STOCK MARKET WATCH, Wednesday August 6

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday August 6, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 168
DAYS SINCE DEMOCRACY DIED (12/12/00) 2754 DAYS
WHERE'S OSAMA BIN-LADEN? 2479 DAYS
DAYS SINCE ENRON COLLAPSE = 2770
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.
$1 USD = EUR 1.06678
$1 USD = JPY 116.6200

AT THE CLOSING BELL ON August 5, 2008

Dow... 11,615.77 +331.62 (+2.94%)
Nasdaq... 2,349.83 +64.27 (+2.81%)
S&P 500... 1,284.88 +35.87 (+2.87%)
Gold future... 886.10 -21.80 (-2.46%)
30-Year Bond 4.63% +0.04 (+0.87%)
10-Yr Bond... 4.01% +0.04 (+0.88%)






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: A Word Here, A Word There

BY FRANK BARBERA, CMT

What a ridiculous sham. Every few weeks the financial community ‘heart beat’ stops for a few seconds to find out what pronouncements will be handed down from the mount at the latest Federal Reserve meeting. Every few weeks, the parsing begins dissecting each word to see if anything has been omitted, or added, or changed from the prior meeting's text. Immediately, all kinds of wild trading ensues, in some cases, even before any sane person has had a chance to read and digest the intended meaning of the words. It is ironic that all of these fireworks occur following the pronouncement from an institution that stood back literally for years at a time and watched as an enormous credit bubble grew out of control, and then stood back again and watched as that bubble burst.

Even within this institution, many now perceive growing discord within the Fed, as the rumor all day (ahead of the meeting) had been that potentially as many as three out of six board members might be dissenting votes. As it turned out, only Dallas Fed Chair Richard Fischer was the lone dissenting vote, with other potential dissenters likely politically assuaged by means of a tougher wording on inflation in the Fed’s statement. While the Fed still decided to cling to its statement of moderate growth, that conclusion sounds errant in light of the fact that there is a strong possibility that Q2 GDP was boosted solely by ‘one off’ government refund checks. Taking a broader view, a field at the trend of rapidly rising credit card delinquencies, still rising foreclosures, collapsing auto sales, ultra weak employment and ultra tight credit conditions, it is hard to imagine that anyone could feel comfortable with the forward looking prospects for growth. Add to this the substantial roll over that we now are seeing in capital markets for commodities like Energy and Base Metals AND the Emerging Markets and one wonders, is the Fed now missing the next turn, that of deepening recession, -- depression?

Even more to that point, we wonder at what point does an institution such as the Fed lose its credibility? At what point does an institution become irrelevant? The answer to that question is when events have taken on a life of their own, and when their words no longer have any real impact.

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

[UpInArms]

25. the fed lost all credibility when that POS washed up has been partisan hack

was mumbling and doing who-do with the ARMs - that anyone thought he had a clue baffles me beyond belief.

[ozymandius]

30. I propose a prehumous gift for Greenscam, befitting his historical legacy.

His eternal head stone should be a toilet. A working toilet. It will help keep the raw sewage from flowing onto innocent graves as I expect those lines to be long.

[UpInArms]

34. can we have the toilet just empty into his coffin?

:shesayswithasmile:

[ozymandius]

37. You mean a septic tank?

:hi:

[UpInArms]

39. okay - a septic tank can entomb his coffin

:evilgrin:

[ozymandius]

75. Is that the FBI knocking on my door?

Should I tell them that I've already got one?

[Tansy_Gold]

80. Bury him at sea. . . . .. . . . . .

. . . . .in the George W. Bush Memorial Wastewater (Sewage) Treatment Plant.

[ozymandius]

2. Today's Report

10:35 Crude Inventories 08/02
Briefing.com NA
Consensus NA
Prior -81K

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

[UpInArms]

58. Petroleum Inventory Report:

07. U.S. crude supply up 1.7 mln brls last week: Energy Dept.
10:37 AM ET, Aug 06, 2008

08. U.S. distillate supply up 2.8 mln brls: Energy Dept.
10:37 AM ET, Aug 06, 2008

09. U.S. gasoline supply down 4.4 mln brls: Energy Dept.
10:37 AM ET, Aug 06, 2008

[ozymandius]

3. Oil holds above $119 ahead of inventory data

Oil prices were steady above $119 a barrel Wednesday as investors awaited weekly oil and gasoline inventory data for further evidence of declining crude demand in the U.S.

By midday in Europe, light, sweet crude for September delivery was up 36 cents to $119.53 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $2.24 overnight to settle at $119.17 a barrel.

In London, September Brent crude rose 66 cents to $118.36 a barrel on the ICE Futures exchange.

.....

The EIA report on U.S. oil stocks for the week ended Aug. 1 was due out later in the day. The petroleum supply report was expected to show that gasoline stocks fell 1.4 million barrels, according to the average of analysts' estimates in a survey by energy research firm Platts.

The Platts survey also showed that analysts projected crude oil inventories to have fallen 1.2 million barrels during last week.

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

[ozymandius]

4. Gas Prices Apply Brakes To Suburban Migration

...
Cheap oil, which helped push the American Dream away from the city center, isn't so cheap anymore. As more and more families reconsider their dreams, land-use experts are beginning to ask whether $4-a-gallon gas is enough to change the way Americans have thought for half a century about where they live.

"We've passed that tipping point," U.S. Transportation Secretary Mary Peters said.

Since the end of World War II, government policy has funded and encouraged the suburban lifestyle, subsidizing highways while starving mass transit and keeping gas taxes much lower than in some other countries.

.....

The policies -- building so many highways and building so many houses near those highways -- have had a direct bearing on how and where people live and work. More Americans, 52 percent, live in the suburbs than anywhere else. The suburban growth rate exceeded 90 percent in the past decade.

But there's been a radical shift in recent months. Americans drove 9.6 billion fewer highway miles in May than a year earlier. In the Washington area and elsewhere, mass transit ridership is setting records. Last year, transit trips nationwide topped 10.3 billion, a 50-year high.

http://www.washingtonpost.com/wp-dyn/content/article/2008/08/04/AR2008080402415.html

[wordpix]

94. so NOW can we upgrade Amtrak, renovate local lines & get high speed rail?

:shrug: WTF is Congress waiting for? Oh, yeah, a Democratic president.

[ozymandius]

5. Gasoline prices fall again

Gasoline prices are still tumbling, the government reported Monday, while a steep drop in crude oil prices in New York futures trading could indicate that more relief for consumers is on the way.

The U.S. average price for a gallon of self-serve regular gasoline slid 7.5 cents to $3.88, its lowest level since May 19, according to the Energy Department's weekly survey of filling stations. In California, the average fell 11.2 cents to $4.205. It was the seventh straight weekly decline for pump prices in the state, which peaked at $4.588 on June 1.

.....

On the New York Mercantile Exchange, meanwhile, crude for September delivery fell $3.69 a barrel, or 2.9%, to $121.41, its lowest close since May 5. It traded as low as $119.50 a barrel during the day's hectic session.

The drop in crude was part of a general decline in commodity prices, with natural gas, copper, gold, sugar, corn and other products closing lower. Gasoline futures fell 2.6% to a three-month low of $3 a gallon.

http://www.latimes.com/business/la-fi-gas5-2008aug05,0,4121706.story

[wordpix]

95. just paid 3.96/gal in suburban CT - lowest price in 3 or 4 mos.

[Wednesdays]

100. It'll bottom out around...oh, let's say November 4th.

:eyes:

[UpInArms]

31. (Investment/fed funded) Banks face higher hurdles to physical oil trading

http://www.reuters.com/article/ousiv/idUSSP13905120080806?sp=true

SINGAPORE (Reuters) - High fuel prices, tightening credit conditions and unprecedented market imbalances threaten to stymie investment banks looking to fatten their oil trading profits by expanding into physical markets.

Morgan Stanley, which has run a large global book trading physical distillates like jet fuel and diesel for over a decade, last month put its Asian fuel oil trading business on ice, barely a year after entering the market.

As the only investment bank with a well-established foothold in the physical oil market, Morgan's exit appeared more likely the result of turbulent conditions than a lack of expertise or will, oil traders said.

But it highlights the uphill struggle that peers such as JP Morgan, Merrill Lynch or Barclays Capital face in cracking the market for physical oil, which requires a commitment to capital-intensive storage facilities, long tanker voyages and a large, specialized back office.

"It's a sign of the times when even the most experienced top-tier banks are having difficulty in getting success in an industry they already know so well," says Ong Eng Tong, who consults on storage and trading projects in Singapore.

It wasn't supposed to be like this.

A year or more ago, markets were buoyant, cash was cheap and more banks were tip-toeing into physical markets in an effort to challenge Morgan and Goldman Sachs' position as Wall Street's biggest energy traders. The two made an estimated $5 billion trading energy and commodities last year.

...more...

what in the hell are these insidious monsters doing in the oil field?

[ozymandius]

36. Picking up where Enron left off?

They have been playing the oil markets with paper equivalents of quantities. Since the announcement to actually trade in, transport, and physically control the flow of crude through valves and pipes - I have been equally livid. Enron's failure demonstrated what not to do in energy markets. Conversely, Enron provided clues to successful energy trading. That's where I see this initiative taking root among investment banks.

[Ghost Dog]

6. FKN NEWZ: Asian Stocks Head for Biggest Gain Since April; Toyota Rises

Not. Joking. http://www.youtube.com/results?search=related&search_query=%20Deek%20jackson%20fkn%20newz%20commentary%20analysis%20political%20comedy%20news%20clinton%20obama%20mcain%20iran%20iraq%20fed%20bank&v=Dorxkq6S5oQ&page=2

Aug. 6 (Bloomberg) -- Asian stocks rallied the most in more than three months, led by automakers and electronics manufacturers, on speculation lower oil will slow inflation and spur consumer spending.

Toyota Motor Corp., Japan's largest automaker, and Samsung Electronics Co. gained after crude fell for a third day and the Federal Reserve left U.S. interest rates unchanged, saying price gains will ease. Sony Corp. advanced the most in two weeks after saying it will buy Bertelsmann AG's share of their music venture. Commonwealth Bank of Australia led financial companies higher. Hong Kong's market is shut because of a typhoon.

``Stocks should react favorably to the increasingly dovish monetary policy stances by central bankers around the world,'' said Prasad Patkar, who helps manage $1.8 billion at Platypus Asset Management in Sydney. ``Oil prices are in retreat and the risk of inflation is dissipating.''

The MSCI Asia-Pacific Index added 2.1 percent to 129.82 as of 4:54 p.m. in Tokyo, set for the biggest increase since April 21. About six stocks rose for each that fell, and all but one of the index's 10 industry groups advanced. The Philippine Stock Exchange Index climbed 3.6 percent, the region's biggest gain.

Japan's Nikkei 225 Stock Average added 2.6 percent to 13,254.89. Sanyo Electric Co., Japan's third-largest solar-cell maker, surged the most in four months after forecasting it will double its global market share by 2020. All markets in Asia open for trading rallied, apart from Pakistan.

U.S. Stocks

U.S. stocks rallied the most since April, sending the Standard & Poor's 500 Index to a 2.9 percent gain, as oil fell and the central bank forecast that inflation will ease through next year. S&P 500 index futures fell less than 0.1 percent today.

Toyota, which counts North America as its largest market, added 3.1 percent to 4,640 yen. Samsung Electronics, the world's biggest computer-memory maker, climbed 3.5 percent to 587,000 won, while Taiwan Semiconductor Manufacturing Co., the largest custom-chip maker, advanced 6.1 percent to NT$58.80.

Harvey Norman Holdings Ltd., Australia's biggest furniture and electronics retailer, jumped the most since March 2006 after the Reserve Bank of Australia yesterday signaled it may begin to cut borrowing costs. The stock gained 6.9 percent to A$3.43.

David Jones Ltd., Australia's second-largest department store chain, gained 7.5 percent to A$3.75.

Australia's central bank left its benchmark interest rate unchanged at 7.25 percent and Governor Glenn Stevens said inflation may slow, allowing for a ``less restrictive stance'' on interest rates.

`Big Relief'

Commonwealth Bank, Australia's biggest mortgage lender, advanced 6.3 percent to A$43.85, the most since March 25. Westpac Banking Corp., the nation's third-largest bank by market value, added 5.3 percent to A$22.99, the highest since May 30.

Oil dropped for a third day, by 41 cents to $119.58 a barrel at 4:58 p.m. Tokyo time. Yesterday, futures fell $2.81 a barrel on speculation demand will be reduced by economic slowdowns in the U.S. and Europe. Oil has lost more than $28 since touching a record $147.27 on July 11.

Korean Air Lines Co., South Korea's largest carrier, climbed 7.8 percent to 46,100 won, on speculation fuel costs will drop. Air China Ltd., Beijing's biggest airline, rose 1.6 percent to 9.92 yuan.

Surging fuel costs triggered Cathay Pacific Airways Ltd.'s first half-year loss in five years, the company said today. Asia's third-biggest carrier by market came up short by HK$663 million ($85 million), compared with analysts' estimates for a profit. The shares didn't trade today because of the typhoon in Hong Kong.

``A halt in crude price gains is a big relief for investors,'' said Kenji Sekiguchi, general manager of strategic research and investment at Mitsubishi UFJ Asset Management Co., which oversees $61 billion. ``If oil stays at current levels, it will no longer be among the uncertainties we are facing.''

Philippine Stocks Rise

Sony rose 5.7 percent to 4,290 yen, the most since May 15, after saying it will buy Bertelsmann's 50 percent stake in Sony BMG Music Entertainment for $900 million to gain full control of the record company, whose artists include Britney Spears and Justin Timberlake.

Sanyo Electric jumped 10 percent to 228 yen, the most since April 2, after forecasting its share of the solar-battery market will climb to 10 percent by 2020, from 4 percent in the year ended March 31.

Tomy Co. added 4.9 percent to 707 yen, the biggest advance since Feb. 14, after the Japanese toymaker yesterday almost tripled its net income outlook for the six months ending Sept. 30. The popularity of Transformers, made into a movie by Steven Spielberg's DreamWorks SKG last year, boosted sales of character goods and royalty income, a company spokeswoman said.

/Blah blah blñah... http://www.bloomberg.com/apps/news?pid=20601080&sid=aGpvMNETkDR8&refer=asia /... slainte.

[Ghost Dog]

8. Nikkei ends up 2.6 pct as exporters lead gains

* Nikkei jumps 2.6 percent, snapping three-day losing streak

* Exporters gain sharply on softer yen

* Rebound may be short-lived due to bleak macro outlook (Adds stocks, details)

By Taiga Uranaka

TOKYO, Aug 6 (Reuters) - The Nikkei stock average jumped 2.6 percent on Wednesday, led higher by exporters as a sharp fall in oil prices eased concerns about inflation and the U.S. Federal Reserve signalled it was in no hurry to raise interest rates.

Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) and other blue chip exporters that have a big influence on the benchmark index made sharp gains as investors picked up recently battered shares.

"With oil below $120 a barrel, concerns for inflation have been eased, and the Fed also said inflation is likely to moderate next year," said Harushige Kobayashi, head of research at Maruwa Securities.

The benchmark Nikkei .N225 ended up 340.23 points at 13,254.89, while the broader Topix rose 2.4 percent to 1,277.27.

But Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz) ended lower after Japan's top lender reported a 66 percent slide in first-quarter profit, hurt by more credit-related losses and a sputtering domestic economy.

Many market participants said they expect the market rebound to be short-lived given deteriorating macroeconomic conditions at home and in the United States.

"Instead of marking the start of an upward trend, the market is more likely to have to price in the bad reality in Japan and the United States," said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center.

"The rebound is likely to last only until around early next week at most," he said, pointing to a raft of economic data in Japan and the United States, including preliminary Japanese GDP data for the April-June quarter on Aug. 13.

Japanese data showed on Wednesday that the index of coincident economic indicators for June fell as expected, prompting a government warning that the economy was worsening.

The Cabinet Office said the coincident index suggested the Japanese economy was deteriorating, a phrase it uses to suggest the economy may be in a recession.

EXPORTERS ENERGISED

Exporters led the Nikkei higher as the dollar held firm near seven-week highs against the yen. A weaker yen makes Japanese goods more competitive overseas and boosts profits when they are brought back home. <JPY=>

...

Advancing stocks outnumbered decliners by more than 7 to 1.

/... http://www.reuters.com/article/marketsNews/idCAT11918120080806?rpc=44&sp=true

[Ghost Dog]

11. GLOBAL MARKETS-Fed signal, oil retreat boost world stocks

* MSCI world equity index up 0.6 percent at 344.26

* Fed, falling oil and banking results boost shares

* Dollar hits 7-week high vs yen

By Natsuko Waki

LONDON, Aug 6 (Reuters) - Signals from the Federal Reserve that it is in no rush to raise interest rates combined on Wednesday with a further retreat in oil and forecast-beating results from European banks to trigger a global rally in stocks.

/... :puke: http://www.reuters.com/article/marketsNews/idINL646302020080806?rpc=44

As TheWatcher commented yesterday:

May The Farce Be With You

[Ghost Dog]

13. Banks, miners lift Europe stocks as Lonmin surges

* Pan-European FTSEurofirst 300 index rises 0.5 percent

* Banks and miners top gainers on reassuring results, M&A

* Lonmin surges 48 percent on takeover bid

By Sitaraman Shankar

LONDON, Aug 6 (Reuters) - European shares tracked global equities higher early on Wednesday, spurred by a $10 billion takeover bid in the mining sector and forecast-beating results from French bank BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz).

At 0839 GMT, the FTSEurofirst 300 index of top European shares was up 0.6 percent at 1,189.22 points, led by banks and miners and adding to Tuesday's juicy 2.6 percent gain.

BNP Paribas jumped 5.3 percent after results pleased investors, though Germany's Commerzbank (CBKG.DE: Quote, Profile, Research, Stock Buzz) gave up early gains to slip 1.3 percent despite beating forecasts as analysts pointed to management caution about the bank's targets.

Banks added most points to the pan-European benchmark as a sector, with UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) up 3 percent, Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) up 2.6 percent and Fortis (FOR.AS: Quote, Profile, Research, Stock Buzz) up 1.9 percent.

Miners rose strongly, lifted by news of a $10 billion bid by Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) for Lonmin (LMI.L: Quote, Profile, Research, Stock Buzz). Lonmin, which rejected the bid, soared 47 percent, Xstrata gained 1.4 percent and seven of the top 10 gainers on Britain's FTSE 100 .FTSE were mining stocks.

...

"Investor angst has turned to optimism quickly, and there's a feeling that things will be okay and we can move on," said Heinz-Gerd Sonnenschein, strategist at Postbank in Bonn, Germany.

"But there is still a squeeze on company margins due to commodity and energy prices, and PPIs are rising faster than CPIs, indicating that companies are struggling to pass on cost increases."

Britain's FTSE .FTSE was up 0.6 percent, Germany's DAX .GDAXI up 0.5 percent and France's CAC .FCHI up 1 percent.

CENTRAL BANK WEEK

As far as central bank rate decisions go, investor focus now shifts to the European Central Bank and the Bank of England on Thursday.

Both banks are expected to keep rates unchanged, and a fall in commodity prices could relieve some inflationary pressure.

Sonnenschein said Postbank expected euro zone inflation to moderate to 2.6 percent next year from a projection of 4 percent in 2008 and growth to slow to 1.4 percent from a projection of 1.6 percent this year.

"In 12 months, we see the oil price below $100, a trigger for inflation to come down," he said.

Reuters polls show that UK interest rates are not expected to fall until early 2009 and the ECB will hold rates steady well into the next year.

Dutch postal group TNT (TNT.AS: Quote, Profile, Research, Stock Buzz) jumped 6.7 percent on market talk of an imminent bid for the group. TNT said it did not comment on market rumours.

Stock exchange operator Deutsche Boerse (DB1Gn.DE: Quote, Profile, Research, Stock Buzz) jumped 4.3 percent as traders said Goldman Sachs had started coverage with a "buy" rating.

/... "Thomson"/Reuters, huh. http://www.reuters.com/article/marketsNews/idCAL622828720080806?rpc=44&sp=true


... http://www.youtube.com/watch?v=-Rt2E5slIss
... http://www.youtube.com/watch?v=7f6sqFYBgk8&feature=related
... http://www.youtube.com/watch?v=EXeAlbxVrE4 (Che onu)
... http://www.youtube.com/watch?v=xpJFtUXf67o (Fidel, muerte ecológica)

[Ghost Dog]

41. GD's shares in this (essentially, drug) company probably riding for another fall

http://www.reuters.com/finance/stocks/overview?symbol=NESN.VX

/... Uff: http://www.youtube.com/watch?v=84uMcdRg4YY&feature=related
... http://www.youtube.com/watch?v=WSjmvU_8xLY

[Ghost Dog]

69. More "brown" people:

http://www.youtube.com/watch?v=_0Itzwmm50M

[Demeter]

7. The Wind from Wall Street's Sails

http://www.dailyreckoning.com/Issues/2008/DR080508.html

Taken altogether, guess how much money the Dow stocks are making? These are the companies that form the backbone of American commerce and industry. Guess again. Because if you put them all together, says Barron’s, you’d have a loss of more than $80 billion. The last time there was such a loss in the Dow was 75 years ago – in the Great Depression.

This is an encouraging word to many observers. They note that the last time Dow earnings went negative proved to be a very good time to buy stocks. After ’32, stocks in the United States went up 373%.

But wait, they went up AFTER having lost about 85%. The Dow in ’32 rose from a low of 41...with stocks trading at only 5 to 8 times trailing earnings (in terms of current negative earnings, the P/Es were meaningless). In other words, the stock-market had been crushed before it rose again.

Today’s stock-market has not yet been crushed. In fact, the Dow itself is only a bit lower than its all-time high.

[DemReadingDU]

44. even Greenspan says so

from the dailyreckoning article...

"Hey, don't take our word for it. No less an authority than Alan Greenspan himself says there is more suffering ahead…and there is no less an authority than Alan Greenspan."


:shrug:

[ozymandius]

62. To me, that sounds like a throwaway line.

He's not mentioned anywhere else in the article. The gist of the article runs contrary to Greenspan's creed. There's strong evidence of sarcasm.

[ozymandius]

9. Freddie Mac swings to 2Q loss

NEW YORK - Freddie Mac said Wednesday it swung to a second-quarter loss that was more than three-times larger than Wall Street expected as more homeowners fell behind on their mortgage loans.

Including preferred dividends, the company said it lost $821 million, or $1.63 a share, for the quarter that ended June 30, compared with a profit of $729 million, or 96 cents a share, in the year-ago period.

.....

Stock analysts surveyed by Thomson Financial expected a loss of 53 cents a share on $2.18 billion in revenue.

During the quarter, the company set aside $2.5 billion for credit losses as delinquency rate and foreclosures increased — more than double what it had reserved in the first quarter.

http://news.yahoo.com/s/ap/20080806/ap_on_bi_ge/earns_freddie_mac

[ozymandius]

15. Paulson taps Morgan Stanley for Freddie, Fannie advice

NEW YORK (CNNMoney.com) -- The Treasury Department retained Wall Street's Morgan Stanley on Tuesday to advise it on its new authority to prop up troubled mortgage financiers Fannie Mae and Freddie Mac.

Treasury Secretary Henry Paulson reached out to Morgan CEO John Mack to assist the agency in the event it needs to expand the government's line of credit or buy stock in the companies. Congress approved these measures in late July to shore up confidence in the faltering firms, which are currently keeping the U.S. mortgage market operating.

Morgan will provide advise on capital markets, capital structure, strategy and mortgage-related matters through January 17. It will not be paid for the work, beyond accepting $95,000 for expenses.

http://money.cnn.com/2008/08/05/news/economy/paulson/?postversion=2008080518

[UpInArms]

20. Morgan Stanley to freeze home-equity credit lines: report

http://news.yahoo.com/s/nm/20080806/bs_nm/morganstanley_dc

(Reuters) - Morgan Stanley (MS.N) told thousands of clients this week that they will not be allowed to withdraw money on their home-equity credit lines, Bloomberg News reported Wednesday, citing a person familiar with the situation. Most of the clients had properties that have lost value, the agency reported, citing a person who declined to be identified.

The second largest U.S. investment bank will review home-equity lines of credit, or HELOCs, monthly from now on, the agency said, citing the person familiar with the matter.

Morgan Stanley did not immediately return a call seeking comment.

In June, the investment bank said its quarterly earnings dropped 57 percent on weak trading, investment losses and a slowdown in investment banking, even after it realized $1.43 billion in one-time gains.

...more...

[ozymandius]

16. additional info

Freddie Mac posts 4th straight loss

Freddie Mac, the second-largest U.S. mortgage-finance company, posted its fourth straight quarterly loss Wednesday as record delinquencies drove up credit costs and said that it would cut the common-stock dividend.

The second-quarter net loss of $821 million, or $1.63 a share, compares with the 54-cent a share average loss estimate of nine analysts in a Bloomberg survey.

The dividend will be reduced to 5 cents from 25 cents.

.....

The second-quarter net loss is Freddie's fifth in the past six quarters. The company reported net income of $764 million, or $1.02 a share, in the year-earlier period.

http://www.iht.com/articles/2008/08/06/business/6freddie.php

---

Why the hell are they paying a dividend at all?

[Demeter]

104. I Was Going to Ask YOU That!

Because they can? After all, they have their hand in Uncle Sam's pockets now.

[UpInArms]

27. Freddie Mac's credit default swaps widen after loss

http://www.reuters.com/article/bondsNews/idUSN0642144420080806

NEW YORK, Aug 6 (Reuters) - The cost of protecting Freddie Mac's(FRE.N: Quote, Profile, Research, Stock Buzz) debt with credit default swaps rose on Wednesday after the U.S. mortgage finance company posted its fourth consecutive quarterly loss.

Five-year credit default swaps on Freddie Mac rose to 48 basis points, or $48,000 a year to protect $10 million of debt, up from 45 basis points at Tuesday's close, according to data from CMA DataVision. Fannie Mae's (FNM.N: Quote, Profile, Research, Stock Buzz) five-year credit default swaps also widened by about 3 basis points to 48 basis points.

Freddie Mac also set plans to slash its common stock dividend and doubled its reserves for losses on delinquent loans and home foreclosures.

...a bit more...

[Tansy_Gold]

84. This makes no sense at all. None.

I can't even put my outrage into words.

Thomas Frank can, though:

"The conservatism that speaks to us through its actions in Washington is institutionally opposed to those baseline good intentions we learned about in elementary school.

"Its leaders laugh off the idea of the public interest as airy-fairy nonsense; they caution against bringing top-notch talent into government service; they declare war on public workers. They have made a cult of outsourcing and privatizing, they have wrecked established federal operations because they disagree with them, and they have deliberately piled up an Everest of debt in order to force the government into crisis. The ruination they have wrought has been thorough; it has been a professional job. Repairing it will require years of political action.

"Conservatism-in-power is a very different beast from the conservatism we meet on the streets of Wichita or the conservatism we overhear talking to itself on the pages of Free Republic(!!:rofl:). For one thing, what conservatism has done in its decades at the seat of power is fundamentally unpopular, and a large percentage of its leaders have been men of eccentric ideas. While they believe things that would get them laughed out of the American Sociological Association, that only makes them more typical of the movement. And for all their peculiarity, these people - Grover Norquist, Tom DeLay, Jack Abramoff, Newt Gingrich, and the whole troupe of activists, lobbyists, and corpora-trons who got their start back in the Reagan years - have for the last three decades been among the most powerful individuals in America. This wave of misgovernment has been brought to you by ideology, not incompetence."

http://www.truthout.org/article/follow-this-dime


These are the shruggers at work, deliberately, with full malice aforethought. The ruination they have wrought has been thorough; it has been a professional job. Repairing it will require years of political action.


"Baseline good intentions" like helping working people buy their own homes, one of the core concepts of The American Dream.


Tansy Gold :grr:


edited to add another quote from Frank's superb article.

"Conservatism, as we know it, is a movement that is about greed, about the "virtue of selfishness" when it acts in the marketplace. In rightwing Washington, you can be a man of principle and a boodler at the same time."


For those of you who haven't had the pleasure of reading Atlas Shrugged, the "virtue of selfishness" is one of the core principles of Rand's philosophy as promulgated in the novel. We here on DU aren't the only ones who recognize the danger lurking out there and its source.


TG

[Demeter]

106. There Is an Upside To This Story, Tansy

If the public has a will to fix the country and its economy, we will have to start exercising political muscles that have nearly atrophied away.

By the time the job is half done, this country will be in rebirth mode--there will be no stopping the supporters of the commonwealth. Like marathon runners, they will have developed endurance and wind, and gotten so high on the endorphins of good government that the Shruggers will be sorry they ever crawled out of the shadows and wrested control of the Ship of State.

There may not be a viable Shrugger population left when their habitat has been destroyed. And the authoritarian, fascist people who saw the Apocalypse approaching in the social movements of the 60's will be sorry they ever opened their mouths.

[UpInArms]

35. Freddie Mac (FRE) Earnings: The Gathering Storm

http://www.247wallst.com/2008/08/freddie-mac-fre.html

Freddie Mac's (FRE) results undercut any hope that things at the quasi-governmental agency would get better soon. Actually, they were an indication that the Treasury will have to get into the act sooner and not later.

The firm posted a net loss of $821 million for the quarter ended June 30, 2008, compared to net income of $729 million in the same period last year.

Freddie Mac said it remain committed to raising $5.5 billion of new capital and will evaluate raising capital beyond that amount depending on the market. That means things will get worse and the $5.5 billion will not be enough.

Freddie Mac's provision for credit losses hit $2.5 billion. The company cut its dividend to $.05 from $.25.

While the numbers from Freddie Mac were a tiny bit better than expected, they were not good enough to give any indication that the worst of the housing crisis or its impact on FRE earnings are improving at all. As a matter for fact, most of the news about housing which has come out since Freddie Mac closed its quarter June 30 has been disheartening. Foreclosures and delinquencies are rising.

...more...

[UpInArms]

85. Freddie ready to raise capital, now not right time

http://www.reuters.com/article/bondsNews/idUSN0648655120080806

NEW YORK, Aug 6 (Reuters) - Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) is prepared to raise $5.5 billion in new capital but is waiting for a more opportune time, executives said Wednesday on a conference call after reporting worse-than-expected quarterly results.

"We are certainly poised and ready when market conditions are appropriate, but there's no need for us to rush," Buddy Piszel, chief financial officer of the second-largest U.S. home funding company, said on the call.

Freddie Mac early Wednesday reported its fourth straight quarterly loss and said it has braced for a prolonged housing crisis by doubling the money set aside for bad loans. It also set plans to slash its dividend by at least 80 percent and affirmed its commitment to raise new capital. To read more see .

"It is our intent to raise $5.5 billion," Richard Syron, the company's chief executive, said on the call.

"We've been working with JPMorgan and Goldman Sachs on that and actually we are prepared to go as early as today to raise that money," he added.

"But we think, and have been advised that that's not the right thing to do for our shareholders -- to do it at a more propitious time," Syron said. "How that rolls out could affect how we run our business in the meantime because we have lots of different ways that we can manage capital."

...more...

lots of different ways that we can manage capital - like ... duh ... they have been managing capital in lots of different ways and losing buckets of it along the way :eyes:

[DemReadingDU]

10. National Century Columbus Ohio - Execs facing life

8/5/08 National Century execs facing life

U.S. attorneys looking at federal guidelines to determine how much prison time four National Century executives should serve found that the calculations "are literally 'off the charts,' " they wrote.

The numbers added up to life in prison for all four men who are to be sentenced this week for fraud that took down the Dublin-based health-care-financing company in 2002 and cost investors more than $1.9 billion.

The guidelines use a formula to calculate an appropriate penalty by taking into account things such as the amount of loss, number of victims and previous criminal history of the defendant.

At least 275 health-care companies collapsed after National Century Financial Enterprises filed bankruptcy.

The four to be sentenced are Donald H. Ayers, James E. Dierker Jr., Roger S. Faulkenberry and Randolph H. Speer.

The sentencing calculation for each of them "exceeds by several levels the maximum offense level (life in prison) provided in the guidelines," Assistant U.S. Attorneys Wes Porter and Doug Squires wrote in papers filed in U.S. District Court.

National Century agreed to buy the debt, or accounts receivable, of health-care companies and give them cash to cover expenses. The companies didn't have to wait for insurance reimbursement, and National Century kept a fee or percentage of what was collected.

But National Century executives paid themselves lavishly, lied to investors and didn't keep enough money in reserve to cover debts.

Federal Judge Algenon L. Marbley isn't obligated to follow the sentencing guidelines, and defense attorneys also filed arguments, urging lighter sentences.

For example, attorneys for Dierker, 40, said his involvement was largely limited to one company that was given more money than it had accounts receivable, making his role minimal.

Prosecutors appear to agree with the attorneys, Leonard Yelsky and Angelo Lonardo, stating in court records that Dierker "had less active participation in the conspiracy and a lesser sentence for him may be appropriate."

Marbley is to sentence Dierker and Faulkenberry, 46, on Thursday and Ayers, 72, and Speer, 58, on Wednesday. On Friday, National Century's Chief Executive Lance K. Poulsen, 65, could be sentenced to up to 35 years in prison for witness tampering.

Poulsen and his friend Karl A. Demmler, 57, tried to coerce the government's key witness in the fraud case to fake amnesia about company dealings. Demmler also is scheduled to be sentenced Friday, but his attorney is asking for a delay.

Demmler is becoming "increasingly paranoid" and "said he's saving his urine and drinking it to help his problems," a jail log filed in court says. His attorney has asked the judge to order a psychological evaluation.

Faulkenberry's attorney, Javier Armengau, also filed papers on his behalf, arguing that the sentences should be comparable to those in similar fraud cases.

Enron CEO Jeffrey Skilling was sentenced to 24 years in prison, and WorldCom CEO Bernard Ebbers was sentenced to 25 years, Armengau noted. Attorneys for Ayers and Speer also filed motions for reduced sentences. They had the filings blocked from public view, saying the documents contain personal information about the defendants.

http://www.columbusdispatch.com/live/content/local_news/stories/2008/08/05/natcen_sentences.ART_ART_08-05-08_A1_73AUIG1.html?sid=101


link backwards to previous articles...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3397607&mesg_id=3397660


A fifth defendant, Rebecca Parrett, still has not been found.

[ozymandius]

14. I hope no Club Fed is available for these thieves.

My wish is that each one of them is integrated into the general population at a standard federal penitentiary. Just think that if they had stolen $1.8 billion from a liquor store at gunpoint: this would be the harsh outcome for all of them. Their actions destroyed retirement futures, current income needs and damaged pension plans. I have no sympathy for them.

[DemReadingDU]

32. They should be dealt harshly

But so few of the consters are caught, never prosecuted.

It's really sad that so many are still out there conning even more people, and getting away with it.

:mad:

[Dr.Phool]

60. Good choice of attorney's.

Yelsky is a long-time mob lawyer from Cleveland. Lonardo is the son of former Cleveland Underboss and celebrated snitch Angelo "Big Ange" Lonardo.

[Hugin]

68. One lump or two...

with that urine?

:lol:

[Demeter]

107. Would You Believe There Hasn't been One Word About This

one state over?

I know Michigan has its own problems, but the news isn't all local. Not if you want informed citizenry on the alert for white collar crime. Another failure of the MSM...

[Wednesdays]

115. Oh, but I'm sure you'll hear lots of stories about shark attacks

Really important stuff, considering all those sharks swimming in Lake St. Clair. :eyes:

[Demeter]

117. How Did You Know?

You must be clairvoyant!

[Tansy_Gold]

119. ha ha ha ha ha ha ha

I couldn't believe it a week or so ago when they were hawking the story of that Ryan from American Idol and the shark that bit his toes!!!

:rofl: :rofl:

I mean, they had to find a SHARK somewhere and that was the best they could get?

:rofl: :rofl: :rofl: :rofl:
:rofl: :rofl: :rofl: :rofl:
:rofl: :rofl: :rofl: :rofl:

That and the poor little girl missing a month before her mother reported it. Goddess but that shit makes me sick, but still, couldn't we have some NEWS on the news?????



Tansy Gold, shaking head in disbelief as usual.

[ozymandius]

12. Time Warner 2Q net drops 26 percent

NEW YORK - Time Warner Inc.'s second-quarter earnings fell 26 percent on declining subscriber fees at its AOL online unit and lower ad revenue at the Time publishing business, the media conglomerate said Wednesday.

.....

The New York-based media conglomerate said net income fell to $792 million, or 22 cents per share, from $1.07 billion, or 28 cents per share, a year ago.

Excluding one-time items, profit rose to 24 cents per share from 22 cents per share last year, when gains from the sale of assets bolstered results.

That result was a penny better than analyst expectations, according to Thomson Financial.

http://news.yahoo.com/s/ap/20080806/ap_on_bi_ge/earns_time_warner

[DemReadingDU]

17. GM, Ford, Chrysler fear bankruptcy

8/6/08 Big Three face bankruptcy fears
After huge losses and plunging sales, experts aren't ruling out the possibility that GM, Ford or Chrysler might eventually be forced to declare bankruptcy.

All this had led to increased speculation that there could be a bankruptcy in the next year at one or more of the Big Three automakers. Credit rating firm Standard & Poor's cut GM and Ford deeper into junk bond status on last week, leaving their debt just barely above the level normally associated with firms at significant risk of near-term default.

"The clock is certainly ticking," said David Cole, chairman of the Center for Automotive Research. "Obviously there's a risk. Nobody is home free."

Most experts won't give odds that one of them will stumble into bankruptcy but said there is a chance they could be forced into doing so if market conditions don't improve.

"We think they wouldn't choose to file. But there is a risk they could be overwhelmed by the events," said Bob Schulz, S&P's senior automotive credit analyst.

Making matters worse for the Big Three is that it will take years to fully adapt to the changing consumer trends, i.e. the shift away from gas-guzzling trucks and SUVs to smaller cars.

"Fixing their product mix and cutting their staff down to manageable levels is going to take a fair amount of time to work down to the bottom line," said Bob Schnorbus, chief economist with J.D. Power & Associates. "If they continue to lose money at the current rate, their chances are uncomfortably high."

But spokespeople at all three automakers insist that bankruptcy is not on the table, saying they have adequate cash reserves to see them through additional losses.

more...
http://money.cnn.com/2008/08/06/news/companies/big_three_woes/index.htm?postversion=2008080607

[ozymandius]

21. I've recently read about the horrible shape Ford is in.

The plan is to re-tool their assembly plants to incorporate the new European product designs. This s a great idea. The catch rests within the time alloted for this process. The re-tooling will not be complete until 2010. Ford will have burned through all their capital by then.

[DemReadingDU]

29. I think the Big 3 are all in horrible shape

We in SW Ohio were hoping that GM would re-tool their assembly plant in Moraine (suburb of Dayton), to incorporate smaller efficient vehicles, but have nothing.

:(

Then the Forbes news yesterday that Dayton is one of Ohio's worst cities.

[wordpix]

96. if I could see the way things were going in 1980 with the little Civics back then,

coupled with the long lines for gas, the Big 3 should have been able to, also. The Volt is taking them in the right direction, but too little too late, unless the workers themselves rise up and take over just like Karl Marx advised.

[DemReadingDU]

99. I think they turned a blind eye, it was big business & corporate profits

Lots of money to be profited selling those SUVs, lots of money lined the pockets of the oil execs, and money was made in auto insurance insuring those large vehicles.

Not as much in profits selling those electric Volts.

[Demeter]

108. It's Those Leasing Programs That Are the Last Straw

when they have to take back all those overpriced, under-efficient SUVs and trucks from the public. And do what with them....evidently there's a market overseas for some kinds of big cars--those that say Mercedes on the label, for example...

[Hannah Bell]

125. "if I could see the way things were going in 1980"

which is a sign that their "failure" is deliberate, not the result of stupidity or cluelessness.

it's deliberate. they've been building capacity in china & elsewhere since reagan & taking it down here. they make most of their profit overseas now.

[workinclasszero]

128. Yeah the Volt will be great

If you got 30 or 40 grand you don't know what to do with.

Hey they gotta replace the obscene profits they were making on SUV's with something eh?

I'll be driving a smart car or a scooter myself.

[UpInArms]

18. dollar watch

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

Last trade 73.924 Change -0.025 (-0.03%)

Fed Leaves Rates Unchanged

http://www.dailyfx.com/story/topheadline/Fed_Leaves_Rates_Unchanged_1217961086486.html

The U.S. Federal Reserve left the Fed Funds rate unchanged at 2 percent as widely expected by the market. The Federal Reserve believes that growth risks are now fairly balanced with inflation concerns and the substantial easing of monetary policy to date should help to rescue the U.S. economy from technical recession. Even so, the Federal Open Market Committee admits that credit conditions remain tight and the ongoing housing contraction is likely to weigh on economic growth over the next few quarters. The next FOMC meeting is on September 16 and there is a 69.5 percent probability the Federal Reserve will leave rates unchanged, according to Fed Funds futures.

Like we predicted in our “Forecast for the US Dollar Ahead of Today’s Fed Decision”, the FOMC statement was less hawkish than expected and the U.S. dollar is weaker in the minutes following the rate decision. Indeed, over the last few days the U.S. dollar had been rallying against the world’s most liquid currencies on speculation the Federal Reserve could open the door for a series of rate hikes in the months ahead. In fact, traders were expecting the Federal Reserve to increase rates by 75 bps over the next eight FOMC meetings, according to overnight index swaps on the Fed Funds rate. However, today’s FOMC statement was clearly a disappointment for many market players and the recent strength in the U.S. dollar may easily evaporate in a wave of profit taking. You can read the full FOMC statement below.

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent.

Economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and elevated energy prices are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth.

Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities, and some indicators of inflation expectations have been elevated. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain.

...more...

Dollar Vulnerable to Short Term Weakness

http://www.dailyfx.com/story/bio2/Dollar_Vulnerable_to_Short_Term_1217943015135.html


We were thrown off by the bounce ahead of 1.5500 on Friday. Expectations for a push through 1.5699 did not come to fruition. If the decline from 1.6039 is wave C of a flat that will end below 1.5283, then the EURUSD should continue to decline near term with 1.5630 remaining intact. Potential resistance is at 1.5549.


The USDJPY remains choppy. To review, the rally from 95.72 is in 3 waves but so too is the decline from 108.57. This structure indicates that the USDJPY will continue higher to complete the correction from 95.72. Short term, weakness is possible in either wave c of a triangle (red letters) or in a small 2nd wave that serves to correct the advance from 103.76. Potential support is in the 106.00/50 zone as well as the 6/30 low at 104.99. Strategically, the best play is a playing bullish break through 108.57, against 106.06.

...more...

[UpInArms]

19. Apparel sales fall in July: MasterCard

http://news.yahoo.com/s/nm/20080806/bs_nm/usa_retail_apparel_dc

CHICAGO (Reuters) - U.S. sales of clothes and shoes fell in July as cash-strapped consumers cut back spending further to pay for nondiscretionary purchases such as food and gasoline, MasterCard Advisors said in a report on Wednesday.

Overall July apparel sales declined 0.8 percent from a year ago, with women's apparel sliding 3.3 percent, the eighth-straight month that sector fell, according to a report by SpendingPulse, the retail data service of MasterCard Advisors, an arm of MasterCard Worldwide (MA.N).

Sales of men's apparel increased 0.9 percent, while overall footwear sales fell 0.9 percent.

"This is one of the weaker months I've seen in the last five years," said Michael McNamara, vice president of SpendingPulse, who said consumers are cutting back more on discretionary items since the U.S. government's tax rebate checks mostly cycled through the economy before July began.

The results from SpendingPulse provide an early look into the strength of July same-store sales, which retailers such as Target Corp (TGT.N), Wal-Mart Stores Inc (WMT.N) and Gap Inc (GPS.N) will report on Thursday.

...more...

[ozymandius]

24. I am curious about the results from tax-free school shopping weekend.

Here in Georgia our tax holiday weekend for school shoppers is a huge draw. Or it has been in the past. I've yet to see any data on the sales.

[UpInArms]

22. Citi talks with regulators may lead to buybacks: report - lied to buyers of auction-rate-securities

http://news.yahoo.com/s/nm/20080806/bs_nm/citigroup_dc

(Reuters) - Citigroup Inc (C.N) is in talks with state and federal regulators to resolve allegations of wrongdoing in the auction-rate-securities market that could result in its buying back several billion dollars of the illiquid securities, Wall Street Journal said.

If Citigroup reaches an agreement with regulators, the firm could be forced to spend more than $5 billion to buy out individuals, charities and other investors whose cash is tied up in the frozen auction-rate-securities market, the Journal said citing people familiar with the negotiations.

It also could include a fine of as much as $100 million, the paper said citing sources.

Citigroup has been in talks this week with representatives from New York Attorney General Andrew Cuomo's office, other state securities regulators and the Securities and Exchange Commission, the paper said.

Cuomo last week threatened to charge Citigroup, accusing it of fraudulently marketing and selling auction-rate securities, and destroying documents that had been subpoenaed.

...more...

[UpInArms]

23. Secret Service Informant among those who hacked credit card info

http://news.yahoo.com/s/ap/20080806/ap_on_bi_ge/retailer_fraud_indictment;_ylt=AuWzdWkSNdCKEaR7ARur1s.b.HQA

BOSTON - Eleven people, including a U.S. Secret Service informant, have been charged in connection with the hacking of nine major retailers and the theft and sale of more than 41 million credit and debit card numbers, the Justice Department announced Tuesday.

The data breach is believed to be the largest hacking and identity theft case ever prosecuted by the Department of Justice, which said the suspects were charged with conspiracy, computer intrusion, fraud and identity theft.

Three of those charged are U.S. citizens while the others are from places such as Estonia, Ukraine, Belarus and China.

The indictment returned Tuesday by a federal grand jury in Boston alleges that the suspects hacked into the wireless computer networks of retailers including TJX Cos., BJ's Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, Forever 21 and DSW and set up programs that captured card numbers, passwords and account information.

"They used sophisticated computer hacking techniques that would allow them to breach security systems and install programs that gathered enormous quantities of personal financial data, which they then allegedly either sold to others or used themselves," Attorney General Michael Mukasey said at a news conference. "And in total, they caused widespread losses by banks, retailers, and consumers."

...more...

[Hugin]

52. Don't panic tho... They can still count votes just fine!

Calm down, everyone! :sarcasm:

[ozymandius]

26. 8:03 futures and blather

S&P futures vs fair value: -5.4. Nasdaq futures vs fair value: -2.5.

Futures suggest a lower start to the trading day, following yesterday's sucker rally of nearly 3%. Cisco (CSCO) is 4.2% higher in premarket trading after topping expectations in its latest quarter. The company issued revenue guidance for the next two quarters that was slightly below consensus, but reiterated its long-term growth guidance of 12% to 17%. Freddie Mac (FRE) is down roughly 10% in premarket trading. The company reported a second quarter loss of $1.63 per share and cut its quarterly dividend to $0.05 or less from $0.25. In other earnings news, Sprint Nextel (S), Time Warner (TWX), Dean Foods (DF), Devon Energy (DVN) all topped expectations. Bond insurer Ambac (ABK) and Whole Foods (WFMI) missed estimates.

[UpInArms]

28. "Seasonally Adjusted" U.S. mortgage applications rise from 2000 low-MBA

http://www.reuters.com/article/bondsNews/idUSN0537002320080806

NEW YORK, Aug 6 (Reuters) - Demand for U.S. mortgage applications climbed last week from an eight-year low a week earlier, as home loan rates dipped from near 12-month peaks, according to data from the Mortgage Bankers Association on Wednesday.

The trade group's seasonally adjusted mortgage application index rose 2.8 percent to 432.6 in the week ended Aug. 1, following the prior week's 14.1-percent drop, the most severe fall in percentage terms since May.

Total mortgage applications, based on this measure, had slumped to their lowest level since December 2000 a week ago.

The refinancing applications index climbed 4.4 percent to 1,121.8 last week, while the home purchase applications gauge rose 1.8 percent to 315.2 on a seasonally adjusted basis, the MBA said.

Fixed 30-year mortgage rates averaged 6.41 percent in the week, down from 6.46 percent a week ago and a one-year high of 6.59 percent the previous week.

...more...

when all else fails, just "seasonally adjust"! :eyes:

[spotbird]

40. Isn't December in a different season?

What am I missing?

[Demeter]

109. Christmas in July!

[UpInArms]

33. Marsh & McLennan earnings fall on unit (goodwill) write-down

http://www.reuters.com/article/fundsFundsNews/idUSN0641399020080806

NEW YORK (Reuters) - Marsh & McLennan Cos Inc(MMC.N: Quote, Profile, Research, Stock Buzz), the largest global insurance brokerage, posted a drop in second-quarter earnings on Wednesday, hurt by a $115 million write-down of goodwill for its risk consulting and technology division.

Net income fell 63 percent to $65 million, or 13 cents a share, from $177 million, or 31 cents a share, a year earlier.

The goodwill charge shaved 22 cents off earnings per share, the New York-based company said.

On an adjusted basis, operating earnings rose 17 percent to 41 cents per share.

Marsh & McLennan, which helps companies find commercial insurance coverage...

...a bit more...

It "helps" companies "find" insurance???? It doesn't offer anything or insure anything - it just "helps"!!!!

Oy!

Someone should just kill that corporation - it does nada

[Demeter]

110. Insurance Agents

Our co-op is a non-profit, and we use an agent to scout through all the available policies for those that meet our needs at the best cost and least risk.

Now, if there were fewer insurance companies, or insurance was nationalized...

Special kinds of risks can be hard to insure and an agent can have the database and contacts to get youthe coverage you are looking for.

Think of them as travel agents, those long-gone gatekeepers for airlines and hotels and theme parks...

[UpInArms]

38. Sprint posts loss as customers defect

http://www.marketwatch.com/news/story/sprint-posts-loss-customers-defect/story.aspx?guid=%7B2FAAD7E8%2D6E46%2D4373%2D8D0A%2DC9C0B3877AC6%7D&dist=hplatest

WASHINGTON (MarketWatch) -- Sprint Nextel Corp. on Wednesday swung to a second-quarter loss after 776,000 of the company's most valuable customers canceled service.

Although the loss of so-called postpaid customers was actually less than expected, Sprint warned it could lose even more "postpaid" customers in the third quarter before the declines start to moderate.

Postpaid customers sign up for annual plans and pay at the end of each month. Sprint has lost nearly 3 million of those subscribers in the past year and a half.

The disappointing forecast sent shares of Sprint (S: 8.55, +0.42, +5.2%) almost 11% in premarket trades. Investors were hoping to see more progress from initiatives undertaken by new Chief Executive Daniel Hesse.

In the second quarter, meanwhile, Sprint reported a net loss of $344 million, or 12 cents a share, compared with income of $19 million, or 1 cent a share, a year earlier.

...more...

[ozymandius]

42. Here's another bank that we may hear about some Friday.

FirstFed Grapples With Payment-Option Mortgages

LOS ANGELES -- Like many mortgage lenders, FirstFed Financial Corp. is struggling with rising losses. The bank posted a loss of nearly $70 million in the first quarter -- reversing years of profit. Forty percent of its borrowers became at least 30 days delinquent after the payments on their adjustable-rate mortgages were recast. The number of foreclosed homes held by the bank doubled in the second quarter from the first quarter.

But FirstFed isn't another bank grappling with the fallout from subprime mortgages that went to less-creditworthy borrowers. In fact, FirstFed was ranked last year as one of the top five banks in the nation by a trade publication, partly because it appeared to have pared back on risky mortgage loans. Yet this year, the Los Angeles bank is on the front lines of what could be the next big mortgage debacle: payment option mortgages. These loans went mainly to people with good credit, but they are likely to experience defaults that are nearly as high as -- in some cases higher than -- those for subprime.

.....

But around 2003, as home prices accelerated, lenders began pushing mortgages that made payments more affordable. As competition increased, lenders dropped the introductory rate on option ARMs to 1% or even lower and made more loans to borrowers who didn't fully document their income or assets. FirstFed was initially reluctant to follow the crowd. But as mortgage brokers took their business to other lenders with easier terms, FirstFed's mortgage originations declined to $366 million in the second quarter of 2003, from $389 million a quarter earlier. At the same time, its existing borrowers refinanced into new loans at other banks that offered easier terms. "The fear was that at the rate loans were paying off we were going to have to close the company down," says FirstFed President James Giraldin.

Rather than shut its doors, FirstFed joined the crowd and business boomed. But as the Federal Reserve boosted short-term rates, the gap between the introductory rate, used to set the minimum payment, and actual rates swelled to as many as 7.5 percentage points. That meant that borrowers making the minimum payment weren't covering even the interest due.

---

Here's Calculated Risk's assessment of the situation.

[DemReadingDU]

54. Karl Denninger's write-up about FirstFed, also MrMortgage's write-up

8/5/08 And So It Begins - The NEXT Implosion by Karl Denninger

To recap, a "Pay Option ARM" is a mortgage where you can choose to make a payment that is less than a fully-amortizing principal and interest amount. Often these were sold with low "teaser" rates, sometimes as low as 1%.

Any principal and interest on the usual amortization schedule not paid gets rolled back into the loan balance, so the principal outstanding can (and does, if you do that) actually go up!

These products came to the forefront of the marketplace during the bubble for the precise reason that ordinary Americans could no longer afford homes; ergo, they started diddling in complex financial instruments they did not fully understand the risks of and which are nearly always unsuitable products when sold to unsophisticated borrowers.

This, by the way, is a direct consequence of house prices being too high, as I have repeatedly pointed out - and which politicians have repeatedly ignored and are trying to maintain.

Well, now The Wall Street Journal has blown the doors off one lender that is stuffed full of these things - First Federal (NYSE: FED):

more...
http://market-ticker.denninger.net/archives/2008/08/05.html


edit to add Mr. Mortgage's write-up about FirstFed
8/5/08 Pay Option ARMs - Up to 48% Default Rate! First Federal Featured

I have been preaching that the ‘Pay Option Implosion’ will make the ‘Subprime Implosion’ look like a hiccup in states in which this loan program was widely used such as CA. This is because this loan program knows no socio-economic boundaries and was very heavy used in more affluent areas because of its ultimate affordability feature, negative amortization.

The Pay Option ARM (POA) is the most toxic of all loan programs with up to 80% of borrowers making the minimum monthly payment and acruing negative. Combine that with a house price crash of 32% in the past 13 months in CA and most of these borrowers owe more than their home is worth and are at an exponentially greater risk of loan default. Remember, these were once PRIME borrowers in many cases.

The Alt-A universe is much larger in unit count and dollar volume than subprime so even though we are just at the beginning of the ‘Alt-A Implosion’, they have already filled in the subprime default void. Scarier yet, roughly 65% of all Alt-A defaults are POA’s. The ‘POA Implosion’ is upon us.

more...
http://mrmortgage.ml-implode.com/2008/08/05/pay-option-arms-up-to-48-default-rate-first-federal-featured/

[Robbien]

82. "You expect a 20% fudge. You don't expect 500%."

The entire article was written as if the borrowers were doing all the lying. When reading through the court documents on the Countrywide bankruptcy, the banks were the ones whose lies were toxic.

Borrowers might have fudged the 20%, but the banks took those fibs and magnified it to the 500% whoppers.

edit: But the article does answer the question of how the heck banks today are even booking a profit. Booking capitalized negative amortization! Well, who wouldofthunk?

[Pale Blue Dot]

43. Layoffs 8/6

Employers don't seem to be as "high" on the economy as Wall Street was yesterday. More job losses in Seattle, Pennsylvania, and a grocery chain in Texas that's been sold is laying off over 2,000. The new owner promises to hire most back; do you think they'll get the same wages/benefits?

Pfizer - Kalamazoo County, MI - 275 jobs lost

Yesterday Pfizer announced that it would layoff 275 employees at its manufacturing facility in Kalamazoo County in Michigan. Not to be out done by big pharma, generics manufacturer Perrigo Co. said today that it is going to create 400 new jobs in the western Michigan town of Allegan. According to published reports, Perrigo plans to invest $10.5 million in its Allegan, MI headquarters and manufacturing facility in an expansion that is projected to generate 99 new jobs within a year and 400 others over five years. A Michigan Economic Development Corp’s analysis suggests that the Perrigo expansion could generate up to 1,039 jobs in Michigan by 2020

A Perrigo spokesperson said that as it has done with past jobs cuts in Kalamazoo, the company will recruit the Pfizer personnel losing their jobs. This is good news for the folks who were laid off by Pfizer yesterday. However, when you do the math (275-99), the will be a net loss of 176 pharmaceutical jobs in Western Michigan by year’s end. Although Perrigo said that another 300 jobs will be created over the next five years, I wouldn’t count on many jobs being added until the US economy finds its way out of its current recession.
http://pharmaceuticallayoff.com/?p=267

Horseshoe Casino - Elizabeth, IN - 11 jobs lost, and
Ameristar Casino - East Chicago, IL - 41 jobs lost

The slow economy is prompting casinos to lay off employees in order to cut costs.

Horseshoe Casino, the former Caesar's Indiana in the southern Indiana town of Elizabeth, has eliminated 14 positions, according to the Courier-Journal of Louisville. None were dealers or other "frontline" positions; one position getting the ax was diversity coordinator.

The casino hired the coordinator eight years ago after Indiana gambling regulators pressed for making more purchases from women- and minority-owned businesses. State law dictates that 10 percent of casino purchases be made from minority-owned businesses and 5 percent from women-owned firms.

Purchasing oversight will be passed to other employees, the casino told the newspaper.

In East Chicago, the Ameristar Casino has laid off 41 workers as part of a larger layoff launched by Las Vegas-based Ameristar Casinos Inc., according to The Post-Tribune of Merrillville.
http://cms.ibj.com/ASPXPages/6iframes/FrontEndArticlesDetailPage.aspx?ArticleID=18246&NoFrame=1

Weyerhaeuser - Seattle, WA - 1,500 jobs lost

Weyerhaeuser's announcement today that it plans to lay off about 1,500 employees from its Federal Way headquarters is among the largest layoff announcement in Washington state since Jan. 1, 2007, according to figures compiled by the Washington State Employment Security Department, based on WARN (Worker Adjustment and Retraining Notification) layoff notices filed by companies.

This list does not includes the Starbucks announcement last week to lay off 1,000 workers nationwide, including 180 in Seattle, or Washington Mutual's decision in June to cut 1,200 jobs nationwide, including 260 at its Seattle headquarters. WaMu's latest cuts came on top of 3,500 job cuts announced earlier in the year.
http://seattletimes.nwsource.com/html/businesstechnology/2008093011_webweycolayoffs05.html

Von Weise Inc. - Eaton Rapids, MI - up to 212 jobs lost

Shockwaves are rolling through the Eaton Rapids community as a major employer begins laying off it's workers.

Von Weise incorporated employs 212 workers. The company produces small engines. Just four months ago, the state gave the company a multi-million dollar tax incentive package to create 139 new jobs. Now the company may still be forced to shut its doors.

For more than 50 years employees at Von Weise have pumped out small engines for everything from lawmowers to air conditioners. Many of them have worked here for decades, but now a dark cloud of uncertainty has them worried about their future.

Linda Bennett, Worker: "What we're hearing is that within the next two weeks, if we're not bought, they're going to close the doors."

Employees received a letter dated Friday. It says the company has a cash flow problem, and layoffs can be expected as early as this week.
http://www.wlns.com/Global/story.asp?S=8793715&nav=0RbQ

Reynolds American - Winston-Salem, NC - up to 1,800 jobs lost

WINSTON-SALEM -- Company officials at Reynolds American announced Tuesday that the company is planning to reanalyze how it does business, a move that could affect around 1,800 employees as the company determines what positions are essential and which ones are not.

The jobs that will be affected by what the company is calling a "business analysis," are salaried employees, the bulk of which work in Winston-Salem at the company's subsidiary, RJR Tobacco.

The company said its employees have until Friday to volunteer to have their job examined and take severance or retirement packages that the company plans to offer. The severance package for employees would include, at a minimum, two weeks of pay for every year of service, the company said.

The company noted that even if employees don't volunteer, there could still be involuntary layoffs.
http://www.wxii12.com/news/17101966/detail.html

Minyard Food Stores - Texas - 2,387 jobs lost

Minyard Food Stores Inc. has sent a letter to the Texas Workforce Commission informing them of a layoff that will impact 37 stores and approximately 2,387 employees after the grocery retailer sells its Carnival Super Market Brand and other Minyard-owned stores to Houston-based Grocers Supply Co. Inc.

The announcement does not take into account the number of employees who will most likely be rehired by new store owners after the sale is complete, a spokesman for The Grocers Supply Co. said.

The Grocers Supply Co. says once it acquires the stores, they will be turned over to other North Texas grocery retail operators. A company spokesman said he believes those operators will most likely be interested in rehiring Minyard's employees to handle the store's business and operations.

Fiesta Mart, which has already agreed to take over 11 of Minyard's Carnival brand locations, is currently reaching out to affected employees and asking them to submit their applications for employment.
http://www.bizjournals.com/dallas/stories/2008/08/04/daily20.html

Calex Logistics - Yatesville, PA - 30 jobs lost

YATESVILLE — Doug Barbacci watched nervously as the price of diesel started rising more than a year ago.

Since then, the president of Calex Logistics has had to make tough decisions about his trucking company in northern Luzerne County. He cut more than 30 employees and sold assets because of high fuel prices, Mr. Barbacci said.

“We’ve been wiped out,” he said. “It just wipes you out. We’re not alone. That’s the industry standard ... everyone is downsizing. If you look at the (trade publications) there are a record number of trucking businesses our size that are going out of business.”

Mr. Barbacci, a registered Republican who has donated to Chris Hackett’s campaign, allowed the Republican congressional candidate to use his company’s offices Tuesday for a news conference about fuel prices.
http://www.scrantontimes.com/articles/2008/08/06/news/sc_times_trib.20080806.a.pg4.tt06hackettside_s1.1859540_loc.txt

Finnfan's note: Great! Elect more Republicans! That'll help! :sarcasm:

TransDigm - Denver, CO - over 200 jobs lost

DENVER (AP) - Aircraft parts manufacturer TransDigm Group Inc. said Tuesday it eliminated 16 percent of the CEF Industries workforce to reduce costs after it acquired the engineering component supply company during the third quarter.

Cleveland-based TransDigm executives also told analysts during a conference call that they are looking at reducing the company's overall workforce by less than 10 percent before the end of September to reduce costs.

Contacted later Tuesday, company spokesman Sean Maroney said they did not disclose the specifc number of jobs eliminated but CEF had about 130 employees when it was acquired. TransDigm has about 2,200.

The development came as TransDigm said its fiscal third-quarter profit surged 63 percent on a growth in net sales, productivity.
http://news.moneycentral.msn.com/category/topicarticle.aspx?feed=AP&Date=20080805&ID=8990678&topic=TOPIC_EARNINGS_RESULTS&isub=1

Lake County, IL - 70 jobs lost

CROWN POINT | More than a dozen Lake County officeholders and department heads promised a tough-talking County Council on Tuesday they will cut about 70 full-time and part-time jobs before the end of the year.

Those promises were made on the first day of hearings for Lake County's 2009 budget and are in sharp contrast to previous years, when many officials demanded more money for the future.

Lake County Council President Christine Cid, D-East Chicago, said in a keynote speech the county must cut $15 million from its current budget of $132 million because of permanent revenue shortfalls that will be caused by state-mandated property tax cuts.

Dante Rondelli, the council's finance director, said more than Tuesday's promises will be needed to get the budget in line. That could include job cuts, revenue increases and other financial strategies.
http://nwitimes.com/articles/2008/08/06/news/lake_county/doc35258f6ee59759078625749d000c1d1b.txt

Hanesbrands Inc. -Schuykill County, PA - 155 jobs lost

Two distribution centers for Hanesbrands Incorporated in Schuylkill County are closing.

The company that makes thermals and underwear said it is reorganizing its distribution system. The two facilities near Hometown will be closed in the first part of next year. The closures will mean 155 jobs will be lost.

The work done at the two facilities will be transferred to North Carolina and Virginia.

Hanesbrands said it will give workers severance benefits and help them find new jobs.
http://www.wnep.com/global/story.asp?s=8791915

Hewlett-Packard - Corvallis, OR - 300 jobs lost

CORVALLIS, Ore. - The Northwest could see another round of layoffs in the regional high-tech industry.

The Oregonian newspaper is reporting that as many as 300 Hewlett-Packard workers could soon lose their jobs.

The Corvallis and Vancouver campuses targeted for the layoffs focus on making ink-jet printers.

The Oregonian reported that during an internal meeting, H-P announced possible the layoffs, an end to a key production line and that it is sending work to a contractor overseas.
http://www.katu.com/news/business/26283189.html

[Pale Blue Dot]

61. More newspaper layoffs:

* The San Francisco Chronicle, which has been losing money for years, continues to be the poster child of industry problems. Now it’s offering a buyout package to 125 employees. The paper has shed half its editorial staff since 2000 and is reportedly losing about $1 million a week. BusinessWeek’s Jon Fine last year predicted that it could be the first major metro daily to fold its print edition.
* The Sarasota Herald-Tribune laid off 33 staff on Tuesday, with cuts coming about equally from the editorial and business sides. Parent company New York Times Co. didn’t elaborate.
* The soap opera at Blethen Maine Newspapers continues, with an exasperated publisher of the Portland Press Herald/Maine Sunday Telegram denying reports that the paper could be shut down without a sale. Charles C. Cochrane said that option was a worst-case scenario outlined in recent court documents and is highly unlikely. Blethen is trying to sell its Maine portfolio to a group of local investors.
* The Jackson (Miss.) Clarion-Ledger will reduce its headcount by 20 people, or about 5% of total staff. Romenesko has a memo from the publisher outlining all the usual reasons.
* The Cincinnati Enquirer is asking 50 non-union staffers to take a buyout and says layoffs may be necessary if there aren’t enough takers. Parent Gannett Co. just reported a 36% drop in profits on a 10% revenue decline.
* The good news is that the LA Times ended up shedding fewer jobs than expected: 135 instead of the planned 150. Editor Russ Stanton writes an inspirational memo to his colleagues, exhorting them to continue to innovate despite their depleted numbers.

http://www.newspaperdeathwatch.com/

[Pale Blue Dot]

63. JOB CUTS BY INDUSTRY JULY

Transportation 17,051
Financial 15,517
Retail 12,160
Automotive 11,631
Entertainment/Leisure 10,893
Health Care/Products 6,218
Government/Nonprofit 5,168
Consumer Products 4,420
Food 3,384
Electronics 2,585
Computer 2,524
Aerospace/Defense 2,208
Media 2,168
Services 1,722
Industrial Goods 1,629
Construction 1,378
Pharmaceutical 1,048
Telecommunications 995
Real Estate 264
Insurance 141
Commodities 125
Chemical 83

TOTAL 103,312

http://www.merchantcircle.com/blogs/Larson.And.Associates.847-991-0488/2008/8/JOB-CUTS-BY-INDUSTRY-JULY/103376

[Tandalayo_Scheisskopf]

45. 9:30-ishAM EDT Commodities

CLU08.NYM Crude Oil Sep 08 119.18 8:35am ET Up 0.01 (0.01%)
HOU08.NYM Heating Oil Sep 08 3.2937 8:35am ET Up 0.0117 (0.36%)
NGU08.NYM Natural Gas Sep 08 8.69 8:35am ET Down 0.036 (0.41%)
PNU08.NYM Propane Gas Sep 08 1.745 8:11am ET 0.00 (0.00%)
RBU08.NYM RBOB Gasoline Sep 08 2.965 8:35am ET Up 0.0086 (0.29%)

ALQ08.CMX Aluminum Aug 08 1.32 9:02am ET 0.00 (0.00%)
HGQ08.CMX Copper Aug 08 3.477 9:06am ET Up 0.02 (0.58%)
ZGQ08.CBT Gold 100 oz. Aug 08 881.00 9:27am ET Up 2.40 (0.27%)
GCQ08.CMX Gold Aug 08 880.90 9:01am ET Up 2.30 (0.26%)
PAU08.NYM Palladium Sep 08 364.00 8:31am ET Up 10.10 (2.85%)

CCU08.NYB Cocoa Sep 08 2,802.00 9:06am ET Up 84.00 (3.09%)
KCU08.NYB Coffee Sep 08 138.15 9:08am ET Down 2.05 (1.46%)
CTV08.NYB Cotton Oct 08 67.60 9:06am ET Up 0.63 (0.94%)
LBU08.CME Lumber Sep 08 261.30 Aug 5 0.00 (0.00%)
OJU08.NYB Orange Juice Sep 08 98.30 9:07am ET Up 0.35 (0.36%)
SBV08.NYB Sugar #11 Oct 08 13.96 9:08am ET Up 0.03 (0.22%)

[Amonester]

46. I may "win" my (yesterday's) bet...

45.92 on opening...

Maybe I should "play" La Roulette for real...

[UpInArms]

47. warmongers are at it again- breaking news on Reuters

Breaking News - U.S. says major powers agree there is no choice but to pursue "further measures" on Iran, considering "outlines" of new U.N. sanctions resolution

[Hugin]

50. Oil isn't quite high enough...

Gotsta boost the oil!

Oils gotta be higher!

Hurt'n over at Goldman-Sachs! Haleburtun! Gotta push it up!

[Ghost Dog]

59. (Bebo/Carlinhos): Antidote:

http://www.youtube.com/watch?v=kn3uq-ZqcT0

[wordpix]

97. war profiteers must see big gains on the Iran oil "market"---the one they want to seize

:puke: When will the sheeple wake up? :shrug:

[antigop]

48. 8 who saw the crisis coming...and 8 who didn't

http://money.cnn.com/galleries/2008/fortune/0808/gallery.whosawitcoming.fortune/index.html

Sean Egan
Egan-Jones Ratings

A vocal critic of rivals Moody's, Fitch, and Standard & Poor's, Egan has a track record of warning investors about poor credit quality long before the Big Three ratings agencies. Most recently he said to shun subprime-mortgage-backed bonds even while the other agencies said these were investment-grade credits.

Others are listed, but how funny that no DU'ers are in the list of those who saw the crisis coming...

[Hugin]

49. I'm used to everything I say being ignored until the boss thought of it...

But, I think they should include you antigop. :)

So, 9 who saw the credit crisis coming should be the title.

[antigop]

51. Thanks, Prag. I think they should include everyone on the SMW. n/t

[Hugin]

53. Seconded!

Sometimes I feel it's like turning the Titanic with a canoe paddle. But, at least I'm not alone in trying.

[AnneD]

129. I can't think of any one group of folks....

I'd rather have in my lifeboat. This is always some of the best advice I get. And all the gems I give were hard earned.

[UpInArms]

55. Ex-hedge fund mgr with Bush Family Ties to plead guilty to bail-jumping

http://www.reuters.com/article/domesticNews/idUSN0551294520080806?sp=true

WHITE PLAINS, New York (Reuters) - Former hedge fund manager Samuel Israel agreed to plead guilty on Wednesday to bail-jumping after he faked his own death to avoid going to prison for defrauding investors.

But the court delayed his formal plea until later in the day, when he is due to appear before U.S. District Court Judge Kenneth Karas.

Israel, bearded and dressed in a baggy brown tee-shirt and light pants, appeared before U.S. Magistrate Judge Lisa Margaret Smith in White Plains, a suburb of New York City. He agreed to waive an indictment on a charge of failure to surrender for service of a prison sentence.

The magistrate judge told Israel: "I understand that you have decided to enter a plea of guilty." Israel told the judge he did want to plead guilty, but Smith said the formal plea would have to be entered before the district judge.

<snip>

Israel, who ran the Connecticut-based Bayou hedge fund, pleaded guilty in 2005 to charges of conspiracy and fraud for cheating investors in a $450 million scam. He and several of his partners fabricated portfolio returns and concocted a phony accounting firm to keep the ruse going for years.

...more...

Here's the Bush Family Tie-In:

Bayou and the Bush Cousin

A first cousin of President Bush is emerging as a peripheral player in the increasingly bizarre Bayou Management hedge fund scandal.

Sources say John P. Ellis, a former journalist turned investment banker, represented several companies in investment presentations to IM Partners, a side venture set up by Samuel Israel and Daniel Marino. Israel and Marino were the management team that ran Bayou and who federal prosecutors allege defrauded investors out of $300 million.

People familiar with the Bayou saga say Ellis, a personal friend of Israel for the past several years, helped arranged at least five investment deals for IM Partners while working as a managing director for GH Venture Partners, a New York City-based investment bank. In all, IM Partners, a Connecticut-based investment partnership, invested at least $25 million in deals handled by GH Venture.

There's no indication that Ellis or GH Ventures were direct or indirect investors in either Bayou or IM Partners. And, other than their common principals, there's no direct evidence that any relationship existed between IM Partners and Bayou, although both operated out of the same Stamford, Conn., office.

A former columnist for the Boston Globe, Ellis may be best known for his work as an electoral consultant for Fox News during the 2000 presidential election. It was Ellis' analysis of the Florida vote total that led Fox to declare Bush the victor before any of the other networks.

Ellis is the son of Nancy Bush. He is the nephew of former President Bush and a cousin of President George W. Bush.

Ellis, who no longer works for GH Venture, declined to comment. Ralph Isham, president of GH Venture, who also is said by sources to have had a hand in the deals, could not be reached for comment.

...more...

[Hugin]

56. He better hope he's Duhb's favorite cousin...

Pardon season is fast approaching.

[Pale Blue Dot]

57. Another credit union has failed: Port Trust FCU in Charleston, SC.

August 5, 2008, Alexandria, Va. -- The National Credit Union Administration (NCUA) placed Federal Credit Union of Charleston, South Carolina, into liquidation today.

The NCUA Asset Management and Assistance Center will issue checks to individuals holding verified share accounts in the Port Trust Federal Credit Union within one week. Through the NCUA National Credit Union Share Insurance Fund, credit union members’ deposits are insured to at least $100,000 on regular accounts and $250,000 on certain retirement accounts.

NCUA made the decision to liquidate Port Trust Federal Credit Union and discontinue its independent operations after determining that the credit union is insolvent. It has no prospects for restoring viable operations. At the time of liquidation, the credit union served 260 members and had assets of approximately $460,915.

NCUA chartered Port Trust Federal Credit Union in 2006 to serve persons who live, work, worship, attend school in, and businesses and other legal entities located in a community within Charleston North Charleston, South Carolina.

http://www.ncua.gov/news/press_releases/2008/MR08-0805.htm

[Hugin]

64. "had assets of approximately $460,915"

Ouch!

On a scale of comparison with say... Bear-Stearns/IndyMac, well, so?

[Pale Blue Dot]

65. Agreed.

I posted this mostly so we can keep up with the general trend in the banking industry.

[Hugin]

66. I appreciate your doing so...

The story un-told in all of this is how much they owed whom?

[Robbien]

67. Countrywide throws away homeowners mortgage payments

The other day the SEC established a new rule where lenders would be required to record receipt of payment when borrowers remitted their payments. It seemed like a crazy rule at the time because one would think acknowledging receipt is SOP. Even loan sharks on the street acknowledge you paid them when you hand over the cash.

Well, that is not the case with our elite class of robber barons:

Countrywide fined $325,000 for ripping off consumers

The Chapter 13 bankruptcy trustee in Pittsburgh accused Countrywide Financial, the poster child for lending practices that were disastrous for both investors and consumers (but worked out quite well for Angelo Mozilo), of losing or destroying more than $500,000 in checks between December 2005 and April 2007, and then charging already downtrodden borrowers for illegitimate late fees and legal costs.

Countrywide recently settled those allegations, and will pay $325,000. That's it. Is that a deterrent? Now that Countrywide is owned by Bank of America (NYSE: BAC), it's barely a rounding error, and certainly not something that will discourage Countrywide or other lenders from ripping people off.

http://www.bloggingstocks.com/2008/07/16/countrywide-fined-325-000-for-ripping-off-consumers/

And to think, the new rule doesn't go into effect for another year and a half so Countrywide/BoA can continue trashing checks for many months to come.

[Hugin]

70. Any and every game...

That's what de-regulation buys.

Incidentally, it would seem State-Farm is playing the same game to dump insurees who have made claims.

They 'forget' to send you a statement and therefore you forget to pay that month. Voila! They can drop
you.

Please, everyone remember to keep up with their record keeping. The House Advantage is stacked against you.

[Robbien]

72. Back in the old days

lenders wanted their money back. Now that loans have been chopped, diced and resold, receiving their money back is not a good thing. How crazy is that? Recording late fees as new profit is more desirable than receiving money.

No wonder most of the public is confused as to what is happening.

[Hugin]

74. No kidding...

I find it very sad.

Since this behavior is seemingly being encouraged at this point. I no longer doubt the only thing that
will 'fix' this mess is a total collapse. Employees and Staff at these organizations will come to believe
it's okay to fuck over the little guy.

Buyer beware! Caveat emptor!

The shruggers have won. I hope they enjoy the dump they've built themselves.

I'm not sure anyone realizes how difficult it is for me to say this.

[Tansy_Gold]

92. THE SHRUGGERS HAVE NOT WON!

Take heart, Prag. :hug:


Remember, at the end of Atlas Shrugged, Dagny and Galt were leaving the Valley, but they had not yet returned to the world they left behind. What would happen to them if they encountered not the flowers and candy reception that Fumsfeld et Cie. expected in Baghdad but an armed and determined insurgency?


Tansy Gold, not givin' up yet

[ozymandius]

71. OMG!

That's it? A fine of $325k for willfully destroying $500k worth of legitimate payments in order to defraud clients is all they get? No criminal prosecution? This sounds like Countrywide merely made a "procedural error". If it were my money - something like a class action civil suit would look really attractive to me.

[antigop]

76. They may have given up their right to sue

If you read the fine print in a lot of stuff these days, you agree to submit to arbitration and you give up your right to sue.

So, um, who do you think gets to pick the arbitrator?

<edit> fixed dumb spelling error

[Hugin]

77. Their cousin?

It's okay, they're only 'kissing cousins'.

Cripes on a biscuit!

[antigop]

93. mandatory arbitration clauses have consumers signing away their right to sue

http://www.bankrate.com/brm/news/cc/20001004.asp

Every day, consumers are giving away one of their basic rights -- and most of them don't realize it. Buried in the microscopic legalese of many loan and purchase agreements is a provision that has a profound impact on a customer caught in a dispute with a bank or other company.

Mandatory arbitration clauses, which compel customers to give up their right to go to court, are becoming commonplace, especially in financial contracts, but consumers often are unaware of their existence or implications.

But this week, the Supreme Court began hearing a case that may have a major impact on the use of mandatory arbitration clauses.

"Most of the big banks have them. The numbers have approached or exceeded 50 percent in the lending arena," says Will Lund, director of Maine's Office of Consumer Credit Regulation. "It's probably more than that for credit cards."

Lund says arbitration clauses started showing up in 1985, but the trend boomed in the '90s beginning with Bank of America. In 1992, the lending giant announced that credit card and checking and savings account disputes would be resolved out of court. Soon after, another West Coast bank, Wells Fargo, mimicked that move -- at the same time it was fighting a class-action battle over late fees that later resulted in a multimillion dollar award to consumers.

"Lenders are very excited about arbitration clauses because they tend to spend a lot of money defending class-action suits. Arbitration eliminates class-actions," Lund says.

[Robbien]

79. Some states are suing Countrywide for their fraudulent practices

New York, Illinois and Florida already have class action suits against them. Today Connecticut has initiated its own lawsuit against Countrywide:

http://www.reuters.com/article/fundsFundsNews/idUSN0646901520080806?sp=true
Countrywide sued by Connecticut over loans, fees

NEW YORK, Aug 6 (Reuters) - Countrywide Financial Corp, widely blamed for fueling the U.S. housing boom and subsequent bust with loose lending practices, was sued by Connecticut for steering customers into mortgages they couldn't afford, and charging excessive legal fees to borrowers in default.

. . .

Connecticut is demanding that Countrywide make restitution to affected borrowers, give up improper gains, and rescind, reform or modify all mortgages that broke state laws.

It is also seeking civil fines of up to $100,000 per violation of state banking laws, and up to $5,000 per violation of state consumer protection laws.

In its complaint, the state called Countrywide's lending practices "oppressive, unethical, immoral and unscrupulous."

Blumenthal accused Countrywide of inflating borrowers' incomes to qualify them for loans they couldn't afford, and then misleading consumers about loan terms, revealing some only at the closing table.

He also accused the lender of bullying struggling borrowers into loan workouts that were "doomed to fail," and assessing hefty legal fees that drove borrowers deeper into debt.

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

Shredding borrowers' payments should be added in there somewhere.

[Ghost Dog]

121. I pay you you say I don't pay you I cut your fucking throut OK

Who needs papers? n/t

[ozymandius]

73. 11:26 update

Dow 11,570.01 Down 45.76 (0.39%)
Nasdaq 2,348.97 Down 0.86 (0.04%)
S&P 500 1,280.24 Down 4.64 (0.36%)
10-Yr Bond 4.0520% Up 0.0450
NYSE Volume 1,418,988,620
Nasdaq Volume 743,382,440

11:00 am : In typical fashion, crude prices trade in a volatile manner following the government's weekly energy statistics. Prices briefly dropped into negative ground, before recovering to a gain of 0.2% at $119.35 per barrel. The unexpected drop in crude stockpiles was partially offset by a larger-than-expected decline in gasoline inventories.

The stock market falls to a fresh session low and then recovers a bit. Financials (-2.0%) and consumer discretionary (-1.8%) are the main laggards. The energy (+1.1%) and materials (+1.6%) sectors continue to provide leadership, but have fallen off their session highs of 1.8% and 2.2%, respectively.

The materials sector is benefiting from a strong 8.8% advance in shares of mining company Freeport McMoRan (FCX 85.94, +6.94). FCX was added to Citigroup's Top Picks Live list, noting an attractive valuation. FCX tumbled 22% during the last five sessions on concerns of decreasing copper prices (+1.3%).

The energy sector is getting a boost from Devon Energy (DVN 91.16, +2.26). The independent gas and oil company posted a 79% year-over-year increase in earnings per share, which topped Wall Street's expectations.DJ30 -72.38 NASDAQ -11.35 SP500 -8.01 NASDAQ Adv/Vol/Dec 891/615 mln/1605 NYSE Adv/Vol/Dec 975/314 mln/1935

[antigop]

78. Now Wall Street Wants Your Pension Fund, Too (defined benefit pension)

http://www.businessweek.com/magazine/content/08_33/b4096000769608.htm?chan=top+news_top+news+index_top+story

The folks who brought you the mortgage mess and the ensuing hedge fund blowups, busted buyouts, and credit market gridlock have another bold idea: buying up and running troubled corporate pension plans. And despite the subprime fiasco, some regulators may soon embrace Wall Street's latest scheme.

In preparation for that moment, the world's biggest big investment banks, insurers, hedge funds, and private equity shops have been quietly laying the groundwork for such deals over the past year. They would be a big prize for Wall Street. The $2.3 trillion pension honey pot has $500 billion in "frozen plans" that are closed to new employees and whose benefits are capped, including those at IBM IBM, Hewlett Packard (HPQ), Verizon (VZ), and Alcoa (AA). And that figure could triple by 2012, according to consulting firm McKinsey. By managing those troubled plans, Wall Street also gains entrée to an appealing set of customers to whom it can sell a broad array of fee-generating products. "We have identified several clients who would be willing to be first to sell a plan," says Scott Macey, a senior vice-president at Aon Consulting. "But the question is, when is a good time for this?"

So is this the plan? A place where they can dump all of their toxic stuff?

[DemReadingDU]

81. Oh, no. Looks like it

Historically, pension funds have been managed conservatively, in keeping with the broad goals of long-term wealth accumulation. Alternative investments such as hedge funds, derivatives, and asset-backed securities represent less than 25% of pension assets. If financial firms get involved, exotic investments could swell to 50% of pensions assets by 2012, predicts McKinsey. The biggest fear is that Wall Street could use retirement portfolios as a dumping ground for its most toxic and troublesome investments. It's not unlike what regulators allege UBS officials did with its stockpile of risky auction-rate securities by trying to off-load them to wealthy clients.

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

This should be criminal and illegal to invest pensions in exotic risky investments

[Dr.Phool]

86. And the PBGC couldn't fuck up a pension bad enough?

Wall Street could only do a worse job.

[librechik]

90. hey, it beats trying to talk Americans into voting to privatize social security

They'll just sneak around the back way.

[DemReadingDU]

118. Treasury Department Says "No" To Pension Fund Management By Large Banks

8/6/08
The Treasury Department announced Wednesday that, when it comes to pension plans, companies may not transfer the employee funds to banks so that they may be managed. The decision, coming in the midst of the banking sector's financial crisis, places new pressure on banks that depend on a portion of their swiftly declining revenues to participate in pension-plan management.

In a joint decision, the Treasury Department and the Internal Revenue Service decided that, except in cases "when the transfer is not connected with a transfer of significant business assets, operations, or employees," the transmission of the pension plan is "not permissible under current law."

However, the Treasury is working to help lawmakers to craft regulations which would permit the transactions. They, along with the Labor and Commerce Departments and the Pension Benefit Guaranty Corporation, offered a "framework of principles" that would "guide the development of legislation that could permit such transactions, in circumstances where the transaction is in the best interest of plan participants, their beneficiaries, employers, and the pension insurance system."

Frozen plans, or those benefits that are no longer being accumulated, are exempt under current regulation and can be managed by large banks, the Treasury added.

The principles include: ensuring that participants, their representatives, and ERISA regulators receive advanced notice of a plan transfer, approval of the parties, keeping transfers to "only financially strong entities in well-regulated sectors;" and requiring acquiring companies to demonstrate that participants' benefits and the pension insurance system would be at less risk after the transaction.

http://www.rttnews.com/ArticleView.aspx?Id=677070

[UpInArms]

83. File It Under: They Call this news? U.S. bank group warns of perverse incentives

http://www.reuters.com/article/bondsNews/idUSN0644523020080806

NEW YORK, Aug 6 (Reuters) - Recent innovations in the financial sector have distorted incentives and threatened stability, requiring closer scrutiny of risk by executives and policy-makers, an industry advisory group said on Wednesday.

Many investors have criticized the way in which mortgages were repackaged as bonds and sold on a secondary market, effectively severing the relationship between lender and borrower.

The global financial system is experiencing its most severe crisis in decades, with losses fast approaching a half trillion dollars, according to the report of the advisory group, which was headed by Goldman Sachs Managing Director Gerald Corrigan, and emerged in part in response to the President's Working Group on Financial Markets.

"The cost of the credit crisis in economic, financial and human terms has already reached staggering proportions and, even after 12 months, substantial vulnerabilities remain," the report said.

"It is likely that flaws in the design and workings of the systems of incentives within the financial sector have inadvertently produced patterns of behavior and allocations of resources that are not always consistent with the basic goal of financial stability."

...more...

please do not award them the Albert Einstein cap for deep and quick thinking

hats off to all the SMWers that knew this years ago

[Hugin]

88. "consistent with the basic goal of financial stability"

Since when is that the goal?

Could've fooled me.

[Robbien]

87. Massive money move in wake of subprime crisis

A group of Black clergy, business owners and consumers were at Bank of America in New York City to begin a 40-day aggressive plan to close their bank accounts and move their money out of an institution they say discriminates against Black employees, customers and the Black community in general.

Referring to themselves as The Move Our Money Coalition, the group plans to move at least $100 million over the next 40 days, and they are projecting that 4,000 depositors in New York will join them in this 40-day fund shift.

Bank of America was overwhelmed by more than 40 customers who were on their way to move their money at the branch located at 3rd Avenue and 42nd Street in Manhattan.

"This subprime crisis has greatly impacted the Black community in New York and across America, and Bank of America is one of the chief culprits. They take our deposits and then make few loans in our community, leaving our community prey to these predatory lenders and unscrupulous merchants," shared Rev. Dennis Dillon, the pastor of the Brooklyn Christian Center and author of The Economic State of Black New York Report. Dillon, who is a co-organizer of the move, led one of the largest bank moves in New York through a similar action in 1996.

The group predicts a long line at the bank, extending to the streets as people show up to move their money and close their accounts.

http://www.hvpress.net/news/119/ARTICLE/4872/2008-08-06.html

This will be interesting to watch and see if all four thousand depositors actually show up to move their money.

[wordpix]

98. YEAH! Go, Move our Money. Luckily, I put mine in a local bank b/c I hate these corporations

[UpInArms]

89. Sovereign funds face sobering test of strategy (burned in game of "Hot Potato"

http://www.reuters.com/article/reutersEdge/idUSL627850120080806

LONDON (Reuters) - Sovereign wealth funds are looking less keen to live up to their recent reputation as investors of last resort given huge investments they made in failed Western banks are turning sour one year into the credit crunch.

State-owned wealth funds, which manage almost $3 trillion in assets, have grabbed global financial markets' attention since last year, when they replaced hedge funds and private equity as the main driver of corporate takeover activity.

Since 2007, these sovereign funds -- mainly from emerging economies with excess reserves -- have spent nearly $80 billion to buy stakes in major banks desperately needing cash to repair balance sheets damaged by losses on U.S. subprime mortgages.

It was a match made in heaven -- except that the arrival of the sovereign funds does not seem to have been enough to stop the rot. Banking stocks have continued to tumble and some shares have become diluted as a result of rights issues.

Most sovereign wealth funds (SWFs) do not have to report mark-to-market losses in public and some argue they can ride out temporary losses and cycle downturns to seek long-term returns.

But while they are unlikely to unwind investments they have already made, their appetite for jumping into risky deals again may be dulled.

"The opportunity of making large scale investments in Western investment banks doesn't come along very often. They have made these investments because it was a rare opportunity and one they could not turn down," said Ben Faulks, associate director at Standard & Poor's.

"(But) wealth funds have a mandate to make money, not to plough money into ventures destined for collapse. They are not charities. They won't make investments unless they think they can make money."

...more...

love that "mandate to make money" bullshit meme - remember Dimson had a man-date too but wasn't his with Jeff Gannon Guckert?

[Ghost Dog]

91. All you need is love.

http://www.youtube.com/watch?v=bzlfXvF1ekc&feature=related

[Tandalayo_Scheisskopf]

101. 2:30PM-ish EDT Commodities

CLU08.NYM Crude Oil Sep 08 118.44 1:37pm ET Down 0.73 (0.61%)<--==:applause:
HOU08.NYM Heating Oil Sep 08 3.239 2:02pm ET Down 0.043 (1.31%)<--==:applause:
NGU08.NYM Natural Gas Sep 08 8.839 1:37pm ET Up 0.113 (1.29%)
PNU08.NYM Propane Gas Sep 08 1.745 1:58pm ET 0.00 (0.00%)
RBU08.NYM RBOB Gasoline Sep 08 2.951 1:36pm ET Down 0.0054 (0.18%) <--==:applause:

HGQ08.CMX Copper Aug 08 3.463 10:33am ET Up 0.006 (0.17%)
ZGQ08.CBT Gold 100 oz. Aug 08 878.80 1:08pm ET Up 0.20 (0.02%)
GCQ08.CMX Gold Aug 08 877.40 2:05pm ET Down 1.20 (0.14%)<--==:applause:
PAU08.NYM Palladium Sep 08 354.25 1:34pm ET Up 0.35 (0.10%)
PLU08.NYM Platinum Sep 08 2,040.10 1:44pm ET 0.00 (0.00%)
ZIQ08.CBT Silver 5000 oz. Aug 08 16.545 Jul 30 0.00 (0.00%)
SIQ08.CMX Silver Aug 08 16.472 1:33pm ET Down 0.065 (0.39%)

CU08.CBT Corn Sep 08 508.00 2:27pm ET Down 17.25 (3.28%)<--==:applause:
OU08.CBT Oats Sep 08 357.00 1:32pm ET Down 2.75 (0.76%)<--==:applause:
RRU08.CBT Rough Rice Sep 08 15.88 2:14pm ET Down 0.32 (1.98%)<--==:applause:
SMQ08.CBT Soybean Meal Aug 08 333.50 2:18pm ET Down 14.00 (4.03%)<--==:applause:
BOQ08.CBT Soybean Oil Aug 08 51.65 2:15pm ET Down 1.33 (2.51%)<--==:applause:
SQ08.CBT Soybeans Aug 08 1,218.00 2:14pm ET Down 44.50 (3.52%) <--==:applause:

FCQ08.CME Feeder Cattle Aug 08 115.50 2:15pm ET Up 0.15 (0.13%)
PBQ08.CME Frozen Pork Bellies Aug 08 63.90 2:15pm ET Down 1.50 (2.29%)
LHQ08.CME Lean Hogs Aug 08 84.40 2:15pm ET Up 1.625 (1.96%)
LCQ08.CME Live Cattle Aug 08 102.35 2:15pm ET Up 2.125 (2.12%)

CCU08.NYB Cocoa Sep 08 2,754.00 2:05pm ET Up 48.00 (1.77%)
KCU08.NYB Coffee Sep 08 137.85 2:09pm ET Down 2.25 (1.60%)<--==:applause:
CTV08.NYB Cotton Oct 08 67.41 1:58pm ET Up 0.44 (0.66%)
LBU08.CME Lumber Sep 08 258.00 2:04pm ET Down 3.30 (1.26%) <--==:applause:
OJU08.NYB Orange Juice Sep 08 99.20 2:07pm ET Up 1.50 (1.53%)
SBV08.NYB Sugar #11 Oct 08 14.17 2:08pm ET Up 0.24 (1.72%)
SEU08.NYB Sugar #14 Sep 08 23.50 1:50pm ET Down 0.25 (1.05%) <--==:applause:

[ozymandius]

102. Sucker rally discovers more suckers.

3:09
Dow 11,673.09 Up 57.32 (0.49%)
Nasdaq 2,382.10 Up 32.27 (1.37%)
S&P 500 1,290.41 Up 5.53 (0.43%)
10-Yr Bond 4.0460% Up 0.0390
NYSE Volume 3,450,842,250
Nasdaq Volume 1,767,831,120

3:00 pm : Stock market bulls drive the major indices to session highs. Six of the ten sectors are now in positive territory. The sectors that are still in the red are paring their losses.

The Nasdaq continues to outperform. The composite is benefiting from a better-than-expected earnings report from Cisco (CSCO 24.08, +1.43). Microsoft (MSFT 27.03, +0.82) is also providing leadership, after Bloomberg.com reported that a UBS analyst said Microsoft will buy back as much as $20 billion shares.DJ30 +61.14 NASDAQ +32.62 SP500 +5.86 NASDAQ Adv/Vol/Dec 1665/1.70 bln/1092 NYSE Adv/Vol/Dec 1713/806 mln/1353

2:35 pm : The major indices climb to session highs, thanks to mostly broad-based buying interest. The Dow and S&P 500 are posting slight gains, and the Nasdaq is up nearly 1%.

Despite the -0.5% drop in crude prices, the energy sector is up 1.2%, which is helping to offset the financial sector's decline of 1.0%.

The majority of this session's biggest percent losers are related to earnings reports. Freddie Mac (FRE 6.71, -1.33) is posting the largest decline of 16.5% in response to its large $821 million second quarter loss, and Fannie Mae (FNM 11.93, -1.67) is down 12.2% in conjunction with the news. Whole Foods (WFMI 19.94, -2.98) plummeted 13% after the company posted 23% year-over-year drop in earnings per share and suspended its dividend.

Sprint (S 7.45, -1.10), Dean Food (DF 21.89, -1.44) and News Corp (NWS.A 14.27, -0.98) are also among the session's big percent losers in response to their respective earnings reports.

[Demeter]

111. Now, Now, Somebody Worked Real Hard to Wipe Out the Early 100 Point Loss

Maybe even several someones. Why are they holding that line? What's the game plan?

[RUMMYisFROSTED]

103. Oil: "Hey, look, there's an election coming up!"

($99.99)Under a $100 by late October.

[TheWatcher]

105. It is obvious and should be apparent and clear to everyone that the case for a Raging Bull Market

was made today.

One need only look at these solid, no-brainer indications of robust prosperity.

Freddie Mac Losses

Time Warner Pro-Forma Bullshit Earnings ("Yes, our earnings are shit, but we still beat by a penny, so that means that our company is awesomely sound!")

More Banks about to fail

Countrywide caught simply throwing away legitimate loan payments from borrowers, and then charging them late fees and claiming they never paid.

The continuing managed perception that the entire financial system's performance depends entirely on the price of Oil. If it goes down, then by law and logic, Stocks must rally.

Microsoft wants to buy back $20 Billion of it's Stock. ("No one else wants it, so I guess we better buy it to Hide The Crisis and manage public perception that we are still awesome and unstoppable. Meanwhile we'll just deplete our Balance sheet By $20 Billion over the next three months and pray for the Best! We need not worry about this showing up on our earnings, because now that everyone uses Pro-Forma Earnings, we can just report whatever Bullshit we want and the sheep will believe it! Because after all, it's not about reality, it's about perception and feeling good. How Do YOU want to FAIL Today!?")

ABK Earnings: -1.83, Exp.: -0.65, Yr ago: 2.01 'Nuff Said really. This picture of Prosperity and explosive growth paints itself.

War Drums reach fever pitch.

Morgan Stanley Said to Freeze HELOC Withdrawals

Home Energy Prices Are Expected to Soar Even Higher (Except for Gas of course, which will likely be dropped precipitously into The Election, so the sheep will know who their stolen votes are going to.)

GM, Ford, and Chrysler Teetering on Bankruptcy.

So, as you can plainly see, any free-thinking creature with the slightest concern about their financial future, will do the responsible thing and be fully invested in this Casino by 9:30 AM EST tomorrow morning.

Only a fool would do otherwise.

The only sensible approach to making your assets work for you is with the time-tested rose-colored perspective that is the only sure way to financial freedom and prosperity.

After all.....It's Only Logical!



On Edit: Amonester, I hope you took your Chips off the Roulette Table after 11AM. Because otherwise, the House Got your money too. :) Like I said, never underestimate the Power Of Bullshit, or those PTB who Manage it.

[Hugin]

112. Let the good times roll, man!

:beer:



( P.S. Thanks for the summary. ;) )

[TheWatcher]

113. You Are Most Welcome, Prag.

Now, pass one of those over here.

I'll buy the next round. :)

If the Markets need not be sober, then neither should we.

Forward to Infinite Prosperity!

:beer:

[Hugin]

114. One of the best features of DU...

is the bottomless beer glass!

:toast:

:beer:

[Ghost Dog]

116. Ummmm,... (Incredible String Band):

http://www.youtube.com/watch?v=bgkxSSQbGsI(Circle Unbroken).

[TheWatcher]

120. Another Great Post Ghost Dog

Such a Great Song, and very appropriate.

I suppose the only question that remains is, how long can they keep this fake rally alive?

Longer I imagine, than most of us can stay solvent.

I would, however, pay close attention to this Casino after The Olympics.

If the plan is not to keep the Meth Party going into the Election, or the PTB can no longer keep the party from collapsing until then, look for some eye opening days shortly after the Flame Goes Out.

[UpInArms]

127. thanks

that was nice

[skoalyman]

126. time Warner's alright ,Just wish we had more alternatives here in canto ohio

there a monopoly around here:-(

[Amonester]

122. Yeah, I saw that, dear TW.

OTOH, maybe the prospect of having adult President Obama and crew in charge in about six months from now is the real reason why the bulls are out 'n happy!

If not, then I give up trying to figure it all out. :hi:

No Russian Roulette for moi. LOL

[ozone_man]

123. It's not the news that drive markets.

And this is a fine example of that. It's socioeconomics. :)

[TheWatcher]

130. More like Sociopathiceconomics.

:)

[ozymandius]

124. closing up shop

Dow 11,656.07 Up 40.30 (0.35%)
Nasdaq 2,378.37 Up 28.54 (1.21%)
S&P 500 1,289.19 Up 4.31 (0.34%)
10-Yr Bond 4.048% Up 0.041
NYSE Volume 4,948,662,500
Nasdaq Volume 2,292,925,250

4:25 pm : The S&P 500 eked out a slight gain on Wednesday. Still, stock market bulls are pleased with the end result, considering the market was able to climb out of negative territory, and the gain comes after the previous session's rally of nearly 3%.

A strong showing by large-cap tech helped offset negative news out of the financial sector. Crude prices dropped for the third consecutive session, which also helped bring buyers to the table.

The S&P 500 settled with a gain of 0.3% after being down as much as 0.7%. Six of the ten economic sectors advanced. The Nasdaq Composite handily outperformed with a gain of 1.2%, partially due to better-than-expected earnings from a network and communication device giant.

With regard to crude oil, prices fell 0.7% to $118.37 per barrel after traders digested the government's weekly energy inventory data that painted a picture of mixed demand. Crude stockpiles unexpectedly rose, although gasoline inventory levels dropped by a large amount. After some volatile action, oil prices dropped from a gain of 1.1%, which coincided with the stock market's recovery from its session low. Crude prices are down 5.4% this week.

The tech sector was the leader behind the market's recovery, ending the day with a gain of 1.3%. Cisco (CSCO 23.96, +1.31) reported second quarter earnings that modestly topped expectations on the top and bottom line. The company issued revenue guidance for the next two quarters that was slightly below consensus, but reiterated its long-term growth rate guidance of 12% to 17%. Microsoft (MSFT 27.01, +0.80) also provided leadership, with shares rising 3% after a UBS analyst said Microsoft will buy back as much as $20 billion shares, according to Bloomberg.com.

Strikingly, the energy sector (+1.9%) posted the largest advance this session, despite the drop in crude prices. The sector benefited from a rebound trade and better-than-expected earnings from Devon Energy (DVN 92.67, +3.77).

The financial sector (-1.0%) settled well above its session low when it was down 2.4%, but still acted as a drag on the broader market. Freddie Mac (FRE 6.50, -1.54) was the main selling catalyst, after reporting a loss of $821 million, or $1.63 per share. The mortgage giant increased its provision for credit losses to $2.5 billion, from $1.2 billion in the first quarter, due to increases in delinquency rates and foreclosures. The firm is cutting its quarterly dividend to $0.05 or less from $0.25. Larger peer Fannie Mae (FNM 11.55, -2.05) fell in conjunction with Freddie.

Meanwhile, Morgan Stanley (MS 43.16, -0.02) froze the home equity lines of credit for thousands of its customers, according to Bloomberg.com, citing sources. Most of the customers had homes that lost value, according to the report.

The telecom sector (-1.4%) posted the largest decline. Shares of Sprint Nextel (S 7.34, -1.21) and Qwest (Q 3.45, -0.14) fell after both companies reported a drop in subscribers.

In other earnings news, Ambac (ABK 5.79, +1.06), Blackstone (BX 18.70, +0.54), Marsh & McLennan (MMC 30.07, +0.73) and Nasdaq OMX (NDAQ 30.95, +4.53) received a boost in response to their respective quarterly results.

Dean Foods (DF 21.99, -1.35), Priceline.com (PCLN 97.04, -20.16), Time Warner (TWX 14.83, -0.05), Transocean (RIG 132.53, -0.65) and Whole Foods (WFMI 20.06, -2.86) posted a loss following their respective earnings reports. DJ30 +40.30 NASDAQ +28.54 NQ100 +1.4% R2K +0.7% SP400 +0.7% SP500 +4.31 NASDAQ Dec/Adv/Vol 1158/1648/2.27 bln NYSE Dec/Adv/Vol 1398/1724/1.20 bln