STOCK MARKET WATCH, Monday September 25

[ozymandius]

Monday September 25, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 849 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2098 DAYS
WHERE'S OSAMA BIN-LADEN? 1804 DAYS
DAYS SINCE ENRON COLLAPSE = 1765
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 22, 2006

Dow... 11,508.10 -25.13 (-0.22%)
Nasdaq... 2,218.93 -18.82 (-0.84%)
S&P 500... 1,314.78 -3.25 (-0.25%)
Gold future... 595.40 +7.10 (+1.19%)
30-Year Bond 4.74% -0.05 (-0.96%)
10-Yr Bond... 4.60% -0.05 (-1.10%)






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 Tim W. Wood

THE DOW REPORT
Focus on the 4-Year Cycle

I have heard it said that the June/July lows were the 4-year cycle low and that the market is now moving up in a new 4-year cycle advance. I have also heard it said that the 4-year cycle low will come in October with what has become the expected fall decline. With the most recent rally, this idea seems to be giving way to the idea that the June/July lows were the 4-year cycle lows. Because of the data surrounding the 4-year cycle, I’m personally not in agreement with either point of view. I have said all along that I thought we would see the gain in the first part of this year and the pain in the latter part of the year. What has been happening since the May high has been the setup for the pain that statistically should still lie ahead. As a rule, the analysis in my newsletter is not made available to non-subscribers. But, in regard to the 4-year cycle I have decided to share some of the statistical data surrounding the 4-year cycle.

The bottom line is that the market can do anything it wants and only a fool would say that he knows for sure what is going to happen. My work with the 4-year cycle is based on probability and the cyclical relationship between the 4-year cycle, the 12-month/annual cycle and the 22-week cycle. So, what my work gives us is probability. This is not to say that the market will unfold in accordance to these probabilities every time, because it won’t. But, by using probabilities I will at least know what the most likely outcome is and therefore I know what I should expect based on a given setup. Sure, things may unfold differently than the probabilities suggest, but chances are it will unfold pretty much in accordance with the statistical averages.

At this time, my work does not indicate that the June/July lows were the 4-year cycle low or that it will come in October. In late January I laid out a scenario that outlined the most probable path for the market to follow as it moved from that point into the 4-year cycle top and the low that is to follow. This scenario was based on over 100 years of statistical data, as is related to the 4-year and annual cycles. This scenario also looked at the interrelationship and phasing aspects of the annual and 4-year cycles. Since that scenario was introduced to my subscribers back in late January, the market has unfolded pretty much right in line with these statistical-based probabilities in which our expectations for the current 4-year cycle top and the low that is to follow have been based.

-cut-

I also want to point out that a failed annual cycle advance, following the 4-year cycle top, is actually the most bearish because it sets the market up for multiple legs down rather than just a single drop. This in turn creates the false bottoms that I spoke of above and it is for this reason that I think many people will perceive false bottoms on the way down into the 4-year cycle low this time around as well. Actually, we are already seeing this in that many are already thinking that the June/July lows marked the 4-year cycle low. If the statistical based scenario that I have been following continues to unfold, then I see a secondary low coming in November with the next intermediate-term cycle low. Then, there should be another advance as that intermediate–term cycle begins to move up. But, that low is currently expected to be another false bottom as another failed advance is expected to follow before the final 4-year cycle low is reached.

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

[ozymandius]

2. One report today

10:00 AM Existing Home Sales Aug
Briefing Forecast 6.25M
Market Expects 6.25M
Prior 6.33M

[UpInArms]

16. U.S. Aug. existing home median price falls 1.7%

10:00 AM ET 9/25/06 HOUSING SALES HAVE HIT BOTTOM, REALTORS' LEREAH SAYS

10:00 AM ET 9/25/06 U.S. AUG. HOME INVENTORIES RISE TO 7.5-MONTH SUPPLY

10:00 AM ET 9/25/06 U.S. AUG. HOME MEDIAN PRICE OFF 1.7%, 1ST DROP IN 11 YEARS

10:00 AM ET 9/25/06 U.S. AUG. EXISTING-HOME SALES FALL 0.5% TO 6.30 MILLION PACE

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BE946A69A%2D0113%2D41E8%2D95A9%2DEEC4B573AEE9%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - Median sales prices of existing homes fell from year-ago levels in August for the first time in 11 years and just the sixth time in the past 30 years, the National Association of Realtors said Monday. Sales of existing homes fell 0.5% in August to a seasonally adjusted annual rate of 6.30 million, the industry group said. Sales are down 12.6% in the past year. The median price of an existing home fell 1.7% year-over-year to $225,000. It's the first time since April 1995 that median prices have fallen on a year-over-year basis. The price correction is a welcome development, said David Lereah, chief economists for the realtors group. "The price drop has stopped the bleeding," Lereah said. "Sales have hit bottom," he said. "Sellers are finally getting it."

