STOCK MARKET WATCH, Friday August 31

[ozymandius]

Source: du

Friday August 31, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 510 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2429 DAYS
WHERE'S OSAMA BIN-LADEN? 2141 DAYS
DAYS SINCE ENRON COLLAPSE = 2102
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

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

AT THE CLOSING BELL ON August 30, 2007

Dow... 13,238.73 -50.56 (-0.38%)
Nasdaq... 2,565.30 +2.14 (+0.08%)
S&P 500... 1,457.64 -6.12 (-0.42%)
Gold future... 673.90 -1.50 (-0.22%)
30-Year Bond 4.83% -0.05 (-1.11%)
10-Yr Bond... 4.50% -0.05 (-1.12%)






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 [email protected]

For information on protests and other actions Citizens For Legitimate Government

---

more Radical Fringe here


Read more: du

[ozymandius]

1. Market WrapUp

The "Commodity Super Cycle" Stalls Out
BY GARY DORSCH

The “Commodity Super Cycle” took many traders by surprise from 2002 thru 2006, but the rally has stalled out over the past two years. There have been numerous rotations within the five major sectors of the Dow Jones Commodity Index, energy (33%), metals (26%), grains (21%), livestock, (10%), and softs (9%), but the overall index has simply consolidated within a narrow sideways range.

That’s surprising, because Chinese and Indian economies, which account for one third of the world’s population, are growing at a 12% and 9% clip respectively, the fastest in more than a decade. The big-3 central banks, the Bank of Japan, the European Central Bank, and the Federal Reserve, are pursuing super-easy money policies, with the Euro M3 money supply expanding at an 11.7% annual clip in June, an all-time high, and the US M3 money supply is 13% higher from a year ago.

The Bank of Japan pegs its overnight loan rate at just 0.50%, far out of alignment with the rest of the world, and provides the ammunition for the estimated $500 billion to $1.2 trillion “yen carry” trade, that is inflating markets around the world.

-cut-

Unilateral rate cuts by the Federal Reserve is expected to weaken the US dollar, and by deduction with simple logic, could also boost dollar denominated commodities such as crude oil, copper, and gold, silver, and base metals. If correct, the DJ Commodity Index can rally towards the 200-level, sparking a whole new round of inflation, a bitter pill to swallow to bail out greedy Wall Street investment bankers, and their sophisticated customers who were duped by rating agencies.

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

[ozymandius]

2. Today's reports-a-plenty

8:30 AM Personal Income Jul
Briefing Forecast 0.4%
Market Expects 0.3%
Prior 0.4%

8:30 AM Personal Spending Jul
Briefing Forecast 0.4%
Market Expects 0.3%
Prior 0.1%

8:30 AM Core PCE Inflation Jul
Briefing Forecast 0.1%
Market Expects 0.2%
Prior 0.1%

9:45 AM Chicago PMI Aug
Briefing Forecast 56.0
Market Expects 53.0
Prior 53.4

10:00 AM Factory Orders Jul
Briefing Forecast 3.9%
Market Expects 3.0%
Prior 0.6%

10:00 AM Mich Sentiment-Rev. Aug
Briefing Forecast 83.3
Market Expects 83.0
Prior 83.3

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

[UpInArms]

22. 8:30 reports coming in:

01. U.S. July real disposable incomes up 0.5%, most since Feb.
8:30 AM ET, Aug 31, 2007 - 1 minute ago

02. U.S. July inflation-adjusted spending up 0.3%
8:30 AM ET, Aug 31, 2007 - 1 minute ago

03. U.S. July consumer spending up 0.4% vs. 0.3% expected
8:30 AM ET, Aug 31, 2007 - 1 minute ago

04. U.S. July personal incomes up 0.5% vs. 0.4% expected
8:30 AM ET, Aug 31, 2007 - 1 minute ago

05. U.S. core PCE price index up 1.9% in past year
8:30 AM ET, Aug 31, 2007 - 1 minute ago

06. U.S. July core inflation up 0.1% vs. 0.2% expected
8:30 AM ET, Aug 31, 2007 - 1 minute ago

[UpInArms]

39. Aug Chicago PMI @ 53.8%

23. U.S. Aug. Chicago PMI 53.8% vs. 53.4%
9:49 AM ET, Aug 31, 2007 - 39 minutes ago

24. U.S. Aug Chicagi PMI new orders 58.4% vs. 53.4%
9:49 AM ET, Aug 31, 2007 - 39 minutes ago

[UpInArms]

40. July Factory Orders @ 3.7%

04. U.S. July core capital goods orders rise 1.7%
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

05. U.S. July durable goods shipments rise 3.9%
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

06. U.S. July durable goods orders rise 6.0%
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

07. U.S. July factory shipments rise 2.6%
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

08. U.S. July factory orders rise 2.4% ex-transportation
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

10. U.S. July factory orders rise 3.7% vs. 3.3% expected
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

[UpInArms]

41. UMich Aug @ 83.4 (1 yr low)

01. UMich Aug. expectations index 73.7 vs. 81.5 July
10:02 AM ET, Aug 31, 2007 - 26 minutes ago

02. UMich Aug. current conditions index 98.4 vs. 104.5 July
10:02 AM ET, Aug 31, 2007 - 26 minutes ago

http://www.reuters.com/article/bondsNews/idUSN3124168320070831

Aug 31 - (Reuters) - The Reuters/University of Michigan
Surveys of Consumers final August consumer sentiment index
fell to 83.4 from July's final reading of 90.4, according to a
report released on Friday.

Economists polled by Reuters had expected a median final
August reading of 82.7.

Below is a table of the survey's components:

                    Aug    July    June    May    April
Sentiment              83.4   90.4    85.3    88.3    87.1
Current conditions     98.4  104.5   101.9   105.1   104.6
Expectations           73.7   81.5    74.7   77.6     75.9
1-year inflation        3.2    3.4     3.4    3.3      3.3
5-year inflation        2.9    3.1     2.9    3.1      3.1

THE SURVEY: The Reuters/University of Michigan Surveys of
Consumers, a monthly series of data on U.S. consumer sentiment,
are produced by the University of Michigan in Ann Arbor,
Michigan. From January 2007, Reuters has exclusive rights to
distribute the data for six months after the release.

