STOCK MARKET WATCH, Wednesday June 4

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday June 4, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 231
DAYS SINCE DEMOCRACY DIED (12/12/00) 2691 DAYS
WHERE'S OSAMA BIN-LADEN? 2416 DAYS
DAYS SINCE ENRON COLLAPSE = 2707
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

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

AT THE CLOSING BELL ON June 3, 2008

Dow... 12,402.85 -100.97 (-0.81%)
Nasdaq... 2,480.48 -11.05 (-0.44%)
S&P 500... 1,377.65 -8.02 (-0.58%)
Gold future... 885.50 -11.50 (-1.30%)
30-Year Bond 4.62% -0.06 (-1.22%)
10-Yr Bond... 3.90% -0.07 (-1.84%)






GOLD,EURO, YEN, Loonie and Silver

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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: Return of the Credit Crisis – Did It Ever Leave?

Time to brace for more bad news
BY FRANK BARBERA, CMT

Don’t look now, but its back. Swept back upon the rocky shores and thrown harshly against the rocks by a vicious tide, the banks' shares are once again moving to new multi-year lows. Of course, the news is horrible, but the price action of financial shares suggests there is far worse yet to come. For those just looking at the last few days of the stock market rally, it might be very tempting to conclude that the averages are stabilizing and that things have gotten ‘back to normal.’ Ah, if only. As it happens, ‘normal’ is not even within hailing distance and lo to the investor who decides that now is the time to take his eye off the bouncing ball. In this case, the bouncing ball has been and remains the monumental credit crunch sweeping the globe. It is the proverbial elephant in the middle of the room that few like to talk about, and which once again in the last few days has passed another major round of gas. To begin with, we note that for the first quarter 2008, Banks' earnings fell by 46% to $19.30 billion with the number of officially reported ‘problem’ banks jumping from 76 to 90. In the first quarter, US Banks set aside a record $37.1 billion to cover losses, however, even government regulators don’t believe that will be enough to stave off further problems. According to Sheila Bair, Chairwoman of the FDIC, Federal Deposit Insurance Corporation, loan-loss provisions and bank failures will likely continue to rise in coming quarters. “While we may be past the worst of the turmoil in the financial markets (ed. Don’t count on it) we’re still in the early stages of the traditional credit crisis you typically see during an economic downturn” stated Ms. Bair.

In fact, Ms. Bair went on to point out that the ‘coverage ratio’ for banks is still declining, a ‘worrying trend.’ The coverage ratio compares bank reserves with the level of loans that are 90 days past due. According to the FDIC, “The ratio fell for the 8th consecutive quarter to .89 in reserves for every $1 of non-current loans, the lowest level since the 1st of 1993.” This trend has been reflected in a constant parade of banks reporting ‘worse than expected’ results and simultaneously increasing their loan-loss reserves. Take Keycorp (KEP) for example, which recently doubled its forecast for loan losses for the second time in the last few months. The stock collapsed by more then 10%, and as of last night closed at a new multi-year low and a new closing low for the entire decline.

-see chart-

Yet the bad banking news does not stop at Keycorp or Barclays. No! Looking throughout the sector, globally, the picture is more or less the same – panic – urgent selling pushing share prices off the cliff in just the last three weeks. Look at the chart of UBS, which Forbes recently described as “a mess,” and which in a desperate effort to raise capital recently launched a 15.5 billion dollar rights issue. Highly dilutive, but dilutive of what? The question must be asked, is there a business here that can be saved? The share price is acting like that may not be the case, having already tumbled 37.50% in just the last 25 days!

.....

For Ben Bernanke, a quick reality check is shown in the charts of these sinking financial stocks. What was he thinking by making a statement this morning that “more rate cuts are unlikely.’ According to the AP, Bernanke said, “The Fed’s powerful dose of rate reductions that started last September along with the governments $168 billion stimulus package, including rebates for people and tax breaks for businesses, should bring about “somewhat better economic conditions in the second half of this year.” HA! Excuse me while I hang myself -- with this kind of logic, we are all doomed. Has anyone shown Dr. B the updated charts of Leading Indicators and Consumer Confidence? Has he bothered to look at what is happening to the banks and financial stocks at the very foundation of his monetary system? Guess not, because the unyielding set of new lows in the financials is probably enough to send any Fed chairman to the denial couch, and great doses of psycho-therapy. Even Gold seems to be having a good laugh at Dr. Bernanke’s expense this morning, initially falling $16 dollars on the “dollar rally” (see chart below – what Dollar rally? Oh, they must mean the holding action of the last few weeks. That’s a rally? Who’s kidding who?). By mid session, Gold and Silver were both paring losses, with the Gold Stocks, normally very sensitive to moves in the market for a time, not even bothering to go down. The Gold Stocks seem to smell blood in the water, and like a great white shark, within no time, so will Gold and the other metals.

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

[ozymandius]

2. Today's Reports

08:15 ADP Employment May
Briefing.com NA
Consensus -30K
Prior 10K

08:30 Productivity-Rev. Q1
Briefing.com 2.5%
Consensus 2.5%
Prior 2.2%

10:00 ISM Services May
Briefing.com 52.0
Consensus 51.0
Prior 52.0

10:30 Crude Inventories 05/31
Briefing.com NA
Consensus NA
Prior -8883K

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

[UpInArms]

28. From the Always Wrong Survey Dept: ADP says private sector added 40,000 jobs in May

02. Private-sector jobs add 40,000 in May, ADP says
8:18 AM ET, Jun 04, 2008

[UpInArms]

34. Stocks pare losses after (inaccurate) employment report

http://news.yahoo.com/s/ap/20080604/ap_on_bi_st_ma_re/wall_street?_ylt=AvwhATQByMKo0bKdOPfI7peb.HQA

NEW YORK - U.S. stock futures are pulling off their lows as an employment reading shows that the private sector added jobs last month.

The ADP National Employment Report arriving Wednesday shows that the private sector added 40,000 jobs in May, rather than declined by 60,000 as economists had been expecting, according to Dow Jones Newswires.

Dow Jones industrial average futures are down 20, or 0.16 percent, at 12,384, off their earlier lows.

[UpInArms]

29. Challenger Survey: Layoffs rise 15 pct in May vs April

http://www.reuters.com/article/bondsNews/idUSNAT00409520080604

planned layoffs rose 15 percent in May from April to the highest monthly total since December 2005, a report showed on Wednesday.

Planned job cuts in U.S. companies totaled 103,522 in May, up from 90,015 in April, employment consulting firm Challenger, Gray & Christmas Inc. reported.

May's total was 46 percent higher than the 71,115 planned layoffs in the same month last year.

Heavy downsizing in the automotive sector, which at 30,011 planned layoffs, contributed to the increase in May.

"The recovery plans that Ford and General Motors set into motion two years ago are being derailed due to skyrocketing gasoline prices," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, in a press release.

The second hardest-hit sector was the financial firms, with 16,206 job cuts in May. For the year-to-date, the financial sector leads in job cuts, with a total 66,031 cuts announced so far this year.

...more...

unlike the ADP, this survey actually has credibility

[UpInArms]

30. Labor costs down - productivity up as terrified workers worker harder for less money

02. U.S. Q1 unit labor costs revised down to 2.2% vs 2.3% prev
8:32 AM ET, Jun 04, 2008

03. U.S. Q1 productivity revised up to 2.6% vs. 2.3% prev
8:31 AM ET, Jun 04, 2008

[UpInArms]

31. Mortgage applications index hits 6-year low: MBA

http://www.reuters.com/article/bondsNews/idUSN0440607420080604?sp=true

NEW YORK (Reuters) - U.S. mortgage applications fell for a third consecutive week, reaching its lowest level in over six years as demand for home refinancing loans plunged, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended May 30 dropped 15.3 percent to 502.3 -- its lowest level since the week ended April 19, 2002.

The U.S. housing market is suffering one of the worst downturns in its history. Significantly tighter lending standards and an unwieldy supply of homes for sale are just some of the factors preventing the U.S. housing market from recovering from its two-year-long slump.

The souring of demand for home loans last week may be tied to sharply higher interest rates on mortgages.

<snip>

REFINANCING PLUNGES

The group's seasonally adjusted index of refinancing applications plunged 25.7 percent to 1,496.1. The index was down 14.9 percent from its year-ago level of 1,757.1.

...more...

[UpInArms]

61. U.S. May ISM services index 51.7% vs 52.0 April

36. U.S. May ISM services above consensus 50%
10:01 AM ET, Jun 04, 2008

37. U.S. May ISM services index 51.7% vs 52.0 April
10:01 AM ET, Jun 04, 2008

[ozymandius]

3. Oil prices drop below $124 a barrel in Asia

BANGKOK, Thailand - Oil prices dropped below $124 a barrel Wednesday in Asia as demand concerns deepened and after Federal Reserve Chairman Ben Bernanke indicated that more U.S. interest rate cuts are unlikely.

