STOCK MARKET WATCH, Monday March 3

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday March 3, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 324
DAYS SINCE DEMOCRACY DIED (12/12/00) 2598 DAYS
WHERE'S OSAMA BIN-LADEN? 2324 DAYS
DAYS SINCE ENRON COLLAPSE = 2615
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 February 29, 2008

Dow... 12,266.39 -315.79 (-2.51%)
Nasdaq... 2,271.48 -60.09 (-2.58%)
S&P 500... 1,330.63 -37.05 (-2.71%)
Gold future... 975.00 +7.50 (+0.77%)
30-Year Bond 4.42% -0.14 (-2.96%)
10-Yr Bond... 3.53% -0.18 (-4.87%)






GOLD, EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

[ozymandius]

1. Market WrapUp: The Far Too Simple Beauty of the Promises We've Made

BY BRIAN PRETTI

You know I have been suggesting to the point of annoyance lately that it's the credit markets that hold the key to broader financial market and economic outcomes in 2008. Having said this, it’s now clear that credit market issues of the moment have moved well past simplistic sub prime problems. After all, why would the government and their financial sector buddies be trying to put together a program (project LifeLine) for all 90 day or greater delinquent mortgage holders? And that’s ALL mortgage holders, not just the sub primers. In early January of this year on the CI site, we wrote about a credit market issue that could be the “one big surprise for 2008,” as we termed it. It's an issue that up to that point had not been consistent front-page news, but sure could become such in the New Year with further macro economic or financial sector deterioration. Point blank that issue we wrote about was the credit default swaps (CDS) market. Well guess what? The issue of credit default swaps has now firmly moved from the back page of financial media far and wide to page numero uno.

As you know, although monetary policy surely works with a lag, Fed and global central banking actions have mitigated little in what seems the ever spreading credit market tensions of the moment. Add a corporate credit related credit market jolt out of the blue and that may indeed be enough to really shake broad financial market confidence. We're just going to have to see what comes our way. So why bring this up now? Simple, because CDS financial landmines have been detonating on financial sector balance sheets as of late. And we’re far from having witnessed the last explosion. Case in point, a few weeks back was AIG (American International Group) auditors apparently finding “material weakness” in company accounting for CDS they wrote against their subsidiary CDO (collateralized debt obligations) portfolios. Additionally, you are already fully aware of the drama playing out with MBIA and Ambac. I found it rather ironic that Friday the Dow spurted 200 points up in the last half hour of trading based on a CNBC comment (the ultimate source of truth, right?) that an Ambac bail out plan was in the works, Moody’s cut its ratings three notches in one fell swoop on Channel Re from Aaa to Aa3. Who is Channel Re? An MBIA reinsurer whose only client happens to be MBIA. Guess CNBC overlooked that one.
.....

You know that domestically, we only get a glimpse of the derivatives markets through the lens of the banking system. Otherwise transparency is virtually zip. One staunch supporter of all out secrecy in derivatives reporting was none other than the Maestro himself. Thanks Al, at least given what has occurred in credit markets and on the balance sheets of financial institutions as of late, that’s worked out really well, hasn’t it? This same lack of transparency has worked wonders for the current mortgage credit markets represented by off balance sheet CDO's, SIV's, etc., right? Just talk to the shareholders of financial institutions now writing off tens of billions of supposed "value" in these same vehicles about how they feel about the concepts of lack of disclosure and non-transparency. Anyway, as of the latest numbers, here's what we're looking at in terms of US banking system CDS exposure.
.....

Trajectory, growth, rhythm and magnitude of global credit derivatives expansion is quite like the character we observed above for the US banking system proper. In three short years, global CDS exposure has increased roughly nine-fold. We're talking about close to $45 trillion of credit derivatives on a notional basis. The BIS kindly estimates a gross cash market value for this exposure at $700 billion. But we all know how those initial estimates of potential loss in the mortgage and mortgage product markets made in 2007 have worked out as of late -- they haven't.

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

[salin]

4. article: Subprime, debt still largest U.S. econ threat-poll

Subprime, debt still largest U.S. econ threat-poll

Reuters Monday March 3 2008 WASHINGTON, March 3 (Reuters) - The combined punch of subprime mortgage defaults and heavy debt remains the biggest risk to the health of the U.S. economy, a panel of business economists said on Monday.

"NABE members are increasingly concerned over the short-term risks associated with subprime mortgages and other forms of indebtedness, while they continue to cast a wary eye on inflation," said Ellen Hughes-Cromwick, president of the National Association for Business Economists.
The conclusion was based on a survey of 259 members conducted between Feb. 1-15 and updates a poll conducted in August.

Of the members polled for the NABE semiannual Economic Policy Survey, 52 percent said the combined threat of subprime mortgage defaults and heavy debt was their No. 1 concern, up from 32 percent in August.

more: http://www.guardian.co.uk/feedarticle?id=7352790

----
:hi: Ozy!

[ozymandius]

6. Hey Salin.

It looks like we found two versions of the same news.

My, my - how a year can change everything about how we see the world.

:hi:

[salin]

9. or how a year can catch other folks' perceptions up with our own...

weren't many of us lamenting the ridiculous and worrisome practice of no-downpayment mortgages with baloon payments - and linking reports of how the rate of these mortgages being made compared to traditional ones were spiking? How is it that the *professionals* were not worried about such a thing, and instead playing ball and feeding the system that vociferously sought more and more of these "commodities"?

*Sigh*

:hi:

[JNelson6563]

13. Yes, Marketeers ahead of the curve

:toast:

[ozymandius]

15. First thought: easy money

These professionals are not fools when it comes to making a buck. They are careless and short-sighted: and so foolish in an alternative aspect.

[Ghost Dog]

17. The attitude is: I'm earning good/getting rich right now, so screw the future

and who cares about anybody else?

[TalkingDog]

32. Defacto definition of a Conservative Republican

I'm a conservative.

I think conserving the environment is a good thing.
I think saving now so we can have enough in the future...also a good thing.
I think giving children every possible advantage when they are young, so we won't have to deal with undereducated, maladjusted thugs and their droogs after years of neglect is a very good thing.

I think running roughshod over the Constitution, changing it willy-nilly and destroying it because you can is not very conservative. (see undereducated, maladusted thugs and their droogs listed above)
I think squandering our natural resoures of air, land, water and "yankee ingenuity" is not particularly conservative either.
I think unthinking greed, that bears no future fruit, is very, very, very unconservative.

It must be the Republicanism that's the problem.

Hope you guys have a fun morning.

It looks like the pre-Ides are going to be coming in like a lion. (Wooo-Hoo! double bonus points for working those 2 into the same idea!!!)

[Demeter]

34. You Sir, Are a Far-Seeing, Ecology-Based Futurist

who can understand and work with the concepts underpinning science and technology and knowledge-based disciplines.

Unfortunately, you are in such a small minority that it would take a Holocaust to wipe out the Stupids so that Darwin's Theory of Natural Selection could play out.

Well, looks like the Stupids have pulled it off. Now's our chance to right some fundamental wrongs.

[Ghost Dog]

38. You may be interested in this article on James Lovelock

from Saturday's Guardian: http://www.guardian.co.uk/theguardian/2008/mar/01/scienceofclimatechange.climatechange

Lovelock has been dispensing predictions from his one-man laboratory in an old mill in Cornwall since the mid-1960s, the consistent accuracy of which have earned him a reputation as one of Britain's most respected - if maverick - independent scientists. Working alone since the age of 40, he invented a device that detected CFCs, which helped detect the growing hole in the ozone layer, and introduced the Gaia hypothesis, a revolutionary theory that the Earth is a self-regulating super-organism. Initially ridiculed by many scientists as new age nonsense, today that theory forms the basis of almost all climate science.

...

Lovelock believes global warming is now irreversible, and that nothing can prevent large parts of the planet becoming too hot to inhabit, or sinking underwater, resulting in mass migration, famine and epidemics. Britain is going to become a lifeboat for refugees from mainland Europe, so instead of wasting our time on wind turbines we need to start planning how to survive. To Lovelock, the logic is clear. The sustainability brigade are insane to think we can save ourselves by going back to nature; our only chance of survival will come not from less technology, but more.

Nuclear power, he argues, can solve our energy problem - the bigger challenge will be food. "Maybe they'll synthesise food. I don't know. Synthesising food is not some mad visionary idea; you can buy it in Tesco's, in the form of Quorn. It's not that good, but people buy it. You can live on it." But he fears we won't invent the necessary technologies in time, and expects "about 80%" of the world's population to be wiped out by 2100. Prophets have been foretelling Armageddon since time began, he says. "But this is the real thing."

...

Humanity is in a period exactly like 1938-9, he explains, when "we all knew something terrible was going to happen, but didn't know what to do about it". But once the second world war was under way, "everyone got excited, they loved the things they could do, it was one long holiday ... so when I think of the impending crisis now, I think in those terms. A sense of purpose - that's what people want."

...

"There have been seven disasters since humans came on the earth, very similar to the one that's just about to happen. I think these events keep separating the wheat from the chaff. And eventually we'll have a human on the planet that really does understand it and can live with it properly. That's the source of my optimism."

What would Lovelock do now, I ask, if he were me? He smiles and says: "Enjoy life while you can. Because if you're lucky it's going to be 20 years before it hits the fan."

[burf]

37. But according to some in

the Bush Administration, its the fault of the media.

From the good folks over at Crooks and Liars:

The usual round table got together this morning on Meet The Press and as usual, GOP shill, Mary Matalin, was spewing forth her talking points, facts be damned. Forecasts for the U.S. economy look dim, and host Tim Russert puts up poll number showing 83% of Americans think the economy is in bad shape — but according to Lady McCheney, people really aren’t worried about their personal finances, it’s the evil liberal media that’s giving them the perception that the economy is tanking.

I wonder if she puts her fingers in her ears and hollers "LA LA LA, I can't hear you" to anyone who counters her bullshit.

[ozymandius]

2. Today's Reports

10:00 AM Construction Spending Jan
Briefing Forecast -0.6%
Market Expects -0.8%
Prior -1.1%

10:00 AM ISM Index Feb
Briefing Forecast 47.5
Market Expects 49.0
Prior 50.7

http://biz.yahoo.com/c/ec/200810.html

[Pale Blue Dot]

73. Construction spending plunged in January (-1.7%)

Construction spending took its biggest nosedive in 14 years and manufacturing activity contracted, fresh trouble signs for a struggling economy.

The Commerce Department reported Monday that construction spending plunged by 1.7 percent in January. Builders slashed spending on residential projects, but the weakness spread beyond that ailing sector. There were cutbacks in spending on, among other things, hotels and motels, highways and various projects by state and local governments.

Another report showed fallout from housing and credit problems cutting deeper into manufacturing.

http://www.msnbc.msn.com/id/23447971/

[fasttense]

80. Damn. the economists were surprised yet again. n/t

[Roland99]

84. Here comes the commercial downslide to grease the skids.

[Pale Blue Dot]

91. IHOP to offer green eggs and ham for breakfast

This is one of the top 5 headlines on MSNBC Business. I wish I was making that up.

http://www.msnbc.msn.com/id/23449678/

[Dr.Phool]

101. Did you see the last line at the bottom?

IHOP shares plunged sharply in morning trading.

I guess that tells it all.

:puke: :puke: :puke: :puke:

[Pale Blue Dot]

74. U.S. manufacturing contracted in February (index at 48.3)

U.S. manufacturing activity declined in February to its weakest level in nearly five years, an industry group survey showed Monday, heralding more instability in the job market and further frailty in the overall economy.

After reporting modest growth for January, the Institute for Supply Management said its February manufacturing index registered at 48.3 — its weakest reading since April 2003, but above Wall Street's even poorer expectations.

A reading above 50 indicates expansion, and anything below that shows contraction. The February figure was a bit better than the median forecast of 48.1 of economists polled by Thomson Financial/IFR. But it was slightly worse than December's reading of 48.4.

http://www.msnbc.msn.com/id/23448597/

[ozymandius]

3. Oil steadies, supported by US dollar

SINGAPORE - Oil prices were steady Monday near $102 a barrel after hitting record levels last week on the persistent weakening of the U.S. dollar.
.....

Light, sweet crude for April delivery fell 2 cents to $101.82 a barrel in Asian electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract fell 75 cents to settle at $101.84 a barrel on Friday, after spiking to a record $103.05 a barrel.

Many analysts believe oil is poised to rise above $103.76 a barrel. That is the price many believe to be oil's all-time high, on an inflation-adjusted basis, set in early 1980 during the Iranian hostage crisis.
.....

Analysts have also said the investment flows that have pushed prices higher this year are not about to dry up — despite underlying fundamentals of oil supply and demand that do not justify such high prices. Some predict speculative investing could push oil prices as high as $120; others argue prices have formed a bubble and could crash back to the $70 range.

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

[mac2]

10. From behind a Bush

Crude oil went from $70 per barrel to $101 in just a year. That's what you get for having a Bush run controlled country. Nope we don't have a recession, we have a crisis.

Our dollar went from the strongest currancy in the world before his was in power to almost....

That's what you get from an oil and banking Bush family President. Explain what you plan to do about it candidates?

[bjb]

88. More

Don't forget beef prices too.

[mac2]

98. Many of the huge corporate farms in America are

for foreign consumption. They can sell it for more profit than here.

They pollute the land, water, and air but our leaders don't care. Profit is the most important thing. Guess that's why the Bush family have to take over Paraguay to get fresh water. Ours in polluted by their corporate friends.

We are heading toward a food/water crisis also.

I wondered if that lake near Atlanta wasn't being drained by Coke. They sell it all around the world. The people of Atlanta do without. I don't know who built that lake but I bet it was tax payer dollars.

[ozymandius]

5. Credit crisis seen as economic threat

WASHINGTON - The cascading fallout from the subprime loan crisis, barely a cloud on the horizon a year ago, is now viewed by experts as the economy's gravest threat.

In a survey being released Monday, 34 percent of the members of the National Association for Business Economics ranked the financial market turmoil from those loan defaults as the No. 1 threat to the economy over the next two years.

That compares with 18 percent from an August survey, when the most serious threat was seen by 20 percent of the economists as terrorism and the conflicts in the Middle East.

A year ago, the credit crisis did not even register as a chief threat.
.....

