STOCK MARKET WATCH, Thursday July 17

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday July 17, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 188
DAYS SINCE DEMOCRACY DIED (12/12/00) 2734 DAYS
WHERE'S OSAMA BIN-LADEN? 2459 DAYS
DAYS SINCE ENRON COLLAPSE = 2750
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 16, 2008

Dow... 11,239.28 +276.74 (+2.52%)
Nasdaq... 2,284.85 +69.14 (+3.12%)
S&P 500... 1,245.36 +30.45 (+2.51%)
Gold future... 962.70 -16.00 (-1.66%)
30-Year Bond 4.58% +0.11 (+2.41%)
10-Yr Bond... 3.93% +0.09 (+2.34%)




http://futures.tradingcharts.com/chart/CO/88

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: Revisiting Ground Zero & the Spreading Tentacles of a Recession

BY CHRIS PUPLAVA

There is a choice to be made: Either we regulate the Banks, or leave it to the vagaries of the free markets to punish those who trade with, or place their assets in the wrong institutions. But for God's sake, do not give us the worst of both worlds -- do not allow banks the freedom to make horrific but preventable mistakes (i.e., only lending money to those who can pay it back), but then expect the taxpayers to foot the trillion dollar bill.

That's not capitalism, its not socialism, its not regulation, and its sure as hell isn't what free markets are. Our language is insufficient to describe this hodge-podge system, other than to call it a random patchwork of quasi-capitalism, quadrennial-socialism, and politics as usual. Ideological idiocy is the only phrase I can muster that has any resonance with the daily insanity…

Books will be written about this period of time, and our descendants will wonder in awe as to how this was allowed to happen. Tulips got nothing on us! It’s not just the total dollar value of the losses that have exceeded all other global fits of financial madness combined, but rather, how so many warning signs were so blithely ignored by so many and for so long. What was wrong with these people, the authors and historians will wonder. Did the antibiotics in the food supply drive them mad? Did the High Fructose Corn Syrup compromise their ability to think? Some form of viral plague? Road rage? What else could have created such a mass delusion amongst not just the populace, but their leadership and institutions?

Barry Ritholtz
Idiots Fiddle While Rome Burns, 07/16/2008

The situation described above came to a head with the topping of the greatest housing bubble ever in 2005 followed by a climatic top in the credit markets in the summer of 2007. As Mr. Ritholtz points out, what is truly amazing is how so many warning signs were so blithely ignored by so many for so long. Now millions are paying for a failure to grasp the second bubble to burst this decade as the housing downturn has wiped out trillions in wealth, not to mention a bear market in stocks to boot.

Financial institutional losses are mounting as mortgage portfolios are written down as home prices continue to decline and foreclosures continue to rise. Highlights from a Bloomberg article shown below illustrate the dire housing situation.

Foreclosures Rose 53% in June, Bank Seizures Tripled

U.S. foreclosure filings increased 53 percent in June from a year earlier and bank seizures rose the most on record as deteriorating property values and higher rates on adjustable mortgages forced more people to give up their homes…

Bank seizures rose 171 percent, the most since the Irvine, California-based company began tracking statistics on default notices, warnings of a scheduled auction and repossessions in January 2005.

....

Foreclosure activity is the highest since the Great Depression of the 1930s, said Rick Sharga, RealtyTrac's vice president of marketing…

....

Fool me once, shame on you. Fool me twice, shame on me!

If indeed we have made an interim bottom as evidenced by the recent spikes in CDS spreads and today’s strong rally, expect the “ALL CLEAR” and “THE WORST IS BEHIND US” nonsense just like we witnessed after the March lows. Examples on how completely wrong the financial media and pundits can be are shown below.

(Ozy here... the usual suspects listed here: Greenspan, Bernanke, Kudlow, Luskin. It's a good, damning read.)

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

[Dr.Phool]

11. In the mean-time, here comes the final nail in the Florida real estate coffin.

State Farm seeks hefty rate hike for '09

By Tom Zucco and Jennifer Liberto, Times Staff Writers
In print: Thursday, July 17, 2008


Smack in the middle of Florida's efforts to rein in the cost of property insurance, State Farm asked the state Wednesday to raise its homeowner rates an average of 47.1 percent statewide and as much as 91 percent in parts of Pinellas County. If approved, the new rates would take effect starting March 1, 2009.

The request comes after two quiet hurricane seasons. After State Farm already announced it was dropping 50,000 coastal policyholders. After the company decided to stop writing new homeowners policies in Florida. And after it got a new law this spring that gives it a competitive edge in the auto market, offering new discounts to its auto customers for being policyholders of Citizens Property Insurance, the state-run property insurer.

Bloomington, Ill.-based State Farm has a significant presence in the Tampa Bay area with about 100,000 policyholders, or nearly one out of every six homeowners. Because rates vary greatly depending in large part on location, the proposed rate hike would hit Pinellas the hardest in the Tampa Bay area with increases from 55 to 91 percent. It could also mean increases of as little as 10 percent in parts of Pasco County, yet up to 79.4 percent in Manatee County.

State Farm Florida is the state's largest private insurer with about 950,000 homeowner policies. The battle to get the rate approved has already begun, with state regulators scheduling a public hearing Aug. 12 in Tallahassee.

http://www.tampabay.com/news/business/banking/article703117.ece


_____________________________________________________________________________________________________________________

For several years, insurance has been killing real estate deals left and right, and a lot of people are at the breaking point. What are the banks going to do when people either can't or refuse to buy insurance for their home. Standard industry practice is to go out, buy very expensive insurance and charge the mortgage holder. What happens, when the mortgage holder, who used to have a lot of equity in their home, is now near upside down, and just says "Fuck you", and walks away?

Get ready for another round of foreclosures. And these ones didn't have to happen. I might be one of them. I can walk out my front door, swim across the Anclote River (about 50 yards) and be in Pinellas County. I'm already paying $3,000 per year to State Farm on $176,000 replacement. In Cleveland I paid less than $500. Something has got to give.

[DemReadingDU]

13. wow, that's horrible

I wonder if State Farm is going to raise the rates for those of us around the country.

[Dr.Phool]

22. I doubt it. Our legislature has phobia about any kind od regulation.

From the same article:

Rep. Dennis Ross, R-Lakeland, said he thinks the culprit is lack of competition caused by capping the state-run insurer's rates.

"It doesn't surprise me," said Ross, an outgoing lawmaker who helped negotiate recent changes to insurance laws on behalf of the more conservative Florida House. "This will be used as a political football, as opposed to being used as a symptom of what the problem is: We don't have competition. Competition would drive down and stabilize rates."

By law, state-run Citizens Insurance had to have the highest rates in the state. Which meant that when anyone else raised rates, Citizens had to raise theirs. So, this puke says to remove the cap, let them extort us some more, and everything will be hunky-dory.

This might solve a crime though. The DC Madam lived in Pinellas, within walking distance of here. They should check and see if she got her insurance bill that day.

In the mean-time, how's the weather in Ohio. I'm flying up to Cleveland for a wedding tonight.

[skoalyman]

58. thats outrageous they already tax you once a year for owning your own house

the ones that do and then they milk you even further:puke:

[specimenfred1984]

65. New thread title suggestion "Manipulated Stock Market Watch"

The markets are openly and "patriotically" being manipulated now, it's not the stock market that used to exist.

[ozymandius]

2. Today's Reports

08:30 Building Permits Jun
Briefing.com 980K
Consensus 965K
Prior 969K

08:30 Housing Starts Jun
Briefing.com 985K
Consensus 960K
Prior 975K

08:30 Initial Claims 07/12
Briefing.com 376K
Consensus 380K
Prior 346K

10:00 Philadelphia Fed Jul
Briefing.com -15
Consensus -15.0
Prior -17.1

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

[UpInArms]

30. U.S. single-family home starts down 43% in past year

01. U.S. single-family home starts down 43% in past year
8:30 AM ET, Jul 17, 2008

02. U.S. June housing completions up 1.2%
8:30 AM ET, Jul 17, 2008

03. U.S. June housing starts fall 4% excluding Northeast data
8:30 AM ET, Jul 17, 2008

04. U.S. June building permits up 11.6% on NYC data quirk
8:30 AM ET, Jul 17, 2008

05. U.S. June single-family housing starts off 5.3%, 17-year low
8:30 AM ET, Jul 17, 2008

06. U.S. June housing starts up 9.1% on data quirk
8:30 AM ET, Jul 17, 2008

"data quirk"



almost every piece of "data" that comes out of this mal-administration is "quirky" and cooked and doesn't tell even half of the story

[mmonk]

35. Including real inflation rates around 11%.

[AnneD]

77. Including real unemployment rates around 10-15%.

folks are finally catching on though.

[UpInArms]

50. Single-family home starts drop to 17-year low

http://www.marketwatch.com/news/story/economic-report-single-family-home-starts/story.aspx?guid=%7BB9547567%2D8849%2D4400%2D9F8F%2D9A5761A0D99F%7D&dist=hplatest

WASHINGTON (MarketWatch) -- New construction of single-family homes fell 5.3% to a fresh 17-year low in June, while a change in building permit rules for multifamily units in New York City pushed up total starts by 9.1%, the Commerce Department reported Thursday.

A flood of multifamily building permits was filed in New York ahead of the new rules, skewing the overall data for last month for both building permits and housing starts.

Excluding multifamily starts in the Northeast, housing starts fell 4%, the government said. The new construction code affected only multifamily construction in New York City.

Including the New York apartments and condominiums, total starts rose 9.1% to a seasonally adjusted annual rate of 1.066 million.

Outside of June's quirky data, there are no signs of recovery in the home-building industry: Builders are cutting back on production in an attempt to bring supply back into balance with falling demand.

"With credit tightening and employment growth slowing, a recovery in housing activity remains remote," wrote Gary Bigg, an economist for Bank of America.

...more...

[skoalyman]

59. they must have some buggy software

;)

[UpInArms]

31. Initial Claims @ 366,000 - last wk rev'd up 2,000

02. U.S. 4-wk. avg. continuing jobless claims up 16,500 to 3.14M
8:31 AM ET, Jul 17, 2008

03. U.S. continuing jobless claims fall 81,000 to 3.12 million
8:31 AM ET, Jul 17, 2008

04. U.S. 4-wk. avg. initial jobless claims fall 4,500 to 376,500
8:31 AM ET, Jul 17, 2008

05. U.S. weekly initial jobless claims rise 18,000 to 366,000
8:31 AM ET, Jul 17, 2008

[radfringe]

33. new twist to home selling?

I was just flipping through a local weekly newspaper and noticed 4 full page insert for home auctions. these are not foreclosures or "sheriff sales" due to tax deliquency, these are homes and land being auctioned by the owners. There's about 16 homes and building lots featured with large pics, plus a quarter page of other homes/land in a "list" format.

One article mentioned that home auctions were rising in the area because owners were having trouble selling through the traditional realtors.

Considering there's a glut on the market of homes and buyers are scarce - is this going to become a viable alternative and spread?

[radfringe]

68. Home auctions surge 47 percent since 2003

Home auctions surge 47 percent since 2003
Individual homeowners join ranks of builders seeking to dump inventory
http://www.msnbc.msn.com/id/25708236/
updated 5:35 p.m. ET, Wed., July. 16, 2008

NASHVILLE, Tenn. - Despite the soft real estate market, Beazer Homes USA Inc. recently sold 26 beachfront condos on the Jersey Shore in 75 minutes.

Auctions are no longer just for banks seeking to unload a foreclose. In a sign of just how broad the real estate downturn has become, auctioneers say much of their current business is being driven by home builders reducing inventory, and individuals who can't afford to wait out the real estate doldrums.

----snip-------

Revenues from residential real estate sold at live auction grew about 5 percent last year and are up almost 47 percent since 2003, according to the National Auctioneers Association, which held its annual conference last week in Nashville.

-----snip-----

Residential real estate auctions are the fastest-growing segment with gross sales of almost $16.9 billion last year, up from about $11.5 billion in 2003.

But individual property owners aren't necessarily making a profit, or even getting what they paid for the house if they bought in an overheated market. Often the main benefit of an auction is getting out from under rising interest on house notes and paying other expenses like taxes and insurance.

Mark Bratton needed to sell his Hot Springs, Ark., home so he could move into a single-story abode because of health problems. He put the property up for auction through a company near his home, where he says houses today can often sit on the market for up to eight months on average.

"What I wanted was to sell the house and sell it quickly," said Bratton, who recently sold the home at auction about 30 days after listing it with the company. He bought the house in 2005 for $139,000 and put about $180,000 into refurbishing it. When the gavel came down, the winning bidder paid just $275,000.

[UpInArms]

73. anecdotal evidence:

a local realtor just got his auctioneer's license because he felt he was losing out on realtor commissions - so he's trying to catch some auctioneer's fees

:hi:

[UpInArms]

37. Housing data "absurd"

http://www.reuters.com/article/newsOne/idUSN1731345120080717?sp=true

NEW YORK (Reuters) - Home building projects started in June surprisingly rose 9.1 percent due chiefly to a change in New York City building codes that, if it were ignored, would have seen starts decrease by 4.0 percent, a government report said on Thursday.

New York City enacted a new set of construction codes effective July 1, that largely explained an 11.6 percent increase in building permits and the starts number, the government said.

Excluding multifamily data in the Northeast, the government said, there was a 0.7 percent increase in permits and a 4.0 percent decrease in housing starts in June.

<snip>

HOUSING STARTS: "It seems absurd given everything else we know about real estate... Excluding the Northeast, starts would have dropped 4 percent. You take that out, and you're probably where you thought you'd be, down 4 percent. It's so absurd, it can't make sense.

...more...

[UpInArms]

39. Philly Fed factory activity falls again in July @ -16.3

http://www.reuters.com/article/ousiv/idUSN1729217920080717

NEW YORK (Reuters) - Factory activity in the U.S. Mid-Atlantic region shrank again in July, a survey showed on Thursday.

The Philadelphia Federal Reserve Bank said its business activity index was at minus 16.3 in July versus minus 17.1 in June. Economists polled by Reuters had forecast a reading of minus 15.0.

...more...

[ozymandius]

3. Oil steady in Asia near $134 a barrel

SINGAPORE - Oil was steady Thursday in Asia after plummeting more than $10 a barrel in the previous two sessions as evidence mounted that record prices are slowing U.S. demand.

.....

Midafternoon in Singapore, light, sweet crude for August delivery was down 11 cents at $134.49 a barrel in electronic trading on the New York Mercantile Exchange.

