STOCK MARKET WATCH, Monday March 17

Source: du

STOCK MARKET WATCH, Monday March 17, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 310
DAYS SINCE DEMOCRACY DIED (12/12/00) 2612 DAYS
WHERE'S OSAMA BIN-LADEN? 2338 DAYS
DAYS SINCE ENRON COLLAPSE = 2629
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

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

AT THE CLOSING BELL ON March 14, 2008

Dow... 11,951.09 -194.65 (-1.60%)
Nasdaq... 2,212.49 -51.12 (-2.26%)
S&P 500... 1,288.14 -27.34 (-2.08%)
Gold future... 999.50 +5.70 (+0.57%)
30-Year Bond 4.35% -0.11 (-2.38%)
10-Yr Bond... 3.42% -0.11 (-3.20%)






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

BY BRIAN PRETTI

It was probably six to nine months ago when I penned a discussion entitled "The Asset Inflation Nation." The bottom line of that commentary was that US households had learned to "save" over the last quarter century via household asset inflation, especially the boomer generation that came of age in the late 1970's/early 1980's. Clearly what the boomers "learned" over the 1980's through just recently is that equities and residential real estate values "always go up over time." Of course what is implicit in this thought is that household asset inflation always occurs over time. Hence, actual savings out of income is much the rare commodity these days after literally a quarter century of learned experience. Visual historical experience explains this line of thinking better than words.

-chart-

It always strikes me as a good bit funny when I hear about equities and real estate values “always going up over time,” and especially from the boomer crowd. The irony, at least in my mind, is that so few realize “they were the buyers.” As the boomers came of age in the late 1970’s/early 1980’s, they did two things that drove the phenomenon of household asset inflation. They began to consistently fund IRA, 401(k), profit sharing plans, etc. Likewise, many of their employers were right alongside them funding defined benefit and contribution plans, and the like. Let’s face it; it has been a quarter century of a one-way street in terms of retirement savings contributions directed into equity buying. Of course with this tailwind, in good part this contributed to the multi-decade rise in equity prices that both helped create and reinforce the perception that equity prices always go higher. To cut right to the chase, residential real estate prices were also driven in good part by a multi-decade experience of virtually continuous boomer household formation, again leading to the popular perception that residential real estate prices always go higher. If we think about it in very simple macro terms, the baby boomers were the juice that drove the US credit cycle for a quarter century. It’s really no wonder at all that the official US savings rate ultimately plummeted nose first into the tarmac.

Remember the well-worn old joke about the client and the broker? Client calls the broker and says lets buy XYZ stock. As the broker buys the stock the price starts to rise. Ecstatic and emboldened by his/her “wisdom,” client says lets buy some more. Same outcome as the stock again rises. To cut to the punch line, the client repeats the process and the stock continues to miraculously rise until the client decides that’s enough. So, client calls the broker and says, “sell.” You already know the response, right? “Sell to who? You were the buyer.” Baby boomers and broader US households take heed.

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

8:30 AM NY Empire State Index Mar
Briefing Forecast -8.0
Market Expects -5.0
Prior -11.7

9:00 AM Net Foreign Purchases Jan
Briefing Forecast NA
Market Expects NA
Prior $56.5B

9:15 AM Industrial Production Feb
Briefing Forecast -0.1%
Market Expects -0.1%
Prior 0.1%

9:15 AM Capacity Utilization Feb
Briefing Forecast 81.2%
Market Expects 81.3%
Prior 81.5%

http://biz.yahoo.com/c/ec/200812.html

03. U.S. March Empire State index -22.2 vs -11.7 in Feb
8:30 AM ET, Mar 17, 2008 - 2 minutes ago

04. U.S. March Empire State index plunges to record low
8:30 AM ET, Mar 17, 2008 - 2 minutes ago

01. U.S. 2007 current account deficit falls to 5.3% of GDP
8:30 AM ET, Mar 17, 2008 - 2 minutes ago

02. U.S. 4Q current account deficit falls to 4.9% of GDP
8:30 AM ET, Mar 17, 2008 - 2 minutes ago

'cuz deficits don't matter - don't cha know!

All good. :crazy:

I stood by CNBC waiting for these reports before turning on my vaccuum, but I heard nothing and figured I had the report time wrong. Maybe I somehow missed it? The NY Empire State number seems pretty major to me.

02. U.S. Feb. capacity utilization falls to 80.9%
9:15 AM ET, Mar 17, 2008 - 11 minutes ago

03. U.S. Feb. manufacturing output falls 0.2%
9:15 AM ET, Mar 17, 2008 - 11 minutes ago

04. U.S. Feb. utility output falls 3.7% on weather conditions
9:15 AM ET, Mar 17, 2008 - 11 minutes ago

05. U.S. Feb. industrial production falls 0.5%
9:15 AM ET, Mar 17, 2008 - 11 minutes ago

WASHINGTON (AP) -- A measurement of housing developers' sentiment about the U.S. housing market is expected to remain flat this month, as the long-awaited housing recovery fails to materialize.

The National Association of Home Builders/Wells Fargo housing market index for March is scheduled to be released at 1 p.m. EDT Monday.

The report reflects a survey of about 400 residential developers nationwide, tracking builders' perceptions of current market conditions and expectations for home sales over the next six months.

http://biz.yahoo.com/ap/080317/builder_sentiment_out_of_the_gate.html?.v=1

SINGAPORE - Oil prices jumped to an all-time trading high near $112 a barrel Monday in Asia as the tumbling U.S. dollar and plunging stock markets prompted investors to seek shelter in commodities.

Investors fled the dollar after a surprise move by the U.S. Federal Reserve on Sunday to provide cash to financially squeezed Wall Street investment houses pushed the battered greenback deeper into multiyear lows against the yen.

"The Fed's move overall will help the liquidity of the U.S. dollar, and that will really further soften the dollar," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "Meanwhile, investors seem to be just following the mantra of buying oil and commodities to hedge against the falling dollar and inflation."
.....

Interest rate cuts in the U.S. further weaken the dollar and have helped drive oil's rise. In an extraordinary weekend move, the Fed cut its discount rate on Sunday by 25 basis points to 3.25 percent. The Fed is also expected to cut the benchmark federal funds rate at its regularly scheduled monetary policy meeting on Tuesday.

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

http://www.bloomberg.com/apps/news?pid=20601080&sid=aFo_2l5LNzFA&refer=asia

In summary:



More Monday morning early stories in the special Sunday SMW: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3229813

^AORD All Ordinaries 5,173.20 1:11AM ET Down 115.30 (2.18%)
^SSEC Shanghai Composite 3,820.05 3:00AM ET Down 142.62 (3.60%)
^HSI Hang Seng 21,084.61 5:41AM ET Down 1,152.50 (5.18%)
^BSESN BSE 30 14,888.33 5:41AM ET Down 872.19 (5.53%)
^JKSE Jakarta Composite 2,312.32 5:55AM ET Down 71.10 (2.98%)
^KLSE KLSE Composite 1,194.84 Mar 14 Down 6.51 (0.54%)
^N225 Nikkei 225 11,787.51 3:00AM ET Down 454.09 (3.71%)
^NZ50 NZSE 50 3,429.44 12:31AM ET Down 71.47 (2.04%)
^STI Straits Times 2,792.75 5:10AM ET Down 46.26 (1.63%)
^KS11 Seoul Composite 1,574.44 5:03AM ET Down 25.82 (1.61%)
^TWII Taiwan Weighted 8,005.46 1:46AM ET Down 155.93 (1.91%)

I apologize for the hyperbole. The one-trick-pony Fed can do nothing more than it has already done. But yet they keep on cutting rates killing the dollar and the consumer's ability to pay for basic needs.

The Fed only cares for their buds in the banks. Rest of us be damned. How did we come to this sorry state?

It's causing inflation all over the world.

How the dollar crisis manifests is a wholly different deal. The dollar is hobbled and the Fed has promised more abusive punishment tomorrow. But when we see today's economic data, more indications will pile up that jobs are evaporating just like personal and home equity. Manufacturing activity has dissolved over the past two years.

Meanwhile economic activity across the world continues to grow at slow pace. But that is more than one can say for the United States. For a nation that must import so much of its consumables - even food - we are in a wretched position to have our currency devalued.

I'll be blunt: anyone who says that we are not in a recession right now is a knuckle dragging idiot.

EDIT: Ghost Dog, it is a dollar crisis that has become an everything crisis.

If they don't inflate, isn't there a very real danger of DEflation? Can you imagine trying to pay off all of the debt we've accrued, collectively and individually, in 1931 dollars?

I just don't think that the Fed has another viable play at this point. Inflate or do nothing, imo. Which is the better thing to do looks to have an even chance of being wrong.

but hyperinflation isn't the solution.

They just don't want their buddy's assets to deflate.

Increasing the interest rate would help every elderly person and anyone who saves a dollar. But it wouldn't help the con artist who caused this mess.

Wasn't it Einstein who said doing the same thing over and over again expecting different results is the meaning of insanity?

It worked for a very few billionaires at the top. It hasn't worked for the rest of us for a couple of decades.

That's the problem, you see, they always remember the heady days of building the new robber baron class. They completely forget all the pain the rest of us go through and that there is always a crash at the end. The country is like a junkie, always wanting to chase that elusive high and make it a permanent state of mind.

It's why we can always count upon the rich and people who want to be rich to do the wrong thing, over and over again, no matter what it costs everybody else.

Many articles and columns have been posted here over the past two weeks. They all reach the same conclusions: The Fed is out of tricks. At this point, I feel the Fed is just trying to restore confidence, any amount of confidence, in the banking system. It is a feeling eerily similar to the Cuban Missile Crisis during the Kennedy administration. You're facing oblivion and desperately hope that crisis will resolve itself with the least damage.

What enfuriates me is that the Fed does the same thing over and over again, never achieving a positive result. They are simply throwing currency into a shredder. It is also a tactic that exemplifies insanity.

I told my wife that this might be the most dangerous day for America since the Cuban Missile Crisis. Right this minute, it doesn't look too bad. But who knows whether that's real or whether our intrepid PPT is propping the whole thing up with promises?

(summary for non-subscribers) http://leap2020.eu/GEAB-N-23-is-available!-Global-systemic-crisis-End-of-2008-Pension-funds-go-off-the-rails_a1428.html?PHPSESSID=1b35f747f8c8cdee7b8beb462c7de388

...Monopolist Provider

The writer of the e-mail directs his readers to the most recent H.3 report, which shows total reserves ($41.6 billion) less TAF credit ($50 billion) less discount window borrowings ($390 million) equals non-borrowed reserves (minus $8.8 billion). The negative number is really an accounting quirk: If banks borrow more than they need, non-borrowed reserves are a negative number.

This gentleman is overlooking the fact that the Fed is ``a monopoly provider of reserves,'' said Jim Glassman, senior U.S. economist at JPMorgan Chase & Co. ``This is a non-starter. There is no such thing as a banking system short of reserves. The Fed has absolute control over the supply.''

There may be times, such as late last year, when banks are reluctant to lend to one another for a period longer than overnight. ``And any one bank can have a problem'' funding itself, Glassman said. But in a world where ``the Fed can print money, there is no shortage,'' he said. ``The banks get the reserves they want.''

Low Priority Worry

Those hyperventilating over TAF borrowing may want to consider an alternate scenario.

``Suppose the Fed cut the discount rate so that it stood below the funds rate,'' Kasriel said. (He said this yesterday, not two decades ago.) ``Would these folks be upset if banks went to the discount window for funds? What's the difference? It's a difference without a distinction.''

In a commentary this week, Goldman Sachs Group Inc. senior economist Andrew Tilton dismissed the case of the disappearing non-borrowed reserves as ``evidence of the markets' obsession with the health of the financial system.''

Some of the concern is justified, he said, given banks' massive losses and writedowns on subprime loans.

