WaPo: Obama Team helping Treasury get access to TARP Part Deux…

WaPo is reporting that the Obama Transition team is accompanying Treasury officials to Capitol Hill to ask Congress for access to the second tranche of the TARP funds- an additional 350 billion. Conflicting reports yesterday from Bloomberg cited Chris Dodd D-CT of the Senate Banking Cmte indicating he was opposed to giving access to the second tranche to Paulson. If they are making a move for the second tranche, Congress may be able to enact restrictions on the use of the funds..

Hank is Under Pressure and I want HOLC HOLC baby..

Everyone together now: We want HOLC, We want HOLC, We want HOLC (If you aren’t familiar with HOLC, see Hillary Clinton’s WSJ OpEd of 9/25/08).

WaPo reports:

…President-elect Barack Obama’s transition team has agreed to accompany Treasury Department officials to meet with Capitol Hill leaders to help the Bush administration gain access to the second half of the $700 billion financial rescue package, government sources familiar with the matter said.

(more…)

December 5, 2008. Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Big 3, Cabinet, Economy, Entertainment, FDIC, Finance, Foreclosures, Hillary Clinton, Housing, Labor Department, Obama Administration, Politics, Popular Culture, TARP, Unemployment Statistics, Wall St. 3 comments.

Market Roundup: Stocks Pop as Hartford Raises Outlook…

Dow on a tear up 259 to 8635; NAS up 63 to 1509 and S&P up 30 to 876 at the close..

The Hartford Financial Group earnings outlook turned the markets around and brought the rest of the insurers with it. Hartford up over 100% on the day..

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From Bloomberg:

…Hartford jumped a record 101 percent to $14.50 after the insurer raised its full-year operating profit forecast and said the capital outlook at its insurance subsidiaries is “strong.” The company’s operating businesses are “performing well, particularly in light of the challenging markets,” Chief Executive Officer Ramani Ayer said.

Insurers comprised eight of the top 10 gains in the S&P 500. Prudential rallied 32 percent to $27.93, MetLife gained 16 percent to $29.12 and Genworth Financial Inc. jumped 33 percent to $1.71.

-snip-

Hartford, Prudential, MetLife, Lincoln National Corp. and money manager Ameriprise Financial Inc. would benefit if the National Association of Insurance Commissioners, which begins a four-day meeting today, opts to relax capital requirements for managers of variable annuities, UBS’s Andrew Kligerman wrote in a report today. The association is likely to reach a decision by year-end and could announce one as early as Dec. 9, Kligerman said.

The S&P 500 Financials Index added 6.1 percent for the steepest advance among 10 industry groups, as insurance companies climbed 10 percent collectively….

But don’t get too comfortable with the pop, the market fundamentals are deteriorating with the labor markets which have not seen their worst numbers yet, and earnings for the 4Q have not been brought down to a reasonable level yet by analysts IMO..

…“We’re looking at a pretty ugly economic outlook, but an awful lot of that is being reflected” in stock prices, Leo Grohowski, chief investment officer at Bank of New York Mellon Wealth Management, which oversees $158 billion, said on Bloomberg Television…

-snip-

The S&P 500, which has plunged 41 percent in 2008, is headed for its worst year since 1931 after the collapse of the subprime mortgage market reduced average profits for five consecutive quarters. Still, the benchmark index for U.S. equities has rebounded 12 percent from its 11-year low on Nov. 20. The recovery was fueled by speculation the Federal Reserve will cut interest rates and Congress will pass another economic stimulus…

I haven’t seen what I am looking for yet: C-A-P-I-T-U-L-A-T-I-O-N.  The total utterly desolate day the markets throw their hands up and sell in despair. Capitulaaation is makin’ me wait….For now it looks as though the markets are back to bouncing sharply on any news, other than playing the .VIX it’s too hot for me.

Consider that consumer credit FELL 3.54 Billion in October, compared to an expected rise of 2 billion.

The 10 yr is still dropping in yield!! Yielding 2.68% right now…Treasury is still floating trial balloons on moving to lower mortgage rates to 4.5%..watch here

On another note the BoA/Merrill merger was approved by both companies’ sharelholders today (including moi), hip hip hooray! I hope the brand lives on.

December 5, 2008. Tags: , , , , , , , , , , . Economy, Housing, Labor Department, TARP, Unemployment Statistics, Wall St. 3 comments.

UPDATE: Foreclosures Rise…November Jobs Report In….Shocker over 500,000 jobs lost..

UPDATE 3: 10:00am EST: And the hits just keep on comin’. MBA reports total loans in foreclosure at end of 3Q rose to 2.97%, delinquent loans rose to 6.99%. This means 10% of ALL home loans in the US are now delinquent or in foreclosure. As the job losses roll over, Diana Olick of CNBC notes that this is less a subprime ARM issue and now more an overall economic downturn and high unemployment issue….gee I have an idea, IMPLEMENT THE FDIC PLAN!!..DOW now down 160….

UPDATE 2 9:50am EST: DOW down 100. The BIG 3 are about to begin testimony before the House Financial Services Cmte. Barney Frank, D-MA, opening stmt was spot-on and covered the ‘disaster’ a bankruptcy with the BIG3 ceasing to pay their creditors, would be in the current economic situation, He made a point of discussing the labor statistics. I notice Spencer Bachus R-Al, the senior minority seat on the panel is ALSO from Alabama, like Shelby on the Senate Banking CMTE,  Alabama has LOTS of foreign auto manufacturers, let’s hope they get beyond that and look at the entire economy…watch it live on CSPAN now here

UPDATE: 8:30 am EST: The numbers are coming in now..

Rick Santelli reports…

It’s brutal, for the month of November new jobless claims are 533,000 (the largest drop since 1974). The unemployment rate is 6.7%..

September’s jobless numbers revised downward, what was reported as a loss of 284,000 jobs now revised to show an actual loss of nearly double that, 403,000…

October nonfarm payrolls revised to a loss of 320,000 from an earlier report of down 240,000..

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by marvinsdad Creative Commons - Attribution

Numbers to be released at 8:30am EST, at times like this I wish we knew who the incoming Labor Secretary was so the street could get a boost from a statement of reassurance on plans for future employment….

The dollar has been falling against the Yen and the Euro ahead of the jobs report, coupled with the ECB (.75! ) and BoE  (1.00) rate cuts yesterday,  currency traders would no doubt remind us that in a global recession the US dollar will still do well despite our current economic woes in the US.  Bloomberg on expectations for the jobs number and the dollar trade ahead of its release:

…U.S. payrolls shrank by 333,000 workers in November after a drop of 240,000 in the previous month, according to the median forecast of 73 economists surveyed by Bloomberg News. The jobless rate jumped to 6.8 percent, the highest level in 15 years, a separate survey showed. The Labor Department will release the report at 8:30 a.m. in Washington.

“Some are selling the dollar ahead of the payroll report,” said Brian Dolan, chief currency strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey. “You have a perfect storm building for the dollar.”

I repeat it is insane to play with the economic recovery and labor markets by letting GM or Ford go under right now..forcing a merger on privately owned Chrysler to publicly owned GM raises all sorts of issues, but if one has to fail to let the other two live, I say Chrysler should go (may my Jeep live on as it did after the end of American Motors). Ford is in good shape and GM is too big with the parts suppliers to go down in this labor market..

The BIG 3 are in front of the House this morning, with these job numbers I am hoping they have a better plan than letting them go through an immediate prepackaged bankruptcy. The ole Real Estate saw: location, location, location is now jobs, jobs, jobs.

No housing recovery will takeoff with rapidly rising unemployment, and what would be a gradual increase to a high of perhaps 8.5% in unemployment by the end of 09 as we enter the peak and begin to recover, could be twice that in half as much time if we let the BIG 3 go down without a fight…

December 5, 2008. Tags: , , , , , , , , , , , , , , , , , . Big 3, Cabinet, Economy, FDIC, Film, Finance, Foreclosures, Housing, Labor Department, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. 6 comments.

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