The money manipulators only have two goals:
1. The destroy the wealth of every American as much as possible through inflation. While, at the same time trying to pretend they are fighting inflation. They do this by causing boom and bust cycles.
2. To use the financial meltdown to ratchet up their control over all money and credit systems.
Quote from Woodrow Wilson:
A great industrial nation is controlled by its system of credit.Our system of credit is concentrated. The growth of the nation,therefore, and all our activities are in the hands of a few men.
We have come to be one of the worst ruled, one of the most completelycontrolled and dominated governments in the civilized world.No longer a government by free opinion, no longer a government byconviction and the vote of the majority, but a government bythe opinion and duress of a small group of dominant men."Source
" this new power is essential......" "see the train coming and can ACT before......"
Aren't these the SAME BOZO'S who lowerd rates to 1% and kept them there too long and created the current mess and now are proposed NEW POWERS to pre empt markets?
Worse? preverbial FOX in the HENHOUSE! This SMELLS like similar road to Patriot Act
Duratek
Monday, March 31, 2008
Thursday, March 27, 2008
INDIAN GIVER
FGIC Sees No Need to Honor Agreement With IKB, Calyon (Update5)
By Jody Shenn
March 26 (Bloomberg) -- FGIC Corp. said it's walking away from an agreement to provide $1.9 billion in guarantees on mortgage-linked securities because Credit Agricole SA and IKB Deutsche Industriebank didn't live up to their side of the deal.
FGIC ``has no further obligation'' because certain responsibilities weren't met and IKB, the German bank that's had to be bailed out four times since July, misrepresented its condition, the insurer said in a statement today. The three companies are fighting the matter in courts. If FGIC wins, the benefit ``could be material,'' the New York-based company said.
Bond insurers are seeking ways to relieve themselves of guarantees on collateralized debt obligations to temper their losses amid surging mortgage defaults. Security Capital Assurance Ltd.'s XL Capital Assurance Inc. last week was sued by Merrill Lynch & Co. after XL voided obligations on $3.1 billion of CDOs because of what it called a breach in agreements over rights to influence matters such as whether the CDOs should be liquidated.
``These guys should have a new motto: Heads we win, tails we rescind,'' said Julian Mann, the vice president for fixed income at First Pacific Advisors LLC, which manages $3.4 billion of bonds. Mann doesn't oversee positions in bond insurers, he said.
The contracts involved in FGIC's dispute include those that accounted for 75 percent of its loss reserves at the end of 2007, the company said. Fitch Ratings, which today lowered the company's insurance units to BBB from AA, said potential losses account for a ``material percentage'' of what it's projecting for FGIC, and that the tussle may take ``several years'' to settle.
Bank Losses
FGIC, the bond insurer owned by Blackstone Group LP and PMI Group Inc., named Credit Agricole's Calyon Credit Agricole CIB in a related lawsuit filed March 12 in New York Supreme Court. Caylon started court proceedings in the U.K. on March 17 seeking to enforce the contracts, FGIC said.
Joerg Chittka, a spokesman for Dusseldorf-based IKB, Anne Robert, a spokeswoman for Paris-based Credit Agricole, and Seth Faison, a spokesman for FGIC, declined to comment.
CDOs, which repackage mortgage bonds, buyout loans and other assets into new securities with varying risks, have been the biggest source of the more than $208 billion of writedowns and credit losses reported by the world's largest banks and securities firms since the beginning of last year. Credit Agricole's total $6.5 billion, while IKB's are $9 billion.
``Legal technicalities'' may be a big factor as losses are divvied up, JPMorgan Chase & Co. CDO analysts including Chris Flanagan and Kedran Garrison Panageas wrote in a March 24 report.
Risk Management
The disputed FGIC transaction was part of a series of deals in which Caylon agreed to buy CDOs from IKB's off-balance-sheet Rhineland fund if requested, with both FGIC and IKB providing credit guarantees if that happened, according to FGIC's complaint. The deal followed a similar arrangement involving IKB, Ambac Financial Group Inc. and a ``European bank,'' it said.
Bond insurers including FGIC and SCA were stripped of their AAA grades by ratings companies because of expectations for increasing losses on the more than $100 billion of mortgage-tied CDOs on which they provide default protection. Others including New York-based Ambac have been forced to raise capital to maintain top rankings. FGIC earlier this month reported a $1.89 billion fourth-quarter net loss.
IKB, forced into seeking emergency aid after Rhineland couldn't raise money because of its holdings of CDOs tied to U.S. homeowners with poor credit, has received assistance totaling 9 billion euros ($14.1 billion). KfW Group, the state- owned development bank that controls IKB, has provided some.
`Developing Problems'
IKB officials at a January 2007 conference in Las Vegas assured FGIC officials that their bank was the ``top of the class'' in the market for asset-backed commercial-paper conduits such as Rhineland, the insurer's complaint says. Such conduits rely on sales of short-term debt, with a sponsor such as IKB promising to buy out holders of the commercial paper who want to turn in the debt if cash isn't otherwise available.
A closing dinner in Dusseldorf for the transaction involving the Havenrock II vehicle set up by IKB to be the middleman for potential risk-sharing occurred on July 25, ``just three days before IKB announced its financial collapse,'' the complaint said. IKB officials downplayed ``developing problems,'' it said.
Lower Ratings
New York-based Blackstone, manager of the world's largest buyout fund, has written down its FGIC investment to ``a few cents on the dollar,'' President Tony James said March 10. Walnut Creek, California-based PMI, the second-largest U.S. mortgage insurer, reported a $776.1 million expense related to FGIC last quarter. General Electric Co. sold most of FGIC in 2003 for $2.2 billion. Cypress Group and CIVC Partners LP also took stakes.
New York-based Fitch today also downgraded Hamilton, Bermuda-based SCA's insurance units to BB, or six levels below investment grade, from A. The dispute with Merrill also may prove important, it said.
``While Fitch is not in a position to opine on the validity or merits of the termination, Fitch notes that a ruling in SCA's favor could have meaningful positive impact on the company's capital position and credit ratings in the future,'' the firm said in a statement, echoing language in its FGIC release.
Fitch cut the units of SCA and FGIC in January from AAA ratings in January. Moody's Investors Service and Standard & Poor's later did the same for both companies.
By Jody Shenn
March 26 (Bloomberg) -- FGIC Corp. said it's walking away from an agreement to provide $1.9 billion in guarantees on mortgage-linked securities because Credit Agricole SA and IKB Deutsche Industriebank didn't live up to their side of the deal.
FGIC ``has no further obligation'' because certain responsibilities weren't met and IKB, the German bank that's had to be bailed out four times since July, misrepresented its condition, the insurer said in a statement today. The three companies are fighting the matter in courts. If FGIC wins, the benefit ``could be material,'' the New York-based company said.
Bond insurers are seeking ways to relieve themselves of guarantees on collateralized debt obligations to temper their losses amid surging mortgage defaults. Security Capital Assurance Ltd.'s XL Capital Assurance Inc. last week was sued by Merrill Lynch & Co. after XL voided obligations on $3.1 billion of CDOs because of what it called a breach in agreements over rights to influence matters such as whether the CDOs should be liquidated.
``These guys should have a new motto: Heads we win, tails we rescind,'' said Julian Mann, the vice president for fixed income at First Pacific Advisors LLC, which manages $3.4 billion of bonds. Mann doesn't oversee positions in bond insurers, he said.
The contracts involved in FGIC's dispute include those that accounted for 75 percent of its loss reserves at the end of 2007, the company said. Fitch Ratings, which today lowered the company's insurance units to BBB from AA, said potential losses account for a ``material percentage'' of what it's projecting for FGIC, and that the tussle may take ``several years'' to settle.