Bernanke's comments suggesting inflation is too much of a concern to contemplate more rate hikes sent the dollar higher and raised questions about oil's ability to reach new highs in the short term. Bernanke signaled the Fed is inclined to leave rates where they are for now, but some analysts said he might be taking a step toward an eventual rise in rates later this year or early next year.

Midday in Singapore, light, sweet crude for July delivery was down 33 cents at $123.98 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $3.45 to settle at $124.31 a barrel in the previous session.

That was oil's lowest settlement price for a front-month contract on Nymex since May 15. Prices are now more than $11 below the trading record of $135.09 a barrel hit May 22.

Evidence continues to mount that oil prices nearly twice what they were a year ago have cut demand.

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

[ozymandius]

4. China builds plant to turn coal into barrels of oil

ERDOS, China (Reuters) - With oil prices at historic highs, China is moving full steam ahead with a controversial process to turn its vast coal reserves into barrels of oil.

Known as coal-to-liquid (CTL), the process is reviled by environmentalists who say it causes excessive greenhouse gases.

.....

The United States, Australia and India are among those countries looking at CTL technology but are constrained by environmental concerns associated with the process which releases excessive amounts of carbon gases into the atmosphere and consumes huge amounts of water.

.....

The plant will start operating later this year and is expected to convert 3.5 million tonnes of coal per year into 1 million tonnes of oil products such as diesel for cars.

That's the equivalent of about 20,000 barrels a day, a tiny percentage of China's oil needs as oil consumption in China is around 7.2 million barrels a day.

If all goes well, then Inner Mongolia will push on with an ambitious plan to turn half of its coal output into liquid fuel or chemicals by 2010. This would be around 135 million tonnes, or about 40 percent of Australia's annual coal output.

http://news.yahoo.com/s/nm/20080604/lf_nm/china_ctl_dc_1

[UpInArms]

36. China's fuel subsidy costs the world

http://www.reuters.com/article/bondsNews/idUSBNG12910820080604?sp=true

HONG KONG (Reuters) - Buckling under the weight of record oil prices, a slew of Asian countries have cut or are thinking of cutting their fuel subsidies, which raises a pressing question for Beijing: Can China afford its own oil subsidies at a time when it is spending billions on post-earthquake reconstruction?

The short answer is yes, because China is blessed with both large trade account and fiscal surpluses. The reconstruction cost is projected to amount to about 1 percent of China's gross domestic product, while the fuel subsidies account for another 1 percent, JP Morgan estimates.

Remember that China had a fiscal surplus of 0.7 percent of GDP last year, or $174 billion. So even if spending on post-earthquake rebuilding and fuel subsidies were to cause a 1 percent fiscal deficit, that would still be very manageable.

But here's a more important question: Why should China keep domestic fuel prices at about half of the global average?

...more...

[ozymandius]

5. CDC: Tomatoes eyed in salmonella cases in 9 states

ATLANTA - An outbreak of salmonella food poisoning first linked to uncooked tomatoes has now been reported in nine states, U.S. health officials said Tuesday.

Lab tests have confirmed 40 illnesses in Texas and New Mexico as the same type of salmonella, right down to the genetic fingerprint. An investigation by Texas and New Mexico health authorities and the Indian Health Service tied those cases to uncooked, raw, large tomatoes.

At least 17 people in Texas and New Mexico have been hospitalized. None have died, according to the U.S. Centers for Disease Control and Prevention.

.....

In Texas and New Mexico, raw large tomatoes — including Roma and red round tomatoes — were found to be a common factor in the 40 illnesses. But no farm, distributor or grocery chain has been identified as the main source, said Casey Barton Behravesh, a CDC epidemiologist working on the investigation.

"The specific type and source of tomatoes is under investigation," she said.

http://news.yahoo.com/s/ap/20080604/ap_on_he_me/med_salmonella_tomatoes

[ozymandius]

6. Group petitions FDA to ban some food colorings

WASHINGTON - A consumer advocacy group called on the Food and Drug Administration Tuesday to ban the use of eight artificial colorings in food because the additives may cause hyperactivity and behavior problems in some children.

Controlled studies conducted over three decades have shown that children's behavior can be worsened by some artificial dyes, says the Center for Science in the Public Interest. The group noted the British government is successfully pressuring food manufacturers to switch to safer colorings.

Over the years, the FDA has consistently disputed the center's assertion. The agency's Web site contains a 2004 brochure that asks the question: "Do additives cause childhood hyperactivity?"

.....

Dyes are used in countless foods and are sometimes used to simulate the color of fruits or vegetables. The additives are particularly prevalent in the cereals, candies, sodas, and snack foods pitched to kids.

"The purpose of these chemicals is often to mask the absence of real food, to increase the appeal of a low-nutrition product to children, or both," said the center's executive director, Michael F. Jacobson. "Who can tell the parents of kids with behavioral problems that this is truly worth the risk?"

http://news.yahoo.com/s/ap/20080603/ap_on_he_me/med_food_dyes_fda

[ozymandius]

7. Wachovia's mistake spotlights Countrywide deal

CHARLOTTE, N.C. - It's the most basic rule of investing: Buy low, sell high. Former Wachovia Corp. chief executive Ken Thompson couldn't escape his disastrous decision to buy Golden West Financial Corp. for roughly $25 billion at the height of the nation's housing boom. He was pushed out Monday, the same day crosstown rival Ken Lewis was busy defending his deal at Bank of America Corp. to buy Countrywide Financial Corp.

The critical difference: Lewis is paying just $4 billion for his mortgage lending giant.

"I think Lewis might be more imperiled, actually, if he doesn't go ahead and complete the transaction," said Gary Townsend, president of Maryland-based private investment group Hill-Townsend Capital. "The deal has the same perils that Golden West had, except he's not buying Countrywide for nearly the premium that Wachovia bought Golden West at the top of the markets."

.....

As the nation's housing market began to stumble, Wachovia's executives continued to defend the purchase and began to incorporate Golden West's business practices into its own. Thompson only later acknowledged the timing of the deal was poor and he was forced to set aside billions of dollars to cover losses from problem loans.

In April, before Wachovia slashed its dividend 41 percent and reported what was to become a $707 million first-quarter loss, it said it would revise the underwriting policies in its mortgage loan business — a step that could make it harder to take out a home loan at the bank.

http://news.yahoo.com/s/ap/20080604/ap_on_bi_ge/wachovia_the_mistake

[ozymandius]

8. GM plant towns struggle with losses

MORAINE, Ohio - The General Motors Corp. plant in this Dayton suburb is a forest of smokestacks that form the nerve center of this industrial community built along the banks of the Great Miami River.

Each day, about 2,500 workers file inside to assemble the GMC Envoy, Chevrolet Trailblazer, Saab 9-7X and Isuzu Ascender sport utility vehicles.

But some time before the summer of 2010, the Moraine plant will be no more: It is one of four that GM announced Tuesday it will close. And there are fears here that the people — and the city's fortunes — will disappear with it.

.....

The plant closings are casualties of surging fuel prices that are hastening a dramatic shift to smaller vehicles. The 10,000 jobs at the four plants — here, in Janesville, Wis., and in Canada and Mexico — will be lost.

.....

Heitmann said he had thought the area's skilled labor pool and favorable geography would entice the automaker to keep the plant open, but its future was ultimately doomed by what he called an outmoded product — the fuel-guzzling SUV.

http://news.yahoo.com/s/ap/20080603/ap_on_bi_ge/gm_communities

[DemReadingDU]

11. This is devastating

Here's an index to articles in the newspaper, also a timeline history
http://www.daytondailynews.com/n/content/oh/index/business/gmmoraine/index.html

You might have to register to read the articles, but it's free.


More articles, from the local TV station
http://www.whiotv.com/news/16470684/detail.html


edit: a bit of history... (Moraine is a suburb of Dayton, Ohio)
Moraine, an industrial town of about 7,000 residents just off Interstate 75, once had its coffers flooded with tax dollars from all the manufacturing companies here. But many of those businesses have dramatically downsized or left, leaving vast tracts of empty land and people searching for jobs.

The town and surrounding region have deep GM roots. Beyond the tens of thousands employed by the automaker over the years, Delco Electronics Corp., the onetime GM subsidiary that eventually became Delphi Corp., was founded there. Famed engineer Charles Kettering, who invented the self-starting engine while working for GM, lived in a Dayton suburb that now bears his name.

The sprawling factory that's now Moraine Assembly once employed about 18,000 workers, more than six times the current employment. Opened in 1951 as a Frigidaire appliance plant when GM owned the company, the factory was later converted to build Chevrolet S-10 pickups.

more...
http://www.detnews.com/apps/pbcs.dll/article?AID=/20080602/AUTO01/806020381

[ozymandius]

14. My heart breaks for these people.

Because the job losses ripple outward to effect those who peripherally rely on these people being employed. A loss of 3000 jobs can crater the whole town. Just so harsh.

edit: 3000 represents the loss in Moraine from the GM plant. Losses could ripple through plants associated with GM's closings.

