STOCK MARKET WATCH, Thursday February 7

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday February 7, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 349
DAYS SINCE DEMOCRACY DIED (12/12/00) 2573 DAYS
WHERE'S OSAMA BIN-LADEN? 2299 DAYS
DAYS SINCE ENRON COLLAPSE = 2590
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

---

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON February 6, 2008

Dow... 12,200.10 -65.03 (-0.53%)
Nasdaq... 2,278.75 -30.82 (-1.33%)
S&P 500... 1,326.45 -10.19 (-0.76%)
Gold future... 905.00 +14.70 (+1.62%)
30-Year Bond 4.37% +0.03 (+0.74%)
10-Yr Bond... 3.61% +0.03 (+0.75%)






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: Liquidity is a Coward

BY CHRIS PUPLAVA

Just remember, liquidity is ultimately a coward. There's always too much when it's least needed and it's nowhere to be found when needed the most. At least that's what financial market and economic history has taught us repeatedly.

Brian Pretti
ContraryInvestor.com, Bail Bonds, 06/2007

The above statement perfectly describes the current situation in the economy. Liquidity is certainly needed as the economy is starting to decelerate in earnest as evidenced by yesterday’s Institute for Supply Management (ISM) non-manufacturing report. The ISM Non-Manufacturing Index plummeted in January to 41.9, a sharp drop from December’s 54.4 reading. Numbers below 50 indicate a contracting economy and January’s reading was the lowest reading since October 2001, which was near the end of the last recession. Of note in the figure below is that the ISM Non-Manufacturing Index fell below 50 at the start the last recession and didn’t break above 50 until near the end of the recession, making January’s plunge another solid argument for the case that the U.S. economy is currently in a recession.
.....

The economy is clearly beginning to break at the seams, this at the same time banks are tightening their belts to both consumer and corporations alike. Also released this week was the Federal Reserve Board’s Senior Loan Officer Opinion Survey. The report showed tightening of lending standards across the board from consumer to corporate loans. There was a sizable tightening in standards seen in both large and small firms for commercial and industrial (C&I) loans in the first quarter, a significant shift in lending where banks were loosening credit standards 3-5 quarters ago. The rising of lending standards to small and large businesses is leading to a drop off in demand as loans are more difficult to come by.
.....

So, despite the Federal Reserve lowering interest rates and the White House bringing fiscal stimulus of roughly 1% GDP, don’t expect a significant recovery in the second half of the year as the consensus does until banks start lowering credit standards to act as the transmission vehicle of Fed liquidity instead of a bottleneck. This isn’t likely to happen until bank capital ratios improve, which in turn will only stop bleeding when housing stabilizes and mortgage losses subside.

Driving this point home, adjustable-rate mortgages are still in the peak resetting period and mortgage foreclosures and defaults are likely to continue to rise. There is also a lag between default rates and mortgage security losses, which means that banks aren’t likely to lower lending standards any time soon. The take home point is that financial pundits and economist forecasts are far too optimistic with a consensus belief in the second half rebound theory. This is not likely discounted by the markets that expect the light at the end of the tunnel in the near future. I don’t have to mention either how markets respond to disappointment, meaning we could be in store for more market weakness than the housing-bottom/market-bottom calling consensus on Wall Street expects.

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

[Demeter]

19. So We Are Supposed to Throw Good Money After Bad?

What kind of sheep do they take us for?

People are saving that money for food, shelter and health care. The corporations can dig into their own deep pockets or go under. They aren't paying anybody anyway except their buddies.

[Warpy]

76. All that "liquidity" got concentrated at the top, fellas

and the top doesn't do anything with it but pretty much let it sit where it already is. Oh, they've taken enough floaters on your hedge funds to keep your game going for an extra couple of years, but they've picked up their chips and the only way you're going to pry any loose is to change the damn tax laws that allowed them to grab 'em all in the first place.

If you think the rest of us are going into your funny money game at this stage, you'd better seek psychiatric help.

Signed, one of the suckers at the bottom.

[Ghost Dog]

2. U.S. bank woes are "poetic justice": Buffett

TORONTO (Reuters) - The woes in the U.S. financial sector are "poetic justice" for bankers who designed and sold complex investments that have since gone sour, billionaire investor Warren Buffett said on Wednesday.

The head of the Berkshire Hathaway Inc (BRKa.N) (BRKb.N) group of companies also played down worries about a credit crunch by saying that recent interest rate cuts mean low-cost funds are readily available.

But he warned that the U.S. dollar will continue to slide unless the country can rein in its yawning trade deficit -- the "biggest factor" behind the decline. Still, he said, the U.S. economy will "do very well over time."

Buffett, one of the world's wealthiest people, appeared to see irony in the fact that many of the banks who marketed complex investments which have now crashed are bearing much of the fallout.

"It's sort of a little poetic justice, in that the people that brewed this toxic Kool-Aid found themselves drinking a lot of it in the end," he said.

/... http://news.yahoo.com/s/nm/20080207/bs_nm/buffett_economy_dc;_ylt=Ajz_E.BYsV9C3Hg0HOjaFZe573QA

[Hugin]

39. Dang, not only a heck of a singer with 'Margaritaville' he's also a poet...

This Warren Buffett is truly multifaceted! :silly:

[Demeter]

45. You REALLY Ought to Be BUFFETTED for That

It's not even noon, for heaven's sake.

[Hugin]

49. It's always noon somewhere...

:crazy:


( :rofl: )

[Roland99]

52. Why do I suddenly have the craving for a cheeseburger?

[radfringe]

54. cheezburger?

[Hugin]

56. I'll have a cheeseburger, hold the cheese...

Oh, but, that would be a burger. :blush:

[DemReadingDU]

62. I'll have a cheeseburger, hold the meat

hm, cheese sandwich!

:P

[radfringe]

67. I'll trade you

your burger for my cheese... :)

[Demeter]

75. ON Second Thought, Pass the Margaritas Over

It looks like it's going to be that kind of day.

[AnneD]

78. Warren Buffett....

is living proof that technical trader lose in the end. In the investment world Warren is a tortoise and the rest of WS are hares.

Buffett's strategies grow businesses and the economy-WS CEO's and traders doesn't. Toxic Kool-aid indeed. Warren is a giant among pygmies.

[Ghost Dog]

3. India's GDP Growth May Slow for First Time in 3 Years

Feb. 7 (Bloomberg) -- India's government expects economic growth to slow for the first time in three years, as higher interest rates cool consumer demand for homes, motorcycles and electric appliances.

Asia's third-largest economy is forecast to expand 8.7 percent in the 12 months to March 31, the weakest pace since 2005, the statistics office said in a statement in New Delhi today. Growth was 9.6 percent last financial year.

The pace of expansion will still be the quickest after China among the world's major economies. And it may remain so even if the U.S. suffers a recession as India's growth is being driven by spending by a middle class of about 50 million people, equal to the combined population of Singapore, Hong Kong, Malaysia and Australia.

``This is not a collapse,'' said Sonal Varma, a Mumbai- based-economist at Lehman Brothers Inc. ``Growth is slowing because of higher real interest rates. U.S. recession or not, the structural drivers of India's rising potential growth remains intact.''

The government's growth estimate beats the central bank's 8.5 percent forecast and is almost in line with the average 8.8 percent annual growth in the previous four years, the best expansion since the country's independence in 1947.

Reserve Bank of India Governor Yaga Venugopal Reddy has raised interest rates nine times since October 2004 and ordered banks to set aside more money as reserves five times since December 2006 to contain inflation stoked by rapid consumer demand, high oil and food prices. The central bank has also allowed the rupee to strengthen to near a decade-high to make imports cheaper.

Rates on Hold

Six of nine economists surveyed by Bloomberg News last week said Reddy will maintain its repurchase rate at 7.75 percent, the highest in six years, in the next monetary policy statement on April 29, as inflation still doesn't reflect last year's 57 percent increase in crude oil costs.

Inflation, currently at a five-month high of 3.93 percent, may also accelerate on increased money supply caused by capital flows from overseas investors, seeking higher returns in India, where growth is almost three times that in the U.S., Europe and Japan. Only China among economies of more than $500 billion grew faster than India -- at 11.2 percent pace last quarter.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=avWDa7FoZjJQ&refer=asia

[Ghost Dog]

15. Japan's Stocks Rise, Reversing Losses, Led by Mobile Operators

Feb. 7 (Bloomberg) -- Japanese stocks climbed, reversing morning losses, after Softbank Corp. led a rally by mobile-phone operators and Merrill Lynch & Co. recommended shipping stocks.

Softbank, Japan's fastest growing mobile carrier, and KDDI Corp. snapped two days of losses after they added subscribers last month. Nippon Yusen K.K. led shipping companies higher after Merrill Lynch raised it to ``buy.'' Tamron Co. soared, leading a gain by camera makers, after reporting rising profit.

The Nikkei 225 Stock Average gained 107.91, or 0.8 percent, to close at 13,207.15 in Tokyo. The broader Topix index climbed 6.67, or 0.5 percent, to 1,305.08. The gauge fell by as much as 1.4 percent earlier as lower earnings forecasts at Nisshin Oillio Group Ltd. and other companies dragged on sentiment.

``Investors are looking favorably at companies with positive news flow, such as Softbank and KDDI,'' said Hiroaki Osakabe, who helps oversee $365 million at Chiba-Gin Asset Management Co. in Tokyo. ``Positive earnings from Tamron and Nikon relieved concern about the outlook for precision machinery makers.''

