STOCK MARKET WATCH, Tuesday June 17

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday June 17, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 218
DAYS SINCE DEMOCRACY DIED (12/12/00) 2704 DAYS
WHERE'S OSAMA BIN-LADEN? 2429 DAYS
DAYS SINCE ENRON COLLAPSE = 2720
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 June 16, 2008

Dow... 12,269.08 -38.27 (-0.31%)
Nasdaq... 2,474.78 +20.28 (+0.83%)
S&P 500... 1,360.14 +0.11 (+0.01%)
Gold future... 886.30 +13.20 (+1.51%)
30-Year Bond 4.78% -0.02 (-0.46%)
10-Yr Bond... 4.25% -0.02 (-0.38%)






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

[ozymandius]

1. Market WrapUp: Setting the Record Straight

BY ROB KIRBY

Last week began on Monday, June 9 with Lehman Brothers announcing a worse than expected 2.8 billion quarterly loss and a simultaneous announcement that they were going to raise 6 billion in new capital:

Lehman Brothers Prices Offerings of $4.0 Billion of Common Stock and $2.0 Billion of Mandatory Convertible Preferred Stock
6/9/2008 9:19 AM - PR Newswire

NEW YORK, June 9, 2008 /PRNewswire-FirstCall via COMTEX News Network

Lehman Brothers Holdings Inc. (NYSE: LEH) announced today it has priced a $4.0 billion public offering of 143 million shares of common stock at $28.00 per share.

The Firm also announced that it priced a $2.0 billion public offering of 2.0 million shares of 8.75% Non-Cumulative Mandatory Convertible Preferred Stock, Series Q (the "Preferred Stock").

Then, on Thursday, Lehman Brothers dropped this “material disclosure” bombshell on the street:

Lehman Brothers sack finance, operating chiefs

Jun. 12, 2008 08:21 AM
Associated Press

NEW YORK - Lehman Brothers Holdings Inc. shook up its management Thursday, removing two top executives in a concession that attempts to quell Wall Street anger over recent losses have failed.

The nation's fourth-largest investment bank said Chief Financial Officer Erin Callan and Chief Operating Officer Joseph Gregory have been removed from their positions, days after the investment bank announced a $3 billion quarterly loss.

Ladies and gentlemen, the “SACKING of a CEO and CFO certainly qualifies as an “undisclosed material fact(s).” Lehman’s stock price had fallen 6.78 per share (23%) on the back of these new revelations/disclosures and somehow – whoever these new WOULD-BE investors were – did not seem to care, sought no relief, and implausibly had no interest in “levering” their position to their advantage on a 4+ billion common stock transaction?

Capitalism DOES NOT work this way.

.....

It REEKS of being another pre-arranged / rigged Federal Reserve hand-out; the practice of crony capitalism – starvation and restricted credit for the masses and open spigots at the almighty fiat trough for connected, privileged insiders.

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

[ozymandius]

2. Today's Reports

08:30 PPI May
Briefing.com 1.0%
Consensus 1.0%
Prior 0.2%

08:30 Core PPI May
Briefing.com 0.2%
Consensus 0.2%
Prior 0.4%

08:30 Housing Starts May
Briefing.com 1000K
Consensus 980K
Prior 1032K

08:30 Building Permits May
Briefing.com 960K
Consensus 960K
Prior 978K

09:15 Capacity Utilization May
Briefing.com 79.8%
Consensus 79.7%
Prior 79.7%

09:15 Industrial Production May
Briefing.com 0.2%
Consensus 0.1%
-0.7%

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

[Pale Blue Dot]

17. ozy, question for you about these reports.

Where do they get the "consensus" numbers? I'm curious because the PPI May "consensus" figure is 1% which seems set very high. It's almost like they're setting up bad news to be good news - in other words, if the figure comes in at .7% (still pretty damn high) it will be less than the "consensus" thought it would be and the stock market will rally.

Thanks!

[ozymandius]

21. Consensus is taken among those polled for data.

This often means independent economists (Thompson Financial, Barrons, Briefing, etc) whose job is to analyze data among government and private entities. Each independent analyst has preferred internal sources and, of course, an opinion and method. Some internal sources (such as Labor Department analysts for employment data) also feed the average expectations for economic reports.

-edited for a bit of clarity-

[UpInArms]

24. U.S. PPI up 7.2% in past year - May housing starts lowest in 17 years - May PPI up 1.4%

01. U.S. May housing starts lowest in 17 years
8:30 AM ET, Jun 17, 2008

02. U.S. May building permits fall 1.3% to 969,000 annual rate
8:30 AM ET, Jun 17, 2008

03. U.S. May housing starts fall 3.3% to 975,000 annual rate
8:30 AM ET, Jun 17, 2008

04. U.S. May crude energy PPI up 13.1%
8:30 AM ET, Jun 17, 2008

05. U.S. PPI up 7.2% in past year
8:30 AM ET, Jun 17, 2008

06. U.S. May food PPI up 0.8%
8:30 AM ET, Jun 17, 2008

07. U.S. May energy PPI up 4.9%
8:30 AM ET, Jun 17, 2008

08. U.S. May core PPI up 0.2% vs. 0.2% expected
8:30 AM ET, Jun 17, 2008

09. U.S. May PPI up 1.4% vs. 0.9% expected
8:30 AM ET, Jun 17, 2008

[UpInArms]

28. Housing starts fall to 17-year low in May

http://www.marketwatch.com/news/story/economic-report-housing-starts-fall/story.aspx?guid=%7B1ACBA1CF%2D69B4%2D4D83%2DAC7B%2D9A9FEC888E06%7D&dist=hplatest

WASHINGTON (MarketWatch) - Desperately trying to reduce supply, U.S. home builders started construction on 3.3% fewer homes in May, the Commerce Department estimated Tuesday.

Housing starts fell 3.3% to a seasonally adjusted annual rate of 975,000 in May, the lowest level since March 1991. Starts of single-family homes fell 1% to an annual rate of 674,000, also the lowest in 17 years.

Economists surveyed by MarketWatch expected starts to fall to a 980,000 annual rate.

Home builders are cutting back on production in an attempt to bring supply back into balance with falling demand. On Monday, the National Association of Home Builders reported builders' sentiment is as weak as it's ever been in the 22-year history of its survey.

<snip>

In the past year, housing starts are down 32.1%. Single-family starts are down 41.2%. Building permits are down 36.3% in the past year, while single-family permits are down 41.4%.

...more...

[dreyer]

33. American News is Moronic and Infuriating

Have you noticed the morons that present data as news always add some meaning attachment as if the news was built around some unified plan (I guess IAW some pre approved, shove it down the American public morons throats, phrases from the Nazi National Speak book). So instead of saying "U.S. home builders started construction on 3.3% fewer homes in May, the Commerce Department estimated Tuesday." and leaving it at that, because there were probably a thousand reasons (most probably to do with limited money, less employed to do it, and higher costs and risks of building for the thousands of companies doing it ect.. ect..). The morons at (and they are not all bad at Marketwatch) have to add this bullshit line, "Home builders are cutting back on production in an attempt to bring supply back into balance with falling demand." BULLSHIT. As if the thousands of building companies got together last week for sandwiches and said hey everybody stop building, oh and Henry, call Marketwatch and tell them our decision that we all agreed to cut back on production in an attempt to bring back into balance with falling demand. I need a drink. Does the news ever say we don't know what the fuck happened.

[Warpy]

36. You're missing the point

and the point is that they do know what the fuck happened, but they know if they admit it the American public will panic and start demanding that all the thieves be rounded up and thrown into prison and that they'll be among the first behind bars.

The propaganda parading as financial analysis is to keep us all clustered on the hillside, chewing our grass, while the wolves circle us and our keepers anticipate fleecing us again and again.

Despite all the feel good happy talk blatting out of the TV set, a few of us are aware of what's going on and it's been like watching a slow motion train wreck. We know what's about to happen, but there is so much inertia involved that we are powerless to stop it.

The news never says much of anything. The jobs of all the carefully coiffed and blow dried bobbleheads rely on not saying much of anything.

[dreyer]

38. But somehow they miss the illegal brain damaged white house monkey

And the disastous effects this can have on a nation. Any American news reports on this?

[TalkingDog]

39. It is information without context.

Albeit with a bit of spin.

I find myself yelling at the car radio when the idjits on NPR have the gall to suggest the economy must be leveling out because car sales were up last month.

CAR SALE WERE UP BECAUSE PEOPLE ARE TRADING IN THEIR GAS GUZZLERS YOU FREAKIN' SHILLS!!! If anything it should suggest that money is tighter within families. Perhaps better for auto dealers, but worse for gas companies...on the whole a wash.

It's infuriating to be treated like a blind-mute idiot. But they do it because they can. Because they now take money from Wal-Mart or anybody who will throw them a quarter. So they dumb it down for the perceived intelligence of their listeners.

