sharetrader
Page 2 of 71 FirstFirst 1234561252 ... LastLast
Results 16 to 30 of 1053

Thread: Dow

  1. #16
    Member
    Join Date
    Sep 2002
    Location
    USA
    Posts
    150

    Default

    OMG what a day. The carnage was amazing - look at the LEH volume 260% of normal daily volume. At this rate the LEH mid-year bonus will see staff own all of LEH. **** next staff salary will be simply be in stock bought daily from salary budget.

    As for FNM and FRE they are dust - FRE down 22% today alone. THEY ARE BOTH INSOLVENT/BANKRUPT AS THEIR LIABILITIES EXCEED ASSETS(CAPITAL).

    If the US government steps in to guarantee them the US WILL BE DOWNGRADED. T-BONDS will be dumped in mass. US i-rates will head up.
    The trend is your friend.

  2. #17
    Member
    Join Date
    Sep 2002
    Location
    USA
    Posts
    150

    Default

    If this isn't the prelude to worse to come nothing is.

    http://www.telegraph.co.uk/money/mai...cnspain111.xml

    Spain pulls bond sale amid economic crisis

    By Ambrose Evans-Pritchard
    Last Updated: 10:21pm BST 10/07/2008

    Spain has suspended an auction of sovereign bonds as investors take fright over the country's property crash and accelerating slide into economic crisis.

    Spain has suspended an auction of sovreign bonds as investors take fright over the country's property crash and accelerating slide into economic crisis
    Spanish government officials have been shocked by the intensity of the downturn

    The treasury pulled an expected sale of 15-year bonds after probing the market informally, saying it would wait until credit conditions began to calm down. "We are not facing financing problems. We placed a successful three-year note on Wednesday," said a spokesman.

    Government officials have been shocked by the intensity of the downturn now engulfing the country. Car sales fell 31pc in June, industrial production has fallen 5.5pc over the past year and the collapsing property sector is shedding almost 100,000 jobs a month.

    Miguel Sebastian, the industry minister, said the economy had ground to a halt in the second quarter and was now in "virtual recession"
    The trend is your friend.

  3. #18
    Member
    Join Date
    Sep 2002
    Location
    USA
    Posts
    150

    Default

    More doom and gloom...

    http://www.telegraph.co.uk/money/mai...cnmoney111.xml

    The money tap turns off, leaving the world in short supply

    Last Updated: 12:33am BST 11/07/2008

    The lifeblood of countries' economies is draining away - with grim consequences for us all, writes Ambrose Evans-Pritchard

    The money supply data from the US, Britain, and now Europe, has begun to flash warning signals of a potential crunch. Monetarists are increasingly worried that the entire economic system of the North Atlantic could tip into debt deflation over the next two years if the authorities misjudge the risk.

    The key measures of US cash, checking accounts, and time deposits - M1 and M2 - have been contracting in real terms for several months. A dramatic slowdown in Britain's broader M4 aggregates is setting off alarm bells here.

    Money data - a leading indicator - is telling a very different story from the daily headlines on inflation, now 4.1pc in the US, 3.7pc in Europe, and 3.3pc in Britain.
    # Read more by Ambrose Evans Pritchard
    # More on economics

    Paul Kasriel, chief economist at Northern Trust, says lending by US commercial banks contracted at an annual rate of 9.14pc in the 13 weeks to June 18, the most violent reversal since the data series began in 1973. M2 money fell at a rate of 0.37pc.
    advertisement

    "The money supply is crumbling in the US. There was a very sharp lending contraction in the second quarter lending. If the Federal Reserve is forced to raise rates now to defend the dollar, it would be checkmate for the US economy," he said.

    Leigh Skene from Lombard Street Research said the lending conditions in the US were now the worst since the Great Depression. "Credit liquidation has begun," he said.

    The Fed's awful predicament does indeed have echoes of the early 1930s when the bank felt constrained to tighten into the Slump in order to halt bullion loss under the Gold Standard. Investors - notably foreigners - dictated a perverse policy. Over 4,000 US banks collapsed. This time a de facto "Oil Standard" is boxing in Ben Bernanke. Benign neglect of the dollar has started to backfire. It is pushing up crude, with multiple leverage.

