Monday, May 31, 2010
Sunday, May 30, 2010
Saturday, May 29, 2010
Top Ten Misconceptions About Fuel Economy
1. You have to drive a small car to get good fuel economy.
Advanced technologies like hybrid drivetrains, diesel engines, direct fuel injection, turbocharging, advanced transmissions, low rolling resistance tires and aerodynamic designs are allowing standard-sized vehicles to be very fuel efficient. For the 2010 model year, five of the top ten most efficient vehicles are midsized cars, with a midsized car taking the top spot.
2. Manual transmissions always get better fuel economy than automatics.
Advances in automatic transmissions have improved their efficiency to the point that the automatic version of a vehicle often gets the same or better fuel economy than the version with a manual transmission. For vehicles offered in both automatic and manual transmissions, consumers can easily compare fuel economy at http://www.fueleconomy.gov/feg/findacar.htm.
3. It takes more fuel to start a vehicle than it does to let it idle.
Modern fuel injected engines start very efficiently, especially when warmed up. Idling can use a quarter to a half gallon of fuel per hour — depending on your vehicle's engine size — costing you about 1 to 2 cents per minute. Turn off your engine when your vehicle is sitting still, except when you are waiting in traffic or waiting in a line where you would need to turn it on and off frequently. Restarting your engine too frequently can wear out your starter.
4. Vehicles need to warm up before they can be driven.
Modern vehicles can be driven within seconds of being started, though the engine should not be subjected to extreme loads until it has reached its normal operating temperature. Plus, the quickest way to warm up a vehicle's engine is to drive it.
5. As a vehicle ages, its fuel economy decreases significantly.
A vehicle that is properly maintained will retain its efficiency for many years. The EPA tests vehicles with about 5,000 miles on the odometer to account for the break-in period since a vehicle's fuel economy will typically continue to improve over the first several years of ownership. Vehicles that are 10 or even 15 years old will experience little decrease in fuel economy if properly maintained.
6. Replacing your air filter will help your car run more efficiently.
This is true for older vehicles with carbureted engines, but modern fuel-injected engines have onboard computers that automatically adjust the fuel-air ratio to the proper level. Changing a dirty air filter won't increase your fuel economy, but it might improve your engine's performance.
7. Aftermarket additives and devices can dramatically improve your fuel economy.
Excluding full conversions that meet all EPA certification standards, tests have shown that such devices and additives do not improve fuel economy and may damage your engine and/or increase your tailpipe emissions. For further information, see "Gas-Saving Products: Fact or Fuelishness?" by the Federal Trade Commission.
8. Using premium fuel improves fuel economy.
Unless your vehicle was specifically designed for premium fuel or knocks severly with regular fuel, you will probably experience no benefit from using premium fuel over regular. Consult your owner's manual to see whether premium is recommended and under what conditions (e.g., towing).
9. The EPA fuel economy estimates are a government guarantee on what fuel economy each vehicle will deliver.
The primary purpose of EPA fuel economy estimates is to provide consumers with a uniform, unbiased way of comparing the relative efficiency of vehicles. Even though the EPA's test procedures are designed to reflect real-world driving conditions, no single test can accurately model all driving styles and environments. Differing fuel blends will also affect fuel economy. The use of gasoline with 10% ethanol can decrease fuel economy by about 3% due to its lower energy density.
10. All vehicles are tested for fuel economy.
Current testing regulations only require light-duty vehicles of 8,500 lbs or less to be tested for fuel economy. Several popular models, such as the Ford F250/350, Chevrolet/GMC 2500/3500, and Dodge 2500/3500 vehicles, exceed this weight limit and are therefore not tested and have no official fuel economy rating. The EPA also does not test motorcycles or four wheel vehicles that are not legal for highway driving like neighborhood vehicles. Beginning with the 2011 model year, passenger vehicles (vans and SUVs but NOT pickup trucks) up to 10,000 lbs will be required to have fuel economy labels.
Advanced technologies like hybrid drivetrains, diesel engines, direct fuel injection, turbocharging, advanced transmissions, low rolling resistance tires and aerodynamic designs are allowing standard-sized vehicles to be very fuel efficient. For the 2010 model year, five of the top ten most efficient vehicles are midsized cars, with a midsized car taking the top spot.
2. Manual transmissions always get better fuel economy than automatics.
Advances in automatic transmissions have improved their efficiency to the point that the automatic version of a vehicle often gets the same or better fuel economy than the version with a manual transmission. For vehicles offered in both automatic and manual transmissions, consumers can easily compare fuel economy at http://www.fueleconomy.gov/feg/findacar.htm.
3. It takes more fuel to start a vehicle than it does to let it idle.
Modern fuel injected engines start very efficiently, especially when warmed up. Idling can use a quarter to a half gallon of fuel per hour — depending on your vehicle's engine size — costing you about 1 to 2 cents per minute. Turn off your engine when your vehicle is sitting still, except when you are waiting in traffic or waiting in a line where you would need to turn it on and off frequently. Restarting your engine too frequently can wear out your starter.
4. Vehicles need to warm up before they can be driven.
Modern vehicles can be driven within seconds of being started, though the engine should not be subjected to extreme loads until it has reached its normal operating temperature. Plus, the quickest way to warm up a vehicle's engine is to drive it.
5. As a vehicle ages, its fuel economy decreases significantly.
A vehicle that is properly maintained will retain its efficiency for many years. The EPA tests vehicles with about 5,000 miles on the odometer to account for the break-in period since a vehicle's fuel economy will typically continue to improve over the first several years of ownership. Vehicles that are 10 or even 15 years old will experience little decrease in fuel economy if properly maintained.
6. Replacing your air filter will help your car run more efficiently.
This is true for older vehicles with carbureted engines, but modern fuel-injected engines have onboard computers that automatically adjust the fuel-air ratio to the proper level. Changing a dirty air filter won't increase your fuel economy, but it might improve your engine's performance.
7. Aftermarket additives and devices can dramatically improve your fuel economy.
Excluding full conversions that meet all EPA certification standards, tests have shown that such devices and additives do not improve fuel economy and may damage your engine and/or increase your tailpipe emissions. For further information, see "Gas-Saving Products: Fact or Fuelishness?" by the Federal Trade Commission.
8. Using premium fuel improves fuel economy.
Unless your vehicle was specifically designed for premium fuel or knocks severly with regular fuel, you will probably experience no benefit from using premium fuel over regular. Consult your owner's manual to see whether premium is recommended and under what conditions (e.g., towing).
9. The EPA fuel economy estimates are a government guarantee on what fuel economy each vehicle will deliver.
The primary purpose of EPA fuel economy estimates is to provide consumers with a uniform, unbiased way of comparing the relative efficiency of vehicles. Even though the EPA's test procedures are designed to reflect real-world driving conditions, no single test can accurately model all driving styles and environments. Differing fuel blends will also affect fuel economy. The use of gasoline with 10% ethanol can decrease fuel economy by about 3% due to its lower energy density.
10. All vehicles are tested for fuel economy.
Current testing regulations only require light-duty vehicles of 8,500 lbs or less to be tested for fuel economy. Several popular models, such as the Ford F250/350, Chevrolet/GMC 2500/3500, and Dodge 2500/3500 vehicles, exceed this weight limit and are therefore not tested and have no official fuel economy rating. The EPA also does not test motorcycles or four wheel vehicles that are not legal for highway driving like neighborhood vehicles. Beginning with the 2011 model year, passenger vehicles (vans and SUVs but NOT pickup trucks) up to 10,000 lbs will be required to have fuel economy labels.
Altucher: "Relax," We've Been Through Much Worse Than This
Posted May 28, 2010 09:35am EDT by Peter Gorenstein in Investing, Recession
Related: ^gspc, ^dji, spy, XLF, ^ixic, EEM, FXE
Europe’s sovereign debt crisis has wrecked havoc on the markets in the last few months. We’ve had a spike in the VIX, aka the fear index, the flash crash and many global markets are now back in bear market territory. In the U.S. were on track for the worst May in half a century.
The wild market action has many investors wondering: How will we get out of this mess?
"Everybody needs to just relax a little bit," says James Altucher, president of Formula Capital. "This is not Argentina, this is not Zimbabwe."
The market has been through much worse than this in the past 30 years and Altucher believes the economy and stocks will remain resilient.
When has it been worse?
--In 1982-83 Brazil, Mexico, Venezuela and most of Latin America all defaulted or, came close to defaulting. "The whole world was going bankrupt and we were coming out of the Volcker led recession from the early '80s where he was fighting inflation," he notes. Guess what? After a bailout – U.S. markets were up 49% those two years.
-- 1987’s Black Monday. Think the 'flash crash' was frightening? On October 19th, 1987, the Dow fell 22%. In a single day! Hong Kong markets fell 45% on that day, alone.
--1997’s Asian financial crisis lead to Russia debt default in the following year and the collapse of hedge fund Long Term Capital Management. Talk about contagion.
-- September 11th, 2001. "It seemed like the world was ending, it was the scariest thing that happened to me, at least, in my lifetime, and it was horrible for the country," Altucher recalls. "And, we were in the middle of a recession."
Bailouts and quantitative easing followed most of these previous crises. But our current predicament comes after we've already had the biggest bailout in history and rates can't go lower. Altucher has a retort to that concern too, noting half the stimulus package hasn't been spent yet. In fact, he's more concerned that using the rest of the funds will create another bubble and lead to higher inflation.
That's a problem the Fed might look forward to.
The debt crisis in Europe likely spells slower growth across the Atlantic. China is taking steps to put the brakes on its runaway economy and the U.S. housing market still looks weak. There's seemingly plenty of reasons to be a stock market bear, especially after the run we've had over the last year.
Nonsense, says James Altucher, president of Formula Capital. The economy and market will continue to surprise, he tells Aaron in this clip. In fact, he's calling for a 'checkmark'-shaped recovery, stronger than the ‘V’ we hear so much about. "The debate is over, it’s already been a V, now the question is, does it continue? I think it does," he says.
Why is he so confident?
-- The job market is improving. “We've seen temp workers go up for seven months in a row," the fastest pace since 2004. Average pay and hours worked are up and the U.S. added 290,000 jobs last month, the biggest jump in four years. Plus, he notes, “jobs in self-employed positions and start-up businesses have jumped by 1.9 million in the past four months."
-- Car sales are up by 25% in April compared to a year ago. “How did Toyota have 27% year over year car sales increase?"
-- Pending home sale are up 21% year over year.
Altucher is confident all this will translate into record profits and an all-time high on the S&P 500 by the end of next year. "I know people are going to laugh," but the proof is in the pudding, he says.
How do you make money on this?
"Play the triple play companies. The ones that beat earnings, beat on revenues and guided up," he says. At the top of his list are Intel, Starwood Hotels, Humana, Intel, EMC and IBM.
Related: ^gspc, ^dji, spy, XLF, ^ixic, EEM, FXE
Europe’s sovereign debt crisis has wrecked havoc on the markets in the last few months. We’ve had a spike in the VIX, aka the fear index, the flash crash and many global markets are now back in bear market territory. In the U.S. were on track for the worst May in half a century.
The wild market action has many investors wondering: How will we get out of this mess?
"Everybody needs to just relax a little bit," says James Altucher, president of Formula Capital. "This is not Argentina, this is not Zimbabwe."
The market has been through much worse than this in the past 30 years and Altucher believes the economy and stocks will remain resilient.
When has it been worse?
--In 1982-83 Brazil, Mexico, Venezuela and most of Latin America all defaulted or, came close to defaulting. "The whole world was going bankrupt and we were coming out of the Volcker led recession from the early '80s where he was fighting inflation," he notes. Guess what? After a bailout – U.S. markets were up 49% those two years.
-- 1987’s Black Monday. Think the 'flash crash' was frightening? On October 19th, 1987, the Dow fell 22%. In a single day! Hong Kong markets fell 45% on that day, alone.
--1997’s Asian financial crisis lead to Russia debt default in the following year and the collapse of hedge fund Long Term Capital Management. Talk about contagion.
-- September 11th, 2001. "It seemed like the world was ending, it was the scariest thing that happened to me, at least, in my lifetime, and it was horrible for the country," Altucher recalls. "And, we were in the middle of a recession."
Bailouts and quantitative easing followed most of these previous crises. But our current predicament comes after we've already had the biggest bailout in history and rates can't go lower. Altucher has a retort to that concern too, noting half the stimulus package hasn't been spent yet. In fact, he's more concerned that using the rest of the funds will create another bubble and lead to higher inflation.
That's a problem the Fed might look forward to.
The debt crisis in Europe likely spells slower growth across the Atlantic. China is taking steps to put the brakes on its runaway economy and the U.S. housing market still looks weak. There's seemingly plenty of reasons to be a stock market bear, especially after the run we've had over the last year.
Nonsense, says James Altucher, president of Formula Capital. The economy and market will continue to surprise, he tells Aaron in this clip. In fact, he's calling for a 'checkmark'-shaped recovery, stronger than the ‘V’ we hear so much about. "The debate is over, it’s already been a V, now the question is, does it continue? I think it does," he says.
Why is he so confident?
-- The job market is improving. “We've seen temp workers go up for seven months in a row," the fastest pace since 2004. Average pay and hours worked are up and the U.S. added 290,000 jobs last month, the biggest jump in four years. Plus, he notes, “jobs in self-employed positions and start-up businesses have jumped by 1.9 million in the past four months."
-- Car sales are up by 25% in April compared to a year ago. “How did Toyota have 27% year over year car sales increase?"
-- Pending home sale are up 21% year over year.
Altucher is confident all this will translate into record profits and an all-time high on the S&P 500 by the end of next year. "I know people are going to laugh," but the proof is in the pudding, he says.
How do you make money on this?
"Play the triple play companies. The ones that beat earnings, beat on revenues and guided up," he says. At the top of his list are Intel, Starwood Hotels, Humana, Intel, EMC and IBM.
Yes, We Have Healed: Why Bill Ackman Is Bullish on America ... And Citigroup
Posted May 28, 2010 12:00pm EDT by Aaron Task in Investing, Newsmakers
Related: ^DJI, ^GSPC, C, GGP, TGT, GM, MBI
In April 2009, Bill Ackman of Pershing Square Capital Management said America had suffered "the equivalent of a heart attack, but now we are in recovery, hopefully. It takes time to heal."
Fast forward 13 months and, "yes," America has healed, Ackman says.
Furthermore, "I think the market's not particularly expensive," the famed activist hedge fund manager declares. "Look at large-cap, very high quality businesses today [and] they seem pretty cheap to me. "
Much to everyone's surprise - including Ackman's - those "very high quality businesses" include Citigroup. On Wednesday, the day after Treasury announced the sale of 1.5 billion shares of Citi stock, Ackman stunned Wall Street by revealing his firm has taken a big stake in the big bank.
With theatrical flair, Ackman made the announcement as a throwaway line at the end of his presentation at the 15th annual Ira Sohn investment research conference in New York: "And by the way, we bought about 150 million shares of Citigroup, but I don't have time to talk about it," he said, according to multiple reports.
And by the way, when Ackman and Bloomberg reporter Christine Richard joined us this morning to talk about Confidence Game, a new book about Ackman's public battle with MBIA (and regulators), I just had to ask him about the Citigroup position.
The Bull Case for Citigroup
"If you had asked me a year ago ‘could I conceive of owning Citi 12 months later?', I couldn't conceive of owning the company," he says. "It was hard for me to even look at it in light of a year ago."
Upon further review - and while admitting "there are still question marks" -- Ackman determined Citi was attractive based (in part) on the following:
-- Money Talks: Thanks in large part to the government's conversion of its preferred stake in Citi to common stock in 2009, Citigroup is "probably one of the best capitalized banks today, ironically," Ackman says.
-- Free Money Is Even Better: Because Ben Bernanke has kept the fed funds rate effectively at zero, banks like Citigroup "effectively they've got free money," Ackman says. Furthermore, "it's a great time to make loans - they can earn attractive spreads" because collateral values are down and lending standards are up.
-- Franchise Value: Despite hits to its reputation in recent years, Citigroup still has a "great deposit franchise" and a "very well capitalized balance sheet," the fund manager says. In addition, he notes off camera Citi has less exposure to home equity loans than most of its big competitors.
In sum, "it's really a great time to be in the banking business," Ackman says.
Related: ^DJI, ^GSPC, C, GGP, TGT, GM, MBI
In April 2009, Bill Ackman of Pershing Square Capital Management said America had suffered "the equivalent of a heart attack, but now we are in recovery, hopefully. It takes time to heal."
Fast forward 13 months and, "yes," America has healed, Ackman says.
Furthermore, "I think the market's not particularly expensive," the famed activist hedge fund manager declares. "Look at large-cap, very high quality businesses today [and] they seem pretty cheap to me. "
Much to everyone's surprise - including Ackman's - those "very high quality businesses" include Citigroup. On Wednesday, the day after Treasury announced the sale of 1.5 billion shares of Citi stock, Ackman stunned Wall Street by revealing his firm has taken a big stake in the big bank.
With theatrical flair, Ackman made the announcement as a throwaway line at the end of his presentation at the 15th annual Ira Sohn investment research conference in New York: "And by the way, we bought about 150 million shares of Citigroup, but I don't have time to talk about it," he said, according to multiple reports.
And by the way, when Ackman and Bloomberg reporter Christine Richard joined us this morning to talk about Confidence Game, a new book about Ackman's public battle with MBIA (and regulators), I just had to ask him about the Citigroup position.
The Bull Case for Citigroup
"If you had asked me a year ago ‘could I conceive of owning Citi 12 months later?', I couldn't conceive of owning the company," he says. "It was hard for me to even look at it in light of a year ago."
