US MARKETS

Nearly half the nation's 25 biggest retail chains expect to hire fewer holiday workers this season than they did last year, another sign that retailers aren't counting on recession-strained shoppers to relax the tight grip on their pocketbooks this year.

About 40% of stores surveyed across a broad swath of retailing, including consumer-electronic chain Best Buy Inc., teen-retailer American Eagle Outfitters Inc., and luxury-goods seller Saks Inc., told the Hay Group, a human resources consulting firm, that they expect to hire between 5% and 25% fewer temporary workers this year than last, when the recession forced many retailers to trim staff in response to falling sales. That's a grimmer outlook than the Hay survey found a year ago, when 29% of retailers said they would be slashing their holiday workforce.

Gross debt issuance will reach $7 trillion when the current fiscal year ends this month, Treasury Acting Assistant Secretary for Financial Markets Karthik Ramanathan, said on Wednesday.

In fiscal year 2009, which ends next week, Treasury will have issued $7 trillion in gross issuance that's in a 12-month period, Ramanathan said in a speech at a financial markets conference in New York.

This issuance was necessary to meet nearly $1.7 trillion in net marketable borrowing needs, nearly $1 trillion more than what we raised last year. He said that demand for Treasuries this year had been tremendous but expected some flight-to-quality flows into government debt to begin going to other sectors as the financial markets recovery continues.

There is still a long way to go toward market and economic stabilization but good progress is taking place, Ramanathan said, adding that officials were no longer focused "on LIBOR/OIS spreads on a daily or hourly basis."

            The FBI is investigating the hanging death of a U.S. Census worker near a Kentucky cemetery. A law enforcement official says the word "fed" was scrawled on his chest.

          The body of Bill Sparkman, a 51-year-old Census field worker and occasional teacher, was found Sept. 12 in the Daniel Boone National Forest in rural southeast Kentucky.

          Investigators have said little about the case. A law enforcement official, who was not authorized to discuss the case and requested anonymity, tells The Associated Press the word "fed" was written on the dead man's chest.

          FBI spokesman David Beyer said the bureau is helping state police determine if Sparkman's death was the result of foul play, and if so, whether it was related to his census work.

          Resales of U.S. homes dropped 2.7% in August to a seasonally adjusted annual rate of 5.10 million, the first decline in five months, the National Association of Realtors reported Thursday. Inventories of unsold homes on the market declined by 10.8% to 3.62 million, representing an 8.5-month supply at the August sales pace, the lowest since April 2007. The decline in sales was unexpected by most economists. The median forecast by economists surveyed by MarketWatch was for a small gain to a 5.40 million annual rate from 5.24 million in July.

          The two most important features of the Fed’s communiqué are: quantitative easing via Treasuries will end as scheduled in October but the quantitative easing via MBS and agency debt will be extended through Q1 2010 instead of ending at year end. The Fed must accommodate foreigners as they keep jettisoning agency debt.

          The most salient part of the FOMC Communiqué: To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt. The Committee will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010. As previously announced, the Federal Reserve’s purchases of $300 billion of Treasury securities will be completed by the end of October 2009.  

          The Fed has monetized $862B of its $1.25 trillion MBS plan, and $129.2 B of its $200B agency program.

          Nearly half the nation's 25 biggest retail chains expect to hire fewer holiday workers this season than they did last year, another sign that retailers aren't counting on recession-strained shoppers to relax the tight grip on their pocketbooks...

          About 40% of stores surveyed across a broad swath of retailing, including consumer-electronic chain Best Buy Inc., teen-retailer American Eagle Outfitters Inc., and luxury-goods seller Saks Inc., told the Hay Group that they expect to hire between 5% and 25% fewer temporary workers this year than last, when the recession forced many retailers to trim staff in response to falling sales.

          That's a grimmer outlook than the Hay survey found a year ago, when 29% of retailers said they would be slashing their holiday workforce.

          HANK Paulson has admitted that he kept in touch with "market participants" on Wall Street when he was Treasury secretary.  

           But did the former head of Goldman Sachs use his government position to enrich his friends during one of the most tumultuous times in US financial history? 

          Paulson's phone logs, which I obtained after a Freedom of Information Act request, show that the Treasury chief kept in frequent touch with a virtual Who's Who of Wall Street's power players.  But a half- hour block of time could prove to be the most intriguing bit of non-information in his schedule. 

         The stock market had been in a free fall all that day, but at around 3:10 p.m. on Aug. 16 -- less than three hours after the Bernanke/Paulson lunch, the stock market turned on a dime.

         This sort of "very illegal" inside information trading has been part and parcel of this entire mess.  It is part and parcel of how we have a couple of firms, one in particular (cough-Goldman-cough!) who manage to make money on their "proprietary trading" virtually every day in a quarter, a statistically-improbable outcome akin to that of getting hit in the head by a meteorite when one goes to get their mail.

