STOCK MARKET WATCH, Friday August 7

Source: du

STOCK MARKET WATCH, Friday August 7, 2009

Bush Administration Officials Under Indictment = 2
Financial Sector Officials In Prison = 4

AT THE CLOSING BELL ON August 6, 2009

Dow... 9,256.26 -24.71 (-0.27%)
Nasdaq... 1,973.16 -19.89 (-1.00%)
S&P 500... 997.08 -5.64 (-0.56%)
Gold future... 962.90 -3.40 (-0.35%)
10-Yr Bond... 3.76 +0.01 (+0.24%)
30-Year Bond 4.54 0.00 (-0.09%)

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie and Silver

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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

Where to Look Next
BY QUINT TATRO

When I had the honor of appearing on Financial Sense NewsHour with Jim Puplava the S&P 500 was sitting at the critical level of 870 and my comment was rather Swiss in nature in that I was truly unbiased and ready for anything. The push lower, breaking the now famous ‘neckline’ seemed almost too easy, however a jolt higher off a bearish pattern also didn’t seem prudent to anticipate. Rather than become biased towards any one side I chose to sit it out and wait. Now that the move has been resolved, I am ready to attack and position accordingly. I truly believe that this unbiased and flexible nature of trading is the individual’s strongest suit, however at this juncture I see far too many people still fighting a move that has already happened. They refuse to embrace what is, and are ultimately imposing their beliefs on a tape that could truly care less. The sooner individuals stop thinking about the bear side or the bull side and start focusing on the right side, the better off they will be.

Now that we’ve run over 15% in just a few short weeks it’s important to take a look at where we are and where we could go. As you can see in the S&P weekly chart noted below. The index is distancing itself from the 50 period moving average. This has been a key level historically and worth keeping an eye on. I would prefer to see a kiss of this area on a retracement, which would give investors a buying opportunity should this moving average be broken to the downside. It would be a cue to start taking steps back towards the cash bunker.

.....

The problem that many are pointing to in this tape is a lack of credible earnings. Let’s face it, expectations are unbelievably low and after cutting costs down to the bare essentials, it hasn’t been tough for companies to post what on the surface look to be exceptional numbers. A sustained uptrend in a market is not led by massaged earnings and whether I rely on technicals as my primary guide or not, I must at least be aware of the fundamental issues at hand.

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

08:30 Hourly Earnings Jul
Briefing.com 0.1%
Consensus 0.1%
Prior 0.0%

08:30 Nonfarm Payrolls Jul
Briefing.com -370K
Consensus -325K
Prior -467K

08:30 Unemployment Rate Jul
Briefing.com 9.7%
Consensus 9.6%
Prior 9.5%

08:30 Average Workweek Jul
Briefing.com 33.0
Consensus 33.0
Prior 33.0

15:00 Consumer Credit Jun
Briefing.com -$5.0B
Consensus -$5.0B
Prior -$3.2B

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

U.S. July nonfarm payrolls fall 247,000
8:30am Today

U.S. July unemployment rate falls to 9.4%
8:30am Today

U.S. July alternate U6 jobless rate falls to 16.3%
8:30am Today

U.S. July average hourly earnings up 0.2%
8:30am Today

U.S. July goods-producing jobs down 128,000
8:30am Today

U.S. July service-producing jobs down 119,000
8:30am Today

U.S. May, June payrolls revised up 43,000
8:30am Today

U.S. July average work week rises to 33.1 hours
8:30am Today

http://www.marketwatch.com/story/jobless-rate-dips-to-94-as-247000-payrolls-lost-2009-08-07

WASHINGTON (MarketWatch) - Job losses slowed in July to the lowest total since August as the unemployment rate unexpectedly fell back to 9.4%, the Labor Department estimated Friday. U.S. nonfarm payrolls fell by 247,000 in July, the 19th consecutive month of job losses, about in line with economists' estimates of a 275,000 decline. Most industries continued to shed jobs in July, but at a much slower pace than they did in the autumn and winter. Job losses moderated in many major industries in July. Goods-producing industries shed 128,000 jobs, the fewest since last September. Service-producing industries cut 119,000 jobs.

still looking for the full report

What a freakin' joke.

Payrolls drop and, yet, the unemployment rate goes down? Heh! I wish someone would pay me to underreport this info.

We are still losing jobs.

Job creation is negative.

More eligible people enter the potential workforce every month.

And the unemployment rate goes down.

That's what happened last month.

BTW, I clicked to 'recommend' and for some reason it went down by one. So, I guess as I was doing a recce someone was doing a un-recce. Have I mentioned what a stupid system this is?

