STOCK MARKET WATCH, Tuesday October 2

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday October 2, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 476 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2461 DAYS
WHERE'S OSAMA BIN-LADEN? 2173 DAYS
DAYS SINCE ENRON COLLAPSE = 2134
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 October 1, 2007

Dow... 14,087.55 +191.92 (+1.38%)
Nasdaq... 2,740.99 +39.49 (+1.46%)
S&P 500... 1,547.04 +20.29 (+1.33%)
Gold future... 754.10 +4.10 (+0.54%)
30-Year Bond 4.80% -0.04 (-0.72%)
10-Yr Bond... 4.56% -0.02 (-0.48%)






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: The Cart and the Horse

The values that built America are needed today
BY TONY ALLISON

The epic World War II documentary “The War” currently airing on PBS has certainly been an emotional history lesson for millions of Americans too young to remember its significance. The war affected every man, woman and child in America, and pulled the country closer than at any time in our history. It is important to not only remember and honor their sacrifice, but to consider that the values of the WW II generation may still be useful today.

The United States grew from a widely spread-out rural economy in the 1850’s to the most powerful country in the world in just one century. In historic terms, that’s a blink of an eye. The horses that drove that epic growth were savings and industrial production. The ultimate source of this horse-power was the hard work, sacrifice, frugality and risk-taking of millions of Americans, looking for a better life. Consumption, as represented by the cart, has been happily pulled along as the nation’s savings and production steadily grew over that century. The horse has pulled the cart up some immense mountains (wars, depressions, inflation, natural disasters etc.) during that century. But over the last 30+ years, the cart has been riding downhill without much help from the horse. Consumption has grown tremendously as a % of GDP, and now comprises approximately 70% of the economy.

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

[Rydz777]

9. Great comment ary by Tony Allison. It recently occurred to me

that to our forebears who built the economy of this country,the word "consumption" actually referred to a disease - their word for tuberculosis. Now we have turned consumption into 70 percent of our economy while simultaneously de-industrializing and achieving a negative savings rate.

[ozymandius]

2. Today's Reports

10:00 AM Pending Home Sales Aug
Briefing Forecast NA
Market Expects -2.0%
Prior -12.2%

5:00 PM Auto Sales Sep
Briefing Forecast 5.2M
Market Expects 5.1M
Prior 5.1M

5:00 PM Truck Sales Sep
Briefing Forecast 7.2M
Market Expects 7.2M
Prior 7.6M

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

[feloneous cat]

13. How to make these numbers look good...

It is all very easy.

For example: Pending home sales, you just add a "-". So -12.2% becomes --12.2% or +12.2%.

WOW!!!! Why hasn't MSM caught on to this? They could EASILY blame human error (after all, the "+" key and and "-" key are right next to each other!). And with BLOGS sometimes doing BETTER than MSM in both accuracy and timeliness, they can always run their corrections where they usually do.

I feel a whole lot better about this economy now!

:P

[UpInArms]

32. U.S. Aug. pending home sales fall 6.5% to 6-year low

45. U.S. Aug. pending home sales fall 6.5% to 6-year low
10:00 AM ET, Oct 02, 2007 - 4 hours ago

sorry to be so absent - but ... there's not enough of me to go around these days

:hi:

[ozymandius]

3. Oil prices slip further in Asia

SINGAPORE - Oil prices slipped below $80 a barrel Tuesday as investors stayed on the sidelines ahead of the U.S. Energy Department's weekly report due Wednesday.

Light, sweet crude for November delivery slipped 34 cents to $79.90 a barrel in Asian electronic trading on the New York Mercantile Exchange by midafternoon in Singapore.

The contract fell $1.42 to settle at $80.24 a barrel Monday in the U.S. amid continuing concerns that market fundamentals do not support recent record-high prices. The front-month dipped as low as $79.45 during the floor session.

-cut-

Gasoline inventories are expected to have gained 400,000 barrels on average, according to the survey, while distillate inventories were tipped to have risen 700,000 barrels. Refinery use was expected to have risen 0.4 percentage point to 87.3 percent of capacity.

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

[ozymandius]

4. Good morning everyone.

:donut: :donut: :donut:

It's an unusual morning with a surprise substitute teaching call. This is the limit of posts for me until after the close this afternoon.

Have a great day. Don't let the Fed Bugs bite.

:hi:

[skids]

5. OK futures up-ish but dollar regaining a toehold...

...sucker rally gets harvested when? I'm still learning the ropes here.

