STOCK MARKET WATCH, Tuesday September 9

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday September 9, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 134
DAYS SINCE DEMOCRACY DIED (12/12/00) 2788 DAYS
WHERE'S OSAMA BIN-LADEN? 2513 DAYS
DAYS SINCE ENRON COLLAPSE = 2804
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.
$1 USD = EUR 1.06678
$1 USD = JPY 116.6200

AT THE CLOSING BELL ON September 8, 2008

Dow... 11,510.74 +289.78 (+2.58%)
Nasdaq... 2,269.76 +13.88 (+0.62%)
S&P 500... 1,267.79 +25.48 (+2.05%)
Gold future... 802.50 -0.30 (-0.04%)
30-Year Bond 4.27% -0.01 (-0.16%)
10-Yr Bond... 3.67% +0.01 (+0.14%)






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

The Stars are Aligning - But For What?
BY ROB KIRBY

Fannie and Freddie were finally nationalized on Sunday, September 7, 2008 – a date that may very well live in infamy. Shareholders of the mortgage behemoth mortgage giants have been effectively wiped out.

By Glenn Somerville and Mark Felsenthal

WASHINGTON (Reuters) - The U.S. government on Sunday seized control of mortgage finance companies Fannie Mae and Freddie Mac in an aggressive move to help the distressed U.S. housing market and economy.

Officials were concerned mounting losses at the two companies, which own or guarantee almost half of the country's $12 trillion in outstanding home mortgage debt, was sapping their vitality and threatening to undermine them at a time other sources of housing finance have largely run dry.

"Our economy and our markets will not recover until the bulk of this housing correction is behind us," Treasury Secretary Henry Paulson said at a news conference. "Fannie Mae and Freddie Mac are critical to turning the corner on housing.”

The decision to take control of the companies, which have $1.6 trillion in debt outstanding, and place them into a conservatorship under their regulator could amount to the largest financial bailout in U.S. history. The Treasury Department, which is taking an equity stake in the two firms, said there was no reason to expect that taxpayers would have to shoulder losses.

Folks should appreciate and understand that the Fannie / Freddie bailout are being conducted with the resources of the U.S. Treasury and not the Federal Reserve. The Federal Reserve’s balance sheet simply would not allow it.

Ladies and gentlemen, I would contend that the U.S. Treasury’s balance sheet cannot either.

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

[Hugin]

6. "We are now working without a net"...

as the circus folks say.

:/

[ozymandius]

9. a move choreographed by malicious stumblebums

This is uncharted territory. Never has a huge amount of liability moved into Treasury's balance sheet in the blink of an eye. With 130+ days left in this junta's regime, I'll expect them to act aggressively to inflict as much damage to the future of these companies and to the Federal balance sheet as possible.

[Hugin]

10. A new pool...

When during those 130+ days will a phrase such as "We can't afford; Social Security, Medicare/Single payer health-care,
Education... Etc." be uttered.

I'll take a week after the elections.

[paparush]

27. Exactly. Grover's bathtub is filling up quickly.

Between the war and bailing out X, Y, Z, and PDQ, Bush is going to turn out his pockets and say, "That's all folks.."

[Dr.Phool]

28. I think some variation of that was said yesterday.

Something about postponing tax increases for the rich.

Thus sayeth Saint Obama. They are trying to blow this one big time.

Say hello to VP Mooselini.

[Ghost Dog]

41. That does look like the way it is going to go, I'm afraid, over there.

Although the comparison is no doubt insulting, today, to Mussolini, who invented, or at least was the first to put into practice, Fascism, and inspired many, very many, in the process, and maybe continues to do so.

So he was a creative man, and about him there was a certain aura of greatness, for a while, and he may have truly believed he was doing his best for his people.

Unlike, in every way, (get it while you can) La Mooselini.

[antigop]

45. Yep. Mission Accomplished. n/t

[Dr.Phool]

30. It seems they're working off a checklist.

Start new cold war....check

Bankrupt treasury.....check

Invade Iran......Invade Iran....working on it

Invite Nancy to X-mas bash.....check

[DemReadingDU]

35. Yet, they're pushing Sarah Palin

Almost as if they're counting on silly Americans who are voting Republican to vote for Sarah instead of McCain.

So if the Republicans keep checking off their list, it just might be Sarah who ends up as President.


:crazy:

[Dr.Phool]

43. It's as if the chimp wasn't dumb enough for them.

[Demeter]

18. This Is Pure Ignorance

As in ignoring the total lack of income even for those with jobs, who have had no reward for their increased productivity FOR 40 FREAKING YEARS! Let's not even discuss the millions unemployed, who have few hopes of finding anything renumerative aside from the army, the drug business, or robbery.

And then there's the inflation, which has vanished with the judicious use of editing....

[Demeter]

19. The Power of De By PAUL KRUGMAN

http://www.nytimes.com/2008/09/08/opinion/08krugman.html?em


Save the home lenders, save the world? If only it were that simple.

The just-announced federal takeover of Fannie Mae and Freddie Mac, the giant mortgage lenders, was certainly the right thing to do — and it was done fairly well, too. The plan will sustain institutions that play a crucial role in the economy, while holding down taxpayer costs by more or less cleaning out the stockholders.

But Sunday’s action needs to be seen in a larger context — that of the attempt by the Federal Reserve and the Treasury Department to contain the fallout from the ongoing financial crisis. And that’s a fight the feds seem to be losing.

We’ve come a long way from the days when Alan Greenspan declared a national housing bubble “most unlikely.” There was indeed a bubble, and since it popped two years ago home prices have fallen faster than they did during the Great Depression.

Falling home prices, in turn, have led to the much-feared phenomenon of “debt deflation.” Yes, deflation: prices are going up at the checkout counter, but the prices of assets, which are what matter for balance sheets, are dropping fast.

As the economist Irving Fisher observed way back in 1933, when highly indebted individuals and businesses get into financial trouble, they usually sell assets and use the proceeds to pay down their debt. What Fisher pointed out, however, was that such selloffs are self-defeating when everyone does it: if everyone tries to sell assets at the same time, the resulting plunge in market prices undermines debtors’ financial positions faster than debt can be paid off. So deflation in asset prices can turn into a vicious circle. And one consequence of what he called a “stampede to liquidate” is a severe economic slump.

That’s what’s happening now, with debt deflation made especially ugly by the fact that key financial players are highly leveraged — their assets were mainly bought with borrowed money. As Paul McCulley of Pimco, the bond investor, put it in a recent essay titled “The Paradox of Deleveraging,” lately just about every financial institution has been trying to reduce its leverage — but the plunge in asset values has nonetheless left these institutions with more debt relative to their assets than before.

And the numbers keep getting worse. In July 2007 Ben Bernanke suggested that subprime losses would be less than $100 billion. Well, last month write-downs by banks and other financial institutions passed the $500 billion mark — and the hits keep coming.

Which brings us to Fannie and Freddie. They’re the only big financial institutions that haven’t joined in the rush to deleverage, which is why they now account for about 70 percent of new mortgage loans. But their financial foundations have been undermined by debt deflation, even though their lending was more responsible than average. (A subprime borrower is basically someone whose credit wasn’t good enough to qualify for a Fannie- or Freddie-backed mortgage.)

So Fannie and Freddie had to be rescued — otherwise debt deflation would have gotten much worse. Indeed, their financial troubles have already caused problems for would-be home buyers: mortgage rates are up sharply since earlier this year. With the federal takeover, which removes the pressure on the lenders’ balance sheets, we should see mortgage rates drop again — which is definitely good news.

But is it enough? I doubt it.

The current U.S. financial crisis bears a strong resemblance to the crisis that hit Japan at the end of the 1980s, and led to a decade-long slump that worried many American economists, including both Mr. Bernanke and yours truly. We wondered whether the same thing could take place here — and economists at the Fed devised strategies that were supposed to prevent that from happening. Above all, the response to a Japan-type financial crisis was supposed to involve a very aggressive combination of interest-rate cuts and fiscal stimulus, designed to prevent the crisis from spilling over into a major slump in the real economy.

When the current crisis hit, Mr. Bernanke was indeed very aggressive about cutting interest rates and pushing funds into the private sector. But despite his cuts, credit became tighter, not easier. And the fiscal stimulus was both too small and poorly targeted, largely because the Bush administration refused to consider any measure that couldn’t be labeled a tax cut.

As a result, as I suggested, the effort to contain the financial crisis seems to be failing. Asset prices are still falling, losses are still mounting, and the unemployment rate has just hit a five-year high. With each passing month, America is looking more and more Japanese.

So yes, the Fannie-Freddie rescue was a good thing. But it takes place in the context of a broader economic struggle — a struggle we seem to be losing.

[Tansy_Gold]

32. It starts with jobs. NOTHING fixes anything without jobs

And I don't mean paper-pushing financial sector funny money jobs. Real jobs making things real people really need and use.

Growing food.
Baking bread.
Building roads.
Manufacturing cars.
Making shoes.
Assembling appliances.
Sewing clothes.

And essential services:

Teaching school.
Healing the sick.
Delivering the goods.


Fixing Fannie and Freddie, putting them somehow or other under government control is NOT going to fix the economy. They aren't part of the real economy anyway. They're part of the problem.

The pyramid of our capitalist/corporatist/fascist economy is built on the foundation of the workers' money. As long as the workers, the masses, the goddess-blessed proletariat, are making money and paying taxes and buying things, there will be a constant physics-defying trickle-up flow. But nature of the beast is to suck as much of that flow as quickly as possible to the top. In doing so, however, the bottom layers, the foundation, are being crushed. The jobs are gone, there is no more (real) wealth being created, and so now the flow is not of money but of blood.

Instead of fortifying the bottom layers, this take-over has only strengthened the VERY top. Not the mid-level support structure of stockholders; even they have been sacrificed to the gluttony of the very top.

I don't think there's any hope now for any kind of meaningful change, and woe betide a nation whose populace loses hope. We face either the catastrophe of a severe depression on a scale greater than the 1930s, or we face the cataclysm of the collapse of our entire national fabric.

All nations are artificial entities. The larger they are, and the more diverse the cultures within them, the more artificial they are, held together with ever more fragile bonds of community. We're already seeing the results of a fracturing into tribalism in this country with the flocking of ideologues to a perceived savior who offers to save them with anti-national identity politics. If Fannie and Freddie weren't too big to fail, neither is the US of A.


Tansy Gold, who should perhaps not have been reading Gitlin's "Twilight of Common Dreams" last night

[AnneD]

38. Morning Marketeers.....

:donut: and lurkers. Tansy, I could not have said it better myself. In fact I have been harping on this jobs thing for some time. I hope enough voters clean the wax out and start listening.

And since when did it become law that we (or our surrogates) can't ask someone running for office questions? Even if they were selected, they should be out running for office, not hiding under wraps.