[DemReadingDU]

22. Moraine used to employ 18,000

It's very sad. Losses ripple everywhere.

another snippet from the link

"Schools had to plan bus routes to avoid shift change at the factory, when traffic would come to a standstill as workers flooded out of the plant. Bars and restaurants surrounded the factory and overflowed with customers during the week.

Today, few establishments remain -- even a McDonald's across the street closed."

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080602/AUTO01/806020381



edit: with the loss of the NCR cash register factories in the 70s, employing 12000, there is not much left in Dayton, Ohio. It's like a ghost town of its former self.

:(

[ozymandius]

23. Jeebus!

That's like economic warfare. Everyone within a certain radius of the plant lost.

[DemReadingDU]

25. When I came to Dayton in the late 60s for college

there were factories everywhere. Traveling on I-75, you could not see the University of Dayton for all the NCR factories. The factory buildings are all torn down now. Tens of thousands of workers displaced.

GM also had numerous factory buildings scattered throughout Dayton, both downtown and in suburbs. Most are gone. and thousands more workers displaced.

It's really sad.

[fasttense]

53. To add insult to injury

to the recently unemployed in East TN, the gubermint, in all it's wisdom, has begun closing unemployment offices. Now you get to drive 50 miles one way to file for your unemployment.

[TalkingDog]

19. Good God! 10 Thousand People?!!!

The only saving grace here might be the Union jobs. If GM opens another plant, some of these people may be able to get another job.

Damn. 10K jobs would wipe out 1/3 of the jobs in our entire county...... (and after all the textile mills left, we might just be on par)

[ozymandius]

9. Inflation moves up on Bernanke's list of worries (about damn time)

WASHINGTON - Federal Reserve Chairman Ben Bernanke has moved inflation up on his list of worries, suggesting more pointedly than ever that the time for cutting interest rates is over in view of soaring oil and commodity prices and a weakened dollar.

Although the country's economic growth — bruised by housing, credit and financial debacles — is still fragile, Bernanke on Tuesday expressed hope for some improvement in the second half of this year.

At the same time, he sounded a notably louder warning against inflation threats. To this end, he raised his biggest public concern to date about the slide in the U.S. dollar, saying it has contributed to an "unwelcome rise" in inflation.

.....

Despite the rising concerns about inflation, Bernanke signaled the Fed is inclined to leave rates where they are. Boosting them could further weaken the economy's delicate state.

....

The Fed's aggressive rate-cutting campaign has contributed to a lower value of the U.S. dollar. That, in turn, has contributed to increases in the price of imported goods and in consumer prices. "We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations," Bernanke said, in a relatively rare public discussion of the dollar.

http://news.yahoo.com/s/ap/20080603/ap_on_bi_ge/bernanke_economy

[ozymandius]

10. Auctions on eBay: A Dying Breed

Bruce Hershenson, who auctions vintage posters online, is hanging up his eBay gavel. For almost a decade, Hershenson's business epitomized the e-commerce that made eBay famous. He sold rare, collectible, sometimes kitschy memorabilia in online auctions that had a starting bid of 99%. But as the business of buying and selling over the Internet has matured, the thrill and novelty of auctions have given way to the convenience of one-click purchases. Hershenson will hold his last eBay auction June 3. "The auctions are nothing like what they once were," he says. "They won't ever come back."

Auctions were once a pillar of e-commerce. People didn't simply shop on eBay. They hunted, they fought, they sweated, they won. These days, consumers are less enamored of the hassle of auctions, preferring to buy stuff quickly at a fixed price. Hershenson is emblematic of the legions of small business people who built their livelihoods on eBay but -- like eBay itself -- are having to rethink their whole approach to online sales.

Sales at Amazon.com, the leader in online sales of fixed-price goods, rose 37% in the first quarter of 2008. At eBay, where auctions make up 58% of the site's sales, revenue rose 14%. "If I really want something I'm not going to goof around (in auctions) for a small savings," says Dave Dribin, a 34-year-old Chicago resident who used to bid on eBay items, but now only buys retail.

Executives at eBay have gotten the message. Since taking the helm in March, eBay Chief Executive John Donahoe has made it clear that fixed-priced items are key to future growth. EBay's "Buy It Now" business, where shoppers can purchase items at a set price even when the merchandise is also listed in an auction, makes up 42% of all goods sold on eBay.


http://news.yahoo.com/s/bw/20080603/bs_bw/jun2008tc2008062112762

[ozymandius]

12. Cuomo Nears Settlement With Moody's, S&P, People Say (Update1)

June 4 (Bloomberg) -- New York Attorney General Andrew Cuomo is nearing an agreement with Moody's Investors Service, Standard & Poor's and Fitch Ratings that would let the credit-rating firms avoid sanctions over their role in the subprime-mortgage crisis, people with knowledge of the accord said.

The companies won't admit wrongdoing and will have six months to implement policies such as a new fee structure and increased disclosure about the deals they rate, said the people, who declined to be identified before a public announcement that might come as early as this week.

Cuomo would end his nine-month probe of the ratings companies, started as part of a broader investigation into the mortgage industry. Cuomo said in February he was focused on ``the role played by the ratings agencies in the mortgage meltdown'' that caused more than $386 billion in credit losses and writedowns at banks. Investors had anticipated Cuomo would force bigger changes, and Moody's Corp. and McGraw-Hill Cos., parent of S&P, rose in New York trading.

.....

The ratings companies would be paid by bond issuers for any preliminary work reviewing the structure of U.S. subprime- mortgage securities, as well as for a rating on debt, the people said. That way the firms would be paid even if they aren't selected to give a final rating, reducing the incentive to give a favorable assessment. Currently, the companies are paid only if they are selected to give a ranking, the people said.

The companies will also be required to disclose on their Web sites details of collateral backing U.S. subprime mortgage debt they assess, and the issuer of the debt, the people said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ2CHQPudxv4&refer=home

[DemReadingDU]

13. ResCap seeks $2B to remain in business

6/4/08
Residential Capital LLC, the mortgage unit of GMAC LLC, said Tuesday it needs more than three times more cash to stay in business than it estimated just weeks ago.

ResCap estimates it now needs about $2 billion in cash by the end of June to meet liquidity demands, according to a filing with the Securities and Exchange Commission. It earlier estimated it needed just $600 million.

"ResCap may have to restructure," said Christopher Whalen, managing director at the consulting firm Institutional Risk Analytics.

If ResCap were to go out of business, charges associated from the loan losses at the mortgage unit would be a "double whammy" for GMAC, said Meagan Hardcastle of consulting firm O'Keefe & Associates. Losses would further reduce profitability at GMAC and tie up capital that would normally be redeployed elsewhere to help grow the business, Hardcastle said.

GMAC's former owner, General Motors, still holds a large minority stake in the business.

If ResCap were to fail, the impact on GM would be "mostly reputational," Whalen said. GM would be faced with taking a charge on the value of its stake in the company as well, he said.

As the mortgage lending market deteriorated rapidly, starting in the middle of 2007, ResCap posted large losses. It continues to lose money, putting it in danger of failing to meet financial obligations. ResCap lost $859 million during the first quarter.

In an effort to meet the cash requirements, ResCap increased the size of an existing credit facility with GMAC and is selling some assets to GMAC and its majority stakeholder, private equity firm Cerberus Capital Management, which also owns 80 percent of Chrysler LLC.

On Monday, Cerberus denied reports that it recently sold an equity stake in GMAC. Cerberus led a group of investors that purchased the financial unit of General Motors Corp. for $7.4 billion in 2006.

ResCap on Tuesday will draw $450 million from an expanded credit facility with its parent, according to the regulatory filing. The expanded facility allows ResCap to borrow up to $1.2 billion from GMAC. The previous credit facility allowed for borrowings of up to $750 million.

"We are executing on all cylinders," of a plan to improve liquidity at ResCap, a spokeswoman for GMAC said.

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080604/BIZ/806040363/1001/BIZ

[ozymandius]

15. European Stocks Fall, Led by BNP, Shell; U.S. Futures Decline

June 4 (Bloomberg) -- European stocks dropped on speculation banks may need more capital as losses increase, while lower oil and metals prices weighed on commodity producers. U.S. index futures fell, while shares in Asia rose.

BNP Paribas SA slipped to the lowest since March, and Societe Generale SA sank the most in two months after Fitch Ratings said the banks may have to raise additional capital as their finances weaken. Royal Dutch Shell Plc, Europe's largest oil company, slumped to a three-week low, and mining company Anglo American Plc fell the most in a week.