[Roland99]

14. Lately it's been pretty quick to go back to the bearish side...2-3 days later.

[Ghost Dog]

6. Asian Stocks Rise as Credit Concerns Ease; Mitsubishi UFJ Gains

http://www.bloomberg.com/apps/news?pid=20601080&sid=a.c8iIynq5HQ&refer=asia

Oct. 2 (Bloomberg) -- Asian stocks rose, led by Mitsubishi UFJ Financial Group Inc. and Samsung Electronics Co., after former U.S. Federal Reserve Chairman Alan Greenspan and Citigroup Inc. suggested credit-market losses will abate.

Mitsubishi UFJ and Kookmin Bank advanced after Greenspan said lenders are displaying a willingness to take on greater risk and Citigroup forecast earnings will improve this quarter. China Mobile Ltd. led Hong Kong's Hang Seng Index 3.8 percent higher to a record on speculation China's $200 billion investment fund will target the city's shares.

``It's a combination of credit-market concerns subsiding and the strength of Asian economies'' that's boosting equities, said Mark Tan, who helps oversee $3 billion in Asian equities at UOB Asset Management in Singapore.

The Morgan Stanley Capital International Asia-Pacific Index added 2 percent to 166.51 as of 4.20 p.m. in Tokyo, extending its gains since mid-August to 21 percent. The Hang Seng has surged 38 percent since then and the market value of Hong Kong- listed stocks has jumped more than $685 billion.

Japan's Nikkei 225 Stock Average closed above 17,000 for the first time in more than seven weeks and benchmarks in Australia, Indonesia and Singapore rose to records. Stock markets in China and India are shut for holidays today.

/...

[Ghost Dog]

7. Hong Kong's Hang Seng Index Surges: World's Biggest Mover

http://www.bloomberg.com/apps/news?pid=20601080&sid=auiFAycGTo5M&refer=asia

Oct. 2 (Bloomberg) -- Hong Kong's Hang Seng Index closed above 28,000 for the first time, on speculation China's $200 billion investment fund will target Chinese shares listed in the city. China Mobile Ltd. paced the gain.

``There's no doubt there will be additional liquidity coming into the Hong Kong market,'' said Pauline Dan, who helps manage $2.5 billion at Manulife Asset Management in Hong Kong. China Investment Corp., the country's sovereign wealth fund, began operations on Sept. 29, the latest government effort to funnel excess funds out of the mainland's capital markets.

Bank of China Ltd. led lenders higher after Citigroup Inc. forecast improved earnings as credit market losses abate. Sun Hung Kai Properties Ltd. climbed on speculation Chinese demand will extend beyond equities into Hong Kong real estate.

The Hang Seng added 1,057.28, or 3.9 percent, to close at 28,199.75 in Hong Kong, the biggest fluctuation among equity markets included in global benchmarks. The measure has jumped 38 percent since the start of trading on Aug. 20, when China said it will allow some citizens to invest directly in Hong Kong's stocks. The value of the city's equities surged $685 billion in that time, about the same as the gross domestic product of the Netherlands.

The Hang Seng China Enterprises Index, which measures 43 so- called H shares of Chinese companies, jumped 5.6 percent to 17,973.87. October futures on the main Hang Seng benchmark climbed 3.8 percent to 28,215.

/...

[Ghost Dog]

8. Tokyo heartened by Wall Street’s rally

http://www.ft.com/cms/s/0/1cadee20-70c4-11dc-98fc-0000779fd2ac.html

Japanese stocks surged on Tuesday, taking heart from Monday’s rally on Wall Street and following in the footsteps of other global markets.

The Nikkei 225 ended the day 1.2 per cent higher at 17,046.78, while the broader Topix was up 1.5 per cent at 1,639.79.

Sony, the consumer electronics and entertainment group, gained 4.3 per cent to Y5,890 after saying the proposed spin-off of its financial unit would boost pre-tax profit by Y78bn. Investors also dived in on expectations that the group will steal a march on competitors by launching the world’s first television employing organic light-emitting diode technology in December.

Other consumer electronics makers were also on the rise, including camera-maker Canon, which rose 2.6 per cent to Y6,400.

Banks stocks were likewise in the limelight, drawing strength from perceptions that the worst of the global credit turmoil is over. Mitsubishi UFJ Financial Group, the world’s biggest bank by assets, jumped 5.6 per cent to Y1,114, while Sumitomo Mitsui Financial Group climbed 3.9 per cent to Y915,000.

/..

[Ghost Dog]

10. European shares at 2-mth high, banks lead gains

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=eurMktRpt&storyID=2007-10-02T112944Z_01_L02250733_RTRIDST_0_MARKETS-EUROPE-STOCKS-UPDATE-2.XML
Tue Oct 2, 2007 12:29 PM BST

LONDON, Oct 2 (Reuters) - European shares rose for the second straight session on Tuesday as global stocks hit record highs and banks took pole position on increased clarity about the impact of the credit markets crisis on their results.

