STOCK MARKET WATCH, Wednesday 9 February

[ozymandius]

Wednesday February 9, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 345 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 58 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 114 DAYS
DAYS SINCE ENRON COLLAPSE = 1172
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

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AT THE CLOSING BELL ON February 8, 2005

Dow... 10,724.63 +8.87 (+0.08%)
Nasdaq... 10,724.63 +8.87 (+0.08%)
S&P 500... 1,202.30 +0.58 (+0.05%)
10-Yr Bond... 4.04% -0.02 (-0.37%)
Gold future... 414.30 -1.10 (-0.27%)





GOLD, EURO, YEN, Dollars and Loonie

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PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

---

[Jared Skimming]

1. Thanks for posting this daily thread

I just registered my username this week but I've been lurking for a while and this thread is always one of my first stops.

You guys provide a lot of useful info I don't see anywhere else and your commentary is insightful.

Just wanted to say thanks!

[54anickel]

2. Good Morning Jared Skimming and welcome to DU!

I started DU the same way, as long time lurker and following this thread on each "lurk".

Glad you stopped in, and on behalf of all the Marketeers, thank-you. :hi:

[54anickel]

3. Good Morning Ozy. Seems the toons on SS piratization nearly

write themselves these days. I recieved an e-mail notification from Working Families that Edward Jones has been out pimping BeezleBush's plan. The are doing a writing campaign to EJ on it. This is just getting unfriggen real.

http://www.unionvoice.org/campaign/jones

[ozymandius]

31. Good late morning 54anickel and everyone!

:donut: :donut: :donut: :donut:

I hit the ground running this morning when I arrived at work. So this is my first chance to check in.

54anickel - what amazes me about this SS scamatization is that there seems to be an evolving front against it that includes unlikely partners: conservatives and textbook liberals. As the numbers continue to crunch and we get a clearer picture of what devastating after affects this would have on society and our economy - I really have to stop laughing because the cartoons are too easy.

Back later...

Ozy :hi:

[harlinchi]

44. That's a new one to me! God one, though.

BeezleBush! I'll be using it, if it's O.K. with you.

[54anickel]

50. By all means, feel free. And welcome to DU Harlinchi...n/t

[54anickel]

4. Yesterday's wrap up by Jim Puplava 02.07.2005 The Lull Before The Storm

I misuderstood one of Ozy's posts yesterday before I had to run off, so I thought this was covered. This one was worth going back for.

http://www.financialsense.com/Market/puplava/2005/0207.html

snip>

Instability in the International Monetary System
Meanwhile the financial jet stream—otherwise known as the international monetary system—is becoming increasingly unstable. Barometric pressure is dropping steadily in the world’s credit markets as central banks pump hundreds of billions of dollars into the world’s monetary system. Instead of targeting credit, central banks are targeting interest rates. The result is that money is plentiful whether for economic need or for speculation.

Washington and Peking Storm Fronts
On the horizon two simultaneous storm fronts are developing; one in Washington and one in Peking. Central bankers in the U.S. and central planners in China are attempting to slow down their respective economies. Both economies are awash with money and credit—the financial atmospherics that produce storms. In the U.S., credit is being used to finance consumption and asset bubbles. In China, credit is being used to finance an industrial boom. The U.S. is in the process of hollowing out its manufacturing base, while China is in the process of transforming itself into a manufacturing powerhouse. One country is in denial, while the other is in ascendancy. We are witnessing the greatest wealth transfer in history—one that may eventually lead to war as an inflationary hurricane in the U.S. confronts a deflationary typhoon out of China.

Inflationary Warning Signs and More of the Same
Financial forecasters are keen to point out the deflationary dangers emerging out of China, but ignore the inflationary warnings at home. Here in the U.S. the CPI has risen by 3.3% over the last year and that number is understated by hedonics. Asset bubbles continue to inflate in the stock and bond markets, mortgage markets and real estate. Consumers continue to borrow and consume. Investors are high on speculation chasing IPOs, bidding up shares of high beta stocks, standing in line or camping overnight to bid on a new home or condo. Corporations are back playing the merger game instead of building new plants or buying equipment. Wall Street is pitching IPOs in a feverish pitch and bubblehead financial anchors urge the crowds to play on.

snip>

The Fed has never been good at forecasting, especially storms of its own making. I have a vision of Mr. Greenspan as Captain Edward John Smith at the helm of the Titanic. Knowing he is surrounded by icebergs, he steams ahead without caution believing his ship to be invincible.

There is a double message here—one that the financial markets and the Fed are ignoring. The Fed seems oblivious to the myriad asset bubbles it has created. In fact it admits it has no way of telling when the financial markets are in a bubble until well after it has deflated. Perhaps that is why the Fed’s moves are measured?

more...

[JNelson6563]

11. Love this part

I have a vision of Mr. Greenspan as Captain Edward John Smith at the helm of the Titanic. Knowing he is surrounded by icebergs, he steams ahead without caution believing his ship to be invincible.

So true! It makes me recall last summer/fall, election season. We were so rockin' at Dem HQ with the $ flowin' in. I was buying large quantities of lawn signs for our county. Other counties didn't have the cash for big buys, they came to us. We were paying about $2 a sign and giving 'em to other counties for a buck apiece. Every day I went in and took inventory and assessed our situation, making sure we could safely take such "hits". Every time a county came in and took 100 signs it was a $100 hit to us.

I knew this was a good thing to do on many levels but first and foremost was my realization we were not invincible. Like the US my county was the "Big House" on the block (and everybody comes to the Big House for help) $-wise but by no means were we invincible.

Funny how a nobody in the middle of nowhere can see the need for taking a more sensible approach to such things a great big somebody in the heart of things cannot.

Julie

[54anickel]

12. Thanks Julie. I always love it when you share your experiences in

the "revolution". I hope things are going well for you and your group in that area.

As for a sensible approach - HA! Greenspin has lost what little sensibility he had (if he EVER had any). His actions have been those of a desperate man in desperate times. He's just pulling every lever around him that he can get a grasp on in an attempt to keep the good ship USofA afloat. Guess it hasn't dawned on him we're taking on water fast, all the steering power he can muster will do no good if he's too stupid to turn on the bail pump.

[ozymandius]

33. This is part of the global realignment

that I mentioned yesterday. Look at the trade deals that China has signed with Russia and Venezuela. Look at the ascendency of the euro with both Iran and Russia turning to euro denominated oil revenue and monetary reserve. The playing board is being redressed.

Greenscam's mantra concerning the U.S.'s place in this is the often repeated "highest standard of living in the world" phrase. Either he doesn't know what is happening to the U.S. economic big picture; or doesn't want to know what the big picture portends; or hopes that the eventual collision between what the world wants versus what the U.S. wants will be a mild one; or he suffers from a crack addict's level of denial.

[54anickel]

48. Oh, Oh, Oh (arm waving like Horshack) I know, I know. The answer is D -

Greenscam suffers from a crack addict's level fo denial! SNARF!!! Good one Ozy :evilgrin:

[RawMaterials]

5. Dollar Rally Stalls as Trade Data Looms

LONDON (Reuters) - The dollar's week-long rally stalled on Wednesday as investors eyed upcoming U.S. trade data and questioned recent market optimism that the twin U.S. deficits would be brought under control.

snip..

"The Berry article reinforces the view that optimistic talk on the U.S. deficit is not that convincing," said Aziz McMahon, foreign exchange strategist at ABN AMRO. "The U.S. will still be running a bigger deficit this year than last year."

At 7:45 a.m. EST the dollar was down 0.1 percent at $1.2780 per euro, and down 0.3 percent at 105.42 yen.

The greenback was down 0.4 percent against the British pound after data showed UK manufacturing output rose in December at twice the rate expected while Britain's global goods trade gap narrowed slightly.
snip..

TRADE DATA IN FOCUS

Berry cited no Fed sources for his interpretation of Greenspan's speech, but traders seized on the comments to sell the dollar after it had rallied sharply.

The twin U.S. current account and budget deficits have been a key driver of the dollar's three year downtrend which culminated in the greenback hitting record lows against the euro in the final days of 2004.

Since the start of this year, the dollar has gained around six percent against the euro with its gains accelerating after Friday's comments from Greenspan

Consensus expectations are for the U.S. trade gap to have narrowed to $57 billion in December after two consecutive months of all-time highs.

The deficit for November, originally reported at more than $60 billion, is also likely to be revised down after Canada admitted a computer error had led to mistakes with its calculations.

http://biz.yahoo.com/rb/050209/markets_forex_4.html

[RawMaterials]

6. Oil Prices Dip Below $45 a Barrel

LONDON (Reuters) - Oil prices dipped below $45 a barrel on Wednesday on expectations that data due later in the day would show rising U.S. inventories of crude and gasoline ahead of a seasonal drop in demand in the second quarter.

U.S. light crude (CLc1: Quote, Profile, Research) was down 27 cents at $45.13 a barrel by 4:24 a.m. EST, recovering from an earlier low of $44.83. U.S. crude has declined since Jan. 25 when prices had pushed close to $50 on concern a cold snap in the United States would increase demand for heating fuel.
snip..

Twelve analysts polled by Reuters forecast U.S. crude inventories probably rose by 1 million barrels in the week ended Feb. 4, widening a surplus over a year earlier that stood at more than 24 million barrels in EIA data last week.

Gasoline supplies were seen rising 600,000 barrels, the analysts said. National gasoline stocks are already running almost 4 percent higher than at the same time in 2004.

Milder-than-normal winter weather in the Northern Hemisphere has eased supply concerns, leading traders to shift their focus from heating fuel to U.S. gasoline supplies, which some analysts say look high enough to avert a price spike in spring.



http://www.reuters.com/newsArticle.jhtml;jsessionid=RQFYZC5SCPXPYCRBAELCFFA?type=businessNews&storyID=7577577

[54anickel]

9. Morning RawMaterials, your link is broken on that one. Could you

change the ; to a ?

That should fix it. A tip UIA taught me a while back. Reuters tends to have that issue a lot.

edit to add fixed link

http://www.reuters.com/newsArticle.jhtml?jsessionid=RQFYZC5SCPXPYCRBAELCFFA?type=businessNews&storyID=7577577

[RawMaterials]

24. Thanks for the tip

I need to preview my links before i post them, I have been real busy this week and it looks like ill be gone Thursday and Friday but ill still try and pop in at some times during the day.

[RawMaterials]

7. Japanese 10-Year Bond Futures Have Biggest Decline Since July

Feb. 9 (Bloomberg) -- Japanese 10-year bond futures had their biggest drop in seven months on speculation the yen's 1.5 percent decline against the dollar this week will help the economy by increasing earnings at exporters.

Demand for government debt waned after the yen yesterday dropped to an almost two-month low versus the dollar, fueling optimism a weaker currency will help shares of exporters such as Toyota Motor Corp. and Sony Corp. Japan sends about a fifth of its shipments to the U.S. and overseas sales account for a 10th of the Japanese economy.

snip..

Five-Year Auction

``The higher coupon helped draw reasonable demand at the auction,'' said Susumu Kato, chief Asia fixed-income strategist at Lehman Brothers Japan Inc. in Tokyo, one of the 26 primary dealers invited to discuss bond sales with the Ministry of Finance. ``Five-year notes have become cheaper relative to 10 year and longer debt, and some people may reverse their positions'' by shifting to shorter securities from longer debt.

The difference in yields between five-year and 10-year bonds narrowed to 77.2 basis points on Feb. 2, the smallest since March 2004, according to data compiled by Bloomberg.

Bank of Japan policy maker Miyako Suda said reserves available to Japanese lenders may temporarily fall below the 30 trillion yen floor targeted by the central bank if demand for funds remains low

snip..

Buying Operations

The central bank in March 2001 pushed interest rates to near zero percent by raising its target for reserves available to lenders. The BOJ decided at the end of its two-day meeting on Jan. 19 to keep the target between 30 trillion yen and 35 trillion yen.

The balance in the accounts held by commercial banks and other financial institutions at the central bank fell 30.44 trillion yen on Feb. 2, the lowest in more than a year.

The central bank this year has failed to add its intended amount of money into the banking system in 25 buying operations of government securities, discount bills and commercial paper. The BOJ today tried to add cash by borrowing 400 billion yen of discount bills from lenders from Feb. 14 until June 15. It received bids for 34 percent of the amount it offered.

The No. 266 bond with a 1.4 percent coupon due in December 2014 closed at 100.39 to yield 1.355 percent, according to the Bloomberg Yen Bond Fixing Price. The level is an average rate set at 6:30 p.m. in Tokyo by Daiwa Securities SMBC Co., Nikko Citigroup Ltd., Mizuho Securities Co. and Mitsubishi Securities Co

http://www.bloomberg.com/apps/news?pid=10000101&sid=aLFTqV9eCmYo&refer=japan

[54anickel]

8. Thailand: 'Thaksinomics' Are Vindicated

http://www.prudentbear.com/internationalperspective.asp

Thaksin Shinawatra claimed victory in Thailand's national elections last Sunday, making Thai political history by becoming the first elected leader to win a second consecutive term in office.

Exit polls showed Mr Thaksin's Thai Rak Thai (Thais love Thais) party won nearly 400 of the Parliament's 500 seats an unprecedented margin in a country that spent much of the past 50 years governed by military dictators and fractious civilian coalitions. The exit poll projecting a Thai Rak Thai landslide was supported by early results, although the final tally is not expected to be known until the end of the week.

Some Thais fear that with his strong new mandate and overwhelming majority in Parliament, Mr Thaksin will exercise his power with even fewer restraints, and step up his controls on the media, creating an increasingly authoritarian climate in the country. There are also questions as to whether his economic policies can sustain the country’s current strong recovery. Of course, many of these skeptical critics were the same who predicted economic disaster 4 years ago when Thaksin’s newly formed populist party, comprised of a coalition of large domestic business interests and rural Thai voters, defeated the darling of western investors, the IMF-backed Democrats, which had presided over the country during the country’s disastrous financial crisis in 1997.

Anyone out there familiar enough with Thailand to know if these fears of an "authoritarian climate" are justified, or is this baseless propaganda? I tend to be leary of that paragraph as it has the familiar ring to what they say about Chavez. Any insight would be greatly appreciated. I really have no idea, but I tend to cheer for any developing country that says no to the IMF. :shrug:

But the Prime Minister’s most recent triumph, along with the country’s substantial economic recovery since he assumed office, surely validates the anti-IMF program he embraced during his tenure in government. If anyone needs to explain the success of “Thakinsonomics”, it is not the PM himself; the onus now falls on his many critics, whose dire predictions have thus far not come anywhere close to being fulfilled.

more...

[54anickel]

10. Greenspan Not Really Optimistic on Account Gap (Of course not!

Sheesh people - get a clue! The man jawbones to get the markets to move since they are totally ignoring his rate increases)

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_berry&sid=a9Y0rAfhiA4g

Feb. 9 (Bloomberg) -- Federal Reserve Chairman Alan Greenspan, speaking in London last week, put the best face he could on the outlook for the burgeoning U.S. current account deficit.

Currency markets, perhaps misled by the seemingly hopeful tone of Greenspan's remarks, responded by bidding up the value of the dollar. They should have listened more closely to all his carefully worded caveats and conditional phrases.

Perhaps the Fed chairman was wary about triggering another sell-off of the dollar similar to that which followed his speech last November. His statements then were interpreted by some market participants as an effort to talk down the dollar to aid in reducing the current account deficit.

Meanwhile, at a conference at the San Francisco Federal Reserve Bank the same day as his London speech, numerous economists predicted that the current account deficit is likely to worsen until foreign investors become unwilling to finance it.

For example, economists Nouriel Roubini of the Stern School of Business at New York University and Brad Setser of University College, Oxford, argued, ``The U.S. is currently financing itself by selling low-yielding dollar debt which offers foreign investors little protection against a future fall in the dollar.

more...

[RawMaterials]

13. Ebbers Pushed Others to 'Hit Numbers,' CFO Says

WorldCom accountants were pressured to make quarterly profit match Wall Street projections, Scott Sullivan testifie

NEW YORK — Former WorldCom Inc. chief Bernard J. Ebbers refused to alert Wall Street to WorldCom's deepening financial crisis, despite repeated warnings that investors were being misled, the chief witness against him testified Tuesday.

Ebbers instead made it clear that he wanted company profits to match the projections from stock analysts, former WorldCom finance chief Scott D. Sullivan testified in Ebbers' federal trial

snip..

Ebbers is charged with fraud, conspiracy and other charges stemming from the company's $11-billion accounting fraud. He faces at least 30 years in prison if convicted, a potential life sentence for the 63-year-old Ebbers. The company has since been reorganized as MCI Inc.

Ebbers' lawyers have maintained that he was not involved in complex financial matters and was unaware of fraud being carried out by underlings.

Sullivan did not testify that Ebbers specifically ordered the doctoring of the books. But he described Ebbers as fully informed about the accounting manipulation and tacitly condoning it with his "hit-the-numbers" mantra.

snip..

In response, Sullivan said, he fudged the numbers — making "adjustments" tailored to meet analyst projections — and gave them to Ebbers a few days later.

Though WorldCom had previously been "aggressive" in its accounting, Sullivan testified, the new figures bore no relation to reality. For example, a reserve account was listed as operating income, he said. Bogus expense adjustments cut reported costs by $700 million, he added.

After WorldCom released the bogus statistics in October 2000, there were rumblings about unhappy employees in the accounting department, and two employees threatened to quit, Sullivan said.


http://www.latimes.com/business/la-fi-ebbers9feb09,1,1966030.story?coll=la-headlines-business&ctrack=2&cset=true

[54anickel]

14. Citigroup Mustn't Make Scapegoats of Bond Traders

I don't agree with this guy's conclusion since it's obvious someone got hurt in these unethical if not illegal transactions, but the insight he offers between the UK and Germany is interesting.

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_gilbert&sid=avMP_jmRxZUI

snip>

The facts aren't in dispute. On Aug. 2, Citigroup sold 12.4 billion euros ($16 billion) of bonds in a few minutes. It bought back 3.77 billion euros of securities at their new, lower prices about half an hour later, for a $17.5 million profit, according to a Jan. 25 fax from the Frankfurt prosecutor's office.

What is in dispute is whether the bank and its traders did anything wrong. German authorities are investigating whether the trades count as market manipulation, which has a maximum sentence of five years. Citigroup says it didn't ``violate any applicable rules or regulations.''

Squeezed in the Middle

Citigroup is the jam in a sandwich between two regulators, each trying to be the toughest cop in town. The U.K.'s Financial Services Authority is involved because the alleged improprieties happened in London. Germany's financial-services regulator, known as BaFin, wants a piece of the action because German government bonds dominate European trading.

Neither wants to cede regulatory jurisdiction to the other and risk missing out on the chance of becoming the future pan- European market regulator called for by some European officials.

snip>

Dirty Little Secret

One reason why the regulators are keen to make an example of Citigroup is that the bank's escapade has revealed one of the dirty little secrets of the European domestic bond market. Whisper it quietly, but it isn't really very liquid. Banks participate in government bond auctions to secure a shot at winning other, more lucrative business, such as international bond underwriting, or state asset sales. The bigger banks say they end up subsidizing the smaller players.

The German bond futures contract is where the real action is, a feature the Citigroup trade was designed to exploit. The strategy involved buying futures contracts to drag cash bond prices higher, and then using a software program to dump bonds into the market.

more...

[54anickel]

15. Bush's Social Security Plan Assumes Much From Stocks (no sh*t)

http://www.washingtonpost.com/wp-dyn/articles/A9090-2005Feb8.html

To conclude that Social Security is careening toward a crisis in 2042, President Bush is relying on projections that an aging society will drag down economic growth. Yet his proposal to establish personal accounts is counting on strong investment gains in financial markets that would be coping with the same demographic head wind.

That seeming contradiction has become fodder for a heated debate among economists, who divide sharply between those who believe the stock market cannot meet the president's expectations and those who say investor demand from a faster-growing developing world will keep stock prices rising.

"If economic growth is slow enough that we've got a problem with Social Security, then we are also going to have problems with the stock market. It's as simple as that," said Douglas Fore, director of investment analytics for TIAA-CREF Investment Management Group. A spokeswoman said the company has not taken a position on the Social Security debate.

In the next two decades, as elderly populations swell throughout the developed world, retirees will begin withdrawing their savings, selling their financial holdings to raise cash and potentially glutting the world with stocks and bonds. Richard Jackson, director of the Center for Strategic and International Studies' global aging initiative, called it "the great depreciation scenario." Germany's Mannheim Research Institute for the Economics of Aging dubs it the "asset meltdown hypothesis."

more...

[RawMaterials]

16. 9:40 EST Market Update and Blather

Dow 10,739.99 +15.36 (+0.14%)
Nasdaq 2,089.25 +2.57 (+0.12%)
S&P 500 1,203.81 +1.51 (+0.13%)
10-Yr Bond 40.45 +0.08 (+0.20%)
NYSE Volume 66,395,000
Nasdaq Volume 125,047,000

9:15AM: S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: -1.5.

9:00AM: S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: -1.5. Stage remains set for a lackluster open as the futures market continues to trade close to fair value... Companies in focus following some notable ratings changes include upgrades on CSCO, AMD, EBAY and BEN while TGT, MWD, AL, BP, DUK and IP have been downgraded

8:30AM: S&P futures vs fair value: +1.0. Nasdaq futures vs fair value: -1.0. Futures trade now indicating a relatively flat to mixed open for the indices following news that Hewlett-Packard's (HPQ) CEO Carly Fiorina will step down... Shares of HPQ, which has reaffirmed its Q1 outlook and named current CFO Robert Wayman as interim CEO, have surged more than 11% in pre-market trading and somewhat helped set a more definitive tone for equities

8:00AM: S&P futures vs fair value: -0.9. Nasdaq futures vs fair value: -4.5. Futures market versus fair value suggesting a lower open for the cash market in the wake of Cisco Systems' (CSCO) disappointing report... While CSCO grew Q2 profits 94% from a year ago, earnings of $0.22 merely matched forecasts while Q3 sales guidance came in shy of estimates... AIG, however, has beaten analysts' Q4 expectations as have other insurance companies such as PRU, CI and AOC

6:22AM: S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: -7.0.

6:21AM: FTSE...4989.30...-6.20...-0.1%. DAX...4362.17...-9.22...-0.2%.

6:21AM: Nikkei...11473.35...-17.08...-0.2%. Hang Seng...13845.63...+50.63...]

[54anickel]

20. HA! HP climbs on the news Fiorina is stepping down! Bought time! Eww,

quite a few downgrades listed in that 9:00 am blather. - Cisco, aww and here yesterday the sheepcallers were saying they were expecting a bump from Cisco. :evilgrin:

[54anickel]

21. U.S. stocks open mixed; H-P spikes as Fiorina quits

http://biz.yahoo.com/cbsm-top/050209/f81fe3b29fba2ea62edafdb9c57d365b_1.html

NEW YORK (MarketWatch) - Technology set the tone for the broader market Wednesday after Carly Fiorina stepped down as Hewlett-Packard's chief executive and Cisco Systems weighed in with a revenue miss and disappointing outlook.

"While I regret the board and I have differences about how to execute HP's strategy, I respect their decision," Fiorina said in a statement.

The company's chief financial officer Robert Wayman was named interim CEO.

Meanwhile, Wall Street also was assessing Cisco Systems' fourth-quarter report in which earnings matched analysts' estimates but revenue came up shy of expectations.

The networking giant (NasdaqNM:CSCO - News) also offered up a disappointing sales growth outlook, forecasting that sales for the fiscal third quarter will be "flat to up 2 percent" compared to the second quarter, or 8 percent to 10 percent higher than last year's third quarter.

more...

Guess Carly only knew how to make money by canning people and has offered HP nothing else since landing herself that huge raise in '02 when HP was at the top of the list for most lay-offs AND highest pay raise for a CEO

Company:Hewlett-Packard
2001 Layoffs 25,700
CEO C.S. Fiorina
2001 Salary $1,242,000
2002 Salary $4,114,000
Change $2,872,000 for a 231% increase

[RawMaterials]

23. not a bad job eh

layoff 25000 figuring avg salary of 30000 or so 750,000,000 savings to the company so she take 2.8m of that. great business plan. LOL

[54anickel]

17. Dollar Watch

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=s

Last trade 85.22 Change +0.12 (+0.14%)

Settle 85.10 Settle Time 23:37

Open 85.21 Previous Close 85.10

High 85.26 Low 84.87


The March Dollar was lower overnight due to light profit taking as it consolidates below the 38% retracement level of the May-December decline crossing at 85.41. Stochastics and the RSI are overbought and are turning bearish signaling that a short-term top might be in or is near. If March extends this year's short covering rally, the reaction high crossing at 85.75 then the 50% retracement level of last year's decline crossing at 86.93 are the next upside targets. Closes below the 20-day moving average crossing at 83.71 would confirm that a short-term top has been posted. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

The March Euro was slightly higher overnight as it consolidates above the 50% retracement level of the April-December rally crossing at 127.290. Stochastics and the RSI are oversold, diverging and are turning neutral hinting that a short-term low might be in or is near. If March extends this year's decline, the 62% retracement level of the April- December rally crossing at 125.037 is the next downside target. Multiple closes above the 20-day moving average crossing at 130.016 are needed to confirm that a short-term low has been posted. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

snip>

The March Canadian Dollar was slightly higher overnight as it consolidates above the 38% retracement level of the May-November rally crossing at .7988. Stochastics and the RSI are oversold and are turning neutral to bullish hinting that a short-term low might be in or is near. If March extends January's decline, the 50% retracement level of the May-November rally crossing at .7822 is the next downside target. Closes above the 10-day moving average crossing at .8040 would signal that a short-term low has likely been posted. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

The March Japanese Yen was higher overnight due to short covering as it consolidates some of Tuesday's decline, which spiked below the 38% retracement level of last year's rally crossing at .9494 and December's low crossing at .9476. Stochastics and the RSI are bearish but becoming oversold hinting that a low might be near. Multiple closes below December's low crossing at .9476 would confirm a downside breakout of this winter's trading range while opening the door for a possible test of the 50% retracement level of last year's rally crossing at .9374. Closes above the 10-day moving average crossing at .9624 would temper the near-term bearish outlook in the market. Overnight action sets the stage for a steady to firmer tone in early-day session trading.


Dollar's rise against euro may be tough to sustain
http://www.iht.com/articles/2005/02/08/business/dollar.html

Skeptics question value of Bush budget cuts


FRANKFURT Buoyed by signals that the United States may finally be willing to stomach a serious round of fiscal belt-tightening, currency traders are giving the dollar a reprieve - for now - from the relentless downward pressure of recent months.
.
Aiding the dollar's new attractiveness is the backdrop of anemic growth in Europe and persistent deficits among members of the 12-nation euro zone, analysts and economists said.
.
"Currency traders think in relative terms, and for now the United States is making a harder effort than France or Germany on fiscal consolidation," said Stephen Jen, a currency analyst with Morgan Stanley in London.
.
snip>
.
A deep vein of skepticism persists in currency trading circles, where the conviction remains that the dollar will eventually sink this year, possibly as low as $1.40 to the euro.
.
"We've had a short-term deviation from what is a long-term trend," said Neil Mellor, a currency strategist with Bank of New York in London. "The current-account deficit is not just going to go away," he said, referring to the broadest measure of the U.S. trade deficit.

snip>

Statements such as one attributed to Vice President Dick Cheney that former President Ronald Reagan "proved that deficits don't matter" have become unthinkable, said Audrey Childe-Freeman, the chief Europe economist for CIBC World Markets in London.
.

more...


GBP Climbs on Data, USD Stalls

http://www.forexnews.com/NA/default.asp

At 10:00 AM US December Wholesale Inventories (exp 0.9%, prev 1.1%) US December Wholesale Sales exp n/f, prev 0.7%) At 11:00 AM US Fed Board Governor Gramlich Speaks At 7:15 PM NY Fed President Geither Speaks

The dollar’s latest rally stalled overnight on a combination of profit taking and traders digesting a report questioning Fed Chairman Greenspan’s optimism over the US current account deficit. The dollar relinquished some of its recent gains, retreating to 1.8642 against the sterling, and 1.2798 versus the euro.

Fed Watcher John Berry, in an editorial, said that currency markets had misinterpreted Fed Chairman Alan Greenspan’s speech last Friday on the US current account deficit. Berry said there were several reasons Greenspan had cited for why the deficit would not shrink. The main reason was the large discrepancy between imports and exports, in which exports would need to grow half as quickly as imports in order to prevent the deficit from widening. While the market sold the dollar on the report, traders will likely wait for the release of December’s trade data on Thursday prior to accelerating further moves.

Sterling Jumps on Data

UK’s trade deficit unexpectedly narrowed in December, declining to 4.43 bln sterling, and besting forecasts for an increase to 4.8 bln sterling from November’s 4.71 bln sterling. Moreover, manufacturing surged by 0.6% m/m and 1.1% y/y, considerably better than forecasts for a 0.3% monthly increase and a 0.1% annual gain. As a result, UK’s ONS said the latest data would raise Q4 GDP growth estimate by 0.1%, ceteris paribus.

snip>

USDJPY Trades Sideways

Bank of Japan board member Suda said earlier in the session the Bank may soon need to adjust policy and permit a breach of its current account deposits target. Suda said that lowering the current accounts deposits target would be construed as policy tightening, but was a possibility if seen as a technical move and the economy was strong. However, he said that lowering the c/a deposits target now would be detrimental since the economy is stalling. Moreover, Suda said that changing conditions for ending quantitative easing would hurt BoJ credibility.

more...


The Year of the Yen
http://www.forexnews.com/AI/default.asp

2004 may have been known as the year of the euro. 2005 might as well be the year of the yen, or at least the beginning of the yen’s long awaited bull run. Rationale: Japanese authorities cannot afford stacking their $700+ billion chest of US treasuries when the dollar is expected to shed more of its value after an 18% decline in trade-weighted terms over the past 3 years. A gradual Japanese retreat from US dollar securities into non-dollar assets is inevitable in order to avoid massive losses on the central bank’s US dollar portfolios.

Dollar losses are not only confined to Japan. The European Central Bank is expected to take a loss of at least $1.3 billion on its US dollar holding as a result of the euros appreciation against the US currency. The ECB had already booked a $625 million loss in 2003 due to the falling dollar. The People’s Bank of China has the second biggest armory (after Japan) of foreign exchange reserves at $600 billion in 2004. The NY Federal Reserve estimates that a 10% rise in the Chinese yuan would trigger a drop of about 3% of the nation’s overall GDP. Several central banks have started the adjustment process into euros since 2 years ago. Russia already began shifting its currency within the past two years from 12-15% holdings in euros to 25%. A move to 50%-50% dollar-euro proportion is inevitable.

Japan see no choice but to follow suit. Leading the world in holdings of US treasuries amounting to $715 billion in November, Japan loses $7.2 billion for each yen lost against the US dollar. A drop to 97 yen from 103 would inflict a $43 billion hole in Japan’s portfolio of US assets. That explains the drop in Japanese holdings of US treasuries between September and October of last year--the first month-to-month decline in three years. See chart below:



Japan should especially start lightening its hand from US assets before China initiates the fray when it eventually revalues its currency and sees less of a need to purchase US dollars in intervention over time. Despite mounting pressure from Europe and the US to revalue the yuan, China isn’t likely to succumb to these demands and compromise its economic engine for the sake of prematurely liberalizing its financial markets. We expect China to follow up on last year’s rate hike so as to contain inflation at its implicit 5% target and to avoid policy over-stimulus. Only a successfully implemented revaluation—likely in Q1 2006-- could then lead to a subsequent 2-3% upward move with a similar band, thus creating a crawling peg currency regime, i.e. periodic revaluations thereafter. This would pave the way towards an eventual basket peg, whereby the yuan is pegged against the dollar, euro, yen, Aussie and a few other Asian currencies. Such an arrangement would be most ideal for avoiding sudden fluctuations, which are more typical of single currency pegs, especially with China’s disparate trade balances against the currencies involved.

more...

[54anickel]

27. My time is short again today. Hopefully someone will post links to

today's Fed jaw-boning of Gramlich and Geither. I suspect the timing may have to do with the Treasury auctions today, but who knows these days. :shrug:

Have a great day everyone! :hi:

[54anickel]

49. UPDATE 2-Tighter budget could lead to easier Fed--Gramlich

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=7561643

BUFFALO, New York, Feb 7 (Reuters) - The Federal Reserve would likely pursue an easier-than-otherwise monetary policy to ensure the economy did not weaken if U.S. fiscal policy were tightened, a top Fed official said on Monday.

"I'm not going to stand up here and commit the Fed to following a particular course of action, but I took an oath of office that I would worry about maintaining sustainable levels of high employment," Gramlich told an audience at Canisius College.

"You can't just cut budget deficits in a vacuum," he added. "I think we would have to stimulate demand and I think central banks in other countries would have to stimulate demand, but I think we could manage it and we should manage it."

snip>

"In effect, Japan and China are printing money, buying Treasury securities and building up huge hoards -- they're over $2 trillion, which is a very large share of our debt and keeping the dollar strong and their own currency weak," Gramlich said.

"This really hasn't happened before to this degree in the history of world capital markets," he said of the large-scale foreign central bank purchases. "We don't know how long it can last or how long it will last."

"I'm not saying this is going to come to an end tomorrow, it probably won't. This is a big and durable phenomenon and it is serious," Gramlich added.

more...

[MARALE]

30. Dollar gives up some gains

http://cbs.marketwatch.com/news/story.asp?guid=%7B570BB273%2DECE6%2D439B%2DAC8C%2D7CB0807753CD%7D&siteid=google&dist=

Snow's assertion that higher taxes are not the way to cut the deficit and his commitment to permanent tax cuts appeared to undermine confidence in the administration's determination to cut the fiscal deficit, said analysts at ABN Amro in a research note.

Currency market concern focuses on the view that permanent tax cuts beyond 2010 will cause the deficit to widen once more, they said.

...

Guidance from companies discussing the amount of foreign earnings they will repatriate under a one-time corporate tax break continues to trickle in.

Based on announcements so far, possible repatriation now totals $77 billion, which is about 37 percent of the $300 billion J.P. Morgan estimated could be brought back to the United States this year.

[54anickel]

18. Most Treasuries down but 3-year deemed a success

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=7571811

NEW YORK, Feb 8 (Reuters) - U.S. Treasury debt prices edged lower on Tuesday in an erratic day of trading that saw giant swings in long-term yields.

A successful auction of three-year notes surprised those traders who had feared only scant demand for the issue.

The auction results in turn fueled an unwinding of recent bets on a flatter yield curve, which earlier had seen 30-year yields hit their lowest level since mid-2003.

Solid demand from the sale of $22 billion in three-year notes also raised hopes that the market would manage to swallow the rest of this week's $51 billion refunding without major hiccups.

snip>

Indirect bidders, including customers of primary dealers and foreign central banks, picked up $9.61 billion, or 44 percent, of the issue.

While down from November's 53 percent share, the indirect bid beat the overall average of 37 percent and came as a relief to traders who had worried foreign demand might falter.

more...


Short-term US Treasuries pare losses on auction
http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=7571433

NEW YORK, Feb 8 (Reuters) - Short-term Treasury debt prices pared early losses on Tuesday as an auction of new U.S. government debt attracted reasonable demand, dealers said, perhaps boding well for the rest of the week's $51 billion refunding.
The sale of $22 billion in three-year Treasury notes went at a high yield of 3.47 percent. It drew bids for 2.01 times the amount on offer, down on November's 2.24 ratio, but in line with the 2.00 average of previous sales.

Indirect bidders, including customers of primary dealers and foreign central banks, picked up $9.61 billion, or 44 percent, of the issue. That was down from November's 53-percent share, but above the overall average of 37 percent and a bit of a relief to traders amid worries that foreign demand could fall sharply.

Primary dealers took $12.14 billion of the sale.


US Treasury prices slightly lower in Asia
http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=7574803

0445 GMT - U.S. Treasury prices were slightly lower in Asia on Wednesday as some investors unwound positions after buying in longer-dated bonds during the past few sessions flattened the yield curve. - Investors have been favouring longer-dated debt on expectations that ongoing rises in U.S. interest rates would close the gap between short- and long-term yields. - But dealers in Tokyo said that volume was extremely light as the market awaited auctions of five-year notes later on Wednesday and 10-year paper on Thursday. - Some in the market were concerned that Asian investors could stay away from the auctions due to the Lunar New Year holiday, while others said that decent foreign demand at a three-year offer on Tuesday was a sign that Asians would likely be in the market. - Benchmark 10-year Treasury notes (US10YT=RR: Quote, Profile, Research) yielding 4.031 percent, compared with 4.019 percent in late New York. - Yield on 30-year bonds (US30YT=RR: Quote, Profile, Research) at 4.388 percent after dropping in New York to 4.35 percent, their lowest since mid-2003.

edit to add link to last article - DOH!

[54anickel]

19. THE GOLDEN RACE CAR STRUGGLES (Willie)

http://www.gold-eagle.com/editorials_05/willie020705.html

Bear with me in a comparison of gold and a detailed analogy. The gold price moves like the speedometer of a powerful highly turbocharged race car. Imagine a Ferrari GTO (shown below), Porsche Carrera, or Corvette StingRay. Lost confidence in central banker currency management, the USDollar decline, and rising metal prices influence the race car positively. Conversely, numerous deflationary forces influence the race car speed negatively. Several futile destinations for new money (mostly debt) inhibit the grand initiative to generate price inflation. However, authorities have succeeded primarily in generating cost inflation without much pricing power, without much wage growth. China blocks typical reflation initiatives. China blocks the typical "cost push" seen in previous business cycles.

The Federal Reserve governors regard inflation as a rescue device. Congress believes that stimulus can revive a sluggish economy, restore sector profitability, and revive voter purchase power. Bank centers in Wall Street drool over the notion of cheap money, which they quickly put to work in leveraged machinery to produce wealth. Gold bugs in bear camps often employ knee-jerk thinking that equates radical increases to the money supply and debauched currencies as systemically inflationary, and therefore great for gold. Greenspan has undergone a mysterious transformation from adept financial guide, to technology & stock cheer leader, to serial bubble engineer, to investment community icon, to mad chemlab professor, to financial pathology apologist, to inflation hall monitor, to finger pointer at the USGovt culpability (i.e. scapegoat). While the nation urges on the very inflation which historically has destroyed economies, we fight the market forces for retracement of the bubbles themselves.

Unfortunately, all above groups have been treated to an education, but not a shock. The key is to follow the destination of the inflated money supply. Does new capital go to the furnace to heat up the living room (to produce vigorous activity), or onto the roof to weigh things down (to contribute to collapse)? The Fed has inflated the usual suspects, not the real economy. It has in fact severely damaged the real economy. Ultimately, the health and viability of a nation depends on the strength of its real economy, and in the USA the economic landscape is under siege of severe scorching. To date, the great majority of new money has gone toward unproductive purposes. New federal debt and new household debt add to the total debt burden. The USGovt proposed budget calls for cuts in 150 programs, not without a deficit over $400 billion. Consumer debt has grown over 24% since year 2000, sure to cause some slowdown in the face of tyrannical credit card rate impositions. Housing has enjoyed another boom, with over a 42% rise in federal pooled mortgages since 2000. Without yet another home mortgage refinance REFI round (not likely), households might find less money to spend. The flattening Treasury yield curve throws cold water on speculators, whose carry trade gamers may soon look elsewhere for easy money. Central bank intervention may cap our long-term interest rates for now, but the upcoming launch of an Asian credit market could result in sales rather than purchases in coming months or years. Commodity investments are another destination of new money in speculation. The result has been rising material and energy costs, hardly a help to profit margins and wages.

Asian imports are the tidal wave monetary/ economic "boomerang" in the strange global process. The Chinese have whipped up a giant tsunami of their own in finished product export to the USA shores. We in the US Economy extend credit and issue new debt (credit card, vendor finance, home equity) and purchase Asian imports. Money exits the country and goes to Asia, where it is used to build factories. Their factory output shows up as imported products sold in Wal-Mart and several other "BigBox" retailers like Circuit City (electronics) or Staples (office supplies) or Home Depot (home supplies). So our directed current of trade deficit money flow to Asia returns as a flood of cheap imported products. One can conclude that our new money (monetary expansion) is being devoted to numerous destinations which are NOT assisting price inflation. New money is weighing down the roof, sadly, not heating up the living room. That might explain why real economic prices outside services and energy are tame, why wage growth stinks on ice, and why large site layoffs are still hovering near 100 thousand on a monthly basis. Oh yes, it might also explain why gold is struggling mightily. The golden race car is being inhibited.

more...

[54anickel]

22. Ozy, did you catch this one over in LBN? Regarding the 1992 "crash"

of the British sterling?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1223653

Heh, possibly a peak into the US$ present and future? Never know what's going on behind that curtain.

edit to add:

I went to dig this one up one more time, as I remember it touched on the exchange Rate Mechanism (ERM) crisis of 1992, and how it might relate to what's going on now with Asia.

http://www.atimes.com/atimes/China/FK06Ad01.html

snip>

The British example
But even G7 members were not immune to financial crisis. The exchange Rate Mechanism (ERM) crisis of 1992-93 exploded, involving a mismatch between the German mark and the British pound. The ERM was a fixed-exchange-rate regime established in March 1979 as part of the European Monetary System (EMS) to reduce exchange-rate variability and achieve monetary stability in Europe through an economic and monetary union in preparation for the introduction of a single currency, the euro, which was scheduled to be introduced two decades later on January 1, 1999 at $1.15 per euro. After falling below $0.85 in late 2000, and again below $0.84 in July 2001, the two currencies reached parity on July 15, 2002, but the euro fell again below $0.85 in late 2002. During the fourth quarter of 2003, the euro strongly appreciated against other major currencies, 10% against the dollar, 3% against the yen and 1% against the pound sterling. The nominal effective exchange rate of the euro against the currencies of 12 industrialized countries appreciated by about 4% during the same fourth quarter, leaving it at 9% above its inception level. Over the same fourth quarter, while the dollar depreciated by 6%, the yen and the pound sterling both appreciated by about 2% in effective terms.

snip>

The purpose of the ERM was to stabilize exchange rates, control inflation (through the link with the strong and stable deutschmark) and nurture intra-Europe trade. It was also designed to enhance European world trade in competition with the US, creating a so-called "United States of Europe" and as a stepping stone to a single-currency regime. To a similar extent, Asia can also benefit from a unified currency and free its thriving economies from the penalties of dollar hegemony.

Britain joined the ERM in October 1990 at a fixed parity of 2.95 deutschmark to the pound, an over-valued rate intended to put pressure on the British economy to reduce inflation rather than institutionalizing international trade competitiveness. This same rationale lies now behind the call for China to revalue the yuan. Unfortunately for the British people, the UK Treasury lost some 8.2 billion pound sterling defending the unsustainable exchange rate. This chosen rate, or any fixed rate required by ERM membership, proved misguided because it tried to benefit from the effect of a single currency for separate economies without the reality of a single currency within an integrated economy.

Withdrawing from the ERM released the UK economy from persistent deflation and provided the foundation for the non-inflationary growth subsequently experienced. It enabled monetary policy to be freed from the sole obsession of maintaining an inoperative exchange rate, thus contributing to economic expansion by a combination of rational monetary measures to respond specifically to British needs. While ERM countries were compelled to maintain relatively high real interest rates to prevent their currencies from falling outside the permitted bands, Britain enjoyed the freedom to benefit from lower rates to stimulate a stalling economy.


snip>

Britain's disastrous experience with the Exchange Rate Mechanism (ERM) should be a sobering lesson for China. Since, under ERM, Britain's interest rate was pegged to that of Germany through the fixed exchange rate with a freely convertible pound sterling, reduction in interest rates was not available to deal with increasing unemployment and declining growth in the UK. The fact that Britain lost independent control over pound sterling interest rates, coupled with the questionable independence of the Bundesbank from German national political pressure, was an important factor in Britain's final decision to withdraw the pound sterling from the ERM fixed-exchange-rate regime. Making the yuan freely convertible would be similarly suicidal for China under current circumstances.

The reunification of Germany cracked open the structural flaw in the ERM because massive capital injection from West to East Germany had produced inflationary pressure in the newly unified German economy, leading to preemptive increases of interest rates by the Bundesbank, the German central bank. At the same time, other economies in Europe, especially that of Britain, were in recession and not prepared for interest rate hikes dictated by the German central bank. This interest rate disparity magnified the overvaluation of the pound sterling in the early 1990s. Nominal interest rate disparity between a higher yuan rate and a lower dollar rate has magnified the inflow of hot money into China, even with capital controls and limited currency convertibility. Yet, both real yuan and dollar interest rates are negative in that they are below their respective inflation rates, while both economies still face persistent unemployment problems. For China to raise yuan interest rates under these conditions is to push its lopsided economy into a tailspin.

In 1992, the ERM was torn apart when a number of currencies could not keep within these limits without collapsing their economies. On Black Wednesday, September 16, a culmination of factors allowed George Soros, hedge-fund titan, to break the Bank of England, pocketing $1 billion of profit in one day and more than $2 billion eventually. The British pound was forced to leave the ERM after the Bank of England spent $40 billion in an unsuccessful effort to defend the currency's fixed value against speculative attacks. The money went directly into the pocket of speculative hedge funds rather than helping the pound sterling. The Italian lira also left the ERM and the Spanish peseta was devalued.

more...

[54anickel]

25. Couple of older articles on the deficit - worth looking at now that the

little idiot has released his budget proposal.

http://www.sptimes.com/2005/01/10/Opinion/Deficit_deception.shtml
Deficit deception
The president just got closer to fulfilling his campaign promiseto halve the national deficit - with a simple stroke of his pen.
A Times Editorial
Published January 10, 2005

If President Bush needs a name for his deficit-reduction plan, he might consider this: Deficit Deceit. That, at least, would be an honest description of a plan based on made-up numbers, wishful thinking and purposeful obfuscation.

During his re-election campaign, Bush promised to halve the budget deficit in the next five years. Even with an honest effort, that would be a formidable task considering the budgetary hole in which the nation finds itself. As it turns out, the administration isn't going to give it an honest effort.

Instead of using last year's actual $413-billion deficit to measure success, Bush is reportedly going to substitute an inflated projection of $521-billion. So with the stroke of a pen, the goal just got magically closer. Half of the larger amount will be a lot easier to reach, never mind that it is a phony number.

Real progress still will be difficult, given the administration's spending ambitions and intention to make existing tax cuts permanent, not to mention a likely repeal of the alternative minimum tax. So the plan conveniently assumes a highly optimistic (some say unrealistic) doubling of new tax revenues in the coming year, even though the administration's own projections for economic growth are flat.

more...


http://news.bostonherald.com/politics/view.bg?articleid=63354
Critics call Bush's deficit efforts feeble
By Associated Press
Thursday, January 13, 2005

WASHINGTON -- One guiding star in the $2.5 trillion budget that President Bush ships Congress next month will be his goal of cutting the federal deficit in half by 2009.

The White House first proclaimed that objective during the summer of 2003, when it was envisioning annual deficits exceeding $450 billion for the immediate future. The 2004 federal budget shortfall came in at a record - but less than expected - $412 billion.

The White House touts the goal as part of its commitment to get the budget under control, while critics mock it as a feeble feint at fiscal prudence. Following is a look at how the effort is going.

snip>

Q: Will Bush meet his goal?

A: Many people think he will - but disagree on how he will do it and how meaningful it will be.

Administration officials say their prescription of tax cuts - for generating economic growth - and spending controls should do the trick. Critics say Bush may reach his goal, but only by ignoring the costs of items like revamping Social Security and the Iraq war.

The last time the administration projected future deficits was in July. It estimated that if all of Bush's tax and spending proposals were enacted, the shortfall would drop to $261 billion in 2006 - virtually hitting its 2009 target.

Bush plans to submit his budget for 2006 on Feb. 7, but no one expects him to declare victory three years early. In part, that's because he will soon ask for at least an additional $70 billion for wars in Iraq and Afghanistan, which will push him further from his goal.

His budget is also expected to exclude the costs of his still evolving plan to overhaul Social Security, as well as other expenses he supports, such as keeping the alternative minimum tax from affecting more middle-income families.

more...

[MARALE]

26. Stocks Drop on Cisco's Outlook; HP Climbs

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7581567

Cisco, the largest maker of communications gear that directs traffic over the Internet on Tuesday, said quarterly earnings rose, but its stock was down 1.6 percent to $17.95 amid concerns about weak revenue and rising inventory.

"We are at the end of the earnings reporting season and there is little left to propel the market higher," said Paul Cherney, chief market analyst at Standard & Poor's. "The news about Carly's ouster had a knee-jerk reaction on the market, as investors viewed this change as positive. But Cisco is a prime example of what the market had to grapple with. Even though reports for the reporting period have been decent ... the guidance has not been an inspiration for the market to throw big money on the market on the long side."

In other earnings news, American International Group Inc. (AIG.N: Quote, Profile, Research) climbed 1.6 percent to $68.83 after the world's largest insurer by market value reported better-than-expected earnings.

Oil prices were lower on expectations that data due at 10:30 a.m. (1530 GMT) would show rising inventories of crude and gasoline ahead of a seasonal drop in demand in the second quarter.

It doesn't look like the lower price of oil is helping a lot today, does it?

[MARALE]

28. Dec. Inventories Up Less Than Forecast

Inventories at U.S. wholesalers rose a smaller-than-expected 0.4 percent in December as sales of durable goods like cars and furniture accelerated, the Commerce Department said on Wednesday.

Wall Street economists had expected wholesale inventories to rise 0.9 percent in December. November's inventory gain was revised slightly higher to a 1.2 percent advance, from a first-reported 1.1 percent increase.

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7581412

[RawMaterials]

29. 11:30 Market Update and blather

Dow 10,682.66 -41.97 (-0.39%)
Nasdaq 2,066.81 -19.87 (-0.95%)
S&P 500 1,195.98 -6.32 (-0.53%)
10-Yr Bond 40.13 -0.24 (-0.59%)
NYSE Volume 577,308,000
Nasdaq Volume 808,133,000

11:30AM: Little change since the last update as the major averages continue to vacillate in roughly the same ranges... Meanwhile, Dec.wholesale inventories checked in earlier, rising just 0.4% compared to forecasts of 0.9% and the 1.1% average over the prior six months... Sales rose a strong 0.9% to leave a dip in the inventory to sales ratio to 1.14 months in Dec from the 1.15 average held since June and the record low of 1.12 in April, which argues for continued gains in inventory rebuilding and a resulting boost to production in 2005... NYSE Adv/Dec 1045/1978, Nasdaq Adv/Dec 818/2021

11:00AM: Indices continue to languish near their lows as oil prices continue to climb following the Energy Dept.'s weekly oil data... Crude oil futures ($46.15/bbl +$0.75), which were off roughly 0.5% ahead of the report, have rebounded (+1.7%) after crude oil inventories fell 1.0 mln barrels, versus analysts' forecasts of a 500K barrel increase, distillate stockpiles fell 3.0 mln barrels, more than the anticipated 2.0 mln barrel decline, and gasoline inventories rose just 500K barrels, less than an expected increase of 1.0 mln barrels...

The surge in oil prices has, however, led to a recovery in the energy sector (+0.3%)...NYSE Adv/Dec 975/1981, Nasdaq Adv/Dec 817/1936

10:30AM: Market slides to its lows of the morning as program trading takes the majority of most industry groups lower... Consolidation in semiconductor and networking, following yesterday's solid performance, has offset modest gains in hardware following the resignation of HPQ's CEO... Software has extended Tuesday's losses while airline, biotech, energy, homebuilding and materials have all lost roughly 1.0%..

[MARALE]

32. Medicare Drug Cost Rises to $720 Bln for 10 Years, U.S. Says

http://www.bloomberg.com/apps/news?pid=10000103&sid=ah8jGwrLKDnw&refer=us


When the legislation passed, the nonpartisan Congressional Budget Office estimated the total cost, including the prescription- drug benefits and other spending, at $395 billion. At the time, Democrats and some Republicans said that figure was too low.

``Those of us who told you it was going to cost twice as much were right,'' Representative Rahm Emanuel, a Democrat from Illinois, told Treasury Secretary John Snow yesterday during a House Ways and Means Committee hearing on Bush's $2.57 trillion budget proposal for the fiscal year that begins Oct. 1.

``You submitted a budget with a prescription-drug benefit plan that over five years cost what you said it was going to cost in 10 years,'' Emanuel said. ``And you have yet to correct it, and you've put a greater weight on Medicare because of foolish politics.''

OUCH!! The truth hurts, Snowjob knew this and went ahead and lied.

[RawMaterials]

34. 1:15 numbers and blather

Dow 10,692.63 -32.00 (-0.30%)
Nasdaq 2,068.50 -18.18 (-0.87%)
S&P 500 1,197.00 -5.30 (-0.44%)
10-Yr Bond 40.13 -0.24 (-0.59%)
NYSE Volume 839,814,000
Nasdaq Volume 1,126,344,000




1:00PM: No real change in sentiment as the indices continue to chalk up losses and a firmly bearish bias remains intact... Decliners on both the NYSE and the Nasdaq still hold a roughly 2 to 1 margin over advancers... The ratio of up to down volume also reflects a similarly negative sentiment at both the Big Board and the Composite, where down volumes convincingly outpace up volumes...

Meanwhile, volumes on the Nasdaq have recently surpassed 1.0 bln shares as the index has stabilized near support at 2067/2064 but remain firmly lower, as traders don't believe the negative bias can be neutralized until gains back above 2070 to 2075 can be achieved... Both the Dow and S&P also remain relatively stable near support levels of 10690 and 1195, respectively...NYSE Adv/Dec 1141/2016, Nasdaq Adv/Dec 926/2037

12:30PM: More of the same as stocks continue to trade in a narrow range near intra-day lows... Bucking the bearish trend, however, have been insurance companies... Multi-line insurance (+1.8%) has surged after American International Group (AIG 69.19 +1.46) reported Q4 (Dec) earnings of $1.17, which beat analysts' forecasts by $0.04, on 16.1% growth in revenues to $25.76 bln...

Insurance brokers (+2.6%) have also climbed in the wake of Aon Corp's (AOC 24.38 +1.83) better than expected Q4 report, which has also helped lift competitors MMC (+1.2%) and WSH (+0.8%), while life insurance stocks have gotten a boost following strong Q4 earnings and in line FY05 guidance from Prudential (PRU 56.90 +1.15)...NYSE Adv/Dec 1113/2012, Nasdaq Adv/Dec 891/2041

12:00PM: Market remains under pressure midday, despite an encouraging management change at HPQ, as the reality of decelerating earnings growth returns to sideline buyers...

[RawMaterials]

35. Warren Buffett and Bill Gates do not a mania make

Now that the reality of the falling dollar has finally registered with the average American, and has been covered broadly by the media and has even been the subject of parody on Saturday Night Live, some individuals are raising the concept of a “inverse dollar bubble” in hopes of persuading investors to return to U.S assets. However, any attempt to equate the irrational stock market mania of the late 90’s, with a supposedly “irrational” fall in the dollar over the last three years, should be seen as empty rhetoric that merely reflects fantasy and ignorance, not reality and insight.

The fact that Warren Buffett and Bill Gates, two of the world’s wealthiest individuals, have signaled their agreement with former Fed Chairman Paul Volker’s warnings of a dollar collapse by protecting their wealth through diversifying out of dollars, does not constitute a bubble in non-dollar assets.

While it is true that the dollar’s decline has been a mainstay in the financial headlines recently, to expect otherwise, given the importance that such movements have on the global economy, would be absurd. However, most of that coverage has been focused on the supposed benefits to American exporters and corporate profits, with relatively little attention given to it being symptomatic of a fundamental problem with the American economy, or portending any looming economic crisis.

snip..

The fact is that despite all the talk of dollar weakness, there has been very little action on the part of dollar holders to do anything about it. I cannot speak for anyone else, but I have yet to go to a cocktail party where non-dollar strategies were being discussed. I have yet to over hear any such conversations at restaurants or while waiting in lines. I have yet to hear one cab driver comment on the profits he made in European bonds, or a single men’s room attendant give me a tip on a hot resource play in New Zealand.

In order for a mania to exist in an asset class, it is necessary for there to be wide-spread ownership in the asset, and a general belief among those buying it that its price can only go higher. For there to be a mania in non-dollars, the average American would have had to have already sold his dollars. How many people do you know who have bank accounts in foreign currencies?
snip...

Warren Buffett is one of the few prominent investors to have correctly identified the NASDAQ mania of the 1990’s as a bubble while still in formation, and to have had the discipline not to participate. Does it make sense that someone with enough investment savvy to have avoided that bubble, to now be foolish enough to participate in an alleged bubble in non–dollar assets? In fact, the same wisdom that guided Buffett to avoid tech stocks then, is the same wisdom that has him avoiding dollars now.

In addition, during the tech bubble of the 1990’s the NASDAQ increased twenty fold, to an absurd level never before reached in history. By contrast, the U.S. dollar Index is still higher than it was 15 years ago. In fact, all the dollar has done over the past three years is surrender the unwarranted gains it achieved during the tech bubble, when the world sought dollars to participle in the quick profits promised by the “new economy.”

snip..



Some dollar bulls have also tried to discredit the views of dollar bears by comparing them to broken clocks. The argument goes that since these “perma-bears” have been bearish for so long, that anything they say on the subject should be discounted. Timing is always the hardest part when it comes to forecasting. It is always difficult to judge just how many straws can be piled on a camel’s back. It is easy to underestimate the strength of the camel, or over estimate the weight of the straws. In the case of the dollar, many of us underestimated the willingness of foreigners to fund U.S. consumption, their willingness to exchange goods for paper, or the resolve of foreign central banks to support the status quo, and overestimated the intelligence of investors. Of course, few of us predicted the “New Economy Bubble” of the 1990’s that would create temporary support for the dollar, or the “housing bubble” in the wake of the shallowest “recession” on record, that would extend America’s “wealth” induced consumption binge beyond the bursting of that bubble.


In conclusion, the problems for the U.S. economy and the dollar have been a long time in the making, and the fact that a few of us were able to correctly diagnose the disease before its symptoms become more apparent to a small group of astute, high profile investors, should not be used to discredit our conclusions, especially as it appears the chickens are finally coming home for a long over do roost



http://64.29.208.119/archive_comm_article.asp?category=Guest+Commentary&content_idx=40338

[MARALE]

36. UPDATE 1-SEC says Nasdaq failed to report suspicious trading

WASHINGTON, Feb 9 (Reuters) - The U.S. Securities and Exchange Commission said on Wednesday its probe into Nasdaq found that employees saw suspicious trading by MarketXT, an electronic communications network, in 2002 but failed to tell NASD's regulatory arm.

The SEC said Nasdaq Stock Market Inc. (NDAQ.OB: Quote, Profile, Research) and parent NASD have taken remedial steps to strengthen their roles in self-regulatory oversight of the market.

Nasdaq and NASD consented to the report but did not admit or deny the findings, the SEC said.

The SEC charged MarketXT and its chief technology officer, Irfan Amanat, with securities fraud for executing wash trades and matched orders to get market-data rebates from Nasdaq. The SEC also charged the firm with operating without adequate net capital.

http://www.reuters.com/financeNewsArticle.jhtml?type=governmentFilingsNews&storyID=7582657§ion=investing

[RawMaterials]

37. Fed's Guynn in WSJ says language change may be soon

NEW YORK, Feb 9 (Reuters) - Federal Reserve Bank of Atlanta President Jack Guynn said the central bank still has "got a ways to go" on raising interest rates, according to quotes in The Wall Street Journal on Wednesday but may need to change some of the language in its policy statement.

Guynn also is quoted as saying the Fed may have to change the language of its policy statement "not too far down the road," and says the language change could include dropping the words "measured" and "accommodative."

The language change may come sooner or later, "and maybe sooner," Guynn is quoted as saying.





http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=7580652

[RawMaterials]

38. Insider Buying Falls to 12-Year Low

In January, insiders bought a mere $34.1 million of their own companies' stock, little more than a third of the $95 million for December, according to MarketWatch, which cited data from Thomson Financial.

The January number was the lowest since July 1993, when insiders bought just $26.3 million, according to MarketWatch. That month, however, insider purchases still accounted for roughly 5.5 percent of all dollars spent on insider-trading activity; in January 2005, purchases accounted for a mere 1.8 percent of the total dollars spent by insiders.

snip..

Insider behavior is watched very closely because this group is generally considered the most knowledgeable about a company's prospects. Insiders may sell for a number of reasons — to pay taxes, to diversify their portfolio, to make a large personal expenditure — but they buy for only one reason — they think their company's stock is cheap.







http://www.cfo.com/article.cfm/3643693/c_3643739?f=home_todayinfinance

[RawMaterials]

39. Fitch warns of US rates jump threat

A sharp fall in the US dollar is the biggest threat to emerging market debt prices, says Fitch, the credit ratings agency.

In a report published this week, Fitch said a sudden decline in the dollar could spark an unexpectedly sharp rise in US interest rates, which would prompt investors to demand higher returns on risky debt.

This, the agency said, could fuel turbulence in emerging market bond prices, which last year rallied strongly. Emerging markets have not had to contend with a sharp rise in US rates since 1994, when yield spreads over US Treasury bonds widened dramatically.

more..
http://news.ft.com/cms/s/d505ea94-7a0a-11d9-ba2a-00000e2511c8.html

[RawMaterials]

40. Retirement Turns Into a Rest Stop as Benefits Dwindle

LITTLETON, Colo. - For John A. Lemoine, retirement has been hard work. Forced to take an early pension package at AT&T three years ago, Mr. Lemoine, 54, a former building manager who once made more than $70,000 a year handling the operations of several AT&T sites, soon found that retirement was something he just could not afford.

To supplement the greatly reduced pension he received upon his retirement, he first took an $11-an-hour job as a maintenance worker at the Sam's Club up the road from his home here. He retrained as an X-ray technician, and began earning $17.50 an hour as a part-time radiology technician for several clinics. Still unable to make ends meet, he also took a full-time job as a security guard for an hourly wage of $10.50.

"I put in for other jobs, too," Mr. Lemoine said. "You'd be surprised who won't hire you because of your age."

Employers had better get used to seeing older people's résumés.

snip..

Some have pointed out that continuing to raise the official retirement age in step with increases in Americans' average longevity could probably guarantee Social Security's solvency forever.

"Policies promoting longer working life could ameliorate some of the potential demographic stresses," Alan Greenspan, the Federal Reserve chairman, told a conference of economists and policy makers in Jackson Hole, Wyo., last year. "Early initiatives to address the economic effects of baby-boom retirements could smooth the transition to a new balance between workers and retirees."

more...



http://www.nytimes.com/2005/02/09/business/09retire.html?

[loudsue]

43. Oh, that's great! Let's just make everybody work 'til they die!

"Some have pointed out that continuing to raise the official retirement age in step with increases in Americans' average longevity could probably guarantee Social Security's solvency forever."

That should fix social security for once and for all!! Don't these neocons just come up with the sweetest solutions for all of us worker bees??

Sheesh!! :crazy:

:kick::kick::kick:

[RawMaterials]

45. well for it to work, and not be that

bad of a solution companies would have to change the way they look at older workers, they would to create more "consulting jobs" were you could retire and then consult on a part time biases. I personally wouldn't mind doing this but it would have to be on my own terms, they would have to be really flexible and the likelihood of that happening is low.

[RawMaterials]

41. The End of The Oil Standard

Few commentators have recognized the significance of OPEC's January 30 decision to temporarily suspend their price band mechanism. If the suspension is indeed temporary, it may not be that important. If it isn't, there are some interesting parallels to the suspension of the U.S. gold standard in 1968 to 1971.

The gold standard was maintained by fixing the dollar price of gold and by federal stockpiling of gold. This was the means by which most currencies had maintained their value since ancient times. By the late nineteenth century, the growth in international trade had made the system difficult to maintain, but it continued for lack of an alternative.

The Bretton Woods agreements at the end of the Second World War reduced the importance of precious metals in the international financial system and the United States government suspended purchases of newly-mined gold in 1968. The United States gold market was fully deregulated in 1971.

Oil was sold at fixed prices under long-term contracts until the nationalizations of the mid-seventies, when oil traders began to play an important role. Oil prices became more transparent in 1983 when crude oil futures began to be traded on the New York Mercantile Exchange. From 1979 to 1985, OPEC tried to defend too high a price target and lost market share.

According to Pennwell's Energy Statistics Sourcebook, OPEC production declined from 30.67 million barrels per day in 1979 to 16.02 million barrels per day in 1985. The same source list OPEC's maximum sustainable production capacity as 34.4 million barrels per day in 1985. By the end of 1985, OPEC had 18 million barrels per day of shut-in oil production capacity. It became clear that there had to be a price ceiling as well as a floor. This was the price band.

Viewed from a different angle, an oil price ceiling is a dollar floor. Oil is traded in greater dollar volumes than any other commodity so the oil standard had more liquidity than gold ever did. The value of OPEC's oil production is more than a billion dollars per day. The oil equivalent of Fort Knox was not the Strategic Petroleum Reserve; it was the combined oil reserves of OPEC, three orders of magnitude greater and much larger in value than all the gold mined since the dawn of history. According to the December 20, 2004 issue of the Oil and Gas Journal, the oil reserves of OPEC at yearend 2004 are estimated to be 885 billion barrels.

According to the United States Geological Survey, the total gold ever mined in the world is about 3.4 billion troy ounces. At $42 per barrel for oil and $420 per troy ounce for gold, the value of Opec's reserves is 26 times the value of all gold ever mined. The United States Strategic Petroleum Reserve contained about 680 million barrels as of February 7, so it's role is an emergency supply in case of an oil market disruption; it is too small to have any long-term influence on oil markets.

Was the oil standard an accident or was it a deliberate product of U.S. policy? Motives are difficult to determine and the U.S. Treasury has not claimed to tie the dollar to oil prices. The ultimate effect of the end of the oil standard is difficult to predict, but one should not understate its importance.

http://www.energybulletin.net/4281.html?PHPSESSID=fb3e887fdb55fa902ad64e2b3503c6da

[RawMaterials]

42. 2:30 Market Update and Blather

Dow 10,680.74 -43.89 (-0.41%)
Nasdaq 2,060.85 -25.83 (-1.24%)
S&P 500 1,194.18 -8.12 (-0.68%)
10-Yr Bond 39.86 -0.51 (-1.26%)
NYSE Volume 1,070,212,000
Nasdaq Volume 1,413,267,000

2:30PM: A renewed wave of selling pushes the indices to their worst levels of the session... Contributing to the weakness in equities has been another S&P futures related sell off while some reports also suggest increased buying in short-term maturity treasuries following the $15 bln auction of 5-year notes that has helped push yields on the 10-year note below 4.00%, levels not seen in about four months...

Meanwhile, the dollar has pulled back from three-month highs against the euro (1.2806) and a one-month high against the yen (105.68) as investors book profits earned amid improved optimism that U.S. deficits will be reduced...NYSE Adv/Dec 1193/2066, Nasdaq Adv/Dec 903/2144

2:00PM: Stocks show little vigor, having moved little in the past hour but the bulk of sector leadership remains negative... Semiconductor (-1.7%), which surged 2.2% yesterday amid optimism that chip companies are reducing excess inventories, remains an influential leader to the downside as reports suggest contrarians are trimming positions... Notable movers lower include TER (-2.5%), NVLS (-1.9%) AMAT (-1.3%), NSM (-1.3%) and TXN (-1.0%) while INTC (-0.3%) has only shown modest weakness...

Advanced Micro Devices (AMD 18.31 +0.67), however, has found aggressive buying support (+3.8%) after Morgan Stanley upgraded AMD to Overweight based on expectations the chipmaker will cut or reduce its exposure to its low-margin flash memory business...NYSE Adv/Dec 1227/2006, Nasdaq Adv/Dec 965/2048

1:30PM: Equities remain on the defensive as sellers remain an active bunch... Treasuries, however, have recently caught a bid and lifted to their best levels of the session following the second bond auction in as many days...

[RawMaterials]

46. 3:30 Market Update and Blather

Dow 10,674.16 -50.47 (-0.47%)
Nasdaq 2,055.07 -31.61 (-1.51%)
S&P 500 1,193.15 -9.15 (-0.76%)
10-Yr Bond 39.77 -0.60 (-1.49%)
NYSE Volume 1,362,176,000
Nasdaq Volume 1,774,973,000


3:30PM: Major indices still near their lows heading into the close as broad-based selling continues to weigh heavily on the proceedings... With regards to tomorrow, Dell (DELL 41.26 +0.24) will headline a shrinking list of S&P constituents (10 total) reporting results, with Q4 earnings expected to check in at $0.36 after the close... Other notable quarterly reports will come from AET, MAY, ODP, WMI, ERICY and XMSR (before the bell) as well as ADI, DTE, WPI and PIXR (after the bell)...

At 8:30 ET, the Commerce Dept. will release its Dec Trade Balance (consensus $57.0 bln) report alongside the Labor Dept's weekly claims (consensus 325K), which have checked in below 324K for three straight weeks... At 14:00 ET, the Treasury Dept. will release its Jan Federal Budget (consensus $8.6 bln)...NYSE Adv/Dec 1227/2076, Nasdaq Adv/Dec 877/2233

3:00PM: Not much conviction on the part of buyers as selling remains widespread across virtually every sector... On the Dow, Alcoa (AA 29.36 -0.64) has fallen 2% after it protested Norwegian conglomerate Orkla's takeover bid for metals co-venture Elkem while IBM (92.58 -1.55) has fallen amid renewed concerns of increased competition from an improving Hewlett-Packard (HPQ 21.50 +1.36)... HPQ's CEO has stepped down, igniting chatter as to how the struggling hardware developer plans to become a more streamlined leader...

AIG (68.90 +1.17) remains the second largest gainer (behind HPQ), due to strong Q4 earnings, while BA, AXP, DD HON and KO have been the only other components to trade higher... Not even Exxon Mobil (XOM 55.65 -0.13), despite a modest rebound in energy, has been able to extend yesterday's all-time high...

[RawMaterials]

47. Closing Numbers and Blather

Dow 10,664.11 -60.52 (-0.56%)
Nasdaq 2,052.55 -34.13 (-1.64%)
S&P 500 1,191.99 -10.31 (-0.86%)
10-Yr Bond 39.77 -0.60 (-1.49%)
NYSE Volume 1,509,432,000
Nasdaq Volume 1,938,629,000

Close: Renewed concerns of slowing earnings growth coupled with profit taking and a decisively bearish bias proved too potent for buyers to make much of HPQ's positive management change... While the abrupt resignation of Hewlett-Packard (HPQ 21.51 +1.37) CEO Carly Fiorina prompted modest buying interest at the open, lackluster Q2 earnings and the most sluggish sales growth outlook seen in six quarters from Cisco Systems (CSCO 17.57 -0.66) were too enticing for sellers to stand pat...

Disappointing Q1 EPS outlooks from companies like BGP, CAM and KEA also countered stronger than expected earnings from the vast majority of companies out with earnings today... Not even strong Q4 earnings from the world's largest insurer - American International Group (AIG 69.20 +1.47), coupled with better than expected results from other large insurance companies like AOC, PRU and CI, could offset the underlying negative tone... Two separate S&P futures-related sell offs (at 10:00 and 2:00 ET) also drove the indices further into negative territory never to recover as virtually every sector lost ground...

Technology was today's Achilles heel, as losses in excess of 2.0% were witnessed in every area (i.e. semiconductor, software, networking and disk drive) except hardware (-0.8%), which held onto modest gains most of the day due in large part to HPQ's news, but still closed lower... Losses of more than 1.0% were also seen in health care, retail, materials, telecom services, consumer discretionary and transportation, with the latter dragged lower by a near 4.0% drubbing in airline stocks... Even homebuilding (-2.1%), despite yields on the 10-year falling below 4.00% for the first time in about four months and strong mortgage application activity data, plummeted...