STOCK MARKET WATCH, Friday 28July

[ozymandius]

Friday July 28, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 908 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2043 DAYS
WHERE'S OSAMA BIN-LADEN? 1743 DAYS
DAYS SINCE ENRON COLLAPSE = 1704
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 6
Enron execs conveniently deceased = 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 July 27, 2006

Dow... 11,100.43 -2.08 (-0.02%)
Nasdaq... 2,054.47 -15.99 (-0.77%)
S&P 500... 1,263.20 -5.20 (-0.41%)
Gold future... 645.50 +10.80 (+1.67%)
30-Year Bond 5.11% +0.01 (+0.22%)
10-Yr Bond... 5.04% +0.00 (+0.08%)






GOLD, EURO, YEN, Loonie and Silver


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 Martin Goldberg

UNHEALTHY MIX OF TECHNICAL FACTORS ABOUND

There is an unhealthy mix of technical factors that are speaking volumes about the long term bearish disposition of the stock market and economy. Ignore them at your own risk. You cannot pick your poison but if you could, would you want higher interest rates or higher commodity prices? Since late 2001, the market has offered us a consistent dose of one or the other (and sometimes both). As illustrated in the long term ratio chart of the CRB to 30-year bond price, if it hasn’t been higher interest rates (lower bond prices), it has been higher commodity prices. This is not a healthy situation for the stock market or the economy.

-chart-

What’s worse is that this uptrend is a secular one that is relatively young and linear and does not appear to be changing any time soon. If anything, the linear trend is accelerating.

-cut-

Today’s Market

The action in the Russell 2000 today was perhaps one of the most important in today’s stock market as the Russell attempted to get back to its old uptrend, but appears to have failed. Now it will be important whether the Russell 2000 breaks below the support that has occurred over the last 4 or 5 weeks.

Also teetering on the brink is the Dow transports where an important neckline has been gashed, but not yet slit open. The Point-and-Figure chart tells the story of the dreaded descending double bottom breakdown along with the breaking of a long term trendline. Will this index be “taken in hand”?

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

[ozymandius]

2. Today's Reports

8:30 AM Chain Deflator-Adv. Q2
Briefing Forecast 3.8%
Market Expects 3.4%
Prior 3.1%

8:30 AM Employment Cost Index Q2
Briefing Forecast 0.8%
Market Expects 0.8%
Prior 0.6%

8:30 AM GDP-Adv. Q2
Briefing Forecast 3.0%
Market Expects 3.0%
Prior 5.6%

9:50 AM Mich Sentiment-Rev. Jul
Briefing Forecast 83.0
Market Expects 83.0
Prior 83.0

[54anickel]

38. GDP figures, Wal-Mart, Inco in pre-market spotlight

http://www.marketwatch.com/news/story/story.aspx?guid=%7B9D7F1390-4071-4E5B-A4B5-FA13938B863B%7D

snip>

Breaking news - See Market Pulse for all the latest
The U.S. economy slowed in the second quarter, growing at a real 2.5% annual rate after a torrid 5.6% pace in the first quarter, the Commerce Department reported Friday. Consumer spending weakened, residential investment fell further and business investment slowed to the lowest growth in more than two years. Investments in business equipment and software declined for the first time in three years. Real final sales increased 2.1% annualized, down from 5.6% in the first quarter. Meanwhile, core consumer prices rose 2.9%, the fastest pace in 12 years.

U.S. employment costs increased 0.9% in the second quarter after a 0.6% gain in the first quarter, the Labor Department reported Friday. This is the largest increase since the first quarter of 2005. The increase in the employment cost index was slightly above forecasts.

more...

edit to add:
Rate futures cut Aug Fed hike chance on weak GDP
http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-07-28T123743Z_01_CHB000200_RTRIDST_0_MARKETS-FEDFUNDS-GDP-URGENT.XML

CHICAGO, July 28 (Reuters) - U.S. short-term interest rate futures rose on Friday, cutting the implied potential for another rate hike from the Federal Reserve after a report on U.S. second-quarter GDP growth was below expectations,

Futures show as low as a 30 percent chance that the Federal Open Market Committee will raise interest rates in August, versus 46 percent late on Thursday and the lowest since June 14.

The U.S. Commerce Department said gross domestic product grew at an annualized rate of 2.5 percent in the 2006 second quarter, against Wall Street forecasts for 3.0 percent.

[54anickel]

39. Economy Slows Sharply, Inflation Heats Up

http://biz.yahoo.com/ap/060728/economy.html?.v=9

snip>

The latest snapshot of gross domestic product released by the Commerce Department on Friday showed that the overall pace of economic activity in the April-to-June quarter was less than half that of the January-to-March quarter, when the economy zipped along at a 5.6 percent annual rate, the fastest in 2 1/2 years.

snip>

The 2.5 percent pace was the slowest since a 1.8 percent growth rate in final quarter of 2005, when the economy was suffering fallout from the devastating Gulf Coast hurricanes.

snip>

An inflation gauge closely watched by the Federal Reserve showed that core prices -- excluding food and energy -- jumped by 2.9 percent in the second quarter -- far outside the Fed's comfort zone. That was up from a 2.1 percent increase in the first quarter and marked the highest inflation reading since the third quarter of 1994, when core inflation rose by 3.2 percent.

snip>

In a separate report from the Labor Department, employers' costs to hire and retain workers picked up in the second quarter, a development that also could raise some inflation concerns.

Compensation costs -- including wages and benefits -- rose by 0.9 percent in the April-to-June period, up from a 0.6 percent increase in the first quarter. Economists were calling for a 0.8 percent rise.

Although Federal Reserve Chairman Ben Bernanke said he is concerned about rising inflation, he told Congress last week that the Fed believes moderating economic activity will eventually lessen inflation pressures.

snip>

The report comes as President Bush is getting low marks from the public for his handling of the economy, according to a recent AP-Ipsos poll.

more...

[54anickel]

50. Inflation and a slowing economy

http://www.321gold.com/editorials/bonner/bonner072706.html

"In the past three years America has been enjoying an unusual combination of low inflation and rapid growth," writes Anatole Kaletsky in the London TIMES. "This happy combination cannot continue much longer. In the months ahead, either inflation will continue to accelerate or economic growth will have to slow abruptly, to the point where unemployment starts rising and businesses start going bankrupt."

snip>

Meanwhile, in the Times, Anatole Kaletsky continues:

"The US economy is now clearly slowing, and what started as an orderly retreat in the housing market is turning into a rout. Yet the slowdown in housing and consumption has come too late to prevent a steep increase in inflation. On Wednesday, US government statisticians reported a further jump in inflation to 4.3 per cent. This was the highest inflation rate reported since 1991 (apart from a one-month blip after Hurricane Katrina)."

Kaletsky has been very bullish on the world economy. In fact, he has been engaged in open warfare with such well-known bears as Marc Faber, for example. Now he seems to be reading the papers.

snip>

Kaletsky goes on: "Inflation in America is now running at a truly alarming 4.8 per cent. How can the Fed commit itself to price stability and rapid growth? How can it halve US inflation from 4.5 to 2 per cent without allowing even a brief period of rising unemployment? Professor Bernanke offered no answers.

"If he performs these miracles, he will go down in history as an even greater financial wizard than Alan Greenspan. If he fails, he may be likened to another Bush appointee who promised painless victories without much idea of how to achieve them. Is Ben Bernanke the Fed's Donald Rumsfeld?"

more...

[sendero]

58. This guy "talks"..

... like he believes the real inflation rate is 4.8%. Yes, if you underweight everything that's rising in cost and overweight everything that isn't.

Any economic reporter who parrots the official stats (unemployment, inflation, etc) as though they bear any relationship to reality at all is automatically on my doofus list :)

[54anickel]

54. U.S. employment costs up 0.9% in quarter

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B102A376C%2DAA4D%2D4554%2D8E80%2D396730AA6081%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

WASHINGTON (MarketWatch) -- U.S. compensation costs rose 0.9% in the second quarter, more than economists' expectations, the Labor Department said Friday.

It was the biggest gain in the employment cost index since the first quarter of 2005. Read full government report.

The rise was above expectations. Economists surveyed by MarketWatch had been looking for a 0.8% increase in the employment cost index, considered one of the best measures of labor-cost pressures -- and one closely followed by Federal Reserve policymakers. See Economic Calendar.

Wage and salaries rose 0.9% in the second quarter, on the heels of increasing by 0.7% in the first quarter. This was the largest increase since the first quarter of 2003.

snip>

Employment costs are a major cause of worry for Fed. The U.S. central bank theorizes that inflation can only be sustained if workers force their bosses to pay higher compensation, which is then passed on to customers in the form of increased prices.

But Fed chief Ben Bernanke told Congress earlier this month that wage gains are not necessarily inflationary.

He said employee costs are expected to rise more quickly in coming years in response to the strength of the labor market. The extent to which this creates cost pressures depends on the extent to which they are offset by productivity gains, he said. Read Bernanke's remarks.

Huh? But Ben, are you admitting that all those years when the Fed was preaching "wage-push inflation" they were wrong and just pulling that outta their ass? Or is this one of those "it's different this time" moments? :eyes:

more...

[54anickel]

69. U.S. growth from 2003 through 2005 revised down

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2006-07-28T123444Z_01_N27417162_RTRIDST_0_ECONOMY-GDP-REVISIONS.XML

WASHINGTON, July 28 (Reuters) - The U.S. economy grew a little less briskly in each year from 2003 through 2005 than previously thought, the Commerce Department said on Friday, though inflation did not appear to be surging during the period.

Still, annual revisions to U.S. gross domestic product issued by the Commerce Department confirmed some pickup in prices over the period, likely enough to justify the Federal Reserve's continuing concern about price pressures.

The revised data for the three years, reflecting more complete source data, showed that gross domestic product grew at an average annual rate of 3.2 percent over the period, about 0.3 percentage point less than the government previously calculated.

GDP measures the value of all goods and services produced within U.S. borders and is compiled by the department's Bureau of Economic Analysis.


Specifically, GDP grew 3.2 percent in 2005 instead of 3.5 percent, 3.9 percent in 2004 rather than 4.2 percent and 2.5 percent instead of 2.7 percent in 2003. Commerce said updated data preserved the picture of an economy that was growing steadily after emerging from recession in the third quarter of 2001.

Before the revisions were published, financial market participants speculated they might show a substantial acceleration in prices since the prior year's revisions had done so. The Fed especially watches a measure known as the core personal consumption expenditures (PCE) index, which excludes food and energy, that is part of the report.

more...

[ozymandius]

3. Oil prices rise above $74 per barrel

SINGAPORE - Oil prices rose Friday, a day after the Venezuelan oil minister said
OPEC was powerless to stop price surges caused by geopolitical tensions.

Fighting in the Middle East also made traders fearful of possible supply interruptions in the region, and a U.S. government report showed a surprising decline in natural gas inventories last week as hot weather pushed up demand for electricity.

Light, sweet crude for September delivery was up 16 cents to $74.750 a barrel in midmorning Asian electronic trading on the New York Mercantile Exchange. Prices had closed above $74 Thursday on reports of militant attacks and a pipeline leak that disrupted production in Nigeria.

-cut-

Meanwhile, Shell Petroleum Development Co., a subsidiary of Royal Dutch Shell PLC, said militant attacks and a pipeline leak in Nigeria's oil-rich Niger Delta may prevent it from meeting its production obligations for July and August.

more

[ozymandius]

4. DOT investigating BP valve allegations: paper

NEW YORK (Reuters) - The Department of Transportation said it is investigating allegations by some workers that two safety valves at BP PLC's (BP.L) oil field in Prudhoe Bay, Alaska, were not working at the time of a large oil leak in March, the Wall Street Journal reported on Friday.

The valves are not believed to have played a part in the leak of as much as 267,000 gallons of crude oil and have not resulted in any other pipeline leaks, the article said.

Even so, the valves could represent the potential for a spill hazard as UK-based BP faces regulatory scrutiny of its management of pipelines at Prudhoe Bay and in its North American operations.

BP told the paper that it doesn't know of any threat to public health or to the environment as a result of the allegedly stuck valves, the report said.

more

[ozymandius]

7. Gulf drilling bill advances in Senate

The Senate advanced its bid to open Florida waters to energy exploration, but the House wants to go far further than the Senate.

WASHINGTON - A measure to open a sprawling, gas-rich area of the Gulf of Mexico to drilling appears close to passage in the Senate, despite opposition from senators who fear the move will give the House leverage to erode coastal protections that have barred drilling off Florida's coastline since 1981.

The Senate voted 86-12 on Wednesday to begin debate on the measure.

The Senate bill, which Florida Republican Sen. Mel Martinez helped negotiate, would open up 8.3 million acres in the central Gulf to drilling, while barring rigs at least 125 miles off the Panhandle, 235 miles off the coast of Tampa and nearly 325 miles from Naples.

-cut-

The House bill is far more sweeping and would lift the 25-year congressional moratorium that has barred energy exploration off much of the nation's coast.

http://www.miami.com/mld/miamiherald/news/nation/15131230.htm

[ozymandius]

14. Oil holds around 75 usd level on Nigeria supply woes UPDATE

LONDON (AFX) - Oil prices held around 75 usd as the market remained supported by a major supply outage in Nigeria and escalating violence between Israel and Hezbollah militants in Lebanon.

At 10.30 am, September-dated Brent contracts were up 6 cents at 75.07 usd, after closing up 1.01 usd at 75.01 usd yesterday. Meanwhile, August-dated US light crude futures were down 3 cents at 74.60 usd.

Prices closed up yesterday after Royal Dutch Shell said it does not see a 'significant' amount of production lost due to militant attacks in Nigeria coming on line before the end of the year.

http://www.forbes.com/business/feeds/afx/2006/07/28/afx2911333.html

[54anickel]

32. Exxon reports politically sensitive $10 billion profit

36% rise likely to spark controversy

http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20060728/BUSINESS/607280338

DALLAS — Soaring energy prices catapulted Exxon Mobil, the world's largest publicly traded oil company, to a second-quarter profit of more than $10 billion, and the figure promises to ignite industrywide growth -- and public outrage -- all year.

