STOCK MARKET WATCH, Wednesday August 20

Source: du

STOCK MARKET WATCH, Wednesday August 20, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 154
DAYS SINCE DEMOCRACY DIED (12/12/00) 2768 DAYS
WHERE'S OSAMA BIN-LADEN? 2493 DAYS
DAYS SINCE ENRON COLLAPSE = 2784
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

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

AT THE CLOSING BELL ON August 19, 2008

Dow... 11,348.55 -130.84 (-1.14%)
Nasdaq... 2,384.36 -32.62 (-1.35%)
S&P 500... 1,266.69 -11.91 (-0.93%)
Gold future... 816.80 +11.10 (+1.36%)
30-Year Bond 4.47% +0.03 (+0.63%)
10-Yr Bond... 3.84% +0.03 (+0.68%)






GOLD,EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

And Good "Not even crack of the morning, up before dawn" to you!

:donut: :donut: :donut:

It's a delight to see so many cartoonists coming back from their Summer hiatus. Ben Sargent is among the best IMO. Now I wish Ann Telnaes would produce her great single-cell cartoons again.

:hi:

GSE Woes and More Fed Easing Ahead
BY FRANK BARBERA, CMT

It is hard to comprehend how far off the mark the official GDP numbers are at the present time. So far, with virtually all “non major” headline numbers moving into recession, we have seen the government statisticians skillfully manipulating the GDP figures higher by systematically understating inflation, and thereby overstating growth. At 1.80% growth in Q2, the GDP number was a charade steeped in the one time spending data of government stimulus checks. Yet, the effect of such a limited ‘one-off’ jolt is akin to a receding tide, with any positive affects wearing off in record time.

A simple glance at the chart below really speaks volumes about the directional trend of the US Economy, and has been unwaveringly accurate for years and years. The chart shows the rising trend of Continued Jobless Claims which reached a reading of 3.417 million in July, soaring 114,000 in the last week. Looking back we find that this reading of 3.417 million is the highest figure seen since October 2003, and is rapidly closing in on the peak figure of 3.76 million seen in May 2003. Any move above that high would place this gauge at the highest reading since 1982, a 26 year high. At present, with continued claims jumping by 320,000 during just the last three weeks, all that is required to reach that 26 year high are gains of 345,000 in the weeks just ahead. Given what is happening in the financial sphere and the housing sphere, these types of future gains in continued claims are all but a shoe in between now and late September. Over the long haul, we have inked in two horizontal lines on the chart below, one at 3.40 million and the other at 3.50 million. In our view, readings above 3.40 million have unwaveringly defined recessions, while readings above 3.50 million have identified powerful recessions. In this case, we would not be surprised to see this gauge move to new all time highs even above the twin 1974 and 1979-80 recession peaks seen in May 1975 (4.637 million) and November 1982 (4.713 million) before this down-cycle is complete.

....

At the same time we note that AIG International (AIG), long a bastion of blue chip stability, joined Fannie and Freddie at new life of cycle lows in today’s trade. In our view, there appears to be a greater tide of crisis building in the area of Credit Default Swaps, which in our view is likely the next major shoe to fall.

In the aggregate, this suggests that the current bear market in equities, which is likely only in the 2nd or 3rd inning, could be among the most severe seen in many years, perhaps going all the way back to the Great Depression. We say this because the credit bubble that is now unwinding represents the unwinding of 25 years worth of excess credit build up in the financial economy. Going back to the beginning of the secular bull market in August 1982, with the DJIA just under 800, the US embarked on a grand movement within the economy to a financial economy, wherein all sorts of new products were consistently brought to market. For much of that time, the progress was constructive and much of the financial economy fairly sound. Yet, in recent years, as perhaps is the nature with long term trends, everything seemed to move in the direction of gross excess, with debt levels rising dramatically just as a plethora of new, complex and illiquid securities were brought to market.

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

Hurts everyone, from the elite planners and erudite economists to the humble recipients of Social Security and Disability, who are thereby cheated of the pittance they depend upon to sustain their very lives.

That is where a Truth and Reconciliation Commision needs to be.

As long as Truth and Reconciliation include penalties commensurate with fraud and grand larceny.

10:35 Crude Inventories 08/16
Briefing.com NA
Consensus NA
Prior -316K

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

http://www.marketwatch.com/news/story/mortgage-volume-fell-15-last/story.aspx?guid=%7B6FC65BB3%2D7414%2D44E1%2DA049%2D3B723D0D7670%7D&dist=hplatest

CHICAGO (MarketWatch) -- Mortgage rates fell last week, yet that didn't inspire more borrowers to apply for a mortgage, according to the Mortgage Bankers Association's latest survey, released on Wednesday.

Application volume fell a seasonally adjusted 1.5% for the week ended Aug. 15, compared with the previous week. Volume was down 34.2% compared with the same week in 2007, the Washington-based MBA said.

The MBA survey covers about half of all U.S. retail residential mortgage applications.

The volume of refinance applications fell an unadjusted 3.7% compared with the week before, while the volume of applications to purchase a home fell a seasonally adjusted 0.4%.

The four-week moving average for all mortgages was down 4.0%.

...more...

not really on the report list, but it is an indicator of the real estate market

01. U.S. crude supply up 9.4 mln brls last week: Energy Dept.
10:36 AM ET, Aug 20, 2008

02. U.S. distillate supply up 500,000 brls: Energy Dept.
10:36 AM ET, Aug 20, 2008

03. U.S. gasoline supply down 6.2 mln brls: Energy Dept.
10:36 AM ET, Aug 20, 2008

SINGAPORE - Oil prices were slightly higher in Asia on Wednesday as investors awaited a weekly crude inventory report for evidence an economic slowdown in the U.S. is cutting consumer demand for oil products such as gasoline.

Light, sweet crude for September delivery was up 42 cents at $114.95 barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract rose $1.66 overnight to settle at $114.53 a barrel.

Investors are waiting for a report by the U.S. Energy Department's Energy Information Administration on U.S. oil stocks for the week ended Aug. 15 later in the day. The petroleum supply report was expected to show that gasoline inventories fell by 3 million barrels, according to the average of analysts' estimates in a survey by energy information provider Platts.

....

In other Nymex trading, heating oil futures rose 2 cents to $3.1437 a gallon, while gasoline prices gained 1.81 cents to $2.882 a gallon. Natural gas futures increased 10 cents to $8.076 per 1,000 cubic feet.

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

Oil production has begun falling at all of the major Western oil companies, and they are finding it harder than ever to find new prospects even though they are awash in profits and eager to expand.

Part of the reason is political. From the Caspian Sea to South America, Western oil companies are being squeezed out of resource-rich provinces. They are being forced to renegotiate contracts on less-favorable terms and are fighting losing battles with assertive state-owned oil companies.

And much of their production is in mature regions that are declining, like the North Sea.

The reality, experts say, is that the oil giants that once dominated the global market have lost much of their influence — and with it, their ability to increase supplies.

...

The scope of the supply problem became more clear in the latest quarter when the five biggest publicly traded oil companies, including Exxon Mobil, said their oil output had declined by a total of 614,000 barrels a day, even as they posted $44 billion in profits. It was the steepest of five consecutive quarters of declines.

http://www.nytimes.com/2008/08/19/business/19oil.html?_r=1&ref=todayspaper&oref=slogin

---

There's some simplistic thinking behind the reporting here. In one case, the reporter contributes slowing global growth to the fall in prices as the only catalyst. While that's one reason - it's not the only one.

to hold up prices.

As Paul Krugman pointed out some months ago, with verifiable data, production still exceeds demand. The big question is: where does the excess go?

We are exporting a lot.

A record 1.6 million barrels a day in U.S. refined petroleum products were exported during the first four months of this year, up 33 percent from 1.2 million barrels a day over the same period in 2007. Shipments this February topped 1.8 million barrels a day for the first time during any month, according to final numbers from the Energy Department.

snip

The exports were also equal to half the 3.2 million barrels of gasoline, diesel fuel and other petroleum products the United States imported each day over the 4-month period.

The biggest share of U.S. oil products exported went to Mexico, Canada, Chile, Singapore and Brazil.

Link: http://uk.reuters.com/article/oilRpt/idUKN0325640920080703?pageNumber=1&virtualBrandChannel=10174

The link provides the numbers for exports of various products such as gasoline, diesel and such. Have a good day!

that explains the rise in exports?

John Felmy, the chief economist at the American Petroleum Institute, said a portion of the oil products exported, especially diesel, was fuel that did not meet U.S. clean air requirements and therefore could not be sold in America. "You may have some that you're not able to use," he said.

Also, while U.S. gasoline demand is down due to high prices and a weak American economy, there is "strong economic growth outside the United States" where fuel is often subsidized and demand is high, said John Cook, director of EIA's Petroleum Division.

However, both the EIA and API admitted they did not know why daily U.S. gasoline exports to Canada skyrocketed to 41,000 barrels in January-April this year from 9,000 barrels in 2007.

The EIA said more U.S. diesel is going to Latin American to fuel power plants because of a shortage of natural gas in the region, and China has switched to diesel from coal to run some of its generating facilities in order to reduce smog ahead of the summer Olympics next month in Beijing

Hope this answers your question.

explain why the volume of exports has more than doubled in 1 yr.