Crude fell $4.14 in the previous session to settle at $134.60 a barrel, after earlier sinking as low as $132. The drop followed a $6.44 sell-off Tuesday, crude's biggest since the Gulf War.

Despite the two-day slide of $10.58 a barrel in floor trade, prices remain about 80 percent above where they were a year ago and up about 40 percent from the start of the year.

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

[UpInArms]

98. Crude ends down $5.31, or 3.9%, at $129.29 a barrel - hurrah! we're saved! (NOT!)

03. Crude ends down $5.31, or 3.9%, at $129.29 a barrel
2:57 PM ET, Jul 17, 2008

[Demeter]

141. But Of Course, There's NO Speculation in Oil!

And if there was, surely this sudden drop wiped it all out!:sarcasm:

[ozymandius]

4. JPMorgan Chase profit falls 53 pct on loan losses

NEW YORK - JPMorgan Chase says its profit sank 53 percent in the second quarter on rising defaults in mortgages and other loans.

The bank also lost more than half a billion dollars due to Bear Stearns, the ailing investment bank it bought in March with the help of the government.

http://news.yahoo.com/s/ap/20080717/ap_on_bi_ge/earns_jpmorgan_chase

[ozymandius]

21. Traders Forecast Banking Stress to Last To End of 2010

The Financial Times reports that despite the snappy rally in bank stocks in the US, which may have been partly fueled by short covering, money market traders expect banks to face rough sailing till the end of 2010.

Traders are betting that the credit crunch will still be hurting banks at the end of 2010 with financial institutions expected to be scrambling for cash to shore up their end-of-year balance sheets.

A popular so-called butterfly trade in the money markets is showing expectations of three to four times the stress at the end of 2010 as before the credit crisis started to bite last summer, although it implies the situation will have improved sharply compared with today.

.....

Other measures of stress are running at high levels. The spread between the overnight index swap rate and Libor, the rate at which banks lend to each other, a spread seen as a pure measure of the risk, is seven to eight times as high as before the crunch. But it remains below the spikes prompted by fears of a complete collapse in the financial system last summer, at the end of last year and just before Bear Stearns was rescued in spring.

In case you took cheer from the Wells Fargo earnings report, which was the trigger to the rally in financials, consider this tidbit from Housing Wire:

Despite the optimism, a burgeoning portfolio of second-lien mortgages at Wells Fargo that had in recent weeks concerned analysts and investors hasn’t gone anywhere; and, if anything, Wednesday’s quarterly result also holds evidence that the credit losses in that particular portfolio have yet to fully reverberate throughout the bank.

Wells has a substantial $84 billion portfolio of home equity loans — and half of those are located in hard hit states like California and Florida; of that total, it has carved out the worst $11 billion for liquidation, with rest remaining as part of its “core” home equity portfolio.

In the second lien portfolio set up for liquidation, the percent of loans that saw borrowers miss two or more payments rose during Q2 to 3.6 percent, up from 2.79 percent one quarter earlier. The $73 billion “core” home equity portfolio saw a similar rise to 1.88 percent in 60 day delinquencies, compared with 1.71 percent in Q1.

So delinquencies continued to rise during Q2; net credit losses, however, did not. Charge-offs on second liens were actually down $104 million compared with first quarter 2008 — but don’t let that fool you. The improvement was primarily due to a change in how the bank handles its home equity portfolio charge-offs; earlier in Q2, the bank extended its charge-off policy from 120 days to 180 days, in an effort to give troubled borrowers more time to reach a loan workout (or to protect earnings, take your pick).....

http://www.nakedcapitalism.com/2008/07/traders-forecast-banking-stress-to-last.html

[Ghost Dog]

25. Meanwhile, over at Citi...

...Meanwhile some investors are viewing the Paulson bailout not as a bid to rescue the US economy but a lifeline for his former Wall Street cronies as the country's big banks teeter towards a financial implosion. What until recently had been the largest bank in terms of loans outstanding, Citigroup in New York, has been forced to raise billions in capital from sovereign wealth funds in Saudi Arabia and elsewhere to remain in business.

In a statement in May, Citigroup's new chairman, Vikram Pandit, announced plans to reduce the bank's $2.2 billion balance sheet of liabilities. However, he never mentioned an added $1.1 trillion in Citigroup "off balance sheet" liabilities, which include some of the highest risk deals in the US real estate and securitization era it so strongly backed.

The Financial Accounting Standards Board in Connecticut, the official body defining bank accounting rules is demanding tighter disclosure standards. Analysts fear Citigroup could face devastating new losses as a result, with the value of liabilities exceeding the bank’s $90 billion market value. In December 2006, prior to the onset of this financial crisis, Citigroup had a market value of more than $270 billion.

/... http://www.atimes.com/atimes/Global_Economy/JG17Dj03.html

[Hugin]

42. ... and who is repeatedly mentioned as miraculously weathering the storm...

None other than Goldman-Sachs! (I've heard this meme constantly over the past few days.)

My mind yells... Conflict of Interest and Paulson cronyism. But, then he's just looking out for his
parachute in much the same way as Cheney does Halliburton. :eyes:

[ozymandius]

84. It's amazing how many people have not figured this out.

Just like the list of 'protected' names from post #36 - individuals appointed to top offices charged with controlling regulation and money supply migrate from a short list of banks and schools.

(What's the deal with Yale and neo-cons anyway?)

[Hugin]

96. Being a proud graduate of "Slappy's Hut-o-Knowledgeable 237", it's difficult to relate to Yale...

But, it seems to me like many of the originators of the whole Neo-Con regime started out at the University of Chicago. Many of them were also Alumni of the Nixon Administration.

Maybe they had a scholarship program there or something.

[Demeter]

142. 2020 seems more realistic, if recovery is possible

And that's a pretty big if. More likely, this is the mass extinction of the dinosaurs, and some new species, or "mammalian" bank form will take over.

[ozymandius]

5. Continental slides to 2Q loss on fuel costs

...

For the quarter ended June 30, Houston-based Continental says losses totaled $3 million, or 3 cents per share, compared with a profit of $228 million, or $2.03 per share, a year ago. Excluding $22 million in one-time gains, the carrier says it lost $25 million, or 25 cents per share.

...

http://news.yahoo.com/s/ap/20080717/ap_on_bi_ge/earns_continental

[ozymandius]

6. Nokia's 2Q profit drops 61 percent

NEW YORK - The world's No. 1 mobile phone maker Nokia Corp. on Thursday said profits fell 61 percent in the second quarter from the same period a year ago, when the company booked a large gain from a joint venture with Siemens AG.

....

Excluding special items, Nokia said its profit rose 8 percent to $2.18 billion.

Analysts expected earnings of 56 cents per share on $20.05 billion in revenue, on average, according to Thomson Financial.

http://news.yahoo.com/s/ap/20080717/ap_on_bi_ge/earns_nokia

[ozymandius]

7. Inflation soars; home builder sentiment crumbles

NEW YORK (Reuters) - Inflation accelerated in June to its fastest rate since the aftermath of Hurricane Katrina in 2005 while workers' earnings slumped, compounding the stagflationary dilemma facing the Federal Reserve.
A separate report showed U.S. homebuilder sentiment dropped to a record low in July, a reminder of the troubled housing market's drag on the economy, while the minutes from the Fed's latest policy meeting highlighted increasing worries over inflation amid an uncertain outlook for growth.

The consumer price index, the government's key measure of inflation, advanced 1.1 percent during the same month, the biggest monthly rise since September 2005, when devastation from Hurricane Katrina drove energy prices up sharply.

Compared with a year ago, prices were up 5 percent, the biggest year-on-year rise since 1991. The worries over inflation, particularly after the Fed minutes, led investors to raise bets on future interest-rate rises by the central bank.

....

U.S. mortgage applications rose for a third consecutive week, reflecting an increase in demand for home loan refinancing as interest rates plunged, The Mortgage Bankers Association said.

http://news.yahoo.com/s/nm/20080716/bs_nm/usa_economy_dc

[ozymandius]

8. Housing Starts in U.S. Probably Fell in June to 17-Year Low

July 17 (Bloomberg) -- Builders probably broke ground in June on the fewest houses in 17 years, signaling the real- estate recession will keep hurting growth, economists said ahead of a government report today.

Housing starts fell to a 960,000 annual pace last month, the weakest since March 1991, from 975,000 in May, according to the median of 76 forecasts in a Bloomberg News survey. Building permits, a sign of future construction, probably fell to a 965,000 rate from 978,000.

Builders are cutting back as rising foreclosures, higher mortgage rates and declining property values threaten to depress home sales further. The slump in financial markets brought on by mounting subprime losses may prompt lenders to choke off credit, making the situation even worse.

.....

The Commerce Department's report on starts is due at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from annual rates of 925,000 to 1.03 million.

http://www.bloomberg.com/apps/news?pid=20601068&sid=aq3RLvihHaQc&refer=economy

[ozymandius]

9. Stocks look to extend rally; Dow futures jump 100 (love those JP Morgan losses)

NEW YORK - U.S. stocks headed for a sharply higher open Thursday after stronger-than-expected quarterly results from names like Coca-Cola, JPMorgan Chase and United Technologies offered investors some reassurance about the health of the economy.

....

A flurry of quarterly results are offering investors some welcome insights into the well-being of the economy. Three components of the Dow Jones industrial average — Coca-Cola Co., JPMorgan Chase & Co. and United Technologies Corp. — issued comments that generally indicated that their businesses are holding up despite sometimes difficult economic conditions.

Dow futures, which had been flat and at times down ahead of the reports, jumped 110, or 0.98 percent, to 11,316. The Dow on Wednesday surged 276 points, or 2.5 percent, logging its best daily gain in three months.

http://news.yahoo.com/s/ap/20080717/ap_on_bi_st_ma_re/wall_street

[AnneD]

82. Morning Marketeers......

:donut: and lurkers. I spent the first part of yesterday doing a media watch (ok I was semi goofing off), and the later part of the day with my daughter at the movies. We saw Walle (loved it) and I was a bad example and we snuck in to see Hancock. There was absolutely NO ONE, and I mean NO ONE in the Hancock showing and their were only 6 people to see Walle. It was the creepiest feeling-something out of an apocalyptic sci-fi movie. I felt no shame in our double header-the early matinee cost 15+ 7.50 for our 3 treat special (a small icee and a cup full of popcorn each). And they wonder why they are playing to empty theaters.

And speaking of apocalyptic scenerios.....I'd like to see a show of hands as to how many of you were surprised when the market went up yesterday. In my media watch yesterday,,,,everyone was going full tilt to reassure folks about the FDIC and that everything was ok. I mean the media was taking painstaking attempts not to spook the cattle. And who was surprised that the PPT had been on steroids yesterday. They have been doing some heavy lifting since we dropped below 11000. On the SWT, we know the Emperor is Neekid, but other folks are starting to notice his robes beginning to unravel too. And try as this administration might, the process has begun and cannot be stopped. Things ARE beginning to unravel.

We will see how long they can stop this run-

Happy hunting and watch out for the bears....

[SidneyCarton]

87. Three weeks ago, the Mrs. Carton and I went looking for a table and chairs.

When we got married 4 yrs. ago Ontario, CA was full of furniture stores (courtesy of the housing bubble) now they are almost all closed, or closing. One sales person practically begged to let me have him order something out of their catalog as they didn't have it on the floor.

In the end we got what we wanted off of Craig's List, a yuppie cast-off for $350 less than we would have had to pay from a store. Things are getting spooky...

[Demeter]

91. My Personal Skepticism Didn't Stretch to 2 Days and 500 Points, Though

They are putting tremendous effort into this market manipulation--why now?

They cannot defy gravity through November, surely.

Wouldn't some teensy-weensy regulatory efforts, with some permanent positive effect on operations, be much cheaper and more valuable?

[Tansy_Gold]

119. "Much cheaper and more valuable?"

No, Demeter, because actions like those might actually WORK. The last thing the shruggers want to do is actually SAVE the economy.

Sheesh, get with the program! :evilgrin:

[Demeter]

125. Sorry. I'm So 18th Century, It Hurts to Live in These Modern Times

[ozymandius]

10. US inflation quickest in 17 years (Preznit Stupid trying to best his dad again)

US inflation accelerated at its fastest pace in 17 years in June, official figures have shown, driven higher by surging energy prices

Consumer prices were 5% higher than a year ago and rose 1.1% on a monthly basis, the Labor Department said.

Federal Reserve boss Ben Bernanke has warned that the threat of rising inflation has intensified recently.

....

At the same time as inflationary pressures are rising, the US faces a severe housing slump, a credit crunch and financial market turmoil stemming from the collapse of the sub-prime mortgage market.

According to minutes of the Fed's interest rate meeting in June, policymakers believed "the next change in the stance of policy could well be an increase" due to "upside risks to inflation and inflation expectations".

http://news.bbc.co.uk/2/hi/business/7509729.stm

[UpInArms]

12. dollar watch

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

Last trade 72.044 Change -0.010 (-0.01%)

US Dollar Fights its Way Back

http://www.dailyfx.com/story/bio1/US_Dollar_Fights_its_Way_1216243761759.html

After hitting a record low against the Euro on Tuesday, the greenback is fighting its way back. The fundamental factors that are driving the dollar higher today include falling oil prices, a rebounding stock market, intervention risk and hawkish FOMC minutes. Although each of these factors has the power to turn the dollar around individually, the primary story is oil. Since Tuesday, oil prices have fallen more than $10 a barrel, leaving many consumers and investors hoping that this is a top. Lower oil prices is a big relief for US consumers and businesses, which is why the Dow rose more than 270 points today. Meanwhile the dollar is also benefitting from speculation that the Federal Reserve could intervene to prop up the US dollar. In his testimony this morning, Bernanke said that forex intervention should be done rarely and that USD intervention may be justified in disorderly times. Since most of us would argue that current conditions can be described as “disorderly,” Bernanke may be warning about possible plans for intervention, but we think that is unlikely. According to the minutes from the June FOMC meeting, Fed officials were prepared to raise interest rates “very soon.” They felt that growth risks diminished but inflation was on the rise. However don’t read too much into these minutes given that a lot has changed since June; Growth risks have increased significantly and inflationary pressures or at least inflation expectations are beginning to ease. The same can be said of the Treasury International Capital flow numbers which indicated that even though foreign purchases of US securities fell last month, there is no sign that China or Japan has reduced their holdings of US dollars. In fact, purchases of Fannie Mae and Freddie Mac’s debt actually increased in May. We suspect that the data for June and July will look very different. Finally, other pieces of US data were mixed. Consumer prices raced to the highest level since 1991 on an annualized basis, industrial production was strong but the NAHB housing market index fell to a record low. Given current market conditions, traders should forget about a rate hike from the Fed this year. Inflation is a problem, but the stability of the financial markets; growth and global investor confidence are even bigger problems. If oil prices fall back towards $120 a barrel, the Fed will remain on hold for the remainder of the year.