    The monetary picture is highly complex. The different measures - M1, M2, M3, M4 - have all given false signals in the past. Each tells a different tale, and monetarists fight like alley cats among themselves.

    The Federal Reserve stopped paying much attention to the data a long time ago. It has abolished M3 altogether. The US economic consensus is New-Keynesian (dynamic stochastic general equilibrium model). Delving into the money entrails is derided as little better than soothsaying.

    That attitude, retort monetarists, is the root cause of the credit bubble. The money supply almost always gives advance warning of big economic shifts. Those who track the data are now calling on central banks to move with extreme caution. If the rate-setters overreact to an inflation spike caused by oil and food - or confuse today's climate with the early 1970s - they may set off an ugly chain of events.

    "The data is pretty worrying," said Paul Ashworth, US economist at Capital Economics. "US lending is shrinking dramatically in real terms, and we know from the Fed's survey that banks want to tighten further. People are clamouring for higher rates but we think deflation is now the biggest threat. The idea that the Fed should tighten with unemployment soaring is preposterous," he said. The jobless rate jumped from 5pc to 5.5pc in May.

    In Britain, the Shadow Monetary Policy Committee - hosted by the Institute for Economic Affairs, and a refuge for UK monetarists - issued its own alert this week. The focus is on "adjusted M4", which covers loans to "private non-financial corporations" and may offer the best insight into the health of British business.

    The growth rate has dropped from 16.1pc a year ago to minus 0.5pc in April. It is the suddenness of the decline that matters most. The data reeks of recession. Professor Patrick Minford from Cardiff Business School called for an immediate rate cut, arguing that the credit crunch is a more powerful and long-lasting force than the oil inflation.

    Professor Tim Congdon from the London School of Economics said the UK was lurching from boom to bust. "Real money growth is virtually nil. The British economy is taking a thrashing and it is going to get worse. Corporate money balances have contracted 3pc over the last three months, which is double digits on an annualised basis. This is a serious squeeze for companies," he said.

    Mr Congdon warned three years ago that surging M4 would lead to a "dangerous" bubble, which is what occurred. He now fears the MPC will react too late as the process goes into reverse.

    Roger Bootle from Capital Economics said Britain could be facing a "real economic crisis and a financial collapse. The MPC does not have the luxury of waiting until all is absolutely crystal clear. By that time the bird will have flown."

    The eurozone is at a later stage of the credit cycle. Even so, house prices are collapsing in Spain, and falling in Germany and France. German industrial orders have dropped for the last six months in a row. A joint IFO-INSEE survey said eurozone growth had stalled to zero in the second quarter.

    "Consumer lending has fallen off a cliff. It is contracting in real terms," said Hans Redeker, currency chief at BNP Paribas. Core inflation has fallen from 1.9pc to 1.7pc over the last year.

    Unlike the Fed, the European Central Bank keeps a close eye on money data (though not on real M1, now shrinking). It looks at the broader M3 figures. There is a raging debate in Europe over the signals now being sent by this indicator.

    The M3 growth is still 10.5pc, down from 11.5pc in January. However, the data has been badly distorted by the closure of the capital markets. Firms have been forced to draw down existing credit lines from banks, which shows up as M3 growth. (It is the same story with America's M3 since the collapse of the Commercial Paper market).

    "The credit lines are expiring. Companies cannot roll over loans. We are going to see the entire private credit multiplier go into a slowdown," said Mr Redeker.

    Jean-Claude Trichet, the ECB's president, said last week that the M3 data "overstates the underlying pace of monetary expansion". The ECB nevertheless pressed ahead with a rate rise to 4.25pc, setting off a storm of protest. This may go down as one of the most unwise monetary decisions of modern times.

    The strain on eurozone banks is growing by the day. They bid a record $85bn (43bn) at the ECB's last auction for dollars. Only $25bn was available. The spreads on Euribor interbank lending are still at extreme stress levels.