The Fed has taken on the credit crisis and the accompanying weak economic growth by cutting interest rates. But to fight inflation, the Fed would have to raise rates. It cannot battle both threats at the same time.

http://news.yahoo.com/s/ap/20080303/ap_on_bi_ge/economic_threats

[ozymandius]

7. Asian markets tumble on Wall Street drop

SEOUL, South Korea - Asian and European markets tumbled Monday as investors reacted nervously to a steep decline on Wall Street Friday after disappointing economic and corporate news rekindled worries about a U.S. recession.

Japan's benchmark Nikkei 225 index plunged 4.5 percent to close at 12,992.18. Markets in Hong Kong, South Korea, India and Australia also fell sharply, but shares in mainland China advanced.

The declines spread into early European trading, and U.S. stock index futures also were down, suggesting Wall Street was poised for another drop Monday.

Investors dumped stocks after a series of depressing economic and earnings reports Friday out of the United States — a vital export market and the world's largest economy — sent the Dow Jones industrial average falling 315.79, or 2.51 percent, to 12,266.39.

The bad news included poor quarterly results from American International Group Inc. and Dell Inc. and weaker-than-expected results on the Chicago purchasing managers index, which painted a dreary picture of the manufacturing sector.

http://news.yahoo.com/s/ap/20080303/ap_on_bi_ge/world_markets

[ozymandius]

8. It's all about bad news in manufactiring and consumption.

Both of which will be dutifully ignored as vultures come circling today and view this economic news as last week's bidness.

[mac2]

11. Led by eight years of incompetence

[Ghost Dog]

19. Europe shares fall 2% on growth fears, banks weigh

Mon Mar 3, 2008 11:41am GMT
LONDON, March 3 (Reuters) - European shares dropped 2 percent by midday on Monday, as worries over the world economy and the potential fallout from the credit crisis kept banks under pressure even as HSBC (HSBA.L: Quote, Profile, Research) gained.

At 1133 GMT, the FTSEurofirst 300 index (.FTEU3: Quote, Profile, Research) was down 1.7 percent at 1,292.20 points. HBOS (HBOS.L: Quote, Profile, Research) and UBS (UBSN.VX: Quote, Profile, Research) were among the biggest percentage losers, down between 4.7 and 5.6 percent while RBS (RBS.L: Quote, Profile, Research) fell 3.8 percent.

Europe's biggest bank HSBC (HSBA.L: Quote, Profile, Research) bucked the trend, adding 0.6 percent after posting a 10 percent rise in profits last year. This was just below analysts' forecasts and strong gains in Asia helped the bank aborb a $17.2 billion hit for bad debts.

Adding to the broad market's worries, billionaire investor Warren Buffett told CNBC he is no longer offering to guarantee $800 billion of municipal bonds backed by MBIA Inc (MBI.N: Quote, Profile, Research), Ambac Financial Group Inc (ABK.N: Quote, Profile, Research) and FGIC Corp, three large bond insurers.

/.. http://uk.reuters.com/article/eurMktRpt/idUKL0329876920080303

Actually, the charts show that these markets opened down over 1.5% across Europe, and have been flattish but trending down slowly since then. So forget that talk of 'early trade' an such: What we're seeing is considerable, market-moving 'Dark Pool' trading by those with 'special access' over the weekend.

[Ghost Dog]

90. Banks drive European shares down for 4th day

LONDON, March 3 (Reuters) - Banks drove European shares down for a fourth day on Monday as U.S. data did little to dispel concern over the potential for U.S. recession, while HSBC (HBSA.L: Quote, Profile, Research) rallied after turning a profit last year.

Nationwide U.S. manufacturing data showed factory activity contracted last month, although not by as much as originally feared, which helped equities recover some of the day's losses.

The FTSEurofirst 300 index (.FTEU3: Quote, Profile, Research) ended down 1.4 percent at an unofficial close of 1,297.43 points, having fallen by as much as 2 percent earlier in the session.

"The market is absolutely desperate to gauge exactly how quickly the U.S. economy is slowing down and what is the potential threat of inflation," said Henk Potts, a strategist at Barclays Stock Brokers.

/.. http://uk.reuters.com/article/eurMktRpt/idUKL0368501620080303

[Dr.Phool]

30. "rekindled worries about a U.S. recession."

What's it going to look like when they open their eyes? Has someone got to grab them by the hair and scream "look at this, Stoopid"!

[ozymandius]

12. Record CDO Fees Set Up Merrill, Citigroup for Worst Writedowns

March 3 (Bloomberg) -- When Stan O'Neal became chief executive officer of Merrill Lynch & Co. in 2002, he identified collateralized debt obligations as an area where he and his firm could make their mark.

Merrill Lynch was 15th that year in issuance of CDOs -- complex debt instruments that bundle bonds backed by subprime mortgages and other loans, credit default swaps or even other CDOs. By 2007, the firm was selling more CDOs than any other investment bank, collecting fees that had begun to rival more- traditional revenue sources such as bonds and equities, according to data compiled by Bloomberg.

Merrill Lynch was on top, and Citigroup Inc. was one step below -- the wrong place to be when CDOs went off a cliff.
.....

Merrill Lynch has written down $24.5 billion in losses from CDOs and other assets, while Citigroup has recorded $22.4 billion in losses. UBS AG, which ranked fourth in CDO underwriting, with $230.1 million in fees, has written off $18.1 billion. Banks and securities firms around the world have recorded writedowns and credit losses of at least $181 billion.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aTCaFu03ENY8&refer=news

[salin]

14. isn't deregulation and regulation free... great?!?!

Hey, I heard McCain just the other day say to solve the ills of the economy we needed MORE tax cuts, and MORE deregulation.

As if that has gone SO swimmingly well over the past seven years.

[antigop]

52. And how much compensation did O'Neal receive since 2002? n/t

[maxkeiser]

16. Death of the Dollar 2

My film DEATH OF THE DOLLAR 2 was broadcast on AJ over xmas so some DU's may have missed it. The story is more relevant today. If you missed it, here's the link;

death of the dollar 2 part 1
http://uk.youtube.com/watch?v=54MUm2P1jOU

death of the dollar 2 part 2
http://uk.youtube.com/watch?v=HdrNbhdl7uU

[kineneb]

86. have been listening to Karmabanque Radio

I really like the program...where else can one hear economic analysis with such (dark) humor?

I suggest fellow DUers check it out:

http://www.karmabanqueradio.com/

thanks, Max.

[Ghost Dog]

111. Hey, I like your style Max

:thumbsup:

[54anickel]

125. Nice! Looks like it's a Paul Craig Roberts kinda day!!!! Thanks for posting. n/t

[ozymandius]

18. US Stock Futures Signal Lower Open

US Stocks Head for Lower Open As Worries of Recession Retain Grip on Wall Street

NEW YORK (AP) -- U.S. stock futures pointed to further declines Monday as investors awaited figures on manufacturing and construction spending to gain a better sense of how the economy is faring.

Wall Street fell sharply Friday after an unwelcome mix of economic and corporate reports dashed some investors' hopes from earlier in the week that the economy would soon show signs of a nascent recovery. The major stock indexes fell more than 2.5 percent Friday, with the Dow Jones industrials losing 315 points.

Investors trying to determine whether their recent pessimism has been well-founded or overwrought will be examining a report from the Institute for Supply Management on U.S. manufacturing in February. Many analysts are expecting contraction, after a slight gain in January and a pullback in December. Wall Street also expects construction spending to have slipped in January. Both readings are due after the opening bell.

Dow futures fell 100 points, or 0.81 percent, to 12,206. Standard & Poor's 500 index futures fell 6.40, or 0.48 percent, to 1,324.90, and Nasdaq 100 index futures fell 5.00, or 0.29 percent, to 1,743.25.

http://biz.yahoo.com/ap/080303/wall_street.html

And with this, news I have to embark on my day. See you when it's done.

[UpInArms]

20. dollar watch

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

Last trade 73.677 Change -0.090 (-0.12%)

Yen: Risk Aversion Wreaks Havoc -100 in Sight?

http://www.dailyfx.com/story/bio2/Yen__Risk_Aversion_Wreaks_Havoc__100_1204541736080.html

As the week opened for trade risk aversion wreaked havoc with equity markets driving the Nikkei down 610 points while USDJPY dropped below the 103.00 figure. The yen was also helped by a much larger than expected rise in Labor Cash earnings which jumped to 1.0% from 0.1% forecast. The rise in LCE was the fastest in 19 months and came as a welcome surprise to the Japanese economy which has been moribund for the past six months as consumer sentiment plunged to some of the lowest readings this decade.

USDJPY traded as low as 102.59 after tripping stops at 103.00. One of the interesting dynamics that has helped yen to break the 105 barrier with relative ease and surpassingly little opposition from Japanese officials is the fact that Japan chairs the G7 this year and therefore cannot act unilaterally to support its export sector by heavy handed intervention in the currency market. This was obvious from lasses-faire tone of comments made by Japanese Fin Min Nukaga today who stated specifically that FX was moving on economic indicators. The pair may find some support during North American trade if the US ISM data surprises to the upside, especially if it prints above the 50 boom/bust level. However if the reading drops below the already expectations a test of 102.00 could be within reach.

Meanwhile, in Europe the Manufacturing PMI from both the EZ and UK was relatively upbeat. The EZ report did however, show the weakest reading in the export component since 2005. While there is still very little reason to believe that the ECB will change its hawkish tone anytime soon, traders will nevertheless focus on every word of Mr. Trichet’s commentary this Thursday to ascertain if he will begin to acknowledge the creeping slowdown in economic activity in the region effectively setting up the market for a change in policy.

On the other hand, UK’s PMI numbers suggested that manufacturing continues to expand and more importantly experience significant price pressures as inputs costs continue to skyrocket. No doubt this news will only solidify BoE’s resolve to keep rates steady at the MPC meeting this Thursday, and as a result the EURGBP cross which has been on a one way trip to the stars lately, traded lower, as fears of further rates cuts from the BoE dissipated.

...more...

Dollar Finds Some Reprieve On Risk Aversion Though Data Keeps The Pressure On

http://www.dailyfx.com/story/bio1/Dollar_Finds_Some_Reprieve_On_1204327236138.html

On a trade-weighted basis, the dollar closed the week at a fresh record low. However, against some of the currency’s more aggressive counterparts, the pang of doubt in risk trends helped to keep the greenback from much worse. US equity benchmarks experienced their worst selloff since February 5th after insurer and Dow component AIG reported a massive $15 billion writedown on trouble mortgage securities. This evidence that subprime losses have spread into more mainstream insurance in turn revived fears of a sustained credit crunch and temporarily saved the dollar from further losses in all its major pairings except the positive yielding USDJPY and USDCHF. If it weren’t for the inadvertent assistance from risk trends, the greenback would likely have succumbed to the session’s disappointing lot of scheduled economic data. The morning brought the end of the month spending numbers for January; and the readings did little to encourage a brighter outlook for the world’s largest economy. Personal income rose 0.3 percent last month to outpace expectations while still cooling from December. A false sense of bullishness from a stronger than expected 0.4 percent increase in spending was quickly snuffed out when the market realized the boost was primarily due to higher prices and not greater volume. Further complicating the issue, inflation reported by the PCE deflator accelerated to its fastest pace in over two years. Irrational fears of stagflation are looking less absurd. The rest of the session was reserved for the Chicago Purchasing Managers Index and final U. of Michigan consumer sentiment survey, both for February. The confidence gauge was revised slightly higher, though it was unable to shake 16-year lows. Equally concerning, the Chicago manufacturing report plunged to its lowest read in 5 years. Along with Empire, Philly and Richmond Fed indexes, this Chicago report promises a very week ISM reading on Monday. For the rest of the coming week, the fourth quarter mortgage delinquencies will asses the full damage in the lending market, but the market’s true interest will lie with the expected 25,000 rebound in February NFPs.

...more...

[UpInArms]

21. Dollar slide deepens

http://news.yahoo.com/s/nm/markets_forex_dollar_dc

TOKYO (Reuters) - The dollar's sharp slide deepened on Monday when it fell to a record low against a basket of major currencies as expectations for more aggressive Federal Reserve interest rate cuts ignited selling of the U.S. currency.

The dollar fell as low as 73.551 (.DXY) against a basket of six major currencies, taking it to the lowest since the dollar index was started in 1973.

The drop came as the dollar hit a three-year low against the yen at 103.06 yen, down 0.7 percent on the day, as a sell-off in Wall Street shares last Friday spurred an unwinding of carry trades. Asian markets were expected to track that fall.

there goes our way of life and all it merits is 3 paragraphs? :shakesheadsadly:

[mac2]

28. Get your wheel barrows ready America.

Bush is out to destroy our dollar and our democracy. Yet they won't impeach.

Why impeach now? I don't want to pay a cent more to a man who ruined my country (and many others around the world).

[Ghost Dog]

27. Euro= USD 1.519, GBP 0.766, CHF 1.578 and JPY 156.6 at this time

[spotbird]

29. The dollar may achieve parity with

the Swiss Franc today. Unbelievable.

[Demeter]

35. Parody or Parity? Or Both?

Actually, the dollar IS a parody of itself now.

[spotbird]

36. Woops,

thanks. It's early. LOL, you're right the dollar is a joke.

[Hugin]

70. Excellent point!

:rofl:

[Ghost Dog]

57. Euro= USD 1.527, GBP 0.767, CHF 1.578 and JPY 157.5 at this time

[kineneb]

87. ouch. Euro, 2002: just about 1:1

we were in Belgium and Germany. Glad we got to go before the death spiral began. The US will not even get help from European bargin shoppers...the stupid "security" measures are keeping them out. What an f***ing mess. :banghead:

[Ghost Dog]

89. Euro= USD 1.518, GBP 0.765, CHF 1.584 and JPY 157.7 at this time

[UpInArms]

22. On Wall St: Commodity boom backfires on consumers

http://news.yahoo.com/s/ft/20080229/bs_ft/fto030320080407351274

The Federal Reserve is attempting to fill up the liquidity punchbowl with big interest rate cuts. But it is beginning to look like an old party trick. Cheap cash for consumers and Wall Street banks has not translated into lower mortgage rates, let alone alleviated stress in the credit market.

Instead the prime beneficiary has been commodities. The dollar has fallen out of favour and set record lows against the euro and a basket of rivals, helping to boost commodities prices across the board.

