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Monday, October 6 2008
Earliest at Top
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  • 9:52 PM Former Fed chair Paul Volcker's latest effort is a report/survey on global financial market regulation - very, very long but worth reading.
  • 9:21 PM Shortly after its Tuesday open, the Nikkei dipped below 10,000 for the first time since 1993, but has rebounded a little. Nikkei -3.47%. Hang Seng -4.97%. Shanghai -5.23%.
  • 5:16 PM The Treasury is now officially soliciting financial agents to help implement TARP, including accounting and auction managers. It's fast-tracked: applications must be received by Wednesday Oct. 8 at 5 pm and winners must start work on Oct. 11.
  • 5:05 PM WSJ: U.S. officials are examining ways to ease deepening strains in the commercial paper market, which have been hit by an unwillingness among money market investors to hold risky assets.
  • 4:35 PM While the IMF prepares to release revised global projections this week, the private sector is already slashing its forecasts for emerging markets, which up till now had been the only bright spot in an increasingly dark outlook.
  • 4:20 PM Sector ETF losers: Solar– KWT -11.5%. Agribusiness– MOO -10.4%. Russell 2000– IWM -9.35%. Coal– KOL -8.75%. Agriculture– DBA -8.6%. Steel– SLX -8.4%. Clean Energy– PBW -8%. Semis– IGW -7.3%.
  • 4:18 PM Bank of America (BAC) pre-announces Q3 EPS of $0.15 vs. $0.66 consensus. Initiates common stock offering of $10B. Shares -10.6% AH to $30.77.
  • 4:04 PM Wachovia (WB), Citigroup (C) and Wells Fargo (WFC) agree to a litigation standstill, and to "cooperate in good faith to agree among themselves."
  • 4:04 PM Closing deep in the red doesn't do the late-day comeback justice. Dow -3.58% to 9,955.50. S&P -3.86% to 1,056.85. Nasdaq -4.34% to 1,863.
  • 3:57 PM Bill Gross: The Fed should buy up commercial paper, and cut rates to 1%. "We are experiencing asset deflation, and the threat of headline inflation is long past."
  • 3:54 PM Can the Dow close above 10,000? Currently -3.12% to 10,003.
  • 3:53 PM Wednesday is the deadline for money market funds to join the Treasury's guarantee program. All major players have signed up, except Fidelity, Vanguard and T. Rowe Price (TROW). Fidelity and Vanguard account for $600B between them.
  • 3:48 PM Retail sales tracker ShopperTrak drops its holiday retail sales growth forecast to +1.7% from +2.5% to +3%. Between Aug. 31 and Sept. 20, it says, shopper traffic fell 9.2%/day compared to 2007.
  • 3:41 PM SAP collateral damage: ADBE -10.6%. ORCL -8.5%. MSFT -6.5%.
  • 3:35 PM Ackman says he took a 'small' stake in AIG that would probably make him the 10th of 12th biggest investor. AIG has incredible assets to sell, he says. Shares +0.45% to $3.88.
  • 3:31 PM With 1/2 hour to go, here's where the major indexes stand: Dow -4.1% to 9,903. S&P -4.25% to 1,053. Nasdaq -4.36% to 1,862.
  • 3:29 PM Dendreon (DNDN) +35%. An independent data monitoring committee found its experimental prostate cancer drug, Provenge, reduced death risk by 20%. BofA analysts remain skeptical it will get FDA approval, and say today's action may be a short squeeze.
  • 3:27 PM Bush: "I believe in the long run this economy is going to be just fine."
  • 3:25 PM Leaving aside the flaws of $700B rescue, Nouriel Roubini says, we face a much more urgent problem: "It is one of a generalized run on the short-term liabilities both of the banks, of the non-bank shadow system, and now of the corporate sector." A.K.A. short-term paper.
  • 3:21 PM Dow is now up 300 points from its low, -4.8% to 9,831 (low: 9,525).
  • 3:13 PM Some bottom fishers waking up. Dow -5.94% to 9,710. S&P -6.3% to 1,030. Nasdaq -6.45% to 1,822.
  • 3:12 PM How did Citi (C) arrive at the astounding claim of $60B against Wells Fargo (WFC) for intruding on its FDIC-sponsored Wachovia (WB) takeover? ClusterStock: Simple, it's the aggregate of all Citi's mortgage market writedowns.