...more...

Dollar Rally Stalls As Markets Ponder - What's Next?

http://www.dailyfx.com/story/bio2/Dollar_Rally_Stalls_As_Markets_1216286238304.html

EURUSD recovered some of its losses in overnight European trade after an article in Financial Times indicated that Sovereign Wealth Funds in the Middle East were continuing to pare their dollar long exposure. Kenneth Shen, head of the strategic and private equity group at Qatar Investment Authority, noted that “the outlook for the US dollar is a significant issue for investors contemplating US-related investments.”

More troubling was the suggestion in the article that China’s State Administration of Foreign Exchange (SAFE) has been looking to strike deals with private equity firms in Europe as a part of a strategy to reduce its dollar holdings. Chinese have been key buyers of dollar denominated fixed income instruments including bonds from the Fannie and Freddie Mac. Should their appetite for US securities suddenly wane, the greenback could see further selling as fears over financing of US Current Account deficit will resurface once again.

On the positive side the drop in oil below the $135.00 level has been a huge boon for the dollar and US equities and should crude continue to slide towards the $130/bbl mark, the greenback is likely to see more gains in the North American session despite lingering concerns about the stability of the US financial system. With little meaningful news on the calendar, the currency markets continue to be driven by macro rather than micro themes, as oil and equities dominate trade in FX.

Nevertheless, the start of North American session promises to bring more interesting economic data for traders to consider as jobless claims, housing reports and Philly Fed all hit the screen. Jobless numbers are an important barometer of economic health as labor markets will be a critical factor in determining whether the Fed will be able to raise rates this year or not. Last week’s surprising drop to 346K was attributed to seasonal adjustments, so market participants will focus on this week’s data with particular attention. Any print above 400K will once again raise concerns about deteriorating labor markets, while anything close to 350K could provide the greenback with a much needed boost.

...more...

[Ghost Dog]

14. GLOBAL MARKETS-Asia stocks rally oil dip, hopes for banks

HONG KONG, July 17 (Reuters) - Asian stocks rebounded on Thursday, boosted by the biggest surge in U.S. bank shares in 16 years and a decline in oil prices, providing some relief from fears about the global credit crisis spiralling out of control.

The dollar, which benefited from the overnight fall in oil prices, gave up some of its gains on a report that sovereign wealth funds were seeking to cut their exposure to the U.S. currency, while government bonds fell as equities gained.

...

Japan's Nikkei share average .N225 rose 1 percent, posting the biggest daily rise in a month.

Outside of Japan, shares in the Asia-Pacific region .MIAPJ0000PUS climbed 2.2 percent for the largest single-day increase since April. On Wednesday, the index plumbed its lowest since March 2007.

Hong Kong's Hang Seng index .HSI jumped 2.6 percent, led by gains in global bank HSBC (0005.HK: Quote, Profile, Research, Stock Buzz).

Despite the gains, stock markets globally remain entrenched in a bear market, with the MSCI all-countries world index .MIWD00000PUS down slightly more than 20 percent from an all-time high reached in November.

/... http://www.reuters.com/article/marketsNews/idINSP22329320080717?rpc=44&sp=true

[Ghost Dog]

15. Sovereign funds cutting exposure to dollar-FT

SYDNEY, July 17 (Reuters) - Some of the world's largest sovereign wealth funds are seeking to scale back their exposure to the U.S. dollar in a sign of global concern about the currency, the Financial Times reported on Thursday.

The report said a large sovereign fund in the Gulf had cut its dollar-denominated holdings from more than 80 percent a year ago to less than 60 percent, but gave no source.

The FT also said China's State Administration of Foreign Exchange (SAFE) had been looking to strike deals with private equity firms in Europe as a part of a plan to reduce its U.S. dollar holdings, citing people familiar with the matter.

/more... http://www.reuters.com/article/marketsNews/idUSSYD21200520080717

[Ghost Dog]

16. Europe shares rise 2.3 pct after JPMorgan results

LONDON, July 17 (Reuters) - European shares bounced by more than 2 percent on Thursday after results from U.S. bank JPMorgan (JPM.N: Quote, Profile, Research, Stock Buzz) beat expectations, while Finnish mobile phone maker Nokia (NOK1V.HE: Quote, Profile, Research, Stock Buzz) met forecasts with its earnings.

By 1033 GMT the FTSEurofirst 300 index of top European shares was up 2.3 percent at its day high of 1,141.56 points.

JPMorgan reported earnings per share of $0.54, compared with Reuters estimates for $0.44, helping push up U.S. stock index futures DJU8 SPU8 NDU8 by 0.3 to 0.4 percent.

JPMorgan shares were up 5.7 percent in premarket electronic trade in New York JPM.

In Europe, banks were the strongest performers, with Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) up 8.2 percent, Banco Santander (SAN.MC: Quote, Profile, Research, Stock Buzz) up 2.6 percent and Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) up 5.5 percent.

/.. http://www.reuters.com/article/marketsNews/idCAL1780517020080717?rpc=44

[Ghost Dog]

18. Banks, oil shares power FTSE's 2.2 percent jump

LONDON, July 17 (Reuters) - Britain's blue-chip index rose 2.2 percent at midday on Thursday, as banking shares spiked after results from JPMorgan (JPM.N: Quote, Profile, Research, Stock Buzz) eased worries about a credit crisis, and weaker crude prices lowered inflation concerns.

By 1117 GMT, the commodity-heavy FTSE 100 .FTSE was up 113.9 points at 5,264.5, after closing down 0.4 percent on Wednesday, when it hit a three-year low.

Banks were in demand, with the sector topping the UK benchmark index, after unexpectedly strong results from Wells Fargo (WFC.N: Quote, Profile, Research, Stock Buzz) lifted the U.S. stock market over 2 percent on Wednesday -- the best day for banks in 16 years.

...

"We still have got big figures to come," said Keith Bowman, equity analyst at Hargreaves Lansdown, adding the market was waiting to see how other big banks perform.

"There is room for further writedowns and that would keep some investors on the sidelines for the time being. The market is likely to remain volatile," he added.

Analysts said the results might set the direction for British stocks, which have fallen sharply in the past sessions on negative sentiment and poor outlook. The FTSE 100 index has fallen 18.6 percent so far this year, against an average annual gain of more than 10 percent in the previous five years.

Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) led the banks higher, with a jump of nearly 10 percent, while Barclays (BARC.L: Quote, Profile, Research, Stock Buzz), HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz), HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz), Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) and Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) rose between 5 and 9.4 percent.

...

"It's a relief rally for banks," said Peter Dixon, UK economist at Commerzbank.

"But I think investors will be cautious under these kind of circumstances as all the factors, which were in place a week or two ago, are still there," he said, adding the markets have been sliding almost since May and these rallies might be temporary.

/... http://www.reuters.com/article/marketsNews/idCAL1761094720080717?rpc=44&sp=true

[Ghost Dog]

24. China's economy slows but still expands at double-digit pace

BEIJING (AFP) - China's economic juggernaut slowed but still maintained double-digit growth in the first half of the year as it battled inflation and absorbed global setbacks, official data showed Thursday.

The world's fourth biggest economy expanded by 10.4 percent in the first half and 10.1 percent in the second quarter, the National Bureau of Statistics said, down from the sizzling pace of 11.9 percent recorded for all of 2007.

Bureau spokesman Li Xiaochao said domestic inflation, problems with food supplies and global economic woes were among the chief concerns for China.

"Pressure for rapid price increases remains high, there are factors constraining steady agricultural production," Li said.

"The international financial situation is severe and there are uncertainties in world economic development."

Nevertheless, he said China's economy remained strong and that the slowdown was under control.

"The national economy maintains the momentum of steady and fast growth," he said. "This slowdown is in line with our expectations."

NBS chief economist Yao Jingyuan said the economy would likely grow at 10 percent for the full year, although this was still above the target set by Premier Wen Jiabao of 8.0 percent.

China's consumer price index -- the main gauge of inflation -- rose 7.9 percent in the first half of 2008, with food prices soaring 20.4 percent, according to the bureau.

However, inflation has come off 12-year highs seen earlier in the year, when it peaked at 8.7 percent in February, with economists saying the fall was due to a raft of economic tightening measures, including interest rate hikes.

For June alone, inflation was 7.1 percent, the bureau said.

Nevertheless, there were few expectations inflation would fall steeply enough to achieve the government's full-year target of 4.8 percent.

"Certainly, the expectation for inflation is fairly strong ... due to price rises on the international market," Li said.

China had already released data last week showing the nation's trade surplus had fallen nearly 12 percent in the first half, as exporters struggled with the global economic slowdown, particularly problems in the United States.

...

Industrial output, a key measure of activities in the nation's factories, expanded by 16.3 percent in the first half and 16.0 percent for June alone, according to the bureau.

China's fixed asset investments rose 26.3 percent in the first half of 2008 from a year earlier, the bureau said.

/... http://www.afp.com/english/news/stories/newsmlmmd.d3f0071627ad48e327f33f978b7fffa1.831.html

[skoalyman]

61. They'll keep expanding until most of the us businesses are china owned

chinaUsA® JapanUsA® IndiaUsA®

[Ghost Dog]

99. Ah, but on the other hand (dons rose-tinted made-in-USUK designer shades):

America is lone bright spot as fund managers flee stocks

By Ambrose Evans-Pritchard
Last Updated: 10:51pm BST 16/07/2008

Fund managers across the world are dumping stocks and retreating to cash in a mood of extreme pessimism, fearing that the looming economic crunch is an even greater threat than inflation.

The latest survey of investors by Merrill Lynch shows that an unprecedented 41pc now think that a world recession is either likely or very likely. The majority dismiss hopes of double-digit earnings growth next year as "fantasy".

"People are a lot more scared about the macro-outlook. The survey has never seen anything like this before since it began a decade ago," said David Bowers, the organiser of the report.

"Recession risk has taken over from inflation risk. Fund managers believe the global economy is deteriorating so fast that a wage-spiral is never going to happen, at least in developed markets," he said. The survey is based on 191 funds managing assets worth $610bn (£305bn).

The US is emerging as the one bright spot in the global gloom, despite the credit mayhem. A net 7pc of investors are overweight in US equities, clearly betting that most of the bad news is already in Wall Street prices. The figure was negative in May.

With the tailwind of 2pc interest rates and a cheap dollar, America stands to benefit from the "first-in, first-out" principle. Others have yet to take their full punishment from the cycle.

"The US has now become the country of cheap manufacturing. You've got 20pc wage inflation in emerging markets so FDI (foreign direct investment) is flowing back there," said Karen Olney, Merrill's chief European equity strategist.

The investor love affair with India, China, and Asian markets over the last nine months has turned sour.

"That trade is off," said Mrs Olney. A net 75pc are underweight Indian equities as the country's inflation reaches double digits. Chile (-69), Taiwan (-50), Korea (-50), Malaysia (-44) are not far behind.

Mr Bowers said investors had woken up to the nasty reality that emerging markets have let rip with inflation and will now have to jam on the brakes.

/... http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/17/cnfunds117.xml

The advantage, you see, is that no wage-inflation will be allowed in USA. Quite the opposite, in fact, as the disenfranchised masses are returned to forelock-tugging penury, and will from now on provide the low-wage cheap manufacturing base from which to sell dead commodities (useless consumer-gods) to the rest of the world... Working for the same corporations...

[Tansy_Gold]

122. Freudian slip?

(useless consumer-gods)

:evilgrin: because I like it either way!

[Demeter]

126. They Must Be Looking at the California Wild Fires

Can't see any other point of light in this benighted nation.

[Ghost Dog]

111. European Stocks Rally Most in Three Months, Led by Nokia, RBS

July 17 (Bloomberg) -- European stocks surged the most in three months after Nokia Oyj and JPMorgan Chase & Co. reported earnings that beat analysts' estimates, easing concern a slowing economy and credit losses will stifle profit growth.

Royal Bank of Scotland Group Plc led banking shares to their biggest gain since March. Nokia climbed to a six-week high as the world's biggest maker of mobile phones raised its forecast for industry sales. CRH Plc, the world's second-biggest maker and distributor of building materials, rallied 9.2 percent as a report showed U.S. housing starts unexpectedly rose in June.

``Relief is the key word for this market,'' said Peter Braendle, a Zurich-based fund manager at Swisscanto Asset Management AG, which has $58 billion under management. ``Investors are reacting positively to the latest surprisingly good news from the financial sector.''

The Dow Jones Stoxx 600 Index advanced 2.9 percent to 276.27, leaving it with a two-day gain of 3.7 percent. The gains have cut this year's decline to 24 percent after better-than- expected profit from Wells Fargo & Co. yesterday helped restore confidence in financial stocks, the region's worst performers this year.

``In the short term, banks look oversold,'' said Lawrence Peterman, investment director at Eden Financial Ltd. in London. ``They are still not out of the woods in terms of earnings outlook and credit-market issues.''

$14 Trillion

About $14 trillion has been wiped off the value of global equities since October as more than $426 billion in credit- related losses prolong the global economy's slump and rising commodity prices stoke inflation.

The MSCI World Index entered a bear market last week as oil rose to a record and the U.S. Treasury moved to shore up Fannie Mae and Freddie Mac. A bear market is commonly defined as a decline of 20 percent. If history is a guide, the benchmark index may fall another 13 percent, based on the average decline of seven bear markets since 1969, according to data compiled by Birinyi Associates Inc. and Bloomberg.

Analysts estimate profit for companies in the Stoxx 600 will decline 2.3 percent in 2008, Bloomberg data show. That's down from 11 percent growth predicted at the start of the year.

National Markets

National benchmark indexes increased in all 18 western European markets. The U.K.'s FTSE 100 jumped 2.6 percent. France's CAC 40 climbed 2.8 percent, and Germany's DAX rose 1.9 percent. Ireland's ISEQ Index surged 5.1 percent, led by Allied Irish Banks Plc.