They will try to defend the practice of "news without context" because they claim it lacks a point of view. A blatant cop-out. There is no human communication that occurs without the injection of a viewpoint. Whether it's word choice, word order, inflection, body language or sub-vocalization; all those components convey a point of view.

In addition we absorb these cues, many times unconsciously. http://en.wikipedia.org/wiki/Mirror_neuron
Those of us who are in tune with our reaction to dissonant or congruent information can be consciously aware of our reactions and react accordingly. But when the people around us don't have the same reactions, we can feel isolated or "out of step".

So what you can take from this: 1) Yes, presented information is and always will have an inherent bias. 2) News reporters are taught this and should be more up front about it. 3) Many of them want to keep their jobs so they can't. 4) We're all psychic or at least empathic. (Ha! Now even science says so, ...machines have proved it and everything!!!! So, of course, that makes it true.) 5)They are lying through their teeth and you are not crazy.

[dreyer]

44. Plus they might have to leave their desk and go find out

I guess it comes down to what sells, and admitting you don't have a clue, even if honest, doesn't have a place in today's American news market. We'd rather be lied to with stories that have no substantiated data or facts. Plus I'm sure its a lot cheaper to just make it up, instead of doing any kind of investigative reporting (cost of travel ect..). Many Americans believe what they want to anyway, and are so used to being lied to, or told what to think, they wouldn't know how to process actual facts and accurate reporting.

[UpInArms]

25. U.S. Q1 current account deficit widens to $176.4 billion

02. U.S. Q1 current account deficit widens to $176.4 billion
8:31 AM ET, Jun 17, 2008

[UpInArms]

27. Current account deficit widens to $176.4 billion

http://www.marketwatch.com/news/story/current-account-deficit-widens-1764/story.aspx?guid=%7BEF71B458%2D8785%2D46F5%2D89E6%2D42881FB6E70A%7D&dist=hplatest

WASHINGTON (MarketWatch) -- The U.S. current account deficit widened to $176.4 billion in the first three months of the year from $167.2 billion in the fourth quarter, the Commerce Department reported Tuesday. The current account deficit was 5% of gross domestic product. The increase was largely due to lower income earned by Americans overseas. Net financial flows into the United States fell to $124.3 billion from $213.4 billion

[ozymandius]

3. In volatile markets, oil slips in early trading

VIENNA, Austria - Oil prices eased a day after hitting a trading record of nearly $140 a barrel as investors weighed increased production from Saudi Arabia against the ability to supply developing countries.

Light, sweet crude for July delivery shed $1.76 cents to $132.85 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe.

Crude prices gyrated Monday, rising sharply to a record $139.89 per barrel before tumbling to as low as $132.84. It settled at $134.61 a barrel, down 25 cents.

"Price swing of $5 per barrel isn't unusual anymore. The issue really is global oil demand is growing at a reasonable pace and supply is still playing a catch up game," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

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

[ozymandius]

4. Paulson, Darling Face `Stagflation' Risk on Oil Price (Update2)

June 16 (Bloomberg) -- Finance ministers from the world's richest nations face another week of inflation headlines after signaling concern that the global economy risks a dose of stagflation as commodity prices soar.

Officials from the Group of Eight ended talks in Osaka, Japan, on June 14 by saying record fuel and food costs threaten to spur inflation. They also pose a ``serious challenge'' to growth, eclipsing the credit squeeze, the ministers said.

``Commodity prices have powered ahead of the financial crisis to become the number one priority of international policy makers,'' said Marco Annunziata, chief economist at Unicredit Markets and Investment Banking in London. ``Stagflation is clearly the underlying, unspoken concern.''

After acknowledging policy making is ``more complicated,'' the ministers' apprehension about an inflation outbreak may mount this week. Economists forecast reports to show consumer prices last month rose the most since 1997 in the U.K., while U.S. producer prices are predicted to have gained 1 percent from April. The inflation rate in the euro area rose to 3.7 percent last month, the highest since June 1992, the European Union's statistics office said today.

.....

At the same time, the global expansion is faltering. The World Bank last week predicted growth of 2.7 percent this year, a percentage point less than in 2007. The G-8 officials said ``downside risks persist,'' citing declines in U.S. house prices and financial-market strains. Paulson said the cost of oil ``risks prolonging the U.S. economic downturn.''

http://www.bloomberg.com/apps/news?pid=20601103&sid=aIYXYeo9WYOk&refer=news

[UpInArms]

29. Tesoro Corp. discloses Q2 hedging loss of $125 mln

http://www.marketwatch.com/news/story/tesoro-corp-discloses-q2-hedging/story.aspx?guid=%7BB3539250%2D94CE%2D4B94%2D9CC3%2DA360D1C6D050%7D&dist=msr_5

NEW YORK (MarketWatch) -- Tesoro Corp. (TSO) on Tuesday said its second-quarter regional operating expenses will be higher than its earlier target by 30 cents to 50 cents a barrel because of rising energy costs. It also disclosed a loss of $125 million on its hedging strategies in the second quarter. The San Antonio, Texas refiner said it'll use its 30 million barrels of product and feedstocks to reduce its debt. Tesoro plans to be unborrowed on a credit facility by the end of July. As of May 31, Tesoro had $305 million of debt on the facility, down from $545 million at the end of March. Tesoro said it's schedule to realize its goal of generating $750 million to $1 billion of operating cash flow through reduced operating and administrative costs, lower capital expenditures and reduced working capital driven mainly by inventory reductions. It's also reviewing its hedging strategies.

[ozymandius]

5. Study: Health costs to rise nearly 10 percent

NEW YORK - Employer health care costs are poised to rise almost 10 percent in 2008 — more than double the annual inflation rate — and nearly that much again in 2009, according to an industry report released Tuesday.

The study by PriceWaterhouseCoopers predicts that medical costs will increase 9.9 percent in 2008 and an additional 9.6 percent in 2009.

.....

The report identified two factors driving the increase:

-A hospital building boom, as hospitals replace facilities and add private rooms and centers for outpatient treatment.

-An increase in the expenses those with insurance are paying for those without. Cost-shifting from the uninsured, Medicare and Medicaid will account for nearly one in every five dollars spent by private insurers in 2009, according to the study, as the federal government underfunds public insurance programs and the number of people with private insurance continues to decrease.

http://news.yahoo.com/s/ap/20080617/ap_on_bi_ge/healthcare_costs

[ozymandius]

6. US stocks head for higher open as oil declines

NEW YORK - U.S. stocks headed for a higher open Tuesday as oil prices declined and as investors awaited economic figures on the housing market and inflation at the wholesale level.

Wall Street is also expecting a report on industrial production.

But first up, an hour before the opening bell, investors will be looking for figures to show that the producer price index, which measures wholesale and raw material prices, rose in May. The Labor Department's index will likely draw particular attention this month because investors are looking for signs of whether increased costs for a range of commodities, including oil, will force companies to pass along higher costs to customers.

.....

Wall Street is worried that rising energy costs, which affect almost all other costs, are going to prove too much for U.S. consumers who are already strapped by a somewhat uncertain economy and a weak housing market. Investors are worried that consumers will be forced to trim discretionary spending. Consumer spending accounts for more than two-thirds of U.S. economic activity so a pullback could harm the economy.

Investors also will be looking to quarterly results due from Goldman Sachs Groups Inc. Investors have credited the investment bank with largely sidestepping some of the problems with faulty credit that have forced other big names on Wall Street to seek capital injections to shore up balance sheets. But attention is focusing early Tuesday on a Financial Times report that Goldman is close to finalizing a plan to restructure a $7 billion investment known as a structured investment vehicle.

http://news.yahoo.com/s/ap/20080617/ap_on_bi_st_ma_re/wall_street

[Theres-a]

8. Declines?

It's down less than $5 from a new high of $139, and they say oil prices are declining?Come on.Who are they fooling exactly?

[ozymandius]

13. Volatility is the nature of the beast.

The idea of a decline changes so quickly. No longer are we treated to a months-long decline with a plateau at some point. The new nature of these markets throws price swings constantly.

So who are they fooling? Anyone who only bothers to read a headline - and nothing else.

[TalkingDog]

42. multiple strings

About 10 years ago I was reading a long op-ed on mass media as a drug for the populace.

The gist of it was that the media had begun overloading us with tiny bits of data, information, entertainment. Which has the same effect as going into a any space with a lot of sensory input: lights music, crowds, smells, temperature changes. What happens is that we effectively shut down. We don't think critically any more because there is no consistent, coherent data/information to act on.

If you are presented a pattern that spans months, you can pick out the regular occurrences. If you are given bits of the same pattern on a daily basis, you have no context with which to view it.

He likened it to soap operas. Every day you get a bit of data about a story line. And if it were just the one story line, you could make some educated guesses about the story arc. But introduce multiple overlapping strings and it becomes much to complex to follow and leads to a willingness to accept incredibly the implausible happenings that occur in those programs.

