STOCK MARKET WATCH, Monday August 18

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday August 18, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 156
DAYS SINCE DEMOCRACY DIED (12/12/00) 2766 DAYS
WHERE'S OSAMA BIN-LADEN? 2491 DAYS
DAYS SINCE ENRON COLLAPSE = 2782
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.
$1 USD = EUR 1.06678
$1 USD = JPY 116.6200

AT THE CLOSING BELL ON August 15, 2008

Dow... 11,659.90 +43.97 (+0.38%)
Nasdaq... 2,452.52 -1.15 (-0.05%)
S&P 500... 1,298.20 +5.27 (+0.41%)
Gold future... 792.10 -22.40 (-2.83%)
30-Year Bond 4.47% -0.05 (-1.02%)
10-Yr Bond... 3.85% -0.04 (-1.03%)






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 Amber Waves Of Pain?
BY BRIAN PRETTI

It was in March of 2007 that we penned a discussion entitled "The Inflation Maize." The bottom line is that it was a discussion centered on reviewing the character of domestic ethanol production, how that impacted corn dynamics specifically, and suggesting that meaningful food price inflation was to come. To be honest, we had no idea just how fast domestic ag prices were to fly over the subsequent year. Corn, wheat and soybean prices took off to the upside like bottle rockets and blew through what were literally three decade trading ranges and price highs. Of course at this point, the ag theme in terms of investing is more than well known. And although many are calling it a spike or a bubble, we're not so sure that's the case at all. Despite a lot of the equities that reflect the greater ag theme having done more than quite well over the last year, until recently of course, we're of a mind that the ag and food price inflation theme more borders on being secular than cyclical. So, in the spirit of and set against these macro comments, it's time to have a quick check in on domestic ethanol and the greater ag theme.

...

First, all of the numbers we are presenting below are through year-end 2007. There are a few estimates floating around for 2008 that we will weave into the discussion. Point blank, decade to date, the number of biofuel plants that have come online in the US only has nearly tripled, and also doubled since 2004. In other words, a lot of capital has been sunk into plant and equipment over a relatively very short period of time. Regardless of changing micro energy ethanol economics month-to-month or year-to-year, there is no way these sunk capital costs are going to be sidelined in terms of forward production. As you'll remember, one of the largest warnings we have given you over the last two years in terms of residential real estate prices has been stranded or sunk capital among the builders. The builders spent so much on entitlements, permitting, land costs, infrastructure improvements, etc., that they literally had to continue building well beyond what was the recognizable cycle peak for the industry and the asset class. Stranded capital among the homebuilders remains an issue to this day. So too is stranded capital or sunk capital costs an issue for ethanol production, again regardless of short-term economics.

-chart-

Certainly the recognition of the true energy efficiency economics of ethanol is being addressed by the industry as the number of ethanol plants currently under construction as of YE 2007 has fallen from YE 2006. These folks are not blind. A number of prior capacity expansion and build out projects have been put on hold. But again, as crude prices creep higher, these delayed capacity build out projects will be waiting in the wings for their respective curtain calls.

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

[ozymandius]

2. no goobermental reports today n/t

[ozymandius]

3. Oil rises on worries Storm Fay may disrupt supply

SINGAPORE - Oil prices rose Monday in Asia on concerns that Tropical Storm Fay may disrupt oil operations in the Gulf of Mexico.

Light, sweet crude for September delivery rose 56 cents to $114.33 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract fell $1.24 on Friday to settle at $113.77 a barrel.

...

Fay, the sixth storm of the 2008 Atlantic season, was slowing down early Monday and moving erratically, but forecasters still expected it to strengthen slowly to a hurricane. Fay has already killed at least five people after battering Haiti and the Dominican Republic with weekend torrential rains and floods.

Oil giant Royal Dutch Shell has evacuated about 360 staff from the Gulf of Mexico over the past two days.

...

In other Nymex trading, heating oil futures fell 0.37 cent to $3.1154 a gallon (3.8 liters) while gasoline prices gained 0.48 cent to $2.865 a gallon. Natural gas futures fell 13.7 cents to $7.955 per 1,000 cubic feet.

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

[UpInArms]

35. OPEC official says falling oil price could trigger output cuts

http://www.marketwatch.com/news/story/opec-official-says-falling-oil/story.aspx?guid=%7B3E5DE011%2DF4E6%2D478D%2D82CB%2DD124CDC06FA5%7D&dist=TNMostRead

SAN FRANCISCO (MarketWatch) -- An Iranian official in the Organization of Petroleum Exporting Countries said Saturday that the producers group is considering leaving oil production levels unchanged or perhaps even trimming them to shore up flagging prices and defend market share.

"The market is oversupplied by at least 1 million barrels a day. If OPEC would like to remove this additional oil out of the market, then OPEC has to cut some production," OPEC governor Mohammad Ali Khatibi told Dow Jones in a telephone interview.

"There will be maybe two options. One option is maintaining the level of production. It means OPEC will roll over the production. The other option will be some decrease in production," he added.

The topic will lead OPEC's agenda when representatives of the group's 13 member nations gather Sept. 9 in Vienna to discuss production policy.

Oil prices peaked in early July at over $145 a barrel. They have since fallen 22% as the high prices carved deeply into demand, especially in the transport sector. The September crude oil futures contract closed Friday at $113.77 a barrel on the New York Mercantile Exchange, a fresh three-month low.

...more...

[ozymandius]

4. Analysts expecting large loss from Lehman: report

NEW YORK (Reuters) - Some analysts are girding for a third-quarter loss of $1.8 billion or more from U.S. investment bank Lehman Brothers Holdings Inc (LEH.N), instead of the modest profit they had previously expected, the Wall Street Journal reported on Sunday.

If losses keep piling up, Lehman could need to raise additional capital beyond the $6 billion it got in June, the paper said.

http://news.yahoo.com/s/nm/20080817/bs_nm/lehman_dc

[Robbien]

55. Lehman seeking to sell $40B in RE assets and securities

The troubled investment bank is looking to sell its $40 billion portfolio of real estate assets and securities and has discussed selling the assets together or in pieces, according to a Financial Times report citing people who have been in the talks.

The anonymous sources said that there is a gap between what Lehman and potential buyers think the assets are worth, the report said. Lehman has tried to attract buyers by offering to absorb the first $5 billion in losses that the portfolio's assets might suffer after a sale, the report added.

http://www.thestreet.com/s/lehman-may-sell-real-estate-assets-report/newsanalysis/banking/10433649.html?puc=googlen&cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

What good is a guarantee of loss by Lehman when in all probability it is not going to be in existence for very much longer.

[ozymandius]

5. Morgan Stanley sees more finance crisis pain: paper

FRANKFURT (Reuters) - The financial crisis will probably not end until next year or even 2010, Germany's Handelsblatt newspaper quoted Morgan Stanley (MS.N) co-President Walid Chammah as saying in a preview of its Monday edition.

...

Chammah also said return-on-equity rates of 25 percent were a thing of the past for the investment banking industry, the paper reported.

http://news.yahoo.com/s/nm/20080817/bs_nm/morganstanley_dc

[Ghost Dog]

15. Morgan Stanley, Goldman change lending systems -FT

Aug 18 (Reuters) - Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) and Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) are responding to the credit crisis with a system that uses the market's view of their own creditworthiness as a basis for lending decisions, the Financial Times reported.

Wall Street's second-largest investment bank Morgan Stanley is essentially tying its promise to provide financing to hedge fund clients to the price of credit insurance on its own debt, it said.

If the cost of the protection rises to a certain level, that would trigger a reduction in Morgan Stanley's commitments to hedge funds, the quoted people familiar with the situation as saying.

The message is that "if our firm is in trouble, we would rather fund ourselves than fund you (hedge funds)," the paper quoted a brokerage executive with knowledge of the arrangements as saying.

Goldman Sachs, which has largely avoided the credit losses hobbling its rivals, is understood to have a similar arrangement that uses its bond prices as a reference point for credit commitments to hedge fund clients, the paper said.

/.. http://www.reuters.com/article/marketsNews/idUSLI69887320080818?sp=true

[truedelphi]

64. Well isn't that special??!

Not unexpected, but maybe special.

[Karenina]

70. Is that in addition to or part of "Project Turquoise"

whose launch was scheduled for today? You know, the aggregate of "dark pools?" :shrug:

[Ghost Dog]

72. Hmmm.

"Turquoise was succesfully launched on August 15 2008" - http://en.wikipedia.org/wiki/Project_Turquoise

[Karenina]

81. As part of the Friday news dump, I take it!

:crazy:

[ozymandius]

6. The Endgame Nears For Fannie and Freddie

IT MAY BE CURTAINS SOON FOR THE MANAGEMENTS and shareholders of beleaguered housing giants Fannie Mae and Freddie Mac . It is growing increasingly likely that the Treasury will recapitalize Fannie and Freddie in the months ahead on the taxpayer's dime, availing itself of powers granted it under the new housing bill signed into law last month. Such a move almost certainly would wipe out existing holders of the agencies' common stock, with preferred shareholders and even holders of the two entities' $19 billion of subordinated debt also suffering losses. Barron's first raised the possibility of a government takeover of Fannie and Freddie in a March 10 cover story, "Is Fannie Mae Toast?"

Heaven knows, the two government-sponsored enterprises, or GSEs, both need resuscitation. Soaring mortgage delinquencies and foreclosures have led the companies to gush red ink for the past four quarters, and their managements concede the outlook is even grimmer well into next year. Shares of Fannie Mae (ticker: FNM) and Freddie Mac (FRE) have lost around 90% of their value in the past year, with Fannie now trading at $7.91, and Freddie at $5.88.

Similarly, the balance sheets of both companies have been destroyed. On a fair-value basis, in which the value of assets and liabilities is marked to immediate-liquidation value, Freddie would have had a negative net worth of $5.6 billion as of June 30, while Fannie's equity eroded to $12.5 billion from a fair value of $36 billion at the end of last year. That $12.5 billion isn't much of a cushion for a $2.8 trillion book of owned or guaranteed mortgage assets.

....

An insider in the Bush administration tells Barron's Fannie and Freddie are being jawboned by the Treasury Department and their new regulator, the Federal Housing Finance Agency (FHFA), to raise more equity. But government officials don't expect the agencies to succeed. For one thing, only a "capital raise" of $10 billion or more apiece would have any credibility. Yet, what common-stock investors would advance that kind of money to entities that have market capitalizations of $8.5 billion (Fannie) and $4 billion (Freddie), especially as the FHFA will use its new powers to boost dramatically the regulatory capital the GSEs must have in coming years?

http://online.barrons.com/article/SB121884860106946277.html?mod=googlenews_barrons

[Ghost Dog]

18. ... And just a few days ago we heard Paulson predict this wouldn't happen,

not that we believed him for one moment here in SMW.

