How awesome is it when Lawerence Yun (NAR) Is telling fed to stop cutting rates?Yun offered a caution. “With elevated inflation, the Federal Reserve should be extra careful about further rate cuts,” he said. “Mortgage interest rates, which do not move directly with Fed funds rates, may rise measurably and hurt the housing recovery if inflation gets out of hand. Monetary stimulus is plentiful – what is needed more at this point is a home buyer tax credit to get buyers off the sidelines and prevent the market from overshooting on the downside.”

Written by Bob on 2008-04-22 09:25:01Shop till you drop. I hope I am wrong, but the US consumer will keep on spending every single penny (s)he can grab. It is an addiction. Datz the key: every single penny (s)he can grab. Stagnant income and now the CC (MEWs HELOCs CC maxed out) will change this for a while.

EUR-USD 1.5985With all those corporate currency profits, the risk looms to get addicted to an ever lower dollar…

Written by Guest on 2008-04-22 09:49:18I wouldn\’t be so quick to proffer such a strikingly linear relationship for the impact of speculators on oil. Even if their notional impact is minimal in the market, sometimes it only takes a small shock or addition to destroy an equilibrium. (i.e. they could be the piece of straw that broke the camels back)

Euro above $1.6!!!EUR/USD just broke the 1.6 barrier. Today\’s high so far 1.6006.

I am not so sure people are going to just walk away from homes to the extent NR indicates, even assuming no special assistance comes from the govt. If homeowners start to realize that so many like them are in default, and that it will cost the banks as much to foreclose, maintain, rent the foreclosed property, or repair vandalized empty homes as it does to let homeowners exist in their homes as squatters, or at best at reduced debt repayment schedules. It is a hassle to relocate, especially if one has no job prospects at his new location, and one certainly can\’t afford to buy even a distressed foreclosed house in a new location because he can\’t get loans. If banks decide to become landlords, then the increase in number of rental properties would drive rents down, No? making it even less profitable for banks to rent. I guess this defiance reaction is similar to the loss of individuality that occurs when people become part of a mob.The shape of a recession? How about a gentle \\ ? Just a gradual erosion of standard of living, with just enough foreign money coming in to snap up property, companies, and other hard assets for the US to just chug along just above stall speed,and for a longer time, like a generation?

Oil at 119.50! More rate cuts on the way.

Here\’s more fodder for why we can expect a continued decline. We\’re being braced/programmed for continued decreasing earnings (\"let\’s get rid of the quarterly forecasts\" soon to be followed by the \"let\’s get rid of the yearly forecasts\"). Granted, forecasts are a bit silly, but aren\’t they a big component of the casino, and wouldn\’t backing away from them likely reduce business (primarily transactions)?http://www.bloomberg.com/apps/news?pid=20601109&sid=apQUkLyvXWSA&refer=homeMark (the original? one)

From naked capitalism:Today, we had the biggest bank fundraising announced to date, RBS\’s hugely dilutive £12 billion equity sale (and that\’s in addition to £4 billion of asset sales). Reader Steve pointed us to a key item from the press release: the Scottish bank\’s writedowns are markedly deeper than those taken by US banks to date, suggesting that the worst is not over on this side of the Atlantic. They have marked their US Alt-As at 50% of face, subprime at 38%, and CMBS at 83%. Imagine if US banks marked like this…

12:24Futures Movers: Crude hits new intraday high of $119.74 a barrel

Today: USD makes a new record low; oil makes a new record high.I think further Fed rate cuts will be off the table after next Wednesday, and I’m betting the stock market is not going to like it.

MISS AMERICA,You rather be in the USA. I totally understand. Specially when I count the number of countries where Americans are welcomed these days.

Anti-americanism…There is nothing truly anti-american about stating that the US is less able to correct itself. Thats like remarking that the Soviet Union in the 1970s was unable to take corrective action – it is just an observation. Due to the different form of government and party system it is far more reasonable to expect that the US\’ ability to effect change within itself would be different from another country\’s.For a morbid example just look at the inability for presidents or congress to pass a universal healthcare bill. Most of the other industrialized countries instituted such systems decades ago with the lobbies in the US at the time balking at the \"increase in costs\" such a system would have. If anything depresses wages its the fact that employers have to pay into this fraudulent and the individual still has to pay out of pocket. The US government already doles out more money per capita for health related expenses than canada does… (sigh)Admitting that our system has flaws and taking corrective action regarding them should not be called anti-american, even if the criticism is from someone in another country. If anything, noticing what is wrong and pretending it is okay because of national pride should be considered anti-americanism. In the later example you HURT future generations of americans, the only thing hurt in the former is pride. Regards,KJS (a disheartened american)

@ Written by London STUD on 2008-04-22 11:40:56@ Written by MISS World on 2008-04-22 11:52:01This is good old fashioned prejudice. I would never be anti-(insert person\’s country of origin here) specifically because they were from that country. That shows very close minded thinking and holds society (as in the whole world society in this discussion) back. I would think we should all try to avoid it. Maybe I find it easier to be open to people because I am from America and work in a place where many of my coworkers are from abroad. The funniest part about it (in this context) is I would say they are some of the most pro-America people I have ever met.That is a discussion for another place. I have been away for awhile. Glad to see old comments contributors still sticking around!

When the people of the US can no longer afford to buy the stuff exported from China, how do the Chinese feel about the credit limit on the Chinese Platinum 21st Century Credit Card issued to the US government ? As long as the good people consume, the Chinese extend the limit indefinitely to the US government. Now the US government is sending the people the cash advance taken on their Chinese credit card to go buy stuff from Walmart. This seems to be a loop of Chinese money through the United States – a pointless loop.

@ Miss America, Print First Ask Questions Later: Reading your posts concerning LB made me remember Rich H\’s forecast here concerning Wall Street banks some months ago: They started to fight against the downturn together, but when things got heavier it becomes tribal war and everyone fights for his own survival. Maybe our countries will go that way, too. They did it in the 30s and destroyed the world economically – and afterwards my country tried to destroy physically what was left. Of course it would be better for all of us not to repeat that chapters of history, but, well, the economical imbalances (and financial debt burdens) seem to be even greater today than they were 80 years ago. In that case we kids on the blog may share the fate of the international socialist parties in WW1 and WW2: It\’s good to have the same economic analysis and nice people all over the world with similar views and minds – but it\’s almost impossible to keep such a protected environment if our countries start to fight each other in hot, cold, financial or trade wars. Communities become tribes. But even if this might happen sooner or later, please: not yet. No-one of us knows who is right. We\’re here to discuss.

@ Miss AmericaThe language you used in the post I remarked about seemed eerily similar to those who appeal to pride when neglecting to effect positive change for the people they supposedly lead. Those comments merely acted as a trigger to my venting about the seemingly countless individuals in our current government who make such appeals. I was merely attacking the parallels between the content of that particular sentence in that post and what I have read from others in similar contexts. From your response there appear to be few other parallels. I apologize if you took my comments to be conflating you with those blind to criticism. My attack was merely against the act of using anti-americanism to label any individual who criticizes america. And as other readers have remarked, this thread is best left for other discussion boards. My apologies all.~KJS

And then again, the BoE may have done it right:LONDON (Thomson Financial) – The Bank of England\’s 50 billion pound lifeline to money markets should be \"very positive\" for the mortgage market, the Council of Mortgage Lenders (CML) said.Speaking after a meeting in Downing Street with UK Chancellor of the Exchequer Alistair Darling, CML director general Michael Coogan said although the 50 billion pound plan should be \"only the starting point\", the funds should start flowing through the mortgage market \"shortly\".He said libor interbank lending rates should start to fall in the coming few weeks, feeding through into lower prices for mortgages.http://www.fxstreet.com/news/forex%2Dnews/article.aspx?StoryId=1401b969-2f30-40ad-99c8-8eab9b3fec53Written by London Banker

Bottom is in, here come da rally pigs to fry some shorties…

For the FWIW file:How to tell the difference between inflation and deflation.My father, who passed away in November 2006, grew up in the GD (and also fought in North Africa and Europe during WW2) told me that during the depression you could buy a loaf of bread for a nickel and a half pound of bologna for a dime, but nobody had a dime to buy it with! I.e., there was no shortage of food, only money to buy it with.Now, as we see at Costco, there is a shortage of food, but not of dollars chasing it.So, as we all already know here, inflation is accelerating, and the previously predicted deflation is limited to real estate. What if anything, can turn this around and bring about general price deflation? Answer: Very high unemployment.In the GD unemployment approached 25%, and now it is about 5.1%. As the recession deepens this will almost certainly increase, but will it increase enough to turn inflation into deflation? That is the $64 trillion dollar question, but it seems very unlikely to me now.Bottom line, IMO: As the recession deepens and unemployment rise, inflation will become disinflation, but we will not see general price deflation.

