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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 04:52 AM
Original message
STOCK MARKET WATCH, Wednesday July 23
Source: du

STOCK MARKET WATCH, Wednesday July 23, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 182

DAYS SINCE DEMOCRACY DIED (12/12/00) 2740 DAYS
WHERE'S OSAMA BIN-LADEN? 2465 DAYS
DAYS SINCE ENRON COLLAPSE = 2756
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54



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





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


AT THE CLOSING BELL ON July 22, 2008

Dow... 11,602.50 +135.16 (+1.18%)
Nasdaq... 2,303.96 +24.43 (+1.07%)
S&P 500... 1,277.00 +17.00 (+1.35%)
Gold future... 948.50 -15.20 (-1.59%)
30-Year Bond 4.66% +0.02 (+0.32%)
10-Yr Bond... 4.10% +0.03 (+0.74%)







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 actionpost@legitgov.org

For information on protests and other actions Citizens For Legitimate Government









Read more: du
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 04:58 AM
Response to Original message
1. Market WrapUp: Action-Reaction & Parameters of Interest
BY FRANK BARBERA, CMT

In todays update, we touch simply on a few key elements of todays market with an eye on setting up some parameters of interest for the weeks ahead. It appears, given the large counter-trend rally in financials, that the stock market indices have made a material short term low ushering in a period of relative calm and stability likely over the next two to three weeks. While this may sound like a positive, this period of stability is likely to be much shorter than the period seen between March and May, and could be followed by a period of far more intense volatility heading into what is usually the worst months of the year in September and October.

In our view, we believe the upcoming presidential election will have zero positive, stabilizing effect on the equity markets. Instead, markets will continue to be ruled by the underlying economic and financial problems which are heavily entrenched and likely to get progressively worse. The faade of a bounce and a relative calm on this occasion is especially poorly supported.

Take a look at the action today in Wachovia (WB), where the company announced a staggering $8.66 billion dollar loss for the most recent quarter, a loss equivalent to $4.20 per share. In addition, WB notched $6.1 billion in write downs, cut the dividend by 87% from $.375 to $.05 and announced job lay offs of 6,350 workers, about 5% of the companies workforce. Loan loss provisions exploded by 3100% showing that management was entirely blindsided by the collapse in housing and mortgage related debt. Yet, the stock reaction opening down hard and then up big as Wall Street cheered the fact that WB will not be issuing more stock in order to raise additional capital is nothing less than a sick joke. With the stock ending up +3.25 at $16.43, a gain of 24.43%, what message is the market sending to management? That it did well? Or perhaps the message goes something like this: Wall Street to Bank Management: 'Well, we know you blew it royally, but now we understand that you understand that you blew it royally, and as a result, since youre going to extract this extra pound of flesh from your workers by chopping heads (and not asking us for help), you have temporarily earned back our confidence and we reward you with a 25% stock gain'

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

Sick. Sick. Sick.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:25 AM
Response to Reply #1
9. RGE Monitor's Newsletter (email)
After a scary past week for financial stocks, some better than expected headline Q2 results, namely Wells Fargo, JP Morgan, and Citibank are providing relief. In his latest writing, Nouriel Roubini explains why the reported headline figures most likely overstate the true financial conditions of banks and financial institutions. Among the factors listed are some that can be classified as creative accounting, some as regulatory forbearance and some as earnings manipulation... While some authors suggest forbearance is the main obstacle to a fresh start, others point to the opportunity costs of an unnecessarily large number of bank failures.

As long as house prices continue to slide and the economic outlook darkens, the realistic scenario includes more banking trouble ahead especially among smaller regional banks and thrifts. Some analysts set the number of bank failures as high as 300 in case of a recession on the scale of the 1980s and the early 1990s.

The FDIC itself keeps a watch list of troubled banking institutions. The list of by now 90 institutions is kept secret for obvious reasons (i.e. fears of run on deposits), but many analysts are circulating their own list of shaky institutions based on a variety of indicators.

Whether the fallout will be contained for the taxpayer depends on the strength of the Federal Deposit Insurance Corporations (FDIC) safety net. By law, the FDIC maintains a banking insurance fund equal to 1.25 percent of the level of insured deposits . Today, a $53bn fund of ultra-safe treasury bonds stands behind $4.2 trillion in insured deposits . The failure of IndyMac alone will deplete the FDICs reserve fund by $4-8bn (or 15%), thus lowering the reserve ratio to 1.01% according to government estimates. This shortfall could trigger an increase in insurance premiums as early as September at the boards next premium setting meeting. Analysts predict that premiums could rise to 10 to 15 cents per $100 of domestic deposits from the current 5 to 7 basis points premium for most institutions, which is still well below the 23bp in the wake of the S&L crisis.

Despite the introduction of risk-based premiums in 2007, recent FDIC research suggests that the insolvency risk to the bank insurance fund has increased significantly due to industry consolidation, and in particular due to the concentration of deposits in the ten largest U.S. banking companies....

It is a subscription service, but the previews were too intriguing...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:33 AM
Response to Reply #1
11.  Investors question financial sector rebound
Edited on Wed Jul-23-08 05:37 AM by ozymandius
CHARLOTTE, N.C. - Surprisingly large second-quarter losses at Wachovia Corp. and Washington Mutual Inc. have quickly revived concerns that the financial sector still has a long way to go before it recovers from the year-old credit crisis.

Investors who were growing optimistic after a string of upbeat bank results in recent days were jolted Tuesday when Wachovia, the nation's fourth-largest bank, racked up an $8.86 billion loss because of charges and reserves for bad mortgage loans. The Charlotte-based bank also cut its dividend for the second time this year and eliminated 10,750 positions.

.....

Wachovia's results, coming before trading began on Wall Street, initially sent financial and other stocks falling. The stock market revived as the price of oil skidded again, and so Wachovia's stock rose 27 percent but with WaMu's results released after the close underscoring the problems in the financial sector, selling could resume when the market opens on Wednesday.

.....

Global banks and brokerages already have written down some $300 billion of mortgage-backed securities and other risky investments since the crisis began last year and there are fears that more write-downs are ahead as more mortgages fail. Questions remain about which companies will have to raise additional capital going forward, and just how much will be needed.

http://news.yahoo.com/s/ap/20080722/ap_on_bi_ge/earns_b...




Two things:

(1) If I held a stock that was in any way exposed to Wachovia and Washington Mutual - that stock would be liquidated after yesterday's sucker rally. The more distance I can put between myself and crazy, the better.

(2) Look at these numbers. $309 million in mortgage losses for Regions Financial! More losses related to mortgages are springing up like mushrooms. How much of this is underwritten at Fannie and Freddie? It leads me to conclude that $25 billion requested by Paulson is a boondoggle. That $25 billion request represents a lie of omission.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:11 AM
Response to Reply #11
17. $25 billion is probably the minimum


These bailouts will probably cost us taxpayers everything. Why should we have to pay for their fraud and corruption?


:mad:

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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:56 AM
Response to Reply #11
28. And Poulson is going to get his $25 bln, and a lot more.
They'll give him everything he asks for.

Mission accomplished. No money for health care, veterans benefits, education, infrastructure,Social Security. The goddamned economy will be to goddamned broke to pay anything but interest on the national debt.

I'll stop there, before I get charged with sedition.
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 07:10 AM
Response to Reply #28
32. First thing done, when I am the Commissar, is to gut the Pentagon.
Make it a monument to our hubris and excess. If they can misplace $2 trillion then they no longer can justify their existence as a line item recipient of taxpayer funds.

Need some new rifles or boots? Hold a bake sale.
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Wednesdays Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 07:47 AM
Response to Reply #32
38. When things hit rock bottom, we won't need a military anyway
No country in its right mind would want to invade and take over the U.S. by that time.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:13 PM
Response to Reply #32
85. Two Words: Asset Stripping
All the Bushbots will have to go to jail, go directly to jail, do not pass Go, do not collect $2 million, and turn over all property and cash to the Federal Treasury to pay off the deficit...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:59 AM
Response to Reply #1
29. CBO Comes Close to Saying It Made Up That $25 Billion Freddie, Fannie Rescue Cost Estimate
Readers may have seen that we cast aspersions on the CBO's estimate that the Fannie and Freddie rescue program would "probably" cost taxpayers $25 billion. We had noted that the estimate was only through 2009 because that's how far the authorization extends, but there is no way that Fannie and Freddie will ever be cut loose. Thus an estimate the looked at the liability that was really being taken on, which is open-ended, would come up with considerably higher numbers. A couple of readers stressed that that is how the game is played and the CBO can only opine on bills as written. Hence, legislation is drafted with sunset provisions that everyone knows are a fiction.

Nevertheless. our original view, that the CBO lacks the expertise and resources to estimate what the downside for Fannie and Freddie might be was confirmed by the New York Times:

The proposed government rescue of the nations two mortgage finance giants should appear on the federal budget as a $25 billion expense, the independent Congressional Budget Office said on Tuesday, but officials conceded that there was no way to really know what, if anything, a bailout might cost taxpayers.

The budget office said the chances were better than even that a rescue would not be needed before the end of 2009 and would not cost any money. But the office also said there was a 5 percent chance that the mortgage giants, Fannie Mae and Freddie Mac, could lose $100 billion...

The budget office, while acknowledging that the $25 billion was, at best, a rough estimate, did not explain fully how it came up with the figure. The office said it analyzed the companies financial statements and consulted with regulators, analysts, market participants and the companies themselves to estimate possible future losses and the amount of any cash injection that might be needed from the Treasury....

Senator Jim DeMint, Republican of South Carolina, said lawmakers were generally supportive of the overall rescue plan, but he added that he had doubts about the $25 billion estimate. Everyone knows its just a wild guess, Mr. DeMint said. We are either going to spend zero or were going to spend a whole lot more than they are talking about.


http://www.nakedcapitalism.com/2008/07/omb-comes-close-...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 04:59 AM
Response to Original message
2. Today's Reports
10:35 Crude Inventories 07/19
Briefing.com NA
Consensus NA
Prior 2952K

14:00 Fed's Beige Book

http://www.briefing.com/Investor/Public/Calendars/Econo...
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:13 AM
Response to Reply #2
55. DOE: U.S. crude inventories down 1.6 mln brls latest week
07. U.S. gasoline supply up 2.9 mln brls last week: Energy Dept.
10:36 AM ET, Jul 23, 2008

08. U.S. distillate stocks up 2.4 mln brls last week
10:36 AM ET, Jul 23, 2008

09. U.S. crude inventories down 1.6 mln brls latest week
10:35 AM ET, Jul 23, 2008
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 03:18 PM
Response to Reply #2
77. Fed's Beige Book
09. Loan demand down, standards up, Beige Book finds
1:53 PM ET, Jul 23, 2008

10. Housing markets weak or declining, Beige Book says
1:53 PM ET, Jul 23, 2008

16. Auto sales weak except small and foreign cars, Fed says
1:53 PM ET, Jul 23, 2008

17. Electronics sector benefitting from tax rebate, Fed says
1:53 PM ET, Jul 23, 2008

18. Consumer spending not great despite tax rebate, Fed report
1:53 PM ET, Jul 23, 2008

19. U.S. economy has slowed since June, Beige Book says
1:53 PM ET, Jul 23, 2008

20. Fed Beige Book finds rising price pressures in all regions
1:53 PM ET, Jul 23, 2008
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:03 AM
Response to Original message
3.  Oil prices extend decline, drops below $127
SINGAPORE - Oil prices slipped further Wednesday after tumbling more than $3 a barrel in the previous session as a hurricane looked likely to spare key oil installations in the U.S. Gulf of Mexico.