And let's talk about this change thing. McCain is taking this straight from the Rove hand book. It is a Dem trump card and they are stealing it right out from under our noses. Obama need to start fighting. He needs be more direct in his jabs and stop dancing around McCain so much. It is about the economy and it is about jobs. It is about getting workers on the ground and voters to the polls. They need to do registration drive sand make sure folks are still on the rolls. Folks need to start putting bumper stickers on their car and not be afraid or ashamed of their choice.

Happy hunting and watch out for the bears.

[Dr.Phool]

48. From what I saw of Obama's interview with K.O. last night.

Obama is shadow boxing when he should be absolutely kicking ass. The fact that the polls show that this election is even close, is a sick joke.

I'm glad I sat this cycle out. I'll vote, but I won't do leg work for losers anymore. 2004 was too heartbreaking. 2006 was just as bad. I've learned to never underestimate the stupidity of the American people. K.O. quoted Truman in his interview with Obama. "How long does somebody have to keep hitting you in the head, before you figure out who's hitting you?"

[Tansy_Gold]

54. ....

There is no icon to illustrate how fully and how furiously I agree with you.

If nothing else, Hillary was a fighter.

[Demeter]

57. She Just Needed Some Better Guidance on Targets

[AnneD]

63. The fact that they hear so much of this from their base....

and the fact that they keep slipping in the polls should be telling them something. :mad: :grr: :banghead:

Lot's of little folks have put hard earned money into these campaign. The primaries were a warm up, this is the main event. You only dance around your opponent when you have the advantage and you need to distract him. And Barack NEVER had an advantage other than he was new and I thought he was smart. His fancy footwork is distracting some of the simple minded folks. They see absolutes. With Ali-he could have won with out the foot work-this is Obama's only shot.

Well, he better start acting like he is. McCain got a bigger bump off the RNC than Jamie Lynn Spears tummy (see, that's how you do that). I suspect that he will loose some of it but Barack, you were higher than McCain after he won the primaries. You let him turn this into a real race.

[AnneD]

66. And our theme today.....

Eye of the Tiger

or until the DEM's put on their big boy underware....

Rye or the Kaiser by Weird Al

Fat and weak, what a disgrace
Guess the champ got too lazy
Ain't gonna fly now, he's just takin' up space
Sold his gloves, threw his eggs down the drain

But he's no bum, he works down the street
He bought the neighborhood deli
Back on his feet, now he's choppin' up meat
Come inside, maybe you'll hear him say

Try the rye or the kaiser
They're on special tonight
If you want, you can have an appetizer
You might like our salami and the liver's all right
And they'd really go well with the rye
Or the kaiser

Never eats while on the job
He heard it's good to stay hungry
But he makes a pretty mean shish kabob
Have a taste, they were made fresh today

Try the rye or the kaiser or the wheat or the white
Maybe I can suggest an appetizer
Stay away from the tuna, it smells funny tonight
But you just can't go wrong with the rye
Or the kaiser

So today, his deli comes first
Steady dreams of his past days of glory
Goes in the back and beats up on the liverwurst
All the while you can still hear him say

It's the rye or the kaiser, it's
the thrill of one bite
Let me please be your catering advisor
If you want substitutions I won't put up a fight
You can have your roast beef on the rye
Or the kaiser

The rye or the kaiser
The rye or the kaiser
The rye or the kaiser

[flamingdem]

73. Obama is no loser. Obama/Biden is ahead by a substantial amount in Electoral Votes

[AnneD]

98. If I might remind you...

the votes aren't cast, and I don't trust these bastards not to cheat. If we want to win, it has to be by an uncheatable margine.

[Ghost Dog]

62. Nah. The US of A can't fail,

because the media most US cits watch or, occasionally, read won't allow the data to be published that would say it failed.

And rather than let the truth out, and pulling fingers out, the majority would choose war or any other form of massive destruction, while blaming someone else for it. Or praising the Lord.

Same applies to most Brits, too (except the praising bit).

[ozymandius]

2. Today's Reports

10:00 Pending Home Sales Jul
Briefing.com 1.0%
Consensus -1.4%
Prior 5.3%

10:00 Wholesale Inventories Jul
Briefing.com 0.5%
Consensus 0.7%
Prior 1.1%

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

[UpInArms]

25. TABLE-US chain store sales fell 0.1 pct last week-ICSC

http://www.reuters.com/article/economicNews/idUSNAT00435620080909

Shopping Centers and UBS Securities on Tuesday released the
following seasonally adjusted weekly data on U.S. chain store
retail sales.

WEEK ENDING  INDEX 1977=100  YEAR/YEAR CHANGE  WEEKLY CHANGE
                              (percent)         (percent)

Sept   6           494.7             1.9               -0.1%
Aug   30           495.1             2.2                0.1
Aug   23           494.7             2.3                0.2
Aug   16           493.8             2.4                0.1

The ICSC-UBS weekly U.S. retail chain store sales index is a
joint publication between ICSC and UBS Securities LLC. It
measures nominal same-store sales, excluding restaurant and
vehicle demand, and represents about 75  retail chain stores.

[ozymandius]

3. Oil falls below $106 in Asia as Ike weakens

SINGAPORE - Oil prices fell below $106 a barrel Tuesday in Asia on expectations a weakening Hurricane Ike may not disrupt Gulf of Mexico drilling and refining operations.

Light, sweet crude for October delivery fell 74 cents to $105.60 a barrel in electronic trading on the New York Mercantile Exchange midafternoon in Singapore. The contract inched up 11 cents overnight to settle at $106.34.

Investors bet Hurricane Ike won't cause significant damage to oil operations in the Gulf region after the storm weakened Monday from a Category 3 storm to a Category 1, with winds around 80 mph.

...

In other Nymex trading, heating oil futures fell 1.54 cents to $2.9977 a gallon, while gasoline prices dropped 3.03 cents to $2.72 a gallon. Natural gas for October delivery fell 16.7 cents to $7.36 per 1,000 cubic feet.

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

[ozymandius]

4. Saudi Arabia sets up clash at OPEC meeting

VIENNA (AFP) - Saudi Arabia expressed satisfaction with recent steep falls in oil prices on Tuesday and appeared in no mood to approve a cut in output by the OPEC group despite fears among some members of oversupply.

....

The Saudi position sets up a clash with other OPEC members at the meeting on Tuesday, where the 13-nation organisation is set to decide on its new production policy.

Iran, Venezuela, Libya and Algeria have all raised worries about oversupplying the market, suggesting a reduction in production by the group could be needed to help maintain prices.

http://news.yahoo.com/s/afp/20080909/ts_afp/opecenergyoil_080909092743

[willing dwarf]

7. Saudi Arabia, our good daddy pusher

wants to make sure that we've got our stuff, and we don't think about living without the needle in the vein.

Listened to Tom Friedman on Fresh Air yesterday. He makes the point that if we were to cope with $100 barrel oil (or more) and achieve energy independence, we'd have acheived real independence.

[DemReadingDU]

29. I heard Friedman too, while running errands

So I didn't catch the entire program. However, he seems to have become disillusioned with the Republicans who have only promoted using oil and more oil. Whenever a bill comes up in Congress about alternate forms of energy (wind, solar), The Republicans do whatever then can to defeat the bill. The Republicans want to "Drill Baby Drill", as if we could get oil tomorrow.


:mad:

[willing dwarf]

40. Drill Baby Drill

he observed was about as backward as if the Republicans had all been chanting like chanting " Let's all use IBM Selectrics!" on the eve of the computer revolution.

He observed that reps from Venezuela, Saudia Arabia and Russia were all probably high fiving each other when they heard "Drill Baby Drill."

[Roland99]

50. Oi at $104 qnd RBOB gas at $2.69 (down $0.09)

Gas here just shot up to $3.89!!

We are now $1.20/gal over wholesale when just 6 months ago we averaged $0.50 - $0.60 over!

[Demeter]

58. Speedway at $3.95/ Everyone Else at $3.62

Speedway does that once in a while--tries to recoup or something for a day or so....

[ozymandius]

5. 2008 a tough year so far for hedge funds

BOSTON - The economic downturn has spread to hedge funds, according to survey results that show slowing growth in assets at the exotic investment vehicles.

Hedge fund assets grew by 4.3 percent from January through June, the smallest growth for any six-month period in the six years that the magazine Absolute Return has been tracking such data.

.....

Since January, 35 percent of the firms have lost assets, because of falling investment performance amid recent market declines, and more investors taking money out of funds than putting money in.

http://news.yahoo.com/s/ap/20080909/ap_on_bi_ge/hedge_funds

---

Can anyone spare some sympathy? I'm all out.

[ozymandius]

8. McCain May Privatize Fannie, Freddie; Obama Sees Federal Role

Sept. 9 (Bloomberg) -- John McCain and Barack Obama agree the Treasury needed to step in to rescue Fannie Mae and Freddie Mac. They disagree over how much the U.S. government should be involved in the housing market once the immediate crisis is past.

Republican Senator McCain of Arizona wants the government to take over the two agencies, split them up, and then exit the mortgage-finance business by selling them off. Democratic Senator Obama of Illinois is suggesting a more lasting federal involvement.

....

The differences between the two presidential candidates over the lenders mirror a broader philosophical divide over the part the government should play in the economy. McCain supports steep cuts in taxes and spending to promote growth. Obama, while backing some tax reductions, favors increased public investment to boost the economy and job growth.

....

McCain Plan

McCain is clear on what he wants to do. He backs a solution put forward by former Federal Reserve Chairman and fellow Republican Alan Greenspan that would break the companies up and sell the pieces off.

http://www.bloomberg.com/apps/news?pid=20601068&sid=a1ujoLiLLz78&refer=economy

---

Please pardon the choice of words. This is a stark black-and-white comparison of the two candidates. Secondly, anything endorsed by Greenscam should be pelted with rocks and thrown into the abyss. Third, we clearly have a brain at work in Obama, despite the fact that he's surrounded by University of Chicago economists, in that he supports economic policy championed by John Maynard Keynes.

[Hugin]

11. Darn, this already blew my pool. (See above)

They work fast over in Privatize land. Wow.

[Ghost Dog]

65. What you say, Ozy. But, how to elucidate and counter the buzzword-spin here,

which is all I suppose most people will get to hear, which presents a comparison between "promot(ing) growth" (McGain) as opposed to "boost(ing) the economy and job growth" (Obummer)?

[ozymandius]

12. Fannie Mae, Freddie `House of Cards' Prompts Takeover (Update1)

Sept. 9 (Bloomberg) -- Fannie Mae and Freddie Mac used accounting rules that created a ``house of cards'' as the housing market descended into its worst slump since the Great Depression.

