MarketWatch.com - Pre-Market Indications

Saturday, May 29, 2010

Fiat Money And Schemes Collapsing

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The DOE reported crude oil inventories up 646,000 barrels, gasoline fell 3.19 m/b and distillates rose 1.52 m/b.

The commercial paper market fell again by $2.6 billion to $1.073 trillion.

Goldman Sachs wants to settle with the SEC exactly as we predicted. They would neither admit nor deny and be fined $1 to $ 2 billion, which is chump change to them.

Lehman is seeking return of $8.6 billion that JPMorgan Chase seized before Lehman filed for bankruptcy. The claim is Morgan had unparalleled inside knowledge. There is no honor among thieves.

Part of the deflationary mode is borrowers are paying down debt and saving at a 3.4% rate. It could be the elitists, as we speculated months ago, want to take down the entire world financial system in the next 1-1/2 to 2 years. Hi Ho stimulus. The fiat Ponzi scheme is collapsing.

During the past few months the f inancial world and nations have been consumed with the problems of sovereign debt and so they should be. Debt is a worldwide problem, but that problem has been exacerbated by the ability of banks, brokerage houses and insurance companies to manufacture derivatives.

The Greek tragedy continues as the IMF and others get ready to fund not only Greece, but all the PIIGS as well. That includes Canada, the UK, which has refused to contribute, because they are broke, and the US whose end will be about $60 billion. Greece is rolling their old debt in order to bail out the banks. It won’t be long before Spain, Portugal, Ireland and Italy will be doing the same thing. The other euro zone members are saying why should we bail out these countries, which in turn are bailing out banks?

These euro zone countries are saying all we did was what everyone else was doing. Governmental debt has hit unprecedented levels worldwide. It is now called a sover eign debt crisis. Any recovery in any of these countries will remain anemic as long as this situation exists. More debt is being created via stimulus in some countries, and in others austerity has begun. In the US real growth is only 1.3%, and that is fading fast having fallen from 6.5% in the fourth quarter.

The top participant was penalized in 1985 at the Plaza Accord and in 1987 at the Louvre Account and as a result entered depression in 1992. That is Japan. Their debt is now 200% of GDP. Structural impairment still sticks out like a sore thumb. They are trapped in the same quandary, as Europe is, growth via debt. It is interesting to note that if global military spending of $1.5 trillion ended there would be o trouble funding debt. The US spends more than $600 billion a year, or over 40% of the world’s total, so they can bludgeon the world’s inhabitants into doing what the US wants them to do, it is called tyranny.

The foregoin g is certainly not growth. Growth has to come from the development of domestic markets, not as it has been or is today via foreign trade and the endless creation of debt. The experiment of free trade, globalization, offshoring and outsourcing hasn’t worked. Look at what it has done to the US economy. It has gutted it. It has been based on the exploitation of what is essentially slave labor and the theory of comparative advantage. This method of impoverishing the US economy has been funded by the workers themselves via their savings and those of their pension plans. Instead of transnational conglomerates working with foreign governments to keep wages low they should be working to increase them. That never occurred to the Illuminists who run these corporations, nor governments such as China. As a result we have had the opposite effect. Slightly higher wages in China and much lower wages in the US. The ultimate result is going to be tariffs on goods and services to level the playing field.

The euro for Greece and others works both ways. The weaker members acquire a stronger currency and as a result a stronger economy based in part on the strength of its fellow members. Thus, Greece surrendered its sovereignty for the ability to create domestic debt. Unfortunately they cannot print euros, so they cannot devalue. Instead they default unless subsidized by other members.

The dollar had been probing lows on the USDX at 74 just several months ago. In order to solve the dollar weakness and sap euro strength a crisis was created. From out of nowhere Greece was exposed for its debt. Before this took place starting in October major NYC banks were accumulating dollars, because they knew what was going to happen, because they planned it that way. Do not forget Goldman Sachs knew all of Greece’s secrets - they created them.

The events in Greece have left many European banks badly exposed and ridin g to the rescue has been the Fed with a new swap facility. Last time, over 15 months, the Fed says they used $583 billion. The Fed is again printing money from out of thin air to be used by foreign nations to rescue European banks. They, of course, would have us believe it was to save the European financial structure, when the move was to save private banks that should have never made loans to Greece and other PIIGS, nor purchased their bonds. As professionals they knew better. Effectively the American taxpayer is funding these banks and they pay the price for this via inflation and greater debt. The Fed is further debasing the dollar.

As a result of what the public would call hocus-pocus, the price of gold has been rising. There are other factors making gold rise, but this is the latest. Finally professionals are paying attention to these problems, but more importantly, that the “President’s Working Group on Financial Markets” is manipulating all m arkets, but particularly the gold and silver markets. It won’t be long, within two weeks that a class action lawsuit, one of many by silver owners, will be filed against JPM Morgan Chase for manipulating the silver market. That should get Wall Street’s and Washington’s attention. This kind of suit is very difficult to defend against. Like Barrick Gold not many years ago, they admitted taking direction from the US government for hedging in the gold market, so will Morgan defer to the US government to explain their actions. Irrespective, Morgan will lose and the manipulation of the silver market and probably the gold market will end.

It should also be noted that the CFTC was complicit in this criminal activity. They had all the evidence and had to be forced to investigate. The Justice Department was forced to investigate as well.

This swap being done by the fed on the short-term could be somewhat injurious to gold, because the reci pients are very liable to use some of those funds to short gold and silver.

As we explained earlier there is a fight going on between the dollar and gold for currency supremacy. The recent dollar rally was part of the plan to keep the dollar as the preferred asset or currency. It didn’t work all that well because gold rose more than the dollar. The dollar swap will be used to keep European banks from going under and that is inflationary. The Fed is obviously buying their subprime assets. The bank proceeds from the garbage sold to the Fed will in all likelihood be used to purchase US Treasuries. In a late note now that Fitch has lowered Spain’s credit rating from AAA to AA+, they’ll be even more pressure on European banks and government for Fed assistance. Now not only are the banks broke, but so are the governments. That said how could Treasuries be a store of value? They cannot thus; sooner or later professionals will be storming the gold parape ts. If you think markets are currently volatile, just wait you haven’t seen anything yet.

There was a spike in purchase applications in April, followed by a decline to a 13 year low last week. As Fratantoni noted last week: "The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season."

Top national GOP recruit Vaughn Ward on Tuesday lost his primary in Idaho after a series of missteps by his campaign, throwing the Republican Party's chances in doubt against top-targeted Rep. Walt Minnick (D-Idaho).

Ward was trailing state Rep. Raul Labrador (R) 48 to 39 percent, with 90 percent of precincts reporting. The Associated Press called the race for Labrador early Wednesday.

Ward becomes the latest establishment favorite to go down in defeat, although his loss will more likely be chalked up to his campaign's myriad gaffes.

He was one of the first 10 candidates named to the final stage of the National Republican Congressional Committee's (NRCC) Young Guns program for its top 2010 hopefuls this cycle. Over the past month, however, his campaign has fallen victim to multiple charges of plagiarism, revelations that he didn't vote in the 2008 presidential election and a slip-up in which he said (in front of his Puerto Rican-born opponent) that Puerto Rico is a country (hint: it's not).

That opponent, Labrador, moves on to the general election and leaves national Republicans to evaluate where the race fits in their list of priorities this November. Labrador, an immigration attorney, is something of a blank slate to Washington.

He joined the NRCC's Young Guns program but has yet to reach the goals required to be named to the first stage of the program.

Given the right candidate, the freshman Minnick's district should be at the top of the GOP's target list. It went for Sen. John McCain (R-Ariz.) with 62 percent of the vote in 2008, but former Rep. Bill Sali (R-Idaho) severely underperformed the top of the GOP ticket, losing narrowly to Minnick.

Sali backed Labrador, while Ward was backed by former Alaska governor Sarah Palin (R).

Minnick has proven a savvy congressman, voting conservative on almost all major pieces of legislation and building a sizeable war chest for 2010. Republicans can't rely on merely a good environment to take him out.

In other races in Idaho on Tuesday, Gov. C.L. "Butch" Otter (R) and Sen. Mike Crapo (R) both overcame nominal primary opposition, as did Rep. Mike Simpson (R-Idaho), who faced a reasonably well-funded opponent and was a Troubled Asset Relief Program (a.k.a. bailout) supporter. All will be heavy favorites in the general election.

The federal prosecutors investigating Goldman Sachs are focusing on Timberwolf, the infamous "shitty deal" repeatedly cited in a tense Senate hearing last month, according to people who have been contacted by the Manhattan U.S. Attorney's office.

The probe raises the possibility of criminal charges against the storied Wall Street firm, which was charged in April by the U.S. Securities and Exchange Commission with civil fraud for allegedly misleading investors about another subprime mortgage-related security called Abacus.

Investigators from the U.S. Attorney's office have reached out to individuals involved in the deal, including David Mapley, the former independent director of an Australian hedge fund who claims that the firm collapsed shortly after Goldman sold it $100 million of securities in Timberwolf, a $1 billion collateralized debt obligation.

In an interview with the Huffington Post from his office in Geneva, Mapley said that he has been contacted b y the U.S. Attorney's office and that he expects to be interviewed by them soon. Mapley brought his complaints about Goldman's role in the deal to the SEC in December 2007, met with SEC lawyers several times in 2008 and he says that he continues to talk to them.

"Overall, the whole thing was a fraudulent concoction," says Mapley, who says that it was one of the most egregious cases he had seen in his decades working in finance. "We examined the whole trade, what led up to the trade, the way it was marketed and everything about it was inaccurate. You think you're buying one thing and what you see is totally different."

Among the most serious allegations, Mapley claims that Goldman sold Timberwolf securities to the fund at marked-up prices -- while Goldman's trading desk was busy shorting such CDOs tied to toxic subprime mortgage securities.

Mapley says that the hedge fund, Basis Yield Alpha Fund, where he was an ou tside director, ultimately went into liquidation "with Timberwolf tipping the balance."

To help us understand exactly what's going on, and why debt loads that have been growing for years have suddenly become a market-melting issue, I turned this week to Satyajit Das, an independent credit analyst in Australia. Though his vantage point is half a world away, Das is frequently sought out as a consultant by central bankers, government officials and fund managers for his unconflicted insights and his unusually clear explanation of the dense pathways of debt and its derivatives.
I started by asking why the sovereign bond crisis reared up to spook investors last week despite the lack of any new news.

"It's never incremental news -- it's how old news sinks into the people with brains the size of caraway seeds who populate the financial markets," he said from his office in Sydney. "They always depend on selective information and proce ss it in uneven ways. Even smart people tend to believe what they want to believe, and they right now they're using the idea that central banks and governments will miraculously prevail as a crutch. This is magical thinking. I have said from the beginning that governments won't have enough money to bail everyone out."

Das believes the central problem is that governments have already spent more than $1 trillion in taxpayer-generated and borrowed funds but are not getting as much bang for their buck as expected. If you strip out government spending and low interest rates, he notes, there's not a whole lot of activity going on. The government has tried to prime the pump, but the pump is still just dribbling.

He suggests we not be fooled by recent earnings reports or government stats, pointing to U.S. bank earnings as especially inaccurate. JP Morgan has a balance sheet of $1 trillion and can borrow at essentially zero, he notes. So if they just go out and buy 10-year bonds at 3% they should be able to earn $30 billion a year. Yet the bank announced a profit of $3.3 billion last quarter.

"What does that tell you? It says they are losing money on everything else," Das says. "Strip out the gifts, and it's big net loss." And at big industrial concerns like General Electric, he argues, revenue growth is anemic -- so earnings growth is solely stemming from cost-cutting and layoffs.

In February, Defense Secretary Robert Gates authorized $150 million in security assistance for Yemen for fiscal 2010, up from $67 million last year.

Officials told Reuters the money would be used in part to bolster Yemen's special operations forces to lead an offensive targeting al Qaeda in the Arabian Peninsula, which claimed responsibility for a failed plot to blow up a U.S. passenger plane on Christmas Day.

The group has emerged as one of al Q aeda's most active affiliates, and the Obama administration recently took the extraordinary step of authorizing the CIA to kill a leading figure linked to the group -- American-born Muslim cleric Anwar al-Awlaki.

The U.S. government’s Aaa bond rating will come under pressure in the future unless additional measures are taken to reduce projected record budget deficits, according to Moody’s Investors Service Inc.

The U.S. retains its top rating for now because of a “high degree of economic and institutional strength,” the New York- based ratings company said in a statement today that was little changed from a credit opinion released in February. The outlook is stable, the statement said.

The government’s finances have been “substantially worsened by the credit crisis, recession, and government spending to address these shocks,” Moody’s analysts lead by Steven A. Hess wrote. “The ratios of general government debt to GDP and to revenue are deteriorating sharply, and after the crisis they are likely to be higher than the ratios of other Aaa-rated countries.”

Debt to revenue has more than doubled over the past three years and is now over 400 percent, which could lead to “potential stress” on finances, the report said.

“This whole financial crisis in Europe has actually benefited the U.S. government in its access to finance,” Hess said in a telephone interview. “The U.S. Treasury market has become once again, as it was during the recent financial crisis globally, the safe haven, and therefore lots of money flows into the U.S. Treasury market and that is a very positive.”

Tuesday morning rumors and a FT story about Germany extending its short-selling ban prevented US stocks from a larger opening decline and generated a rally after the opening onslaught.

One rumor said the ECB would cut its 1.00% benchmark rate by 50bps generated a rally in US stocks after the opening carnage.

Any ECB rate cut would pressure the euro, which in turn would induce traders to sell European sovereign debt, which would exacerbate Europe’s debt-death spiral.

On Tuesday morning, the NYSE invoked Rule 48, which allows the NYSE to suspend the requirement to disseminate price indications at the open. Looks like all that technology isn’t very useful â€" or does the opaqueness aid and abet the connected few in their desire to operate with ‘an edge’?

Tuesday’s rally got a second-stage boost during midday when Cong. Barney Frank stated that forcing banks to spin off their derivatives operations “goes too far” in regard to financial reform.

There is a new dynamic that most people cannot cogitate: The current crisis is not the usual crisis of a pr ivate-sector firm or problem appearing that needs a public sector bailout.

Now, the public sector needs a bailout and there is no private sector entity large enough to bailout the public sector. So government officials and central banks are trying to euchre the markets and people into accepting the notion that the imploding public sector can bailout itself out by increasing its indebtedness.

In the Nineteenth Century and early Twentieth Century the private sector (i.e. JP Morgan or Europeans) bailed out governments. Then the Twentieth Century movement of gigantic government that increased its size and control over the private sector produced governments and central banks that would bail out private sector firms. But now, governments and central banks are too large for a private sector bailout.

This of course, destroys the multi-decade concepts of risk-free rate of return, Keynesian economics, fr eely-traded markets, buying every market dip, central bank omnipotence and child-like belief in a supra entity that stands ready at all times to bailout everyone in order to prevent another depression.

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year. At the same time, government-provided benefits â€" from Social Security, unemployment insurance, food stamps and other programs â€" rose to a record high during the first three months of 2010. The result is a major shift in the source of personal income from private wages to government programs.

The trend is not sustainable, says University of Michigan economist Donald Grimes [How is this different that Greece or most of Europe?]

A record-low 41.9% of the nation's personal income came from private wa ges and salaries in the first quarter, down from 44.6% when the recession began in December 2007.

http://www.usatoday.com/money/economy/income/2010-05-24-income-shifts-from-private-sector_N.htm

US Plays Down European Crisis but China Worried The United States suggested Europe's debt crisis would have minimal impact on global growth, but China took a more pessimistic view, warning it would impact demand for its exports and other regions would suffer too.

Loans guaranteed by the Federal Housing Administration, the U.S.-owned mortgage insurer, may be involved in more home-purchase transactions than borrowing financed by Fannie Mae and Freddie Mac.

FHA lending last quarter may have topped the combined volume of gov ernment-supported Fannie Mae and Freddie Mac in a home-lending market that’s still a “government-financed market,” David Stevens, the agency’s head, said today at a conference in New York, citing research by consultant Potomac Partners.

“This is a market purely on life support, sustained by the federal government,” he said at the Mortgage Bankers Association conference. “Having FHA do this much volume is a sign of a very sick system.”

The Conference Board's confidence index rose to 63.3 for May, the highest reading in two years. 58.5 was consensus. If you have been playing along at home over the past year, you already are assuming that future expectations once again soared. You are correct.

The Conference Board’s ‘present conditions’ increased to 30.2; but ‘expectations for the next six months’ sur ged to 85.3, the highest level since August 2007. The stock market peaked in October 2007.


In October of last year  <http://www.zerohedge.com/article/rare-glimpse-feds-discount-window-courtesy-brewing-lehman-barclays-scandal> [1]we wrote an extended piece discussing the conflict between the bankrupt Lehman Brothers estate (i.e., its unsecured creditors) and Barclays, in which JPMorgan played a prominent part, as it was the critical tri-party repo clearing bank on all of Lehman's collateral that would subsequently go to Barclays. As we summarized, extortion attempts back then by Barclays only had the adverse effect of making Jamie Dimon very, very angry: "Barclays' attempt to nickel and dime JPM (and the US taxpayers) so infuriated Jamie Dimon that he penned an angry letter to John Varley <http://chapter11.epiqsystems.com/viewdocument.aspx?DocumentPk=5c307517-d810-4392-b1cc-83c4a9ed2e0f>  [2], Barclays Group CEO (which CC:ed Barclays' president Bob Diamond), threatening with litigation in case Barclays is intent on sticking JPM with Lehman collateral that it thought was without value and not worth assuming in a time when every single day stock prices were crashing further lower." As we expected in October, the resolution would most likely involve litigation, as by dint of its collateral clearing position, JPM had unprecedented knowledge about Lehman's affairs: a special status that would likely be abused in a court of law. Sure enough, here is the lawsuit: the estate of Lehman Brothers, desperate to pick another several bps in recovery on their Lehman General Unsecured Claims, has sued JPMorgan, claiming Jamie Dimon's bank pu shed Lehman into bankruptcy by forcing it to turn over $8.6 billion in collateral. As Lehman was completely insolvent long before JPM demanded any incremental collateral comfort, claiming that JPM was the catalyst for Lehman's bankruptcy is absolutely the same as saying that Goldman forced AIG's bankruptcy by increasing its collateral demands. While both arguments are ludicrous, should the JPM case proceed to court, it is tantamount that AIG immediately seek legal action against Goldman Sachs on identical grounds.




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Friday, May 28, 2010

Indications: U.S. stock futures edge up as May winds down

Stock Assault 2.0 - Artificial Intelligence Stock Market Software Alert Email Print

By Steve Goldstein, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures clung to slight gains Friday, with markets looking set for a quiet finish to what's been a volatile week after the release of several economic indicators.

Major index futures pared their already modest gains as economic data released ahead of Wall Street's open had U.S. personal income higher by 0.4% and spending holding flat in April.

S&P 500 futures rose 1.4 points to 1,102.5 and Nasdaq 100 futures gained 2.25 points to 1,866.00.

Futures on the Dow Jones Industrial Average added 7 points.

Global Dow

• MarketWatch Topics: Greece • Asia Markets | Europe Markets | Lat. Am. • Canadian Markets | Israel Stocks | London • U.S.: Market Snapshot | After Hours

Tools • Latin American/Canadian indexes • European indexes | Asian indexes

More on the Markets • Bond Report | Oil News | Earnings Watch • Currencies | U.S. Economic Calendar

/conga/story/misc/international.html 79118

U.S. stocks rallied hard Thursday, on relief that China's denial that it would take action on its holdings of euro-denominated bonds. The Dow Jones Industrial Average climbed 284 points, or 2.9%, in the second-biggest one-day advance of the year.

That said, the Dow industrials head into the final trading day of May with a 6.8% monthly decline.

Garry Evans, global head of equity strategy at HSBC, said the market turbulence of late is a normal correction and doesn't constitute a new bear market.

"While superficially stocks fell because of worries about European debt, to our mind the drop was more because of a convergence of negative factors such as a peaking of U.S. earnings momentum and shrinking liquidity, exacerbated by investment funds that had chased markets up in March and held too-low levels of cash," Evans said in a note to clients.

"In our view the cyclical upswing remains strong and the advantage of the recent wobble is that interest rates, even in emerging markets, will not go up soon."

Friday's data calendar later includes May readings of Chicago-area manufacturing activity and the final University of Michigan consumer confidence survey.

Among companies in the spotlight, Prudential PLC /quotes/comstock/13*!puk/quotes/nls/puk (PUK 15.65, -0.41, -2.54%) said it was in discussions with American International Group /quotes/comstock/13*!aig/quotes/nls/aig (AIG 35.73, -0.73, -2.00%) over the $35.5 billion acquisition of AIG-owned AIA.

Royal Dutch Shell /quotes/comstock/13*!rds.a/quotes/nls/rds.a (RDS.A 52.87, -0.14, -0.26%) said it paid $4.7 billion for a privately held owner of shale gas assets.

BP /quotes/comstock/13*!bp/quotes/nls/bp (BP 43.35, -2.03, -4.47%) was continuing its top-kill operation to stem the flow of oil from the Gulf of Mexico spill. Spill-related costs have reached $930 million, BP said.

Apple /quotes/comstock/15*!aapl/quotes/nls/aapl (AAPL 255.30, +1.95, +0.77%) climbed as it launched the iPad overseas and after published reports of a positive Bank of America Merrill Lynch broker note.

Overseas, the Nikkei 225 moved 1.2% higher in Tokyo and the Stoxx Europe 600 added 0.5%.

The U.S. dollar index /quotes/comstock/11j!i:dxy0 (DXY 86.26, +0.07, +0.08%) weakened 0.1% while yields on 10-year Treasury bonds /quotes/comstock/20m!i:tnx (TNX 33.22, -0.16, -0.48%) fell 4 basis points to 3.32%. Bond prices move inversely to their yields.

In energy dealings, crude-oil futures traded just under $75 a barrel.

Steve Goldstein is MarketWatch's London bureau chief.


NYSE Arca Morning Update - 08:30:00 ET

NYSE Arca Morning Update for Friday, May 28, 2010 :

STOCKS TRADING ON NYSE Arca AT A PRICE 15% OR MORE AWAY FROM
THE PREVIOUS TRADE DAY'S CONSOLIDATED CLOSE PRICE (AS OF 08:30:00 ET)

Stock Thursday's Close Current Price Pct Change Current NYSE ARCA Vol
DJSPW $3.89 $2.13 (45.2%) 1,800
HEV $3.19 $3.90 22.4% 5,383
BCSI $28.82 $23.75 (17.6%) 46,933


10 MOST ACTIVE STOCKS ON NYSE ARCA AS OF 08:30:00 ET

BASED ON DOLLARS TRADED: | BASED ON SHARES TRADED:
Stock $ Volume Price PctChg | Stock Share Vol Price PctChg
SPY $79,638,400 $110.83 0.0% | C 3,764,545 $4.03 0.3%
AAPL $42,306,364 $259.36 2.3% | SPY 717,758 $110.83 0.0%
BP $23,245,208 $43.76 ( 3.6%) | BP 529,235 $43.76 ( 3.6%)
QQQQ $16,535,088 $46.05 0.4% | QQQQ 358,743 $46.05 0.4%
C $15,185,315 $4.03 0.3% | NOK 278,513 $10.42 0.8%
IWM $14,733,986 $67.11 ( 0.0%) | SDS 261,093 $33.50 ( 0.1%)
SDS $8,729,336 $33.50 ( 0.1%) | IWM 219,156 $67.11 ( 0.0%)
EWZ $4,902,534 $63.56 ( 0.3%) | TZA 201,392 $6.60 ( 0.0%)
SPXU $3,521,076 $33.24 ( 0.3%) | AAPL 163,622 $259.36 2.3%
NOK $2,909,256 $10.42 0.8% | F 161,154 $12.09 0.8%


Price changes may be affected by symbol splits and dividends.

Consolidated close price is the last print (excluding prints with trade
conditions) prior to 4PM ET.

This information is also updated on our web page every morning at 8:35ET:
http://www.tradearca.com/data/volume/daily_update.asp

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Indications: U.S. stock futures edge higher as May winds down

Stock Assault 2.0 - Artificial Intelligence Stock Market Software Alert Email Print

By Steve Goldstein, MarketWatch

LONDON (MarketWatch) -- U.S. stock futures leaned higher Friday, with markets looking set for a quiet finish to a volatile week ahead of the release of several economic indicators.

In the last trading day before a three-day break, S&P 500 futures rose 2.5 points to 1,103.60 and Nasdaq 100 futures added 3.5 points to 1,867.20.

Futures on the Dow Jones Industrial Average added 18 points.

Global Dow

• MarketWatch Topics: Greece • Asia Markets | Europe Markets | Lat. Am. • Canadian Markets | Israel Stocks | London • U.S.: Market Snapshot | After Hours

Tools • Latin American/Canadian indexes • European indexes | Asian indexes

More on the Markets • Bond Report | Oil News | Earnings Watch • Currencies | U.S. Economic Calendar

/conga/story/misc/international.html 79118

U.S. stocks rallied Thursday on relief that China denied it was going to take action on its holdings of euro-zone governments. The Dow Jones Industrial Average climbed 284 points, or 2.9%, in the second-biggest one-day advance of the year.

That said, the Dow Jones Industrial Average is heading into the final trading day of May with a 6.8% monthly decline.

Garry Evans, global head of equity strategy at HSBC, said the market turbulence of late is a normal correction and not a new bear market.

"While superficially stocks fell because of worries about European debt, to our mind the drop was more because of a convergence of negative factors such as a peaking of U.S. earnings momentum and shrinking liquidity, exacerbated by investment funds that had chased markets up in March and held too low levels of cash," Evans said in a note to clients.

"In our view the cyclical upswing remains strong and the advantage of the recent wobble is that interest rates, even in emerging markets, will not go up soon."

Friday's data calendar includes personal income and spending for April, as well as May readings of a Chicago-area and the final University of Michigan consumer confidence survey.

Of companies in the spotlight, Prudential PLC /quotes/comstock/13*!puk/quotes/nls/puk (PUK 16.06, +1.56, +10.76%) said it was in discussions with American International Group /quotes/comstock/13*!aig/quotes/nls/aig (AIG 36.46, +2.41, +7.08%) over the $35.5 billion acquisition of AIA.

Royal Dutch Shell /quotes/comstock/13*!rds.a/quotes/nls/rds.a (RDS.A 53.01, +2.66, +5.28%) said it paid $4.7 billion for a privately held owner of Shale gas assets.

BP /quotes/comstock/13*!bp/quotes/nls/bp (BP 45.38, +2.97, +7.00%) was continuing its top-kill operation to stem the flow of oil from the Gulf of Mexico spill. Spill-related costs have reached $930 million, BP said.

Overseas, the Nikkei 225 added 1.2% in Tokyo and the Stoxx Europe 600 edged 0.4% higher.

The U.S. dollar index /quotes/comstock/11j!i:dxy0 (DXY 86.04, -0.15, -0.17%) weakened 0.3% while yields on 10-year Treasury bonds fell 4 basis points to 3.32%. Yields move in the opposite direction to prices.

Oil futures traded over $75 a barrel.

Steve Goldstein is MarketWatch's London bureau chief.


Thursday, May 27, 2010

Indications: U.S. stock futures' rally pared along with growth

Stock Assault 2.0 - Artificial Intelligence Stock Market Software Alert Email Print

By Barbara Kollmeyer & Kate Gibson, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures trim slightly a sharp rise on Thursday after the government projected the U.S. economy expanded less than previously thought in the first quarter, illustrating the danger to the recovery posed by Europe's debt troubles.

In separate reports, the government revised its estimate of first-quarter economic growth down to 3% and said first-time jobless claims last week fell by 14,000 to 460,000.

Stock futures pared a rally sparked by China's denial that it was mulling sales of holdings in European bonds.

Up nearly 190 points, futures for the Dow Jones Industrial Average were lately ahead 155 points at 10,076.00, while those for the Nasdaq 100 rose 35.50 points to 1,827.00.

Futures for the S&P 500 rose 21 points to 1,082.20.

On Thursday, the China State Administration of Foreign Exchange, the agency which manages the nation's reserves, said media reports that it is considering selling some of its holdings of bonds in the euro zone were "groundless," according to a statement published on its website.

Global Dow

• MarketWatch Topics: Greece • Asia Markets | Europe Markets | Lat. Am. • Canadian Markets | Israel Stocks | London • U.S.: Market Snapshot | After Hours

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U.S. stocks on Wednesday gave up a bounce in the afternoon session, after a late-session lapse that coincided with a report in the Financial Times that China was mulling sales of euro-zone bond holdings. The Dow Jones Industrial Average closed off 69.3 points, or 0.7%, to 9,974.45, the first time the benchmark index closed below 10,000 since early February.

The S&P 500 and Nasdaq Composite made similarly sized declines.

"It might be that the market reaction to the story underlines how fragile confidence is at the current time and is a worrying sign that the market is very vulnerable to any negative shock," said Gary Jenkins, head of fixed income research at Evolution Securities. "It may just have been a complete over reaction by a nervous market that is in 'sell first and ask questions later mood' that will be corrected today."

Apart from driving up stock futures, the denial by China triggered a rebound in the euro and gains in European stocks. Asia stocks finished higher as bargain hunters moved in after losses, but euro-related fears lingered.

Wal-Mart /quotes/comstock/13*!wmt/quotes/nls/wmt (WMT 50.49, +0.47, +0.94%) could be active on news its Asda unit reached a deal to buy the U.K. operations of deep discounter Netto in a deal valued at $1.1 billion. Asda is buying the 193 U.K. stores of Dansk Supermarked A/S for 778 million pounds ($1.13 billion) of cash and assumed debt, according to the Danish seller. See related story

BP /quotes/comstock/13*!bp/quotes/nls/bp (BP 45.42, +3.01, +7.09%) rose nearly 5% as the company said its "top-kill" plan for plugging a Gulf of Mexico spill has so far gone according to plan.

Crude-oil futures rallied $1.61 to $73.13 a barrel, while gold futures were little moved.

Barbara Kollmeyer is an editor for MarketWatch in Madrid. Kate Gibson is a reporter for MarketWatch, based in New York.


NYSE Arca Morning Update - 08:30:00 ET

NYSE Arca Morning Update for Thursday, May 27, 2010 :

STOCKS TRADING ON NYSE Arca AT A PRICE 15% OR MORE AWAY FROM
THE PREVIOUS TRADE DAY'S CONSOLIDATED CLOSE PRICE (AS OF 08:30:00 ET)

Stock Wednesday's Close Current Price Pct Change Current NYSE ARCA Vol
NENG $2.66 $3.15 18.4% 5,000


10 MOST ACTIVE STOCKS ON NYSE ARCA AS OF 08:30:00 ET

BASED ON DOLLARS TRADED: | BASED ON SHARES TRADED:
Stock $ Volume Price PctChg | Stock Share Vol Price PctChg
SPY $351497772 $109.21 1.9% | C 12,259,737 $4.03 4.2%
QQQQ $80,017,337 $45.21 2.2% | SPY 3,220,981 $109.21 1.9%
C $49,163,135 $4.03 4.2% | QQQQ 1,773,870 $45.21 2.2%
GLD $31,605,883 $118.18 ( 0.2%) | MSFT 633,790 $25.70 2.7%
IWM $24,209,953 $65.75 2.2% | SDS 573,593 $34.59 ( 3.9%)
BP $20,599,326 $44.47 4.9% | BP 464,042 $44.47 4.9%
SDS $19,887,802 $34.59 ( 3.9%) | BAC 458,077 $15.88 2.8%
AAPL $17,077,775 $249.67 2.3% | IWM 368,268 $65.75 2.2%
MSFT $16,274,397 $25.70 2.7% | F 343,224 $11.78 3.3%
SSO $10,993,639 $36.19 3.9% | SSO 304,473 $36.19 3.9%


Price changes may be affected by symbol splits and dividends.

Consolidated close price is the last print (excluding prints with trade
conditions) prior to 4PM ET.

This information is also updated on our web page every morning at 8:35ET:
http://www.tradearca.com/data/volume/daily_update.asp

This material is for informational purposes only.
NYSE Euronext and its affiliates ("NYSE Arca") are not soliciting any action based upon it.
This material is not to be construed as an offer to buy or sell any security in any jurisdiction where such an offer or solicitation would be illegal.
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NYSE Arca undertakes no obligation to update any of the information contained in this material in light of new information or future events.
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Indications: U.S. stock futures rally as China denies bond sale

Stock Assault 2.0 - Artificial Intelligence Stock Market Software Alert Email Print

By Barbara Kollmeyer, MarketWatch

MADRID (MarketWatch) -- U.S. stock market futures were sharply higher on Thursday, lifted by China's denial that it was mulling sales of holdings in European bonds.

Futures for the Dow Jones Industrial Average jumped 200 points, or 2%, to 10,122, while those for the Nasdaq 100 rose 44.50 points, or 2.5% to 1,836. Futures for the S&P 500 rose 26.50 points, or 2.5%, to 1,087.70.

On Thursday, the China State Administration of Foreign Exchange, the agency which manages the nation's reserves, said media reports that it is considering selling some of it holdings of euro-zone government bonds were "groundless," according to a statement published on its Web site.

Global Dow

• MarketWatch Topics: Greece • Asia Markets | Europe Markets | Lat. Am. • Canadian Markets | Israel Stocks | London • U.S.: Market Snapshot | After Hours

Tools • Latin American/Canadian indexes • European indexes | Asian indexes

More on the Markets • Bond Report | Oil News | Earnings Watch • Currencies | U.S. Economic Calendar

/conga/story/misc/international.html 79118

U.S. stocks on Wednesday gave up a bounce in the afternoon session, after a late-session lapse that coincided with a report in the Financial Times that China was mulling sales of euro-zone bond holdings. The Dow Jones Industrial Average closed off 69.3 points, or 0.7%, to 9,974.45, the first time the benchmark index closed below 10,000 since early February. The S&P 500 and Nasdaq Composite made similarly sized declined.

"It might be that the market reaction to the story underlines how fragile confidence is at the current time and is a worrying sign that the market is very vulnerable to any negative shock," said Gary Jenkins, head of fixed income research at Evolution Securities. "It may just have been a complete over reaction by a nervous market that is in 'sell first and ask questions later mood' that will be corrected today."

Apart from driving up stock futures, the denial by China triggered a rebound in the euro and gains in European stocks, which were already firmer, helped by financials and strong results from U.K. fund group Man. Asia stocks finished higher as bargain hunters moved in after losses, but euro-related fears lingered.

Economic data is also on tap for U.S. markets, with weekly jobless claims and a revision to first-quarter GDP due at 8:30 a.m. Eastern. Jenkins said data is expected to be revised slightly higher to 3.4% annualized growth, from the previous 3.2% estimate.

Shares of Wal-Mart /quotes/comstock/13*!wmt/quotes/nls/wmt (WMT 50.02, -0.26, -0.52%) could be in focus on news its Asda unit reached a deal to buy the U.K. operations of deep discounter Netto in a deal valued at $1.1 billion. Asda is buying the 193 U.K. stores of Dansk Supermarked A/S for 778 million pounds of cash and assumed debt, according to the Danish seller. See related story

Warehouse retailer Costco Wholesale /quotes/comstock/15*!cost/quotes/nls/cost (COST 55.98, -0.52, -0.92%) reported a 46% rise in fiscal third-quarter net income to $306 million, or 68 cents a share, from $210 million, or 48 cents, in the year-earlier quarter. Net sales rose to $17.39 billion from $15.48 billion. A survey of analysts by FactSet Research produced consensus estimates of 66 cents of profit on $17.54 billion of sales.

Several other retailers are also due to report before the bell with quarterly results include Big Lots /quotes/comstock/13*!big/quotes/nls/big (BIG 35.87, -0.23, -0.64%) and Tiffany /quotes/comstock/13*!tif/quotes/nls/tif (TIF 43.59, +0.99, +2.32%) . H.J. Heinz /quotes/comstock/13*!hnz/quotes/nls/hnz (HNZ 44.26, -0.35, -0.78%) is also due to report.

Crude-oil futures was up 2.3%, or $1.66 to $73.25 a barrel, while gold futures fell $2.50 to $1.210.90 an ounce.

Barbara Kollmeyer is an editor for MarketWatch in Madrid.


Wednesday, May 26, 2010

Liquidity Forecast for the World Economies

Stock Assault 2.0 - Artificial Intelligence Stock Market Software

This past week the Dow fell 4%, S&P 4.2%, the Russell 2000 fell 6.4% and the Nasdaq 100 fell 4.4%. Banks fell 5.4%; broker/dealers 4%; cyclicals fell 5.6%; transports 5.5%; consumers 3.4%; utilities 4.3%; high tech fell 3.7%; semis 1.3%; Internets fell 4.2% and biotechs 4.2%. Gold bullion fell $56.00, the HUI gold index fell 11.4% and the USDX, dollar index, fell 0.8% to 85.38.

Two-year Treasury bills fell 2 bps to 0.73%; the 10-year notes fell 22 bps to 3.24% and the 10-year German bund fell 20 bps to a record low of 2.66%.

Freddie Mac fixed-rate 30-year mortgages fell 7 bps to 4.93%. The 15’s fell 6 bps to 4.30%, one-year ARMs fell 5 bps to 4.02% and 30-year jumbos fell 4 bps to 5.59%.

Federal Reserve credit surged $28.9 billion to a record $2.339 trillion. It has been up ytd 14% and 8% yoy. Fed foreign holdings of Treasury, Agency debt fell $7.1 billion to $3.057 tril lion. Custody holdings rose $101 billion ytd or 8.9%, a yoy rise of 12.8%.

M2, narrow, money supply rose $25.3 billion to $8,530 trillion. M2, has declined $17.2 billion ytd.

Total money market fund assets fell $33.6 billion to $2.844 trillion. In the first 20 weeks of the year they have fallen $449 billion as investors plowed back into the market. That decline was 24.6%.

Total commercial paper fell $27 billion to $1.076 trillion. CP has declined $94 billion, or 20.9% ytd and $208 billion yoy, or 16.2%.

Europe is rescuing its economy in the same way that the Federal Reserve has attempted to same America’s financial system and economy. They have used an unprecedented aid and stimulus package to offset massive fiscal deficits. In the US a deflationary depression was avoided at least temporarily and that is what is now being attempted in Europe with the guidance of the Federal Reserve.

This kind of program was implemented during the 1930s when we are told that unemployment was 25%. During the late 1930s the program failed to pull America out of depression. Unemployment in 1939 was 17.4% and in 1940 it was 16.2%, hardly the results hoped for and anticipated. The result was WWII. We are headed in the same direction today, as the Middle East and Asia smolder ready at any time to burst into flames.

In the US liquidity was unleashed on a massive scale and that is what will happen in Europe. It is the only way they can keep the system functioning.

We Are now closing in on the next planned world war as a result. When and where we can only guess, but it surely is on the way, the same way it was in the late 1930s. War is a distraction and it succeeds in culling the population. It is also a cover-up for massive financial and economic problems that have resulted from the financial elite looting the system.

The system is not being fixed and deliberately so. The elitists do not want it fixed. They want a collapse. This is the only way they can force people to accept world government.

The groundwork was laid after WWII, as it was right after WWI. The 1960s brought inflation and on August 15,1971 the gold standard was abandoned. That is all that was needed to get the game underway. That inflation lasted some 50 years and is in the process of coming to an end. Many say they do know where it will end, but if they studied history they’d know exactly where it would end. It will end with the deliberate collapse of the financial and economic system and war, the way it always has. This time the conductor is the Federal Reserve, which is currently on the way to being a financial and monetary monopoly with the assistance of our well paid off representatives and senators. The massive reflation you have witnessed over the past almost three years is a steppings tone toward a final solution and world government. As a result we see collapses in some areas and booms in other areas. In the end all markets will fall, some more than others. Debt overwhelms the system worldwide, which is a form of perpetual entrapment.

No currency will be able to withstand the onslaught. In the final analysis only gold and silver will be left standing. Currently, as soon as the most recent credit expansion runs its course, and that should be by yearend, another reflationary wave will be upon us, that is unless those who are controlling this debacle, decide that this is when we slip into an irretrievable deflationary depression.

What is really interesting to us is that we read thousands of reports a week and almost everyone of them follows the same lines, believing the line dished out by governments, Wall Street and banking and other financial entities and the mass media. The control of the media is bad enough, yet t hese never mind independent journalists refusing to go to the core of the real problem and expose who is causing all these problems. What it does is cause fine researchers to be consistently wrong because they do not understand the real underlying historical problem. Unfortunately, most of them will pass away, never understanding what the problem was all about.

We understand the reflation that took place between 2001 and now. The big question is will it continue? Appearance say yes, but Europe even with an initial $1 trillion aid program will probably see low inflation, perhaps the UK being the exception. The US could stay the same, but we do not think so. Without stimulus by either Congress or the Fed the US would collapse economically. You can expect something but we do not know what as yet. Everyone looks for a middle ground, but we seldom see that. We see a world, and particularly in Europe and the US, where people are unhappy with the system, where w ealth is in decline and signs of recovery are not to be found, as more and more jobs are shipped to the second and third worlds. Leadership is dreadful, composed of Illuminists and those controlled by them. We live in a politically unstable world that gets nastier each and every day. No one wants austerity or realistic solutions. Throwing money at these problems accomplishes nothing. We see no signs of commentary in regard to the end of free trade, globalization, offshoring and outsourcing, which continues to drain jobs from the US and UK. Fiscal restraint simply doesn’t exist. Most of the jobs created are by the federal government. Taxes are continuing to rise. Officially we are told deficits will be $10 trillion over the next ten years. America is being set up for a financial collapse. Today’s debts are unplayable, never mind those of the next ten years. America and Europe will hit the wall â€" there is no avoiding it. They are in denial as severe problems approach. Th ere are no easy solutions left. America and Europe have never seen anything like this before, even in the 1930s. This leaves those with wealth left in a quandary. Yields on bonds are terrible and the rest of conventional investments are risky at best. The dollar may have rallied from 74 to 86 on the USDX, but it and all other currencies have fallen versus gold, a trend in place for 11 years, that shows no signs of ending. The stock market is losing its footing and real estate is still descending. At the same time our purchased congress is about to give the privately owned Federal Reserve a financial monopoly, when it should be terminated. If that happens the looting by elitists will continue apace. We certainly are not optimistic regarding the future and that is why we continue to recommend gold and silver related assets.

