STOCK MARKET WATCH, Wednesday July 30

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday July 30, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 175
DAYS SINCE DEMOCRACY DIED (12/12/00) 2747 DAYS
WHERE'S OSAMA BIN-LADEN? 2472 DAYS
DAYS SINCE ENRON COLLAPSE = 2763
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 29, 2008

Dow... 11,397.56 +266.48 (+2.39%)
Nasdaq... 2,319.62 +55.40 (+2.45%)
S&P 500... 1,263.20 +28.83 (+2.34%)
Gold future... 926.40 -11.40 (-1.23%)
30-Year Bond 4.62% +0.01 (+0.17%)
10-Yr Bond... 4.04% +0.03 (+0.65%)






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: Assessing the Calm

BY FRANK BARBERA, CMT

The last few weeks have been quite interesting, as corrections always reveal a great deal about the character of a market. In the case of the US Stock Market, since mid-July prices have generally been on the rebound with the deeply oversold financials finding some short covering price support. Of course, this has hardly been a one-way street, as in just the last few days, stock prices have gyrated wildly, selling off and then rebounding once again today. Yet, for the stock market, we have encountered a period of stability, which has allowed other markets to find some price support.

.....

Once Oil prices conclude the current downside leg, another rally back up across the range should follow with prices ultimately moving into a routine consolidation. This type of high-level consolidation would normally entail prices creating a large and extended trading range, with prices see-sawing back and forth in a sideways motion for some time. Of course, any major global disruption, such as the outbreak of more war in the Middle East, or a major banking collapse in the US or the UK, could easily bring on a Dollar Crisis and that would likely push Oil prices to new highs very quickly. In that event, the chances are that any one of several super bullish outcomes would be in force and Crude Oil would very quickly press above $200. For now, it seems likely that the correction in Crude Oil is more than half way over, and that some type of more important low is either at hand, or should be seen within the next few days. Using something of an average of past turning points, roughly 130 days apart, we note that the middle of August -- August 12th -- could be a potential turning point date for Crude. On our hourly charts, USO which tracks Crude Oil has been ‘walking down’ the lower 200 hour Bollinger band for the bulk of the past two weeks. As prices have moved lower, what we call our Super Hourly RSI has moved down to approach oversold values, but to this point, has not yet reached a fully oversold reading. In circumstances like this, dramatic action is possible where prices spike down for a short time (a few hours), become oversold and then reverse higher seemingly as if nothing had ever happened.

.....

In our view, there is a good chance that for most commodities, an important peak may have been seen, translating into at least a medium term plateau. This plateau is a reflection, more likely than not of the global economic contraction which is now taking place. In the case of the Base Metals, prices for items like Copper and Aluminum will likely soon follow the path already seen in the depressing metals line Nickel and Zinc. Industrial Metals, such as Steel and Iron Ore could also soon come under substantial selling pressure. Other formerly hot markets, such as the Coal market are also now leveling off. In the chart below, we show the price of nearby Copper which remains near all time highs but is sporting a very bearish divergence on MACD. From here, a decline back toward $2.00 Copper over a period of several months would be no surprise, as unlike Energy, base metals do not typically get a huge boost from a lower US Dollar.

.....

In quiet times like these, it is good to look for clues, and to that end, we end this week's update with a view of various interest rate curves. In this chart, we see early signs of a market beginning to factor in more monetary turmoil. In the chart, we plot the FNMA 30 year fixed rate mortgage on the top curve, followed below by the 10 year Bond yield (thick black line), the 2 year Yield (normal black line) and the Fed Funds Rate (bottom-thin line). What we see is that so far, despite a huge rate cutting cycle as reflected by the crash in Fed Funds, other rates are unaffected and have failed to move down. The FNMA Mortgage rate is actually right now fully unchanged, despite a dramatic assault on rates by the Federal Reserve. This is atypical action for any prior Fed easing cycle, with the 2 year rate now climbing back above the Fed Funds Rate. The market seems to be saying that the Fed is going to be monetizing a lot of the bad debt that is still in front of us within the course of this contraction.

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

[Demeter]

2. America’s human capital is tested By Clive Crook

http://www.ft.com/cms/s/0/b0263e5a-4b52-11dd-a490-000077b07658.html

A startling and profoundly important fact about the US economy has received surprisingly little attention. The educational quality of the country’s workers is starting to decline – not just relatively (because other countries are catching up and moving ahead) but also, for the first time, in absolute terms. Over the coming years, baby-boomers departing from the labour force will have better educational qualifications than the younger workers replacing them. If the ultimate source of an economy’s ability to grow and prosper is its human capital, the US is in trouble.

For decades the educational quality of the US labour force surged. In 1940, less than 5 per cent of the population aged 25-64 had at least a four-year college education. By 2000, the proportion had increased to nearly 30 per cent. Successive generations of workers improved on the educational attainments of their predecessors. Retiring workers were replaced by better-educated youngsters. This remorseless accumulation of human capital helped fuel the country’s postwar growth. According to at least one authoritative study, it was the principal driver. This trend came to a halt with workers now aged 55-59. Younger cohorts are no better educated than these soon-to-retire boomers. Broadly speaking, educational quality has topped out – and on at least one measure, it is actually deteriorating. In 2006, Americans aged 55-59 collectively possessed more masters degrees, professional degrees and doctorates than Americans aged 30-34. This impending loss of educational capital is entirely outside the country’s experience.

The numbers come from a recent study by Jacob Funk Kirkegaard of the Peterson Institute for International Economics: The Accelerating Decline in America’s High-Skilled Workforce: Implications for Immigration Policy. As the title suggests, Mr Kirkegaard is chiefly concerned with the US visa system, which discriminates in a variety of ways against high-skilled immigrants. Easier entry of immigrants with scarce skills – for which high-tech employers such as Intel, Microsoft and others tirelessly plead – is the quickest and easiest fix and Mr Kirkegaard makes an unanswerable case for it. But the deeper problem, as he notes, lies with the education system. What is going on?
Has a natural ceiling been reached? If so – if everybody who wanted or might benefit from a college education was receiving one – then the halting of that decades-long trend of capital accumulation would be less of a concern. Some of the tailing off can reasonably be attributed to this saturation effect. But in many other countries, the proportion of people aged 25-34 with at least a college education is now as high as, or higher than, in the US – and the trend elsewhere is still pointing up. South Korea, Japan, Canada and Russia already have significantly higher proportions of young workers with a college education or better.

One could question the figures in other ways. Perhaps a modern college education is more valuable to the economy than a 30-year-old college education – so that, quality-adjusted, the country’s educational assets are still climbing. Stocks of knowledge do get out of date. But this is an argument that could go either way: some would argue that academic standards have fallen and that today’s college graduates are educated to a lower level than their elders...Another plausible argument is that in-work training and mid-life schooling are more important than they used to be and that the figures ignore such assets. Yet another is simply that it is possible to send too many people to college – that for many students, another four years out of the workforce is not in fact a good investment and that it is an even worse investment for the taxpayers who subsidise it. There may be something to all of this.

Yet one key indicator suggests real cause for concern: the declining high school graduation rate, which affects the supply of those seeking to go to college. This too has been a bitterly contested statistic in the US. The country’s highly decentralised education system causes a proliferation of conflicting data sources and definitions. But a recent careful study by Nobel laureate James Heckman and Paul LaFontaine found that the high school graduation rate “has been falling for 40 years” and that this “explains part of the recent slowdown in college attendance”....

[Ghost Dog]

52. This is very important. And I would argue that academic standards have fallen,

in a big way, on the average, in US-UK. Spain's standards are pretty pathetic, also.

A college degree ain't what it once was, up-to-date or not. After all, learning/education should not be all about providing grist for the mill, fodder for the ruling class. It should be about informed, liberated, enquiring and creative minds.

For this reason if no other the future will be largely Asian. And I see no reason to treat that as a necessarily bad thing.

[Tansy_Gold]

80. I'm not sure it's just the colleges

Because I went back to college at age 50, I have a 1966 and a 1998 "freshman" experience to compare, and it was a bit frightening, to say the least.

In 1966, for instance, in ENG 101/102 we wrote our weekly papers in class, by hand, and were expected to have NO spelling, grammar, syntax, or punctuation errors. Each mistake brought the "form" grade down -- 0 errors = A+; 1 error = A; 2 errors, A-; etc. Everyone in the class was fresh out of high school and four years of traditional English classes. NO ONE griped about the standards. They griped about their "content" grades, but they didn't question the "form" standards.

In 1998, when 3rd- and 4th-year college students (most of them in their mid- to late-20s and early 30s) had to write four or five two- to three-page papers per semester (not one each week), they grumbled constantly. They had computers to check their spelling and grammar; printed papers meant little room for the student to whine that the instructor couldn't read the student's intentionally sloppy handwriting. EVEN WITH COMPUTER ASSISTANCE they couldn't spell.

In one class in 2003 the professor was so appalled at the dismal quality of the TAKE-HOME midterm exams that he handed them back with the admonition that those who got Ds or Fs could redo the exam WITH HIS ASSISTANCE and potentially bring it up to a C. He refused to help anyone bring it up further than that. He spent half an hour chewing the class out for being unable to construct coherent sentences. I still have my midterm from that class, with the notation at the end, "Thank you for being coherent!"

In a lab science class in the fall of 1999 on Arizona biology/geology/geography, the professor had to present a lecture on basic climate science. Things like the earth rotating on a tilted axis, the earth's orbit being elliptical, etc., etc. Everyone in the class was AT LEAST a third-year college student. Most could not name half the planets; only three or four of us "mature" students could name them order of distance from the sun. Approximately half didn't know that other planets had moons. At least two didn't know the earth revolved around the sun!

The worst, though, was the graduate class in social history/theory that I took in the fall of 2000. There were twelve or fifteen students in the class, most of them teachers working on their master's degrees. One was a particularly obnoxious young man who had just graduated the previous spring and was employed as an American history teacher at one of the local high schools, in a relatively upscale new neighborhood. As we got into an open and rather heated discussion of the importance of social movements to the ultimate change of government policy, the social climate of the 1960s was frequently used as a "model." This particular student, I'll call him Mr. J---, dismissed the whole 60s thing as irrelevant. Nothing happened then. Forget it. Not worth mentioning

"How can you say that?" I asked him. "There were dozens of different movements active at that time, and many of them effected enormous change, not just in official policy but in people's lives!"

"What movements were those?" he asked disdainfully, daring me to name even one.

"Are you nuts?" I began ticking them off on my fingers. "You had the civil rights movement that had started in the 50s, you had the women's movement really getting started AGAIN in the 60s with Betty Friedan's The Feminine Mystique, you had gay rights just beginning to stir into the public eye, even Indian rights, and of course the big one was the anti-war movement."

I can still see his reaction as he sniffed in utter dismissal of my argument and said with the drippingest of sarcasm, "And what war would that be? The cold war?"

There were audible gasps in the room.

"No," I said in disbelief. "The Vietnam War. You do know about that one, don't you?"

And the look on his face told me he really didn't. Oh, he'd probably heard about it somewhere, but it wasn't anything he really considered, um, important.

He dropped the class soon afterwards. I don't know if he's still teaching.

I had a temporary job a few months ago at which my main responsibility was to process written reports of various insurance claims. I was warned that a good part of the job would be to "translate" the spelling and grammar of the people who had written the reports. All had been written on computers, with spell check available at the touch of a button. I laughed at some of the errors. One in particular stuck with me: "Several citations were issued. Our insured was sited for failure to yield." I would learn eventually that this particular adjustor had NO CLUE that he was using the wrong "site" in this context; he did it all the time. But I also learned that the most egregious errors came almost without fail from the younger agents and adjustors. And as I chatted casually with the woman who was my "boss" on this job, she said she had noticed it too, that those who had come through the schools from the 1970s on had far less grasp of the language.

We both said, "Look at the Internet!" and shrugged.

And we both agreed, however, that it's one thing to dismiss insistence on "proper" grammar and spelling and usage in casual communication SO LONG AS THE MESSAGE GETS ACROSS. But when the ability to communicate is hampered by failure to acquire skill with the language, then the problem can be serious.

I think we've all seen the results in watching booooooosh try to communicate. He can't. And when we become more involved in trying to figure out what he SAID and how that relates to what he MEANT, we may have already lost the battle because in the meantime he's been DOING horrible things.

My point is, however, that as much as I revere teachers in general, and many of them as individuals, I think there's been such a serious dumbing down of our public education system that those going into college are at a distinct disadvantage. As higher education adjusts to their needs, the whole system deteriorates. NCLB is a symptom, not a cure.

Furthermore, and very sadly, we've lost the capacity to engage in serious discussion, perhaps because we've lost the ABILITY to do so. As I was watching the only two news (?) programs I can stomach any more, MSNBC's Verdict with Dan Abrams and then Olbermann, last night I wanted to throw something at both of them. FAR TOO MUCH TIME was taken up with the distractions of a missing three-year-old girl -- very cute and very heart-wrenching, this season's answer to Natalee Holloway -- and the UTTERLY ABSURD story of some dude from American Idol getting his toes nibbled on by a fucking shark!!!

THIS IS NOT NEWS, but it's what even our "best" news programs are reduced to.

No mention of the catastrophe that our economy has become. More concern about who Obama might choose for VP than reporting on the House investigation/discussion of impeachment. Olbermann enables O'Reilly by featuring him at length almost every night. I DON'T GIVE A SHIT ABOUT BILL O'REILLY AND HIS QUEST FOR AN ONLINE NERVOUS BREAKDOWN. I want news. Do the Oddball segment. Do the day's best and worst persons. But please spend the majority of the time on serious news, not some idiot talent show host's TOES.

We've all been dumbed down. From the quality of our education to what passes for information on the nightly news.

But don't even get me started on the quality of some of our college "professors." That's for another rant entirely.


Tansy Gold, way off topic and late for :donut:

[SidneyCarton]

87. This moron taught AMERICAN HISTORY?

AND HE DIDN'T KNOW ABOUT THE VIETNAM WAR???!!!

:scared: :grr: :scared: :grr: :scared:

(With apologies for the caps, I'm currently a Graduate Student in European History, Vietnam isn't even in my specialization and I know about it. Homeschooling for little baby Carton looks better and better all the time.)

[Tansy_Gold]

108. You will be further outraged when I inform you that. . . .

THIS MORON is listed as of 2006 the instructor at that high school for AP European History.


Tansy Gold, who is also outraged beyond description

[ozymandius]

112. Lazy language makes lazy thought.

My students hear that as often as it fits our classroom context.

Great post Tansy_Gold! :yourock:

[llmart]

127. Great post!

I had similar experiences because I started college in 1967 but had to drop out immediately. I restarted full time in 1982 and I was absolutely appalled at the English skills of the younger people. My son was in the 5th grade at the time and his English skills were 1000 times better than most of the students. One day my English professor called me outside the classroom (he was about the same age as I was) and said, "I'll bet you can't get over the lack of basic English skills today's students have." We had an interesting conversation about it.

