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Wall Street Breakfast: Must-Know Newsby SA Editor Rachael Granby- Bank trio becomes duo. Wells Fargo (WFC) will become the largest U.S. bank by branches with its bid for Wachovia (WB), after Citigroup (C) withdrew from compromise negotiations late yesterday on concerns about the quality of some of Wachovia's assets. Wells Fargo, with a bid valued at $11.4B, expects the purchase to be completed by the end of the year, and denies it will have to absorb assets shakier than originally thought.
- Government considers next steps. As the financial crisis continues to worsen, the U.S. government is considering two dramatic steps to turn around, or at least slow, the damage: guaranteeing billions of dollars in bank debt and temporarily insuring all U.S. bank deposits. The moves, which would mark the government's most extensive intervention to date, are in discussion stages only.
- Credit stays frozen. As frozen credit markets refuse to thaw, the cost of default protection on corporate bonds reaches new global records amid investor concerns the credit crisis will trigger corporate failures as companies struggle to finance their businesses. Interbank lending remains limited, and borrowing from the Fed's expanded discount window continued its trend of setting new highs every week, as the total daily average rose to $420.2B vs. $367.8B last week.
- Oil demand withers. The International Energy Agency warned Friday worldwide oil demand...
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- An Outcry from Emerging and Developed Markets Alike by Jonathan O'Shaughnessy
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Oil Price- Oil Below $75: Increased Chance of OPEC Production Cuts by Money Morning
- Oil Down 48% from Highs by Bespoke Investment Group
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Economy- Long Term, Financials Look Good by Michael Filloon
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- Farewell Financial Bear Raids - Cramer's Mad Money (10/14/08) by SA Editor Joan Wickham
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Long Ideas- Utilities Beginning to Generate Interest for Longs by Joe Kunkle
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Short Ideas- Why Short Sellers Are the Heroes of Wall Street by Investment U
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- Jim Cramer's Picks -SampleBetter Choices - Cramer's Lightning Round (10/15/08)by SA Editor Rachael GranbyStocks discussed in the lightning round session of Jim Cramers Mad Money TV program,
Wednesday, October 15.Bullish Calls:Continental Resources (CLR) -- "This is a remarkable decline. All of the high quality ones are down so much, I can't go against it. This is where you pull the trigger.
3M (MMM) -- The moment this stock starts yielding 5%, I'm a buyer. Until then, keep your powder dry.Bearish Calls:Computer Sciences (CSC) -- This is a company that was going to be bought, but they passed up the chance. Now I don't want to buy it."Email continues...
Annaly Mortgage (NLY) -- I think this is a business model that needs to borrow money. Definitively do not buy."
Northrop Grumman (NOC) -- You can't own the defense stocks right now. If I had to own one, I'd look at Lockheed Martin (LMT) with its good dividend. - Stocks & Sectors -SampleSeeking Alpha - Stocks & SectorsInternet
- eBay: Q3 Looks Good but Q4 Guidance Disappoints by Greg Feirman
- Is Google Feeling Lucky? by Sam Gustin
- Why Today Could Suck for Tech by Kevin Maney
Media- A Triple Financial Whammy Afflicts Newspapers by Ken Doctor
- Three Years On, Buying MySpace Looks Like One of Murdoch's Smartest Bets by Erick Schonfeld
- How Will Arbitron Fare in This Market? by Sreeni Meka
Telecom- Ten Ways to Invest in Louisiana by Stockerblog
- Earnings Preview: Electro-Optical Engineering by theflyonthewall.com
- Shared Docks Via WiFi All the Rage by Dean Bubley
Financial- Switzerland Strengthens Its Banks; Short Interest Remains Low by Jessica Johnson
- Reality Bites As Stocks Continue To Collapse by The Mole
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- An Outcry from Emerging and Developed Markets Alike by Jonathan O'Shaughnessy
- USANA Health Sciences Inc. Q3 2008 Earnings Call Transcript
- Perfect World Announces Share Repurchase Program by Trader Mark
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India- Indian Economy Has Much to Cheer About by Equitymaster
- India: RBI Cuts Cash Reserve Ratio by Equitymaster
- India: Markets Continue Downward by Equitymaster
Japan- Sanyo Enters Thin-Film Market, Goes Up Against Sharp by Greentech Media
Asia- Four International Dividend Stocks to Watch by David Hunkar
Eastern Europe- Reality Bites As Stocks Continue To Collapse by The Mole
- Alternative Energy Investing -SampleSeeking Alpha - Alternative EnergyAlternative Energy
- Seven Stocks for an Impending Apocalypse by H.J. Huneycutt
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- Trina Solar Looks Good, Though Market Yawns by Trader Mark
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- Too Early To Buy Homebuilders ETF by Larry MacDonald
- Utilities Beginning to Generate Interest for Longs by Joe Kunkle
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New ETFs- First Trust Launches Infrastructure ETF with Global Reach by Index Universe
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Emerging Market ETFs- Brazil Is the Best of BRIC by Carl T. Delfeld
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US Market- An Outcry from Emerging and Developed Markets Alike by Jonathan O'Shaughnessy
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Housing & Real Estate- Too Early To Buy Homebuilders ETF by Larry MacDonald
- Another 'Root Cause' That Isn't: Tumbling Home Prices by Tim Iacono
Transcripts- TrueBlue, Inc. Q3 2008 Earnings Call Transcript
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ETF- Too Early To Buy Homebuilders ETF by Larry MacDonald
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Latest Comments3 Comments
Calling a Housing Bottom
The condition of offering cash for rent and the deal structure designed to best recover the principal put at-risk depends on the financial state of a bank and the state of the economy -- Efficiency of Money and change in buying power per unit of currency.
When banks suffer from weak financial condition, bankers must act most cautious and rent cash only to those with the highest demonstrated record to pay service on debt.
When the Efficiency of Money -- the ratio of money in circulation (notes, coins) to New Commerical Credit Opportunty -- falls Big Dollar Holders bet on claims to future resources.
When this happens, jobs disappear as businesses lack means to expand or maintain open transaction relationships.
Once jobs disappear potential Cash Renters lack a way to pay for Rented Cash (mortgage).
When buying power of the currency unit falls, folks must give up more claims on their time to foreigners for imports and locals for foodstuffs. When then value of time for workers fall, workers can apportion less money to pay on debt.
Calling a Housing Bottom
The condition of offering cash for rent and the deal structure designed to best recover the principal put at-risk depends on the financial state of a bank and the state of the economy -- Efficiency of Money and change in buying power per unit of currency.
When banks suffer from weak financial condition, bankers must act most cautious and rent cash only to those with the highest demonstrated record to pay service on debt.
When the Efficiency of Money -- the ratio of money in circulation (notes, coins) to New Commerical Credit Opportunty -- falls Big Dollar Holders bet on claims to future resources.
When this happens, jobs disappear as businesses lack means to expand or maintain open transaction relationships.
Once jobs disappear potential Cash Renters lack a way to pay for Rented Cash (mortgage).
nation's terms of trade is the ratio of what it must give up to get what it imports. The easiest way to understand the concept, at least for me, is to think of the number of hours of work necessary, at the average national hourly pay rate, to buy a barrel of oil – a real variable compared to another real variable
When buying power of the currency unit falls, folks must give up more claims on their time to foreigners for imports and locals for foodstuffs. When then value of time for workers fall, workers can apportion less money to pay on debt.
What Can Possibly Explain the Price of Oil?
Men swap commodities. Some call this swap an exchange. In truth, men swap rights, one right for another right. With oil and money, men swap the right of owning oil for the right of owning money.
All swaps must have one commodity exchanged for another. When one thing gets calculated in terms of another, we call this a ratio. The result of the ratio, we call it a value. When we use money as one commodity in the swap, we give another name to the word value -- PRICE.
The ratio of one commodity (oil) to another (money) expresses a value, which we call a price (of oil).
A rise in price means a change in the ratio has happened calculated at one time from being calculated at another time.
Only two ways can achieve a price rise:
[1] money rising quicker than oil
[2] oil falling quicker than money
Each year, a RECORD AMOUNT of oil gets pumped. Since the price (the value) of the ratio is rising, only one cause can be true -- a RISE IN MONEY quicker than a rise in oil.
Sellers sell to the highest bidder. When folks have more money bidding for a near fixed amount of oil (slightly growing in amount year-to-year), prices rise.
There isn't a global oil shortage. There's a GLOBAL GLUT of MONEY.
What caused the Global Glut of Money?
Money is the highest form of Credit and Credit is another word for Debt. Credit and Debt are other names for Capital.
As credit (=debt, =capital) grows for bad products that nobody wants, a collapse of trust follows. Deals get broken and folks walk away paying on debt. Yet, the money created for this debt stays in the pockets of some folks.
It is the default on credit (=debt, =capital) that causes problems. This increases money at a rate quicker than credit for good products, good invention.
When credit (debt) defaults rise, the paper money and coins issued go into the pockets of winners. These winners begin to bid up prices on existing things, typically commodities of energy, metals, food.
Why? Simply, these winners cannot find worthy investments to make, which would turn their notes and coins into capital paying a return.
Money flows into oil futures games because those with money cannot find other games worthy to play.