[DemReadingDU]

21. Karl Denninger: End Times (for Fannie and Freddie)

8/16/08
"I told you so, months ago."

Barrons put a nail into the coffin in an article due to show up on newsstands on Monday (subscription required)

"It is growing increasingly likely that the Treasury will recapitalize Fannie and Freddie in the months ahead on the taxpayer's dime, availing itself of powers granted it under the new housing bill signed into law last month. Such a move almost certainly would wipe out existing holders of the agencies' common stock, with preferred shareholders and even holders of the two entities' $19 billion of subordinated debt also suffering losses. Barron's first raised the possibility of a government takeover of Fannie and Freddie in a March 10 cover story, "Is Fannie Mae Toast?""

Yep.

lots more...
http://market-ticker.denninger.net/archives/2008/08/16.html

[DemReadingDU]

48. Denninger interviewd on WTIC

edit to add date of the interview, today
8/18/08

Fed Up USA
Wake up America! You're Being Lied To!
http://fedupusa.org/

You can find the 8-minute audio link posted at Fed Up home page

Also on Fed Up home page, is an excellent 10-minute video

[UpInArms]

31. U.S. likely to recapitalize Fannie, Freddie (on taxpayers' dime): report

http://www.reuters.com/article/bondsNews/idUSN1747783620080817

NEW YORK (Reuters) - The U.S. Treasury is growing increasingly likely to recapitalize Fannie Mae and Freddie Mac in the months ahead on the taxpayer's dime, Barron's reported in its August 18 edition.

The weekly financial newspaper said that such a move could wipe out existing holders of the agencies' common stock, with preferred shareholders and even holders of the two entities' $19 billion of subordinated debt also suffering losses.

An insider in the Bush administration told Barron's that Fannie and Freddie "are being jawboned" by the Treasury Department and their new regulator, the Federal Housing Finance Agency (FHFA), to raise more equity.

But government officials don't expect the agencies to succeed, Barron's reported.

<snip>

After accounting for deferred tax assets and generous asset marks, Fannie and Freddie each may have a negative $50 billion in asset value, and little prospect of digging themselves out of the hole, Barron's reported.

...more...

[antigop]

49. so if I have to pay for this as a taxpayer, how do I get my shares? n/t

[DemReadingDU]

63. Fannie and Freddie face overseas confidence crisis

8/18/08

By Lynn Adler

NEW YORK (Reuters) - An extraordinary Treasury capital infusion may be needed to restore faltering foreign demand for debt issued by Fannie Mae and Freddie Mac, the two top home funding sources that the government is willing to rescue to save the housing market.

The companies rely heavily on overseas investment, often up to two-thirds of each new multibillion-dollar note offering, to help pare funding costs and keep mortgage rates low.

But foreign central banks have dumped nearly $11 billion (5.9 billion pounds) from their record holdings of this debt in four weeks, to $975 billion (522 billion pounds), and won't return in force before it's clear if -- and how -- the government will back Fannie and Freddie, some analysts say.

President Bush has already approved the means by which Treasury and the Federal Reserve could bolster these two companies, which both reported greater-than-expected quarterly losses and steps to beef up capital.

Fannie (FNM.N: Quote, Profile, Research) and Freddie (FRE.N: Quote, Profile, Research) said they aren't seeking that support and Treasury Secretary Paulson said he isn't offering.

The bonds these companies issue in the $4.5 trillion agency MBS market are near or worse than the weakest levels, set in March before the government engineered the sale of failing Bear Stearns to JPMorgan.

"People are concerned about whether there's a bailout that's going to be coming from the U.S., so it would be logical to see foreign investors pull out of agency paper," said Kevin Chau, forex analyst at IDEAglobal in New York.

"They don't know whether the U.S. is going to be committed to supporting the GSEs, and if they are going to support them, by what methods are they going to support them."

more...
http://uk.reuters.com/article/stocksNews/idUKARO82672220080818?sp=true

[CatholicEdHead]

59. Was this entire collapse part of a Norquist plan?

In this case drowning these two institutions in a bathtub of debt? Fannie Mae is a FDR New Deal creation and Freddy Mac is a spinoff of it. We all know how much the GOP big wigs hate anything from the FDR era.

Or is my tin-foil hat on too tight?

[Tansy_Gold]

66. Shruggery. Unabashed shruggery.

That's what it is.

This is a case of destroying the village (read, economy) so it can be saved (read, taken completely over by the shruggers).


Tansy Gold, who really needs to finish reading Nina Easton's "Gang of Five."

[Ghost Dog]

73. Bailout concerns slam Freddie, Fannie shares

NEW YORK (Reuters) - Investors dumped shares of Fannie Mae and Freddie Mac on Monday after Barron's reported the increasing likelihood of a U.S. Treasury bailout that would approach nationalization of the two housing finance titans.

The weekly financial newspaper said such a move could wipe out existing holders of the largest U.S. home funding companies' common stock. Preferred shareholders and even holders of the two government-sponsored entities' $19 billion of subordinated debt would also suffer losses.

Shares of the two providers of home mortgage funding fell more than 16 percent and some of their bonds sharply underperformed Treasuries. A $4 billion sale of new Freddie Mac debt drew weak bids compared with similar issues last week.

A spokeswoman for the U.S. Treasury said the department has no plans to use its authority to backstop the two funding agencies. That authority was greatly increased by a rescue plan approved at the end of July.

"The Barron's article overstated Freddie Mac's financial situation," Sharon McHale, a Freddie Mac spokeswoman, told Reuters. "We continue to be adequately capitalized."

/... http://www.reuters.com/article/ousiv/idUSN1849493320080818

[UpInArms]

83. US Treasury plays down increased Fannie, Freddie speculation

http://news.yahoo.com/s/afp/20080818/bs_afp/usfinancepropertycompanyfreddiemacfanniemae

WASHINGTON (AFP) - The US Treasury swiftly played down a media report Monday that suggested the government could be poised to extend significant financial aid to the struggling mortgage-finance giants Fannie Mae and Freddie Mac.

Fannie Mae and Freddie Mac's shares fell heavily amid wider market losses and renewed jitters over the finance sector after Barron's weekly reported the increased possibility of a US Treasury bailout.

"We're not going to comment on speculation. As the secretary has said many times, we have no intentions of using this authority," Treasury spokeswoman Jennifer Zuccarelli told AFP.

Zuccarelli was reiterating comments by Treasury Secretary Henry Paulson who has said the government does not intend to use a special authority to extend sizeable financial assistance to Fannie Mae and Freddie Mac.

The two firms, which are chartered by Congress to boost home ownership but are shareholder-owned, have endured hefty losses amid a lingering US housing market slump and as losses on mortgage investments continue rattling credit markets.

Concern about the two firms has unsettled investors because together they own or guarantee some 5.2 trillion dollars in loans, or about 40 percent of the total value of home loans in the United States.

...more...

[Ghost Dog]

7. GLOBAL MARKETS-U.S. dollar retreats as oil, gold recover

Mon Aug 18, 2008 2:51am EDT

HONG KONG, Aug 18 (Reuters) - The U.S. dollar slipped on Monday, easing from a six-month high against the euro as gold and oil prices rose, but slowing demand for commodities was widely seen supporting the currency in the medium term.

Reports in recent weeks have confirmed the euro zone and Japanese economies are shrinking, prompting dealers to scale back expectations for interest rate increases and emerging markets investors to prepare for a potential backlash.

Asian stock markets were mixed, with shares outside Japan .MIAPJ0000PUS hitting a 17-month low on a view that faltering consumer demand in developed economies will likely hit exports even harder. But Japan's Nikkei share average .N225 ended 1.1 percent higher as investors looked for bargains after a recent market sell-off.

...

Fears about a protracted global slowdown have caused oil prices to reflect a much lower so-called demand premium, as top consumers like China ratchet down energy imports.

On Monday, U.S. light crude prices climbed more than $1 to $115 a barrel CLc1 on threats to supply in the Gulf of Mexico from a tropical storm.

Still, the overarching trend for lower commodity prices and a stronger dollar remained firmly in place.

"Fresh weakness in European economic data and the easing inflation threat given the sharp fall in oil prices had the market shifting its focus to growth from inflation in recent weeks," said Nizam Idris, currency strategist with UBS in Singapore.

"This has helped the U.S. dollar, not due to any strong U.S. macroeconomic data, but more due to the incremental weakness in other major economies," Idris said in a note.

The MSCI index of Asia-Pacific stocks outside Japan fell 0.5 percent and has now tumbled 34 percent from a life high last November.

Hong Kong's Hang Seng index .HSI fell 1.2 percent to a five-month low after a profit warning from the world's biggest contract manufacturer of cellular phones, Foxconn International Holdings (2038.HK: Quote, Profile, Research, Stock Buzz), unleashed fears of more domestic weakness.

...

The Shanghai composite index .SSEC fell 4 percent to a 19-month low, hurt by shares of coal producers after Beijing raised export taxes on coal to curb power shortages.

...

"Markets are sensing that global demand is weakening and that economies outside the U.S. are bearing the brunt of this weakness. Even emerging markets growth, which showed remarkable resilience in the first half, is at risk of falling below trend," the strategists said in a weekly note.

"We continue to position for the intensification of growth weakness outside the U.S. through the currency markets."

...

Spot gold prices rose 1.8 percent to just above $800 an ounce <XAU=> on the recovery in oil prices. The yellow metal slumped more than 8 percent last week, its biggest drop since 1983, triggering a broad decline in metals prices.

/... http://www.reuters.com/article/marketsNews/idINSP32778220080818?rpc=44&sp=true

[Ghost Dog]

9. BOJ to paint darker picture on brink of recession

Sun Aug 17, 2008 8:44pm EDT

TOKYO, Aug 14 (Reuters) - The Bank of Japan will probably downgrade its view of the economy and keep rates on hold next week in a signal that crumbling export markets can no longer offer factories enough business to keep Japan out of recession.

...

The economy suffered its biggest contraction in seven years in the second quarter, while exports to emerging markets in Asia weakened after sustaining growth in the face of a slump in U.S. and European demand.

"Up until July, the BOJ has said that while domestic demand was weak, solid external demand would keep production afloat," said Masaaki Kanno, chief economist at JPMorgan Securities.

"But it has now become clear that exports, the last hope for Japan's economy, cannot be relied upon."

...

The annualised rate of contraction of 2.4 percent in Japan's economy is a contrast to the 1.9 percent growth in the same quarter in the United States. Analysts expect the euro-zone economy to have contracted slightly during the quarter.

Japanese industrial output has fallen for two straight quarters and is highly likely to fall further in the third quarter. In the last half century, two quarters of contracting factory output have always pushed the Japanese economy into recession as defined by the government.

...

The government has acknowledged that Japan is either heading into a recession or is already there, ending a growth cycle that began in early 2002 and was the longest in six decades.