BNP Paribas (BNPP.PA: Quote, Profile , Research), Societe Generale (SOGN.PA: Quote, Profile , Research), Barclays (BARC.L: Quote, Profile , Research) and RBS (RBS.L: Quote, Profile , Research) all gained between 3.3 and 4.6 percent. UBS (UBSN.VX: Quote, Profile , Research) and Credit Suisse (CSGN.VX: Quote, Profile , Research), both of which outlined details of their results, rose more than 3 percent.

Tesco (TSCO.L: Quote, Profile , Research) added 3.5 percent as the UK retailer issued a robust outlook despite a slowdown in growth in its core British market in the first six months.

By 1055 GMT, the pan-European FTSEurofirst 300 index <.FTEU3> was up 0.7 percent at 1,572.7, adding to Monday's 0.8 percent rise, and boosting the year's gains to 6 percent so far this year. The index rose to its highest level since July 26.

"The key determinant here is to what extent has the credit crunch concern actually hit the real economy," said Stephen Dowds, head of international equities at Northern Trust Global Investments. "And the evidence we have seen in the U.S. is that the central bank doesn't want that to happen, and elsewhere there appears to be relatively little impact so far from it."

Around Europe, London's FTSE 100 index .FTSE gained 0.3 percent, Frankfurt's DAX <.GDAXI> added 0.5 percent and Paris's CAC-40 <.FCHI> rose 0.8 percent.

/...

[Ghost Dog]

24. Banks propel European stocks to 10-week high

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=2007-10-02T153550Z_01_L02417259_RTRIDST_0_MARKETS-EUROPE-STOCKS-CLOSE-URGENT.XML
Tue Oct 2, 2007 11:35am ET

PARIS, Oct 2 (Reuters) - European stocks rose on Tuesday to a ten-week high, as banks rallied on hopes the worst of the credit crunch might be behind, but the gains were limited by a drop in energy shares, falling along with crude oil prices.

The mining sector also retreated amid mixed metal prices and after a sharp rally over the past two weeks.

The FTSEurofirst 300 <.FTEU3> index of top European shares unofficially closed 0.3 percent higher at 1,567.97 points, its highest close since July 25.

Shares of financial institutions led the rally as investors were relieved by increased clarity about the impact of the squeeze in the credit markets on banks' results. "It has been a crisis of information. We know there is a wolf in the sheepfold but we don't know where. So when a bank comes out with negative news, the market is relieved because at least it sheds light on the situation," said Pascal Blanque, chief investment officer of Credit Agricole Asset Management. UBS (UBSN.VX: Quote, Profile , Research), which warned on Monday it would report a third-quarter loss after writedowns of 4 billion Swiss francs ($3.42 billion), gained 3 percent, while Royal Bank of Scotland (RBS.L: Quote, Profile , Research) surged 3.7 percent and Barclays (BARC.L: Quote, Profile , Research) jumped 3.6 percent.

[Ghost Dog]

11. This from the LEAP/E2020 people, mid-September

(if not posted already):

http://leap2020.eu/GEAB-N-17-is-available!-The-current-crisis-explained-in-one-thousand-words_a934.html?PHPSESSID=1b35f747f8c8cdee7b8beb462c7de388

< - long snip - >

And that's what it's all about! And that is the reason why the ECB is literally flooding European banks with liquidities. Jean-Claude Trichet probably remembers the collapse of Crédit Lyonnais (11). The subprime crisis is nothing but a trigger. Indeed the whole of the financial bubble based on US debt is bursting, because the US consumer is battered and the US economy is now in recessflation, as described by LEAP/E2020 in GEAB N°16 (June 2007). Behind those subprime mortgages, all US mortgages, car loans, credit cards… are now facing a dramatic increase in the default rate (the public debt follows the same trend as the US dollar and Treasuries keep on dropping).

In other words, the wisest people in the global banking and financial sphere (which excludes most of today's large international bank leaders) know that in the coming six months some entire sectors of activity and corresponding results will either vanish or experience record-losses.




Given that the real economy is already infected not only in the US but all over the world, the collapse of the British, French and Spanish housing markets is next on this year's agenda, while Asia, China and Japan are about to face the simultaneous collapse of their exports to the US market and of the value of all their UD dollar-denominated assets (US currency, treasury bonds, corporate shares, etc…). The chart above is explicit about which countries will be hit hardest when the US debt bubble bursts, i.e. Japan, China, United Kingdom and countries exporting oil in US dollars.

Concerning future steps, LEAP/E2020 only has two interrogations: how many experts, central bankers, financial journalists, politicians fascinated by America will be able to understand this sequence of events that questions so deeply their vision of the world? And shall they understand soon enough, not wasting time expecting « jolts » and « rebounds » from an America that has not much left to do with mid-20th century' America.