Royal Dutch Shell topped Exxon Mobil's 36 percent quarterly earnings boost yesterday, posting net income of $7.3 billion, an increase of 40 percent from the year before.

The oil and gas industry's prolific profits come as U.S. motorists pay an average of $3 a gallon at the pump and as Washington lawmakers consider opening to drilling areas of the Gulf of Mexico currently off-limits.

snip>

Across the globe, energy-intensive businesses such as shippers and chemical manufacturers are feeling the pinch from higher prices, while oil exporting nations in the Middle East and beyond are experiencing rapid economic growth.

snip>

"We continue to see demand growth year over year," Henry Hubble, Exxon's vice president of investor relations, told analysts. "We're selling everything we can make."

snip>

Exxon Mobil reported earnings of $1.72 per share in the April-June quarter, compared with $1.20 per share last year.



Exxon Rides Oil and Gas Prices to 36% Gain in Profit
http://www.nytimes.com/2006/07/28/business/worldbusiness/28oil.html?_r=1&adxnnl=1&oref=slogin&ref=business&adxnnlx=1154089251-zwZYOSA4EdxORPt3XlNSGA

snip>

Exxon’s quarterly profit, released a day after ConocoPhillips reported similarly strong results, offers Democrats an attractive midterm election topic that assigns the blame for high prices at the pump to the perceived cozy relationship between the Bush administration and the oil giants.

Soon after Exxon reported its earnings, Representative Edward J. Markey, a Massachusetts Democrat and a member of the House Energy and Commerce Committee, released a caustic statement. “While American families get tipped upside down and have their savings shaken out of their pockets at the gas pump, the Bush-Cheney team devises even more ways to line Big Oil’s pockets,” he said.

Henry Hubble, Exxon’s vice president for investor relations and corporate secretary, acknowledged yesterday in a conference call with analysts “the impact today’s high energy prices have on consumers and family budgets” while “our companies do benefit from these conditions.”

He said the answer was not more taxes on oil profit but efforts to “bring more product to the market and ease supply pressure.”

snip>

The company reported that it repurchased $6.8 billion worth of stock during the quarter, topping its target by $800 million. It said it expected buybacks to rise to $7 billion in the third quarter.

more...

Stock buy backs, push for opening more public lands to drilling, but where are the refinery plans - hummmm?

Stock buybacks can be great for stockholders if done because that is the best use of cash and the price is right. However, watch out of financial slight of hand that seeks to cover up weak ratios or poorly managed employee stock option plans.

from http://stocks.about.com/od/understandingstocks/a/Stockbuyb122204.htm

[stop the bleeding]

34. Crude dips as traders lock in recent gains

Last Update: 8:37 AM ET Jul 28, 2006


NEW YORK (MarketWatch) -- Crude-oil futures fell early Friday as traders locked in some of the commodity's recent gains, although continued violence in the Middle East, and production glitches in Nigeria were expected to keep a floor under prices heading into the weekend.
Crude for September delivery was last down 52 cents at $74.02 a barrel, pulling gasoline, heating oil and natural gas prices lower with it. The contract closed higher for a second session Thursday, with traders focused on problems in Nigeria, where Royal Dutch Shell shut in 180,000 barrels of oil production a day because of a "massive" pipeline leak.



http://www.marketwatch.com/news/story/story.aspx?guid=%7BF0085106-7E47-48FB-BFFC-682335C2ADAF%7D

[Roland99]

40. They couldn't drop a little as I hit the road? Figures!

Catch y'all in a week or so!!


:hi:

[54anickel]

44. Have a great time in the Magic Kindom Roland!!! n/t

[Roland99]

84. Thanks! Cheapest gas I saw was $2.79 north of Columbia, SC

A little over a week ago there were still plenty of spots in SC at about $2.50.




18 more hours to WDW!

In Savannah now. Free wifi. But, enough for the day...


:)

[54anickel]

42. Big Oil: Booming Profits, Climbing Costs

Oil companies' earnings look great thanks to record prices. But those profits mask higher operating costs that may not shrink, even if prices do :nopity:

http://www.businessweek.com/print/investor/content/jul2006/pi20060727_160317.htm

HARDER WORK. Profits are booming, but energy outfits have to work harder—and spend lots more—to keep pulling ever-pricier oil out of the ground. That has fueled a spending competition for services such as drilling equipment, driving up companies' business costs for the past couple years.

And developments in recent months—such as higher taxes and new investment projects—are not the kind that will go away if oil prices fall. Meanwhile, experts are debating whether the global economic demand that's been boosting prices this year can be sustained.

"If oil prices go down or stay the same and you still have cost inflation, then there's the risk that margins will get squeezed in that environment" says Craig Pennington, global-energy portfolio manager at Schroders in London. Although high prices continue helping oil companies so far, Pennington noted that in a weaker environment, high-cost operators experiencing the biggest cost inflation will be among the first to suffer.

Are oil companies using their windfall to grow their businesses—or merely wasting it on inefficient projects? Credit Suisse (CSR ) found in a July 19 report that almost all of the global integrated oil companies had higher return on gross invested capital, or ROGIC (i.e., money earned as a percentage of that invested), in 2005 compared to 2004. The companies that excelled in getting the most bang for their buck included the Austrian oil and gas group OMV and Houston's Marathon Oil (MRO ), which increased their ROGIC year over year by 6% and 5%, respectively.

On the other end of the spectrum, Oslo's Norsk Hydro (NHY ) and San Ramon (Calif.) Chevron (CVX ) both decreased their ROGIC by 2%. (Chevron didn't respond to a request for comment by press time.)

snip>

Norsk Hydro's spokesman Tor Steinum says that even if oil prices drop back to the $30 to $35 per barrel range, recent investments will remain "marginally" profitable. (One of the company's major recent purchases was Houston-based Spinnaker Exploration. Hydro expects to produce more in the Gulf of Mexico in the coming years as a result.)

snip>

HIGHER TAXES. Capital spending isn't the only worry. Taxes are among the newer cost problems that many companies face. Venezuela's President Hugo Chavez has been playing hardball with foreign oil companies this year, hiking their taxes and encouraging other countries to do likewise.

But Chavez isn't the only one to write up a new bill for oil companies....

more...

[54anickel]

64. Oil falls more than $1, supply issues in focus

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=56a1697b-9594-49b2-812b-fd1f07d05cd9

LONDON, July 28 (Reuters) - Oil fell more than a dollar to less than $74 a barrel on Friday, unravelling gains driven by worries about a prolonged cut in Nigerian oil output and violence in the Middle East.

London Brent crude <LCOc1> fell $1.51 to $73.50 a barrel and U.S. light sweet crude <CLc1> dropped $1.24 to $73.30 a barrel by 1423 GMT.

Oil major Royal Dutch Shell's <RDSa.L> Chief Executive Jeroen van der Veer said on Thursday the company did not expect production closed off in Nigeria to make a significant recovery this year.

Shell is losing 653,000 barrels per day (bpd) of the output it operates in Nigeria, most of it because of militant attacks.

Chevron <CVX.N> has also reduced exports by 43,000 bpd.

The total amounts to around a quarter of production from the world's eighth biggest exporter.

snip>

Traders and analysts said that over the past days Nigeria has been a bigger factor for the market than violence in Lebanon, although nagging fears the conflict could draw in some Middle East oil producers have kept the market on edge.

more...

[Eugene]

5. SEC settles with WorldCom execs, says Sullivan has no more money

SEC settles with WorldCom execs, says Sullivan has no more money

By DAVID B. CARUSO
Associated Press Writer

July 27, 2006, 6:56 PM EDT

NEW YORK -- The former chief financial officer who helped perpetrate an $11 billion
accounting fraud at WorldCom won't have to pay a dime to the Securities and
Exchange Commission because his fortune has already been given up, regulators
announced Thursday.

Disgraced WorldCom CFO Scott Sullivan, serving a five-year prison term, had agreed
in a settlement that he owed nearly $13.6 million in penalties for his role in the
scandal at the telecommunications company.

But the SEC said in legal papers filed in a federal court in Manhattan that Sullivan
wouldn't be forced to pay because he is out of money.

-snip-

In a related case, the SEC also announced Thursday that a former WorldCom accountant
has agreed to pay $128,806 to settle charges related to the company's bookkeeping fraud.

-snip-

http://www.newsday.com/news/local/wire/newyork/ny-bc-ny--worldcom-sec0727jul27,0,1505283.story

[ozymandius]

11. Yet we see a new lineup of goons doing this every ten years.

It makes me wonder why they feel their crimes will go undiscovered, untried and unpunished. Is there a corporate rite of passage that I'm missing here?

[cosmicdot]

83. what will Sullivan do have serving a 5-year term?

with no money waiting for him ...

are they sure he's out of money?
have they looked off-shore?

[54anickel]

6. Morning Ozy!!! Yeah, I'm early, though maybe not very awake yet.

Another one of those bouts with insomnia. On my second cup :hangover: Hope it kicks in soon.

[ozymandius]

8. Good morning 54anickel!

:donut: :donut: :donut:

I'm on my first cup o'java. It's good to see you around when so many regulars are taking their leave.

:hi:

BTW, are you doing the Daily Dollar Watch?

[54anickel]

12. Yep, just looking up some stuff for it now. Didn't catch it yesterday -

computer monitor problems. It's being shipped back to the mfg - I'm stuck with this old one until September!!!! Man, I was spoiled by that spacious 20 incher, portrait/landscape baby! It sucks doing graphic projects with this one. Thank goodness I took the extended warranty on that puppy though - I wouldn't be able to afford to replace it anymore!

[ozymandius]

9. European stocks dip on profit taking

European equities dipped on Friday, in spite of some strong earnings and bid speculation, as investors took profits after the two-and-a-half-month highs hit in the previous session.

By mid morning, the FTSE Eurofirst 300 was down 0.2 per cent to 1,332.10, while Frankfurt's Xetra Dax shed 0.4 per cent to 5,634.94. In Paris, the CAC 40 fell 0.6 per cent to 4,971.60 and London's FTSE 100 slipped 0.2 per cent to 5,915.9.

Another slew of corporate earnings kept investors busy on Friday. Thursday marked the busiest day for second-quarter reporting.

After Thursday's close, carmaker Renault continued a big week for auto stocks as it reported falling profits ahead of expectations and maintained its target for full-year operating margin of 2.5 per cent. Like many of its European rivals over the past few days, the company reiterated the negative impact of higher raw materials costs on margins.

more

[ozymandius]

10. London slips after Prudential disappoints

London equites fell back on Friday, tracking Wall Street lower and coming off the two-and-a-half month high achieved during the previous session. Insurers lost ground after interim results from Prudential failed to impress the market.

The FTSE 100 started the day 0.3 per cent lower, at 5,912.9, a decline of 16 points. The mid-cap FTSE 250 was 0.6 per cent weaker at 9,302.9, falling 59 points.

Overnight in New York, the broad-based S&P 500 index shed 0.4 per cent to 1,263.2 after Microsoft failed to provide firm guidance on the delivery date of its new operating system, and weak earnings from the healthcare sector fostered losses.

Back in London, Prudential lost 3.3 per cent to 580p after it reported lower interim profits and pledged to restructure its underperforming UK operations. A pre-tax loss of £39m at its Egg online banking unit also soured sentiment. Other insurers fell in reponse to the numbers. Old Mutual fell 1.2 per cent to 162p, Aviva was 0.3 per cent lower at 725p and Legal & General's poor run continued with a 1 per cent decline to 125¼p.

more

[ozymandius]

13. Week in Economics: Doh!

International trade talks collapsed, China introduced rules to curb some foreign investment and India's central bank made a "pre-emptive strike" to combat inflationary pressures.

When reading of the collapse of the "Doha round" of trade negotiations it's hard not to note how its title resembles the frustrated exclamation of Homer Simpson. "Doh!" indeed.

But while Homer's outburst is a self-admonishment of his inability to master a simple challenge, the intricacy of the task facing the participants of the emergency meeting in Geneva would have tested the mental agility of an Einstein and the dignified empathy of a Mandela.

The only surprising thing about the failure of the talks between India, Brazil, the US, EU, Japan and Australia, was that anyone was surprised they failed. Like the denouement of a polygamous marriage originally formed in the hope of broad personal enrichment, the parties cited irreconcilable differences and went their separate ways.

more tongue-in-cheek reporting

[ozymandius]

15. India applauds Doha's death

NEW DELHI - Setting aside ideological divisions, local observers have endorsed the government's decision to quit the Doha Round of the World Trade Organization (WTO), rather than compromise on the West's agricultural subsidies, which endanger the livelihoods of hundreds of millions of farmers in India and other developing countries.

The Doha Round of talks officially collapsed on Monday in Geneva at a meeting among representatives of the G6 countries (Australia, Brazil, the European Union, Japan, India and the United States) and the WTO director general Pascal Lamy when the US refused to bring down subsidies for its farmers.

The EU was willing to make substantial cuts, but much time was spent discussing the key US demand - the lowering of import duties on agricultural as well as non-agricultural products.

Bitter bickering followed the failure of negotiations. EU trade commissioner Peter Mandelson has been quoted as saying Washington was asking "too much from others in exchange for doing too little themselves - this is not my definition of leadership". The US described these allegations as "false" and "misleading".

http://www.atimes.com/atimes/South_Asia/HG29Df01.html

[ozymandius]

16. Music pirate pays $100m to go legal

THE music industry hailed a victory in the battle against illegal downloading yesterday after forcing one of the world’s most prominent file-sharing sites to pay $100 million in damages and become a legal business.

Kazaa, a longstanding source of illicit music and film downloads, enjoyed 4.2 million simultaneous users worldwide. The “peer-to-peer” network acted as a free jukebox, making files accessible to any computer user. In 2003 Kazaa became the most downloaded software with 239 million.