Of all the things to worry about right now, this isn't one of them.

/... http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_baum&sid=a7EAJelhvLh0

... and, what the hell, let's see the image here (note, this is not new today; this happened at the start of the year):

Other appropriate descriptors: cataclysm, clusterfuck, 'Heckuvajob'... Feel free to add your own. We've been Bushed. (My favorite quote of his: "I made my arguments and went down in flames. History will prove me right.")

As an example of truly off-the-charts hyperbole, I quote the excellent Bob Chapman(theinternationalforecaster.com):



He later says: "Gold and silver are headed for a wormhole that leads into inter-dimensional space!"

Certainly gets the point across!

:donut: and Lurkers. We are on Spring Break and I am just now getting about. Ol Jenny (my faithful Honda) was a bit down this morning.

I spent an interesting morning at the coin shop Saturday (they close Sunday and Monday). There was a lot of activity from the get go. Folks that I never see in there were coming in selling scrap gold and silver. But what shocked me were the folks buying gold. One guy plunked down over 6K for Krugerrands. There was an out of town buyer that wanted 20 but didn't want to do a credit card transaction and didn't want the driver's license check (a homeland security thing). I think the guy buying the 6K was a fighter fighter and he was very vocal about the homeland security requirements (negatively). I'd be willing to bet he bought under the limit from what he could afford. The guy I go through told me that they get a lot of folks before the FEDS make a statement (guess I wasn't the only person that noticed Bernanke raises the metals). They were already out of their 10 oz bars of silver and just had those little chits left. I normally stay and chat a while but those guys were starting to get swamped, so I left.

We are getting prepared for my daughter's Senior Recital and reception. She chose April 1 and we nailed down the reception site (our fav Indian Restaurant-I first took her there when she was 4-the headwaiter and the owner were actually getting a bit misty eyed). I swear, they gave us a family rate on the price. We are working on the invitations this week. When you go to a High School for the Visual and Preforming Arts.....the Senior Recital is a BIG DEAL. It's a cross between recital performance, a gallery opening, and a debutante cotillion. My daughter tried to get several folks to play a quartet but in the end-everyone ditched and she will be solo. She has preformed solo in church-so I think she'll sound ok. We have family and friends packed in among st the musicians for support. She will be recorded for her college apps, and we are all looking forward to it. She also turns 18 next month. She's happy because she wants to start working as a bartender and that is the legal age. What a hoot.

Well I will post our pool but I'll tell you folks-all the talk (or lack of)this weekend made me very nervous about the market. I think the house of cards is getting rickety and the first ones are being shaken out.....

Happy hunting and watch out for the bears. Hibernation is over and they are coming out to feed.

That's when you watch out for the tar and feathers committee.

Mon Mar 17, 2008 5:35am EDT
LONDON, March 17 (Reuters) - European shares tumbled by more than 3 percent early on Monday as a distress sale of Bear Stearns (BSC.N: Quote, Profile, Research) pushed rattled investors to dump financials, fearing contagion across the banking system.

The euro hit a new high against the dollar and crude continued to surge to new records, compounding the woes of companies in the region.

At 0920 GMT, the FTSEurofirst 300 was down 3.2 percent at 1,215.32, tracking big losses in the United States and Asia after JP Morgan (JPM.N: Quote, Profile, Research) unveiled a takeover of stricken rival Bear Stearns at a rock-bottom price.

Banks led losers, with UBS (UBSN.VX: Quote, Profile, Research), Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and Barclays (BARC.L: Quote, Profile, Research) all falling more than 8 percent. HBOS (HBOS.L: Quote, Profile, Research) and Alliance & Leicester (ALLL.L: Quote, Profile, Research) slid more than 11 percent.

"There's turmoil in all markets after Bear Stearns, and equities is not the place to be," said BNP Paribas strategist Edmund Shing.

"Everyone's asking: Who's next? Is there a Bear Stearns in Europe, could investment banks start to fail?"

/... http://www.reuters.com/article/marketsNews/idCAL1763246420080317?rpc=611

Snapshot:

^ATX ATX 3,591.84 5:49AM ET Down 126.33 (3.40%)
^BFX BEL-20 3,581.69 6:04AM ET Down 95.19 (2.59%)
^FCHI CAC 40 4,471.28 6:04AM ET Down 120.87 (2.63%)
^GDAXI DAX 6,242.38 5:49AM ET Down 209.52 (3.25%)
^AEX AEX General 420.66 6:04AM ET Down 11.64 (2.69%)
^OSEAX OSE All Share 462.69 5:49AM ET Down 9.13 (1.94%)
^MIBTEL MIBTel 23,610.00 6:04AM ET Down 613.00 (2.53%)
^IXX ISE National-100 85.75 Mar 14 0.00 (0.00%) Closed for St. Patrick
^SMSI Madrid General 1,379.35 6:00AM ET Down 29.69 (2.11%)
^OMXSPI Stockholm General 296.76 6:03AM ET Down 8.33 (2.73%)
^SSMI Swiss Market 6,903.66 6:04AM ET Down 228.37 (3.20%)
^FTSE FTSE 100 5,509.20 5:49AM ET Down 122.50 (2.18%)

FRANKFURT (Thomson Financial) - The strong euro has significantly helped in reducing costs of German imports of crude oil and mineral oil prices as well as raw materials, the Bundesbank said in its monthly report.

"The purchasing costs for crude oil and mineral oil products as well as other raw materials would have been significantly higher than the actual case if the euro had not appreciated against the US dollar," it said.

"This is partly because raw materials and intermediate producer goods have a bigger weighting on the import side than on exports," it said.

All in all, it said the euro appreciation has been relatively neutral on German exports and imports, though German importers have adjusted their euro prices based on exchange rate changes significantly stronger than exporters.

"Prices of German exports and imports have become less sensitive to exchange rate changes of the euro," it said.

/... http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=3a139ef7-4e86-44d5-9ed5-2e7604532e2e

ZURICH (Thomson Financial) - University of Zurich's Centre for Economic Research (KOF) has lefts its GDP growth forecasts for 2008 unchanged at 2.1 pct, while it raised its forecast for 2009 to 2.0 pct from 1.9 pct.

...

The institute also increased its inflation forecasts, with consumer prices in 2008 now seen rising 1.7 pct from 1.6 pct previously and 1.1 pct in the following year from 1 pct.

/.. http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=f4223c1c-9825-496e-b35c-4ed4de5b0c5e

The Bank of England pumped an extra £5bn into increasingly strained money markets on Monday morning, its first emergency provision of liquidity since September.

Responding to what it described as “conditions in the short-term money markets“ in the wake of the sale of Bear Stearns to JP Morgan, the Bank said it was willing to offer the money for three days until its normal weekly refinancing operation on Thursday.

/... http://www.ft.com/cms/s/c7887142-f40b-11dc-aaad-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fc7887142-f40b-11dc-aaad-0000779fd2ac.html&_i_referer=

Mon Mar 17, 2008 12:09pm GMT
LONDON, March 17 (Reuters) - Britain's leading share index skidded 2.6 percent by midday on Monday as financials were lashed by fears the fire sale of U.S. bank Bear Stearns (BSC.N: Quote, Profile, Research) signalled the credit market crisis would claim more victims.

Alliance & Leicester (ALLL.L: Quote, Profile, Research) and HBOS (HBOS.L: Quote, Profile, Research) both slid more than 10 percent, while Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and Barclays (BARC.L: Quote, Profile, Research) both lost nearly 8 percent.

Investors shunned the sector after JPMorgan (JPM.N: Quote, Profile, Research) announced a takeover of Bear Stearns at a rock-bottom price, and ahead of a set of key investment bank results due this week.

By 1139 GMT the FTSE 100 .FTSE was down 146 points at 5,485.7, hitting its lowest level since the end of January as Europe tracked steep falls in Asia and U.S. stock futures tumbled.

...

The Bank of England's exceptional offer of 5 billion pounds worth of 3-day loans to calm money markets on Monday was nearly five times oversubscribed.

...

Miners all fell as copper prices dropped on global growth concerns. Kazakhmys (KAZ.L: Quote, Profile, Research) shed 7.5 percent, Vedanta (VED.L: Quote, Profile, Research) fell 5.1 percent and Antofagasta (ANTO.L: Quote, Profile, Research) dropped 6.9 percent.

/... http://uk.reuters.com/article/londonMktRpt/idUKL1723158120080317?pageNumber=3&virtualBrandChannel=0

NEW YORK (Reuters) - The rocky ride for the U.S. stock market looked set to intensify this week, as investors worried there could be more victims of the global credit crisis after JPMorgan Chase bailed out Bear Stearns (BSC.N).

On Sunday evening, U.S. stock index futures were pointing to a sharply lower open after JPMorgan Chase & Co (JPM.N) bought stricken rival Bear Stearns (BSC.N) for a rock-bottom price.

In a surprise move, the U.S. Federal Reserve cut the discount rate it charges on direct loans to banks and announced a new program to lend directly to Wall Street dealers.

The new the biggest sign yet of how devastating the credit crisis is for Wall Street, pushed the U.S. dollar to a new record low against the euro and pummeled Asian stock markets early Monday.

U.S. stock indexes futures on Sunday evening were pointing to a sharply lower open on Wall Street on Monday. S&P 500 futures fell 27 points, while Nasdaq futures slid 35.75 points. Dow futures were down 200 points.

http://news.yahoo.com/s/nm/20080317/bs_nm/column_stocks_outlook_dc

LONDON (CNNMoney.com) -- U.S. stocks looked set for a miserable start Monday as the Federal Reserve's cut to the discount rate and sale of Bear Stearns deepened fears about the health of the financial sector.

At 5:22 a.m. ET, Nasdaq and S&P futures were sharply lower, suggesting heavy losses at the market open.

The Fed lowered the rate at which it lends loans to financial institutions to 3.25% on Sunday in a move to stem the credit crisis which has squeezed banks.

http://money.cnn.com/2008/03/17/markets/stockswatch/index.htm

Closing the 'Collapse Gap': the USSR was better prepared for collapse than the US by Dmitry Orlov

Long article, certainly grim, but worth a read....

Link here

.....

Slide <5> Continuing with our list of superpower similarities, many of the problems that sunk the Soviet Union are now endangering the United States as well. Such as a huge, well-equipped, very expensive military, with no clear mission, bogged down in fighting Muslim insurgents. Such as energy shortfalls linked to peaking oil production. Such as a persistently unfavorable trade balance, resulting in runaway foreign debt. Add to that a delusional self-image, an inflexible ideology, and an unresponsive political system.

Slide <6> An economic collapse is amazing to observe, and very interesting if described accurately and in detail. A general description tends to fall short of the mark, but let me try. An economic arrangement can continue for quite some time after it becomes untenable, through sheer inertia. But at some point a tide of broken promises and invalidated assumptions sweeps it all out to sea. One such untenable arrangement rests on the notion that it is possible to perpetually borrow more and more money from abroad, to pay for more and more energy imports, while the price of these imports continues to double every few years. Free money with which to buy energy equals free energy, and free energy does not occur in nature. This must therefore be a transient condition. When the flow of energy snaps back toward equilibrium, much of the US economy will be forced to shut down.

Slide <7> I've described what happened to Russia in some detail in one of my articles, which is available on SurvivingPeakOil.com. I don't see why what happens to the United States should be entirely dissimilar, at least in general terms. The specifics will be different, and we will get to them in a moment. We should certainly expect shortages of fuel, food, medicine, and countless consumer items, outages of electricity, gas, and water, breakdowns in transportation systems and other infrastructure, hyperinflation, widespread shutdowns and mass layoffs, along with a lot of despair, confusion, violence, and lawlessness. We definitely should not expect any grand rescue plans, innovative technology programs, or miracles of social cohesion.