"strong economic growth outside the United States"

it's not the case.


so they're lying.

drill here - sell here... ;)

and clean diesel.

The Saudis are producing more of this stuff, but they can't sell it. It just sits in storage, although it counts as production.

02. Sept. crude up $2.12 at $116.65/brl on Globex
10:15 AM ET, Aug 20, 2008

03. Oct. crude gains $2.09 to $116.63/brl on Globex
10:15 AM ET, Aug 20, 2008

:puke:

NEW YORK - As mortgage financiers Fannie Mae and Freddie Mac struggle with continuing credit losses, their ability to raise needed capital is uncertain and, analysts say, is complicated by the possibility of a government bailout of the two companies.

"We're in uncharted water with this," Bert Ely, an Alexandria, Va.-based banking industry consultant and longtime critic of Fannie and Freddie, said Tuesday.

Published reports about a possible bailout, continued quarterly losses at Fannie and Freddie and further deterioration in the credit markets have investors concerned about the mortgage companies' solvency. Those worries have sent the companies' prices tumbling, with Fannie falling another 4.49 percent and Freddie sliding 5.01 percent on Tuesday.

...

Fannie's market capitalization is about $6.58 billion. Friedman, Billings & Ramsey Co. analyst Paul Miller estimates Fannie needs to raise between $5 billion and $10 billion in new capital.

But the prospect of government help has been one of the greatest hang-ups in efforts to raise capital from other investors.

http://news.yahoo.com/s/ap/20080820/ap_on_bi_ge/fannie_freddie_capital

http://www.nakedcapitalism.com/2008/08/paulson-playing-chicken-with-markets.html



James Carville, Clinton strategist, said,

I used to think if there was reincarnation, I wanted to come back as the President or the Pope or a .400 baseball hitter, but now I want to come back as the bond market. You can intimidate everybody.

If a politico like Carville recognized the fixed income market as an irresistible force, you'd think a Wall Street pro like Henry Paulson would give it the respect it deserves. But peculiarly, he has been acting as if he can bluster his way through a mushrooming crisis of confidence in Fannie and Freddie.

A Barron's report over the weekend saying that the Treasury would buy GSE preference shares (and wipe out equity holders) if the companies failed to raise new equity sent the shares into a downdraft, with Freddie's falling 25% and Fannie's, 22%, triggering a broader market fall in the US that continued overnight in Tokyo. More troubling, GSE debt also fell, as Accrued Interest reported:

GSE securities of all types getting hit hard today. Interestingly, both the common and preferred shares are down ~20%. Sub debt some 200bps wider with poor liquidity. Even senior paper is 7-8bps wider on the day. MBS look to be only about 4bps wider.

I've heard there has been panicky selling by retail investors in Freddie Mac and Fannie Mae senior notes. One trader told me he's been up to his eyeballs in 100 bond lots today. Haven't heard of aggressive Asian selling, but with zero buying there are clearly net outflows from overseas.

So what reaction did this mini-meltdown elicit from the Administration? The Wall Street Journal tells us:

In early July, a previous plunge in the companies' shares prompted the U.S. Treasury to announce a package of measures aimed at shoring up investor confidence. Among other things, the Treasury said it would lend money to the companies or make equity investments in them if needed.

"As the secretary has said many times, we have no plans on using the authority," Treasury spokeswoman Jennifer Zuccarelli said Monday, referring to Treasury Secretary Henry Paulson.

This is about as lame as it gets. I'm sure a PR pro could do better, but the right response is reassurance from Paulson himself: the markets are on the mend, yes, there may be bumps but things are getting better, we are on the case, will act if necessary but don't see the need, Freddie and Fannie have plans in progress to improve their balance sheets. That probably wouldn't undo what Barron's hath wrought, but it would halt the slide and produce at least a partial reversal. Investors want to hear that the powers that be are engaged and willing to pull the trigger.

What is even worse from the Adminsitration's standpoint is that savvy observers see the bailout plan as a sham. As the Financial Times reports:

The Treasury dismissed the report as “speculation”. It told the Financial Times it still had no intention of using its newly authorised power to invest in either the debt or equity of Fannie and Freddie. The question is whether it may be forced to do so.

The logic of the plan unveiled on July 13 was that the market would be reassured by the Treasury obtaining authority to invest in Fannie and Freddie, reducing the likelihood that the government would actually have to bail them out....

“Hank Paulson’s gamble is that if the Treasury commits to investing in Fannie and Freddie it will never have to put money in,” said Alex Pollock, a fellow at the American Enterprise Institute.

In other words, this was all meant to be a bluff. But the markets have called the bluff in very short order. And given the lousy and certain-not-to-get-better-anytime-soon condition of Freddie and Fannie, this outcome was entirely predictable.

What is ever weirder about the Administration's inept denials is that they seem to be quietly moving forward in examining rescue options. A Wall Street Journal editorial, "When Henry Met Fannie," tells us:

Meantime, Treasury claims it has no plans to inject taxpayer money directly into the companies. Even so, Mr. Paulson has quietly hired Morgan Stanley, the investment bank, to look into "appropriate capital structures" if he does decide to sign the blank check that Congress has given him.

Robert Scully, the Morgan banker who will lead the effort, is by all accounts a straight shooter. And he will need to be, given the enormous political pressure he will soon face from Fannie Mae's defenders, both at Morgan and in Washington. Morgan Stanley says it is forgoing any other investment banking business with Fan and Fred while it works for Treasury. But until recently it was among the banks advising Freddie on that elusive $5.5 billion capital infusion.

Morgan Stanley is also home to Kenneth Posner, one of the biggest Fan and Fred cheerleaders on Wall Street. Only last March, the analyst crowed about the "complete defeat" of the "anti-GSE ideologues" -- that is, the people who had been right all long about the reckless risks the companies were taking. Mr. Posner also predicted that Fannie and Freddie would return to breakeven by the third quarter. Mr. Scully shouldn't be caught in the same intellectual area code as Mr. Posner.

Disclosure: I knew Scully early on in his career. He is indeed as upstanding as they come in investment banking (yes, that is an oxymoron), very well regarded.

So why is Paulson unhelpfully (as far as market confidence is concerned) denying that he will salvage the GSEs, yet moving forward to develop plans to do precisely that? Oh, I forgot. The SIV rescue plan. Hope Now Alliance. Getting China to open its financial markets. Having JP Morgan buy Bear for $2 a share. Execution has not been the Adminstration's or Paulson's strong suit. Why should now be any different?

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=08&year=2008&base_name=fannie_mae_proves_economists_w

There has been an enormous rise in wage inequality over the last three decades. Most economists attribute this increase in inequality to the increased premium that highly valued skills can command in a globalized economy.

Fannie Mae (along with the rest of the financial sector) is working hard to prove these economists wrong. Daniel Mudd, the CEO of Fannie Mae, has earned tens of millions of dollars in this position over the last three years. In exchange for this extraordinary compensation, more than 1000 times what a minimum wage earner pulls down, Mr. Mudd pushed Fannie in bankruptcy. How many minimum wage earners could do that?

The Post gives an inside look at some of Mr. Mudd's incompetence, although it covers up his ineptitude by wrongly describing the decline in house prices. The article reports that Fannie Mae performed stress tests on its portfolio of subprime mortgages and concluded that it faced little risk.

According to the article, the stress tests assumed that house prices would fall by 5 percent for two years. It then asserts that: "the deterioration in home prices has not been as extreme as the hypothetical "stress test" scenario." This is not true, according to the Case-Shiller index, house prices fell by 16.2 percent in the one and three quarters years since prices peaked in the second quarter of 2006 (data for the 2nd quarter of 2008 is not yet available). Price declines have been even sharper for lower priced homes that were likely purchased with the subprime mortgages.

It required extraordinary incompetence not to recognize the housing bubble even in 2007 after prices were already declining. However, according to this article, Fannie Mae was still buying more subprime mortgage backed securities at this point.

Any normal worker would be fired in a second for such incredible incompetence, however Mr. Mudd is still in his job drawing a seven figure salary. Furthermore, no one seems to view this as strange, which suggests that it is common to have people with no skill whatsoever in the very highest paid positions in our economy.

--Dean Baker

SINGAPORE (Reuters) - The worst of the global financial crisis is yet to come and a large U.S. bank will fail in the next few months as the world's biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff said on Tuesday.

...

"We're not just going to see mid-sized banks go under in the next few months, we're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks," said Rogoff, who is an economics professor at Harvard University and was the International Monetary Fund's chief economist from 2001 to 2004.

...

Rogoff's comments come as investors dumped shares of the largest U.S. home funding companies Fannie Mae and Freddie Mac on Monday after a newspaper report said government officials may have no choice but to effectively nationalize the U.S. housing finance titans.

http://news.yahoo.com/s/nm/20080819/bs_nm/usa_banks_crisis_dc

01. Goldman Sachs cuts estimates for big U.S. banks, brokers
8:07 AM ET, Aug 20, 2008

02. Golman Sachs sees Lehman taking up to $3.5 bln writedown

8:07 AM ET, Aug 20, 2008
03. Any recovery looks "a few quarters away" - Goldman Sachs
8:07 AM ET, Aug 20, 2008

04. Banks' CMBS writedowns may intensify in third qtr -
Goldman
8:07 AM ET, Aug 20, 2008

HARTFORD, Conn. - For school bus driver Jamille Aine, a cold is more than an inconvenience. His employer does not offer paid sick days, so if he can't shake the bug, he may not be able to pay his bills.

