Stock Market Plummets

[JeffWartman]

S&P erases gains for year as mortgage lender sinks
Wednesday August 15, 5:48 pm ET
By Kristina Cooke

NEW YORK (Reuters) - U.S. stocks fell sharply on Wednesday, wiping out the year's gains for the benchmark S&P 500, after Countrywide Financial shares plunged on a brokerage downgrade and rumors it was having trouble raising money.

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The clouds enveloping the No. 1 U.S. mortgage lender, which had its biggest one-day percentage drop since the 1987 stock market crash, exacerbated concerns about the health of the mortgage lending business and its effect on wider credit markets.

After a fleeting rally, financial shares helped push the market sharply lower in the last hour of trading. Energy companies' stocks also dropped after striking early gains...

Full Story: http://biz.yahoo.com/rb/070815/markets_stocks.html?.v=16

[red states rule]

and when the Dow rebounds, as it always does, you will dismiss it

overall the economy is doing very well


Consumer Prices, Industrial Output Data Shows Glass-Half-Full Economy
Wednesday, August 15, 2007


WASHINGTON — Falling gasoline costs held U.S. consumer prices nearly in check in July, while industrial output rose in a sign of factory sector health, according to data that suggested the economy was sound despite credit fears in financial markets.

Other reports on Wednesday showed a slight dip in New York state manufacturing activity this month and a decline in the amount of capital flowing into the United States in June.

But analysts said the latest data, combined with reports earlier this week showing strong retail sales and a shrinking trade deficit, pointed to an economy that is actually doing pretty well.

"Things don't look that bad. There is no evidence yet in the data that the economy is on the cusp of losing steam," said Michael Darda, chief economist at MKM Partners in Greenwich, Conn.

The Consumer Price Index, a key inflation gauge, rose a slightly smaller-than-expected 0.1 percent as gasoline prices fell 1.7 percent, the Labor Department said. Economists polled by Reuters had expected a rise of 0.2 percent.

Darda said even with the latest volatility in the financial markets amid fears of a liquidity shortage, the Federal Reserve is not likely to cut interest rates.

"What's happened with the financial market turbulence is it takes the Fed out of the picture for the foreseeable picture. I think the Fed is going to be very disciplined," Darda said.


for the complete article

http://www.foxnews.com/story/0,2933,293371,00.html

[red states rule]

A Temporary Power Outage in an Otherwise Bright Economy
By Lawrence Kudlow

Wall Street remains caught in a tizzy over a power outage in the credit markets. But Main Street is in fine economic shape, according to the latest reports out of Washington.

Industrial production -- one of the most important coincident indicators out there -- is steadily rebounding. Overall, it's up 2.9 percent annually over the past three months. Manufacturing is up 4.7 percent. Auto output has increased 19.4 percent. Computers and office equipment are up a whopping 25 percent.

These are big numbers. And Americans are buying what these businesses are producing. Overall retail sales are up 4.8 percent for the past three months at an annual rate.

Sure, housing is still soft. But building-material sales are up 11.4 percent for the past three months. General merchandise and department stores are up roughly 10 percent. Clothing stores are up 12 percent.

Meanwhile, the latest inflation numbers from the consumer price index are tame. Headline inflation is up 2.4 percent over year ago, and core inflation is at 2.2 percent. On a more accurate chain-weighted basis, the overall CPI rose only 2.1 percent with a core increase of 1.8 percent. Gasoline prices have dropped about 50 cents at the pump.

Wall Street is beating up Wal-Mart for expected growth of only 2 percent. But the Democrats' most-hated American company actually posted a 49 percent gain in profits over the past year. As Jimmy Pethokoukis of U.S. News reports, Wal-Mart's $11 billion in profits came with sales of $345 billion -- an 8.8 percent gain over a year ago and nearly twice the growth of U.S. nominal GDP. Over at Costco, profits have gained 14 percent. Target is up 20 percent. Low-end retailers (at least these boys) are doing pretty darn well.

for the complete article

http://www.realclearpolitics.com/articles/2007/08/a_temporary_power_outage_in_an.html