The market seems to be selling-off on the back of limited bad news imo, apart from the dollar that is.

If you can hold your nerve and apart from any short term requirements to offload poor performing stocks, I have a couple!!, my advice would be sit tight. This does not have the feel of the tech(mining!) bubble at all. Difference being there are a lot of good fundamentals, unlike in 2000 when there were a lot of over rated nothing companies.

hope y'all took the tip on Experian (see post 950) - happy holiday !!!

the rise today is great but has anyone noticed that Tesco share price was down today very strange., not out the woods yet.

relating Tesco's performance to general market conditions is a complete non seq ..... however, you are quite right to say we are not out of the woods yet, and it is worth constantly reminding oneself to remain cautious and not get carried away by the euphoria of this sudden but very welcome surge.

nevertheless, whether knee jerk or not, the fact is that FTSE jumped straight back through 6000 and Dow bounced firmly off 200 dma ....... early Mondaywill see a strong perfomance in Japan and that should bring further advance of unknown magnitude in London, at least first thing; it will then be fingers x-crossed that Wall Street does no worse than consolidate, ideally holding above 13,000

Market Outlook: More From The Fed
Topics:Stock Market | Interest Rates | Ben Bernanke | Federal ReserveBy Jim Kingsland | 17 Aug 2007 | 03:48 PM ET Font size: Investors will be watching every move by the Federal Reserve for buy and sell cues after being reminded Friday that more aggressive monetary policy moves can spark explosive reactions in the financial markets. Analysts say they see credit turmoil only temporarily arrested by the Federal Reserve's surprise cut in the discount rate and that more will need to be done by the Ben Bernanke led Fed.

Linda Duessel, market strategist at Federated Investors says, "were not prepared to say we are out of the woods yet and that were through with this correction. I think the fact the Fed has done what it has done says we could end up with just a correction and not a bear market."

At the worst levels of the week, on Thursday, a variety of indices fell enough to hit a 10% decline from the late July highs marking an official "correction".

That's at the crux of the bull/bear debate -- whether the market set a bottom at the 10% 'correction' level and is set for a broader rebound, or whether more blood letting is to come. A big part of the outcome in the battle of the bulls and bears lies in large part with the Federal Reserve.

"This is not the panacea for the problems in the market, or the economy," says Ned Riley, chief executive officer of Riley Asset Management of the Fed's decision Friday morning to cut the discount rate by a-half point 5.75%. "I am very optimistic long term but the problem we have is a systemic growth problem. Weve taken the housing market out of the equation for the consumer, values have fallen and the Fed should be more continuous in this easing process."

Richard Barone, chairman of the Ancora Group of Companies, echoes those sentiments saying "the Fed has taken baby steps. It's going to have to become more vocal on what it intends to do and that is provide liquidity throughout the system."

Barone believes the Fed could initiate "another discount rate cut in the next week or two, and maybe some more jawboning into the market that they will provide liquidity if and when needed."

Peter Schiff, chief executive of Euro Pacific Capital takes a more bearish stance. He says, "the Fed can't protect the market, they cant stop the economy from collapsing. They made the bed under Greenspan and were all going to have to lie in it."

"This move is like a trial balloon," continues Schiff. "Bernanke would love to cut the Fed funds rate but he knows the dollar would collapse. Bernanke knows the economy is going into recession, but he can't tell the truth, he can't tell the truth on why hes not cutting (the Fed funds rate).

Schiff advises investors avoid financial shares. "The financials Financial Select Sector SPDR FundXLF
34.5 1.35 +4.07%


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[XLF 34.5 1.35 (+4.07%) ] went up because of short covering, but they're going a lot lower, theyre ticking time bombs. I remember the homebuilders HOUSING INDEXHGX
170.56 4.39 +2.64%


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[HGX 170.56 4.39 (+2.64%) ], people were recommending the stocks because they were trading at low multiples, but earnings vanished and earnings will vanish in the financials."

Seeking Values

"Any number of stocks that dropped to multi year lows, during the swoon of the last few weeks would be a very fine place to begin being a value investor," according to David Leibowitz, managing director of Burnham Securities, who didn't name specific stocks but commented on a variety market sectors he's looking at.

"The deeper the value, the more interest I have. I am looking looking at companies with diminutive debt, that raises the dividend every year -- companies that might be so cash flow positive that they are also buying their own shares. I am also looking at some stocks that have gotten beaten down because of events and whether theyve been beaten too much."

More Rate Cuts?

If interest rate cuts are what the bulls need to push the market higher, Robert Heller, former Federal Reserve Board governor thinks we will be seeing rate cuts.

"The Federal Reserve is saving the market now, and explicitly to reduce the anxiety in the credit market and that I think they have accomplished", says Heller. "The Fed is poised to cut (rates at the next policy makers meeting in September). The Fed funds rate is very high at 5.25% compared to 90 day Treasurys selling at 3.8% That's an enormous spread, the Fed should ease up."

As the markets wait and see what happens next in the credit markets and how the Fed reacts, John ODonoghue, head trader at Cowen & Company, sees some stability emerging into the market.

"I would tend to think were going to get into a level of stability for the next week, or two and see what shakes out, but I tend to think into any strength people will be net sellers."