Stocks also rose after Bank of Japan Deputy Governor Kazumasa Iwata said household spending is stronger than consumer confidence reports indicate. The cycle of higher profit feeding into wages and spending remains intact, Iwata said.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=aW5Tgth_i13o&refer=asia

[Ghost Dog]

16. BOJ's Iwata: Markets have yet to return to normal

KOCHI, Japan, Feb 7 (Reuters) - Bank of Japan Deputy Governor Kazumasa Iwata said on Thursday that world financial markets have yet to return to normal from the turmoil that began in the middle of last year.

Japanese economic growth is threatened by uncertainty about the world economy, he said, but is still likely to pick up from recent softness in the next fiscal year starting in April.

"The biggest uncertainty the world economy is facing is that the turmoil in international financial markets has not calmed down," Iwata said in a speech to business leaders in Kochi, western Japan.

"If Japanese exports slow sharply due to an increased U.S. recession risk and a slowdown in the world economy, the return to potential growth could be delayed," he said.

/... http://www.reuters.com/article/marketsNews/idINT23408420080207?rpc=44

[ozymandius]

4. Today's Reports

8:30 AM Initial Claims 02/02
Briefing Forecast 350K
Market Expects 340K
Prior 375K

10:00 AM Pending Home Sales Dec
Briefing Forecast NA
Market Expects NA
Prior -2.6%

3:00 PM Consumer Credit Dec
Briefing Forecast $12.0B
Market Expects $8.0B
Prior $15.4B

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

[UpInArms]

24. Initial Claims in @ 356,000 - last wk rev'd up 1k

11. U.S. 4-wk. avg. continuing jobless claims rises to 2.73 mln
8:30 AM ET, Feb 07, 2008 - 8 minutes ago

12. U.S. continuing jobless claims up 75,000 to 2.78 million
8:30 AM ET, Feb 07, 2008 - 8 minutes ago

13. U.S. 4-wk. avg. initial jobless claims up 8,500 to 335,000
8:30 AM ET, Feb 07, 2008 - 8 minutes ago

14. U.S. weekly initial jobless claims fall 22,000 to 356,000
8:30 AM ET, Feb 07, 2008 - 8 minutes ago

[UpInArms]

73. U.S. Dec. pending home sales index down 1.5%: NAR

20. U.S. Dec. pending home sales index down 1.5%: NAR
10:01 AM ET, Feb 07, 2008 - 2 hours ago

[UpInArms]

92. U.S. Dec consumer credit up $4.5 bln or 2.1% rate - last report - 15.4 bln

04. U.S. consumer credit up 5.5% in '07 vs 4.5% '06
3:00 PM ET, Feb 07, 2008 - 54 minutes ago

05. U.S. Dec consumer credit up $4.5 bln or 2.1% rate
3:00 PM ET, Feb 07, 2008 - 54 minutes ago

[ozymandius]

5. Oil prices fall below $87 a barrel

BANGKOK, Thailand - Oil prices fell Thursday in Asia, extending an overnight decline of more than $1 a barrel after the U.S. government reported unexpectedly large jumps in crude oil and gasoline inventories and a surprise increase in stocks of heating oil.

Coming amid anxiety about the U.S. economy and concerns that demand for oil and gasoline is falling, the inventory report reinforced a growing view that oil and petroleum product supplies are adequate.

Light, sweet crude for March delivery fell 15 cents to $86.99 a barrel in Asian electronic trading on the New York Mercantile Exchange by midmorning in Singapore. The contract fell $1.27 to settle at $87.14 a barrel in Wednesday's floor session.

In its weekly inventory report, the U.S. Energy Department's Energy Information Administration said crude oil inventories jumped 7 million barrels last week, nearly triple the 2.6 million barrel increase that analysts surveyed by Dow Jones Newswires had expected.

Gasoline stocks grew 3.6 million barrels last week, double the 1.8 million barrel estimate. Inventories of distillates, which include heating oil and diesel fuel, rose 100,000 barrels, countering analyst expectations that supplies would fall 1.8 million barrels.

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

[ozymandius]

6. BP Misses Estimates and Plans More Job Cuts

LONDON — BP, the British oil giant, announced on Tuesday that it would cut an additional 5,000 jobs by the middle of next year, part of a plan by the chief executive, Anthony B. Hayward, to slim management and make the company more efficient.

The company also announced a fourth-quarter profit that missed analyst estimates, but said it would raise its dividend 31 percent, citing an “increasingly robust” outlook.

Profit in the last three months of 2007 rose 53 percent, to $4.4 billion, from $2.88 billion, in the period a year earlier. Excluding gains or losses from holding inventories or one-time items, profit was $4 billion, which was about 10 percent less than analysts expected.
.....

BP said most of the additional job cuts would be at major corporate offices, like the London headquarters. The cuts will come on top of 9,500 jobs that are moving off BP’s payroll as part of a plan announced in November to sell gasoline stations in the United States. Combined, the job cuts represent about 15 percent of BP’s work force.

http://www.nytimes.com/2008/02/06/business/worldbusiness/06oil.html?_r=1&ref=todayspaper&oref=slogin

[Roland99]

13. BP mgmt job cuts; Macys mgmt job cuts...

hmmmmm

[spotbird]

12. $1.50 gas would provide economic

stimulus.

[Demeter]

20. Not As Much As Extended Unemployment and Green Govt. Jobs

Until the jobs issue is addressed and the universal health care is single payer, things aren't going to get better, but steadily worse.

[ozymandius]

7. D.R. Horton swings to 1Q loss on charges

FORT WORTH, Texas - D.R. Horton Inc., the nation's largest homebuilder, said Thursday it swung to a loss in its fiscal first quarter, due to hefty charges to write off inventory and land values as the housing slump continues to worsen.

Losses for the quarter ended Dec. 31 totaled $128.8 million, or 41 cents per share, compared with profit of $109.7 million, or 35 cents per share, a year ago. The 2008 quarter includes $245.5 million in pretax charges to write down inventory and the value of land deposits.

Revenue plunged to $1.71 billion from $2.8 billion a year ago. The builder closed on 6,549 homes, down sharply from 10,202 in the 2007 period.

http://news.yahoo.com/s/ap/20080207/ap_on_bi_ge/earns_d_r__horton

[ozymandius]

8. US stocks head for lower open

NEW YORK - Stocks were poised to open lower Thursday as investors, already concerned about technology spending after the Internet networking supplier Cisco Systems' dreary outlook, awaited sales reports from the nation's major retailers.

Late Wednesday, Cisco Systems Inc. reported quarterly results that met analysts' expectations but issued a 10 percent sales growth forecast for its current quarter that was well below the 15 percent that Wall Street had projected. Cisco shares sank 8 percent in after-hours trading.

After Macy's Inc. reported Wednesday that sales at stores open for at least a year, known as same-store sales, fell a bleak 7.1 percent, investors are treading cautiously ahead of Thursday's batch of retail sales figures.

In addition to retail reports, investors are uneasy ahead of Thursday's economic data, which include readings on pending sales of existing homes, weekly jobless claims and consumer credit.

http://news.yahoo.com/s/ap/20080207/ap_on_bi_st_ma_re/wall_street

[ozymandius]

9. Republicans join to block stimulus bill

WASHINGTON - The fate of $600-$1,200 rebate checks for more than 100 million Americans is in limbo after Senate Republicans blocked a bid by Democrats to add $44 billion in help for the elderly, disabled veterans, the unemployed and businesses to the House-passed economic aid package.

GOP senators banded together Wednesday to thwart the $205 billion plan, leaving Democrats with a difficult choice either to quickly accept a House bill they have said is inadequate or risk being blamed for delaying a measure designed as a swift shot in the arm for the lagging economy.

The tally was 58-41 to end debate on the Senate measure, just short of the 60 votes Democrats would have needed to scale procedural hurdles and move the bill to a final vote. In a suspenseful showdown vote that capped days of partisan infighting and procedural jockeying, eight Republicans — four of them up for re-election this year — joined Democrats to back the plan, bucking GOP leaders and President Bush, who objected to the costly add-ons.

......

Republican leaders objected to add-ons such as a $14.5 billion unemployment extension for those whose benefits have run out, $1 billion in heating aid for the poor and tax breaks for renewable energy producers and coal companies.

http://news.yahoo.com/s/ap/20080207/ap_on_re_us/economy_stimulus_29

[Mojorabbit]

22. tax breaks for coal companies?

where did that come from?

[ozymandius]

10. "Euros Accepted" signs pop up in New York City

NEW YORK (Reuters) - In the latest example that the U.S. dollar just ain't what it used to be, some shops in New York City have begun accepting euros and other foreign currency as payment for merchandise.

"We had decided that money is money and we'll take it and just do the exchange whenever we can with our bank," Robert Chu, owner of East Village Wines, told Reuters television.

The increasingly weak U.S. dollar, once considered the king among currencies, has brought waves of European tourists to New York with money to burn and looking to take advantage of hugely favorable exchange rates.
.....

While shops in many U.S. towns on the Canadian border have long accepted Canadian currency and some stores on the Texas-Mexico border take pesos, the acceptance of foreign money in Manhattan was unheard of until recently.

http://news.yahoo.com/s/nm/20080206/us_nm/newyork_euros_dc

[ozymandius]

11. Deutsche Bank averts further subprime hit

FRANKFURT, Germany (AP) -- Deutsche Bank AG said Thursday that its fourth-quarter net profit slipped 48% from last year, but reported no new subprime-related writedowns in the final three months of the year, setting itself apart from other large banks that have reported otherwise.

Last fall the bank said its writedowns related to the subprime quagmire in the third quarter that has ensnared other banks totaled €2.2 billion, but Chief Executive Josef Ackermann said that was not the case in the final three months.

