-month contract was $139.89, set on June 16.

The rise follows a sharp fall in U.S. stocks on Thursday and in Asia on Friday. "We need to observe that financial flows were leaving the equity markets as those markets are breaking below their support levels," said analysts at Petromatrix in Switzerland. "When money has nowhere to go, it is parked in commodities as it is one of the few investment instruments that actually rises the more money you pour into it."

The dollar also slipped against key currencies, as U.S. data showed sluggish economic growth and pointed to a struggling labor market. Oil is priced in U.S. dollars, and some investors buy oil contracts to protect the value of their assets against accelerating inflation when the dollar falls.

...more...

[UpInArms]

59. Pain is all around as Americans shun SUVs

http://www.reuters.com/article/newsOne/idUSN2636887620080627?sp=true

DETROIT (Reuters) - Record fuel prices have ended America's love affair with the SUV.

But the break-up is proving to be more painful than anyone anticipated. Some U.S dealers have stopped buying used trucks. Lenders are bracing for losses. Automakers have slashed output, and Americans have seen the value of their big rides drop by thousands of dollars in recent weeks.

The decline in sales of the heavy sports utility vehicles and trucks favored by Americans for more than a decade has gathered momentum in the last month, leading to a glut on dealer lots and sharply lower trade-in values.

But unlike the last recession in 2001, discounting from Detroit is not showing signs of reviving demand.

"The auto downturn appears to be entering a problematic second phase," Lehman Brothers analyst Brian Johnson said in a recent note for clients. "In this phase, with gas prices remaining stubbornly high, demand for both new and used large pickups and large SUVs is falling precipitously."

For years, North America's truck market has been an outsized anomaly. Cars outsell trucks by a 5-to-1 margin in Europe and by 2-to-1 in Asia Pacific. But in North America, the popularity of SUVs and trucks made that ratio almost 1-to-1 last year, according to Automotive News.

Yet record gasoline prices have driven resale values for big trucks such as the Ford F-150, Chevy Silverado and Toyota Tundra down by 20 percent or more this year.

That decline, in turn, is expected to force lenders, including finance companies like GMAC and Ford Motor Credit, to write down the value of vehicle leases.

General Motors Corp and Ford Motor Co could see write-downs of more than $3 billion on a combined basis for the depressed value of trucks and SUVs coming off leases that are then sold at auctions, analysts have said.

The crunch comes at a time of rising concern about liquidity for Detroit automakers. GM shares on Thursday tumbled to their lowest level since 1955, while privately held rival Chrysler LLC had to deny rumors it was facing a cash crunch.

...more...

[TalkingDog]

98. Since I'm wallowing in Southern today..... Kuzdu Ethanol

http://sports.espn.go.com/rpm/nascar/cup/columns/story?columnist=mcgee_ryan&id=3461697


"That idea is pretty cool," Sage said. "The research we did was a side project. For the next phase of the work, we want to scale up to large fields, harvest enough kudzu to get better yield and harvest cost data, and to get enough roots to justify a pilot fermentation study."

When pressed for an official statement on the idea of kudzu-powered cars, a NASCAR spokesman replied just as any true southerner would: "I think I'll stay away from kudzu."

I don't blame him. But don't worry, it'll chase him down and cover him up eventually.

It always does.

[AnneD]

115. Kudzu....

southern bio fuel (we hope). That is as bad as Johnson grass here in this part of Texas. Nasty stuff I would love for someone to come up with a good use for it. Hey, it's possible...look at mesquite. Who knew it made the best flavouring for BBQ. We grew up cursing it's thorns and roots.

[TalkingDog]

153. oops...kudzu.... too many "overripe" berries too early in the a.m. n/t

[UpInArms]

99. August crude up 0.4% at $140.23 after $142.26 Globex high

02. August crude gains 0.2% to $139.90 after $140.95 Nymex high
11:33 AM ET, Jun 27, 2008

03. August crude up 0.4% at $140.23 after $142.26 Globex high
11:33 AM ET, Jun 27, 2008

[ozymandius]

5. BofA to cut 7,500 jobs after Countrywide deal

CHARLOTTE, N.C. - Bank of America said Thursday it will cut about 7,500 jobs after it closes its acquisition of mortgage lender Countrywide Financial Corp.

The job cuts amount to about 12.5 percent of the combined companies' mortgage, home equity and insurance businesses, after the purchase is completed next week.

The Charlotte-based bank said the cuts will take place over the next two years in locations across the country "in instances where the two companies have significant overlap." The company will begin notifying affected employees in the third quarter.

Bank of America expects to close the deal July 1, having received the go-ahead from Countrywide shareholders on Wednesday.

....

Countrywide had been the nation's largest mortgage originator before a spike in bad loans ravished its business. The deepening housing slump and lingering credit crisis have since fueled deep losses.

Countrywide lost about $1.6 billion in the last six months of 2007 and another $893 million in the first quarter of this year. It also faces numerous investigations and lawsuits related to its lending practices.

http://news.yahoo.com/s/ap/20080627/ap_on_bi_ge/bank_of_america_countrywide

[abelenkpe]

101. what?

Those losers are going to go through with that deal? B of A should just hang a sign in their window saying "Two Times Insolvent." Both those companies would disappear if there truly was a 'free market.'

Of course at this point it's pretty easy to see that there never has been a free market. Just a market gamed for the wealthy.

[ozymandius]

6. AIG to lose up to $5 billion from investments: report

NEW YORK (Reuters) - American International Group Inc (AIG.N) said it planned to absorb up to $5 billion on losses of sales of investments from a dozen insurance units hit by the subprime meltdown, Bloomberg News reported on Friday.

...

The world's largest insurer had previously said it would take $500 million of losses on investment sales after the units' securities-lending accounts took $13 billion of write-downs tied to the subprime-mortgage collapse during the past year, Bloomberg reported.

http://news.yahoo.com/s/nm/20080627/bs_nm/aig_loss_dc_1

[Dr.Phool]

14. I wonder what this market will do to the insurance industry as a whole.

Let me rephrase that. I shudder to think what this is going to do to the insurance industry. Especially homeowners insurance.

Down here in Florida, a lot of people are paying more for insurance than they are on their mortgage. It's been a problem for several years, and can only get worse.

If people down here think real estate is collapsing now, I don't think you've seen anything yet.

[ozymandius]

15. Frightful dynamic about insurance companies -

Insurance companies invest mostly in real estate (i.e. slow claim years, no major disasters, etc) as a "safe place" to stash their money when times are good. Insurance companies love commercial property. Now that real estate is taking a huge hit with falling prices - it might seem logical that insurance companies would make haste to claim some bargains. This time it's different.

I remember reading an article a few weeks ago (sorry, but no link available due to my frail memory) concerning the absence of "bargains" during these rough times. It is hard to gauge a bargain anymore because prices are expected to keep falling. Insurance companies are also feeling stress on the accounts receivable end because of sagging returns on current holdings and big disaster claims from the midwestern flood region.

So I would expect insurance companies to keep squeezing as much blood from any turnip they can find. This behavior, as we read here daily, is bad for anyone who stands on the opposite side of a hungry large-cap corporation.

[Tansy_Gold]

52. "Insurance companies love commercial property"

IIRC, commercial property values are tanking as bad as if not worse than residential.


I love the "No one could have imagined" excuse that's trotted out every so often, mostly by smart DUers :D. I don't think the insurance companies, WHOSE BUSINESS IT IS TO IMAGINE THE WORST CASE SCENARIO, are going to be saying this out loud. We ought to be saying it for them!!!!


assholes (sotto voce)



Tansy Gold

[AnneD]

121. If it has come to that....

you should have the option to self insure.

[UpInArms]

77. more info - $13 billion of write-downs tied to the subprime-mortgage collapse

http://www.marketwatch.com/news/story/aig-take-5-billion-insurance/story.aspx?guid=%7BD02C4997%2D4F8F%2D44BC%2DA1EE%2D0D07562459F9%7D&dist=hplatest

LONDON (MarketWatch) -- American International Group plans to absorb losses for a dozen insurance units after their securities-lending accounts suffered $13 billion of write-downs tied to the subprime-mortgage collapse during the past year, Bloomberg News reported Friday.

The amount significantly higher than an earlier commitment of $500 million, Bloomberg said, citing an interview with Christopher Swift, vice president for life and retirement services at AIG (AIG).

AIG also will inject an undisclosed amount of capital into some of the subsidiaries, he told Bloomberg.

The reduction of asset values in the securities-lending portfolio was part of the $38 billion in pretax write-downs that AIG reported during the past three quarters.

That total included reductions of $20 billion on guarantees known as credit-default swaps and $18 billion on mortgage- and asset-backed securities, including some tied to subprime home loans. Most of the mortgage-related holdings are in the securities-lending pool, Bloomberg reported.

...more...

[ozymandius]

7. Rates on 30-year mortgages rise to 6.45 percent

WASHINGTON - Rates on 30-year mortgages rose again this week, climbing to the highest level in more than nine months, reflecting more concerns about how the Federal Reserve will respond to higher inflation pressures.

Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 6.45 percent this week. That was up from 6.42 percent last week.

It was the highest level for 30-year mortgages since they averaged 6.46 percent for the week of Sept. 9. It marked the fifth consecutive weekly increase and the fifth week that they have been above 6 percent.

Frank Nothaft, chief economist at Freddie Mac, said financial markets are uncertain about what the Fed will do in response to rising inflation pressures. On Wednesday, the central bank brought its aggressive campaign of interest rate cuts to a halt, leaving the federal funds rate unchanged at 2 percent.

....

A year ago, rates on 30-year mortgages stood at 6.67 percent, 15-year mortgage rates averaged 6.34 percent, five-year adjustable-rate mortgages were at 6.30 percent and one-year adjustable-rate mortgages averaged 5.65 percent.

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

[ozymandius]

16. Homes Less Affordable as Prices Fall, Rates Rise, Zillow Says

June 27 (Bloomberg) -- Rising mortgage rates are driving up the cost of buying a house even as prices fall, making property more expensive across the U.S., according to a new study by Zillow.com, an online provider of home valuations.

Monthly payments on 30-year fixed mortgages are 6 percent to 10 percent higher in 41 of the top U.S. housing markets than they were two months ago. First-quarter prices have declined from a year earlier in 88 percent of those areas, Zillow said.

``We're going to need about a 30 percent decline in house prices if you are going to keep payments stable,'' said Morris Davis, a former senior economist with the Federal Reserve and now a real estate professor at the University of Wisconsin-Madison's School of Business.

....

U.S. housing was less affordable in April than the previous month even as sales increased in some markets, the Realtors data show. The composite homebuyer index fell to 129.8 in April from 130.6 in March. A value of 100 means that a family with the national median income has exactly enough income to qualify for a mortgage on a median-priced home.