But many economists expect any recession to be a shallow one as companies are now more resistant to external shocks, having recovered from the so-called triple excesses of the bubble era in the late 1980s -- excess production capacity, heavy debt loads and bloated payrolls.

/... http://www.reuters.com/article/marketsNews/idINT12341620080818?rpc=44&sp=true

[Ghost Dog]

10. The perfect storm leading to a global recession (Roubini)

... So every G7 economy is now headed toward recession. Other smaller economies (mostly the new members of the EU, which all have large current-account deficits) risk a sudden reversal of capital inflows; this may already be occurring in Latvia and Estonia, as well as in Iceland and New Zealand.

This G7 recession will lead to a sharp growth slowdown in emerging markets and likely tip the overall global economy into a recession. Those economies that are dependent on exports to the US and Europe and that have large current-account surpluses (China, most of Asia, and most other emerging markets) will suffer from the G7 recession. Those with large current-account deficits (India, South Africa, and more than 20 economies in East Europe from the Baltics to Turkey) may suffer from the global credit crunch. Commodity exporters (Russia, Brazil, and others in the Middle East, Asia, Africa, and Latin America) will suffer as the G7 recession and global slowdown drive down energy and other commodity prices by as much as 30 per cent. Countries that allowed their currencies to appreciate relative to the dollar will experience a sharp slowdown in export growth. Those experiencing rising and now double-digit inflation will have to raise interest rates, while other high-inflation countries will lose export competitiveness.

Falling oil and commodity prices - already down 15 per cent from their peaks - will somewhat reduce stagflationary forces in the global economy, yet inflation is becoming more entrenched via a vicious circle of rising prices, wages, and costs. This will constrain the ability of central banks to respond to the downside risks to growth. In advanced economies, however, inflation will become less of a problem for central banks by the end of this year, as slack in product markets reduces firms' pricing power and higher unemployment constrains wage growth.

To be sure, all G7 central banks are worried about the temporary rise in headline inflation, and all are threatening to hike interest rates. Nevertheless, the risk of a severe recession - and of a serious banking and financial crisis - will ultimately force all G7 central banks to cut rates. The problem is that, especially outside the US, this monetary loosening will occur only when the G7 and global recession become entrenched.

Thus, the policy response will be too little, and will come too late, to prevent it.

/... http://www.timesofmalta.com/articles/view/20080818/opinion/the-perfect-storm-leading-to-a-global-recession

[Ghost Dog]

16. Asia's forex reserves may not be too high after all

BEIJING: A new International Monetary Fund study may fuel an uneasy feeling stirring in financial markets that some Asian central banks are drawing down their currency reserves a bit too fast for comfort.

In a challenge to conventional wisdom, including that of the Fund, two IMF researchers say the huge war chests are not too big to begin with in most Asian countries in light of the potential for capital flows to come to a screeching halt.

"Except in China and possibly Malaysia, reserves in emerging Asia cannot be considered excessive, when compared to what would be optimal from a precautionary motive standpoint," Marta Ruiz-Arranz and Milan Zavadjil write in a working paper. Asia's reserves have quadrupled since the region's financial crisis a decade ago. Even excluding China, they have more than doubled in nominal terms, a build-up that remains controversial.

As far back as mid-2003, the fund's chief economist at the time, Ken Rogoff, memorably said that putting aside reserves for a rainy day was one thing; building Noah's Ark was another. Topping up stockpiles depleted by the crisis as self-insurance against a repeat of that trauma was a natural policy response. But the reserves then kept growing as central banks intervened to hold down their exchange rates.

In doing so, critics say, Asia built up external surpluses that exacerbated global imbalances, paid for American consumers to live beyond their means for too long and bottled up inflationary pressures at home that are at last bursting forth. And now developed economies seem to be chasing other into recession as banks unwind the lax lending, to subprime mortgage borrowers and others, that Asian vendor financing made possible. It is quite a charge sheet, so it's all the more refreshing to find a stout defence of reserve accumulation from the IMF itself.

USEFUL CUSHION

For a start, Ruiz-Arranz and Zavadjil say the reserve build-up has reduced Asia's vulnerability to the fall-out of the global credit crunch and so is helping to maintain financial stability in the region. "Not only are individual economies better prepared to weather a sudden stop of capital flows, but the risk of financial contagion in the region may have decreased as a result of the reserve accumulation," the IMF researchers say.

/... http://economictimes.indiatimes.com/Markets/Global_Markets/Asias_forex_reserves_may_not_be_too_high_after_all/rssarticleshow/3375575.cms

[Ghost Dog]

12. French Manufacturing Confidence Declined, Bank of France Says

Aug. 18 (Bloomberg) -- French manufacturing confidence fell to the lowest in five years in July as a stronger euro and rising oil prices dimmed the outlook for growth in Europe's third-largest economy.

The Paris-based Bank of France said its index of manufacturing confidence declined to 92, the lowest since May 2003, from 95 in June. Economists expected a drop to 94, the median of 10 forecasts in a Bloomberg News survey showed.

The French economy is weakening as surging oil prices erode the spending power of companies and consumers just as the euro's ascent against the dollar makes exports less competitive abroad. The data suggests the economy grew 0.1 percent in the third quarter after contracting 0.3 percent in the prior three months, the central bank said.

/... http://www.bloomberg.com/apps/news?pid=20601068&sid=af2m7jg09uaY&refer=economy

[Ghost Dog]

17. Euro-Zone Jun Trade Balance Weaker Than Expected

LONDON (Dow Jones)--The euro zone recorded a foreign trade deficit in June, defying market expectations for a surplus as import growth outstripped the increase in exports.

The 15 countries that share the euro recorded a trade deficit of EUR0.1 billion with the rest of the world in June, after registering a EUR7.5 billion surplus in the year-earlier month, Eurostat data showed Monday.

In May the deficit was EUR3.9 billion, and economists had expected it to bounce back to a surplus of EUR1.1 billion on the back of strong exports in June.

Monday's weaker-than-expected data suggests that the strength of the euro and weakening global demand are hitting the currency bloc's exporters, making their products comparatively more expensive.

...

The data showed that imports rose 11% to EUR135.6 billion in June 2008 from EUR121.7 billion in the year-earlier month. Exports increased 5% to EUR135.5 billion from EUR129.2 billion over the same period.

Trade between the euro-zone members increased 2% in June 2008 compared with June 2007.

Over the five months to May, the euro-zone's trade surpluses with the U.K. and the U.S. both narrowed, while the trade deficit with China remained roughly stable at EUR42.0 billion.

The biggest change came in the trade deficit with Russia, which widened 25% to EUR17.4 billion in the five months to May 2008 from EUR13.9 billion a year earlier. That's most likely due to the rising cost of energy imports from Russia to the currency bloc.

The value of total exports to the U.S. fell 4%, while exports to Japan dropped 1% in the January-May period compared a year earlier.

Eurostat hasn't provided cumulative data for June yet.

/... http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=ecf66601-b7be-4c98-a23d-b0b119c05282

[Ghost Dog]

13. Swiss Retail Sales Disappoints, Fueling Growth Fears

Swiss retail sales rose less than expected to an annual pace of 0.7% in June after rising 7.4% in May. Record high food and energy costs continue to sap purchasing power, and led consumers to cutback spending on discretionary items such as clothing and furniture. As the Swiss Nation Bank faces its highest rate of inflation in 15 years, the central bank may be forced to sit on the sidelines as downside growth risks become a major concern for the economy. However, the current decline in oil prices may help to curb inflation in the second half of 2008, allowing the central bank to hold the benchmark interest rate at 2.75% for the rest of the year.

/. http://www.dailyfx.com/story/calendar_events/Swiss_Retail_Sales_Disappoints__Fueling_1219049790266.html?engine=rss&keyword=article

[Ghost Dog]

14. European shares fall early, led by banks, drugs

LONDON, Aug 18 (Reuters) - European shares fell early on Monday as investors sold heavyweight banks and defensive drugmakers to return to the recently battered mining sector amid a weaker dollar, while oil shares tracked crude higher.

At 0843 GMT, the FTSEurofirst 300 index of top European shares was down 0.8 percent at 1.179.79 points. The index is flat so far this month and has gained in only one month so far this year.

Banks were broadly lower, with UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz), Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) and Credit Suisse (CSGN.VX: Quote, Profile, Research, Stock Buzz) down 1.2 to 2.3 percent, while drugmakers weakened, with GlaxoSmithKline (GSK.L: Quote, Profile, Research, Stock Buzz) and Roche (ROG.VX: Quote, Profile, Research, Stock Buzz) off 0.6 and 1.5 percent respectively.

Monday brought a pause to the trend of a rising dollar and falling metal and crude prices.

...

But analysts said they expected the underlying trend to be for a firmer dollar, which would be positive for European exporters' shares.

...

Data released last week showed the euro zone economy recorded its first-ever contraction in the second quarter, pulled own by falling activity in its biggest economies.

...

Across Europe, Britain's FTSE 100 .FTSE fell 0.4 percent, while Germany's DAX .GDAXI and France's CAC .FCHI fell 0.8 percent, and U.S. index futures SPc1 NDc1 and DJc1 pointed to a weaker start on Wall Street.

COMMODITY REBOUND

Miners and steelmakers gained, with Arcelor Mittal (MTP.PA: Quote, Profile, Research, Stock Buzz), Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz) and BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz) rising 0.7 to 2 percent. BHP reported a 30 percent rise in second-half profit, in line with market forecasts.

The DJ Stoxx European Basic Resources index rose 0.9 percent after falling 12 percent in July and 9 percent so far this month.

Among oil shares, Total (TOTF.PA: Quote, Profile, Research, Stock Buzz) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) gained 1 percent, while BP (BP.L: Quote, Profile, Research, Stock Buzz) dipped 0.1 percent.

But the rise in the euro took its toll on European aerospace and defence group EADS (EAD.PA: Quote, Profile, Research, Stock Buzz), which fell 2.5 percent.

And airline stocks fell on the higher oil price, with British Airways (BAY.L: Quote, Profile, Research, Stock Buzz), Lufthansa (LHAG.DE: Quote, Profile, Research, Stock Buzz) and Air France KLM off 2-3 percent.

/... http://www.reuters.com/article/marketsNews/idCALI71116220080818?rpc=44&sp=true

[Ghost Dog]

71. Europe shares fall as oil boost for energy fades

LONDON, Aug 18 (Reuters) - European shares fell on Monday in a volatile session, as easing crude oil pared some of the gains in energy shares, while the firmer euro dented retailer and auto stocks.

Banks were the worst performing sector on the broader European market, but automotive and food and drug retailers ranked among some of the biggest drags.

The FTSEurofirst 300 index of leading European shares eased 0.1 percent, or 1.1 points, to 1,189.15 points, after earlier rising as much as 0.8 percent.

Crude oil CLc1 fell below $113 a barrel, which eroded some of the gains in oil and gas shares, but added to growing relief that inflationary pressures were receding. Crude touched record highs around $147 in July.