"In the fourth quarter, we again demonstrated the quality of our risk management. We had no net write-downs related to sub-prime, CDO or RMBS exposures," he said. "Those trading businesses in which we reported losses in the third quarter produced a positive result in the fourth quarter."

http://money.cnn.com/2008/02/07/news/international/deutsche_bank.ap/index.htm

[UpInArms]

14. dollar watch

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

Last trade 76.329 Change +0.200 (+0.26%)

When Will the Dollar Rally End?

http://www.dailyfx.com/story/bio1/When_Will_the_Dollar_Rally_1202336938856.html

Stocks are melting down, US economic data is weak and yet the dollar continues to rally. Yesterday we talked about how it has been a long time since we have seen a broad based dollar rally and today the mixed performance of the US dollar is much closer to the price action that we have grown accustomed to. The dollar extended its strength against the Euro, British pound and Australian dollars, but lost ground to the Japanese Yen, New Zealand and Canadian dollars. With the only reason for the dollar’s rally being risk aversion, many traders are wondering when the dollar rally will end. Our answer is, possibly tomorrow when the Bank of England and the European Central Bank announces their interest rate decisions. With one expected to cut interest rates and the other leaving it unchanged, the Federal Reserve rampage to lower interest rates could do the dollar in. Interestingly enough, today’s comments from Fed officials touched on a tone of hawkishness. Both Fed Presidents Lacker and Plosser said that even though the US economy could worsen and consumer spending should weaken further in 2008, they are worried about inflation. Oil prices continued to slip but platinum and gold prices are rallying. Productivity was stronger than expected in the fourth quarter, but labor costs growth was muted. This indicates that workers are growing more productive simply because companies are cutting hours. Pending home sales, consumer credit and jobless claims are due for release tomorrow. The housing market remains a big cause for concern and home owners are resorting to selling their property in the more creative ways such as participating in online auctions. Jobless claims, which we usually pay less attention to will be a number to watch as well because last week, claims rose by the largest amount since Hurricane Katrina. If they do not retrace, then we could be looking forward to another negative non-farm payrolls report for the month of February.

...more...

Pound Drops As BoE Cuts and Suggests More Cuts in Queue

http://www.dailyfx.com/story/bio2/Pound_Drops_As_BoE_Cuts_1202388314419.html

As expected the Bank of England cut its short term rates by 25bp to 5.25% but the tone of is post announcement statement suggested that it may ease further prompting traders to continue selling sterling after the news release. The BoE stated that “The Committee needs to balance the risk that a sharp slowing in activity pulls inflation below the target in the medium term against the risk that elevated inflation expectations keep inflation above target.”

It was perhaps the specific wording of “sharp slowing in activity” that elicited the most concern from the market as it suggested that the UK central bank was beginning to acknowledge the seriousness of the deceleration in the country’ economy. Tonight’s Manufacturing and Industrial Production data did not help matters as it registered yet another contraction, declining for the third month out of four.

The BoE paid lip service to inflationary pressures and even suggested that a lower pound may lead to higher import prices, but the overall message of the communiqué clearly indicated that the MPC’s policy focus was shifting from price pressures to concerns about future growth and as a result traders sold cable on the assumption that more cuts will be coming in the near term.

MPC grudging acceptance of the global economic slowdown should serve as an interesting contrast to ECB’s unrelenting focus on price pressures. ECB chief Jean Claude Trichet has been unapologetically hawkish, but given the fact that the latest data from the EZ is beginning to signal similar type of slowdown dynamics, traders will want to see if Mr. Trichet may begin to temper his views.

The ECB is not prone to sudden changes and therefore it is probable that Mr. Trichet may stick to his well worn script. We have long argued that ““For the time being the improving labor markets allow Mr. Trichet and company to remain unapologetically hawkish, but should employment begin to slow or worse contract, the pressure on the ECB to ease will become enormous.” The question ahead is whether the ECB it its intransigence may be too late to act.

...more...

[UpInArms]

17. Realignment at Macy's to Eliminate 2,300 Jobs

http://www.nytimes.com/2008/02/07/business/07macys.html?ex=1360040400&en=86371da02c77aaef&ei=5088&partner=rssnyt&emc=rss

Macy’s Inc. said on Wednesday that sales at its department stores open at least one fiscal year fell 7.1 percent in January, and announced plans to cut costs that include eliminating roughly 2,300 positions.

Total sales for the four weeks that ended Feb. 2 fell 28.4 percent, to $1.28 billion. A retail calendar change resulted in one fewer week of sales in the month.

On average, analysts expected a drop of 5.7 percent in same-store sales, according to Reuters Estimates.

The company, which is the parent of Macy’s and Bloomingdale’s, said it would consolidate its American operations to end up with fewer divisions. Its Macy’s North headquarters in Minneapolis, for example, will be integrated with its Macy’s East operations in New York.

The retailer has 188,000 employees. In a statement, the company said the consolidation, expected to be completed in the second quarter, would affect about 950 positions at the Minneapolis offices, 850 positions at the Macy’s Midwest offices in St. Louis and 750 positions at the Macy’s Northwest offices in Seattle.

...more...

(edited to take out that stupid ’ from the title line)

okay - edited again because the edit shows it as an apostrophe when in fact it looked like this Macy#8217;s)

[radfringe]

18. somewhat related to the cartoon....

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x2828683

[Demeter]

21. Good Meme!

[antigop]

38. I like it.... n/t

[Roland99]

23. Futures hit session lows. Cisco down 8% in pre-open trade

DJIA INDEX 12,132.00 -103.00 08:01
S&P 500 1,318.10 -11.90 08:02
NASDAQ 100 1,717.75 -30.50 08:02

[Demeter]

25. Another "Fasten Your Seatbelts, It's Gonna Be a Bumpy Ride" Day

Oh, Goodie.

They must have been shovelling like crazy to keep the Dow above 12,200 yesterday.

[AnneD]

41. Morning Marketeers.....

:donut: and lurkers. I saw 2 stories back to back on the Snews this morning. The first on was the report on the USAR and National Guard readiness and the second on was about the poor folks devastated by the winter tornadoes.

In the first story-they talked about how our reserves got active army cast offs and how some of their equipment dated to VN era. If they get new equipment-it stays in Iraq and they come home with less than nothing. They cannot do their main mission-defend the home front. The leaders testifies that while not broken-it in a bad way.

Well, in the mind of this ex Reservist-it is flat out busted, DOA, flat line, gone, gone, gone. Nothing short of a draft will revive it and that cuts me to my heart. It use to attract the best and brightest. Most of the folks I served with were small businessmen, high level civil servants, CEO's. These were the type of folks that personified yankee ingenuity. I learned how to rig just about anything from these guys. Because we didn't have the state of the art equipment-we scrounged and made do. But lack of equipment isn't what killed it. The continual deployment has killed it. The families and communities have got the short end of the stick. This administration has tried to fight this war on the cheap and this will have repercussions well into our future.

How does this effect those poor folks devastated by those twisters? One of the National Guards missions was that the Governor of the state could call them up to help deal with disasters and emergencies. So here we have our present day guard. Now IF, and that's a big IF, they are even home-most have no equipment to help. No CAT's, earth movers, anything to help move debris and find survivors. Nothing is more frustrating than to see your community devastated and you sitting there with your dick in your hand. The bedrock of our security at home is NOT homeland security-but our Guards and Reserve. Folks-we are in sad shape. People are not volunteering for this anymore and won't. Our military is at the breaking point. Throwing money at it will not fix the problem. It can only be fixed by either a draft-or curtailing obligations. End of story. If we can't take care of our obligations at home-we damn sure can't do it overseas.

Happy hunting and watch out for the bears.

[Demeter]

44. Another Fine Mess--- Oliver Hardy

There's not enough blood or treasure in W's pocket to pay for this--but he must pay. The country must see this wrong righted.

[Hugin]

48. Good Morning AnneD...

:hangover:


I agree with you... It's broken. To fix it is going to require a new social contract (IN WRITING THIS TIME)
about exactly why, when, where, and how the NG and Reserve are to be used and what their priorities are to be.

Each and every member of these forces needs to understand it and protect their agreements. It will be a matter
of restoring the confidence of the service members that their service and sacrifice will go toward legitimate
goals and the protection of those around them.

It's a big problem which has hardly been addressed by any candidate and I find myself wondering if any of
them are up to it... It won't be easy.

[Roland99]

60. For as much as these nutcases don't believe in evolution, they sure do practice it a lot here...

kill off the sick and the poor...only the strong (and rich) survive.

[kineneb]

66. this here poor person

ain't goin' down without a fight.

Never piss off a momma raccoon (my totem animal). We are pointy on 5 of 6 ends and can get mean.

[AnneD]

81. For all their railing about evolution.....

and the social darwinism they practice....they miss a very very very important point about evolution. Of course the strong survive (to reproduce) but survival is not necessarily an individual effort. Many species have survived because of what they do collectively-not individually. Wolves, big cats, and human hunt in packs-very successfully. A few might die in a given year but their off springs survive.

I see a lot of 'trust fund' babies. In the real world-they wouldn't make it let alone pass their genes along and their parent's skills would be worthless. That little inner city kid that can scrounge a meal has a better chance of survival when you get down to it. The meek really will inherit the Earth.

[UpInArms]

26. US STOCKS-Futures slide on Wal-Mart, Cisco woes

http://www.reuters.com/article/bondsNews/idUSN0735774720080207?sp=true

NEW YORK, Feb 7 (Reuters) - U.S. stock index futures fell on Thursday after Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research) reported disappointing January sales and technology bellwether Cisco Systems Inc (CSCO.O: Quote, Profile, Research) warned of slowing orders, adding to recession fears.

