STOCK MARKET WATCH, Thursday July 10

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday July 10, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 195
DAYS SINCE DEMOCRACY DIED (12/12/00) 2727 DAYS
WHERE'S OSAMA BIN-LADEN? 2452 DAYS
DAYS SINCE ENRON COLLAPSE = 2743
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.
$1 USD = EUR 1.06678
$1 USD = JPY 116.6200

AT THE CLOSING BELL ON July 9, 2008

Dow... 11,147.44 -236.77 (-2.08%)
Nasdaq... 2,234.89 -59.55 (-2.60%)
S&P 500... 1,244.69 -29.01 (-2.28%)
Gold future... 928.60 +5.30 (+0.57%)
30-Year Bond 4.43% -0.03 (-0.63%)
10-Yr Bond... 3.83% -0.05 (-1.19%)






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: Who Should You Believe?

BY CHRIS PUPLAVA

Those most pessimistic on the economy and stock market have been proven right over and over again over the last year and a half, with those who listened to their calls for caution preserving their wealth instead of watching it evaporate, which has been the fate of those following the permabulls. Wall St. economists, financial pundits, and government talking heads have been dead wrong and led many astray, though what has been most surprising is that investors continue to follow the advice of those who didn’t even see this train wreck coming, with examples provided below.

Bernanke: There's No Housing Bubble to Go Bust

Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.

U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president's Council of Economic Advisers, in testimony to Congress's Joint Economic Committee. But these increases, he said, "largely reflect strong economic fundamentals," such as strong growth in jobs, incomes and the number of new households.

Nell Henderson
Washington Post, October 27, 2005

Greenspan sounds optimistic note on housing

Former Federal Reserve Chairman Alan Greenspan said that last week's rise in weekly mortgage applications could signal that the ``worst may well be over'' for the U.S. housing industry, according to a report of a speech Greenspan gave in Canada on Friday.

John Shinal
MarketWatch, October 7, 2006

Compare those comments to those who were laughed at with their dire projections last year who have been proven right, such as NYU’s Professor Nouriel Roubini, who argued early last year for credit losses north of $1 trillion.

Compare those comments to those who were laughed at with their dire projections last year who have been proven right, such as NYU’s Professor Nouriel Roubini, who argued early last year for credit losses north of $1 trillion.

As I argued in writings last February such credit losses would be at least $1 trillion and could be as high as $2 trillion, well above the $300 billion of subprime writedowns that have been recognized so far. At that time the $1 trillion estimate was considered as lunatic but by now the IMF estimates these losses at $945 billion, George Magnus of UBS estimated them at $1 trillion; Goldman Sachs put them at $1.1 trillion, the legendary hedge fund manager John Paulson (who made last year $3.5 billion of income on shorting subprime) put them at $1.3 trillion; and a couple of days ago Bridgewater Associates estimated such losses at $1.6 trillion. Thus, as I argued then $1 trillion would be floor, not a ceiling, to such credit losses.…

So brace yourself for a severe recession in the US and other advanced economies, a serious global growth slowdown and a systemic financial crisis. The worst is ahead of us rather than behind us and the financial and equity markets complacency and sucker’s rally that – in April and May - followed the Bears Stearns creditors rescue and the Fed bailout of non-bank broker dealers (the PDCF lender of last resort support extended to primary dealers) was gone by June with stock markets now back to bearish 20% plus downward adjustment.

...

The current stress in the financial markets is unparalleled to previous financial crises. Commercial and investment bank stress can be seen when looking at depository institutional borrowing from the Federal Reserve, which is off the charts. What’s more, the Federal Reserve has swapped its balance sheet with Wall St. by exchanging its U.S. Treasury Securities for mortgage backed securities that can’t find a bid. Unprecedented credit lending has led to unprecedented losses.

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

[Joanne98]

56. permabulls... that's a good name for them.

[ozymandius]

2. Today's Report

08:30 Initial Claims 07/05
Briefing 395K
Consensus 395K
Prior 404K

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

[UpInArms]

35. Initial Claims @ 346,000 - no revisions to last week (wait for next week's rev)

04. U.S. 4-wk. avg. continuing jobless claims rise to 3.13 mln
8:30 AM ET, Jul 10, 2008

05. U.S. continuing jobless claims rise 91,000 to 3.20 mln
8:30 AM ET, Jul 10, 2008

06. U.S. 4-wk. avg. initial claims fall 10,000 to 380,500
8:30 AM ET, Jul 10, 2008

07. U.S. weekly initial jobless claims fall 58,000 to 346,000
8:30 AM ET, Jul 10, 2008

[Dr.Phool]

38. Three day holiday week-end.

[ozymandius]

3. Oil rises on US stock report, Middle East tension

VIENNA, Austria - Oil prices rose Thursday following reports of diminished U.S. crude stocks and renewed Mideast tensions.

Nigeria's main militant group also vowed to resume attacks in the country's oil-rich river delta region because of Britain's recent pledge to back the government in the conflict there.

....

Light, sweet crude for August delivery rose 31 cents to $136.36 in electronic trading on the New York Mercantile Exchange by noon in Europe.

The contract seesawed Wednesday in the floor session before settling a penny higher at $136.05, ending two days of sharp declines that left prices 6.4 percent below last week's record high.

Figures from the Energy Information Administration showed U.S. oil supplies fell 5.9 million barrels, or 2 percents, last week. That is greater than the drop of 1.9 million barrels forecast by analysts surveyed by the energy research firm Platts.

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

[UpInArms]

36. Suburbs feeling the pinch as fuel prices soar

http://www.reuters.com/article/domesticNews/idUSN3047989020080710?sp=true

NEW YORK, (Reuters) - Ever since the rise of the automobile in the 1950s, the American Dream has featured a home in the suburbs and two cars in the garage.

Now the iconic white picket fence comes with a hefty price tag in the form of the cost of the gasoline needed to drive to work and to the supermarket, and the suburban idyll is under review.

In different parts of the United States, there are signs of change. While home prices in the suburbs have crashed, apartments in city centers are in demand. Home builders across the country are frantically trying to unload land they had intended for new subdivisions. And planners are rethinking how they can meet demand for housing.

One such place is Stapleton, on the site of what used to be Denver's airport. Its developer, real estate company Forest City, puts homes within walking distance of schools and stores while linking them to the workplace by public transportation.

Resident Evelyn Baker says Stapleton appeals to a "cheapskate" side of her nature that favors towing her offspring about in a trailer attached to her bike over paying for gas for her car.

...more...

[UpInArms]

79. Crude jumps more than $5 to above $140 a barrel

01. Crude jumps more than $5 to above $140 a barrel
2:37 PM ET, Jul 10, 2008

[ozymandius]

4. US foreclosure filings surge 53 percent in June

WASHINGTON - The number of homeowners stung by the rout in the U.S. housing market jumped last month as foreclosure filings grew by more than 50 percent compared with June a year ago, according to data released Thursday.

Nationwide, 252,363 homes received at least one foreclosure-related notice in June, up 53 percent from the same month last year, but down 3 percent from May, RealtyTrac Inc. said. One in every 501 U.S. households received a foreclosure filing last month.

Foreclosure filings increased from a year earlier in all but 11 states. Nevada, California, Arizona, Florida and Michigan continued to have the highest foreclosure rates.

Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions. More than 71,000 properties were repossessed by lenders nationwide in June, the company said.

http://news.yahoo.com/s/ap/20080710/ap_on_bi_ge/foreclosure_rates

[ozymandius]

12. additional info

U.S. Foreclosures Rose 53% in June, Bank Seizures Almost Triple

...
``The foreclosure problem is getting worse and will stay with us well into the next decade,'' Mark Zandi, chief economist for Moody's Economy.com in West Chester, Pennsylvania, said in an interview. ``The job market is eroding and homeowners have less equity. Lenders are much less willing to work with you if you've got negative equity, and you're more likely to give up your house if you're deeply underwater.''

About $3.5 trillion in homeowner equity has been wiped out since the spring of 2006, when housing prices were at their peak, Zandi said. Home prices fell the most on record in April, according to the S&P/Case-Shiller index of 20 U.S. metropolitan areas. June was the second straight month in which more than a quarter million properties received foreclosure filings, RealtyTrac said. Filings fell 3 percent from May.
...

About 53 percent of borrowers with subprime loans, those with poor or incomplete credit histories, will have negative equity in their homes at the end of the year, and the number will rise to 63 percent in 2009, New York-based analysts at Credit Suisse led by Rod Dubitsky said in an April 23 report.

http://www.bloomberg.com/apps/news?pid=20601087&sid=abT98mv4UtNI&refer=home

[ozymandius]

5. Banking woes push stocks towards 21-month low

LONDON (Reuters) - World stocks fell towards this week's 21-month low on Thursday as fresh concerns resurfaced over the financial sector -- the epicenter of the nearly one-year-old credit crisis.

Woes at top U.S mortgage lenders intensified overnight as Fannie Mae (FNM.N) and Freddie Mac (FRE.N) fell 13 and 23 percent respectively on concerns the two home finance firms may need to raise tens of billions of dollars of new capital.

