Review the US econonmy

1. The optimism is stemming in US economy by virtue of the statement of Former Federal Reserve chairman Greenspan who says that chances of recession in U.S. has receded but it still remains above 50% and also states that probability of a severe recession has come down markedly.

2. Greenspan estimates that house prices is likely to fall by more than 10 percent from their February levels.ar

Oil eases below USD 124 per barrel

Singapore, May 13: World oil prices on Tuesday eased further, trading below USD 124 a barrel as a firmer dollar encouraged profit-taking in a market that remains well-supported, analysts said.

New York's main oil futures contract, light sweet crude for June delivery, was 37 cents lower at USD 123.86 from USD 124.23 at the close of trading in New York yesterday.

More Detail

Oil price hits record USD 115

London, April 17: The price of New York oil on Wednesday struck a historic peak at 114.50 dollars, winning support as the US currency tumbled to an all-time low against the euro, traders said.

Later Wednesday, New York`s main oil contract, light sweet crude for delivery in May, stood at 114.20 dollars a barrel, up 41 cents on Tuesday`s close.

London`s Brent North Sea crude for June struck its own record high of 112.35 dollars on Wednesday. It later stood at 111.96 dollars, up 38 cents.

"It`s very much the dollar that`s (behind) the increase," said MF Global analyst Robert Laughlin.

In the foreign exchange market, the European single currency rocketed to a record 1.5968 dollars on Wednesday after official data showed annual inflation across the eurozone had hit an all-time peak.

Inflation in the 15 nations sharing the euro jumped to an annual rate of 3.6 percent in March, the highest since the launch of the European single currency in 1999.

The weak dollar encourages demand for dollar-priced goods like crude which become cheaper for buyers using stronger foreign currencies, traders said.

"Crude oil is advancing now towards the target of 115 dollars," said Petromatrix analyst Olivier Jakob.

This week, oil prices scaled historic heights, breaking through 114 dollars late Tuesday as investment demand was also driven by widespread concerns over tightening world energy supplies, analysts said.

Traders will focus later Wednesday on a crucial inventories report in key energy consumer the United States.

Analysts said recent price gains were underpinned by expectations that the inventory report would show further declines US in gasoline (petrol) stockpiles.

Victor Shum, senior principal at Purvin and Gertz energy consultancy in Singapore, said oil prices would continue to rally.

"The market has generally ignored bearish news (such as forecasts of slower demand) and focused on the bullish," Shum said, suggesting that the US report would likely show a fall in motor fuel inventories.

Recent production stoppages have also stoked supply worries but the reopening of seveal facilities in Mexico on Tuesday eased those concerns, analysts said.

Mexico said Monday it had closed four export terminals due to bad weather while oil giant Shell said shipments through its 1.1 million-barrel-per-day Calpine pipeline in the southern United States had been temporarily disrupted.

Reports also emerged of minor supply outages in Nigeria.

"The physical oil market appears tight and appears highly sensitive to news of any supply interruption," said Fairfax analyst John Mayer.

"Further supply issues are expected in Nigeria and other difficult areas for the industry."

Bureau Report

Crude Oil Spikes over $100 a Barrel

Daily Market Commentary for February 19, 2008 from Smartsharemarket.blogspot.Com

At the closing bell on the Stock Exchange, here is how the major indices ended the session on the U.S. Markets:

DOW (Dow Jones Industrial Average) loss of 10.99 points on the day to end the session at 12,337.22

NYSE (New York Stock Exchange) gain of 52.28 points to end the session at 9,023.04

