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http://finance.yahoo.com/intlindices

http://money.cnn.com/markets/morning_call/










http://www.kitco.com

Energy futures

Currencies/Au/Ag

Oz obviously not impressed by the US action. All Ords -0.7%, IT is down the most, -1.2% with Energy next at -1.1%. Consumer Staples is down the least, -0.2%.

The mining sector mixed: BHP -1%, RIO -0.2%. Golds are up: Newcrest +1.5%, Lihir +1% and Newmont flat.

Oils dipping: Woodside -0.3%, Santos -0.8% and Caltex +0.3%.

Darling Says Northern Rock Sale May Fail on Financing

Jan. 10 (Bloomberg) -- U.K. Chancellor of the Exchequer Alistair Darling said it might not be possible for companies to finance a rescue of Northern Rock Plc, suggesting the British government may be forced to take ownership of the bank.

The Treasury's top priority is to protect more than 25 billion pounds ($49 billion) of taxpayer loans and the depositors with savings at the Newcastle-based institution, Darling told a Parliament committee in London today. Shareholders, he said, should realize their investment may be worthless.

The remarks are the clearest to date to indicate that Treasury officials are preparing to nationalize Northern Rock. Darling has until the middle of February to decide whether one of the private companies bidding to buy the mortgage lender has a viable bid before a European Union deadline to end state aid.

Centro shares enter trading halt

CENTRO Properties Group and Centro Retail Group securities have been placed in a trading halt pending the release of an announcement by the company.

The securities will remain subject to the halt until either normal trading begins on January 15 or an announcement is made.

The decline came amid reports Centro and its lawyers had met with the Australian Securities and Investment Commission (ASIC) in Sydney on Wednesday.

The selling intensified this arvo leaving All Ords clinging to fragile support. The index closed -1.5% with IT doing the dive, -4.1% and Property Trusts, now back to 2005 levels, finished -2.8%. Consumer Staples had the least damage, -0.5%.

Not a lot of joy in the miners: BHP -2%, RIO -1.9% and in the golds, Newcrest -0.7%, Lihir +0.8% and Newmont -1.8%. Juniors mixed.

Oils looked bearish: Woodside -1.3%, Santos -1.4% and Caltex -1.1%.

Asia mixed: Sth Korea -2%, Nikkers -1.6%, Honkers +0.1% and India +0.7%.


On to UK/Europe:








http://finance.yahoo.com/intlindices?e=europe

Why do I have the feeling UK's taxpayers are going to get skewered?

"JPMorgan Chase & Co. appointed former British Prime Minister Tony Blair as a senior adviser and member of its international council, which advises the third-largest U.S. bank on global business issues."

http://www.bloomberg.com/apps/news?pid=new...id=aRn9dsjq3bT8

"Northern Rock Plc, the U.K. bank bailed out by the Bank of England, agreed to sell mortgages valued at 2.2 billion pounds ($4.3 billion) to JPMorgan Chase & Co. as the company seeks to repay loans from the central bank."

http://www.bloomberg.com/apps/news?pid=206...GZIo&refer=home

A million dollars a year to offer advise to JP Morgan? Blair probably doesn't know how to balance a checkbook. Nice work if you can get it.

Take my word for it that this isn't a political comment. I said years ago that Blair would become a made man and his family would be taken care of for generations to come for his support of the Iraq war and that the money would come from America. That's how free markets work. Everyone working for their own self interest.

1/11/2008 7:04:56 AM Bank of America Corp. (BAC) announced a definitive agreement to purchase Countrywide Financial Corp. (CFC) in an all-stock transaction worth approximately $4 billion.

RTTNews Feed

Imagine that, getting free money, naaaa, How could that happen?

http://www.upi.com/NewsTrack/Top_News/2008...al_probed/3793/

BoA is buying CFC, with the cr*p backed by the Feds. JPM rumoured to be buying WaMu, assuming under the same sweetheart deal as BoA. And Merrill taking 15 billion in write-downs (it appears the bonus checks have been cashed...how are you feeling about that if you are a shareholder...just unbelievable).

Should be an interesting day.

They got 'till June to buy it even cheaper. Knowing Mozillo, there have to be a dozen or so off-the-ledger "ventures" not (yet) disclosed to BoA or the shareholders. They'll renegotiate the agreement twice. Why buy at 6$ and change when you can get it at 50c in a few more months? Answer: duhhhhhhh ....

From the BoA news release:

"Financial Terms

Under the terms of the agreement, shareholders of Countrywide would receive .1822 of a share of Bank of America stock in exchange for each share of Countrywide.

The purchase is expected to close in the third quarter and to be neutral to Bank of America earnings per share in 2008 and accretive in 2009, excluding merger and restructuring costs.

Bank of America expects $670 million in after-tax cost savings in the transaction, or 11 percent of the expense base of the two companies' mortgage operations. About one third of those savings would come in 2009, two thirds would be realized in 2010 and savings would be fully realized in 2011."

Now Fed+19.

They are dropping like flies.

A good, old-fashioned take-under. Cool.

NOT.

And now get ready for layoffs, layoffs, and more layoffs.

Actually, BofA has until September. Their quarters are the same as the calendar year.

[quote=Peek Paper,Jan 11 2008, 08:30 AM]
They got 'till June to buy it even cheaper. Knowing Mozillo, there have to be a dozen or so off-the-ledger "ventures" not (yet) disclosed to BoA or the shareholders. They'll renegotiate the agreement twice. Why buy at 6$ and change when you can get it at 50c in a few more months? Answer: duhhhhhhh ....

From the BoA news release:

"Financial Terms

Under the terms of the agreement, shareholders of Countrywide would receive .1822 of a share of Bank of America stock in exchange for each share of Countrywide.

The purchase is expected to close in the third quarter and to be neutral to Bank of America earnings per share in 2008 and accretive in 2009, excluding merger and restructuring costs.

Bank of America expects $670 million in after-tax cost savings in the transaction, or 11 percent of the expense base of the two companies' mortgage operations. About one third of those savings would come in 2009, two thirds would be realized in 2010 and savings would be fully realized in 2011."

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I wonder if the Tan Man can keep his do not go to jail card?

So, is it time to reenter SKF (ultrashort Financials ) ?

CFC will be a black hole for BAC, IF the deal is completed. I have my doubts.

I got to give Cramer dredit for calling that yesterday. He is the mouth piece for the Fraudsters.

BAC's current 4 year cycle projection is around 33.50. I suspect that may adjust downward.

It DEPENDS on how much of the bad loans are passed to the taxpayers just like the RTC.

I have no clue what sense the BofA/CFC deal makes.

CFC's "assets" are basically poor clients. For what does BofA want them?

Seems to be a "political" deal, economically it doesnt make sense. Right?

Agreed, but we don't know how much of the bad stuff the taxpayers are going to eat.

dow drops through the 3 and 5 day cycle MAs at 12758 and 12727. 3 day cycle indicators rolling over. 5 day still on buy side.

CNBS info babe- The takeout of the weak by the strong should mark the bottom for the mortgage problem.

FX- This is Sinclairs take on the subject FWIW! Brick
Let us assume one of the largest mortgage entities, Countrywide, who would have certainly been a significant player in the credit derivative market, has a very major credit derivative position with Bank of America. Lets' assume that Countrywide was the entity that had the obligation to perform, but now clearly can't. If Bank of America was to buy the non-performing other side of the many transactions and Countrywide become one entity with Bank of America, as they would, would the transactions between them not evaporate in the merge? It absolutely would. What would you then have to mark down on those specific transactions? I believe NOTHING would have to be marked down any further as two sides of the transaction became one.

That would qualify the already invested $2 billion, plus whatever else needs now to be paid to Countrywide' stockholders. This would more than likely be paid in paper.

It might explain the inexplicable "why" of Bank of America putting $2 billion into Countrywide recently when Mickey Mouse could see that as a sketchy investment at best.
http://www.jsmineset.com/

spx doing the same with the 8 day cycle MA at 1408.80 and 5 day at 1405.39. Initial sell signals on 3 day cycle indicators but not on 5 day. The critical level is the 5 day cycle MA on both Dow and SPX.

EWZ... Breakout/Fakeout...Global markets may be on the verge here.....

Apparently the market is having second thoughts. BAC down .95 from the high.

qqqq in a holding pattern near the 8 day cycle MA at 47.63 and flat. 3 and 5 day cycle MAs converging and nearly flat at 47.75. That's the defining range that needs to be watched.

so far, the 5 day MAs are holding on Dow and SPX.

Financials are strong today.
I'm long ES at 1412.75

Gamble time ( again ) - reentering a small position of SKF at 113.

depends on the definition of "strong"

to me it would be the same as saying, when GM buys F the american auto industry would have a golden future

Out at 1417.25...

interesting and a possible explanation. Hope BofA has good accountants or if not at least enpugh cash to bribe the guys from Deloitte or KPMG.

Trivia: In Quebec, the union of a debtor and creditor in the same entity is said to "extinguish the debt by confusion."

DONG YM at 12746

It's incredible to see the beating semis are taking day after day.

We're going down to retest the lows.

at least....

Why didn't you say, "When Daimler merges with Chrysler?"

i expect a hard core sell off into the close today, till then a bit up and down.

Why should this be surprising! You could have shorted with impunity when I donged the SMH at 29.35 last week!

qqqq 3 day cycle projection 46.65-.75

I think this gap gets close first....

spx prelim3 day cycle projection 1392. 5 hr projection 1398.

dow 5 hr cycle projection 12615. prelim 3 day cycle projection 12500.

Crapvision sez Moody's just announced it may downgrade BAC debt.


This is all a house of cards...

cause Daimler was sane before the merger. Dont think that BofA is really sane at the moment. Two ill man doesnt lead to one sane man. But thats what BofA tries at the moment.

After all i still dont get the deal. I mean, ok, they buy their own debt so to say, but they dont get any assets with it. Usually you buy assets and you also have to buy the debt with it, but the assets are worth more than the debt. But what are the assets of CFC? The goodwill?

Well done