STOCK MARKET WATCH, Friday October 17

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday October 17, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 95
DAYS SINCE DEMOCRACY DIED (12/12/00) 2824 DAYS
WHERE'S OSAMA BIN-LADEN? 2549 DAYS
DAYS SINCE ENRON COLLAPSE = 2840
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

In recognition of those prescient of the Dow's precipitous return of Bush values (9/29/08): JuneBourder and AnneD

AT THE CLOSING BELL ON October 16, 2008

Dow... 8,979.26 +401.35 (+4.68%)
Nasdaq... 1,717.71 +89.38 (+5.49%)
S&P 500... 946.43 +38.59 (+4.25%)
Gold future... 804.50 -34.50 (-4.11%)
30-Year Bond 4.23% -0.02 (-0.49%)
10-Yr Bond... 3.94% -0.08 (-1.87%)






GOLD,EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

[ozymandius]

1. Market WrapUp

Heading in the Wrong Direction
BY MICHAEL PANZNER

This morning, the Federal Reserve Bank of Philadelphia announced that its general economic index for October fell from 3.8 in September to a much worse-than-forecast minus 37.5, the lowest level in nearly two decades. That follows yesterday's news that the Federal Reserve Bank of New York’s general economic index declined to a record low of minus 24.6, also below expectations. Together with another regularly updated index, the Richmond Federal Reserve Bank's manufacturing sector activity survey (October data has not yet been released), these indicators seem to make it clear that the economic outlook remains bleak.

.....

In recent weeks, there have been a great many efforts -- in the U.S. and elsewhere -- to “rescue” the financial system and make credit more freely available. However, it appears that policymakers’ actions -- and the fear of government printing presses gone wild -- have brought about at least one unintended -- and unwelcome -- consequence: steepening yield curves around the globe. In essence, that means longer-term financing has become costlier for borrowers.

Moreover, while some might argue that wide spreads tend to benefit firms that borrow short and lend long (e.g., banks), history has shown that they are big losers in a curve-steepening environment. In part, that is because many of the assets they hold (e.g., bonds) lose value when longer-term interest rates are trending higher (because prices move inversely to rates). In other words, it's not just the absolute level of the spread that matters -- the direction and speed of the change in spreads is also important.

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

[Roland99]

12. Ah...who pays attention to silly ol' history anyway...

Morning, ozy (and SMW friends)

I'm back in business (so to speak). Well enough to head back to work. At least I have my birthday dinner with my kiddos to look forward to tonight. :)

[ozymandius]

17. Good Morning and Happy Birthday!

:donut: :donut: :donut:

:party: :party: :party:

Congratulations on feeling better! Have a wonderful day.

:hi:

[Demeter]

23. Many Happy Returns, Roland!

[UpInArms]

27. hope you have the best birthday ever, Roland!

:grouphug:

[54anickel]

34. Have a great day Roland!!!

[MadinMo]

38. Have a wonderful birthday, Roland!

:party: :party:

[Roland99]

43. Thanks everyone! And for the next 365 days, I will be....

The Answer to Life, the Universe, and Everything.


mua ha ha ha ha ha ha!!


(assuming everyone has heard of The Hitchhiker's Guide to the Galaxy) ;)

[TalkingDog]

69. So long. And thanks for all the fish!

happy day!

Enjoy.

[Hugin]

48. Happy Birthday!

:party:

[antigop]

59. Happy birthday, Roland99! n/t

[Roland99]

13. dupe

[AnneD]

73. Morning Marketeers......

:donut: and lurkers. Nothing can take the starch out of your shirts-or make you feel older than kids...esp teenage kids, whether it is calculating your age by decades or century.

OK I have a few rhetorical questions for SWT.

If it is so hard to find bullion any where-why is the price low and dropping. Doesn't that fly in the face of supply and demand?

Why all this confusion about dropping oil prices-it seems like a breather for the middle class, why is this so bad for the consumer economy if it benefits the consumer?

Who is going to finally break the news to McCain that he lost the election 2 weeks ago?

Who's going to tell Roland99 that you can't celebrate on the thread unless you bring enough cake or beer for everyone?

Happy hunting and watch out for the bears.

[Dr.Phool]

74. I think all of those questions, and more, will be answered on,

The next episode of "Soap"!

I couldn't resist. I just got some DVD's with every episode.

[AnneD]

77. I was a fan of

Fernwood Tonight.;)

[Roland99]

80. oops!!

How's that? :)

[Karenina]

93. This one's for you, Roland99!

:toast: to a fellow Libran!

[ozymandius]

2. Today's Reports

08:30 Building Permits Sep
Briefing.com 845K
Consensus 840K
Prior 854K

08:30 Housing Starts Sep
Briefing.com 880K
Consensus 870K
Prior 895K

10:00 Mich Sentiment-Prel. Oct
Briefing.com 68.0
Consensus 65.0
Prior 70.3

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

[UpInArms]

37. Sept. single-family permits down 12% to 26-year low - "worse than expected"

01. U.S. Sept. housing starts worse than expected
8:30 AM ET, Oct 17, 2008

02. U.S. Sept. single-family permits down 12% to 26-year low
8:30 AM ET, Oct 17, 2008

03. U.S. single-family building permits down 39% in past year
8:30 AM ET, Oct 17, 2008

04. U.S. Sept. building permits fall 8% to 786,000, 27-year low
8:30 AM ET, Oct 17, 2008

05. U.S. Sept. housing starts fall 6% to 817,000, 17-year low
8:30 AM ET, Oct 17, 2008

where in the hell do these people keep their brains? up their arses? why is this "worse than expected"?

:wtf:

[UpInArms]

39. Building permits drop 8% to a 27-year low, government data show

http://www.marketwatch.com/news/story/economic-report-housing-starts-fall/story.aspx?guid=%7B39882B51%2D2A71%2D4E8D%2D9599%2DD62A8CCABE10%7D&dist=hplatest

WASHINGTON (MarketWatch) - Construction of new homes dwindled to a 17-year low in September as home builders sought to reduce the number of unsold homes in an elusive quest to find the bottom of the historic housing collapse.

Housing starts fell 6.3% in September to a seasonally adjusted annual rate of 817,000, the lowest since January 1991, the Commerce Department estimated Friday. Starts of single-family homes tumbled 12% to 544,000, the lowest since February 1982.

Housing starts were also revised lower in July and August. Starts in August were revised down to 872,000 from 895,000.

The September estimates were much worse than the 3% decline to an annual rate of 870,000 that was expected by economists surveyed by MarketWatch.

Building permits, which are less volatile than the starts data, fell 8.3% to 786,000, a 27-year low. Permits for single-family houses fell 3.8% to 532,000, the lowest in 26 years.

Few economists expect to see a quick end to the housing recession. "We continue to believe that new homebuilding will decline another 15% over the course of the next year," said Morgan Stanley economist David Greenlaw ahead of the report.

...more...

[Warpy]

67. Supply siders still haven't figured it out!

They think they can suppress the demand side in order to fatten the supply side and still have the economic equation work out.

I suppose they think the demand will always be there, no matter what. Well, the will might be there--everybody wants a house and toys--but the means have to be there to act on that will or the whole economy goes kaput.

The only question is how bad it will have to get before the awful truth finally dawns on them, that their economic dogma will never work for more than a decade or two and depends entirely on putting the greatest number of people under the greatest burden of debt.

Debt, as usual, has crashed the economy.

[UpInArms]

55. Consumer sentiment plunges in October to 57.5

http://www.marketwatch.com/news/story/consumer-sentiment-drops-october/story.aspx?guid=%7B4C36F666%2D33BF%2D4233%2DB6D0%2D057E8D029FAB%7D&dist=hplatest

WASHINGTON (MarketWatch) -- In the midst of global efforts to shore up markets and economies, U.S. consumer sentiment dropped in October, according to a media report on the University of Michigan/Reuters index released Friday. The index fell to 57.5 in October, compared with a reading of 70.3 in late September. Economists surveyed by MarketWatch were expecting an October result of 64.5.