Sharman Networks, which is based in Australia and is the owner of Kazaa, agreed yesterday to pay the world’s four leading music companies — Universal, SonyBMG, EMI and Warner Music — more than $100 million (£54 million) in compensation for lost sales.

http://www.timesonline.co.uk/article/0,,3-2288888,00.html

[54anickel]

17. Daily Dollar Watch

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

Last trade 85.80 Change -0.05 (-0.06%)

Settle Time 15:00 Open 85.84

Previous Close 85.85 High 85.96

Low 85.75 2006-07-28 05:57:41, 30 min delay

52wk High 92.63 52wk High Date 2005-11-16

52wk Low 83.6 52wk Low Date 2006-05-15


The September Dollar closed unchanged on Thursday and the high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are neutral signaling that sideways to higher prices are possible near-term. If September extends this summer’s rally, the 50% retracement level of this year’s decline crossing at 87.37 is the next upside target. Closes below the 20-day moving average crossing at 85.57 would confirm that a short-term top has been posted.

The September Euro closed lower on Thursday and below the 20-day moving average crossing at 126.393. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends this month’s rally, the reaction high crossing at 128.330 is the next upside target.

snip>

The September Japanese Yen gapped up and closed higher on Thursday but remains below the 20-day moving average crossing at .8720. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at .8720 are needed to confirm that a low has been posted. If September renews last week’s decline, weekly support crossing at .8487 is the next downside target.

Forex - US dollar lower vs yen in Singapore afternoon trade on yuan conjecture
http://www.lse.co.uk/MarketReports.asp?shareprice=&ArticleRef=26301&ArticleHeadline=Forex__US_dollar_lower_vs_yen_in_Singapore_afternoon_trade_on_yuan_conjecture

SINGAPORE (XFN-ASIA) - The US dollar was lower against the yen and euro in afternoon trading here, its weakness against the yen caused by widespread conjecture about another revaluation of the yuan, dealers said.

At 3.44 pm (0744 GMT) here, the dollar was at 115.58 yen, down from 115.76 yen in Tokyo just over 4-1/2 hours earlier. The euro was at 1.2694 usd, up from 1.2681 usd in Tokyo.

The yen's gains were pinned on renewed conjecture that China is preparing to announce further moves to allow the yuan to trade more freely, including a possible widening of the 0.3 pct band in which the yuan is allowed to trade against the dollar.

'Rhetoric associated with China's currency has stepped up significantly over the past few sessions,' said UBS in a currency market note.

This morning, the central parity rate for dollar-yuan was set at another new low of 7.9792 yuan, and promptly fell to 7.9740 yuan before finding some stability around 7.9745-7.9755 yuan.

more...


US Dollar Crumbles.....Lots of charts and graphs at this one
http://www.dailyfx.com/story/dailyfx_reports/daily_technicals/US_Dollar_Crumbles_1153997589641.html


So, what does a currency crisis look like?
Zimbabwe mulls huge devaluation of battered dollar

snip>

The adjustment of the crashing Zimbabwean dollar could boost export earnings and ease foreign currency shortages.

It would, however, unleash a new wave of price increases across the crumbling economy.


The local unit, now the weakest currency in the world, is currently fixed at Z$101195,54 to the US dollar, while the parallel market rate has continued to fall away to Z$500000, making the official rate irrelevant.

The fixed rate has remained unchanged since the last monetary policy statement in January.

The central bank is widely expected to devalue the already enfeebled local currency on Monday during a monetary policy statement that will follow yesterday’s mid-term fiscal policy statement delivered by Finance Minister Herbert Murerwa, in which he promised to resuscitate the ruined economy.

Government has clung to the unrealistic exchange rate as part of its unsuccessful attempt to fight inflation.

Zimbabwe has the highest inflation rate in the world — 1 184,6% year on year for June. This may be compared with SA’s rate of 4,8% and a regional average of about 7%.

more...


The U.S. Dollar: Surprise, Surprise
http://www.elliottwave.com/features/default.aspx?cat=fex&aid=2525


The dollar sure knows how to surprise, doesn’t it? In December 2004, for example, it stood at an all-time low of $1.356 against the euro and Y102.58 against the yen. Yet by the end of 2005 the USD had defied all the “crash and burn” forecasts, to gain 14.6% on the EUR and 15.2% on the JPY. This was its best performance “against the euro and yen since 1999 and 1979 respectively” (The WSJ).

Despite last year’s stellar comeback, most analysts still expected trouble ahead for the buck. A majority of the forex analysts polled by Reuters back in January, for example, said that some time in 2006 the buck’s upward trend would certainly…well, buck. Why? Simple: “bad fundamentals.” The chief one of those, of course, is America’s growing trade deficit.

Oddly, though, when the U.S. government reported two weeks ago that the U.S. trade gap grew some more in June, that didn’t stop the dollar from hitting “three-month peaks against the yen and Swiss franc” shortly after the report was released (Bloomberg). Hmm.

The dollar’s latest “surprise” came yesterday (July 26), when it was reported that the Ifo “business climate index for Germany fell to 105.6 in July from 106.8 in June, a worse-than-expected decline” (AFX News). You’d think the dollar would rally on the news – but no. It lost against the euro instead, sending the EURUSD some 180 pips higher towards the end of trading on Wednesday.

Try counting such “surprises,” and you’ll quickly run out of fingers. From an Elliott wave viewpoint, the explanation for them is simple, though. What moves the forex markets is not robotic reasoning – it’s traders’ emotions, their collective psychology. “Fundamentals” are useless when trying to predict them. Elliott wave analysis, on the other hand, can be very handy. Take a look at this forecast we made Tuesday night, for example – several hours before the EURUSD’s rally began:

more...

[skids]

48. Has anyone run across...

A site posting the major averages weighted by the USDX? Either as a daily chart or just historical. I don't need it, it's JOOC for me.

[54anickel]

68. I'd bet that upInArms has something like that - I don't off the top of my

head. UIA is out for a couple of weeks...maybe someone else has a handy link?

[54anickel]

52. Dollar Declines as U.S. Economic Growth Slowed Last Quarter

http://www.bloomberg.com/apps/news?pid=20601103&sid=aTgmzOYT8Xkg&refer=us

July 28 (Bloomberg) -- The dollar fell to a two-week low against the yen after a government report showed the growth rate of the U.S. economy slowed in the second quarter to less than half the prior three months.

Traders drove the dollar lower for a third straight day versus the yen as the report added to speculation the Federal Reserve will pause after 17 straight interest-rate increases and hold the overnight lending rate between banks at 5.25 percent.

``A rate increase in August is now being taken off the table,'' said Bill Mooney, director of foreign-exchange trading at Societe Generale SA in Montreal. ``A lot of people won't want to hold dollars now.''

The U.S. currency dropped to dropped to 114.99 yen at 9:03 a.m. in New York from 115.78 late yesterday, reaching the lowest since July 12. The dollar weakened to $1.2732 per euro from $1.2699 yesterday. It is down 1.1 percent this week against the yen and 0.3 percent versus the euro.

more...

[54anickel]

53. Treasury Notes Rise as U.S. Growth Slows More Than Forecast

http://www.bloomberg.com/apps/news?pid=20601103&sid=a7CRcvZYq55Q&refer=us

July 28 (Bloomberg) -- U.S. Treasuries rose after a government report showed U.S. economy expanded less than expected in the second quarter, bolstering speculation the Federal Reserve may pause in its cycle of interest rates increases next month.

``It's clear the economy is slowing,'' said Ray Remy, head of fixed income in New York at Daiwa Securities America Inc., before the report. The firm is one of 22 primary dealers that trade directly with the Fed. ``We're at the end'' of the central bank's cycle of 17 straight interest-rate increases, he said.

The yield on the benchmark 10-year note fell 2 basis points, to 5.01 percent as of 8:48 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The price of the 5 1/8 note due May 2016 rose 6/32, or $1.88 per $1,000 bond, to 100 27/32. Yields move inversely to prices.

Interest-rate futures suggest there is a 31 percent chance the Fed will increase rates again on Aug. 8, down from 44 percent before the report.

more...

[54anickel]

66. Today's Phenning - Waiting for the GDP...

http://www.kitcocasey.com/displayArticle.php?id=858

snip>

The most important number being released today is the Core Personal Consumption Price index. This is the gauge of inflation which the Fed most closely monitors. It is expected to have increased from last quarters 2.0% to 2.9%. This would be the largest quarter on quarter increase since 1992. If this core deflator does rise, it could give traders reason to buy dollars as the bets on additional FOMC tightening would increase. The employment cost index is also expected to show an increase, adding to the possibility of another rate hike.

No matter what the numbers show, I think the beige book released earlier this week best shows what the US economy has in store for the rest of the year. The big picture shows a US economy which is slowing in consumer spending and a housing market which is cooling off. That will carry through to weaken growth in the second half. That is basically what Chairman Bernanke said last week. While oil prices will continue to push inflation, the FOMC will have to measure the risk of this inflation with a slowing US economy.

In Chuck's presentations, he speaks of the props holding the US$ up. One of those props has been the US housing market, which has provided consumers with the ability to generate spending without increasing income. I think we all agree that this prop is being slowly pulled out. Another prop for the US $ has been the interest rate differentials the US has enjoyed. With the end of the tightening by the FOMC this second prop will be kicked out from under the dollar. Needless to say, we think the US dollar is in for a hard landing.

Turning to Europe, money-supply growth in the dozen nations sharing the euro slowed in June from the fastest pace in more than three years after the ECB raised interest rates in an attempt to rein in inflation. M3, the ECB's preferred measure of money supply, rose an annual 8.5% after a revised 8.8% in May. While this number was down, the slower pace is unlikely to keep the policy makers from lifting the benchmark lending rate next week as oil prices keep inflation above the central bank's limit. I find it interesting that the ECB's #1 guage of inflation is the M3 numbers. As long time readers know, the US decided to quit announcing the M3 numbers, as they said nobody paid any attention to them. It just calls into question a FOMC which ignores data the ECB uses as their top inflation gauge!

more...

[54anickel]

18. Federal Reserve Follies: What Really Started the Great Depression

(Gold buggy)

http://www.kitco.com/ind/Fekete/jul262006.html

snip>

Condoning the violation of the law

This is a rejoinder to the paper of Richard H.Timberlake of the same title dated August 2005. For the sake of argument I shall adopt Timberlake's own division of the economic collapse into two distinct events: the 1929-1933 Great Contraction and the 1933-1941 Great Depression. They were preceeded by the inflationary monetary regime under the domineering leadership of Benjamin Strong, Governor of the Federal Reserve Bank of New York, between 1922 and 1928. Although Timberlake characterizes it as one animated by a high-minded "stable price level policy," it was an unlawful regime continuously violating the law. Strong introduced illegal "open market operations" for the first time. He established the Open Market Investment Committee of the New York Federal Reserve Bank in 1922 under his own chairmanship. It conducted buying and selling, mostly buying, of Treasury bonds for the account of the Federal Reserve Bank of New York as well as some other Federal Reserve banks. The bonds purchased in the open market were paid for in the form of Federal Reserve notes and deposits created out of nothing for this specific purpose. The advent of open market operations of central banks has changed the landscape of world finance beyond recognition. It made official manipulation of bond and stock prices possible. It turned traditional virtues and vices upside down: thrift into vice, sharp trade practices into virtue.

The monetization of Treasury debt was illegal according to the Federal Reserve Act of 1913. It was not authorized. As a matter of fact, the use of government bonds for the purpose of backing Federal Reserve notes and deposits was explicitly ruled out. Stiff penalties were prescribed in case, and to the extent, the liabilities of a Federal Reserve bank could only be balanced through its portfolio of Treasury paper. Of course, Strong and his cohorts were aware that they were breaking the law. They argued that this policy was not official; that it was designed to meet an emergency; and it would be terminated as soon as the emergency has passed and the international gold standard was made operational once more. No doubt, this was one of those 'emergencies' that was invented to become permanent. Strong himself was instrumental in preventing the gold standard from becoming operational again by sterilizing gold that had come to the United States from European belligerents in payment for war supplies. It would be closer to the truth to say that central bankers have tasted the elixir of power, and liked it. They have become addicted to it. Never mind that it was forbidden fruit for them. They wanted to exhaust the entire cup. They knew that they could manipulate Congress to legalize retroactively the power they had illegally grabbed.

The violation of the law as a substitute for changing it whenever its efficacy is brought into question is a serious matter in any case. But it is especially serious and pernicious when it affects the processes whereby money is created. Legal ends cannot justify illegal means under the law. If an officer of the Federal Reserve can take liberties with the law, then so can anybody else, and the bottom line is counterfeiting the currency. Timberlake passes over the blatant violation of the law in silence, presumably because of his sympathies with the hidden monetary inflation that he (in unison with Milton Friedman and Anna Schwartz) admiringly calls "the Fed's stable price-level policy". Hardly did he notice that what he admired was not monetary policy under Strong, but a mere coincidence: the knack of the speculators who for reasons of their own put the newly created money to work, not in the commodity market where inflation would have been noticed immediately, but in the real estate and the stock markets where it could remain hidden for a longer period of time. In the event the Strong-inflation could not be swept or kept under the rug for too long. It soon showed up in the shape of the Florida real estate bubble (1924) and the stock-market orgy (1929). In addition, it kept interest rates artificially low (and bond prices artificially high) with the effect that the investment-decisions of businessmen became distorted. Again, the concomitant misallocation of economic resources could not be detected immediately. But the writing was on the wall that the chickens would eventually come home to roost, as indeed they did during the Great Depression. To sing a song of praise of the Strong-inflation is not fitting to a monetary economist.

Condoning the violation of the law and blaming the consequences: the Great Contraction of 1929-1933 and the Great Depression of 1933-1941 on the Real Bills Doctrine (RBD) is, to say the least, disingenious. This is not to suggest that the Federal Reserve Act of 1913 was a good law. Most likely it was not, and the United States could have managed, thank you very much, without a central bank in the 20th century, as it did in the 19th. But this is another issue to be investigated separately. Here I want to condemn a procedure whereby the law is violated in order to create a fait accompli, forcing the hands of lawmakers to change it so that, in the end, the violation be justified, nay, rewarded. Once the Strong-inflation induced stock-market speculation was under way, money from abroad was sucked in causing a serious deflation in Europe and elsewhere. Central bankers from around the world started making their regular pilgrimages to New York begging Strong for even more inflation. They had hoped that lower interest rates in America would bail them out. Strong was delighted to comply with their pleading. Thus the violation of the law created international complications and ultimately Congress had to amend the Federal Reserve Act of 1913 so as to legalize the practice of open market operations -- euphemism for monetizing the the public debt. The cure for the ill effects caused by an illegal monetary inflation was to be more monetary inflation, not less, making sure that this time around it was fully licensed and legalized.