Some 46 million U.S. workers lack paid sick days, but lawmakers in 12 states — including California, Connecticut, Minnesota and West Virginia — have proposed legislation in the past year that would require businesses to provide them.

Dale Butland of Ohioans for Healthy Families, an advocacy group pushing a November ballot initiative that would require employers to offer paid sick days, said the effort picked up steam in Columbus and other state capitals because federal legislation has stalled.

....

The federal Bureau of Labor Statistics estimates that 43 percent of the private industry labor force worked in 2007 without paid sick time, a group primarily made up of low-paid employees at small businesses.

Workers advocates' have been pushing the issue since 1993, when the Family and Medical Leave Act was signed into law, requiring employers to provide up to 12 weeks of unpaid leave a year. While federal legislation was first proposed in 2004, it may have a shot at passing next year if Democrats control the White House and Congress after the November elections, said the bill's sponsor, Rep. Rosa DeLauro, D-Conn.

http://news.yahoo.com/s/ap/20080820/ap_on_bi_ge/paid_sick_days

http://www.nakedcapitalism.com/2008/08/key-to-happiness-is-freedom-not-income.html


Off and on, usually provoked by the release of a new study, the media will turn to the question of happiness and incomes. While the Wall Street Journal has exhibited a tendency to tout research that shows that the rich are happier, the results are far less clear-cut. Once a certain income level has been reached (typically, enough to provide for a middle class standard of living in that society and allow one to accumulate a cushion for emergencies) more money does not produce much if any gains in happiness. And some findings have been under-reported in the US. For instance, while some studies have found that being in the top income group or having high educational attainment is correlated with higher levels of happiness, living in socially stratified societies leads to less satisfaction across all groups. And remember, Nigeria, hardly a bastion of wealth, has scored as the happiest country in a multi-year international survey.

An article today in the Financial Times suggests that researchers may have been looking at the wrong axis in looking for a strong correlation between income and happiness. Roberto Foa (a researcher in the same international survey mentioned above) contends that freedom is a far more important factor than economic attainment.

If Foa is correct, the post 9/11 surveillance apparatus and restrictions on civil liberties may have a bigger impact than the security-minded might contend. I'll admit to being easily riled, but all sorts of people now seem to feel entitled to make intrusive information requests (for instance, hotel clerks demanding to see photo IDs for rooms that are pre-paid). But only someone who had had a lobotomy could be indifferent to airport security, (particularly when they abuse their authority). And the right to assemble and present one's views, even in passive ways like wearing T-shirts with wrong message, is under attack.

And don't kid yourself that they aren't watching. Your humble blogger got an e-mail from the Department of State inviting me to participate in a webcast (on the economics of Colombia, of all things). The fact that the Department of State (and who knows who else) is monitoring bloggers is scary (I suppose I had naively hoped there were so many that we were all part of a crowd).

From the Financial Times:

In recent years, a small army of happiness gurus has lined up to proclaim the ills of modern society, and its failure to make us feel better. We have more money, say some, but family life has eroded. We live longer, but crime has risen. Some have even blamed affluence itself, arguing that the dizzying range of lifestyle options that we now confront frustrates the pursuit of happiness.

Yet contrary to the assertions of pessimists, newly released data, recently published in an article with colleagues from Jacobs University Bremen and the University of Michigan, shows that today’s world is a happier one. From 1981 to the present, more than 350,000 people from 90 countries were asked about their happiness and their satisfaction with life as a whole...

How is it that the world is getting happier? In the words of Thucydides, the secret of happiness is freedom. In each survey respondents were also asked to rate their sense of free choice in life. In all but three countries where perceived freedom rose, subjective well-being rose also. A chart, produced by the authors, shows how these increases in free choice and subjective well-being are strikingly related.

The world in which we live today is unquestionably a free one. For the first time in history, most of the world is governed democratically, the rights of women and minorities are widely acknowledged, and people, ideas and investment can cross borders. Since the study began in 1981, dozens of middle-income countries have democratised, relieving many from fear of repression: every country making a transition from authoritarian rule to democracy shows a rising sense of free choice. In addition, there has been a sharp rise in the acceptance of gender equality and alternative lifestyles. Countries where this revolution has been most pronounced, such as Canada and Sweden, continue to show rising well-being.

Arguably, no region has experienced this transformation as rapidly as eastern Europe. In the space of two decades, several countries that were members of the Soviet bloc have become members of the European Union, with new freedoms to travel, work and live as never before imaginable. Not only has the proportion claiming to be “very happy” risen in every country except Serbia and Belarus, but this trend has been wholly driven by the younger generation. Among eastern Europeans aged 15-24, the proportion saying they were “very happy” was 9 per cent at the start of the 1990s, roughly the same as in other age groups. By 2006, this proportion had more than doubled, and steady rises were also evident among those in their 30s and 40s. Country after country in the study...exhibits this trend.....

So if the world is becoming happier, what are the implications? First, that the expansion of political and social freedoms over the past quarter of a century is vindicated...

Second, the results may engender caution towards attempts to engineer happiness through public policy. The happy countries include social democracies such as Sweden and Denmark, and more laisser faire economies such as Australia and the US. What they have in common are not their policies but institutions: democracy, rule of law and social tolerance. People are largely capable of engineering their own happiness when given the means to do so.

Third, the link from free choice to rising happiness suggests that the appropriate benchmark of development is not income per capita, but individual freedoms and capabilities. This is the human development perspective associated with Amartya Sen, the Nobel laureate. While income and well-being are closely correlated at early stages of development, once the threat of starvation recedes, social and political freedom appears to be as important.

Though the past 25 years have brought a happier world, there is no certainty that the next 25 will continue to do so. Many low and middle-income countries have experienced exceptionally high rates of growth, ranging from 4 to 11 per cent, while richer countries have undergone falling work hours and social liberation. There is no guarantee that either will persist indefinitely.

Meanwhile democratisation is a one-shot occurrence, and the collapse of communism is in the past. Today, there are as many countries that appear to be sliding into soft authoritarianism and state failure as there are countries that are becoming consolidated democratic cultures, while the future of the global economic order is itself in jeopardy. It would be a huge irony if the benefits of liberal institutions for human happiness were to become evident precisely at the moment when those gains are most at risk.

Note that Foa suggested that international mobility, meaning both freedom to travel and ability to relocate, are part of the happiness equation, and both are becoming more rather than less restricted.

travel, takes more money than it used to, & the range of things you can do without money shrinks.

pap to prepare people for losing buying power.

and a dollar that holds its value. Thanks to Bush, we have neither.

Without money, it's the "comfort" level that shrinks.

Case in point: the spousal unit and I took our honeymoon in Italy. While claiming that one day we'd travel to Florence together, I always assumed that meant we were going to South Carolina for a spell.

We eloped, as a formal wedding after living together for 10 years prior seemed.... (insert adjective of choice here), flew over on the least expensive flight to England we could get, took puddle jumpers and trains and worked our way down Europe.

We stayed in a hotel rated as an "artist" hotel. Which means it was cold, drafty, the windows didn't close and the shutters didn't keep out the noise and pollution from the Vespas on the cobblestone streets (which would be called alleys in America)which zoomed around til the wee hours and bath facilities were commonly shared.

Cats prowl around the tile roofs and "sing" to each other quite heartily.

We only ate lunch as a proper meal, with breakfast being fruit, nuts and other dried goods in our room, espresso from the little cafe across the street and dinner being some combination of fresh market goods and world market tinned goods, also in our room.

Basically we were 40 year olds living like 20 year olds. But we got to be friends with the hotel manager and his wife who were our age, we saw some great art, I caught a wicked cold and all told for 10 days in Florence we spent less than 2 thousand dollars on all travel, food, lodging and sightseeing.

If we were striving to be hyper budget-conscious, I probably could've pared that down by 50%.

If you want comfort along with your travel, it does cost. And as we get "ripe" we tend to bruise quite easily. Then comfort comes to seem like a necessity rather than a luxury.

My point is, nothing is free. Ever. Even if you don't pay money for it.

I have a garden. I'm in the process of collecting seeds from last year to plant next year. Next year, I'll plant and harvest vegetables, cook, can and eat them.

No money involved. But hours and hours of seriously back busting labor: prepping beds, weeding, mulching, transplanting, gathering, prepping, cleaning utensils, watching the pressure cooker so it doesn't explode, fixing the meals and so on. Some days the next day work hangover makes getting out of bed questionable.

All that time, I could be "gainfully" employed. Making $$$. So choosing this route is not only "not free", from a PURELY economic standpoint, it's costing me a whole hell of a lot of money.

But then again if I was "gainfully" employed full time, Prozac, metric tonnes of beer and ulcer treatments get pricey PDQ. Either way, in the end, I'm beat to Hell, with no real "gain" to show for it.

So in the end it's a wash. Best to concentrate on the things we really have control over.

Huxley:"I wanted to change the world-but I found that the only thing one can be sure of changing is oneself."

the most basic things, cost money; now they cost more money than they used to, & the range of things that cost money is expanding, while the range of things that don't cost is shrinking:

that is, I can't just go down to a vacant lot & build myself a little shack, though I'm quite capable of finding scrap materials & building something with about 3 months' work. Regardless, I have to spend $70K & up...more than the median US wage.