A speed race between reality and theory is now open. All in all, a systemic crisis always boils down to such a race and the winner is always reality. Policy-makers, if they are lucid, can avoid a brutal and frontal collision with facts, thus sparing their populations from big damages. Throughout the planet, the months to come will enable to tell the wheat from the weeds in this matter.

LEAP/E2020 is convinced that the “US Very Great Depression” announced for 2007 is indeed next on History's agenda, and that it will have consequences incommensurable with the 1929 crisis, even though a number of indicators common to both crises started blinking a few months ago, and even though 1929 remains the last possible comparison in modern History (12).

/...

[Demeter]

12. The Poor Japanese! Tell Your Neighbor 1929 Is Making a Reappearance,

and get called an hysterical nutcase. This happened to me last week. Of course, the neighbor is maybe 15 years younger, and that much farther removed from the Depression. My parents were Depression babies, my grandparents and Great-grandparents lived through it and told us about it. I saw the scars it left, not just financial, but emotional.

Those who cannot learn the lessons of history have doomed us all to repeat it.

[feloneous cat]

15. Personally, this is overly simplistic analysis of a very, very complex issue

The U.S. had a collapse of the housing market in the late 80's with many companies going bankrupt. This necessitated the bailout of the S&L's when (at the time) we were told we could ill afford it. For a timeline, please look here.

http://www.fdic.gov/bank/historical/s&l/

Now, for those who remember, behind every problem there seems to be a Bush. Yes, Neal Bush was involved in part of the S&L problems

http://www.washingtonpost.com/ac2/wp-dyn/A35297-2003Dec27?language=printer

Papa Bush was the one who "fixed it" with rules that allowed previous owners of the failed institutions to rebuy back the S&L at a reduced cost (how nice).

Allegedly there was a fix proposed but the FDIC website doesn't seem to have a link to that (hmmm... and this was under Papa Bush... like father, like son).

What does this have to do with today? It seems that the general consensus is that we must have a "bubble" in order for this country to be viable. Now I don't know what YOUR definition of a bubble is, but to me it is perceived value exceeding real value. (Yes, I'm aware that "value" is a relative term, but this is, again, part of the problem we have in this country). For example, there are many stocks on the market RIGHT NOW where less than stellar but are selling at 80, 90, 100 dollars a share. Over valued? YOU THINK!?!?

The market resembles less like the market everyone is taught about and more like a Vegas casino - lots of noise and bustle and you need at least X number of dollars to buy in - but once you are in, it is a roller-coaster ride!

What part of ANY of this makes for a stable economy?

Yes, there are lessons to be learned by 1929. First, you need an SEC with teeth. Second, you need to punish folks who BS to stockholders. Third, bad companies need to DIE, not be propped up by the US Gov.

Finally, this is the big one now and a LOT of you are going to hate it, the United States needs to stop outsourcing the technology that made it a leader. Who ever it was that thought the U.S. would just be the brains and the rest of the world would be manufacturing is an idiot. It makes a gross assumption that there aren't brilliant people in other (poorer) countries. It also assumes that they won't leapfrog you.

In fact, it makes a LOT of assumptions that are really a product of nationalism.

The bottom line is that were businesses to think more about "how does this affect the country" rather than "how does this affect my bottom line" we may be able to avert a Depression.

But it will never happen.

[Hugin]

17. Good observations, feloneous cat.

and WELCOME TO DU! :party:

[JNelson6563]

16. What's going on?

Dow 14,066.82 -20.73 -0.15%

Nasdaq 2,738.31 -2.68 -0.10%

S&P 500 1,543.83 -3.21 -0.21%

That drop's so sharp I nearly cut myself. Gonna be a lot of deflated windbags on CNBC if the PPT doesn't show up soon.

Julie

[Hugin]

18. Yet another market metaphor... by Prag.

This market is more like a hot air balloon than a helium balloon... When it sinks they have to pump in more
hot air.

I think it has something to do with lies and self-deception.

[AnneD]

29. The old saying in Hollywood is....

don't believe your own press clippings. :evilgrin:

[Ghost Dog]

21. Looks like another of those weird days (11:30 EST):

It says here:

Dow 14,059.83 Down 27.72 (0.20%)
Nasdaq 2,739.55 Down 1.44 (0.05%)
S&P 500 1,544.06 Down 2.98 (0.19%)
10-Yr Bond 4.5220% Down 0.0350
NYSE Volume 1,014,156,000
Nasdaq Volume 642,408,000

(Commentary stuck --> ) 10:30 am : The stock market remains in negative territory following a disappointing pending home sales report.

According to The National Association of Realtors, August's annualized pending home sales dropped 6.5%. The consensus estimate called for a drop of 2.0%. Pending home sales are down 21.5% compared to last year.

