STOCK MARKET WATCH, Thursday August 30

[ozymandius]

Source: DU

Thursday August 30, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 511 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2428 DAYS
WHERE'S OSAMA BIN-LADEN? 2140 DAYS
DAYS SINCE ENRON COLLAPSE = 2101
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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

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

AT THE CLOSING BELL ON August 29, 2007

Dow... 13,289.29 +247.44 (+1.90%)
Nasdaq... 2,563.16 +62.52 (+2.50%)
S&P 500... 1,463.76 +31.40 (+2.19%)
Gold future... 675.40 +1.90 (+0.28%)
30-Year Bond 4.88% +0.02 (+0.35%)
10-Yr Bond... 4.55% +0.02 (+0.51%)






GOLD, EURO, YEN, Loonie and Silver

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PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [email protected]

For information on protests and other actions Citizens For Legitimate Government

---

Read more: DU

[ozymandius]

1. Market WrapUp

Credit Erosion: The Worst Is Yet To Come
BY CHRIS PUPLAVA

As highlighted last week (08.22.07 WrapUp), the housing recession has spilled over, affecting consumer spending levels. This negative spillover will only intensify as the adjustable-rate mortgage (ARMs) reset peak still continues later in the year. This is coming at a time where the state of the economy and consumer are worse off than in prior recessions.

What has been in mainstream news over the past month is the stunning credit erosion, where toxic subprime mortgage-backed securities (MBS) have been illiquid and are leading to substantial losses, not only in the U.S., but also abroad.

In response to the frozen market for subprime MBS’s, the Fed stepped in as buyer of last resort through the Repo (repurchase agreements) market by shifting the assets it takes as collateral for short term loans away from agency securities and treasuries to MBS’s.

-cut-

The deterioration in the subprime market is going to get worse before it gets better as home prices continue to slip, leaving many homeowners that took an ARM to buy their home with negative equity, making it even harder for them to refinance at a time when banks are raising lending standards. Just yesterday Standard & Poor’s released second quarter data for their nationwide housing index that showed the steepest decline since it started its index 20 years ago.

-cut-

TODAY'S MARKET

The markets retraced yesterday’s losses as bargain hunters initially pushed the markets higher in early morning trading. Stocks later surged on news that Bernanke said in a letter to Sen. Charles Schumer, D-N.Y., that Fed policymakers are "prepared to act as needed" if the market's turbulence hurts the economy, helping pad the market's gain. Action was put behind those words as the Federal Reserve Bank of New York said today it would inject $5.25 billion through a one-day repurchase agreement, where it buys that amount in collateral from dealers who then deposit the money into commercial banks.

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

[LEW]

12. oh goodie, more bail out for the banks

Still haven't seen any kind of news or action on a bailout for homeowners. Truely not expecting one, more of the same. Banks and mortgage companies made billions and billions on all the fees and interest earned on these loans, and still can't stay solvent.

[UpInArms]

14. Here's the spew: Bernanke: Looking to help homeowners

http://news.yahoo.com/s/ap/20070829/ap_on_bi_ge/bernanke_mortgages

WASHINGTON - Federal Reserve Chairman Ben Bernanke is suggesting that policymakers look for ways to encourage a wider range of mortgages geared for low income and other borrowers who have been hard hit by the housing slump and credit crunch.

Bernanke, in a letter to Sen. Charles Schumer, D-N.Y., that was released Wednesday, said the Fed is keeping close tabs on financial markets and is "prepared to act as needed" to ensure spreading credit problems that have rocked Wall Street in recent weeks don't hurt the economy. It's a message the central bank has been sending as the markets have grown more turbulent.

Foreclosure and late payments have spiked especially for "subprime" borrowers with blemished credit histories or low incomes. Higher interest rates and weak home values have made it impossible for some to pay or to keep up with their monthly mortgage payments. Some overstretched homeowners can't afford to refinance or even sell their home.

Bernanke said the development of "a broader range of mortgage products which are appropriate for low- and moderate-income borrowers, including those seeking to refinance" might help the situation. "Such products could be designed to avoid or mitigate the risk of prepayment shock and to be more transparent with respect to their terms," Bernanke wrote in the letter, which was dated Monday.

Mortgage foreclosures and late payments are expected to worsen in the next year and a half as low "teaser" rates that lured in borrowers reset to higher rates, socking homeowners. Some 2 million adjustable rate mortgages are expected to reset to higher rates this year and next. Steep penalties for prepaying mortgages have added to some homeowners' headaches.

Bernanke said the Federal Housing Administration, a government agency that insures home loans, might be able to help.

...more...

:shrug:

[Ghost Dog]

24. Big Fed cuts no answer to mkt crisis-OECD official

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=2007-08-30T105635Z_01_L30811621_RTRIDST_0_USA-FED-OECD.XML

PARIS, Aug 30 (Reuters) - The U.S. Federal Reserve should avoid aggressive interest rate cuts to bail out investors hit by the recent financial market crisis, a senior OECD official said on Thursday.

"I really hope the Fed doesn't start massively easing monetary policy to get out of this problem," Adrian Blundell-Wignall, deputy director of the OECD told a conference outside Paris run by French employers federation Medef.

"Because the size of the bubble will just keep getting bigger and when we finally have to face it, it will be an even bigger problem," he said.

/...

[UpInArms]

44. homeowners don't need help - U.S. home prices grow 3.2% in past year, OFHEO says

http://www.marketwatch.com/news/story/us-home-prices-grow-32/story.aspx?guid=%7B7B75B265%2D76A1%2D42C0%2DA91F%2DBAD05CEB44DE%7D

WASHINGTON (MarketWatch) -- U.S. home prices rose 3.2% in second quarter compared with a year earlier, the slowest price gains in 10 years, according to a quarterly index released Thursday by the Office of Federal Housing Enterprise Oversight. Prices increased 0.1% from the first quarter to the second quarter. The index is based on repeat transactions for the same homes for mortgages covered by Fannie Mae and Freddie Mac. A separate index that excludes refinancings and includes only purchases rose 2.6% from a year ago. Five states showed lower prices over the past year: Nevada, Michigan, California, Massachusetts and Rhode Island. Utah had the best gains at 15.3%, followed by other states in the West.

See? All is well! :sarcasm:

[UpInArms]

47. Here's a different take on those numbers: US house price appreciation slowest since '97-OFHEO

http://www.reuters.com/article/bondsNews/idUSNYA00014720070830

NEW YORK, Aug 30 (Reuters) - U.S. house prices rose 3.2 percent in the second quarter from a year ago, representing the slowest appreciation in a decade, the Office of Federal Housing Enterprise Oversight said on Thursday.

Compared with the first quarter of 2007, house prices increased by 0.1 percent, the housing finance company regulator said in a statement on its Web site.

[donkeyotay]

81. Bottom line in how rich get richer while taxpayers get screwn

In response to the frozen market for subprime MBS’s, the Fed stepped in as buyer of last resort through the Repo (repurchase agreements) market by shifting the assets it takes as collateral for short term loans away from agency securities and treasuries to MBS’s.

The paper is worthless, and "we" are buying it. The profits have been made, the deals done, the fees collected, the CEOs and PE managers have made billions, and now the bag is handed off to us. Privatize the profits, socialize the loses. This whole thing - which now they say "no one saw coming" just like they did with the war - was based on evading regulation by creating "new finance" which is as old as crime.

[ozymandius]

2. Today's Reports

8:30 AM GDP-Prel. Q2
Briefing Forecast 4.0%
Market Expects 4.1%
Prior 3.4%

8:30 AM Chain Deflator-Prel. Q2
Briefing Forecast 2.7%
Market Expects 2.7%
Prior 2.7%

8:30 AM Initial Claims 08/25
Briefing Forecast 320K
Market Expects 320K
Prior 322K

10:00 AM Help-Wanted Index Jul
Briefing Forecast 25
Market Expects 25
Prior 26

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

[UpInArms]

25. US 2Q GDP @ 3.7% - core inflation lowest in 4 yrs

01. U.S. 2Q final sales revised up to 3.7%, vs. 3.2% previously
8:30 AM ET, Aug 30, 2007 - 33 seconds ago

02. U.S. 2Q core inflation lowest in 4 years
8:30 AM ET, Aug 30, 2007 - 33 seconds ago

03. U.S. 2Q nonresidential investment up 11.1%
8:30 AM ET, Aug 30, 2007 - 33 seconds ago

04. U.S. 2Q residential investment falls 11.6%
8:30 AM ET, Aug 30, 2007 - 33 seconds ago

05. U.S. 2Q consumer spending rises 1.4%
8:30 AM ET, Aug 30, 2007 - 33 seconds ago

06. U.S. 2Q corporate before-tax profits up 6.4% quarterly rate
8:30 AM ET, Aug 30, 2007 - 33 seconds ago

07. U.S. 2Q GDP revisons due to trade, investment in structures
8:30 AM ET, Aug 30, 2007 - 33 seconds ago

08. U.S. 2Q core PCE price index revised down to 1.3% vs. 1.4%
8:30 AM ET, Aug 30, 2007 - 33 seconds ago

09. U.S. 2Q GDP revised up to 4% vs. 3,4%, below 4.1% expected
8:30 AM ET, Aug 30, 2007 - 33 seconds ago

[Roland99]

27. Growth revised higher to 4% in second quarter..... WHEEEEEEEE!!!!!

http://www.marketwatch.com/news/story/us-growth-revised-higher-4/story.aspx?guid=%7B3D6EC21E%2D4DEE%2D41E6%2DB210%2DA7092FE3006F%7D

The U.S. economy bounced back in the second quarter, growing at a 4% annual real growth rate, the Commerce Department reported Thursday.

The upward revision to second-quarter gross domestic product is likely to have a minimal impact on financial markets, however, which are preoccupied by the credit crunch.

The upward revision to GDP was largely due to an improved trade balance and to the biggest increase in investments in commercial buildings in 26 years.

:wtf:




Sooo...corporations are booming in cash because of, what, foreign buyers due to the dollar being in the crapper??

CEOs making more in a DAY than the average worker in a YEAR??


