STOCK MARKET WATCH, Thursday June 19

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday June 19, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 216
DAYS SINCE DEMOCRACY DIED (12/12/00) 2706 DAYS
WHERE'S OSAMA BIN-LADEN? 2431 DAYS
DAYS SINCE ENRON COLLAPSE = 2722
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 June 18, 2008

Dow... 12,029.06 -131.24 (-1.08%)
Nasdaq... 2,429.71 -28.02 (-1.14%)
S&P 500... 1,337.81 -13.12 (-0.97%)
Gold future... 893.50 +6.60 (+0.74%)
30-Year Bond 4.73% -0.06 (-1.25%)
10-Yr Bond... 4.15% -0.07 (-1.68%)






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 Choking Point?

BY CHRIS PUPLAVA

Resilient is the word to describe the U.S. economy over the past few years in its ability to shrug off rising oil prices, prices that few ever imagined would be reached this decade. Crude oil reached $60 a barrel and yet the economy rolled on, $80 a barrel and still no crushing blow was dealt. Now we have surpassed $100 a barrel and even $120 a barrel and the question is how much inflationary pressure can the U.S. economy absorb; where is the choking point?

The answer to that question is possibly the here and now. As the price of crude oil has risen dramatically over the last year, so too has the total oil bill the U.S. pays to foreign countries by way of petroleum imports. The current oil bill is truly entering the stratosphere, with a massive transfer of wealth from U.S. citizens to the Middle East and other nations. The U.S. is currently trading its wealth for oil to the tune of a seasonally adjusted annualized rate of $450 billion, an unprecedented transfer of wealth to be sure.

.....

Another measure of the energy impact on the economy is seen by viewing the percent of energy spending relative to disposable personal income (DPI). Back in 1980 consumers were spending 5.3% of their DPI on energy, with current spending representing 4.0% of DPI, below the 1980 record, though still at a 15-year high and rising.

-see chart-

As Abraham Lincoln said, “You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time.” At some point investor confidence in the stock market will take its cue from the consumer, a consumer whose confidence levels are at record lows as they digest the full impact of a steep housing depression and record energy prices. Consumers appear to comprehend the true state of the economy while investors appear to be fooled by the financial press, a development that can not go on forever, particularly so with elevated oil prices.

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

[ozymandius]

2. Oil prices slip despite attack in Nigeria

VIENNA, Austria - Oil prices were steady Thursday with investors following reports that a militant group attacked an oil installation in Nigeria, Africa's largest oil producer.

Light, sweet crude for July delivery fell 33 cents to $136.35 a barrel on the New York Mercantile Exchange by noon electronic trading in Europe The contract on Wednesday rose $2.67 to settle at $136.68 a barrel.

.....

Crude futures had climbed more than $2 a barrel on Wednesday on reports that Nigerian oil workers were about to strike after talks between U.S. energy giant Chevron Corp. and the country's white-collar oil industry workers had broken down — although a later news report said the walkout had been averted.

Traders were also digesting a mixed weekly inventory report from the U.S. Energy Department's Energy Information Administration.

.....

In other Nymex trading, gasoline futures and heating oil were little changed at $3.4707 and $3.8653 a gallon. Natural gas futures rose more than 8 pennies to $13.294 per 1,000 cubic feet.

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

[ozymandius]

4. Oil group: Offshore drilling no quick fix

WASHINGTON — Opening America's coastal waters to oil drilling, as Sen. John McCain urged in an address Tuesday, is unlikely to provide Americans with more oil for at least seven to 10 years.

That's the estimate from the American Petroleum Institute, the oil-industry trade group. Major environmental groups think the increased supply would be at least that distant before arrival, and say it mostly would benefit Big Oil.

.....

Deron Lovaas, senior energy analyst at the Natural Resources Defense Council, noted that even if billions of barrels of oil are available offshore, the United States still will control only a fraction of the world's supply, so energy independence isn't within reach.

.....

The Interior Department offered a wide range of estimates of how much oil might be within reach of U.S. offshore drilling in a 2006 report. It estimated that the Outer Continental Shelf could hold 115.4 billion barrels. However, it also estimated that recoverable reserves off U.S. coasts in areas now banned from production probably hold only about 19 billion barrels.

http://seattletimes.nwsource.com/html/nationworld/2008003394_drill18.html

[ozymandius]

6. Credit card fees: Some gas stations say 'no more'

CHARLESTON, W.Va. - When gas station manager Roger Randolph realized it was costing him money each time someone filled up with $4-a-gallon gas, he hung a sign on his pumps: "No more credit cards."

He may be the first in West Virginia to ban plastic, but gas station operators nationwide are reporting similar woes as higher prices translate into higher credit card fees the managers must pay, squeezing profits at the pump.

"The more they buy, the more we lose," said Randolph, who manages Mr. Ed's Chevron in St. Albans. "Gas prices go up, and our profits go down."

.....

His complaints target the so-called interchange fee — a percentage of the sale price paid to credit card companies on every transaction. The percentage is fixed — usually at just under 2 percent — but the dollar amount of the fee rises with the price of the goods or services.

As gas tops $4 a gallon, that pushes fees toward 10 cents a gallon. Now stations, which typically mark up gasoline by 11 to 12 cents a gallon, are seeing profits shrink or even reverse.

.....

The National Retail Federation says gas prices point to the unfairness of the system: Gas stations are paying more in interchange fees because the price of gas has gone up, while the cost of processing credit or debit cards remains the same.

http://news.yahoo.com/s/ap/20080618/ap_on_bi_ge/gas_prices_credit_cards

[ozymandius]

8. Premium gas sales tank as fuel prices rise

MIAMI BEACH, Fla. - Ernesto Evangelista prefers to pump premium gas into his seven-month-old Nissan Titan, thinking it makes the truck run better. But at a BP station just a few blocks from the sand of Miami Beach, the 33-year-old painter grabbed the handle for the regular, 87-octane gas to fill his tank on a recent Friday.

"Premium is just too expensive," he said. "Nobody can afford to fill up with premium anymore."

With rising fuel prices pushing the national average for premium to $4.48 a gallon — about 40 cents higher than regular — motorists like Evangelista are buying less of it, industry statistics show.

Demand for high-octane fuel is at its lowest in nearly a quarter of a century and is now primarily consumed by a core group of luxury vehicle owners — and even some of them are putting lower-grade fuel into their tanks to save money.

