STOCK MARKET WATCH, Tuesday July 10

Source: DU

Tuesday July 10, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 562 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2377 DAYS
WHERE'S OSAMA BIN-LADEN? 2089 DAYS
DAYS SINCE ENRON COLLAPSE = 2050
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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

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

AT THE CLOSING BELL ON July 9, 2007

Dow... 13,649.97 +38.29 (+0.28%)
Nasdaq... 2,670.02 +3.51 (+0.13%)
S&P 500... 1,531.85 +1.41 (+0.09%)
Gold future... 662.50 +7.70 (+1.16%)
30-Year Bond 5.25% -0.04 (-0.68%)
10-Yr Bond... 5.16% -0.04 (-0.69%)






GOLD, EURO, YEN, Loonie and Silver

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PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact actionpost@legitgov.org

For information on protests and other actions Citizens For Legitimate Government

---

Read more: DU

The Fundamental Things Apply
...As time goes by
BY TONY ALLISON

With apologies to Casablanca, the markets ultimately make their way back to reflect the basic fundamentals. Geopolitical concerns, terrorism, election years, coordinated central bank actions, and even suspect government statistics can move the markets for a short period of time. But as time goes by, the basics of supply and demand eventually form the proverbial bottom line for the long term trends.

Global Money Printing – Not slowing down

The world economy continues to grow and continues to inflate as global money printing stays in overdrive. Central bank rates of currency growth this year are astounding. Leading the charge is Russia at 51%, India 20%, China 17%, Australia 14%, the UK 14%. The US is estimated at 10-12% growth, but with M3 now unreported, who knows for sure. The Bank of England has raised interest rates 5 times in a year, noting they are concerned about inflation. If the BOE was truly concerned, they might slow the rate of currency growth to low single digits. The world’s major central banks seem to have chosen growth over fighting inflation in the future. The odds favor continued global growth, not recession, as the supply of currency grows around the clock, well in excess of global GDP growth. Global inflation may be the price we pay for continued global expansion.

An Insatiable Thirst

On any day of the week, those of us in Southern California can drive to the Port of Long Beach and see oil tankers lined up to the horizon and beyond, bringing in oil and refined products from all over the world. We as a nation will not and cannot stop using oil, and $70 per barrel is not slowing down demand. The US used to export oil to the rest of the world, but now we must import over 60% of our energy needs. That number will go higher with increasing energy demand, and with domestic supply steadily decreasing since the peak in 1970.

-cut-

In 2002 oil was $20 per barrel. In 2004, $50 per barrel. Now it is $72+ per barrel and demand is still increasing at 2% per year (which exceeds growth in supply). The world is adjusting to a higher cost of energy, but it is functioning like a global tax, which is beginning to bite into US consumers.

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

10:00 AM Wholesale Inventories May
Briefing Forecast 0.4%
Market Expects 0.4%
Prior 0.3%

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

07. U.S. May wholesale inventories up 6.7% vs. year ago
10:00 AM ET, Jul 10, 2007 - 11 minutes ago

08. U.S. May wholesale petroleum inventories fall 3.4%
10:00 AM ET, Jul 10, 2007 - 11 minutes ago

09. U.S. May wholesale sales rise 1.3%
10:00 AM ET, Jul 10, 2007 - 11 minutes ago

10. U.S. May wholesale inventories rise 0.5%
10:00 AM ET, Jul 10, 2007 - 11 minutes ago

VIENNA, Austria - Oil prices fell Tuesday, extending a decline that came after the shutdown of a huge oil processing unit at a U.S. refinery raised concern about lower demand for crude to refine.

Early forecasts indicating gasoline supplies rising the past week in the United States also exerted a downward push on prices.

Light, sweet crude for August delivery fell 49 cents to $71.70 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract had fallen 62 cents to settle at $72.19 a barrel Monday, after dipping as low as $71.81 a barrel.

News that BP PLC was forced to shut down a huge oil processing unit for maintenance in Whiting, Indiana, had raised the worry of lower crude oil demand in the U.S. But it also renewed worries about low gasoline supplies in the middle of the U.S. summer driving season.

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

PITTSBURGH - Alcoa Inc. started the second-quarter earnings season by reporting a 4 percent drop in net income, as outages at two of the aluminum maker's U.S. plants eroded profits despite overall second-quarter sales growth.

Alcoa, the first Dow Jones component to report earnings, said Monday that net income for the three months ended June 30 was $715 million, or 81 cents per share, from $744 million, or 85 cents per share, a year ago.