...

The FTSEurofirst 300 is on track for its first monthly rise in four months in August, helped in large part by the near-10 percent drop in crude oil that has doused concern about inflation and revived hopes of central banks cutting rates.

"Whilst people look at oil, the much bigger picture is growth differentials, fundamentals," said Philip Lawlor, chief portfolio strategist at Nomura.

"You're seeing the expectation that Europe is quite conceivably going to have lower growth than the U.S., so we're coming off a period of people readjusting, recalibrating their outlook," he said.

Oil earlier rose by as much as 1.4 percent to $115.35 a barrel and was last down 0.9 percent at $112.88.

...

The European travel and leisure index and the DJ Stoxx European retail index fell 1.5 percent and 1.2 percent, respectively.

...

Around Europe, Britain's FTSE 100 index .FTSE lost 0.1 percent, Germany's DAX index .GDAXI fell 0.2 percent, and France's CAC 40 .FCHI shed 0.1 percent.

/... http://www.reuters.com/article/marketsNews/idCALI64896520080818?rpc=44&sp=true

[ozymandius]

8. Bernanke Tries to Define What Institutions Fed Could Let Fail

Aug. 18 (Bloomberg) -- Ben S. Bernanke is still trying to define which financial institutions it's safe to let fail. The longer it takes him to decide, the tougher the decision becomes.

In the year since credit markets seized up, the 54-year- old Federal Reserve chairman has repeatedly expanded the central bank's protective role, turning its balance sheet into a parking lot for Wall Street's hard-to-finance bonds and offering loans through its discount window to investment banks and mortgage firms Fannie Mae and Freddie Mac.

The lack of clearly defined limits may put the Fed's independence at risk as Congress discovers that its $900 billion portfolio can be used for emergency bailouts that might otherwise require politically sensitive appropriations and taxes.

...

He granted a congressional request to accept bonds backed by student loans as collateral for Fed securities loans. And he didn't object when Congress inserted a provision into the housing bill signed into law last month that makes it easier for the Fed to lend to failed banks under government control.

http://www.bloomberg.com/apps/news?pid=20601068&sid=a0v71H6gketc&refer=economy

[Roland99]

19. Is he getting leery of helicopters now?

[UpInArms]

27. Finding Self in Hole - Bernanke digs Deeper

Charting a course out of credit crisis

http://www.reuters.com/article/ousiv/idUSN1445517420080817?sp=true

WASHINGTON (Reuters) - When U.S. Federal Reserve officials gathered for their annual Jackson Hole conference last August, Bear Stearns shares were trading at well over $100 apiece. The benchmark federal funds rate was 5.25 percent, more than double where it stands now, and oil cost about $70 a barrel.

Twelve months later, Bear Stearns is gone, as is about $400 billion from banks' balance sheets. Legendary oilman T. Boone Pickens thinks the days of oil under $100 a barrel may be gone, too.

Looking back at the 2007 conference provides some cringe-inducing moments.

In his speech at the Wyoming mountain resort, Fed Chairman Ben Bernanke declared that the central bank was ready to act to shield the economy from the credit crisis but would not save investors who made bad choices.

"It is not the responsibility of the Federal Reserve -- nor would it be appropriate -- to protect lenders and investors from the consequences of their financial decisions," he said at the time, words that now sound ironic in light of the Fed's role in rescuing Bear Stearns from bankruptcy in March.

...more...

[UpInArms]

40. How to solve the financial crisis? Play for time, pray for markets to turn.

http://money.cnn.com/2008/08/15/news/economy/Sloan_washingtons_solution.fortune/index.htm

(Fortune Magazine) -- These are the dog days of summer, the height of our national vacation season. But instead of hitting the beach, people in Washington and on Wall Street are spending their days all atwitter with ideas of what new regulations and rules and controls we need to deal with our financial market meltdowns, the worst since the Great Depression almost 80 years ago.

But let me tell you a little secret, folks. Even though they're scurrying around like everyone else in this game, I think the crisis managers at the Federal Reserve Board and the Treasury have quietly adopted a technique that has helped us deal with previous financial crises - what I call the "play and pray" approach.

They don't teach it in Economics 101, and none of the players dealing with the current meltdown will talk about it on the record. But it's a time-tested strategy - think of the mortgage crisis of the late 1970s and early 1980s, the bank problems in the early 1990s, and the Asian contagion of the late 1990s. The idea: You play for time by keeping things afloat long enough for your prayers to be answered by the markets' turning in the right direction.

The theory is that if you give stricken financial institutions like Fannie Mae (FNM, Fortune 500) enough time, profits from their basic operations can help them dig out of the capital pit into which they've fallen. A few years of nice profits will help offset the big losses from past blunders, provided the company stays alive long enough.

In fact, Fannie Mae's underlying business - using borrowed money to buy mortgages - is showing increasing profitability. That's because while the Fed has cut the short-term Federal funds rate that it controls to 2% from 5.25% since September, rates on long-term mortgages have risen. HSH Associates says fixed-rate 30-year mortgages cost 6.70% in early August, up from 6.47% when the Fed first cut rates. The reason: There are far fewer sources of long-term mortgage money than before the market meltdown started last year, because falling house prices and fear of inflation have spooked lenders. Another factor is the dollar's decline, which has unnerved the foreigners who had been major mortgage investors.

I suspect that playing for time and praying for a break is also how crisis managers hope to keep financial insurers like MBIA (MBI) and Ambac (ABK) alive, to forestall what they fear could be catastrophic failures. The idea: The firms' basic business of insuring municipal securities that rarely default will over time help cover their losses from insuring collateralized debt obligations and mortgage-backed securities that they didn't understand.

...more...

[Ghost Dog]

51. So, not just usury, but usury with no possible downside.

Told you they'd change the accounting rules (for the chosen few).

Doubleplusgood benefit: screw up the planet more quickly. Hey, but if they can keep it afloat long enough, maybe Venus will have become habitable by then, and they won't all have to move to Mars.

:shrug:

[MilesColtrane]

43. Moral Hazad? ....Moral Shmazard!

Investment banks will now be betting on which of two flies will crawl to the top of a wall.

[Hugin]

65. Well, it's pretty obvious what he should do.

Those things which were high on risk should be the first to fail. (BY DEFINITION... That's what risk is, dude.)
And people who take higher risks (as well as sometimes winning more, also) LOSE MORE!

They aren't going to like that answer though, because that's where all of the Haves and Have Mores put their
markers... uh, I mean investments. Due to being promised HUGH RETURNS11!!!! You risk more you lose more. Those are
the rules of nature.

Why should a responsible person who invested in low risk low return ventures (Read: SAFE) have to be the first
to pay for the greed, hubris, and foolishness of those with money to burn? To those people who invested in
low risk they did so for one of two reasons... Either they don't have enough to lose or they don't like losing
money.

Let the gamblers sleep in the dumpsters and under viaducts. Maybe they'll learn not to risk more than they can
afford.

This whole thing makes me sick. :blech:

[ozymandius]

11. Home Depot May Say Annual Profit Will Fall More Than Forecast

Aug. 18 (Bloomberg) -- Home Depot Inc., whose shares have risen 28 percent in New York trading since July 15, may disappoint investors tomorrow by saying profit this year will fall more than it forecast three months ago.

The world's largest home-improvement retailer is facing the deepest housing slump since the Great Depression, which is taking its toll on sales of power saws and drywall. Home Depot may issue the new forecast when it reports second-quarter profit tomorrow, according to four analysts surveyed by Bloomberg News.

...

Home Depot may say before U.S. markets open tomorrow that second-quarter profit fell for the eighth straight quarter, the longest streak in its 30-year history. Net income for the quarter, which ended Aug. 3, probably dropped to $1.04 billion, or 61 cents a share, the average estimate of 22 analysts surveyed by Bloomberg. Sales dropped 7 percent to $20.5 billion, 17 analysts predict.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aaU3AlADuTYQ&refer=us

[Dr.Phool]

22. I was in Home Depot for a little while yesterday. No customers.

Which was pretty amazing in itself, since we're under a hurricane watch. Of course, as usual, they didn't have the couple of items that I went for. Not because shoppers were snatching things, but they just don't stock things that people want anymore.

I also noticed over the week-end, that the place I usually buy propane has gone out of business, as well as my secondary supplier.

[UpInArms]

33. Housing malaise eats into Lowe's profit

http://www.marketwatch.com/news/story/housing-malaise-eats-lowes-profit/story.aspx?guid=%7B6BB16254%2D2B75%2D4D7F%2DA577%2DEFF97EF96934%7D&dist=msr_8

NEW YORK (MarketWatch) -- No. 2 home-improvement retailer Lowe's Cos. said that its second-quarter profit fell 7.9%, hurt by the housing market downturn that cut into demand for big-ticket purchases, and issued a third-quarter forecast that missed analysts' estimates.

Net income in the quarter ended Aug. 1 fell to $938 million, or 64 cents a share, from $1.02 billion, or 67 cents, a year earlier, the Mooresville, North Carolina-based company said Monday.

Sales rose 2.4% to $14.5 billion as the company opened in more locations. Same-store sales, or sales at stores open at least a year, dropped 5.3%.

Analysts expected Lowe's (LOW: 24.50, +0.69, +2.9%) profit to decline to 56 cents a share on sales of $14.1 billion in the second quarter, according to FactSet.

Lowe's said while big-ticket item purchases continued to be hurt by the housing downturn, it saw relative strength in seasonal sales as homeowners restored lawns and outdoor landscaping after last year's drought in much of the country. The company said it also benefited from the stimulus checks from the U.S. government.

...more...

[Demeter]

20. Good Morning Ozy and All!

I've had this uneasy, queasy feeling all weekend, a premonition of something definitive and not good coming like a freight train. Not sure if it's personal or global, but it feels global. So keep an eye out and your heads down, okay? After all, the Decider is on vacation, belatedly, and pissed about it.

And we all know hell breaks lose when George is away.

[MilesColtrane]

44. Mushie's stepping down.

Storm bearing down on FLA.

Preparing to tweak the Russian bear.

What could go wrong?

[DemReadingDU]

23. PBGC downplays investment plan risks

8/18/08 Pension agency may understate risks of more aggressive investment plan, report says

The federal agency charged with backstopping pension benefits for 44 million Americans has understated the risks of its new investment policy, a congressional watchdog said Monday.

The Government Accountability Office said in a report that the Pension Benefit Guaranty Corp.'s new strategy could significantly boost the PBGC's investment returns, but it "will likely also carry more risk than acknowledged by PBGC's analysis."

The PBGC said earlier this year that it would take a more aggressive investment approach by investing more in stocks and adding new alternative investments, such as real estate and private equity funds.

The agency, which has assets of $68 billion, hopes the strategy will help it close a $14 billion gap between those assets and its liabilities. Otherwise, taxpayers could be called upon to pony up extra funding, the director of the PBGC has warned.