So, our news organizations, by deliberate intent or by neglect have made it impossible for us to form critical ideas about the information without a lot of conscious and difficult effort.

[DemReadingDU]

54. Leonard Pitts Jr.: Is Google making us stupid? Maybe

6/14/08 Leonard Pitts Jr.: Is Google making us stupid? Maybe

I had thought it was just me.
In reading the cover story in the new issue of The Atlantic, however, I have learned that I am not alone. There are at least two of us who have forgotten how to read.
I do not mean that I have lost the ability to decode letters into words. I mean, rather, that I am finding it increasingly difficult to read deeply, to muster the focus and concentration necessary to wrestle any text longer than a paragraph or more intellectually demanding than a TV listing.
You're talking to a fellow whose idea of fun has always been to retire to a quiet corner with a thick newspaper or a thicker book and disappear inside. But that has become progressively harder to do in recent years. More and more, I have to do my reading in short bursts; anything longer and I start drowsing over the page even though I'm not sleepy, or fidgeting about checking e-mail, visiting that favorite Web site, even though I checked the one and visited the other just minutes ago.
I've tried to figure out why my concentration was shot, but no explanation satisfied: I watch less television than most folks and am no more busy than I was 10 years ago.
Now, author Nicholas Carr posits a new theory. In "Is Google Making Us Stupid?" he notes that he and many of his literary friends report the same experience, leading him to wonder if the Internet is not rewiring our very brains,

more...
http://www.sltrib.com/opinion/ci_9586831

[Hugin]

58. Being my typical contrary self...

I find I read more... Not as much more as after the emergence of Amazon, but, more. In fact I just ordered two books
I would have never known about pre-Google.

Heck! I'm thinking we should count time by the birth of Google. This being the year 6 A.G. (After Google)!

[DemReadingDU]

61. I definitely read more too

The Google has become my personal library. Anything I want to inquire about, I can usually find information somewhere using The Google.

I find as I read more around the blogosphere, I have less time for books. OTOH, I have gained a wealth of financial knowledge here at SMW, than I could understand reading a book.

[Ghost Dog]

75. Before Google there was (and still is) Alta Vista... n/t

[AnneD]

71. How about a different take on this.....

My brain was always wired a bit differently. I have a mild case of dyslexia and had to learn, through a disciplined approach, to read. In fact, illness like sinusitis or fatigue can cause words on a page to melt into a alphabet soup. Once I learned to read-I read with a vengeance. In the 4th grade when they measured this stuff-I was reading close to a senior level in high school. I read everything and anything. Classics like Ivanhoe, and Canterbury Tales in the 5th grade, Shakespeare, Virgil, Plato, Aristotle, Marcus Aurelius, and Aristophanes (and other Greek and Roman philosophers) during my summer breaks in in 6th and 7th grade, and other classics like Poe, Hawthorne, Whitman before high school. During high school, because I had read most of the choices on the list...my English teachers guided me to modern classics, Tolkien, Vonnegut, Hunter and of course....all though my readings, I had a passion for Sci Fi, which was regarded as junk reading at that time-I read that to unwind....

And then I went to college. It nearly killed the joy of reading for me. Being forced to read poorly written textbooks produced by professors just to get kick backs from publishers. I stopped reading anything longer than a magazine length for years.....and this was way before the computer. That was my first experience with what I now see in media today. Thing written not for edification of the individual, but something written to line someone else's pocket or to push an agenda. That was the one important thing I learned in college.....criical thinking.

I read now more than I have in years, but it is different. If I have a question...I google it. I'm a patient digger and I can now dig to my hearts content. If someone quotes something that trips a mental alarm-I use the internets to research the facts. My PSYOP experiences usually trigger these alarms. My methodical thinking that was part of my Nurses training helps me root out facts systematically. I do get to the bottom of things eventually. Maybe not quickly, but I do get to the bottom of things.

I have also learned that my time is my most valuable asset. I and do screen books in rapid fire order. I have forgotten more of what I have read than most folks actually read these days. And what is written, for the most part is fop and fluff. Really, will Jackie Collins be remembered as a great novelist-I doubt it. There are so few books that will be regarded as classics. So unless it has personal meaning to me-it doesn't get read.

I think it is not read that has been dumbed down, but the art of critical thinking. Just my humble 2 cents worth.

[ozymandius]

7. Lenders pledge speedy response on loan help

WASHINGTON - Mortgage companies, facing criticism that they aren't doing enough to stem the housing crisis, are pledging to let troubled borrowers know whether they're approved for help within 45 days of receiving a homeowner's application.

The promise is expected to be announced Tuesday by the Hope Now alliance, a Bush administration-backed industry group, as part of a new set of guidelines for mortgage companies participating in the effort. The Associated Press obtained a copy of the guidelines.

The agreement is designed to clarify the mortgage assistance process for borrowers and the industry alike, but is not legally binding.

It also tries to alleviate a major stumbling block: the reluctance of companies that hold second mortgages, such as home equity loans, to agree to such modifications. Such requests should be approved, the agreement says, unless the holder of the second mortgage would be put in a worse financial position.

......

Consumer advocates have pressed Congress to let bankruptcy judges rewrite the terms of mortgages for strapped borrowers, but that proposal faces intense opposition from the Bush administration and Republican lawmakers and is unlikely to make it through Congress this year.

http://news.yahoo.com/s/ap/20080616/ap_on_bi_ge/loan_modifications

[UpInArms]

9. dollar watch

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

Last trade 73.621 Change -0.056 (-0.08%)

US Dollar: The Triple Blow

http://www.dailyfx.com/story/bio1/US_Dollar__The_Triple_Blow_1213650795531.html

The US dollar suffered a triple blow today from the lack of any direct comment about the dollar at the G8 meeting and weaker economic data. The Finance Ministers of the G8 nations have now relegated the task of talking about currencies to attendees of the G8 Summit in July since the communiqué made no mention about the need to strengthen the US dollar and instead focused on the threat that increasing inflation poses to economic growth. Going into the meeting, there were a lot of back and forth comments from unnamed G8 officials about the possibility of currency intervention, but with no central bank heads present, the chance of some major change to the FX language was minimal. Nonetheless some traders speculated that there could be a big announcement and have now reversed their dollar bullish trades. Adding to the selling this morning was the weaker than expected Empire State Manufacturing survey which fell for the fourth time in five months and the drop in the NAHB housing market index which matched its lowest level on record. This suggests that the problems in the housing market are not behind us and this news comes at a precarious time as the leading banks on Wall Street continue to report major losses. This morning, Lehman Brothers confirmed that they posted their first quarterly loss ever. There are now rumors that Lehman Brothers will either be forced to raise capital or seek a buyer. With Goldman Sachs and Morgan Stanley also set to report earnings this week, more bad news from the Financial Sector could weighs on stocks as well as the US dollar as traders realize that the summer of credit worries may be happening all over again. However it says a lot that the losses in USD/JPY and USD/CHF have been relatively mild today. This may be in anticipation of the producer price report tomorrow, which the market expects to be hot. If inflation proves to be strong and Goldman Sachs earnings, which will be released before the market opens is not as bad as the market may have feared, then the US dollar could resume its uptrend.

...more...

Dollar Holds Ground- Is Inflation Illusory?

http://www.dailyfx.com/story/bio2/Dollar_Holds_Ground__Is_Inflation_1213695864004.html

Another night of back and forth price action as EURUSD continued to swing on either side of the 1.5500 figure which has become the literal and figurative level of equilibrium in the pair. The directionless price action is a reflection of the general confusion in the currency market as traders try ascertaining the true intentions of President Trichet and Chairman Bernanke.

While the two men have made unambiguously hawkish comments over the past two weeks raising the possibility of higher rates on both sides of the Atlantic it very much remains to be seen whether they will be able to follow through on their rhetoric. Inflation is clearly the primary problem vexing all of the G-11 central bankers, however a closer looks at the numbers reveals that almost all of the price pressure emanates from oil.

Today’s UK CPI numbers are a perfect case in point, as headline reading printed hotter than expected at 3.3% vs. 3.2% forecast but core remained well contained at 1.5%. This same dynamic occurred yesterday in the EZ numbers as well. In short the world over headline readings may be hot but they are being driven there not by overheated demand but rather by skyrocketing energy costs which have impacted virtually every product and some services in the economic chain.

Monetary authorities are becoming increasingly worried about the rise in inflation expectations, most specifically the unleashing of wage-price spirals that dogged the US economy in the late 1970’s and early 1980’s. However with unemployment rising in the US and no longer declining in Europe the danger of runaway wage increases appears minimal. On the other hand the risk of tipping both economies into a recession through unnecessarily restrictive monetary policies is quite real.

<snip>

Meanwhile in US the calendar brings the PPI data which is likely to follow the same pattern (hotter headline and muted core readings) as well as Housing Starts data. As we noted yesterday the most important variable driving trade in FX this week may not come from the economic calendar but from the pits of NYMEX. If oil drops below $130/bbl in today’s trade the greenback could see a further boost.

