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Debt to the Penny and Who Holds It
8/04/08: $9,565,042,361,845.53
http://www.treasurydirect.gov/NP/BPDLogin?application=np
Treasury’s authority is the new $10.6 trillion debt ceiling. There is roughly a $1.1 trillion cushion between the new limit and existing federal debt of $9.5 trillion.
http://www.nytimes.com/2008/07/27/washington/27housing.html?_r=1&hp&oref=slogin
Fed.(1)2) 1day RP + 5.00B [net Drain -3.00B]
Fed.(2) 28day RP 20.00B
Note: This repo operation has 1 collateral tranche
The Slosh Report:
http://www.gmtfo.com/RepoReader/OMOps.aspx
Fed. 1day RP + 8.00B [ Net Taketh -4.25 ]
The Slosh Report:
http://www.gmtfo.com/RepoReader/OMOps.aspx
Futures (2) + World Indices
http://www.cme.com/trading/dta/del/globex.html
http://money.cnn.com/data/premarket/
World Indices (2) Mini Charts
Updates every 60sec ~ Watch the dates!!
http://www.wwfn.com/commentary/oscharts.html
http://www.allstocks.com/markets/World_Charts/Asian_Stock_Markets/asian_stock_markets.html
Guru Stock Market Forecasting Grades
Can experts, whether self-proclaimed or endorsed by others (publications), provide reliable stock market timing guidance? Do some experts clearly show better intuition about overall market direction than others?
http://www.cxoadvisory.com/gurus/
Fed. Ops: 47.25B Matures this week.
Mon: 3.50B 3day
>>>> 8.75B 4day
Wed: 20.00B 28day
Thu: 5.00B 14day
>>> 14.00B 7day
========================================================
Temp Ops:
=======================================================
Public Debt:
Limit ~ $10,600 T
7/31 ~~ $9,585 T
New $10.6 trillion debt ceiling.
#msg-30998680
=========================================================
The Slosh Report:
http://www.gmtfo.com/RepoReader/OMOps.aspx
George, usual time frame 9:30am
and closed @ 9:40am with any others 10min intervals.
Exception is Thursday, action starts 8:30am but then goes to 9:30am.......All ECT
Fed. 3day RP + 3.50B [net Drain -6.75B ]
http://www.gmtfo.com/RepoReader/OMOps.aspx
Fed.(2)3) 7day RP + 10.00B [net Drain -4.25B ]
Fed.(3) 4day RP + 8.75B
http://www.gmtfo.com/RepoReader/OMOps.aspx
Fed. 14day RP + 5.00B [ soFar
http://www.gmtfo.com/RepoReader/OMOps.aspx
Fed. 2day RP + 10.25B [all Add]
http://www.gmtfo.com/RepoReader/OMOps.aspx
The Federal Reserve on Wednesday said it was extending a credit facility that it provides for primary dealers in one of several steps to boost liquidity in stressed financial markets.
The U.S. central bank said its Primary Dealer Credit Facility (PDCF) and its Term Securities Lending Facility (TSLF) will be extended through January 30.
It also said that it will introduce 84-day Term Auction Facility (TAF) loans, which it said will complement its existing 28-day TAF loans. The Fed introduced the loans program to try to ease a credit crunch that policy-makers feel has shown only limited signs of easing.
Futures (2) + World Indices
http://www.cme.com/trading/dta/del/globex.html
This one predicts Opening, via FairValues.
http://money.cnn.com/data/premarket/
World Indices (2) Mini Charts
Updates every 60sec ~ Watch the dates!!
http://www.wwfn.com/commentary/oscharts.html
http://www.allstocks.com/markets/World_Charts/Asian_Stock_Markets/asian_stock_markets.html
Gold~ Silver~ HUI~ XAU~ US$~ €uro~ Crude~Pd
Live Charts ~ Bookmark this page –
Refresh anytime during the day.
PoG
PoS
Pd
HUI
XAU
3day $US:
€uro
Crude
Agree Fed does whatever it needs
note 1day foward 20b, saved the mrkt after yesterdays brutal action...l was in DIA puts [felt safe] had to quick reverse.
now lets see how much paint they use for EOM...
Capstone Turbine Receives Order from HelioFocus for the Development of a Solar Powered Microturbine
Tuesday July 29, 4:24 pm ET
CHASTSWORTH, Calif.--(BUSINESS WIRE)--Capstone Turbine Corporation (NASDAQ:CPST - News) (www.microturbine.com), the world’s leading clean technology manufacturer of microturbine energy systems, announced today that it has received an order from HelioFocus for the development and modification of Capstone Turbine’s C65 MicroTurbine® to operate on solar energy.
http://biz.yahoo.com/bw/080729/20080729006426.html?.v=1
That's why we keep track of fed /e
Fed.(1)2) 2day RP + 9.00B [net Add +18.25B ]
Fed.(2) 28day 1 Day Forward + 20.00B
http://www.gmtfo.com/RepoReader/OMOps.aspx
Fed. 1day RP + 11.75B [Net Add +4.25B ]
http://www.gmtfo.com/RepoReader/OMOps.aspx
Congress Sends Housing Relief Bill to Bush
By DAVID M. HERSZENHORN
Published: July 27, 2008
WASHINGTON — Hoping to stretch a safety net under the nation’s tumbling housing market, the Senate on Saturday overwhelmingly approved a huge package of legislation that includes a program to save hundreds of thousands of families from losing their homes to foreclosure.