    Few disputes that "global inflation" is taking off. Over 50 countries now face double-digit price rises. Ukraine (29pc), Vietnam (27pc), and the Gulf states are out of control, with Russia (15pc), and India (11pc) close behind. China (7.1pc) is on the cusp. Interest rates are still below inflation across much of the emerging world. This is the driving force behind spiralling commodity prices.

    The oil spike is already squeezing real wages in the Atlantic region. The debate is whether the Fed, Bank of England, and ECB should squeeze them further, trying to off-set energy rises with a deflationary bust in the rest of the economy. If and when oil peaks in this cycle, they may find inflation crashing faster than they dare to imagine.

    The 9th Circle in Dante's Inferno - starring Judas and Brutus - is a frozen lake. Cold can be more frightful than heat. "Blue pinch'd and shrined in ice the spirits stood," (Canto XXXIII). Such awaits the victims of debt deflation.
    The trend is your friend.

  4. #19
    Senior Member
    Join Date
    Jul 2004
    Location
    Palmerston North, New Zealand.
    Posts
    1,294

    Default

    FTSE and CAC taken a hit today (more than 2% down). Oil up and then DOW tomorrow...
    Last edited by Jess9; 11-07-2008 at 12:00 PM. Reason: sp

  5. #20
    Senior Member
    Join Date
    Jul 2004
    Location
    Palmerston North, New Zealand.
    Posts
    1,294

    Default

    yip - would make 4 an interesting market open on Monday, here.

  6. #21
    Senior Member
    Join Date
    Jul 2007
    Location
    North Shore
    Posts
    1,219

    Default

    There seems to be a bit of a recovery due to Bernake basically sayign "They're too big to fail so we'll open the discount window a bit wider".
    Disclaimer: Do not take my posts seriously. They are only opinions.

    AMR has sold all shares and is pursuing property.

  7. #22
    Share Collector
    Join Date
    Mar 2005
    Location
    Porirua
    Posts
    3,866

    Default

    The volatility this morning is pretty spectacular! Any bets on the close? I'll call 11147.

  8. #23
    Senior Member
    Join Date
    Jul 2004
    Location
    Palmerston North, New Zealand.
    Posts
    1,294

    Default

    European markets look like they took another hammering last night - much more than the DOW. As M says, cash is king in such times. Note gold and oil both up sharply.

  9. #24
    Member
    Join Date
    Sep 2002
    Location
    USA
    Posts
    150

    Default

    STOP PRESS.......IndyMac fails....taken over by the FDIC.

    http://www.bloomberg.com/apps/news?p...T7U&refer=home

    IndyMac Seized by U.S. Regulators Amid Cash Crunch (Update2)

    By Ari Levy and David Mildenberg

    July 11 (Bloomberg) -- IndyMac Bancorp Inc. became the second-biggest federally insured financial company to fail today after a run by depositors left the California mortgage lender short on cash.

    The Federal Deposit Insurance Corp. will run a successor institution, IndyMac Federal Bank, starting next week, the Office of Thrift Supervision said in an e-mail today. Customers will have access to funds this weekend via automated teller machines.

    The Pasadena, California-based bank specialized in so-called Alt-A mortgages, which didn't require borrowers to provide documentation on their incomes. Its home state has been among the hardest hit by foreclosures.

    ``Given their focus on Alt-A and a heavy concentration in California, they would have suffered meaningful losses in almost any scenario,'' Brian Horey, president of Aurelian Management LLC in New York, said before the seizure was announced. Aurelian is short-selling IndyMac shares to gain from declines.

    IndyMac becomes the largest OTS-regulated savings and loan to fail and second-biggest financial institution to close behind Continental Illinois in 1984, according to the FDIC.

    The lender racked up almost $900 million in losses as home prices tumbled and foreclosures climbed to a record. California ranked second among U.S. states, with one foreclosure filing for every 192 households in June, 2.6 times the national average.

    Needed `Common Sense'

    Had IndyMac ``applied some common sense and changed their approach to underwriting as the housing market peaked, they might have lived to see the next cycle,'' Horey said.