Traders in Asia awaited the release of U.S. oil supply data later in the day that was expected to show a rise in gasoline stocks amid weakening demand in the world's largest energy consumer.

Light, sweet crude for September delivery fell $1.57 to $126.85 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract fell $3.40 to settle at $128.42 in the previous session.

The August contract fell $3.09 to settle at $127.95 a barrel as it expired at the end of floor trade.

.....

The drop offered further evidence that investors are now quickly pulling money out of the market, after driving prices to a record above $147 only a week and a half ago. It was also a reminder that, with traders for the moment turning bearish, the absence of major news can push the market down just as incremental supply concerns previously drove prices sharply higher.

.....

Crude oil inventories were expected to drop by 1.9 million barrels in the U.S. Energy Information Administration's weekly petroleum supply report, according to the average of analysts' estimates in a survey by energy research firm Platts.

http://news.yahoo.com/s/ap/oil_prices
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Roland99 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:06 AM
Response to Reply #3
4. $125.78 at the moment. And check this thread on Louisville gas prices
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:15 AM
Response to Reply #4
6. Good morning Roland
:donut: :donut: :donut:

Good to see you so early. I just responded to your post. So there's the question: will they be called to account for price gouging?
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Roland99 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:23 AM
Response to Reply #6
8. I think I have a better chance of inventing cold fusion!
Edited on Wed Jul-23-08 05:25 AM by Roland99
Well, better get ready for woik!

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:31 AM
Response to Reply #4
10. Ann Arbor Had $3.89 at BP Yesterday
So, they had to flinch first...
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:30 AM
Response to Reply #10
22. SW Ohio $3.69

and with my Kroger card, I filled up for only $3.59 gallon. Quite shocking, last week it was hovering around $3.96. I've never seen gas prices drop so quickly. Strange times.
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Changenow Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:40 AM
Response to Reply #10
40. People will feel like they're getting a bargain
That's the point, I suppose.
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Tandalayo_Scheisskopf Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 07:20 AM
Response to Reply #3
36. I have a feeling that...
Edited on Wed Jul-23-08 07:21 AM by Tandalayo_Scheisskop
More than the storm, this is a result of the senate bill that is moving right now, the one that will address the speculation. Get out while the getting is good and all that.

Oil is presently at 126.33
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:57 AM
Response to Reply #36
44. I agree, Also, I sure hope we're seeing an end to the price ratcheting which has...
been taking place over the last several years.

Up a bunch... Down a little... Back up higher... Down a little (but, not as low as before)... Back up...
Down a little...

Looks to me like someone was trying to cook a frog with that strategy. Y'know, warm 'em up real slow like. Don't
shock 'em or they'll jump. But, then everyone was in the game and they got greedy 'cuz they heard from the Elevator Operator there were HUGH RETURNS!!1! in Oil Speculation.

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Tandalayo_Scheisskopf Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:27 AM
Response to Reply #44
62. Yup.
Which, in other times and other markets, would set off market manipulation alarms. But not under this ferschluggenah administration. After all, theirs is sitting in an account somewhere, making money off of the manipulation and waiting for them when they are out.
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 04:22 PM
Response to Reply #62
80. Prag....
I think you and the others are spot on. The fun part of this is once the light is turned on, where are these roaches going to run next. I think it will be commodities and my guess is that gold will be a resting point. Also food commodities. I can't give a reason, just a thought.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:11 PM
Response to Reply #80
84. I'm Hoping Khazakstan
The Cossacks will know how to deal with them....
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:07 AM
Response to Original message
5.  Washington Mutual posts 2Q loss of $3.3 billion
NEW YORK - Washington Mutual, the Seattle-based bank known for its buoyant advertising slogan, "Whoo hoo!," had little to cheer about as it reported a staggering $3 billion loss the biggest quarterly loss in its history.

.....

For the April to June period, WaMu reported a loss of $3.33 billion, or $6.58 per share, compared with a profit of $830 million, or 92 cents per share, in the year-ago period.

.....

WaMu's total loan-loss reserves increased by $3.74 billion to $8.46 billion, as it set aside a total of $5.91 billion during the quarter to cover bad loans. The increase in loan-loss provision reflects falling home prices, increased delinquencies, reduced availability of credit and the weakening economy, the bank said.

Total net charge-offs, or loans written off as unpaid, increased to $2.17 billion, while nonperforming assets grew to 3.62 percent of total assets as of June 30, from 2.87 percent at the end of the first quarter.

.....

WaMu said the fastest rising delinquencies were among its "option" adjustable rate mortgage loans. The bank stopped originating the negative amortizing loans, also called option ARM loans, in June. Option ARM loans offer very low introductory payments and let borrowers defer some interest payments until later years.

http://news.yahoo.com/s/ap/20080723/ap_on_bi_ge/earns_w...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:20 AM
Response to Reply #5
7. Oh dear. More trouble for WaMu.
It's going to be harder for them to raise capital to cover losses.




WaMu has $3.33 bln loss, may be cut to "junk"

NEW YORK (Reuters) - Washington Mutual Inc, the largest U.S. savings and loan, posted a $3.33 billion second-quarter loss on Tuesday as souring mortgages forced it to set aside more money for loan losses.

The thrift's deteriorating health prompted Moody's Investors Service to say it may downgrade Washington Mutual to "junk" status. Shares of Washington Mutual fell in after-hours electronic trading.

.....

"We are planning for continued softness in housing for the next several quarters," Chief Executive Kerry Killinger said in an interview. "The capital that we have in place is sufficient to manage through this period. We have no plans at this point to raise additional capital."

Washington Mutual said it expects residential mortgage loan losses through 2011 to be "toward the upper end" of the $12 billion to $19 billion range it had forecast in April. Some analysts had predicted the losses might end up higher.

....

Moody's said the falling stock price and declines in some deposit categories have resulted in "reduced financial flexibility," making it tougher to raise additional equity.

http://news.yahoo.com/s/nm/20080722/bs_nm/washingtonmut...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:41 AM
Response to Original message
12. HOW TO MAKE YOUR NET WORTH SOAR IN THE MIDST OF A HISTORIC FINANCIAL COLLAPSE
http://www.dailyreckoning.com/Issues/2008/DR072208.html

...Whether we like to admit it or not, the entire market for housing in the United States has been corrupted by government involvement. By subsidizing the availability of credit and by granting huge tax incentives to home speculators, the government helped finance the biggest bubble of all the biggest bubble in history. It wont be unwound without serious disruptions to our economy and, unfortunately, a tremendous amount of pain.

I was listening carefully to the July 10 congressional testimony of Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson. Both insisted Fannie and Freddie have enough capital to continue their operations. Paulson sounded just like a Latin American finance minister on the eve of devaluation.

Incredibly, they both insisted all that was needed was more regulation! I felt like I was watching a kind of financial Nuremberg trial, where the main perpetrators of the crime were utterly oblivious to the evil theyd created. I was aghast.

Consider: Only 20 years ago, the U.S.s total outstanding mortgage debt made up roughly 30% of our GDP. Homeowners held large stakes in their houses close to 70% of the equity on average. Today, mortgage debt equals nearly 80% of GDP. The average homeowner owns less than half the equity in his home. This seismic change in the nature of home ownership and debt financing occurred nearly overnight in less than one generation.

Fannie Mae and Freddie Mac made it all possible. Released from capital-ratio requirements and backed with a line of credit at the Treasury, they were able to buy a nearly unlimited amount of mortgages. Today, Freddie or Fannie finance more than 80% of all new mortgages in the United States. Over the last several decades, their presence in the market greatly lowered interest rates, created an endless supply of credit, and pushed housing prices higher. Meanwhile, the cost of the government guarantee, which lay behind Fannie and Freddies power, was invisible.

Now what?

The size of the bailout of Fannie Mae and Freddie Mac could easily surpass $1 trillion. But Congress has no understanding, at all, of whats about to happen.

Take the mortgage bailout Congress has been working on. The chairman of the Senate Banking Committee, Chris Dodd, is truly one of the stupidest people in all of public life.

And by the way, I dont mean that rhetorically. I mean literally. This guy was the son of a senator. He went to the most elite private prep schools in the United States. And yet he went to college at Providence College and, after a stint in the Peace Corps, to the University of Louisville law school. He couldnt get into the kind of schools youd expect a senators son to attend because hes dumb as a box of nails. If Congress had a short bus, hed be sitting in the back.

In 2003, he refinanced his home mortgages with Countrywide Financial, receiving a below-market interest rate that allegedly saved him $75,000 a year. He never disclosed the benefit to the Senate and claimed he was in Countrywides VIP program because he was a good customer of Countrywides which is as bald-faced a lie as has ever been told in Washington, D.C.

In any case, the bill Dodd is getting through Congress (which was written by Bank of America, by the way) will create a new tax on Freddie and Fannie 4.2 basis points on all mortgages they buy. That would generate about $600 million annually.

And the money wont go into the general fund. Most of the money (65%) will go directly to the secretary of Housing and Urban Development, who will pass out the loot in the form of block grants to states. The Treasury secretary will get the rest of the money. Hes allowed to give it to any nonprofit entity he chooses. That means, whoever wins the presidency will get another $600 million (or more) each year to kick back to political backers. All for affordable housing, of course...

If Congress had any idea how serious the problems with Freddie and Fannie were going to become, they wouldnt mess around with a new tax or allowing a rival to Fannie and Freddie (Bank of America) to draft the bailout. Clearly, Congress has no idea how much trouble Fannie and Freddie face. Heres my estimate:

Freddie and Fannie own or guarantee $5 trillion (yes, trillion) in U.S. residential mortgages. Im convinced mortgage losses after recoveries will exceed 10% of the total outstanding and could exceed 20%. Thus, over the next 12 to 24 months, Fannie and Freddie will likely face losses of between $500 billion and $1 trillion. Thats a huge amount of money, even for Congress.

Theres simply no doubt Fannie Maes and Freddie Macs shareholders will be wiped out. Last month, I wrote the market value of the mortgages on their balance sheets has fallen by at least 5%, wiping out all of their equity. And when you factor in the off-balance-sheet guarantees these firms have sold, it was impossible to imagine they remained economically viable...

