STOCK MARKET WATCH, Wednesday April 23

Source: du

STOCK MARKET WATCH, Wednesday April 23, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 273
DAYS SINCE DEMOCRACY DIED (12/12/00) 2649 DAYS
WHERE'S OSAMA BIN-LADEN? 2374 DAYS
DAYS SINCE ENRON COLLAPSE = 2665
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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

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

AT THE CLOSING BELL ON April 22, 2008

Dow... 12,720.23 -104.79 (-0.82%)
Nasdaq... 2,376.94 -31.10 (-1.29%)
S&P 500... 1,375.94 -12.23 (-0.88%)
Gold future... 925.20 +7.60 (+0.82%)
30-Year Bond 4.48% -0.00 (-0.02%)
10-Yr Bond... 3.72% +0.01 (+0.22%)






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

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Read more: du

BY FRANK BARBERA, CMT

In today’s WrapUp, we take a moment to update the stock market outlook from a purely technical perspective. As a result, today’s report is a bit chart intensive but seeks to characterize the current market from a technical point of view, using Breadth, Momentum Volume and Sentiment, the big four of TA and of course, the biggest of them all, price. When we look at the S&P 500, it is abundantly clear that last years August and November lows represent very strong price resistance for the S&P at the 1400 level. Closer in, this year’s February and April highs have also seen four peaks including the one over the last few hours, in the 1380 area. Thus, this 1380 to 1400 range becomes a very important zone. If the stock market as measured by the S&P 500 can press above this resistance in the weeks ahead, there is a good chance that prices will continue to extend the bear market rally over the next few weeks into the summer months. Under this outcome, prices could be moving up toward the 1440 level, which represent a .618 Fibonacci retracement of the prior decline. In the near term, the 1325 to 1330 zone looks like strong support for the S&P and unfortunately, it would probably take a break below that support in order to provide real clarification that a continue upward move was aborting.

.....

The Bear Case:

Alternatively, if prices fail in this zone, and begin to slump back to levels much lower then 1330, then the odds will be high that over the next few weeks we will see the S&P move down and retest the lows in the 1270 to 1290 range. Under this second outcome, the odds would then be very high that all of the price action seen since the late January low was developing as part of a five wave triangle labeled (a,b,c,d,e). Very often, bear markets unfold into three distinct legs, labeled A, B & C. In the case of the current bear market, the entire decline from last September’s high to the January low can be labeled as Wave A of the Bear Market. That would then leave open the possibility that from the January low, Wave B is forming a five-wave triangle between 1390 and 1270 in which case, Wave D to the downside should be getting underway right now.

-see chart-

So where are we right now? With a close of 1.065 last night, the Medium Term ARMS is just slightly above neutral having come down off the deeply oversold values seen a number of weeks back. Of note, we have NOT seen a .80 value, a true overbought value on this gauge since last June, and that is becoming somewhat overdue. Even accounting for the fact that Bear Market rallies might not peak as low as bull market values, what I call a bearish upward “scale shift”, one would normally expect at least a reading below .90 BEFORE an intermediate term B-Wave had run its course. So far, that type of low value has not been seen, and thus, in our view, the important ARMS Index is suggesting that the stock market may try to move still higher. While attempting to identify short term swings is always an interesting exercise, in our view, the real message is simply to recognize when this indicator eventually drops down to a value below .90, and possibly close to .80 and understand that where ever the market averages are at that time, that will probably mark a very important stock market peak. When that happens, we will be paying very close attention and moving to a very defensive posture.

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

Stick around til early Summer, then run like Hell....

And this will be about the 5th source I've accessed that says Fall (September, October) is going to be really nasty. I become less convinced every time I hear it. Mostly because talking-head consensus hasn't been very accurate so far.

But to be fair, one of the sources in a 95 year old economist who has taught at Oxford, is a self-made millionaire and a friend of mine......

My only means of predicting the future tend to come from my gut and from dreamtime. Temporal exactitude is not an overwhelming quality of either of those sources. That said, I did wake up from a dream with a portion of a stock chart burned into my brain on Sunday. A peak that was about a third of the size of the parabola next to it. The parabola had very small to no steps in the pattern. Just as I woke, the parabola had just tipped to the downside.

Now, when I have meaningful dreams, the correlations can be as short as minutes to hours to months but only one has been more than 6 months out. And that was in 1997 when I dreamed I heard on the radio that somebody bombed the towers in NY. As it turned out, I heard somebody bombed the towers in NY on the telephone just as I was calling the Spousal Unit for comfort because I'd just woken from a nightmare where I was standing at the foot of two skyscrapers, looking up, watching people fall.....

As I'm not invested in physical stocks or in the meaning of the electrical impulses that congregate in my brain, I'll just put it out there and you can take it for what it's worth.

:donut: and lurkers. Talking Dog, for what it's worth, I've felt this fall would be a critical juncture and posted it in the SWT pool. My reasoning is part history, part experience, part fact.

My history/experience/fact...in Houston, when the S&L scandal first hit, we had high oil prices due to the Arab embargo residual (local Houston based oil companies had surplus funds)so at first the Real Estate market held up. But as things slowed down (the 87 Crash), oil dropped and folks were laid off en mass. These lay offs combined with those adjusting ARM loans (they were called Balloon Mortgages then) started coming due-causing more S&L's to go belly up (they actually were fairly sound-no shady deals-just victims of others mis dealings). The time span from S&L scandal to RE bust was almost 1+ years, after which the hole just got deeper. In our current market, most folks look back now and say the switched in August last year. If August was the earthquake, these interest rate drop, layoffs, and foreclosure are ripples that are swelling into a Tsunami. I expect the full force will start hitting fall and winter.

I'm not an eCONomist, but I see something similar in the graphs and anecdotal evidence of the Great Depression. You had a bad day and the market went down but 'rallied' around 1931, but eventual finished even lower than the initial crash after 1931. I think we are following that graph closer than most financial folks care to admit. Hey, I could be eating ground glass here and I will admit my mistakes but the world situation has changed and I don't think we will get out of this crash as easily as our politicians think.

And speaking of politicians....I will be in Washington DC this evening and staying until Saturday evening. I will be completing my National CPR, AED, and First Aid Instructor certification. I am just thrilled to go there again. I have my camera at the ready and have a list of new things I want to see.

So for a theme song today I would like to suggest a little Beatles.....

I'm looking through you, where did you go
I thought I knew you, what did I know
You don't look different, but you have changed
I'm looking through you, you're not the same

Your lips are moving, I cannot hear
Your voice is soothing, but the words aren't clear
You don't sound different, I've learned the game.
I'm looking through you, you're not the same

Why, tell me why, did you not treat me right?
Love has a nasty habit of disappearing overnight

You're thinking of me, the same old way
You were above me, but not today
The only difference is you're down there
I'm looking through you, and you're nowhere

<snip>

I'm looking through you, where did you go
I thought I knew you, what did I know
You don't look different, but you have changed
I'm looking through you, you're not the same

<snip>


Happy hunting and watch out for the bears.

10:30 Crude Inventories 04/19
Briefing.com NA
Consensus NA
Prior -2356K

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

114. U.S. gasoline inventories down 3.2 mln barrels last week
10:31 AM ET, Apr 23, 2008

115. U.S. distillate stocks down 1.4 mln barrels in latest week
10:31 AM ET, Apr 23, 2008

116. U.S. crude inventories up 2.4 mln barrels in latest week
10:30 AM ET, Apr 23, 2008

99. Crude ends up 23 cents at $118.30 a barrel
2:44 PM ET, Apr 23, 2008

Oil prices were slightly lower Wednesday after climbing in the previous session to a record near $120 a barrel on the weakening U.S. dollar and concerns about unstable supply amid firm global demand.

Light, sweet crude for June delivery fell 36 cents to $117.71 in electronic trading on the New York Mercantile Exchange by midday in Europe.

The May contract, which expired Tuesday, rose as high as $119.90 in its last trading session and closed at $119.37. The more active June contract, now the front-month, settled at $118.07 a barrel, up $1.44.

