Today's Key Market News - A Communist Retirement

(Stocks in article: NYSE: HRB, NYSE: NBG, NASDAQ: YHOO, NASDAQ: SHLD, NYSE: FRE, NYSE: TIF, NYSE: DLM)

American equities have opened broadly lower this morning, mainly due to a news report from the Wall Street Journal that proposes Ben Bernanke seeks to break the market's trust that the Fed will always be there in times of distress. Come on guys! Are President Bush and Senator Dodd going to allow that? Independent agency my arse! We all know how things work. The country is just a big corporate box, and Ben feels the heat from above as much as any corporate puppet does.

Wall Street Greek, which clearly defies the corporate mold, is absolutely sure Ben will break, even if he holds the view that the Journal depicts. The guy's voice cracks when he testifies to Congress. He's never looked confident, but that doesn't mean he will not mature into a strong Fed chief. We are willing to go through some growing pains with Ben (as long as doesn't kill us in the process), and we are absolutely certain he's going to learn a lesson from the current credit market mayhem. Most importantly, we are sure he will cut the target rate, and we are looking for a 50 basis point cut in September, or sooner, if chaos draws Ben into it.

The most important news of the day is that weekly initial unemployment claims rose 9,000, to 334,000, and out of a range we viewed as stable. In our weekly report, we wrote, "it's about time this data starts to show signs of a weakening employment environment. We expect the later September report of the Employment Situation will show new hiring sharply lower, excluding seasonal effects." The labor market should now show the signs of consumer stress we have been expecting.

In the news we handpicked for you below and within our sidebar section of the same name, there's a report that the Bank of England lent some money as the lender of last resort to an unnamed borrower. It was a lot money, and just another bit of evidence that we are still right smack in the middle of this liquidity crisis. H&R Block (NYSE: HRB) reported a distressed situation related to its mortgage unit, as we expected it would in our weekly article "The Greek's Week Ahead - Wall Street Summer Wind." We wrote, "H&R Block (NYSE: HRB) has some mortgage market exposure that might come to light and hurt the shares on Thursday." In case you think we only deliver doldrums, we also had something nice to say about the National Bank of Greece (NYSE: NBG). NBG was scheduled to report earnings at 10:00 a.m. this morning, but appears to be running on Greek time. Give it another fifteen minutes...

In some notable news missed by major media, China replaced five Cabinet Ministers today, including its Finance Minister. In trying to avoid reading into this, we are hoping there's some personal scandal or criminal blunder behind it, and not a serious failure within China's financial markets structure. Many of the ministers were just plain too old and responsible for nonfinancial matters, like spying for instance. One even died in office (we hope of old age), so we would not read Stalinist paranoia into the moves. Jin Renqing, the Finance Minister, is 63. He's claiming personal reasons for his departure. Given his age, there would probably be a 50% chance that he's really got personal reasons, maybe health related, except for one simple giveaway. Jin is apparently accepting a new job, and it's quite a few steps down the ladder. He will now be deputy director of the Development Research Center of the State Council. Also, in communism, nobody retires early!

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