...more...

[UpInArms]

18. Dollar falls as traders trim U.S. hike expectations

http://www.marketwatch.com/news/story/buck-drops-investors-pare-expectations/story.aspx?guid=%7B68661282%2D289F%2D4A09%2D94B7%2DD1B52161ECA4%7D

LONDON (MarketWatch) -- The dollar slipped against major counterparts Tuesday, after a pair of news reports led traders to scale down expectations for the Federal Reserve to embark on a series of interest-rate hikes this summer.
The dollar was trading at 108.04 Japanese yen, compared with 108.06 yen in late North American trading Monday.

The euro was buying $1.5497 compared with $1.5476 in Monday's late U.S. trade.

A report in The Wall Street Journal Tuesday said the Fed is almost certain to leave interest rates unchanged when it meets next week, and is unlikely to raise rates before autumn unless the inflation outlook deteriorates considerably.

A report in the Financial Times late Monday similarly said that markets are "in danger of getting carried away with their expectations for Federal Reserve interest-rate increases," and cited senior Fed officials.

"The market has been obsessing with inflation over the past three weeks, and the next 48 hours will likely see the markets' attention shift momentarily back to the issue of the U.S. investment-banking-sector health, with Goldman Sachs and Morgan Stanley due to report their earnings on Tuesday and Wednesday respectively," wrote J.P. Morgan's Singapore-based currency strategists Claudio Piron and Yen Ping Ho, in a note to clients Tuesday.

"Any significant negative surprises would prompt markets to reconsider the current expectations for the three Fed rates hikes before the end of the year and thus weigh on the U.S. dollar," the J.P. Morgan strategists said.

...more...

[DemReadingDU]

10. Moody's downgrades GMAC

ResCap exposure sends General Motors' financing company further into 'junk' territory.

Moody's Investors Service downgraded the rating of GMAC LLC deeper into "junk" status Monday, saying the lender's exposure to its struggling residential mortgage unit is a liability.

Moody's cut GMAC, which is owned by General Motors Corp. and Cerberus Capital Partners, to 'B3' from 'B2.' Ratings indicate a company's ability to repay debt and are used by lenders to set the terms of borrowing.

Last week, GMAC (GMA) obtained a new $11.4 billion credit line and said it would use part of it to fund a $3.5 billion credit line for mortgage subsidiary Residential Capital LLC.

That move, along with other debt restructuring, has increased GMAC's exposure to ResCap to $4.6 billion from $750 million at the end of the first quarter, Moody's said.

ResCap has come under pressure amid a worsening of the housing market that has seen a spike in mortgage delinquencies and foreclosures.

"The downgrade also reflects growing pressure on the profitability of GMAC's auto finance operations, arising from higher average borrowing costs and weakening asset quality," Moody's said.

http://money.cnn.com/2008/06/16/news/companies/moodys_gmac.ap/index.htm?postversion=2008061616

[UpInArms]

11. Last One Left, Please Turn Out the Lights

http://nymag.com/news/businessfinance/bottomline/47823/#

In 25 years on Wall Street, I have never seen things this bad. We’ve had some tough times: the 1987 stock-market crash, the collapse of the once-all-powerful Drexel Burnham Lambert, the immolation of Long Term Capital, the post-9/11 calamity, and the dot-com implosion. Every one of these events rocked the Street, causing pay cuts and layoffs and creating a sense of doom. But this time is different; it’s doom itself.

Wall Street closely guards its layoff numbers, but piece together the evidence and a grim picture appears: an estimated worldwide total of 4,000 dismissals at Morgan Stanley, 5,000 at Merrill Lynch, 7,000 at UBS, and 16,000 at Citigroup. Even the extremely profitable Goldman Sachs is letting people go in some departments. Then there’s Bear Stearns. A year ago, Bear was the firm to work at. People talked of the Era of Bear. Now it’s gone. Vanished. With more than 10,000 of its 14,000 former employees either looking for work or soon to be laid off by its new owner, JPMorgan. Right, JPMorgan—the firm that seemed to pants the Fed and Treasury when it snapped up Bear Stearns for a pittance. Well, it now appears possible that Morgan may have grossly underestimated how terrible the Bear bond portfolio may be. The thinking on the Street was that Morgan couldn’t miss; it got $30 billion in guarantees against losses. But now it looks like the losses might exceed the guarantees. For those of us looking to Morgan as the best-capitalized play on Wall Street after Goldman, one that could emerge as a strong player when things get better, the possibility that the Fed got the better end of the deal is chilling. As if all that weren’t bad enough, news came last week that Lehman Brothers is fighting for its corporate life. As someone who has great respect for Lehman CEO Dick Fuld, I’m stunned at the size of the reported $2.8 billion loss for the quarter just finished, especially considering how confident the company was about its prospects for that quarter a couple of months ago. They just raised $6 billion in capital at what I thought were fire-sale prices, but immediately the stock went below the $28 offering price, even though that figure already represented a hefty discount versus the previous week’s price. The people who bought into this deal have to feel like they just leased an apartment in Dresden after the first 400 bombers hit, not realizing that there were another 900 behind them. Lehman’s compensation costs are so out of control that it’s going to need to break out the electric bleachers to downsize ahead of the short-selling posse. It already reassigned CFO Erin Callan and COO Joseph Gregory. The 28,100 overpaid, underworked employees who remain in place are simply ballast on Lehman’s leaky ship.

In typical times, the castoffs from these sinking (or sunk) firms would have no problem finding jobs. When Drexel collapsed, or Deutsche Bank picked off Bankers Trust, or Prudential eliminated its equities business, there was always some shop on the rise, looking to hire. But these are not typical times. This time around, no firm—no area of the business—is rising. Every product, from stocks and bonds to mergers and acquisitions to corporate finance, is under pressure at every bank. The clients themselves, fresh from getting talked into buying horrid complex products, many of them mortgage-related, are not exactly eager to buy anything exotic, which is where the big fees have been coming from in recent years. Worse, the same clients sold lots of those exotic products back to the firms that issued them, and I don’t believe all the write-downs on that acid-reflux inventory have been taken yet, particularly at Lehman, Merrill, and Citigroup. I expect tens of billions more in write-downs from those three firms alone.

At the same time, a host of other profit sources are drying up. Private-equity deals have shut down almost completely, as the slowdown in the economy has stoked fears that the newly privatized, debt-laden companies won’t be able to make good on their bonds. The banks are no longer generating profits from lending hedge funds billions to buy product, because the brokers ended up taking a beating when the clients borrowed too much and then began to default on those loans. The bankers and brokers had moved aggressively into these fixed-income revenue rivers in the first place because the equities-trading game, long a mainstay of all of these firms, had become so commoditized that it was impossible to make money from it. To make matters worse, former attorney general Eliot Spitzer destroyed a once-sweet fee-generating scam—the practice in which banks’ research departments wrote rosy reports about companies in order to win their investment-banking business and rake in the M&A profits. No wonder all of these stocks are at or near their multiyear lows, depths not seen since the dot-com aftermath of 2002, when Wall Street last shriveled.

...more...

[DemReadingDU]

15. That was interesting, written by Jim Cramer

last sentence...
The era of the big Wall Street payday is over. When people call me looking for a job, I tell them to try a law firm.

[ozymandius]

16. I have an opinion about this.

True. All true. Here on this thread we keep up with the numbers. Wall Street rallies when layoffs occur. It does make me wonder: how do those forced from their jobs feel about their former colleagues feting their departure with spiking stock prices on the news?

I could proclaim a bit of schadenfreude here. But it would be humorless - having experienced prolonged unemployment myself. The loss of a job often means a loss of healthcare for the unemployed individual. It also often translates as broken families as children are caught in the waves of bitterness. So my feeling for these who have lost their jobs is a sense of regret. Regret weighs on the notion of what better lives these people may have had should onerous legislation never had passed allowing their employers to market exotic, complicated financial products; should the firewalls that were put in place after 1932 were not torn down by a dizzyingly corrupt and naive Congress over the the course of twelve years.

My ire is reserved for those politicians who thought it could never happen again. A special pox is reserved for the houses of those charlatans on Wall Street, offering platitudes of "it's okay this time"; and, of course, reciprocal campaign cash offered to get that legislation passed. I look forward to reading about white-collar gangsters spending some time in prison. It's not difficult to see how either the letter or the spirit of Sarbanes-Oxley were violated during these recent years. Too much has been brought to light when major financial corporations have "revised" or, in effect, erased years of profits.

As for the big picture relating to this story: J.P. Morgan deserves what it gets for its greed. We the taxpayers do not deserve to suffer the consequences of their bad judgment. So I want to see those firewalls put back in place. At least pretend they still exist. And while we're exercising our imagination in that regard, we should also pretend that a big bank is subject to free market forces.

[Pale Blue Dot]

19. "My ire is reserved for those politicians who thought it could never happen again."