Soberinghttp://market-ticker.denninger.net/2008/04/philly-fed-leis-yuck-flash.html

In his blog (here on RGE) Brad Setser addresses the real big problem the US and we all faces ahead. At some point China might want its money back (!) and they might not be that happy at collecting US pesos. Read the entire post is really good.Every passing day I\’m more in shock realizing how much of a house of cards the whole global economy has been for so many years.Ut-oh! Is China starting to blame the US for its currency losses?Mei Xinyu, a senior researcher under the Chinese commerce ministry… goes on to argue that if the US doesn\’t do more to defend the dollar, it is effectively defaulting on China.\"The negative results of the US dollar\’s decline are evident: the rising prices of all primary products, the intensified pressure on inflation globally, the confusion in the settlement of international transactions, etc. Worst of all, this is the US\’ disguised way of avoiding paying off its debts to foreign countries.It should be noted that the US is the biggest debtor country in the world…. By the end of 2006, the US\’ accumulated net debt overseas hit US$16 trillion. As most of the debts were calculated in US dollars, the US is actually welshing on its debts malignantly by allowing the devaluation of US dollars. Since China is the country with the world\’s biggest foreign exchange reserves, most of which are calculated in US dollars, China thus is hurt most greatly from the US dollar devaluation.\"http://www.rgemonitor.com/setser-monitor/252511/ut-oh-is-china-starting-to-blame-the-us-for-its-currency-losses/

HousingDepression on 2008-04-22 13:12:58“I think you are right about the rate cuts and the market not liking it. But I have seen instances where they did not cut (I think they cut 50 basis instead of 75 expected) and the markets went up because it showed that the fed is confident.”Absolutely it is possible, and I would be disappointed, but not surprised if the market did rally on news that the Fed had changed its bias or had cut only by 25bps or even no cut at all. The view that would cause such a reaction would be that the economy is strong enough so further rates cuts are not needed, and that a rebound in the second half is a near certainty. But it seems to me only a lunatic could believe such a fairy tale in this environment. The economic situation seems to have worsened now and has become an inescapable lose / lose situation: cut rates and we get killed with inflation and a crashing dollar; don’t cut and the economy becomes even worse than it would in a more accommodative / stimulative rate environment.We (and the Fed) have been between a rock and a hard place for many months already, and now it appears we are being squeezed in a vise – something has got to give soon – and when it does, it may be dramatic. But what form that sudden break will take, I don’t know. Either a burst of inflation / blow-off spike in oil prices / dollar crash, OR a quickly collapsing economy with rapidly rising unemployment and a crashing stock market.Of course that is all just my speculation…

THe double bottom kids arrive right on time as usual…

@LB Thanks for your response to my question. Obviously the B of E move is quite similar to the Fed, all though I\’ll take you at your word that the details were better. To me the main point is that, like U.S. banks, the U.K. banks are holding paper that is garbage. If it wasn\’t, they would be able to sell it on the open market and wouldn\’t need the new program. As in the U.S., banks should be forced to recognize their losses immediately and not hide them at the central bank. If this action would cause widespread bank failures and nationalization, so be it. Government should see to it that all is handled in an orderly fashion. This garbage paper is going to keep decreasing in value as foreclosures increase and, as a result,these government interventions are only going to worsen things later. What is needed is to air out all the dirty laundry now, take our lumps, and make new rules so this doesn\’t happen again. All this government intervention will only greatly prolong this crisis and make it much worse than it already is. Sooner or later, the piper will have to be paid.

We are one terrorist attack away from $150 oil…just one disruptive attack away…

The bank index is unchanged for the day LOL

dark pools – do they increase volitility or decrease it ? anyone done a study on this?

@Octavio, Giraf and allI have a question and I would like someone with more knowledge of history help me understand.Is there anybody here who would put his money in 30 years US bonds with the intent to held them to maturity? Beside the ridiculous return I\’m interested in the perception on the safety of the principal.My real point is: do somebody here expect the US to actually honor its obligation 30 years from now with something of as much value as today? (or at lease as much value as any other investment available today of comparable maturity?)Taking into account: huge debt and rising, debt has been mostly used for consumption not productive investment (!), almost sure stress with current creditors, probable loosing of the super-power status at the end of this crisis, only 300m people in a global economy, etc.On the other plate I see: nuclear bombs and military (but most need oil!), scientific and technological leadership (but not in green stuff that will become more relevant in the future), corporate America (how much will still be owned by americans after all is said and done?).30 years are a long time. I, as an investor, would not touch a 30 years US bond with a 10 foots pole. Is there anybody here that would? and why?(BTW: it\’s not anti-Americanism, at this moment I would not touch a 10 year Italian bond either )Written by Alessandro

I mean, this is silly, DowSP500 less than 1% down!

Octavio, I agree. I have fair value today (even using the bogus street est 52 week forward est) of 1286. A full 6.4% or 88 S&P points under where we trade today.

FWIW OR, I see the 1% holding.…but I also see growing cash position. So unless there are some defaults on the way??? …or there are major (unadvertised) disruptions that are looming (thus fear is keeping the flow out of play???), we could see a bit more volatility kicking in pretty soon.Miss America

Octavio Richetta on 2008-04-22 14:35:53“I mean, this is silly, DowSP500 less than 1% down!”Volume is low; selling conviction is weak. Things may be slow until we / they get some indication next week whether or not the Fed is going to switch to fighting inflation.

Written by Alessandro on 2008-04-22 14:57:50The minute I see that babe hit 3%, if it ever happens, I sell. perhaps, it will be at a time equities are priced at more decent levels.So Dow/SP500 down less than 1%. What would they do if we had, no good news, just less bad news?:-)

Comedy at the CFTC Meeting today. Nothing but lip service to problems in the futures markets. Start with the CFTC commissioner, a key supporter of the Enron Loophole in the Commodities Modernization Act of 2000, Put the Fox in Charge of the Henhouse and wonder why nothing changes.

@Miss Americayou are always so cryptic. At least to a non-native speaker.Call a spade a spade, are you calling a top? My life savings are waiting just for your word…(Just kidding, don\’t worry

From Paul KrugmanApril 22, 2008, 1:49 pm Ho-hum day on the marketsEh, oil’s above $119, the euro’s above $1.60, and the scramble for safety has sent the yield on one-month Treasuries down to 0.59%. Nothing to see here.Seriously, these are wild and crazy times.

Capone San(D)ecession will be like long curved samurai sword in Gedan position, sharp slashing upward then Jodan long deep sweep downward. Much blood will flow…US Economy has loyal retainers in FED/Treas who will decapitate any lippy me-no-shita hitobito (like shorts or ETFers),but like 49 samurai will eventually die and fail.Or, if you like, Economy like Chinese water radical which sweep from high to plunge on long slowly descending tail. Lazy, leisure sotted round-eyes will not know how to survive such alteration in lifestyle. Stoic, stiff-upper-lip, quiet suffering not in their nature. Shall be amusing and pitiful–for life is to suffer and transcend. Silly westerners think it is to self-actualize, find happiness, indulge themselves. Ha-ha, silly barbarians who have reached too far for apple high in tree, fall will be harsh and interrupted only by rib-breaking branches. See you on ground gold- and red-hairs, we shall stand astride you in contained amusement.

Off-topic: for political junkiesThis Pennsylvania primary is a really big deal for the Dems. It could be the deal maker or breaker for Obama. IMO, if Hillary whoops him bad, his hand is going to be seriously weakened as far as his electibility in the Fall looks, and then the party may decide to go with her. And although she would definitely be better than McCain in my book, I would still much prefer to see Obama as president. He is further removed from the influence of special interests than any candidate I can remember since 1960. And, a president like that is the kind of change we really need in this country.

The sheep have an election soon. Will they vote for sheepherder #1 or sheepherder #2. Choose wisely.

Written by K J Foehr on 2008-04-22 16:56:25A nice follow-up to your last two posts. UPS, FedEx Decline Points to Continuing Recession (Update2) http://www.bloomberg.com/apps/news?pid=20601109&sid=a47LjRtOU3c0&refer=home

http://mises.org/story/2940 – The Price of Gas from 1950 to today…First, we need to take into account inflation. The result of the Federal Reserve printing too much money is a loss of purchasing power of the dollar: something that cost $1.00 in 1950 would cost about $8.78 today. As for gas prices, in 1950 the price of gas was approximately 30 cents per gallon. Adjusted for inflation, a gallon of gas today should cost right at $2.64, assuming taxes are the same.But taxes have not stayed the same. The tax per gallon of gas in 1950 was roughly 1.5% of the price. Today, federal, state, and local taxes account for approximately 20% of gas\’s posted price. Taking inflation and the increase in taxes into account (assuming no change in supply or demand) the same gallon of gas that cost 30 cents in 1950 should today cost about $3.13….due to government regulation, the last oil refinery built in the United States was completed in 1976. In addition, the Middle East is politically unstable which leads to a risk premium on the world\’s major source of oil. It is obvious that the demand for oil has grown while supplies have been restricted. The average price of gas in the United States today is approximately $3.25. The question is, why are gas prices not higher than they are?

Re Hubbs: \"The shape of a recession? How about a gentle \\ ? Just a gradual erosion of standard of living, with just enough foreign money coming in to snap up property, companies, and other hard assets for the US to just chug along just above stall speed,and for a longer time, like a generation?\"I tend to agree that the shape of this recession will be a \\ or a \\_ (a slide downward without a recovery). Whenever I try to make sense of what is going on in the world I put a make-believe \"elite\" hat on and think like an elitist and then everything makes sense.From this view, North Americans (and Europeans and Japanese) are way overpaid for the work they produce. The same work can be done and should be shifted to lower cost workers in China, Inda, Russia, Brazil. Globalization is like a big tub of water with water higher in some parts and lower in other parts. The water will reach equilibrium somehow at sometime. Wages and living standards will eventually reach a global equilibrium.I ofter discuss economics with an Indian friend that says: about 10% of the population of each country has a creative class that is intelligent and will do OK. This means 30 million Americans, 100 million Indians, 120 million Chinese, etc. This seems to make sense to me, in some way or another.

$150/barrel = $4.50 gallon gas

oppss decoupling

**off topic**I planted my garden on Sunday. Tomato and broccoli. On Monday I put up a fence to keep the critters from eating any more of my tomato plants. They loot like an angry mob – those animals!**on investing**I met a financial planner for lunch last week. He is a nice guy – you know, cuff-links and a “fun” tie looking to pick up some assets or make a life insurance sale. We chatted about 401(k)s, diversification, insurance, fees, etc. He had an air about him that he knew the markets better than I would ever know them and that his clients generally meet or beat the overall market returns. He said diversify. I said “concentrate investments to generate wealth, diversify to preserve wealth” He said the market will do well in the second half of the year. I said I probably agree if you are talking about 2009. He said the Fed has got it under control. I said the only thing the Fed has under control is the MSM. He said that he has access to mutual fund advisors that I don’t have access to unless I go through a broker. I said that we use ETFs because the fees are low. He said that if I had a good advisor (like him), that I wouldn’t need to worry about these things. I said I like to be well informed about things that impact my finances. He asked who manages my money. I said I do. He asked if I know if I am doing a good job and meeting my financial objectives. I said I beat the S&P500 by “XXX bips” last year including cash drag, and I am beating it by better than “XXX bips” YTD. These are always fun interactions, and I come away feeling good about myself knowing that some widows and orphans paid a sales load and 12b-1 fees to buy my lunch.Now that’s some batshit crazyism.

Where did this come from? I click on so much stuff, it is probably from a CR comment. In any event, when I read stuff like this, I find it very hard to accept bailouts for most mortgage holders. It looks like the abuses had no limits on either side.http://www.app.com/apps/pbcs.dll/article?AID=/20080413/NEWS/804130399

http://www.reuters.com/article/bondsNews/idUSN2231537320080422Bush: U.S. economy not in recession, in slowdownA wise man:-D

Oh, and is it just me, or does it literally seem like \"another day, another all time low for the US Dollar\"?? The dollar has lost half (yes, literally half [as in 50%] of it\’s value) over the past eight years. Gee, look what massive-gigantic-enormous-huge-government deficits can do for the economy. Gee, if the US Dollar rose 100% Wednesday morning, it would just about be on par with where it was just eight years ago! Same (or really worse) for the Nasdaq Composite— just a 100% increase might take it back to where it was nominally, before adjusting for inflation!

Can someone smell a US Dollar crisis? Maybe a total default of the US Dollar?? Just remember it\’s the congressman and the president who are responsible for this! The President wrote the gigantic deficits, and the congress approved of it for literally eight years! They\’re all grossly fools for commiting financial negligence!!!

I wonder who the Supreme Court will (elect) and rule as President of the United States of America next?? Who cares what the electorate does? Who cares who the people will vote for, maybe, like in the past, the conservative supreme court justices will just rule J. McCain as president of the united states of america. What a shame! What a republic we live in! It\’s like a bananna republic!

I used the \’less than\’ sign and the parser killed the rest of the sentence. It goes: I would hazard that is a blatant lie. Why didn\’t Moody\’s bother to first check of seasoned multi-year sub-prime performance? Somebody with a FICO less than 620 has probably already three credit strikes to their name. Defaulting on credit is like taking a life. Once you\’ve crossed the moral line, you\’re like to cross it again. Sub-prime borrowers had already crossed the line many times previously. Why did Moody\’s not take due care?

A story that appeared in the Washington Post, and written by George F. Will… In the article, George Will takes the Fed to the woodshed for coming to the aid of Bear Stearns… He had lots to say, but I had to cut it down to a couple of snippets that apply to us… Here\’s George Will from the Washington Post…\"The Fed\’s mission is to preserve the currency as a store of value by preventing inflation. Its duty is not to avoid a recession at all costs. The Fed should not try to produce this or that rate of economic growth or unemployment.\"And this: \"A surge of inflation might mean the end of the world as we have known it. Twenty-six percent of the $9.4 trillion of U.S. debt is held by foreigners. Suppose they construe Fed policy as serving an unspoken (and unspeakable) U.S. interest in increasing inflation, which would amount to the slow devaluation – partial repudiation – of the nation\’s debts. If foreign holders of U.S. Treasury notes start to sell them, interest rates will have to spike to attract the foreign money that enables Americans to consume more than they produce.

Ambac Posts Loss on CDO Writedowns, New Business Drop (Update6)http://www.bloomberg.com/apps/news?pid=20601087&sid=aUdfL3coqdvg&refer=homeMarket should fall big today. I know it is green now.

Anheuser-Busch net income falls 10:12 a.m. 04/23/2008 Provided by NEW YORK (Reuters) – Anheuser-Busch Cos Inc (BUD) reported lower quarterly profit on Wednesday, as U.S. retailers purchased less beer from wholesalers. The nation\’s largest brewer, with brands like Budweiser, Bud Light and Michelob, said first-quarter net income fell to $510.9 million from $517.5 million a year ago. But the company had fewer shares outstanding in the latest quarter, and per-share earnings rose to 71 cents from 67 cents a year ago. The St. Louis-based brewer faces a host of challenges, including higher costs for energy and grains and a shift in U.S. consumer tastes away from traditional domestic beer toward wine, spirits, foreign beers or small-batch \"craft\" beers. (Reporting by Martinne Geller, editing by Gerald E. McCormick) Copyright © Reuters 2005. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world

Shiller\’s latest http://blogs.wsj.com/developments/2008/04/22/yales-shiller-us-housing-slump-may-exceed-great-depression/?mod=WSJBlog

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3_i72MGuhzY&refer=homeAccording to this guy market is cheap:-)…“The backdrop today is one of the market being quite fairly valued, and in fact I think it\’s a pretty low-risk entry point for investors,\’\’ Fritz Meyer, the Denver-based senior market strategist at Invesco Aim, which manages about $162 billion, said in an interview on Bloomberg Television. “When M&A activity starts to pick up it\’s an indication that the animal spirits in the market are rising.\’\’ The S&P 500 is trading at 21.8 times reported earnings, about 19 percent cheaper than the monthly average over the past 10 years, according to data compiled by Bloomberg. Of the 153 companies in the S&P 500 that have reported first-quarter results so far, 67 percent have posted earnings that topped analysts\’ estimates, according to data compiled by Bloomberg, even as average profits have slumped 29 percent…

@ ORMy whole \"multinat/cheap sticker price theory\" has plenty of holes. Beer faces inflation pressure not only on it’s grain, but also shipping and aluminum. …the inflating costs will cause those Multinats to potentially have a much sharper % price increase, but the net increase to the consumer will be manageable (IMO). Plus, (I think???) Bud owns a stake in China’s biggest beer. At the end of the day… good times, bad times, …there’s always money for beer!I’m not invested in anything, thus I haven’t done the homework I would if I were to start buying stocks. …it’s just that, I truly believe if things were to get ugly, this may be one of the best “wealth preservation” routes. …along with the fact that after enough losses are felt, speculation will eventually become less of a factor, and the market may start looking at earnings. In Buds defense, the sharp increase in cost (grain/inflation/speculation), probably hadn’t been priced into the cost on the shelf for most of the 1st qtr. There will likely be that increase to cover cost in the immediate future? (that is, if they haven’t already started jacking the price up a dollar or 2 per case already)Cheers and bottoms up, Miss America

walmart and costco are limiting rice purchases. Flour and cooking oil are in trouble, too. 3rd world country here we come.

on a minute by minute, hour by hour, day by day basis, it is NOT the news that drives price. The news comes out, the market price move occurs and then the daily story in the media is written. It is the reaction to the news that matters. What the market would have, could have or should have done or should be doing is completely irrelevant to what it IS doing AFTER news comes out.As Giraf mentioned quite clearly based on his experience as a trader, go with the flow. This applies on a minute by minute basis and as much as a day by day basis. @KJ Foehr, personally I am working on identifying the short term flow and it certainly presents a challenge for me.Intermediate to long term sure we are all dead, there will likely be a whole new set of rules to trade by, exchange resource etc. Most here including myself know this. Applying daily bad news expecting decline has not been going with the flow for the past few weeks. Will this change today or tomorrow who knows ? When the market moves up on bad news it is even more likely to continue up in the short term. When the market moves down on good news it is even more likely to continue down in the short term. Not to mention the fact the US lives under a financial dictatorship where people must invest or spend their money to protect its purchasing power. They control price or at least intervene with price. This recent rally is funny considering the very people who control price have been acknowleding bad economic conditions of late – Paulson for example while the market moves up.

Written by Guest on 2008-04-23 10:11:05The leaders of the SEC should be improsened. these are horrific times and that bs should not be allowed.

OS, thanks for the Anheuser-Busch info. Yet another point of reference highlighting the decoupling of the US consumer and Wall Street…Mark

http://www.nakedcapitalism.com/2008/04/fed-continues-to-treat-symptoms-not.htmlStabilize patient before operating.

Octavio Richetta on 2008-04-21 12:43:20 from a previous thread“How far can greed go, or I want all the toys now!If you look at what the US consumer was forced to do so that he could buy all the junk despite not having the income; you will realize that what capitalists were doing was accelerate the run down of the world resources. Jack up consumption as high as they possibly could so that they could get their wealth upfront, as fast as possible. I mean that is the ultimate show of greed. Rob the masses of their future wealth by scorching the earth. It was like putting thee economy on crack cocaine; burning the candle at both ends. Little guy has no money? No problema; Lend him the money, after they also own the banks so this is extra income! The model of economic well-being is going to have to change from maximizing GDP to something else. Given what we are doing to world resources, it would appear that a global slowdown would be a good starting point to ending the madness.”I just bumped into this post from Monday. It is an excellent summary of the big picture; well said!I would only add that the “run down of the world resources” was coincidental to the capitalists. They really don’t care what is used to generate profits; they will use anything: metals, oil, paper, digital bits and bytes, whatever they can sell. But the aggregate effect has been increased consumption of resources worldwide. Now suddenly we are being reminded of the importance and the limited supply of these resources. As we know, the West has been consuming more than our fair shares of these resources, and now we must share more of them with other people around the world who want to live like us. As a result we will be forced to pay more for ours and the global environment will continue to suffer. (Check out this BBC news video http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=7399182&ch=4226722&src=news)You wrote,“The model of economic well-being is going to have to change from maximizing GDP to something else.”Yes. So how about simply well-being without “economic”? In my view, the greatest joy comes from inner peace. This joy is the deeply felt contentment that comes from simply being without need for more. Being with friends and family, and with nature; being without striving for more of anything in an attempt to make better what is already sufficient. And that inner peace can be achieved with surprisingly little money and few material possessions.

Written by K J Foehr on 2008-04-23 11:51:44I just bumped into this post from Monday. It is an excellent summary of the big picture; well said!Gee! Wheee! I am glad someone finally noticed that one:-)it is my big picture for what has been going on in the US for the last 20 years.Yes, the greedy guys want all their gold now but they forget they are stuck here trapped with us in the same bubble (I mean the planet, not the ones we usually talk about here)

\"Yes. So how about simply well-being without “economic”? In my view, the greatest joy comes from inner peace. This joy is the deeply felt contentment that comes from simply being without need for more. Being with friends and family, and with nature; being without striving for more of anything in an attempt to make better what is already sufficient. And that inner peace can be achieved with surprisingly little money and few material possessions.\"Written by K J Foehr on 2008-04-23 11:51:44Great observation. One just needs enough money so that money is not a problem. I mean this on either side; too little or too much.BTW, a good chunk of my response to you is embedded in several past posts. e.g., I have dealt with the issue of stock market risk. The one I did not tackle, is looking at current PE, vis-a-vis historical PE to decide what the likely stock market return may be in the coming years. Smart people such as Bogle and Hussman write extensively about thishttp://www.vanguard.com/bogle_site/bogle_speeches.html I have two observation on this one:1. Using this kept me out of the market for the last 10 years and I won!2. The same argument could have been used to stay out of the market from the late 80s. Staying out of the market during those years would have been detrimental to your return. Unless Gary Shilling\’s a-posteriori analysis showing that if you bought the 30 year stripped bond pre-volcker, and rolled it into another 30 year bond every year you would have beaten the stock market by a lot!Treasurys Aren\’t For WimpsA. Gary Shilling, Insight 02.22.08, 4:00 PM EThttp://www.forbes.com/personalfinance/2008/02/22/treasury-bonds-inflation-pf-guru-in_ags_0222soapbox_inl.html…Few investors realize how well Treasurys have performed since their prices bottomed in October 1981. An investment of $100 in a 25-year zero coupon Treasury back then, rolled over annually to maintain the 25-year maturity, was worth $11,263 in October 2007. In contrast, $100 invested in the S&P 500 in July 1982 at the stock market\’s bottom, with reinvested dividend, was worth $2,821 last October. In the longest, strongest stock market rally on record, zero coupon Treasurys beat the S&P 500 by 4.1 times! So from 1 and 2 above one may infer that Malkiel continues to be right. I was out of the market for the last 10 years presumably because I am a smart investor. And I was in the market the previous 15 because I was lucky:-)

@ Written by Alessandro on 2008-04-22 15:32:09Actually, what it means is that I’m getting a little concerned with the accuracy of my short term/not-break-13,000-DOW call.MA

Miller Says Bear Stearns Sale Signaled End of Panic (Update1)April 23 (Bloomberg) — Bill Miller, the Legg Mason Inc. fund manager whose returns trail all but two rivals this year, said the collapse of Bear Stearns Cos. in March may have marked the end of a panic sparked by losses on subprime mortgages.“Credit spreads are already much improved since then,\’\’ Miller, 58, wrote in a letter to fund shareholders released by Baltimore-based Legg Mason today. Financial companies may “even have some write-ups in the second half instead of writedowns,\’\’ he wrote.http://www.bloomberg.com/apps/news?pid=20601087&sid=arSp8bnQ8vwU&refer=homeEU banks are not as sure, the 12m EURIBOR spiked up to the highst since the beginning of the crisis. Does anyone have a link of a chart of the EU verion of the TED spread?http://www.bof.fi/Stats/default.aspx?r=/tilastot/markkina-_ja_hallinnolliset_korot/euriborkorot_pv_chrt_en@MAouch!!

This should rally stocks big into the close!!2:44 Crude ends up 23 cents at $118.30 a barrel

Written by Guest on 2008-04-23 13:48:18Particularly good for Boeing and the airlines. Perhaps, this means airlines will have to retire fuel guzzling aircraft:-)

More great news for the economy…no wonder stocks continue to rally:Steel prices are up 72% from their peak last year, defying a slump in the construction and auto sectors, but squeezing industrial users.

\"We are now classifying this as a bull market,\" says Chuck Carlson of Horizon Investment Services. The \"forward-looking\" stock market is telling him that \"we\’ll start to see some improvement in corporate earnings later this year.\" For now, though, \"we do have kind of a sluggish economy, and where you\’ve seen the strong earnings coming out have been in those companies that have rather overseas businesses,\" says Carlson.

Rice Hoarding and Rebagging Exposedhttp://www.youtube.com/watch?v=FAWvBNPPIscRebagging things…reminds me of something that went very bad…

Apple beat EPS by 10 Cents…Yet it\’s stocks are trading down (Very Turbulent trading going on here). At last trade, they were down to 158.61 from 162.89!As I keep typing, the shares keep going down…

Take a walk around CR. Bice stuff on Ambac/UPS

COMPLACENCY REACHES A ZENITH The stock market has reached a new pinnacle of complacency. Witness the reaction to Ambac\’s news today, which caused its shares to drop 40% and MBIA to drop 30%. A couple of months ago, panic would have ensued, with worries about the consequences of failures of these companies. Now, as more evidence of impending insolvency rears its head, the market shrugs its shoulders and climbs modestly higher. Big Brother will take care of it, just as they did with Bear. But the question is, how many balls can the Feds keep in the air at one time? The Fed itself has said that a number of small and medium sized banks will likely go under this year. While individually they may be relatively small, the coincident failure of several of these entities would have an impact rivaling that of a large bank failure. Also,the probability of another large bank failure increases daily, as credit card and consumer loans continue to sour at an alarming rate (see Bank of America) and more mortgage related writedowns are on the way (for example, Fitch downgraded billions more of subprime junk this week). The Fed must surely be making arrangements with the funeral home for the monolines. And let\’s not forget the big one: Fannie and Freddie will surely fail in the coming months. While I do not believe S&P will have the kahunas to downgrade treasuries from AAA as they threatened, the dollar will be stripped of all pretense of being anything but the American peso and the result will be the same as a downgrade. Then, there is the so called \"checkmate scenario\" which Mish has commented upon. As energy and food prices rise, at some point the Fed may face the prospect of 1) Lower or leave interest rates unchanged, which will lead to hyperinflation and then to depression, or 2) Raise interest rates, which will lead us into depression. Understand that all of the above is not a possibility, it is a likelihood. The Fed is certainly powerful, but I have strong doubts that any governental/quasi-governmental agency could manage all of the coming chaos. It is interesting to watch the complacent faces of market participants as the multiple wolves that will rip apart financial life as we know it approach. The Fed cannot possibly fend them all off.

GLoomy:\"how many balls can the Feds keep in the air at one time?…The Fed is certainly powerful, but I have strong doubts that any governental/quasi-governmental agency could manage all of the coming chaos. It is interesting to watch the complacent faces of market participants as the multiple wolves that will rip apart financial life as we know it approach. The Fed cannot possibly fend them all off. \"Trying to keep my pulse on things… My longer than usual multiple choice question:How much longer until the big ball of twine gets tangled-up again? a. one weekb. two weeksc. one monthd. two monthse. three monthsf. six monthsh. none of the above

This one is via BArley @ CR:Starbucks slashes outlook, blames housing meltdownhttp://www.reuters.com/article/ousiv/idUSWNAS919920080423Will WS care about this one? Those traders may be dumb but they sure know *bucks!Betcha somewhere a tree-killer prof. is working on the correlation between MEW and lattes sold.This one is good too:http://today.reuters.com/news/articleinvesting.aspx?view=CN&WTmodLOC=C3-News-2&symbol=SBUX.O&storyID=2008-04-23T221210Z_01_N23373436_RTRIDST_0_STARBUCKS-OUTLOOK-UPDATE-2.XML&type=qcna\"Starbucks shares fell to $15.69 in extended trading, after closing up 15 cents at $17.85 on Nasdaq. (Reporting by Nichola Groom and Lisa Baertlein, editing by Richard Chang)\"Another fad stock bites the dust. SBUX is out of sync with the new US economy. http://stocks.us.reuters.com/stocks/charts.asp?symbol=SBUX.OTomorrow won\’t be pretty for stocks:-)

Ouch! via GRIM at CR:Moody\’s downgrades GMAC, ResCap ratingsBy Wallace WitkowskiLast update: 6:23 p.m. EDT April 23, 2008http://www.marketwatch.com/news/story/moodys-downgrades-gmac-rescap-ratings/story.aspx?guid=%7B74C09469%2D3FAF%2D4674%2DB4F1%2D2A64D56B2667%7D&dist=hplatest\"\’The rating agency lowered GMAC\’s senior rating to B2 from B1, and ResCap to Caa1 from B2.\"Diz one priced in the market too?

http://www.reuters.com/article/topNews/idUSL2341693420080423\"Israeli Prime Minister Ehud Olmert has told Turkey that Israel was willing to give back Syria\’s Golan Heights in return for peace with the Arab state, a Syrian cabinet minister said on Wednesday.\"Another indication that war against Iran is coming. And Israel/US want to neutralize an old pro-Iranian beforehand.The Golan plateau was under the Israeli control since 1967 and they never intended to give it up. What changed today?http://en.wikipedia.org/wiki/Golan_Heights

Hey, LB and others:You guys remember The Fall and Rise of Reginald Perrin?Lively, lovely show, or vice versa. The rise and fall of SBUX brought the title to mind:-)

For those of you who know the show but have forgotten the plot, this should bring good memories:http://en.wikipedia.org/wiki/The_Fall_and_Rise_of_Reginald_Perrin#Series_Summaries

\"What we normally have is a predictable group of sellers and buyers — mainly farmers and silo operators,\" he says. But the landscape has changed since the influx of large index funds. Fund managers seek to maximize their profits using futures contracts, and prices, says Warner, \"keep climbing up and up.\"Troubling article on the role of speculators in the global food crisis:http://www.spiegel.de/international/world/0,1518,549187,00.htmlSome experts now believe these investors have taken over the market, buying futures at unprecedented levels and driving up short-term prices. Since last August, this mechanism has led to a doubling in the price of rice — including the 500,000 tons that the Philippine government plans to buy in early May to address its own shortage….He\’s calculated that financial investors now hold the rights to two complete annual harvests of a type of grain traded in Chicago called \"soft red winter wheat.\"Wagner is stunned by such developments. He sees them as evidence that capitalism is literally consuming itself.

Please correct me if I\’m wrong but aren\’t these financials that support the Clearing Corp. and Markit, the same ones that brought this mess upon us in the first place? They\’re gonna clean up the CDS mess for us now!! http://online.wsj.com/article/SB120898696909739549.html?mod=mkts_main_todays_mkts_tac

Written by tutterfrut on 2008-04-23 14:44:52Four bags a visit…have you heard it Roubinies. So now STOP hoarding and STOP turning your houses in personal 7/11\’s. It\’s all under control. Better go buy some shares, unlimited per visit because nobody\’s thinking of hoarding them.Precious!Mark

More CR: hopeinsd writes: on SBUX: What\’s killing them isn\’t the recession exactly. Its that every Suzy Orman style financial advisor out there spouts off about the \"latte factor\"- that spending $5 a day at Starbucks could instead be saved and, through the magic of compounding interest, keep you comfortable for a year in retirement. It was even on friggin Oprah! You can\’t fight Oprah! Now the \"savers\" avoiding Starbucks are probably still paying 25% interest on their credit cards, but, hey, at least they feel like they took the first steps and can tell their spouse their trying to cut back. hopeinsd | 04.23.08 – 7:04 pm | # barely writes: AMZN is a friggin RETAILER that needs diesel trucks and drivers to personally deliver every single item. Good business model with $120 oil. Gotta love their prospects! barely | 04.23.08 – 6:59 pm | # VHB writes: RE: SBUX. Well, at least they have stopped blaming these things on the weather. VHB | 04.23.08 – 7:21 pm | # iceman writes: Hmmh, if people are cutting back on coffee at Starbucks, do you think they\’d be buying new cars? And, with gas at $3.54, do you think most would buy anything other than a small car with high mpg? Rest of the year will be scary for the auto industry. iceman | 04.23.08 – 7:27 pm | # ShortCourage writes: Has anybody noticed a troubling trend with earnings? Those who\’ve done well have done so either (a) because they had nice gains from foreign sales and Forex gains or (b) because they deal in products jacked up in price, such as commodities producers. What happens when the lag of our consumer slowdown (and you can add the UK and other debtor nations to that as well) starts to hammer foreign companies and their consumers? And what happens when the commodities price jumps start to cause consumers worldwide to cut back on non-essentials? We\’ve got a major crash in world aggregate demand coming. I think IBM/CAT/AAPL strong earnings are the final spasm of this earnings bubble. ShortCourage | 04.23.08 – 7:41 pm |

@Guest on 2008-04-23 20:47:37CBOT Wheat as of 15 April: Index Traders were Long 218,225 contracts, Short 33,234 contracts; respectively 40.7% and 6.2% of total open interest. (1 contract = 5000 bushels). Looks, though as they may now be on the losing end; here\’s a long term chart on CBOT wheat:http://charts.marketcenter.com/cis/agweb?cont=W&period=m&size=760x400Now, if you think that\’s a spike, take a look at this for the much smaller Minneapolis Exchange that specializes in a different, high protein, grade of wheat:http://charts.marketcenter.com/cis/agweb?cont=MW&period=m&size=760×400(Both charts are monthly continuous)

My roommate, who is Chinese, told me yesterday that the chinese governmnet cut trading transaction taxes by 2/3rd which lead the increase in stocks yesterday.In fact the government has increased the tax threefold last year which coincided with the start of the rally down.

\"We\’ve got a major crash in world aggregate demand coming.\"–certainly with some goods, when energy and food are going through the roof. This is a crash quite unlike any other. Coal shortages in China, a presumed net exporter of coal? The ME blaming the falling American dollar for its refusal to pump more oil? Well, they peg to the dollar. How much can it really pump anyway?Could it be that resources are being stretched thin? In we are using land for oil (ethanol), and that does not solve the oil problem but only creates another…what do we say then?And if a is the shape of the coming recession, what in the world pulls us up? More mouths to feed? We have a credit crunch that the Fed says requires lower interest rates; other economists tie the low interest rates to rising commodity prices. Isn\’t there a certain kind of madness going on here? Damned if you do; damned if you don\’t.It might just be the world is running out of gas….both literally and metaphorically speaking. The law of supply and demand is a nice equation to contemplate; but what if supplies are dwindling as demand is rising? Land for oil–what a pickle. Gas for the car or food for the stomach. Nice choice.

Sorry for the underline…it ran out from under…and into a bush somewhere. Tricky devil.

stormywhat pull us through the great depression??it has happen twice..need more hintspanzer, trench,

Written by GSM on 2008-04-24 00:30:41Blaming the evil speculator is delusional.…The food price situation is a symptom. A symptom of the same misguided maladjusted world economy created and enabled by the greedy TPTB who think they can scam their way through life living off people like you and me Mark. If you’re looking to lay blame, that is where you should be headed. Rogers is a messenger- we all should at least listen.If you\’re looking for a fight on whether I believe that this system is totally out of whack, then you\’re going to find absolutely NO resistance.While you may think that the system can be adjusted (or in the case of stupid government meddling- unadjusted), I think that it\’s the system itself that fundamentally cannot survive, regardless of any \"proper\" changes by fact that it\’s capitalism, a driving force to extract and consume resources at the fastest rate possible.What favor/justice is Rogers, or any of here, doing for the rest of the planet, the majority of which is existing on $3/day or less?Sure, Rogers (and you) might be telling us why the machine is coughing, I\’m telling you that the machine itself is bad. By trying to fix the machine we\’re only perpetuating continued wide scale abuses (loading up on it like the mother of all bubbles; some might say apocalypse), of the plant and its inhabitants.When the blood of the world\’s economy, petro chemicals, quits flowing it\’s good night Irene. The Green Revolution, that well intentioned \"free market\" capitalists help install, will detonate, wiping out extensive populations. But I\’m sure that folks will continue to make money off all of this, thinking that they are influencing \"better\" outcomes for others, if not for themselves.Conservation of energy. Nature doesn\’t like it too well when this principle is violated. The system that we\’re operating is so out of balance in this regard and you and others just want to push it MORE out of balance?We\’re caught playing a bad game and don\’t know how to stop it. I\’d like to think that well-intentioned unrestricted markets can get us to where we need to go, but unfortunately that direction is highly unlikely to lead to future profits- hmm, sounds like exactly what\’s brewing now.Your later post I totally agree with.Mark

Alessandro,your post that deflation will be caused by housing is ridiculous. the deflation will only come after inflation peak and world demand on resource decline signficantly.the trick is when will inflation peak? will oil at $4, $5, $6, $7, or $8 do it? transport and utility still climbing the uptrend. so that mean, we don\’t see deflation happening until these two sectors break.

What with the wealth and salary/wage growth we are seeing and will continue to see in the heavily populated emerging economies globally, I fail to see demand destruction from prices impacting commodities significantly enough anytime soon. If those same nations happen to be dollar peggers and they allow their currencies more floating freedom in order to appreciate vs the USD, this will have the effect of mitigating price shock as ($ priced) purchasing power grows. Thus, demand can be maintained even grow.Demand in the US will decline for many things as recession takes hold there. But I don\’t see how, given the global supply/demand dynamics of food and energy along with the US Fed\’s bent on trashing its currency, these 2 critical commodity groups are expected to decline significantly in price, if at all. That in turn will keep most inflationary measures (except those that seek to deceive!) elevated and above levels responsible CB’s want to see.Mish has been peddling the deflation mantra for ages. He was right on housing and debt yet completely downplays the inflation impact on life’s necessities. This is disingenuous. The rush of money to energy and food as investments is a safehaven play, pure and simple. And it will be around for quite a while now , regardless of Mish’s deflation collapse scenario. In this “new” world one will have to pay dearly for one’s food and energy consumption.

Good Morning all: GSM, You are on the money. The reality of the world\’s current situation is that human kind has stretched the boundaries of what the planet can support. The fight now is for survival – in fact, it has been that way for some time. The US has been engaged in monetary and governmental manipulation for decades for one reason and one reason only – survival. The kicker is, the US wants not only to survive, but to dominate so that it remains on top. We are a short-sighted people with much to offer the world – if we were not so paranoid and insecure. We are not a tolerant people and we, for the most part, are not well educated nor well informed on world events. But we will fight harder, dirtier and longer than anyone else to maintain our dominance – likely to our own peril. The commodities\’ rally the past several months quite simply represents the flight to safety from equities. This will slow down for a while, but when the markets take the next leg down, they will scream upwards again. Oil, food, metals – all are necessary for trade when fiat currencies become worthless. Make no mistakes folks, we move forward now by going back – to where we once were before we made such a mess of this place. Depression is inevitable, as are more wars and manipulation, as governments try to take advantage of a weakened US and the US in return tries to hold on to power. We shall all lose as ever smaller resources are wasted on even more ridiculous causes.

10:01 Economic Report: New-home sales sink 8.5% to 17-year low in March

Durable-goods orders fall for third straight monthInventories rise 1.1% in March, signaling soft demand

Irrational markets return:http://bespokeinvest.typepad.com/bespoke/2008/04/us-sector-pe-ra.html

@ Martin… Have you seen the repo rates in the past few days??? What’s going on? Something is up!Miss America

Here I come again with my stupid daily market commentary. It looks like despite the usual avalanche of bad news,http://www.bloomberg.com/index.html?Intro=intro3The market is clinging onto this:First-time claims for unemployment insurance decreased to 342,000 in the week that ended April 19, from 375,000 a week earlier. The median forecast in a Bloomberg survey was for a reading of 375,000. A separate report showed durable goods orders except for transportation items increased 1.5 percent in March after a decline of 2.1 percent in February. One of this days, the market will fall like a rock. It won\’t be pretty!

Octavio, it is going to get very interesting now with some US Peso stability/rally. The markets have been cheering the flaling Peso becuas it helps internation earnings support stock prices-it has also helped our economy from an export standpoint BUT…BUT…that means any Peso strength will no become a negative to the only 2 stories going for wall thief! How will they reconcile that!?

\"will oil at $4, $5, $6, $7, or $8 do it\"i am talking gallon not barrel

as an average non-economist shmuck, this \"Bookings rose 1.5 percent for goods meant to last several years, —>>outside of cars and planesIf someone were to have tracked a per ounce price of Cheese Flavored Doritos over the past 8 years, they would have been better served in gauging inflation than to follow the numbers provided by the US Financial Dictatorship. Off the cuff, I would place the odds of a depression as high as 25%, hyperinflation as high as 25% and something in the middle of the two at 50%. It is absolutely incredible up to this point the number of issues topics covered in this space which have become the eventual reality… @Miss America, may I request a link to a place where I can track repo rates ?

The White House has issued a Presidential proclamation today April 24, 2008, \"From this point forward the bad news will be excluded from the news. As a result of this proclamation, the news will be ALL GOOD from this day forward.\"

Stocks going green. ALl is well

New home sales plunge to lowest level in 16 1/2 yearsThursday April 24, 11:13 am ET By Martin Crutsinger, AP Economics Writer excerptNew home sales plunge to lowest level in 16 1/2 years, prices drop by largest amount in 38 years WASHINGTON (AP) — Sales of new homes plunged in March to the lowest level in 16 1/2 years as housing slumped further at the start of the spring sales season. The median price of a new home in March, compared with a year ago, fell by the largest amount in nearly four decades. …http://biz.yahoo.com/ap/080424/economy.html?.v=27Fed Weighs Pause After Next Rate Cut By Greg Ip excerptWASHINGTON — The Federal Reserve is likely to cut its short-term interest rate by a quarter of a percentage point next week — but then may be ready for a breather.The Fed, meeting Tuesday and Wednesday, is likely to make what would be its seventh cut in eight months. The reason: Some officials see a case for more insurance against a deeper recession.But others are concerned a cut could contribute to inflationary pressure with little benefit for growth. That means the option of standing pat will likely also be on the table. If it does cut rates, the …http://online.wsj.com/article/SB120899756185139975.html?mod=todays_us_nonsub_page_oneHow can the Fed even consider not lowering rates in this environment? Some are even advocating raising rates. That is what they did in the 1930s and it worsened the GD! The recession is / will be fighting inflation; the Fed doesn’t need to, IMO.

@ ORI keep seeing conflicting signs!!! I am totally lost??? I need to start recreating my Excel model economy and playing with #’s to see where the excess and stress are landing. What I can say is that the physical pressure of credit subsided massively. …but there seems to be a new wave of psychological pressure building. That pressure is based on the hordes/masses that are finally catching up to what we’ve known about for the past 2 years. There’s also a new level of front office attention being spent on the existing problems. A couple of months ago cash conditions grew tight, but psyche was still loose. (traders aside) Now, with the aid of Gov’t flows, along with some positive cash flow signs (Rev/Inc/Pdwn still paying “in standard”) it seems that cash conditions are getting loose… but psyche is growing tight!I have friends in the MF arena, and I plan on checking in on what the Subs/Redm picture is looking like. (That’s your real “public opinion” on where things are at!) My gut tells me that volatility will pick up again. (even though my current models show us fairly flat for the day?!?!?!?!) See!!! I’m bery bery confused. I see volatility, and my models are coming up flat?!?!?! …to view beyond the short term, I still say we’ve got another full notch drop in the coming months.Ultimately… I’d air on the side of caution. Credit crunches, write downs, balace sheet losses, and protecting Wall St are one thing. …but starving people is another!!! (especially when there’s available food that should be affordable) Rescue efforts may be more intense based on that! Maybe that’s how the US Gov’t is looking to get back in the good graces of the world’s eyes??? (by solving the food crunch) Did I say it first? Yet another conspiracy theory? Oh, I gotta stop typing!@ CaponeI believe there are links… but the repo’s I see aren’t advertised. I can’t say anything more then that.Miss America

what the heck… last attempt and then forget it…as an average non-economist shmuck, this \"Bookings rose 1.5 percent for goods meant to last several years, outside of cars and planes, following a 2.1 percent decline for February,\" appears to me outrageous. So excluding cars and planes it is all good. What ? excluding food and energy, CPI is fine too. Ok, well can we then EXCLUDE Boeing\’s export of billions in planes, etc.(you know McDonnel Douglas produced military for WWIII hopefully to allies but doubtful etc.) from the TRADE DEFICIT for some consistency ? If someone were to have tracked a per ounce price of Cheese Flavored Doritos over the past 8 years, they would have been better served in gauging inflation than to follow the numbers provided by the US Financial Dictatorship. Off the cuff, I would place the odds of a depression as high as 25%, hyperinflation as high as 25% and something in the middle of the two at 50%. It is absolutely incredible up to this point the number of issues topics covered in this space which have become the eventual reality… @Miss America, may I request a link to a place where I can track repo rates ? Written by Capone

@KJ Foehr:Hold on to them !

KJ-remember, the market can remain irrational much longer than you can remain solvent….

Dow going up triple digits!

http://www.bloomberg.com/avp/avp.asxx?clip=mms://media2.bloomberg.com/cache/vv2t7zvsQcys.asfCredit Suisse Posts SF2.15 Billion Loss on WritedownsWorst homesales in 17 yearsPharmaceuticals report 4%+ losses…but Durables up!! Market UP! The sheeple will buy it!

From Hellasious blog Sudden Debt; A nice,concise and heavy hitting summation:Wednesday, April 23, 2008The Greenback: Toward A New Monetary PolicyAs we transit to a world of resource depletion and the reversal of the Permagrowth model, what is the proper monetary and currency regime? Clearly, not the existing fiat/credit currency, which depends entirely on financing present consumption by discounting future growth that may never occur. Just as bad would be a throwback to precious metals. It would suppress economic activity without providing incentives for developing alternative energy resources.Energy will be the real gold standardPoliticians have been been feeding us this crap about future growth delivering us from our lack of discipline and vision today.Just not sure how energy credits would be feasible.Written by Hubbs

The centralization of protectionist power (protecting the few who whill have the power) in the US is well underway and near completion. If the Fed is allowed to become \"the supervisor\" of the US financial system and banking is opened up to commercial ownership of financial entities, the task will be done. This is one of the most dangerous political environments ever for the US…the sheeple have been herded, now let the slaughter begin…

More contribed conspiracy…ECB President Jean-Claude Trichet said Thursday that he\’s concerned about recent sharp fluctuations in exchange rates. \"We\’re concerned about the possible implications for financial and macroeconomic stability,\" Trichet told reporters, according to Dow Jones Newswires. He added that it\’s \"very important\" that U.S. authorities have said a strong dollar is in the country\’s own interest. Trichet also reportedly said that the ECB\’s current monetary policy stance would contribute to achieving the ECB objective of price stability, and that it would help \"anchor inflation expectations.\" ECB executive board member Juergen Stark echoed Trichet, telling reporters that the central bank\’s current monetary policy stance will \"contribute to achieve our medium-term objective\" of price stability, according to news reports. The remarks came after the euro hit a record high against the dollar Tuesday of $1.6020. \"Is it a coincidence that the change in tone came after the euro breached $1.60, and that so many ECB members are taking a less hawkish tone? We think not,\" wrote Win Thin, senior currency strategist at Brown Brothers Harriman.

@KJCapitulate some, hold on to the rest.

Why are markets rallying in face of such bad news?First, it isn\’t really people controlling the markets now. It\’s leveraged institutional trading money. It can move out as fast as it moves in, especially if leverage dries up.It\’s very sophisticated money that can go short as quickly as it can go long. And there will come a time when a lot of that money turns very bearish and short. It\’s the ultimate profit-making end game.These are global markets. Europe is fundamentally a lot stronger market than the U.S. But European stocks have been getting pounded compared to the U.S. mainly because their markets aren\’t as leveraged or manipulated. That will correct as arbitraguers assess values and opportunities.Deep into a recession, the market begins to discount hyped-up forward earnings and P/Es based on them. There is nothing out there capable of driving earnings higher over the next 4-6 quarters at least. The smaller, more domestic and more leveraged a company is, the more vulnerable its earnings will be and the more multiple contraction will happen.Finally, before this debacle has run its course, J6P will be yelling and screaming to his Congressman to fix this mess with some real regulation of financial markets.There have been two eras of financial market regulation since the early 1930s. In one era, the government protected the rights of regular investors by limiting leveraged trading and self-dealing. In the second, since the late 90s, the govt. has used leverage and self-dealing to prop up the markets and keep them from crashing. The govt. has become leverage junkie #1. The second era will end soon enoughRich AT CR

Nihon ochita keizai — Doshitehttp://www.mises.org/article.aspx?Id=1099

This bear growls onPosted by Ambrose Evans-PritchardNo bear wants to be a perma-pessimist, ever waiting for the sky to fall. Economic gloom: will blue skies return to the Bank of England?So, sunk in a deep armchair with an optimistic bottle of Rioja (Baron De Ley Reserva), I have tried to tot up reasons why the great credit smash-up of 2007-2008 may now be safely over, heralding sunlit uplands once again. 1) Ben Bernanke has carried out the most dramatic rescue since the creation of the US Federal Reserve. His emergency rate cuts – 125 basis points over eight days in January – was a \"game changer\", as they say in London’s American Quarter, Canary Wharf.By cutting rates from 5.25pc to 2.25pc since September, the Fed has averted \’re-set Armaggedon\’ on the Greenspan mortgages – those floating rate \’teasers\’ taken out in 2005 to 2007. Payments will barely jump at all for most subprimers. Big difference.The cuts are heavenly manna for the banks. These miscreants can now play the \"steepening yield curve\", using their monopoly privileges to borrow cheaply from the US Government and lend back expensively to the same US Government on long-dated bonds. This is the time-honoured method for rebuilding balance sheets. It works wonders. Even better (from the banks point of view), few people are aware of this massive bail-out.2) Bernanke has accepted \’bus tickets\’ as collateral. The broker dealers (Bear Stearns, et al) can take their waste to the Fed’s Discount window, putting a floor under the entire shadow banking and $516 trillion derivatives nexus. Meanwhile, Fannie Mae and Freddie Mac have been armed with nuclear weapons to win the credit war. De facto, if not de jure, the mortgage industry has been nationalized. Big difference.3) The Bank of England has woken up. Better late than never. As Professor Charles Goodhart (LSE and ex rate-setter) put it: \"When you’re in a crisis, you deal with the crisis. Moral hazard comes when times are easier.\" Quite. 4) A dodgy one, this: China grew at 10.6pc in the first quarter. The BRICS – Brazil, Russia, India, China – are holding up. (If you ignore their galloping inflation, which you can’t, of course: current inflation merely means a future squeeze.) Actually, scrap point 4. It’s rubbish.Still 1, 2,and 3, matter a great deal. Yet, I cannot really believe the tale of salvation. The Greenspan credit bubble and Europe’s EMU bubble (Club Med, Ireland, and ERM-fixers in Denmark and Eastern Europe) have together infused so much poison into the Atlantic economy that it will require a brutal purge – like chelating heavy metals from the brain. America, of course, is already in recession – although the cascade of defaults, business closures, and job losses has barely begun.Japan is in recession too, according to Goldman Sachs. It is still the world’s second biggest economy by far, lest we forget. Britain, Ireland, Spain, Italy, and New Zealand, are tipping into housing slumps and demand implosions of varying severity.Ontario and Quebec have stalled. Canada’s growth is the weakest in fifteen years, hence the half point cut by the Bank of Canada yesterday.Australia is on borrowed time, whatever the price of coal and iron ore. Household debt is 175pc of disposable income, up in La La Land with England, Ireland, Denmark, and the Dutch. The wholesale funding market for mortgages that underpins this nonsense remains frozen.Together these countries and regions make up roughly 45pc of the global economy, and over half global demand. My hunch is that this bloc will be sliding towards full-blown deflation within a year as the commodity bubble pops and job losses set off a self-feeding downward spiral.The alleged parallel with the oil spike of the early 1970s is a snare. Debt leverage has been more reckless this time. It must contract more viciously. Inflation is less sticky (going down) in the Anglo-Saxon world, if not flexless Europe, where stagflation awaits. If you think that core Europe – Greater Germany, Benelux, and the Scandies (France is faltering) – can somehow tough it out as the rest of the OECD’s industrial family hurtles into a brick wall, read the IMF’s “Regional Economic Outlook: Europe”, published this week.The Fund has cut its eurozone growth forecast to 1.4pc this year, and 1.2pc next – with perma-slump pencilled in for Italy. This puts it at daggers drawn with the European Central Bank, the fervent apostle of decoupling.Europe will suffer 40pc of the entire $940bn global losses stemming from the credit crunch. Euro banks alone will lose $123bn (compared to $144bn for the US). \"Loss recognition will need to catch up,\" said the IMF.\"Liquidity remains seriously impaired. Lenders are tightening credit standards, particularly for loans to enterprises,\" it said.\"The deteriorating economic outlook could weaken European and corporate balance sheets appreciably,\" it said.On it goes, more or less dire, if you adjust for the IMF’s softly-softly style.The report contains a grim chapter on what may happen along the vast arch of over-heating silliness from the Baltics to the Black Sea, funded by Austrian, Swedish, German, Belgian, and Italian banks. \"Europe’s emerging economies are susceptible to financial shocks, which could make the situation dramatically worse,\" said Michael Deppler, the Fund’s Europe chief.Last year, private credit grew 62pc in Bulgaria, 60.4pc in Romania, 55.2pc in Kazakhstan, 45pc across the Baltics. Need one say more?Current account deficits have reached 22.9pc in Latvia, 21.4pc in Bulgaria, 16.5pc in Serbia, 16pc in Estonia, 14.5pc in Romania and 13.3pc in Lithuania. The gap has been plugged by foreign loans. These are no longer forth-coming. Spreads have ballooned by over 500 basis points.\"Banking systems that are heavily dependent on foreign borrowing to support credit growth could face a sudden shortfall,\" said the IMF. Woe betide the creditors. Loans to the old Soviet bloc account for 23pc of the entire asset base of the Austrian banking system, and 10pc of the Swedish and Belgian systems.As Europe’s drama slowly unfolds, the ECB is sticking defiantly to its orthodox line. The IMF suggests looking beyond the current food and oil spike (inflation is at a post-EMU high of 3.6pc), and preparing \"some easing of the policy stance\".Axel Weber, the German Bundesbank chief and leader of the Uber-hawks, will have none of it. \"I do not share the vision of the IMF,\" he said, tartly. One notes that the Bundesbank was quieter when Germany was in the dumps and needed lower interest rates. It acquiesced in roaring money supply growth as inflation fuelled bubbles in the Latin Bloc – the cause of their current distress. Such is the hypocrisy of EMU. Beware the pious incantations by Mr Weber, a German nationalist in Euro-clothing. (I will return to the theme of Mr Weber in another blog.) The ECB’s \"error\" will become clear over the next year as the house price crash across Club Med and Ireland combines in a lethal brew with the East Bloc credit deflation. Germany will not be immune from the blow-back. It has funded a good chunk of Club Med’s foreign debts: Spain ($362bn), Italy ($275bn), Greece ($129bn), Greece ($98bn), and – honorary Club Med – Ireland ($123bn).Far from being the shock absorber, Europe may prove to be the accelerator of this post-bubble denouement.Once you add Europe to the Anglo-Saxon and Japanese sick list, you reach 60pc of world GDP, and two thirds world demand.This leaves the global boom on tenuously narrow ground. Who is going to buy all those exports from China? Who is going to keep pushing commodity prices into the stratosphere? This bear growls on.Good Rioja,
nevertheless.http://blogs.telegraph.co.uk/business/ambrosevanspritchard/april2008/thisbeargrowlson.htm

@Gloomyare you still holding on to your short positions or have you capitulated?

1:53 Motorola posts wider loss1:52 BMW to take $372 mln Q1 charge on slow U.S. sales: reportsOh, by the way, there is now 6 inverted yield curves in industrialized, mature economies with two other be flat…so much for exports saving the US

@Guest on 2008-04-24 12:58:25Interesting, where do you look them up?

Buyout Firms Increasing Hiring in Emerging Marketssign of the timeshttp://www.cnbc.com/id/24293892

@KJThink again..when you capitualte, you let someone else walk away with your money!This is an IRRATIONAL market and it has to come down from these ludicrous levels.I will hold on to my shorts because until Dow tanks to 10K levels..

I couldn\’t pull the trigger.new thread