I think the advent of community college in the late 60's, which was supposed to help minorities and those students who didn't have the requisite grades further their education, was the beginning of the dumbing down of America. Of course, it was only one factor.

[TalkingDog]

89. Must....contain...rage..... Seriously. I could stand on that soapbox for days

But ultimately who do we blame? I mean it. Who?

The parents: both working to make ends meet, so it's easier to not fight about homework, TV and video games because they are too damned tired?

Wall Street marketers: who promote cool, consumerist, anti-authority "counter-culture" over the social contract so they can earn money because they've ended up buying their own hype?

The overworked underpaid teachers: going from 20 in a class to 30+, required to jump through increasingly smaller and more expensive hoops just to be able to take home the same pay as the janitor?

The government: whose real interest is keeping teens out of the job market, yet literate enough to work for the lowest possible wage to increase the profit margin of the companies who use that extra profit to lobby?

Having been a college instructor, trust me, there are people teaching in those positions that should NOT be there. Not due to their ideology, but their failure to understand that teaching information is exactly the same as teaching someone to use a dangerous power tool. If you actually care whether your charges understand what you have imparted and can pass it on to yet another person with neither of them being permanently damaged, then you will be strict in dealing with foolishness and firm in dealing with a lack of understanding.

Many teachers only want the fun part. The play, the learning, the repartee, without understanding that structure and boundaries are just as important to the learning process.

What makes a great teacher is learning to balance both in appropriate measure.

Are they to blame for the current mess? Only in equal parts to everybody else listed.

[wordpix]

104. definitely a decline---a parent at one of DC's most prestigious private schools told me

that it's a rare student at the school who DOESN'T have a tutor. When I went there, NO ONE had a tutor.

I also taught private school students for 16 yrs. and the percentage of students with learning problems is rising precipitously. I attribute this to a lack of parental rules and guidance in the home, too much computer and video game time, and not enough reading. Even parents who are home do not know what their kids are doing on the computer, nor do they bother to check up. :crazy:

[Demeter]

111. My Daughter Is Certifiably Bright

and she needed a math tutor because the Middle School text was trash. And this school system, which prides itself on its quality, had been using this awful, awful (and I do Mean AWFUL) text for nearly 20 years!

Did you know that BushCo is deep into the textbook business? McGraw Hill, leading source of dumbing down. Then there's the text police in Texas, naturally, and the Schools of Education.

I took a course in Chomsky's Transactional grammar, comparing it to the standard grammar taught up until 1970's. The Ed. kids were totally lost. Even if I do use both sides of the brain, I'm an engineer by birth and training....

We are doomed. Of course, the way the US treated and continues to treat its intelligensia, things will not improve. Intelligence is not cool. Glasses may have become fashion statements, but brains haven't. And filling those brains is too much like work.

[ozymandius]

3. Today's Reports

08:15 ADP Employment Jul
Briefing.com NA
Consensus -60K
Prior -79K

10:35 Crude Inventories 07/26
Briefing.com NA
Consensus NA
Prior -1558K

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

[UpInArms]

21. Mortgage applications slowest since 2000: MBA

http://news.yahoo.com/s/nm/20080730/bs_nm/usa_economy_mortgages_dc

NEW YORK (Reuters) - Applications for U.S. home mortgages dropped to their slowest pace since December 2000 as loan rates hovering near one-year highs compounded the housing market's woes, according to data from an industry group on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity declined 14.1 percent to 420.8 in the week ended July 25. The decline was the most severe move in percentage terms since May.

The MBA's seasonally adjusted index of refinancing applications plunged 22.9 percent to 1,074.4 last week. The MBA's gauge of loan requests for home purchases fell 7.8 percent to 309.5.

Fixed 30-year mortgage rates averaged 6.46 percent in the week, compared with a one year-high of 6.59 percent in the prior week, the MBA said.

While concerns of faster inflation have boosted the market rates that influence mortgages, the credit crisis has hurt banks' ability to support the market for mortgage-backed securities, applying upward pressure to the rates that lenders charge to consumers.

...more...

not on the official report list, but comes out every Wednesday

[UpInArms]

50. Today's Laff Riot: U.S. July ADP employment index rises 9,000

05. U.S. July ADP employment index rises 9,000
8:16 AM ET, Jul 30, 2008

where do they get these jokers?

[Ghost Dog]

53. Dollar rises versus euro on strong ADP jobs report

NEW YORK, July 30 (Reuters) - The dollar rose versus the euro on Wednesday after an independent report showed the U.S. private sector unexpectedly added jobs in July.

...

U.S. private employers added 9,000 jobs in July, according to a private report by ADP Employer Services released on Wednesday. The median of estimates from economists surveyed by Reuters was for the ADP report to show a drop of 60,000 private-sector jobs in July.

/.. http://www.reuters.com/article/marketsNews/idINN3042624220080730?rpc=44

Where do they get these jokers? Hint: like Diebold? "Automatic Data Processing, Inc. (NYSE: ADP), with nearly $8 billion in revenues and over 600,000 clients, is one of the world's largest providers of business outsourcing solutions." - http://www.adp.com/about.asp

[Dr.Phool]

58. More Good Newz!!!!!

But, we know that they're always wrong by the end of the week.

[Hugin]

62. Oh joy! Sadly tho, I'm running out of room for ponies.

I've got them stuffed everywhere and with the price of oats it's getting a little expensive.

[Dr.Phool]

64. You'll have to feed the ponies lots and lots of oats.

That way, some will make it's way through to us sparrows!

[Nickster]

61. 9,000??? Really? Stocks rally on this news?

[Dr.Phool]

65. If the market can jump 260 pts when consumer confidence jumps.

1.9 points from abysmal to just downright dismal, anything can happen!

[Demeter]

114. See Post # 2 and following

As far as where they get the jokers

[UpInArms]

84. Petroleum Inventories: U.S. crude inventories down 100,000 brls latest week

08. Correct: U.S. gasoline supply down 3.5 mln brls last week
10:43 AM ET, Jul 30, 2008

09. U.S. distillate stocks up 2.4 mln brls last week
10:37 AM ET, Jul 30, 2008

16. Gasoline supply down 3.5 mln brls last week: Energy Dept.
10:36 AM ET, Jul 30, 2008

17. U.S. crude inventories down 100,000 brls latest week
10:35 AM ET, Jul 30, 2008

[Demeter]

4. U.S. Stocks Now Worth Less Than Rest of G-8: By Lee J. Miller

OBVIOUSLY, THINGS HAVE CHANGED A BIT IN 3 WEEKS, BUT PROBABLY NOT FOR THE BETTER--THE RATIO IS MOST LIKELY HOLDING

http://www.bloomberg.com/apps/news?pid=20601087&sid=aGS5.LTaQkk0&refer=home

July 7 (Bloomberg) -- As President George W. Bush meets with counterparts from the Group of Eight nations, he faces a new deficit: U.S.-traded stocks have declined to less than the combined value of those from the rest of the G-8, according to data compiled by Bloomberg. The combined value of companies traded on equities exchanges in Japan, the U.K., France, Canada, Germany, Italy and Russia was $15.16 trillion at the end of trading on July 4. Market value in the U.S. totaled $14.95 trillion, the data show... The U.S. has trailed its seven counterparts since June 21.

``A sharp reversal began in early June,'' Goldman Sachs Group Inc. said in a report from Tokyo. ``Housing prices continue to decline rapidly, the credit crunch is becoming increasingly evident in lending data, oil is marking new highs, and -- last but not least -- the labor market is unraveling,'' the report said.

The market capitalization of the rest of the G-8 nations first exceeded the U.S.'s on Nov. 7, 2007, when Washington Mutual Inc., the largest savings and loan, plunged the most in 20 years. The dollar also fell to the lowest in 30 years against a basket of six major currencies that day. The value of U.S.- traded shares then regained the top position most of the time through March, show the data, which date back five years.

[ozymandius]

5. Oil holds steady near $122 on waning US demand

Oil prices were slightly lower Wednesday, below $122 a barrel, after sliding overnight on expectations that this year's surge in energy costs is undermining U.S. gasoline demand.

By midday in Europe, light, sweet crude for September delivery had shed 51 cents to $121.68 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $2.54 to settle at $122.19 a barrel on Tuesday.

In London, September Brent crude was down 42 cents at $122.29 a barrel on the ICE Futures exchange.

.....

Gasoline stocks were expected to rise 400,000 barrels in the petroleum supply report, according to the average of analysts' estimates in a survey by energy research firm Platts. The survey also showed that analysts projected crude oil inventories to fall 1.3 million barrels.

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

[Demeter]

7. Hussman "The Likelihood of $60 Oil"

http://www.nakedcapitalism.com/2008/07/hussman-likelihood-of-60-oil.html

HERE'S A PREDICTION COMING TRUE!


The oil bulls will take offense at Hussman's contention that high oil prices will break, and probably break pretty seriously. Note we think high oil prices would be desirable if phased in over several years via a carbon tax to discourage use, but as everyone know from direct experience, a sharp runup is destabilizing, and if prices did fall back sharply, that would discourage the push for alternative energy sources (as well as plain old conservation).

Here is his section on oil prices:


Any discussion of inflation should begin by noting that the bulk of recent inflation has been restricted to food and energy. Outside of those groups, the year-over-year change in the CRB commodity price index is already negative.

The main factors influencing the outlook for broad inflation are that the U.S. economy is most likely in a recession, consumers are unusually strapped because of both mortgage debt and tight budget constraints, international economies are beginning to weaken, and credit concerns remain endemic. We should not exclude China from the risk of economic weakness, particularly given that the Shanghai index is already down by well over half since last year's highs. Stock markets typically don't drop in half without economic repercussions. Meanwhile, U.S. government spending, while still undisciplined, is relatively stable and not expanding rapidly.

Given this context, we have a combination of weakening demand for most goods and services as a result of consumer restraint, accompanied by a generally firm demand for currency and Treasury securities (particularly short-dated bills) as safe havens from credit risk. That combination is disinflationary, and it is likely that we'll observe further downward pressure on inflation outside of the food and energy groups over the coming quarters.

On the subject of oil prices, it's clear that elevated gas prices have been a factor in the terrible consumer confidence numbers recently. Still, my view remains that broadening economic weakness and an unwinding of speculative pressures will combine to produce steep declines in commodities prices, most probably by the end of the summer season.

It's sometimes suggested that hedge funds, commodity pools and speculators don't actually drive up the price of oil, because they don't actually take delivery of the physical product – instead rolling their futures contracts over indefinitely or until they close out their positions. From an equilibrium standpoint, however, this argument ignores the zero-sum nature of the futures market. Producers have an interest in selling their output forward to lock in a predictable price. Similarly, bona-fide hedgers (such as transportation and industrial companies) have an interest in buying their oil forward so they can plan without concern about future fluctuations.

To the extent that the speculators begin to take one-sided trend-following positions, their purchase of a futures contract crowds out the purchase that a hedger would otherwise be able to make from a producer.

It doesn't matter that the speculator has no intent to take delivery. What matters is that if the speculators are unbalanced on one side, the producers will have satisfied their need to pledge future delivery. Moreover, because they can lock in a high price, they will be inclined to sell more for future delivery than they otherwise would. Meanwhile bona-fide hedgers will be inclined to buy less on the forward market than they otherwise would. You can see this combination of effects in the commitments data, as a tendency for commercials as a group to become net short following significant price increases in oil.

When it comes time for the speculators to roll the contracts forward, they have to sell their existing contracts either to someone who is willing to take delivery, or to a producer who sold the oil forward and can now clear that liability without actually producing the stuff. Given relatively high spot demand and tight supply, these rolling transactions have worked fine to this point, without driving prices lower.

In my view, the problem will emerge a few months from now, as a) economic demand softens further, b) planned production hikes actually emerge, and c) weakening price momentum encourages speculators to close long positions instead of rolling them forward. At that point, I expect that net speculative positions will plunge by 10-15% of open interest and we'll see a sudden glut on the market for spot delivery. It should not be surprising if this speculative unwinding takes the price of crude below $60 a barrel by early next year.

[ozymandius]

8. As oil nears 20 percent "bear" market, bulls unfazed

SINGAPORE (Reuters) - As the rout in oil prices nears the 20 percent mark that for stocks would signal a bear market, many analysts offer a word of caution -- don't mistake a healthy correction for the end of a multi-year bull trend.

The 16 percent slump since its record-high close of $145.18 a barrel on July 14 could yet deepen to $100 a barrel, many analysts say, but equally many remain convinced that another surge to as-yet unconquered peaks may lie just months ahead.

....

The U.S. Dow Jones industrial average (.DJI) entered bear market territory -- marked by a 20 percent fall from a closing peak -- in late June, but similar setbacks in commodity markets have proven less prescient.

Those who might have mistaken oil's last deep fall -- a near 21 percent decline over four weeks to mid-January 2007 -- for a sustained pull-back paid dearly. Prices hit a low of $49.90 a barrel before nearly trebling over the next 18 months.

Dealers who trade on the basis of technical indicators are looking at more crucial figures, such as the 100-day moving average. Prices fell below that level on Tuesday for the first time since early February, hinting at more to come.

http://news.yahoo.com/s/nm/20080730/bs_nm/oil_bear_market_dc

[Dr.Phool]

12. The way the price of oil is dropping,

You'd think we were having an election in about 90 days or something.

What's going on?

[Demeter]

17. Fear

They caught a speculator--and all of a sudden, it's not cool. Plus they need to cover losses in other areas, so they cash out. And the driving drop.

The great unwinding continues.

[UpInArms]

38. see the article at my post #36

here's a part of it:

http://www.marketwatch.com/news/story/we-trading-against-hank-paulson/story.aspx?guid=BD5A1713-1CDC-41B8-B5E8-6053741240D9&dist=SecMostRead&print=true&dist=printMidSection

The second component of their master plan is crude oil, with an eye toward $100 a barrel by the election. While empirical evidence shows little if any historical relationship between the price of oil and equities -- the 10-year correlation between crude and airlines is negative 0.246 (very mild) -- psychology surrounding lower oil could conceivably shift sentiment.

Those are the ingredients for near-term reversal and while the script is still being written, you now know the motivation of the policy makers. They are playing the hand of socialization in an attempt to stem risk gone awry.

Nothing comes for free

The government is trying to buy time with hopes that a legitimate economic recovery will take root and reverse the contagion that crippled our finance-based economy.

This is nothing new. In fact, that is precisely the mindset that got us into this mess in the first place. See MarketWatch column.

[aspergris]

42. as i said weeks ago

technical support was key at 130 in the front month.

it was vastly overbought, and when 130 broke... zoinks!

[Roland99]

44. RBOB touching $2.99 today

[radfringe]

49. my concern

my concern is if oil does drop to a more "affordable" price the push for alternatives to oil will fall by the wayside....again

[Hugin]

71. ...