The Homebuilding group certainly has not been fazed by the report, as it currently leads this morning with a 6.6% gain. Homebuilding outperformed yesterday after Citigroup upgraded several large cap homebuilders.

The rush to buy homebuilders today in the face of such weak data indicates to us that there is a speculative underpinning to the group's rally. In other words, we wouldn't be surprised to see selling into the strength.DJ30 -27.96 NASDAQ -3.66 SP500 -3.83 NASDAQ Dec/Adv/Vol 1114/1509/327 mln NYSE Dec/Adv/Vol 1283/1687/204 mln

10:00 am : The stock market has taken a modest dip below its opening level, but investors are still not taking much of yesterday's profits considering the scope of the day's gain.

The financial sector (+0.5%) is the early-morning standout as it continues yesterday's leadership role.

The energy sector (-1.1%) is lagging this morning as crude oil futures slip another 0.32% to $79.99 a barrel.

DJ30 -5.69 NASDAQ -1.33 SP500 -0.81

09:40 am : The major indices are holding yesterday's large gains following the opening bell.

The big news this morning is that TD Bank Financial Group (TD) is going to acquire Commerce Bancorp (CBH) for $8.5 billion.

/...

[Ghost Dog]

28. What's driving the stock market to new highs?

http://www.msnbc.msn.com/id/21086790/

With the housing market in a tailspin, some economists ratcheting up recession forecasts, and major banks reporting big losses, the stock market is on a roll, rising to record highs. How can that be?

...

For weeks, Wall Street has been watching the collapse of the housing market, along with the meltdown of the mortgage market, and waiting to see just how badly banks and other financial institutions had been weakened. As more and more loans went bad, a number of smaller lenders, especially those that specialized in subprime loans, closed their doors or got snapped up by larger firms. What wasn’t clear was just how badly the biggest lenders were hit by the credit meltdown.

On Monday, a big piece of uncertainty was resolved when Citigroup warned that third-quarter earnings will probably drop by 60 percent, as the nation's biggest financial institution takes more than $3 billion in writedowns for securities backed by bad mortgages and troubled loans for corporate buyouts. Swiss bank UBS also said Monday it will post a loss of up to $690 million in the third quarter, partly due to losses linked to U.S. subprime mortgages.

While those numbers are big, investors seem to think they’re manageable, said Sam Stovall, chief investment strategist at Standard & Poor's.

“They were assuming the worst,” he said. “What’s happening is that they are now being able to quantify it. And they’re saying, 'Gee, these are big companies, and it’s something they would rather not do, but they can handle it.'”

Some market watchers also believe that lenders now reporting losses or big writedowns are positioning themselves for possible bad loans to come. The sharp increase in mortgage defaults, and the resulting damage to their loan portfolios and mortgage-backed bond holdings, provides banks with a strong cover to get as much bad news out of the way as possible. According to that view, while more loan problems may lie ahead, they won’t be as bad as those now being reported for three-month period just ended.

/..

--> ie. "Worst is now quantified and is over". Oh yeah? Wanna bet? :eyes:

[stormymonday]

38. Well it is certainly not three month Euro LIBOR

which is still hitting new highs on a daily basis

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=allBreakingNews&storyID=2007-10-02T150128Z_01_L02443084_RTRIDST_0_MARKETS-LIBOR-UPDATE-1.XML

There is still a lot of fear out there.

[Hugin]

19. Pending home sales fall to record low

"August decline was much worse than expected"

AP -- via http://www.msnbc.msn.com/id/21098131/

"The NAR said Tuesday its seasonally adjusted index of pending sales for existing homes fell 6.5 percent from July and 21.5 percent from a year ago.

August’s reading of 85.5 was below analysts’ expectations and the lowest ever for the index, which started in January 2001. Analysts surveyed by Briefing.com had predicted the index would fall by 2 percent from July."

[Roland99]

20. The economy needs to catch up to the admin. in terms of lowered expectations

[Ghost Dog]

26. Sun Rising On Asian House Markets

http://www.findaproperty.com/displaystory.aspx?edid=00&salerent=0&storyid=20874

House prices in the Asia-Pacific region are on the up but the Baltic boom is coming to an end, says The Global Property Guide…



/details...

[Ghost Dog]

22. FOREX-Dollar rises on profit taking before jobs data

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20071002:MTFH22633_2007-10-02_14-57-42_N02396819&type=comktNews&rpc=44

...

"The dollar is firmer across the board as profit-taking on short dollar positions gets into full swing," wrote currency strategists with Brown Brothers Harriman in New York in a note to clients. "Underlying dollar bearish sentiment has not disappeared but a good deal of it has been priced in."

The dollar index <.DXY>, a gauge of the greenback's value against a basket of six major currencies, added 0.5 percent to 78.311, rebounding from a lifetime low of 77.657 hit on Monday.

