Stocks Dive 208 on Credit Problems

[bsrsharma]

rb_engineer,

The credit crunch, its impact on home buying, bankruptcies of mortgage lenders with attendent unemployment of thousands, distress among home builders etc., are all strong indicators of downturn. But when the largest low end retailer has problem meeting expectations, I think we are in severe distress. What you are seeing is the result of households running out of spendable cash flat out. Obviously, it will take a while to restore normal spending pattern again. Since consumer spending is 2/3 of economy, the jump from Wal-Mart’s distress to general Economic distress is pretty easy. I am fairly confident in predicting a recession before middle of 2008.

[CAwireman]

Stocks are basically flat on Wednesday at noon, Eastern
time (actually down 9 pts on the Dow).

Stocks Edge Up After Fed Adds Liquidity [??]
08/15/07 11:23 EDT
By MADLEN READ

NEW YORK (AP) – Stocks recovered some ground Wednesday, drawing some reassurance from the Federal Reserve’s announcement that it was adding more cash to the banking system.

The market changed course several times in early trading amid conflicting announcements from the New York Fed over its plans to make a repurchase agreement – in which it arranges to buy securities from dealers, who then deposit the money the Fed has paid them into commercial banks.

Ultimately, the Fed said it would buy $7 billion, following the Canadian central bank’s announcement that it has temporarily expanded the list of eligible collateral it will accept when it makes injections. Central banks worldwide have supplied billions of funds to banks over the past week to make cash available for lending and keep interest rates stable amid signs that credit was drying up.

Now, Wall Street is curious if the Fed will cut interest rates at its Sept. 18 meeting. On Wednesday, the Labor Department said its Consumer Price Index – a gauge of price inflation on food, energy and consumer products – rose 0.1 percent in July, meeting the consensus forecast of economists polled by Thomson Financial.

Price pressures have been keeping the Fed from lowering rates – a move that would free up more cash and that could trigger a rally in the Dow, which is now nearly 1,000 points below its record close in mid-July above 14,000.

“Yes, the market would probably move dramatically higher if they made a cut,” said Linda Duessel, market strategist at Federated Investors in Pittsburgh. “But I think it’s more prudent to allow this correction to continue to unfold. After all, we’re in the month of August and coming into September – historically, the weakest months of the year. The market has been in need of a correction.”

http://money.aol.com/marketnews/article

HiggyBaby

[CAwireman]

Stocks are basically flat on Wednesday at noon, Eastern
time (actually down 9 pts on the Dow).

Stocks Edge Up After Fed Adds Liquidity [??]
08/15/07 11:23 EDT
By MADLEN READ

NEW YORK (AP) – Stocks recovered some ground Wednesday, drawing some reassurance from the Federal Reserve’s announcement that it was adding more cash to the banking system.

The market changed course several times in early trading amid conflicting announcements from the New York Fed over its plans to make a repurchase agreement – in which it arranges to buy securities from dealers, who then deposit the money the Fed has paid them into commercial banks.

Ultimately, the Fed said it would buy $7 billion, following the Canadian central bank’s announcement that it has temporarily expanded the list of eligible collateral it will accept when it makes injections. Central banks worldwide have supplied billions of funds to banks over the past week to make cash available for lending and keep interest rates stable amid signs that credit was drying up.

Now, Wall Street is curious if the Fed will cut interest rates at its Sept. 18 meeting. On Wednesday, the Labor Department said its Consumer Price Index – a gauge of price inflation on food, energy and consumer products – rose 0.1 percent in July, meeting the consensus forecast of economists polled by Thomson Financial.

Price pressures have been keeping the Fed from lowering rates – a move that would free up more cash and that could trigger a rally in the Dow, which is now nearly 1,000 points below its record close in mid-July above 14,000.

“Yes, the market would probably move dramatically higher if they made a cut,” said Linda Duessel, market strategist at Federated Investors in Pittsburgh. “But I think it’s more prudent to allow this correction to continue to unfold. After all, we’re in the month of August and coming into September – historically, the weakest months of the year. The market has been in need of a correction.”

http://money.aol.com/marketnews/article

HiggyBaby

[CAwireman]

Stocks are basically flat on Wednesday at noon, Eastern
time (actually down 9 pts on the Dow).

Stocks Edge Up After Fed Adds Liquidity [??]
08/15/07 11:23 EDT
By MADLEN READ

NEW YORK (AP) – Stocks recovered some ground Wednesday, drawing some reassurance from the Federal Reserve’s announcement that it was adding more cash to the banking system.

The market changed course several times in early trading amid conflicting announcements from the New York Fed over its plans to make a repurchase agreement – in which it arranges to buy securities from dealers, who then deposit the money the Fed has paid them into commercial banks.

Ultimately, the Fed said it would buy $7 billion, following the Canadian central bank’s announcement that it has temporarily expanded the list of eligible collateral it will accept when it makes injections. Central banks worldwide have supplied billions of funds to banks over the past week to make cash available for lending and keep interest rates stable amid signs that credit was drying up.

Now, Wall Street is curious if the Fed will cut interest rates at its Sept. 18 meeting. On Wednesday, the Labor Department said its Consumer Price Index – a gauge of price inflation on food, energy and consumer products – rose 0.1 percent in July, meeting the consensus forecast of economists polled by Thomson Financial.

Price pressures have been keeping the Fed from lowering rates – a move that would free up more cash and that could trigger a rally in the Dow, which is now nearly 1,000 points below its record close in mid-July above 14,000.

“Yes, the market would probably move dramatically higher if they made a cut,” said Linda Duessel, market strategist at Federated Investors in Pittsburgh. “But I think it’s more prudent to allow this correction to continue to unfold. After all, we’re in the month of August and coming into September – historically, the weakest months of the year. The market has been in need of a correction.”

http://money.aol.com/marketnews/article

HiggyBaby

[rb_engineer]

bsrsharma,

Its not clear to me that Walmart’s troubles are caused by Walmart or the subprime mess. Their profits are shrinking which could mean that their costs are rising or they messed up with their pricing. Not sure they forecasted their sales. The point is gdp growth globally is >5%, how do you see this changing?

[rb_engineer]

bsrsharma,

Its not clear to me that Walmart’s troubles are caused by Walmart or the subprime mess. Their profits are shrinking which could mean that their costs are rising or they messed up with their pricing. Not sure they forecasted their sales. The point is gdp growth globally is >5%, how do you see this changing?

[rb_engineer]

bsrsharma,

Its not clear to me that Walmart’s troubles are caused by Walmart or the subprime mess. Their profits are shrinking which could mean that their costs are rising or they messed up with their pricing. Not sure they forecasted their sales. The point is gdp growth globally is >5%, how do you see this changing?

[bsrsharma]

About half the country is running on fumes. This is not some blip. These are some quotes:

“It’s a red flag,” said Jay Bryson, global economist at Wachovia. “If consumer spending starts to weaken, the overall outlook for economic growth will diminish.”

That, Wal-Mart executives said, is precisely what has begun to happen in its 4,000 United States stores over the last three months — even after the chain cut prices on 16,000 products this summer.

“Many customers are running out of money at the end of the month,” said H. Lee Scott Jr., the chief executive of Wal-Mart.

Mr. Scott said Wal-Mart’s shoppers, who generally earn less than $40,000 a household, are “under difficult pressure economically.”

He added that “the paycheck cycle is more pronounced now than ever before,” meaning that customers are left with little cash by the end of the month.

[bsrsharma]

About half the country is running on fumes. This is not some blip. These are some quotes:

“It’s a red flag,” said Jay Bryson, global economist at Wachovia. “If consumer spending starts to weaken, the overall outlook for economic growth will diminish.”

That, Wal-Mart executives said, is precisely what has begun to happen in its 4,000 United States stores over the last three months — even after the chain cut prices on 16,000 products this summer.

“Many customers are running out of money at the end of the month,” said H. Lee Scott Jr., the chief executive of Wal-Mart.

Mr. Scott said Wal-Mart’s shoppers, who generally earn less than $40,000 a household, are “under difficult pressure economically.”

He added that “the paycheck cycle is more pronounced now than ever before,” meaning that customers are left with little cash by the end of the month.

[bsrsharma]

About half the country is running on fumes. This is not some blip. These are some quotes:

“It’s a red flag,” said Jay Bryson, global economist at Wachovia. “If consumer spending starts to weaken, the overall outlook for economic growth will diminish.”

That, Wal-Mart executives said, is precisely what has begun to happen in its 4,000 United States stores over the last three months — even after the chain cut prices on 16,000 products this summer.

“Many customers are running out of money at the end of the month,” said H. Lee Scott Jr., the chief executive of Wal-Mart.

Mr. Scott said Wal-Mart’s shoppers, who generally earn less than $40,000 a household, are “under difficult pressure economically.”

He added that “the paycheck cycle is more pronounced now than ever before,” meaning that customers are left with little cash by the end of the month.

[Anonymous]

they should offer their customers payday loans so they can buy their stuff sooner, dontchathink?

[Anonymous]

they should offer their customers payday loans so they can buy their stuff sooner, dontchathink?

[Anonymous]

they should offer their customers payday loans so they can buy their stuff sooner, dontchathink?

[bsrsharma]

Don’t they all already do that sort of thing? Hold stuff for a while till you get money (I haven’t used it, so I don’t know)

[bsrsharma]

Don’t they all already do that sort of thing? Hold stuff for a while till you get money (I haven’t used it, so I don’t know)

[Author]

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