Upon further review - and while admitting "there are still question marks" -- Ackman determined Citi was attractive based (in part) on the following:
-- Money Talks: Thanks in large part to the government's conversion of its preferred stake in Citi to common stock in 2009, Citigroup is "probably one of the best capitalized banks today, ironically," Ackman says.
-- Free Money Is Even Better: Because Ben Bernanke has kept the fed funds rate effectively at zero, banks like Citigroup "effectively they've got free money," Ackman says. Furthermore, "it's a great time to make loans - they can earn attractive spreads" because collateral values are down and lending standards are up.
-- Franchise Value: Despite hits to its reputation in recent years, Citigroup still has a "great deposit franchise" and a "very well capitalized balance sheet," the fund manager says. In addition, he notes off camera Citi has less exposure to home equity loans than most of its big competitors.
In sum, "it's really a great time to be in the banking business," Ackman says.
FA...Stocks fall as Fitch downgrades Spain's debt; market heads to worst month in more than a year
Stephen Bernard, AP Business Writer, On Friday May 28, 2010, 6:03 pm EDT
NEW YORK (AP) -- Stocks closed out their worst month in more than a year by sliding again on more unsettling news about Europe.
The Dow Jones industrials dropped 122 points Friday after Fitch Ratings gave Spain the second downgrade of its credit rating in a month. The rating agency's action was another reminder to traders of the long-term economic problems still facing several European countries, and pehaps the rest of the continent and the global economy as well.
May was difficult as persistent and intensifying worries about Europe's debt problems sent the Dow down 7.9 percent and the broader Standard & Poor's 500 index down 8.2 percent. Both indexes had their worst monthly performance since February 2009, the month before stocks began their recovery from 12-year lows. The Dow lost nearly 872 points, its biggest point drop ever for May.
The last trading day of May fit the pattern of the rest of the month. Stocks alternately plunged and recovered, then dropped late in the day as investors facing a three-day holiday weekend decided to play it safe and sell.
Fitch cut Spain's rating by one notch, saying the country's plan to cut its budget will likely slow economic growth. Mounting debt forced Spain, among other European countries, to recently impose austerity measures to try and contain its rising deficit.
The rating agency also cited the recent bailout of a regional bank by Spain's central bank as a sign that the country's economic recovery will lag. Earlier this month, Standard & Poor's lowered its rating of Spain's debt. Greece and Portugal have also suffered downgrades.
Stocks were already down before the news about Spain broke in the early afternoon.
"People are worried about Europe and we're seeing a knee-jerk reaction, particularly ahead of a long weekend," said Joe Heider, a principal at Rehmann in Cleveland. He said traders won't want to be holding some investments since U.S. markets are closed Monday, while European ones are open.
Heider noted that the new rating, just one short of Fitch's highest, is still quite good. It was more the timing of the cut before the holiday weekend than the actual downgrade itself that surprised investors, he said.
The market's reaction was an example of how quick investors have been to sell during May. Although the day didn't see the huge swings stocks had earlier this month, there was still plenty of emotion. The biggest shock of the month came May 6, when the Dow took a dive of 1,000 points in less than 30 minutes before recovering most of its losses.
Greece, the most troubled European country, has received a bailout and several other countries are also cutting their spending, but investors fear that the region's debt problems can't be contained. They're also worried that austerity measures will stifle economic growth, and that Europe's slowdown will become the world's slowdown.
The market's drop this month has given it what's called a "correction." That's considered a drop of 10 percent or more from a recent high. The S&P 500, the index most watched by market pros, ended May down 10.5 percent from its high for the year, reached April 23. The Dow is down 9.5 percent from its 2010 high, reached April 26. The Dow has regained some ground from the low of 9,974.45 it closed at on Wednesday.
On Friday, the Dow fell 122.36, or 1.2 percent, to 10,136.63, its ninth drop in 12 days. The S&P 500 index fell 13.65, or 1.2 percent, to 1,089.41, while the Nasdaq composite index dropped 20.64, or 0.9 percent, to 2,257.04.
The Russell 200 index of smaller companies fell 8.90, or 1.3 percent, to 661.61.
About two stocks fell for every one that rose on the New York Stock Exchange, where consolidated volume came to 5.09 billion shares, down from Thursday's 5.5 billion.
With investors pulling out of stocks, bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.29 percent from 3.36 percent late Thursday.
The anxiety about Europe sent interest rates tumbling in May. Investors were buying U.S. government debt because of its reputation for safety. The yield on the 10-year Treasury note rose to around 3.70 percent at the beginning of the month, but then fell to a 2010 low of 3.07 percent this week. Since mortgage rates are tied to that note, mortgage rates fell to 4.78 percent, their lowest level since December when they touched a record low of 4.71 percent.
However, corporate borrowing rates rose, particularly junk bond rates, as investors grew uneasy about company bonds. Barclays Capital's index that tracks high-yield U.S. corporate debt fell nearly 4 percent in May.
The problems in Europe led investors to ignore continuing signs of improvement in the U.S. economy during May. Investors' fear is that forced cutbacks in government spending in Europe in the coming months will curb the continent's economic growth, and in turn, the U.S. recovery.
Next week will bring a series of economic reports that will test the market, including the Labor Department's May employment report and readings on manufacturing, consumer spending and housing.
If there are any signs that the U.S. economy is being affected by news of Europe's problems -- for example, if consumers seemed to be spending less -- investors are likely to start selling again. And if the jobs report is disappointing, the market is also likely to suffer.
A report Friday showed that the U.S. recovery might be slowing a bit. The Commerce Department said consumer spending was flat in April, compared with the previous month. Economists polled by Thomson Reuters had forecast spending would rise 0.3 percent. It was the first time in seven months that spending had not risen in a month, indicating that consumers are still somewhat tentative about the health of the economy.
Personal income rose 0.4 percent, slightly worse than the 0.5 percent growth forecast by economists.
"This month was damaging to the psychology of investors, so consumption may taper in the near term," said Jamie Cox, managing director at Harris Financial Group in Richmond, Va.
Cox said consumers are more tentative after last year's market drop and recession, so they are more likely to cut back quickly at any signs of economic weakness. Investors, particularly retail investors, are also more likely to sell stocks at the first sign of a pullback, he said.
"We're not far enough removed from the 2009 drop," Cox said. "People are saying 'not again.'"
Overseas, Britain's FTSE 100 fell 0.1 percent, Germany's DAX index was down less than 0.1 percent, and France's CAC-40 fell 0.3 percent. Japan's Nikkei stock average rose 1.3 percent.
NEW YORK (AP) -- Stocks closed out their worst month in more than a year by sliding again on more unsettling news about Europe.
The Dow Jones industrials dropped 122 points Friday after Fitch Ratings gave Spain the second downgrade of its credit rating in a month. The rating agency's action was another reminder to traders of the long-term economic problems still facing several European countries, and pehaps the rest of the continent and the global economy as well.
May was difficult as persistent and intensifying worries about Europe's debt problems sent the Dow down 7.9 percent and the broader Standard & Poor's 500 index down 8.2 percent. Both indexes had their worst monthly performance since February 2009, the month before stocks began their recovery from 12-year lows. The Dow lost nearly 872 points, its biggest point drop ever for May.
The last trading day of May fit the pattern of the rest of the month. Stocks alternately plunged and recovered, then dropped late in the day as investors facing a three-day holiday weekend decided to play it safe and sell.
Fitch cut Spain's rating by one notch, saying the country's plan to cut its budget will likely slow economic growth. Mounting debt forced Spain, among other European countries, to recently impose austerity measures to try and contain its rising deficit.
The rating agency also cited the recent bailout of a regional bank by Spain's central bank as a sign that the country's economic recovery will lag. Earlier this month, Standard & Poor's lowered its rating of Spain's debt. Greece and Portugal have also suffered downgrades.
Stocks were already down before the news about Spain broke in the early afternoon.
"People are worried about Europe and we're seeing a knee-jerk reaction, particularly ahead of a long weekend," said Joe Heider, a principal at Rehmann in Cleveland. He said traders won't want to be holding some investments since U.S. markets are closed Monday, while European ones are open.
Heider noted that the new rating, just one short of Fitch's highest, is still quite good. It was more the timing of the cut before the holiday weekend than the actual downgrade itself that surprised investors, he said.
The market's reaction was an example of how quick investors have been to sell during May. Although the day didn't see the huge swings stocks had earlier this month, there was still plenty of emotion. The biggest shock of the month came May 6, when the Dow took a dive of 1,000 points in less than 30 minutes before recovering most of its losses.
Greece, the most troubled European country, has received a bailout and several other countries are also cutting their spending, but investors fear that the region's debt problems can't be contained. They're also worried that austerity measures will stifle economic growth, and that Europe's slowdown will become the world's slowdown.
The market's drop this month has given it what's called a "correction." That's considered a drop of 10 percent or more from a recent high. The S&P 500, the index most watched by market pros, ended May down 10.5 percent from its high for the year, reached April 23. The Dow is down 9.5 percent from its 2010 high, reached April 26. The Dow has regained some ground from the low of 9,974.45 it closed at on Wednesday.
On Friday, the Dow fell 122.36, or 1.2 percent, to 10,136.63, its ninth drop in 12 days. The S&P 500 index fell 13.65, or 1.2 percent, to 1,089.41, while the Nasdaq composite index dropped 20.64, or 0.9 percent, to 2,257.04.
The Russell 200 index of smaller companies fell 8.90, or 1.3 percent, to 661.61.
About two stocks fell for every one that rose on the New York Stock Exchange, where consolidated volume came to 5.09 billion shares, down from Thursday's 5.5 billion.
With investors pulling out of stocks, bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.29 percent from 3.36 percent late Thursday.
The anxiety about Europe sent interest rates tumbling in May. Investors were buying U.S. government debt because of its reputation for safety. The yield on the 10-year Treasury note rose to around 3.70 percent at the beginning of the month, but then fell to a 2010 low of 3.07 percent this week. Since mortgage rates are tied to that note, mortgage rates fell to 4.78 percent, their lowest level since December when they touched a record low of 4.71 percent.
However, corporate borrowing rates rose, particularly junk bond rates, as investors grew uneasy about company bonds. Barclays Capital's index that tracks high-yield U.S. corporate debt fell nearly 4 percent in May.
The problems in Europe led investors to ignore continuing signs of improvement in the U.S. economy during May. Investors' fear is that forced cutbacks in government spending in Europe in the coming months will curb the continent's economic growth, and in turn, the U.S. recovery.
Next week will bring a series of economic reports that will test the market, including the Labor Department's May employment report and readings on manufacturing, consumer spending and housing.
If there are any signs that the U.S. economy is being affected by news of Europe's problems -- for example, if consumers seemed to be spending less -- investors are likely to start selling again. And if the jobs report is disappointing, the market is also likely to suffer.
A report Friday showed that the U.S. recovery might be slowing a bit. The Commerce Department said consumer spending was flat in April, compared with the previous month. Economists polled by Thomson Reuters had forecast spending would rise 0.3 percent. It was the first time in seven months that spending had not risen in a month, indicating that consumers are still somewhat tentative about the health of the economy.
Personal income rose 0.4 percent, slightly worse than the 0.5 percent growth forecast by economists.
"This month was damaging to the psychology of investors, so consumption may taper in the near term," said Jamie Cox, managing director at Harris Financial Group in Richmond, Va.
Cox said consumers are more tentative after last year's market drop and recession, so they are more likely to cut back quickly at any signs of economic weakness. Investors, particularly retail investors, are also more likely to sell stocks at the first sign of a pullback, he said.
"We're not far enough removed from the 2009 drop," Cox said. "People are saying 'not again.'"
Overseas, Britain's FTSE 100 fell 0.1 percent, Germany's DAX index was down less than 0.1 percent, and France's CAC-40 fell 0.3 percent. Japan's Nikkei stock average rose 1.3 percent.
Friday, May 28, 2010
....phase two of the problem with governments trying to bail out governments
"The Phase of Reckoning": Sovereign Debt Crisis Far From Over, Park Says
Posted May 27, 2010 08:43am EDT by Heesun Wee in Investing, Recession, Banking, Politics
Related: ^gspc, ^dji, fxe, spy, xlf, gld, tlt
Three years ago, few Americans were worried about -- or had even heard of -- CDOs, CDSs and other acronyms that contributed to the global economic conflagration of 2008-early 2009. But Danielle Park, president of Venable Park Investment Council, was worried about a looming debt crisis in her 2007 book Juggling Dynamite.
So what should we worry about now?
The global debt crisis indeed remains front and center, says Park. "It's not over. It's ongoing."
As Park tells Aaron in the accompanying segment, not only is this debt crisis looming, we're entering phase two of the problem with governments trying to bail out governments: "From the sublime to the ridiculous," she quips. (For more on this dynamic, see: Is Sovereign Debt the New Subprime?)
"Seismic Shift"
There's no quick fixes for the deleveraging cycle, which Park says will take years. She is concerned about coming write-downs, higher taxes and cuts in entitlement programs. "The reality will hit and this will be the seismic shift. The behavioral change will come," Park says.
To date, bondholders have largely remained unscathed from the financial crisis, despite bad investments in risky assets. "Bondholders by and large didn't do their due diligence," Park says. "They relied on ratings agencies that were on the dole, they passed the buck and now they want to be made whole.
The "Reckoning"
But as public outcry over our state of bailout nation percolates, Park is concerned about growing civil tensions in North America, not Greece. "Now we're into the phase of reckoning, where it's like 'actually we need cash'," she says, fearing there's "not enough zeros" to pay back all the I.O.U.s circulating around the globe.
Posted May 27, 2010 08:43am EDT by Heesun Wee in Investing, Recession, Banking, Politics
Related: ^gspc, ^dji, fxe, spy, xlf, gld, tlt
Three years ago, few Americans were worried about -- or had even heard of -- CDOs, CDSs and other acronyms that contributed to the global economic conflagration of 2008-early 2009. But Danielle Park, president of Venable Park Investment Council, was worried about a looming debt crisis in her 2007 book Juggling Dynamite.
So what should we worry about now?
The global debt crisis indeed remains front and center, says Park. "It's not over. It's ongoing."
As Park tells Aaron in the accompanying segment, not only is this debt crisis looming, we're entering phase two of the problem with governments trying to bail out governments: "From the sublime to the ridiculous," she quips. (For more on this dynamic, see: Is Sovereign Debt the New Subprime?)
"Seismic Shift"
There's no quick fixes for the deleveraging cycle, which Park says will take years. She is concerned about coming write-downs, higher taxes and cuts in entitlement programs. "The reality will hit and this will be the seismic shift. The behavioral change will come," Park says.
To date, bondholders have largely remained unscathed from the financial crisis, despite bad investments in risky assets. "Bondholders by and large didn't do their due diligence," Park says. "They relied on ratings agencies that were on the dole, they passed the buck and now they want to be made whole.
The "Reckoning"
But as public outcry over our state of bailout nation percolates, Park is concerned about growing civil tensions in North America, not Greece. "Now we're into the phase of reckoning, where it's like 'actually we need cash'," she says, fearing there's "not enough zeros" to pay back all the I.O.U.s circulating around the globe.
FA...Short-Term Bottom In, But Rally Won't Be "Satisfying or Long-lasting,"
Roque Says
Posted May 27, 2010 01:36pm EDT by Peter Gorenstein in Investing
Related: ^gspc, spy, gs, fcx, mon, ms, mos
The market see-saw tilted back toward the upside Thursday. After taking a fall below 10,000 on Wednesday, the DOW was up more than 200 points in afternoon trading.
In the near term, this bounce could have legs, says John Roque, managing director and market technician with WJB Capital Group. "But we think the corrective phase is incomplete."
Roque believes the rally could take the S&P 500 as high as 1120 or 1130 in the near-term. However, "the rally's not going to be particularly satisfying, long-lasting (or) encouraging," he predicts.
For clues on the broader market's path, Roque closely follows Goldman Sachs, Morgan Stanley, Monsanto, Mosaic, Freeport-McMoran and copper prices; this group has tended to lead in and out of rallies over the last couple years. The signs coming from these so-called bellwethers, "suggests to us the S&P doesn't hold this 1050 level on this next retest," he says, predicting the S&P will fall until it finds support around 990.
One technical reason Roque is so down on any rally effort is the percent of NYSE stocks trading above their 200-day moving average. Through Wednesday 45% of Big Board stocks traded above their 200-day MA. "That number needs to decline below the 35% threshold," a level that has been a strong indicator of oversold conditions for the last 30 years. "It can get much lower, but at least at 35%, you'd say to yourself most of the damage has been done."
The good news for savers and those living on a fixed-income is the dollar does continue to look good against other currencies, according to Roque. "The dollar is benefiting from being the tallest midget," he jokes, predicting the euro will eventually fall to parity with the greenback.
Posted May 27, 2010 01:36pm EDT by Peter Gorenstein in Investing
Related: ^gspc, spy, gs, fcx, mon, ms, mos
The market see-saw tilted back toward the upside Thursday. After taking a fall below 10,000 on Wednesday, the DOW was up more than 200 points in afternoon trading.
In the near term, this bounce could have legs, says John Roque, managing director and market technician with WJB Capital Group. "But we think the corrective phase is incomplete."
Roque believes the rally could take the S&P 500 as high as 1120 or 1130 in the near-term. However, "the rally's not going to be particularly satisfying, long-lasting (or) encouraging," he predicts.
For clues on the broader market's path, Roque closely follows Goldman Sachs, Morgan Stanley, Monsanto, Mosaic, Freeport-McMoran and copper prices; this group has tended to lead in and out of rallies over the last couple years. The signs coming from these so-called bellwethers, "suggests to us the S&P doesn't hold this 1050 level on this next retest," he says, predicting the S&P will fall until it finds support around 990.