[Roland99]

58. VERY interesting. People *are* paying attention to something besides gas prices

If you look back over time, you'll see a nice corroboration between gas prices and the consumer confidence index.

I've been feeling it in my gut lately, too, that there is a sea change afoot.

[ozymandius]

3. Oil jumps on expectation recession fears overblown (bwahahahaha)

SINGAPORE – Oil prices jumped above $72 a barrel Friday in Asia from a 14-month low as investors bet fears that a severe global recession will devastate crude demand may be overblown.

Oil has fallen by about half since reaching a record $147.27 on July 11.

.....

Light, sweet crude for November delivery was up $2.80 to $72.65 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract dropped overnight $4.69 to settle at $69.85, the lowest settlement price since Aug. 23, 2007.

.....

While U.S. energy supplies have been swelling because of falling demand, they've also grown as Gulf Coast energy installations continue to increase production after shutdowns caused by Hurricanes Ike and Gustav.

.....

In other Nymex trading, heating oil futures rose 7.17 cents to $2.16 a gallon, while gasoline prices gained 6.80 cents to $1.69 a gallon. Natural gas for November delivery jumped 23 cents to $6.93 per 1,000 cubic feet.

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

---

Either oil is being used as a hedge or some people just cannot read the damn data.

[ozymandius]

4. Piehole Alert: Bush to give pep talk to anxious country Friday

WASHINGTON – Wild gyrations on Wall Street, a loss of confidence in the U.S. banking system and worries the economy will be weak for some time are raising Americans' anxiety level.

Against this backdrop, President Bush on Friday was to give the nation a more detailed explanation of what the government is doing to battle the worst financial crisis in more than a half-century.

Despite a flurry of radical actions by the Bush administration and the Federal Reserve, banks in the United States and abroad are still wary of lending money to each other and to their customers. The credit clog is depriving the wheezing U.S. economy of oxygen.

.....

White House officials said Bush didn't intend to put forward any new policy actions. The president was delivering his address at the U.S. Chamber of Commerce headquarters across from the White House.

http://news.yahoo.com/s/ap/20081017/ap_on_bi_ge/financial_meltdown

[Hissyspit]

14. Oh, shit, there goes the Dow again.

Great fun to watch it drop 10 points for every word he speaks...

[ozymandius]

5. Banks borrow record $437.5 billion per day from Fed

NEW YORK (Reuters) – Financial institutions ran to their lender of last resort for record amounts of cash in the latest week, under extreme pressure from the worst global financial crisis in a generation, Federal Reserve data showed on Thursday.

Banks and dealers' overall direct borrowings from the Fed averaged a record $437.53 billion per day in the week ended October 15, topping the previous week's $420.16 billion per day.

.....

Primary credit discount window borrowings averaged a record $99.66 billion per day in the latest week, up from $75.0 billion per day the previous week.

Primary dealer and other broker dealer borrowings were $133.87 billion as of October 15, versus $122.94 billion on October 8.

http://news.yahoo.com/s/nm/20081016/bs_nm/us_usa_fed_discount

[Demeter]

24. How Long Can This Go On?

Is this the kind of loan that gets repaid in 24 hours, or long term?

[54anickel]

Isn't that nearly 10 times what they borrowed after 9-11? I remember reading

I remember reading somewhere that shortly after 9-11 the banks hit the discount window for something like $45 billion and that $45 billion was 200 times the daily average of the previous either week or month. Sort of gives that $437.5 billion a new perspective - that's a helluvalotamoola!!!!

[nolabels]

62. So in other words or numbers they are borrowing ONE THOUSAND TIMES as much............

as they were before 9/11. And all the people who call us people out that are pointing to 9/11 as the fulcrum point need to wake up. It was like the introduction of cancer on everything as it pertains to the * administration and what it has brought.

[ozymandius]

6. World markets mixed after Wall Street rebound

HONG KONG – World stock markets were mixed Friday after Wall Street rebounded strongly overnight, with Japanese shares recovering from a historic fall in the previous session.

Tokyo's Nikkei 225 stock average advanced 235.27 points, or 2.78 percent, at 8,693.82. The index was still far from recouping Thursday's 11.4 percent loss — its biggest one-day percentage drop since the stock market crash of October 1987.

....

Shanghai's index rose for the first time in a week. But Hong Kong's Hang Seng index dropped over 4 percent to 14,554.21, its lowest level in almost three years as selling accelerated late in the day after banks said they would help investors in Lehman Brothers-backed bonds recouped some of their money. Australia, Singapore and South Korea also closed lower.

European stocks fared better in early trading as Britain, German and French indices gained more than 2 percent. Russian stocks lost ground.

http://news.yahoo.com/s/ap/20081017/ap_on_bi_ge/world_markets

[ozymandius]

7. Industrial production falls by most since late `74 (worth repeating)

WASHINGTON – Big industry production plunged in September by the most since late 1974, largely reflecting fallout from hurricanes Gustav and Ike.

The Federal Reserve reported Thursday that production at the nation's factories, mines and utilities plunged 2.8 percent last month, on top of a 1 percent drop in August.

The Fed estimated that disruptions related to the hurricanes accounted for about 2.25 percentage points of the total drop in industrial production in September. In addition, a strike affecting the commercial aircraft industry also was a factor in the poor showing, accounting for around a half percentage point of the overall decline, the Fed said.

The drop in industrial production in September was the biggest since December 1974, when output fell 3.5 percent.

http://news.yahoo.com/s/ap/20081016/ap_on_bi_go_ec_fi/industrial_production

[fasttense]

22. America seems to have become the most underdeveloped

developed nation in the world. Welcome to bush world.

[ozymandius]

8. Dollar Libor Poised for Weekly Decline on Central Bank Lending

Oct. 17 (Bloomberg) -- The cost of borrowing dollars in London may fall, rounding off the first weekly drop since July, after central banks around the world pumped unprecedented amounts of cash into money markets and governments backed loans.

The three-month dollar rate will decline about 10 basis points to 4.40 percent today, according to David Buik, a market analyst in London at interdealer broker BGC Partners Inc. It was 4.82 percent a week ago. The euro interbank offered rate, or Euribor, for three-month loans slid for a sixth day, easing 4 basis points to 5.05 percent today, the European Banking Federation said. It has dropped 33 basis points this week.

....

The spread between three-month dollar Libor and the Fed rate was 300 basis points, or 3 percentage pints, yesterday, up from 108 basis points a month ago. At the start of the year, the spread was 43 basis points.

....

The Libor-OIS spread, which measures the difference between the three-month dollar rate and the overnight indexed swap rate, was at 339 basis points today, up from 24 basis points on Jan. 24. The average was 8 basis points in the 12 months to July 31, 2007, before the credit squeeze began.

http://www.bloomberg.com/apps/news?pid=20601085&sid=atfSIlD3COF4&refer=europe

[ozymandius]

9. Fed to Meet With Credit-Default Industry on Clearinghouse Today

Oct. 17 (Bloomberg) -- The Federal Reserve Bank of New York plans a third meeting today with the credit-default swap industry, as it presses for a central clearinghouse for the $55 trillion market, people with knowledge of the talks said.

Fed officials summoned dealers and exchanges to the gathering after meeting twice last week, according to the people, who declined to be named because the discussions are confidential.

The Fed stepped up pressure on the industry to create a central counterparty that would absorb losses should a market maker fail after last month's bankruptcy of Lehman Brothers Holdings Inc. Because the contracts are traded bilaterally between banks, hedge funds, insurance companies and other institutional investors, each party faces the risk of losses should their trading partners default.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aa6GE5kNUVgk&refer=exclusive

[ozymandius]

10. `Armageddon' Loan, Bond Prices Keep Debt Investors on Sidelines

Oct. 17 (Bloomberg) -- Credit markets have fallen so far that they are providing a ``once in a lifetime opportunity,'' and investors are still selling.