The company recorded charges of $36 million, or 4 cents per share, for outages at its facilities in Alcoa, Tenn., and Rockdale, Texas. In Tennessee, one of the company's production lines — shut down by a lighting strike in April — was restarted last month, while the Rockdale smelter's output was slowed to allow for refurbishment due to be finished between October and December.

-cut-

Alcoa's earnings matched the expectations of analysts polled by Thomson Financial, who had forecast profit of 81 cents per share on slightly higher sales of $8.3 billion. Alcoa said its revenue figure excluded the soft-alloy joint venture and otherwise would have met analyst projections.

http://news.yahoo.com/s/ap/20070710/ap_on_bi_ge/earns_alcoa

Hope has been the plan all along.

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

Last trade 81.327 Change -0.114 (-0.14%)

Bank of Canada Decision - Will It Mean Parity For the USD/CAD?

http://www.dailyfx.com/story/topheadline/Bank_of_Canada_Decision___1184011717049.html

With the Canadian dollar gaining an impressive 1300 pips, or 12 percent, against the US dollar in the first half of the year, many are wondering how much further the pair can decline.

With the Canadian dollar gaining an impressive 1300 pips, or 12 percent, against the US dollar in the first half of the year, many are wondering how much further the pair can decline. Some have noted that the USDCAD currency pair move has been overextended for sometime, calling for a retracement all the way back up to C$1.0800 in the short term. While others are looking for further gains to the downside, forcing expectations of C$1.0300. Either way, the directional bias in the near term will likely hinge on the upcoming Bank of Canada decision. Although expectations are for a rate hike of 25 basis points, there are factors that may lead central bankers of the world’s ninth largest economy to pass aside the rate hike for a future date. Should the latter occur, this would definitely have implications for the Canadian dollar pair in the near term.



...more...

Charting Economic Surprises - June 2007

http://www.dailyfx.com/story/charting_center/charting_economic_surprises/Charting_Economic_Surprises___June_1184064273983.html

In June we wrote, “The weather may be getting hot but the economy is cooling and unless US growth picks up dollar’s gains are likely to be capped. “ The gains were not only capped but disappeared altogether as the greenback once again plumbed the depths of its lows. The culprit was once again the consumer. While producers registered impressive gains as evidenced by healthy increases in both ISMs, the US consumer continued to struggle faced with mounting debt service and little prospect of income growth. It’s a deadly combination and if there is no respite in sight, the greenback could see further weakness in months ahead.



...more...

Last trade 80.999 Change -0.442 (-0.54%)

Settle Time 15:00 Open 81.401

Previous Close 81.441 High 81.585

Low 80.959 2007-07-10 09:52:46, 30 min delay

52wk High 87.33 52wk High Date 2006-07-19

52wk Low 81.242 52wk Low Date 2007-07-05

Open Time 19:00 Close Time 15:00

http://www.kitcocasey.com/displayArticle.php?id=1484

The dollar was little changed yesterday, but then dropped early this morning as we wait for Federal Reserve Chairman Ben S. Bernanke to speak on inflation today. Bernanke is expected to reiterate inflation remains the Fed's "predominant" concern. While Bernanke may say something hawkish, I wouldn't expect him to move the markets. As I have said before, the current state of the economy has tied the FOMC's hands with regard to interest rates. They have no choice but to hold on for the ride. In contrast, European growth is steady, and the ECB has made it very clear that interest rates will continue to rise. No matter what Bernanke says, the euro will continue to rise vs. the US$ as the interest rate differential will continue to narrow.

snip...

"Chris... I continue to read more stories like this one regarding the securities that were created from the subprime mortgages... I don't know where this fellow gets off saying that this is not a systemic risk... Problems like these will continue to mount, and the risk will come from the Fed lowering rates in reaction to these problems... Just my view from the cheap seats...

"Losses from bonds secured by U.S. subprime home loans may reach $52 billion amid rising foreclosures on the mortgages, analysts at Credit Suisse Group said. Subprime defaults 'are clearly a huge problem' for investors in collateralized debt obligations, RCredit Suisse analysts led by Ivan Vatchkov in London wrote in a report. 'But we do not think that they are a systemic one.'

"Banks are unlikely to lose more than $10 billion on the CDOs they hold because they typically keep the least risky portions of the securities, the analysts said in the July 6 report. CDOs package bonds and loans into varying pieces of risk, using their income to pay investors. Delinquencies and defaults on U.S. subprime mortgages will keep rising as borrowers who received loans with less rigorous checks miss payments, Robert Parker, vice chairman of Credit Suisse Asset Management, said on July 5.

more...

http://www.bloomberg.com/apps/news?pid=20601083&sid=aB4dtGsLW8sY&refer=currency

July 10 (Bloomberg) -- The dollar fell to a record against the euro and dropped the most since March versus the yen on speculation a slumping housing market will slow the U.S. economy.

