STOCK MARKET WATCH, Friday March 21 (closed for Good Friday)

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday March 21, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 306
DAYS SINCE DEMOCRACY DIED (12/12/00) 2616 DAYS
WHERE'S OSAMA BIN-LADEN? 2342 DAYS
DAYS SINCE ENRON COLLAPSE = 2633
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

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

AT THE CLOSING BELL ON March 20, 2008

Dow... 12,361.32 +261.66 (+2.16%)
Nasdaq... 2,258.11 +48.15 (+2.18%)
S&P 500... 1,329.51 +31.09 (+2.39%)
Gold future... 920.00 -25.30 (-2.68%)
30-Year Bond 4.17% -0.06 (-1.35%)
10-Yr Bond... 3.33% -0.03 (-1.01%)






GOLD, EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

[ozymandius]

1. Market WrapUp: If Daily Market Action Can Spoil Your Day...

BY MARTIN GOLDBERG, CMT

There are a lot of shenanigans going on in the markets today. I would suggest that if you aren’t part of those performing the shenanigans, you want to err on the side of less risk, and less trading. You want to err on the side of less concern. In short, if the day’s market action can spoil your day, your commitments are too great. What looks like a bargain may look like a bigger bargain tomorrow. For your mental health, shut off Cramer, and all the noise. Err on the side of the long term charts and not the short term ones. Shut off “Fast Money.”

.....

More importantly, the US stock market has followed a consistent pattern since August which goes like this:

1. The market sells off and volatility spikes upward.
2. The fed/government does something to make the financial markets and the public think that everything is going to be just fine.
3. After an initial rally, the market sells off and the process repeats itself.

Within this pattern, it is becoming more evident that with each “save,” the magnitude of the corresponding rally becomes smaller, and the duration becomes shorter. It makes one wonder what will happen to the market if Tuesday’s action turns out to be a mere one day wonder. For those who believe that the market will always favor those who are long term investors, a look at the longer term chart would be helpful.

The 10-year chart shows that the S&P 500 made a double top, and then it decisively failed to hold its 2000 highs. Now in spite of all talk that the fed will save the day, the market is steeped in a clear and steep downtrend. While the rallies have been exciting, they bear an eerie similarity to those knee jerk rallies that occurred in the S&P’s trip from over 1500 to less than 800. I can think of no reason why such a “correction” cannot happen again. The last top was accompanied with a bubble-burst. This one also has its own bubble-burst to cope with.

-see chart-

Today’s Market

The market was led higher today by a host of stocks that are clearly in a bear market. Consider the bullish action in such sectors as homebuilders (up double digit percents) and financials where our old friend Countrywide was up double digits, Merrill Lynch up double digits, Bear Sterns up double digits, a host of broadline retailers all up more than 5%. At the same time, gold, silver, oil, and commodities were down. Emerging markets were an under performer, up 1.7%. While gold, commodities and commodity stocks were down, bonds were up. This has been pretty typical of the action over the last week or so. Is this the bottom for stocks? In my opinion, it isn’t. Is this a top for bonds? In my opinion we're near it. Have we seen a top in precious metals? In my opinion, not.

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

[burf]

31. I don't know if this was posted already

If so forgive me.

US strikes investment accords with Abu Dhabi, Singapore funds

Published: Thursday March 20, 2008

AFP

The US Treasury said Thursday it had reached a series of agreements with two powerful sovereign wealth funds based in Abu Dhabi and Singapore covering investments in US markets.

snip

US officials stressed that they welcome foreign investment and are working to make sure congressional lawmakers are kept informed about market developments.

The GIC and ADIA have both invested billions of dollars in troubled US banking giant Citigroup in recent months.

The Abu Dhabi fund invested 7.5 billion dollars in Citigroup in late November and the GIC invested 6.8 billion dollars in the US financial group in January.

Link: http://rawstory.com/news/afp/US_strikes_investment_accords_with__03202008.html

There is also mention of a Tony Tan from the Government of Singapore Investment Corporation. I know that Tan is a fairly common family name in that part of the world, but I wonder if that would be the same Tan family that were such buddies of Jack Abramoff and his dealings in the Northern Mariana Islands.

[ozymandius]

2. no goobermint reports today (nt)

[ozymandius]

3. Oil falls on economy worries

NEW YORK - Oil futures extended their declines Thursday as concerns about the economy and demand for oil grew and the dollar strengthened.

Retail gas prices, meanwhile, fell further below their recent records, while diesel rose to a new record above $4 a gallon.

For a second day, the oil market appeared focused on the economy and oil's underlying supply and demand fundamentals — factors it ignored in recent weeks while rocketing to a series of new records. However, some analysts said oil's price swoon may not last for long; most investors expect the Federal Reserve to cut interest rates several more times this year, moves that are sure to put new pressure on the dollar.
.....

But there are signs the market may be divorcing itself from its focus on the dollar. Prices were pressured Thursday when the Labor Department said the number of people filing for unemployment benefits jumped by 22,000 last week, much more than expected. A sharp slowdown in the economy could reduce demand for oil and gasoline. On Wednesday, the Energy Department said gasoline demand dropped by 1 percent last week.