Guess I better go outside and see if there are any Flappers walking about and see if I can find me a speakeasy!!!

It's the Roaring 20s!!

WHEEEEEEEE!!!!!

[UpInArms]

26. Initial Claims in at 334,000

10. U.S. 4-wk. avg. continuing claims up 11,250 to 2.56 mln
8:30 AM ET, Aug 30, 2007 - 2 minutes ago

11. U.S. continuing jobless claims rise 13,000 to 2.57 mln
8:30 AM ET, Aug 30, 2007 - 2 minutes ago

12. U.S. 4-wk. avg. initial jobless claims up 6,250 to 324,500
8:30 AM ET, Aug 30, 2007 - 2 minutes ago

13. Initial claims hit highest level since mid-April
8:30 AM ET, Aug 30, 2007 - 2 minutes ago

14. U.S. initial jobless claims rise 9,000 to 334,000
8:30 AM ET, Aug 30, 2007 - 2 minutes ago

[UpInArms]

85. US Newspaper Help-Wanted Index Dips In July - the lowest reading since July 1958

hat tip to purveyor for this thread

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2972656

('cause I was working and missed the report this morning)

http://www.reuters.com/article/economicNews/idUSNAT00311520070830

NEW YORK, Aug 30 (Reuters) - The number of help-wanted ads printed in U.S. newspapers fell in July as job growth slowed in the United States, a private research group said on Thursday.

The Conference Board said its gauge measuring help-wanted ad volume was 25 in July, following 26 in June, which the Conference Board earlier said marked the lowest reading since July 1958. It was 31 in July 2006.

"The consumer sector has been holding up all year because the labor market has held up," said Ken Goldstein, labor economist at the Conference Board, in a statement.

"Job, but not wage, growth has slowed a little since the spring and it could slow a little more."

...more...

[ozymandius]

3. Oil prices near $74 a barrel

Oil prices continued to climb Thursday after jumping in the previous session on unexpected declines in U.S. refinery utilization rates and crude and gasoline inventories.

Light, sweet crude for October delivery rose 36 cents to $73.87 a barrel in electronic trading on the New York Mercantile Exchange, midday in Europe. The contract rose $1.78 to settle at $73.51 a barrel Wednesday.

The crude and gasoline inventory declines in the U.S. suggest the refining industry is easing back from what had been a scramble to produce more gasoline to supply the peak summer driving season, which ends this weekend.

The U.S. Energy Department's Energy Information Administration reported that refinery utilization rates fell 1.3 percentage points to 90.3 percent of capacity in the week ended Aug. 24. Analysts surveyed by Dow Jones Newswires, on average, had expected no change.

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

[UpInArms]

16. a-a-a-ackkkk!

(puking noises in the background)

[UpInArms]

37. Oil dips but holds above $73

http://www.reuters.com/article/hotStocksNews/idUSSP5715420070830

LONDON (Reuters) - Oil retreated when the New York market opened on Thursday, handing back some of the previous session's two-percent gain, but analysts said declining crude stocks in top consumer the United States should limit losses.

U.S. crude was down 40 cents at $73.11 a barrel by 10:09 a.m. EDT, having jumped $1.78 on Wednesday to its highest settlement in over three weeks.

London Brent crude was down 43 cents at $71.70.

Wednesday's price surge followed an unexpectedly steep drop in U.S. crude oil stocks in the week to August 24. Gasoline stocks fell to a record low of just 20 days of supply.

U.S. crude stocks are still 10 percent above the five-year average for the time of year but some analysts forecast supply could struggle to keep pace with demand unless the Organization of the Petroleum Exporting Countries raises production.

...more...

[ozymandius]

4. Chineses finance minister resigns

BEIJING - Government officials said Thursday that Finance Minister Jin Renqing resigned for "personal reasons," amid concerns of surging inflation and just weeks ahead of an expected reshuffling of top government positions.

The State Council, or Cabinet, transferred Jin to a government think tank, where he will be deputy chief, a ministerial-level position.

The official Xinhua News Agency said that Xie Xuren, 59, director of the State Administration of Taxation, replaced Jin. Xie has been director of the tax administration since March 2003, Xinhua said. He is an alternative member of the party's Central Committee.

No other details were given in the statement announcing Jin's resignation, read over the telephone by a spokeswoman speaking on condition of anonymity in line with department policy. That followed several days of rumors that Jin would step down. He has been finance minister since 2003.

http://news.yahoo.com/s/ap/20070830/ap_on_bi_ge/china_finance_minister_resigns

[UpInArms]

10. China says toy recall scare shows protectionist agenda

http://news.yahoo.com/s/nm/20070830/bs_nm/china_safety_dc

BEIJING (Reuters) - Mattel (MAT.N) has only itself to blame for a huge toy recall that has stoked global alarm about Chinese-made goods, state media said on Thursday, charging that a slew of foreign safety scares had exposed a protectionist agenda.

Mattel Inc, the world's largest toymaker, recalled over 18 million Chinese-made toys this month because of risks from small magnets that can injure children if swallowed, just two weeks after it recalled 1.5 million toys due to fears over lead paint.

Coming in the wake of warnings over Chinese-made toothpaste, pet food, tires, eels and seafood, and lethal chemicals that had found their way into medicine, the toy recall has magnified calls in Washington for much tougher scrutiny of such imports.

The overseas edition of the People's Daily, the ruling Communist Party's official paper, continued Beijing's recent counter-offensive, putting the spotlight on multinationals that have used China as a production base.

"If it comes down to blame, then it all lies with the U.S. side," the paper said of the Mattel magnet recall, noting that the problem was a design defect. "The Chinese manufacturer only produced according to those specifications."

...more...

China has a one-child policy and disapproves of the U.S. having so many children :eyes:

[UpInArms]

34. Toys 'R' Us recalls 27,000 Chinese-made painting cases - lead paint

03. Toys 'R' Us recall due to lead paint concern
8:58 AM ET, Aug 30, 2007 - 36 minutes ago

04. Toys 'R' Us recalls 27,000 Chinese-made painting cases
8:58 AM ET, Aug 30, 2007 - 36 minutes ago

[UpInArms]

38. Toys 'R' Us to recall 27,000 coloring cases

http://www.reuters.com/article/topNews/idUSWNAS317620070830

(Reuters) - Retailer Toys 'R' Us Inc has voluntarily recalled 27,000 units of Imaginirium wooden coloring cases that were made in China, due to violation of lead paint standard, the U.S. Consumer Product Safety Commission said.

The agency said the printed ink on the outer packaging of the wood case contained lead. Also, some of the black watercolor paint contained excessive levels of lead.

... a bit more...

[ozymandius]

45. It's a protectionist agenda alright.

We at the ozymandius household do not buy their crap to protect our child from dangerous chemicals. It's protectionism gone local.

[ozymandius]

5. Mortgage job losses surpass 40,000

CHARLOTTE, N.C. - At the North Carolina offices of mortgage lender HomeBanc Corp., Archie Clark is the only employee left. But in a few days, he'll be gone, too. When Clark finishes helping movers from the company's Atlanta headquarters collect computers and other property, he'll join the more than 25,000 workers nationwide who have lost jobs in the financial services industry since the beginning of the month — with more than half coming since last Friday.

With few exceptions, the cuts are the direct result of woes in the nation's housing market.

More layoffs are announced daily. On Wednesday, Lehman Brothers Holdings Inc. closed its "subprime" mortgage business, laying off 1,200 workers at 23 offices; Scottsdale, Ariz.-based 1st National Bank Holding Co. closed its wholesale mortgage unit and cut 541 jobs, and Accredited Home Lenders Holding Co. added 1,600 positions to the heap. The night before, banking giant HSBC said it would close a main financing office and cut 600 jobs.

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

[ozymandius]

6. H&R Block reopens Option One talks, posts big loss

NEW YORK (Reuters) - H&R Block Inc (HRB.N) said on Thursday it is renegotiating the planned sale of its Option One Mortgage Corp subprime lending unit to Cerberus Capital Management LP, a move that casts doubt on the largest U.S. tax preparer's ability to complete the sale.

Kansas City, Missouri-based H&R Block agreed in April to sell Option One to Cerberus, a private equity firm, for an estimated $1 billion, but on Thursday said some closing conditions have not been met.

It is in talks to divest or wind down Option One's mortgage lending business, and might incur costs in doing so. Cerberus would buy Option One's loan servicing operations.

The company also said its quarterly loss more than doubled to $302.6 million, or 93 cents per share, from $131.4 million, or 41 cents, a year earlier, hurt by Option One losses. The loss from continuing operations, excluding Option One and two other businesses, was $109.8 million, or 34 cents per share.

http://news.yahoo.com/s/nm/20070830/bs_nm/hrblock_results_dc_2

[Demeter]

7. And I thought I was cynical...What a cartoon!

[fasttense]

9. I love that sign on the falling apart house.

Loans Sweet Loans.:rofl:

[AnneD]

77. Morning Marketeers.....

:donut: and lurkers. One of the yet to be calculated effects of the market will be on higher education. No second mortgages to pay for Jr's tuition:( And of course with the student loan sharks out there, this puts college kids and their families at risk. What a mess. :eyes:

I failed to mention the anniversary of Katrina yesterday. They came out with a survey yesterday of Houstonians. Over 60% said that crime went up after Katrina and that it was a mistake to take the evacuees in.

Now, as someone whose family went though 2 muggings (and we are fairly certain they were from NOLA), I will say that the crime level went up. But I will also say that it was going up anyway to begin with due to other factors. Some of the more serious crimes were evacuee on evacuee (gang bangers trying to finish the job). If it was all their fault-the crime level would have risen proportionately to what it was in NOLA-and it didn't. Our police are not corrupt like the NOLA were and those committing crimes were taken care of in short order. We are now back to something more reasonable.

Our schools were bursting at the seems and it took forever for the Government to pony up like they promised-a common problem on any Katrina related expense. Katrina also brought to light how truly bad the public schools were. Parents and kids learned more than a few lessons. I had several parents tell me that when they got back...there would be hell to pay. We busted our butts to bring them up to a national standard. Of course, change was hard, esp for our teens. There were several incidences of fighting but we tried our best to prevent it.