The U.S. currency also sank against the Swiss franc, British pound and Danish krone after Standard & Poor's warned it may cut ratings on $12 billion of bonds backed by subprime mortgages, diminishing the appeal of dollar-denominated assets. Futures contracts show traders expect the Federal Reserve to keep borrowing costs on hold through year-end.

The theme today is ``broader dollar weakness,'' said Marios Maratheftis, a currency strategist in London at Standard Chartered Plc. Concern that the outlook for the riskiest U.S. mortgages will worsen is ``negative for the dollar. Lack of action from the Fed, no cuts or hikes, is also negative for the dollar.''

The dollar dropped to $1.3716 per euro at 11:18 a.m. in New York, from $1.3626 yesterday. The U.S. currency broke the April 27 record of $1.3681 and traded as low as $1.3740, the weakest since Europe's common currency started trading in 1999. The dollar fell 0.9 percent to 122.26 yen, the biggest tumble since March 13, as traders exited riskier assets.

more...

NEW YORK (Reuters) - Home improvement retailer Home Depot cut its 2007 earnings outlook on Tuesday, citing weakness in the U.S. housing market and said it was launching a tender offer for 250 million shares.

Home Depot said it expected 2007 earnings per share to fall 15 percent to 18 percent from a year earlier, to a range of $2.30 to $2.36 per share.

The company earned $2.79 per share in fiscal 2006.

Home Depot said it expected 2007 total retail sales to decline by 1 percent to 2 percent and same-store sales to fall by mid-single digits.

Previously, Home Depot had forecast total sales growth of 0 percent to 2 percent.

The Atlanta-based company said its updated targets reflect its HD Supply business, which provides building materials to contractors, as a discontinued operation. That business is set to be sold for $10.3 billion to a group of private equity firms.

http://news.yahoo.com/s/nm/20070710/bs_nm/homedepot_outlook_dc

NEW YORK - Stock futures dipped Tuesday as Wall Street reacted to an unimpressive start to the second-quarter earnings season.

Late Monday, aluminum producer Alcoa Inc., one of the 30 companies that make up the Dow Jones industrial average, reported a 4 percent drop in second-quarter profit. The earnings met analysts' expectations, but revenue missed the average forecast.

Then early Tuesday, two retailers' financial outlooks raised concerns that corporate America's future performance may not give stocks the boost investors have been hoping for.

Home improvement chain and Dow component Home Depot Inc. warned that this year's earnings will slip more than expected due in part to the sluggish housing market, while Sears Holdings Corp. issued second-quarter guidance that fell below Wall Street expectations because of weak sales of appliances and other products.

Wall Street was also cautious ahead of a speech in Cambridge, Mass., from Federal Reserve Chairman Ben Bernanke at 1 p.m., and a reading on wholesale inventories. The market anticipates the Commerce Department at 10 a.m. will report a May rise in wholesale inventories of 0.4 percent, after April's 0.3 percent uptick.

http://news.yahoo.com/s/ap/20070710/ap_on_bi_st_ma_re/wall_street

HOFFMAN ESTATES, Ill. (AP) -- Sears second-quarter earnings will likely fall well below Wall Street expectations due to disappointing sales of home appliances and other products at both Sears and Kmart, the department store chain said Tuesday.

For the quarter ending Aug. 4, executives at the nation's third-largest retailer said Sears Holdings Corp. expects to post earnings between $160 million and $200 million, or between $1.06 and $1.32 per share. That includes an 8-cent per share gain from bankruptcy-related settlements and investing activities.

Analysts polled by Thomson Financial had expected second-quarter earnings of $2.12 per share for the Hoffman Estates-based company.

-cut-

During a nine-week period that ended July 7, same-store sales at Kmart's U.S. locations fell 3.9 percent while same-store sales fell 4 percent at Sears.

http://biz.yahoo.com/ap/070710/sears_outlook.html?.v=4

BEIJING (Reuters) - China posted a record trade surplus of $26.9 billion in June as exporters rushed shipments ahead of tax rebate cuts, handing more ammunition to critics who say Beijing's weak currency gives it an unfair trade advantage.

Annual export and import growth slowed in June from May, which Lehman Brothers' economist Mingchun Sun said could point to a softening of economic growth later in the year, and the data coincided with the yuan's biggest one-day rally so far in 2007.