Im embarrassed to admit my estimate of Fannie and Freddies viability was hugely optimistic. Both firms seem unlikely to last through the end of July. Readers who followed my advice in June are up over 70% on their short positions in Fannie and Freddie.

Im certain the government will do whatever it takes to ensure Fannie and Freddie continue to operate but that doesnt mean bailing out the shareholders. All the government will do is guarantee Fannie and Freddies debts. That means a huge amount of taxpayer money is about to go into troubled mortgages. A huge amount of money the government doesnt have and wont be able to increase taxes enough to afford. And that means inflation is going to get a lot worse. The government is going to pay for guns, butter, and housing. Look out.

The value of the dollar is going to go down, and the price of everything else is going to go up. I think this sets the stage for a true inflationary crisis as the economy cant adjust to soaring commodity prices. I also find it hard to believe our foreign creditors will continue to hold U.S. Treasury bonds if the U.S. Treasury takes on all of the mortgage losses of Fannie Mae and Freddie Mac. I think theyll dump our bonds and that will literally be the end. No more world reserve currency. No more pegs to the dollar around the world. Well be on our way to banana republic status, in terms of credit quality.

Whats the best way to protect yourself and to make money on this looming crisis?

You must buy gold and silver as a hedge against a further collapse in the value of the U.S. dollar.

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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 07:10 AM
Response to Reply #12
31. I've got to agree with that assessment . Dodd is fucking stupid.
I had the misfortune of spending about an hour with him, talking one-on-one, last year. He didn't have a clue. About anything. And, we were discussing HAVA mainly. By the time Joe Biden came along, I wanted to grab him by the arm and drag him up to the bar.
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:42 AM
Response to Original message
13. GLOBAL MARKETS-Oil falls, supporting Asia stocks; dlr firm
HONG KONG, July 23 (Reuters) - Oil prices on Wednesday slid $20 below an all-time high hit two weeks ago, helping to lift Asian stocks and weigh on government bonds as investors cautiously reached for higher returns as well as more risk.

The dollar held gains made the previous session after top U.S. officials, including Treasury Secretary Henry Paulson, gave it a verbal lift.

...

On the earnings front, with the results from some Wall Street banks not as dire as analysts had predicted, investors broadened their focus to other sectors, with announcements on Friday expected from Samsung Electronics Co Ltd (005930.KS: Quote, Profile, Research, Stock Buzz) and Honda Motor Co (7267.T: Quote, Profile, Research, Stock Buzz).

"We're just seeing a temporary bright patch," said Yoku Ihara, manager of the investment information department at Retela Crea Securities in Japan. "It's still far too early to let down our guard."

Japan's Nikkei share average .N225 rose 1.5 percent to the highest in two weeks. If the index keeps its gains on the day, it will be the first time since April that the Nikkei has had back-to-back gains of at least 1 percent.

Outside of Japan, shares in the Asia-Pacific region .MIAPJ0000PUS climbed 2.3 percent to the highest in three weeks, according to an MSCI index.

Hong Kong's Hang Seng .HSI rose 2.2 percent to a one-month high.

Despite investors' increasing willingness to buy riskier assets lately, high inflation continues to stalk Asian markets.

...

JPMorgan slashed its 2008 targets for Asia-Pacific stock markets across the board on Wednesday by an average of 13.5 percent, though still was looking for double-digit 12-month returns from every country in the region, excluding Japan.

Cheap valuations will likely support equity prices over the next year, with top three most inexpensive markets tracked by JPMorgan's valuation model -- Taiwan, Phillipines, Australia -- located in Asia.

"The consensus return-on-equity forecasts for the next three years are much higher than the historic average for each market," said Adrian Mowat, JPMorgan's chief equity strategist for emerging markets and Asia Pacific. "While this indicates a high degree of optimism it can also be argued that this suggests that the risks to valuations are on the upside," he said in a note.

Yields on safe-haven government bond yields, which move inversely to prices, edged higher as the MSCI all-country world equities index .MIWD00000PUS appeared poised for a sixth straight day of gains, the longest string since May.

/... http://www.reuters.com/article/marketsNews/idINSP327945...
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:45 AM
Response to Reply #13
14. Europe shares up 2 pct as banks gain, oil retreats
LONDON, July 23 (Reuters) - European stocks joined a global rally early on Wednesday, rising 2 percent as banks surged and sliding oil prices soothed investors seeking relief from inflationary pressures and global growth concerns.

Banks were the top gainers, with HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) up 3.2 percent, Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) jumping 7.9 percent and BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz) putting on 4.4 percent.

HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) soared 11 percent on market talk of bid interest from Spanish rival BBVA (BBVA.MC: Quote, Profile, Research, Stock Buzz), traders said. Neither HBOS or BBVA was available for comment.

Crude oil fell to $126 a barrel. Energy shares staged a mixed performance, with BP (BP.L: Quote, Profile, Research, Stock Buzz) and Total (TOTF.PA: Quote, Profile, Research, Stock Buzz) down 0.2-0.4 percent, while Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) added 0.4 percent.

"We can start to think about inflation pressure easing," Philip Isherwood, a strategist at Dresdner Kleinwort, said referring to the decline in oil prices.

"It starts to take some of the pressure off central banks and (let) them think more about economic weakness than about inflation expectations."

At 0902 GMT, the pan-European FTSEurofirst 300 index was up 2 percent at 1,187.91. Major Wall Street stock indexes rose more than 1 percent on Tuesday and Japan's Nikkei .N225 added 1 percent on Wednesday.

/... http://www.reuters.com/article/marketsNews/idCAL2387288...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:57 AM
Response to Original message
15.  Wall St. futures rise; eyes on earnings, Beige Book
(Reuters) Both Dow Jones futures and S&P 500 futures were up 0.55 percent at 0945 GMT (5:45 a.m. EDT), while Nasdaq futures were 71 percent higher.

Earnings were due from more than 40 S&P 500 (.SPX) companies, including Anheuser-Busch (BUD.L), AT&T (T.N), Boeing (BA.N). ConocoPhillips (COP.N), Pepsico (PEP.N), Pfizer (PFE.N), Qualcomm (QCOM.O), Whirlpool (WHR.N) and Wyeth (WYE.N).

http://news.yahoo.com/s/nm/20080723/bs_nm/markets_stock...




For more freakin' insanity, look at what stock is on the move (up): Washington Mutual (WM.N), up more than 8 percent
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:10 AM
Response to Reply #15
16. It's a Faith-Based Economy
Clap louder so Tinkerbell can hear you!
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radfringe Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 07:16 AM
Response to Reply #16
34. yeah it's called PRAY-GO
PRAY you don't GO bankrupt
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:37 AM
Response to Reply #15
24. Somebody is propping up the market, Why?

Whose stock needs to be pushed upwards before the next big financial institution fails? Something weird is going on, how can banks lose billions, and yet their stock is rising! This is crazy

:crazy:
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:44 AM
Response to Reply #24
26. Free money from the Fed?
Free money = stock buybacks? Therefore boosting prices?

Pumping has worked this way before during times of extremely arrogant activity.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 07:04 AM
Response to Reply #26
30. United States Unfolding Financial and Economic Nightmare
Edited on Wed Jul-23-08 07:06 AM by DemReadingDU
7/22/08 United States Unfolding Financial and Economic Nightmare By: Money_and_Markets

Edit to add the discussion is between Larry Edelson and Martin Weiss


Larry: The big question is: How much worse could it get?

Martin: I've been talking to some folks in Washington and on Wall Street. In private, they're telling a very different story from what you hear them saying in public. They're saying one reason bank stocks have gotten clobbered so badly is because the pros now see another meltdown on the horizon, beyond Fannie Mae and Freddie Mac. But next time, because of inflation fears, they're worried the Fed will not come to the rescue in the same way as it has done so far. And it could be ugly.

Larry: I disagree. I think the Fed will do whatever it takes. And that translates into even more money pumping and even more inflation.

Martin: Either way, the unspoken concern on Wall Street is that the next shoe to fall could be a Wall Street firm that's far larger. Perhaps a Merrill Lynch or a Citigroup or a Washington Mutual. If that's the case, you'd have a company that's too big to fail ... but that's also too big to save. So the Fed's response is bound to be more complex than what you've seen so far.

Larry: I don't think there's anything complex about it. The bigger the failure, the more money the Fed's going to pour in. It's hard for me to believe it's going to let a Citibank or a Bank of America or a GM fail. I guess anything's possible. But I think the Fed will do everything in its power to keep the system afloat, no matter how much money is required, no matter how much inflation it generates, no matter how low the dollar goes.

Martin: Larry, it's a moot point. Because in either scenario, the U.S. dollar suffers. It suffers when U.S. banks and lenders fail. And it suffers when the Fed pumps in hundreds of billions in unbacked dollars to rescue those banks and lenders.

Ultimately, the dollar reflects everything we've been talking about today. The dollar falls when the U.S. stock and bond markets fall. The dollar falls when the U.S. sinks into a recession. The dollar is slammed by inflation, which obviously erodes its purchasing power.

Plus, today, we've talked about still another danger for the dollar: What happens when international investors suddenly discover that our inflation, our unemployment our entire economy are far worse than the U.S. government has been letting on. They're likely to dump the U.S. dollar in a panic.

more...
http://www.marketoracle.co.uk/Article5562.html

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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 07:19 AM
Response to Reply #15
35. I was just about to ask, what kind of insanity are we in for today?
Now I know.

Maybe I'll buy some Enron or LTV shares this morning. It makes about as much sense as anything else happening right now.
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:06 AM
Response to Reply #35
47. Now, there's a strategy!
:crazy: :thumbsup:




Me? I'm going long on Countrywide and Bear Stearns! Hoping for a little of that "Afternoon Delight" action this afternoon.
Long means I'll try to hold the stock maybe all week. Certainly wouldn't want to hold it over the weekend. ;)
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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:13 AM
Response to Reply #47
48. If that works out, I'm gonna invest in bridge futures!
There's a lot of money to be made, if you buy the right bridges.

:think:

Oh, wait. Aren't they already doing that with highways?
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:43 AM
Response to Reply #48
52. That's what the cab driver said...
the elevator operator said they heard second hand in the subway someone was saying on some teevee show!

HUGH RETURNS!!1!!


(Actually, Tom Hartman points out the bridge/highway sell-off almost every day. Along with the fact only select bridge/highways will be privatized leaving the bulk of the most expensive ones to rot from neglect.)
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 04:41 PM
Response to Reply #52
81. I really am concerned about this latest 'Rally'.....
I am not only a small investor but am a member of large institutional investment group (Texas Teacher's Retirement System). I invest for real growth. All the market is showing me now is a sham shell game. It really is a time to sit on the sidelines.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:12 AM
Response to Original message
18. Cross Post for Tansy Gold: The Corporate Freedom Amendment
Edited on Wed Jul-23-08 06:14 AM by Demeter
http://www.democraticunderground.com/discuss/duboard.ph...