Merrill Lynch (MER.N) -- among several banks which report earnings next week -- saw its shares fell nearly 10 percent after Fitch Ratings said it may cut the bank's debt rating given expected writedowns and diminished prospects for earnings.

....

STAGFLATION FEARS

Financial markets are facing headwinds as the credit crisis-induced slowdown in the U.S. economy spreads into other parts of the world.

http://news.yahoo.com/s/nm/20080710/bs_nm/markets_global_dc

[ozymandius]

6. Wachovia Hires Steel to Mend Investor Relationships (Update1)

July 10 (Bloomberg) -- Wachovia Corp., the fourth-biggest U.S. bank, hired Wall Street veteran and Treasury Undersecretary Robert Steel as chief executive officer to fix relations with shareholders and regulators after more than $3 billion of losses this year tied to the U.S. housing market.

Steel, 56, former vice chairman of Goldman Sachs Group Inc., took the job yesterday as Wachovia said it expects to report a second-quarter loss of at least $2.6 billion, or $1.23 a share, on increasing defaults by home borrowers. Analysts were estimating the Charlotte, North Carolina-based company would earn 12 cents a share, according to a survey by Bloomberg.

....

Steel's biggest challenge will be winning back the confidence of shareholders after a 62 percent drop in Wachovia's stock this year. Investors pushed for the ouster of 57-year-old Thompson after home-loan losses piled up, the dividend was cut by 41 percent and the bank raised about $8 billion of new capital. The company said in May the first-quarter loss widened 80 percent to $708 million because of writedowns for insurance policies.

http://www.bloomberg.com/apps/news?pid=20601087&sid=apkYD10LUGtY&refer=home

[Demeter]

9. Fix? How? Mafia Style?

[UpInArms]

15. Better Headline: Deputy US Treasury chief named to head Wachovia bank

http://news.yahoo.com/s/afp/20080710/bs_afp/ustreasurybankcompanywachovia

WASHINGTON (AFP) - Wachovia Corp named US Treasury Department Under Secretary Robert Steel as its new chief executive Wednesday after the commercial banking giant ousted its previous CEO over hefty mortgage-related losses.

Treasury Secretary Henry Paulson said in a statement that his friend of more than 30 years "has served the president and the public with ingenuity and dedication during extraordinary times in our financial markets.

"I know he will excel in his future endeavors," Paulson said.

Like Paulson, Steel is a former senior executive at the prestigious investment bank Goldman Sachs.

Since October 2006 he served as treasury under-secretary for domestic finance, acting as Paulson's principal advisor on the issue and guiding fiscal policy and operations, and playing a key role in the rescue in March of troubled US investment giant Bear Stearns.

With less than four months until the presidential election, Steel will not be replaced, but his portfolio will be shared by other Treasury officials.

Steel, 56, takes the reins at Wachovia, the fourth largest US bank in terms of assets, succeeding Ken Thompson who was ousted by the board of directors in June as they sought to stem hefty losses tied to troubled mortgage loans.

...more...

[UpInArms]

20. more info:

http://www.reuters.com/article/businessNews/idUSWNAB024020080710?feedType=RSS&feedName=businessNews?sp=true

]i]NEW YORK (Reuters) - Wachovia Corp, the fourth-largest U.S. bank, named senior Treasury Department official Robert Steel chief executive, and said mortgage and legal problems would result in a $2.6 billion to $2.8 billion second-quarter loss, much larger than many analysts expected.

Steel, 56, has been under secretary for domestic finance since October 2006, playing a critical role in helping Treasury Secretary Henry Paulson manage the U.S. housing crisis and mounting losses for the banking industry.

The crisis has hit Wachovia hard. A $24.2 billion purchase in 2006 of California mortgage specialist Golden West Financial Corp saddled it with $121 billion of poorly performing home loans -- the main reason for the projected quarterly loss.

Steel's blend of government and private-sector experience might be a boon for Wachovia, analysts said. Before joining the Treasury Department, Steel had worked at Goldman Sachs Group Inc, where Paulson was chief executive. Steel retired as Goldman vice chairman in February 2004.

...more...

[ozymandius]

21. Seems he has intimate knowledge of unlisted phone numbers

to people who will help Wachovia cover its losses.

[UpInArms]

30. cover?

or cover-up?

:hi:

[UpInArms]

44. New Wachovia CEO could get more than $38 mln

http://www.reuters.com/article/bondsNews/idUSWEN661020080710

NEW YORK, July 10 (Reuters) - Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz) on Thursday said new Chief Executive Robert Steel could be awarded more than $38 million in salary, bonus and other awards in his first year running the fourth-largest U.S. bank.

In a regulatory filing, the Charlotte, North Carolina-based bank said it will award Steel a $1.1 million salary, a bonus targeted at $6 million but which could range from zero to $12 million, and a $15 million target long-term incentive award.

Wachovia said Steel will on July 15 also receive a one-time restricted stock grant valued at $10 million.

Steel had been under secretary for domestic finance at the U.S. Treasury Department before accepting the Wachovia job.

He has been a key figure in the Bush administration's response to the nation's housing and credit crisis. Wachovia has been among the large banks hardest hit by that crisis.

[Demeter]

89. Whatever Happened to Those Dollar-a-Year Executives Who Signed On for Recovery?

or am I really dating myself there?

[ozymandius]

7. Steve & Barry's files for Chapter 11, to explore sale

NEW YORK (MarketWatch) -- Steve & Barry's filed for Chapter 11 bankruptcy protection Wednesday, becoming yet another victim of the retail downturn and declining credit markets that have clammed up retailers' access to financing.

The Port Washington, N.Y.-based chain, which offers cheap fashions featuring celebrities such as Sarah Jessica Parker, said that it will explore a sale of the company and/or its assets to repay outstanding debt. The retailer will initiate cost-cutting moves that will begin with slashing 172 corporate and field-staff positions.

Steve & Barry's 276 store locations in 39 states were open Wednesday and conducting business as usual. The company has 9,600 employees worldwide, including 8,600 in the United States, according to spokeswoman Wendi Kopsick. No decisions have been made about store closings, she said.

....

Steve & Barry's last year invested substantially more in capital expenditures than the amounts reimbursed, making it unable to realize planned returns from these investments, the company said. Store delays have caused inventory and fixtures to sit idle while incurring interest and storage costs, further reducing liquidity, the company added. Many suppliers that became nervous also cut off access to services and supplies, while landlords stopped remitting contractually owed payments for construction and store-opening work performed by the company.

http://www.marketwatch.com/news/story/steve--barrys-files-bankruptcy/story.aspx?guid=%7B4374A5BE-10E7-456F-B336-AE14E8519ECD%7D&dist=msr_13

[ozymandius]

8. Fannie, Freddie `Insolvent' After Losses, Poole Says (Update1)

July 10 (Bloomberg) -- Borrowing at Fannie Mae, the U.S. government-sponsored mortgage company, has never been so expensive and it may not get better any time soon.

Fannie Mae paid a record yield relative to Treasuries on the sale of $3 billion in two-year notes yesterday amid concern the biggest provider of financing for U.S. home loans won't have enough capital to weather the worst housing slump since the Great Depression. The company's credit-default swaps show traders are treating the AAA rated debt as if it were five steps lower. Fannie Mae shares tumbled 13 percent yesterday in New York to the lowest level in almost 14 years.

Chances are increasing that the U.S. may need to bail out Fannie Mae and the smaller Freddie Mac, former St. Louis Federal Reserve President William Poole said in an interview. Freddie Mac owed $5.2 billion more than its assets were worth in the first quarter, making it insolvent under fair value accounting rules, he said. The fair value of Fannie Mae's assets fell 66 percent to $12.2 billion, data provided by the Washington-based company show, and may be negative next quarter, Poole said.

.....

The government is counting on Fannie Mae and Freddie Mac, which own or guarantee about half the $12 trillion in home loans outstanding, to help revive the housing market. Congress lifted growth restrictions on the companies, eased their capital requirements and allowed them to buy bigger ``jumbo mortgages'' to spur demand for home loans as competitors fled the market.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a7NPAG.LEjHQ&refer=home

[Demeter]

11. Guess Where the Mortgage Broker Is Sending All the Co-op

for conversion mortgages?

[ozymandius]

19. Mortgage broker does not read the news much, eh? But then...

Maybe the broker does not have to read about the mortgage industry. Do you get the impression that the broker is trying to deflect some problems?

[Demeter]

87. IMO the Broker Tried To Squeeze Out One Last Commision Before the Shutdown

of the entire credit industry. I'm praying he missed the boat, for all the shareholders' sakes.

But these biddies think there's a pot of gold at the end of their conversion....they'll commit murder to make it happen, and then weep for the rest of their lives over the shearing they took.

[ozymandius]

17. Disaster Planning for Freddie and Fannie Intensifies

The Wall Street Journal (hat tip Saboor) sends mixed signals in a page one story for tomorrow, "U.S. Mulls Future of Fannie, Freddie." The Journal reports that contingency planning in case the two GSEs get into trouble has stepped up, yet go to some lengths to take a reassuring tone:

The Bush administration has held talks about what to do in the event mortgage giants Fannie Mae and Freddie Mac falter, according to three people familiar with the matter, as the stock prices of both companies continue to fall sharply.

