STOCK MARKET WATCH, Friday February 8

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday February 8, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 348
DAYS SINCE DEMOCRACY DIED (12/12/00) 2574 DAYS
WHERE'S OSAMA BIN-LADEN? 2300 DAYS
DAYS SINCE ENRON COLLAPSE = 2591
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

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

AT THE CLOSING BELL ON February 7, 2008

Dow... 12,247.00 +46.90 (+0.38%)
Nasdaq... 2,293.03 +14.28 (+0.63%)
S&P 500... 1,336.91 +10.46 (+0.79%)
Gold future... 910.00 +5.00 (+0.55%)
30-Year Bond 4.50% +0.13 (+2.88%)
10-Yr Bond... 3.74% +0.12 (+3.38%)






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

[Systematic Chaos]

1. Looking at the charts, let me assure you...

...that there is absolutely no manipulation taking place with the futures! And especially not the Nasdaq futures!

:wtf: kinda chart is that, shooting up 40 points in half an eyeblink?

[Demeter]

2. Of Course There Isn't

And this is a representative democratic republic with free and fair and open elections, run by a duly elected President, not by a fascist coup. :sarcasm:

[ozymandius]

3. That kind of after-hours trading does not surprise me.

The trading floor is closed but trading still takes place. I remember some years ago when my financial adviser and I were talking about just this kind of weirdness. He turned his computer monitor toward me to show how Martha Stewart stock had closed at $24 but an individual trader was looking for nearly $50 for his shares. This happens all the time and, as a result, skews the futures charts to stupid levels.

Edit: But this does not mean that there's no manipulation. Of course there is.

[Roland99]

14. 6:17am Futures dropping

DJIA INDEX 12,207.00 -71.00 06:17
S&P 500 1,331.40 -8.80 06:17
NASDAQ 100 1,753.50 -13.50 06:16

[Loge23]

36. Supply & Demand!

They demand more, we supply it.

[UpInArms]

136. Welcome to the SMW, Loge23!

:hi:

[Buttercup McToots]

4. Creators of Credit Crisis Revel in Las Vegas

http://www.nytimes.com/2008/02/08/business/08trader.html?_r=1&hp&oref=slogin

February 8, 2008
Creators of Credit Crisis Revel in Las Vegas
By VIKAS BAJAJ
LAS VEGAS — It was Monday night on the Strip, and John Devaney was giving a party for himself and fellow connoisseurs of risk who have seen their hot hands go cold.

In a gilded ballroom at the Venetian, the revelers sipped cabernet, dined on surf and turf and crowed as the Blue Man Group put on a private show.

The partygoers had traveled to Sin City this week — Mr. Devaney by chartered jet — for an event that before the current credit squeeze might have been called the Predators’ Ball of this era.

This time, with mortgage securities replacing the junk bonds of the 1980s, the gathering felt more like group therapy.

The occasion was, officially, the 5th annual conference of the American Securitization Forum, a celebration of the financial wizardry that supposedly turns risky mortgages and other loans into gilt-edged securities but, as Mr. Devaney belatedly discovered, does not always make them safe. Mr. Devaney, a 37-year-old money manager, lost big on bond investments last year. This week, in Las Vegas fashion, he said he was doubling down.

The four-day event at the Venetian drew more than 6,500 financial professionals from across the country. Many came in search of ways to ride out — or better yet, to profit from — the mortgage mess their industry helped to create.

Wall Street banks played a crucial role in the mortgage crisis by buying home loans and bundling them into securities. Regulators are examining whether investment banks and mortgage lenders hid the risks of subprime debt from investors.

While the mood was more somber than in years past, when home prices were soaring and mortgage lending boomed, there was plenty of fun and games. Countrywide Financial, the troubled lender that has come to symbolize some of the excesses of the mortgage business, was the host of a party on Sunday night where people cheered while watching the Super Bowl on big-screen televisions. On Monday came the gala dinner sponsored by Mr. Devaney. On Tuesday the conference organized an outing on a golf course near the California border.

Between such revels, attendees spent their time in meeting rooms with golden trim, listening to panel discussions with titles like “Transparency, Valuation and Rebuilding Investor Confidence” and “Legislation, Regulation and Market Oversight — A Global Review.”

At the conference last year, Mr. Devaney grabbed headlines — and was proved prophetic — when he said he hated subprime mortgage securities and was “hoping the whole thing explodes.” In March, before he incurred his big losses, he told The New York Times he was hoping to expand and diversify his trading business.

This year, Mr. Devaney, a brash bond trader, said he had grown cocky during the mortgage boom and paid the price. A hedge fund run by his company, United Capital Markets, plummeted last year, and he lost $100 million. The rout prompted him to sell a mansion on Key Biscayne, near Miami, his private jet and his yacht, Positive Carry, named after a financial maneuver in which the cost of financing an investment is less than the return obtained from it.

Mr. Devaney has, however, profited from turbulent markets in the past, and made his name earlier this decade trading troubled bonds backed by trailer home loans and business-franchise loans.

“In a funny way I want to thank the market for dealing me a direct hit,” Mr. Devaney said during one panel discussion, drawing laughter from the crowd. “As a trader, if you make money for too many years you lose sight of risk unless you get sucker- punched.”

Mr. Devaney said he was now buying beaten-down bonds for pennies on the dollar, betting their prices would revive.

But his financial troubles are small compared with losses in the housing market and broader economy. Many people are struggling to pay their mortgages and hold on to their homes. Nearly a quarter of home loans made to people with blemished, or subprime, credit are delinquent or in foreclosure, and defaults now are rising even on loans made to people with good credit. Some of the people who attended the Las Vegas gathering had recently lost their jobs and came hoping to find new ones.

At times, the unease here was palpable. During one panel discussion, a money manager stood up and denounced credit ratings agencies, which many investors have criticized for underestimating the risks posed by securities backed by subprime loans. In the last 12 months, the ratings firms have downgraded many securities they had awarded high marks to only a year or two earlier.

“In my 38 years this has been the worst capital destruction and the worst rating decline in history,” Robert L. Rodriguez, the chief executive of First Pacific Advisors, a mutual fund company based in Los Angeles, said to a panel of four executives from ratings firms. “All of you should be ashamed of yourself.”

The lashing elicited scattered applause. The panelists listened, their lips pursed. Some then admitted making some mistakes but said most investors in top-rated triple-A securities would get their money back.

“We all have heard a lot of criticism over the last several months, and some of that criticism is certainly justified,” said Glenn Costello, co-head of the residential mortgage-backed securities group at Fitch Ratings. But he added that a frequent criticism of ratings firms — that they are beholden to the investment banks and mortgage companies whose securities they rate — reflected “a real lack of understanding of how we as ratings agencies go about doing what we do.”

During another discussion, managers of much-maligned collateralized debt obligations — packages of bonds that are packages of other debt — criticized the media for what they said was negative coverage of the securities. Most of the speakers on that panel asked that reporters be allowed in the session only if they did not directly quote their remarks or did so with their permission.

But other managers and bankers said investors and journalists were right to question why so much wealth was destroyed so quickly. As for the view that some securities are trading at far lower prices than they deserved to be, Len Blum, a managing director at Westwood Capital, a boutique investment bank based in New York, said investors always overreacted to bad news, just as they overreacted to good news.

“The market always paints with a broad brush,” he said.

Another banker, Joseph M. Donovan, said the hand-wringing was overdone. He said what ailed the market was clear, but added that solutions would take time.

In his estimation, defaults are highest in cases where lenders take too many risks because neither they nor borrowers have much to lose. Mortgage companies sold the loans to Wall Street banks, and homeowners did not put any money down. Mr. Donovan, a retired Credit Suisse executive, said the packagers of the securities and investors took false comfort from the diversity of loans backing their securities.

“We need to step back and take a breather,” he said. “I don’t think there is anything fundamentally wrong.” Mr. Devaney, the bond trader, generally agrees with Mr. Donovan, whom he regards as a mentor.

Standing near a conference booth for Standard & Poor’s, the ratings firm, Mr. Devaney said to a fellow trader that he should buy bonds backed by second mortgages trading at deep discounts.

“I am buying things at 10 to 15 cents” on the dollar, Mr. Devaney boasted. The other trader, who did not consent to being identified, said he was worried that the bond prices might fall more.

Later, Mr. Devaney himself seemed to have second thoughts.

“I’m worried I won’t be able to call the bottom,” he said. But he quickly regained his old confidence. “Most of the stuff I have has limited downside,” he said.


Follow the link...

[Demeter]

9. Sounds More Like a Hobby for the Well-Heeled Than an Industry

or an investment plan.

[SpiralHawk]

19. A great story. Could be subtitled: "Republicon family values - the truth."

kick...

[TalkingDog]

27. Just like these guys, I woke up with the blues on my mind.

The difference is, I think I'll still have a few friends left after it gets really ugly......

Keith, Mick.... take it away.....

Waiting On A Friend


Watching girls go passing by
It ain't the latest thing
I'm just standing in a doorway
I'm just trying to make some sense
Out of these girls go passing by
The tales they tell of men
I'm not waiting on a lady
I'm just waiting on a friend

A smile relieves a heart that grieves
Remember what I said
I'm not waiting on a lady
I'm just waiting on a friend
I'm just waiting on a friend

Don't need a whore
I don't need no booze
Don't need a virgin priest
But I need someone I can cry to
I need someone to protect
Making love and breaking hearts
It is a game for youth
But I'm not waiting on a lady
I'm just waiting on a friend


Cheers to the SMW crowd. I'd raise a pint to you any day.

Off to errands.

And BTW.... damn you guys get up early. (nightowl)


My Favorite Master Artist: Karen Parker GhostWoman Studios

[UpInArms]

137. end-o-the-day cheers

back atcha, TD

:toast:

edited to add:

btw - you've been hanging around and posting here for ???

I do believe (and I wish Maeve would appear with her graphics) that you have become a real Marketeer!

Welcome to the fold

:grouphug:

[TalkingDog]

143. Lurking since before the subprime boil became infected

So at least a year....

Posting since it started getting inflamed.

Ducking when it finally pops.

I like the folks on SMW. Broad interests and intellectually curious without being rigid and pedantic.

You (collectively) keep me on my toes and inquisitive.

Much appreciated in my jaded middle age.


My Favorite Master Artist: Karen Parker GhostWoman Studios

[UpInArms]

146. ahhhhh

You (collectively) keep me on my toes and inquisitive

resonates

:D

[ozymandius]

5. Market WrapUp: Gold Traders See Thru ECB's "Smoke and Mirrors"

BY GARY DORSCH

European Central Bank chief, Jean “Tricky” Trichet, likes to operate behind a veil of “Smoke and Mirrors” in managing the Euro zone’s monetary policy, which is designed to fool most people, most of the time. Most importantly, “Tricky” Trichet has fueled the fastest growth in the Euro M3 money supply in history, running at three times the rate of the ECB’s original guidelines, deemed consistent with low inflation.

So it shouldn’t have been a surprise to learn that inflation in the Euro zone hit an all-time high of 3.2% in January, and far above the ECB’s inflation target of 2 percent. Euro zone producer price inflation picked up to an annual 4.3% in December, led by higher food and energy costs. Trichet and his band of propaganda artists have given plenty of lip service to fighting inflation in recent months, but behind the veil of “Smoke and Mirrors,” haven’t lifted a finger to put empty words into action.
.....

Yet under the leadership of “Tricky” Trichet, the purchasing power of the Euro in “hard money” terms, measured against the price of gold, has collapsed by 90% over the past four years. Speaking to the World Economic Forum in Davos on Jan 24th, “Tricky” Trichet told central bankers that under the capital market system it was natural for risks to emerge, but central bankers’ main job is to solidly anchor inflation expectations. “There is one needle in our compass and it is price stability.”
.....

Yet global traders expect “Tricky” Trichet to eventually show his weak hand, and follow Fed chief Ben “B-52” Bernanke, who has pumped tens of billions of dollars into the banking system since August, desperately trying to place a “safety net” under the US stock markets. “B-52” Ben used a chain saw to cut the US fed funds rate by a hefty 0.75%, the biggest single rate cut in more than 23-years, after global stock markets melted own, and lost $7.5 trillion of value last month.

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

[AnneD]

57. Morning Marketeers...

:donut: and lurkers. I love truth in advertising-it is the way things should be. I like that these thugs should be identified but their 'gangsta' monikers. I remember trying to do that on a thread once and promptly got locked down-but believe me-I have given all of these criminals a name suitable for any other mafia gang member.

One of the nice things about being a Nurse these days is that you get more job offers than you can shake a stick at. And considering the number I get....it's really bad out there. They come unsolicited in the mail and I pitch them in the trash with the credit card offers (hospitals basically suck anymore) but yesterday I got a call from a parent trying to recruit me. Maybe it is because I have had an awful 2 weeks and a particularly bad day yesterday, but it was a tempting offer. I can start out part time and advance to full time if I want. I like the thought of trying it out this summer. It involves teaching CPR, first aid and AED. I use to teach it to the &th graders when I was in NM. She said if I could teach 7th graders-I could teach anyone:rofl: I know it pays more and I am so close to retiring that would be a good transition for me. Anyway...food for thought.

Happy hunting and watch out for the bears.

[Roland99]

74. I've considered dumping programming and becoming a "murse"...

I know someone who is about to get her Master's and will then test for her license to be a nurse practitioner. Right now, she's making the same salary as I am and makes 50% more is she works a night shift.

yikes!

[AnneD]

87. It's not worth it...

esp. If you are expecting a big salary-you will discover you are not paid enough.

I have been a Nurse since '91 and it has gone down hill every year since I've been in.

You are mentally and physically exhausted after your 12 hr shifts that you have nothing to give your family some days.

You can count the year's good days at work on both hands.

Everyone feels entitled to ride your ass like a government mule (bullying is one of ugly secrets in health care).

Anytime they have a staff cutback (housekeeping, respiratory therapy, lab), the Nurse is expected to 'pick up the slack' in addition to doing their job.

You have 2 basic prayers:
on the way to work...God don't let me kill anyone today.
on the way home....God I hope I didn't kill someone.

Most new Nurses are out of the profession in 5 years.

[Roland99]

90. Hmmm.. well I do have an alternative plan.

I'll share some other time.

:-)

[Warpy]

70. Yeah, everybody's starting to see through the smoke & mirrors

and that's when the whole rickety edifice comes a-tumbling down.

That's what we're all afraid of.

I lost 2 year's nursing wages last month alone when I looked at paper profit. Sic transit glorious money.

Good thing I'm living on dividends and interest instead of paper profit.

[ozymandius]

6. Today's Report

10:00 AM Wholesale Inventories Dec
Briefing Forecast 0.2%
Market Expects 0.3%
Prior 0.6%

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

[UpInArms]

66. U.S. Dec. wholesale inventories up 1.1%

08. U.S. Dec. inventories building up for cars, petroleum
10:00 AM ET, Feb 08, 2008 - 1 hour ago

09. U.S. Dec. wholesale inventory-sales ratio rises to 1.09
10:00 AM ET, Feb 08, 2008 - 1 hour ago

10. U.S. Dec. wholesale sales fall 0.7%, most in 11 months
10:00 AM ET, Feb 08, 2008 - 1 hour ago

11. U.S. Dec. wholesale inventories up 1.1%
10:00 AM ET, Feb 08, 2008 - 1 hour ago

Timeline on the Great Depression

excerpt:

1929

Herbert Hoover becomes President. Hoover is a staunch individualist but not as committed to laissez-faire ideology as Coolidge.