Oil is now nearly double its closing price a year ago, and up 24 percent in 2008.

.....

Many analysts expect the Federal Reserve to cut interest rates further this year to try to shore up the ailing U.S. economy, a move that would likely further weaken the dollar.

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

NEW YORK, April 21 -- Rising gasoline prices tightened the squeeze on drivers Monday, jumping to a record average of $3.50 a gallon at filling stations across the country.

Crude oil also set a record, spiking after an attack on a Japanese oil tanker in the Middle East to settle above $117 a barrel for the first time.

.....

Nationally, the average retail gas price jumped more than a nickel over the weekend and is up 23 percent from a year earlier. Drivers are paying the lowest prices in New Jersey and the highest in California, where a gallon of regular averages $3.86.

For drivers, the worst may be ahead, during the summer driving season when demand is highest. The Energy Department has predicted that the monthly average gasoline price will peak at more than $3.60 a gallon in June and could reach $4.

http://www.washingtonpost.com/wp-dyn/content/article/2008/04/21/AR2008042102728.html

Very clearly, the financial and mass media finds it is not ‘politically correct’ to explain high oil prices as due to oil simply depleting and running out.

It is still preferable to cite storms, technical problems, refinery accidents, pipeline blowouts, the weak US dollar, rebellion and wars in Nigeria, Chad and Sudan, the Iraq war, al Qaida, Vladimir Putin and the ‘anti western Kremlin’ now menacing pipeline routes in Georgia, the Kazakhs or Chavez of Venezuela applying ‘resource nationalism’ to oil reserves and production plants, and demanding higher taxes and shares of profits. We also have the energy wasteful Chinese importing too much oil to make and throw away 3 Bn plastic bags per day, and produce and export a plethora of oil and energy-intense, but still cheap industrial goods to fill supermarket shelves in the “postindustrial” consumer societies of the OECD. The Indians and other Emerging Economies do the same. Very hot weather in summer or very cold weather in winter, climate change, and why not earthquakes (?) can also be used to lever up daily traded oil on the Nymex, ICE London and Singapore, or Dubai exchanges.

.....

The only missing link in this cozy situation is that oil, and natural gas quite soon, really are depleting resources. When markets are structurally undersupplied, as the world oil market likely is already, prices have to reach extreme exotic highs before anything (usually bad) happens.

---

This is what we can call “buoyant demand” and one big reason we are getting to Peak Oil, faster. In other words oil demand is tight-linked to growing output of key consumer and industrial equipment. Talk about another kind of decoupling, not Emerging Economy decoupling but de-linkage of oil from economic growth may be fine, but the real world-real economy features very strong growth of the world transport fleet – road, off-road, rail, air and marine. It is no surprise at all that global economic growth at ‘vintage’ rates of around 5%pa since 2005 drives growing demand. The surprise is to deny this. The surprise continues with the energy agency guardians of oil supply data and energy policy for the most oil-intense and oil-wasteful country in the OECD, and for the OECD group as a whole, the USA’s EIA and the OECD IEA, go on to claim this ‘buoyant’ world oil demand is almost zero, or at least weakening, constantly. The paradigm offered by these two agencies is: global demand growth is both low, and falling.

It is easy to understand why the EIA and IEA persist with this argument: if world oil demand growth really was low, and really was falling from that already low level, oil prices should ‘moderate’ and bear some resemblance to the luridly unreal “price scenarios” both of these agencies occasionally publish.

http://www.financialsense.com/editorials/mckillop/2008/0421.html

WASHINGTON - The next generation of new cars and trucks will need to meet a fleet average of 31.6 miles per gallon by 2015, the Bush administration proposed Tuesday, seeking more fuel-efficient vehicles in the face of high gasoline prices and concerns over global warming.

Transportation Secretary Mary Peters outlined the plan on Earth Day, setting a schedule that was more aggressive than initially expected by the auto industry. It responds to a new energy law that requires new cars and trucks, taken as a collective average, to meet 35 mpg by 2020.

"This proposal is going to help us all breathe a little easier by reducing carbon dioxide emissions from tailpipes, cutting fuel consumption and making driving a little more affordable," Peters said.

New cars and trucks will have to meet a fleet-wide average of 31.6 mpg by 2015, or about a 4.5 percent annual increase from 2011 to 2015. In 2015, passenger cars will need to achieve 35.7 mpg and trucks will need to reach 28.6 mpg.

http://news.yahoo.com/s/ap/20080423/ap_on_bi_ge/fuel_economy

Ford's Model T drove with an average of 25mpg.

The Model T's debut was in 1907.

So the best average we can hope for is an increase of 6.6mpg over a century of automotive engineering?

Like I said....

In 2015, passenger cars will need to achieve 35.7 mpg

these numbers suck!

Something like 45 mpg on the highway.

Talk about globalization it had parts from all over the place in it... Most of the mechanical stuff from Germany,
windows from Brazil, fabric/carpets from Mexico.

I drive a (bought used in 99) 98 Saturn wagon. Now with 280K on it (2nd motor). It gets between 35 and 40 mpg. Worst mpg was right before a tune up and that was 34.

The Spousal Unit resisted Saturns. Said it sounded like we were joining a cult. But was won over by the utter simplicity and easy maintenance.

I don't know what I'll do when this one goes. I like small wagons with a stick. Very difficult to find.

very useful if trying to survive teaching a teenager to drive....who figures that if it doesn't leave a mark, it's okay. (sheesh)

*sigh*

Not to mention my especially-hated Levin and Dingell politicians...

"Many analysts expect the Federal Reserve to cut interest rates further this year to try to shore up the ailing U.S. economy, a move that would likely further weaken the dollar."

So the dollar is weakened to shore up the economy, but the weaker the dollar, the higher the oil/gas price??? Higher gas prices = weaker economy, non? Am I missing something here?



Tansy Gold, who always said she didn't lose it, she mislaid it

when Chopper Ben's hat was tossed into the ring for the chair. Everyone was digging up that 2002 printing press speech of his. There was that whole inflation/deflation debate going on, and a lot of articles posted hear called for exactly what we're seeing - deflation in assets such as real property, stocks, funds, etc. (Greenspin's objects of paper-based "created wealth") with inflation in actual goods - tangible stuff you need, use, want to purchase.

From what we've been hearing lately on the GSEs (mainly Freddie and Fannie so far), my guess is that the Feds Operation Twist redux isn't quite taking hold yet, though the yield curve seemed to be flattening (haven't check lately).

Yep, rock/hard place as the global race in currency debasement continues. :hurts:

NEW YORK - Stocks headed for a moderate rebound Wednesday as investors awaited another round of first-quarter earnings reports and hoped the numbers would help determine where the economy is headed.

Results arriving early Wednesday painted a lackluster picture of some sectors. Bond insurer Ambac Financial Group reported it swung to a loss of $1.66 billion from a profit of $213.3 million a year earlier. The loss came in part because of charges for bonds backed by soured mortgages.

Health insurer WellPoint Inc. posted a 25 percent decline in its first-quarter profit and lowered its full-year forecast because of higher medical costs.

But there has also been some upbeat earnings news. After the closing bell Tuesday, Yahoo Inc. reported stronger-than-expected profits and revenue.

Wall Street has been digesting the flood of corporate numbers arriving in recent weeks as it tries to ascertain how long a slowdown in the economy might last. With little in the way of economic news expected this week, investors are left to focus on corporate news and await the next interest rate decision from the Federal Reserve, which is due in a week.

http://news.yahoo.com/s/ap/20080423/ap_on_bi_st_ma_re/wall_street

NEW YORK - Bond insurer Ambac Financial Group says it lost $1.66 billion, as it took steep charges related to bonds backed by mortgages and stopped underwriting insurance on some debt.

New York-based Ambac Financial Group Inc. says it swung to a loss of $1.66 billion or $11.69 per share, compared with profit of $213.3 million, or $2.02 per share, a year earlier.