Concern troll! :P


Seriously, I'm feeling much the same way. But, OTOH I'm not sure using High Fuel Prices as a forcing function
for alternatives is good way to go because of it's unequal effects on the poor. In my Utopia this little scare
would be enough to extract a commitment from our leaders to implement changes and alternatives pro-actively. So,
we don't need to live through this every business cycle until it's really really a problem.

But, you know what they say... Neurotics build castles in the sky and would be Utopians live in them. :)

[Demeter]

115. The US Auto Industry Does Nothing Except at the Point of a Gun

They had 35 years and did nothing--and Japan is again eating their lunch. They just don't care about their market share, their customer base, or anything.

But notice that they aren't pushing Hummers and trucks and SUVs on Europe and Asia---

[wordpix]

102. my concern, too---we need to keep pressure on for renewables

[wordpix]

101. Oil Bounces Back, Clips Stock Rally

http://www.cnbc.com/id/25932759

Posted By:Cindy Perman
Topics:Economy (U.S.) | Employment | Earnings | Stock Market
Sectors:Oil and Gas
Companies:Corning Inc | Comcast Corp
By Cindy Perman CNBC.com | 30 Jul 2008 | 01:07 PM ET

Oil made a comeback Wednesday, shutting down an early rally spurred by an unexpected rise in private payrolls and measures by the goverment to stabilize financial markets.

Major U.S. Indexes
.DJIA
11442.18
44.62
+0.39%
465,547,000
.NCOMP
2307.01
-12.61
-0.54%
494,975,700
.SPX
1267.86
4.66
+0.37%
2,452,479,700

Oil jumped more than $2 a barrel, trading above $124 a barrel, after the EIA reported that crude inventories declined by 100,000 barrels last week to 295.2 million barrels.

NYMEX CRUDE OIL FUTURES Front Month
US%40CL.1

125.75 3.56 +2.91%
BIS
Quote | Chart | News | Profile
Nymex crude is currently at a 7-week low, which has givent stocks a boost.

Financials had been leading the Dow, but oil's resurgence quickly sent financials down the stack and energy giants ExxonMobil
EXXON MOBIL CORP
XOM

82.04 1.14 +1.41%
NYSE
Quote | Chart | News | Profile
and Chevron
CHEVRON CORP
CVX
85.61 2.77 +3.34%
NYSE
Quote | Chart | News | Profile
rose to the top of the Dow heap.

[Demeter]

6. Cayman Island Office Building Home to 9,000 U.S. Tax Cheats

http://www.motherjones.com/mojoblog/archives/2008/07/9108_bush_ignores_tax_cheats.html

Corporate America and its wealthy executive class has had it good under the Bush administration. Not only has it benefited from massive tax cuts, but the Bush administration has stood idle as huge numbers of American companies have set up phony headquarters in the Cayman Islands so better to avoid what little taxes they might have to pay in the U.S. According to a GAO report scheduled for release today, since 2002, the number of American entities reporting a Cayman Island bank account has jumped from 2,677 to nearly 8,000. Suspiciously, investigators traced more than 9,000 American entities that had registered in the Caymans to a single office building.

Past estimates have put the loss of revenue from such schemes at $100 billion. The move to off-shore accounts hasn't exactly been a secret. But the administration has simply turned a blind eye to it as the IRS has struggled to enforce the law with limited resources. That may change, however. The Senate Finance Committee is holding a hearing on the issue today to consider whether the IRS ought to get some more money and power to make sure that every U.S. corporation pays its fair share. That should come as welcome news to cash-strapped states, which are now facing a whopping $40 billion collective budget deficit, according to the National Conference of State Legislators, leading to widespread cuts in everything from health care services to Maine's popular fish hatchery program.

[Demeter]

9. The GOP's December Surprise By James K. Galbraith

http://www.motherjones.com/news/feature/2008/07/december-surprise.html


Is the GOP cooking the books to avoid recession till after Election Day?
Is the worst over? Are we on the road to recovery? Will the next president take office against a backdrop of economic improvement, as Bill Clinton did in 1993? Or has something deeper and more intractable gone wrong?

...Under intense pressure from panicky bankers, Ben Bernanke cut interest rates relentlessly from August 2007 through the spring of 2008. I don't accuse Bernanke of playing politics. But it's worth noting that this is what usually happens. In presidential election years when Republicans are in office, the Fed regularly and predictably pursues a more expansionary policy than when Democrats rule—after controlling for differences in the rates of inflation and unemployment. (I made these calculations myself; see the chart.) Maybe they just can't help themselves.

But much of the ordinary effect of interest cuts on new lending—like a rebound in construction and automobile sales—didn't happen this time. That's because the fall in home prices (and therefore the value of collateral) overwhelmed the benefit of cheaper money to the banks. And the banks barely cut mortgage rates, so consumers saw no benefits at all. Lower interest rates did cut the value of the dollar, however, and that promotes exports and foreign investment. (These days New York Times real estate listings come with a currency converter.) It also boosts the stock market, since multinational firms can report their (unchanged) foreign income as higher dollar earnings.

Possibly all this stimulus will ward off the two-quarter decline that has historically defined a recession. Don't be surprised: Republicans haven't had an election-year slump since 1960. On the other hand, the National Bureau of Economic Research, which has the official call, may describe the early spring as a recession anyway. Republicans will welcome that, too, so long as they can plausibly call the summer a "recovery." Even if they can't stop a recession, they may be able to make it short and shallow enough, this year, to put John McCain in the White House. But all this brings up an important question—what of next year?
---------------------

The problem with a housing slump is inventory. Unlike factories and Internet startups, shuttered houses don't go away. No one declares them obsolete. They aren't boxed up and sent to China. They remain, a drag on the market, decaying and pulling down property values for years. Here in Texas, housing values slumped with the S&L crisis and the oil bust of 1985 and did not recover until around 1993. That slump clobbered the oil patch but was barely felt anywhere else. This slump is the reverse—it's driving down housing prices just about everywhere except Texas, where the scars of the last bubble helped keep the recent one under control.

Nationally, the subprime debacle is blowing away the homeownership gains of the last few years. Those abusive mortgages were deliberately targeted at vulnerable, even desperate, people who could be steered into financial death traps. Lenders didn't care, because with the help of fraudulent appraisals, the loans could be off-loaded quickly in packages bought by greedy or gullible investors, including your pension fund. Poor people got hit on the front end; 1.5 million homes entered foreclosure last year. Middle-class people got it on the return volley.

And middle-class homeowners are now getting hit a second way: in the declining value of their homes. You don't have to be holding a subprime to find yourself underwater. That means that home-equity loans will dry up. (As of April, California homeowners in default were already a median of eight months behind on those loans.) Many people will be tempted to walk on their houses and mail the keys to the bank. Incidents of the foreclosed expressing themselves to their lenders by yanking the plumbing and the wires on the way out the door are on the rise, as is arson by desperate homeowners, according to the Los Angeles Times. Will students, small businesses, and other borrowers still be able to get credit when this is over? God only knows.

The mechanisms of mortgage finance and home-equity drawdown haven't simply been damaged. That well has been poisoned. Having largely outsourced mortgage originations to companies like Countrywide who didn't care whether the borrowers had good credit, the banking system cannot easily go back to its old method of making loans to creditworthy people and contenting itself with the interest paid back over many years. And who would trust them, anyway, if that's what they claimed they wanted to do?

--------------------------------
Then there's another problem: The banks no longer trust each other. Last August, as mortgage-backed securities unraveled, finances froze up worldwide. Why? Because banks knew how much undisclosed junk they had on their own books. Who could say what the next fellow had? Overnight lending between banks—the process that ensures that every bank has funds when it needs them—fell apart. This is a very big deal. If banks will not lend money to each other, why (except for the blessings of federal insurance) should anyone else leave their money to them? Economists like me wait entire careers to study events such as these—which should provide no comfort to anyone else.

Since August, America's big banks have been wards of the Fed, and those in Europe equally so of the Bank of England and the European Central Bank. The system survives because central banks keep the lending windows open, and the result is that—except for one instance in Britain—the public has not pulled out of the banks. Let's be clear. The private financial markets did actually fail. It's only the fact that the public trusts government that keeps the system from dissolving in panic. But even if the Fed and its counterparts can hold the line, the problem of mistrust among the big bankers won't go away soon. And that means we're at the end of the age of credit expansions, for now.


--------------------------------------
As for next year, good luck. No matter who becomes president, there probably won't be another tax cut. Instead, cries for "fiscal responsibility" will be heard. States and localities, hit in 2008 on their property taxes, will cut their spending. Consumers, hit hard on their home equity, will cut back on new borrowing (which they probably couldn't get anyway) and pinch pennies however they can. Businesses won't even think about new investments.

In this situation, more cuts to interest rates—the only applicable tool the Fed has—don't work well. And they weaken the dollar, which raises inflation. What is gained by cheaper money will be lost in higher gas and food prices. But if the Fed reverses field and defends the dollar, exports will slump and the housing crisis will get worse. There's no easy way out.

Thus far the dollar has fallen, but it hasn't collapsed. Will it? There are two big threats. The first is the financial crisis itself, which is a problem of trust not only in the ordinary borrower, and not only in the banks, but in the American dollar. Why is the rest of the world nervous? Because the fundamental trust that they have always had—that the United States was a safe place to put your money—has come into question.

The second threat, not often mentioned, is our reckless foreign policy, including the invasion of Iraq, bellicosity toward Iran, and the ongoing subtext of hostility toward China. Since the Middle East has the oil and China holds our debts, all this is spitting in the soup, big time. It may not by itself wreck the financial system. But it doesn't exactly build up the reserve of good will that we may need when the financial going gets tough.

For half a century much of the world believed that we provided security under which they too could prosper; many no longer think so. Today, our country, like our banks, has a problem of global trust. Unlike the banks, we have no higher power to keep things going if we screw up.


James K. Galbraith is a contributing writer for Mother Jones. His new book, The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too, comes out in August.

[ozymandius]

10. Restaurant Chains Close as Diners Reduce Spending

Several national restaurant chains were shuttered on Tuesday, possibly offering an early taste of what’s in store this year for businesses that depend on free-spending consumers whose budgets are now being squeezed.

The parent company of Bennigan’s, an Irish-themed bar and grill with about 200 sites across the country, filed for bankruptcy, a move that will put hundreds of employees out of work and leave many landlords with empty retail space during a painful time in the real estate market.

A sister brand, Steak & Ale, will also close. Franchise units of Bennigan’s will remain open for now, a spokeswoman, Leah Templeton, wrote in an e-mail message.

http://www.nytimes.com/2008/07/30/business/30restaurant.html?em&ex=1217563200&en=b7d394b0ea95b564&ei=5087%0A

[ozymandius]

13. This story has been radically altered.

Yesterday when I posted this story - the articles listed the number of people effected by the closures. Potentially thousands of people will be put out of work.

Today, there is scarcely a mention of this.

[Demeter]

16. Well, Of Course. It's Old News Now

The cycle is getting into hours, not the days it used to be back when people paid attention.

[burf]

19. It looks as though

the reporting will have to be left up to Finnfan and the SMW crew! Gawd, the corporate media sucks. BTW, good morning Ozy, Demeter and all at SMW. Thanks for all you guys do to keep us informed.

[Hugin]

75. I saw it yesterday, too.

It was also on the Front of the AOL News-o-rama w/ pictures. :scared:

[Demeter]

11. Good Morning SMW!

I'm trying to prep for posting the night before, which works until Yahoo crashes on me...

I thought Ozy had overslept---hope the world treats us all kindly today.

[ozymandius]

15. Good morning Demeter.

:donut:

I did oversleep by a half hour. Thanks for the concern. :hi:

[Ghost Dog]

26. Morning Demeter. Beware information overload!

My Vista system here gets to run very slow by the time I've loaded a few dozen sites/pages into Firefox.

Not to mention my head, some dazed days.

[Ghost Dog]

14. GLOBAL MARKETS-Stocks buoyed by banks, oil and firm dollar

HONG KONG, July 30 (Reuters) - Global stocks rose on Wednesday as investors wagered that the worst news from U.S. banks might be over and took heart from a strengthening dollar and falling oil prices.

Regional share markets reversed Tuesday's falls after reassessing Merrill Lynch's (MER.N: Quote, Profile, Research, Stock Buzz) $5.7 billion write-down and share sale as a signal of a turning point in the credit crisis.

...

Japan's Nikkei average .N225 closed up 1.6 percent, led by Matsushita Electric Industrial Co (6752.T: Quote, Profile, Research, Stock Buzz), which gained 5.5 percent on the back of strong earnings.

Stocks elsewhere in Asia, gauged by MSCI's index, rose 1.5 percent .MIAPJ0000PUS by 0650 GMT, with a strong showing from Australia's benchmark S&P/ASX 200 index , which rose 1.8 percent as bank stocks rebounded from this weeks sharp falls.

Hong Kong's Hang Seng .HSI rose more than 2 percent, helped by Chinese oil refining giant Sinopec (0386.HK: Quote, Profile, Research, Stock Buzz), which gained almost 6 percent after a Reuters report that it had received a $4.4 billion subsidy to offset a first-half refining loss.

The high price of oil has spurred inflation, troubled oil refiners and savaged airlines around the world this year, so a $25 slump in crude prices over the last two weeks towards three-month lows has brought some respite to equities.

U.S. crude oil CLc1 hovered around $122 a barrel on Wednesday, reflecting mounting evidence that high prices and a souring U.S. economy were cutting into energy demand. Buyers struggled to put a floor under their steepest slide in a year and a half.

"The reason prices are coming off is that there are expectations for inventory builds... on reduced demand," said Robert Nunan, a risk management executive at Tokyo-based Mitsubishi Corp.

/... http://www.reuters.com/article/marketsNews/idINSP34429720080730?rpc=44&sp=true

Huh? Why would oil buyers want a floor under the price?

[Demeter]

22. Gambling Addicts, Every One of Them

I suppose if you define yourself and your reason for existence as "Investor", you are going to jump to premature conclusions and take risks.

Or if you get paid on a per-trade basis, you are going to do stupid things just as you are told to, because there's money in it for you.

Neither mindset very healthy or useful to the overall economy....

[burf]

23. Maybe its because

that $60 oil story posted up thread has some legs to it. Morning GD.

[Ghost Dog]

56. Yup. Clearly refers to speculative buyers. Now 'officially' squeezed. n/t

[Demeter]

118. That Story Is 3 Weeks Old

I just read it last night--it would have been humor 3 weeks ago. Today it looks very possible.

[Ghost Dog]

31. Europe shares rise early, boosted by results, oil

LONDON, July 30 (Reuters) - European shares got off to a strong start on Wednesday, helped by strong company results, a relatively subdued oil price and positive brokerage comment.

At 0710 GMT, the FTSEurofirst 300 index of top European shares was up 1.1 percent at 1,175.72 points, adding to a 0.3-percent gain in the previous session.