Housing....well we had plenty of it and their presence did improve vacancy rates. Many decided to move here permanently and that helped our housing market. As long as developers don't over build we might survive this RE bubble. Unfortunately however, these guys have no sense of history so I think we will have our bust after everyone else does.

Jobs. Lots of NOLA claim prejudice etc. I am sure there might be. But how can I be sure you will stay after I train you if your cell phone number is a 409 area code. Houston is more business oriented-not tourist party oriented. Some, in fact many evacuees were lucky that they had offices here and those folks never lost much time. I think some evacuees came in with a chip on their shoulder and thought that we were giving hand outs instead of hand ups. We have tried to help everyone. It may not have been what you wanted to do, but it's a starting point.

But now as much as we gave, Houston got. Our schools got a serious upgrade, as did our hospitals. And our food and music.....there we really pulled a coup. Our clubs have never had such lively music and the food is to die for.

So out of a tragedy, came an opportunity and I for one welcome our new neighbours. Let me say that all in all, we received more than we ever gave and if it were up to me-I'd want us to do it all again.


Happy hunting and watch out for the bears.

[UpInArms]

8. dollar watch

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

Last trade 80.907 Change +0.252 (+0.31%)

Big Rally in Carry Trades and Dow Despite Bad Data: What is Happening?

http://www.dailyfx.com/story/bio1/Big_Rally_in_Carry_Trades_1188423312124.html

Carry trades rebounded strongly as the Dow came close to erasing all of Tuesday’s losses. The only piece of economic data released from the US was mortgage applications which dropped for the second week in a row. Any news from the financial sector only provided more cause for concern. UK hedge fund Cheyne Financial may be forced to liquidate up to $6B in assets due to losses in the commercial paper market while Basis Yield Alpha Fund filed for bankruptcy. Everyone is also beginning to shift their focus to this quarter’s earning releases. Moody’s and Standard and Poor’s both warned that banks could suffer double-digit losses due to falling revenue and big write offs. So why has the Dow rallied so much today? There are only two real explanations. The first is that the market expects tomorrow’s second quarter GDP report to be revised up sharply. Although a valid reason, the backward looking GDP report does not reflect the recent turmoil that we have had in the financial markets. The second explanation is Bernanke’s comment that there is no need to lift portfolio caps on Fannie Mae and Freddie Mac. This could suggest that the Fed has other ways to boost growth and may not need to resort to raising portfolio limits on GSEs. The lower volume in the market is also contributing to the unusual swings in the currency and stocks markets and because of this, it is not time to become complacent. The problems are increasing as risks continue to grow, but traders are simply ignoring them. Judgment day will come after the Labor Day holiday in the US. The slide in the dollar today indicates that risk appetite is returning, but for the time being, the downtrend in most of the high yielding currency pairs remains intact. The rallies that we have seen so far should only be perceived as a rebound within an overall downtrend.

...more...

Dollar Firms as Fed Rate Cut in Question - Start of a New Trade?

http://www.dailyfx.com/story/dailyfx_reports/daily_brief/Dollar_Firms_as_Fed_Rate_1188469677167.html

Generally a quiet night in the currency markets but the greenback was boosted by several reports that the Fed may not necessarily cut rates at the upcoming September 18th meeting of the FOMC. Two famous Fed watchers – Greg Ip of the Wall Street Journal and Bloomberg’s John Berry both suggested that the Fed may stand pat in light of the fact that global markets appear to have stabilized after the US Central Bank cut the discount rate by 50% last Friday.

The assumption that markets will remain stable is a huge one t make. Nothing will bring back the specter of a rate cut faster than a 1000 point drop in the Dow. Indeed the lack of Fed cut may precipitate further weakness in equities forcing the Fed’s hand to loosen monetary policy. However, for the time being with the Dow comfortably holding the 13,000 level, the interest rate story may become the new dominant trading theme in the currency market next week.

For the past two weeks, all of FX trading has been governed by one dynamic only – risk or no risk. As carry trade rallied the dollar gained against the yen and lost against all other G10 currencies. As risk aversion swept the market the reverse took place. Tonight for the first time since turbulence hit the credit markets, the dollar held its own against the yen while gaining on all of it G10 counterparts as interest rate differentials once again came into focus. Indeed, if the Fed holds rates steady while the ECB shies away from a rate hike next week, the greenback may see more strength as the rate spread between the two currencies will not contract any further for the time being.

There is good reason to believe that the ECB may remain stationary in September. It appears as though EZ growth may have peaked earlier in the year as today’s eco data showed that German unemployment rolls were reduced by smaller than expected –15K. Conditions in the 13 member region remain expansionary but with growth decelerating the ECB may feel pressure to maintain a neutral monetary policy until it sees stronger signs of a pick up in demand.

Meanwhile US sees Q2 GDP revisions which are expected to raise the growth rate above 4%. The GDP figures however are backward looking and it will be interesting to see how equity markets react to the notion of no rate cut. If stocks hold firm the greenback may see more bids on the assumption that the worst of the credit market volatility is behind us – but we are skeptical that this will indeed be the case as we head into the fall.

...more...

[Ghost Dog]

23. Yen strengthens as risk aversion in focus

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070830:MTFH76445_2007-08-30_11-44-01_L30819472&type=comktNews&rpc=44

LONDON, Aug 30 (Reuters) - The yen rose broadly on Thursday, recovering from the previous day's sharp drop, and high yielding currencies fell as the spotlight swung back to troubled credit markets with investors cautious about risky carry trades.

The yen brushed off a rebound in European and Asian stocks and climbed after the Royal Bank of Scotland (RBS.L: Quote, Profile , Research) said it was cutting back its collateralised debt obligations unit after a drop in market appetite, confirming the departure of a leading CDO executive.

High-yielding currencies also took a hit after an Australian hedge fund filed for bankruptcy protection on Wednesday in the United States, while smaller consumer finance companies in New Zealand have collapsed in the past week.

Traders cited rumours in the market of some large European banks suffering big losses in the credit markets, driving the euro down more than 1 percent against the yen and the New Zealand dollar down more than 2 percent.

The fall in the single European currency came just a day after it posted its biggest one-day rise versus the yen since March 2004 as a surge in Wall Street shares helped relieve some of the fears about a worsening credit squeeze.

"Yesterday's move was somewhat overdone and risks remain firmly on the downside," said Derek Halpenny, senior currency economist at BTM UFJ. Continued...

/...

[UpInArms]

11. Fed not rushing to bail out investors with rate cut: report

http://news.yahoo.com/s/nm/20070830/bs_nm/usa_fed_wsj_dc

FRANKFURT (Reuters) - The U.S. Federal Reserve is not rushing to cut benchmark interest rates because it wants to break investors of the view that the central bank is there to bail them out, an article in the Wall Street Journal said on Thursday.

Fed watcher Greg Ip, without quoting specific sources, said Fed Chairman Ben Bernanke was keen to draw a distinction between keeping financial markets ticking over and ensuring a sound economy.

The article said there was a perception, while Alan Greenspan was chairman of the Fed, that the Fed would react to problems of financial stability by cutting rates but that Bernanke was keen to break the automatic assumption that market convulsions lead to interest rate cuts.

The Fed cut the rate it charges banks for direct loans earlier this month amid financial market turbulence but has made no change to the benchmark Fed funds rate of 5.25 percent.

"Officials acknowledge the perception of bailing out investors exists and if allowed to grow, could erode the credibility they need for keeping inflation low and encourage lax attitudes toward risk," the article said.

...more...

"could erode the credibility"????

[UpInArms]

13. Bernanke indicates Fed to act 'as needed' to steady economy

http://news.yahoo.com/s/afp/20070829/bs_afp/useconomybankrate

WASHINGTON (AFP) - Federal Reserve chairman Ben Bernanke said in a letter to a US senator that the central bank would act "as needed" to ease the impact of a credit squeeze on the US economy.

The letter by Bernanke, dated Monday, was in response to two letters from Senator Chuck Schumer earlier this month expressing concern about the impact of tighter credit.

"I want to assure you that the Federal Reserve, in cooperation with other federal agencies, is closely monitoring developments in financial markets," Bernanke wrote.

Bernanke indicated that the Fed had already taken steps to increase liquidity in the markets by cutting the discount rate for direct loans to banks by the Fed.

The central bank chief added that the Fed "is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets."

...more...

[UpInArms]

15. Sony Under Fire for USB Drive Rootkits

http://news.yahoo.com/s/nf/54949

In 2005, Sony BMG faced a firestorm of consumer outrage, lawsuits, and government investigations when it was revealed that the company had released music CDs containing rootkit software that would install on a Windows PC when the CD was loaded. A rootkit is a set of clandestine software programs that can interfere with an operating system and potentially open security holes.

After facing class-action suits in several states, as well as action from state attorneys general and the Federal Trade Commission, Sony in January 2007 announced a recall of more than 50 albums that contained rootkits and a settlement with the FTC by which Sony agreed to pay consumers $150 to repair damage to their computers. In announcing the settlement, FTC Chair Deborah Platt Majoras said, "Installations of secret software that create security risks are intrusive and unlawful."

<snip>

The fingerprint reader software included with the product hides itself from Windows, as well as from some antivirus scanners, making it "possible for malware to use the hidden directory as a hiding place," F-Secure said. The company said the latest versions of MicroVault software also contain the hiding functionality.

"It is our belief that the MicroVault software hides this folder to somehow protect the fingerprint authentication from tampering and bypass," F-Secure said. Conceding that fingerprint ID software would require some secure authentication scheme, the firm said, "rootkit-like cloaking techniques are not the right way to go here."

Andrew Storms, a security analyst with nCircle in San Francisco, said that Sony "more than likely" used the hidden directory to secure the operations of the fingerprint reader on the memory card. "The threat to the consumer is that it may also be used by enterprising malware authors," he said. "The hidden directory is now a known quantity. Virus authors can instruct their code to first try this hidden directory as resting place for their malware, which subsequently will become undetectable to antivirus software."