Prices of loans rated below investment grade declined to a record low 66.1 cents on the dollar, virtually guaranteeing investors get their money back, based on historical recovery rates, according to data compiled by Standard & Poor's. Yields on corporate bonds show investors expect 5.6 percent of the market will go bust, the highest default rate since the Great Depression, according to Christopher Garman, chief executive officer of debt research firm Garman Research LLC in Orinda, California.

....

``There has been widespread liquidation of assets that has nothing to do with fundamentals,'' said Scott D'Orsi, a partner at Boston-based Feingold O'Keeffe Capital, a hedge fund which has $1.3 billion in assets. ``Investors in bank debt are being presented with a vast number of extraordinary opportunities; opportunities that I would characterize as once in a lifetime.''

The selling is being compounded by hedge funds and mutual funds dumping holdings to meet redemptions, which may push prices even lower, according to analysts at UBS AG.

....

Corporate bond prices plunged to 79.9 cents on the dollar on average from 94 cents at the end of August and 99 cents at the end of 2007, according to index data compiled by New York-based Merrill Lynch & Co.

http://www.bloomberg.com/apps/news?pid=20601109&refer=exclusive&sid=aoe_62WgtVdU

---

Robbien posted this piece yesterday evening to the SMW thread concerning hedge fund/mutual fund redemptions:

If hedge funds have already raised enough cash, that could reduce some of the pressure on these types of shares. However, the overall stock market may be already suffering from a new source of selling, TrimTabs added.
Mutual funds have been getting roughly $5 billion a day in redemptions in October because retail investors are spooked by the financial crisis, Biderman said.

Several times this month the stock market has slumped sharply during the final hour of trading. That may be because mutual fund managers are getting a summary of redemptions each afternoon and have to sell quickly to return investors' money by the next morning, Biderman explained.

"The problem with the market is not hedge funds anymore," he added. "Forced liquidations appear to be coming from mutual funds."

When forced selling by mutual funds stops, that may help the stock market stabilize. But such liquidations could last through the end of this year, partly because people may redeem losing mutual fund investments for tax purposes, Biderman explained.

http://www.marketwatch.com/news/story/hedge-funds-forced-hedge-fund/story.aspx?guid={2DCFF9D1-A772-4583-A4D8-8EDEF7BDF138}&dist=hplatest

[ozymandius]

11. Two Banks May Face Sanctions in Hong Kong Lehman Probe

Two banks were referred for possible sanctions Friday in Hong Kong as part of an investigation into the sales of structured products backed by Lehman Brothers Holdings, and institutions that sold these products sought to resolve the scandal by agreeing to buy them back at market value.

The Hong Kong Monetary Authority said Friday it had referred 24 cases --involving two banks that it declined to identify -- to the Securities and Futures Commission regarding allegations of misconduct and "mis-selling" against the lenders, the agency said in a statement.

Thousands of Hong Kong investors claim they bought the so-called "mini-bonds" after being assured by banks the products were safe, only to see the value plunge after former Wall Street powerhouse Lehman declared bankruptcy last month. The mini-bond collapse sparked street protests by investors, some of whom say they lost substantial portions of their life's savings, and drew charges from lawmakers that Hong Kong regulators had failed to do their jobs.

http://online.wsj.com/article/SB122422450151944107.html?mod=googlenews_wsj

[Roland99]

15. 6:02am futures look painful

DJIA INDEX 8,704.00 -262.00
S&P 500 913.60 -27.40
NASDAQ 100 1,273.50 -49.50

[tom_paine]

16. Study the movements of the stock market during and after the 1929 crash.

You might be surprised how it differs from the simplistic nonsense we were taught as "history" in school.

Then get ready to use that knowledge of history as the One-Eyed Man in the Kingdom of the Blind.

Because all everyone else knows is that stupid simplistic amnd incorrect nonsense we were taught in school as history.

The data:

http://www.data360.org/dsg.aspx?Data_Set_Group_Id=359

[Roland99]

20. Oh, this ride is going to be wild for some time.

VIX hit a record high yesterday.

[DemReadingDU]

36. Exactly, I tell my family that the lowest point of the market

The lowest didn't occur on October 29, 1929, but not until 1932.
http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929


And the market didn't recover for 25 years!

edit:
http://tinyurl.com/65m7b2


more charts
http://www.creditwritedowns.com/2008/06/chart-of-day-dow-1928-1932.html

[tom_paine]

54. Exactly. Which is why, like nearly all truly useful facts, nobody knows it.

Of who's benefit is it for the Amerikan Subject Populace to be so completely and thoroughly ignorant of history?

Whoever it is: Mission Accomplished.

[DemReadingDU]

60. and yet, they all ran to their professional financial planner

Who gave them the standard BS...Don't worry, the markets might go down, but they always come back up. If you're worried about the stock market, invest in bonds.

I can't get them to understand that just about everything is contaminated with worthless toxic crap.

aargh

[tom_paine]

84. Except in times of gross Bushie mismanagement, it is mostly true.

Such as the 1920-1933 period, and now the 2001-? period.

It's a tough one, because they have just pumped so many trillions of peasants' (insert currency here) into world markets.

One wonders how long the bullshit can keep afloat. I was stunned the first huge tremors took as long as Sept. 15th, 2008. I though it had to happen at least three years before that.

Never underestimate the power of human denial combined with the Bushie con-men's super-cailbrated public-relations, marketing and propaganda program.

[AnneD]

75. I have brought this up...

before on the board. It didn't 'happen' on one day. It kept sliding down a long greased pole with an occasional boost up. Of course because the governments are doing different intervention-there will be variations, but I am thinking the results may be close to the same.

[ozymandius]

18. Moderating a bit - but still hurt

S&P 500 -19.10 921.90 10/17 6:21am

NASDAQ -34.00 1289.00 10/17 6:21am

Dow Jones -166.00 8800.00 10/17 6:18am

[ozymandius]

19. Have fun at the Casino.

I'm away to work. Back this afternoon.

:hi:

[Pale Blue Dot]

21. High Desert Federal Credit Union Placed Into Conservatorship

October 16, 2008, Alexandria, Va. -- The National Credit Union Administration (NCUA) has assumed control of the operations of High Desert Federal Credit Union headquartered in Apple Valley, California. The Federal Credit Union Act authorizes the NCUA Board to appoint itself conservator when necessary to conserve the assets of a federally insured credit union, protect members’ interests or protect the National Credit Union Share Insurance Fund.

Service continues uninterrupted at High Desert Federal Credit Union and members are free to make deposits, access funds, make loan payments and use share drafts. While the credit union was placed into conservatorship because of a declining financial condition, the decision to conserve a credit union enables the institution to continue normal operations with expert management in place.

Member accounts are insured to at least $250,000 while IRA and KEOGH retirement accounts are separately insured up to $250,000 under coverage provided by the National Credit Union Share Insurance Fund, a federal fund backed by the full faith and credit of the U.S. Government. Members with questions about their insurance coverage can contact NCUA’s Consumer Assistance Center at 800-755-1030 Monday through Friday between 8:00 a.m. and 6:00 p.m. (EDT).

High Desert Federal Credit Union was originally chartered in 1951 and today serves those who live, work, or worship in San Bernardino County, California. The credit union has $149 million in assets and serves over 13,000 members.

http://www.ncua.gov/news/press_releases/2008/MR08-1016.htm

I believe that's #14 this year.

[UpInArms]

25. dollar watch

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

Last trade 82.592 Change +0.341 (+0.44%)

Declining U.S. Housing Starts and Confidence Supports Bullish Euro Technicals

http://www.dailyfx.com/story/special_report/special_reports/Declining_U_S__Housing_Starts_and_1224224297166.html

The fundamental data due to cross the wires today for the U.S. will contribute to the current pessimistic outlook as housing starts and consumer confidence are expected to decline.