Shares of Wal-Mart, a Dow component, dropped 3 percent to $47.39 before the bell. The world's largest retailer posted January sales from stores open at least a year below Wall Street's estimates. For details, see .

The one-two punch from Wal-Mart and Cisco came a day after the Nasdaq composite index .IXIC descended into bear market territory as tech shares pulled Wall Street to a third straight day of losses.

"There's fear in the market," said Peter Cardillo, market economist at Avalon Partners in New York. "The economy is slowing and that raises questions about capital expenditures and earnings going forward."

...more...

[Ghost Dog]

27. Europe stocks fall further along with U.S. futures

Thu Feb 7, 2008 8:32am EST
PARIS, Feb 7 (Reuters) - European equities fell further on Thursday afternoon, down 2.7 percent, dropping along with U.S. futures on fresh worries over the U.S. economy after Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research), the world's biggest retailer, posted January same-store sales below expectations.

At 1328 GMT, the FTSEurofirst 300 index of top European shares was down 2.6 percent at 1,287.21 points, with tech and auto stocks among the biggest losers.

/.. http://www.reuters.com/article/marketsNews/idCAL0791034620080207?rpc=611

[Ghost Dog]

28. ECB to hold rates steady, concede rising risks to growth: analysts

FRANKFURT (AFP) - Eurozone interest rates should stay stable on Thursday but the European Central Bank will likely acknowledge that weakening growth could foretell a cut once inflation comes off the boil, analysts say.

The ECB governing council was unanimously expected to keep the eurozone's main lending rate at four percent when it meets here, according to a survey of 30 economists by AFP/Thomson Financial News.

The Bank of England was tipped to trim British interest rates however by a quarter-point to 5.25 percent at a London meeting as it sought to both support growth and contain inflation.

While the ECB has no intention of imitating the US Federal Reserve, which slashed its Fed funds rate from 4.25 percent to 3.0 percent in eight days last month, sharp drops in economic data have raised expectations that the European bank's focus on price stability would widen to include weaker growth prospects.

Eurozone inflation came to 3.2 percent in January, a 14-year high and well beyond the target of just below two percent adopted by the ECB, which stresses that its primary responsibility is to maintain price stability.

But a fall in fourth quarter 2007 retail sales and a sharp slump this year in the eurozone's key service sector have confirmed fears the 15-nation bloc will not emerge unscathed from what is looking like a major US economic slump.

The eurozone's composite purchasing managers index (PMI) of manufacturing and services fell last month to its lowest point in three years, while the service index hit a four-and-a-half-year low.

"Recent business surveys in Spain, Italy and Ireland have been exceptionally weak," noted Laurent Bilke at Lehman Brothers.

/... http://news.yahoo.com/s/afp/20080207/bs_afp/ecbeurozonebankrateforexmoney_080207012842;_ylt=AiDNmNO1LVb4lJ.oaIMyVq6mOrgF

[Ghost Dog]

29. Euro= USD 1.451, GBP 0.747, CHF 1.601 and JPY 154.7 at this time

[Ghost Dog]

30. Eurozone interest rates left unchanged

Eurozone interest rates have been left unchanged by the European Central Bank as it seeks to bring surging inflation back within its target range.

The decision to leave its main policy rate at 4 per cent was widely-expected after eurozone inflation last month hit a 14-year high of 3.2 per cent. The ECB's concerns that a temporary rise in price pressures could become longer-lasting are thought to have outweighed fears about growth.

The ECB's stance has contrasted sharply with the aggressive interest rate cuts announced by the US Federal Reserve.

However, comments by Jean-Claude Trichet, ECB president, later on Thursday will be scrutinised for any sign that the ECB could lower borrowing costs in coming months. Financial markets have priced-in three, quarter-percentage point cuts by the end of this year.

/.. http://news.yahoo.com/s/ft/20080207/bs_ft/fto020720080804377152;_ylt=AmD3rPtU7p.dsVd9Wxu0KRv2ULEF

[Ghost Dog]

31. Pound falls after rate cut

The pound lost ground on Thursday after the Bank of England cut interest rates by 25 basis points to 5.25 per cent.

In its accompanying statement, the central bank said it had taken the widely expected decision to help prop up the UK economy in the face of weakening demand and continued disruption in financial markets.

However, the Bank also warned that inflation remained elevated. Analysts said this implied it was not about to follow the Federal Reserve with a series of aggressive rate cuts.

But Marc Chandler at Brown Brothers Harriman said the statement would not give the market any second thoughts about the trajectory of UK interest rates.

"The market is expecting the next cut in April, though a significant change in the subsequent data or significant new deterioration in the capital markets might see the market look for more aggressive action," he said.

"We believe that in November last year, sterling peaked against the dollar above $2.11 and expect it to finish this year near $1.86."

The pound was already under pressure after figures showed a surprise fall in UK industrial output earlier in the session.

Data revealed UK manufacturing output dropped by 0.2 per cent in December, confounding expectations for a slight rise.

Paul Dales at Capital Economics said the figures supported his view that it was only a matter of time before the UK manufacturing sector slipped into yet another recession and contributed to a prolonged period of weak economic growth.

/... http://news.yahoo.com/s/ft/20080207/bs_ft/fto020720080920077157

[Ghost Dog]

32. FTSE down despite UK rate cut

The FTSE lost ground on Thursday as the Bank of England delivered the expected cut in UK interest rates but cautioned on rising inflation.

...

The bank said: "The prospects for output growth abroad have deteriorated and the disruption to global financial markets has continued. In the UK, credit conditions for households and businesses are tightening.

"Consumer price inflation, at 2.1 per cent in December, was close to the 2 per cent target, but higher energy and food prices are expected to raise inflation, possibly quite sharply, in the coming months."

40 points lower prior to the announcement, the FTSE 100 was down 87.8 points, or 1.5 per cent, to 5,787.6 points just after mid-day.

/... http://news.yahoo.com/s/ft/20080207/bs_ft/fto020720080749527151;_ylt=Astcy4I0paW0yceHUuW9mEn2ULEF

[Robbien]

74. This I do not understand. BoE drops rates and their stock market tanks?

Appears marketeers are smelling some undue influence in the dropping of interest rates. Sure seems smelly when the guidance is all about inflationary worries but the BoE drops rates anyway.

EU papers are calling this "Super Thursday".

[Ghost Dog]

82. European stocks fall on renewed economic worries (close)

PARIS, Feb 7 (Reuters) - European stocks fell to their lowest close in two weeks on Thursday as a rate cut by the Bank of England and a more dovish tone from the European Central Bank failed to soothe worries about a global economic downturn.

Tech shares were among the worst hammered, led by Infineon (IFXGn.DE: Quote, Profile, Research). The German chipmaker tumbled 14 percent after posting weak quarterly results and saying its Com phone chips unit would remain unprofitable over the full fiscal year. The sector also retreated after U.S. networking equipment maker Cisco Systems Inc (CSCO.O: Quote, Profile, Research) warned of slowing orders, fuelling concerns about a downturn in business spending. GlaxoSmithKline Plc (GSK.L: Quote, Profile, Research), Europe's biggest drugmaker, sank 7.6 percent after it warned 2008 earnings would fall due to sliding sales of diabetes drug Avandia and more generic competition.

The FTSEurofirst 300 index of top European shares closed 1.9 percent lower at 1,296.40 points. Europe's benchmark index has lost 14 percent so far in 2008, dragged lower by fears of a U.S. recession.

A 25 basis-point interest rate cut by the BoE failed to boost equities, while European stocks slightly trimmed their losses after European Central Bank President Jean-Claude Trichet said euro zone growth risks were to the downside. The ECB earlier kept rates on hold at 4.0 percent.

"We get the impression that the markets were almost willing a sign from Trichet today that the ECB will cut rates soon," Steve Barrow, Bear Stearns chief currency strategist, wrote in a note. "Trichet has given the market some hope on this score, but probably not as much as the market is making out given the fall in the euro. It certainly does not look as if the ECB will cut in March, unless things turn south in a big way on the economy."

...

European banks, hammered over the past six months by fears over the impact of a meltdown in the U.S. risky subprime mortgage market, lost ground Again on Thursday, with HSBC (HSBA.L: Quote, Profile, Research) down 2.2 percent, Royal Bank of Scotland (RBS.L: Quote, Profile, Research) down 3.6 percent and UBS (UBSN.VX: Quote, Profile, Research) down 2.7 percent. Deutsche Bank (DBKGn.DE: Quote, Profile, Research) bucked the trend, gaining 0.4 percent after Germany's biggest listed lender said its fourth-quarter results contained no big mortgage-related writedowns. The DJ Stoxx bank index is down 35 percent from its 52-week high reached last April and is the worst performing European sector.

Around Europe, Germany's DAX index .GDAXI lost 1.7 percent, UK's FTSE 100 index .FTSE dropped 2.6 percent and France's CAC 40 .FCHI shed 1.9 percent. Since the start of the year, the DAX has lost nearly 17 percent, the FTSE is down 11 percent and the CAC is down 16 percent.

/... http://www.reuters.com/article/marketsNews/idCAL0729203020080207?rpc=611

[Hugin]

33. ~09:30 ET: Ding! Ding! Ding!

Index Last Change % change
• DJIA 12177.50 -18.70 -0.15%
• NASDAQ 2278.75 unch 0.00%
• S&P 500 1324.01 -2.44 -0.18%


Too early to see anything.

[Hugin]

34. ~09:35 ET: A trend emerges...

