STOCK MARKET WATCH, Wednesday 8 March

[ozymandius]

Wednesday March 8, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 1048 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1903 DAYS
WHERE'S OSAMA BIN-LADEN? 1603 DAYS
DAYS SINCE ENRON COLLAPSE = 1564
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 3
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON March 7, 2006

Dow... 10,980.69 +22.10 (+0.20%)
Nasdaq... 2,268.38 -17.65 (-0.77%)
S&P 500... 1,275.88 -2.38 (-0.19%)
30-Year Bond 4.72% -0.00 (-0.02%)
10-Yr Bond... 4.74% -0.00 (-0.04%)
Gold future... 554.50 -2.30 (-0.41%)






GOLD, EURO, YEN, Dollars and Loonie


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

[ozymandius]

1. WrapUp by Ike Iossif - WEEKLY CHARTS

SUMMARY

You probably re-call the remarks we made a few weeks ago with regard to the relation of oil versus equities, and bond yields versus equities. At that time we said, "In conclusion, we got two possibilities ahead of us. Oil prices and bond yields come down further, fueling a rally in the equity markets. Or, oil prices, and bond yields bottom out at current levels and reverse to the upside, causing the equity markets to retreat back down to the bottom of their range. So, over the next 5-10 trading days, pay attention to the $59-$58 support zone for oil, and to the 4.375-4.425 support zone for the yield of the 10-year bond. If support holds and oil/bond yields begin to rise, then we ought to look for a decline in the equity markets ranging between 4.5% and 7.5%. The opposite holds true if oil and bond yields break down; should that happen, we ought to look for a rally in equities between 4% and 5%."

Notice how the yield of the 10-year T-Note closed marginally above resistance, which in turn spooked the equity markets. Unless bond yields retreat back down, the equity markets have no place to go but sideways or down. The key thing to pay attention to for the rest of the week is whether support holds, if it doesn't expect a further decline towards the first downside targets. If it holds, while bond yields retreat simultaneously, then the bulls will be heartened and emboldened to make another attempt to take out resistance.

-many many charts, as always-

http://www.financialsense.com/Market/wrapup.htm

[54anickel]

62. Understanding Secular Bear Markets: Concerns and Strategies for Financial

http://www.fpanet.org/journal/articles/2006_Issues/jfp0306-art7.cfm

Executive Summary

- Six years of difficult markets have produced portfolio investment performance well below that predicted by historical average market returns, and client financial plans may be underperforming their original accumulation/ retirement projections.
- Research shows that financial markets go through long-term advances and declines typified by expanding and contracting price-to-earnings ratios, called "secular" bull and bear markets. The study of these periods may provide advisors with a different perspective on investment strategy than they would have if they were focusing solely on long-term average market returns and assumed that any shorter-term variations were mere "market noise."
- Research on secular markets suggests that we may be in a secular bear market, and that historically P/E ratios would have to decline substantially before the market could enjoy another secular bull market.
- Market strategies such as passive strategic allocation that are successful in secular bull markets (such as the 1982–2000 time period) are not necessarily desirable in secular bear markets.
- Alternative strategies for secular bear markets include designing concentrated portfolios, sector rotation, alternative investments, and tactical asset allocation.
- Using different investment management strategies in a secular bear market may be a way for financial planners to differentiate themselves, better attract and retain clients, and help clients achieve financial planning goals.


snip>

This article proposes that strategic asset allocation is not the most desirable strategy for portfolio management during secular bear markets. During these periods of long-term market returns that underperform historical averages, the traditional passive strategic "rules" for managing client portfolios must be reconsidered. The authors will present evidence that suggests long-term market cycles do, in fact, exist. The article will then present four alternative active management strategies that are currently considered to be "high risk" strategies by the planning community (often because they "risk" substantially underperforming their relative benchmark), but may actually deliver significantly better returns for clients in difficult markets. Finally, the authors will discuss the phobic response to active management strategies in the advisor community and consider the financial planning and business implications of a secular bear market.

Curious Lack of Discussion

There is no doubt that strategic asset allocation is well entrenched in the planning community. Proponents know that modern portfolio theory is used by many of the largest institutional investors. Passively and strategically managing portfolios with regular rebalancing is the accepted standard for managing portfolios, and is taught to all CFP practitioners and other investment professionals as the best way to achieve "predictable" long-term returns within manageable constraints for risk and volatility. This body of work has withstood the test of years of rigorous academic debate. Furthermore, many advisors feel that their clients are not asking for more return than what an efficient, diversified portfolio can deliver, regardless of the market climate and despite the dismal returns that negative market years may produce for passive portfolios. Why should successful business owners and experienced financial professionals get sidetracked by worrying about changing asset management strategies that are already "proven" and accepted by the industry?


more...

[EuroObserver]

2. Nikkei -0.63% Topix -0.76%: most sectors down; real estate, pharmaceutical

(Kyodo) The Tokyo stock market dropped Wednesday, with high-tech issues drawing selling following overnight falls in their U.S. counterparts. The 225-issue Nikkei Stock Average dropped 98.53 points, or 0.63 percent, to 15,627.49. The Tokyo Stock Price Index of all First Section issues on the Tokyo Stock Exchange fell 12.29 points, or 0.76 percent, to 1,605.58.

High-tech issues, including Sharp, NEC and Hitachi, retreated after U.S. counterparts extended losses overnight, hit by disappointing earnings forecast by U.S. technology bellwether Texas Instruments Inc.

As a whole, a wait-and-see mood was prevalent among many investors ahead of the outcome of the Bank of Japan's Wednesday-Thursday policy meeting, which could result in an end to the central bank's five-year ultra-loose monetary policy, brokers said.

The Tokyo stock market has already factored in a change in the BOJ's current monetary policy, and market participants are now paying close attention to whether the BOJ will decide to abandon the policy at this week's meeting given Prime Minister Junichiro Koizumi's recent remarks urging the central bank to be cautious about changing policy, they said. "Bargain-hunting was scant as it's said that it won't be too late to buy even after confirming the outcome (of the current BOJ policy meeting,)" said Kazuhiro Takahashi, head of the equity planning and administration department at Daiwa Securities SMBC Co.

Declining issues led advancing ones 1,170 to 436, with 86 shares ending unchanged.

Trading volume on the TSE's main section came to 1,732.94 million shares against Tuesday's 1,644.26 million shares. ...more...

TOKYO (Reuters) - The Nikkei average lost 0.63 percent on Wednesday as selling, partly by foreign investors, hit steel makers such as Nippon Steel Corp. , while plant engineering firm JGC Corp slid on a brokerage downgrade.

Uncertainty weighed on the Tokyo market as many investors, uncertain whether the Bank of Japan will end its five-year ultra-easy monetary policy on Thursday, hurried to lock in profits. ...more...

(FT) ... Banking, one of the most important domestic sectors, was down 1 per cent. Mitsubishi UFJ, the world’s biggest bank by assets, fell 1.2 per cent to Y1,650,000.

A forecast from Texas Instruments that disappointed investors sent chip-related stocks lower. Advantest, the world’s biggest maker of chip-testing equipment, fell 1.9 per cent to Y12,860. Investors continued to adjust their positions in companies in the wake of UK mobile phone operator Vodafone’s news that it was selling its Japanese arm to Softbank, the internet conglomerate. Softbank fell a further 2.5 per cent to Y3,060 – adding to Tuesday’s sharp fall. NTT DoCoMo, Japan’s biggest mobile operator, was down 1.8 per cent to Y167,000 but its rival KDDI rose 2.1 per cent to Y575,000.

Upstream oil companies fell as the crude oil price failed to recover recent losses. Teikoku Oil slid 4.5 per cent to Y1,495, with Inpex also down 4.5 per cent to Y1,050,000

Real estate rose, boosted by a note from Goldman Sachs predicting share prices would be driven forward by a strong national land price survey in late March. Mitsui Fudosan, Japan’s biggest property company, closed 2.7 per cent higher at Y2,475. Mitsubishi Estate, its largest rival, was 2.5 per cent higher at Y2,475. Sumitomo Realty & Development jumped 3.1 per cent to Y2,700.

In the midst of uncertainty ahead of the Bank of Japan’s announcement, pharmaceuticals – classic defensive stocks – performed well. Takeda, Japan’s biggest drugmaker, rose 2 per cent to Y6,660. Chugai Pharmaceutical jumped 5 per cent to Y2,315 after JP Morgan raised it to “overweight” from “neutral”. JP Morgan cited the company’s ”relatively limited exposure to generic competition”. ...more...

[EuroObserver]

14. Japan's key economic gauge above boom-or-bust line for 6 months

(Kyodo) A key gauge of the current state of Japan's economy stayed above the boom-or-bust threshold of 50 percent in January for the sixth straight month, spurred by all-time high indexes of production, industrial production shipment and electricity consumption by large-lot users, the government said Wednesday.

The index of coincident economic indicators came to 100.0 percent, the Cabinet Office said in a preliminary report. It marks the longest period for the index to remain above the 50 percent line since it did so for 16 months from May 2003 to August 2004.

A reading above 50 percent is considered a sign of economic expansion. A figure below the line is seen as a sign of contraction.

The government maintained its assessment of the economic situation for the eighth month, saying the index "shows improvements in Japan's economy." ...more

[EuroObserver]

15. JGBs surge on short covering before BOJ decision

TOKYO, March 8 (Reuters) - Japanese government bonds surged on Wednesday on short covering on the view that yields have already risen enough to prepare for a possible change in monetary policy, which may come the next day.

The Bank of Japan could announce an end to its five-year-old super-easy monetary policy on Thursday when it wraps up a two-day policy board meeting, but reiterate that it will keep short-term interest rates very low for the time being. Yields on two- and five-year JGBs now match levels before the current policy was introduced, and traders said they are focusing on when the BOJ will lift short-term interest rates from zero as they have already been forecasting that the quantitative easing policy would end by April.

The current benchmark 10-year futures contract for March delivery also rose on buybacks ahead of a switch in the lead contract to June on Thursday, traders said.

Expectations remained for a monetary policy shift this week despite comments from politicians and government officials urging the BOJ to be cautious about scrapping its "quantitative easing" policy of flooding the banking system with excess funds.

Many traders said while volatility may rise initially after a policy decision, the market was expected to settle back into recent ranges even if the BOJ doesn't act on Thursday. "If not tomorrow, the move is highly likely in early April," said Hiroyuki Kubota, chief JGB analyst at Fisco. "If it's just a matter of timing, then I doubt if banks will buy aggressively now ahead of their book-closing at the end of the month."

March futures <0#2JGB:> ended the day session up 0.44 point at 136.12, after rising more than half a point to a high of 136.31.

The yield on the benchmark 10-year cash JGB dropped four basis points to 1.605 percent, while the five-year yield plunged five basis points to 1.035 percent. The 20-year yield shed 2.5 basis points to 1.980 percent, keeping the spread between five- and 20-year bonds at its lowest level since mid-2003. The 30-year yield slid 5.5 basis points to 2.200 percent.

Some traders said speculators and foreign players were seen driving 20- and 30-year yields down sharply, possibly in anticipation of a policy shift the next day, creating long positions now and taking profits after the BOJ decision. ...more...

[EuroObserver]

18. Tokyo stock market seen strong even with BOJ move

TOKYO, March 8 (Reuters) - Tokyo's stock market, among the world's best performers last year, is set to extend gains this year even if Japan's central bank tightens monetary policy, as investors would see such a move as a vote of confidence in the economy, analysts said.

The move could bring some volatility to shares of interest-rate-sensitive companies, such as airlines and utilities, but analysts said the impact on equities should be limited since rates would not rise immediately.
...

"No matter when the BOJ scraps quantitative easing, the move should be considered positive because that shows the central bank sees Japan's economy as solid enough to bear that," said Takashi Kamiya, chief strategist at T&D Asset Management.

"Even if the BOJ starts raising rates, they would keep the rate near zero," Kamiya said. "It's way too early to worry about the impact on the stock market from such a tiny change, given the current strength of Japan's economic growth." ...more...

[UpInArms]

25. Summary-Comments by government, politicians on BOJ policy

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-03-08T060804Z_01_T266223_RTRIDST_0_ECONOMY-JAPAN-BOJ-GOVT.XML

TOKYO, March 8 (Reuters) - Government wariness about an end to the Bank of Japan's current hyper-easy monetary policy has increased as market speculation intensified over a policy shift expected as early as this week.

Recent comments by central bankers and a solid rise in consumer prices have heightened expectations about an end to the "quantitative easing" policy of flooding the banking system with funds.

The BOJ began a two-day policy-setting meeting on Wednesday.

...more with various officials comments at link...

[54anickel]

60. Could Japan cause a US house price crash?

http://www.moneyweek.com/file/9285/could-japan-cause-a-us-house-price-crash.html

"Central Bankers of the World, Unite!" That at least seems to be the theme from the central banker's playbook. The US Federal Reserve, The European Central Bank and now even the Bank of Japan all seem to be in a mood to tighten the global money supply. What does this mean? We explore that thought and look at the US saving rate (or lack thereof), foreclosure rates and more.

The End of Japan's Quantitative Easing
One of the more important aspects to global growth has been the "quantitative easing" policy of the Bank of Japan. Basically, they have put about ¥30 trillion into the world since 1999, with ¥20 trillion of that coming since 2003. They have flooded the world with liquidity, at almost exactly the same time as the US Fed was aggressively lowering rates. Japan has been a main source of capital and savings for the world. Now that looks like it is going to change. My friends at GaveKal give us a succinct picture of what is happening. After that we will look at why you should care about Japanese bank policy.

"As long-time believers in the huge importance of Japan's zero interest rates for every financial market in every corner of the world, we have to sit up and take notice of the imminent tightening of monetary policy in Tokyo.

"First hints and, more recently, explicit statements suggest that the Bank of Japan is about to abandon its policy of flooding the Japanese banking system with money so as to create excess balances of ¥30 trillion. Whether the BoJ announces this change at its next monthly meeting on Wednesday, or waits until the April meeting, is of little importance. What matters is that the policy of quantitative easing (QE) is clearly at an end.

"But the imminent end of QE begs a crucial question, which seems to be confusing many investors and market analysts. Will the end of QE be followed quickly by the ending of the zero interest rate policy (ZIRP)?

more...