One technical reason Roque is so down on any rally effort is the percent of NYSE stocks trading above their 200-day moving average. Through Wednesday 45% of Big Board stocks traded above their 200-day MA. "That number needs to decline below the 35% threshold," a level that has been a strong indicator of oversold conditions for the last 30 years. "It can get much lower, but at least at 35%, you'd say to yourself most of the damage has been done."
The good news for savers and those living on a fixed-income is the dollar does continue to look good against other currencies, according to Roque. "The dollar is benefiting from being the tallest midget," he jokes, predicting the euro will eventually fall to parity with the greenback.
Formula for success......
.....is the same as the formula for nevous beakdown.........
-work harder...
-push ahead....
-let nothing hinder your quest......
Hopefully success come first.....
Proverbs 16:3 Commit thy works unto the LORD, and thy thoughts shall be established.
-work harder...
-push ahead....
-let nothing hinder your quest......
Hopefully success come first.....
Proverbs 16:3 Commit thy works unto the LORD, and thy thoughts shall be established.
WARREN BUFFET work for pleasure......
.......At 86 and 79, Charlie and I remain lucky beyond our dreams. We were born in America; had terrific
parents who saw that we got good educations; have enjoyed wonderful families and great health; and came
equipped with a “business” gene that allows us to prosper in a manner hugely disproportionate to that
experienced by many people who contribute as much or more to our society’s well-being. Moreover, we have
long had jobs that we love, in which we are helped in countless ways by talented and cheerful associates. Indeed,
over the years, our work has become ever more fascinating; no wonder we tap-dance to work. If pushed, we
would gladly pay substantial sums to have our jobs (but don’t tell the Comp Committee).
Nothing, however, is more fun for us than getting together with our shareholder-partners at Berkshire’s
annual meeting. So join us on May 1st at the Qwest for our annual Woodstock for Capitalists. We’ll see you
there.
February 26, 2010 Warren E. Buffett
Chairman of the Board
P.S. Come by rail.
parents who saw that we got good educations; have enjoyed wonderful families and great health; and came
equipped with a “business” gene that allows us to prosper in a manner hugely disproportionate to that
experienced by many people who contribute as much or more to our society’s well-being. Moreover, we have
long had jobs that we love, in which we are helped in countless ways by talented and cheerful associates. Indeed,
over the years, our work has become ever more fascinating; no wonder we tap-dance to work. If pushed, we
would gladly pay substantial sums to have our jobs (but don’t tell the Comp Committee).
Nothing, however, is more fun for us than getting together with our shareholder-partners at Berkshire’s
annual meeting. So join us on May 1st at the Qwest for our annual Woodstock for Capitalists. We’ll see you
there.
February 26, 2010 Warren E. Buffett
Chairman of the Board
P.S. Come by rail.
FA...Stocks surge after China says it doesn't plan to sell European debt; Dow jumps 285 points
Stephen Bernard and Tim Paradis, AP Business Writers, On Thursday May 27, 2010, 6:19 pm
NEW YORK (AP) -- Stocks had another turnaround Thursday and rocketed higher after China reassured investors it doesn't plan to sell the European debt it holds.
The Dow Jones industrial average surged nearly 285 points. Treasury prices tumbled as traders funneled money into riskier assets like stocks and commodities.
China's show of confidence in Europe let the market resume a rally that stalled late Wednesday following a report that the Chinese government was considering cutting its European debt holdings. If that were true, such a move would have signaled that China didn't think Europe would be able to contain its debt crisis. The agency that manages China's $2.5 trillion in foreign reserves denied the report.
Analysts also said some bounce has been expected after the slide that drove the Dow down 11 percent from its 2010 peak a month ago. Traders cautioned that this might not be a rally but merely a break in selling.
Some of the climb could be tied to what's called "short-covering." That occurs when traders are forced to buy stock after having earlier sold borrowed shares in a bet that the market would fall. Though it's difficult to determine how much lift short-covering might be giving stocks, the rush to cover misplaced bets can add to a rally.
The steep gains Thursday were welcome after the Dow dropped eight of the prior 10 days. Twice this week, stocks have climbed for much of the day only to see the advances erased in late slides. The Dow rose 135 points Wednesday morning, but ended the day down about 69.
Peter Tuz, president of Chase Investment Council in Charlottesville, Va., said the market has fallen too quickly. He said a break was due because there have been so many days with heavy selling.
"It's like a 100-year flood -- having 3 of them in a year," Tuz said. "That to me was an indication that the market was clearly oversold."
Concerns about debt problems in Europe have pounded stocks around the world this month. Traders were initially worried that banks would be hit if weaker countries like Greece or Portugal defaulted on their debt. Now that a nearly $1 trillion European Union rescue plan has emerged, the more recent fear has been that budget cuts in European countries will slow a global recovery.
The euro, which is seen as an indicator for confidence in the health of Europe's economy, rose to $1.2358 Thursday a day after nearing the four-year low it hit last week. Trading in major markets around the world has often tracked the euro in recent weeks.
Yu-Dee Chang, principal at ACE Investment Strategists in McLean, Va., said investors know that the problems in Europe will take time to resolve. Chang said the uncertainty about whether the U.S. economy will continue to rebound is leading many traders to make short-term bets on stocks. That is adding to the market's swings.
"I'm willing to buy at certain times on dips but any time I get a nice profit after a certain stretch -- I'm going to take my profit," Chang said. He expects that the market will remain volatile for at least the next six months. "I just don't want to be long-term committed."
The Dow rose 284.54, or 2.9 percent, to 10,258.99. It was the biggest gain for the Dow since it soared 405 points on May 10 after the European Union announced a bailout for debt-strapped countries.
The climb vaulted the Dow back above 10,000. It closed below that psychological benchmark on Wednesday for the first time since February.
The Standard & Poor's 500 index rose 35.11, or 3.3 percent, to 1,103.06. The Nasdaq composite index climbed 81.80, or 3.7 percent, to 2,277.68, putting it back in the black for 2010. The Dow and the S&P 500 index are still lower for the year.
Major stock indexes have also erased their losses for the week.
At the New York Stock Exchange, 2,885 shares rose while only 220 fell. Consolidated volume came to 5.5 billion shares compared with 7.1 billion Wednesday.
Bond prices tumbled, pushing interest rates higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.36 percent from 3.19 percent late Wednesday.
Analysts say the market's abrupt slide in the past month is part of the hangover from the financial crisis in late 2008 and early 2009. The collapse of Lehman Brothers dried up credit around the world and pounded an economy already in recession. With that fresh in investors' minds, traders found it safer to dump stocks first without waiting to see whether the problems in Europe would hurt the U.S.
In other trading, crude oil rose $3.04 to $74.55. Most metals and gain prices rose, while gold fell.
Financial and energy stocks led the market higher. American Express Co. posted the biggest gain among the 30 stocks that make up the Dow industrials. The stock rose $2.16, or 5.7 percent, to $40.33.
BP PLC rose $2.97, or 7 percent, to $45.38 after the company said its effort to plug the leaking oil in the Gulf of Mexico appeared to be making progress.
At the same time, new government estimates indicated that the spill has topped the 1989 Exxon Valdez accident to become the worst in the nation's history.
The news from China overshadowed disappointing reports on the U.S. economy. The Labor Department said initial claims for unemployment benefits fell last week, but not by as much as economists had forecast. A report on gross domestic product indicated that the U.S. economy did not grow as fast in the first quarter as previously thought.
The Russell 2000 index of smaller companies rose 27.89, or 4.3 percent, to 670.51.
Britain's FTSE 100 and Germany's DAX index each rose 3.1 percent, while France's CAC-40 climbed 3.4 percent. Japan's Nikkei stock average rose 1.2 percent.
NEW YORK (AP) -- Stocks had another turnaround Thursday and rocketed higher after China reassured investors it doesn't plan to sell the European debt it holds.
The Dow Jones industrial average surged nearly 285 points. Treasury prices tumbled as traders funneled money into riskier assets like stocks and commodities.
China's show of confidence in Europe let the market resume a rally that stalled late Wednesday following a report that the Chinese government was considering cutting its European debt holdings. If that were true, such a move would have signaled that China didn't think Europe would be able to contain its debt crisis. The agency that manages China's $2.5 trillion in foreign reserves denied the report.
Analysts also said some bounce has been expected after the slide that drove the Dow down 11 percent from its 2010 peak a month ago. Traders cautioned that this might not be a rally but merely a break in selling.
Some of the climb could be tied to what's called "short-covering." That occurs when traders are forced to buy stock after having earlier sold borrowed shares in a bet that the market would fall. Though it's difficult to determine how much lift short-covering might be giving stocks, the rush to cover misplaced bets can add to a rally.
The steep gains Thursday were welcome after the Dow dropped eight of the prior 10 days. Twice this week, stocks have climbed for much of the day only to see the advances erased in late slides. The Dow rose 135 points Wednesday morning, but ended the day down about 69.
Peter Tuz, president of Chase Investment Council in Charlottesville, Va., said the market has fallen too quickly. He said a break was due because there have been so many days with heavy selling.
"It's like a 100-year flood -- having 3 of them in a year," Tuz said. "That to me was an indication that the market was clearly oversold."
Concerns about debt problems in Europe have pounded stocks around the world this month. Traders were initially worried that banks would be hit if weaker countries like Greece or Portugal defaulted on their debt. Now that a nearly $1 trillion European Union rescue plan has emerged, the more recent fear has been that budget cuts in European countries will slow a global recovery.
The euro, which is seen as an indicator for confidence in the health of Europe's economy, rose to $1.2358 Thursday a day after nearing the four-year low it hit last week. Trading in major markets around the world has often tracked the euro in recent weeks.
Yu-Dee Chang, principal at ACE Investment Strategists in McLean, Va., said investors know that the problems in Europe will take time to resolve. Chang said the uncertainty about whether the U.S. economy will continue to rebound is leading many traders to make short-term bets on stocks. That is adding to the market's swings.
"I'm willing to buy at certain times on dips but any time I get a nice profit after a certain stretch -- I'm going to take my profit," Chang said. He expects that the market will remain volatile for at least the next six months. "I just don't want to be long-term committed."
The Dow rose 284.54, or 2.9 percent, to 10,258.99. It was the biggest gain for the Dow since it soared 405 points on May 10 after the European Union announced a bailout for debt-strapped countries.
The climb vaulted the Dow back above 10,000. It closed below that psychological benchmark on Wednesday for the first time since February.
The Standard & Poor's 500 index rose 35.11, or 3.3 percent, to 1,103.06. The Nasdaq composite index climbed 81.80, or 3.7 percent, to 2,277.68, putting it back in the black for 2010. The Dow and the S&P 500 index are still lower for the year.
Major stock indexes have also erased their losses for the week.
At the New York Stock Exchange, 2,885 shares rose while only 220 fell. Consolidated volume came to 5.5 billion shares compared with 7.1 billion Wednesday.
Bond prices tumbled, pushing interest rates higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.36 percent from 3.19 percent late Wednesday.
Analysts say the market's abrupt slide in the past month is part of the hangover from the financial crisis in late 2008 and early 2009. The collapse of Lehman Brothers dried up credit around the world and pounded an economy already in recession. With that fresh in investors' minds, traders found it safer to dump stocks first without waiting to see whether the problems in Europe would hurt the U.S.
In other trading, crude oil rose $3.04 to $74.55. Most metals and gain prices rose, while gold fell.
Financial and energy stocks led the market higher. American Express Co. posted the biggest gain among the 30 stocks that make up the Dow industrials. The stock rose $2.16, or 5.7 percent, to $40.33.
BP PLC rose $2.97, or 7 percent, to $45.38 after the company said its effort to plug the leaking oil in the Gulf of Mexico appeared to be making progress.
At the same time, new government estimates indicated that the spill has topped the 1989 Exxon Valdez accident to become the worst in the nation's history.
The news from China overshadowed disappointing reports on the U.S. economy. The Labor Department said initial claims for unemployment benefits fell last week, but not by as much as economists had forecast. A report on gross domestic product indicated that the U.S. economy did not grow as fast in the first quarter as previously thought.
The Russell 2000 index of smaller companies rose 27.89, or 4.3 percent, to 670.51.
Britain's FTSE 100 and Germany's DAX index each rose 3.1 percent, while France's CAC-40 climbed 3.4 percent. Japan's Nikkei stock average rose 1.2 percent.
Thursday, May 27, 2010
JIM ROGERS is so humble........
http://jimrogers-investments.blogspot.com/2010/05/mangru-report-video-interview.html
Treasury says sale of 1.5 billion shares of Citigroup stock brings government $6.2 billion
Martin Crutsinger, AP Economics Writer, On Wednesday May 26, 2010, 6:31 pm
WASHINGTON (AP) -- The Treasury Department said Wednesday it raised $6.2 billion from the sale of 1.5 billion shares of Citigroup stock it received as part of the government's rescue of the bank.
The sales took place over the past month and represented 19.5 percent of the government's holdings of Citigroup common stock.
Treasury said it has triggered a second round of stock sales through its agent, Morgan Stanley. That will involve an additional 1.5 billion shares.
The government said it would not sell shares during the blackout period set by Citigroup in advance of its second quarter earnings release. That period is expected to begin on July 1. Treasury has previously said it hopes to sell all of its Citigroup shares this year.
The sales are the government's latest move to recoup the costs of the $700 billion financial bailout.
The stock sold for an average price per share of around $4.33, Treasury said.
Citi stock finished at $3.86 in regular trading Wednesday, up 8 cents from Tuesday's close. The stock has traded in a range of $2.55 to $5.43 over the past 52 weeks.
The Financial Times reported Wednesday that the Qatar Investment Authority was considering buying a portion of Treasury's stake in Citi.
Treasury purchased the common stock in the summer of 2009 at a share price of $3.25. It received the original 7.7 billion shares of Citigroup common stock, which amounted to 27 percent of the company, in return for an investment of $25 billion in the company.
Citi, one of the hardest-hit banks during the financial crisis, received $45 billion in bailout money. That was one of the largest rescues by the government.
Of the $45 billion, $25 billion was converted to a government ownership stake in Citi last summer. The bank repaid the other $20 billion in December.
AP Business Writer Marcy Gordon contributed to this report.
WASHINGTON (AP) -- The Treasury Department said Wednesday it raised $6.2 billion from the sale of 1.5 billion shares of Citigroup stock it received as part of the government's rescue of the bank.
The sales took place over the past month and represented 19.5 percent of the government's holdings of Citigroup common stock.
Treasury said it has triggered a second round of stock sales through its agent, Morgan Stanley. That will involve an additional 1.5 billion shares.
The government said it would not sell shares during the blackout period set by Citigroup in advance of its second quarter earnings release. That period is expected to begin on July 1. Treasury has previously said it hopes to sell all of its Citigroup shares this year.
The sales are the government's latest move to recoup the costs of the $700 billion financial bailout.
The stock sold for an average price per share of around $4.33, Treasury said.
Citi stock finished at $3.86 in regular trading Wednesday, up 8 cents from Tuesday's close. The stock has traded in a range of $2.55 to $5.43 over the past 52 weeks.
The Financial Times reported Wednesday that the Qatar Investment Authority was considering buying a portion of Treasury's stake in Citi.
Treasury purchased the common stock in the summer of 2009 at a share price of $3.25. It received the original 7.7 billion shares of Citigroup common stock, which amounted to 27 percent of the company, in return for an investment of $25 billion in the company.
Citi, one of the hardest-hit banks during the financial crisis, received $45 billion in bailout money. That was one of the largest rescues by the government.
Of the $45 billion, $25 billion was converted to a government ownership stake in Citi last summer. The bank repaid the other $20 billion in December.
AP Business Writer Marcy Gordon contributed to this report.
FA...Stocks give up early gains and end lower after the euro sinks again; Dow closes under 10,000
Tim Paradis, AP Business Writers, On Wednesday May 26, 2010, 6:14 pm
NEW YORK (AP) -- A drop in the euro set off a late-day slide in stocks Wednesday and sent the Dow Jones industrial average to its first close below 10,000 in nearly four months.
The Dow, up 135 points in morning trading, ended down about 69. It was the eighth drop for the Dow in 10 days. Wednesday's trading extended a streak of volatility since stocks went to their highest level of the year in late April.
The late reversal underscored how jittery traders are about Europe. They are worried that heavy debt loads in European countries and more rounds of cost-cutting will hamper a recovery there, which could spread quickly to other regions.
"We had a nice rally all day and we expected it to have had legs," said Phillip Orlando, chief equity market strategist at Federated investors in New York, which manages about $400 billion. The sudden sell-off, he said, suggests "that investors are as nervous as a long-tailed cat in a roomful of rocking chairs."
The euro fell in late trading, pulling major stock indexes lower, following a Financial Times report that China is reviewing its holdings of European government bonds because of the crisis in government debt there.
China has been seeking ways to diversify its massive foreign exchange holdings out of dollars for some time. However any indication that it was losing confidence in the euro, leading it to sell some portion of its European bond holdings, would deliver a major blow to the European currency.
The sliding euro has become a symbol of waning confidence in Europe's ability to contain its debt problems. The euro remains close to the four-year low it hit last week. It fell to $1.2179 Wednesday.
"The inability of the market to hang on to the early gains today certainly does not send a very positive message," said Teddy Weisberg, a New York Stock Exchange floor trader with Seaport Securities. "It's a function of there being no confidence among investors."
The Dow fell 69.30, or 0.7 percent, to 9,974.45. It was the first close below 10,000 since Feb. 8 when the Dow finished at 9,908.
The broader Standard & Poor's 500 index fell 6.08, or 0.6 percent, to 1,067.95. The Nasdaq composite index closed down 15.07, or 0.7 percent, to 2,195.88.
About two stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 7.1 billion shares, compared with 7.4 billion traded Tuesday.
Treasury prices pared an early slide as investors late in the day went back in search of safe investments. The yield on the benchmark 10-year Treasury note rose to 3.19 percent from 3.16 percent late Tuesday.
Crude oil rose $2.76 to $71.51 per barrel on the New York Mercantile Exchange. Gold rose.
The stock slump at day's end marked an opposite to the pattern seen on Tuesday, when traders chipped away at a steep slide by the close and the major indexes ended little changed.
The slide in stocks has rattled investors still shaken by the market's plunge in late 2008 and early 2009.
"Everyone is so scared from what happened back in the big crash and now they're just all gun-shy," said Frank Ingarra, co-portfolio manager at Hennessy Funds.
Stocks were higher for most of the day after traders focused on economic news. Two reports from the Commerce Department offered the latest evidence that the U.S. economy is improving. Orders for big-ticket manufactured goods rose 2.9 percent last month. It was the biggest jump in three months and more than double the gain economists polled by Thomson Reuters had forecast.
U.S. manufacturing has been strong throughout the recovery. April's figures were boosted by a big rise in transportation orders. Excluding transportation, orders fell 1 percent.
The government also said that sales of new single-family homes rose 14.8 percent to an annual rate of 504,000 units after buyers raced to secure an expiring tax credit. That followed a 29.8 percent rise in March that was the biggest increase in 47 years. The latest gain was well ahead of estimates.
The slide in stocks extended their slump for May. At its 2010 high last month, the Dow was up 71.2 from a 12-year low in March 2009. Since then, it's fallen 1,231 points, or 11 percent.
A drop of more than 10 percent from a peak in short order is considered by most analysts a "correction."
Kevin Giddis, managing director of fixed income at Morgan Keegan in Memphis, said the slide in stocks and the rush to Treasurys has been overdone. The economic numbers confirm that the economy is in far better shape than it was two years ago when Lehman Brothers collapsed and credit evaporated.
"It is a giant fear trade that is being overblown," he said.
Among technology stocks, Apple Inc. moved ahead of Microsoft Corp. as the world's largest tech company by the value of its outstanding shares.
Apple fell $1.11, or 0.5 percent, to $244.11, while Microsoft fell $1.06, or 4.1 percent, to $25.01. That put Apple's market capitalization at $222 billion compared with $219 billion for Microsoft. Apple is now the No. 2 U.S. company by market capitalization behind Exxon Mobile Corp.
The Russell 2000 index of smaller companies rose 2.60, or 0.4 percent, to 642.62.
Major European indexes snapped back after big losses Tuesday. Britain's FTSE 100 gained 2 percent, Germany's DAX index rose 1.6 percent, and France's CAC-40 climbed 2.3 percent.
Business Writer Stevenson Jacobs contributed to this report.
NEW YORK (AP) -- A drop in the euro set off a late-day slide in stocks Wednesday and sent the Dow Jones industrial average to its first close below 10,000 in nearly four months.
The Dow, up 135 points in morning trading, ended down about 69. It was the eighth drop for the Dow in 10 days. Wednesday's trading extended a streak of volatility since stocks went to their highest level of the year in late April.
The late reversal underscored how jittery traders are about Europe. They are worried that heavy debt loads in European countries and more rounds of cost-cutting will hamper a recovery there, which could spread quickly to other regions.
"We had a nice rally all day and we expected it to have had legs," said Phillip Orlando, chief equity market strategist at Federated investors in New York, which manages about $400 billion. The sudden sell-off, he said, suggests "that investors are as nervous as a long-tailed cat in a roomful of rocking chairs."
The euro fell in late trading, pulling major stock indexes lower, following a Financial Times report that China is reviewing its holdings of European government bonds because of the crisis in government debt there.
China has been seeking ways to diversify its massive foreign exchange holdings out of dollars for some time. However any indication that it was losing confidence in the euro, leading it to sell some portion of its European bond holdings, would deliver a major blow to the European currency.
The sliding euro has become a symbol of waning confidence in Europe's ability to contain its debt problems. The euro remains close to the four-year low it hit last week. It fell to $1.2179 Wednesday.
"The inability of the market to hang on to the early gains today certainly does not send a very positive message," said Teddy Weisberg, a New York Stock Exchange floor trader with Seaport Securities. "It's a function of there being no confidence among investors."
The Dow fell 69.30, or 0.7 percent, to 9,974.45. It was the first close below 10,000 since Feb. 8 when the Dow finished at 9,908.
The broader Standard & Poor's 500 index fell 6.08, or 0.6 percent, to 1,067.95. The Nasdaq composite index closed down 15.07, or 0.7 percent, to 2,195.88.
About two stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 7.1 billion shares, compared with 7.4 billion traded Tuesday.
Treasury prices pared an early slide as investors late in the day went back in search of safe investments. The yield on the benchmark 10-year Treasury note rose to 3.19 percent from 3.16 percent late Tuesday.
Crude oil rose $2.76 to $71.51 per barrel on the New York Mercantile Exchange. Gold rose.
The stock slump at day's end marked an opposite to the pattern seen on Tuesday, when traders chipped away at a steep slide by the close and the major indexes ended little changed.
The slide in stocks has rattled investors still shaken by the market's plunge in late 2008 and early 2009.
"Everyone is so scared from what happened back in the big crash and now they're just all gun-shy," said Frank Ingarra, co-portfolio manager at Hennessy Funds.
Stocks were higher for most of the day after traders focused on economic news. Two reports from the Commerce Department offered the latest evidence that the U.S. economy is improving. Orders for big-ticket manufactured goods rose 2.9 percent last month. It was the biggest jump in three months and more than double the gain economists polled by Thomson Reuters had forecast.
U.S. manufacturing has been strong throughout the recovery. April's figures were boosted by a big rise in transportation orders. Excluding transportation, orders fell 1 percent.
The government also said that sales of new single-family homes rose 14.8 percent to an annual rate of 504,000 units after buyers raced to secure an expiring tax credit. That followed a 29.8 percent rise in March that was the biggest increase in 47 years. The latest gain was well ahead of estimates.
The slide in stocks extended their slump for May. At its 2010 high last month, the Dow was up 71.2 from a 12-year low in March 2009. Since then, it's fallen 1,231 points, or 11 percent.
A drop of more than 10 percent from a peak in short order is considered by most analysts a "correction."
Kevin Giddis, managing director of fixed income at Morgan Keegan in Memphis, said the slide in stocks and the rush to Treasurys has been overdone. The economic numbers confirm that the economy is in far better shape than it was two years ago when Lehman Brothers collapsed and credit evaporated.
"It is a giant fear trade that is being overblown," he said.
Among technology stocks, Apple Inc. moved ahead of Microsoft Corp. as the world's largest tech company by the value of its outstanding shares.
Apple fell $1.11, or 0.5 percent, to $244.11, while Microsoft fell $1.06, or 4.1 percent, to $25.01. That put Apple's market capitalization at $222 billion compared with $219 billion for Microsoft. Apple is now the No. 2 U.S. company by market capitalization behind Exxon Mobile Corp.
The Russell 2000 index of smaller companies rose 2.60, or 0.4 percent, to 642.62.
Major European indexes snapped back after big losses Tuesday. Britain's FTSE 100 gained 2 percent, Germany's DAX index rose 1.6 percent, and France's CAC-40 climbed 2.3 percent.
Business Writer Stevenson Jacobs contributed to this report.
Wednesday, May 26, 2010
Home prices fall 0.5 percent from February to March, raising fears of a new bottom
J.W. Elphinstone, AP Real Estate Writer, On Tuesday May 25, 2010, 4:44 pm EDT
NEW YORK (AP) -- The housing slump isn't over.
Tax credits and historically low mortgage rates have failed to lift home prices so far this year. Prices fell 0.5 percent in March from February, according to the Standard & Poor's/Case-Shiller 20-city index released Tuesday.
That marks six straight months of declines -- a sign that the housing market is going in reverse.
"It looks a little like a double-dip already," economist Robert Shiller said in an interview. "There is a very real possibility of some more decline."
The co-creator of the Case-Shiller index, who predicted in 2005 that the housing bubble would burst, says he worries that home prices rose last year only because of the federal tax credits. That fear is shared by other economists. They note that weak job growth, tight credit and millions more foreclosures ahead will weigh on the home market.
All that is discouraging for homeowners who have seen the value of their largest asset deteriorate sharply over the past three years. Falling home prices tend to curtail consumer spending. And they make it harder for struggling borrowers to refinance into an affordable home loan.
Prices in 13 of the 20 cities tracked by the index fell. Only six metro areas recorded price gains. One, Boston, came in flat.
In the first quarter of 2010, U.S. home prices fell 3.2 percent compared with the fourth quarter.
The numbers are especially disturbing because they show that improved sales due to the tax credits didn't translate into higher prices, said David M. Blitzer, Chairman of the S&P index committee.
Still, falling home prices haven't kept many consumers from maintaining their optimism about the economy.
A separate report Tuesday showed consumer confidence rose in May for the third straight month as hopes for job growth improved. The increase in the Conference Board's Consumer Confidence Index was boosted by consumers' brighter outlook for the next six months.
In a healthier economy, extraordinarily low mortgage rates would pump up demand for homes. But employers aren't creating new jobs fast enough and loans are harder to come by for small businesses and individuals.
On Monday, the National Association of Realtors said sales of previously occupied homes rose 7.6 percent in April. But the sales were aided by the government incentives that have now expired. Economists don't expect the improvements to last.
New buyers were offered a credit worth up to $8,000. Current owners who bought and moved into another home could get a credit for up to $6,500. To receive them, buyers had to have a signed offer by April 30 and must close by the end of June.
Shiller and other economists worry that prices could fall below the levels of April 2009. That was the lowest point since the peak in July 2006.
IHS Global Insight economist Patrick Newport forecasts prices will fall an additional 6 percent to 8 percent and bottom out in the third quarter of next year. Newport said the glut of homes on the market is the main reason. But he's also worried about the rate of foreclosures.
"When banks foreclose, they sell the properties at deep discounts," Newport said. "Foreclosures have either peaked in the first quarter or are going to peak soon, but they will remain very high for several years."
Mortgage delinquencies reached a record high in the first quarter. More than 10 percent of homeowners with a mortgage missed at least one payment from January through March, the Mortgage Bankers Association said last week.
Since 2006, nearly 5 million homes have been lost to foreclosures or other distressed sales, according to Mark Zandi, chief economist at Moody's Analytics. Zandi expects 3 million more to hit the market over the next two years.
Zandi noted that 15 million homeowners still owe more than their homes are worth. And 26 million Americans are either unemployed or underemployed. The underemployed include people who have given up looking for work and part-timers who would prefer to be working full time.
NEW YORK (AP) -- The housing slump isn't over.
Tax credits and historically low mortgage rates have failed to lift home prices so far this year. Prices fell 0.5 percent in March from February, according to the Standard & Poor's/Case-Shiller 20-city index released Tuesday.
That marks six straight months of declines -- a sign that the housing market is going in reverse.
"It looks a little like a double-dip already," economist Robert Shiller said in an interview. "There is a very real possibility of some more decline."
The co-creator of the Case-Shiller index, who predicted in 2005 that the housing bubble would burst, says he worries that home prices rose last year only because of the federal tax credits. That fear is shared by other economists. They note that weak job growth, tight credit and millions more foreclosures ahead will weigh on the home market.
All that is discouraging for homeowners who have seen the value of their largest asset deteriorate sharply over the past three years. Falling home prices tend to curtail consumer spending. And they make it harder for struggling borrowers to refinance into an affordable home loan.
Prices in 13 of the 20 cities tracked by the index fell. Only six metro areas recorded price gains. One, Boston, came in flat.
In the first quarter of 2010, U.S. home prices fell 3.2 percent compared with the fourth quarter.
The numbers are especially disturbing because they show that improved sales due to the tax credits didn't translate into higher prices, said David M. Blitzer, Chairman of the S&P index committee.
Still, falling home prices haven't kept many consumers from maintaining their optimism about the economy.
A separate report Tuesday showed consumer confidence rose in May for the third straight month as hopes for job growth improved. The increase in the Conference Board's Consumer Confidence Index was boosted by consumers' brighter outlook for the next six months.
In a healthier economy, extraordinarily low mortgage rates would pump up demand for homes. But employers aren't creating new jobs fast enough and loans are harder to come by for small businesses and individuals.
On Monday, the National Association of Realtors said sales of previously occupied homes rose 7.6 percent in April. But the sales were aided by the government incentives that have now expired. Economists don't expect the improvements to last.
New buyers were offered a credit worth up to $8,000. Current owners who bought and moved into another home could get a credit for up to $6,500. To receive them, buyers had to have a signed offer by April 30 and must close by the end of June.
Shiller and other economists worry that prices could fall below the levels of April 2009. That was the lowest point since the peak in July 2006.
IHS Global Insight economist Patrick Newport forecasts prices will fall an additional 6 percent to 8 percent and bottom out in the third quarter of next year. Newport said the glut of homes on the market is the main reason. But he's also worried about the rate of foreclosures.
"When banks foreclose, they sell the properties at deep discounts," Newport said. "Foreclosures have either peaked in the first quarter or are going to peak soon, but they will remain very high for several years."
Mortgage delinquencies reached a record high in the first quarter. More than 10 percent of homeowners with a mortgage missed at least one payment from January through March, the Mortgage Bankers Association said last week.
Since 2006, nearly 5 million homes have been lost to foreclosures or other distressed sales, according to Mark Zandi, chief economist at Moody's Analytics. Zandi expects 3 million more to hit the market over the next two years.
Zandi noted that 15 million homeowners still owe more than their homes are worth. And 26 million Americans are either unemployed or underemployed. The underemployed include people who have given up looking for work and part-timers who would prefer to be working full time.
FA...Stocks plunge early, then bounce back; Dow finishes above 10,000, but debt worries persist
Tim Paradis and Stevenson Jacobs, AP Business Writers, On Tuesday May 25, 2010, 6:24 pm EDT
NEW YORK (AP) -- The Dow Jones industrials plunged below 10,000 to their lowest level of the year Tuesday before a late-day rebound that erased most of the losses if not lingering worries about Europe's debt crisis.
The Dow dropped more than 250 points after the opening bell and stayed under 10,000 most of the day, then charged back to finish down only 22 when signals from Washington suggested that banks would not be forced to sell their lucrative derivatives units as part of financial reform. The Standard & Poor's 500 index even managed a slight gain.
But more turbulent days are likely. The market worries that even austerity measures by European governments will not be enough to fix the problem and fight off a prolonged economic slump in Europe, or even another global recession.
"It seems like the Europeans are playing 'tag, you're it' -- first it was Greece, and now it's maybe Spain or Portugal," said Jonathan Corpina, a New York Stock Exchange floor trader and president of Meridian Equity Partners.
"We know someone else is next. The problem is that it seems like every plan in place isn't going to satisfy the needs," he said.
Britain's Queen Elizabeth opened Parliament with a warning of hard times, saying in a speech on behalf of Britain's new government that there would be budget cuts because "the first priority is to reduce the deficit and restore economic growth."
Other European countries are imposing budget cuts as well, trying to control their debt. Investors are concerned that these steps will stifle economic growth, and that the growth of other countries, including the U.S., will inevitably be stunted.
Besides the financial crisis in Europe, investors were reminded that political issues, such as tension between North and South Korea, can threaten economic growth. Analysts said the unresolved Gulf of Mexico oil spill also contributed to the foul mood.
It was enough to send stocks into a deep dive. In just the first half-hour of trading, the Dow sank to 9,774.48, its lowest reading this year, and for much of the day threatened to set a new closing low for the year. The average is down more than 10 percent in just the past month.
But bank stocks surged, and the rest of the market followed, after Rep. Barney Frank, chairman of the House Financial Services Committee, suggested financial companies should not have to spin off their derivatives businesses, as a Senate provision would have them do.
Frank, D-Mass., said he believes banks should be able to use the complex financial instruments to hedge their own risks. Bank regulators and Obama administration officials also oppose the Senate provision, which was inserted by Sen. Blanche Lincoln, D-Ark.
The Dow has only closed below 10,000 once this year, in early February. Since then, it has traded below 10,000 seven times but each time managed to push above that psychological barrier by the close.
On Tuesday, the Dow finished down 22.82 at 10,043.75. The Nasdaq composite index closed down 2.60 at 2,210.95, and the S&P 500 gained 0.38 to close at 1,074.03.
Investors also fled from the euro and commodities including oil, and again sought safety in government bonds. That drove interest rates lower. The benchmark 10-year note's yield fell to its lowest level since April 2009.
The market's continuing slide, with frequent triple-digit drops in the Dow, recalls the unrelenting selling of the 2008 financial crash -- and begs the question of what can halt the plunge.
Jim Dunigan, managing executive of investments for PNC Wealth Management, said good news about jobs or corporate earnings could stabilize stocks by signaling that a U.S. recovery is intact.
The government's monthly jobs report in less than two weeks is expected to show that employers are ramping up hiring further. And companies will soon start giving hints about profits for the quarter that ends in June.
"You could derail growth in Europe and not derail growth in the United States, but people don't necessary use a lot of logic when they're headed to the exits," Dunigan said.
For now, traders are unswayed by upbeat U.S. economic news. They ignored a better-than-expected report Tuesday showing consumer confidence index rose for the third straight month.
"Market participants feel like they're walking on eggshells," said Oliver Pursche, executive vice president at Gary Goldberg Financial Services in Suffern, N.Y. "Every small piece of potentially bad news is being exaggerated and mentally being fast-forwarded to the worst-case scenario."
Meanwhile, the monthlong effort to cap the BP oil well that has spewed millions of gallons of oil into the Gulf of Mexico is also rattling investors, Corpina said. Oil is coming ashore across a 150-mile swath of the Gulf Coast, endangering wildlife and livelihoods in commercial fishing and tourism.
"The worry is that the situation is getting worse and there's no real fix," he said. "First we were just talking about the oil industry being affected. Now it's the environment and fishing industries. Next we'll be talking about the hotel and leisure industries."
A disappointing report on home prices added to the downcast mood. The Standard & Poor's/Case-Shiller 20-city home price index fell 0.5 percent in March from February, a sign the housing market remains weak even with mortgage rates near historic lows.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.17 percent from 3.20 percent late Monday. It fell as low as 3.07 percent, its lowest level since April 2009.
The yield on the 30-year bond briefly fell below 4 percent for the first time since October, before rising slightly. It is down to 4.07 percent from 4.08 percent late Monday.
Crude oil fell $1.06 to $69.16 a barrel on the New York Mercantile Exchange, in part a reflection of expectations that weak economic growth will curtail demand for fuel.
Overseas markets were also down sharply. Britain's FTSE 100 dropped 2.5 percent, Germany's DAX index lost 2.3 percent, and France's CAC-40 plummeted 2.9 percent. Japan's Nikkei stock average fell 3.1 percent. Hong Kong's Hang Seng fell 3.3 percent.
Associated Press writer Jim Kuhnhenn in Washington contributed to this report.
NEW YORK (AP) -- The Dow Jones industrials plunged below 10,000 to their lowest level of the year Tuesday before a late-day rebound that erased most of the losses if not lingering worries about Europe's debt crisis.
The Dow dropped more than 250 points after the opening bell and stayed under 10,000 most of the day, then charged back to finish down only 22 when signals from Washington suggested that banks would not be forced to sell their lucrative derivatives units as part of financial reform. The Standard & Poor's 500 index even managed a slight gain.
But more turbulent days are likely. The market worries that even austerity measures by European governments will not be enough to fix the problem and fight off a prolonged economic slump in Europe, or even another global recession.
"It seems like the Europeans are playing 'tag, you're it' -- first it was Greece, and now it's maybe Spain or Portugal," said Jonathan Corpina, a New York Stock Exchange floor trader and president of Meridian Equity Partners.
"We know someone else is next. The problem is that it seems like every plan in place isn't going to satisfy the needs," he said.
Britain's Queen Elizabeth opened Parliament with a warning of hard times, saying in a speech on behalf of Britain's new government that there would be budget cuts because "the first priority is to reduce the deficit and restore economic growth."
Other European countries are imposing budget cuts as well, trying to control their debt. Investors are concerned that these steps will stifle economic growth, and that the growth of other countries, including the U.S., will inevitably be stunted.
Besides the financial crisis in Europe, investors were reminded that political issues, such as tension between North and South Korea, can threaten economic growth. Analysts said the unresolved Gulf of Mexico oil spill also contributed to the foul mood.
It was enough to send stocks into a deep dive. In just the first half-hour of trading, the Dow sank to 9,774.48, its lowest reading this year, and for much of the day threatened to set a new closing low for the year. The average is down more than 10 percent in just the past month.
But bank stocks surged, and the rest of the market followed, after Rep. Barney Frank, chairman of the House Financial Services Committee, suggested financial companies should not have to spin off their derivatives businesses, as a Senate provision would have them do.
Frank, D-Mass., said he believes banks should be able to use the complex financial instruments to hedge their own risks. Bank regulators and Obama administration officials also oppose the Senate provision, which was inserted by Sen. Blanche Lincoln, D-Ark.
The Dow has only closed below 10,000 once this year, in early February. Since then, it has traded below 10,000 seven times but each time managed to push above that psychological barrier by the close.
On Tuesday, the Dow finished down 22.82 at 10,043.75. The Nasdaq composite index closed down 2.60 at 2,210.95, and the S&P 500 gained 0.38 to close at 1,074.03.
Investors also fled from the euro and commodities including oil, and again sought safety in government bonds. That drove interest rates lower. The benchmark 10-year note's yield fell to its lowest level since April 2009.
The market's continuing slide, with frequent triple-digit drops in the Dow, recalls the unrelenting selling of the 2008 financial crash -- and begs the question of what can halt the plunge.
Jim Dunigan, managing executive of investments for PNC Wealth Management, said good news about jobs or corporate earnings could stabilize stocks by signaling that a U.S. recovery is intact.
The government's monthly jobs report in less than two weeks is expected to show that employers are ramping up hiring further. And companies will soon start giving hints about profits for the quarter that ends in June.
"You could derail growth in Europe and not derail growth in the United States, but people don't necessary use a lot of logic when they're headed to the exits," Dunigan said.
For now, traders are unswayed by upbeat U.S. economic news. They ignored a better-than-expected report Tuesday showing consumer confidence index rose for the third straight month.
"Market participants feel like they're walking on eggshells," said Oliver Pursche, executive vice president at Gary Goldberg Financial Services in Suffern, N.Y. "Every small piece of potentially bad news is being exaggerated and mentally being fast-forwarded to the worst-case scenario."
Meanwhile, the monthlong effort to cap the BP oil well that has spewed millions of gallons of oil into the Gulf of Mexico is also rattling investors, Corpina said. Oil is coming ashore across a 150-mile swath of the Gulf Coast, endangering wildlife and livelihoods in commercial fishing and tourism.
"The worry is that the situation is getting worse and there's no real fix," he said. "First we were just talking about the oil industry being affected. Now it's the environment and fishing industries. Next we'll be talking about the hotel and leisure industries."
A disappointing report on home prices added to the downcast mood. The Standard & Poor's/Case-Shiller 20-city home price index fell 0.5 percent in March from February, a sign the housing market remains weak even with mortgage rates near historic lows.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.17 percent from 3.20 percent late Monday. It fell as low as 3.07 percent, its lowest level since April 2009.
The yield on the 30-year bond briefly fell below 4 percent for the first time since October, before rising slightly. It is down to 4.07 percent from 4.08 percent late Monday.
Crude oil fell $1.06 to $69.16 a barrel on the New York Mercantile Exchange, in part a reflection of expectations that weak economic growth will curtail demand for fuel.
Overseas markets were also down sharply. Britain's FTSE 100 dropped 2.5 percent, Germany's DAX index lost 2.3 percent, and France's CAC-40 plummeted 2.9 percent. Japan's Nikkei stock average fell 3.1 percent. Hong Kong's Hang Seng fell 3.3 percent.
Associated Press writer Jim Kuhnhenn in Washington contributed to this report.
FA...FOREX
The Signal Were Correct
The trade desk highlighted that there were signals coming against the long-Usd trend earlier in the week, but they were negated by the latest drop lower in global equity trade on Monday. Tuesday reversed that, with global equity futures trade finding support, and moving higher. That played out in the form of oversold major currencies finding buyers, and reversing overnight negativity.
We are starting to get the same 4-hour chart signals that cropped up on Monday, but this time they have volume, and a clear fundamental calendar that may allow them to follow through for a 150-200 pip move.
The key to further appreciation on the major currencies, and some near-term Usd weakness following through, will be whether the S/P futures market can hold above 1075. If so, and a move towards 1100 can take place, the major pairs may even form a near term trend reversal.
The pairs signaling on the 4-hour, although they are still against the trend, are Long Gbp/Usd, Gbp/Jpy, Usd/Jpy, Aud/Jpy, and Short Usd/Cad. Signal detail will follow soon after 17:00 ET.
The dollar index (DXY) failed to break the 87.00 area, and is looking to reverse off price points last seen in January 2009.
These form a yearly chart triple top that connects trade from 2005, which will be tough to break. As the global growth story unwinds, the move to Usd based Treasury notes is in place, but overbought, fueled by a desire to be long safety, at the cost of yield. Speculative interest may n=move out of the Usd in the near-term as May profit is banked.
Any positive potential in equity markets being able to hold support will be confirmed with the Japanese Nikkei moving higher through 9650 and the German Dax holding 5750 support. Both regional market moves would allow the S/P futures traders to dmove price action up and through 1075 and hold there. That would pressure the short side of the Usd.
Short-sided speculative interest in West Texas Intermediate has managed to hold price action below $70, which is now a swing point high of note. The ease in which sentiment changed from bullish outlooks on global growth to a very negative view has empowered those on the short side of oil, and aided the ease in which the Usd was been bought.
The need to hedge the long-Usd environment allowed gold trade to move higher and stake a claim to be a stand-alone asset class that seems to have few peers when global expansion is in doubt. The GLD/USD correlation is holding strong as both Usd and Bullion reserves are seen as a near-term safe haven.
The trade desk highlighted that there were signals coming against the long-Usd trend earlier in the week, but they were negated by the latest drop lower in global equity trade on Monday. Tuesday reversed that, with global equity futures trade finding support, and moving higher. That played out in the form of oversold major currencies finding buyers, and reversing overnight negativity.
We are starting to get the same 4-hour chart signals that cropped up on Monday, but this time they have volume, and a clear fundamental calendar that may allow them to follow through for a 150-200 pip move.
The key to further appreciation on the major currencies, and some near-term Usd weakness following through, will be whether the S/P futures market can hold above 1075. If so, and a move towards 1100 can take place, the major pairs may even form a near term trend reversal.
The pairs signaling on the 4-hour, although they are still against the trend, are Long Gbp/Usd, Gbp/Jpy, Usd/Jpy, Aud/Jpy, and Short Usd/Cad. Signal detail will follow soon after 17:00 ET.
The dollar index (DXY) failed to break the 87.00 area, and is looking to reverse off price points last seen in January 2009.
These form a yearly chart triple top that connects trade from 2005, which will be tough to break. As the global growth story unwinds, the move to Usd based Treasury notes is in place, but overbought, fueled by a desire to be long safety, at the cost of yield. Speculative interest may n=move out of the Usd in the near-term as May profit is banked.
Any positive potential in equity markets being able to hold support will be confirmed with the Japanese Nikkei moving higher through 9650 and the German Dax holding 5750 support. Both regional market moves would allow the S/P futures traders to dmove price action up and through 1075 and hold there. That would pressure the short side of the Usd.
Short-sided speculative interest in West Texas Intermediate has managed to hold price action below $70, which is now a swing point high of note. The ease in which sentiment changed from bullish outlooks on global growth to a very negative view has empowered those on the short side of oil, and aided the ease in which the Usd was been bought.
The need to hedge the long-Usd environment allowed gold trade to move higher and stake a claim to be a stand-alone asset class that seems to have few peers when global expansion is in doubt. The GLD/USD correlation is holding strong as both Usd and Bullion reserves are seen as a near-term safe haven.
Tuesday, May 25, 2010
What matters most?
May 21, 2010
"I call heaven and earth to witness against you today, that I have set before you life and death, blessing and curse. Therefore choose life, that you and your offspring may live..."
--Deuteronomy 30:19
There's a popular inspirational reading that captures some of the things that really matter most in life. It says at the end of your life...
"What will matter most is...
not what you bought, but what you built.
not what you got, but what you gave.
not your success, but your significance.
not that you learned, but that you taught.
not your competence, but your character.
not your memories, but the memories that live on in those who love you.
Living a life that matters doesn't happen by accident. Life's not a matter of circumstance, but of choice. Choose to live a life that matters."
So what has mattered most in your life up until now? Do you know? Has it been your job... your family... your conquests? Listen, regardless of the past, God is saying to you right now, "Choose me... choose life today."
Now you might say, "I've got questions." That's okay, come with your questions. Or you might say, "Well, I have issues that I need to take care of first." No, just come like you are and let him take care of everything.
Let Jesus wash your sins away and give you a new life in him. There is nothing more important than that.
GOD IS SAYING TO YOU RIGHT NOW, "CHOOSE ME...
CHOOSE LIFE TODAY."
--------------------------------------------------------------------------------
For more from PowerPoint Ministries and Dr. Jack Graham, please visit www.jackgraham.org
"I call heaven and earth to witness against you today, that I have set before you life and death, blessing and curse. Therefore choose life, that you and your offspring may live..."
--Deuteronomy 30:19
There's a popular inspirational reading that captures some of the things that really matter most in life. It says at the end of your life...
"What will matter most is...
not what you bought, but what you built.
not what you got, but what you gave.
not your success, but your significance.
not that you learned, but that you taught.
not your competence, but your character.
not your memories, but the memories that live on in those who love you.
Living a life that matters doesn't happen by accident. Life's not a matter of circumstance, but of choice. Choose to live a life that matters."
So what has mattered most in your life up until now? Do you know? Has it been your job... your family... your conquests? Listen, regardless of the past, God is saying to you right now, "Choose me... choose life today."
Now you might say, "I've got questions." That's okay, come with your questions. Or you might say, "Well, I have issues that I need to take care of first." No, just come like you are and let him take care of everything.
Let Jesus wash your sins away and give you a new life in him. There is nothing more important than that.
GOD IS SAYING TO YOU RIGHT NOW, "CHOOSE ME...
CHOOSE LIFE TODAY."
--------------------------------------------------------------------------------
For more from PowerPoint Ministries and Dr. Jack Graham, please visit www.jackgraham.org
When We Are Lonely
Hebrews 13:1-5
God created humanity for companionship with Himself and each other. He doesn't want people to suffer the emotional turmoil of loneliness. That's why His Word contains pledges of His constant presence as well as instructions to prevent loneliness among church members.
The Lord stressed His constant presence because He knows our need for assurance, especially when we feel deserted or isolated. His vow never to forsake believers is found throughout the Bible: He spoke this comforting word to Joshua, the Israelites, and the disciples who were about to witness Jesus' ascension (Josh. 1:5; Matt. 28:20). Some biblical saints picked up the theme in their writing as well. David often sought God's solace (Ps. 25:16). And Paul preached that nothing compared to drawing close to Christ (Phil. 3:8). God wants every believer to implicitly trust that He is near.
The church is designed to meet our need for person-to-person intimacy. A spiritual body works much like a human body—parts are both independent and interdependent, each needing others in order to function well. We require support from our brothers and sisters in Christ. Knowing this, Paul admonished people to accept one another (Rom. 15:7), bear each other's burdens (Gal. 6:2), and avoid judging (Rom. 14:13).
Loneliness can cripple a person emotionally and spiritually. Human beings are not designed to walk through this world alone. We are made for relationship, which God gladly supplies. Lest we forget that the Lord is near, He gave the Bible this consistent theme: I love you and I am with you always.
For more biblical teaching and resources from Dr. Charles Stanley, please visit www.intouch.org.
God created humanity for companionship with Himself and each other. He doesn't want people to suffer the emotional turmoil of loneliness. That's why His Word contains pledges of His constant presence as well as instructions to prevent loneliness among church members.
The Lord stressed His constant presence because He knows our need for assurance, especially when we feel deserted or isolated. His vow never to forsake believers is found throughout the Bible: He spoke this comforting word to Joshua, the Israelites, and the disciples who were about to witness Jesus' ascension (Josh. 1:5; Matt. 28:20). Some biblical saints picked up the theme in their writing as well. David often sought God's solace (Ps. 25:16). And Paul preached that nothing compared to drawing close to Christ (Phil. 3:8). God wants every believer to implicitly trust that He is near.
The church is designed to meet our need for person-to-person intimacy. A spiritual body works much like a human body—parts are both independent and interdependent, each needing others in order to function well. We require support from our brothers and sisters in Christ. Knowing this, Paul admonished people to accept one another (Rom. 15:7), bear each other's burdens (Gal. 6:2), and avoid judging (Rom. 14:13).
Loneliness can cripple a person emotionally and spiritually. Human beings are not designed to walk through this world alone. We are made for relationship, which God gladly supplies. Lest we forget that the Lord is near, He gave the Bible this consistent theme: I love you and I am with you always.
For more biblical teaching and resources from Dr. Charles Stanley, please visit www.intouch.org.
Regulators focus on big trading firms that may have pulled back during market plunge
WASHINGTON (AP) -- Federal regulators said Monday they are looking at whether big trading firms abandoned the market during the massive sell-off on May 6 rather than providing cash support required under law.
Staff of the Securities and Exchange Commission said the possible retreat of big "liquidity providers" during the market plunge is an area of focus in the investigation. Major securities firms are required by law to remain in the market by buying and selling stocks; high-speed electronic trading firms are not.
Some firms that act as liquidity providers stopped doing so during the freefall, the SEC officials found.
Those findings were presented at the first meeting of a special advisory committee to the SEC and Commodity Futures Trading Commission. The panel is examining what sent the Dow Jones industrials down nearly 1,000 points in less than 30 minutes.
At the meeting, panel members also pressed staff about the nearly 21,000 trades that were canceled because the exchanges deemed them erroneous after the plunge.
Staff said nearly all the broken trades involved so-called "stub quotes," used by market makers as placeholders and often far above or below actual stock values. The SEC staff is considering whether stub quotes should be curbed or banned.
SEC Chairman Mary Schapiro said last week the agency is examining whether decisions to cancel trades were made fairly and plans to propose new rules for cancellation. Executives from the major U.S. exchanges are expected to meet with the SEC this week to discuss the issue.
The panel also questioned the role of "stop-loss" market orders in the slide. Stop-loss orders set the price at which a stock is automatically sold when it declines to a specified level. Many investors used them to protect themselves in the market freefall.
Last week, the SEC and the exchanges unveiled a plan to adopt "circuit breakers" to pause trading during periods of high volatility. Under the plan, trading of any Standard & Poor's 500 stock that rises or falls 10 percent or more within a five-minute period would be halted for five minutes. The rules would be applied if the price swing occurs between 9:45 a.m. and 3:35 p.m. Eastern time -- nearly the entire trading day.
The break is intended to head off a chain reaction of human and computerized selling, one of several possible causes of the May 6 plunge. The drop briefly wiped out $1 trillion in market value as some stocks traded as low as a penny.
Investigators are focusing on a possible link between the steep decline in prices of stock indexes, and "simultaneous and subsequent" waves of selling in individual stocks.
Also being looked at is a "severe mismatch" of liquidity in the market that may have been worsened by the withdrawal of electronic traders, a report by staff of the two agencies says.
Staff of the Securities and Exchange Commission said the possible retreat of big "liquidity providers" during the market plunge is an area of focus in the investigation. Major securities firms are required by law to remain in the market by buying and selling stocks; high-speed electronic trading firms are not.
Some firms that act as liquidity providers stopped doing so during the freefall, the SEC officials found.
Those findings were presented at the first meeting of a special advisory committee to the SEC and Commodity Futures Trading Commission. The panel is examining what sent the Dow Jones industrials down nearly 1,000 points in less than 30 minutes.
At the meeting, panel members also pressed staff about the nearly 21,000 trades that were canceled because the exchanges deemed them erroneous after the plunge.
Staff said nearly all the broken trades involved so-called "stub quotes," used by market makers as placeholders and often far above or below actual stock values. The SEC staff is considering whether stub quotes should be curbed or banned.
SEC Chairman Mary Schapiro said last week the agency is examining whether decisions to cancel trades were made fairly and plans to propose new rules for cancellation. Executives from the major U.S. exchanges are expected to meet with the SEC this week to discuss the issue.
The panel also questioned the role of "stop-loss" market orders in the slide. Stop-loss orders set the price at which a stock is automatically sold when it declines to a specified level. Many investors used them to protect themselves in the market freefall.
Last week, the SEC and the exchanges unveiled a plan to adopt "circuit breakers" to pause trading during periods of high volatility. Under the plan, trading of any Standard & Poor's 500 stock that rises or falls 10 percent or more within a five-minute period would be halted for five minutes. The rules would be applied if the price swing occurs between 9:45 a.m. and 3:35 p.m. Eastern time -- nearly the entire trading day.
The break is intended to head off a chain reaction of human and computerized selling, one of several possible causes of the May 6 plunge. The drop briefly wiped out $1 trillion in market value as some stocks traded as low as a penny.
Investigators are focusing on a possible link between the steep decline in prices of stock indexes, and "simultaneous and subsequent" waves of selling in individual stocks.
Also being looked at is a "severe mismatch" of liquidity in the market that may have been worsened by the withdrawal of electronic traders, a report by staff of the two agencies says.
FA...Stocks end lower after jitters about financial overhaul bill drag down market; Dow drops 127
Tim Paradis, AP Business Writer, On Monday May 24, 2010, 6:04 pm
NEW YORK (AP) -- Financial companies dragged stocks lower Monday as already anxious investors grew even more uncertain about the U.S. government's financial overhaul plan and debt problems in Europe.
The Dow Jones industrial average slid 80 points in the final 15 minutes of trading to end with a loss of almost 127. It was the lowest close for the Dow since Feb. 10. The Dow and the Standard & Poor's 500 index fell more than 1 percent.
Investors are worried about limits that could be placed on U.S. banks in a final version of the financial overhaul bill. A bill that passed the Senate last week is now being reconciled with the House version. The late drop illustrates how jittery traders are in particular about what will happen in Europe.
"People are afraid to go home and say 'All of the sudden what's going to happen overnight in Europe? Is something new going to pop up?'" said Joe Saluzzi, co-head of equity trading at Themis Trading LLC.
The rescue of a Spanish bank raised investors' uneasiness about Europe's economy. Investors can't shake their concerns that there could be more bank bailouts in Europe if a wave of bad debt cascades through financial markets. It's not clear that will happen, but traders remember well the problems in the U.S. that began with bad subprime loans. Those problems started small but eventually helped take down Lehman Brothers in September 2008.
The Bank of Spain stepped in to rescue Cajasur after it failed to complete a merger. It was only the second time Spain's central bank saved a regional lender. The country is one of those already dealing with ballooning deficits.
Meanwhile, traders still don't have a clear idea about which financial overhaul provisions will remain in the combined House and Senate bill. That is making some traders cautious about betting on financial stocks.
It remains uncertain, for example, whether a final bill will include a Senate provision that would require big banks to sell their derivatives operations. Derivatives are often profitable but risky investments. Derivatives that were tied to mortgages were blamed for worsening the housing crisis.
The Dow fell 126.82, or 1.2 percent, to 10,066.57. The S&P 500 index fell 14.04, or 1.3 percent, to 1,073.65, and the Nasdaq composite index fell 15.49, or 0.7 percent, to 2,213.55.
About three stocks fell for every two that rose on the New York Stock Exchange, where consolidated volume came to came to 8.1 billion shares compared with 2.3 billion Friday.
Bond prices rose. Investors have been flocking to the relative safety of government bonds and have at times dumped riskier assets like stocks and commodities. The yield on the 10-year Treasury note, which moves opposite its price, fell to 3.20 percent from 3.24 percent late Friday.
Gold rose $17.90 to $1,194 an ounce.
Crude oil rose 17 cents to $70.21 per barrel on the New York Mercantile Exchange.
The euro fell against the dollar, dropping to $1.2361. The 16-nation currency has become a symbol of investors' concern about the continent's economy. Traders have been dumping the euro on fears that massive debts will cause a default by a weaker country in the European Union. The euro hit a four-year low against the dollar last week.
Analysts question whether countries like Greece, Spain and Portugal will be able to contain mounting debt through steep spending cuts. Investors are also worried that those budget cuts will upend an economic recovery in Europe and slow a worldwide rebound.
"Right now the U.S. financial markets are trading very much out of fear and not any fundamentals," said Guy LeBas, chief fixed income strategist of Janney Montgomery Scott in Philadelphia.
Despite a rally Friday that lifted the Dow 125 points, major indexes still ended lower last week. Stocks are now trading at about where they were in early February and are down for the year.
Major indexes are down about 10 percent from their highs of the year, set in late April. That size drop is known as a "correction." It's the first retreat of that scale since stocks began a largely uninterrupted advance off of 12-year lows reached in March of 2009.
Mark Coffelt, portfolio manager at Empiric Funds in Austin, Texas, said traders are still cautious about the financial overhaul bill because big changes could disrupt the way financial companies operate.
"We're giving more oversight to the various regulators that failed us before," Coffelt said. He is concerned that tighter rules will constrict the availability of credit and hurt the economy. "Governments aren't looking very competent."
Bank of America Corp. fell 59 cents, or 3.7 percent, to $15.40, while JPMorgan Chase & Co. fell $1.43, or 3.6 percent, to $38.62.
Britain's FTSE 100 rose 0.1 percent, Germany's DAX index dropped 0.4 percent, and France's CAC-40 rose less than 0.1 percent.
Investors brushed off gains in Asia, where China's president said the country will loosen its currency policy. No timetable was given, however. China's Shanghai Composite index jumped 3.5 percent.
(This version CORRECTS SUBS 2nd graf to correct that only Dow and S&P fell more than 1 percent. Edits 9th graf to conform. Stock prices are as of 4 p.m. Eastern Time. Moving on general news and financial services.)
NEW YORK (AP) -- Financial companies dragged stocks lower Monday as already anxious investors grew even more uncertain about the U.S. government's financial overhaul plan and debt problems in Europe.
The Dow Jones industrial average slid 80 points in the final 15 minutes of trading to end with a loss of almost 127. It was the lowest close for the Dow since Feb. 10. The Dow and the Standard & Poor's 500 index fell more than 1 percent.
Investors are worried about limits that could be placed on U.S. banks in a final version of the financial overhaul bill. A bill that passed the Senate last week is now being reconciled with the House version. The late drop illustrates how jittery traders are in particular about what will happen in Europe.
"People are afraid to go home and say 'All of the sudden what's going to happen overnight in Europe? Is something new going to pop up?'" said Joe Saluzzi, co-head of equity trading at Themis Trading LLC.
The rescue of a Spanish bank raised investors' uneasiness about Europe's economy. Investors can't shake their concerns that there could be more bank bailouts in Europe if a wave of bad debt cascades through financial markets. It's not clear that will happen, but traders remember well the problems in the U.S. that began with bad subprime loans. Those problems started small but eventually helped take down Lehman Brothers in September 2008.
The Bank of Spain stepped in to rescue Cajasur after it failed to complete a merger. It was only the second time Spain's central bank saved a regional lender. The country is one of those already dealing with ballooning deficits.
Meanwhile, traders still don't have a clear idea about which financial overhaul provisions will remain in the combined House and Senate bill. That is making some traders cautious about betting on financial stocks.
It remains uncertain, for example, whether a final bill will include a Senate provision that would require big banks to sell their derivatives operations. Derivatives are often profitable but risky investments. Derivatives that were tied to mortgages were blamed for worsening the housing crisis.
The Dow fell 126.82, or 1.2 percent, to 10,066.57. The S&P 500 index fell 14.04, or 1.3 percent, to 1,073.65, and the Nasdaq composite index fell 15.49, or 0.7 percent, to 2,213.55.
About three stocks fell for every two that rose on the New York Stock Exchange, where consolidated volume came to came to 8.1 billion shares compared with 2.3 billion Friday.
Bond prices rose. Investors have been flocking to the relative safety of government bonds and have at times dumped riskier assets like stocks and commodities. The yield on the 10-year Treasury note, which moves opposite its price, fell to 3.20 percent from 3.24 percent late Friday.
Gold rose $17.90 to $1,194 an ounce.
Crude oil rose 17 cents to $70.21 per barrel on the New York Mercantile Exchange.
The euro fell against the dollar, dropping to $1.2361. The 16-nation currency has become a symbol of investors' concern about the continent's economy. Traders have been dumping the euro on fears that massive debts will cause a default by a weaker country in the European Union. The euro hit a four-year low against the dollar last week.
Analysts question whether countries like Greece, Spain and Portugal will be able to contain mounting debt through steep spending cuts. Investors are also worried that those budget cuts will upend an economic recovery in Europe and slow a worldwide rebound.
"Right now the U.S. financial markets are trading very much out of fear and not any fundamentals," said Guy LeBas, chief fixed income strategist of Janney Montgomery Scott in Philadelphia.
Despite a rally Friday that lifted the Dow 125 points, major indexes still ended lower last week. Stocks are now trading at about where they were in early February and are down for the year.
Major indexes are down about 10 percent from their highs of the year, set in late April. That size drop is known as a "correction." It's the first retreat of that scale since stocks began a largely uninterrupted advance off of 12-year lows reached in March of 2009.
Mark Coffelt, portfolio manager at Empiric Funds in Austin, Texas, said traders are still cautious about the financial overhaul bill because big changes could disrupt the way financial companies operate.
"We're giving more oversight to the various regulators that failed us before," Coffelt said. He is concerned that tighter rules will constrict the availability of credit and hurt the economy. "Governments aren't looking very competent."
Bank of America Corp. fell 59 cents, or 3.7 percent, to $15.40, while JPMorgan Chase & Co. fell $1.43, or 3.6 percent, to $38.62.
Britain's FTSE 100 rose 0.1 percent, Germany's DAX index dropped 0.4 percent, and France's CAC-40 rose less than 0.1 percent.
Investors brushed off gains in Asia, where China's president said the country will loosen its currency policy. No timetable was given, however. China's Shanghai Composite index jumped 3.5 percent.
(This version CORRECTS SUBS 2nd graf to correct that only Dow and S&P fell more than 1 percent. Edits 9th graf to conform. Stock prices are as of 4 p.m. Eastern Time. Moving on general news and financial services.)
Monday, May 24, 2010
Where Is God?
by John Piper
This [article was written on the] weekend of the first anniversary of 9/11 that has occurred on the Lord's day, Sunday. Therefore it seemed good to us to step back and pose the question again about the meaning of the supremacy of Christ in an age of terror.
The Supremacy of God in All Things—No Exceptions
One of the truths of the Bible that we embrace with trembling joy is the truth of God's supremacy in all things. The mission of our church is that we exist to spread a passion of the supremacy of God in all things for the joy of all peoples through Jesus Christ. When we say that, we do not mean: "except in calamities," "except in war," "except when Al Qaeda blows up a building or a train," "except when cancer takes a mom or a child is born with profound disabilities." There are no "except" clauses in our mission statement.
We did not formulate our mission in a rosy world—and then get surprised and embarrassed by the reality of suffering. We did not have our head in the sand. We formulated our mission in the real world of pain and suffering and evil and death. We have seen even among our own people, some very peaceful, but also some very terrible deaths. We exist to spread a passion for the supremacy of God in all things—all things—for the joy of all peoples through Jesus Christ—all the time. A passion for God's supremacy—Christ's supremacy (for he is God incarnate)—in all things, all the time.
Sorrowful, Yet Always Rejoicing
None of us who has lived a few decades—for me that means almost six—has embraced this mission without trembling. And none of us has lived this mission for long without tears. We have said it dozens of times here at Bethlehem, and we will say it till we die, that the joy we pursue and the joy we embrace in Jesus Christ is always—always in this world—interwoven with sorrow. There is no unadulterated joy in this world for people who care about others. The Bible describes Christ's servants like this: "[We are] sorrowful, yet always rejoicing." (2 Corinthians 6:10).
"Sorrowful yet always rejoicing." How can that be? It can be because Christ is supreme over all things forever, but suffering and death remain for a while. Life is not simple. There is pleasure, and there is pain. There is sweetness, and there is bitter suffering. There is joy, and there is misery. There is life and health, and there is disease and death. And therefore emotions are not simple. For those who love others, and not just their own comforts, this complexity means that we will rejoice with those who rejoice and weep with those who weep (Romans 12:15). And there is always someone we know who is weeping, and someone we know who is rejoicing. And therefore we will learn the secret of "sorrowful yet always rejoicing"—and joyful yet always sorrowing. Those amazing words that describe the Christian soul—"sorrowful yet always rejoicing"—mean that suffering remains for a while in this world, but Christ is supreme now and forever.
9/11, Hurricane Katrina, and the Constant Suffering in This World
The first plane that hit the World Trade Towers, Flight 11, immediately killed 92 people on board that flight. Flight 175 that hit the second tower a few minutes later killed 65 people on board. In the Towers themselves it appears now that 2,595 people perished when the Towers fell, including those who worked there or visited there, and those who were entering to save them.
Flight 77 carried 64 people when it hit the Pentagon within an hour after the first attack. Inside the Pentagon 125 people died in addition to these 64. Flight 93 with 45 people aboard turned around over Pennsylvania and was headed . . . where? The White House? The Congress? Todd Beamer and others wrestled control from the hijackers, it seems, and the plane crashed with no survivors near Shanksville, Pennsylvania. All 45 people died. The total fatalities in these terrorist events was about 2,986.
We thought that would be the calamity for this message to focus on. But God had other plans. Who can pose the question of God's sovereignty and Christ's supremacy today and leave Hurricane Katrina out of account. What happened in the last week in New Orleans and surrounding areas is different than almost anything this country has ever seen. The September 8, 1900 Galveston Hurricane may have killed more—up to 12,000, we don't know—but it did not displace hundreds of thousands and leave a major city virtually empty and paralyzed with several surrounding smaller towns even more devastated. Who can speak of the supremacy of Christ in an age of terror without considering the terror of 140-mile-an-hour winds and broken levees and floodwaters covering 80% of a great city and who knows how many people dead in their attics?
And lest we think naively in response to these calamities, as though the cost of lives was something unusual, let's remind ourselves of the obvious and the almost overwhelming fact that over 50,000,000 people die every year in this world. Over 6,000 ever hour. Over 100 every minute. And most of them do not die in ripe old age by sleeping peacefully away into eternity. Most die young. Most die after long struggles with pain. And millions die because of the evil of man against man.
Sudden calamities shock us only to make more plain what is happening every hour of every day of your entire life. Thousands perish in pain and misery every day. Probably seven or eight thousand people will have died during this worship service. Some of them are screaming out in pain just now as I am speaking and as you sit there in relative comfort. If there is to be any Christian joy in this world, along with love, it will be sorrowful joy, broken-hearted joy. What person in this room, who has lived long enough, does not know that the sweetest joys, the deepest joys, are marked with tears, not laughter?
Evil and Pain as a Pointer to the Need and Evidence for God
So even in our own experience—in our own souls—believers or unbelievers, there is a kind of witness that the world of evil and pain and misery and death is not a meaningless place. It is not a place without a good and purposeful God. Some people—not all—have found in the greatest evil—the time of greatest sorrow—the greatest need for God and the greatest evidence of God.
It happens like this. A great evil happens—say the holocaust with 6,000,000 murders. Or the Stalinist Soviet gulag with many more than that sent to their deaths. In the midst of these horrors, the human soul, that had been blithely pursuing its worldly pleasures with scarcely a thought about God and with no serious belief in any absolutes like evil and good, or right and wrong—happily living in the dream-world of relativism—suddenly is confronted with an evil so horrible and so great as to make the soul scream out with ultimate moral indignation: No! This is wrong! This is evil!
And for the first time in their life they hear themselves speaking with absolute conviction. They have a conviction of absolute reality. They know now beyond the shadow of a doubt that such a thing as evil exists. They admit that all their life up till then was a game. And now they are confronted with the stark question: If there is such a thing as absolute evil—if there is a moral reality that is above and different from the mere physical processes of evolutionary energy plus time plus matter—then where does it come from, and what is it based on?
And many people discover in this moment of greatest evil that there is only one satisfactory answer: There is a God above the universe who sets the standards of good and evil and writes them on the human heart. They are not purposeless chemical reactions in our brains. They have reality outside of us, above us, in God. Paradoxically, therefore, the times of greatest human evil have often proved for many to be times when God is most needed and most self-evidently real. Without him evil and good are simply different electro-chemical impulses in the brain of mammal primates called homo sapiens. We know—you know—that is not true.
Why Does Such a World Exist?
So we ask: Why, Lord? Why is the world you made like this? If you are God—if you are the Christ the Son of the living God—why is this world so full of terror and trouble?
Here is what I believe the Bible teaches in answer to this question. I will give two answers that are not the reason such a world exists, and then four answers that are the reasons such world exists. I deal with each very briefly and point you to the Scriptures where you can search God's word for yourself.
1. The reason this terrorized and troubled world exists is not because God is not in total control.
The Bible is overwhelmingly clear that God governs everything in the universe from the smallest bird to the largest storm. "Are not two sparrows sold for a penny?And not one of them will fall to the ground apart from your Father" (Matthew 10:29). "Even winds and sea obey him" (Matthew 8:27). "The lot is cast into the lap, but its every decision is from the Lord" (Proverbs 16:33). "The king's heart is a stream of water in the hand of the Lord; he turns it wherever he will" (Proverbs 21:1). "Who has spoken and it came to pass, unless the Lord has commanded it?" (Lamentations 3:37). "Does disaster come to a city, unless the Lord has done it?" (Amos 3:6). "He commands even the unclean spirits, and they obey him" (Mark 1:27). "I am God, and there is none like me . . . saying, 'My counsel shall stand, and I will accomplish all my purpose'" (Isaiah 46:9-10).
There is no person or being in the universe that can thwart the sovereign will of God. Satan is his most powerful enemy and does much evil in the world, but he must first get God's permission, and none of his actions is outside God's governance. He never breaks free from his leash (Luke 22:31; Job 2:6-7; 42:11).
2. The reason this terrorized and troubled world exists is not because God is evil or unjust.
"This is the message we have heard from him and proclaim to you, that God is light, and in him is no darkness at all" (1 John 1:5). "Good and upright is the Lord" (Psalm 25:8) The angels cry before God day and night, "Holy, holy, holy is the Lord of hosts; the whole earth is full of his glory!" (Isaiah 6:3). And when he does things that seem evil to us, the Bible teaches us to speak to man like this: "As for you, you meant evil against me, but God meant it for good" (Genesis 50:20). God is not evil, even when he wills that evil come to pass. There are good and holy and just purposes in all he does. For those who love him he "works all things together for good" (Romans 8:28). Now and forever.
Now the four positive reasons why this world exists.
1.The reason this terrorized and troubled world exists is because God planned the history of redemption and then permitted sin to enter the world through our first parents, Adam and Eve.
In 2 Timothy 1:9 the apostle Paul said, "[God] saved us and called us toa holy calling, not because of our works but because of his own purpose and grace, which he gave us in Christ Jesus before the ages began." In other words, before there was any world or any sin in the world, God planned saving grace through the death and resurrection of Jesus Christ. That means that God knew Adam would sin. He was already planning how he would save us.
Therefore Adam's sin was part of God's plan so that God could reveal his mercy and grace and justice and wrath and patience and wisdom in ways that could have never been revealed, if there were no sin and no Savior and no history of salvation. God's aim for this fallen world is that he be known more fully, because knowing God most fully is what it means for us to be most fully loved. If you turn to Christ, you will discover in God more wonders in this fallen world than could be imagined in any other world.
2.The reason this terrorized and troubled world exists is because God subjected the natural world to futility. That is, God put the natural world under a curse so that the physical horrors we see around us in diseases and calamities would become a vivid picture of how horrible sin is. In other words, natural evil is a signpost pointing to the horrors of moral evil.
Before I say another word, hear this word of clarification: some of the sweetest, most humble, godly, Christ-exalting, heaven-bound people carry some of those signs. Listen to Romans 8:18-21:
The sufferings of this present time are not worth comparing with the glory that is to be revealed to us. 19 For the creation waits with eager longing for the revealing of the sons of God. 20 For the creation was subjected to futility, not willingly, but because of him who subjected it, in hope 21 that the creation itself will be set free from its bondage to decay and obtain the freedom of the glory of the children of God.
In other words, God subjected the creation to futility and bondage to decay and misery and death. He disordered the natural world because of the disorder of the moral and spiritual world—that is because of sin. In our present condition blinded by sin and dishonoring God every day, we cannot see how repugnant sin is. Hardly anyone in the world feels the horror that our sin is. Physical pain we feel! And so it becomes God's trumpet blast to tell us that something is dreadfully wrong in the world. Diseases and deformities are God's portraits of what sin is like in the spiritual realm. That is true even though some of the most godly people bear those deformities. Calamities are God's previews of what sin deserves and will one day receive in judgment a thousand times worse. They are warnings. And that is true even when they sweep away Christ-followers and Christ-rejectors.
Oh, that we could all see and feel how repugnant, how offensive, how abominable it is to blackball our Maker, to ignore him and distrust him and demean him and give him less attention in our hearts than we do the carpet on our living room floor. We must see this, or we will not turn to Christ for salvation from sin. Therefore, God mercifully shouts to us in our sicknesses and pain and calamities: Wake up! Sin is like this! Sin leads to things like this. (See Revelation 9:20; 16:9, 11.) The natural world is shot through with horrors to wake us from the dreamworld of thinking sin is no big deal. It is a horrifically big deal.
3. The reason this terrorized and troubled world exists is so that followers of Christ can experience and display that no pleasure and no treasure compares to knowing Christ. That is, the loss of every good thing in this world is meant to reveal that Christ himself more than compensates for all losses.
We see it in the New Testament and the Old Testament. The apostle Paul says, "I count everything as loss because of the surpassing worth of knowing Christ Jesus my Lord. For his sake I have suffered the loss of all things and count them as rubbish, in order that I may gain Christ" (Philippians 3:8). The superior worth of Christ is magnified because in all Paul's losses, he experiences Christ as all-satisfying.
The prophet Habakkuk said it with amazing and painful beauty:
Though the fig tree should not blossom, nor fruit be on the vines, the produce of the olive fail and the fields yield no food, the flock be cut off from the fold and there be no herd in the stalls, 18 yet I will rejoice in the Lord; I will take joy in the God of my salvation. (Habakkuk 3:17-18)
Famines, pestilence, persecution—these happen so that the world might see in the followers of Jesus and discover for themselves that God made us for himself and that he is our "exceeding joy" (Psalm 43:4) and at his right hand are pleasures for every more (Psalm 16:11). The losses of life are meant to wean us off the poisonous pleasures of the world and lure us to Christ our everlasting joy.
4. Finally, the reason this terrorized and troubled world exists is to make a place for Jesus Christ the Son of God to suffer and die for our sins. The reason there is terror is so that Christ would be terrorized. The reason there is trouble is so that Christ could be troubled. The reason there is pain is so that Christ could feel pain. This is the world God prepared for the suffering and death of his Son. This is the world where God made the best display of his love in the suffering of his Son.
Romans 5:8, "God shows his love for us in that while we were still sinners, Christ died for us." All his suffering was the plan of God to reveal redeeming love to us. The sovereignty of God, the evil of the world, and the love of God meet at the cross of Christ. Listen to this amazing statement from Acts 4:27-28 about God's plan for the suffering of his Son—for you! "Truly in this city [God] there were gathered together against your holy servant Jesus, whom you anointed, both Herod and Pontius Pilate, along with the Gentiles and the peoples of Israel, to do whatever your hand and your plan had predestined to take place." All the scheming, all the flogging, all the spitting, all the beating with rods, all the mockery, all the abandonment by his friends, all the thorns in his head, all the nails in his hands and feet, the sword in his side, weight of the sins of the world—all of it according to God's plan. For you to see God's love more graphically.
God's deepest answer to terrorism and calamity is the suffering and death of his Son. He entered into our fallen world of sin and misery and death. He bore in himself the cause of it all—sin. And he bought by his death the cure for it all—forgiveness and everlasting joy in the age to come.
On his behalf I invite—I urge—you to receive him as your Savior and Lord and the supreme Treasure of your life.
By John Piper. © Desiring God. Website: www.desiringGod.org. Email: mail@desiringGod.org. Toll Free: 1.888.346.4700.
This [article was written on the] weekend of the first anniversary of 9/11 that has occurred on the Lord's day, Sunday. Therefore it seemed good to us to step back and pose the question again about the meaning of the supremacy of Christ in an age of terror.
The Supremacy of God in All Things—No Exceptions
One of the truths of the Bible that we embrace with trembling joy is the truth of God's supremacy in all things. The mission of our church is that we exist to spread a passion of the supremacy of God in all things for the joy of all peoples through Jesus Christ. When we say that, we do not mean: "except in calamities," "except in war," "except when Al Qaeda blows up a building or a train," "except when cancer takes a mom or a child is born with profound disabilities." There are no "except" clauses in our mission statement.
We did not formulate our mission in a rosy world—and then get surprised and embarrassed by the reality of suffering. We did not have our head in the sand. We formulated our mission in the real world of pain and suffering and evil and death. We have seen even among our own people, some very peaceful, but also some very terrible deaths. We exist to spread a passion for the supremacy of God in all things—all things—for the joy of all peoples through Jesus Christ—all the time. A passion for God's supremacy—Christ's supremacy (for he is God incarnate)—in all things, all the time.
Sorrowful, Yet Always Rejoicing
None of us who has lived a few decades—for me that means almost six—has embraced this mission without trembling. And none of us has lived this mission for long without tears. We have said it dozens of times here at Bethlehem, and we will say it till we die, that the joy we pursue and the joy we embrace in Jesus Christ is always—always in this world—interwoven with sorrow. There is no unadulterated joy in this world for people who care about others. The Bible describes Christ's servants like this: "[We are] sorrowful, yet always rejoicing." (2 Corinthians 6:10).
"Sorrowful yet always rejoicing." How can that be? It can be because Christ is supreme over all things forever, but suffering and death remain for a while. Life is not simple. There is pleasure, and there is pain. There is sweetness, and there is bitter suffering. There is joy, and there is misery. There is life and health, and there is disease and death. And therefore emotions are not simple. For those who love others, and not just their own comforts, this complexity means that we will rejoice with those who rejoice and weep with those who weep (Romans 12:15). And there is always someone we know who is weeping, and someone we know who is rejoicing. And therefore we will learn the secret of "sorrowful yet always rejoicing"—and joyful yet always sorrowing. Those amazing words that describe the Christian soul—"sorrowful yet always rejoicing"—mean that suffering remains for a while in this world, but Christ is supreme now and forever.
9/11, Hurricane Katrina, and the Constant Suffering in This World
The first plane that hit the World Trade Towers, Flight 11, immediately killed 92 people on board that flight. Flight 175 that hit the second tower a few minutes later killed 65 people on board. In the Towers themselves it appears now that 2,595 people perished when the Towers fell, including those who worked there or visited there, and those who were entering to save them.
Flight 77 carried 64 people when it hit the Pentagon within an hour after the first attack. Inside the Pentagon 125 people died in addition to these 64. Flight 93 with 45 people aboard turned around over Pennsylvania and was headed . . . where? The White House? The Congress? Todd Beamer and others wrestled control from the hijackers, it seems, and the plane crashed with no survivors near Shanksville, Pennsylvania. All 45 people died. The total fatalities in these terrorist events was about 2,986.
We thought that would be the calamity for this message to focus on. But God had other plans. Who can pose the question of God's sovereignty and Christ's supremacy today and leave Hurricane Katrina out of account. What happened in the last week in New Orleans and surrounding areas is different than almost anything this country has ever seen. The September 8, 1900 Galveston Hurricane may have killed more—up to 12,000, we don't know—but it did not displace hundreds of thousands and leave a major city virtually empty and paralyzed with several surrounding smaller towns even more devastated. Who can speak of the supremacy of Christ in an age of terror without considering the terror of 140-mile-an-hour winds and broken levees and floodwaters covering 80% of a great city and who knows how many people dead in their attics?
And lest we think naively in response to these calamities, as though the cost of lives was something unusual, let's remind ourselves of the obvious and the almost overwhelming fact that over 50,000,000 people die every year in this world. Over 6,000 ever hour. Over 100 every minute. And most of them do not die in ripe old age by sleeping peacefully away into eternity. Most die young. Most die after long struggles with pain. And millions die because of the evil of man against man.
Sudden calamities shock us only to make more plain what is happening every hour of every day of your entire life. Thousands perish in pain and misery every day. Probably seven or eight thousand people will have died during this worship service. Some of them are screaming out in pain just now as I am speaking and as you sit there in relative comfort. If there is to be any Christian joy in this world, along with love, it will be sorrowful joy, broken-hearted joy. What person in this room, who has lived long enough, does not know that the sweetest joys, the deepest joys, are marked with tears, not laughter?
Evil and Pain as a Pointer to the Need and Evidence for God
So even in our own experience—in our own souls—believers or unbelievers, there is a kind of witness that the world of evil and pain and misery and death is not a meaningless place. It is not a place without a good and purposeful God. Some people—not all—have found in the greatest evil—the time of greatest sorrow—the greatest need for God and the greatest evidence of God.
It happens like this. A great evil happens—say the holocaust with 6,000,000 murders. Or the Stalinist Soviet gulag with many more than that sent to their deaths. In the midst of these horrors, the human soul, that had been blithely pursuing its worldly pleasures with scarcely a thought about God and with no serious belief in any absolutes like evil and good, or right and wrong—happily living in the dream-world of relativism—suddenly is confronted with an evil so horrible and so great as to make the soul scream out with ultimate moral indignation: No! This is wrong! This is evil!
And for the first time in their life they hear themselves speaking with absolute conviction. They have a conviction of absolute reality. They know now beyond the shadow of a doubt that such a thing as evil exists. They admit that all their life up till then was a game. And now they are confronted with the stark question: If there is such a thing as absolute evil—if there is a moral reality that is above and different from the mere physical processes of evolutionary energy plus time plus matter—then where does it come from, and what is it based on?
And many people discover in this moment of greatest evil that there is only one satisfactory answer: There is a God above the universe who sets the standards of good and evil and writes them on the human heart. They are not purposeless chemical reactions in our brains. They have reality outside of us, above us, in God. Paradoxically, therefore, the times of greatest human evil have often proved for many to be times when God is most needed and most self-evidently real. Without him evil and good are simply different electro-chemical impulses in the brain of mammal primates called homo sapiens. We know—you know—that is not true.
Why Does Such a World Exist?
So we ask: Why, Lord? Why is the world you made like this? If you are God—if you are the Christ the Son of the living God—why is this world so full of terror and trouble?
Here is what I believe the Bible teaches in answer to this question. I will give two answers that are not the reason such a world exists, and then four answers that are the reasons such world exists. I deal with each very briefly and point you to the Scriptures where you can search God's word for yourself.
1. The reason this terrorized and troubled world exists is not because God is not in total control.
The Bible is overwhelmingly clear that God governs everything in the universe from the smallest bird to the largest storm. "Are not two sparrows sold for a penny?And not one of them will fall to the ground apart from your Father" (Matthew 10:29). "Even winds and sea obey him" (Matthew 8:27). "The lot is cast into the lap, but its every decision is from the Lord" (Proverbs 16:33). "The king's heart is a stream of water in the hand of the Lord; he turns it wherever he will" (Proverbs 21:1). "Who has spoken and it came to pass, unless the Lord has commanded it?" (Lamentations 3:37). "Does disaster come to a city, unless the Lord has done it?" (Amos 3:6). "He commands even the unclean spirits, and they obey him" (Mark 1:27). "I am God, and there is none like me . . . saying, 'My counsel shall stand, and I will accomplish all my purpose'" (Isaiah 46:9-10).
There is no person or being in the universe that can thwart the sovereign will of God. Satan is his most powerful enemy and does much evil in the world, but he must first get God's permission, and none of his actions is outside God's governance. He never breaks free from his leash (Luke 22:31; Job 2:6-7; 42:11).
2. The reason this terrorized and troubled world exists is not because God is evil or unjust.
"This is the message we have heard from him and proclaim to you, that God is light, and in him is no darkness at all" (1 John 1:5). "Good and upright is the Lord" (Psalm 25:8) The angels cry before God day and night, "Holy, holy, holy is the Lord of hosts; the whole earth is full of his glory!" (Isaiah 6:3). And when he does things that seem evil to us, the Bible teaches us to speak to man like this: "As for you, you meant evil against me, but God meant it for good" (Genesis 50:20). God is not evil, even when he wills that evil come to pass. There are good and holy and just purposes in all he does. For those who love him he "works all things together for good" (Romans 8:28). Now and forever.
Now the four positive reasons why this world exists.
1.The reason this terrorized and troubled world exists is because God planned the history of redemption and then permitted sin to enter the world through our first parents, Adam and Eve.
In 2 Timothy 1:9 the apostle Paul said, "[God] saved us and called us toa holy calling, not because of our works but because of his own purpose and grace, which he gave us in Christ Jesus before the ages began." In other words, before there was any world or any sin in the world, God planned saving grace through the death and resurrection of Jesus Christ. That means that God knew Adam would sin. He was already planning how he would save us.
Therefore Adam's sin was part of God's plan so that God could reveal his mercy and grace and justice and wrath and patience and wisdom in ways that could have never been revealed, if there were no sin and no Savior and no history of salvation. God's aim for this fallen world is that he be known more fully, because knowing God most fully is what it means for us to be most fully loved. If you turn to Christ, you will discover in God more wonders in this fallen world than could be imagined in any other world.
2.The reason this terrorized and troubled world exists is because God subjected the natural world to futility. That is, God put the natural world under a curse so that the physical horrors we see around us in diseases and calamities would become a vivid picture of how horrible sin is. In other words, natural evil is a signpost pointing to the horrors of moral evil.
Before I say another word, hear this word of clarification: some of the sweetest, most humble, godly, Christ-exalting, heaven-bound people carry some of those signs. Listen to Romans 8:18-21:
The sufferings of this present time are not worth comparing with the glory that is to be revealed to us. 19 For the creation waits with eager longing for the revealing of the sons of God. 20 For the creation was subjected to futility, not willingly, but because of him who subjected it, in hope 21 that the creation itself will be set free from its bondage to decay and obtain the freedom of the glory of the children of God.
In other words, God subjected the creation to futility and bondage to decay and misery and death. He disordered the natural world because of the disorder of the moral and spiritual world—that is because of sin. In our present condition blinded by sin and dishonoring God every day, we cannot see how repugnant sin is. Hardly anyone in the world feels the horror that our sin is. Physical pain we feel! And so it becomes God's trumpet blast to tell us that something is dreadfully wrong in the world. Diseases and deformities are God's portraits of what sin is like in the spiritual realm. That is true even though some of the most godly people bear those deformities. Calamities are God's previews of what sin deserves and will one day receive in judgment a thousand times worse. They are warnings. And that is true even when they sweep away Christ-followers and Christ-rejectors.
Oh, that we could all see and feel how repugnant, how offensive, how abominable it is to blackball our Maker, to ignore him and distrust him and demean him and give him less attention in our hearts than we do the carpet on our living room floor. We must see this, or we will not turn to Christ for salvation from sin. Therefore, God mercifully shouts to us in our sicknesses and pain and calamities: Wake up! Sin is like this! Sin leads to things like this. (See Revelation 9:20; 16:9, 11.) The natural world is shot through with horrors to wake us from the dreamworld of thinking sin is no big deal. It is a horrifically big deal.
3. The reason this terrorized and troubled world exists is so that followers of Christ can experience and display that no pleasure and no treasure compares to knowing Christ. That is, the loss of every good thing in this world is meant to reveal that Christ himself more than compensates for all losses.
We see it in the New Testament and the Old Testament. The apostle Paul says, "I count everything as loss because of the surpassing worth of knowing Christ Jesus my Lord. For his sake I have suffered the loss of all things and count them as rubbish, in order that I may gain Christ" (Philippians 3:8). The superior worth of Christ is magnified because in all Paul's losses, he experiences Christ as all-satisfying.
The prophet Habakkuk said it with amazing and painful beauty:
Though the fig tree should not blossom, nor fruit be on the vines, the produce of the olive fail and the fields yield no food, the flock be cut off from the fold and there be no herd in the stalls, 18 yet I will rejoice in the Lord; I will take joy in the God of my salvation. (Habakkuk 3:17-18)
Famines, pestilence, persecution—these happen so that the world might see in the followers of Jesus and discover for themselves that God made us for himself and that he is our "exceeding joy" (Psalm 43:4) and at his right hand are pleasures for every more (Psalm 16:11). The losses of life are meant to wean us off the poisonous pleasures of the world and lure us to Christ our everlasting joy.
4. Finally, the reason this terrorized and troubled world exists is to make a place for Jesus Christ the Son of God to suffer and die for our sins. The reason there is terror is so that Christ would be terrorized. The reason there is trouble is so that Christ could be troubled. The reason there is pain is so that Christ could feel pain. This is the world God prepared for the suffering and death of his Son. This is the world where God made the best display of his love in the suffering of his Son.
Romans 5:8, "God shows his love for us in that while we were still sinners, Christ died for us." All his suffering was the plan of God to reveal redeeming love to us. The sovereignty of God, the evil of the world, and the love of God meet at the cross of Christ. Listen to this amazing statement from Acts 4:27-28 about God's plan for the suffering of his Son—for you! "Truly in this city [God] there were gathered together against your holy servant Jesus, whom you anointed, both Herod and Pontius Pilate, along with the Gentiles and the peoples of Israel, to do whatever your hand and your plan had predestined to take place." All the scheming, all the flogging, all the spitting, all the beating with rods, all the mockery, all the abandonment by his friends, all the thorns in his head, all the nails in his hands and feet, the sword in his side, weight of the sins of the world—all of it according to God's plan. For you to see God's love more graphically.
God's deepest answer to terrorism and calamity is the suffering and death of his Son. He entered into our fallen world of sin and misery and death. He bore in himself the cause of it all—sin. And he bought by his death the cure for it all—forgiveness and everlasting joy in the age to come.
On his behalf I invite—I urge—you to receive him as your Savior and Lord and the supreme Treasure of your life.
By John Piper. © Desiring God. Website: www.desiringGod.org. Email: mail@desiringGod.org. Toll Free: 1.888.346.4700.
Sunday, May 23, 2010
LOVE.........
....love people and use things NOT love things and use people....
....GOD is perfect, explain.....HE is the only Entity in existence, the reason whose existence is in HIMSELF....every other entity in existence looks for the reason for the existence outside of themselves.....
....GOD is perfect, explain.....HE is the only Entity in existence, the reason whose existence is in HIMSELF....every other entity in existence looks for the reason for the existence outside of themselves.....
Saturday, May 22, 2010
EW......caution
1. Markets only exhibit a useful Elliott wave pattern about 50% of the
time. Traders or investors who try to apply an Elliott wave count to
each market at all times and under all conditions are usually forcing a
wave count just for the sake of exhibiting a wave count. When this is
the case, the Elliott wave pattern information is not only useless, but
misleading and can prove very costly.Market analysts who limit their
entire technical approach to Elliott wave analysis are notorious for
doing this. They try to prove something that does not exist. Practical
traders and investors recognize when Elliott wave analysis is applicable
to a market condition and when it is not.
2. At titles, particularly with complex, corrective patterns, there is
simply little clue as to the position of the market within the context
of the pattern of the larger degree trend. All indications may be that a
market is in a correction, but once the market gets beyond a simple
ABC correction there usually is not a confident, specific pattern
interpretation. When this is the case, the analyst should not try to force
a complex count just for the sake of trying to identify something that is
not reliably identifiable.
time. Traders or investors who try to apply an Elliott wave count to
each market at all times and under all conditions are usually forcing a
wave count just for the sake of exhibiting a wave count. When this is
the case, the Elliott wave pattern information is not only useless, but
misleading and can prove very costly.Market analysts who limit their
entire technical approach to Elliott wave analysis are notorious for
doing this. They try to prove something that does not exist. Practical
traders and investors recognize when Elliott wave analysis is applicable
to a market condition and when it is not.
2. At titles, particularly with complex, corrective patterns, there is
simply little clue as to the position of the market within the context
of the pattern of the larger degree trend. All indications may be that a
market is in a correction, but once the market gets beyond a simple
ABC correction there usually is not a confident, specific pattern
interpretation. When this is the case, the analyst should not try to force
a complex count just for the sake of trying to identify something that is
not reliably identifiable.
FA...Stocks end a seesaw week with a slight gain; Dow, S&P 500 are still in the red for 2010
Seth Sutel and Tim Paradis, AP Business Writers, On Friday May 21, 2010, 6:46 pm
NEW YORK (AP) -- The stock market had another tumultuous ride this week as disarray in Europe heightened fears of a global economic slowdown. Despite a late-day comeback on Friday, major stock indexes are down about 10 percent from the peak they reached in late April.
Declines of that size are known as a "correction." They are normal during a bull market and are even seen as a healthy way for a market to regain its bearings after a long period of uninterrupted gains. The correction that started this week is the first for the bull market that began in March of last year.
Whether the correction has mostly run its course or turns into a bear market, defined as a decline of 20 percent or more, is anyone's guess. Stock indexes ended with solid gains Friday after starting the day lower and dipping below 10,000; the Dow closed up 125 points.
The Dow Jones industrial average plunged 376 points Thursday, its worst one-day drop in more than a year. Stocks are now about where they were in early February and down 2 percent for the year.
Jacob Gold, a financial adviser and CEO of Jacob Gold & Associates in Scottsdale, Ariz., says the market collapse of 2008 is fresh in the memories of clients who have been peppering him with calls and e-mails this week.
"They're second-guessing themselves because they don't want to end up giving the economy the benefit of the doubt and having it hurt them," he said. "People are still licking their wounds from 2008 and they're not in a position to put themselves at risk like they once did."
The immediate catalyst for this week's sharp declines was deepening confusion over how Europe intends to get control of its public finances, restore order to financial markets and instill confidence in the continent's shared currency, the euro.
Germany broke ranks from its European neighbors this week, single-handedly reining in speculative trading in European bonds. And on Friday it was rebuffed in its calls for harsh punishments for European countries that consistently flout rules on fiscal spending limits.
Greece is struggling to cope with staggering debt, and investors fear it could end up dragging other economically weak European countries down with it. If Europe's banks crack down on lending, the thinking goes, other banks around the world could follow suit, tripping up economies around the world.
The unsettling news from Europe this week also reminded investors how tepid the U.S. economic recovery really is in historical terms. Gross domestic product rose at an annual rate of 3.2 percent in the first three months of the year, but that's not nearly as strong of a comeback as is typical after a deep recession. Companies also aren't hiring that much, unemployment is still 9.9 percent and the housing market hasn't recovered from its slump.
"Normally you would get a much stronger snapback," said Paul Ballew, chief economist at Nationwide Insurance in Columbus, Ohio, and a former senior economist with the Federal Reserve. "Given the magnitude of the downturn, growth should be much stronger than that already."
U.S. markets opened lower again on Friday, but a rally in financial shares helped stocks move higher. JPMorgan Chase & Co. and Bank of America Corp. were the biggest gainers in the 30 stocks that make up the Dow Jones industrial average. They and other financial shares rose after the Senate passed long-awaited financial reform legislation, removing a significant overhang for U.S. banks.
In other signs that some investors were regaining an appetite for risk, the price of ultra-safe Treasury securities edged lower after spiking on Thursday, the dollar edged lower, commodity prices stabilized and gold prices fell.
The Dow rose 125.38, or 1.3 percent, to 10,193.39. The broader Standard & Poor's 500 index rose 16.10, or 1.5 percent, to 1,087.69. The Nasdaq composite index rose 25.03, or 1.1 percent, to 2,229.04.
About three stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume was 8.1 billion shares, versus 8.5 billion shares Thursday.
The Dow fell below 10,000 during early trading Friday before recovering. It last fell through that level on May 6, when it briefly plunged nearly 1,000 points in an afternoon rout that was its biggest intraday slide. Regulators have said they are still unclear on what caused that brief plunge.
The three-week slide since the market hit its recent peak in late April has shaved $1.3 trillion of value from the S&P 500 index in the 19 trading days through Thursday. That's more than the $1 trillion Europe and the International Monetary Fund pledged to shore up weak European economies.
On the positive side, traders said it was encouraging to see that the S&P 500 came close to, but didn't fall below the level it touched on Feb. 8, its lowest point it reached so far this year. Market analysts pay close attention to technical indicators like that one, which they call "support levels."
With this week's bumpy ride and the "flash crash" of two weeks ago, investors are struggling to make sense of all the factors whipsawing the market.
"Uncertainty is driving investors' money right now," said Andrew B. Busch, global foreign currency and public policy strategist at BMO Capital Markets. "There are so many unresolved issues -- Europe's debt crisis, the flash crash, financial reform -- and nobody knows how it's going to play out."
The Nasdaq composite index, which is dominated by technology stocks, has been more volatile than the broader market in the last week. Tech stocks tend to recover faster after a recession than those of other industries because businesses will often ramp up spending in computer equipment early in an economic recovery.
By the same token, those companies may be the first to feel the pinch if negative economic signs lead businesses to tighten their purse strings. Some money managers say the Nasdaq's decline may be overdone.
"I think a lot of good technology companies are being taken down unnecessarily in the latest downdraft," said Michael Cuggino, president and portfolio manager at Permanent Portfolio Family of Funds in San Francisco. "That may present some interesting opportunities."
Bond prices were mixed after jumping Thursday when investors dumped anything seen as risky. The yield on the benchmark 10-year Treasury note rose to 3.24 percent from 3.22 percent.
AP Business Writers Stevenson Jacobs, Peter Svensson, David Pitt and Jeannine Aversa contributed to this report.
NEW YORK (AP) -- The stock market had another tumultuous ride this week as disarray in Europe heightened fears of a global economic slowdown. Despite a late-day comeback on Friday, major stock indexes are down about 10 percent from the peak they reached in late April.
Declines of that size are known as a "correction." They are normal during a bull market and are even seen as a healthy way for a market to regain its bearings after a long period of uninterrupted gains. The correction that started this week is the first for the bull market that began in March of last year.
Whether the correction has mostly run its course or turns into a bear market, defined as a decline of 20 percent or more, is anyone's guess. Stock indexes ended with solid gains Friday after starting the day lower and dipping below 10,000; the Dow closed up 125 points.
The Dow Jones industrial average plunged 376 points Thursday, its worst one-day drop in more than a year. Stocks are now about where they were in early February and down 2 percent for the year.
Jacob Gold, a financial adviser and CEO of Jacob Gold & Associates in Scottsdale, Ariz., says the market collapse of 2008 is fresh in the memories of clients who have been peppering him with calls and e-mails this week.
"They're second-guessing themselves because they don't want to end up giving the economy the benefit of the doubt and having it hurt them," he said. "People are still licking their wounds from 2008 and they're not in a position to put themselves at risk like they once did."
The immediate catalyst for this week's sharp declines was deepening confusion over how Europe intends to get control of its public finances, restore order to financial markets and instill confidence in the continent's shared currency, the euro.
Germany broke ranks from its European neighbors this week, single-handedly reining in speculative trading in European bonds. And on Friday it was rebuffed in its calls for harsh punishments for European countries that consistently flout rules on fiscal spending limits.
Greece is struggling to cope with staggering debt, and investors fear it could end up dragging other economically weak European countries down with it. If Europe's banks crack down on lending, the thinking goes, other banks around the world could follow suit, tripping up economies around the world.
The unsettling news from Europe this week also reminded investors how tepid the U.S. economic recovery really is in historical terms. Gross domestic product rose at an annual rate of 3.2 percent in the first three months of the year, but that's not nearly as strong of a comeback as is typical after a deep recession. Companies also aren't hiring that much, unemployment is still 9.9 percent and the housing market hasn't recovered from its slump.
"Normally you would get a much stronger snapback," said Paul Ballew, chief economist at Nationwide Insurance in Columbus, Ohio, and a former senior economist with the Federal Reserve. "Given the magnitude of the downturn, growth should be much stronger than that already."
U.S. markets opened lower again on Friday, but a rally in financial shares helped stocks move higher. JPMorgan Chase & Co. and Bank of America Corp. were the biggest gainers in the 30 stocks that make up the Dow Jones industrial average. They and other financial shares rose after the Senate passed long-awaited financial reform legislation, removing a significant overhang for U.S. banks.
In other signs that some investors were regaining an appetite for risk, the price of ultra-safe Treasury securities edged lower after spiking on Thursday, the dollar edged lower, commodity prices stabilized and gold prices fell.
The Dow rose 125.38, or 1.3 percent, to 10,193.39. The broader Standard & Poor's 500 index rose 16.10, or 1.5 percent, to 1,087.69. The Nasdaq composite index rose 25.03, or 1.1 percent, to 2,229.04.
About three stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume was 8.1 billion shares, versus 8.5 billion shares Thursday.
The Dow fell below 10,000 during early trading Friday before recovering. It last fell through that level on May 6, when it briefly plunged nearly 1,000 points in an afternoon rout that was its biggest intraday slide. Regulators have said they are still unclear on what caused that brief plunge.
The three-week slide since the market hit its recent peak in late April has shaved $1.3 trillion of value from the S&P 500 index in the 19 trading days through Thursday. That's more than the $1 trillion Europe and the International Monetary Fund pledged to shore up weak European economies.
On the positive side, traders said it was encouraging to see that the S&P 500 came close to, but didn't fall below the level it touched on Feb. 8, its lowest point it reached so far this year. Market analysts pay close attention to technical indicators like that one, which they call "support levels."
With this week's bumpy ride and the "flash crash" of two weeks ago, investors are struggling to make sense of all the factors whipsawing the market.
"Uncertainty is driving investors' money right now," said Andrew B. Busch, global foreign currency and public policy strategist at BMO Capital Markets. "There are so many unresolved issues -- Europe's debt crisis, the flash crash, financial reform -- and nobody knows how it's going to play out."
The Nasdaq composite index, which is dominated by technology stocks, has been more volatile than the broader market in the last week. Tech stocks tend to recover faster after a recession than those of other industries because businesses will often ramp up spending in computer equipment early in an economic recovery.
By the same token, those companies may be the first to feel the pinch if negative economic signs lead businesses to tighten their purse strings. Some money managers say the Nasdaq's decline may be overdone.
"I think a lot of good technology companies are being taken down unnecessarily in the latest downdraft," said Michael Cuggino, president and portfolio manager at Permanent Portfolio Family of Funds in San Francisco. "That may present some interesting opportunities."
Bond prices were mixed after jumping Thursday when investors dumped anything seen as risky. The yield on the benchmark 10-year Treasury note rose to 3.24 percent from 3.22 percent.
AP Business Writers Stevenson Jacobs, Peter Svensson, David Pitt and Jeannine Aversa contributed to this report.
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