The legislation is the latest in a series of extraordinary interventions this year by the Bush administration, Congress and the Federal Reserve as they seek to limit shockwaves in the housing sector from rippling across the American economy and the world financial system. In the process, the central bank and taxpayers have taken on what critics warn are incalculable liabilities and risk.
The bill grants the Treasury Department broad authority to safeguard the nation’s two mortgage finance giants, Fannie Mae and Freddie Mac, potentially by spending tens of billions of dollars in federal money to prevent the collapse of the companies, which own or guarantee nearly half of the nation’s $12 trillion in mortgages.
To accommodate the rescue plan for the mortgage companies, the bill raises the national debt ceiling to $10.6 trillion, an increase of $800 billion and the first time that the limit on the government’s credit card has grown to 14 digits.
The Senate, convening for a rare Saturday session as it neared summer recess, approved the bill by a vote of 72 to 13, with 27 Republicans joining all the Democrats in attendance to support it. The measure now goes to President Bush, who has said he will sign it, perhaps early next week, to send a reassuring message to the credit markets.
The White House quickly issued a statement praising the vote, but also affirming opposition to nearly $4 billion in grants to local governments to buy and refurbish foreclosed properties, which Mr. Bush views as a giveaway to lenders. “It’s good that the Democratic Congress has finally acted,” Tony Fratto, the deputy White House press secretary said.
Lawmakers in both parties hailed the bill, saying it was crucially needed. “It will make a difference not only in the housing market but in the entire economy,” the majority leader, Senator Harry Reid of Nevada, said.
Senator Christopher J. Dodd, Democrat of Connecticut and the chairman of the banking committee, said prior to the vote, “We are in the midst of the most serious economic crisis to face our nation in many years. This bill is going to make a difference almost immediately.”
The federal intervention has certainly been bold. The nearly $29 billion loan by the Federal Reserve Bank of New York in March to orchestrate the sale of Bear Stearns to JPMorgan Chase & Company may seem small compared with the Federal Housing Administration’s authority, granted in the new legislation, to insure up to $300 billion in refinanced mortgages to help stem a tide of foreclosures.
Analysts, including the Congressional Budget Office, expect less than $100 billion of that authority to be used. The risk to taxpayers is minimal, analysts say, given higher insurance fees that will be charged to recipients of the refinanced loans.
And yet, even that $100 billion could seem small compared with the Treasury Department’s authority to spend unspecified amounts of tax dollars to rescue Fannie Mae and Freddie Mac if they are in peril of collapse.
The Treasury secretary, Henry M. Paulson Jr., an architect of the rescue plan, said he expected never to use the new authority. And the Congressional Budget Office predicted that any bailout between now and Dec. 31, 2009, when the authority sunsets, would most likely cost $25 billion or less, and that there was a better-than-even chance of no cost at all.
But the only real limit on the Treasury’s authority is the new $10.6 trillion debt ceiling. There is roughly a $1.1 trillion cushion between the new limit and existing federal debt of $9.5 trillion.
And naysayers in Congress who voted against the housing bill warned that the government was taking on too much risk, and that government aid would only reward irresponsibility by corporations and individuals.
“This bill has moral hazard written all over it,” Representative Jeff Flake, Republican of Arizona, said during the debate in the House on Wednesday. “We are pretending to chain a monster here and we are, instead, letting that monster loose.”
Senator Charles E. Grassley, Republican of Iowa, voted against the bill even though he had worked on many of its tax provisions. “This bill has fallen prey to the special interests on Wall Street and K Street at an unjustifiable expense to taxpayers and homeowners on Main Street,” he said in a statement.
Senator Jim DeMint, Republican of South Carolina, said the bill should have barred the mortgage companies from spending millions to lobby members of Congress.
Indeed, a provision in the bill underscores the continuing pessimism about the state of the economy. The provision gives the Federal Deposit Insurance Corporation the authority to create so-called bridge institutions for failing savings associations, mirroring a capability that has existed since 1991 for failed banks.
The new power will give the F.D.I.C. more latitude to continue the operations of savings associations like IndyMac in California, which failed earlier this month, and buy regulators time to work out a resolution at the lowest possible cost.
Politics aside, the measure approved by Congress was the most aggressive government intervention in the housing market since the 1989 response to the savings and loan crisis and perhaps the boldest attempt to aid troubled borrowers since the creation of the Home Owners’ Loan Corporation in 1933 as part of the New Deal.
In addition to the program to prevent foreclosures and the rescue plan for Fannie Mae and Freddie Mac, the 694-page bill contains a sweeping new regulatory structure for the mortgage giants, including the creation of an independent regulator, a stand-alone federal agency with a director appointed by the president and confirmed by the Senate.
The bill includes $15 billion in housing-related tax incentives, including a $7,500 tax credit for first-time homebuyers and business tax breaks for home builders and other large corporations.