This is why the more developed the country, the lower the % of home ownership. True fact.

I don't make the mistake of conflating money with labor under the heading of cost. Nothing's "free," in that sense -

But money isn't labor.

NEW YORK (Reuters) - Lehman Brothers is considering selling at least a portion of its asset management unit, one of its best-performing assets, which should signal to investors that more write-downs or losses are looming.

Investors are clearly bracing for more pain at Lehman: the fourth-largest investment bank's shares trade at less than half their book value, implying that the company's assets are likely to be marked down or sold at a loss.

That in turn will likely force the bank to raise capital in some form, be it by issuing securities or selling valuable assets, analysts said.

...

It's fairly obvious which assets may trigger write-downs: Lehman has more than $60 billion of mortgage and mortgage security exposure, where losses are creeping higher even on loans to the highest quality borrowers.

http://www.reuters.com/article/hedgeFundsNews/idUSARO03329520080820

http://www.creditslips.org/creditslips/2008/08/debt-free-an-un.html

A Vice-President at Dickinson College complained about the move by wealthier schools to eliminate student loans as part of the aid package, arguing that such a move creates the "unrealistic expectation that students should graduate debt-free." He points out that people borrow for cars and homes, and that education is just like any other big-ticket purchase. In effect, rich people can buy it for cash and those with less money should finance it over time.

If education is like a Hummer--cash or credit--then why stop with college? Why not shut down the public schools K-12, and let those whose parents want them to learn to read and write pay cash or take on loans? (Maybe we're heading that way with failing schools in some cities.)

n thWe support public schools with tax dollars because we believe we'll all be better off if more people learn to read and write--even for those of us who don't have children in the public schools. Why isn't the same true for college?

The GI Bill helped 2.2 million returning soldiers become engineers, scientists, entrepreneurs, and business leaders, fueling the economy and raising the standard of living. It cost $7 billion (about $240 billion in today’s dollars), but for every dollar invested, nearly five dollars were returned over thirty-five years in higher productivity and tax revenues. We all benefit when a smart person gets a good education.

Undergraduate borrowers leave school with an average of $20,000 in debt, and average graduate borrowers owe $45,000. Defaulted student loans now top five million. Debt now affects career choices, purchasing decisions (can you afford health insurance, a car or a home?) and even the decision to marry.

My coauthor Ganesh Sitaramen and I have worked on a proposal called Service Pays. We think the federal government should make money available to pay the equivalent of four years of college at a state school (money could be used at a state or private school). For every year after graduation that a student spends in public service (military, Peace Corp, Teach for America, etc.), a year of debts would be erased. Four years of service would pay off four years of college--a sort of reverse GI bill.

This isn't a gift--it's there only for those who want to work in public service. But for anyone who wants to work, regardless of family income, the option to pay for college through service is available.

But our proposal starts from the premise that education is not like a Hummer. It presupposes that we're all better off if young people have access to education. And it assumes that starting adult life deep in a hole of debt is not a good idea. I realize those are pretty controversial ideas in some circles.

The colleges that are moving away from debt believe that those who need aid should get outright gifts, not big debt loads. Of course, many of the schools moving in this direction have big endowments (Harvard, Yale, Princeton). But some schools of more modest means have moved in this direction too (Swarthmore, Bowdoin, Colby). Other schools might like to make their aid packages debt-free, but they are simply too constrained financially. Ganesh and I want to develop a way for students to help pay for their educations without taking on debt.

But the Dickinson VP advances a contrary thought: It isn't right to make college available at lower or no cost to students with less money. Instead, they should expect to take on debt. For some, paying for an education is like buying a fancy car.

MANY INTERESTING COMMENTS FOLLOW THIS ARTICLE SEE LINK

that it wouldn't be long before people would need a 2nd job to pay for gas so they can get to their first job

pump prices may be coming down a bit, but the overall effect is trickling down on everything else

I've started on a search for a 2nd job (nights/weekends) so I can pay for gas to get to my first job

We keep coins in a jar. Occasionally, this currency is used to buy gas to drive to work. As so-called "middle class" as we are, this is a new convention to our notion of being so. Our notion of what middle class was formed from growing up in the '60s and '70s on this economic rung.

http://www.nakedcapitalism.com/2007/03/what-is-greenspan-up-to-part-2.html




...It is singularly odd (one might even say out of line) for a former Fed chairman to intrude on the turf of the current Fed chief. So why is Greenspan making predictions about the US economy, ones that seem to be at odds (at least in tone) with Bernanke's?

I cited Dean Baker's theory, which was that Greenspan was trying to position the coming recession as an inevitable end of a cycle, rather than the result of the housing bubble he helped create coming to an ugly end.

It may simply be that Greenspan has an insatiable appetite for the limelight. Or as others have speculated, his remarks may be financially motivated. He gets paid very large amounts of money to speak, plus he has a book coming out. Never hurts for someone like him to maintain profile, right?

But this second go at Bernanke seems almost pathological. In a Bloomberg interview, he clearly feels free to make comments about the economy, even though his status as former Fed chairman means they will be treated more seriously than perhaps they should be (remember, the Fed has access to lots of information from its member banks that isn't public). And in an interview with a news service he talks about seeking anonymity!

It was Clinton that made it acceptable for former top level government officials to take highly-paid public speaking gigs and seven figure book advances. Before that, former presidents never did anything so, ahem, common. Even people like Kissinger, who did maintain his profile, did so discreetly, by sitting on a few corporate boards, doing very highly level consulting, and speaking very selectively.

Similarly, Paul Volcker, who undertook a considerable financial sacrifice to stay at the Fed until he was satisfied inflation was under control (it was widely known that his wife was terribly ill and he was having trouble paying for her treatments on his salary) did not hurry to sell his services to the highest bidder once he left the Fed. And he never commented on the economy, the banking system, or Fed policies after he left office. The contrast between his behavior and Greenspan's couldn't be starker....

non violently, of course

Men of his age do get them. So in terms of Karma, you might be like the guy in the firing squad who gets the blank.

a benign enlarged prostate. Dribbling all the time, unable to sleep though the night-like most of the middle class (but for different reasons of course). And how 'bout tossing in some ED. Hell we feel impotent-so should he.

On second thought, she probably already does.

:spray:

saving a pile of dog shit to take and dump on his grave

:evilgrin:

This is not true:



Saint Ronnie Reagan, in October 1989, charged $2 million in fees to speak in Japan.

He took a lot of criticism for that.

He also took the money.

HONG KONG (Reuters) - Most Asian stock markets edged higher on Wednesday, rebounding from a two-year low as Chinese shares surged on hopes for policies from Beijing to jumpstart growth, though many analysts said it was a long shot.

The dollar struggled as crude oil crept above $115 a barrel and gold prices edged higher, taking some of the steam out of the U.S. currency's recent surge to a seven-month high.

World stock markets slid to the lowest since September 2006 on Tuesday, with investors increasingly skeptical about earnings expectations for 2009 given the mixed results so far in 2008 and constant reminders about instability in the financial sector.

However, most Asian indexes turned higher as cheap valuations proved irresistible, especially with markets rife with chatter about fiscal stimulus in China.

"Bargain hunters have returned to the market on talks that a rescue package is on the way," said Francis Lun, general manager from Fulbright Securities in Hong Kong. "We are all waiting for a miracle," Lun added.

Hong Kong's Hang Seng index (HKSE:^HSI - News) rose 1.9 percent, after closing at a one-year low on Tuesday, with shares of China Mobile (HKSE:0941.HK - News) providing the biggest boost.

Shares of Asia's largest wireless carrier, up 2 percent, hit a one-year low before the rally swept through the region.

The Shanghai composite index (^SSEC - News) surged 6 percent after touching a 20-month low. The index is watched by many global investors as a gauge of risk taking and a leading indicator for the world's fastest growing economy.

The MSCI pan-Asia equities index (^MIAS00000PUS - News) edged up 0.3 percent after earlier plumbing the lowest since July 2006.

The MSCI all-countries world index (^MIWD00000PUS - News) on Tuesday tumbled to a 23-month low, down 18 percent year-to-date.

Japan's Nikkei share average (Osaka:^N225 - News) rose 0.2 percent, tagging along for the rally, with retail companies like clothing chain operator Fast Retailing Co Ltd (Tokyo:9983.T - News) paving the way higher.

TOO EARLY FOR FISCAL STIMULUS IN CHINA?

Despite the sudden turnaround in Asian stocks, apprehension about the earnings outlook was rife, especially after the Bank of Japan on Tuesday described the world's second-largest economy as "sluggish" -- a term it has not used since the Asian financial crisis a decade ago.

Donald Straszheim, vice chairman of Roth Capital Partners in Los Angeles and a long-time China analyst, said the Chinese stock market, the worst performer this year, will continue to fall because of the toxic concoction of slowing growth and high inflation.

He expects earnings to rise 15 percent in China this year, down quite sharply from 30 percent to 45 percent pace enjoyed by most sectors in 2006 and 2007.

"Shanghai has proven to be a very emotional market, and is likely to stay that way," said Straszheim in a note to clients.

/... http://biz.yahoo.com/rb/080820/markets_global.html?.v=2

Beijing - China's government is considering spending up to 400 billion yuan (about R450 billion) to stimulate the economy and may ease monetary policy this year, according to Frank Gong, the head of China research at JPMorgan Chase.