These discussions have been going on for months and are part of normal contingency planning that the Treasury Department and other financial regulators regularly undertake. The talks have become more serious recently given the financial woes of the shareholder-owned, government-chartered companies, whose stability is vital to the functioning of the nation's housing market, these people say.

The government doesn't expect the entities to fail and no rescue plan is imminent, these people said. Government officials and market analysts expect both companies will be able to raise large amounts of capital relatively easily. Treasury officials are nonetheless talking about what the government could -- or should -- do if Fannie and Freddie become so pressed that they are unable to borrow money and continue operating.

Contrast the "Oh we're planning for a disaster as a matter of prudence, there's really nothing to worry about" message with the presentation by Jim Hamilton at the Fed's Jackson Hole conference last August. Remember, that was during the first acute phase of the credit crunch, when the focus of concern was interbank liquidity and the implosion of the asset backed commercial paper market:

Since 1990, U.S. nominal GDP has increased about 80% (logarithmically). Outstanding mortgage debt grew 50% more than this, raising the debt/GDP ratio from about 0.5 to 0.8. Mortgage-backed securities guaranteed by Fannie and Freddie grew 75% faster than GDP, while mortgages held outright by the two GSEs increased 150% more than GDP. The share of all mortgages held outright by Fannie and Freddie grew from 4.7% in 1990 to 12.9% in 2006, which includes $170 billion in subprime AAA-rated private label securities. The fraction had been as high as 20.5% in 2002.3. It is hard to escape the inference that expansion of the role of the GSEs may have had something to do with the expansion of mortgage debt.

This acquisition of mortgages was enabled by issuance of debt by the GSEs which currently amounts to about $1.5 trillion. Investors were willing to lend this money to Fannie and Freddie at terms more favorable than are available to other private companies, despite the fact that the net equity of the enterprises-- about $70 billion last year-- represents only 5% of their debt and only 1.5% of their combined debt plus mortgage guarantees. If I knew why investors were so willing to lend to the GSEs at such favorable terms, I think we'd have at least part of the answer to the puzzle.

....

To continue bolstering the mortgage market, the companies need constant access to the debt markets. If investors suddenly decide they don't want to buy the companies' debt, the companies might have to unload some of their holdings, including mortgage-backed securities. Investors have already lost confidence in mortgage-backed securities other than those guaranteed by Fannie, Freddie and the Federal Housing Administration. A dumping of mortgage-backed securities would raise interest rates for people seeking home loans.

http://www.nakedcapitalism.com/2008/07/disaster-planning-for-freddie-and.html

[UpInArms]

22. "insolvent" and may need a U.S. government bailout, Poole was quoted as saying

http://www.reuters.com/article/bondsNews/idUSBNG6370020080710

(Reuters) - Mortgage lenders Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) are "insolvent" and may need a U.S. government bailout, former St. Louis Federal Reserve President William Poole was quoted as saying in an interview with Bloomberg.

"Congress ought to recognize that these firms are insolvent, that it is allowing these firms to continue to exist as bastions of privilege, financed by the taxpayer," Poole was quoted as saying in an interview held on Wednesday.

Chances are increasing that the government may need to bail out the two mortgage companies, Poole was quoted as saying.

Shares of the two companies have taken a beating recently on worries about whether they can withstand more losses and support housing as well as concerns that they may need to raise massive amounts of new capital.

...more...

[UpInArms]

23. Fannie Mae CEO Pay Cut 15 Pct to $12.2 Mln in 2007 (articled dated January 2008)

http://www.reuters.com/article/bankingFinancial/idUSN3023856920080131

NEW YORK (Reuters) - Fannie Mae's chief executive took a 15 percent pay cut in 2007 as the No. 1 mortgage finance company struggled with soaring credit expenses.

Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) CEO Daniel Mudd received $12.2 million in total compensation last year, down 15 percent from 2006, the government-sponsored enterprise said on Wednesday. Mudd's pay included his $990,000 salary, a $2.23 million bonus and a $9 million "long-term incentive" award, the company said.

In 2006, Mudd received a $3.5 million bonus and a long-term incentive award of about $10 million, Fannie Mae said. Total pay for 2006 was $14.45 million.

Fannie Mae has been hurt as the housing slump and rising mortgage delinquencies boosted credit expenses to $2 billion in the first nine months of 2007 from $400 million. The company reported a $1.5 billion third-quarter loss and predicted the housing slump would worsen in the fourth quarter and 2008.

Mudd on Tuesday told a Citigroup Inc. conference that he underestimated the speed and depth of the housing decline.

Shares of Fannie Mae lost a third of their value in 2007, and continued to decline in January amid expectations that its holdings of risky subprime mortgages and reliance on shaky bond insurers would produce write-downs. But the company appears better positioned than its rival Freddie Mac (FNM.N: Quote, Profile, Research, Stock Buzz), which holds more subprime securities, analysts said.

...more...

[UpInArms]

25. and info from 2005

http://www.washingtonpost.com/wp-dyn/articles/A14462-2005Mar30.html

Fannie Mae's executive-pay policies provided "perverse incentives" to top officers to inflate earnings, a recent academic study has found.

The study, distributed yesterday by the Program on Corporate Governance at Harvard Law School, also took Fannie Mae's past pay practices to task for rewarding "failed" executives and for what it said was inadequate public disclosure about the full pension benefits available to retiring executives.

This month, pressured by its federal regulator, Fannie Mae eliminated the incentives that federal officials and other critics blamed in part for Fannie Mae's current accounting problems. The Washington-based mortgage-finance company overstated its earnings from 2000 to 2003 by as much as $12 billion and is restating its finances for those years. The Office of Federal Housing Enterprise Oversight, Fannie Mae's regulator, has suggested that the accounting errors may have been willful, in part to increase Fannie Mae's earnings per share and thus increase the bonuses available to senior executives.

<snip>

They also criticized Fannie Mae's disclosures about Raines's retirement benefits before and after he was forced out. While disclosing the number and current value of stock options Raines was allowed to keep when he retired, as well as his $114,000 monthly pension benefit, Fannie Mae did not disclose any estimates of how much these benefits would ultimately cost shareholders.

Raines was 55 when he retired, and the authors estimated that his retirement package could be worth as much as $25 million to him and his wife.

...more...

[ozymandius]

34. his $114,000 monthly pension benefit

For what?! Where's the torch? Where's the pitchfork?

I must dash off for a few hours. Back before the close.

:hi:

[Demeter]

90. Perverse Is the Only Quality of BushWorld

George Walker Perversity Bush

[UpInArms]

28. from 2004: High Pay at Fannie Mae For the Well-Connected

http://www.washingtonpost.com/wp-dyn/content/article/2004/12/23/AR2005033106125.html

If Fannie Mae were an ordinary public company, the millions of dollars in pay and other compensation that outgoing chairman Franklin D. Raines and other top executives have pocketed over the years would be business as usual.

But like few other companies, the mortgage giant was created by the federal government, carries out a public mission and has an implied government guarantee on its debt offerings.

Thus, the seven- and eight-digit pay packages its executives receive attract more than the usual attention when they come to public notice, as has been the case several times in the past 15 years.

"You are not simply another private corporation," Rep. Barney Frank (D-Mass.) told Raines at a hearing this fall. "There is a lot of government involvement."

Government pay is limited at the top, even for officials who run enormous agencies. The postmaster general, for example, who heads an agency with more than 700,000 employees and more than $65 billion in revenue, is paid about $175,000. And there are no stock options.

Fannie Mae, in contrast, has become over the years a place where former government officials and others with good political connections can go to make millions of dollars.

Raines's total compensation in 2002 was $17.7 million. That year, 19 other top Fannie Mae executives were paid more than $1 million, 12 more than $2 million and nine more than $3 million, according to materials released at a hearing this fall by Rep. Richard H. Baker (R-La.), chairman of the House subcommittee that oversees Fannie Mae. Baker is a leading critic of the District-based mortgage finance company.

...lots more...

[ozymandius]

24. Everyone's talking about Fannie and Freddie

http://www.creditwritedowns.com/2008/07/everyones-talking-about-fannie-and.html
....

The GSEs are highly levered organizations, which are suffering greatly in the subprime debt crisis. At the end of 2007, Fannie Mae had nearly $900 billion in assets on only $44 billion in capital. The fair value of its asset base is much lower at the self reported $12.2 billion above. That is a balance sheet 20 times capital -- or 80 times, depending on how you look at it. Any way you look at it, if it's assets suffer only a 5% loss in value Fannie Mae would be completely worthless.

Looking at Fannie Mae and Freddie Mac as a pair, the New York times says:

Some financial experts worry that the companies are dangerously close to the edge, especially if home prices go through another steep decline. Their combined cushion of $83 billion — the capital that their regulator requires them to hold — underpins a colossal $5 trillion in debt and other financial commitments.

-New York Times

Given the fact that subprime defaults are seeping into other classes and that Alt-A resets have not begun in earnest, there are many credit losses to come. How can a company this exposed to the mortgage meltdown, taking this level of losses, that is this levered, and that needs this much capital to shore up its capital base be a AAA rated company?