There is also an array of items buried deep in the legislation, and the implications of some of them is not yet clear. There are provisions, for example, that grant or extend Section 8 federal housing subsidy eligibility to residents of specific properties in Malden, Mass., and San Francisco. And there is a provision tailored narrowly for Chrysler to ensure that it can benefit from a corporate tax incentive even though the company is now structured as a partnership not a corporation. The bill does not name Chrysler but rather describes an unnamed automobile manufacturer “that will produce in excess of 675,000 automobiles” between Jan. 1 and June 30, 2008.
Stephen Labaton contributed reporting.
http://www.nytimes.com/2008/07/27/washington/27housing.html?_r=1&hp&oref=slogin
Treasury’s authority is the new $10.6 trillion debt ceiling. There is roughly a $1.1 trillion cushion between the new limit and existing federal debt of $9.5 trillion.
Congress Sends Housing Relief Bill to Bush
By DAVID M. HERSZENHORN
Published: July 27, 2008
WASHINGTON — Hoping to stretch a safety net under the nation’s tumbling housing market, the Senate on Saturday overwhelmingly approved a huge package of legislation that includes a program to save hundreds of thousands of families from losing their homes to foreclosure.
The legislation is the latest in a series of extraordinary interventions this year by the Bush administration, Congress and the Federal Reserve as they seek to limit shockwaves in the housing sector from rippling across the American economy and the world financial system. In the process, the central bank and taxpayers have taken on what critics warn are incalculable liabilities and risk.
The bill grants the Treasury Department broad authority to safeguard the nation’s two mortgage finance giants, Fannie Mae and Freddie Mac, potentially by spending tens of billions of dollars in federal money to prevent the collapse of the companies, which own or guarantee nearly half of the nation’s $12 trillion in mortgages.
To accommodate the rescue plan for the mortgage companies, the bill raises the national debt ceiling to $10.6 trillion, an increase of $800 billion and the first time that the limit on the government’s credit card has grown to 14 digits.
The Senate, convening for a rare Saturday session as it neared summer recess, approved the bill by a vote of 72 to 13, with 27 Republicans joining all the Democrats in attendance to support it. The measure now goes to President Bush, who has said he will sign it, perhaps early next week, to send a reassuring message to the credit markets.
The White House quickly issued a statement praising the vote, but also affirming opposition to nearly $4 billion in grants to local governments to buy and refurbish foreclosed properties, which Mr. Bush views as a giveaway to lenders. “It’s good that the Democratic Congress has finally acted,” Tony Fratto, the deputy White House press secretary said.
Lawmakers in both parties hailed the bill, saying it was crucially needed. “It will make a difference not only in the housing market but in the entire economy,” the majority leader, Senator Harry Reid of Nevada, said.
Senator Christopher J. Dodd, Democrat of Connecticut and the chairman of the banking committee, said prior to the vote, “We are in the midst of the most serious economic crisis to face our nation in many years. This bill is going to make a difference almost immediately.”
The federal intervention has certainly been bold. The nearly $29 billion loan by the Federal Reserve Bank of New York in March to orchestrate the sale of Bear Stearns to JPMorgan Chase & Company may seem small compared with the Federal Housing Administration’s authority, granted in the new legislation, to insure up to $300 billion in refinanced mortgages to help stem a tide of foreclosures.
Analysts, including the Congressional Budget Office, expect less than $100 billion of that authority to be used. The risk to taxpayers is minimal, analysts say, given higher insurance fees that will be charged to recipients of the refinanced loans.
And yet, even that $100 billion could seem small compared with the Treasury Department’s authority to spend unspecified amounts of tax dollars to rescue Fannie Mae and Freddie Mac if they are in peril of collapse.
The Treasury secretary, Henry M. Paulson Jr., an architect of the rescue plan, said he expected never to use the new authority. And the Congressional Budget Office predicted that any bailout between now and Dec. 31, 2009, when the authority sunsets, would most likely cost $25 billion or less, and that there was a better-than-even chance of no cost at all.
But the only real limit on the Treasury’s authority is the new $10.6 trillion debt ceiling. There is roughly a $1.1 trillion cushion between the new limit and existing federal debt of $9.5 trillion.
And naysayers in Congress who voted against the housing bill warned that the government was taking on too much risk, and that government aid would only reward irresponsibility by corporations and individuals.
“This bill has moral hazard written all over it,” Representative Jeff Flake, Republican of Arizona, said during the debate in the House on Wednesday. “We are pretending to chain a monster here and we are, instead, letting that monster loose.”
Senator Charles E. Grassley, Republican of Iowa, voted against the bill even though he had worked on many of its tax provisions. “This bill has fallen prey to the special interests on Wall Street and K Street at an unjustifiable expense to taxpayers and homeowners on Main Street,” he said in a statement.
Senator Jim DeMint, Republican of South Carolina, said the bill should have barred the mortgage companies from spending millions to lobby members of Congress.
Indeed, a provision in the bill underscores the continuing pessimism about the state of the economy. The provision gives the Federal Deposit Insurance Corporation the authority to create so-called bridge institutions for failing savings associations, mirroring a capability that has existed since 1991 for failed banks.