Europe's Dow Jones Stoxx 600 Index declined 1.6 percent to 315.94, the lowest in six weeks, at 11:15 a.m. in London. The index has dropped 21 percent from a six-year high a year ago on concern higher inflation, record oil prices and credit-related losses approaching $400 billion will push the U.S. into recession.

.....

Speculation that Lehman Brothers Holdings Inc. will be forced to raise more capital pushed U.S. stocks down yesterday. Investors in the derivatives' markets are betting the fourth- largest U.S. securities firm may have further to fall. The stock fell the most since March 17 yesterday.

Lehman's balance-sheet troubles threaten the wider financial system unless the bank takes decisive action, the Wall Street Journal said in its ``Heard on the Street'' column.

http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=a9O2IxvErvO0

[TalkingDog]

16. Newest LOAP report finds consumers incrementally less suicidal.

This LOAP (lipstick on a pig) from ABC/WaPo: http://www.reuters.com/article/economicNews/idUSN0338999520080603


American consumers regained some of their lost confidence in the latest week as positive views on the buying climate grew, although overall sentiment remained deep in negative territory, a report showed on Tuesday.

The ABC News/Washington Post Consumer Comfort Index rose to -45 in the week to June 1 from a record low -51 in the previous week. The index, started 22 years ago, ranges from -100 to +100 and its 2008 average is -36.





Okay...Summer is here, Shrub hasn't attacked Iran yet....I'm feeling much less dire. Cool.

[ozymandius]

20. I feel so much better about our future after watching McCain and Obama's speeches last night.

McCain took on the form of a cadaverous husk, sucking the living essence out of his crowd of 250 people. Obama commanded the stage with vigor and eloquence, absorbing and returning the energy of his crowd of 22k.

So yeah, I sense a glimmer of hope for the future that populist ideals will once again make their way into national policy.

[TalkingDog]

26. Agreed. I've been ignoring the (D) squabbling as I find it pointless

Bitching gets you nowhere fast. I'd much rather focus on something I can DO.

Pragmatism first.

Now that things have gelled I might even start taking an interest again.



Well, off to put some plants in the ground while it's still cool.

I check in on you guys later.

[UpInArms]

32. it was interesting to watch the media watching or whatever it is that they do

the huge panoramic view of the crowd with Obama surrounded - the tight shot of Hillary with 10 people on the screen with her and then there was McSame up there on a stage all by himself

and the microphones were open for Hillary and McSame and we got to hear mostly all of their speeches uninterrupted, but when Obama started making points with his speech about what our country needs, Snarlie Gibson and George Staphococcus started having their "talking head" discussion over his comments.

go figure

[TalkingDog]

17. Mortgage applications fall to 6 year low

http://www.reuters.com/article/economicNews/idUSN0440607420080604


U.S. mortgage applications fell for a third consecutive week, reaching its lowest level in over six years as demand for home refinancing loans plunged, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended May 30 dropped 15.3 percent to 502.3 -- its lowest level since the week ended April 19, 2002.

The U.S. housing market is suffering one of the worst downturns in its history. Significantly tighter lending standards and an unwieldy supply of homes for sale are just some of the factors preventing the U.S. housing market from recovering from its two-year-long slump.

[ozymandius]

18. Lehman Bros is a pox on Wall Street with more trouble coming

Lehman Puts, Default Swaps Show Investors Bet on Further Drop

June 4 (Bloomberg) -- Investors in the options and derivatives markets are betting Lehman Brothers Holdings Inc. has further to fall amid concern the fourth-largest U.S. securities firm may need a capital injection.

Options traders increased their bearish positions to a two- month high yesterday, after analysts said Lehman may report its first quarterly loss since going public in 1994. The cost of protecting debt sold by Lehman from default rose to 240 basis points from 150 basis points in the credit-default swaps market during the past week, data compiled by UniCredit SpA show.

.....

Lehman may seek funds from overseas investors, including at least one in South Korea, the Wall Street Journal reported today without citing sources. The company's shares dropped 9.5 percent yesterday to an almost five-year low of $30.61 in New York Stock Exchange composite trading, bringing this year's decline to 53 percent, the worst performance on the 11-member Amex Securities Broker/Dealer Index.

---

Lehman shares plunge on capital raising fears

NEW YORK, June 3 (Reuters) - Lehman Brothers Holdings Inc shares fell as much as 14 percent on Tuesday to their lowest level since the Bear Stearns meltdown on concern that Lehman, Wall Street's smallest surviving major brokerage, may need to raise more capital.

Lehman shares temporarily cut their losses after the company denied market rumors that it had borrowed directly from the Federal Reserve.

Lehman said it last used the Fed credit line on April 16 "for testing purposes." It also said in an e-mailed statement that the company "finished the second quarter well above $40 billion" in terms of liquidity.

.....

Lehman's market value is about $18.7 billion, based on Monday's closing stock price of $33.83, according to Reuters data.

According to recent analysts' research notes, Lehman has been hurt by hedges used to offset losses in various securities.

---

Lehman buying back its shares: report

SAN FRANCISCO (Reuters) - Lehman Brothers Holdings Inc began using its capital to buy back its shares in the wake of its falling stock, the Wall Street Journal reported on Tuesday, citing a person familiar with the matter.

It was unclear how much stock Lehman bought, the Journal said.

---

Panic sirens are blaring to my ears.

[Robbien]

48. NYT has an article on the "rabble-rousing hedge fund manager"

who is being a big thorn in the side of Lehman.

http://www.nytimes.com/2008/06/04/business/04lehman.html?em&ex=1212724800&en=e6f6dd8fe6ee09a3&ei=5087%0A

David Einhorn thinks another big Wall Street bank is headed for trouble — and he is not being quiet about it.

For eight months now, Mr. Einhorn, a rabble-rousing hedge fund manager, has pilloried the venerable Lehman Brothers in an effort to drive down the bank’s stock price, which he is betting against.

Lehman Brothers is not amused. In recent weeks, the bank’s chief financial officer, Erin Callan, has tried privately to rebut Mr. Einhorn to nervous investors, who have feared for Lehman’s health ever since Bear Stearns succumbed to a panic. But despite Ms. Callan’s efforts, Lehman’s stock keeps falling: It tumbled 9.5 percent more on Tuesday, in a deluge of selling, bringing its loss for the last 12 months to 59 percent.

. . .

Mr. Einhorn, who runs a $6 billion hedge fund called Greenlight Capital, has been profiting from the Lehman’s growing pain. Critics say he is needlessly fanning fears about the precarious health of the financial industry at the very moment executives are struggling to stabilize their ailing companies. Many on Wall Street still wonder if hedge funds like Greenlight helped bring down Bear Stearns and spread false rumors about the bank, a possibility the Securities and Exchange Commission is investigating.

In an interview on Monday in his Midtown offices, Mr. Einhorn, fresh from his latest round of television appearances, said he was not out to tell Lehman Brothers how to fix its problems. He questioned how the company valued the assets on its books, and whether it was disclosing all the risks it faces. Investors have good reason to question banks: Worldwide, financial companies have suffered more than $380 billion in write-downs and credit-related losses in the last year, laying bare their shoddy risk management. Lehman has been singled out because of the large role it played in the mortgage market and its reluctance to disclose information about its assets compared with other Wall Street banks.

“Lehman has been one of the deniers,” Mr. Einhorn, 39, said.

. . .

Mr. Einhorn instigated the latest dive in Lehman’s stock price two weeks ago when he encouraged other investors to short the stock at a large conference in New York. When Standard & Poor’s lowered its debt rating for Lehman and several other Wall Street banks on Monday, Mr. Einhorn joined the ratings agency’s conference call on Tuesday and asked whether the agency reviews Lehman’s valuations of its assets.

. . .

It is impossible to quantify Mr. Einhorn’s influence on Lehman’s stock price. But hours before his speech two weeks ago, trading volume exploded for Lehman stock puts, which are options to sell the stock and profit if its falls. That day, more than 200,000 put contracts against Lehman were sold, up 49 percent from recent typical Lehman put trading.

Brad Hintz, the banking analyst at the Sanford C. Bernstein & Company and Lehman’s former chief financial officer, said he could hardly walk a few feet at a conference at the Waldorf-Astoria last week without having investors ask him about Mr. Einhorn’s views.

[Robbien]

49. Lehman's leverage ratio is pretty bad. $32 leverage for each dollar of assets

Lehman's leverage ratio is about the same as average hedge funds.

Yikes.

[ozymandius]

56. And if Lehman is ever called....

[TalkingDog]

21. Wms Sonoma reports lower profit.

http://www.reuters.com/article/marketsNews/idUSWNAS684820080604

Article in toto:


Furnishings retailer Williams-Sonoma Inc reported a lower quarterly profit on Wednesday as the soft U.S. economy and weak housing market hurt sales.

Earnings were $10.4 million, or 10 cents a share, for the first quarter that ended May 4, compared with $18.2 million, or 16 cents a share, a year earlier.