We, the people of the United States, do hereby declare that corporations, partnerships, sole proprietorships, and all other legal frameworks for business organization (hereinafter referred to as Business or Businesses) are not to be treated for legal purposes as persons. By way of example, people have a right to freedom of speech, Businesses do not. It is further the intent of this amendment to establish a minimum set of standards by which Businesses may operate. Those standards include:


see more at link
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 11:13 AM
Response to Reply #18
67. Ooooh, thanks!
Don't have much time this morning, but I will check it out later when I have more time, though my first reaction is that "sole proprietorships" are generally pretty much the same as the person who owns them. All depends on how it's structured -- "it" being both the business and the CFA.

:hi:


Off to the paying gig (which is structured so it only takes me away from home for about an hour yay!)


Tansy Gold



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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:26 AM
Response to Original message
19.  Whirlpool reports 27 percent dip in 2Q profit (another success-with-less upbeat loss)
GRAND RAPIDS, Mich. - Household appliance maker Whirlpool Corp. said Wednesday its profit fell 27 percent in the second quarter because of higher material and oil-related costs, and lower U.S. demand.

Whirlpool reported its profit for the three-month period ended June 30 was $117 million, or $1.53 per share, compared with $161 million, or $2 per share, during the same period last year.

Revenue of $5.1 billion for the quarter was up 5 percent from the $4.9 billion reported by the Benton Harbor, Mich.-based company in the second quarter of 2007.

http://news.yahoo.com/s/ap/20080723/ap_on_bi_ge/earns_w...

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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:28 AM
Response to Original message
20.  Costco sees 4Q, full-year profit below estimates
ISSAQUAH, Wash. - Costco Wholesale Corp. said Wednesday fiscal fourth-quarter and full-year profit will miss Wall Street expectations, as the warehouse club operator expects higher energy costs to crimp its bottom line.

The company also said it would expand its stock repurchase plan by $1 billion.

For the fourth quarter, analysts polled by Thomson Financial expect $1 per share in profit, and Costco said it expects earnings "well below" this estimate. Analysts expect full-year earnings of $2.99 per share, according to Thomson.

http://news.yahoo.com/s/ap/20080723/ap_on_bi_ge/costco_...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:30 AM
Response to Original message
21.  Wellpoint 2Q profit drops, but beats forecast (more success-with-less)
INDIANAPOLIS - Blue Cross and Blue Shield health plan operator WellPoint has reported a 10 percent drop in second-quarter profit on higher medical costs, and has narrowed its outlook for the full year.

For the three months ended June 30, the Indianapolis-based health insurer says earnings totaled $750.5 million, or $1.44 per share, including investment losses of 3 cents per share.

....

The results beat estimates of analysts surveyed by Thomson Financial, who expected profit of $1.36 per share on revenue of $15.61 billion.

http://news.yahoo.com/s/ap/20080723/ap_on_bi_ge/earns_w...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:32 AM
Response to Original message
23.  PepsiCo 2Q profit rises 9 percent
NEW YORK - Snacks and drinks company PepsiCo says its profit rose 9 percent in the second quarter on strong international growth.

PepsiCo Inc. says its profit for the three-month period ending June 14 was $1.7 billion, or $1.05 a share, compared with $1.56 billion, or 94 cents a share, during the same period last year.

...

Excluding one-time items, the company earned $1.03 per share. Thomson Financial says analysts expected earnings of $1.02 per share on revenue of $10.55 billion.

http://news.yahoo.com/s/ap/20080723/ap_on_bi_ge/earns_p...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:40 AM
Response to Original message
25. Paulson & Co. Plans Fund to Provide Capital to Financial Firms
July 23 (Bloomberg) -- John Paulson, the money manager whose wagers against the U.S. housing market helped him earn an estimated $3.7 billion last year, is starting a hedge fund to provide capital to financial firms hurt by mortgage writedowns.

Paulson aims to open the fund by December, according to two people with knowledge of the matter. His New York-based Paulson & Co. hasn't set a fund-raising target, said the people, who declined to be identified because the plans aren't complete.

Losses caused by the credit crisis may reach $1.3 trillion, Paulson, 52, said at a conference in Monaco on June 18. The world's biggest banks and securities firms raised $345 billion of capital in the past year following $467 billion of writedowns and credit-market losses, data compiled by Bloomberg show.

http://www.bloomberg.com/apps/news?pid=20601103&sid=a4C...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:54 AM
Response to Original message
27. Ford Foiled by $4 Gasoline After First-Quarter Profit `Mirage'
July 23 (Bloomberg) -- Ford Motor Co.'s turnaround plan has been derailed by $4-a-gallon gasoline, dashing investor hopes raised after Chief Executive Officer Alan Mulally produced a surprise first-quarter profit.

Tomorrow he's expected to report a second-quarter loss of 25 cents a share, the average of 12 analyst estimates compiled by Bloomberg, on plunging sales of pickup trucks and sport- utility vehicles. The forecasts exclude what the world's third- biggest automaker calls one-time costs. A year earlier, Ford had a profit on that basis of $258 million, or 13 cents.

``Confidence in our plan is really increasing,'' Mulally said in an interview on April 24, after Ford reported first- quarter earnings of $100 million, or 5 cents a share. A month later, as record fuel prices hurt sales and an 82 percent increase in steel costs drove up expenses, he backed off his goal of returning to an annual profit next year.

.....

A loss would be the sixth in eight quarters since Dearborn, Michigan-based Ford recruited Mulally, 62, from Boeing Co. in September 2006. The automaker has lost $15.3 billion in the past two years and hasn't posted an annual profit since 2005.

.....

The cost to protect Ford debt from default rose to 1,462 basis points on July 22 from 1,214 on April 1, according to CMA Datavision in New York. An increase in the price indicates a decline in the perception of a company's credit quality.

http://www.bloomberg.com/apps/news?pid=20601103&sid=a60...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 07:16 AM
Response to Original message
33. Here's hoping your day is enjoyable.
I'm due at work. Back after the close.

Ozy :hi:
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:54 AM
Response to Reply #33
43. have a great day, Ozy
my phone lines were down yesterday and this morning - hoping all is fixed when I get back home tonight.

:hi:
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 07:33 AM
Response to Original message
37. Daily Show Video: Confessions of a Subprime Lender


Jon Stewart interviews Richard Bitner:

http://calculatedrisk.blogspot.com/2008/07/daily-show-v...


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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:36 AM
Response to Original message
39. GMAC Says Marano to Replace Jones as CEO of ResCap
GMAC Says Marano to Replace Jones as CEO of ResCap (Update2)

By Ari Levy

July 22 (Bloomberg) -- GMAC LLC, the auto and mortgage finance company, named Thomas Marano chairman and chief executive officer of its Residential Capital LLC unit, succeeding Jim Jones.

Marano, 46, will remain an employee of Cerberus Capital Management LP, majority owner of GMAC, and report to GMAC's CEO Alvaro de Molina, the New York-based company said in a statement. Jones elected to leave, the company said.

Last month, GMAC arranged more than $60 billion of new and refinanced credit after rising foreclosures left ResCap on the brink of bankruptcy. The package gave ResCap a one-year extension on $11.6 billion of bank facilities and $2.5 billion of new credit to finance home lending. General Motors Corp. sold 51 percent of GMAC to New York-based Cerberus in 2006.

``These management moves will further bolster the leadership team at ResCap and provide a diverse set of talents and skill sets as we work to stabilize the company and weather the near- term market challenges,'' de Molina said in the statement.

Tony Renzi, chief operating officer of ResCap's U.S. residential funding group, was appointed to the newly created position of ResCap COO. Jerry Lombardo, a Cerberus employee, will join Minneapolis-based ResCap as treasury executive, the statement said.

Marano was appointed non-executive chairman of ResCap's board in April, when he also joined Cerberus as a managing director. De Molina was named CEO of GMAC in March, four months after Sam Ramsey became chief risk officer.

Prior to arriving at Cerberus and ResCap, Marano spent more than 25 years at Bear Stearns Cos., the New York-based securities firm that was bought by JPMorgan Chase & Co. There he was head of mortgage and asset-backed securities and last year was assigned to help unwind two hedge funds that collapsed because of losses on bonds linked to subprime home loans.

As head of ResCap, he'll work to turn around a mortgage company that's recorded $5.3 billion of losses in the past six quarters amid the worst housing crisis since the Great Depression.

In 2006, ResCap was the 12th biggest U.S. subprime lender with more than $21 billion of mortgages, according to trade publication Inside Mortgage Finance.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a4f...


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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 11:20 AM
Response to Reply #39
69. And still GM blames their bleak times on not selling enough cars...
Oh, and Labor! Don't forget Labor! :eyes:
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radfringe Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:40 AM
Response to Original message
41. White House drops opposition to housing bill
White House drops opposition to housing bill
House expected to vote on the bill today; could become law this week
MSNBC BREAKING NEWS
updated 5 minutes ago


WASHINGTON - President Bush dropped his opposition Wednesday to legislation aiming to calm the chaotic housing market despite his objections to a $3.9 billion provision. The House was expected to vote on the bill Wednesday, and it could become law as early as this week.

Under the bill, the government would help struggling homeowners get new, cheaper loans and would be allowed to offer troubled mortgage giants Fannie Mae and Freddie Mac a cash infusion.

The Bush administration and lawmakers in both parties teamed to negotiate the measure, which pairs Democrats top priorities federal help for homeowners facing foreclosure and $3.9 billion for neighborhoods hit hardest by the housing crisis with Republicans goal of reining in mortgage giants Fannie Mae and Freddie Mac while reassuring financial markets of their stability.

-------snip-------------

White House press secretary Dana Perino announced Bushs switch in a telephone conference call with reporters. We believe this is not the time for a prolonged veto fight but we are confident the president would prevail in one, she said. :wtf:
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:52 AM
Response to Original message
42. dollar watch


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

Last trade 72.564 Change +0.111 (+0.15%)

Speculation Of A Fed Hike Creeps Back

http://www.dailyfx.com/story/topheadline/Speculation_Of...

CREDIT MARKET: HOW IS IT DOING?
Investors were remarkably bearish on the US economy and all its assets last week as fears surrounding second quarter earnings and a potential Freddie Mac/Fannie Mae collapse peaked. However, this worst case scenario would ultimately prove overly pessimistic as the bearish momentum behind the GSEs faltered and banks’ accounting figures ended up on the positive side of depressed forecasts. Subsequently, as the outlook for the markets brightened, so did forecasts for the eventual turn to rate hikes from the Fed. Interest rate futures are still reflecting a 93 percent probability that the policy group will hold rates on August 5th; but the chances for at least a 25bp hike by the end of the year (December 16th) has actually jumped from 50 percent last week to 81 percent today. If write-downs continue to come in under the high water mark, the probabilities will continue to improve for rate hawks.