While the two largest mortgage-finance companies met regulatory requirements for their capital, reviews by the Treasury, the Federal Housing Finance Agency and the Federal Reserve found they probably wouldn't weather the highest delinquency rates on record, lawmakers and regulators said.

....

``Fannie and Freddie's accounting during the housing crisis appears to have been more fantasy than reality,'' said Rosner, who first highlighted problems in 2003, before the two companies were forced to restate about $11.3 billion in earnings.

....

Fannie counted $20.6 billion in so-called deferred tax credits toward its $47 billion of regulatory capital as of June 30, according to company disclosures. Freddie applied $18.4 billion in deferred-tax assets toward its $37.1 billion in regulatory capital in the second quarter.

Fannie and Freddie have posted four straight quarterly net losses totaling a combined $14.9 billion and have said they anticipate more. The tax credits don't have any value unless the companies are generating profit.

http://www.bloomberg.com/apps/news?pid=20601068&refer=economy&sid=a3pTtizqxtcA

---

Sounds like Enron redux. Their balance sheet counted phantom money as solid assets.

[Tansy_Gold]

33. "...wouldn't weather the highest delinquency rates on record."

And what is the takeover doing about THAT? Huh?



cue crickets.




Tansy Gold

[Demeter]

146. Bush Administration Chooses McCain National Finance Chairman To Take Over Fannie Mae

http://thinkprogress.org/2008/09/08/mccain-herbert-allison/
Bush Administration Chooses McCain National Finance Chairman To Take Over Fannie Mae

The Bush administration has named a close ally of Sen. John McCain (R-AZ) to take over Fannie Mae. Herbert Allison has worked at Merrill Lynch and TIAA-CREF. However, he also served as McCain’s 2000 national finance chairman.

On Feb. 27, 2000, the Austin-American Statesman noted the close relationship between McCain and Allison, saying that they “regularly” talked:

McCain is a one-man polling operation, each day soliciting the opinions of dozens of people who don’t even know they’re advising him. … McCain soaks up anecdotal advice and ideas from all walks of life. He talks regularly with publisher and analyst William Kristol; journalists Charles Krauthammer and R.W. Apple; high-tech executive Andy Grove; money man Herbert Allison; telecom executive Sol Trujillo; foreign policy luminaries such as Henry Kissinger, Jeane Kirkpatrick and Brent Scowcroft; and even people such as actor Warren Beatty (who suggested that McCain’s campaign accept no money at all).

On Jan. 24, 2000, Fortune reported that if McCain won the election, the “best bet” to become his Treasury Secretary was Allison. In 1999, Allison told Crain’s New York Business <12/20/99> that he had been “tremendously impressed by McCain,” who “has courage and high integrity, and he believes in campaign finance reform.”

[ozymandius]

13. Wall Street Trading Gets Zero Value From Lehman, Merrill Owners

Sept. 8 (Bloomberg) -- Lehman Brothers Holdings Inc. is trying to sell its fund-management unit to cover further mortgage- related writedowns. If it does, what's left won't be worth much, based on how investors value the firm.

Lehman's market capitalization of $11.2 billion is almost equal to the value of its asset-management arm, which includes Neuberger Berman Inc. That leaves its main business of trading stocks and bonds as having little worth. The numbers are similar for Merrill Lynch & Co.: Take out its retail-brokerage and asset- management businesses, and the investors' valuation of the rest of the third-biggest U.S. securities firm is zero.

....

The biggest reason for the depressed valuations is concern about writedowns on the companies' mortgage holdings. Merrill, Lehman and Morgan Stanley have written down $74 billion of their holdings tied to home loans, commercial real estate and leveraged finance for companies during the past four quarters, data compiled by Bloomberg show.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aPBMl6mTFuks&refer=home

[Tandalayo_Scheisskopf]

36. There is another something in play with Merrill.

Here are the energy markets at the moment. Notice CO, HO, NG and RBOB. NG especially, down .37 at 8'ish AM. These are some serious damned downward moves. I do not think that CO is gonna be able to hold above 100 for much longer, and somehow, some way, the OPEC nations have figured out the pushing the entire world into recession and worse is gonna make for good business for the long term. One can assume that such a revelation was arrived at in spite of themselves.

CLV08.NYM Crude Oil Oct 08 104.17 8:52am ET Down 2.17 (2.04%)
HOV08.NYM Heating Oil Oct 08 2.9365 8:51am ET Down 0.0766 (2.54%)
NGV08.NYM Natural Gas Oct 08 7.152 8:52am ET Down 0.375 (4.98%)
PNV08.NYM Propane Gas Oct 08 1.59 9:13am ET 0.00 (0.00%)
RBV08.NYM RBOB Gasoline Oct 08 2.6472 8:52am ET Down 0.1031 (3.75%)

Now, for the nest part of the Merrill puzzle, I would suggest you peruse the following video. As fine an example of putting all your eggs in one basket and relying on market bubbles for a business model as there might be. Note: Prof. Greenberg is one of the few guys out there speaking The True Dinkum:

http://www.worldnewstrust.com/wnt-video-gallery/videodirectlink/Treason-for-Oil.html

In Merrill's case, it just looks like the end result of a bad case of The Greedy Stupids.

[DemReadingDU]

44. Lehman down over 30%. Price 9.60

http://finance.google.com/finance?q=NYSE:LEH

[ozymandius]

14. (from Naked Capitalism) Rogoff: Central Banks At Risk of Sinking Along With Banks

This Guardian article by Kenneth Rogoff (hat tip Mark Thoma) sends a blunt warning: central banks are taking on so much dodgy debt that they will put themselves at risk if they continue extending support to their banking systems. Rogoff argues (as we have) that the banking system needs to shrink (an inevitable consequence of reducing excessive and unsustainable leverage).

What makes this alarm noteworthy is that Rogoff is a Serious Economist and has (along with Carmen Reinhart) done considerable work in examining financial crises. Thus he is particularly well qualified to make this diagnosis. But will anyone in authority take heed?

A year into the global financial crisis, several key central banks remain extraordinarily exposed to their countries' shaky private financial sectors. So far, the strategy of maintaining banking systems on feeding tubes of taxpayer-guaranteed short-term credit has made sense. But eventually central banks must pull the plug. Otherwise they will end up in intensive care themselves as credit losses overwhelm their balance sheets.

The idea that the world's largest economies are merely facing a short-term panic looks increasingly strained. Instead, it is becoming apparent that, after a period of epic profits and growth, the financial industry now needs to undergo a period of consolidation and pruning. Weak banks must be allowed to fail or merge (with ordinary depositors being paid off by government insurance funds), so that strong banks can emerge with renewed vigour.

....

British economist Willem Buiter has bluntly accused central banks and treasury officials of "regulatory capture" by the financial sector, particularly in the US. This is a strong charge, especially given the huge uncertainties that central banks and treasury officials have been facing. But if officials fail to adjust as the crisis unfolds, then Buiter's charge may seem less extreme.

So how do central banks dig their way out of this deep hole? The key is to sharpen the distinction between financial firms whose distress is truly panic driven (and therefore temporary), and problems that are more fundamental.

link to Naked Capitalism

link to Guardian

[fedsron2us]

37. Sovereign debt crisis anyone ?

Coming to a planet near you within the next 12 months.

[Ghost Dog]

67. And the reaction to that situation will be?

:hi:

[fedsron2us]

132. Panic

After that I am afraid my crystal ball goes all cloudy.

My guess is that different governments around the world are going to adopt their own solutions based on their access to capital, commodity resources and the need for external commerce.

Globalism will wither as trade barriers go up. International tensions will increase

Within a decade I expect isolationism to replace neo conservative imperialism as the main US ideology.

[ozymandius]

15. Wells Fargo Says It Will Take Third-Quarter Write-Down On Fannie, Freddie Holdings

Wells Fargo & Co. said it will take a third-quarter write-down on its investments in securities issued by Fannie Mae and Freddie Mac.

The nation's fourth-largest bank by stock market value said its perpetual preferred investments in Fannie and Freddie are included in securities available for sale at a cost of $336 million and $144 million, respectively. Those securities now trade at 5% to 10% of their original value.

....

Last month, J.P. Morgan Chase & Co. said it could post a write-down of $600 million or more on the value of its holdings of Fannie and Freddie's perpetual preferred stock. E-Trade Financial Corp. and Sovereign Bancorp Inc. are among those that recently disclosed positions in the two firms' preferred stock.

http://online.wsj.com/article/SB122090702798111625.html

---

These are writedowns from stronger banks. I expect the FDIC is suiting up for visits at weaker banks by the end of the week.

[ozymandius]

16. WaMu on the brink of disaster: has agreement with regulators

You have probably heard by now that Washington Mutual ousted its embattled CEO Kerry Kilinger and replaced him with former Sovereign Bancorp CFO Alan Fishman. But, what you have not heard is that WaMu has signed an agrrement with the Office of Thrift Supervision (OTS) which requires WaMu to provide business plans and forecasts for results, asset quality, capital and business segment performance (Hat Tip: Calculated Risk).

Translation: WaMu is on the FDIC's list of 117 institutions that may fail.

http://www.creditwritedowns.com/2008/09/wamu-on-brink-of-disaster-has-agreement.html

[DemReadingDU]

31. So Is National City

"Other financial institutions known to have a similar agreement with the OTS are National City of Cleveland, OH, also certainly on the FDIC's list and Downey Financial."
http://www.creditwritedowns.com/2008/09/wamu-on-brink-of-disaster-has-agreement.html



6/6/08 National City is on probation
http://www.creditwritedowns.com/2008/06/national-city-is-on-probation.html

[DemReadingDU]

84. Update: Neither WAMU nor NCC on FDIC list

"I was recently called out on missing the details of the FDIC's list of 117 'problem' banks. In a post on the OTS' agreement for regulatory supervision of Washington Mutual, I incorrectly stated that NCC was on that list and inferred that WaMu was as well. This is not the case. The total asset base of the banks on that list is only $78 billion combined.

Both NCC and WaMu have more assets alone than that entire list. So, this was clearly an error on my part and I freely admit it."


The FDIC won't say which banks are in its problem list. However, based on the total assets of these institutions, we know which banks are NOT on the list. The total assets is $78 billion with $32 billion coming from IndyMac Bank which failed in July. That leaves $46 billion for the other problem banks. Below are banks that can't be on the list since their assets are over $46 billion. However, it should be noted that IndyMac failed and it was not on the problem list at the end of the first quarter.

* Wachovia: $671 billion (FDIC source)
* WaMu: $307 billion (FDIC source)
* National City: $151 billion (FDIC source)
* KeyBank: $98 billion (FDIC source)

The following banks are under $46 billion in assets, however, with a total of 117 banks on the problem list, there are probably not too many banks with assets between $10 to $20 billion on the list.