  • 3:04 PM Lehman's Dick Fuld takes the blame for the 158-year-old I-bank's collapse - but says regulators knew months in advance exactly what its liquidity was and how it was pricing its distressed assets.
  • 3:01 PM Crude -6% to $88.27. Gold +4.24% to $868.50. Silver -2.47% to $11.04. Copper -11% to $2.3925.
  • 3:00 PM With an hour to go, markets, mercifully, are up somewhat from their lows. Dow -6.52% to 9,651. S&P -7.12% to 1,021. Nasdaq -7.67% to 1,798.
  • 2:57 PM Fed's Fisher: The U.S. economy has entered a sustained period of anemia due to frozen credit markets - which are the lifeblood of capitalism. "I don't like the word recession. Whether it's a recession or not is not the point. The point is that we're not growing."
  • 2:55 PM Sector ETF weakness continued: Energy– XLE -10.7%. Basic Materials– IYM -10.2%. Homebuilders– XHB -10.1%. Energy– IYE -9.9%. Dividends– DOL -10.35%. Basic Materials– XLB -9.4%.
  • 2:55 PM Sector ETF weakness - where to start? Steel– SLX -17.9%. Solar– KWT -17.1%. Coal– KOL -16.9%. Oil Services– OIH -13.9%. Agribusiness– MOO -13.3%. Clean Energy– PBW -13.6%. Gold Miners– GDX -11.5%.
  • 2:55 PM Sector ETF strength: Gold– GLD +3.7%. That's it.
  • 2:51 PM LinkedIn's planned employee share sales dissolves together with the Nasdaq.
  • 2:48 PM SAP (SAP) is down 14.5% after reporting lower-than-anticipated Q3 software and service revenue due to a "very sudden and unexpected drop in business activity." Not the best day to warn.
  • 2:45 PM With the Dow 10,000 mark already a distant star, S&P 1,000 comes into view. Currently -8% to 1,012.
  • 2:35 PM "The global capital markets system has had a heart attack," says John Burbank, "and the policymakers are prescribing exercise and vitamins."
  • 2:28 PM Markets hit new session lows, with the Dow down 700 points. Dow -7.23%. S&P -7.6%. Nasdaq -7.87%.
  • 2:26 PM Jim Cramer: Time to bail. Barry Ritholtz: Is this the contrarian buy call we've been waiting for?
  • 2:12 PM A close examination of the effective federal funds rate leads Rebecca Wilder to conclude the Fed has already cut interest rates. 1.25% anyone?
  • 1:59 PM Dow -5.28%. S&P -5.95%. Nasdaq -6.7%.
  • 1:59 PM Contrary to common perception, speculators are more likely than not to destabilize markets.
  • 1:48 PM "The last few days have devastated the American consumer," consultant Walter Loeb says. "They all feel poor." Consumer spending, already anemic, almost certainly declined in Q3.
  • 1:40 PM Long-term Treasurys are leading the way. 30-year +1.96%. 10-year +1.37%. 5-year +0.87%. 2-year +0.38%.
  • 1:25 PM Dow 10,000! - from the other direction. Irrational? Only time will tell. But certainly not Irrational Exuberance.
  • 1:12 PM Emerging market stocks (ETF: EEM) fell the most in at least 20 years, and exchanges in Brazil (EWZ) and Russia (RSX) halted trading as the global banking crisis escalated in Europe and oil fell below $90 a barrel. "Fear of a deeper global recession is building."
  • 12:59 PM The yen's up a cool 4.2% against the dollar, to 0.009987. Other currencies aren't so lucky. Euro -2.22% to $1.352. Pound -1.95% to $1.74. $Cdn -2.3% to $0.905.
  • 12:47 PM Markets are down 10% since 2 PM last Friday. Time for a capitulation rally - or just another bus stop on the road to oblivion?
  • 12:34 PM A Goldman Sachs alumnus in charge of the nation’s economic rescue? Hmm... Meet Neel Kashkari, the man with the $700B wallet.
  • 12:21 PM Bond bulls aren't worried that yields are already below the fed funds target rate, because they're almost sure the Fed will lower rates again. Bears, meanwhile, think we may be close to a bottom, especially if the Fed's $700B rescue plan succeeds in unlocking credit markets.