The possible stimulus package would be equivalent to more than 1 percent of gross domestic product (GDP).

"This will include tax cuts and measures to 'stabilise domestic capital markets' and support 'healthy development of the housing market'," said Gong, who correctly predicted in 2005 that China would scrap the yuan's peg to the dollar.

Since last month Chinese policy makers have put extra emphasis on sustaining growth rather than cooling inflation as the outlook for exports dims. Economic expansion has cooled for four quarters and industrial output grew last month at the slowest pace in a year and a half.

"The top leadership is carefully considering an economic stimulus package," Gong said.

He did not cite a source and would not comment further when telephoned.

/... http://www.busrep.co.za/index.php?fArticleId=4567199&fSectionId=613&fSetId=662

SHANGHAI (AFP) - China's vice premier, a rising political star, has said the country has no other choice but to boost domestic demand in order to sustain growth amid global economic weakness, state media reported.

The authorities must increase household income and expand rural consumption to fuel more spending at home, the Xinhua news agency reported late Tuesday, citing Vice Premier Li Keqiang.

"Boosting domestic demand is essential for propping up growth," Li was quoted as saying, while visiting the north Chinese city of Tianjin.

"It is an urgent need as we tackle changes in the international economic situation as well."

Li, seen by many as a likely candidate to become premier in 2013, reaffirmed the stance of policy-makers that maintaining stable and rapid economic growth and keeping inflation in check are top economic priorities.

Economic growth in China slowed to 10.4 percent in the first half from 11.9 percent for all of 2007, raising concerns that weakened export growth could lead to an abrupt economic slowdown.

China's trade surplus declined 9.6 percent in the first seven months of this year from the same period in 2007.

Keeping up robust growth is seen as a vital policy objective in Beijing. The government is eager to create enough jobs to keep unemployment down and prevent social unrest.

/. http://www.afp.com/english/news/stories/newsmlmmd.3d52474047daadcc53dac4dad287a0ab.531.html

8/19/08 Parrett’s disappearance kept rumor mill alive amid NCFE sentencings by Kevin Kemper

Still missing after more than four months on the lam, Rebecca Parrett’s legal appeals are being put on hold while speculation circulates over her whereabouts.

Parrett was one of five executives convicted this year in a multibillion-dollar fraud linked to the 2002 collapse of National Century Financial Enterprises Inc., the Dublin company she co-founded. Parrett, 58, was considered part of the leadership cabal at the company and was convicted on fraud, money laundering and securities fraud charges. She is facing up to 75 years in prison on those charges.

But shortly after returning to her home in Arizona to await sentencing, Parrett went missing. Since her late March disappearance, U.S. marshals have been chasing down “several dozen” tips from strangers and acquaintances, said Deputy U.S. Marshal Drew Shadwick, who is in charge of the investigation.

Through a mistake in the system, Parrett was never fitted for a monitoring device after she was allowed to go home.

News about Parrett has been scarce, and in the absence of facts, it appears fiction has begun to circulate.

During the sentencings of Parrett’s co-defendants this month in Columbus, legal observers talked about what they have heard through the grapevine. One suggested Parrett’s minivan was found. Another said authorities discovered a corpse that might have been Parrett.

Another theory suggested someone saw Parrett in Aruba and snapped her photo with a cell phone.

“We’ve had some stranger (identifications),” Shadwick said. “People send pictures thinking it’s her.”

Part of that may be due to the publicity surrounding Parrett’s disappearance. The television show America’s Most Wanted features Parrett on its Web site and it aired a segment about her in June.

The site claims her aliases include Rebecca Green, Rebecca Kunzi, Rebecca House, Rebecca Robinson, Rebecca Ayers and Rebecca Mayes.

Adding fuel to the rumor fire was the accusation that Parrett’s four co-conspirators were accused in April of plotting an escape to Aruba.

Three of the former executives, Donald Ayers, Randolph Speer and Roger Faulkenberry, were jailed until their sentencings as a precaution. Co-defendant James Dierker was allowed by U.S. District Court Judge Algenon Marbley to remain under house arrest after friends, family and coworkers sent letters attesting to his character.

In addition to the jail time she is facing on her convictions, Parrett could expect to face up to 15 additional years for disappearing, said Assistant U.S. Attorney Douglas Squires.

“Her flight would be considered in fashioning a sentence, as well as potential new charges for bail jumping,” said Squires, who prosecuted the National Century executives.

By comparison, a jury found Ayers, who is Parrett’s ex-husband, guilty on nearly identical charges as Parrett. He was sentenced to 15 years in prison.

The government didn’t sentence Parrett despite her absence because federal law allows convicts to seek leniency before sentencing, said Gregory Peterson, Parrett’s attorney.

Peterson said he’s had no contact from Parrett since shortly after the trial. After she disappeared, he stopped filing legal arguments on her behalf.

“Everything with respect to her has been stayed, like a time out,” he said.

Peterson told Marbley after Parrett’s conviction that she had no money left after paying her legal fees, but government agents think Parrett has access to wealth thanks to her time at National Century, where the fraud took nearly $2 billion from investors.

If that’s the case, Parrett has no reason to turn herself in, said Lois Colley, a private investigator who runs Colley Intelligence International in Columbus.

“She doesn’t have anything to give to the government unless she knows where some of the money is buried,” said the law enforcement veteran. “But the government is not usually interested in bargaining.”

http://columbus.bizjournals.com/columbus/stories/2008/08/18/story16.html?b=1219032000%5E1685646


link backwards to previous articles...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3429097&mesg_id=3429143
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3429097&mesg_id=3430093

She's a defendant, not a witness.

I knew a mobster who skipped out and was a fugitive for 2 years. They made a big show of when he turned himself in at his mothers grave, and even locked him up.

It turned out, that he'd been living with the FBI for the whole time. Even while the US Marshalls were looking for him.

I just can't see anybody in this government wanting a real, live witness, to anything, if you catch my drift....

PARIS, Aug 20 (Reuters) - European shares rose in early trade on Wednesday, recouping some of the losses from the previous session as commodity-related stocks bounced back along with oil and metal prices.

At 0714 GMT, the FTSEurofirst 300 index of top European shares was up 0.5 percent at 1,165.30 points. Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) added 3.4 percent, Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) gained 3.7 percent and BP (BP.L: Quote, Profile, Research, Stock Buzz) rose 1.4 percent.

...

"The sharp drop in commodity prices since mid-July seems to have been priced in now. In the best case, the market is moving sideways, with a negative touch."

/.. http://www.reuters.com/article/marketsNews/idCALK57767320080820?rpc=611

LONDON, Aug 20 (Reuters) - The FTSE 100 .FTSE rose by 0.5 percent early on Wednesday, after heavy losses in the previous session, as commodities tracked higher crude and metal prices, and investors banked on sustained Chinese economic growth.

At 0737 GMT, Britain's benchmark index was up 23.8 points, or 0.5 percent, at 5,344.2 after falling 2.4 percent on Tuesday.

...

Positive Asian sentiment and rising precious metal prices helped buoy miners, while oils were boosted by U.S. crude CLc1 climbing to almost $115 a barrel.

BP (BP.L: Quote, Profile, Research, Stock Buzz), Tullow Oil (TLW.L: Quote, Profile, Research, Stock Buzz), BG Group (BG.L: Quote, Profile, Research, Stock Buzz) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) climbed 1.4-6.3 percent. UBS raised Tullow Oil's valuation rating to "buy" from "neutral".

Miners Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz), Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz), Kazakhmys (KAZ.L: Quote, Profile, Research, Stock Buzz) and Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz) rose 1.1-4 percent.

"It seems to be the same sort of suspects," Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers. "Bit of strength from the mining stocks...in the oils as well. There is also something on the Asian front."

"There were concerns that after the Olympic games some of the Chinese economy might start to drop off the cliff slightly but it looks very much like that isn't going to be the case." "Underneath all that, trading volumes are very thin. The market is reasonably directionless, so you do get those slight swings in volatility."

...

Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) slipped 3.9 percent after President Bob Diamond said the bank would consider buying a U.S. wealth management company but was highly unlikely to bid for an investment bank, the Financial Times reported.

The bank was also among several stocks on the downside to trade ex-dividend and take 15.8 points off the index. Others included BT Group (BT.L: Quote, Profile, Research, Stock Buzz), HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz), Pearson (PSON.L: Quote, Profile, Research, Stock Buzz) and Scottish & Southern Energy (SSE.L: Quote, Profile, Research, Stock Buzz).

...

BAE Systems (BAES.L: Quote, Profile, Research, Stock Buzz) lost 0.2 percent after the Times reported that the UK defence ministry had agreed a 2 billion pound contract to secure the future of Royal Ordnance, which is owned by Europe's biggest defence company.

/... http://www.reuters.com/article/marketsNews/idCALK6927020080820?rpc=611&sp=true

PARIS, Aug 20 (Reuters) - European shares rose in early trade on Wednesday, recouping some of the losses from the previous session as commodity-related stocks bounced back along with oil and metal prices.

At 0810 GMT, the FTSEurofirst 300 index of top European shares was up 0.5 percent at 1,164.97 points. Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) added 5.1 percent, Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) gained 3.8 percent and BP (BP.L: Quote, Profile, Research, Stock Buzz) rose 1.5 percent.