German engineering group Siemens (SIEGn.DE: Quote, Profile, Research, Stock Buzz) jumped 6 percent after posting a stronger than expected rise in new orders and revenues and confirming its fiscal year 2008/2009 outlook.

ArcelorMittal (ISPA.AS: Quote, Profile, Research, Stock Buzz) rose 7.5 percent after its results came in far above expectations. German peer ThyssenKrupp (TKAG.DE: Quote, Profile, Research, Stock Buzz) and building material maker Saint Gobain (SGOB.PA: Quote, Profile, Research, Stock Buzz) rose more than 6 percent on positive brokerage comment.

...

"The oil price at $120 is relatively positive, but I don't see it going to $100 before something significant comes out of the Iran situation," said Thierry Lacraz, strategist at Pictet in Geneva.

"So far in the earnings season we've had balanced positive and negative surprises, with most of the negatives from the financial sector and the positives from industrials, which is not surprising if you look at the macro picture."

/.. http://www.reuters.com/article/marketsNews/idCAL03132920080730?rpc=44

[Ghost Dog]

33. Euro zone business morale sinks, outlook dark

BRUSSELS, July 30 (Reuters) - Economic sentiment in the euro zone skidded much more than expected in July to its lowest in over 5 years, data showed on Wednesday, pointing to a stagnant economy and boosting expectations that interest rates will be kept on hold this year.

The European Commission said its economic sentiment indicator fell to 89.5 points, its lowest since March 2003, from a downwardly revised 94.8 in June.

Economists had predicted a July reading of 93 points.

"At current levels, it is consistent with roughly stagnant GDP growth", Nick Kounis, chief economist at Fortis, said.

...

Sentiment in industry declined by 3 points to -8, among consumers by 3 points to -20, in the retail sector by 5 points to -9, and in construction by 3 points to -14.

The services sector, which generates more than two thirds of the 15-country euro zone's gross domestic product, saw the steepest decline, by 8 points to 1.

...

The economy is burdened by a strong euro, soaring prices of food and energy, tight credit conditions and an increasingly visible slowdown in other major industrialised countries.

Japanese industrial output fell in April-June for the second straight quarter, the first such drop in seven years, suggesting that the nation's longest postwar growth cycle is fizzling out as high energy costs curtail corporate activity.

In Spain, retail sales suffered a record plunge year-on-year in June as a severe economic slowdown began to slam both multinational and domestic retailers.

...

"We expect markedly weaker euro zone growth, extended tight credit conditions and the strong euro to largely contain and then increasingly dilute underlying inflation pressures over the coming months," said Howard Archer, chief economist at Global Insight.

The ECB increased its main rate to 4.25 percent from 4.00 percent in early July to fight price growth, which hit a record 4.0 percent in June, more than double of the bank's target.

Economists expect annual inflation to rise further to 4.1 percent in July. Eurostat will publish its flash estimate of euro zone price growth on Thursday.

/... http://www.reuters.com/article/marketsNews/idINL070821620080730?rpc=44&sp=true

[Ghost Dog]

35. FTSE buoyed by trading updates; miners, financials up

LONDON, July 30 (Reuters) - Britain's leading share index gained over 1 percent on Wednesday, buoyed by positive sentiment from U.S. and Asian markets and as mining and financials rose among a flurry of trading updates, while retailer Next fell.

At 1028 GMT the FTSE 100 .FTSE 73.2 points, or 1.4 percent higher at 5,392.4 after ticking up 0.1 percent on Tuesday to halt a three-session losing run.

Mining shares were among the leading performers after Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) said it expected a "significantly" stronger second-half performance across its portfolio after posting a 1.1 percent fall in first-half mined copper output and a 6.1 percent fall in mined nickel production.

Xstrata added 3.1 percent while BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz), Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz), Lonmin (LMI.L: Quote, Profile, Research, Stock Buzz) Vedanta Resources (VED.L: Quote, Profile, Research, Stock Buzz) and Eurasian Natural Resources (ENRC.L: Quote, Profile, Research, Stock Buzz) gained 2.4-6.1 percent.

...

"It's more like relief at the moment," said Justin Urquhart Stewart, director at Seven Investment Management. "We just reached the clearing in the woods, but it looks like a very thick forest on the other side."

Banks were among the standout gainers, lifted by a rise in U.S. financials overnight. Barclays (BARC.L: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz), HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) and Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) were up between 1.3 and 4.2 percent.

Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) shed 4.9 percent to top the FTSE 100 losers' list however, after it said first-half profit fell 70 percent from a year ago as it took a 585 million pound hit from its exposure to risky assets and adverse volatility in its insurance arm.

Also in the financial sector, Admiral Group (ADML.L: Quote, Profile, Research, Stock Buzz) soared 6.2 percent after the UK car insurer said the outlook was encouraging, and that it was confident it could maintain good ancillary income despite the consumer downturn. Aviva (AV.L: Quote, Profile, Research, Stock Buzz) was up 5.5 percent after the insurer reported a 12 percent rise in first-half profit and announced a long-awaited deal to reallocate surplus assets held by two with-profit funds.

...

"It's mildly encouraging in the short-term but the bigger picture is that we've got a welter of results out this week and they are likely to have a big impact on things."

"We're still trending downwards, it's just that the market never travels in a straight line," he said.

NEXT PULLS RETAILERS DOWN

Among other decliners, Next (NXT.L: Quote, Profile, Research, Stock Buzz) lost 1.9 percent after the British clothing retailer posted a 6 percent fall in first-half underlying sales, in line with forecasts, and said it expected a similar decline in the second half amid a worsening economy.

...

Confectionery giant Cadbury (CBRY.L: Quote, Profile, Research, Stock Buzz) put on 1 percent after posting a 46 percent rise in first-half profits and saying it was confident for 2008 with sales growth seen at the top of its target and margins ahead of the market consensus.

/... http://www.reuters.com/article/marketsNews/idCAL068620020080730?rpc=44&sp=true

[Ghost Dog]

69. European stocks gain on central bank announcement

FRANKFURT, July 30 (Reuters) - European shares extended gains in early afternoon trade on Wednesday after three major central banks announced an enhancement of their dollar liquidity providing operations.

By 1251 GMT, the pan-European FTSEurofirst 300 index was up 1.5 percent at 1,179.94 points.

The European Central Bank said its governing council had decided, in conjunction with the Federal Reserve, to establish a cycle of 84-day term auction facility operations.

/.. http://www.reuters.com/article/marketsNews/idCAWEA392220080730?rpc=44

[UpInArms]

18. dollar watch

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

Last trade 73.268 Change -0.025 (-0.03%)

Dollar Rally Set to Continue

http://www.dailyfx.com/story/bio1/Dollar_Rally_Set_to_Continue_1217364468081.html

The recoveries in the US dollar and equities have been very impressive. In yesterday’s Daily Fundamentals, we said that “despite today’s move, the dollar’s rally may not be over.” Gold continues to provide a strong indication of the market’s risk appetite and dollar sentiment. If you want to figure out if investors are really nervous, just take a look at gold. Today, gold prices have fallen by another $10 to $919.00 an ounce. This suggests that the dollar’s rally is set to continue. There could and will probably be retracements, but the overall trend of the dollar is up. As previously indicated by the bounce in the University of Michigan consumer confidence numbers, sentiment in the US has improved according to the Conference Board’s survey. Although jobs are increasingly “hard to get,” consumers are starting to accept the current state of the US economy as the way of life. This does not mean that the troubles are behind us because house prices in May fell by the largest amount on record. Going forward, the stability of the US economy will depend on oil prices staying low. Crude is trading at approximately $121 a barrel and as long as it remains at current levels or falls further, inflation and inflation expectations will ease. Not only will this loosen the noose for central banks around the world, but it will also provide respite for consumers and businesses. In turn, this will add further fuel to the dollar which we expect to break 1.55 against the Euro and at least 109 against the Japanese Yen. However keep in mind that even if the dollar is rallying, it does not necessarily mean that the US economy is stabilizing. Instead, it represents a realignment of expectations. The weakness of the US economy has already been priced into the market, but the deterioration in places like the Eurozone, New Zealand and the UK is catching many traders by surprise. This has triggered weakness for the Euro, New Zealand dollar and British pound. Looking ahead, the ADP Employment report is due for release tomorrow. The market expects private sector employment to fall by 60k jobs. Although the report is a leading indicator for non-farm payrolls, traders need to be careful of relying solely on this report since it can have a shaky track record.

...more...

Will GDP And NFP Readings Curb Expectations Of A Fed Hike?

http://www.dailyfx.com/story/topheadline/Will_GDP_And_NFP_Readings_1217413781494.html

The Federal Reserve is scheduled to meet next Tuesday; but despite the dollar’s recent strength, the market is pricing in little chance of a quarter-point rate hike when everything is said and done. Currently, Fed Fund futures show a 6.3 percent probability of a hike to 2.25 percent – a significant drop from the nearly 25 percent odds measured only a month ago. Despite this expected passivity in the near-term however, traders still see a 71.5 percent chance that the central bank will tighten by the year’s end and shake the two-year easing/neutral cycle.

<snip>

CREDIT MARKET: HOW IS IT DOING?


The Federal Reserve is scheduled to meet next Tuesday; but despite the dollar’s recent strength, the market is pricing in little chance of a quarter-point rate hike when everything is said and done. Currently, Fed Fund futures show a 6.3 percent probability of a hike to 2.25 percent – a significant drop from the nearly 25 percent odds measured only a month ago. Despite this expected passivity in the near-term however, traders still see a 71.5 percent chance that the central bank will tighten by the year’s end and shake the two-year easing/neutral cycle. All of this could change very quickly though as major event risk approaches. Both the 2Q GDP and July NFP numbers will offer a conclusive measure of strength for the world’s economy. And, considering the optimistic forecasts for growth and fragile state of financial markets, a disappointment here could have severe repercussions.



<snip>

U.S. CONSUMER: HOW ARE THEY DOING?
The official consensus for the second quarter growth report seems to suggest the American consumer may not pitch the world’s largest economy into a recession. Over the past week, two consumer confidence indicators crossed the wires with unexpected outcomes. The Conference Board’s sentiment report improved for the first time in seven months, while the University of Michigan’s gauge offered a surprise upside revision. However, the promise these indicators offer is certainly limited as these monthly bounces have merely lifted the readings from recent historical lows. What’s more, the fuel for optimism – steady wage growth and rising employment – has just begun to sputter. The government is expected to report the seventh consecutive contraction in net employment and a new two-year low in earnings growth.



...more...

[Ghost Dog]

86. ADP Report and Fed Announcement Boost Dollar

...ADP has a track record of being notoriously optimistic about projecting payrolls. Non-farm payrolls dropped in each of the past six months but between January and June, the ADP employment survey on the other hand only dropped 2 out of the 6 months. ADP has consistently missed to the high side and we expect the same this month.

Meanwhile a surprising announcement from the Federal Reserve has also helped to rally the US dollar and US stocks. “In light of continued fragile circumstances in financial markets,” the Federal Reserve extended the tenure of their Primary Dealer Credit and Term Securities Lending Facilities. This means that in addition to their 28-day loans, they will also be selling 84-day loans. In response, the European Central Bank and the Swiss National Bank will also be making 84-day funds available at dollar auctions. These actions should help to calm the markets, especially as the rally in the stock market continues to ease risk aversion. However the changes are incremental since the Fed is simply tweaking their existing programs to give themselves more flexibility when there are times of “elevated stress.”

/... http://seekingalpha.com/article/87983-adp-report-and-fed-announcement-boost-dollar

[UpInArms]

94. Forex investors see new president helping dollar - USD has lost 33.8% under Dimson

http://www.reuters.com/article/ousiv/idUSN3042729120080730?sp=true

NEW YORK (Reuters) - Currency investors are not particularly enamored with either of the two U.S. presidential candidates but they are more than ready for change after the U.S. dollar's 33.8 percent decline under President George W. Bush.

Bush has presided over the worst drop in the dollar of any U.S. President since the developed world moved to flexible exchange rates in the early 1970's.

And though analysts are not completely blaming Bush for the dollar's slump, they say neither Republican Senator John McCain or Democrat Barack Obama can do any worse.

"One would think that just about anyone would be an economic improvement on one of the most reckless fiscal presidents we've ever elected," said Chip Hanlon, president of Delta Global Advisors, Inc. in Huntington Beach, California.

The New York Board of Trade's dollar index, which measures the dollar against a basket of six currencies, has lost 33.8 percent since Bush first took the oath of office on January 20, 2001. From a peak in July, 2001, the slide is even more dramatic at 39.3 percent.

...more...

[ozymandius]

20. Merrill sparks fears of soaring costs

LONDON/NEW YORK (Reuters) - Merrill Lynch's surprise write-down ratchets up pressure on rivals to cut the values of their own subprime assets as they grapple with mounting debts and economies weaken.

The global credit crisis, roughly a year under way, could cause total damage of around $1 trillion to balance sheets of financial services companies. That's far above the more than $400 billion of write-downs taken so far.

Merrill's revelation of a $5.7 billion (2.8 billion pounds) write-down and plans to sell $8.5 billion of stock heightened worry of more pain to come from European lenders UBS AG and Barclays, and from Wall Street and U.S. commercial banks.

Citigroup, Bank of America Corp, Lehman Brothers Holdings and Wachovia, for example, each still have billions of dollars of exposure to complex debt, mortgages, or both.

.....

According to Oppenheimer & Co analyst Meredith Whitney, Lehman ended May with about $600 million of gross ABS CDO exposure, and $29.4 billion of commercial mortgage exposure. Lehman spokesman Randy Whitestone declined to comment.

http://uk.reuters.com/article/stocksAndSharesNews/idUKARO02794420080730

[Demeter]

24. And the First One Out Has the Best Chance of Surviving?

Isn't that the classic Prisoner's Dilemma, or some kind of zero sum game?

[Ghost Dog]

39. Citigroup, Merrill CDO Ties Extend to Preferred: Chart of Day

July 29 (Bloomberg) -- Citigroup Inc. may follow Merrill Lynch & Co. by taking billions of dollars in losses on mortgage- related bonds, according to some analysts. Preferred-stock investors are making a similar connection between the companies.

The chart of the day shows the preferred issues sold by Citigroup, the biggest U.S. bank by assets, in January is tracking shares that Merrill issued three months ago. Lehman Brothers Holdings Inc. and JPMorgan Chase & Co. preferred shares are also included for reference.

All four firms sold these shares to raise capital after losses sparked by the subprime-mortgage market's collapse last year. Merrill will have a $5.7 billion hit from selling collateralized debt obligations to the Lone Star Funds investment firm at about 22 cents on the dollar.

Citigroup ``has been far less aggressive'' than Merrill in marking down CDOs, William Tanona, an analyst at Goldman Sachs Group Inc., wrote in a report today. ``They would struggle to obtain their prices in the marketplace.''