[ozymandius]

3. Oil prices plunge below $60 a barrel

SINGAPORE - Oil prices fell below $60 a barrel for the first time in six months Monday amid signs of growing petroleum inventories and after BP PLC said it had received permission to restart the eastern half of Alaska's Prudhoe Bay oil field.

"Hedge funds and investors have been bailing out because geopolitical tensions have eased and they also realize that inventories are high during this period of seasonally weak demand at the end of summer," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

Light, sweet crude for November delivery fell 98 cents to $59.57 a barrel in Asian electronic trading on the New York Mercantile Exchange. That's the first time since March 13 that intraday trading has fallen below $60 a barrel.

November Brent crude on London's ICE Futures exchange tumbled $1.04 at $59.37 a barrel.

more

[ozymandius]

4. European shares climb on oil price plunge

LONDON (AFP) - European stock markets were advancing as oil-exposed stocks benefited from crude prices sinking beneath 60 dollars per barrel.

London's FTSE 100 of leading shares won 0.30 percent to 5,839.60 points on Monday, Frankfurt's DAX 30 gained 0.71 percent to 5,924.90 and in Paris, the CAC 40 index added 0.79 percent to 5,182.65 points.

The DJ Euro Stoxx 50 index of leading eurozone shares increased 0.61 percent to 3,835.93 points.

The euro stood at 1.2772 dollars.

more

[ozymandius]

5. Chavez drives a hard bargain, but Big Oil's options are limited

-cut-

Just as there is no love between President Hugo Chavez and the Bush administration, there is little love lost between Chavez and the foreign oilmen who are pumping up the huge reservoirs of underground oil. But they need each other. The United States needs Venezuela to help quench its bottomless thirst for oil, and Chavez needs America to buy it from him in order to fund his dreams of spreading his leftist ideology around the hemisphere.

The stakes here are huge. The area around El Tigre, known as the Orinoco Oil Belt, possesses the world's biggest petroleum reserves -- 1.3 trillion barrels of so-called extra-heavy oil. Chevron, Exxon Mobil, ConocoPhillips and dozens of other foreign firms are here, using recently developed technologies to extract the tarlike, sulfurous crude and refine it.

"Everyone agrees that the Orinoco Belt has the biggest reserves in the world," said Alberto Quiros, a Chavez critic and former president of Royal Dutch Shell's Venezuela operations. "What Chavez will do with them is another question, but there's no doubt that Venezuela will take Saudi Arabia's place as No. 1."

Chavez already is forcing Chevron, which is based in San Ramon, and other oil companies to swallow some bitter pills.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/09/24/MNGNSLBRUG1.DTL

[UpInArms]

20. Crude prices fall under $60 level in early trading

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B1C0F4AE2%2DF0EF%2D48CC%2DA30E%2D8BD5BDAC4504%7D&dist=newsfinder&symbol=&siteid=mktw

SAN FRANCISCO (MarketWatch) -- November crude fell 65 cents to $59.90 a barrel on the New York Mercantile Exchange. The contract hasn't traded under the $60 level since late November. "With the weekend passing without even a slightly bullish story to hang onto and normal seasonal weakness, oil is still in a free fall mode," said Phil Flynn, a senior analyst at Alaron Trading. October natural gas fell 13.7 cents to $4.49 per million British thermal units. The contract's trading at its weakest level in almost three years.

[AnneD]

23. They really want Bush bots re-elected....

Gas in many spots in Houston are 1.97 :wow: . I don't think they can show me enough love to vote for him. Bet the gas goes up afterward. I think that has been the case in the last 2 election cycles. Does anyone know where I can see stats like that?