<snip>

FINANCIAL MARKETS: HOW ARE THEY DOING?
The capital markets have enjoyed a sharp reversal in favor of long-term bulls. Since hitting a two-year low just a week ago, the benchmark Dow Jones Industrial Average has rallied over 7 percent on a combination of better-than-expected earnings figures, optimism from policy makers and a massive pull back in raw material prices. In the same period, crude prices have collapsed over 14 percent to close below $130 per barrel. Far more important though was Fed Chairman Ben Bernanke’s outlook for growth in 2008, which was lifted from 0.3-1.2 percent estimated back in April to 1.0-1.6 percent in the Fed’s most recent forecast. Further helping in a big way was the outperforming second quarter accounting figures in some of the equity market’s most volatile market sectors. While it is far too early – and likely incorrect – to assume stocks have found their bottom, this strength certainly curbs potential panic selling.



<snip>

U.S. CONSUMER: HOW ARE THEY DOING?
While the Fed Chairman may see a more optimistic future for the world’s largest economy, American consumers are having a hard time seeing the silver lining. Better-than-expected earnings and a couple of GSEs avoiding bankruptcy are not events that would immediately improve the optimism of a group that is suffering from rising unemployment, stalling wage growth and stubbornly high costs for food, energy and credit. Data released this past week does little to confirm Bernanke’s optimism. The housing recession continues to search for a deeper bottom, the cost of living has risen to new heights, employment trends slipped another notch and other officials are still fearful. In fact a number of Fed board members continually warn that inflation must be subdued if the economy is to be stabilized. What’s more, another report from the bank suggests an ongoing housing decent will eventually change Americans to net savers.



...more...


The 3 Ps Lifting the US Dollar

http://www.dailyfx.com/story/bio1/The_3_Ps_Lifting_the_...

The US dollar has strengthened against all of major currencies thanks to 3 Ps – Paulson, Plosser and the price of oil. US officials were out in force this morning talking up the greenback in hopes of turning it mighty once again. Treasury Secretary Paulson said that “a strong dollar is really very important” while Fed President Plosser called for the Federal Reserve to raise interest rates “sooner rather than later.” Plosser has traditionally been more hawkish than his counterparts, but it was interesting to hear him say that the Fed shouldn’t wait for an economic turnaround to raise interest rates. Although the Fed is still stuck between a rock and a hard place, their predicament is becoming a lot easier as oil prices continued to fall. The greenback gained momentum as oil prices dropped below $126 a barrel intraday. Since last Monday, crude prices have fallen 14 percent to a monthly low. If oil prices reach $100 a barrel, half of the Fed’s problems would be solved; Consumers would become more liberal with their spending while businesses would become more optimistic. For companies like American Express, more liberal consumer spending is exactly what they need. According to last night’s earnings report, the bank’s most affluent cardholders spent less on discretionary purchases in the second quarter. However despite the drivers for today’s dollar rally, there is still cause for concern. Oil at $126 a barrel only provides temporary relief for US consumers, but pending layoffs and credit card delinquencies suggest that consumer spending could still falter. Wachovia and United Airlines have announced combined layoffs of more than 13,000 employees. The greater the number of layoffs, the less willing consumers will be to spend. The rally in the US stock market has been very impressive, particularly in the last half hour of trading. As we have said in Friday’s Daily Fundamentals, it is a new week but the same drivers. Stocks and oil will continue to have a big impact on the price action of the US dollar. However keep on an eye on tomorrow’s Beige Book report, which will shed more light on how the Fed districts are doing.

...more...
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:59 AM
Response to Original message
45. Oil prices, weak dollar caused food price rally: study
http://news.yahoo.com/s/nm/20080723/bs_nm/food_costs_dc

CHICAGO (Reuters) - Rising oil prices and weakness in the dollar have combined to push food prices sharply higher this year, according to a study by agricultural economists released on Wednesday.

"High commodity prices will persist as long as high oil prices remain and as long as the dollar stays weak," said Wally Tyner, one of three Purdue University agricultural economists who wrote the study. "Lower oil and a stronger dollar would bring pressure on commodity prices to fall."

Corn futures peaked at a record $8.26 per bushel in late June, more than double their level in mid-2007. Prices have come down during the past month as favorable growing weather in the U.S. Midwest bolstered expectations for a good crop in the fall.

Soaring oil prices accounted for $3 of the rally in corn prices, according to the study, which was commissioned by the Farm Foundation. Input costs for corn production such as fertilizer, propane and diesel have risen because petroleum is a key component of those products.

An additional $1 of the corn price increase can be attributed to an ethanol subsidy that boosted biofuel production and spurred demand for more corn in the United States, the study said.

...more...
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:02 AM
Response to Original message
46. New York Times 2Q profit drops 82 percent
http://news.yahoo.com/s/ap/20080723/ap_on_bi_ge/earns_n...

NEW YORK - New York Times Co. says its second-quarter earnings fell 82 percent from the year-ago quarter boosted by a one-time gain. Meanwhile, print advertising revenue continued to shrink.

The New York-based newspaper publisher says its quarterly net income dropped to $21.1 million, or 15 cents per share, which included 11 cents per share in buyout costs.

Analysts polled by Thomson Financial expected income of 22 cents per share in the latest quarter. Analyst estimates typically exclude special items.

Revenue dropped 6 percent to $741.9 million, missing the average Wall Street estimate for $754 million. Ad revenue slipped down 11 percent, hurt mostly by fewer classified ads.

...more...


Letting Judith Miller spew lies on the front page for years turned that piece of paper into fishwrap (jmho).
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:36 AM
Response to Original message
49. "Wall Street got drunk": Bush at private event
http://www.reuters.com/article/bondsNews/idUSN234475622...

WASHINGTON (Reuters) - President George W. Bush has an explanation for the housing-market meltdown that has thrown the global economy into turmoil: Wall Street got drunk.

"There's no question about it. Wall Street got drunk," Bush said at a private event in Houston on Friday. "It got drunk and now it's got a hangover. The question is, how long will it sober up and not try to do all these fancy financial instruments?"

Bush's comments were recorded on a cellular telephone camera and posted to the YouTube Internet site on Tuesday.

He was in Houston to raise money for Republican congressional candidate Pete Olson, who is challenging incumbent Democrat Nick Lampson.

<snip>

Bush, 62, was arrested for drunken driving when he was 30...

more...
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:46 AM
Response to Reply #49
53. There you have it...
Dub reads the SMW! Proof positive!

:rofl:

:hi: Dub.

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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:17 AM
Response to Reply #53
57. (Updates with White House comment paragraphs 5-6)
http://www.reuters.com/article/bondsNews/idUSN233050372...

"He has said before that Wall Street was dealing with very complex financial instruments and that the markets didn't fully understand the risks that those instruments posed to the system," White House spokeswoman Dana Perino said.

"It is certainly a more colorful way of saying what he said before, but he's described it that way before in terms of his observations of what happened to the market," she said.


his handlers just couldn't stand not cleaning his act up :puke:
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:44 AM
Response to Reply #57
66. Which reminds me of a joke...
Edited on Wed Jul-23-08 10:53 AM by Prag
Early one morning a young person walked into a cafe carrying in one hand a shotgun and in the other a bucket of
wet manure.

The man behind the counter asked, "What can I do for you?"

The youngster replied, "I'll have a cup of coffee, please."

The hash-slinger said, "Sure thing. Here you go!"

The person picked up the coffee cup and quickly drank it's contents. Suddenly, after drinking the coffee, the patron
threw the bucket of manure high in the air and blasted it with the shotgun spraying the contents of the bucket to
all corners of the eatery, then turned and briskly walked out the door of the cafe.

The next morning the same customer came walking into the cafe carrying another bucket of manure and the shotgun.

As the person walked up to the counter he said, "I need another cup of coffee, please."

The proprietor yelled at the guy, "Hey, there you are! What in the hell do you think your doing? You created a
hell of a mess yesterday. We haven't even come close to cleaning it up yet. You've got some nerve coming in here
again!"


"It's simple," said the young person, "I'm a student in a business correspondence school and I'm studying for my
M.B.A. Everyone knows the way to success in business is to drink coffee, shoot-the-shit, and leave a huge mess
for someone else to clean up."


:)
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:23 PM
Response to Reply #66
87. That Is Truly Disgusting--Because It's Absolutely True
These clowns have stolen the entire Adult lives of the Boomers, and the entire lives of their children, and maybe even their grandchildren. We had a nice little country chugging along, and whammo! No more nice little country.
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:01 PM
Response to Reply #87
90. Seemed like the moment to share it...
The joke's on the disgusting side, but, it fit my observations.



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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 04:47 PM
Response to Reply #53
82. Prag, Bush just reads the cartoons.....
Edited on Wed Jul-23-08 04:51 PM by AnneD
:spray: big words make his head hurt.
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:37 AM
Response to Original message
50. Giving the Goose to the Gas: Fed adds $6.75 bln in reserves via overnight repo
http://www.reuters.com/article/bondsNews/idUSNYG0011852...

NEW YORK, July 23 (Reuters) - The U.S. Federal Reserve said on Wednesday it added $6.75 billion of temporary reserves to the banking system through an overnight repurchase agreement.

Federal funds were trading at 2.000 percent in the market after the operation amount was announced, matching the target rate the Fed sets.

A total of $32.60 billion in bids were submitted for the operation.
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:38 AM
Response to Original message
51. S&P cuts Washington Mutual to just above junk
http://www.reuters.com/article/bondsNews/idUSN234950262...

NEW YORK, July 23 (Reuters) - Standard & Poor's on Wednesday cut its counterparty credit rating on Washington Mutual Inc (WM.N: Quote, Profile, Research, Stock Buzz) to just a notch above junk on the thrift's higher than expected second-quarter losses.

The largest U.S. savings and loan posted a $3.33 billion second-quarter loss on Tuesday as souring mortgages forced it to set aside more money for loan losses. For details, click on .

The one notch downgrade by S&P to "BBB-minus" follows announcement by rival rating agency Moody's Investors Service on Tuesday that it may downgrade the thrift to "junk" status. S&P also cut short-term rating to "A-3," the fourth highest rating, from "A-2."

S&P said its current ratings reflect expectations that the thrift will post a loss in 2008 and will return to profitability in 2009.

However, if residential mortgage credit losses exceed the expected $19 billion loss, the ratings may drop lower, the rating company said.

...more...
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:10 AM
Response to Original message
54. So what little gems are going to be hidden in the 700-PAGE HOUSING BILL
http://money.cnn.com/2008/07/23/news/economy/housing_bi...

President Bush dropped his threat Wednesday to veto a sweeping housing bill that will offer up to $300 billion in assistance to troubled homeowners and throw government support behind mortgage finance giants Fannie Mae and Freddie Mac.

The House is expected to pass the nearly 700-page measure on Wednesday afternoon. It could then go back to the Senate for a final vote as early as this evening.


And is anyone actually going to READ it before he/she votes on it?
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:19 AM
Response to Reply #54
58. Maybe immunity from prosecution for these fraudsters?

Something to benefit the rich?

Something caused Bush to give it a green light.