The securities are valued at about 55 cents on Citigroup's books, according to Tanona. Bringing the valuation into line with Merrill's would imply a $16.2 billion writedown and about a $2-a- share reduction in earnings, the report said.

/.. http://www.bloomberg.com/apps/news?pid=20601109&sid=aJWHOFrwIvWw&refer=exclusive

[UpInArms]

135. Merrill Lynch 2007 CDOs under water: consultant

http://www.reuters.com/article/bondsNews/idUSN3043513720080730?sp=true

NEW YORK (Reuters) - Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research, Stock Buzz) repackaged debt deals from 2007 have all performed poorly, which the bank should have predicted based on what was going on in the mortgage market at the time, consultant Janet Tavakoli said on Wednesday.

Tavakoli said in a report to clients that of the 30 collateralized debt obligations (CDOs) Merrill sold in 2007, every one has either had its best-rated portion cut to junk, is in technical default, is being liquidated, or is in danger of being liquidated.

The poor performance suggests that Merrill was underwriting deals it knew or should have known were bad, Tavakoli said. That underwriting, combined with similar moves from other banks -- has shaken investor faith in CDOs, Tavakoli wrote in the report. Her company is Tavakoli Structured Finance Inc.

Merrill Lynch spokesman Mark Herr declined comment.

"Investment banks have a huge credibility problem when trying to explain that they 'didn't know the gun was loaded," Tavakoli wrote.

...more...

[ozymandius]

25. Miami hit hardest by housing slide

Once the scene of the one of the nation's biggest housing booms, Miami is now among those cities hit hardest by plunging home prices, according to the Case-Shiller index, a widely watched survey that measures prices in 20 major metropolitan areas.

Miami and Las Vegas were the worst performers down 3.6 percent and 2.9 percent respectively. The 10-city index plunged 16.9 percent, its biggest decline in its 21-year history.

No city in the Case-Shiller 20-city index saw price gains in May, the second straight month that's happened. The monthly indices have not recorded an overall home price increase in any month since August 2006.

http://www.bizjournals.com/southflorida/stories/2008/07/28/daily25.html

[wordpix]

72. Florida and Las Vegas both overbuilt. Jeb Bush & his crony developer friends are to blame in FL

AND they flagrantly allowed wetlands to be destroyed in FL, diverting them into golf course ponds. I say flagrantly b/c you can see the destruction driving along most roads and hwys in FL. It's like wetlands laws don't exist there. Jeb Bush & his FL developer buds should be jailed for this.

[Demeter]

119. Ann Arbor-based McKinley bets on Florida, shifts focus away from Michigan

http://blog.mlive.com/annarbornews/2008/07/ann_arborbased_mckinley_bets_o.html


Posted by Stefanie Murray | The Ann Arbor News July 30, 2008 09:03AM


While the slumping real estate market continues to slam homeowners and investors, Ann Arbor-based McKinley Inc. is positioning itself to reap rewards - potentially millions of dollars in future profit - off the downturn.

The real estate company, with nearly $2 billion in assets, is shifting its main business away from Michigan to central Florida by buying distressed apartments in cities there where job and immigration growth is expected, Chief Executive Officer Albert Berriz said.

Business Team Leader Stefanie Murray can be reached at 734-994-6932 or [e-mail].

Over the past 18 months, McKinley has spent more than $300 million to buy 2,840 foreclosed apartment units in Florida from lenders who've taken them back from previous owners. Within the next 90 days, the company expects to buy another 345.
The acquisitions are along the I-4 corridor running from Clearwater/Tampa to Orlando.


McKinley Chief Executive Albert Berriz says company is shifting focus to Florida."We are a contrarian investor, and so we expect and seek opportunity in times of trouble," Berriz said in an interview Tuesday. "So in terms of the national real estate market, there hasn't been a more tumultuous time since World War II. (This) is where the jobs are going in Florida."
At the same time, the 40-year-old company is selling most of its assets in Michigan outside of Washtenaw County, including commercial properties in Livingston and Oakland counties. It plans to make the Ann Arbor area its sole Michigan focus, Berriz said.

In total by the end of 2008, McKinley expects to own more than 5,500 apartments in central Florida, worth $550 million, as well as 300,000 square feet of retail space with a value of $60 million. The company has invested there in spurts since 1982.

Typically, it will buy distressed properties with the goal of improving the finances, management structure and physical appearance of the apartment complex. Rents sometime increase.

Central Florida is indeed adding jobs and residents, especially in the biotechnology, simulation and digital media fields close to Orlando, said John Fremstad, vice president of technology industry development for the Metro Orlando Economic Development Commission. A total of $2 billion worth of biotechnology investment has been announced there just in the past couple of years.

McKinley Inc.

• Founded: 1968 by Ronald Weiser.
• Chief executive: Albert Berriz.
• Headquarters: Ann Arbor.
• Employees: 850 nationwide.
• Assets: $1.97 billion, 117 properties including 18,148 apartments and 6.25 million square feet of commercial space.
Source: McKinley Inc.
Two out of every three jobs coming to the state are reportedly heading to central Florida, Fremstad said.
On the other end of the I-4 corridor in Tampa, 44,300 jobs were created last year in a seven-county region including three counties that surround I-4, according to the Tampa Bay Partnership. Population around Tampa Bay is projected to grow 9 percent by 2011, compared to 2006.

Ann Arbor developer and landlord Ed Shaffran is also looking to get into Florida real estate. He recently sold an interest he held in a hotel in the state.

"The attractiveness to Florida right now, in many respects, is the bargain prices," Shaffran said. "Certainly, residentially speaking, there are just unbelievable buys and bargains, from overbuilding."

But although McKinley expects much of its future growth to be in Florida, the company is committed to staying in Ann Arbor, Berriz said, mainly because the University of Michigan makes this market economically stable.

McKinley owns and operates 5,000 apartments in the county, as well as commercial properties such as the McKinley Towne Centre, near the corner of Liberty and Division streets in downtown Ann Arbor.

In total, McKinley operates in 10 states. In the next five years, it also expects to make significant investments along the I-85 corridor between Atlanta and Norfolk, Va. Last month, the company opened a new regional office in Atlanta.

The company operates eight apartment complexes in Georgia and a multifamily community in Virginia, as well as a large shopping center in Norfolk.

Aside from buying distressed apartment complexes, McKinley has also been doing more workout deals for institutional clients like Merrill Lynch, Lehman Brothers and Freddie Mac. McKinley acts as a redevelopment agent, consultant and management company for such firms, by taking on their distressed properties and turning them around.

McKinley is working on projects involving 8,000 apartment units in 10 states, as well as some commercial properties, according to Berriz.

BIG FROG IN SMALL POND--HOPE IT CROAKS ON FLORIDA DEALS!

[UpInArms]

27. SEC extends restrictions on short-selling

http://news.yahoo.com/s/ap/20080730/ap_on_bi_ge/sec_short_selling

Federal regulators on Tuesday extended through mid-August a temporary order banning a certain kind of short-selling of the stocks of mortgage finance companies Fannie Mae, Freddie Mac and 17 large investment banks.

The Securities and Exchange Commission said the ban on so-called "naked" short selling will be in effect until 11:59 p.m. EDT on Aug. 12 and will not be extended.

Short sellers make a bet that a stock's price will fall so that they can profit from it. They borrow shares of the stock and sell them. If the price drops, they buy cheaper actual shares to cover the borrowed ones, pocketing the difference.

"Naked" short selling occurs when sellers don't even borrow the shares before selling them, and then look to cover positions immediately after the sale. The SEC order requires short sellers to actually borrow shares before selling them.

SEC Chairman Christopher Cox said the order was also helping prevent potential "distort and short" manipulation of stocks, which occurs when rumors and misinformation are used to drive down the price of a stock that has been sold short.

<snip>

The SEC initially announced the emergency order on July 15 after a perilous slide in shares of Fannie and Freddie, the government-sponsored companies that together hold or guarantee more than $5 trillion in home mortgages — nearly half the U.S. total.

...more...

[UpInArms]

28. GMAC and Ford pull back on leases as credit tightens

http://www.reuters.com/article/businessNews/idUSN2946377220080729?feedType=RSS&feedName=businessNews?sp=true

DETROIT (Reuters) - GMAC and Ford Motor Credit disclosed steps on Tuesday to cut back on auto leases in a move that leaves automakers facing the risk of even more pressure on auto sales already at decade lows.

The steps by GMAC and Ford Motor Credit stopped short of Chrysler Financial's wholesale abandonment of lease financing that shocked the struggling carmaker's dealers on Friday.

Analysts said the steps could protect the balance sheets of the auto finance companies, but cautioned the new financial constraints could make a tough market even harder for the Detroit-based automakers.

"The pullback could provide another negative for U.S. auto sales this year," Deutsche Bank said in a note for clients.

...more...

[ozymandius]

29. SEC extends limits on naked short selling

LONDON (MarketWatch) -- The Securities and Exchange Commission has extended an order designed to prevent so-called naked short selling in stocks of major financial companies, including mortgage giants Freddie Mac and Fannie Mae, for another two weeks.

The extension was announced by the federal agency late Tuesday. Originally a 10-day emergency order set to expire July 31, it now will run through Aug. 12 and won't be extended further, the SEC said.

http://www.marketwatch.com/news/story/sec-extends-limits-naked-short/story.aspx?guid=%7BCB43ED5F-0E7A-4E30-AC69-1C640B4F40EC%7D

[flashl]

30. Reuters loses right to use crucial IM technology

By THE ASSOCIATED PRESS
Published: July 30, 2008

SAN FRANCISCO (AP) -- Thomson Reuters Corp. must remove a crucial layer of software from its instant messaging service beginning Friday under a federal court order that threatens to disrupt communications within dozens of stock brokerages and banks.

The decision issued Tuesday by U.S. District Judge Colleen McMahon penalized Thomson Reuters for being two weeks late with its final licensing payment to Silicon Valley software maker FaceTime Communications Inc.

Reuters, the news and information service bought by Thomson Financial earlier this year, stitched FaceTime's computer coding into an instant messaging service that has been sold to about 100 customers in the financial services industry.

FaceTime's technology provides Reuters' instant messaging customers with two vital features -- security against computer hackers and tools to comply with a variety of government regulations that include a mandate to store the electronic conversations of securities traders and brokers.

Thought this may be more of interest to SMW than LBN.

[Demeter]

32. They Couldn't Just Pay a Late Fee and Be Done With It?

[UpInArms]

40. that is an interesting article, flashl

thanks for posting it here

:hi:

facetime news in the financial trading industry - who would have thought?

[Hugin]

59. Hopefully, Bloomberg pays it's bills...

Lately it's been my lurkage of choice.

There's a lot of info packed in that little article. Some facts unbeknownst to moi, but, then they could write an
entire Internet about facts unbeknownst to moi. :)

[ozymandius]

34. Commentary: Are we trading against Hank Paulson?

We can wag our finger that the writing was on the wall since the subprime simmer of last summer.

We can point to Alan Greenspan, who sowed the seeds of cumulative imbalances during the Asian contagion and tilled them anew after the technology bubble burst.

.....

To appreciate where we are we must first understand how we got here. Once we have -- and not many people do -- we're left with the naked truth that few, if any, viable alternatives exist.

Government officials must choose the lesser of two evils: massive intervention that will burden future generations or chaotic unwinding of risk that will bury our current one.

http://www.marketwatch.com/news/story/we-trading-against-hank-paulson/story.aspx?guid=%7BBD5A1713%2D1CDC%2D41B8%2DB5E8%2D6053741240D9%7D&dist=TNMostRead

[UpInArms]

41. morning, Ozy!

that is one dead-on article, eh?

[ozymandius]

43. Clearly. He gets it.

There is too much good information there. Though so much is inferential - the logical arrangement touches the very core of our psychological and financial dilemmas.

[UpInArms]

36. Hanky panky - Commentary: Are we trading against Hank Paulson?

http://www.marketwatch.com/news/story/we-trading-against-hank-paulson/story.aspx?guid=BD5A1713-1CDC-41B8-B5E8-6053741240D9&dist=SecMostRead

By Todd Harrison
Last update: 12:01 a.m. EDT July 30, 2008

NEW YORK (MarketWatch) -- They say the friction between opinions is where true education lies. If that's true, we've officially entered the realm of higher learning.

As both sides of the societal chasm haggle over how the market -- and, by extension, the economy -- is being handled, Treasury Secretary Hank Paulson has found himself in the center of the storm.

Perhaps that's a fitting role for the former chairman of Goldman Sachs (GS), a man who deftly sold his equity holdings tax-free when he took the position in 2006. If anyone knows how the game is played, it's Hammering Hank. When pressed on policy, he recently responded, "I'm playing the hand I've been dealt."

<snip>

You always want to know what the party on the other side of your trade is thinking. When that party is the United States of America, the stakes rise in kind.

You may not agree with the socialization efforts, but you must certainly respect them. With the election less than four months away, the eyes of the world are upon our capital markets. That lens isn't lost on policy makers who seemingly have two separate initiatives.

First, they want to break the bearish credit bets currently being made by global macro hedge funds. They're attempting to do this by squeezing stocks higher through the enforcement of the short-sale rule, an initiative aimed at 19 select financial institutions but widely expected to soon include a broader swatch of equities. See Minyanville column.

...more...

[ozymandius]

37. Study: China trade deficit cost millions of jobs

CHARLESTON, W.Va. — A study says China's soaring trade deficit cost Americans 2.3 million jobs and $19.4 billion in lost wages between 2001 and 2007.

.....

The Washington, D.C.,-based think tank blamed the trade imbalance for pushing down wages an average of $8,146.

http://www.chron.com/disp/story.mpl/ap/business/5914973.html

[Dr.Phool]

54. China cost US 2.3 million jobs, Ohio 102,700 in 6 years.

http://blog.cleveland.com/business/2008/07/china_trade_cost_23_million_us.html

The United States lost 2.3 million industrial jobs from 2001 to 2007 as a result of trade with China, according to a study by a Washington, D.C., think tank.

The employment loss in Ohio during that period totaled 102,700 jobs, according to the Economic Policy Institute's briefing paper, "The China Trade Toll." Robert Scott, an economist with the institute, was the report's author.

Ohio's six-year job losses were fifth highest of the 50 states, with 1.85 percent of total employment lost. That was 19th highest among the states, according to Scott's tabulations.

In a conference call with reporters Tuesday, Ohio Sen. Sherrod Brown, who had reviewed the report, said the data Scott gathered and his conclusions were sound. He said they suggested that "Ohio's manufacturers are playing so often now with one hand tied behind their back" in trying to compete with China and what he called its unfair trade practices.

___________________________________________________

About 6 years ago, a good friend of mine in Cleveland was the plant manager and a vice-president of a company that was the largest manufacturer of electrical commutators in the world.

Six months later, they were the largest importer of commutators in the world. His lob as cut, and the last time I saw him was 2 years ago, and he was selling real estate in Charleston, S.C.