/... http://www.bloomberg.com/apps/news?pid=20601085&sid=aSFb_iYJE3Uw&refer=europe

[UpInArms]

17. FBI probing failed IndyMac bank: report (fraud, insider trading, etc)

http://news.yahoo.com/s/afp/20080717/bs_afp/usfinancebankingfbiprobecompanyindymac

WASHINGTON (AFP) - The FBI is investigating failed IndyMac Bank for possible mortgage fraud, US media reported on Thursday, citing US officials.

The California-based IndyMac Bank, which government regulators seized last week, is among 21 banks being probed by the Federal Bureau of Investigation, the Wall Street Journal reported.

The investigation began shortly before the bank was placed under the control of the Federal Deposit Insurance Corporation (FDIC) in one of the biggest bank closures in US history.

Officials would not offer more details about the probe, the paper said.

In cases involving other banks, the FBI is "focusing on accounting fraud, the documentation of mortgage-backed securities and insider trading," the paper wrote.

The FBI said in a statement the number of banks under investigation came to 21.

One of the banks identified is Countrywide Financial, the former parent company of IndyMac.

...more...

[UpInArms]

19. Fannie, Freddie spent millions on lobbying

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

WASHINGTON - For years, mortgage giants Fannie Mae and Freddie Mac tenaciously worked to nurture, and then protect, their financial empires by invoking the political sacred cow of homeownership and fielding an army of lobbyists, power brokers and political contributors.

New attention is being focused on the bruised mortgage companies as the Bush administration presses its rescue plan to Congress. Some lawmakers have challenged the plan's open-ended nature and expressed fears of a potential big taxpayer bailout in an election year.

Over the past decade, both Fannie and Freddie made the list of Washington's top 20 lobbying spenders. They spent a combined $170 million to cultivate allies during that period, a bit less than the American Medical Association and a bit more than General Electric. At the same time, their executives have consistently led the mortgage-banking sector in campaign giving to members of Congress, contributing a combined $16.2 million since 1997.

<snip>

Neither one makes loans on its own, and they were not directly involved in the subprime mortgage fiasco. But the housing downturn is so steep that they have been seeing increasing delinquencies on their conventional mortgages and have been exposed to investor flight from financial assets. Furthermore, because of their special status, they can keep smaller capital reserves on hand than other financial institutions. They need to raise cash to stay afloat.

Fannie and Freddie have long been distinguished by their outsized influence. They spend heavily on lobbying and hire liberally from Capitol Hill's revolving door and their executives give top dollar to political campaigns. They've also funneled contributions into select charities and think tanks.

<snipping out some utter bullshit>

To help keep themselves free from unwanted regulatory and congressional prying, the two mortgage giants have surrounded themselves with scores of well-connected allies. Fannie Mae's 51-member lobbying stable, according to its most recent disclosure, includes former Reps. Tom Downey, D-N.Y., and Ray McGrath, R-N.Y.; Steve Elmendorf, a Democratic political strategist and former congressional aide; and Donald Fierce, a longtime GOP operative. Freddie Mac's list of 91 lobbyists includes former Reps. Vin Weber, R-Minn., and Susan Molinari, R-N.Y.

...more...

[ozymandius]

27. Phony Accounting on Fannie, Freddie Rescue Legislation (Naked Capitalism spots fraud)

http://www.nakedcapitalism.com/2008/07/phony-accounting-on-fannie-freddie.html

I got this far in the Wall Street Journal article, "Capitol Hill Storm Envelops Fannie-Freddie Rescue" and started seeing red:

The Congressional Budget Office is expected to estimate the cost of Treasury's proposals to the federal government to be in the tens of billions of dollars, according to people familiar with the matter. That estimate is expected to reflect the likelihood that an equity investment will be made by the federal government and that the line of credit might also be tapped.

This cost estimate is a fraud. The so-called rescue plan is merely a first installment on whatever the cost of shoring up Fannie and Freddie will ultimately be. The CBO analysis almost without a doubt fails to reflect the fact that this initiative de facto makes the GSes wards of the state. It's the worst of all possible worlds, because the government is in effect assuming unknown but possibly large liability with no (if Paulson gets his wish) or little (if the Democrats add a few restraints) controls over the GSEs.

If taxpayers pay one plugged nickel to support the GSEs, shareholders should be wiped out and the GSEs should be nationalized. But instead, the powers that be are pretending we can have our cake and eat it too. We can have a "backstop" and the rest of the world will be satisfied that the US is supporting Fannie and Freddie. No cost (what's a mere "tens of billions") yet we've satisfied the demands of our friendly funding sources. Ain't finance grand?

[tismyself]

94. I'm no expert but...

isn't bailing out Freddie and Fannie unconstitutional?

Given the context of the times, I realize that's a silly question, but geez...

[Demeter]

127. In What Way Would You Call Bailout Unconstitutional?

Equal protection applies only to human beings, I think.....

[tismyself]

152. well... Article I, Section 8

Article I, Section 8.

The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and General Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.

"General Welfare" doesn't (or should not) be limited to just Freddie and Fannie for example, I think it means everyone across the board. And then at the same time, one has to wonder when there is a bailout, why one company and not another?

[ozymandius]

157. An argument can be made

that keeping Freddie and Fannie afloat is "common welfare". As for failures: we have been "prepped" for this circumstance. Remember Paulson talking about bank failures? Other nondescript failures? Failures will happen just like a tree will shed limbs during a drought. But the trunk survives.

Not that I agree with this Bill Policy of Attainder (a Bill of Attainder is unconstitutional). Just the mere thought that herculean efforts must be expended to correct these incompetent policies, while not admitting that Greenspan was incompetent, insults my intelligence.

[tismyself]

161. This is despotism.

I hear what you are saying, and I am not arguing with you at all here - I love reading what you write and value your opinion. But the thing is, "common welfare" never got specifically described in the beginning... and then, what was that thing about the Revolution of 1937 or something, that involved FDR. I remember reading that that was the first time "common welfare" got stretched beyond what many believed to be the Framers original intent. As it is now.

James Madison wrote in 1792 concerning whether or not the "general welfare" clause was a grant of power, "If not only the means but the objects are unlimited, the parchment (the Constitution) should be thrown into the fire at once."

[DemReadingDU]

20. GMAC Obtains Waiver for Bank

GMAC Obtains Waiver for Bank, Ensuring Access to Cheap Funding
By APARAJITA SAHA-BUBNA
July 16, 2008 1:20 p.m.

NEW YORK -- GMAC Financial Services got a much-needed boost Wednesday as it maintained its hold on GMAC Bank LLC, ensuring its access to a cheap funding source that is vital to the group's financial health.

An eagerly awaited decision from the Federal Deposit Insurance Corporation lifts the uncertainty surrounding the fate of the small Utah bank. It allows GMAC, the financing arm of General Motors Corp., to raise funds at competitive rates at a time when its ability to access credit markets is constrained by higher borrowing costs and scare availability of capital.

The auto maker has a 49% stake in GMAC after a group of investors led by private-equity firm Cerberus Capital Management LP bought 51% of GMAC in 2006 for about $14 billion.

"It's a positive on the funding side," said Richard Hofmann, an analyst at independent research firm CreditSights.

GMAC Bank has "become a more critical funding source for the company as the credit crisis has heightened," said Mr. Hofmann. "A bank is an easier way to bring in funding at a very competitive price."

The FDIC decision grants a 10-year waiver to GMAC that will allow the group control of GMAC Bank, a so-called industrial-loan corporation, for at least 10 years. Industrial-loan corporations are FDIC-supervised lenders that offer a way for commercial firms to own banks without being regulated by a federal banking agency.

"We're pleased with the outcome," said Gina Proia, a GMAC spokeswoman. "It removes near-term uncertainty around the bank."

When Cerberus and its co-investors bought a 51% GMAC stake in 2006 from GM, the FDIC had imposed a moratorium on the approval of banks owned by nonfinancial companies, such as Wal-Mart Stores Inc., to allow Congress to debate the issue of mixing banking and commerce.

Despite the freeze, the FDIC granted Cerberus and GMAC's application because of "the unique circumstances" of GM's restructuring. In exchange, GMAC and Cerberus agreed to satisfy one of several conditions by November: sell GMAC Bank, have the bank cease using FDIC insurance, or register as a bank holding company. If none of these terms could be achieved, Cerberus would have to get an FDIC waiver.

As the credit crunch has made short-term financing costly and scarce, GMAC Bank's $15.3 billion in deposits and $10.8 billion in Federal Home Loan Bank advances have become increasingly important sources of stable, low-cost funding, particularly for Residential Capital LLC. ResCap, GMAC's struggling mortgage subsidiary, has suffered losses over multiple quarters on rising defaults and has come to rely on GMAC Bank for cheap, reliable capital.

The FDIC waiver "means more for ResCap," said Mr. Hofmann at CreditSights. "Look at GMAC bank, it's loaded up with mortgages. ResCap cannot fund in the unsecured debt market."

As of the first quarter, over two-thirds of GMAC Bank's $30.3 billion assets were made up of such mortgage assets as prime loans, which are made to those with strong credit. GMAC Bank accounted for about 30% of ResCap's funding last year.

Continued access to cheap funding "doesn't eliminate the serious credit quality concerns," related to ResCap's mortgage book, said Mr. Hofmann. "But it's a step in the right direction that will help write new business at a profitable level."

http://online.wsj.com/article/SB121622842585659053.html?mod=googlenews_wsj

[Demeter]

128. Pretty Amazing Admission

So GMAC is a pet bank where the depositors become unwitting investors in Cerberus?

[PassingFair]

138. OMG!

That makes me SICK.

Home owner with a GMAC Mortgage in
Michigan, here. The thought that
I'm floating Cerberus is revolting.

[DemReadingDU]

153. Maybe there is a reason their logo is Cerberus

three-headed watchdog of Hades
http://www.lostpedia.com/wiki/Cerberus

[UpInArms]

23. Electrolux warns on full year amid consumer gloom

http://www.reuters.com/article/businessNews/idUSL1754887820080717?feedType=RSS&feedName=businessNews

STOCKHOLM (Reuters) - World No. 2 home appliances maker Electrolux warned on Thursday that flagging consumer demand will hit full-year earnings harder than thought, sending its shares down nearly 9 percent.

The company -- whose brands include AEG, Zanussi and Frigidaire as well as its own name -- said it expected operating income for the year of 3.3 billion to 3.9 billion Swedish crowns ($654 million), excluding items affecting comparability.

The news overshadowed forecast-topping second-quarter numbers from Electrolux, which said earnings before interest and tax for the period were 793 million Swedish crowns -- excluding extraordinary items.

This was below a prior-year 921 million but beat a mean forecast of a 716 million in a Reuters poll of 10 analysts.

"The new guidance is lower than what was expected and that will lead to forecast downgrades," said one analyst. "If we say that the market will pull down its estimates 10 percent, the share price fall is understandable."

...more...

[UpInArms]

26. Bank of NY Mellon profit falls on big charge - caught out being a tax cheat

http://www.reuters.com/article/bondsNews/idUSWNAS052120080717

NEW YORK, July 17 (Reuters) - Bank of New York Mellon Corp (BK.N: Quote, Profile, Research, Stock Buzz) said on Thursday that second-quarter profit fell 57 percent, hurt by a charge related to a court ruling over the taxation of leveraged lease transactions.

In the fourth quarter since the merger of Bank of New York Co with Mellon Financial Corp created the world's largest trust bank, profit totaled $309 million, or 27 cents per share. A year earlier, earnings were $720 million for the combined banks and $445 million for Bank of New York alone.

Results included a charge of $380 million, or 33 cents per share, related to leveraged leases, following an April court ruling involving North Carolina's BB&T Corp (BBT.N: Quote, Profile, Research, Stock Buzz).

...more...

[UpInArms]

28. Sovereign funds cutting exposure to dollar-FT

http://www.reuters.com/article/bondsNews/idUSSYD21200520080717?sp=true

SYDNEY, July 17 (Reuters) - Some of the world's largest sovereign wealth funds are seeking to scale back their exposure to the U.S. dollar in a sign of global concern about the currency, the Financial Times reported on Thursday.

The report said a large sovereign fund in the Gulf had cut its dollar-denominated holdings from more than 80 percent a year ago to less than 60 percent, but gave no source.

The FT also said China's State Administration of Foreign Exchange (SAFE) had been looking to strike deals with private equity firms in Europe as a part of a plan to reduce its U.S. dollar holdings, citing people familiar with the matter.

The shift at China's SAFE, controlled by the central bank, was significant because it manages the bulk of the country's fast-growing foreign currency reserves.

The FT report said SAFE had been holding talks with Europe-based private equity firms about putting billions of dollars into their latest funds, precisely because these funds are not dollar-denominated.

By allocating money to Europe-based private equity firms, SAFE could diversify away from the dollar, at least at the margin, without unnerving the currency markets and driving the dollar down in a disorderly manner, said the FT.

...more...

[ozymandius]

29. Back this afternoon.

and good morning

:donut: :donut: :donut:

Please don't let the goobermint idiocracy sap your mirth. Today's news is full of it.

:hi:

[Pale Blue Dot]

32. Layoffs 7/17

I happy to report that with yesterday's rally, the crisis is now over and I won't need to keep this update going much longer. What a great country!

We start this morning with some irony:

Wall Street Journal - South Brunswick, NC - 50 jobs lost

Wall Street Journal managing editor Robert Thomson sent out the following e-mail on Wednesday to the paper’s staff:

Wall Street Journal“With the Journal’s new leadership team in place, we are reforming our editing structure and changing fundamentally the way in which we produce The Wall Street Journal in its manifold forms. The reasons for these changes are strategic, even if some of the benefits are economic.

“Beginning next month, the news hub in New York will be responsible for editing copy and producing pages across all our platforms –- in print, online and on mobile. The Global News, Global Copy, Global Pagination, Monitor and the standalone WSJ.com editing desks as we know them will cease to exist and most of the editorial operations in South Brunswick will be closed.

“We will be posting the new editing desk jobs no later than Friday and genuinely encourage all staffers affected by this announcement to apply for these openings in New York. About 50 positions will be lost, but staffers with the highest skill levels and the enthusiasm to acquire new skills will have a distinct advantage during the selection process. A detailed explanation of the new structure will be sent to you shortly
http://weblogs.jomc.unc.edu/talkingbiznews/?p=5186

Columbia Distributing Company - WA state - 933 potential job loses

All 933 Washington-based workers at a merging beverage distributor have received layoff notices, said a spokeswoman for Columbia Distributing Co. of Portland. But that doesn't necessarily mean they will all lose their jobs.