The euro <EUR=> was down 0.5 percent at $1.4155, not far from Monday's all-time high of $1.4281, according to Reuters data.

Few analysts believe the dollar's long-term decline has ended or that the troubled U.S. housing sector -- the source of global credit market turmoil -- has turned around. But for now dealers said the bar has been raised for news that can drag the dollar sharply lower.

A report on Tuesday showed an index tracking pending U.S. home sales in August fell to the lowest since 2001, when the history of the data began. However, the dollar actually strengthened modestly, as dealers cashed in bets against the greenback at attractive levels.

"In general the market is pretty well aware of the housing recession, and so the immediate impact of these kind of numbers is going to become less pronounced going forward," said Dustin Reid, foreign exchange strategist with ABN AMRO in Chicago.

The dollar was steady at 115.71 yen <JPY=>, while the euro shed half a percent to 163.93 yen <EURJPY=>.

The Australian dollar dropped after it struck an 18-year high against the U.S. dollar this week, falling 1.2 percent to US$0.8828 <AUD=>. The New Zealand dollar also lost one percent versus the greenback <NZD=>.

Apart from economic data and positioning, market participants have been taking notice of increasing jawboning by European policy-makers ahead of the G7 meeting. Many analysts believe European Central Bank President Jean-Claude Trichet's statements on Monday referring to the U.S. government's strong dollar policy could set the stage for a concerted push for stronger language on currencies ahead of the G7 meeting.

/...

[Ghost Dog]

23. Europe guns for U.S. help to tame rampant euro

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20071002:MTFH22626_2007-10-02_14-57-33_L02382914&type=comktNews&rpc=44

BRUSSELS/PARIS, Oct 2 (Reuters) - The euro zone will push for an attempt to bolster the recently fragile U.S. dollar at this month's G7 meeting but Britain may be reluctant to join the fray to make it a Europe-wide initiative.

Ahead of the Oct. 19 meeting, the 13-nation bloc's finance ministers will seek the backing of U.S. Treasury Secretary Henry Paulson, who has so far refused to sing from their songsheet.

In the last year, the euro has risen around 10 percent versus both the dollar and yen, and fresh highs over recent weeks have compounded fears that exporters from the region will suffer.

Euro zone officials said on Tuesday plans were afoot to press for a more combative stance on the matter when finance ministers meet in Luxembourg next Monday to prepare for G7 talks scheduled for Oct. 19 in Washington.

/..

[Ghost Dog]

25. (DailyFX) ECB - No More Beyond 4% (?)

http://www.dailyfx.com/story/topheadline/ECB___No_More_Beyond_1191319928106.html?engine=rss&keyword=article

Last night it only took 70 euro cents to purchase one US dollar as the EURUSD reached a new record high of 1.4260. As euro continues its relentless march upward against the greenback it is easy to imagine 1.4500 or even 1.5000 as the next big target for the pair.However, while the long term trend in the EURUSD remains up for the time being, this Thursday’s ECB announcement of its interest rate decision could prove to be a serious obstacle to further gains for the pair in the near term.

Consensus forecast call for the ECB to keep rates on hold and although President Jean Claude Trichet is likely to maintain a hawkish posture at the post announcement press conference there is good reason to believe that the current 4% rate may be the top in current tightening cycle as EZ economic growth shows evidence of peaking. Once the foreign exchange market begins to adjust to the notion of no additional rate hikes from the Euro-zone the euro rally may come to a grinding halt as traders abandon the idea of capturing further yield gains from the currency.

Eurozone Economy – Problems on the Horizon

Manufacturing Weakens

Although on the surface the economy in the 13–member region appears sound, the latest economic data suggests that EZ growth may be slowing substantially. The latest PMI manufacturing readings, while still signaling expansion recorded their lowest value in 18 months printing just above the 50 boom/bust line at 53.2. Looking beyond the headlines, the French PMI component came within whisker of falling into contraction territory as it printed at 50.5. Little wonder then that France has been the ,most vociferous opponent of higher euro as its industrial sector is clearly suffering from unfavorable exchange rate differentials.

France’s problems are not unique, however. Higher exchange rates will hurt the other major EZ economies soon enough if they continue to remain at these elevated levels. Germany, which so far has fared better than its neighbor, saw July Factory Orders drop by -7.7% and this sharp decline occurred before the EURUSD crossed the 1.4000 figure. Should EURUSD appreciate further, the EZ export sector which has been the primary engine of growth in the region, would suffer from a serious competitive disadvantage and drag the rest of region’s economy down with it.

...