In 1997, high-octane garnered 16 percent of the nationwide fuel market share, according to figures from the U.S. Energy Information Administration. Last month, premium had only 8 percent of the market. Last year, premium gasoline consumption fell to about 35.6 million gallons of gas per day, the lowest in 24 years, the agency said.

http://news.yahoo.com/s/ap/20080619/ap_on_bi_ge/premium_gas

---

I did some research on synthetic motor oil a few days ago. Along the way I ran across cartalk.com and auto mechanic forums where the benefits of high octane fuel were discussed. Without exception - guidance says that if your car manufacturer does not explicitly call for 93 octane fuel then you have no business putting it in your car. To do so is a horrible waste of money AND it does not make your car run better.

[UpInArms]

17. Goldman raises 2008 oil price forecast to $117.40

http://www.reuters.com/article/businessNews/idUSL192935720080619?feedType=RSS&feedName=businessNews

LONDON (Reuters) - Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) on Thursday raised its 2008 average Brent crude oil price forecast to $117.40 a barrel from a $108 due to tight supplies.

"We have increased our price forecasts to reflect a continued tightening of global crude oil supply/demand fundamentals and the resulting higher oil prices," the U.S. investment bank said.

Goldman expected Brent crude would rise to an average $140 in 2009 and peak at $150 in 2010.

...more...

[UpInArms]

23. July crude down 60 cents to $136.08 a barrel on Globex

04. July crude down 60 cents to $136.08 a barrel on Globex
8:17 AM ET, Jun 19, 2008

[ozymandius]

3. Today's Reports

08:30 Initial Claims 06/14
Briefing 370K
Consensus 375K
Prior 384K

10:00 Leading Indicators May
Briefing 0.0%
Consensus 0.0%
Prior 0.1%

10:00 Philadelphia Fed Jun
Briefing -10.0
Consensus -10.0
Prior -15.6

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

[UpInArms]

24. Initial Claims @ 381,000 - last wk rev'd up 2,000

01. U.S. 4-wk. avg. continuing jobless claims fall to 3.10 mln
8:30 AM ET, Jun 19, 2008

02. U.S. continuing jobless claims fall 76,000 to 3.06 million
8:30 AM ET, Jun 19, 2008

03. U.S. 4-wk. avg. initial jobless claims rise 3,250 to 375,250
8:30 AM ET, Jun 19, 2008

04. U.S. weekly initial jobless claims fall 5,000 to 381,000
8:30 AM ET, Jun 19, 2008

[Roland99]

46. Weren't the monthly claims in the 330k range just a couple months ago?

[UpInArms]

32. U.S. June Philly Fed index -17.1 vs. -12.0 expected

01. U.S. June Philly Fed index -17.1 vs. -12.0 expected
10:01 AM ET, Jun 19, 2008

[UpInArms]

36. more info

01. U.S. June Philly Fed prices-paid index highest since 1980
10:07 AM ET, Jun 19, 2008

03. U.S. June Philly Fed new orders index falls to -12.4
10:03 AM ET, Jun 19, 2008

[UpInArms]

33. U.S. May leading indicators up 0.1%

02. Economy not in contraction: Conference Board
10:00 AM ET, Jun 19, 2008

03. U.S. May leading indicators up 0.1%, 2nd straight gain
10:00 AM ET, Jun 19, 2008

[PfcHammer]

5. Morgan Stanley Hit by Suspected Rogue Trader

Hola all ! :hi:

Morgan Stanley Hit by Suspected Rogue Trader: FT
By CNBC.com | 19 Jun 2008 | 04:20 AM ET

Morgan Stanley will take a $120 million revenue hit after a suspected rogue trader incorrectly valued his positions in the credit derivatives market, the Financial Times reported on Thursday.

Morgan Stanley said it had discovered the error in May and alerted the UK stock market regulator, the Financial Services Authority, while the trader was suspended pending an internal investigation.

The trader is suspected of increasing the value of his derivatives book to show his performance in a better light, a person familiar with the investigation told the FT. He had been involved in short-term trading of credit index options on the CDX index, a trader at a rival company told the paper.

The company made a $120 million "negative adjustment" to its revenues following the trader's actions, Colm Kelleher, Morgan Stanley's chief financial officer, told the paper.

http://www.cnbc.com/id/25255893

---

Oopsies ! :blush:

[ozymandius]

7. Good morning PfcHammer and everyone.

:donut: :donut: :donut:

Forensic accounting is laborious and time consuming. So I expect the news of this will come at a trickle.

[ozymandius]

9. GM puts brakes on SUV, truck redesigns: report

NEW YORK (Reuters) - General Motors Corp (GM.N) is postponing redesigning its SUVs and full-sized trucks as it shifts its product portfolio toward more fuel-efficient vehicles, the Wall Street Journal reported in its online edition on Thursday.

GM spokesman Tom Wilkinson told the newspaper the car maker was "looking at the whole product portfolio," and deciding how to supply the U.S. market with more fuel-efficient cars.

GM will extend the life cycle of its current line-up of pickup trucks and SUVs, including the Cadillac Escalade SUV and the Chevrolet Silverado pickup.

http://news.yahoo.com/s/nm/20080619/bs_nm/autos_gm_dc

[ozymandius]

10. When Builders Go Broke

When Patrick and Betty Ann Wagner moved 50 miles from Chicago's Northwest Side to suburban Antioch, Ill., a year ago, they figured their five kids would delight in the three swimming pools and sand volleyball court of their new subdivision's community center. Sitting at a large pine table in the kitchen of their four-bedroom home, Patrick opens a glossy map. "This is where they said the clubhouse would be," he jabs at the paper. But the rec center is just an open pit, and their neighborhood is eerily quiet. Across the street, two homes are still swathed in housewrap behind mounds of dirt; two others are finished but empty, with "For Sale" signs in front.

Welcome to Clublands, a 600-acre development conceived by Neumann Homes, which in 2004 had plans to build as many as 950 homes selling for $300,000 and $400,000 in this suburb less than a mile from the Wisconsin border. But it never happened, and probably never will. Today the Warrenville (Ill.), company, once ranked the 35th-largest homebuilder in the nation, is bankrupt. A court-approved auction is liquidating all its property. Among the assets on the block are two-thirds of the Clublands sites that were never sold -- and the tract for that promised clubhouse.

.....