NASDAQ loss of 15.60 points for a close at 2,306.20

S&P 500 loss of 1.21 points for a close at 1,348.78

RUSSELL 2000 gain of 0.82 points to close at 702.34

FTSE All-World ex-U.S. gain of 2.26 points to close at 241.33

FTSE RAFI 1000 loss of 2.20 points to close at 5,555.68

BEL 20 gain of 103.45 points to close at 3,766.23

CAC 40 gain of 114.04 points to close at 4,885.83

FTSE100 gain of 179.3 points to close at 5,966.90

NIKKEI 225 gain of 135.3 points to close at 13,757.90

On the NYSE today, advancers came in at 1,823 decliners totaled 1,349; unchanged came in at 74; new highs came in at 46 and new lows came in at 41. Momentum stocks traded by active Day Traders on the NYSE today: CME Group, Incorporated (CME) shed 6.97 points with a high on the day of $533.10, a low of $514.60 for a closing price at $533.10; Transocean, Incorporated (RIG) gained 0.58 points with a high on the day of $132.00, a low of $128.79 for a closing price at $129.65; CONSOL Energy Incorporated (CNX) gained 3.57 points with a high on the day of $79.80, a low of $76.31 for a closing price at $78.65; Petroleo Brasileiro (PBR) gained 3.21 points with a high on the day of $120.54, a low of $116.86 for a closing price at $117.66; Uniao de Bancos Brasileiros S.A. (Unibanco) (UBB) gained 4.14 points with a high on the day of $133.41, a low of $129.79 for a closing price at $130.51; Holly Corporation (HOC) gained 5.81 points with a high on the day of $53.91, a low of $49.99 for a closing price at $53.31; BlackRock, Incorporated (BLK) shed 7.42 points with a high on the day of $199.23, a low of $180.17 for a closing price at $188.36; Siemens AG (SI) gained 2.11 points with a high on the day of $133.51, a low of $130.80 for a closing price at $131.40; Monsanto Corporation (MON) gained 2.52 points with a high on the day of $119.99, a low of $117.02 for a closing price at $117.87; Mosaic Corporation (MOS) gained 6.18 points with a high on the day of $111.73, a low of $105.55 for a closing price at $109.55; Cleveland-Cliffs Incorporated (CLF) gained 4.70 points with a high on the day of $126.27, a low of $120.14 for a closing price at $122.26; Best Buy Co. Incorporated (BBY) shed 0.79 points with a high on the day of $45.10, a low of $43.41 for a closing price at $43.82; The Bear Stearns Companies, Incorporated (BSC) shed 2.77 points with a high on the day of $83.50, a low of $78.90 for a closing price at $80.02; Deere & Company (DE) shed 1.51 points with a high on the day of $86.34, a low of $82.36 for a closing price at $83.49; InterContinental Exchange, Incorporated (ICE) shed 4.78 points with a high on the day of $135.43, a low of $127.28 for a closing price at $127.58; Suntech Power Holdings Corporation Limited (STP) shed 2.61 points with a high on the day of $50.30, a low of $44.90 for a closing price at $45.89; ITT Educational Services Incorporated (ESI) shed 4.43 points with a high on the day of $71.23, a low of $66.04 for a closing price at $66.42; Goldman Sachs Group Incorporated (GS) shed 4.61 points with a high on the day of $181.37, a low of $172.68 for a closing price at $173.80.

On the NASDAQ today, advanced totaled 1,408; decliners totaled 1,562; unchanged came in at 136; new highs came in at 21 and new lows came in at 140. Momentum stocks traded by active Day Traders on the NASDAQ today: First Solar, Incorporated (FSLR) shed 7.45 points with a high on the day of $220.80, a low of $210.02 for a closing price at $211.94; Baidu.com Incorporated (BIDU) shed 12.35 points with a high on the day of $266.67, a low of $244.50 for a closing price at $246.75; Deckers Outdoor Corporation (DECK) gained 4.77 points with a high on the day of $121.00, a low of $118.41 for a closing price at $119.15; Google Incorporated (GOOG) shed 20.69 points with a high on the day of $535.06, a low of $506.50 for a closing price at $508.95; SunPower Corporation (SPWR) shed 3.47 points with a high on the day of $82.38, a low of $75.14 for a closing price at $75.97; Priceline.com Incorporated (PCLN) shed 1.25 points with a high on the day of $125.73, a low of $120.22 for a closing price at $122.61; Onyx Pharmaceuticals Incorporated (ONXX) shed 11.89 points with a high on the day of $37.23, a low of $32.23 for a closing price at $33.09; United Stationers Incorporated (USTR) shed 5.15 points with a high on the day of $57.81, a low of $51.48 for a closing price at $51.99; Amedisys Incorporated (AMED) gained 2.14 points with a high on the day of $47.67, a low of $44.01 for a closing price at $45.50; Garmin Limited (GRMN) gained 3.15 points with a high on the day of $70.44, a low of $57.51 for a closing price at $69.50; Intuitive Surgical, Incorporated (ISRG) shed 12.77 points with a high on the day of $309.44, a low of $287.12 for a closing price at $29.50; Huron Consulting Group Incorporated (HURN) shed 7.53 points with a high on the day of $65.18, a low of $55.91 for a closing price at $56.03.