Index Last Change % change
• DJIA 12190.43 -9.67 -0.08%
• NASDAQ 2268.37 -10.38 -0.46%
• S&P 500 1325.58 -0.87 -0.07%

[Roland99]

35. wth happened? From -100 in futures to a positive start?

Dow 12,201.56 1.46
Nasdaq 2,268.54 -10.21
S&P 500 1,326.60 0.15
10 YR 3.61% 0.00
Oil $86.65 $-0.49
Gold $903.80 $-1.20

[Hugin]

36. Well, um... *cough*

Some, uh, traders are... Well, you know... Different. They well, *cough* aren't like the rest of
us and they get to, uh, do stuff when the rest of us... Well, DON'T!

[TalkingDog]

46. How much does That cost?

I've got 2 cents worth I'd like to pitch in.....


My Favorite Master Artist: Karen Parker GhostWoman Studios

[Hugin]

51. If your $0.02 is in actual hard cash, currently they might let you right in...

But, typically it takes connections and a silver-spoon speech impediment to get through into the
gated community. ;)

[Hugin]

37. ~09:55 ET: Yes, we have trend...

Index Last Change % change
• DJIA 12153.11 -46.99 -0.39%
• NASDAQ 2259.24 -19.51 -0.86%
• S&P 500 1320.32 -6.13 -0.46%

:popcorn:

[Roland99]

40. I guess the fake happy face was ripped off and tossed to the trading floor.

[Hugin]

42. ...

Seriously, though... I'd like to believe it's due to the fact that the stocks are opened in some order...
Alphabetical? Numeric? :shrug: and they add into the indexes in some random way for the first few minutes.
(Also, there is some amount of *coff* After-hours *coff* action to be reconciled.) So, it takes a little
while for the numbers to 'settle' into an opening.

But, keep that :tinfoilhat: firmly in place because -some- days... Such as 22-jan-08 it sure takes a heck
of a long time to settle and afterward it makes no sense.

[Hugin]

43. ~10:05 ET: Whoa...

Index Last Change % change
• DJIA 12226.52 +26.42 +0.22%
• NASDAQ 2275.81 -2.94 -0.13%
• S&P 500 1330.59 +4.14 +0.31%

[Demeter]

47. So That's What Electroshock Looks Like!

I always wondered...

[radfringe]

50. it's not unusual

to see muscles twitching after death due to residual nerve impluses shutting down... :smirk:

[Hugin]

53. ~10:45 ET: Below that Psychologically Important 12,200 level...

Index Last Change % change
• DJIA 12184.65 -15.45 -0.13%
• NASDAQ 2272.00 -6.75 -0.30%
• S&P 500 1326.31 -0.14 -0.01%

Headed toward the Psychologically Important 12,100 level.

[MilesColtrane]

55. Wobbly, like tennis shoes on spin cycle.

[Robbien]

57. Good News: Moody's Profit Declines as Demand for Ratings Slows

Moody's Corp., the world's second- largest credit-rating company, reported a 54 percent drop in profit and said the slide will continue in 2008 after a collapse in new bond sales reduced demand for rankings.

. . .

Moody's and larger rival Standard & Poor's are suffering a slump in demand that lawmakers say was brought on by their willingness to assign AAA credit ratings to subprime mortgage securities that soon tumbled in value as home-loan defaults rose. Sales of mortgage-backed bonds and collateralized debt obligations, once the largest and fastest-growing source of credit-rating revenue, dropped 40 percent.

. . .

Moody's, which gets about 80 percent of revenue from credit ratings, said sales from ratings fell 23 percent to $372.6 million in the quarter. Global structured finance revenue dropped to $164.9 million, dragged down by a 53 percent slump in U.S. structured finance.

. . .

The International Organization of Securities Commissions in Madrid said Feb. 5 that ratings companies may face a code of conduct prohibiting ``advice on the design of structured products which an agency also rates.'' The ratings companies maintain that while they make their models available to underwriters structuring deals, they don't advise anyone.

S&P today said it plans to hire an ombudsman, demand disclosure of collateral that backs structured finance securities and change the way it measures risk in response to the losses.

McGraw-Hill Cos., owner of S&P, last month said its fourth- quarter net income dropped 31 percent to $140.6 million. Net income will fall ``slightly'' this year, because of rising interest costs for share buybacks, McGraw-Hill said.

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

Great news is that these sliced and diced structured financed deals dropped by 50%. It would be even better news if they stopped altogether.

Before this drop in revenue, Moody's got a half billion a quarter in fees for their services in rating companies, two billion a year. That sounds like a hefty fee structure. No wonder they hand out triple As like candy.

[Hugin]

58. Hmm... So, smearing lipstick on trash isn't a...

viable business any longer.

Occasionally, there is some sort of cosmic justice.

Edit: Hey, it's a family friendly thread.

[Robbien]

63. What is surprising is that new trash is still be generated

Moody's ratings for new CDO business only went down by about 50%. Huh? Who is buying that stuff?

And yes, the family friendliness of the thread does tax one's creativeness in expressing views on this pile of poo.

[Ghost Dog]

89. S&P to unveil ratings overhaul -papers

NEW YORK/LONDON (Reuters) - Standard & Poor's Ratings Services, a unit of the McGraw-Hill Companies Inc (MHP.N) is set to announce changes to boost the integrity of its research, such as rotating analysts' coverage, newspapers said on Thursday.

...

The Financial Times said S&P's plan had 27 "action points" including efforts to examine the accuracy of ratings and to look at elements such as security valuations and liquidity, traditionally not part of ratings analysis. It said the plan would be unveiled on Thursday.

It said analysis would also include the use of "what if" scenarios that would take account of extreme events and there would be reform of governance procedures, including the appointment of an external ombudsman.

The Wall Street Journal said that S&P would rotate lead rating analysts after five years of covering the same company, government bond issuer or structured finance arranger.

The work of analysts who leave S&P to work at a bond issuer will be reviewed to make sure their objectivity was not compromised, it said.

S&P officials in New York and London were not immediately available for comment.

Other ratings agencies are also scrutinizing their procedures. Moody's Investors Service this week asked for comment on a series of proposals aimed at shaking up structured finance ratings.

Meanwhile, the International Organisation of Securities Commissions (IOSCO), the world's top market regulators group, said on Wednesday it planned to change the code of conduct for agencies to ban them from helping to design structured products that they also rate.

/.. http://news.yahoo.com/s/nm/20080207/bs_nm/sp_reform_dc;_ylt=AjAlHMEiAaGrcWnhWlxXBim573QA

[Roland99]

59. 11:19am - Schizoid day, eh?

Dow 12,160.84 -39.26
Nasdaq 2,267.99 -10.76
S&P 500 1,323.05 -3.40
10 YR 3.63% 0.02
Oil $87.00 $-0.14
Gold $908.00 $3.00

[Buttercup McToots]

61. The black box economy: The Boston Globe

http://www.boston.com/bostonglobe/ideas/articles/2008/01/27/the_black_box_economy/

The black box economy
Behind the recent bad news lurks a much deeper concern: The world economy is now being driven by a vast, secretive web of investments that might be out of anyone's control.

snip
By Stephen Mihm
January 27, 2008
THE PAST YEAR has been a harrowing one for the world's financial markets, shaken by subprime crises, credit crunches, and other ills. Things have only gotten stranger in the past week, with stock prices swinging wildly in every major market - drastically down, then back up.

more stories like this
Risks in Fed's deeper interest rate cuts
Fed rate cut, jobs data may lift stocks
Stocks rise on relief over U.S. outlook, bonds fall
Stocks recover from sharp losses
Somber Fed says economy has lost punch
Last week the Federal Reserve announced the biggest cut in overnight lending rates in more than two decades. Congress, not to be outdone, is slapping together a massive deficit spending package aimed at giving the economy an emergency booster shot.

Despite the anxiety, nobody is stockpiling canned goods just yet. The prevailing assumption in today's economy is that recessions and bear markets come and go, and that things will work out in the end, much as they have since the Great Depression. That's because there's a collective confidence that the market is strong enough to correct itself, and that experts in charge of the financial system will understand how to mount a vigorous defense.

Should we be so confident this time? A handful of financial theorists and thinkers are now saying we shouldn't. The drumbeat of bad news over the past year, they say, is only a symptom of something new and unsettling - a deeper change in the financial system that may leave regulators, and even Congress, powerless when they try to wield their usual tools.

That something is the immense shadow economy of novel and poorly understood financial instruments created by hedge funds and investment banks over the past decade - a web of extraordinarily complex securities and wagers that has made the world's financial system so opaque and entangled that even many experts confess that they no longer understand how it works.

Unlike the building blocks of the conventional economy - factories and firms, widgets and workers, stocks and bonds - these new financial arrangements are difficult to value, much less analyze. The money caught up in this web is now many times larger than the world's gross domestic product, and much of it exists outside the purview of regulators.

Some of these new-generation investments have been in the news, such as the securities implicated in the mortgage crisis that is still shaking the housing market. Others, involving auto loans, credit card debt, and corporate debt, are lurking in the shadows.

The scale and complexity of these new investments means that they don't just defy traditional economic rules, they may change the rules. So much of the world's capital is now tied up in this shadow economy that the traditional tools for fixing an economic downturn - moves that have averted serious disasters in the recent past - may not work as expected.

In tell-all books, financial blogs, and small-circulation newsletters, a handful of insiders have begun to sound the alarm, warning that governments and top bankers may simply no longer understand the financial system well enough to do anything about it.Continued...

"Central banks have only two tools," says Satyajit Das, author of "Traders, Guns and Money: Knowns and Unknowns in the Dazzling World of Derivatives," who has emerged as a voice of concern. "They can cut interest rates or they can regulate banks. But these are very old-fashioned tools, and are completely inadequate to the problems now confronting them."