* Zions: $20.2 billion (FDIC source)
* Flagstar: $14.6 billion (FDIC source)
* BankUnited: $14.2 billion (FDIC source)
* Corus: $9.0 billion (FDIC source)

http://www.creditwritedowns.com/2008/09/fdic-list-of-problem-banks.html

[ozymandius]

17. Hiring Intentions Lowest In 17 Years: Manpower

MarketWatch, citing data from Manpower, is reporting Glum outlook on jobs.

Unless you work in the oil, gas or related mining industries, the job market is unlikely to look brighter in the fourth quarter, and even retailers are glum about hiring for the upcoming holiday season, according to the latest Manpower Employment Outlook Survey.

The Milwaukee firm's quarterly survey of hiring plans found that a net 9% of firms expect to hire in the fourth quarter, down from 12% in the previous quarter, and 18% for the fourth quarter a year ago. This fourth quarter outlook is the tenth consecutive quarter of declining employer sentiment in the survey -- the longest such retreat in more than 20 years.

Manpower's seasonally adjusted net-employment numbers, based on a survey of 14,000 U.S. companies, measure the percentage of firms planning to hire minus those intending layoffs. Manpower doesn't measure the number of jobs. The survey's margin of error is +/- 0.8%.

...

In December 2007 with unemployment hovering at 4.8%, I called for 6% unemployment by the end of the year as well as a miserable jobs report every month in 2008. However, I see I may have been way too optimistic. If those manpower estimates are correct, we might see 7% by the end of the year.

So just to prove to everyone what a continuous optimist I am, I will revise my guess to 6.6%-6.8% based on this data.

http://globaleconomicanalysis.blogspot.com/2008/09/hiring-intentions-lowest-in-17-years.html

[UpInArms]

20. dollar watch

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

Last trade 79.240 Change -0.212 (-0.27%)

Assessing The Damage To Forex Risk Appetite After The Freddie, Fannie Bailout

http://www.dailyfx.com/story/special_report/special_reports/Assessing_The_Damage_To_Forex_1220921710236.html

In a move that was more or less expected by most traders and investors across the world, the US government announced this past weekend its plans to take the reigns on Freddie Mac and Fannie Mae. However, what wasn’t expected was the reaction that would follow the bailout. There was a clear and notable sign of relief as risk appetite jumped for equities; but in other assets, the price action was surprisingly reserved or somewhat counterintuitive. In this report, we’ll go over some of the preliminary details of the bailout plan, review what kind of impact the news initially had on the major asset classes and forecast the ultimate fundamental and price influence this announcement will ultimately have the markets going forward.

The Plan

For the past few months, market commentators and policy officials had grown increasingly critical about the health of Freddie Mac and Fannie Mae – two government sponsored enterprises that hold or insurer nearly half of the mortgages in the US. With nearly $5 trillion in mortgages, the future of these two agencies held a considerable weight over the health of the US housing market and growth, and even the global credit markets. Theoretically, a collapse on that scale could easily have triggered the next leg of the credit crisis – one that would have been far worse than anything we have seen over the past 12 to 14 months. However, there was little to no chance that the government would let the lenders fail. So, the question became when – not if – the US Treasury would take over.

On Sunday, after heated speculation and many unconfirmed rumors, officials confirmed the Freddie Mac and Fannie Mae had been taken into a government conservatorship. In taking over, both firms CEOs have been ousted, the Federal Housing Agency has been put in charge and all dividends have been suspended. The more important details aren’t yet set in stone. Treasury Secretary Henry Paulson has hinted at a possibly putting up $200 billion to support both lenders; and he has opened up lines of short-term funding for both Fannie, Freddie and 12 other home loan banks.

The Currency Market

The History: To understand how this announcement would impact the currency market, we need to recall what has happened to the Forex market over the past year. After the subprime meltdown and the subsequent housing recession took hold, the outlook for the US economy and risk appetite crumbled. These are two distinct influences on the deeply liquid market. First, the US dollar plunged as the Fed was spurred to an aggressive pace of interest rate cuts and international investors feared the world’s largest economy was heading for a recession. The other unique concern surrounded the popular carry trade. Any strategy that flourishes in conditions where volatility is low and yield differentials are expected to grow does not do well when credit seizures are a constant threat and interest rates are slowed by growth trends.

The Future: After the US government confirmed its plans to take over Freddie and Fannie, the US dollar plunged and the carry trade rebounded from its lowest level in over two years. However, both this sharp moves were ultimately retraced. The EURUSD and GBPUSD pulled back 375 points and 500 points from their respective intraday highs. The response from the US dollar shows the question of whether the bailout will boost confidence in the US and its housing market and securities or if it merely hints at a more dire situation for the economy than originally expected. In this respect, the strength or weakness of a currency is determined by its fundamental outlook with respect to the forecasts for all its counterparts. Right now, the economic outlook for the UK, Japan and Euro Zone are still more ominous. However, this action will act to remind traders that the economy may not be as strong as second quarter GDP numbers suggest. If US data continues to cross the wires in the red, it will have a greater impact in chipping away at the dollar’s advance.



As for the carry trade, this news removes one of the biggest clouds hanging over the popular strategy. With the US government officially backing the $5 trillion in assets, the threat of any major defaults from these assets have been alleviated. However, this move has merely bought the officials more time. What is truly needed is a genuine rebound in the housing market and renewed confidence in lending. In effect, this bailout has saved a major player in the mortgage market; but it will not encourage a rebound in housing demand on its own. What’s more, the general cool down in global growth will naturally reduce interest in purchasing big-ticket items like homes while at the same time limits borrowing.

...more...

Commodity Currencies May See Bounce Against the Dollar (Candlesticks Weekly)

http://www.dailyfx.com/story/special_report/special_reports/Commodity_Currencies_May_See_Bounce_1220953881788.html

The so-called commodity currencies may lead the majors in correcting the recent surge in US Dollar strength. While the Euro and the British Pound continue to sell off aggressively against the greenback, the Australian, New Zealand, and Canadian dollars are showing candlestick formations indicative of a near-term correction of USD strength.



The so-called commodity currencies may lead the majors in correcting the recent surge in US Dollar strength. While the Euro and the British Pound continue to sell off aggressively against the greenback, the Australian, New Zealand, and Canadian dollars are showing candlestick formations indicative of a near-term correction of USD strength.

EUR/USD

Euro selling continues

We sold EURUSD at 1.5510 having identified a Long Black Candle that closed beyond trend line support. The pair is now trading at the 1.4120 level, bringing our floating profit to around 1,390 pips. Most recently, prices penetrated below a trend line that had remained in place since March 2006. The 1.40 level may present formidable psychological support, but we remain firmly bearish in the long term. The next soft target is the July 2007 top near 1.3860.

EUR/USD Strategy

1. Continue holding short EURUSD at 1.5510.

2. Move stop-loss to 1.4994, protecting 516 pips in profit.

3. Next “soft target” lies near 1.3860.

...more...

[UpInArms]

21. Light, or train, at end of tunnel?

http://www.reuters.com/article/ousiv/idUSN0555740120080907?sp=true

NEW YORK (Reuters) - For weeks the U.S. economy appeared to be approaching the light at the end of a tunnel, but now it seems the light may be an oncoming train.

Falling oil prices and surprisingly robust second quarter economic growth had convinced some analysts that the United States might skirt recession, with the help of timely tax refunds and the U.S. dollar's export-boosting weakness.

However, a grim U.S. jobs report on Friday expanded the previous body of evidence suggesting the world's largest economy had already succumbed to the effects of the worst housing slump since the Great Depression of the 1930s.

"This is a very weak jobs report that screams recession," said John Ryding, chief economist at RDQ Economics in New York.

"It was shockingly weak."

The government's payrolls report showed the U.S. economy shed jobs for the eighth consecutive month in August and the unemployment rate shot up to a five-year high of 6.1 percent.

Economists will now take off their rose-tinted glasses as they anticipate this week's data on the hard-pressed U.S. consumer, a recovering U.S. dollar, and the continuing saga of the U.S. credit crunch.

...more...

[Tansy_Gold]

34. "Very weak jobs report."

I


Told


You


So.



Tansy


Gold

[Dr.Phool]

42. Now

Wait


For


The


Revised


Numbers.


Much Worse.

[Tansy_Gold]

46. Oh, of course they're worse. But. . ..

The REAL numbers are worser (sic) still.


I'm so angry about this I'm shaking.

Why is Obama in money trouble? BECAUSE HIS SUPPORTERS ARE TAPPED OUT. We got hit heavy during a stupid and wasteful and counter-productive primary season that put ALL the emphasis on personalities and very damned little on issues.

Now we've handed that strategy on a silver platter to a senile old liar and his political boinkee. The personality war WORKED for the Dems -- and it handed the pukes a tapped out, exhausted, somewhat demoralized base. Furthermore, it handed the pukes the PERFECT weapon against us. Absofuckinglutely perfect. The controversy over Palin is giving them hours and hours and hours and hours of free campaigning. John Edwards' scandal disappeared in a few days; Mooselini's linger.

And now all those pukes with all that money, and all the power to make donations in other people's names and fund 527s and donate to the party, etc., etc., etc., are free to do so.

We fucked ourselves. We put ideology ("let the people decide!") over practicality.

Am I gonna shut up about this? No, I'm not. Because I think the sooner we Dems admit we did a fucking stupid thing, the better off we'll be.

What the fuck is the matter with Obama and this absolute bull shit of holding off on rolling back the tax cuts on the rich? Doesn't he fucking know he's turning off his BASE? What's Biden saying? Is he getting any coverage? OR IS THE MEDIA STILL SLAVERING OVER PALIN? Don't bother to answer that one.

If your boss is a McCain supporter and makes no secret of it, and you're lucky to have a job at all and can't afford to lose it, are you going to put an Obama sticker on your car? Are you going to risk putting an Obama button on your purse? THAT'S WHY IT COMES BACK TO JOBS. People without jobs, people without income, those are frightened people. People without security are frightened, timid, cautious. And now we've got a candidate who says "Lay off the kids" even as Palin is USING HER CHILDREN AS CAMPAIGN PROPS.

Don't lay off the fucking kids (pun intended). Anyone who goes out and preaches abstinence as the best and virtually the only proven method of avoiding teen pregnancy better have a house full of abstaining teen-agers. Palin can't claim that. HER POLICIES DON'T WORK IN HER OWN FUCKING FAMILY.

But we can only say that here. We can't go out into the workplace and say it, because too many of us don't have jobs or have tenuous employment situations or are a paycheck away from disaster.

That's why jobs matter. Jobs empower people, whether they're working for solid living wages and saving for retirement and their kids' education or they're able to start their own small local businesses and provide the same quality goods and services at a competitive price as the big guys.