Today no economist would think of open market operations as being originally conceived and introduced as an illegal practice, or would dream of suggesting that the explanation for the Great Contraction that followed it can be found in the violation of the law. I hereby take the task upon myself to make this revelation. It has to be stated in unambiguous terms that the Strong-inflation of 1922-1928 celebrated by Irving Fisher, Milton Friedman, Anna Schwartz, Richard Timberlake, and other devotees of the QTM, was illegal. I am of course aware that the grant departments of the Federal Reserve banks will never support research to explore this episode more fully to confirm my accusations. I still hope that incorruptible economists, especially the younger generation, are motivated by the truth rather than bribe money, and will rise to my challenge in doing the necessary research.

more...

[ozymandius]

19. Bye folks!

I've got to get my boy to school. So, per the norm these days, I'll see you after the close of bidness.

Ozy :hi:

[54anickel]

20. Later Ozy. Have a good one!!! eom

[54anickel]

21. Gold Might Peak Early This Fall in October

http://www.kitco.com/ind/Wiegand/jul272006.html

snip>

In the 1986-1987 crash era, the preceding years were disrupted by a bank prime rate of 22% interest in 1981. Volker pressured those rates to correct imbalances, which at the time was very harsh medicine. The years of 1980-1984 nearly collapsed the markets. Business in many regions of the USA at that time, was suffering radical destruction. The year 1987 soon thereafter seized-up and nearly broke down markets completely. The 1986 savings and loan debacle coupled with a major energy price collapse took down hundreds of banks only to be saved by the Resolution Trust Corporation, a government entity formed to buyout and clean up this gigantic mess. Western energy states were in an oil and gas depression along regionally depressed real estate.

We are starting to wonder if all these same misguided events are revisiting markets once again. In 1987 the damage was swift but was swiftly repaired. This time the pendulum is swinging wildly further to both extremes. There is no question volatility is on the rise as trading ranges of some markets reach for the outer limits.

snip>

Do you see the patterns here? Cycles, time, wars, interest rates, depressions and government meddling, all preventing normal market adjustments. Almost like clockwork, the 70 year K-Wave is right on schedule. The year 1929 + 70 years is 1999. The Greenman jumped in with nearly zero interest and gazillions of re-liquification cash to save those markets. There is no doubt he was successful and saved Wall Street. He could not however, save the Nasdaq which took a massive haircut. Now here we are again in 1907, 1937, with 2007 on the horizon.

The other overriding point of view says our forecast of an August interest rate pause and two rate cuts in September and October will provide enough artificial lift to markets. If this is our scenario, stocks might correct mildly and precious metals will rally as the dollar sinks further. We must never forget markets are pushed to the advantage of those in office by those in office.

Today, the Republicans have the reins on political control, the central banks, IMF, New York markets and the U.S. Treasury. Considering these ideas markets can and will be bent to avoid a Dow under 10,000.

Fasten your financial seat belts as the next few months will not be dull. Deduct 70 years from 1907 and we get 1837. That period historically was among the worst in American history. Greenie’s 1999-2000 debacle delay ensures that when the grand finale hits, it will be the mother of all market busters. The rubber band can be stretched only so far before it snaps.

more...

[acmejack]

25. Oh my, he said!

That piece did much more to wake me up than my coffee! My pessimism is further reinforced...

[stop the bleeding]

31. 8:26 Gold futures open down $7.20 at $625.30 an ounce

http://marketwatch.com/

[54anickel]

33. Meanwhile the buck is in rally mode

Last trade 85.99 Change +0.14 (+0.16%)

Settle Time 15:00 Open 85.84

Previous Close 85.85 High 86.03

Low 85.75 2006-07-28 08:06:49, 30 min delay


Gold drops on profit-taking after early gains
http://za.today.reuters.com/news/NewsArticle.aspx?type=businessNews&storyID=2006-07-28T101353Z_01_BAN822707_RTRIDST_0_OZABS-MARKETS-PRECIOUS-20060728.XML

LONDON (Reuters) - Gold drifted lower in Europe on Friday as investors locked in profits ahead of the weekend, but sentiment remained positive on a weaker dollar and firm oil prices.

Spot gold climbed as high as $637.25 an ounce in Asian trade, but ran out of steam before reaching Thursday's one-week high of $640.50. It was quoted at $631.00/632.00 by 0943 GMT, down from $633.50/634.25 in New York the previous day.

"After yesterday's rally I wouldn't be surprised if we'd see some long liquidation ahead of the weekend, which should keep gold within a $625-$635 range today," said Alexander Zumpfe, a trader at Heraeus Metallhandels-Gesellschaft mbH in Germany.

snip>

"Traders will be keeping a close eye on the dollar's reaction to today's GDP (gross domestic product) reading, but despite the ongoing unrest in the Middle East traders seem reluctant to build substantial longs," said James Moore, analyst at TheBullionDesk.com.

The dollar fell towards the previous session's two-week low against the yen and held steady versus the euro ahead of U.S. growth data, due at 1230 GMT, that should clarify the interest rate outlook.

more...

[54anickel]

36. Bubbles caused by cheap cash menace world economy

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2006-07-24T150102Z_01_L24613325_RTRUKOC_0_US-ECONOMY-CASH.xml

FRANKFURT (Reuters) - Call it the weapon of financial destruction. There is so much cheap financing sloshing around the global economy, despite simultaneous interest rate tightening at the world's three major central banks, that some analysts warn that financial bubbles are bound to keep building.

This could threaten a robust global economy, and it would take a gradual global slowdown and higher central bank interest rates for quite some time to avert the problem, say financial and investment analysts.

"Monetary authorities have lost control of money," said Brian Reading, director at Lombard Street Research, a London macroeconomic forecasting company in a research note.

His statement is provocative, and few economists are willing to go quite that far.

But there is widespread concern that global liquidity conditions -- measures of real policy rates versus how much money and credit circulate worldwide to finance growth -- remain very loose despite a bout of central bank tightening.

more...


Don't worry about the Fed getting tough
Worry instead about all the things the Fed got wrong after the dot.com bust, like the housing bubble. There are signs some people are catching on.

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/DontWorryAboutTheFedGettingTough.aspx

Despite the July heat, there was lots of tough-Fed shivering last Wednesday, at least initially. That's because the supposed "core" consumer price index (excluding optionals known as food and energy) printed a tick higher than expected. Apparently, those terrified folks do not understand that this is the same Fed whose easy-money policies made them rich in the first place.

In any case, their fears were soon forgotten, as Fed Boss Ben Bernanke told Congress:

* The Fed must be mindful of past rate increases.

* "Moderation" in economic growth now seems to be under way.

* The Fed must be "flexible" and "ready to adjust."

Clearly, the fixed-income market got the hint, as it reduced the odds of an August rate hike from the current 5.25% for the federal funds rate from 90% earlier that day to just 50%-ish. So, shades of my comment a few weeks ago: "We must remember that the Fed is run on the applause meter. Fed members just want to be loved."

Worrying about the wrong thing
Notwithstanding the alleviation of angst, I continue to believe that worrying about the Fed being tough is exactly the wrong thing to worry about. This, after all, is the Fed that precipitated a stock bubble -- and then a housing bubble to address what ensued. The Fed only knows how to do one thing -- which is to print money and bail out whatever problem it previously created.

more...

[54anickel]

73. Are "gold bugs" Unpatriotic?

http://www.321gold.com/editorials/schiff/schiff072806.html

Those of us in the investment business who advocate individual gold ownership are often accused of being unpatriotic. In part, this charge stems from the dire economic forecasts that often form the basis for such recommendations in the first place. However, our critics often confuse the recognition of a problem and the belief that its inevitable resolution will be painful, with an actual preference for such an outcome in the first place.

I can not speak for everyone, but as a self professed "gold-bug" myself, if there were any way for America's many economic imbalances to be resolved painlessly, of course I would root for that outcome. However, as this is no more possible than a heroin addict kicking the habit without going through withdrawal, it makes no sense to hope for it simply to satisfy someone else's misguided concept of patriotism. In fact, from my perspective, letting my emotions guide my investment recommendations, even under the pretext of patriotism, would be completely irresponsible.

As I have often written, America's problems are in reality no different than the problems facing many of its individual families -- we live beyond our means by consuming more than we produce, financing the difference by borrowing from abroad. Ultimately the enormous accumulation of external liabilities means that Americans will be forced to significantly reduce their future consumption in order to service and repay these debts. In effect, rather than our excess consumption reflecting superior economic performance, it merely evidences our willingness to trade future for present consumption.

Of course, a significant reduction in consumption, which accounts for better than 70% of GDP, means a severe recession. However, recognizing that this recession is absolutely necessary, and preferring that it occur sooner rather than later, does that make me unpatriotic. On the contrary, the further in the future this recession takes place the more painful and disruptive it will be. The bigger the economic hole we dig for ourselves, the more difficult it will be to get out. My forecast however does not imply that I am happy about having to make it. I would certainly have preferred it if Americans had not gotten themselves into this mess in the first place

more...

[54anickel]

22. MONEYization #27 (gold buggy)

http://www.321gold.com/editorials/schmidt/schmidt072706.html

We awoke on Monday morning to HCA being bought by a private equity group. Somehow that and Israeli not launching a full scale invasion of Lebanon caused the U.S. equity market to explode upward. Seems like the last time that happened the NASDAQ Composite shortly afterwards went to a new cycle low. That aside, this HCA transaction, void of any apparent economic benefits, seems indicative of the late stages of a speculative cycle and a near panic reach for returns in the paper asset markets.

Mergers and acquisitions have either of two motivations, economic or financial. The HCA transaction seems to be of the latter, with little obvious economic benefits. Economically motivated transactions, for example, are when a sick company is acquired and reborn. Occasionally a real synergistic effect exists as in the case when a railroad extends its route structure. These transactions have a net positive benefit to the economy. For stakeholders to benefit some economic rationale should exist for the transaction. AMD's same day announcement of the acquisition of ATI may be an example.

Financial transactions do nothing but create fees. Economic benefits are either void, or a secondary concern. In the case of HCA, three firms will combine their $5-6 of equity with about $15 billion of debt to acquire the firm. This $20 billion, rather than enhancing overall economic prospects, appears to do nothing but generate fees for the investment bankers and managers of the private equity firms. In short, to society a net welfare loss may occur. Why would such a transaction occur?

The answer is in the first graph, below. That solid line in the graph is the value of $1 invested in U.S. stocks at the end of November 1999. Today, the value is still about $1. In short and in terms even a CNBC guru should be able to understand, overall no money has been made in U.S. paper equities in almost seven years. At the same time, real assets like Gold have done well. Paper asset groupies have clearly been in the wrong place. The clients of paper asset managers have had their money invested in the wrong markets.

more....

[54anickel]

23. House to Vote on Increase in Minimum Wage

Negotiations in Search of Pre-Recess Compromise on Reform of Private Pension Laws Break Off

http://www.washingtonpost.com/wp-dyn/content/article/2006/07/27/AR2006072701170.html

House Republican leaders, bowing to pressure from their politically embattled moderates, agreed to seek a vote on raising the minimum wage, but House and Senate negotiations on a broad overhaul of the nation's private pension laws broke up last night in intraparty acrimony.

GOP leaders were scrambling yesterday to bolster a thin list of legislative accomplishments before the House recesses tonight for a five-week summer break. But a minimum-wage deal was far from certain, and pension legislation was near collapse. Last night's struggles underscored the divisions in Republican ranks that leaders had hoped to paper over before the August recess.

"We're getting close," insisted Republican Conference Chairman Deborah Pryce (R-Ohio). But, she added, "we want to have something that could actually become law."

The pension package was close, but key Senate Republicans -- seeking to prevent a popular package of tax-cut extensions from being stripped out of the pension bill -- called for a public vote last night on the tax measures' fate. House Republicans had wanted to attach the tax provisions instead to a contentious measure permanently and sharply paring back the estate tax. But House GOP negotiators boycotted the public session, infuriating the senators and jeopardizing a pension bill that has been under fitful negotiation for eight months.

"We should be rising above politics," said Sen. Edward M. Kennedy (D-Mass.). "It is long past time that we get the job of strengthening America's retirement security done -- and get it done right."

more...

[54anickel]

67. House Slates Vote on Raising Minimum Wage

http://abcnews.go.com/Politics/wireStory?id=2247552&page=1

snip>

House Republicans have yet to unveil the specifics of the bill and have been mulling what to add to it to ease the sting on small businesses and other constituencies such as the restaurant lobby. GOP aides and business lobbyists said no final decisions had been made about the specifics of the add-ons. Lawmakers were hoping to vote on the bill by Friday night.

Rep. Howard McKeon, R-Calif., chairman of the House Education and the Workforce Committee, said Thursday that GOP leaders may attach a proposal passed last year that would make it easier for small businesses and the self-employed to band together and buy health insurance plans for employees at a lower cost.

That idea was blasted as a "poison pill" by Democrats and labor unions. The small business health insurance bill exempts new "association health plans" from state regulations requiring insurers to cover treatments such as mental health and maternity care. And opponents fear they would offer inferior prescription drug benefits.

Opponents of the idea also worry that the new health plans would skim healthier workers from traditional plans, thereby increasing the costs and pressures on those plans.

"It's outrageous the Republican Congress can't simply help poor people without doing something for their wealthy contributors," said Rep. Tim Ryan, D-Ohio.

snip>

Lawmakers fear being pounded with 30-second campaign ads over the August recess that would tie Congress' upcoming $3,300 pay increase with Republicans' refusal to raise the minimum wage.

more...

Watch for another screwing of the American working class in those "unveiled specifics". :eyes: :hurts:

[54anickel]

79. Here it is - Republicans tie minimum wage to tax cut (Bastards!)

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2419912

WASHINGTON - Republican leaders are willing to allow the first minimum wage increase in a decade but only if it's coupled with a cut in future inheritance taxes on multimillion-dollar estates, congressional aides said Friday.

A package GOP leaders planned to bring to a vote Friday or Saturday in the House also would renew several popular tax breaks, including a research and development credit for businesses, and deductions for college tuition and state sales taxes, said a spokesman for House Majority Leader John Boehner.

The wage would increase from $5.15 to $7.25 per hour, phased in over the next three years, said Kevin Madden, the aide to Boehner, an Ohio Republican.

The maneuver is aimed at defusing the wage hike as a campaign issue for Democrats while using its popularity to spur enactment of the Republican Party's long-sought goal of permanently cutting taxes on millionaires' estates.

The Senate could take it up next week before leaving on a monthlong recess.

"It's going to be one hell of a rumpus," predicted Eric Ueland, Senate Majority Leader Bill Frist's chief of staff.

more....

http://news.yahoo.com/s/ap/20060728/ap_on_go_co/minimum_wage

[54anickel]

24. FBI raids office of Bristol-Myers CEO: paper

http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-07-28T055604Z_01_N28354744_RTRUKOC_0_US-BRISTOLMYERS-FBI.xml

NEW YORK (Reuters) - Agents for the Federal Bureau of Investigation raided the office of Bristol-Myers Squibb Co. (BMY.N: Quote, Profile, Research) Chief Executive Peter Dolan as part of a criminal antitrust probe, The Wall Street Journal reported on Friday, citing a person familiar with the matter.

Federal officials are probing a settlement that would allow Bristol-Myers to stave off generic competition for best-selling anti-clotting drug Plavix, which Bristol-Meyers sells in the United States for Sanofi-Aventis (SASY.PA: Quote, Profile, Research).

On Thursday, Bristol-Myers said the investigation by the U.S. Justice Department was related to a settlement between Sanofi and generic drugmaker Apotex.

FBI agents, working on behalf of the Justice Department, showed up on Wednesday at the Manhattan headquarters of Bristol-Meyers and left with documents, the paper reported, citing a person familiar with the matter.

bit more....

[54anickel]

26. Nanotech Lures Bankers, VCs With Promise of $1 Trillion Market

http://www.bloomberg.com/apps/news?pid=20601109&sid=ayHbTn8GgpVo&refer=exclusive_to_bloomberg

snip>

Heinrich is experimenting with ways to create semiconductors and data storage devices. Venture capitalists, lured by potential breakthroughs in electronics, medicine and textiles, are heading to the labs in search of inventions based on nanotechnology, the study and manipulation of particles smaller than 100 nanometers. A single nanometer is equal to one-billionth of a meter.

After decades of hype and false starts, the National Science Foundation forecasts that $1 trillion worth of nanotechnology- enabled products will be on the market by 2015. This year, corporations and governments will spend more than $11 billion on nanotechnology research, according to Cientifica, a London-based consulting firm.

VCs are hovering, eager to create startups and then shepherd them to the public markets. Last year, venture firms invested $496.5 million in nanotech-related companies, 21 percent more than in 2004, according to Lux Research, a New York-based firm that studies nanotechnology.

Not a Novelty

``Nanotechnology is no longer just a novelty,'' Lux Chief Executive Officer Peter Hebert says. ``It's working into the industrial food chain.''

Wall Street is wading into nanotech. New York-based investment bank Punk, Ziegel & Co., which focuses on health care and life sciences, and WR Hambrecht & Co., a San Francisco-based investment bank that persuaded Google Inc. to use an Internet auction for its Aug. 18, 2004, initial public offering, are hiring Ph.D.'s to scout developments and advise clients.

more...

[54anickel]

27. Aging grids cited in blackouts

http://www.usatoday.com/money/industries/energy/2006-07-27-power-grid-usat_x.htm

The nation's power system may be showing its age.
Recent heat wave-related blackouts in California and New York are at least partly being blamed on creaky transformers, circuit breakers and cables.

And smaller outages in cities such as Detroit, Chicago and Houston will be investigated to see if aging parts played a role, says Stan Johnson of the North American Electric Reliability Council.

Low investment in interstate transmission lines could lead to more regional blackouts, such as the one that hit the Northeast in August 2003. The trends show the need to pump more money into the power grid to meet demand, federal officials say. That would mean higher consumer rates.

"There is a need to spend more," says Gerry Cauley, vice president of standards for the reliability council.

more...

[54anickel]

28. China mulls freer hand for central bank

http://news.yahoo.com/s/ft/20060728/bs_ft/fto072820060545462359

snip>

Liu Lida said in a little-reported speech to a conference at the weekend that the ability of the People's Bank of China to adjust interest rates on its own would make such decision-making more effective and faster.

"Of course, the decision-making mechanism will be more balanced if a decision of the State Council is needed and the opinions of more ministries are taken into account," said Mr Liu, the head of the monetary policy research department.

"But this may to some also lead to a loss of efficiency; while an immediate adjustment could have very positive impact on the market . . ."

A spokesman for the central bank said Mr Liu's comments as recorded inthe transcript of the conference speech did not accurately represent the bank's views nor those of Mr Liu himself.

However, they do reflect longstanding internal discussion within the central bank and policymaking circles in China about the need to give the PBoC a freer hand in monetary policy, economists in Beijing said.

snip>

The International Monetary Fund, in a staff report last year, said the PBoC needed "more discretion to independently set interest rates".

"While consultation within the government may be beneficial in building support for an interest rate change, policy actions can be unduly delayed," it said.

more...

Looks like a power grab by the CBs of the world. Gotta get the PBoC into their little click. :eyes:

[54anickel]

29. Glut of unsold new homes across US hits record high

http://www.breitbart.com/news/2006/07/27/060727164635.phgh289u.html

The glut of brand new unsold homes for sale across the United States hit a record high in June, a government report showed, as some economists warned of a worsening market in coming months.

The latest data appeared to confirm a cooling trend in the housing market, following a boom and sky-rocketing prices of recent years that have priced many hopeful new home owners out of the market. In recent months, a steady rise in interest rates hikes has prompted a downturn in home buying.

Sales of new US homes declined three percent in June to a weaker-than-anticipated annualized rate of 1.131 million units, the Commerce Department said Thursday.

The drop in new home sales was steeper that most market-watchers had expected. Wall Street economists had only predicted sales to decline to 1.164 million units.

Analysts also zeroed in on the inventory of unsold new homes which leapt to a record high last month.

more....


Home Builders' Bonds Take Tumble 'You Have to Ask Yourself If the Worst is Over or Yet to Come'
http://www.blackenterprise.com/yb/ybopen.asp?section=ybem&story_id=95916726&ID=blackenterprise

Bonds of U.S. home builders, profitable through April, have turned into the biggest losers this year in the market for debt with ratings below investment grade. Debt sold by D.R. Horton, KB Home and other construction companies has fallen an average 3 percent since May 1, saddling investors with losses of about 1.1 percent for this year, including reinvested interest, according to indexes compiled by Merrill Lynch. That is the worst performance of 37 industries tracked by the investment bank. The bonds returned an average 2 percent through April when investors were betting that the housing market would weather higher interest rates. That optimism evaporated as the U.S. Federal Reserve lifted benchmark interest rates in May and June, sending mortgage costs to the highest in more than four years. An index measuring home-builder confidence dropped this month to the lowest level since December 1991.

"You have to ask yourself if the worst is over or yet to come," said Timothy Compan, head of corporate bond strategy at Allegiant Asset Management.

The extra yield, or spread, that investors demand to own home builders' bonds instead of U.S. Treasury securities is widening as the housing market declines. Bonds in the Merrill index yield an average 3.50 percentage points more than government debt, up from 2.25 points in late April.

snip>

Moody's recently lowered its outlook on the company's credit- rating to "stable" from "positive." D.R. Horton said last week that it would sell 50,000 houses in the year that ends Sept. 30, below the 58,000 estimate it gave on April 18. "Every downturn is longer and deeper than people expect," Horton's chief executive, Donald Tomnitz, said Thursday after the company reported the first quarterly loss in its 28-year history. "We are assuming the worst."

more...

[54anickel]

30. Homebuilders start fessing up

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

Several of the homebuilders have reported second quarter earnings over the past week. During the first quarter, most homebuilders started experiencing a challenging market. At the time they were not concerned because the winter is normally a slower period and they felt that activity would rebound during the spring selling season. It has not quite worked out as planned. Orders have continued to drop, while cancellations have increased. Most homebuilders have reduced forward earnings guidance and the tone of the conference calls have definitely changed.

I have included sections of the various conference calls below.

From D.R. Horton:

“…right now I truly believe that there are a lot of fence-sitters out there. They don't have to buy because of the fact that the appreciation is not like it has been over the last two or three years, so if they don't buy today, they're not going to miss an uptick in the house price, so there’s not really much motivation for them to buy unless they really need a home.

“And also we have significantly higher cancellation rates, which all builders are experiencing. So when we look at our fourth quarter, what we're trying to do is give you an absolute bottom line number that we can hit or exceed. And I guess I don't want to get in to any other builders on this conference call, but I get confused when I look at some of the numbers that I'm hearing other builders produce and report, and it reflects margins staying the same in the next two quarters. And that's just not out there, and if it's out there, we'll be glad to be the beneficiary of that, but we're not going to assume that.

snip>

From Ryland:

“The slowdown is broad based but more pronounced in areas that experience significant price appreciation over the last few years In conclusion, conditions in most markets have not improved and buyers remain cautious. While we knew that eventually there would be slowdown in housing, this downturn
happened quicker than expected.

From MDC Holdings

“Our cancellation rate, as we mentioned in the release, is 43%. That's up significantly from 19%. In terms of absolute cancellations, every market except Texas and Colorado was up over where it was last year. And our can rates are up over 1,000BPS in every market except Texas and Utah, primarily due to the high supply of new homes and the competitive environment in all of these markets.

more...

[54anickel]

49. Property Values are Falling! Here's What's Next

http://www.moneyandmarkets.com/press.asp?rls_id=368&cat_id=6

big snip>

The real estate industry would have you believe prices can never fall. Last year, I practically got laughed out of the room when I predicted a dramatic slowdown in housing. But this is no longer some theoretical discussion. It’s real life.

And if you’ve been reading our daily Money and Markets, you shouldn’t be surprised one bit.

Back on January 27, I warned you about a housing bust. And most recently, in "Housing Stocks Plunge! Housing Next!" I told you real estate sales would keep falling, inventories would keep rising, and defaults would keep skyrocketting. My final warning was,
"Prices on a wide variety of
properties are going to
fall in vast swaths of the U.S."

But even though this is now unfolding before your very eyes, some people are still peddling the "soft landing" argument. But they’re missing the rotten foundation that’s below the surface.

Martin and I have been talking about this for quite some time. In our April 2005 Safe Money Report, we wrote,
"Wall Street of the late 1990s was a mucky cesspool ... What no one seems to realize is that it’s happening all over again — only this time, in a sector that’s both bigger and more ominous: Housing and mortgages."

snip>

I’m not trying to scare you. I’m trying to level with you. I’m trying to cut through the garbage you’re getting from self-interested parties, like real estate agencies and mortgage lenders.

In my view, these housing and mortgage conditions have set the stage for ...

* An explosion in the number of borrowers stuck "upside down" — owing more than their homes are worth.

* A dramatic surge in loan delinquencies, losses, and foreclosures.

* Outright bank failures as condo construction loans default, homeowners walk away from residential mortgages, and developers go broke — leaving banks holding worthless construction loans.
Right now, Wall Street doesn’t want to hear it. The homebuilding stocks actually bounced earlier this week on the assumption that this is "as bad as it will get."

And major bank stocks have been rising on the assumption that the Federal Reserve is just about done hiking rates. The big boys think that will lead to a massive, 1995-style rally in bank stocks.

more...

[54anickel]

35. Wal-Mart to Sell Division to Metro, Exiting Germany

http://www.bloomberg.com/apps/news?pid=20601103&sid=a0.hSl9l9yHw&refer=us

July 28 (Bloomberg) -- Wal-Mart Stores Inc., the world's largest retailer, will retreat from Germany by selling its 85 stores to Metro AG at a $1 billion loss, two months after exiting South Korea.

The price of the transaction wasn't disclosed. Wal-Mart will incur the $1 billion pretax loss in the second quarter of fiscal 2007, according to a statement released by the Bentonville, Arkansas-based company today. The German unit generated revenue of about 2 billion euros ($2.54 billion) last year.

Wal-Mart has failed to make money in Germany, Europe's largest economy, where consumer spending is sluggish and closely held Aldi and Lidl dominate. Its U.K. unit, Asda, missed all profit and sales goals last year, and Wal-Mart is leaving South Korea after failing to win customers. Metro, Germany's biggest retailer, is buying the stores to gain scale and increase bargaining power with suppliers.

``I would call it a U-turn strategy,'' said Tim Albrecht, who helps manage the equivalent of approximately $6.3 billion at DWS Investment in Frankfurt. ``Wal-Mart realized that they can't handle the German market, and Metro is getting rid of a competitor while receiving some money in addition.''

snip>

The company may have failed in Germany because it tried to force its U.S. strategies there, according to Tim Attenborough, an analyst at BNP Paribas in London. Wal-Mart, which doesn't allow its workers in the U.S. to have unions, battled with German workers over labor policy issues, culminating in strikes. It also had language barriers to overcome.

more...

[Tace]

41. Shows What Strong Unions Can Do

Looks like they ran Wal-Mart right out of the country with a $1 billion loss.

[54anickel]

37. Stock futures rally on GDP

Week could end with gains as report confirming slowing economy raises hopes of Fed pause next month.

http://money.cnn.com/2006/07/28/markets/stockswatch/index.htm

NEW YORK (CNNMoney.com) -- U.S. stock markets were poised to open higher Friday as investors, seeing signs of an economic slowdown, hope that the Federal Reserve won't raise interest rates in early August.