Yes. That's been the source of my anger as well.

[DemReadingDU]

26. Not only politicians, but the greedy CEOs

of all the companies who pressured the politicians to remove the regulations that were implemented to prevent such a financial catastrophe that is occurring today, just so deregulation would put millions/billions in their pockets.

[Tansy_Gold]

34. Add my voice to the chorus, but it's not just the CEOS

I still reserve some anger toward the "overpaid, underworked" mid-level and even lower-level folks, the ones who are being laid off in droves. These weren't/aren't uneducated, uninformed flunkies. These are people who had some clue what they were doing, some clue that their salaries were inflated, that they were living very, very, very well compared to one helluva lot of other people.

Iv'e often dredged up stories from my experience at Lincoln Savings back in the early 90s, after the collapse of Keating's empire and the feds in the form of Resolution Trust Corporation moved in to liquidate the mess. Here's another one:

The soda machines in the break room charged 25 cents per can, which at the time was still a whole lot less than any vending machine elsewhere in Phoenix; standard then was about 50-60 cents a can. Yet even at this discount, the hold-over Lincoln employees bitched every time they dropped a quarter in. In the days of Keating, they boasted, the soda was free. They'd come in on Friday afternoons and line up to fill their tote bags and briefcases with a 12-pack or two for the week-end. They KNEW this wasn't what their friends at other banks, other employers got, and they KNEW they were taking grossly unfair advantage. But the attitude had been -- and they freely admitted this -- that they'd better get while the gettin' was good, because it might not last forever. They KNEW.

And another:

One of the young (early 30s) senior loan officers who had been hired by Keating in Lincoln's heyday had figured out by late 1991 that his days with Resolution Trust were numbered. I'll call him Nick. Nick often walked around the office, doing nothing, because the loan officers he had overseen were now gone, their department's portfolio nearly all liquidated in one way or another. Nick was still getting paid, but he didn't have anything to do. ("Overpaid, underworked.") Like most of the loan officers, Nick started enlisting the aid of the secretaries to update his résumé and send it out on the RTC postage meter. Because of shared computers/servers/hard drives/whatever (I ain't no techie!), some of Nick's cover letters ended up on my computer. Not his résumé, just half a dozen or so letters. At a time when the RTC-hired loan officers were making $40k and that was pretty much the going rate for loan officers in a Phoenix market rocked by the Lincoln Savings and Western Savings and MeraBank collapses, Nick told prospective employers that even though Lincoln Savings was his only banking job experience -- he'd worked as a salesman for a local car dealership for a couple years after college and before getting picked up by Lincoln -- he'd been making $120k for Keating; he would be willing to lower his expectations and accept $80k, but after all, he did have a new boat, a new car, and a new baby to support. And yes, he put that information in these cover letters.

Nick wasn't stupid. He was young, inexperienced, and he had lived very, very high on the hog for about five or six years. But he wasn't stupid. He got sucked into a culture where it was easy to ignore reality, both the reality that was going on inside Lincoln Savings and the reality of the rest of the world outside. All that mattered was that Nick had landed a cushy job, where he signed off on loans that he may or may not have understood, loaded up his briefcase on Friday afternoon with free soda, came in late every morning, left early every afternoon, took two and three hours for lunch, enjoyed pizza parties on Thursdays, and took home a paycheck that was twice what anyone else in a similar position was making.

Nick got laid off by RTC before he found another job. He kept in contact with a few of the other old Keating employees, and so we learned that he ended up going back to the car dealership. He sold his boat, traded in his new car for one he could afford, and had his Paradise Valley home for sale. His wife had gone back to teaching, quite a come-down after her frequent strolls through the office to show off her new clothes, her new shoes, her new diamond bracelets.

I don't feel sorry for these people at all. I reserve my pity for the people who got bilked out of their life savings so people like Nick and his wife could live like veritable princes, even if only for a little while. I reserve my pity for the retired teachers and water meter readers and street sweeper and other public employees who have to worry every night that their pension plans might have been "invested" in some bizarre bubble scheme. People who are 70 years old, who have worked through their adult lives, shouldn't have to worry about this shit while people like Nick whine that they've been laid off from their "overpaid, underworked" jobs and may now have to live on -- well, on what the rest of the world lives on.

Tansy Gold, whose gig is more of the "underpaid, overworked" variety

[Hugin]

41. Hear, Hear... Tansy_Gold.

I have associates who've participated in the current muddle... and you know what? It hasn't sunk in with any of them yet.

They carry on day-to-day oblivious... Like some stroke of fortune is going to save them at the last second. They continue
living in the bubble. But, it's what they've been -programmed- to do, by the media, by the myths and especially by those
who's greed depends on these people continuing to stay asleep.

I don't see any last second reprieves. Sadly, I don't.

I did have some hope for the Stimulus Package, but, then they applied it in a way which broke Franklin's sage advice:
"Give someone a fish and they eat for a day, Teach someone to fish and they'll eat for a lifetime." It was a Stimulus
Package for the Supply-side.

The Stimulus Package should have BOUGHT SOMETHING! ANYTHING! BUILD SOMETHING! PAY FOR SOME BASIC RESEARCH! (The only caveat being... It should have used a broad swath of Americans. Oh, and they can't use the 'usual' bidders. Must be new
blood, like the State Universities or maybe the Civil Service FOR ONCE!) But, *sigh* it wasn't to be... Right down
the right winger line this one went. All it did was what it was intended to do, BUY TIME!

:rant:

[Dr.Phool]

45. Reminds me of some of my days in LTV Steels Railroad Division.

Being a union official, I came into contact with more mid, and upper management than most people. I saw layers of management that did absolutely nothing. I remember one guy in particular, who was sent in to oversee the merger between LTV and Republic Steel's railroads. His "rabbi" at the top left to take a job with another railroad and he was relegated to a corner office, where his job was to do the crossword puzzle, and drink vodka all day. At a six figure income.

I ran into him one day at a bar after I got off work (2 hours before his quitting time), and he was already smashed. He had heard something about a random drug and alcohol testing program that was going into effect for hourly employees. He was really confused when I told him it had been in effect for over a year.

[InkAddict]

57. So, what does one do when one is newly hired to work IT

magic on a Fed contract and for up to six weeks sit at a desk in a cube without so much as a terminal to access whatever it was you were to do, which should be arriving manana according to management, on the full taxpayer's dime.

I know one that quit, still no workstation in place, though I assume the spot was again filled by someone who thought it was just great to collect a paycheck without having to work. Hopefully, that other individual was given the tools to do the job America had paid for...course, he was probably an H-1B.

[Tansy_Gold]

74. I don't know, InkAddict, I truly don't know.

Hell, we had one guy there at Lincoln Savings, an older guy who had been there since before Keating. He was close enough to retirement age that RTC was keeping him on out of charity, so he could get whatever was left of his Lincoln pension. He sat in his office all day and played video golf. He didn't care, they didn't know, no one cared.

In another day and age, the cube rat without a work station wouldn't have existed. People wouldn't be hired unless they were actually needed to fill a real job instead of just a blank spot on an organizational chart. The person to whom they reported would have made sure there was a terminal, would have had work assigned for that person, would have delegated another employee to train the new person. That's the way it used to work.

Several years ago, I was sent out on a temp assignment by a major national agency. The fax I received informing me of the assignment told me I was going to be working on a large data entry project for the inventory control department of a local Quaker Oaks {sic} plant. I called the agency and asked, point blank, "Did you mean Quaker Oats?" And the person replied, "No, it says here on the sheet, Quaker Oaks." "But," I insisted, "there is no Quaker Oaks plant in that location. The facility is a division of Quaker Oats."

"Oh, no," this woman sternly informed me, "I got the form right from them and it says Quaker Oaks."

It didn't really matter. I showed up at the facility per the work order and there was NOTHING FOR ME TO DO. The person who had requested a temp from the agency HAD GONE ON VACATION. And she had gone on vacation because THE INVENTORY CONTROL SOFTWARE HADN'T BEEN INSTALLED for the data entry project and anyway, THE WAREHOUSE HADN'T COMPLETED THE PHYSICAL INVENTORY FROM WHICH THE DATA WAS TO BE ENTERED. I sat at a desk with nothing to do for two days before they finally shipped me out to the warehouse to help with the physical inventory. Now, I ask you, do I look like the kind of person who has a working knowledge of repair and replacement parts for an automated beverage bottling operation? Not hardly, but that's what I was put to work doing, until I finally found someone high enough up in the chain of command and I said, "Look, you've got a multi-million-dollar piece of equipment here, and I don't have the faintest idea what these parts in these bins are, and I don't want to be responsible for some highly toxic lubricant accidentally getting mixed with the Gatorade on the line, so I think I'll just head on home if you don't mind. Call me when you have the data entry job ready, okay?"