[ozymandius]

3. One report today

10:30 AM Crude Inventories 03/03
Briefing Forecast NA
Market Expects NA
Prior 1638K

[UpInArms]

66. DOE Petroleum Inventories Report:

10:32 AM ET 3/8/06 U.S. CRUDE SUPPLIES UP 6.8 MLN BRLS LAST WEEK: ENERGY DEPT

10:32 AM ET 3/8/06 CRUDE STK AT HIGHEST LEVEL SINCE LATE MAY '99: ENERGY DEPT

10:32 AM ET 3/8/06 U.S. GASOLINE SUPPLIES DOWN 1.1 MLN BRLS: ENERGY DEPT

10:32 AM ET 3/8/06 U.S. DISTILLATE SUPPLIES DOWN 2.7 MLN BRLS: ENERGY DEPT

[EuroObserver]

4. Bourses open cautiously higher; London down.

Swiss SMI up 0.11% at 7873.04 in Zurich 09:06:11 CET
CAC 40 opens up 0.3% at 5,004.5 in Paris
Xetra Dax 30 opens up 0.3% at 5,756.8 in Frankfurt
FTSE 100 opens 0.3% lower at 5,839.0 as 10 companies listed on the senior index trade without further rights to their latest dividend payments

European bourses move cautiously higher
(FT) European equities made a cautious start on Wednesday following the losses of the previous session, but some strong results helped stem the generally bearish flow. In early trade the FTSE Eurofrst 300 was flat at 1,342.98, but Frankfurt’s Xetra Dax added 0.2 per cent to 5,748.92 and the CAC 40 in Paris climbed 0.2 per cent to 5,001.66. London’s FTSE 100 was the weak link, falling 0.4 per cent to 5,832.5 after ten of the benchmark’s constituents traded without rights to a dividend payment, taking around 20 points off the index.
...

EADS, the European aerospace manufacturer, reported a forecast-beating 39 per cent rise in full-year net profit driven by growth at its Airbus division. The shares added 2.4 per cent to €32.48.

Credit Agricole, France’s biggest retail bank, rose 2.6 per cent to €31.47 after it said that net profit more than doubled in the fourth quarter, beating expectations, as it reaped the benefit of the completion of its Credit Lyonnais acquisition which hit results in the previous year. The company experienced growth at both its investment banking and retail arms and raised its dividend to €0.94.

Investors caught a whiff of hope that French utility Suez may be back on the market for offers, after Belgian prime minister Guy Verhofstadt expressed concerns that a merger between Suez and Gaz de France, as suggested by the French government, might create a monopoly in his country. Meanwhile, Enel, the Italian utility currently stalking Suez, looked likely to pursue its €40bn bid. Enel’s board was to announce its decision later in the session. Shares in Suez were up 1.9 per cent to €33.64, while Enel was flat at €6.90. Gaz de France was up 1.8 per cent to €29.90. ...more...

FTSE falls on global rate fears, ex-divs; ITV up
Wed Mar 8, 2006 3:35 AM ET LONDON, March 8 (Reuters) - Britain's top share index fell on Wednesday as interest rate concerns knocked global equities and several blue-chip stocks traded without the right to the latest dividend, but investors warmed to results from broadcaster ITV (ITV.L: Quote, Profile, Research).
...

Miners, which contributed much to the previous session's losses due to falling base metal prices, broadly continued their slide. But diversified miner Xstrata (XTA.L: Quote, Profile, Research) bucked the sector trend, rising 0.7 percent after Merrill Lynch raised its investment rating to "buy".

Several stocks, including Lloyds TSB (LLOY.L: Quote, Profile, Research), miner Anglo American (AAL.L: Quote, Profile, Research), Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and spirits group Diageo (DGE.L: Quote, Profile, Research) traded without the right to the latest dividend payout, taking an estimated 21 points off of the UK index. Lloyds was the biggest FTSE 100 faller, down 4 percent, with Anglo falling 2.2 percent and RBS trading 2.7 percent lower.

On the upside, Britain's top commercial broadcaster ITV (ITV.L: Quote, Profile, Research) rose 3.4 percent after posting a 36 percent rise in annual pretax profit, even as advertising declined at its flagship ITV1 channel.
...

News and information group Reuters (RTR.L: Quote, Profile, Research) gained 1.4 percent to 388-1/4 pence after investment bank Morgan Stanley raised its rating on the stock to "overweight" from "equalweight", keeping a 475p price target. ...more...

[EuroObserver]

5. Bourses fall off cliff in mid-morning trade: "rate fears"

Swiss SMI down -0.80% at 7801.50 in Zurich 11:36:28 CET
CAC 40 down -0.99% at 4,943.01 in Paris 11:43 CET
Xetra DAX down -0.98% at 5,682.85 in Frankfurt 11:43 CET
FTSE-100 down -0.91% at 5,804.30 in London 10:43 GMT
FTSE-ALL SHARE down -0.84% at 2,959.51 in London 10:43 GMT
FTSE EUROTOP down -0.91% at 2,836.81 in London 10:43 GMT
DJ EURO STOXX50 down -0.86% at 3,713.17 in Frankfurt 11:43 CET



European bourses move into reverse
(FT) European equity markets reversed earlier gains on Wednesday as the bearish trend of the previous session continued, with banks and oil stocks lower, overshadowing some strong results.

By mid morning, the FTSE Eurofrst 300 was down 0.5 per cent at 1,337.32, Frankfurt’s Xetra Dax fell 0.2 per cent to 5,728.87 and the CAC 40 in Paris shed 0.3 per cent to 4,976.02.

London’s FTSE 100 was the weakest link, falling 0.7 per cent to 5,815.6 after ten of the benchmark’s constituents traded without rights to their latest dividend payment, taking more than 20 points off the index. ...more...

European shares extend losses on global rate fears
Wed Mar 8, 2006 5:42 AM ET LONDON, March 8 (Reuters) - European shares extended losses on Wednesday as concerns over the future direction of global interest rates hit investor sentiment and several UK blue-chip stocks including bank Lloyds TSB (LLOY.L: Quote, Profile, Research) traded ex-dividend.

By 1037 GMT, the benchmark FTSEurofirst 300 <.FTEU3> index was 1.1 percent lower at 1,329.34 points. Britain's FTSE 100 <.FTSE> was 0.9 percent weaker at 5,802.9, Germany's DAX <.GDAXI> and France's CAC 40 <.FCHI> both traded down 1.1 percent.

Global equities are under pressure because of fears over how far interest rates could rise in Europe, Japan and the United States. ...source...

[ozymandius]

9. As noted yesterday -

the graphical representations of the S&P and Nasdaq futures were shocking. It was more like a cliff today than yesterday.

[EuroObserver]

11. I thought that too. In Europe they waited an hour or so

before plunging. Still plunging now as we speak.

[EuroObserver]

27. Bourses may have 'stabilised' around -1.0% down

see: http://mwprices.ft.com/custom/ft-com/html-marketsDataTools.asp
... more soon ...

[EuroObserver]

55. Some blurb:

http://today.reuters.co.uk/Investing/MarketReportArticle.aspx?type=eurMktRpt&storyID=2006-03-08T124536Z_01_L08783714_RTRIDST_0_MARKETS-EUROPE-STOCKS-UPDATE-1.XML

... European shares fell on Wednesday on nagging concerns about global interest rates and as miners such as Anglo American (AAL.L: Quote, Profile, Research) extended recent sharp falls, offsetting upbeat company results and takeover news.

"In the U.S., there are worries there may be a big overshoot (in rates). Earnings are coming in better than expected though so in the long term we are positive on equities," says Rohini Rathour, analyst at investment firm Sarasin Chiswell.

Mining stocks declined yet again as base metal prices buckled. Anglo American slumped 5.5 percent, BHP Billiton (BLT.L: Quote, Profile, Research) lost 4 percent and Rio Tinto (RIO.L: Quote, Profile, Research) lost 2.5 percent.

Markets were also eyeing any possible impact from a U.S. warning that Iran should expect consequences from the United Nations if it failed to halt nuclear research. U.S. crude oil prices were down 0.8 percent at $61.12 a barrel.

M&A CONTINUES

French utility Suez (LYOE.PA: Quote, Profile, Research) added 2.4 percent as investors expected Enel (ENEI.MI: Quote, Profile, Research) to press ahead with a 40 billion euro bid at a meeting later. Enel's board met on Wednesday to discuss plans for Suez, sources familiar with the situation said, amid signs Italy's biggest utility was gaining political and financial support for a bid. Enel shares were down 1.3 percent at 6.81 euros.

Shares in VNU (VNUN.AS: Quote, Profile, Research) were flat at 27.36 euros after the firm said it had agreed a private equity buyout but Fidelity said it was unlikely to back the bid. The cost of default protection on the Dutch media company's $3.3 billion of bond debt jumped.

In France, EADS (EAD.PA: Quote, Profile, Research) and Credit Agricole (CAGR.PA: Quote, Profile, Research) both fell despite profits beating forecasts.

Shares in the French steel pipe firm Vallourec (VLLP.PA: Quote, Profile, Research) rose 3 percent after its profits tripled. It reported a 226 percent rise in its 2005 net profit to 473 million euros and boosted its dividend to 11.2 euros per share from 3.2 euros.

...more...

"Pulling pipe" looks like good business. Hmm. B-)

[EuroObserver]

99. Bourses saw writing on wall: closed -0.42%(SMI) -1.15%(DAX). Pharma gains

(Manual report since FT steno seems to have gone AWOL (maybe having a smoke somewhere...) - Reuters also late reporting (and suffering from poorly-revamped inet software). Bosses likely to have pissed off early to some conclave somewhere...).
Swiss SMI closed down -0.42% at 7831.52
CAC 40 closed down -0.45% at 4,969.51
Xetra DAX closed down -1.15% at 5,673.36
FTSE-100 closed down -0.76% at 5,812.90

Some dark and some bright spots:

European bourses move into reverse
By Dave Shellock Published: March 8 2006 07:31 | Last updated: March 8 2006 17:43 <--Huh?

Bid and merger activity remained firmly on the agenda in Europe on Wednesday as VNU, the Dutch media group, agreed to be bought by a group of private equity firms, and Italian utility Enel mulled over a possible bid for Franco-Belgian rival Suez.

Shares in VNU rose as high as €28 before easing back to close a fraction lower at €27.35 amid concerns that the deal could be derailed by disgruntled shareholders. Knight Vinke Asset Management, which holds about 2 per cent of VNU’s shares, said it would reject the €28.75 per share bid and it had asked the company’s board to allow shareholders to vote on a new sale process. Fidelity International, owner of at least 10 per cent of VNU, said it was unlikely to support the offer.

Meanwhile, the board of Enel met on Wednesday to discuss how to respond to the planned merger between Suez and Gaz de France, which is backed by the French government. Peter Wirtz at WestLB said he failed to see the urgency for Enel, as the political process for merging Suez and Gaz de France would be likely to “take months.” “From the financial standpoint, we have calculated that Enel could offer €36 per Suez share without destroying value. “We have cut our rating for Enel to “hold”. If the company is really prepared to play a key role in the European M&A game, it has to pay prices that verge on being value destructive,” Mr Wirtz added. Enel shares slipped 0.7 per cent to €6.853, while Suez climbed another 3.2 per cent to €34.07 - more than the stock and dividends worth €30.51 that shareholders will get under the current merger with Gaz de France. Suez shares have gained more than 9 per cent over the last three sessions. GdF, meanwhile, eased back 0.4 per cent to €29.29.

The broader market retreated for a second successive session as investors continued to fret about the outlook for global interest rates. The FTSE Eurofirst 300 index fell 10.3 points, or 0.8 per cent, to 1,333.17, its lowest finish for three weeks.

The forestry and paper sector bucked the weaker trend after UPM-Kymmene unveiled plans to boost its profitability through plant closures and job cuts. The Finnish-based group - the world’s leading producer of magazine paper - said it would axe some 3,600 jobs by the end of 2008, about an eighth of its current workforce. It will also close its unprofitable Voikkaa mill in south-eastern Finland by the end of September this year. UPM is aiming for annual savings of some €200m to help offset the impact of persistently weak paper prices in Europe. UPM shares rose 5.9 per cent to €19.12. Elsewhere in the sector, Stora Enso jumped 6.2 per cent to €12.90 and Norske Skog also added 5.9 per cent to NKr108.50.

Pharmaceuticals also outperformed after Morgan Stanley said the sector looked “very cheap”. “The pharma sector has underperformed by 10 per cent since late October,” the investment bank said. “It now looks very cheap on relative dividend yield and price/earnings, and is pricing in less growth than we expect. Our preferred stock picks are Novartis and Sanofi-Aventis.” Sanofi-Aventis climbed 2.5 per cent to €72.65 while Novartis added 1.1 per cent to €71.35. The sector - up 1.8 per cent on Wednesday - also got some support from vague bid speculation, largely centred on AstraZeneca of the UK.

Accor tumbled 7.4 per cent to €47.47 as investors showed their disappointment at the hotel group’s reduced dividend and lack of clear guidance. “Our concern is that the market is expecting that the incoming chief executive, Giles Pelisson, will pursue a more aggressive disposal strategy, which would have led to a significant return of cash to shareholders,” said Credit Suisse. “Hence. we believe that there is already a significant amount of ‘hope value’ factored into the share price.”

Credit Agricole rose 1.3 per cent to €31.09. The French bank said its fourth-quarter net profits had more than doubled, beating market expectations. “We find the quality of this set of results extremely satisfactory,” said Guillaume Tiberghien, analyst at Deutsche Bank. He maintained a “buy” rating on the stock but said this would come under review.

Deutsche Post gained 2.5 per cent to €22.39 after JP Morgan upgraded the stock from “neutral” to “overweight” and raised its price target from €21.40 to €24.50.

[EuroObserver]

103. No change in FTSE 100 index

LONDON (Reuters) - The make-up of the leading stock index, was left unchanged following the latest quarterly review, the compiler said on Wednesday, confirming expectations.

It was the first time in 10 years there was no change to the line-up of companies in the FTSE 100 after a quarterly review.

The outcome, based on Tuesday's closing prices and easily calculated, was formally approved at a meeting of the FTSE Europe, Middle East and Africa committee on Wednesday, with the result confirmed after the end of trading.

Companies outside the FTSE 100 that grow to rank among the 90 largest by market capitalisation are automatically promoted, while any FTSE 100 company that falls to 111th spot or below drops into the FTSE Midcap 250 index.

There will be changes to the mid-cap FTSE 250, however, which will see British investment company Dexion Absolute Ltd and oil explorer JKX Oil & Gas Plc join the index.

Drax Group Plc, which owns Europe's biggest coal-fired power station, will also enter the FTSE 250, an almost inevitable consequence of its flotation last December.

Drax, with a market value of 2.7 billion pounds, will be one of the largest companies in the FTSE 250.

...more...

[ozymandius]

6. Lax Oversight Blamed for High Gas Prices

WASHINGTON - Too little oversight of financial markets — not supply and demand problems — are to blame for skyrocketing natural gas prices, top law enforcement officials in four Midwestern states said Tuesday.

Comparing natural gas trading to "the wild, wild West," the attorneys general from Illinois, Iowa, Missouri and Wisconsin urged Congress to increase regulation of markets they say are vulnerable to abuse and manipulation.