I know a lot of you won't want to hear this, but the number of jobs actually INCREASED. From the Bureau of Labor Statistics (the guys who own the yardstick): The NON seasonally adjusted number of employed in June was 140,826,000 and July was 141,055,000. That's an increase of 229,000 jobs. Labor force (the number of workers available) went from June's 155,921,000 to July's 156,255,000, an increase of 334,000. Once again, the job increases did not keep up with the population increase.

The number of employed (jobs) increased in April, June, and July. It decreased in every other month this year. Those are the absolute numbers. Population increased faster in all those months.

The seasonally adjusted numbers show an increase in jobs in April only (+20,000, which is probably within their margin of error). Seasonally adjusted, they show the Civilian Labor Force decreasing in June and July after increasing in April and May.

It might be interesting to know exactly how they adjust the numbers. It might be interesting to quibble over the details.

Still, the U-3 and U-6 numbers are the closest thing we have to a consistent measurement. U-3 unemployment went down from 9.5% to 9.4%. U-6, a more inclusive measure of unemployment, went down from 16.5% to 16.3%.

This is actually, really good news.

What are these jobs? How much do they support those who have them... Are they Middle-Class?

the quality that really matters is people get money for doing work. There's no question employers have the upper hand when it comes to issues like pay rate or working conditions. We're a few million jobs short of being able to march into Mr. Dithers' office and demand a raise.

All of the following numbers are seasonally adjusted:

Civilian Labor Force: -422,000

Labor Force Participation Rate: -0.2%

Employment Level: -155,000

Unemployment Level: -267,000

Not in Labor Force: +437,000

I think the mystery of the U-3 seasonally adjusted Unemployment Rate for July, 2009 is adequately solved, don't you?

U.S. June consumer credit down $10.29 bln
3:01pm Today

U.S. June consumer credit down at 4.9% rate
3:01pm Today

U.S. credit card debt down record 10 months in row
3:01pm Today

when will the MSM figure out there's no money to spend and no confidence in spending more than you have?

Hey, I'm easily amused...but I've never done that before...that I remember. Of course, I'm getting older and the onion on my belt needs changing.

So...

Have a good one, everybody! :)

and good morning...

:donut: :donut: :donut:

SINGAPORE – Oil prices fell to near $71 a barrel Friday in Asia as investors looked to U.S. monthly employment figures later in the day for signs the economy may be recovering.

Benchmark crude for September delivery was down 60 cents to $71.34 a barrel by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange. On Thursday, the contract lost 3 cents to settle at $71.94.

.....

In other Nymex trading, gasoline for September delivery fell 0.73 cent to $2.05 a gallon and heating oil dropped 0.88 cent to $1.93. Natural gas for September delivery gained 3.1 cents to $3.77 per 1,000 cubic feet.

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

Oil down 60 cents to $71.34/brl ahead of jobs data
8:05am Today

Whew, these swings... Nope, No speculation here, it's ALL SIMPLY SUPPLY AND DEMAND! Yeah, right. :eyetwirl:

WASHINGTON (AP) -- Fannie Mae plans to tap $11 billion in new government aid after posting another massive quarterly loss as the taxpayer bill from the housing market bust keeps growing.

The mounting price tag for the rescue of Fannie and its goverment-sponsored sibling, Freddie Mac, is surpassed only by insurer American International Group Inc., which has received $182.5 billion in financial support from the government so far.

Fannie Mae's new request for $10.7 billion from the Treasury Department will bring the total for Fannie and Freddie to nearly $96 billion. Freddie is expected to report its quarterly results on Friday.

.....

The two companies lowered their standards for borrowers during the real estate boom and are reeling from the bust. High-risk loans, now defaulting at a record pace, have come back to haunt the companies. Worse still, the recession is causing formerly reliable homeowners with good credit to default.

http://finance.yahoo.com/news/Fannie-Mae-seeks-107B-in-US-apf-3979081619.html

I think about $1.2 billion should tide me over.

I'm good for it.

Well, as good as they are.

Where is Ann Ryan when you really need her.

Individuals who need welfare are just shiftless and lazy. Corporations who need welfare are a good source for campaign contributions.

Two days ago, Fannie Mae went up 17 cents per share, which is a lot when it was trading at 57 cents/share to start with. Today it went down 14 cents per share. I don't care what they were doing business-wise, there is nothing that justifies 20 and 30% swings in a single day.

To misquote Ulysses Everett McGill: "It's a fool who looks for reason in the chambers of the New York Stock Exchange."

strong earnings - RDN is a mortgage insurer, so people bet on the correlation of FNM and FRE to RDN.

LONDON -- While most European banks have been celebrating a second-quarter turnaround in investment-banking profits, Royal Bank of Scotland could only look on enviously on Friday. The state-controlled bank reported a whopping $1.7 billion loss for the first six months of 2009, driven by the depressed British economy and deteriorating loan values, and said it would not see a turnaround in results until at least 2011.