Americans do not understand the significance of what is happening in Europe. Greece may have accepted the EU aid plan, but the people h aven’t and an election is looming, which probably means a different government. In Spain a lender fails and other banks are merged with the help of the Bank of Spain. Spain misses its budget projection and the same happens in Greece. Global markets are in part responsible for what is happening in US markets. As long as the euro falls and these problems persist there can be no real recovery in the US or Europe. Being interconnected is having disastrous consequences. A US recovery unfortunately is in the hands of European politicians, who all take their marching orders from the illuminati. What is happening in Greece and will happen in 17 other countries will also happen in the UK and the US. The US market is falling already off 1,400 Dow points just as we said it would be and we see it much lower. Due to the closeness of policy what is happening in Europe will affect the entire world. The dominoes are in fact falling. European and British foreign debts are now being studied with the same focus as subprime bonds and the results are going to be the same, a massive credit crisis. The PIIG nations represent about 4% of world GDP, but they could take the entire system down. Germany has put a key piece into the support program and the Fed has contributed a massive swap arrangement giving Europe unlimited access to unlimited dollars. The euro will allow a sideways movement in GDP growth, but will also bring higher inflation as unemployment grows. This, of course, is why we need a war. No matter what, Asian goods are going to become more expensive worldwide. Defaults are a sign of a coming calamity just as they were in the 1930s. In addition, Germans are very unhappy bailing out Southern Europe and they do not like being forced into participating in austerity that to them is unnecessary, at least for Germany.

This is another holding action to gain time until the elitists can get another war going. This is another bank bailout by t axpayers and the German people don’t want to participate.

There is still no question in our minds that Greece was a setup to lead to a deflationary collapse later and the Greek people refused to listen. As a result it is now apparent that Greece is even worse off than the elitists imagined. We do not see European bailouts going any further. The result is the US and UK will follow. Financial Europe is history. You should all keep in mind that this is child’s play. Wait until England and the US go down, perhaps before the end of the year.

As this transpires the NY Fed President, William Dudley, tells us households are still de-leveraging.

He tells us the banking system is under significant stress. There is small and medium-sized banks that have significant exposure to commercial real estate loans.

He sees significant headwinds ahead. We call that an under statement.

As banks sought bids for $10 billion in toxic waste the Fed is attempting to sell the same kind of garbage. Anything they do not dump they will have monetized and that is inflationary.

Total US debt just hit $12,987,823,000,000, $13 billion from lucky $13 trillion. As next week the US Treasury is auctioning off another gross $140+ billion in Bonds, we will pass this totally irrelevant resistance level on May 25, when Timmy issues another $42 billion of 2 Year Notes

http://www.treasurydirect.gov/instit/annceresult/press/preanre/2010/A_20100520_1.pdf The next important support level of $14 trillion will be surpassed around the time the Democrats get destroyed in the mid-term elections, while the statutory debt limit of $14.3 trillion will likely have to be raised in January 2011 by a new republican majority, an action which will promptly reduce popular republican support following their landslide election victory, thus starting the pointless D ->R->D->R etc cycle all over again. Also, at approximately that time headlines that US debt is now 100% of GDP will bring the US bond vigilantes out of hibernation and will send US interest rates soaring, assisted by Ben Bernanke's most recent announcement that the Fed will is once again "forced" to purchase another $1.5 trillion in treasuries and mortgages.  

Stepping away from the Ouija board, we also notice that so far in April, the Treasury has rolled another unsustainable amount of Treasuries: $397 billion, of which $$359 billion is in Bills.

Lyndon LaRouche issued the following statement today in response to the vote in the U.S. Senate to end debate on the so-called Financial Reform Bill:

"The issue is if somebody tries to push this bill through without Glass-Steagall and the Cantwell-Lincoln amendment to close the Dodd loophole on derivatives, then the U.S. citizenry won't accept any decision from this Congres s as legitimate. The citizenry will not recognize the Congress or its authority. They will view it as a corrupt institution which must be purged. We are in a mass strike mode. If congress rigs the process to ram through the President's demands, the citizenry will revolt against Congress and the President. And they will do so based on the authority of the Constitution of the United States of America. The people of the U.S. won't stand for this. The authority of the Constitution is in my hands and I am exerting it. I am confident the people of the United States will support me in this. Those who disagree don't understand the people of the United States and their temperament."

Senator Scott Brown yesterday drew scorn from former admirers who had hailed the Massachusetts Republican as a new voice for the conservative cause but now say he has abandoned them by joining Democrats to advance President Obama’s plan to overhaul the financial system.

As quickly as they had latched onto his campaign four months ago, they repudiated him yesterday through a flurry of blog posts, editorials, and Facebook messages.

“His career as a senator of the people lasted slightly longer than the shelf life of milk,’’ said Shelby Blakely, executive director of New Patriot Journal, the media arm of the Tea Party Patriots, which includes various Tea Party groups around the country. “The general mood of the Tea Party is, ‘We put you in, and we’ll take you out in 2012.’ This is not something we will forget.’’

But Brown also won praise from Democrats and some political observers for taking what they view as a shrewd step toward securing reelection in a state that typically has preferred its statewide Republican officeholders to be moderate. They said it also showcased his effort to make good on his vow to be independent and not always hew to the party line.

Federal prosecutors won’t bring charges against former American International Group Inc. executive Joseph Cassano related to the insurer’s collapse, according to a person familiar with the investigation.

The Justice Department found after a two-year investigation that there was insufficient evidence to charge Cassano, who was the former chief executive officer of AIG’s Financial Products division, the person said.

The Justice Department and civil investigators from the Securities and Exchange Commission were examining comments made in 2007 by Cassano and other AIG executives. They were probing whether executives misrepresented the value of AIG’s portfolio of “super senior” credit-default swaps, which insured bond losses tied to the U.S. housing market. [So what else is new.]

Nervous lawmakers anticipating an unstoppable flood of corporate and union money into the fall political campaigns have fo und one way to fight back: by loosening the rules for the major political parties, allowing them to exert more influence of their own.

Little-noticed language in campaign finance bills would help parties and their candidates get around restrictions on working together on political campaigns â€" essentially allowing parties to tap into their deep well of funds to more directly help their favored candidates.

Another provision would require broadcasters to offer political parties the same low advertising rates they give to candidates.

The measures are part of a package of changes introduced in Congress after the Supreme Court’s rejection in January of longstanding restraints on direct corporate and union spending.

The US Chamber of Commerce has said it is preparing to spend $50 million on midterm elections, an early sign of a corporate media blitz to come.

Powerful unions are also planning massive spending on the fall campaigns. Officials from the American Federation of State, County and Municipal Employees have told The Hill newspaper that the union plans to top $50 million in spending, while the Service Employees International Union reportedly plans to spend $44 million.


Six investment banks including UBS AG, Citigroup Inc. and Deutsche Bank AG agreed to report European dark trades executed on their internal systems as the industry comes under closer regulatory scrutiny.

Starting today, the banks, which also include Morgan Stanley, JPMorgan Cazenove Ltd. and Credit Suisse AG, will report European equity trades matched in their internal crossing engines to Markit Ltd. At the end of the trading day, Markit will collate, check and validate the data and publish the aggregated trading volume the next afternoon, said the Association for Financial Markets in Europe, which represe nts the banks.

Dark pools, which allow investors to buy and sell securities away from regulated exchanges so they don’t have to disclose positions, are at the center of a regulatory storm as U.S., European and U.K. securities watchdogs scrutinize market structure, responding to the worst financial crisis since the Great Depression.