The notices were issued because Columbia is merging with two other companies -- Mt. Hood Beverage Co. and Gold River Distributing -- to form a new company, called CoHo Distributing.

Some layoffs will occur in the integration, which is slated to occur by early September, said Columbia spokeswoman Lindy Bartell. She said details on the number of layoffs may be available within several weeks.

"Columbia is no longer going to exist as a corporate entity, so those people will all be severed from the employer-employee relationship, and federal law requires they receive a layoff notice," said Bob Hughes, a program coordinator for Washington's Employment Security Department.
http://seattlepi.nwsource.com/business/371026_layoffsbrf09.html?source=mypi

Dana Corporation - Elizabethtown, KY - 260 jobs lost

ELIZABETHTOWN, Ky. (AP) - Hundreds of workers at a central Kentucky plant will be laid off as a result of a delay in Ford's launch of its new F-150 truck.

The Courier-Journal in Louisville reports that 260 workers who weld the pickup's frames at the Dana Corporation plant in Elizabethtown will be out of jobs by Sunday.

The layoff will leave one shift of 475 workers at the plant.
http://www.fox28.com/Global/story.asp?S=8687899

City of Hoboken, NJ - 95 jobs potentially lost

To get Hoboken back in the black, Hoboken Mayor David Roberts proposed yesterday trimming the city's workforce by a third, cutting services, increasing revenue, and possibly raising property taxes by 7 percent. Roberts presented his proposed spending plan for the fiscal year that began July 1 at a press conference yesterday morning and then again at last night's City Council meeting.

Already in a $10.5 million deficit for the new fiscal year, Hoboken cannot embark on a spending plan without approval from the state Department of Community Affairs, which assumed control of Hoboken's finances after the city failed to pass a 2008 budget.

But Roberts said he believes the city has to take the lead in laying out proposals to get its financial house in order.

Roberts' plan calls for the possible reduction of the city's 300-person municipal workforce by about 95 employees.
http://www.nj.com/news/jjournal/hoboken/index.ssf?/base/news-1/1216275970190590.xml&coll=3

City of Bradenton, FL - ?? jobs potentially lost

BRADENTON -- Layoffs are likely for city employees as Bradenton needs to account for a $2.7 million budget shortfall this year.

What's not clear is where layoffs will occur and how many jobs may be cut.

"There are some projected layoffs that will be coming," said Carl Callahan, city clerk and treasurer.

Callahan and Carolyn Moore, human resources director, declined to say what departments might be faced with layoffs or to what extent. At the start of the current budget year, last Oct. 1, there were 665 full- and part-time employees on the city payroll.
http://www.bradenton.com/699/story/744078.html

St. Peter Regional Treatment Center - St. Peter, MN - 132 jobs lost total

A notice of likely layoffs became reality this week for 32 employees at the St. Peter Regional Treatment Center.

Chuck Carlson, president of the AFSCME Local 404 union, said he was called back to work at 5 p.m. Monday so the layoff letters could be hand delivered to him. He issued the notices to employees Tuesday morning.

A total of 26 security counselor jobs were cut and six billing office jobs eliminated. At least some of the office jobs will be moved to St. Paul, but Carlson said no one knew those jobs were being eliminated until the letters were issued.

“We had people get layoff letters yesterday who, 48 hours ago, we didn’t even know they would be losing their jobs,” Carlson said Wednesday during a news conference in St. Peter’s Minnesota Square Park. “There was no way for me to prepare employees for this, to tell them what there options were, because we didn’t have time.”

Carlson estimated more than 100 more jobs will be eliminated by September. About 500 employees work at the two facilities.
http://www.mankatofreepress.com/local/local_story_198231725.html

The Honolulu Advertiser - Honolulu, HI - 54 jobs lost

The Honolulu Advertiser is cutting 54 jobs from its staff, the newspaper announced Wednesday evening.

The newspaper cited slow advertising revenues and Internet publishing trends, saying the paper is among others across the country to cut staff.

"We do not take this action lightly," Lee Webber, the paper's publisher, said in a statement. "The staff reduction is not a reflection on the quality of their work. They are our friends and colleagues and we will be sorry to lose their talent on our team."

Webber expressed confidence in the paper's long-term prospects.
http://www.kitv.com/news/16904166/detail.html

The Atlanta Journal-Constitution - Atlanta, GA - 200 jobs lost

ATLANTA (AP) — The Atlanta Journal-Constitution is cutting its staff by nearly 200 jobs and eliminating some targeted news sections.
Publisher John Mellott said Wednesday the moves are a cost-cutting effort in the face of dwindling advertising revenues and steadily increasing fuel and newsprint costs. Mellott said the job cuts will be mainly in news and advertising departments between August and October through voluntary buyouts and layoffs.
The cuts represent about 8 percent of the 2,300-member staff.
It’s the second downsizing in two years at Georgia’s largest newspaper. In February 2007, the Journal-Constitution announced it was offering contract buyouts to 80 newsroom employees and reducing its circulation area.
http://knoxvilletalks.com/2008/07/16/more-newspaper-job-cuts/

Mobile Dataforce - Boise, ID - 7 jobs lost

Proof that a slumping housing market affects industries throughout the economy, it was made public on Tuesday that Boise-based tech firm MobileDataforce had eliminated seven of its 38 employee positions. The company, which develops and sells software for a variety of hand-held devices, saw the 200 percent growth rate it had expected curtailed when clients in the housing-services industry (or “hard hats markets,” as CEO Kevin Benedict said) cut back on orders.

“When there’s a rapid growth curve and you see the economy change, you’ve just got to be smart,” he said. “We’re going to be watching that carefully.”

The company supplies a broad range of construction and housing-related industries with software that helps mobile workers keep track of invoices, perform inspections and handle work orders, among other solutions.
http://www.idahobusiness.net/archive.htm/2008/07/16/Sluggish-housing-industry-prompts-tech-firm-job-cuts

Campbell County School District - TN - 8 jobs potentially lost

LaFOLLETTE (WATE) -- Campbell County School Board members are facing a tough decision. They need to cut $450,000 from an already tight budget.

In order to do that, eight administrative positions may have to go.

Dr. Michael Martin, director of Campbell County Schools, says he's tried to avoid eliminating positions, but with not enough money to go around it seems to be the only solution.

"The first run of the budget reduction involved attrition, so we didn't lose anybody," said Dr. Martin. "But it was all out of the classroom, and we felt that was impossible to sustain the instructional program."

The positions Dr. Martin is recommending include:

* an assistant principal at Campbell County High School
* two guidance counselors
* a technology coordinator
* a weightlifting instructor
http://www.wate.com/global/story.asp?s=8681442

Placer County, CA - 8 jobs lost, 200 jobs unfilled

Workers get pink slips Monday, 200 other county posts left vacant

Placer County is laying off eight building department employees because of declining housing construction and decreased workloads for inspectors.

“We understand that this is very difficult for our employees and their families,” County Executive Officer Tom Miller said. “Coming to this decision was also very difficult, and we regret that it was necessary.”

The number of new-home building permits were issued has fallen from 974 in 2004-05 to 359 in 2007-08. Building department officials were notified Monday that eight people will be laid off and others will be asked to consider filling a different job with a lower salary.
http://www.granitebaypt.com/detail/88752.html

[Juneboarder]

44. I'm new to this and maybe just a little slow this morning, but...

were you being serious about the crisis being over and you not having to keep this updated for much longer? Just curious, because I feel like things are just starting to turn sour and we're going to see a lot more of this mess before it gets better.

[TalkingDog]

49. Ummm... stick around for a while. Optimism? What optimism?

Things have gotten so bad, we no longer feel the need to use the sarcasm smiley when we say anything approaching upbeat.

Welcome to DU. And welcome to the SMW.

If we were one of Snow White's dwarves, we'd be Foreboding.....



I think he's in here somewhere.

[skoalyman]

62. I Have Optimgloomism

:P cant be cured

[mmonk]

80. LOL. I was looking for the right word.

[AnneD]

90. Speak for yourself Talking Dog......

My dwarf name is Snarky....

[UpInArms]

51. I do believe our dear Finnfann

omitted that :sarcasm: thingie

(it was kind of obvious - but then we have become a dry bunch here)

:hi:

Hey - and welcome to DU and the SMW, Juneboarder!

[Pale Blue Dot]

57. I'm sorry. I have a very dry sense of humor.

I actually think we're in very, very bad shape, although outside of this thread I think we're still in the minority.

[Dr.Phool]

63. We may be in the minority,

But, we seem to have a much better clue than the majority.

[Juneboarder]

92. I totally agree with you...

Maybe it was the fact that I hadn't yet had my cup of Joe for the morning and still in a haze... I don't know. As for us being in the minority... I feel these last two to three weeks have been a big eye opener for our country. Although, my parents being as far right as possible, they still want to vote for McCain!! :( When will the brainwashing stop and people think for themselves?

I read a lot of your posts,Finn, along with Ozy and the other big posters here in the SMW and love to read all the thoughts and feedback. I truly like to see the layoff postings because DU is where I get a lot of my true info... Thanks so much for helping keep everyone informed!

May silver rise to $250/oz!

[Ghost Dog]

100. Well, you _did_ use the word 'irony' in the next sentence.

;(

[ozymandius]

151. My sense of humor is frequently scatalogical.

So I agree. We're in deep shit.

[UpInArms]

34. CIT loss expands after sale of home lending unit - $2.1 Billion in Charges

http://www.marketwatch.com/news/story/cit-loss-expands-after-sale/story.aspx?guid=%7B6D89D055%2D7CAA%2D4A3C%2D908D%2DC45A86B32D3F%7D&dist=msr_1

SAN FRANCISCO (MarketWatch) -- CIT Group on Thursday said its second-quarter loss ballooned as it took $2.1 billion in charges to exit the battered home lending market.

CIT (CIT: 7.76, +0.53, +7.3%) , a large commercial finance firm, reported a second-quarter loss of $2.08 billion, or $7.88 a share, from $257 million, or $1.35 a share in the year-ago period.

CIT has been hit hard by the credit crunch. The commercial-finance company agreed to sell its manufactured-housing portfolio and mortgage unit for a total of $1.8 billion earlier this month. See full story.

The sale hurt CIT Group's earnings and overshadowed the performance of its core commercial businesses, said Jeffrey Peek, chairman and CEO of CIT, in a press release. The sale, "has eliminated a major area of risk and uncertainty from our portfolio," Peek said.

...more...

[abelenkpe]

36. Tossed to the dogs

http://globaleconomicanalysis.blogspot.com/2008/07/tossed-to-dogs.html


Did you guys see this? What do you think? Why wouldn't all financial companies be on there? And will curbs succeed in propping up the market?

[Dr.Phool]

38. I noticed that most of the names on that list.

Are those banks that are rumored to be the owners of the Federal Reserve.

[UpInArms]

40. well, those "missing" are prolly going to be Fed controlled

Who Is Missing?

Where is Washington Mutual (WM)? Wachovia (WB)? Were they tossed to the dogs?

What about Corus Bank (CORS), Bank United (BKUNA), National City Corporation (NCC)?

It is beyond all belief that naked short selling is affecting Goldman Sachs (GS) more than Washington Mutual, Wachovia, Corus Bank, Bank United, and National City Corporation.

Is this a hint of the banks and brokers the Fed and SEC want to protect at all costs? Or is this some kind of setup play, an open invitation to short the others before the same stunt is pulled again.

The only problem I have with the latter kind of thinking is that it gives these bureaucrats credit for thinking and executing a plan. Of course whatever it is they are doing is going to blow sky high anyway because that is the nature of all such market manipulations.

and it would be a great opportunity for all those shorters out there to stick to the taxpayer one more time and in one more way :eyes:

[Dr.Phool]

41. Exactly!

[Tansy_Gold]

43. shruggers at work

Unfortunately, I don't find "shrug!" quite as satisfying an epithet as a nice, explosive "fuck!" but I think I'm going to start using the former more often.


They are out to destroy us, to leave us staring into the headlight of the oncoming train in the middle of total global ruination.

Instead of a resigned "Who is John Galt?" perhaps our slogan should be, "Remember Eddie Willers!"


Tansy Gold, wishing she had the time and patience to write a "sequel". . .

[Hugin]

47. Several years ago, during the dark ages of DU...

There was a horrendous flame war in GD (I think) when someone brought up Rand and Objectivism.

I must admit I was in the middle of the fray. It got to the point that several of the Mods and Admins became actively
involved. Very unusual, I might add. Total Internet Forum War... Darn, I wish I'd bookmarked it. But, the stone tools
we used in those days were kind of crude.

Anyhow, somewhere during this, someone (I think it was one of the Admins) posted a series of comics which were based on the final outcome of Rand's books and took the story to it's ultimate conclusion... We find out what happened to Eddie Willers or more precisely what Eddie Willers did with the Architects of this disaster, while the ruins of civilization burned in the background. In his defense, it was cold and he was hungry.

I'd like to hear your ending for it, tho. It's sure to beat the "Sopranos" ending Rand left us.

[Tansy_Gold]

55. Eddie Willers

What you need to remember, Prag, is that in a previous incarnation I was a romance novelist. To this day, I simply can't stand unsatisfactory (a.k.a. "happy") endings. All loose ends tied up.

Eddie, who was only in his 30s in Rand's novel, would in mine of course "grow up" to be a bearded, ranting Marxist. At first he would attempt to "rescue" Dagny and Taggart Transcontinental, but then he would recognize the futility.

One of the main devices of Rand's plot was Galt's generator. *IF* I ever wrote a sequel, I'd reveal Galt to be a phony, the generator to be an illusion on a scale of the Great Oz and the man behind the curtain. Rand's story only held together with heavy doses of science fiction; putting her economics back in the reality-based world would be fun. :evilgrin:

Maybe. . . . . someday. . . . .


Tansy Gold

[Hugin]

66. Ah, I'm closing in on one of them which was posted...

This flower seems to have a real axe to grind.

http://www.angryflower.com/objectiv.html

[Ghost Dog]

85. I'd also thought along those lines. The free energy generator is all that

(almost) makes the shruggers' mountain bolthole feasible without any real workers around, for sure. And I wondered about what happens to the 'crew' of 'third man' Ragnar Danneskjöld's pirate ship.

There is no TV mentioned in the novel, but press and radio play their role...

