STOCK MARKET WATCH, Wednesday September 12

[ozymandius]

Source: du

Wednesday September 12, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 498 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2441 DAYS
WHERE'S OSAMA BIN-LADEN? 2153 DAYS
DAYS SINCE ENRON COLLAPSE = 2114
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

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AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON September 11, 2007

Dow... 13,308.39 +180.54 (+1.38%)
Nasdaq... 2,597.47 +38.36 (+1.50%)
S&P 500... 1,471.49 +19.79 (+1.36%)
Gold future... 721.10 +8.90 (+1.23%)
30-Year Bond 4.65% +0.01 (+0.15%)
10-Yr Bond... 4.36% +0.04 (+0.93%)






GOLD, EURO, YEN, Loonie and Silver

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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

The View From 30,000 Feet
BY FRANK BARBERA, CMT

Since mid August, the US Stock market has recovered nearly 60% of its prior decline, which spanned a mid July high near 1550 to a mid August low at 1370 using the S&P 500. For the S&P, the recovery from 1370 to 1460 (and as high as 1496 on Sept 4th), has set fear aside of the Credit Crunch, and renewed investor's optimism. In foreign markets, the recovery has been even more strongly pronounced, with Asian stock markets like Hong Kong, Korea and Singapore (not to even mention China) moving back to the vicinity of their former highs. So is that really all we have to deal with, a 10% decline in the US Market, and an even more shallow sell off in foreign markets? Could we already be getting back onto the path to prosperity? In our view, the answer to that question is a resounding “Hell No,” and with it a major warning to very short term oriented investors to step back and take in the view from 30,000 feet, as there is very serious pain potentially directly ahead.

-chart-

But before delving into the markets, let’s start with a look at the recent developments in what has been the ongoing, and to date, unrelenting change in the state of global credit markets. While most of us do not have the time to read any number of newspapers each day, for those watching the state affairs in the credit markets, the state of affairs is somewhere between “bleak” and “grim” with wide scale overtones for the outlook on future global growth. Of course, who could blame the average individual for not seeing what has taken place largely behind the cover of closed doors over the last few years? Until the last few weeks, the terms CLO (Collateralized Loan Obligations ), CDO (credit default obligation), ABCP (asset backed commercial paper), ABS (asset back securities), CDS (Credit Default Swaps), CPDO’s (Constant Proportion Debt Obligations), SIV’s (Structured Investment Vehicles), SIV Lites, and Conduits, have been far off from the public’s investment view. Yet, it is these derivatives and holding entities which are wholly intertwined in the spider web that is the “structured finance” credit markets of the new millennium. To this end, we see no hint that the credit default worries centering around CDO’s and infecting the ABCP market have abated. Instead, over the last two weeks, the spreads on London based Libor 3 month borrowing over Fed Funds have continued to widen out.

-cut-

In addition to the widening LIBOR – Treasury Spreads, the more than 2 Trillion dollar Commercial Paper market is still a long way from healed. In fact, even as the stock markets of the world have rallied over the last few weeks, Commercial Paper to Treasury Spreads have continued to widen out, suggesting a continued credit crunch. In our view, the fact that failing confidence has continued to put upside pressure on yields, and is now directly impacting (negatively) the Adjustable Rate Market, suggests a dim view is appropriate for the US Economic Outlook moving forward.

After all, in recent years, much of the economic growth seen in the United States has been spending derived from Mortgage Equity Withdrawal (MEW), as home owners tapped the accumulated appreciation in their homes like an ATM machine. As the credit crunch forces more homes into foreclosure, and forces more Home Equity borrowing to pay higher yields, the resulting slow down in discretionary spending is likely to be profound. This morning Fed Chairmen Bernanke gave a speech aimed at encouraging Americans to save more in order to reduce the cavernous size of US Global Trade Imbalances. Of course for years Asset Inflation has replaced real savings in the US, as the Savings Rate has moved into negative territory. Unfortunately, any cut back in spending to rebuild the Savings Rate at home will have profound negative implications for future US economic growth, as estimates suggest that for each one point gain in the Savings Rate, GDP will fall by .65 to .70 basis points. Assuming an advance back to a “normal” savings rate of 7% to 8% would imply a swan dive in economic output consistent with a very deep economic contraction.

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

[ozymandius]

2. Today's Report

10:30 AM Crude Inventories 09/07
Briefing Forecast NA
Market Expects NA
Prior -3972K

http://biz.yahoo.com/c/e.html

[ozymandius]

3. Oil prices continue to rise after record

SINGAPORE - Oil prices extended gains Wednesday after finishing at a record close in the previous session on worries about tight supplies.

An announced increase in output by the Organization of Petroleum Exporting Countries failed to calm market concerns about the ability of producers to meet strong winter demand in the final quarter of the year, analysts said.

Light, sweet crude for October delivery added 13 cents to $78.36 a barrel in Asian electronic trading on the New York Mercantile Exchange by midmorning in Singapore.

The contract on Tuesday rose 74 cents to settle at $78.23 a barrel — 2 cents higher than the previous closing record, set July 31.

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

[ClintonTyree]

10. So....the market was caught completely by surprise...

...by the fact winter is coming? It seems that every year the market worries about producers being able "to meet strong winter demand in the final quarter of the year". You'd think that sooner or later they'd catch on to this "winter thing" and stop worrying so much about it. :shrug:

[Roland99]

38. Forecasting? Planning? Who the heck are you??

A realist??

[UpInArms]

37. Oct. crude up 0.9% at a record intraday high of $78.90/brl

02. Oct. crude up 0.9% at a record intraday high of $78.90/brl
10:07 AM ET, Sep 12, 2007 - 4 minutes ago

03. Oct. natural gas gains 4.7% at $6.21/mln BTUs
10:07 AM ET, Sep 12, 2007 - 4 minutes ago

[UpInArms]

57. Oct. crude hits record high of $79.45/brl, up $1.22, or 1.6%

02. Oct. crude hits record high of $79.45/brl, up $1.22, or 1.6%
12:46 PM ET, Sep 12, 2007 - 13 minutes ago

03. Oct. crude last up 90 cents at $79.13/brl after $79.20 high
12:33 PM ET, Sep 12, 2007 - 26 minutes ago

04. Oct. natural gas gains 3.2% to $6.125/mln BTUs
12:33 PM ET, Sep 12, 2007 - 26 minutes ago

[ozymandius]

4. Group: Housing woes may cause recession

LOS ANGELES - Ongoing weakness in the housing market will push the national economy to the brink of recession, but growth in other areas should put the country back on a slow road to recovery by 2009, according to an economic forecast released Wednesday.

The quarterly Anderson Forecast by the University of California at Los Angeles predicts growth in the gross domestic product of just over 1 percent for the fourth quarter of 2007 and first quarter of 2008.

Economic growth will remain "tepid" for the remainder of 2008 and return to 3 percent in 2009, said David Shulman, senior economist for the forecast.

That growth is just above the traditional definition of a recession — two consecutive quarters of decline in gross domestic product.

http://news.yahoo.com/s/ap/20070912/ap_on_bi_ge/economic_forecast

[ClintonTyree]

11. Here's something I don't understand.

..."Still, strong global demand for U.S.-produced goods and reduced domestic demand for imports should fuel economic growth of about 1.8 percent for 2008, according to the report".

What does this country produce anymore other than bombs, missiles, and other instruments of death? :shrug:

I can't for the life of me think of anything our country produces that could make a dent in the trade imbalance. Could someone enlighten me?

And if there's reduced demand for imports it's largely due to the fact that Americans can't afford these imports, correct? :shrug:

This report confuses me.

[Rydz777]

39. Bombs and pornography are our two major exports. We lead

the world in both. One problem, however - as pointed out by Sen. Bayh (D-IN) - is that our best bombs, the so-called "smart bombs," are made with electronic components which we import from China.

[Hugin]

45. Well, we still have top notch...

Pr0n! We love you long time, Joe! :)

[Hugin]

43. There they go... Blaming housing again.

I still say the housing credit crunch financed the record oil company profits.

Bait and switch.

[ozymandius]

5. Debt-laden homeowners save plastic first

NEW YORK - Conventional wisdom has it that people will do everything to keep their homes. Not any more.

The proliferation of no-money-down home loans over the past few years, coupled with the current housing downturn, is giving rise to a new mentality: People will risk losing their homes while doing everything to keep their credit cards.

"This is the biggest surprise we're seeing," said Elizabeth Schomburg, senior vice president of the Family Credit Counseling Service in Chicago. "People are actually coming to us with situations where they are current on their credit cards but are in foreclosure."

That partly explains why credit-card delinquencies have remained low — despite the recent signs of trending up — while banks and mortgage lenders are repossessing a record number of homes after years of lending excesses. As some consumers see it, they need to hang on to their plastic as hard as they can, especially at a time when faltering house prices are making it harder for people to access credit through refinancing or borrowing against homes.

However, U.S. consumers' increasing reliance on revolving credit also means banks are more vulnerable to credit-card default in the event of a broader economic slowdown, posing another threat to Wall Street already spooked by escalating home-loan defaults. Just like mortgages, the receivables generated by credit cards are often packaged into securities and sold to investors worldwide.

http://news.yahoo.com/s/ap/20070912/ap_on_bi_ge/homeowners_credit_cards

[ozymandius]

6. Health care premiums rise 6.1 percent

The increasing cost of health insurance is putting coverage out of reach for many small to midsize companies and their workers, even though the rise in premiums this year was the lowest increase in eight years.

Since 2001, the cost of premiums has gone up 78 percent, far outpacing a 19 percent increase in wages and 17 percent jump in inflation, according to a survey released Tuesday by the Kaiser Family Foundation, a health care research group that annually tracks the cost of health insurance.

This year, the cost of premiums paid by workers and their employers was up 6.1 percent, while wages rose an average of 3.7 percent and inflation went up 2.6 percent, the survey said. Kaiser estimates that between 1 million and 2 million people join the ranks of the uninsured every year.

-cut-

Insurance costs probably will rise again next year, according to the survey. Many of the more than 3,000 companies surveyed said they planned to make significant changes to their health plans and benefits, and nearly half said they were very or somewhat likely to raise premiums.

This year, premiums averaged $12,106 for a family of four, with workers paying, on average, $3,281 of that. Premiums to cover a single person cost $4,479, with employees paying $694.

http://news.yahoo.com/s/ap/20070911/ap_on_bi_ge/insurance_rising_premiums

Absolutely shameful! This is how much either an individual or a family spends even if we do not access insurance coverage.

[ozymandius]

7. Japanese stocks fall on Abe resignation

TOKYO - Japanese stocks fell Wednesday after Prime Minister Shinzo Abe announced he would resign after a string of damaging scandals and a humiliating electoral defeat.

The benchmark Nikkei 225 index slid 80.07 points, or 0.50 percent, to close at 15,797.60 points on the Tokyo Stock Exchange.

Tokyo stocks initially rallied after the first media reports that Abe intended to step down came early in afternoon trade, but soon retreated.

"Abe's resignation would mean that policy decisions regarding such matters as the budget deficit and the possibility of a consumption tax hike will be up in the air for a while," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Securities. "This is absolutely negative to the stock market."

Others said Abe's exit could prove positive in the longer term if it clears the air and allows the ruling Liberal Democratic Party to stabilize after a series of political missteps. Four Cabinet minister were forced to resign over the past nine months, and one — his first agriculture minister — committed suicide over a money scandal.

http://news.yahoo.com/s/ap/20070912/ap_on_bi_ge/japan_markets

[ozymandius]

8. Stock futures slip after Tuesday rally

NEW YORK - U.S. futures eased lower Wednesday, with investors poised to hunt profits following sharp gains on Wall Street a day earlier.

Without major economic news, investors were likely to continue placing bets on what the Federal Reserve will do next Tuesday when the central bank meets to discuss interest rates. A lowering of the federal funds rate is now widely expected after more than a year without change.

Trading has been marked by sharp volatility in recent weeks as investors search for a sense of the real economy's strength amid the ongoing housing slump and credit market problems.

http://news.yahoo.com/s/ap/20070912/ap_on_bi_st_ma_re/wall_street

[ozymandius]

9. futures numbers

06:20 am :
S&P futures vs fair value: -4.7.

Nasdaq futures vs fair value: -6.0.

[Buttercup McToots]

12. USD $79.30....

Shall we start the day?
:donut:

[DemReadingDU]

13. What keeps the dollar from freefalling?

The Fed & PPT usually keep the stock market from plunging. So is there anyone who keeps the dollar from plunging?

[UpInArms]

18. it is all open and hot air

that keeps it floating - it is backed only by "faith and confidence" in the USoA.

[Warpy]

49. Mostly hot air and wishful thinking, I'm afraid

It's been the standard currency for so long that people are loath to admit it's no longer a solid one.

Eventually it will have to fall to a level befitting a debtor nation with little industry if the current economic dogma doesn't die quickly and ignominiously and good sense return to our elected officials.

Since that is as likely as the Pope on a pogo stick, I'm betting on a continued slide and increasing inflation in everything but housing and wages.

[Phx_Dem]

60. Couple of reasons

it's a vehicle to store vast amounts of wealth and because of consistent superior productivity growth in the US.

[UpInArms]

14. dollar watch

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

Last trade 79.438 Change -0.234 (-0.29%)

Settle Time 15:24 Open 79.683

Previous Close 79.672 High 79.740

Low 79.430 2007-09-12 07:14:16, 30 min delay

52wk High 87.3 52wk High Date 2006-10-13

52wk Low 79.603 52wk Low Date 2007-09-11

Will the US Dollar Continue to Fall?

http://www.dailyfx.com/story/bio1/Will_the_US_Dollar_Continue_1189545536128.html

The US dollar came within a hair of 1.3855, its all time record low against the Euro. By the end of the week we expect to see either see a new record low or a double top. Over the past five trading days, the US dollar has not seen one positive day as the concerns about the US economy continue to grow. At this critical juncture, the primary question on everyone’s mind is, “Will the US dollar continue to fall?” Although 1.3850 is a significant resistance, we think that this level will be reached once again and it is just a matter of time before it will be broken. The 185 point rally in the stock market indicates that equity traders expect nothing less than a quarter point rate cut from the Federal Reserve and even that may be seen as a disappointment. The consequence of not lowering interest rates is one of the biggest reasons why the Fed will have to deliver exactly what the market wants. If they leave rates unchanged, we would see an entire repricing of the yield curve and the stock market collapse. In the event of a rate cut, the dollar is expected to fall because lower interest rates will prompt investors to start looking outside the US for opportunities to earn higher yield. The interest rate cut by the Fed will only be the beginning of more easing. The yield curve is pricing in 3 interest rate cuts by the end of the year and some analysts are even calling for as much as 125 basis points of easing before the Fed stops. Therefore the pressure on the dollar will come not from the actual lowering of interest rates on September 18, but instead from the expectations that rates will fall even further. This puts the Fed’s monetary policy in stark contrast with the policies of the European Central Bank, Bank of England and Reserve Bank of Australia, all of which are keeping interest rates steady and holding onto their hawkish monetary policy biases. The trade balance was the only piece of US data released today and the slightly weaker report had a limited reaction on the currency market. There is no significant data today or tomorrow which leaves retail sales on Friday the primary focus for the remainder of the week.

...more...

Euro Hits All Time High, But Where is the Follow Through?

http://www.dailyfx.com/story/bio2/Euro_Hits_All_Time_High__1189593155595.html

The EURUSD hit an all time high against the dollar as a combination of hawkish commentary from the ECB and some stop running in the Asian session, helped to push the pair to 1.3883 before it retraced some of its gains. Commentary by ECB President Jean Claude Trichet that, "Risks to price stability remain on the upside," as well a statement by ECB executive board member Stark that, "No one has said that we have abandoned a further hike, a further rate move" all suggested that European monetary officials are maintaining a hawkish posture despite the continuing uneasiness in the credit markets.

Overnight news from the EZ showing Industrial Orders jumped 0.6% from 0.2% forecast along with the hotter than expected readings in EZ labor costs which increased 2.5% all provided fuel to euro longs who argue that the ECB will need to tighten further in order to curtail inflationary pressures. The bottom line is that markets are forecasting a cut in US rates while still projecting a hike from ECB and the divergence of those expectations is driving order flows towards the euro. If the unit can reach the 1.3900 level, 1.400 may be a forgone conclusion as momentum and stop hunting will likely lift the pair higher. Still, the follow through tonight was rather limited as markets remain in the wait and see mode. The marquee event this week will be US Retail Sales on Friday which will reveal just how much strength is left in the US consumer. A hotter than expected number will quell any idea of a 50bp cut and may even put a 25bp cut in doubt, reversing some of the anti-dollar sentiment that has been so prevalent this week.

Meanwhile the resignation of PM Abe in Japan had only a muted impact on the yen, as Mr. Abe’s departure was widely anticipated given his stark unpopularity amongst the voters. Speculation will now focus on his successor, but whoever assumes the office will likely follow a dovish yen policy in light of the very weak GDP reading in Q2. Furthermore, given the current political uncertainty, the BOJ will be even more circumspect that usual in guiding monetary policy and may remain stationary for the rest of the year. In short such a policy course will keep Japanese rates at only 0.5%, making the carry trade attractive any time risk appetite returns to the market The yen therefore should continue to weaken unless a new wave of fear sweeps across capital markets and risk aversion becomes the order of the day.

...more...

[UpInArms]

19. Dollar hits record lows as rate cut expected

http://www.reuters.com/article/hotStocksNews/idUSN0634655920070912

LONDON (Reuters) - The dollar fell to a record low against the euro on Wednesday as an expected interest rate cut next week from the Federal Reserve continued to erode the U.S. currency's appeal.

The dollar also fell to a fresh 15-year low against a basket of six major currencies as continued problems in the credit market and weak jobs data led investors to anticipate a cut of 50 basis points in U.S. rates.

"The expected half percent cut in rates means spreads between the U.S. and euroland are narrowing, removing whatever is left for any positive carry for the dollar," said Niels From, currency strategist at Dresdner Kleinwort in Frankfurt.

However even if the Fed cut by only a quarter point, the outlook for the dollar was negative, said From.

"The outlook for the dollar is bleak; if the Fed only cuts by 25 basis points the market will think that it is not reacting strongly enough, stoking fears that the economy is heading for recession which is also negative for the greenback."

...more...

[Roland99]

27. So, what happens when the rate is NOT cut?

Dollar won't magically rebound and stocks have priced in the cut according to recent articles. Dollar will remain as flaccid as Limbaugh and the markets will go down like a Repuke on a Congressional page! oh, did I say that out loud? ;-)

[UpInArms]

29. arghhhh!

:spray:

have to go clean my screen :rofl:

[Roland99]

41. See? I actually helped you out...

Now you can watch the fun and frivolity thru a much cleaner screen!

That wasn't a falling dollar, it was a big piece of dust!

[AnneD]

34. Morning Marketeers....

:donut: and lurkers. Roland, gimme some of that. You be hot:spray:

It should be interesting day in the marketplace. Anyone that is still cheer leading for this admin deserve to look as ridiculous as they do. Say, wasn't Baghdad Bob hung or something?
The situation is looking grim and getting grimmer. I heard today that in Houston that 46% of folks owned home as compared to 67% nationwide.(I can't find the stats or broadcast to see again) I am sure much of that is folks like hubby and I that are realistic about our ability to pay and lenders hear have bad memories of the S&L disaster.

Well, have fun, I on Mr. Toads wild ride today.

Happy hunting and watch out for the bears.

[roamer65]

35. The Great Stock Market Crash of 2007.

That is what will happen. This is a great time to be in physically held gold, IMHO.

[Hugin]

44. A classic, Roland99!

:rofl:

[Roland99]

70. Maybe I'll make the DUzys

:toast:

[Weird Ghost Dog]

67. Uhh...

(Cyberwars?) - yeah, it's me. Was weirdly thrown off the board. + new extremely poor quality "always on" conexion smells --> smelly.

http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20070912\ACQRTT200709121504RTTRADERUSEQUITY_0936.htm&selected=9999&selecteddisplaysymbol=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked&lang=&link=&headlinereturnpage=http://www.international.nasd


http://www.democraticunderground.com/discuss/duboard.php?az=post&forum=102&topic_id=2987718&mesg_id=2987774
Democratic Underground - Post a message Surging Euro Sets Record High Against Dollar Wednesday

(RTTNews) - The surging euro achieved an all time high Wednesday against the U.S. dollar, building on gains it made through the morning. The currency of 13 European countries also made notable gains against the sterling and yen.

The gains came amid further speculation about monetary policy. With most experts predicting an interest rate cut in the U.S. next week, traders moved into the currency of the Euro-zone, where signs of hawkish monetary policy remain. Euro zone industrial output grew by a seasonally adjusted 0.6% month-over-month in July, the Eurostat said Wednesday. The number came in better than the expected growth of 0.2%. In June, industrial production remained unchanged from the prior month after revision.

Comments made Tuesday by Federal Reserve Chairman Ben Bernanke did nothing to change the market's perception that a rate cut was on the way for the September 18th policy meeting. Worries about the recent credit crunch and a disappointing employment report last Friday has convinced many that a rate cut is necessary to save the economy from recession.

Meanwhile, other central banks still seem to be contemplating rate hikes. This is especially true for the Euro-zone. The problems in the financial markets forced the European Central Bank to leave its benchmark rate unchanged last week, but ECB President Jean-Claude Trichet continued to make hawkish comments.

The euro broke its record high against the dollar in early Asian trading. The previous record for the euro was 1.3851 set on July 24, which the euro surged past earlier this morning. By 3 pm Eastern Time, the euro was trading at 1.3905 up from 1.3780 just 36 hours ago.

The next major trading catalyst for the euro-dollar pair could be the U.S. retail sales figures for August, due out Friday. The sales are expected to increase to 0.5% in August, compared to 0.3% growth recorded in July.

In late morning New York trading, the euro started trending upward against the sterling after a choppy beginning. The euro is up from 0.6805 to 0.6849 at 2:30 pm ET.

The euro has steadied against the yen after making gains through much of morning New York trading. The euro was sitting at 158.10 earlier, and quickly rose to trade at as high as 158.90 before settling near 158.80.

Embattled Japanese Prime Minister Shinzo Abe resigned on Wednesday. Abe's approval rating had dropped amid a succession of scandals involving his cabinet. The resignation came after Abe was unable to rebuild support after his party suffered defeat in Upper House elections in July.

In economic news, Japanese consumer confidence dropped to its lowest level since December 2004. Meanwhile, Japan's domestic corporate goods price index - CGPI rose 1.9% in August from last year, driven by higher raw material prices, the Bank of Japan said Wednesday. Meanwhile, the Ministry of Finance, in a preliminary report, said that Japan's current account surplus grew 4.5% to 1855.9 billion yen in July from a year earlier.

Crude for October delivery rose $0.52 to $78.75 a barrel on the New York Mercantile Exchange after touching as high as $79.29 earlier in the session, beating the old record of $78.77 reached on August 1, after a U.S. government report showed that crude oil inventories fell much more than analysts expected.

After moving sharply higher in recent sessions, the price of gold gave back some ground during trading on Wednesday. Gold for December delivery closed down $0.40 at $720.20 an ounce, although well off its low for the session.

For comments and feedback: contact [e-mail]

/...

[UpInArms]

15. Bernanke - U.S. current account gap cannot persist

http://www.reuters.com/article/bondsNews/idUSN1141961820070911

BERLIN, Sept 11 (Reuters) - Federal Reserve Chairman Ben Bernanke on Tuesday offered financial markets scant guidance on where U.S. interest rates may be heading in a speech in which he said the U.S. current account gap is unsustainable.

"The large U.S. current account deficit cannot persist indefinitely because the ability of the United States to make debt service payments and the willingness of foreigners to hold U.S. assets in their portfolios are both limited," he said at the Brandenburgische Akademie der Wissenschaften.

Bernanke, who also said U.S. external debts seemed not to be an undue burden at present, did not discuss the outlook for the U.S. economy or monetary policy, leaving intact expectations the Fed would cut interest rates at a meeting next Tuesday, perhaps by as much as a half-percentage point.

<snip>

Bernanke said that if the U.S. current account gap was to persist at current levels, foreign investors would eventually have enough of dollar assets. It would be difficult for the United States to finance its debt at a reasonable cost at that point, he said.

Meanwhile, the global savings glut -- flows of capital from emerging economies into established economies, particularly the United States -- remains in place, Bernanke said. The Fed chairman has argued that the global savings glut is one reason why long-term interest rates have remained low.

At the same time, other factors besides the balance between saving and investment affect long-term interest rates, Bernanke said. These include supply of and demand for long-term securities, and changing sentiment about the risks embedded in long-term securities, he added.

...more...

[Roland99]

42. So *that's* the problem? We need *more* debt? Of course!

Because that's how banks "make money"...out of new debt!

[UpInArms]

16. Hedge funds hit in August

http://money.cnn.com/2007/09/11/markets/hedge_fund_performance/index.htm

LONDON (CNNMoney.com) -- Hedge funds performance suffered last month as the subprime crisis and credit crunch increased volatility in financial markets.

Hedge funds lost 1.31 percent in August, according to Chicago-based industry tracker Hedge Fund Research. By comparison, the S&P 500 index added about 1.29 percent during the month.

Junk bond, emerging markets and "macro strategy" funds were among the weakest performers in August, HFR said. Macro strategy funds invest in currencies and other instruments in markets around the world.

The performance figures include results from more than 40 percent of the funds that make up the HFRI Fund Weighted Composite Index. The performance figures will be updated as the rest of the funds report their results, HFR said.

Financial markets have been in turmoil since two Bear Stearns hedge funds invested in securities backed by subprime mortgages blew up in June, sparking a tightening in global credit markets.

Volatility in hedge fund performance increased in late July, and has persisted into September, HFR said. But some funds - including so-called quantitative, or computer-driven funds - recovered a majority of their August losses.

...more...

[UpInArms]

32. Hedge funds not cause of Aug turmoil-regulators

http://www.reuters.com/article/bondsNews/idUSPEK9160920070912

HONG KONG, Sept 12 (Reuters) - Hedge funds were not the cause of the turmoil that hit financial markets in August and authorities are unlikely to rein in their activities, a panel of UK, Japanese and Hong Kong regulators said on Wednesday.

While the idea of regulators having real-time data on hedge fund positions has been floated, they also said such information would be hard to collect and may be of little use.

"We don't want to gut react to what's happening. At the same time, we don't want to be complacent," Michael Ainley, head of wholesale banks and investment firms with the UK Financial Services Authority, told a hedge fund conference in Hong Kong.

"We haven't seen any direct evidence that hedge funds have exacerbated the situation," he said, and added the hedge fund industry didn't appear to pose systematic risk.

Hedge funds were back in the headlines this summer after several high profile vehicles collapsed amid the meltdown of the U.S. subprime mortgage sector and seizing up of credit markets.

...more...

[UpInArms]

17. S&P says company loan defaults could accelerate

http://www.reuters.com/article/bondsNews/idUSL1292447120070912

LONDON (Reuters) - Corporate default rates could accelerate from next year as the recent turmoil in credit markets has erased the appetite for risky investments, ratings agency Standard & Poor's said in a report.

"There is a material risk that defaults could be more severe beyond the one-year forecast horizon," S&P said in a report published on Tuesday night.

Global corporate speculative-grade bond default rates held at 1.02 percent in August. Default rates remain near record lows as hedge funds, private equity firms and other financial institutions have poured billions of pounds into refinancings and restructurings.

However, investors are now shying away from risky investments, the report said.

In the U.S., there were no high-yield issuances in August, compared with four in July and a monthly average of 38 during the first half of this year, S&P said.

...more...

[UpInArms]

20. Bond insurers feel the chill from credit turmoil fallout

http://news.yahoo.com/s/ft/20070911/bs_ft/fto091120071629112803

As the effects of the US subprime mortgage crisis have rippled out into the broader credit markets, bond insurers - an important but normally staid group of companies - have increasingly fallen victims to the turbulence.

These companies have seen their share prices tumble and the cost of protecting their debt against default spike higher as investors have punished all industries with exposure to the stricken mortgage market.

Among the worst hit has been Radian Group, which focuses on insuring mortgage-backed debt. Its shares have fallen by almost 70 per cent this year, while the cost of default protection for the company has jumped more than ninefold to a level that suggests investors are predicting a near-term risk of default.

Problems for such insurers have important implications for the bond market. These companies lend their high credit ratings to securities issued by others in return for a fee.

But while the largest of these so-called "monoline" insurers, MBIA and Ambac, began as insurers of municipal bonds - which typically have low default rates - much of the industry's growth in recent years has come from providing guarantees to structured securities such as asset-backed bonds and collateralised debt obligations. These securities can have much higher default rates.

For example, the default rate for an A-rated CDO security after five years can be double that of an A-rated municipal bond over the same period, according to a recent report from Standard & Poor's. Now that CDOs and other complex securities have run into trouble, the monolines are facing serious questions from investors over their risk-management practices, and the rating agencies are also re-examining how they assign their ratings.

...more...

[UpInArms]

21. H&R Block to fire 575 Option One mortgage staff

http://www.reuters.com/article/businessNews/idUSWEN091220070912?feedType=RSS&feedName=businessNews

NEW YORK (Reuters) - H&R Block Inc (HRB.N: Quote, Profile, Research), the largest U.S. tax preparer, said on Tuesday it will fire 575 workers at its Option One Mortgage Corp subprime lending unit, on top of 615 job losses announced on May 15.

<snip>

Kansas City, Missouri-based H&R Block disclosed the latest cuts and the charge in a U.S. Securities and Exchange Commission filing. It said Option One expects to complete its restructuring by year end and that more cuts are possible.

Subprime lenders make home loans to people with poor credit. Dozens of mortgage lenders have quit the industry this year as defaults rose, home prices stopped rising, and investors stopped buying home loans they now consider too risky. More than 50,000 U.S. mortgage job cuts have been announced this year.

<snip>

In April, H&R Block agreed to sell Option One to Cerberus in a transaction valuing the mortgage lender at perhaps $1 billion. But on August 30, H&R Block said Cerberus might buy only Option One's loan servicing business.

Losses at Option One were largely responsible for H&R Block's net loss of $736.2 million in the 15 months ended July 31.

...more...

[UpInArms]

22. Housing stocks decline hurts some big investors

http://www.reuters.com/article/businessNews/idUSN1141233520070912?feedType=RSS&feedName=businessNews&sp=true

BOSTON (Reuters) - The slump in U.S. housing stocks to new four-year lows is hurting some well-known investors who recently added home builders and housing-related stocks such as KB Home (KBH.N: Quote, Profile, Research) and Pulte Homes Inc (PHM.N: Quote, Profile, Research) to their positions.

Value investors such as Legg Mason's Bill Miller and Harris Associates' Bill Nygren, as well as other managers such as Tim Cohen of Fidelity Investments seem to have been caught in a 'P/E trap,' where these stocks were cheap for a long period and only went lower as the firms reported their earnings.

Now in the Dow Jones U.S. Home Construction Index (.DJUSHB: Quote, Profile, Research), 10 of 15 stocks have no price-to-earnings (P/E) ratios because they have no earnings. A year ago, their P/E ratios were between three and 5.5, making them appear attractive. (See table below).

"P/Es are tough when earnings change that fast," said Ron Muhlenkamp, a value investor and manager of the $2.3 billion Muhlenkamp Fund, which in the past owned more than $300 million of housing stocks. The fund was down 4.37 percent at the end of August against the S&P 500's (.SPX: Quote, Profile, Research) 3.9 percent gain.

"Last year, Meritage earned 10 bucks a share. This year they are likely to lose money. So what's the PE? Is it 2 or is it infinite?" said Muhlenkamp.

...more...

[UpInArms]

23. Bank of England's King signals no bailout for banks

http://www.reuters.com/article/bondsNews/idUSL1292055620070912?sp=true

LONDON, Sept 12 (Reuters) - The Bank of England signalled on Wednesday it would not ride to the rescue of banks caught up in the credit crunch by cutting interest rates or flooding markets with cash unless the whole financial system was in danger.

In a submission to parliament's Treasury Committee, Governor Mervyn King said the cause of the current crisis that has seen lending between banks dry up was that people had not properly considered just how risky some investments were.

Central banks, he said, of course stood ready to take whatever action might be needed if there were major shock to the global financial system but for now banks, as a whole, were well capitalised and should be able to handle their losses.

Bailing them out by cutting interest rates or making cash readily available would only encourage financial institution to resume taking on risky bets in pursuit of profit -- making moral hazard a serious issue.

"If risk continues to be under-priced, the next period of turmoil will be on an even bigger scale," King warned.

"The current turmoil, which has at its heart the earlier underpricing of risk, has disturbed the unusual serenity of recent years, but, managed properly, it should not threaten our long-run economic stability.

...more...

[UpInArms]

24. Deluge of mortgage interest rate resets ahead

http://www.reuters.com/article/businessNews/idUSN1159868320070912?sp=true

NEW YORK (Reuters) - Many less creditworthy borrowers may lose their homes when interest rates on a flood of adjustable-rate subprime mortgages reset next month.

Even a recent sharp fall in mortgage interest rates, which could make the potential transition from an adjustable-rate to a fixed-rate mortgage less painful, will do little for those with the weakest credit because lenders have all but closed their books to the riskiest borrowers.

"The ARM resets will hit hard the subprime borrowers and therefore we have a huge amount of trouble ahead of us," said Torsten Slok, senior economist at Deutsche Bank in New York.

About $75 billion in adjustable-rate U.S. mortgages are going to reset in the fourth quarter, most of which will emerge next month. Of the loans resetting, around 75 percent are subprime mortgages, Slok said.

Subprime ARMs are going into foreclosure at an annual rate currently of 13 percent, up sharply from 6 percent two years ago. This rate will climb even higher over the coming two years as a result of the ARM resets ahead, he said.

...more...

[Roland99]

28. 13% and it will be climbing...

That's a *crapload* of people who will have sh*t for credit for the next 5-7 years

[Roland99]

58. Ah ... a blast from the past. Subprime freepers...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x1792209

:evilgrin:

[Buttercup McToots]

25. USD $79.21 @ 8:17 am

oops

Whats the lowest it has ever gone?

[AnneD]

46. Nothing like...

wiping your butt with high quality linen paper.:evilfrown:

[roamer65]

51. USD $79.16 right now, @ 12:26 pm

Off from the Kitco website.

[UpInArms]

26. Commentary: Market's reaction to jobs report suggests U.S. is in a recession

http://www.marketwatch.com/news/story/reaction-jobs-report-suggests-were/story.aspx?guid=%7BE02825E0%2D81ED%2D4592%2DBC91%2D35CD8EB02D15%7D

ANNANDALE, Va. (MarketWatch) -- Making sense of the stock market's reactions is never easy. But it appears to be especially inscrutable in the face of unexpectedly weak news on the employment front.

Sometimes it will rally in the face of such news. Yet, at other times, such as Friday, it will plunge.

Believe it or not, the market's behavior may not be so mysterious after all.

Let me start by reviewing what happened Friday. The Labor Department reported before the market open that nonfarm payrolls had dropped by about 4,000, far worse than the 115,000 increase that was the consensus expectation of a group of economists that MarketWatch had polled. See Economic Report

The stock market plunged on the news. The Dow Jones Industrial Average ($INDU) dropped some 160 points at the open, on its way to losing 250 points for the session.

To make sense of the market's varied reactions to seemingly bad news, I turned to an academic study from several years ago that examined the reaction to unemployment news., "The Stock Market's Reaction to Unemployment News: Why Bad News is Usually Good News for Stocks," was conducted by finance professor John Boyd of the University of Minnesota, Jian Hu of Moody's Investors Service, and finance professor Ravi Jagannathan of Northwestern University. See study

The researchers found that when the economy was in recession - as later determined by the National Bureau of Economic Research, the unofficial arbiter of when recessions begin and end - the stock market typically fell when the unemployment news was unexpectedly bad. But when the economy was in an NBER-declared expansion, more often than not the market rallied.

...more...

[radfringe]

47. is apple going to fall not far from tree and deny there's a recession? n/t

[TrogL]

59. Anybody looking for work, come to Canada

Canada's unemployment is at an alltime low, somewhere around 6%. Basically the only people not working are those who can't. Stores are open shorter hours because there's literally no staff. Trainees are training trainees.

My wife walked into a temp agency and had a job before the ink was dry on her sign-in sheet.

My daughter casually mentioned she needed a job and got mobbed.

Granted, you may end up sleeping in your car or in my basement but you'll be making kickass money if you've got any skills at all.

[AnneD]

66. I couldn't help but notice...

you are from Alberta....is the oil industry drawing folks away? How about Nursing? Full time nursing available or are they pushing casual work.

[roamer65]

69. Amazing what a sound gov't fiscal policy does for a country's job market, eh?

I just may have to go to Canada to get a job eventually.

[UpInArms]

30. Fed Pumping Early: Fed adding temporary reserves via overnight repo

http://www.reuters.com/article/bondsNews/idUSNYG00073520070912

NEW YORK, Sept 12 (Reuters) - The U.S. Federal Reserve said on Wednesday it was undertaking an overnight repurchase operation to add temporary reserves to the banking system.

Federal funds were trading steady at 5.06 percent in the market after the operation was announced, below the 5.25 percent target rate the Fed sets.

[UpInArms]

36. Fed adds $13.5 bln in reserves via overnight repo - takes junk for collateral

http://www.reuters.com/article/bondsNews/idUSNYG00073620070912

NEW YORK, Sept 12 (Reuters) - The U.S. Federal Reserve said on Wednesday it added $13.5 billion of temporary reserves to the banking system via an overnight repurchase agreement.

Federal funds traded steady at 5.06 percent in the market after the amount of the operation was announced, below the 5.25 percent target rate the Fed sets.

The Fed said it accepted as collateral $7.36 billion of Treasuries, $2.25 billion of agency debt and $3.89 billion of mortgage backed securities.

A total of $41.0 billion in bids were submitted for the operation.

[roamer65]

40. Bernanke has picked the poison.

They're taking the dollar straight into the toilet.

[UpInArms]

56. yeppers, the choice has been made

kill the dollar - salvage the markets - but unfortunately that won't last either -

it's a fool's game now :hi:

[UpInArms]

31. Counting structured finance losses hard for banks

http://www.reuters.com/article/bondsNews/idUSL1183992620070912

ZURICH, Sept 12 (Reuters) - European banks face some tough judgement calls in accounting for losses from complex structured finance products at a time when investors are clamouring for maximum disclosure.

The banks have been under pressure to reveal the full extent of the losses sustained on portfolios of asset backed securities after weeks of market turmoil triggered by a crisis in the U.S. subprime mortgage market.

But the challenge facing them is to write down the value of securities they hold - demand for which has all but vanished in the recent market upheaval - without straining the credulity of investors who fear banks may try to disguise the full picture.

"How do you work out fair value in a market where you have a complete lack of confidence?" said a partner in an auditing firm who requested anonymity.

Accountants say banks will have considerable discretion in deciding the value of residential mortgage-backed securities (RMBSs) which have been bundled into collateralised debt obligations (CDOs).

"In turbulent times of high volatility, valuations become highly judgemental as liquidity in the markets dries up," said Paul Sater, financial services partner at Ernst & Young. "You can no longer compare valuations against recent trades."

...more...

[UpInArms]

33. 9:52 EST Goldielocks says pump was "just right"

Dow 13,307.50 0.89 (0.01%)
Nasdaq 2,601.83 4.36 (0.17%)
S&P 500 1,471.53 0.04 (0.00%)
10-Yr Bond 4.379% 0.015

NYSE Volume 191,308,000
Nasdaq Volume 152,209,000

market has started the day on a lower note with profit taking from yesterday's rally and a relatively disappointing third quarter update from Texas Instruments (TXN 34.96, -0.76) acting as the driving factors.

With respect to TXN, it wasn't that its update was bad, it was that it wasn't as robust as the market had hoped in light of positive commentary from other companies of late, like Intel (INTC 25.62, -0.04). Texas Instruments merely narrowed its revenue and EPS guidance ranges (raising the low end but lowering the high end) versus taking the guidance ranges above prior estimates.

The TXN news has weighed on the semiconductor group which is a weak spot in the tech sector (-0.3%).

DJ30 -39.26 NASDAQ -3.48 SP500 -4.37

09:17 am : S&P futures vs fair value: -4.2. Nasdaq futures vs fair value: -7.0. Futures inch a bit higher over the past hour but still indicate a lower open.

09:00 am : S&P futures vs fair value: -4.6. Nasdaq futures vs fair value: -7.5. Little change as futures indicate a lower open on a relatively slow news day.

08:34 am : S&P futures vs fair value: -5.8. Nasdaq futures vs fair value: -6.8. Futures hold fairly steady. There is very little corporate news. Texas Instruments narrowed its guidance for revenue and profits, but more was hoped for after Intel's upbeat guidance.

[TrogL]

48. Loonie Watch

(I'm trying out a new wireless mouse)

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

2007-08-13 Monday, August 13 0.951656 USD
2007-08-14 Tuesday, August 14 0.940291 USD
2007-08-15 Wednesday, August 15 0.930579 USD
2007-08-16 Thursday, August 16 0.929887 USD
2007-08-17 Friday, August 17 0.940291 USD
2007-08-20 Monday, August 20 0.94518 USD
2007-08-21 Tuesday, August 21 0.943307 USD
2007-08-22 Wednesday, August 22 0.94162 USD
2007-08-23 Thursday, August 23 0.946432 USD
2007-08-24 Friday, August 24 0.950119 USD
2007-08-27 Monday, August 27 0.951022 USD
2007-08-28 Tuesday, August 28 0.941974 USD
2007-08-29 Wednesday, August 29 0.944109 USD
2007-08-30 Thursday, August 30 0.946342 USD
2007-08-31 Friday, August 31 0.94697 USD
2007-09-03 Monday, September 3 0.94697 USD
2007-09-04 Tuesday, September 4 0.953016 USD
2007-09-05 Wednesday, September 5 0.951656 USD
2007-09-06 Thursday, September 6 0.949307 USD
2007-09-07 Friday, September 7 0.948227 USD
2007-09-10 Monday, September 10 0.949487 USD
2007-09-11 Tuesday, September 11 0.958773 USD

Current values

Loonie:

Last trade 0.9638 Change +0.0043 (+0.45%)
Previous Close 0.9605 Open .9642
Low 0.9638 High 0.9648


Other combinations:

AS.M07 AUSTRALIAN $/CANADIAN $ Sep (NYBOT) 0.8689 +0.0006
HY.M07 CANADIAN $/JAPANESE YEN Sep (NYBOT) 109.50 +1.825
RA.M07 EURO/AUSTRALIAN $ Sep (NYBOT) 1.65940 -0.01455
GB.M07 EURO/BRITISH POUND Sep (NYBOT) 0.68410 +0.0067
EP.M07 EURO/CANADIAN $ Sep (NYBOT) 1.44370 +0.00185
EJ.M07 EURO/JAPANESE YEN Sep (NYBOT) 156.80 +0.65
EU.M07 EURO/US$ (LARGE) Sep (NYBOT) 1.38345 +0.00270


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

The December Canadian Dollar was steady to slightly higher overnight as it extends Tuesday's rally. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near-term. Tuesday's close above the reaction high crossing at .9578 confirms that a short-term low has been posted while opening the door for a possible test of July's high crossing at .9692 later this year. Closes below the 20-day moving average crossing at .9485 would confirm that a short-term top has been posted. Overnight action sets the stage for a steady to higher opening in early-day session trading.


Analysis

Same as yesterday - the greenback's in freefall, although an article here (requires registration) notes ...

Greenback Starts To Rebound Slightly Versus Loonie 25 minutes ago
The US dollar has started a rebound against the loonie after reaching a 6 1/2-week low. The greenback fell sharply in the later morning and touched as low as 1.0362 at 10:30 a.m. ET. The buck has bounced back to 1.0373 in the next 20 minutes. ... more.

The drivein show was spending most of its time on Betraeus but also noted discussion of Canada's commitment to Afghanistan.

Other than that, I'm cheerleading parity 'cause I might be going to Ontario over Christmas and I want to go down to the States just to rub their noses in it.

[roamer65]

50. Countdown to parity.

When was the last time the $CDN was at parity with the $USD? Early 1960's I think. We just may reach parity this year. Amazing.

[TrogL]

61. Update

(Good Lord, two updates in a row!)

Current values

Loonie:

Last trade 0.9665 Change +.0070 (+0.73%)
Previous Close 0.9547 Open 0.9560
Low 0.9538 High .9665


Blather

Canadian Dollar Gains Against Greenback Amid Oil Advance (requires registration) - 9 minutes ago
(RTTNews) - The Canadian dollar neared a multi-decade high versus the US dollar. A surge in oil prices helped bolster the currency, as data showed a large drop in US crude oil inventories. ... more

Analysis

I'm seriously thinking about busing it to work 'cause the price of gas has gone completely throught the roof. $20 isn't even making the yellow 'feed me' light go away. Traffic is a completely nightmare compared to last year at this time and a lot of it's volume even though there is construction going on. The traffic guy's having a nervous breakdown trying to describe it all in the time allotted. When I call in a problem, he doesn't even answer the phone anymore.