[54anickel]

24. So just where is all the speculative money going these days? The PTB

have done a pretty good job of chasing investors out of commodities, hoping to disguise the monetary inflation that's been floating around. But where did they go? What's the latest hedge fund craze these days? Credit swaps and derivatives? There's a scary thought.

[ozymandius]

6. Tokyo shares weaker on US concerns

Japan's Topix index declined a touch on Monday, on continued fears that some domestic sectors had been overpriced given recent soft economic data. But the more export-focused Nikkei 225 held firm, as investors sought safety in some international blue-chip stocks.

By the end of the day the Topix was down 0.2 per cent to 1.559.78, with the Nikkei 225 flat at 15,633.81.

But the Mothers index of smaller growth stocks plunged 2.5 per cent to 1,145.95, hit by investors' flight to safety. The Mothers market has not fully recovered from the raid on internet services company Livedoor in January, which hit retail investors' confidence in stocks dominated by a single entrepreneur - the model for many Mothers companies.

Some export-focused stocks performed adequately if uninspiringly, as investors sought out big names like Toyota (NYSE:TM - news), Japan's biggest carmaker - up 0.3 per cent to Y6,290.

http://news.yahoo.com/s/ft/20060925/bs_ft/fto092520060407178453

[ozymandius]

7. UCB to buy Schwarz Pharma for $5.6bn

Belgian pharmaceutical firm UCB SA has agreed to buy German firm Schwarz Pharma AG for 4.4 billion euro ($5.6 billion) in cash and stock.

very short

This event is lifting European bourses.

[ozymandius]

8. Edsel Ford says the family is committed to saving the auto maker

DETROIT (MarketWatch) -- Edsel Ford, a board member and former executive at Ford Motor Co. (F), said Friday the Ford family is "100% behind" the company's new chief executive officer and the family is not backing away from its commitment to saving the ailing auto maker.

Edsel Ford, speaking during an interview with a radio show, said the Ford family held a meeting "the other day" and everybody in attendance agreed it is willing to do whatever needs to be done to save the company. During the meeting, the family "had a long conversation with Bill (Ford) and we are 100% behind what he wants to do and behind (Chief Executive) Alan Mulally."

Edsel Ford was speaking to Detroit-based WJR Friday and the radio station recently posted an audio version of the interview on its web site. Edsel Ford is the former head of the Ford Credit lending arm and has been one of the most visible members of the Ford family in recent decades.

-cut-

Edsel Ford said that Bill Ford faced a lot of questions at the most-recent family meeting. He didn't give the exact date of the meeting, but said Bill Ford was "extremely frank" about the plan for the company and his reasons for stepping aside. He also said "we're all equals" when it comes to the position of various Fords in the family structure and said family members are "100% behind our company."

more

[ozymandius]

9. time for me to go

:donut: :donut: :donut:

Have a great day everyone! I'll check back this evening for the day's news.

Ozy :hi:

[CountAllVotes]

10. see you later ozymanidus!

cyl! :hi:

:dem: :kick:

[AnneD]

22. Morning Marketeers...

:donut: and lurkers. I was looking forward to the Clinton interview with Chris Wallace all week. Then day of the interview we have a storm and I can't get reception. Talk about being PO'd. Thank god for the internet. I was soo happy to see Wallace have his butt handed back to him. And Clinton wouldn't fall for the diversons...he hammered and did followup. THAT is the way we need to do it folks. Don't go for the red herring-redirect them to the question they asked (or insinuation as it tends to be) and for God's sake don't be afraid to call it what it is.



Happy hunting and watch out for the bear....

[UpInArms]

11. daily dollar watch

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

Last trade 85.27 Change +0.20 (+0.24%)

US Dollar: Watch Out for Housing and Confidence Next Week

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar__Watch_Out_for_1158960338318.html