Fundamental Outlook

The fundamental data due to cross the wires today for the U.S. will contribute to the current pessimistic outlook as housing starts and consumer confidence are expected to decline. The housing slump is the root of the current ills and expectations are that new construction fell to its lowest level on record. Meanwhile, consumer confidence is expected to have declined after three straight months of improvement as the credit crisis has weighed on sentiment. The data could weigh on the dollar which would support the Euro technical outlook that is calling for the EURUSD to push higher towards 1.40. However, if the data sparks risk aversion it could lead to bullish dollar sentiment and more losses for the pair.

...more...

Euro Trades Heavy as Euro-Zone Deficit Widens, Will Risk Winds Dictate Dollar's Direction?

http://www.dailyfx.com/story/bio1/Euro_Trades_Heavy_as_Euro_Zone_1224238160018.html

The Euro fell below 1.3420 on the news that the region’s trade deficit widened more than expected to -9.3 billion in August from -2.0 billion the month prior. Exports fell to 117.2 billion from 146.6 billion as global demand has plunged, signaling that a global recession may already be underway. Despite the news the Euro was relatively quiet compared to recent trading sessions, as the hysteria generated by the credit crisis has started to dissipate which could lead to fundamental data having more of an impact on price action going forward.

The Tertiary index in Japan fell to 1.4% from 0.9% as consumers have curbed spending in the wake of the current financial crisis. As the evidence mounts that a global recession is underway, the calls for another coordinated rate cut are growing. Indeed, the Credit Suisse overnight index swaps are calling for another 132 bps of cuts from the ECB. Troubles in the Euro-Zone continue to spread as Hungary and the Ukraine are experiencing liquidity issues and have approached international institutions for help.

The Pound saw whipsaw action throughout the overnight sessions, as it fell to 1.7250 before bouncing higher. The initial weakness was driven by the declining interest rate expectations as the BoE is expected to cut rates t their next policy meeting. Credit Suisse overnight index swaps are calling for another 137 bps in rate cuts and expectations are increasing that we may see the central bank have to lower rates to as low as %1.00. Considering that the U.K. has lagged the U.S. since the beginning of the subprime crisis, the BoE may have to follow the Fed’s course of monetary policy and embark on an extended easing policy.

The U.S. economic calendar will prevent event risk in the form of housing starts and consumer confidence. The root of the current credit crisis is the ongoing housing slump and the expectations that housing starts fell to 875,000 from 895,000, which would be the lowest reading since 1991. Meanwhile, economists are predicting the University of Michigan consumer confidence metric for October fell to 65.0 from 70.3 as the current credit crisis has weighed on sentiment. Americans outlook had grown more optimistic the past three months on easing oil prices and the perception that the financial problems were dissipating. The heighten levels of the crisis and the current pessimistic outlook for the economy may lead to consumers curbing their spending going forward which will extend the current economic downturn. The dour fundamental data may weigh on the dollar. However, if the news sparks risk aversion we may see flows seek the safe haven of the greenback and extend its recent gains.

...more...

[UpInArms]

26. West urges financial overhaul, Asia and E.Europe hit

http://www.reuters.com/article/businessNews/idUSTRE49E2E720081017?feedType=RSS&feedName=businessNews&sp=true

LONDON (Reuters) - World leaders demanded tougher banking rules on Friday to protect economies from crisis before a meeting of U.S. and French presidents that officials said would explore ways to reform a crumbling financial system.

Not only is the worst financial crisis in 80 years helping push the West into recession, economies in eastern Europe are suffering, turning to foreign lenders to bolster their financial systems, while Asian nations struggle for their own solutions.

Ukraine said the International Monetary Fund was prepared to give it $14 billion in credit, while Hungary slashed its growth forecast after agreeing a 5 billion euro deal with the European Central Bank to keep euros flowing through its banking system.

To prevent any repeat of the crisis, French President Nicolas Sarkozy has said he would raise the prospect of a global summit to deal with regulatory issues at a meeting with U.S. President George W. Bush on Saturday.

He said the summit should make decisions on transparency, global regulatory standards, cross-border supervision and an early warning system.

...more...

[UpInArms]

28. AIG to claw back executive payments, reform ways

http://www.reuters.com/article/businessNews/idUSTRE49F9OA20081016?feedType=RSS&feedName=businessNews&sp=true

NEW YORK (Reuters) - American International Group, the insurance giant that drew fire for executive "golden parachutes" and an ill-timed junket even as it receives a massive taxpayer bailout, has agreed to mend its ways.

AIG (AIG.N: Quote, Profile, Research, Stock Buzz) promised to recover executive payments and other compensation, cancel perks and institute reforms one day after New York Attorney General Andrew Cuomo threatened legal action over its controversial spending.

Asked whether his office was investigating other firms' executive compensation, Cuomo said "Yes" but added, "I can't say at this time" which companies. He spoke on a telephone conference call with reporters.

AIG will provide a full accounting of executive compensation and help recover payments that Cuomo contends violated state law, according to a joint statement from the attorney general's office and AIG, issued after Cuomo met with AIG's new chief executive, Edward Liddy, on Thursday.

Those payments include "all forms of compensation paid to former CEO Martin Sullivan and the former head of the (AIG) Financial Products Unit, Joseph Cassano," the statement said.

Cuomo had objected to "extravagant" payments to executives who ran the company into near-collapse, including a $5 million cash bonus and $15 million "golden parachute" to Sullivan earlier this year, as well as a $34 million bonus for Cassano, whose unit generated the bulk of AIG's losses.

...more...

when they go after Hank Greenberg bootie, I'll believe in the honesty of their "reform"

[Dr.Phool]

33. My crystal ball see's a hooker in his future.

[UpInArms]

29. Bond insurers may ask Treasury to buy risky assets: report

http://www.marketwatch.com/news/story/bond-insurers-may-ask-treasury/story.aspx?guid=%7BD61F892C%2D12E7%2D4932%2D8136%2DFF688F549E1C%7D&dist=hplatest

LONDON (MarketWatch) -- Bond insurers including Ambac Financial Group Inc. (ABK: 2.66, +0.86, +47.8%) are working on a plan to send to the the U.S. Treasury Department that would allow the firms to sell certain risky assets to the government, according to a Bloomberg report late Thursday. The report, which cited Ambac CEO Michael Callen, said the firms could put forward a proposal in the coming week that allow them to guarantee some assets with government backing. Callen said he won't be asking the government to take a stake in Ambac, the report added.

[54anickel]

46. Huh? "He won't be asking the gov't to take a stake in Ambac"...so wtf are we buying here?

[UpInArms]

49. crap, 54anickel, just worthless paper crap

so that they can stuff the treasury vault with rat fodder for the next 100 years

[54anickel]

64. Well then, I guess Dubya is gonna need to get another file cabinet.....

http://www.msnbc.msn.com/id/7393649/

Bush: Social Security trust fund ‘just IOUs’
President says, ‘There is no trust fund’

snip>

“A lot of people in America think there is a trust — that we take your money in payroll taxes and then we hold it for you and then when you retire, we give it back to you,” Bush said in a speech at the University of West Virginia at Parkersburg.

“But that’s not the way it works,” Bush said. “There is no trust ‘fund’ — just IOUs that I saw firsthand,” Bush said.

Earlier, Susan Chapman of the Office of Public Debt Accounting had shown Bush an ivory four-drawer filing cabinet with numeric locks. “This is it,” she said.

“This is what exists,” Bush said, illustrating his point that the promise of future Social Security benefits are simply stashed in a file.

Chapman opened the second drawer and pulled out a white notebook filled with pseudo Treasury securities — pieces of paper that offer physical evidence of $1.7 trillion in treasury bonds that make up the trust fund.

more...

[UpInArms]

30. Forced hedge fund selling crushes some stocks

http://www.marketwatch.com/news/story/forced-hedge-fund-selling-knocks/story.aspx?guid=%7BD7CFD359%2DB72F%2D42B6%2DB3EA%2D0D3FDBEFDC67%7D&dist=hplatest

SAN FRANCISCO (MarketWatch) -- Steel Dynamics Inc. has lost more than half its market value in the past month, despite quarterly results that showed the company in ruddy health.