I Wonder how that's working out now.

[Demeter]

120. Well, If They Can Put a Number On It

Ross Perot was partially right--too bad he hasn't other redeeming qualities!

[ozymandius]

45. Centex: Losses Increase, CEO Sees No Improvement this Year

Note that Centex's fiscal year starts in April, so the CEO is seeing no improvement through March 2009.

From Centex: (hat tip Ken) Centex Reports First Quarter Results

Fiscal 2009's first quarter revenues were $1.13 billion, 41% lower than the same quarter last year. The loss from continuing operations for the first quarter was $169 million ... up from a loss of $132 million ... in the previous year's fiscal first quarter. Included in the first quarter of fiscal 2009's loss from continuing operations are $80 million of impairments and other land-related charges, including the Company's share of joint venture impairments.

The land impairments continue.

From the Centex Investor Materials (from 8-K filed with SEC):

# Market conditions worsened in the quarter

# Foreclosures are rising

# Employment is weakening

# Consumer confidence is waning

# Mortgage qualification standards are tightening

# Traffic and sales have diminished

http://calculatedrisk.blogspot.com/2008/07/centex-losses-increase-ceo-sees-no.html

[ozymandius]

46. "We’ll talk to you on Friday"

FDIC Fridays

Words a banker doesn't want to hear: "We’ll talk to you on Friday"

From the NY Times: Lax Lending Standards Led to IndyMac’s Downfall:

IndyMac executives suspected the end was near even before the regulators turned up. Examiners do not warn banks they are coming, but they typically take over failing institutions on Fridays so they can have a weekend to put things in order and reopen under government control on Monday.

As the lines grew outside IndyMac branches during the week of July 7, Mr. Perry talked with an Office of Thrift Supervision official to assess the situation.

“We’ll talk to you on Friday,” the official said, according to one bank official briefed on the call. As word of the call spread through IndyMac, executives began packing their personal belongings.

[ozymandius]

47. Futures and blather

08:17 am : S&P futures vs fair value: +1.9. Nasdaq futures vs fair value: -0.5.

Futures get a boost on a report that showed an unexpected increase in jobs. ADP said nonfarm private employment rose by 9,000 in July, which is much better than the expected decline of 60,000. The ADP report does not always match up with the government's jobs report, which includes both public and private nonfarm employment, set for release on Friday.

08:05 am : S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: -0.5.

Futures suggest a flat start to the trading day as traders await the ADP private employment report at 8:15 ET.

In earnings news, Moody's (MCO), Office Depot (ODP), Office Max (OMX) and Viacom (VIA.B) topped expectations. Several companies fell short of estimates, including Comcast (CMCSA), Garmin (GRMN) and MetLife (MET). Shares of Wyeth (WYE) and Elan (ELN) are getting hammered in premarket trading on disappointing data regarding their Alzheimer drug; WYE is down 14.4% and ELN is down 32%.

In other news, the SEC extended its temporary rules to restrict naked short selling on several financial stocks and President Bush signed the housing bill into law that includes support for Fannie Mae (FNM) and Freddie Mac (FRE).

[ozymandius]

48. Analysts Overstate Earnings Once Again

We have been noting that earnings expectations are way too high for the second half of the year (Q3 +20%, Q4, +50%).

It turns out that they were also way too high for Q2:

"Halfway through earnings season, banks are still a drag, tech firms are doing OK while the overall outlook remains cloudy.

With 249 of the S&P 500 companies reporting results, second-quarter profits are on track to decline 17.9% vs. a year earlier, according to Thomson Reuters.

"I'd rate (earnings so far) as pretty bad," said Sam Stovall, chief investment strategist at S&P Equity Research. S&P forecast a 10% drop at the start of the quarter but now sees about a 20% shortfall, he said."

.....

If they were trying to illuminate the earnings picture, they might have also shown earnings ex-energy. As Bloomberg noted earlier this quarter, "Take away Exxon Mobil Corp., Chevron Corp. and ConocoPhillips and profits at U.S. companies are the worst in at least a decade."

http://bigpicture.typepad.com/comments/2008/07/analysts-overst.html

[radfringe]

51. just heard on the Bill Press show

the bushies are saying the deficits are sooooooo high because of the "BI-PARTISAN" tax stimulus package...

[wishlist]

55. Has nothing to do with trickle down economics, lowering taxes for wealthy

Those tax cuts and loopholes for the corporations, wealthier and oil companies are so effective that the Repubs want more of the same as the solution to our economic woes. (as opposed to Obama's suggestions that are sure to bring on another Great Depression according to McCain and Fiorina.)

[MattSh]

57. So we know banks are in deep shit...

What about brokerages?

Does anyone know of a site that ranks the liquidity and stability of USA stock brokers? Not just the biggies like Merrill, but also the online brokers like E-Trade and TDAmeritrade? There's been a lot of talk about bank failures and the FDIC, but what happens when a broker runs into trouble?

[Hugin]

66. I do recall last Fall...

E-trade was in trouble. IIRC some Sovereign Wealth fund bailed them out. Not sure where to go to find info as they are
unregulated and therefore lack any sort of oversight. When a broker runs into trouble... You're on your own. Pretty much.

There was an article here on the SMW a couple of weeks ago about how a couple of 'Brokers' in Fla were convicted of
totally squandering money they were supposed to invest for investors. Instead they chose to buy themselves fancy houses
and cars with the money. It was fraud and they were sentenced to do time, but, the Investors were out their money.

There has also been lobbying lately to put Investors/Stockholders at the bottom of the payoff list in a bankruptcy.
(By the CEOs who insist on being on the top of the list. Go figure, on that one.)

Missing the G-S Act?

[MattSh]

91. You're right about that...

I do remember something about E-Trade last fall.

But hell, if your money ain't safe in a bank, or in a brokerage, what to do with it?

Buy gold and stuff it under a mattress, I guess.

But if had been a good American and spent it all, then borrowed some more, I wouldn't have this problem, now would I?

:sarcasm:

[Pale Blue Dot]

93. Because of the area I live in, I'm concerned about insurance companies.

I haven't seen any reports lately about how they're doing.

[DemReadingDU]

97. me too. What if there was another Katrina?

What if the disaster was even worse, like the rumored earthquake in California where thousands could die?

What if there was no home insurance money to rebuild my house?

What if there was no life insurance money if my spouse died?

[Roland99]

60. 9:38am - ADP to the rescue!!! July jobs up 9k (uh, sure)

Dow 11,511.96 +114.40
Nasdaq 2,336.33 +16.71
S&P 500 1,275.03 +11.83
10-year 4.12% +0.07
Oil $121.35 -$0.84
Gold $910.00 -$16.40

ADP, which has been wildly off the last few months, sets the stage for the bulls.

And, hey, let's just ignore that 9k is only, oh, 150,000 short of equilibrium for the ever-expanding number of workers entering the workforce. That doesn't matter in times like these! Heck no!

[Hugin]

63. Whee!

:dance:

[Dr.Phool]

67. You kids have a good time today.

I've gotta go peddle pizza's and pasta for a while.

[Hugin]

68. Bring back some breadsticks.

:9

:hi:

[UpInArms]

70. (intervention) CHRONOLOGY-Fed actions to boost liquidity

http://www.reuters.com/article/bondsNews/idUSN3043316620080730?sp=true

Following are previous extraordinary steps the Fed has taken since August, when the credit crisis erupted:

July 13: The Fed authorizes government-sponsored entities Fannie Mae and Freddie Mac to borrow from its discount window as necessary for emergency funding. Any lending would be collateralized by U.S. government and agency securities. The Fed also agrees to take on a consultative role in setting capital requirements and financial safety and soundness standards for the two companies.

May 13: The Fed writes to Congress seeking immediate authority to pay interest on reserves held by banks at the Fed. The central bank says this move will contribute to the efficiency of the financial system.

April 9: The Fed says it is considering a plan in which the Treasury Department would borrow in excess of its requirements and deposit the surplus at the Fed. The central bank is also considering whether to issue debt under the Fed's name and seek authority to immediately pay interest on commercial bank reserves.

March 24: Fed details its role in amended JPMorgan Chase & Co's planned purchase of ailing investment bank Bear Stearns Cos. It says it will assume control of a portfolio of Bear Stearns assets valued at $30 billion, pledged as security. Any profit from the assets will accrue to the Fed, while JPMorgan will bear the first $1 billion of any losses. The Fed will finance the remaining $29 billion on a non-recourse basis to JPMorgan.

March 16: The Fed in a surprise move cuts the discount rate it charges on direct loans to banks and announces new lending program to provide credit to other big Wall Street firms. In addition, it increases the maximum maturity of discount rate loans to 90 days from 30 days. The actions are taken in concert with a decision to approve special financing to facilitate the purchase of Bear Stearns by JPMorgan Chase.

March 14: The Fed says it authorized JPMorgan Chase to borrow at the discount window on behalf of Bear Stearns, an emergency move last used in the Great Depression.

March 11: The Fed says it will accept a broader range of collateral, including home mortgages, in a new securities lending program. It says it would lend up to $200 billion to primary dealers, secured for 28 days, and accept federal agency home mortgage-backed securities and highly rated private mortgage-backed securities as collateral.

The action was coordinated with steps by the Bank of Canada, Bank of England, European Central Bank and Swiss National Bank. The Fed also says it increased existing currency swap lines with the ECB and SNB to up to $30 billion and $6 billion, respectively, and extended the term of those lines through September to help those central banks provide dollar liquidity in their markets.

March 7: The Fed says it will inject $100 billion into the banking system by increasing the size of its two term auctions of short-term funding and start a series of term repurchase transactions with primary dealers expected to be worth another $100 billion.

February 29: Fed announces two TAF auctions of $30 billion each in March. It says it intends to conduct auctions for as long as necessary to ease pressures in short-term funding markets.

February 1: Fed announces it will continue biweekly TAF auctions in February, holding the amount in each auction steady at $30 billion.

January 3: The Fed raises TAF auction amounts to $30 billion from $20 billion for each of the two auctions in January. The European Central Bank and the Swiss National Bank also offer dollar funds in conjunction with the Fed auctions.

December 12: As part of a global coordinated central bank effort, the Fed establishes the TAF to provide funds over a longer period to a wider range of banks to meet temporary shortages of funds. It also establishes foreign exchange swap lines with the ECB and SNB. The arrangements will provide up to $20 billion for the ECB and $4 billion for the SNB.

November 26: The Fed promises more than the usual year-end liquidity and says it will lift limits on how much can be lent to any one bank.

August 17: The Fed cuts the discount rate by a half percentage point and says it will act as needed to offset adverse effects on the economy arising from disruptions in financial markets.

there's more at the link

[Hugin]

73. Wow... Maybe Ozy needs to add a counter to the SMW template.

Fed/Treasury Interventions since Aug. '07 -- 15 (There may be more, but, I can't get the link to open.)

[UpInArms]

85. check your inbox

:hi:

[Hugin]

88. Thnx...

Maybe we should add in the Dollar amounts of all of the repos. :)

[Pale Blue Dot]

74. Layoffs 7/30

We probably don't even need this post anymore, since the employment picture is so rosy. But, what the heck, I'll do it for old times sake.

Acer - North Sioux City, SD and Irving, CA - 115 jobs lost (on top of 100 previously announced)

Another round of job cuts announced for North Sioux City, SD.

According to Gateway Spokeswoman, Lisa Emard, Acer has decided to eliminate an additional 115 employees from it's North Sioux City and Irvine, California plants. Emard says the affected workers are involved in Gateway's Direct Sales Unit, that's soon set to close. She says they were all given 60 days notice and a severance package.

The news comes just three weeks after Acer announced it was cutting 100 other jobs also involved with the company's Direct Sales Unit. Emard says Acer has decided to "focus exclusively on it's proven indirect sales model, transitioning Gateway's Direct Sales to it's valued channel partners."

According to Emard, Acer has also decided to sell the North Sioux City property and then lease back the space needed to continue operations. The company still has customer service, engineering and administrative operations in North Sioux.
http://www.kmeg.com/global/story.asp?s=8757049

Post-Tribune - Merryville, MI - 20 jobs lost

The cuts are a continuation of the Sun Times Media Group -- the parent of Merrillville-based Post-Tribune -- attempt to slash expenditures by $50 million. The Sun Times Media Group includes the Chicago Sun-Times, Pioneer Press, SouthtownStar, Naperville Sun, Post-Tribune and newspapers in Joliet, Aurora, Elgin and Waukegan.

In January, the company cut an unknown number of Post-Tribune union and non-union positions. Sources familiar with the situation placed the number of job cuts to near 20.

While the Post-Tribune is cutting positions, the Tinley Park-based SouthtownStar is advertising for five editorial positions, said Davis, who also serves as its publisher.

The non-union paper cut six newsroom positions, including three long-time managers, as of Friday. At least four of the six losing their jobs had been in editorial positions with the Star before it was merged into the Southtown in 2007.
http://www.nwi.com/articles/2008/07/29/business/business/doc9222a6e57d7f51bd86257494006c5a2d.txt

Several GM suppliers - Shreveport, LA - many jobs lost

hreveport, LA (KSLA) - Suppliers that make consoles, seats and dash boards for the GM plant in Shreveport say job cuts are inevitable. This just one day after GM announced it's getting rid of it's entire second shift cutting some 700 jobs at the Shreveport plant.

Debbie Carr, the Human Resources manager at Ai, said a meeting was set for Tuesday afternoon where workers would be told who would stay and who would be let go. They currently employ 181 people.

At Grupo Antolin, officials there say they employ about 40 people, 16 on the second shift. They too expect job cuts but they said more details would have to come from their corporate offices.
The same story could be told from most of the company's that supply to GM.

At Jackson Cooper Trucking, Ron Smith says they are going to wait before deciding who would be let go and who would stay. Smith says surely some field workers and drivers may be let go but that would be based on how many trucks will come off the line at GM after the second shift is cut. "Everybody's a little nervous, a little concerned about it and I think it's more the uncertainty than anything else."

Meanwhile, two drivers for Tango trucking company say Tuesday afternoon they were called in to a safety meeting where almost 60 people were told September 29th would be their last day.
http://www.ksla.com/Global/story.asp?S=8756668&nav=0RY5

Gerald's Bakery - Longmont, CO - 100 jobs lost

Gerards Bakery, which provided artisan baked goods to restaurants, unexpectedly ceased operations on July 24, leaving some 100 employees unemployed.

"It's hard work, this business of being unemployed," said Petra Chavez of the Department of Labor and Employment's Layoff Assistance Program. "This informational session on July 30 will address all of the problems associated with that job loss. It will provide workers with important information to help them get back on their feet with a plan of action."
http://www.9news.com/news/local/article.aspx?storyid=96689&catid=346

Elsevier Inc. - Orlando, Fl - 77 jobs lost

Elsevier Inc., a publisher of science and health publications, plans on cutting 77 jobs at its Orlando customer service department beginning in September.