Slide <9> One important element of collapse-preparedness is making sure that you don't need a functioning economy to keep a roof over your head. In the Soviet Union, all housing belonged to the government, which made it available directly to the people. Since all housing was also built by the government, it was only built in places that the government could service using public transportation. After the collapse, almost everyone managed to keep their place.

In the United States, very few people own their place of residence free and clear, and even they need an income to pay real estate taxes. People without an income face homelessness. When the economy collapses, very few people will continue to have an income, so homelessness will become rampant. Add to that the car-dependent nature of most suburbs, and what you will get is mass migrations of homeless people toward city centers.

and more....

The word from government offices under this Bush administration mirrors the "not as bad as it seems" rhetoric from the Soviet Union's playbook. We have become so accustomed to the Bush rabbit-hole logic that it isn't even funny anymore. It's just soviet ideology under a different banner.

The US Military-Industrial complex, which has driven the US economy since WWII, much in part to 'counter' the Soviet military-industrial complex was eventually going to play a major part in the present economic collapse. The re-branding to fight 'Terrorism' was like putting a new dress on an old whore.
The Soviet Union collapsed and now we are seeing the inevitable opposite reaction. Russia, freed of its burden of unsustainable military spending is now able to apply its energy to productive ends with a resulting increase in wealth.

out of the magic hat. And someone advised them that going after 'ecowarriors' just wouldn't swing it...

Thanx, Matt!!

random thoughts...

...depending on how much "power" the extant authorities will have, squatting may become popular for those who need shelter... street, squat, jail- eh (shrug)

...people may decide that they will stay put, and simply not make payments, especially if owner of the loan has gone belly-up... if enough people do this, the courts will never get to all the cases...

...building codes are more likely to be ignored <1> because the inspectors have been laid off, <2> people will invite less fortunate family and friends to live with them, put up tents in the back yard, or build "illegal" dwellings on their property... (heck, I would- have 1/4 acre, have room for several more "sheds")

During the previous "Great Depression" my late grandparents lived in a tent-house on my great-gp farm. They felt extremely lucky to have their own "house". The tent had a little wood stove and basic furniture. (tent house= wooden floor, wood sides up about 3', top and upper sides of canvas)

WASHINGTON (Reuters) - U.S. Federal Reserve officials said on Sunday the U.S. central bank was taking additional extraordinary measures to ensure the broad spectrum of financial firms have access to liquid funds as a credit crisis roils markets.

"The Federal Reserve in close consultation with the Treasury is working to promote liquid, well functioning financial markets, which are essential for economic growth. To that end we took two steps today," Fed Chairman Ben Bernanke said in a rare conference call with reporters.

"These steps will provide financial institutions with greater assurance of access to funds," he added.

http://news.yahoo.com/s/nm/20080317/bs_nm/usa_fed_bernanke_dc

Fuck you Ben.

Is that your point? A gimmick that will ultimately deflate the US dollar??

"I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress."
- Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929

"I am convinced that through these measures we have reestablished confidence."
- Herbert Hoover, December 1929

"<1930 will be> a splendid employment year."
- U.S. Dept. of Labor, New Year's Forecast, December 1929

Same lies different day.

Why it’s harder to get a home loan
Rising foreclosures and big losses at Fannie Mae and Freddie Mac are making it harder for people with good credit backgrounds to get a traditional mortgage.

Gasoline: Painful, and getting worse
Experts say record pump prices are pushing energy spending to early 1980s levels, and that's helping pull the economy into recession.

Hard hit in the heartland
How record-high oil prices are offsetting the boom in commodity prices and making business tough for farmers in rural Minnesota.

Retail jobs on the chopping block
An economic downturn is eroding jobs in Columbus, a city where a vibrant retail landscape had been a key driver of economic growth.

http://money.cnn.com/news/specials/americas_money/2008/

I keep hearing this semi-nonsense that gas prices were higher in the 1980s. Now, I guess that's true as measured against the inflation rate. But it's a pretty bum indicator of how much gas has gone up for most Americans. Our real wages have been flat most of the time since the 1980s, but the gas has risen with inflation. Therefore, as a proportion of income, gasoline costs a helluva lot more now than it ever has for the majority of Americans. And the less you earn, the more expensive it is for you proportionally.

Just an observation.

of Moro Bay, CA - friend of mine reporting $5/gal reg

here in northeast Pa $3.23-3.28 range, with diesel going for $4.25 (give or take a couple of pennies)

costing truckers over $700 to fill their tanks...

and all of this is going to trickle down on us as higher prices at the store and utility bills.

as I've often heard quipped - "what do you expect with an oil guy in the white house"

-----

looking ahead - if you have money to invest, check out "green" companies especially if we get a dem in the white house. look for not only energy efficient focused products, but also alternative energies and companies which do or will make products for retro fitting old houses/buildings with "green products"

wouldn't hurt to look at manufacturers who still have plants in the US - higher gas/fuel prices and falling dollar are making it "cheaper" to build and ship products here as opposed to build/ship from over there...

Heh-heh, my investing days are over.

Gold and silver are the exceptions at this point.

I'll be going off grid and into the wilderness in about six weeks. This is a long-planned move, nothing to do with what's going on now. Just had it with cities and noise and stress and bills. Going either solar or micro-hydro, depending on the piece of land we buy.

I'll be watching the disintegration on satellite TV. :)

What Does Oil's New High Mean?
WorldChanging Team
March 5, 2008 5:00 PM

It finally happened.....
The price of oil passed the all-time inflation-adjusted peak of $103.76 that was set in April 1980—and is now three times what it was just four years ago.

more...
http://www.worldchanging.com/archives/007871.html


3/3/08 Oil Prices Pass Record Set in ’80s
The day’s highest trade, of $103.95 a barrel on the New York Mercantile Exchange, broke the record set in April 1980 during the second oil shock. That price, $39.50 a barrel, equals $103.76 in today’s money when adjusted for inflation. Oil closed Monday afternoon at $102.45.

more...
http://www.nytimes.com/2008/03/03/business/worldbusiness/03cnd-oil.html?

TEL AVIV (Dow Jones) - After 19 months in business and eight months as a public company, Carlyle Capital Corp., the Channel Islands affiliate of the Washington private-equity firm Carlyle Group, said Monday it would apply under Guernsey's companies law to liquidate the firm.

The company late Sunday said it "received default notices from its remaining two lenders and it believes that its lenders have now taken possession of substantially all of its U.S.-government-agency AAA-rated residential-mortgage- backed securities," Carlyle Capital said in a statement. "As a result, the company believes its liabilities exceed its assets."

Holders of the Class A shares have approved the move to liquidate, Carlyle Capital said.

Carlyle said the board recommended winding up the company's affairs after analyzing its prospects and "careful consideration of other options for continuing the business. The company will work with the court-appointed liquidator to ensure an orderly realization of assets and their subsequent distribution."

http://money.cnn.com/news/newsfeeds/articles/djhighlights/200803170517DOWJONESDJONLINE000165.htm

When market confidence collapses, Wall Street, like the cowardly Kansas town in "High Noon," needs strong, silent types for protection.

Last week's Gary Cooper was J.P. Morgan Chase, which "rescued" Bear Stearns as a prelude to devouring it. This week, investment banks will report quarterly financial results, just as investors are trying to identify which brokerage houses will be strong enough to weather the credit-market storm. They will pay close attention to fresh data on brokers' debt and ability to raise cash in a hurry.


Wall Street's flight to quality could mean stronger firms will rack up new brokerage clients, more asset-management business and relatively better terms on trades from customers looking for steady counterparties. In this new world, the strong get stronger while the weak search for buyers.

At first glance, the strongest of this group would seem to be Goldman Sachs Group. Though Goldman, which reports tomorrow, likely had an ugly quarter as a result of a backlog of unloved leveraged loans and a slowdown in investment-banking business, its balance sheet and management (risk and otherwise) generally are considered the strongest of its peers.

The tricky part is that in this environment balance sheets may not be the best indicators of strength. Early last week, Buckingham Research analyst James Mitchell, based in part on numbers reported at the end of Bear's fourth quarter, estimated that Bear Stearns had $35 billion in liquid assets and borrowing capacity, enough to operate for 20 months. Turns out it had enough for three days.

Lehman Brothers Holdings, which also reports tomorrow, has largely avoided suffering major damage from the credit crisis. It nonetheless has been the subject of market worries. Its share price has fallen 40% this year, while the cost of insuring Lehman Brothers debt in the credit-default-swap market has soared. As Bear Stearns learned, in this environment whispers of weakness alone can cause a pack of nervous lenders to flee from you.

"A company is only as solvent as the perception of its solvency," Oppenheimer analyst Meredith Whitney wrote in downgrading Bear Stearns on Friday. After last night's takeover deal with J.P. Morgan, Bear canceled its scheduled earnings report today.

All of the brokerage houses are highly leveraged, with a high ratio of assets to shareholders' equity, a sign they have used debt heavily to build up positions in hope of greater returns. Morgan Stanley, which will report Wednesday, had a leverage ratio of 32.6-to-1 at the end of last year, nearly as high as Bear's 32.8-to-1. Lehman was leveraged 30.7-to-1, and Merrill Lynch 27.8-to-1. And the would-be rock, Goldman? It was leveraged 26.2-to-1.

It will be interesting to see how those ratios and the firms' liquidity positions changed in the latest quarter, but they likely didn't improve markedly. As long as no one is certain of the value of brokerage houses' assets, which can include such potentially toxic holdings as mortgage-backed securities and positions in credit derivatives, none of these firms can be considered immune from the spreading crisis of confidence.

"This has become the new bird flu," says Barry Ritholtz, director of equity research at independent research firm Fusion IQ. "It's infected everybody."

Email mark.gongloff@wsj.com

http://online.wsj.com/article/SB120571475480240447.html?mod=googlenews_wsj

"A company is only as solvent as the perception of its solvency"

Company, country, currency, democracy, presidency....it's all nothing more than a game of perception and confidence now. "Brought toBought for you by...(name your global corporate conglomerate here)."

... ie. par for the course, these credit-spun/unspun days.

--> Quick, change the accounting rules!

"money guy" saying that's the "good news" behind the Enron mentality/insider trading/timing/cheating/whatever-you-want-to-call-it scandals. The rules have been changed so it can't happen again. :eyes:

Just saw that "cheery-money-chick" on GMA saying the same damned thing when Diane Sawyer asked about bailing out these executives that have made off with billions of dollars. "Can't be bothered with that right now - we must maintain solvency for the good of ALL Americans. The good new is this will bring on new regulation blah blah-blah blah babble...."

It's sounds like something by Lewis Carroll--

'When I use a word,' Humpty Dumpty said, in a rather scornful tone,' it means just what I choose it to mean, neither more nor less.'
'The question is,' said Alice, 'whether you can make words mean so many different things.'

'The question is,' said Humpty Dumpty, 'which is to be master - that's all.'


http://sundials.org/about/humpty.htm

March 17 (Bloomberg) -- ``Pain'' in U.S. and European credit markets is spreading to Asia, with borrowing costs in the region increasingly set by a company's access to funding and the value of its assets, Morgan Stanley said.

``This is more important for financials than any other sector,'' Morgan Stanley said in a report today. ``South Korean and Australian banks stand out in a regional context in terms of reliance on wholesale funding, and have predictably been punished.''

The chart of the day shows the spread of the three-month U.S. Libor rate against the comparative overnight index swap rate (white line), which surged in August after the collapse of hedge funds controlled by Bear Stearns Cos.

``The rest of the world remains convinced that this is largely America's problem,'' Stephen Roach, Asia chairman of Morgan Stanley, said via e-mail. ``This is also likely to be wishful thinking.''

The orange line shows an index of credit-default swaps of 125 investment grade companies in North America. The yellow line shows a similar benchmark for 50 Asian entities, excluding Japan. Notice the correlation in perceived risk in North America and Asia, and how the interest-rate spreads began matching in late January.