-developing story-

http://news.yahoo.com/s/ap/20080423/ap_on_bi_ge/earns_ambac

BASEL, Switzerland - Outgoing UBS AG chairman Marcel Ospel said Wednesday that the worst is over for subprime problems at Switzerland's largest bank and "we soon will be sailing into calmer waters.

"On the whole, the financial markets are also still far from normal, although the evidence suggests that we are gradually re-approaching normality," Ospel told shareholders at their annual meeting confronted with how to recover from US$37.4 billion (euro23.65 billion) in writedowns since last summer.

Under Ospel, UBS has been among banks hardest-hit by the subprime mortgage crisis in the United States.

http://news.yahoo.com/s/ap/20080423/ap_on_bi_ge/switzerland_ubs

ZURICH -- UBS AG on Wednesday partly bowed to investor pressure, outlining plans to slim down its investment bank and strengthen its board of directors in a bid to turn the bank around following recent hefty subprime-related write-downs and losses.

"Fundamental change is required in the way we look at risk and the implications this has on the scope of activities in which we want this bank to be engaged," chairman-nominee Peter Kurer said at the company's annual general meeting in Basel.

Mr. Kurer is expected to receive shareholder backing to join the UBS board at the AGM, where investors are also expected to back a planned 15 billion Swiss franc ($15 billion) capital increase, its second big cash infusion in under two months.

As part of the changes, UBS said it will simplify its structure and rely more on its healthy private-banking business, cutting the size of its investment bank and rejigging the way its board of directors operates.

http://online.wsj.com/article/SB120894128753637907.html?mod=googlenews_wsj

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

Last trade 71.461 Change +0.104 (+0.15%)

US Dollar Falls to a Record Low, Driving Oil Prices Toward $120

http://www.dailyfx.com/story/bio1/US_Dollar_Falls_to_a_1208900439666.html

It has been a record breaking day in the financial markets with the US dollar falling to a new all-time low and oil prices hitting a record high above $119 a barrel. When it comes to oil and the US dollar, it is difficult to determine which is the primary driver because the dollar’s weakness pushes oil prices higher while oil prices hurts the outlook for the US economy. Although it can be argued that higher crude prices are inflationary, it is not that simple because the Federal Reserve cannot raise interest rates to combat inflation. With the market already pricing in only a quarter point rate cut, to forgo a rate cut completely would send a message to the markets that the Federal Reserve is not quite ready for. At this time, the Fed’s bigger problem is the pressure that $5 gas prices may have on consumer spending and corporate profitability. The pocketbooks of US consumers are getting pinched by the day as prices rise globally. This morning, there have been reports that Mattel is raising toy prices and even the MTA (Metropolitan Transportation Authority) here in NY is planning to raise the price of alcohol, soda and snacks for the first the first time in 4 years; the price hike of 25 percent is by no means shallow. Housing market numbers were released this morning and they were not as bad as analysts had feared. The absolute number of existing homes sold was slightly more than expected even though the drop on a percentage basis was greater. House prices actually ticked higher which is a relief for the housing market even though that relief will probably be temporary. California just reported the highest level of mortgage defaults in 15 years, reflecting the severity of the problems in the US real estate market. Expect the US economy to get worse before it gets better.

...more...

Euro Breaks 1.60, Where is it Headed Next?

http://www.dailyfx.com/story/topheadline/Euro_Breaks_1_60__Where_is_1208876171461.html

The fourth time is the charm for the Euro as it finally pierces the 1.60 level against the US dollar. Despite slightly better than expected existing home sales in the US, a rebound in house prices, and news that the German Banking Association bailed out Duesseldorfer Hypothekenbank AG after a string of mortgage losses, the market refuses to give up its voracious appetite for Euros.

The latest bout of Euro strength or dollar weakness can be partially attributed to the sharp rise in oil prices, which hit $118.36 a barrel this morning. Before you know it, oil prices could be trading at $125 a barrel. This continual rise in inflationary pressures raises the risk of a rate hike from the European Central Bank.

This morning, ECB member Noyer said that the central bank will do what is needed to control inflation, including raising interest rates. Although he tried to temper that comment by saying that rates are currently appropriate, the seed has been planted.

Where is the Euro Headed Next?

Although 1.60 is a psychologically important level, it will not mark the end of Euro strength and dollar weakness. Speculators will continue to take the currency higher until ECB starts to wince. Unfortunately that may not come until another few hundred pips.

Don't expect any verbal intervention from the ECB, let alone physical intervention anytime soon. Economic data has been stable allowing the central bank to bask in the benefit that a strong currency has on inflationary pressures. The next best alternative to combating inflationary pressures would be to let the currency continue to appreciate.

...more...

http://www.informationclearinghouse.info/article19787.htm



22/04/08 "ICH" Last week's stock market blowout added more than 4 percent to the Dow Jones Industrials, but it had no affect on Libor rates. Libor rose steadily from Tuesday through Friday signaling more troubles in the banking system. Libor, which means London Interbank-Offered Rate, is the rate that banks charge each other for loans. It has a dramatic effect on nearly area of investment. When the rate soars, as it did last week, it means that the banks are either too weak financially to lend to each other or too worried about the ability of the other bank to repay them. Either way, it puts a crimp in lending. Banks serve as the transmission point for credit to the broader economy via business and consumer loans. When they're bogged down by their own bad investments or when risks increase; rates go up and the whole process slows to a crawl. When banks are unable to extend credit freely, business activity decreases and GDP shrinks.

The sudden surge in stocks is not a sign that things are back to normal; far from it. If anything, things are worse than ever. Credit remains unusually tight despite Bernanke's cuts to the Fed Funds rate or the creation of various “auction facilities” that remove mortgage-backed securities (MBS) from banks balance sheets. Businesses and consumers are still having a hard time getting funding, which means that the velocity of money in the financial system is decelerating rapidly increasing the likelihood of a system-wide freeze-up. Libor is just the flashing red light.

A rise in Libor adds billions in additional interest payments for homeowners, businesses and other borrowers. According to the Wall Street Journal:

“Libor is one of the world's most important financial indicators. It serves as a benchmark for $900 billion in subprime mortgage loans that adjust -- typically every six months -- according to its movements. Companies globally have nearly $9 trillion in debt with interest payments pegged to Libor, according to data provider Dealogic.”

Commercial real estate deals are mostly pegged to Libor as are adjustable rate mortgages (ARMs). In fact, most of the mortgages that were written up during the boom-years were tied to Libor. That's why Peter Fitzgerald, chief financial officer at Radco Cos., said, "If Libor were at 4% instead of under 3%, there would be a disaster that would take years to unwind.” (WSJ)

Rising Libor puts the Fed and the Bank of England in a tough spot. They're trying to keep rates artificially low so the banks can increase their lending and recoup their losses, but the market is not cooperating. The market is driving Libor upward, which means the Fed is losing control. The real cost of money is going up.

The Bank of England was forced to intervene on Monday. Mervyn King, the UK's central bank governor, launched a “Special Liquidity Scheme” to “improve the liquidity of the banking system and raise confidence in financial markets while ensuring that the risk of losses on the loans they have made remains with the banks.” The plan will provide $100 billion for "illiquid assets of sufficiently high quality” (Mortgage-backed securities) to “unfreeze” bank lending. The plan is similar to the Fed's auction facilities which have provided over $200 billion in exchange for dodgy MBS, collateralized debt obligations (CDOs) and commercial paper (ABCP) According to Bloomberg:

“The Central Banks move allows financial institutions to add government bonds to their inventory of liquid assets and make it easier for them to raise cash and lend, especially to consumers seeking home loans. In return the government will hold the riskier mortgage-backed securities.” The BOE said the swaps would be for a period of one year and could be renewed for up to three years, although the banks would be on the hook for losses on their loans. Its a sweet deal for the investment banks and a total loser for the British taxpayer who could get stuck with hundreds of billions of worthless MBS.