The only answer is the implicit government guarantee. Fannie Mae and Freddie Mac are too important and too big to fail. In fact, the US government may need to 're-nationalize' these organizations to conduct a clean up of the mortgage mess. This is implied by the New York Times article referenced above. Otherwise, there is no way on earth these companies should ever be rated AAA.

[UpInArms]

59. UBS widens '08 loss view for Freddie, slashes target

http://www.reuters.com/article/bondsNews/idUSBNG26360620080710

(Reuters) - UBS widened its 2008 loss estimate for Freddie Mac and slashed its price target on the stock to $10 from $28 citing continued credit deterioration and the challenges of raising capital.

The brokerage, which maintained its "neutral" rating on the stock, widened its 2008 loss view for the home finance company to $3.70 per share from 30 cents a share.

For 2009, it expects Freddie to earn $1.05 a share, down from its prior estimate of $1.95. Freddie Mac shares fell as much as 34 percent after former St. Louis Federal Reserve President William Poole was quoted in an interview with Bloomberg as saying that Freddie Mac and Fannie Mae are "insolvent" and may need a U.S. government bailout.

...more...

[UpInArms]

10. dollar watch

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

Last trade 72.775 Change +0.206 (+0.28%)

What is Slapping the US Dollar?

http://www.dailyfx.com/story/bio1/What_is_Slapping_the_US_1215641674153.html

In a week devoid of any significantly market moving data, there has only been one clear factor driving the US dollar – stocks. The dollar weakened across the board as stocks resumed their sell-off. Its earnings season and warnings by analysts are slapping both equities and the US dollar. Stocks are officially in a bear market, having fallen more than 20 percent since the October highs. With many companies still set to release earnings, the general fear in the markets is that business conditions were weak in the past 2 quarters and will continue to remain difficult in the second half of the year. Liquidation out of US stocks is triggering an overall liquidation out of the US dollars. Unfortunately the greenback will probably continue to track the Dow for the remainder of the week. Other than the trade balance and the University of Michigan Consumer Confidence report on Friday, there is no market moving data until next week. That will be when the action returns with retail sales, producer and consumer prices scheduled for release. In the meantime, also keep an eye on crude prices. By now, everyone should realize that oil prices are determining monetary policy. This is true for the US as well as other central banks around the world. Oil prices rebounded earlier today when Iran reportedly test fired 9 missiles in the Persian Gulf and according to the Associated Press, the missiles could reach Israel, Turkey, the Arabian peninsula, Afghanistan and Pakistan. These geopolitical tensions will probably ease as Iran’s test fires prove to be nothing than muscle-flexing. At that time, oil prices will continue to fall. Speculators are driving the move in oil prices and if the selling exacerbates, these traders will be quick to abandon their long positions. Yesterday’s drop in crude was the largest since 1991, but we could see another $10 drop in oil. As indicated in these oil charts, between 2005 and 2008 oil prices corrected often and on average, the corrections ranged between 10 and 15 percent. Therefore oil could drop another $10 and still leave the long-term uptrend intact.

...more...

Fallout From Last Week's Volatility Still Sees SSI Pointing To EURUSD Upside

http://www.dailyfx.com/story/topheadline/Fallout_From_Last_Week_s_Volatility_1215687102004.html

The extreme in speculative retail positioning seen last week was quickly dampened by fleeting liquidity and a steadfast range. Looking back to last Thursday, the EURUSD Speculative Sentiment Index showed the most extreme short bias in positioning since November of 2006 as traders built up positions before a heavy mix of event risk. Not only was the perennial, top market-moving non-farm payrolls release due, but an ECB rate decision was expected to end with quarter-point hike. However, despite the potential for severe volatility, 71% of the retail community was short with the belief that spot would be unable to overtake 1.60. That presumption would ultimately pay off.



...more...

[UpInArms]

13. Dollar rises before Bernanke testimony

http://news.yahoo.com/s/afp/20080710/bs_afp/forexeurope

LONDON (AFP) - The dollar climbed against leading currencies on Thursday amid investor caution after a Wall Street slump and ahead of congressional testimony by Federal Reserve chairman Ben Bernanke, dealers said.

The British pound meanwhile fell against the dollar before an interest rate decision from the Bank of England, which was expected to hold borrowing costs at 5.0 percent, and amid fresh data on the housing market downturn.

<snip>

"The dollar is moderately stronger (on Thursday) ... compared to yesterday's European close although trading against the majors has been within fairly narrow ranges," said ABN Amro analyst Melinda Smith.

"Equity market performance and oil prices still remain key drivers for the dollar, with a 2.0 percent fall on Wall Street yesterday leading to dollar selling late yesterday, before the pick-up during Asian trading," she added.

Caution grew as Federal Reserve chief Bernanke is scheduled to testify on financial market regulation in Congress later in the day.

"In recent days, Bernanke has reiterated (the Fed) will continue to wrestle with the financial crisis. (His remark) appears to be supporting the dollar," said Akio Shimizu, chief FX trading manager at Mitsubishi UFJ Trust and Banking.

...more...

[UpInArms]

14. Toyota to make Prius, not SUV, at new U.S. plant: report

http://www.reuters.com/article/businessNews/idUST7800920080710?feedType=RSS&feedName=businessNews?sp=true

TOKYO (Reuters) - Toyota Motor Corp will switch gears and produce the Prius hybrid instead of the less fuel-efficient Highlander sport utility vehicle at its planned Mississippi factory, the Nikkei business daily reported on Thursday.

The world's biggest automaker is also likely to suspend production at one of two assembly lines at its Indiana factory, where it builds the Tundra pickup and Sequoia SUV, by year-end for at least six months, the paper said. Citing company sources, it said the move was in response to falling demand for those models and would amount to a production cut of 50,000 vehicles a year.

During the stoppage, Toyota will modify the line to allow for more flexibility to build other models, the paper said in its evening edition.

The change in plans may mean the Mississippi factory, which will churn out the Prius as well as other cars, will not come onstream until 2011, the Nikkei said, at least a year behind original plans.

A Toyota spokesman said the company could not comment on the report. A source familiar with the matter said an announcement regarding North American manufacturing operations could come as early as Thursday in the United States.

Hit by an industry-wide slump in sales of large, gas-guzzling vehicles due to soaring fuel prices, Toyota's sales in the United States, its single-biggest market, have fallen 6 percent so far this year. Its sales of light trucks such as SUVs and pickups are down 12.5 percent, forcing it to run its Indiana and Texas light-truck factories at a reduced pace indefinitely.

In contrast, Toyota is struggling to keep up with runaway demand for the gasoline-electric Prius model, which saves fuel by capturing energy lost during braking to power an electric motor.

...more...

[spinbaby]

31. Hey, that's great!

I love my Prius, but I'd love it more if it were made in Indiana instead of Aichi Prefecture.

[Demeter]

91. Whereas In 35 Years, Detroit Hasn't Been Able to Do a Thing

about mileage or alternative energy. And simply because it didn't WANT to: Didn't want to make the cars people wanted to buy; didn't want to pay the workers enough to buy the product outright, but always running these special employee discounts, two-level wage scales, everything to make themselves non-competitive.

Thank you Harvard and Yale and such.

[UpInArms]

16. Sandelman Partners restructures master fund: report (won't let investors get their money)

http://www.reuters.com/article/businessNews/idUSBNG20896620080710?feedType=RSS&feedName=businessNews

(Reuters) - New York-based hedge fund Sandelman Partners, which manages about $4 billion of assets, told investors in its largest fund that they cannot have their money back soon, The Wall Street Journal said on Thursday.

Investors representing about 20 percent of the fund had asked to withdraw their money, the paper said.

Investors in the $3.2 billion fund, Sandelman Partners Multi-Strategy Fund Ltd, were told last week by the firm's board that 22 percent of the fund would be placed in a side account to be controlled by the firm, the paper said.

For the remaining 78 percent, investors will be given a choice of locking the money up for one year in a new Sandelman hedge fund, or having their money placed in a liquidation fund, where investments will be sold and the cash paid out over time.

The hedge fund's restructuring was reported in Absolute Return magazine, the Journal said.

Sandelman's big multi-strategy fund was down almost 5 percent this year through the end of June, while the firm's other fund was up 2.6 percent.

The smaller Sandelman fund is also being closed and merged into the new fund, to be called Sandelman Partners Opportunity, the paper said.

...more...

[UpInArms]

18. Economic outlook weaker with higher oil: panel

http://news.yahoo.com/s/nm/20080710/bs_nm/usa_economy_outlook_dc

WASHINGTON (Reuters) - Higher U.S. energy prices, a deteriorating labor market and falling stock prices have raised the likelihood the world's richest economy will enter into recession this year or has already done so, according to forecasts of a closely watched panel of economists released on Thursday.

These growing strains on the economy, already hit hard by the worst housing downturn in decades, have led to a weaker outlook in the latter part of this year and next, according to the Blue Chip Economic Indicators survey.

"With oil now at $144 per barrel, energy prices will continue to siphon off an ever-larger share of consumer income in the near term," wrote Blue Chip economist Andrew Tilton, from Goldman Sachs in New York, in recent research.