The New York-based company's layoff, which will run through June 2009, is part of a relocation plan to move customer service operations to other offices. According to state documents, the cuts will be coming from the company's office at 6277 Sea Harbor Drive near SeaWorld.

Elsevier has two Orlando offices, one in Tampa, 22 others across the U.S. and 41 additional worldwide.
http://www.bizjournals.com/orlando/stories/2008/07/28/daily18.html

Bill's Casino - Lake Tahoe, NV - 28 jobs lost

Monday's layoffs at Bill's Casino are not a huge surprise to anyone who has been following the area's economic downtown, but numbers and predictions mean little until people lose their jobs.

The layoffs affected approximately 28 table-game dealers at Bill's, leaving the venue Monday afternoon strangely subdued in what usually is a busy time for Stateline casinos. Bill's, Harrah's and Harveys Lake Tahoe are owned by Harrah's Entertainment.

John Packer, spokesman for the venues, said the layoffs resulted from a restructure of the business. What that really means is the casino wasn't making enough money to sustain current operations.

As Packer noted, people are hanging onto their money these days, and the South Lake Tahoe leisure industry is struggling to offset the losses. Packer was reluctant to speculate how the Bill's layoffs might affect Harrah's and Harveys, but it's a pretty good bet the South Shore gaming industry will see radical changes in the next few years.
http://www.tahoedailytribune.com/article/20080730/OPINION/853322126/1059/NEWS&parentprofile=-1

MySpace - 300 jobs lost?

But the revolving doors at MySpace are moving fast. TechCrunch reported Tuesday that the company was looking to lay off as much as 5 percent of its workforce, which chief operating officer Amit Kapur confirmed to the blog later in the day. But the exec classified the move as "performance driven," meaning that fired employees would be replaced and that MySpace was actually looking to hire as many as 300 new employees.

The hiring announcement comes so close on the heels of the layoff reports that conspiracy theorists might speculate MySpace put out a release about fairly recent executive picks to temper any bad press. But when asked, a MySpace representative classified the hires as "very recent...or are locked and loaded to start soon," so it's more likely that personnel changes just happened to fall into the rumor mill at an opportune time.
http://news.cnet.com/8301-13577_3-10002318-36.html

Grede Foundries - Reedsburg, WI - 90 jobs lost 9on top of 80 previously announced

REEDSBURG, Wis. - Employees of an automotive supplier in Reedsburg are facing another round of layoffs.

Grede Foundries says it will lay off 90 employees on one of five production lines. The plant supplies castings mainly for automotive suspension systems. The foundry employs about 800 people.

Vice President Todd Sternaman says the majority of Grede's customers "have experienced deteriorating sales this year," which has forced them to significantly reduce their orders.

Grede also laid off about 80 employees in April.
http://www.chicagotribune.com/news/chi-ap-wi-foundrylayoffs,0,6367538.story

[Hugin]

77. Downright peachy...

"If a job is lost and we don't count it, is it really lost?" <-- Terrible philosophy, but, seems to be in vogue with TPTB.

My, but, you are a dry one Finnfan! :haha: You really should consider putting the sarcasm icon in your signature line. :)

[UpInArms]

92. GM to cut 15% of salaried jobs by November: report

01. GM to cut 15% of salaried jobs by November: report
11:41 AM ET, Jul 30, 2008

[UpInArms]

96. Nissan seeks to cut 1,200 jobs in Tennessee: reports

01. Nissan offering 6,600 Tenn. workers buyout packages: reports
12:47 PM ET, Jul 30, 2008

02. Nissan seeks to cut 1,200 jobs in Tennessee: reports
12:46 PM ET, Jul 30, 2008

[Pale Blue Dot]

99. Kemet Corp - Greenville, SC - 200 jobs lost

GREENVILLE, SC (AP) - Electronic capacitor manufacturer Kemet Corp. says it will cut about 640 jobs worldwide to reduce costs.

The Greenville company said in a news release Wednesday that about 200 of those jobs will be in the U.S. with the remainder at operations in Asia, Europe and Mexico.

Kemet reported a loss in its fiscal first quarter ending June 30 because of rising energy costs, pricing pressure in Asian markets and general weakening economic conditions.

The company reported a loss of $187 million, or $2.33 a share, compared with profit of $7 million, or 8 cents a share, during the same quarter last year.

http://www.wistv.com/Global/story.asp?S=8760028

[Pale Blue Dot]

100. Cadwalader, Wickersham & Taft - New York, Charlotte, Washington - 96 jobs lost (Real Estate Law)

This morning, the partnership of Cadwalader, Wickersham & Taft is slated to inform 96 lawyers — a group spanning from first-year associates to counsel — that they will be laid off. 90 of the 96 cuts will come out of the real estate finance and securitization practices, said the firm’s chairman, Chris White. Most of the affected lawyers, said White, are in the New York, Charlotte and London offices, with “one or two” in Washington. The 96 layoffs are in addition to the 35 lawyers the firm laid off in January.

Last evening, White, and the head of Cadwalader’s litigation practice, Greg Markel, invited the Law Blog to a 40th floor conference room, where they explained the move.

White said that real estate finance and securitization — areas that he referred to, alternatively, but not necessarily inconsistently, as “discrete areas of the firm” and “a large part of the practice” — grew “very rapidly” over the past five years, focusing principally in the area of commercial mortgage-backed securities. “Our finance department was involved in every major leveraged buyout last year,” said White, including Blackstone’s $23 billion acquisition of Equity Office Properties.

“All of those financings were done on mortgages on those properties, and those mortgages were turned into securities. Every major deal that was done in 2006 and 2007 was done off the back of mortgage-backed securities.” He added: “There was a frothiness that occurred as a result of the Blackstones and the Apollos using mortgage-backed securities to fund their buyouts. It was a lot like junk bonds becoming the instrument of choice in the late 80’s and early 90’s.”

http://blogs.wsj.com/law/2008/07/30/cadwalader-to-cut-96-lawyers/

[Pale Blue Dot]

103. Bingham McCutchen - Hartford, CT - 10 jobs lost (more law)

A spokeswoman for Bingham McCutchen has just confirmed that the firm’s Hartford, Conn., office has laid off 10 staff members, including managers and administrative staff. No lawyers have been laid off.

According to spokeswoman Claire Papanastasiou, there are currently more than 50 members on Hartford’s administrative staff (and that number reflects the recent layoffs).

In May, Bingham laid off some 17 staff members in its Bay Area offices. “We don’t send and receive nearly as many faxes as we did five years ago,” said San Francisco managing partner Geoffrey Howard at the time. “And that has an impact on staffing and on how we organize ourselves.”

http://blogs.wsj.com/law/2008/07/30/bingham-mccutchen-lays-off-11-staff-members/

[Pale Blue Dot]

76. My fearless prediction: By the end of the week there's going to be some REALLY bad news.

I don't know what that news will be yet, but I've seen this pattern before - release a bunch of mildly "good" news, the Dow goes way up, drop the bombshell.

[Hugin]

78. Brrr, man.

What we see (or I should say, are allowed to see) looking at the publicly traded markets is only the tiniest slice of
the real action. So, I'm going to agree.

[Demeter]

121. Do You Really Think The Bad News Can Wait for Friday?

That's some serious pumping yesterday and today already.

[TrogL]

79. 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

2008-06-18 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
2008-07-17 Thursday, July 17 0.998203 USD
2008-07-18 Friday, July 18 0.994728 USD
2008-07-21 Monday, July 21 0.998104 USD
2008-07-22 Tuesday, July 22 0.991768 USD
2008-07-23 Wednesday, July 23 0.991277 USD
2008-07-24 Thursday, July 24 0.988728 USD
2008-07-25 Friday, July 25 0.983574 USD
2008-07-28 Monday, July 28 0.978474 USD
2008-07-29 Tuesday, July 29 0.974659 USD


Current values

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

CD.Y$$ Cash     0.9777 0.9777 0.9750 0.9750 -0.0009 -0.09% 
CD.U08 Sep 2008 0.9765 0.9765 0.9740 0.9745 -0.0006 -0.06% 
CD.Z08 Dec 2008 0.9991 0.9991 0.9991 0.9744 -0.0016 -0.16% 
CD.H09 Mar 2009 0.9757 0.9757  0.9742       -0.0014 -0.14% 
CD.M09 Jun 2009 0.9880 0.9880 0.9880 0.9741 -0.0013 -0.13% 
CD.U09 Sep 2009 0.9865 0.9865 0.9865 0.9740 -0.0012 -0.12% 
CD.Z09 Dec 2009 0.9845 0.9845 0.9845 0.9739 -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 0.9693 0.9693 0.9693 0.9693 -0.0042 -0.43%   
EURO/BRITISH POUND (NYBOT:GB)
GB.U08.E Sep 2008 (E) 0.78705 0.78705 0.78705 0.78705 -0.00155 -0.20%   
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.U08.E Sep 2008 (E) 167.590 167.590 167.345 167.345 -0.215 -0.13%   
EURO/US$ (SMALL) (NYBOT:EO)
EO.U08.E Sep 2008 (E) 1.55520 1.55520 1.54930 1.55210 -0.00215 -0.14%    

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

The September Canadian Dollar was slightly higher due to technical short covering overnight as it consolidates some of this week's decline. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near-term. If September extends this month's decline, June's low crossing at 96.82 is the next downside target. Closes above the 20-day moving average crossing at 98.66 are needed to confirm that a short-term top has been posted. First resistance is the 10-day moving average crossing at 98.59. Second resistance is the 20-day moving average crossing at 98.66. First support is Tuesday's low crossing at 97.28. Second support is June's low crossing at 96.82.

Analysis

Nothing much going on.

[Pale Blue Dot]

81. $625,000 house on a street wrecked by subprime loans? (A MUST READ)

It was hard to single out the important relevant paragraphs from this article, so if you're interested, please click on the link. This is scary stuff:

A year ago, the house at 920 W. Camile St. in Santa Ana was bank-owned, deserted and tagged with gang graffiti, a symbol of how the subprime lending bonanza had blighted a city block.

In October, the house sold at auction for $304,500, little more than half what a buyer using 100-percent subprime financing paid in 2006.

Today, 920 W. Camile has been renovated, repainted and floored with faux marble. It resold in January for $625,000, according to county records – a $125,000 down payment and a $500,000 mortgage from Wells Fargo Bank.

The owners and residents are Mario and Paula Gomez, both garment workers at St. John Knits in Irvine and parents of three sons. The Gomezes also own 922 W. Camile, a home they bought in a 1998 foreclosure sale for $109,600. They are now landlords, and have staked their financial faith and future on Camile Street.

A year ago, an Orange County Register investigation concluded that this block of Camile Street had one of the highest rates of subprime mortgagesin the nation.

Headlined "Street of Broken Dreams," the investigation showed what happened after borrowers racked up 79 mortgages worth $19million on 17 properties between 2002 and 2007.

Lots more at the link:
http://www.ocregister.com/articles/camile-house-mortgage-2104411-fargo-wells

[KoKo]

105. A very odd story. If this is still going on....how and why?

scary...

[Pale Blue Dot]

82. Paterson Warns of Economic Crisis (New York State)

In a rare, brief televised address, Gov. David A. Paterson announced on Tuesday afternoon that he would call the Legislature into an emergency session on Aug. 19 to address what he called an economic and budget crisis confronting New York State as a result of plummeting revenues and rising costs.

The new governor avoided any mention of new taxes, instead arguing forcefully for austerity. He said he was calling on the Legislature to reduce the size of the state workforce; cut agency spending; reduce property taxes for homeowners; aid New Yorkers with the soaring costs of home energy; and even consider public-private partnerships that would take over state assets.

Mr. Paterson predicted that the budget shortfall for the next fiscal year, starting April 1, would be $6.4 billion — much higher than the $5 billion projected when he took office unexpectedly in March, replacing Gov. Eliot Spitzer, who resigned.

“When I travel across the state, I see communities suffering,” Mr. Paterson said in his address, from the Red Room of the State Capitol in Albany. “Everywhere I go, I meet people who are losing their jobs and their homes. I meet families who are forced to pay more for gasoline and for food while their paychecks stay the same. Next winter, some of these families will have to choose between heating their homes and feeding their children. The rising cost of health care means that they cannot afford to get sick.”

http://cityroom.blogs.nytimes.com/2008/07/29/paterson-warns-of-economic-crisis/index.html?hp

This highlights something that's been bothering me since I started doing the layoffs post. The mantra all over the country with state and local governments is "We can't raise taxes! People are suffering!" The suffering of those being laid-off by the state or losing their services from the state never seems to be taken into account.

[Tansy_Gold]

117. You reminded me of an observation I was going to make last night. . . .

while BF and I were listening to the MSNBC blather about McBush's cute little comment to the child about raising taxes.



Wouldn't it be refreshing if a candidate -- or a president-elect or :gasp: a President -- announced that no, he's not going to raise taxes on those who are hurting, those who are seeing 25% of their net income go to gasoline pumps and 50% of their net income go to food, leaving NOTHING left for health insurance and heating oil and new tires and new clothes and savings, never mind RENT or MORTGAGE PAYMENTS.

Wouldn't it be refreshing if that candidate picked up that innocent child who had been bribed to mouth that RW talking point and said right into the news camera:

"America, I'm not going to raise taxes on the working people who have done so much for the past 240 years to make this a great country. But damn it, I sure as hell am going to raise taxes on the idle rich, the hedge fund managers and the stock brokers and the options manipulators and the parasite CEOs and the outsourcers and the offshorers, the corporations and the LLCs and the LLPs and the Grand Cayman 'residents' who do business here and suck all the profits into their private tax shelters and numbered accounts.

"Americans, I'm not going to raise taxes on the working people who have watched their dreams vanish in the smoke of abandoned factories and foreclosed houses and crumbling bridges. But damn it, I sure as fucking hell am going to raise taxes on those who have paid the least and enjoyed the most."

We need to have taxes raised, but someone needs to point out that there are those who are paying an unfair burden already and that there are others who are paying too damn fucking little.


Tansy Gold

[Demeter]

122. I Hear Obama Is Looking for a Good VP--I Nominate Tansy Gold!

She can be the Economic/Energy Czar and beat economists over the head for us. With her usual femine grace and witty style, of course, she will be the perfect complement to Barack.

Take that, Dick Cheney!

[Tansy_Gold]

128. ROFLMFFAO!!!

Unfortunately, Tansy has WAAAAAAAAAAY too many skeletons in her closet to pass the vetting committee. :rofl:


Tansy Gold, who thinks one of those skeletons is pulling into the driveway right now. ...

[Demeter]

130. If Cheney Can Pass, So Can You, Tansy!

After all, you're golden!

[Tansy_Gold]

131. Ah, but you forget, Demeter -- cheeeeeeney vetted himself!

I don't think they'd let me do that. . . . . . . . .