US Dollar

The lack of any US economic data has led to quiet trading in the majors today with a mild extension of yesterday’s dollar weakness. Over the past week, we have see further evidence that the US economy still faces major risks ahead following sharp deteriorations in many economic releases. Inflationary pressures on the other hand continue to subside as oil prices fall to six month lows. With both growth and inflation slowing, there is no reason for the Federal Reserve to veer away from their plans to keep interest rates on hold for the foreseeable future. In fact, the market agrees as Fed fund futures are pricing in a less than 20 percent likelihood for another rate hike this year. Next week’s economic reports should drive the point in even further as housing market releases dominate the calendar. Existing and new home sales are due for release – both of which are expected to reflect a deflating bubble (existing home sales is on Monday). Aside from housing, we will also be watching the consumer confidence report on Tuesday and the personal spending report on Friday. Consumer spending is the only pillar that is keeping the US economy supported and consumer confidence will give us a better take on whether this will continue to provide support in the near future. A drop in confidence will raise the concern for a fall in retail sales next month, but at this point, analysts are looking for a rise in confidence. This is possible as lower prices at the pump will allow consumers to breathe a sigh of relief after having to deal with sky high gasoline prices and oil related surcharges throughout the summer. Although the outlook for the housing reports suggest that we are setting up for a dollar negative week, a rise in confidence would negate that. On a short term basis, the sell-off in the US dollar is looking overdone. A bounce is possible before we get a continuation of the downtrend and confidence can be the catalyst for that bounce.

...more...

[UpInArms]

12. Investor optimism rises in Sept UBS survey

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-09-25T122739Z_01_NYA000240_RTRIDST_0_MARKETS-INVESTOR-OPTIMISM-URGENT.XML

NEW YORK, Sept 25 (Reuters) - Investor optimism jumped in September to its highest level since March as investors expressed relief about falling energy prices, according to the UBS/Gallup Index of Investor Optimism released on Monday.

Optimism rose to 74 during the month of September, up from 53 points in August. The index was 93 in January.

The UBS/Gallup index polls about 800 households from around the U.S. with investments of $10,000 or more. Nearly 40 percent of American households have at least this amount in savings and investments.

:crazy:

[UpInArms]

13. Spinach Blowback: Chiquita suspends dividend, considers asset sales

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-09-25T123825Z_01_WEN5879_RTRIDST_0_FOOD-CHIQUITA-URGENT.XML

CHICAGO, Sept 25 (Reuters) - Chiquita Brands International Inc. (CQB.N: Quote, Profile, Research) on Monday said it suspended its cash dividend and is considering selling its shipping fleet to raise money for paying down debt and investing in its business.

The company, best known for its bananas, also said its Fresh Express business is seeing lower sales and unexpected costs related to recent health concerns over fresh spinach. It said its third-quarter results will be "significantly impacted" by difficult market conditions and continuing uncertainties.

[UpInArms]

14. pre-opening blather (happy happy joy joy)

09:15 ET Market is Closed S&P futures vs fair value: +3.9. Nasdaq futures vs fair value: +7.0.

09:00 ET Market is Closed S&P futures vs fair value: +3.8. Nasdaq futures vs fair value: +7.0. Futures indications are off their best levels but still pointing to a solid start for the cash market. A sense that last week's consolidation efforts were overdone is reminding investors that stock valuations remain attractive while the fact there have been very few profit warnings going into the final week of the quarter bode well for the S&P 500 to pursue a 13th consecutive quarter of double-digit earnings growth.

08:30 ET Market is Closed S&P futures vs fair value: +5.3. Nasdaq futures vs fair value: +8.2. The stage is now set for stocks to open even higher as futures indications continue to strengthen. Aside from falling oil prices improving overall sentiment and easing concerns about slower economic growth crimping corporate profits, technology is offering some notable leadership. The sector is in focus after Hewlett-Packard (HPQ) announced late Friday that Chairman Patricia Dunn is resigning, effective immediately, while ThinkEquity raising its price target on Apple Computer (AAPL) to $100 from $90 is helping shares recoup nearly half of the 2.0% lost on Friday.

08:00 ET Market is Closed S&P futures vs fair value: +4.0. Nasdaq futures vs fair value: +4.8. Futures versus fair value suggest stocks will kick off the week on an upbeat note. Since there is little in the way of corporate news to account for the positive underlying tone, oil prices dipping below $60 a barrel for the first time since March are providing the bulk of early support. However, pre-market gains are modest at best as investors await the latest evidence of the slowdown in housing when existing home sales are released at 10:00 ET.

[UpInArms]

15. 9:42 EST YeeHaw! Whee!

