Some Thoughts:

It is Raining Heavily outside; we are getting the rains that were in the south over the weekend. The pictures above are of 1) Normandy Beach, NJ , taken yesterday, as I walked along the shore for the first time this year, and 2) my friend D’s backyard in Tennessee, where you can see the water level halfway up into the garage.

As I write I am listening to the Talking Heads’ Once in a Lifetime on my computer,

Let the days go by/let the water hold me down
Let the days go by/water flowing underground
Into the blue again/after the money’s gone
Once in a lifetime/water flowing underground,

as I read about Greece’s watered down aid package of $149 billion (many thought it would be $161 or higher). There is also a story on how Warren Buffett has no problem with the Goldman Sachs Abacus deal, where hedge fund manager, Paulson, hand picked specific mortgages known to be under water. And it appears it is official: Continental will merge with UAL, creating the world’s largest airline. The deal will create great synergies, specifically in their trans-Atlantic routes. In addition I am reading about the sinking of BP’s Deepwater Horizon rig, and sizing up the effect that the oil spill will have on the gulf shoreline. I am rummaging through Friday’s liquidity reports, and noting the increased liquidity we sourced on AQUA . Many world markets are closed for part of this week. China is closed for Labor Day, the FTSE is closed, and the UK has a banking holiday today.  I suppose this explains the lack of liquidity overseas this morning.

Oh… and Jay Leno at the WHCA Press Dinner last night: “The President isn’t as aloof as some critics say he is; he loves to socialize – healthcare, car companies….”

Where we left off 4:00pm EST:

INDU                      11008.61                               -158.71

SPX                        1186.69                                 -20.09

CCMP                    2461.19                                 -50.73

Futures now at 7:00am EST:

DJA                                                                         +35

SPA                                                                        +4.9

NDA                                                                        +8.0

Key Data out today:

08:30:                                                     Personal Income

08:30:                                                     Personal Spending

08:30:                                                     PCE Deflator (YOY)

08:30:                                                     PCE Core (MoM)

08:30:                                                     PCE Core (YoY)

10:00:                                                     ISM Manufacturing

10:00:                                                     Construction Spending

05:00:                                                     Vehicle Sales

Since yesterday’s close, some key stories:

AFSU

–          China raises reserve requirement by 50bps.

–          Greece reaches bailout deal.

–          Time Square Car Bomb Fails.

–          UAL/CAL merger via stock swap.

–          BMY receives response letter on BLA for belatacept.

–          JNJ voluntarily recalls children’s Tylenol, Motrin, Zyrtec, and Benadryl over manufacturing deficiencies.

Significant Movers This Morning:

	US – Upside
Symbol	Name	Last	%	Mrkt Cap	Headlines
BPI	Bridgepoint	26.95	4.80%	1,401	Earnings
TSO	Tesoro	13.54	3.00%	1,857	B of A Upgrade
CAL	Continental	23.00	2.90%	3,121	Merger

Earnings today:

Ticker                    Estimate               Actual

AFSI                        .49                          .51

ASF                         -.07                         .09

AUXL                      -.32                         -.18

AWI                         .13                          .24

BPI                          .34                          .49

CNA                        .65                          .74

CSE                        -.17                         -.66

EMCI                      .55                          .73

GAS                        1.34                        1.33

IART                       .57                          .63

ISPH                       -.21                         -.18

L                              .96                          .99

MD                          .81                          .82

NTE                        -.02                         -.02

SVVS                      -.19                         -.21

TGE                        -.02                         .03

Expected Earnings Later:

AB, ACTU, ALC, AMCN, AMPH, AMSF, ANDE, ANSW, APC, ARRY, ARW, ASIA, AUY, AVNR, BFS, BKD, BLC, BMR, CAR, CGNX, CKEC, CLX, CMRO, CNQR, CRK, CUTR, CVI, DCO, DEI, DW, DXPE, EGOV, ENTH, EPR, ESC, EXBD, EXR, FMC, FMR, FSR, FST, FVE, GFA, GLRE, GNK, GOOD, GVA, HCN, HEOP, HF, HFWA, HLF, HOLX, IDIX, IPGP, IPHS, IRIS, ISYS, IUSA, IVAC, KDN, LF, LTC, MAG, MCK, MCY, MERC, MIG, MVIS, MXGL, N, NTLS, NTRI, PBI, PFBC, PFG, PKY, PPCO, PPS, PRGX, PSB, PSEM, PWAV, QGEN, RAX, RBC, ROG, RSO, SFSF, SGMO, SKH, SM, SNCR, SUMR, SWS, SYKE, SYY, TNL, TNS, TSU, TXRH, UDR, UIL, UNCR, ITI, VITA, VMC, VNR, VOLC, VQ, VRX, VVUS.