Light, sweet crude for May delivery fell 70 cents to settle at $101.84 a barrel on the New York Mercantile Exchange Thursday after sliding to as low as $98.65 earlier. It was the first dip by a front-month oil contract under $100 since March 5. On Wednesday, the expiring April contract fell $4.94 a barrel to settle at $104.48.

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

[ozymandius]

7. Cheney, Saudis to Discuss Oil Crisis

Vice President Dick Cheney to Talk About Oil, Security Issues With Saudi King

RIYADH, Saudi Arabia (AP) -- High oil prices socking U.S. consumers will be a key topic of Vice President Dick Cheney's talks Friday with Saudi King Abdullah but it's unclear whether Cheney will ask the Saudis to increase production.

Early this year, the oil producing nations ignored President Bush's request to increase supplies so that gas prices, which are up over $3 a gallon, could fall. Bush asked the Saudis, a main player in OPEC (Organization of Petroleum Exporting Countries) to push oil producing nations to pump more oil when he was in Saudi Arabia in January.

Cheney's advisers cautioned in advance of Friday's talks that oil was just one item on a long list of discussion topics which include Iran, Syria, Lebanon, protecting infrastructure against terror attacks and the vice president's visit this week to Iraq and Afghanistan. They said Cheney would review with the king steps that the consuming and producing nations can do, both in the short and long term, to stabilize the market.

http://biz.yahoo.com/ap/080321/cheney.html

[saigon68]

9. Afew things he won't talk about are

Elections, the right of women to drive cars, and why they are funding osama et al.

[ozymandius]

4. Leery lenders demand more from borrowers

WASHINGTON - Just when consumers and the U.S. economy need banks to lend more freely, the mortgage industry is making it harder to borrow — even for those with good credit.

Mortgage insurers, whose backing is required for borrowers who can't afford the traditional 20 percent down payment on a home, have already flagged nearly a quarter of the nation's ZIP codes where they refuse to insure some home loans.

That encompasses a wide variety of neighborhoods: McMansions in Scottsdale, Ariz.; luxury Miami condos; 1960 ranch houses in Flint, Mich.; and early 20th century kit homes in Metuchen, N.J.

The entire states of California, Florida, Arizona, Michigan, Ohio and Nevada — which have seen the highest foreclosure rates and the worst price declines — are blackballed on some mortgage insurers' lists.

Banks that have lost billions because of bad bets during the housing boom are now reverting to strict lending standards not seen in nearly 20 years, according to industry data and interviews with lenders.

http://news.yahoo.com/s/ap/20080321/ap_on_bi_ge/credit_crunch_lending

[ozymandius]

5. Layoffs mount for Citi bankers, traders

NEW YORK - Citigroup Inc. is continuing to cut investment banking and trading jobs this year as the bank tries to lower costs while recovering from colossal credit-related losses.

.....

The Institutional Clients Group has about 60,000 employees, and includes the bank's markets and banking unit and its alternative investments unit.

The bank's executives said back in January, after releasing a nearly $10 billion loss for the fourth quarter, that they were slashing 4,200 jobs and there were more job cuts to come.

Citigroup would not confirm Thursday how many layoffs there have been since then, but The New York Times reported Thursday, citing people familiar with the matter, that Citi is cutting 2,000 jobs on top of the 4,200 announced earlier.

http://news.yahoo.com/s/ap/20080321/ap_on_bi_ge/citigroup_job_cuts

[ozymandius]

6. Alcoa bribery probe launched

PITTSBURGH (AP) -- The U.S. Justice Department has begun a criminal investigation into whether aluminum maker Alcoa Inc. participated in bribery in the Persian Gulf state of Bahrain.

In documents filed Thursday in U.S. District Court, federal prosecutors asked a judge to halt a federal civil lawsuit that accused Pittsburgh-based Alcoa (AA, Fortune 500) of bribing officials through overseas shell companies to secure hundreds of millions of dollars in overpayments.

"The United States has a direct and substantial interest in this case, as the subject matter giving rise to this case is also the subject of an ongoing federal criminal investigation," prosecutors in the Justice Department's fraud section said in court filings.

Aluminum Bahrain B.S.C., also known as Alba, in which the Bahrain government holds a 77 percent stake, is seeking more than $1 billion in damages from Alcoa and other affiliated defendants, according to a federal lawsuit filed last month.

http://money.cnn.com/2008/03/21/news/companies/alcoa.ap/index.htm?postversion=2008032104

[ozymandius]

8. Oopsie.

Today's holiday obviously took me by surprise. Nonetheless, we can make the best of the thread as we normally do. I don't think the mods will delete it (perhaps, unless my holiday oversight offends).

Have a nice quiet day Marketeers!

:hi:

[saigon68]

10. Thanks Ozy you too

Mostly a lurker here :-)

[fasttense]

12. I just assumed that since the market has been so volatile that

you, in your infinite wisdom, decided to post a thread to catch up on all the economic news that has slipped by while we all focused on the numbers.

I still think that. :hi:

[Dr.Phool]

13. Damn, I forgot all about a holiday also.

That's the trouble with being retired. It's all week-ends.