Bank Losses
FGIC, the bond insurer owned by Blackstone Group LP and PMI Group Inc., named Credit Agricole's Calyon Credit Agricole CIB in a related lawsuit filed March 12 in New York Supreme Court. Caylon started court proceedings in the U.K. on March 17 seeking to enforce the contracts, FGIC said.
Joerg Chittka, a spokesman for Dusseldorf-based IKB, Anne Robert, a spokeswoman for Paris-based Credit Agricole, and Seth Faison, a spokesman for FGIC, declined to comment.
CDOs, which repackage mortgage bonds, buyout loans and other assets into new securities with varying risks, have been the biggest source of the more than $208 billion of writedowns and credit losses reported by the world's largest banks and securities firms since the beginning of last year. Credit Agricole's total $6.5 billion, while IKB's are $9 billion.
``Legal technicalities'' may be a big factor as losses are divvied up, JPMorgan Chase & Co. CDO analysts including Chris Flanagan and Kedran Garrison Panageas wrote in a March 24 report.
Risk Management
The disputed FGIC transaction was part of a series of deals in which Caylon agreed to buy CDOs from IKB's off-balance-sheet Rhineland fund if requested, with both FGIC and IKB providing credit guarantees if that happened, according to FGIC's complaint. The deal followed a similar arrangement involving IKB, Ambac Financial Group Inc. and a ``European bank,'' it said.
Bond insurers including FGIC and SCA were stripped of their AAA grades by ratings companies because of expectations for increasing losses on the more than $100 billion of mortgage-tied CDOs on which they provide default protection. Others including New York-based Ambac have been forced to raise capital to maintain top rankings. FGIC earlier this month reported a $1.89 billion fourth-quarter net loss.
IKB, forced into seeking emergency aid after Rhineland couldn't raise money because of its holdings of CDOs tied to U.S. homeowners with poor credit, has received assistance totaling 9 billion euros ($14.1 billion). KfW Group, the state- owned development bank that controls IKB, has provided some.
`Developing Problems'
IKB officials at a January 2007 conference in Las Vegas assured FGIC officials that their bank was the ``top of the class'' in the market for asset-backed commercial-paper conduits such as Rhineland, the insurer's complaint says. Such conduits rely on sales of short-term debt, with a sponsor such as IKB promising to buy out holders of the commercial paper who want to turn in the debt if cash isn't otherwise available.
A closing dinner in Dusseldorf for the transaction involving the Havenrock II vehicle set up by IKB to be the middleman for potential risk-sharing occurred on July 25, ``just three days before IKB announced its financial collapse,'' the complaint said. IKB officials downplayed ``developing problems,'' it said.
Lower Ratings
New York-based Blackstone, manager of the world's largest buyout fund, has written down its FGIC investment to ``a few cents on the dollar,'' President Tony James said March 10. Walnut Creek, California-based PMI, the second-largest U.S. mortgage insurer, reported a $776.1 million expense related to FGIC last quarter. General Electric Co. sold most of FGIC in 2003 for $2.2 billion. Cypress Group and CIVC Partners LP also took stakes.
New York-based Fitch today also downgraded Hamilton, Bermuda-based SCA's insurance units to BB, or six levels below investment grade, from A. The dispute with Merrill also may prove important, it said.
``While Fitch is not in a position to opine on the validity or merits of the termination, Fitch notes that a ruling in SCA's favor could have meaningful positive impact on the company's capital position and credit ratings in the future,'' the firm said in a statement, echoing language in its FGIC release.
Fitch cut the units of SCA and FGIC in January from AAA ratings in January. Moody's Investors Service and Standard & Poor's later did the same for both companies.
Wednesday, March 26, 2008
THEY'RE HIRING!!
NEW YORK, March 26 (Reuters) -
The Federal Deposit Insurance Corp plans to hire as many as 138 new workers to address the potential for rising bank failures, the Wall Street Journal said in its March 26 edition.
An agency spokesman said the FDIC plans to boost the number of workers in its Division of Resolutions & Receiverships to as many as 380 from the current 223, the newspaper said. The division is authorized to have 242 workers, so hiring may involve 138 new positions, of which half will be temporary, it said. Last month, speaking at the Reuters Regulation Summit in Washington, D.C., FDIC Chairman Sheila Bair said she expected bank failures to rise, but mainly among smaller institutions. The FDIC is also hiring because of the expected retirement of some employees, the newspaper said. At year-end, the agency had put 76 FDIC-insured banks with $22.2 billion of assets on its "problem list," up from 65 institutions with $18.5 billion of assets at the end of the third quarter. Only five U.S. banks have failed since 2004, including two this year. Analysts have predicted the failure rate will grow as losses from soured mortgages and other loans mount, and as regulators crack down on lenders that take too much risk. There are 8,535 banking institutions insured by the FDIC. Of these, 7,266 are commercial banks, 1,258 are thrifts and 11 are U.S. branches of foreign banks. More than 2,000 banks nationwide failed in the decade ending in 1992, encompassing the heart of the savings-and-loan crisis
AND
"A Dead Housing Bounce" - Wall Street applauded a glimmer of hope from a national home sales report on Monday, even though experts cautioned that the beleaguered real estate market is far from reaching its bottom.
The National Association of Realtors said 2.9 percent more homes changed hands in February than in January - the first time since July that sales volume increased month-to-month. That surprising news, combined with a higher sale price for struggling investment bank Bear Stearns, was enough to spark a stock market rally, despite the fact that home prices continued to tumble and year-to-year sales volume plunged. No one else was breaking out the Champagne. "It's a dead housing bounce," said Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, referring to the "dead cat bounce," a slight, temporary increase in a stock price that has already plummeted. "It is not a recovery. It is wrong to interpret it that way. Wall Street will grasp at any straw." Indeed, the rest of the national real estate report was grim, while a separate report on California home sales also was largely downbeat. Nationwide, a seasonally adjusted total of 5.03 million existing homes (including single-family, townhouses, condos and co-ops) closed escrow in February, NAR said. That was down 23.8 percent from 6.6 million homes in February 2007, but up 2.9 percent from 4.89 million units in January. Even the perpetually upbeat Realtors group declined to crow about the report. "You don't want to read too much into one month's number," said Paul Bishop, managing director of research for the trade group in Washington, D.C. Still, he said, it's a good sign that monthly national home sales have hovered around the 5 million mark since September. "Short of some other unexpected events that irk the housing market, that may be a sign we're scraping along the bottom before we experience a little stronger growth later in 2008 or early 2009," he said. Rosen said the report's most important finding was that February's national median sales price was $195,900, down 8.2 percent from $213,500 a year ago. "The (continued) house price decline is really bad news," he said. "Mostly the market is still in freefall." In addition, the median is lower because sellers are pricing their homes more realistically, foreclosures on the market are selling for big discounts, and the mix of homes sold is tilting more toward inexpensive houses. The national Realtors group said total housing inventory fell 3 percent in February to 4.03 million existing units for sale, representing 9.6 months worth of inventory, down from a 10.2-month supply in January. That means that at the current rate of sales, it would take 9.6 months to sell every house now on the market.
The Federal Deposit Insurance Corp plans to hire as many as 138 new workers to address the potential for rising bank failures, the Wall Street Journal said in its March 26 edition.
An agency spokesman said the FDIC plans to boost the number of workers in its Division of Resolutions & Receiverships to as many as 380 from the current 223, the newspaper said. The division is authorized to have 242 workers, so hiring may involve 138 new positions, of which half will be temporary, it said. Last month, speaking at the Reuters Regulation Summit in Washington, D.C., FDIC Chairman Sheila Bair said she expected bank failures to rise, but mainly among smaller institutions. The FDIC is also hiring because of the expected retirement of some employees, the newspaper said. At year-end, the agency had put 76 FDIC-insured banks with $22.2 billion of assets on its "problem list," up from 65 institutions with $18.5 billion of assets at the end of the third quarter. Only five U.S. banks have failed since 2004, including two this year. Analysts have predicted the failure rate will grow as losses from soured mortgages and other loans mount, and as regulators crack down on lenders that take too much risk. There are 8,535 banking institutions insured by the FDIC. Of these, 7,266 are commercial banks, 1,258 are thrifts and 11 are U.S. branches of foreign banks. More than 2,000 banks nationwide failed in the decade ending in 1992, encompassing the heart of the savings-and-loan crisis
AND
"A Dead Housing Bounce" - Wall Street applauded a glimmer of hope from a national home sales report on Monday, even though experts cautioned that the beleaguered real estate market is far from reaching its bottom.