ODonoghue says by this time next week the market could be not to far from unchanged or up a little bit.

I thought that there were some really good Pros and Cons covered in Saturdays FT. Still available at your local Library....well the bigger ones perhaps.

Which came out on top? Pro Bull or Bear?

People will have to take the time to look and make their own minds up as it's your own money that's being put on the line.

One article (John Plender If I remember rightly) made the point that I've been banging on about this week, that until the full extent of the debt liability is known the Market is just too risky to call at the moment. Short term Trading excepted.

As I say have a look for yourselves.

Having read around this weekend, I have come to the conclusion nobody knows yet how the market is going to respond tomorrow.
But there was an interesting article in Sunday Times by Irwin Stelzer "Bernanke to the rescue with surgical strike". In it he atttemts to put some figures to the subprime debt, but not unfortunately knock on effects.

Also an interesting article Page 2 of ST "Home Loan Frauds hits UK" by Kathryn Cooper, which I have been suspecting for some time.

Cross your fingers or your hearts for tomorrow!

Fred
Apparently relating to some fraudulent loans on new homes being thrown up at Thamesmead. Can't remember the lender but think it might have been Persimmon as the developer - and 40m seems to stick in my mind. All from memory so don't take it as gospel.

EDIT - Sunday Times "Four mortgage firms could see an estimated 40m wiped out after lending to bogus borrowers on off-plan apartments in Thamesmead, south London, built by Persimmon"

Morning, oh dubious ones. ;-))

batten down the hatches again, there's another hurricane on it's way !

I agree...more turmoil coming...FED's move last week is just a temporary measure.


UK July gross mortgage lending hits new July record-high of 34.4 bln stg - CML
AFX


LONDON (Thomson Financial) - Gross mortgage lending in the UK reached a new record level for the month of July despite the Bank of England's series of interest rate rises, the Council of Mortgage Lenders said today.

In its monthly survey the CML said gross mortgage lending rose to 34.4 bln stg, up 13 pct year-on-year and the highest ever level recorded for July. However the figure was slightly lower than the total of 34.8 bln recorded in June.

The CML said the strong level of mortgage lending is being driven by a large number of people re-mortgaging to try and get a better deal in case interest rates rise any further. The BoE has raised rates five times since August last year to their current level of 5.75 pct.

The figures contrast with statistics also out this morning from the Building Societies Association which showed a significant drop in UK mortgage approvals. However the CML said it does expect the effect of this round of monetary tightening to be felt later in the year.

'As we move into the autumn the cumulative effects of these rate rises will become more pronounced, and we expect this to feed through to lower levels of mortgage lending as the year progresses,' it said in a statement.

But it added that it still expects total lending for 2007 to beat 2006's record level of 360 bln stg.

rachel.armstrong@thomson.com

good start to the day ... anyone have US futures for 2day?

indications are currently +50 at 13112 ...... i opened a modest long late Friday when it became reasonably clear that Dow would stay above 13000, but have an equally modest target of 13250, assuming i don't get out sooner

The latest reminder of the trouble sparking the credit crunch now roiling the markets came from Thornburg Mortgage Inc. (TMA:Thornburg Mortgage Asset Corp
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TMA13.81, -1.23, -8.2%) , which said it sold a "substantial" part of its triple-A-rated mortgage securities portfolio.
Thornburg, a residential-mortgage lender focused on jumbo adjustable-rate loans, will report a third-quarter capital loss of about $930 million as a result of the mortgage-securities sales, the company said in a statement. Thornburg's stock fell 12%.

"triple-A-rated" LOL

can,t get backing for jumbo mortgages unless they have an interest rate of 10%

FIRST uk ONE I HAVE SEEN

LONDON (MarketWatch) -- U.K. hedge-fund manager Solent Capital said Monday it was going to wind down one of its funds because of a downturn in value in the asset-backed securities it contains, the latest fallout from the global credit crisis.

The fund, called the Mainsail II, was invested in commercial mortgage-backed, residential mortgage-backed securities, and collateralized debt obligations, according to a statement released by the company.
The fund may have a forced sale of investments or a closing out of hedging instruments at a loss that may "materially" impact principal and interest repayments, Soleil said.
Many of these securities have struggled in the aftermath of poorer U.S. borrowers failing to repay mortgages, as well as downgrades by credit-rating agencies that meant that some investors were no longer permitted to invest.
"Current market volatility and lack of market liquidity with respect to sub-prime lending markets have caused adverse conditions with respect to the liquidity and market risk exposures on the company's underlying portfolio of investments," Solent said.
'Current market volatility and lack of market liquidity with respect to sub-prime lending markets have caused adverse conditions with respect to the liquidity and market risk exposures on the company's underlying portfolio of investments.'
Solent Capital

interesting tug-of-war going on on Wall Street to see if 13000 can be held ..... too close to call at the moment, the index flopping either side ..... if that psychological level fails, then the REAL test is 12800

at the moment, the bulls seem to have outrun the bears, at least for this evening .... however, and i post this as much for myself as you guys, to believe that this scare has run its course would be foolhardy in the extreme ..... great diligence and fleetness of foot will be required if the smell of burnt flesh is to be avoided