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

[mnhtnbb]

156. Bankrate.com says 6.27% today for 30 yr.

[ozymandius]

8. US stocks head for higher open after big drop

NEW YORK - U.S. stocks headed for a modestly higher open Friday, with investors looking for bargains after a dive in the previous session but wary about oil's pushing past $140 a barrel.

Wall Street is also awaiting a Commerce Department report on personal income and spending and a reading on consumer sentiment. Data on the average U.S. consumer should provide more insight into how much Americans — whose spending accounts for more than two-thirds of economic activity — are struggling with rising prices, falling home values and the shaky job market.

The report is expected to show decent gains in personal income and spending levels in May, thanks to taxpayers' rebate checks. But the University of Michigan's revised report on consumer sentiment in June is expected to indicate that Americans remain very pessimistic.

....

Ahead of Friday's data releases, Dow Jones industrial average futures rose 5, or 0.04 percent, to 11,467. Standard & Poor's 500 index futures rose 2.40, or 0.19 percent, to 1,286.80, and Nasdaq 100 futures rose 2.25, or 0.12 percent, to 1,868.75.

http://news.yahoo.com/s/ap/20080627/ap_on_bi_st_ma_re/wall_street

[ozymandius]

12. U.S. Stock-Index Futures Drop as Oil Surges to Another Record

June 27 (Bloomberg) -- U.S. stock futures fell, indicating the Standard & Poor's 500 Index may extend its worst drop in three weeks, as oil's climb to a record for a second day threatened profits at consumer and transportation companies.

....

Futures on the S&P 500 expiring in September retreated 0.6, or less than 0.1 percent, to 1,283.8 at 7:25 a.m. in New York. The index dropped 2.9 percent yesterday, the steepest decline since June 6. Dow Jones Industrial Average futures slipped 14 to 11,448 and Nasdaq-100 Index futures lost 4.75 to 1,861.75.

http://www.bloomberg.com/apps/news?pid=stocksonmove&refer=&sid=azRjA2oMk8uI

[ozymandius]

20. futures at 8:00

S&P futures vs fair value: -3.8. Nasdaq futures vs fair value: -5.8.

Stock futures are currently indicating a downward start to Friday's trading. Anheuser-Busch (BUD) has officially rejected InBev's unsolicited takeover bid on grounds that the offer is inadequate and is not in the best interest of shareholders. InBev is now making a hostile bid, according to Financial Times.

[ozymandius]

9. Investors see higher risk of GM default

NEW YORK (Reuters) - General Motors Corp's (GM.N) assurance on Thursday that it has sufficient liquidity did not prevent credit investors pricing in a 75 percent chance that the largest U.S. automaker would default on its debt in the next five years.

Costs to insure GM debt against default shot to a record high on Thursday and its bond prices plunged, after investment bank Goldman Sachs urged investors to sell its stock and warned that the car maker would need to raise money.

The stock slumped to a 53-year low and helped bring the Dow Jones industrial average (.DJI) to within a 100 points of a retracement in prices that usually is seen as a bear market.

Goldman's assertion that GM would need additional capital was particularly jarring because investors see its options for raising more funds as limited and costly in the current tight market for high-yield corporate bonds and loans.

.....

The cost to insure GM's debt with credit default swaps rose to 33.5 percent upfront, or $3.35 million per year for five years to insure $10 million in debt, plus annual payments of 500 basis points, according to Markit.

http://news.yahoo.com/s/nm/20080626/bs_nm/markets_credit_dc_1

[ozymandius]

10. Europe Business, Consumer Confidence Falls; Retail Sales Slump

June 27 (Bloomberg) -- European confidence dropped more than economists forecast this month and retail sales plunged, signaling that economic growth is continuing to cool even as the European Central Bank prepares to lift interest rates to a seven-year high to tackle inflation.

An index measuring sentiment in the euro area fell to 94.9, the lowest since May 2005, from 97.6 the previous month, the European Commission in Brussels said today. Separate reports showed European retail sales plummeted, while inflation accelerated in Germany and Spain.

Stocks fell in Europe today as oil climbed to a record above $140 a barrel and Carrefour SA, Europe's biggest retailer, scaled back its earnings forecast. With soaring food and energy prices boosting inflation, ECB President Jean-Claude Trichet has said the bank may raise the benchmark rate next week by a quarter point to 4.25 percent.

....

Recent data show few signs of a recovery yet. A gauge of manufacturing orders within a monthly survey of purchasing managers fell in June, dropping further below a 50-point level that signals contraction. In the services industry, new business also declined this month.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aF_7JYA3K5KI&refer=home

[ozymandius]

11. Lehman's Fuld, McDade to Forgo Their 2008 Bonuses (Update1)

June 27 (Bloomberg) -- Lehman Brothers Holdings Inc. Chief Executive Officer Richard Fuld and President Herbert ``Bart'' McDade will forgo 2008 bonuses, the biggest chunk of their pay, after the fourth-biggest U.S. securities firm reported its first quarterly loss since going public.

Fuld and McDade told managing directors of their decision earlier this week, said two people with knowledge of the matter, who declined to be more specific because the discussions were private. Lehman slumped 70 percent in New York Stock Exchange composite trading during the past 12 months, the second-worst performance in the 11-member Amex Securities Broker/Dealer Index after E*Trade Financial Corp.

....

Lehman may report a loss of more than $700 million in fiscal 2008 after earnings rose 5 percent last year to $4.2 billion as so-called hedges on its mortgage holdings staved off losses, according to a survey of 18 analysts by Bloomberg. Losses at Lehman surged in the second quarter when the hedges didn't work.

http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aWTfB3net_2M

[ozymandius]

13. Asian Stocks Fall on Accelerating Inflation, Record Oil Price

June 27 (Bloomberg) -- Asian stocks fell, sending the region's benchmark index to its worst first half since 1992, as Japan's inflation rose to the highest in a decade and oil traded at a record.

Matsushita Electric Industrial Co., the world's largest consumer-electronics maker, declined after Japan's household spending dropped. Warehouse Group Ltd. tumbled after New Zealand's economy contracted and the discount retailer cut its profit forecast. Taiwan's Taiex Index slumped the most in five months after the central bank raised borrowing costs to a seven- year high. China's CSI 300 Index fell 5.5 percent, extending this year's decline to 47 percent.

``We've entered a period of global stagflation, with record oil prices and slowing growth,'' said Leslie Phang, Singapore- based head of investments at the private clients unit of Schroders Plc, which manages $260 billion assets worldwide. ``Central bankers have got to decide whether they want to sacrifice growth or live with inflation.''

http://www.bloomberg.com/apps/news?pid=20601084&sid=anNQ8Hkb7Mdo&refer=stocks

[Ghost Dog]

23. Japan Consumption Slumps, Inflation Accelerates, Stoking Recession Concern

Japan's household spending slumped in May, the ratio of jobs available fell to a three-year low and the inflation rate almost doubled, signaling that the economy's longest postwar expansion may be over.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=aNcT41pBhh.w&refer=asia

[Ghost Dog]

24. India Inflation Accelerates to Fastest in 13 Years, Adding to Rate Fears

India's inflation accelerated more than estimated to the fastest pace in 13 years, suggesting the central bank may add to this month's two interest rate increases.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=auCS.9njW08g&refer=asia

[Ghost Dog]

25. China Stocks Fall on Interest-Rate Concern; Index Set For Worst Month Ever

China's stocks tumbled, putting the benchmark index on course for its worst month on record, as investors speculated the government will increase interest rates this weekend to help tame inflation.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=aFnylJGEQmA4&refer=asia

[Ghost Dog]

26. Malaysia puts extra 9.21 bln dlrs into five-year plan

KUALA LUMPUR (AFP) -- Malaysia said Thursday it will spend another 9.21 billion dollars on its five-year development plan, to cover the costs of inflation, rural projects and increased food production.

Officials also said some high-profile infrastructure projects would be shelved, including a monorail and a new highway in the northern island state of Penang.

Prime Minister Abdullah Ahmad Badawi said the government would add 30 billion ringgit (9.21 billion dollars) to the original 200.0 billion ringgit allocation as part of a mid-term review of the 9th Malaysia Plan.

The five-year development blueprint is aimed at achieving 6.0 percent growth annually until 2010.

"The increase is... to cater for the rising cost of implementing existing projects as a result of the rising prices of building materials," he said.

Abdullah said it would also cover regional development programs which have been rolled out in poorer parts of the country, as well as boosting food production as commodity prices soar.

"Priority will be given to people-centric projects -- projects which provide amenities and which impart direct benefit to the people, such as water supply, electricity,... poverty eradication and public safety," he told parliament.

Abdullah defended his government's decision to hike petrol prices by 41 percent earlier this month, in view of spiralling global oil prices which had sent the cost of subsidies skyrocketting.

"The reality is that our nation faces difficult challenges, caused by external factors which are outside of our control," he said.

"In the face of these difficulties, the government must have the courage to make decisions and initiate changes that will preserve public prosperity and national interest in the long term."

/... http://www.axilltv.com/at/news.php?id=14021

[ozymandius]

17. (The End of Exceptionalism?) IMF to Examine US Financial System

Der Spiegel, in "The Shrinking Influence of the US Federal Reserve," (hat tip reader Saboor) discusses how the US is submitting to a detailed, comprehensive investigation of it financial system under the Financial Sector Assessment Program.

While Der Spiegel claims that this program is a humiliation to the US, the real significance may be that this is another blow to American exceptionism. While the exam is far-reaching, which means intrusive, Canada, the UK, Italy, indeed 2/3 of the IMF members have participated in the program. However, the Bush Administration has resisted it strongly, and agreed only on the condition that it be completed after a new President is at the helm.

From Der Spiegel:

No Fed chief in US history has been forced to submit to the kind of humiliation that Ben Bernanke is facing.
This is partly down to circumstances...

After years of growth, the United States is now on the brink of a recession, one that is more likely to be deepened than softened by a tight money policy...

Some of Bernanke's personal adversaries are also contributing significantly to his current humiliation. In the past, the chairman of the Federal Reserve was a pope among the priests of the financial elite. But unlike his predecessor Alan Greenspan, Bernanke is finding that his policies are not universally accepted, even within the Fed.

http://www.nakedcapitalism.com/2008/06/end-of-exceptionalism-imf-to-examine-us.html

[radfringe]

27. after a new President is at the helm...???

:rofl: of course, this way the problems/concerns etc can be blamed on the new president instead of the old pResident

who needs terrorists when we have bush and the republiks?

[ozymandius]

29. I know! Jeebus - what a class act our prezteldent is. n/t

[Dr.Phool]

49. Look at the bright side.

I've always been suspicious, and afraid that he won't leave in January.