The National Association of Realtors said 2.9 percent more homes changed hands in February than in January - the first time since July that sales volume increased month-to-month. That surprising news, combined with a higher sale price for struggling investment bank Bear Stearns, was enough to spark a stock market rally, despite the fact that home prices continued to tumble and year-to-year sales volume plunged. No one else was breaking out the Champagne. "It's a dead housing bounce," said Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, referring to the "dead cat bounce," a slight, temporary increase in a stock price that has already plummeted. "It is not a recovery. It is wrong to interpret it that way. Wall Street will grasp at any straw." Indeed, the rest of the national real estate report was grim, while a separate report on California home sales also was largely downbeat. Nationwide, a seasonally adjusted total of 5.03 million existing homes (including single-family, townhouses, condos and co-ops) closed escrow in February, NAR said. That was down 23.8 percent from 6.6 million homes in February 2007, but up 2.9 percent from 4.89 million units in January. Even the perpetually upbeat Realtors group declined to crow about the report. "You don't want to read too much into one month's number," said Paul Bishop, managing director of research for the trade group in Washington, D.C. Still, he said, it's a good sign that monthly national home sales have hovered around the 5 million mark since September. "Short of some other unexpected events that irk the housing market, that may be a sign we're scraping along the bottom before we experience a little stronger growth later in 2008 or early 2009," he said. Rosen said the report's most important finding was that February's national median sales price was $195,900, down 8.2 percent from $213,500 a year ago. "The (continued) house price decline is really bad news," he said. "Mostly the market is still in freefall." In addition, the median is lower because sellers are pricing their homes more realistically, foreclosures on the market are selling for big discounts, and the mix of homes sold is tilting more toward inexpensive houses. The national Realtors group said total housing inventory fell 3 percent in February to 4.03 million existing units for sale, representing 9.6 months worth of inventory, down from a 10.2-month supply in January. That means that at the current rate of sales, it would take 9.6 months to sell every house now on the market.
Tuesday, March 25, 2008
Monday, March 24, 2008
Sunday, March 23, 2008
IT'S DIFFERENT THIS TIME
http://arhaus.com/ Higher end home furn...salesman told me biz off more than 50%....
Area eateries
http://www.baltimoresun.com/business/bal-te.bz.smallbiz23mar23,0,7798947.story
Marco and Petra Pineyro, owners of Kiko's Mexican Restaurant in Perry Hall, tried everything to keep their restaurant running amid the worsening economy - they sought marketing advice, lowered prices and even offered a "dinner for a nickel" special.But squeezed between skyrocketing food, electricity and labor costs, as well as penny-pinching consumers who are eating out less, the Pineyros reached the end of the line. Kiko's - which had received good reviews from food critics and was named "Best Mexican Restaurant" in 2006 by Baltimore Magazine - is closing March 31, exactly three years after it opened.
FED policy working? 30-year mortgage rates move to 6.13% from 6.03%
Trickle down? http://www.baltimoresun.com/business/realestate/bal-bz.supplier20mar20,0,5756073.story
Fewer exhibitors and visitors have registered for this year's Builder Mart in Timonium, a little over 6,000 compared with more than 7,000 last year, amid the downturn for the homebuilding industry. (Sun photo by Kim Hairston / March 19, 2008)
Shelter Systems, a Westminster company that makes roof and floor trusses, had 220 employees in 2005. Now? Ninety.
Here come the lawsuits blame game
Bear Stearns Lawsuit
Explore Recovery Options for Losses From Bear Stearns Collapse.
http://www.stockbrokerfraudblog.com/
Moving BACK HOME
MILWAUKEE - After being laid off from her job as an events planner at an upscale resort, Jo Ann Bauer struggled financially. She worked at several lower-paying jobs, relocated to a new city and even declared bankruptcy.Then in December, she finally accepted her parents' invitation to move into their home -- at age 52. "I'm back living in the bedroom that I grew up in," she said.
BAIL ME OUT
Calls grow for U.S. to bail out homeowners, prevent foreclosures
Los Angeles Times Staff WriterFrom Wall Street to Capitol Hill, calls are growing for the government to get into the mortgage business as the only way out of the housing crisis roiling the economy and the financial markets. Proposals to shore up tottering home loans with taxpayer...
SEC ASLEEP
Securities and Exchange Commission Chairman Christopher Cox was asked on March 11 if he was concerned about the financial condition of Bear Stearns Cos.''We have a good deal of comfort about the capital cushions at these firms at the moment,'' Cox told reporters in Washington.Three days later, the Federal Reserve said it was pumping emergency funds into the 85-year-old securities firm through JPMorgan Chase & Co., the third-biggest U.S. bank by assets
EARLY EASTER DOESNT HELP
NEW YORK - The nation's stores are awash with orange patent leather sandals and coral printed dresses, but gray or black would be a better match to shoppers' moods these days."The climate out there is frightening," said Judith Lederman, a public relations executive who was laid off from Lord & Taylor three weeks ago. The Scarsdale, N.Y. resident says she'll bypass the mall and dig into her closet for her spring wardrobe.
COMMERCIAL SPACE
If anyone needed further proof that the economy is heading into recession, several reports on commercial real estate provide it, including one released Thursday that showed Chicago is not immune to a downturn in demand for office space."The housing recession is now migrating into other parts of the economy, and we are seeing a drop in employment," said Paul Kasriel, chief economist for Northern Trust Co. "That is going to lower the demand for office space."Jones Lang LaSalle's "Skyline Review," released Thursday, said Chicago's office market may get through 2008 without too much damage, but that 2009 will likely be much worse.The company said downtown Chicago's vacancy rate for top-quality offices is now a little below 8 percent."An economic downturn coupled with significant new inventory could push the Class A vacancy rate back up to 11 percent by late 2009," said Rena Christofidis, vice president of Chicago Market Research at Jones Lang.
HISTORIC ACTION
Wall Street firms take emergency Fed loans
Associated Press
Associated Press WASHINGTON—Big Wall Street investment companies are taking advantage of the Federal Reserve's unprecedented offer to secure emergency loans, the central bank reported Thursday. The lending is part of a major effort by the Fed...
BEAT EST GAME *(even though A..its acct fiction and B....they fell 50%)
Morgan Stanley 1Q Profit Tops Estimates
AP Business WriterMorgan Stanley posted better-than-expected quarterly earnings on Wednesday, joining those from two of its rivals and indicating that Wall Street may be getting a better grip on the credit crisis. The nation's second-largest investment bank was able to...
HOW THEY SPIN THE FRAUD EARNINGS and HUGE YR/YR DROP
Morgan Stanley Earnings Raise Wall Street Hopes
Associated PressMorgan Stanley posted better-than-expected quarterly earnings on Wednesday, joining those from two of its rivals and indicating that Wall Street may be getting a better grip on the credit crisis. The nation's second-largest investment bank was able to...
Help is around the corner
NEW YORK - A rise in jobless claims and a drop in a key forecasting gauge provided the latest evidence that the U.S. economy is faltering and may be slipping into recession.
The Conference Board, a business-backed research group, said yesterday that its index of leading economic indicators fell in February for the fifth consecutive month. The index, which is designed to forecast where the nation's economy is headed in the next three to six months, dipped 0.3 percent to 135.0 in February after slumping 0.4 percent the month before.
