Breaking News: The U.S. Economy is in the crapper.......

[marmar]

:hurts:


from AP, via Yahoo!:


Stocks drop on bank worries, FedEx profit warning
Wednesday June 18, 4:32 pm ET
By Tim Paradis, AP Business Writer
Stocks fall as financials slump, oil rises; Dow briefly dips below 12,000


NEW YORK (AP) -- Wall Street took a tumble Wednesday on renewed concerns about the financial sector and FedEx Corp.'s warning that weakening demand and surging fuel costs would weigh on profits in the coming year.

The Dow Jones industrial average finished down more than 130 points, after briefly dipping below the 12,000 mark for the first time since mid-March. All three major stock indexes finished down about 1 percent, as oil and bond prices jumped.

Unease about financials arose after several worrisome developments. Fifth Third Bancorp said it plans to cut its dividend by nearly two-thirds, raise $1 billion through an offering of preferred stock and generate another $1 billion through the sale of businesses.

MF Global Ltd. predicted that tight credit spreads will weigh on its fiscal first-quarter earnings. The futures and options broker said it plans to sell $300 million in convertible securities to help pay down a loan due this year.

And although Morgan Stanley reported a slightly better-than-expected fiscal second-quarter profit, earnings at the nation's second-largest investment bank were still down 61 percent from a year earlier on declining revenue. .....(more)

The complete piece is at: http://biz.yahoo.com/ap/080618/wall_street.html

.......

Reuters, via Yahoo!:


GM, auto shares tumble as outlook darkens
Wednesday June 18, 4:22 pm ET
By Kevin Krolicki


DETROIT (Reuters) - Shares of automakers General Motors Corp (NYSE:GM - News) and Ford Motor Co (NYSE:F - News), parts suppliers and auto retailers all tumbled on Wednesday as investors reacted to signs of a further slowdown in June auto sales and uncertainty about when the battered industry will hit bottom.

The sector-wide decline was accompanied by cautious notes from analysts on GM's liquidity and by a warning from CarMax Inc (NYSE:KMX - News) of the fallout from an unprecedented collapse in demand for larger trucks and SUVs.

In a move that underscored the pressure on the industry, Chrysler Chief Executive Bob Nardelli also told employees of the privately held automaker that overall sales had fallen below forecasts in early June.

GM's shares dropped almost 6 percent, touching their lowest level since the recession of 1982. Ford stock also fell nearly 6 percent, erasing gains for the week.

CarMax shares plunged nearly 11 percent as the largest U.S. used-car dealer suspended its financial forecast and said traffic at its stores had weakened since late May. .....(more)

The complete piece is at: http://biz.yahoo.com/rb/080618/autos.html

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Reuters, via Yahoo!:


Corporate America taking grimmer view of economy
Wednesday June 18, 2:17 pm ET
By Scott Malone


BOSTON (Reuters) - Corporate America's view of the U.S. economy has grown bleaker, weighed down by surging energy prices, a credit crunch and the worst housing slump in decades, according to two surveys released on Wednesday.

The polls showed the anxiety about the economy that has already spooked Wall Street -- the Standard & Poor's 500 index (^SPX - News) is down 9 per cent this year -- has spread to the corner offices of chief executives and chief financial officers, who expect to cut jobs to cope with rising costs.

The Business Roundtable's quarterly CEO Economic Outlook Index tumbled five points to 74.5, its lowest level since October 2003.

"Clearly, we've got a more gloomy scenario" than in the first quarter, said Harold McGraw, chairman of both publisher McGraw-Hill Cos Inc (NYSE:MHP - News) and the Roundtable.

"People are being very cautious, very cost-control oriented," McGraw told reporters on a conference call. "It's just the confluence of a lot of things that make people somewhat fearful." .....(more)

The complete piece is at: http://biz.yahoo.com/rb/080618/usa_economy_roundtable.html

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Clusterstock, via Yahoo!:



Why Consumer Spending Is a Slow Motion Train Wreck
Posted Jun 18, 2008 02:32pm EDT by Henry Blodget
From Clusterstock, June 18, 2008:

Retail sales were surprisingly good in April and May, but we believe this was primarily the result of the tax rebate checks--which will soon be spent. Meanwhile, consumers are likely to feel ever more strapped. Northern Trust's Paul Kasriel shows why:

First, the wealth effect. Americans are a lot poorer than they were a year ago. Specifically, thanks to declines in home equity wealth, they're almost $2 trillion poorer than they were a quarter ago, with $399 billion of that decline coming from the fall in real-estate equity:

Second, the loss of the gift that kept on giving: Home equity withdrawals. As house prices drop, Americans can't spend the annual increase in home prices, which they had been doing aggressively for more than five years. Mortgage equity withdrawals (MEW) have now dropped to 1999 levels:

At an annualized rate, active MEW peaked at $576 billion in the second quarter of 2006. Active Mew has slowed to only $114 billion in the first quarter of this year – the smallest amount since the fourth quarter of 1999 (see Chart 3). There is no doubt in my mind that active MEW, which actually puts additional cash into the hands of households, played an important role in boosting consumer spending in this past expansion. And there is no doubt in my mind that the recent and likely continued decline in active MEW will play an important role in retarding consumer spending in this recession. Because it has been easier to borrow against the increased wealth in one’s house than in one’s stock portfolio, dollar-for-dollar, falling house prices will have a more important negative effect on household spending that will falling stock prices.

