I know it went up a little today, but that don't mean shit; the fundamentals are fucked and so are we:
"Stocks Slip as Fed Says Credit Crisis Is Contained" by VIKAS BAJAJ and EDMUND L. ANDREWS/New York Times September 6, 2007
Stocks fell yesterday as investors were unsettled by reports that showed the troubles in the housing market were deepening even as a Federal Reserve survey of regional conditions found little evidence of the turmoil’s having damaged other parts of the economy.
The sell-off briefly intensified as the release of the Fed’s beige book, which summarizes anecdotal reports about the economy from business executives across the country.
The Standard & Poor’s 500-stock index closed down 1.2 percent, or 17.13 points, to 1,472.29; it had fallen by as much as 1.5 percent after the beige book was released in the early afternoon. The Dow Jones industrial average closed down 143.39 points, or 1.1 percent, to 13,305.47.
Early yesterday, an index that tracks signing of contracts for sales of existing homes tumbled 12.2 percent for July, to its lowest level in more than six years, the National Association of Realtors reported. The trade group said its members were reporting that buyers of homes were having a tougher time obtaining financing.
Pending home sales dropped by nearly 21 percent in the West, which has been hit hard by a spike in interest rates on jumbo mortgages — those for amounts higher than $417,000.
Marc D. Stern, chief investment officer at Bessemer Trust, an investment firm in New York:
“The fact is that housing troubles are still building. To say that we have bottomed is very much premature. The effect on economic activity will grow in the second half of the year and into 2008.”
The Fed report released yesterday said that the credit crisis had made it more difficult for people to obtain mortgages and that “the weakness in the housing market deepened” in most of the Federal Reserve districts. But it also said that credit remained readily available for most consumer and business borrowers and that, outside of real estate, the convulsions in financial markets had had “limited” effects on economic activity.
[That's where middle-class wealth is, bozo!]
In a speech Friday at the Fed’s annual symposium in Wyoming, the chairman, Ben S. Bernanke, said the central bank would place more weight than usual on anecdotal reports because the incoming statistical data might not be timely enough to measure a broad economic impact of the credit crisis.
But Fed officials made it clear last week that they were very worried about the housing market, where the news was gloomy, and the readings from other areas were mixed rather than buoyant.
There have been a few signs that the housing market’s problems are spilling into the economy as a whole.
The beige book reported that retail sales were “modest to moderate” in most of the country, but inventory was “at or above desired levels” in districts that mentioned it:
“Several retailers reported that they planned to or had already heavily discounted merchandise to move inventory.”
A crucial reading on the economy will come tomorrow when the Labor Department releases employment figures for August. Yesterday, a privately compiled payroll report from Automatic Data Processing showed that corporate payrolls grew by just 38,000 in August, down from 41,000 in July and 143,000 in June.
Many forecasters say the economy will be able to weather a surge in mortgage defaults and falling home prices if jobs remain plentiful and wages continue rising. Experts acknowledge, however, that employment is a lagging indicator of the economy’s health and that many corporate sectors would be hurt if consumer spending deteriorated significantly.
Mr. Stern of Bessemer Trust, who does not expect a recession: “The job market has been a stalwart of strength. We are dependent on companies continuing to create jobs.”
[And not outsource, er...?]
Among the S.&P. 500 stocks, 422 fell, 76 rose and 2 were unchanged; all but 3 of the 30 Dow companies fell. Financial stocks accounted for more than a third of the losses in the S.&P. 500. Information technology, industrial and consumer discretionary stocks accounted for a third of the decliners.
More broadly, the beige book noted that manufacturing activity expanded, except in automobiles and building materials. Given the turmoil and volatility in the financial markets in the last month and a half, some market specialists say the Fed may be forced to be freer with a rate cut than it normally would be.
Bruce Bittles, chief market strategist at Robert W. Baird & Company:
“It would be psychological. It would leave room for further rate cuts if needed. There is no guarantee that lower rates will help this housing situation. The important thing is that it stabilizes other areas like the stock market.”
[Yeah, fuck ma & pa shmoe in their homes!]
Why didn't this make the Globe's print?
"Stocks fall as Street looks for rate cut" by Tim Paradis/Associated Press September 5, 2007
NEW YORK --Stocks finished sharply lower Wednesday as a jittery Wall Street sold off on a report showing a large drop in pending home sales and read anecdotal data from the Federal Reserve's regional banks as offering little more assurance that an interest rate cut is likely. The Dow Jones industrial average dropped more than 140 points.
Bond prices soared as investors again sought the safety of government debt, sending yields to multi-month lows. The yield on the 10-year Treasury note, which moves inversely to its price, fell to 4.47 percent, its weakest level since March 14, and down from 4.56 percent at Tuesday's close.
[That red ink sucker gonna pay you off? Ha-ha-ha-ha-ha!!
There is such a thing as DEFAULT, you know, and AmeriKa is headed there because of the WARS!]
The National Association of Realtors said pending sales of existing homes fell in July to the lowest level in nearly six years. The report also worried investors who are nervous about the housing market growing so weak that it drags the economy into recession.
The Fed's Beige Book, which describes economic conditions in regions around the country, said that while upheaval in the financial markets has made the housing slump worse, the overall economy hasn't been widely harmed. Wall Street appeared disappointed that the Beige Book's findings didn't deliver a sure-bet for a rate cut, which markets have been pining for.
Walter Gerasimowicz, chairman and chief executive of Meditron Asset Management in New York, downplaying the market's initial pullback after release of the Beige Book as an overreaction:
"The markets are reacting to absolutely every bit of information which is coming along tick by tick. I'm happy to see that the underlying economy is still in fairly sound mode."
He noted that had the Beige Book shown a weakened economy investors might have been enthusiastic about the increased chance for a rate cut but grown more concerned about the prospect of a faltering economy.
The downcast mood on Wall Street Wednesday ran counter to a somewhat more upbeat mood of recent sessions. The Dow Jones industrial average rose in three of the last four sessions, jumping 91 points Tuesday, as investors sought stocks that have been turned into bargains by declines.
The Dow ended down 143.39, or 1.07 percent, at 13,305.47, after having fallen as much as 200 points in the session. The dollar was mixed against other major currencies, while gold prices slipped.
Investors concerned about a stumbling housing market, rising mortgage defaults and tightening access to credit have been hoping the Fed will reduce its benchmark fed funds rate when it meets Sept. 18.
Kent Croft, chief investment officer at Croft Leominster Investment Management in Baltimore:
"It seems like every day you've got some news that subprime and some of the effects of the housing impact aren't quite so bad and the next day you've got something that says it is worse than we thought in another area. I just think it's a continuation of the choppiness and that worries that have been going on."
He said Wall Street could take months to sort out its concerns about issues such as bad subprime loans, which are made to borrowers with weak credit.
Gerasimowicz noted: "The market remains very unpredictable and a lot of that has to do with the subprime debacle that we're facing."
In corporate news, Mattel Inc. announced a third major recall of Chinese-made toys in little more than a month because of excessive amounts of lead paint. The world's largest toy maker said the move affects about 800,000 toys. Mattel rose 1 cent $21.98.
[A recall for poison -- and the STOCK RISES?! WTF is wrong with this picture?]
Apple Inc. fell $7.40, or 5.1 percent, to $136.76 after investors were disappointed about newly announced versions of the company's iPod digital media players.
[Yeah, I checked one out. They suck!
Who needs all this extra shit, half of which is never even used?!
$400 for what?
A piece of crap that I can't see the movie on (unless I use binoculars)!!]
Costco Wholesale Corp., the warehouse retailer, fell $2.61, or 4.2 percent, to $59 after reporting its August same-store sales rose a weaker-than-expected 2 percent largely due to strong international sales. Same-store sales, or sales at stores open at least a year, are a widely followed indicator of retail health.
Most major retailers will be reporting their August sales on Thursday.
Declining issues outnumbered advancers by more than 3 to 1 on the New York Stock Exchange, where consolidated volume came to 2.93 billion shares, compared with 2.76 billion shares traded Tuesday.
Overseas, Japan's Nikkei stock average fell 1.60 percent. Britain's FTSE 100 closed down 1.66 percent, while Germany's DAX index declined 1.73 percent, and France's CAC-40 tumbled 2.14 percent."
[Believe what you want, reader!
After Enron -- and even before -- I thought the "bankers" were a bunch of thieves and crooks!]