``Asian corporates generally benefit from very high liquidity,'' the report said. ``Cash on balance sheet is very high compared with U.S. and European peers, and the difference is higher still when compared with short-term debt.''

The deterioration reflects the ``unwinding of a two-decade- long trend in capital market disintermediation of bank lending to both corporates and consumers, and the resulting `credit crunch,''' said the report, co-written by economists Malcolm Wood, Chetan Ahya and Viktor Hjort.

To contact the reporter on this story: Lee J. Miller in Bangkok at lmiller@bloomberg.net

Last Updated: March 17, 2008 03:55 EDT
http://www.bloomberg.com/apps/news?pid=20601087&sid=asU.6IwS.AaM&refer=home

UBS AG, Europe's biggest bank by assets, fell the most in more than nine years in Swiss trading after a newspaper report that the company may cut as many as 8,000 jobs and propose a new capital increase.

UBS fell as much as 3.04 francs, or 11 percent, to 25.4 francs. If the shares close at this price, it would be the biggest drop since Sept. 30, 1998. UBS was down 5.8 percent at 26.78 francs by 9:26 a.m. in Zurich, bringing losses in the past 12 months to 62 percent.

Zurich-based UBS plans to cut 5 percent to 10 percent of jobs across its different units, Chief Executive Officer Marcel Rohner told the company's top managers at a meeting in Berlin last week, according to a report in SonntagsZeitung, which cited participants it didn't identify. The bank may also propose a capital increase at its shareholders meeting in April, it added.

Axel Langer, a spokesman for UBS, said yesterday that the Berlin meeting occurred and that job cuts may take place, though added there are ``no concrete plans'' to eliminate positions. He declined to comment on whether a capital increase was discussed in Berlin or is under discussion at the bank.

To contact the reporter on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net

Last Updated: March 17, 2008 04:51 EDT
http://www.bloomberg.com/apps/news?pid=20601213&sid=aHX0XeGu6PpQ&refer=home

S&P futures vs fair value: -22.9. Nasdaq futures vs fair value: -35.3.

a bank with a market cap of 4.09 Billion.

The US spends that much on the Iraq War in one week.

Oh, that's right, it comes out of the pockets of people who depend on being blood-sucking parasites for a living and the victim is getting anemic.

A Wall Street Domino Theory

Published: March 15, 2008

The Federal Reserve’s unusual decision to provide emergency assistance to Bear Stearns underscores a long-building concern that one failure could spread across the financial system.

Wall Street firms like Bear Stearns conduct business with many individuals, corporations, financial companies, pension funds and hedge funds. They also do billions of dollars of business with each other every day, borrowing and lending securities at a dizzying pace and fueling the wheels of capitalism.

The sudden collapse of a major player could not only shake client confidence in the entire system, but also make it difficult for sound institutions to conduct business as usual. Hedge funds that rely on Bear to finance their trading and hold their securities would be stranded; investors who wrote financial contracts with Bear would be at risk; markets that depended on Bear to buy and sell securities would screech to a halt, if they were not already halted.
.....

But the bigger worry for hedge funds and others that do business with Bear Stearns is whether the firm will be able to honor its trades. Of particular concern are the insurance contracts known as credit default swaps in which one party agrees to guarantee interest and principal payments in case an issuer defaults on its bonds. Investors in such contracts with Bear Stearns are closely studying whether they can get out of them or have them transferred to a more stable firm.

http://www.guvwurld.org/cgi-bin/live.cgi?d=/Economy/NYTimes%20-%20A%20Wall%20Street%20Domino%20Theory%20-%203-15-08.txt

I've been toying with the idea of cashing out my savings account and basically stashing it under my mattress (not literally, but....). I know the dollar is hosed no matter where it is, but at least I would have it readily available. The interest banks pay is nothing, so that's not a concern. With Bear Stearns saying all week how solvent they were and then all of a sudden closing shop. Banks could do this too, and they have in the past. Forget about the FDIC helping anyone.
I also know only I can make this decision. I guess I just wanted to say it out loud and see how it sounds. I've been concerned ever since Bush decided to stop publishing the M3 data. ALL bets are off then.
dumpbush

banks aren't safe, but if your house floods, burns or is burglarized the money is gone too.

I have a friend who has lived in some interesting places all over the world, and had his house/apartment broken into in all of them. He says that if a crook has enough time, there is no good place to hide valuables at home, but don't leave them in the obvious places in case an intruder doesn't have much time.

I had a roommate who hid her extra money in a box of tampons!

oops, that secret is out now

:P

was our solution when I was squatting in the World's End of central London, late 'seventies. Survived a few midnight 'surprise visits'. (Had a hard-won Beaulieu 16mm film camera amongst other things to hide).

you can make a 'stash box' out of anything. Check out you tube for how to films. A little plaster of paris, a jar, and a canister. I hollow out computer manuals-no one reads those anyway;)I bought the best one, a water bottle with water-too cool.

Oh one of the cruel things that happened when my house was burglerized....They stole my box of tampons and I didn't discover it til an emergency:(

I always leave something out that they can steal and I don't mind being rid of (costume jewelry is good, or a small safe or cash box with a little something in it). They go for the easy stuff.

space for a quality immoveable safe and you sure as hell don't want this stuff in a bank. This is portable wealth.

make sure they're Eagles or Buffaloes so you don't get saddled with the 28% CG Tax on collectibles. Silver eagles are good too.

The Buffaloes are .9999 fine and thus a better deal.

Where do you buy from?, and any sites or books you could rec about gold or silver bullion would be appreciated?

If you're concerned about taxes, get a good tax attorney.

As far as buying, it's a seller's market. Don't buy paper. Buy metal and don't put it in a bank lest the Government seize it and give you worthless paper. It's not a matter of where to buy but finding anyone willing to sell.

Good luck.

nor do I play one on TV. I can just tell you what I do with my money.

www.apmex.com

good prices, quality merchandise with a money-back guarantee, excellent customer service, small purchases no problem.

No, I have no monetary or family interest in the company, I've just been the most satisfied with them over any other I've dealt with.

Only US legal tender coins such as the recently minted Eagles and Buffaloes are exempt. There are some exceptions related to IRA investments but that's something to speak with a tax attorney about.

Foreign Gold coins are considered Bullion from a tax stand point and are taxable at the 28% rate.

:rofl:

As last resort, sell the coins from grandparents. Knew someone who borrowed some change from a roommate for ciggies, turned out they were rare and worth much much much more than the stamped amount. "well, how was I to know that the money you had in a box on your dresser was worth anything!" Not too bright of a guy.

In 1962, when I was 14, my mother sent me to the hardware store to buy some curtain rod hangers. She gave me a Dollar and I still remember there was 43 cents change. I always used to check my change and one of the coins turned out to be rare. I ran home all excited but my family laughed at me, so I walked 7 miles to the nearest coin dealer.

he examined it for what seemed like forever, then looked up and said to bring a parent with me and he would give me a check for $100. It was a 1909 S VDB lincoln penny, the rarest of them all. That was a lot of money back then.

My mother had been fixing up the house because she didn't have money to buy presents for her 9 kids but she was going to have the house looking nice for the holidays.

We all had presents that year.

I spoke with a dealer from NYC later and he said it was probably some kid stole it from a collection. he said it probably had not been in circulation for more than a couple of days.

The story would make a good children's book.

used acid (I think) to change thew date on some pennies from something like 1944 to 1941 and sold them. They got caught when the went back to the same coin dealer the third time.


Don't know what happened to them I gave them an A for ingenuity and an F for being really, really stupid.

I found what looks like a 1913-S, though is in pretty poor shape, need to take to someone to magnify way high. 6.1 million vs the 1/ million of yours.

That would make a good children's book. Very nice story with a happy ending for your family.

only 1 time with uncirculated coins-In India an unfathomable idea. He learned the hard way. It took a while for me to get over that. His friend and collector had to explain it to him, I couldn't even talk about it. He's lucky I didn't kill him.

The flip side of these coin "hedges" is that no one will buy them from you unless you give up a 20%+ discount.

So whatever you save, you give up in translation. It's still only worth what it melts down for.

on ebay at a premium.

You can always use Silver Eagles to trade with friends.

Anyone who sells their Gold at a pawn shop deserves to be screwed.

He was wonder whether Citi's book value is actually 22?? He wondered if there were any banks that could stand by their book value today.. He stated BS employees were betrayed by management..

Will there be a run on banks today??

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3229813

Based on the fact the Fed has seen fit to drop one of the lending rates on a Sunday. (Effective immediately)
and JP Morgan is buying BStearn for approximately $2.00 per share.

I guess that calls for a Special Edition: SMW.

<snip>

CAIRO, March 17 (Reuters) - U.S. investment bank Goldman Sachs (GS.N: Quote, Profile, Research) has purchased 5.5 percent of Egyptian real estate company Palm Hills Development PHDC.CA and could increase its stake to 10 percent, the Egyptian company said.

Palm Hills did not give the value of the deal.

Goldman bought the shares from El Mansour and El Maghraby Investment and Development Company, Palm Hills' largest shareholder, the Egyptian firm said in a statement sent to Reuters on Monday.

Palm Hills, founded in 2005, develops mainly high-end residential and resort projects in Egypt, it said. (Writing by Will Rasmussen; Editing by Louise Ireland)
http://www.reuters.com/article/mergersNews/idUSL1757495720080317

LONDON (Reuters) - There will be many casualties from the unfolding financial market crisis, which will lead to a large-scale overhaul of international banking regulations, codes and risk management, former Federal Reserve Chairman Alan Greenspan said.

Writing in the Financial Times, the former Fed chief said much of the financial system's risk-valuation models failed, not because they were too complex but because they were "too simple to capture the full array of variables governing that drive global economic reality."

"The crisis will leave many casualties. Particularly hard hit will be much of today's financial risk-valuation system," he wrote.

While insisting that current risk management models and econometric forecasting methods remain "soundly rooted in the real world," he said risk management can never be perfect.

http://news.yahoo.com/s/nm/20080317/bs_nm/economy_greenspan_dc

There goes another Bushie - creating his new reality.

You all need to tune into CNBC. While yes, the yucky numbers are up for all to see, they have the likes of Steve Liesman and others to explain how all this is going to turn out OK. No need to worry. It's all good. Trust us.

I think somebody should tell them that Chopper Ben doesn't have too many performances of his one and only song/dance routine left in 'im.

Does the PPT have the resources to stave off such a tsunami?

Julie

...if Ben has the helicopter running. Then Wall Street will be saved...while we pay $136 for a loaf of bread...$137...$140...

I may turn it on.

Nice little write-up on some of those huge write-offs taken back then as well as a look at Goldman Sach's smoke and mirror trick that still have them smelling like a rose.

http://www.dailyreckoning.com.au/goldman-sachs-2/2007/10/19/

Then they said it was contained.

Then they said it might not be fully contained, but that it wouldn't spread to alt-A.

Then they said there might be some problems with alt-A, but that those problems were contained . . .

:puke:

So, Carlyle has gone belly up. It couldn’t make its margin call. And all over town, other fund managers are biting their nails...and refusing to pick up the phone. The bankers are pacing the room too. You know the old saying: when you owe the bank $100,000...you can’t sleep at night. But when you owe the bank $1,000,000, it’s the banker who can’t sleep. Well, a lot of bankers are now sleepless in Manhattan and London...wondering which of their clients will be able to repay...and which won’t. And the last thing the Fed wants is for some large bank to make the headlines with news that it is broke. That’s what the Fed is for, after all. It’s a banking cartel...designed to protect the banks from their own stupid mistakes.

Of course, the big mistake the banks made was lending money to people who lent money to people who lent money to people who couldn’t pay it back. The subprime mortgage lenders didn’t worry, because they sold their loans on to packagers who sold them on again – often ending up in the portfolios of highly leveraged hedge funds, to whom the banks had lent money. S&P now projects that the losses from subprime will rise to $285 billion, up about $20 billion from their last estimate. Our estimate is that the losses will top $1 trillion...and if you throw in the collateral damage, lower house prices, the bill will rise to more than $6 trillion.

Houses in Southern California lost 17.9% over the past 12 months. The median price has sunk to $408,000. In the summer, the median price was over $500,000.

As expected, by us, retail sales slumped last month. Unemployment rose to a two and a half-year high. And America’s CFOs think the country is already in recession.

But today’s big question is this: will the feds succeed?

First, there is the practical issue of how lending to impaired banks in the middle of a credit crunch actually stimulates the real economy. The presumption is that there are worthy projects – new factories, business expansions, new technological developments, new employees to be hired – just waiting for credit from the banks. Now, with their balance sheets restored (they laid their subprime-infected credits off on the Fed in return for Treasury bonds)...they’ll be able to lend again; that’s the theory.

But what new factories? Who’s hiring? What businesses are expanding? The country is in a recession, for Pete’s sake. Besides, in the late stages of a credit bubble, few people borrow to actually expand the economy. The borrowers, instead, are hedge funds and speculators – just the people the banks are now afraid of. That’s just the way a credit cycle works. At first, the borrowers are solid...with sensible plans for the money. Each dollar they borrow results, say, another 75 cents to the nation’s GDP. But as the cycle goes on, the borrowers become more and more reckless. Asset prices tend to move up quickly, so the borrowers figure they can’t lose...and the lenders figure they have nothing to worry about because the collateral is becoming more and more valuable. As credit quality declines, each additional dollar borrowed adds less and less to the real economy. By the end, it may take an extra $10 worth of credit to produce a single extra dollar of GDP.

We take it as a given, at this stage, that more lending from the Fed cannot actually improve the real economy. In fact, it makes it worse – propping up failing companies, increasing speculation, misallocating resources, and adding to debts that will have to be paid, one way or another, by somebody or another, eventually. A better question is – how much damage will the feds do to the real economy?

Just dropped by to give y'all continuing kudos for keeping the watch on Wall Street. I've gotten a bit busier here at DU and with the "St Pat's season" on us, I've been gone as well (and #2 Son leaves for basic tomorrow), but I appreciate the continued efforts Ozy and the rest of you put into this every business day!
:donut::donut::donut::donut::donut::donut:

Sliocht sleachta ar shliocht bhur sleachta.

Best wishes and many blessings....

Ex-National Century Exec Goes on Trial
By ANDREW WELSH-HUGGINS – 16 hours ago

COLUMBUS, Ohio (AP) — Before Lance Poulsen can fight charges that he was the mastermind behind a $1.9 billion fraud scheme, the former CEO of National Century Financial must first deal with allegations that he proposed paying a government witness $500,000 to lie on the stand.

The federal witness tampering trial of the former owner of National Century, a health care financing company, was scheduled to begin Monday. Once that trial ends, Poulsen faces a second trial in August on multiple counts of conspiracy, wire and securities fraud and money laundering.

Five former executives at National Century were convicted of similar charges on Thursday in a fraud scheme that prosecutors likened to the cases of Enron and WorldCom.

In the tampering case, prosecutors say that Poulsen along with Karl Demmler, the owner of a Columbus bar and restaurant, teamed up to persuade the witness to help Poulsen beat the charges.

"It's not what you make up, it's what you forget," Demmler allegedly told the witness during a meeting on July 13 in Columbus, according to the FBI's criminal complaint.

During a July 18 meeting, "Demmler suggested Witness A have 'amnesia,'" according to the complaint. Poulsen told Demmler during a Sept. 28 phone call that one of the best things the witness could say was that she was unfamiliar with the indictment and charges against Poulsen.

Messages seeking comment were left for attorneys for Poulsen and Demmler.

Neither the complaint nor the Oct. 23 indictment identify the witness, but the government's 162-item exhibit list refers frequently to meetings between Demmler and Sherry Gibson, a former National Century executive vice president who pleaded guilty in 2003 to securities fraud in exchange for helping prosecutors.

Those meetings match the dates of Demmler's meeting with the witness in the criminal complaint. Gibson is expected to testify for the government, U.S. Attorney's office spokesman Fred Alverson said.

Gibson's attorney, Columbus lawyer Terry Sherman, said he continues to represent Gibson and that he is not involved in the witness tampering trial.

Gibson was the prosecution's star witness at the trial of the five former executives that concluded Thursday. She testified the company kept two sets of books, one for public consumption filled with false information and another that showed the firm's actual shortfalls.

She was not charged in the current witness tampering case.

National Century, based in suburban Dublin, offered financing to small hospitals, nursing homes and other health care providers by purchasing their debt. The government alleges the company also gave those providers unsecured loans, then lied to investors about those loans.

The government says company officials moved money between accounts to cover shortfalls, fabricated data and loaded false information on a company computer system.
http://ap.google.com/article/ALeqM5hdwBojIK_2ZMxZrnj6FlBOBqG0MgD8VEN9000


summary from the sidebar - Poulsen is eager to fight charges that he was the mastermind behind a $1.9 billion fraud perpetrated by his failed health care financing company. First, he must battle allegations that he proposed paying a government witness $500,000 _ $5,000 a month _ in exchange for her not giving damaging testimony. The witness tampering trial of the former owner and chief executive officer of National Century Financial Enterprises begins Monday, March 17, 2008, in federal court before U.S. District Judge Algenon Marbley. Once that trial ends, Poulsen faces an August trial on multiple counts of conspiracy, wire and securities fraud and money laundering.


link to previous articles...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3226076&mesg_id=3226186

My wife's at her desk there watching it drop like a rock. No one knows what is going to happen, says the mood is like a funeral. Goodbye retirement nestegg.

The dominoes tumble, then? :-(

http://finance.yahoo.com/tech-ticker/article/7143/Lehman-Too-Big-to-Fail%3F

Lehman Too Big to Fail?
Posted Mar 17, 2008 08:49am EDT by Henry Blodget in Investing,
From Silicon Alley Insider, March 17, 2008:
Bear Stearns (BSC) is gone, so the markets are wondering who's next. The leading contender? Lehman Brothers (LEH).
Lehman's stock dropped 15% on Friday, and it's down another 33% in pre-market trading. Some specific concerns:

--snip--

# Like Bear Stearns, at least one of Lehman's trading partners is cutting it off: The WSJ reports that Southeast Asia's biggest bank, DBS Holdings, has asked traders not to enter new transactions with Lehman Brothers. "DBS has sent an internal e-mail saying it would not deal with Lehman Brothers from now on."
# Like Bear Stearns, Lehman is levered about 30-to-1.

--snip--

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

Last trade 71.067 Change -0.609 (-0.85%)

A Run on the Dollar?

http://www.dailyfx.com/story/topheadline/A_Run_on_the_Dollar__1205727721652.html

It was another terrible week for dollar bulls culminating in an announcement on Friday that Bear Stearns, the fifth largest US securities firm was on the verge of running out of cash and in need of a bailout by the Fed. The shock of the news sent the dollar below 100 to the yen and the Swissie and further record lows against the euro.

The US economy continues to play out a nightmarish scenario of financial collapse and the dollar is now in danger of tipping into an all out panic liquidation with economic news mattering less and less as sentiment drives volatility through the roof. Perhaps, if the Bear can survive the week finding a white knight to rescue it, US capital markets will calm down. However, if the firm implodes the shock to the US financial system is likely to be so severe that a full run on the dollar may ensue

Next week the market will follow the Bear story and will then quickly turn its focus to the FOMC rate decision on Tuesday. Most analysis were looking for a 50bp cut, but with Friday’s news now affecting trade, expectations have ratcheted to 75bp or even an unprecedented 100bp cut. In short, US rates continue to decline and both fundamentals and sentiment show no mercy to dollar longs.



...more...

A 75bp Fed Cut Seems Guaranteed, But What About The Dollar?

http://www.dailyfx.com/story/bio1/A_75bp_Fed_Cut_Seems_1205530364196.html

The double dip has come and gone. The dollar has plunged to new lows against many of its major counterparts. However, wading into the action, the most significant moves came on the part of the risk-related, carry pairs: USDJPY and USDCHF. Marking another remarkable milestone for the currency market, USDCHF dropped below parity for the first time in history. For the yen pair, 100 seemed a strong floor that would require a higher power (like BoJ intervention) to produce a significant break or rebound before next week’s Fed rate decision. In the end, all that was needed was the same driver that ushered the pair to its 12-year low over the past two weeks – risk sentiment. US policy makers made yet another concerted effort Friday to right the roiled credit markets. Just three days after announcing the new TSLF program, the Fed was prompted into action once again by the imminent collapse of one of world’s largest investment banks. Bear Stearns CEO Alan Schwartz said in a statement this morning that his firm’s liquidity position had “significantly deteriorated” from Thursday as investors made significant withdrawals on rumors the firm was facing a cash crisis. Playing out much like the Fed’s bailout of Long Term Capital Management back in 1998, Bear Stearns tapped the Federal Reserve of New York for temporary funding. And, since the broker does not have access to the discount window, the loan was actually made through JP Morgan on Bear Stearns behalf. This was certainly a necessary move as the collapse of a major investment firm like Bear Stearns in these fragile markets could trigger a global market crash. To further bolster confidence in the US markets, the Fed released a two sentence statement stating the bank stood ready “to provide liquidity as necessary to promote the orderly functioning of the financial system;” and President Bush reiterated his confidence in the US economy in a speech in New York. And, while the liquidity injection and assuring words may calm credit market fears, they also practically guarantee a 75 basis point rate cut (or greater) when the FOMC announces its policy decision on Tuesday. Fed funds futures have fully priced in 75bp of easing and set a 60 percent probability of a 100bp cut. If the Fed does lower rates to 2.00 percent, it will only be a mater of time before the market begins to realize the policy group is running out of options to salvage the economy and markets. What’s more, this attempt at securing the stability of financial stability has left the dollar out to dry. This has been the basis behind speculation that global central banks will collaborate for the first time in 13 years to rescue the dollar. The timing of such an effort will be critical.

...more...

Bear Essentially Bankrupt, Panic Grips FX, Dollar Dumped Mercilessly - Will Central Banks Intervene?

http://www.dailyfx.com/story/bio2/Bear_Essentially_Bankrupt__Panic_Grips_1205747991552.html

Panic liquidation consumed currency trading at the start of the week as the news that Bear Stearns was being sold to JP Morgan Chase for a mere $2/share sent shivers through global capital markets with investors fearing that other major US financial institutions may be facing the prospect of bankruptcy.

The acquisition of Bear by JPMC, which was initially received positively by the FX traders, precipitated massive selloffs in USDJPY when investors found out that the deal valued Bear Stearns at a miniscule $236 million against its Friday closing price of $3.5 billion. Furthermore, the deal included a provision in which the Fed guaranteed $30 billion in financing to JPMC to complete the transaction. In short the Bear Stearns acquisition was a bailout in disguise resulting in an absolutely stunning turn of fortune for the 5th largest US securities firm that only six months ago was valued at more than $10 billion.

The concern amongst currency traders is that Bear will not be the sole victim on Wall Street of the disastrous blow up in the asset backed fixed income market, with many viewing Lehman and Citibank as possible candidates to disclose further balance sheet problems on their books. In short risk aversion reigned supreme as capital markets opened up for trade this week with USDJPY dropping all the way to 95.70 in early Asia session in incredibly volatile trade that continues to see seesaw moves of 50 to 100 points every 15 minutes.

The violence of today’s price action has been so severe that some dealers fear a coordinated intervention by G-3 central banks the purpose of which may not be necessarily to prop up the dollar but simply to slow down its descent. While ECB officials have been characteristically tight lipped Japanese Finance Minister Nukaga and Vice Fin Min Shinohara both noted that the FX moves have been excessive, perhaps trying to signal to the markets the official concern over the one way moves.