Bottom line, American consumers have lost their most reliable source of debt financing, and spending is suffering accordingly. With house prices continuing to crash, mortgage equity withdrawals are likely to continue to shrink, putting more pressure on spending.

http://finance.yahoo.com/tech-ticker/article/28603/Why-Consumer-Spending-Is-a-Slow-Motion-Train-Wreck?tickers=itb

[K Gardner]

1. Just wait until the ripple effect from Midwest flooding/crop loss hits..

[marmar]

16. Yeah....I wonder what the fallout will be. I didn't realize what a huge food producer Iowa was.

:scared:

[greyghost]

22. You're spot on.

[islandmkl]

2. no, no, no....it's really all okay...

it's just the liberal media that keeps telling people things are bad, and then the people just believe it....

things are REALLY GOOD, EVERYWHERE, just look around....

no, no, don't look over there...

[Supersedeas]

6. insert smiling heavily powdered face of the flashy Biz Net Anchor trollop to add

substance to the Shiny Happy People Wallstreet/Madison Avenue Economic set

[Max_powers94]

3. I want to just take a long nap and wake up Jan 2009 :)

[ProfessorGAC]

21. Gonna Need A Longer Nap

Obama and the Dems can't fix this damage in a week, or a month. It's going to take at least two years to get this ship heading in the right direction.
The Professor

[aint_no_life_nowhere]

4. What does this do to oil futures?

Do Wall Street investors flock in even greater numbers to oil stocks when everything else experiences a downturn?

[kimmerspixelated]

5. All of this, is due to that little prick in the WH!

All of it, the friggin son's of bitches!

[lpbk2713]

7. The American economy may be in the crapper but look how well Halliburton has been doing.

One would tend to think there might
be something funny going on here.

[windoe]

23. Halliburton stole our taxes!

And now Cheney won't turn over his records to Waxman? We have to have this cash to rebuild!
Pretty soon we won't have to go on strike, because everyone will be unemployed and broke anyway.

[blues90]

8. Why don't people just face it , the economy is never going to be

BACK. It's completely screwed up , there are no jobs and no money for anything.

I don't think someone will ride in on a white horse and fix this mess.

I don't think any job is secure , here today , gone tomarrow and no one cares but the ones affected.

We will end up in tents eating leaves and what's left of the wild life.

Everyday you read about more people out of work and in the street and it should scare the hell out of everyone unless you are in the top few %.

[nadinbrzezinski]

9. It came back after the Great Depression

it will come back... question is, in what form

[blues90]

10. Maybe , I have a difficult time comparing today to the times of

the great depression. Back then we we not a huge global economy, we were not this technically advanced or anywhere near as populated. There was still land people could squat on and live.

It is so very different now days that I can't imagine how it would even look or work. It's not like you can go drink from a stream or camp out and build a shack today.

We have all sorts of laws that will push us out of anywhere we go.

Back then it was buddy can you spare a dime , what would it be today?

I just don't see a comparision in the two different worlds.

[nadinbrzezinski]

11. History never repeats itself fully, but this is going to put a kibush

on the current globalization project,

It will change and morph, but it will be very different when we come on the other side

Worst case, due to the end of peak oil, globalization will come to an end too

[marmar]

12. "question is, in what form"

Exactly. Hopefully in a sustainable, localized, respect-the-commons form.

[Imagevision]

18. Middle class taking a serious hit... but that's what they wanted George to eliminate

[Subdivisions]

13. Everything that is happening has long been pre-ordained and

predicted as being the consequence of passing the point of maximum world oil production and the beginning of oil depletion even as demand continues to rise.

The shit is hitting the fan. Stock food and water. Or don't. It's your choice.

[marmar]

15. Agreed.

n/t

[lonestarnot]

14. waiting and watching it all now in slow motion, falling off the cliff like a landslide. Bye Bye!

:hi:

[formercia]

17. "61 percent from a year earlier on declining revenue. "

Declining is the key word here.

Down she goes.

and the band played ' Nearer my God to thee.'

[lib2DaBone]

19. Everything Is Fine... it's just the Liberal Media

Boy Arrested after trying to steal food for family


A 16-year-old Port Charlotte boy was charged with felony burglary after he said he broke into Sandwich Land to steal food because his family was running out of food after his mother was fired from her job, the sheriff’s office reports.

Stephen Eugene Caporaletti of 361 Camillia Lane, Port Charlotte, was booked Wednesday on felony burglary to a structure and was released to his mother, the sheriff’s office reports.

The sheriff’s office responded to the U.S. 41 store at about midnight and found a back window broken and inside found shoe prints by it and backpack inside.

K-9 units were called and when a deputy said the 16-year-old walking on Bamboo Drive he said he appeared to be nervous, was carrying a flashlight and had black cloth gloves. His shoes, the deputy said, matched the footprints found at the store.

Deputies picked up the boy’s mother and took her to the sheriff’s office where they had taken Stephen. Shelia Caporaletti said she had told her son she lost her job and they were running out of food and may soon lose their apartment.

Stephen admitted to breaking into Sandwich Land to steal food. He said he used a rock to smash the window and put his backpack inside when the alarm sounded and he ran from the area. http://www.sunnewspapers.net/articles/bnStory.aspx?articleID=6789&bnpg=0
_________

Note-mine) Haliburton and Bush will go free, but let's make sure this kid rots in jail the rest of his adult life. We need the free prison labor.

[Prophet 451]

20. No shit, Captain Obvious?

Don't look at me, I'm busy stocking up on canned food.....