The officials — all Democrats — issued a six-month study of natural gas prices. They said they want to debunk the commonly held view that a lack of supply and surging demand are responsible for sharp price increases that have caused a 25 percent to 30 percent rise in winter heating bills in the Midwest and elsewhere.

"It's stunningly annoying to sit here and have to literally say the moon is not made of green cheese," Missouri Attorney General Jay Nixon said at a news conference. "Supply and demand did not cause the spikes."

more...

[AnneD]

39. Morning Marketeers,

:donut: Great toon today Ozy, and so true. Well, we had our primaries yesterday and some seem to be bummed because Tom DeLay won. Here's my take. At the polls here at the school, most of the GOP voters were old....I mean old, like they will be lucky if they are alive to vote in Nov old. And the turnout was VERY VERY light. Now the Nov. election will draw more voters. They will choose between DeLay and Lampson. DeLay has to actual work for this one and spend money (most I have seen him campaign in years. Last election, DeLay came close to losing and the challenger did not have money. This year Lampson is well funded and I think he has an excellent chance to unseat DeLay.

And speaking of gas, the high price that is....I buy my gas once a week and I noticed that yeaterday, it has gone up 4 cents from Sunday. Unbelievable. The economy is going to sink this government yet.

Happy Hunting and watch out for the bears.

[EuroObserver]

49. Morning AnneD

How about preventing these people from running while they're indicted for a crime (as a cautionary measure, you understand)?

Of course, once they're convicted of, eg. fraud while in office, they should be inhabilitated for a very long time. Is that the case?

Exactly what type of 'felon' is not allowed to vote in the USA; is that Federal law or States'?

Have a nice day but watch out: I think the bears are wide awake now...

[AnneD]

63. It's that old notion of....

innocent until proven guilty. Just can't get around it. As far as felons voting. I have been surprised that it is decided on a state to state basis. Here in Texas, once you have 'paid your debt to society', your voting rights are restored. Not so in other places. A pardon by the state gov can overide the state laws so that is an option. Remember, the US is a group of invividual states that banded togather, so it is not as monolithic as it might seem.

Oh yeah, I see the bears rummaging around the trash cans now.

[EuroObserver]

7. Iran calls IAEA report on atom drive "politicised"

Wed Mar 8, 2006 8:15 AM VIENNA (Reuters) - Iran denounced a U.N. watchdog report on its nuclear drive as "politicised" ahead of a debate by the agency's board on Wednesday opening the way to U.N. Security Council action over suspicions Tehran wants atom bombs.

The International Atomic Energy Agency's 35-nation board of governors reported Iran to the council a month ago and called on it to shelve uranium-enrichment work and stop stonewalling IAEA investigations into the nature of its nuclear programme.

But the report by IAEA chief Mohamed ElBaradei given to this week's board session said Tehran had generally flouted the February 4 appeal by expanding a pilot enrichment drive, inviting Council intervention that could lead to consideration of sanctions.

An Iranian collision course with the council looked more likely after Tehran brushed aside what EU diplomats said was a Russian offer to let it do some atomic research if it refrained from enriching uranium on an industrial scale for 7-9 years. The United States and its key European Union allies Britain, France and Germany also rebuffed the idea because they said it would not have prevented Iran perfecting bomb technology via enrichment research.

Stung by the rejection of its trial balloon after private discussions with Western leaders about the matter were leaked to news media, Moscow then publicly closed ranks with Washington and the EU3 by declaring it had not drafted any new plan.
...

"The purely technical nuclear issue of the Islamic Republic of Iran is politicised," the Iranian government said in a statement on ElBaradei's report released just before Wednesday's debate, due to begin around 9 a.m. British time.

"Bias, exaggerated and unjustified information has misled the international community," the statement said.

It added that Iran had bent over backwards to cooperate with IAEA inquiries over the past three years, providing "voluminous information", granting access to military sites and arranging interviews even though such steps were not required by the NPT.

ElBaradei said Iran's compliance with probes remained selective. He gave examples where it withheld documents, denied access to people the IAEA wanted to query and failed to clarify allegations of military links to nuclear research.

U.S. Vice President Dick Cheney said on Tuesday that Iran would be stopped from getting atomic bombs and faced "meaningful consequences" if it persists in defying calls to stop nuclear work that could endow it with knowhow to make weapons.

...more...

[EuroObserver]

10. Annan urges cool rhetoric after Cheney warns Iran

Wed Mar 8, 2006 6:18 AM GMT UNITED NATIONS (Reuters) - U.N. Secretary-General Kofi Annan urged the United States on Wednesday to cool its rhetoric after Vice President Dick Cheney warned Tehran it would face "meaningful consequences" if it persisted in defying the international community through its nuclear programme.

Annan, in an interview on public television's "Charlie Rose Show," also predicted Tehran would use Washington's recent nuclear agreement with India to argue Western powers were relying on a double standard in seeking to crack down on its atomic ambitions. "This is something they will use, the Indian agreement," he said of the Iranian government. "It does complicate the discussions with Iran and the deal with Iran."
...

Cheney, speaking to the pro-Israel lobbying group AIPAC on Tuesday, said the United States was keeping all options on the table in its determination to prevent Iran from developing nuclear arms. "The Iranian regime needs to know that if it stays on its present course, the international community is prepared to impose meaningful consequences," Cheney said. He spoke as the 35-nation governing board of the International Atomic Energy Agency was meeting in Vienna to decide its next steps on Iran.

Asked about Cheney's remarks, Annan noted that efforts were still under way to reach a negotiated settlement with Iran over the limits of its nuclear program. "We should all try to lower the rhetoric and allow for calm, serious discussion on this issue," he said. "But the Iranians will also have to understand what the world expects of them," he added. "They have to find a way of convincing the world they are not going to go the nuclear route."

...more...

[EuroObserver]

19. UN Security Council said to meet next week on Iran

Wed Mar 8, 2006 11:39 AM GMT VIENNA (Reuters) - The U.N. Security Council is expected to meet on Iran next week, a senior EU diplomat said on Wednesday as nuclear watchdog governors met to debate a report on the Iranian nuclear drive that Tehran called "politicised".

Council intervention over suspicions Iran secretly seeks atomic bombs appeared inevitable after Tehran brushed aside a reported Russian offer to allow limited nuclear research if it swore off industrial fuel production for 7-9 years.
...

The senior diplomat from the EU trio of powers Britain, France and German said the impasse in their and Russian efforts to resolve the crisis by diplomacy with Iran meant the council was expected to begin deliberations next week.

Asking not to be further identified due to the subject's sensitivity, he said the council would work quickly to issue a "presidential statement" calling on Iran to suspend all atomic fuel enrichment activity and fully cooperate with U.N. investigations into the nature of its atomic ambitions.

If Iran defies the call, the council could repeat its message with a possible threat of action if it were unheeded.

But the council's sanctions option looks further off since veto-wielding Russia and China, while sharing Western resolve to deny Iran nuclear technology of potential use for warheads, now oppose isolating Iran where both have major trade stakes.

The diplomat added that at this point, the active involvement of the Security Council was necessary and inevitable since "there is no sign that the Iranians want to compromise".

...more...

[EuroObserver]

108. See some audio/visual material from UK's Channel4 in Iran here:

(ref. here in this DU thread: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=2152654&mesg_id=2153565 )

[ozymandius]

8. OPEC set to keep taps open to cool oil prices

VIENNA (Reuters) - OPEC oil producers said on Wednesday they were ready to keep output close to the limit to bring prices within the comfort zone for consumers and fill supply gaps in Nigeria and Iraq.

The Organization of the Petroleum Exporting Countries began meeting in Vienna with a decision to stick to today's 28 million barrels per day ceiling seemingly a foregone conclusion despite forecasts for lower demand in spring.

With prices near $62 a barrel, disruptions to exports from Nigeria and Iraq and controversy over Iran's nuclear program OPEC has little room for maneuver. The group that accounts for over half of the world's oil exports has said repeatedly it is committed to keeping markets well supplied.

"There are simply too many geopolitical factors to change production," said OPEC President Edmund Daukoru.

more...

[EuroObserver]

16. Japan rejects new Chinese proposal on joint energy projects

TOKYO (AFP) - Japan has rejected a new Chinese proposal for joint energy projects in disputed gas-rich waters, the top government spokesman said.

"China made a proposal to jointly develop two areas in the north and south of the East China Sea. This proposal is something we cannot accept," Chief Cabinet Secretary Shinzo Abe told a regular press conference.

He declined to specify the areas, but according to Japanese news reports, one of the two areas is around an island chain, known as Senkaku in Japanese and Diaoyu in Chinese, which is claimed by Japan, China and Taiwan. The other is in the continental shelf between Japan and South Korea, according to national broadcaster NHK and other media.

The new proposal was made during bilateral talks held in Beijing on Monday and Tuesday, in which both sides agreed only to study each other's proposals for solving lingering disputes over the rights to develop the gas-rich waters. Japan and China, among the world's top energy importers, have been sparring for years over potentially lucrative gas fields in another part of the East China Sea where their 200-nautical-mile (370-kilometer) exclusive economic zones overlap. China began drilling unilaterally in the area in 2003. Japan is concerned that the Chunxiao and Duanqiao gas fields that China is developing stretch into what Tokyo considers its sector.

...more...

[EuroObserver]

17. Ecuador calls state of emergency after oil strike

Wed Mar 8, 2006 5:59 AM GMT QUITO, Ecuador (Reuters) - Ecuador declared a state of emergency in three provinces on Tuesday after a strike by 4,000 contracted workers cut output at state oil firm Petroecuador and the company warned it could halt full production by Wednesday.

Petroecuador production was down 34 percent to 132,000 barrels per day after contract workers in two Amazon provinces put down their tools on Tuesday to demand full-time positions and protest work terms, a company official said. "A state of emergency was called in the provinces of Napo, Orellana and Sucumbios," presidential spokesman Enrique Proano told reporters. A state of emergency limits constitutional rights such as freedoms of association and to right to public gatherings.
...

Petroecuador warned that its production could be completely cut off by Wednesday without an end to the strike. "We estimate accumulated production losses of 197,545 barrels by 6 a.m. (11 a.m. British time) Wednesday, which is equivalent to $9.8 million (5.6 million pounds) and could mean a total halt of the company's operations," the company said in a statement. Ecuador, South America's fifth-largest oil producer, usually has output of around 530,000 bpd and Petroecuador produces an average of 200,000 bpd of crude. Turmoil in the country's oil sector has unsettled global oil markets already fretting over supply disruptions.

A leader of the contract workers, Remigio Sornoza, said they were holding talks with Petroecuador officials to end the strike. In its statement, Petroecuador said it owes around $51 million to the subcontracting companies that hire the workers. "The workers have shut down electricity in all the oil fields and that is causing a gradual drop in production," said a high-ranking company official who asked not to be named. ...more...

[EuroObserver]

20. Venezuela drops calls for Opec output cut

(FT Vienna) A consensus has emerged among ministers from the Organisation of the Petroleum Exporting Countries to keep oil production at the current levels.

A final decision will be made later in the day but the liklihood of recent output being maintained grew after Venezuala dropped its calls for a cut in production to the cartel’s output of 28m b/d.

“It looks like there’s a consensus,” said Sheikh Ahmad al-Fahd al-Sabah, the Kuwaiti oil minister on Wednesday ahead of a meeting at the group’s headquarters in Vienna. ...more...

[EuroObserver]

21. EU calls for joint energy policy

(BBC) The European Union has called on member states to work together to ensure steady and secure energy supplies. The European Commission said in a green paper on energy that the EU's joint bargaining power would be second only to the US and let it get better deals. EC president Jose Manuel Barroso said that "political will" was now needed.

The vision of a more unified power market may stumble, however, as nations including France, Spain, Italy and Germany fight to control key providers.
...

"We are in a new energy century, demand is rising, Europe's reserves are declining, there is underinvestment and the climate is changing," Mr Barroso said in Brussels. "We must have an approach which matches the new reality."

Mr Barroso said that it was vital EU leaders abandoned their 25 "different and uncoordinated" energy policies and spoke with one, clear voice.

...more...

[EuroObserver]

22. Nigeria Delta general moved out

(BBC) The general leading Nigeria's fight against rebels in the oil producing Niger Delta has been replaced.

Removing Brigadier General Elias Zamani had been one of the demands of the militant group still holding three foreign oil workers hostage. However, an army spokesman said the general's redeployment was "routine".
...

Gen Zamani is to be replaced by Brigadier General AA Ilogho, director of the War College in the capital, Abuja.
...

However, a local community leader told the AFP news agency that they wanted a demilitarisation of the Delta region. "We're a civilian community. We don't want this level of garrison," said Oboko Bello, head of the radical Federated Niger Delta Ijaw Communities, which has been asked to liaise between the authorities and the hostage-takers. ...more...

[EuroObserver]

24. Two major China oil pipelines ready for use in 2006

SINGAPORE, March 8 (Reuters) - China National Petroleum Corp. (CNPC) will complete two major oil pipelines costing almost $2 billion in northwest China this year, part of the state giant's plan to boost energy security, a company official said on Wednesday.

A 1,858 km (1,155-mile) oil product line from Urumqi in the remote Xinjiang Uighur Autonomous Region to Lanzhou city in Gansu province will be ready for operation by end-May, with a designed capacity of 200,000 barrels per day (bpd). A 1,500-km (930-mile) pipeline, with a capacity to channel 400,000 bpd of crude oil, will be built along the same route and will be completed by end-October, said the official from Beijing.

The two pipelines, costing 13-15 billion yuan ($1.6-1.85 billion), will eventually be connected to the landmark China-Kazakhstan crude pipeline, the only onshore pipeline that the world's second-largest oil consumer has secured. The new pipelines will help the firm to more efficiently supply fuels from the landlocked, oil-surplus northwestern region to the country's booming coastal and central regions.

China is pulling together a comprehensive energy security plan that includes building cross-country oil and gas pipelines, setting up strategic petroleum reserves and buying foreign oil and gas assets, to hedge against soaring dependence on imports. ...more...

[UpInArms]

30. Shell says it will invest $500M in China

http://www.myrtlebeachonline.com/mld/myrtlebeachonline/business/14046693.htm

BEIJING - Royal Dutch Shell Group plans to spend $500 million in China this year as it expands its gas station network and develops clean energy projects, a Shell executive said Wednesday.

The company is still in negotiations over adding to its network of own-brand gas stations in the southern province of Guangdong, in Beijing and in the nearby northern city of Tianjin, said Nick Wood, Shell's external affairs director in China.

The Anglo-Dutch company is one of the largest foreign investors in China and also has 200 joint venture gas stations with local partner China Petroleum and Chemical Corp., or Sinopec, Asia's biggest oil refiner, the official Xinhua News Agency cited Shell's executive chairman in China, Lim Haw Kuang, as saying.

"Shell's investment of $3.5 billion in China is too little, while the investment opportunities in the country are so big," Lim was quoted as saying.

Shell also has a major petrochemical project, Nanhai Petrochemical, on the southern island of Hainan with partner China National Offshore Oil Corp. The factory, with an annual output capacity of 2.3 million tons, is one of the biggest in the country, Xinhua said.

...more...

[UpInArms]

34. OPEC decides to stick to output ceiling: reports

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BB392E12A%2DD8E4%2D42A1%2D8BDE%2DE7B53847D0A7%7D&dateid=38784%2E3563152083%2D863276633&siteid=mktw&dist=newsfinder

LONDON (MarketWatch) -- The OPEC oil cartel has decided to stick with its output quota, two wire services reported Wednesday, with each report quoting an unnamed delegate. The decision was widely expected. OPEC delegates are still meeting.

[Zynx]

52. Even if they had officially cut output, cheating would have had the same

result.

[UpInArms]

67. April Crude @ $60.70 bbl

10:32 AM ET 3/8/06 APRIL CRUDE DROPS 88C, OR 1.4%, TO $60.70.BRL

[UpInArms]

86. April Crude @ $59.90 bbl - April NatGas @ $6.46 mln btus

11:52 AM ET 3/8/06 APRIL CRUDE LAST DOWN $1.68, OR 2.7%, AT $59.90/BRL

11:52 AM ET 3/8/06 APRIL NATURAL GAS DROPS 21.8C, OR 3.3%, TO $6.46/MLN BTUS

[ozymandius]

12. Interest rates close to right after last hike: Fed

WASHINGTON (Reuters) - Federal Reserve officials felt a 14th straight increase in interest rates last month put borrowing costs near where they needed to be, but agreed they could not rule out more hikes, given inflation risks.

"Although the stance of policy seemed close to where it needed to be given the current outlook, some further policy firming might be needed to keep inflation pressures contained and the risks to price stability and sustainable economic growth roughly in balance," minutes from the Fed's January 31 policy-setting meeting released on Tuesday said.

The minutes said some officials believed "somewhat" higher than desired readings on core inflation and inflation expectations reinforced the idea that further rate increases might be necessary.

more...

[ozymandius]

13. Wall Street seen opening lower as Big Board debuts

LONDON (Reuters) - U.S. stock futures were pointing to a lower opening for Wall Street on Wednesday, with worries over interest rate weighing as the world's biggest stock market prepared for the listing of the 213-year-old Big Board (NYSE:NYX - news).

By 1135 GMT, U.S. stock futures were pointing to opening 0.1 percent lower for the three main indexes .

Amid huge media interest, the
New York Stock Exchange -- valued at $10.5 billion -- starts trading after having completed the acquisition of electronic rival Archipelago (AX.P).

-cut-

"U.S. markets are lacking any clear direction today with no big earnings scheduled, so interest rate worries will remain on the agenda," said Roland Hirschmueller, a trader dealing in U.S. shares at German brokerage Baader in Stuttgart.

more...

[UpInArms]

23. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DX

Last trade 90.58 Change -0.08 (-0.09%)

Dollar Skyrockets As Traders Front Run Payrolls Report

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/7180_dollar_skyrockets_as_traders_front_run_payrolls.html

US Dollar
In two days, the EUR/USD erased nearly all of the past month’s gains. With expectations continuing to build up for an extremely strong non-farm payrolls report, traders are either squaring Euro shorts or buying up dollars in anticipation of a good number. The latest rally today was triggered by comments from Federal Reserve President Poole who argued that if economic data is consistently strong over the next few months, then the Fed may have to increase rates more aggressively. On the housing market, he felt that even though housing may be flat to slightly down, he doesn’t feel that it puts the economy in “danger of stalling.” The strong move is particularly questionable given that Poole is a non-voter. Judging from the market’s price action, it is quite clear that traders were looking for a reason to front-run the payrolls report. We mentioned yesterday that the whisper number is as high as 300k, and if the number proves to be that strong, the market will quickly be discounting the possibility of 5.25 percent rates. However aside from jobless claims being strong, other US data has not been as rosy as we would have liked. Just today, productivity growth was revised from -0.6 percent to -0.5 percent. Even though the revision was an improvement, it was far weaker than the market’s -0.1 percent forecast. Consumer credit was also up a mere $3.94 billion in January compared to the market’s $5.0 billion forecast. This follows the weaker home sales figures that we saw last week as well as disappointing consumer confidence, personal spending and personal consumption figures. With little on the US calendar tomorrow, the dollar bullishness in the market is not likely to dissipate. Fed Chairman Bernanke is scheduled to speak, but the topic is on community banking and not the economy or monetary policy. Therefore any hope for a shift in trend will have to be deferred to Thursday, when the trade balance is due for release. Meanwhile the Bank of Canada increased interest rates by a quarter of a point to 3.75 percent. However the CAD weakened despite the move because the Bank of Canada toned down its statement. Citing surprise that the CAD has strengthened to a 14 year high recently, the BoC said that “some modest further increase” in interest rates “may be required.” This compares to their previous statement, which took a harsher stance, saying that further moderate increases “would be required.” The subtle shift from “would” to “may” cemented a near term bottom in USD/CAD.

...more...

[UpInArms]

38. Dollar mixed ahead of trade, jobs reports

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B7237A939%2DAA6D%2D4752%2D8AD7%2D73481EC4172B%7D&dateid=38784%2E3661868982%2D863278503&siteid=mktw&dist=newsfinder

NEW YORK (MarketWatch) - The dollar was lower against the euro early Wednesday ahead of key releases later this week on U.S. trade deficit and nonfarm payrolls. Meanwhile, the yen stabilized following encouraging economic data that showed Japan's bank lending rose 0.2% in February from a year earlier, the first expansion in eight years. Investors remained jittery as the Bank of Japan began re-examining monetary policy in what may be the first major change of direction in five years. At last check, the euro was up 0.2% at $1.1911, while the dollar was up 0.1% at 117.82 yen.

[54anickel]

56. Currency values and interest rates: carried away by the carry trade

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=52175

Currency traders have an infatuation with interest rate differentials. Under the prevailing assumption, currencies issued by countries with high interest rates ought to appreciate against currencies issued by countries with low interest rates. This follows the logic of the carry trade, where the currency procured at low rates is exchanged for the currency deployed at high rates. While this temporarily stimulates demand for the high rate currency, it creates an open short position that only accentuates the fundamentally superior value of the low rate currency. This value rests on the axiom that interest rates and credit risk are inversely related. The market assigns rates in line with this axiom, granting the lowest rate to the debt denominated in the most creditworthy currency. Trading against this axiom amounts to trading against the secular trend and runs the risk of being caught flatfooted by sudden realignments of currency value and credit risk.

snip>

The real interest rate differential between Japan and the US based on money and credit growth, the proper definition of inflation, is consistent with the order of nominal interest rates assigned by the debt market, which also favors Japan. Interest rates on Japanese debt are lower than interest rates on American debt; rates for Swiss and Eurozone debt lie in between. There is only one currency that can be borrowed at an interest rate lower than the yen: gold, whose rate of interest, euphemistically called the leasing rate, is only marginally above zero along the entire rate curve. This interest rate order is also congruent with rates of appreciation against the dollar since currency exchange rates were floated in 1971, with gold rising the most followed by the yen.

The large buildup of an open short position adds to the yen’s appeal as the currency with the lowest nominal interest rate among irredeemable fiat monies and Japan’s status as the world’s largest creditor state. The eventual covering of this position will temporarily exaggerate the yen’s appreciation against the dollar, with the trigger as likely to be a change in risk premiums demanded on US debt as a narrowing of the nominal interest rate differential between the two countries. Risk premiums fluctuate according to perceived credit risk. If investors become concerned over the creditworthiness of US debt issuers, they will demand higher rates, pushing down bond values. The borrowed yen has been used to buy US bonds, and a significant loss of their market value would induce owners to sell and repay outstanding yen loans. Consequently, a devaluation of the dollar against the yen could, in fact, occur in tandem with a widening of the nominal interest rate differential between Japan and the US. Currency traders gawking exclusively at rate spreads wouldn’t even see what hit them.

more...

[UpInArms]

26. U.S. mortgage applications increase last week-MBA (more refi's)

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-08T120050Z_01_NAT002031_RTRIDST_0_ECONOMY-MORTGAGES-URGENT.XML

NEW YORK, March 8 (Reuters) - U.S. mortgage applications rose last week, reflecting an increase in loan refinancing, as interest rates surged to a three-month high, an industry trade group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended March 3 increased 0.7 percent to 575.6 from the previous week's 571.5.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.31 percent, up 0.13 percentage point from the previous week, the highest since the week ended Dec. 2, 2005, when it hit 6.32 percent.

The group's seasonally adjusted index of refinancing applications increased 2.6 percent to 1,614.4 compared with 1,573.5 the previous week.

The MBA's seasonally adjusted purchase mortgage index fell 0.4 percent to 399.0 from the previous week's 400.8. The index was below its year-ago level of 451.7.

...more...

[UpInArms]

28. Consumer Credit Report from yesterday:

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BFDA8617F%2D9C81%2D4190%2D9903%2D97D8DFBB4109%7D&dist=newsfinder&siteid=google&keyword=

WASHINGTON (MarketWatch) -- U.S. consumers took on an extra $3.9 billion in debt in January, pushing total outstanding consumer credit up by 2.2% to $2.16 trillion, the Federal Reserve reported Tuesday.

Revolving debt such as that on credit cards increased by $1.7 billion in January, or an annualized 2.6%.

For December, revolving debt was revised lower, to a decline of 0.86%, or $575 million.

Nonrevolving debt like automobile loans rose by $2.2 billion, or 2% annualized. Read the full report.

Nonrevolving debt for December was revised downward, to a rise of 3.6% versus the previously reported increase of 3.8%.

<snip>

Consumer credit has grown 2.9% in the past year, the lowest year-over-year increase in 13 years.

...more at link...

[AnneD]

98. I am convienced....

that people are refinancing to shift debt burden around and take equity out. There may be some that are in an ARM and are trying to nail down a rate, but I don't think that is a big number. When the housing market starts the downward slide and these folks are upside down in their loans, the economic shit will really hit the fan. Does anyone else think we have a perfect storm brewing? :hide:

[UpInArms]

29. Hewlett-Packard Sued Over Fiorina's Severance Pay

http://www.newsfactor.com/news/HP-Sued-Over-Fiorina-s-Severance-Pay/story.xhtml?story_id=0130016D2TE5

A group of Hewlett Packard Co. shareholders are suing the company, alleging its board broke its own rules by awarding more than $42 million in cash, stock and other benefits to Carleton "Carly" Fiorina after she was dumped as CEO last year.

The complaint, filed late Monday in U.S. District Court in San Jose, depicts the payments to Fiorina as a blatant violation of a board policy adopted in 2003 so the company's severance payments would be limited to 2.99 times an executive's combined salary and annual bonus.

Based on that formula, the suit contends Fiorina's severance package shouldn't have exceeded $16.7 million when HP ousted her 13 months ago after nearly six years in the job. HP paid Fiorina $21.4 million in cash, plus stock worth about $19 million and pension benefits valued at about $2 million the suit said.

<snip>

The suit threatens to put HP in the uncomfortable position of defending the lucrative package given to Fiorina as its new CEO, Mark Hurd, strives to cut more than 15,000 jobs to help boost the Palo Alto-based company's profits.

Since Hurd took over, HP's stock has surged by more than 60 percent to reverse a downturn that occurred under Fiorina -- a flashy leader who defied intense shareholder opposition to engineer a $19 billion takeover of Compaq Computer Corp. in 2002.

...more...

[UpInArms]

31. Refco in chaos after Bennett disclosure, witness claims

http://www.theroyalgazette.com/apps/pbcs.dll/article?AID=/20060307/BUSINESS/103070146

(Bloomberg) – Refco Inc., the bankrupt trader, operated in “chaos” as customers sought to retrieve funds in the days after the company’s former chief executive officer Phillip Bennett disclosed he had hid $430 million in debt, an executive testified. Customers withdrew roughly $600 million from accounts after Bennett in October revealed he had hid the debt and the company said its financial statements couldn’t be relied on, Thomas Yorke, an executive vice president of Refco’s Refco Securities unit, said at a hearing in US Bankruptcy Court in New York.

“The customer calls kept coming in with questions and demands,” Yorke said during the fifth day of hearings on a request by customers to liquidate Refco’s Refco Capital Markets unit.

“It was like nothing we’d ever seen before.

“I would describe it as chaos.”

<snip>

The company eventually placed a moratorium on withdrawals and said Refco Capital owes customers $4.2 billion along with an almost $2 billion shortfall.

...more...

[UpInArms]

32. Enron: The Fall Guy Speaks

http://www.forbes.com/business/2006/03/08/fastow-enron-trial_cz_df_0308fastow.html

New York - Every well-engineered fraud has a fall guy, and at Enron that was supposed to be Andrew Fastow. But in testimony Tuesday against his former bosses, Jeffrey Skilling and Kenneth Lay, Fastow exacted his revenge.

Fastow said he set up partnerships to hide Enron's deteriorating finances at the behest of Skilling, who at one point told him "get me as much of that juice as you can" according to one account of the trial. With tens of millions of dollars in stock options dependent upon keeping Enron's stock price high, Skilling had plenty of reasons to want that juice. So did Lay, who according to the government sold $300 million in Enron stock and in 2000 alone received 769,000 options that would be worthless if the price fell below $47 a share.

Fastow didn't share in the stock-option bonanza at Enron. A relative unknown until he was promoted to chief financial officer in 1998, Fastow didn't even rate a mention as a top officer in Enron's annual proxy reports. That might have made him especially eager to catch up with his superiors--and receptive to what, in retrospect, was a monumentally stupid idea.

<snip>

What many observers forget is that Skilling and Lay spent a large part of the 1990s struggling to convince investors Enron was a winner. They entered into a spectacularly bad natural gas trade in England in the early 1990s that cost the company $440 million to unravel in 1997. Enron's stock performance trailed the Standard & Poor's 500 Index for several years before that.

When Enron began to soar in the late 1990s on volatile energy prices--volatility means more trading, and trading was Enron's lifeblood--Skilling and Lay finally had a chance to cash in. But Enron's investments in other operations, from broadband trading to retail energy, weren't nearly as lucrative as the core natural gas-trading business.

It became clear Enron had to unload its money-losing ventures, but if it sold them at a loss earnings would stall, the stock price would fall and the options would become worthless again. Fastow dusted off an obscure financial tool previously used to sell credit-card receivables to separately capitalized funds (he'd probably learned about it earlier in his career at Continental Bank in Chicago) and morphed it into the infamous LJM, Chewco and Raptor partnerships.

...more...