    After peaking at $50.11 on May 8, 2006, IndyMac shares lost 87 percent of their value in 2007 and another 95 percent this year. The stock fell 3 cents to 28 cents at 4 p.m. New York time today.

    IndyMac came under fire last month from U.S. Senator Charles Schumer, who said lax lending standards and deposits purchased from third parties left it on the brink of failure. In the 11 business days after Schumer explained his concerns in a June 26 letter, depositors withdrew more than $1.3 billion, the OTS said.

    ``This institution failed due to a liquidity crisis,'' OTS Director John Reich said in the statement. ``Although this institution was already in distress, I am troubled by any interference in the regulatory process.''

    IndyMac announced on July 7 that it was firing half its employees. The lender agreed to sell most of its retail mortgage branches to Prospect Mortgage, giving the Northbrook, Illinois based-company more than 60 branch offices with 750 employees. IndyMac also has a retail bank network with 33 branches and $18 billion in deposits, mostly insured by the FDIC.
    The trend is your friend.

  10. #25
    Member
    Join Date
    Sep 2002
    Location
    USA
    Posts
    150

    Default

    http://www.telegraph.co.uk/money/mai...2/cndow112.xml

    ....The fears of a banking crisis gripped Wall Street, Lehman Brothers shares fell 22pc. Investors have been spooked by a filing this week showing that the bank still has $41bn of mortgage debt and other "toxic" Level III assets.

    Lehman now risks the same spiralling loss of confidence that engulfed Bear Stearns, though the Federal Reserve's emergency lending window for broker-dealers offers a lifeline.

    The credit default swaps on Lehman debt leapt 55 basis points to 380, flashing an extreme stress signal.

    The implosion of Fannie and Freddie is disturbing. Neither has exposure to sub-prime loans.

    "The situation is far more serious than Bear Stearns," said Bill King, chief strategist at Ramsey King Securities.

    Under the US stimulus plan the pair have been deployed as lenders of last resort to the housing market, carrying out a quasi-official rescue mission on behalf of Congress since March. Now the rescuers themselves need rescuing.

    Charles Schumer, chair of the Senate banking committee, said: "Fannie Mae and Freddie Mac are too important to go under. If they need additional support, Congress will act quickly."

    If Washington does take on the liabilities of the two, this would double the US Treasury's outstanding debt load at a stroke and raise serious concerns about the triple-A sovereign rating of the US itself.

    There may be no choice. Bill Gross, head of the bond giant Pimco, said a default by the two agencies would set off a "firestorm of intolerable proportions".

    Standard and Poor's said in a recent report that Fannie and Freddie posed "a large contingent fiscal risk: if the risks were to translate into increased government debt, they could hurt US credit standing".

    The markets have already begun to sense danger. The cost of insuring against default on 10-year US Treasury bonds surged from 8 basis points to 15 at one stage yesterday.

    "America's 'AAA' rating has become a joke," said Peter Schiff, head of EuroPacific Capital.

    "I believe the losses from Fannie and Freddie alone could reach $500bn to $1 trillion dollars.

    '' The US government will not be able to meet repayments on its debt once interest rates rise," he said.


    Mr Schiff said a big chunk of the agency debt is held by foreigners. A collapse of confidence could set off a dollar exodus.

    It is unclear if Mr Paulson can delay a state bail-out for long. "There is concern that Fannie, Freddie, and Lehman will not be around on Monday," said one analyst.

    Ironically, Fannie and Freddie shares, having halved in value at one stage, recovered slightly after Mr Paulson's comments. Investors were relieved the agencies might yet be spared a state seizure aimed at limiting "moral hazard".

    This is what occurred in the Nordic financial rescues of the early 1990s, which left shareholders with nothing.
    The trend is your friend.

  11. #26
    Member
    Join Date
    May 2005
    Location
    , , New Zealand.
    Posts
    333

    Default

    Fannie and Freddie make up somewhere around 70% (give or take a bit) of US residential mortgage secondary market.

    Something like $5-7 TRILLION dollars US.