The PBGC has said its new approach will reduce risk because it will result in a more diversified portfolio of 45 percent stocks, 45 percent bonds, and 10 percent in alternative investments.

Previously, its targets were 75 percent to 85 percent bonds and 15 percent to 25 percent in stocks, though the actual figure reached 28 percent last year. The agency is seeking bids from Wall Street firms to help manage the switch.

The GAO, however, said that under certain scenarios the new strategy would have more volatile results than the old approach. The report said that's risky because PBGC pays out more than $4 billion a year to retirees and needs access to cash.

That need increases the risk of "any investment strategy that allocates significant portions of the portfolio to volatile or illiquid assets," the GAO said. Funds allocated to private equity, for example, may not be returned for up to seven years, the report said.

But Charles Millard, PBGC's director, said the report shows that even under the GAO's calculations, the new strategy takes on less risk than most institutional investors and could provide an additional $20 billion to $40 billion in investment gains over 30 years. That's enough to close the agency's deficit.

"The whole point of the new policy is to make it far less likely that Congress will have to engineer a bailout," he said.

The PBGC is one of the government's largest corporations and insures approximately 30,000 defined benefit pension plans. Defined benefit plans pay benefits based on years of service, salary levels and other factors. They are being increasingly replaced by 401(k)-style plans in which benefits depend on the employee's contributions. The PBGC doesn't insure 401(k) plans.

The PBGC's finances have come under strain as it has taken over several large pension plans in recent years from bankrupt airline and steel companies, including a $17 billion plan maintained by UAL Corp., parent of United Airlines. United emerged from bankruptcy in 2006.

The PBGC is funded by fees paid by the companies it insures, assets from failed pension plans, recoveries from bankruptcies and returns on invested assets. It doesn't receive taxpayer funds.

The agency now covers pensions for 1.3 million Americans who are either retired or soon will be. That's up from 624,000 in 2001.

The GAO report also urged the PBGC's board, which is chaired by the Labor Secretary, to more closely monitor the agency's investments.

The board "has not taken an active and engaged role," the GAO said, and should require more formal reporting by the PBGC's director about the new investment plan.

Labor Secretary Elaine Chao, in a letter included in the report, said the board has increased its oversight recently and reviews the PBGC's investment policy "at least" every two years and approves it "at least" every four years.

The GAO report was requested by four senators, including Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa, chairman and senior Republican on the Senate Finance Committee.

Some members of Congress have criticized the PBGC for taking a conservative investment approach. It adopted the 15 percent to 25 percent equity limit in 2004.

Rep. Earl Pomeroy, D-N.D., said in an interview last week that the adoption of the equity cap cost the agency "billions of dollars."

In its 2007 annual report, the PBGC acknowledged that an investment portfolio with 60 percent in stocks and 40 percent bonds would have produced $7.3 billion more in returns over five years than the more conservative approach.

http://biz.yahoo.com/ap/080818/pension_investments_risks.html

[Dr.Phool]

37. It also could have lost a lot more.

It looks like they're using PBGC money to prop up the stock market. And talk about gross incompetence, don't get me started. OK, you already did.

I collect a pension from the PBGC. When I first started collecting back in 2002, my "benefits were just under $1600 per month. However, they sent me a letter explaining that it could take as long as SIX YEARS to determine my pension. They cut me by $300 a couple of months later, and sent a letter saying more was to come. Last year, they whacked another $800 per month, and are withholding 10% of that to cover overpayments until the year 2072!

In the mean time, they had the documentation in place to make a determination back in 2002. And it should be the $1600 - $300, or just under $1300 per month.

I've noticed a pattern over the years, that whenever a crook got nailed embezzling a lot of money or cleaning out a bank or S&L, they always seemed to have lost all the money gambling. Lately, it seems that it all goes up in smoke in the stock market.

[UpInArms]

24. dollar watch

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

Last trade 77.054 Change -0.069 (-0.09%)

Dollar Dominates As Russian Tanks Roll

http://www.bktraderfx.com/site/fx-weekly-reports/fx-weekly-0815-082208-dollar-dominates-as-russian-tanks-roll

Suddenly dollar is the safe haven bid. With Russian tanks rumbling through half of Georgia and inflation hitting multi-year highs it seems its like 1980’s all over again. Currency markets have stopped worrying about the economic woes plaguing the US and have started to focus on the broader risks threatening global political stability.

We originally thought that 1.4800 would represent near term support for the EURUSD but the expanding conflict in the Caucasus has stoked fears of wider problems in the region pushing speculative flows into the dollar as investors in Europe grow increasingly wary. Now it appears that the pair may push down to to 1.4500 before pausing.

The economic docket next week is particularly unimpressive with very little key data on the calendar. In EZ traders will look at the Trade balance figures and the latest ZEW survey while in US PPI, housing data and Philly Fed numbers are the only events of note. With summer vacation season in full swing perhaps the volatility will die down, but if macro risks reassert themselves the downward slide could continue.

The slide certainly continued in cable which came within a whisker of the 1.8500 figure - a level it has not seen in 22 months. With BoE acknowledging the slowdown in the UK economy it is now just a matter of time before the MPC cuts rates. The markets are factoring in 75bps of rate cuts in the next year and the unit has already adjusted to the new reality. With sterling so grossly oversold a bounce may be due but traders will need to see some signs of stabilization in the UK economy and to that end the Retail Sales and housing data releases will be key.

The news out of Japan was dour as well with GDP contracting for the first time in a year in the April-June quarter, confirming fears that the world’s second-largest economy has entered a slump at the same time as other G-3 countries. Meanwhile US CPI numbers printed hotter than expected pushing rate expectations up and as a result USDJPY rallied right back to the 110 level after shedding 200 points at the start of the week.

...more...

Euro Crushed But Is A Bounce Due?

http://www.bktraderfx.com/site/fx-weekly-reports/fx-weekly-0808-081508-euro-crushed-but-is-a-bounce-due

—————–Trading Thoughts-Running Money —————
K and I often receive offers to manage money and so far we’ve refused everyone of them because we are simply too busy with research and our advisory services to devote the proper energy to the task. However the idea of running money has made me think about the criteria I would use to evaluate a money manager. Following are simply my thoughts and are by no means the final word on the subject, but I thought they may be useful points of reference for everyone to consider.

————–FX Market Outlook————–

Last week we went on Squawk and said that if 1.5500 gives way 1.5200 could soon follow. Frankly, however, even we were surprised by the ferocity and the magnitude of the decline. Once again currencies demonstrated that speculative markets will always move far more that you expect once the cascade of stops kicks in.

The rally in the dollar was of course not due to any improvement in US economic prospects but rather the result of bursting of the euro bubble. After Trichet’s press conference on Thursday not only did the markets stop thinking about any additional rate hikes, but they started to price in rate cuts by early 2009 as all evidence pointed to the start of a recession in the 15 member union.

The key question next week - will 1.50 hold? There is little on the economic calendar to suggest direction either way as both US and EZ data is likely to disappoint. At this point trading is all a matter of flow. If 1.5000 does not find bargain hunters the fall in the EURUSD could continue all the way to 1.4800. Still, with the pair having fallen so far so fast, and with US data unlikely to offer any upside surprises, a short covering rally could be due, so sell at your own risk.

Cable followed euro to the downside albeit at a slower pace as 1.9500 gave way all the way down to 1.9200 and traders became convinced that it is only a matter of time before BoE caves and starts to cut rates. Last week the BoE left rates unchanged, but this week the labor data may hold the key to future policy decisions. If traders see another month of poor unemployment numbers, the pressure on Mr. King and company to cut will become immense.

USDJPY meantime came within a whisker of the 110 handle and really appears to be grossly overbought at this level. The dollar rally has been predicated on the assumption of US rate hikes by early 2009, but we are highly skeptical of Fed doing any tightening for all of next year. As matter of fact US monetary policy is very likely to follow the Japanese model as the economy sinks deeper into deflation and authorities continue to socialize losses on financial assets. When markets finally realize that no rate hike is coming USDJPY rally will stop dead in its tracks.

Finally the collapse of the CRB index has really hurt the commdollars and instead of parity the Aussie now trades below 90 cents. A bet on comm dollars is a bet on global growth and global growth is clearly slowing. The Chinese market is already discounting the post Olympic hangover and if the equity investors are right the commdollar may have more pain to go but kiwi may see a dead cat bounce if retail sales print better than forecast.

...more...

[uppityperson]

32. hi, question from a simple minded (confused?) person here

Looking at the charts, it seems I could get more euros for dollars now than last month. Is this right (dollar is worth more in comparison?)? thanks. I am vacationing in Euro country and trying to figure out when to exchange more, but am confused.

[UpInArms]

34. the dollar had gained against the euro (euro weaker)

in the past 6 weeks.

Since you are in Europe now, you should find the exchange rate more favorable.

Hope that answered your question.

:hi:

[uppityperson]

79. Thanks, that's what I am trying to figure out, along with where

letters are on this keyboard. Shut my eyes and type "hi, how are you doing?": hi; hoz qre you doing/

Ah well, 'tis good to slow down. Thanks again, was what I was wondering.

[Ghost Dog]

54. "expanding conflict in the Caucasus"? Not any more, thanks to European diplomacy.

That is something the neocons and shruggers would dearly like to see, and have been pushing for, though.

[Karenina]

82. CHECK THIS OUT!

NLMK Set to Buy U.S. Steel Giant JMC for $3.5 Billion

By Nadia Popova

Staff Writer

MOSCOW — Novolipetsk Steel said Wednesday that it agreed to buy John Maneely Company, the United States’ largest independent steel pipe and tube manufacturer, for $3.5 billion in the biggest North American purchase ever by a Russian metals company.

Novolipetsk, also known as NLMK, said it would acquire 100 percent of JMC from Carlyle Group, the world’s second-largest private-equity firm, and the Zekelman family, as Russia’s metals giants continue to buy up the continent’s steel assets.

The deal, which is to be approved by the U.S. Committee on Foreign Investment, is expected to be closed in the fourth quarter of 2008 and create synergies worth $35 million per year, NLMK said in a statement on its web site.

“We are delighted to have secured entry into the highly attractive U.S. pipe and tube market,” NLMK chairman Vladimir Lisin, who owns an 85 percent stake in the company, said in the statement.

JMC produces pipes and tubes used in construction, infrastructure and utilities at its 11 plants in the United States and Canada. For the 12 months ending June 30, it shipped 2.1 million tons of pipe and had earnings before interest, taxes, debt and amortization of $485 million.

“The acquisition of JMC fits with NLMK’s stated strategy of portfolio diversification and downstream integration in the core markets of the company. It strengthens NLMK’s position in North America and provides an entry point into an important and high-margin end market,” the statement said...cont'd



Read more: http://www.sptimes.ru/index.php?action_id=2&story_id=26852

Posted by Dover and locked for being outdated...