:eyes:
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Karenina Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 01:50 PM
Response to Reply #58
73. Wonder if the Congress critters actually READ IT!!!
Sure to be some goodies in there somewhere. :bounce:
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Neshanic Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:13 AM
Response to Original message
56. This is the last party before the end of the show. I knew there would be another up and
this is the last one to be milked until the fall.

Then in October, watch out.
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Pale Blue Dot Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:19 AM
Response to Original message
59. Layoffs 7/23
Sorry I'm late. I was "drunk" and now I have a "hangover".

It seems that Wall Street thought it was great news yesterday that between Wachovia and United Airlines, we lost over 15,000 jobs. Let's see what they have to cheer about today.

Frontier Airlines - Denver, CO - 113 jobs lost (on top of over 400 previously announced)
DENVER (Map, News) - The top two airlines at Denver International Airport have announced 130 more job cuts, with one announcing more flight reductions.

United Airlines plans to lay off 17 pilots in September, and Frontier Airlines plans to lay off 113 nonunion employees Sept. 9, according to letters both airlines sent to state labor officials earlier this month.

United's layoffs could still rise. On Tuesday, United said it planned to cut a total of 7,000 jobs throughout the company, up from the 3,800 it previously announced. The news came as United parent UAL Corp. reported a $2.73 billion second-quarter loss.

Since June, Frontier has announced a total of 569 layoffs and United has announced cuts of 167 people in Denver.
http://www.examiner.com/a-1499612~United__Frontier_anno...


Riverside County Indian Casino - Temecula, CA - 400 jobs lost
The Pechanga Resort and Casino in Temecula plans to lay off about 400 of its 4,700 workers, blaming tough economic times.

The casino, the second-largest private employer in Riverside County, draws customers from across Southern California. Economist John Husing says people spend less on entertainment during an economic downturn, and the region has been hit hard by the housing slump and overall economic downturn.

Amy Minniear, president of Pechanga Development Corp., on Tuesday called the layoffs "the most difficult decision" they have had to make since beginning operations.

Indian-owned casinos typically don't report financial results. But several Las Vegas gaming corporations reported revenues are down as much as 22 percent over three years ago.
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/0...


Dow Reichhold - Walker County, GA - 60 jobs lost
"Its looking rough for everybody in Walker County. Looks bout like when Bart over there shut down.. I was real young but it look right like a ghost town when they done that," says Rape.

Now, another plant will close Dow Reichhold will leave nearly sixty people without jobs making the unemployment claim well over seven hundred.

Earlier this year, Shaw laid off fifty workers in Lafayette and the fire at Quality Carpet left more than seventy people out of work.

"Its rough on families around here and I am single but I've got friend that are married and got kids and its especially hard on them," says (Jerry) Rape.
http://www.newschannel9.com/news/says_970292___article....


University of Medicine and Dentistry of New Jersery - 300 jobs potentially lost
NEWARK, N.J. - Officials at the University of Medicine and Dentistry of New Jersey are considering up to 300 layoffs in an effort to close a near $50 million hole in next year's budget.

The Star-Ledger of Newark reports the school is planing to eliminate positions _ including nurses, technicians and maintenance staff _ at its University Hospital.

Cuts are also being considered in the administrative, clerical and support staff from UMDNJ's central administration.

UMDNJ president William Owen Jr. tells the newspaper that leaving current vacancies open doesn't go far enough in closing the budget gap.
http://www.newsday.com/news/local/wire/newjersey/ny-bc-...


Thousand Trails LP - Frisco, TX - 241 jobs lost
Thousand Trails LP expects to eliminate 144 positions at its Frisco headquarters when a planned sale of the company to Equity LifeStyle Properties Inc. is complete, the company said in a letter to the Texas Workforce Commission.

The Frisco-based operator of RV camping and outdoor preserve communities says an additional 97 employees working off-site will lose their jobs, bringing the total staff reduction to 241 employees. Most of the positions are tied to administrative functions at the companys Frisco headquarters.

Chicago-based real estate investment trust Equity LifeStyle Properties Inc. (NYSE: MHC) said in July that it would acquire Thousand Trails from its parent company, Privileged Access.

In May 2002, Thousand Trails was awarded $125,000 in cash incentives from the City of Frisco, for moving its headquarters and 100 jobs from an office building along Interstate 635 to Parkwood Office Center in Frisco. The company says the staff reductions will take place on or around Sept. 24.
http://www.bizjournals.com/dallas/stories/2008/07/21/da...


City of San Francisco - 140 jobs lost
The San Francisco Board of Supervisors approved the largest budget in the city's history Tuesday, giving the go-ahead for a $6.5 billion spending plan that avoided many of the sweeping job cuts initially proposed by Mayor Gavin Newsom.

City leaders faced a huge budget deficit of $338 million this year that resulted in a proposal with broad cuts in city services. The board managed to shift money in the mayor's proposal and restore just over $37 million in cuts to some of those city services.

By law the city must have a balanced budget, unlike the federal government. To add back programs, the supervisors cut from portions of the mayor's initial proposal.

"We put together a budget that reflects the collective compassion that is San Francisco," said Supervisor Jake McGoldrick, who chaired the board's budget committee that made the lion share of changes to Newsom's proposal. "None of us got everything, but all of us got something."

Newsom's initial proposal called for the elimination of 1,085 city positions, but the budget approved by the board eliminates only about 140, many of which were vacant. As of Tuesday, only about 30 people would actually be laid off, according to the city Department of Human Resources. That number could fluctuate slightly over the next few days due to civil service rules.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/0...


Goodyear Tire - Tyler, TX - 70 jobs lost
Workers at Tylers Goodyear plant were notified on Tuesday of another impending layoff.

Harold Sweat, president of United Steelworkers Local 746L, said the layoff will occur Sept. 22-Oct. 6 and include about 70 people.

Goodyear referred to the layoffs as permanent separation.

The company issued a Worker Adjustment and Retraining Notification (WARN) Act notice of the layoffs, and the notice also contained a phrase saying the plant will be permanently closed, Sweat said.
http://www.tylerpaper.com/article/20080723/NEWS08/80723...


New Britain School District - New Britain, CT - 39 jobs lost
NEW BRITAIN - School administrators, busy balancing the diminished number of positions with the district's staff, may know as early as this week how many teachers will lose their jobs, Superintendent Doris Kurtz said Tuesday.

"It's really heart-breaking because these are loyal, dedicated, talented people and we need them. We just can't afford them," Kurtz said.

So far, five parent-school liaisons and nine paraprofessionals have been laid off. The parent-school liaisons will be allowed to take the school clerk test, according to an e-mail from Bob Stacy, the district's human resources director.

In the same e-mail, Stacy told the school board last week that 25 teachers were on the district's displacement list and would likely lose their jobs.
http://www.courant.com/community/news/nb/hc-neblayoffs0...


Collier School District - Collier, FL - 45 jobs lost
School is not in session yet, but 45 Collier County School District employees will not be working by the new school year.

The district confirmed it will layoff 20 bus drivers and 25 bus attendants. Chief Operations Officer Michele LaBute said in an e-mail that the district determined it could reduce the number of bus routes for the 2008-09 school year during an annual efficiency review of the routes and occupancy.

School districts throughout our state have experienced significant budget reductions this year and will receive even deeper budget reductions next year. In total, our school district has lost over $20 million in two years and the outlook for 2009-10 is not good, reads a letter sent to the drivers and the attendants Friday.

LaBute said that the reduction in force came as the district was looking to cut routes due to a decrease in student enrollment.
http://marconews.com/news/2008/jul/22/collier-school-di... /


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Pale Blue Dot Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:37 AM
Response to Reply #59
65. Manufacturing Layoff Activity Highest since August 2003
(RTTNews) - According to data released Wednesday morning by the Labor Department, employers took 1,643 mass layoff actions in June, resulting in 165,697 unemployment insurance filings, seasonally adjusted. Layoff activity in manufacturing was the highest since August 2003. Average weekly initial claimants reached its highest June level since 2001.

The national unemployment rate was 5.5 percent in June, seasonally adjusted, unchanged from the prior month and up from 4.6 percent a year earlier. Total nonfarm payroll employment decreased by 62,000 in June from the previous month but increased by 15,000 from a year earlier.

http://www.rttnews.com/Content/AllEconomicNews.aspx?Nod...
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 12:23 PM
Response to Reply #59
70. Chrysler to cut 1,000 salaried jobs by Sept. 30: report
01. Chrysler to cut 1,000 salaried jobs by Sept. 30: report
1:21 PM ET, Jul 23, 2008
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 12:23 PM
Response to Reply #59
71. Just a quick question Finn...
Have you been keeping track of a total number of jobs lost since you began the Layoffs postings? It would be interesting to see a grand total as the days go on, as it sure does seem lots of jobs are getting lost extremely quickly.

Thanks again for keeping up on this :)
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Pale Blue Dot Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 12:35 PM
Response to Reply #71
72. That's a great question.
The answer is no, but I'm thinking of starting a spreadsheet to keep track. The problem is that I'm a school teacher, and I'm worried that once school begins in the fall I won't have time to keep up with this.

There's something else I've been wondering, too: Is this an uptick in the number of jobs lost? Since I only started doing this a couple of weeks ago, I have nothing to compare it to. So at the moment I have no idea if these numbers represent an increase, a decrease, or simply the status quo.
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TalkingDog Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 02:19 PM
Response to Reply #72
74. some unemployment love
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skoalyman Donating Member (751 posts) Send PM | Profile | Ignore Wed Jul-23-08 09:00 PM
Response to Reply #74
97. from one of your links
As the unemployment rate holds at 5.5%, >the outlook isn't especially bright.< yup matches the Republicans we have in office to a T HeeHe :rofl:
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Tandalayo_Scheisskopf Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:20 AM
Response to Original message
60. Commodities Fall to 7-Week Low as Investors Shun Energy, Metals
By Millie Munshi and Grant Smith

July 23 (Bloomberg) -- Commodities dropped to the lowest in seven weeks as a stronger dollar and rising equity markets eroded the appeal of oil, gold and corn as alternative investments.

The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials fell for a second day, touching 1,527.441, the lowest since June 5. Corn was the biggest loser, dropping as much as 5 percent, and crude oil extended its slide from a record this month, while gold dropped to a two-week low.

The dollar rose to a four-week high against yen and rose against the euro as investors increased bets the Federal Reserve will raise interest rates in September. The Dow Jones Industrial Average added 3.6 percent last week, while the UBS Bloomberg index plunged 7.3 percent, the biggest slide since March. Some investors buy commodities as a hedge against inflation.

``It all has to do with the dollar, inflation and interest rates,'' said Michael K. Smith, president of T&K Futures & Options in Port St. Lucie, Florida. ``With the dollar gaining and less concern about inflation, people don't want to buy commodities anymore. People are shifting into stocks.''

Shares in Asia, Europe and the U.S. climbed. The MSCI World Index added 1 percent to 1,390.99 at 10:38 a.m. in New York.

More: http://www.bloomberg.com/apps/news?pid=20601087&sid=ayW...

Add to that the growing realization that speculation margins are about to get get a serious kneecapping from Congress. The party is just about over and it's about motherfucking time.
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:21 AM
Response to Original message
61. Moderate and lower earners under more pressure
http://www.reuters.com/article/domesticNews/idUSN223466...

WASHINGTON (Reuters) - The trouble that began last summer in the financial markets raised the likelihood of a U.S. recession, but for America's middle class, the downturn has been under way for many years, experts plan to tell a congressional panel on Wednesday.

Hit with higher gasoline prices, declining home values, rising health-care costs and little or no income growth since 2007, the outlook for those in the middle class and those with even lower incomes is dire.

"In the post-war period, the country grew together. Now we are growing apart," said Kristen Lewis of the American Human Development Project, in testimony prepared for delivery on Wednesday to the congressional Joint Economic Committee.

A report showing the growing disparity in wealth in the United States was released recently by the American Human Development Project, a nonprofit project whose major backers include Oxfam America and the Rockefeller Foundation.

Citing Census Bureau data, Lewis told the Joint Economic Committee that in 2006, the average annual income in the top quintile of U.S households stood at $168,170 -- nearly 15 times the average income of $11,352 a year in the lowest quintile.

The richest 20 percent in the country earned more than half of the nation's total income.

<snip>

The top 1 percent of U.S. households possess a third of America's wealth and the bottom 60 percent only 4.2 percent, according to Lewis.

...more...
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:29 AM
Response to Reply #61
63. and on down to the bottom line:
"It is no surprise that millions of families have turned to debt to try and bridge the gap between their incomes and their expenses. Debt of every kind has increased sharply," Warren said.

But yet the issuers of credit cards have profited.

In 2007, all-purpose credit cards generated revenues of $117 billion, up from $115 billion in 2006, Warren said.

At the same time, about 43.5 percent of all households in the United States carry a balance on their credit cards,

"Credit card debt now consumes a sizable portion of a family's income, leaving families with less to spend elsewhere," she said. "In effect, a huge wealth transfer is taking place."
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 02:56 PM
Response to Reply #61
76. A correction --
Hit with higher gasoline prices, declining home values, rising health-care costs and little or no income growth since 2007, the outlook for those in the middle class and those with even lower incomes is dire.

Many believe there has been "little or no income growth" for the working and middle classes since 1973.


Tansy Gold, seriously glad for her little $$$ gig; it ain't much, but it suffices for her and the dogs!



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Pale Blue Dot Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:34 AM
Response to Original message
64. You can fool some of the people all of the time.
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TalkingDog Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 11:15 AM
Response to Reply #64
68. Just tell him this:
Mama said there'll be days like this,
There'll be days like this Mama said
(Mama said, mama said)
Mama said there'll be days like this,
There'll be days like this my Mama said
(Mama said, mama said)
I went walking the other day,
Everything was going fine,
I met a little boy named Billy Joe
And then I almost lost my mind
Mama said there'll be days like this,
There'll be days like this Mama said
(Mama said, mama said)
Mama said there'll be days like this,
There'll be days like this my Mama said
My eyes are wide open
But all that I can see is,
chapel bells are callin for everyone but-a me
but I don't worry cause


Mama said there'll be days like this,
There'll be days like this Mama said
(Mama said, mama said)
Mama said there'll be days like this,
There'll be days like this my Mama said
And then she said someone will look at me
like I'm looking at you one day,
then I might find
I don't want it any old way,
so I don't worry cause
Mama said there'll be days like this,
There'll be days like this Mama said
(Mama said, mama said)
Mama said there'll be days like this,
There'll be days like this my Mama said
Mama said, mama said
Hey! Don't you worry,
Mama said mama said
Hey! Don't you worry now.
Mama said mama said,
Hey! Hey!


by the Shirelles

http://www.musicsrc.com/video/SHIRELLES~_MAMA_SAID.php?...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:28 PM
Response to Reply #64
88. Day Trading
Frankly, the casino odds are better.
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CountAllVotes Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:54 PM
Response to Reply #64
89. I caught that ...
and I held my fingers ... :eyes: and then some!

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TheWatcher Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:55 PM
Response to Reply #64
93. Parasites are never worth talking to.
All they will do is give you heartburn and a headache.

Let the little snit gloat all he wants.

He's going to get a rude awakening soon.

He hasn't figured out yet that the REAL Criminals controlling all of this and the REAL Big Money are going to steal his ill-gotten gains before it is all over too.

He doesn't realize he is a sheep, but he will be led to slaughter all the same.

Fool...Money....Parted.

I've seen so many of his ilk in my travels through life.


They've never gotten it yet, and I doubt they ever will.
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Tandalayo_Scheisskopf Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 02:29 PM
Response to Original message
75. 3:17PM Commodities Market News.
After an attempted rally in the oil market, no doubt predicated upon some trying to leverage Hurricane Dolly into a long position, Oil is down 3.17 to 125.25 on August contracts. HO, RBOB and NG are all down .08 on August deliveries, so once again we are seeing something of a disconnect between Crude and Distillates. Not a surprising thing in these times.

All grains are down, with the downward move being about 2.00 in most of them, except for Soybean Meal and Rough Rice.

Metals are all down, led by gold and especially PLAT, which is down 47 and change.

Pork bellies are up 3.00 and Live cattle are up .33, the rest down or flat.

Softs are mixed, with another bug down move in Cocoa, down 25.50. Must be a good cacao crop this year.

Indices are down, except for the DJIA Settle.

There was a report today on Bloomberg that quoted several people as saying that the shine is off the apple, a shine that has been hardy for the last 8 years, in the commodities market. As time passes, it grows increasingly apparent that a number of commodities bubbles are slowly losing air. Undoubtedly, the growing talk in Congress, regarding regulation of speculators and changing leverage margins is having an effect.

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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 04:14 PM
Response to Original message
78. U.S. shale drilling a boon for big oil service firms
HOUSTON (Reuters) - Drilling in U.S. shale fields, which are believed to hold massive natural gas reserves, should provide handsome profits in coming months to companies like Halliburton Co (HAL.N: Quote, Profile, Research, Stock Buzz) that sell the technology needed to tap the complex wells.

Other large companies like Baker Hughes Inc (BHI.N: Quote, Profile, Research, Stock Buzz) and BJ Services Co (BJS.N: Quote, Profile, Research, Stock Buzz), which have extensive service offerings and a large North American business, are best poised to benefit as drilling accelerates in areas like Louisiana's Haynesville Shale and the Marcellus Shale in Appalachia in the Northeast.

"These are very intensive, service-focused wells and they are very levered toward the big guys," said Pierre Conner, oilfield service analyst with Capital One Southcoast in New Orleans. "What is happening all over the world is wells are getting more sophisticated."

High natural gas prices have stirred big interest in drilling in shale in North America, a process that requires technologies like fracturing and horizontal drilling.

"This big Haynesville play is much deeper, way over pressured and high temperatured, which means you need very big rigs and lots of horsepower," said John Olson, a fund manager with Houston Energy Partners. "You need much more in the way of pressure pumping. I think it is really a big company game right now."

In fracturing, propellants like sand grains and liquids are pumped into a well under pressure high enough to crack the shale and allow the release of oil and gas. With horizontal drilling -- a form of directional drilling -- wells are drilled parallel to the formation, eliminating the need for several vertical wells.

Oilfield service companies are licking their lips in anticipation of the business, which some believe will help give the next leg up in the exploration cycle.

/... http://www.reuters.com/article/reutersEdge/idUSN2315920...

Ya don't say,,,
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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 04:15 PM
Response to Original message
79. And here's a guy dumber than Douglas Feith.

JUDGMENT CALLS
http://www.newsweek.com/id/148402

Robert J. Samuelson
You Call this a Depression?

Despite parallels with the early 1930s, to use the D word now would be total overkill.
Jul 23, 2008 | Updated: 2:01 p.m. ET Jul 23, 2008

(snip)

The specter of depression stalks America. You hear the word repeatedly. Are we in a depression? If not, are we headed for one? The answer to the first question is no; the answer to the second is "almost certainly not." The use of "depression" to describe the economy is a case of rhetorical overkill that speaks volumes about today's widespread pessimism and anxiety. A short history lesson shows why.

The Great Depression of the 1930s -- the last time the term rightly applied -- was industrial capitalism's worst calamity. U.S. unemployment peaked at 25 percent in 1933; it averaged 18 percent for the decade. From 1929 to 1933, 40 percent of U.S. banks failed. People lost deposits; businesses and consumers lost access to credit. Over the same period, wholesale prices dropped a third, driving farmers and firms into bankruptcy. Farm foreclosures, shantytowns (called "Hoovervilles," after the president) and bread lines followed.

This was a social as well as economic breakdown. Our present situation bears no resemblance to this. In June, unemployment was 5.5 percent, slightly below the average since 1960 of 5.8 percent. It's true that banks and investment banks -- Citigroup, Merrill Lynch, Wachovia -- have suffered large losses. But on the whole, the banking system seems fairly strong. Although profits in the first quarter of 2008 were down 46 percent from 2007, they totaled $19 billion even after $37 billion set aside for loan loss reserves. Overall corporate profits are still running at a near-record annual rate of $1.5 trillion.

(snip)

The paradoxical thing about today's economy is its strength. No kidding. Consider all the hand grenades lobbed at it. Higher oil prices. The housing implosion. Large layoffs in affected industries: autos, airlines, construction, mortgage banking. The "credit squeeze" triggered by losses on "subprime" mortgages. Despite all that, the economy hasn't collapsed. It's merely weakened. Output in the first quarter of 2008 was actually 2.5 percent higher than a year earlier.

(snip)more
_____________________________________________________________

Mr. Samuelson, Lenscrafters just called. Your new rose-colored glasses ar in.
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Zynx Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 04:59 PM
Response to Reply #79
83. His use of GDP is an improper measurement, but his general point is correct.
There is no comparison between our current mess and the Great Depression. We are so far removed from that point that comparisons are like comparing the Iraq War to WWII. Same general concept, entirely different order of magnitude.
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:41 PM
Response to Reply #83
92. But the magnitude is increasing, and the continuing blindness to that
is what's frightening a lot of us.

I don't think any of the gloomiest doomsayers here on SMW would say we're currently in a big-D depression. But I do think that the general trend is not AWAY from recession/depression but rather it is TOWARD a deepening economic, shall we say, downturn.

Furthermore, in my humble non-expert opinion, many of the accepted measurements are flawed. I don't think we really have a 5.5% unemployment rate. I think there are a lot of people who are no longer looking for standard gainful employment -- meaning regular working hours, regular wages, standard benefits, taxes, etc. I think there are a lot of people who have opted for contract employment (which is still "employment") and temporary work and part-time work, plus those who have given up looking altogether and they would boost the nubmers. Depending on how the unemployment numbers are calculated, if they don't include those who are not eligible for unemployment benefits, there are many who get left out.