Oil prices edged up to above $115 a barrel while copper and aluminium prices rose, as a lower U.S. dollar rekindled buying in commodities.

Tech shares got a boost from Hewlett-Packard (HPQ.N: Quote, Profile, Research, Stock Buzz) results that beat estimates overnight and from a deal announced by STMicroelectronics (STM.PA: Quote, Profile, Research, Stock Buzz) and Ericsson (ERICb.ST: Quote, Profile, Research, Stock Buzz) to combine their chip and mobile applications businesses.

...

The FTSEurofirst 300 sank 2.5 percent on Tuesday, ending at its lowest closing level in two weeks, hit by renewed credit and inflation jitters.

The benchmark index has lost 23 percent so far this year, hit by recession fears, as well as worries over inflation and the impact of the credit crisis on banks' balance sheets.

Shares in Wall Street firm Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) tumbled 13 percent on Wall Street overnight after JPMorgan Securities forecast that the investment bank will take a further $4 billion in writedowns tied to losses on mortgage-related investments.

Goldman Sachs slashed its earnings outlooks for five major rivals, citing mounting writedowns on mortgages, a slowdown in overall activity and legal expenses.

European banks were mixed on Wednesday after suffering sharp losses in the previous session. The DJ Stoxx bank index is down 33 percent year-to-date.

Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) was down 2.5 percent, while UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) was up 2.4 percent.

"The banking system needs to continue rationalisation, and we will see some mergers under pressure as there's not enough business around for the banks," said Justin Urquhart Stewart, investment director at Seven Investment management.

Around Europe, Germany's DAX index .GDAXI was up 0.5 percent, UK's FTSE 100 index .FTSE up 0.8 percent and France's CAC 40 .FCHI up 0.6 percent.

So far this year, the DAX is down 22 percent, the FTSE 100 is down 17 percent and the CAC is down 22 percent.

/... http://www.reuters.com/article/marketsNews/idCALK9584120080820?rpc=611&sp=true

http://www.nytimes.com/2008/08/18/nyregion/18windmills.html?_r=2&hp&oref=slogin&oref=slogin



By NICHOLAS CONFESSORE

...Lured by state subsidies and buoyed by high oil prices, the wind industry has arrived in force in upstate New York, promising to bring jobs, tax revenue and cutting-edge energy to the long-struggling region. But in town after town, some residents say, the companies have delivered something else: an epidemic of corruption and intimidation, as they rush to acquire enough land to make the wind farms a reality.

“It really is renewable energy gone wrong,” said the Franklin County district attorney, Derek P. Champagne, who began a criminal inquiry into the Burke Town Board last spring and was quickly inundated with complaints from all over the state about the wind companies. Attorney General Andrew M. Cuomo agreed this year to take over the investigation.

“It’s a modern-day gold rush,” Mr. Champagne said.

Mr. Cuomo is investigating whether wind companies improperly influenced local officials to get permission to build wind towers, as well as whether different companies colluded to divide up territory and avoid bidding against one another for the same land.

The industry appears to be shying away from trying to erect the wind farms in more affluent areas downstate, even where the wind is plentiful, like Long Island.

But in the small towns near the Canadian border, families and friendships have been riven by feuds over the lease options, which can be worth tens of thousands of dollars a year in towns where the median household income may hover around $30,000. Rumors circulate about neighbors who can suddenly afford new tractors or trucks. Opponents of the wind towers even say they have received threats; one local activist said that on two occasions, she had found her windshield bashed in...But corruption is a major concern. In at least 12 counties, Mr. Champagne said, evidence has surfaced about possible conflicts of interest or improper influence.

In Prattsburgh, N.Y., a Finger Lakes community, the town supervisor cast the deciding vote allowing private land to be condemned to make way for a wind farm there, even after acknowledging that he had accepted real estate commissions on at least one land deal involving the farm’s developer.

A town official in Bellmont, near Burke, took a job with a wind company after helping shepherd through a zoning law to permit and regulate the towers, according to local residents. And in Brandon, N.Y., nearby, the town supervisor told Mr. Champagne that after a meeting during which he proposed a moratorium on wind towers, he had been invited to pick up a gift from the back seat of a wind company representative’s car.

When the supervisor, Michael R. Lawrence, looked inside, according to his complaint to Mr. Champagne, he saw two company polo shirts and a leather pouch that he suspected contained cash.

When Mr. Lawrence asked whether the pouch was part of the gift, the representative replied, “That’s up to you,” according to the complaint.

Last month, Mr. Cuomo subpoenaed two wind companies, Noble Environmental Power, based in Connecticut, and First Wind, based in Massachusetts, seeking a broad range of documents. Both companies say they are cooperating with the attorney general...

The industry’s interest in New York’s North Country is driven by several factors. The area is mostly rural, with thousands of acres of farmland near existing energy transmission lines. Moreover, under a program begun in 2004, the state is entering into contracts to buy renewable energy credits, effectively subsidizing wind power until it can compete against power produced more cheaply from coal or natural gas.

Nine large-scale wind farms housing 451 towers, each with a turbine, are in operation in New York, with at least 840 more towers slated for construction, according to state officials. And in June, Iberdrola S.A., which is based in Spain and is one of the world’s largest energy producers, announced its proposal to invest $2 billion to build hundreds more towers here.

Every day in the North Country during the warm months, trucks pulling giant flatbed trailers rumble down the highways, carrying tower sections and turbine blades. Some residents see the trucks not as a disturbance, but as an omen of jobs, money and cleaner air...

The North Country is a chronically distressed region, and farming is increasingly a profitless enterprise here. The General Motors plant in Massena, for years a reliable source of good jobs, is closing in mid-2009. One of the few bright spots in the local economy in recent decades has been the construction of state prisons, of which there are now five in Franklin County alone.

“You’re talking about a poor farming community out here,” said Brent A. Trombly, a former town supervisor of Ellenburg, which approved a law to allow and establish regulations for the wind towers in 2003. “Our only natural resources are stone and wind.” For some farmers, he said, the wind leases were their last chance to hold onto land that had been in the family for generations. Supporters also say that the wind towers bring in badly needed tax revenue...

The local debates over wind power are driven in a part by a vacuum at the state level. There is no state law governing where wind turbines can be built or how big they can be. That leaves it up to town officials, working part time and on advice from outside lawyers, some of whom may have conflicts of their own.

Two Franklin County towns, Brandon and Malone, have passed laws banning the wind turbines. But the issue remains unresolved in Burke, population 1,451, where two Town Board members recused themselves from the issue this year because they had leases with wind companies, leaving the board deadlocked.

STUNNING GOOD JOURNALISM--OF COURSE, IT'S LOCAL TO THE NYTIMES...

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

Last trade 77.093 Change +0.338 (+0.44%)

2008 US Election and Quadrupling The Inflation Tax

http://www.safehaven.com/article-10989.htm

Overview

US presidential candidate Barack Obama has proposed increasing the capital gains tax from 15% to 25%. Unfortunately, the biggest component of investment taxes during inflationary times is not taxation of economic income, but taxation of the government's destruction of the value of its own currency. As we will explore in the article below, the 1-2 combination of higher inflation and higher investment taxes may mean a quadrupling of the effective real tax rate in 2009. This will have the effect of turning the capital gains tax into an effective asset tax, where all real economic earnings plus a percentage of investment principal are taken through taxation - unless investors take self-defense measures.

Please note that this is a nonpartisan article about finance and economics, with no political judgments made, and with implications that go far beyond just the United States. The heart of the problem for the coming years is the bipartisan problem of impossible promises that the United States government has made for Social Security and Medicare - promises with equivalents that are even more impossible in many other developed nations. At some time over the coming years, regardless of who is elected, either:

a) Taxes must climb to confiscatory levels; or

b) Promises to retirees must increasingly be broken; or

c) The currency must be destroyed (through monetizing the deficits without sufficiently raising taxes), or

d) All of the above

The Essence of Inflation Taxes

The essence of inflation is that the value of the dollar (and other currencies) is worth less every year. To keep the same net worth means that you have to earn enough money that year to offset the loss in purchasing power of your investment. Briefly, if you have a $100,000 investment, and inflation takes 10% of your purchasing power, then at the end of the year, your $100,000 will only buy $90,000 worth of goods and services.

$100,000 - $10,000 inflation loss = $90,000 purchasing power

To break-even then, you must earn $10,000.

$100,000 - $10,000 inflation loss +10,000 earnings =

$100,000 purchasing power

To achieve a real profit - you must earn more. So that if you want to come out ahead by $4,000, then you have to earn $14,000 instead of $10,000, to compensate for your (very real) inflation loss.

$100,000 - $10,000 inflation loss +$14,000 real earnings =

$104,000 purchasing power

...more...

Merrill and J.P. Morgan hint at the scale of coming damage

http://www.marketwatch.com/news/story/jp-morgan-disappearing-profit/story.aspx?guid=%7BA1F91885%2DA9A0%2D493C%2D98A1%2D96331E81652D%7D

NEW YORK (MarketWatch) -- Big deal: the other day, J.P. Morgan Chase & Co. filed its quarterly report with the Securities and Exchange Commission.