[UpInArms]

33. Levi Strauss sees lower 1st-qtr sales, oper income

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-08T132437Z_01_WEN2389_RTRIDST_0_TEXTILES-LEVISTRAUSS-OUTLOOK-URGENT.XML

NEW YORK, March 8 (Reuters) - Levi Strauss & Co. (9836.Q: Quote, Profile, Research) said on Wednesday it expects lower first-quarter net sales due to less demand in Europe, the impact of foreign currency exchange rates, and U.S. retailers' cutting their inventory of Levi products.

The company said it expects consolidated net sales to drop 7 percent to 8 percent from a year earlier and to be down 4 percent to 5 percent on a constant-currency basis.

Levi Strauss said operating income in the quarter will likely be down 12 percent to 15 percent as a result of the lower sales and currency exchange impact.

[UpInArms]

35. Derivative traders see Feb US payrolls at 208,000

These jokers are never right - they seem to be on the losing side of guessing too high most of the time - but it said in the forex report that there are even bigger fools guessing it will be around 300,000. :shrug:

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-08T133650Z_01_N08307462_RTRIDST_0_ECONOMY-PAYROLLS-DERIVATIVES.XML

NEW YORK, March 8 (Reuters) - Traders in the first of four derivatives auctions related to this week's U.S. payrolls data bet on Wednesday the report will show U.S. employers added 208,000 non-farm jobs in February -- about what economists expect.

The 208,000-job implied forecast is just shy of the median forecast of a seasonally adjusted 210,000-job gain from a poll of economists conducted by Reuters last week. The Labor Department will released its report on Friday at 8:30 a.m. (1330 GMT).

Wednesday's auction had a concentration of betting around economists' consensus expectations, with traders putting a 30.9-percent probability on a result ranging from 175,000 to 250,000 jobs.

Non-farm payrolls gained a seasonally adjusted 193,000 in January, though the government is likely to revise that figure in Friday's report.

Investors use the auctions to hedge against unwanted surprises in the report. Traders also use the auctions to speculate on the outcome.

...more...

[UpInArms]

36. Union leaders call for Rumsfeld to resign

http://www.kansas.com/mld/kansas/news/nation/14041590.htm

WASHINGTON - Union officials representing more than 200,000 civilian defense workers across the country issued a vote of no-confidence Tuesday in Defense Secretary Donald H. Rumsfeld and called on him to step down.

The resolution, the first time that federal workers have called for a defense secretary to resign, came in response to the Pentagon's decision to appeal a federal judge's ruling last week that blocks controversial new workplace rules for civilian Defense Department workers.

U.S. District Judge Emmet G. Sullivan ruled Feb. 27 that the National Security Personnel System, which Congress approved in 2003, fails to protect collective-bargaining rights, doesn't allow for independent review of labor relations decisions and fails to provide a fair appeals process in disciplinary cases. The American Federation of Government Employees sued last year.

Proponents of the new system say it would provide the Defense Department with greater management flexibility. Critics charge that it's part of an overall Bush administration plan to weaken unions. The personnel system it would replace has been in place for 50 years.

The no-confidence vote came during the American Federation of Government Employees' annual legislative conference. The federation represents 650,000 government employees nationwide.

...more...

[UpInArms]

43. Vermont Town Meetings Vote to Impeach

http://www.thenation.com/blogs/thebeat?bid=1&pid=66746

A single Vermont community's call for the impeachment of President Bush turned into a chorus Tuesday night, with town meetings across southern Vermont echoing the demand that Congress act to remove the president.

As had been expected, voters in the town of Newfane, where the movement began, endorsed impeachment by a resounding margin. The paper ballot vote was 121-29 for the resolution that declared:

<snipping - but worth the reading>

The surprise came from neighboring communities where, inspired by Newfane's example, citizens demanded that their town meetings address the issue. At least three other Vermont towns -- Dummerston, Marlboro and Putney – voted for impeachment resolutions Tuesday night. Dummerston and Putney in floor votes, while Marlboro voted by paper ballot 60-10 for impeachment.

<snip>

U.S. Representative Bernie Sanders, the Vermont independent who has been a fierce critic of the Bush administration, responded to the call from the towns with an acknowledgement that Bush "has been a disaster for our country, and a number of actions that he has taken may very well not have been legal." Yet, despite the fact that more than two dozen House members have cosponsored a resolution calling for the establishment of a select committee that would make recommendations regarding impeachment, Sanders said that Republican control of the House and Senate makes it "impractical to talk about impeachment" at this point.

...more...

There's that "Elephant" in the middle of the room again.

[UpInArms]

37. Texas: Optical Scanners fail to correctly record SAT scores

http://www.nytimes.com/2006/03/08/education/08sat.html?ex=1142485200&en=8d008a90c3e63962&ei=5099&partner=TOPIXNEWS

About 4,000 students who took the SAT last October received test scores that were lower than they should have been — some by as much as 100 points — because of technical problems in the scoring process, the College Board said yesterday.

<snip>

Ms. Coletti said that as the organization reviewed the tests, it realized the errors were not limited to a few students but were "a systemic problem." She said the College Board has had "things like this before, but not of this magnitude."

Ms. Coletti said the problem grew out of the scanning of answer sheets in Texas so that the sheets could be graded by computer. "We spent weeks investigating it," she said, adding that the College Board had then rescanned and rescored every exam from October, in a "time-consuming" procedure.

<snip>

"It looks like a generic 'Dear colleague' letter," she said, describing the four-paragraph letter she had received from the College Board. "Once you realize what the letter is telling you, you are flabbergasted."

...more...

[loudsue]

82. Those must be the same type of "scanners" that count our VOTES!

And, yeah, it's about time people got "flabbergasted" over the possibility of machine "glitches" when it comes to votes, too. It's a no-brainer!

:kick::kick::kick:

[UpInArms]

40. Carlyle Group involved in Dutch Media takeover

http://www.marketwatch.com/News/Story/6N4nlxMRdDFN1LxLF14X33d?siteid=mktw&dist=morenews

LONDON (MarketWatch) -- Dutch media group VNU N.V., which put itself on the block after failing to win shareholder support for its own deal, on Wednesday agreed to be bought by a consortium of firms for $8.9 billion, though the firm admitted its activist shareholders might not warm to the deal.

VNU (NL:38987: news, chart, profile) (VNUVY 32.75, -0.35, -1.1% ), the company that owns Nielsen Media Research and publishes Billboard magazine, said it's agreed to be bought for 7.5 billion euros ($8.9 billion) in cash, or 28.75 euros a share.

The buyer is a consortium of AlpInvest Partners, The Blackstone Group, The Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts & Co. and Thomas H. Lee Partners.

Including assumed debt, the value of the VNU deal is 8.6 billion euros.
CEO Rob Van den Bergh, who previously had announced that he would leave the firm, will now quit upon the completion of the deal, expected at the end of May.
VNU shares advanced 0.2% to 27.40 euros a share in Amsterdam morning trading.

The deal may have disappointed some, after a report in February's Wall Street Journal Europe that shareholders wanted the firm to be split into three.

...more...

[EuroObserver]

42. This offer is not being well received:

Carlyle are just about everywhere, in everything, aren't they?

https://registration.ft.com/registration/barrier?referer=http://news.ft.com/home/europe&location=http%3A//news.ft.com/cms/s/01f63b3e-ae77-11da-b04a-0000779e2340.html

(free reg. if you give details (oh yes). But enough of a summary):

Fidelity jeopardises €7.5bn VNU deal
By Lucy Killgren and Ian Bickerton
Published: March 8 2006 08:50 | Last updated: March 8 2006 13:11

A €7.5bn private equity offer for VNU, the Dutch business information group, was in jeopardy on Wednesday after Fidelity International, one of its biggest shareholders, said it was "unlikely to support this offer."

Fidelity, which owns at least 10 per cent of VNU shares, was one of a group of shareholders instrumental in derailing a $7bn acquisition by VNU in November that triggered the private equity approach.

...more...

[UpInArms]

47. goes back to the Fodder Unit Theory

(Carlyle being involved in every aspect)

http://www.greatchange.org/ov-martin,case_for_sedition.html

The Bush idea was (I remember Jeb used to say this) that, "Look, you hit them in every single hat they wear." That was the idea. He used to call them fodder. You hit the fodder in their hats as Taxpayers. You hit them in their hats as Investors and Savers. You hit them in their hats as Insurance Policy Owners through all these insurance scams his brother was involved in. Then there was, of course, Jeb's International Medical Corporation. Jeb also liked health care scams. But that was the idea the Bushes had, that you take the American taxpayer (which they called "One Fodder Unit," or OFU) and you hit them in every single hat they wear.

I don't know where the term came from, but "One Fodder Unit" became a popular term on the Republican cocktail party circuit in 1985. According to them, each individual American citizen equals One Fodder Unit.

[EuroObserver]

57. Very agricultural. Have they ever seen a fodder-feeder with the bloat?

You just have to stick a knife in them to let all that gas out. :evilgrin:

[UpInArms]

41. Treasury prices lower in the early going

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B75EF956D%2D9EC7%2D43F1%2D8376%2DB1E3B1FC70C7%7D&dateid=38784%2E3755804977%2D863280172&siteid=mktw&dist=newsfinder

NEW YORK (MarketWatch) - Treasury prices were lower early Wednesday, pushing yields higher, after Chicago Federal Reserve President Michael Moskow characterized the economy as strong and indicated the Fed may have to keep lifting rates to fight inflation. The benchmark 10-year Treasury note last was down 5/32 at 98-2/32 with a yield ($TNX 47.40, +0.04, +0.1% ) of 4.746%. Some analysts expect the benchmark yield to approach 5% soon.

[UpInArms]

74. Treasury prices lower ahead of Bernanke

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B67852FDF%2DDE38%2D4764%2DB72C%2DF3E75B9B8D55%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) -- Treasury prices were slightly lower Wednesday morning, pushing yields higher, after two Federal Reserve officials gave upbeat descriptions of the economy, intensifying worries that the central bank may have to keep lifting rates for some time.

The benchmark 10-year Treasury note last was down 3/32 at 98-5/32 with a yield ($TNX 47.34, -0.02, 0.0% ) of 4.736%.

Late Tuesday Chicago Fed President Michael Moskow characterized the economy as strong and indicated the Fed may have to keep lifting rates to fight inflation.
"The latest economic headlines have generally been quite positive," he said, adding that core inflation remains contained.

Moskow's remarks were viewed as yet another indication that U.S. rates are likely to continue to rise.

In another upbeat speech, St. Louis Fed President William Poole said the U.S. housing market should remain strong in 2006 and there is no national housing bubble about to burst.

Investors also are eager to hear a speech that Federal Reserve Chairman Ben Bernanke is scheduled to give at noon.

...more...

[UpInArms]

89. Fed's Bernanke warns on commercial real estate loans

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyid=2006-03-08T170226Z_01_WAT005014_RTRIDST_0_ECONOMY-BERNANKE-URGENT.XML

WASHINGTON, March 8 (Reuters) - U.S. Federal Reserve Chairman Ben Bernanke said on Wednesday community banks should improve the way they manage risks, given a growing reliance on commercial real estate lending and "some easing" in standards for those loans.

"The rapid growth in commercial real estate exposures relative to capital and assets raises the possibility that risk-management practices in community banks may not have kept pace with growing concentrations and may be due for upgrades," Bernanke said in remarks prepared for delivery to a banking conference in Las Vegas.

A text of his remarks, which did not touch on the outlook for the U.S. economy or Fed policy, was made available in Washington.

[UpInArms]

101. Ten-year Treasury yields rise above 2-year yields

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-08T183023Z_01_NYG000139_RTRIDST_0_MARKETS-BONDS-DISINVERSION-URGENT.XML

NEW YORK, March 8 (Reuters) - Yields on 10-year U.S. Treasury debt rose above those on two-year notes on Wednesday for the first time since late January, ending for the moment the yield curve inversion that has commanded the market's focus since late December.

Ten-year yields climbed more than 1 basis point above two-year debt, erasing the inversion that last month had lifted yields on two-year debt as much as 16 basis points above those on 10-year debt.

Inverted yield curves have signaled economic slowdowns and recessions in the past, but Federal Reserve officials have argued that the most recent inversion is different, in part because of heavy global participation in the U.S. bond market, which has distorted traditional yield curve analysis.

Ten-year notes <US10YT=RR> trimmed about 2/32 in price for a yield of 4.736 percent, while two-year notes <US2YT=RR> added about 2/32 to yield 4.725 percent.

[Tace]

44. MOGAMBO GURU: "This Is One Big Freaking Humongous Butterfly"

Richard Daughty, the angriest guy in economics -- World News Trust

The next time you hear anyone say something like, "Ben Bernanke, the new chairman of the Federal Reserve, wants to be known as an inflation fighter," you have my permission to walk up to them, flash your Mogambo Junior Ranger badge (demonstrating your authority), slap their face hard, and say, with a voice dripping with caustic, contemptuous tones, "Ha! In the name of The Mogambo, I officially laugh at you and punish your stupidity, sir or madam!"

The reason for such drastic measures is: 1) that I am really grumpy this week, and 2) Mr. Bernanke has never actually said that he has any interest in being known as someone who controlled inflation, and thus your victim's stupid remark comes at the same time as official inflation (thus, manipulated into a soothing lie) hits 4%, at the same time as the global money supply is surging at 300-400% of the growth in GDP, at the same time as houses are appreciating at 12%, year after year, at the same time as the national debt is at $8.27 trillion dollars!

I know what you are thinking. You roll your eyes and think, "What in the hell does this idiot Mogambo think this old history crap has to do with anything?" Responding to the stinging rebuttal, I swallow my rage and immediately go on to note that more recently, like last freaking week for instance, we have Bernanke himself goosing Total Fed Credit another $4.95 billion. This is the famous "money out of thin air" that we have all heard about. That was last week alone. So, are you happy now? Huh? Are you? Is that recent enough for you, punk? Is it? Look at me when I am yelling at you! Good. I'm glad we got that cleared up. See? I told you I was grumpy.

Anyway, to make matters worse, the Fed bought up, for itself, $2.2 billion in government debt. Hahaha! What a scam! The Fed snaps its fingers and creates $2.2 billion, and then uses it to buy $2.2 billion in government debt! Hahaha! What in the hell can you do but laugh at the sheer audacity! Somehow, a government creating more and more money and spending it is not, for the first time in history, going to turn out to be a BAD thing? And especially one where the money is just paper and computer blips that they can create on a whim? Hahaha!

more

http://worldnewstrust.org/modules/AMS/article.php?storyid=2582

[UpInArms]

45. Fed's Poole the Tool performs head up ass trick

9:10 AM ET 3/8/06 POOLE: SLOWER SPENDING DUE TO HOUSING SLOWDOWN NOT A CONCERN

9:10 AM ET 3/8/06 POOLE EXPECTS SOME SLOWING IN GROWTH OF HOME PRICES

9:10 AM ET 3/8/06 POOLE SAYS INCOME AND JOB GROWTH WILL BOLSTER HOUSING

9:10 AM ET 3/8/06 POOLE EXPECTS HOUSING ACTIVITY TO STAY AT HIGH LEVEL IN '06

9:10 AM ET 3/8/06 FED'S POOLE SEES NO NATION-WIDE U.S. HOUSING BUBBLE

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B3D4BD4AD%2D51A5%2D4718%2D88A8%2D9A568B0E72BC%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - The U.S. housing market should remain strong in 2006 and there is no national housing bubble about to burst, said St. Louis Fed President William Poole on Wednesday.

"My hunch...is that housing activity will stabilize and remain at a high level this year," Poole told the Regional Chamber and Growth Association in St. Louis. Read his text.

Poole said his forecast was based on the expectation that the Fed "will keep underlying inflation low and stable."

He said real household income "will recover nicely due to the waning influence of last year's spike in energy prices.

"Continued healthy job growth will also help keep housing at a high level," Poole said.

Rapid increases in house prices over the past few years have led to much speculation in the media about a price bubble.

Poole said it's nearly impossible to forecast a price bubble.

"Indeed, given that bubbles always burst - if there is no burst there was no bubble - clear advance evidence of a bubble can never exist," Pool said. "If the evidence was clear, then everyone would know about the bubble and forthcoming burst, but then the buying that created the bubble would never occur in the first place," Poole said.

...more...

[EuroObserver]

53. Almost Rumsfeldian in its perverse beauty, this logic:

"Indeed, given that bubbles always burst - if there is no burst there was no bubble - clear advance evidence of a bubble can never exist," Pool said. "If the evidence was clear, then everyone would know about the bubble and forthcoming burst, but then the buying that created the bubble would never occur in the first place," Poole said.

[OrangeCountyDemocrat]

65. What The F&$% Did He Say?

I had to read it a few times to attempt to understand his mumbo jumbo.

[UpInArms]

69. here's what I got

[54anickel]

76. He's not alone - Homeowners Expect Prices to Keep Rising

http://www.latimes.com/business/la-fi-poll8mar08,1,3947082.story?coll=la-headlines-business

Americans remain largely optimistic that home values will keep rising in the next few years, but some are concerned that they won't be able to keep up with their mortgage payments, according to a Los Angeles Times/Bloomberg poll.

More than one-quarter of those who have adjustable-rate mortgages say they aren't sure they'll be able to make their monthly payments if their interest rate goes up. These loans have been particularly popular in California and other states with high housing costs.

Homeowners' views in the new nationwide poll show widespread faith in the real estate market, despite signs that prices and sales are cooling. The median price of existing U.S. homes sold in January was $211,000, down from a record high of $220,000 in August.

In the Times/Bloomberg poll, nearly half of homeowners expected the price of their primary residence to rise 5% to 15% over the next three years. Twenty-five percent expected appreciation of 16% or more in that period.

Just 5% predicted no price increase.

"I think the 'bubble' talk is hyped," said Diane Harvey of Foster City, Calif., in a follow-up interview after the poll. She and her husband, David, have made a business out of buying and selling houses in the Sacramento and Phoenix areas for the last 2 1/2 years.

more...

[UpInArms]

77. National Foreclosure Rate Jumps in January

http://www.nypost.com/business/64750.htm

March 7, 2006 -- Foreclosure rates around the United States are rising from last year as more homeowners are caught in a web of rising interest rates and gimmicky mortgages.

New York City foreclosures jumped 65 percent in January with 2,632 filings this year compared to 1,595 during the same month last year, according to Irvine, Calif.-based RealtyTrac, which watches rates nationwide.

<snip>

The 2005 city total was 20,443 with 0.639 percent of the city households in foreclosure compared to a nationwide rate of 0.732 percent.

Of the five largest metro areas in the nation, New York still has the lowest foreclosure rate.

Ohio, Michigan and Indiana have the highest rates of foreclosure, National Association of Realtors economist, Lawrence Yun, said.

...more...

[EuroObserver]

95. Here's an alternative headline:

"More than a quarter of homeowners fear losing their homes thru inability to keep up payments."

...Depends how you spin it.

[AnneD]

106. I am not prone to seeing the glass

half empty, but how can these stats continue to be glossed over. The NH company that tracked these stats said that the number of forclosures jumped from 28% to 55% in a year. People with ARM's have seen their mortgage payments adjust up to 25-25%. The very reason these folks probably took out an ARM was because they could barely afford the house they bought or their credit was iffy. To me, this is just another indicator that the RE bubble is bust and the economy is going to take a hit. Look at the places of highest foreclosure, Ohio, Michigan, and Indiana. Haven't those places been hit with manufacturing job losses.

[UpInArms]

46. pre-opening blather

09:00 am : S&P futures vs fair value: -3.6. Nasdaq futures vs fair value: -7.5. Futures indications are still pointing towards a lower start for the stock market. Google (GOOG) is another factor that is contributing to the bearish bias. In its 8K filing, the company indicated it said things at its analyst day that were not mean to be communicated externally. Goldman Sachs has today cut its target on the stock, and has lowered its 2006 and 2007 estimates. Google shares are down about 3% in pre-market trade.

08:30 am : S&P futures vs fair value: -3.5. Nasdaq futures vs fair value: -6.0. The cash market continues to head towards a downside open. Aside from interest rates, today's OPEC meeting is weighing on investors' minds. The cartel is expected to leave production quotas unchanged, but there is still an element of uncertainty over what ministers will say with respect to forward-looking production plans. On a related note, the market also awaits the Energy Department's weekly inventory stats, which are due out at 10:30 ET. That data is the only item on today's economic calendar, but there will be some Fed speak. Fed Chairman Bernanke will be speaking about banking, and St. Louis Fed President Poole is scheduled to speak to an economic development group.

07:56 am : S&P futures vs fair value: -2.8. Nasdaq futures vs fair value: -4.5. Versus fair value, futures trade is signaling a lower start for the stock market. There has not been any notable corporate news to excite the market. Consequently, traders continue to ponder the negatives. Interest rates remain in the spotlight, and they've sparked wide-spread selling across foreign markets. At this point, the benchmark 10-year note is off two ticks and yielding 4.73%.

[ozymandius]

48. They're running for safety. And the Nasdaq isn't.

It would not surprise me to see a small boost to the Dow.

[54anickel]

54. Hey UIA - Do you have that link handy to corporate personhood?

I was looking for it yesterday, I found this one, but I don't think it's the same one you have on how it came to be.

http://www.iiipublishing.com/afd/santaclara.html

[UpInArms]

61. here you go:

http://www.bodhitree.com/lectures/hartmann2.html

(about 1/3rd down the page)

In his writings, Jefferson identified three oppressors of humanity that we find throughout history. First, there are warlords, who held power through the use of violence and terror. Secondly, there are theocrats, who claimed that god, or the gods had given them the right to rule. And finally, there are the plutocrats, who belonged to what Jefferson called the "pseudo-aristocracy." They are aristocratic by wealth rather than by birth, and claim power on that basis. Jefferson argued that human beings, having rights, should be protected from domination by any of these three institutions.

The Declaration of Independence explicitly states that we would not have a king, so that is the end of that. The First Amendment to the Constitution rules out having popes to lead us on crusades. We can have popes, but they cannot take part in the government, due to the separation of church and state. That puts an end to theocracy. And interestingly, I found in Jefferson's letters that he wanted to include a ban on commercial monopolies in the Bill of Rights. He wanted to prevent practices such as corporations owning stock in other corporations, or conducting more than one business. So if a corporation was chartered to make railroad cars, it could not also make matchboxes; if they published a newspaper, they could not also make movies, and so forth. In addition, he wanted to limit the life span of a corporation to a productive human life span, which in his estimation was forty years.

Jefferson fought very hard to include these principles in the constitution, but without success. His opponents included Alexander Hamilton, who had a vision of America as a commercial powerhouse; his Federalist party, which Jefferson called the party of the well-born and the well-bred was beholden to the moneyed interests of North America. The Federalists believed that commercial monopolies would help build the country, so Jefferson's compromise was to allow small monopolies, provided that they were tightly regulated. This was accomplished by giving states the absolute power to create corporations, and as a result, the word "corporation" cannot be found in the Constitution. All private corporations were to be chartered at the state level, so that citizens of the states could keep the corporations under control. And in fact, from the founding of the United States until 1886, corporations had a limited life span of anywhere from ten to forty years.

Under state laws, corporations were established to serve the local community, by making matchbooks, drilling for oil, or whatever. The state attorney general would verify each year that corporations were serving this specified purpose, and if they were not, they would lose their charter. Almost every state had a "bribery and influencing law." For example, this law in the State of Wisconsin up until the 1880s said, "It is a felony for any person to speak with any legislator with an attempt to influencing legislation on behalf of or to further the interests of a corporation. It is a felony for any person to give money to a political party, a political candidate or any political group on behalf of a corporation with an intent to influence legislation, and it is a felony for a person to publish any form of advertising or public pronouncement on behalf of a politician or to influence legislation that is paid for by a corporation." You could go to jail for five years if you did these things.

So, originally, corporations had no First Amendment rights to free speech; they just had certain privileges. Human beings had rights, while it was up to states and local communities to determine what corporations could do. For instance, there were communities that wrote laws to encourage and help small entrepreneurial businesses by restricting out-of-state, predatory corporations. The people in a given community decided what they would allow in terms of business activity, and that was that, based on the Constitution.

<snip>

So I went to Paul, the librarian, and said, "This ruling you gave me doesn't say that corporations are persons." He answered, "That's interesting - did you read the head note, the commentary on the case?" Then he showed me an introductory page of small boldface type, and the first sentence states, "Corporations are persons under the 14th Amendment and therefore entitled to equal protection under the law." I said, "That's interesting - it's not in the decision. What is this?" He answered, "That's the commentary on the decision written by the Clerk of the Court, the Court's reporter." "It doesn't say what the decision says," I told him, and he replied, "I'm not a lawyer. You need to ask a lawyer about that." So, I paid my seventy cents and made some copies.

...more...

[54anickel]

68. That's the one! Thanks UIA. It came up in yesterday's SMW thread

and the link I posted didn't cover the birth of corporate personhood as well as this one.

[UpInArms]

50. Gold futures extend slide - $544.70 oz

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B4258BA7F%2D6775%2D40AC%2D8758%2D767D66AF72C8%7D&dateid=38784%2E395793912%2D863283720&siteid=mktw&dist=newsfinder

NEW YORK (MarketWatch) -- Gold futures extended losses in electronic trading Wednesday, to the lowest prices seen in three weeks. The April contract was down $9.80 at $544.70, and has now lost $25.70 since last Thursday, with market participants pointing to optimism that the crisis over Iran's nuclear-research program could be resolved without U.N. Security Council intervention.

[OrangeCountyDemocrat]

70. More Market Participants Take Drugs....

"market participants pointing to optimism that the crisis over Iran's nuclear-research program could be resolved without U.N. Security Council intervention."

Maybe these same market participants would be willing to buy this bridge in Iraq that I have for sale. They seem to be under the impression that normal and rational individuals are in control of things. Didn't the U.S. already take about 10 seconds yesterday before rejecting Iran's proposal?

This Retarded U.S. society is way past pissing me off. This is just ridiculous. Well....at least I can make money in the long run thanks to their idiotic ideas about resolving disputes through diplomacy. Iran will be attacked by the end of the year, and then these same "market participants" can wonder why they were wrong yet again.

:rofl:

[54anickel]

78. China Liberalising the gold market - a little more

http://www.321gold.com/editorials/phillips/phillips030806.html

snip>

Recently we made a comment that China's liberalising of the gold market there was not nearly what it seemed. We highlighted this by saying that when regional prices for gold had dropped in line with Shanghai prices of gold the liberalisation of the Chinese market would be complete. We hold to this view. However, China has started down that road. This is not their objective though!

We see China's action as reflecting the nation's preparations for the monetary system of China within the global monetary system and in the light of the dangers to that system that lie ahead. In China we see a pragmatic approach to the future, without the domination of the developed world. Imagine now you are collecting masses of U.S. $s. You know the future for the $ is dubious at best. You want to accumulate gold, but the market will whip up the prices on your approach, so what do you do? Surely you will do your best to keep those surplus $s away from your internal currency and try to re-export them as investments. This is what China is doing, so the present moves to liberalise gold in China has to be seen as an attempt to duck the damaging future of the $, as far as they are able to. In moves to that end, last week saw these changes:

The Bank of China will permit investors to buy and sell gold for the U.S$
THE Bank of China, the country's biggest foreign currency lender, plans to allow investors to buy and sell gold using their U.S. $ accounts. This is an indirect way for China to buy gold for its reserves on top of any plans they have to buy direct into their reserves .

snip>

China Leads From The Front By Doubling Its Gold Reserves This Year
Amazingly the National Development and Reform Commission has stated that China intends to more than double its gold reserves to 1,270 tonnes this year. Why did it publicize this before the event we ask ourselves? But then why do European Central Banks publicize their selling programmes? Clearly this takes the surprise out of their dealings and gives them a better chance to buy gold without the market sending the prices into the sky. You may think that another 650 tonnes is not a large amount, but to put it in context it is 150 tonnes more than the 'ceiling' the Central Bank Gold Agreement signatories have set themselves this year and for the next three years thereafter, annually.

more...

[UpInArms]

87. April Gold @ $541.70 oz

11:53 AM ET 3/8/06 APRIL GOLD SINKS $12.80 TO A NEAR 3-WK LOW OF $541.70/OZ

[ozymandius]

51. markets are open for giving you the bidness.

9:32
Dow 10,969.24 -11.45 (-0.10%)
Nasdaq 2,261.19 -7.19 (-0.32%)
S&P 500 1,273.65 -2.23 (-0.17%)
10-Yr Bond 47.42 +0.06 (+0.13%)
NYSE Volume 54,814,000
Nasdaq Volume 74,914,000

[54anickel]

58. Tax refunds on the rise

Refunds may be getting larger, but more people are planning on saving those dollars for a rainy day.

http://money.cnn.com/2006/03/07/pf/taxes/tax_refunds/index.htm

NEW YORK (CNNMoney.com) - Uncle Sam is giving taxpayers an added incentive to getting their taxes done early this year.

In the first release of tax filing statistics this year, the Internal Revenue Service said that the average refund is up nearly 5 percent to $2,480 from $2,371 a year earlier.

But some taxpayers are still dragging their feet to file -- 54 million tax returns have been filed so far this year, down 1.1 percent from this time last year, the IRS said.

According to the latest Principal Financial Well-Being Index, people plan on being more responsible than usual with their refunds.

Fewer workers said they'll splurge on big ticket items (7 percent in 2006 down from 16 percent in 2003) and more people said they would save and invest their refund in 2006 (38 percent, up from 31 percent).

more...

Gee, maybe the foot draggers know they're gonna owe. If people are planning on saving (or paying down more debt) their refunds, what's gonna happen to our consumer driven economy? Oh yeah, that's right, business is gonna pick up the slack this year - for sure this time. :eyes:



IRS: $2 billion in unclaimed refunds...got yours?
Are you one of 1.7 million taxpayers that hasn't filed their 2002 returns?

http://money.cnn.com/2006/02/21/pf/taxes/irs_refunds/index.htm

NEW YORK (CNNMoney.com) - Never filed a tax return for 2002? Maybe you should -- you could be neglecting a sizeable refund.

According to the IRS, 1.7 million tardy taxpayers are due more than $2 billion in unclaimed refunds.

But in order to get your hands on that chunk of change, you have to file that 2002 return by April 17. "We want people to get the refunds they're entitled to," IRS Commissioner Mark Everson said in a statement. "We urge taxpayers to double-check their records before the April 17th deadline. Taxpayers can't get a refund if they don't file a tax return."

The IRS estimates half of those taxpayers would get over $570.

snip>

The IRS says that any refund will be held if a taxpayer did not file their returns from 2003 or 2004. The tax agency also notes that those individuals who are also delinquent on child support payments, government student loans or who owe back taxes, will be forced to forsake their refund.

more...

[54anickel]

59. Credit ratings industry comes under attack

http://news.ft.com/cms/s/9fc493cc-ae0b-11da-8ffb-0000779e2340.html

The dominance of the credit ratings industry by a handful of companies was attacked on Tuesday before the powerful Senate Banking Committee hearing in Washington.

The hearing followed calls for legislative action that began intensifying after the failures of the main ratings agencies to flag up problems at Enron, WorldCom and Parmalat. More recent examples include Delphi, the carparts maker that went from an investment grade rating in December 2004 to bankruptcy in less than a year.

The Securities and Exchange Commission currently designates Nationally Recognised Statistical Rating Organisations using unspecified criteria. Only ratings supplied by an NRSRO are valid in the context of laws and regulations involving credit ratings, giving NRSROs huge influence.

Two agencies, Standard & Poor’s and Moody’s Investors Service, dominate the ratings industry, with Fitch Ratings third. Only five groups, including AM Best and Canada’s Dominion Bond Rating Service, boast NRSRO status.

Senator Richard Shelby, chair of the Senate committee, said: “It is quite clear that the US Congress has a decision to make regarding this essentially self-regulated yet non-competitive industry with duopoly profits. These entities wield extraordinary power in their role as gatekeepers to the bond markets.”

more...

[OrangeCountyDemocrat]

72. What Decision?

“It is quite clear that the US Congress has a decision to make regarding this essentially self-regulated yet non-competitive industry with duopoly profits. These entities wield extraordinary power in their role as gatekeepers to the bond markets.”

Sounds a lot like the U.S. government. Does this guy really think that anything is going to change? The government is essentially self-regulated(by the repubs), and is non-competitive(since they control all 3 branches), and have duopoly profits(they make money on everything they touch....for themselves of course....see Dubai ports deal).

How do these idiots get in charge?

[54anickel]

75. I thought the same thing when I read it - nothing will come of it, or it

will actually make matters worse with some inevitable loop hole built into the regulation (that in reality will be written by lobbyists for the industry).

[EuroObserver]

100. Let Carlyle take this over. n/t

[UpInArms]

102. already there

http://www.timesonline.co.uk/article/0,,2095-2025096,00.html

February 05, 2006

Americans in £6bn Experian buyout move
Mark Kleinman


TWO American private-equity giants are assembling a £6 billion bid for Experian, the business and information-services group that is expected to be demerged from GUS this year.

Hellman & Friedman and Kohlberg Kravis Roberts (KKR) are in the early stages of putting together an offer and have approached banks about advising on and financing a potential deal.

The two buyout specialists are keen to sign up other private-equity firms to join them in writing what would amount to one of the largest leveraged-buyout cheques ever signed in Britain.

A recent Deutsche Bank research note suggested that a separate American listing for Experian could value the business as high as £6.8 billion.

Sources close to the discussions were cautious, pointing out that a firm bid for Experian might not materialise from private-equity groups and that any formal offer to GUS or Experian was still some months away.

<snip>

Hellman & Friedman and KKR are also members of the private-equity consortium bidding for the Dutch business-information group VNU. The other partners in that deal include Blackstone, Carlyle Group, Permira and Thomas H Lee.

...more...

Experian is what was formerly known as TRW

[UpInArms]

64. Fitch may downgrade 17 CDOs with Dana exposure

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-08T152502Z_01_N08480020_RTRIDST_0_AUTOS-DANA-FITCH.XML

NEW YORK, March 8 (Reuters) - Fitch Ratings on Wednesday said it may downgrade its ratings on 17 collateralized debt obligation tranches because of their exposure to bankrupt auto parts supplier Dana Corp. <DCNAQ.PQ>

Dana filed for Chapter 11 protection on Friday, the fourth auto parts supplier to file in two years, citing general industry financial deterioration and its inability to renew or expand it credit facilities in a timely manner.

Fitch said it will decide whether to downgrade the 17 CDO tranches, or segments, coming from six deals, once final valuations for Dana in each transaction are made available.

Fitch has rated a total of 31 tranches from 18 European CDOs, and 177 tranches from 42 U.S. deals that have exposure to Dana, totalling around 1.63 billion euros ($1.97 billion).

Collateralized debt obligations, or CDOs, are portfolios of bonds, loans, asset-backed or other securities. Investors can buy bonds backed by the portfolios, and choose among different options for how much risk to take -- and how big a yield to earn.

Let the game of Hot Potato begin!

[UpInArms]

71. 10:40 EST mixed with blather

Dow 10,985.97 +5.28 (+0.05%)
Nasdaq 2,265.54 -2.84 (-0.13%)
S&P 500 1,276.30 +0.42 (+0.03%)
10-Yr Bond 4.738 +0.02 (+0.04%)

NYSE Volume 568,665,000
Nasdaq Volume 541,674,000

10:30 am : The indices continue to trend in negative territory, but they have managed to improve somewhat. Energy has reversed course, and the sector now sports a 0.6% gain that is helping to limit the market's decline. Crude, as well as other commodity prices, still trends substantially lower. However, it appears that bargain hunters are focusing on the Energy sector at this point. Storage and transport stocks, led by Williams Companies (WMB 20.13 +0.72), are faring best. Seven of the ten sectors remain submerged, though, and are offsetting the gains offered by Energy and Consumer Staples (+0.4%). DJ30 -8.73 NASDAQ -6.45 SP500 -1.21 NASDAQ Dec/Adv/Vol 1659/971/402.7 mln NYSE Dec/Adv/Vol 1869/949/262.2 mln

09:55 am : Pressured by eight of the ten economic sectors, the indices remain lower. The Materials sector (-1.5%) is faring worst, and Energy (-0.7%) is weighing most heavily. Commodity prices are down across the board. OPEC's decision to leave production unchanged at this point has helped extend selling across the energy complex. The cartel has agreed to keep quotas at 28 million barrels per day due to high oil prices and concerns over Nigeria and Iran. Crude is 0.9% lower at $61.04 per barrel; gasoline is down 1.6%, heating oil is off 1.5%, and natural gas has decline 0.8%. Metals are substantially lower, with silver and aluminum down nearly 4% each. Investors continue to turn towards some more defensive areas of the market, and the Consumer Staples sector (+0.3%) is leading again today.DJ30 -23.38 NASDAQ -9.85 SP500 -3.58 NASDAQ Dec/Adv/Vol 1640/746/166.9 mln NYSE Dec/Adv/Vol 1811/631 /59.6 mln

[54anickel]

73. Foreigners can falter on U.S. investments

http://www.usatoday.com/money/world/2006-03-07-foreign-investors-usat_x.htm

American investors have a significantly better track record making profitable foreign investments than do foreigners buying into the USA.

From 1982 to 2004, U.S. corporations earned an annual average return of 7.6% from their foreign subsidiaries — much higher than the 2.2% that foreign multinationals received from their operations in the USA, according to a Congressional Budget Office study.

snip>

Whatever the political issues involved, foreign investors often stumble over the buy-low, sell-high basics. In the late 1980s, Japanese purchasers provoked public fears in the USA of a loss of economic sovereignty when they snapped up landmark properties.

But they wildly overpaid. In the 1990s, the Japanese owners of both Rockefeller Center in New York and the famed Pebble Beach golf course in California ended up filing for bankruptcy protection.

Today, Chinese corporations stepping out on the world stage for the first time might be repeating the error. Some free trade supporters say foreigners' habit of paying too much for American assets argues against erecting new barriers to such investment.

"It's like a Vegas casino. If you see an inexperienced gambler come in, you comp his room. You don't chase him out," says Philip Swagel, a former Bush administration economist.

more...

[ozymandius]

79. 11:05 numbers and blather

Dow 10,964.93 -15.76 (-0.14%)
Nasdaq 2,258.68 -9.70 (-0.43%)
S&P 500 1,273.79 -2.09 (-0.16%)
10-Yr Bond 47.36 0.00 (0.00%)
NYSE Volume 727,406,000
Nasdaq Volume 689,531,000

10:55 am : The Energy Department recently released its latest inventory report. Due to a much better than anticipated build in crude oil supply, the market initially improved. The Dow and the S&P have since sunk back into the red, however. With respect to the data, crude inventory rose 6.76 million barrels last week - versus the 1.6 million build that analysts had projected. Gasoline and distillates supplies both declined more than had been expected, but the build in crude is overshadowing those drawdowns. The price of crude spiked lower upon the data's immediate release, and is currently choppy. Presently, it's 1.8% lower at $60.50 per barrel. That is supportive for the broader market, and couples with the OPEC decision in tempering near-term supply concerns. At the same time, the data has dampened buying across the Energy sector (+0.1%). As a result, spirited leadership is now lacking. DJ30 -6.33 NASDAQ -9.26 SP500 -1.34 NASDAQ Dec/Adv/Vol 1626/1093/556.7 mln NYSE Dec/Adv/Vol 1885/1035/386.7 mln

[54anickel]

80. Investor: Beware

http://www.iht.com/articles/2006/03/07/opinion/edwagner.php#


MANILA Borrow and spend fiscal policies are very much in vogue among governments and consumers, the global housing bubble has reached unprecedented proportions, and many of the world's stock markets are so hyperinflated that investors seem to have forgotten the basic law of physics - what goes up must come down.

India's stock market shot up by 42 percent and Malta's rocketed by 60 percent last year, but investors keep pouring money into the markets. This investor frenzy is occurring on the heels of some of the largest corporate bankruptcies and financial boondoggles in history and indicates that investors appear not to have learned much in the process.

Investors appear to believe that for some reason the age of globalization has made the prospect of a global economic meltdown remote, and that the global economy will recover from whatever is thrown its way.

Their thinking is that since the world's economies are so closely linked together, they will all somehow swim, not sink, when the next major shock to the system occurs.

The more logical conclusion, however, is that globalization has made all the world's economies more vulnerable to collective shock.

more...

[54anickel]

81. Conduct Unbecoming of the Commander-In-Chief

This was linked to 321gold. :nuke:

http://www.dahrjamailiraq.com/covering_iraq/archives//000371.php

“These Photos Are Very Disturbing” reads the discretion warning in Dahr Jamail’s recent dispatch reporting the new set of torture images to come out of Iraq. On February 16, 2006, the Australian public broadcaster SBS released the carnal photographs and videos of inhumane treatment inflicted upon Iraqi prisoners at Abu Ghraib in 2003-04.

After viewing the nearly homo-erotic “pornographic” like photos and video clips, one could put an “E” rating—for morally evil-- on this sequel to the 2004 prison abuse scandal. There are many versions as to how this troubling incident happened in an Iraqi chicken coop, guarded by U.S. military foxes, but the origin is the most telling and indisputable.

Seymour M. Hersh wrote in “The Gray Zone,” “The roots of the Abu Ghraib prison scandal lie are not in the criminal inclinations of a few Army reservists but in a decision, approved by… Secretary of Defense Donald Rumsfeld.”1 Called by U.S. black ops in code names (i.e., “Copper Green” in Afghanistan), interrogation of prisoners in Iraq is based on research presented by the late cultural anthropologist Raphael Patai in his 1973 “The Arab Mind.”2

The book, which defined the psychological make-up of Arab peoples, became the bible for how to break them down psychologically and morally. Patai claims Arabs only understand force, and an Arab’s weakness is shame and humiliation. Thus, techniques for coerced sexually explicit humiliation were openly enforced in the prisons, and photographed to the delight of the U.S. MP guards.

big snip>

When 26- year-old, by-the-book West Point graduate, devout Christian and recipient of two Bronze Stars for valor in the war on terror, Captain Ian Fishback heard Rumsfeld try to cover up what he had seen first hand8 as a direct violation of “the letter of the Geneva Convention”, Captain Fishback tried through the military chain of command to make those superiors come clean. After seventeen months of stonewalling by his superiors – a violation of Article 138 – The Soldier’s Right to Complain -- Captain Fishback broke rank and went to Human Rights Watch.

“That’s basic officership, that’s what you learn at West Point. It blows my mind,” said Captain Fishback while giving testimony to the human-rights watchdog group. In an open letter to Senator John McCain, Captain Fishback, accusing the top brass of contributing to murder by refusing to set clear guidelines wrote, “If we abandon our ideals in the face of adversity and aggression, then those ideals were never really in our possession.”

It was reported that an infuriated Rumsfeld order subordinates to go after Captain Fishback, “…either break him or destroy him, and do it quickly.”9

snip>

Some soldiers claim that Article 133 of the Uniform Code of Military Justice (Conduct Unbecoming), is being used to silence from leaking information about military atrocities. The commanding superiors argument is that it’s meant to suppress dissent in the ranks, but the forced silence of military personnel should not be taken as an endorsement that soldiers aren’t in disagreement with the Bush administration. According to a recent Zogby poll, 72% of U.S. soldiers in Iraq want to leave12.

more....

Silence the truth in the name of National Security - the press, the whistleblowers, the soldiers. :cry:

[JNelson6563]

83. Wow! Good find!

Horrible info but good find. I'm sure the corporate media will manage to avoid talking about this.

Julie

[UpInArms]

84. Abramoff Interview: Lobbyist Details Relationship With Bush, DeLay, Burns

http://thinkprogress.org/2006/03/08/abramoff-vanity-fair/

Vanity Fair is set to publish an in-depth interview with disgraced lobbyist Jack Abramoff. In excerpts obtained by Matt Drudge, Abramoff offers more details on his extremely close relationship with top conservatives, including some not typically associated with the Abramoff scandals like Ken Mehlman and Newt Gingrich. Some choice quotes:

On President Bush:

President Bush, who claims not to remember having his picture taken with Abramoff. According to Abramoff, at one time, the president joked with Abramoff about his weight lifting past: “What are you benching, buff guy?”