[UpInArms]

49. US economic growth index falls to 27-week low-ECRI

http://www.reuters.com/article/bondsNews/idUSNAT00312420070831

NEW YORK, Aug 31 (Reuters) - A gauge of future U.S. economic growth fell to a 27-week low due to higher jobless claims, lower commodity prices and softer housing activity, a research group said on Friday.

The Economic Cycle Research Institute, an independent forecasting group, said its Weekly Leading Index (WLI) eased to 139.2 in the week ended Aug. 24 from 139.7 in the prior week, revised from 139.8.

It said the annualized growth rate in the index declined to 1.3 percent from 2.6 percent in the prior week. It marked its smallest such gain since the week ending Nov. 10, 2006.

"The pullback in WLI growth to a 41-week low suggests a dimming in the economic growth outlook, but not an imminent recession," said Lakshman Achuthan, managing director at ECRI.

...more...

[ozymandius]

3. Oil prices inch up to mid-$73 a barrel

SINGAPORE - Oil prices rose Friday in Asia after settling lower the previous session on slower-than-expected economic growth figures and profit-taking.

Light, sweet crude for October delivery rose 24 cents to $73.60 a barrel in Asian electronic trading on the New York Mercantile Exchange, midafternoon in Singapore.

The contract fell 15 cents to settle at $73.36 a barrel Thursday on concerns about the prospect of weakening demand after second-quarter gross domestic product in the U.S. rose 4 percent — slower than many analysts had expected. Jobless claims also rose unexpectedly last week to the highest level since spring.

Energy investors worry that a slower economy means less demand for oil and gasoline.

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

[UpInArms]

28. October crude up 99 cents at $74.35 a barrel on Nymex

02. October crude up 99 cents at $74.35 a barrel on Nymex
9:01 AM ET, Aug 31, 2007 - 33 seconds ago

[ozymandius]

4. Bush to outline aid to mortgage holders

WASHINGTON - Offering federal help for strapped mortgage holders, President Bush is proposing to aid hundreds of thousands of borrowers hard hit by the housing slump.

The president on Friday was to talk about several initiatives and reforms to help homeowners with risky mortgages keep their homes, a senior administration official said Thursday. Bush also was to discuss efforts to prevent these kinds of problems from arising in the future.

The official said Bush will direct Treasury Secretary Henry Paulson and Housing Secretary Alphonso Jackson to work on an initiative to help troubled mortgage holders get services and products they need to keep them from defaulting on their loans. The official spoke on condition of anonymity to discuss details of the initiatives ahead of the presidential event.

http://news.yahoo.com/s/ap/20070831/ap_on_go_pr_wh/bush_housing_slump

[ozymandius]

5. Asia surges on U.S. subprime bailout plan

HONG KONG (MarketWatch) -- Asian markets rose sharply Friday as expectations that the Bush administration could unveil a plan to prevent a wave of subprime mortgage defaults bolstered shares of Japanese exporters such as Sony Corp. and Canon Inc., and lifted indexes in Hong Kong and China to record levels.

Japan's Nikkei 225 index (JP:1804610: news, chart, profile) ended 2.6% higher at 16,569.09, after the Wall Street Journal and the Washington Post reported that the U.S. government is due to announce a bailout plan later on Friday to help stem a wave of mortgage defaults. The broader Topix index (JP:1804609: news, chart, profile) advanced 2.6% to 1,608.25.

-cut-

Under the U.S. government's plan, the Federal Housing Administration mortgage finance program will be changed to allow more people to refinance with FHA insurance if they fall behind on adjustable-rate mortgages, according to the reports. Currently, people who have missed mortgage payments are ineligible for FHA insurance.

http://www.marketwatch.com/news/story/asia-surges-records-talk-us/story.aspx?guid=%7B66E92D24%2DBAD5%2D4749%2DBDCF%2DB95AF5581B03%7D&dist=SecMostRead

[fedsron2us]

59. Idiots

Still if there happy to be paid with funny money from the Bernanke printing press more fool them.

[MaineDem]

6. Where's the money?

A valiant idea but where's the money going to come from?

[Nimrod2005]

13. China

[fedsron2us]

62. Easy

The bankrupt US government will raise the cash from the bankrupt US taxpayer to bail out the bankrupt US homeowner. It will all be financed with monopoly money from the Bernanke printing press. Every time they pass GO they will get another 100 billion dollars.

[roamer65]

65. The FRB computers.

They'll just convert more bad sub-prime paper to Bernanke bucks. Now we know why they stopped publishing the M3 money supply data.

[Maeve]

8. Nice idea, however....

The "services and products" these people need can be summed up as "money" and maybe "time". Sometimes, what they need is "living wages" or "jobs with security".
However, we'll probably just sell them something else.

[Nimrod2005]

15. Bingo!

They will go from one loan with certain terms to a different loan with certain terms...someone somewhere will take a hit, write it off for taxes and move on. The borrower will stay on the hook for 50 years instead of the 30 years.

[UpInArms]

14. Bush also was to discuss efforts to prevent these kinds of problems from arising in the future.

and the guy that didn't foresee 911 after he got a NIE entitled "Bin Laden Determined To Attack US" - because it didn't have an engraved invitation to the date and time

and the guy that played the guitar and ate birthday cake while Katrina ripped through NOLA - because no one could have foreseen that a Cat 5 would topple those levies

and the guy that went to war in Iraq based on lies and thought it would be a cake walk that the costs would be covered by the oil revenues and the people would greet us with flowers and sweets

.....

ummmm

never mind

[Ghost Dog]

24. FTSE up on hopes Bush, Fed to tackle subprime

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070831:MTFH01744_2007-08-31_11-23-21_L31250201&type=comktNews&rpc=44

LONDON, Aug 31 (Reuters) - The UK's index of leading shares rose 0.8 percent on Friday, as European investors pinned their hopes on U.S. President George Bush and the Federal Reserve joining forces to tackle the subprime mortgage crisis.

Comments by Fed Chairman Ben Bernanke in a speech on housing and monetary policy due later will be closely watched by financial markets, which are already expecting the U.S. central bank to cut interest rates by at least a quarter percentage point at its Sept. 18 meeting.

President George W. Bush is also due to outline reforms to help homeowners with subprime mortgages at 1510 GMT.

At 1101 GMT the FTSE 100 .FTSE was up 48.7 points, or 0.8 percent, at 6,260.7.