Dow 11,564.69 56.59 (0.49%)
Nasdaq 2,231.29 12.36 (0.56%)
S&P 500 1,319.82 5.04 (0.38%)
10-Yr Bond 4.575% 0.022

NYSE Volume 132,448,000
Nasdaq Volume 95,320,000

[UpInArms]

17. US Treasuries extend recent rally on slower growth

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-09-25T131256Z_01_N25319084_RTRIDST_0_MARKETS-BONDS.XML

NEW YORK, Sept 25 (Reuters) - U.S. Treasury debt prices slightly extended recent gains on Monday on expectations slowing economic growth will keep interest rates steady and possibly lower them next year.

Investors are looking ahead to August existing home sales data to be released later on Monday morning for further confirmation that the U.S. homes market is slowing.

Benchmark yields, which move inversely to prices, reached six-and-a-half-month lows with some investors speculating the cooling economy, including a slowdown in the housing market, could even motivate the Fed to begin cutting rates next year.

"Concerns over a hard landing in the U.S., and the potential for bearish fallout over the rest of the world knocked bond yields and the dollar sharply lower in recent weeks," said Kim Rupert, managing director for global fixed-income analysis at Action Economics in San Francisco.

...more...

[UpInArms]

18. Printing Press Hums: Fed adds bank reserves via overnight system repos

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-09-25T132915Z_01_N25342511_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, Sept 25 (Reuters) - The Federal Reserve said on Monday it added temporary reserves to the U.S. banking system through overnight system repurchase agreements.

Fed funds traded at 5.25 percent -- the Fed's target for the benchmark overnight lending rate -- at the time of the operation.

For further details on the operation, see http://www.ny.frb.org/markets/omo/dmm/temp.cfm

[UpInArms]

19. Fed's Fisher says Fed vigilant on inflation

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-09-25T133705Z_01_WBT006006_RTRIDST_0_ECONOMY-FED-FISHER-URGENT.XML

MONTERREY, Mexico, Sept 25 (Reuters) - Federal Reserve Bank of Dallas President Richard Fisher said on Monday that slowing U.S. economic growth should contain inflation but if it fails to do so, the U.S. central bank must act.

"Inflation remains elevated and leaves us small choice but to remain vigilant," he said in the text of a speech here, made available to the media prior to delivery.

"It is my considered judgment that the recent tempering of U.S. economic growth to a more sustainable rate, combined with the lagged effects of our 17 prior quarter-(percentage-)point rate increases, should act to lower the inflation rate over time. However, if this proves not to be the case, appropriate action will have to be taken," he said.

Fisher, who is not a voting member of the Fed's policy-setting committee this year, was addressing a forum jointly hosted by the Dallas Fed and the Banco de Mexico.

[specimenfred1984]

21. The complete fraud continues in the S&P

AT 11:24, buy volume of 19,500, a huge spike for no reason other than a FED lackey speaking (Fed speaks, Fed pumps the market).

So, why not buy the fraud? Many times the fraud fails as it did today, the huge buy was followed by nothing and the price drifted lower, below where the buying occured.

Still, I'd look for more fraudulent buying spikes today, it's Monday and a lot of reports are coming out this week that might make the U.S. look bad.

[54anickel]

25. Selective deleting is all academic

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

snip>

Last March some upstart academics tried to measure what had become known as the “Cramer effect,” or the tendency of stocks to trade sharply higher after being mentioned on Mad Money. Three PhD students at Northwestern examined 246 of Cramer’s recommendations, apparently, about six shows worth, and tallied up the results. According to a Financial Post summary of the findings, Cramer’s stocks immediately jumped 2% on average, with the smallest stocks gapping 5% higher. However, according to Joseph Engelberg, one of the three authors of the study, gains typically reversed within several days, and on average, retreated to their original levels. If the numbers are accurate (which Cramer disputed in the Post story) that means the losers are those who buy on Cramer’s recommendation, and the winners are the arbs and hedge funds who have figured out to make a buck from the Cramer effect.

snip>

Investors are so hungry for unsolicited advice that they are now acting on stock tips from spam emails. That’s according to another study by another set of academics who figured out that investors are doing a great job at helping penny stock promoters get rich.

The title of the paper by Laura Frieder and Jonathan Zittrain gets right to the point: “Spam Works: Evidence from Stock Touts and Corresponding Market Activity.”

snip>

The authors reviewed a sample of Pink Sheet stocks touted in more than 75,000 emails. After all that number crunching, they concluded that the stocks went up on heavy volume the day they were touted. Stocks also showed unusual strength the day before the spamming as the spammers were no doubt buying into the names they were about to blast around the Internet. In the days following the big spam day, the stocks went down as the spammers continued selling and volume from new buyers dried up.

snip>

Interestingly, as more and more stock market studies have accumulated, the more expensive concept stocks have become. The typical concept stock sold for three times sales in the late 1960s and 1970s, five times sales in the 1980s, but nearly 17 times sales in the 1990s. Concept stocks traded for a hardly conceivable 45 times sales in 1999. By contrast, a typical stock sold for 1.2 times sales in 1967 and only 1.36 times in 1999. So the more information investors had about long term stock market behavior, the more willing they were grab onto a concept and run with it. This is even more amazing when we learn that the percentage of concept stocks with positive earnings shrank sharply over the period.

more...

[54anickel]

26. 1:38

Dow 11,538.75 +30.65 (0.27%)
Nasdaq 2,236.23 +17.30 (0.78%)
S&P 500 1,321.66 +6.88 (0.52%)
10-Yr Bond 4.5550% -0.0420
NYSE Volume 1,585,261,000
Nasdaq Volume 1,113,047,000


Seems the blather is stuck on Friday.....????
The changes at Yahoo also lost my preferences...gotta try and get back my 30 year bond quote. :-( Bastards!!!

[54anickel]

27. "Irrational" mortgage bond prices polarize market

http://today.reuters.com/news/articlenews.aspx?type=reutersEdge&storyID=2006-09-25T165817Z_01_N21401265_RTRUKOC_0_US-MARKETS-SUBPRIME.xml

NEW YORK (Reuters) - Buyers in the $565 billion market for so-called sub-prime mortgage bonds are clamoring for the high-yield securities, even though experts increasingly warn that pricing has reached "irrational" levels.

Rising delinquencies and forecasts of a deepening deterioration in housing have prompted big investors, including hedge funds, to bet against the securities since late 2005. But prices on bonds backed by loans to riskier borrowers have remained stubbornly high -- longer than many analysts expected -- as yield-hungry investors insist that built-in loss protections are adequate.

"The sub-prime home equity market is in the midst of a giant tug of war," said Tom Zimmerman, an analyst at UBS Securities LLC in New York. The market "is on the border line."

Market participants, including America's biggest mortgage lender and an analyst at the largest U.S. brokerage firm, are warning that worsening credit quality in housing will soon sting holders of sub-prime mortgage bonds.

There is plenty of data to support their views.

more...

[54anickel]

28. What One Night in Bangkok Says About Contagion

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=atVq5rMVqr8Y

Sept. 25 (Bloomberg) -- You know the world is a bit upside down when investors ``should be encouraged'' by tanks in the streets of Bangkok. That's what Merrill Lynch & Co. strategists in Asia had to say about Thailand's latest coup.

The word ``latest'' is used because Thailand has seen some 18 coups in the past 60 years, the last one in February 1991. ``History has shown that the Thai equity market rebounds sharply after periods of crisis, including previous coups,'' HSBC Holdings Plc analysts wrote on Sept. 20.

The real question, though, is: What does it mean for Thailand's neighbors when soldiers take over the Asia-Pacific region's ninth-largest economy? Nobody can miss the irony of Thailand's coup coming the same week as the International Monetary Fund's first meeting in Asia since the 1997 financial crisis; a meltdown in a major hedge fund, Amaranth Advisors LLC; and calls for Asian governments to let currencies rise. Few also will forget that the crisis nine years ago began in Thailand.

A 1997-like feeling is again in the air. Beyond Asia, investors have been observing sell-offs in the Brazilian real, Mexican peso, South African rand and Turkish lira. There's more than just a whiff of risk aversion in markets.

more...

[54anickel]

29. Retiree Health Care May Overwhelm Gov'ts

http://biz.yahoo.com/ap/060924/retiree_health_care.html?.v=2

SAN FRANCISCO (AP) -- The bill is coming due for years of generous benefits bestowed upon the nation's public employees, and it's a stunner: hundreds of billions of dollars over the next three decades, threatening some local governments with bankruptcy and all but guaranteeing cuts in services like education and public safety.

This staggering burden is coming to light because of new accounting rules issued by the Government Accounting Standards Board. They require public agencies to disclose the future cost of health care and other benefits -- such as dental, vision and life insurance -- promised alongside traditional pensions to the nation's estimated 24.5 million active and retired state and local public employees.

Retiree health care costs have been quietly mounting for decades while public agencies have passed out generous retirement benefits during labor negotiations -- often in lieu of salary increases. But government negotiators rarely considered the long-term financial consequences of awarding such perks, according to Brian Whitworth, a retirement benefits specialist with JP Morgan Chase and Co.

"A surprising number of public entities didn't even make informal estimates of long-term costs prior to the new accounting rules," Whitworth said.

Many cities and state agencies already are struggling to fully fund their pension obligations, but experts say those liabilities pale in comparison to the debt accumulated for other retirement benefits.

Last month, JP Morgan released what it considers the most comprehensive preliminary estimate. It projects the present value of unfunded health care and other non-pension benefits at between $600 billion and $1.3 trillion.

more...

[54anickel]

30. Europe, Japan Wean Themselves From Dependence on U.S. Consumers

http://www.bloomberg.com/apps/news?pid=20601087&sid=ak8nnXvw01uw&refer=worldwide

Sept. 25 (Bloomberg) -- Europe, Japan and emerging economies around the world are weaning themselves from dependence on the American consumer, and economists say it's just in time.

Demand in the world's largest economy is slowing as the U.S. housing market falters, a development that the International Monetary Fund on Sept. 14 called a key risk to global expansion. If so, it's a risk that the biggest exporting nations are better prepared to weather now than five years ago.

``Domestic demand in so many other parts of the world is picking up,'' says Jim O'Neill, head of global economic research at Goldman Sachs Group Inc. in London. ``If there ever was a good time for the U.S. to slow, this is it.''

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`Piffling' Agreements

While the U.S. is lining up ``piffling little bilateral agreements,'' says Bhagwati, ``Asian free trade agreements are breaking out rapidly, and the U.S. is not part of it.''

A major Asian trade deal excluding the U.S. would divert $25 billion from U.S. trade in the first year and more over time as investment patterns change, says Bergsten. ``That is already motivating the U.S. to beef up its own free trade agreements and perhaps try to go back to the WTO with a better offer,'' he says.

Demand building in developing nations is a major driver behind changing trade routes.

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[UpInArms]

31. happy closing numbers and blather

Dow 11,575.81 67.71 (0.59%)
Nasdaq 2,249.07 30.14 (1.36%)
S&P 500 1,326.37 11.59 (0.88%)
10-Yr Bond 4.555% 0.042

NYSE Volume 2,754,400,000
Nasdaq Volume 1,903,983,000

Stocks closed off their best levels but still turned in a respectable performance, as investors rallied around strong industry leadership, plunging bond yields and upbeat Fed speak about a "healthy and robust" economy.

Oil prices, which were off as much as 1.7% in early trading to 10-month lows, provided investors with an initial "shot in the arm" and helped the market contend with more confirmation of the "serious correction" taking place in housing, as Dallas Fed President Richard Fisher alluded to in a speech early Monday morning. August existing home sales fell modestly, as expected, but median home prices falling from year-ago levels for the first time in 11 years lent more confirmation that the slowdown in housing will clearly be a drag on the overall economy.

Initially adding insult to injury was an about face in the oil patch. Prices slipping below the psychological $60/bbl barrier didn't last very long at all, as renewed concerns of an emergency OPEC meeting to cut production prompted short sellers to run for cover. The commodity eventually closed up 1.5% at $61.45/bbl.

Fortunately for the bulls, oil's turnaround helped the profit engine that is Energy erase a huge intraday decline. Separately, with only a few days remaining before Q3 comes to a close, some end-of-the-quarter window dressing on the part of portfolio managers also contributed to the market's afternoon recovery efforts that eventually helped stocks regain their upside momentum following a down week.

With regard to industry leadership, nine out of 10 sectors posted gains, with Consumer Discretionary coming out on top as the day's best performer. Aside from strength across the board from retailers, Comcast Corp (CMCSA 36.59 +1.47) soaring 4.2% to a fresh multi-year high and multiple analyst upgrades on Time Warner (TWX 18.13 +0.40) provided influential sector support.

Technology, though, provided the bulk of market leadership, as evidenced by the Nasdaq outpacing its blue chip counterparts to the upside. Strong follow-through in Integrated Telecom, as AT&T (T 33.51 +0.62) and BellSouth (BLS 44.08 +0.85) surged nearly 2.0% to four-year highs, helped fuel the positive showing. Additionally, bargain-hunting interest in beaten-down groups like semiconductors, upbeat analyst commentary on Hewlett-Packard (HPQ 35.71 +0.60) following the immediate resignation of Chairman Patricia Dunn, and on Apple Computer (AAPL 75.75 +2.75) in anticipation of improved earnings potential, helped tech turn in an impressive 1.6% advance. Financials also provided some notable leadership, as more signs of a potential interest rate cut by the Fed following today's housing data pushed the yield on the 10-yr note to lows (4.54%) not seen since February.

Consumer Staples didn't fare so well as a judge granting class-action status in a potential $200 bln lawsuit involving "light" cigarettes took a toll on tobacco companies. The news sent Dow component Altria Group (MO 77.06 -5.26) down 6.4% which prevented blue chips from turning in an even better performance. DJ30 +67.71 NASDAQ +30.14 SP500 +11.59 NASDAQ Dec/Adv/Vol 1175/1860/1.81 bln NYSE Dec/Adv/Vol 1090/2199/1.61 bln

3:30 pm : Market is showing no sign of slowing going into close as a bullish bias remains firmly intact. Having now broken through key resistance levels of 11,600 and 1325, the Dow and S&P 500, respectively, are at session highs, with the S&P now joining the Nasdaq with a gain of at least 1.0% on the day. Speaking of the tech-heavy Composite, it is now up an even stronger 1.5% as a more than 5-to-1 ratio of up to down volume lends some added conviction behind today's broad-based buying efforts.DJ30 +98.53 NASDAQ +34.27 SP500 +14.25 NASDAQ Dec/Adv/Vol 1138/1868/1.51 bln NYSE Dec/Adv/Vol 1024/2233/1.38 bln

3:00 pm : Onward and upward remains a driving mantra this afternoon as stocks continues to put together a solid advance. The Nasdaq is now up more than 1.3%, a gain only being matched by the Russell 2000, as plunging bond yields continue to improve the borrowing power of smaller companies. It is worth noting that, with only a few days remaining before Q3 comes to a close, some end-of-the-quarter window dressing on the part of portfolio managers is also contributing to today's afternoon recovery efforts. To wit, Integrated Telecom, Motorcycles, and Systems Software -- three of this quarter's best performers are also among today's top ten, while Gold, Steel and Aluminum maintain their standing as some of Q3's biggest disappointments.DJ30 +96.49 NASDAQ +29.18 SP500 +13.38 NASDAQ Dec/Adv/Vol 1193/1785/1.37 bln NYSE Dec/Adv/Vol 1033/2205/1.25 bln

2:30 pm : Buyers remain an active bunch as the blue chip averages continue to gain ground on the Nasdaq. Of the 27 Dow components trading higher, Caterpillar (CAT 64.2 +1.55) now leads the way with a 2.5% gain as economically-sensitive stocks rally around upbeat remarks about the economy from Dallas Fed President Fisher. An SEC Official reportedly saying big banks are not exposed to the $6 bln Amaranth Advisors lost on bad energy bets is also lending some reassurance for a Financials sector (+1.0%) that is already benefiting from a six-day rally in Treasuries. DJ30 +63.87 NASDAQ +21.74 SP500 +9.88 NASDAQ Dec/Adv/Vol 1247/1704/1.24 bln NYSE Dec/Adv/Vol 1125/2087/1.12 bln

2:00 pm : Stocks continue to hold their own, sporting respectable gains as nine out of 10 sectors remain positive. Telecom Services (+1.5%) continues to pace the way higher while gains of more than 1.0% from Technology and Consumer Discretionary provide the bulk of market leadership. Consumer Staples remains the only sector failing to garner any buying interest, as evidenced by today's worst performances coming from three of the sector's leading industry groups -- Drug Retail (-5.7%), Tobacco (-4.1%) and Agricultural Products (-2.9%).DJ30 +40.42 NASDAQ +19.38 SP500 +7.82 NASDAQ Dec/Adv/Vol 1292/1644/1.14 bln NYSE Dec/Adv/Vol 1233/1956/1.02 bln