Hopefully, this means he will. He's probably been bored for a while now, anyway.

[Demeter]

128. Does Cheney Intend To Step Down in January, Then?

Many people had wondered if he would choke at the last minute.....

[54anickel]

139. Oh my! It appears the rest of the world has found their castanets. Guess they finally realize

their own best interests no longer revolve around maintaining the US elephant in the room - not enough room in the lifeboat I assume.

[ozymandius]

18. High Fuel Prices Lead Proctor & Gamble to Shift to Local Manufacturers

High energy prices may be having the same effect. Increased transportation costs are leading companies to rethink how they source their products and shift to local producers where possible. A Financial Times story discusses Proctor & Gamble's response:

Soaring energy prices are forcing Procter & Gamble to rethink how it distributes its products, with the world’s biggest consumer goods company shifting manufacturing sites closer to consumers to cut its transport bill.

Keith Harrison, head of global supply at P&G, the maker of Tide detergent, Crest toothpaste and Pampers, said the era of high oil prices was forcing P&G to change.

“A lot of our supply chain design work was really developed and implemented in the 1980s and 1990s, when our capital spending was fairly high as a cost of capacity and oil was 10 bucks a barrel,” said Mr Harrison in an interview with the Financial Times.

“I could say that the supply chain design is now upside down. The environment has changed. Transportation cost is going to create an even more distributed sourcing network than we would have had otherwise.”

....

The study will include assessing trends such as moves to reduce product size, new sustainable packaging and future consumer demand on a regional basis. It will also try to anticipate changes in the global operating environment.

http://www.nakedcapitalism.com/2008/06/high-fuel-prices-lead-proctor-gamble-to.html

---

I do say without fear of contradiction: the future in production and marketing is going to be local-local-local whether or not we are comfortable with its structure and exponents.

[Tansy_Gold]

28. local - local - local (location - location - location)

Who woulda thunk it?????!!!!

Ultimately, though, some prices are going to rise regardless and a whole lot of people are going to have to learn to do with a lot less. . . . usually a lot less cheap crap, some of it plastic, some of it not.

On the other hand, maybe if things are made to last for a while, instead of fall apart just in time for the latest newest most innovative but untested model comes out, we'll end up having more satisfaction in what we buy.


Maybe.


Tansy Gold

[radfringe]

36. similar things happening with other companies

recent example at my workplace. A customer needed a part, it cost about $300. It had to be shipped from Europe location to here, shipping would cost $500 (which the customer would have to pay) - brings the total cost for the part to $800

customer said nevermind, would find it somewhere else

many companies are looking towards smaller facilities/plants within smaller distribution districts to cut down on the cost of transport - not just US companies, but also European/Asian companies too.

[InkAddict]

44. I had great satisfaction w/my grandmother's mahogany dining suite...

papa's walnut bedroom suite. They've been used hard over their 75+ years, so their actual cash value has diminished, but that didn't stop the corporatists from killing off the income necessary to house these massively large and heavy furnishings. Moving them is a challenge that has human costs to the back and monetary costs for the truck; they won't exactly fit in a shopping cart or a tent, so enjoy.

So, I lit a fire
Isn't it good
Norwegian Wood.

;(

[Tansy_Gold]

56. As a lover of -- and worker in -- both wood and stone

I cry at the thought. :cry: :hug: :cry:

Goddess willing and the crick don't rise, we may enter an age when the emotional/sentimental/aesthetic value of "things" has as much currency as the monetary price tag.

I also know the cost in dollars and U-Haul rental and muscle power to move items like those you mentioned. If I ever have to move again, the cheap veneered crap from Ashley Home Store will not get the priority the 1950s teacher's desk, the hand-made quarter-sawn-oak-and-Italian-tile table, the lamps turned from 1850s oak barn beams, etc. will get.


Tansy Gold, who had to sew the strap on her sandal together again and hope this repair lasts until the soles wear out (which won't be too much longer since the darn things are 8 years old!)

[Demeter]

129. This Year, Locally Grown Strawberries Are CHEAPER

than California's woody, flavorless produce. Yum!

[radfringe]

19. Bloody Friday?

we've had 400 point drops before - considering the 358 point loss yesterday, oil jumps and poor/disappointing economic reports all around. there doesn't seem to be any trickle of good news - 10k or close to it today?

anyone know if smirkboy is going to open his piehole today and "reassure" us that everything is just fine and dandy?










have a breather, take a look at my paintings... http://blueberryscribbles.blogspot.com/

[ozymandius]

22. Hey Rad!

I cast my lot with the pool saying that the next quadruple witching day will send the Dow (and probably all indeces) back to the day when W the Squatter took up residence. That's September 19th. Overall though, we will see the markets struggle to maintain whatever dignity and determination they have left. Like Wile E. Coyote trying to lift that boulder off himself with those toothpick arms.

11,200 used to be the mean to protect. It's a new world now - notably since the IMF is beginning investigations of our Federal Reserve. That's gonna distract the Fed.

:hi:

[radfringe]

30. you are slightly more optimistic than me

I picked 9/11..

[MUAD_DIB]

57. Well, The Fed and White House could just ignore the IMFs email.

Then everything will be okay.


Right?

[InkAddict]

31. Thank you for sharing your paintings...beautiful. n/t

[Hugin]

48. Yay! FREE 'toons!!!ii!!!1!

:D

Edit: Better yet!

[DemReadingDU]

33. Barclays warns of a financial storm as Federal Reserve's credibility crumbles

6/27/08 US central bank accused of unleashing an inflation shock that will rock financial markets, reports Ambrose Evans-Pritchard

Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero".

"We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."

Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond markets will take matters into their own hands. "This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility," said Mr Bond.

The grim verdict on Ben Bernanke's Fed was underscored by the markets yesterday as the dollar fell against the euro following the bank's dovish policy statement on Wednesday.

more...
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/27/cnbarclays127.xml

[UpInArms]

38. dollar watch

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

Last trade 72.434 Change -0.054 (-0.07%)

Meltdown in Stocks Hurts the Dollar

http://www.dailyfx.com/story/bio1/Is_the_Dollar_Rally_Over__1214514756239.html

In the first minute of trading, the Dow Jones Industrial Average broke its Bear Stearns low. The combination of higher oil prices, the technical break in the Dow and news that Goldman Sachs put Citigroup stock on its sell list sent equities tumbling more than 200 points on an intraday basis. The currency market was already bearish dollars following the Fed’s interest rate decision yesterday and today’s meltdown in stocks sent the greenback even lower. Economic data was mixed with GDP and existing home sales rising more than expected but jobless claims and the help wanted index deteriorated. The average selling price of a home was $208,600, down 6.3 percent from a year ago. However the market’s focus is now on the labor market and traders realize that even if the housing market stabilizes, US consumers still face a deteriorating labor market and rising living costs. We expect non-farm payrolls to drop for the sixth month in a row. According to the jobless claims and help wanted numbers, no one is hiring. Car manufacturer Volvo announced today that they are cutting their workforce by 8 percent globally due to soaring raw material costs and weaker demand from the US. This follows recent layoff announcements from Citigroup and Goldman Sachs, reinforcing the Federal Reserve’s cautiously hawkish bias. Even though the FOMC statement was less bearish on growth, we believe that downside risks for the economy have actually grown. But for currency traders, the real question is whether weaker economic data will actually hold the Federal Reserve back from raising interest rates. Personal income, personal spending, the PCE deflator and the final release of the June University of Michigan consumer confidence numbers are due for release tomorrow. These are tier 2 economic data, which means that they are not very market moving. However given the overwhelmingly bearish bias in the market right now, weak numbers could add further fuel to the dollar’s selloff.

...more...

Yen Soars as Fear Returns, Pound Rallies on Improved CA - More Dollar Weakness to Come?

http://www.dailyfx.com/story/bio2/Yen_Soars_as_Fear_Returns__1214559739595.html

Fear is back in the currency markets as yesterday’s -358 point plunge in the Dow was followed by –277 drop in the Nikkei and more 1% decline in the DAX as well. The net result is that USDJPY has fallen more than 200 points in 48 hours and many of the carry trades that have performed so well at the start of the week have come undone.

As we noted earlier, the Fed missed a golden opportunity to surprise the market with a rate hike this week, which no doubt would have hurt stocks but may have also broken the back of oil speculators by strengthening the dollar while making credit more expensive. Instead FOMC’s dilly-dallying produced the worst of all worlds. Oil prices skyrocketed breaking the $140/bbl handle, stocks fell sharply as a result and the dollar continued to weaken not only against the euro, but the yen as well.

On the economic front the news from Japan and Europe was less than stellar indicating that the slowdown is clearly becoming global in scope. In Japan Overall Household Spending – a key measure of consumer strength – fell –3.2% versus –2.0% projected, the worst reading since 2006. In Europe meanwhile Retail PMI hit a low of 44 its worst reading since April as higher prices and massive increases in the cost of energy dampened consumer spending.

The one G-11 country that saw a positive economic surprise was UK. The UK Current Account narrowed sharply in Q1 of 2008 dropping to its lowest level since 2005 from –12.2 Billion GBP to –8.3 Billion GBP. The change was due to a mild improvement in trade of goods but the bulk of the adjustment was due to a rise in surplus of the income account. The pound initially spiked to 1.9900 as traders welcomed the better balance sheet news, but backed off its highs after the realization that income flows rather trade flows were the main reason for the upside surprise. With global equity markets beginning to weaken materially, currency traders doubt that UK will be able to achieve much of a benefit from income flow again.

In North America today, the key event risk lies in the Personal Income and Personal Spending numbers. If income numbers miss to the downside the greenback may see further selling pressure and 1.5800 could give way before the week’s end. If the gap between spending and income widens significantly, the news would suggest that the US consumer is going further into debt trying to finance his day to day expenses. Thus, despite lackluster news elsewhere, the dollar with remain vulnerable on a relative basis as the story in the currency market is quickly becoming a race to the bottom.

...more...

[DemReadingDU]

39. Financial Experts Reassure Nervous Investors

6/27/08 A group of highly respected, universally loved, financial experts gathered early today in a secret meeting to discuss what can be done to reassure overly nervous investors.

Photographer Keith Taylor managed to capture these stunning images of the session.



Posted by Michael Shedlock
I have in my possession an audio taping of the discussion. Unfortunately I cannot make it available because it is not "family friendly" material. However I can provide this partial transcript:

"You ...... What the ..... Stick your ...... inflation targeting ...... Buy futures until .... How the .... hair raising .... strong dollar policy .... up your ...."


http://globaleconomicanalysis.blogspot.com/2008/06/financial-experts-reassure-nervous.html

[AnneD]

123. Is it just me....

or have you noticed that Maria Bartiromo voice has started to resemble Cramer. I mean she is starting to talk louder and be more animated in her broadcasts. It's like-if I say louder, it will be more believeable. The only guys that seems calm is Warren Buffet, George Soros, and Jimmy Rodgers.