Late Wednesday, the Fort Wayne, Ind.-based steel company (STLD: 8.99, +1.66, +22.7%) reported a 92% surge in third-quarter net income and revenue that more than doubled. The results fell short of analyst expectations, but that wasn't enough to explain the recent collapse in the company's shares, according to Chief Executive Keith Busse.

"It is simply beyond comprehension why our share price, which is supposed to reflect rational thinking by rational people, is where it is today," Busse said. "Those who have literally dumped their shares into a grossly oversold market have made some very poor investment decisions."

"A lot of that has to do with the hedge funds," he added during a conference call with analysts on Thursday. "They've driven this thing to almost a silly level where I think yesterday we were below our actual book value."

Steel Dynamics may be one of many companies that have seen their share price slump in the past month as the $2 trillion hedge fund industry suffers its worst losses in at least a decade. There are now early signs that such pressure may be easing. See related story.

Steel makers and other commodities companies have been popular holdings for many hedge funds as they bet on a boom in demand from fast-developing countries like China and India.

But hedge fund investors have been asking for their money back in recent weeks. That's forced some managers to unwind positions to raise cash for redemptions at the end of this year.

...more...

[UpInArms]

31. Year-end redemption requests loom over industry

http://www.marketwatch.com/News/Story/year-end-redemption-requests-loom-over/story.aspx?guid=%7BC1F1DF32%2D7B00%2D4C8B%2DBA30%2D82A37D243614%7D

SAN FRANCISCO (MarketWatch) -- The $2 trillion hedge fund industry is bracing for a wave of investor redemptions after recent losses, investors and analysts said Monday.

Many hedge fund investors can withdraw money on Dec. 31. Some funds require that redemption requests be submitted 90 days ahead of time. That means requests have to be in by Tuesday. Other funds require 45 days notice, so there may be another round of withdrawal requests toward the middle of November.

Some managers have already been selling positions to raise cash to return money to investors. However, if redemption requests come in higher than expected, there could be another wave of selling and market disruption during the fourth quarter.

"The major impact is coming," said Sol Waksman, president of BarclayHedge, which tracks assets and performance in the industry.

"If managers anticipate the amount of redemptions correctly, it won't be a problem," he added. "But a lot depends on performance in the last quarter."
The industry is on course for its worst year of performance in at least a decade. If hedge fund returns recover, investors may become more patient and cancel some of their redemption requests before Dec. 31. But if losses continue, redemptions may be higher than expected.

"I suspect this thing is not yet over," Waksman warned.

...more...

[UpInArms]

32. The $58 Trillion Elephant in the Room

The roots of this year’s financial crisis go back to a small team of bankers at J.P. Morgan in New York. Now, their invention—credit derivatives—has helped bring down Wall Street and has left Morgan with its biggest exposure of all.

http://www.portfolio.com/views/columns/wall-street/2008/10/15/Credit-Derivatives-Role-in-Crash

At a time when the reputation of bankers has been shredded, Bill Demchak is a throwback. The day I meet him, the financial world is once again poised on the brink of destruction. The Dow Jones Industrial Average lost 358 points the day before and is already down another 150 this morning. Yet the green-eyed Demchak, in pleated khakis hiked up unfashionably high onhis waist, seems preternaturally calm—especially for a man who, unwittingly, has had a hand in bringing Wall Street to its knees.

Demchak, now the vice chairman of PNC Financial in Pittsburgh, returned to his hometown in 2002 to help rescue the bank after it became mired in an accounting scandal. Under Demchak and the rest of its new management team, PNC has avoided most of the terrible mistakes of its Wall Street peers by spurning bad mortgages, dubious off-balance-sheet deals, and questionable corporate loans. It’s now one of the best-performing banks in the country.

But before he had this life, Demchak had another, as the leader of a small group at J.P. Morgan in New York that pioneered the kind of financial instruments that eventually led to this autumn’s wreckage on Wall Street. The J.P. Morgan team created and then industrialized credit derivatives, which have enveloped the global markets, growing to a mind-numbing $58 trillion worth of credit contracts. They have spread and morphed in ways that Demchak never intended but always feared.

Long celebrated as a way for banks to diffuse their risks, the credit derivatives invented by Demchak’s team have instead multiplied them. The new credit vehicles encouraged banks and other financial firms to take on riskier loans than they should have; helped increase leverage in the global financial system; and exposed a much wider array of financial firms to the risk of default. (View an interactive timeline of derivatives.)

Credit derivatives aren’t, of course, solely to blame for the pandemic that has helped bring down Wall Street. They didn’t single-handedly force Bear Stearns and Lehman Brothers to bulk up on toxic debt, dooming them to collapse. But they made the financial world more complex and more opaque. Ultimately, they have exacerbated the market panic, as financial firms and regulators have belatedly come to grips with the enormity of the problems. Merrill Lynch ultimately capitulated to a sale because investors had no confidence that the firm had a handle on what its problems were. When the federal government took over A.I.G. in September, it was largely because of the insurance behemoth’s exposure to credit-default swaps, a type of derivative that flourished in the wake of Demchak and his team’s creations. By mid-September, Treasury Secretary Hank Paulson was forced into proposing the largest bailout in U.S. history. Securities and Exchange Commission chairman Christopher Cox (S.E.C. No Evil, October) called for regulating credit derivatives.

Morgan’s derivatives project began in the wake of the Asian financial crisis in 1997 as an attempt to protect the bank from bad loans. Demchak’s innovations worked—for his bank. Morgan came to dominate this corner of the financial world while preserving a culture of prudence. Morgan—deemed to be so safe that it snagged two of the victims of the financial-system collapse, Bear Stearns and Washington Mutual—is still swimming in credit derivatives, far more than any other firm on Wall Street, though the bank says it’s hedged. As of the second quarter of 2008, the bank had written derivatives contracts backing credit valued at $10.2 trillion, roughly three-quarters the size of the U.S. economy.

...more...

[antigop]

35. Developing: Lehman execs reportedly subpoenaed

http://financialweek.com/apps/pbcs.dll/article?AID=/20081017/REG/810179993/1036

Prosecutors have subpoenaed a dozen executives of Lehman Brothers Holdings, including Chief Executive Dick Fuld, in connection with three grand jury probes investigating the fall of the investment bank, the New York Post reported.

Calls made to Lehman Brothers seeking comment were not immediately returned.

[UpInArms]

45. Ex-Lehman CEO Fuld, others get subpoenas in federal probes

http://www.marketwatch.com/news/story/ex-lehman-ceo-fuld-others-get/story.aspx?guid=%7BA9DB7660%2DCFB7%2D492A%2DA87F%2DB28505668B9C%7D&dist=hplatest

NEW YORK (MarketWatch) -- Federal authorities have subpoenaed former CEO and 11 other former Lehman Bros. Holdings (LEHMQ: 0.08, +0.00, +1.3%) executives in relation to three ongoing grand jury investigations into the firm's collapse, according to a New York Post report Friday. According to the report, investigators in the Southern and Eastern Districts of New York, and in the district of New Jersey, are leading the probes.

[Robbien]

63. The only thing the Feds are looking at is if the execs lied about health of Lehman

Sources say the nature of the investigation is whether Lehman executives knowingly made false comments about the health of Lehman before its collapse.

http://www.streetinsider.com/Insiders+Blog

Nothing about what frauds these guys are, just whether they lied to Wall Streeters.

What a joke of an investigation.

[UpInArms]

40. PIEHOLE ALERT: Bush says U.S. dealing with 'serious financial crisis'

01. Bush says U.S. dealing with 'serious financial crisis'
8:42 AM ET, Oct 17, 2008

[UpInArms]

41. Bush: going to take 'awhile' for credit to thaw

02. Bush: going to take 'awhile' for credit to thaw
8:46 AM ET, Oct 17, 2008

[UpInArms]

44. Dimson continues to spew crap

03. Bush confident economy will recover in 'long run'
8:59 AM ET, Oct 17, 2008

04. Bush: financial crisis not excuse to raise taxes
8:57 AM ET, Oct 17, 2008

05. Bush says U.S. must reform rules to avoid another crisis
8:56 AM ET, Oct 17, 2008

[antigop]

50. In the "long run" we are all dead --John Maynard Keynes n/t

[DemWynner]

72. Didn't we take away oversite

to let the free market do it's thing? The mentality of this administration makes me very upset. He will not change any rules that will make the people who made all of these bad choices take the fall for them.