Among the respondents, 54.5 percent said the economy will enter into a recession or has already done so, up from 46.5 percent a month earlier.

But the economists raised their forecast for growth during the second quarter to 1.2 percent from a scant 0.4 percent on stronger-than-expected spending during the quarter. But the outlook thereafter has weakened.

...more...

[ozymandius]

26. 8am futures with cake and ponies

08:00 ET

S&P futures vs fair value: +8.4. Nasdaq futures vs fair value: +12.8.

Futures indicate a strong start to Thursday's session as several headlines fuel a sense of optimisim. Wal-Mart (WMT) has raised its second quarter outlook after reporting strong same-store sales results for June. Rohm and Haas (ROH) is being acquired by Dow Chemical (DOW).

[Pale Blue Dot]

27. Layoffs 7/10.

Thank you everyone for your kind comments yesterday. Please feel free to add another others that I've missed. I have to set a new google alert for "job cuts" because "layoff" and "layoffs" did not produce any news about Northwest. :eyes:

Northwest Airlines - Nationwide - 2,500 jobs

MINNEAPOLIS - Northwest Airlines Corp. said on Wednesday it will cut 2,500 jobs because of high oil prices, and will soon begin charging $15 to check luggage and up to $100 to redeem a frequent-flier award ticket.

The airline said it expects the new fees to add $250 million to $300 million a year in revenue.

Northwest said the job cuts — which represent about 8.3 percent of its work force — will include front-line and management workers. It said it will start with voluntary departures and leaving open jobs unfilled before moving to furloughs to reach the 2,500 total.

Northwest had said previously it would have fewer workers after it cuts 8.5 percent to 9.5 percent of mainline flying in the fourth quarter of this year. It has said overall capacity would shrink 3 percent to 4 percent because it is adding regional seats. As of the end of 2007, Northwest employed about 30,000 people.
http://news.yahoo.com/s/ap/20080709/ap_on_bi_ge/northwest_job_cuts?_ylt=As4uDYvVzYTmy7kv43cW5Upv24cA

Charlotte-Mecklenberg Schools - Charlotte, NC - 331 jobs

Charlotte-Mecklenburg Schools will eliminate 331 jobs, including 66 elementary school teachers and more than 100 people who work in school libraries, Superintendent Peter Gorman announced Wednesday.

The cuts won't necessarily mean layoffs. CMS has a work force topping 19,700 people, and Gorman said he hopes anyone whose job is eliminated can move into a new one.

The biggest wallop will be felt in schools, where 210 jobs are being cut using new CMS formulas assigning teachers, assistant principals, library staff, counselors, psychologists and social workers based on enrollment and poverty levels. Some students in low-poverty elementary schools will see bigger classes in August, and many schools will lose people who help run the media centers.

“These are cuts that will have a real impact on children,” Gorman said.
http://www.charlotte.com/local/story/706716.html

Government workers - Flint, MI - unknown number of jobs

FLINT, Michigan -- The administration wanted a quick decision on budget amendments, but the City Council on Wednesday criticized the compromise and voted to wait two weeks to discuss the details.

That's the latest in the budget mess that's also being battled in court. And, it means at least some layoffs will go into effect Thursday.

Budget director Michael A. Townsend said on Wednesday that some employees won't report to work on Thursday, but he didn't have details of how many or how city services would be immediately affected.

"Who knows? We're kind of in limbo right now," Townsend said, when asked what's going to happen next.
http://www.mlive.com/flintjournal/index.ssf/2008/07/no_budget_compromise_in_flint.html/

IBM - Raleigh/Durham and elsewhere - 150 jobs

IBM has laid off about 30 workers in Research Triangle Park, a company official confirmed Wednesday.

The job cuts were part of a round of 150 cuts IBM (NYSE: IBM) made across the country.

They represent a fraction of the technology company's local work force. IBM is the largest employer in Research Triangle Park, where it has about 11,000 workers. The company has about 120,000 workers in the U.S.

Spokesperson John Buscemi declined to provide details about the laid-off workers.

"IBM continually evaluates its skills and needs and balances them against the needs of our customers," he says. "And so a resource action" - IBM's corporate term for layoffs - "was part of that."
http://www.bizjournals.com/triangle/stories/2008/07/07/daily26.html

Stanley Furniture - Lexington, NC - 350 jobs

Lexington, NC -- Tuesday, Stanley Furniture announced it was laying off 350 people. Today, members of the Chamber of Commerce even said the news came as a surprise to them.

Lexington Chamber of Commerce President and CEO Radford Thomas says the area is capable of bouncing back, "Its just some trying times and where we have successes, we're also gonna have a few set backs and it's a matter of whether you choose to you know hang your head and say well, nothing's gonna come my way, or you choose to keep your head up and look for those things that are out there and try to sieze every opportunity you can sieze."

The company says the layoffs will happen over a period of two to three months.
http://www.digtriad.com/news/local/article.aspx?storyid=107004&catid=57

St Rita's medical Center - Lima, OH - 49 jobs

Rumors that have been floating in the community about layoffs at the city�s largest employer have come true. St. Rita�s Medical Center announced this morning that they will let go of 49 employees, from a variety of departments.

According to St. Rita�s President and CEO Jim Reber a tough economy had a part in forcing their hand. In addition to getting less money from Medicare and Medicaid, fewer people have insurance. Another contributing factor is that they have had less turnover, meaning they can't absorb the losses through moving people into other departments.
http://www.1150wima.com/cc-common/news/sections/newsarticle.html?feed=&article=3932139

Chrysler - Twinsburg, OH - 175 jobs

Twinsburg -- Chrysler announced last week that the Twinsburg Stamping Plant is starting to reduce its production by an unspecified amount this summer, which is causing an unspecified number of "temporary" layoffs from the city's largest employer.

Chrysler spokesperson Mary Beth Halprin said the company does not give out statistics on its plants' operations.

However, the president of the United Auto Worker's chapter for the Twinsburg factory has told local media that the "temporary" status could turn permanent in the fall.

UAW Local 122 President Doug Rice told a local daily newspaper he predicted about 175 jobs would be cut permanently at the 1,200-person Route 82 plant this fall due to work reductions at other car plants, to which the Twinsburg facility supplies parts.
http://www.twinsburgbulletin.com/news/article/4056271

Chicago Tribune - 80 jobs

The ax has fallen at Sam Zell’s hometown Chicago Tribune, although not as hard as it did at sister papers in Los Angeles, Baltimore and Hartford. The Trib will cut 80 of its 578 newsroom positions - that’s about 14% - but less than 60 people are actually expected to lose their jobs because some vacancies won’t be filled. The news hole will also shrink by up to 14%, which is in line with the cuts Tribune Co. is making elsewhere.

The story on chicagotribune.com also notes that Tribune Co. sold its stake in Shoplocal.com to Gannett for $22 million. That values the 141st most popular site on the Web at about $50 million. The expected sale of the Chicago Cubs and Wrigley Field should cover Tribune’s 2009 debt obligation, but after that, things get dicey.

Alan Mutter looks at the market for newspaper properties and finds it to be a wasteland. Playing off of News Corp.’s abandoned plans to sell its Ottaway line of small newspapers and other frustrations at Landmark Communications and Sun-Times Media Group, he concludes that there simply aren’t any buyers at the moment. With so many publishers teetering on the brink of bankruptcy, there’s a possibility that scores of newspapers could hit the market within the next year selling for pennies on the dollar. It’ll be a buying opportunity for somebody, but the most likely buyers are frozen right now, either because they have debt issues of their own or they don’t know where the bottom is.
http://www.newspaperdeathwatch.com/2008/07/09/layoffs-hit-home-at-tribune-co/

[Pale Blue Dot]

29. Just in: Harley Davidson - York, PA and elsewhere - 730 jobs

YORK, Pa. - Harley-Davidson Inc. is laying off workers at its plant in York County.

Harley spokesman Bob Klein says the plant has begun layoffs as part of a plan to cut about 730 workers companywide.

Nearly 300 workers are scheduled to be cut from the plant in Springettsbury Township. The layoffs will continue in stages throughout the summer.

Business representative Tom Boger of the International Association of Machinists and Aerospace Workers Local 175 says the union will check to make sure workers are laid off according to seniority.

The Manufacturers' Association of South Central Pennsylvania plans a worker-placement effort for the laid-off Harley employees.

http://www.chicagotribune.com/news/chi-ap-pa-harley-davidsonla,0,4207186.story

[Dr.Phool]

37. 5 years ago, a new Harley was harder to come by than a new Prius now.

People were placing an order and waiting over a year for a new one. I got an ad in the mail the other day from the dealer nearest me. They've got a big sale going on this week-end, including repos.

The first inkling I got that the economy was turning south, was 2 years ago when I decided to sell mine and buy a new one. I ran ads in the paper for 2 months, and never got a bite. Not even a nibble. I'm still riding it.

[UpInArms]

78. Whirlpool plant closure hit the wires today

02. Whirlpool to shift 500 jobs to Cleveland, 140 to Celeya, Mex
2:33 PM ET, Jul 10, 2008

03. Whirlpool to close Oxford, Miss.; Puebla, Mexico plants
2:31 PM ET, Jul 10, 2008

[Dr.Phool]

86. That will partly make up for GE shutting down Nela Park in Cleveland.

GE getting out of the light bulb business.