During the housing boom of the 2000s, lenders were only too happy to encourage him. Neumann Homes went from erecting 300 homes a year to 1,900 at the peak of the market. Yet Neumann pursued his dream so relentlessly that he was blind to the risk of borrowing more than he could handle if the residential market turned south. He bought up too much farmland at bubble prices, and in 2005 took over a Detroit builder, Tadian Brothers, just as that market began cratering. Inadvertently, Neumann laid the groundwork for his eventual fall by cross-collaterizing his projects with multiple lenders, so that his bad bet in Detroit could bring down the whole enterprise.

.....

By 2006 rumors were circulating that Neumann Homes was for sale or on the verge of bankruptcy, fueled in part by its auction of 1,000 acres in Chicago's farthest suburbs. At Minuteman Press in Naperville, Ill., owner Ray Kinney watched his receivables from Neumann stretch from 60 to 90 and then 120 days. He had been running his shop 24 hours a day for the builder, printing brochures and business cards. But Kinney finally had to say no. "We didn't get paid," he would tell Neumann employees coming in to place orders. "We can't pay you," they'd reply.

.....

Some homes and land have been turned over to lenders, who will hire builders and real estate agents to complete and market the properties. In exchange, the lenders agreed to reduce their claims by $20 million. Hilco Real Estate is auctioning off Neumann's remaining 20 projects in Illinois, Michigan, and Colorado, covering 2,000 home sites and 2,800 acres of open land. If there are takers, banks will get some cash backalbeit much less than they lent, reflecting the steep decline in land values. It's also possible the bids will be so low that lenders will reject them and take back the land.

http://news.yahoo.com/s/bw/20080618/bs_bw/jun2008bw20080617159524

---

This story merits posting for its cross section view of corporate housing disaster. My apologies for the awkwardness of the writing.

[ozymandius]

11. FedEx forecast bodes ill for U.S. profit outlook

NEW YORK (Reuters) - Federal Express may be the proverbial canary in the coal mine.

The dismal outlook from the package delivery company on Wednesday may herald an explosion of profit warnings from companies struggling with soaring commodity input costs and a sluggish economy.

The upshot is that an already-weakening profit outlook for Corporate America could get much worse, dragging share prices down further. FedEx's warning on its profit outlook sent Wall Street stock indexes tumbling, with the blue-chip Dow Jones industrial average (.DJI) dropping 1.1 percent to close at its lowest level in three months.

"It would now seem that the hope that things will be better in the economy by the third quarter is pie-in-the-sky," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

.....

FedEx (FDX.N) now forecasts weak earnings into next year, specifically blaming rising fuel costs, after it reported a loss of $241 million for the three months ended May 31.

http://news.yahoo.com/s/nm/20080618/bs_nm/earnings_outlook_dc

[ozymandius]

12. US stocks head for mixed open ahead of data

NEW YORK - U.S. stocks headed for a mixed open Thursday as investors awaited readings on last week's jobless claims and manufacturing in the Philadelphia area.

The Labor Department's report on initial claims for unemployment, scheduled to be released at 8:30 a.m. Eastern time, is expected to show a decline for last week compared to the previous week. The Philadelphia Federal Reserve's report on manufacturing, scheduled for 10 a.m. EDT, is anticipated to show that activity is contracting this month, but at a slower pace than in May.

Also at 10 a.m. EDT, Wall Street will also be examining the Conference Board's May index of leading indicators, which should provide some additional information on the direction of the economy. Economists are forecasting a flat reading.

.....

Dow futures on Thursday rose 7, or 0.06 percent, to 12,035. Standard & Poor's 500 index futures rose 0.30, or 0.02 percent, to 1,339.10. Nasdaq 100 index futures fell 0.75, or 0.04 percent, to 1,960.75.

http://news.yahoo.com/s/ap/20080619/ap_on_bi_st_ma_re/wall_street

[ozymandius]

13. Stagflation Nation

The downturn in the housing market and rising prices for most everything else are showing no sign of a turnaround, according to Tuesday's U.S. economic data, as wholesale inflation climbed in May while new-home construction dwindled.

The conflicting reports added to the evidence that the American economy has entered a period of stagflation, with recessionary and pricing pressures combining to squeeze consumers. The current situation seems to be handcuffing the Federal Reserve, which can neither raise rates to combat inflation without hurting growth prospects, nor lower them to aid the economy without hurting the dollar and putting upward pressure on prices.

http://www.forbes.com/home/2008/06/17/ppi-housing-starts-markets-economy-cx_mp_0617markets13.html

[ozymandius]

14. Damage may already be done on rates

Did the Fed go too far?

NEW YORK (CNNMoney.com) -- Wall Street thinks the Federal Reserve is almost certainly done cutting interest rates for the time being.

But as inflation fears rattle Wall Street, some economists are beginning to wonder if the Fed went too far by cutting rates as much as it did in such a short period of time.

The central bank is widely expected to leave its key federal funds rate at 2% after a two-day policy meeting next Tuesday and Wednesday. That would be the first time the Fed left rates steady following seven rate cuts since last September.

.....

But few are expecting the Fed to cut rates again soon. In fact, some think that low interest rates are at least partly responsible for some of the serious drags on the U.S. economy today, such as soaring prices of food and gas and the weak dollar.

.....

Lakshman Achuthan, managing director of the Economic Cycle Research Institute, said these big cuts opened the door to the inflationary pressures we've seen in the past few months. He also thinks that the Fed wouldn't have needed to go as far as it did if it had not "dragged its feet" on rate cuts last year.

http://money.cnn.com/2008/06/19/news/economy/fed_rates/index.htm?postversion=2008061905

[UpInArms]

15. dollar watch

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

Last trade 73.507 Change +0.072 (+0.10%)

Pound Fails To Sustain Momentum From Jump In Retail Sales. SNB Leaves Rates Unchanged

http://www.dailyfx.com/story/bio2/Pound_Fails_To_Sustain_Momentum1213869860177.html

The pound jumped over 50 bps as U.K. retail sales unexpectedly increased 3.5% against expectations of a 0.1% decline, which was the most since records began in 1986. However, the Sterling would run into resistance at the 1.9700 handle and begin to give back the gains. Economists had expected Britons to slow their spending for a third month which would have been the first time since 1991. However, the warmest May on record led to increases in sales of seasonal foods and clothing of 3.9% and 9.2% respectively. Meanwhile, a separate report showed Public sector net borrowing jumping to 11 billion from 1.8 billion in April, signaling that credit markets may be loosening.