HOME LOANS HARDER TO GET
WASHINGTON - Just when consumers and the U.S. economy need banks to lend more freely, the mortgage industry is making it harder to borrow - even for those with good credit.
http://www.baltimoresun.com/business/bal-bz.crunch21mar21,0,3806827.story
*The deleveraging has begun, and credit CONTRACTION.....any efforts will only make it worse, IMHO
Duratek
Area eateries
http://www.baltimoresun.com/business/bal-te.bz.smallbiz23mar23,0,7798947.story
Marco and Petra Pineyro, owners of Kiko's Mexican Restaurant in Perry Hall, tried everything to keep their restaurant running amid the worsening economy - they sought marketing advice, lowered prices and even offered a "dinner for a nickel" special.But squeezed between skyrocketing food, electricity and labor costs, as well as penny-pinching consumers who are eating out less, the Pineyros reached the end of the line. Kiko's - which had received good reviews from food critics and was named "Best Mexican Restaurant" in 2006 by Baltimore Magazine - is closing March 31, exactly three years after it opened.
FED policy working? 30-year mortgage rates move to 6.13% from 6.03%
Trickle down? http://www.baltimoresun.com/business/realestate/bal-bz.supplier20mar20,0,5756073.story
Fewer exhibitors and visitors have registered for this year's Builder Mart in Timonium, a little over 6,000 compared with more than 7,000 last year, amid the downturn for the homebuilding industry. (Sun photo by Kim Hairston / March 19, 2008)
Shelter Systems, a Westminster company that makes roof and floor trusses, had 220 employees in 2005. Now? Ninety.
Here come the lawsuits blame game
Bear Stearns Lawsuit
Explore Recovery Options for Losses From Bear Stearns Collapse.
http://www.stockbrokerfraudblog.com/
Moving BACK HOME
MILWAUKEE - After being laid off from her job as an events planner at an upscale resort, Jo Ann Bauer struggled financially. She worked at several lower-paying jobs, relocated to a new city and even declared bankruptcy.Then in December, she finally accepted her parents' invitation to move into their home -- at age 52. "I'm back living in the bedroom that I grew up in," she said.
BAIL ME OUT
Calls grow for U.S. to bail out homeowners, prevent foreclosures
Los Angeles Times Staff WriterFrom Wall Street to Capitol Hill, calls are growing for the government to get into the mortgage business as the only way out of the housing crisis roiling the economy and the financial markets. Proposals to shore up tottering home loans with taxpayer...
SEC ASLEEP
Securities and Exchange Commission Chairman Christopher Cox was asked on March 11 if he was concerned about the financial condition of Bear Stearns Cos.''We have a good deal of comfort about the capital cushions at these firms at the moment,'' Cox told reporters in Washington.Three days later, the Federal Reserve said it was pumping emergency funds into the 85-year-old securities firm through JPMorgan Chase & Co., the third-biggest U.S. bank by assets
EARLY EASTER DOESNT HELP
NEW YORK - The nation's stores are awash with orange patent leather sandals and coral printed dresses, but gray or black would be a better match to shoppers' moods these days."The climate out there is frightening," said Judith Lederman, a public relations executive who was laid off from Lord & Taylor three weeks ago. The Scarsdale, N.Y. resident says she'll bypass the mall and dig into her closet for her spring wardrobe.
COMMERCIAL SPACE
If anyone needed further proof that the economy is heading into recession, several reports on commercial real estate provide it, including one released Thursday that showed Chicago is not immune to a downturn in demand for office space."The housing recession is now migrating into other parts of the economy, and we are seeing a drop in employment," said Paul Kasriel, chief economist for Northern Trust Co. "That is going to lower the demand for office space."Jones Lang LaSalle's "Skyline Review," released Thursday, said Chicago's office market may get through 2008 without too much damage, but that 2009 will likely be much worse.The company said downtown Chicago's vacancy rate for top-quality offices is now a little below 8 percent."An economic downturn coupled with significant new inventory could push the Class A vacancy rate back up to 11 percent by late 2009," said Rena Christofidis, vice president of Chicago Market Research at Jones Lang.
HISTORIC ACTION
Wall Street firms take emergency Fed loans
Associated Press
Associated Press WASHINGTON—Big Wall Street investment companies are taking advantage of the Federal Reserve's unprecedented offer to secure emergency loans, the central bank reported Thursday. The lending is part of a major effort by the Fed...
BEAT EST GAME *(even though A..its acct fiction and B....they fell 50%)
Morgan Stanley 1Q Profit Tops Estimates
AP Business WriterMorgan Stanley posted better-than-expected quarterly earnings on Wednesday, joining those from two of its rivals and indicating that Wall Street may be getting a better grip on the credit crisis. The nation's second-largest investment bank was able to...
HOW THEY SPIN THE FRAUD EARNINGS and HUGE YR/YR DROP
Morgan Stanley Earnings Raise Wall Street Hopes
Associated PressMorgan Stanley posted better-than-expected quarterly earnings on Wednesday, joining those from two of its rivals and indicating that Wall Street may be getting a better grip on the credit crisis. The nation's second-largest investment bank was able to...
Help is around the corner
NEW YORK - A rise in jobless claims and a drop in a key forecasting gauge provided the latest evidence that the U.S. economy is faltering and may be slipping into recession.
The Conference Board, a business-backed research group, said yesterday that its index of leading economic indicators fell in February for the fifth consecutive month. The index, which is designed to forecast where the nation's economy is headed in the next three to six months, dipped 0.3 percent to 135.0 in February after slumping 0.4 percent the month before.
HOME LOANS HARDER TO GET
WASHINGTON - Just when consumers and the U.S. economy need banks to lend more freely, the mortgage industry is making it harder to borrow - even for those with good credit.
http://www.baltimoresun.com/business/bal-bz.crunch21mar21,0,3806827.story
*The deleveraging has begun, and credit CONTRACTION.....any efforts will only make it worse, IMHO
Duratek
Thursday, March 20, 2008
HOW TO TELL IF BULL OR BEAR MARKET
CLICK TO ENLARGE
Everyone will have an opinion, you will read and hear all kinds of things, CNBC being the source for most, you will get a horribly slanted opinion.
You may be confused yourself, reading some fundamental pieces which go against the action you see.
We ONLY know a top or bottom is in AFTER THE FACT, so what other than technical data do we have?
ABove I have used LONG TERM moving averages, and when they CROSS each other as shown going UP or DOWN, I PAY ATTENTION!
There is NO fighting it. IN 2003 when the 20 wk crossed the 50 wk and all lined up together rising....going against that is foolish and vice versa, as they are now declining to gether and crossed down....ALL I can deduce is we are early in this bear market.....and I will not know when it's over, until they look like they did in 2003.
YOU can also see/observe how price is SUPPOTED or TURNED BACK (resistance) when touching these moving avg's. YES they mean something....it negates ANY opinion someone might have.
Last Bear had several nice rallies, each ending in MUCH lower prices.
Is it time NOW for one of those (finally) multi week or month rallies? I am not certain, but I notice the Transport average is outperforming here and 600 points above its lows.....the DOLLAR is rallying as commodities fall, does that mean money now comes back to stocks?
We have now a period of CREDIT CONTRACTION....for MANY MANY years it has been EXPANDING (good for bulls) this is serious stuff..
SOme articles of interest
http://www.kwaves.com/kond_overview.htm K waves
http://www.gold-eagle.com/gold_digest_02/droke051602.html Cliff Droke from 2002
credit flow investor eye opener http://www.creditflowinvestor.com/
Duratek
Everyone will have an opinion, you will read and hear all kinds of things, CNBC being the source for most, you will get a horribly slanted opinion.You may be confused yourself, reading some fundamental pieces which go against the action you see.
We ONLY know a top or bottom is in AFTER THE FACT, so what other than technical data do we have?