The trade surplus, which easily surpassed economists' expectations of a $24.0 billion gap, was much higher than the previous monthly record of $23.8 billion, set last October.

"This level of trade surplus is unprecedented for China or any other major economy in the world," said Hong Liang with Goldman Sachs in Hong Kong, estimating that the surplus would equal about 8 percent of first-half gross domestic product.

http://news.yahoo.com/s/nm/20070710/bs_nm/china_economy_trade_dc

BEIJING - China executed the former head of its food and drug watchdog on Tuesday for approving untested medicine in exchange for cash, the strongest signal yet from Beijing that it is serious about tackling its product safety crisis.

The execution of former State Food and Drug Administration director Zheng Xiaoyu was confirmed by state television and the official Xinhua News Agency.

During Zheng's tenure from 1998 to 2005, his agency approved six medicines that turned out to be fake, and the drug-makers used falsified documents to apply for approvals, according to previous state media reports. One antibiotic caused the deaths of at least 10 people.

-cut-

Last week, China's food safety watchdog said almost 20 percent of products made for consumption within China were found to be substandard in the first half of 2007. Canned and preserved fruit and dried fish were the most problematic, primarily because of excessive bacteria and additives, the agency said.

http://news.yahoo.com/s/ap/20070710/ap_on_re_as/china_tainted_products_27

In America, it is customary to get a free get-out-of-jail card.

:sarcasm:

01. S&P cites poor subprime performance, sees further losses
10:30 AM ET, Jul 10, 2007 - 9 minutes ago

02. S&P puts $12 bln of subprime securities on watch negative
10:27 AM ET, Jul 10, 2007 - 12 minutes ago

adding on edit:

http://www.reuters.com/article/bondsNews/idUSN1033625420070710

NEW YORK, July 10 (Reuters) - Standard & Poor's may cut $12 billion of subprime-related debt on expectations for more delinquent and defaulted U.S. home loans, the rating company said on Tuesday.

The classes of affected securities include 612 residential mortgage debt backed by U.S. subprime loans. S&P also announced changes to its rating methodology and is reviewing its ratings of collateralized debt obligations, S&P said in a statement.

Subprime loans issued in late 2005 and 2006 are particularly vulnerable, S&P said. Subprime loans are extended to borrowers with spotty credit histories.

"The levels of loss continue to exceed historical precedents and our initial expectations," S&P said. "At this time, we do not foresee the poor performance abating."

The benchmark ABX 07-1 BBB-minus index dropped more than 5 points to 49 points, a record low, after S&P's rating action. The $12 billion in affected debt represent 2.13 percent of the $585.3 billion in U.S. RMBS rated by S&P last year.

"This could be important," said Lou Brien, a strategist with DRW Trading Group in Chicago. "Keep an eye out for the other rating agencies to follow suit."

...more...

http://www.bloomberg.com/apps/news?pid=20601087&sid=aGVR61itIuIA&refer=home

S&P May Cut $12 Billion of Subprime Mortgage Bonds (Update5)

snip...

``S&P's actions are going to force a lot more people to come to Jesus,'' said Christopher Whalen, an analyst at Institutional Risk Analytics in Hawthorne, California. ``When a ratings agency puts a whole class on watch, it will force all the credit officers to get off their butts and reevaluate everything. This could be one of the triggers we've been waiting for.''

Investors criticized S&P, Moody's Investors Service and Fitch Ratings because their ratings on bonds backed by mortgages to people with poor or limited credit don't reflect the fastest default rate in a decade. Prices of some bonds backed by subprime mortgages have declined by more than 50 cents on the dollar in the past few months while their credit ratings haven't changed.

Insurers and pension funds may be among investors required to sell their bonds if they are downgraded, potentially driving down prices of $800 billion in subprime mortgages and $1 trillion of collateralized debt obligations, which package mortgage bonds into new securities.

S&P said it is also reviewing the ``global universe'' of CDOs that contain subprime mortgages. Investors in CDOs alone stand to lose as much as $250 billion, according to Institutional Risk Analytics, which writes computer programs for auditors.


more...

:hide:

Brokerage stocks got hit hard Tuesday after the big ratings agencies finally took action on the sinking subprime mortgage market.

Tuesday morning, Standard & Poor's placed about $12 billion worth of residential mortgage-backed securities on watch for a possible downgrade, citing rising increasing losses tied to subprime mortgages. Later Tuesday, Moody's Investors Service downgraded 399 residential mortgage-backed securities, citing "higher-than-anticipated" rates of delinquency.

