Headlines...

NEW -> Contingent Buyer Assistance Program
The Chinese Central Bank says they are going to diversify out of $1.4 tril of US treasuries and into Euros. The USD didn't like it. It lost 41 points and is "stabilized" at 75.62. OUCH!
 
It sounds awful, but I don't think they indicated how much of the $1.4 tril they were going to change to Euros, just that they were going to diversify out of US treasuries and the total amount they have is $1.4 tril. The new immediately sent the Euro up and USD down.
 
<a href="http://www.nytimes.com/2007/11/07/business/07fed.html?ref=business">Further resistance at the Fed.</a>





<p><em>In an unusually blunt interview, the president of the Federal Reserve Bank of Philadelphia said he already expected growth to slow to an annual pace of 1.5 percent or less. But he said he would not support another rate cut unless the slowdown appeared to be even sharper than that.</em></p>

<p><em>Charles I. Plosser, president of the Philadelphia Fed, said he “would not be surprised” if fourth-quarter growth was 1 percent to 1.5 percent. “That’s already built into my forecast,” Mr. Plosser said Monday in his office. “The key here is that growth would have to be less than the forecast to cut rates again.” </em></p>

<p><em>Few other Fed officials have spoken as bluntly as Mr. Plosser, who is considered among the Fed’s more hawkish policy makers. Still, analysts say he is not alone in his views.</em></p>

I wouldn't worry about growth slowing. As long as they keep using the PCE deflater, that excludes soaring oil, then the GDP will continue to defy all estimates.
 
<p>Wait until the headlines in April If it gets cold back east before Thanksgiving, consumers will choke on their heating bills. Christmas may hold up, but suspect a lot of retailers are going to be disappointed. Is Best Buy going to make record earnings on the sales of large screen LCDs this year? I doubt it.</p>
 
<p>From credit crunch to oil supply crunch...</p>

<p>LONDON, Nov. 7 — A leading international energy agency today urged oil-producing countries to replenish crude oil inventories in light of a record oil price.In unusually urgent tones, the International Energy Agency warned that demand for oil imports by China and India will almost quadruple by 2030 and could create a supply “crunch” as soon as 2015 if oil producers do not step up production, energy efficiency fails to improve and demand from the two countries is not dampened. <a href="http://www.nytimes.com/2007/11/07/business/07cnd-energy.html?_r=1&oref=slogin">Linky</a></p>
 
The last time the market fell over 200 points Helicoper Ben injected liquidity - and lots of it. Now that the problem with stock market is the devaluation of the dollar, what does Ben do?
 
<p>How many times do you think Paulson has said that he is committed to a strong dollar?</p>

<p>Either he is a complete and total liar or he is an abject failure.</p>
 
<p>More from Schiff. . .</p>

<p>I am so tired of commenting about the anti-Schiff "experts" now. . . Charles Paine is such a shill. . .the dollar is okay because we buy stuff in America. I do not know what to say about that anymore.</p>

<p><a href="http://www.europac.net/Schiff-FBN-11-6-07_lg.asp">www.europac.net/Schiff-FBN-11-6-07_lg.asp</a></p>

<p>Good article about the outcry of a "bailout"</p>

<p><a href="http://biz.yahoo.com/cnnm/071105/110107_countrywide_bail_out_bashers.html?.v=3&.pf=loans">biz.yahoo.com/cnnm/071105/110107_countrywide_bail_out_bashers.html</a></p>
 
IrvineCommuter:





It's funny, even though these people are still largely delusional, for some reason I picked up on a bit of a change in their tone and attitude this week. Particularly from that Pat lady and that prick that keeps calling it the "Peter Schiff show."





Where they were just flat denying two months ago it seems like their starting to begrudgingly agree a little.
 
<p>I am listening/watching to the Congressional hearing involving Bernake this morning and I am waiting for Bernake to 1) walk out of the room or 2) jump up and kill all the politicians with their self-serving and ignorant statements.</p>
 
<p>The featured story on the msn.com homepage:</p>

<p>Foreclosures up nearly 100%</p>

<p>http://realestate.msn.com/buying/Article2.aspx?cp-documentid=5658441&GT1=10632</p>
 
<p><strong>WASHINGTON (MarketWatch) -- The outstanding level of asset-backed commercial paper fell by $29.5 billion, or 3.4%, in the week ending Wednesday, the biggest decline in nine weeks, the Federal Reserve reported Thursday. </strong></p>

<p> Outstanding asset-backed paper has fallen 13 weeks in a row, for a total drop of $338 billion, or 29%, to $845 billion. </p>

<p> Asset-backed commercial paper are short-term loans backed by assets such as mortgages, credit cards or other receivables. </p>

<p> In August, investors began to refuse to roll over maturity asset-backed securities, forcing the issuers to turn to banks for their funding. This, in turn, is putting more pressure on banks' balance sheets. </p>

<p> The most recent decline shows that parts of the credit markets are still shrinking, three months after the crisis erupted. </p>

<p> The larger market for commercial paper fell by $15.6 billion, or 0.8%, to $1.87 trillion in the week ending Wednesday. It's the first decline in the broader market in six weeks. The drop was driven entirely by the fall in asset-backed paper, which represents about 45% of the total market. </p>

<p>Paper issued by nonfinancial corporations rose by $2.9 billion to $173 billion. Paper issued by financial corporations rose by $10.9 billion to $835 billion.</p>
 
<p><a href="http://money.cnn.com/2007/11/08/news/companies/toll_brothers/index.htm?postversion=2007110806">Toll Brothers sales sharply lower in early financial report - Nov. 8, 2007</a></p>

<p>Also.....</p>

<p>Credit rating agency Moody's downgraded the debt of Pulte, Centex and <a href="http://money.cnn.com/quote/quote.html?symb=LEN&source=story_quote_link">Lennar</a> (<a href="http://money.cnn.com/quote/chart/chart.html?symb=LEN&source=story_charts_link">Charts</a>, <a href="http://money.cnn.com/magazines/fortune/fortune500/2007/snapshots/781.html?source=story_f500_link">Fortune 500</a>), the nation's No. 1 builder in terms of revenue, to junk bond status. <a href="http://money.cnn.com/2007/11/08/news/companies/toll_brothers/index.htm?postversion=2007110806#TOP"><img height="7" alt="Top of page" width="7" border="0" src="http://i.cnn.net/money/images/bug.gif" /></a></p>

<p></p>
 
<p>Woke up this morning, got dressed, came to work, had my coffee and oatmeal and saw the Dow go down 170 points and counting. . . ho hum . . .</p>

<p>Oh yeah Wachovia lost 1.1 billion dollars in ONE MONTH!!!! How do you lose 1.1 billion a month. . .I was not even sure that was physically possible. That is about $347,000 a day and about $14,700 a hour. </p>

<p><a href="http://biz.yahoo.com/ap/071109/wachovia_writedowns.html">biz.yahoo.com/ap/071109/wachovia_writedowns.html</a></p>

<p>"As of Sept. 30, Wachovia had $1.8 billion in CDO exposure; after the latest writedowns, the exposure is now $676 million. </p>

<p>CDOs are complex instruments that combine slices of different kind of risk. CDOs are often backed, in part, by subprime mortgages -- loans given to customers with poor credit history. As those mortgages have increasingly defaulted, the value of the CDOs has plummeted. </p>

<p>Wachovia has an additional $2.1 billion of exposure to more traditional subprime mortgage-backed bonds. The value of those holdings remained steady in October as hedging strategies offset losses."</p>

<p>So, CDOs are basically worthless and Wachovia still has another $2.1 billion on the table. . .fun</p>

<p>B of A is coming up later today. . . I wonder what that report is going to look like.</p>
 
<p><em>How do you lose 1.1 billion a month. . .I was not even sure that was physically possible. That is about $347,000 a day and about $14,700 a hour.</em></p>

<p>Is that the new math they're teaching in public school? I get $33 <strong>Million </strong>a day and $1.47 <strong>Milllion PER HOUR.</strong></p>

<p>I wonder if they consider that the infamous, hemorrhaging cash.</p>
 
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