Since the Fed started to cut rates last September, the Reuters/Jefferies commodity price index has risen more than 30 per cent, with oil, precious metals and wheat all setting record prices this week.

As a result the beleaguered US consumer faces a creeping tax in the form of higher petrol and food prices, on top of negative wealth effects from housing and the stock market's slide since October. If this trend continues, consumers may get little relief from rebate cheques due in the summer as part of the government's fiscal stimulus plan.

The real sting, however, from higher commodity prices and a weaker dollar comes in the form of higher inflation expectations. In the past month the yield on long-dated Treasury bond yields has risen sharply and the deteriorating mortgage market has pushed home loan rates back to where they were last September.

In other words, the 2.25 percentage point cut in the Fed funds rate in this period has not sparked the kind of mortgage refinancing boom that slashed home loan costs for consumers earlier this decade.

...more...

[DemReadingDU]

31. The Federal Reserve's rescue has failed

3/3/08 The verdict is in. The Fed's emergency rate cuts in January have failed to halt the downward spiral towards a full-blown debt deflation. Much more drastic action will be needed.

Yields on two-year US Treasuries plummeted to 1.63pc on Friday in a flight to safety, foretelling financial winter.

The debt markets are freezing ever deeper, a full eight months into the crunch. Contagion is spreading into the safest pockets of the US credit universe.


Why won't it end? Because US house prices are in free fall. The Case-Shiller index for the 20 biggest cities dropped 9.1pc year-on-year in December. The annualised rate of fall was 18pc in the fourth quarter, and gathering speed.

more...
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/03/ccview103.xml&CMP=ILC-mostviewedbox

[Hugin]

42. And a rise in Commodities translates into...

Yet, more time we'll collectively have this Oil Monkey on our backs.

Due to the fact, as long as King Oil keeps it's cat seat it will be difficult for other alternative
energies to become viable.

It's one of those wicker-basket woven finger traps. The harder one pulls, the tighter the trap gets.

As we -ALL- know, the root of this whole economic slowdown isn't the oft blamed 'sub-prime deadbeats', but,
the ever increasing price of oil and energy.

[AnneD]

46. Morning Marketeers......

:donut: and lurkers. Seems as if the 'invisible hand' of the market is giving Bernanke and the Feds the finger...

Most of the Marketeers have been sounding the alarm about the mortgage crisis, 'jobless recovery' (now THERE is an oxymoron) and the stagnant 'real wages' since I first came to DU.

I find it interesting that a group of armatures on an internet message board could predict with greater accuracy and sooner than the Fed planners could. Which begs the question...are they greedy or just plain stupid? And if they are greedy, just how stupid do they think we are?

IMHO I am fairly certain now that Jim Rogers is right and commodities will be the next hot thing on WS for investors. Our leader can't seem to be able to decide which pant leg to but on first-and we are all suffering for it. We need a political solution now, a different direction. I think we will have one regardless who wins the primaries. Now I am talking DEM's here-I would be shocked if GOP won, they would have to have pictures of Satan golfing with the DEM candidate this go round (although we have been known to have circular firing squads).

I also think we are fast reaching a tipping point and we shall see some banks implode soon (I am basing this on my S&L experience). It will be interesting times for us all.

Happy hunting and watch out for the bears.

[Ghost Dog]

23. Noland's Credit Bubble Bulletin: No simple repeat of LTCM fiasco

... This is no LTCM. The current financial and economic backdrop is altogether different. Speculators that would typically seek to capitalize on depressed securities prices now confront enormous uncertainties. How bad will things get in California, Florida, and elsewhere? How many will walk away from underwater mortgages - for starter homes and million dollar-plus California bungalows? How badly will the US "services" economy be hit by housing and financial woes? How bad are the unfolding credit problems in state and local finance? Will pinched consumers also turn their backs on credit card, auto and student loans? How long will the seizing up of the securitization markets last? How will corporate credits hold up in the event of prolonged credit restraint and economic tumult? What are the ramifications if the "monolines" (bond insurers), GSEs, private-label MBS/ABS, the credit derivatives marketplace, and Wall Street "structured finance" (more generally) don’t recover? None of these pertinent questions were even remotely contemplated or relevant in 1998.

The problem today remains a highly leveraged credit system now confronting massive and unquantifiable - credit losses. And Moody’s and S&P can continue to claim that the major monolines are AAA - while the GSEs can pretend they are adequately capitalized. But the marketplace is not buying it. Sinking securities valuations are not a "technical" market issue that will be resolved when the margin calls are satisfied. Indeed, the credit crisis and the economic downturn are gaining significant momentum.

Throughout the system, risk models have broken down. They will now be functionally inoperable for some time to come. At the heart of the now unfolding systemic de-leveraging are some newfound realities.

/continues much... http://www.atimes.com/atimes/Global_Economy/JC04Dj01.html

[UpInArms]

24. Another Shoe Dropping - States and Cities Start Rebelling on Bond Ratings

http://www.nytimes.com/2008/03/03/business/03bond.html?ex=1362200400&en=ea0ffd555df940f0&ei=5088&partner=rssnyt&emc=rss

A growing number of states and cities say yes. If they are right, billions of taxpayers’ dollars — money that could be used to build schools, pave roads and repair bridges — are being siphoned off in the financial markets, where the recent tumult has driven up borrowing costs for many communities.

A complex system of credit ratings and insurance policies that Wall Street uses to set prices for municipal bonds makes borrowing needlessly expensive for many localities, some officials say. States and cities have begun to fight back, saying they can no longer afford the status quo given the slackening economy and recent market turmoil.

Municipal bonds, often considered among the safest investments, sank along with stocks last week, darkening the already grim mood in the markets. Several big hedge funds unloaded bonds as banks further tightened credit to contain the damage from mounting losses on home mortgages and other loans.

States and cities rarely dishonor their debts. The bonds they sell to investors are generally tax-free and much safer than those issued by corporations. But some officials complain that ratings firms assign municipal borrowers low credit scores compared with corporations. Taxpayers ultimately pay the price, the officials say, in the form of higher fees and interest costs on public debt.

“Taxpayers are paying billions of dollars in increased costs because of the dual standard used by the rating bureaus,” said Bill Lockyer, treasurer of California, who is leading a nationwide campaign to change the way the bonds are rated. California, one of the largest issuers of municipal bonds, is rated A; Mr. Lockyer said the state should be triple A.





...more...

[UpInArms]

25. Executive Wants to Sue for Libel, but Only if He Can Do It Secretly

http://www.nytimes.com/2008/03/03/business/media/03mob.html?ex=1362200400&en=498085482f7ffe6a&ei=5088&partner=rssnyt&emc=rss

People who file libel lawsuits against journalists want their day in court. But one plaintiff wants that day to be very quiet.

Domenic F. Gatto, the chief executive of the Atlantic Express Transportation Corporation, is upset about a handful of online articles by Jerry Capeci, who writes for the Web site GangLandNews.com. Mr. Capeci is a longtime reporter on organized crime who previously wrote at The Daily News.

The articles focused on information Mr. Gatto had provided in a federal investigation into mob payoffs in the bus industry.

<snip>

This is not the first time Mr. Capeci’s work has involved the courts. Last fall, murder charges against Roy Lindley DeVecchio, a retired supervisor with the F.B.I., were dismissed after Mr. Capeci and another reporter turned over tapes to the prosecution that contained exculpatory interviews they had conducted with a crucial prosecution witness.

Mr. Capeci says he is standing behind his reporting on Mr. Gatto.

“Everything I’ve written can be backed up. It’s outrageous that he’s trying to litigate in secret. It makes no sense,” Mr. Capeci said.

...more at link...

[UpInArms]

26. Review of Book on Murdoch Is Killed (sinceDow Jones takeover)

http://www.nytimes.com/2008/03/03/business/media/03murdoch.html?ex=1362200400&en=da6eb1080e5f2fa9&ei=5088&partner=rssnyt&emc=rss

When Rupert Murdoch took control in December of Dow Jones, publisher of The Wall Street Journal, he also collected a small Hong Kong monthly, The Far Eastern Economic Review.

The Review has the smallest staff, the smallest circulation (less than 20,000 by some analysts’ estimates) and the smallest revenue of any publication in the Murdoch empire. But it has a voice in Asia beyond its size, and its reporting has, over the years, rankled many Asian politicians and business executives.

But in one of the first tests of editorial independence under Murdoch ownership, The Review’s editor, Hugh Restall, has acknowledged getting “cold feet” about publishing a review of a book that is critical of Mr. Murdoch’s business forays into China in the 1990s.

The author of the book, “Rupert’s Adventures in China: How Murdoch Lost a Fortune and Found a Wife,” is Bruce Dover, a former Australian journalist who was employed by the News Corporation in China during that period. It looks at Mr. Murdoch’s attempts to make money and the compromises undertaken to avoid upsetting government officials in Beijing.

...more...

[TrogL]

33. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



30-day vs. Euro, Yen, UK Pound and Swiss Franc




Currency Comparison: http://members.shaw.ca/trogl/looniewatch.html

Detailed analysis: http://quotes.ino.com/exchanges/?r=CME_CD

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.Y%24%24&v=s&w=5&t=l&a=1

Historical values http://www.x-rates.com/d/USD/CAD/data30.html

2008-01-21 Monday, January 21 0.97144 USD
2008-01-22 Tuesday, January 22 0.9758 USD
2008-01-23 Wednesday, January 23 0.972573 USD
2008-01-24 Thursday, January 24 0.99295 USD
2008-01-25 Friday, January 25 0.995619 USD
2008-01-28 Monday, January 28 0.995818 USD
2008-01-29 Tuesday, January 29 1.0022 USD
2008-01-30 Wednesday, January 30 1.00644 USD
2008-01-31 Thursday, January 31 0.998203 USD
2008-02-01 Friday, February 1 1.00614 USD
2008-02-04 Monday, February 4 1.00735 USD
2008-02-05 Tuesday, February 5 0.995718 USD
2008-02-06 Wednesday, February 6 0.997705 USD
2008-02-07 Thursday, February 7 0.988631 USD
2008-02-08 Friday, February 8 1.0006 USD
2008-02-11 Monday, February 11 0.998203 USD
2008-02-12 Tuesday, February 12 1.00371 USD
2008-02-13 Wednesday, February 13 1.0008 USD
2008-02-14 Thursday, February 14 1.00331 USD
2008-02-15 Friday, February 15 0.998702 USD
2008-02-18 Monday, February 18 0.998702 USD
2008-02-19 Tuesday, February 19 0.984349 USD
2008-02-20 Wednesday, February 20 0.981547 USD
2008-02-21 Thursday, February 21 0.991768 USD
2008-02-22 Friday, February 22 0.984737 USD
2008-02-25 Monday, February 25 1.0018 USD
2008-02-26 Tuesday, February 26 1.0141 USD
2008-02-27 Wednesday, February 27 1.02291 USD
2008-02-28 Thursday, February 28 1.02912 USD
2008-02-29 Friday, February 29 1.02082 USD


Current values

http://quotes.ino.com/exchanges/?r=CME_CD)

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     1.0149 1.0149 1.0149 1.0149 -0.0025 -0.25% 
CD.H08 Mar 2008 1.0159 1.0170 1.0099 1.0099 -0.0075 -0.74% 
CD.M08 Jun 2008 1.0144 1.0145 1.0144 1.0145 -0.0009 -0.09% 
CD.U08 Sep 2008 0.9990 0.9990 0.9990 1.0133 -0.0086 -0.85% 
CD.Z08 Dec 2008 1.0148 1.0148 1.0148 1.0115 -0.0085 -0.84% 
CD.H09 Mar 2009 1.0130        1.0130 1.0093 -0.0085 -0.84%
CD.M09 Jun 2009 0.9995 0.9995        1.0071 -0.0085 -0.84% 

Other combinations: (http://quotes.ino.com/exchanges/?c=currencies)

Market              Open    High     Low    Last   Change     Pct 
AUSTRALIAN $/CANADIAN $ (NYBOT:AS)
AS.H08 Mar 2008 0.88340                     0.91575 -0.00780 -0.90%  
AUSTRALIAN $/US$ (NYBOT:AU)
AU.H08 Mar 2008 0.90420                     0.93025 -0.01625 -1.86%  
CANADIAN $/JAPANESE YEN (NYBOT:HY)
HY.H08 Mar 2008 108.420                     105.465 -2.295   -2.05%  
EURO/AUSTRALIAN $ (NYBOT:RA)
RA.H08 Mar 2008 1.6058     1.6058   1.6058  1.6323  +0.0254  +1.52%  
EURO/BRITISH POUND (NYBOT:GB)
GB.H08 Mar 2008 0.76490    0.76550  0.76430 0.76475 +0.00125 +0.17%   
EURO/CANADIAN $ (NYBOT:EP)
EP.H08 Mar 2008 1.47880    1.47880  1.47880 1.49475 +0.01065 +0.74%  
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.H08 Mar 2008 158.220    158.220  157.530 157.645 -2.295   -1.42%   
EURO/US$ (SMALL) (NYBOT:EO)
EO.H08 Mar 2008 1.51850    1.51850  1.51850 1.51835 -0.00255 -0.17%  

Blather (from http://quotes.ino.com/exchanges/?r=CME_CD)

The March Canadian Dollar was lower overnight as it consolidates some of last week's rally after spiking above December's high crossing at 102.59. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above December's high crossing at 102.59 would open the door for a larger-degree rally into March. Closes below the 20-day moving average crossing at 100.05 would confirm that a double top with December's high has been posted. First resistance is last Thursday's high crossing at 102.98. Second resistance is the 50% retracement level of the November-January decline crossing at 103.33. First support is the 10-day moving average crossing at 100.44. Second support is the 20-day moving average crossing at 100.05.

Analysis

I'm not awake yet. Mayeb later. :boring::boring:

[UpInArms]

39. Proof that Fed Reserve props of Wall Street: Fed's Plosser: Market woes warrant low rates

http://www.reuters.com/article/bondsNews/idUSN0362496820080303

WASHINGTON (Reuters) - U.S. financial turmoil is serious enough for the Federal Reserve to lower interest rates, but the central bank should be ready to raise rates when conditions stabilize, Philadelphia Federal Reserve President Charles Plosser said on Monday.