The results starkly contrast BoE Governor King’s warning that things will get worse in his speech last night at the Mansion House. At the same speech Chancellor Darling announced a major shake up of the BoE and the institution of a Financial Stability Committee to sit along side the MPC, leading to the dramatic quitting of member John Grieve. The move came on the heels of Central Bank Governor King’s letter of explanation of why inflation had breached the 3% threshold, where he stated that the future course of interest rates were uncertain.

The EUR/USD was weighed lower by the aversion of a strike by Chevron workers in Nigeria. Also, the better then expected U.K. retail sales numbers fostered hope that the global economy was managing better than expected which added further dollar support, sending the pair below 1.5500

The Swiss National Bank left their benchmark interest rate unchanged at 2.75% as expected. Shortly before the release expectations had grown that the MPC would actually hike rates as inflation concerns mounted. Indeed, the statements following the release showed that the central bank increased their inflation expectations for the year from 2.0% to 2.7% as rising energy and food costs continue to filter throughout the economy. They see inflation risks remaining as long as energy prices remain high. However, the committee would suggest that inflation was transitory and that it would ease to 1.7% in 2009 and 1.3% in 2010. The USDCHF would appreciate over 100 points on the dovish tone, reversing the losses from the rate cut expectations.

...more...

Federal Reserve: A Rate Hike in the Third Quarter

http://www.dailyfx.com/story/bio1/Federal_Reserve__A_Rate_Hike_1213825637669.html

With no economic data released today, the US dollar weakened modestly as traders toy with the idea of whether the Federal Reserve will raise interest rates in the third quarter. Fed fund futures are currently pricing in a 92 percent chance of a quarter point rate hike in September. One of the primary arguments against a third quarter rate hike is the election year. The fear is that a rate hike could create unwanted political reverberations which could be legitimate if it wasn't for the fact that the Federal Reserve is suppose to be independent. By law, the Fed's monetary policy decisions do not need to be ratified by the President or Congress. Therefore logistically, the Fed should not be sensitive to the political environment, let alone succumb to political pressure. With President George W. Bush having already served 2 terms as President, not up for reelection, this reduces his inclination to meddle with the decisions made by the Federal Reserve. On top of that, historical data indicates that rates have been increased during election years. Over the past 4 decades, there have been 10 elections not including the upcoming one. In 7 out of the past 10 elections, rates were increased at one point or another during the election year. For example in 2004, when George W Bush was up for reelection, interest rates were 1% in January 2004 and at 2.25% by December. In 1988 during Reagan's first election, interest rates were tightened from 14% to 20%. Based upon the past 40 years worth of data, the Federal Reserve is actually more likely to raise interest rates during an election year than to leave them unchanged. Elections should not factor into the Federal Reserve’s monetary policy decisions and if it does, there may be an even bigger problem at hand, which is the independence of the central bank. The Fed’s job is focus on economics and not politics. Meanwhile the Philadelphia Fed index and leading indicators are due for release tomorrow. The drop in the Empire State manufacturing survey skews the risk of the Philly Fed index to the downside.

...more...

[ozymandius]

16. Bye until this afternoon.

It's time for work. I'll check in when time allows after lunch.

ozy :hi:

[UpInArms]

19. have a great day, Ozy!

:hi:

[UpInArms]

18. Sales at Cartier NY stores doing well: executive

http://www.reuters.com/article/businessNews/idUSL1971181920080619?feedType=RSS&feedName=businessNews

LONDON (Reuters) - Sales at the Manhattan stores of jewellery brand Cartier, a subsidiary of Swiss luxury goods maker Richemont (CFR.VX: Quote, Profile, Research, Stock Buzz), are holding up despite the economic downturn, a senior company official said.

"Sales are doing well -- Cartier is a high-end business and, therefore, better protected," Frederic de Narp, president and CEO, Cartier North America, told Reuters in an email this week.

He gave no figures.

"In times like this it's even more important for people to buy something meaningful with value and lasting power that will reassure," De Narp said.

Cartier has seen increased traffic from foreign visitors, especially in its Fifth Avenue boutique in New York.

...more...

[radfringe]

20. Wall Street fights to PROTECT oil speculation

Wall Street fights to protect oil speculation
Lobbyists busy as Congress feels pressure to regulate trading of contracts
By Jeffrey H. Birnbaum
http://www.msnbc.msn.com/id/25253877/
updated 11:34 p.m. ET, Wed., June. 18, 2008

Wall Street banks and other large financial institutions have begun putting intense pressure on Congress to hold off on legislation that would curtail their highly profitable trading in oil contracts -- an activity increasingly blamed by lawmakers for driving up prices to record levels.

Representatives of Goldman Sachs and Morgan Stanley, along with the trade associations for hedge funds and other financial groups, have lobbied the offices of key legislators, briefed senior staffers on committees that oversee pivotal parts of the energy markets and distributed research materials explaining their view about oil and how it's traded.

In a pair of lengthy and sometimes testy closed-door sessions in the Senate last week, executives from Goldman Sachs and Morgan Stanley, two of Wall Street's largest investment banks, made the case that their multibillion-dollar investments in energy contracts have not led to higher oil prices. Rather, they told Democratic staff members of the Energy and Natural Resources Committee that the trades allow international markets to operate efficiently and that the run-up in oil prices results not from speculation but from actual imbalances of supply and demand.

----------------

FYI: check out THEYRULE.net - find out who's washing who's hands, which backs are being scratched... it's an incest-fest

[radfringe]

26. ran a quick search at www.theyrule.net

started with GOLDMAN SACS:

- clicked on Ruth Simmons, she also sits on the board of Pfizer

- next clicked on Pfizer boardmember William R. Howell

and guess who's boards he also sits on? Williams Company, inc., American Electric, Exxon-Mobil and Halliburton

--------------

Next try Morgan Stanley:

C. Robert leads to Kidder-Electronic Data Systems to Ray L Hunt to Halliburton to William R. Howell to Pfizer to Goldman Sacs

or

Morgan Stanly to John W. Maddigan to ATT Wireless Services to Donald V. Fites to Exxon-Mobil....

----------

get the picture? Does it strike anyone else as a bit creepy with the connections to Data Systems and ATT?

[Tansy_Gold]

28. The 2008 version of Six Degrees of Speculation? n/t

.

