Dow lost 31 & in the red for most of the day after a strong opening, decliners over advancers almost 3-2 & NAZ rose 20. The MLP index tumbled 6+ to the 512s (an unusually large drop) & the REIT was up pennies at 307. Junk bond funds pulled back while Treasuries were sold. Oil
dropped to a 2-week low, flirting with 100, after a gov report showed that
US gasoline supplies gained as demand slipped & gold was down a tad (under 1300).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.21955665764770838)
Photo: Bloomberg
The Federal Reserve (FED) said slack in the labor market persists even as the economy is picking up, & it continued to trim monthly asset purchases that have pumped up its balance sheet to a record $4.4T. “A range of labor-market indicators suggests that there remains significant underutilization of labor resources,” the FOMC said. “The likelihood of inflation running persistently below 2 percent has diminished somewhat.” Policy makers tapered monthly bond buying to $25B in their 6th consecutive $10B cut, staying on pace to end the purchase program in Oct. The FED is stepping up a debate over when to raise interest rates for the first time since 2006 as unemployment falls faster than expected & inflation picks up toward the 2% goal. The outlook brightened today with a gov report showing the economy expanded more than forecast in Q2. At the same time, Yellen has expressed concern about persistent signs of labor-market slack, including low wages. The FOMC repeated it’s likely to reduce bond buying in “further measured steps” & to keep interest rates low for a “considerable time” after ending purchases. “Inflation has moved somewhat closer to the committee’s longer-run objective,” the FED said. Its preferred inflation gauge, the personal consumption expenditure price index, rose 1.8% in May from a year earlier. Its 12-month gain was as low as 0.8% in Feb. Philadelphia FED President Charles Plosser dissented, objecting that the guidance on the timing of a rate increase was “time dependent” & didn’t reflect “considerable economic progress.”
Fed Sees Labor-Market Slack Even as It Trims Bond Purchases
Countrywide unit was ordered to pay $1.3B in penalties for defective mortgage loans sold to Fannie Mae & Freddie Mac in the run-up to the 2008 financial crisis, a little more than half of what the federal gov had requested. US Judge Jed Rakoff issued the civil penalty against the bank today in the first mortgage-fraud case brought by the federal gov to go to trial. Countrywide & Rebecca Mairone, a former executive with the mortgage lender, were found liable in Oct for selling thousands of bad loans to the 2 gov-sponsored enterprises. Mairone was ordered to pay $1M. While Rakoff didn’t grant the gov request for the maximum penalty of $2.1B, he concluded that Fannie & Freddie paid Countrywide nearly $3B for the loans . The judge reduced the penalty by 43% because experts for both sides said more than 57% of the loans were of “acceptable quality.” Separately, Bank of America is nearing a settlement with the Justice Dept after raising its proposed offer to resolve probes into its sale of mortgage-backed bonds. Representatives of the bank were at the Justice Dept today to discuss the terms, & an accord could be reached this week. The amount of the settlement under discussion was $13-$17B. The discussions include how much money will be paid in cash & how much in consumer relief. During the Countrywide trial, the gov argued Countrywide committed a “simple but brazen” fraud by misrepresenting risky loans processed in 2007 & 2008 thru its “High Speed Swim Lane,” or HSSL, program as being of investment quality. The US said Countrywide issued defective mortgages under the program, & then sold them to Fannie Mae & Freddie Mac. The stock went up a quarter. If you would like to learn more about BAC, click on this link:
club.ino.com/trend/analysis/stock/BAC?a_aid=CD3289&a_bid=6ae5b6f7
Bank of America’s Countrywide Ordered to Pay $1.3 Billion
Twitter CEO Dick Costolo is getting the company back on track with investors by drawing people to use the service more. The company yesterday reported revenue more than doubled to $312M in Q2 & user growth, buoyed by World Cup-related demand, jumped 24%, topping estimates. While the net loss widened to $144M, TMTR forecast sales for Q3 that exceeded estimates & raised its full-year guidance. Costolo bolstered the numbers by making a case that including the audience for tweets beyond its own platform, the company’s reach is more than twice its active user base. The World Cup features show what it can do for future events, he added. Costolo said revenue rose mostly because users spent more time on the service, as the product was tweaked to better attract them. The results & comments are part of a comeback attempt for the company. After 2 straight qtrs of decelerating user growth, which followed the IPO in Nov, investors had questioned whether the company’s fastest sales growth was in the past. The CEO responded by gutting executive ranks, including replacing the CFO & operating chief. “Our main message today was that we’re looking to build, and we know we can build, the largest audience in the world,” Costolo said. “We can deliver on that promise.” TWTR still faces challenges. Its net loss was more than 3X as big as its $42M loss a year earlier. Total expenses are increasing at a rapid rate, rising to $462M from $178M a year earlier. User growth also slipped slightly from a 25% increase in the prior period. Yet TWTR also released numbers showing people are more engaged with the service. Members, which now total 271M, viewed their TWTR timelines more often, with 173B views, up from 157B in Q1. The stock shot up 7.71 (20%) to 46.30. If you would like to learn more about TWTR, click on this link:
club.ino.com/trend/analysis/stock/TWTR?a_aid=CD3289&a_bid=6ae5b6f7
Twitter Stock Surges as CEO Costolo Makes Case for Future Growth
It's tough to figure out this market. There was nothing really new from the FOMC decision. Maybe it was the thought that a strong economy might encourage those guys to raise interest rates sooner, something all bulls fear. It is widely believed that increases will begin next year which is not all that far away. Dow is back to where it was on Jun 6. That's up a modest 300 YTD, about 2%.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLU14.NYM | ....Crude Oil Sep 14 | ....100.18 |  ...0.79 | (0.8%) |
The Federal Reserve (FED) said slack in the labor market persists even as the economy is picking up, & it continued to trim monthly asset purchases that have pumped up its balance sheet to a record $4.4T. “A range of labor-market indicators suggests that there remains significant underutilization of labor resources,” the FOMC said. “The likelihood of inflation running persistently below 2 percent has diminished somewhat.” Policy makers tapered monthly bond buying to $25B in their 6th consecutive $10B cut, staying on pace to end the purchase program in Oct. The FED is stepping up a debate over when to raise interest rates for the first time since 2006 as unemployment falls faster than expected & inflation picks up toward the 2% goal. The outlook brightened today with a gov report showing the economy expanded more than forecast in Q2. At the same time, Yellen has expressed concern about persistent signs of labor-market slack, including low wages. The FOMC repeated it’s likely to reduce bond buying in “further measured steps” & to keep interest rates low for a “considerable time” after ending purchases. “Inflation has moved somewhat closer to the committee’s longer-run objective,” the FED said. Its preferred inflation gauge, the personal consumption expenditure price index, rose 1.8% in May from a year earlier. Its 12-month gain was as low as 0.8% in Feb. Philadelphia FED President Charles Plosser dissented, objecting that the guidance on the timing of a rate increase was “time dependent” & didn’t reflect “considerable economic progress.”
Fed Sees Labor-Market Slack Even as It Trims Bond Purchases
Countrywide unit was ordered to pay $1.3B in penalties for defective mortgage loans sold to Fannie Mae & Freddie Mac in the run-up to the 2008 financial crisis, a little more than half of what the federal gov had requested. US Judge Jed Rakoff issued the civil penalty against the bank today in the first mortgage-fraud case brought by the federal gov to go to trial. Countrywide & Rebecca Mairone, a former executive with the mortgage lender, were found liable in Oct for selling thousands of bad loans to the 2 gov-sponsored enterprises. Mairone was ordered to pay $1M. While Rakoff didn’t grant the gov request for the maximum penalty of $2.1B, he concluded that Fannie & Freddie paid Countrywide nearly $3B for the loans . The judge reduced the penalty by 43% because experts for both sides said more than 57% of the loans were of “acceptable quality.” Separately, Bank of America is nearing a settlement with the Justice Dept after raising its proposed offer to resolve probes into its sale of mortgage-backed bonds. Representatives of the bank were at the Justice Dept today to discuss the terms, & an accord could be reached this week. The amount of the settlement under discussion was $13-$17B. The discussions include how much money will be paid in cash & how much in consumer relief. During the Countrywide trial, the gov argued Countrywide committed a “simple but brazen” fraud by misrepresenting risky loans processed in 2007 & 2008 thru its “High Speed Swim Lane,” or HSSL, program as being of investment quality. The US said Countrywide issued defective mortgages under the program, & then sold them to Fannie Mae & Freddie Mac. The stock went up a quarter. If you would like to learn more about BAC, click on this link:
club.ino.com/trend/analysis/stock/BAC?a_aid=CD3289&a_bid=6ae5b6f7
Bank of America’s Countrywide Ordered to Pay $1.3 Billion
Bank of America (BAC)
Twitter CEO Dick Costolo is getting the company back on track with investors by drawing people to use the service more. The company yesterday reported revenue more than doubled to $312M in Q2 & user growth, buoyed by World Cup-related demand, jumped 24%, topping estimates. While the net loss widened to $144M, TMTR forecast sales for Q3 that exceeded estimates & raised its full-year guidance. Costolo bolstered the numbers by making a case that including the audience for tweets beyond its own platform, the company’s reach is more than twice its active user base. The World Cup features show what it can do for future events, he added. Costolo said revenue rose mostly because users spent more time on the service, as the product was tweaked to better attract them. The results & comments are part of a comeback attempt for the company. After 2 straight qtrs of decelerating user growth, which followed the IPO in Nov, investors had questioned whether the company’s fastest sales growth was in the past. The CEO responded by gutting executive ranks, including replacing the CFO & operating chief. “Our main message today was that we’re looking to build, and we know we can build, the largest audience in the world,” Costolo said. “We can deliver on that promise.” TWTR still faces challenges. Its net loss was more than 3X as big as its $42M loss a year earlier. Total expenses are increasing at a rapid rate, rising to $462M from $178M a year earlier. User growth also slipped slightly from a 25% increase in the prior period. Yet TWTR also released numbers showing people are more engaged with the service. Members, which now total 271M, viewed their TWTR timelines more often, with 173B views, up from 157B in Q1. The stock shot up 7.71 (20%) to 46.30. If you would like to learn more about TWTR, click on this link:
club.ino.com/trend/analysis/stock/TWTR?a_aid=CD3289&a_bid=6ae5b6f7
Twitter Stock Surges as CEO Costolo Makes Case for Future Growth
Twitter (TWTR)
It's tough to figure out this market. There was nothing really new from the FOMC decision. Maybe it was the thought that a strong economy might encourage those guys to raise interest rates sooner, something all bulls fear. It is widely believed that increases will begin next year which is not all that far away. Dow is back to where it was on Jun 6. That's up a modest 300 YTD, about 2%.
Dow Jones Industrials
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