<snip>

"Departures from the more systematic elements of making policy decisions must be relatively transitory and reversed in due course if we are to keep expectations of future inflation well-anchored," he said.

Plosser said central banks are usually best served by following clear guidelines for setting interest rates in response to changes in inflation, growth, and workforce productivity.

Such rules would call for a level of interest rates above the Fed's current 3 percent target for the benchmark fed funds rate, Plosser said. But the unusual nature of current market turmoil justifies setting rules aside for the time being.

"We are now, perhaps, in a period of extraordinary circumstances and have deviated form the benchmarks suggested by simple rules," he said. "But such deviations should be temporary and limited and promptly reversed when conditions return to normal."

...more at link...

[UpInArms]

40. Buffett Says U.S. in Recession, Stocks Not Cheap (drops bond bailout

http://www.reuters.com/article/bondsNews/idUSN0341321420080303?sp=true

NEW YORK (Reuters) - Warren Buffett on Monday said the U.S. economy is in recession and that "stocks are not cheap."

Speaking on CNBC television, Buffett also said he is no longer offering to guarantee $800 million of municipal bonds backed by MBIA Inc (MBI.N: Quote, Profile, Research), Ambac Financial Group Inc (ABK.N: Quote, Profile, Research) and FGIC Corp, three large bond insurers.

Buffett said that "from a common-sense standpoint right now, we're in a recession," though the U.S. economy has not yet recorded two straight quarters of declining gross domestic product, a traditional indicator of recession.

He said, though, that the environment is "nothing like '73 or '74 yet," referring to a deep economic downturn also marked by rising oil prices and falling stocks. Buffett said investors should not rule out the possibility of a significant economic downturn.

<snip>

On Feb 12, Buffett offered to reinsure $800 billion of municipal bonds, but only at a steep premium. The offer didn't include the riskier debt. Bond insurers rejected the offer, and have been seeking new sources of capital or possibly breaking themselves up.

...more...

[Demeter]

63. Just Read About Munis Going Into Coma

The entire city and state borrow and spend program is disrupted. Just as well--there won't be any tax base to collect payments from anyway....

[Demeter]

41. Ben Stein is Exxon Mobil

http://www.nakedcapitalism.com/2008/03/ben-stein-is-exxon-mobil.html

Ben Stein gives us another installment of his usual sloppy thinking. In his latest offering, "Exxon Mobil Needs a Hug," he declares:


After all, Big Oil is big us. And we need us.

Since I don't consider myself Big Oil, and I imagine most readers would object to being considered to be Big Oil, all Ben can say with certainty is that he is Big Oil. Presuming, of course, that that statement even means anything remotely comprehensible....So what is Stein's defense of a company that is clearly big and aggressive enough to take care of itself? That "we" are all shareholders, so any attack on Exxon Mobil is an attack on all of us.

This is so dopey as to not be worth discussing, but I will nevertheless belabor the obvious. Not everyone in America owns stocks, either directly or derivatively (only 41% of Americans say they or their spouse has a pension) and of those who do, not all of them own Exxon Mobil (none of the portfolios I am responsible for do, either directly or via indexes).

No, Stein isn't willing to consider that high profits by Exxon Mobil in an essential product like oil represent a transfer from the have-nots to the haves.

That may strike some readers as a socialistic formulation, and indeed, there is no clear standard for what a fair profit is. But this expansion (2001 onward) has been characterized by an unprecedented proportion of GDP growth going to corporate earnings as opposed to workers. Indeed, this is the first time the profit share has exceeded the labor share. So the Exxon Mobil example merely illustrates a broader issue.

Cut Stein's argument to its core, and it's blatant free market run rampant: we shouldn't interfere with the God-given right of any company to earn a profit because it will hurt the investors. But Stein goes further and claims that the interests of investors are identical with those of the US public. Was he asleep when they talked about class warfare in school?

[Ghost Dog]

71. Italy’s Eni to invest $4bn in Venezuela

Eni, the Italian oil and gas group, plans to invest $4bn in Venezuela, making the biggest commitment by a western oil company since President Hugo Chávez began to take control of the country’s oil projects in 2005.

Eni has reached agreement in principle with PDVSA, Venezuela’s state-owned oil company, to develop an area of the Orinoco belt – on some measures the world’s largest oil reserve.

/subscription required... http://www.ft.com/cms/s/038d272e-e6fa-11dc-b5c3-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F038d272e-e6fa-11dc-b5c3-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fworld%2Feurope

No problem with a 60%-40% split for plenty of oil majors, I see...

[Demeter]

43. Surprise! It's Rough Out There in the Job Market

http://www.nakedcapitalism.com/2008/03/surprise-its-rough-out-there-in-job.html

The New York Times has an odd story today, "Is a Lean Economy Turning Mean?" which discusses how conditions for workers have become dire. New jobs are scarce, and many of the ones out there don't pay as well as what employees got in previous roles. Hello, downward mobility.

What makes the piece peculiar is that the Times seems to have woken up just now to the idea that the labor market has been difficult for the last few years. It's been common for the media to follow the headline unemployment stats, when those are have considerable shortcomings. The self-employed (who may in practical terms may be severely underemployed) and part-timers are counted among the employed, but the most serious failing in the official unemployment release is the numerator, how unemployment is defined. As Walter Williams at Shadow Stats noted:


Up until the Clinton administration, a discouraged worker was one who was willing, able and ready to work but had given up looking because there were no jobs to be had. The Clinton administration dismissed to the non-reporting netherworld about five million discouraged workers who had been so categorized for more than a year. As of July 2004, the less-than-a-year discouraged workers total 504,000. Adding in the netherworld takes the unemployment rate up to about 12.5%.

I have not gone trolling for an updated estimate of how large the pool of discouraged workers is, but table in the Bureau of Labor Statistics Household Survey, "Alternative measures of labor underutilization" sheds some light...It shows raw underutilization of 9.9% and seasonally adjusted underutliization of 9.0% as of January 2008. That seems more consistent with the lack of labor bargaining power in the economy:

SEE LINK FOR CHART

The Times indirectly acknowledges the limitations of the unemployment stats by looking at labor utilization and finding a downtrend there.

But the bigger question is: why hasn't this gotten more notice sooner? It's widely acknowledged that inflation adjusted wages have been stagnant since the 1970s. And even in a nominally robust economy like New York City, the white collar cohort not working on Wall Street has been squeezed. Everyone I know in a firm or corporation is doing 50% more than they were expected to do a decade ago, and they certainly aren't earning 50% more in real terms or even nominal terms. (And the 50% is not an exaggeration: I know quite a few people who are single-handedly doing what was formerly two jobs at their company). Plus we have a culture where many white collar workers are expected to be on call virtually all the time, which both extends the number of hours worked and adds to stress. Yet few have wanted to see these developments as a sign of the falling standing of workers.

.....

Before 1990, it took an average of 21 months for the economy to add back the jobs shed during a recession, according to an analysis by the Economic Policy Institute and the National Employment Law Project, a worker advocacy group. Yet in the last two recessions, in 1990 and 2001, it took 31 months and 46 months, respectively, for employment levels to recover fully.

In the recessions of the early 1980s and the early 1990s, the ranks of the so-called long-term unemployed — those out of work for 27 weeks or more — jumped to well above 20 percent of all unemployed people. But in both cases, that share eventually settled back to close to 10 percent of the unemployed.

After the 2001 recession, however, the long-term share stayed above 20 percent from the fall of 2002 until the spring of 2005. In the months since, it has never dipped below 16 percent. In January, 18 percent of those unemployed had been without work for at least 27 weeks, according to the Labor Department.

[54anickel]

75. No sh*t....I finally moved beyond discouraged. I've pretty much moved

on to a barter system of living. As the buck became worth-less daily, I did't really care if I got paid with it anymore. My freezer has been filling with locally raised grass-grazed beef, free-range chickens and some frozen garden veggies. I've gotten gift cards to the local mall, gas station and grocery store. A large percentage of what I've been doing has been on more of a voluntary basis - just trying to help folks out in my abundant free-time since becoming unemployed. Many insist on paying back with something. I found this to be a very rewarding and low-stress way of life (beats the hell outta the cut-throat corporate world for me). It took a while to adjust to not being able to buy whatever I wanted whenever I wanted, but I found I don't really NEED any of that stuff anyway. Luckily DH is still gainfully employed to cover utilites, property taxes and essentials and our only debt is a car payment, but it's starting to get tight with the stealth tax of inflation. I've been thinking of hitting the help-wanted sections again...just a part-time gig to help hubby make ends meet. I don't want to go back to that 7/24 mentality. I've got a niece who recently landed a nice corporate job and she was thrilled to be given a blackberry...reminds me so much of myself in my younger, corporate ladder climbing days. :eyes: :cry: I'd give just about anything to have those years back to "do-over".

[Demeter]

76. I've Been Underemployed Since Graduating From College

1976--that was a fun year. The war and the space program winding down, there wasn't a whole lot of high tech industry still standing (except in California). Digital went belly up, and that was it for the Northeast.

I no longer care. It's right into revolution, if evolution is going to be thwarted by the Stupids.

[54anickel]

82. I was a starry-eyed progressive back then...going to school to learn to promote and propogate the

social institutions developing in those post war years. We were gonna change the world, end poverty and corruption, rehab the wayward, educate the masses, etc, etc etc.

That movement didn't last very long...the again, wasn't that also the year Uncle Miltie (Friedman) got the nobel? The birth of the "I got mine, go get your own" mantra.

[mac2]

99. You notice where many people are in the streets

during the week rioting/protesting they are countries with large unemployment. Unemployment brings chaos and anger...for good reason.

Everyone wants the same things...food, shelter, education, safety...etc. for themselves and their families. PNAC doesn't plan for that. That's why their plan will not work.

[Demeter]

44. Debt Junkies Forced to Go Cold Turkey

http://www.financialarmageddon.com/2008/03/debt-junkies-fo.html

Companies that depend on cheap credit to keep going are like hard-core heroin addicts, living each day from fix to fix. Once the drug -- or the borrowed money -- runs out, many either go through painful withdrawal or they end up in the gutter, lifeless. In "Junk Sales Mirror '91 Recession and Bankruptcies," Reuters details evidence that suggests the debt junkies are suddenly being forced to go cold turkey. Bankruptcy lawyers: Sharpen your pencils. This could be a frenzied year in U.S. bankruptcy courts, according to signals flashing from the global junk bond market.

High-yield debt sales have sputtered so far in 2008 and are off to their weakest start in 17 years thanks to an anemic U.S. economy, a worldwide credit crunch and a pronounced absence of investor appetite for risky assets. That's a striking change from the go-go days of the leveraged buy-out boom, when the world's less-creditworthy corporations found little difficulty raising funds through bond offerings. Now those companies are shut off from this vital source of fresh capital, a slump that typically precedes a surge in corporate bankruptcies.

"2008 will be a busy year for insolvency professionals," said Sam Gerdano, executive director of the American Bankruptcy Institute in Alexandria, Virginia. "Whether it's a record year remains to be seen."

Globally, less than $2 billion in junk bonds have been sold so far this year, all in North America. That marks the slowest start since the 1991 recession, when no junk bonds were sold in the first two months, according to Thomson Financial data...Indeed, Chapter 11 filings are mounting. In just the past week, Wellman Inc, a specialty plastics maker, Lillian Vernon Corp., a low-cost gift vendor, and Sharper Image Inc, the retailer of high-tech gadgets, have sought protection from creditors.
So far this year, at least 16 public companies have filed for bankruptcy, representing nearly $9 billion in assets. As measured by assets, that's the fastest start since 2002, when a wave of 220 firms filed for bankruptcy in the first two months of that year in the wake of the dot.com market crash, affecting $65 billion in assets.

[Hugin]

47. Turkey?

Did you know they can't fly?

:7

[Demeter]

49. LOL! I've Heard Rumors of The Kind

Something about a TV sitcom?

[Hugin]

53. It's apparently a fact...

http://en.wikipedia.org/wiki/Turkey_%28bird%29#Flight

:D

[kineneb]

113. wild turkeys can fly

(sorry I have checked back in so late...will tell story later)

Not only can they fly, they are big. Now mind you, they do not fly very high, but at their size, they do not need to do so. They fly rather like a fully loaded B-52.

You do not want to hit one with a car...serious dents to both car and bird.

Domestic turkeys are...stupid.

[Hugin]

45. ~09:45 ET: Needs something to... "Get the red out".

Speaking of Ben Stein...


Index Last Change % change
• DJIA 12217.30 -47.06 -0.38%
• NASDAQ 2265.97 -5.51 -0.24%
• S&P 500 1326.23 -4.40 -0.33%

[UpInArms]

48. 9:47 and dropping faster with "my dog's better than your dog" blather

Dow 12,180.67 85.72 (0.70%)
Nasdaq 2,258.08 13.40 (0.59%)
S&P 500 1,322.91 7.72 (0.58%)
10-Yr Bond 0.356% 3.178

NYSE Volume 301,766,281.25
Nasdaq Volume 140,556,984.375

open modestly lower, but are faring much better than overseas markets. Japan's Nikkei dropped 4.5% and Hong Kong's Hang Seng fell 3.1% in response to the S&P 500's steep declines on Friday. European markets are currently down at least 1%.

Shares of Boeing (BA) are getting clipped on news that it lost out to Northrop Grumman (NOC) to provide special aerial refueling tankers for the Air Force. Reports indicate the deal could be worth up to $40 billion. As a result, shares of Northrop Grumman are getting their biggest one day lift since July 2003.

The ISM Index, a national manufacturing survey, is slated for release at 10:00 ET. Economists expect the reading to drop to 48.0 from 50.7. If economists are correct, it will mark the ISM's lowest reading since 2003.DJ30 -49.88 NASDAQ -4.90 SP500 -3.97

09:16 am : S&P futures vs fair value: -0.5. Nasdaq futures vs fair value: -1.0.

[AnneD]

50. Turn Back the Hands of Time Pool

Seems like we are getting closer by the week now. Guess the date the DJIA rolls back to the level it was when the chimp took office-10,578.24.You can revise your dates up until Labour Day (the working man's holiday)or the DJIA hits 11000 (got to have a cut off). Anyone can join, just give a date and your reasoning for that date.

the other one.....1/30
DemReadingDU.....2/29
Ther-s a.....3/15
Talking Dog.....3/28 at 2 pmish
Warpy...3/20
FinnFan.....4/10
ProgressiveRealist.....4/17
Mattsh.....4/22
GhostDog.....4/28
MilesColtrain.....5/2
Happyslug.....5/9
UIA.....7/15
Roland99.....7/28
Abelenkpe.....8/2
Kineneb.....8/8
Prag.....9/5
MoJo Rabbit.....9/5
MuleBoy(aka hiz honna da mayor).....9/11
Birthmark....10/10
AnneD....10/24
MsLeopard.....10/31
Ship wrack.....11/5
Demeter.....1/20/09

Remember-you can change the dates as we learn more. The winner get the praise and admiration of those on the Stockwatch Thread.

[Hugin]

51. ~09:55 ET: Today's pondering tune is... "The Black Hole".

The theme music to the 1979 Disney Movie of the same name. Composed by John Barry.
(No there are no lyrics to this, but, they did say the word 'Hell' at least twice to break out of
the 'G' into that all important 'PG-13'.)

http://en.wikipedia.org/wiki/The_Black_Hole

Index Last Change % change
• DJIA 12183.84 -82.55 -0.67%
• NASDAQ 2256.38 -15.10 -0.66%
• S&P 500 1322.47 -8.16 -0.61%

[Hugin]

60. ~10:15 ET: Treading water...

Index Last Change % change
• DJIA 12251.66 -14.73 -0.12%
• NASDAQ 2272.01 +0.53 +0.02%
• S&P 500 1331.71 +1.08 +0.08%

[AnneD]

93. Hi Prag....

:hello: I'm think Queen. Posted the lyrics. They fit well.

[Demeter]

54. Rebel investors seize Bear hedge funds By James Mackintosh in London

http://www.ft.com/cms/s/0/d2526862-e641-11dc-8398-0000779fd2ac.html


Rebel investors have seized two failed Bear Stearns hedge funds in a move their lawyers hope will give them a platform to sue the US bank for compensation.

A Cayman Islands court ejected liquidators appointed at the behest of Bear to run offshore feeder versions of Bear Stearns High-Grade Structured Credit and Enhanced Leverage funds, replacing them with investor-supported liquidators.

James McCarroll, who represents the investors, said it was “the first major step, by any party, toward securing recovery of the more than $1bn lost by overseas institutional investors in these funds”. Mr McCarroll is co-head of the alternative investment dispute resolution group at New York law firm Reed Smith.

Seizure of the funds is important because hedge fund investors are unwilling to have their names made public through a court hearing. By using the feeder funds a case can be made without naming them.

[Demeter]

55. US Bankruptcy Trustees Ask for Sanctions Against Countrywide

http://www.nakedcapitalism.com/2008/03/us-bankruptcy-court-asks-for-sanctions.html



The federal bankruptcy trustees in Florida, Georgia, and Ohio have decided to take on Countrywide for a persistent practice of attempting to lard up the amount owed by homeowners in bankruptcy by failing to apply payments, adding fees (all fees are supposed to be approved by the judge) and making false claims. They result in extra costs to consumers (no doubt the hope is that they are too broke to fight) and burden the court system.

Observers believe this is the first time an action this extreme has been taken by the Justice Department.

From the New York Times:


In a move that escalates the legal trouble faced by the mortgage lender, the Countrywide Financial Corporation, federal regulators have asked the courts to sanction the company for abusing the bankruptcy system.

United States trustees in Florida, Georgia and Ohio have asked the courts to enjoin “Countrywide’s sustained bad faith conduct” in its treatment of distressed consumers trying to save their homes in bankruptcy court, according to a complaint filed by a United States Trustee Donald F. Walton.

“Countrywide’s failure to ensure the accuracy of its claims and pleadings has resulted in an abuse of the bankruptcy process,” Mr. Walton, the trustee for the region that includes Atlanta, wrote in papers filed Thursday in the Federal Bankruptcy Court for the Northern District of Georgia...

The action by an arm of the Department of Justice marks a rare concerted effort by the government to rein in Countrywide for behavior that has exasperated consumer attorneys for years: Misapplied mortgage payments, false court filings and unexplained extra fees.

“This is the first case that I know of where the U.S. trustee has actually filed an adversary proceeding in bankruptcy court against a creditor of this type,” said O. Max Gardner III, a consumer bankruptcy lawyer in North Carolina. ”The relief that it is asking for is based on a long pattern and practice of behavior that is all too familiar.”

In “9 out of 10” Chapter 13 bankruptcy cases, wage earner bankruptcies where people try to catch up on their bills, Countrywide complicates court proceedings with erroneous legal filings, mishandled payments and fees that are not explained, Mr. Walton said...

Mr. Walton is seeking sanctions against Countrywide for its behavior in the case of a Georgia couple who filed for Chapter 13 bankruptcy. He said Countrywide falsely accused the couple, John and Robin Atchley, of defaulting on their mortgage, assessed $2,793 in unexplained fees and kept taking money after the home was paid off.

Countrywide returned the extra payments and dropped threats of foreclosure. But Mr. Walton said Countrywide added ”unnecessary delay and expense” to the bankruptcy process and should not go unpunished.

Courts in Pennsylvania, Texas and North Carolina have sanctioned Countrywide and imposed punitive damages for “aggravated and egregious” misconduct in bankruptcy cases that caused problems for courts and consumers.

Countrywide, based in Calabasas, Calif., also faces an inquiry into the suspected mishandling of payments sent by court officials in nearly 300 Pittsburgh bankruptcy cases.

[Hugin]

58. Damn, no ski trip and now this...

I bet there's some long faces over at Countrywide today.

[Demeter]

61. I Forgot About That!

And just think of all the GOP campaigns that are going begging now that the cash cow has gone belly up!

[InkAddict]

77. There shouldn't be any faces around anymore (to be long).

What a remarkable move by bankruptcy trustees. It's just too bad that this wrinkle might come to the aid of greedy flippers too.

Countrywide's offices everywhere should by empty and their corporate name reviled and dissolved, their exectuvies jailed and garnished of their assets, not bailed out by BOA.

A Countrywide subsidiary was our lender who resold it to Bank of New York. We naively saved those four walls twice from their clutches,after episodes of short- and long-term unemployment, ongoing since the 80s, because it wasn't just an investment--it was home, and we were naively optimistic that the government would put a stop to uncontrolled outsourcing that killed off the American workers' ability to even provide the basics for their familities, but the policies of this administration and the lack of interest to fight the predators in lending and in government (both sides of the aisle) obviously have decided that American info tech workers should not work or own homes in America. I can remember telling their CSRs that they had better watch out, because their jobs were next on the block. With bitterSWEET emotions that barely assuage my rage, I'm enjoying seeing it happen even though the larger picture spells the same bleakness for even more due to inflation/dollar crashes. In reality, I'm glad someone wants to attempt to change things for the better, because I hope I've got a ways to go yet and I'd like to continue to eat without dumpster diving or freezing to death.

I'm trying to save up so I can realize a fantasy to "consume" on a foreign beach when age precludes useful participation--screw 'em. I'll buy my beans and rice and supplement it with local tropical fruit. I'm looking forward to the stimulation of a late adventure in another culture. It's a fantasy because I just can't stand watching our country's Constitution that promised so much being usurped and distorted by a unitary executive and his complicit Congress and DOJ. What's left of America when this process is complete???

I just hope we've got some leeway before they institute camps and colliseum-like exhibitions of us powerless geezers; I'd rather take my chances with Mother Nature's earthquakes and volcanos in a country that knows it needs to develop. That's creation at work--not destruction. Then again, perhaps I'm destined to "go" early. Miles to go before I sleep aside, maybe that would be best since revolution is for the young too.

[Hugin]

81. Very poignant post, InkAddict.

Should be a required read on the SMW. :thumbsup:

[TalkingDog]

106. *knock*knock* "flowsaaers...." What? "kandygrem...." What?!

"LANDSHARK!!!".... "uh...I mean...LOANSHARK!!!"

http://biz.yahoo.com/ap/080301/the_shark_hunters.html?printer=1

Ah, activism.... warms the cockles of cold, hard, complete lack of symapthy for the Devil, heart.


Snip:
Folks on Humphrey Hill Drive were still waking up on the icy Saturday morning the shark hunters came to town. They rounded the suburban traffic circle in a pair of rented school buses after a half-hour ride from far more modest neighborhoods, rumbling to a stop at the Garmone family's driveway. Forty-two caffeinated Clevelanders piled out, their leaders carrying bullhorns.

Their quarry, Mike Garmone -- a regional vice president at Countrywide Financial Corp., the nation's largest mortgage lender -- didn't answer his door. So they deployed, ringing bells at the big homes with three-car garages, handing out accusatory fliers and lambasting Garmone and his company's loans. Before departing, they left their calling card -- thousands of 2 1/2-inch plastic sharks -- flung across Garmone's frozen flower beds, up into the gutters, littering the doorstep.

/Snip

[Demeter]

56. American Finance: From Deregulation to Government Ownership in One Fell Swoop

http://robertreich.blogspot.com/2008/02/american-finance-from-deregulation-to.html

A delegation from the U.S. Treasury Department met recently with a few of the world's largest sovereign wealth funds. They want to avoid a political firestorm as more and more foreign investment makes its way into the U.S. economy.

What's this all about, really?

Over the past thirty years, the U.S. government has dismantled the system of regulation the nation instituted to prevent the sort of wild speculation that preceded the financial meltdown of the Great Depression. The last piece to fall was known as the Glass-Steagall Act, a Depression-era firewall intended to separate commercial banking from investment banking. In the late 1990s, my cabinet colleague Bob Rubin joined Fed chair Alan Greenspan to get Congress to repeal Glass-Steagall.

Now we're witnessing another financial meltdown, also fueled by speculation. Hopefully this one is not as serious as the one that occurred in 1929. But it does require us to rethink the importance of sensible financial regulation. Perhaps the pendulum of financial deregulation has swung too far.

Paradoxically, the primary response of governments -- both here in the US and in other advanced nations whose financial markets are also frozen -- isn't to rethink regulation. It's to subject financial institutions to government ownership. Recently the British government decided to take over the troubled mortgage lender Northern Rock. This was after the Bank of England was forced to give the firm emergency funding to avoid a run on the bank.

Well, you might say, that's Europe. They've been nationalizing companies for years. But the same trend is happening in the United States. The difference is that here it's not the US government that's taking over financial institutions. It's governments from Asia and the Middle East. Singapore recently paid $4.4 billion for an ownership stake in Merrill Lynch. The Chinese bought a $5 billion piece of Morgan Stanley. Abu Dubai is spending billions on other American financial institutions. The list of foreign owners continues to lengthen, and the amount they're shelling out to buy American banks continues to grow.

As their balance sheets weaken, America's big financial houses are getting bailed out by selling out. It's only logical, from their viewpoint. American banks need the cash and oil-producing and East-Asian governments have it. Yet there's no end in sight for the credit crisis, and Middle Eastern and East Asian "sovereign wealth funds" are in the process of owning a larger and larger portion of the global banking system. These funds are growing by more than a trillion dollars a year. At this rate, they'll BE the global banking system.

The problem is, government ownership doesn't work. Governments are lousy at deciding where profits can be found. They're liable to make decisions based on politics rather than profits.

It's the biggest irony in financial history. Decades of U.S. government deregulation of Wall Street has reaped a whirlwind of irresponsible speculation. It's now ending in a financial meltdown that's being remedied by government ownership, with all the strings that come with government ownership. And it's not even OUR government that's holding the strings.

posted by Robert Reich

[Demeter]

59. US MIrroring Japan's Lost Decade? DailyReckoning.com

In trying to fight deflation rather than inflation, the Fed chose the wrong enemy, in our opinion. At least it could win the fight with inflation. Paul Volcker proved it was possible. The fight against deflation, on the other hand, is a losing proposition. When Mr. Market wants to deflate, there is not much a central bank to do to stop it; Paul Volcker’s Japanese counterparts proved that.

Western kibitzers blamed Japan’s authorities for not allowing the banks to fail. Japan’s big bank had lent hundreds of billions to Japanese industry in the boom years. Then, when the boom was over, the loans went bad. But the banks were ‘too big to fail,’ so the bad debt couldn’t be marked to market and the financial sector couldn’t move on.

In America, the big financial firms have plenty of debt too. Much of it is certainly bad. So far, many Wall Street lenders have fessed up to losses – totaling more than $100 billion. But there is much more...still waiting to be discovered.

What’s more, America’s debt is not only broader and deeper than its Japanese equivalent...it is also more inscrutable. It’s not only the big players who have a lot of debt in the United States, in other words; the little guy has his share. And right now, U.S. authorities are looking for ways to keep the little guy from getting what he deserves – and, incidentally, protect the big lenders from further losses at taxpayer expense.

[Demeter]

62. Fed Watch: This Train Doesn’t Stop

http://economistsview.typepad.com/economistsview/2008/02/fed-watch-this.html



This Train Doesn’t Stop, by Tim Duy

Dual mandate, but one policy tool. A choice has to be made in the short run. Focus on inflation, and hold policy relatively tight? Or focus on growth, hoping that soft economic growth will tame inflationary pressures? The Fed continues to choose the latter path. In truth, at this point they have no other choice. It was unlikely that the Fed could bring a halt to this easing cycle as long as economic data point at recessionary conditions; this was always the danger of moving so quickly early in the cycle. And it became unthinkable to back away from the current set of policies after Congress followed up on Fed Chairman Ben Bernanke’s push for fiscal stimulus. The die is cast. Look for another 50bp in March and then two more 25bp cuts at subsequent meetings to bring the Fed Funds rate to 2%.

Bernanke’s Senate testimony left unchanged market expectations for additional easing. The overall tone was, as expected, in line with the dour assessment offered by Vice Chair Donald Kohn. The encouraging signs – low inventories, solid balance sheets in nonfinancial corporations, solid export growth – were few, while weakness was abundant. It read as an extended version of his February 14th testimony. That said, there are heightened inflation concerns. This sentence from February 14:

A critical task for the Federal Reserve over the course of this year will be to assess whether the stance of monetary policy is properly calibrated to foster our mandated objectives of maximum employment and price stability and, in particular, whether the policy actions taken thus far are having their intended effects.

Has evolved to:

A critical task for the Federal Reserve over the course of this year will be to assess whether the stance of monetary policy is properly calibrated to foster our mandated objectives of maximum employment and price stability in an environment of downside risks to growth, stressed financial conditions, and inflation pressures.

While not saying so outright, the new sentence implies stagflation. Not surprising, as incoming price data are difficult to ignore, and left the Fed revising upward their near term inflation expectations despite a downwardly revised growth outlook:

The central tendency of the projections for core PCE inflation in 2008, at 2.0 percent to 2.2 percent, was a bit higher than in our July report, largely because of some higher-than-expected recent readings on prices.

Still, the expectation is that inflation will moderate in the months ahead, allowing Bernanke to succinctly define the near term path of policy:

Therefore, our policy stance must be determined in light of the medium-term forecast for real activity and inflation as well as the risks to that forecast. Although the FOMC participants' economic projections envision an improving economic picture, it is important to recognize that downside risks to growth remain. The FOMC will be carefully evaluating incoming information bearing on the economic outlook and will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks.

Insurance against downside risk + benign inflation outlook = more rate cuts. While interesting to dissect, the relevance of Bernanke’s testimony for near-term policy was something of a forgone conclusion. Consider this:

However, the recently enacted fiscal stimulus package should provide some support for household spending during the second half of this year and into next year.

I don’t think it should be forgotten that the stimulus package was arguably custom designed by Bernanke:

I agree that fiscal action could be helpful in principle, as fiscal and monetary stimulus together may provide broader support for the economy than monetary policy actions alone. But the design and implementation of the fiscal program are critically important…

To be useful, a fiscal stimulus package should be implemented quickly and structured so that its effects on aggregate spending are felt as much as possible within the next twelve months or so.

In other words, “DO IT NOW.” Congress and the President obliged, spilling red ink to get the checks in the mail in time for the summer driving season. If Bernanke fails to deliver additional rate cuts as expected, it will be perceived as a negative policy shock. I have got to imagine that Fed action to offset the fiscal stimulus that Bernanke supported would not go over well on Capitol Hill. The Senate would be inclined to crack open the Federal Reserve Act and make an omelet.

Not surprisingly, Bernanke’s inclination to continue pushing rates lower is resonating throughout financial markets. Inflationary pressures are building globally (note that China is completing the chain that leads to an inflationary spiral, setting the expectation that high inflation will be matched by higher wages), reflected in surging commodity prices and the freefall of the dollar. The former is weighing heavily on US consumers. Indeed, I am amazed that this story is only starting to capture the attention of the press. So much attention is placed on the housing market as the source of declining consumer confidence, but over the last three months, headline CPI has surged 6.8% annualized. Sure doesn’t look like nominal wages gains are keeping up. No wonder confidence is collapsing.

And I sense it’s going to get worse – the Fed’s policy stance is giving additional impetus to commodity prices as investors pile into the asset class as an inflation hedge and a response to the weaker dollar. Moreover, low US risk free returns (a measly 2% on a 2 year Treasury) are forcing market participants to search out higher returns, and commodity prices look like a safe bet for the time being. The new asset bubble? Perhaps – but this one will have a primarily inflationary impact on the US economy. Moreover, it will weigh against the deflationary impact of the housing/credit market turmoil. Swamping it if the policy response is to continue propping up an unsustainable level of domestic demand. (I wonder when someone in Congress is going to realize that higher inflation is rapidly chipping away at the recent minimum wage hike?)

Not a pretty combination of events. And Bernanke knows it:

Upside risks to the inflation projection are also present, however, including the possibilities that energy and food prices do not flatten out or that the pass-through to core prices from higher commodity prices and from the weaker dollar may be greater than we anticipate. Indeed, the further increases in the prices of energy and other commodities in recent weeks, together with the latest data on consumer prices, suggest slightly greater upside risks to the projections of both overall and core inflation than we saw last month.

But the bottom line is that he can’t stop the rate-cutting train now. He can only hope that inflation expectations remain reasonably well anchored while his attention is focused on the deteriorating growth outlook. To pull this off, Bernanke will have to hope for minimal nominal wage growth. I don’t know if this will be a political feasible outcome after the period of real wage stagnation experienced during the Bush Administration.

Sidenote: CR found the silver lining to higher inflation – it will accelerate the housing correction in real terms.

[Demeter]

64. And That's My Last Depressing Post for the Day

Whoever called economics the Dismal Science must have lived in times like these!

[Hugin]

67. You used the 'D' word!

*gasp* :scared:

[Demeter]

68. I Use It A Lot--Get Used to It!

It will be all the rage before long...

[Hugin]

69. La la la la la... LA! LA! LA! I can't hear you!

I just read your next post about the 'happy talk'.

[54anickel]

78. You can't leave without a cross-post plug for that Paul Craig Roberts piece you posted

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x342372


It Does Happen in America; The Political Trial of Don Siegelman

Don Siegelman, a popular Democratic governor of Alabama, a Republican state, was framed in a crooked trial, convicted on June 29, 2006, and sent to Federal prison by the corrupt and immoral Bush administration.

The frame-up of Siegelman and businessman Richard Scrushy is so crystal clear and blatant that 52 former state attorney generals from across America, both Republicans and Democrats, have urged the US Congress to investigate the Bush administration's use of the US Department of Justice to rid themselves of a Democratic governor who "they could not beat fair and square," according to Grant Woods, former Republican Attorney General of Arizona and co-chair of the McCain for President leadership committee. Woods says that he has never seen a case with so "many red flags pointing to injustice."

The abuse of American justice by the Bush administration in order to ruin Siegelman is so crystal clear that even the corporate media organization CBS allowed "60 Minutes" to broadcast on February 24, 2008, a damning indictment of the railroading of Siegelman. Extremely coincidental "technical difficulties" caused WHNT, the CBS station covering the populous northern third of Alabama, to go black during the broadcast. The station initially offered a lame excuse of network difficulties that CBS in New York denied. The Republican-owned print media in Alabama seemed to have the inside track on every aspect of the prosecution's case against Siegelman. You just have to look at their editorials and articles following the 60 Minutes broadcast to get a taste of what counts for "objective journalism" in their mind.

The injustice done by the US Department of Justice (sic) to Siegelman is so crystal clear that a participant in Karl Rove's plan to destroy Siegelman can't live with her conscience. Jill Simpson, a Republican lawyer who did opposition research for Rove, testified under oath to the House Judiciary Committee and went public on "60 Minutes." Simpson said she was told by Bill Canary, the most important GOP campaign advisor in Alabama, that "my girls can take care of Siegelman."

more at article...

[Demeter]

85. Oh. Okay. I Didn't Know That Was Required

[54anickel]

96. Well, not required...more of a shameless plug on my part for an interesting piece

by a guy of the former, now unrecognizable, opposing political party who's honesty I've often admired.
I used to post his stuff quite often here in the SMW thread....some of the only deleted entries ever in the history of this thread.

[Ghost Dog]

108. Deleted entries in SMW?

Who'd have thunk it!

[InkAddict]

79. Just how far down should I correct to stay alive;

inner city single bdrom apartment for three; tent???

In #2, I imaging "non-financial" corporations means those whose products are financial in nature, like banks and mortgage lenders," but in truth, all corporations are "financial" in eventuality--they've got to keep their revenue somewhere and pay their bills through the same. How many are their own stock registrars?

This crew has a long way to go yet; is it even reasonable to think they won't pull yet another BIG mistake??? Is it reasonable that the other side has any new programs on tap they be able to institute that will actually make things any better for our children/grandchildren since I've given up hope I'll see better times.

[TalkingDog]

103. Runaway Train one of the great existential films (along with Das Boot)

http://en.wikipedia.org/wiki/Runaway_Train_(film)


http://en.wikipedia.org/wiki/Das_boot


Since were feeling dreary and down and other "d" type words.....

[Demeter]

65. Why the Fed is Compelled to Lie to Congress

http://bigpicture.typepad.com/comments/2008/02/why-the-fed-is.html

I had an interesting conversation yesterday about Ben Bernanke's testimony with a person upset over the obvious understatements, spin, and happy talk -- even as the Fed Chair quite soberly discussed the US slowdown.

If the Fed were to come clean about the present circumstances, it would cause a market panic. That's why we get this very gradual shift in assessments, all designed to be somewhat reassuring as it slowly feeds measured dollops of reality into the marketplace.

Yesterday's dovish congressional testimony from Bernanke (and in Vice Chair Don Kohn's speech the day prior) will be continued today. It is, as it has always been and always will be.

Why? Imagine if the Fed Chair told the unvarnished truth: The Dow would see a 1,000 point intra-day drop, and that won't help the Fed steer the ship.

Imagine if the Fed fessed up to what we know to be true, and what we suspect the future might bring:


Opening statement of the FOMC Chair, Senate Testimony
February 27, 2008:

Senators, we find ourselves in a very challenging situation.

Following the dot com implosion, my predecessor at the Fed slashed rates to a generational low of 1%; the FOMC then kept rates at 1% for over a year.

While that re-inflated the economy, it also set off a shock wave of inflation unseen since the 1970s. Houses doubled in price, Oil is up 5 fold, food stuffs have tripled, and the dollar has collapsed. Gold is at multi-decade highs.

As always happens, these price increases in hard assets attracted speculators, and that made the situation -- especially in housing -- much more complex. Even worse, the housing speculation contributed to a debacle, while these other assets are actually accelerating in price.


Further, as was the political fashion, deregulation and a lack of interest in the oversight role of the banking system allowed an unprecedented expansion of credit, including to the least credit worthy consumers. Additionally, derivative selling -- at is heart, an unregulated form of insurance -- expanded from a few billion dollars to $46 trillion dollars.

The credit crunch is unprecedented, far worse than the S&L collapse and Long Term Capital Management -- combined.


All of these factors have combined to create our present situation. Inflation remains very elevated and worse, quite sticky. Growth continues to slide towards zero -- and possibly beyond.

Like many others, our forecasts in these areas have been wrong. We expected the slowing economy to moderate inflation, and so far, that has not happened. Demand for commodities from China and India is keeping prices elevated. The weakening dollar -- now at levels last seen in the 1960s -- is forcing all dollar denominated commodities higher. I don't necessarily believe in "Peak Oil," but the fact that the Saudis are one of the world's biggest investors in alternative energy research might tell you something.

The last time a slowing economy failed to moderate prices was the 1970s. Even as the economy slid into recession, we had major spikes in the prices of energy, food, clothing.

What is particularly worrisome to me is that as we have slashed interest rates 225 basis points, consumer loans -- mortgages and revolving credit -- have actually moved higher.

Gentleman, this is a major problem. And our internal, non-public projections forecast it is only going to get worse for the next 4 quarters . . .

Now you understand why the Fed fibs. If they told the full and unvarnished truth, it would be beyond fugly.

[Roland99]

66. 10:38am - Heading down and gold getting REALLY close $1000/oz. Oil at new high.

Dow 12,226.25 -40.14
Nasdaq 2,264.40 -7.08
S&P 500 1,329.53 -1.10
10 YR 3.58% 0.04
Oil $103.65 $1.81
Gold $991.10 $16.10

[Hugin]

72. ~11:00 ET: Now below 12,200 PIL...

Slightly, but, there were a couple of reports due at around 10:00.

Index Last Change % change
• DJIA 12198.58 -67.81 -0.55%
• NASDAQ 2259.17 -12.31 -0.54%
• S&P 500 1325.56 -5.07 -0.38%

[AnneD]

92. And today's theme song....

Another One Bites the Dust by Queen

Steve walks warily down the street,
With the brim pulled way down low
Aint no sound but the sound of his feet,
Machine guns ready to go
Are you ready, are you ready for this
Are you hanging on the edge of your seat
Out of the doorway the bullets rip
To the sound of the beat

Another one bites the dust
Another one bites the dust
And another one gone, and another one gone
Another one bites the dust
Hey, Im gonna get you too
Another one bites the dust

How do you think Im going to get along,
Without you, when youre gone
You took me for everything that I had,
And kicked me out on my own

Are you happy, are you satisfied
How long can you stand the heat
Out of the doorway the bullets rip
To the sound of the beat

More.....

http://www.lyricsfreak.com/q/queen/another+one+bites+the+dust_20112678.html

Another barrier broken. Kinda like the netting around the Great Barrier Reef in Oz...Watch out for those Great Whites.

[54anickel]

95. From some of the earlier posts regarding some sort of awakening to what's

been going on, I was thinking more along Doctor My Eyes from Jackson Browne....but I just caught the milestone....


Doctor, my eyes have seen the years
And the slow parade of fears without crying
Now I want to understand

I have done all that I could
To see the evil and the good without hiding
You must help me if you can

Doctor, my eyes
Tell me what is wrong
Was I unwise to leave them open for so long

cause I have wandered through this world
And as each moment has unfurled
Ive been waiting to awaken from these dreams
People go just where there will
I never noticed them until I got this feeling
That its later than it seems

Doctor, my eyes
Tell me what you see
I hear their cries
Just say if its too late for me

Doctor, my eyes
Cannot see the sky
Is this the prize for having learned how not to cry

[AnneD]

104. That's a good one too

I think our common theme is exposed lies, mistrust,and death of hopes and dreams.

[NMDemDist2]

94. wasn't 12,200 some kind of point they were watching for

bad news point?

[AnneD]

105. I'm thinking ....

it is our current floor, but as conditions deteriorate, it will soon be a ceiling.

[NMDemDist2]

107. ok, that's what I was thinking of, thanks N/T

[Demeter]

109. And My Sister Was Trying To Tell Me Gold Had Peaked Last Month!

I have two years more experience (and DU). It makes a difference!

[54anickel]

83. Oil Jumps to New Record on Dollar's Fall

http://biz.yahoo.com/ap/080303/oil_prices.html

Monday March 3, 12:05 pm ET

Oil Jumps to a New Record Above $103 As the Dollar Declines to a New Low Against the Euro

NEW YORK (AP) -- The surging price of oil reached another milestone Monday, jumping to an inflation adjusted record high of $103.95.
The weaker dollar that has propelled oil and other commodities prices higher sent light, sweet crude for April delivery past $103.76 a barrel on the New York Mercantile Exchange. That's the level many analysts consider to be the true record high for oil, after its $38 barrel price from 1980 is translated into 2008 dollars.

The price later traded up $1.52 at $103.36, fluctuating with the normal ebb and flow of trading.

Oil's most recent run into record territory has been driven by the greenback's slump against other world currencies. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is falling.

more...

[54anickel]

97. 2:24 update - blather thru the lunch hour....

Dow 12,213.07 53.32 (0.43%)
Nasdaq 2,252.38 19.10 (0.84%)
S&P 500 1,326.01 4.62 (0.35%)
10-Yr Bond 3.549% 0.015
NYSE Volume 2,659,099,500
Nasdaq Volume 1,434,895,875

2:00 pm : The broader market has stuck its head into the red. The session remains choppy.

Ford (F 6.24, -0.29) announced North American February sales decreased 7% year-over-year, which is less subdued than the 14% downturn that was widely anticipated. General Motors (GM 23.04, -0.24) announced North American February sales declined 13%. Analysts were expecting a 14% decline.

Total seasonally adjusted annual domestic vehicle sales totaled 11.9 million units, up from 11.7 million units. That marks the lowest level since 2005.DJ30 -0.33 NASDAQ -0.51 SP500 -0.14 NASDAQ Dec/Adv/Vol 1812/1055/1.31 bln NYSE Dec/Adv/Vol 1670/1417/900 mln

1:30 pm : The S&P 500 is trading near the unchanged mark as it has for most of the afternoon.

The Nasdaq 100 (-0.6%) is underperforming due to weakness in large cap tech names. Apple (AAPL 120.57, -4.455), Qualcom (QCOM 41.10, -1.29) and Google (GOOG 458.67, -12.51) are the main laggards. Apple and Google have struggled in 2008, down 39% and 34%, respectively. Qualcom has outperformed its peers and is posting a slight gain year-to-date.DJ30 -31.59 NASDAQ -8.00 SP500 -0.45 NASDAQ Dec/Adv/Vol 1739/1101/1.19 bln NYSE Dec/Adv/Vol 1616/1447/824 mln

1:00 pm : Stocks have come off their intraday peak and broken back into negative territory. The financial sector (-0.9%) remains a drag on the broader market's performance, though up from its session low.

Financials, healthcare (-0.1%), and technology (-0.5%) are the only sectors to trade in negative territory this session. All ten major economic sectors have posted losses year-to-date.

Buying interest on the NYSE remains evenly distributed between buyers and sellers.DJ30 -32.16 NASDAQ -8.74 SP500 -1.19 NASDAQ Dec/Adv/Vol 1768/1063/1.09 bln NYSE Dec/Adv/Vol 1659/1392/752 mln

12:30 pm : The S&P 500 is in positive territory after dipping momentarily into negative territory. Its recent push has sent it to its highest level of the session.

Additional gains in crude prices continue to bolster the energy sector (+1.4%) this session. As of midday, crude was trading $1.68 higher at $103.52 per barrel.

Financial stocks remain out of favor. The sector is down 0.6%, dragged lower by underperformers such as Citigroup (C 23.18, -0.53), Bank of America (BAC 39.31, -0.43), and JP Morgan Chase (JPM 40.10 -0.55).DJ30 +3.75 NASDAQ -0.55 SP500 +3.40 NASDAQ Dec/Adv/Vol 1626/1185/982 mln NYSE Dec/Adv/Vol 1550/1490/681 mln

12:00 pm : The stock market kicked off the month of March on a low note, extending last Friday's steep declines. There was not a specific item for the negative sentiment, but rather a continuation of concerns from last week, particularly regarding the financial sector. At midday, the major indices have made a recovery, and are trading in mixed fashion near the unchanged mark. Seven of the ten sectors are trending higher.

Bond insurer Ambac (ABK 10.13, -1.01) is down 9% after the company announced plans to strengthen the company and support its ratings. Ambac is cutting its quarterly dividend to $0.01 from $0.07, suspending all new structured financial business for the next six months and will be discontinuing business in a number of sectors in the global structured finance market.

Continued concerns over additional write-downs due to the subprime fallout are weighing on the financial sector (-0.7%), which is the main laggard in today's trade, although it is well off its lows. Warren Buffett said it is a "certainty" that the insurance industry will see a decrease in profit margins in 2008, which is also weighing on sentiment.

In other corporate news, shares of Boeing (BA 79.87, -2.92) are under pressure on news that it lost out to Northrop Grumman (NOC 82.12, +3.51) to provide special aerial refueling tankers for the Air Force. Reports indicate the deal could be worth up to $40 billion.

In merger and acquisition news, Diebold (DBD 38.97, +14.85) is up more than 60% in its largest daily move ever, after United Technologies (UTX 69.15, -1.37) offered to pay $2.6 billion for the ATM and voting machine maker. The offer represents a 65% premium over Diebold's closing price last week. Diebold's board had already rejected the offer before it was made public.

Tech (-0.3%) is underperforming. Apple (AAPL 121.37, -3.65) is the main laggard after having its price target cut at RBC and BofA. There is also a Reuters report that indicates China Mobile is not officially in talks with Apple.

In economic news the February ISM Index fell to 48.3 from 50.7. Economists expected a reading of 48.0. Because the reading is below 50, it reflects a contraction in manufacturing in the United States. The major indices traded in choppy fashion following the slightly better than expected report.

In a separate report, January construction spending fell 1.7% month-over-month. This was a larger slide than the expected decline of 0.7%.

After making its largest monthly percent gain since the 1970s in February, the CRB Commodity Index is again hitting all-time highs. The index's 1.4% advance is being fueled by gains in oil (+$1.81 to $103.65) and gold (+1.2% to $986.30), both of which hit all-time non-inflation adjusted highs.

The gains in commodities is giving a lift to the Energy (+1.3%) and materials (+1.5%) sectors.DJ30 -0.81 NASDAQ -2.13 SP500 +2.52 NASDAQ Dec/Adv/Vol 1633/1141/883 mln NYSE Dec/Adv/Vol 1555/1481/612 mln

[54anickel]

100. How will you spend the money you get from the economic stimulus package?

http://www.mlive.com/business/index.ssf/2008/03/katie_rausch_the_flint.html

big snip>

While many plan to save their windfall, the National Retail Federation estimates that consumers immediately will use some of the money to pump nearly $43 billion into the economy, some buying basic necessities.

Some $30 billion will go to pay down debt, nearly $20 billion will get saved, $4.4 billion will go toward investments and another $4.6 billion will get used to pay medical bills, according to a NRF survey conducted by BIGresearch.

The Michigan Retailers Association also is banking on the rebate checks giving its members an uptick in business.

"We're sure the recipients will use them wisely and I'm sure that retail will enjoy a fair share of that," said Jim Hallan, president and chief executive officer of the association, which has more than 5,500 member businesses.

There are some cases where the government will take the rebates.

Luis Garcia, a spokesman for the Internal Revenue Service in Michigan, said that if people have severely defaulted on federal student loans or have sizable back child support due, their rebate could be reduced or relinquished.

more...

[54anickel]

102. Bush Deficit at Record as Treasuries Deter Pensions (Update2)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aouttWQi0.U8&refer=home

March 3 (Bloomberg) -- Philadelphia's $4 billion pension deficit is causing the city's retirement-fund manager to shun Treasuries at a time when the Bush administration needs him most.

Yields on 30-year U.S. bonds that fell to a record low of 4.10 percent this year are forcing pension funds to favor equities, corporate debt and commodities in an attempt to cover unfunded liabilities and meet return objectives of about 8 percent. Even the federal government's own Pension Benefit Guaranty Corp. said on Feb. 19 that it plans to shift $15 billion to stocks from debt.

``The reality is there's not a lot we can do'' other than buy high-risk securities to close a pension shortfall in a short period, said Chris McDonough, chief investment officer of the Philadelphia Pensions Department. The sixth-largest U.S. city will probably also issue debt, he said.

Fixed-income holdings at 1,100 funds fell to 23 percent in 2006 from 27 percent in 2003, said Dev Clifford, a consultant at financial market research firm Greenwich Associates in Greenwich, Connecticut. Results of a survey covering 2007 will be released this month and likely show that funds own an even smaller percentage of bonds, he said.

Philadelphia's predicament couldn't come at a worse time for George W. Bush, whose administration forecasts a $410 billion budget deficit for this fiscal year ending Sept. 30, approaching the record of $413 billion set in 2004. The figure may eventually reach as much as $800 billion, according to Bill Gross, manager of the world's biggest bond fund at Pacific Investment Management Co. in Newport Beach, California.


more...



It appears they will not rest until they have siphoned every last dime from the working stiffs of America.......

[RUMMYisFROSTED]

110. *

[Ghost Dog]

112. So it says here, "eking" up at the close:

Dow 12,258.90 Down 7.49 (0.06%)
Nasdaq 2,258.60 Down 12.88 (0.57%)
S&P 500 1,331.34 Up 0.71 (0.05%)
10-Yr Bond 3.5340% 0.0000
NYSE Volume 4,118,753,250
Nasdaq Volume 2,203,912,500

4:25 pm : In the wake of Friday's material sell-off, the stock market eked out a slight gain on Monday. To be sure, the performance was much better than many participants had feared and certainly much better than what had been seen in foreign markets.

Asian indices led the foreign retreat as they reacted to Friday's action on Wall Street. The Nikkei Average in Japan fell 4.5% while India's Sensex Index dropped 5.1%. European bourses fared better on a comparative basis, yet the majority of them still ended Monday's session down more than 1.0%.

Trading activity in the U.S. was choppy on Monday, but ended on a relatively upbeat note with the major indices bouncing back from larger declines in the final half-hour.

The resilience was noteworthy as both the financial and technology sectors underperformed the market with declines of 1.2% and 0.6%, respectively. Granted they participated in the late-day recovery, yet they still ended the day with losses and were the only two sectors to finish with a loss.

Concerns about the earnings prospects for the investment banks, along with the specter of additional losses related to subprime and dislocations in the credit market, were the main drags on the financial sector. Thornburg Mortgage (TMA 4.32, -4.58) was a poster child for many of the concerns as it got clobbered following an announcement that it had not yet met the majority of recent margin calls that totaled approximately $270 million.

Losses among influential large-cap technology stocks like Google (GOOG 457.02, -14.16), Research In Motion (RIMM 100.15, -3.65), Microsoft (MSFT 26.99, -0.21) and Apple (AAPL 121.73, -3.29), meanwhile, acted as the drag on the technology sector.

The rest of the market fared reasonably well, underpinned by the outperformance of the remaining sectors. Materials, up 1.6%, led the winning pack as it drafted off yet another big gain in the commodity arena.

The CRB Index jumped 1.0% with most agricultural, precious metal, and oil prices moving higher. Gold closed at another non-inflation adjusted high of $984.20 per ounce while oil prices hit a new non-inflation adjusted peak of $103.95 per barrel before finishing the day up 0.6% at $102.46 per barrel.

The increase in oil prices failed to derail the transports, which gained 0.8% and comprised one of the market's best-performing areas on Monday.

Today's economic data included the ISM Index for February and Construction Spending for January. The latter, driven by a decline in residential construction, fell 1.7% versus the market's expectation for a drop of just 0.7%. The ISM Index, a survey of national manufacturing activity, checked in at 48.3 versus the consensus estimate of 48.0 and the prior month's reading of 50.7.

A number below 50 for the ISM Index is meant to signal contraction, yet the market traded up immediately following its release, presumably on a sense of relief the number wasn't any worse given the weak readings seen in a number of regional manufacturing reports.

The ISM boost didn't last long, though, as the persistent weakness in the financial stocks took its toll.

At their lows for the day, the Dow, Nasdaq and S&P were down 105, 31 and 10 points, respectively.DJ30 -7.49 NASDAQ -12.88 NQ100 -0.7% R2K -0.3% SP400 +0.2% SP500 +0.71 NASDAQ Dec/Adv/Vol 1890/1095/2.58 bln NYSE Dec/Adv/Vol 1694/1449/1.52 bln

3:30 pm : The stock market is making a recovery effort, but still remains in negative territory.

The defensive-oriented utility sector (+0.9%) has been a relative leader in afternoon trade. The sector has been helped by Exelon's (EXC 77.24, +2.39) outperformance. The utility giant has been a leader in the S&P 500 this session.

Materials (+0.6%) have also held up amid today's selling pressure. Members Monsanto (MON 117.53, +1.85) and Alcoa (AA 37.83, +0.69) are providing leadership to materials.DJ30 -60.49 NASDAQ -22.85 SP500 -5.34 NASDAQ Dec/Adv/Vol 2025/916/1.80 bln NYSE Dec/Adv/Vol 1957/1149/1.24 bln

3:05 pm : The major indices have taken out fresh lows as Energy has relinquished its leadership position. The sector is down 0.5% after being up 1.9% earlier.

Sentiment has turned negative as utilities (+0.4%) and materials (+0.1%) are the only sectors to trade noticeably higher this session. Consumer staples are flat.

Sellers now outpace buyers by 2-to-1 on the NYSE.

Pessimism is broad based. The Dow Jones World Index, excluding the U.S., is trading 1.8% lower.DJ30 -93.78 NASDAQ -27.39 SP500 -9.19 NASDAQ Dec/Adv/Vol 2103/826/1.65 bln NYSE Dec/Adv/Vol 2107/1005/1.14 bln

2:30 pm : Stocks continue to push lower into negative territory, no longer supported by the energy sector (flat). Energy had been a leader in today's trading, but has surrendered its gains and is trading near the unchanged mark. The energy sector was up 1.9% at its peak.

Energy has come off its peak as crude prices have pulled back from earlier levels. The commodity is trading near the unchanged mark, $101.90 per barrel.DJ30 -58.62 NASDAQ -19.74 SP500 -5.07 NASDAQ Dec/Adv/Vol 2028/869/1.47 bln NYSE Dec/Adv/Vol 1965/1125/1.01 bln

2:00 pm : The broader market has stuck its head into the red. The session remains choppy.

Ford (F 6.24, -0.29) announced North American February sales decreased 7% year-over-year, which is less subdued than the 14% downturn that was widely anticipated. General Motors (GM 23.04, -0.24) announced North American February sales declined 13%. Analysts were expecting a 14% decline.

Total seasonally adjusted annual domestic vehicle sales totaled 11.9 million units, up from 11.7 million units. That marks the lowest level since 2005.DJ30 -0.33 NASDAQ -0.51 SP500 -0.14 NASDAQ Dec/Adv/Vol 1812/1055/1.31 bln NYSE Dec/Adv/Vol 1670/1417/900 mln

[citizen snips]

114. Diebold Shares Soar on UTC's $2.63B Bid

HARTFORD, Conn. (AP) -- Diebold Inc. may find it impossible to resist a $2.63 billion buyout offer by United Technologies Corp., which is aggressively seeking to expand its security business in Asia, observers said Monday.

United Technologies on Sunday offered $40 a share, a 67 percent premium over Diebold's closing price Friday. Diebold shares climbed $14.72, or 61 percent Monday to $38.84. United Technologies shares fell $1.11 to $69.40.

Diebold turned down the bid Monday, calling it opportunistic, and urged its shareholders to take no action.

Peter Murphy, a spokesman for United Technologies, said the company is disappointed with the response from Diebold officials "and we presume their shareholders are as well."

more...
http://biz.yahoo.com/ap/080303/united_technologies_diebold.html

[citizen snips]

115. Merck Says 44K Sign for Vioxx Settlement

NEW ORLEANS (AP) -- More than 44,000 people have signed up for shares of a $4.85 billion settlement over the withdrawn painkiller Vioxx, a sign that the deal is on track to go forward, Merck & Co. announced Monday.

Of roughly 47,000 people who registered for the settlement earlier this year, more than 44,000 have submitted all or some of the paperwork necessary for enrollment in the deal, Merck said in a news release.

People who enrolled in the settlement by this past Friday could be eligible to receive an interim payment later this year.

Whitehouse Station, N.J.-based Merck has said it will withdraw from the agreement unless at least 85 percent of people in different groups of claimants join in the settlement.

more...
http://biz.yahoo.com/ap/080303/vioxx_settlement.html

[citizen snips]

116. Barnes & Noble Raises 4Q Outlook

NEW YORK (AP) -- Bookseller Barnes & Noble Inc. on Monday raised its fourth-quarter earnings guidance, but its adjusted profit will still likely fall below Wall Street analysts' estimates.

The company said it now expects fourth-quarter earnings per share between $1.76 and $1.82, including 10 cents per share in benefits from property insurance and litigation settlements.

Previously, the company had expected quarterly earnings of $1.57 to $1.76 per share.

Excluding the benefits, Barnes and Noble said its profit would be in the middle of the previous range, or about $1.67 per share.

more...
http://biz.yahoo.com/ap/080303/apfn_barnes_noble_outlook.html

[citizen snips]

117. Bankruptcy Makes Gift Cards Worthless

NEW YORK (AP) -- You know that Sharper Image gift card you got for Christmas? Right now, it's worthless. And other gift cards in your wallet could lose their value, too.

As more retailers file for bankruptcy or go out of business, more than $75 million in gift cards are at risk of becoming worthless pieces of plastic this year.

"If I knew this was going to happen, I would have used them right away," said Jon Tapper, a public relations executive from Boston who received two Sharper Image cards as business gifts just a few weeks ago. Their total face value is $50.

"I love gift cards, but now this makes me think twice."

more...
http://biz.yahoo.com/ap/080303/bankruptcy_gift_cards.html

[citizen snips]

118. Automakers Suffer February Double Whammy

DETROIT (AP) -- Automakers got hit where it hurts in February, with U.S. sales of their most profitable vehicles -- trucks, sport utilities and large sedans -- plunging as consumers reacted to high gas prices and the possible recession. General Motors Corp. and Ford Motor Co. announced second-quarter production cuts in the face of the falling sales.

GM reported a sales decline of almost 13 percent for the month while Ford's sales slumped 7 percent, Chrysler's tumbled 14 percent and Toyota's fell 3 percent. It was expected to be a difficult month for automakers as consumer confidence continued to slide. Declines in home construction also have significantly weakened truck sales.

Mark LaNeve, GM's vice president for North American sales and marketing, said tightening automotive credit standards may also be hurting sales.

"On the edges of a difficult market, it's one of those things that makes it more difficult," LaNeve said

more...
http://biz.yahoo.com/ap/080303/auto_sales.html?.v=12

[UpInArms]

119. this is the end, my friends - of a very long day

Dow 12,258.90 7.49 (0.06%)
Nasdaq 2,258.60 12.88 (0.57%)
S&P 500 1,331.34 0.71 (0.05%)
10-Yr Bond 3.534% 0.00

NYSE Volume 4,118,963,750
Nasdaq Volume 2,207,554,750

In the wake of Friday's material sell-off, the stock market eked out a slight gain on Monday. To be sure, the performance was much better than many participants had feared and certainly much better than what had been seen in foreign markets.

Asian indices led the foreign retreat as they reacted to Friday's action on Wall Street. The Nikkei Average in Japan fell 4.5% while India's Sensex Index dropped 5.1%. European bourses fared better on a comparative basis, yet the majority of them still ended Monday's session down more than 1.0%.

Trading activity in the U.S. was choppy on Monday, but ended on a relatively upbeat note with the major indices bouncing back from larger declines in the final half-hour.

The resilience was noteworthy as both the financial and technology sectors underperformed the market with declines of 1.2% and 0.6%, respectively. Granted they participated in the late-day recovery, yet they still ended the day with losses and were the only two sectors to finish with a loss.

Concerns about the earnings prospects for the investment banks, along with the specter of additional losses related to subprime and dislocations in the credit market, were the main drags on the financial sector. Thornburg Mortgage (TMA 4.32, -4.58) was a poster child for many of the concerns as it got clobbered following an announcement that it had not yet met the majority of recent margin calls that totaled approximately $270 million.

Losses among influential large-cap technology stocks like Google (GOOG 457.02, -14.16), Research In Motion (RIMM 100.15, -3.65), Microsoft (MSFT 26.99, -0.21) and Apple (AAPL 121.73, -3.29), meanwhile, acted as the drag on the technology sector.

The rest of the market fared reasonably well, underpinned by the outperformance of the remaining sectors. Materials, up 1.6%, led the winning pack as it drafted off yet another big gain in the commodity arena.

The CRB Index jumped 1.0% with most agricultural, precious metal, and oil prices moving higher. Gold closed at another non-inflation adjusted high of $984.20 per ounce while oil prices hit a new non-inflation adjusted peak of $103.95 per barrel before finishing the day up 0.6% at $102.46 per barrel.

The increase in oil prices failed to derail the transports, which gained 0.8% and comprised one of the market's best-performing areas on Monday.

Today's economic data included the ISM Index for February and Construction Spending for January. The latter, driven by a decline in residential construction, fell 1.7% versus the market's expectation for a drop of just 0.7%. The ISM Index, a survey of national manufacturing activity, checked in at 48.3 versus the consensus estimate of 48.0 and the prior month's reading of 50.7.

A number below 50 for the ISM Index is meant to signal contraction, yet the market traded up immediately following its release, presumably on a sense of relief the number wasn't any worse given the weak readings seen in a number of regional manufacturing reports.

The ISM boost didn't last long, though, as the persistent weakness in the financial stocks took its toll.

At their lows for the day, the Dow, Nasdaq and S&P were down 105, 31 and 10 points, respectively.DJ30 -7.49 NASDAQ -12.88 NQ100 -0.7% R2K -0.3% SP400 +0.2% SP500 +0.71 NASDAQ Dec/Adv/Vol 1890/1095/2.58 bln NYSE Dec/Adv/Vol 1694/1449/1.52 bln

3:30 pm : The stock market is making a recovery effort, but still remains in negative territory.

The defensive-oriented utility sector (+0.9%) has been a relative leader in afternoon trade. The sector has been helped by Exelon's (EXC 77.24, +2.39) outperformance. The utility giant has been a leader in the S&P 500 this session.

Materials (+0.6%) have also held up amid today's selling pressure. Members Monsanto (MON 117.53, +1.85) and Alcoa (AA 37.83, +0.69) are providing leadership to materials.DJ30 -60.49 NASDAQ -22.85 SP500 -5.34 NASDAQ Dec/Adv/Vol 2025/916/1.80 bln NYSE Dec/Adv/Vol 1957/1149/1.24 bln

3:05 pm : The major indices have taken out fresh lows as Energy has relinquished its leadership position. The sector is down 0.5% after being up 1.9% earlier.

Sentiment has turned negative as utilities (+0.4%) and materials (+0.1%) are the only sectors to trade noticeably higher this session. Consumer staples are flat.

Sellers now outpace buyers by 2-to-1 on the NYSE.

Pessimism is broad based. The Dow Jones World Index, excluding the U.S., is trading 1.8% lower.DJ30 -93.78 NASDAQ -27.39 SP500 -9.19 NASDAQ Dec/Adv/Vol 2103/826/1.65 bln NYSE Dec/Adv/Vol 2107/1005/1.14 bln

2:30 pm : Stocks continue to push lower into negative territory, no longer supported by the energy sector (flat). Energy had been a leader in today's trading, but has surrendered its gains and is trading near the unchanged mark. The energy sector was up 1.9% at its peak.

Energy has come off its peak as crude prices have pulled back from earlier levels. The commodity is trading near the unchanged mark, $101.90 per barrel.DJ30 -58.62 NASDAQ -19.74 SP500 -5.07 NASDAQ Dec/Adv/Vol 2028/869/1.47 bln NYSE Dec/Adv/Vol 1965/1125/1.01 bln

2:00 pm : The broader market has stuck its head into the red. The session remains choppy.

Ford (F 6.24, -0.29) announced North American February sales decreased 7% year-over-year, which is less subdued than the 14% downturn that was widely anticipated. General Motors (GM 23.04, -0.24) announced North American February sales declined 13%. Analysts were expecting a 14% decline.

Total seasonally adjusted annual domestic vehicle sales totaled 11.9 million units, up from 11.7 million units. That marks the lowest level since 2005.DJ30 -0.33 NASDAQ -0.51 SP500 -0.14 NASDAQ Dec/Adv/Vol 1812/1055/1.31 bln NYSE Dec/Adv/Vol 1670/1417/900 mln

[citizen snips]

120. Apple Down As Analysts Cut Price Targets

NEW YORK (AP) -- Shares of Apple Inc. dropped Monday after a pair of analysts reduced their share price targets for the iPod and computer maker, with one citing cuts in iPod production.

Apple shares fell $3.29, or 2.6 percent, to close at $121.73 Monday. The stock is off about 40 percent from its 52-week high of $202.96 set in late December.

Banc of America Securities analyst Scott D. Craig on Monday lowered his share price target to $160 from $180. In a note to investors, he cited data from Asia indicating that although production levels are solid for the company's computers, they are being cut for iPods. He added that iPhone production is "volatile."

Craig wrote recent checks lead him to expect iPod production for the second quarter will be down 10 percent to 15 percent year over year. He lowered his second-quarter iPod sales estimate to about 10 million units from 11.1 million units. The new estimate represents a 5 percent drop from the year-ago period.

more...
http://biz.yahoo.com/ap/080303/apple_mover.html?.v=2

[citizen snips]

121. Intel Lowers Gross Profit Margin Outlook

SAN JOSE, Calif. (AP) -- Intel Corp. lowered its profit forecast for its fiscal first quarter Monday, blaming the shortfall on a steeper-than-expected drop in prices for memory chips.

The Santa Clara-based company, the world's largest semiconductor maker, said slumping prices for a type of memory called NAND flash depressed profits more than anticipated. NAND flash is commonly used in portable electronic devices like digital cameras and MP3 players.

Intel said its gross profit margin -- a key measure of profitability that gauges a company's ability to control manufacturing costs -- would come in at 54 percent of revenues, plus or minus a percentage point. That's down from its previous forecast of 56 percent, plus or minus a couple percentage points.

The company said its other guidance had not changed, including its expectation of revenue between $9.4 billion and $10 billion for the quarter. Analysts surveyed by Thomson Financial on average expect Intel to ring up sales of $9.7 billion.

more...
http://biz.yahoo.com/ap/080303/intel_profit_warning.html?.v=4

[citizen snips]

122. Treasurys Pause From Recent Rally

NEW YORK (AP) -- Long-term Treasurys fell Monday as investors pulled back from a recent robust rally to take profits and plot their next moves.

Investors looked past data showing national manufacturing near a five-year low and booked profits instead after a four-day winning streak for the 10-year note last week.

"The market has moved a long way," said Tom di Galoma, head of Treasurys trading at Jefferies & Co. "We are just slowing down a bit."

With the 10-year yield now at a paltry 3.57 percent, the note is less attractive, but Jefferies is likely to buy the 10-year yield when the yield returns to the 3.65 percent 3.70 percent range, in di Galoma's view. Yields and prices move in inverse directions.

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123. Mylan Shares Hit New Low on Outlook

NEW YORK (AP) -- Shares of generic drug developer Mylan Inc. fell to their lowest point in nearly six years on lingering concerns over the company's plan to sell its Dey LP unit.

The stock fell 39 cents to close at $11.45 Monday after reaching a five-year low of $11.23 earlier in the day. Mylan shares felt a similar plunge Thursday after the company said it would sell Dey, likely slowing the launch of its respiratory drug Perforomist and cutting into profit over the next three years. Also, the company delayed providing 2008 guidance until it reports results for the first quarter.

Though Mylan topped Wall Street expectations for the fourth quarter, Oppenheimer & Co. analyst Elliot Wilbur said the company generated surprisingly little cash. He reaffirmed a "Perform" rating.

"While one quarter does not a trend make and the fourth quarter will likely prove to be a trough, lack of robust cash flow metrics won't help growing angst over near-term fundamentals," he said, in a note to investors.

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124. Euro Nations "Concerned" at Euro's High

BRUSSELS, Belgium (AP) -- Finance ministers from euro nations said Monday they were "concerned" about the strength of their currency as it hit an all-time high against the U.S. dollar.

The euro purchased as much as $1.5266 in afternoon European trading, topping the previous record of $1.5238 it hit on Friday on speculation of a U.S. interest rate hike this month. The rising euro makes German cars and French champagne and other European Union exports increasingly expensive for the union's major trading partner, the United States.

"In the present circumstances we face, we are concerned about excessive exchange rate moves," Luxembourg Prime Minister Jean-Claude Juncker said after leading monthly talks among the currency zone's 15 nations. "We have never previously said that we were concerned."

French Finance Minister Christine Lagarde said Monday's rapid surge past the "psychological threshold" of $1.50 had "a symbolic character."

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