At 8:45 a.m. ET, Nasdaq and S&P futures pointed to a higher open for the major market gauges.

A report on gross domestic product, the broadest measure of the nation's economic activity, confirmed a slower economy and raised the possibility of a pause from the Fed.

The Commerce Department said GDP grew at a 2.5 percent annual rate, in the second quarter down from the 5.6 percent growth logged in the first quarter. Economists surveyed by Briefing.com had forecast growth of 3 percent in the most recent quarter. (Full story)

After the market opens, the University of Michigan will release its revised reading on consumer confidence in July. Economists are forecasting that index will stay at 83.

more...

[54anickel]

43. OT - Iran: The Next War

http://www.rollingstone.com/politics/story/10962352/iran_the_next_war/1

big snip>

So far, however, Franklin is the only member of Feith's team to face charges. The continuing lack of indictments demonstrates how frighteningly easy it is for a small group of government officials to join forces with agents of foreign powers—whether it is AIPAC or the MEK or the INC—to sell the country on a disastrous war.

The most glaring unindicted co-conspirator is Ahmed Chalabi. Even top-ranking Republicans suspect him of double dealing: "I wouldn't be surprised if he told Iranians facts, issues, whatever, that we did not want them to know," said Rep. Chris Shays, R-Conn., who chairs the House subcommittee on national security. Yet the FBI has been unable to so much as question Chalabi as part of its ongoing espionage case. Last November, when Chalabi returned to the United States for a series of speeches and media events, the FBI tried to interview him. But because he was under State Department protection during his visit, sources in the Justice Department say, the bureau's request was flatly denied.

snip>

In the end, the work of Franklin and the other members of Feith's secret office had the desired effect. Working behind the scenes, the members of the Office of Special Plans succeeded in setting the United States on the path to all-out war with Iran. Indeed, since Bush was re-elected to a second term, he has made no secret of his desire to see Tehran fall. In a victory speech of sorts on Inauguration Day in January 2005, Vice President Dick Cheney warned bluntly that Iran was "right at the top" of the administration's list of "trouble spots"—and that Israel "might well decide to act first" by attacking Iran. The Israelis, Cheney added in an obvious swipe at moderates in the State Department, would "let the rest of the world worry about cleaning up the diplomatic mess afterward."

Over the past six months, the administration has adopted almost all of the hard-line stance advocated by the war cabal in the Pentagon. In May, Bush's ambassador to the United Nations, John Bolton, appeared before AIPAC's annual conference and warned that Iran "must be made aware that if it continues down the path of international isolation, there will be tangible and painful consequences." To back up the tough talk, the State Department is spending $66 million to promote political change inside Iran—funding the same kind of dissident groups that helped drive the U.S. to war in Iraq. "We may face no greater challenge from a single country than from Iran," Secretary of State Condoleezza Rice declared.

In addition, the State Department recently beefed up its Iran Desk from two people to ten, hired more Farsi speakers and set up eight intelligence units in foreign countries to focus on Iran. The administration's National Security Strategy—the official policy document that sets out U.S. strategic priorities—now calls Iran the "single country" that most threatens U.S. interests.

The shift in official policy has thrilled former members of the cabal. To them, the war in Lebanon represents the final step in their plan to turn Iran into the next Iraq. Ledeen, writing in the National Review on July 13th, could hardly restrain himself. "Faster, please," he urged the White House, arguing that the war should now be taken over by the U.S. military and expanded across the entire region. "The only way we are going to win this war is to bring down those regimes in Tehran and Damascus, and they are not going to fall as a result of fighting between their terrorist proxies in Gaza and Lebanon on the one hand, and Israel on the other. Only the United States can accomplish it," he concluded. "There is no other way."

more...

[54anickel]

45. Open for bidness

Dow 11,184.32 +83.89 (+0.76%)
Nasdaq 2,078.81 +24.34 (+1.18%)
S&P 500 1,272.57 +9.37 (+0.74%)
10-yr Bond 4.998 -0.042 (-0.83%)
30-yr Bond 5.068 -0.043 (-0.84%)
NYSE Volume 193,906,000
Nasdaq Volume 153,517,000

09:40 am : Market rebounds nicely after failing to carry intraday gains into the close over the last two days. Aside from another batch of better than expected earnings reports providing a floor of early support, an advance read on Q2 GDP showing the economy grew at a slower than expected annual rate of 2.5% (consensus 3.0%) amid contained inflation has improved an already better underlying tone. To wit, since the data further suggest the Fed will achieve the soft landing they are trying to achieve, fed funds futures have dropped following the report and now signal only a 32% chance the Fed will raise another 25 basis points on August 8th.DJ30 +71.80 NASDAQ +12.52 SP500 +6.28 NASDAQ Vol 102 mln NYSE Vol 80 mln

09:15 am : S&P futures vs fair value: +5.0. Nasdaq futures vs fair value: +8.2.

09:00 am : S&P futures vs fair value: +5.1. Nasdaq futures vs fair value: +8.0. Even though an unexpected earnings shortfall from Chevron (CVX) initially left equity investors questioning whether 2.5% GDP growth was a fast enough pace to sustain earnings growth, futures trade has taken a bullish cue from a rally in bonds. With fed funds futures now pricing in only a 32% likelihood of an 18th straight hike on August 8, GDP data providing further optimism the Fed will achieve the soft landing they are seeking has improved overall sentiment and pushed the yield on the 10-yr note (+06/32) to 5.00%.

08:33 am : S&P futures vs fair value: +4.6. Nasdaq futures vs fair value: +6.2. Futures trade improves slightly following economic data, now lending a bit more conviction behing a potential rebound for equities. An advance read on GDP showed that the economy grew 2.5% in Q2 (consensus 3.0%), well below the 5.6% enjoyed in Q1, but the chain deflator -- a key inflation measure -- came in at a lower than expected 3.3% (consensus 3.4%); the Q2 employment cost index rose 0.9% (consensus 0.8%). Bonds, which were off slightly ahead of the data, have turned around; the 10-yr note is now up 4 ticks to yield 5.01%.

08:00 am : S&P futures vs fair value: +3.8. Nasdaq futures vs fair value: +3.8. Despite the lack of an earnings-related catalyst amid another big day of corporate news, futures versus fair value suggest investors may get back on the buying track after failing to carry intraday gains into the close over the last two sessions. However, with traders waiting to see just how much the economy slowed from April to June, the market tone could change upon the 8:30 ET release of an advance read on Q2 GDP, an accompanying PCE deflator and the Employment Cost Index.

06:29 am : S&P futures vs fair value: +4.0. Nasdaq futures vs fair value: +5.8.

06:28 am : FTSE...5915.80...-13.70...-0.2%. DAX...5638.16...-20.91...+0.4%.

06:28 am : Nikkei...15342.87...+163.09...+1.1%. Hang Seng...16955.04...+38.27...+0.2%.

[Buttercup McToots]

46. Gold shortage looms

http://www.miningmx.com/gold_silver/797553.htm

exerpt:
Gold shortage looms - MEG
David McKay
Posted: Thu, 27 Jul 2006

-- GOLD supply shortages were possible in the long-term, according to recent research produced by Canadian research house, Metals Economics Group (MEG). It said in a press statement that recently discovered deposits of more than 2.5 million ounces, enough to attract the interest of major gold producers, were not adequate to replace their production.


The discovery rate of major gold deposits had declined in each of the last eight years, MEG said. Total world output of gold was 1.1 billion ounces from 1992 to 2005, about 1.8 times the new resources discovered in deposits larger than 2.5 million ounces, it said.
“To make the discrepancy even worse, by year-end 2005, only 52% of the discovered resources had been upgraded to reserves,” MEG said.

It said the shortage of projects large enough for the majors would continue to be ‘critical’. Declines in discoveries would be reversed, however, as majors increased their exploration budgets, and the number of intermediaries and juniors seeking new gold increased.

The world’s largest 20 gold producers had replaced 200% of their total production over the past eleven years at an average cost of $38/oz through acquisitions and exploration, MEG said. Gold production among the top 20 companies had also increased, MEG said. Combined annual gold production increased 70% to 43 million oz in the nine years to 2004, it said.

[Buttercup McToots]

47. How Will Gold Stocks Perform if the Stock Market Crashes?

http://www.kitco.com/ind/Silberman/jul262006.html

snip>
How Will Gold Stocks Perform if the Stock Market Crashes?

By Greg Silberman
July 26, 2006

blog.goldandoilstocks.com


Fear is more contagious than Enthusiasm
- Extraordinary Popular Delusions the Madness of Crowds, Charles Mackay, 1841


I have been receiving lots of e-mails from subscribers asking me what I thought would happen to Gold Stocks if the Stock Market (SM) Crashes.

Before I answer that I would like to chime in and say I find it very interesting that the question is even being asked.

Inflation / Deflation argument (yet again)

Many readers have told me I’m outright NUTS for considering a SM crash. Now I accept they may be right, I probably am Nuts but certainly not for considering the possibility of a Deflationary SM meltdown. Inflationists tell me the Fed would step in to avert a crash the same way the did in 2000 to 2002 - MASSIVE Monetary Inflation! They tell me nominal prices just cannot go down in a material way when the Federal Reserve is Ready, Willing and Able to Buy up every asset with Newly Printed Dollars.

Their arguments are very persuasive. I mean, who wouldn’t accept a check from the Fed for the original purchase price of your home even whilst it’s value is catering?

I think the Inflationist view is Flawed for one major reason.

link above

[ozone_man]

60. Deflation then inflation.

After Deflation

What happens after Deflation is another story altogether. After enough debt has been cleansed (through bankruptcy) there is much less risk of monetary inflation destroying Capital Markets. Then it will be No Holds Barred and most likely Hyperinflation.

You like Roller Coasters?
I hope so because we’re on the Big Boy!

Gold Stocks

There is no denying that Gold Stocks have sold off with the Stock Market even though the Price of Gold has been rising.

The fact that Gold Stocks fell whilst Physical Gold rose does not surprise or worry me at all. It is quite common that during an advance Gold Stocks get ahead of Physical. This can result in Physical ‘catching up’ after gold stocks have topped out - and we see this divergent behavior.

However, the correlation with the stock market is the Million Dollar Question. Yes, Gold Stocks are equities and yes, they will be influenced by the broader stock market. But fundamentally Gold Stocks are counter cyclical because the product they mine moves in an inverse relationship to paper assets.

Once irrationality sets in and the stock market really starts to fall I would say, based on recent experience, Gold Stocks would initially fall alongside.

However, at some point investors in Gold Stocks will focus on their business and not the fact that they are stocks. When will that happen? When the Fed starts to Panic and ‘attempts’ to restore confidence through the Printing Press.

It's the wrong time to be in gold or gold stocks, but maybe in a several years, after deflation has cleansed the debt and hyperinflation kicks in. Nobody is talking about deflation yet. It's early still.

[54anickel]

51. FOOLish Nonsense

http://globaleconomicanalysis.blogspot.com/2006/07/foolish-nonsense.html

Someone recently sent me a set of articles that appeared on the Motley FOOL and asked for comments. All three were written by the same person: Mike Norman.

The first article is called Tune Out the Debt Doomsday Crowd.
Following are a few snips:

snip>

I hardly know where to start. Comparing the US to Uruguay and proclaiming "see look how much worse someone else is" is hardly a decent measure of fiscal sanity.

Next, Norman has his figures wrong.

In Is the US dollar toast? I have a graph of the National Debt from Whitehouse.Gov showing the projection by the OMB to be close to 70% and nowhere near "a comfortable manageable 38%" that Norman proclaims.



The chart above shows the debt to GDP ratio was higher under Truman. But this was in the wake of WWII and with the baby boomer boom just starting. The debt to GDP ratio is now close to a peace time record high (if one calls this peace) and far exceeds the Vietnam Era debt to GDP ratios under LBJ and Nixon. Will there be another baby boomer boom to bale us out? I think not.

big snip>

Final Thoughts

On one hand I am disappointed that the FOOL published those articles by Norman. The reason I am disappointed is because those articles are filled with factual errors while espousing the "free lunch" economic thinking that has this country in the mess that it is in. Some of those ideas are not "contrarian", they are pure nonsense. Thus the printing of such articles on the grounds of "equal time" is no more valid than it would be to give "equal time" to the flat earth society. At the very least the FOOL might have caught some of the factual errors and the "we owe it to ourselves" silliness. I fear for people that take Norman's message to heart. On the other hand, perhaps I should thank the FOOL and Norman as well because the viewpoint "no problem yet" is so pervasive in current thinking that rebuttals like this need to be heard. On that basis I thank Mike Norman and the FOOL for those posts.

more...

[54anickel]

55. Congress Mulls Bill Opening More Pensions to Invest in Hedge Funds

http://www.banknet360.com/news/NewsAbstract.do?na_id=4576

A proposed change in the Employee Retirement Income Security Act would open the doors for hedge fund firms to manage more assets of pension funds.

Currently, hedge funds limit the amount of pension fund assets that can be invested at 25% of the total size of the funds. Exceeding the cap requires a hedge fund to act as a fiduciary, which carries increased regulatory scrutiny while also limiting investment flexibility.

The new provision would expect public employee and foreign pensions from counting against that cap. The provision is part of a pension reform bill being debated in both the House and Senate.