[Roland99]

48. Zing!

[UpInArms]

21. Swiss central bank demands UBS, CS beef up capital

http://news.yahoo.com/s/nm/20080619/bs_nm/switzerland_banks_dc

ZURICH (Reuters) - Switzerland's central bank is demanding UBS (UBSN.VX) and Credit Suisse (CSGN.VX) build a bigger financial cushion to save a repeat of the subprime mortgage disaster that spoilt the country's reputation as an unshakeable powerhouse.

If the influential central bank gets its way, UBS and Credit Suisse will have to hoard more capital than their anglo-saxon rivals and that would be a millstone around the necks of their investment banks.

The Swiss National Bank laid down its blueprint for a stronger banking system in its annual financial stability report on Thursday.

It highlighted the need for a "higher capital buffer at big banks" given their dominance in Switzerland. "Their size and importance for the Swiss economy justifies especially prudent decision making when determining the level of their capital base," the report said.

The Alpine state is still reeling from the shock of seeing UBS write $37 billion off dud investments -- twice that of Royal Bank of Scotland (RBS.L).

...more...

[UpInArms]

22. Circuit City loss widens, to suspend dividend payments

http://www.marketwatch.com/news/story/circuit-city-loss-widens-suspend/story.aspx?guid=%7B3C363825%2D47ED%2D4A57%2DB818%2DB9447A301842%7D&dist=morenews

NEW YORK (MarketWatch) - Circuit City Stores Inc. (CC: 4.05, -0.25, -5.8%) said Thursday that its quarterly loss widened to $164.8 million, or $1 a share, from $54.6 million, or 33 cents, a year earlier. Sales dropped to $2.3 billion from $2.49 billion a year earlier. The company, which is exploring its strategic alternatives following a buyout offer from Blockbuster Inc. (BBI: 2.78, 0.00, 0.0%) , said it's suspended future dividend payments. The Richmond, Va. retailer was expected to post a loss of $1.06 a share on sales of $2.37 billion, according to Thomson Reuters.

(the red edit mark of shame :blush: )

[UpInArms]

25. Paulson admits the banks own our government

06. Paulson: Some institutions are too big to fail
8:35 AM ET, Jun 19, 2008

07. Paulson: Congress must give Fed clear authority over crises
8:34 AM ET, Jun 19, 2008

08. Paulson: 'Must move much more quickly' to reform oversight
8:33 AM ET, Jun 19, 2008

10. Paulson turns up heat to improve govt oversight of markets
8:32 AM ET, Jun 19, 2008

[UpInArms]

27. more info

http://www.marketwatch.com/news/story/quick-steps-needed-improve-oversight/story.aspx?guid=%7B6230C3A4%2D87E0%2D4805%2DA6E1%2D69EDCF4BEA16%7D&dist=hplatest

WASHINGTON (MarketWatch) -- Treasury Secretary Henry Paulson on Thursday tried to turn up the heat on Congress to improve the federal government's oversight of financial markets. "We must...move much more quickly to update our regulatory structure," Paulson will say in a luncheon speech to a business group here. The Treasury released excerpts of his remarks early. Paulson said the fed needs clear statutory authority and mandate to anticipate crises across the entire financial system. Paulson said the government also faced the challenge of limiting the perception that some institutions are either too big or too interconnected to fail - while at the same time acknowledging that some institutions are too big to fail.

[Dr.Phool]

29. I thought that was the SEC's job.

Oversight might work if you actually did oversight, and put competent people in place to do it.

Is it just me, or does this look like a way to make it easier for Wall Street, and the investment banks to loot the treasury?

[radfringe]

30. better headline

Burgler pleads Innocent. Blames Homeowner for making it too easy to break-into home

[Dr.Phool]

31. You got it!

:hi:

[UpInArms]

34. Trying to hide price hikes with trends, fabrics

http://www.reuters.com/article/ousiv/idUSN1945659320080619?sp=true

NEW YORK (Reuters) - How do manufacturers or retailers mask a price increase these days? They bury it amid talk of high-tech fabrics, better quality clothes or the latest hot brand or product.

Executives attending the Reuters Consumer and Retail Summit in New York this week said the surging costs of doing business have become too high to swallow, and they have already begun passing along price increases to their shoppers.

But to make those higher prices less evident, executives are marking up prices more than usual on newly introduced merchandise, hoping a product's trendiness or new fabric will be a hit and more easily command that higher price.

"It's not the same pair of pants that you bought last year that you get the 12 percent (price) increase," said Francisco Gonzalez-Meza Hoffmann, vice president of strategic initiatives at Perry Ellis International Inc (PERY.O: Quote, Profile, Research, Stock Buzz).

...more...

[abelenkpe]

59. Too funny!

Retailers talking about higher quality fabric? Please. Clothes have become noticeably more shabby and more expensive over the past ten years. I just love all the see through shirts for women, don't you? And the trendy unfinished seams that guarantee you look like you're wearing a rag. Those fools deserve to lose money....and they will.

[UpInArms]

35. Mortgage market's other pitfall asserts itself (how many balls are still in the air?)

http://www.reuters.com/article/ousiv/idUSN1861977220080619?sp=true

NEW YORK (Reuters) - Investors who thought they were safe owning guaranteed mortgage-backed securities in the wake of steep credit losses from other MBS are now grappling with a different kind of risk.

Models that predict payments on bonds issued and protected by Fannie Mae, Freddie Mac and Ginnie Mae have been far off the mark in recent months, resulting in increased risk to investors in the $4.5 trillion "agency" MBS market.

Errors are happening for the same reason credit loss forecasters failed to prepare investors for the subprime mortgage meltdown: it has never happened before.

This has opened up unexpected losses on assets considered super-safe for a broad investor base that includes central banks, Wall Street dealers, and retirement savings plans.

<snip>

Wall Street banks that spend countless hours trying to measure that risk for clients have seen data stray from their forecasts by unusually large amounts. A 20 percent drop in May prepayments sharply exceeded expectations, leading to a collective groan among analysts.

May data "was a shock to everybody," said Arthur Frank, head of MBS research at Deutsche Bank in New York. Vagaries of falling prices and tight credit have "wreaked havoc" on models that were created during the heydey of refinancing, analysts at Merrill Lynch & Co. said in a recent research note.

...more...

[UpInArms]

37. Two former Bear Stearns fund managers arrested

http://www.reuters.com/article/ousiv/idUSN1933803520080619

NEW YORK (Reuters) - Two former hedge fund managers at investment bank Bear Stearns were arrested Thursday morning after a federal criminal probe into the collapse of funds they oversaw, according to the Federal Bureau of Investigation.

The former managers, Ralph Cioffi and Matthew Tannin, are expected to be indicted and arraigned on securities fraud charges.

Cioffi and Tannin oversaw two funds whose collapse last year helped kick off the credit crisis after the meltdown of the funds stoked widespread fears about investments linked to risky subprime mortgages.

The collapse spurred questions about oversight and risk management operations at Bear Stearns, which was sold in March to JPMorgan Chase & Co in an emergency takeover deal brokered by the U.S. Federal Reserve.

...more...

[TalkingDog]

40. The NYT version

http://www.nytimes.com/2008/06/20/business/20bear.html?_r=2&ref=business&oref=slogin&oref=slogin

[specimenfred1984]

55. But, but, but Tim Woods says there's no manipulation going on, Weeeeeeeeee

Everything is wonderful if I just hide my head in all these numbers and DOW theories! All joking aside, good link! I love reading about these fckers getting arrested.

[UpInArms]

38. 10:26 EEST and no one's happy

Dow 12,008.05 21.01 (0.17%)
Nasdaq 2,418.31 11.40 (0.47%)
S&P 500 1,334.49 3.32 (0.25%)
10-Yr Bond 4.16% 0.006

NYSE Volume 764,666,062.5
Nasdaq Volume 435,904,093.75

10:00 am : Stocks continue to trade with losses early in Thursday's action. The stock market has fallen to a morning low after a couple of economic reports.

The June Philadelphia Fed Manufacturing Index came in at -17.1, which is worse than the reading of -10.0 that economists forecast.

Leading economic indicators for May registered a reading of 0.1%, matching the prior month's reading. The consensus predicted a flat reading.

Circuit City (CC 3.91, -0.14) reported a loss for its most recent quarter. On a per share basis, the loss was less severe than analysts feared. The electronics and entertainment retailer stated it expects another loss in the coming quarter and has also chosen to suspend its dividend.DJ30 -11.81 NASDAQ -2.22 SP500 -1.88 NASDAQ Dec/Adv/Vol 1285/1097/233 mln NYSE Dec/Adv/Vol 1512/1194/142 mln

09:45 am : Stocks have fallen into the red after trading slightly higher in early action. The drop is broadbased as several of the major economic sectors are moving lower. Energy (+1.0%), however, is moving sharply higher.

Energy's advance comes in the face of lower crude oil prices. Oil is currently trading down roughly 1.2% to approximately $135 per barrel.

Treasuries are trading out of favor. The 10-year Note is down 9 ticks.DJ30 -25.41 NASDAQ -5.34 SP500 -2.44 NASDAQ Dec/Adv/Vol 1211/1048/139 mln NYSE Dec/Adv/Vol 1445/1176/86 mln

[TalkingDog]

39. Signs of a flaccid economy? (so so sorry...truly... it's a compulsion really)

http://www.newsweek.com/id/141848


They've been banished to remote stretches of desert, some have been raided, others shut down and one even sold on E-bay. Nevada's legal brothels have managed to survive through some tough situations. Their latest problem, however, could prove to be too much. According to George Flint, Director of the Nevada Brothel Owners' Association, revenue for the 25 businesses in his membership organization is down by as much as 45 percent. The reason: Sex for money may be recession resistant but it's not recession proof. "Business is in a lower slump than I've ever seen it before," Flint says.

In Nevada, the world's oldest profession has been very lucrative. In a typical year, legal brothels generate about $50 million in total revenue and have an economic impact of about $400 million on the state. But in the last 18 months the industry's cash flow has taken a dive. Why? Like other businesses around the country, bordellos throughout the state are feeling the pinch of rising gas prices and a weak economy.

Several of the hardest hit are the houses of prostitution in Nevada's rural northern areas, which get roughly 60 percent of their business from truckers. "Some of these brothels are out in the middle of nowhere so fuel prices have an effect, says Dennis Hof, owner of the infamous Moonlite Bunny Ranch. According to the U.S. Energy Information Administration, diesel on the West Coast now costs $4.87 per gallon. That means truckers could easily spend $1,000 to fill up their tanks, leaving them with little extra cash and less likely to take a detour. For bordello owners, relocating to more central locations is impossible. Under Nevada law, brothels can only operate in counties with fewer than 400,000 residents.

Yet, even brothels located in the south, closer to tourist-populated places like Las Vegas, are not fairing much better. Flint estimates that 75 to 80 percent of Southern Nevada's brothel business comes out of Sin City. But Las Vegas is somewhat down on its luck. Casino gambling revenue fell from $614.9 million in December to $517.5 million in March, according to the Nevada Gaming Control Board. Many brothels consider gambling direct competition for a tourist's discretionary dollars, and if their competition is suffering, it's not a good sign. "Even if someone does get to Vegas, they may not spend their money on a brothel as a form of entertainment because times are tough," says Bob Fisher who represents the Chicken Ranch brothel that's about 50 miles from The Strip.



Now you can see why they don't let me out in polite society much.....

[skids]

41. McEnron

...for those SMW readers who do not venture out onto the greatest page...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x149189

[AnneD]

62. I think everyone on this thread should view this......

and they say that conspiracy theorists are kooks:hide:

Edited to thank you for beating me to posting this.

[UpInArms]

42. Ex-UBS banker pleads guilty to US tax evasion scheme

http://www.reuters.com/article/bondsNews/idUSN1947881120080619?sp=true

FORT LAUDERDALE, Fla., June 19 (Reuters) - A former UBS AG (UBSN.VX: Quote, Profile, Research, Stock Buzz) banker pleaded guilty in federal court on Thursday to helping an unidentified billionaire real estate developer hide $200 million in assets from U.S. tax authorities.

Bradley Birkenfeld, a 43-year-old U.S. citizen, told a court in Fort Lauderdale that he was a UBS banker at the time, received a large salary, and was "incentivized" by his employer to carry out the activities that led to the charges.

He had previously pleaded not guilty. His change of heart and subsequent plea deal could affect an ongoing U.S. investigation of UBS's conduct in relation to services it provided to U.S. clients from 2000 through 2007.

U.S. media have reported that UBS is considering whether to reveal the names of up to 20,000 wealthy American clients as federal authorities intensify the probe into offshore bank accounts.

Federal investigators believe some clients may have used offshore accounts to hide as much as $20 billion in assets from the Internal Revenue Service, enabling them to avoid paying at least $300 million in federal income taxes, The New York Times reported this month.

...more...

So what's with all the criminally crooked bankers? :eyes:

Oh, and didn't Paulson say that BANKS were too big to fail?

:eyes:

Do you think there are any connections? :eyes:

[Roland99]

43. Ohio banks bear the brunt of regionals' woes

Ohio banks bear the brunt of regionals' woes
Write-downs haunt amid falling home values as takeover prospects look muted
http://www.marketwatch.com/news/story/ohio-banks-feel-pinch-housing/story.aspx?guid=%7B02B34BBF%2D53D0%2D4F67%2DABBB%2D191A9EADF841%7D

As the saga of the subprime mortgage mess and tanking housing market continues to play out at regional banks nationwide, perhaps no state has seen more concentrated banking pain than Ohio.

With Cincinnati-based Fifth Third Bancorp in the headlines Wednesday for a $2 billion capital raise and dividend cut, attention has turned to other Ohio stalwarts hit hard by the credit crunch, including National City Corp., KeyCorp and Huntington Bancshares.

As of the beginning of June, in the last 12 months National City had lost almost 70% of its value, Huntington fell more than 40%, Fifth Third was down 20% and KeyCorp dropped more than 20%.

...

"While we are reluctant to use Fifth Third as a proxy for the banking industry as their credit quality deterioration has been worse than peers, it is concerning that management is forecasting increasing net charge-offs and provisioning into 2009," wrote Christopher M. Mutascio, an analyst for Stifel Nicolaus, in a research note.

[DemReadingDU]

52. It sucks to be a bank in Ohio

:(

[Roland99]

44. Citigroup likely to take 'substantial' markdowns

Citigroup likely to take 'substantial' markdowns
http://www.marketwatch.com/news/story/citigroup-may-take-substantial-second-quarter/story.aspx?guid=%7BBB06AB89%2DDD18%2D4BEE%2D9421%2D4F503B859CBA%7D&dist=hplatest

Citigroup Inc. Chief Financial Officer Gary Crittenden said Thursday that the bank faces continuing credit problems in the second quarter, with credit costs rising, provisions for bad consumer loans growing and "substantial" write-downs for subprime assets likely.

"If current trends prevail, it is fair to conclude we will continue to have substantial additional marks on our subprime exposure this quarter," Crittenden said during a conference call sponsored by Deutsche Bank.

Crittenden added that it's reasonable to expect that credit costs will continue to rise through 2008, and that provisions for losses in its consumer business will also grow.

[UpInArms]

45. Investment banking's pain is hedge funds' gain

http://www.reuters.com/article/ousiv/idUSL211716020080619?sp=true

MONACO/LONDON (Reuters) - The hedge fund industry is set to attract bankers and traders from an exodus of high-flyers leaving troubled investment banks in search of bigger bonuses and better job security.

Bankers joining hedge funds is not a new phenomenon, but the trend has usually been for one or two people to leave the relative comfort of an investment bank for the risky but potentially much more rewarding option of a new hedge fund.

As investment banks, hit by huge subprime-related writedowns and a tough business environment, cut back staff and slash bonuses, however, the $2.6 trillion hedge fund industry has begun to look far more appealing -- even to very senior bankers.

Hedge funds have suffered comparatively little damage from the credit crisis, and the sector now boasts an increasing number of large-scale players managing tens of billion of dollars.

Now, more investment bankers are looking to follow the example of Osman Semerci, former global head of fixed income at Merrill Lynch who recently went to run to run UK hedge fund and private equity firm Duet Group.

"Bankers right up to the most senior level are now answering our calls, if not actively soliciting us," said Chris Gaunt, a principal at headhunter Heidrick & Struggles. "I've been hearing from people out of the blue who I last spoke to three years ago."

More and more bankers are looking to move from the glass towers of Canary Wharf and the City to St James's, the exclusive enclave of London's West End where many hedge funds are based, partly out of fear for their own jobs, but also on the realization that the next few years are likely to be very tough for the banks.

...more...

[PfcHammer]

57. Risk management at US investment banks poor

WASHINGTON, June 19 (Reuters) - Inadequate risk management at top U.S. investment banks resulted in executives missing the impact of valuation declines and liquidity shortages, a senior official with the Office of Thrift Supervision said on Thursday.

"The risk management frameworks in place at these firms and others across the financial sector were clearly inadequate for the key problems of identifying major imbalances," Scott Polakoff, OTS deputy director, said in prepared testimony for a Senate hearing.


http://www.reuters.com/article/marketsNews/idINWAT00970620080619?rpc=44

---

no shit !:mad:

[UpInArms]

47. 12:24 EST It's All Good! Whee!

Dow 12,064.47 35.41 (0.29%)
Nasdaq 2,449.53 19.82 (0.82%)
S&P 500 1,339.11 1.30 (0.10%)
10-Yr Bond 4.195% 0.041

NYSE Volume 2,044,878,500
Nasdaq Volume 1,094,965,875

12:00 pm : Thursday’s trading has been rather choppy as disconcerting comments from the financial sector and mixed economic data have taken the focus away from lower oil prices.

Specifically, financial giant Citigoup (C 19.64, -0.76) stated it will continue to have substantial marks on subprime exposure this quarter and a monoline adjustment could be on par with that of last quarter. The words took the financial sector (-1.5%) to its session low. In a patch of strength, Dow component American International Group (AIG 32.39, +0.87) held up in the face of selling. The stock was upgraded to Buy from Hold by analysts at Citigroup.

In other corporate news, Kirk Kerkorian's Tracinda Corp disclosed in a regulatory filing it has increased its stake in Ford Motor Company (F 6.14, -0.08) to roughly 6.5%. Separately, fellow activist investor Carl Icahn lost a proxy fight against Biogen Idec (BIIB 58.62, +0.12) after shareholders elected the company’s board nominees. As of March 31, Icahn owned 3.4% of outstanding BIIB shares.

In terms of economic data, initial jobless claims for the week ending June 14 totaled 381,000, down 5,000 from the prior week, but above the 375,000 claims that were expected. The claims trend has held steady at levels that reflect a loosening job market, but not a recessionary climate. Notably, continuing claims through totaled 3.06 million, which is down from the previous tally of 3.14 million.

A regional assessment of manufacturing activity, the Philadelphia Fed Index for June came in at -17.1, which is worse than the reading of -10.0 that economists forecast.

A reading of leading economic indicators for May climbed 0.1%, matching the prior month's reading and exceeding the consensus prediction, which called for a flat reading.