Regulators disagree on how much trading banks carry out in dark pools. The U.K.’s Financial Services Authority says dark pools account for 1.25 percent of trades, whereas the Federation of European Securities Exchanges, which represents exchanges, estimates the figure is closer to 40 percent. The lack of reliable information on volumes and pricing of securities in dark pools has posed a problem for regulators trying to keep pace with market innovation.

of OTC trading,” said John Serocold, managing director of AFME. The move provides “verified data where previously there has bee n only speculation and by giving a clear indication of the actual levels of trading in crossing engines.”

A measure of the U.S. money supply, created but abandoned by the Federal Reserve, has turned negative in the past year and signals disinflation or outright deflation, according to economists who track the figure.

The CHART OF THE DAY shows M3 has shrunk 5.4 percent in the past year, an indication the economy may face deflationary pressure as fewer dollars chase the same amount of goods, according to economists Paul Ashworth and Paul Dales at Capital Economics Ltd. in Toronto. They began compiling a measure of M3 after the Fed discontinued it in 2006.

“Sharp falls in the money supply tend to go hand in hand with very, very low rates of inflation if not deflation,” Dales said. The decline in M3 “suggests there is perhaps greater downward pressures on inflation than M2 suggests.”

T he core inflation rate rose last month by 0.9 percent from April 2009, the smallest increase since January 1966, after a 1.1 percent year-over-year advance the prior month.

The Fed reports two measures of the money supply each week. M1 includes currency held by consumers and companies for spending, money in checking accounts and travelers checks. M2 adds savings and private holdings in money-market mutual funds. M3 encompassed M2 along with large time deposits, repurchase agreements, Eurodollar accounts and institutional money-market mutual funds.

M1 and M2 have risen as the Fed boosted bank reserves by creating new money to purchase up to $1.43 trillion in housing debt.

M3 has fallen along with bank lending, as banks chose not to use the increase in reserves as leverage for new loans. Many types of account balances have declined, including those tracked by M3. One such component, institutional money fund balance s, fell to $1.94 trillion in April from $2.52 trillion a year ago.

The Fed stopped measuring M3 in 2006, saying it “does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary-policy process for years.” The Fed said the costs of collecting the measure outweighed the benefits.

Defaults on apartment-building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter, almost twice the year-earlier level, as more borrowers failed to repay debt approved near the market peak, said Real Capital Analytics Inc. in a report.

Defaults on so-called multifamily mortgages rose from 4.4 percent in the fourth quarter and from 2.4 percent during the same period in 2009, the New York-based real estate research firm said today. Commercial-mortgage defaults also rose in the first quarter for loans against office, retail, hotel and industrial properties, Real Capital said.

“Apartment defaults are leading other commercial real estate,” Sam Chandan, global chief economist at Real Capital, said in an interview. “Banks tended to make more aggressively underwritten apartment loans earlier during this last cycle. Credit and pricing reached their peaks for office properties and other commercial assets later.”

The global recession cut demand for U.S. apartments, office space, retail shops, hotels and warehouses during the past two years as jobs disappeared and consumers cut spending. Defaults on apartment-building mortgages surpassed the previous record, set in 1993, for the past three consecutive quarters.

The U.S. savings-and-loan crisis drove apartment-building defaults to 3.4 percent in 1993. Defaults on other types of commercial property debt peaked at 4.6 percent in 1992, according to Real Capital.

The proportion of defaults on office, retail, hotel and industrial properties rose to 4.2 percent in the first quarter of this year, the company said.

U.S. apartments may lead a rebound in commercial real estate as vacancies peak in 2010 and the economy adds jobs, property research firm Reis Inc. said May 19. Reis estimates apartment vacancies will peak at 8.2 percent in 2010, the highest level since the firm began tracking the number in 1980. The number should start to decline in 2011, Reis said.




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Indications: U.S. futures point to bounce after durables data

Stock Assault 2.0 - Artificial Intelligence Stock Market Software Alert Email Print

By Steve Goldstein, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures maintained their gains Wednesday after data on durable-goods orders showed a better-than-expected rise in April and as Wall Street debates whether the economic rebound is set to extend or abruptly end.

S&P 500 futures rose 9.6 points to 1,082.60 and Nasdaq 100 futures rose 15.5 points to 1,831.00. Futures on the Dow Jones Industrial Average climbed 72 points.

Dow mostly recovers from big drop

The stock market pares its losses but stays on track for a decline fueled by European worries. Plus, WSJ's Brett Arends says investors should ignore the panic and look for solid value; Pyongyang says it will "totally freeze" its relations with South Korea; and how to avoid rip-offs when buying tickets to concerts.

The Commerce Department said durable-goods orders climbed 2.9% in April, with airplane demand supporting the rise.

U.S. stocks ended with mild losses Tuesday, as worries over Korea tensions and Spanish bank health that had sent the Dow Jones Industrial Average down as much as 293 points were seemingly quelled by the end of the day, with the Dow finishing just 22 points in the red and the S&P 500 posting modest gains.

Data showing improving U.S. consumer confidence helped stem the overseas worries, and on the technical side, the S&P 500 only briefly traded below February lows.

The wild moves over the last two sessions -- a strong start and a weak finish Monday, and a weak start and a strong finish Tuesday -- underscore the lack of conviction in markets, strategists said.

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"We often see a decent rebound after a strong selloff, as risk reduction flows fade and sidelined buyers come in, but it is not clear whether we are there yet," said strategists from Danske Bank. "Event risk is also still high in these fragile markets."

That bounce was seen in overseas markets as well on Wednesday, with the Kospi climbing 1.4% in Seoul and the FTSE 100 up 2.1% in early afternoon London trade.

New-home-sales figures are expected after the U.S. market opens.

The Organization for Economic Cooperation and Development hiked its global and U.S. GDP estimates for 2010 and 2011, and the U.S. Treasury will be auctioning $40 billion of 5-year notes.

Speaking from Tokyo, Federal Reserve Chairman Ben Bernanke argued against proposed legislation that would subject the central bank to more scrutiny.

U.S. Treasury Secretary Timothy Geithner continues his overseas tour with a meeting with Britain's new chancellor, George Osborne.

Of companies in the spotlight, luxury builder Toll Brothers /quotes/comstock/13*!tol/quotes/nls/tol (TOL 21.43, +0.82, +3.98%) narrowed its quarterly loss.

BP /quotes/comstock/13*!bp/quotes/nls/bp (BP 42.61, +0.05, +0.12%) is due to attempt its "top-kill" operation to stem the flow of oil in the Gulf of Mexico. BP said the operation may take two days.

Apple Inc.'s /quotes/comstock/15*!aapl/quotes/nls/aapl (AAPL 249.62, +4.40, +1.79%) music-business practices are the subject of an informal inquiry by the U.S. Justice Department, The New York Times reported Wednesday. Specifically, the agency is looking at whether the Cupertino, Calif., technology giant, which runs the hugely popular iTunes music library, pressured music publishers not to give Amazon one day of exclusive access to music that's about to be released so the Seattle online retailer /quotes/comstock/15*!amzn/quotes/nls/amzn (AMZN 124.18, -0.68, -0.54%) could create marketing promotions around that music, the Times reported.

Oil futures recaptured the $70-a-barrel mark, and metals futures gained as well.

The euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.2223, -0.0149, -1.2043%) slipped 0.8% to $1.2258.

Steve Goldstein is MarketWatch's London bureau chief.


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