Statement by Secretary Henry M. Paulson, Jr. on New Private Sector Effort to Reach Homeowners Facing Foreclosure: Washington, DC - Good morning. Thank you, Secretary Jackson, for joining us. We are going to provide an update on the HOPE NOW alliance's efforts to help struggling homeowners and as Floyd Robinson of Bank of America, speaking on behalf of six leading mortgage servicers, will announce an additional, important effort targeting those facing the greatest, immediate risk of losing their home. When the HOPE NOW alliance was announced in October, we made clear that this would be an evolving private sector-led effort to help minimize the impact of the housing downturn on homeowners, neighborhoods and the U.S. economy. It is just one of many steps which the Bush Administration is encouraging as we work through this difficult period. Tomorrow, President Bush will also sign into law an economic growth package that will, through rebate payments to over 130 million Americans and tax incentives to businesses, provide a temporary, meaningful boost to our economy as we weather the housing correction. Today, six of the largest servicers, who represent 50 percent of the mortgage market, are announcing Project Lifeline, a targeted outreach to homeowners' 90-days or more delinquent that may lead to a "pause" in the foreclosure process. This is an important new initiative, targeted to reach not only subprime borrowers, but all 90-day delinquent homeowners nationwide with a step-by-step approach to find individual solutions to individual problems. We encourage all HOPE NOW servicers to adopt this new program. Project Lifeline is aimed at homeowners who face a real risk of losing their home, but have not yet addressed the problem. Perhaps they are hoping to find a way to get current on their mortgage payments, or perhaps they don't think any solution is possible. For whatever reason they have not yet taken action; our hope is that today's announcement will reach them, and they will reach out immediately for help – especially now that the foreclosure process is upon them. Of course, there will be homeowners who still take no action, and some will simply walk away from their mortgage particularly those borrowers who put little or no money down and whose mortgage exceeds their home value. No program can bring every struggling borrower into the counseling and evaluation process, and we cannot help those who choose not to honor their obligations. But Project Lifeline has the potential to offer new solutions to responsible, able homeowners who want to keep their homes. Overall, the HOPE NOW alliance is striving to help as many able but struggling homeowners as possible whether prime, alt-a or subprime borrowers. Clearly there is much more work to do, but progress has been made since the formation of HOPE NOW just over four months ago. In those four months: HOPE NOW membership has grown from 60 percent of the subprime mortgage servicer market to 94 percent; today, 25 servicers are represented; The nationwide hotline (888-995-HOPE) has been publicized and expanded; daily call volume has increased from 625 to 4,000; Servicers and investors are now providing funds for counseling; previously, only government and foundations provided funding; In the first three months, HOPE NOW servicers sent 775,000 letters to at-risk homeowners; early results show a 16 percent response rate. Homeowners who had previously avoided contact are now calling for help, and over 200,000 additional letters are being sent every month; Today, all HOPE NOW servicers are contacting subprime borrowers 120 days before their interest rate resets; In the second half of 2007, the industry assisted an estimated 869,000 homeowners and, coincident with the formation of HOPE NOW, the loan modification rate in the fourth quarter doubled over the rate in the third quarter; Secretary Jackson will also update us on FHA's progress in moving borrowers into affordable, long-term mortgages. These results are before implementation of the American Securitization Forum's (ASF) fast-track re-financing and loan modification framework. Servicers began implementing that plan in January after resolving a number of important issues, including receiving accounting guidance from the SEC on FAS 140 on January 8. We have a lot of work ahead of us; these efforts can succeed only if they are pursued industry wide. I am particularly focused on two important steps. First, I am eager to see the ASF framework and Project Lifeline adopted by all servicers. If the ASF plan works the way it is intended to subprime borrowers who have made payments on-time at the initial rate and who want to stay in their homes but can't afford the higher rate should be fast-tracked into a modification which in many cases will be an interest rate freeze of at least five years or be fast-tracked into an affordable refinancing. Through Project Lifeline, those borrowers facing immediate foreclosure may be able to find individual solutions. Second, I will be working closely with the HOPE NOW alliance on their plans for reporting progress. It is critical that they release monthly information, within 30 days of the end of the month, so that we can monitor progress and adapt as needed. Industry will be updating us throughout the month. As I have said many times, the HOPE NOW alliance is an evolving effort. As our economy works through this difficult period, we will look for additional opportunities to try to avoid preventable foreclosures. However, none of these efforts are a silver bullet that will undo the excesses of the past years, nor are they designed to bail out real estate speculators or those who committed fraud during the mortgage process. These efforts are to help American families who both want to and can, through a loan modification or re-financing, stay in their homes. I believe that our economy will continue to grow, although at a slower pace in the coming quarters, and that it remains fundamentally diverse and resilient. I congratulate the HOPE NOW alliance for your flexibility and your hard work. You are helping our economy and our families, and you are also demonstrating the very resiliency which I spoke of a moment ago. Thank you.

Commodities Markets
The trend was higher across the board today for the Energy Sector: Light crude moved sharply higher today by $4.51 to close at a record high at $100.01 a barrel; Heating Oil moved higher today by $0.12 to close at $2.74 a gallon; Natural Gas moved higher today by $0.33 to close at $9.00 per million BTU and Unleaded Gas moved higher today by $0.11 to close at $2.60 a gallon.

Metals Markets ended the session higher across the board today: Gold moved sharply higher today by $23.70 to close at $929.80 a Troy ounce; Silver moved higher today by $0.39 to close at $17.51 per Troy ounce; Platinum moved strongly higher today by $89.40 to close at $2,153.10 per Troy ounce and Copper closed higher by $0.19 to close at $3.73 per pound.

On the Livestock and Meat Markets, the trend was mostly higher across the board today: Lean Hogs ended the day higher by $0.33 to close at $64.53; Pork Bellies ended the day higher by $1.23 to close at $95.53; Live Cattle ended the day lower by $0.05 to close at $93.93 and Feeder Cattle ended the day higher by $0.28 at $104.90.

Other Commodities: Corn ended the day higher by $5.50 at $532.50 and Soybeans moved sharply higher today by $26.50 to end the session at $1,417.00.

Bonds were lower across the board today: 2 year bond moved lower by 10/32 to close at 100 2/32; 5 year bond moved lower by 26/32 to close at 99 22/32 today; 10 year bond moved lower by 30/32 to close at 96 23/32 and the 30 year bond moved lower by 1 16/32 to close at 95 5/32 on the day.

The e-mini Dow ended the session today at 12,344 with a loss of 6 points on the trading session. The total Dow Exchange Volume for the day came in at 138,820 which are comprised of Electronic, Open Auction and Cash Exchange. Traders should review workshops available at the CBOT (Chicago Board of Trade) Educational in-person seminars schedules available on CBOT (Chicago Board of Trade) website.

The end of day results for the CBOT (Chicago Board of Trade) which is comprised of the total Exchange Volume for Futures and Options (EVFO) including Electronic, Open Auction and Cash Exchange ended the day at 3,714,918; Open Interest for Futures moved lower by 55,782 points to close at 10,790,428; the Open Interest for Options moved higher by 94,313 points to close at 10,573,553 and the Cleared Only closed higher by 335 points to close at 26,634 for a total Open Interest on the day of 21,390,615 for a total Change on the day with a gain of 38,866 points.

Ref : www.equitygroups.com

Federal Reserve Cut Half Point

Half Point Cut
by Jeffrey Cane Jan 30 2008
As economy grinds to a halt, what's next for the Fed?

Federal Reserve policymakers lowered their benchmark interest rate by a half point, to 3 percent, pointing to "a deepening of the housing contraction as well as some softening in labor markets."

"Financial markets remain under considerable stress, and credit has tightened further for some businesses and households," the Fed said.

The statement left the door open to further rate cuts if needed, with the Fed saying it "will act in a timely manner" if it sees further risks to economic growth."

Stocks, which had modest losses before the announcement, turned sharply higher. The Dow Jones industrial average was up 1 percent minutes after the Fed cut. Treasury prices and the dollar weakened.

The move comes eight days after the Fed surprised investors with a three-quarter-point cut, citing "a weakening of the economic outlook and increasing downside risks to growth." It was the first rate cut to take place between meetings of Fed policymakers since September 2001, when the central bank acted in the aftermath of the terrorist attacks.

The January rate cuts represent the most aggressive action by the central bank since 1990. (See a chart of the Fed's benchmark rate here.)

Still, as Greg Ip of the Wall Street Journal points out, the Fed's statement serves as a reminder of "how much it has already done" as well as a declaration that it stands ready to act again.

"Today’s policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity," the Fed said today.

Today's economic data underscored the need for aggressive action. The Commerce Department reported today that the economy grew at an annual pace of 0.6 percent in the last three months of 2007, the slowest growth in five years, when the economy was just emerging from a recession. The advance gross domestic product estimate was nearly half analysts' forecasts. In the third quarter, the economy grew at a 4.9 percent annual pace.

"The G.D.P. hit stall speed," wrote Joseph Brusuelas, chief U.S. economist at IDEAglobal, according to MarketWatch.

Floyd Norris of the New York Times notes on his blog that the G.D.P. report showed that spending on nondurable consumer products other than food and energy was down in the quarter, after adjusting for inflation. "Put that down as another recession warning," he says.

There was one dissent to today's rate cut: Richard W. Fisher, president of the Federal Reserve Bank of Dallas, who preferred no change in the target for the federal funds rate at this meeting.

What next for the Fed? The market is already pricing in another quarter point cut when Fed policymakers meet next, on March 18. Some see the rate going as low as 2.25 or even 2 percent by the end of the year.

For the time being, however, as the Economist's View blog says, "Hopefully, though, we can now all catch our breaths for a little while and get a better assessment of exactly where we are."

Fed says was unaware of SocGen losses

Washington/Chicago, Jan 25: The Federal Reserve, when it decided on an emergency interest rate cut this week, was unaware of a scandal involving a rogue trader that led to about USD 7 billion in losses at France's Societe Generale, a Fed official said on Thursday.

Still, the heavy losses at SocGen, France's second-biggest bank, dealt a blow to the Fed's credibility in the eyes of some financial market participants, who wondered if policy-makers blundered in making the biggest US interest rate cut in a generation on Tuesday.

"Their panicky rate cut was not to insure the smooth functioning of the markets, but rather, to guarantee prices," said Barry Ritholtz, a market analyst at Ritholtz Research & Analytics.

"We quickly learn what sheer folly and utter irresponsibility it is for the Fed to use its limited ammunition to intervene in equity prices," Ritholtz wrote on his blog, The Big Picture.

The US central bank on Tuesday morning stunned markets by slashing overnight borrowing costs by three-quarters of a percentage point, to 3.5 percent. The cut came a day after a global stocks rout and just a week ahead of the Fed's next scheduled policy meeting. US markets, closed on Monday for a holiday, were set to reopen when the Fed acted.

Initially, analysts attributed the swoon in global markets exclusively to worries about the possibility of a global meltdown triggered by mounting US economic problems. But on Thursday, after SocGen said it had tried to close out rogue positions on Monday, some analysts said the bank's sales may have played a big role in the day's sell-off.

The re-evaluation led traders to ratchet back expectations for another big rate reduction at the US central bank's January 29-30 policy meeting.

The SocGen blowup "suggests more big rate cuts near term might not be so necessary," said strategists at Action Economics.

The chances of a half-point rate cut, as implied by interest-rate futures prices, fell as low as 58 percent after being fully priced in late on Wednesday.

CHANGE IN RATE PATH?

Even though the losses at SocGen have come to light, the Fed official, who spoke on the condition of anonymity, said policy-makers remain comfortable with their decision to cut rates aggressively.

When policy-makers held an emergency video-conference on Monday night, they felt financial market volatility, including, but not limited to, broad stock market declines on Monday, reflected underlying concerns about the broad economy, the official said. They did not consider the volatility to be due to the problems of any single institution, the official added.

Policy-makers were clear at their meeting that the benchmark federal funds rate was higher than they wanted, the official said. The risks of waiting for the next scheduled policy meeting before acting outweighed the downside of any criticism the Fed might incur for an inter-meeting change that could be seen as a response to market events, the official added.

Fed officials were convinced the sizable rate cut so close to a scheduled meeting would make clear to markets the US central bank's willingness to address the most serious risks, the official said.

Ref: www.zeenews.com

NYSE agrees to acquire rival American stock exchange

New York, Jan 18: The New York Stock Exchange has agreed to buy the American Stock Exchange, ending a once intense rivalry that began in colonial times when brokers traded in outdoor markets.

Both exchanges have battled for corporate listings and bragging rights since the early 1900s, with their trading floors just a short walk away from each other in lower Manhattan. Newspapers around the US all listed the stock swings on the nation's two dominant markets, until investors began paying more attention in the 1990s to technology issues on the upstart NASDAQ stock market.

Their evolution took a very different path - with the big board forming NYSE Euronext to become the world's first trans-Atlantic exchange. The AMEX, unable to compete like it once did, began to focus on trading options and other financial products.

The AMEX, which once hosted the likes of big-name stocks such as the New York Times Co and the Washington Post Co, now trades generally smaller companies that are often too illiquid to meet the standards of bigger rivals.

NYSE Euronext said it would pay AMEX's seat-holders, which are generally members that trade at the exchange, USD 260 million in stock. In addition, they would receive more stock after the sale of the AMEX's landmark building on 86 trinity place - a land-marked art deco building it moved into in 1921 and that sits only blocks away from the World Trade Center site.

The deal will give NYSE Euronext a second US license for an option exchange. It would make the NYSE the no 3 US options market place. The NYSE has been looking to move further into the options business.

Ref : www.zeenews.com