More than half of all Americans are living below a minimum subsistence level.

Annual per-capita income is $750; for farm people, it is only $273.

Backlog of business inventories grows three times larger than the year before.

Public consumption markedly down.

Freight carloads and manufacturing fall.

Automobile sales decline by a third in the nine months before the crash.

Construction down $2 billion since 1926.

Recession begins in August, two months before the stock market crash. During this two month period, production will decline at an annual rate of 20 percent, wholesale prices at 7.5 percent, and personal income at 5 percent.

Stock market crash begins October 24. Investors call October 29 "Black Tuesday." Losses for the month will total $16 billion, an astronomical sum in those days.
Congress passes Agricultural Marketing Act to support farmers until they can get back on their feet.

1930

By February, the Federal Reserve has cut the prime interest rate from 6 to 4 percent. Expands the money supply with a major purchase of U.S. securities. However, for the next year and a half, the Fed will add very little money to the shrinking economy. (At no time will it actually pull money out of the system.) Treasury Secretary Andrew Mellon announces that the Fed will stand by as the market works itself out: "Liquidate labor, liquidate stocks, liquidate real estate… values will be adjusted, and enterprising people will pick up the wreck from less-competent people." (More)

The Smoot-Hawley Tariff passes on June 17. With imports forming only 6 percent of the GNP, the 40 percent tariffs work out to an effective tax of only 2.4 percent per citizen. Even this is compensated for by the fact that American businesses are no longer investing in Europe, but keeping their money stateside. The consensus of modern economists is that the tariff made only a minor contribution to the Great Depression in the U.S., but a major one in Europe. (More)

The first bank panic occurs later this year; a public run on banks results in a wave of bankruptcies. Bank failures and deposit losses are responsible for the contracting money supply.

Supreme Court rules that the monopoly U.S. Steel does not violate anti-trust laws as long as competition exists, no matter how negligible.

Democrats gain in Congressional elections, but still do not have a majority.
The GNP falls 9.4 percent from the year before. The unemployment rate climbs from 3.2 to 8.7 percent.

...more...

[kineneb]

77. Those who cannot remember the past...

...are condemned to repeat it.

George Santayana
— Life of Reason, Reason in Common Sense, Scribner's, 1905, p. 284

So true. And Econ people don't study history.

[ozymandius]

7. Oil prices add to overnight rebound

BANGKOK, Thailand - Oil prices in Asia rose Friday, adding to a rebound that started overnight as a more stable stock market calmed investors fears about the health of the U.S. economy.

The Dow Jones industrials inched higher Thursday after the sharp sell-off of recent days. Energy investors often view the stock market as a barometer of economic health, worrying that any slowdown in growth will lead to a corresponding slump in energy demand.

Also possibly supporting prices in Asia was the U.S. Congress' final approval of a $168 billion rescue plan designed to put government money in the hands of American shoppers to revive a flagging economy. The approved package is more than 10 percent higher than the proposal President Bush had earlier negotiated with congressional leaders.
.....

Light, sweet crude for March delivery rose 41 cents to $88.52 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract rose 97 cents to settle at $88.11 a barrel overnight.

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

[ozymandius]

8. Consumer confidence sinks even lower

WASHINGTON - People's confidence in the economy sank even lower amid heightened fears about shrinking job opportunities and the possibility the country is falling into recession.

According to the RBC Cash Index, confidence dropped to a mark of 48.5 in early February, from 56.3 last month. The new reading was the worst since the index began in 2002 and surpassed the previous low reached in January.

The continued erosion in confidence comes despite the fact that Federal Reserve Chairman Ben Bernanke has gotten much more forceful in cutting interest rates to induce people to buy more and bolster the economy. The Fed slashed interest rates twice over the span of just eight days in January — its most aggressive rate reductions in two decades.
.....

One of the biggest causes of angst: a weakening job market, analysts said. U.S. employers cut jobs in January for the first time in more than four years, the government reported last week. Wage growth also slowed last month, the report showed.

Another source of anxiety: a housing slump that continues to drag on. The housing bust has led to record-high home foreclosures and has dragged down home values — usually peoples' single biggest asset — making them feel less wealthy. In addition, high energy and food prices are squeezing budgets and turbulence on Wall Street is shrinking nest eggs. All these things are making people feel more insecure about their own financial fortunes and more concerned about the direction of the economy as a whole.

http://news.yahoo.com/s/ap/20080208/ap_on_bi_ge/consumer_confidence

[TalkingDog]

114. News from the Walkway....

To most of you this will seem like I'm reaching, but "hear" me out.... Visual language has it's styles and cycles, like spoken language.

But the difference is that in spoken and written language you don't have a bunch of professional writers sitting down and deciding what words or phrases or ideas are going to be en vogue 2 years from now.

Designers do just that. They trend out fashion, styles and colors ahead of the curve, so by the time that eggplant color everybody seems to be using in their dining room gets to your local store, all the accessories somehow magically match. (pay no attention to the designers behind the curtain)

In RTW (ready to wear), it's a bit trickier, as women tend to follow fad as well as fashion. So the projected "mood" is important. If you think back to the flapper era (art nouveau, art deco) of the roaring 20's you might remember metals and gold and gem tones.

And when we moved into the Depression, not only were clothes less colorful, the used much less fabric. More structured and more fitted.

as opposed to:



When searching for images, I couldn't even find illustrations of the same type. If you will note in the 20's image a beautiful couple enjoying the high life. As for the 30's I couldn't find a fashion illustration with people in it. Presumably the fellow in the 2nd illustration has made a shelter of his old shirts and is living on the beach.....


What brought me to this post was the NY Times fashion page for today. It was full of grey, structured clothes for Spring. SPRING


Compare the clothes in the Spring 06 collection (which would have been conceived as early as 04) and the Spring 08 collection.


Spring 2006: loose flowing pastels. Your average spring.
http://nymag.com/search/fashion-search.cgi?nymbreadcrumb_push=2006%20Spring%20RTW&other_params=&results_per_page=20&sort_params=&search_type=fashion&autonomy_fieldname=SeasonLabel&autonomy_fieldvalue=2006%20Spring%20RTW&filter_prettyname=2006%20Spring%20RTW


Spring 2008: black, grey, greyed-down and fitted. Much more harsh and .....not so much spring like.
http://nymag.com/search/fashion-search.cgi?crumb_qid=12025007110&other_params=2008%2520Spring%2520RTW%3BSeasonLabel%7E%7E2008%20Spring%20RTW&results_per_page=20&sort_param=sortdate&search_type=fashion&result_stop=40


There it is. Seeping into everybody's subconscious. Depression. IMHO....

(edited for clarity of ideas)

My Favorite Master Artist: Karen Parker GhostWoman Studios

[Hugin]

121. Interesting observation...

I've seen others about the height of hemlines in good times vs. bad.

Dresses tend to become longer and men's pants lose the pleats and cuffs.

(Don't see any of that here! :P )

[Hugin]

124. Ah, the poster child of the age...

Did you see the one about 3 pages back with the cane and leg cast?

[TalkingDog]

134. No, but at least I had the sense to skip the second page for the 08 RTW

They had a "mermaid" in her full, half-fish splendor on page one.

I may not be child friendly, but at least I can try to keep it SFW for all the cube rats out there.


As far as hemlines go (so to speak), I think it will take a supershock to force them back down all at once.

In terms of semiotics, there seems to be a harshness, an edge of defiance to these lines. Think pre-war Germany rather than post Crash America. The colors are oily and the lines are strict. Not the visual language of shock or grieving, but of unexpressed anger and a kind of repressed rage.




My Favorite Master Artist: Karen Parker GhostWoman Studios

[UpInArms]

138. those pics remind me of lyrics from Metropolis

Circles fof the human chain
Turning for the wheels of gain
A system with a power of its own
To draw blood from a stone

Every hour like the last
Tomorrow like the day just passed
Bearing down upon the flesh and bone
To draw blood from a stone

Cole machines that never stop
Even if a man should drop
Mercy never lets her face be shown
They draw blood from a stone

[ozymandius]

10. Subprime accounting stretched from day one: Herz

WASHINGTON (Reuters) - Banks bent and stretched accounting rules from "day one" to keep risky securitized assets, such as those linked to subprime mortgages, off their books, the top U.S. accounting rule maker said on Thursday.

Robert Herz, chairman of the U.S. Financial Accounting Standards Board, said the current accounting rules governing treatment of securitized assets on banks' books are "a fantasy" and need to be redone.

"It didn't work, it was stretched, and not complied with," Herz said at the Reuters Regulation summit in Washington, referring to FAS 140, the rule that decides whether a bank can treat assets held in various securities as sales or secured financing.
.....

Under the current accounting rules, complex legal structures and accounting methods were used to allow mortgage-backed securities and other asset-backed structures to be named "qualifying special purpose entities" or QSPEs.

The QSPEs were thought to be sufficiently out of control of the banks that they did not have to be booked on their balance sheets. But Herz said that principle was not strictly followed.

http://news.yahoo.com/s/nm/20080207/bs_nm/regulation_summit_balancesheets_dc_1

[InkAddict]

59. Did you see this one in GD?

Exploding ARMs Roil Bernanke's Drive to Calm Markets (Update4)

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x2833649

[DemReadingDU]

64. neutron loans

from the Bloomberg article

``We call them neutron loans because they're like a neutron bomb,'' said Brock Davis, a broker with U.S. Express Mortgage Corp. in Las Vegas. ``Three years later the house is still there and the people are gone.''

http://www.bloomberg.com/apps/news?pid=20601109&sid=aFCgFMs3dlSk&refer=home



:(

[ozymandius]

11. MBIA boosts stock offering

ARMONK, N.Y. (AP) -- Bond insurer MBIA Inc., which has been trying to raise capital to maintain its crucial "AAA" financial strength rating, said Thursday it has boosted the size of a public stock offering to $1 billion from the $750 million it announced one day earlier.

MBIA (MBI) said it priced the offering of 82.3 million shares at $12.15 apiece. Underwriters JPMorgan Securities Inc. and Lehman Brothers Inc. have a 30-day option to buy up to another 12.35 million shares, which would raise another $150 million.

Warburg Pincus, which has already directly invested $500 million in MBIA, will purchase $300 million in shares as part of the offering, MBIA said.

http://money.cnn.com/2008/02/08/news/companies/mbia_stock_offer.ap/index.htm?postversion=2008020806

[ozymandius]

13. Rating agency efforts not enough, say critics

NEW YORK (CNNMoney.com) -- After enduring months of scrutiny and attacks, the big three credit rating agencies were criticized once again Thursday, with critics charging that their recent efforts to shore up their shaken rating systems are too little and too late.

Among the most vocal was New York Attorney General Andrew Cuomo, who called the changes "more like public relations window dressing than systemic reform," in a statement issued late Thursday.

.....

Credit rating agencies came under fire late last summer when the market began assigning blame for the credit crisis, as critics claimed that ratings assigned to mortgage-related securities by the big three - Standard & Poor's, Moody's and Fitch - were blinded by cozy relationships with debt issuers.

http://money.cnn.com/2008/02/07/markets/rating_agencies/index.htm

Yes indeed. I know it must be a shock to learn that the ratings agencies are paid by the insurers to rate their creditworthiness.

[Buttercup McToots]

12. WSJ: Americans at the end of their rope financially

WSJ: Americans at the end of their rope financially in forum

New York

Credit-Card Pinch
Leads Consumers
To Rein In Spending
By ROBIN SIDEL, SUDEEP REDDY AND JANE J. KIM
February 8, 2008

America's love affair with credit cards may be headed for the rocks.

Credit-card delinquencies are rising across the nation, a sign that some Americans are at the end of their rope financially. And these mounting delinquencies, in turn, have prompted banks to tighten lending standards, keeping people who have maxed out their cards from finding new sources of credit.

The result could be a sharp pullback in consumer spending that would further weaken the slowing U.S. economy.

Such a pullback may already be taking shape. Yesterday, the Federal Reserve reported an abrupt slowdown in consumers' credit-card borrowings. In December, Americans had $944 billion in total revolving debt, most of it on credit cards, a seasonally adjusted annualized increase of 2.7%. That was off sharply from seasonally adjusted growth rates of 13.7% in November and 11.1% in October. And it reflects the volatility in consumers' spending habits as economic growth sputters.

Sinking home prices have made it much harder to convert home equity into cash for living expenses. At the same time, plastic has pushed into every corner of American life, making new inroads that worry some economists and card issuers.

In past economic downturns, Americans used credit cards mainly for discretionary purchases, such as furniture, appliances and jewelry. Now, however, many of them regularly whip out plastic to pay for groceries, gasoline and other everyday necessities. Credit-card issuers won't disclose exact figures, but they say it is evident that a growing percentage of card volume is for basic purchases. Many issuers even dole out extra rewards for such transactions.

Evidence is mounting that the plastic-fueled spending spree won't last. In December, an average of 7.6% of credit-card loans were either at least 60 days delinquent or had gone into default, up from 6.4% a year earlier, according to research firm RiskMetrics Group. The analysis includes a broad swath of more than $200 billion of credit-card loans that are sold off to investors by major card issuers like Citigroup Inc., Capital One Financial Corp., American Express Co. and J.P. Morgan Chase & Co.

Card delinquencies are ticking up from historically low levels, but the trend is sending shudders through lenders already reeling from the subprime-mortgage tumult. As a result, leery card issuers are bulking up their reserves against future card-related losses -- and getting so much tougher on borrowers that some consumer are reining in overall spending.

Eating Out Less

After J.P. Morgan doubled the interest rate on her credit card to around 30% and lowered her credit limit in December, Jennifer Campion, a 39-year-old computer-software instructor in Chandler, Ariz., decided to eat out less often and to forgo her daily coffee at Starbucks so she can pay off her outstanding card balances. "Our whole lifestyle has changed at this point because of this strict budget we're on," says Ms. Campion, who has a total of about $7,000 in credit-card debt.

Yesterday, card issuer Discover Financial Services said 49% of consumers it surveyed in January plan to reduce their discretionary spending this month. That was an increase of five percentage points from its December survey and a 10-point jump since September.

Consumers typically increase their borrowing in the early stages of an economic downturn as they try to maintain their living standards amid a weakening job market and slowing wage growth. That trend seems to be holding true to form so far.

For consumers who are in financial distress, paying for basic needs with plastic "is the easiest way out of that box," says Bryan Derman, a partner at Glenbrook Partners LLC, a Menlo Park, Calif., consulting firm that specializes in the payments industry.

Cut in Credit Line

After American Express and Barclays PLC's Juniper Bank cut his credit lines recently, 54-year-old Marv Hedrick, of Spring Hill, Fla., cut back on his purchases of DVDs and electronic gadgets. But Mr. Hedrick, director of finance for an auto dealership, still uses a credit card to buy groceries and gasoline. His household expenses, including his cellphone, cable and utility bills, are automatically charged to his credit card every month.

"I cannot tell you the last time I've written a check or used a debit card. I never carry cash on me," says Mr. Hedrick.