The $100 billion liquidity-injection is the biggest bailout in the BOE's history, and it was granted without public input or Parliamentary authorization, just like the Bear Sterns transaction. The bankers call the shots while the public picks up the tab. The BOE's action puts to rest the idea that “the worst is behind us”. It isn't; in fact, recent estimates suggest that the losses to the banking system could exceed $1 trillion. There's still a lot of carnage ahead.

The $100 billion will help to stabilize the money markets and put the banks on sounder footing, but it does nothing to help the housing market. The British real estate market is on life support because most of the mortgage financing was coming from investors who bought MBS. Mortgage securities are currently down 92 percent from the same period last year, which leaves potential buyers without a funding source. The BOE is considering creating a British-style Fannie Mae to kick-start the flagging housing industry by providing government-backed loans. The private sector will not be a big player in the housing market for the foreseeable future.

The same is true in the US. If the Fed can't bring Libor down with interest rate cuts, then it will have to develop a back-up plan. The next step would be “quantitative easing”; a monetary policy that was implemented by the Bank of Japan in 2001 “to revive that country's economy that was stagnant for a decade. Quantitative easing entails flooding the banking system with excess reserves, resulting in pushing the benchmark overnight bank lending to zero.” (Reuters) There are indications that Bernanke is preparing for this radical option already, but there's little chance that it will succeed. Whether the banks are able to lend or not is irrelevant. Public attitudes towards indebtedness have changed dramatically in the past few months. Overextended consumers are looking for ways to pay off their debts and live within their means. This will make it more difficult for Bernanke to reflate the equity bubble through credit expansion. When people are frightened or pessimistic about the future, they naturally curtail their spending...Fiat money inflations often bring on real estate booms followed by busts. These inflations are the common element in real estate cycles that span many countries and many centuries, and they put the lie to the hypothesis that bad lending practices are the culprit. Fraudulent money creation is the culprit, not faulty evaluation of the credit risks of borrowers.” (Michael S. Rozeff , “The Subprime Crisis and Government Failure”, lewrockwell.com)


The Fed's monetary policies have triggered a run-up in commodities prices which is driving up the cost of everything from corn to copper. Food riots have broken out in capitals around the world and leaders are worried about growing political instability. The media is blaming drought, high energy prices, and biofuels for the sudden rise in prices, but these are only secondary factors. Currency devaluation has played a bigger role than shortages or blight. The world is awash in dollars which are steadily losing value. Pension funds and foreign central banks are diverting dollars into commodities rather than keeping them in corporate bonds or the sagging stock market. Economics editor for the UK Telegraph, Ambrose Evans-Pritchard, draws the same conclusion in his recent article, "Oil, Surges as Investors hunt for Anti-dollar":"This is now entirely investor driven," said Dr Frederic Lasserre, Société Générale's head of commodities research. He added that most of the money is coming from pension funds, insurers and other long-term investors. They view the US recession as a mere hiccup in a powerful upward cycle, convinced that Chinese and Mid-East demand will hold up long enough for America to recover. "They are all convinced by the fundamental tightness of the market," he said.” (UK Telegraph)

Commodities prices are now being driven by an ever-weakening dollar. As Pritchard notes, oil futures have become a sort of “anti-dollar”; a more reliable store of value than the anemic greenback...The Fed's loose money policies have put the dollar at risk of losing its role as the world's reserve currency. If the dollar falls from its perch, the empire will soon follow. The macroeconomic impact of Greenspan's low interest rates will be seismic. Foreign banks and investors currently hold $6 trillion in dollar-based assets and currency. When the dollar falls; speculation will increase and prices will rise. Currently, the US is exporting its inflation and fueling political unrest in the process. If Bernanke continues to slash interest rates, the problems will only get worse. The Fed could raise rates by 50 basis points tomorrow and the commodities bubble would explode overnight, but that doesn't look likely.

..................
Martin Feldstein, chairman of the Council of Economic Advisers under Ronald Reagan, joined Volcker in blasting the Fed and calling for an end to the rate cuts. In a Wall Street Journal editorial on April 15 Feldstein said:

“It's time for the Federal Reserve to stop reducing the federal funds rate, because the likely benefit is small compared to the potential damage....Lower interest rates could raise the already high prices of energy and food, which are already triggering riots in developing countries. In order to offset the inflationary impact of higher imported commodity prices, central banks in those countries may raise interest rates. Such contractionary policies would reduce real incomes and exacerbate political instability....lowering interest rates stimulates economic activity to a point at which labor and product markets cause wages and prices to rise. That is unlikely to happen in the U.S. in the coming year. The general weakness of the economy will keep most wages and prices from rising more rapidly.....But high unemployment and low capacity utilization would not prevent lower interest rates from driving up commodity prices.

Lower interest rates induce investors to add commodities to their portfolios. When rates are low, portfolio investors will bid up the prices of oil and other commodities to levels at which the expected future returns are in line with the lower rates.”

Feldstein is right. Additional cuts will probably have negligible effect on housing and consumer spending, but they could be a death-blow to the dollar. It's not worth it. Lower rates will be devastating for people living in poorer countries. In the US, middle class families spend only 15 percent of net earnings on food. In poorer countries people spend upwards of 75 percent of their income just trying to feed themselves. That's why riots are breaking out everywhere; the Fed's monetary policy is a catalyst for political instability.

Besides, lower interest rates don't necessarily increase demand or make credit more easily available. The only way to spark demand is to make sure that wages keep pace with production so that workers can buy the things they produce. That's the only way to create a prosperous economy, too; build a strong and well-educated work-force.

MUCH MORE AT LINK..

NEW YORK (AP) -- Bond insurer Ambac Financial Group said it lost $1.66 billion in the first quarter, as it took steep charges related to bonds backed by mortgages and stopped underwriting insurance on some debt.

New York-based Ambac (ABK) said it swung to a loss of $1.66 billion or $11.69 per share, compared with profit of $213.3 million, or $2.02, a year earlier.

http://money.cnn.com/2008/04/23/news/companies/ambac_earns.ap/index.htm?postversion=2008042307

http://www.japantoday.com/category/national/view/japan-freezes-assets-of-iranian-companies-individuals



TOKYO —

The cabinet on Tuesday approved new sanctions to freeze the assets of 12 organizations and 13 individuals related to Iran’s nuclear development programs, in line with a March 3 U.N. resolution.

Japan has already banned the entry of senior officials of Iran’s nuclear facilities and implemented other measures that did not require cabinet endorsement. Tuesday’s approval brings the total number of sanctions targets to 35 organizations and 40 individuals.

and images of snake pits...or stirring up the village pond.

that you came to drain the swamp.

Hmm...

P.S. I'm sure somebody will post some sort of nuance that it isn't the government... To which my reply will be, then
they need to stop calling themselves the U.S. SEC.

“Let us assume that the unthinkable happens: China’s economy slows down sharply, or even contracts – and there are reasons why it could. Commodity prices slump and bring about economic hardship in the resource-producing countries. Imports of capital and consumer goods from Europe and Japan decline. We would then have the perfect setting for a global economic contraction with dire consequences for corporate earnings and asset prices.”...Our theory is that the war between inflation and deflation leaves millions of casualties, but no clear winner – at least not for a while. Instead, prices for U.S. stocks, houses and labor are marked down...while commodities, oil, gold (and even some emerging markets) go up.

But we could be wrong in either direction. Either inflation or deflation could soon emerge victorious. Most analysts think inflation will be the clear winner – with big boosts, not only for commodities, but for the economy and stocks... and maybe even houses. They think the financial industry has bottomed out and will soon get back on its feet and begin inflating the whole economy. The view (here) is the opposite one – that deflation will be the clear winner, dragging the whole world economy into a slump, with lower prices for commodities as well as stocks and property...much of the world’s earnings come from the energy exporters – Russia and the Arab countries -- and finished product producers in Asia, notably China.

Both depend on the same foreign buyers.

In the weekend news, for example, we discovered that the emerging markets are now using more oil than the United States. They use more oil because their economies are growing – because they are still moving products to the United States. In a real downturn, the United States (and other developed nations) would stop importing so much oil...and so much merchandise from China, which would have the consequence of reducing energy consumption by China too. Result: lower energy prices and a worldwide recession...maybe even the worst worldwide depression in history.