...more...

http://www.informationclearinghouse.info/article19542.htm

The politically-connected Carlyle Capital hedge fund was wheeled into ICU on Thursday unable to make a measly $400 million margin call. Carlyle boasted a $21.7 billion portfolio of AAA-rated residential mortgage-backed securities issued by Freddie Mac and Fannie Mae. So where's the money?

The fund had leveraged its $670 million in equity to 32 times its value. Now the stock has lost over 90 per cent of its value and has defaulted on $16.6 billion of its debt. About $5.7 billion of the defaulted debt has been sold, the Carlyle Group said Thursday.

What is interesting here is the fact that “$5.7 billion of the defaulted debt has been sold” but Carlyle still couldn't pay its paltry $400 million margin call? Why?

Is the $5.7 billion the estimated face-value of the Freddie Mac bonds? If that is the case---and I suspect it is---then we have discovered something very important, that even triple A rated mortgage-backed bonds are worthless. That's a very scary prospect for the many banks, hedge funds, insurance companies, and retirement funds that are currently holding trillions of dollars of these toxic MBS. They could be worth zero, which means we could see a rash of defaults and bankruptcies unlike anything in history.

According to Reuters: “Carlyle Capital shook financial markets last week after it was unable to offer more collateral to protect its $21.7 billion portfolio of residential-mortgage-backed bonds. The banks that had loaned money demanded more collateral, known as a margin call, to cover the gap between the previous value of the securities and their current, lower level.”

Again, this is a very small margin call for a fund of this size that's loaded with Triple A-rated securities. All we want to know is, what they got paid for their Fannie Mae bonds? How much? But the media is not reporting that critical bit of news.

Reuters offers this one revealing clue in a statement issued by Carlyle:

"Overall, it has become apparent to the company that the basis on which lenders are willing to provide financing against the company's collateral has changed so substantially that a successful refinancing is not possible.”

Ah-ha! “Refinancing is not possible”. Not possible at any price regardless of the quality or the rating. That is exactly what we wanted to hear.

Guess what; the subprime meltdown just got a whole lot bigger. As the massive cycle of deleveraging continues for the over-extended hedge funds; Triple A assets will be sold for merely pennies on the dollar sending the faltering banking system into a last, lethal swan dive. Good riddance.

:hide:
We've seen disaster on the horizon for so long and it just might have arrived.

Thank God.

When someone makes an idiotic blanket statement like that--you KNOW it's a lie and can act accordingly.

Especially after surviving the Savings and Loan meltdown....

This country was hijacked...the bandits love of money became more
important than anything else.

Scary day today...take care of yourselves...
:hide:

Tinfoil? Check.

Did I forget anything?

:evilgrin:

I can make brownies though.

how long are they going to work at generating power if everything comes apart?

It was below freezing again, and the forecast is ice and snow storms. Enough already!

Morning, Buttercup!


What ticks me off, is that the big guys get out their money, and the rest of us are left holding the empty bag.

:(

Are the institutional investors getting out before the stock market collapses ?

Let's hope for the best and expect the worse this week.

Bush doesn't have a clue on what needs to be done.

01. Bush says he supports Fed action
9:52 AM ET, Mar 17, 2008 - 6 minutes ago

02. Bush says U.S. in 'challenging times'
9:51 AM ET, Mar 17, 2008 - 7 minutes ago

Dow 11,771.41 179.68 (1.50%)
Nasdaq 2,167.52 44.97 (2.03%)
S&P 500 1,264.66 23.48 (1.82%)
10-Yr Bond 3.362% 0.059

NYSE Volume 186,360,937.5
Nasdaq Volume 74,768,015.625

09:17 am : S&P futures vs fair value: -28.4. Nasdaq futures vs fair value: -46.2. A weak opening is is expected, and this session's economic data are not helping matters. February Industrial Production declined by 0.5%, which was a a larger slide than the expected decline of 0.1%. The previous reading showed growth of 0.1%.

09:04 am : S&P futures vs fair value: -30.7. Nasdaq futures vs fair value: -46.2. News of the Bear Stearns buyout at only $2 per share continues to fuel selling pressure. In other news, CME Group (CME) is going to acquire Nymex Holdings (NMX) for $36 per share in cash and 0.1323 shares of CME. Crude oil has retreated along with equities. Crude is down 2.4% to $107.55 per barrel. Meanwhile, gold has climbed to record highs. Gold is up 1.6% to $1014.70 per ounce.

08:32 am : S&P futures vs fair value: -29.1. Nasdaq futures vs fair value: -39.5. A sharply lower start is expected. News of the Bear Stearns bailout continues to dominate headlines. Just reported, the March NY Empire State Index came in at -22.0, economists expected a reading of -7.4.

http://www.marketwatch.com/news/story/moodys-cautions-outlook-lehman-shares/story.aspx?guid=%7BA43FD63B%2D1711%2D42A3%2DAB27%2D6C20A416638F%7D

NEW YORK (MarketWatch) -- Lehman Brothers Holdings Inc. dropped more than 30% ahead of the open Monday as Moody's Investors Service trimmed its outlook on the investment bank's debt rating, heightening concerns about liquidity.

Lehman's shares, which fell sharply Friday...

We'll see. Nothing really surprises me anymore. Bear Stearns was once deemed "too big to fail".

Stocks Fall Sharply As Markets Are Left Reeling by Bear Stearns Buyout

NEW YORK (AP) -- Wall Street tumbled in early trading Monday as Wall Street and other global markets reeled from JPMorgan Chase & Co.'s government-backed buyout of the invalid investment bank Bear Stearns Cos. The Dow Jones industrials fell about 150 points in the first few minutes of trading.

On top of supporting the buyout, the Federal Reserve took the extraordinary step of lowering the rate it charges to loan directly to banks on Sunday night -- two days before its scheduled meeting Tuesday. The central bank lowered the discount rate by a quarter point to 3.25 percent.

A buyout of Bear Stearns was certainly more appealing than the alternative: letting the investment bank collapse and causing huge losses for anyone linked to it. But Bear Stearns' implosion -- and the fact that JPMorgan valued the fifth-largest Wall Street investment bank at a paltry $2 a share, or $236.2 million -- stirred fear among investors worldwide that other banks had sizable exposure to troubled credit markets.

"That is just unbelievable," said investing consultant Scott Fullman. Bear Stearns stock closed at $30 a share on Friday. "It implies there is more risk in here than has been apparent."

http://biz.yahoo.com/ap/080317/wall_street.html

9:53
Dow 11,849.81 Down 101.28 (0.85%)
Nasdaq 2,185.25 Down 27.24 (1.23%)
S&P 500 1,271.34 Down 16.80 (1.30%)
10-Yr Bond 3.358% Down 0.063
NYSE Volume 567,829,375
Nasdaq Volume 217,491,906.25

09:45 am : Stocks open sharply lower, although declines are not as bad as feared. All ten sectors are lower with notable weakness in financials (-3.8%).

The selling interest is being fueled by news that JPMorgan Chase (JPM 37.71, +1.17) is buying Bear Stearns (BSC 3.67, -26.33) for only $2 per share. Bear closed last Friday at $30.00 per share, and traded as high as $159.36 in April of 2007. The Fed is providing funding of up to $30 billion for the deal.

Meanwhile, in a move to improve liquidity, the Fed cut the discount rate by 25 basis points in an emergency meeting over the weekend. The Fed also authorized a new lending facility that can be utilized by participants in the securitization markets, including investment banks.DJ30 -15.12 NASDAQ -38.68 SP500 -22.32

pumping the market like mad. Already up 100 from the opening lows. My guess is Bush is telling them he doesn't care what it takes to keep the market afloat, just do it.

Next thing you know, they'll be demanding immunity....

The Working Group must have a large offshore sweatshop filled with the little buggers cranking it out.

The Fed is handing them out like candy for any economic sin.

Wheee! We're all going to money heaven!! Well, not us...just our betters on Wall Street.

"Go, and sin no more." *wink* *wink* *smirk* *smirk*

Around 10:30 had Dow even and S&P down 0.71%

Now D -.43% but S&P -1.09%

?????
http://finance.yahoo.com/

Note: The term American People doesn't include anyone in the top 5% economic ranking, since they pay for nothing.

Shades of Les Miserables.

CHICAGO (AP) -- The parent company of the Chicago Mercantile Exchange and the Chicago Board of Trade said Monday that it would buy the owner of the New York Mercantile Exchange in a cash-and-stock deal valued at almost $9.5 billion.

CME Group Inc., the world's largest financial exchange company, hosts trading of contracts that derive their value from an underlying commodity or event for things such as gold, oil and wheat. Investors use these contracts to shelter their investment portfolios from swings in interest rates or fluctuations in the stock market.

The New York Mercantile Exchange specializes in trading of energy and metals contracts, and has already partnered with CME to list some contracts on CME's electronic exchange.

Under the deal, shareholders of Nymex Holdings Inc. would get $3.4 billion in cash and $6.08 billion in stock. The proposed combination was first announced earlier this year.

more...
http://biz.yahoo.com/ap/080317/cme_nymex.html

Index Last Change % change
• DJIA 11884.00 -67.09 -0.56%
• NASDAQ 2179.07 -33.42 -1.51%
• S&P 500 1271.78 -16.36 -1.27%

I find my head in a swirl... First the mythological 'Zero CPI' reports, then they 'do Spitzer', then A bank buys
the 5th largest 'investment' bank for pennies on the dollar, then the Fed says, "We gotcher back." to the banks (I *still* say this amounts to the Fed handing the National Charge Card to the banks... If only *I* were so lucky.) :silly:


So in light of all of these 'coincidences' today's Market Melody is "The Entertainer" by just about everyone
who's ever played the piano. (Ref: Chet Atkins)

Edit: I apologize for the obvious misspellings in the 'Special Edition: SMW', but, bandwidth and time were low and
I couldn't get the darned Spellcheck-o-matic to work. Special Edition thanks to the Mods and everyone else who contributed.

NEW YORK (AP) -- Shares of gold producers defied Monday's global stocks downdraft as investors fled to the security of the precious metal.

Stocks worldwide were plummeting on the virtual collapse of a major U.S. investment house and a rare Federal Reserve intervention. The central bank on Sunday approved an emergency cut in its overnight lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately.

The Fed acted just after JPMorgan Chase & Co. agreed to buy rival Bear Stearns Cos. for $236.2 million. Just on Friday the Fed had raced to provide emergency financing to cash-strapped Bear Stearns through JPMorgan.

The Fed's actions come as fears have spread that other financial houses could also be on shaky ground.

more...
http://biz.yahoo.com/ap/080317/sector_snap_gold_producers.html

NEW YORK (AP) -- Treasury prices rallied Monday on concerns that the sale of Bear Stearns Cos. to JPMorgan Chase & Co. may be followed by further unraveling in the financial system.

JPMorgan bought Bear Stearns for just $2 a share. A run on Bear Stearns late last week by panicky investors dealt a fatal blow to the brokerage's liquidity and forced the transaction.

The bond market overall was relieved by the emergency sale, which was supported by the Federal Reserve. Among other benefits, it will allow the Fed to control Bear Stearns' extensive bad mortgage debt and should put an end to Bear Stearns' penchant for creating high-risk debt instruments.

At the same time, investors are not convinced that the worst is over for bad mortgage debt or the financial markets. There are worries about the possibility of similar meltdowns at Lehman Brothers Holdings Inc. and other institutions with heavy exposure to subprime debt.

more...
http://biz.yahoo.com/ap/080317/bonds.html?.v=2

NEW YORK (AP) -- Shares of GameStop Corp. are falling along with the rest of Wall Street, even though analysts expect solid fourth-quarter results from the world's largest video game retailer Tuesday.