"We are in excellent hands. (Bernanke) did his doctorate on the great depression of the 1930s," said Edward Menashy, an economist at Charles Stanley, adding:

/... :silly:

[antigop]

43. Oh, NOOOO! They're "pinning their hopes" on Bush? n/t

[UpInArms]

48. US STOCKS-Wall St cuts gains on Bush comments

http://www.reuters.com/article/bondsNews/idUSN3146402420070831

NEW YORK, Aug 31 (Reuters) - U.S. stocks cut gains on Friday after President Bush said it was not the government's job to bail out speculators in connection with losses in the home mortgage and credit market sectors.

The Dow Jones industrial average (.DJI: Quote, Profile, Research) was up 89.09 points, or 0.67 percent, at 13,327.82. The Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) was up 10.24 points, or 0.70 percent, at 1,467.88. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was up 18.50 points, or 0.72 percent, at 2,583.80.

[UpInArms]

50. PIEHOLE Spew: Bush: Economy strong enough 'to weather turbulence'

08. Bush: Regulators will track down dishonest lenders
11:16 AM ET, Aug 31, 2007 - 2 hours ago

09. Bush: Administration launching foreclosure avoidance program
11:15 AM ET, Aug 31, 2007 - 2 hours ago

10. Bush: Government has 'limited role' to aid mortgage woes
11:10 AM ET, Aug 31, 2007 - 2 hours ago

11. Bush urges lenders to help borrowers adjust mortgages
11:10 AM ET, Aug 31, 2007 - 2 hours ago

12. Bush: Financial markets in period of transition
11:07 AM ET, Aug 31, 2007 - 2 hours ago

13. Bush: Economy strong enough 'to weather turbulence'
11:07 AM ET, Aug 31, 2007 - 2 hours ago

[ozymandius]

58. That's not going to go over well overseas Monday. n/t

[fedsron2us]

63. Excuse my scepticism

I find it impossible to believe that the Bush administration gives a damn about whether ordinary US citizens have their homes foreclosed. If mortgage defaults were the only issue then there would not be a financial crisis. The issue is that these mortgages have been used as securities to leverage a mountain of other debt and some of it is threatening the bottom line for the wealthiest section of society.

[DemReadingDU]

64. It's all about the wealthiest section of society

This administration has not been for the middle/lower class. This administration is for the CEOs of big companies & big banks. It's for the war profiteers. It's how to put big bucks into their big pockets.

Nope, can't have the big guys with empty pockets.

[ozymandius]

7. Bernanke under pressure to tip his hand

JACKSON HOLE, Wyo. (MarketWatch) -- The mountains of Wyoming are beautiful, but dangerous. You never know when you'll run into a bear or blunder into a boiling hot spring.

Those are the perils Federal Reserve Chairman Ben Bernanke faces during this weekend's Fed retreat in the Grand Tetons: He could find himself in hot water if he fails to reassure skittish financial markets that the Fed will act to rescue the economy before the credit crunch gets worse. But he doesn't want to feed the bears, either.

Bernanke will walk a fine line during his speech on Friday to open the Fed conference on housing and the economy. He'll want to appear in touch with the market turmoil while at the same time maintaining Fed flexibility and independence, according to Fed watchers.

The message the market wants to hear, apparently, is that the Fed will cut the federal funds target rate at the meeting in less than three weeks.

-cut-

Many economists think Bernanke will try to find some way to be supportive of financial markets without promising a cut in the federal funds rate, which still stands at 5.25%. The financial futures markets expect one or possibly two rate cuts by the end of September.

The Federal Open Market Committee has signaled that a rate cut is possible, but not certain.

http://www.marketwatch.com/news/story/bernanke-under-pressure-tip-his/story.aspx?guid=%7B40683AB9%2D68C0%2D474A%2DAADB%2D5420C46B5A80%7D

[Nimrod2005]

12. I say he is not going to.........nt

[Demeter]

18. HOW Can You "Rescue" This Aborted Economy?

Impeaching and RICOing the GOP would be a good start; then reinstating taxes on the rich and the corporations, especially windfall profits tax on oil companies; then tracking down off-shore accounts and telling people to clean up their accounting....

Of course, none of these actions are considered!

[UpInArms]

42. Chopper Ben's Dog and Pony Show:

09. Bernanke: Financial market developments effect broad economy
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

11. Bernanke: Global financial system in strong position
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

12. Bernanke sees possible adverse effects on consumer spending
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

13. Bernanke: Housing weakness could be deeper due to credit woe
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

14. Bernanke: Fed ready to take more steps to add liquidity
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

15. Bernanke: Fed to pay close attention to 'timeliest' data
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

16. Bernanke repeats pledge to protect economy from turmoil
10:00 AM ET, Aug 31, 2007 - 28 minutes ago

[54anickel]

46. The Writing is on the Wall (Schiff)

http://www.prudentbear.com/index.php?option=com_content&view=article&id=4743&Itemid=57

This week, Larry Kudlow and others strongly chastised Bernanke for his failure to read the writing on the wall and urged the Fed Chairman to quickly slash the Fed Funds rate. Methinks the pundits doth protest too much. For years, Kudlow, who practically coined the term “Goldilocks economy,” has dismissed with scorn suggestions that the American economy was anything less than ragingly healthy. If our economy is really so strong, why does he call so loudly for the artificial stimulus of a significant rate cut?

In truth, the writing has always been clearly on the wall all along. A credit bubble has been steadily inflating for at least the last six years, which in its final frenzy produced some of the most absurd mortgage funding products the world has ever seen. To anyone not dependent on the hysteria, a no-doc, no money down, negative amortization, interest only, adjustable rate jumbo mortgage was a just as clear a sign of pending catastrophe as $200 for a share of Pets.com, or 5,000 Dutch guilders for a single tulip bulb.

The one thing all bubbles have in common is that they eventually pop, and ours just did. Unlike the popping of the last bubble in 2000-2001, this one will fall directly to our economy’s bottom line. And this time the Fed can not step up to the plate with unlimited liquidity injections.

A record percentage of our GDP is comprised of consumer spending. The source of this spending was the housing bubble. Would our savings rate really be negative were it not for housing related “wealth?” Could consumers really have spent as much as they did without the benefits of temporarily low teaser rates and the ability to extract equity from their homes? How many service sector jobs are directly related to that extra spending? When the low mortgage payments and home equity disappear, so too will the spending and jobs they engendered.