Oil prices are down 2% and trading hands at less than $140 per barrel. Oil prices encountered pressure after China announced it plans to raise gas and oil prices, which have largely been subsidized.DJ30 -23.62 NASDAQ +3.95 SP500 -4.02 NASDAQ Dec/Adv/Vol 1452/1245/948 mln NYSE Dec/Adv/Vol 1759/1232/506 mln

[Roland99]

49. What a nice wavy chart today!

[UpInArms]

50. I think they're each forming a "W"

:hi:

[Roland99]

51. omg!

:puke:

[antigop]

53. Business Week: Banks vs. Consumers (Guess Who Wins)

My apologies if this has been already been posted....an interesting expose on arbitration.

I'm wondering if this will come into play somehow with the banks and the subprime mess...

http://www.businessweek.com/print/magazine/content/08_24/b4088072611398.htm

What if a judge solicited cases from big corporations by offering them a business-friendly venue in which to pursue consumers who are behind on their bills? What if the judge tried to make this pitch more appealing by teaming up with the corporations' outside lawyers? And what if the same corporations helped pay the judge's salary?

It would, of course, amount to a conflict of interest and cast doubt on the fairness of proceedings before the judge.

Yet that's essentially how one of the country's largest private arbitration firms operates. The National Arbitration Forum (NAF), a for-profit company based in Minneapolis, specializes in resolving claims by banks, credit-card companies, and major retailers that contend consumers owe them money. Often without knowing it, individuals agree in the fine print of their credit-card applications to arbitrate any disputes over bills rather than have the cases go to court. What consumers also don't know is that NAF, which dominates credit-card arbitration, operates a system in which it is exceedingly difficult for individuals to prevail.

Some current and former NAF arbitrators say they make decisions in haste—sometimes in just a few minutes—based on scant information and rarely with debtor participation. Consumers who have been through the process complain that NAF spews baffling paperwork and fails to provide the hearings that it promises. Corporations seldom lose. In California, the one state where arbitration results are made public, creditors win 99.8% of the time in NAF cases that are decided by arbitrators on the merits, according to a lawsuit filed by the San Francisco city attorney against NAF.

"NAF is nothing more than an arm of the collection industry hiding behind a veneer of impartiality," says Richard Neely, a former justice of the West Virginia supreme court who as part of his private practice arbitrated several cases for NAF in 2004 and 2005.

[PfcHammer]

54. Operation Malicious Mortgage...LOL

Hundreds swept up in mortgage fraud arrests

By LARA JAKES JORDAN, Associated Press Writer
1 hour, 3 minutes ago

WASHINGTON - More than 400 real estate industry players have been indicted since March — including dozens over the last two days — in a Justice Department crackdown on incidents of mortgage fraud nationwide that have contributed to the country's housing crisis.

The FBI put the losses to homeowners and other borrowers who were victims in the schemes at over $1 billion.

"Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation's housing market and to the peace of mind to millions of Americans," Deputy Attorney General Mark Filip said in a statement Thursday. The Justice Department and FBI planed to announce the cases at an afternoon news conference in Washington.

Since March 1, 406 people have been arrested in the sting dubbed "Operation Malicious Mortgage" that saw 144 cases across the country. Sixty people were arrested on Wednesday alone, including in Chicago, Miami, Houston and a dozen other regions policed by the FBI.

http://news.yahoo.com/s/ap/20080619/ap_on_go_ca_st_pe/mortgage_fraud

[specimenfred1984]

56. I bet the 300 number is just the beginning too

Finally some justice is coming to all these "culture of corruption" people!

[RUMMYisFROSTED]

58. Lol.

Bait and switch.

[Roland99]

60. Oh look! Faeries!

Aren't they so pretty?

[ozymandius]

61. end of the day

Dow 12,063.09 Up 34.03 (0.28%)
Nasdaq 2,462.07 Up 32.36 (1.33%)
S&P 500 1,342.83 Up 5.02 (0.38%)
10-Yr Bond 4.199% Up 0.045
NYSE Volume 4,793,951,000
Nasdaq Volume 2,283,012,000

16:15 ET
Higher Close Despite Choppy Action
Dow +34.03 at 12063.09, Nasdaq +32.36 at 2462.07, S&P +5.02 at 1342.83

The absence of major market-moving headlines left stocks to trade in choppy fashion Thursday. Still, the stock market was able to close higher, though shy of its session peak.

The financial sector encountered some marked selling pressure after financial behemoth Citigroup (C 20.17, -0.23) stated it will continue to have substantial marks on subprime exposure this quarter and will likely incur a monoline adjustment on par with that of last quarter.

On a relative note, U.S. Treasury Secretary Paulson made note in a speech that a revaluation of assets is challenging some institutions and capital raises are expected to continue and to broaden. He also stated certain capital markets remain under stress.

After being down more than 2.0%, financials closed 0.9% higher.

A regulatory filing indicated Kirk Kerkorian's Tracinda Corp. has increased its stake in Ford Motor Company (F 6.32, +0.10) to 6.5%. Meanwhile, fellow activist investor Carl Icahn lost a proxy fight against Biogen Idec (BIIB 59.17, +0.67) as shareholders elected the company’s nominees to its board of directors.

Thursday did offer its share of economic data. Initial jobless claims for the week ending June 14 were more than expected, totaling 381,000 and down 5,000 from the prior week. Notably, weekly claims have held steady and do not reflect levels typical of a recessionary environment.

The Philadelphia Fed Index, a regional assessment of manufacturing activity, posted a reading of -17.1 for June. Economists forecast a reading of -10.0.

Separately, a reading of leading economic indicators for May climbed 0.1%, matching the prior month's reading and exceeding the consensus forecast, which called for a flat reading.

Oil prices encountered additional pressure after China announced plans to raise gas and oil prices, which have largely been subsidized. Oil prices spent the session appreciably lower, down as much as 3.8% to trade near $131.50 per barrel.

The retreat in crude prices helped provide airlines and transportation companies a healthy lift. The Dow Jones Transportation Index closed 3.4% higher, while the Amex Airline Index finished the session more than 10% higher.

The Nasdaq finished 1.3% higher, well ahead of the other major indices. Large-cap tech stocks like Microsoft (MSFT 28.93, +0.47) and Intel (INTC 22.85, +0.57) helped lead the way.
..Nasdaq 100 +1.6%. ..S&P Midcap 400 +0.5%. ..Russell 2000 +1.0%.