So I could imagine Eddie, in the face of the predicted violence and disorganised hopelessness left behind by the 'departed gods', simply 'getting out of the country' (something, strangely, viewed from a European pov, rare in US literature and cinema). Perhaps he heads over to Europe looking for the pirate ship. And he finds there not the distopian and economically-hopeless 'communist hell' the novel, via the media, describes, but instead a marvellously functioning proletarian post-revolutionary paradise (of the people by the people for the people) of progress and solidarity...

And it would turn out that it was the USA all along, far from being the only potentially-perfect free-market society/economy remaining in a world best described as 'the outer darkness', has in fact all along been the only one isolated, quarantined from the more advanced surrounding socialist world, eating its own entrails and its heart out.

Oh yes. To be able to find the long-term time and dedication and skill required to plot and write such a sequel...

:)

[Demeter]

93. That Sounds Like the US Today, In Fact

And if we aren't in quarantine, we ought to be.

[Tansy_Gold]

115. Too late to edit my earlier post, but now that I have some time. . . .

I meant to say that I dislike unsatisfactory -- a.k.a. UNhappy -- endings. I need to have the ends all tied up, the good guys win, the bad guys lose, and everyone lives happily ever after.

Back in Jan. 1968 when I first read Atlas Shrugged, I fell for the philosophy somewhat -- remember, I was only 19 years old and had been raised nominally republican in a totally non-political, non-intellectual environment -- but I recognized that it couldn't work in the real world for a variety of reasons.

First and foremost, of course, was the energy issue: without Galt's generator AND the "invisibility shield," the hole-in-the-wall valley redoubt was impossible. And without a safe haven, the destroyers couldn't operate. So this put the novel firmly into the science fiction category. (Somewhat similar to Max Ehrlich's "The Big Eye," which I had read in junior high.) That doesn't necessarily remove it from valid political commentary, but as a true blueprint for an economic policy, it's got major problems for implementation.

Second was the failure of Rand to recognize any truly human emotions. Greed, yes. Lust, yes. And both were given the Randian (pun intended!) stamp of approval. But there was no room for kindness or generosity, even though the human species requires it. The ten- or twelve-year human childhood requires that an adult be there to find the infant food and shelter and protect it from predators, and that can't be done out of sheer self-interest. Species-interest, yes, but Rand never recognized that. Her "Anti-dog-eat-dog rule" suggests quite explicitly that she would prefer "dog-eat-dog" and devil take the hindmost. That's not how a species with a twelve-year infancy survives. On the flip side, Rand dismissed jealousy as "the hallmark of the second-rater." This allowed Dagny to move from Francisco to Hank and from Hank to Galt without arousing any animosity between the three men who indeed remained best of friends, which in any real world wouldn't happen in a billion years. This kept her characters from achieving a three-dimensional reality -- but I think she wanted it that way.

Third was the absence of television. Published in 1957, the book was clearly written during a time when the power of television was at its most magical. That Rand ignored it -- or worse, denied it -- hinted at her inability to deal with reality. Supposedly it took her ten years to write the book, ten years in which television would have made its early appearance and then showed at least some of its potential. At least the medium wasn't a flash in the pan that would disappear by the time the book was published. This lack bothered me because of Rand's reliance on technology not only for the generator and the shield but also for the (atomic??) blast of Project X. A good writer doesn't leave holes like this in the plot.


I hadn't thought about the possibility of the rest of the Randian world being nothing but a figment of the destroyers' propaganda (although much of that propaganda came from the Wesley Mouches and Cuffy Meigses and James Taggarts), but given fictional concepts like the eternal war with Eastasia and the real-world propaganda we lived with through the cold war, Vietnam, etc., I think you make a very valid point. It makes me think of the story-within-a-story format of Atwood's "The Handmaid's Tale," in which Gilead (do I remember that correctly?) was actually the isolated fundamentalist empire surrounded by much more enlightened states who ultimately vanquished it and set the stage for the discovery of the handmaid's tapes. Atwood did it again, though I don't think quite as effectively, with Oryx and Crake -- which had one of those lady or the tiger endings that drive me up the shruggin' wall! ;-)


And that brings up the fourth problem I had back at my initial reading which was, in the words of the BF, "And then what happened?" Okay, Eddie is out there in the middle of Nebraska or wherever, there are bands of roaming brigands in covered wagons, but not everyone on the planet was killed by Project X. What happened with those who survived? How did the destroyers deal with them after they left the valley? That was one thing the writers got right with the film "Day After Tomorrow" or whatever the title was, the one about global warming and the sudden freeze and the kids surviving in NYC. (Why didn't they put that heavy oak furniture in the library fireplace instead of BOOKS fer goddessake???!!!) After the crisis was over and the kids survived, they found out there were other survivors, too, and that was logical (even if little else was!).

Years after reading Atlas Shrugged, I read Richard Matheson's "Bid Time Return," which would be filmed with Christopher Reeve and Jane Seymour as "Somewhere in Time." The book was better, much better. The time travel element of the plot hinged ultimately on the ability of character Richard Collier to maintain his total belief in actually BEING in the 1890s. He could allow nothing to alter his belief; belief became reality. Then reality intrudes in the form of a penny and Collier is plunged back into the present. AS A WRITER, I understood the necessity for keeping those pennies of reality out of the fictional world of the novel, ANY novel. The novel has to have its own universe, complete and inviolate.

What happened with Atlas Shrugged, however, was that Rand really wanted to transpose the world of the novel onto the real world, and it just didn't fit. Unfortunately, those who swallowed her kool-aid haven't had that 2008 penny pressed into their palms. . . . .. yet.

Sorry for this long-winded excursus, but my mind sometimes travels in these bizarre directions. . . .. .


Tansy Gold, who really ought to. . .. . ...

[Ghost Dog]

123. I only, finally, read the book last year (and from an already-forged critical pov).

It was a page-turner (although I did fast-scan or simply jump some of the randier, and some of the pure-propaganda sections). The Orwellian (not to mention Huxleyian) aspects leapt out at me.

Especially since so many, um, yanks, if you'll excuse me, appear to inhabit precisely such a false-fantasy bubble(-headed) coporate media-controlled brainwashing propaganda-reality where some kind of swarthy false-god-worshipping foreign 'enemy' appears to be the essential part of the plot.

My greatest, perhaps only hope for 'America' (ie. USA) is the freedom of speech. The highest priority, it seems to me, is to take back the (mainstream, majority) media for the people, of the people, by the people...

Ah yes, I meant to add: As you eloquently point out, without Love, we are nothing.

[Demeter]

162. I Think I'll Stick With Jane Austen

I'd like to be able to sleep at night.

[Hugin]

164. Wow... Excellent!

Another entry for your Journal Tansy_Gold. :)

[UpInArms]

60. Regulators probe Wachovia's auction-rate operations: report (one of the "missing")

03. Regulators probe Wachovia's auction-rate operations: report
11:50 AM ET, Jul 17, 2008

[ozymandius]

139. "Wachovia Securities failed to comply with information requests"

http://www.nytimes.com/reuters/business/business-wachovia-probe.html?_r=1&oref=slogin

KANSAS CITY, Missouri (Reuters) - Securities regulators from six U.S. states mounted a surprise inspection of the St. Louis headquarters of Wachovia Securities on Thursday as part of a probe into the firm's sales and marketing of auction-rate debt, Missouri officials said.

The office of Missouri Secretary of State Robin Carnahan said a team of 10 regulators went into the St. Louis headquarters of the securities firm seeking information about the Wachovia Corp affiliate's sales practices, internal evaluations of the auction-rate securities market and marketing strategies.

I hope Dr. Phool is not heavily invested in this bank.

[specimenfred1984]

46. Those are the EXACT same corporations that have been manipulating the markets

for the last 3 1/2 years. The Fascist States of America will now try to bail the criminals out with your money after they stole your money to begin with. It's the perfect end to the perfect crime as life goes on in "Britney Spears America".

[TalkingDog]

45. Yes, this is gossip. But is it true? Anybody have contacts?

In my email box this morning:

http://www.puredoxyk.com/index.php/2008/07/16/black-monday-2008-foreclosure-apocalypse/

"In a nutshell, what happened is that Monday morning, all the major mortgage banks in the U.S. issued some kind of order or decree, that they would cease conducting any kind of workouts or negotiations with borrowers, and instead foreclose on every home they could."


If it's not true, this person is being incredibly irresponsible.

If it is true...well, we already know the level of responsibility banks and mortgage lenders are capable of.

[TrogL]

48. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



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




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

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

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

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

2008-06-05 Thursday, June 5 0.980873 USD
2008-06-06 Friday, June 6 0.981643 USD
2008-06-09 Monday, June 9 0.978186 USD
2008-06-10 Tuesday, June 10 0.976467 USD
2008-06-11 Wednesday, June 11 0.983284 USD
2008-06-12 Thursday, June 12 0.977517 USD
2008-06-13 Friday, June 13 0.972573 USD
2008-06-16 Monday, June 16 0.979432 USD
2008-06-17 Tuesday, June 17 0.980296 USD
2008-06-18 Wednesday, June 18 0.98174 USD
2008-06-19 Thursday, June 19 0.987167 USD
2008-06-20 Friday, June 20 0.982994 USD
2008-06-23 Monday, June 23 0.984155 USD
2008-06-24 Tuesday, June 24 0.98668 USD
2008-06-25 Wednesday, June 25 0.986777 USD
2008-06-26 Thursday, June 26 0.988045 USD
2008-06-27 Friday, June 27 0.988142 USD
2008-06-30 Monday, June 30 0.981836 USD
2008-07-01 Tuesday, July 1 0.978474 USD
2008-07-02 Wednesday, July 2 0.987459 USD
2008-07-03 Thursday, July 3 0.980008 USD
2008-07-04 Friday, July 4 0.980008 USD
2008-07-07 Monday, July 7 0.982898 USD
2008-07-08 Tuesday, July 8 0.979912 USD
2008-07-09 Wednesday, July 9 0.989315 USD
2008-07-10 Thursday, July 10 0.989805 USD
2008-07-11 Friday, July 11 0.990786 USD
2008-07-14 Monday, July 14 0.994036 USD
2008-07-15 Tuesday, July 15 0.998502 USD
2008-07-16 Wednesday, July 16 0.998004 USD

Current values

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

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9993 1.0005 0.9980 1.0005 +0.0020 +0.20% 
CD.U08 Sep 2008 0.9979 1.0015 0.9972 0.9999 +0.0021 +0.21% 
CD.Z08 Dec 2008 0.9991 0.9991 0.9991 0.9991 +0.0019 +0.19% 
CD.H09 Mar 2009 0.9757 0.9757        0.9967 +0.0011 +0.11% 
CD.M09 Jun 2009 0.9880 0.9880 0.9880 0.9961 +0.0011 +0.11% 
CD.U09 Sep 2009 0.9865 0.9865 0.9865 0.9957 +0.0011 +0.11% 
CD.Z09 Dec 2009 0.9845 0.9845 0.9845 0.9953 +0.0011 +0.11%  

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

Market          Open    High    Low     Last    Change   Pct 
AUSTRALIAN $/CANADIAN $ (CME:ACD)
ACD.U08 Sep 2008 0.9676 0.9676 0.9676 0.9676 -0.0053 -0.55%  
EURO/BRITISH POUND (NYBOT:GB)
GB.U08.E Sep 2008 (E) 0.7928 0.7934 0.7928 0.7934 +0.0007 +0.09%    
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.U08.E Sep 2008 (E) 166.15 166.72 165.92 166.65 +1.93 +1.17%     
EURO/US$ (SMALL) (NYBOT:EO)
EO.U08.E Sep 2008 (E) 1.5792 1.5795 1.5782 1.5791 +0.0020 +0.13%    

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

The September Canadian dollar closed up 3 points at .9971 today. Prices closed near mid-range today. Bulls have the
near-term technical advantage. Bulls' next upside price objective is producing a close above solid chart resistance at this week's high of 1.0018.

Analysis

The loonie's continuing its run from last night and broke through par a little while ago. The Euro's making a nice comeback as well. Given worldwide jitters over bank failures to the point where we're having runs on banks right out of "It's a wonderful life" and no significant drop in the price of oil (I'm sorry, $5.00 out of $140 doesn't cut it) I believe (Yay, the X-files movie is coming) yet again that the loonie is going to be another safe haven for anybody who isn't a rabid Gold Bug (have I mentioned recently I hate Gold Bugs?).

I need sleep.

[UpInArms]

52. IMF looking for that moribund word

04. IMF: Fed, ECB don't need to hurry to hike rates
10:30 AM ET, Jul 17, 2008

05. IMF: Developing countries must focus on inflation risk
10:30 AM ET, Jul 17, 2008

06. IMF: G7, global growth to slow in second half of '08
10:30 AM ET, Jul 17, 2008

07. IMF report: Global economy in a 'tough spot'
10:30 AM ET, Jul 17, 2008

08. IMF: U.S. economy has nearly stalled but hasn't stalled yet
10:30 AM ET, Jul 17, 2008

[UpInArms]

53. Rising cost of living in US cuts into savings-survey (someone has "savings"?)

http://www.reuters.com/article/bondsNews/idUSN1744119020080717

NEW YORK, July 17 (Reuters) - A monthly measure of Americans' financial behaviors fell in June as the rising cost of living got in the way of consumers' intentions of saving, a survey by financial planning and services company First Command showed on Thursday.

The Financial Behaviors Index, designed to measure behaviors, intentions and attitudes of middle-class American consumers, fell to 88 in June from a high of 117 in March and compared to February's 100 baseline measure.

The June figure was the first public measure of the index, for which the survey is taken monthly and announced quarterly.

Consumers' behaviors shifted drastically in the second quarter, said Marty Durbin, president of First Command Financial Services. He noted that the positive sentiment following the March announcement of tax rebate checks, which are part of the government's stimulus package, was washed away by price hikes in gasoline and food.

"(In the first quarter) people felt pretty good, they put money into savings, possibly paid down some debt, but then gas prices went up, groceries went up, and all of a sudden those behaviors have taken a pretty radical shift," he said.

The behaviors component of the index, linked to savings, investing and debt payment in the previous month, fell to 73 in June from a high of 125 in March. Intentions, attached to the outlook for the coming month, fell to 88 from March's 125, and attitudes, related to confidence in the near- and long-term financial situation, was at 103 in June and has been basically unchanged in the five-month old survey.

...more...