Maybe I'll invest heavily in Heineken today.

[JNelson6563]

14. Sound investment decision!

:toast:

[JNelson6563]

15. It's merited occassionally

Remember the recent Sunday SMT? I forget which of our Marketeers had to wisdom to kick that off but it was very fitting tho' our markets were closed.

You're the best Ozy! :patriot:

Julie

[Demeter]

39. That Was Prag, Living Up to His Name

[Hugin]

40. 'Tis true...

But, it was an unusual circumstance.

[DemReadingDU]

27. Thank you Ozy

There's always plenty of investment news to keep us busy!


Have a great Easter!

[KoKo]

36. Thanks Ozy...there's some good info here today, as usual...glad you posted...

:toast:

[Hugin]

37. Who knows what may happen today?

The Fed could cut rates...
Truck futures could take a mysterious rise...
We might run out of coffee and doughnuts...

I can't avoid pointing out that "wariness" is a symptom of PTSD and also "Battered Spouse Syndrome" and over the
past eight years we've all had ample opportunity to develop those.

:shrug:


:hi:

[formercia]

11. Kick to the greatest page.

I need my fix.

[UpInArms]

16. dollar watch

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

Last trade 72.803 Change +0.060 (+0.08%)

Oil, Gold Have Plunged - Could the Australian and Canadian Dollars Fall Further?

http://www.dailyfx.com/story/topheadline/Oil__Gold_Have_Plunged___1206047896486.html

Commodities have enjoyed unprecedented gains over the past few months, as WTI crude oil futures hit an all-time high of $111.80/bbl while gold futures on the NYMEX surged to a record of $1,033.90/oz early in the week. However, commodity prices have plunged across the board in recent days, as traders liquidate profitable positions. The moves have made a huge impact on the forex markets, as the Australian dollar and Canadian dollars have tumbled over 4 percent this week, while the New Zealand dollar has given up over 3 percent. Will these massive declines continue?

First, let’s consider that the primary source of growth for the Australian, New Zealand, and Canadian economies has been demand for commodities like gold, oil, wheat, zinc, dairy and beef among a long list of others. Many of these goods were destined for booming Asian economies like China, whose growth rates have breached double digit gains. Meanwhile, Canada’s primary trading partner – the US – purchases over 80 percent of the nation’s total exports, according to Industry Canada. However, the strength of the export sector may soon lose its momentum as the US teeters on the brink of recession while global growth slows. While prices for raw materials may act as a temporary crutch, prices have begun to turn. Furthermore, the Baltic Exchange Dry Index, which is a strong leading indicator for global inflationary pressures and commodity demand, has recently started to plummet.

There are strong correlations to keep in mind when it comes to the commodity dollars. The New Zealand dollar has a very high correlation with the Australian dollar, and the Australian dollar shows strong links with gold prices. Meanwhile, the Canadian dollar is well known for its correlation with oil prices (though the strength of this relationship can vary). However, did you know that gold and oil are correlated with the BDI? The relationship between the Baltic Dry Index and these commodities can be seen in the chart below, courtesy of InvestmentTools.com. It is clear that BDI tends to be a leading indicator for shifts in price action for gold and oil, and over the past week, we have already seen sharp declines. The BDI measures the cost of shipping different commodities around the world and if demand to ship is strong, the price for shipping these raw materials increases. On the other hand, if demand is weakening, the price falls. The recent drop in the BDI is our first indication that commodity hungry countries like China and India are no longer immune to the slowdown in the US.

...more...

Euro Rebounds as Risk Resumes in Very Slow Holiday Trade

http://www.dailyfx.com/story/bio2/Euro_Rebounds_as_Risk_Resumes_1206094272267.html

With two thirds of the FX dealing world closed for Good Friday holiday, currencies spent a very quiet night of trade reacting primarily to better equity flows out of Japan which saw the Nikkei rise by 222 points. The rise in the Nikkei generated some buying interest in EURJPY which popped to 154.00 taking the euro up along for the ride. However, the trading was very thin and without much conviction as the vast majority of market players retired for a three day week-end.

On the economic front both French and Italian consumer spending surprised to the upside, with the French reports registering a very strong gain of 1.2% vs. 0.5% projected. The increase was due to better demand for cars and durable goods and indicates that the strong euro is enhancing the purchasing power of EZ consumers and may provide some positive contribution to GDP growth this quarter.

Overall, however, the market appears at a standstill as EURUSD consolidates its gain in the 1.5300-1.5500 area and traders wait for the next theme to develop. The collapse of Bear Stearns has left the market wary, but with no additional news of serious trouble in the US financial system, dollar shorts have run out of fresh reasons to sell the greenback. Meanwhile evidence of a potential slowdown in EZ economy is starting to mount, raising concerns that ECB may have to shift its hawkish posture relatively soon.

Next week’s IFO survey may set the tone for trade, especially if it corroborate euro bear’s argument and prints lower than expectations. The pair is clearly overbought and a correction all the way to 1.50 may not be unreasonable, especially if US economic news stabilizes while European data deteriorates.

...more...

[UpInArms]

17. BOJ official warns Japan economy slowing

http://news.yahoo.com/s/ap/20080321/ap_on_bi_ge/japan_central_bank

TOKYO - Japan's interim central bank chief vowed Friday not to let the absence of a governor hamper the country's economic and financial activities while another central bank official said the economy is slowing "sharply."

The Bank of Japan has no governor after the opposition controlled upper house of parliament rejected two government nominations in a row, saying they were too politically connected as former Ministry of Finance bureaucrats to uphold the central bank's independence.

The five-year term of former Gov. Toshihiko Fukui ended Wednesday.

A new central bank deputy head, Masaaki Shirakawa, whose nomination was approved last week, was named acting governor this week.

"We are in an unusual situation without a governor," Shirakawa said at a press conference Friday. "But we cannot let the bank's operations stall. I will fulfill my duties until a governor is appointed."

Kiyohiko Nishimura, the bank's other deputy governor, said Japan's economic slowdown is getting worse.

...more...

[UpInArms]

24. Japan property firm folds, hit by subprime

http://www.reuters.com/article/bondsNews/idUST33259620080321?sp=true

TOKYO, March 21 (Reuters) - A Japanese property investor has filed for court protection from creditors, the first listed company in Japan to collapse from tighter lending in the wake of the U.S. subprime crisis.

Reicof Co Ltd (8941.OJ: Quote, Profile, Research) said it had failed with debt of 42.6 billion yen ($430 million) as investments in hotels went sour.

"Financial and real estate markets have deteriorated in the wake of the subprime crisis and we were not able to sell properties or secure loans as expected," Masaki Nogami, a Reicof lawyer, said at a news conference on Friday.

Japanese banks are getting cold feet on property, analysts say, only giving 60-70 percent of a building's value compared to 80-90 percent a couple of years ago.

Industry officials also say investors are pulling back from Japanese properties as they eye better opportunities in the United States and Europe to pick up distressed assets.

Japanese real estate stocks have been halved in value since mid-2007, also hit by troubles in the residential sector after tighter building codes were introduced.

...more...

[UpInArms]

18. Dealers swift to borrow from Fed under new rules

http://news.yahoo.com/s/nm/20080321/bs_nm/usa_fed_discountwindow_dc

NEW YORK (Reuters) - Primary dealers borrowed more than $13.4 billion a day from the Federal Reserve in the latest week, showing brokers were swift to take advantage of new rules allowing them to obtain loans directly from the central bank.

Dealers had borrowed nearly $29 billion by Wednesday, Federal Reserve data released on Thursday showed. Under normal market conditions that would be viewed as an extraordinarily high figure. But analysts said they wouldn't be surprised to see the number grow as dealers seek more financing directly from the Fed to shore up balance sheets depleted by the credit market crisis.

The Fed data also showed that Bear Stearns Cos (BSC.N) received an average of $5.53 billion a day over the period of the credit facility arranged for it by JPMorgan Chase (JPM.N). Bear's borrowing totaled $12.9 billion over the period of that credit facility, which the Fed arranged with JPMorgan last week to help rescue the ailing investment bank.

Together, total discount window borrowing came to $19.05 billion a day in the latest week, the data showed.

Goldman Sachs Group Inc (GS.N), Morgan Stanley (MS.N) and Lehman Brothers (LEH.N) said they were tapping the discount window to borrow money directly from the Fed this week.

...more...

[burf]

22. But the talking heads on

CNBC were spouting that the action at the Fed window was gonna be slow. No one wanted to be the first to borrow because that would only be an admission that they were in trouble. Like they weren't in trouble already! I'm getting to the point I don't even watch those idiots.

May everyone have a great Easter Holiday!

[UpInArms]

28. I'm saved by the fact that I don't have cable, a dish or any other

method of watching the liars - just an antenna and one local and fuzzy station.

Keeps my blood pressure more steady.

:hi:

[Zynx]

45. Another thing is the cost of funds is so low at the Fed now that there is a gain to be had

there rather than going into the credit markets where the cost of funds is higher due to the credit freeze for these companies.

[UpInArms]

30. Regular discount window borrowing rises to $120 million

10. Regular discount window borrowing rises to $120 million
4:31 PM ET, Mar 20, 2008 - 16 hours ago

11. Bear Stearns borrows daily average of $5.5B from Fed
4:31 PM ET, Mar 20, 2008 - 16 hours ago

12. Investment banks borrow daily average of $13.4B from Fed
4:31 PM ET, Mar 20, 2008 - 16 hours ago

13. Investment banks borrow $28.8 billion from Fed on Wednesday
4:31 PM ET, Mar 20, 2008 - 16 hours ago

[DemReadingDU]

19. 2nd Healthcare fraud trial in Columbus, Ohio - update

3/20/08 Wiretaps of former National Century exec's calls said to show effort to bribe witness

In e-mails, voice mails and phone calls that Lance K. Poulsen didn’t think were being monitored, the National Century Financial Enterprises founder kept things cryptic.

Poulsen’s attorneys have argued all week in federal court that the charges the witness tampering and obstruction of evidence on which Poulsen is being tried are a misunderstanding.

The government alleges that Poulsen and a friend, Karl A. Demmler, tried to bribe Sherry Gibson, a former National Century executive, to forget certain things when she testifies against Poulsen later this year. Gibson already has served time, having pleaded guilty to various charges related to the National Century case.

Poulsen faces numerous charges in connection with the collapse of National Century, the one-time Dublin-based company that provided financing to health-care providers. The company went bankrupt in 2002. Investors lost at least $1.9 billion.

In testimony in the witness-tampering case, Poulsen’s attorney, Peter C. Anderson, has said that Poulsen offered Gibson money through their mutual friend, Demmler, so that she could hire a new attorney.

If Demmler told Gibson the money was a bribe, Poulsen knew nothing about it, Anderson has said.

But today, U.S. Department of Justice Trial Attorney Leo Wise began playing recorded phone conversations between Poulsen and Demmler that indicated Poulsen knew what was going on.

Poulsen and Demmler exchanged calls 32 times between January and June, FBI Special Agent Jeffrey Williams testified today.

In July, Federal Judge Gregory Frost signed a court order allowing the FBI to wiretap Poulsen’s and Demmler’s phone lines. In one of those calls, Poulsen told Demmler to tell their friend he was “ very much on board” with the plans for payments.

Demmler had offered to get $25,000 for Gibson as an initial payment if she agreed to forget her testimony and hire a defense attorney whom Poulsen recommended.

Paying the money, is not a problem, Poulsen tells Demmler on the tape.

“I can even do a little better than that,” he adds.

Prior to that conversation, Demmler forwarded Poulsen an e-mail from Gibson, asking what she is supposed to do in order to collect the money. For example, she points out that she had already told the FBI she falsified National Century’s financial records for a 1995 investor report.

And, she told them that Poulsen signed off on that report. So is she supposed to claim now that she suddenly can’t remember, Gibson asked in the e-mail.

Poulsen, though, told Demmler he’s not concerned.

“That (investor reporter) was stamped” with his signature, Poulsen said. He continues on the tape, seemingly role-playing what he’d tell federal authorities: “So I never saw that one….There wasn’t anything I knew was false or misleading.”

In all their communications, Poulsen and Demmler refer to Gibson as “Mary” or “their friend.” They also talk in code about Demmler’s mother’s house as “Bob’s place” – a place where phone lines were believed to be secure.

“Is there a chance we could talk about life in general,” Poulsen asked Demmler. “Could you go over Bob’s place or some other place?”

Demmler was a long-time friend of both Poulsen and Gibson. The former owner of the Bogey Inn in Dublin told Gibson he would take a 10 percent cut of whatever Poulsen paid her.

In the wiretaps, Demmler also alluded to wanting more money later.

“I will do just about anything to help all parties out of this jam. … And I hope I will be rewarded down the road,” Demmler told Poulsen in a note. A copy of the note was discovered when FBI agents searched Demmler’s home Oct. 18, Williams said.

Anderson and Demmler’s attorney, Darryl Parker, spent time earlier in the day questioning Gibson on whether she was ever paid by the federal government.

A government memo shows that Gibson was paid $8,497, but Gibson testified the only money she received directly was $1,495.

That was money given to her for a security deposit and first month’s rent on a new apartment that was deemed necessary for security reasons. After Demmler’s arrest in October, he was placed under house arrest at his mother’s house, which was too close to Gibson’s Whitehall apartment.

Federal prosecutors used the $7,000 difference to pay costs directly associated with her move.

http://www.columbusdispatch.com/live/content/business/stories/2008/03/20/poulsen.html



link to previous articles
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3235200&mesg_id=3235302

[UpInArms]

20. JPMorgan offers Bear Stearns staff bonuses: source

http://www.reuters.com/article/businessNews/idUSN2038966620080321?feedType=RSS&feedName=businessNews?sp=true

NEW YORK (Reuters) - JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) is offering bankers at Bear Stearns Cos (BSC.N: Quote, Profile, Research) bonuses to stay and support the controversial takeover, a person familiar with the situation said on Thursday.

JPMorgan Chief Executive Jamie Dimon met with hundreds of Bear Stearns executives late Wednesday, his first meeting with bank employees since the takeover was agreed to on Sunday.

At the meeting, Dimon, aiming to head off an exodus of Bear Stearns staff, proposed incentives to bank employees who stay and support the deal. He also expressed confidence that the deal would be completed as proposed, said the source, who was briefed on the meeting and is familiar with JPMorgan's thinking.

Employees who are offered jobs by JPMorgan would receive a bonus that includes JPMorgan shares. Employees who are not offered jobs will receive at least a cash bonus of about 30 percent of their 2007 compensation if they stay through the completion of the deal, the source said.

It is unclear whether Bear Stearns employees, who own about 30 percent of the firm, were swayed by the offer.

<snip>

The fire sale offer of about $2.41 a share at current market prices shocked Bear Stearns employees, who saw much of their savings evaporate. Layoffs are all but certain, though the extent of the job losses is not yet clear.

...more...