Those who feel that the economy will keep growing must believe that discretionary consumer spending is unrelated to wealth or expenses. In other words, they believe that individuals will spend as much with no home equity and $3,000 per month mortgage payments as they did with $200,000 in home equity $1,500 monthly payments. Factor in other rising expenses; such as food, energy, insurance, and taxes and discretionary spending will not just slow, it will completely collapse.

more...

[DemReadingDU]

54. Excellent reading

Though I think most of us here already have seen this coming.

[ozymandius]

57. I believe that regulars and regular lurkers are nodding their heads.

This sentiment has been assimilated into our bedrock ideas.

[Theres-a]

72. Lurking waitress here

"How many service sector jobs are directly related to that extra spending? "

Sighs.Nods.

[UpInArms]

9. dollar watch

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

Last trade 80.719 Change -0.148 (-0.18%)

Bernanke Holds Currencies Hostage

http://www.dailyfx.com/story/bio1/Bernanke_Holds_Currencies_Hostage_1188507955280.html

Fed Chairman Ben Bernanke is holding currencies hostage ahead of his speech at Jackson Hole tomorrow and the symposium over the weekend. Whatever gains were made yesterday have been given back today. The most recent data on the housing market tells us that prices are falling and foreclosures are rising. The labor market is also showing signs of buckling with jobless claims increasing by the largest amount since April. The help wanted index released by the Conference Board also sunk to a 49 year low. With interest rates on mortgages rising, lenders being more stringent and more inventories expected to flood the markets over the next 6 to 12 months, there are not many positive things that Bernanke can say about the housing market. Yet the topic that everyone is talking about today is whether Bernanke will focus on the financial or economic crisis. If he is focused exclusively on the financial crisis, then one could argue that the credit markets have stabilized which means that the Fed may not feel the urgency to lower interest rates. If they are worried about the economic crisis on the other hand, then a rate cut is certainly warranted because even though Q2 GDP was the strongest in over a year, growth in the third and fourth quarter will not be as pretty. In his last few years as Fed Chairman, Greenspan has been more reactive than proactive and it appears that Bernanke has been doing the same. We however continue to believe that a rate cut is necessary because eventually the weakness in the labor market will lead to softer consumer spending. The Fed will probably make an internal decision about what to do with interest rates, but given the amount of time still left until the next monetary policy meeting, they do have the luxury of waiting for more up to date economic data as well as watching how traders behave when they return from their summer holidays. The Fed will not be the only central bank representing at Jackson Hole, officials from the Bank of England and Bank of Japan will also be in attendance. Originally ECB President Trichet was supposed to attend the symposium, but he cancelled today due to “personal reasons.” Some people are speculating that he has decided to not attend so that he could stay in Brussels to monitor market movements. Although we could see more volatility in the currency and stock market tomorrow, don’t expect Bernanke to provide much more clarity on the September rate decision. Nearly every other central bank including the Bank of Canada, European Central Bank and Bank of England will be meeting before the Fed, which means that the market’s focus should quickly shift to what other central banks are doing.

...more...

Central Banks: Who Will Raise Rates, Cut Rates or Leave them Unchanged?

http://www.dailyfx.com/story/topheadline/Central_Banks__Who_Will_Raise_1188503596222.html

nterest rates have a huge impact on forex trading, and currently, central banks have been on edge as volatility in the financial markets may have derailed plans for further monetary policy tightening. Over the course of the next week, a total of four central banks will meet and announce their rate decisions, and the Australian dollar, Canadian dollar, Euro, and British pound could all be subject to a jump in volatility as the RBA, BOC, ECB and BOE all continue to hold a hawkish bias. However, only one bank shows a substantial risk of an imminent hike this week. Who will it be? Also, what will the Federal Reserve’s next move be?

The chart below highlights which central banks we consider to have the most severe tightening bias and more importantly, which are the most likely to increase interest rates in the near term. While all of them have demonstrated a hawkish stance lately, certain factors pertinent to their respective economies leave banks, such as the European Central Bank, prone to earlier action.

<snipping chart>

Federal Reserve: The Rate Decision That Will Be Heard Around the World
Rate Announcement: September 18, 2007 at 18:15 GMT
Bias: Possible Rate Cut

The US markets have made it very clear that they are begging for a rate cut on September 18th, and the stakes are quite high for the Federal Reserve, as a continued liquidity crunch threatens to severely impair financial operations and economic growth. The Federal Reserve has taken many measures to try to stem some of these pressures, as they lent billions of dollars of temporary reserves to the banking system and also went so far as to cut its discount rate by 50 basis points to 5.75 percent on August 17th in an attempt to help distressed banks borrow money.

Nevertheless, Ben “Helicopter” Bernanke could be coming in with additional assistance for the markets, and he will have the opportunity to discuss his next move with the rest of the FOMC and central bankers from the Bank of England and the Bank of Japan (European Central Bank President Jean-Claude Trichet cancelled his appearance this morning) on August 31st at the Federal Reserve’s annual symposium in Jackson Hole, Wyoming. Currently, Fed fund futures are pricing in a 25 basis point rate cut on September 18th and as many as three rate cuts are expected by year end. However, any commentary by Bernanke that sways investor sentiment on coming monetary policy will shift market expectations and spark major price action. Traders should also keep in mind that Bernanke and other policymakers attending the conference could also be quoted over the course of the weekend events, which may be reflected in the markets on Monday.

...more...

[UpInArms]

10. Whhheeee! We're Gonna Hear Speeches! Futures jump ahead of speeches

Just remember - talk is cheap :eyes:

http://news.yahoo.com/s/nm/20070831/bs_nm/markets_stocks_dc

NEW YORK (Reuters) - Stocks were poised to leap out of the gate on Friday as investors bet President Bush would unveil a plan to help subprime mortgage borrowers and loosen credit conditions that have dogged financial markets for six weeks.

Anticipation that Federal Reserve Chairman Ben Bernanke may signal an interest rate cut is coming soon in a speech on Friday also fueled a rally in stock futures, suggesting major indexes could open with gains approaching 1 percent.

Bush will discuss the need for legislation aimed at giving the Federal Housing Administration the flexibility to help subprime mortgage borrowers who can't make their payments, two administration officials told Reuters.

Bush was scheduled to speak at 11:10 a.m. EDT in the White House Rose Garden.

But before Bush's remarks, investors will hear a speech by Bernanke. They will be looking for signs about when the Fed may cut interest rates as concern mounts that housing and credit market problems could trigger a recession. He is scheduled to speak at 10 a.m. EDT at a central bankers' annual retreat in Jackson Hole, Wyoming.

"It's comforting to investors that Bush and the administration are recognizing that there's a problem, but I still think the subprime mortgage problem is just going to get worse. It has spread across the whole mortgage market," said Benjamin Halliburton, managing director at Tradition Capital Management in Summit, New Jersey.

...more...

ummmm - sorry mr Halliburtom, I just can't get my give-a-shit to work with your name.

(edit for tpoy)

[UpInArms]

19. U.S. stock futures up before Bernanke, Bush speeches

http://www.marketwatch.com/news/story/us-stock-futures-up-before/story.aspx?guid=%7B5FA94A95%2DECA8%2D4A8F%2D9302%2DFCB09C61DB93%7D

LONDON (MarketWatch) - U.S. stock market futures climbed Friday on hopes that housing woes may be alleviated both by interest-rate and legislative policy, as markets looked ahead to key speeches from Federal Reserve Chairman Ben Bernanke and President Bush.

S&P 500 futures rose 16.4 points at 1,478.00 and Nasdaq 100 futures gained 20.25 points at 1,995.00. Dow industrial futures climbed 107 points.

International stocks also were stronger, notably in Tokyo where the Nikkei 225 rose 2.6%. The FTSE 100 rose 0.9% in London.

The speech from Bernanke, due at 10 a.m. Eastern from Jackson Hole, Wyo., could give him the opportunity to tip his hand at an interest-rate cut - or, as many believe, not.

"There is the possibility that it's going to be a dud," said Brian Sack, a former Fed economist and now vice president at Macroeconomic Advisers LLC.

...more...

[Nimrod2005]

11. Good morning folks. Fasten your seatbelts, never know what ride we may go on today!

I am not going anywhere, I plan to monitor the gambling channel all day.

I predict the new Fed chair will flunk at 10:00 AM, tanking the markets about 250 points, then * will "save" the day after his remarks at 11:00 AM.

[UpInArms]

16. Head of subprime-hit German bank resigns

http://news.yahoo.com/s/afp/20070830/bs_afp/marketsfinancegermany

FRANKFURT (AFP) - The head of German bank SachsenLB, which was stricken by losses linked to investments in US subprime home loans, has become the latest bank chief to step down in the wake of the mortgage crisis.

Herbert Suess, 67, chose to relinquish his responsibilities as chief executive on September 15, while another two directors have been sacked, SachsenLB said.

Their departure comes three weeks after the turmoil in the US home loans market prompted the resignation of the chief financial officer of Germany's IKB bank, Volker Doberankzke.

He stepped down just days after the crisis saw Bear Stearns senior executive Warren Spector quit his post at the US investment bank, which suffered massive losses as a result of the mortgage market crisis.

German banks have been particularly badly hit by their exposure to bad loans in the United States, leading to liquidity crises and a flurry of rescue operations.

...more...

[UpInArms]

17. Barclays needs central bank loan

With a Hattip to Henny Penny and this DU thread: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2973111

http://news.bbc.co.uk/1/hi/business/6971731.stm

Barclays says that a "technical breakdown" in the UK's clearing system forced it to borrow £1.6bn from the Bank of England.

It is the second time this month that the bank has tapped into the central bank's emergency credit line, sparking fears it is facing a cash crisis.

But the UK bank insisted it was "flush with liquidity".

<snip>

But traders have questioned the bank's explanation, saying the loan was taken out at about 1100BST on Thursday - five hours before money markets shut and well before the problems hit the electronic trading system.

"When you add this to the senior resignations a week or so ago, you can understand why the stock is coming under pressure," said Simon Denham, managing director of Capital Spreads.

Edward Cahill, the man in charge of structuring debt investments at the bank's investment arm Barclays Capital, unexpectedly resigned last week.

...more...

[UpInArms]

20. Commercial paper and why it matters

http://www.marketwatch.com/news/story/normally-safe-commercial-paper-market/story.aspx?guid=%7B75C0DAD1%2D831E%2D4CDA%2D9932%2D32F7158AC7F6%7D

SAN FRANCISCO (MarketWatch) -- Before this summer, few investors probably bothered to understand a rather staid and highly specialized part of modern financing: commercial paper.

But now, the all-encompassing term has abruptly moved into the spotlight. As mortgage lenders struggle to stay afloat and credit markets reel worldwide, even the shortest of short-term financing for business operations is facing what some view as unprecedented pressure.

"Commercial paper markets have been hurt just as much as a lot of other credit markets," said RBC Capital Markets analyst Jason Arnold.

Outstanding commercial paper fell by $62.8 billion, or 3.1%, in the week ended Wednesday to $1.98 trillion, bringing the total decline in the past three weeks to $244 billion, or 11%, the Federal Reserve reported Thursday.

Such a hit has taken place despite commercial paper's seemingly safe-haven status in lending. "It's kind of like a margin account that businesses use for short-term financing," Arnold said.

While it has been a primary source of funding for corporate mergers and acquisitions, it "can be used for almost anything," said Raymond Benton, a Denver-based adviser who purchases individual bond issues for high net-worth clients. Commercial paper is a generic term for most any short-term corporate borrowing, he added. "It's nothing more than a short-term note that can come due in as little as 30 days or less," Benton said.

...more...

[DemReadingDU]

36. 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]

38. don't know the answer to that question - DRDU

but maybe someone else will chime in if they have more information

:hi:

[UpInArms]

47. Subprime auto lenders are confident, analysts aren't

http://www.reuters.com/article/bondsNews/idUSN3122491620070831

NEW YORK, Aug 31 (Reuters) - U.S. subprime auto lenders say they do not see a rising wave of defaults, but over the past year they have made a number of moves to burnish the scratches and dents in their loan portfolios.

Triad Financial Corp, partly owned by Goldman Sachs Group Inc (GS.N: Quote, Profile, Research), recently disclosed that 21.4 percent of the loans in its portfolio have been granted payment extensions to help borrowers experiencing financial troubles. That's an 88 percent increase over the level reported at the end of June 2006.

The company did not return calls seeking comment.

Payment extensions are a fact of life in the $300-billion-a-year industry, giving companies a better chance at collecting more money over the life of a loan.

In recent weeks, shares of U.S. subprime auto lenders have been hammered as investors link them with the meltdown in the subprime mortgage industry.

"It's guilt by association," said Chris Choate, chief financial officer of AmeriCredit Corp (ACF.N: Quote, Profile, Research), one of the largest independent U.S. subprime auto lenders.

AmeriCredit competes against bigger and more diversified lenders, including Capital One Financial Corp (COF.N: Quote, Profile, Research), HSBC Holdings Plc's (HSBA.L: Quote, Profile, Research) U.S. consumer unit, Wachovia Corp (WB.N: Quote, Profile, Research), Citigroup Inc (C.N: Quote, Profile, Research), JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) and Wells Fargo & Co (WFC.N: Quote, Profile, Research).

...more...

[UpInArms]

26. Barclays, Cairn say restructure SIV-lite as CDO

http://www.reuters.com/article/bondsNews/idUSL3190176620070831

LONDON, Aug 31 (Reuters) - Barclays Capital, the investment banking arm of Barclays Bank (BARC.L: Quote, Profile, Research), and hedge fund Cairn Capital said on Friday they had successfully restructured the Cairn High Grade Funding I (CHGF) SIV-lite structure.

SIV-lite structures have been hit by a double whammy as the short-term funding they rely on has become more difficult to obtain and the value of the securities they invest in -- mostly in the asset-backed market -- has fallen.

Barclays and Cairn said in a statement the restructuring, which had been approved by investors, was necessary due to the closure of the asset-backed commercial paper market on which the structure had relied on for funding.

"The restructuring has eliminated market-value triggers and the reliance of CHGF upon the ABCP market. CHGF has now been converted into a cash flow CDO," the two firms said, with all outstanding ABCP to be redeemed as it matures and replaced by term funding.

...more...

[fedsron2us]

69. Leaking like SIVS

http://www.theglobeandmail.com/servlet/story/LAC.20070831.RKOZA31/TPStory/Business

This crisis is about leverage not about mortgage defaults. They are just the trigger.

[ozymandius]

31. Oh dear. This really fares poorly under scrutiny.

(1) It is the second time this month that the bank has tapped into the central bank's emergency credit line.

(2) The loan was taken out at about 1100BST on Thursday - five hours before money markets shut and well before the problems hit the electronic trading system.

(3) Edward Cahill, the man in charge of structuring debt investments at the bank's investment arm Barclays Capital, unexpectedly resigned last week.

[UpInArms]

21. December gold up $9.40 at $683.30 an ounce on Nymex

01. December gold up $9.40 at $683.30 an ounce on Nymex
8:24 AM ET, Aug 31, 2007 - 5 minutes ago

[UpInArms]

23. Cerberus to push through Bawag job cuts faster than planned - report

http://www.forbes.com/markets/feeds/afx/2007/08/31/afx4071232.html

FRANKFURT (Thomson Financial) - Cerberus is planning to push through 400 job cuts at Austrian bank Bawag by the end of next year, earlier than the previous goal of end-2011, Financial Times Deutschland reported, without saying where it got the information.

Workers over the age of 50 are to be offered early retirement packages, the report added.

Cerberus bought Austria's fourth-biggest bank in May for 3.2 bln eur and now plans to return the company to profitability by divesting non-core activities and improving net profit tenfold to 400 mln eur by 2011, it said.

...more...

[Joanne98]

33. Here's a pic to go with that!

[UpInArms]

35. their Cerebus goes well with the Hydra

that I have always considered the sign of the BFEE

[Joanne98]

37. Cool! Just added it to my collection of evil!

:hi:

[UpInArms]

25. F&C chief puts money in ailing derivatives fund

http://www.reuters.com/article/bondsNews/idUSL3190511920070831\

LONDON, Aug 31 (Reuters) - The chief executive of F&C Asset Management (FCAM.L: Quote, Profile, Research) has invested $1 million of his own money to boost confidence in one of the firm's hedge funds that has suffered a 22 percent decline in the year to Aug. 21.

The 212 million-euro ($290 million) Amethyst Fund, which was launched as a single-strategy equity volatility trading fund investing in derivatives contracts, has suffered fallout from the U.S. mortgage and structured credit markets even though it has no direct exposure to subprime home loans or credit derivative products.

F&C said the fund had a liquidity buffer in excess of 20 percent of the portfolio and was therefore not facing a liquidity crunch as has some of its peers.

...more...

[UpInArms]

27. McGraw-Hill replaces president of Standard & Poor's

http://www.reuters.com/article/bondsNews/idUSN3120612820070831

NEW YORK (Reuters) - Publisher McGraw-Hill Cos Inc is replacing the president of Standard & Poor's, the company's financial services division, effective immediately, amid questions about the role of credit-rating agencies in the subprime mortgage crisis.

Deven Sharma, who joined the company in 2002, replaces Kathleen Corbet, who is stepping down to pursue other opportunities, McGraw-Hill said in a statement on Thursday, without elaborating. Company spokesmen were not immediately available for further comment.

Sharma has served as executive vice president of investment services and global sales for Standard & Poor's since November 1, 2006. He will report to Harold McGraw III, the chairman, president and chief executive of McGraw-Hill.

"The continual expansion of the world's capital markets presents enormous growth opportunities for Standard & Poor's, and Deven's strategic thinking and deep understanding of global financial markets will help us continue to identify and benefit from these opportunities," McGraw said.

Before joining McGraw-Hill, Sharma, 51, was a partner with management consulting company Booz Allen Hamilton for 14 years.

...more...

[UpInArms]

29. CEO pay: 364 times more than workers

http://money.cnn.com/2007/08/28/news/economy/ceo_pay_workers/index.htm?postversion=2007082908

NEW YORK (CNNMoney.com) -- Pay comparisons almost always leave someone feeling dwarfed, and none more so than the CEO-to-worker pay gap. But even CEOs have reason to feel seriously dwarfed these days, thanks to the outsized paychecks of private equity and hedge fund managers.

The average CEO of a large U.S. company made roughly $10.8 million last year, or 364 times that of U.S. full-time and part-time workers, who made an average of $29,544, according to a joint analysis released Wednesday by the liberal Institute for Policy Studies and United for a Fair Economy.

That gap is down from 411 times in 2005 and well-below the record high of 525 times recorded in 2000. But the comparison isn't exactly apples-to-apples, in part because IPS and UFE changed how they measured CEO options pay this year.

CEOs ride off into the (well-funded) sunset

The IPS and UFE pay-gap numbers are also wider than some other measures of CEO-to-worker pay because they count both full-time and part-time workers in their calculations, which effectively lowers workers' average pay due to fewer hours worked.

If you just consider the average compensation (wages plus benefits) of full-time year-round workers in non-managerial jobs - roughly $40,000 - CEO pay is more like 270 times bigger than the average Joe's. That's still a far cry from days gone by. In 1989, for instance, U.S. CEOs of large companies earned 71 times more than the average worker, according to the Economic Policy Institute.

...more...

[UpInArms]

30. Holiday 2007: 4 red flags

http://money.cnn.com/2007/08/28/news/economy/holiday2007_risks/index.htm?postversion=2007082814

NEW YORK (CNNMoney.com) -- The upcoming fourth quarter is the make-or-break period for the retail industry and the path leading to the crucial holiday season is peppered with landmines.

As much as 50 percent of merchants' annual profits and sales are accounted for in two months: November and December.

<snip>

Double trouble for retailers. Falling home prices, subprime mortgage and credit market meltdowns are finally pressuring consumer spending.

"The lower one-third of U.S. households who got into subprime mortgages in the later stages of a housing boom are now having problems making their payments and they're facing foreclosures," said Nigel Gault, U.S. economist with forecasting firm Global Insight.

The broader consumer base of middle-income households, who fuel a bulk of consumer spending, aren't losing their homes, but they're facing declining home prices after years of a price boom. So far, consumer spending has outpaced income growth because they tapped into home equity to fuel shopping habits.



...more...

[AnneD]

66. What this on the ground reporter has said for a while now....

"Store traffic declining: Shopping trips to malls have declined for 6 of the past 7 months months, according to Chicago-based market research firm ShopperTrak RCT.

"It's the first time that we've seen traffic fall across the United States and we're alarmed by this continuous drop," said Bill Martin, CEO of ShopperTrak, which monitors traffic and sales at close to 50,000 retail locations nationwide.



I think it has been going on longer than their admitting to. It has been dead during the week, slightly more on the week end-but I haven't been having trouble getting a table anywhere. Just like it was when we had our RE crash in the 80's. People have had much discretionary spending in a while.

[DemReadingDU]

68. In SW Ohio, I don't see many people with shopping bags

but we have had a big influx of new restaurants. And restaurants are filled, some people having to wait an hour or longer. Some people must be using credit cards and charging these outlandish meals, they are expensive.

[AnneD]

70. In our region....

folks are not eating out and buying less. It really is restricted to week ends any more. I think the long term Houstonians remember how had it was here when we had the RE bust in the 80' and are cutting back.

[UpInArms]

32. 9:32 EST and check out who's winning

Dow 13,345.22 106.49 (0.80%)
Nasdaq 2,595.34 30.04 (1.17%)
S&P 500 1,467.15 9.51 (0.65%)
10-Yr Bond 4.574% 0.072

NYSE Volume 33,789,000
Nasdaq Volume 42,385,000

02. Citigroup rises 1.6%, to $46.95 in pre-open trade
9:06 AM ET, Aug 31, 2007 - 24 minutes ago

03. J.P. Morgan shares rise 1.8% to $44.75 in pre-open trade
9:06 AM ET, Aug 31, 2007 - 24 minutes ago

04. American Express shares rise 2.2%, to $58.99 in pre-open
9:06 AM ET, Aug 31, 2007 - 24 minutes ago

05. Bank of America rise 1.6% to $51 in pre-open trade
9:06 AM ET, Aug 31, 2007 - 24 minutes ago

06. Goldman Sachs rises 2%, to $174.80 in pre-open trade
9:06 AM ET, Aug 31, 2007 - 24 minutes ago

07. Bear Stearns shares rise 2.7%, to $109.56 in pre-open trade
9:06 AM ET, Aug 31, 2007 - 24 minutes ago

08. Lehman Bros. shares rise 3.2% to $55.50 in pre-open trade
9:06 AM ET, Aug 31, 2007 - 24 minutes ago

09. Morgan Stanley shares rise 2.2%, to $61.50 in pre-open trade
9:06 AM ET, Aug 31, 2007 - 24 minutes ago

10. Merrill Lynch shares rises 1.8%, to $73.50 in pre-open trad
9:06 AM ET, Aug 31, 2007 - 24 minutes ago

[54anickel]

45. Soooo, a bailout is a sure bet? WTF? n/t

On edit - Should have read your previous post #42 first. "I see said the blind man."

[ozymandius]

34. off to a rollicking start

9:35
Dow 13,356.11 Up 117.38 (0.88%)
Nasdaq 2,592.12 Up 26.82 (1.05%)
S&P 500 1,473.08 Up 15.44 (1.06%)
10-Yr Bond 4.57% Up 0.068
NYSE Volume 74,765,000
Nasdaq Volume 67,107,000

09:15 am : S&P futures vs fair value: +18.7. Nasdaq futures vs fair value: +26.0.

09:00 am : S&P futures vs fair value: +18.7. Nasdaq futures vs fair value: +25.5. A bullish bias persists in pre-market action as both S&P 500 and Nasdaq 100 futures hold their own well above fair value. Investors are embracing everything from Bush’s subprime mortgage proposal, which is restoring confidence throughout the beaten-down Financial sector, to tame inflation data, which boosts rate cut expectations.

With regard to Financials, the return of its leadership will be a crucial leg of support for a market that struggled to find direction yesterday as the absence of its upside influence acted as an overhang.