But we also have those who are employed but not making enough to live on. Maybe they're working at Target or Home Depot or McDonalds and making $8 or $10 an hour, but it's not enough to pay the bills that their old job -- at $15 or $20 an hour -- used to cover. Or maybe they're working two jobs, putting in 45 or 50 hours a week at minimum wage AND no benefits, going deeper in debt, trying to keep up the mortgage, trying to find money for gas to get that minimum wage job. . . . . . And if the prospects don't get any better, we can't move out of this "recession." We can only go further down, and that's in the direction of, you guessed it, Depression.

What's happening as one looks at the list of lay-offs that finnfan is posting, is that the jobs that are disappearing are service-sector jobs. The switch from a manufacturing economy to a service economy -- which happened when all those union-wage manufacturing jobs were off-shored to Asian sweatshops -- is now being eroded with the disappearance of the service sector jobs. No one is making anything -- we're just shuffling the money around and moving most of it upward toward the top 10%, the top 2%, the top .025%. If we don't MAKE money at the bottom of the heap, it's all just going to funnel upward, leaving the bottom tiers in, you guessed it, Depression.

Samuelson and others may be looking at numbers, but they need to get out of their neat little offices and get out with real people. They need to talk to the teachers who are getting laid off in New Jersey, the nurses who are getting laid off in Texas, the street sweepers who are getting laid off in Milwaukee, the Starbucks baristas who are getting laid off everywhere. These are REAL PEOPLE. They aren't just numbers.

Ya know, the thing that pisses me off about Kevin Phillips is that he tends to denigrate the sociologists, which kinda surprises me since he's a historian and the two kinda go hand in hand. But as a sociologist, with a sociologist's bias, I do think it's important for the economists to consider much more than just the latest derivative formula or the next "black swan" event. They need to consider the people. That's something the CEOs don't do, or the congresscritters, or the political candidates.

The BF was saying this morning that he can't figure out what happened with Michael Savage. "He's an educated guy, I don't know what happened to him." I didn't even bother to engage a conversation, because BF doesn't believe in "sociology." But the point I'd have tried to make was that whatever Weiner was like before, and I confess I have NEVER listened to him, he got to a point where there weren't any people any more. It was all about him, all about his personal ideas, his personal demons, his personal desires. What other people might like or hate or feel or believe or need no longer mattered. Other people simply ceased to exist.

I think that's what's happened to the economists running our economy. They forgot about people.

The numbers may lie. The people don't.



Tansy Gold


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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:56 PM
Response to Reply #83
102. I wasn't insinuating that we're in a depression right now.
I've lived, and been laid off during several recessions. One layoff lasted over 2 years. But, this is different. The jobs aren't there anymore, and the ones that are, pay a hell of a lot less.

The government is broke. The safety net is gone. And our politicians and corporations just don't get it. There are warning signals flashing red everywhere, and nobody is paying attention.

It's my feeling, that unless we have dual Manhattan Project style projects, in both energy, and re-industrialization, we will be in a depression a few years down the road. And I don't see the will in Washington to attempt it. I don't have much faith in Obama to accomplish much more than mitigate some of the enormous damage done over the last 30 years. It will take a generation to recover from the last eight, alone.
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:23 PM
Response to Reply #79
86. This last Sunday......
Edited on Wed Jul-23-08 05:26 PM by AnneD
I arrived at church early. I proceeded to weed the small garden we have around our cross. A woman in a car drove up and got my attention. She proceeded to tell me a story about her waterpump going out and needing a bit of gas money to get back to Port Arthur and could I spot her a five. I told her to wait while I went to my car. I glanced into her car and saw basically the things one would need to have if one were living in one's car. It was packed with bedding, clothes, utensils, a radio, a few groceries, and a few books. It had a layer of dirt and dust that you see on cars that have been parked for a while.

I came back and told her it was her lucky day. I had fond 2 fives in my purse. I asked her that Sunday school was starting soon and she was welcome to join us...we usually have coffee and donuts and we are a pretty casual group. She declined, but thanked me and went on down to where ever she needed to be.

We get homeless folks sleeping off drunks on our grounds (it is open and we have actually gotten some guys into the church that way-they are our works in progress). We are seeing more of this and our food bank is getting more demands on it.

I didn't go through the Depression, but what I have been seeing more and more with my own eyes can't be signs of prosperity.
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:04 PM
Response to Reply #86
91. That was very kind and generous of you AnneD...
:)
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 07:45 PM
Response to Reply #91
94. Sometimes I wonder if maybe I am being a sucker....
or a dupe.I don't give all the time, but some times I actually feel compelled. That was this time, esp after I looked in the rear seat of her car. I just knew. This was a nice African American woman that looked to be in her late 50's, in a nice but well worn cotton shift that was as clean as could be expected if what I think happened was accurate. It takes away for people's pride to ask for a hand out. That is the first thing that poverty kills, your sense of pride. It debases your sense of worth.

My husband, who is FAR more trusting and generous than I, asked how I had figured out how all this out. I think it is because of being a Nurse....we know human nature and are shrewed observers of the unspoken details and clues. Hubby, a musician at heart, is totally clueless. I often think that is why we were paired.
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:05 PM
Response to Original message
95. Nighty night.
Dow 11,632.38 Up 29.88 (0.26%)
Nasdaq 2,325.88 Up 21.92 (0.95%)
S&P 500 1,282.19 Up 5.19 (0.41%)
10-Yr Bond 4.1480% Up 0.0510

NYSE Volume 6,778,005,500
Nasdaq Volume 2,759,664,750

4:30 pm : Wednesday marked an active session for Wall Street, with 110 companies releasing their quarterly results, including four Dow components. In addition, the government announced its weekly energy statistics and the Fed released its Beige Book.

The stock market settled with a modest gain of 0.4% in volatile and heavy trade. The advance was aided by a steep drop in crude prices and several better-than-expected earnings reports. The Nasdaq outperformed its counterparts thanks to strength in large-cap tech names.

Defensive investments, such as the utilities sector (-2.3%), underperformed, while beaten-down areas saw a surge in buying interest, as investors showed more willingness to take on risk.

Consumer discretionary stocks rose 2.0%, with homebuilders climbing 4.0%. Automakers rose 3% after General Motors (GM 14.60, +0.28) forecast a 2.5% increase in global 2008 auto sales, as strong emerging market demand offsets weakness in North America. Meanwhile, retailers advanced (+2.4%) after crude prices took a tumble.

Oil prices fell 3.1% to $124.48 per barrel, marking its lowest level in more than six weeks. Crude inventory levels fell by a larger-than-expected amount, but an increase in gasoline stockpiles raised concerns of demand destruction.

The drop in oil prices weighed heavily on the energy sector (-3.8%), but provided a huge lift to airline stocks (+8.5%).

Commodities as a whole fell 1.7%, with gold shedding 3.1% as the dollar rose 0.5%. As a result, the materials sector (-1.7%) underperformed.

The financial sector was once again in focus after Washington Mutual (WM 4.65, -1.17) reported a larger-than-expected second quarter loss of $3.3 billion. The sector managed to gain as much as 4.6% on news that lawmakers reached a deal on a housing bill that, among other things, will allow for financial aid to Fannie Mae (FNM 15.00, +1.59) and Freddie Mac (FRE 10.80, +1.10) if need be. Financials slipped off their best levels, to settle the day with a gain of 1.9%, after WaMu reversed into the red on concerns that it will have to raise more capital. The financial sector is up 34% since July 15, but is still down 23% this year.

Earnings results were mostly better than expected. Anheuser-Busch (BUD 67.36, +0.11), ConocoPhillips (COP 81.83, +2.48), Exelon (EXC 81.41, -0.22), General Dynamics (GD 89.27, +5.82), Norfolk Southern (NSC 69.96, +4.27), McDonald's (MCD 59.66, +0.46), PepsiCo (PEP 67.70, +1.51), Pfizer (PFE 19.09, +0.74), WellPoint (WLP 53.17, +4.42) and Wyeth (WYE 45.55, +0.87) all reported earnings that topped Wall Street forecasts, and increased earnings per share versus the prior year.

AT&T (T 33.06, +1.24) rallied after reporting an 8.6% rise in earnings per share, which met Wall Street's forecast.

There were some earnings misses as well. Boeing (BA 66.72, -2.54), E*Trade (ETFC 3.41, -0.64), Washington Mutual and Yahoo! (YHOO 20.39, -1.01) fell short of estimates.

Costco (COST 63.43, -8.57) warned that its earnings per share for its quarter ending in August will fall "well below" the current consensus estimate of $1.00. Costco cited increased inflation, especially energy costs, and a larger-than-expected LIFO accounting charge. Wal-Mart (WMT 58.09, -0.97), operator of Sam's Club, fell in conjunction with Costco.

The Fed's Beige Book, a collection of anecdotal economic information, prompted a brief drop in stocks, but the market quickly recovered from the knee-jerk reaction as much of the information was already known. The report stated that the economy has "slowed somewhat" since the previous report, and that there were increased price pressures. In addition, consumer spending was "mixed, weak or slowing" in nearly all districts.DJ30 +29.88 NASDAQ +21.92 NQ100 +1.3% R2K +0.3% SP400 +0.1% SP500 +5.19 NASDAQ Adv/Vol/Dec 1615/2.73 bln/1224 NYSE Adv/Vol/Dec 1973/1.72 bln/1191
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mmonk Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:23 PM
Response to Reply #95
96. Hate to say it but I made a play on Wachovia
right after the news they would be subpoena. It was wild as they reported their bad news and the stock I bought began to skyrocket. Up is down but I played it right I guess.
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skoalyman Donating Member (751 posts) Send PM | Profile | Ignore Wed Jul-23-08 09:04 PM
Response to Reply #96
98. Get out now !!!
run mmonk run its a keg waiting for a match :nuke: :hi:
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mmonk Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:10 PM
Response to Reply #98
99. They all are.
I just made a play switching from two others (banking stocks) into that one. The financial section of my portfolio had already been crushed. Thought I would just get a bump in that one.
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skoalyman Donating Member (751 posts) Send PM | Profile | Ignore Wed Jul-23-08 09:28 PM
Response to Reply #99
100. To me it feels like this latest rally may be the calm before the real storm
comes in.Wall streets already balancing on the edge, without the fed cheating and keeping it pumped up. I figure it would have already collapsed.They can only play that game for so long until another shoe or shoes hit the floor that's just me. I don't know much of anything when it comes to wall street.Just a spectator in the upper stands so to speak. :hi:
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mmonk Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:32 PM
Response to Reply #100
101. I know enough about it to know it gives me acid indigestion.
Edited on Wed Jul-23-08 09:33 PM by mmonk
:hi: Or is that an ulcer?
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:57 PM
Response to Reply #101
103. actually, an ulcer is a bacterial infection and can
be cured with a thorough antibiotic regimen

(I know 'cuz it happened to me)

:hi:
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