The new power will give the F.D.I.C. more latitude to continue the operations of savings associations like IndyMac in California, which failed earlier this month, and buy regulators time to work out a resolution at the lowest possible cost.
Politics aside, the measure approved by Congress was the most aggressive government intervention in the housing market since the 1989 response to the savings and loan crisis and perhaps the boldest attempt to aid troubled borrowers since the creation of the Home Owners’ Loan Corporation in 1933 as part of the New Deal.
In addition to the program to prevent foreclosures and the rescue plan for Fannie Mae and Freddie Mac, the 694-page bill contains a sweeping new regulatory structure for the mortgage giants, including the creation of an independent regulator, a stand-alone federal agency with a director appointed by the president and confirmed by the Senate.
The bill includes $15 billion in housing-related tax incentives, including a $7,500 tax credit for first-time homebuyers and business tax breaks for home builders and other large corporations.
There is also an array of items buried deep in the legislation, and the implications of some of them is not yet clear. There are provisions, for example, that grant or extend Section 8 federal housing subsidy eligibility to residents of specific properties in Malden, Mass., and San Francisco. And there is a provision tailored narrowly for Chrysler to ensure that it can benefit from a corporate tax incentive even though the company is now structured as a partnership not a corporation. The bill does not name Chrysler but rather describes an unnamed automobile manufacturer “that will produce in excess of 675,000 automobiles” between Jan. 1 and June 30, 2008.
Stephen Labaton contributed reporting.
http://www.nytimes.com/2008/07/27/washington/27housing.html?_r=1&hp&oref=slogin
Fed. Ops: 46.50B Matures this week.
Mon: 7.50B 3day
Wed: 20.00B 28day
Thu: 5.00B 14day
>> 14.00B 7day
========================================================
Temp Ops:
Perm Ops:
========================================================
Public Debt:
Limit ~ $9,815 T
7/24 ~ $9,540 T [A lot Deeper in Debt.]
Last time Congress boosts debt ceiling
#msg-23238336
=========================================================
The Slosh Report:
http://www.gmtfo.com/RepoReader/OMOps.aspx
Mauldin: The Geopolitics of Iran
by John Mauldin
For nearly 30 years, long before it was a charter member of the "Axis of Evil," Iran and the US have been locked in a hate-hate relationship. Walk down the street any Friday afternoon, and you're as likely to hear "Death to America!" as "Hi Ali, how are you?" Three decades of animosity, an externally opaque society, and no trade relations between the two countries mean that many of us have just the barest understanding of what's really going on over there. But whether it's a negotiated settlement with the US over Iraq, or a war-risk premium for crude oil, to threats and counterthreats with Israel and the US, Iran's decisions have enormous impact on the global economic system. All of the sudden, the picture of the "mad mullahs" you get from the papers seems expensively inadequate.
To understand Iran's impact on the world you need someone that wades through the complexities and distills out the salient facts. My friend George Friedman and his intelligence team at Stratfor are my go-to source for this kind of insight and understanding. For your financial analyses (I certainly hope!) you don't rely just on your daily newspaper's business section; if that's where you're getting your news on global events, well, hmmm....
Take a look at George's latest Geopolitical Monograph on Iran in the Special Edition of Outside the Box. This is part of a special series for Stratfor Members only - that George was kind enough to share this week. It's just stunning to me how the battles between Persia and Babylon are playing out yet again with Iranian involvement in Iraq. If you've ever wondered why the Iranians seem to have a bunker mentality, read this Monograph, and you'll see why. Want to understand why Iran works through proxies like Hezbollah? Here's your answer. Spend a few minutes on an invaluable investment in understanding Iran's global role.
The Geopolitical Monograph series is just one of the features of my Stratfor Membership that makes it so valuable to me. George's team also puts out daily analyses and a weekly Intelligence Guidance that highlight the critical geopolitical events that can move markets. You can get the same geopolitical intelligence I use via this special offer available to my readers. Click here for the full details, and start adding an intelligence perspective to your investing.
John Mauldin, Editor
Outside the Box
http://www.safehaven.com/article-10837.htm
The Geopolitics of Iran:
Holding the Center of a Mountain Fortress
By George Friedman
FDIC takes over 2 more banks, closing 28 branches
Saturday July 26, 6:42 am ET
By Brendan Riley, Associated Press Writer
FDIC takes over all 28 branches of 1st National Bank of Nevada and First Heritage Bank
http://biz.yahoo.com/ap/080726/bank_takeover.html
Fed. 3day RP + 7.50B [net Add +2.00B ]
The Slosh Report:
http://www.gmtfo.com/RepoReader/OMOps.aspx
http://www.ny.frb.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE
Fed.(2)3) 7day RP + 14.00B [ Net Add +5.75b ]
Fed.(3) 1day RP + 5.50B
The Slosh Report:
http://www.gmtfo.com/RepoReader/OMOps.aspx
http://www.ny.frb.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE
Fed. 14day RP + 5.00B [ Sofar
The Slosh Report:
http://www.gmtfo.com/RepoReader/OMOps.aspx
http://www.ny.frb.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE
100 employees at French nuclear site contaminated
Wednesday July 23, 5:58 pm ET
French electric company says 100 employees 'slightly contaminated' at nuclear reactor site
PARIS (AP) -- Radioactive particles spewed from a pipe at a French nuclear reactor on Wednesday, slightly contaminating 100 employees, a spokeswoman for the national electric company said.