If the ECB does indeed stop at 4%, the EURUSD will no longer trade on future expectations of additional rate increases but rather on its old familiar terms as the anti-dollar. It may indeed rally to 1.45 or possibly even 1.50 but only if US experiences a severe recession that would force the Fed to lower interest rates markedly, If on other hand, US economy stabilizes and continues to outperform the Euro-zone, the dynamic that propelled the EURUSD higher over the past 18 months may begin to reverse as interest rate expectation for the two largest economies of the world begin to change. This week’s ECB meeting may be the first clear signal that EZ rates will no longer rise and as such could be a important milestone for currency traders to consider.

/...

[antigop]

27. State Street's Securities Finance Team Establishes Presence in Luxembourg (Securities Lending)

http://biz.yahoo.com/bw/071002/20071002005836.html?.v=1

>>
State Street Corporation, (NYSE: STT - News), the world's leading provider of financial services to institutional investors, announced today that it has expanded its securities lending presence in Continental Europe. State Street has named Stefan Corthouts as vice president of new business development for Continental Europe, based in Luxembourg. Prior to this role, he was responsible for new business development of State Street's offshore investment services product offering.

"With an increasing demand for experienced and sophisticated securities lending providers across this region, increasing our local presence is important as we continue to grow our securities finance business," said Chris Holzwarth, managing director of State Street's securities finance team. "Stefan has a deep understanding of the marketplace across Continental Europe and of the local Luxembourg marketplace. His broad market knowledge, combined with over 14 years of industry experience in Europe, makes him a great addition to our team," added Holzwarth.
>>

I've asked this question previously on the stock market thread...I'll ask again.

Can a CDO be used as collateral in a securities lending transaction?

[fasttense]

31. Well, I thought that was part of the problem with CDOs

That people borrowed to buy them and turned around and used them as collateral to borrow again. Dr. Housing bubble had an article on how it works (or worked, I'm not sure they are doing as much of that anymore), but I've looked and can't seem to find the article now.

You could look here for the article, if you are interested. http://www.doctorhousingbubble.com/

[antigop]

33. But there are regulations governing securities lending

And I'm trying to find out if CDOs are "legal" collateral in a securities lending transaction.

<edit to add> Or are the laws vague enough to allow it?

[stormymonday]

37. You could equally ask whether Credit Default Swaps

are insurance and therefore should be subject to the laws regulating that activity. A lot of credit derivatives appear to be designed to skirt around the edges of existing legislation.

[Ghost Dog]

39. Would depend on the valuation placed on the CDO, one would think?

[antigop]

41. Dunno. That's why I asked. Here's why I am concerned....

State Street is involved with 401(k)'s. Maybe my tinfoil hat is just on a little tight these days.

[DemReadingDU]

45. My EDS pension check is sent to me via State Street

I would think State Street gets some kind of fee for this. I wonder who is getting rich off my teeny pension.

:mad:

[AnneD]

30. Morning Marketeers.....

:donut: Great toon. I have been thinking a bit about Myanmar. I liked it better when it was Burma. The Generals want to change the name so people don't know what they have done to Burma. Fair enough. But I think they need to give it a fitting name that really describes life there. I think it should be called the republic of Mallomar. Life is soft and sweet for those at the top, but for the majority of Burmese, it is a rock hard life and they have to scrape to get by. So here's to you....oh Beautiful Republic of Mallomar.

I saw on another DU thread, that it was getting more expensive to pay their Indian employees that they had outsourced work to. It is hard to tell if you want to laugh or cry. Two hundred twenty four years to build up and 8 years to destroy. I never thought I would see us become a banana republic. So here's to you...the Banana Republic of America.

Happy hunting and watch out for the bears....

[AnneD]

34. Greenspan sees signs the credit crisis is passing

LONDON _ Former Federal Reserve chairman Alan Greenspan defended the U.S. sub prime mortgage market, arguing the repackaging and sale to investors of risky home loans — not the loans themselves — was to blame for the current global credit crisis.

Greenspan warned the long-term effects on the economy were still being determined, but said there were some early signs of an easing in the crisis.

<snip>
"We are not through with this yet," he added, suggesting there could still be what he termed an "Act II," in which falling house prices feed into slower consumer spending.

<snip>

Greenspan defended the role of central banks and market regulators, claiming they do not have the resources to deal with criminal or illegal acts.

<snip>
"I'm terribly concerned that we would cut back on the availability of sub prime that has enabled a very significant increase in mortgages among minorities in the United States," he added.

<snip>
http://www.chron.com/disp/story.mpl/business/5180807.html


Honestly, the only thing he can sees passing these days is gas :sarcasm:

I love that the foxes are guarding the hen house here:spray:

[Roland99]

35. So, he wants to continue putting minorities into shady financing deals?

What a fine individual!

[AnneD]

40. Yeah....

I caught that Republican superior class ism. Reminds me of Chariots of Fire when Harold Abraham talked about British bigotry 'they lead you to water, but they won't let you drink.'