  12. #27
    Senior Member
    Join Date
    Jul 2007
    Location
    North Shore
    Posts
    1,219

    Default

    The Fed are insisting that if any bailout happens it should not benefit shareholders. Pity the only ones holding are the buy-and-hold types, the management probably cashed out their options long ago.
    Disclaimer: Do not take my posts seriously. They are only opinions.

    AMR has sold all shares and is pursuing property.

  13. #28
    Member
    Join Date
    Sep 2002
    Location
    USA
    Posts
    150

    Default

    No worries. The US government is going to print some more US$$$ to bailout Fannie Mae and Freddie Mac. Essentially nationalizing the mortgage companies here. They are getting desperate it seems they have to cobble together another bailout package every other weekend now. remember BSC last March.

    http://www.bloomberg.com/apps/news?p...Y9I&refer=home

    Paulson Seeks Authority to Shore Up Fannie, Freddie (Update2)

    By Brendan Murray and Dawn Kopecki
    Enlarge Image/Details

    July 13 (Bloomberg) -- Treasury Secretary Henry Paulson swung the weight of the federal government behind Fannie Mae and Freddie Mac, the beleaguered companies that buy or finance almost half of the $12 trillion of U.S. mortgages.

    Paulson, speaking on the steps of the Treasury facing the White House, asked Congress for authority to buy unlimited stakes in and lend to the companies, aiming to stem a collapse in confidence. The Federal Reserve separately authorized the firms to borrow directly from the central bank.

    The announcement followed crisis talks between the firms, government officials, lawmakers and regulators, after Fannie Mae and Freddie Mac lost about half their value last week. Paulson and Fed Chairman Ben S. Bernanke are trying to prevent a collapse in the companies that would exacerbate the worst housing recession in 25 years and deepen the economic slowdown.

    Paulson's proposal, which the Treasury anticipates will be incorporated into an existing congressional bill and approved this week, signals a shift toward an explicit guarantee of Fannie Mae and Freddie Mac debt. The two shareholder-owned companies are government-sponsored enterprises, giving investors the indication of an implicit federal backing.

    Making `Explicit'

    ``It is time to recognize that the GSEs were always dependent upon government support and now we must make the implicit explicit,'' said Christopher Whalen, co-founder of independent research firm Institutional Risk Analytics in Torrance, California.

    Paulson proposed that Congress enact legislation giving the Treasury temporary authority to buy equity ``if needed'' in the firms, and to increase their lines of credit with the department from $2.25 billion each. The temporary authority may be for 18 months, a Treasury official told reporters on a conference call on condition of anonymity.

    As lenders retreated from the housing market, Washington- based Fannie Mae and McLean, Virginia-based Freddie Mac have grown to account for more than 80 percent of the home loans packaged into securities.

    Freddie Mac is scheduled to sell $3 billion in short-term notes tomorrow, and Paulson's comments indicate a concern about a collapse in private investors' willingness to fund the firms. The companies issue debt to raise money for their purchases of mortgage securities.

    Bond Sale

    ``This will shore up that debt offering,'' said Paul Miller, an equity analyst at Friedman Billings Ramsey & Co. in Arlington, Virginia. ``They need to make sure that that debt offering goes well and goes very well and they couldn't risk waking up tomorrow and having that offering go poorly.''

    The dollar pared losses after Paulson's statement. The dollar traded at $1.5925 per euro at 7:19 a.m. in Tokyo from a low of $1.5971 and from $1.5938 in late New York on July 11. It bought 106.30 yen, little changed from 106.28 yen at the end of last week.

    Preferred securities tumbled in Asian trading as investors questioned if Freddie and Fannie will be able to continue to pay dividends. Freddie Mac's 5.57 percent preferred lost 39 percent this year and Fannie Mae's 5.5 percent preferred dropped 31 percent.

    President George W. Bush, in a statement, said ``it is crucial that Congress quickly works to enact this legislation.''

    Democratic Lawmaker

    Senator Charles Schumer, a Democrat from New York who chairs the Joint Economic Committee of Congress, praised Paulson's plan, saying it ``is surgical and carefully thought out and will maximize confidence in Fannie and Freddie while minimizing potential costs to U.S. taxpayers.''