On former Rove deputy Ken Mehlman:

According to documents obtained by Vanity Fair, Mehlman exchanged e-mail with Abramoff, and did him political favors (such as preventing Clinton administration alumnus Allen Stayman from keeping a State Department job), had Sabbath dinner at Abramoff’s house, and offered to pick up Abramoff’s tab at Signatures, Abramoff’s own restaurant.

On Rep. Tom DeLay (R-TX):

Abramoff has “admired Tom DeLay and his family from the first meeting with him,” he tells Margolick. “We would sit and talk about the Bible. We would sit and talk about opera. We would sit and talk about golf,” Abramoff recalls. “I mean, we talked about philosophy and politics.”

...more...

[wordpix2]

97. man, I can't wait to see who he names next

[UpInArms]

85. 11:55 EST running for the exits

Dow 10,925.78 -54.91 (-0.50%)
Nasdaq 2,251.21 -17.17 (-0.76%)
S&P 500 1,269.49 -6.39 (-0.50%)
10-Yr Bond 4.744 +0.08 (+0.17%)

NYSE Volume 1,013,028,000
Nasdaq Volume 959,831,000

11:30 am : The major averages have edged back to where they started the session. Consumer Staples is currently the only area, in terms of the economic sectors, that is lending support. The drug retail industry, up 1.7%, is driving its advance. Both Walgreen (WAG) and CVS (CVS) are faring well today. The former was positively featured in Barron's, and the latter was added to Credit Suisse's focus list. Ultimately, though, the sector's 0.4% gain is muted by weighty declines in the Utilities (-1.1%), Materials (-1.1%), and Industrials (-0.6%) sectors. DJ30 -27.38 NASDAQ -11.39 SP500 -3.40 NASDAQ Dec/Adv/Vol 1818/969/769.1 mln NYSE Dec/Adv/Vol 1995/990/548.9 mln

[UpInArms]

88. The bell tolls for floor brokers

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BEB173263%2D1D45%2D42B8%2DA3D9%2D1767832F6A96%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) -- Floor brokers, whose existence is threatened by an electronic revolution at the New York Stock Exchange, staged a small but effective protest at the Big Board's public debut Wednesday.

Keeping the recent NYSE tradition, the bell-ringing celebration marking the debut of trading in NYSE Group Inc. (NYX 0.00, 0.00, 0.0% ) shares wasn't without controversy. As exchange members and employees rang hand-held bells distributed by the exchange nearly a minute before the market opened, a chorus of boos rose from the floor.

NYSE Group celebrated its first day of trading by opening the floor to the media. Chief Executive John Thain, Chairman Marshall Carter and co-presidents Catherine Kinney and Jerry Putnam stood atop the familiar balcony to mark the occasion. See full story. Watch video link.

The cameras were rolling and 50 journalists gathered from around the world took note as the bells were drowned out by the boo-birds.

The critics were floor brokers. Many of them are unhappy, not only with the fact most of them will not see a financial windfall from the merger and listing, but because the NYSE's embrace of electronic trading threatens to thin their ranks.

...more...

[54anickel]

90. I don't mean to be a bad person, but I just can't feel real sorry for

these people. IT has rendered many of us unemployed and the Street cheered on the increased productivity, efficiency, and progress.

I dislike myself for feeling this way, but boo-fuckin'-hoo.

[EuroObserver]

94. I very much agree with you here.

IT people even programmed themselves out of (many of) their own jobs. I saw it coming back in the 'eighties programming the (very quickly itself 'marketised') London Stock Exchange (LSE). (Just as I saw that most of the brightest, most dedicated tech. students in my UK university days were Chinese, Indian/Pakistani or otherwise Asian). The 'traders', 'brokers', 'market-makers' and most similar in that set, used to treat me and my comrade 'computer nerds' worse than the cleaners sweeping the floor while we went around their offices, once the system had been deployed, ironing out the last few bugs.

Most of their employers were very soon history. And I guess many of their jobs were, too.

Need to get a (new) life. Reeducate yourself (before they reeducate you against your will, I used to explain to those who would listen - especially those willing to share a smoke in some discrete corner of the shed - this is your own Reagan/Thatcherite revolution in action)... Hahaha! The NYSE arrives on the scene very late. :smoke:

[54anickel]

91. Tough Hurdles for Companies in Move Back to New Orleans

First thought that came to my mind was some sort of experimental, corporate owned community. I was reminded of the history of Kohler, WI - all in all not a bad thing back in its day. Then I thought about the old song "I Owe My Soul to the Company Store". Makes you wonder where this might be leading and how it might turn out.My mom's family worked for Shell in Indonesia way back in the 40s and 50s. The employees were pretty happy, the other residents were at first but then became exploited, which was followed by hostility and the following coup (when my family skee-daddled) :shrug:


http://nytimes.com/2006/03/08/national/nationalspecial/08shell.html?hp&ex=1141880400&en=517a42f7bc218865&ei=5094&partner=homepage

NEW ORLEANS, March 7 — When Frank A. Glaviano Sr. told friends that he believed his company, Shell Oil, would return to New Orleans despite the devastation done by Hurricane Katrina, many had a good laugh. Forget it, they said; you are moving to Houston.

After all, more than 100 Shell employees lost their homes when water covered much of the city and the surrounding suburbs. Mail delivery was still unreliable, air service remained thin, and only a small fraction of the previous hospital capacity was back. With Shell's American base in Houston, it seemed to make sense to move its exploration and production unit there from New Orleans.

But Shell, a subsidiary of the Royal Dutch/Shell Group, returned last month to its marbled office building here at One Shell Square, after making an extraordinary investment to do so. It bought $32 million in residential properties in the area — 120 houses and condominiums in all — to lease to its employees. The company owned no residential property in the United States before Hurricane Katrina.

In considering whether to move back its 1,000 employees who worked in New Orleans before the storm, Shell had to monitor closely things like the federal government's commitment to rebuilding the levees and the city's progress in reviving its school system.

"In the end, we decided to do the right thing by the city, the company and our employees," said Mr. Glaviano, the company vice president in charge of Shell's operations here.

more...

[EuroObserver]

105. Shell not prepared to pay to Nigerians, whose lands and lives it blights

what a Nigerian court (after appeal) orders them to, however...

[AnneD]

107. When I lived in NM

I lived in the Mountains near Ruidosa. All around were trophy houses, occupied maybe 2 weeks out of the year. For the rest of the workers-esp those on minimum wage, there was NO affordable housing. Some of the companies were talking about having housing for their low wage employees. It is a real problem in some area of the country. You don't have to go to Nigeria to be treated like a third world worker.

[UpInArms]

92. IBM launches business solution center in Bangalore, India

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B60FF5CD0%2D82B1%2D49C9%2D8EB4%2DCD88595B80E3%7D&dateid=38784%2E5261942245%2D863307007&siteid=mktw&dist=newsfinder

SAN FRANCISCO (MarketWatch) -- International Business Machines Corp. (IBM 80.82, +0.53, +0.7% ) said Wednesday it has launched a new global business solution center in Bangalore, India. The Bangalore center will allow IBM consultants to develop and deploy services in more than 50 business areas such as consumer driven supply chain optimization, banking risk and compliance, and retail merchandising, IBM said.

[UpInArms]

93. NYSE stock ownership could pose a hurdle for fund firms

http://www.marketwatch.com/News/Story/DrkkNV5kMKV2rdr0pP4PXGg?siteid=mktw&dist=morenews

BOSTON (MarketWatch) -- Owning 5% or more of NYSE Group Inc. shares could spell trouble for firms that sell mutual funds because it potentially could prevent their funds from executing trades via the Big Board without Securities and Exchange Commission approval, an advocate for fund shareholders says.

With the NYSE having completed its merger with Archipelago Holdings Inc., trading in shares of NYSE Group (NYX 0.00, 0.00, 0.0% ) began earlier Wednesday. That means that firms like fund giant Fidelity Investments and Goldman Sachs Group Inc. can own shares.

Goldman (GS 141.66, -2.62, -1.8% ) , an investment bank that also offers mutual funds, owned more than 15% of Archipelago's shares as of Dec. 31.

Mercer Bullard, founder and president of Fund Democracy, a non-profit organization that stands up for the interests of fund shareholders, said if a company has an ownership stake in a trading system, it has an incentive to direct trades to it.

"It's clearly a conflict of interest. The question is whether it's going to be subject to the rule for affiliated brokers or whether it would be just prohibited outright as a joint transaction," Bullard said. "If it is a joint transaction, they simply could not send trades to the New York Stock Exchange without SEC approval."

...more...

[Roland99]

96. Lunchtime Faeries to the rescue!!

DJIA 10,981.20 +0.50
Nasdaq 2,263.75 -4.63
S&P 500 1,275.25 -0.63
Russell 2000 719.67 -1.39
CBOE Volatility 12.84 +0.18
30 Yr Bond 4.73 0.00
10 Yr Bond 4.74 0.00

[UpInArms]

104. 2:33 EST Rah! Rah! Siss! Boom! Bah! Faeries Win!

Dow 11,000.64 +19.95 (+0.18%)
Nasdaq 2,270.31 +1.93 (+0.09%)
S&P 500 1,277.65 +1.77 (+0.14%)
10-Yr Bond 4.738 +0.02 (+0.04%)

NYSE Volume 1,727,723,000
Nasdaq Volume 1,556,702,000

2:00 pm : Range-bound trade persists. The price of crude is currently 3.2%, or $1.90, lower and trading at about $59.50 per barrel. The Energy Department's inventory report, which reflected the highest level of crude supply since May of 1999, continues to be the catalyst. Although the extended pullbacks in energy prices do not seem to be having a bullish effect on trade, one area of the market appears to have caught a bid. Retailers, led by the apparel retail (+1.6%) and general merchandise (+1.0%) industries, have attracted some buyers and have taken the Discretionary sector to the flat line. The restaurant industry led by YUM and following better than expected February same-restaurant sales from MCD, is another bright spot today. DJ30 -22.56 NASDAQ -9.74 SP500 -2.82 NASDAQ Dec/Adv/Vol 1771/1162/1.38 bln NYSE Dec/Adv/Vol 2014/1127/1.07 bln

[UpInArms]

109. closing and blather

Dow 11,005.74 +25.05 (+0.23%)
Nasdaq 2,267.46 -0.92 (-0.04%)
S&P 500 1,278.47 +2.59 (+0.20%)
10-Yr Bond 4.734 -0.02 (-0.04%)

NYSE Volume 2,442,872,000
Nasdaq Volume 2,140,553,000

The market was headed for its fifth consecutive day of declines, but buyers stepped in about an hour and a half before the bell. The more defensive areas of the market attracted the most interest, but the late-day buying was relatively broad-based. Along with the Dow and S&P, eight of the ten economic sectors finished positively.

Rising interest rates continue to occupy investors' attention. The yield on the benchmark 10-year note remained at a 20-month high, but bonds were trading in somewhat of a holding pattern ahead of Friday's jobs report and in anticipation of Japan's interest rate decision. Subdued trade within the Treasury market appeared to have relieved stock traders, and the fact that the yield curve exited inversion for the first time since late January was a supportive factor. Rate-sensitive areas rebounded and helped the market rise. Ultimately, though, we expect high yields and impending rate hikes to continue to weigh on sentiment and limit gains.

The Energy market was also in today's spotlight. Crude dropped $1.53 per barrel and closed at $60.05. There were two catalysts. First, OPEC decided to leave production quotas unchanged at 28 million barrels per day, which leaves the cartel's output at a 20-year high. Although the decision was not surprising, there had been some speculation that over supply conditions would prompt a production cut. Geopolitical concerns are dictating policy at this point, and the decision served as a reminder that geopolitical tensions have the ability to affect the market. The Energy Department's inventory report further quelled the market's short-term supply concerns. Last week, crude oil inventory rose more than four times as much as had been expected, to 6.76 million barrels. That marked the highest supply level since May of 1999. Gasoline and distillates inventories fell more than anticipated, but were overshadowed by the crude aspect of the report.

For most of the session, the broader market failed to take a bullish cue in the drop in energy prices. Meanwhile, the Energy sector suffered and weighed heavily on the market. Near the end of the day, bargain hunters fully erased the sectors gain and took it 0.1% higher. One area that did appear to benefit from easing energy prices was retail. Coupled with some restaurant stocks, following solid same-restaurant sales from McDonald's (MCD 35.00 +0.36), retailers helped keep the Discretionary sector (+0.1%) on positive turf. Energy prices weren't the only commodities that fell. Metals extended their sharp pullbacks, and took a toll on the Materials sector (-0.7%).

Given the interest rate environment and expectations for a deceleration in growth, the defensive areas of the market outperformed today. Consumer Staples (+1.0%) again led trading from start to close. Drug retailers and household products, two of our favorite industries within the sector, fared best. Healthcare, another area known for its more defensive attributes, rose 0.6%. Biotech was a bright spot after an FDA advisory panel unanimously recommended the return of the potential blockbuster drug Tysabri.

The Tech sector closed on the flat line. Qualcomm (QCOM 49.60 +1.74) lent considerable upward momentum, on the heels of yesterday's guidance and due to some analyst target hikes today, and several tech bellwethers fared well. Significant pressure from semiconductors and semi equipment stocks was an offsetting factor. Among the laggards was Micron, which announced that it will merge with Lexar Media (LEXR 8.83 +1.74). Plaguing tech stocks again today was Google (GOOG 353.88 -10.57). In a filing with the SEC, the company indicated that it discussed growth projections at its analyst meeting that should not be interpreted as guidance. The indication prompted Goldman Sachs to cut its estimates and price target, and it was a cloud over the Nasdaq today.

Separately, Fed Chairman Bernanke spoke in Las Vegas today. The topic was banking, and did involve policy or the economy. His appearance did not affect trade within either the stock or bond markets today. DJ30 +25.05 NASDAQ -0.13 SP500 +2.73 NASDAQ Dec/Adv/Vol 1578/1443/2.12 bln NYSE Dec/Adv/Vol 1638/1606/1.76 bln

[ozymandius]

110. Jeebus. What a schizophrenic day.

As I either listened to or watched the updates - the Dow bounced from one extreme to another. It doesn't seem healthy at all.

[EuroObserver]

111. Amen to that. Fiat Faerie Intervention Team at full strength

is my take.

[JNelson6563]

112. You are so right

nothing "healthy" about bi-polar behavior. I'm hoping for the best and wincing/flinching at the same time.

Thanks for another informative thread on the doings of the day Marketeers! Always nice to catch up at end of the day. :hi:

Julie