Now there's a bright idea!

[AnneD]

95. The sad thing about cuts in the public schools is that ....

they start seeing a School Nurse as a luxury at a time when the only medical person these kids have access to IS a School Nurse. Kids with chronic health conditions that require constant intervention like diabetes, asthma, or trache care are being short changed and put at risk. And then when a child dies from lack of care-the money that schools have to pay in settlement makes a Nurses salary seem fairly cheap in comparison.

[UpInArms]

32. Chopper Ben aka "The Fed" doesn't want you to get a raise, Crandall says

http://www.marketwatch.com/news/story/fed-doesnt-want-you-get/story.aspx?guid=%7BE16371FF%2DFC85%2D4EE3%2D8179%2D0DEB909CEDE2%7D

WASHINGTON (MarketWatch) -- The Federal Reserve has signaled that it's now watching wages more than core prices as it battles to keep inflation under control, says Lou Crandall, chief economist for Wrightson ICAP, and the co-winner of the June Forecaster of the Month award from MarketWatch.

Working alongside economist Bill Jordan of Ried Thunberg ICAP, Crandall had the most accurate forecasts on 10 vital monthly economic indicators released in June. On four of the numbers, Crandall and Jordan's forecast was the most accurate among 45 economists surveyed by MarketWatch.

In an interview, Crandall said the medium-term outlook for the economy is more uncertain than usual. The rise in oil prices "has really changed the outlook," he said. The expected pickup in the second half is now very much in doubt.

The stimulus payments should give growth a temporary jolt before it settles back down to a 1% annualized rate in the second half of this year and into 2009.

With credit quality falling, it's hard to predict the bottom in the financial cycle, he said.

Crandall said he believes the Fed will keep interest rates steady for while because it'll "feel comfortable" about its forecast that inflation will moderate this year and into next year. The increasing amount of slack in the economy should bring down inflation rates, as long as wage gains don't accelerate, he said.

A recent speech by San Francisco Fed President Janet Yellen laid out the Fed's view that higher commodity prices are bad enough in themselves. But even worse would be the development of a wage-price spiral, in which workers are able to demand higher wages to offset higher prices, but only by forcing their employer to raise prices in turn for their customers. Such an inflation spiral would be devastating, Yellen said.

...more...

[Nickster]

39. My company already took care of that, my raise has been put on "hold". Good thing inflation isn't

effecting me or anything.

[Pale Blue Dot]

33. Retailers post mixed June sales results

Retailers' sales show consumers using rebates to buy necessities and heavily discounted items

NEW YORK (AP) -- Rebate checks and fat discounts gave a boost to June retail sales. Monthly sales figures being reported by U.S. retailers on Thursday show that shoppers are buying mostly necessities at discounters and still shying away from mall-based apparel stores, as high gas and food prices and a slumping housing market crimp their budgets.

Wal-Mart Stores Inc. and Costco Wholesale Corp. reported better-than-expected sales results, while mall-based apparel sellers like Limited Brands Inc. and Wet Seal Inc. said their same-store sales, or sales at stores opened at least a year, remain sluggish.

http://biz.yahoo.com/ap/080710/retail_sales.html

[antigop]

40. Why pension funds beat mutual funds

http://money.cnn.com/2008/07/08/pf/funds/intelligent_investor.moneymag/index.htm?postversion=2008070910

Experts have long struggled to explain why pension funds - the big pools of money run for traditional corporate and government retirement plans - tend to outperform mutual funds even when they're run by the same people investing in the same stocks.

The simple explanation: Mutual funds charge more because they cost more to run. A pension fund doesn't have to advertise how great it is, maintain a 24-hour toll-free phone bank or mail out tens of thousands of prospectuses.

Mutual funds do, and that gives them higher expenses than pension funds - depending on how you count, between 0.03 and 0.3 percentage points a year, or up to an extra $3 on every $1,000 you invest.
...
A new study led by Rik Frehen, a Dutch finance scholar, looks at the stock-investing records of pension and mutual funds in the U.S. - and the findings are fascinating and alarming.

Comparing the returns of 700 pension funds against those of 4,000 mutual funds between 1992 and 2004, Frehen found that both categories had underperformed the broader market but that pension funds had killed mutual funds.

antigop (a firm believer in defined benefit pension plans, NOT the 401(k) crap)

<Edit to add> I'm a firm believer in the "old style" defined benefit pension plans -- NOT the cash balance nonsense. Technically, cash balance pension plans are defined benefit pension plans.

[Dr.Phool]

41. I love defined benefit plans. As long as they make the companies fund them.

You don't even want the PBGC getting involved.

[antigop]

42. I agree, Dr. There are too many games that are allowed in pension accounting.

And the so-called Pension "Protection" Act was a pos, imo.

[antigop]

43. You also need to add COLAs to offset inflation if you are collecting a monthly pension annuity. n/t

[UpInArms]

45. Chopper Ben in Full Whine Mode

03. Bernanke: Treasury should lead in closing brokerages
9:59 AM ET, Jul 10, 2008

04. Bernanke asks for new law to help close troubled brokerages
9:59 AM ET, Jul 10, 2008

05. Bernanke: Market crisis 'ongoing,'makes no prediction on end
9:59 AM ET, Jul 10, 2008

06. Bernanke: Investment firms need stronger federal oversight
9:59 AM ET, Jul 10, 2008

07. Bernanke asks Congress for new powers over payment system
9:59 AM ET, Jul 10, 2008

[UpInArms]

64. Chopper Ben gets a case of the shakes

01. Bernanke: Financial markets remain 'quite strained'
11:51 AM ET, Jul 10, 2008

02. Bernanke opposes stopping lending to investment firms now
11:50 AM ET, Jul 10, 2008

[UpInArms]

65. Chopper Ben now into Out and Out Lying

01. Bernanke: Financial markets remain 'quite strained'
11:51 AM ET, Jul 10, 2008

02. Bernanke opposes stopping lending to investment firms now
11:50 AM ET, Jul 10, 2008

A trillion in loans and 40 billion in capital???? (see Ozy's earlier Fannie Mae post #24 for details)

Fannie Mae had nearly $900 billion in assets on only $44 billion in capital.

eta to add info

[Demeter]

92. You Have a Secret Crush on Ben, UIA?

OR a secret bug?

[ozymandius]

99. His was a masterful performance as "The Gimp" in Pulp Fiction.

What's not to love about that shiny suit?

[UpInArms]

100. only if I can crush him like a bug, Demeter

:D

[Demeter]

102. You Have MY Permission

for what it's worth.

[UpInArms]

46. Hanky-Panky Paulson gets out there and Lies

01. Paulson: Rules governing financial markets are 'outdated'
10:00 AM ET, Jul 10, 2008

02. Paulson: Fannie and Freddie are adequately capitalized
10:00 AM ET, Jul 10, 2008

[UpInArms]

63. Paulson dons clownsuit

03. Paulson again urges China to move to market-based currency
11:39 AM ET, Jul 10, 2008

04. Paulson says U.S. wants a strong dollar
11:37 AM ET, Jul 10, 2008

05. Paulson again calls for merger of SEC and CFTC
11:12 AM ET, Jul 10, 2008

[UpInArms]

72. Paulson does the hanky-panky - denies dollar/oil correlation

01. Paulson: Dollar weakness not major factor in oil price spike
12:53 PM ET, Jul 10, 2008

02. Paulson: Oil price spike is related mainly to supply/demand
12:53 PM ET, Jul 10, 2008

[Robbien]

76. After catching a bit of the dog and pony show

so called the financial congressional hearing, it is surprising that these complete inane dolts kept the ponzi scheme in the air as long as they did.

And how sickening is it watching each congresscritter fawn all over Paulson and Bernanke. Really, these are the guys in charge?

[antigop]

47. Wallison (AEI) commentary in Financial Times: The Fed and Investment Banks

http://www.ft.com/cms/s/0/e55e15f0-4db1-11dd-820e-000077b07658.html

Since the Bear Stearns bailout, most commentators in the US have assumed that the Federal Reserve’s action would eventually result in Fed regulation of investment banks – a superFed, as some have called it. But it was always assumed that this would occur through legislative action, as Congress considered whether to place the resources of the US government behind the investment banking industry, as those resources have been placed behind commercial banks.

However, on Monday, with the support of the Treasury, the Securities and Exchange Commission and the Fed signed a memorandum of understanding that, in effect, puts the key elements of a Fed regulatory structure – and implicit Fed backing for the large investment banks – into place. What this amounts to is a straightforward Fed reach for important new regulatory authority, an unprecedented step in which a weak SEC – chastened after the failure of Bear Stearns – has been complicit. It would be perfectly acceptable if the agreement covered only the emergency period the markets are now experiencing, but it has no time limit.