I am so glad you remembered me! I have a faire for you! I forget how to upload images, but will figure it out soon.

[UpInArms]

76. Marale aka DemWynner, you have a

very special place in my heart

so glad you're back

:grouphug:

[DemWynner]

79. Thank you

:blush: :blush: :blush: :grouphug:
Here is the Faerie, I figured it out!

[Roland99]

53. You know what his continual speeches to defend the Bailout Bill remind me of?

His continual speeches back in 2003/2004 defending the invasion of Iraq.

It was late 2003 when I finally had a change of heart (and mind) and realized the Iraq invasion was ALL WRONG. It was the Propagandist's continued need to defend his actions that got me to thinking (and reading). I then found articles from the likes of Seymour Hersh and Lt. Col. Karen Kwiatowski that made me realize the error of my ways and to eventually turn my back completely to the Republican party.

I wonder what we'll come to find out about Bailout Bill over the coming months/years that will be just as revelatory. Esp. considering Paulson, who was SO constrained at 12:1 leveraging and fought for much higher ratios, is now in charge of helping to fix the problem he helped create.


Oh I fear this to be a long and worsening period. And it will be heaped on Obama's shoulders. 2012 will be an enormous task for him to get re-elected, imo.

[antigop]

57. Roland, I agree. The problems are so deep that we can't dig out in 4 years.

I'm not sure we can ever dig out in our lifetimes.

antigop (feeling very pessimistic today)

[Festivito]

42. Debt: 10/15/2008 10,326,055,380,264.10 (UP 31,650,490,862.70) (up again, 96% of report-avg)

Debt: 10/15/2008 10,326,055,380,264.10 (UP 31,650,490,862.70) (96.05% report-avg)
(This report is now automated except for this text. Each week there seems one day with low or even negative increase in debt. Today is back to being interesting again.)

= Held by the Public + Intragovernmental(FICA)
= 6,055,696,053,989.64 + 4,270,359,326,274.47
UP 31,172,400,421.20 + UP 478,090,441.44

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

ANALYSIS:
There were 21 reports in the last 30 days.
The average report for the last 21 reported increases in debt is 32,950,710,259.45.
The average day for the last 30 days would be 23,065,497,181.62.

There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 10 reports in 15 days of FY2009 averaging 30.13B$ per report, 20.09B$/day.

PROJECTION:
GWB** must relinquish the presidency in 97 days.
By that time the debt could be between 10.5 and 12.6T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
10/15/2008 10,326,055,380,264.10 GWB (UP 4,597,859,584,082.53 so far since Bush took office)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 301,330,483,351.70 so far.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) YESTERDAY'S POST LINK:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3546876&mesg_id=3546892

[Festivito]

100. Debt: 10/16/2008 10,331,139,000,845.90 (UP 5,083,620,581.80) (15.44% report-avg)

(Almost reasonable for a report.)

= Held by the Public + Intragovernmental(FICA)
= 6,060,010,376,937.96 + 4,271,128,623,907.96
UP 4,314,322,948.32 + UP 769,297,633.49

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

ANALYSIS:
There were 21 reports in the last 30 days.
The average for the last 21 reported increases in debt is 32,921,301,662.76.
The average for the last 30 days would be 23,044,911,163.93.

There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 11 reports in 16 days of FY2009 averaging 27.86B$ per report, 19.15B$/day.

PROJECTION:
GWB** must relinquish the presidency in 96 days.
By that time the debt could be between 10.5 and 12.5T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
10/16/2008 10,331,139,000,845.90 GWB (UP 4,602,943,204,664.33 so far since Bush took office)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 306,414,103,933.50 so far.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) YESTERDAY'S POST LINK:
http://www.democraticunderground.com/discuss/duboard.php?az=post&forum=102&topic_id=3548499&mesg_id=3548655

[Festivito]

106. Just trying to keep this in my recent posts for Monday. /nt

[Roland99]

47. 9:31am - YIKES!!

Dow 8,777.83 -201.43
Nasdaq 1,670.28 -47.43
S&P 500 928.47 -17.96
10-year 3.89% -0.05
Oil $70.67 $0.82
Gold $786.50 -$15.50

[antigop]

51. Recession-Plagued Nation Demands New Bubble To Invest In (satire)

http://www.theonion.com/content/news/recession_plagued_nation_demands

A panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest.

"What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future," said Thomas Jenkins, CFO of the Boston-area Jenkins Financial Group, a bubble-based investment firm. "We are in a crisis, and that crisis demands an unviable short-term solution."
...
Perhaps the new bubble could have something to do with watching movies on cell phones," said investment banker Greg Carlisle of the New York firm Carlisle, Shaloe & Graves. "Or, say, medicine, or shipping. Or clouds. The manner of bubble isn't important—just as long as it creates a hugely overvalued market based on nothing more than whimsical fantasy and saddled with the potential for a long-term accrual of debts that will never be paid back, thereby unleashing a ripple effect that will take nearly a decade to correct."
Enlarge Image The Next Bubble?

"The U.S. economy cannot survive on sound investments alone," Carlisle added.

Congress is currently considering an emergency economic-stimulus measure, tentatively called the Bubble Act, which would order the Federal Reserve to† begin encouraging massive private investment in some fantastical financial scheme in order to get the nation's false economy back on track.

[4dsc]

52. Is this the end of "hedge Fund" as we know it??

Anyone watch Kramer last night?? He was advising his listener that everyone should be investing in stock that pay a dividend which is no real surprise here..

But he claimed that with the crashing market and the outlook for the next 5 years that this would lead to the elimination of hedge funds.. Now I know very little about hedge fund and would like some responses from those in the know here.. What do you think about his comments?

[antigop]

56. Kevin Phillips, May,2008: Bubble and Bail

This article appeared in May in The American Prospect. I thought I would post it for DU'ers that may not have seen it....

http://www.prospect.org/cs/articles?article=bubble_and_bail
For most of the 20th century, America manufactured things. For the past 30 years, though, it has chiefly manufactured debt. Here's how Wall Street, with the aid of both political parties, gravely damaged the economy.

We're not just looking at an ordinary recession. Since the 1970s, the United States has redefined itself from a manufacturing nation to a financial economy built on debt, leverage, and a considerable ratio of speculation. Both political parties have been complicit in this, and the downturn now beginning will be unusual and potentially tragic.
...
Without trying to frame a specific list of reforms, which I do not have, the new outline of economic- and financial-sector failures is somewhat easier to identify. Between the 1980s and the present, the United States moved in three unfortunate directions: first, the adoption of public and private debt as both an economic nostrum and culture; second, the pursuit of a neo-mercantilist policy (bailouts and other policy biases) that all but anointed finance (rather than high-value-added manufacturing) as the Washington-favored U.S. sector; and third, abetting an economic realignment through which manufacturing fell from some 25 percent of GDP in the 1970s to 12 percent in 2006, while financial services jumped from 12 percent in the 1970s to between 20 percent and 21 percent during the 2003-2006 period.

Was this three-fold change in direction ever debated in the public square or in the halls of Congress? Of course not. Most conservatives and many liberals in Washington were busy chanting a simplistic mantra -- government can't be allowed to pick winners -- while the Treasury Department's and Federal Reserve Board's favoritism toward and bailouts of finance amounted to essentially that.

Over the last quarter-century, under Republican and Democratic administrations alike, the two major tools of this transformation were debt and the socialization of risk (but not of profit). The second, of course, abetted the first. When reckless expansion of consumer, corporate, or financial debt would go sour, the government served up a bailout to help the financial sector come back, fatter and cockier than ever. To suggest "bubble and bail" as a description of U.S. economic policy over the past quarter-century is inelegant but by no means inaccurate. Obviously, this is not the way to manage a nation passing the peak of its global power and very much at risk from a reckless financial endgame.