The company reduced its revenue outlook for the balance of the year, citing industry wide sales declines in the difficult economic environment.

[TalkingDog]

24. United Airline parent: further reductions

http://www.reuters.com/article/businessNews/idUSN0342147920080604

UAL Corp, parent of United Airlines, plans to reduce its mainline fleet by another 70 aircraft by the end of 2009 and announce further job cuts, the Wall Street Journal said on Wednesday.

The airline is expected to announce the planned cuts to its fleet of 460 aircraft later on Wednesday, the paper reported, citing people familiar with the matter.

The airline will drop 64 Boeing 737s by the end of next year, and also remove six jumbo 747s, the paper said.

snip
UAL will also announce additional cuts of salaried and management workers, with cuts of unionized positions to follow later, the paper said.

[ozymandius]

37. United Airlines cutting up to 1,600 jobs, 100 planes

NEW YORK (MarketWatch) -- United Airlines on Wednesday confirmed plans to reduce the number of salaried and management employees and contractors by 1,400-1,600, including the previously announced 500 employee reduction by year-end, as it removes 100 aircraft from its main fleet. The plane reduction includes a previously announced cut of 30 Boeing 737s as it reduces its domestic capacity in the fourth quarter by 14% year over year.

very short update

http://www.marketwatch.com/news/story/united-airlines-cutting-up-1600/story.aspx?guid=%7BEFCAC74E-FD26-4743-BAC8-A573730A2B8A%7D&dist=msr_1

[UpInArms]

27. dollar watch

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

Last trade 73.276 Change -0.055 (-0.08%)

US Dollar: Fed Chairman Bernanke Jumps on Hawkish Bandwagon, Finally Notes Dollar Weakness

http://www.dailyfx.com/story/bio1/US_Dollar__Fed_Chairman_Bernanke_1212539672923.html

The US dollar rocketed higher on Tuesday following a speech by Federal Reserve Chairman Ben Bernanke, in which he issued hawkish commentary and finally commented on weakness in the national currency. Indeed, Bernanke ended any existing debate that the Fed would cut rates in June, as he said that “policy seems well positioned to promote moderate growth and price stability over time.” Unsurprisingly, he noted the upside inflation risks associated with the surge in commodities. However, it appears that there is now a fear within the Fed that the public’s long-term inflation expectations will rise, and “could ultimately become self-confirming,” as consumer face rising prices everywhere from the gas station to the grocery store. Furthermore, Bernanke even brought the US dollar into focus over a month after the currency tumbled to record lows versus the euro. The depreciation of the currency has been a contributor to the jump in import and consumer prices, but with the US Treasury highly unlikely to intervene in the foreign exchange markets anytime soon, Bernanke’s dollar comments should be taken as nothing more than lip service. Looking ahead to Wednesday, the greenback faces event risk from ISM services, and traders should watch this market-moving number to see if it manages to hold above 50 to signal expansion in the sector.

...more...

US Dollar Rallies As Fed Chairman Bernanke Issues Hawkish Speech, Focuses on Dollar

http://www.dailyfx.com/story/topheadline/US_Dollar_Rallies_As_Fed_1212501016119.html

During a scheduled speech at 9:00 EDT at the International Monetary Conference in Barcelona, Federal Reserve Chairman Ben Bernanke issued hawkish commentary and focused on the value of the US dollar, which was somewhat unusual as he has said little regarding the currency even as it hit record lows just over a month ago.

In the speech, Bernanke suggested that further rate cuts would be unnecessary, as “policy seems well positioned to promote moderate growth and price stability over time.” Unsurprisingly, he said that high inflation pressures generally reflected “sharp increases” commodity prices, and while “pass-through” to wage costs and consumer prices were limited, “the continuation of this pattern is not guaranteed and will bear close attention.” However, Bernanke’s pronounced focus on upside inflation risks from continued gains in commodity prices were the most hawkish comments at all. In fact, there is now a fear within the Federal Reserve that the public’s long-term inflation expectations will rise, and “could ultimately become self-confirming.” Just last week, Fed Vice Chairman Donald Kohn expressed similar concerns, and it is becoming clear that the central bank is having difficulty managing these inflation expectations, as record high oil prices prove to be a bit more convincing.

Meanwhile, Bernanke also noted that the Federal Reserve is aware of the negative implications of a weak dollar on inflation and inflation expectations. However, he expressed confidence that the Federal Reserve’s dual mandate to foster maximum sustainable employment and price stability would be a key factor to ensure “that the dollar remains a strong and stable currency.”

The US dollar has surged since the beginning of the speech, as the currency is up 150+ points versus the euro and Swiss franc, and up 100+ points versus the Japanese yen and British pound. Fed fund futures – which were pricing in only a 2 percent chance of a 25bp rate cut in June – are now fully pricing in no change in rates.

...more...

And so what? just because this lying asshole "noticed" the dollar (huh?) that means what? Once again, I will say - nothing has changed with the fundamentals. Our debt is out of control, the wars are eating our children and our treasury and Rome is burning.

[ozymandius]

43. Who gave him the dope slap?

Bernanke's alarm went off almost eleven months later than the alarm here at DU.

[AnneD]

59. Morning Marketeers...

:donut: and lurkers. Do you think someone slipped him the DU Stock Watch Thread website? If he has been reading it-he would be making more severe changes. I really feel for Obama's team going in. I hate to even think what lies hidden an I do hope they prosecute. These bastards should not get away with it. I think Edwards needs to get on this ASAP as possible. How funny-all the 'power' the GOP gave to themselves can now be used to help prosecute them- warrent-less wiretapping and all.

I have much to do today so will be popping in now and again.

Happy hunting and watch out for the bears.

[UpInArms]

33. Apparel spending slides in May: SpendingPulse

http://news.yahoo.com/s/nm/20080604/bs_nm/retail_apparel_survey_dc

CHICAGO (Reuters) - Consumer spending on apparel and footwear slid during May as buyers scaled back on discretionary purchases amid a sluggish U.S. economic environment, according to a SpendingPulse report released on Wednesday.

May sales were down 1.1 percent versus May 2007, with women's apparel declining 5.4 percent and footwear decreasing 1.0 percent. Men's apparel posted a gain of 4.8 percent.

Those declines could continue as consumers are hammered by higher gasoline and food prices, a falling housing market and the U.S. credit crisis.

"I think you probably need to see consumer confidence numbers start to come up," Michael McNamara, vice president of SpendingPulse, said in an interview. "You have to see a general lift, I think, in the overall economy before some of these apparel numbers will start to have a more consistent rebound."

...more...

[UpInArms]

35. FACTBOX: Obama, McCain proposals for U.S. economy

http://www.reuters.com/article/bondsNews/idUSN2841936220080604?sp=true

(Reuters) - Trouble in the subprime mortgage market has led to a wave of home foreclosures and a broader economic slowdown, heightening voter anxiety before the November election.

Following are some of the key economic positions of Sen. John McCain, the presumptive Republican nominee, and Sen. Barack Obama, who claimed the Democratic nomination for November's U.S. presidential election.

REPUBLICAN ARIZONA SEN. JOHN MCCAIN

* Proposed to spend up to $10 billion to allow some homeowners to trade high-interest, adjustable-rate mortgages for safer, fixed-rate loans.

* Proposed a suspension of the 18.4 cent federal gas tax and 24.4 cent diesel tax during the summer.

<snip>

DEMOCRATIC ILLINOIS SEN. BARACK OBAMA

* Called for greater government regulation of the U.S. financial system and proposed a new $30 billion economic stimulus plan to help homeowners.

* The $30 billion plan includes a $10 billion foreclosure prevention fund to help people keep their homes. It also includes $10 billion in relief for state and local governments hit hardest by housing crisis.

* Outlined six "core principles for reform" that would give the Federal Reserve supervisory authority over any financial institution to which it might make credit available and calls for reform and streamlining of financial regulatory agencies.

...more...

[jdog]

57. Why?

"Outlined six "core principles for reform" that would give the Federal Reserve supervisory authority over any financial institution to which it might make credit available and calls for reform and streamlining of financial regulatory agencies."


Why would anyone want to give the Federal Reserve more authority????????

[ozymandius]

58. I agree with your objection.

The Federal Reserve is not a government agency. I believe this authority should rest with the Treasury Department, so to be subject to direct congressional oversight.

[Nickster]

62. I think you answered your own question. Everything has been about removing Congressional

oversight in the last 8 years. Hopefully that will change in the new year.

[ozymandius]

38. pre-open numbers and blather

08:32 am : S&P futures vs fair value: -3.2. Nasdaq futures vs fair value: -7.9. Futures quickly give the small boost they received from the better than expected ADP employment report, and then recover some lost ground on a better-than-expected productivity reading. Just hitting the wires, first quarter nonfarm productivity was revised to a gain of 2.6% from 2.2% (consensus +2.5%).

08:15 am : S&P futures vs fair value: -3.4. Nasdaq futures vs fair value: -4.5. Futures get a modest boost on a report that May private payrolls unexpectedly rose. Just reported, ADP reported that nonfarm private employment grew by 40,000 in May. Economists forecast a 30,000 drop in payrolls. This report has been somewhat spotty compared to the government's jobs report, which includes both public and private nonfarm payrolls and is set for release on Friday. In other news, J.M. Smucker (SJM) is buying buying Folgers from Procter & Gamble (PG) for roughly $3.3 billion in stock.

08:00 am : S&P futures vs fair value: -6.0. Nasdaq futures vs fair value: -8.5. Futures indicate a lower start ahead of a batch of economic data, including May ADP private employment payrolls (8:15 ET), revised first quarter productivity (8:30 ET) and ISM Services (10:00 ET). In addition, the government's weekly energy inventory report is set for release at 10:30 ET. Meanwhile, Lehman Brothers (LEH) is once again in the spotlight. The Wall Street Journal reports Lehman is looking overseas for capital, and rumors that the firm was buying back its own shares yesterday were true, citing souces.

[ozymandius]

41. updating

09:16 am : S&P futures vs fair value: -5.0. Nasdaq futures vs fair value: -12.0.

09:00 am : S&P futures vs fair value: -4.7. Nasdaq futures vs fair value: -11.3.

[wizstars]

39. Make it 231 days til the start of the OBAMA Administration

Wa-hoo--Can't Wait!!

[MilesColtrane]

40. Personal anecdote re: falling dollar and soaring oil prices

The best makers of strings for symphonic instruments are European.
I usually buy double bass strings from German manufacturers.

A year and a half ago 1 set of bass strings (4 strings) costs, with shipping about 90 dollars.

Yesterday I ordered a set and it cost 200 dollars.

Damn!

May have to switch to washtub bass soon.

[TalkingDog]

54. Pfffffth.... I know a guy that plays washtub bass.

Wails on it too. The one is the picture is a cheap foreign-made knock off.

An American-made washtub bass has to have that patina of hard water lime and touches of rust. And while string is okay, the cotton has too much give. Heavy gauge nylon fishing line is good or bungees which give you a "fatter" sound.

Willow branch or maple, even dogwood are both strong and flexible enough for the neck. That stick he's got is going to snap if he tries to bow it too much.


BB King started out by taking the wire that held his momma's broom head on the broom and tying to the porch railing to make a rude guitar.

you do what you gotta do......

[ozymandius]

42. opening down

9:30
Dow 12,394.96 Down 7.89 (0.06%)
Nasdaq 2,473.17 Down 7.31 (0.29%)
S&P 500 1,375.33 Down 2.32 (0.17%)
10-Yr Bond 3.858% Down 0.04
NYSE Volume 41,441,371.094
Nasdaq Volume 36,334,796.875

[DemReadingDU]

44. WSJ: Ed McMahon May Lose Beverly Hills Home

6/4/08
Ed McMahon, the longtime sidekick to television star Johnny Carson, faces the possible loss of his Beverly Hills home to a foreclosure action initiated by a unit of Countrywide Financial Corp.

Howard Bragman, a spokesman for Mr. McMahon, said late Tuesday that his client is having "very fruitful discussions" with the lender and hopes to find a resolution. It isn't clear whether that would allow the 85-year-old Mr. McMahon and his wife, Pamela, to remain in the six-bedroom home.

ReconTrust, a unit of mortgage lender Countrywide Financial, on Feb. 28 filed a notice of default on a $4.8 million Countrywide loan backed by Mr. McMahon's home. The notice was filed with the Los Angeles County Recorder's Office but hasn't previously come to light. According to the filing, Mr. McMahon was then about $644,000 in arrears on the loan. It isn't clear whether Countrywide still owns the loan or is acting on behalf of investors who acquired it. Public records also show that Mr. McMahon had a separate home-equity line of credit from Countrywide of up to $300,000 secured by the same house.

more...
http://online.wsj.com/article/SB121254369208443705.html


In the 1990s, McMahon was reputed to be worth in excess of US$200 million in real estate holdings (particularly in Malibu) and real estate partnerships, although his net worth declined somewhat, due to several divorce settlements and a nationwide drop in real estate.

In April 2002, McMahon sued his insurance company, insurance adjusters, and several environmental cleanup contractors over breach of contract related to negligence in cleaning up water damage after a broken water pipe was repaired in his Beverly Hills, California house. The lawsuit alleged that moisture from the pipe break caused toxic mold to spread, sickened his wife, Pamela, and members of the household staff, killed the family dog, Muffin, and ruined his priceless memorabilia collection. The case was reported to have been settled out of court for US$7.2 million.

more...
http://en.wikipedia.org/wiki/Ed_McMahon


:nopity: :nopity: :nopity: :nopity:


Edit: I feel badly about anyone losing their house, but he made $7.2 million from a lawsuit, which he could have paid off his $4.8 million house.

[Dr.Phool]

45. He can always win the Publishers Clearinghouse Sweepstakes.

In fact, he may have already.

[specimenfred1984]

67. Here'ssssssssssssssss Fascism!

YES!!! Hahahahahahah.

[Robbien]

46. Recovery in financial markets may take up to 3 years

Credit Crisis: The subprime mortgage crisis and the resulting collapse in credit and stock markets is far deeper than previous market collapses such as Black Monday 1987 and the dot.com bubble of 2001, and it may be up to three years before the markets recover fully, a detailed study by Mazars, the international audit, accountancy, taxation and business advisory firm has concluded.

“It took markets almost two years to recover from Black Monday 1987 but that was largely confined to stock markets. Our index shows that the current situation, in terms of the global economy, is much more broad-based and deeply-rooted. Globally there is a serious crisis of confidence which may delay recovery for up to three years,”Mazars Managing Partner Joe Carr stated.

http://www.finfacts.ie/irishfinancenews/article_1013790.shtml

Meanwhile over at CNBC, well fed guest commentator says credit crunch effect on Wall Street is over, done, kaput. Mr. Doublechin said don't pay attention to any of the naysayers just buy into this market. There's only good deals to be had as far as the eye can see.

[Dr.Phool]

50. And where might I purchase some of the shit that gave him the munchies?

[Nickster]

47. ADP Says U.S. Companies Added 40,000 Workers in May

Wow! They're happy now when a job report is 40,000????

http://www.bloomberg.com/apps/news?pid=20601087&sid=aUR_DkCLCJd0&refer=home

June 4 (Bloomberg) -- Companies in the U.S. unexpectedly added jobs in May by the most since January, a private report based on payroll data showed today.

The 40,000 increase followed a revised gain of 13,000 for the prior month that was more than previously estimated, the report from ADP Employer Services showed.

Overseas orders are allowing firms to retain workers even as the prolonged housing slump and rising energy prices slow demand at home. The economy may post another drop in total payrolls for May, the median forecast in a Bloomberg News survey shows before a government report in two days.

``The labor market is holding up reasonably well,'' Mark Vitner, senior economist at Wachovia Corp. in Charlotte, North Carolina, said before the report. ``Businesses really didn't hire a lot more when demand was strong and they haven't had much need to slash jobs.''

[Dr.Phool]

51. And, as UIA points out at the top of the thread

ADP is always wrong.

[MilesColtrane]

52. Scott Burns: Investors pile up commodities, shun dollars

11:47 AM CDT on Sunday, June 1, 2008

Lots of explanations are offered for the soaring prices of oil and commodities. You can choose from: (a) the terrorism premium, (b) speculators, (c) peak oil theory, (d) shrinking net exports from oil-producing nations, (e) rising demand from emerging market economies or (f) any combination of the above.

But another reason may be as important: the futility of holding dollar-based investments.

-snip-

Savers were shocked on May 1 when the Treasury announced that I Savings Bonds issued during the next six months would carry a premium of zero. You read that right. Zero.

Even so, the annualized “return” on the bonds for the next six months will be 4.84 percent, the annualized inflation rate.

The Treasury Department basically told savers it would condescend to take their money, use it for whatever it chooses, and return it adjusted for inflation.

The inflation adjustment will be deemed “interest,” however, so when the bonds are redeemed, savers would, in effect, be taxed for lending money to their government.


http://www.dallasnews.com/sharedcontent/dws/bus/columnists/sburns/stories/DN-burns_01bus.State.Edition1.4604e64.html

[Hugin]

55. ~ 11:00 EST: Queue up the: "Liechtensteiner Polka"

Index Last Change % change
DJIA 12474.26 +71.41 +0.58%
NASDAQ 2509.64 +29.16 +1.18%
S&P 500 1384.81 +7.16 +0.52%

The Markets have chosen to do their usual thing and go UP on the release of appaling Employment Data... or perhaps
the $75 Billion (with a 'B') pump has something to do with it. (Secretly, I'm hoping it's a reaction to Sen. Obama's
move to presumptive status and the end of the Primary Season. :woohoo: )

But, Here it IS! (Just for Ozy!)

"Liechtensteiner Polka"

Engman Version:

"Yes, this is the Liechtensteiner Polka my treasure!
Polka my treasure! Polka my treasure!
Because, no Liechtenstein remains on its place!
In his place my treasure!
You can be pushing, pushing, pushing
Settling in both eyes sch'n.
It muu love, love, love,
And the love, which is already!
Oh yes, a Liechtenstein has the Polka's;
The Rabatz makes my treasure!

The old gentleman of Liechtenstein, Yes! Yes! Yes!
The konntenichtalleine, No! No! No!
Erschickte his messengers, Yes! Yes! Yes!
When musicians from me
And sic sends me into the house!
The Los Musiklegte,
Since wubten Klein and GroB:

Yes, this is the Liechtensteiner Polka my treasure!
Polka my treasure! Pol-ka my treasure!
Because, no Liechtenstein remains on its place!
In his place my treasure!
You can be pushing, pushing, pushing
Settling in sch'n both eyes.
It muu love, love, love,
And the love that is already!
Oh yes, a Liechtenstein has the Polka's;
The Rabatz makes my treasure!"

Das Deutchish Version:

Ja, das ist die Liechtensteiner Polka mein Schatz!
Polka mein Schatz! Polka mein Schatz!
Da, bleibt doch kein Liechtensteiner auf seinem Platz!
Auf sei-nem Platz mein Schatz!
Man kann beim Schieben, Schieben, Schieben
Sich in beide Augen sch'n.
Man muu sich lieben, lieben, lieben,
Und die liebe, die est schon!
Oh ja, so eine Liechtensteiner Polka die hat's;
Die macht Rabatz, mein Schatz!

Der alte Herr von Liechtensteiner, Ja! Ja! Ja!
Der konntenichtalleine sein, Nein! Nein! Nein!
Erschickte seine Boten aus, Ja! Ja! Ja!
Schaut mir nach Musikanten aus
Und schickt sic mir in's Haus!
Die Musiklegte los,
Da wubten Klein und GroB:

Ja, das ist die Liechtensteiner Polka mein Schatz!
Polka mein Schatz! Polka mein Schatz!
Da, bleibt doch kein Liechtensteiner auf seinem Platz!
Auf seinem Platz mein Schatz!
Man kann beim Schieben, Schieben, Schieben
Sich in beide Augen sch'n.
Man muu sich lieben, lieben, lieben,
Und die liebe, die est schon!
Oh ja, so eine Liechtensteiner Polka die hat's;
Die macht Rabatz, mein Schatz!"
"
http://www.hudsoncity.net/culture/german/lichtens.mid <-- For those who'd like the music to sing along with.

[Demeter]

60. Larry Beinhart: Bush, Bushit, Boom, and Bust

http://www.buzzflash.com/articles/contributors/1619

Did you know there is an "official arbiter of when recessions begin"? It's called the National Bureau of Economic Research (NBER), a "private, non-profit, non-partisan," organization. It boasts that 16 of the 31 American Nobel Prize winners have been researchers there.

The president of NBER announced on March 15 that we are now officially in recession. "It will last longer and be deeper than the last two recessions, which lasted only 8 months from peak to trough. It could well be longer and deeper than the recession in the early 1980s that lasted 16 months."

The reality - for ordinary people - is that the economy has actually been in recession since 2001. It began with an official recession. Which officially lasted but eight months. Then there was a "recovery."

But it was a very peculiar recovery. It was a "jobless recovery." The first ever. Somehow the economy had recovered, but the U.S. continued to lose jobs in the private sector. Employment increased in the public sector, and people in the National Guard called up to service in the War on Terror were counted as employed. But even with that added in, there was actual job loss for several years.

In Bush's second term, there was some job growth, but not enough to keep pace with the increase in population. Yet, according to the media -- the NY Times, the Wall Street Journal, CNN, CBS, MSNBC -- the recovery was "robust." Unemployment was low. Growth was high. And they sang this refrain at least through the end of 2007.

Not only were jobs being lost, jobs were paying less. Median income was declining. Nor did it ever turn around. From 2001 to 2007, average family income went down by over $1,000.

"This has never happened before, at least not for as long as the government has been keeping records. In every other expansion since World War II, the buying power of most American families grew while the economy did." (Economic Scene: For Many, a Boom That Wasn't, by David Leonhardt, The New York Times, April 9, 2008)

There was another peculiarity. Almost entirely unnoticed. The cost of living was going up. Medical care, higher education, gas, heating fuel, housing, and local taxes, all inescapable costs were going up. But the cost of living, as reported by economists, was going up a lot less, and, it was reported, inflation was low.

We've had two economies. There's the one ordinary people live in, with declining wages, higher prices, and lowered expectations. The other was a boom in which the rich got much, much richer. How was that possible?

The administration determined to goose the economy by giving rich people more money by cutting their taxes, without cutting the costs of government, indeed, while expanding government. The idea -- and there are a lot of people who truly believe this -- is that if you give rich people money, they will invest it in productive ways, expanding businesses, or financing new ones, thereby creating more wealth and new and better jobs -- all of which will generate new taxable wealth and so, in the end, more than pay for the deficits that are created.

The rich people, however, did not invest in new and exciting enterprises. They skipped that part. They simply sold the money, which was a lot simpler. That is, they put it in the "financial sector."

Suddenly, the financial sector -- banks, investment companies, brokerages, insurance companies, real estate funds, hedge funds and the like -- had an influx of money. So they went out and sold it aggressively. That is, they made it easy to borrow. The government was hand in glove with them, keeping interest rates low and deregulating and ignoring regulations.

They sold debt. There was a real estate bubble -- that should have been a warning sign. Real estate is a passive investment, so a bubble is a signal that there is a lot of money around with no productive place to go. No businesses expanding. No hot new industries. No genuine growth.

The real estate bubble is now routinely described as the root of our current economic problems. That's not true. It's a symptom. Here's the root of the problem. The Bush boom was created by borrowing against our personal wealth and our nation's wealth.

-- The national debt in 2001: $5.7 trillion
-- The national debt in Jan. 2008: $9.2 trillion

-- Total consumer credit debt in 2001: $7.65 trillion
-- Total consumer credit debt in 2008: $12.8 trillion

-- Amount Americans earned than spent in 2001: +2.3%
-- Amount Americans are earning than spending in 2008: -0.5%

-- U.S. budget surplus in 2000: +$236 billion
-- U.S. budget deficit in 2007: -$354 billion

-- U.S. trade deficit in 2000: $380 billion
-- U.S. trade deficit in 2007: $759 billion

State of the Union 2008: By the Numbers, Reuters, 1/28/2008


The U.S. economy "grew" by about 37% in the Bush years, about $4 trillion. Our national debt increased by $3.5 trillion. Our consumer debt increased by over $5 trillion. It costs us at least $8.5 trillion to "grow" the economy by $4 trillion. Worse, that growth does not consist of new businesses, manufacturing jobs, improved infrastructure, better education, more opportunity, environmental improvements, alternative energy, more consistent and affordable health care. The entire increase is a bubble, one that consists entirely of debt.

There are two things that make all this even stranger. As with so much that has happened in the Bush years, is that it has happened invisibly. Even now, the mainstream economists, the mainstream media and our mainstream politicians seem completely oblivious.

The second is that we are doing more of what got us here. We are doing it as Bush business as usual, passing another war spending bill with no plan to pay for it, and running more deficits. On top of that, as the "solution" to our economic problems, we've passed a $152 billion "stimulus" package that consists of handing out money, again, without any way to pay for it. Meanwhile, economists who get air time speak about increasing consumer confidence so they'll buy -- though the numbers say consumers have already borrowed more than they can make -- and getting lenders to loan more -- without noticing that the problem is the lack of productive places to put the money.

Without some serious changes to the very fundamentals of how we handle our economy, it seems that some sort of serious crash is likely, perhaps inevitable. Can the American theology of pseudo-free market magic change before that happens? Can reality enter the dialogue through an intellectual process? Or will reality have to kick us in the teeth, before anyone wakes up?

A BUZZFLASH GUEST CONTRIBUTION
Larry Beinhart is the author of Wag the Dog, The Librarian, and Fog Facts: Searching for Truth in the Land of Spin. All available at nationbooks.org. His new novel Salvation Boulevard will be published in September 2008 by Nation Books. Responses can be sent to [e-mail].


SORRY IF YOU'VE SEEN IT ALREADY--I'M TRYING TO EMPTY MY EMAIL.....DEMETER

[UpInArms]

63. Esmark says unable to refinance long-term debt

http://www.reuters.com/article/bondsNews/idUSWNAS695120080604

NEW YORK, June 4 (Reuters) - Steel company Esmark Inc (ESMK.O: Quote, Profile, Research) said on Wednesday it has been unable to refinance its debt on a long-term basis, raising "substantial doubt" about its ability to continue as a going concern.

The statement was required by a Nasdaq rule, the Wheeling, West Virginia-based company said.

It was prompted by Esmark's annual report on Form 10-K, filed on May 20, which included an explanatory paragraph from the company's accounting firm.

Last week, Russian metals and mining company OAO Severstal (CHMF.MM: Quote, Profile, Research) commenced its $17 per share tender offer for outstanding common stock of Esmark.

...more...

here's what Esmark is:

Esmark Inc (Esmark), formerly Wheeling-Pittsburgh Corporation, incorporated on March 9, 2007, is a holding company. The Company, through its wholly owned subsidiaries, Wheeling-Pittsburgh Corporation (Wheeling-Pittsburgh) and Esmark Steel Service Group, Inc. (ESSG), manufactures, processes, distributes and sells steel products. During the year ended December 31, 2007, the Company operated in two segments: Mills Operations (Wheeling-Pittsburgh) and Downstream Operations (ESSG). Wheeling-Pittsburgh, through its principal operating subsidiary, Wheeling-Pittsburgh Steel Corporation (WPSC), produces steel and steel products using both integrated and electric arc furnace technology. Wheeling Corrugating Company (WCC), an operating division of WPSC, manufactures fabricated steel products for the construction, agricultural and highway markets. ESSG is a steel services company that is engaged in the processing and distribution of metals, including just-in-time delivery of value-added steel products (hot-rolled, cold-rolled, hot-dipped galvanized, electrogalvanized and pre-painted) to approximately 2,000 core customers located in the Midwestern United States. On March 13, 2008, WPSC divested its 35.7% interest in Wheeling-Nisshin Inc.

Wheeling-Pittsburgh’s operation includes one operating blast furnace, one electric arc furnace (EAF), one basic oxygen furnace (BOF) with two vessels, a two-strand continuous slab caster with annual production capacity of approximately 2.8 million tons, an 80-inch hot strip mill with an estimated annual hot rolling capacity of 3.4 million tons, and pickling and coil finishing facilities. WPSC has ownership interests in two joint ventures. WPSC owns 50% of the outstanding common stock of Ohio Coatings Company (OCC) and owns a 50% joint venture interest in Mountain State Carbon, LLC (MSC).

Mill Operations (Wheeling-Pittsburgh Corporation)

Wheeling-Pittsburgh produces flat-rolled steel products, including hot-rolled, cold-rolled and coated steel products and produces fabricated steel products, including roll-formed corrugated roofing, roof deck, form deck, floor deck, bridgeform and other products. Flat rolled steel products are sold to converters and processors and steel service centers, and to customers in the construction, agriculture, highway and container markets, substantially all of which are located in the United States. All of Wheeling-Pittsburgh’s operating assets are located in the United States.

[UpInArms]

64. Lazard CEO says Wall St leverage fueled bubble

http://www.reuters.com/article/bondsNews/idUSN0441657420080604

NEW YORK (Reuters) - Lazard Ltd (LAZ.N: Quote, Profile, Research) Chairman and Chief Executive Bruce Wasserstein said on Wednesday many of the financial market's current woes stem from years of too much risk-taking and not enough common sense among Wall Street executives.

The famed deal maker told a Wall Street Journal-sponsored gathering of reporters and industry executives that, in recent years, broker-dealers increased their leverage, or total assets relative to equity, to excessive levels.

Equally damaging, the methods banks had used to monitor their risk-taking during the boom years were shown to be inadequate when markets turned last summer. Reliance on metrics such as value-at-risk pushed aside common sense.

"Obviously, when you have a runaway increase in volume in transaction volumes of securities and liabilities and you leverage the equity at that sort of rate, you dramatically increase the risk," Wasserstein said.

...more...

[Ghost Dog]

65. Hi. I'd like regular folks here in this thread to know that I have started taking notes,

and jotting down some thoughts, over there: http://scratchpad-siboney.blogspot.com/

At the bottom you'll find the start of a compilation of some personal (and some not so personal) photos and other images...

[54anickel]

68. Hey GD, that's the first I heard about the strange clouds before the big quake - I've been offline

for far too long lately! :hi:

[Ghost Dog]

69. Observations. On the ground.

Makes one think, huh? :hi:

[ozymandius]

70. Ghost Dog this is splendid.

I'm flattered that you included some of yesterday's discussion of the wage-price spiral. At a second glance, I could have been clearer.

But nonetheless, splendid, indeed. I am impressed at the quality of posts you've harvested from DU.

[DemReadingDU]

66. Bob Evans Restaurants up 18.5%

6/4/08 Bob Evans shares rise after company reports 4th-quarter profit hike, offers 2009 guidance

Shares of Bob Evans Farms Inc. jumped Wednesday after the casual dining company offered fiscal 2009 guidance and said its fourth-quarter profit climbed 5 percent.

Shares climbed $5.34, or 18.5 percent, to $34.43 in heavy midday trading.

Bob Evans also reported its same-store sales, or sales at stores open at least a year, for May. Bob Evans said its same-store sales rose 4.4 percent at its namesake restaurant chain, helped by the company's Big Farm Salads promotion.

Same-store sales is a key indicator of restaurant performance since it measures growth at existing locations rather than newly opened ones.

a bit more...
http://biz.yahoo.com/ap/080604/bob_evans_farms_mover.html?.v=1



I was telling my spouse as we were eating at Bob's last week, that this chain should do well in this economy slowdown. People may not have the money to eat at fancy places, but want a good meal, will still go to Bob Evans. And I love their dinner rolls.

:)


edit to add link for Bob Evans
http://www.bobevans.com/

[ozymandius]

71. Closing time on a volatile day.

Dow 12,390.48 Down 12.37 (0.10%)
Nasdaq 2,503.14 Up 22.66 (0.91%)
S&P 500 1,377.20 Down 0.45 (0.03%)
10-Yr Bond 3.94% Up 0.042
NYSE Volume 4,366,953,500
Nasdaq Volume 2,217,188,500

4:15 pm : The stock market traded in a volatile manner Wednesday, with the S&P 500 trading in a wide range, from up 0.8% at its peak to down 0.4% at its trough. The stock market eventually settled on the unchanged mark as strength in tech offset weakness in financial and energy.

The financial sector (-0.8%) posted a solid gain of 1.1% in early trade, but tumbled on word that Moody's put bond insurers Ambac (ABK 2.50, -0.50) and MBIA (MBI 5.67, -1.02) on review for a possible credit rating downgrade. Both Ambac and MBIA defended their capital position, but the market took little solace in the remarks.

The market dipped noticeably in midafternoon trading after the news wires ran headlines from a speech on inflation that was given by Fed Chairman Bernanke at Harvard. The chairman noted the Fed's concerns about inflation and inflation expectations. In brief, it was largely an academic discussion.

If Bernanke wanted to make a real splash with inflation commentary, he would have done it in Tuesday's speech to the International Monetary Conference and not to a group of seniors (students we mean, not citizens) at Harvard. The inflation headlines were simply an excuse to apply some added selling pressure to a market that was already showing signs of weakness.

The volatile day ended split down the middle, with five of the ten economic sectors posting a gain. Technology (+1.0%) provided leadership, with significant strength in large-cap names. As a result, the tech-heavy Nasdaq handily outperformed the broader market with a gain of 0.9%.

The energy sector (-1.2%) posted the largest loss, as crude prices fell 1.8% to $122.04 per barrel. The weakness in crude followed the government's weekly energy report. An increase in gasoline and distillates inventories offset an unexpected decrease in crude stockpiles.

Telecom (-0.8%) was also a laggard, with Verizon (VZ 36.99, -0.37) falling after CNBC reported it may buy Alltel for $27 billion.

The session's three economic reports were not especially strong, but they were all better than expected. Importantly, the data are reflective of an economy that is not in a recession.

Private nonfarm employment rose by 40,000 in May, according to employment services firm ADP. This came out ahead of the expected drop of 30,000. However, this report has been spotty compared to the government's jobs report, which includes both public and private nonfarm payrolls and is set for release Friday morning.

First quarter nonfarm productivity was revised to a gain of 2.6% from 2.2% (consensus +2.5%).

May ISM services -- a survey of nonmanufacturing purchasing managers -- was nearly unchanged at 51.7 compared to 52.0 in April. Economists forecast a reading of 51.0. Because the reading is above 50, it indicates growth in the services sector. DJ30 -12.37 NASDAQ +22.66 NQ100 +1.2% R2K +0.6% SP400 +0.3% SP500 -0.45 NASDAQ Dec/Adv/Vol 1211/1633/2.19 bln NYSE Dec/Adv/Vol 1699/1408/1.29 bln

[MilesColtrane]

72. Bye everybody, thanks for all the fish.

MC