It looks like all the rating agencies have decided to hit the alarm button. Looks like we may see some forced selling by some financial institutions if these downgrades take effect.

http://www.thestreet.com/s/moodys-piles-on/newsanalysis/wallstreet/10367163.html?puc=_googlen?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

NEW YORK (CNNMoney.com) -- More than two million subprime adjustable rate mortgages (ARMs) are poised to reset at much higher rates in coming months, worsening an already suffering housing market.

Borrowers who took out hybrid ARMs in 2004 and 2005 to secure low "teaser" rates for the first two or three years of the loan may see their monthly mortgage payments climb by 35 percent or more.

Consumer groups and politicians worry that hundreds of thousands of subprime ARM borrowers will be unable to keep up with their mortgage payments and will lose their homes.

"In October alone more than $50 billion in ARMs will reset," according to Mark Zandi, chief economist and co-founder of Moody's Economy.com. That's a record, according to Zandi.

-cut-

Until recently, rising home prices bailed out many ARM borrowers in trouble. They could raise cash with cash-out refinancings or home equity lines of credit. If worse came to worse, they could sell the house and get some money back.

-until now in many markets-

http://money.cnn.com/2007/07/09/real_estate/resets_are_coming/index.htm?postversion=2007070917

When these subprime ARM mortgages secured in 04-05 end and rates go up 35%, a lot more houses, maybe the entire 2 million, will be on the market. Don't think prices won't go down further.

This problem hasn't even hit places like NYC and DC markets yet. It's bound to have an impact, IMO.

I'm trying to predict where things are going in the real estate market. First, I see people holding. But if they have to bail, they'll have to drop their prices. I see no alternative to price drops. Although it's a last resort.

D.R. Horton Inc. (DHI) reported that orders for the third quarter ending June 30 dropped 40% to 8,559 homes, or 47% to $2 billion by value.

The cancellation rate at the Fort Worth, Tex.-based builder was 38%.

short story

D.R. Horton sees first quarterly loss in decade
Weak housing market slams home builder; stock price at three-year low

Home builder D.R. Horton Inc. said on Tuesday declining home values would lead to its first quarterly loss since it listed on the New York Stock Exchange in 1995, sending its shares to a three-year low.

Hurt by the deteriorating U.S. housing market, the No. 1 U.S. home builder said net sales orders in its fiscal third quarter, ended June 30, fell 40 percent to 8,559 homes. The dollar value of the orders dropped 47 percent to $2.0 billion.

“Market conditions for new home sales declined in our June quarter as inventory levels of both new and existing homes remained high, and we expect the housing environment to remain challenging,” Chairman Donald Horton said in a statement.

full article...
http://www.msnbc.msn.com/id/19694235/

08:30 S&P futures vs fair value: -5.8. Nasdaq futures vs fair value: -11.0. The futures market continues to languish well below fair value, setting the stage for stocks to open on a downbeat note. With the Dow and S&P 500 climbing to within a few points of their record closes yesterday, it's understandable to see an uninspiring start to the Q2 earnings season giving investors a reason to take some money off the table.

Market participants are also showing some reserve ahead of testimony from Fed Chairman Bernanke on inflation. He is scheduled to speak to the National Bureau of Economic Research at 1:00 ET.

08:00 S&P futures vs fair value: -5.0. Nasdaq futures vs fair value: -9.2. Early indications are pointing to a sharply lower open for stocks as earnings season officially gets underway on a sour note. Kicking things off last night was Alcoa (AA), which posted a 4% drop in Q2 profits on sales that missed Wall Street's expectations.

Alcoa did, however, extend its nearly $28 bln hostile bid for rival Alcan (AL) and BHP Billiton (BHP) is reportedly seeking a private equity partner to make a $40 bln offer for Alcoa. Nonetheless, fellow Dow component Home Depot (HD) cut its 2007 profit guidance, citing weaker conditions in the housing market, while Sears Holdings (SHLD) warned that Q2 earnings will miss forecasts.

Dow 13,585.26 down 64.71 (0.47%)
Nasdaq 2,652.27 down 17.75 (0.66%)
S&P 500 1,520.41 down 11.44 (0.75%)
10-Yr Bond 5.071% up 0.088

NYSE Volume 185,128,000
Nasdaq Volume 146,598,000

10:10
Dow 13,596.08 Down 53.89 (0.39%)
Nasdaq 2,658.78 Down 11.24 (0.42%)
S&P 500 1,522.75 Down 9.10 (0.59%)
10-Yr Bond 5.071% Down 0.088
NYSE Volume 365,028,000
Nasdaq Volume 322,120,000