    The plan would give Paulson power to buy an unspecified amount of stock in Fannie Mae and Freddie Mac, the official said. He also said he didn't recall any time in the past when the government has taken an equity stake in either company.

    ``We continue to hold more than adequate capital reserves and maintain access to liquidity from the capital market,'' Fannie Mae Chief Executive Officer Daniel Mudd said in a statement today. ``Given the market turmoil, having options to access provisional sources of liquidity if needed will help to strengthen overall confidence in the market.''

    Paulson also proposed that the Fed get a ``consultative role'' overseeing the companies' capital requirements. The Fed said in a separate statement that the New York Fed was approved to make direct loans to Fannie Mae and Freddie Mac at the discount rate, currently 2.25 percent, charged to commercial banks.

    Echoes of Rubin

    The last Treasury secretary to make a statement from the steps of the department was Robert Rubin, who sought to calm investors after the Dow Jones Industrial Average fell 554 points on Oct. 27, 1997.

    Debt sold by Fannie Mae and Freddie Mac ``is held by financial institutions around the world,'' Paulson said today. ``Its continued strength is important to maintaining confidence and stability in our financial system and our financial markets.''

    Paulson sought to ease concerns that taxpayers would foot the bill for a bailout. ``Use of either the line of credit or the equity investment would carry terms and conditions necessary to protect the taxpayer,'' he said.

    Freddie Mac shares tumbled 47 percent in New York Stock Exchange composite trading last week and Washington-based Fannie Mae lost 45 percent of its value, forcing Paulson two days ago to issue a statement of support for the companies in their ``current form.''

    Capital Raised

    The companies have already raised $20 billion to cover losses amid the highest delinquency rates in at least 29 years. Freddie Mac said earlier this month it planned to sell $5.5 billion of equity after it reports earnings next month.

    The cost to protect against a default on the companies' subordinated debt jumped last week. Credit-default swaps linked to Freddie's bonds rose to 251 basis points last week, while contracts on Fannie's increased to 246 basis points, according to CMA Datavision. On July 4, both were at 177 basis point and they started the year at 77. A basis point is 0.01 percentage point.

    Credit-default swaps are financial instruments based on bonds and loans that are used to speculate on a company's ability to repay debt. They pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements. A rise indicates deterioration in the perception of credit quality; a decline, the opposite.

    Credit Ratings

    Senior debt of both companies trades as if they were rated A3 instead of Aaa by Moody's Investors Service, according to data from the rankings firm's credit strategy group.

    Five years ago, Fannie Mae and Freddie Mac paid about 45 basis points more than yields on 10-year Treasuries to borrow, while other corporations paid an average of 119 basis points, the Merrill Lynch & Co. U.S. Corporate Master index shows. Last week, the yield on Freddie Mac's $1 billion of 4.5 percent notes maturing in 2013 rose as high as 102 basis points more than Treasuries, according to data compiled by Bloomberg.
    Last edited by trendy; 14-07-2008 at 12:20 PM.
    The trend is your friend.

  14. #29
    Guru peat's Avatar
    Join Date
    Aug 2004
    Location
    Whanganui, New Zealand.
    Posts
    4,630

    Default

    I agree trendy
    Ben is bringing out the helicopter with Paulson flying shotgun. The end of the USD is just beginning.
    For clarity, nothing I say is advice....

  15. #30
    Junior Member
    Join Date
    May 2007
    Location
    , , .
    Posts
    7

    Default

    I agree, the DOW seems to be finding a little support around the 11000 mark but with a lot of earnings reports this week that will probably be not that flash, I think it will fall further.
    I just don't think anybody has got any good news left out there to bolster confidence in the market.
    Bit of a quagmire the US finds itself in, print more money to prop everything up, which lowers it's value even further, and so the oil producers need more worthless US dollars for their black gold.
    I was fairly sceptical about the oil price, however if there is no good news out of the US I think we will see $150 oil by the end of the week... Gold will continue its rapid climb...

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •