STOCK MARKET WATCH, Wednesday 6 September

[ozymandius]

Wednesday September 6, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 868 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2085 DAYS
WHERE'S OSAMA BIN-LADEN? 1785 DAYS
DAYS SINCE ENRON COLLAPSE = 1744
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 September 5, 2006

Dow... 11,469.28 +5.13 (+0.04%)
Nasdaq... 2,205.70 +12.54 (+0.57%)
S&P 500... 1,313.25 +2.24 (+0.17%)
Gold future... 646.90 +14.30 (+2.21%)
30-Year Bond 4.93% +0.06 (+1.21%)
10-Yr Bond... 4.78% +0.06 (+1.16%)






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 Ike Iossif - WEEKLY CHARTS

-lotsa charts-

SUMMARY

For the week of 9-5-06. the indices did close above resistance, suggesting that the bulls will make a run towards the May/June highs. However, the divergences in almost all the indicators we follow also suggest that the indices won't be able to exceed those highs. To get a better picture, take a look at similarities in the charts below. The patterns of price, of the BSE, and of the T.O. are almost identical to the patterns we observed going into the May highs. (Also, please read "The decline in gold is almost over."

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

[ozymandius]

2. Today's Reports

8:30 AM Productivity-Rev. Q2
Briefing Forecast 1.6%
Market Expects 1.6%
Prior 1.1%


10:00 AM ISM Services Aug
Briefing Forecast 55.0
Market Expects 55.0
Prior 54.8

10:30 AM Crude Inventories 09/01
Briefing Forecast NA
Market Expects NA
Prior 2481K

2:00 PM Fed's Beige Book

[UpInArms]

31. Productivity revised higher to 1.6% in second quarter

8:29 AM ET 9/6/06 U.S. Q2 NONFINANCIAL UNIT LABOR COSTS 4.2% V. 1.2% Q1

8:29 AM ET 9/6/06 U.S. Q2 NONFINANCIAL PRODUCTIVITY UP 2.2% VS. 11.1% Q1

8:29 AM ET 9/6/06 U.S. UNIT LABOR COSTS UP 5% IN PAST YEAR, MOST IN 16 YEARS

8:29 AM ET 9/6/06 U.S. PRODUCTIVITY UP 2.5% YEAR-ON-YEAR

8:29 AM ET 9/6/06 U.S. Q1 PRODUCTIVITY UNREVISED AT 4.3%

8:29 AM ET 9/6/06 U.S. Q1 UNIT LABOR COSTS REVISED 9.0% VS. 2.5%

8:29 AM ET 9/6/06 U.S. Q2 UNIT LABOR COSTS REVISED 4.9% VS. 4.2% EXPECTED

8:29 AM ET 9/6/06 U.S. Q2 PRODUCTIVITY REVISED 1.6% VS. 1.7% EXPECTED

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BE1FA8373%2DAB60%2D4707%2D921F%2D453A92823E94%7D&symbol=

WASHINGTON (MarketWatch) - U.S. workers have been more productive but have also been paid more than previously believed.

Revisions to quarterly nonfarm business productivity data show unit labor costs rose 5% in the past year, matching the fastest pace since 1990, the Labor Department reported Wednesday.

Higher unit labor costs could fuel inflationary pressures as firms struggle to recover their labor costs. Unit labor costs had been subdued in the past few years, rising 2% in 2005 and 0.7% in 2004.

Productivity increased 1.6% annualized in the second quarter, up from 1.1% reported a month ago. Unit labor costs increased 4.9% annualized, revised from 4.2% earlier. Real hourly compensation increased 1.6% annualized.

But the big revisions came in the first quarter with the introduction of updated data on compensation. Unit labor costs rose a staggering 9.0% annualized in the first quarter, the most since the third quarter of 2001.

<snip>

In the first quarter, revisions show nonfinancial productivity increased a stunning 111%, the most since 1971. Unit labor costs increased 1.2% in the nonfinancial sector, compared with 9% in the nonfarm business sector as a whole.

...more...

[54anickel]

33. Stress Is Costing Business Big Time

http://biz.yahoo.com/prnews/060906/phw019.html?.v=71

FAIRFIELD, Conn., Sept. 6 /PRNewswire/ -- The thinking goes like this. Lay off some workers, or put off hiring new ones, let current employees take on the extra load, and you can cut costs and boost productivity. If everyone is stressed out, it means you're getting your money's worth.

That approach is proving to be a shortsighted disaster. The cost of stress to American business is staggering, with estimates ranging from $80 billion to $150 billion annually. Stress causes illnesses, absenteeism, diminished productivity, accidents, mistakes, job dissatisfaction, burnout, high turnover, and soaring health insurance premiums.

In a Pew Research Center survey conducted in July, 69% of workers said job stress is worse than it was a decade ago. Employment and insurance data confirm that up to 80% of U.S. workers feel stress, with 40% viewing their work as very or extremely stressful. The National Safety Council estimates that one million employees are absent each workday as a result of stress. And 60%-90% of all doctor visits are for illnesses or injuries caused by stress.

No surprise, then, that many companies have been fighting the stress epidemic with an arsenal of anti-stress initiatives. But the question remains. If all the stress management programs out there are so effective, why is everybody still stressed out?

more, but it's a book plug....:eyes:

[54anickel]

35. Productivity Slows, Wages Post Increase

http://biz.yahoo.com/ap/060906/economy.html?.v=7

snip>

While rising wages and benefits help workers, economists see the combination of slowing productivity and rising wage costs as a recipe for unwanted inflationary pressures.

Productivity is the key factor determining rising living standards. Strong growth in output allows businesses to pay their workers more without having to raise the cost of their products, which fuels inflation. But the current data raise concerns because they show wage pressures rising as productivity growth slows.

The Fed often has cited rising productivity as a reason to believe that inflation is not getting out of control.

snip>

Most economists believe the Fed will remain on hold at their next meeting on Sept. 20. But some analysts believe the Fed will be forced to raise rates one or possibly two more times later this year in response to worsening news on inflation.

Productivity growth, which had been weak for two decades, began to rebound in the mid-1990s, reflecting the benefits produced by the spread of computers in the workforce.
:eyes: I suppose NAFTA and out-sourcing had absolutely NO effect

In a speech last week, Federal Reserve Chairman Ben Bernanke took issue with economists who believe this productivity rebound will not be long-lasting.

Bernanke said he believed a case could be made that "the strong productivity growth of the post-1995 era is likely to continue for some time."
:eyes: :eyes: So there's still plenty of room in the workplace for even MORE computerization? Or is Ben pointing to more out-sourcing, declining wages and working more for less?

[Ghost Dog]

61. Fed Beige Book says U.S. economy continues growth

http://asia.news.yahoo.com/060906/3/2piha.html

WASHINGTON (Reuters) - The U.S. economy grew overall from mid-July to late August, the Federal Reserve said on Wednesday, but five of the 12 Fed districts reported slowing growth as residential construction slackened and energy costs rose.

The Fed, in its Beige Book summary of economic conditions, said the Boston, New York, Philadelphia, Kansas City and Dallas districts reported declines in the rate of growth, but the remaining seven districts reported little change in their pace of activity since the last report, released on July 26.

The Fed said there were widespread price increases for energy, metals and other commodities, but these did not appear to be triggering more general consumer inflation.

"Widespread increases in the prices of energy and certain other commodities persisted since the last report, though most of these increases do not appear to have passed through to finished consumer goods," the Fed said.

/...

See more detail here: "Federal Reserve's 12 bank regions report on economic conditions"

[Ghost Dog]

63. Fed: Economy ambles into the fall

http://news.yahoo.com/s/ap/20060906/ap_on_bi_go_ec_fi/fed_economy

WASHINGTON - The economy ambled into the fall steadily but unstartlingly, with fresh signs of a slowdown as consumers watched spending more warily.

The Federal Reserve's latest survey of America's business climate, released Wednesday, found that "economic activity continued to expand ... but five districts indicated deceleration, while the remaining seven reported little change in the pace of growth."

People held back, especially, on spending for automobiles and household items.

The survey is based on information supplied by 12 regional Federal Reserve banks and collected before Aug. 28. That snapshot will figure into discussions at the central bank's next meeting on Sept. 20.

Many economists believe the Fed will hold rates steady at the September meeting. Others, however, think a rate increase could be in store then or perhaps later this year to thwart inflation.

With the economy slowing, the Fed in early August halted its rate-raising campaign that began more than two years ago. Policymakers are hoping that moderating economic growth will eventually lessen inflationary pressures.

The Fed's survey said that even though businesses are faced with high prices for energy and other raw materials, these higher costs are not necessarily finding their way to shoppers in the form of higher retail prices.

"Widespread increases in the prices of energy and certain other commodities persisted since the last report, though most of these increases do not appear to have passed through to finished consumer goods," the Fed survey found.

The survey said that most of the Fed's districts reported that retail prices "remained steady."

<snip>

Overall, consumer spending increased "modestly in most districts ... though a few districts reported flat to declining sales," the survey said. Sales of automobiles and household goods tended to be sluggish, the report noted.

/...

[54anickel]

3. Morning Ozy! Where ya been (ha-ha?) I've been up for 3 hours again

Another bought of insomnia. :hangover:

I'll have to try and catch a nap later in the day.

[ozymandius]

5. Good morning 54anickel!

Jeebus! Three hours? My sympathies to you. Plus three donuts with coffee.

:donut: :donut: :donut:

Have you been following the Florida election results? Hoowee! I hope Katherine Harris doesn't mind getting stomped too much.

[54anickel]

8. Heh, I still don't understand HOW she won, but sure am grateful THAT

she won. Pretty sad when her own party didn't want her to run and the 2 fellas running against her won't support her run against Nelson. FL looks safe, but then again it might depend on who COUNTS the votes. :eyes:

[AnneD]

40. Morning Marketeers,

:donut: and lurkers. If I had internet at home-we'd have had a grand conversation this am. Instead I have a headache. Wonder if it is the annual migraine :hangover:. Got the b'day call from (belatedly) Mom. Hard to sleep afterwords. I consider myself lucky that Mom is still around to talk to. We have always been close and i cherish our time together all the more these days.

Well the potentially large oil field discovery I posted is all in the news today. Our local CBS affiliate has been getting very interesting. They have a DC correspondent that they cut away to at one point in the morning. It is usually useless sound bites from Herr Rove. Lately, these folks have been asking some pointed questions of the correspondent and have gotten some eyebrow raising responses.

Today the guy was spouting the RahRah about the economy complete with the Bush sound bite about the tax cuts putting more money in our pockets. The correspondent went on to say that we're doing better because gas is now cheap (talking point for the day). I guess they forgot about that report about how our wages have actually gone DOWN. When they did the cut awat for the local anchors to ask a question, his comment was...'there are many people out here that think the gas prices are lower as part of the run up to the election-that the oil companies want the Repubs to retain power'.:wow: The reporter stumbled a bit and said 'well, they do benefit. I am sure if the DEMS were in charge of the house, there would be more hearing on price gouging and fixing. The oil companies are taking less profit now in hopes of helping the current administration.:wow::wow::wow:

That was the first time I have heard an exchange like that in MSM in a long time. I think the worm is turning.

Happy Hunting and watch out for the bears.

[54anickel]

42. Morning Anne,

Sorry to hear you now have a headache. Don't ya just hate it when you can't get a decent night's sleep? I dunno know why I get these spells, I'm just glad they don't happen too often.

I wish I could have caught that report - sounds priceless! Let's hope the "worm is turning".

[AnneD]

45. I think ....

there is a lot of stuff like that now being reported on the local level-under the radar screen if you will. Rove et al cannot freeze them out like he can the press corp. Our local newscasters see all the homeless on the street. They have family, friends, and neighbours that can't find jobs. They hear about the local plant closing and not just the Rove echos bouncing around the dinners and press rooms, or spin alley. They are closer to main street than Wall Street or K Street.

[ozymandius]

4. Oil eases toward $68

TOKYO (Reuters) - Oil drifted lower toward $68 a barrel on Wednesday, hovering near this week's three-and-a-half month low as dealers feared oil stocks may quickly build up now that the northern hemisphere summer season has ended.

An unexpectedly calm hurricane season so far this year and the perception of a reduced risk to Iran's oil exports contributed to the downturn, helping knock about $10 off U.S. futures since their all-time high touched in mid-July.

U.S. light crude lost 24 cents to $68.36 a barrel, having fallen as far as $67.77 a barrel earlier this week, its lowest since May 22. London Brent crude was 23 cents lower at $67.86.

While dealers remain on alert for possible sanctions against Iran and a new potential hurricane brewing in the distant Atlantic, external risks have largely been set aside this week as dealers refocus on global supply and demand balances.

more

[ozymandius]

6. Dip in gas prices may lift entire economy

-excerpt-

Over the past month, gasoline prices have dropped more than 30 cents a gallon with the price of fuel at the lowest level since mid-April.

The falling prices are a welcome benefit to consumers who have been grumbling all year about how much more it costs to fill their tanks. With more money in motorists' pockets, the economy should benefit as well since this is the time of year when consumers tend to spend more time at the mall. In fact, the ripple effect of falling energy prices should help everyone from Detroit automakers to the airline industry to incumbents running for office this fall.

"The decline in gasoline prices has the effect of a tax cut," says Richard DeKaser, chief economist at National City Corporation, a bank in Cleveland. "Of course it's only partly reversing the 'tax increases' of the past three years."

-cut-

Falling gasoline prices, which will help ease some inflationary concerns, are also part of a favorable economic mosaic that is developing this fall. The Department of Labor reported Friday that the nation's unemployment rate in August dropped to 4.7 percent, down from 4.8 percent in July. Even more important, the economy created 128,000 jobs, a number consistent with moderate economic growth.

http://www.csmonitor.com/2006/0905/p03s03-usec.html

Any idiot can tell it's election season.

[54anickel]

9. That's what they're hoping for anyway...it's the goal. Gotta wonder

what backroom promises were made by the GOP to get this "gift".

[ozymandius]

10. You can bet that when the next price shock comes -and it will-

these oil execs will, again, not be required to testify under oath. Heck - if the GOP maintains control of the Senate these execs will not even be called to D.C.

[54anickel]

12. My prediction, the peak of the heating fuel season. Unless there's

another major storm in the gulf that is.

So did they ever tap into the SPR to cover for BPs follies in Prudhoe Bay?

[RUMMYisFROSTED]

28. Damn "grumblers!"

They've been grumbling all year! The nerve! :grr:

[54anickel]

13. BP hit by new US lawsuit

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=412424&in_page_id=3

OIL giant BP has been hit by a new legal action claiming it manipulated crude oil prices by refusing to allow traders access to US storage facilities.

The action comes as BP faces a raft of legal woes including possible criminal action and shareholder suits over a massive oil spill in Alaska.

The oil giant is also being investigated over alleged price manipulation in the US propane market, as well as over its trading of crude oil and gasoline in America.

The latest suit has been filed in New York by oil futures trader Richard Hershey, who says he suffered damage caused by BP's refusal to open its storage facilities at Cushing, Oklahoma between January 2003 and December 2004. Cushing is the most significant trading hub for crude oil in North America.

'BP abused its dominant market position by not making available space at its crude oil storage facilities in Cushing to market participants who were obligated to deliver crude oil at Cushing,' the complaint says.

more...

[54anickel]

14. BP hires former CIA legal chief

http://www.timesonline.co.uk/article/0,,29390-2344232,00.html

BP has hired Stanley Sporkin, a former general counsel at the CIA and District Judge, to the new role of employee ombudsman for the oil giant’s US operations.

Mr Sporkin told BP’s American staff in a memo last week that he wants to act as an "independent listening post" for employee issues which he will then seek to address with senior management.

snip>

Last month BP shut down part of its Prudhoe Bay oil field in Alaska after uncovering corrosion in pipes and remains locked in legal wrangling over the death of 15 workers at a Texas refinery last year.

Mr. Sporkin, 74, was general counsel of the CIA during Ronald Reagan’s presidency, one of the most intense periods of the Cold War. His career has also included a 20-year stint at the Securities and Exchange Commission, the US regulator, and 14 years as a judge in the District of Columbia.

more...

[ozymandius]

7. European equities edge lower

European equities were fractionally lower on Wednesday after a lacklustre US session, but losses were capped by a number of positive earnings reports and oil prices dropping back below $69 a barrel.

By mid morning, the FTSE Eurofirst 300 was down 0.2 per cent to 1,376.45, while Frankfurt's Xetra Dax fell 0.2 per cent to 5,871.66, London's FTSE 100 shed 0.1 per cent to 5,973.5 and the CAC 40 in Paris lost 0.1 per cent to 5,170.45.

-cut-

Swedish truckmaker Volvo (NASDAQ:VOLVY - news) gained 3.6 per cent to SKr434 after Cevian, the activist investment fund, announced it had built up a stake of 5 per cent of the voting rights and was seeking a seat on the company's election committee.

more

[Ghost Dog]

49. European shares close down as inflation fears resurface

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060906:MTFH54114_2006-09-06_16-25-17_L06539612&type=comktNews&rpc=44

PARIS, Sept 6 (Reuters) - Inflation and interest rate worries came to haunt European shares again on Wednesday, pushing stock indexes to their worst close in nearly two weeks, with mining and technology stocks leading the march down.

Heavily weighted energy stocks such as Total (TOTF.PA: Quote, Profile, Research) fuelled the market's selling momentum, as oil prices lingered around 3-1/2 month lows, while Nokia (NOK1V.HE: Quote, Profile, Research) slid more than 2 percent as speculation persisted that the world's biggest handset maker may lower its earnings forecasts.

The FTSEurofirst 300 <.FTEU3> index of leading European shares shed 1.1 percent to 1,364.01 points -- its lowest close since Aug. 25 -- accelerating losses after revised U.S. data showed worker compensation up much more than initially thought.

The report revived worries among investors of a worst-case scenario where the Federal Reserve would be forced to continue raising interest rates just at a time when economic data shows the world's biggest economy is slowing down.

A separate U.S. economic report showing the pace of growth in the U.S. service sector had risen in August, and inflationary pressures had eased, did little to ease investors' worries.

"Will growth slow too much or will the Fed be forced to tighten further? The model's expected return suggests that the Goldilocks outcome is unlikely to occur," said Richard Bernstein, chief investment strategist at Merrill Lynch.

There were also new rate worries this side of the Atlantic, with traders citing new fears that the Bank of England may, contrary to expectations, tighten borrowing costs on Thursday after its two-day meeting.

London's FTSE 100 (.FTSE: Quote, Profile, Research) index shed 0.9 percent, while Paris's CAC 40 <.FCHI> and Frankfurt's DAX <.GDAXI> lost 1.1 percent and 1.2 percent, respectively. The Swiss Market Index <.SSMI> was down 0.65 percent.

/...

[Ghost Dog]

50. FTSE ends sharply lower in broad-based sell-off

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060906:MTFH54042_2006-09-06_16-22-17_BRY658916&type=comktNews&rpc=44

LONDON, Sept 6 (Reuters) - British shares suffered big falls on Wednesday, led by miners and oil stocks, as markets tracked losses in other global equities on inflation concerns and before a Bank of England interest rate announcement on Thursday.

Energy supply firm, Drax Group (DRX.L: Quote, Profile, Research) was down 3.3 percent, hit by a broker downgrade and after traders said bid talk had faded.

Miners were among the major decliners, which traders attributed to profit taking after a recent strong run. BHP Billiton (BLT.L: Quote, Profile, Research), Rio Tinto (RIO.L: Quote, Profile, Research) and Anglo American (AAL.L: Quote, Profile, Research) all fell between 1.8 and 3.2 percent.

The International Monetary Fund said aluminium and copper prices were above sustainable levels and global metal prices were likely to retreat over time from their current high levels as new mine output boosted supplies.

The FTSE 100 index (.FTSE: Quote, Profile, Research) closed down 0.9 percent or 52.4 points at 5,929.3, with continental European markets also sharply lower. The FTSE 100 index, which hit a three-month high in the previous session, is still up 5.5 percent so far this year, however.

U.S. shares were also lower and the pan-European FTSEurofirst <.FTEU3> 300 index shed 1 percent on Wednesday.

In foreign exchange markets, the turbulence surrounding the leadership of British Prime Minister Tony Blair coupled with uncertainty over British interest rate prospects hit sterling, sending it to two-week lows against the dollar and the euro.

/...

[ozymandius]

11. It's a short morning for me folks.

I'll check back this evening. Have a wonderful day watching the crap shoot!

Ozy :hi:

[54anickel]

15. Bye Ozy. Have a good day!!! n/t

[54anickel]

16. IMF warns of ‘severe global slowdown’

http://www.ft.com/cms/s/7129cfce-3d34-11db-9b3d-0000779e2340.html

The world is set to enjoy a fifth record year of high growth next year, says the International Monetary Fund, but it warns that the risks of a sharp slowdown have significantly increased.

The IMF will say next week that the world economy is on track to grow at 5.1 per cent this year but the risk of a severe global slowdown in 2007 is stronger than at any time since the 2001 terror attacks on the US.

“Risk to the global outlook is clearly tilted to the downside,” the IMF said, adding, “there is a one-in-six chance of growth falling below 3.25 per cent in 2007.”

snip>

The IMF warns slower growth could be triggered by a sharp US housing market slowdown or by surging inflationary expectations that forced central banks to raise interest rates.

more...Guess we can just party on thru the end of '06!

[UpInArms]

27. EU to discuss U.S. slowdown effects at IMF meeting

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-09-06T121647Z_01_L06370450_RTRIDST_0_ECONOMY-IMF-US.XML

BRUSSELS, Sept 6 (Reuters) - Europe will raise at this month's IMF meeting concerns about possible knock-on effects in interest and foreign exchange rates caused by any U.S. economic slowdown, the European Union's monetary affairs chief said.

"I have mentioned as a downside risk for growth in the next year among other things, first of all the prices evolution, and second the possible slowdown in the U.S. economy," Economic and Monetary Affairs Commissioner Joaquin Almunia said on Wednesday.

"But not because of a direct impact on external sector activity but because of the possible consequences of the U.S. slowdown in U.S. rates and exchange rates," he said.

"This is one question that concerns us and that we will discuss again with other partners including the U.S. authorities ... during the IMF meeting in Singapore in 10 days."

...a bit more...

[Ghost Dog]

51. World economy in best shape in 50 yrs: Forbes

http://www.expressindia.com/fullstory.php?newsid=73471

Bloomberg September 6: The world economy is in its best shape in 50 years and concerns about US economic growth and its trade deficit are overplayed, Forbes magazine Chief Executive Officer Steve Forbes said.

The US economy should grow between 3 per cent and 3.5 per cent for the rest of this year, Forbes said at a conference in Singapore. US consumer spending will continue, he said.

Some investors are concerned a slowdown in the US may trigger declines in Asia where export-driven economies such as Singapore and Thailand rely on demand from North America. Only 'an utter disaster' could derail global expansion, Forbes said.

"In terms of the global economy, it hasn’t been this strong economically since the 1950s, 1960s. Trend lines are profoundly positive," Forbes told delegates.

/more empty spin...

[AnneD]

62. Ghost Dog...

empty spin is right. I thought India and China had better growth. Even Russia posted better growth if memory serves. Thanks for the posts, one should start the day with a laugh.

[54anickel]

66. Good grief, he's been talking spin lessons from Bushco!!!

[Ghost Dog]

53. G7 Group: Warns Of Risks For Global Financial System

http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20060906\ACQDJON200609061346DOWJONESDJONLINE000927.htm&selected=9999&selecteddisplaysymbol=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked&lang=&link=&headlinereturnpage=http://www.international.na

PARIS -(Dow Jones)- The Financial Stability Forum said Wednesday that although the global economic outlook remains broadly supportive of financial stability, the system could be destabilized by a number of potential risks.

The FSF, a working group set up by the Group of Seven most advanced democracies in 1999, pointed to heavily indebted households in some countries, a possible collapse in housing markets, a growing number of debt financed corporate acquisitions and the growing use of exotic financial instruments, as well as persistent global current account imbalances.

"We're not saying there's going to be a crisis," FSF Chairman Mario Draghi said at a press conference in Paris following a meeting of the working group.

Draghi, who is also governor of the Bank of Italy, said that, with the U.S. economy softening slowly and Europe's fledgling recovery, the global economic outlook remains broadly positive.

Nonetheless, Draghi said, the FSF has more work to do to ensure that any crisis in a compartment of the international financial system is contained, and doesn't spread to the rest of the system.

Draghi said that with the growing use of derivatives and other innovative financial products, financial authorities "must make sure people know what they are buying."

/...

[54anickel]

17. Fannie Mae, Freddie Mac Retreat as Mortgage Bond Market Mutates

http://www.bloomberg.com/apps/news?pid=20601103&sid=aqnQT4X2L884&refer=us

Sept. 6 (Bloomberg) -- Fannie Mae and Freddie Mac, the biggest sources of money for Americans buying homes, are becoming the white elephants of the mortgage bond market as regulators and competitors take away their privileged position selling securities.

The federally-sponsored companies, which leveraged their political advantages into control over 40 percent of all housing loans, are shrinking after billions of dollars in accounting mistakes led to the ouster of their chief executive officers and calls from the Bush administration for increased regulation.

Nowhere is the decline more evident than in the market share Fannie Mae and Freddie Mac have lost. The companies accounted for 38 percent of mortgage-bond sales this year through June, down from a record 70 percent in 2003, according to data service Inside MBS & ABS. The bonds, which help determine rates homeowners pay on loans, have risen 51 percent since 2001 to $6.2 trillion, Bond Market Association data show.

``It's unlikely they will resume a role where they dominate the whole marketplace,'' said Andrew Woodward, former head of the mortgage lending unit at Bank of America Corp., the second- largest U.S. bank by assets after Citigroup Inc.

The declines at Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac may continue as the first real estate slump since the 1990s causes lending to contract by 19 percent this year, according to the Mortgage Bankers Association, a Washington-based trade group.

Homebuyers increasingly prefer adjustable-rate loans to the fixed-rate debt Fannie Mae and Freddie Mac typically buy. A quarter of this year's loans will be so-called ARMs, the association says.

Greenspin's Mission Accomplished - transfer the systemic risk to the individual :eyes:

more...

[54anickel]

38. Mortgages Grow Riskier, and Investors Are Attracted

http://www.nytimes.com/2006/09/06/business/06place.html?pagewanted=1&ref=business

Default rates are inching up, credit ratings agencies have become more cautious and regulators have threatened to crack down on loose lending standards.

Yet even as analysts and officials have been ringing warning bells about exotic mortgages for months and fresh housing data has indicated that the risks are rising, investors have seen little reason to abandon the bonds backed by these home loans. To the contrary, they have increased their exposure to the securities.

snip>

In the first six months of the year, investors bought residential mortgage-backed securities totaling more than $1 trillion, up 5 percent from the period a year ago, according to data from Inside Mortgage Finance Publications, a publisher of industry newsletters.

And Wall Street has pushed further into the mortgage-backed securities business in recent years, profiting handsomely from the business of packaging and selling mortgages.

In a deal seen as an effort to catch up with those firms, Merrill Lynch announced yesterday that it would pay $1.3 billion to buy the First Franklin Financial mortgage unit of the National City Corporation, which was among the first to issue interest-only mortgages that allow borrowers to pay no principal in the early years of their loans. In August, Morgan Stanley acquired Saxon Capital Inc., a residential mortgage lender and servicer, and Deutsche Bank and Barclays have been buying home lenders to feed the demand for mortgage-backed securities.

more...

[54anickel]

18. Party may be over for investment banks

Analysts are slashing estimates for brokerage firms. The best days for the industry may be over, for now.

http://money.cnn.com/2006/09/06/news/companies/brokerage_stocks/index.htm?source=yahoo_quote

NEW YORK (CNNMoney.com) -- Sluggish stock trading and a slowdown in merger activity are expected to take a bite out of third-quarter earnings at some of the nation's top investment banks.

Earnings season is just around the corner for major players like Goldman Sachs (Charts), Lehman Brothers (Charts) and Bear Stearns (Charts), which are all slated to report their fiscal third-quarter results next week. But Wall Street is already bracing itself for some disappointments with analysts slashing estimates for some of the banks.

And some on Wall Street expect that whatever positive sentiment investors had for the sector could fizzle, sending the firm's stocks sharply lower.

While there's little surprise that the industry is experiencing some slowdown in the summer months (they're not called the summer doldrums for nothing), analysts fear that the latest quarter could start a prolonged downturn in earnings for the banks after an unusually strong period of equity underwriting and growth in the capital markets.

more...

[54anickel]

39. Good Times Are Over for Europe's Investment Banks

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_lynn&sid=aLWL_yji0lv8

Sept. 6 (Bloomberg) -- The last three years have been among the best ever for investment banks. Record bonuses, plenty of jobs and new ways to make money. If you couldn't get ahead, you were in the wrong trade.

And now? The industry isn't about to crash, but the first half of 2006 may well have been a high-water mark that won't be seen again for several years.

As the global economy slows, and the era of ultra-cheap money comes to a close, the seas are about to get much choppier. Investment banks like to dress up their business in fancy concepts, but at heart they are traders in financial markets. A simple rule applies: When the markets are booming, you'll do well, but when they're not, you'll get hurt.

``It's a bet on the direction of the markets,'' Tim Price, investment strategist at Union Bancaire Privee in London, said in a telephone interview. ``If you think the markets are going to crash, then they'll suffer. Last time there was a big sell-off in the markets, there was no safe haven for the banks.''

more...

[54anickel]

19. Study: 401(k)s, IRAs underperform pensions

http://www.boston.com/business/personalfinance/articles/2006/09/06/study_401ks_iras_underperform_pensions/

Private 401(k) retirement-savings plans have underperformed traditional company pension plans by one percentage point a year, according to a Boston College report released yesterday that found individual retirement accounts fared even worse.

The findings of the review, which studied about 5,000 companies that sponsored both kinds of plans from 1988 to 2004, underscore the risks facing many workers as companies shed traditional pension plans in favor of vehicles such as 401(k)s.

In theory these plans offer more flexibility for modern workers who change jobs often, but some traditional financial advisers have argued that most people aren't as good at investing their money as pension plan professionals.

Those worries were supported by yesterday's report from Boston College's Center for Retirement Research. Its director, Alicia H. Munnell, acknowledged a one percentage point difference isn't significant in any particular year. ``But this is every single year, and if that were true over a person's 40-year worklife, they would end up with 20 percent less at retirement," she said.

more...

[AnneD]

41. This just confirms...

what many of us thought. If this admin is plugging it-it isn't good for Joe 4 pack (adjusted for inflation). I get on my knees every night and thank God I have a pension. Even Social Security has a better return that some of this. And I can give you some advice that you can take to the bank. Once that bill goes into effect and workers HAVE to put money into 401's, folks are going to loose more than 1% a year. These 401 sales men are like sharks smelling blood in the water-once they get a whiff, the investment waters will be thick with them and they will churn and charge so much in fees they will shred your account.

My thoughts? I am starting to favor Roths more and more. The tax rates are bound to go up and you can pull much of what you put in a Roth out without taking a tax hit (or an ever increasing tax burden). The pretax accouts offer some chance to shelter your income BUT it does reduce your income which is what your Social Security is based on. It is best to have a mix-but the mix would depend on your age, what you have set aside, etc. Well that's my $0.02 and I'd love to hear other thoughts on the topic.

[54anickel]

20. OT - The War Is Lost (Paul Craig Roberts)

http://counterpunch.org/roberts09042006.html

The Pentagon’s latest quarterly “progress” report to Congress on Iraq is a grim tale of a lost war. The Pentagon told Congress what Bush, Cheney, Rumsfeld, and propaganda organs such as Fox “News” never tell the American public, namely:

(1) The Sunni-based insurgency remains “potent and viable” despite spiraling Sunni-Shiite violence and beefed up US forces.

(2) Since the last report three months ago, Iraqi casualties from “sectarian clashes”--the Pentagon’s euphemism for civil war--have soared by more than 50 percent.

(3) From May when the new Iraqi government was established until August, the average number of weekly attacks increased sharply to 800.

(4) Since the previous report, Iraqi daily casualties have jumped by 50 per cent from 80 per day to 120 per day. Currently, Iraqis are dying at the rate of 43,800 per year from violence.

The Iraqi government cowers behind the fortified walls of the “Green Zone.” On August 31, the Kurds in the north took down the Iraqi flag and replaced it with the Kurdish one. Most of Iraq is ruled by Shiite and Sunni militias. Conflict between them has forced 160,000 Iraqis to flee their homes.

Who is going to tell Bush that the war is lost?

more...

[54anickel]

21. One Up, One Out: More Bush Lineup Changes

http://www.latimes.com/news/nationworld/nation/la-na-newstaff6sep06,0,5477800.story?coll=la-home-nation

snip>

Bush nominated former Federal Highway Administrator Mary E. Peters to the transportation post, replacing Norman Y. Mineta, the veteran San Jose congressman who had been the only Democrat in the Cabinet.

snip>

Accepting her nomination at the White House on Tuesday, Peters said her top priority would be to reduce congestion in all types of transportation.

"Today, our vital transportation infrastructure is showing signs of aging," she said. "We are experiencing increasing congestion on our nation's highways, railways, airports and seaports, and we're robbing our nation of productivity and our citizens of quality time with their families."

As federal highway chief, a position she held from 2001 until 2005, Peters sought to promote the use of special toll lanes to ease congestion and worked to allow private entrepreneurs into road planning and construction — a field traditionally dominated by state and local governments. She left the government to join HDR Inc., an engineering firm, as a vice president and policy advisor.

"She is very market-oriented and future-oriented," said Robert Poole, director of transportation studies for the libertarian Reason Institute think tank in Los Angeles. "She really understands the growing obsolescence of paying for highways out of gas taxes, and she understands the importance of tolling and market pricing for the highway system of the future."

How Peters' free-market principles will carry over into the heavily regulated sphere of aviation policy remains to be seen, but the airline industry urged the Senate to promptly confirm her....

more...

[cosmicdot]

48. Mark McClellan, Scott's bro, is leaving, too

"...timing of McClellan's departure raised eyebrows among some Democrats in Congress. It comes just as growing numbers of seniors are expected to hit a gap in coverage, known as the 'doughnut hole'."


Which Democrats' eyebrows were raised? Doesn't say.

Certainly not the ones who voted FOR the $&%#% bill.

[54anickel]

55. Wants to spend more time with the family. And what's this, cripes

can ANYONE hang out the eCONomist shingle these days? Oh yeah, I suppose so if Mogambo can do it.


http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=39641

The resignation of CMS Administrator Mark McClellan -- who announced on Tuesday that he will leave the agency in about five weeks -- "creates a critical vacancy as the Bush administration enters its final two years, a time when skilled political appointees typically think of leaving the government rather than joining it," the Washington Post reports (Lee, Washington Post, 9/6).

McClellan, a medical doctor and economist, said he wants to spend more time with his family and probably will join a think tank or take a position in academia.

[UpInArms]

22. daily dollar watch

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

Last trade 85.17 Change +0.14 (+0.16%)

Dollar Strengthens, Housing Sector Declines Further

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar___No1157486987824.html

US Dollar

Temporary dollar strength was witnessed on the day following Monday’s observance of the US Labor Day holiday. With consecutive losses against the majors in recent sessions, the underlying greenback was due for a break. However, the current strength may be considered only temporary as an empty economic schedule this week is likely to add to further weakness. Even the scheduled pieces of data are likely to overshadow the mounting speculation that the Federal Reserve is indeed at the end of the current monetary tightening cycle. Why? First and foremost, weakness in the housing sector still looms over the market. Today saw the release of a government report that cited the slowest growth in housing prices for the second quarter in almost 30 years. Likely attributed to the lack of consumer interest due to higher interest rates and rising energy costs, the sector slowdown may be more reflective of a turn in consumption habits as the overall economy begins to grow at a slower pace. The notion trickles into a slower growth rate, which was witnessed when US gross domestic product figures posted a 2.9 percent gain compared to a 5.6 percent rate forecasted for the first quarter. Ultimately, the slower rate of growth will act as a confirming signal that the recent 2-year wave of hikes is finally making their way through the economy. Secondly, the sentiment looks to have shifted among policy makers as steadfast hawkishness has been replaced by a more lax “wait and see” approach. The approach was reflected on the day following an interview with St. Louis Fed President William Poole in the New York session. Commenting on the current considerations by the Federal Reserve, Poole stated that the Fed can be “patient” in considering further rate hikes in the coming quarter as inflationary pressures are “well controlled”. Although not a voting member this year, the suggestions seem likely to be shared amongst the whole board and will likely seal the deal for further dollar weakness should negative economic numbers continue their trend.