[snot]

61. Ban on short selling?

I had a note that it expires today or so, not sure where that came from . . .

[54anickel]

65. It was going to expire at 11:59 pm tonight. Looks like it's extended until next year

http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20081016/REG/810169987

Large institutional investors will have to continue to disclose some short sales and positions under an interim temporary rule issued last night by the Securities and Exchange Commission.

“We are concerned by sudden and excessive fluctuation of securities prices and disruptions in the fair and orderly functioning of the securities markets,” the SEC said in its order.

“We are concerned about possible unnecessary or artificial price movements that may be based on unfounded rumors and may be exacerbated by short selling,” the order stated.

The interim order is effective from Oct. 18 until Aug. 1, 2009, and the SEC will take comments from the public over the next 60 days.

more...

[snot]

66. thanks.

[MattSh]

85. The ban on short selling expired last week...

Temporary emergency short selling ban to end

The Securities and Exchange Commission has announced its ban on short-selling of financial stocks will expire at 11:59 p.m. ET on Wednesday, October 8. The SEC said it would lift the ban three business days after the enactment of the $700 billion Emergency Economic Stabilization Act, which was signed into law by President George W. Bush on October 3, 2008.

Overview of previous actions

On September 19, the Securities and Exchange Commission issued an emergency order temporarily banning the short selling of 799 financial stocks. The order was subsequently amended on September 21. The revised order allowed each national securities exchange (e.g. NYSE, AMEX, NASDAQ) to include additional financial companies to the list of stocks affected by the ban. Company categories included banks, savings associations, broker-dealers, investment advisors, and insurance companies. For information about the specific companies that were added to the short selling ban, visit the web sites for each exchange.

When was this change effective?

It was effective immediately.

Which stocks were included?

The Commission’s temporary ban on short selling applied to the securities of those financial companies added to the list by the exchanges, as well as the 799 financial companies originally included in the ban September 19. For more information about the SEC’s amendment, go to http://www.sec.gov/news/press/2008/2008-218.htm.

What happened to my open short positions?

This order only applied to the creation of new short positions.

more http://www.tdameritrade.com/forms/TDA8147.pdf

The article you mention above is about reporting any short sale over $10 million.

[54anickel]

89. Thanks for the correction. I knew the original ban couldn't go beyond the 17th, but missed

the line about "the third business day after enactment of the bailout". It's been a bit confusing to say the least. Here's one of the original articles on the extension from Oct 1st.

http://ap.google.com/article/ALeqM5j1qYpENSJmaTaTiLWSUFodScpFTwD93I59R00

WASHINGTON (AP) — Federal regulators on Wednesday extended an unprecedented ban against all short-selling in the shares of more than 800 financial companies, keeping it in place at least until after Congress enacts a massive financial bailout plan.

The Securities and Exchange Commission announced the extension of the ban, which was put in on Sept. 18 in a bid to shore up investor confidence in the face of the spiraling market crisis.

The ban, which was to expire Thursday, now will last until the third business day after enactment of the $700 billion financial bailout plan now before Congress. It will end no later than Oct. 17.

Late Wednesday, the Senate passed the bailout plan, which appeared to be gaining ground in the House, where Republicans' opposition softened.

The idea is that the extension will give enough time for financial markets to calm, with bailout program's plan to buy up Wall Street's toxic mortgage debt possibly starting to have a positive effect. By law, the SEC's emergency ban could not be extended beyond Oct. 17.

more...


Here's one from the day after the ban was lifted (article from Oct 10)

http://www.ft.com/cms/s/0/3cfeb278-9665-11dd-9dce-000077b07658.html

As the controversial ban on shorting some financial stocks was lifted yesterday, the industry was getting back to the business of arguing about what should replace it.

NYSE Euronext, the transatlantic exchange, is considering a new set of rules applying to individual stocks as part of its efforts to lead the industry to a consensus on how best to police the activities of short sellers following the lifting of a three-week ban yesterday.

These rules would involve the halting of trading in individual stocks if they were to fall sharply in short periods of time.

The measures would be similar to the current "circuit breakers" which suspend trading if the level of a certain index, typically the Dow Jones Industrial Average, plunges sharply very quickly.

However, after the ban on shorting certain financial stocks was lifted yesterday, worries persisted that this would send the prices of several already vulnerable stocks plunging.

Morgan Stanley fell 25.9 per cent by the close of trade yesterday amid the prevailing sense of fear.

Stocks had begun the day in positive territory amid relatively light trading because of a holiday in the US but quickly turned negative, fuelling suggestions that short selling might in some way be to blame.

more....

[54anickel]

68. We basically flipped values from "using" things and money while "valuing" people

to "using" people as a means to obtain the things and money we now value.

People, their time, labor, sweat and ingenuity are nothing more than commodities to be used up then spit out. America cannot begin to rebuild herself until she reassesses what is valuable and held dear. Personally, I don't hold out a lot of hope. There are an awful lot of Joe the plumbers out there that consider taxes a punishment than there are Suzy "I'm happy to pay my taxes" Ormans within both parties.

[eowyn_of_rohan]

Wow. Excellent observation

and very sadly, so true. I will add, another one who was happy - actually said proud - to pay his taxes was Elvis Presley.

[54anickel]

82. This Joe the plumber fiasco shines such a bright light on how the Republicans have perfected the

cruel gaming of the "American Dream". They've been able to convince the average person to vote against their own best interest in the present reality for some pie in the sky fantasy where they are elevated above average, middle or even upper-middle class. WTF is wrong with being "average" anyway? They've been conned into a sick fantasy that creates self-loathing that is directed at people just like themselves. When you stop to really think about it, it surely gets your head spinning. :crazy:

[Dr.Phool]

94. Joe the plumber was a illiterate moron in the first place.

He thinks that because his fantasy business would do $280k in business, his taxes would go up? Not after he deducts wages, materials, overhead, gas permits (Oh, I forgot. He couldn't pull one because he was unlicensed), he would be pulling in far less than $100k.

So he would have benefited under Obama's tax plan. But, that wouldn't be fair to rich people and small businesses employing 499 people.

Where do they find these rubes?

[54anickel]

98. Where do they find them? Oh, I dunno, I'm pretty much surrounded by people that

think just like him. I think that was my point anyway. While some can only be written off as "illiterate morons", I am hopeful that a larger percentage can learn to think for themselves once they see how they've been used and played against themselves by the party that refers to them privately as Fodder Units.

I think the economic "crisis" may provide a wonderful opportunity for our nation, sort of a "do over", to get back to the basics. I just hope it's not too late.

[Karenina]

97. BIG OL' BINGO!!!

It's ALL about our collective priorities.

[Roland99]

70. 11:29am - Markets swinging but the vines are shorter today

Dow 8,933.38 -45.88
Nasdaq 1,718.00 +0.29
S&P 500 943.57 -2.86
10-year 3.97% +0.03
Gold $782.80 -$21.70
Oil $71.74 $1.89

[Roland99]

71. Alfred E. Smith Dinner (C-SPAN Flash video)

http://www.c-spanarchives.org/library/vidLink.php?b=1224205537&e=1224209137&n=1

Skip to about the 7:45 mark when McCain starts.

Very funny stuff!

[theDash]

86. Great point 54anickel

And I am amazed at all the people who are pro-life or pro-gun with vote blindly for a republican who supports a couple of issues, despite the fact that in every other area of their life, the republicans are screwing them over royally.

I live in the south, and hear so many people complaining about the cost of living is going up, and their wages being stagnant, or worse, losing a job and having to take another for less pay. Having to pay outrageous interest rates on credit cards or loans they need. Medical bills and cost of health insurance going through the roof. They complain how corporations are screwing the little guy. Yet when you ask who they are voting for - they all say 'McCain!' 'Aint no way Obama is taking away my guns', or 'Obama kills babies' or 'Obama is going to raise my taxes', something stupid like that. The republicans know how to manipulate their base, who are either these idiots i mentioned above, or the fat cats at the corporations who know that a republican will help them screw the public out of their money.