[antigop]

44. Fidelity's deafening silence

http://money.cnn.com/2007/08/30/magazines/fortune/sellers_fidelity.fortune/index.htm?postversion=2007083105

>>
The Yankee way of facing setbacks, as any Boston Brahmin knows, is to stiffen the upper lip and suffer in silence. As three of Fidelity Investments' key executives quit in rapid succession this year - mutual funds boss Steve Jonas in January, COO Bob Reynolds in April, and Ellyn McColgan, the head of operations and distribution, in August - the company's billionaire owner and CEO, Ned Johnson, has played to type. He has not gone out of his way to discuss the upheaval with worried employees. He hasn't admitted any problems in the press, which he has long shunned. Nor has he addressed another personnel matter, not even to Fidelity's senior brass: the health of his daughter, Abby, who runs the multibillion-dollar 401(k) and employer services division.
...
Fidelity's talent exodus, meanwhile, continues. Abby's division has lost several key executives. In July, Jeff Carney, president of Fidelity Retirement Services, jumped to Bank of America, while EVP Michael Sternklar went to Mercer Human Resources Consulting. Star 401(k) salesman Bill McDermott is also leaving. "We're talking to people who we could never get out of Fidelity," says one recruiter who likes to poach from the company. "Now they're desperate to get out because there's no end in sight to the inconsistency of leadership."
>>

[UpInArms]

51. OT: White House press secretary Tony Snow resigning: AP

03. White House to name Dana Perino to succeed Tony Snow: AP
12:15 PM ET, Aug 31, 2007 - 1 hour ago

04. White House press secretary Tony Snow resigning: AP
12:14 PM ET, Aug 31, 2007 - 1 hour ago

[DemReadingDU]

53. He really does need to spend time with his family

He has not looked well for a few weeks.

[AnneD]

67. They way he has been looking,

he may only HAVE a few weeks.

[olddad56]

52. The market is always up on a Friday before a three day weekend.

The Pros have taken the day off. It is Amateur day.

[ozymandius]

55. 2:09

Dow 13,400.82 Up 162.09 (1.22%)
Nasdaq 2,593.59 Up 28.29 (1.10%)
S&P 500 1,476.70 Up 19.06 (1.31%)
10-Yr Bond 4.537% Up 0.035
NYSE Volume 1,309,685,000
Nasdaq Volume 969,105,000

2:00 pm : Not much has changed since the last update as the major averages continue to vacillate in roughly the same ranges. All three major indices are still up at least 1.2% on average, getting help from gains in all 10 sectors.

Financials continues to pace the way, providing a huge source of much needed support for the S&P 500, which is now up 1.5% for the month. The Dow and Nasdaq are currently up 1.4% and 1.9%, respectively. DJ30 +162.09 NASDAQ +28.62 SP500 +19.54 NASDAQ Dec/Adv/Vol 879/2012/932 mln NYSE Dec/Adv/Vol 449/2788/714 mln

[AnneD]

56. Morning Marketeers.....

:donut: and lurkers. Thing have been a tad crazy around here lately but I can understand what's going on.

On the market side-we have the housing bubble, and I understand that (even jumbo loans). Consumer confidence-wired. I even understand the M3 to a good degree.

I am however, losing my understanding about these central banks adding liquidity. And what does this mean (aside from using a wheel barrel of money to but groceries). Is our entire money system reaching a collapse or what. Some of the banks actions are confusing as are so funds. I am missing a piece of the puzzle and I can't figure out what it is. Can some of you look into your crystal ball and tell me what you see as a possible outcome or outcomes. I won't hold you to it I promise and you can pm me if you prefer. Just trying to grasp this.

Happy hunting and watch out for the bears.

[Amonester]

71. I don't know if these (long) clips would be of any help, but I for one,

must admit of learning a few (important) facts about what's called "The Fed" (A Private "Entity" That Belongs To... who?? "Unknown Riches"), and in short: they "print" money... lotsa, lotsa, lots of money...

Yes, I admit I was "surprised" to learn the "Fed" belongs to a "Private" corporation...

I thought it was the "property" of the "Fed"-eral Government! (Silly me...) :mad:

The Money Masters - How International Bankers Gained Control of America
http://video.google.com/videoplay?docid=-515319560256183936&q=money+masters&total=1272&start=0&num=10&so=0&type=search&plindex=0 :wtf:

[ozymandius]

60. closing numbers reflecting * piehole spewage

Dow 13,357.74 Up 119.01 (0.90%)
Nasdaq 2,596.36 Up 31.06 (1.21%)
S&P 500 1,473.99 Up 16.35 (1.12%)
10-Yr Bond 4.537% Up 0.035
NYSE Volume 2,367,751,000
Nasdaq Volume 1,536,690,000

blather to follow

[ozymandius]

61. Blather has arrived. Have a great long weekend everyone!

Mending the Mortgage Meltdown
Dow +119.01 at 13357.74, Nasdaq +31.06 at 2596.36, S&P +16.35 at 1473.99

Stocks rallied Friday after investors got some reassurance that forces are at work to help stem the contagion effect of the subprime mess on the world's largest economy.

However, with September earmarked as the worst month of the year for all three of the major averages, according to The Stock Traders Almanac, another light volume day left stocks vulnerable to some late-day profit taking that closed stocks at afternoon lows.

Well before the market opened, participants got wind of reports that President Bush was going to outline a plan designed to help subprime borrowers avoid foreclosure. That news provided a psychological boost around the globe, as evidenced by Hong Kong's Hang Seng Index surging 2.1% to a record high. It also sidelined any apprehensions about upcoming inflation data at 8:30 ET and what Fed Chairman Bernanke might or might not say in his speech at 10:00 ET.

With policy makers still eyeing key economic data to determine the proper course of action as it relates to monetary policy, the Fed's favored inflation gauge, the core-PCE index, rose just 0.1% (consensus 0.2%), which leaves the year-over-year increase at just 1.9% and within the Fed's "comfort zone."

That offered some additional encouragement as the market eagerly awaited prepared remarks from Fed Chairman Bernanke which, until news broke about Bush's proposal, was slated to be today's headliner.

As Briefing.com anticipated, Bernanke stayed the course with regard to his message on monetary policy, offering little to suggest that a rate cut is imminent. Nonetheless, investors eventually embraced the Fed Chairman's continued awareness of the credit turmoil by saying the Fed stands ready to provide more liquidity to the financial markets if needed and will act, if necessary, to ensure that economic growth does not deteriorate significantly.

All 10 sectors finished in positive territory, paced by a 1.7% gain in Consumer Discretionary. A similarly strong performance from the more heavily weighted Financial sector (+1.5%), though, was the source of support and assurance the market needed to fight off last-ditch efforts on the part of sellers to take lock in some profits going into the long holiday weekend.
..DJTA +1.9%. ..DJUA +0.4%. ..SOX +1.6%. ..DOT +1.3%. ..XOI +1.3%. ..BTK 1.3%. ..Nasdaq 100 +1.3%. ..S&P Midcap 400 +1.5%. ..Russell 2000 +1.4%.