The agreement is very bad news for US taxpayers. Fed involvement with the regulation of investment banks will introduce moral hazard into the securities business for the first time and pave the way for a vast new US government liability. The agreement between the Fed and the SEC will seriously compromise market discipline, which only exists when creditors and other counterparties believe that they are financially at risk. What now amounts to ongoing supervision of the financial condition of investment banks by the Fed sends an unmistakable signal to the markets that the government believes itself to be at risk. Under these circumstances, investors will be justified in believing that the US government will ultimately stand behind the large investment banks. This will irretrievably compromise market discipline, which in turn will produce the very risk-taking and subsequent losses that regulation – as recently as the savings and loan debacle – has never been able to prevent.

[Joanne98]

48. Freddie down 30% Fannie down 20%

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

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

[UpInArms]

49. putting some numbers to that

FRE 7.14 -30.4094%

FNM 12.19 -20.3788%

[Joanne98]

51. Thanx

[Joanne98]

50. Lehman down 14%

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

[UpInArms]

58. Lehman Brothers debt protection costs jump as stock price plunges

http://www.reuters.com/article/bondsNews/idUSN1026740420080710

NEW YORK, July 10 (Reuters) - The cost to insure Lehman Brothers's (LEH.N: Quote, Profile, Research, Stock Buzz) debt with credit default swaps jumped on Thursday as its stock price plunged.

Lehman's credit default swap spreads widened 35 basis points to 320 basis points, or $320,000 per year for five years to insure $10 million in debt, according to Phoenix Partners Group. Its stock dropped more than 12 percent to its lowest level in eight years.

[Joanne98]

52. Wachovia down 7%

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

[Pale Blue Dot]

54. Now at 9% - yet the market as a whole is up.

What's going on?

[Dr.Phool]

55. A "no confidence" vote on the new CEO?

He's done such a great job at Treasury.

[Joanne98]

53. S&P Ultra short up 19% YTD

This is where the smart money went.. lol
http://finance.yahoo.com/q?s=SDS

[Joanne98]

57. The Freddie message board...........

If your interested...
http://messages.finance.yahoo.com/mb/FRE

[Joanne98]

60. UPDATE 1-McCain says U.S. cannot let Fannie, Freddie fail

LIVONIA, Mich., July 10 (Reuters) - Republican presidential candidate Sen. John McCain said on Thursday that the United States could not allow government-sponsored mortgage finance giants Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) to fail.

They are vital to Americans' ability to own their own homes, and we will do what's necessary to make sure that they continue that function," McCain told reporters at a diner in Livonia, Michigan.

McCain, when asked whether government intervention would constitute a "moral hazard", said the two institutions must increase their transparency.

"I think that Freddie and Fannie have a vital role to fulfill and that they cannot and will not fail," the Arizona senator said. "There has to be much greater transparency in the way that they do business in order to ensure that this kind of difficulties that they're in is not repeated." (Reporting by Jeff Mason and Karey Wutkowski; Editing by Tom Hals)

http://www.reuters.com/article/marketsNews/idINN1027286620080710?rpc=44

[Tansy_Gold]

88. "We will do what's necessary. . . . . . ."

". . . . .As long as it doesn't involve raising taxes on wealthy people or corporations, regulating the rampant speculation in hedge funds and other exotic investment structures, addressing peak oil and energy dependence, actually helping real people live in real homes, or any of that other terrorist pinko commie crap that I used to be in favor of when I was against George W. Bush before I was for him and trying to be just like him like the war hero he was before I was one. Or something like that that I also know nothing about just like the economy, it's stupid."

[Demeter]

93. When It Reaches McCain's Attention

the damage is probably irreparable.

[Joanne98]

61. White House focusing on legislation for Fannie and Freddie

WASHINGTON (Reuters) - The White House remains focused on passing legislation on Fannie Mae and Freddie Mac that will give confidence to the financial markets, a White House spokesman said on Thursday, amid ongoing concerns about the mortgage finance heavyweights' capital levels.

"What we're focused on is getting legislation done for these important institutions, which will give confidence to markets so they can better perform their role," White House spokesman Tony Fratto said when asked whether the administration had discussed what to do if the two government-sponsored enterprises and major sources of mortgage financing falter.

"That's the single most important thing we need to accomplish. We're pleased they've been raising capital so they can continue to serve their role," he added.

http://www.reuters.com/article/marketsNews/idUSN1027248920080710

[Joanne98]

62. Freddie starting to recover.. down 17% look at the volume

Volume: 85,222,793
Avg Vol (3m): 13,667,400
Market Cap: 5.19B

capitulation?

[UpInArms]

69. UPDATE 1-Freddie "absolutely" has enough capital-spokeswoman

http://www.reuters.com/article/bondsNews/idUSN1026548420080710?sp=true

NEW YORK, July 10 (Reuters) - Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) "absolutely" has enough capital, a spokeswoman for the second-largest source of U.S. home funding said on Thursday as the company's stock plunged over concerns about its capitalization.

The company is also committed to raising additional capital at the appropriate time, although the timing, mix of securities and amount depend on factors including market conditions, spokeswoman Sharon McHale said in a telephone interview from Freddie Mac's McLean, Virginia, headquarters.

Freddie Mac had said this spring that it would raise $5.5 billion in new capital through the sale of preferred and common shares.

On Thursday, Freddie Mac shares tumbled nearly 22 percent on the New York Stock Exchange to $8.06.

<snip>

The company has been in discussions with the Federal Accounting Standards Board (FASB) about the proposed accounting change, which Freddie Mac does not see as being in the best interest of the housing market, McHale added.

The spokeswoman also said that Freddie Mac is not aware of government discussions reported in The Wall Street Journal about what the government would do if the companies fail.

...more comical ali at link...

[UpInArms]

66. 12:07 EST Ponies for Everybody!

Dow 11,213.31 65.87 (0.59%)
Nasdaq 2,261.20 26.31 (1.18%)
S&P 500 1,252.54 7.86 (0.63%)
10-Yr Bond 3.805% 0.029

NYSE Volume 1,995,215,625
Nasdaq Volume 929,368,062.5

11:35 am : Stocks have moved higher into positive ground after oscillating along the neutral line. Seven of the ten economic sectors are now trading higher.

Financials have pulled out of the red and are now up 0.1%.

Shares of Lehman Brothers (LEH 17.80, -1.94) have been trading lower amid negative rumors. One rumor alleged that Pacific Investment Management Company, otherwise Pimco, is reducing its relationship with the company. Reuters reported, however, that a Pimco spokesperson said the company continues to trade with Lehman.DJ30 +35 NASDAQ +15 SP500 +4 NASDAQ Adv/Vol/Dec 1479/722 mln/1129 NYSE Adv/Vol/Dec 1362/494 mln/1617

11:00 am : Stocks are trading near the unchanged mark, fighting to make sustainable gains. Trading has been choppy throughout the entire morning as market participants seek leadership.

Trying to retool its search service, Yahoo! (YHOO 23.76, -0.06) will let outsiders build customized search services on top of its technology, according to Reuters. Additionally, the company has also entered a multiyear strategic alliance with Turner Broadcasting to collaborate on advertising and sports-related content.DJ30 -6.02 NASDAQ +11.97 SP500 -0.24 NASDAQ Adv/Vol/Dec 1510/558 mln/1035 NYSE Adv/Vol/Dec 1274/355 mln/1637

[skoalyman]

67. oils on the rise big surprise

137.32 11:10am ET Up 1.27 (0.93%)

[Joanne98]

68. Lehman Brothers shares hit new low

Lehman Brothers shares hit new low as Bernanke, Paulson indicate no bank is too big to fail


NEW YORK (AP) -- Lehman Brothers Holdings Inc. shares plunged as much as 19 percent Thursday morning as continued credit fears shook Wall Street, and government officials again reiterated that no bank is too big to fail.

Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson both testified before the House Financial Services Committee that the government's overhaul of regulators will help increase oversight.

However, they both said that doesn't mean financial institutions are too big to fail.

http://biz.yahoo.com/ap/080710/lehman_brothers_mover.html

[Joanne98]

70. US housing bill clears Senate procedural hurdle

WASHINGTON, July 10 (Reuters) - A bill to save hundreds of thousands of homeowners from foreclosure cleared a procedural hurdle in the U.S. Senate on Thursday and moved a step closer to being sent to the House of Representatives for needed agreement.

On a vote of 84-12, more than the required 60, the Senate agreed to proceed with the legislation, and could send it later in the day to the House, where it faced a number of potential amendments.

The legislation was conceived to help ease a wave of failing loans that have swept across the nation and sent financial markets into a tailspin.

President George W. Bush has threatened to veto the legislation, which he has called too costly and beneficial to banks. But lawmakers from both parties will likely pressure him to endorse the bill during an election year when the housing crisis is weighing on voters' minds.

The bill had been delayed for weeks by Sen. John Ensign, a Nevada Republican who unsuccessfully sought to attach a package of renewable energy tax breaks to it. Senate leaders have largely been able to outlast those stalling tactics and drive the legislation forward.

The House and Senate have approved similar versions of the housing measure but must now iron out differences and pass a final one that Bush may sign.

At the heart of the election-year legislation is a plan to create a government-backed mortgage insurance fund and a new regulator for mortgage-finance companies Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz).