[radfringe]

54. INDYMAC checks not worth paper they are written on????

Banks reportedly not taking IndyMac checks
Finally able to withdraw their money, customers can’t open new accounts
updated 1 hour, 2 minutes ago
http://www.msnbc.msn.com/id/25719584/

LOS ANGELES - The frustration didn't end for some IndyMac customers when they finally were able to withdraw their funds from the failing Southern California bank seized last week by federal regulators.

Some people have run into more problems when they tried to deposit IndyMac cashier checks at other banks.

Sheryl MacPhee said she waited in line two hours Tuesday at an IndyMac branch in San Marino to liquidate a certificate of deposit. But when she took it to a Washington Mutual branch in South Pasadena to deposit, she said a manager told her their new policy was not to accept IndyMac checks. If the customer insisted, she said she was told, it could take eight weeks or more to access the full amount.

"Sure, IndyMac will give you a check," MacPhee told the Los Angeles Times, "but what good is it if no other institution will accept it?"

WaMu spokeswoman Olivia Riley said her bank is accepting IndyMac checks, "but depending on the specifics, funds will be subject to an extended hold period."

---snip---

Wells Fargo is placing holds of up to nine business days on many IndyMac checks. That hold policy applies to checks from other banks, just not as often as those from IndyMac, Wells Fargo spokeswoman Mary Trigg said. Her company is concerned that "people could be taking advantage of this situation by creating fraudulent checks," Trigg said.

[Dr.Phool]

56. Took an IndyMac check to WaMu?

:rofl: :rofl: :rofl:

I don't think anyone will be taking WaMu checks next week!

However, I did cash a Wachovia check (one of my accounts) at Wachovia yesterday, and it cleared. I guess that's a good thing.

[skoalyman]

64. I learned key bank wouldnt take a fed tax check

I dunno why I had an account there even though it was over drawn they said I'd have to go somewhere to cash it then come back and pay what I owed I told the cashier I'll find another bank.

[grasswire]

97. that's nuts

You can even take a tax check to Wal-Mart or Safeway for cashing. And a bank won't cash it? Ridiculous.

[antigop]

67. Precisely why I started a thread yesterday on the economy forum(Updated)

I think I will get some gift cards to local grocery stores with a pharmacy just as a backup if I don't have access to cash. I'll need some way to pay for medications.

<edit to add> This is my fear if my bank gets taken over by the FDIC --they'll cut you a check, but that check won't be held for a while at other institutions.

<second edit> Also, remember the FDIC is hiring people to "gear up". If the new hires aren't necessarily experienced, it may take a while for the FDIC to do the takeover. IndyMac was taken over a weekend. There is no guarantee future takeovers will proceed as quickly.

[Hugin]

69. I was discussing this with some...

'Children of the Depression' last weekend.

They were suggesting to me, having some cash on hand to last at least a week or so.

I agreed.

[antigop]

71. Yep, but you have to make sure you actually have it on hand and don't spend it.

It needs to be tucked away somewhere where you don't touch it.

[Hugin]

78. No worries.

I've got it in my Al Gore approved "Lock-box"(tm).

[antigop]

74. One week of cash on hand may not be enough

According to that article, the holds are for more than a week.

[Hugin]

79. Well... I have somewhat more than a week's worth.

Try to keep in mind, I'm a tremendous cheapskate thriftmonger.


But, it's enough to cover new shoes should Baby desire them. What Baby wants, Baby gets. ;)

[AnneD]

101. I too....

have a Al Gore approved combination lock box.....affectionitally known as AnnD's personal ATM machine. Here's how it works:

Every payday I withdraw cash to cover cash purchases like food (includes eating out so this is my biggest expense), gas, entertainment, personal (manipedis and haircuts), laundry, clothing, car repair and maintenance, even blow money. I have a certain amount I put in these envelopes every month. I may not use every envelope every month, but I place a certain amount in (that is budgeting). My fixed expenses are paid by check. I also draw out some extra to go into AnneD's personal ATM-and I don't touch that without putting it back. Over time, I have accumulated enough in my personal ATM to get me through a month, in addition to my emergency fund at the bank.

In a true emergency, I would not need to purchase groceries (I have a well stocked pantry), and could cut back to the most minimum of expenses. We are use to preparing for hurricane interruptions so a bank run would fall into that category, providing FDIC held up. I know there is always worries about theft but we try to take precautions and lead a quit life. We don't flash what we have and just carry around what we need. Hubby has simple wants and needs and I budget for mine. We may live simply but we have been really moving ahead financially-even in these trying times.

[Ghost Dog]

105. Ah, the envelope method. That's a classic

over here too (based on listening to my parents and reading literary sources on post-war/apocalypse times).

Very good, AnneD, and a great aid to self-discipline.

[AnneD]

114. It is the most painless way...

to do a budget that I know of.

[Ghost Dog]

104. A lot of contemporary 'western' problems

may have to do with 'spoiling the kids'? (Not to mention, expensive women...).

[Renew Deal]

88. She's going from one disaster to another.

Washington Mutual is in bad shape.

[Ghost Dog]

103. A check is not cash. Period. n/t

[Demeter]

129. Just Heard on All Things Considered

that there was an investigation of banks who refused to honor CASHIERS CHECKS (!) from Indy Mac.

Sounds like a serious NO-NO to me!

Those receiving banks oughten to get too snooty, now. They could be next.


Also, WaMu is supposed to be in Much Better shape than Indy Mac because it is a "retail" bank with hundreds of local branches and loyal, staid customers, unlike the high-interest chasing, Hot money depositors at Indy Mac, who would flit in an instant for another basis point...


Even NPR is full of spin.

[UpInArms]

70. UBS to close Swiss-based services for U.S. clients: report - Isn't that Phil Gramm's bank????

05. UBS to close Swiss-based services for U.S. clients: report
1:03 PM ET, Jul 17, 2008

07. International banks vow to clean up their act
1:00 PM ET, Jul 17, 2008

Worms never clean up their act, they just go and dig a new hole.

:eyes:

[antigop]

72. yeah, where will he surface next? n/t

[antigop]

75. Marie Cocco: The House that Gramm Built

http://www.truthdig.com/report/item/20080714_the_house_that_gramm_built/?ln

The big trouble roiling the financial markets and the impending federal bailout of mortgage giants Fannie Mae and Freddie Mac offer voters the sort of incomprehensible mess they hope the next president will make more orderly and less costly to taxpayers. Not a chance.

The seeds of the meltdown were sown over decades, and there is no way to avoid reaping the harvest now. The public may not trust John McCain to fix things—he famously admitted once that he doesn’t know much about the economy. But Barack Obama offers an economic résumé at least as thin, having spent only short time in the Senate before running for president.

Of all people, the person we should be paying attention to is Phil Gramm. The former Texas senator, a close friend and campaign adviser to McCain, made a fair mess of things politically last week when he declared that the state of the economy really isn’t so bad. It’s just that Americans are in a “mental recession,” and we’ve become a “nation of whiners” with unceasing complaints.

Why should we listen to this guy’s poppycock? Because Gramm is the embodiment of the economic philosophies and misguided policies—embraced by Republicans and far too often by Democrats—that have gotten us precisely where we are today.

He has espoused, promoted and written into law economic policies based on the simplistic arguments that cutting taxes and deregulating huge industries (especially the financial industry) are the keys to making magical markets work. And if this turns out to be voodoo, the blame is to be shifted either to big-spending Democrats or to the great mass of American “whiners.”

Nice to see people are writing about him.

[UpInArms]

76. more info

NEW YORK (MarketWatch) -- An executive of UBS (UBS) told a U.S. Senate panel that his company will close its Swiss-based private-banking services for U.S. clients, according to a report Thursday in The Wall Street Journal's online edition. The article quoted Mark Branson, chief financial officer of UBS Global Wealth Management and Business Banking, as saying, "That means UBS will no longer provide offshore banking or securities services to U.S. residents through our bank branches."

http://www.marketwatch.com/news/story/ubs-close-swiss-based-services-us/story.aspx?guid=%7B5FB0AF87%2D2EDB%2D4AD7%2DB1B8%2D16ADEF235E6A%7D&dist=msr_1

[Hugin]

81. Oh, I'm sure exceptions will be made.

If the price is right.

The haves will just have to suffer through, and the have-mores will likely be glad to have their money
away from those types.

[Ghost Dog]

108. UBS had obviously become more-than-normally corrupted.

US clients of Swiss and (the many other jurisdictions') other 'offshore' banks, given US laws and their application, should always have been treated very warily, and required, at the very least, to sign some sort of affidavit or disclaimer assuring the foreign bank that everything that should be declared would be declared to US tax authorities.

Ireland and the UK itself (not just its colonies and islands), BTW, tend to be viewed as secretive offshore tax-havens to those domiciled in other parts of the world...

[TheWatcher]

83. It appears Another round of "Hide The Meltdown" is in progress today.

On Fairy Tale days like these, you can really find some good humor.

For instance: the front page of Yahoo Finance, that bastion of economic intellect second only to that of CNBC, screams to hopeful sheep:

Stocks Trade Higher on Upbeat Earnings Results

So let me get this straight, JPM profits fall by 53%, half a billion of their losses due to Bear Stearns, Coca-Cola Profits drop 23%, Wachovia gets a little visit from regulators, Continental posts 2nd quarter loss because of fuel costs (Further evidence of the continued Spiral Into The Abyss by the Airlines), Another HORRIBLE Philadelphia Fed report.

THIS IS UPBEAT?

Did Goebbels rise from the Grave and get a job with Yahoo, or do they have Bagdad Bob working for them now?

:rofl:

Yes, America, The Economy is SAVED! Get thee to a Hooters and get 10 plates of wings and cheap beer in celebration of our nation's new road to prosperity! USA! USA! :rofl:

Big money got a heavy hand
Big money take control
Big money got a mean streak
Big money got no soul...

[ozymandius]

86. The jangling cacophony of bad reports and haldol-soaked stock numbers burn my brain. n/t

[skoalyman]

106. I call the people on CNBC a ghost crew they don't have a brain

:+

[Ghost Dog]

112. US faces global funding crisis, warns Merrill Lynch

Merrill Lynch has warned that the United States could face a foreign "financing crisis" within months as the full consequences of the Fannie Mae and Freddie Mac mortgage debacle spread through the world.

The country depends on Asian, Russian and Middle Eastern investors to fund much of its $700bn (£350bn) current account deficit, leaving it far more vulnerable to a collapse of confidence than Japan in the early 1990s after the Nikkei bubble burst. Britain and other Anglo-Saxon deficit states could face a similar retreat by foreign investors.

"Japan was able to cut its interest rates to zero," said Alex Patelis, Merrill's head of international economics.

"It would be very difficult for the US to do this. Foreigners will not be willing to supply the capital. Nobody knows where the limit lies."

Brian Bethune, chief financial economist at Global Insight, said the US Treasury had two or three days to put real money behind its rescue plan for Fannie and Freddie or face a dangerous crisis that could spiral out of control.
advertisement

"This is not the time for policy-makers to underestimate, once again, the systemic risks to the financial system and the huge damage this would impose on the economy. Bold, aggressive action is needed, and needed now," he said.

/... http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/16/ccusdebt116.xml&CMP=ILC-mostviewedbox

Sorry, Ozy :(

[Zynx]

89. I hate how no one here on this board ever demonstrates perspective in either direction.

Even if you combine the last two days of rallies on the back of much better than expected bank earnings, the market in general and the bank stocks in particular are still down mammoth amounts from their all time highs. As for JP Morgan rallying on a decline in earnings or PNC or Wells Fargo doing the same, much has to do with the fact the stocks have declined so much that if the earnings are not down as much as people expect, the stocks will rally to reflect that.

Let me use the example of a $100 stock with $10 in earnings. If the market suddenly expects the stock to earn $5 a share, the stock could quite reasonably fall to $50. However, if the company reports earnings of $6.50 a share instead, the stock could quite reasonably rally to $65 using the same PE ratio, even though it still reported a 35% decline in earnings.

[ozone_man]

116. The trouble with P/E ratios

is that they aren't real. They are calculated based on profits that will likely disappear once the bubble economy pops. Some P/E's might look good now, but in another quarter or two might look awful or negative.

I think it's just a counter trend rally. It was deeply oversold on a short term basis and needed to work off some of that before the downward trend resumes. It's much more to do with psychology than P/E's in my opinion. Eventually, it will be dependent on P/E's when the bubble finally deflates. But, before that can happen we have to get rid of the bubble mentality keeping the market up. Too much hope out there still.

[tismyself]

121. thanks!

I am really glad to see you write the p/e ratios aren't real. I fiddle with the stock market (a teeny portfolio that's based on nothing but gut & intuition) but my friends who are really into it often do not make a lot of sense to me with the way they explain things like p/e ratios etc. I've been thinking it was just me.

[TheWatcher]

117. Yes Zynx, we know, everything is fine and there is nothing to see.

People like me are stupid, naive, and know nothing about the economy. It's always wonderful to see you sternly put all of us rubes back in our place. I bow to your Godlike power of perception. :rofl: Because Perception is about the only thing holding this House Of Cards aloft right now

As far as the stunning Earnings report, how could they help but beat expectations when the bar was set so artificially low for them?

This rally is so full of BS. But hey, what do I know? After all they saved the system six months ago with their parade of Rate Cuts, Stimulus checks, and the wholesale of bear Stearns to said JPM.

And everything worked out GREAT! The Banking system is "basically sound", and the Worst is behind us!

Oh, Wait....

[ozymandius]

132. Even with a 3.9% return on investment and P/E ratio of 8.4 I still say

they are a rotten investment. BTW - these figures are prior to their acquisition of Bear Stearns that chunk of lead.

[Juneboarder]

95. I don't know...

those 10 plates of wings and cheap beer from Hooters sure does sound good right about now :9

[TheWatcher]

118. Be sure you get the Nuclear Wings.

To properly celebrate the Economic Meltdown to come. :)

[Tandalayo_Scheisskopf]

102. Oil just busted support at 130

It is now down to 129.59. Gas down .12. Heating oil about .09. Grains broadly and considerably lower. Oil STILL moving downward. .03 off going through 129.

What's going on? Levin/UBS? Have they finally gotten religion?

[Ghost Dog]

110. Shit. Now I gotta sell the OIL COMPANY shares? When did they leave me outta da loop?

C'mon, guys, I was only jokin' :crazy:

[Ghost Dog]

120. Don't ask for the moon, but have we any stars?

* Nils Pratley
* The Guardian,
* Wednesday July 16, 2008

Spot the piece of good news in this list. Spain yesterday had its biggest bankruptcy as property firm Martinsa Fadesa went to the wall. Shares in Fortis fell 15% as Belgium's biggest bank was forced to deny it faced a run by savers. Business confidence in Germany hit at all-time low, according to the influential ZEW survey.