[UpInArms]

25. FACTBOX-Auction-rate settlements

http://www.reuters.com/article/bondsNews/idUSN1249812120080815?sp=true

UBS AG (UBSN.VX: Quote, Profile, Research, Stock Buzz): UBS agreed on August 8 to buy back $18.6 billion of debt securities, starting with $8.3 billion from retail and charitable clients beginning on October 31, and as much as $10.3 billion from institutional clients beginning in June 2010. It also agreed to pay a $150 million fine.

CITIGROUP INC (C.N: Quote, Profile, Research, Stock Buzz): Citigroup agreed on August 7 to buy back $7.5 billion of its investors' auction rate paper at par to settle charges by the SEC and New York State Attorney General Andrew Cuomo. That would cover an estimated 40,000 retail customers. By November 5, Citigroup plans to have fully reimbursed retail investors. It also plans to try by the end of 2009 to liquidate $12 billion of debt held by more than 2,600 institutional investors. Citigroup will pay a $100 million fine.

MORGAN STANLEY (MS.N: Quote, Profile, Research, Stock Buzz): Morgan Stanley settled with New York State Attorney General Mario Cuomo on August 14 and agreed to buy back $4.5 billion of auction-rate securities from individuals, charities and small- and mid-sized businesses by Dec. 11 and pay a $35 million fine. It also will reimburse customers who sold debt at a loss.

JP MORGAN CHASE & CO (JPM.N: Quote, Profile, Research, Stock Buzz): JP Morgan settled with New York State Attorney General Mario Cuomo on August 14 and agreed to buy back $3 billion in debt by Nov. 12 and pay a $25 million fine, and reimburse customers who sold debt at a loss.

WACHOVIA CORP (WB.N: Quote, Profile, Research, Stock Buzz): Wachovia agreed to settle federal and state probes by buying back auction-rate securities totaling $8.8 billion, including $5.7 billion held by 40,000 individual investors, charities and small businesses. The initial buy back period is slated for Nov. 10 to Nov. 28. Wachovia also will pay a $50 million fine and make no-interest loans available immediately for investors who need liquidity before the buyouts are completed.

[UpInArms]

26. Lights are on, but banks increasingly closed

http://www.reuters.com/article/reutersComService4/idUSLD48129720080815?sp=true

LONDON (Reuters) - The second half of 2008 looks like it will put the "self-reinforcing" into "self-reinforcing credit spiral."

Banks in the U.S. are cutting back savagely on credit to individuals, making mortgages and consumer loans tougher to get and more expensive.

Borrowers in turn are missing more payments, prompting more writedowns and leaving the banks still less to lend.

Securitization, once celebrated as the shadow banking system where lenders could pass on repackaged debt to eager investors, is little more than a memory with the exception of the government-supported Fannie Mae and Freddie Mac markets.

All of these factors are magnifying one another.

And the banks themselves say it is going to get worse.

The Federal Reserve's July Senior Loan Officer survey, one of the best indicators of on-the-ground conditions, showed broad and deep tightening across a range on consumer and housing loans, even in the face of slackening demand.

About 75 percent of domestic lenders tightened their standards for housebuyers, even the best borrowers, in the second quarter. That's a huge majority and up from 60 percent of lenders in the April survey.

And if you want a home equity loan: forget it. About 80 percent of domestic banks have raised their hurdles for making loans.

<snip>

"If you compare households now and the early 1990s ... this time you have the same type of problems but much worse: a bigger increase in energy prices, a bigger housing downturn and a bigger financing crisis," said Andersen at Danske Bank.

...more...

[UpInArms]

28. AP IMPACT: Weak rules cripple appraiser oversight

http://news.yahoo.com/s/ap/20080817/ap_on_bi_ge/mortgage_mess_appraisers_abridged

CHARLOTTE, N.C. - As soaring home prices set the stage for America's great housing meltdown, a critical step in making sure those home sales were a fair deal — the real estate appraisal — was undermined from within.

After the nation's last major banking disaster, Congress set up a system to catch rogue appraisers. Their game: inflating the value of homes at the direction of equally unscrupulous real estate agents and mortgage brokers, whose commissions are determined by the size of the deals.

But a six-month Associated Press investigation found that the system is crippled by both the bumbling of its policemen and their inability to effectively punish those caught committing fraud.

And despite ample evidence appraisers are pressured into inflating home values — sometimes to prices in support of loans that are more than buyers can afford — the federal regulators charged with protecting consumers have thus far made a conscious choice not to act.

"The system is completely broken," Marc Weinberg, the former acting director at the federal agency charged with monitoring the appraisal industry, told the AP before he retired earlier this year. "It's amazing that the system ever worked at all."

...more...

[UpInArms]

29. Inflated appraisal nearly cost family its home

http://news.yahoo.com/s/ap/20080817/ap_on_bi_ge/mortgage_mess_appraisers_one_deal_s_story

HOPE MILLS, N.C. - After 25 years as a doorman on Manhattan's Upper East Side, Carl Petrone was ready to retire from the cold winters and his daily commute.

Petrone and his wife, Marie, wanted a home someplace warm, and found it in North Carolina — a red-brick tri-level on a quiet, tree-lined street. It was bigger than their tiny place in New York and came with the right price.

The home was appraised at $114,500. The real estate agents dropped the price by $6,000 to make the sale. "We thought it was a steal," Marie Petrone remembers.

It was a steal — a steal from the Petrones.

...more...

[UpInArms]

30. Media coverage of the economy lags, study finds

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

NEW YORK - Media coverage of the economic downturn in the U.S. has lagged behind both economic activity and public interest, according to a study being released Monday by a Washington, D.C.-based research group.

The Project for Excellence in Journalism analyzed more than 5,000 economic stories in 2007 and the first half of 2008. The stories, by 48 different news outlets, were delivered by cable news channels, network television, radio, newspapers and the Internet.

The study found that reliance on government data to track the economy is leading to scattershot coverage that, at times, lags months behind actual economic conditions.

<snip>

The study also found that Americans' concern about the economy has far surpassed the media's focus on the topic. The economy has been the number 2 story of 2008 so far — ahead of the war in Iraq. But media coverage of the presidential race has outstripped economic coverage by a five-to-one margin, although the economy has ranked as Americans' top concern.

There are no easy ways to wean journalists from depending on government statistics, Rosenstiel said.

...more...

[UpInArms]

36. Back to school: Shaky economy hits kids

http://hosted.ap.org/dynamic/stories/S/SCHOOLS_HARD_TIMES?SITE=MOCOD&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2008-08-18-07-04-16

WASHINGTON (AP) -- Hard times and higher fuel prices will follow kids back to school this fall.

Children will walk farther to the bus stop, pay more for lunch, study from old textbooks and wear last year's clothes. Field trips? Forget about it.

This year, it could cost nearly twice as much to fuel the yellow buses that rumble to school each morning. If you think it's expensive to fill up a sport utility vehicle, try topping off a tank that is two or even three times as big.

At the same time, costs for air conditioning and heating, cafeteria food and classroom supplies are mounting, all because of the shaky economy. And parents have their own tanks to fill.

The extra costs present a tricky math problem: Where can schools subtract to keep costs under control?

...more...

[Dr.Phool]

38. Have fun kids,

I'm running over to the dog park with The Fudd, before he gets confined to the house for 2 days, and I'll be running back and forth doing last minute hurricane prep today.

Right now, it looks like Fay could miss us. And, she might be a dud, but gotta be ready anyway.

Later.:hi:

[UpInArms]

39. take care and stay safe!

:grouphug:

[Ghost Dog]

61. Stay cool Dr. Phool.

The tropical storm (Delta) that, weirdly, struck the Canary Islands two years ago was quite impressive and damaging enough for us...

[Dr.Phool]

68. I remember that.

Really unusual.

We got hit twice a couple of years ago. Only one did any damage, and it was minor. I've got about another hour of work, then I'll be done.

And a trip to the liquor store. I'd hate to die in a hurricane sober.:evilgrin:

[Hugin]

69. True.

Good luck and cheers.

:beer:

[AnneD]

92. I'll be watching it and thinking about you...

hope you get just a good rain out of it. Like we did here in Houston. Oh...I made a good stop at the liquor store too. Steel your wool brother.:evilgrin:

[radfringe]

41. define rich...

Who's rich? McCain and Obama have very different definitions
To Pastor Rick Warren's question, Obama says someone making more than $250,000. McCain gives a figure of $5 million per year. His campaign says he was joking.
By Greg Miller, Los Angeles Times Staff Writer
August 18, 2008
http://www.latimes.com/news/nationworld/washingtondc/la-na-rich18-2008aug18,0,1063695.story

WASHINGTON -- The rich may be different for John McCain and Barack Obama.

On almost every issue, the two presidential candidates have staked out opposing positions. Their contrasting views on wealth surfaced during their back-to-back appearances in Southern California on Saturday night when each was asked to define "rich."

Obama didn't hesitate. "I would argue that if you are making more than $250,000, then you are in the top 3, 4 percent of this country," he said. "You are doing well."

McCain took a far more discursive approach to answering the question but ultimately settled on a dramatically higher figure: "I think if you're just talking about income, how about $5 million?"

The Arizona Republican quickly added that he was "sure that comment will be distorted," and his campaign said Sunday that he was joking.


(..........funny guy, ha ha ha ................................)

----snip-------

But their positions were likely also driven by their tax policies. The Illinois Democrat has proposed tax hikes on individuals with incomes exceeding $250,000, while the Arizona Republican has declared his intention to extend the tax cuts begun by President Bush and make new cuts to corporate tax rates -- both moves that would benefit the very wealthy. An analysis by the Tax Policy Center has calculated that the middle-income earners would get a $325 tax cut from McCain's proposed changes to the tax code, while the top 20% would have their taxes reduced by $6,500.

The Obama campaign jumped on McCain's definition of rich.

"It should come as no surprise that John McCain believes the cutoff for the rich begins at $5 million," said spokeswoman Jen Psaki. "It may explain why his tax plan gives a $600,000 tax cut to the richest 0.1% of earners."

In responding to Warren's question Saturday, McCain sought to broaden the discussion, saying that "some of the richest people I've known in my life are the most unhappy" and that rich should be defined "by a home, a good job and education and the ability to hand our children a more prosperous and safer world than the one we inherited."


....mmmmm maybe we should have a "happy tax" and a "sad tax break"?
=========

they should run a disclaimer at every mccain event "Sen. McCain doesn't speak for the John McCain Presidency campaign"

[Wednesdays]

45. I can't even begin to understand the logic here

"some of the richest people I've known in my life are the most unhappy"

What in hell is he trying to get at--that being wealthy can make you unhappy? :wtf:

What I think he is driving at is the old adage "money can't buy happiness." If that's so, I assume he and his rich minions wouldn't care a bit if we raised their taxes, right? :crazy:

[UpInArms]

46. works for me - actually, if being rich makes you miserable - having to

give back most of the money - ergo become poor - through taxes should make them ecstatic!

tax the rich and make them happy

:bounce:

[radfringe]

58. YES YES YES! Let's make Exxon-Mobil the happiest corporation on earth

have them send us all checks!! WHEEEEEEEE!!!!! :bounce:

[Dr.Phool]

47. His wife is very rich, and stuck with this fricking idiot.

Yeah, she's probably very unhappy.

[Demeter]

84. She's Only As Stuck As She Wants to Be

Don't cry for Cindy McCain's marriage. Cry for her inability to grow.

[Hannah Bell]

97. obama, mccain & warren = rich

[Pale Blue Dot]

42. Good morning everyone. About the layoff post:

School starts up again with PD on Wednesday and Thursday. I found out yesterday that, due to economics and the realities of city life, my class sizes are increasing. I'm kind of a nervous perfectionist anyway, so when I heard this news I panicked a little. The bottom line in that I'm ending my vacation a day early and I'm heading back to school tomorrow. Because of this, I will no longer be doing the layoff post daily. I am going to try to do a compilation post in Demeter's Weekend Economist each week.

Today looks like it could be a really bad day on the markets. Stay safe, everyone.

[antigop]

50. Good luck, Finnfan. Thanks for your contributions to the SMW. n/t

[DemReadingDU]

52. Thank you Finnfan, good luck at school

We will see you on the weekends!

[SpiralHawk]

53. Thank you, finnfan

For keeping us up to date on an economic reality in the USA, a reality the republicon-owned corporate media has FAILED to keep citizens honestly informed about.

[Dr.Phool]

56. Thanks for all the good work during the summer.

It was a great post every day, even though it was depressing when you realize that these are human lives being destroyed every day.

I've always said that corporations should also have a responsibility to the communities they operate in, instead of just the shareholders. A lot of employees have invested their entire lives in their companies, and are just kicked to the side for a couple more pennies per share.

[Tansy_Gold]

57. Thanks Finnfan, for your posts and . . . .

. . . . for being a teacher.

[Hugin]

62. I'll look forward to it then Finnfan!

Thanks for the outstanding contributions thus far and good luck with this year of schooling. :)

[Demeter]

86. Try to Make It Fun, Finnfan

And if it isn't fun, make it short...see you Saturday!

[ozymandius]

90. Thank you for your mighty contribution Finnfan.

I will look forward to your posts where and when you have time.

:hi:

[Buttercup McToots]

60. Not a dollar rally but a global collapse

Not a dollar rally but a global collapse

http://www.telegraph.co.uk/money/main.jh....

Dollar surge will not stop America feeling the effects of a global crunch
By Ambrose Evans-Pritchard
Last Updated: 11:07pm BST 17/08/2008

Two alerts landed on my desk this weekend from the elite markets team at Goldman Sachs. One was entitled "The Dollar Has Bottomed!". Those betting on an imminent disintegration of American economic and political power may have to wait another cycle. Rival hegemons are falling like ninepins.

The US dollar index hit an all-time low in March. It crept slowly upwards in the early summer before smashing through layers of resistance over the past month.

The surge against sterling, the euro, the Swiss franc and the Australian dollar is one of the most spectacular currency shifts in half a century. "Something fundamental has changed," said the bank. Indeed.

US industry is now super-competitive, if small. Mid East funds are drawing up shopping lists of Wall Street takeover targets. Airbus and Volkswagen are shifting plant to America to escape crushing labour costs.

US exports have risen 22pc over the past year, outstripping Chinese growth. The US non-oil trade deficit has shrunk by two fifths since 2002. It is now running at $300bn a year. This is 2.1pc of GDP.

The other note advised clients to "Take Profit on Globalization Basket", especially on Eastern Europe currencies. Goldman Sachs has quietly dropped its talk of $200 oil. Even Russia's petro-rouble is now deemed suspect.

The twin missives more or less sum up the dramatic change in mood sweeping financial markets since it became evident that the entire bloc of rich OECD countries has succumbed to the delayed effects of the credit crisis.

Japan contracted by 0.6pc in the second quarter, Germany by 0.5pc, France and Italy by 0.3pc. Spain recalled the cabinet last week for an emergency summit. New Zealand and Denmark are in recession. Iceland contracted at a catastrophic 3.7pc in the second quarter.

"The whole decoupling thesis has started to come apart at the seams," said David Bloom, currency chief at HSBC. "Canada is frozen over. We have Arctic conditions in Sweden, and the UK is falling off the white cliffs of Dover."

The UK economy is not my brief, but I see that hedge funds are circulating a report from the US guru Jeremy Grantham predicting a very bad end to Gordon Brown's debt experiment.

"The UK housing event is probably second only to the Japanese 1990 land bubble in the Real Estate Bubble Hall of Fame. UK house prices could easily decline 50pc from the peak, and at that lower level they would still be higher than they were in 1997 as a multiple of income," he said.

"If prices go all the way back to trend, and history says that is extremely likely, then the UK financial system will need some serious bail-outs and the global ripples will be substantial."

For months the exchange markets ignored this impending train crash, just as they ignored the property bust in Europe's Latin Bloc, or the little detail that UBS alone had just lost the equivalent of 8pc of Switzerland's GDP. All they cared about in the currency pits was the interest rate gap: US low, Europe high.

Now the paradigm has flipped. The Fed may have been right after all to slash rates to 2pc. The European Central Bank may have panicked by tightening in July. Note that the elder Swiss National Bank did not do anything so rash.

Bulls now believe America is turning the corner. Financial stocks are up 20pc since early July. Some "monoline" bond insurers have risen 1,200pc in a month as fears of Götterdämmerung give way to sheer intoxicating relief, and a "short-squeeze". Such are bear-trap rallies.

Regrettably, I remain beset by gloom. The US fiscal stimulus package that kept spending afloat in the second quarter is running out fast. There is nothing yet to replace it. The export boom cannot keep adding juice as the global crunch hits. My fear is that the US will tip into a second, deeper leg of the downturn, setting off a wave of savage job cuts. This will start to feel more like a real depression.

The futures market is pricing a 33pc fall in US house prices from peak to trough, based on the Case-Shiller index. Banks have not come close to writing off implied losses on this scale.

Daniel Alpert from Westwood Capital predicts that a mere 28pc fall would alone lead to a $5.4 trillion haircut in US household wealth, and leave lenders nursing $1.25 trillion in losses. So far they have confessed to less than $500bn.

Meredith Whitney, the Oppenheimer's bank Cassandra, predicts a gruesome 40pc fall in prices. If so, expect prime borrowers facing negative equity to start throwing in the towel en masse. "I do not think we are near the end of writedowns. I continue to see capital levels going lower, and stocks going lower," she said.

So no, this painful ordeal is far from over. We are not witnessing a dollar rally so much as a collapse in European and commodity currencies. The race to the bottom has begun in earnest.

[Ghost Dog]

76. "The race to the bottom has begun in earnest." n/t.

[Demeter]

87. What a Little Mary Sunshine He Is

Sadly, I cannot fault his analysis.

[TrogL]

67. 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

2008-07-07 Monday, July 7 0.982898 USD
2008-07-08 Tuesday, July 8 0.979912 USD
2008-07-09 Wednesday, July 9 0.989315 USD
2008-07-10 Thursday, July 10 0.989805 USD
2008-07-11 Friday, July 11 0.990786 USD
2008-07-14 Monday, July 14 0.994036 USD
2008-07-15 Tuesday, July 15 0.998502 USD
2008-07-16 Wednesday, July 16 0.998004 USD
2008-07-17 Thursday, July 17 0.998203 USD
2008-07-18 Friday, July 18 0.994728 USD
2008-07-21 Monday, July 21 0.998104 USD
2008-07-22 Tuesday, July 22 0.991768 USD
2008-07-23 Wednesday, July 23 0.991277 USD
2008-07-24 Thursday, July 24 0.988728 USD
2008-07-25 Friday, July 25 0.983574 USD
2008-07-28 Monday, July 28 0.978474 USD
2008-07-29 Tuesday, July 29 0.974659 USD
2008-07-30 Wednesday, July 30 0.976562 USD
2008-07-31 Thursday, July 31 0.974564 USD
2008-08-01 Friday, August 1 0.975515 USD
2008-08-04 Monday, August 4 0.965717 USD
2008-08-05 Tuesday, August 5 0.959233 USD
2008-08-06 Wednesday, August 6 0.95511 USD
2008-08-07 Thursday, August 7 0.951475 USD
2008-08-08 Friday, August 8 0.936593 USD
2008-08-11 Monday, August 11 0.936944 USD
2008-08-12 Tuesday, August 12 0.939761 USD
2008-08-13 Wednesday, August 13 0.938262 USD
2008-08-14 Thursday, August 14 0.941531 USD
2008-08-15 Friday, August 15 0.942596 USD

Current values

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

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9438 0.9443 0.9420 0.9430 -0.0010 -0.11% 
CD.U08 Sep 2008 0.9453 0.9453 0.9410 0.9410 -0.0024 -0.25% 
CD.Z08 Dec 2008 0.9400 0.9400 0.9386 0.9429 +0.0032 +0.34% 
CD.H09 Mar 2009 0.9519 0.9519 0.9519 0.9433 +0.0032 +0.34% 
CD.M09 Jun 2009 0.9880 0.9880 0.9880 0.9440 +0.0032 +0.34% 
CD.U09 Sep 2009 0.9540 0.9540 0.9540 0.9443 +0.0028 +0.30% 
CD.Z09 Dec 2009 0.9845 0.9845 0.9845 0.9446 +0.0024 +0.25%  

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

Market          Open    High    Low     Last    Change   Pct 
AUSTRALIAN $/CANADIAN $ (CME:ACD)
ACD.U08 Sep 2008 0.9147 0.9147 0.9147 0.9147 -0.0094 -1.03%  
EURO/BRITISH POUND (NYBOT:GB)
GB.U08.E Sep 2008 (E) 0.78895 0.78905 0.78840 0.78870 +0.00005 +0.01%    
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.U08.E Sep 2008 (E) 162.09 162.09 161.65 161.74 +0.17 +0.11%     

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

The September Canadian Dollar was steady to slightly higher overnight as it extends last week's trading range. If September renews this month's decline, last August's low crossing at 93.00 then the 75% retracement level of the 2007-2008 rally crossing at .9279 are the next downside targets. Closes above the 10-day moving average crossing at 94.43 are needed to confirm that a short-term top has been posted. First resistance is the 10-day moving average crossing at 94.43. Second resistance is the 20-day moving average crossing at 96.15. First support is last Tuesday's low crossing at 93.14. Second support is last August's low crossing at 93.00.

Analysis

It's my busy week at work but I thought I'd squeeze one in.

