Seven more US banks collapse on day of Europe's stress tests

The Guardian,

More than 100 banks in the US have now collapsed so far this year after another seven were taken over by regulators late on Friday – the same day that seven European banks failed a financial health check.

With rising bad debts tied to commercial and residential mortgages, the number of US bank failures this year is expected to exceed last year's figure of 140. The largest of the seven US banks just seized by the Federal Deposit Insurance Corporation – which acts as a receiver and protects depositors – was Crescent Bank and Trust Company in Georgia, with more than $1bn in assets. In all, the seven failed banks had total assets of $2bn.

In Europe, investors will have a first real chance tomorrow to react to the results of banking stress tests designed to ease concerns about institutions' financial strength and exposure to debt-laden countries such as Greece. (more)

US Economic Calendar

Jul 26	10:00	New Home Sales	Jun		295K	310K	300K
Jul 27	09:00	Case-Shiller 20-city Index	May		4.0%	4.0%	3.81%
Jul 27	10:00	Consumer Confidence	Jul		51.0	51.0	52.9
Jul 28	08:30	Durable Orders	Jun		1.0%	1.0%	-0.6%
Jul 28	08:30	Durable Orders ex Transporation	Jun		0.5%	0.5%	1.6%
Jul 28	10:30	Crude Inventories	07/24		NA	NA	0.360M
Jul 28	14:00	Fed's Beige Book	Jul
Jul 29	08:30	Initial Claims	07/24		450K	464K	464K
Jul 29	08:30	Continuing Claims	07/17		4550K	4550K	4487K
Jul 30	08:30	GDP-Adv.	Q2		3.0%	2.5%	2.7%
Jul 30	08:30	Chain Deflator-Adv.	Q2		0.7%	1.1%	1.1%
Jul 30	08:30	Employment Cost Index	Q2		0.5%	0.5%	0.6%
Jul 30	09:45	Chicago PMI	Jul		58.5	56.5	59.1
Jul 30	09:55	U Michigan Sentiment - Final	Jul		67.5	67.5	66.5

Why isn’t the market collapsing?

By Leon Tuey, Financial Post

To the bears and worrywarts, I have a question: Given the overwhelming bearish consensus, why isn’t the market collapsing?

“It will” is not a good answer. Remember, the market is a leading economic indicator and tends to discount future events. If the future is as bleak as the bears have us believe, the market averages should have lost 30%, 50%, if not more by now.

If the bears would only learn to understand the major factors that drive the market’s long-term trend, they would stop flapping their gums and scaring the hell out of investors.

Also, if they stop being fixated with the S&P, thinking it’s “the market” and realize the impact of the financials and techs (both are heavyweights) on the index, they would be much more sanguine about the market.

Since October 2008, I’ve been of the view that a secular bull market commenced. In terms of magnitude and duration, this bull will surprise all. I see no reason to change this view. (more)

Disappearing Middle Class: Bilingual Ph.D. Accepts Rent Money From Church

Until 18 months ago, Maria Ortiz says she never had to search for a job in her life. As a highly skilled bilingual Ph.D. and the first ever Mexican-American woman to be admitted into Brigham Young University's graduate school of management, Ortiz was always the kind of woman universities would beg to come work for them.

After working and teaching in California for 20 years, Ortiz was recruited in 2007 for a highly specialized job at the University of Nevada, Las Vegas. She left her stable situation to take a chance on a new program she believed in, but the program folded due to budget cuts less than two years later in January 2009, right in the middle of the recession.

Ortiz frantically applied for jobs for the next 18 months, running through all $15,000 of her savings, exhausting all 99 weeks of unemployment benefits and eventually having to draw from Social Security and accept financial aid from her local church congregation to help pay the rent. Monday morning, on her 63rd birthday, Ortiz says she received yet another job rejection phone call, and she felt like she could no longer hold it together. (more)

Stockpicking Tips from President Obama?

Business Week,

Money managers tout their investing strategy in books, at seminars, and on blogs. Some call it a science, others an art form. And then, of course, there's luck. In that spirit, here's one more stockpicking technique to add to the list: Take a look at who is lunching at the White House.

Since becoming President, Barack Obama has held seven lunches with small groups of chairmen and chief executive officers, including Jeff Bezos of Amazon.com (AMZN), Ken Chenault of American Express (AXP), Ursula Burns of Xerox (XRX), and Howard Schultz of Starbucks (SBUX). In four of the lunches, the guests' companies, as a group, outperformed the Standard & Poor's 500-stock index 30 trading days after the repast. In two cases, the groups' shares underperformed the S&P 500 a month after lunch with the Commander-in-Chief. Altogether, the six lunch groups outdid the S&P by more than two percentage points. Thirty days haven't elapsed since a seventh lunch held on July 1. (more)

The Economist - July 24th - July 30th 2010

The Economist is a global weekly magazine written for those who share an uncommon interest in being well and broadly informed. Each issue explores the close links between domestic and international issues, business, politics, finance, current affairs, science, technology and the arts.
In addition to regular weekly content, Special Reports are published approximately 20 times a year, spotlighting a specific country, industry, or hot-button topic. The Technology Quarterly, published 4 times a year, highlights and analyzes new technologies that will change the world we live in. (more)

Smoking Guns of U.S. Treasury Monetization

A significant feature of fiat money systems is the privilege for the custodian of the reserve currency to engage in regular practices of ham-fisted monetary management, even permission for fraudulent centers to flourish, surely developing a debt monster that an economy grows dependent upon. Fannie Mae might be the most offensive blight on such privilege. Unfortunately, many shenanigans have matured into grand fraud. They are smoking guns of USTreasury fraud and counterfeit, with strong whiffs of monetization. Much more monetization is to come, fully endorsed and sanctioned. Other clever techniques are being used, given the Quantitative Easing has officially been halted. A close look reveals that Excess Cash Reserves at the USFed are being drawn down, which are thus funding the USGovt deficits in the last couple months. Ironically, such reserves held by big banks at the US Federal Reserve were the only thing preventing vast insolvency. Now that cash is being used, and the USFed insolvency is slowly exposed. Details can be found in the July Hat Trick Letter reports. Evidence is compelling, and grand motive for foreign creditors to reject the USDollar, whose active control strings are traced to Wall Street. When recognized monetization destroys the last vestige of trust and confidence in the USDollar, when more official rounds of sponsored Quantitative Easing arrive, the USDollar will be on a downward spiral. In fact, all major currencies face the same prospect of vast monetary expansion. They will all fall sharply in value, and by counter-effect, the Gold price will rise powerfully. (more)