Nothing unusual in that. The bank had already done the dirty work by announcing its second-quarter results on July 17. And in that report, everything was looking up. J.P. Morgan had a $2 billion profit to show. The only apparent downer was the $500 million in charges taken for the acquisition of Bear Stearns Cos.

So Monday's filing really wasn't much more than making it all official. Generally, 10Q's are just the numbers with the legal stuff thrown in. Sure, between the time when results are announced and when the filing is made, things can change. It happens, but when it does, it's generally a surprise.

You probably know by now that J.P. Morgan's 10Q did include one of those surprises. Slipped in on page 10 of the report was a disclosure that its investment banking arm held some collateralized debt that had lost about $1.5 billion in value since the end of the quarter.

J.P. Morgan tells me that they weren't trying to hide anything. They say it was at the top of the filing and those filings are highly scrutinized. Maybe so. On the other hand, they didn't give this the fanfare the second-quarter profit received: press releases and conference calls.

In other words, it took about a month, maybe less, for J.P. Morgan to lose about 75% of its second quarter profit.

It doesn't get much worse, or does it? J.P. Morgan, a bank many -- including me -- thought had weathered the banking crisis and moved on, said it could get worse and may be worse already because the investment bank still had a $19.5 billion exposure in Alt-A mortgages, $1.9 billion in subprime mortgage exposure and an $11.6 billion exposure in commercial mortgage-backed securities.
For these securities, though hedged, "the trading conditions have substantially deteriorated," the bank said.

...more...

Let's get some more of that!

Stocks Edge Higher After Hewlett-Packard Report

Stocks are up modestly after an upbeat profit report from Hewlett-Packard Co. offered investors some reassurance about the economy.

Looks like the power of Bullshit doesn't buy you very much time these days.

About 13 minutes.

Dow now -45.

So to be clear class, despite the Credit Crisis, and the news all over the place that a Major Bank *cough* Washington Mutual *Cough* *Cough* Wachovia *Cough* *Cough* would likely fail in the next few months, we can all go back to sleep because HEWLETT PACKARD HAS SAVED THE ECONOMY.

Carly Fiorina will be flying over your house soon dumping toilet paper, um, I mean dollar bills from helicopters to all faithful believers who have stayed true to the Perception!

Plasma's For Everyone!

:crazy:

Highlights

Current:



30-day and 90-day vs.greenback:



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




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

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

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

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

2008-07-09 Wednesday, July 9 0.989315 USD
2008-07-10 Thursday, July 10 0.989805 USD
2008-07-11 Friday, July 11 0.990786 USD
2008-07-14 Monday, July 14 0.994036 USD
2008-07-15 Tuesday, July 15 0.998502 USD
2008-07-16 Wednesday, July 16 0.998004 USD
2008-07-17 Thursday, July 17 0.998203 USD
2008-07-18 Friday, July 18 0.994728 USD
2008-07-21 Monday, July 21 0.998104 USD
2008-07-22 Tuesday, July 22 0.991768 USD
2008-07-23 Wednesday, July 23 0.991277 USD
2008-07-24 Thursday, July 24 0.988728 USD
2008-07-25 Friday, July 25 0.983574 USD
2008-07-28 Monday, July 28 0.978474 USD
2008-07-29 Tuesday, July 29 0.974659 USD
2008-07-30 Wednesday, July 30 0.976562 USD
2008-07-31 Thursday, July 31 0.974564 USD
2008-08-01 Friday, August 1 0.975515 USD
2008-08-04 Monday, August 4 0.965717 USD
2008-08-05 Tuesday, August 5 0.959233 USD
2008-08-06 Wednesday, August 6 0.95511 USD
2008-08-07 Thursday, August 7 0.951475 USD
2008-08-08 Friday, August 8 0.936593 USD
2008-08-11 Monday, August 11 0.936944 USD
2008-08-12 Tuesday, August 12 0.939761 USD
2008-08-13 Wednesday, August 13 0.938262 USD
2008-08-14 Thursday, August 14 0.941531 USD
2008-08-15 Friday, August 15 0.942596 USD
2008-08-18 Monday, August 18 0.943129 USD
2008-08-19 Tuesday, August 19 0.942863 USD

Current values

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

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9408 0.9438 0.9408 0.9436 +0.0026 +0.28% 
CD.U08 Sep 2008 0.9434 0.9445 0.9400 0.9400 -0.0005 -0.05% 
CD.Z08 Dec 2008 0.9380        0.9380 0.9399 +0.0013 +0.14% 
CD.H09 Mar 2009 0.9519 0.9519 0.9519 0.9403 +0.0013 +0.14% 
CD.M09 Jun 2009 0.9880 0.9880 0.9880 0.9410 +0.0013 +0.14% 
CD.U09 Sep 2009 0.9540 0.9540 0.9540 0.9414 +0.0013 +0.14% 
CD.Z09 Dec 2009 0.9845 0.9845 0.9845 0.9418 +0.0013 +0.14%  

Other combinations: (http://quotes.ino.com/exchanges/?c=currencies)

Market          Open    High    Low     Last    Change   Pct 
AUSTRALIAN $/CANADIAN $ (CME:ACD)
ACD.U08 Sep 2008 0.9224 0.9224 0.9224 0.9224 +0.0005 +0.05%   
EURO/BRITISH POUND (NYBOT:GB)
GB.U08.E Sep 2008 (E) 0.78895 0.78905 0.78840 0.79210 +0.00290 +0.37%    
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.U08.E Sep 2008 (E) 161.850 161.850 161.570 161.570 -0.055 -0.03%     
EURO/US$ (SMALL) (NYBOT:EO)
EO.U08.E Sep 2008 (E) 1.47300 1.47300 1.47190 1.47190 -0.00375 -0.25%   

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

The September Canadian Dollar was lower overnight as it extends last week's trading range. If September renews this month's decline, last August's low crossing at 93.00 then the 75% retracement level of the 2007-2008 rally crossing at .9279 are the next downside targets. Closes above the 20-day moving average crossing at 95.63 are needed to confirm that a short-term top has been posted. First resistance is Monday's high crossing at 94.79. Second resistance is the 20-day moving average crossing at 95.63. First support is last Tuesday's low crossing at 93.14. Second support is last August's low crossing at 93.00.


Analysis

Morning drive-in show was worried about Freddie Mac more than anything else.

http://globaleconomicanalysis.blogspot.com/2008/08/m3-contraction-future-is-now.html

No surprise to him it seems....

In the comments section:
"I'm going to throw up now... "

Me too, dude, me too.

Goodyear closing 92 retail tire stores nationwide
Posted by Plain Dealer Business Staff August 20, 2008 09:53AM
Categories: Manufacturing, Retail
Goodyear Tire & Rubber Co. announced plans to close 92 tire stores by the end of the year, a little more than 12 percent of its company-owned locations.

Company spokesman Keith Price said the store locations were not being released but they were not concentrated in any one area of the country.

The store closures will result in the loss of 500 full-time workers and 100 part-timers. The company expects to take a $30 million charge to its earnings over the next few quarters to cover closing and severance costs.

Goodyear said the stores were not producing acceptable returns.

http://blog.cleveland.com/business/2008/08/goodyear_closing_92_retail_tir.html

CLU08.NYM Crude Oil Sep 08 113.28 12:17pm ET Down 1.25 (1.09%)
HOU08.NYM Heating Oil Sep 08 3.101 12:17pm ET Down 0.0227 (0.73%)
NGU08.NYM Natural Gas Sep 08 7.983 12:17pm ET Up 0.007 (0.09%)
PNU08.NYM Propane Gas Sep 08 1.59 11:42am ET 0.00 (0.00%)
RBU08.NYM RBOB Gasoline Sep 08 2.8378 12:17pm ET Down 0.0261 (0.91%)

And why did the price go down, instead of up, as so many desperately wanted?

Oil Falls After Biggest U.S. Supply Gain in More Than 7 Years

By Mark Shenk

Aug. 20 (Bloomberg) -- Crude oil fell more than $1 a barrel after a government report showed the biggest U.S. inventory gain in more than seven years.

Stockpiles rose 9.39 million barrels to 305.9 million barrels, the biggest gain in since March 2001, the Energy Department said. Supplies fell the previous week as Tropical Storm Edouard hit Texas. Inventories were forecast to increase 1 million barrels, according to a Bloomberg News analyst survey.

``Deliveries are bouncing back from Edouard,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``Imports are also up because there is plentiful crude available.''

Crude oil for September delivery fell $1.64, or 1.4 percent, to $112.89 barrel at 11:33 a.m. on the New York Mercantile Exchange. Futures touched a 15-week low of $111.34 a barrel on Aug. 15. Prices are up 59 percent from a year ago.

U.S. fuel demand averaged 20.2 million barrels a day during the past four weeks, down 3 percent from a year earlier, the department said. Gasoline consumption averaged 9.46 million barrels a day over the period, down 1.6 percent.

More: http://www.bloomberg.com/apps/news?pid=20601072&sid=avinBAyDqypg&refer=energy

And now, to my favorite candidates for energy market manipulators of the century:

Goldman Sachs Maintains View That Oil Will Top Record This Year

By Juan Pablo Spinetto and Grant Smith

Aug. 20 (Bloomberg) -- Goldman Sachs Group Inc. repeated its forecast that crude oil prices will rebound to $149 a barrel by the end of the year as supply growth struggles to keep pace with demand from emerging markets.