The homeless problem is even worse than before. The city's talking about using an abandonned YMCA as a 350 bed hostel, but the YMCA says the building may not be available then, and I've been in it and it's going to need considerable upgrading for it even to be habitable - the reason the YMCA moved out in the first place. Frankly, I think it's in the wrong spot.

This is not NIMBY talking - I'd LIKE the thing in my back yard otherwise the homeless are going to be sleeping there anyway.

[roamer65]

52. Euro now @ $1.39078

12:29 pm

[Roland99]

53. 12:35pm - Whole lotta nuttin' goin' on

Dow 13,313.19 +4.80
Nasdaq 2,602.59 +5.12
S&P 500 1,473.04 +1.55
Oil $78.90 $0.67
10 YR 4.40% +0.04
Gold $718.90 $-2.20

[UpInArms]

54. Paulson says US subprime woes will take longer to fix

http://www.reuters.com/article/bondsNews/idUSN1229262420070912

WASHINGTON, Sept 12 (Reuters) - U.S. Treasury Secretary Henry Paulson said on Wednesday a recovery in the subprime mortgage market will be slowed by a wave of interest rate resets and urged lenders to help troubled borrowers.

Speaking to mortgage servicing executives at the Treasury, Paulson called on lenders to expand the range of mortgage products to refinance loans made unaffordable by resets.

"Unlike periods of financial turbulence I've witnessed over many years, this turbulence wasn't precipitated by problems in the real economy. This came about as a result of some bad lending practices," Paulson said.

Paulson said turbulence in some markets would be worked out more quickly than others. "The subprime market will take longer than other markets because of a number of these resets taking place over the next 18 months to two years," he said.

He urged the mortgage executives, which included embattled Countrywide Financial Corp. Chairman Angelo Mozilo and top managers from Wells Fargo & Co. (WFC.N: Quote, Profile, Research) , CitiMorgage Inc. (C.N: Quote, Profile, Research), HSBC (HSBA.L: Quote, Profile, Research) and JP Morgan Chase (JPM.N: Quote, Profile, Research), to identify and offer refinancing and other assistance to troubled borrowers facing big rate resets.

...more...

Paulson is an idjit

[UpInArms]

55. clarifying my "Paulson is an idjit" remark

this buffoon obviously doesn't understand that the loans are all gone - they were bundled up and sold to who/whatever - most out of the country - they are not at the banks, they are not at the lenders - they are bundles of TNT that are ready to explode in all those inflated portfolios.

[Nimrod2005]

62. If the holders decide to come clean SOON!!!

We should be encouraging/pushing the holders to report the details

[TrogL]

63. That's teh last think they'd want to do

Many funds are kept up by the confidence of the investors that they've got a good mix. If they lose confidence in the fund 'cause they discover they're holding some of these, the whole fund goes down in flames.

[UpInArms]

64. Book Cooking 101: Cleveland Fed revises methodology for CPI measures

http://www.reuters.com/article/bondsNews/idUSN1239067420070912

WASHINGTON, Sept 12 (Reuters) - The Federal Reserve Bank of Cleveland on Wednesday said it has improved the way it constructs its median and trimmed-mean consumer price index to help reduce distortions caused by the owners' equivalent rent, or OER, component.

The new methodology breaks the OER into four regional subindexes, giving it less influence on the overall CPI figures, the bank said.

To reduce monthly volatility in the CPI, components that show the most extreme monthly prices changes above or below a certain threshold are excluded or "trimmed."

But when one of the components, such as OER, has an unusually large weight, the influence of that component can grow disproportionately as the proportion of extreme changes trimmed from the data increases, the bank said.

By breaking it into 4 regional subindexes, the OER will produce less distortion on the overall inflation measures, the bank said.

...more...

[Roland99]

68. Oh wow...shoulda known....

Since home ownership is tanking due to falling housing prices and rents going up as people move back to renting after being foreclosed upon, gotta tweak the formula to keep that CPI demon in check. :eyes:

[ozymandius]

65. at the close

Dow 13,291.65 Down 16.74 (0.13%)
Nasdaq 2,592.07 Down 5.40 (0.21%)
S&P 500 1,471.56 Up 0.07 (0.00%)
10-Yr Bond 4.408% Up 0.044
NYSE Volume 2,885,667,000
Nasdaq Volume 1,928,540,000

4:20 pm : In the wake of Tuesday's sizable gains, the stock market managed to hold its ground for the most part on Wednesday despite oil prices flirting with $80 per barrel and relatively disappointing third quarter updates from Texas Instruments (TXN 35.12, -0.60) and Nucor (NUE 53.46, -0.08).

The resilience was owed to buyers favoring large-cap issues today, as their heavyweight status helped offset the drag from small-cap and mid-cap stocks.

The latter issues, frankly, weren't all that weak. The S&P 600 Smallcap Index and S&P 400 Midcap Index were down just 0.5% and 0.1%, respectively. That standing pretty much typified today's action as there weren't many big movers. In fact, there wasn't a single S&P sector that closed the session up, or down, more than 1.0%.

Energy (+0.8%) took the blue ribbon today as it jumped in conjunction with oil prices (+$1.54 to $79.77). That spike was driven by the government's report that oil inventories fell in the latest week of reporting by 7.01 million barrels. Analysts had been expecting a drawdown of only 2.7 million barrels.

Technology (-0.6%) ended the session as the worst-performing area. Its retreat was paced by the semiconductor stocks, which ran into selling interest after Texas Instruments simply narrowed its third quarter EPS and revenue guidance from its prior estimates (i.e., it raised the low end and lowered the high end of its guidance ranges). Many participants had been hoping for more after Intel (INTC 25.46, -0.20) raised its guidance earlier in the week.

The financial sector (-0.2%) joined the tech sector on the list of underperformers. Weakness in those areas, though, was ultimately offset by the gains in the energy, health care (+0.3%), utilities (+0.3%), industrials (+0.2%) and consumer staples (+0.1%) sectors.

Dow component Procter & Gamble (PG 67.31, +0.32) was a standout in the staples arena, and in the broader market, as it hit a new all-time high.

At the end of the day, though, the S&P 500 closed the session virtually flat in another low volume session where just under 1.3 billion shares changed hands at the NYSE. That is fitting given the wait-and-see attitude that seems to be gaining in prominence ahead of next week's earnings reports from the investment banks and the FOMC meeting.

On Thursday there aren't any earnings reports of consequence, but look for McDonald's (MCD 51.20, -0.56) to be a standout. After Wednesday's close, the Dow component announced a 50% increase in its annual cash dividend per share to $1.50 from $1.00. DJ30 -16.74 NASDAQ -5.40 SP500 +0.07 NASDAQ Vol 1.87 bln NYSE Dec/Adv/Vol 1862/1461/1.29 bln