...more...

[54anickel]

24. Look at her go!!! 14 minutes later it's at 85.28

[Ghost Dog]

59. Dollar up as labor cost data points to inflation risks

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060906:MTFH57902_2006-09-06_18-53-16_N06525049&type=comktNews&rpc=44

NEW YORK, Sept 6 (Reuters) - The dollar rose broadly on Wednesday after data on labor costs and growth in the service sector bolstered the case for the Federal Reserve to increase interest rates.

The dollar got a boost from data that showed unit labor costs in the second quarter grew 5 percent compared with the same period a year ago, the largest gain since the third quarter of 2000. For details, see .

Although the market sees little chance the Federal Reserve will raise interest rates again at its next meeting this month, persistent inflation pressures could force the central bank to resume a tightening policy, drawing investors to the dollar.

"If anything it's the rise in unit labor costs that has people a bit concerned," said Michael Woolfolk, senior currency strategist at Bank of New York. "It does provide some fuel for those who feel that the Fed could be forced to raise interest rates again, perhaps early next year."

The euro <EUR=> was trading down 0.1 percent at $1.2805 in mid afternoon New York trade, above a session low of $1.2770 on electronic trading platform EBS.

The dollar briefly pared most of its gains versus the euro after the Federal Reserve's Beige Book survey showed that five of the 12 Fed districts reported slowing growth, and said that a broad rise in energy costs did not appear to be boosting inflation.

Against the yen, the dollar climbed to highs of 116.90 yen <JPY=> before retracing to 116.65 yen, still up 0.5 percent.

/...

[54anickel]

23. Bush to confer with carmakers after elections

http://www.freep.com/apps/pbcs.dll/article?AID=/20060906/BUSINESS01/609060308

The Bush administration said Tuesday it had agreed with heads of Detroit automakers to have the president meet with them after the November elections.

Word came the same day Michigan Democrats called on George W. Bush to meet Friday during a fund-raising visit to Clarkston for U.S. Senate candidate Michael Bouchard. The political fallout surrounding the face-to-face between Bush and the heads of General Motors Corp., Ford Motor Co. and Chrysler Group first proposed for May has grown to overshadow the expectations automakers had for any benefits from such a meeting. The three automakers wanted to discuss such trade and energy issues as increasing alternative fuels and U.S. currency policy.

White House spokesman Alex Conant said Tuesday that the administration and the automakers "all agreed that it would be best to meet after the election." Conant said no firm date had been set.

snip>

After two delays and rescheduling, some industry insiders said the meeting would not happen because it would spotlight massive job cuts and restructuring at GM and Ford, both of which are shedding tens of thousands of jobs. Bush and his advisers have been trying to reverse voters' negative perceptions about the U.S. economy.

"A meeting would highlight problems in the economy," said Norman J. Ornstein, a political analyst and resident scholar at the American Enterprise Institute for Public Policy Research. "I would think a president at this point would want to set up a meeting to show, while he feels people's pain, that at the same time he has an economic plan for getting out of it."

more...

[UpInArms]

25. OT: Prophet and Loss (Pat Robertson's shady dealings)

http://www.radaronline.com/features/2006/09/prophet_and_loss.php

To hear Pat Robertson tell it, the Lord is something of a micromanager. Whether it's with Florida hurricanes, 9/11, or Ariel Sharon's stroke, Robertson's God is always intervening in the affairs of mankind, dispensing vigilante justice to his enemies and rewarding the faithful with natural disaster protection and cash prizes. But as viewers of the 700 Club are well aware, it's not just acts of war or nature that are taking up His time. In spare moments, the Creator has taken a personal interest in the financial affairs of the preacher himself.

Over the years, the former presidential candidate earned a reputation as a savvy deal broker with a wide network of interlocking businesses and charities. The high point of his career came in 1997, with the $1.9 billion sale to Fox of the International Family Entertainment Network, a for-profit venture built with charitable donations from his flock. In the past decade, the televangelist has leveraged this divine payout to shore up the many institutions that depend on him for their survival. Groups like the 700 Club, Christian Broadcast Network, Regent University, Operation Blessing, and the American Center for Law and Justice receive millions of dollars from viewers who are exhorted daily by the preacher to send in their blessed checks (CBN alone took in $160.8 million in public donations last year).

<snip>

Steeple Chase



Business: Tega Farms (1997-2002), home to a stable of racehorses that included Mr. Pat, a $520,000 descendent of Secretariat that Robertson named after himself.
Sketchy Business Associate: My man Rocco's got a hot tip in the eighth.
Notable Detail: Robertson's Christian Coalition is avowedly anti-gambling.
Outcome: Just two weeks after an article in the New York Times about Robertson's passion for horse racing prompted a Category Five conservative shitstorm, Robertson put his horses out to pasture. Though he probably broke even on the venture itself, his flip-flop on gambling is believed to have impacted donations.

<snip>

Out of Africa



Business: Freedom Gold LLC (1998-2003), a gold-prospecting operation in Liberia.
Sketchy Business Associate: Genocidal kleptocrat Charles Taylor, who helped fund Al Qaeda with blood diamonds from Sierra Leone and has been accused of abducting, torturing, raping, and arbitrarily killing his citizens, not to mention pressing children into military service, was to receive 10 percent of any profits.
Notable Detail: Officially registered in the ever-reputable Cayman Islands.
Outcome: Despite Robertson's best efforts, Taylor was deposed and the operation mothballed, with estimated losses around $8 million. But the Rev. is a glutton for punishment. This July, Freedom Gold announced plans to restart operations.

Park of the Covenant



Business: Christian Heritage Center (2006), a Christian theme park on the Sea of Galilee nicknamed "Jesusland."
Sketchy Business Associate: Robertson, who once made claims about a world conspiracy involving Jewish bankers and the Antichrist, partnered with the Israeli Tourism Board.
Notable Detail: The Center, which was to feature a Holy Bible Garden, Christian Experience Auditorium, and hiking trails that "Jesus would have walked," was projected to attract more than a million additional zealots to Israel each year.
Outcome: Angered by Israel's concession of the Gaza Strip to the Palestinian Authority, Robertson claimed that Ariel Sharon's stroke was holy retribution. The Israeli government backed out of the project soon after. Though Robertson lost little of the $48 million he'd planned to pump into the park, his relationship with the chosen people suffered a massive blow.

...more at link...

[54anickel]

26. Report Estimates the Costs of a Stock Options Scandal

http://www.nytimes.com/2006/09/06/business/06options.html?ref=business

WASHINGTON, Sept. 5 — A new study estimates that the stock options backdating scandal may cost shareholders hundreds of millions of dollars. The study was released on the eve of two Senate committee hearings that plan to examine the scope of the widening investigation into improper options practices.

Three researchers at the University of Michigan estimated that backdating stock options between 2000 and 2004 helped sweeten the average executive’s pay by more than 1.25 percent, or about $600,000. But the fallout from the recent options investigations has caused those executives’ companies to fall in market value by an average of 8 percent, or $500 million each.

“For about $600,000 a year to the executives, shareholders are being put at risk to the tune of $500 million,” the study concludes.

The working paper, expected be made public later this week and to be published in The Michigan Law Review next year, appears to be the first to put dollar figures on the costs and benefits of backdating. It analyzed thousands of stock option grants at 48 companies that announced they were under investigation as of the end of June, and measured the maximum gains for those executives if their options were backdated over a 90-day period as well as the drop in value at those 48 companies in the 10 days before and after news of a backdating inquiry was released.

more...

[UpInArms]

29. Bush to meet Big 3 auto executives after election

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-09-06T011649Z_01_N05233449_RTRIDST_0_BUSH-AUTOS-UPDATE-1.XML

WASHINGTON, Sept 5 (Reuters) - President George W. Bush will hold a twice-postponed summit with executives of the Big Three U.S. automakers after the November election on fuel saving technology and other issues, the White House said on Tuesday.

"The White House has been in touch with all three -- and we all agree it's best to try to meet after the election because even the idea of a meeting has gotten way too mired down in politics," said White House spokeswoman Dana Perino.

Two previously scheduled meetings with the chief executives of Detroit's Big Three automakers -- Ford Motor Co. (F.N: Quote, Profile, Research), General Motors Corp. <GM.N.> and Chrysler Group <DCX.N DCXGn.DE>, the North American unit of DaimlerChrysler -- were canceled because of the automakers and presidential travel.

The automakers are seeking incentives to broaden access to alternative fuels, hoping to boost their sagging finances and reduce reliance on imported oil.

...more that sounds like an info-mercial for Dimson...

[54anickel]

32. Well that reads a lot differently than the Detroit Free Press version of

the story....

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2496216#2496304

[UpInArms]

30. Bush to nominate Goldman's Steel to Treasury post

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-09-05T235829Z_01_N05400185_RTRIDST_0_BUSH-TREASURY.XML

WASHINGTON, Sept 5 (Reuters) - President George W. Bush intends to nominate Robert Steel, a Goldman Sachs executive, to the position of Treasury undersecretary for domestic finance, the White House said on Tuesday.

If confirmed by the Senate, Steel would replace Randal Quarles who last month said he would resign when Congress adjourned later this year.

Steel is currently a senior director of Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research), and was previously a vice chairman of the firm, the White House said.

Quarles, a key player in the Bush administration's efforts to reform government-sponsored housing enterprises, became undersecretary for domestic finance in August 2005 and was the third high-ranking Treasury official to step down since Treasury Secretary Henry Paulson took over from John Snow on July 10.

...a bit more...

[54anickel]

34. Pre-market yada

09:15 am : S&P futures vs fair value: -6.6. Nasdaq futures vs fair value: -13.0.

09:00 am : S&P futures vs fair value: -6.5. Nasdaq futures vs fair value: -12.0. Futures trade continues to languish near morning lows, setting the stage for equities to open in negative territory. Even though market risks have been reduced because a patient Fed is unlikely to go too far with its tightening, coupled with another 1.0% pullback in oil prices easing upward pressure on overall inflation and Ford Motor (F) gaining some credibility for its restructuring efforts after tapping a new CEO, a sense that the market is overbought at current levels (i.e. the Dow, S&P 500 and Nasdaq surged 1.7%, 2.2% and 4.4%, respectively, in August) is overshadowing everything else and prompting investors to lock in recent gains.

08:30 am : S&P futures vs fair value: -6.3. Nasdaq futures vs fair value: -12.8. Futures trade weakens following GDP revision and now suggests an even lower open for the indices. The final read on Q2 productivity was revised higher to a 1.6% annual rate, matching economists' forecasts; however, unit labor costs -- a key indicator for wage-based inflation -- rose a larger than expected 4.9% (consensus 4.0%). Bonds, which were down ahead of the report, have slipped even further into the red, as the 10-yr note is now down 10 ticks to yield 4.82%.

08:00 am : S&P futures vs fair value: -4.9. Nasdaq futures vs fair value: -8.8. Futures indications are trading well below fair value, signaling a negative start for stocks. With the Dow posting gains in five of the last six trading days and near multi-year highs, along with the Nasdaq closing higher in 13 of the last 16 sessions, some early profit taking is in order. Also adding to hesitation on the part of buyers has been Intel's (INTC) widely anticipated layoff announcement that was at the low end of some analysts' expectations and an upcoming revision to Q2 Productivity (8:30 ET) that may show a sharp rise in unit labor costs, which are likely to start creating inflationary pressures.

06:25 am : S&P futures vs fair value: -3.1. Nasdaq futures vs fair value: -5.8.

06:20 am : FTSE...5969.00...-12.70...-0.2%. DAX...5872.02...-12.05...-0.2%.

06:20 am : Nikkei...16284.09...-101.87...-0.6%. Hang Seng...17258.51...-180.29...-1.0%.

[54anickel]

36. 9:47 - stumbling from the gate

Dow 11,426.93 -42.35 (-0.37%)
Nasdaq 2,185.03 -20.67 (-0.94%)
S&P 500 1,305.89 -7.36 (-0.56%)
10-yr Bond 4.823 +0.042 (+0.88%)
30-yr Bond 4.969 +0.037 (+0.75%)
NYSE Volume 227,351,000
Nasdaq Volume 179,376,000

09:40 am : Given the scope of recent market gains, a sense that stocks are overbought at current levels has prompted some early profit-taking and left stocks lower across the board at the onset. Also, with July's tame inflation numbers adding to the growing conviction that the Fed may not raise rates further this year and largely responsible for the market's impressive August performance, a sharp rise in Q2 unit labor costs -- key indicator for wage-based inflation and item in the Fed's watch list, has exacerbated early nervousness. Earlier, the Labor Dept. showed that the final read on Q2 productivity came in at higher 1.6% annual rate, matching economists' forecasts and good from an inflation standpoint; however, unit labor costs rose a larger than expected 4.9% (consensus 4.0%), leaving the year-over-year increase at 5% -- the largest since 1990. DJ30 -36.10 NASDAQ -18.35 SP500 -6.49 NASDAQ Vol 118 mln NYSE Vol 76 mln

[54anickel]

37. Mental Defectives Just Trying to Make a Fast Buck (Mogambo)

http://www.kitco.com/ind/Daughty/sep62006.html

snip>

And speaking of supply and demand, do you want to know why meat has not exploded in price during the Mogambo Pizza Cycle (January through December), when demand typically rises? One reason is because of a short-term excess of supply, as indicated by the KOTV.com article "Drought Conditions Prompts Oklahoma Ranchers To Sell Off Their Cattle."

snip>

The new federal pension bill, the so-called Pension Protection Act, is being passed and signed into law right now because the government wants more people to put more money into the stock market. Otherwise, the people already invested in the stock market will stop showing gains, and stop reporting taxable gains, and start showing actual losses, and deducting those losses on their income tax returns.

The official rationale for this new pension law is that it will encourage more people to "take control of their own retirements", with the tacit admission that Social Security was a boondoggle in the best of days. But regardless of why they say they are doing this, it's really because someone needs your money, and if there is one thing that every Mogambo Scout knows, it is that "It's always about the money, and mostly about how everybody needs yours."

The real impetus behind this new Congressional action is the rude shock that the stock market, the bond market, the housing market and government coffers desperately need some more big money (MBM) rolling in pretty damned soon (PDS), or prices will not go up, bond prices will not go up, and tax revenues will not go up. And then the whole "investing for retirement" scam would be exposed, and the idiocy of the American system of government (which exists merely to increase spending and support more and more of the population and economy) would similarly be exposed, none of which would have happened in the first damned place if the Federal Reserve had not provided the bank financing, which created the debt, which created the money, which inflated the money supply, which worked its way into prices, which will destroy the economy, because that is what (pause for breath) inflation does.

One of the sneakier provisions in this new pension bill is "automatic enrollment", by which you will have money wrested from your paycheck and invested in the stock and bonds markets for you. And if you don't like that idea, then you have to take steps to break free of what could be a very deadly embrace.

What steps? For starters, how about if the employee has to jump through a literal hoop of fire, at the regional office, located 200 miles away, only with an appointment, but the phone line is always busy, and when you finally get through to the plan administrator's office to make the appointment, all you hear is a recording of a perky voice saying "Sorry to have missed your call! Your call is important to us! So at the beep, please leave a message! And then go to hell, you traitorous scum who hates his country so much that he will not invest in the future of America by buying overpriced stocks and overpriced bonds!" Click.

Plus, the financial services industry, which accounts for about half of the profits of the entire country, would show losses, too. So who are these people? Doug Noland explains "Combining the powerful Wall Street firms, the global money center securities/insurance/'banks,' and thousands of hedge funds and you’ve got one almighty juggernaut 'speculator community' that controls $10’s of Trillions of U.S. and global assets."

more...

[AnneD]

46. HAHAHAHAHAHAHAHAHAHAHAHA

:spray: I guess Mogambo and I are sharing the same water fountain. I swear-I did not read this article before I posted about the retirement accounts today.:rofl:

[54anickel]

54. Yup. Need more players at the Ponzi tables. So, when there are a

lot of us baby boomers retired and we begin selling our investments in greater numbers, who's gonna be buying?

Ahhhh, yes those tax laws might somehow be ammended to change our minds about selling. Might be better to leave it in there and just draw out gains only as we need them. At least we can leave those investments to our heirs fully intact with no "death tax". :eyes:

Isn't that one of the rules of a 401K, that your heirs would pay a hefty tax if they cashed it in before they reached retirement age? I remember reading something about some changes to how 401Ks will be passed on....I think they widened who you could name as beneficiary, but left the "wait until you're older" rule.

[AnneD]

56. I don't know about the heir tax burden

on a 401 but it wouldn't uprise me if you were right. Paris Hilton will have all of these tax breaks and get most of her moneyhanded to her, and my daughter, who will have to work hard just to get through school will have to give up most of the assets that I worked so hard and wanted her to have as my legacy. And they wonder why folks are so angry.

I have decided to follow that old Jewish saying...it is better to give with a warm hand. Hopefully I will gift her through out her life so we can avoid taxes. I hope to leave with a zero balance.

[Ghost Dog]

57. "Foreigners"! Foreigners will buy some of them!

Many foreigners have a lot of experience in picking through ruins and garbage tips!

(Sorry: couldn't resist :-( . Said with a wry, sad smile and without intending to hurt :silly: ).

[54anickel]

60. *SNARF* Cleaning the coffee from my monitor

:spray: "Many foreigners have a lot of experience in picking through ruins and garbage tips!" :spray:

[54anickel]

43. 11:40 update then time for a cat nap!

Dow 11,422.93 -46.35 (-0.40%)
Nasdaq 2,179.89 -25.81 (-1.17%)
S&P 500 1,304.35 -8.90 (-0.68%)
10-yr Bond 4.823 +0.042 (+0.88%)
30-yr Bond 4.97 +0.038 (+0.77%)
NYSE Volume 910,203,000
Nasdaq Volume 723,871,000

11:30 am : Little changed since the last update as the indices settle into a relatively tight trading range. However, sellers remain in complete control of the action as the bulk of industry leadership remains negative. In fact, not only are investors locking in profits from some of this year's best performers, like Agricultural Products (-2.5%) and Steel (-2.4%), but they are also pushing some of this year's worst performers, like Homebuilding (-2.5%), Internet Retail (-2.6%) and Education Services (-4.3%), even further into the red.DJ30 -44.15 NASDAQ -22.21 SP500 -8.01 NASDAQ Dec/Adv/Vol 2099/624/688 mln NYSE Dec/Adv/Vol 2373/679/514 mln

11:00 am : Major averages are retracing their lowest levels of the morning as a turnaround in oil prices removes one of the few catalysts providing a floor of support to prevent the market from consolidating even further. Within the last 30 minutes, crude oil prices have inched into positive territory but have yet to sideline sellers of oil stocks, as Energy (-1.0%) continues to pace the way lower among the 10 sectors losing ground. As an aside, Sunoco (SUN 69.08 -2.14) is among today's worst performing S&P 500 constituents after Citigroup downgraded the stock citing deterioration in refining margins. DJ30 -46.12 NASDAQ -22.18 SP500 -7.88 XOI -1.6% NASDAQ Dec/Adv/Vol 2088/590/576 mln NYSE Dec/Adv/Vol 2386/616/412 mln

10:30 am : Indices pare their losses somewhat after an economic report lends further confidence that the Fed will remain on hold with its tightening efforts. At the top of the hour, the Institute of Supply Management said its services index rose a larger than expected 57.0 in August (consensus 55.0), up from the 54.8 July reading but not as much as the 63.0 and 60.1 levels in April and May, respectively, thus reflecting a slowdown in growth very much consistent with the soft landing desired by the Fed.DJ30 -31.50 NASDAQ -16.30 SP500 -6.04 NASDAQ Dec/Adv/Vol 2011/598/426 mln NYSE Dec/Adv/Vol 2290/599/296 mln


Advances & Declines
NYSE Nasdaq
Advances 698 (21%) 656 (22%)
Declines 2415 (74%) 2103 (72%)
Unchanged 126 (3%) 153 (5%)

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

Up Vol* 203 (24%) 113 (17%)
Down Vol* 601 (73%) 544 (82%)
Unch. Vol* 9 (1%) 5 (0%)

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

New Hi's 46 35
New Lo's 22 23

[54anickel]

44. OH F*CK!!! Hubby just called and they put a For Sale sign up in front

of Dresser Industries!!! I found these 2 articles the first from today (an hour ago) the second from yesterday. Went from refinancing to for sale. :-(

Dresser, Inc. To Explore Strategic Alternatives
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20060906005599&newsLang=en

DALLAS--(BUSINESS WIRE)--Sept. 6, 2006--Dresser, Inc. today announced that its Board of Directors has authorized its management to begin a process to explore strategic alternatives for the business, including the potential sale of the company. The company has retained Morgan Stanley and UBS as its financial advisors for this process, which is expected to take a number of months. There is no assurance a transaction will result from this process, and the company does not expect to disclose additional details unless and until its Board has approved a specific transaction.


"Our business is performing well both operationally and financially. Our customers include the leading names in energy, our brands are well-known and respected in their various markets, and our employees are committed to excellence," noted Patrick M. Murray, chairman and chief executive officer. "As we explore our strategic alternatives, we will continue to focus our resources and efforts on maintaining those competitive strengths."




Dresser, Inc. Announces Plans to Refinance Debt, Revises Amendment Sought from Senior Secured Lenders
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20060905005679&newsLang=en

DALLAS--(BUSINESS WIRE)--Sept. 5, 2006--Dresser, Inc. announced today that it has received a financing commitment from Morgan Stanley and Credit Suisse which provides for the refinancing of Dresser's existing senior secured credit facility, senior unsecured term loan and 9 3/8% senior subordinated notes due 2011.


As a result of the commitment, which is subject to certain conditions, the company is revising the terms of the previously announced amendment it has requested under its senior secured credit facility. Under the revised terms, the company is no longer seeking to extend the term of its revolving credit facility or establish a new $50 million synthetic letter of credit facility.

The company is continuing to seek an extension of the deadline for providing audited financial statements for the fiscal year ended Dec. 31, 2005, from Sept. 30, 2006 to Dec. 31, 2006. In addition, it is seeking various technical amendments. The deadline for receiving consents from these lenders is 5 p.m. on Sept. 8, 2006, New York City time, unless further extended or terminated by Dresser.

The company said it expects to complete the refinancing as soon as practicable after the terms and conditions of the refinancing have been finalized. "We believe this refinancing is in the best interests of the company, and the commitment reflects the confidence that these lenders have in our businesses," said Patrick M. Murray, chairman and chief executive officer.

[AnneD]

47. As Momma always says...

on a bad day, you don't get a warning when the shit hits the fan. On a good day, you get just enough of a warning to duck. :hide: Remember..."duck and cover" (flash back for all you boomers).

[Ghost Dog]

58. So is that in some way due to this:?

http://en.wikipedia.org/wiki/Dresser_Industries

Merger with Halliburton

In 1998, Dresser merged with its main rival, Halliburton, and is now known as Halliburton Company. Dick Cheney negotiated the $7.7-billion deal, reportedly having done so during a weekend of quail-hunting. In 2001, Halliburton was forced to settle the asbestos lawsuits that it acquired as a result of purchasing Dresser, causing the company's stock price to fall by eighty percent in just over a year.


The New Dresser

On 10 April 2001 the Dresser division (excluding the former Kellogg division) entered an agreement to separate itself once again from Halliburton by management purchasing its equity, the new company to be called Dresser, Inc.

The new Dresser is 90% owned by First Reserve Corporation (U.S. based investment firm). It was planning a new IPO for the summer of 2005, However it withdrew its IPO because of accounting problems and an internal investigation of a subsidaries unauthorized dealings in the Middle East.

Dresser, Inc. sells, services, and supports products that include: actuators, valves, meters, instruments, regulators, switches, natural gas fueled engines, piping specialties, retail fuel dispensers, blowers, and outdoor payment and point-of-sale systems.

/...

[54anickel]

64. My guess is yes, their books are still out of wack from '04 and '05, so

they missed that IPO goal that was planned. After the management purchased the equity, it went downhill - they brought in "top guns" from other corporations that really didn't know their arse from a hole in the ground. Tthey only knew how to pad their resumes and move to greener pastures - you know, the usual that we discuss here so often.

Anyway, those "top guns" have since been canned, though they were given lucrative "consulting contracts" - had to keep them available since they were the only ones that could answer certain questions like, ":wtf: did you do with...."

Things are slowly getting better now. I suppose maybe FRC is looking to get their money with some gain back out of it. They employees wanted to do a buy out when Hellaburnin dumped them, but management blocked them and, by the looks of it, bought a chunk of it themselves and conned FRC into the rest. Hellaburnin only bought them for the Kellogg piece of it.

Hope they find a good buyer. :-(

[54anickel]

52. 2:20 and life on the trading floors still suck! Those short sellers on

the NAS prior to the holiday must have been onto something.

Dow 11,416.29 -52.99 (-0.46%)
Nasdaq 2,177.01 -28.69 (-1.30%)
S&P 500 1,302.86 -10.39 (-0.79%)
10-yr Bond 4.817 +0.036 (+0.75%)
30-yr Bond 4.97 +0.038 (+0.77%)
NYSE Volume 1,565,872,000
Nasdaq Volume 1,221,228,000

2:00 pm : More of the same for stocks as the Nasdaq, which is off 1.1%, continues to be the hardest hit among the majors; the Dow and S&P 500 are down 0.3% and 0.6%, respectively. Faring even worse, though, has been the Russell 2000, which is down 1.4%. Since higher interest rates spark valuation concerns among growth stocks and greatly impact the borrowing power of smaller companies, small cap stocks have succumbed to even more aggressive profit-taking after their extended streak of outperformance.DJ30 -34.74 NASDAQ -24.14 SP500 -7.82 NASDAQ Dec/Adv/Vol 2156/761/1.14 bln NYSE Dec/Adv/Vol 2447/760/882 mln

1:30 pm : Major averages continue to pare their losses but selling remains the driving mantra this afternoon. To wit, not even oil prices slipping to three-month lows has been enough to get investors excited, despite the Fed recently citing higher energy prices as putting upward pressure on overall inflation. On that note, today's productivity report that showed a sharp rise in Q2 unit labor costs, which are likely to start creating inflationary pressures, remain the day's focal point as investors await the day's last economic report. At the top of the hour, the Fed will issue its report on regional economic activity, known as the beige book, which is used by policy makers to formulate their views on the state of the economy. DJ30 -29.42 NASDAQ -24.15 SP500 -7.25 NASDAQ Dec/Adv/Vol 2194/718/1.08 bln NYSE Dec/Adv/Vol 2487/721/826 mln

1:00 pm : Indices bounce off their worst levels but market internals still reflect a negative tone. As evidenced in the A/D line, decliners on both the NYSE and Nasdaq still hold a more than 3-to-1 edge over advancers. A 4-to-1 ratio of down to up volume paints an even more dismal picture for equities while the bulls' only saving grace is the lack of conviction behind today's sell-off as light volume trading continues to suggest that many of Wall Street's heaviest hitters have yet to return to work from their summer vacations. DJ30 -36.98 NASDAQ -25.57 SP500 -8.10 NASDAQ Dec/Adv/Vol 2223/654/988 mln NYSE Dec/Adv/Vol 2495/697/746 mln

12:30 pm : No real change in sentiment as sellers make their way through the New York lunch hour forcing buyers to stand pat. However, while today's pullback is very broad-based, there are a few industry groups bucking today's bearish bias. Turning in today's biggest gain is Autos (+1.8%), which ranks as this year's third best performing S&P industry group (+31.7%). General Motors (GM 31.29 +0.85) is surging 2.8% after saying they will extend warranties on cars and trucks while Ford Motor (F 8.53 +0.14) is up 1.7% after appointing a former Boeing executive as its new CEO. Drug Retail, Food Distributors and Tobacco, whose defensive characteristics become attractive in a down market, are among only a handful of other areas trading higher. DJ30 -49.56 NASDAQ -29.40 SP500 -9.62 NASDAQ Dec/Adv/Vol 2201/653/888 mln NYSE Dec/Adv/Vol 2509/657/664 mln

12:00 pm : Stocks are trading lower across the board as renewed inflation fears and a sense that stocks are overbought at current levels prompt widespread profit-taking.

With July's tame inflation numbers adding to the growing conviction that the Fed may not raise rates further this year and largely responsible for the market's impressive August performance, a sharp rise in Q2 unit labor costs -- key indicator for wage-based inflation and item in the Fed's watch list, has underpinned a sense of nervousness.

Before the bell, the Labor Dept. showed that the final read on Q2 productivity came in at higher 1.6% annual rate, matching economists' forecasts and good from an inflation standpoint. However, unit labor costs rose a larger than expected 4.9% (consensus 4.0%), leaving the year/year increase at 5% -- the largest since 1990.

The absence of leadership in Energy (-1.6%) has been the most noticeable as oil prices falling to three-month lows near $68 a barrel coupled with analyst downgrades on Sunoco (SUN 68.72 -2.50) and Valero Energy (VLO 54.40 -1.35) prompt investors to lock in profits from this year's second best performing sector.

Of the other nine sectors trading lower, Technology is the most influential laggard also turning in a decline of at least 1.3%, and that is weighing heavily on the Nasdaq which leads the way lower among the majors (-1.4%) and is down for only the third time in 10 sessions. News that Intel (INTC 19.51 -0.48) will slash fewer jobs than some on Wall Street expected and an analyst downgrade on SanDisk (SNDK 56.56 -1.50) are just two of the catalysts raising concerns that the sector's huge 8.4% run-up in August was overdone. BTK -2.3% DJ30 -47.63 DJTA -1.0% DJUA -0.5% DOT -0.8% NASDAQ -29.64 NQ100 -1.4% R2K -1.6% SOX -2.0% SP400 -1.4% SP500 -9.46 XOI -2.1% NASDAQ Dec/Adv/Vol 2163/641/814 mln NYSE Dec/Adv/Vol 2449/689/598 mln

[54anickel]

65. Crying in your pretzels time

Dow 11,406.20 -63.08 (-0.55%)
Nasdaq 2,167.84 -37.86 (-1.72%)
S&P 500 1,300.26 -12.99 (-0.99%)
10-yr Bond 4.801 +0.02 (+0.42%)
30-yr Bond 4.952 +0.02 (+0.41%)
NYSE Volume 2,268,116,000
Nasdaq Volume 1,841,755,000

4:20 pm : Given the scope of the market's broad-based rally during what is historically one of the worst months of the year for stocks (August), the sustainability of such an impressive performance came into question Wednesday as a sense that stocks were overbought prompted widespread profit-taking.

With tame inflation data of late acting as the impetus behind a more optimistic underlying tone in the market, it wasn't too surprising to see a disappointment on the inflation front ruffle the hawks' feathers today. Before the bell, the Labor Dept. showed that the final read on Q2 productivity came in at a higher 1.6% annual rate, which matched economists' forecasts and was an encouraging revision, yet unit labor costs rose a larger than expected 4.9%, leaving the year/year increase at 5% -- the largest rise since 1990.

Normally, this report seldom has a significant impact on the market, since productivity can be quite volatile from one quarter to the next. However, with little else in the way of market-moving news and the blue chip averages coming off their best August performance in six years as a result of encouraging reads on inflation for Q3, especially last Friday's good August hourly earnings figure, investors used the relatively outdated Q2 data as an excuse to take some money off the table. Even a 1.5% decline in crude oil prices to five-month lows below $68 a barrel wasn't enough to attract buyers from start to finish.

As a result of oil's pullback, coupled with analyst downgrades on Sunoco (SUN 67.24 -3.98) and Valero Energy (VLO 53.02 -2.73), the Energy sector got hammered (-2.98%). That removed key industry leadership from the biggest profit engine for the S&P 500 over the last several quarters and merely added to uncertainty about earnings prospects amid continued signs of an economic slowdown.

Also not surprising was a notable sell-off in Technology since it was best performing sector in August (+8.4%) and largely responsible for the Nasdaq turning in an impressive 4.4% advance last month and even inching the Composite into positive territory yesterday for the first time since June. Accordingly, the Nasdaq was hardest hit among the majors. News that Intel (INTC 19.31 -0.68) will slash fewer jobs than some on Wall Street expected and an analyst downgrade on SanDisk (SNDK 54.71 -3.35) were just two of the catalysts raising concerns that the tech sector's huge run-up last month was overdone.

Autos, however, was a bright spot for investors Wednesday, turning in the day's biggest gain (+2.2%) and extending its reach as this year's third best performing S&P industry group (+31.7%). General Motors (GM 31.17 +0.73), the day's best performing Dow component, surged 2.4% after saying it will extend warranties on 2007 vehicles to five years and 100,000 miles while Ford Motor (F 8.55 +0.16) gained 1.9% after appointing a former Boeing executive as its new CEO.BTK -2.4% DJ30 -63.08 DJTA -1.8% DJUA -0.8% DOT -1.1% NASDAQ -37.86 NQ100 -2.0% R2K -2.1% SOX -3.3% SP400 -1.7% SP500 -12.99 XOI -3.5% NASDAQ Dec/Adv/Vol 2273/754/1.84 bln NYSE Dec/Adv/Vol 2621/656/1.43 bln

3:30 pm : A widespread negative tone continues to weigh on equities as broad-based consolidation leaves the indices languishing at session lows going into the close. Adding to today's struggles has been the inability by the Dow, S&P 500 and Nasdaq to find support above key technical levels of 11407, 1302 and 2176, respectively. The tech-heavy Composite (-1.6%) continues to feel the brunt of the selling pressure, which is understandable since it led the majors last month with a 4.4% advance fueled by an impressive 8.4% surge in Technology. DJ30 -66.28 NASDAQ -36.10 SOX -2.9% SP500 -12.79 NASDAQ Dec/Adv/Vol 2245/731/1.54 bln NYSE Dec/Adv/Vol 2554/705/1.20 bln

3:00 pm : Even as oil prices spike lower going into the close of trading on the NYMEX, the stock market is back to trading at its worst levels of the day. Crude oil futures recently closed down 1.5% at $67.56 a barrel as the U.N. does everything possible to not put sanctions on Iran. While oil's decline bodes well for consumers, further deterioration in Energy (-2.8%), which removes key leadership from the biggest profit engine for the S&P 500, has only added to uncertainty about earnings prospects amid continued signs of an economic slowdown. DJ30 -58.60 NASDAQ -31.56 SP500 -11.87 NASDAQ Dec/Adv/Vol 2199/758/1.39 bln NYSE Dec/Adv/Vol 2497/734/1.09 bln

2:30 pm : Stocks are choppy as investors continue to soft through the details of the Fed's Beige Book. Bonds, however, continue to strengthen and have pushed the 10-yr yield to session lows of 4.79% as five of the Fed's 12 districts pointed to evidence that the pace of economic growth has slowed. Words like "flat," "declining" and "weak" housing information have also helped the Treasury market pare its losses, but the recovery has been short-lived since the report was not all bad as it also said economic conditions continued to expand overall.DJ30 -37.55 NASDAQ -25.31 SP500 -8.98 NASDAQ Dec/Adv/Vol 2166/770/1.27 bln NYSE Dec/Adv/Vol 2442/781/988 mln