Name Last Change %Change
Dow 13,610.87 -39.10 -0.29%
Nasdaq 2,660.46 -9.56 -0.36%
S&P 1,524.78 -7.07 -0.46%

:yoiks:

Highlights

Current:



30-day and 90-day vs.greenback:



30-day vs. Euro, Yen, UK Pound and Swiss Franc




Currency Comparison: http://members.shaw.ca/trogl/looniewatch.html

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

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.Y%24%24&v=s&w=5&t=l&a=1

Historical values http://www.x-rates.com/d/USD/CAD/data30.html

2007-06-11 Monday, June 11 0.942152 USD
2007-06-12 Tuesday, June 12 0.940203 USD
2007-06-13 Wednesday, June 13 0.937383 USD
2007-06-14 Thursday, June 14 0.935979 USD
2007-06-15 Friday, June 15 0.936505 USD
2007-06-18 Monday, June 18 0.932836 USD
2007-06-19 Tuesday, June 19 0.940026 USD
2007-06-20 Wednesday, June 20 0.93932 USD
2007-06-21 Thursday, June 21 0.932227 USD
2007-06-22 Friday, June 22 0.93668 USD
2007-06-25 Monday, June 25 0.933532 USD
2007-06-26 Tuesday, June 26 0.935279 USD
2007-06-27 Wednesday, June 27 0.933184 USD
2007-06-28 Thursday, June 28 0.941088 USD
2007-06-29 Friday, June 29 0.94038 USD
2007-07-02 Monday, July 2 0.947598 USD
2007-07-03 Tuesday, July 3 0.94402 USD
2007-07-04 Wednesday, July 4 0.94402 USD
2007-07-05 Thursday, July 5 0.946342 USD
2007-07-06 Friday, July 6 0.954381 USD
2007-07-09 Monday, July 9 0.95429 USD


Current values

Loonie:

Last trade 0.9524 Change -0.0029 (-0.30%)
Previous Close 0.9554 Open 0.9549
Low 0.9497 High 0.9550


Other combinations:

AS.M07 AUSTRALIAN $/CANADIAN $ Sep (NYBOT) 0.89840 +0.00245
RA.M07 EURO/AUSTRALIAN $ Sep (NYBOT) 1.59065 -0.00595
HY.M07 CANADIAN $/JAPANESE YEN Sep (NYBOT) 116.775 +0.115
GB.M07 EURO/BRITISH POUND Sep (NYBOT) 0.68030 +0.00195
EP.M07 EURO/CANADIAN $ Sep (NYBOT) 1.43249 +0.00345
EJ.M07 EURO/JAPANESE YEN Sep (NYBOT) 166.55 -0.215
EU.M07 EURO/US$ (LARGE) Sep (NYBOT) 1.3656 +0.00001


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

The September Canadian Dollar was lower overnight as it consolidates some of Monday's rally but remains above June's high crossing at .9507. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If September extends this summer's rally, weekly resistance crossing at .9683 is the next upside target. Closes below the reaction low crossing at .9313 would confirm that a top has been posted. Overnight action sets the stage for a steady to lower opening in early-day session trading.



Analysis

There's more blather in the TLP.

The CBC spent quite a bit of time on this on the morning drivein show.

Apparently 10,000 manufacturing jobs have been lost due to the 6-month upswing in the loonie. Some analysts are saying it should stabilize in the $0.93-95 range, but others are predicting parity and beyond. There's considerable difference of opinion on what effect (if any) fiddling with interest rates will have on the situation.

I'm going out on a limb and saying that interest rates isn't going to be enough to stem the bleeding of the greenback and investors' wishes to bet on a stable currency, robust economy and (somewhat) sane government.

http://www.financialsense.com/editorials/panzner/2007/0710.html

On the face of it, it seemed like a great idea: an insurance policy for investment portfolios. No wonder it was popular with the Wall Street crowd. Unfortunately, it was not until the strategy was put to the test in the fall of 1987 that its many shortcomings came to light. By then, of course, it was too late.

“Portfolio insurance” was first developed more than two decades ago in an attempt to limit the damage caused by significant share-price declines. Previously, fund managers found it hard to adjust quickly to sudden market turbulence, mainly because of practical issues associated with rebalancing large portfolios at a time when technological solutions were limited and communications networks sluggish.

Dreamed up by academics Hayne Leland and Mark Rubinstein -- who were later joined by marketing whiz John O’Brien -- portfolio insurance involved adjusting hedges or cash holdings in discrete steps that were tied to changes in market values, a process known as “dynamic hedging.” The lower prices went, the larger the offset and the smaller the exposure to additional downside risk.