  • 12:08 PM Even once-untouchable Russian oligarchs are being squeezed by the credit crunch, as the Russians discover leverage cuts both ways.
  • 11:57 AM A look at Wall Street's shadow market: Jim Grant discusses credit default swaps on CBS's 60 Minutes.
  • 11:57 AM Live on C-Span: Dick Fuld on Lehman Brothers' bankruptcy.
  • 11:48 AM Net equity withdrawal from mortgages plunged to near-zero in Q2, a level not seen in 14 years. "Less equity extraction means less consumption over the next few quarters," Calculated Risk says.
  • 11:35 AM "If financial conditions fail to improve quickly, near-term economic prospects could deteriorate markedly," NABE says in its Outlook. Two out of three economists believe we're already in recession, or will be there before year end.
  • 11:19 AM Sector ETF weakness: Coal– KOL -14.5%, Solar– KWT -13.6%, Steel– SLX -12.5%, Solar– TAN -10.7%, Oil Services– OIH -10.6%.
  • 11:18 AM Sector ETF strength: Gold– GLD +3.0%.
  • 11:17 AM Dow leaders: none. Dow laggards: C -9.6%, AA -7.3%, BA -5.9%, GM -5.9%, GE -5.5%.
  • 11:06 AM Treasury: Statement by the President's Working Group on Financial Markets
  • 11:04 AM Nine years after first breaking through to five digits, the DJIA is a four-horse buggy once again. Last time 10,000 was breached? Oct. 29, 2004.
  • 11:04 AM Fed officials plan to meet with top execs from commodities exchanges to push for the creation of a new, more transparent marketplace for credit default swaps. The new exchange could be up and running within weeks.
  • 11:01 AM Up volume vs. down volume: NYSE 23M to 1.736B (99%). Nasdaq 24M to 693M (96%). Amex 74M to 385M (84%).
  • 10:59 AM Advancers vs. decliners says it all. NYSE 98 to 3,082 (96%). Nasdaq 300 to 2,510 (87%). Amex 133 to 953 (85%).
  • 10:57 AM Ten-year credit default swaps on U.S. Treasury debt rose to record levels, climbing to 40 basis points from 36 basis points on Friday.
  • 10:41 AM Major averages are bleeding. Dow -4.75% to 9,837. S&P -5.73% to 1,036. Nasdaq -6.03% to 1,829.
  • 10:29 AM Experts wrongly predicted job loss during the credit crisis would bolster the offshore outsourcing market. Instead, growth estimates for the outsourcing industry continue to be revised downward in a 'fundamental restructuring' of financial services.
  • 10:23 AM Nintendo's (NTDOY.PK) new portable video game console will be on store shelves in Japan next month, and will reach overseas markets by 2009. The device is part of an effort to fight Apple's (AAPL) entrance into the portable gaming market with its iPhone.
  • 10:15 AM Dow trades below 10,000. Currently -3.4% to 9,969.
  • 10:07 AM The $700B bailout plan will help not just homeowners, but Hollywood too. As a sweetener to help the bill get through Congress, tax-breaks were attached to help a wide range of industries, including movie and TV productions.
  • 10:02 AM Markets went up, then back down, in first half hour. Presently Dow -2.91% to 10,024. S&P -3.4% to 1,061. Nasdaq -3.7% to 1,875.
  • 9:57 AM Treasury's Paulson is expected to choose Neel Kashkari to oversee the $700B rescue plan at least through January. Kashkari is a key Treasury adviser that Paulson has relied on heavily during the financial crisis.
  • 9:52 AM 94-year-old Seth Glickenhaus, one of the few still on Wall St. who worked there during the Depression, says the market may be bottoming - temporarily.
  • 9:45 AM Stocks moving on Barron's recommendations: ABX +4.8%, CME +2.8%, AOC +2.6%, ALL +2.2%, LVS -5.3%, MGM -4.4%, WYNN -4.2%.
  • 9:38 AM Netflix (NFLX) is down 12% in early trading. It trimmed its Q4 revenue guidance to $353-359 from $357-363, and cut its subscriber estimate to 8.95-9.25M from 9.1-9.7M.
  • 9:32 AM Dow opens down 2.75%. S&P -3.14%. Nasdaq -2.76%.