The pukes, with help from Bill Clinton (the only Dem in that quarter century of puke tyranny), destroyed the foundation of America. And I don't see Obama/Biden doing much to fix it.


Tansy Gold, enraged

[Hugin]

56. Uh... and um... To that I will add a...

HALLELUJAH!


Tell it!


:)

[Dr.Phool]

64. Edwards was a damn good campaigner in '04

But the media paid no attention to him whatsoever. This year, he got more coverage for his affair than he did campaigning for president.

What I can't understand, for the life of me is, if the economy is in the tank and the treasury is broke, why would you even consider delaying tax increases on the wealthy? It makes absolutely no sense whatsoever! Maybe Obama's Czechago School Boyz have convinced him "trickle down, aka horse and sparrow" works.

[flamingdem]

74. What?! Did you think it would be easy to put a black democrat in office who touts change???!!!

Why not make a donation instead of becoming depressed.

[Tansy_Gold]

93. If I had the fucking money to make a fucking donation, I would.

I don't have it. And I'm not alone.

Like many others, here on DU and out there in the real world, I'm hanging on by the skin of my teeth. My bills aren't current. I just had a computer die, and because it's the way I earn my meager living, I had to get a new one. It went on a credit card and I hope I can keep those payments current long enough a.) to start making some halfway decent money at this job (where, yes, I have to suffer a boss's Palin support and not say a word) and b.) until social security kicks in MAYBE in November and maybe not until March. (Don't ask why the discrepancy; it just is.)

Am I aware that it was never going to be easy to elect a Black democrat? Hell yes. Am I aware that it was never going to be easy to elect a Clinton woman? Hell yes.

But the person who said John Edwards was a good campaigner in 2004 was absolutely correct. And the media gave him a pass. Kerry had the experience and Edwards had the personality, and the Dems blew it. Blew it big time. They shouldn't have let PA or OH or FL or anywhere else be close. THEY WOULDN'T FIGHT.

And now Obama is wimping out. Goddess damn him to hell; where is his SPINE? Why isn't he out there calling McPalin a ticket of lies, lies, and more lies?

Sure it's about the money. It's about the money that isn't there. The money and the fight and the enthusiasm that got squandered just as stupidly as booooosh squandered the world's good will after 9/11/01.

And now, if you'll excuse me, I have to get back to my part-time, no benefits, minimum wage independent contractor job. I may make $20 today, if I'm lucky.


Tansy Gold

[flamingdem]

109. I can relate. I try to phone bank for a couple of hours a week to channel my frustration

I wish you the best, life has truly gotten tougher.

[Hannah Bell]

77. "That's why jobs matter. Jobs empower people, "

which is why they're not happening. it's not about empowering people; it's about further empowering rich people. which necessarily means disempowering everyone else.

[Ghost Dog]

83. That is absolutely the strategy over there (UK too).

Much less so elsewhere; and in some places it is the opposite.

I said a little while ago: It's time to stick the knife in and give it a good twist.

Not going to happen, is it.

:(

[Hannah Bell]

91. Other places where? Not snark, but so far as most of Europe, they

seem to taking a page from the Reagan-Thatcher playbook.

Australia, even more so. Canada? Same tendency, just a little slower.

And their populations seem to be reacting much as did the US/UK during those years...some resistance, but plenty of support from the middle, because they imagine they'll benefit, & they don't mind punishing the ("non-productive, lazy, parasitical") poor.

No, I don't expect most people will get a clue until things get much worse. But that anger can be diverted into religion & reactionary "populism" focused on scapegoats.

I'm not sanguine about the political possibilities. What do you mean by "stick the knife" - into who or what?

[Ghost Dog]

125. Dunno. Quick reply:

UK is not Europe.

Many European governments (on left and right) are not simply interested in sucking carcass dry.

The Obama campaign should stick knife and twist, be prepared to fight "the all-American way" - edit (is this necessary?): into the opponents' both wilfully deliberate and dumbly ignorant self-interested lies.

[Ghost Dog]

79. Ah, so this is what GD-P can get like.

As regards the weak, apparently pandering campaign, is it because it's this or a bullet in his, his wife's, his kids' heads?

Damn, I'll shut up now and just listen. I was angry too today but for other relatively pathetic reasons (slack so-called workers under a lazy 'overseer').

[Ghost Dog]

81. Subject: Ah, so this is what GD-P can get like.

Message:
As regards the weak, apparently pandering campaign, is it because it's this or a bullet in his, his wife's, his kids' heads?

Damn, I'll shut up now and just listen, unless I see something really useful to say. I was angry too today but for other relatively pathetic reasons (slack so-called workers under a lazy 'overseer').

[Ghost Dog]

88. Did you discover this place, Tansy Gold and others?

http://womenagainstsarahpalin.blogspot.com/

[ozymandius]

129. I like it.

The bog has been flagged (by the usual republican suspects, no doubt) and is under investigation for breach of the blogger terms of use. To me, it fulfills the duty of a blog to amplify the voice of every person who dares to speak up.

[Ghost Dog]

131. I guess they'll claim it's sexist because, apart from sticking knives

into, sorry, expressing opinions about, edit, against, their "saint",

men are pretty clearly not invited. :)




Nb. http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3954463

[Demeter]

59. Train, Definitely. Guaranteed

[AnneD]

97. No...pizza delivery van....

heading for the next bank that goes belly up this weekend. Who ordered 10 large meat lovers, 10 large supremes, 5 large veggie lovers, and 5 large cheese pizzas.

[Demeter]

110. What Idiot Thought We Were "approaching the light at the end of a tunnel"?

Oh, THAT Idiot! Of Course!

[UpInArms]

22. Maurice (Hank) Greenberg could pay fine of up to $100 million: report

http://news.yahoo.com/s/nm/greenberg_cuomo_dc

NEW YORK (Reuters) - Maurice "Hank" Greenberg, the former CEO of American International Group Inc (AIG.N), could face a fine of up to $100 million to settle three-year-old civil fraud charges brought by New York's attorney general, according to business news channel CNBC on Friday.

CNBC editor Charlie Gasparino said as part of settlement talks between the two sides, a fine of between $50 million and $100 million has been discussed. However, he said the talks could break down over the language of the settlement.

Gasparino said Greenberg was resisting any language that indicated wrongdoing on his part.

<snip>

Greenberg left AIG in 2005 after allegations of financial misconduct were made against him and the company by then-New York Attorney General Eliot Spitzer and the U.S. Securities and Exchange Commission.

...more...

[Demeter]

112. He'll Put It On American Express Card

[UpInArms]

23. U.S. court revives cases against Enron executives

http://www.reuters.com/article/ousiv/idUSBNG27772620080909

(Reuters) - A ruling in the federal appeals court in New Orleans on Monday revived Texas state court fraud cases targeting Enron Corp's former leaders and more than a dozen financial institutions accused of playing a role in the company's collapse, legal documents showed.

The ruling by the Fifth Circuit Court of Appeals, which reverses an earlier federal court decision, allows cases to proceed against individuals and institutions which have not yet reached a settlement.

In late 2001, the Houston law firm of Fleming & Associates filed seven securities-related lawsuits in Texas state courts on behalf of several hundred clients against various Enron-related defendants, according to the documents.

The federal court, which already had jurisdiction over various Enron-related cases, then issued an order prohibiting Fleming from filing any new Enron-related actions without leave of the court.

...more...

[UpInArms]

24. things that make you go hmmm... London Stock Exchange crippled by system outage

http://www.reuters.com/article/newsOne/idUSL01084620080908?sp=true

LONDON (Reuters) - The London Stock Exchange (LSE.L: Quote, Profile, Research, Stock Buzz) suffered its worst systems failure in eight years on Monday, forcing the world's third largest share market to suspend trading for about seven hours and infuriating its users.

The problem occurred on what could have been one of London's busiest trading days of the year, as markets rebounded worldwide following the U.S. government's decision to bail out mortgage companies Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz).

"We have the biggest takeover in the history of the known world ... and then we can't trade. It's terrible," one trader said.

The Johannesburg Stock Exchange, which uses the LSE's trading platform TradElect, also suspended trading.

"This halt today clearly has once again damaged (the LSE's) reputation as a leading exchange, especially on a day like today, highlighting that it may have been unable to handle the volumes this morning," added another trader.

The exchange would not say whether volume was the issue and declined to give details on what had caused the problem. But angry customers were demanding an explanation.

...more...

[Demeter]

113. Good!

[UpInArms]

26. Reynolds to cut about 570 jobs, change brand focus

http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSN0916320080909

NEW YORK, Sept 9 (Reuters) - Tobacco company Reynolds American Inc (RAI.N: Quote, Profile, Research, Stock Buzz) said on Tuesday it will cut about 570 jobs and change its focus on some cigarette brands, as it tries to boost growth in a declining U.S. cigarette market.

The company also said it would refocus its investment in the premium menthol category from its Kool brand to Camel products.

The job cuts, which represent about 10 percent of the U.S. employee count for Reynolds and its R.J. Reynolds Tobacco Co subsidiary, will generate about $100 million in savings by year-end 2010, and annual savings of about $55 million after that, the company said in a statement.

Reynolds, with other brands such as Winston cigarettes and Kodiak and Grizzly smokeless tobacco, expects a pretax charge of about $90 million in the third quarter from the restructuring.

The move comes a day after cigarette company Altria Group Inc (MO.N: Quote, Profile, Research, Stock Buzz) said it would buy UST Inc (UST.N: Quote, Profile, Research, Stock Buzz) for $10.4 billion, giving it a leading position in the growing smokeless tobacco market against Reynolds.

...more...

[Wilber_Stool]

39. This is a part of a thread

from HamdenRice from earlier this week. Is it accurate?

- As privatized companies, Fannie and Freddie ceased focusing on their core business -- guaranteeing consumer home loans to make them more marketable in the secondary mortgage market, and keeping that market liquid -- and became a super mortgage company itself; in other words, instead of helping other companies create mortgage backed securities, it was creating them itself. Unlike other creators of mortgage backed securities, however -- the point of such transactions is to get the obligation to pay bondholders off one's own books -- Fannie and Freddie kept the obligations because they are the guarantors of the underlying mortgages. This is the same mistake Enron made.

- Fannie and Freddie were playing dangerous games with interest arbitrage, derivatives and other exotic financial instruments that no one understands or can value.

- In fact, the sum total of Fannie's and Freddie's transactions were so complex that no one understands them -- and I mean no one, not even their own management. One recent year's audit was so horrifically complicated that Fannie spent $1 billion on the audit. That's billion with a b. On the audit. That's how many hours of accountants' work (plus other expenses and charges) it took just to figure out what they own and what it's worth.

[Roland99]

47. Look at that Dow chart.

Up...down...up....


wheeeeeee!!