I will admit though, I see a few bright points here and there. I have a brother who is very pro gun, and being a small business owner is concerned about taxes. But watching the debate with him the other night, he admitted that Obama made some good points, and said his home remodelling business grosses over 250k a year, but after writing off materials and labor and other expenses, the net income is nowhere near falling into a tax bracket where his taxes will be increased. So he likes Obama's tax plan, because he thinks companies like Exxon should pay more taxes. He is also very concerned about the economy, his business is affected a lot when people do not have money to make home improvements, or when people no longer have homes to improve.

[antigop]

88. Welcome to DU, theDash! n/t

[54anickel]

90. Hi theDash, welcome to the Stock Market Watch thread. Good to hear you are seeing a few

bright points. I live in a VERY Republican county so the bright spots here are extremely rare. Not very many converts, but I have heard several people say they were NOT going to vote or were writing in Ron Paul. I try to encourage them to at least show up at the polls and vote 3rd party rather than stay at home. If they are unhappy with the choices they should at least cast a protest vote rather than take their ball and stay home. I don't think anyone should ever take the right to vote for granted.

[uppityperson]

78. Been offline most of last wk. Did anyone win the new pool yet?

Thanks for continuing to post the stock market stuff. Appreciate being able to get commentary from you.

[Dr.Phool]

83. Yeah, 2 people won the next day.

[Roland99]

81. 1:04pm - Everyone took a Happy Pill!

Dow 9,163.24 +183.98
Nasdaq 1,754.84 +37.13
S&P 500 970.15 +23.72
Oil $72.22 $2.37
10-year 3.98% +0.05
Gold $786.50 -$18.00

[htuttle]

91. Choppers!

[Roland99]

92. Was pushing +300 points. Warren Buffet says it's time to buy American stocks.

Now up only about 146.

[wordpix]

107. easy for Buffett to say, he's got quite a cushion if his stocks go south

[dweller]

95. where did it go?

Dow 8,894.51 -84.75 -0.94%

3:21

but it' down less now.
dp

[Dr.Phool]

96. 3:27 flat. tick .....tick .....tick .....tick

The last 15-30 minutes is when the action really starts.

[54anickel]

87. Social Security checks grow a bit as stocks shrink

http://ap.google.com/article/ALeqM5iRj0kJdCxx7gYtp4vZJCebi4AthwD93RTU780

WASHINGTON (AP) — Social Security checks are going up $63 a month for the typical retiree — the largest increase in more than a quarter century but likely to seem puny to the millions who have been watching in horror as Wall Street lays waste to their retirement nest eggs.

Every little bit helps, but the boost is coming after a year when people living on fixed incomes have been pounded by surging energy prices and higher food costs — and lately have been seen their lifetime savings shrivel along with the stock market.

The yearly adjustment in Social Security checks is linked to government inflation figures, but advocacy groups for seniors say it's far short of what the typical retiree needs to keep up with rising living costs.

The Senior Citizens League said it did a study that indicated people 65 and over have lost 51 percent of their buying power since 2000, with the price of home heating oil and gasoline more than doubling since the beginning of the decade and such food staples as eggs and potatoes showing big increases as well.

"Although the word crisis gets thrown around a lot in our national dialogue, there's no other word to describe it. Millions of our nation's seniors are facing an economic crisis," says Daniel O'Connell, the league's chairman.

Adds Mark Zandi, chief economist at Moody's Economy.com: "Most households will take any cash they can get in these very difficult times when seniors have been panicked watching the fall in stock prices and what is happening to banks where many of them have their CDs."

The 5.8 percent increase announced Thursday by the Social Security Administration will go to the 50 million Americans receiving benefits. It is the biggest jump since the 7.4 percent of 1982. The $63 typical monthly increase compares to the $24 advance that retirees saw in this year's benefit checks, an increase of just 2.3 percent and the smallest in four years.

more...

[RUMMYisFROSTED]

99. The Stock Market is pretending to be drunk.

Cute.

[TalkingDog]

101. Friday Fluffer-nutters

DOW
8852.22 -127.04 -1.41%

NASDAQ
1711.29 -6.42 -0.37%

S&P 500
940.55 -5.88 -0.62%

So now that we are over the worst of the sea sickness (thanks, Dramamine!) could somebody 'splain why the talking heads spent most of the afternoon telling me I should:

BUY! BUY! BUY! BUY! BUY! BUY! BUY! BUY! BUY! BUY!BUY!


Oh, wait...nevermind.....
http://www.kaltoons.com/zencart/images/Book!%20Buy!%20Sell!%20Sell%20sm.jpg

[TalkingDog]

102. Channeling the spirit of the bobblehead?

Or is that just his ego causing his head to look like that?

[UpInArms]

103. End o' the day

Dow 8,852.22 127.04 (1.41%)
Nasdaq 1,711.29 6.42 (0.37%)
S&P 500 940.50 5.93 (0.63%)
10-Yr Bond 3.938% 0.002

NYSE Volume 6,560,829,000
Nasdaq Volume 2,677,877,500

4:40 pm : The week's wild ride has concluded, but onlookers might not know it by the relatively mild close had on Friday. The S&P 500 surged almost 12% Monday, suffered its biggest drop since the 1987 crash on Wednesday, and rallied more than 4% Thursday. On Friday alone the index swung nearly 7% from low to high before finishing with a 0.6% loss.

The wide swings persist as participants look for direction, even after renowned investor Warren Buffett indicated he was buying stocks. Buffett stated in a New York Times op-ed piece that he is adding U.S. stocks to his personal portfolio, which typically holds government debt. Buffett indicated he will continue to do so as stocks remain attractive. For instance, the S&P 500 currently trades at 18.6x trailing earnings, which is below its five-year average multiple.

Google (GOOG 373.11, +20.09) attracted interest, for its part. The Internet search giant announced better-than-expected earnings per share results for the latest quarter. Its shares finished appreciably higher, though off their best level of the session. IBM (IBM 90.78, -0.74) preannounced upbeat earnings per share results last week, so the company didn't garner the same attention as Google.

Announcements were mixed elsewhere. Stryker (SYK 52.19, -2.56) missed expectations while Advanced Micro Devices (AMD 4.21, +0.09) announced strong growth. Honeywell (HON 29.37, -1.56) and Schlumberger (SLB 49.99, -3.21) both posted an upside earnings surprise, but had a cautious outlook.

Schlumberger's caution reflects concerns that energy companies will be pressured by softer demand amid slower global growth. After being down more than 5% early on, the energy sector climbed to a gain in excess of 7%. It finished 0.4% lower, despite the fact oil prices finished 3% higher near $72 per barrel. Still, the threat of slower growth has oil prices down 51% from their July high.

Further data was released indicating that U.S. housing remains weak. Housing starts in September fell 6.3% to an annualized rate of 817,000 units. That was well below expectations and marked the lowest level since January 1991. Meanwhile, building permits dropped 8.3% to an annualized rate of 786,000. That number also matched a level also seen in January 1991.

The data reflect continued weakness in the moribund housing industry, which will weaken fourth quarter GDP and continue to spur write-downs at financial firms. The financial sector was a laggard, closing 2.3% lower.

The wild swings of the past week had volatility at record highs with the Volatility Index hitting 81 yesterday. Though today marked the expiration of options, the VIX finished the week at 70.DJ30 -127.04 NASDAQ -6.42 SP500 -5.88 NASDAQ Adv/Vol/Dec 1160/2.76 bln/1580 NYSE Adv/Vol/Dec 1734/1.74 bln/1373

[Demeter]

104. Well, the Weekend Is Upon Us, and That Means....Weekend Economists Meeting Now!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x394114

Open all weekend! Do drop in!

[machI]

105. Kick