CHESSNOID

The market closed mixed on good and bad news. What I thought was interesting was the financials seem to keep putting out bad news. I truly believe they are spoon feeding it out to avoid a panic or basically to cook the books and show less losses than they actually have. I have always suspected that the banks and other financial companies are in dire straights like Bear Stearns was. That is why every quarter they come out with “surprising worse losses or write downs”.

“The Fed is done lowering rates, and they’ve spent the time since the last meeting communicating that to the market,” said Joseph Keating, the Birmingham, Alabama-based chief investment officer of RBC Bank Private Asset Management, which oversees about $3 billion. “That begs the question `When are they going to raise?”’

The Dow industrials dropped 395 points, or 3.1 percent, on June 6 following a jump in the unemployment rate and a $10-a- barrel rise in crude oil. The S&P 500 also retreated, trimming its rally from a 19-month low in March to 6.9 percent.

Washington Mutual, the biggest U.S. savings and loan, lost $1.28, or 17 percent, to $6.25. The company’s mortgage-related losses will be about $21.7 billion through 2011, compared with the $12 billion to $19 billion the company forecasts, UBS AG analyst Eric Wasserstrom wrote in a report. He cut his 12-month share price target to $8.50 from $11.

Lehman’s Drop

National City dropped 48 cents, or 9.7 percent, to $4.47.

Lehman, the fourth-largest U.S. securities firm, reported a record $2.8 billion second-quarter loss and said it will raise $6 billion in capital in a public offering. Stocks in Europe and Asia dropped as investors speculated bank losses will increase.

Lehman dropped $2.81 to $29.48. A gauge of financial stocks in the S&P 500 lost 2.3 percent after earlier rising 0.8 percent.

Citigroup Inc., Merrill Lynch & Co. and UBS AG may post losses of $10 billion on bond insurance after MBIA Inc. and Ambac Financial Group Inc. lost their top credit ratings, Oppenheimer & Co. analyst Meredith Whitney said.

MBIA and Ambac, the world’s largest bond insurers, had their AAA ratings cut two levels by Standard & Poor’s June 5, which trimmed ratings on more than $1 trillion of securities they guaranteed. The downgrades may limit the so-called monoline insurers’ ability to write new policies, putting further pressure on earnings, Whitney wrote in a note to investors.

Merrill, UBS

Merrill lost $1.26, or 3.2 percent, to $37.76 and UBS retreated 81 cents to $23.10. MBIA and Ambac each fell more than 10 percent. Citigroup dropped 46 cents to $19.60.

Last year, the governments of Singapore and Qatar helped us by buying stock in our major financial companies. They took a hit since then. I wonder if more countries will buy up some more of our cheap stock?