  • 9:18 AM Crude -3.1% to $90.95. Gold +3.56% to $862.90.
  • 9:17 AM Markets will open much lower. Dow futures -2.06% to 10,150. S&P -2.5%. Nasdaq -2%.
  • 9:16 AM Research In Motion (RIMM) is down 5.5% premarket. Deutsche Bank thinks BlackBerry Bold will ship late from AT&T (T), increasing likelihood RIMM will miss its guidance. Lowers price target to $50 from $70.
  • 9:15 AM eBay (EBAY) cuts 10% of its workforce, totaling roughly 1,000 permanent workers and several hundred temporary employees, in an effort to improve the performance of its core marketplace division.
  • 9:00 AM The credit crisis is hitting maritime trade particularly hard, and weaker shippers and shipyards may be weeded out. Global trade could be significantly slowed as over 90% of the world's traded goods by volume are carried by sea.
  • 8:56 AM Retailers rolled out major sales promotions to lure consumers, but wallet-conscious shoppers haven't taken the bait. Same-store sales for September are expected to show major declines, with this retail season shaping up to be the worst since 1991.
  • 8:51 AM The spreading financial crisis in Europe pushes the euro to its largest one-day drop against the yen since its 1999 debut. The euro also hits a 14-month low against the dollar.
  • 8:48 AM A senior officer at Italy's Economic Development ministry argues a pan-European bailout fund would make the continent stronger and more credible. Italy's proposed joint fund would be worth around 3% of GDP.
  • 8:45 AM Hartford Financial Services (HIG) posts a Q3 loss in the range of $8.50-$8.80/share, and announces Allianz (AZ) will invest $2.5B for up to a 20% stake in Hartford. Pre-market: AZ -1.9%. HIG +4.0%.
  • 8:34 AM Fed to pay interest on banks' required and excess reserve balances, which should leverage its control over interest rates. It also substantially increases the size of Term Auction Facility (TAF) auctions.
  • 8:28 AM The plunge in commodities prices has economists worried about deflation as a lack of credit strangles growth, pushing housing prices even lower, leading to more defaults, and even tighter credit etc. - a phenomenon one money manager calls a vicious deflationary cycle.
  • 8:20 AM Commodities markets are poised to post their biggest annual decline since 2001 as slowing economic growth erodes demand for raw materials, and investors bail out of leveraged positions.
  • 8:05 AM Scotiabank (BNS) to pay C$2.3B for a 37.6% stake in CI Financial, Canada's number-three mutual fund company.
  • 7:59 AM eBay (EBAY) buys Bill Me Later, the number two online-oriented payments brand, for $945M in cash ($820M) and options ($125M), opening up "deferred payments and promotional financing service to the tens of millions of customers who use eBay and PayPal."
  • 7:53 AM Bank losses could more than triple to $1.7T as they begin to tap the government's bailout plan, which will force them to write down some still overvalued assets, and may drive yields on more tame debt issues down.
  • 7:39 AM The cost of borrowing dollars overnight, Libor, jumped 37 BPs to 2.37%, while three-month Libor fell five BPs to 4.29%.
  • 7:30 AM Steven Spielberg's DreamWorks studio finalizes its split from Viacom's (VIA) Paramount Pictures. The parting seemed to be amicable, leaving open the possibility of future collaboration.
  • 7:22 AM How long before the Wall Street credit crisis clogs up Main Street?
  • 7:09 AM Following a similar move by U.S. counterparts, Europe's automakers plan to ask the European Commission for a $55B loan to speed the switch to environmentally- friendly cars.
  • 7:06 AM ING Groep (ING) wants to raise its stake in Bank of Beijing to 20%, and may apply for a retail banking license in China. ING wants 20-25% of its profits to come from the Asia-Pacific region within the next ten years, as compared to 6% today.
  • 7:06 AM A sworn affidavit by Wachovia (WB) CEO Robert Steel suggests the bank came close to failing at least twice in the last week, and that the FDIC pushed Steel to abandon a pact with Citigroup (C) in favor of Wells Fargo (WFC), thereby letting the government off the hook.
  • 6:56 AM UBS lowers its forecast for China's 2009 GDP growth to 8.0% from 8.8%, citing anemic global growth and forecasts of a severe U.S. recession. This is the second time in less than three months that UBS has lowered its outlook on China's growth.
  • 6:54 AM U.S. futures are shaky, but have climbed from overnight lows. Dow -2.06%. S&P -2.37%. Nasdaq -2.2%.
  • 6:53 AM Europe's limping into lunchtime: London -3.3%. Paris -5.9%. Frankfurt -5.5%.
  • 6:52 AM Asia markets saw deep shades of red on Monday. Nikkei -4.25% to 10,473. Shanghai -5.23% to 2,174. Hang Seng -4.97% to 16,804. BSE -5.61% to 11,824. Jakarta -10.03%.
  • 6:50 AM Makoto Utsumi, formerly a top official at Japan's Finance Ministry, says "there was and will be no chance for a coordinated rate cut" by the U.S., Europe and Japan to prop up the dollar.
  • 6:48 AM Asian money-market rates maintain their nine-month highs as the $700B fails to inspire confidence and European countries struggle to rescue faltering financial companies.
  • 6:30 AM The German government and banks craft a $68B rescue package for Hypo Real Estate after an earlier plan faltered. Germany's central bank warned Hypo's failure could have "triggered unpredictable consequences" like those of Lehman's failure.
  • 6:24 AM BoA (BAC) agrees to settle claims regarding some subprime loans or option adjustable-rate mortgages originated by Countrywide Financial. The deal will cover nearly 400K borrowers and could be worth up to $8.4B.
  • 6:23 AM The cost of borrowing in euros for three months, or Euribor, hit a record of 5.35% - its seventh straight record-breaking day. The TED spread - the difference between Treasurys and what banks pay to borrow in dollars - was at 3.89% today.
  • 6:12 AM BNP Paribas (BNPQY.PK) agrees to buy Fortis' Belgium and Luxembourg units for $19.8B after an earlier government rescue failed.
  • 5:22 AM A U.K. firm specializing in corporate insolvencies expects a wave of failures amongst U.K. retailers at the start of 2009. With the 'banking honeymoon' nearing its end, the firm warns there are few white knights around to rescue companies in distress.
  • 5:10 AM At the weekend's summit of EU leaders, Germany refused to back a pan-European bailout, and announced a full guarantee on bank deposits, pressuring other countries to follow suit. EU members not included in the talks expressed their disquiet.
  • 4:41 AM Fed officials and execs from Citi (C) and Wells Fargo (WFC) try to resolve their volatile battle for Wachovia (WB). The lead solution involves divvying up Wachovia's branches by geographic area, Wells taking its asset-management and brokerage units - and no FDIC help for either.
  • 4:38 AM Chinese Premier Wen Jiabao has full confidence China's financial system is safe, and says the economy may be able to sustain its rapid growth even in the midst of the global financial crisis.
  • 4:35 AM The ECB has been busy. Yesterday it lent €24.6B to banks through its above-market 5.25% marginal lending facility and took in €38.8B in its below-market 3.25% deposit facility. Today it plans to launch a quick liquidity absorbing tender up to €220B.
  • 4:20 AM European markets are down heavily in the early going. London -2.4%. Paris -4.7%. Frankfurt -4.4%.
  • 4:19 AM Flight-to-safety mindset is evident in Treasury futures. 30-year +1.01%. 10-year +0.73%. 5-year +0.53%. 2-year +0.23%.
  • 4:18 AM Crude has dipped below $90, currently -4.45% to $89.70. Gold +0.18% to $834.70.
  • 4:17 AM It's still the middle of the night, but U.S. futures look ugly. Dow -2.07%. S&P -2.39%. Nasdaq -2.66%.
  • 3:59 AM ImClone (IMCL) agrees to be acquired by Eli Lilly (LLY) for around $6.1B.
  • 3:48 AM Asian markets plunge on fears of financial crisis contagion: Nikkei -4.3%. Hang Seng -4.7%. Shanghai -5.2%. BSE -3.6%.
  • 12:00 AM Monday's economic calendar:
    9:00 Former Fed chief Volcker and vice-chief Ferguson speak on financial supervision
    11:30 Treasury's Ryan speaks at industry conference
    12:00 Fed's Evans speaks on economic outlook in Texas
    12:00 Fed's Fisher speaks on Fed, economy
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