Shares of the two companies have tanked this week as investors fret over the whether the two government-sponsored enterprises have the reserves needed to survive sinking home values and soaring defaults. (Reporting by Thomas Ferraro and Patrick Rucker; Editing by Jonathan Oatis)

http://www.reuters.com/article/marketsNews/idINN1034711420080710?rpc=44

[Joanne98]

71. Moody's places Wachovia's ratings on review

Thursday July 10, 12:34 pm ET
Moody's to review Wachovia ratings for possible downgrade after bank announces 2Q loss


NEW YORK (AP) -- Credit ratings agency Moody's Investors Service said Thursday it placed Wachovia Corp.'s long-term debt ratings, and the financial strength and deposit ratings at its banking unit, on review for a possible downgrade.

http://biz.yahoo.com/ap/080710/wachovia_ratings.html?.v=1

[UpInArms]

73. Paulson: Derivatives make markets more efficient (at robbing average citizens blind)

http://www.reuters.com/article/bondsNews/idUSN1037771320080710

WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson on Thursday told lawmakers that off-exchange derivatives, used by firms to hedge against a range of risks including credit and interest rates, have been a good tool.

"These contracts have done a lot to make the markets more efficient," Paulson told the U.S. House Financial Services Committee in answering questions after testifying on the need for widespread reforms in regulating financial markets.

But both Paulson and Federal Reserve Chairman Ben Bernanke cautioned that improvements are needed in the operations of these markets, particularly in processing and clearing.

The Federal Reserve is closely involved in the process to improve the post-trade, clearing and settlement process, the management of risks associated with this, and the transparency and standardization of these complex products, Bernanke said, adding: "This is a very high priority for us."

Their comments come as major dealers in the $62 trillion credit default swaps markets are working with the Federal Reserve Bank of New York to develop a central clearinghouse for these customized trades.

...a bit more...

[UpInArms]

74. $62 trillion credit default swaps markets!!!!!!

$62 trillion credit default swaps markets

:wow:

:faint:

[DemReadingDU]

77. The whole world is bankrupt

This is criminal, these perpetrators should be in prison for the rest of their lives.


Edit: Maybe all those $62 trillion credit default swaps markets aren't toxic? I think I read that some really are perfectly good business practice. But still, :wow:

[TalkingDog]

81. Jubilee anybody?

Of course that would be a form of socialism....*smirk*

And it would lead to large companies rampaging around creating all kinds of economic havoc....*stops*....*blinks*...Hey, now....wait a minute.

Potlatch anybody?

That's it... I could really go for a potlatch right about now.....

[kineneb]

84. Yup, thinking it is time for the Jubilee year

debt forgiveness all the way around

a potlatch wouldn't be bad either

[Demeter]

94. I Prefer the French Method

Do you want fries with that guillotine?

[Tansy_Gold]

98. I have plenty of knitting needles and yarn, too.

:rofl:

[kineneb]

101. me, too. heh.

:evilgrin:

[skoalyman]

97. dang I wish I'm 10 grand in the hole

I'll be in debt until the day I die or make me work it off if debtors prisons come back in vogue :scared:

[antigop]

75. GE to sell consumer and industrial businesses

http://money.cnn.com/2008/07/10/news/companies/GE_spinoff.ap/index.htm?postversion=2008071011

General Electric Co. said Thursday it is focusing on spinning off its entire consumer and industrial businesses, which include its iconic appliances and lighting products.

The announcement by the Fairfield, Conn.-based conglomerate is the latest aggressive and symbolically significant move to shed slower growth businesses by one of the world's largest companies.

The unit has 50,000 of GE's 300,000 employees, sales of $13.3 billion and a profit of slightly more than $1 billion last year. GE Lighting invented the world's first incandescent light bulb in 1879.

GE announced in May that it planned to sell or spin off its appliance business, but now says it is looking to spin off the entire unit, which includes household appliances such as dishwashers and clothes dryers as well as lighting, motors and electrical distribution.

[Tansy_Gold]

96. WAIT A FREAKIN' MINUTE!!!!!!!!!!!!

First of all, "GE Lighting" did not invent anything. A HUMAN BEING invented the incandescent light bulb. I'm not even gonna argue if it was Thomas Alva Edison or someone else, but it was still A HUMAN BEING. Corporations are not human. They don't invent ANYTHING.

:grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr:

Second of all, if GE unloads its "consumer" and "industrial" operations, what the fuck is left? (hint: I'll bet it starts with "f" and ends with "l" and means "having to do with money, especially the transfer of money or money-like imaginary things")

:grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr:

Well, at least it will still have NBC, MSNBC, CNBC, and (drum roll please) THE WEATHER CHANNEL!!!!!


Oh, did I mention

:grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr:


Tansy :grr: Gold

[ozymandius]

80. Oh look. The devil's spit in the kettle.

3:00
Dow 11,122.04 Down 25.40 (0.23%)
Nasdaq 2,228.13 Down 6.76 (0.30%)
S&P 500 1,240.30 Down 4.38 (0.35%)
10-Yr Bond 3.825% Down 0.009
NYSE Volume 3,524,704,250
Nasdaq Volume 1,701,705,250

2:35 pm : The stock market goes on a mostly broad-based decline as crude prices surge to a gain of 3.7% at $141.50 per barrel. The stock market is now trading with only a slight gain, with oil sensitive consumer discretionary (-1.9%) and retailer (-2.7%) stocks seeing the most selling interest.

Despite the market's recent retreat, aluminum company Alcoa (AA 34.27, +2.73) is sporting a hefty 8.7% gain. The company is benefiting from bargain hunting interest after its stock fell in yesterday's trade even though the company reported solid earnings.DJ30 +13.92 NASDAQ +6.32 SP500 +1.30 NASDAQ Adv/Vol/Dec 1395/1.51 bln/1370 NYSE Adv/Vol/Dec 1387/968 mln/1745

2:00 pm : The stock market took out a fresh session high before curtailing some of its gains. Stocks had been down 0.6% in the early going.

Gains remain broad-based, but it was been the financial sector (+0.2%) that led the recent upswing. Financials were trading sharply lower in early action, down more than 2.3%, but are now trading with a decent sized gain.

Leading the way for financials are large money centers Bank of America (BAC 22.59, +0.53) and JPMorgan Chase (JPM 34.77, +0.49). DJ30 +87.04 NASDAQ +25.40 SP500 +9.93 NASDAQ Adv/Vol/Dec 1712/1.35 bln/1060 NYSE Adv/Vol/Dec 1786/879 mln/1323

[radfringe]

82. and it's up again... lemmings are running around in circles n/t

[skoalyman]

83. Oils even higher 141.65 + 5.60 4.12%

big surprise:eyes:

[ozymandius]

85. The PPT tips its hand at the close.

Shotting up at the end in an even, orderly advance.

Dow 11,229.02 Up 81.58 (0.73%)
Nasdaq 2,257.85 Up 22.96 (1.03%)
S&P 500 1,253.39 Up 8.71 (0.70%)
10-Yr Bond 3.811% Down 0.023
NYSE Volume 5,827,221,000
Nasdaq Volume 2,265,582,500

Volatile Action Ends With Gain

The stock market chopped along without any clear direction Thursday, but in in the end it finished respectably higher.

Caution restricted much of the session’s movement. In turn, an upbeat announcement from a major retailer, news of a rich takeover bid, and encouraging economic data received relatively little attention.

Dow component Wal-Mart (WMT 57.21, -0.46) announced prior to the session’s opening bell that June same-store sales climbed 5.8%, which is a considerable feat for a retailer of its size. In turn, Wal-Mart boosted its second quarter earnings outlook to the range $0.82 to $0.84 per share. Analysts pegged second quarter estimates at $0.82 per share.

Wal-Mart’s growth is largely attributable to bargain-hunting consumers, who also helped drive strong results at BJ’s Wholesale (BJ 40.03, -0.40) and Costco (COST 70.86, -1.29). Their June same-store sales were up 16.5% and 9.0%, respectively.

Dow Chemical (DOW 32.52, -1.44) announced it is acquiring Rohm and Haas (ROH 73.62, +28.79) for $78.00 per share, which represents a 74% premium to the previous session's closing price. Shares of ROH surged to reflect the bid, helping lift the materials sector 2.7%; the sector was the session’s best performer.

The latest initial jobless claims data indicated that weekly claims are fairly stable, based on their two-week average, which stands at 375,000. The average is in line with levels seen in March. Specific to the week ending July 5, initial claims fell 58,000 to 346,000, which is below economists’ consensus estimate.

Stocks were able to close higher without the help of financials (-0.9%). Persistent concern related to the liquidity of Fannie Mae (FNM 13.20, -2.11) and Freddie Mac (FRE 8.00, -2.26) surrounds the two lenders, even after a spokesperson from Freddie Mac stated the firm has enough capital, according to Reuters. Thrifts and mortgage players, as an industry, finished 10.5% lower.

Investment banks also encountered trouble during the session; the industry group finished 1.5% lower. Overall, the financial sector closed 0.9% lower.

A late-session rise in crude prices could not derail stocks in the final leg of trading either. Crude finished nearly $5 higher to close its session just shy of $141 per barrel.