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DOW & STI

 

The Dow plumetted -166pts on the opening bell!...

This is ominous!... 

 

Regardless of how the Dow or the rest of the world markets perform, the STI may not see any strength in the weeks ahead...


 

 

NEW YORK -- U.S. stocks were set to decline at the start of trading Tuesday, despite a host of upbeat corporate profit reports, as investors saw concerns in news from overseas.

Dow Jones industrial average, S&P 500 futures and Nasdaq 100 futures were lower.

 

 

something wrong with this market...cannot be all drop...where is BB's money?? i though yesterday DOW increase, STI better today...sianz.... 

 

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Moody’s, Standard and Poor’s and Fitch, whose ratings assured investors that the newfangled investments were as safe as United States Treasury bonds, arguably bear as much responsibility for the financial crisis as the banks that put the investments together.

But the raters have mostly avoided public scrutiny, and from the look of Democrats’ current proposals to overhaul financial regulation, it looks as if they will remain off the hook.

From 2004 to 2007, agencies made hundreds of millions of dollars rating thousands of deals in residential mortgagebacked securities and collateralised debt obligations (CDOs). Their fees could exceed US$1 million ($1.37 million) per transaction, on top of annual “ratings surveillance” fees of tens of thousands of dollars.

Ninety-one per cent of the triple-A securities backed by sub-prime mortgages issued in 2007 have been downgraded to junk status, along with 93 per cent of those issued in 2006 and 53 per cent of those issued in 2005. On Jan 30 of 2008 alone, Standard and Poor’s downgraded over 6,300 sub-prime residential mortgagebacked securities and 1,900 CDOs.

Triple-A is what the raters assign to United States government debt.

Had they warned investors that the new mortgage-based products were just high-tech junk bonds, it is unlikely so many financial institutions would have loaded up on the stuff.

It is not just that rating agencies are incompetent, made wrong assumptions about the housing market and used flawed models to evaluate mortgage-backed securities.

Their business is rife with conflicts of interest.

The banks pay the raters and have an enormous incentive to shop around for ratings. Email made public last month indicates that raters give in to the temptation to manage their ratings in order to acquire more business.

A 2004 email from one Standard and Poor’s employee to another referred to a meeting to “discuss adjusting criteria for rating CDOs of real estate assets this week because of the ongoing threat of losing deals”.

A 2007 email from a Moody’s employee to a Chase banker suggested a colleague was “looking into some adjustments to his methodology that should be a benefit to you folk”.

And yet, the financial reform Bills before Congress have only vague proposals to fix the agencies.

They would have to register with the Securities and Exchange Commission (SEC), and the Senate Bill would allow the SEC to pull their registration if they were consistently wrong.

Raters would have to disclose conflicts of interest, and investors would be able to sue for blatant recklessness.

That is not enough. Some good ideas are floating around to do much better.

If raters are considered to be a public good, they should be financed like a public good, with a tax or other levy, and paid by the government.

Another option would be to let banks pay for ratings but take away their ability to choose who rates their bonds, letting the SEC decide based on raters’ performance.

If there is no way to improve raters’ track record, a more drastic step would be to eliminate them, or at least eliminate the legal requirement that some insurance companies, pension funds and other entities hold assets with high ratings, a rule that gives the raters enormous quasiregulatory power.

This is not a perfect solution. A world with no rating agencies would leave many investors at sea.

But it is not much of a life raft if rating agencies cannot do better than they did during the housing bubble.

veryone (except Wall Street bankers) seems to be outraged about Wall Street banks, which made billions by trading complex confections of dicey mortgages and then passed us the tab when the investments went belly up. But what about the agencies that bestowed triple-A ratings on many of the noxious financial products?

THE NEW YORK TIMES

pharoah88      ( Date: 04-May-2010 14:03) Posted: today Tuesday May Not much of a life raft? Ratings agencies assured investors that noxious mortgage deals were as safe as US Treasuries It is not just that rating agencies are incompetent, made wrong assumptions about the housing market and used flawed models to evaluate mortgage-backed securities. Their business is rife with conflicts of interest.Editorial4, 2010 page 17

 

When big boys dump, they do it slowly and in an orderly manner, rather than panic and chase all the high price buyers away...