GameStop, whose shares are down 23 percent since the start of the year, will likely provide fiscal 2008 guidance in line with or better than Wall Street's current expectations, Janco Partners analyst Mike Hickey wrote in a note to investors.

Holiday sales were strong for GameStop, and analysts say video games are more resilient to an economic downturn than many other retail sectors.

Shares of the Grapevine, Texas-based company fell $1.12, or 2.3 percent, to $47.92 in late morning trading.

http://biz.yahoo.com/ap/080317/gamestop_mover.html?.v=1

Sorry to shout, but: WHEN YOU HAVE TO WAIT FIVE YEARS FOR YOUR SHINY NEW TOY....

...you tend to buy it when it comes out- whenever that may be.

Anyone for a game of Duke Nukem Forever?

:rofl:

How about Spore? Oh, wait, that comes out 9/7, but it's been in development for years now... let's just hope the replay value of that puppy is sufficient to keep me from wanting to play a different game after about 40 hours or so of play.

Yeah, we're 'resilient'. When companies like EA delay, delay, delay, sometimes for years, and then release a substandard product (or Yet Another Worthless Sports Game), or when companies like 2K release a great game wrapped in a huge, steaming pile of utter bullshit (Bioshock, anyone?)... when companies like Crytek release a really, really great shooter game whose full graphics beauty can only be seen on a PC from five or six years in the future (Crysis; it's a very very beautiful game, graphically, but I understand they developed that one on quad core, QUAD SLI systems, which nobody but they themselves can afford)... you tend to get used to the abuse.

There are a couple of glitches but other than that nothing major. I thought Bioshock was okay, but The Darkness was complete bullshit. A word for the wise don't believe the hype surrounding 2K's games.

It's referred to as the '200 hour bug'. If you play the game with the same character for over 200 hours, the executable crashes completely and that character becomes unusable.

It's a gigantic bug.

Bioshock was a pretty good game, but it would have been much better had 2K not botched the launch. That whole limited-activation debacle still sticks in my craw.

Don't even ask me about Simcity Societies. :puke:

NEW YORK (AP) -- Shares of mortgage lenders and financiers declined on Monday as the broader market fell on concerns over JPMorgan Chase & Co.'s government-backed buyout of Bear Stearns Cos.

Fannie Mae shares tumbled $2.42, or 10.8 percent to $19.94. Shares hit a new year low of $18.25 earlier in the session.

Shares of Freddie Mac fell $2.38, or 11.2 percent, to $18.80.

Countrywide Financial Corp. shares stumbled 40 cents, or 8.9 percent to $4.10. Shares hit a new 52-week low of $3.95 earlier in the session.

Shares of IndyMac Bancorp Inc. fell 49 cents, or 9.3 percent, to $4.81.

http://biz.yahoo.com/ap/080317/mortgage_lenders_opening_glance.html?.v=1

NEW YORK (AP) -- Shares of national banks plunged Monday after Bear Stearns Cos. agreed to sell itself to JPMorgan Chase & Co. at discount of more than 90 percent to fend off liquidation.

Shares of Bank of America Corp. slipped 58 cents to $35.11.

Shares of Citigroup Inc. lost $1.45, or 7.3 percent, to $18.33.

Shares of Wachovia Corp. fell $1.75, or 6.6 percent, to $24.79.

One of the only gainers in the entire finance industry was JPMorgan, which is paying $2 per share for a company whose stock approached $160 less than a year ago. Shares of JPMorgan added $1.55, or 4.4 percent, to $38.09.

http://biz.yahoo.com/ap/080317/national_banks_opening_glance.html?.v=1

NEW YORK (AP) -- Oil prices fell sharply Monday, pulling back at least temporarily from record levels as investors feared that the financial crisis that forced the sale of Bear Stearns Cos. is a sign of deep economic troubles.

Crude's plunge came even as diesel prices rose to a new record above $4 a gallon, and gas prices remained high. Diesel, used to transport the vast majority of the nation's goods, rose 1.3 cents to a national average of $4.002 a gallon Monday, according to AAA and the Oil Price Information Service. The national average price of a gallon of gas, meanwhile, dipped slightly to $3.283 a gallon, but remains 73 cents higher than a year ago.

Oil's steep decline Monday came hours after futures rose to a new trading high near $112 a barrel on the Federal Reserve's surprise Sunday move to lower a key interest rate by a quarter point. In the past several months, Fed rate cuts have fueled rallies in oil prices.

Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is weak. Interest rate cuts, and even the prospect of future cuts, tend to weaken the dollar further.

more...
http://biz.yahoo.com/ap/080317/oil_prices.html?.v=12

NEW YORK (AP) -- Shares of health insurers fell Monday as the broader markets declined in the wake of JP Morgan Chase & Co.'s buyout of Bear Stearns Cos. and the Federal Reserve's move to lower the rate it charges to loan directly to banks.

The Dow Jones industrial average fell 86.62 points, or 0.7 percent, to 11,864.31 while the technology heavy Nasdaq fell 35.28 points to 2,177.34. The Standard & Poor's 500 index fell 19.45, or 1.04 percent, to 1,268.75.

Here's how several key health insurers performed Monday:

Minnetonka, Minn.-based UnitedHealth Group Inc., down $1.20, or 3.2 percent, to $36.

Indianapolis-based WellPoint Inc., down $1.14, or 2.4 percent, to $45.95.

more...
http://biz.yahoo.com/ap/080317/health_insurer_opening_glance.html?.v=1

NEW YORK (AP) -- Biotechnology companies fell Monday, with most of the stocks moving down in early trading.

Major indexes skidded after JPMorgan Chase & Co. agreed to buy investment bank Bear Stearns Cos. Investors sold stocks across a wide variety of sectors as they worried about more fallout from the credit market crisis.

The Amex biotech index, which tracks several key biotechnology stocks, fell 11.35 points to 676.59. The Nasdaq biotech index of small- and midcap stocks gave up 10.36 points to 729.49.

Shares of Amgen Inc. slipped 76 cents to $43.70.

more...
http://biz.yahoo.com/ap/080317/biotech_sector_glance.html?.v=1

NEW YORK (AP) -- Credit card processors and lenders dropped in morning trading Monday as investors reeled from the government-backed buyout of Bear Stearns Cos. by JPMorgan Chase & Co. for just $2 per share.

Here's how some credit card companies were performing:

American Express Co., down $1.31, or 3.2 percent, to $39.70.

Mastercard Inc., down $5.86, or 2.8 percent, to $202.79.

Capital One Financial Corp., down $2.50, or 5.2 percent, to $45.36.

more...
http://biz.yahoo.com/ap/080317/credit_cards_opening_glance.html?.v=1

Down 75.33% on THE DAY.

Class Action suit in the making, and this one is DONE.

it was breaking on CNBC. :o

as well as MF Global...

Dayum

Not much out there on the web on MF Global current activities. Today's action must be based on rumors.

MF Global is a broker of futures and options. On Feb 28, MF recorded a bad debt provision of $141 million in response to unauthorized personal trading activity by one of the company's representatives.

Are fresh disclosures afoot?

Brower Piven, A Professional Corporation announces that a class action lawsuit has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of the common stock of MF Global, Ltd. ("MF" or the "Company") (NYSE: MF) in its Initial Public Offering on July 19, 2007 or in the open market from July 19, 2007 through February 28, 2008, inclusive (the "Class Period").

The complaint alleges that during the Class Period the Company, and certain of its officers and/or directors, violated the Securities Act of 1933 by including, or allowing the inclusion of, materially false and misleading statements in the Registration Statement and Prospectus issued in connection with the IPO.

http://money.cnn.com/news/newsfeeds/articles/marketwire/0374745.htm

NEW YORK (AP) -- Shares of real estate investment trusts are mostly lower in midday trading Monday as the broader market continues to drop on JPMorgan Chase & Co.'s government-backed buyout of Bear Stearns & Co.

Here's how some real estate investment trusts performed:

Host Hotels & Resorts Inc. down 49 cents to $15.81.

Vornado Realty Trust off $1.30 to $79.18.

Boston Properties Inc. down $2.22 to $85.01.

Kimco Realty Corp. off 8 cents to $33.57.

http://biz.yahoo.com/ap/080317/reits_midday_glance.html?.v=1

BEIJING (AP) -- Truck drivers waited in line to buy rationed diesel in China's southeast Monday after shortages hit the fast-growing region for the second time in six months amid surging demand.

The shortages disrupted trucking in key export areas, but the impact on trade was unclear. Filling station employees said the two main state-owned oil companies have been delivering less fuel over the past week but have given no explanation.

"We have no gasoline, no diesel, nothing at all," said an employee of the Tangbei filling station in Guangzhou, China's southern business center, who would give only his surname, Zhou. "We have nothing to do but sit in the station."

Shortages and rationing also were reported in the busy port of Xiamen and Shenzhen, a major trading center that abuts Hong Kong.

Phone calls to the Guangdong branch of China's biggest government oil company, China National Petroleum Corp., were not answered. A man who answered the phone at the Guangdong branch of the No. 2 supplier, China Petroleum & Chemical Corp., also known as Sinopec, said no managers were available to answer questions.

more...
http://biz.yahoo.com/ap/080317/china_fuel_crunch.html?.v=1

Will JPMorgan Chase’s stunning $2 a share deal to buy Bear Stearns put a crimp in Visa’s plans to go public this week in what is expected to be the nation’s biggest initial public offering?

The answer is yes in the opinion of a financial blog, The Disciplined Investor, which says that “Visa will assuredly end up postponing their IPO.”

The blog notes that the $17 billion I.P.O. is planned for day after the Federal Reserve holds its policy meeting. A meeting, it says, that will be closely watched and may wreak more havoc on the markets and investors speculate about how much worse things can actually get.

Furthermore, it says, JPMorgan, which along with Goldman Sachs is leading the offering, may have its hands full swallowing its troubled rival.

“Unless the lead underwriters - JP Morgan and Goldman Sachs - are completely deranged and masochistic, Tuesday is not going to be the best day to attempt to bring history’s largest IPO to market,” says the blog.

“In addition, it is possible that JPM will have its hands full with a small integration matter”, the blog notes, tongue-in-cheek.

http://dealbook.blogs.nytimes.com/2008/03/17/will-jpmorgans-bear-deal-throw-a-wrench-into-visas-ipo/

Is there really is an upside to keeping the IPO sale as originally scheduled? Getting the best price possible in a fear filled market doesn't seem a bright move to me.

I guess.

Queue up... "Should I stay or should I go." by The Clash. ;)

I read somewhere that this IPO is meant to raise desperately needed cash for the current owners. They may need to go ahead at any price...

Peak (Oct 07) was 1,576.09, apparently. So 1,576.09 minus 20% gives 1,260.87. Currently at 1,263.98, but low today (12:30) was 1,259.27.

http://finance.yahoo.com/q/bc?s=%5EGSPC&t=1d

Hey, I'm learning this stuff as fast as I can... Maybe I'll understand what's going on! :silly:


http://www.pagat.com/boston/bridge.html

http://www.masterbridge.com/

Yep... I fear it will drop to the point where stoopid took over.

Oh and don't worry, it is the clenis...

We are seeing the end of empire... pure and simple

And yes the PPT will do all it can to avoid that... but I am willing to take bets given how little wiggle room they have left

The when is the harder part. Probably this year.

Look out after the election though. That's when things will really drop.

Seo sláinte an tséitéara, an ghadaí, an trodaí, agus an óltóra!
Má dhéanann tu séitéireacht, go ndéana tú séitéireacht ar an mbás,
Má ghoideann tú, go ngoide tú croí mná;
Má throideann tú, go dtroide tú i leith do bhráthar,
Agus má ólann tú, go n-óla tú liom féin.


If you cheat, may you cheat death.
If you steal, may you steal a woman's heart.
If you fight, may you fight for a brother.
And if you drink, may you drink with me.

:toast::beer:

but first a visit to:
http://jameshowardkunstler.typepad.com/clusterfuck_nation/

Things are getting very weird very fast -- and will probably get even weirder, faster, as the train wreck of bad debt meets the Saint Paddy's Day Parade of bacchanalian excess at the grade-crossing of destiny. The train is carrying America's financial system, but the engine driving it is peak oil, because declining energy resources necessarily means declining capital wealth -- and declining value of all the institutions, instruments, and markers that denote that wealth or hope to profit by trading in it. The fiasco leads straight to the necessary reinvention of American life on other terms and by other means.

THE DOORS lyrics - The End

This is the end
Beautiful friend
This is the end
My only friend, the end

Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
I'll never look into your eyes...again

Can you picture what will be
So limitless and free
Desperately in need...of some...stranger's hand
In a...desperate land

Lost in a Roman...wilderness of pain
And all the children are insane
All the children are insane
Waiting for the summer rain, yeah

There's danger on the edge of town
Ride the King's highway, baby
Weird scenes inside the gold mine
Ride the highway west, baby

Ride the snake, ride the snake
To the lake, the ancient lake, baby
The snake is long, seven miles
Ride the snake...he's old, and his skin is cold

The west is the best
The west is the best
Get here, and we'll do the rest

The blue bus is callin' us
The blue bus is callin' us
Driver, where you taken' us

The killer awoke before dawn, he put his boots on
He took a face from the ancient gallery
And he walked on down the hall
He went into the room where his sister lived, and...then he
Paid a visit to his brother, and then he
He walked on down the hall, and
And he came to a door...and he looked inside
Father, yes son, I want to kill you
Mother...I want to...fuck you

C'mon baby, take a chance with us
C'mon baby, take a chance with us
C'mon baby, take a chance with us
And meet me at the back of the blue bus
Doin' a blue rock
On a blue bus
Doin' a blue rock
C'mon, yeah

Kill, kill, kill, kill, kill, kill

This is the end
Beautiful friend
This is the end
My only friend, the end

It hurts to set you free
But you'll never follow me
The end of laughter and soft lies
The end of nights we tried to die

This is the end

THIS GUY on the other hand, just lost 90% of his net worth last night.
He's a managing director at Bear-Stearns

So says the man who lost 1 billion since yesterday.

Fraud, corruption, bankruptcies, foreclosures, systematic meltdown, bail-outs, propaganda, conspiracies, loss of credibility, 3rd world economy, cronyism, elitism, insider trading, price-gouging, price-fixing, profiteering, retaliation, gag orders, market manipulation and no accountability.

:applaud:

Just because Asia was Down 4+%, and Europe was Down 4+%, doesn't mean a thing.

WE'RE AMERICA GOD DAMNIT!!

AND OUR MARKET IS UP 50 POINTS!!

I don't see why all the pages and pages of posts predicting the worst. Everything is just fine.

The market is the thing, and since it is Up 50 Points, all is well in Amerika.

:sarcasm: Off

Why worry when Chocolate Rations are at an all time high.*










* Corrected for Energy, Food, Shelter, Price of Tea in China, Pocket Lint, Trickle Down... etc.

. ^---- :sarcasm:

Seems like we are getting closer by the week now. Guess the date the DJIA rolls back to the level it was when the chimp took office-10,578.24. You can revise your dates up until Labour Day (the working man's holiday)or the DJIA hits 11000 (got to have a cut off). Anyone can join, just give a date and your reasoning for that date.

the other one.....1/30
DemReadingDU.....2/29
Ther-s a.....3/15
Demeter.....3/24
Talking Dog.....3/28 at 2 pmish
Warpy...3/20
Dr. Phool.....4/1
FinnFan.....4/10
Karenina.....4/15
ProgressiveRealist.....4/17\
dweller.....4/8
Mattsh.....4/22
GhostDog.....4/28
Maeve.....5/1
MilesColtrain.....5/2
Happyslug.....5/9
AzDemDist6.....5/15
InkAddict.....7/3
UIA.....7/15
Roland99.....7/28
Abelenkpe.....8/2
Kineneb.....8/8
Prag.....9/5
MoJo Rabbit.....9/5
MuleBoy(aka hiz honna da mayor).....9/11
Nickster.....9/12
Birthmark....10/10
AnneD....10/24
Neshanic.....10/24
MsLeopard.....10/31
Wordpix.....11/3
Ship wrack.....11/5


Remember-you can change the dates as we learn more. The winner get the praise and admiration of those on the Stockwatch Thread. There is still time to place your bets.....No animals were hurt in the construction of this pool (except for pushing Sampson of the computer keys). And please-no Reggie bars in the pool please:rofl:

the day he took office-it has to be at the close.

Thanks Anne! :hi:

That's funny! I'll take a guess and say 6/15 around 10 am.

My vote is for 05/13. I don't have a reason, just think that we will see a steady drop over the next month and a half, with a few minor rallies in-between. So it should happen by the middle of May.

http://finance.yahoo.com/tech-ticker/article/7305/Buffett-Was-Right%3A-Derivatives-Are-Destructive

Buffett Was Right: Derivatives Are Destructive
Posted Mar 17, 2008 02:59pm EDT by Aaron Task in Investing, Recession, Banking
Related: BSC, JPM, BRK.A, LEH, GS, MER, C

Having already claimed the careers of high-profile executives like Stan O'Neal, Chuck Prince and Warren Spector, the credit crunch has now taken its largest victim (to date): Bear Stearns.
--snip--

Harrison, formerly a derivatives trader at Morgan Stanley and director of derivatives at The Galleon Group, discusses how what Warren Buffett called "financial weapons of mass destruction," contributed to Bears' demise.

Harrison also believes this is just the beginning of a "multi-year debt unwind" that in some ways will mirror the Great Depression. That's a chilling thought on a tough day but with over $500 trillion of derivatives outstanding, it's hard to argue there isn't more pain coming for financial markets.


That's...$ 500,000,000,000,000.00

Derivative = Contract

That implies trust. The financial system is built upon it. It is also the language of legal tender. Not enough money in the world should a fraction of these deals go sour.

Dow 11,972.25 Up 21.16 (0.18%)
Nasdaq 2,177.01 Down 35.48 (1.60%)
S&P 500 1,276.60 Down 11.54 (0.90%)
10-Yr Bond 3.3140% Down 0.1070
NYSE Volume 5,816,550,000
Nasdaq Volume 2,393,629,750

4:25 pm : It was a remarkable day on Wall Street Monday and not because it was St. Patrick's Day. Rather, it was a day that began with much nervousness, yet ended in much better fashion than most people expected.

News that the Fed cut its discount rate over the weekend to help stem a liquidity crisis that ultimately led to a fire sale of investment bank Bear Stearns (BSC 4.81, -25.19) to JPMorgan Chase (JPM 40.31, +3.77) for the jaw-dropping price of $2.00 per share fueled an early wave of broad-based selling interest that was concentrated on the financial sector.

The price at which Bear Stearns agreed to a sale raised valuation questions for a host of other financial companies and underscored the dire situation at Bear Stearns. These issues weighed heavily on the broader market which was feeling the brunt of a de-leveraging trade that encompassed most asset classes with the exception of gold and U.S. Treasuries.

At their lows of the session, the Dow, Nasdaq and S&P 500 were down 193, 57, and 31 points, respectively.

The market, however, showed some surprising resilience and bounced back in a striking manner in the afternoon trade. The Dow Jones Industrial Average logged a gain of as much as 125 points before a closing wave of selling cut into its gains. Still, a positive finish for the Dow was more than anyone had a right to expect given the early tone.

JPMorgan Chase was the big winner in the Dow as investors recognized the bargain it scored in being able to acquire Bear Stearns at such a discounted price. To this point, Bear Stearns's book value was reported to be $84 per share at the end of the fourth quarter.

The financial sector in general, though, played a role in the afternoon recovery. It had been down as much as 4.9% at its worst level of the day, but ended the session with a decline of 1.5%.

As it so happens, the energy sector, which dropped 2.5%, was the worst-performing sector in Monday's trade as it sold off in conjunction with crude prices, which fell 3.9% to $105.93 per barrel. Commodities overall were quite weak as evidenced by the 4.6% decline in the CRB Index.

The hit commodities took was a function of investors locking in profits in a nervous market as the dollar's continued weakness failed to stand out as a buying catalyst.

The dollar index closed well off its low, but still shed 0.3% ahead of Tuesday's FOMC meeting where the Fed is expected to cut the fed funds rate by at least 75 basis points to 2.25%.

Weakness in the dollar contributed to buying interest among multinational companies, which helped lead the afternoon rally effort. That effort, however, still wasn't enough to get the S&P 500 back to positive territory.

In contrast to the stock market, the Treasury market stayed in rally-mode for most of Monday's session as it benefited yet again from a risk aversion trade. The benchmark 10-year note jumped 40 ticks and saw its yield drop to 3.31%.DJ30 +21.16 NASDAQ -35.48 NQ100 -1.6% R2K -1.9% SP400 -2.1% SP500 -11.54 NASDAQ Dec/Adv/Vol 2221/728/2.37 bln NYSE Dec/Adv/Vol 2632/555/1.96 bln

Nice Catch?.........................



........................................Or What?.............

they needed news headlines, 'DOW UP FOR THE DAY!! Amazing what a 250 billion Fed bailout can do for one day of headlines. Money well spent </sarcasm>.

But look a little closer. S&P bombed, Nasdaq bombed, commodities bombed, global markets bombed. But half of the Dow components go up, and that's all the headlines show.

Watch this video: Someone is not swallowing this BS:

http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vpsp3dpnTUuA.asf

http://online.wsj.com/article/SB120554473788438679.html?mod=hpp_us_whats_news

snip>

Global investors are pulling money from the U.S., steepening the decline of the U.S. dollar and sending it below 100 yen for the first time in a dozen years. Against a trade-weighted basket of major currencies, the dollar has fallen 14.3% over the past year, according to the Federal Reserve. Yesterday it hit another record low against the euro, falling 2.1% this week to close at 1.567 dollars per euro.

Lenders and investors are pushing up the interest rates they demand from financial institutions seen as solid just a few months ago, or demanding that they sell assets and come up with cash. Banks and Wall Street firms are so wary about each other that they're pulling back. Financial markets, anticipating that the Fed will cut rates sharply on Tuesday to try to limit the depth of a possible recession, are questioning the central bank's commitment or ability to keep inflation from accelerating.

There are other symptoms of declining confidence. Gold, the ultimate inflation hedge, is flirting with $1,000 an ounce. Standard & Poor's Ratings Services, a unit of McGraw-Hill Cos., predicted Thursday that large financial institutions still need to write down $135 billion in subprime-related securities, on top of $150 billion in previous write-downs. Ordinary Americans are worried: Only 20% think the country is generally headed in the right direction, nearly as low as at any time in the Bush presidency, according to the latest Wall Street Journal/NBC News poll.

"Clearly, the whole world is focused on the financial crisis and the U.S. is really the epicenter of the tension," says Carlos Asilis, chief investment officer at Glovista Investments, an advisory firm based in New Jersey. "As a result, we're seeing capital flow out of the U.S."

That is a troubling prospect for a savings-short, debt-heavy economy that relies on $2 billion a day from abroad to finance investment. It is raising the specter of the long-feared crash in the dollar that could further rattle financial markets and boost U.S. interest rates.

snip>

Bob Eisenbeis, a former executive vice president of the Federal Reserve Bank of Atlanta, says the problem is more than an inability to find ready buyers for assets. "It is time to step back and recognize that the current situation isn't a liquidity issue and hasn't been for some time now," said Mr. Eisenbeis, the chief monetary economist for Cumberland Advisers. "Rather, there is uncertainty about the underlying quality of assets -- which is a solvency issue, driven by a breakdown in highly leveraged positions."

more...

Boy the PPT pulled this one out by the skin of their teeth.

Julie