Generally speaking, the Leland O’Brian Rubinstein Associates, Inc. (LOR) approach necessitated selling more and more index futures as prices fell. The goal was to immunize portfolios against the full bore of bearish red ink. In some respects, it was a glossed-up version of the mechanical stop-loss tactics long employed by traders and chartists.

more...

http://www.financialsense.com/fsu/editorials/kirby/2007/0709.html



LTCM REVISITED - A FORENSIC ACCOUNT
by Rob Kirby
KirbyAnalytics.com
July 9, 2007


LTCM was a hedge fund based in Greenwich, Connecticut, USA. The fund was formed in 1994 by a group of ex-Salomon Brothers traders led by John Meriwether. The key principals (in addition to Meriwether) included Eric Rosenfield, Lawrence Hilibrand, William Krasker, Victor Haghani, Greg Hawkins and David Modest. LTCM principals included Nobel price winners Robert Merton and Myron Scholes and former regulators including former Federal Reserve Board Vice Chairman David Mullins.

It’s been written that,

“the presence of Merton, Scholes and Mullins was puzzling. Merton and Scholes were at heart academics engrossed in research. Despite consulting gigs, they were unworldly when it came to the trading wars. Mullins was a career central banker . But they were names.”

Or were they simply names?

As Adam Hamilton reported back in the year 2000:

Persistent rumors exist that LTCM was short 400 tonnes of gold when it went belly up. The US government arranged for someone to supply this gold owed to counterparties very quietly, and forbade any LTCM principals to ever discuss the gold position and disposition in the future. Although the whole LTCM and gold scenario is incredibly intriguing, it is topic for a future essay.

It is a fact that one of LTCM’s investors was none other than the Bank of Italy. There have been books penned on this topic and here is a snippet of a review from one of them - "Inventing Money" is published in London by John Wiley & Sons Ltd:


more...

Dow 13,549.01 100.96 (0.74%)
Nasdaq 2,646.02 24.00 (0.90%)
S&P 500 1,516.88 14.97 (0.98%)
10-Yr Bond 5.073% 0.086

NYSE Volume 1,929,909,000
Nasdaq Volume 1,406,875,000

off Bernanke's speech as a non event, sellers are now finding somewhat of a negative angle with his prepared remarks. Even though the Fed Chairman steered clear of discussing the outlook for economy or interest rates, apparently investors wanted some more clarity on the inflation picture.

Bernanke stated that inflation expectations remain "imperfectly anchored" as the Fed still sees the potential for inflation despite the drop in the core PCE price index below 2%. While his speech is more of an academic exercise than a market-moving event, with the focus now turning to next week's semi-annual congressional testimony on monetary policy, there is still an upcoming Q&A session that may contribute to some market volatility. DJ30 -68.61 NASDAQ -17.61 SP500 -11.17 NASDAQ Dec/Adv/Vol 2024/926/1.23 bln NYSE Dec/Adv/Vol 2214/981/782 mln

1:00 pm : No real change in the proceedings as investors continue to make their way through the New York hour. The market has been in a holding pattern ahead of Fed Chairman Bernanke's speech before the National Bureau of Economic Research, which begins momentarily.

Bernanke is expected to remain tough on inflation, as has been the case for more than a year; but as evidenced by the rally in Treasuries, the market doesn't appear too concerned that his hawkishness will raise expectations for a rate hike anytime soon.

DJ30 -43.85 NASDAQ -12.79 SP500 -8.23 NASDAQ Dec/Adv/Vol 1976/959/1.09 bln NYSE Dec/Adv/Vol 2207/969/692 mln

:eyes:

The euro soared to an all-time high against the U.S. dollar on Tuesday, topping the $1.37 mark as key U.S. retailers and homebuilders lowered their growth forecasts, causing more concern about the American economy.

"The dollar is a basket case," said Peter Schiff, president of Euro Pacific Capital Inc. "We are going to pay the piper for years of having the underlying fundamentals of our economy disintegrate beneath our feet."

http://biz.yahoo.com/ap/070710/dollar.html?.v=13

edit to add another article...
With investors fearful that the ongoing downturn in the US housing market will start to slow the economy, the euro rose as high as $1.3741 on Tuesday.
http://news.bbc.co.uk/2/hi/business/6289752.stm


Here's more articles...
http://money.cnn.com/2007/07/10/markets/bondcenter/bonds/index.htm?postversion=2007071014

http://www.msnbc.msn.com/id/19683059/

Dollar falls to 26-year low against British pound
http://www.msnbc.msn.com/id/19568856/

ed. On the 'Casablanca' (Bogart/Bacall) theme. Of course: we'll always have Paris. :-( :-)

You saw it coming. Thanks, many thanks for the information.