It was the fourth incident at a French nuclear site in recent weeks and the second in five days.
Caroline Muller, a spokeswoman for Electricite de France, said 100 EDF employees were "slightly contaminated" by radioactive particles that escaped from the pipe at a reactor complex in Tricastin, in southern France.
The incident occurred in reactor No. 4 at the facility, which had been shut down for refueling, she said.
The employees went home but will be tested, she said, insisting that the contamination was slight -- a dose smaller than 1/40th of the regulation limit.
"What concerns us is less the level of the people contaminated than the number of people contaminated," Muller said by telephone.
Experts were studying what led to the incident, she said.
The incident came a day after authorities lifted a ban on fishing and water sports in two rivers that was imposed July 8 after liquid containing unenriched uranium leaked from a broken underground pipe at a site run by nuclear giant Areva at the huge Tricastin complex, near the city of Avignon.
Areva said Friday that liquid containing slightly enriched uranium leaked at another of its sites in southeast France. The same day, 15 EDF workers were exposed to what the company called non-harmful traces of radioactive elements at the Saint-Alban plant in the Alpine Isere region.
France is the most nuclear-dependent country in the world, with 59 reactors churning out nearly 80 percent of its electricity. After the first incident, the government ordered a check of groundwater around all nuclear sites in France.
The incidents have prompted questions about the state-run nuclear industry, at a time when eyes are turning to nuclear energy because of the soaring price of oil.
Beige book, full text
Prepared at the Federal Reserve Bank of Kansas City and based on information collected on or before July 14, 2008. This document summarizes comments received from businesses and other contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials.
--------------------------------------------------------------------------------
Reports from the twelve Federal Reserve Districts suggest that the pace of economic activity slowed somewhat since the last report. Five eastern Districts noted a weakening or softening in their overall economies, while Chicago characterized its economy as sluggish and Kansas City noted a moderation in growth. St. Louis said activity was stable and San Francisco reported little or no growth. Cleveland and Minneapolis reported slight increases in economic activity, while Dallas described growth as steady and moderate.
Consumer spending was reported as sluggish or slowing in nearly all Districts, although tax rebate checks boosted sales for some items. Tourist activity was mixed, with residents in several Districts choosing to vacation closer to home due to high gasoline prices. The demand for services was also mixed across Districts, with strength in the IT and health care industries offsetting some weakness in other service sectors. Manufacturing activity declined in many Districts, although demand for exports remained generally high. Residential real estate markets declined or were still weak across most of the country. Commercial real estate activity also slowed or remained sluggish in a majority of Districts, although a few Districts noted slight improvement. In banking, loan growth was generally reported to be restrained, with residential real estate lending and consumer lending showing more weakness than commercial lending. Districts reporting on agricultural activity said conditions were mixed, based largely on how June precipitation affected them. Districts reporting on the energy sector said it continued to strengthen.
All reporting Districts characterized overall price pressures as elevated or increasing. Input prices continued to rise, particularly for fuel, other petroleum-based materials, metals, food, and chemicals. Retail price inflation varied across the country, with some Districts reporting increases but others noting some stability, at least for the present. Wage pressures were generally limited in most Districts, as labor market demand was soft except for highly skilled workers and in the energy sector.
Consumer Spending and Tourism
Consumer spending was reported as mixed, weak, or slowing in nearly all Districts since the last report, although tax rebate checks boosted sales for some items, especially electronics. Cleveland was an exception to the trend, characterizing sales as stable to improving outside of the grocery sector. Sales at discount stores were also reported as growing in the Philadelphia, Richmond, St. Louis, Dallas, and San Francisco Districts, and New York reported brisk sales in New York City. However, sales at most other types of stores, especially for discretionary and housing-related items, were typically characterized as weak or falling, and restaurant sales were also reported as slow in the Philadelphia and Minneapolis Districts. The outlook for retail activity was also generally downbeat, with expectations "subdued" among Atlanta District contacts and "grim" among Dallas District contacts. Despite sluggish overall sales, inventories were reported as largely satisfactory in most Districts.
Reports on automobile sales were almost uniformly weak across Districts. Sales were especially poor for large vehicles such as trucks, SUVs, and some minivans. Indeed, auto dealers in the San Francisco District were increasingly reluctant to accept trade-ins of trucks and SUVs due to a lack of a wholesale market for these vehicles. Demand for small fuel-efficient and foreign vehicles was reported to be solid or increasing in the Philadelphia, Cleveland, Chicago, Minneapolis, and Dallas Districts. Dallas reported that consumers were paying sticker prices for such vehicles, and that they were in short supply.
