STOCK MARKET WATCH, Tuesday May 6

Source: du

STOCK MARKET WATCH, Tuesday May 6, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 260
DAYS SINCE DEMOCRACY DIED (12/12/00) 2662 DAYS
WHERE'S OSAMA BIN-LADEN? 2387 DAYS
DAYS SINCE ENRON COLLAPSE = 2678
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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

---

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

AT THE CLOSING BELL ON May 5, 2008

Dow... 12,969.54 -88.66 (-0.68%)
Nasdaq... 2,464.12 -12.87 (-0.52%)
S&P 500... 1,407.49 -6.41 (-0.45%)
Gold future... 874.10 +16.10 (+1.84%)
30-Year Bond 4.58% +0.02 (+0.35%)
10-Yr Bond... 3.85% UNCH (UNCH)






GOLD,EURO, YEN, Loonie and Silver

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PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

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Read more: du

BY ROB KIRBY

Last week the Federal Reserve’s FOMC (Federal Open Market Committee) met and bestowed upon us their latest decision in monetary policy – a further cut of 25 basis points to lower the Fed Funds rate to 2%.

.....

But with rates again approaching historic lows, economic activity remains stagnant or contracting. Much of this well documented malaise is centered on the housing/sub-prime mortgage bust – where “the hens are coming home to roost” after Mr. Greenspan’s experiment with 1% Fed Funds, circa 2003, inspired reckless borrowing, overbuilding and a flourishing trade in new fangled mortgage derivatives to perpetuate the party.

What’s different about this round of rate cuts?

......

From a purely economic standpoint, much of this money growth is simply “offsetting” money destruction as financial institutions “write down” formerly unimaginable amounts stemming from the realization of “off-balance sheet derivatives losses” on mortgage derivatives.

From a moral standpoint, this money growth has had unconscionable effects: namely, creating inflation and undermining international confidence in the dollar.

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

there was a reason that in some Native American tribes, that men were in charge of war, while the women were in charge of the overall welfare of the tribe, including the ability to decide if the men were allowed to wage the wars they wanted.


The single-mindedness and compartmentalization possible in the male mind have help the human race reach great heights. But unchecked, it comes with the decoupling of morality from a given activity (i.e. Honey, it didn't mean anything, it was just sex).

When that activity is abstracted and removed from affecting daily life - read: sports fandom and participation it can be a necessary and welcome channeling of that energy. But put that same focus and energy into something that affects a "tribe" and you get a Putin, whose single-minded refusal to negotiate with "the enemy" and the Russian troops focus on "following orders" allowed them to open fire on a school full of children and innocent adults just so the "targets" could be eliminated.

Turning that narrow focus to monetary systems and an entire economy, the results are incredibly mixed. Bill Gates amassed an inconceivable amount of money,but only understood the human impact through the guidance of his spouse. The minute parsing of the idea of monetary policy being "helpful" is based wholly on abstract qualities.

Jung would say that,as a culture we have become pathologically disconnected from our anima, or in simplistic pop-lingo, our "feminine side". The advent of women onto the political and economic scene is crippled by the mental and emotional equivalent of footbinding. Shaping the outlook to view single-minded focus and moral disconnect as helpful, desirable traits.

One reads current economic news with a sense of disbelief, followed quickly by pity and a vague and growing sense of despair.

You nailed it.



Tansy Gold, who is trying to determine if anticipated spending $100/week for gas makes a job even worth applying for . . . . (probably not).

That would be great, but $100 week for gas is a lot of money if there are no benefits.

:donut: and lurkers. Good in-site there Talking Dog. I think most of our male posters here are 'in touch' with their feminine side because I see a lot of global thinking in many of the posts on this thread.

I found your examples amusing and sad. I saw that dichotomy of responsibility in both my Mom and Dad's family. I consider both as matriarchal. And frankly, both Grandpas would be the first to admit that they made their biggest mistake not taking their wives council. My maternal Grandparents would discuss matters on long private walks-my paternal Grandparents would discuss thing at the end of the day as they were getting ready for bed. I was so use to having a say that this whole macho thing took me a while to get a handle. Cost me 2 good relationships. My hubby now is Indian and thinks in a totally different way-very global(tribal)and that was a very big breath of fresh air for me. It is a continual give and take, but the bottom line is the care of the household and what is best for the family.