Since the last financial crisis that genuinely threatened the fabric of our society, the Great Depression, the United States has built a system of regulatory checks and balances that has, for the most part, worked. The system has worked because the new regulations enforced some semblance of transparency. Companies abide by an extensive set of rules and file information on their profits, losses, and assets.

Obviously, there are limits to transparency: Without withholding some information from public view, it would be hard for companies to take advantage of opportunities in the marketplace. But a modicum of transparency can go a long way, enabling both regulators and investors to make informed decisions. The advantages of the system are many; the costs of even a single case of nontransparency, as with Enron, can be high.

But when the mortgage crisis broke last summer, it opened a window on something else: The existence of a huge wilderness of investments in the financial sector that are nearly impossible to track or measure, and which operate out of the view of both investors and regulators. It emerged that investment banks, hedge funds, and other financial players had issued, bought, and sold hundreds of billions of dollars' worth of esoteric securities backed in part by other securities, which in turn were backed by payments on high-risk mortgages.

When borrowers began defaulting on their loans, two things happened. One, banks, pension funds, and other institutional investors began revealing that they owned huge quantities of these unusual new securities, called collateralized debt obligations, or CDOs. The banks began writing them off, causing the massive losses that have buffeted the country's best-known financial companies. And two, without a market for these securities, brokers stopped wanting to issue risky mortgages to new home buyers. Home values began their plunge.

In other words, a staggeringly complex financial instrument that most Americans had never heard of, and which many financial writers still don't fully understand, became in a matter of months the most important influence on home values in America. That's not how the economy is supposed to work - or at least that's not what they teach students in Economics 101.

The reason this had been happening totally out of sight is not difficult to understand. Banks of all stripes chafe against the restraints that federal and state regulators place on their ability to make money. By cleverly exploiting regulatory loopholes, investment banks created new types of high-risk investments that did not appear on their balance sheets. Safe from the prying eyes of regulators, they allowed banks to dodge the requirement that they keep a certain amount of money in reserve. These reserves are a crucial safety net, but also began to seem like a drag to financiers, money that was just sitting on the sidelines.

"A lot of financial innovation is designed to get around regulation," says Richard Sylla, professor of economics and financial history at NYU's Stern School of Business. "The goal is to make more money, and you can make more money if you don't have to keep capital to back up your investments."

The hiding places for these financial instruments are called conduits. They go by various names - the SIV, or structured investment vehicle, is one that's been in the news a great deal the past few months. These conduits and the various esoteric investments they harbor constitute what Bill Gross, manager of the world's largest bond mutual fund, called a "Frankensteinian levered body of shadow banks" in his January newsletter.

"Our modern shadow banking system," Gross writes, "craftily dodges the reserve requirements of traditional institutions and promotes a chain letter, pyramid scheme of leverage, based in many cases on no reserve cushion whatsoever."

The mortgage-driven securities that have been making headlines are but the tip of a much larger iceberg. Far larger categories of investment have sprung up, with just as much secrecy, and even less clarity into who holds them and how much they are truly worth.

Many of these began as conventional instruments of finance. For instance, derivatives - the broad category of investments whose value is somehow based on other assets, whether a stock, commodity, debt, or currency - have been traded for more than a century as a form of insurance, helping stabilize otherwise volatile markets.

But today, increasingly, a new generation of derivatives doesn't trade on markets at all. These so-called over-the-counter derivatives are highly customized agreements struck in private between two parties. No one else necessarily knows about such investments because they exist off the books, and don't show up in the reports or balance sheets of the parties who signed them.

As the derivatives business has grown more complex, it has also ballooned in scale. Broadly speaking, Das - author of a leading textbook on derivatives and complex securities - estimates that investors worldwide hold more than $500 trillion worth of derivatives. This number now dwarfs the global GDP, which tops out around $60 trillion.

Essentially unregulated and all but invisible, over-the-counter derivatives comprise a huge web of bets, touching every sector of the world economy, that entangles a massive amount of money. If they start to look shaky - or if investors need to start selling them to cover other losses - that value could vanish, with catastrophic results to the owner and unpredictable effects on financial markets.

Derivatives can ripple through the market and link players that might not otherwise be connected. With some types of new investments, that fusion takes place within the security itself.

For instance, some financial instruments are built of two or more different types of assets, linking together sectors of the economy that aren't supposed to move in tandem. In the name of transferring risk - and in the interest of creating an appealing new product to sell to aggressive investors seeking higher returns - a bank could create a CDO, for instance, that packaged subprime mortgages together with corporate bonds. An economist would expect those to move independently, but thanks to a large - and unseen - investment in such a linked package, problems with one could drive down the other. A bad apple can ruin an entire barrel of fruit.

Again, it's not as though anyone necessarily knows the composition of these structured securities. Nor do they know who has invested in them, thanks to the fact that they have not, until recently, counted as conventional assets subject to the normal rules of accounting. And because they don't trade on open markets, their values are essentially guesses, calculated by computer algorithms.

Das disparages much of this as the product of bankers creating "complexity for the sake of complexity," trying to wow their clients by inventing more sophisticated-seeming investments. "Financial innovation is a magical catch phrase," he explains. "It's very sophisticated and chi-chi."

"Investment bankers want to make them more complex, so that they won't be copied, and so that their clients won't understand them," he says. "When they ask whether they're paying the right amount, they won't know."

But when reality comes home to roost, things can get ugly pretty quickly: If an investor is forced to sell a CDO, the onetime price realized on the open market may bear no relationship to the theoretical value generated by a computer formula. That means that everyone holding CDOs can no longer sleep well at night: the same thing can happen to them.

T

hese risks are magnified, as they were during the stock bubble of the 1920s, by the fact that many of these assets are owned by investors who borrowed money to make the investments in the first place. When a market shock like the subprime crisis hits, it can send tremors through the system with incredible speed.

If the contagion spreads, the conventional wisdom holds that the Federal Reserve and other central banks around the world can step into the breach caused when consumers and investors start to lose their confidence. But what happens when all these complicated financial arrangements and instruments start to unravel? The market for one product alone - the credit default swap, or CDS - dwarfs this country's economy. The Fed has an uphill battle, made harder by the fact that it is grappling, to a large extent, with unseen forces.

In theory, additional regulation may help with this. The Financial Accounting Standards Board, which establishes corporate accounting procedures and guidelines, took a first step in that direction this past November, ordering investment banks and anyone else holding complicated securities to assign market values to so-called Level 3 assets - a fancy name for assets for which there is no prevailing market price. This meant assigning a market value to all those CDOs.

Banks promptly began writing down tens of billions of dollars of assets, and their investors are still trying to sort through the results. It's still too early to tell whether or not the effort will work, or whether the "market prices" that get reported are anything more than figments of in-house accountants' imaginations. For his part, Das is skeptical. "It will help that people will know the poison they're drinking," he says. "Whether it will help stabilize the system is another question."

It would be ideal if the financial markets became a bit less opaque and intelligible before that happens. That would be the job of regulators, but Das isn't sure that regulators have the intellectual horsepower to figure out what they need to do. "If you're bright and you can make $5 million a year on Wall Street," he asks, "why would you settle for making 50K as a regulator?"

And in any case, transparency isn't really what the denizens of Wall Street want, Das observes. "The regulators keep espousing things like clarity and transparency, but it's in the investment bankers' interest to keep things opaque." Das pauses for a moment.

"It's like a butcher. He doesn't want the buyer to know what goes into making the sausage." He chuckles, noting that it's the same with financiers. "That's what they're all about and always have been."

Stephen Mihm is an assistant professor of American history at the University of Georgia and the author of "A Nation of Counterfeiters."

© Copyright 2008 Globe Newspaper Company.
1 2 3 4

Next Follow the link above for more

[Buttercup McToots]

64. More Black Boxes..Should scare the hell out you...but we knew...

http://nplusonemag.com/hedge-fund-interview.html

The Financial Situation Interview with a Hedge Fund Manager

January 7, 2008


Pt. 1: Currency Crosses
n+1: Would you like something?
HFM: Just a water.
n+1: Bottled water? It’s on me.
HFM: Just tap water, thank you.
n+1: No, really, it’s on me.
HFM: Thanks, I’m OK.
n+1: All right, let’s get to it. Is America now a Third World country?

HFM: No, we’re a First World country with a weak currency. From time to time, the dollar’s been very weak; from time to time, it’s very strong; and unfortunately what tends to happen is people tend to just extrapolate. But in reality, over the very very long term, currency processes tend to be fairly stable and mean-reverting. So the dollar’s very weak today, but that’s no reason to believe the dollar’s going to be weak forever or that, because it’s weak today, it’s going to get dramatically weaker tomorrow.

n+1: But you, in your work, are not dealing with the long term…

HFM: No, we’re dealing with the short term. But, I’ll tell you, in our work we don’t trade the G-7 crosses because we just don’t feel we have an edge on that. Dollar-sterling, dollar-Euro, or dollar-Yen: it’s amazing how many brilliant investors have gotten so much egg on their face trying to trade the G-7 crosses. I can think of so many examples—where people make these really strong calls, that seem very sensible, and then get killed. A very good example of that is Julian Robertson in the late nineties being short the Yen against the dollar. Japan had just gone through this horrible deflation, the economy was in the shitter, the banking system was rotten. And all these things you would argue should lead a currency to trade weaker, and he got very very long the dollar, short the Yen, and a lot of people did alongside him, and basically there was a two- or three-week period in ’98 when we had the financial crisis and the Yen actually strengthened ten or fifteen percent. I can’t remember the exact numbers, but all these guys just got carried out, even though the stylized facts of the argument were very good.

n+1: “Carried out,” is that a term of art?