[antigop]

49. Why aren't some press articles mentioning new guy at Freddie Mac is from Carlyle?

Bloomberg reports that Moffett is a Carlyle Group executive:
http://www.bloomberg.com/apps/news?pid=20601087&sid=am4lVBpYknR8&refer=home

Moffett, 56, a Carlyle Group executive who was once vice chairman of U.S. Bancorp, will head McLean, Virginia-based Freddie.

However, other articles make no mention that Moffett is from Carlyle.
1) http://financialweek.com/apps/pbcs.dll/article?AID=/20080908/REG/809089972

In a move to quiet financial market turbulence stemming from the U.S. housing crisis, Treasury Secretary Henry Paulson and Federal Housing Finance Agency director James Lockhart placed the two entities into conservatorship and appointed former Merrill Lynch CFO Herb Allison to head Fannie Mae and former U.S. Bancorp vice chairman and CFO David Moffett to oversee Freddie Mac.

2) http://www.bizjournals.com/albuquerque/stories/2008/09/08/daily1.html

Herbert Allison, former CEO of TIAA-CREF, has been named the new CEO of Fannie. David Moffett, former vice chairman and chief financial officer at U.S. Bancorp, will take Freddie’s helm.

Here's what Moffett was doing at Carlyle:
http://www.carlyle.com/Team/item9812.html

David Moffett is a Senior Advisor focused on opportunities in the global financial services sector.

Mr. Moffett retired as Vice Chairman and Chief Financial Officer of U.S. Bancorp in 2007 having served the company in this capacity since 1993. Moffett was responsible for all the company’s financial management responsibilities including corporate accounting and reporting, tax credit investments, insurance, real estate, purchasing, treasury, venture capital, corporate real estate, media and investor relations, strategic planning, pension management, and mergers and acquisitions. From 1998 to 2001 he was also responsible for the company’s asset management, wealth management, trust, and fiduciary activities.

<edit> "It's a big club and you ain't in it." -- George Carlin

[antigop]

51. Sears' softest side? It's P&L statement

http://financialweek.com/apps/pbcs.dll/article?AID=/20080908/REG/309089970

Sears Holdings announced at the end of August that second-quarter net income from operations that include Sears and Kmart stores fell a stunning 62%, to $65 million, from the year-earlier period. But a closer look at the company's quarterly filing with the Securities and Exchange Commission paints an even grimmer picture: a Sears Holdings with almost no earnings at all on some $11.8 billion in revenue for the quarter.

This suggests not only that Sears has fallen victim to a struggling economy but that owner Edward Lampert's strategy to turn around the company isn't working. As a result, much of the investor interest in the company continues to come from those betting on its bankruptcy.

[antigop]

52. US move triggers CDS default

http://www.ft.com/cms/s/0/ed1e14c6-7dd0-11dd-bdbd-000077b07658.html

One of the largest defaults in the history of the $62,000bn credit derivatives market has been triggered by the US government’s seizure of Fannie Mae and Freddie Mac, raising questions about how dealers will unwind billions of dollars worth of contracts.

Although the $1,600bn of debt issued by the troubled mortgage groups is regarded as safe after the US government’s move to take control of the companies, their move into “conservatorship” counts as the equivalent of a bankruptcy in the credit derivatives market.

This triggers a default on credit default swaps – instruments that provide a form of insurance on fixed-income assets. Dealers in the market are now working to settle these contracts.

The exact amount of CDS on Fannie Mae and Freddie Mac are not known, reflecting the private nature of the market, but they are part of widely traded indices and the amounts are likely to be significant. Analysts at Lehman Brothers said: “There is likely to be a considerable amount of notional protection outstanding.”

The industry body, International Swaps and Derivatives Association, said on Monday it would launch a protocol to facilitate settlement of credit derivative trades involving Fannie Mae and Freddie Mac and would publish further details in due course.

[Tansy_Gold]

53. Just remember ----

$62,000bn = 62 TRILLION DOLLARS. TRILLION WITH A T.

In case you'd forgotten.






Tansy Gold, who has a couple of trillians, but they're just 1 ct. aquamarines.

[antigop]

55. Math majors like myself are well aware of that...but for some reason

"infinity" seems to be swirling around in my head right now. :grr:

antigop
--multiple degrees, one of the "elites" they complain about

(actually, they complain about anyone who can think)

[Demeter]

60. Or Question Or Even Complain!

Whiners indeed! Wait till we get some rocks.

[Tansy_Gold]

116. Would those be rocks as in testicles (which we women are going

to have to take a pass on) that our all-male ticket seems to have deprived themselves of or rocks as in stones being thrown at glass houses?

[Demeter]

119. Now That You Mention It, Both

Some will "harvest" the organic kind, others will dig up the other (I know a great spot in NH, can't go down 6 inches without hitting a rock the size of your kitchen table).

[Tansy_Gold]

121. I have a yard full of rocks.

Six inches in NH you say? Can't go 6mm here in Apache Junction at the base of Superstition Mountain.


Tansy Gold, in a place that has York Twnp, Steuben County, IN, beat all to hell when it comes to rocks (but edited to add that they aren't always very big. Just, like Chickenman, everywhere.)

[Hugin]

143. Stones, Demeter.

The expression is... "Until we get stones." :eyes:

[Demeter]

145. Stones Are Too Little

I want rocks.

[Hugin]

72. Maybe you can help me with a little word problem tutelage?

I was just now trying to cipher-up the GDP of how many Solar Systems equivalent to the one we now reside in would
be required to pay-off a number like that...

My little cereal box prize Hershey's Choc-o-lator can't quite display it. (understatement)

Thanks in advance for the help. :D

[antigop]

80. Prag, you are a gem -- one of the best. You manage to make me laugh despite the fact that all hell

is breaking loose.

Thanks.

<edit> for spelling.

[Hugin]

85. Much thanks...

I attribute it to the fact I've been riding around in this particular hand-basket so long... I'm an Honorary Tour Guide. ;)

I just stick to the script.

"And over there... If you look really closely, you'll notice that the RBOB is 2.6668! Yikes!" :scared:

Oh, and P.S. Thanks for all of the facts and insights you've passed to me. I find them very informative. :D

[CatholicEdHead]

61. This bailout only is 1/62 of the CD Market?

Wow, $62,000Billion, that paper money can destroy the entire worldwide financial system. There is no way to cover those losses by any government bailout.

[BelgianMadCow]

78. Same thought I had

I am really considering withdrawing our savings at this point.
The sheer size of the CD market baffles my mind. As far as bubbles go...and the way banks are behaving over here, I don't think we will be spared. They are all vying for your cash, the offered interests seem to go up all the time. Strapped for liquidities, that's what they are.

:hi:

[antigop]

82. "The exact amount of CDS on Fannie Mae and Freddie Mac are not known,"

Well, gee, that really gives you the warm and cozies, doesn't it?

[Demeter]

114. More Like Hot Flashes, Actually

[AnneD]

68. Warren Buffett's Best Man

THE ELECTION IS shaping up as a contest between two sharply different economic approaches. More than in Clinton-Bush or Clinton-Dole — more even than in Bush-Kerry — this election will offer a stark choice. Do you favor a continuation of low-taxation policies and a limited role for the government? Or do you think Washington should actively try to rebuild infrastructure, develop alternative-energy supplies and lessen wage inequality? On these economic issues and more, John McCain and Barack Obama are miles apart.

Commentary in the press has focused on the extent to which either candidate would reverse the Bush tax cuts. But while McCain and Obama differ on taxes, something far more fundamental is at stake: not just the policies that have held sway over the past eight years but those of an entire generation. Ever since the Reagan era, both parties have drifted rightward. Bill Clinton articulated this truth with his famous dictum, "The era of big government is over."

While Republicans have pushed tax cuts, Democrats have played defense: Try to balance the budget; create a market incentive here, a social policy there. Neither party has challenged the basic primacy of markets. McCain would continue this noninterventionist approach. He has little truck with public-sector economic initiatives, although his proposal to cap and trade carbon dioxide emissions is an exception. In general, the Arizonan clearly wants to restrain government spending.

Last month's column warned against trying to read too much from campaign tea leaves. Presidents often fail to live up to their platforms; Obama or McCain could surprise us. Moreover, presidents are always more than the sum of their platforms; character also counts. Still, there is good reason to think that Obama, backed by a Democratic Congress, would enact much of what he is promising. Democrats were afraid to challenge the laissez-faire approach when it was delivering results. But they aren't afraid now. Thanks to Hurricane Katrina, $140-a-barrel oil and the mortgage collapse, the notion that markets can solve every economic problem is no longer tenable. And the country's growth has been grossly uneven. For all the magic that markets work, they have not been able to get lower- and middle-income wages moving again.

http://www.smartmoney.com/smartmoney-magazine/index.cfm?story=september2008-presidential-election&hpadref=1

[Demeter]

115. Limited Role for Government?

I'd welcome a limited role of government in screwing us over and wrecking the Constitution, Bill of Rights, Habeus Corpus, etc.

Also a limited role in picking the pockets of people beneath their notice.

But right now, can't claim any such thing. BushWorld increased government by employing all the worthless cronies, driving out competence and trashing the rule of law.

[AnneD]

142. I think it is not smaller government....

but the perceived value for the tax dollar collected and spent. I don't mind paying Social Security because my widowed sister and her then 3yo were able to live in some degree of dignity after the death of my BIL. It eased the life of my elderly relatives and other elderly too. So I never complained when they increased the tax, but I did argue for it to be put in the lock box before Al Gore said it. The same goes for education, WIC, SCHIP, and other programs that lift people up in times of need to make them more productive citizens. I thing gov funded research is a good investment. Military should be strictly defense and no more money than other top tier countries.

But when it is frittered away and stolen, like this admin, I want the government microscopic.

[AnneD]

69. Obama and McCain Differ Sharply on Economic Policy

THE ELECTION IS shaping up as a contest between two sharply different economic approaches. More than in Clinton-Bush or Clinton-Dole — more even than in Bush-Kerry — this election will offer a stark choice. Do you favor a continuation of low-taxation policies and a limited role for the government? Or do you think Washington should actively try to rebuild infrastructure, develop alternative-energy supplies and lessen wage inequality? On these economic issues and more, John McCain and Barack Obama are miles apart.

Commentary in the press has focused on the extent to which either candidate would reverse the Bush tax cuts. But while McCain and Obama differ on taxes, something far more fundamental is at stake: not just the policies that have held sway over the past eight years but those of an entire generation. Ever since the Reagan era, both parties have drifted rightward. Bill Clinton articulated this truth with his famous dictum, "The era of big government is over."