I also find the patriarchy of most churches stifling and it was a while before I found one that I felt welcomed. Most church leaders are quick to say "Wives, submit to your husbands"... (Ephesians 5:21-22)but slow to mention the other "Husbands, love your wives like Christ loved the church and gave himself for her... (Ephesians 5:25). Those words were meant to raise the status of women, not to be twisted to further suppress them. Honestly, it is a good thing to introduce women in the ranks of the church. The last vestiges of male hold overs are politics and big business and goodness know we need more balanced thinking in those areas

Happy hunting and watch out for the bears.

Here's a test to determine what sex your brain is.

http://www.bbc.co.uk/science/humanbody/sex/add_user.shtml

It would be interesting to see how DUers stack up against the general population.

I'm male, yet I scored a 0 - in the absolute middle of the male-female brain continuum.

The Indians were understandably flattered that the US government with its checks and balances was loosely based on their tribal government, but they warned at the time and still do of the danger of eliminating the "grandmother lodge" as a check on belligerence.

That check provided the northern tribes with the peace and stability it took for them to become very prosperous in a hard land. Not having that check has just about bankrupted this country while destroying the finest defensive military in the world.

while the "masculine" focuses (often rather single-mindedly) only on the immediate problem, and often does not see the long-term consequences of actions (the NeoCons are a perfect example of this)

my two cents...



"The mayonnaise jar is -behind- the pickles..."(sigh)

He: Why are people like that? I mean, why would anyone continue to vote for the same kind of politicians as got us into this mess, with Iraq, with the environment, with the economy?

Me: Ask your daughter-in-law; she's one of them.

He: She couldn't answer it, she doesn't know. She's too stupid.

Me: There's your answer.

He: No, not all of them are stupid. Some of them are.

Me: Well, you won't listen to my answer because it would be more than 30 seconds long, and that's all the attention span you have.

He: You're smart, you can distill it down to 30 seconds.

Me: Okay, they're afraid.

He: No, they're not all afraid.

Me: You don't want a long answer. Live with "they're afraid."

He: What are they afraid of?

Me: Change. The unknown.

He: But can't they see that any kind of change has to be better than what we've got?

Me: Then you've never heard of "Stockholm syndrome" or "battered wife syndrome."

He: (throwing hands up) Nope! Never applied to me, never paid any attention to it. Don't even go there.

Me: (shrugging) Well, you wanted an answer and now you don't want to listen to it. Too bad.

He will, of course, spend the entire evening channel surfing between basketball games and baseball games and old western movies, often while talking on the phone to one of his friends about basketball or baseball or old westerns or, alternately, yelling at the tv. I will spend the evening reading Kevin Phillips or Susan Jacoby's "The Age of American Unreason" or something similar so that I have answers -- or at least responses -- to his questions whether he wants to listen or not.

It's very frustrating.


Tansy Gold

SINGAPORE - Oil futures rose to an all-time high near $121 a barrel Tuesday in Asia, fueled by worries about threats to supply and a weakening of the U.S. dollar.

The surge in oil prices was also fueled by hopes that the U.S. economy will be spared a sharp downturn after the release of data Monday showing an unexpected expansion in the U.S. service sector in April, analysts said.

Light, sweet crude for June delivery rose to a record $120.93 a barrel in electronic trading on the New York Mercantile Exchange on Tuesday. The contract later retreated to $120.24 a barrel, up 27 cents from Monday's close.

Crude futures settled on Monday at $119.97 a barrel, up $3.65 from Friday's close.

.....

Amid the occasional threats to crude supplies, global demand for oil continues to grow. While demand for oil and gasoline has been soft in the U.S., the Chinese and Indian economies are growing by double digits, boosting global demand for oil.

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

I believe that, on oil's current trajectory, we now have a target price near $150 by the end of Summer. The charts want the price to head this way. Over the next three months, this is where we should be.

NEW YORK (CNNMoney.com) -- Americans are already paying through the nose for gasoline, and they think it's only going to get worse.

A CNN/Opinion Research Corp. poll found that 94% of respondents expect they will have to pay $4 a gallon sometime this year - and 78% said they figure it will hit $5.

The national average for gasoline was $3.61 on Monday, according to motorist group AAA.

.....

No end in sight

Of course, for some Americans in California, Hawaii, and other western states, $4 gas is already a reality. Gas prices have set record after record, rising 18.4% nationwide this year. Most of that increase has come in the past month.