...more...

okay - color me stupid - can someone explain this (like you would to a child)?

[UpInArms]

17. CEO pay and benefits on the rise: report

http://news.yahoo.com/s/nm/20070829/bs_nm/usa_economy_pay_dc

WASHINGTON (Reuters) - Top executives at major businesses last year made as much money in one day of work on the job as the average worker made over the entire year, according to a report released on Wednesday.

Chief executive officers from the nation's biggest businesses averaged nearly $11 million in total compensation, according to the 14th annual CEO compensation survey released jointly by the Institute for Policy Studies based in Washington and United for a Fair Economy, a national organization based in Boston.

At the same time, workers at the bottom rung of the U.S. economy received the first federal minimum wage increase in a decade. But the new wage of $5.85 an hour, after being adjusted for inflation, stands 7 percent below where the minimum wage stood a decade ago.

"CEO pay, over that same decade, has increased by roughly 45 percent," the study found.

On average, CEOs at major American corporations saw $1.3 million in pension gains last year. By contrast, 58.5 percent of American households led by a 45- to 54-year old even had a retirement account in 2004, the most recent year these figures were available.

According to the report, between 2001 and 2004, retirement accounts of these average households gained only $3,775 in value a year.

...more...

[UpInArms]

18. Cayman Islands fund Basis Yield files for bankruptcy protection in US

http://www.reuters.com/article/businessNews/idUSWEN072020070829?feedType=RSS&feedName=businessNews

NEW YORK (Reuters) - Basis Yield Alpha Fund, a hedge fund specializing in corporate and structured credit, on Wednesday filed for bankruptcy protection in the United States amid mounting losses from U.S. subprime mortgage assets, court papers show.

The Cayman Islands-registered fund, run by the Australian firm Basis Capital, listed more than $100 million of assets and more than $100 million of liabilities in its filing with the U.S. bankruptcy court in Manhattan.

The fund firm managed nearly $1 billion earlier this year.

In court papers, Basis Yield said it had in June begun to suffer a "significant devaluation" in its asset portfolio, following market volatility related to U.S. subprime lending defaults.

It said the devaluation led to margin calls, which it was unable to meet, and the issuance of several default notices by counterparties seeking to close out trades or seize assets.

Basis said JP Morgan Chase Bank NA, Goldman Sachs International, Citigroup Global Markets Limited, Morgan Stanley, Lehman Brothers International (Europe) and Merrill Lynch International all issued default notices.

...more...

[UpInArms]

20. that was a loss of $900 million in June!

and it sounds like all the "big" banks are about to take a huge hit

Basis said JP Morgan Chase Bank NA, Goldman Sachs International, Citigroup Global Markets Limited, Morgan Stanley, Lehman Brothers International (Europe) and Merrill Lynch International all issued default notices.

[UpInArms]

22. Liquidators assess bankrupt Cayman Island hedge fund

I hate misleading headlines :grr:

http://www.reuters.com/article/businessNews/idUSHKG14674620070830?sp=true

SYDNEY (Reuters) - An Australian hedge fund felled by its exposure to risky credit derivatives filed for bankruptcy protection in the United States, and liquidators on Thursday were assessing how much money, if any, would be returned to investors.

Basis Yield Alpha Fund, which manages roughly US$1 billion, has become the Asia-Pacific region's first major victim of the global credit storm.

Basis Yield, which specialized in corporate and structured credit run by Basis Capital, sought protection in a U.S. bankruptcy court in Manhattan on Wednesday.

The fund listed more than $100 million of assets and more than $100 million of liabilities in its court filing, although those amounts are based on boxes ticked in a court document, and the liquidator could not provide the exact amounts.

<snip>

HOW MUCH IS LEFT?

Earlier in the month, Basis told investors that one of its portfolios had lost more than 80 percent in assets.

...more...

[Ghost Dog]

19. Asian stocks make cautious rebound with eyes on Fed

http://asia.news.yahoo.com/070830/afp/070830090927eco.html

TOKYO (AFP) - Asian stock markets made a cautious rebound Thursday as investors kept an eye on US Federal Reserve moves to combat housing woes that have battered global bourses.

Asian markets were in positive territory after a strong recovery on Wall Street overnight but early gains were pared in Tokyo and some other bourses as dealers looked to a speech Friday by Fed chairman Ben Bernanke.

Hong Kong was among the top regional performers, closing up 2.0 percent on hopes for interest rate cuts both in the United States and locally. European share prices were also up in opening trade.

"Asian shares are following Wall Street and recovered due to renewed sense that the Fed will solve this crisis," said Toshihiro Matsuno, equities research head at SMBC Friend Securities in Tokyo.

/...

[Ghost Dog]

21. Europe shares rise by midday; Fed, earnings help

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070830:MTFH75157_2007-08-30_10-44-51_L3095353&type=comktNews&rpc=44

LONDON, Aug 30 (Reuters) - European shares rose by midday on Thursday, lifted by expectations of lower U.S. interest rates, bullish company updates and relief that two French banks were not as exposed to risky U.S. subprime mortgages as feared.

At 1019 GMT, the FTSEurofirst 300 <.FTEU3> index of top European stocks was up 0.36 percent at 1,503.83 points, continuing a tentative recovery following a slide of 8 percent from a 6-1/2 year peak in mid-July.

But weakness in U.S. index futures kept a leash on gains and accounted for a drift lower from an early rise of more than 1 percent in Europe, underlining the stop-start nature of the rebound.

/...

[UpInArms]

28. pre-opening blather

09:15 am : S&P futures vs fair value: -11.8. Nasdaq futures vs fair value: -8.8.

09:00 am : S&P futures vs fair value: -10.0. Nasdaq futures vs fair value: -7.0. Still shaping up to be negative start for the major averages as investors continue to fret over what Fed Chairman Bernanke may or may not say tomorrow during his speech at a Fed symposium in Jackson Hole, Wyoming.

Meanwhile, negative developments tied to the ongoing credit turmoil remain front and center. H&R Block's (HRB) CEO saying that the mortgage lending market may be in the most severe dislocation since the 1930s and that management may prefer a collapse of its Option One divestiture to more losses is exacerbating an already nervous market.

The Fed adding $5.0 bln of temporary reserves to the banking system via 14-day repos reiterates the Fed's commitment to ensure financial markets have adequate liquidity but also leaves investors again questioning the severity of the subprime fallout.

08:35 am : S&P futures vs fair value: -7.6. Nasdaq futures vs fair value: -3.0. As expected, Q2 GDP was revised higher. The preliminary read checked in at 4.0% (consensus 4.1%), up from an advance read of 3.1%.

The chain deflator, a key inflation measure, remained unchanged at 2.7%, matching economists' forecasts. Initial claims rose 9K to 334K (consensus 320K), the highest since mid April but still reflective of healthy labor conditions.

The response in stocks has been modestly positive, but underlying credit issues still leave the futures market languishing below fair value and suggests investors will take some of yesterday's broad-based gains off the table.

08:00 am : S&P futures vs fair value: -8.5. Nasdaq futures vs fair value: -3.0. Early sentiment suggests yesterday's bounce may be short lived as futures indications trading well below fair value suggest a lower start for stocks.

Aside from a sense of reserve on the part of buyers heading into today's economic data (i.e. a revision to Q2 GDP and initial claims will be out at 8:30 ET), investors are also sifting through a plethora of issues that leave valuations vulnerable following yesterday's sizable advance.

Lehman Brothers (LEH) is saying that brokers will be hit by their subprime exposure, cutting price targets on several investment banks by 10% and trimming EPS estimates. Signs have emerged that the terms of KKR's proposed $24 bln buyout of First Data (FDC) may change, Freddie Mac (FRE) reported a 45% drop in earnings, posting a $320 mln loss on new mortgages, and Australia-based Basis Capital filed for bankruptcy protection for one of its hedge funds.

[UpInArms]

29. Freddie Mac net profit tumbles as defaults rise

http://www.reuters.com/article/bondsNews/idUSN3041148320070830

WASHINGTON, Aug 30 (Reuters) - Freddie Mac (FRE.N: Quote, Profile, Research), the nation's second-largest source of home loan funding, said on Thursday its second-quarter net income fell 45 percent from a year earlier as more borrowers defaulted on their loans.

While the $764 million in net income fell sharply from the $1.4 billion last year, it reverses three quarters of losses as the business of guaranteeing home mortgages grew.

Chief Financial Officer Buddy Piszel said failing loans due to the deteriorating housing market were largely responsible for $600 million in costs for the quarter.

In light pre-market trading, Freddie shares were down 4.7 percent to $60.25.

In a statement, the company said consumers were returning to the traditional, fixed-rate mortgages that Freddie buys and securitizes as innovative financing options such as adjustable-rate mortgages fall out of favor. Non-traditional mortgages helped fueled a housing bubble that began to deflate two years ago as foreclosures and defaults rose.

...more...

[UpInArms]

57. Freddie chief not "bearish enough" about housing market

http://www.reuters.com/article/bondsNews/idUSWBT00747820070830

WASHINGTON (Reuters) - The chief executive officer for Freddie Mac (FRE.N: Quote, Profile, Research) underestimated the recent downturn in the U.S. housing market but expects a recovery in the next 18 months, he said Thursday.

"I was bearish... but I was not bearish enough" Richard Syron told analysts in an investor call. Still, Syron said that the most severe predictions for a housing downturn are too harsh and he expects a recovery over the next 18 months.

In the same call, Freddie Chief Financial Officer Buddy Piszel said that he expects the firm to see increasing credit losses in 2008 compared to this year.

...more...

[UpInArms]

30. Fed Pumping Early: Fed adds reserves via 14-day repurchase agreement

http://www.reuters.com/article/bondsNews/idUSN3041470120070830

NEW YORK, Aug 30 (Reuters) - The U.S. Federal Reserve said on Thursday it added temporary reserves to the banking system through 14-day repurchase agreements.

Federal funds, the benchmark overnight lending rate to banks, last traded at 5.50 percent, above the Fed's targeted rate of 5.25 percent.