While Republicans have pushed tax cuts, Democrats have played defense: Try to balance the budget; create a market incentive here, a social policy there. Neither party has challenged the basic primacy of markets. McCain would continue this noninterventionist approach. He has little truck with public-sector economic initiatives, although his proposal to cap and trade carbon dioxide emissions is an exception. In general, the Arizonan clearly wants to restrain government spending.

Last month's column warned against trying to read too much from campaign tea leaves. Presidents often fail to live up to their platforms; Obama or McCain could surprise us. Moreover, presidents are always more than the sum of their platforms; character also counts. Still, there is good reason to think that Obama, backed by a Democratic Congress, would enact much of what he is promising. Democrats were afraid to challenge the laissez-faire approach when it was delivering results. But they aren't afraid now. Thanks to Hurricane Katrina, $140-a-barrel oil and the mortgage collapse, the notion that markets can solve every economic problem is no longer tenable. And the country's growth has been grossly uneven. For all the magic that markets work, they have not been able to get lower- and middle-income wages moving again.

http://www.smartmoney.com/smartmoney-magazine/index.cfm?story=september2008-presidential-election&hpadref=1

[antigop]

70. WaMu is offering a 5% 12-month CD

https://online.wamu.com/banking/offers/Campaign001/landing/Online_CD?hmelnk=phpocddaprop090808

<edit> Not posted as investment advice, just as comparison to what other banks are currently offering.

[depakid]

87. And that should tell you something....

[antigop]

90. Um, yeah...... n/t

[TheWatcher]

101. It tells me they have nothing left to lose.

Why not soak up as much of the sheeple's funds as possible before the regulators shut the party down.

If WAMU is one of the next Domino's to fall, things are going to get extremely ugly. Like I said yesterday, it is no longer a question of if, it's when.

[Tandalayo_Scheisskopf]

71. Konstipation in The Kasino

Looks like 104 is presently support and a tough one at that. CO has gotten through it a few times but it pops right back up.

CLV08.NYM Crude Oil Oct 08 104.68 12:40pm ET Down 1.66 (1.56%)
HOV08.NYM Heating Oil Oct 08 2.938 12:40pm ET Down 0.0751 (2.49%)
NGV08.NYM Natural Gas Oct 08 7.426 12:40pm ET Down 0.101 (1.34%)
PNV08.NYM Propane Gas Oct 08 1.59 12:40pm ET 0.00 (0.00%)
RBV08.NYM RBOB Gasoline Oct 08 2.6661 12:40pm ET Down 0.0842 (3.06%) <--==1.

1. Saw a story today about why RBOB prices at the pump weren't reflecting the market prices. Long story short?

Gouging. Oh they call it all sorts of other things, but it's gouging.

[flamingdem]

75. For the Demoralized: New National Poll: Obama: 45% McCain 40%

** I am curious as to what people think about the support for Obama on Wall Street.
Where does it come from primarily. Who is working against him?


http://www.pollster.com/blogs/us_obama_45_mccain_40_ibd...

From a poll by Investors Business Daily. 868 registered voters, 3.3% +/-, taken 9/2-9/7

Previous poll in August 43-38 for Obama.

[flamingdem]

76. I should add Investors Business Daily Poll .. thought it might be of interest here nt

[Roland99]

86. 3:07pm - Giving up yesterday's gains. CNBC called yesterday's rally "sustainable"

Dow 11,314.03 -196.71
Nasdaq 2,222.15 -47.61
S&P 500 1,234.35 -33.44
10-year 3.60% -0.07
Oil $103.15 -$3.19
Gold $792.0 0-$10.50

Seriously, someone on CNBC yesterday claimed at least a two-week rally, pushing the Dow back over 11,800 based on yesterday's news of the Freddie Mac/Fannie Mae bailout alone.


IDIOT.

[TalkingDog]

92. They meant sustainable in the NewSpeak, Bush-ian sense.

In other words: Not at all sustainable and a snowball has a better chance in the fiery version of Hades.



poor lil' guy.....

[depakid]

89. Interesting that the Dow is falling with oil prices

while some of that is to be expected from the energy sector, the inverse relationship over the pst several months has been pretty striking.

[antigop]

94. Mortgage bailout could trigger massive credit default swap settlement

http://financialweek.com/apps/pbcs.dll/article?AID=/20080909/REG/809099979/1036

Payouts to be limited, though, as Fannie, Freddie bonds likely to be settled close to par

The government takeover of Fannie Mae and Freddie Mac could trigger the largest credit default swap settlement ever. Actual payments could be limited, however, as a result of the relatively high value of the mortgage underwriters’ bonds.

Investors may be forced to settle contracts covering the mortgage giants’ $1.6 trillion in outstanding debt because the government seizure constitutes a credit event that triggers the payment or delivery of their bonds. The International Swaps and Derivatives Association announced on Monday that it would establish a protocol to facilitate the settlement of CDS trades involving Fannie Mae and Freddie Mac.

“This will likely be the largest CDS credit event in terms of the amount of CDS contracts outstanding,” J.P. Morgan analyst Eric Beinstein wrote in a report released on Monday.

The settlement process will likely take 30 days, with investors cashing their CDS contracts at a price established through an auction process, he said.

Payouts could be limited, though, because most analysts believe CDS covering the mortgage companies’ senior debt will be settled between $98 and par, RBC Capital Markets analyst T.J. Marta wrote in a report to clients. In a cash CDS settlement, buyers are paid the difference between the par value and market value of the debt obligation.

[Dr.Phool]

95. WTF?! I step out for a couple of beers, and you people tank the whole market!

Tomorrow I'm gonna start smoking weed and stay home.

At least the Fudd didn't shit in the floor while I was gone.

[Demeter]

117. It Wasn't Me--I Was Out Pumping Up the Economy

buying groceries.

[antigop]

96. Investors sue ex-Fannie Mae execs

http://news.bbc.co.uk/2/hi/business/7605972.stm

The investors claim Stephen Ashley, Daniel Mudd, Robert Levin and Steven Swad lied about the firm's finances, artificially inflating its share price.

The move came after the US government took over the firm, ousting Mr Ashley, Mr Mudd and Mr Levin from their jobs.

Fellow lender Freddie Mac was also bailed out in a move that could cost the US taxpayer $200bn (£113bn).

The class action says the four had been "motivated to misrepresent Fannie Mae's financial condition by their generous compensation packages".

[Roland99]

102. A great comment today by a CNBC analyst...

Something along the lines of Freddie Mac/Fannie Mae have less than 1.5 billion shares outstanding and over 4 billion shares have traded recently. Meaning the original shareholders are likely out of the game and speculators are holding the paper now and that they don't deserve to be bailed out.

[ozymandius]

106. I love Bill in Portland Maine's advice for the recently fired execs.

It starts with sympathy...

To: Daniel Mudd, former CEO, Fannie Mae
Richard Syron, former CEO, Freddie Mac

Dear Mr. Mudd and Mr. Syron,

I was sorry to hear that you got fired from your jobs at Fannie Mae and Freddie Mac. It's sad that the job market is so tough right now. Let's just hope it's a quick downturn so we can get our country moving again!

As someone who has himself been fired, I wanted to give you some tips for coping with your sudden unemployment.

...followed with level-headed rationalization...

Second, be very careful with your nest eggs. Richard, you're only getting $14 million in severance pay, retirement benefits and deferred compensation. Daniel, you’re only getting $9 million. The key is to make that money last as long as possible. Fact is, it could take awhile to score another job. So try and whittle down your expenses to $1 million per month. Eat out less. Carpool. Look for bargains at the Goodwill store. Turn the thermostat a bit lower this winter. And don’t add anything to your credit card that you can't pay off. That last one's a biggie. Oh, and sign up for unemployment benefits now---I think you can even do it online.

...and the coup-de-grace...

P.S. Forgot to mention one other tip: eat shit and beat yourself with a shovel. Hugs, B.

http://www.dailykos.com/storyonly/2008/9/9/7166/18368/910/591002

[Demeter]

118. That's What I'd Call a New York Minute

How long had they been working on that lawsuit before the takeover? Those things don't write themselves...

[Tandalayo_Scheisskopf]

99. YOW! They done pulled the chocks!

CLV08.NYM Crude Oil Oct 08 102.20 3:23pm ET Down 4.14 (3.89%)
HOV08.NYM Heating Oil Oct 08 2.903 3:23pm ET Down 0.1101 (3.65%)
NGV08.NYM Natural Gas Oct 08 7.422 3:23pm ET Down 0.105 (1.39%)
PNV08.NYM Propane Gas Oct 08 1.59 3:05pm ET 0.00 (0.00%)
RBV08.NYM RBOB Gasoline Oct 08 2.6526 3:27pm ET Down 0.0977 (3.55%)

[Hugin]

107. That is quite amazing!

Just in time for the elections.

Can't have people feeling oppressed... Wouldn't be prudent. Not prudent.

[Roland99]

100. At the close - Grab the mops and buckets. Lots of blood on the floor.

Dow1 1,230.73 -280.01
Nasdaq 2,209.81 -59.95
S&P 500 1,224.51 -43.28
10-year 3.60% -0.07
Oil $103.26 -$3.08
Gold $792.00 -$10.50

[TheWatcher]

104. But, But, Yesterday they said The Economy was SAVED!

They told us they'd FIXED everything!

The wouldn't lie to us would they?

[Yavin4]

105. They Have A Word For People Like You

Sucker!!!

To quote Animal House, "Hey, you fucked up. You trusted us."

[TheWatcher]

120. I take it that you failed to see the sarcasm.

If you look at my previous posts to SMW, I think you should probably retract that statement.

I'm about as much of a sucker as you are Brad Pitt. :)

[CatholicEdHead]

122. Just use this next time

:sarcasm:

[TheWatcher]

123. I usually do.

That is an oversight I will correct next time.

[ozymandius]

103. Jeepers! What happened to faith in Paulson and his hoary band?

Volume wayyy up like yesterday too.

Dow 11,230.73 Down 280.01 (2.43%)
Nasdaq 2,209.81 Down 59.95 (2.64%)
S&P 500 1,224.51 Down 43.28 (3.41%)
10-Yr Bond 3.596% Down 0.069
NYSE Volume 7,321,300,000
Nasdaq Volume 2,623,903,250

Stocks plummeted Tuesday due to continued concerns over financial firms and a sell-off in energy and material stocks. The S&P 500 fell 3.4%, ending the session at its lows, marking the largest one day percent decline since February 2007.

Weakness was broad-based, 91% S&P 500 components posted a loss and all ten of the economic sectors settled in negative territory. Volume was on the heavy side, with 1.7 billion shares exchanging hands on the NYSE.

Financials (-6.6%) acted as the main drag on the market, with Lehman Brothers (LEH 7.79, -6.36) sparking much of the selling interest. LEH plunged 45% as traders speculated about the firm's capital position after reports indicated that a state-run Korean bank is no longer in talks to buy some or all of Lehman. However, Reuters said that a Korean official denied the reports.