Tourist activity was mixed across Districts. Contacts in the Philadelphia and Chicago Districts reported weakness, and San Francisco said travel to Hawaii declined noticeably. Atlanta also noted increased hotel cancellations and shorter trip durations, although convention business remained strong. By contrast, tourist activity to mountain areas of the Richmond, Minneapolis, and Kansas City Districts was characterized as stronger, which some contacts attributed in part to more residents vacationing close to home due to high gasoline prices. New York also reported strong tourism activity in New York City, including for Broadway shows and at Manhattan hotels.
Nonfinancial Services
The demand for services was mixed among the various Districts, with strength in the IT and health care industries offsetting some weakness in other service sectors. Advertising and marketing firms in the Boston District experienced robust demand from the tourism and retail industries, and St. Louis reported the addition of two new call centers in the area. Dallas noted particularly strong demand for accounting, energy, engineering, and IT services. On the negative side, New York, Richmond, Minneapolis, and San Francisco reported services activity as mixed or decreasing. San Francisco noted "grim" conditions for real estate services such as title insurance, and some service firms in the New York District expressed caution about hiring due to ongoing turmoil in the financial industry. In transportation services, New York, Atlanta, and Dallas reported weaker activity due to higher fuel costs, while Cleveland said activity remained unchanged and Richmond indicated an increase in shipping volume. New York said fuel, as opposed to labor, was now the number one cost for trucking firms and that most surcharges were considered inadequate to defray the escalated costs. Cleveland reported that many trucking firms had reduced capital spending, with little change expected in coming months. Atlanta and Dallas noted a decline in auto and construction materials shipments. Most services contacts expected flat activity heading forward.
Manufacturing
Manufacturing activity declined or remained weak in most Districts, although Cleveland, St. Louis, and San Francisco reported stable or slightly increasing activity. Many Districts reported a decline in production of housing-related goods, such as construction equipment, wood products, home furnishings, and HVAC units. The Cleveland, Atlanta, Chicago, and St. Louis Districts all reported declines in auto manufacturing activity. However, St. Louis noted a slight rise in demand for parts of small and hybrid-type cars. An equipment producer in the Richmond District cited reduced sales due to interrupted shipments caused by higher gas prices and restrictive truck schedules. On the positive side, producers of energy equipment saw increased demand in several Districts, and Minneapolis noted a rise in orders for wind turbine parts. San Francisco said that food manufacturers continued to operate at or near peak capacity due to persistently high demand. Cleveland, Richmond, Chicago, and Kansas City reported continued high demand for exports. Dallas noted strong overseas sales of high-tech products in Asia, but cited weak demand in Western Europe. Some manufacturers in the Boston District cited examples of robust demand in foreign markets, while others said foreign demand growth may be slowing. Manufacturers in several Districts anticipated further factory weakness in the near future. While most Districts expected stable capital spending heading forward, a few noted manufacturers' plans to reevaluate based on current economic conditions.
Real Estate and Construction
Residential real estate markets declined or were still weak across most of the country. Slower home sales were reported in the Boston, Philadelphia, Richmond, Atlanta, and St. Louis Districts. Cleveland reported flat to declining sales, while sales remained sluggish in the Kansas City and New York Districts--especially at the high end--and were below year-ago levels in the Minneapolis District. New York also reported a drop in Manhattan condo and co-op transactions. Inventories of unsold homes or condos were reported as higher or excessive in several Districts, but Dallas noted a continued decline in inventories, especially at the low end. Home prices continued to decline in most Districts, and increased use of incentives and discounting was noted in several Districts. San Francisco noted particularly sharp declines in home prices in areas of California, Arizona, and Nevada that have experienced large increases in foreclosures. Atlanta said home prices dropped across the board. On the other hand, home prices were said to be holding up in the Dallas District and were little changed in the Kansas City District. Difficulties obtaining mortgage financing were reported in the New York and Chicago Districts. All Districts reporting on single-family construction said activity continued to decline, and builders in the Philadelphia District noted a rising number of cancellations. The decline in new construction accelerated in some areas of the Chicago District.
Commercial real estate activity weakened or remained sluggish in a majority of Districts, although Cleveland, Minneapolis, and Kansas City noted some improvement. Boston characterized sentiment in the sector as "decidedly morose," and industrial markets were especially weak in that District. Office market conditions in the Richmond District continued to weaken and were "bleak" in the Washington, DC area. Vacancy rates increased in the Philadelphia and Atlanta Districts, and were up noticeably in both Midtown and Downtown Manhattan, according to contacts in the New York District. Office rents remained steady in the Philadelphia District, and were little changed in the Boston District after taking concessions into account. More positively, contacts in the Minneapolis District noted rent increases and positive absorption in the Minneapolis-St. Paul area office market. Districts reporting on nonresidential construction generally noted sluggishness, which contacts in the Chicago and Kansas City Districts attributed in part to prohibitively high construction costs. Contractors in the Cleveland District were also worried about cuts but reported strong backlogs and a steady flow of inquiries. Contacts in many Districts also cited tightened financing as a constraint. San Francisco noted particularly steep drops in commercial construction in the San Diego area. Retail space was described as overbuilt in the Boston and Chicago Districts.