 

today Tuesday May

Not much of a life raft?

Ratings agencies assured investors that noxious

mortgage deals were as safe as US Treasuries

It is not just that rating agencies are incompetent, made wrong assumptions about the housing market and used flawed models to evaluate mortgage-backed securities. Their business is rife with conflicts of interest.Editorial4, 2010 page 17

 

Stocks start May strong

By Alexandra Twin, senior writerMay 3, 2010: 5:54 PM ET

NEW YORK (CNNMoney.com) -- Stocks rallied Monday, bouncing back after a big selloff last week as investors welcomed news that European leaders agreed to provide Greece with $146 billion in aid over the next three years.

A number of better-than-expected economic reports and some positive monthly sales numbers from the nation's automakers added to the gains.

The Dow Jones industrial average (INDU) rallied 143 points, or 1.3%. The S&P 500 index (SPX) gained 15 points or 1.3%, surpassing 1,200, a key psychological level. The Nasdaq composite (COMP) rose 37 points or 1.5%.

Investors welcomed reports that Greece will receive a substantial bailout from the European Union (EU) and the International Monetary Fund (IMF), as it set to rest worries that the country's ballooning deficit would drag on the euro and exacerbate problems for other debt-plagued nations. Portugal, Italy, Ireland, Greece and Spain - the so-called PIIGS, have all struggled to pay back debt.

"We're seeing a reflex rally after last week's selling," said Jamie Cox, managing partner at Harris Financial Group.

"The bailout happened and it's reassured us," he said. "You put Greece into the background, that means there is a template for all other EU bailouts."

The Greek bailout, along with better-than-expected reports on manufacturing and construction spending in the U.S., overshadowed reports that China is boosting its bank reserves to counteract inflationary pressure. Concerns about China limiting its lending dragged on markets earlier this year.

Investors may have also taken some comfort from comments from influential investor Warren Buffett over the weekend. Buffett said he doesn't think Goldman Sachs did anything wrong in the sale of subprime-related securities at the center of an SEC fraud charge and potential criminal probe from the Justice Department. Buffett's Berkshire Hathaway has a big investment in Goldman Sachs' preferred stock.

Stocks tumbled Friday, posting a weekly decline for the first time in nine weeks, after reports that Goldman Sachs is facing a criminal probe sparked analyst downgrades and a selloff in the financial sector.

Monday, Goldman Shares (GS, Fortune 500) gained 5%, rising along with a variety of financial shares. The KBW Bank (BKX) sector index added 1.7%.

However, gains were broad-based, with 29 of 30 Dow stocks advancing, led by Boeing (BA, Fortune 500), United Technologies (UTX, Fortune 500), Chevron (CVX, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), IBM (IBM, Fortune 500), 3M (MMM, Fortune 500) and Caterpillar (CAT, Fortune 500).

Auto sales: Auto and truck sales were being released throughout the session. Ford Motor (F, Fortune 500) posted a 25% year-over-year sales gain in April, the fifth straight month of 20% or more improvement. General Motors (GM) said sales rose 6% from a year ago and fell 2% from last month.

Toyota Motor (TM) said sales for April rose 24% versus a year ago, while Honda Motor (HMC) said sales rose 13% versus the previous year.

Greece: Worries that Greece would default on its debt have dragged on the stock market for weeks, particularly with a May 19 deadline looming for the country to pay back over $11 billion.

But over the weekend, the EU and the IMF agreed to provide $146 billion in aid over three years, with up to $40 billion available in the first year. The loans were granted after Greece announced it was taking on new "austerity" measures to cut expenses and bring down its budget. On Monday, influential Germany voted to provide $40 billion over three years, saying that letting the country go bankrupt would destabilize the euro.

Airlines: UAL (UAUA, Fortune 500)'s United Airlines said it will buy Continental (CAL, Fortune 500) in a $3.2 billion stock deal that will create the world's largest airline, overtaking current leader Delta Air Lines (DAL, Fortune 500).