Seriously, though, I think if we could get the Obama campaign staff to READ the DU SMW thread EVERY FRICKIN' DAY from now until the election, I think we'd establish one helluva dialogue and maybe --- MAYBE --- effect some real change, not just the bullshit campaign slogan brand of "change."

Because sadly, I think too many Americans have become like victims of abuse -- not only have we learned to suffer in silence, but we've developed a really bad case of learned helplessness. We've given up. We wouldn't take the chance to escape if it were handed to us on a silver platter because we've forgotten what to do with it. We're waiting for a pied piper to lead us to the promised land but we've forgotten how to walk behind him. We've forgotten how to walk at all.


Tansy Gold, who isn't really

[Hugin]

132. Hold on! I'll vet you...

Where's my vetting wand? :lookingaround:

Darn, I just had it yesterday.

[Tansy_Gold]

133. hahahahahahahahahahahahahaha!

Maybe we could do VP by committee??? There are a lot of people here on SMW who know one fucking helluva lot more than I do about shi-, er, stuff.

You vet me, Prag, and I'll vet Demeter and she can vet Ozy and he can vet UIA. . . . . .


BF has tried to get me to run for political office for the past eight or ten years but being a left-wing Dem/socialist is a uphill climb in Arizona, and I wouldn't under any circumstances take a DC job that would keep me away from my adopted home state. I really do love my desert ---- and unless I can find the $$$$$ to finance moving me, four dogs, tons of rocks and wood and books and tools to southern Spain, I'll be here for the duration.


Tansy, desert rat, Gold

[antigop]

83. Fed's Bernanke holds Canadian Treasury bonds...just in case?

http://www.latimes.com/business/la-fi-bernanke22-2008jul22,0,213812.story

If Federal Reserve Chairman Ben S. Bernanke leads the U.S. into financial ruin, he'll still have his Canadian Treasury bonds to fall back on.

The Fed on Monday issued Bernanke's annual financial disclosure report, which shows that the central bank chief is well-off compared with most Americans -- but a pauper compared with the Wall Street chief executives who are depending on the Fed to save their bacon.

Bernanke and his family listed financial assets of $1.2 million to $2.5 million in 2007, according to Bloomberg News. Federal rules require only that Bernanke and other central bank officials report the range of their holdings, not a specific dollar total.

Bernanke, a former Princeton University professor, reported that his two largest assets were annuities: TIAA Traditional and the CREF Stock Large Cap Blend. Each was worth between $500,001 and $1 million, according to Bloomberg.

He also listed Canadian Treasury bonds as an asset. That might lead some of his critics to wonder, tongue in cheek, whether he has an emergency plan to cross the border if things get really bad.

[TalkingDog]

90. an emergency plan to cross the border

Considering he can access those from anywhere, I'd say he might want to head somewhere tropical so he can get used to the heat.

A little warm up exercise for his imagined afterlife.

[antigop]

95. FASB nixes Jan. 1 start date for consolidating off-balance sheet entities

http://financialweek.com/apps/pbcs.dll/article?AID=/20080730/REG/769034436/1036

The Financial Accounting Standards Board has delayed by a year the deadline by which companies will have to consolidate qualified special-purpose entities under FAS 140.

The new rule, designed to help investors more easily gauge a company’s liabilities from off-balance-sheet securitized assets, was slated to go into effect Jan. 1 for certain preparers, with a one-year delay for existing QSPEs.

But during its meeting this morning, FASB nixed that timeline, which had been approved in June.

“There was pressure and interest from Washington for this change of heart,” Jim Vogel, an analyst with FTN Financial Group, wrote in an e-mail. “But it’s not clear how much FASB was bowing to that as they were to complaints of whipsawing accounting changes at financial institutions, which may soon have the option of moving to ” rather than complying with U.S. GAAP.

Mr. Vogel added that the “SEC has pushed originally for fast action,” which likely contributed to the initial deadline. Some corporate executives had criticized that time frame as too short to be practical.

[Pale Blue Dot]

98. Wow. I think this may be the biggest news of the day.

And only a select few are going to hear about it and even fewer are going to understand it.

[DemReadingDU]

107. So the SuperRich need more time to move their wealth?

I guess the superrich must first exchange the remaining toxic securities for healthy securities, then move the good securities offshore to a supersecret account. After that, then the global meltdown occurs.

[antigop]

110. The executives can get their year-end bonus? n/t

[Tandalayo_Scheisskopf]

106. 2:30PM-ish Commodities

CLU08.NYM Crude Oil Sep 08 125.20 1:25pm ET Up 3.01 (2.46%)
HOQ08.NYM Heating Oil Aug 08 3.5004 1:24pm ET Up 0.0282 (0.81%)
NGU08.NYM Natural Gas Sep 08 9.198 1:25pm ET Up 0.068 (0.74%)
PNQ08.NYM Propane Gas Aug 08 1.75 12:45pm ET 0.00 (0.00%)
RBQ08.NYM RBOB Gasoline Aug 08 3.102 1:23pm ET Up 0.0943 (3.14%)

CU08.CBT Corn Sep 08 600.00 2:14pm ET Up 6.00 (1.01%)
OU08.CBT Oats Sep 08 385.00 2:17pm ET Down 1.00 (0.26%)
RRU08.CBT Rough Rice Sep 08 16.60 2:15pm ET Down 0.03 (0.18%)
SMQ08.CBT Soybean Meal Aug 08 379.50 2:20pm ET Up 3.00 (0.80%)
BOQ08.CBT Soybean Oil Aug 08 58.25 2:15pm ET Up 0.42 (0.73%)
SQ08.CBT Soybeans Aug 08 1,393.50 2:14pm ET Up 9.25 (0.67%)

A little Commodities news from Bloomberg:

Crude oil rose more than $5 a barrel after the U.S. Energy Department reported the first decline in gasoline inventories in five weeks.

Supplies fell 3.53 million barrels to 213.6 million barrels last week, the department said today. Stockpiles were forecast to rise 350,000 barrels, according to a Bloomberg News survey. Crude supplies fell less than forecast and inventories of distillate fuel, a category that includes heating oil and diesel, rose.

``We are focused on the gasoline number because it had the greatest variance from expectations,'' said Tim Evans, an energy analyst for Citi Futures Perspective in New York. ``This is the first bullish gasoline news in weeks.''

Crude oil for September delivery rose $5.06, or 4.1 percent, to $127.25 a barrel at 2:20 p.m. on the New York Mercantile Exchange. Oil is heading for the biggest gain since June 6. Futures touched $120.42 a barrel yesterday, the lowest since May 6. Prices are up 65 percent from a year ago.

U.S. fuel consumption averaged 20.2 million barrels a day in the past four weeks, down 2.4 percent from a year earlier, the department said.

Gasoline demand in the U.S. peaks during the summer, when Americans take to the highways for vacations. The so-called driving season lasts from the Memorial Day weekend in late May to Labor Day in early September.

`Eye-Opening' Number

``The gasoline number is eye-opening,'' said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. ``It's getting most of the attention, but the driving season is coming to an end with only one month left and supplies are still ample.''

---

Goldman Sachs Group Inc., the world's biggest securities firm, said oil will recover to reach $149 a barrel by the end of this year because consumer demand has been ``restrained, but not destroyed,'' by record prices.

``The gasoline number obviously started the move higher,'' said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. ``It's also part technical because we failed to take out $120. The Goldman Sachs Group Inc. is also a part of what's moving things higher.''
---

It must be noted here that GoldmanSachs also has a HUGE position in commodities and especially in the Physical Possession of Oil. In other words, with their statements, GoldmanSachs is being allowed to openly and cravenly manipulate the commodities markets to their financial benefit. Why this is not apparent to the genuii in Washington only serves to point out the essential corruption that is rife in our political and regulatory systems.

[antigop]

109. White House confident in U.S. bond rating

http://money.cnn.com/2008/07/30/news/economy/US_bond_rating.ap/index.htm?postversion=2008073014

The Bush administration expressed confidence Wednesday that the United States would be able to maintain its top-notch credit rating even as the government scrambles to find new ways of expanding debt sales to cope with soaring budget deficits.

"It is a huge advantage to have that AAA-status and we are committed to that," Anthony Ryan, Treasury's acting undersecretary for domestic finance, told reporters as he unveiled plans for financing $171 billion in borrowing during the current July-September quarter, the second highest total on record.

Those borrowing needs have exploded this year as the government has had to cope with a sagging economy and the need to finance more than $90 billion in economic stimulus payments made over the past three months to individuals in an effort to keep the country out of deep recession.

Those problems are occurring at the same time that global financial markets have been roiled by reports of multibillion-dollar losses by giant banks and investment houses, reflecting soaring losses on mortgage debt.

Oh, I feel sooo much better now.

[radfringe]

113. must be pretty bad then...

whenever the bushies put on a "half glass full" happy face about something - you know it's worse than you think

[antigop]

116. that's what I was thinking..... n/t

[ozymandius]

126. As I was about to say.

Boastful declarations like this thinly veil multiple horrors.

[Hugin]

129. Are we still thinking this was a set-up to the wholesale destruction of the...

Social Safety net? The theory was they would use current events and one of their puppet credit rating agencies to
break it's back.

I haven't heard otherwise.

[ozymandius]

134. I cannot believe that mismanagement on this scale is anything other than intentional.

The cretins who write this administration's economic policy have loudly proclaimed their contempt for everything FDR said and did. And beyond FDR - equal contempt has been spoken about everything TR did for worker and product safety, unspoiled wild spaces, etc.

This belligerence is absolutely intentional.

[Tansy_Gold]

136. Not sure about anyone else, but I do. The shrugger model. . . . .

. . . . . doesn't require a blueprint for the future. It's all about destruction, not about rebuilding. Kinda like Iraq, ya know?


TG

[Pale Blue Dot]

123. Somehow we missed a credit union failing on Monday.

Thanks to Harry123 in the Economy forum for this heads up (and check out the eerie postscript):

July 28, 2008, Alexandria, Va. -- The National Credit Union Administration (NCUA) announces that the agency placed New London Security Federal Credit Union of New London, Connecticut, into liquidation today.

NCUA’s Asset Management and Assistance Center will issue checks to individuals holding verified share accounts in the New London Security Federal Credit Union. Through NCUA’s National Credit Union Share Insurance Fund, credit union members’ deposits are insured to at least $100,000 per account.

NCUA made the decision to liquidate New London Security Federal Credit Union and discontinue its independent operations after determining that the credit union is insolvent. It has no prospects for restoring viable operations.

At the time of liquidation, the credit union, chartered in 1936, served 365 residents of the New London, Connecticut area, and had reported assets of $12.7 million.
http://www.ncua.gov/news/press_releases/2008/MR08-0728.htm

And now the postscipt. What does this remind you of?

The 82-year-old broker who handled investments for the New London Security Federal Credit Union committed suicide hours after federal regulators closed the lender.

Edwin F. Rachleff, a broker with A.G. Edwards Inc. who handled the credit union's investments for decades, jumped from a window on the top floor of an 11-story apartment building for seniors in New London at about 6:30 p.m. on July 28, The Day newspaper said. The office of the state's chief medical examiner told Bloomberg that it had ruled Rachleff's death a suicide.
http://www.creditwritedowns.com/2008/07/credit-unions-arent-immune.html

:scared:

[ozymandius]

125. How horrible.

Echoes of 1929. Although the story about brokers jumping to their deaths has been wildly exaggerated, it did happen. Mr. Rachleff had been the steward of the credit union's money for decades. Obviously the man had seen tough times. What made this time different?

[DemReadingDU]

137. Very sad. Maybe he drank the kool-aid

Maybe he believed the spin that while there is some unrest in the markets, don't worry about it. The markets always go back up.

Maybe Mr. Rachleff realized when the credit union went bankrupt, that perhaps the market wasn't going to go back up for a very very long time, if ever.

:shrug:

[skoalyman]

138. sounds like it then came the

moment of clarity hope it doesn't get as bad as the scene in the movie the happening were one jumps then it starts raining people.:scared: :hi:

[ozymandius]

124. The End.

Dow 11,583.69 Up 186.13 (1.63%)
Nasdaq 2,329.72 Up 10.10 (0.44%)
S&P 500 1,284.26 Up 21.07 (1.67%)
10-Yr Bond 4.0480% Up 0.0040
NYSE Volume 5,640,971,500
Nasdaq Volume 2,280,859,500

4:30 pm : Investors looked past a strong rebound in crude prices to focus on data that showed an unexpected gain in nonfarm private payrolls and the Fed extending its liquidity measures to Wall Street.

Despite a smaller-than-expected decline in crude oil stockpiles, oil prices climbed as much as 4.3% during the session to make their largest one day advance since trending downward from historic highs reached earlier this month. Crude had actually been down more than 1%, below $121 per barrel, but finished its session near $127 per barrel, which is still almost 16% below its record high.

The rebound in oil prices helped the energy sector make a 5.6% advance. Investors have rotated out of the energy sector in recent sessions, but oil’s rebound induced buying in large names like Exxon Mobil (XOM 84.38, +3.48) and Chevron (CVX 87.26, +4.42).

Conversely, oil sensitive industries fell out of favor. The S&P 500 automobile manufacturing index slipped 3.8%, while the Amex Airline Index dropped 4.9%.

Broad-based buying was largely influenced by the latest ADP employment report that showed an unexpected 9,000 increase in July private nonfarm jobs. Meanwhile, economists were expecting a 60,000 decrease in jobs. Though the ADP report has not been consistent in correctly predicting the government's jobs data, which will be announced Friday, ADP's announcement bolstered expectations that the government's report will show a smaller-than-expected decline in employment.

Also providing support to the session’s optimism was news the Fed is extending the length of its Term Securities Lending Facility program through Jan. 30 and is introducing longer terms to maturity for its Term Auction Facility in the face of continued fragility in the markets.

Separately, President Bush signed the housing bill into law, giving support to Fannie Mae (FNM 12.21, +0.61) and Freddie Mac (FNM 8.73, +0.31), while the SEC is extending its temporary restriction on naked short selling on financial institutions.

The financial sector gained 2.0% as thrifts and mortgage players collectively climbed 4.1% and diversified banks climbed 3.8%. Investment banks and brokerages advanced 3.5%.

The Nasdaq lagged the Dow Jones and the S&P 500 during Wednesday’s action. Weakness among components Garmin (GRMN 35.19, -9.87), Cisco (CSCO 22.17, -0.25), and Electronic Arts (ERTS 44.29, -3.11) offset strength in Comcast (CMCSA 20.07, +0.89). Despite missing the consensus earnings estimate Comcast made a marked advance.DJ30 +186.13 NASDAQ +10.10 NQ100 +0.4% R2K +0.6% SP400 +1.5% SP500 +21.06 NASDAQ Adv/Vol/Dec 1559/2.27 bln/1200 NYSE Adv/Vol/Dec 2097/1.47 bln/1044