HFM: Carried out… like basically they’re carried out on a board, they’re dead.
Another example of that, a personal example: Generally every year, at the beginning of the year, banks that we deal with will often have events, dinners or lunches, where they gather some of their big clients and discuss themes for the coming year, trade ideas for the coming year. They encourage everybody to, you know, go around the table, “What’s your best trade idea for the coming year?” And at the beginning of 2005 I was at a dinner, and I was with some fairly prominent macro investors, and it was almost like a bidding war for who could be more bearish on the dollar. So the first guy would say, “I think the best trade is short dollar, long Euro, it’s going up to $1.45.” At the time, I forget, maybe it was $1.30. And the next guy would go, “No, no, you’re so naïve. $1.45? It’s going to $1.60!” And it was a competition for who could be more bearish on the dollar and win the prize and be the least naïve person at the table. “It’s going to $1.65 and probably higher! Maybe $1.75!” At the eighteen-month horizon.


EDITED TO COMPLY WITH DU'S COPYRIGHT POLICY

[Roland99]

71. "I for one welcome our computer trading masters"

:wow:

I'll have to read the rest tonight.

[Robbien]

65. Wickes plans sale in bankruptcy court--(after being raped and pillaged by an LBO)

PHILADELPHIA -- Wickes Furniture Co. has abandoned hopes of reorganization and agreed to put itself on the bankruptcy auction block before the end of the month, according to court papers.

Citing "operating losses and liquidity concerns," Wickes said Monday it would seek bankruptcy court approval to sell all its assets by Feb. 29. The company said it would be sold either as an operating business or piecemeal in a liquidation.

. . .

Wickes listed $190 million in assets and $208 million in liabilities in its Chapter 11 filings. The privately held company said it has been "highly leveraged" since it was acquired in 2004 by Sun Capital Partners of Boca Raton, Fla.

http://www.suburbanchicagonews.com/beaconnews/business/778696,6_3_NA06_WICKES_S1.article

Probablity is high many of these takeover LBO targets will go the way of Wickes.

[TrogL]

68. 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

2007-12-27 Thursday, December 27 1.01958 USD
2007-12-28 Friday, December 28 1.02208 USD
2007-12-31 Monday, December 31 1.01204 USD
2008-01-01 Tuesday, January 1 1.01204 USD
2008-01-02 Wednesday, January 2 1.00786 USD
2008-01-03 Thursday, January 3 1.00959 USD
2008-01-04 Friday, January 4 1.0012 USD
2008-01-07 Monday, January 7 0.995025 USD
2008-01-08 Tuesday, January 8 1.0015 USD
2008-01-09 Wednesday, January 9 0.991768 USD
2008-01-10 Thursday, January 10 0.986291 USD
2008-01-11 Friday, January 11 0.980584 USD
2008-01-14 Monday, January 14 0.979432 USD
2008-01-15 Tuesday, January 15 0.983574 USD
2008-01-16 Wednesday, January 16 0.976753 USD
2008-01-17 Thursday, January 17 0.971817 USD
2008-01-18 Friday, January 18 0.97144 USD
2008-01-21 Monday, January 21 0.97144 USD
2008-01-22 Tuesday, January 22 0.9758 USD
2008-01-23 Wednesday, January 23 0.972573 USD
2008-01-24 Thursday, January 24 0.99295 USD
2008-01-25 Friday, January 25 0.995619 USD
2008-01-28 Monday, January 28 0.995818 USD
2008-01-29 Tuesday, January 29 1.0022 USD
2008-01-30 Wednesday, January 30 1.00644 USD
2008-01-31 Thursday, January 31 0.998203 USD
2008-02-01 Friday, February 1 1.00614 USD
2008-02-04 Monday, February 4 1.00735 USD
2008-02-05 Tuesday, February 5 0.995718 USD
2008-02-06 Wednesday, February 6 0.997705 USD


Current values

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

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9878 0.9896 0.9878 0.9893 -0.0067 -0.67% 
CD.H08 Mar 2008 0.9875 0.9903 0.9865 0.9890 -0.0058 -0.57% 
CD.M08 Jun 2008 0.9875        0.9875 0.9875 -0.0053 -0.52% 
CD.U08 Sep 2008 0.9785 0.9785 0.9780 0.9911 +0.0032 +0.32% 
CD.Z08 Dec 2008 0.9750 0.9750 0.9750 0.9893 +0.0033 +0.33% 
CD.H09 Mar 2009 0.9810 0.9825        0.9875 +0.0032 +0.32% 
CD.M09 Jun 2009 0.9995 0.9995        0.9857 +0.0031 +0.31%  

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

Market              Open    High     Low    Last   Change     Pct 
AUSTRALIAN $/CANADIAN $ (NYBOT:AS)
AS.H08 Mar 2008   0.8834                  0.8984  -0.0036  -0.42%  
AUSTRALIAN $/US$ (NYBOT:AU)
AU.H08 Mar 2008   0.9042                  0.8935  -0.0013  -0.15% 
CANADIAN $/JAPANESE YEN (NYBOT:HY)
HY.H08 Mar 2008  107.000 107.000 107.000 105.665  -0.160   -0.14%  
EURO/AUSTRALIAN $ (NYBOT:RA)
RA.H08 Mar 2008  1.66420 1.66420 1.66420 1.63525  -0.00010 -0.01%  
EURO/BRITISH POUND (NYBOT:GB)
GB.H08 Mar 2008   0.7474  0.7502  0.7465  0.7475  +0.0003  +0.04%   
EURO/CANADIAN $ (NYBOT:EP)
EP.H08 Mar 2008  1.48700 1.48700 1.48700 1.46905 -0.00610  -0.42%  
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.H08 Mar 2008   155.26  155.26  153.80  154.02 -1.35     -0.83%   
EURO/US$ (SMALL) (NYBOT:EO)
EO.H08 Mar 2008  1.44750 1.44750 1.44750 1.44750 -0.01345  -0.92%  

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

The March Canadian Dollar was lower overnight as it extends Tuesday's decline below the 10-day moving average crossing at 99.80. Stochastics and the RSI are turning bearish hinting that a short- term top might be in or is near. Closes below the 20-day moving average crossing at 98.86 would confirm that a short-term top has been posted. If March renews the rally off January's low, the reaction high crossing at 101.67 is the next upside target. First resistance is the 10-day moving average crossing at 99.80. Second resistance is last Wednesday's high crossing at 101.20. First support is the 20-day moving average crossing at 98.86. Second support is the 50% retracement level of the 2007 rally crossing at 97.84.

Analysis

Very little going on except election talk. Alberta's having a provincial election though you'd hardly notice - it's a real yawner. There's talk of a spring Federal election as well. The Conservatives are holding the Liberals for ransom over three issues; Afghanistan, crime and teh budget and they'll probably fold over all three 'cause they're in no position to fight an election with that idiot Dione in charge.

[TrogL]

69. Wal-Mart gift cards used for necessities

(on edit, created a LBN thread instead - the Walmart bit is about 1/2 way down the linked article)

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3172366

I watched the morning Global News TV show and one item caught my eye. Wal-Mart noted that gift cards given out for Christmas gifts are normally redeemed fairly quickly for white-box items and electronics. This year, they're being used slowly for food purchases.

I can't get the link to load but I suspect it says something along the lines that this affects Wal-Mart's operations cause there's no new money coming in for food items and white-box and electronics are sitting on the shelves eating up inventory.

I noticed that in the local Brick store. The new 1080p TV's are in but aren't selling. Last year's stuff, even the 1080p lines, is still sitting in boxes with dust on it. I have no intention of upgrading from 1080i and I imagine everybody else is waiting for the final death of HD-DVD and the blue-ray clones to come out before jumping on that band-wagon. I did get to see Harry Potter on Blue-Ray and 1080p and it's downright frightening how clear it is. In fact I didn't like it 'cause I could clearly see flaws in the movie. The CGI looked just too perfect, like an actual model, and I really didn't need to see the kids' zits.

[Roland99]

72. People are retrenching. Nothing trickling down or up.

[callous taoboy]

93. Cool! I hate Wal-Mart BUT I did get a $75 gift certificate and will buy food there. n/t

[Buttercup McToots]

70. HOW LONG DOES THE USA HAVE?

I found this short interesting read.


Quote:
HOW LONG DOES THE USA HAVE?

This is the most interesting thing I've read in a long time. The sad thing about it, you can see it coming. I have always heard about this democracy countdown. It is interesting to see it in print. God help us … not that we deserve it.

How Long Do We Have?

About the time our original thirteen states adopted their new constitution in 1787, Alexander Tyler, a Scottish history professor at the University of Edinburgh, had this to say about the fall of the Athenian Republic some 2,000 years earlier.

'A democracy is always temporary in nature; it simply cannot exist as a permanent form of government'

'A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury'.

'From that moment on, the majority always vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship'

'The average age of the world's greatest civilizations from the beginning of history, has been about 200 years' 'During those 200 years, those nations always progressed through the following sequence:

1. From bondage to spiritual faith;
2. From spiritual faith to great courage;
3. From courage to liberty;
4. From liberty to abundance;
5. From abundance to complacency;
6. From complacency to apathy;
7. From apathy to dependence;
8. From dependence back into bondage'

Professor Joseph Olson of Hemline University School of Law, St. Paul, Minnesota, points out some interesting facts concerning the 2000 Presidential election:

Number of States won by:
Gore: 19
Bush: 29

Square miles of land won by:
Gore: 580,000
Bush: 2,427,000

Population of counties won by:
Gore: 127 million
Bush: 143 million

Murder rate per 100,000 residents in counties won by:
Gore: 13.2
Bush: 2.1

Professor Olson adds: 'In aggregate, the map of the territory Bush won was mostly the land owned by the taxpaying citizens of this great country.

Gore's territory mostly encompassed those citizens living in government-owned tenements and living off various forms of government welfare.

Olson believes the United States is now somewhere between the 'complacency and apathy' phase of Professor Tyler's definition of democracy, with some forty percent of the nation's population already having reached the 'governmental dependency' phase.

If Congress grants amnesty and citizenship to twenty million criminal invaders called illegal and they vote, then we can say goodbye to the USA in fewer than five years.

If you are in favor of this happening, then delete this message. If you are not then Pass this along to help everyone realize just how much is at stake, knowing that apathy is the greatest danger to our freedom.

Thanks for reading.

[Warpy]

77. Our government has reset before

and Stupid isn't the first short sighted tyrant to have been installed at the head of it. I still have faith that after his party's rubbish is once again proved to be rubbish and people learn the hard way that the super rich aren't going to trickle a dime down to any of them, the whole thing will reset once again.

I think the first two steps are hooey. Spiritual faith is one of the things holding people back from realizing just what's going on with that party. I'd substitute

1. Bondage to realization and anger
2. Anger to great courage

[TrogL]

90. Urban Myth - please do your research before posting this drivel

http://www.snopes.com/politics/quotes/tyler.asp

[jdog]

79. Is it moral to walk away from your mortgage?

Love the point made at the end of this article. Thank you George and all your buddies for bringing us to this position of morality. I have said many times that I never realized before George Bush how really important our leadership is to setting the moral (IM-moral in George's case) tone of the country - in so many areas.

http://www.alternet.org/workplace/76169/

[Robbien]

80. Is it moral for brokers to fraudulently steer homeowners into high fee high interest rate

loans?

Notice no one in the media is even discussing the fraud, greed and corruption which caused this mess. No. They blame it all on strapped duped homeowners. They squeal when the Feds or DoJ investigate the guys making big bucks from this ponzi scheme.

Millionaires turned into billionaires but hey, don't look at that. Blame Joe homeowner. The Alternet article is too optimistic. No matter what, the blame will never be placed by MSM on anyone but the homeowner.

[AnneD]

83. During the RE bust in Houston...

people did walk away from their homes. The reason was not because they thought their homes were a bad investment and they wanted to cut their losses-it was because they had lost their jobs, had no hope of finding another and the S&L and banks had financed those homes through balloon mortgages. The banks and S&L's more frequently than not being hard nosed about helping folks keep their houses.

Lot's of folks are trying right now to save their homes but investors are greedy and want the interest first and refusing to negotiate.

[Roland99]

84. Markets are pretty flat at the moment

but it's another roller coaster day.

[Hugin]

85. What is the PPT drawing today?

A reclining Buddha?

Can't quite make it out.

[TalkingDog]

87. Reclining Yeti....

My Favorite Master Artist: Karen ParkerGhostWoman Studios

[Hugin]

88. Good eye, TalkingDog...

Striking similarity at that.

[Ghost Dog]

86. FT Insight: Western banks face backlash as they hand out begging bowl

By Gillian Tett

Earlier this week, I chatted with a jet-lagged senior US financier. Like many of his ilk, he is flitting around the Middle East and Asia trying to extract finance from sovereign wealth funds and other investment groups.

His latest travels have delivered a surprise: some funds are quietly getting cold feet about the idea of putting more capital directly into western banks, he says.

"There is a backlash building," he muttered into a crackling cell phone.

This is striking stuff. In recent months, many equity investors have taken comfort from the idea that sovereign wealth funds could ride to the rescue of Wall Street, if not the City of London too.

For as the subprime scourge has spread, US policymakers have leant on the largest US banks to raise capital, almost at any cost. Consequently, they have passed the begging bowl around the sovereign wealth funds, with considerable success. Thus far some $40bn to 60bn worth of injections have been promised to groups such as Merrill Lynch and Citi, depending on how you measure the promises.

But having stepped into the breach so visibly late last year, some funds are now getting jitters. In China, for example, there are rising complaints that funds are foolish to shovel cash directly into risk-laden US banks when they could be using it in better ways, such as purchasing western commodity or manufacturing groups.

"The Chinese are worried they are turning into dumb money," says one well-placed Asian financier, who partly blames the trend on the Blackstone saga, which produced significant paper losses for the Chinese investors.

Meanwhile, in the Middle East, the latest round of Federal Reserve interest rate cuts has created unease. For sure, some powerful Gulf investors have been heartened to see that the US authorities are acting in a resolute way. They are doubly relieved that the dollar has held up so well so far. But the dramatic scale of Fed cuts has prompted concern that Wall Street is still sitting on a putrid mess - contrary to what the US banks told the sovereign wealth funds late last year.

/ continues... http://news.yahoo.com/s/ft/20080207/bs_ft/fto020720081434387218

[Demeter]

95. Dumb Money, Eh?

That's what fuels the Republican Party, I'll betcha!

[Buttercup McToots]

91. 30-Year Treasuries Fall Most Since June After $9 Billion Sale

http://www.bloomberg.com/apps/news?pid=20601087&sid=aOa7t4yc8eXI&refer=home

30-Year Treasuries Fall Most Since June After $9 Billion Sale

By Sandra Hernandez and Deborah Finestone

Feb. 7 (Bloomberg) -- U.S. 30-year Treasuries fell the most since June as demand was weaker than expected at the government's $9 billion auction of the securities.

Ten- and 30-year securities declined a second straight day as investors balked at buying at this week's auctions, with yields at record lows. Investors are also betting that the Federal Reserve's five interest-rate cuts since September will revive economic growth and cause inflation to accelerate, reducing the value of Treasuries' fixed payments.

``The auction went as poorly as one could imagine,'' said Andrew Brenner, co-head of structured products in New York at MF Global Ltd., the world's largest broker of exchange-traded futures and options contracts. ``There isn't a lot of demand for bonds at these levels.''

Follow the link...

[KayLaw]

94. Question, please.

Will this make mortgage rates rise?

[ozymandius]

96. Mortgage rates tend to follow the 10yr treasury note.

Tend to follow... Not always. Qualified applicants have been getting pretty good rates lately because demand has sunk.

[KayLaw]

98. Thanks

Sorry it took so long to get back.

[ozymandius]

97. Closing with a PPT flavored cherry on top.

Dow 12,247.00 Up 46.90 (0.38%)
Nasdaq 2,293.03 Up 14.28 (0.63%)
S&P 500 1,336.91 Up 10.46 (0.79%)
10-Yr Bond 3.736% Up 0.122
NYSE Volume 4,590,157,500
Nasdaq Volume 3,004,691,750

4:20 pm : It was another roller coaster day of trade on Thursday, with the S&P seeing a large 30 point swing from its session high to low. Stocks managed to finish the day with decent gains with eight of the ten economic sectors advancing.

January retailer same-store sales were mixed, but traders drove the stocks higher. Wal-Mart (WMT 49.84, +1.01) reported a lower than expected increase in sales, but market participants shrugged off the news. The S&P 500 Retailing Index closed up 3.7% with J.C. Penney (JCP 47.44, +3.72) gaining 8.5%. The strength in retailers helped send the consumer discretionary sector (+1.7%) into a leadership position.

Cisco (CSCO 23.38, +0.30) weighed on the market in morning trade even thought it met its earnings estimate. Cisco's stock was down as much as 5.6% after the company provided a cautious outlook. Specifically, the company said it expects third quarter revenue to increase 10%, which equates to $9.79 billion, less than the $10.19 billion analysts were expecting. However, Cisco managed to regain its losses, finishing the day with a modest gain. The tech sector (-0.2%) was a laggard despite Cisco's reversal.

PepsiCo (PEP 70.41, +3.68) provided support to the broader market after soaring 5.5%. The company reported fourth quarter earnings of $0.80 per share, topping estimates by a penny. Pepsi expects 2008 earnings to be at least $3.72, compared to the current estimate of $3.74. Pepsi led consumer staples 1.5% advance.

Financials outperformed (+1.7%), aided by strength in the specialized finance group (+6.8%). CME Group (528.01, +42.76) and NYMEX (94.95, +7.07) spiked higher after several brokerages said their sell-off yesterday was overdone. Yesterday, the stocks got pummeled on news that the Dept. of Justice believes that futures market firms controlling or owning clearing operations impedes competition.

On the economic front, there were 356K initial jobless claims for the week ended Feb. 2, lower than the previous reading of 378K. However, there were more claims than the 342K that economists expected. Claims have been choppy recently, but remain below typical recessionary levels.

December pending home sales fell 1.5% compared to the expected decline of 1.0%. Sales declined less than November's 3.0% drop. The release is from the National Association of Realtors, and measures signed contracts for existing homes. Despite the larger than expected drop, homebuilders (+1.6%) spiked on the data.

In overseas news, the Bank of England decided to cut rates by 25 basis points to 5.25% and the European Central Bank held rates steady at 4.00%. Both decisions were expected.

Historically low yields at the long end of the Treasury market prompted investors to avoid the most recent Treasury auction in favor of higher returns. The benchmark 10-year note fell 45/32 sending its yield up to 3.77%. The dollar was up a strong 0.97%. DJ30 +46.90 NASDAQ +14.28 NQ100 +0.7% R2K +1.5% SP400 +1.0% SP500 +10.46 NASDAQ Dec/Adv/Vol 1245/1707/2.99 bln NYSE Dec/Adv/Vol 1244/1888/1.62 bln