(Excellent cartoon, btw). Shut the fuck up (slaps himself). Sorry. Very sorry. Even in present dollar terms, and forgetting, for one moment, the military factors, the US economy is extrremely powerful on the global playingfield (itself an anglo-saxon concept).

The Big Sleep, however, is my favorite, flaca.

Dow 13,501.70 down 148.27 (1.09%)
Nasdaq 2,639.16 down 30.86 (1.16%)
S&P 500 1,510.12 down 21.73 (1.42%)
10-Yr Bond 5.038% up 0.121

NYSE Volume 3,244,402,000
Nasdaq Volume 2,247,252,000

4:20 pm : Stocks snapped a five-day winning streak Tuesday as everything from heightened subprime concerns to profit warnings further underscoring signs of housing weakness ushered in a wave of widespread profit taking.

As if Dow component Alcoa (AA 41.66 -0.70) officially kicking off the Q2 earnings season last night with a lackluster earnings report wasn't bad enough, renewed fears surrounding possible spillover of the subprime fallout took an added toll on sentiment, especially throughout an influential Financial sector (-2.2%) that currently remains the only thorn in the broader market's side. It is now down 3.1% on the year and the absence of its leadership limits the upside potential of the S&P 500.

Right out of the gate investors were greeted with reports that Standard & Poor's may cut ratings on $12 bln in subprime mortgage bonds. S&P said, "The levels of loss continue to exceed historical precedents and our initial expectations," and does not foresee the poor performance abating. An increasing number of delinquencies in the subprime mortgage market raising concerns about credit quality issues for all lenders played into our downgrade of the Financial sector back in April.

Of the other nine sectors closing sharply lower, Consumer Discretionary (-1.9%) was another sore spot. Home Depot (HD 40.25 +0.02) provided disappointing profit guidance for the second time this year, citing weak housing market conditions. The company also commencing a tender offer to acquire 250 mln shares, however, served as enough of a mitigating factor to leave it as one of only five Dow components posting gains.

Nonetheless, DR Horton (DHI 19.40 -0.39) also lowering quarterly expectations, due to a 40% drop in orders for new homes, offered further proof that a housing recovery in 2007 is unlikely and why we also have an Underweight rating on the discretionary sector. The Department Stores (-3.9%) group was the sector's biggest disappointment and today's worst performer among the 143 (out of 147) S&P industry groups losing ground. Sears Holdings (SHLD 154.21 -17.20) warned that Q2 earnings will miss forecasts due largely to lower sales of home appliances.

Hopes that Bernanke might say something to calm the market's nerves were also dashed. The Fed Chairman steering clear of discussing the outlook for economy or interest rates, and not detailing the current inflation picture, left investors wanting more and valuations even more vulnerable. The S&P 500 and Nasdaq were coming off five straight days of gains and surged 1.8% and 2.4%, respectively, last week alone. After Bernanke provided no real evidence to the direction the Fed is headed, though, sellers were off to the races and never looked back.

The S&P 500 failing to find support above its 50-day moving average triggering a sell program late in the day exacerbated the market's broad-based downturn. BTK -0.9% DJ30 -148.27 DJTA -1.5% DJUA -1.2% DOT -1.6% NASDAQ -30.86 NQ100 -0.9% R2K -1.8% SOX -0.8% SP400 -1.5% SP500 -21.73 XOI -0.5% NASDAQ Dec/Adv/Vol 2236/808/2.15 bln NYSE Dec/Adv/Vol 2540/755/1.50 bln

3:30 pm : The indices continue to languish near session lows as buyers remain a reluctant bunch. There are, however, a handful of areas of catching a bid. Of the six (out of 147) S&P industry groups trading higher, Office Electronics (+3.8%) is pacing the way as Xerox (XRX 19.81 +0.73) rallies to multi-year highs.

The Refiners group is up 1.4% as some unexpected refinery shutdowns close gas futures up 1.0% on the day. Automobile Manufacturers (+1.2%) are turning in the next best performance following analyst upgrades on General Motors (GM 37.52 +0.75) and Ford Motor Co (F 9.11 +0.03). DJ30 -118.19 NASDAQ -29.00 SP500 -18.36 NASDAQ Dec/Adv/Vol 2197/840/1.79 bln NYSE Dec/Adv/Vol 2473/787/1.22 bln

It'll take me a week to clean the bloodstains and sweep the eyeballs off the floor.

See you tomorrow for more mayhem.

Ozy :hi: