News Day

by Larry Levin

Although there was a good amount of news today, the markets mostly traded on both sides of unchanged. Once again the volume was very low and, despite the trading opportunities that come with the news, is not expected to return until next week.

Before the open this morning, Standard & Poor's reported the Case-Shiller index of 20 major metropolitan areas last month fell 15.9% from June 2007 - setting a new record.

While there is no national turnaround in residential real-estate prices, it is possible that we are seeing some regions struggling to come back, which has resulted in some moderation in price declines at the national level, said David Blitzer, chairman of the Index Committee at Standard & Poor's. Nevertheless, not one market is showing a positive return over the past 12 months and seven of the metro areas are reporting declines in excess of 20%.

One report gave a glimpse of good news: consumer confidence. With the oil and gasoline retreat, consumers are becoming slightly more confident - slightly. The August consumer confidence index rose to 56.9 from a July reading of 51.9. Most economists had been expecting an August reading of 53.0. However, this confidence was tempered by the increasing anxiety of finding a good job, or any job for that matter.

Lynn Franco, director of the Conference Board's consumer-research center said today, Consumer-confidence readings suggest that the economy remains stuck in neutral but may be showing signs of improvement by early next year. However, overall readings are still quite low by historical standards and it is still too early to tell if the worst is behind us.

The FDIC said this afternoon that in the three months from April to June, banks posted their second worst earnings performance since 1991. Earnings for the quarter totaled just $5 billion, compared with $36.8 billion a year ago, a decline of 86.5%.

The results are pretty dismal, said FDIC Chairman Sheila Bair at a press conference.

During the press conference, Ms. Bair said that the FDIC's problem list grew to 117 financial institutions from 90 at the end of the first quarter. Total assets of problem institutions increased to $78 billion from $26 billion at the end of March. And because these banks are losing money, they have not paid the normal amounts of FDIC insurance premiums. Ms Bair said the FDIC would move to replenish the deposit insurance fund in early October.

As I understand it, total FDIC funds to cover bank failures now stands at just $45-billion; however, it insures $4.5-TRILLION in deposits. That's right, there are just 1% of reserves to cover all the deposits. If just one large institution fails, the next bailout will be the FDIC itself!

Finally, Citigroup Inc. settled charges that it stole from its customers using a computer program that skimmed positive credit card balances into the bank's general fund, according to the California Attorney General's office Tuesday. Under the settlement, Citigroup will return more than $14 million to customers with 10% interest, and pay California $3.5 million in damages and civil penalties.

Can you believe that crap? They can't make any money scamming you any more, so the banks have resorted to STEALING FROM YOU!! Why hasn't anyone gone to jail? Oh yeah, Citigroup is a huge political campaign contributor.

Real Time Trading Signals*for

Trade Date: 8/26/08

E-Mini S&P Trades*
(before fees and commissions):

1) TP buy @ 9:55am at 1274.00 = -1.25 (1 lot)

2) OTF buy @ 10:20am at 1271.50 = -1.75*2

3) Engf sell @11:20am at 1269.75 = -1.25 (1 lot)

4) Engf buy @ 1:50pm at 1265.25 = -1.00 (1 lot)

3) Algorithm positions (2)...combined total...-10.50


ZB (30 Year Bond) Trades*
(before fees and commissions):

1) Sell @ 7:31am at 118.180 = +4.5, +3.5, b/e

2) Sell @ 9:18am at 118.155 = +2.5...combined total...+10.5


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