But what's happened is that "personnel" functions have morphed into "Human Resources," and hiring isn't done by the people who need the work done; it's done by someone ten steps removed from the job. And to compound the problem, the culture of financialization has created a pervasive and pernicious attitude that it's ALL RIGHT to sit on your ass and do nothing and collect a fat paycheck. In fact, it's more than ALL RIGHT, it's AWWWWLLLLLL RRRRRRRIIIIIGHT, DUDE! The goal is no longer to have a good job, to accomplish something, to earn the paycheck; the goal, the STATED goal, is to get the biggest paycheck for the least work. The "overpaid and underworked" are the heroes, the role models; the overworked and underpaid are the chumps, the losers.

And so here's another example from Tansy's huge store of workplace anecdotes:

Second day of training on the new gig went well today. There were eight of us in this class when it started yesterday; the one who had the most prior experience and was held up as the most likely to succeed proved to be the first drop-out. The people doing the pre-employment screening did a lousy job because they only looked at her superficial qualifications; in a real five-minute interview they'd have known she didn't have the foundational skills and knowledge to do the work. So the trainer was stunned to find out her "star pupil" had withdrawn, but fully half the rest of us shrugged and said we as much as knew she couldn't cut it. How did we know? Because we treated her like a real person, listened to her questions and knew they came from a well of unknowledge. We saw her confusion when she tried to accomplish tasks the rest of us could do in our sleep.

Insignificant Other asked me why I cared, what impact did this have on me directly. And I answered that the time spent trying to explain basics to this woman yesterday was time the rest of us were NOT being trained to do the work. The time spent today speculating on why she dropped out was additional time lost from our training. And since the sum total of our training will directly affect our ability to make money, yes, it impacted me and yes, I cared. ISO acknowledged the validity of my assessment.

It's not just the outrageous compensation paid to CEOs and other high level execs; that's just a symptom of the larger disintegration of the economy. Corporate mega-mergers leave little room for the necessary micro-management of individual operations, like the maintenance department at the local Quaker Oaks {sic} bottling plant. So a few CEOs get demoted or fired, but they take their millions and billions with them, and the problems are never really solved because the new CEOs and COOs and CFOs and BFDs have been nursing at the same tit and all they want is to get theirs while the gettin's good.

Enough, enough. I've been in a small room all day with very little in the way of intelligent conversation. I'm guzzling my fill this evening and hoping it will get me through tomorrow.


Tansy Gold

[Ghost Dog]

49. Yes, yes. Schadenfreude from the sick-at-heart. The guillotine for the truly guilty. n/t

[ozymandius]

12. Intel, IBM Get Solar Exposure

Intel and International Business Machines have joined the parade of technology companies making alternative-energy plays, announcing Monday separate efforts to put their manufacturing smarts to work cranking out solar cells.

Intel (nasdaq: INTC - news - people ) and IBM (nyse: IBM - news - people ) already have plenty of relevant manufacturing and materials know-how, with IBM's PowerPC processors competing with Intel's ubiquitous x86 processors to power high-end servers.

IBM and Intel, however, are taking very different approaches, with Intel tapping into its long experience working with slabs of silicon and IBM pursuing a technology based on thin, flexible films developed at its research arm.

Intel said Monday it will spin off a new venture, dubbed SpectraWatt, that will build a factory in Oregon in the second half of this year and begin sending solar modules to customers by the middle of next year.

.....

IBM's approach is based on a process developed by IBM Research to crank out so-called thin-film solar cells based on copper, indium, gallium and selenide.
.....

The goal, according to IBM, is to create solar cells that convert 15% of the energy that hits each cell from sunlight into useable electricity, up from a range of between 6% and 12% today.

http://www.forbes.com/technology/2008/06/16/solar-intel-ibm-tech-cx_bc_0616techsolar.html

[UpInArms]

14. Goldman close to $7 billion SIV restructure: source

http://news.yahoo.com/s/nm/20080617/bs_nm/goldman_siv_dc

LONDON (Reuters) - Goldman Sachs Group Inc is near completing the rescue of a $7 billion structured investment vehicle, a source familiar with the matter said, boosting hopes for a revival in the market for mortgage assets in which the SIV invested.

"I can say the FT report is correct," the source told Reuters, referring to a story in Tuesday's Financial Times.

The structured investment vehicle or SIV, formerly run by hedge fund Cheyne Capital, was invested in asset-backed securities and collateralized debt obligations (CDOs).

<snip>

SIVs hit trouble last August when liquidity in the credit markets dried up, preventing them from raising funds and also causing the value of their assets -- mainly bank debt and asset-backed securities -- to drop.

<snip>

Goldman will also restructure a number of other failed vehicles, some of which were formerly run by hedge funds and others by Standard Chartered Bank (STAN.L) and Germany's IKB (IKBG.DE) bank, the Financial Times said.

...more at link...

[UpInArms]

22. Goldman analysts see US banks needing $65 bln new capital

01. Goldman analysts see US banks needing $65 bln new capital
8:16 AM ET, Jun 17, 2008

02. New capital to be more costly for US banks: Goldman analysts
8:16 AM ET, Jun 17, 2008

03. Goldman analysts trim average US bank estimate by 9%
8:16 AM ET, Jun 17, 2008

04. Goldman analysts "still cautious" on US regional banks
8:16 AM ET, Jun 17, 2008

(are these analysts including Goldman Sachs in this "need"?)

[ozymandius]

23. Looks like Bernanke and Paulson have their orders.

Fire up the printing presses and set an auction date. Ya know - the usual.

[UpInArms]

20. U.S. stock futures up as rate-rise view called too much

http://www.marketwatch.com/news/story/us-stock-futures-up-rate-rise/story.aspx?guid=%7B4FF4CDC2%2D149E%2D445A%2DA99E%2DB182FF818002%7D&dist=TNMostRead

LONDON (MarketWatch) -- U.S. stock futures rose on Tuesday after multiple newspaper reports that investors have priced in rate rises too aggressively, with results from Goldman Sachs also in the spotlight as investors wait to see if the brokerage that has historically topped analyst earnings estimates can do so this quarter as well.

S&P 500 futures rose 5.8 points to 1,365.80 and Nasdaq 100 futures rose 7 points to 1,997.25. Dow industrial futures rose 43 points.

U.S. stocks ended Monday with major indexes split, as a broker downgrade of Verizon Communications and AT&T sent the Dow industrials 38 points lower, while the S&P 500 ended up a fraction of a point and Nasdaq Composite added 20 points amid indications the Sirius Satellite Radio and XM Satellite Radio deal is nearing completion.

After Lehman Brothers' as-expected $2.8 billion loss on Monday, Goldman Sachs (GS) continues investment-banking reporting season on Tuesday.

So far, Goldman has avoided big losses from the mortgage-fueled credit crunch. But concerns have increased recently that the brokerage firm may not have emerged from its fiscal second quarter completely unscathed.

Goldman had $51.9 billion of loans and securities backed by mortgages and other assets at the end of February.

...more...

[Dr.Phool]

30. Where is a good, safe place to stash some money?

Something with a half-decent return, is highly liquid.

We just pulled my wife's 401k out of Key Bank. It was mostly in Key stock, and since she's 59 1/2, she said fuck it, pay the tax (20%), since we'll have to eventually anyway. Such a deal, since the stock has dropped over 30% since it closed last Friday, when they calculated her payment.

Any good suggestions where to put this now?

[truthisfreedom]

31. Spare mattress?

[safeinOhio]

46. Cash is King

as long as it's not green and says "In God We Trust". With that in mind, spread it out.

[DemReadingDU]

32. I'm in the same boat

I read somewhere that the return OF capital is more important than the return ON capital.

In other words, we want to preserve what we have, and not lose more. I'm looking into buying short term Treasury Bills from the government. Heck, if the U.S. Treasury goes bankrupt, we'll all be marching in Washington with pitchforks.

You can buy Treasuries (Bills, Notes, Bonds, TIPS) directly from the government...
http://www.treasurydirect.gov/


P.S. I feel your your loss in Keybank, I've lost a bundle with Fifth Third.

:(


edit: As ozy says below, I am not giving finanacial advice, just suggesting another place that you might want to check out. It may, or may not, fit your family's investment needs. I've seen other forums where others have mentioned buying Treasuries, and am also checking this out.

edit again: And for irony, Keybank is now offering 4-year CD for 5%.

[Dr.Phool]

47. They just diluted their stock with a $6 bn offering.

We got out of that just in time.

[ozymandius]

35. Dear Dr. Phool,

This question has not come up for awhile. With all respect, no one should offer explicit financial advice on the thread. What can be said, however, are shared investment experiences. I have spoken in recent years about my horrendous experience with Vanguard investments. Others here love the metals markets.

If you want advice on investing then anyone here can suggest places where you may start looking. Social equity funds are among those recommended to/by the progressive community here.

I hope you understand the ethical limits to what we do here.

:hi: Ozy

[Dr.Phool]

40. Yeah, I understand. I'm not looking for anything specific.

The whole goddamned market is so screwed up right now. I think preservation of equity is the game now.