What might be the consequences of such a depression? In the United States and Europe, probably nothing catastrophic. People in the developed nations live with a thick cushion under their derrieres. The bench might grow harder and less comfortable; assets would fall in price; earnings would decline (both for businesses and individuals); otherwise, life would go on as before. In the emerging markets, on the other hand, billions of people now sitting precariously on the edge of modern life might get pushed off. The artificial boom – brought about by excessively low lending rates in the West – caused millions of people in the emerging markets to abandon their farms and move to the cities.

For the first time in human history, the planet now has more people living in cities than in the countryside. These people can no longer ‘get by’ as subsistence farmers. They no longer have any land to subsist on. Instead, they rely upon a sophisticated, globalized economy for their daily bread. And if that economy should break down, they could go hungry...or starve.... We’re sticking with our middle-of-the-road forecast...for neither worldwide prosperity nor worldwide ruin. But there are risks from both directions. And while most people expect a mild recession and quick recovery...almost no one expects the kind of global meltdown Marc imagines. We could see oil below $50...the Dow below 5,000...Wall Street wiped out...and 20 million US families busted. But that is the good news. In the emerging markets it could be much worse – worse than the Great Depression of the ’30s. And there is also the political risk.

What do governments do when faced with economic collapse and social unrest? Hemingway described it:
“The first panacea of a mismanaged government is inflation of the currency. The second is war. Both bring a temporary prosperity; both bring more permanent ruin.” That is, they do just what Ben Bernanke and John McCain have already promised. They dump money from helicopters and “bomb, bomb, bomb...bomb, bomb Iran.” Imagine if China’s, and Russia’s leaders are as simpleminded as America’s. Surely, they are...

As we pointed out last week, the newspaper headlines may be negative, but sentiment is not. Most people think this is a good time to buy a house – meaning, they still think ‘you can’t go wrong in property.’ And stocks at 20 times earnings are no bargains. At real bottoms, you can buy stocks at 5 to 8 times earnings.

At real bottoms, people have stopped looking for bottoms. Our old friend Marc Faber sent a convenient list of quotations from the crash of ’29. A chart of the market action looks like a mountainside, with ledges...followed by more sharp downturns. But on each ledge...at each pause on the way down...there was some notable figure telling the world that it was over:

“This is the time to buy stocks,” said R.W. McNeal in the New York Herald Tribune after the first leg of the crash. “This is the time to recall the words of the late J.P.Morgan...that any man who is bearish on America will go broke.”

It is the “long slope of hope,” says Marc.

As it turned out, anyone who was bullish on America in October of 1929 went broke. Stocks did not return to their ’29 high until the 1950s – after more than 1,000 banks had gone bust...a quarter of the workforce had lost its jobs...and the Dow had given up 89% of its value.

And now, dear reader...the press may talk about depressions, bear markets and credit crises, but we ain’t seen nothing yet. When we get a real bottom, they won’t be talking at all – they will have lost interest. That’s what happens. When we get a real bottom, people won’t be interested in buying stocks; they’ll come to regard stocks as a rich man’s game. And they will once again view houses as a consumer item, not an asset class. As for depression...they won’t need the newspapers to tell them how bad things are

I thank whatever influences, intentional or not, in my life that we were able to get this house and property.

At any other point it would have been "un-possible".

And being the sort to pay it forward, I'm impatient to help. But also dreading the amount of pain it will take to get to the point where my meager attempts at assistance would be necessary.

I don't think I'm in quite the same self-sufficiency location as you, but as dire as my own circumstances seem at times -- like, ten minutes ago -- I know I'm better off than a lot of people. And I have facilities to help others.

Tansy Gold, who sometimes wishes she still had the underground house but not enough to go back to Indiana for it

Find a "worthy" candidate and give them the chance to survive *s economy.

Luckily, it was no surprise.

We have a "program" of sorts. We'll "adopt" a student and pay them a couple of bucks over minimum to do chores around the place; weeding, hole digging and whatnot. I tell the Spousal Unit that it might've ended up being cheaper to have kids.

I still send food and care packages to the ones who have gone on to college and might need a little help now and again. At least they'll have something to eat.

I've been invited to 2 of the weddings so far and one is bringing her new beau down from NY to meet us next week.

If it comes to cases, there is plenty of room to expand both living quarters and garden. Everybody is invited, though I don't do dishes, so you'll have to pick up the slack there.

Like TalkingDog, I am fortunate to live on enough land to at least have a garden, and small orchard; with space left over for tents, storage, etc. And there are several friend who might wind up here yet. Who know how ugly it could get.

http://www.iht.com/articles/2008/04/21/business/commodity.php


Fred Grieder has been farming for 30 years on 1,500 acres near Bloomington, in central Illinois. That has meant 30 years of long days plowing, planting, fertilizing and hoping that nothing happens to damage his crop...But Mr. Grieder’s days on the farm in Carlock, Ill., are getting even longer. He now has to keep a closer eye on the derivatives markets in Chicago, trying to hedge his risks so that he knows how much he will be paid in the future for crops he is planting now. And the financial tools he uses to make such bets are getting more expensive and less reliable. In what little free time he has, Mr. Grieder attends Illinois Farm Bureau meetings to join other frustrated farmers who are lobbying officials in Chicago and Washington to fix a system that was designed half a century ago to reduce uncertainty for food producers but is now increasing it.

Mr. Grieder, 49, is shy about complaining amid so much prosperity. Prices for his crops are soaring on the updraft of growing worldwide demand, and a weak dollar is making the crops more competitive in global markets. But today’s crop prices are not just much higher, they also are much more volatile. For example, a widely used measure of volatility showed that traders in March expected wheat prices to swing up or down by more than 72 percent in the coming year, three times the average volatility for that month and the highest level since at least 1980. The price swing expected in March for soy beans was three times its monthly average, and the expected volatility in corn prices was twice its monthly average. Those wild swings in expected prices are damaging the mechanisms — like futures contracts and options — that in the past have cushioned the jolts of farming, turning already-busy farmers into reluctant day traders and part-time lobbyists.

...The additional costs that stem from volatility in grain prices — higher crop insurance premiums, for example — are not just a problem for farmers. “Eventually, those costs are going to come out of the pockets of the American consumer,” said William P. Jackson, general manager of AGRIServices, a grain-elevator complex on the Missouri River. Prices of broad commodity indexes have climbed as much as 40 percent in the last year and grain prices have gained even more — about 65 percent for corn, 91 percent for soybeans and more than 100 percent for some types of wheat. This price boom has attracted a torrent of new investment from Wall Street, estimated to be as much as $300 billion. Whether new investors are causing the market’s problems or keeping them from getting worse is in dispute. But there is no question that the grain markets are now experiencing levels of volatility that are running well above the average levels over the last quarter-century.

Mr. Grieder’s crop insurance premiums rise with the volatility. So does the cost of trading in options, which is the financial tool he has used to hedge against falling prices. Some grain elevators are coping with the volatility and hedging problems by refusing to buy crops in advance, foreclosing the most common way farmers lock in prices. “The system is really beginning to break down,” Mr. Grieder said. “When you see elevators start pulling their bids for your crop, that tells me we’ve got a real problem.” Until recently, that system had worked well for generations. Since 1959, grain producers have been able to hedge the price of their wheat, corn and soybean crops on the Chicago Board of Trade through the use of futures contracts, which are agreements to buy or sell a specific amount of a commodity for a fixed price on some future date.

More recently, the exchange has offered another tool: options on those futures contracts, which allow option holders to carry out the futures trade, but do not require that they do so. Trading in options is not as effective a hedge, farmers say, but it does not require them to put up as much cash as is required to trade futures. These tools have long provided a way to lock in the price of a crop as it is planted, eliminating the risk that prices will drop before it is harvested. With these hedging tools, grain elevators could afford to buy crops from farmers in advance, sometimes a year or more before the harvest.

But that was yesterday. It simply is not working that way today...