        The trading patterns make crystal clear that certain market participants new in front of the announcement what was to come in each and every case.  The bets placed were enormous and one-sided.

        But when the law only applies to "the little people" we indict Martha Stewart while some of the biggest firms on Wall Street do the same sort of thing literally every day - with impunity.

          President Obama is exploring alternatives to a major troop increase in Afghanistan, including a plan advocated by Vice President Joseph R. Biden Jr. to scale back American forces and focus more on rooting out Al Qaeda there and in Pakistan, officials said Tuesday.

          In looking at other options, aides said, Mr. Obama might just be testing assumptions — and assuring liberals in his own party that he was not rushing into a further expansion of the war — before ultimately agreeing to the anticipated troop request from General McChrystal. But the review suggests the president is having second thoughts about how deeply to engage in an intractable eight-year conflict that is not going well.

        The Fed and the government sent a message to companies that “the bigger that you are, the more problems that you get yourself into, the more likely the government is to bail you out,” Palin said in the closed door speech, according to a tape of the event given to Bloomberg News. “Of course the little guys are left out then. We’re left holding the bag, all the moms and pops all over America.”

        Palin criticized Obama’s plan to give the Fed powers to monitor risks to the financial system. A meltdown last year led to $1.6 trillion of bank losses and writedowns and triggered a global recession. 

        “How can we think that setting up the Fed as monitor of systemic risk in the financial sector will result in meaningful reform,” she said. “The words ‘fox’ and ‘henhouse’ come to mind.” 

Existing-home sales in the U.S. unexpectedly fell in August, breaking a string of four increases as the housing market struggles to recover. Home resales decreased by 2.7% to a 5.10 million annual rate, the National Association of Realtors said Thursday.

Wall Street expected a sales rate of 5.39 million sales rate for previously owned homes. It was a mild retreat from a very strong gain, NAR economist Lawrence Yun said, adding the sales pace in August was the second highest in nearly two years. The highest was in July, when sales rose to 5.24 million, capping four increases in a row.

Distressed property sales have pushed prices lower, year over year. The median price for an existing home last month was $177,700, down 12.5% from $203,200 in August 2008. Existing home sales have gone up four times in six months as a nascent economic recovery, rising affordability, and a big tax break offset tight financing conditions and a jobless rate expected to top 10%.

The number of U.S. workers filing new claims for jobless benefits unexpectedly declined last week, according to a Labor Department report Thursday.

Meanwhile, total claims lasting more than one week also decreased.

Initial claims for jobless benefits fell 21,000 to 530,000 in the week ended Sept. 19, the department said in its weekly report.

Economists surveyed by Dow Jones Newswires had expected a rise of 5,000. The previous week's level was revised from 545,000 to 551,000. The four-week moving average of new claims, which aims to smooth volatility in the data, fell by 11,000 to 553,500 from the previous week's revised figure of 564,500.

This latest data still leaves claims at a fairly high level, reinforcing the view shared by most economists that the job market will take longer to heal. The August monthly jobs report recently found that while job losses softened, the unemployment rate had also climbed to 9.7% -- the highest level in 26 years.

The fact we are not improving faster has been an ongoing disappointment, Wrightson ICAP economist Lou Crandall said in a Wednesday interview, adding that other employment indicators have proved more encouraging than jobless claims.

But the unexpected drop in last week's claims also may suggest that the labor market is improving, albeit slowly.

When I think you step back and look at everything that has happened since March when claims peaked, I would say the trend has generally been down since then," JP Morgan Chase & Co. economist Abiel Reinhart said Wednesday.

In the Labor Department's Thursday report, the number of continuing claims -- those drawn by workers for more than one week in the week ended Sept. 12 - fell by 123,000 to 6,138,000 from the preceding week's revised level of 6,261,000.

The unemployment rate for workers with unemployment insurance for the week ended Sept. 12 was 4.6%, a 0.1 percentage point decrease from the prior week's unrevised rate of 4.7%

The largest increases in initial claims for the week ending Sept. 12 were in Wisconsin, Oregon and Kansas. The largest decreases in initial claims were in Texas, Illinois, Pennsylvania, Michigan and Massachusetts.

Luxury hotel owners risk defaulting on their debt as the recession cuts occupancies and the credit crunch constrains refinancing.

Loans secured by more than 1,500 hotels with a total outstanding balance of $24.5 billion may be in danger of default, according to Realpoint LLC, a credit rating company that tracks commercial mortgage-backed securities. Some of the biggest loans, put on the company’s watch list because of late payments, decreasing occupancies or cash flow, were made to luxury properties where rooms can cost more than $850 a night.

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