In this household, she wants to spend it. Thus, the instant liquidity thing. I'm trying to find ways for her to hold onto it.

[ozymandius]

43. You bet. Protecting equity is the elusive target.

My mother, a retired educator, is dealing with this now. Her personal stock portfolio has taken a hit during the Bush years. She had diverted money into CDs - just trying to earn enough money off the interest to keep up with the reported (though we here know differently) rate of inflation.

I liquidated stocks years ago and sent a good deal of it into money market funds before Greenscam stared slashing rates that rewarded people like him and punished people like me. The nature of the investing world is so bizarre now. One cannot hold onto an investment for too long, it seems. Money stampedes hither and yon while looking for safety.

[antigop]

50. True story -- NOT to be taken as investment advice

The following is NOT investment advice. Do your due diligence.

My partner and I were discussing what to do as the subprime crisis unfolded.

Half-jokingly, I said, "Invest in a tent manufacturer."

Shortly after that, the news reported the tent city in California:
http://features.us.reuters.com/cover/news/D8C99CD0-AF35-11DC-9E67-616F0DA5.html

<edit to add> not a joking matter....

[DemReadingDU]

53. Very sad, and more to come in other places

some videos of tent cities in California
http://globaleconomicanalysis.blogspot.com/2008/06/tent-city-usa.html

[TalkingDog]

56. We had dinner with friends on Sat. eve.

One, let's call her Miz B, is an administrator in a crisis care organization, usually focusing on mental health issues. But drug dependency and/or other situations that lead to crisis/health events are addressed.

They been working with a local charity specializing in the homeless, who shall remain nameless because the State can't readily fulfill it's requests for assistance based various red tape and bureaucracy. So Miz B is a kind of back door to assistance from the state, since a number of those homeless also qualify for crisis care.

She said the number of homeless has exploded in the past month. Yes, the usual folks with mental illness/disability and/or drug problems. But also middle and upper middle class people. Unlike her spouse, who is prone to exaggeration and hyperbole, Miz B is fairly level-headed when it comes to her clientèle. That said, she was telling us about a woman applying for a place to live, previously having been living "around" but wearing upscale clothing and carrying a coach bag with her makeup and daily beauty routine items.

She finally had to pair her up with a large, street-wise resident for a bit of gentle mentoring because the woman kept saying in a rather conversational tone of voice that she'd, "...never been around this many black people before."

And among the other 200 applicants (up from the usual half a dozen) were middle management types who had lost literally everything, including families when they could no longer support them.

I know I keep saying this, but it's because I'm so flabbergasted: We are in an area that has been less impacted by the downturn. I literally can't imagine how much worse it is in other place.

Sad. Very sad.

[DemReadingDU]

62. I'm flabbergasted too

that a well-to-do lady carrying a coach bag with her makeup and daily beauty routine items, has no family or friends.


I don't carry any such name-brand items, yet I know I could find support and help with someone in my family. They don't even live near me, but if it were that bad, they would come and get me.

But who am I to question anyone looking for help.


edit - it really must be bad out there when even families can't help out either.

[Hugin]

64. My impression is...

Relying on Family or Friends is also an Ethic lost in much of Modern America as well.

I've seen people neglect their own Parents well-being because it would negatively affect their own fragile illusionary
'standard of living'.

It's the saddest thing imaginable. ;(

[abelenkpe]

68. family would be nice and welcome

but they are all on the opposite coast. And my sister's familiy's needs monopolize my parents time, energy and finances. My hubby's family is gone. We are a fragile little branch far away from home. Sadly, I don't think it's really that uncommon in a big city either.

[kineneb]

73. DIY "Families"

My local "family" are really good friends who also live far from their biological families (often for good reason). We all need to reach out to friends and build our own extended "families".

If everything goes to hell, I may have a tent village in my back yard, but at least my friends will not be left to wander the streets.

[JNelson6563]

72. Think tangibles

Personally I've been long on gold for years (like when it was under $400 and oz) but am also fond of valuable stones and other portable tangibles. As my fellow Marketeers know, I think it is preferrable these days if your assets are a.) easy to stash within clothing and smuggled out when fleeing the country or b.) desirable enough to have a the seired affect on our new (probably Chinese) overlords when they arrive.

So, in a nutshell I recommend the medieval financial security plan. Be ready to flee or make some serious bribes in times of serious crisis.

Just my .0125 worth.

Julie

[ozymandius]

37. Markets are open for bidness.

9:41
Dow 12,285.37 Up 16.29 (0.13%)
Nasdaq 2,474.01 Down 0.77 (0.03%)
S&P 500 1,362.85 Up 2.71 (0.20%)
10-Yr Bond 4.2030% Down 0.0420
NYSE Volume 193,868,560
Nasdaq Volume 105,244,090

[Ghost Dog]

48. LEAP/E2020 Summer 2008 Alert : The world plunges into the heart of the global systemic crisis

LEAP/E2020 Summer 2008 Alert – July-December 2008: The world plunges into the heart of the global systemic crisis
The upcoming six months are in fact the core of the unfolding crisis…

Global overview: Eight trends mark the coming semester:

1. A Dollar in distress (EUR 1 = USD 1.75 at the end of 2008): Panic-fear of a US currency and economy collapse eats into the American collective psyche. Bernanke, Paulson and Bush bark but the USD will not deviate one iota from EUR 1 = USD 1.75 at the end of 2008, according to the forecasts of LEAP/E2020…

2. Global financial system: An impossible requirement – placing Washington under international trusteeship – provokes the system's break. Washington's decision to raise the bids for the return to a « strong Dollar » bears the seeds of an acceleration of the global financial system's breaking process…

3. European Union: The periphery sinks into the recession, the Eurozone only slows down. As regards the European Union, the situation will be contrasted, as anticipated many times by LEAP/2020…

4. Asia: The « double whammy » inflation/export-collapse. Economies based on cheap costs and exports, hit by inflation and recession (US) or economic slowdown (EU) in two major export markets, these are the characteristics of the situation for Asian countries in the coming six months…

5. Latin America: Difficulties increase but growth remains steady in most parts of the region, Mexico and Argentina in crisis. The Very great US Depression will have very specific direct consequences on all countries of the area, namely in Central America and the North of South-America.…

6. Arab world: Pro-Western regimes go adrift / 60 percent risk of socio-political explosion on Egypt-Morocco axis. According to LEAP/E2020, the global systemic crisis contributes to weaken Arab states' pro-Western regimes …

7. Iran: 70 percent probability of an attack by October 2007 confirmed. The nomination of Barak Obama as the Democrat opponent to John McCain props up the risk…

8. Banks/Speculative bubbles: When bubbles collide. World banks, American and British in particular, will be trapped between 4 bubbles, in fact now four bombs…

...


Washington's decision to raise the bids for the return to a « strong Dollar », by compelling Ben Bernanke to intervene, bears the seeds of an acceleration of the global financial system's breaking process (2).

Ben Bernanke is indeed the last wall before the largest US currency and asset owners become fully aware of the fact that Washington no longer has the means of its monetary policy. What used to be a deliberate policy of currency drop (when it was decided to stop publishing M3 in March 2006, as announced by LEAP/E2020) in order to reduce the country's trade deficits and the real value (for themselves) of the their debt (labelled in Dollar), turned against its perpetrators entailing a major outflow (capital outflow, steadiness of trade deficits, soaring inflation...). The « Bernanke » card is the last « psychological » card Washington can play. The fact of using it proves that US leaders have reached the last limits of what they can do to hold back their partners into the system founded after 1945 and based on the US economy and currency (3).

In a few weeks time (after the next G8- and other organisations-meetings have taken place), when it will be confirmed that there is no way to stabilise the US currency (not to mention the eccentric idea of pushing it up) because the US economy is sinking always deeper into the recession and because the world is already filled with US Dollars no one knows what to do with, then the global financial system will burst out in various sub-systems trying to survive as much as they can before a new global financial equilibrium is found (4). As he is embarking on this road to nowhere, consciously or not, voluntarily or not, Ben Bernanke is signing the end of the current financial system. The return to a “strong Dollar” is a bit like the « liberation of Iraq » : wishful thinking turning into a nightmare.

/more... http://www.leap2020.eu/GEAB-N-26-is-available!-LEAP-E2020-Summer-2008-Alert-July-December-2008-The-world-plunges-into-the-heart-of-the-global_a1800.html

[Robbien]

51. Dubai house prices up 42% in three months

House prices in Dubai have risen by 42 per cent in the last three months, according to property consultant Colliers International, which officially launched its Dubai House Price Index (HPI) earlier today.

The increase coincided with an announcement by the economy minister Sultan bin Saeed al Mansouri that inflation in the UAE had accelerated to 11.1 per cent in 2007.

The new housing index tracks the sales prices of residential properties in Dubai every quarter. The increase between the first quarter last year and the first quarter 2008 was 78 per cent. . .