Goldman maintained its forecast even after oil futures slid $30 from their July 11 record of $147.27 a barrel. Fundamentals of supply and demand are still more important in setting oil prices than investor flows linked to movements in the U.S. dollar, Goldman added.

``We expect declining trend oil supply growth and supportive emerging markets oil demand growth to continue to offset demand weakness'' in developed economies, London-based Goldman analyst Jeffrey Currie said in a report.

Prices will be supported by a combination of disappointments in production outside the Organization of Petroleum Exporting Countries, this month's supply disruption in the Caspian Sea and the absence of any increase in consumers' oil stockpiles during the second quarter, when inventories normally rise, Goldman said.

Story: http://www.bloomberg.com/apps/news?pid=20601072&sid=aC7NTP_iQSj4&refer=energy

Goldman: huge position in physical oil. Oh man, I sure hope someone in the government is noticing their attempts at craven manipulation of the market.

01. FDIC will cap eligible IndyMac mortgages at 6.5% rate
1:43 PM ET, Aug 20, 2008

02. FDIC plan focusing on IndyMac deliquent, default mortgages
1:42 PM ET, Aug 20, 2008

03. FDIC offering 'several thousand' new IndyMac mortgage deals
1:41 PM ET, Aug 20, 2008

05. FDIC to lower interest rates of some IndyMac mortgages
1:39 PM ET, Aug 20, 2008

:donut: My character was besmirched in the SWT yesterday. I could lie to you , but she has the photos AND negatives, so I'll have to come clean as it were.

It all started years ago. I tend to read authors several books at a time. It first started with Michener. I read the Exodus and went on a Michener jag for a while. I liked that he had lots of well researched facts in his books and it really made you feel you were there. Length was not an issue for me and I felt better educated when I finished.

One day, I chose the book Hawaii. I knew I was in trouble when the island started out as an amoeba floating out in the ocean. Anyway, it turned out to be a favorite book for me and I learned much about the Polynesian culture and Hawaii. One of the stories that captured my imagination was the fact that surfing was reserved for Hawaiian royalty and that they frequently surfed naked. What captured my imagination was not the titillating nature of it, but the idea of total liberating freedom. To be out in the water just as God made you, having fun just seemed invigoratingly honest. I don't have a clue where you could do something like that these days, but I know I wouldn't hesitate. So, I have always had in the back of my mind that should I ever have a company of my own, I would be scrupulously honest, nothing to hide. And I would call my company 'Surfing Naked'. So, there you have it Demeter. Post your negatives. :spray: Now you know, I hang twelve. :rofl:

Happy hunting and watch out for the bears.

She has always been generous with her time, her energy, and her heart. This sad little tale could happen to anyone, and probably has to most of us.

While I cannot condone what she has done, I can forgive her with no qualms, and ask her forgiveness as well. I have destroyed the photos and the negatives. In the fullness of time, these will be the tiniest of ripples in the great sea of events that threaten to swamp our nation, the world and all the individual lives upon it.

If that isn't sufficiently fulsome, it is because I am an engineer by training and not an Ivy-trained politician.

How does one hang twelve? Or don't I want to know?

I shall only say - men can only hang eleven

:evilgrin:

men hang 11. Hey, you asked. Love you too. ;) :spray: :rofl:

edited to add ...a bunch of pervs nested their posts before mine. Like minds roll through the same gutter.:evilgrin:

If the U.S. is not facing enough of a property crisis as it is, now shares in Radian Group Inc, the mortgage insurer plunged on Wednesday after more concerns about the mortgage giants Freddie Mac and Fannie Mae.

The shares were down 41 cents, or 10.3 percent, to $3.56 in trading in midday. This year shares are down by 66 percent.

Investors in Fannie Mae and Freddie Mac are nervous that the government-chartered mortgage companies will need a cash injection from the Treasury which could result in the shareholders equity being wiped out.

Freddie and Fannies trouble is just another huge knock on the already declining mortgage insurance industry as it could affect the number of mortgages banks are willing to originate. So of course the fewer loans that originates the fewer loans there are to insure.

Source: Forbes

http://www.100mortgages.org/20080820/troubled-freddie-mac-and-fannie-mae-send-radian-shares-to-plummet/

The slowing starter home market in Houston has forced one of the city's big home builders to wind down.

Royce Builders has laid off a substantial number of employees and is cutting back operations, the company's president said Tuesday.

"We are in a form of liquidation now, working with our lenders getting houses closed," said John Speer, president of the 24-year-old Houston-based home builder. "We're working through things with our lenders and trying to dispose of properties as we can."

Royce has not filed for bankruptcy, Speer said.

The company is in the process of selling several hundred lots in various parts of the city, vacant homes in inventory, and a 600-acre parcel of undeveloped land in northwest Houston.

http://www.chron.com/disp/story.mpl/business/5954470.html

Down for the count. Don't know how many will lose their jobs.

Doctors with financial stakes in hospitals where they work must tell patients being referred to those facilities about the ownership link, under new rules from Medicare, the U.S. health-care program for the elderly.

Patients who ask about investors in a physician-owned hospital must be furnished with a list of all doctors, and their immediate family members, who own or have an investment interest and make referrals, Medicare also said in a Web site posting.

Medicare is seeking to make it harder for doctors to boost their payments by referring patients to their own facilities, and already bars self-referrals for 11 services. The agency said it would end reimbursement agreements with physician-owned hospitals that don't follow the new disclosure requirements.

"The provisions in the final rule are designed to prevent potential program and patient abuse resulting from physician referrals to certain health care entities with which they have financial relationships," the agency said in the posting. "The new rules will also help make the relationships between physicians and the entities to which they refer Medicare business more transparent."

http://www.chron.com/disp/story.mpl/business/5954230.html

How I long for the day when we have universal coverage.:grr:

COLLEGE STATION, Texas — Nearly all of Texas received some rain, with some areas such as the Panhandle getting 6 to 10 inches, according to reports from Texas AgriLife Extension Service personnel.

For other parts of Texas, the rain came in more moderate amounts but was still welcome. But in South Texas, the rain added insult to injury to crops earlier damaged by Hurricane Dolly.

"I'd say that within the last 72 hours we got well over 3 inches nearly across the whole county," said Scott Strawn, AgriLife Extension agent in Ochiltree County, which is in the northern Panhandle, adjoining the Oklahoma border.

Strawn said April, May and mid-July, months when the area usually gets most of its rain, were extremely dry.

"The temperatures were above average with below-average rainfall, so our wheat crop, to say the least, is not a very good one compared to the year before.

http://www.chron.com/disp/story.mpl/ap/business/5955516.html

I just love crop reports-I think it helps me remember my childhood and my relatives. Enjoy!

Was it the PPT that sought to make financials look yummy?

Dow 11,417.43 Up 68.88 (0.61%)
Nasdaq 2,389.08 Up 4.72 (0.20%)
S&P 500 1,274.54 Up 7.85 (0.62%)
10-Yr Bond 3.7990% Down 0.0430
NYSE Volume 4,570,513,500
Nasdaq Volume 1,794,844,250

4:10 pm : Stocks settled with solid gains following a late-day surge in what was a volatile session on a relatively slow news day. Volume was light, as it has been throughout the week.

Six of the ten economic sectors posted a gain as market participants digested a massive build in crude oil inventories, speculation that government sponsored enterprises Fannie Mae (FNM 4.47, -1.54) and Freddie Mac (FRE 3.23, -0.94) will need a government bailout and solid earnings from Hewlett-Packard (HPQ 46.20, +2.51).

Crude oil prices traded in volatile fashion, which exacerbated the stock market's choppy session. The government released its weekly energy report, which showed a 9.3 million barrel increase in crude stockpiles -- the largest since 2001. Prices were up 2.2% at session highs and down 1.7% at session lows before settling with a modest gain of 0.4% at $114.98 per barrel.

The financial sector saw large swings -- falling as much as 1.6% and rising as much 1.8% -- as market participants speculated if Fannie Mae and Freddie Mac would need to be bailed out by the federal government. There was no specific item that prompted the steep declines in Fannie and Freddie, although several reports addressed the issue of a bailout -- including a Wall Street Journal article that said Freddie executives were set to meet with Treasury Department officials.

Still, investors looked past the Fannie and Freddie turmoil, sending financials to a 1.7% gain with notable strength in diversified banks (+3.7%).

Hewlett-Packard reported quarterly earnings of $0.83, which topped expectations by three cents thanks to 10.5% year-over-year revenue growth that was driven by strong notebook sales and the weak dollar. The Dow component also issued fiscal fourth quarter earnings guidance that was above estimates. HPQ rose 5.8% for the day, but the broader tech sector was unable to post much of an advance, up just 0.3%.

Commodity related stocks saw the most buying interest. The energy sector rallied 2.8%, with strength in oil production and exploration companies (+5.0%). The materials sector rose 2.1%, as diversified mining company Freeport McMoRan (FCX 90.91, +6.21) rallied 7.3% on no specific news item. DJ30 +68.88 NASDAQ +4.72 NQ100 +0.2% R2K +0.2% SP400 +0.4% SP500 +7.85 NASDAQ Adv/Vol/Dec 1379/1.77 bln/1414 NYSE Adv/Vol/Dec 1654/1.07 bln/1448

A measley 68 points? The well's run dry, I'll wager. Or the debt limit has been hit.