April 23 (Bloomberg) -- Moody's Corp.'s first-quarter profit fell less than analysts estimated after the world's second- largest credit-rating company cut jobs and pay . . .

Moody's eliminated 7.5 percent of its workforce and reduced worker compensation, helping lower operating expenses by 17 percent in the quarter. . .

Moody's, dubbed the least accurate assessor of subprime- mortgage risk by UBS AG, came under fire yesterday in Washington from Senate Banking Committee members including Dodd, a Democrat from Connecticut, and Senator Jack Reed, a Democrat from Rhode Island. Lawmakers called on Securities and Exchange Commission Chairman Christopher Cox to tighten oversight of the companies.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ae1NL54XwKWg&refer=home

Instead of making a profit of 35 cents per share, Moody's job/wage cuts increased shareholder's profits to 48 cents per share.

Cutting people out and cutting the remaining worker bee's benefits sure isn't going to help Moody rise from being the least accurate assessor of security risks.

Including the customers.

Stupid strategy.

It doesn't take many employees to charge a company a hefty fee and then slap a triple a rating on their stock.

to have a phone number to call to verify you're who you say you are... Operated by one of your co-conspirators.

Typical con.

I'm too lazy to look it up in the Wiki.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aoD_5Sma3igA&refer=home

snip:
The banks are taking advantage of a 6 percent increase in the price of LBO loans this month to offer debt they have been stuck with since the subprime mortgage crisis forced them to stop marketing the deal in July, according to UniCredit's head of debt strategy Jochen Felsenheimer.

``This recovery in leveraged loans is seen as a window for the banks to get rid of these loans,'' Munich-based Felsenheimer said in an interview today. ``All the banks have the same incentive to do it so they will find an agreement on price.''

Banks trapped with debt from underwriting LBOs have cut their holdings of the loans in the U.S. by a half to $95 billion by offering discounts of as much as 37 cents on the dollar and providing financing for the buyers, according to Standard & Poor's. Bankers halted the loan sale for Boots, Europe's biggest LBO, along with Chrysler LLC on July 25, starting a backlog of unsold debt that Bank of America Corp. says peaked at more than $370 billion worldwide.


And here to harsh your buzz is Alex Moss.....
snip:
``They are being optimistic if they think they can get this away,'' said Alex Moss, who helps manage the equivalent of $200 billion as head of high-yield and leveraged loans at Insight Investment Management in London. ``Just because the market is rallying doesn't mean banks can dump all these low-quality deals back on the market.''

LBOs for me?

The acquisition of another company using a lot of borrowed money (bonds or loans) to meet the cost of acquisition. The assets of the company being acquired are used as collateral for the loans in addition to the assets of the acquiring company. It lets companies make large acquisitions without having to commit a lot of capital.

Investopedia Says:
In an LBO, there is usually a ratio of 90% debt to 10% equity. Because of this high debt/equity ratio, the bonds usually are not investment grade and are referred to as junk bonds. Leveraged buyouts have had a notorious history, especially in the 1980s when several prominent buyouts led to the eventual bankruptcy of the acquired companies. This was mainly due to the fact that the leverage ratio was nearly 100% and the interest payments were so large that the company's operating cash flows were unable to meet the obligation.

I do remember Michael Milken and the junk bonds. Do you ever think the "system" is approaching entropy?

Sure food/oil commodities are high because of speculation, but if the hedgers weren't going hog wild partying in hedge fund bets no one would know there is a problem.

Huh? Cambodian and Haitian kids are eating dirt pies but it is all good because we now know there is a problem with high food prices?

I find that reasonable.

never run out of acid and your tongue be forever sharp.....


BTW: Today is the Birthday of the great Bard himself. If there were ever a person that did not lack for a cleverly turned phrase or a sharp barb-it was the great William Shakespeare.

or maybe let them grow up a little before sacrificing them.

Turn Back The Hands Of Time Contest....


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.

GhostDog.....4/28-where are you man?
Maeve.....5/1
MilesColtrain.....5/2
Happyslug.....5/9
Yael.....5/13
distant earlywarning.....5/13
AzDemDist6.....5/15
SpecimenFred.....6/15
Demeter.....6/17
InkAddict.....7/3
UIA.....7/15
Roland99.....7/28
Abelenkpe.....8/2
Kineneb.....8/8
Nadinebrezezinski.....9/1
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. If your date isn't on the list, e-mail me and I'll add it the next time I post. I deleted the dates that have passed. I post about one a week-more often the closer we get to the number. The winner get the praise and admiration of those on the Stock Watch Thread. There is still time to place your bets.....And please-no Reggie bars in the pool.

10/13.

It's my birthday, so what the hell better present could I give myself than my very own stock market plunge? :evilgrin:

If that's what you really want, Tansy, we'll see what we can do!

I dunno, friends and marketeers, but I more and more believe that is the only way out of this mess. It has to collapse beyond the power of the PTB to keep it on life support.

I was reading the Steve Fraser article linked in Koko1's post and one little bit caught my attention. (I'll go back and read it more carefully later; it echoes so much of what's in Phillips' "Wealth & Democracy.") Fraser says:

<snip>
Nonetheless, you can't ignore the fact that, during the second Gilded Age, half of all American families became investors in the stock market. Dentists and engineers, mid-level bureaucrats and college professors, storekeepers and medical technicians -- people, that is, from the broad spectrum of middle class life who once would have viewed the New York Stock Exchange with a mixture of awe, trepidation, and genuine distaste, and warily kept their distance -- now jumped head first into the marketplace carrying with them all their febrile hopes for social elevation.
<end snip>

One of my professors a few years ago used this same tidbit of propaganda to point out that almost all of us in the classroom -- students and three team-teaching professors -- were "guilty" of capitalism if we had so much as a dollar in a retirement/mutual fund invested in the stock market, and of course all of us did. But one of the other professors countered with, yes, but that hardly makes us "capitalists," since not only do we have but minuscule amounts of stock spread over perhaps dozens of companies, but we have no control over what stocks we're invested in, when they're bought or sold, or at what price. Nor do we have any control over the management of the companies in which our fund invests us. In many cases, due to the changing complexion of retirement planning away from company-funded pensions to 401Ks and so on, we don't even have a choice whether to invest or not.

But like all propaganda, the 401K, the "choice" rhetoric of privatization of social security, the "ownership society," and so on, give the illusion of something that isn't there. I'm not talking about those who are able to invest directly, who choose which companies to invest in, who have some serious rather than superficial control over their investments; these are people, including some SMWers, who have the wherewithal to be "investors." The rest of us -- like the Wal-Martyrs who put five bucks away every paycheck and at the end of the year have three shares out of how many billions -- are merely playing a game. Like children playing dress-up in Mommy and Daddy's old clothes, we're playing "investor" with the few scraps that the grown-ups don't want or need.

Of course, it's been a very effective propaganda campaign. As Fraser notes, now all these people who would have been anti-Wall Street see themselves instead as part of the "in" crowd. They don't want the market to crash and destroy their little nest egg. Never mind that the forces that conspire to keep their "nest egg" healthy are the same forces that are eroding their earning power, shipping their jobs overseas, driving the price of everything they buy sky high.

At the bottom, too, is another more sinister force, what I have come to call the "Do you believe in miracles? Yes!" syndrome.

For all the rhetoric that the U.S. is not a 'christian' nation, the fact remains that many of our institutions remain rooted in an anglo-protestant ethos, and part and parcel of that ethos is the fundamental belief in miracles. Without the miracle of the risen christ, there can be no christianity. Obama preaches it -- and yes, I use that word intentionally -- in the prospect of "hope." I'm not saying there's anything wrong with hoping for a better world or hoping I find a job next week. But there is an element of hoping for, or even halfway expecting, that which is not rationally or reasonably possible. Why do we continue to do so? Because, I think, we have a culture that does believe in miracles, believes in things happening against the odds. We gamble, knowing the odds are against us, because someone else beat the odds. Someone else had a miracle.