The drop in Lehman shares prompted Standard & Poor's to place Lehman on CreditWatch with negative implications, citing the increased difficulty in raising capital.

The financial sector fell across the board, giving back all of its Fannie Mae (FNM 0.98, +0.25) and Freddie Mac (FRE 0.88, unch) bailout gains and then some. Wells Fargo (WFC 31.17, -2.39) said it will take a noncash charge of $480 million related to preferred securities of Fannie and Freddie, which trade at only 5% to 10% of par value following the government's takeover on Sunday. AIG (AIG 18.32, -4.44) declined 20%, on fears that the insurance giant will have to raise more capital.

The energy sector (-6.4%) got clipped as energy commodities fell 3.6%. The losses came on expectations that Hurricane Ike would spare production in the Gulf of Mexico and OPEC would leave its oil output unchanged. Crude prices fell a steep 4.2% to $101.87 per barrel, which is the lowest level since April.

The materials sector fell 4.6% after commodities as a whole declined 1.7%. Steel companies were hit especially hard, falling 11.6%.

McDonald's (MCD 63.19, +0.77) bucked the negative trend after the company reported a hefty 8.5% year-over year increase in August worldwide comparable store sales. U.S. comparable sales rose 4.5%, as consumers flocked to McDonald's relatively inexpensive offerings, with strong demand for the company's breakfast menu.

In economic news, the July pending home sales index fell 3.2%, which was worse than the expected 1.5% decline. Pending sales fell 7.5% in the Northeast and 10.6% in the West, while the Midwest was up 2.8% and the South was flat. This reading does not include any effects of the Fannie and Freddie takeover.

As stocks fell, the long end of the Treasury curve rallied. The 10-year note rose 22 ticks, sending its yield down to 3.59%.

[DemReadingDU]

108. Nouriel Roubini: Comrades Bush, Paulson and Bernanke Welcome You to the USSRA

9/9/08 Comrades Bush, Paulson and Bernanke Welcome You to the USSRA (United Socialist State Republic of America) by Nouriel Roubini

The now inevitable nationalization of Fannie and Freddie is the most radical regime change in global economic and financial affairs in decades. For the last twenty years after the collapse of the USSR, the fall of the Iron Curtain and the economic reforms in China and other emerging market economies the world economy has moved away from state ownership of the economy and towards privatization of previously stated owned enterprises. This trends was aggressively supported the United States that preached right and left the benefits of free markets and free private enterprise.

Today instead the US has performed the greatest nationalization in the history of humanity. By nationalizing Fannie and Freddie the US has increased its public assets by almost $6 trillion and has increased its public debt/liabilities by another $6 trillion. The US has also turned itself into the largest government-owned hedge fund in the world: by injecting a likely $200 billion of capital into Fannie and Freddie and taking on almost $6 trillion of liabilities of such GSEs the US has also undertaken the biggest and most levered LBO (“leveraged buy-out”) in human history that has a debt to equity ratio of 30 ($6,000 billion of debt against $200 billion of equity).

So now Comrades Bush, Paulson and Bernanke (as originally nicknamed by Willem Buiter) have now turned the USA into the USSRA (the United Socialist State Republic of America). Socialism is indeed alive and well in America; but this is socialism for the rich, the well connected and Wall Street. A socialism where profits are privatized and losses are socialized with the US tax-payer being charged the bill of $300 billion.

This biggest bailout and nationalization in human history comes from the most fanatically and ideologically zealot free-market laissez-faire administration in US history. These are the folks who for years spewed the rhetoric of free markets and cutting down government intervention in economic affairs. But they were so fanatically ideological about free markets that they did not realize that financial and other markets without proper rules, supervision and regulation are like a jungle where greed – untempered by fear of loss or of punishment – leads to credit bubbles and asset bubbles and manias and eventual bust and panics.

The ideologue “regulators” who literally held a chain saw at a public event to smash “unnecessary regulations” are now communists nationalizing private firms and socializing their losses: the bailout of the Bear Stearns creditors, the bailout of Fannie and Freddie, the use of the Fed balance sheet (hundreds of billions of safe US Treasuries swapped for junk toxic illiquid private securities), the use of the other GSEs (the Federal Home Loan Bank system) to provide hundreds of billions of dollars of “liquidity” to distressed, illiquid and insolvent mortgage lenders, the use of the SEC to manipulate the stock market (restrictions on short sales), the use of the US Treasury to manipulate the mortgage market (Treasury will now for the first time outright buy agency MBS to manipulate and prop up this market), the creation of a whole host of new bailout facilities (TAF, TSLF, PDCF) to prop and rescue banks and, for the first time since the Great Depression,to bail out non-bank financial institutions, and a whole range of other executive and legislative actions (including the recent bill to provide a public guarantee to mortgage for banks willing to reduce their face value).

This is the biggest and most socialist government intervention in economic affairs since the formation of the Soviet Union and Communist China. So foreign investors are now welcome to the USSRA (the United Socialist State Republic of America) where they can earn fat spreads relative to Treasuries on agency debt and never face any credit risks (not even the subordinated debt holders who made a fortune yesterday as those claims were also made whole).

Like scores of evangelists and hypocrites and moralists who spew and praise family values and pretend to be holier than thou and are then regularly caught cheating or cross dressing or found to be perverts these Bush hypocrites who spewed for years the glory of unfettered wild west laissez faire jungle capitalism (and never believed in any sensible and appropriate regulation and supervision of financial markets) allowed the biggest debt bubble ever to fester without any control, have caused the biggest financial crisis since the Great Depression and are now forced to perform the biggest government intervention and nationalizations in the recent history of humanity, all for the benefit of the rich and the well connected. So Comrades Bush and Paulson and Bernanke will rightly pass to the history books as a troika of Bolsheviks who turned the USA into the USSRA. Fanatic zealots of any religion are always pests that cause havoc and destruction with their inflexible fanaticism; but they usually don’t run the biggest economy in the world. But these laissez faire voodoo-economics zealots in charge of the USA have now caused the biggest financial crisis since the Great Depression and the nastiest economic crisis in decades. So let them be shamed in public for their hypocrisy and zealotry that has caused so much financial and economic damage.


http://www.rgemonitor.com/roubini-monitor/253529/comrades_bush_paulson_and_bernanke_welcome_you_to_the_ussra_united_socialist_state_republic_of_america

***********

wow

[ozymandius]

111. So eloquent.

Dr. Roubini forcefully articulates what I tried to communicate yesterday. This is socialism in the soviet sense. Dr. Roubini has the psychotic Bush experimentation covered at every angle.

[RUMMYisFROSTED]

127. What's more radical?

The privatization or the re-socialization?

It's arguable that the initial privatization was far more radical than the re-socialization.

Either way, we lose.

[fedsron2us]

135. A Bourbon capitalist aristocracy being maintained by taxes on the peasantry

We know how this all ends up.

[Roland99]

124. This just might be the catalyst we've all been afraid of.

The freefall seems more like a probability than a possibility.

[roamer65]

133. It isn't socialism, Roubini. It's FASCISM.

It's a crony capitalist bailout.

[Tansy_Gold]

137. THAT'S WHAT I SAID YESTERDAY.

And yes, I'm shouting. And no, I'm not apologizing.

[ozymandius]

141. No need to apologize.

You're dead-on right. It is Fascism. It infuriates me that this administration has gone beyond fascism. They've co-opted the Stalinist habit of lying about everything. GDP is a lie. Inflation is a lie. The general health of every market is a lie. Lie. Lie. Lie.

They've sought to create their own reality as the Soviets did. They piss on people and insist it's rain.

[Hugin]

144. Corporatists is the word I prefer... What with Mooseolini waiting in the wings. n/t

[RUMMYisFROSTED]

126. Dead Mac bounce.

[neverforget]

134. That picture is hilarious!

[UpInArms]

128. Salesforce.com to replace Freddie Mac on S&P 500

23. Salesforce.com to replace Freddie Mac on S&P 500
5:25 PM ET, Sep 09, 2008

[ozymandius]

130. Sounds like they skipped the formality of Musical Chairs rules.

The S&P is quite famous for doing this. The S&P powers-that-be would list Baby Seal Hunters, Inc. if the company boosted the daily average.

[cosmicdot]

136. Bad Moon Rising

This biggest bailout and nationalization in human history comes from the most fanatically and ideologically zealot free-market laissez-faire administration in US history. - Roubini


http://www.youtube.com/watch?v=5BmEGm-mraE 2:19

Creedence Clearwater Revival 1969

Bad Moon Rising

Lyrics:

I see the bad moon rising.
I see trouble on the way.
I see earthquakes and lightnin'.
I see bad times today.

CHORUS:

Don't go around tonight,
Well, it's bound to take your life,
There's a bad moon on the rise.

I hear hurricanes ablowing.
I know the end is coming soon.
I fear rivers over flowing.
I hear the voice of rage and ruin.

CHORUS

All right!

Hope you got your things together.
Hope you are quite prepared to die.
Looks like we're in for nasty weather.
One eye is taken for an eye.

CHORUS

CHORUS

`````````````````````````````````````````

[Dr.Phool]

138. Bloodbath continues in Asian markets.

Hang Seng down over 2%

Nikkei down over 1%

[Demeter]

139. They're Blaming Tuesday's Bloodbath on Lehman Bros.

Fears on Lehman, financials send market into skid By Steven C. Johnson

http://news.yahoo.com/s/nm/20080909/bs_nm/markets_stocks_dc_32

Stocks plunged on Tuesday, driving the benchmark S&P 500 to its worst day in one and a half years, as concern about Lehman Brothers' ability to raise much-needed capital reignited fears about the broader financial sector...Shares of Lehman (LEH.N), the No. 4 U.S. investment bank, skidded 45 percent and renewed worries about other financial firms' ability to contend with mortgage losses. The S&P financial index (.GSPF) fell 6.6 percent. Lehman's percentage slide was its biggest since it went public in 1994, and fears about its survival doused Monday's optimism on the government's bailout of home finance firms Fannie Mae (FNM.N) and Freddie Mac (FRE.N) in an effort to boost the slumping housing market.

EVIDENTLY THEY DON'T RATE A BAILOUT LIKE BEAR STEARNS OR FANNIE AND FREDDIE.....


AND OF COURSE THE CONTINUING HOUSING CRISIS AND THE DISAPPOINTMENT THAT OIL PRICES ARE DECLINING DIDN'T HELP!


But I'd just call it Reality, Checking In.

[Roland99]

140. Rep. Pete King (R-NY) was spewing on Hardball about the "Housing Crisis" ... ugh.

It's not the "housing" crisis...it's the entire financial system crisis!!