Last month, the U.S. Department of Energy said that the national average price of gasoline would hit a high of $3.60 this year. But gas prices have already surpassed that forecast well before the typical peak in gasoline prices in June, leading some analysts to raise their forecasts toward a high beyond $4.

http://money.cnn.com/2008/05/05/news/economy/gas_poll/index.htm?postversion=2008050513

JAKARTA, Indonesia - President Susilo Bambang Yudhoyono said Tuesday that Indonesia was considering quitting the Organization of Petroleum Exporting Countries because it was no longer a net oil exporter.

"Our wells are drying," he said in the nationally televised speech, adding that the country needed to concentrate on increasing domestic production, which has dropped to less than a million barrels a day even as consumption rises.

The government opened talks Monday on whether it "should continue to stay with OPEC or withdraw our membership ... until we reach a point where we deserve to rejoin that organization," Yudhoyono told governors and heads of regencies from all over Indonesia.

The country of 235 million people is Southeast Asia's only OPEC member. But it has to import oil because of decades of declining investment in exploration and extraction due to corruption and a weak legal system that makes oil companies wary of doing business here.

http://news.yahoo.com/s/ap/20080506/ap_on_bi_ge/indonesia_opec

Nonexistent just three decades ago, oil production in the deep waters of the Gulf of Mexico now accounts for nearly three-fourths of the offshore region's crude output and has become a vital piece of the nation's energy supply, according to a government report released Monday.

And the region should continue to see strong growth in the years ahead as more projects come on line, the report said.

In 2007, roughly 72 percent of the Gulf's oil production came from wells drilled in 1,000 feet or more of water, the Minerals Management Service report said.

That's up from 70 percent the year before and up from slightly more than 61 percent in 2002, according to agency statistics.

more.....

http://www.chron.com/disp/story.mpl/business/5756290.html

This was why Katrina and Rita were so destructive.

03. Crude rises over $1 to hit new record $121.49 a barrel
9:43 AM ET, May 06, 2008

(at the laundry) when one of my neighbors came in. He is from Greenburg Kansas and had gotten back from all of the festivities (that's another thread), but we were talking gas prices. He drives a company truck but he said the cost of filling up shocks him every time he fills up. It was $160 for him to fill up the other day. I just can't comprehend it. Now imagine a truck payment, a house note, several mouths to feed, honey's car note. No wonder folks feel the squeeze.

just filled up -- $267. Sixty gallon tank, diesel. "You can expect your prices to be going up," he said, without a smile.

This was forecast last week - now comes the reality.

ZURICH, Switzerland - Swiss bank UBS AG announced Tuesday it would cut 5,500 jobs and reported a net loss of 11.5 billion Swiss francs ($10.97 billion) for the first quarter of this year.

This compares with a net profit of 3 billion francs in the same period last year.

The losses translate to 5.63 francs ($5.35) per share, compared with earnings per share of 1.43 francs in the first quarter of 2007.

The bank warned investors last month to expect net losses of 12 billion Swiss francs ($11.42 billion) for the first three months of the year after writing down about $19 billion on U.S. real estate and related credit positions in the period.

Switzerland's largest bank said it will cut 2,600 jobs in its investment banking arm — blamed for the majority of failures that led to a record writedowns of $37.4 billion since last summer. A further 2,900 jobs will be slashed in other parts of the business, bringing the total number of job cuts by mid-2009 to 5,500.

http://news.yahoo.com/s/ap/20080506/ap_on_bi_ge/switzerland_ubs

Greed can short-circuit intelligence.

Which investment bank hired Greenspan as an "adviser"?

yesterday, when the Swiss banks have trouble-we're all in trouble. I forgot the Greenspan thing though. It explains a lot.

Greenspan to be senior adviser to Deutsche Bank -report

NEW YORK, Aug 13 (Reuters) - Former Federal Reserve Chairman Alan Greenspan has been retained as a senior adviser to Deutsche Bank AG's (DBKGn.DE: Quote, Profile, Research) corporate and investment bank unit, according to a report in the Wall Street Journal. Greenspan's appointment is expected to be officially announced on Monday, the Journal said.

Peter Hooper, who served as a Fed staffer during Greenspan's tenure and is now chief U.S. economist for Deutsche Bank Securities, spearheaded Greenspan's appointment as an adviser, the newspaper reported.