Banking and Finance
Loan growth was generally reported to be restrained across the country, with residential real estate lending and consumer lending showing more weakness than commercial lending. Overall loan demand was reported to have weakened in the New York, Kansas City, and San Francisco Districts, and was described as sluggish in the Philadelphia District. St. Louis reported slightly positive overall loan demand. A number of Districts reported sluggish growth or slowing demand for residential real estate loans, and San Francisco described demand for such loans as very weak. Consumer loan demand was reported to have declined in the New York, Chicago, and Kansas City Districts, and grew more slowly in the Philadelphia District. Reports on business lending were generally more upbeat. However, slight to moderate declines in business lending were reported in the New York, Kansas City, and San Francisco Districts. On the funding side, Dallas described competition for deposits as very tough, but Cleveland indicated that core deposits at smaller banks were stable to increasing as a result of a flight to safety by investors.
Most Districts reported a further tightening of credit standards, especially for residential real estate and construction loans. Dallas reported that lenders were tightening non-price terms and boosting loan spreads in response to increases in their cost of capital. Tighter standards for construction loans were reported in the Atlanta and Chicago Districts, and San Francisco indicated that credit standards remained quite restrictive for both residential real estate and construction loans. Tighter standards for business loans were reported in three Districts, but banks in the Atlanta District were reported to be competing more intensely for business customers with good credit histories. Kansas City and Boston reported that tightened standards were especially prevalent on commercial real estate loans.
Among the Districts that commented on bank loan quality, some deterioration was reported, including in the Philadelphia, Richmond and San Francisco Districts. New York reported increased delinquencies on consumer and residential real estate loans, and San Francisco indicated that declines in loan quality were greatest for real estate loans and construction loans. In the Dallas District, contacts had not yet observed a significant decline in loan quality but expected deterioration in coming months, especially for residential real estate and consumer loans.
Agriculture and Natural Resources
Agricultural conditions were mixed across Districts following June precipitation, while high input costs trimmed profits. Drought conditions eased in the Richmond, Atlanta, Minneapolis, and Dallas Districts with increased rainfall. However, Chicago, St. Louis, Minneapolis, and Kansas City reported that cool, wet weather delayed corn and soybean development, and Chicago cited major crop losses due to flooding. Heavy rains also delayed the winter wheat harvests in the Richmond, St. Louis, and Kansas City Districts, although initial reports indicated average or above average wheat yields. San Francisco noted robust agricultural export activity, but wildfires hindered growing conditions in that District. Most Districts reported concerns about higher input costs. Kansas City attributed slightly lower farm income expectations and increased agricultural loan demand to these higher costs. Chicago, Minneapolis, Kansas City, and Dallas also indicated that livestock producers were struggling with higher feed costs.
Energy activity strengthened further with rising energy prices. Oil and natural gas drilling remained strong in the Cleveland, Kansas City, Dallas and San Francisco Districts, with expectations of further exploration. In the search for new energy sources, Dallas noted increased drilling activity toward unconventional natural gas sources, and Kansas City cited rising interest in tapping shale oil deposits. Minneapolis stated that wind farm development continued, although ethanol production slowed with higher corn prices. Mining activity increased in the Cleveland and Minneapolis Districts. Cleveland indicated that equipment costs were rising, while the lack of equipment constrained oil and gas production in the Kansas City District.
Prices and Wages
All reporting Districts characterized overall price pressures as elevated or increasing. Input prices continued to rise, particularly for fuel, other petroleum-based materials, metals, food, and chemicals. Chicago said the rate of growth in steel prices had flattened, but overall levels remained high. Construction industry contacts in the Cleveland District noted rising prices for all types of products, including concrete, shingles, and steel. Boston reported that contacts were anticipating further price increases in oil derivatives, shipping, and travel. Many Districts reported on manufacturers' plans to raise selling prices as a result of higher input prices, with several commenting on fears of a corresponding decrease in customer demand and overall sales volume. Several firms in the Philadelphia District indicated that sluggish demand has made it difficult to raise prices, and Atlanta District businesses were hesitant to pass-through increases due to a reduction in discretionary consumer spending. One producer in the Richmond District indicated that his company would attempt to pass along price increases to customers but it may not be enough to offset cost increases. Retail prices increased in several Districts, including in the Kansas City District-which reported an increase in hotel, restaurant, and resort prices-and in the Chicago District, where retailers said they raised selling prices in response to higher wholesale prices. On the other hand, New York and Cleveland reported relatively stable retail prices. San Francisco also reported that final prices for many retail items were stable or down, partly due to extensive discounting, although some contacts noted that pressures were likely to increase in coming months. One major retail chain in the New York District said that while costs under existing contract were not up substantially, some escalation in prices was expected within the next year.
Most Districts reported labor markets as unchanged or slightly weaker compared with the last survey period, and that wage pressures were generally modest. Demand for labor remained high for skilled workers in most industries, while several Districts reported widespread weakness in the financial services, auto, and construction industries. Contacts in the Cleveland, Atlanta, Chicago, and Kansas City Districts reported very little upward wage pressures, with the exception of the energy and skilled labor markets. San Francisco noted some downward movement in wages for construction, finance, real estate, and retail jobs. But Boston and Dallas said more workers were requesting wage adjustments to supplement cost of living increases.
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Fed. 1day RP + 6.75B [net Drain -0.50B ]
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Fed.(1)2) 1day RP + 7.25B [net Drain 1.50B ]
Fed.(2) 1day Forward 28day + 20.00B
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Capstone Announces Order for Approximately $4.7 Million for Coal Seam Gas Project in Australia
Tuesday July 22, 5:00 am ET
http://biz.yahoo.com/bw/080722/20080722005342.html?.v=1
Fed. 1Day RP + 8.75B [ net Add +1.75B ]
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•• Earnings Calendar for the Week Ahead ••
B = Before-Market Hours
D = During-Market Hours
A = After-Market Hours
REPORTS TO BE ANNOUNCED FOR WEEK OF JUL 21 - JUL 25
Courtesy...Bullwinkle
#msg-30821350
Schiff: Armed and Dangerous
By: Peter Schiff
Euro Pacific Capital, Inc.
Friday, 18 July 2008
This week, with the nation’s financial infrastructure crumbling before our very eyes, the nation’s top two economic policy makers made their way to the Congress for an extraordinary episode of political theater. Fannie Mae and Freddie Mac, the quasi-government entities that form the backbone of America’s gargantuan mortgage market, appeared to be cracking. To the somewhat bewildered members of Congress, Ben Bernanke and Henry Paulson offered radical remedies to save the lenders. Despite the fact that the proposed policies would thoroughly redefine America’s supposedly capitalistic pedigree, the moves were presented as wholly inevitable, and in the end, benevolent and costless.
If you are looking for a new chapter in American history, it has just begun.
The most memorable moment in the episode came when Secretary Paulson explained that the best way to minimize the chances that Fannie Mae and Freddie Mac will need a government bailout would be for Congress to grant the Treasury unlimited authority to lend to the two institutions. His analogy: When the bad guys see a bazooka on your hip, you are less likely to be challenged to a gunfight.
At its heart Paulson’s argument assumes the GSE’s problems are simply a function of confidence. He believes that if the U.S. Treasury signals that it will stand behind both firms to the bitter end, then investors would have no reluctance in buying their bonds. But assuring that creditors will be repaid (albeit with cheaper dollars) does nothing to address the root cause of the problem, which is that both firms are losing money on their loan portfolios, and on the loans that they insure. Paulson’s plan actually assures that Fannie and Freddie’s losses will be even larger, and puts American taxpayers, or more precisely wage earners and savers, directly on the hook. The longer these two entities remain in business, the more bad loans they will buy or insure, and the more money taxpayers will lose.
In theory, Fannie and Freddie were originally created to help provide affordable housing. In reality, like all government programs, they achieved the opposite. Rather than making houses more affordable, they merely enabled buyers to overpay for them. The result is that American homeowners are now saddled with staggering amounts of debt, as easy credit made it possible for buyers to bid prices to dazzling heights. So while a record number of Americans now own homes, they have bankrupted themselves in the process.
Without the help of Fannie and Freddie, and now the full faith and credit of the United States, American home buyers would be facing much steeper mortgage interest rates. This is particularly true given that our ability to borrow is now dependent on access to the global savings pool. Without the implicit, and now explicit, government guarantee, foreigners would be much less willing to extend cheap credit to Americans. If we had to rely solely on our shallow domestic savings pool and individual credit worthiness alone, rates would be significantly higher. Since home prices are a function of the ability of buyers to pay, higher interest rates would mean lower prices, thus making houses themselves more affordable.
Even the tax deductibility of mortgage interest has achieved a similar result. By subsidizing home buying, and encouraging renters to become buyers instead, the government has artificially increased demand for houses, causing prices to rise. In the end, the benefits of the mortgage tax deductions are limited to those who benefit from inflated home prices. This includes realtors, who earn higher commissions, governments that collect higher property taxes, and those who owned their homes prior to the loophole being enacted who cashed in on the gains.
At present, the best the government can do for housing and the economy is to leave both alone, cease interference in the free market, restore sound money, and allow capitalism to work.
Unfortunately, the laws of capitalism are now demanding that home prices continue to fall precipitously. But, based on the speed in which our government, public and financial institutions are willing to abandoned free market principals at the first whiff of economic pain, the likelihood that this impulse will take hold is increasingly remote. So hunker down as the United States finds itself on the express track to state socialism with Paulson’s Bazooka locked, loaded and pointed right at us. When the government pulls the trigger the blast will blow the dollar, and what’s left of our capitalist economy, to smithereens.
Peter Schiff C.E.O. and Chief Global Strategist
Euro Pacific Capital, Inc.
http://news.goldseek.com/EuroCapital/1216398826.php
Fed. Ops: 39.00B Matures this week. *
Mon: 7.00B 3day
Wed: 20.00B 28day
Thu: 5.00B 14day
>>> 7.00B 7day
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Temp Ops:
Perm Ops:
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Public Debt:
Limit ~ $9,815 T
7/17 ~ $9,517 T [A bit Deeper in Debt.]
* Last time Congress boosts debt ceiling
#msg-23238336
=========================================================
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Fed. 3day RP + 7.00B [ netDrain -3.75B ]
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