Among the other reasons for the latest increase are the 11 per cent growth of Dubai’s GDP, competitive interest rates (6.9 per cent to eight per cent) offered by mortgage providers, increasing construction costs – expected to rise by over 18 per cent by the end of the year — as well as the subprime crisis in the United States and Europe.

http://www.vistadubai.com/dubai-news/news-bulletin-317.html

[TalkingDog]

52. I think Tom Tomorrow is peaking in at the SMW

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3466762

[Hugin]

55. Tink?

Tink has gone over to the dark side. :scared:

Edit: Nice LBD... tho. 8)

[Dr.Phool]

60. Reminds me of a guy who came into my restaurant a few months ago.

He was an elderly gentleman, probably late 60s or early 70s. Well dressed, and he ordered a slice of pizza to go. As I was heating it, and adding the toppings, he started bad-mouthing Democrats, and the liberal media, finally asking, "How in the world can some people claim we're in a recession, when this country has 96% employment?"

I was biting my tongue very hard. Then I overcharged the prick.

If he had seen how many more people had started walking through the door, looking for jobs that month, he might have a clue.

[DemReadingDU]

63. Typical, they aren't paying attention, clueless

He probably didn't even realize you overcharged him either.


Spouse and I think that most Republicans have lost their critical thinking skills. Those Republicans that we know, think that the people losing their good GM factory jobs, can just go work at Wal-Mart to support their family.


:eyes:

[Dr.Phool]

69. A friend of mine has an Italian place in the Flats in Cleveland.

We started on the railroad the same day. He calls me up every couple of weeks after he's had his head filled up by Limpballs.

He's not too bright, but he knows the restaurant business well, and makes good food. I guess the Hustler Club bought his last location out, so he's re-opening a few blocks away. He wanted me to invest in his new place (translation: I ran out of money and the banks ain't loaning to anybody anymore.) I said nope, been down that road with him before, and I ain't gonna do it from 1500 miles away.

But, he listens to right-wing radio all the time. Dislikes liberals, hates Kucinich, blames unions for Clevelands problems(even though he's collecting a nice union pension).

I can't figure out what drives these people.

I'll be in Cleveland for a few days next month. I'll have to stop in and bust his balls a little. And get a free meal.:evilgrin:

[ozymandius]

66. By his age, he must be the prototype from the factory

where most of the conservative dimwits I know were assembled. Plus I wonder if he left a tip in your jar?

[Dr.Phool]

70. Hell no.

And if he paid attention when he left, he'd have noticed a few businesses on the same street, including 3 restaurants that had gone out of business in the last couple of months.

[dweller]

67. same thing in the rest. i'm working

except the owner is the clueless repug: and he spouts those same talking points to his customers. A little elderly lady comes in almost daily like clockwork. They sit and chat about MCSame and Huckleberry, etc, and one day the 'blaming the liberals' started bouncing about between them. I had made her a nice little salad, as she had ordered, and delivered it while they were commiserating, with my remark
"well, at least this liberal makes you some healthy food :D , we must be good for something"

no response from either of them.
dp

[TrogL]

59. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



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




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

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

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

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

2008-05-06 Tuesday, May 6 0.996413 USD
2008-05-07 Wednesday, May 7 0.998004 USD
2008-05-08 Thursday, May 8 0.985319 USD
2008-05-09 Friday, May 9 0.993838 USD
2008-05-12 Monday, May 12 0.996314 USD
2008-05-13 Tuesday, May 13 1.0004 USD
2008-05-14 Wednesday, May 14 0.998203 USD
2008-05-15 Thursday, May 15 1.0004 USD
2008-05-16 Friday, May 16 1.00341 USD
2008-05-19 Monday, May 19 1.00867 USD
2008-05-20 Tuesday, May 20 1.00725 USD
2008-05-21 Wednesday, May 21 1.01626 USD
2008-05-22 Thursday, May 22 1.0141 USD
2008-05-23 Friday, May 23 1.01184 USD
2008-05-26 Monday, May 26 1.01184 USD
2008-05-27 Tuesday, May 27 1.00685 USD
2008-05-28 Wednesday, May 28 1.00878 USD
2008-05-29 Thursday, May 29 1.01307 USD
2008-05-30 Friday, May 30 1.00624 USD
2008-06-02 Monday, June 2 0.998901 USD
2008-06-03 Tuesday, June 3 0.994926 USD
2008-06-04 Wednesday, June 4 0.985707 USD
2008-06-05 Thursday, June 5 0.980873 USD
2008-06-06 Friday, June 6 0.981643 USD
2008-06-09 Monday, June 9 0.978186 USD
2008-06-10 Tuesday, June 10 0.976467 USD
2008-06-11 Wednesday, June 11 0.983284 USD
2008-06-12 Thursday, June 12 0.977517 USD
2008-06-13 Friday, June 13 0.972573 USD
2008-06-16 Monday, June 16 0.979432 USD


Current values

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

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9805 0.9827 0.9804 0.9804 +0.0031 +0.32% 
CD.M08 Jun 2008 0.9800 0.9800 0.9800 0.9812 +0.0044 +0.45% 
CD.U08 Sep 2008 0.9782 0.9812 0.9782 0.9812 +0.0054 +0.55% 
CD.Z08 Dec 2008 0.9800 0.9800 0.9800 0.9760 +0.0051 +0.52% 
CD.H09 Mar 2009 0.9757 0.9757        0.9759 +0.0051 +0.52% 
CD.M09 Jun 2009 0.9995 0.9995        0.9757 +0.0051 +0.52% 
CD.U09 Sep 2009 0.9865 0.9865 0.9865 0.9755 +0.0051 +0.52%  

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

Market          Open    High    Low     Last    Change   Pct 
AUSTRALIAN $/CANADIAN $ (CME:ACD)
ACD.M08 Jun 2008 0.9619 0.9619 0.9619 0.9619 -0.0032 -0.33% 
BRITISH POUND/US$ (SMALL) (NYBOT:MP) 
MP.M08.E Jun 2008 (E) 1.9458 1.9458 1.9420 1.9635 +0.0176 +0.90% 
EURO/BRITISH POUND (NYBOT:GB)
GB.M08.E Jun 2008 (E) 0.78790 0.78860 0.78790 0.78770 -0.00085 -0.11%    
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.M08.E Jun 2008 (E) 165.79 165.79 165.79 167.43 +1.43 +0.85%     
EURO/US$ (SMALL) (NYBOT:EO)
EO.M08.E Jun 2008 (E) 1.5352 1.5352 1.5327 1.5467 +0.0122 +0.79%   

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

The September Canadian Dollar was higher overnight due to short covering and is trading above the 10-day moving average crossing at 97.79. Stochastics and the RSI are oversold, diverging but are neutral to bearish signaling that sideways to lower prices are still possible near-term. If September extends this month's decline, April's low crossing at 96.74 is the next downside target. Closes above the 10-day moving average crossing at 97.79 would signal that a short-term low has been posted. First resistance is the 10-day moving average crossing at 97.79. Second resistance is last Monday's high crossing at 98.41. First support is last Tuesday's low crossing at 96.82. Second support is April's low crossing at 96.74.


Analysis

Air Canada announced the loss of 2000 jobs at year-end due to cancelled routes due to high oil prices. The economics are really simple. If the plane isn't pretty much full, there's no point in leaving the ramp.

[ozymandius]

65. whompings on Wall Street at 2:11

Dow 12,206.31 Down 62.77 (0.51%)
Nasdaq 2,472.20 Down 2.58 (0.10%)
S&P 500 1,356.85 Down 3.29 (0.24%)
10-Yr Bond 4.2230% Down 0.0220
NYSE Volume 2,268,800,000
Nasdaq Volume 1,199,454,620

2:00 pm : The major indices are trading with modest losses. Decliners outpace advancers by 6-to-5 on the NYSE and by 7-to-5 on the Nasdaq.

The Nasdaq is outperforming on a relative basis, thanks to strength in several large-cap names. Apple (AAPL 181.25, +4.41), Research In Motion (RIMM 143.24, +2.26) and Amazon.com (AMZN 84.16, +2.43) are seeing some buying interest this session.DJ30 -59.03 NASDAQ -2.70 SP500 -2.86 NASDAQ Dec/Adv/Vol 1627/1155/1.15 bln NYSE Dec/Adv/Vol 1640/1382/619 mln

1:30 pm : The major indices remain in the red, but pare some of their losses in a broad-based recovery effort.

Mid-cap stocks are outperforming their large-cap counterparts, as demonostrated by the 0.4% rise in the S&P 400. The index is benefiting from a rise in shares of energy companies, with notable strength in Denbury Resources (DNR 38.61, +2.61) and Newfield Exploration (NFX 67.15, +3.23).DJ30 -54.88 NASDAQ -3.75 SP500 -2.51 NASDAQ Dec/Adv/Vol 1636/1134/1.08 bln NYSE Dec/Adv/Vol 1647/1375/574 mln