[janetblond]

147. Cramer & Bartiromo have BI-POLAR disorder ....

I can tell if the market's up or down, just by the intonation of their voices.
They're all ACTORS.
Their whole world is a stage, and each one is playing their part.
Pretty soon they'll be on Xanax ... slowly, yet calmly coming loose at the seams.
Paulson already has.
He looks like he's gonna choke on his own spit.

[UpInArms]

45. A Smart Idea Spoiled or How Wall Street Ruined Securitization

http://news.yahoo.com/s/bw/20080627/bs_bw/0827b4091040380049

Lewis S. Ranieri, the father of securitization, never imagined his brainchild would cause so much trouble. The Brooklyn-born innovator, who started his career in the Salomon Brothers mail room and worked his way up to the investment bank's mortgage trading desk, crafted in 1977 the first private pool of home loans sold on Wall Street. His creation is now at the center of the credit crisis -- an outcome he predicted in early 2005 when he warned that the mortgage market's excesses would "blow up in our faces."

Today, Ranieri, 61, is an eminence grise to Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry M. Paulson. He has a field-level view of the credit market wreckage as chair of troubled Franklin Bancorp (NasdaqGS:FBTX - News) and co-founder of a fund launched in May that buys distressed mortgage loans. In his first extended interview since the crisis began, Ranieri talked with Associate Editor Mara Der Hovanesian about how Wall Street took securitization to absurd limits -- and how the system can be fixed.

Was securitization necessary?

For most of this country's history, home lending was governed by a simple idea: make loans consumers can afford today and can afford tomorrow -- i.e., 30-year, fixed-rate loans. Things stood that way until the early 1970s. With the baby boomers, the question became how to put all of these people in houses. To accommodate the demographic demand, banks had to keep raising equity, which wasn't realistic. Securitization allowed them to fund the loans off the balance sheet.

Why did it go wrong?

When interest rates go up and refinancings end, the industry has to contract. It's never fun. But at the end of the last cycle in 2004-05, all of a sudden -- and some of us think not accidentally -- instead of normal contraction we had this amazing growth of the subprime industry. It distributed the benefit of homeownership to people who never would have qualified for mortgages otherwise.

Is that how the industry rationalized exotic loans?

That was one of the excuses. In the name of trying to enfranchise everybody, we started creating unstable loans that were designed to blow up in two years. Now the loans need the tooth fairy to keep up their values.

Why did that happen?

There's an old Wall Street adage that there's a nexus between fear and greed. If you diminish fear, you get more greed. People got braver issuing this stuff. All the participants felt they could act merely as agents and collect fees. Nobody was prepared to say "I have liability."

...more...

[Hugin]

54. I have a theory about this...

To go along with my theories about everything else.


What I saw, was that the idea was to break up the risk into little tiny pieces and scatter it widely. On it's
face not such a bad idea... BUT, at the same time there was consolidation in the financial industry of monumental
almost Biblical proportions due to deregulation... Less polite people might call it monopolization.

So, what in essence happened is that all of this risk was then gathered up along with all of those big fish eat
little fish (slightly funded) buyouts. Centralizing it yet again and totally undoing any benefit gained by
scattering the risk in the first place.

Of course the lure to the buyouts was in part the HUGH RETURNS!!!! promised by these funky chunk securities...

So, blinded by the mythical returns and oblivious to the fact they were actually re-consolidating the risk. They
greedily stuffed it in their portfolios. Where it then went bad... Very bad... Then, it wasn't ever very good
to begin with due to the fact it was generated by people who had every incentive in the world to turn out product
regardless of due-diligence or any other factor. Which brings me to my next theory about how if you want to
really screw up something... Pay people on commission... performance... piece part... The Goldman-Sachs model...
slavery... But, that's a rant for another day.

Bottom line... Greed.

What did it in? Wage stagnation... Rising energy costs and people pumping the equity of their assets into their gas tanks.


Now, I'll read the article.

:yoiks:

Edit: Too many 'buts'.

[UpInArms]

67. Like This? [JPM] Fed saw Bear Stearns as too interconnected to fail: minutes

03. Fed saw Bear Stearns as too interconnected to fail: minutes
10:00 AM ET, Jun 27, 2008

[Tansy_Gold]

70. Bottom line ... Greed. And that's the Ayn Rand model

I loved the interview Keith Olbermann did with George Carlin, rebroadcast the other night after Carlin's death: Carlin pointed out that too many people were taking science fiction -- the Bible -- as fact and trying to function in the real world on that basis.

Unfortunately, the model many of the Greenspin school use is similarly based on science fiction: Rand's Atlas Shrugged.

Just as Kevin Phillips deconstructed the political and economic influence of the christian fundamentalists on current policies, I don't think we'd be out of the realm of sanity to examine how macro economic policies of the past 25 years have been impacted by Rand's fiction. Virtually everything Greenspan and now Bernanke are doing -- in my humble and frequently uninformed opinion -- reflects a belief in the moral purity of "the markets" --- and the moral purity of the marketeers. In Rand's blindingly black and white world, businessmen (and a tiny few businesswomen) never did anything wrong. They acted only in "rational" self-interest. Their greed was, well, it wasn't really greedy, because it was never designed to harm anyone else. As I've posted here before, I don't think Rand ever saw ordinary people as "anyone else."

There was an article in Mother Jones a few months ago about predator businesses. I think more and more and more that's the preferred model. And when given free rein, they can only produce what they're designed to produce, which is profit profit profit above all else. And if anything -- including sacrificing short-term profit in favor of long-term sustainability -- gets in the way of immediate instant gratification, it's considered immoral.

So it's not just "the bottom line." It's the next bottom line. Don't worry about the one after that. . .. yet.


Get while the gettin's good seems to be the philosophy.


Tansy Gold

[Ghost Dog]

89. I think you're absolutely right. I shall call such people 'Shruggers'

or 'Shrugs' from now on.

Somebody should sculpt one in wood and stone.

[AnneD]

120. This is one of my pet pevees Tansy......

and a totally invalid business model for long sustained growth. If I gave it a little more brain power, I could probably prove this is why we have these boom bust cycles......

The business model we should be using, esp these days is a cooperative model. You can call it the total sum is greater than the components. As a species, we have survived because we are pack animals-we live in groups, hunt in groups, etc. That can only be done with cooperation. We have too many folks thinking they are alpha when they need to get with the group. There is more than enough for everybody if we start learning to share.

[Ghost Dog]

130. Yes, cooperation and a sense of commonwealth would be very appropriate;

while somehow also maintaining incentives for some or many to sometimes or always try harder.

[Demeter]

131. I Have My Doubts About the Cooperative Model, AnneD

Take my co-op, please!

A more uncooperative bunch of nasty people I have never met. They decided that they would get rich by converting to condos--in 3 weeks.

The conversion proceeds like a house afire (literally)--and at least 2 owners are looking at being homeless in two years or less. They are unemployed, cannot qualify for a mortgage to pay off $50,000 in closing costs, and are unlikely to produce a miracle in time. The condo association will sell their homes out from under them if they don't come up with the scratch.

Perhaps 100 owners are unlikely to get a mortgage in time---it's hard to believe that these fools voted for something they cannot afford. Who did they expect to bail them out?

And oh the pretensions! This is a plan to force the "poor" people out, those who resisted big dollar projects, so that some new, rich, not too bright people move in and cheerfully agree to huge assessments for immediate gratifications.

My dearest wish is that the ones who lied and lied and lied to get people to vote for this mistake of Titanic proportions are the first to be foreclosed upon. Plus the Nazis who are submitting House Rules complaints and clauses.

If it weren't the most beautiful spot I could afford, with the most to offer in location, I would have moved a long time ago. As it is, maybe all these trolls will sell out (or get foreclosed) and some decent people, neither greedy nor nasty, move in.

[AnneD]

135. I think you have fallen into the....

too many alpha's. I have lived in co-op arrangements and have always gotten more benefit. But your group's Alpha's need to be taken down a peg. You did a decent smack down. I would not hesitate to sue for personal or small claims damage.

[Demeter]

145. They Are Wannabe Queen Bees

The place is filled with post-menopausal, divorced women who work for the university in clerical jobs.

If I ever get to be that selfish, just shoot me, please.

[AnneD]

146. Only if you promise to shoot me first......

have a good weekend Demeter.:hug:

[Demeter]

150. You, Too, AnneD!

Now, if I could just work up enough energy to go to the pool, I might cool down. It's a jungle out there, again.

[UpInArms]

46. Merrill may take $5.4 bln in Q2 writeoffs: Lehman

http://www.reuters.com/article/bondsNews/idUSBNG19253620080627

(Reuters) - Merrill Lynch & Co (MER.N: Quote, Profile, Research, Stock Buzz) will likely incur $5.4 billion of write-downs in the second quarter, mainly from its exposure to monolines, said an analyst at Lehman Brothers, who also saw higher quarterly losses at the world's largest brokerage.

Analyst Roger Freeman raised his write-down view by $3 billion for Merrill, making his estimate the highest among Wall Street analysts. Analysts have till date expected write-downs to range from $3.5 billion to $4.2 billion.

"We did a deeper review of Merrill's monoline exposures on non-ABS CDO (asset-backed security and collateralized debt obligation) assets... this incremental $1.7 billion of writedowns constitutes the majority of our adjustment," Freeman said.

In addition to the monoline write-down, the analyst said he was now incorporating a larger CDO/subprime write-down following a sharp decline in the ABX index over the past few days. ABX, a synthetic index of home equity asset-backed securities tied to credit default swaps, is comprised of risky home loans.

Freeman widened his second-quarter loss estimate to $2.78 a share from 64 cents. For 2008, he sees higher losses of $2.99 a share, from his prior view of a loss of 53 cents.

...more...

[UpInArms]

47. KB Home posts deeper loss

http://www.reuters.com/article/ousiv/idUSWNAS946320080627

BOSTON (Reuters) - KB Home (KBH.N: Quote, Profile, Research, Stock Buzz), the No. 5 U.S. home builder, posted a deeper quarterly loss on Friday on tumbling revenue as the United States faced its deepest housing slump in decades.

KB reported a net loss of $255.9 million, or $3.30 per share, in its second quarter, compared with a loss of $148.7 million, or $1.93 per share, last year.

Factoring out a $98.9 million valuation allowance charge, the loss came to $2.03 per share in the quarter, compared with the average Wall Street loss estimate of 90 cents a share, according to Reuters Estimates.