The share prices of Fannie Mae and Freddie Mac, the US government-sponsored mortgage lenders, continued to slide. The dollar hit a new low against the euro. In Britain, inflation soared beyond economists' expectations, and food prices are up 10% on a year ago. The price of oil hit $136 a barrel.

Can't guess? It's the oil price - $136 represents progress since the last week's price was $145 a barrel. Not convinced? Well, yesterday's falling oil price was enough to reverse a slide in share prices on Wall Street that looked very ugly at one point.

Can the oil price really be that important? In one sense, yes. It offers the best escape from the current mess. The theory goes like this: when the price of commodities starts to fall, the inflationary outlook will reverse. In the UK, the Bank of England can start to cut interest rates again, and over-borrowed householders can begin to pay off their debts. The banks won't suffer so many defaults. Their capital ratios will improve as the cost of borrowing falls, and the economy can avoid the rocks. The dollar - which currently seems tied to the oil price - will live to fight another day. We will have suffered an awfully big fright, but catastrophe will be averted.

That is the theory. And spotting the peak in the oil price is the favourite game of investors looking for value in current stock markets. Their hope is that the peak in inflation will be reached by the end of this year, possibly even by the autumn.

It is a perfectly reasonable argument, but it does hinge on two things happening. First, the price of oil has to continue to fall. It would be a bit dumb to read too much into one day's movement. Second, the knock-on effects of last year's commodity inflation must be modest if central banks are to feel they have the freedom to cut rate cuts soon.

There are encouraging signs. The increase in wages in the UK has been kept under 4% so far. There is no evidence that the workers have been able to bargain up the price of their labour to meet their higher food and energy costs. Inflation does not - at least, yet - appear to have become ingrained in the system.

But there is another way in which life could get more difficult.

Look at that summary of yesterday's news again. The crisis in the financial and property sectors is clearly not over. Royal Bank of Scotland, flush with £12bn of shareholders' cash, yesterday traded 20% below its rights issue price. As the largest foreign bank in the US, it is feeling the effect of the loss on confidence in Fannie Mae and Freddie Mac. Investors see that a sticking plaster has been applied to those two institutions, but nothing more. Until that situation is resolved, it is too easy to imagine another 10% lurch downwards for stock markets.

The bottom line: the moment to buy shares again is surely getting close, but the stars are not yet aligned.

/.. http://www.guardian.co.uk/business/2008/jul/16/2

[ozymandius]

150. Bottom line: the EU cannot build a partition between it and the US quickly enough.

Though, there are more issues in this story than one can point to with a dozen fingers. The message is hope, forecast like a horoscope with its timing, but pragmatic. It spells out quite plainly that the EU has a solid interest in dropping commodity prices in the US. That aspect along shortens the influence of the Fed and US banking interests.

[AnneD]

107. Yahoo: Ichan takeover bid 'smoke and mirrors'

Yahoo! Inc., the Internet company fighting Carl Icahn for control of its board, called a breakup proposal from the billionaire investor and former suitor Microsoft Corp. "smoke and mirrors."

The board is open to a full takeover of the company at $33 a share and would examine a transaction for the search business alone "as long as it provides real value to our stockholders," Yahoo said today in a letter to investors. Yahoo rejected the latest offer less than a week ago.

Yahoo said the board is working on investors' behalf, forming a search-advertising partnership with larger Google Inc. and exploring other ways to boost the company's value, signaling a possible sale of its Asian assets. Yahoo Chief Executive Officer Jerry Yang has two weeks to get shareholders on his side or face an ousting by Icahn at the annual meeting on Aug. 1.

"You cannot count on Microsoft to bail out Mr. Icahn's misguided agenda," Yang and Chairman Roy Bostock said in the letter.

Yahoo climbed 92 cents, or 4.1 percent, to $23.40 at 9:39 a.m. New York time in Nasdaq Stock Market trading. Microsoft, based in Redmond, Wash., advanced 45 cents to $27.71. The software maker, the world's largest, is scheduled to report results today after the market closes.

more.......

www.chron.com/disp/story.mpl/business/5892821.html

OK, I hate Carl Icahn (and the same goes for Boone Pickens and Jack Welch). I personally think he is a wart on the ass of humanity and an STD of the business world. I liken him to a burglar that has cased out a home in the wealthy area of town. He wants to rob it but he doesn't have the tools. So he goes to a bank and asks for a loans to buy burglary tools. When the bank asks him what he has for collateral for the loan-he offers a cut of the money he gets for the fenced stolen property. The bank gives him the money to commit the crime. The good, strong company I worked for fell victim to this crap because our leaders were spineless. Wish Yahoo the best on this one.

[AnneD]

109. Business: Loren Steffy

The folks in the Los Angeles area who waited all day to withdraw their money from IndyMac Bank, which failed over the weekend, are lined up behind the wrong set of worries.

Deposits at IndyMac, which became the second-biggest bank seized by federal regulators, were insured up to $100,000.

The rest of the banking system may not be so secure.

Treasury Secretary Henry Paulson threw a news conference Sunday to try to convince the markets that the two biggest mortgage holders in the U.S., Fannie Mae and Freddie Mac, were sound despite swirling fears about their stability.

much more.......

www.chron.com/disp/story.mpl/business/steffy/5890142.html


A worthwhile read. Steffy is one of the best business writers here at the Chronicle. He is frequently spot on. Enjoy.

[AnneD]

113. Witness tells how US taxes evaded abroad

WASHINGTON — A man wanted by Liechtenstein for leaking secret banking information that identified millionaire tax cheats across Europe and the United States has described to congressional investigators how money was concealed.

Lawmakers played a videotape of the testimony by Heinrich Kieber at a congressional hearing Thursday that revealed rare details of offshore practices at two European banks. At the hearing, Swiss banking giant, UBS AG, announced that because of recent revelations, it will stop offering U.S. clients offshore services through branches based abroad.

Kieber appeared only as a silhouette against a white screen with eyeglasses and a balding head apparent. Kieber is living under a new name in an undisclosed witness protection program, according to lawmakers. He has never spoken publicly about his role in exposing tax shelters he says were used by Liechtenstein's LGT group.

In the videotaped interview with the congressional investigators, he described ruses that he saw while working at the bank, which he said were used to cover the tracks of money moved into accounts.

more........

www.chron.com/disp/story.mpl/ap/business/5893480.html

I know this is posted else where on DU but I didn't want you guys to miss it. The guy that is the whistle blower stands to make a fortune from reporting this-and he deserves every penny. I can't wait to see who is on THIS list. Colour me happy.

[Tansy_Gold]

124. Okay, color me naive and stupid and I didn't read the article. . . ..

but if I were a U.S. bazillionaire with $$$ to hide, why wouldn't I establish a French or Swiss or Lichtensteinian company, launder the money through there, and THEN put the money in the Swiss or Lichtensteinian bank, thus erasing all trace of connection to the U.S.?


Tansy Gold, who has been to Luxembourg but not Lichtenstein

[AnneD]

130. This guy can name names....

and knows how they laundered the money for these folks. He's a Rosetta Stone for the IRS. He is wanted on criminal charges in Lichtenstein (their major source of income is derived from developing tax shelters). He can trace the connection back to the US.

[Tansy_Gold]

136. Okay, that makes sense. n/t

.

[Demeter]

131. Ignorance, Laziness and Bad Advice

Typical Bushbot failures.

[ozymandius]

134. Rich doesn't negate stupid.

You're just smarter than these rubes who took the money and ran to Lichtenstein, Tansy_Gold.

[ozymandius]

133. Names! I want names. Who among our elected representatives, past and present, are on this list?!?

Who among those on this panel revealed flop sweat?

[AnneD]

137. "That, my dear Ozy,

is the real question"....she said in her best Basil Rathbone impersonation."And it should be most illuminating to know what other Captians of Industry had dealings with Lichtenstein."}(

[Tandalayo_Scheisskopf]

158. Well, ahem...

Notice Phil Gramm is no longer with the McNasty campaign? Hmmm?

[ozymandius]

135. Closing: has anyone else noticed the trading volume leaving 5billion in the dust lately?

Who is buying these enormous blocks of shares?

Dow 11,446.66 Up 207.38 (1.85%)
Nasdaq 2,312.30 Up 27.45 (1.20%)
S&P 500 1,260.32 Up 14.96 (1.20%)
10-Yr Bond 4.038% Up 0.104
NYSE Volume 7,441,283,000
Nasdaq Volume 2,653,712,750

4:15 pm : Stocks had another strong finish Thursday as all three of the major indices finished more than 1% higher. The Dow Jones Industrial Average had the best performance, finishing near its high with a 1.9% gain. Dow components JPMorgan Chase (JPM 40.80, +4.86) and United Technologies (UTX 64.70, -3.59) both reported better-than-expected earnings per share results. Coca-Cola (KO 50.34, -2.00) also reported strong results, but its shares were shunned.

Shares of JPM jumped to their highest level in roughly one month on the news as many investors returned to the financial sector. Financial stocks finished the session 6.5% higher, building on yesterday's surge. Still, financials remain almost 30% lower year-to-date. Nonetheless, their gain this session made for the second consecutive session in which financials outperformed the other sectors and, again, helped the broader market extend yesterday's gains.

Positive economic data also lent support to Thursday's advance. Housing starts for June increased 9.1% to an annualized rate of 1.066 million units, which is above the 960,000 consensus estimate. The lift in residential construction bodes well for overall economic activity.

Investors found further encouragement when jobless claims for the week ending July 12 indicated an increase of 18,000 to 366,000 since the total was below the consensus expectation for 380,000 claims. The level of initial claims continues to reflect a steady trend. Importantly, though, it also refutes the idea that there has been a material deterioration in the job market.

Falling crude prices helped revive the optimistic mood among investors. Stocks had actually succumbed to selling pressure midday, but when crude dipped lower the stock market rallied. Crude shed roughly $5 to finish below $130 per barrel, its lowest level in more than one month.DJ30 +207.38 NASDAQ +27.45 NQ100 +0.5% R2K +1.4% SP400 +1.4% SP500 +14.96 NASDAQ Adv/Vol/Dec 1929/2.61 bln/906 NYSE Adv/Vol/Dec 2360/1.96 bln/833

[AnneD]

140. "Yes, Dr. Ozy......"

Just who, or shall I say whom, is behind such a deed. Who would benefits the most? It's elementary, my dear Ozy."

[Demeter]

143. Maybe It's a Kiting Scheme

Mogul A sells to Mogul B, then B to A, and voila! Huge swings, sucker rally, cash out. Another day's piracy successfully completed.

[ozymandius]

146. Exactly.

Enron traded with itself. Now that's illegal. Today, companies find a way around the new rules.

[ozymandius]

144. I realize in retrospect the node of the thought was rhetorical.

Anyone who has been paying attention knows how many arms have an interest in these things. Even the publicly traded companies themselves are culpable. JP Morgan's capitalization has almost doubled in two years. Who made that happen in such a hostile banking environment? Again, a rhetorical question.

[UpInArms]

145. here's a closing from the SMW Thursday 29 September 2005

and you need to see the volume to really appreciated today's numbers of

NYSE Volume 7,441,283,000
Nasdaq Volume 2,653,712,750

Dow 10,552.78 +79.69 (+0.76%)
Nasdaq 2,141.22 +25.82 (+1.22%)
S&P 500 1,227.68 +10.79 (+0.89%)
10-Yr Bond 4.289 +0.27 (+0.63%)

NYSE Volume 2,159,075,000
Nasdaq Volume 1,832,012,000

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=1814069&mesg_id=1815730

[ozymandius]

148. Jeebus! I knew that de-sensitization had occurred.

But not appreciable to this degree. What you've shown here UIA is the scale to which markets have been leveraged. Absolutely stunning in its nakedness.

[DemReadingDU]

155. wow!

:wow:

[Ghost Dog]

159. It says there all-but 7½: ¿A record? n/t

[UpInArms]

147. After the Bell: Merrill Lynch Posts Fourth Straight Quarterly Loss (a whopping $4.6 Billion)

http://www.bloomberg.com/apps/news?pid=20601103&sid=a0d1NVxTbAOc&refer=news

July 17 (Bloomberg) -- Merrill Lynch & Co., the third- biggest U.S. securities firm, reported a wider-than-forecast quarterly loss as the credit contraction saddled the company with $9.7 billion of writedowns.

Moody's Investors Service cut Merrill's credit rating and the firm's shares fell after it posted the second-quarter net loss of $4.65 billion, or $4.97 a share. The results, which compared with earnings of $2.14 billion a year earlier, were worse than the most pessimistic analyst forecast in a survey by Bloomberg.

Chief Executive Officer John Thain cut about 4,200 jobs in the first half of the year and is divesting assets to stem record losses and a 43 percent drop in Merrill's share price during 2008. The company said it completed a $4.43 billion sale of its stake in Bloomberg LP and plans to sell a controlling interest in Financial Data Services Inc. Merrill's charges from the credit crisis now exceed $46 billion.

The quarterly loss was ``inexplicably larger than what people expected,'' Michael Holland, chairman of Holland & Co., which oversees more than $4 billion, said in a Bloomberg Television interview.

Merrill shares fell as much as 7 percent after the close of regular trading in New York, after gaining almost 10 percent today. Analysts at Citigroup Inc., Oppenheimer & Co. and Wachovia Corp. had predicted the firm would book at least $5 billion of writedowns in the quarter.

...more...

[ozymandius]

149. *cough* *cough* *cough*

Trading after hours is frequently volatile and irrational. Dismiss that. Timing this release to this hour is calculated. Weigh that - even if nobody else does.

[DemReadingDU]

154. I figured there was a reason that the market has blown skyward

Somebody wanted to make sure the market was high to sell their stocks before the market headed back down again.

[AnneD]

156. Please make sure you trays....

are upright and locked and that your seat belts are secured. Please turn off all electronic devices..........looks like a bumpy ride tomorrow.

I just can't get over those volume numbers:wow:

[Ghost Dog]

160. Sayonara, compañera.

:smoke:

Edit to add my probably all-time favourite poem/song/performance (amongst many others, of course): http://www.youtube.com/watch?v=C7Zsb0Y8Tpg

Food for thought.

[Demeter]

163. How Many Actual, Physical Shares Of Publicly Traded Companies

actually exist in the world? No where near that many, I'll betcha!