But I thought hedge funds were posing a systemic risk and needed to be investigated and straightened out before gazillions are lost and the little guy gets screwed!!! Ohhh, I see...the little guys "life's savings and retirement" is gonna be used to bail out the "traditional" hedge fund investor. Is this another one of those transfers of wealth I keep reading about? :eyes:

[54anickel]

56. 10:41 numbers and yada

Dow 11,165.11 +64.68 (+0.58%)
Nasdaq 2,067.78 +13.31 (+0.65%)
S&P 500 1,268.91 +5.71 (+0.45%)
10-yr Bond 4.99 -0.05 (-0.99%)
30-yr Bond 5.06 -0.051 (-1.00%)
NYSE Volume 616,986,000
Nasdaq Volume 444,035,000

10:30 am : Major averages are off their best levels but still trading sharply higher. Even though virtually every industry group remains positive, the absence of leadership from Energy (-0.9%) is stalling some of this morning's recovery efforts. Aside from Chevron's earnings miss and Baker Hughes (BHI 76.50 -4.35) warning of a possible slowdown in second half drilling activity, crude oil prices now down 2% at session lows and close to slipping through $73 per barrel are also prompting investors to rotate some money out of Energy and into underperforming areas like Tech and Consumer Discretionary.DJ30 +61.32 NASDAQ +10.91 SOX +1.2% SP500 +5.38 XOI -0.4% NASDAQ Dec/Adv/Vol 825/1749/380 mln NYSE Dec/Adv/Vol 606/2276/342 mln

10:00 am : Indices continue to gain momentum as equity buyers return in droves to push stocks to fresh session highs. Nine out of 10 economic sectors are posting noticeable gains, paced by a 1.2% surge in the most influential of them all -- Financials. The rate-sensitive sector is embracing a rally in the Treasury market that has pushed the yield on the 10-yr note below the psychologically significant 5.00% level for the first time since mid June; it is currently at 4.97%. Energy remains the only laggard as an earnings shortfall from Chevron (CVX 65.48 -2.25) prompts investors to consolidate some of the gains that yesterday lifted CVX to an all-time high and helped this year's best performing sector extend its leading year-to-date advance to 16.8%. Meanwhile, a report compiled by The University of Michigan just showed investors what already appears to be quite evident, that consumer sentiment has strengthened over the last two weeks. The index inched higher to 84.7 from a preliminary read of 83.0.DJ30 +85.51 NASDAQ +21.76 SP500 +9.05 NASDAQ Dec/Adv/Vol 541/1803/240 mln NYSE Dec/Adv/Vol 561/2077/198 mln

[54anickel]

57. Chrysler sounds alarm on quarter loss

http://www.chicagotribune.com/business/chi-0607280116jul28,1,2356701.story?coll=chi-business-hed

Things will get worse before they get better, Chrysler Group CEO Tom LaSorda warned in reporting a sharp decline in second-quarter profits, a production cut to reduce inventory and a projected $600 million loss for the third quarter.

That news took some wind out of the fact that parent DaimlerChrysler posted a $2.37 billion operating profit in the second quarter, up 11 percent from $942 million a year earlier. Revenue held even at $49 billion.

Thank strong sales of luxury cars from its Mercedes-Benz division.

"Thank goodness for Chrysler that Mercedes did well," said Dave Cole, chairman of the Center for Automotive Research in Ann Arbor. "One reason for the DaimlerChrysler merger was to have counter-cyclical behavior in earnings. Chrysler carried Mercedes for a few years, now the reverse is true."

Mercedes strength comes from increased sales of high-profit luxury cars, while Chrysler's weakness is from softness in high-profit sport-utility vehicles and trucks, which account for most of its sales.

more...

[54anickel]

59. Personal Views From China

http://www.kitco.com/ind/resopp/jul282006.html

I am writing this in a luxury hotel in Shenzhen in southeastern China. I hope that presenting some first-hand experiences and observations will help to bring to life the facts and figures concerning the growth in China. No amount of words and pictures can come close to capturing the real thing. I have seen repeatedly how astounded people are when they see China first-hand, no matter how many words or pictures they had seen before arriving.

The train station that dominates the panorama from the hotel window is the biggest that I have ever seen. It is also the most attractive. The massive plaza in front of the station is well designed, attractive, clean and well maintained. Adjacent to the plaza is a large, beautifully landscaped garden. The traffic flow is well-organized, with taxis, buses and cars all coordinating efficiently with the flow of people coming from and going to the trains.

This Shangri-La Hotel is far nicer, cleaner and more modern then the Marriott Marquis in New York, where I stayed just a day before leaving for China. Yet, the Shangri-La is already embarking on a “room rejuvenation programme”.

All of the luxury hotel chains are well represented throughout China and there is fierce competition to remain at the leading edge of comfort and luxury. The wealthy people of China have very quickly developed a high level of sophistication. Not the ostentatious displays seen in America, but a quiet elegance: high-quality materials, good workmanship, exquisite attention to detail, neat and always clean.

snip>

Even more astounding than the institutional money flowing through Hong Kong is the appetite from local investors. The Bank of China, the second largest lender in the country, just completed an IPO that raised the equivalent of $10 billion. Initially, 10% of the offering was reserved for individual retail investors. That amount was greatly oversubscribed, as fully one million individual investors subscribed for HK$287 billion (US$35 billion) worth of shares. The institutional portion was also 20 times over-subscribed.

That frenzy to buy shares in a Chinese bank is understandable in view of the success of two other big Chinese banks that went public within the last year. China Construction Bank shares are up 42% since its IPO last October. Bank of Communications has gained 98% since its IPO a year ago, supported by first quarter profit up 42%.

Remember only months ago when some American commentators were sounding alarm bells over a banking sector that was about to collapse and take down the Chinese economy. Those banks are being tidied up and today sophisticated investors from around the world want to own a piece of them.

more...

[mike923]

61. Capitalism is amazing.

[specimenfred1984]

65. And It Only Takes 300 Million Slave Laborers!

China won't be so pretty when these few hundred million people revolt.

[54anickel]

75. You don't think they'll buy into a Chinese version of the Republican's

"Contract on America"?

[54anickel]

62. The Fed’s Next Move and the Mid-East Powder-keg

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

Fed chief Ben Bernanke left traders guessing about the central bank’s next move on interest rates after his testimony before the Senate Banking Committee on July 19th. The Fed could call for an immediate cease-fire at 5.25% with enough monetary tightening already in the pipeline, or it could cap the two-year rate hike campaign at 5.50%, to defend the US dollar and keep global commodity prices in check.

“There are risks in both directions, if I may say so. Clearly, we don't want to tighten too much to cause our economy to grow more slowly than its potential. The risk in the other direction is that, were we to stop tightening too soon and inflation were to get higher and more persistent, then we would be faced with a situation of having to address that later on with perhaps even more rate increases,” Bernanke added.

Arguing on the side of an immediate cease-fire on rate hikes, Bernanke added, “We must take account of the possible future effects of previous policy actions, that is, of policy effects still in the pipeline. The lags between policy actions and their effects imply that we must be forward-looking, basing our policy choices on the longer-term outlook for both inflation and economic growth,” he said.

Then, uttering one of his trade-mark zig-zags, Bernanke said, “High energy and commodity prices combined with low unemployment, and high use rates in factories in plants may sustain inflation pressures in the real economy and would be costly to reverse. The Fed must guard against the emergence of an inflationary psychology that could impart greater persistence to what would otherwise be a transitory increase in inflation,” he said.

But while Bernanke is keeping traders in the dark about the Fed’s next move, Kansas City Fed chief Thomas Hoenig is more transparent. The two-year series of interest rate hikes have shifted US monetary policy from a “very accommodative stance to a restrictive one,” he said. And the next batch of economic data between now and August 8th, should not alter the big picture outlook. “Policy is not made from the most recent data point. It has to be made in the context of accumulated data.”

Fed Grows Wary of Inverted Yield Curve

more...

[54anickel]

63. 12:25 lunch time check in

Dow 11,225.22 +124.79 (+1.12%)
Nasdaq 2,086.34 +31.87 (+1.55%)
S&P 500 1,277.46 +14.26 (+1.13%)
10-yr Bond 4.988 -0.052 (-1.03%)
30-yr Bond 5.064 -0.047 (-0.92%)
NYSE Volume 1,253,875,000
Nasdaq Volume 895,477,000

12:00 pm : Stocks remain in rally mode midday as further evidence of the "soft landing" Fed officials were hoping for coupled with plunging oil prices get buyers back on track after a two-day rally to start the week stalled over the last couple of sessions.

Sure earnings reports were still in focus this morning, especially as the biggest week of reporting comes to a close. However, with the market's focus now shifting back to "incoming" data to help set Fed policy, today's weaker than expected advance read of 2.5% (consensus 3.0%) on Q2 GDP amid contained inflation has merely reinforced the strength of Q2 earnings growth in the face of an expected slowdown in economic growth. As of yesterday, roughly 70% of S&P 500 companies having reported Q2 results so far have beaten analysts' expectations, keeping the streak of 11 straight quarters of double-digit profit growth intact.

Providing additional support for equities has been a rally in the Treasury market, which has pushed the yield on the 10-yr note below the psychologically significant 5.00% level for the first time since mid June. It currently stands at 4.98% as fed fund futures have dropped expectations for an August rate hike by the Fed to 26%, as opposed to 46% ahead of the GDP report and more than 90% likelihood after the last hike in late June, while expectations for any more tightening this year have also diminished.

As a result, the rate-sensitive Financials sector, which is also the most influential of all 10 economic sectors, has rallied since a decline in borrowing costs make banks (+2.0%) and brokers (+2.2%) more attractive. Since the greatest risk for investing in tech has also been the fear that the Fed will go too far with its tightening, more proof that policy makers will pause has allowed bargain hunters to step back into beaten down tech bellwethers. Microsoft (MSFT 24.15 +0.28) has more than halved yesterday's 2.0% decline after being upgraded while Intel (INTC 17.78 +0.31) has surged 3.0% as investors applaud its biggest product revamp in six years.

Even though a blowout Q2 report from Baker Hughes (BHI 76.46 -4.39) underscores our long-held bullish view on the oil services sector, an earnings shortfall from Chevron (CVX 65.95 -1.78) and a 2.0% pullback in oil has prompted investors to rotate money out of this year's best performing sector, Energy -- the only sector failing to participate in today's broad-based move to the upside. Crude futures earlier touched $72.80 per barrel, its lowest level since the end of June, amid reports that the U.S. will seek an early cease-fire in Lebanon. BTK +1.0% DJ30 +124.12 DJTA +1.8% DJUA +0.7% DOT +0.5% NASDAQ +27.45 NQ100 +1.6% R2K +1.5% SOX +2.7% SP400 +1.4% SP500 +13.31 XOI +0.2% NASDAQ Dec/Adv/Vol 873/1923/828 mln NYSE Dec/Adv/Vol 645/2443/772 mln

11:30 am : Onward and upward remains the driving mantra this morning as short sellers continue to run for cover. To wit, even Energy is paring its intraday losses despite a 1.9% decline in oil prices and is now down only 0.1%. All three of the major averages are now up at least 1.0% on the day and up roughly 3.0% for the week, so far marking the best weekly performance since early January. Of the nine economic sectors posting gains, six are up at least 1.0% led by an almost 2.0% surge in Financials. DJ30 +130.87 NASDAQ +30.08 SP500 +15.23 NASDAQ Dec/Adv/Vol 845/1900/676 mln NYSE Dec/Adv/Vol 640/2387/640 mln

11:00 am : Stocks regain some steam since the last update as buyers remain in total control of the action. In addition to the support provided by interest-rate sensitive areas like Brokerage (+1.9%) and Banks (+1.8%), Technology is also providing some notable leadership amid further declines in borrowing costs. Since the greatest risk for investing in tech stocks has been the fear that the Fed will go too far with its tightening effort, more evidence (e.g. Q2 GDP) suggesting that policy makers will pause in early August has allowed bargain hunters to step back into beaten down bellwethers. Microsoft (MSFT 24.16 +0.29) has more than halved yesterday's 2.0% decline after being upgraded while Intel (INTC 17.78 +0.31) has surged 1.8% as investors applaud its biggest product revamp in six years.DJ30 +102.54 NASDAQ +20.14 SOX +1.6% SP500 +10.16 NASDAQ Dec/Adv/Vol 969/1699/532 mln NYSE Dec/Adv/Vol 760/2194/504 mln

10:30 am : Major averages are off their best levels but still trading sharply higher. Even though virtually every industry group remains positive, the absence of leadership from Energy (-0.9%) is stalling some of this morning's recovery efforts. Aside from Chevron's earnings miss and Baker Hughes (BHI 76.50 -4.35) warning of a possible slowdown in second half drilling activity, crude oil prices now down 2% at session lows and close to slipping through $73 per barrel are also prompting investors to rotate some money out of Energy and into underperforming areas like Tech and Consumer Discretionary.DJ30 +61.32 NASDAQ +10.91 SOX +1.2% SP500 +5.38 XOI -0.4% NASDAQ Dec/Adv/Vol 825/1749/380 mln NYSE Dec/Adv/Vol 606/2276/342 mln


Advances & Declines
NYSE Nasdaq
Advances 2484 (76%) 1949 (65%)
Declines 642 (19%) 886 (29%)
Unchanged 117 (3%) 132 (4%)

--------------------------------------------------------------------------------

Up Vol* 895 (76%) 616 (72%)
Down Vol* 267 (22%) 217 (25%)
Unch. Vol* 5 (0%) 16 (1%)

--------------------------------------------------------------------------------

New Hi's 99 55
New Lo's 53 78

[54anickel]

70. Concern grows over Microsoft's Vista

http://business.timesonline.co.uk/article/0,,9075-2289842,00.html

Microsoft has worried Wall Street by failing to reassure analysts that Vista, the much-delayed latest version of Windows, will be rolled out on time.

Fears that the troubled flagship project, already five years in the pipeline, could suffer yet more setbacks led shares in Microsoft to close 2 per cent lower at $23.87 on the Nasdaq market overnight.

snip>

"We will ship Windows Vista when it is available," Kevin Johnson, co-president of Microsoft’s platforms and services unit, said at the company’s annual financial analysts’ meeting in Redmond. He declined to give a more detailed timetable.

snip>

Delays to the next generation of Windows, which accounts for 90 per cent of the market, also risk knock-on effects to PC and processor manufacturers as consumers delay buying new computers until the latest software is on the shelves.

snip>

Google, the online advertising giant, has already given notice it intends to compete in the software stakes by buying Writely, an internet-based word processor that competes with Microsoft's Word.