.....

Under his advisory role at Deutsche, Greenspan will speak at conferences, attend meetings and take part in conference calls with bank clients, analysts and traders, the Journal reported, but he will steer clear of involvement with Deutsche's asset-management arm to avoid any conflicts with an already established relationship with Pacific Investment Management Co., a unit of Allianz SE

http://www.reuters.com/article/bankingfinancial-SP/idUSN1330274920070813

I wonder if those people are worried if their money is safe?


If the Swiss are having money problems, it must be bad out there.

WASHINGTON - The Federal Reserve reported Monday that more banks are tightening lending standards on home mortgages, other types of consumer loans and business loans in response to a spreading credit crisis.

The Fed said the percentage of banks reporting tighter lending standards was near historic highs for nearly all loan categories.

The survey, conducted in April, found that nearly two-thirds of banks surveyed had tightened lending standards on traditional home mortgages with 15 percent saying those standards had been tightened considerably.

.....

The current credit crisis began last year with rising defaults in the market for subprime loans, loans extended to borrowers with weak credit histories. Many of those subprime loans were packaged into mortgage-backed securities and sold to investors around the world.

.....

As losses have mounted, more and more banks have grown reluctant to make loans and have been tightening up on standards. The Fed has been pumping billions of dollars into the banking system in an effort to encourage banks to keep lending to guard against the threat that the tighter credit could push the country into a deep recession.

http://news.yahoo.com/s/ap/20080505/ap_on_bi_ge/bank_lending

LONDON (Reuters) - Stocks are likely to open steady on Tuesday, pausing after the previous session's sharp sell-off, with investors looking ahead to results from the technology, housing and consumer sectors.

Results after Wall Street's closing bell from Cisco Systems (CSCO.O) will likely be the highlight of the earnings calendar.

Insight into the mindset of U.S. consumers will come from results from Sara Lee (SLE.N), maker of baked goods, deli meats and sausages, and from cosmetics firm Estee Lauder (EL.N) and retailer Walt Disney (DIS.N).

......

From a technical point of view, the Dow Jones Industrial Average's (.DJI) failure to stay above the 13,000 mark -- after breaking above it for the first time in four months last week -- suggested scope for a move lower, said Tom Hougaard, chief market strategist at City Index.

http://news.yahoo.com/s/nm/20080506/bs_nm/markets_stocks_dc

:donut: :donut: :donut:

I am away to teach my young'uns.

:hi:

May 6 (Bloomberg) -- GMAC LLC, the car and home lender struggling to avert bankruptcy for Residential Capital LLC, may keep the mortgage business afloat long enough to find a buyer or break it up.

ResCap, after recording $5.3 billion in losses over the past six quarters, said on May 2 that it is seeking a $3.5 billion loan from GMAC as part of a bigger financing agreement. Less than a month ago, GMAC provided a $750 million credit line.

``That doesn't mean the business is necessarily coming back,'' said Christopher Wolfe, an analyst at Fitch Ratings in New York, which downgraded GMAC and ResCap debt last week. ``Rather than throw everything into a bankruptcy court and everyone scrambles for how to liquidate the assets, maybe you can sell certain assets or parts of the business.''

Unable to lend to subprime borrowers or bring in new business in Europe, ResCap reported an $859 million first-quarter loss last week, wiping out GMAC's profit from its auto-finance business. GMAC is owned by General Motors Corp. and an investor group led by Cerberus Capital Management LP.

The subprime meltdown has forced more than 100 mortgage companies to suspend operations, close or sell themselves since the start of 2007. Lenders including New Century Financial Corp. and American Home Mortgage Investment Corp. have gone bankrupt, while Countrywide Financial Corp. agreed to be bought.

Facing a dwindling supply of cash, ResCap, the eighth- largest U.S. residential lender in 2007, started offering as little as 80 cents on the dollar yesterday to exchange or buy back $14 billion of bonds that will push back maturities until 2010 or 2015.

GMAC's Contribution

GMAC, which has already injected more than $2 billion into ResCap, is negotiating terms of a $3.5 billion loan and hasn't committed to the financing. ResCap also wants GMAC to contribute $350 million of ResCap notes outstanding to the mortgage lender by the end of the month and give it $150 million more under an existing credit facility.