And with the British government's "other" part-nationalized lender, Lloyds Banking Group ( LYG - news - people ), also recovering from a six-month loss, don't expect the state to step out of the way anytime soon. Her Majesty currently owns 70% of RBS and 43% of Lloyds, with both stakes set to rise as a result of the planned "asset protection scheme"--a government-sponsored proposal to insure risky, unwanted assets. The majority of the $13.4 billion in impairments taken by RBS in the first half of the year were on these so-called "toxic" assets.

http://www.forbes.com/2009/08/07/rbs-lloyds-banks-markets-equities-britain.html

On his blog yesterday he had something he titled Bouncing Britain. I don't know, maybe he's been down so long anything looks like up? Seems like constantly reporting on downward trends, and steady hopelessness gets to be dull reading so they reading the little tics as major bounces?

And how will Citizen's Bank here weather the continuing decline of Bank of Scotland, it's parent Bank?

I tend to agree that when conditions do not deteriorate so aggressively as they have over two years then that would look better in a way. I keep in mind that there were publicly traded companies in 1933 that were genuinely profitable through sales rather than staff attrition.

I think pretty soon people may have to swallow hard and accept that there are really, truly signs of improvement.

(Cue the flames!)

Aug. 7 (Bloomberg) -- The biggest U.S. television networks are posting declines of 15 percent or more in advertising commitments for the prime-time season starting next month, based on results at CBS and NBC.

So-called upfront sales at General Electric Co.’s NBC will fall 15 percent to 20 percent, a person with knowledge of the matter said yesterday. Sales were $1.9 billion last year, a person familiar said then. CBS Corp. will collect about $2.1 billion, down from an estimated $2.5 billion, according to Michael Morris, an analyst at UBS AG.

.....

Anthony DiClemente, a New York-based analyst at Barclays Capital, estimated in April that networks’ advance ad sales may drop 15 percent to about $7.4 billion.

Advertisers are paying CBS slightly less per viewer in this year’s upfront sales than they did last year, Moonves said. A larger audience at CBS, the only network to expand prime-time viewership last season, is countering the lower price to keep revenue about even on the ads it has sold, he said.

http://www.bloomberg.com/apps/news?pid=20601103&sid=a09DEj628PII

(Debt up .017B while FICA side goes down half a billion.)

= Held by the Public + Intragovernmental(FICA)
= 7,330,451,353,350.81 + 4,328,626,520,899.50
UP 17,974,078.47 + DOWN 584,389,840.05

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 307-Million person America.
If every American, man, woman and child puts in $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.77, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 12 seconds we net gain a another American, so at the end of the workday of the report, there should be 307,027,142 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $37,974.1.
A family of three owes $113,922.29. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 24 reports in the last 30 to 33 days.
The average for the last 24 reports is 7,003,741,848.52.
The average for the last 30 days would be 5,602,993,478.82.
The average for the last 33 days would be 5,093,630,435.29.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 136 reports in 197 days of Obama's part of FY2009 averaging -0.28B$ per report, -0.09B$/day so far.
There were 211 reports in 309 days of FY2009 averaging 7.75B$ per report, 5.29B$/day.

PROJECTION:
There are 1,264 days remaining in this Obama 1st term.
By that time the debt could be between 13.4 and 18.3T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
08/05/2009 11,659,077,874,250.31 BHO (UP 1,032,200,825,337.23 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 1,634,352,977,337.90 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
07/16/2009 +016,136,405,834.08 ------------**********
07/17/2009 +000,062,427,388.38 ------------*******
07/20/2009 +000,171,809,229.69 ------------******** Mon
07/21/2009 -000,321,987,025.18 ---
07/22/2009 +000,261,059,305.61 ------------********
07/23/2009 +010,040,233,982.08 ------------**********
07/24/2009 -000,124,358,216.07 ---
07/27/2009 +000,077,777,899.40 ------------******* Mon
07/28/2009 +000,420,333,618.55 ------------********
07/29/2009 +000,733,026,310.02 ------------********
07/30/2009 -026,031,384,097.19 -
07/31/2009 +095,534,108,940.65 ------------**********
08/03/2009 -005,083,538,887.00 -- Mon
08/04/2009 -000,056,382,262.77 ----
08/05/2009 +000,017,974,078.47 ------------*******

91,837,506,098.72 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,994,446,070,991.24 in last 321 days.
That's 1,994B$ in 321 days.
More than any year ever, including last year, and it's 196% of that highest year ever only in 321 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 321 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4002720&mesg_id=4002728

(Debt down half a billion while FICA side goes up a billion and a half.)