The combined company will use United's name and Continental's logo and is expected to have annual revenues of $29 billion.

Apple: Apple (AAPL, Fortune 500) said it sold 1 million iPads in one month, with sales outpacing the first month for the iPhone by roughly two to one.

Economy: The Institute for Supply Management's April manufacturing index rose to 60.4 from 59.6 in March. Forecasts had called for a rise to 60, according to a consensus of economists surveyed by Briefing.com.

March construction spending rose 0.2%, the government reported. Spending fell 2.1% in April and was expected to fall 0.3%.

Personal income for March rose 0.3% after rising 0.1% in February, according to a Commerce Department report released before the start of trading. Economists thought income would rise 0.3%.

Personal spending rose 0.6% in March, in line with forecasts, after rising 0.5% in the previous month.

World markets: In overseas trading, European markets rose, with France's CAC 40 up 0.3% and Germany's DAX up 0.5%. London's FTSE was closed.

Asian markets were mixed, with Hong Kong's Hang Seng index down 1.4% and Japan's Nikkei up 1.2%.

The dollar and commodities: The dollar fell versus the euro and gained against the yen.

U.S. light crude oil for June delivery rose 4 cents to settle at $86.19 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery rose $2 to $1,182.70 per ounce.

Bonds: Treasury prices slipped, raising the yield on the 10-year note to 3.70% from 3.66% Friday. Treasury prices and yields move in opposite directions.

Market breadth was positive. On the New York Stock Exchange, winners topped losers by over three to one on volume of 1.18 billion shares. On the Nasdaq, advancers topped decliners by over two to one on volume of 2.34 billion shares.  

 

Friday: 30 APRIL 2010

DOW  -158 PTS

GREECE  FRAUD  BAILOUT

&  BP  OIL  SPILLS 

 

 

Good information by pioneer forumer since 2007

I will print it our and paste at my desk

This will remind me not to buy any stock until the market is stabilized.

Tks and Rgds

 

 

soloman      ( Date: 01-May-2010 12:54) Posted: DON'T BUY ANYTHING FROM NOW ON ........... STI GO UP ABIT ONLY WHEN U BUY , WHATS THE POINT ..... ANYONE WHO BOUGHT LAST TIME NOW SHAKING ....................

 

You sound like you're shorting the market. Good luck to you. Cheers.

soloman      ( Date: 01-May-2010 12:54) Posted: DON'T BUY ANYTHING FROM NOW ON ........... STI GO UP ABIT ONLY WHEN U BUY , WHATS THE POINT ..... ANYONE WHO BOUGHT LAST TIME NOW SHAKING ....................

 

Remember this time unprecedented global capital market "DECOUPLING" is presented and materialized.

iPunter      ( Date: 01-May-2010 10:53) Posted: When the domino cards go to Spain, it will be worse!...

 

DON'T BUY ANYTHING FROM NOW ON ...........

STI GO UP ABIT ONLY WHEN U BUY , WHATS THE POINT .....

ANYONE WHO BOUGHT LAST TIME NOW SHAKING ....................

 

SHORTIST ON STANDBY .............

PREPARING TO STIRKE BIG TIME THIS TIME ROUND ...............

 

Friday: 30 APRIL 2010

DOW  -158 PTS

GREECE  FRAUD  BAILOUT

&  BP  OIL  SPILLS 

 

When the domino cards go to Spain, it will be worse!... 

 

 

DOW -158 PTS

SIMPLE :

TIME GETTING SHORTER FOR RATES, STIMULUS PULL BACK

IF NOT, MORE DEBTS AND MORE GREEK CRISIS ......

 

That is the effective way US capital market absorb International global fund to bail out its huge deficit perhap!Ha. ha.. ha...

iPunter      ( Date: 01-May-2010 04:02) Posted: The Dow is now 'lao sai' again... One day "pengsan' 'lao sai', and one day 'Cheong Aaaarrrhhh!!!... Like a Galactica roller coaster.