Indeed, many Americans are so dependent on their credit cards for basic needs that about 25% of the clients walking into Margo Mitchell's credit-counseling office in Tulsa, Okla., have opted to pay their monthly credit-cards bills before their mortgages. "The credit card is a means for them to supplement their income and becomes a cushion to buy groceries," she says.

But when recessions hit, consumer borrowing typically drops off substantially as consumers, facing the mounting threat of job losses and lower household income, can no longer keep up with their card payments.

"Many Americans don't realize the direct correlation between the need to change their behavior and their income," said Bill Druliner, a credit counselor for GreenPath Inc. "The longer somebody maintains that lifestyle, the bigger the crash is when it finally comes down to earth."

In the past decade, card issuers have made it easier than ever for Americans to put more of their spending on plastic, in part through juicy rewards programs. At the same time, banks persuaded more merchants to accept cards, touting data showing shoppers often spend more when paying with credit cards, rather than cash.

McDonald's Corp. started accepting credit cards in 2003, and some utilities have started letting customers pay with plastic. Cards emblazoned with the MasterCard logo now are accepted at more than seven million merchant locations in the U.S., up from 4.3 million in 2001 and 2.9 million in 1991.

As a result, three out of four American families have credit cards. Their balances averaged $5,100 in 2004, up 16% from 2001, according to the Federal Reserve.

Debit-Card Use

Much of the card industry's growth has come from debit cards, which aren't included in the government's revolving-credit data because they immediately draw funds out of purchaser's checking account. Still, credit-card portfolios managed by card-issuing banks are growing at single-digit percentage rates each year as consumers put more small payments and everyday purchases on their cards.

This isn't the first time changes in credit-card usage have affected consumer borrowing. In 1980, then-President Carter sought to cut back consumers' use of credit cards, blaming them in part for the nation's runaway inflation at the time. Consumer spending tumbled as a result.

Politicians have also turned to credit cards as a way to spur the economy. In 1991, as the economy rebounded from a recession, President George H.W. Bush, the current president's father, tried to urge banks to lower interest rates in order to propel consumer spending.

Write to Robin Sidel at [e-mail]

http://online.wsj.com/article/SB12024332....

[Buttercup McToots]

15. NYT: Papers Show Wachovia Knew of Thefts

By CHARLES DUHIGG
Published: February 6, 2008

Last spring, Wachovia bank was accused in a lawsuit of allowing fraudulent telemarketers to use the bank’s accounts to steal millions of dollars from unsuspecting victims. When asked about the suit, bank executives said they had been unaware of the thefts........

Quote:
“We are making a ton of money from them,” wrote Linda Pera, a Wachovia executive, in 2005 about a company that was later accused by federal prosecutors of helping steal up to $142 million.

Ms. Pera left Wachovia in 2006, and could not be located.


http://www.nytimes.com/2008/02/06/busine....

[antigop]

49. Buttercup, I can't get the link to work.... n/t

[DemReadingDU]

53. try here

http://www.nytimes.com/2008/02/06/business/06wachovia.html?

[Maeve]

54. try this one

http://www.nytimes.com/2008/02/06/business/06wachovia.html?scp=2&sq=wachovia&st=nyt

[lovuian]

129. thieves helping thieves and then US citizens have to bail them

out

[Ghost Dog]

16. Paulson Pushes for G-7 Fiscal Stimulus, Germany Balks

Feb. 8 (Bloomberg) -- Finance officials from the Group of Seven industrial nations are at odds over the best remedy for a world economy rocked by the fallout from the U.S. credit crisis.

U.S. Treasury Undersecretary David McCormick this week urged the G-7 to ``take prudent steps'' to shore up growth, and U.K. Chancellor of the Exchequer Alistair Darling vowed to do so. The response from other members has been muted. Canada's Jim Flaherty ruled out ``large'' tax cuts, Germany's Thomas Mirow said the U.S. must do more and Japan's Hiroki Tsuda said he's ``cautious'' about using fiscal policy.

Finance ministers and central bankers from the G-7 meet in Tokyo tomorrow as evidence mounts that the U.S. is heading toward a recession and other major economies are slowing. Failure to agree on a joint response may further undermine global growth this year, which is forecast by the International Monetary Fund to be the weakest since 2003.

``There may well be a view that this is a U.S. problem for the U.S. to sort out,'' said Julian Jessop, chief international economist at Capital Economics Ltd. in London. ``Tensions might be bigger this time.''

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=alGLE2QV0p2c&refer=asia

[Ghost Dog]

21. G7 draft: Will act to secure stability, growth

TOKYO, Feb 8 (Reuters) - The Group of Seven finance ministers and central bank governors gathering in Tokyo on Saturday will reaffirm their determination to ensure financial stability, according to a draft G7 statement obtained by Reuters.

"We will continue to watch developments closely and remain committed to taking necessary action, individually and collectively, in order to secure stability and growth in our economies," the draft read.

"Euro-area growth, though slowed to a more moderate pace recently, is projected to stay broadly in line with trend potential."

"The Japanese economy is expected to get through some weaknesses seen recently, and return to a moderate growth path."

/.. http://www.reuters.com/article/marketsNews/idCATKB00293420080208?rpc=44

[Ghost Dog]

22. G7 wants to hear why Fed slashed rates-Italy source

TOKYO, Feb 8 (Reuters) - Finance ministers attending the G7 in Tokyo on Saturday want to hear from the United States about the reasons for the Federal Reserve's dramatic slashing of interest rates, an Italian G7 source said.

The G7 will also discuss the risk that short-term measures to stabilise markets, whether through interest rate cuts or liquidity injections, may have negative long-term consequences, the source said.

The uncertain prospects of the U.S. economy will be a major subject of debate, the official said in embargoed remarks made at a briefing in Rome on Tuesday, on condition he not be named.

"There's a great thirst for information (among the other ministers) about the picture for U.S. economy and the motivations behind the Fed's monetary policy moves which can only be described as dramatic," he said.

"It's important to hear where the United States economy is and what they intend to do."

/... http://www.reuters.com/article/marketsNews/idCATKV00300720080208?rpc=44

[UpInArms]

43. "very liquid markets may have been the cause of the crisis in the U.S. subprime mortgage sector"

The official said there was concern that measures which respond to market tensions by increasing liquidity might not be in the interests of long-term stability.

He said very liquid markets may have been the cause of the crisis in the U.S. subprime mortgage sector that sparked the subsequent market turmoil.

"This is the main dilemma, how to handle a possible contrast between short-term moves to stabilise markets and whether or not this creates the basis of greater stability" in the long term.

(more from your link)

[kineneb]

78. information? they should open their eyes.

1."It's important to hear where the United States economy is

2.and what they intend to do."

1. in a deep hole
2. keep digging

like, duuuuhhhhh!

[Ghost Dog]

17. Japan's Stocks Drag Asia Lower

Feb. 8 (Bloomberg) -- Japan's stocks dropped, led by Komatsu Ltd., after machinery orders fell more than forecast. Wesfarmers Ltd. led gains in Australia after hiring a former Wal-Mart Stores Inc. executive to run its Coles supermarkets.

Komatsu, the world's second-largest maker of construction machinery, declined to a two-week low and Sumitomo Heavy Industries Ltd. slumped to its weakest in more than two years. The MSCI Asia Pacific Index fell for a sixth straight week, its longest losing streak in more than three years. Half of Asia's markets are closed today.

Indian stocks fell for a third day, led by ICICI Bank Ltd., on concern an unexpected pickup in inflation will limit the central bank's ability to lower borrowing costs.

``After the sell-off, if you're a value-based investor now is the time to pick the eyes out of the market and take opportunities,'' said Jason Teh, who helps manage the equivalent of about $5.3 billion at Investors Mutual Ltd. in Sydney.

Japan's Nikkei 225 Stock Average lost 1.4 percent to 13,017.24, dragging the MSCI Asia Pacific Index down 1 percent to 140.68 as of 7:14 p.m. in Tokyo. The MCSI index has retreated 3.1 percent this week, completing its longest stretch of declines since August 2004. All of the region's benchmarks have fallen this year.

Australia's S&P/ASX 200 Index advanced 1.1 percent today, paring its slump this year to 11 percent. Shares also rose in the Philippines and Thailand and fell in New Zealand. India's Sensitive Index, or Sensex, dropped 0.4 percent, posting a fourth straight week of declines. Seven other markets, including China and Hong Kong, were closed for Lunar New Year holidays.

The Tokyo Stock Exchange halted trading of Topix index futures today because of a computer-system glitch.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=aTFEWIGV6wB0&refer=asia

[Ghost Dog]

20. Japan Machine Orders Decline on Anticipated Slowdown

Feb. 8 (Bloomberg) -- Japan's machinery orders fell more than expected in December as manufacturers scaled back investment in anticipation of slowing global economic growth.

Orders, an indicator of business spending in the next three to six months, slid 3.2 percent from November, when they sank 2.8 percent, the Cabinet Office said today in Tokyo. The median forecast of 43 economists surveyed by Bloomberg News was for a 0.9 percent drop.

Shares of Komatsu Ltd. and other machinery makers fell after the report on concern Japan may be following the U.S. into a recession. Finance Minister Fukushiro Nukaga will discuss with U.S. Treasury Secretary Henry Paulson how the Group of Seven nations can maintain global economic stability when they meet in Tokyo tomorrow.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=a7WaJsHUqWn8&refer=asia

[Ghost Dog]

18. European stocks pare gains as drugmakers weigh

LONDON, Feb 8 (Reuters) - European stocks pared gains in mid-morning trade on Friday as drugmakers offset some of the positive effect of strong commodity stocks.

At 1038 GMT, the FTSEurofirst 300 index of top European shares was up 0.6 percent at 1,304.71 points but well off its day high of 1,315.77, when it was up 1.5 percent.

/... http://www.reuters.com/article/marketsNews/idCAL0838737920080208?rpc=611

[Ghost Dog]

30. France's finance minister praises ECB shift, says euro too high

TOKYO (AFP) - French Finance Minister Christine Lagarde on Friday welcomed the European Central Bank's more cautious view of the economic outlook but said the euro was still too high for comfort.

Lagarde was in Japan to meet with her counterparts from the Group of Seven rich nations in the wake of intense market volatility due to the fallout from a slump in the US housing sector.

The ECB on Thursday left interest rates unchanged but bank president Jean-Claude Trichet underscored "unusually high" uncertainty about eurozone growth prospects, raising speculation of future rate cuts.

Lagarde, speaking to AFP after arriving in Tokyo, welcomed Trichet's statement, saying "it gives a more accurate appraisal of the economic situation as we see it."

"Considering the different interest rate cuts" in the United States "and what European Union members have said of their respective views on the economic situation in Europe, this is pretty logical," she said.

/... http://news.yahoo.com/s/afp/20080208/bs_afp/ecbeurozonebankeconomyrateforexmoney_080208113142;_ylt=ApJk2dD1Ne0YMiyS4YaCCGymOrgF

[Ghost Dog]

33. Euro= USD 1.449, GBP 0.743, CHF 1.601 and JPY 156.0 at this time

[Ghost Dog]

35. Euro heads for worst week in 18 months

(FT) The euro remained under pressure on Friday, heading for its worst weekly performance against the dollar in eighteen months after the European Central Bank abandoned its hawkish stance on interest rates.

On Thursday, the ECB, as universally expected left eurozone interest rates on hold at 4 per cent.

However, Jean-Claude Trichet, ECB president, abandoned his threat to "pre-emptively" raise eurozone interest rates to curb inflation, instead warning of the downside risks to growth posed by financial market turbulence and a slowdown in the eurozone's major trading partners.

The euro sold off sharply on the news, and analysts were expecting that trend to continue.

"The ECB's admission that they are now neutral - rather than hawkish - has moved yield spreads against the euro in the majority of currency pairs," said David Simmonds at RBS.

/... http://news.yahoo.com/s/ft/20080208/bs_ft/fto020820080619477340;_ylt=Alr1RX3xK2KN1M7plHkzDWz2ULEF

[Ghost Dog]

31. Commodities lead Europe stocks higher; GSK weighs

LONDON, Feb 8 (Reuters) - European shares rose by midday on Friday, helped by commodity stocks that tracked oil and copper prices higher, though pharmaceuticals limited gains as GlaxoSmithKline (GSK.L: Quote, Profile, Research) fell on a slew of price target cuts.

At 1146 GMT, the FTSEurofirst 300 index of top European stocks rose 0.4 percent to 1,301.81 points, with miners and oil shares the top weighted gainers.

...

"The leading indicators continue to deteriorate around the globe, in some cases strongly," Gerhard Schwarz, head of global equity strategy at UniCredit, said in a note.

"In this environment, current valuations have lost importance as a support factor; the fears of a profit recession have increased substantially since the beginning of the year."

Heino Ruland, a strategist at FrankfurtFinanz in Germany, said: "The market is becoming aware that the crisis in the United States will indeed have an adverse impact on growth in Europe."

...

Around Europe, Britain's FTSE 100 .FTSE was up 0.2 percent, Germany's DAX .GDAXI up 0.6 percent and France's CAC .FCHI up 0.3 percent.

/... http://www.reuters.com/article/marketsNews/idCAL0870934520080208?rpc=611

[Ghost Dog]

103. Miners, techs help European stocks end higher

PARIS, Feb 8 (Reuters) - European stocks closed higher on Friday, helped by rallying tech and mining shares, but ended the week down nearly 4 percent on U.S. recession worries and as fresh fears over the fate of bond insurers hammered banking shares.

The FTSEurofirst 300 index of top European shares closed 0.5 percent higher at 1,302.36 points. Europe's benchmark index lost 3.7 percent on the week.

"There is certainly the feeling that this week's trading has done little to inspire confidence that we are definitely over the worst," David Jones, chief market strategist at IG Index, wrote in a note.

News that Moody's Investors Services cut its triple-A ratings for "monoline" bond insurer XL Capital Assurance, a unit of Security Capital Assurance (SCA.N: Quote, Profile, Research), heightened fears of more write-downs for banks.

...

The FTSEurofirst 300 index has lost nearly 14 percent so far in 2008, hit by fears that the U.S. economy could tip into recession.

"The leading indicators continue to deteriorate around the globe, in some cases strongly," Gerhard Schwarz, head of global equity strategy at UniCredit, said in a note.

"In this environment, current valuations have lost importance as a support factor; the fears of a profit recession have increased substantially since the beginning of the year."

Around Europe, Germany's DAX index .GDAXI gained 0.5 percent, UK's FTSE 100 index .FTSE rose 1.1 percent and France's CAC 40 .FCHI fell 0.3 percent.

/... http://www.reuters.com/article/marketsNews/idCAL0881438520080208?rpc=611

[Buttercup McToots]

23. Bad - retailers closing stores left & right

This is bad - retailers closing stores left & right


http://www.costar.com/News/Article.aspx?....

The past couple months in retail real estate have been laden with more store closing announcements and news of retailers slowing expansion plans than we've seen in a long time. However, two retail real estate strategy executives, a Wall Street retail analyst and a leading Texas retail real estate broker, confide that closing stores and turning cautious over expansion plans may be the best thing for retailers to be doing right now.

Announcements over the last couple months include Movie Gallery closing another 400 stores; Charming Shoppes closing 150 stores and cutting expansion plans by 50%; Starbucks closing 100 stores and slowing expansion plans by 34%; Ann Taylor shuttering 117 stores and slowing store growth; Boston Market evaluating its real estate opportunities; Buffet Holdings sorting out its underperformers; Sprint Nextel closing 125 stores and 4,000 distribution points; Cost Plus World Market closing 18 stores; Liz Claiborne closing 54 Sigrid Olsen stores; New York & Company axing the Jasmine Sola brand and its 32 stores; Ethan Allen closing 12 stores; PacSun closing all of its 173 demo stores; and Talbots exiting its kids and men's lines through closure of 78 stores.

Others include Rite Aid exiting Nevada by closing 28 stores; Macy's closing nine stores; Krispy Kreme expecting many franchisees to close stores; Kirkland's Home likely closing 130 stores; CompUSA's remaining 103 stores being disposed of; Rent-A-Center closing 280 stores; Sofa Express closing 44 stores in bankruptcy; 84 Lumber closing 12 stores; Home Depot closings some call centers; Levitz Furniture disposing of 76 stores in bankruptcy; Pep Boys closing 31 stores; Lifetime Brands closing 30 stores; Big A Drugs liquidating its 21 stores; and more.

[Viva_La_Revolution]

86. If I walk one block up to Main Street, I see 2 stores closing down...

A gift shop that has been there for over 20 years, and a Paint store that has been on Main for over 10. :(

The Payday loan place that closed down a few blocks up brought a smile to my face however. :)

[DemReadingDU]

24. Whitney: The Bush Bust of '08

2/7/08 The Bush Bust of '08
“It's All Downhill From Here, Folks” By Mike Whitney

On January 14, 2008 the FDIC web site began posting the rules for reimbursing depositors in the event of a bank failure. The Federal Deposit Insurance Corporation (FDIC) is required to “determine the total insured amount for each depositor....as of the day of the failure” and return their money as quickly as possible. The agency is “modernizing its current business processes and procedures for determining deposit insurance coverage in the event of a failure of one of the largest insured depository institutions.”
http://www.fdic.gov/news/news/financial/2008/fil08002.html#body

The implication is clear, the FDIC has begun the “death watch” on the many banks which are currently drowning in their own red ink. The problem for the FDIC is that it has never supervised a bank failure which exceeded 175,000 accounts. So the impending financial tsunami is likely to be a crash-course in crisis management. Today some of the larger banks have more than 50 million depositors, which will make the FDIC's job nearly impossible.

So, what does it all mean?

It means there's going to be an unprecedented wave of bank closures in the US and that people who want to hold on to their life savings are going have to be extra vigilant as the situation continues to deteriorate. And it is deteriorating very quickly.

more...
http://www.informationclearinghouse.info/article19307.htm

[Pale Blue Dot]

26. ....

Nobody wants to hear this. I'm going to resume plugging my ears with my fingers and singing loudly until you go away.

:scared:

[kineneb]

82. unfortunately...Whitney has been right so far.

and yet... there are those who still "poo-poo" his writings.

[Buttercup McToots]

25. Treasuries Fall as Demand Wanes for Lowest-Ever 30-Year Yield

Quote:
Treasuries Fall as Demand Wanes for Lowest-Ever 30-Year Yield

http://www.bloomberg.com/apps/news?pid=2....

[Buttercup McToots]

28. Protected Vehicles Files for Chapter 11

Protected Vehicles Files for Chapter 11
Wednesday February 6, 3:23 pm ET
By Bruce Smith, Associated Press Writer
Protected Vehicles Files for Bankruptcy Protection Amid Slowdown for Armored Trucks


CHARLESTON, S.C. (AP) -- Protected Vehicles, which builds bomb-resistant trucks for the military, has filed for Chapter 11 bankruptcy protection amid tough times for the armored vehicle industry.

The North Charleston-based company laid off about 250 workers and ceased operations late last year, and its bankruptcy petition comes as the Marine Corps last year decided to buy a third fewer armored vehicles. Some observers say a drop in violence in Iraq and Afghanistan may mean even fewer orders in the future.

In a petition filed Tuesday in U.S. Bankruptcy Court in Columbia, Protected Vehicles listed $24 million in assets and $58 million in liabilities, with the U.S. Marines as its largest creditor.

It listed more than 230 creditors, including a $15.8 million claim from the Marines, according to court documents. The filing also shows that 10 creditors have outstanding claims against the company in state court. Also, 266 employees are owed vacation, salary or commissions.

A spokesman for Protected Vehicles did not immediately return a telephone message.

Last month, two of Protected Vehicles other creditors went to court asking that the company be put into involuntary bankruptcy and its assets liquidated.

But Chapter 11 protection means the company will remain free from lawsuits while it reorganizes its finances. Any reorganization plan must be approved by creditors.

Protected Vehicles was awarded a $37.4 million contract a year ago for 60 bomb-resistant vehicles, said Marines spokesman Austin Johnson. Ten were delivered by Christmas but the initial vehicles failed to meet the Marines' required specifications, he said.

A statement filed with the court estimated Protected Vehicles' future gross monthly income at $6.6 million and monthly net income at $248,000.

Protected Vehicles was founded in 2005. It was sued last August in federal court by another local manufacturer of armored vehicles, Force Protection, which is based in Ladson about 10 miles from Protected Vehicles.

That lawsuit named Protected Vehicles and its founder, Garth Barrett, a former Force Protection president who resigned to start the new business.

The suit claims computer fraud, misappropriation of trade secrets, unfair trade practices and breach of contract.

http://biz.yahoo.com/ap/080206/armored_v....

[Buttercup McToots]

29. Allied Van Lines File Bankruptcy

Allied Van Lines File Bankruptcy

rawlins, wyoming

http://www.forbes.com/feeds/ap/2008/02/0....



WASHINGTON - Moving company Allied Van Lines Inc., along with its corporate parent Sirva Inc., filed for bankruptcy protection Tuesday, the latest victim of a heavy debt load and the downturn in the U.S. housing industry.

The company, which is based in Westmont, Ill., listed assets of $924 million and debts of $1.2 billion. The company has more than 100,000 creditors.

Sirva filed for Chapter 11 protection in U.S. Bankruptcy Court in Manhattan after reaching a deal with its lenders to cut its debt by some $200 million.

Under the company's "prepackaged" bankruptcy plan, Sirva's lenders will trade a portion of the debt they're owed for a 75 percent stake in the reorganized company. Existing shares in the company will be canceled.

Sirva has lined up a $150 million loan to fund its Chapter 11 case and an additional $215 million in financing for when it exits bankruptcy protection. Under the deal, the company's bankruptcy lenders, led by JPMorgan Chase (nyse: JPM - news - people ) Bank, will receive an additional 25 percent stake in the reorganized company.

In addition to its heavy debt load, the company's relocation services business has been slammed by the downturn in the U.S. housing market.

"Specifically, declining home prices have increased the number of homes the debtors have been required to purchase and subsequently sell for a loss," Sirva said in court papers.

Details about the company's deal with lenders was contained in Sirva's prepackaged Chapter 11 plan. Under a prepackaged bankruptcy filing, a company files its Chapter 11 plan along with its initial petition, having already agreed to the terms of its restructuring with lenders.

The company said it intends to stay in business during its bankruptcy case and expects to exit Chapter 11 in two to three months.

[Demeter]

32. SERIAL BUBBLES? by James Howard Kunstler

DailyReckoning.com



...For one thing, the term “bubble” suggests something more like a financial Chinese fire drill than actual productive activity. It would be an excellent thing if Americans invested in a restored passenger rail system. But if it were merely a scheme for big banks to issue innovative new securities for gigantic fees without actually getting any trains running – well that would be in the nature of just another old-fashioned swindle, as the bundling of mortgages into securitized debt paper has proven to be.

In other words, does Janszen make a distinction between a boom and a “bubble?” He seems to understand that the previous two bubbles in dot-coms and houses were essentially frauds that generated imaginary wealth, which sooner later evaporated off the balance sheets and out of the financial system. A boom, it seems to me, is not the same as a “bubble.” While perhaps wasteful and messy, booms at least produce something of value beyond the fees paid to bankers for arranging the deployment of capital. A boom that resulted in citizens being able to take a train from Boston to Albany would produce a substantial public good. The creation by Goldman Sachs of a company on paper that never accomplished anything would be something else. This, of course, leads to a deeper question as to whether the U.S.A. is actually a serious society or just a nation of hopeless, greedy clowns? Are we even capable anymore of distinguishing between purposeful activity and the art of the grift?

This leads to a further consideration of where the capital for “the next bubble” supposedly comes from. Janszen doesn’t account for the essentially bankrupt condition of the U.S.A. The capital that was deployed and squandered in the previous two bubbles is not there anymore to be washed, rinsed, and recycled. It’s gone. It was winkled out of hundreds of pension funds, millions of individual investors, and, in terms of eventual obligations, the federal government. There is a black hole of unresolved debt where that “capital” used to be.

Janszen’s idea seems to be that the new investment comes from simple credit reflation. I don’t see how this is possible while the current bubble in housing remains only fractionally “worked out.” It has a long way to unwind yet, and a lot of damage to do. It will bring down banks, insurance companies, hedge funds, municipal governments, and leave a lot of individuals impoverished, literally out in the cold. As long as trillions in losses remain concealed or unresolved, the basic system for deploying capital will remain paralyzed.

[Buttercup McToots]

34. BofA abruptly notified cardholders in good standing their rates would skyrocket if...

A Credit Card You Want to Toss - BofA abruptly notified cardholders in good standing their rates would skyrocket if they didn't opt out fast. Is BofA greedy or needy?

Top News February 7, 2008,

Credit-card issuers have drawn fire for jacking up interest rates on cardholders who aren't behind on payments, but whose credit score has fallen for another reason. Now, some consumers complain, Bank of America (BAC) is hiking rates based on no apparent deterioration in their credit scores at all.

The major credit-card lender in mid-January sent letters notifying some responsible cardholders that it would more than double their rates to as high as 28%, without giving an explanation for the increase, according to copies of five letters obtained by BusinessWeek. Fine print at the end of the letter—headed "Important Amendment to Your Credit Card Agreement"—advised calling an 800-number for the reason, but consumers who called say they were unable to get a clear answer. "No one could give me an explanation," says Eric Fresch, a Huron (Ohio) engineer who is on time with his Bank of America card payments and knows of no decline in the status of his overall credit.

Bank of America spokeswoman Betty Riess confirms some bank cardholders could be receiving rate increases for reasons other than declines in credit scores, such as running higher balances with their Bank of America cards or with other creditors. She says the increases are part of a "periodic review" that assesses customers' credit risk. She declined to say if the Charlotte (N.C.) bank had changed its credit standards thereby bumping some consumers' rates or how many cardholders were being affected by the review. Bank of America has 40 million U.S. credit-card accounts..... more

http://www.businessweek.com/bwdaily/...eek+exclusives

[Demeter]

37. Peter Michaelson: Death to the Hoax of Self-Correcting Free Markets

http://www.buzzflash.com/articles/contributors/1529


Conservative writer David Brooks' recent column, "Two Cheers for Wall St.," depicts hedge funds as necessary financial innovations that smooth out volatility and manage risk. Brooks excludes from his reckoning, however, the negative impact upon us all when neurotic money lovers have so much influence over the economy...In his fault-free economic model, Mr. Brooks isn't troubled by Wall Street marauders, financial gamblers, subprime thrill-seekers, hack business writers, or spineless regulators. Don't worry about the need to rein in these subprime people because, as Mr. Brooks says, "the market corrects itself."

I've counseled hedge-fund managers in my psychotherapy practice. I wish them well and I give them some credit for doing therapy. However, not one of them was interested in growing in moral maturity. Instead, they sought only to escape the excruciating pain brought on by their fear of loss, anticipation of failure, vanity, anger, and compulsive striving for financial gain.

How can people so lacking in self-regulation be expected to contribute to an orderly, sensible, or decent economy?

The excesses of capitalism have been underwritten by ideology, particularly the idea that the market is inherently wise and reliably self-regulating. This conservative idea is an intellectual hoax. We need to drive a silver stake into its heart to terminate it for good.

To function well, every human system (whether the marketplace, governments, or institutions) needs regulation (rules of play) enforced by legitimate authority. Sure, referees and umpires can often be annoying. But as any sensible sports fan knows, a football or baseball game requires regulation.

We know regulation is needed because at a basic level, we each require it. We need the wise intervention and guidance of our inner authority (whether that's the mind, the will, or the self) for successful self-regulation. We are each a unit of a greater whole, and regulation is needed at both the personal and the social levels.

If our personal oversight is weak or non-existent, we're unable to guide ourselves through the maze of behavioral and emotional pitfalls. Personal intervention (and often the intervention or assistance of others as well) is needed to overcome addictions, compulsions, and other self-defeating behaviors.

The intellectual hoax of marketplace omniscience is exposed in an important and overlooked book by Kenneth Lux, titled, Adam Smith's Mistake: How a Moral Philosopher Invented Economics and Ended Morality (Shambhala, 1990). The title refers to Smith's famous 1776 book, An Inquiry into the Nature and Causes of the Wealth of Nations, which to this day remains the bible of capitalist ideology. Capitalists claim that Smith's book identifies self-interest as the foundation of rational economics. Conveniently, that claim bestows upon them an idealized self-image and sanctions their exploitation of the poor.

As Lux notes, the importance given to self-interest overlooks the fact that the self-interested individual would logically feel justified in being dishonest, cheating others, and writing loopholes in the law that the biggest rats can squirm through. Embracing short-term profits by overlooking pollution, resource depletion, and global warming also appeals to a narrow sense of self-interest.

Lux convincingly demonstrates, as well, that Smith forgot to put a vital word in a much-quoted statement from the Wealth of Nations. That favorite statement of capitalists reads: "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner but to their regard to their own self interest." Lux writes that four sentences in the book immediately preceding that statement make it clear that Smith had in mind to include the word "only," as in "It is not only from the benevolence . . ." This inclusion dramatically changes the meaning of Smith's words, and benevolence now becomes a factor in his idea of sound economics.

A sensible understanding of the word "self-interest" includes the idea of the benefits that accrue to each individual, poor or rich, in a just society. A wealthy or powerful individual benefits in terms of personal happiness and moral maturity when he or she is aligned with the common good. But egotists understand the meaning of self-interest only in their limited dimension, and their interpretation of it become irrational because their desire for self-aggrandizement trumps logic. More than anything, today's capitalism has become the financial support system for those who identify with their ego.

Those conservatives who are the hoax's main supporters insist that human nature is unlikely to be improved upon or, at best, only very slowly. According to them, self-interest is the realistic and best standard under which humans can be expected to cooperate economically. They believe this mainly because they themselves are most resistant to becoming better people. For instance, they greatly resist giving up the egotism that would enable them to become more generous, compassionate, and wise. They're not seekers of their better selves.

Conservatives also frame the debate in terms of freedom. "Every regulation reduces people's freedom," says economist David R. Henderson of Stanford's Hoover Institution. "The more regulation we get, the worse we do." Dr. Henderson speaks of regulation but not of self-regulation. Self-regulation doesn't infringe on freedom at all. It bestows more freedom. It frees us from negative emotions and self-defeating behaviors. Similarly, wise regulation of the economic world frees us from the tyranny of the corrupt. One such regulation would be stiff jail sentences for corrupt politicians and executives.

Traditional economists don't want to give up the idea that the market is self-regulating because they're too attached emotionally to the egotistical satisfaction of being masters of an allegedly all-embracing knowledge. Meanwhile, libertarians oppose government regulation because they're overly sensitive emotionally to feeling controlled. Their egos manage to be offended by the requirements of social order.

We're all contaminated by the operations and propaganda of such a system. Though we live in the land of plenty (or did until recently), we experience our lives as if we live in a Deprivation Society. Marketing and advertising's genius plays upon our fears of deprivation. At their worst, marketing and advertising sustain oral and anal infantilism, thereby cultivating our negative emotions of desire, greed, and envy, which undermines self-regulation. The effect is to inflame the appetites of individualism, undermine national unity, diminish the shame of our participation in exploitation and war, and destroy our will. The common good won't be enshrined without a common will.

We've fallen under the spell of the dark side of capitalism (where the biggest profits are extracted) and we've become the clones of its values, which include acquisitiveness, selfishness, self-aggrandizement, power, and superiority. The people have to see how brainwashed we've become. In a recession or a depression, the establishment could certainly lose control over the consciousness of the people, which is why the free-falling Old Economy is desperately pumping the printing presses.
--------------
Peter Michaelson is author of Democracy's Little Self-Help Book and The Phantom of the Psyche: Freeing Ourselves from Inner Passivity. He is a practicing psychotherapist and offers telephone sessions and specializes in marriage and partnership conflict resolution. PDF files of his books are available at www.QuestForSelf.com.

[fasttense]

41. Ah, finally, the real culprit is exposed.

Thanks for posting. A long read but well worth the time.

[Roland99]

47. Bravo! Nice post.

I still need to finish reading one from yesterday's SMW. I surely will have time over the weekend. ;-)

[Hugin]

55. Great post!

Nice find, Demeter. :)

[UpInArms]

38. dollar watch

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

Last trade 76.768 Change -0.083 (-0.11%)

Weak Dollar Hits Main Street

http://www.dailyfx.com/story/bio1/Weak_Dollar_Hits_Main_Street_1202423542754.html

The US dollar continued to strengthen today but to the rest of the world, it is losing its luster. With the dollar falling 13 percent against the Euro since the beginning of last year, Main Street is finally waking up to what Wall Street has known all along, which is that currencies matter. All over the news has been a story about how New York City vendors are beginning to accept other currencies in addition to US dollars. This is primarily due to the fact that the dollar has fallen significantly in value over the past year as NYC tourism hit a record high. However the impact of the dollar does not end there. As Fashion Week begins, buyers for some of the leading retailers in the US are shunning London catwalks and either staying domestic or heading to Paris instead. For the first time in 20 years, the fashion director of Barneys will be skipping fashion shows in London. The strength of the British pound and the weakness of the US dollar have made it very difficult for many designers to absorb the currency conversion. According to an executive VP of Neiman Marcus, “it’s generally the big brands who can do it.” Don’t expect this trend to disappear because it will be a very long time before we see a dollar be worth more than a Euro or British pound, if ever. With the Federal Reserve expected to lower interest rates by at least another 50bp over the next few months, the widening spread between US, Eurozone or UK rates should eventually trigger further dollar weakness. Initial jobless claims, pending home sales and the ICSC chain store sales all fell short of expectations. Following last week’s sharp rise, the latest jobless claims figure suggests that we could see another month of net job losses in the month of February. As for chain stores sales, the drop is fairly important ahead of next week’s US retail sales report. If consumer spending contracts for another month, the Federal Reserve may have no choice but to bring interest rates down to as low as 1 percent, dropping the US dollar one notch to become the second lowest yielding currency in the developed world.

...more...

Dollar Rally - Just a Counter Trend Move?

http://www.dailyfx.com/story/bio2/Dollar_Rally___Just_a_1202470062506.html

Despite a torrent of bad economic news the dollar has been on a tear this week (see our story Why Is The Dollar So Strong), as the currency market recognized the fact that the slowdown in US economic activity is likely to drag down growth in the rest of the G-10 universe forcing other central banks to adopt a much more accommodative monetary policy. Already we’ve seen a shift in tone from the BoE which lowered rates by 25bp and issued a statement recognizing “sharp slowing in activity”. Meanwhile, ECB chief Jean Claude Trichet tried to valiantly adhere to his hawkish bias during yesterday’s post announcement press conference, but the market refused to believe him in light of latest economic data from the region that has shown very steep declines in service sector activity.

Furthermore, a massive rally in long term US yields yesterday caught yen traders completely by surprise driving USDJPY up nearly two big figures. Overnight, yen remained well above the 107 figure as Eco Watchers survey hit a new 10 month low and Japanese Machinery Orders fell –3.2% versus –0.9% expected.

Nevertheless, dollar’s recent strength may simply be a natural counter trend rally within a long term downtrend move. The key question this year for the currency market will be the relative weakness of US economy versus its G-3 counterparts. If the deceleration in US growth creates similar woes across the Atlantic, causing a spike in EZ unemployment figures the political fallout from high euro and relatively high interest rates is likely to put enormous pressure on the ECB to begin lowering rates thus eliminating much of euro’s interest rate advantage. This week’s 300 point decline in the EURUSD is in effect a bet by dollar bulls that this scenario will soon develop.

However, if the EZ economy is able to weather the slowdown in global demand without seeing any material deterioration in its labor markets, the ECB may keep rates at 4% for much longer than the market thinks. The Fed in the meantime will continue to lower the Fed funds rate perhaps to 2% by the middle of this year. Yesterday’s weekly jobless claims which printed above the key 350k barrier suggest that the labor situation in the US is rapidly becoming worse. The market therefore may be underestimating the length and the duration of interest rate advantage that the euro may have and once traders appreciate that possibility the EURUSD may resume its upward trek. In the meantime the pair appears to be stabilizing in the 1.4400-1.4500 region and will need to hold these price levels for the next several days to confirm that a near term bottom has been made.

...more...

[UpInArms]

39. Discover Will Sell a Card Unit in Britain at a Big Loss (pd $1.7 bln - selling for $70 mln)

http://www.nytimes.com/2008/02/08/business/08card.html?ex=1360126800&en=17cd65c7b6f4b92b&ei=5088&partner=rssnyt&emc=rss

Discover Financial Services said Thursday that it agreed to sell its Goldfish credit card unit in Britain to the British bank Barclays for $70 million, abandoning a money-losing business it acquired two years ago for $1.68 billion.

Barclays will acquire 1.7 million Goldfish and affinity card accounts with about $4 billion of receivables and take Goldfish’s brand, staff and facilities. The card business includes MasterCard and Visa.

Discover said it would take a first-quarter charge of $190 million to $210 million and said the sale should improve earnings for the rest of the year.

The company lost $84.1 million in its fourth quarter, which ended Nov. 30, reflecting a $391 million write-down for substantially all of Goldfish’s good will and other intangible assets. Discover expects the Goldfish sale to close by the end of May and free up capital for its other businesses.

...more...

[UpInArms]

40. D.R. Horton (home builder) Reports a Steep Loss

http://www.nytimes.com/2008/02/08/business/08horton.html?ex=1360126800&en=d5962363e155a586&ei=5088&partner=rssnyt&emc=rss

D. R. Horton, the largest American home builder, is the latest company to post results reflecting the depressed housing market.

The company posted a first-quarter loss on Thursday, as sales fell by more than a third and new orders dropped 61 percent.

Its shares rose 23 cents, to $15.04. The housing market has been in a downturn for more than two years, with demand falling and builders cutting prices amid dwindling orders.

On Thursday, the National Association of Realtors said pending sales of existing homes fell by a greater-than-expected 1.5 percent in December and 24.2 percent from a year earlier.

Markets like California, Las Vegas and Arizona, where builders once could not get enough land to fill demand, are now moribund and weigh on the balance sheets of the companies.

...more...

[UpInArms]

42. Weak January Dashed Retailers' Gift-Card Hopes

http://www.nytimes.com/2008/02/08/business/08shop.html?ex=1360126800&en=98eabb31565f57c2&ei=5088&partner=rssnyt&emc=rss

Here is a sign of how shaky the economy is becoming: Wal-Mart says its shoppers are redeeming their holiday gift cards for basic items — pasta sauce, diapers, laundry detergent — rather than iPods and DVDs.

Merchants had hoped that shoppers with gift cards would provide a lift after a slack holiday season, partly because they tend to spend more than the value of the card. But that did not seem to happen last month, and retailers are feeling the pain.

On Thursday, the nation’s retailers turned in their worst January in almost four decades as high gasoline and food prices, the slumping housing market, tighter credit and tougher job prospects pushed some consumers to the edge.

Sales at 43 retailers surveyed by the UBS-International Council of Shopping Centers rose just 0.5 percent in January, well below a forecast of 1.5 percent.



...more...

[UpInArms]

44. Analysis: Politics boosted stimulus plan

http://news.yahoo.com/s/ap/20080208/ap_on_bi_ge/economy_stimulus_analysis

WASHINGTON - The twin pressures of a looming recession and an election year combined to speed a $168 billion economic rescue plan through Congress, sweeping aside lawmakers' political differences in favor of rushing $600-$1,200 checks to their constituents.

The overwhelming House and Senate votes Thursday to approve the measure and send it to President Bush reflected lawmakers' eagerness to show they could act quickly to address economic concerns, which have replaced the Iraq war as the public's top worry.

The package was the product of a rare spate of bipartisan cooperation on Capitol Hill, where Democrats and Republicans teamed with the White House on a bill that fell far short of both parties' priorities but could win quick enactment.

House Speaker Nancy Pelosi signaled early last month her determination to move ahead with a fiscal stimulus bill. As reports about the economy worsened, the White House and congressional Republicans embraced the effort, even as some other Republicans on Capitol Hill worried that the economic bailout would do more to bolster Democrats' sagging approval ratings than it would to help the economy.

The result was a plan that will deliver tax rebate checks starting in May to anyone earning more than $3,000, with smaller rebates for people with incomes of $75,000 — or $150,000 for a couple — and a $300-per-child bonus. Most taxpayers would get $600 rebates, or $1,200 for couples. Those who earn too little to pay taxes, including senior citizens living off of Social Security or veterans on disability checks, would get rebates of $300 for individuals and $600 for couples.

...more...

[Demeter]

45. Isn't "Boosting" a Slang Term for Theft?

Yeah, that's what I thought.

[Pale Blue Dot]

46. The economy: Good news for Democrats, right?

http://www.msnbc.msn.com/id/23055691/

The economy calls it
The best-known among them, devised by Yale professor Ray Fair, has reliably picked the winner of the popular vote. This year, Fair's model forecasts that even if the economy shows modest growth of 1.8% for the first three quarters of 2008, the Democratic nominee will win 52% of the popular vote vs. 48% for the Republican nominee. And if the economy does stumble into recession, things will get worse: Assume the economy contracts by 1%, and the Republican share of the vote could fall to around 46%.

So does that mean this year's race for the White House is over before it has even begun? Not so fast. In a year in which few past patterns or political predictions have proven correct, an increasing number of analysts and strategists say the view that a bad economy could doom the Republican candidate also may no longer be so clear-cut.

"Historically, a poor economy helps the challenging party, which in this case is the Democrats," says Jon Delano, a political scientist at Carnegie Mellon University. "But given that the 2008 cycle is turning all other political assumptions upside down, that could be the case here as well."




This accompanies a story titled "Is McCain Good For Business?" :puke:

[Demeter]

48. If 46% of Voters Go for GOP, Then It Isn't Bad Enough, Economically

and things won't turn around. Unless the GOP is rejected by 65% or more, we will still be stymied.

[Hugin]

52. Sadly, I agree...

But, unfortunately that 46% of people actually have to learn by personal experience rather than
listening to the advice of experts and/or observing the experience of others.

They live in a constant state of cognitive dissonance and also the first to lash out in a reactionary
manner when things go wrong... Blaming everyone, but, themselves and their constant "looking out for the
rich" and against their-own-best-interest programming.

[UpInArms]

50. Bear Stearns cut about 1,400 jobs in 2007: reports

40 minutes ago Bear Stearns cut about 10% of staff in 2007: reports - MarketWatch

40 minutes ago Bear Stearns cut about 1,400 jobs in 2007: reports - MarketWatch

http://www.marketwatch.com/news/story/bear-stearns-cut-about-10/story.aspx?guid=%7BBCB4C515%2D2800%2D48D7%2D8430%2DA34976AF9770%7D&dist=TQP_Mod_mktwN

NEW YORK (MarketWatch) -- Investment bank Bear Stearns Cos. (BSC: 83.03, +0.78, +1.0%) said Friday that it cut 10% of its workforce in 2007 in response to last year's subprime mortgage crisis, according to news reports. About 800 of the 1,400 job cuts occurred in Bear's mortgage lending operations. The firm lost more than $680 million in the last six months of 2007 due to bad bets on subprime lending. Bear said those losses could have been avoided if the firm had paid more attention to market indicators. "We were clearly far too slow to recognize the impact of the subprime market. We believed the environment was contained," CFO Samuel Molinaro was quoted as saying in a Wall Street Journal report.

(fixed title line)

[DemReadingDU]

51. Healthcare fraud trial in Columbus, Ohio - Update

link to previous article
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3169480&mesg_id=3169559


2/6/08 After 3 days, jury picked for National Century trial
more...
http://www.dispatch.com/live/content/local_news/stories/2008/02/06/natcentweb.html?sid=101


2/8/08 Official feared trouble years before collapse
Signs that the National Century Financial Enterprises company was financially unstable were evident six years before it collapsed, the government's first witness in a fraud trial for its top executives testified.

The testimony came after a morning in which defense and prosecuting attorneys painted vastly different pictures in opening statements as to the reasons behind the company's demise.

"This is a case about promises made, promises broken and a massive coverup," assistant U.S. attorney Doug Squires said.

The company's financial problems stemmed in large part from loaning hundreds of millions more to health-care providers than what the companies qualified for, Squires said.

Dickerson said National Century had problems with communication among its divisions, but that there were always rating agencies, auditors, banks and investors watching everything they did.
edit: Dickerson is a defense attorney

"If it's a coverup, there's a lot of people covering up a lot of things," he said.

Other defense attorneys also said the downfall wasn't the result of criminal activity.

"There is a vast difference between bad business decisions and criminal activity," James Ervin Jr. said. "This case is about business decisions, not illegal conduct."

more...
http://www.columbusdispatch.com/live/content/local_news/stories/2008/02/08/NatCen08.ART_ART_02-08-08_A1_6Q99SVM.html?sid=101

[Demeter]

56. Will The Dow Go Below 12000 Today? What Do You Think?

And if it does, will it stay there?

[AnneD]

60. Turn Back The Hands Of Time

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

the other one.....1/30
DemReadingDU.....2/29
Talking Dog.....3/28 at 2 pmish
Warpy...3/20
ProgressiveRealist.....4/17
Mattsh.....4/22
GhostDog.....4/28
MilesColtrain.....5/2
Happyslug.....5/9
UIA.....7/15
Roland99.....7/28
Abelenkpe.....8/2
Kineneb.....8/8
Prag.....9/5
MoJo Rabbit.....9/5
MuleBoy(aka hiz honna da mayor).....9/11
Birthmark....10/10
AnneD....10/24
MsLeopard.....10/31
Ship wrack.....11/5

Remember-you can change the dates as we learn more. The winner get the praise and admiration of those on the Stockwatch Thread.

Jump on in :party:....Bring your floaties-no floater allow.

[Demeter]

62. I'd Guess The Day Obama is Inaugurated as President, Then

[Pale Blue Dot]

133. I'll say 4/10 - after the 1st quarter results are announced.

In my heart, I believe it will be sooner than that.

[Theres-a]

144. March 15

Beware the Ides of March.

[Warpy]

71. I predicted 11,500 by the spring solstice

and I once predicted 7000 by the time we get Stupid's arse out of the chair he stole in 2000.

I just hope I wasn't being overly optimistic on the latter.

The market keeps trying to correct and the Reaganomics experts keep pouring all kinds of funny money into it to prevent it from correcting. They're just like the people back in the 30s who kept hocking Grandma's jewelry to pay up the margin on stock so they wouldn't lose it to the creditors.

90% of us know it doesn't matter how much money the wealthy hold, they'll never let loose a dime of it for any of the rest of us. The other 10% are still true believers in the tide that raises all boats that doesn't drown those of us who are boatless.

Now all we have to hope for is that our own party wakes out of its conservative torpor and has the will to overthrow the stupid economic ideology that is killing this country and a lot of its people.

[Hugin]

58. ~10:05 ET: Hovering (pun intended) at that Psychologically Important 12236.44 level...

Index Last Change % change
• DJIA 12236.44 -10.56 -0.09%
• NASDAQ 2308.93 +15.90 +0.69%
• S&P 500 1336.51 -0.40 -0.03%

[Robbien]

61. Ha! : G7 wants to hear why Fed slashed rates

TOKYO, Feb 8 (Reuters) - Finance ministers attending the G7 in Tokyo on Saturday want to hear from the United States about the reasons for the Federal Reserve's dramatic slashing of interest rates, an Italian G7 source said.

The G7 will also discuss the risk that short-term measures to stabilise markets, whether through interest rate cuts or liquidity injections, may have negative long-term consequences, the source said.

. . .

"There's a great thirst for information (among the other ministers) about the picture for U.S. economy and the motivations behind the Fed's monetary policy moves which can only be described as dramatic," he said.

"It's important to hear where the United States economy is and what they intend to do."

. . .

The official said there was concern that measures which respond to market tensions by increasing liquidity might not be in the interests of long-term stability.

He said very liquid markets may have been the cause of the crisis in the U.S. subprime mortgage sector that sparked the subsequent market turmoil.

"This is the main dilemma, how to handle a possible contrast between short-term moves to stabilise markets and whether or not this creates the basis of greater stability" in the long term.

http://www.reuters.com/article/bondsNews/idUSTKV00300720080208?sp=true

About time.

[AnneD]

63. French police arrest another Societe Generale trader

PARIS — French police were holding a second person for questioning about the loss of billions at bank Societe Generale, a judicial official said today.

The person, who worked at a brokerage partially owned by Societe Generale, was taken into custody on Thursday and was still being held, said the official, who asked not to be identified because of the sensitivity of the case.

<snip>
The daily newspaper Le Monde was the first to report that a second person was in custody for questioning about his relationship with Jerome Kerviel, a futures trader accused by Societe Generale of massive unauthorized bets on European markets.

Societe Generale announced Jan. 24 that it lost $7.09 billion cleaning up unauthorized transactions by Kerviel. It was harsh news for the bank — one of France's biggest — and for a financial market already roiled by the subprime mortgage crisis.

Societe Generale has consistently said it believes that Kerviel had no accomplices. The bank did not immediately return calls seeking comment on the report in the respected national newspaper.
<snip>
http://www.chron.com/disp/story.mpl/business/5524623.html

Guess that shoots the lone trader on a grassy knowl theory all to heck.:eyes:

[DemReadingDU]

65. probably a whole band of rogues

:crazy:

[TrogL]

67. Loonie Watch - another WTF day

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

2007-12-28 Friday, December 28 1.02208 USD
2007-12-31 Monday, December 31 1.01204 USD
2008-01-01 Tuesday, January 1 1.01204 USD
2008-01-02 Wednesday, January 2 1.00786 USD
2008-01-03 Thursday, January 3 1.00959 USD
2008-01-04 Friday, January 4 1.0012 USD
2008-01-07 Monday, January 7 0.995025 USD
2008-01-08 Tuesday, January 8 1.0015 USD
2008-01-09 Wednesday, January 9 0.991768 USD
2008-01-10 Thursday, January 10 0.986291 USD
2008-01-11 Friday, January 11 0.980584 USD
2008-01-14 Monday, January 14 0.979432 USD
2008-01-15 Tuesday, January 15 0.983574 USD
2008-01-16 Wednesday, January 16 0.976753 USD
2008-01-17 Thursday, January 17 0.971817 USD
2008-01-18 Friday, January 18 0.97144 USD
2008-01-21 Monday, January 21 0.97144 USD
2008-01-22 Tuesday, January 22 0.9758 USD
2008-01-23 Wednesday, January 23 0.972573 USD
2008-01-24 Thursday, January 24 0.99295 USD
2008-01-25 Friday, January 25 0.995619 USD
2008-01-28 Monday, January 28 0.995818 USD
2008-01-29 Tuesday, January 29 1.0022 USD
2008-01-30 Wednesday, January 30 1.00644 USD
2008-01-31 Thursday, January 31 0.998203 USD
2008-02-01 Friday, February 1 1.00614 USD
2008-02-04 Monday, February 4 1.00735 USD
2008-02-05 Tuesday, February 5 0.995718 USD
2008-02-06 Wednesday, February 6 0.997705 USD
2008-02-07 Thursday, February 7 0.988631 USD

Current values

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

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     1.0003 1.0029 1.0003 1.0029 +0.0145  +1.44% 
CD.H08 Mar 2008 0.9975 1.0044 0.9975 1.0039 +0.0160 +1.58% 
CD.M08 Jun 2008 1.0010 1.0010        1.0010 +0.0152 +1.51%  
CD.U08 Sep 2008 0.9785 0.9785 0.9780 0.9840 -0.0071 -0.70% 
CD.Z08 Dec 2008 0.9750 0.9750 0.9750 0.9822 -0.0071 -0.70% 
CD.H09 Mar 2009 0.9810 0.9825        0.9804 -0.0071 -0.70% 
CD.M09 Jun 2009 0.9995 0.9995        0.9786 -0.0071 -0.71% 

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

Market              Open    High     Low    Last   Change     Pct 
AUSTRALIAN $/CANADIAN $ (NYBOT:AS)
AS.H08 Mar 2008   0.88340                 0.89935 +0.00095   +0.11% 
AUSTRALIAN $/US$ (NYBOT:AU)
AU.H08 Mar 2008   0.9042                  0.8886  -0.0049    -0.56%  
CANADIAN $/JAPANESE YEN (NYBOT:HY)
HY.H08 Mar 2008   107.000 107.000 107.000 105.890 +0.225     +0.20%  
EURO/AUSTRALIAN $ (NYBOT:RA)
RA.H08 Mar 2008   1.66420 1.66420 1.66420 1.62590 -0.00935   -0.56%  
EURO/BRITISH POUND (NYBOT:GB)
GB.H08 Mar 2008   0.7445  0.7445  0.7438  0.7452  -0.0009    -0.12%   
EURO/CANADIAN $ (NYBOT:EP)
EP.H08 Mar 2008   1.48700 1.48700 1.48700 1.46230 -0.00675   -0.47%  
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.H08 Mar 2008   155.150 155.210 154.960 155.100 +0.225     +0.14%   
EURO/US$ (SMALL) (NYBOT:EO)
EO.H08 Mar 2008   1.44750 1.44770 1.44750 1.44470 -0.01625   -1.11%  

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

ThThe March Canadian Dollar gapped down and is trading below the 20-day moving average crossing at 98.85 overnight. Stochastics and the RSI have turned bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 98.85 would confirm that a short-term top has been posted. If March renews the rally off January's low, the reaction high crossing at 101.67 is the next upside target. First resistance is the 10-day moving average crossing at 99.77. Second resistance is last Wednesday's high crossing at 101.20. First support is the overnight low crossing at 98.65. Second support is the January 24th gap crossing at 97.70.


Analysis

Its frustrating trying to keep track of it all. The blather above deals with what happened yesterday. Obviously something happened last night because this morning's numbers are completely different. The graphs I have access to are all from different time periods and show different stories. I'm sort of reminded of the Mission Control announcer for the Challenger shuttle disaster blithely chanting numbers as if everything was fine then eventually realizing that Something Bad happened without knowing what it was.

[Robbien]

68. Illinois: 'Terror tactics' used by Countrywide over tax bills

Cook County Treasurer Maria Pappas wants loan officials for Countrywide Financial to "go back to California and smoke whatever it is they smoke out there."

The giant mortgage lender has sent 80,000 letters to its client homeowners in Cook County, threatening to charge each of them a $5 fee if they fail to immediately mail a copy of their property tax bill to Countrywide's office in California.

"You don't need to send anybody a duplicate bill," Pappas said when asked for her advice to homeowners. "They're using terror tactics on little old ladies. They should be ashamed of themselves."

Mortgage lenders last fall declared war on Cook County when Pappas announced that her office would charge them $5 for an electronic copy of the property tax bill that it had previously provided free of charge.

Homeowners then began receiving letters from a variety of mortgage companies that stated if the taxpayer didn't immediately mail his property tax bill to the lending institution, the homeowner not only would be liable for a $5 fee but also penalties due to late payment of the tax bill.

Pappas denounced the tactic, called the mortgage lenders into her office for a meeting, and they agreed to rescind the letters and cease pestering homeowners.

But when Pappas mailed out the latest round of property tax bills in the last week, Countrywide and some smaller loan companies again sent the threatening letters, and Pappas' office was bombarded with phone calls from angry taxpayers.

"These firms know they are not entitled to the original property tax bill before making payments out of the escrow accounts, and they know that federal law requires them to pay the taxes on time," Pappas said.

http://www.southtownstar.com/news/kadner/783654,020808Kadner.article

I asked Pappas why she thought Countrywide has gone back on its promise from last fall not to send such threats to homeowners.

"They just don't care," she said. "They're going to do what they're going to do, even if they know it is wrong and violates the federal law."

Pappas is one of the first treasurers in the country to charge lenders for this government service, and they apparently want to stop the precedent before it becomes common practice. Pappas doesn't see why the government should provide such a service to a private company at taxpayer expense.

And, as she points out, the lenders are making more than $5 a year per account by earning interest on the escrow money. "It just makes me sick when I see these guys doing this kind of thing," Pappas said. "It's just wrong."

[Hugin]

69. Countrywide must be in dire straights, if they're resorting to tactics like this to raise...

~$400,000.00...

But, then, if I owed angry German Pension Funds and other less than charitable sorts the 20% return I'd
fraudulently promised them... I guess I'd be out checking for change under the couch cushions too.

I'm glad Maria Pappas is telling them where to go. :patriot:

[Robbien]

72. The banks are increasing all kinds of fees and blaming it on bankrupt homeowners

I read that they are also increasing ATM fees to three bucks blaming it on subprime.

The enormous fees they got from handling LBOs and CDOs are gone now and they are scrambling to find new ways to fill the gap of high stockholder expectations.

Yes, it is great Pappas stopped servicing the banks for free. Usually around tax time Pappas is not a name I'd support, but this time in this circumstance I am definitely in her corner.

[Hugin]

76. My alternative crackpot tinfoil hat theory is...

That this is yet another attempt to establish some sort of "lender paper trail" on those loans so that they
can foreclose. Since, due to the rulings in Virginia unless they can verify they hold the note, currently they
can not.

:tinfoilhat:

It's good to know these people have nothing better to do all day than sit around and think up ways to separate
people from their assets. :eyes:

Allowing the corporatists to invent fees on a whim is IMHO... The modern equivalent of 'Taxation without
representation."

[kineneb]

88. for those with very low balances...

it may be time to dump banks altogether and move to a debit card account.

Mine charges $4.95/mo flat fee, has the Ma$ter Card label and is usable anywhere that takes said cards. It allows for automatic deposit, even.

[Roland99]

80. But but but...they're oiling the engine of the American economy!!

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=2032131&mesg_id=2033843

[Hugin]

83. That's not quite correct...

(Sometimes, Roland99... You really test my resolve to keep my posts on this thread 'family oriented'. ;) )

Haha... Funny link. Idjuts.

[Roland99]

96. Who needs WDW when we have the SMW?!

d-e-m ... u-n-d ....

[Hugin]

101. Alas, the SMW will never make up for the loss of my beloved...

WWN.

:cry:

I mean, just look at how far ahead of the curve it was!




http://en.wikipedia.org/wiki/Weekly_World_News

[Roland99]

106. 9/11 cost me the chance to write for them... seriously.

Where I worked then, a co-worker had a contact that worked for the WWN and was close to striking an agreement for us to submit some pieces! Man, if we'd been able to cover Bat-Boy... *sigh* SO close....

[Hugin]

107. Interesting story.

I'll give Bat-Boy your regards. :)

[Roland99]

110. Much obliged!

[TalkingDog]

119. They must be fashion designers in their spare time.

See my upthread post.

We got a subscription to the WWN as a Christmas "present" one year from an unknown assailant... uh... I mean friend.

We loved it.



My Favorite Master Artist: Karen Parker GhostWoman Studios

[Roland99]

73. 11:47am - Friday blahs...

Dow 12,230.66 -16.34
Nasdaq 2,310.22 17.19
S&P 500 1,335.70 -1.21
10 YR 3.70% -0.04
Oil $89.92 $1.81
Gold $924.50 $14.50

[AnneD]

75. Think you know investing? Think again

MOST of what you think you know about investing is probably wrong.

For example, maybe you thought that if a stock has a bunch of "buy" recommendations from Wall Street analysts, you should buy it.

Bad move.

"These rating systems are so convoluted that they can't be taken at face value," said Stephen McClellan, who spent 32 years as a Wall Street analyst, mostly at Merrill Lynch and Salomon Bros.

He retired in 2003 and recently wrote Full of Bull, a book that offers individual investors a glimpse inside Wall Street's secret world.

http://www.chron.com/disp/story.mpl/business/steffy/5524026.html

Steffy is a pretty decent business reporter that actually investigates. This is one of his 'finds'.

[Dr.Phool]

79. Dow headed for the tank again. Down 92 at 12:24 pm.

[Demeter]

81. Sovereign Wealth Funds Cool on Further Bailouts of Western Banks

http://www.nakedcapitalism.com/2008/02/sovereign-wealth-funds-cool-on-further.html

There is an old saying, "Fool me once, shame on thee, fool me twice, shame on me."

We've said it was a mistake to assume that sovereign wealth funds would continue to write checks uncomplainingly to salvage our troubled financial institutions. They've already been through one round of fundraising and things are getting worse, not better. Coming to the well again is a sign of weakness. First, it confirms that conditions have deteriorated, and thus any earlier investment is under water. Second, it says that the heads of the firms didn't raise enough money the first time around. That means they either estimated losses poorly, which says they don't have a good handle on their business, or they knew how bad things were but decided to put on an optimistic face and raise a smaller initial amount on more favorable terms, on the assumption that would lead to less total dilution. The latter possibility says the CEOs were, ahem, less than candid.

The funds are not going to be made into fools. An article by Gillian Tett in today's Financial Times says that the SWF are becoming resistant to appeals for cash from financial firms. Resource and industrial investments are higher economic priorities for them. And though the article doesn't mention it, I am sure they are also wondering why domestic investors like the big private equity firms aren't doing their part.

That doesn't mean they won't stump up the cash in the end. But it will be on much tougher terms, which means more dilution of existing investors. If the government investors wind up with very large economic interests, say 20% or more, it is fantasy to think that they don't have sway over the business.

It has been remarkable that American policy makers have blithely assumed that the rest of the world will continue to make up for our lack of domestic savings out of a misguided faith that no one would dare crimp US consumption.

[Demeter]

84. Willem Buiter: "Why the US may well need a recession, 2"

http://www.nakedcapitalism.com/2008/02/willem-buiter-why-us-may-well-need.html

Willem Buiter continues his quixotic campaign to extirpate lousy economic logic in the US. In a colorfully written post, he ridicules the refusal of any US economist (as far as he can tell) to consider that an American recession is necessary. He points to the obvious fact (commented on repeatedly in this blog) that the current level of US consumption in relation to GDP is unsustainable. A drop in consumption and a rise in savings to the degree needed to restore a semblance of macroeconomic balance is certain to trigger a slowdown, more likely a period of negative growth. Yet the current efforts to prop up aggregate demand and keep the distortions going will only make the inevitable correction worse.

Buiter interestingly points to what he considers to be the source of US myopia: an American tendency to see itself as a largely closed system, with at most a simple input-output function (we pay for imports by selling Treasuries) and not recognizing that the US is a participant in a system that is ultimately bigger than it is and might start putting limits on this behavior.

I saw a demonstration of this insularity at a conference on sovereign wealth funds last evening. The participants were all remarkably sanguine about the growing role these entities are coming to play, noting rather blandly that they were being very helpful in shoring up our creaking financial system. And the idea which also held sway that evening, that the investors had no influence because they held minority stakes, is absurd. As veteran deal maker Felix Rohatyn pointed out, “You don’t need to appoint two directors to a board to have influence when you own 10 percent of the company.”

With the continuing leaks in our financial system, we will soon pass 10% in concentrated holdings in foreign hands at quite a few financial players. Standard & Poor's anticipates that it coming reviews and downgrades of subprime debt will increase writedowns of financial firms from their current $130 billion to $265 billion. And as conditions worsen, future investments will be on less favorable terms, so struggling firms will have to give up more equity to get the needed infusion.

But what perhaps was the most remarkable subtext of the conference, in confirmation of Buiter's views, was that this situation is sustainable, that the US can indefinitely run a large current account deficit (the consequence of an inadequate savings rate) and continue to import money from abroad. That program guarantees a deteriorating dollar, may precipitate a dollar crisis, and risks the dollar's standing as reserve currency. If the US has to start funding its current account deficit in foreign currencies, as it did briefly during the Carter Administration, that will put us on a very short leash.

[Demeter]

85. The Huge Hole in Unemployment Insurance / Robert Reich

http://robertreich.blogspot.com/2008/02/huge-hole-in-unemployment-insurance.html

We learned last Friday that payrolls shrunk by 17,000 in January, a job loss not seen since the tail end of the last recession, in 2003. And last week, the number of laid off workers filing applications for unemployment benefits soared by 69,000 to 375,000. It was the most new claims in one week since October, 2005, when Hurricane Katrina and other storms decimated the Gulf Coast.

Appropriately enough, the Senate is considering whether to lengthen the period of time people can collect unemployment benefits if they still can’t find a job after six months, which is how long unemployment insurance is now available. That’s sensible, but it doesn't fill a huge hole in the unemployment insurance system.

A new study by the Economic Policy Institute estimates almost 2 million job losers will run out of unemployment benefits this year unless benefits are extended. It’s not unusual to extend benefits during a recession, because recessions often last longer than six months and businesses don’t start hiring again until the economy picks up. And there are few better ways to stimulate the economy. Unemployment benefits put cash directly in the hands of people who need it most, and are most likely to spend it.

But running out of benefits isn’t the biggest problem facing job losers. It’s not getting benefits to begin with. The troubling fact is most people who lose their jobs simply don’t qualify.

That’s because the unemployment insurance system was designed more than a half century ago when most people who lost their jobs had been employed full-time for years, and when most households had one wage earner. Even though those realities have changed, the rules haven’t. In most states, you’re eligible for unemployment insurance only if you’ve lost a full-time job that you’ve had for quite a while.

This leaves out just about everyone who’s lost one or more part-time jobs. And also excludes any full-time worker who had been at the job less than a year before they got canned. It also excludes people who had to leave their job to accompany a working spouse to another city or state. Altogether, the current rules leave out more than half of the American workforce.

So it’s not enough merely to extend unemployment benefits. If Congress really wants to help the millions of Americans who will lose their jobs in the coming recession, and also stimulate the economy, it should make sure job-losers get benefits in the first place

[NewYorkerfromMass]

89. With the 12,200 floor broken

it looks like 12,100 is coming up next.
If 12,000 is broken next week, who knows how low this shit wil go.
Heckuva job!

[Hugin]

91. ~13:30 ET: Approaching Psychologically Important 12,150 Level...

Index Last Change % change
• DJIA 12131.33 -115.67 -0.94%
• NASDAQ 2292.69 -0.34 -0.01%
• S&P 500 1326.04 -10.87 -0.81%

Oops, passed it.... Now, at the 12,130 PIL.

[Hugin]

92. ~13:45 ET: Blew through the 12,130.00 PIL...

Index Last Change % change
• DJIA 12109.14 -137.86 -1.13%
• NASDAQ 2280.91 -12.12 -0.53%
• S&P 500 1321.33 -15.58 -1.17%

Now seeking 12,100 PIL as predicted...

[Roland99]

93. Personally, I'm concerned with the PIL of 12,089.72

give or take 8.34 points

[Hugin]

94. Yes, I can see where that would be a relevant level...

Psychologically speaking.

[hatrack]

95. But what of the absolutely CRITICAL resistance level of 12,081.88384?

THAT'S what concerns me!

:evilgrin:

[Hugin]

97. It would do my Psychology good to have the round off error at that level...

It would set me up with a nice Island in the Caymans... ;)

[UpInArms]

98. WTF?!? Fed's Lockhart warns against 'investment protectionism'

04. Lockhart: Foreign dollar holdings had role in market turmoil
12:39 PM ET, Feb 08, 2008 - 1 hour ago

05. Fed's Lockhart warns against 'investment protectionism'
12:38 PM ET, Feb 08, 2008 - 1 hour ago

What? We aren't selling off our assets quickly enough?

[Roland99]

100. This is much different than, say, Japanese buying up US real estate in the 80s.

[Hugin]

102. Please... Keep in mind...

If they come bearing only a desire to work and live in peace... They are Illegal Aliens.

However, if they come bearing only lots of cold hard $$$... They are Foreign Investors.

I learned that the other day listening to a GOPper Presidential Debate.

[Robbien]

109. Indiana is bragging about how much it sells of itself to non-state/foreign investors

Bragging about their state being a sellor's market:
http://www.indystar.com/apps/pbcs.dll/article?AID=/20080203/BUSINESS/802030333

Indiana companies found themselves the takeover target in 65 percent of the business mergers and acquisitions that involved Hoosier businesses last year.

It's the fifth year in a row that most corporate deal-making in Indiana featured home-state companies as the target rather than the acquirer.
. . .
Being on the sale side of the ledger more often than not in corporate acquisitions isn't necessarily bad, economic experts say.

"It tells me Hoosiers are creating, managing, running things of value to others," said Cameron Carter, a vice president at the Indiana Chamber of Commerce.

And once an Indiana company or asset is sold, it frees up money that's often reinvested in the state in other businesses, he said. "It creates wealth that can be deployed in very innovative and interesting ways. That injects new capital into our economy."

. . .

What complete and utter nonsense. And bragging about it, yuk.

[UpInArms]

99. Fed rate cuts seen behind US equity outflows-EPFR

http://www.reuters.com/article/bondsNews/idUSN0832223920080208?sp=true

NEW YORK, Feb 8 (Reuters) - Investors pulled nearly $10 billion out of U.S. equity funds in the week ended Feb. 6 and moved a significant amount of cash into short-term money market funds, data from fund tracker EPFR Global showed on Friday.

The data period coincides with a half a percentage point cut in the U.S. benchmark federal funds rate by the U.S. Federal Reserve in a bid to stave off what looks increasingly like the development of a U.S. recession.

The Fed's move on Jan. 30 followed the surprise 75-basis-point reduction in rates in a rare intermeeting cut on Jan. 22 that offered only a brief respite from selling in stocks.

"Having had a few days to digest the U.S. Federal Reserve's aggressive rate cutting, the upshot is it has raised more questions for investors than it has answered," said Cameron Brandt, global markets analyst at Boston-based fund tracker EPFR.

"They are interpreting it as a clue that things are actually worse than they might appear on the surface," he said.

...more...

[Ghost Dog]

104. OPEC may switch to euro, will "take time" -sec-gen

DUBAI, Feb 8 (Reuters) - OPEC may abandon the dollar for pricing oil and adopt the euro but any such switch will "take time", OPEC Secretary-General Abdullah al-Badri was quoted as saying by a weekly magazine.

A decline in the dollar has eroded oil exporters' purchasing power, prompting some members of the Organization of the Petroleum Exporting Countries to call for a switch away from the U.S. currency.

Badri's remarks sent the dollar lower against the euro on Friday.

"Maybe we can price the oil in the euro," the London-based Middle East Economic Digest (MEED) quoted Badri as saying in an interview. "It can be done, but it will take time."

Reuters obtained an advance copy of the interview which will be published in the London-based magazine's next issue.

"Badri tells MEED ... that the producers' cartel may switch to the euro within a decade to combat the dollar's decline," the magazine said without providing a direct quote about the time frame.

"It took two world wars and more than 50 years for the dollar to become the dominant currency. Now we are seeing another strong currency coming into the , which is the euro," said Badri, who is Libyan.

/... http://www.reuters.com/article/marketsNews/idINL0882239220080208?rpc=611

[Ghost Dog]

105. Global stock markets lost $5.2 trillion in January: credit agency

NEW YORK (AFP) - Global stock markets were walloped with a collective loss of 5.2 trillion dollars in the month of January as investors scurried for cover in the face of economic uncertainty, a report showed Friday.

Standard & Poor's, a US credit rating agency that manages a number of global stock indexes, said 50 of the 52 main global equity markets lost ground in January.

Emerging markets fell an average of 12.44 percent and developed markets lost 7.83 percent to register one of the worst ever starts to a new year, S&P said as it released its global stock market review.

"There were few safe havens in January as 50 of the 52 global equity markets ended the month in negative territory, with 25 of them posting double- digit losses," said Howard Silverblatt, a senior analyst at S&P.

"High volatility, quick turnarounds in both the market and investor sentiment, and drastically lower stock prices prevailed throughout the month."

All 26 developed equity markets posted negative returns in January, with 16 losing at least 10 percent of their value.

The only markets to see gains were in Morocco (up 10.17 percent) and Jordan (up 3.11 percent).

Turkey was hit hardest during the month losing 22.70 percent followed by China (21.40 percent), Russia (16.12 percent) and India (16.00 percent).

/... http://news.yahoo.com/s/afp/20080208/bs_afp/stocksworldlossmarkets_080208174447;_ylt=Aplnd80IqFhmI4Ah9yn9YRqmOrgF

[Hugin]

108. ~15:00 ET: Once again stalking the 12,130 PIL...

Index Last Change % change
• DJIA 12126.61 -120.39 -0.98%
• NASDAQ 2291.21 -1.82 -0.08%
• S&P 500 1326.25 -10.66 -0.80%

In related news... Bush visits tornado ravaged SE States.

[Hugin]

111. ~15:30 ET: Now re-grappling with favored 12,150.00 PIL..

Index Last Change % change
• DJIA 12154.74 -92.26 -0.75%
• NASDAQ 2296.63 +3.60 +0.16%
• S&P 500 1328.51 -8.40 -0.63%

If wild daily swings where opening and closing numbers are nearly the same value isn't the
definition of 'Stagflation'... It aughta be. Hmmpf. Anybody know?

[Robbien]

112. Once Bitten, Twice Bitten? Banks Return to Subprime

Wall Street seems to still believe there’s money in them thar failed mortgages.

In fact, several firms, like JP Morgan Chase and Bear Stearns, are sidling back towards their subprime exes, looking to grab some assets cheaply. This despite our WSJ colleagues’ news today that the Securities and Exchange Commission is taking aim at Merrill Lynch’s subprime securitizations.

Jamie Dimon, for instance, wants to build JP Morgan’s mortgage bank, and start buying up jumbo mortgage loans and subprime assets, which he thinks have favorable spreads right now.

Bear Stearns believes there are numerous opportunities in acquiring distressed mortgage assets; in fact CFO Sam Molinaro told Banc of America Securities analyst Michael Hecht that there are too many buyers and not enough sellers of such assets. (Bold words from the firm that was the bellwether of the credit crunch with the collapse of two subprime-concentrated hedge funds.) And at the American Securitization Conference in Las Vegas, investors talked about doubling down on their subprime bets.

At the end of the year, Lehman Brothers, which was relatively unscathed by subprime, had more mortgage exposure than it did the year before: $37.3 billion in 2007 compared to $27.5 billion in 2006.

http://blogs.wsj.com/deals/2008/02/08/once-bitten-twice-bitten-banks-return-to-subprime/?mod=googlenews_wsj

Ijits

[Hugin]

113. They smell a bailout?

:shrug:

[Robbien]

117. Bear Stearn has a billion in shorts on these investments

Either the banks or Bear will be making a nice chunk of change. My money's on Bear.

[citizen snips]

115. Sector Snap: Mortgage Insurers Fall

NEW YORK (AP) -- Mortgage insurers declined Friday as investors braced for big fourth-quarter losses next week from companies like MGIC Investment Corp., Radian Group Inc. and Triad Guaranty Inc.

Shares of MGIC Investment Corp. fell the furthest, declining $1.10, or 6.9 percent, to $14.78 in morning trading. Shares of MGIC have already tumbled more than 34 percent since the beginning of the year.

Analysts polled by Thomson Financial, on average, expect MGIC to announce losses of $6.77 per share when it releases fourth-quarter earnings on Wednesday.

On Thursday, MGIC said in a regulatory filing it is taking steps to reduce its risk profile on new premiums written by changing its underwriting criteria. The new steps adjust offerings for customers with high loan-to-value ratios, low credit scores and those with limited documentation. The changes are in conjunction with a previously announced change pricing for its products, according to the filing with the Securities and Exchange Commission.

more...
http://biz.yahoo.com/ap/080208/apfn_mortgage_insurance_sector_snap.html

[citizen snips]

116. Weyerhaeuser Swings to Loss on Housing

SEATTLE (AP) -- Weyerhaeuser Co., one of the world's largest lumber and packaging producers, said Friday it swung to a fourth-quarter loss as the deteriorating U.S. housing market cut into demand for lumber.

Executives forecast another grim year ahead, prompting investors to send shares down $2.26, or 3.5 percent, to $62.45 in midday trading.

Federal Way, Wash.-based Weyerhaeuser reported a loss of $63 million, or 30 cents per share, after a profit of $507 million, or $2.12 per share, a year earlier.

Excluding write-downs from housing-related business, restructuring costs and other special items, Weyerhaeuser would have earned $90 million, or 42 cents per share, in the quarter.

more...
http://biz.yahoo.com/ap/080208/earns_weyerhaeuser.html

[citizen snips]

118. Venezuela Denies Oil Assets Frozen

CARACAS, Venezuela (AP) -- Venezuela's top oil official accused Exxon Mobil Corp. of "judicial terrorism" on Friday, but said court orders won by the oil major do not amount to confiscation of $12 billion in assets.

Exxon Mobil has gone after the assets of state oil company, Petroleos de Venezuela SA, in U.S., British and Dutch courts as it challenges the nationalization of a multi-billion dollar oil project by President Hugo Chavez's government.

A British court last month issued an injunction "freezing" as much as $12 billion in assets.

But Oil Minister Rafael Ramirez said: "They don't have any asset frozen. They only have frozen $300 million" in cash through a U.S. court in New York. As for the case in Britain, PDVSA doesn't have "any assets in that jurisdiction that even come close to those sums" of $12 billion, Ramirez said.

more...
http://biz.yahoo.com/ap/080208/venezuela_exxon.html?.v=2

[Robbien]

122. Which I tend to believe. Chavez moved Venezuelan assets out of

Central Banks and started one of his own. There have been plenty of articles about it over the last year or so. There has even been a big sell off of oil refinery and gas station investments in the US by Venezuela.

[citizen snips]

120. Alcatel-Lucent Sees Loss, Uncertain 2008

PARIS (AP) -- Telecommunication equipment titan Alcatel-Lucent sees global economic woes causing it uncertainty in 2008 after the newly merged company survived a choppy 2007, reporting a fourth-quarter loss Friday and scrapping its dividend for last year.

The Franco-American company had some good news, however: Sales rose, and it swung to an operating profit in the fourth quarter.

Analysts said the results were slightly better than expected and that the company's grim outlook reflects the difficult market overall.

Rivals Telefon AB LM Ericsson and Nokia Siemens Networks have already given downbeat forecasts for the market in 2008 amid falling orders. Shares in all three companies rose initially on Alcatel-Lucent's earnings report.

more...
http://biz.yahoo.com/ap/080208/earns_france_alcatel_lucent.html?.v=11

[citizen snips]

123. Beverage Sector Mixed

NEW YORK (AP) -- Shares of Coca-Cola Co. rose Friday after a Bear Stearns analyst boosted his rating on the stock while shares of rival PepsiCo Inc. fell slightly after a UBS analyst cut his earnings estimates on commodity cost concerns.

Bear Stearns analyst Justin Hott upgrade Coca-Cola shares to "Outperform" from "Peer Perform."

Hott said in a note to investors he expects the company's earnings to remain solid and may even rise above expectations due to the addition of high-margin beverages and a better cost outlook than PepsiCo, which must deal with commodity price increases in its Frito-Lay snack division as well as in its beverage segment.

Commodity prices have skyrocketed recently for everything from corn to fuel due to overseas demand, weather issues and the alternative fuel ethanol, which is made with corn.

more...
http://biz.yahoo.com/ap/080208/beverages_sector_glance.html?.v=1

[citizen snips]

125. S&P 500 Leaders & Laggards: GGP CTSH

NEW YORK (AP) -- Shares of General Growth Properties Inc., Micron Technology Inc., and Kimco Realty Corp. declined on Friday and helped send the Standard & Poor's 500 index to a lower finish.

The S&P 500 index lost 5.62 points to 1,331.29.

General Growth Properties, a real estate investment trust, lost $3.07, or 8.1 percent, to $34.87. In a client note, Lehman Brothers analyst David Harris said shares of REITs have declined this week on disappointing retail sales reports and poor economic data, despite moves by the Federal Reserve to promote economic growth.

Kimco Realty Corp., another REIT, lost $2.20, or 6.1 percent, to $34.15.

more...
http://biz.yahoo.com/ap/080208/s_p_500_laggards.html?.v=1

[burf]

126. This was over at the home page

14:05 02/08 (CEP News) Montreal – The euro spiked a quarter-cent just after 1 p.m. EST after a weekly magazine reported OPEC was pondering a move to price oil in the European common currency.

OPEC Secretary General Abdalla El-Badri told the London-based Middle East Economic Digest that member countries are pressuring the cartel to abandon the floundering U.S. dollar.

“Maybe we can price the oil in the euro,” El-Badri said. “It can be done, but it will take time.”

The report says OPEC may switch to pricing oil in euros within a decade. Middle Eastern sentiment has been slowly turning away from the U.S. dollar in part because of a 21.8% rise in the euro against the U.S. currency over the past two years.

Officials from several Middle Eastern nations, including Qatar and Saudi Arabia, have openly pondered abandoning USD pegs. Iran already prices most of its oil in euros. Until now, the OPEC chief has remained silent.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3174293

I don't think this was factored into the market today. I can's see this as a positive. Cheney will have us bombing everybody in OPEC. I wonder how it is (or if it is) going to be covered in the Corporate Media.

Have a great weekend all. We are looking forward to a blizzard watch for the next couple days.

[UpInArms]

139. stay warm and safe

we are only expecting it to be 2 below zero

and power was only off for 2 hours today

it's beginning to feel like a third-world county :crazy:

[citizen snips]

127. Sector Wrap: Precious Metals Producers

NEW YORK (AP) -- Shares of most precious metals producers rose Friday as the price of gold and silver climbed in part on prolonged power outages in South Africa that continue to drain supply and afflict that nation's producers.

On the New York Mercantile Exchange Friday, gold for April delivery jumped $12.30 to settle at $922.30 an ounce. March silver tracked the yellow metal, adding 33.6 cents to $17.159 an ounce. Surging oil prices and a faltering dollar also helped to boost gold prices, BNP Paribas said in a client note.

Overnight, gold and silver rose in Tokyo. Shanghai's exchanges were closed for Chinese New Year.

While most producers posted solid gains during the session, AngloGold Ashanti Ltd. dropped sharply on growing concerns about prolonged power shortages and production.

more...
http://biz.yahoo.com/ap/080208/precious_metals_sector_wrap.html?.v=1

[citizen snips]

128. Reports: Yahoo Board Mulls Microsoft Bid

SAN FRANCISCO (AP) -- Yahoo Inc.'s board reportedly called a special meeting Friday to discuss the slumping Internet pioneer's first response to Microsoft Corp.'s week-old takeover bid, setting the stage for a quick resolution or months of acrimonious wrangling.

After fruitlessly searching for other suitors, Yahoo's options appear to have boiled down to a tough choice.

In the most likely outcome foreseen by industry analysts, Yahoo will either begin negotiating the final terms of an amicable sale to Microsoft or undergo a painful reorganization that would include relinquishing control of its search engine and a big piece of its advertising to rival Google Inc.

If it's rebuffed, Microsoft has indicated it may try to override Yahoo's board and take its offer directly to the company's shareholders in a battle that could drag on through the spring.

more...
http://biz.yahoo.com/ap/080208/microsoft_yahoo.html?.v=4

[citizen snips]

130. Treasurys Rally As Corporate Bonds Drop

NEW YORK (AP) -- Treasury prices rallied sharply Friday as investors turned defensive due to concerns about problems with leveraged bank loans and weakness in the European banking system.

Government-backed bonds tend to come into favor when investors are worried about the risks of other assets and financial system problems.

On Friday, bonds rallied on concerns about German banks' exposure to bad subprime assets, according to Action Economics. There were reports that several large German banks will need capital infusions to complete some upcoming mergers.

In addition, there was speculation that European firms have been selling some of the bad subprime debt held in the complex asset pools known as collateralized debt obligations, the economics firm said. The liquidation of low-quality assets often intensifies demand for safe assets.

more...
http://biz.yahoo.com/ap/080208/bonds.html?.v=6

[citizen snips]

131. Chrysler to Cut Models, Dealerships

SAN FRANCISCO (AP) -- Chrysler LLC president Jim Press said Friday the automaker's rejuvenation plan could include jettisoning some dealers and cutting its product lineup by as much as half.

Press, speaking to industry executives at the J.D. Power and Associates Automotive Roundtable in San Francisco, emphasized that Chrysler's management team has not yet decided the severity of the cuts. Chrysler needs to pare down its lineup so similar models don't compete against each other, a change that will save marketing expenses and help dealers become more profitable, Press said.

The consolidation, under a plan called Project Genesis to align the Chrysler, Jeep and Dodge brands under one roof, should occur within the next 4 years to 5 years, Press said, adding that Chrysler's forecasts of product cuts are based on estimates and not set in stone.

"There are no numbers. We don't know how many models we're going to have. No one knows that," he said.

more...
http://biz.yahoo.com/ap/080208/chrysler_consolidation.html?.v=7

[citizen snips]

132. DJIA Leaders & Laggards: AXP HPQ

NEW YORK (AP) -- Shares of American Express Co. declined with other several credit card issuers and tugged the Dow Jones industrial average to a lower finish on Friday.

The index lost 64.87 points to 12,182.13.

American Express shares slid $1.47, or 3.2 percent, to $44.98.

JPMorgan Chase & Co. lost $1.32, or 2.9 percent, to $43.79.

more...
http://biz.yahoo.com/ap/080208/djia_laggards.html?.v=1

[citizen snips]

135. Nasdaq 100 Leaders & Laggards: CTSH CEPH

NEW YORK (AP) -- Shares of Cognizant Technology Solutions Corp. rose on Friday and helped pull the Nasdaq 100 index up, following the technology and business outsourcing company's jump in fourth-quarter profit.

The index, which includes 100 of the largest nonfinancial securities listed on the Nasdaq Stock Market, gained 20.44 points, or 1.2 percent, to 1,773.74. The broader Nasdaq composite added 11.82 points to 2,304.85.

Cognizant shares rose $4.56, or 16.7 percent, to $31.84. The technology and business outsourcing company beat Wall Street's fourth-quarter expectations and provided an upbeat outlook.

Expedia Inc. rose $1.39, or 5.9 percent, to $25.11. The online travel company's quarterly profit declined on higher expenses, but some analysts remained upbeat on strong sales.

more...
http://biz.yahoo.com/ap/080208/nasdaq_100_laggards.html?.v=1

[UpInArms]

140. ending at the PIL of 12,182.13 with blather

Dow 12,182.13 64.87 (0.53%)
Nasdaq 2,304.85 11.82 (0.52%)
S&P 500 1,331.29 5.62 (0.42%)
10-Yr Bond 3.654% 0.082

NYSE Volume 3,771,813,500
Nasdaq Volume 2,275,363,250

The stock market finished down today, extending the week's decline to 4.6%. Seven of the ten economic sectors finished in negative territory. Still, a strong showing by tech stocks was unable to offset the subprime pressures weighing on financials.

The financial sector was the day's main laggard, down 3.3% at its lowest point. The sector has succumbed to continued concerns stemming from subprime fallout.

On a related note, beleaguered bond insurer MBIA (MBI 14.60, +0.40) announced after yesterday's close its common stock offering was oversubscribed and the company will, in turn, issue a $1 billion offering. Shares were priced below yesterday's closing price. The stock managed to post a 2.8% gain on the belief that the offer will improve MBIA's financial health and help protect the firm's AAA credit rating.

Meanwhile, the tech sector (+1.3%) and the Nasdaq handily outperformed. Amazon.com (AMZN 73.50, +2.59) announced it is authorizing a $1 billion share repurchase plan and may redeem or retire a series of 4.75% convertible senior notes. Recently beaten down, Hewlett-Packard (HPQ 41.88, +1.38), Google (GOOG 516.69, +11.74), Apple (AAPL 125.48, +4.24), and Microsoft (MSFT 28.56, +0.44) all bounced back in today's activity.

Energy stocks were also one of the day's relative leaders (+1.3%). Crude prices reached a February high of $91.98 per barrel on a Bloomberg.com report that OPEC will cut output to prevent prices from falling below $80 per barrel. Additionally, a damaged pipeline in Nigeria and forecasts for lower output in the North Sea boosted prices, according to Bloomberg.com.

Materials (+1.9%) also outperformed the broader market, helped by the 1.9% rise in the commodity index. In turn, seed producer and agricultural company Monsanto (MON 109.92, +5.99) saw its shares increase 6.5%.

The U.S. Senate voted in favor of the economic stimulus package. According to reports, the package is valued at $167 billion and includes checks for individuals making up to $75,000 and couples making up to $150,000. Social Security recipients will receive rebate checks. There has been some skepticism regarding the stimulus package, but it will certainly provide a significant boost to GDP growth in the second half the year.

In terms of economic data, December wholesale inventories increased 1.1%, which is more than the 0.3% increase economists came to expect. Wholesales increased 0.8% in the prior reading. The market's response to this announcement, however, was muted. DJ30 -64.87 NASDAQ +11.82 NQ100 +1.2% R2K -0.6% SP400 +0.2% SP500 -5.62 NASDAQ Dec/Adv/Vol 1695/1275/2.26 bln NYSE Dec/Adv/Vol 1855/1261/1.45 bln

3:30 pm : According to the volatility index, VIX, market volatility has moved sharply higher this week. The VIX is up more than 18.0% since last Friday.

The stock market remains in negative territory, though off session lows. The Nasdaq is residing along the unchanged mark.

Stocks have had a challenging week, pulled lower by the financial sector, which has lost some 9.0%. All ten economic sectors are on pace to finish the week in negative territory.DJ30 -93.89 NASDAQ +2.79 SP500 -9.50 NASDAQ Dec/Adv/Vol 1745/1191/1.78 bln NYSE Dec/Adv/Vol 1947/1161/1.02 bln

3:00 pm : The stock market has held a bearish sentiment through the afternoon. Financials (-2.7%) have been the day's primary laggard, down 3.3% at their session low.

Separately, shares of health care company Allergan (AGN 64.16, -3.15) are being undercut by reports indicating the company's Botox drug is being reviewed by the FDA for safety risks. Botox represented more than 30% of Allergan's revenues during 2006.DJ30 -93.15 NASDAQ +2.71 SP500 -8.51 NASDAQ Dec/Adv/Vol 1717/1194/1.65 bln NYSE Dec/Adv/Vol 1918/1170/958 mln

[Karenina]

141. Analysis on Friday's close???

Bitte.

[roamer65]

142. You want a REAL scare?

The level of "Non-borrowed Bank Reserves" has actually gone negative.

http://www.shadowstats.com

See the chart on the right had side of the page. It's gonna take billions, if not trillions of Bernanke funny money to shore up the banks.

[Roland99]

145. ooo...doesn't look good *at* *all*