ABove I have used LONG TERM moving averages, and when they CROSS each other as shown going UP or DOWN, I PAY ATTENTION!
There is NO fighting it. IN 2003 when the 20 wk crossed the 50 wk and all lined up together rising....going against that is foolish and vice versa, as they are now declining to gether and crossed down....ALL I can deduce is we are early in this bear market.....and I will not know when it's over, until they look like they did in 2003.
YOU can also see/observe how price is SUPPOTED or TURNED BACK (resistance) when touching these moving avg's. YES they mean something....it negates ANY opinion someone might have.
Last Bear had several nice rallies, each ending in MUCH lower prices.
Is it time NOW for one of those (finally) multi week or month rallies? I am not certain, but I notice the Transport average is outperforming here and 600 points above its lows.....the DOLLAR is rallying as commodities fall, does that mean money now comes back to stocks?
We have now a period of CREDIT CONTRACTION....for MANY MANY years it has been EXPANDING (good for bulls) this is serious stuff..
SOme articles of interest
http://www.kwaves.com/kond_overview.htm K waves
http://www.gold-eagle.com/gold_digest_02/droke051602.html Cliff Droke from 2002
credit flow investor eye opener http://www.creditflowinvestor.com/
Duratek
BUBBLE VISION SAYS "Recession is over" ??
FEDEX
For its fiscal fourth quarter, FedEx sees earnings per share of $1.60 to $1.80, which is tantamount to a warning given that the current consensus estimate is $1.95. FedEx said its guidance assumes no additional increases to current fuel prices and no further weakening in the economy.
"Looking ahead to our fiscal 2009, we are expecting a continuation of fourth quarter trends, which would result in limited earnings growth next year. We are scrutinizing all expenses and investments to realign them with the current environment."
"Looking ahead to our fiscal 2009, we are expecting a continuation of fourth quarter trends, which would result in limited earnings growth next year. We are scrutinizing all expenses and investments to realign them with the current environment."
A BUST in commodities isn't necessarily a GOOD THING
COMMODITY BUBBLE POPPED??
DCR DUG GAPPING!! BUBBLE POPPED? Is the "last" bubble popping burst?? or is it a PAUSE? oil wheat gold falling like BSC....not much warning before the dive...or sharp correction.
I am honest...I called the above 2 plays...but I also called LONG refiners, and was amiss with timing on 3 of the 4.....falling oil will help their margins...but currently GAS inventories are HIGH...and if R...sales will FALL...as margins had fallen....I still think I will continue keeping on radar for bottoming. I get feeling we have flattish day by EOD....with some swings.....
UNWINDING OF REAL ESTATE and THIS MESS WILL TAKE MUCH LONGER THAN PEOPLE THINK AND CONTINUE TO SPIRAL DOWNWARD AND SPEAD IF HOME VALUES DO SAME FED HAS NOT ENOUGH IN QUIVER TO DERAIL WHAT MUST UNWIND.....RISING COSTS IN SOME THINGS WE NEED.....DEFLATING ASSETS ON OTHER HAND...A VILE CONCOCTION....this smells like K winter has arrived.... was up to near 325% of GDP for total credit mkt debt.....wonder where it is now?
Duratek
I am honest...I called the above 2 plays...but I also called LONG refiners, and was amiss with timing on 3 of the 4.....falling oil will help their margins...but currently GAS inventories are HIGH...and if R...sales will FALL...as margins had fallen....I still think I will continue keeping on radar for bottoming. I get feeling we have flattish day by EOD....with some swings.....
UNWINDING OF REAL ESTATE and THIS MESS WILL TAKE MUCH LONGER THAN PEOPLE THINK AND CONTINUE TO SPIRAL DOWNWARD AND SPEAD IF HOME VALUES DO SAME FED HAS NOT ENOUGH IN QUIVER TO DERAIL WHAT MUST UNWIND.....RISING COSTS IN SOME THINGS WE NEED.....DEFLATING ASSETS ON OTHER HAND...A VILE CONCOCTION....this smells like K winter has arrived.... was up to near 325% of GDP for total credit mkt debt.....wonder where it is now?
Duratek
Wednesday, March 19, 2008
COMMODITY BUBBLE BURST? HEDGIES IN TROUBLE?
The selling of all commodities....GOLD SILVER WHEAT COTTON OIL ETC smells of panic or forced selling to cover other losses.
Stephen Roach
http://www.morganstanley.com/views/gef/archive/2006/20060515-Mon.html
"The world is now in the midst of another bubble -- this one in commodities. It, too, will burst. The only question is when."
Duratek....share with a friend
Stephen Roach
http://www.morganstanley.com/views/gef/archive/2006/20060515-Mon.html
"The world is now in the midst of another bubble -- this one in commodities. It, too, will burst. The only question is when."
Duratek....share with a friend
Monday, March 17, 2008
PIANFUL REMINDER HOW WE GOT HERE
Memo To The Fed: Stop Those Rate Cuts
Robert P. Murphy and Lee Hoskins 03.17.08, 6:00 AM ET
The markets rallied last Tuesday in response to the Fed's growing assistance to holders of mortgage-backed securities. Yet many onlookers are convinced that an aggressive cut in the federal funds rate at the upcoming March 18 meeting is still necessary to avoid a painful recession. In our view, further loosening at this time would be a mistake, and would also send an alarming signal regarding future monetary policy.
The Fed needs to quit chasing declining GDP growth and instead focus on curbing inflation and anchoring inflation expectations. Recent allusions to the stagflation of the 1970s are appropriate. Gold has been hitting all-time nominal highs, and oil prices have shattered the inflation-adjusted record set in 1980 during the Iranian hostage crisis. The dollar, meanwhile, is trading at all-time lows against the euro.
Consumer price inflation was 4.1% in 2007 (the highest in 17 years) while the producer price index rose 7.4%--the most since 1981. Amid these alarming trends on the inflation side, output has stalled. Real GDP grew at a meager rate of 0.6% in the last quarter of 2007, and the private sector shed 101,000 jobs in February. The beginnings of stagflation are upon us.
In response, the Fed has slashed its target rate 2.25 percentage points since September, and has engaged in all manner of novel auction schemes to bolster liquidity, particularly among those holding the bag on soured mortgages. Yet despite momentary blips upward, the stock market and the overall economy continue to slide. Even as the Fed's actions pushed many short-term interest rates below the inflation rate, fixed mortgage rates have begun rising. As inflation expectations gather steam, the Fed will find itself painted into an ever-shrinking corner.
The explanation for all of this is simple yet sobering.
The Fed has abandoned the one thing it can truly control--the long-run increase in price levels--in a self-defeating attempt to keep the economy growing. A good portion of the housing mess itself is the result of Fed policy: In response to the 2000-2001 recession, chairman Alan Greenspan brought the federal funds rate down to a shocking 1% by June 2003, then held it there for a full year. The rate was then steadily ratcheted back up, reaching 5.25% by June 2006.
These actions first helped inflate the home-price bubble and then helped burst it. Naturally, there are many factors--and perhaps even villains--that helped create the housing bubble, but excessively low interest rates were surely a necessary ingredient.
Regardless of past mistakes, the Fed must now make the best of a bad situation. It must stop chasing the financial markets, and even the broader economy. Creating more dollar bills will not add to the nation's wealth, or make workers more productive.
The alleged trade-off between inflation and unemployment--the Phillips Curve--is no guide for action. Yes, an unexpected injection of new money can temporarily boost real output. But once people come to expect the higher rates of price inflation, the Phillips Curve simply shifts; it takes greater and greater injections to achieve the same stimulus. That is how a country becomes trapped in a stagflation spiral.
The painful and costly recessions of the early 1980s were the result of the inflationary policies of the Fed during the 1970s. In contrast, Fed policies during the 1980s and 1990s focused on curbing inflation and maintaining price stability; this shift in focus produced both low inflation and strong, steady real growth. It would be a terrible mistake to throw out that costly victory in an effort to avoid a recession today--one that's already baked in the cake.