Revenue plunged by more than one-half, to $639.1 million from $1.41 billion, hurt by a 41 percent decrease in the number of homes sold and a 17 percent decline in average price.

"Persistently poor demand for new homes during the second quarter amplified pricing pressures and diminished asset values in many of our served markets," said Jeffrey Mezger, the company's president and chief executive. "Potential new home buyers remain reluctant to purchase a home."

The company said net new home orders fell 42 percent in the quarter to 4,200.

...more...

[UpInArms]

50. 9:42 EST and heading for the deep red end

Dow 11,422.23 31.19 (0.26%)
Nasdaq 2,310.50 10.87 (0.47%)
S&P 500 1,281.40 1.75 (0.14%)
10-Yr Bond 4.008% 0.025

NYSE Volume 229,096,109.375
Nasdaq Volume 106,418,898.438

09:16 am : S&P futures vs fair value: -0.6. Nasdaq futures vs fair value: -2.2. Stocks remain on track for a mixed start as the week's final trading session gets underway. American Internataional Group (AIG) will likely absorb $5 billion in losses from its insurance units after their securities lending accounts suffered $13 billion in write-downs, according to Bloomberg.com.

09:00 am : S&P futures vs fair value: +1.1. Nasdaq futures vs fair value: -5.8. Stocks are on track for a mixed opening, according to futures. Bank of America (BAC) is planning to slash its employee headcount after it closes its acquisition of Countrywide Financial (CFC). The layoffs are expected to take place over a couple of years.

[Dr.Phool]

51. I guess they had their coffe, and got down to line 6 on the income report.

[radfringe]

53. I just heard a rumor

that the PPT has been spotted filling and stacking sandbags on wall street :shrug:

[Theres-a]

72. .

:spray:

[AnneD]

124. Honey....

that wasn't sand they were spreading:evilgrin:

[UpInArms]

58. 10:06 EST - Traders find a line of blow

Dow 11,463.84 10.42 (0.09%)
Nasdaq 2,325.07 3.70 (0.16%)
S&P 500 1,288.21 5.06 (0.39%)
10-Yr Bond 4.012% 0.021

NYSE Volume 546,244,937.5
Nasdaq Volume 267,067,062.5

10:00 am : The stock market has made its way out of the red and is now sporting a decent gain. Its counterparts have also moved out of negative ground, but flutter along the unchanged mark.

The University of Michigan consumer confidence survey came in at 56.4, which is a bit below expectations and last month's reading, marking a new multiyear low.DJ30 -0.08 NASDAQ -0.95 SP500 +2.79 NASDAQ Adv/Vol/Dec 1086/228 mln/1310 NYSE Adv/Vol/Dec 1228/156 mln/1553

09:45 am : The major indices have fallen into the red shortly after the session's opening bell. Weakness is broad-based.

At its current level, the stock market is on track to finish the week down 2.8% and finish the month down 8.5%.

Oil prices continue to weigh on investors' minds as crude prices stretch higher and hit new intraday records. Oil is currently trading hands at $140.80 per barrel.DJ30 -41.77 NASDAQ -16.58 SP500 -3.66 NASDAQ Adv/Vol/Dec 788/125 mln/1496 NYSE Adv/Vol/Dec 899/96 mln/1816

[Hugin]

61. It's the myth of line #6...

Y'know, disposable incomes up... They always fall for that one.

[radfringe]

64. problem with disposable income being "up"

most people are disposing their income into their gas tanks

[Hugin]

68. Then it's disposed of income...

Done spunt.

Gone.

Pfft.

History.

Zilch.

Goose egg.

Hollow.

Empty.

Sent to the Null Device.

Tah-tah.

Met it's maker.

Bought the farm and it went into foreclosure.

Sailed.

Went away.

Bon-voyaged.

[radfringe]

73. please make one correction...

regarding: Bought the farm --add---> and it went into forclosure

[Hugin]

76. Done.

:thumbsup:

[Doctor_J]

60. woo-hoo! A rally!

19 points of yesterday's 350-point slide are back! "We've turned the corner" :eyes:

[Pale Blue Dot]

62. Here's the message that's screaming to me today:

Just a month ago, the markets would have greeted today's income, spending and inflation numbers with a huge rally. Right after the bell stocks would have been up at least 100 pts. and they would have ended the day up 200-300 pts. - especially the day after a huge loss. I know the day is early and this could still happen, but what all this is saying to me is that Wall Street is no longer drinking the koolaid. Which means, I think, that we are finally in the endgame.

If so, my pick in the pool of 7/3 may not be that far off.

:scared:

[Hugin]

63. ...

Uh, you picked 7/2.

Do you want to change it?

[Pale Blue Dot]

66. Nah.

I'm feeling... lucky? :scared:

[MUAD_DIB]

65. This pool that you and others speak of.....

What do you win if your horse comes in first; besides witnessing the collapse of the American Dream and the Republican Party?

[Pale Blue Dot]

69. I'll win that America will finally wake up to reality and begin to make changes.

I'll win that talking heads will stop trying to convince us that this is not happening, thereby delaying the inevitable.

I'll win the opportunity to be listened to when I suggest painful but necessary steps to get us back on our feet.

I'll win the pleasure of never having to hear again that we're Americans, and because of that we'll always be prosperous, no matter what idiot things we do.

Last but not least, I'll get to watch Freidmanesque neoliberal economic theory die a painful death.

[Tansy_Gold]

75. In that case, finnfan, we all win n/t

.

[Hugin]

78. Well put.

Especially that last point.

[MUAD_DIB]

85. Well, I hope that the prize also contains an end to the MSM

being owned by the conglomerates, not having to get the real news from satirists, and a solution for this krap not happening again.

The problem is that there is going to be a lot of finger pointing and blame coupled with an increasingly angered American populace. Let's just hope that the anger is used constructively and it doesn't give Mugabe, ahem...excuse me, Bush any excuse to stick around.

[Demeter]

133. I'd Rather Get the News From a Satirist

than a sadist like W.

[Hugin]

74. Well, I don't think anyone here is too wild about the first part...

I know I've always been fond of the American Dream. But, it's long been used as a wedge against those who
have not and a justification for those who have and didn't earn it. Maybe it's time to call it the American
Promise?

But, isn't the second prize you speak of prize enough?

[MUAD_DIB]

83. The American Dream was been an illusion for many. It all depends

upon where you live and your socio economic scale. I'm just concerned that regardless of where the Dow is when President Monkeynutz leaves office it will be secondary to the lies regurgitated by the MSM.

I hope that Finnfan is right about the people waking up. It's always too bad that they wake up after losing a figurative limb and are spurting blood.

The second prize will come at a high cost, though, and that gets back to my first point about the MSM. They shouldn't be allowed to be owned my the conglomerates who wish to control the message.

Until there is a departure on that level just be prepared for more of the same BS.


Is there a poll so see when * departs the USA for Paraguay, Saudi Arabia or the Emirates?

[AnneD]

152. The prize you get if your horse doesn't come in first?????

the prize you always get when you enter this thread....some straight information, a good laugh, and a chance to be with others that think with their brains instead of their other anatomical points. I didn't think of a second or third place prize. The first place prize is mentioned in the pool post.

The key to being successful is to keep your cool when everyone else is panicking. The pool is a way to accomplish this. None of us will be surprised when we have big drops (unlike some surprised economists) and we have all had a chance to prepare and invest accordingly. It's a virtual holiday for thread posters.

And as for the American Dream-I think George Carlin was probably right-it always was a dream.

[TalkingDog]

71. News from the trenches: Blackberry musings

Blackberries are ripe. It's that time of year.

Unlike the clockwork regular and finely parsed schedule of humans, blackberries and indeed all of creation, have their own, state dependent, agenda. Not enough rain? Well, slow down and wait. Not enough sun? Pretty much the same.

But a hard sour berry, after 2 days of brief showers, can transform into a glorious and fleeting thing. That same berry after 3 days of moderate rain is soggy and flavorless. So, if we mere humans want to taste the nectar that is a perfect berry, it is on their rather particular schedule and not ours.

Usually and in my own experience, berry picking is a group activity. There are a lot of reasons for this; safety being the main concern. Copperheads, water moccasins, various spiders, toxic insects, rabid animals, are all concerns for the berry picker. So as one picks carefully and studiously through the sharp tangles for the perfect, fat berry, a barely conscious rhythm of silence and signal is maintained. Long spans of almost perfect, concentrated silence broken by a voice, a need to reconnect with others in the safety of the tribe.

These vocalizations are usually comments on the exquisite flavor of a particularly irresistible berry, discovery of a bountiful vine, curses thrown at briars, unsteady footing or the ubiquitous and irritatingly plentiful Junebugs. For all the disdain they draw in the berry patch, Junebugs are the most likely creature to be secretly envied by the berry picker. It seems that their entire brief life is taken up with sitting in the warm summer sun, eating the ripest of the blackberries and seemingly continual procreation. If forced, in some future attempt at karmic balance, to reincarnate on the insect level, returning as a Junebug is at the top of the list.

Sometimes, by chance or by choice, berry picking is done in solitude. Usually, and as with me in this instance, early in the morning. Unlike the group pick with it's monkey mind, monkey chatter, the lone picker is left exclusively in the company of mist, bird calls, dogs waiting patiently for a bit of too ripe berry to be offered and the heavy, fruit laden vine.

As I pick, I fall into the decades long body memory of practiced regularity. And in the unthinkingness of continual motion, I feel my consciousness begin to shift, ever so slightly toward opening. And in those liminal moments, I invariably begin to ponder the grinding of snail shells on rocks.

In certain tribes the shaman's apprentice at his upper levels, is taught to induce a trance state by exceedingly simple means. This is after he is taught the more familiar, more traditional methods: chanting, drumming, dance, the blunt instruments, if you will. After that, it is a matter of fine tuning one's perceptions, of understanding exactly the moment when the veil parts and transition into the imaginal space is possible.

Without fail, each method of trance induction involves engaging as many of the senses as possible. As if focusing each part of your conscious mind and each part of your body into this one activity directs your physical brain to produce the brainwave state known to us as alpha; a sort of light functioning trance state where movement and action is possible and for the shaman who is working with a patient, desirable.

Of the many ways this state can be attained, the one we are probably and unknowingly familiar with is sitting by a waterfall. With it's rush of sound, smells of oxygenated air, water and mud. The feeling of mist on the skin. We feel light and easy and relaxed. We feel good, but we don't know exactly why.

In another, it is the grinding of a snail shell on rock. The white noise of steady grinding, the rhythmic motion of the body, the smell of nacre flinting off stone, the weight of the body given to the arm and into the hand as it grinds. Picking berries in the morning solitude is like this. Full of deeply concentrated movement, careful, focused attention, the flux of insulated quiet and sharp birdsong.

Those moments of near opening, of being on the threshhold of that other, unreal space, allow the mind to draw connections, to have ephiphanies, to make discoveries.

And so, as I was quietly and studiously, picking berries this morning, as I have over many years and many decades, it occurred to me that in the innocence of my childhood, I had no realization that we were gathering the food that would help us survive in the harder months. It wasn't like my mother ever said: “We must pick these so we will have enough food to eat come winter.” Although it was exactly the case once or twice when blackberry dumplings and sweet tea were all of dinner.

To a child, blackberry dumplings for dinner was having desert without having to suffer though collards with vinegar. Again. Unlike those nights with only fried fatback and biscuits, which were a little more obvious in their poverty.

Fatback, may not be as widely known or familiar as blackberries. If not, allow me to share.

Fatback is a 2 inch thick, 4 inch wide, 5 inch long slab of pork fat with a bit of the skin left on top. Usually used for seasoning or to gather grease for frying other food. It is cut into strips of ¼ inch and fried thoroughly. The resulting strip of salty fried fat with the crunchy skin rind can be eaten, and usually was, in our household, as a side to greens of any sort.

Some nights, not many, but enough to create a memory, there was fatback and biscuits for dinner.
It could have been the set of my mother's mouth that told us complaining would be pointless. It was what there was. However on the nights of blackberry dumplings it is possible that, as children, we were so taken with the mere idea that we did not notice the intent or reason behind the novel treat.

I'm sure if, today, you could summon my mother's spirit to ask, it would never have occurred to her that she was teaching me a survival skill by educating in the ways and means of blackberries. Nor in taking me to the garden, nor in forcing me to pick and clean and can on all those days when all I really wanted in the world was nothing more than to be out in the woods packing with the dogs, catching crayfish, building dams across a shallow neck in the creek. She was simply doing what her sharecropper parents taught her to do. Garden and pick and preserve and survive.

Yes, over the years I kept gardening, kept picking and cleaning and canning. But more in the fashion of Marie Antoinette, who had her country estate turned into a sort of royal theme park with constructed hovels replete with livestock boarded in the shacks. Here she and her guests played “peasant” on holiday. Gardening and canning were activities that gave me pleasure. That I could do at my leisure. That would not impact my life if it rained too much, or not enough. Or if the rains flooded and washed away all my cropland. Or, as happened to my grandfather once, the hail destroyed an entire planting and I had to find money, sell the cow or go into debt to buy more seed or I would not be able to pay my lease with crops and my family would not eat come the hard winter. One cannot survive on fatback and blackberry dumplings alone.

It has taken me years of leisurely tinkering to learn the skills that seemed innate in my mother: how to plant just so, when best to water, who is unhappy in the plot and why, where the worm that has been gnawing on the tomato vines is most likely hiding and finding him before he strips the plant bare.

And I suppose what concerns me today, what has prompted my blackberry musings is the pondering on the future of food. And the people that need it to survive if the rains continue or the wheat rust spreads or the price of oil makes buying food untenable.

How will they learn? Who will teach them?

We have lost so much along the way. Forgotten too much. Having grown up without danger, believing we are invincibly safe, we have strayed off alone to pick in a sunny patch where gathering is much too easy and it seems that a time without plenty can never possibly come.

We have forgotten the winter. We have forgotten the snakes.

[Theres-a]

80. Deserves it's own post

Did you write that? Great stuff.

[TalkingDog]

112. Yes. And thank you. nt

[UpInArms]

...

:applause:

btw - where's your journal? This is a keeper and should be published far and wide.

:grouphug:

[TalkingDog]

113. After the Spousal Unit's suggestion,

I think I'll clean it up a bit and send it off to the Sun. http://www.thesunmagazine.org

They've turned me down a couple of times, but it doesn't cost me anything but a stamp.

Your appreciation is appreciated.

[AnneD]

138. I was talking to an older friend...

about the very same thing the other day. We were talking about our early farm years and the best ways to slaughter chickens. I tried to teach my daughter lots of things, but I never passed on my farming skills and knowledge, much to my regret. She has a minimal understanding of fishing but would be at a loss to skin cook or eat anything other than a fish.

I am enjoying my produce from my garden now and saving seeds for next year. I hope I passed it to her in the genes.

[Ghost Dog]

132. Here:

http://journals.democraticunderground.com/TalkingDog

[zippy890]

84. we'll learn again when we have to

that is a beautiful post.
Thanks.


:thumbsup:

I do believe some people will be resilient enough to get through.
Most will have a difficault time.

[Ghost Dog]

92. Unreal City,

Under the brown fog of a winter dawn,
A crowd flowed over London Bridge, so many,
I had not thought death had undone so many.

[Tansy_Gold]

97. Amen, TD, amen.

It's a bit different here in the desert. Harsher, with fewer of the sweet soft moments that I remember from Indiana, where there was a berry patch along the wide edge of the shallow lake north of our house. The berry patch was mostly small black raspberries, but some blackberry canes, too, on which the fruit in a good year was big as a man's thumb. The kids were little, but we hiked the quarter mile every day when the berries were ripening and we made jam at home. And we got eaten alive by mosquitoes and scratched to bits by the thorns.

The thorns were the worst, and down in the tall thick grass were the nastiest of them all, on the creeping ground-level canes of the dewberries. You had to reach under them to feel for the berries, and even the leaves had thorns on the backs of them, so if you weren't careful you'd have as much blood as berry juice on your hands before you were done. But the dewberries were fatter and juicier and tenderer than all the others.

Picking berries and my underground house, though, are all I miss about Indiana.

Instead of blackberries and dewberries, I have jojoba beans. I've been collecting them while I monitor the dogs to keep Biscuit from going over the fence or Moby from digging huge holes. This morning I finally found a recipe for roasting them, and I may take a small dish of roasted, salted jojobas to the party tonight.



Tansy Gold

[Hugin]

103. Insightful...

Interesting thoughts, TalkingDog.

[JNelson6563]

111. Damn Skippy.

:yourock:

[DemReadingDU]

142. Thank you, that was very nice

"Having grown up without danger, believing we are invincibly safe"

It is going to be a different place. Everyone will need to rely on family, neighbors, community, to learn from, and survive.

[ozymandius]

149. Brings back murmurings of my youth.

When my mother and father used to take me to the garden to gather squash, beans and corn. It seems like a century ago. Thanks for this beautiful story TalkingDog.

[UpInArms]

81. Discover Financial sees higher charge-offs - Results add to concerns about credit-card industry

http://www.marketwatch.com/news/story/discover-results-raise-concerns-about/story.aspx?guid=%7B41AB5CF0%2DA6C7%2D49B1%2DB248%2D5E432F4D39E9%7D

BOSTON (MarketWatch) -- Discover Financial Services reported a 12% jump in second-quarter profit on Thursday, but the company said it expects higher charge-offs later this year, adding to concerns about the credit-card industry a day after American Express Co. warned of a deteriorating environment.

Riverwoods, Ill.-based Discover (DFS) said that profit came in at $234.1 million, or 48 cents a share, for the three months ended May 31, compared with $209.2 million or 44 cents a share earned in the year-ago second quarter.

Analysts polled by Thomson Reuters had, on average, forecast earnings of 37 cents a share for the latest quarter.

But Discover also said that its managed charge-off rate was 5.05% in the quarter, up from 3.97% a year earlier. The rate of credit-card customers that are more than 30 days late on payments was 3.85%, up from 2.97% a year ago, the company reported.

"Given current economic environment, we expect losses to continue to trend up during the second half of this year," said David Nelms, chief executive of Discover, during a conference call with analysts Thursday.

The rate of managed charge-offs will likely increase to roughly 5.5% by the fourth quarter of 2008, he estimated.

Credit-card companies are being hit as slumping house prices, slowing economic growth and rising unemployment limit the ability of some customers to pay back debts racked up on their cards.

...more...

[UpInArms]

86. 10:52 EST they finally read line #6

Dow 11,390.07 63.35 (0.55%)
Nasdaq 2,305.32 16.05 (0.69%)
S&P 500 1,280.92 2.23 (0.17%)
10-Yr Bond 4.002% 0.031

NYSE Volume 1,048,946,375
Nasdaq Volume 544,120,000

10:30 am : Stocks have pared some of their early gains. The Dow Jones Industrials Average and the Nasdaq have fallen back into negative ground.

Energy (+1.3%) is showing strength in the early going. Providing leadership to the sector are players in the exploration and production industry (+1.8%). The sector and its industry component are up as oil continues to trade with gains. Crude prices are currently indicated near $140.50 per barrel.

Treasuries are attracting modest attention. The 10-year Note is up 10 ticks and yielding 3.99%, which is its lowest in 10 days.DJ30 -20.28 NASDAQ -2.73 SP500 +3.13 NASDAQ Adv/Vol/Dec 1157/414 mln/1401 NYSE Adv/Vol/Dec 1328/264 mln/1536

[Pale Blue Dot]

88. "Read line #6!" may become my new motto.

:rofl:

[Pale Blue Dot]

87. Uh-oh: 10:55 and the Dow's down 58 pts.

NASDAQ's off 14 and S&P is down 2.

[UpInArms]

90. Anheuser-Busch to cut up to 1,290 jobs this year: report

01. Anheuser-Busch to cut up to 1,290 jobs this year: report
10:52 AM ET, Jun 27, 2008

[Pale Blue Dot]

91. I don't care about any other indicator -

if people are spending less on alcohol, then that must mean we're in really deep shit.

[radfringe]

107. Geisinger Health near me is partially closing one facility

400 to be laid off by September

[Cal Carpenter]

94. Well, the good news is...

it's not as bad as yesterday... :shrug:






(...yet... :scared: )

[UpInArms]

95. I'm waiting for them to say "not holding stocks over the weekend"

'cuz isn't that how investing is done?

[Hugin]

100. I never hold my stocks over the weekend...

It would be gauche.

I sell them ALL and buy them ALL back on Mondays. Always.

:smuglook:

[AnneD]

96. HEAT WAVE...POOL'S OPEN EARLY ON FRIDAY.....

Well, who wound have guessed I was right on Wednesday. I guess any monkey with a typewriter can eventually come up with Shakespeare. I figure folks don't want to hold a position over the weekend, esp. with the 4th coming up so here we go.........

Guess the date the DJIA rolls back to the level it was when the chimp took office-10,578.24. You can revise your dates up until Labour Day (the working man's holiday)or the DJIA hits 11000 (got to have a cut off). Anyone can join, just give a date and your reasoning for that date.

bahrbearian.....7/1
finnfan.....7/2
InkAddict.....7/3
Karenia.....7/8
UIA.....7/15
Alterfurz.....7/22
Roland99.....7/28
TOJ.....7/31 or the day after Bush or Israel invades Iran, some folks just have to have their floaties
Abelenkpe.....8/2
GhostDao.....8/5
Kineneb.....8/8
Talking Dog.....8/17
DWellwer.....8/19
Dr.Phool.....8/23
Nadinebrezezinski.....9/1
Radfringe.....9/1
MattSh.....9/2
Kineneb.....9/4 taking advantage of bet spreading
Prag.....9/5
MoJo Rabbit.....9/5
Kicksana.....9/8
MuleBoy(aka hiz honna da mayor).....9/11
Nickster.....9/12
Ozy.....9/19
Demeter.....9/21
Ozone man.....9/23
Birthmark....10/10
Demreading DU.....10/16
TansyGold.....10/13
Roland99.....10/17, you have 2 dates, are they correct?
AnneD....10/24
Neshanic.....10/24
MsLeopard.....10/31
Wordpix.....11/3
Passingfair.....11/4
Ship wrack.....11/5
Wednesdays.....1/16/2009 your optimism is so refreshing.



Remember-you can change the dates as we learn more. If your date isn't on the list, e-mail me and I'll add it the next time I post. I erased expired dates so you can guess again. I post about one a week-more often the closer we get to the number. The winner get the praise and admiration of those on the Stock Watch Thread. We have also kicked in for a years worth of bragging rights and Karl Rove as you own pool boy if we can find Speedos to fit. There is still time to place your bets.....And please-no Reggie bars in the pool.

[Demeter]

134. I'm Tempted To Chase The Wave

but I've been burned too many times this spring. I simply cannot believe that all of a sudden nobody cares about the DOW anymore, that it is going to slide right into the red ink without even token protest.

So I'll hold.

[Wednesdays]

155. Heh,

I wouldn't characterize my saying "The Titanic will sink in two hours" vs. those who say it'll sink in one hour as "optimism".

And if the worst of the others' scenarios come to pass, the egg on my face will be the least of my worries.

[UpInArms]

102. 12:11 EST markets recover knowing the Fed will bail them out again

Dow 11,417.84 35.58 (0.31%)
Nasdaq 2,314.36 7.01 (0.30%)
S&P 500 1,284.61 1.46 (0.11%)
10-Yr Bond 3.994% 0.039

NYSE Volume 1,758,834,750
Nasdaq Volume 844,174,750

12:00 pm : All three of the major indices are trading with losses at midday, extending the week’s decline. Record oil prices are helping dampen investors’ spirits and overshadowing positive economic data; crude took out another intraday record high of more than $142 per barrel in early trading.

Friday’s weakness has been relatively broad-based with seven of the ten major economic sectors sporting losses. Financials have been a notable laggard, down 0.8%.

Reports are indicating Merrill Lynch (MER 32.92, -0.13) may incur additional write-downs just a day after a similar assessment was made by Goldman Sachs. In like manner, American International Group (AIG 27.59, -0.50) will likely face valuation adjustments of its own, according to Bloomberg.com. The report indicated the financial behemoth may report a quarterly loss as a result of write-downs from its insurance units.

On the earnings front, Accenture (ACN 40.92, +2.07) reported better-than-expected results for its most recent fiscal quarter. The company also issued upside guidance for the coming quarter and increased its full-year outlook. At the other end of the spectrum, Micron Technology (MU 6.31, -0.68) and KB Home (KBH 17.33, -0.80) reported losses that were worse than analysts anticipated.

The board of Anheuser-Busch (BUD 62.65, +1.30) has rejected InBev's takeover offer, stating it is inadequate and not in shareholders’ best interest. According to Financial Times, InBev is now taking its bid directly shareholders in a hostile takeover attempt.

The day's primary economic release offered a dose of positive news. Real personal consumption expenditures (PCE) data for May were up 0.4%. April was revised upward to a 0.2% increase. This puts the second quarter average of April and May 0.5% above the first quarter average, which is already a 2% annual rate of growth. Another gain is likely in June, due to spending resulting from the fiscal stimulus. In turn, this puts real PCE on track to post a 2.5% annual rate of growth in the second quarter. Recall, PCE represents approximately 70% of GDP.

The University of Michigan’s final consumer confidence survey for June came in at 56.4, which is a bit below expectations and last month's reading. The June reading marks a new multiyear low. The depressed consumer confidence survey contrasts with the aforementioned increase in PCE.DJ30 -49.34 NASDAQ -11.51 SP500 -1.12 NASDAQ Adv/Vol/Dec 949/806 mln/1792 NYSE Adv/Vol/Dec 1127/497 mln/1895

11:35 am : The stock market has moved upward toward the unchanged mark. Still, seven of the ten economic sectors are in the red. Decliners on the NYSE outnumber advancers by nearly 2-to-1.

A couple of players in the telecom arena were given uninspiring marks by analysts at Credit Suisse. Credit Suisse downtraded shares of handset maker Nokia (NOK 24.32, -0.74) to Neutral from Outperform. The firm also initiated coverage of Motorola (MOT 7.22, -0.08) with an Underperform grade.
DJ30 -59.20 NASDAQ -10.31 SP500 -1.70 NASDAQ Adv/Vol/Dec 965/722 mln/1738 NYSE Adv/Vol/Dec 1110/443 mln/1875

[UpInArms]

104. Fed: Emergency help for Wall Street was necessary to avert "contagion" of financial system

http://biz.yahoo.com/ap/080627/fed_credit_crisis.html

WASHINGTON (AP) -- The Federal Reserve was scrambling to prevent a "contagion" from infecting the nation's financial system when it took unprecedented actions to back a Bear Stearns rescue package and provide emergency loans to big Wall Street firms.

The Federal Reserve released documents Friday providing insights into its private deliberations in March that led to those controversial decisions. The Fed's actions came at a time when credit and financial problems were intensifying, threatening to paralyze the entire financial system and plunge the economy into a recession.

Given the fragile conditions of the financial markets at that time, the Fed said it felt compelled to intervene because an "immediate failure" of Bear Stearns would bring about an "expected contagion."

Fed Chairman Ben Bernanke and his colleagues initially moved on March 14 to provide temporary emergency financing to investment bank Bear Stearns Cos. through an arrangement with JP Morgan Chase & Co. Two days later as the investment bank teetered on the brink of bankruptcy, the Fed agreed to provide backing for up to $30 billion of a deal where JP Morgan would take over the troubled company.

That same day -- March 16-- the Fed said it would allow big Wall Street firms to go directly to the Fed for emergency loans, a privilege only commercial banks had enjoyed. It was the broadest use of the Fed's lending powers since the 1930s.

The Fed's decision to take this action was "based on recent, rapidly changing developments," the documents said. "These developments demonstrated that there had been impairment of a broad range of financial markets" that Wall Street firms rely on for financing.

There was fear that other Wall Street firms could become in jeopardy, sending problems cascading through the financial system.

Democrats in Congress and other critics contend the Fed's actions are akin to a government bailout and are putting billions of taxpayer dollars at risk.

...more...

[Hugin]

105. On days like this, I always look deeper into the components and win vs. loss charts.

Trying to get some sense of where the float is.

[UpInArms]

106. these

Advances & Declines 	NYSE	NASDAQ
Advances	1,234 (37%) 	965 (33%) 
Declines	2,030 (61%) 	1,800 (62%) 
Unchanged	89 (3%) 	120 (4%) 
Up Vol*         624 (39%) 	192 (24%) 
Down Vol*	976 (60%) 	571 (72%) 
Unch. Vol*	16 (1%) 	27 (3%) 
New Hi's	32	23
New Lo's	406	266

(edited to square up that chart visually)

[Hugin]

109. Lately, it's been in the...

Energy sector.

Heeyuck! I wonder why! :silly:

[AnneD]

110. It's all those .......

unfair taxes that the government is refunding. You know....instead of sending us those rinkydink refund checks-whick some of us didn't get anyway....why doesn't the government send the taxpayers something they could really use-like a gross of KY Jelly.:grr:

[AnneD]

108. Morning Marketeers.....

:donut: Was house bound yesterday waiting for the A/C repairman. In Houston, that is a major deal. Funny thing though, we are so acclimatized now that I run it very low and tend to shut it off more, esp at nights. I have to keep it cool for the dogs though-it's hard wearing a fur coat in the summer. The westie is sporting her summer buzz cut, and is she ever happy. I put out the kids pool and throw in a bag of ice for them in July (don't worry, I give it to my plants after we finish. They love it-it is the highlight of their summer.

And speaking of kids...my daughter recently got another e-mail from Cal Arts and she is now up to 19K in scholarships, grants, and student loans. We have about 12K left to go to pay for her first year. She got another job at an ad agency where she calls up. My friend closes but Leila will get a residual check. She has already landed one account and my friend is so pleased. They have 3 more that they are trying to close. This may pay her very well.

I told my daughter that I would match her dollar for dollar what she put in her credit union account from May 30-Aug 20. I figure that would give her incentive to save, esp her graduation money. I had to really kick her in the pants to get her to give out the card-but all our friends have been so generous and kind to her. She got some beautiful thank you cards (art nuevo style)and she has been diligent about sending them out.

I told her that we would try to get her there but it was up to her after the first year. She is trying to line up a student work thing to cover any tuition shortfalls. We will start looking for sheets and things this next week for her dorm room next week. The rooms are fairly large for two students (she is an only child-so I am sure THIS will be interesting-but I'll let her discover that). I am old fashion and insist she get a footlocker that locks. I lost mine after the umpteenth move, but it was a real workhorse in my young life. She has a small weekend bag, which is the other thing I told her she needed. She will be near LA and all of California will beckon I'm sure.

Ah the bittersweet joys of sending your child off into adulthood.

Happy hunting and watch out for the bears.

[UpInArms]

116. Commentary: Public trust eroding, bit by bit (ya think?)

yeah, I know it's a commentary from May, but I only just saw it - so you get to see it now, too.

http://www.marketwatch.com/news/story/public-trust-eroding-watchdogs-fall/story.aspx?guid=%7BAF8C7AEE-81C2-457C-BB14-3C79047104C4%7D

Much of the problem stems from the practices of financial institutions of every sort that have decided to stop serving the public with honest service. The idea instead emerged that the clients could easily be gouged if not fleeced by "fees."

Banks, for example, discovered that the general public wouldn't squawk about being charged exorbitant fees for insufficient funds then could be charged over and over if a merchant resubmitted the check. If it turned out to be a banking error with cascading charges for all other checks written, it's nearly impossible to get the fees reversed.

But why stop there? Let's gouge the public for using the ATM machine or, in some instances, the bank teller. I was stunned that some banks would add a fee for actually using the bank. And the idea of the ATM was to save money for the bank, so on top of that they add a fee if you use it?

And then there are the credit-card companies that essentially practice a kind of usury, and to make it worse they add even more dubious fees whenever possible. To add insult to injury they persuade Congress to change the bankruptcy laws so they always get their money.

Fleecing the public

Every single institution of public trust has decided to go all in and see what they can steal from a passive uncomplaining public made paranoid by government surveillance and the now seemingly permanent orange-alert status of the country over terrorism.

[thewiseguy]

117. Dow is nose diving

[UpInArms]

118. 1:15 EST and yeppers, that boat has definitely sprung a leak

Dow 11,328.84 124.58 (1.09%)
Nasdaq 2,298.77 22.60 (0.97%)
S&P 500 1,274.69 8.46 (0.66%)
10-Yr Bond 3.992% 0.041

NYSE Volume 2,289,012,250
Nasdaq Volume 1,095,297,125

1:00 pm : Buyers are having a difficult time putting together a sustainable rally. The S&P 500 has surrendered its earlier advance and joined its counterparts in the red.

Small and mid-cap stocks are also out of favor. The Russell 2000 is down 0.4% and the S&P 400 is down 0.3% this session.

Energy (+1.0%) continues to show relative strength, despite the session's dampened mood. Exxom Mobil (XOM 86.95, +0.54) is currently providing leadership to the sector.DJ30 -72.39 NASDAQ -13.42 SP500 -2.91 NASDAQ Adv/Vol/Dec 959/1.03 bln/1817 NYSE Adv/Vol/Dec 1092/630 mln/1962

12:30 pm : The S&P 500 has made its way back to the unchanged mark in choppy fashion. Its counterparts, however, are still in the red.

Forestry and wood product company Weyerhauser (WY 50.27, +0.08) announced it will incur pretax charges ranging from $300 million to $325 million related to lowered real estate prices or impairments.

Energy, healthcare, and materials are the only three sectors sporting a gain this session. All three sectors have advanced 1.0% or more.DJ30 -43.46 NASDAQ -5.39 SP500 +0.80 NASDAQ Adv/Vol/Dec 1017/911 mln/1739 NYSE Adv/Vol/Dec 1198/559 mln/1825

[Hugin]

119. They don't want to hold their stocks over the weekend...

That's my guess.

Oh, and they saw line #6.

[Hugin]

122. ~13:30 ET: Mind the puddles...

Index Last Change % change
• DJIA 11331.37 -122.05 -1.07%
• NASDAQ 2296.19 -25.18 -1.08%
• S&P 500 1274.38 -8.77 -0.68%

Prag-o-blather(tm): Still quite a distance from any discernible PISL. Couches on hold.

[Hugin]

125. ~13:45 ET: DOW cautiously approaching 11,300.00 PIL...

Index Last Change % change
• DJIA 11312.89 -140.53 -1.23%
• NASDAQ 2291.86 -29.51 -1.27%
• S&P 500 1272.79 -10.36 -0.81%

[thewiseguy]

126. Almost down 150

:(

[AnneD]

127. May be they are going for....

11200 as PISL, they tend to like round even numbers-and 11000 is still kinda scary. Remember we have to be aclimitized slowly for the least amount of panic....sshhhh!

[janetblond]

148. Yep .. The market is dropping sooooo S-L-O-W-L-Y- .. a lot of ..

a lot of the dummies didn't realize until yesterday, we're in a bear market!

[formercia]

137. Venice on the Moskva, BP gets it caught in the Kremlin gate.

http://www.mineweb.net/mineweb/view/mineweb/en/page38?oid=55522&sn=Detail

BP FUMBLES RUSSIAN OIL ASSET GRAB
Chapter 2 - BP at Kremlin gate, hoist on its own petard

Russians beat Brits at PR detonation
Author: John Helmer
Posted: Friday , 27 Jun 2008

MOSCOW -

In the old days, before artillery fire could be directed with precision, the only way an attacking force could breach a fortified gate or wall was to manually deliver a large package of gunpowder; fix it to the target; light the fuse; and run away. Our word for the modern mortar, and the French word for this medieval device, are related. But the French has a double-meaning, because it also refers to the breaking of human wind.

It was Shakespeare's Hamlet, who appreciated both, when he dispatches two men he knows to be plotting to kill him with altered letters that will seal their doom, instead of his. As Hamlet expresses the famous thought: "tis sport to have the engineer/Hoist with his own petard."

In all the meanings Hamlet meant can be found the predicament in which British Petroleum (BP) is now hoist in Moscow. What chief executive Tony Hayward and TNK-BP CEO, Robert Dudley, thought was the brilliant stroke of making an alliance with Gazprom, and President Dmitry Medvedev, to rid themselves of three Russian oligarchs, has turned into an embarrassment for Gazprom and the new men in the Kremlin; a boon for Prime Minister Vladimir Putin and Rosneft; and the one thing BP dislikes most about Mikhail Fridman - a boost to his ability to shake a second fortune out of the pockets of a mark he's already scored once.

--snip--

[wordpix]

140. read this from Mother Jones: Put a Tyrant in Your Tank (May-Jun 08)

http://www.motherjones.com/news/feature/2008/05/put-a-tyrant-in-your-tank.html

Put a Tyrant in Your Tank

NEWS: You thought ExxonMobil was bad? Meet the new kings of crude.

By Joshua Kurlantzick

May/June 2008 Issue

Sponsored by Mother Jones

Jeroen van der Veer is no pushover. The 60-year-old CEO stands out as a tough guy in an industry filled with them. In 2004, after taking the helm of Shell, the frugal, hawk-faced chief executive forced the $300 billion oil company through a painful restructuring. He borrowed a management model from his Dutch military days, deliberately holding strategy sessions in cramped rooms where his subordinates had to stand while their leader remained seated.

This tough demeanor was glaringly absent, however, when van der Veer met with Russian president Vladimir Putin in the winter of 2006. Shell had toiled for a decade to develop Sakhalin-2, a vast $22 billion oil and gas project on Russia's remote eastern coast, when Putin seized the reins and handed them off to Gazprom, the state energy concern. To retain a financial stake in the project, Shell reportedly had to pay the Kremlin a special dividend worth hundreds of millions of dollars annually. Yet in announcing the deal, the hard-assed CEO came off more like a cheerleader. "Thank you very much for your support," van der Veer gushed, addressing Putin as the two men stood together in an ornate Kremlin stateroom. "I think for us, the great news is there's now stability, so we can all work together." snip

[Ghost Dog]

154. "This isn't a story about investment, disinvestment,

"This isn't a story about investment, disinvestment, tax minimization, asset raids, and foreign hedging in energy resources, although the Fridman group has skillfully pointed their attack on BP in that direction. Nor is it about the protection of foreign investment. Rather, it is about personal foolishness and political folly. A strategem of resource politics by a British company and its advisors has gone so colossally pear-shaped, it should drive BP's share price in the same trajectory. And that is exactly what is happening."

[RUMMYisFROSTED]

141. Uh oh!

[skoalyman]

143. Hey AnneD put me down for 9/29 in the pool

lol I'll try my luck. I seem to be having a lot of luck this year as I'm always either winning in the uk lottery or I have a long lost friend from Nigeria wanting me to hold millions in my account and then keep a large percent of it lol:shrug:

[AnneD]

144. Gotta love that optimism...

and what a coinkydink-I recently heard from a long lost friend from Nigeria too. This is a lucky year for us. I am still waiting for my Irish sweepstakes winnings, but the way things are going, I should get that soon.

[ozymandius]

151. post mortem numbers and blather (with insane trading volume)

Dow 11,346.51 Down 106.91 (0.93%)
Nasdaq 2,315.63 Down 5.74 (0.25%)
S&P 500 1,278.38 Down 4.77 (0.37%)
10-Yr Bond 3.99% Down 0.043
NYSE Volume 6,175,116,000
Nasdaq Volume 4,135,261,500

4:15 pm : Friday’s record oil prices fed the dour mood on Wall Street and cast a shadow on positive consumer spending data. In turn, the major indices each closed lower, extending the week's losses. Week-to-date, the S&P 500 lost 2.9%, the Dow Jones Industrials Average lost 4.1%, and the Nasdaq fell 3.8%.

Crude prices rallied all the way to $142.99 per barrel to set a new all-time intraday high. In the end, prices eased as oil closed slightly higher at $140.25 per barrel on the Nymex. Crude prices are up more than 45% year-to-date.

Financials finished the session as the worst performing sector. The sector closed 1.3% lower, as every one of its industry components finished lower, except insurance brokers (+1.9%). For the week, financials lost 6.5%. Merrill Lynch (MER 32.70, -0.35) grabbed its share of attention as reports indicated the firm may incur additional write-downs and may sell its stake in BlackRock (BLK 177.64, -3.06). Speculation of write-downs had limited affect on shares of MER, given that Goldman Sachs made the same inference yesterday. On a similar note, American International Group (AIG 27.69, -0.40) will likely be hit with write-downs of its own, which may result in a loss, according to Bloomberg.com.

On the earnings front, Accenture (ACN 41.27, +2.42) reported better-than-expected results for its most recent fiscal quarter. The company also issued upside guidance for the coming quarter and increased its full-year outlook. That was about the extent of the day's positive earnings news as Micron Technology (MU 6.10, -0.89) and KB Home (KBH 17.72, -0.41) reported larger-than-expected losses for the latest quarter.

According to Financial Times, InBev is making a hostile bid for Anheuser-Busch (BUD 62.26, +0.91) after Anheuser-Busch rejected the Belgian brewer’s offer for being inadequate and contrary to shareholders’ best interest.

The day's primary economic release was largely overlooked. Real personal consumption expenditures (PCE) data for May were up 0.4%. April was revised upward to a 0.2% increase. In turn, the second quarter average of April and May data 0.5% above the first quarter average, which is already a 2% annual rate of growth. Since another gain is likely in June, due to spending resulting from the fiscal stimulus, this puts real PCE on track to post a 2.5% annual rate of growth in the second quarter. Recall, PCE represents approximately 70% of GDP.

The University of Michigan’s final consumer confidence survey for June came in at 56.4, which is a bit below expectations and last month's reading. The June reading marks a new multiyear low. Note that the depressed survey results do not coincide with a similar drop in PCE.DJ30 -106.91 NASDAQ -5.74 NQ100 +0.0% R2K -0.0% SP400 -0.4% SP500 -4.77 NASDAQ Adv/Vol/Dec 1154/3.15 bln/1735 NYSE Adv/Vol/Dec 1165/2.24 bln/1969