The morning drive-in economics report noted nothing really interesting going on except a bank merger. The loonie's making a slow recovery back towards parity. The Canadian housing market is slacking off. A friend is looking to sell/buy elsewhere and is advised by another friend who is realtor that a tit-for-tat deal might work for him, otherwise hold off.

[TalkingDog]

74. Penny Pinching on a Governmental Scale

And other vaguely unsettling news (I'm with Demeter here...the air is strange today) :

4 day work week instituted for Wayne Co. NC. Mecklenburg Co. (Charlotte) considers same:
http://www.news-record.com/content/2008/08/06/article/four_day_work_week_could_show_promise_0

"Softening" (emphasis mine) Economy May Ease Hiring Crunch for Schools:
http://www.edweek.org/login.html?source=http%3A%2F%2Fwww.google.com%2Fsearch%3Fq%3DAll%2Bmecklenburg%2Bbus%2Bdriver%2Bpositions%2Bfilled%26ie%3Dutf-8%26oe%3Dutf-8%26aq%3Dt%26rls%3Dorg.mozilla%3Aen-US%3Aofficial%26client%3Dfirefox-a&destination=http%3A%2F%2Fwww.edweek.org%2Few%2Farticles%2F2001%2F10%2F03%2F05recession.h21.html&levelId=2100&baddebt=false

26% increase in Domestic Violence homicides and a 40% increase in murder/suicides since since 2003 in NC.

Statistics on building permits issued through June 08: (goes to article on Catawba -right next door, but has a link to national statistics)
http://catawbavalleyrealestateblog.wordpress.com/2008/08/06/nahb-releases-building-permit-statistics/


Hope everyone is well with the run up to the new school year.

Those in the path of the storm take care. We'll hope it comes our way with some much needed rain.


edited to add: Talking to a friend, a local cobbler who said he could tell the second the "stimulus" checks ran out. For the past 3 weeks he has been dead. On his worst day in that time he took in 60.00 all day. Luckily he owns his building, but 60.00 won't even pay his help for one days work. His margins have always been close, but he sinking into negative territory quickly. Other small business owners around town are reporting much the same.

Again, my best to all.

TD

[antigop]

75. Obama tilt towards Rubinomics stirs warning from organized labor

http://www.bloomberg.com/apps/news?pid=20601070&sid=aJ.pKsYB_DfU&refer=home

AFL-CIO Secretary-Treasurer Richard Trumka delivers a slap at former Treasury Secretary Robert Rubin in a slide show exhorting union members to back Democrat Barack Obama for president.

Blaming unfettered global trade and inadequate government regulation for lost manufacturing jobs and a staggering economy, Trumka's presentation cautions that ``it will do us little good if, when the next Democrat moves into the White House, Wall Street takes command of our country's economic policy.''

Trumka leaves no doubt that the rebuke is aimed at Rubin, Wall Street's most prominent Democrat. It's ``hard to tell the difference'' between Rubin and Republican Treasury Secretary Henry Paulson, the presentation says. Trumka's critique reflects the concern among organized-labor officials that Rubin and like- minded Democrats may win the behind-the-scenes battle to shape Obama's economic thinking.

``I'm hearing Rubin's name more and more associated with the campaign's economic policy,'' says James Torrey, a top Obama fundraiser and chief executive officer of New York-based Torrey Associates LLC, a hedge-fund investor.

Rubin, who became chairman of Citigroup Inc.'s executive committee after leaving President Bill Clinton's Cabinet, represents policy priorities that would favor free trade and more emphasis on deficit-cutting budget discipline if Obama beats Republican John McCain on Nov. 4. Meanwhile, Trumka and his boss, AFL-CIO President John Sweeney, are pushing trade policies that would protect U.S. industries, universal health care, and spending on highway construction and other projects that would create union jobs.

[Dr.Phool]

77. I've been pretty wary of a lot of Obama'a advisors.

Rubin is a pox on economic policy, along with all of Obama's buddies from the Czechago School.

I'm not to crazy about his foreign policy team either, with (I never could spell this) Zbigniew Brzinski leading the way.

[Dr.Phool]

78. 'Liar loans' threaten to prolong mortgage mess.

Under the heading of "Hello".

'Liar loans' threaten to prolong mortgage mess
Mortgages allowed without proof of pay, assets default in record numbers
Tom Mihalek / AP

updated 5 minutes ago

In the mortgage industry, they are called "liar loans" — mortgages approved without requiring proof of the borrower's income or assets. The worst of them earn the nickname "ninja loans," short for "no income, no job, and (no) assets."

The nation's struggling housing market, already awash in subprime foreclosures, is now getting hit with a second wave of losses as homeowners with liar loans default in record numbers. In some parts of the country, the loans are threatening to drag out the mortgage crisis for another two years.

"Those loans are going to perform very badly," said Thomas Lawler, a Virginia housing economist. "They're heavily concentrated in states where home prices are plummeting" such as California, Florida, Nevada and Arizona.

http://www.msnbc.msn.com/id/26270434/

(snip)


Seems I've heard this somewhere before.

[Tandalayo_Scheisskopf]

80. Kwick Knews fron the Kommodity Kasino:

Sorry I am so busy and forget to post.


PETROLEUM ($/bbl)
PRICE* CHANGE % CHANGE TIME
Nymex Crude Future 113.18 -.59 -.52 14:38
Dated Brent Spot 110.02 -.69 -.62 15:08
WTI Cushing Spot 113.62 -.15 -.13 13:57


PETROLEUM (¢/gal)
PRICE* CHANGE % CHANGE TIME
Nymex Heating Oil Future 309.38 -2.53 -.81 14:38
Nymex RBOB Gasoline Future 282.38 -3.64 -1.27 14:38


NATURAL GAS ($/MMBtu)
PRICE* CHANGE % CHANGE TIME
Nymex Henry Hub Future 7.88 -.21 -2.57 14:38
Henry Hub Spot 7.82 -.33 -4.05 08/15
New York City Gate Spot 8.29 -.29 -3.38 08/15


ELECTRICITY ($/megawatt hour)
PRICE* CHANGE % CHANGE TIME
Mid-Columbia, firm on-peak, spot 77.41 .49 .64 08/15
Palo Verde, firm on-peak, spot 79.18 -1.29 -1.60 08/15
Bloomberg, firm on-peak, day ahead spot/West Coast 80.81 -2.99 -3.57 08/15

[UpInArms]

85. end o' the day stuff

Dow 11,479.39 180.51 (1.55%)
Nasdaq 2,416.98 35.54 (1.45%)
S&P 500 1,278.60 19.60 (1.51%)
10-Yr Bond 3.816% 0.036

NYSE Volume 3,878,763,500
Nasdaq Volume 1,692,591,625

4:30 pm : News flow was relatively light Monday, but participants still found an excuse to take money off the table. Their selling efforts pushed the major indices substantially lower; each finished a bit above their session lows.

The early morning mood had been generally upbeat, but as oil prices reversed declines, stocks were sent lower. Stocks then stayed there for the rest of the session as focus returned to the troubles of government-sponsored enterprises Fannie Mae (FNM 6.15, -1.76) and Freddie Mac (FRE 4.39, -1.46), even though crude settled lower below the $113 per barrel mark. The two were spotlighted in a weekend Barron's article that suggests the Treasury may need to recapitalize the duo sooner rather than later. Trading volume climbed in the two, but the increase was not reflected in the broader market.

The lack of volume in the broader market suggests there is no real fear in the market for this matter. Instead, it provided an excuse for participants to take profits. Despite the session's decline the stock market is still up 6.5% and the financial sector is up 22% since the July 15 low. The financial sector finished the session 3.6% lower.

Other news stories were given secondary status. In the tech sector (-1.3%), video game maker Electronic Arts (ERTS 47.76, -0.48) is letting its offer for Take-Two Interactive (TTWO 23.75, -1.09) expire tonight. However, Electronic Arts will join in Take-Two's review of strategic alternatives.

Home improvement retailer Lowe's (LOW 24.54, +0.04) posted better-than-expected earnings per share results for its latest quarter, but issued a mixed outlook.

Meanwhile, mining outfit BHP Billiton (BHP 65.48, +0.26) posted its sixth record full-year profit and offered an upbeat outlook, according to an article in this morning's edition of The Wall Street Journal.

Still, without any clear leader and selling abounding, only one sector was able to finish the session with any sort of gain: the defensive-orientated utilities sector (+0.1%). Utilities hit a 52-week low earlier this month and are up little more than 2% since. DJ30 -180.51 NASDAQ -35.54 NQ100 -1.3% R2K -1.5% SP400 -1.3% SP500 -19.60 NASDAQ Adv/Vol/Dec 880/1.68 bln/1935 NYSE Adv/Vol/Dec 888/984 mln/2228

3:35 pm : The major indices have turned upward slightly as the closing bell approaches. Although, losses remain heavy as seven of the economic sectors sport losses in excess of 1%.

Traders were following oil prices earlier in the session, which took the indices into the red. But profit-takers soon piled on to exacerbate losses.

Crude shed roughly 0.5% this session to trade near $113 per barrel.DJ30 -199.16 NASDAQ -40.94 SP500 -20.32 NASDAQ Adv/Vol/Dec 801/1.38 bln/1994 NYSE Adv/Vol/Dec 832/715 mln/2286

3:05 pm : Losses in the utility sector have eased. It is now trading at the unchanged mark. The Dow Jones Utility Average, however, is trading with a gain of 0.3%, thanks partly to strength in companies like Consolidated Edison (ED 41.25, +0.49) that hold regulated utilities.

Though stocks remain out of favor, Treasuries are not garnering considerable attention. The benchmark 10-year Note is only up 7 ticks despite heavy losses in stocks. DJ30 -183.03 NASDAQ -40.88 SP500 -19.22 NASDAQ Adv/Vol/Dec 782/1.21 bln/2003 NYSE Adv/Vol/Dec 844/634 mln/2245

[Demeter]

88. Well, Whatever It Is, It Hasn't Hit the Wires Yet

[DemReadingDU]

89. Were you expecting 'IT' today?

Whatever It Is

:eyes:

[Demeter]

91. All I Get Is a Feeling, an Anticipation

It hasn't anything more specific, unless perhaps a direction or size. And it hasn't abated yet.

[DemReadingDU]

93. Nikkei down -346.12 (-2.63%), HangSeng down -254.92 (-1.20%)

doesn't look good overseas


edit to add link
http://newsvote.bbc.co.uk/2/shared/fds/hi/business/market_data/stockmarket/default.stm

[Dr.Phool]

96. Hang Seng now down 93 around midnight. Nikkei still down 346.

:wtf:

[PassingFair]

94. My "spidey sense" is tingling, too....

something wicked this way comes, but I
don't know what or where.

[Dr.Phool]

95. Cue Phil Collins.

I can feel it coming in the air tonight, hold on.