The Fed should commit to long-term price stability, and it needs to back up that commitment with action. Recessions will always be with us, but they will be shallow and short when the Fed keeps inflation low and evenly paced. If the Fed continues cutting rates, we will simply get the worst of both worlds: prolonged recession and excessive inflation.
Robert P. Murphy is a senior fellow in business and economic studies at the Pacific Research Institute. Lee Hoskins is a senior fellow at the Pacific Research Institute and a former Cleveland Federal Reserve president.
Robert P. Murphy and Lee Hoskins 03.17.08, 6:00 AM ET
The markets rallied last Tuesday in response to the Fed's growing assistance to holders of mortgage-backed securities. Yet many onlookers are convinced that an aggressive cut in the federal funds rate at the upcoming March 18 meeting is still necessary to avoid a painful recession. In our view, further loosening at this time would be a mistake, and would also send an alarming signal regarding future monetary policy.
The Fed needs to quit chasing declining GDP growth and instead focus on curbing inflation and anchoring inflation expectations. Recent allusions to the stagflation of the 1970s are appropriate. Gold has been hitting all-time nominal highs, and oil prices have shattered the inflation-adjusted record set in 1980 during the Iranian hostage crisis. The dollar, meanwhile, is trading at all-time lows against the euro.
Consumer price inflation was 4.1% in 2007 (the highest in 17 years) while the producer price index rose 7.4%--the most since 1981. Amid these alarming trends on the inflation side, output has stalled. Real GDP grew at a meager rate of 0.6% in the last quarter of 2007, and the private sector shed 101,000 jobs in February. The beginnings of stagflation are upon us.
In response, the Fed has slashed its target rate 2.25 percentage points since September, and has engaged in all manner of novel auction schemes to bolster liquidity, particularly among those holding the bag on soured mortgages. Yet despite momentary blips upward, the stock market and the overall economy continue to slide. Even as the Fed's actions pushed many short-term interest rates below the inflation rate, fixed mortgage rates have begun rising. As inflation expectations gather steam, the Fed will find itself painted into an ever-shrinking corner.
The explanation for all of this is simple yet sobering.
The Fed has abandoned the one thing it can truly control--the long-run increase in price levels--in a self-defeating attempt to keep the economy growing. A good portion of the housing mess itself is the result of Fed policy: In response to the 2000-2001 recession, chairman Alan Greenspan brought the federal funds rate down to a shocking 1% by June 2003, then held it there for a full year. The rate was then steadily ratcheted back up, reaching 5.25% by June 2006.
These actions first helped inflate the home-price bubble and then helped burst it. Naturally, there are many factors--and perhaps even villains--that helped create the housing bubble, but excessively low interest rates were surely a necessary ingredient.
Regardless of past mistakes, the Fed must now make the best of a bad situation. It must stop chasing the financial markets, and even the broader economy. Creating more dollar bills will not add to the nation's wealth, or make workers more productive.
The alleged trade-off between inflation and unemployment--the Phillips Curve--is no guide for action. Yes, an unexpected injection of new money can temporarily boost real output. But once people come to expect the higher rates of price inflation, the Phillips Curve simply shifts; it takes greater and greater injections to achieve the same stimulus. That is how a country becomes trapped in a stagflation spiral.
The painful and costly recessions of the early 1980s were the result of the inflationary policies of the Fed during the 1970s. In contrast, Fed policies during the 1980s and 1990s focused on curbing inflation and maintaining price stability; this shift in focus produced both low inflation and strong, steady real growth. It would be a terrible mistake to throw out that costly victory in an effort to avoid a recession today--one that's already baked in the cake.
The Fed should commit to long-term price stability, and it needs to back up that commitment with action. Recessions will always be with us, but they will be shallow and short when the Fed keeps inflation low and evenly paced. If the Fed continues cutting rates, we will simply get the worst of both worlds: prolonged recession and excessive inflation.
Robert P. Murphy is a senior fellow in business and economic studies at the Pacific Research Institute. Lee Hoskins is a senior fellow at the Pacific Research Institute and a former Cleveland Federal Reserve president.
Sunday, March 16, 2008
JPMorgan to buy Bear for $2 a share
By JOE BEL BRUNO and MADLEN READ, AP Business Writers 1 minute ago
Just four days after Bear Stearns Chief Executive Alan Schwartz assured Wall Street that his company was not in trouble, he was forced on Sunday to sell the investment bank to competitor JPMorgan Chase for a bargain-basement price of $2 a share, or $236.2 million.
The stunning last-minute buyout was aimed at averting a Bear Stearns bankruptcy and a spreading crisis of confidence in the global financial system sparked by the collapse in the subprime mortgage market. Bear Stearns was the most exposed to risky bets on the loans; it is now the first major bank to be undone by that market's collapse.
The Federal Reserve and the U.S. government swiftly approved the all-stock buyout, showing the urgency of completing the deal before world markets opened. The Fed also essentially made the takeover risk-free by saying it would guarantee up to $30 billion of the troubled mortgage and other assets that got the nation's fifth-largest investment bank into trouble.
"This is going to go down in very historic terms," said Peter Dunay, chief investment strategist for New York-based Meridian Equity Partners. "This is about credit being overextended, and how bad it is for major financial institutions and for individuals. This is why we're probably heading into a recession."
JPMorgan Chase & Co. said it will guarantee all business — such as trading and investment banking — until Bear Stearns' shareholders approve the deal, which is expected to be completed during the second quarter. The acquisition includes Bear Stearns' midtown Manhattan headquarters.
JPMorgan Chief Financial Officer Michael Cavanaugh did not say what would happen to Bear Stearns' 14,000 employees worldwide or whether the 85-year-old Bear Stearns name would live on after surviving the Great Depression, two World Wars and a slew of recessions. He told analysts and investors on a conference call that JPMorgan was most interested in buying Bear Stearns' prime brokerage business, which completes trades for big investors such as hedge funds.
At almost the same time as the deal for control of Bear Stearns was announced, the Federal Reserve said it approved a cut in its lending rate to banks to 3.25 percent from 3.50 percent and created another lending facility for big investment banks. The central bank's official meeting is on Tuesday. Before the emergency move to lower the discount rate, which is the rate at which banks lend each other money, the Fed was widely expected to again cut its headline rate by as much as a full point to 2 percent.
"Having taking Bear Stearns out of the problem category, and the strong action by the Federal Reserve, we would anticipate the market will behave quite differently on Monday than it was Thursday or Friday," Cavanaugh said.
Some analysts expected it to be a brutal day for global stocks, nevertheless. Shortly after the news broke, Japan's benchmark Nikkei stock index plunged more than 3 percent in morning trading.
A bankruptcy protection filing of Bear Stearns could have heightened anxiety in world financial markets amid a deepening credit crunch. So far, global banks have written down some $200 billion worth of securities slammed amid the credit crisis — more write-downs could come. Last week, a bond fund controlled by private equity firm Carlyle Group faltered near collapse because of investments linked to mortgage-backed securities.
JPMorgan's acquisition of Bear Stearns represents roughly 1 percent of what the investment bank was worth just 16 days ago. It marked a 93.3 percent discount to Bear Stearns' market capitalization as of Friday, and roughly a 98.8 percent discount to its book value as of Feb. 29.
"The past week has been an incredibly difficult time for Bear Stearns," Schwartz said in a statement. "This represents the best outcome for all of our constituencies based upon the current circumstances."
Wall Street analysts say the bid to rescue Bear Stearns was more than just saving one of the world's largest investments banks — it was a prop for the U.S. economy and the global financial system. An outright failure would cause huge losses for banks, hedge funds and other investors to which Bear Stearns is connected.