Microsoft is seeking to fight back by investing $2 billion in its own internet-based services. Ra Ozzie, Microsoft’s technology guru, told analysts that Microsoft is ready to abandon the PC-centric model that it has milked for the past 30 years.

"We’re in a new era, an era in which the internet is at the centre," he said.

more...

[54anickel]

71. Japan to totally ban U.S. beef if risk parts found: health minister

http://mdn.mainichi-msn.co.jp/national/news/20060728p2a00m0na004000c.html

snip>

Of 35 U.S. meat-processing facilities authorized by the U.S. government to ship beef to Japan, Tokyo allowed 34 plants to resume exports because no or only minor, correctable problems were found at the plants through the Japanese government's recent on-the-spot inspections.

Japan first banned U.S. beef imports in December 2003 immediately after the discovery of the first U.S. case of brain-wasting mad cow disease, formally called bovine spongiform encephalopathy, or BSE.

In December 2005, Tokyo resumed imports of U.S. beef on condition that brain and other parts with high BSE risks are removed. But only one month later, it totally suspend beef imports from the United States again as backbone, one of the designated risky parts, was found in a cargo of veal shipped by a U.S. meat processor.

The United States criticized Japan as overreacting and argued that only the problematic meat processor should be barred from exporting beef to Japan. (Jiji Press)

[54anickel]

72. 2:21 and more of the same - it's a good weekend to hold stocks

Dow 11,236.27 +135.84 (+1.22%)
Nasdaq 2,090.07 +35.60 (+1.73%)
S&P 500 1,278.53 +15.33 (+1.21%)
10-yr Bond 5.00 -0.04 (-0.79%)
30-yr Bond 5.078 -0.033 (-0.65%)
NYSE Volume 1,766,945,000
Nasdaq Volume 1,282,671,000

2:00 pm : Stocks are paring some of their gains as the indices slip to afternoon lows. Some of the Dow's pullback can be attributed to a reversal in Merck (MRK 40.87 -0.11), which is consolidating after it hit a multi-year high yesterday and surpassed $41 for the first time since the Vioxx news crushed the stock in September 2004. Strength throughout the rest of the drug group (e.g. PFE +2.0%, WYE +1.4%, LLY +2.3%, BMY +2.2%, ABT +1.3%) however, continues to lend support a Health Care sector dealing with further weakness in HMOs (-3.4%). DJ30 +109.18 NASDAQ +30.87 SP500 +12.68 NASDAQ Dec/Adv/Vol 942/1954/1.20 bln NYSE Dec/Adv/Vol 638/2559/1.10 bln

1:30 pm : Range-bound trading persists as President Bush and Prime Minister Blair wrap up a joint press conference regarding the events in Lebanon and the Middle East. However, since their testimony didn't provide anything surprising, oil prices have also held relatively steady near session lows around $73 a barrel, just enough to keep the Energy sector from turning positive on the day. DJ30 +126.15 NASDAQ +33.99 SP500 +14.72 NASDAQ Dec/Adv/Vol 852/2032/1.11 bln NYSE Dec/Adv/Vol 608/2576/1.02 bln

1:00 pm : More of the same for stocks as buying remains widespread across most areas. Semiconductor Equipment, one of the year's worst performers, is pacing today's gains with a 4.1% surge. KLA-Tencor (KLAC 42.33 +2.25) reported an 18% increase in Q4 sales has helped investors look beyond ongoing concerns about stock option-accounting practices that continue to plague chip stocks. Aside from oil prices at session lows helping retailers (+1.2%) across the board, Computer & Electronics Retail is turning in the best performance (+3.4%) following analyst upgrades on Circuit City Stores (CC 24.34 +1.62) and Best Buy (BBY 45.43 +1.29). DJ30 +128.42 NASDAQ +33.30 SOX +2.6% SP500 +14.85 NASDAQ Dec/Adv/Vol 867/1985/994 mln NYSE Dec/Adv/Vol 617/2526/912 mln

12:30 pm : No change in sentiment whatsoever as trading works its way through the New York lunch hour and the indices continue to sport solid gains. On the Dow, 29 of its 30 components are trading higher. Intel (INTC 18.13 +0.66), a suggested holding in our Active Portfolio, is pacing the way with a 3.8% surge. Strangely, one of Intel's biggest customers, Hewlett-Packard (HPQ 32.08 -0.11), which is scheduled to report Q3 (Jul) earnings in two weeks, is the only component posting a loss.DJ30 +127.03 NASDAQ +31.61 SOX +2.8% SP500 +14.35 NASDAQ Dec/Adv/Vol 879/1950/897 mln NYSE Dec/Adv/Vol 638/2487/840 mln

[stop the bleeding]

74. this has been a good week for the major indexes

We are testing a cup on the DJIA that the front side was set on July 3, 5, 6 and 7 if we can bust through this then we may need to adjust the bearish outlook that I have been maintiaing since mid May. I had already planned to be looking for an end come August so we are almost right on schedule, but IT IS STILL TOO EARLY TO TELL FOR SURE, but things are looking ok this week.

Thanx 54 I think everyone else has split :)

[54anickel]

76. Yeah, I haven't felt this lonely on this thread since the day after the

2004 selection....but I'll hang in here to at least catch the close for the record.

[54anickel]

77. 3:15 and all is well - even bonds catching a good bid

Dow 11,226.66 +126.23 (+1.14%)
Nasdaq 2,088.73 +34.26 (+1.67%)
S&P 500 1,277.97 +14.77 (+1.17%)
10-yr Bond 4.988 -0.052 (-1.03%)
30-yr Bond 5.067 -0.044 (-0.86%)
NYSE Volume 2,031,360,000
Nasdaq Volume 1,483,339,000

3:00 pm : Holding steady at sharply higher levels as equity investors continue to rally around the belief that policy makers may finally take a breather after two years of interest rate increases. To wit, even bond traders are preparing to go into the weekend for the first time in weeks owning Treasuries not primarily due to safe-haven buying due to escalating geopolitical concerns in the Middle East. The 10-yr note is up 12 ticks, successfully pushing the yield through the psychologically significant 5.00% for the first time since June 14 to close at 4.98%. DJ30 +130.25 NASDAQ +34.89 SP500 +14.99 NASDAQ Dec/Adv/Vol 943/2002/1.42 bln NYSE Dec/Adv/Vol 673/2569/1.30 bln

2:30 pm : Modest afternoon profit-taking efforts appear to have stalled for the moment as buyers get back on track to close the S&P 500 with its best weekly performance since May 2005. Helping the broader market keep its weekly 3.0% surge intact has been strong sector leadership, especially with sharp gains of 1.8% from its two most influential sectors -- Financials and Technology, which combined account for more than 25% of the total weighting on the index.DJ30 +128.11 NASDAQ +34.14 SP500 +14.46 NASDAQ Dec/Adv/Vol 920/1977/1.31 bln NYSE Dec/Adv/Vol 652/2555/1.20 bln

[stop the bleeding]

78. ponies anyone?

:evilgrin:

on edit: I wouldn't be surprised to see a 40 point sell off in the DJIA before today's close so that people could lock in some of these "good" gains

11190 maybe?

[54anickel]

80. Looks like today's theme song is "I Wanna Take You Higher"

Freddie: Feeling's gettin stronger
Larry: Music's gettin longer too
Rose: Music is flashin me
Sly: I want to take you higher
Baby baby baby light my fire

All: Boom shaka-laka-laka Boom shaka-laka-laka

Freddie: Feeling's nitty-gritty
Larry: Sound is in the city too
Rose: Music's still flashin' me
Sly: Don't ya want to get higher
Baby baby baby light my fire.

All: Boom shaka-laka-laka Boom shaka-laka-laka

[54anickel]

81. Jeebus, I'll post the close, but the volume numbers are still changing

4:14
Dow 11,219.70 +119.27 (+1.07%)
Nasdaq 2,094.14 +39.67 (+1.93%)
S&P 500 1,278.55 +15.35 (+1.22%)
10-yr Bond 4.99 -0.05 (-0.99%)
30-yr Bond 5.067 -0.044 (-0.86%)
NYSE Volume 2,463,973,000
Nasdaq Volume 1,804,390,000


4:15
NYSE Volume 2,463,986,000
Nasdaq Volume 1,808,350,000

See what I mean.


On edit - final volumes and blather

NYSE Volume 2,480,422,000
Nasdaq Volume 1,862,474,000

4:20 pm : Stocks surged across the board Friday as investors rallied around more proof of a potential end to the Fed's two-year campaign of raising rates.

Breathing a sigh of relief heading into the end of the quarter's biggest week of earnings, the market's focus quickly shifted to a GDP report that can at times garner little attention on Wall Street since much of the data are easily predicted using monthly economic releases. However, with traders anxious to see just how much the economy slowed from April to June, as concerns about an economic slowdown had acted as a big overhang throughout much of the quarter, all eyes were fixated on GDP data before the bell.

Then, at 8:30 ET, the Commerce Dept. reported a weaker than expected advance read on Q2 GDP of 2.5% and showed that the chain deflator, a key inflation measure, held steady at 3.3% for a fourth straight quarter, serving up exactly what the Fed was looking for -- evidence of a "soft landing." The data reinforced the sustainability of strong earnings growth in Q2, even in the face of an expected slowdown. As of yesterday, roughly 70% of S&P 500 companies that have reported Q2 results so far had beaten analysts' expectations, keeping the streak of 11 straight quarters of double-digit profit growth intact.

Providing additional support for stocks was a rally in the Treasury market, which pushed the yield on the 10-yr note below the psychologically significant 5.00% level for the first time since June 14. It closed at 4.98% as fed fund futures dropped expectations for an August rate hike by the Fed to 26%, compared to 46% ahead of the GDP report and a greater than 90% likelihood after the last hike in late June. Expectations for any more tightening this year also diminished.

As a result, the rate-sensitive Financials sector, which is also the most influential of all 10 economic sectors, rallied as the decline in borrowing costs made banks (+2.0%) and brokers (+2.4%) more attractive.

Since the greatest risk for investing in tech has also been the fear that the Fed will go too far with its tightening, further evidence of a possible stoppage allowed bargain hunters to send short sellers running for cover as they got back into beaten down tech bellwethers. Intel (INTC 18.14 +0.67), a suggested holding in our Active Portfolio and the day's best performing Dow component, surged 3.8% as investors applauded its biggest product revamp in six years. Chip stocks got an additional lift as KLA-Tencor (KLAC 42.33 +2.25) reporting an 18% increase in Q4 sales helped investors look beyond ongoing concerns about stock option-accounting practices that continue to plague the semiconductor space. Apple Computer (AAPL 65.51 +2.11) also gained more than 3.0%, after PC industry data showed worldwide Mac market share rose to 2.5% in the June quarter, while Microsoft (MSFT 24.24 +0.37) nearly erased Thursday's 2.0% decline after being upgraded.

The Industrials sector finally got some help from the Dow Jones Transportation Average, which posted its first gain in five days, while Consumer Staples caught a bid as analysts applauded Wal-Mart's (WMT 44.46 +0.93) decision to sell its 85 stores in Germany so it can focus on markets like India and China where it can achieve its objectives. After hitting a 52-week low on July 18, WMT shares are up nearly 5%.

Meanwhile, Chevron (CVX 65.95 -1.78) was the most notable name on the earnings calendar, posting the largest quarterly profit in its 127-year history and playing into our Overweight rating on Energy. However, Q2 earnings checking in shy of estimates prompted investors to consolidate some of the gains that lifted CVX to an all-time high a day earlier and to rotate into underperforming areas like Technology -- the day's best performing sector. The Energy's ability to briefly inch into positive territory late in the day and close relatively flat was also noteworthy, especially amid a 1.7% decline in oil prices that also provided some support for consumers heading into the weekend. BTK +1.4% DJ30 +119.27 DJTA +2.5% DJUA +0.6% DOT +1.2% NASDAQ +39.67 NQ100 +2.2% R2K +2.1% SOX +3.0% SP400 +1.6% SP500 +15.35 XOI +0.3% NASDAQ Dec/Adv/Vol 915/2106/1.85 bln NYSE Dec/Adv/Vol 662/2604/1.69 bln

3:30 pm : Market is showing no signs of slowing going into the close as strong industry leadership continues to bode well for equities. The Nasdaq is pacing the way higher among the majors with an impressive 1.8% advance, but is on track to match its blue chip counterparts for the week with a 3.0% gain. Aside from renewed optimism in chip stocks providing support for the tech-heavy Composite, after the PHLX Semi Sector Index hit a one-year low a week ago today, the Russell 2000 small-cap index is faring even better with a 2.0%, which positions it for a roughly 4.0% return on the week. DJ30 +120.56 NASDAQ +35.50 R2K +2.0% SOX +2.8% SP500 +14.78 NASDAQ Dec/Adv/Vol 951/2022/1.56 bln NYSE Dec/Adv/Vol 667/2590/1.43 bln

Have a great weekend :hi:

[54anickel]

82. Grim Reapers: Placing Bets on Your Death

http://biz.yahoo.com/weekend/insure_1.html

It sounds like a script from "The Sopranos": Someone takes out a life insurance policy on your life -- then decides to order a "hit."

Of course, in real life that would never happen to ordinary people. Or would it?

A new life insurance practice -- not exactly a scam because it is legal, but dangerous -- could put you in the position of being a target. At the very least, it gives someone a tremendous incentive to see you dead sooner rather than later!

The practice has been called "SPIN" for speculator-initiated life insurance. It promises seniors upfront money to pay the first two years of policy premiums, plus a little extra cash, if they will take out a life insurance policy and then sell it to someone else.

My interest in this subject started with a recent email from a reader:

I am not really sure what to call it, but my mother (74 years old) has been asking about an insurance policy that has been offered to her and many in her community in Florida. A whole-life policy is taken out on her, and she is given a check for 1% of the policy. The insured person's estate gets the insurance policy if the insured passes within the first two years of the policy. Also, the estate has the option to buy the policy, but most do not because of the cost. Many seniors are pouring into it because of the 1% payout. It sounds too good to be a true, so is it a scam?

By the time "little old ladies" are being offered deals like this, you know something's wrong! Here's what's happening.

more...