[UpInArms]

36. More Fed Pumping: Fed adds reserves via 6-day repurchase agreement

http://www.reuters.com/article/bondsNews/idUSN3041534820070830

NEW YORK, Aug 30 (Reuters) - The U.S. Federal Reserve said on Thursday it added temporary reserves to the banking system through six-day repurchase agreements.

Earlier on Thursday, the Fed added temporary reserves to the banking system through $5 billion of 14-day repurchase agreements.

Federal funds, the benchmark overnight lending rate to banks, last traded at 5.25 percent, at the Fed's targeted rate, compared with 5.438 percent after the 14-day operation earlier in the morning.

[UpInArms]

31. H&R Block CEO: Mortgage market may be worst since '30s

http://www.reuters.com/article/bondsNews/idUSN3041278420070830

NEW YORK (Reuters) - H&R Block Inc (HRB.N: Quote, Profile, Research) Chief Executive Mark Ernst on Thursday said the U.S. mortgage lending market may be facing its greatest crunch since the 1930s, when the country was in the Great Depression.

Earlier Thursday, H&R Block said it is renegotiating the sale of its subprime lending unit Option One Mortgage Corp. to Cerberus Capital Management LP.

The unit has suffered mounting losses and reduced staffing by more than half this year, and now has about 400 staff handling loan originations, Ernst said on a conference call.

<snip>

"The mortgage origination market is in the midst of the most severe dislocation that it has seen in years, maybe the most severe since the 1930s," Ernst said.

...more at link...

[Wilber_Stool]

74. Cerberus again.

They seem to be buying a lot of financial companies that are going bankrupt now. That's the uber-christian investment group with Dan Quayle near the helm.

[AnneD]

78. Once agin I will ask the question....

why would an uber-christian investment group call themselves Cerberus?

Crickets chirp while she waits to see if the lights come on.

[UpInArms]

83. Cerberus Capital Management Appoints John W. Snow as Chairman

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/10-19-2006/0004455493&EDATE=

NEW YORK, Oct. 19 /PRNewswire-FirstCall/ -- John W. Snow, the 73rd
Secretary of the Treasury of the United States of America, has been
appointed Chairman of Cerberus Capital Management, L.P. Prior to becoming
Secretary of the Treasury in February 2003, Secretary Snow was Chairman and
Chief Executive Officer of CSX Corporation.

"It's an honor to have a person of Secretary Snow's stature join the
Cerberus team," said Stephen Feinberg, CEO of Cerberus Capital. "Secretary
Snow has worked tirelessly, traveling the globe, to build a consensus on
global economic issues. We will benefit enormously from his vast experience
in business operations as well as his keen insights to economic trends and
forces."

Mr. Snow also held several high-ranking positions in the Department of
Transportation during the Ford Administration. Additionally, Mr. Snow
served as Chairman of the Business Roundtable, comprised of 250 CEO's of
the nation's largest companies. He has served on various corporate and
non-profit boards, including Johnson & Johnson, USX, Verizon, the
University of Virginia Darden School, and Johns Hopkins University.

Mr. Snow holds a Master's Degree from Johns Hopkins University and a
Ph.D. in Economics from the University of Virginia, a J.D. from George
Washington University, a B.A. from the University of Toledo and numerous
honorary degrees. He has also served on the faculty of several academic
institutions.

About Cerberus:

Established in 1992, Cerberus Capital Management, L.P. is one of the
world's leading private investment firms with $16.5 billion under
management in funds and accounts. Through its team of more than 275
investment and operations professionals, Cerberus specializes in providing
both financial resources and operational expertise to help transform
undervalued companies into industry leaders for long-term success and value
creation. Cerberus is headquartered in New York City, with offices in
Chicago, Los Angeles, and Atlanta, as well as advisory offices in London,
Baarn, Frankfurt, Tokyo, Osaka and Taipei. More information on Cerberus can
be found at http://www.cerberuscapital.com.

[UpInArms]

32. Hovnanian CEO says risk of recession heightened

http://www.reuters.com/article/bondsNews/idUSWEN073520070830

NEW YORK, Aug 30 (Reuters) - Hovnanian Enterprises Inc (HOV.N: Quote, Profile, Research) Chief Executive Ara Hovnanian said on Thursday the risk of a recession is heightened and called for a rate cut by the U.S. Federal Reserve.

"Clearly, the risk of the economy overall going into a recession is heightened right now," Hovnanian in an interview on CNBC. (Reporting by Euan Rocha)

[UpInArms]

33. 9:34 EST Dow Down 100 at the open

Dow 13,189.22 100.07 (0.75%)
Nasdaq 2,543.39 19.77 (0.77%)
S&P 500 1,451.90 11.86 (0.81%)
10-Yr Bond 4.524% 0.029

NYSE Volume 55,149,000
Nasdaq Volume 51,655,000

[Roland99]

35. What's the general consensus when the market undergoes hugely wild swings?

I don't think it's bullish. ;)

[UpInArms]

39. 10:09 EST numbers and blather (getting better and better!)

Dow 13,256.29 33.00 (0.25%)
Nasdaq 2,570.68 7.52 (0.29%)
S&P 500 1,460.84 2.92 (0.20%)
10-Yr Bond 4.533% 0.02

NYSE Volume 272,320,000
Nasdaq Volume 278,120,00

10:00 am : The major averages are now trading in split fashion, spearheaded by a turnaround in Technology. As evidenced by the Nasdaq clawing its way into positive territory, it's not unusual to see improvements in the tech sector as the biggest reasons for the tech-heavy Composite's turnaround. Follow-through momentum in Apple (AAPL 136.56 +2.48), which surged 5.7% yesterday, is having the most noticeable impact.

The Dow has more than halved its opening stumble as the Energy and Materials sectors have also turned the corner to provide some semblance of support in the face of a 1.2% sell-off in Financials. The latter is this morning's worst performing sector and, since it's the most heavily weighted, the absence of its leadership is contributing the bulls' uphill battle to extend yesterday's short-covering bounce. DJ30 -47.80 NASDAQ +0.53 SP500 -4.79 NASDAQ Dec/Adv/Vol 1654/753/140 mln NYSE Dec/Adv/Vol 2171/575/66 mln

09:40 am : Stocks open sharply lower as investors continue to question the sustainability of such outsized market moves on very light volume over the last two sessions.

Lehman Brothers (LEH 53.17 -1.26) cutting EPS estimates on several investment banks (e.g. MS, MER, GS, BSC), citing dislocation in the credit and asset-backed and mortgage markets, just two days after Merrill Lynch (MER 72.03 -1.08) slashed profit projections, is weighing on sentiment. Investment Banks (-2.0%), this year's fifth worst performing S&P industry group (-18.4%), ranks among today's worst as well.

Several other issues prompting investors to take some money off the table include KKR reportedly fighting with banks over the $24 bln it needs to finance the buyout of First Data (FDC 32.65 -0.08).

The Thrifts & Mortgage group (-2.4%) is among this morning's biggest laggards after Freddie Mac (FRE 61.33 -1.92) posted a 45% drop in earnings amid a $320 mln loss on new mortgages and Credit Suisse slashed its price target on Countrywide Financial (CFC 19.30 -0.51) to $28 from $40 and now sees CFC losing money this year.

Specialty Consulting Services (-3.9%) is today's worst performer, though, after H&R Block's (HRB 18.74 -0.76) Q1 losses more than doubled. Its CEO also said the mortgage lending market may be in the most severe dislocation since the 1930s and may prefer the collapse of its unit sale to more losses. DJ30 -91.21 NASDAQ -17.73 SP500 -11.15 NASDAQ Vol 82 mln NYSE Vol 28 mln

[antigop]

40. WSJ: "Conduits" in Need of a Fix

http://online.wsj.com/article/SB118843561464913023.html

>>
The subprime-mortgage downturn keeps showing up in unexpected places in unusual ways.

The latest are conduits, which have put some of the world's biggest banks under the spotlight for their lucrative but little-known and poorly disclosed operations. Most recently, State Street Corp., the big Boston bank and money manager, saw its share price fall on fears about its exposure to about $28 billion in off-balance-sheet conduits. State Street said in a statement that the credit quality of the assets in its conduits "is very good," and the conduits are still selling commercial paper.

Overseas, HBOS PLC, the United Kingdom's fourth-largest bank by market value, stepped in when a conduit with $36.7 billion in commercial paper outstanding ran into trouble.

Other U.S. banks haven't had problems so far, but investors are anxious, given a dearth of information. "We cannot rule out 'black holes' at certain banks," Merrill Lynch said in a recent report.
>>

[UpInArms]

42. "$28 billion in off-balance-sheet conduits" ?

is that this shit?

Commercial paper falls $62.8 billion, Fed says

http://www.marketwatch.com/News/Story/commercial-paper-falls-628-billion/story.aspx?guid=%7B34A8A60F%2D669B%2D47F9%2D9481%2DBEE500052F4C%7D&dist=MorePulse

WASHINGTON (MarketWatch) -- Outstanding volumes of commercial paper fell $62.8 billion last week, or 3.1%, to $1.98 trillion, the Federal Reserve reported Thursday. Asset-backed paper fell by $59.4 billion, or 5.6%, to $%$998 billion. The total decline in short-term securities over the past three weeks has totaled $244 billion, or 11%.

:wtf:

[antigop]

46. I'm still reading and digesting, UpInArms -- as I have been for some time

But I keep thinking this all sort of reminds me of Enron?

But then, maybe, I'm "overreacting".

[UpInArms]

48. looks more like a game of "hot potato" right now (imho)

or "musical chairs" and with the ending of each song, one more entity bites the big one - getting closer and closer to have major players falling down (mixing all my metaphors)

[antigop]

49. But all of this "off-balance" sheet stuff reminds me of Enron--maybe I'm wrong.

Maybe I'm overreacting.

I'm still trying to figure all of this out.

[UpInArms]

50. well, the "off budget" items (ie war profiteering dollars) are cratering

our treasury and the enronization of the economy has been one of the goals - you are probably onto something with your comparison.