These folk let you get to the water, take a drink, then yank the troth away from you (or steal it).

[feloneous cat]

42. Worse...

Lead you to water, let you drink it, yank the trough away...

THEN PUMP YOUR STOMACH TO GET THE WATER BACK!

[AnneD]

47. Touche....

:rofl:

Oh, and by the way the trough was from China, you have lead poisning and no health care to get treatment! ;)

[AnneD]

36. Electronic pay cards for those who lack bank accounts

By L.M. SIXEL
Copyright 2007 Houston Chronicle

A few years back, companies realized they could save money on payday by directly depositing money into their employees' bank accounts.

Direct deposit meant they didn't need to pay to print checks or for postage. And the benefits didn't stop there. Employees get immediate access to their money and no longer had to dash to the bank to make a deposit.

But this trend had its limits. Many employers, such as fast-food restaurants, have a lot of low-wage workers who don't have checking accounts. They still need to cash their paycheck.

Enter the debit card.

<snip>
Earlier this year, Jack in the Box launched what it dubs the Jack PayCard.

<snip>

Interesting article. Ms Sixel is consistently good reporter. I have been interviewed by her on more than a few occasions. She always scopes out good stories. This one has some interesting implications.

[KoKo]

43. AnneD...do you have the link for this? Thanks!

[AnneD]

48. Sorry....

I thought I put the link with it. :blush:

Here it is......

http://www.chron.com/disp/story.mpl/business/sixel/5167796.html

[ozymandius]

44. Jeebus! A little mother f*%@#*ing sanity would be great for once. Closing numbers.

Today money left the safety of the Dow 30.

Dow 14,047.31 Down 40.24 (0.29%)
Nasdaq 2,747.11 Up 6.12 (0.22%)
S&P 500 1,546.63 Down 0.41 (0.03%)
10-Yr Bond 4.529% Down 0.028
NYSE Volume 3,074,014,500
Nasdaq Volume 1,780,609,250

4:25 pm : The major indices managed to finish Tuesday mixed after spending the majority of the day in negative territory following a disappointing pending home sales report. The Dow and the S&P 500 suffered negligible losses given the scope of Monday's gains while the Nasdaq tacked on another six points.

The National Association of Realtors reported that annualized pending home sales for August dropped 6.5% from July and declined 21.5% compared to last year. The consensus estimate called for a drop of 2.0% in August.

The big news before the open was that TD Bank Financial Group (TD 72.65, -4.29) plans to acquire Commerce Bancorp (CBH 39.47, -0.14) for $8.5 billion. At 13:20 ET the companies confirmed TD Bank Financial Group has signed a definitive agreement to purchase Commerce Bancorp in a 75% stock and 25% cash transaction.

On a related note, J.C. Flowers made mid-day headlines after making a revised offer for student lender SLM Corp (SLM 50.09, +0.19), otherwise know as Sallie Mae. The offer is now for $50 per share plus warrants with a potential payout of up to $10 per share.

Last week, J.C. Flowers, Bank of America (BAC 51.72, +1.08) and JPMorgan Chase (JPM 47.16, +0.35) pulled out of their planned $60 per share buyout offer citing a changed economic environment. Sallie Mae scoffed at today's offering, stating in a press release that they, "expect Bank of America and JPMorgan Chase to honor their contract, not breach the contract."

The major sectors finished the day mixed, with five of the ten sectors in the green. Continuing yesterday's leadership role, the financial sector (+0.8%) paced the market today. Consumer discretionary (+0.3%) finished second.

The energy sector was down as much as 2.0% earlier in the session, but recovered some lost ground to finish the day down 1.3%. Materials (-0.5%), a leader yesterday, was also a notable laggard.

Small-cap and mid-cap stocks performed much better than their large-cap counterparts on Tuesday. The Russell 2000 finished the day up 0.9% while the S&P 400 Mid-Cap index finished up 0.5%.

The dollar index made some decent gains today and finished up 0.46%. The strengthening dollar weighed on commodities today, as evidenced by the 1.0% decline in the CRB index. Crude oil futures for November delivery were down as much 1.0%, but managed to rebound to the unchanged mark by market close.

Tomorrow, the Institute for Supply Management will release its September services report. Briefing.com expects the reading to come in at 54.0 versus 55.8 in the prior month. Per usual, the Department of Energy will release its weekly inventory report at 10:30 ET. DJ30 -40.24 NASDAQ +6.12 R2K +0.9% SP400 +0.5% SP500 -0.41 NASDAQ Dec/Adv/Vol 1204/1745/1.77 bln NYSE Dec/Adv/Vol 1371/1896/1.27 bln

[JNelson6563]

46. Pretty flat for all that's going on

:shrug:

If your looking for good sense, don't look to the markets.

Julie

[AnneD]

49. Still waters....

run deep...