After days of denials that it had liquidity problems, Bear was forced into a JPMorgan-led, government-backed bailout on Friday. The arrangement, the first of its kind since the 1930s, resulted in Bear getting a 28-day loan from JPMorgan with the government's guarantee that JPMorgan would not suffer any losses on the deal.
This is not the first time Bear Stearns has earned a place in Wall Street history. A decade ago, Bear Stearns refused to help bail out a hedge fund that was deemed "too big to fail." On Friday, the tables had turned, with the now-struggling investment bank in need of the same kind of aid.
Bear Stearns was founded in 1923 and in recent years was best known for its aggressive investing in mortgage-backed securities — and what was once a cash cow turned into the investment bank's undoing.
In June, two Bear-managed hedge funds worth billions of dollars collapsed. The funds were heavily invested in securities backed by subprime mortgages. Until that point, subprime mortgage-backed securities were immensely popular with investors because of their profitability.
The funds' demise and subsequent problems in the credit markets called into question Bear Stearns' ability to manage its own risk and the leadership ability of then-Chief Executive James Cayne. Critics of the company said Cayne spent too much time away from the office last year playing golf and bridge as the problems unfolded.
Cayne is the same executive who refused to let Bear Stearns provide support as part of a Federal Reserve-led plan to rescue Long-Term Capital Management in 1998. His reticence was said to deeply anger some of his fellow Wall Street CEOs, and the episode came up every time Bear was reported to be in trouble in recent months.
Cayne took over from the legendary Alan "Ace" Greenberg in 1993. Greenberg joined Bear Stearns as a clerk, working his way up through the ranks to eventually take over as CEO in 1978. Greenberg was known for his irreverent style, and his regular memos to employees were turned into a book called "Memos from the Chairman."
Before Greenberg's ascendancy to CEO, Bear Stearns began to expand from its New York roots throughout the 1950s and 1960s, opening international offices and expanding its U.S. operations.
____
AP Business Writers Jeannine Aversa in Washington and Stephen Bernard contributed to this story.
Just four days after Bear Stearns Chief Executive Alan Schwartz assured Wall Street that his company was not in trouble, he was forced on Sunday to sell the investment bank to competitor JPMorgan Chase for a bargain-basement price of $2 a share, or $236.2 million.
The stunning last-minute buyout was aimed at averting a Bear Stearns bankruptcy and a spreading crisis of confidence in the global financial system sparked by the collapse in the subprime mortgage market. Bear Stearns was the most exposed to risky bets on the loans; it is now the first major bank to be undone by that market's collapse.
The Federal Reserve and the U.S. government swiftly approved the all-stock buyout, showing the urgency of completing the deal before world markets opened. The Fed also essentially made the takeover risk-free by saying it would guarantee up to $30 billion of the troubled mortgage and other assets that got the nation's fifth-largest investment bank into trouble.
"This is going to go down in very historic terms," said Peter Dunay, chief investment strategist for New York-based Meridian Equity Partners. "This is about credit being overextended, and how bad it is for major financial institutions and for individuals. This is why we're probably heading into a recession."
JPMorgan Chase & Co. said it will guarantee all business — such as trading and investment banking — until Bear Stearns' shareholders approve the deal, which is expected to be completed during the second quarter. The acquisition includes Bear Stearns' midtown Manhattan headquarters.
JPMorgan Chief Financial Officer Michael Cavanaugh did not say what would happen to Bear Stearns' 14,000 employees worldwide or whether the 85-year-old Bear Stearns name would live on after surviving the Great Depression, two World Wars and a slew of recessions. He told analysts and investors on a conference call that JPMorgan was most interested in buying Bear Stearns' prime brokerage business, which completes trades for big investors such as hedge funds.
At almost the same time as the deal for control of Bear Stearns was announced, the Federal Reserve said it approved a cut in its lending rate to banks to 3.25 percent from 3.50 percent and created another lending facility for big investment banks. The central bank's official meeting is on Tuesday. Before the emergency move to lower the discount rate, which is the rate at which banks lend each other money, the Fed was widely expected to again cut its headline rate by as much as a full point to 2 percent.
"Having taking Bear Stearns out of the problem category, and the strong action by the Federal Reserve, we would anticipate the market will behave quite differently on Monday than it was Thursday or Friday," Cavanaugh said.
Some analysts expected it to be a brutal day for global stocks, nevertheless. Shortly after the news broke, Japan's benchmark Nikkei stock index plunged more than 3 percent in morning trading.
A bankruptcy protection filing of Bear Stearns could have heightened anxiety in world financial markets amid a deepening credit crunch. So far, global banks have written down some $200 billion worth of securities slammed amid the credit crisis — more write-downs could come. Last week, a bond fund controlled by private equity firm Carlyle Group faltered near collapse because of investments linked to mortgage-backed securities.
JPMorgan's acquisition of Bear Stearns represents roughly 1 percent of what the investment bank was worth just 16 days ago. It marked a 93.3 percent discount to Bear Stearns' market capitalization as of Friday, and roughly a 98.8 percent discount to its book value as of Feb. 29.
"The past week has been an incredibly difficult time for Bear Stearns," Schwartz said in a statement. "This represents the best outcome for all of our constituencies based upon the current circumstances."
Wall Street analysts say the bid to rescue Bear Stearns was more than just saving one of the world's largest investments banks — it was a prop for the U.S. economy and the global financial system. An outright failure would cause huge losses for banks, hedge funds and other investors to which Bear Stearns is connected.
After days of denials that it had liquidity problems, Bear was forced into a JPMorgan-led, government-backed bailout on Friday. The arrangement, the first of its kind since the 1930s, resulted in Bear getting a 28-day loan from JPMorgan with the government's guarantee that JPMorgan would not suffer any losses on the deal.
This is not the first time Bear Stearns has earned a place in Wall Street history. A decade ago, Bear Stearns refused to help bail out a hedge fund that was deemed "too big to fail." On Friday, the tables had turned, with the now-struggling investment bank in need of the same kind of aid.
Bear Stearns was founded in 1923 and in recent years was best known for its aggressive investing in mortgage-backed securities — and what was once a cash cow turned into the investment bank's undoing.
In June, two Bear-managed hedge funds worth billions of dollars collapsed. The funds were heavily invested in securities backed by subprime mortgages. Until that point, subprime mortgage-backed securities were immensely popular with investors because of their profitability.
The funds' demise and subsequent problems in the credit markets called into question Bear Stearns' ability to manage its own risk and the leadership ability of then-Chief Executive James Cayne. Critics of the company said Cayne spent too much time away from the office last year playing golf and bridge as the problems unfolded.
Cayne is the same executive who refused to let Bear Stearns provide support as part of a Federal Reserve-led plan to rescue Long-Term Capital Management in 1998. His reticence was said to deeply anger some of his fellow Wall Street CEOs, and the episode came up every time Bear was reported to be in trouble in recent months.
Cayne took over from the legendary Alan "Ace" Greenberg in 1993. Greenberg joined Bear Stearns as a clerk, working his way up through the ranks to eventually take over as CEO in 1978. Greenberg was known for his irreverent style, and his regular memos to employees were turned into a book called "Memos from the Chairman."
Before Greenberg's ascendancy to CEO, Bear Stearns began to expand from its New York roots throughout the 1950s and 1960s, opening international offices and expanding its U.S. operations.
____
AP Business Writers Jeannine Aversa in Washington and Stephen Bernard contributed to this story.
Saturday, March 15, 2008
Friday, March 14, 2008
DAMN LIES AND CPI
http://www.the-tribulation-network.com/denemcgriff/lies.htm
Haaaa no inflation, CPI shows DROP in energy prices?? GO GO
D
Haaaa no inflation, CPI shows DROP in energy prices?? GO GO
D
Thursday, March 13, 2008
GUSHER OF LIES
**(Market note, they'll hold up market for FED meeting.....still in range)
http://www.nytimes.com/2008/03/07/books/07book.html?_r=2&oref=slogin&pagewanted=print excerpt from ‘GUSHER OF LIES”
Also
Oil For WarThursday, March 13, 2008 - Ron Smith
Earlier this week, I mentioned an article in The American Conservative that absolutely blew me away by revealing the astounding amount of fuel being used to continue our failed occupation of Iraq.
Robert Bryce, the author of the piece, informs us that after invading one of the most petroleum-rich countries on the planet, the mighty U.S. military is running on empty, using more than five thousand tanker trucks to haul JP-8 gas – a blended jet fuel used to run both vehicles and aircraft – into Iraq, mostly from a huge refinery complex in Kuwait, but with some that’s run in from Turkey.
Last year alone, says Bryce, who is the managing editor of “Energy Tribune” magazine, the American forces in Iraq burned through more than 1.1 billion gallons of fuel.
“In November 2006,” says Bryce, “a study produced by the U.S. Military Academy estimated that delivering one gallon of fuel to U.S. soldiers in Iraq cost American taxpayers $42 – and that doesn’t include the costs of the fuel itself.”
Bottom line: In the war that Paul Wolfowitz famously predicted would “pay for itself,” the U.S. is spending $923 million per week on fuel-related logistics.
Why is this important? Bryce says, “While the U.S. military chases its own fuel tail in Iraq, a country that sits atop 115 billion barrels of oil – about 9.5 percent of the world’s total – the global energy industry is racing forward with new alliances and deals, many of which would have been unthinkable before the invasion.”
The global balance of power is shifting dramatically according to his analysis, in ways that indicate the effectiveness of militarism in controlling global energy trends is declining. Far from being the sole superpower of recent legend, the U.S. is flailing about in a world where the balance of power is realigning itself in ways that will leave America’s influence substantially diminished.
So much for those best-laid plans, you know, the ones where we invade Iraq and demonstrate to the entire world the futility of opposing our imperial desires.
Unfortunately, “Oil for War,” the article in question, isn’t yet available Online. But we will be talking this afternoon with Robert Bryce about it and also about his new book, “Gusher of Lies: The Dangerous Delusions of Energy Independence.”
WBAL Radio - Baltimorehttp://wbal.com/
http://www.nytimes.com/2008/03/07/books/07book.html?_r=2&oref=slogin&pagewanted=print excerpt from ‘GUSHER OF LIES”
Also
Oil For WarThursday, March 13, 2008 - Ron Smith
Earlier this week, I mentioned an article in The American Conservative that absolutely blew me away by revealing the astounding amount of fuel being used to continue our failed occupation of Iraq.
Robert Bryce, the author of the piece, informs us that after invading one of the most petroleum-rich countries on the planet, the mighty U.S. military is running on empty, using more than five thousand tanker trucks to haul JP-8 gas – a blended jet fuel used to run both vehicles and aircraft – into Iraq, mostly from a huge refinery complex in Kuwait, but with some that’s run in from Turkey.
Last year alone, says Bryce, who is the managing editor of “Energy Tribune” magazine, the American forces in Iraq burned through more than 1.1 billion gallons of fuel.
“In November 2006,” says Bryce, “a study produced by the U.S. Military Academy estimated that delivering one gallon of fuel to U.S. soldiers in Iraq cost American taxpayers $42 – and that doesn’t include the costs of the fuel itself.”
Bottom line: In the war that Paul Wolfowitz famously predicted would “pay for itself,” the U.S. is spending $923 million per week on fuel-related logistics.
Why is this important? Bryce says, “While the U.S. military chases its own fuel tail in Iraq, a country that sits atop 115 billion barrels of oil – about 9.5 percent of the world’s total – the global energy industry is racing forward with new alliances and deals, many of which would have been unthinkable before the invasion.”
The global balance of power is shifting dramatically according to his analysis, in ways that indicate the effectiveness of militarism in controlling global energy trends is declining. Far from being the sole superpower of recent legend, the U.S. is flailing about in a world where the balance of power is realigning itself in ways that will leave America’s influence substantially diminished.
So much for those best-laid plans, you know, the ones where we invade Iraq and demonstrate to the entire world the futility of opposing our imperial desires.
Unfortunately, “Oil for War,” the article in question, isn’t yet available Online. But we will be talking this afternoon with Robert Bryce about it and also about his new book, “Gusher of Lies: The Dangerous Delusions of Energy Independence.”
WBAL Radio - Baltimorehttp://wbal.com/
Saturday, March 01, 2008
FOOLS GOLD
It isn't ALWAYS about what you make, it's about what you DONT lose.
HEAVY SELLING IS COMING< YOU KNOW IT!! I think ususally you get a feeble rebound from 90% down day, we should get EXCELLENT short entry if not in one or add....or not
WHich at some point will lead to a pity rebound of some repute....we can try to find that support level. We already know I think which ETF'S to play.
I think gold is set up for a NASTY retreat, which will lead to one last amazing rise.
In face of dying dollar BELOW ANY KNOWN SUPPORT or known......with only a blind, impotent fool denying inflation....what will FED DO?
As the masses, and most will NEVER wise up to gold......they havent and wont....it will be the playa's betting agaisnt themselves as to how far it can be pushed......then no support and crash......the masses dont see this coming (DOW).....unlike gold, they will eventually DO SOMETHING PANIC and in the FACE of DIRE NEWS.....we wait to buy
Remember, in 70's we did not have China factor, we had "TOO MAN CHASING TOO FEW GOODS" BAMMMMMMMMMMMMMMMMMMMMMMM
Now we have the world's MANUFACTURING KING EXPORTING RISING COSTS INFLATION....from prosperity.....rising wages....SOARING COMMODITY PRICES..............I am on front lines as M2, they can NO Longer eat nor contain the rising costs of raw materials...shipping costs.....as the worst case we have SCANT WAGE GROWTH AND NEGATIVE SAVINGS RATE DEFLATING HOUSING MARKET OIL CRISIS FALLING SPX PROFITS RISING CREDIT DELIQUENCIES RISING TAXES SUB PRIME CONTAGION WORLWIDE FALING WORLD ECONOMIES A US RESERVE CURRENCY FALLING BELOW ANY PREVIOUS KNOWN VALUE
Can you spell S C R E W E D
Duratek
HEAVY SELLING IS COMING< YOU KNOW IT!! I think ususally you get a feeble rebound from 90% down day, we should get EXCELLENT short entry if not in one or add....or not
WHich at some point will lead to a pity rebound of some repute....we can try to find that support level. We already know I think which ETF'S to play.
I think gold is set up for a NASTY retreat, which will lead to one last amazing rise.
In face of dying dollar BELOW ANY KNOWN SUPPORT or known......with only a blind, impotent fool denying inflation....what will FED DO?
As the masses, and most will NEVER wise up to gold......they havent and wont....it will be the playa's betting agaisnt themselves as to how far it can be pushed......then no support and crash......the masses dont see this coming (DOW).....unlike gold, they will eventually DO SOMETHING PANIC and in the FACE of DIRE NEWS.....we wait to buy
Remember, in 70's we did not have China factor, we had "TOO MAN CHASING TOO FEW GOODS" BAMMMMMMMMMMMMMMMMMMMMMMM
Now we have the world's MANUFACTURING KING EXPORTING RISING COSTS INFLATION....from prosperity.....rising wages....SOARING COMMODITY PRICES..............I am on front lines as M2, they can NO Longer eat nor contain the rising costs of raw materials...shipping costs.....as the worst case we have SCANT WAGE GROWTH AND NEGATIVE SAVINGS RATE DEFLATING HOUSING MARKET OIL CRISIS FALLING SPX PROFITS RISING CREDIT DELIQUENCIES RISING TAXES SUB PRIME CONTAGION WORLWIDE FALING WORLD ECONOMIES A US RESERVE CURRENCY FALLING BELOW ANY PREVIOUS KNOWN VALUE
Can you spell S C R E W E D
Duratek
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