:hi:

[antigop]

55. You said : the "enronization of the economy" ....

Well, maybe my paranoia is out of control here, but I often wondered, after seeing people screwed out of their defined benefit pension plans, how (if?) they would be screwed out of their 401(k) defined contribution (DC) money.

But, maybe, I'm overreacting.

Due diligence.

[UpInArms]

58. from my post #17 today

According to the report, between 2001 and 2004, retirement accounts of these average households gained only $3,775 in value a year

[antigop]

62. Well, Warren Buffet said something like, "Yes, it's class warfare and my class is winning." n/t

[antigop]

63. Oh, and let's not forget those tax cuts to the wealthy that contributed to the deficit each year

But, then again, maybe I'm just "overreacting"

[DemReadingDU]

71. The Bush administration runs the country like a giant Enron

It's scary, I think some days it could implode.

:(

[ozymandius]

53. Commercial paper market still shrinking

-excerpt-

The declines have been felt strongest in the asset-backed portion of the market. These securities are backed by assets such as credit card debts or mortgages. In the latest week, asset-backed paper fell by $59.4 billion, or 5.6%. In the past three weeks, this paper has fallen by $184.9 billion, or 15.6%.

Commercial paper consists of short-term promissory notes issued by corporations. It's a market that "has shown virtually no tolerance for bad credits or risky entities for more than 30 years," said Tony Crescenzi, chief bond market strategist for Miller Tabak & Co.

http://www.marketwatch.com/news/story/commercial-paper-market-still-shrinking/story.aspx?guid=%7B4A1663B5%2D80DF%2D4AE5%2DACCA%2D4C6DFADAFFDA%7D

[UpInArms]

56. Vanishing commercial paper a symbol of credit woes

http://www.reuters.com/article/bondsNews/idUSN3042779320070830

NEW YORK (Reuters) - The U.S. commercial paper market shrank again last week and has lost 11 percent of its value in just a month, according to Federal Reserve data showing credit markets remain troubled.

The securities are a key way for companies to raise short-term funding, but have been hit hard as suspicion grows about which financial institutions might hold tarnished subprime mortgage assets.

Despite actions by the Fed to revive lending, including a reduction in the rate it charges banks, the amount of outstanding commercial paper tumbled $62.8 billion in the latest week on a seasonally adjusted basis.

That was a smaller drop than the prior week's $90.2 billion pullback. But it was still considerable, and left total outstanding commercial paper at $1.979 trillion, the first time it fell below the $2 trillion mark since March.

The financial sector's troubles can themselves be traced back to high-risk subprime mortgages, which were packaged, repackaged and resold in the secondary market for loans.

...more...

[DemReadingDU]

72. Do you know how this commercial paper

impacts the big car companies like Ford & GM?

I know Ford & GM have a type of money market funds that pay higher interest than at a bank. Unfortunately, these money market accounts are not FDIC insured, but backed by Ford & GM.

So if the hits on commercial paper impact Ford & GM, then would these car companies have a larger tendency to go bankrupt and thus investors lose the money in those funds backed by Ford & GM?

[UpInArms]

65. State Street's 'conduits' under the microscope

http://www.marketwatch.com/news/story/state-street-dogged-concerns-over/story.aspx?guid=%7BFF0D7D15%2D2155%2D477A%2DAF0B%2D0AD7B95A1563%7D

BOSTON (MarketWatch) -- State Street Corp.'s stock has come under pressure this week with credit markets gyrating as investors try to ascertain the financial services giant's exposure to off-balance-sheet "conduits" that issue commercial paper.

The questions swirling around the historically conservative Boston-based bank (STT: 60.38, -0.62, -1.0%) underscore how far the turmoil that started in U.S.
mortgages has spread into global credit markets.

Panicked investors are running from any assets that have even a hint of exposure to subprime mortgages, which are designed for borrowers with shakier credit histories and have seen a surge in delinquencies as rates reset higher and home prices drop.

Investors are uncertain about how the credit crunch may end up damaging third-party conduits, also known as asset-backed commercial paper programs or structured investment vehicles, administered by State Street and other banks. However, investors have focused on State Street because it administers four conduits, which are not reported in financial statements, with total assets of $28.8 billion at the end of June, according to the company's Form 10-Q filed earlier this month.

State Street established an asset-backed commercial paper program in 1992. The conduits issue short-term commercial paper, which is backed by debt investments such as credit cards and mortgages. To a great extent, the conduits "borrow short and lend long," explained Punk Ziegel & Co. analyst Richard Bove in a research note Wednesday.

...more...

it's the SIV's - ahhh - so much explained in such a cryptic fashion :eyes:

http://news.google.com/news?hl=en&ned=us&q=siv+&btnG=Search+News

News results: Standard Version | Text Version | Image Version Results 1 - 10 of about 393 for siv. (0.19 seconds)

Product Reviews Cheyne Capital asks for stay of execution on $7bn SIV
Independent, UK - 14 hours ago
By Sean Farrell, Financial Editor Cheyne Capital Management is pleading with investors for a stay of execution for its structured investment vehicle (SIV) ...
S&P says monitoring all SIV ratings, valuations Reuters
UPDATE 2-Cheyne sells assets as fears of SIV woes spread Reuters.uk
Cheyne Finance says working on SIV recap Reuters.uk
Reuters.uk - FT Alphaville
all 143 news articles »

CNN International Barclays SIV-lite exposure below 75 million pounds
Reuters.uk, UK - Aug 29, 2007
Barclays Capital has been a leading player in SIV-lites, which combine traditional structured investment vehicle and collateralised debt obligation ...
Financial fears drive down European stocks International Herald Tribune
Barclays plays down debt worries Scotsman
Scottish Business Briefing - Weds August 29 2007 Scotsman
Times Online - Financial Times
all 95 news articles » BCS
FACTBOX-Five facts about SIV-lites
Reuters - Aug 28, 2007
Highly leveraged structures called SIV-lites have become a particular focus after Standard & Poor's downgraded two structures by up to 17 notches as they ...

Investor jitters hit investment grade firms
Times Online, UK - 17 hours ago
... do with the now infamous sub-prime American mortgage market and there is no link to private-equity-style leveraged loans, conduits, SIVs or SIV-lites. ...

Standard Chartered falls on SIV rumour
Times Online, UK - Aug 24, 2007
Even though a Standard Chartered spokesman insisted that the fund – Whistlejacket Capital, an SIV or structured investment vehicle – “is triple-A rated and ...

S&P cuts commercial paper of two SIV-lites
Reuters - Aug 24, 2007
Unlike other issuers of asset-backed commercial paper, SIV-lites use borrowed cash from third parties and have looser restrictions on investments. ...

Awkward silence that allowed rumours a free rein
Times Online, UK - Aug 28, 2007
A senior BarCap official says that even in the worst possible circumstances, it is hard to see how the SIV-lite troubles could leave the bank on the hook ...
Diamond loses his sparkle This is Money
all 2 news articles »
Bank of Nova Scotia CEO finds profits outside his comfort zone
Globe and Mail, Canada - Aug 28, 2007
On a separate front, analysts fear the new problem child in European banking circles will be a creation known as SIV-lites, which combine traditional ...

Standard Chartered says Whistlejacket Capital SIV not in trouble
Forbes, NY - Aug 24, 2007
LONDON (Thomson Financial) - Asia-focused bank Standard Chartered quashed market rumours that it may have to bail out Whistlejacket Capital, ...

London close: Stocks rebound
ShareCast, UK - 22 hours ago
Barclays recouped some of yesterday’s losses as fears receded over its exposure to the failed German bank Sachsen and other SIV-lite debt vehicles. ...
London midmorning: Footsie in the blue ShareCast
London afternoon: Steady decline continues ShareCast
all 11 news articles »

[antigop]

70. More on SIV's from yesterday....

http://www.smartmoney.com/bn/smw/index.cfm?story=20070829025727

>>
Collapsing structured investment vehicles, or SIVs, hit by the global credit market turmoil are to offload around $43 billion of assets in forced sales, which would put further pressure on prices, analysts said Wednesday.

This is in addition to leveraged loans being shed by credit investors needing to meet margin calls and billions of new loans underwritten by banks to fund recent leveraged buyouts. One European head of leveraged finance estimated the volume of unsold leverage loans to be around EUR85 billion.

Carlyle Capital Corp. Ltd. (CCC.AE), a listed investment fund that recently received $200 million in emergency financing from U.S. parent, private equity firm Carlyle Group, said Wednesday it had also sold $900 million of assets. The sale of assets, many of them to Carlyle Group, were to help cushion the fund against margin calls from its main lenders.

A decline in the value of U.S. residential mortgage-backed securities of all types means the banks and brokers that fund Carlyle Capital through short-term repurchase agreements have been asking it for more collateral, and therefore needed emergency funds.
...
SIVs are investment vehicles that issue short-dated debt to fund investments in longer-dated, higher yielding bonds. A number or SIVs have collapsed recently after declines in the market value of U.S. subprime and prime residential mortgage-backed securities they held in their portfolios.
>>

[UpInArms]

41. Wal-Mart Shares Hit By Sell Rating at Merrill Lynch

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BDFC4D3A3%2DC9D4%2D423D%2DAA47%2D49B053155F1F%7D

NEW YORK (MarketWatch) - Retail stocks opened lower on Thursday, dragged down by weakness in Sears Holdings Corp. . The retailer said second-quarter profit tumbled 40%, hurt by widespread discounting. Sears cut prices and increased other promotions after demand fell across most categories at both its Sears shops in the U.S. and Kmart locations. Wal-Mart Stores Inc. (WMT: 43.32, -0.87, -2.0%) shares slipped after Merrill Lynch cut its rating on the world's largest retailer to sell, citing margin erosion at its core U.S. division. The S&P Retail Index ($RLX: 483.63, -1.30, -0.3%) was down 4.3 points at 480.67.

[ozymandius]

43. 10am bounce in effect

10:15
Dow 13,233.69 Down 55.60 (0.42%)
Nasdaq 2,568.88 Up 5.72 (0.22%)
S&P 500 1,457.60 Down 6.16 (0.42%)
10-Yr Bond 4.535% Down 0.018
NYSE Volume 310,837,000
Nasdaq Volume 314,787,000

10:00 am : The major averages are now trading in split fashion, spearheaded by a turnaround in Technology. As evidenced by the Nasdaq clawing its way into positive territory, it's not unusual to see improvements in the tech sector as the biggest reasons for the tech-heavy Composite's turnaround. Follow-through momentum in Apple (AAPL 136.56 +2.48), which surged 5.7% yesterday, is having the most noticeable impact.

The Dow has more than halved its opening stumble as the Energy and Materials sectors have also turned the corner to provide some semblance of support in the face of a 1.2% sell-off in Financials. The latter is this morning's worst performing sector and, since it's the most heavily weighted, the absence of its leadership is contributing the bulls' uphill battle to extend yesterday's short-covering bounce. DJ30 -47.80 NASDAQ +0.53 SP500 -4.79 NASDAQ Dec/Adv/Vol 1654/753/140 mln NYSE Dec/Adv/Vol 2171/575/66 mln

09:40 am : Stocks open sharply lower as investors continue to question the sustainability of such outsized market moves on very light volume over the last two sessions.

Lehman Brothers (LEH 53.17 -1.26) cutting EPS estimates on several investment banks (e.g. MS, MER, GS, BSC), citing dislocation in the credit and asset-backed and mortgage markets, just two days after Merrill Lynch (MER 72.03 -1.08) slashed profit projections, is weighing on sentiment. Investment Banks (-2.0%), this year's fifth worst performing S&P industry group (-18.4%), ranks among today's worst as well.

[Roland99]

51. ouch. look at those Dec/Adv ratios.

[AnneD]

80. No dead cat bounce....

Actually, the stock market is bouncing around like a dead cat in a dryer. :smoke:

[UpInArms]

52. Investment homes are major part of defaults

http://www.marketwatch.com/news/story/investment-homes-make-up-major/story.aspx?guid=%7BA7BAF583%2DA2CD%2D46A9%2DA1D3%2D75CA367D7487%7D

WASHINGTON (MarketWatch) -- Mortgages for investment properties constitute a major chunk of defaults in four states with the fastest-rising rates of seriously delinquent loans, according to data released Thursday by the Mortgage Bankers Association.

Mortgages on non-owner occupied properties in Nevada accounted for 32% of prime mortgage defaults as of June 30 as well as for 24% of subprime loan defaults, the MBA said.

In the rest of the country, non-owner occupied homes accounted for 13% of prime defaults and 11% of subprime defaults.

"Defaults are on the rise in most parts of the country, but it should be recognized that it is not always the case of a homeowner losing his or her home," said Doug Duncan, the MBA's chief economist,.

Rather, it's "often the case of an investor gambling on a continued increase in home values and losing that gamble," Duncan said in a statement.

<snip>

"This rapid price appreciation attracted both speculators and home builders, a volatile combination that lead to an oversupply of homes that was beyond the capacity of the local populations to support," he said. "When this oversupply became apparent and prices began to fall, many of these investors simply walked away from their mortgages."

...more...

[ozymandius]

61. I remember reading a story three years ago

concerning a Russian investor who purchased six houses in the Las Vegas area before they were constructed. The investor lived in California. His gamble was to flip the properties as soon as they were finished - making a substantial profit. The profit margin became increasingly smaller at this time for this type of investment because of upward bidding pressure.

It makes me wonder if the guy who bought six houses at once still has any shirt left.


In a cost comparison - a barrel usually is out of reach for someone who's lost their shirt.

[UpInArms]

54. Hedge funds make up 30 pct of US debt market volume

http://www.reuters.com/article/bondsNews/idUSN3041960620070830

BOSTON, Aug 30 (Reuters) - Hedge funds were responsible for 30 percent of the trading volume in U.S. debt markets in the last year, double the 15 percent these loosely regulated portfolios generated in the previous period, a study shows.

Greenwich Associates released the statistics on Thursday.

The survey shows how hedge funds, often considered among the financial markets' riskiest investors, are playing an increasingly dominant role in fixed income securities, once considered one of the most conservative asset classes.

Greenwich said trading volume in fixed income securities increased 10 percent to roughly $25 trillion last year. That marks a slowdown from the 20 percent to 25 percent growth rates seen in the past three years, the group found.

...more...

:scared:

[UpInArms]

59. S&P cuts 13 groups of residential mortgage debt

http://www.reuters.com/article/bondsNews/idUSN3042555320070830

NEW YORK, Aug 30 (Reuters) - Standard & Poor's on Thursday lowered its ratings on 13 classes of debt backed by mortgage securities issued in 2005 and 2006, sending half of those to junk status, the rating company said.

The actions affect debt known as U.S. net interest margin securities, or NIMS, backed by so-called Alt-A mortgage debt that is halfway between subprime and prime debt.

The 13 classes of downgraded debt have a balance of about $80.5 million, or 14 percent of the $572 million outstanding in U.S. NIMS backed by Alt-A mortgage securities, S&P said.

...more...

[Roland99]

60. Commercial paper falls $62.8 billion, Fed says

http://www.marketwatch.com/news/story/commercial-paper-falls-628-billion/story.aspx?guid=%7B34A8A60F%2D669B%2D47F9%2D9481%2DBEE500052F4C%7D

Outstanding volumes of commercial paper fell $62.8 billion last week, or 3.1%, to $1.98 trillion, the Federal Reserve reported Thursday. Asset-backed paper fell by $59.4 billion, or 5.6%, to $998 billion. The total decline in short-term securities over the past three weeks has totaled $244 billion, or 11%.

Sounds like Perot's Giant Sucking Sound.

[ozymandius]

64. Indeces still split.

10:49
Dow 13,243.53 Down 45.76 (0.34%)
Nasdaq 2,571.86 Up 8.70 (0.34%)
S&P 500 1,459.28 Down 4.48 (0.31%)
10-Yr Bond 4.533% Down 0.02
NYSE Volume 479,649,000
Nasdaq Volume 482,569,000

[ozymandius]

66. Yields plummet on short-term Treasury bills

SAN FRANCISCO (MarketWatch) -- Yields on short-term Treasury instruments moved sharply lower Wednesday, as skittish investors bid prices higher, while very strong auction results for two-year notes also underscored investors' flight to the safety of government-backed assets.

"Once again it's really funding," said Tom diGaloma, head of Treasury trading at Jefferies & Co. when asked about demand on the short end of the curve.

The Treasury yield curve refers to the gap between shorter- and longer-dated issues.

Rumors that the Federal Reserve may be poised to cut the discount rate again at the end of this week also fanned market sentiment, diGaloma added.

-cut-

Against this backdrop, the yield on the three-month Treasury bill was down 34 basis points at 3.987%, while the yield on the six-month bill was down 31 basis points at 4.300%

Meanwhile, the 10-year Treasury note, which serves as the benchmark for mortgage and corporate borrowing, was down 9/32 at 101 20/32, sending its yield up to 4.546%. The 30-year bond was down 19/32 at 101 26/32, with a yield of 4.884%.

http://www.marketwatch.com/news/story/treasury-bills-yields-drop-amid/story.aspx?guid=%7BBB98A2E8%2D79CA%2D480A%2DA9C0%2D78212E0A8383%7D

[Nimrod2005]

87. I have to refi in November (out of an ARM), I am hoping I will be able to get 6%

For the 30 year fixed!!!

[ozymandius]

67. group exercise here: Speculate how much this would have cost in San Francisco in 2004.

...a real fixer-upper...

[Nimrod2005]

69. $1.28 million for the dry lot....nt

[UpInArms]

73. $250,00 for land value alone

then they could put up one of these

[BrotherBuzz]

75. Knochdown houses routinly exceed $500,00 in the nicer berbs in the bay area

A choice buildable lot in Pacific Heights, San Francisco, might fetch a price exceeding two million dollars.

[Nimrod2005]

79. A dry lot here with a tear down house goes for $650K

In South Florida. Water front on the intercoastal is twice as much. Makes the $400K you may spend to build look very cheap.

[BrotherBuzz]

82. Location, location, location

You know what I mean, Vern?

[ozymandius]

68. lunchtime update

12:01
Dow 13,287.50 Down 1.79 (0.01%)
Nasdaq 2,582.39 Up 19.23 (0.75%)
S&P 500 1,464.69 Up 0.93 (0.06%)
10-Yr Bond 4.527% Down 0.026
NYSE Volume 840,292,000
Nasdaq Volume 752,301,000

11:30 am : Finally, the market is getting some of the support necessary to offset continued uncertainties about owning financial stocks amid lingering credit concerns.

Among the few key areas turning positive and helping to lift the Dow and S&P 500 above the flat line for the first time this morning include Health Care and Industrials. They respectively rank as the third and fourth most influential sectors and collectively account for nearly 25% of the total weighting on the S&P 500.