And so we allow our earnings to be invested for us, secretly hoping one of those stocks will go through the roof and we'll cash out as millionaires. And we can't shake this culture of blind hope, hope in miracles to save us from ourselves.

That's why I believe nothing will happen until hope is gone and replaced with determination. When the general population, not just of the U.S. but of the world, stops hoping for miracles, then maybe we'll get off our asses and do something.


Tansy Gold, still jobless and yes, still hoping

the only investment for IRA money was the stock market. I want to put my savings into something that doesn't have a "helper" helping himself to the proceeds.

I looked at gold IRAs, but the risk of someone walking off with one's life savings doesn't seem bearable.

Interest rates on CD's are still in the pits.

Is it too much to want a CD earning 5%.

Oh, wait, National City is offering a CD paying 5% interest. Term is 48 months though, and must have $10,000.

But National City is rumored to be looking for a buyer or a merger. So where would my CD be in 4 years when it matures? It's FDIC insured, so it's safe, right?

FDIC is one of those "god-damned pieces of paper" that George tears up with impunity.

I don't know, and wish I did. Get out of debt, buy a farm or solar PV equipment, hoard food and raw materials, cultivate allies and housemates, hunker down. Process foreclosure papers for a living.

How I wish I'd had the sense to cash out and leave the country in 1999.

I thought about it in 2005 after I sold the house. The only thing that stopped me was the two dogs and all the shit I'd have to ship overseas.

Now I have two more dogs, and a lot more shit.

I think it's time to start making like an investment bank and unloading shit.


Tansy Gold, who is NOT full of it and STOP saying that!

Was it better than today, or something?

Demeter, who is no longer sure if she's coming or going, and for certain isn't enjoying the ride.

We met at summer camp in Parry Sound 40-some years ago and have been in touch ever since! Mine is a week later. He got his MBA at Columbia and fled Citi some years back...

The water was too cold in February when I first jumped in.

I'd like October 16, The calendar says it is National Boss Day.

:P

In case you don't see this because of the conference in DC, I will PM.

Thanks!

http://www.reuters.com/article/marketsNews/idUSN2323679120080423

NEW YORK, April 23 (Reuters) - Wal-Mart Stores Inc's (WMT.N: Quote, Profile, Research) Sam's Club warehouse division said on Wednesday it is limiting sales of Jasmine, Basmati and long grain white rice "due to recent supply and demand trends."

The news came as rice prices surged, with U.S. rice futures hitting an all-time high Wednesday on worries about supply shortages.

On Tuesday, Costco Wholesale Corp (COST.O: Quote, Profile, Research), the largest U.S. warehouse club operator, said it has seen increased demand for items like rice and flour as customers, worried about global food shortages and rising prices, stock up.

Sam's Club, the No. 2 U.S. warehouse club operator, is limiting sales of rice to four bags per customer per visit, and is working with suppliers to ensure the products remain in stock.

Warehouse clubs cater to individual shoppers as well as small businesses and restaurant owners looking to buy cheaper, bulk-sized goods.

more...

I've been stocking up on various dried and canned legumes myself, we've been more careful about blood sugar these days so rice and flour consumption have been limited for quite a while. These have been going up in price as well, but not exactly flying off the shelves - yet.

But, I do every year before hurricane season. But, this year, I'm getting just a little bit extra.

:crazy:

(Article is so good I had a hard time figuring out which paragraph's to "snip") :grr:

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

http://www.tomdispatch.com/post/174922/steve_fraser_the_two_gilded_ages

Tomgram: Steve Fraser, The Two Gilded Ages

Think of it as gilding the pain. Last year, hedge fund manager John Paulson of Paulson & Co. hauled in a nifty $3.7 billion. (Yes, you read that right.) Mainly, he did so, according to the Wall Street Journal, "by shorting, or betting against, subprime mortgage securities and collateralized debt obligations." And he wasn't alone. Hedge fund money-maker Philip Falcone of Harbinger Capital Partners raked in a comparatively measly $1.7 billion in 2007, also by shorting subprime mortgages. These are fortunes beyond imagining, made in no time at all by betting on the pure misery of others. Think of them as Las Vegas with a mean streak a mile wide.

In a week in which Citibank released news of quarterly losses of $5.1 billion and sweeping job cuts, food riots dotted the planet, oil hit $117 a barrel, and regular gas prices averaged $3.47 a gallon at the pump (with another 30 cents likely to be tacked on in the next month), Institutional Investor's Alpha magazine released its list of the 50 top hedge fund managers. In 2007, they "made" a cumulative $29 billion. (Even to slip in among the top 25, you had to take in at least $360 million.) To put this in perspective, Paulson alone made $1.6 billion dollars more than it is going to cost J.P. Morgan Chase to pick up the tanking Bear Stearns; in one hour, he made 30 times what the median American family earned all last year. And here's a little tidbit to go with that: Income inequality in 2007 was, according to the Associated Press, "at the highest level since 1928, the year before the Great Depression began."

And still, a New York Times piece on the gains of Paulson and crew described the hedge fund managers with genuine awe as "those masters of a secretive, sometimes volatile financial universe." Master of the Universe (a label originally attached to an over-muscled action figure of the 1980s by the name of He-Man) -- such descriptions have been with us since the beginning of our new Gilded Age and no one knows this better than Steve Fraser. His book on our financial "masters of the universe" from the eighteenth century to the present, Wall Street: America's Dream Palace, has just been published. As he writes, "Beginning with the merger and acquisition mania of the mid-1980s, the media were overrun with depictions of Wall Street 'gunslingers,' 'white knights' and 'black knights,' 'killer bees,' 'hired guns,'… and 'barbarians at the gates,' warrior appellations borrowed helter-skelter from antiquity, the Middle Ages, and America's mythologized West." The language brought to bear always had that requisite edge of awe, part of an ethos that added up to a cult of the Titan. Fraser, whose book is simply superb (and, in this age of information onslaught, mercifully short), offers a brief history of key images of Wall Street movers and shakers -- the aristocrat, the confidence man, the hero, and the immoralist -- taking you on a concise tour of America's love/hate relationship with Wall Street from the founding of the republic to late last night.

Now, as the gilding on our present age begins to peel and flake, Fraser turns back to the last Gilded Age at the end of the nineteenth century, to ask a few questions germane to our moment, especially why, today, unlike in the late nineteenth century, the protests over the Paulsons of our world aren't rising to the heavens.

...much more from Fraser's book at:

http://www.tomdispatch.com/post/174922/steve_fraser_the_two_gilded_ages

The Great Silence

I exaggerate, of course. Movements do exist today to confront the inequities and iniquities of our own Gilded Age. Wall Street bandits are, once in a while, arrested by a sheriff. Some ministers, even born-again ones, do still preach the Social Gospel. But all this seems a pale shadow of what was. Something fundamental about the metabolism of capitalism has changed.

Perhaps the answer is simple and basic: The first Gilded Age rested on industrialization; the second on de-industrialization. In our time, a new system of dis-accumulation looted American industry, liquidating its assets to reward speculation in "fictitious capital." After all, the rate of investment in new plant, technology, and research and development all declined during the 1980s. For a quarter-century, the fastest growing part of the economy has been the finance, insurance, and real estate (FIRE) sector.

De-industrialization has set off an avalanche whose impact is still being felt in the economy, in the country's political culture, and in everyday life. It laid the industrial working class and the labor movement low, killing it twice over. This, more than anything else, may account for the great silence of the second Gilded Age, when measured, at least, against the raucous noise of the first. Labor was mortally wounded by direct assault, beginning with President Reagan's decision in 1981 to fire all the striking air traffic controllers. His draconian act licensed American business to launch its own all-out attack on the right to organize, which continues to this day.

In itself, however, resorting to coercion to deal with the opposition hardly distinguishes our own gilded elite from the first one. If anything, we live in less savage times, at least here at home. More fatal by far was the arrival of a new mode of capital accumulation, starkly different from the one that had prevailed a century ago. It eviscerated towns, cities, regions, and whole ways of life. It demoralized people, hollowed out popular institutions that had once offered resistance, and stoked the fires of resentment, racism, and national revanchism. Here was the raw material for mean-spirited division, not solidarity.

Dis-accumulation transformed the working class into a disaggregated pool of contingent labor, contract labor, temporary labor, and part-time labor, all in the interests of a new "flexible capitalism." Ideologues gussied-up this floating workforce by anointing it "free agent" labor, a euphemism designed to flatter the free market homunculus in each of us -- and, for a time, it worked. But the resulting reality has proved a bitter pill to swallow. To be a "free agent" today is to be free of health care, pensions, secure jobs, security in every sense. In our gilded era, downward mobility, lasting a quarter-century and still counting, has marked the social trajectory of millions of people living in the American heartland.

Dis-accumulating capitalism also undermined the political gravitas of poverty. In the first Gilded Age, poverty was a function of exploitation; in the second, of exclusion or marginalization. When we think about poverty, what comes to mind is welfare and race. The first gilded age visualized instead coal miners, child labor, tenement workshops, and the shantytowns that clustered around the steel mills of Aliquippa and Homestead.

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Dow 12,763.22 42.99 (0.34%)
Nasdaq 2,405.21 28.27 (1.19%)
S&P 500 1,379.93 3.99 (0.29%)
10-Yr Bond 3.73% 0.01

NYSE Volume 4,103,606,000
Nasdaq Volume 2,180,180,750

4:20 pm : On Wednesday, the S&P 500 managed to post a modest gain, while the Nasdaq handily outperformed, as traders digested another onslaught of earnings reports. Strength in several large-cap tech names lifted the market, but their advance was partially offset by weakness in financial and energy stocks.

Microsoft (MSFT 31.45, +1.20) was the most influential name within the tech sector (+1.4%) after the company indicated it will not raise its offer for Yahoo! (YHOO 28.08, -0.46). The news caused shares of Yahoo to slip, even though the company reported better than expected earnings.

Shares of semiconductor firm Broadcom (BRCM 27.39, +3.84) soared 16% after the company reported earnings that topped estimates, and guided its second quarter revenue above expectations. The news gave a boost to the Semiconductor Index (+4.1%).

Lastly, tech got a boost from Apple (AAPL 162.89, +2.69) after traders bought its stock ahead of the company's earnings report.

Although tech was the most influential sector due to its heavy weighting, telecom (+2.2%) was actually the best-performing sector by percentage gain. AT&T (T 38.53, +0.72), Verizon (VZ 36.33, +0.60) and Sprint (S 7.67, +0.62) all saw buying interest.

The market had a mostly positive response to the 113 companies that reported earnings. Some notable names that topped estimates included Boeing (BA 82.09, +3.53), Yum! Brands (YUM 40.30, +1.81), EMC Corp (EMC 15.89, +0.30) and Philip Morris International (PM 52.00, +1.93).

Weakness in financials (-0.8%), energy (-0.8%) and materials (-1.3%), however, kept buying interest in check.

Financials underperformed largely due to disappointment regarding a massive quarterly loss at Ambac Financial (ABK 3.46, -2.57). The bond insurer's stock plummeted 43% to a new all-time low after the company reported a massive $5.42 per share loss on $1.7 billion in write-downs and a $1.0 billion increase in loan loss provisions. Analysts were looking for a much smaller loss of $1.51 per share.

Meanwhile the energy and materials sectors succumbed to some profit taking. Going into this session, energy was up 14% and materials were up 9% in the month of April.

UPS (UPS 71.67, -0.23) was a notable laggard. The company reported earnings that were in-line with expectations, but issued a cautious outlook. The company cut its second quarter and full year earnings estimates, citing economic concerns.

There were no economic reports on Tuesday, but the government did release its weekly energy inventory report. The Department of Energy said crude stockpiles rose by 2.42 million barrels, which was larger than the expected 1.50 million increase. Crude traded in a choppy manner following the report, finally settling with a gain of $0.25 to $118.32 per barrel.

Market participants will not be getting a breather tomorrow as 213 companies are confirmed to report their earnings. Some of the bigger names include Apple, Amazon.com (AMZN 81.00, +1.40) and Qualcomm (QCOM 41.89, +0.34). In addition, the market will be digesting the latest durable orders and initial jobless claims reports at 8:30 ET. DJ30 +42.99 NASDAQ +28.27 NQ100 +1.3% R2K +0.6% SP400 +0.4% SP500 +3.99 NASDAQ Dec/Adv/Vol 1317/1532/2.13 bln NYSE Dec/Adv/Vol 1469/1639/1.35 bln

3:30 pm : Stocks are climbing higher, with relative strength within the tech sector (+1.4%). The Nasdaq is approaching its best level of the session, while the Dow and S&P 500 still have a way to go.

Looking ahead, 213 companies are confirmed to report their earnings after this session's closing bell and before tomorrow's open. Some of the bigger names include Apple (AAPL 162.99, +2.79), Amazon.com (AMZN 81.271 +1.67) and Qualcomm (QCOM 41.98, +0.43 ). On the economic front, durable orders and initial jobless claims figures are set for release at 8:30 ET.DJ30 +57.24 NASDAQ +29.28 SP500 +4.88 NASDAQ Dec/Adv/Vol 1318/1542/1.74 bln NYSE Dec/Adv/Vol 1476/1632/1.02 bln

3:00 pm : The major indices have traded in a range-bound fashion the past half hour. The S&P is holding onto a slight gain.

Within the S&P 500, 52% of stocks are posting an advance. The largest percent gainer is Safeco (SAF 65.98, +20.75), with an advance of 46%. It was announced earlier today that Liberty Mutual is acquiring Safeco for $68.25 per share in cash, or $6.2 billion. The largest percent decliner is Ambac (ABK 3.41, -2.62), with a slide of 43%. Traders have been disappointed with the bond insurer's larger than expected loss.

Phillip Morris International (PM 51.98, +1.91), which Atria (MO 22.36, +0.31) recently spun off, is posting a hefty 3.8% gain. The cigarette company reported earnings of $0.89 per share, topping expectations by $0.12.DJ30 +28.09 NASDAQ +21.80 SP500 +1.16 NASDAQ Dec/Adv/Vol 1415/1415/1.58 bln NYSE Dec/Adv/Vol 1576/1519/919 mln

2:30 pm : The Nasdaq has managed to stave off selling interest better than the S&P 500. Microsoft (MSFT 31.34, +1.09), Apple (AAPL 162.73, +2.53), Qualcomm (QCOM 42.03, +0.48) and Broadcom (BRCM 27.28, +3.73) are the best performing names within the Nasdaq.

Telecom (+2.7%) has not been fazed by the recent retreat, as it steadily climbs higher. AT&T (T 38.73, +0.92), Verizon (VZ 36.335, +0.62) and Sprint (S 7.58, +0.53) are all showing strength.DJ30 +26.95 NASDAQ +22.30 SP500 +1.28 NASDAQ Dec/Adv/Vol 1381/1424/1.46 bln NYSE Dec/Adv/Vol 1579/1497/850 mln

2:00 pm : The major indices are trying to regain lost ground, but are unable to maintain any momentum. Market breadth is neutral, with advancers and decliners nearly even on the NYSE and the Nasdaq. Volume is on the average side.DJ30 +24.91 NASDAQ +21.82 SP500 +1.05 NASDAQ Dec/Adv/Vol 1384/1405/1.34 bln NYSE Dec/Adv/Vol 1526/1542/779 nkb

1:30 pm : The stock market has pulled itself out of negative territory, but lingers just above the unchanged mark.

Telecom (+2.0%) continues to exhibit strength as a relative leader. AT&T (T 38.67, +0.86) and Verizon (VZ 36.30, +0.57) are the supportive forces behind the sector's advance.

Oil continues to trade along the unchanged mark at $118.02 per barrel.DJ30 +29.39 NASDAQ +20.84 SP500 +1.52 NASDAQ Dec/Adv/Vol 1394/1367/1.24 bln NYSE Dec/Adv/Vol 1560/1494/723.72 mln