Even with the funding, ResCap said yesterday that it may not be able to meet debt obligations unless it comes up with an additional $600 million by the end of June. GMAC is already pursuing asset sales to help meet near-term obligations, spokeswoman Toni Simonetti said.

GMAC may help ResCap avert bankruptcy as it awaits a rebound of either the acquisitions market or the mortgage business, said Mirko Mikelic, portfolio manager at Fifth Third Asset Management, which oversees $22 billion in Grand Rapids, Michigan.

`Very Tough Situation'

``They're just looking to get more time and hopefully one of these markets will recover,'' said Mikelic, whose firm does not own GMAC or ResCap bonds. ``Right now, they're in a very tough situation where they've got a lot of debt coming due and their moves are limited.''

The value of announced U.S. acquisitions fell to $255 billion so far in 2008 from $608 billion in the same period a year earlier, according to Bloomberg data.

Last week, Gimme Credit analyst Kathleen Shanley said in a report that ResCap was on ``deathwatch,'' because it can't pay debt due in 2008. ResCap said yesterday that a ``significant amount'' of its cash has dwindled in recent weeks, and was at $1.8 billion as of Feb. 29, compared with $4.4 billion of unsecured long-term debt maturing this year.

Fitch, Standard & Poor's and Moody's Investors Service cut their ratings on ResCap's debt following the exchange offer. S&P said the company's debt is ``highly vulnerable to nonpayment.''

GMAC's Roots

GMAC, formed by GM in 1919 to make it easier for customers to buy vehicles, entered the mortgage business in 1985. From 2002 to 2005, GM made more money from auto loans and mortgages than from building cars and trucks.

GM, the world's largest automaker, sold a 51 percent stake in GMAC to the investor group led by Cerberus in 2006 as part of a plan to protect it from the car company's declining credit outlook. GM has no further obligations to fund GMAC.

``GM has already stepped up but they're not going to want to continue to do that if ultimately ResCap is going to have to file'' for bankruptcy, Mikelic said.

GM spokeswoman Renee Rashid-Merem didn't respond to calls for comment.

ResCap was the nation's eighth-largest home lender in 2007, according to January data from trade publication Inside Mortgage Finance. The year before, at the height of the industry's boom, ResCap ranked 12th among subprime lenders.

Subprime loans are made to people with weak credit and have the highest default rate. Overdue subprime loans set a record last year.

ResCap's $1.75 billion of 6.5 percent notes due in 2013 fell 2.25 cents to 52.25 cents on the dollar yesterday in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes yield 26.8 percent, or about 24 percentage points more than similar-maturity Treasuries, Trace data show.

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

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

Last trade 73.167 Change -0.035 (-0.05%)

Oil Hits Record $120:Trade it with USDCAD

http://www.dailyfx.com/story/topheadline/Oil_Hits_Record__120_Trade_it_1210020710378.html

Commodities are rallying, with oil leading the way. Just today, prices surged to a record $120 per barrel. Skyrocketing crude prices have been a recurring theme in recent months - as stocks fell to risk aversion and the US dollar tumbled, traders were desperate for a refuge destination to protect their assets. Blossoming demand for commodity imports from emerging markets such as India and China offered a rare positive story in an otherwise shaken marketplace, attracting huge inflows of speculative capital and leading prices to balloon higher. Crude has gained 22% since January alone. Energy costs have spurred inflation, depressed consumption, and distorted trade figures in nearly every G7 economy. Just as observers were starting to grapple with the idea of oil reaching $100 per barrel, it became apparent that $200 a barrel had nearly arrived.

A recent analysis report prepared by Thomas Mayer and Torsten Slok of Deutsche Bank points to a big difference in returns between commodities and other asset classes from one year ago:



...more...

Service Sector Data Fails to Help the Dollar

http://www.dailyfx.com/story/bio1/Service_Sector_Data_Fails_to_1210023000064.html

The US dollar weakened across the board today despite a stronger than expected non-manufacturing ISM report. As indicated in Friday’s Daily Fundamentals, the strength was not surprising since the service sector added jobs for the third month in a row. Even though the weakness of the US economy and the turmoil in the financial markets suggested further deterioration in the service sector, it remained suspicious that if the contraction exacerbated, hiring would not have increased. For this reason and the fact that non-manufacturing ISM was released after non-farm payrolls, the market did not have a lasting reaction to the number. In the past, non-manufacturing ISM has been very market moving because the employment component of the report is a good leading indicator for non-farm payrolls. The new orders and business activity components of the report also deteriorated, reflecting weakness underneath the headline number. The drop in the US dollar today could have also been attributed to the new record high in oil prices and news from the Federal Reserve that the number of US banks tightening lending to companies and consumers hit a record high. Life is becoming very difficult for the average American and that strain is being reflected in the dollar. However with the European Central bank and Bank of England interest rate meetings looming, we still believe that the US dollar could resume its rise. Traders just need to be selective of the currency pair they choose to use to express their dollar bullish views. In the meantime, there is no meaningful US economic data until Wednesday.