The fact that defensive sectors like Staples, Telecom, and Utilities continue to languish in negative territory actually lends some additional confidence behind the renewed wave of buying interest even though another day of below average volume does not offer the conviction Wall Street would like.DJ30 +10.89 NASDAQ +21.36 SP500 +2.94 NASDAQ Dec/Adv/Vol 1241/1468/600 mln NYSE Dec/Adv/Vol 1732/1312/374 mln

[TrogL]

76. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



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




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

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

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

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

2007-07-19 Thursday, July 19 0.959233 USD
2007-07-20 Friday, July 20 0.957854 USD
2007-07-23 Monday, July 23 0.956938 USD
2007-07-24 Tuesday, July 24 0.964134 USD
2007-07-25 Wednesday, July 25 0.959417 USD
2007-07-26 Thursday, July 26 0.952018 USD
2007-07-27 Friday, July 27 0.944287 USD
2007-07-30 Monday, July 30 0.935541 USD
2007-07-31 Tuesday, July 31 0.938438 USD
2007-08-01 Wednesday, August 1 0.946522 USD
2007-08-02 Thursday, August 2 0.949848 USD
2007-08-03 Friday, August 3 0.950029 USD
2007-08-06 Monday, August 6 0.951203 USD
2007-08-07 Tuesday, August 7 0.947598 USD
2007-08-08 Wednesday, August 8 0.952653 USD
2007-08-09 Thursday, August 9 0.946432 USD
2007-08-10 Friday, August 10 0.948947 USD
2007-08-13 Monday, August 13 0.951656 USD
2007-08-14 Tuesday, August 14 0.940291 USD
2007-08-15 Wednesday, August 15 0.930579 USD
2007-08-16 Thursday, August 16 0.929887 USD
2007-08-17 Friday, August 17 0.940291 USD
2007-08-20 Monday, August 20 0.94518 USD
2007-08-21 Tuesday, August 21 0.943307 USD
2007-08-22 Wednesday, August 22 0.94162 USD
2007-08-23 Thursday, August 23 0.946432 USD
2007-08-24 Friday, August 24 0.950119 USD
2007-08-27 Monday, August 27 0.951022 USD
2007-08-28 Tuesday, August 28 0.941974 USD
2007-08-29 Wednesday, August 29 0.944109 USD

Current values

0.9472 Change +0.0054 (+0.57%)

Settle Time 15:08 Open 0.9418

Previous Close 0.9420 High 0.9486

Low 0.9394


Loonie:

Last trade 0.9472 Change +0.0054 (+0.57%)
Previous Close 0.9420 Open 0..9418
Low 0.9394 High 0.9486


Other combinations:

AS.M07 AUSTRALIAN $/CANADIAN $ Sep (NYBOT) 0.8660 -0.0049
HY.M07 CANADIAN $/JAPANESE YEN Sep (NYBOT) 108.410 +0.845
RA.M07 EURO/AUSTRALIAN $ Sep (NYBOT) 1.67595 +0.01405
GB.M07 EURO/BRITISH POUND Sep (NYBOT) 1.4517 -0.03
EP.M07 EURO/CANADIAN $ Sep (NYBOT) 1.4275 +0.0003
EJ.M07 EURO/JAPANESE YEN Sep (NYBOT) 157.51 -0.03
EU.M07 EURO/US$ (LARGE) Sep (NYBOT) 1.36655 +0.00305


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

The September Canadian Dollar was lower overnight as it extends Wednesday's decline below the 10-day moving average crossing at .9441. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near-term. If September extends this week's decline, this month's low crossing at .9205 is the next downside target. Closes above the reaction high crossing at .9567 are needed to confirm that a short-term low has been posted. Overnight action sets the stage for a steady to lower opening in early-day session trading.


Analysis

Looks like the blather went back to the old script.

Up until now, I've never been able to keep bullish and bearish straight in my head, but the other day on the drive-home, an economist gave this simple algorythm. "Think 'running of the bulls'. If a bull catches you, it impales you on its horns and throws you up. When a bear catches you, it drags you down." Hence, teh blather is calling for a drop in the loonie. It, paradoxically, is on the rise. It's everybody's darling the kiwi which is taking the hits. The euro appears to be doing nicely.

When I create these posts, I copy/paste from a template from a "typical" day. I can tell if things are wierd by how many changes I have to make to the font colours. So far today, things look pretty "typical".

Things are pretty quiet on the political front. The various Party conventions are over with no surprises. Nobody's calling for a fall election 'cause the numbers aren't good enough for either side to get anything resembling a majority. Hence, Canada is back to safe, boring Canada - a good place to invest when the rest of the world is losing its mind.

[ozymandius]

84. mixed bag at the close

Dow 13,238.73 Down 50.56 (0.38%)
Nasdaq 2,565.30 Up 2.14 (0.08%)
S&P 500 1,457.64 Down 6.12 (0.42%)
10-Yr Bond 4.502% Down 0.051
NYSE Volume 2,570,190,000
Nasdaq Volume 1,738,154,000

4:20 pm : After stumbling out of the gate, the blue-chip averages made a few concerted efforts to build onto Wednesday's sizable advance, but the absence of leadership from the heavily weighted Financial sector (-1.1%), and not enough momentum in Tech (+0.4%), eventually led to a mixed session.

Before the opening bell sounded, investors were already fretting over what Fed Chairman Bernanke may or may not say Friday in his speech at a Fed symposium in Jackson Hole, Wyoming. We believe that anyone expecting a clear-cut signal on the Fed's next move is expecting too much. Also, there won't be a Q&A session afterward so the Fed Chairman won't be able to be pressed on policy matters.

On a positive note, investors did get wind of some evidence this morning that helped diffuse the worst of fears about an economic crisis. At 8:30 ET the Commerce Dept. showed that second quarter real GDP was revised higher to show a 4.0% annual rate of growth from a previously reported 3.4% rate.

While the data helped ease concerns about liquidity problems in the financial markets leading to major problems in the real economy, the market had plenty of news items tied to the credit turmoil to take the steam out of Thursday's rally.

Lehman Brothers (LEH 53.89 -0.54) cut EPS estimates and price targets on several investment banks, citing dislocation in the credit and asset-backed and mortgage markets, just two days after Merrill Lynch (MER 72.10 -1.01) slashed profit projections.

KKR reportedly fighting with banks over the $24 bln it needs to finance the buyout of First Data (FDC 32.90 +0.17), and Freddie Mac (FRE 60.07 -3.18) posting a 45% drop in earnings amid a $320 mln loss on new mortgages, also weighed on sentiment.

The Fed adding another $10 bln of temporary reserves in two separate actions, after the fed funds rate opened near 5.5%, above the Fed's 5.25% target, stoked liquidity concerns.

Investors also digested a report showing that the U.S. commercial paper market fell for a third straight week, marking the biggest slump since 2000.

The only real takeaway for market bulls was a modest advance in Technology, which finished as the day's only sector in positive territory. That was in part because tech is thought by many to be the most immune among the 10 economic sectors to the lingering credit concerns. Dell (DELL 28.46 +0.60) was among the sector's best performers, catching a bid ahead of its earnings report after the bell.

Apple (AAPL 136.25 +2.17), which surged 5.7% a day earlier, garnered some follow-through momentum while Motorola (MOT 16.71 +0.24) got an additional boost after being upgraded.

As an aside, total volume was again very light, suggesting there wasn't much conviction by either buyers or sellers. DJ30 -50.56 NASDAQ +2.14 SP500 -6.12 NASDAQ Dec/Adv/Vol 1737/1220/1.79 bln NYSE Dec/Adv/Vol 1979/1293/1.15 bln

[UpInArms]

86. TABLE-U.S. M-2 money supply up $43.6 bln Aug 20 week

http://www.reuters.com/article/bondsNews/idUSNAT00311720070830

billion in the Aug. 20 week to $7,332.5 billion, the Federal
Reserve said.
The Fed said the four-week moving average of M-2 was
$7,297.2 billion vs. $7,282.5 billion in the previous week.
Following are the details of the money supply report, and
the Fed's H.3 and H.4 reports:

 One week ended Aug. 20 (billions dlrs)
    Latest  Change        Prev week  Rvsd from
M-1....1,349.9 down....6.1 vs 1,356.0.....1,356.0
M-2....7,332.5 up.....43.6 vs 7,288.9.....7,288.9
M-2 Avg 4 wks (Vs Wk ago)..7,297.2  vs ...7,282.5
Monthly aggregates (Adjusted avgs in billions)
M-1 (July vs June)........1,368.8 vs.....1,366.8
M-2 (July vs June)........7,269.3 vs.....7,243.9
 Federal Reserve's H.3 and H.4 report:
 Two Weeks Ended Aug. 29 daily avgs-mlns (H.3)
Free Reserves..-499 vs.rvsd.....9,070
Bank Borrowings..............1,559 vs............261
Seasonal Loans..259 vs............255
Excess Reserves..............1,060 vs..........9,331
Required Reserves (Adj).....40,053 vs.........40,095
Required Reserves...........42,253 vs.........37,460
Total Reserves..............43,313 vs.........46,792
Non-Borrowed Reserves.......41,754 vs.........46,531
Monetary Base (Unadj)......825,056 vs........834,579
   Two Weeks Ended Aug. 29 daily avgs-mlns
Total Vault Cash............50,014 vs.........52,407
Inc Cash Equal to Req Res...35,361 vs.........32,132
          One week ended August 29 (H4.1)
Bank Borrowings...............1,577 up............36
Primary Credit.1,315 up...........115
Secondary Credit.nil down..........85
Seasonal Credit..262 up.............6
Float..............7 up...........762
Balances/Adjustments..........6,853 down...........5
Currency.....809,918 down.......1,166
Treasury Deposits.............5,089 up...........247
    One week ended Aug. 29 - daily avgs-mlns
Fed bank credit.............849,988 down.......1,708
Treasuries held outright....784,630 down.......4,983
Agencies held outright..........nil vs..........unch
Repos.........24,571 up.........1,964
Other Fed assets.............39,203 up...........513
Other Fed liabilities........40,717 up...........274
Other deposits with Fed.........252 down.........182
Foreign deposits..95 down...........4
Gold stock....11,041 vs..........unch
Custody holdings..........1,979,353 down.......7,058
                Factors on Aug. 29
Bank borrowings...............1,358 vs...........263
Float.............33 vs..........-533

[UpInArms]

88. Foreign central banks net sellers of Treasuries-Fed

http://www.reuters.com/article/bondsNews/idUSNAT00311620070830

NEW YORK, Aug 30 (Reuters) - Foreign central banks were net sellers of U.S. Treasuries last week but overall increased their holdings of U.S. debt through their purchases of agency debt, Federal Reserve data showed on Thursday.

The Fed said its holdings of Treasury and agency debt kept for overseas central banks rose $3.36 billion in the week ended Aug. 29 to total $1.983 trillion.

But the breakdown of custody holdings showed overseas central banks sold $3.06 billion in Treasury debt, which totaled $1.207 trillion.

The foreign institutions bought securities from government-sponsored agencies like Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research), adding $6.42 billion to their holdings, for a total of $775.79 billion.

...more...