= Held by the Public + Intragovernmental(FICA)
= 7,329,873,247,080.89 + 4,330,269,207,123.06
DOWN 578,106,269.92 + UP 1,642,686,223.56

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 307-Million person America.
If every American, man, woman and child puts in $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.77, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 12 seconds we net gain a another American, so at the end of the workday of the report, there should be 307,034,342 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $37,976.67.
A family of three owes $113,930.02. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 24 reports in the last 30 to 31 days.
The average for the last 24 reports is 5,815,509,090.86.
The average for the last 30 days would be 4,652,407,272.69.
The average for the last 31 days would be 4,502,329,618.73.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 137 reports in 198 days of Obama's part of FY2009 averaging -0.32B$ per report, -0.10B$/day so far.
There were 212 reports in 310 days of FY2009 averaging 7.71B$ per report, 5.28B$/day.

PROJECTION:
There are 1,263 days remaining in this Obama 1st term.
By that time the debt could be between 13.4 and 18.3T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
08/06/2009 11,660,142,454,203.95 BHO (UP 1,033,265,405,290.87 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 1,635,417,557,291.50 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
07/17/2009 +000,062,427,388.38 ------------*******
07/20/2009 +000,171,809,229.69 ------------******** Mon
07/21/2009 -000,321,987,025.18 ---
07/22/2009 +000,261,059,305.61 ------------********
07/23/2009 +010,040,233,982.08 ------------**********
07/24/2009 -000,124,358,216.07 ---
07/27/2009 +000,077,777,899.40 ------------******* Mon
07/28/2009 +000,420,333,618.55 ------------********
07/29/2009 +000,733,026,310.02 ------------********
07/30/2009 -026,031,384,097.19 -
07/31/2009 +095,534,108,940.65 ------------**********
08/03/2009 -005,083,538,887.00 -- Mon
08/04/2009 -000,056,382,262.77 ----
08/05/2009 +000,017,974,078.47 ------------*******
08/06/2009 -000,578,106,269.92 ---

75,122,993,994.72 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,995,510,650,944.88 in last 322 days.
That's 1,996B$ in 322 days.
More than any year ever, including last year, and it's 196% of that highest year ever only in 322 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 322 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4004476&mesg_id=4004541

Several bloggers have picked up on this

8/6/09 Karl Denninger's video
http://market-ticker.org/archives/1305-Monetization-And-Bernanke-Perjury.html

8/6/09 Denninger: BLATANT Monetization Uncovered
http://market-ticker.org/archives/1304-BLATANT-Monetization-Uncovered.html

8/4/09 "Lending" a Helping Hand by Brian Benton
http://financialsense.com/fsu/editorials/2009/0804.html

8/6/09 The Fed Buys Last Week's Treasury Notes by Chris Martenson
http://www.chrismartenson.com/blog/fed-buys-last-weeks-treasury-auction/23880

edit to also add ZeroHedge
8/6/09 The Fed's UST-POMO Pyramid Scheme Exposed
http://www.zerohedge.com/article/feds-ust-pomo-pyramid-scheme-exposed

2nd edit - Brian Benton's comment in Martenson's blog
"No doubt that the Fed announced well before the purchase program commenced on 3/25 that it would be purchasing treasury debt, specifically long term treasury debt. This is not the surprise. I have been covering this in writings for some time. But there is a difference between 1) the Fed going into the open market to expand its balance sheet by buying treasuries (this is not an atypical operation even in non-crisis years ... but the volume in $ is certainly atypical) and 2) the Treasury auctioning large amounts of debt and the Fed immediately subsidizing that auction (which is what they are doing). This is the closest thing to the Fed lending directly to the Treasury/Government that there is without actually doing it (it is also more innefficient in that it costs the taxpayers more). And this is disallowed by the Federal Reserve Act for obvious reasons. I think it is clear that they are working closely with the primary dealers (providing them backstop assurance) to ensure that these Treasury auctions not only are not disappointing (as perception is very important here), but that they look pretty good (especially at the long end)."
http://www.chrismartenson.com/blog/fed-buys-last-weeks-treasury-auction/23880#comment-46285

3rd edit - Across the Curve -- Monetizing the Debt: Disinformation in the Blogosphere
http://acrossthecurve.com/?p=7671

4th edit - "Monetizing the Debt: Disinformation in the Blogosphere"
You cannot conclude ANYTHING about whether the Fed or any central bank is adding or draining liquidity by looking at a single day of open market operations! You need to look at what has been happening over a period of WEEKS AND MONTHS, and not just supposed Now if someone did that analysis (which is even though it is only simple addition, is still pretty painstaking), they might indeed prove that the Fed is monetizing beyond the $50 billion a month it says it is buying in Treasuries. But one day of activity on the open market desk proves precisely nothing.
http://www.nakedcapitalism.com/2009/08/monetizing-debt-disinformation-in.html
****************


Obviously, monetizing the debt is a hot topic. Hopefully, this is my last edit. :)

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

Last trade 78.051 Change +0.070 (+0.09%)

US Non-Farm Payrolls (NFPs) to Serve as Gauge of US Dollar Link to Risk Trends

http://www.dailyfx.com/story/topheadline/US_Non_Farm_Payrolls__NFPs__to_1249578748531.html

The US dollar has come under pressure recently as increasing risk appetite drove up demand for higher-yielding currencies and equities. However, the July reading of NFPs is projected to show that the pace of job losses slowed, and the last time we saw a dramatic improvement, the US dollar ignored risk trends and rallied in response. Will we see a similar reaction on Friday?

Trade this news report live with DailyFX Currency Strategist John Kicklighter tomorrow morning: Trading US Non-Farm Payrolls



Arguments for an Improvement in Non-Farm Payrolls
1. Initial jobless claims (4-week avg) fell to a 27-week low of 555,250 during the week ending 8/1
2. Continuing claims (4-week avg) eased to 6,278,750 during the week ending 7/25, from 6,769,000 in the week ending 6/27
3. ADP employment fell by the least since October 2008, coming in at -371,000 in July
4. Challenger job cuts fell 5.7 percent in July from a year earlier, marking the second straight decline
5. ISM manufacturing employment component rose to 45.6 from 40.7, signaling that the pace of job losses slowed

Arguments for a Deterioration in Non-Farm Payrolls
1. Conference Board, University of Michigan consumer confidence both fell during July to 3 and 4-month lows, respectively
2. ISM non-manufacturing employment component fell to 41.5 from 43.4, signaling a steeper drop in jobs

Based on both economist forecasts and a variety of leading indicators, Friday’s release of US non-farm payrolls (NFPs) is likely to show job losses for the nineteenth straight month in July, but the rate of decline is anticipated to slow. At the time of writing, Bloomberg News was calling for NFPs to decline by 328,000, but with the range of estimates reflecting expectations that NFPs could fall anywhere between 150,000 and 460,000, there is significant room for a surprisingly strong or weak number. Based on the improvements we’ve seen in leading indicators like initial and continuing jobless claims, the ADP employment change, and the employment component of ISM manufacturing, we expect that NFPs may prove to be better than consensus forecasts are calling for.



...more...

Pound Continues Losses; Yen Finds Support Ahead of US Non-Farm Payrolls

http://www.dailyfx.com/story/bio1/Pound__Euro_Consolidate_Ahead_Of1249639004785.html

The pound extended its losses from yesterday that followed the BoE’s announcement that they would be adding to their quantitative easing program by £50 billion. Sterling fell over 75 pips against the dollar, which was a sizable move considering that we are seeing tight ranges across other pairs with the US employment report looming. An unexpected rise in U.K. factory gate prices by 0.3% versus 0.0% failed to generate any bullish sentiment as the central bank clearly doesn’t have inflation concerns with the added measures. Despite the monthly increase, prices fell 1.3% from a year ago down from last month’s -1.0% but better than expectations of -1.7%. Additionally, input costs dropped 1.4% exceeding estimates of -0.8% and a sign that downward pressure may continue.

The MPC sent a clear signal that risk remains to a recovery by adding £25 billion more than had previously been authorized, which required them to petition the government. The Central bank expressed concerns that the financial conditions remain fragile as banks continue to look to bolster their balance sheets rather then pass out new loans. The bank also stated that the recession was deeper than originally expected justifying the added liquidity. Signs that the global economy is improving has tempered the bearish sterling sentiment but that could change if we start to see the level of improvement level off. The GBP/USD appears poised for a test of the 20-Day SMA at 1.6550 which has been a source of support since early July.

The Euro has been confined to a tight range throughout overnight trading as it continues to consolidate gains from its recent rally. Risk sentiment has been looking for a catalyst and the US employment report could be the source today. We have started to see the yen crosses come under pressure which could be a sign that risk appetite is waning. Hawkish comments from ECB President Trichet that further stimulus wasn’t necessary has failed to inspire Euro bulls. The central bank leader would go on to say that the committee expects labor markets to improve in 2010 as growth returns. He also downplayed tight credit markets laying the blame for them at the feet of weak demand rather then restricted lending. The view was in stark contrast to the BoE and begs the question of whether the central bank’s laid back approach is a misstep that will hurt its future growth prospects. A 7.0% jump in German exports and Italian GDP contracting less than expected supports the ECB’s positive outlook and could equal continued Euro strength.

The dollar continues to show signs of firming as concerns grow that the recent rally in equity markets was a bit overdone. Current valuations may not justify future profits if the U.S. consumer remains cautious. It has been increasing unemployment that has keep Americans retrenched and expectations are that the economy gave away jobs for a nineteenth month. However, today’s Non-farm payroll report is expected to show the pace of losses slowed to -325,000 from -467,000 which could raise hopes that job growth is nearing and consumer consumption with it. This could spur risk appetite and weigh on the dollar today. However, if the report misses as we saw with the ADP figures then look for the dollar to take back recent losses as growth concerns re-emerge.

...more...

Non Farm Payrolls gets released this morning. Some outlets have pointed out an expected”beat” by BLS.

As we have long advocated, investors should be more concerned with the details than the headline, and watch for signs of a change in trend.A plus or minus 100k from the consensus is all but statistically irrelevant.

Be aware of the revisions, and Birth/death adjustment: Watch to see how much this impacts the overall number.

Look at these three leading indicators within the release:

1) Hours worked: Are employers still cutting back hours? That is a sign they lack confidence going forward.

2) Wages and income: Are salaries still falling? It reveals how much demand there is for labor.

3) Temp help: Are employers starting to hire temporary workers?

These will provide some insight into the state of the Labor market.

http://www.ritholtz.com/blog/2009/08/trend-not-a-single-data-point/

:donut:
NEW YORK (Reuters) - The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on Wednesday.

http://www.reuters.com/article/businessNews/idUSTRE5745...

What this is saying is that the number of MORTGAGES underwater will increase. How this number got mixed up and doubted by adding in homes that are owned outright was just wrong!

As for those that are mortgage free, there is the reality that their homes have taken a hit value wise. What impact that carries, depends upon that persons situation and the market area they reside. For someone at or near retirement, that "paper" loss in personal wealth could have a serious downside.

The tables are available at http://www.census.gov/hhes/www/housing/ahs/ahs07/ahs07.html

If you download table 3-15 "Mortgage Characteristics" it contains number for the total number of owner occupied homes and the number of homes with mortgages.

The total number of homes is 75,647,000.

The number of homes with mortgages is 45,156,000. Therefore, about 60% of homeowners have mortgages.

To say that "The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011" would mean that 0.48 * 75,647,000 = 36,310,560 homeonewers with mortgages would owe more than their house was worth.

That would imply that 36,310,560 / 45,156,000 = 80% of mortgages would be under water. This percentage is improbably large.

Farther on in the story http://www.reuters.com/article/businessNews/idUSTRE5745JP20090805?feedType=RSS&feedName=businessNews
it quotes more Deutsche Bank numbers:

Of prime conforming loans, 41 percent will be "underwater" by the first quarter of 2011, up from 16 percent at the end of the first quarter 2009, it said. Forty-six percent of prime jumbo loans will be larger than their properties' value, up from 29 percent, it said.

These numbers are more consistent with an interpretation that 48% of the 60% of homeowners who have mortgages will owe more on their house than the house is worth.

I think the Reuters reporter got the lead sentence wrong, and Deutsche bank didn't say what the reporter said.

I had a minute. Figured this morning would be fine time to throw a couple of intriguing studies into the mix.

http://greengoddesslove.wordpress.com/2009/08/06/pondering-the-nature-of-consciouness/

Links on this page go to studies from the New Scientist and Smart Money and explore how group dynamics can be predictive in both the failing of a giant corporation (Enron) and in the volatility of the Stock Market.

I'm still peaking (oops...) make that peeking in every day. And miss the banter.

Take Care

TD

:hi:

Good to hear from ya! :D

Hope all is going well!

:hi:

I'm trying to stir things up a little today. Haven't been able to post much this summer. Working too much and my wife hogs the computer when she's off from working for the schools. (She's in admin, so she only gets about one month off.)

Is that any way to run a business? Is Hall another Madoff?

He presents a nice collection of charts. - ozy

Goldman reported their $100MM+ trading days. It is a stunner: Goldman made over $100 million on 46 out of the 65 total trading days in Q2, 70% of total. Goldman made over $50 million on 58 of the 65 total trading days in Q2, 89.2% of total.

-see charts-

Wow. But surely this phenomenal improvement in daily P&L generation came as a result of the firm taking on more risk? Why, no Virginia- Goldman's VaR at the end of Q2 was lower than the end of Q1.

.....

Oh, and the 12 $100MM (at least) trading days jump in Q2 vs Q1, why that's exactly the cost to Goldman to pay down its TARP warrants. Goldman is so lucky - the company can just print money while trading and pay off its liabilties. One wonders if Ben Bernanke is at least a little concerned that GS has its own $ printing press courtesy of the fine folks at the SEC.

http://www.zerohedge.com/article/goldmans-42-100mm-trading-days-q2-absolute-unprecedented-record-just-two-days-trading-losses

see my post # 13.

Liz Moyer, 08.06.09, 04:00 PM EDT
Nasdaq and BATS to stop offering controversial order type, putting pressure on Direct Edge to throw in towel.


Nasdaq and BATS Exchange are withdrawing controversial trade order types that raised alarms about fair access to the markets.

The cancellation of their so-called "flash orders" puts pressure on Direct Edge, an electronic communication network owned by Goldman Sachs ( GS - news - people ), Citadel and Knight Trading, which was the first to offer the service and has used it to gain substantial market share in recent months. In response to Direct Edge's success, Nasdaq OMX ( NDAQ - news - people ) and BATS rolled out flash orders in June.

The Securities and Exchange Commission is looking into flash orders, which hold up the routing of stock orders between various market centers while quote information is shown, or flashed, to traders for a few milliseconds. The main criticism is that they interfere with efficiency in the displayed market, where everyone can see pricing information, and allow a limited group of traders advance access to order flow information, a perceived advantage. (See "Hot Flashes On Wall Street.")

The issue has been simmering in trading circles for months and came to national attention after NYSE Euronext ( NYX - news - people ), operator of the New York Stock Exchange, filed a public comment letter to the SEC in May asking that the practice be stopped.

The controversy, now taken up by politicians like Sen. Charles Schumer, D-N.Y., is similar to the debate over the fairness of an order type called "indication of interest," which block traders use in dark pools to sniff out order flow. The SEC, in an ongoing examination of the effects of dark pools, is taking a close look at both flash orders and indications of interest.

"I call on the other exchanges and trading venues who offer flash orders also to move now to eliminate flash orders and begin the first step to a level playing field for investors," said Sen. Edward Kaufman, D-Del., in a statement.

Much more... http://www.forbes.com/2009/08/06/flash-orders-nasdaq-business-wall-street-bats.html

____________________________________________________________________________________________________________________

I don't usually quote from Forbes, but, for some reason they're all over this HFT trading story.

Liz Moyer, 08.04.09, 03:15 PM EDT
SEC to examine controversial trading practice after Sen. Schumer says it will be banned.


The Securities and Exchange Commission will ask for public comments as it decides whether to ban a hot-button trading tactic that has preoccupied actors in the U.S. equity markets in the last few weeks.

Until now the SEC has allowed three major U.S. stock market centers--BATS Exchange, Direct Edge and Nasdaq ( NDAQ - news - people )--to go ahead with their own versions of so-called flash orders without much incident.

But, deepening public suspicion about little understood market forces like high-frequency trading, dark pools and flash orders have put pressure on the agency. SEC Chairman Mary Schapiro says her look at flash orders is part of the agency's broader look at the role of dark pools in the U.S. equity markets.

A dark pool is a market center that doesn't display quote information. Big money managers use them to move blocks of stock without affecting the price, as block trading on a displayed market would. But critics have said the growing use of dark pools, and the increasingly high profiles of dark pool firms like Liquidnet, which plans an initial public offering, make it necessary for regulators to scrutinize them.

"I am concerned about the issues presented by dark pools as well as flash orders," Schapiro said Tuesday. "I have asked the staff for an approach that can be quickly implemented to eliminate the inequity that results from flash orders."

Her statement came shortly after New York Sen. Charles Schumer sparked a flurry of chatter by announcing through his press office that, after a conversation with Schapiro, he believed the SEC was about to ban flash orders. Schumer said last month he would introduce legislation to stop the practice if the SEC didn't act.

More @ http://www.forbes.com/2009/08/04/flash-orders-trading-business-wall-street-sec.html Including quite a bit of discussion of the nuances, details, and definitions of dark pool and HFT concepts.

_____________________________________________________________________________________________________

My thanks to Liz Moyer @ Forbes for two really well written articles.

ArcelorMittal to bring back hundreds of laid off steelworkers in Cleveland
by Frank Bentayou/Plain Dealer Reporter
Thursday August 06, 2009, 5:25 PM

http://www.cleveland.com/business/index.ssf/2009/08/arcelormittal_says_it_is_resta.html


CLEVELAND, Ohio -- ArcelorMittal Cleveland said Thursday it is in the process of restarting a blast furnace and other operations at its steel complex near downtown. Some laid-off workers will be back on the job next week.

The return to production of the company's C-5 blast furnace, a steel shop, hot mill, pickle line, tandem mill and galvanizing line at the East Side manufacturing and annealing plant is a result of improving market demand, said ArcelorMittal spokeswoman Mary Beth Holdford.

Hundreds of employees will return in phases, but ArcelorMittal said some will be back on the job by Monday.

It's been a long wait for some. On May 11, the company announced it would temporarily close its plant in the Flats, putting 912 steelworkers out of work. The shutdown followed a staggering 45 percent decline in the global steel market during the darkest days of the past year's recession.

The company also moved many of its 300 or so Cleveland-area salaried workers to jobs at mills in other states.

When product shipments from Cleveland fell off last fall, ArcelorMittal idled its two blast furnaces and stopped steel production. Then, earlier this year, the company cut operations dramatically at its finishing plant.

Holdford said Thursday that local officials of the world's largest steel maker, based in Luxembourg, were "working closely" with United Steelworkers of America union Local 979 "to ensure a safe and successful restart."

She said the company was not able to determine how many Steelworkers and salaried employees would return to work at the plant but agreed that "hundreds would be a safe bet."

Mark Granakis, president of Steelworkers Local 979, was not immediately available for comment.

In steel and coal-producing areas around the world, signs have emerged in recent weeks that the tremendous excess global inventory was gradually diminishing. Orders for the special coal used in steel making were increasing, for instance, a sign that steel companies might soon fire up their furnaces.

Markets for automotive-grade steel, too, have slowly begun to show signs of life. ArcelorMittal's East Side operations are geared toward making the type of treated sheet metal that North American auto plants stamp in vehicle body parts.

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

I still have a lot of friends working there. I hope it lasts, but, I won't hold my breath. One time, back in the '80s, I was laid off for 2 solid years.

Sorry. Wrong Place. :)

GM and Chrysler are out of bankruptcy now, but are they really revving up the assembly lines?

From Zero Hedge: (http://www.zerohedge.com/article/goldman-sachs-state-market)

"Hat tip to reader Tulip who points out this comprehensive presentation by Goldman Sachs on the State of the Markets, created by the firm's Hedge Fund strategies division. We recommend readers check it out for some pretty graphs and some good economic summaries. Some notable points:
# Consumers continue to delever, even as retail flows from money markets into risk assets
# Observations on the Savings Rate vs. Consumer Credit
# Sovereign CDS may present unusual opportunities (With US CDS at 25bps? It is so getting squeezed to negative numbers)
# Residential housing market continues to weaken
# Commercial real estate beginning to take center stage
# CRE equity may have further to fall or be completely wiped out
# Equity valuations driven by the consumer, with the cryptic proviso that "equity value might have downside" - no kidding"


Direct link to Goldman Sachs report:
http://tulpenwoede.tornflag.com/statemar.pdf

Very lengthy and detailed economic analysis. It doesn't paint a rosy picture. On the contrary, it appears this division of Goldfellas is giving strategy advice on how to profit from the obliteration of Commercial Real Estate, the declining dollar and yen, and increased government stimulus.

That's incredible. It's what we all know, but spelled out in gory detail. Amazing that the government would produce such a document, er, I mean Goldman.

"After two decades of economic doldrums the Japanese economy is ready to hit the wall. And, the impact will likely be felt around the world. John Maudlin, president of Millennium Wave Investments, and George Friedman, CEO of STRATFOR of global-intelligence firm Stratfor, tell Tech Ticker, "be afraid, be very afraid."

http://finance.yahoo.com/tech-ticker/article/297420/Japan%27s-Future-%22It%27s-Going-to-Be-Scary%22?tickers=ewj,^jpn,sne,tm,jpy=x&sec=topStories&pos=8&asset=&ccode=

This is interesting to me on a couple of levels. First, because it explicitly details how Japan's economic crisis is leading to a political upheaval. Japan's economic situation is a little different than ours, but Bernake is pursuing a similar recovery strategy of increasing liquidity and zombie banks. So that implies to me that the US could be in Japan's shoes very soon--and our political upheaval has yet to get started.

Second, Japan has the second largest economy in the world (soon to be eclipsed by China) and is inextricably entwined in the US economy. So what is bad for Japan is generally not good for the US. For example, the political party poised to oust the ruling party for the last 50 years, has stated they will no longer be purchasing bonds, and other financial instruments in dollars. Meaning the value of the dollar will continue to fall and will probably accelerate.

and falling into line like good little Sheep.

And your fellow DU'ers are Starting to take notice:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6244957

Oh, and I wonder if we are part of the "segment of DUers get off on the idea of American society collapsing into shreds."

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4004569#4004805

Stay out of GD and the cheerleading threads today, kids.

It's an asylum.

People are really drunk on the Kool-Aid that is this morning's news.

Give the Criminals Credit where Credit is due.

They have completely Propagandized most of the Public into submission.

I've never seen a disconnect from Reality like this.

Never.

That's when the TPTB initiate the downturn. The people's money is being sucked into the markets, just in time for them to lose it when the market crashes.

And you and Demeter don't really believe the economy is collapsing. If you did, you'd have gone halfsies on a survivalist compound in Idaho.

:rofl:

And just for that Snark, you don't get to help install the Motion Sensors for the Machine Gun Turrets. :P

:rofl:

:stompingoffinfitofpique:

:P

Michigan is my native land, and I spent 29 years in exile. There ain't no power on earth gonna move me out alive.

And Michigan is good for survival.