...more...

http://news.yahoo.com/s/ap/20080506/ap_on_bi_ge/earns_fannie_mae?_ylt=AqoeX6K_L04q5Q80FVor68Fv24cA

WASHINGTON - Fannie Mae said Tuesday it lost $2.2 billion in the first quarter as home-loan delinquencies mounted and home prices declined more sharply than the mortgage finance company had expected.

The company said it expects "severe weakness" in the housing market to continue this year, bringing increased mortgage defaults and foreclosures.

Fannie Mae, the largest U.S. buyer and backer of home loans, said it would raise $6 billion by selling new stock. The company will cut its dividend, starting in the third quarter, to 25 cents a share, to generate around $390 million a year.

Fannie Mae's first-quarter loss contrasts with a profit of $961 million in the January-through-March period last year. Fannie Mae reported on Tuesday that the early 2008 loss was equivalent to $2.57 a share. It earned 85 cents a share a year earlier.

...more...

(fixed link on edit)

Fannie and Freddie buy "conforming" mortgages from their originators and then package and sell the mortgages as securities. But these two have a mere $83 billion in capital to support $5 trillion worth of debt and other commitments.

This 60-to-1 ratio is almost twice the 32-to-1 ratio of the highly leverage investment banks and hedge funds. And like any company with hard-to-value assets, Fannie and Freddie have unrealized losses. In their case, those total $20 billion -- they've already taken $9 billion worth so far this year. By 2007 they had guaranteed or invested in $717 billion of subprime and Alt-A loans, up from almost none in 2000. And many of those are not worth that much.


http://www.bloggingstocks.com/2008/05/06/fannie-and-freddie-60-to-1-leverage-could-drive-1-trillion-bail/


Simply amazing.

Wondering.

By the way, when the password prompt comes up, just hit cancel and you can get right on through.


5/6/08 The Fed is Getting Desperate in Dealing with a Liquidity Crunch that Shows Little Signs of Relenting by Nouriel Roubini

Financial markets – especially the equity markets – have somewhat recovered since the financial markets reached a point of near meltdown around the time of Bear Stearns collapse. But the strains in money markets and credit markets remain severe and show little sign of improvement.

In mid-March – at the peak of the crisis - the Fed did not just partially bail out the Bear Stearns shareholders who would have been totally wiped out in the case of a disorderly collapse of Bear Stearns; more importantly the Fed effectively bailed out JP Morgan that had – like Bear – and still has a massive exposure to the CDS market; it bailed out the creditors of Bear Stearns who would have suffered massive losses if the Fed had not outright bought $29 billion of toxic securities held by Bear; and it effectively bailed out Lehman, Merrill and a good chunk of the shadow financial system as the Bear Stearns bailout – together more importantly with the new TSLF and the PDCF facilities – ensured – for the first time since the Great Depression - that systemically important broker dealers would have access to the lender of last resort support of the Fed. Without these new facilities and the Bear bailout a generalized run on many institutions of the shadow banking system would have occurred.

While the extreme tail risk of a systemic financial meltdown – and we were in mid-March one epsilon away from such a generalized run on most of the shadow banking system – was avoided by the trifecta of the Bear Stearns bailout, and the creation of the TSLF and the PDCF facilities the stresses in the financial markets – liquidity and credit crunch - remain severe as even the FOMC had to admit in its latest statement.

Let us analyze in more detail in which ways this liquidity crunch remains severe and persistent…
.
.
.
So the liquidity crunch remains severe in spite of all of the extreme policy actions by the Fed and other central banks. In forthcoming note we will show why the recent stock market rally is just a bear market sucker’s rally; and why the credit crunch is getting worse rather than getting better. The worst is still ahead of us both for the real economy that is spinning into a more severe recession and for financial markets where unrecognized losses are much larger ahead than the losses that have been already recognized.

lots more...
http://www.rgemonitor.com/blog/roubini/252573/

no amount of bailing will keep the ship afloat...

LOS ANGELES — As Iron Man smashed its way to $201 million in worldwide box office sales, Marvel Entertainment raised its profit forecast Monday for the year and promised to release Iron Man 2 in 2010.

The film was the first that Marvel financed and was the culmination of a five-year plan to break from its strategy of licensing its top comic book heroes to other studios.

"This is clearly a transformative time for Marvel," Marvel Studios chairman David Maisel told analysts on a conference call. "It was important for us to get much more control of our destiny and the ability to green-light and make these movies on a predictable basis."

The company said its improved forecast did not include upside from the box office success of Iron Man, only its better-than-expected first-quarter performance.

more....

http://www.chron.com/disp/story.mpl/business/5756216.html

Some of the fattest people in America are among the poorest.
And with food prices rising, the problem is likely to get worse.

Tianna Gaines, who describes herself as impoverished and obese, knows this. At 5-foot-3 and 242 pounds, she lives on public assistance in Frankford and eats junk food because it's cheap and more readily available in her neighborhood than carrots and apples.

Besides, said Gaines, 28, and a mother of three, "I don't have the money for Bally's fitness clubs. And I can't run here. They shoot you."

More poor people may suffer Gaines' fate, with the U.S. Department of Agriculture predicting food prices will be up 4.5 percent throughout the year, due to high fuel costs, weather problems, and the growing diversion of corn crops to make ethanol. Globally, prices will rise nearly 50 percent, according to the president's Council of Economic Advisers.

More....


http://www.philly.com/inquirer/home_top_stories/20080506_Food_costs_likely_to_boost_obesity_in_poor.html

And one day soon, the Food Channel will be the new porn.

by Bob Marley

(some thought Marley might have been referencing physical, spiritual and intellectual hunger)

Na-na na na-na na na na;
Na-na na na-na na na na;
Na-na na na-na na na na;
Na-na na na-na na na na.

Them belly full, but we hungry;
A hungry mob is a angry mob.
A rain a-fall, but the dirt it tough;
A pot a-cook, but you no 'nough.

You're gonna dance to Jah music, dance;
We're gonna dance to Jah music, dance, oh-ooh!

Forget your troubles and dance!
Forget your sorrows and dance!
Forget your sickness and dance!
Forget your weakness and dance!

Cost of livin' gets so high,
Rich and poor they start to cry:
Now the weak must get strong;
They say, "Oh, what a tribulation!"
Them belly full, but we hungry;
A hungry mob is a angry mob.
A rain a-fall, but the dirt it tough;
A pot a-cook, but you no 'nough.

We're gonna chuck to Jah music - chuckin';
We're chuckin' to Jah music - we're chuckin'.

--- Guitar solo ---

A belly full, but them hungry;
A hungry mob is a angry mob.
A rain a-fall, but the dirt it tough;
A pot a-cook, but d' food* no 'nough.
A hungry man is a angry man;
A rain a-fall, but the dirt it tough;
A pot a-yook, but you no 'nough'
A rain a-fall, but the dirt it tough.
A pot a-cook, but you no 'nough;
A hungry mob is a angry mob;
A hungry mob is a angry mob.

http://www.forbes.com/home/2008/05/05/buffett-derivatives-danger-oped-cx_ptp_0506buffett.html

Dow 12,879.73 89.81 (0.69%)
Nasdaq 2,448.97 15.15 (0.61%)
S&P 500 1,399.60 7.89 (0.56%)
10-Yr Bond 3.812% 0.033

NYSE Volume 444,587,250
Nasdaq Volume 254,998,953.125

09:40 am : The major indices open on a modestly lower note, with financial companies (-1.7%) acting as the main drag in the early-going.

Fannie Mae (FNM) is fueling the selling interest after reporting a larger than expected loss, cutting its dividend by 30% and announcing it is raising $6 billion in capital. UBS (UBS) is not helping things either, after announcing it is going to sell $15 billion in mortgage assets to BlackRock (BLK), and will eliminate 5,500 jobs.

Meanwhile, crude oil is continuing its record run, hitting as high as $129.93 per barrel. Crude oil prices have since eased a tad, trading up 0.5% to $120.55 per barrel.DJ30 -88.67 NASDAQ -11.89 SP500 -8.41

more of the corporate subsidy economic stimulus money? Maybe it's in preparation of that gas tax holiday they've all been talking about? :crazy:

:sarcasm:

Driving from Tampa Bay to Myrtle Beach, SC. It will be my first road trip in the new Prius. I just had to pry the keys out of my wife's hot, live hands.

Attention: All stations, rig for ruction! Whoop! Whoop! Whoop!

Index Last Change % change
• DJIA 12892.51 -77.03 -0.59%
• NASDAQ 2452.92 -11.20 -0.45%
• S&P 500 1401.64 -5.85 -0.42%

dollar was gaining strength and the worst was over. What happened? :banghead:

http://www.forbes.com/home/2008/05/05/buffett-index-derivatives-markets-equity-cx_er_rl_0505markets2.html

Was that Chopper Ben hovering over Wall Street, dropping loot?

Dow 13,020.83 Up 51.29 (0.40%)
Nasdaq 2,483.31 Up 19.19 (0.78%)
S&P 500 1,418.26 Up 10.77 (0.77%)
10-Yr Bond 3.893% Up 0.048
NYSE Volume 3,924,206,250
Nasdaq Volume 2,209,484,250

4:15 pm : On Tuesday, stocks got off to a negative start, but eventually ended the day with substantial gains after traders shrugged off record high crude prices, and seemingly bearish headlines out of financials and homebuilders. Specifically, the S&P 500 was down 0.7% shortly after the opening bell, and then steadily climbed higher to finish the day with a 0.8% gain.

Fannie Mae (FNM 30.81, +2.52) said it had a first quarter loss of $2.2 billion, or $2.57 per share, compared with earnings of $0.85 per share in the prior quarter. In an effort to shore up its balance sheet, Fannie is cutting its quarterly dividend by 30% to $0.25 per share and will raise $6 billion in capital. Its shares opened more than 7% lower, but quickly rebounded to finish the day with an advance of 9%. Fannie said that government regulators will be reducing Fannie's capital requirement level to 15% from 20%, which may have aided in the stock's reversal.

UBS (UBS 33.77, -0.54) reported a massive 11.5 billion Swiss francs loss (roughly $11 billion) for its most recent quarter, but the company had preannounced this result so it came as no surprise. UBS did provide some new information, though. UBS is selling $15 billion in mortgage assets to BlackRock (BLK 218.95, +3.55) and plans to eliminate 5,500 jobs by 2009.

Asset management firm Legg Mason (LM 56.30, -6.46) reported its first quarterly loss as a publicly traded company and is raising $1 billion in an equity units offering.

Homebuilder D.R. Horton (DHI 16.85, +0.88) reported a loss of $1.3 billion, or $4.14 per share, compared to its year-ago gain of $51.7 million, or $0.16 per share.

Crude oil remained in focus, with prices hitting an all-time intraday high of $122.73 per barrel before settling at a new all-time closing high of $121.82 per barrel. A Goldman Sachs analyst, who correctly predicted $100 per barrel oil, forecast that prices may spike to $200 a barrel within the next two years on lack of supply, according to reports.

A few months ago the market would have sold off on these headlines, yet it managed to end the day higher at its best level since January -- a testament to improved market sentiment since the Bear Stearns (BSC 10.84, +1.31) bailout in March. The S&P 500 has spiked 13% from its March 17 low, but is still down 3.4% this year.

Eight of the ten economic sectors ended the day in positive territory, with energy stocks posting the largest advance of 2.2%. Oil company Anadarko Petroleum (APC 74.53, +6.39) led the way with a 9.4% spike after it reported better than expected earnings.

Financials also showed strength, rebounding from a 1.9% loss to finish the day with a 0.9% gain. Financials saw buying interest as Fannie Mae's stock recovered.

Defensive sectors were out of favor, with utilities (+0.02%), telecom (-0.1%), health care (-0.04%) and consumer staples (+0.1%) all underperforming on a relative basis.DJ30 +51.29 NASDAQ +19.19 NQ100 +0.8% R2K +0.8% SP400 +0.8% SP500 +10.77 NASDAQ Dec/Adv/Vol 1222/1688/2.14 bln NYSE Dec/Adv/Vol 1168/1934/1.23 bln