[UpInArms]

25. Questions abound on Bear Stearns buyout

http://www.reuters.com/article/newsOne/idUSN1438930520080320?sp=true

NEW YORK (Reuters) - Stunned Bear Stearns shareholders who saw investments virtually wiped out overnight when a takeover deal with JPMorgan Chase was unveiled are demanding to know how it was put together in the first place.

For instance, they -- and Washington lawmakers -- want answers on how the deal was arranged, and gained government approval and financing, all in a few hours, and seemingly without alternative bidders being canvassed.

They also have a host of questions about the role of the Federal Reserve and the Treasury Department in engineering the emergency deal.

So far, some crucial details remain murky.

"Under the circumstances, shareholders should be entitled to know just about everything," said James Melican, chairman of shareholder advisory firm Proxy Governance Inc, which is expected to make a recommendation to investors on whether or not the deal should be approved.

"There needs to be full disclosure of exactly what happened over the weekend," he said. Investors have "an absolute right to know whether or not there is any other alternative mechanism that could either keep Bear Stearns in business or at least have them get a more appropriate price for their shares."

...more...

I think it's nifty too - how JPM is going to give "bonuses" to employees while ripping the investors off but good!

:woohoo: for JPM and the insiders!

Yeehaw!

Too bad those stuupid investors just couldn't see the writing on the wall and make out like the bandits inside the investment banks!

[wordpix]

43. Go, let the truth OUT! Geesh

[fedsron2us]

41. Sneaky feeling that this might not go as smoothly as JPM hope.

Joe Lewis is certainly not going to give up quietly, and if a significant number of BSC ex employees and disgruntled external shareholders join him then they have the scope to cause this takeover quite a few problems. Watch this space.

[UpInArms]

21. Leery lenders demand more from borrowers

http://news.yahoo.com/s/ap/20080321/ap_on_bi_ge/credit_crunch_lending

WASHINGTON - Just when consumers and the U.S. economy need banks to lend more freely, the mortgage industry is making it harder to borrow — even for those with good credit.

Mortgage insurers, whose backing is required for borrowers who can't afford the traditional 20 percent down payment on a home, have already flagged nearly a quarter of the nation's ZIP codes where they refuse to insure some home loans.

That encompasses a wide variety of neighborhoods: McMansions in Scottsdale, Ariz.; luxury Miami condos; 1960 ranch houses in Flint, Mich.; and early 20th century kit homes in Metuchen, N.J.

The entire states of California, Florida, Arizona, Michigan, Ohio and Nevada — which have seen the highest foreclosure rates and the worst price declines — are blackballed on some mortgage insurers' lists.

Banks that have lost billions because of bad bets during the housing boom are now reverting to strict lending standards not seen in nearly 20 years, according to industry data and interviews with lenders.

For new home buyers and those seeking to refinance, it can mean higher down payments and a higher bar for credit scores, among other requirements. The toughest restrictions are in markets where home prices are falling, though regions where property values are rising are not immune.

...more...

Wow! I'm so glad the Fed flooded the banks with liquidity - lookie how well it trickles down to the consumers!

:sarcasm:

[burf]

23. At least the problem

of having enough money on hand for bonuses has been solved!

The new Fed mantra "Privatize the profits, socialize the losses.

[UpInArms]

26. Ooooh! This one is good! Merrill Lynch doubledeals and screws the pooch!

SCA defends its terminating Merrill contracts

http://www.reuters.com/article/businessNews/idUSN2041790220080320?feedType=RSS&feedName=businessNews?sp=true

NEW YORK (Reuters) - Security Capital Assurance Ltd (SCA.N: Quote, Profile, Research) said on Thursday it severed seven credit guarantee contracts with a Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research) unit because the investment bank had given key rights promised to SCA under the contracts to at least one other party.

SCA said its XL Capital Assurance unit was promised control rights on the $3.1 billion of portfolios it had guaranteed for Merrill Lynch International, but Merrill Lynch had given those same rights to one or more third parties.

"The decision to terminate the Merrill Lynch International contracts was not made lightly," SCA said in a statement.

By terminating the contract, SCA is hoping to get out from under an obligation that could cost it hundreds of millions of dollars.

But ending the contract could also force Merrill Lynch to write down billions of dollars of exposure, which is why the investment bank is suing XL Capital Assurance to get the insurer to make good on the agreement.

"Apparently in light of the current dramatic downturn and deterioration in the credit markets, (the) defendants are having 'sellers' remorse," Merrill Lynch said in the complaint, which was filed this week in the U.S. District Court for the southern district of New York.

Control rights allow the seller of credit default protection to liquidate the portfolio if asset performance weakens. Those rights are crucial for minimizing losses on credit default swaps that require payouts.

...more...

Isn't that amazing! I am absolutely just stunned with the chicanery and crookedness that just is rampant within these financial investment banks and their absolutely flaunting of the rules of engagement. There are some major sharks in the water and they will be the ones that end up with the taxpayers bailing them out.

:nuke:

[UpInArms]

29. The issue of bond insurers terminating contracts is thorny for the $45 trillion credit derivatives

market, where investors, banks, and others transfer credit risk.

omg

:faint:

[Robbien]

34. Most of what has been happening leaves one speechless

There are no cops in the financial market so the players are all doing whatever they want, whenever they want. It appears they expect the other players to follow the rules while they themselves are breaking every one of them. Then they get all huffy and righteous when they find out the other players are shitting on them.

[Hugin]

50. or at the very least hungry for...

:popcorn:

:7

[DemReadingDU]

32. Krugman: Fed funds question

March 20, 2008, 5:14 pm
Fed funds question (seriously wonkish, and possibly dumb too)
The target Fed funds rate is now 2.25%. Everyone expects it to be reduced further; Citi economists predict that it will be down to 1% by mid-year.

But I have a possibly naive question: can the Fed really cut the Fed funds rate that far? I don’t mean “can” in the sense that other concerns will give them pause; I mean literally — does the Fed really have that ability?

Bear with me while I talk this through. The Fed actually conducts monetary policy through open-market operations in Treasuries: the FOMC tells the open-market desk to buy or sell Treasuries from banks until the Fed funds rate is close to the target. Normally this puts Treasury interest rates close to the Fed funds rate, since one short-term loan to a very safe customer is a lot like another.

But right now Treasury interest rates are much, much lower than the Fed funds rate — around half a percent on both 1-month and 3-month bills. Weirdness like negative rates on repos aside (I’m still trying to wrap my mind around that one), basically the Fed can only drive Treasury rates down by about another half-point — which would still seem to leave Fed funds well above 1%.

How is it possible for the Fed funds rate to be higher than the Treasury rates? Well, one interpretation is that banks don’t trust each other — not even for overnight loans. Fed fund loans, after all, are unsecured.
In other words, the Fed funds rate may be more like LIBOR than the Treasury rate — and it may be being held up by a premium similar to the TED spread.

Am I being really stupid here? Or is it possible that the fear factor will soon make it impossible for the Fed even to achieve its target on the interest rate it supposedly controls?

http://krugman.blogs.nytimes.com/2008/03/20/fed-funds-question-seriously-wonkish-and-possibly-dumb-too/

Ted Spread
http://www.bloomberg.com/apps/quote?ticker=.TEDSP:IND

[DemReadingDU]

33. Krugman: Partying Like It’s 1929

March 21, 2008
If Ben Bernanke manages to save the financial system from collapse, he will — rightly — be praised for his heroic efforts.

But what we should be asking is: How did we get here?

Why does the financial system need salvation?

Why do mild-mannered economists have to become superheroes?

The answer, at a fundamental level, is that we’re paying the price for willful amnesia. We chose to forget what happened in the 1930s — and having refused to learn from history, we’re repeating it.

Contrary to popular belief, the stock market crash of 1929 wasn’t the defining moment of the Great Depression. What turned an ordinary recession into a civilization-threatening slump was the wave of bank runs that swept across America in 1930 and 1931.

This banking crisis of the 1930s showed that unregulated, unsupervised financial markets can all too easily suffer catastrophic failure.

As the decades passed, however, that lesson was forgotten — and now we’re relearning it, the hard way.


The financial crisis currently under way is basically an updated version of the wave of bank runs that swept the nation three generations ago. People aren’t pulling cash out of banks to put it in their mattresses — but they’re doing the modern equivalent, pulling their money out of the shadow banking system and putting it into Treasury bills. And the result, now as then, is a vicious circle of financial contraction.

Mr. Bernanke and his colleagues at the Fed are doing all they can to end that vicious circle. We can only hope that they succeed. Otherwise, the next few years will be very unpleasant — not another Great Depression, hopefully, but surely the worst slump we’ve seen in decades.

Even if Mr. Bernanke pulls it off, however, this is no way to run an economy. It’s time to relearn the lessons of the 1930s, and get the financial system back under control.

more...
http://www.nytimes.com/2008/03/21/opinion/21krugman.html?

[donkeyotay]

47. Overall, his meaning is clear, but his use of "we" muddies the analysis

How did we get here? ...The answer, at a fundamental level, is that we’re paying the price for willful amnesia. We chose to forget what happened in the 1930s — and having refused to learn from history, we’re repeating it.

WE are paying the price for it, true enough, but to say WE went along with this is to suffer from Stockholm Syndrome. WE were assaulted by the Republican Revolution that didn't believe in regulation and oversight. They believed in the free market, and their belief caused them to claim speech and representation were also best auctioned off to the highest bidder. We, the people, were gagged and bound in the backseat of this joy ride, one that has been very profitable for some, the same some that will not pay the price for it. WE will.

[DemReadingDU]

35. Fleckenstein: Catering to the bailout nation

3/21/08 Catering to the bailout nation by Bill Fleckenstein

Here's where building bubbles on top of bubbles has brought us. Instead of letting the market work and 'creative destruction' run its course, too many people want a handout.

How did we get here? How did the United States get itself into the untenable position where homeowners, Wall Street and most financial institutions need -- and more importantly, expect -- help from one government agency or another?

Another good question might be this: Can those proposing solutions to the current financial crisis answer those questions? If not, how do they know their course of action won't make matters even worse?

What must be understood is that the current economic crisis didn't start with the subprime-mortgage problems of 2007. It has been 20 years in the making (and is the subject of my recent book).

Our present predicament is the culmination of many poor policy decisions. Easy money, lax credit standards and the Federal Reserve's interference with the business cycle -- combined with a lack of supervision on the part of the Securities and Exchange Commission and bank regulators -- created an environment that led to excessive risk taking on the part of individuals and financial entities of all stripes.

more...
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/CateringToTheBailoutNation.aspx

[donkeyotay]

49. Aw, come on! One last bubble, pleeze? One for the road?

The post-Volcker Fed has changed all that. Ever since it bailed out Wall Street during the Long-Term Capital Management crisis in 1998, the financial system has become more leveraged and less transparent. In the ensuing 10 years, not only were interest rates not tightened to prevent a recurrence, the rules were loosened as the Glass-Steagall Act, which had regulated banks since 1935, was repealed.

The Alan Greenspan-led Fed fomented a bubble in stocks, then chose to shortcut the aftermath by creating a housing bubble. That has left us far, far worse off today, and I suspect there are no bubbles left with which to temporarily bail us out.

The Fed's encore bubble is to transfer decades with of corruption and fraud off their books onto ours. It'll take care of those pesky social security and medicare obligations, the uppity aspirations of a middle class to have a democracy, and leave us a compliant third-world work force for the new management coming in. Oh my. I don't mean to sound bitter or dwell in the past, but let's face it, they sold us out.

[Robbien]

38. UK: Revealed: the dirty tricks of rogue traders

A hedge fund based in London set up a "dirty-tricks unit" to manipulate share prices and get illicit information on companies in an attempt to make millions on the stock market, an insider has revealed.

As the official hunt began for the rogue traders who tried to bring down Britain's biggest mortgage lender, HBOS, The Daily Telegraph can reveal a whistle-blower's account of how a multi-billion pound fund allegedly used illegal tactics to drive down stock prices.

A Halifax branch: Revealed: the dirty tricks of rogue traders
Wanted: the trader who allegedly made £100m from the 17 per cent slump in HBOS shares

Private detectives were allegedly employed to hack into executives' emails and telephone records.

Front companies were set up to allow the hedge fund traders to pose as independent researchers or journalists.

Negative information on companies was then distributed to leading investment banks in the hope that rumours would spread and some share prices would fall.

The hedge fund, which cannot be named for legal reasons, stood to make millions from "short-selling" the shares as they fell in value.

The allegations — made in a sworn statement seen by The Daily Telegraph and which has been sent to financial regulators — will add to growing concern over the activities of rogue traders in the City.

The Financial Services Authority, the City regulator, has begun a criminal investigation to find the trader who allegedly made £100 million from the 17 per cent slump in HBOS shares on Wednesday.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/21/nhedgie121.xml

[fedsron2us]

42. Which all rather misses the point

that rumor mongers and short sellers can only get away with this sort of thing when there is actually something happening in the markets that makes the rumors plausible. If the British FSA had done its job properly and kept a tight regulatory hold on the banking system then Northern Rock would never have lent its way to self destruction and the tittle tattle merchants in the hedge funds would have nothing to spread malicious gossip about.

[Robbien]

44. There is one big hole in that logic

Northern Rock saw its share price drop on rumors that its clients, many who are speculators, are pulling their money out because of rumors that, well…clients are pulling their money out.

So speculators who bet against the bank because of rumors of a bank run are the exact same people who initiated the run on the bank.

[fedsron2us]

53. NR problems were caused by a bit more than rumors .

It was undercapitalised and overly dependent on the short term money markets to fund its mortgage business. It had started life as pretty decent Building Society ( a mutual S&L in US parlance) but expanded far too aggressively after it demutualised and became a bank. When the wheels came off the international credit markets its days were always numbered. What caused its share price to crash in autumn 2007 was not speculation in the market but the announcement issued by the BOE that it had been asked by the NR to supply financial support to the bank. The actual depositor run on the bank occurred after the BOE statement not before it.

[formercia]

46. 15 Tons of missing Gold.

It's down to brazen thievery:

http://www.bbj.hu/news/news_37598.html

SocGen fights for 15 tons of gold


21 Mar 2008
bbj.hu
French Societe Generale claimed that gold worth $500 million which they had given to Goldaş for selling at Istanbul Gold Market has been lost and filed a criminal report about the event.
The partner of Goldaş, Yalınkaya, said: "it is slander; we are shocked."

According to the claim of the French Bank, they gave the Turkish firm 15 tons of gold as consignee and authorized Goldaş for selling the gold in Istanbul Gold Market. However, the bank could not get the gold back. Goldaş made a written statement and rejected this claim. Goldaş claimed that Goldaş has a commercial dispute with Societe Generale; but the bank acted with malevolence. (Sabah)

[Danascot]

48. Oz Comedy on the Subprime Mess

Forgive me if this was posted previously. I thought it was pretty funny.

http://www.abc.net.au/australiawide/stories/2008/200803/s2190009.htm

[RUMMYisFROSTED]

51. Oil and NG dropping.

:rofl:

[formercia]

52. Overseas Markets

get your daily fix:

http://africa.reuters.com/instrument/chain.ehtml?s=.FTSE