STOCK MARKET WATCH, Thursday December 21

[ozymandius]

Thursday December 21, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 760 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2185 DAYS
WHERE'S OSAMA BIN-LADEN? 1891 DAYS
DAYS SINCE ENRON COLLAPSE = 1852
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 7
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 December 20, 2006

Dow... 12,463.87 -7.45 (-0.06%)
Nasdaq... 2,427.61 -1.94 (-0.08%)
S&P 500... 1,423.53 -2.02 (-0.14%)
Gold future... 624.30 -1.10 (-0.18%)
30-Year Bond 4.73% -0.00 (-0.06%)
10-Yr Bond... 4.60% -0.00 (-0.09%)






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 Mike Hartman

MARKETS EASE INTO HOLIDAY WEEKEND

Market volumes and volatility are nearly non-existent so far today in a very quiet session ahead of the long holiday weekend. The Dow and NASDAQ have been hovering in positive territory, roughly 12 points above yesterday’s close, Treasury notes and bonds are exactly at breakeven, the US dollar is 0.2% lower just below 83 on the dollar index, and spot gold has been flat-lined at $620.00 with spot silver literally flat-lined at $12.47. President Bush has been speaking on CNBC for the last hour or so…mostly propaganda on Iraq with little news for the financial markets. Mr. Bush is showcased on the financial news channel to promote his agenda. He knows he is swimming upstream with the new Congress. Two of the biggest points of difference between the President and Congress are how to deal with our growing trade imbalances with China and our need to devalue the dollar versus the yuan.

Last week Treasury Secretary Henry Paulson and Chairman of the Federal Reserve Ben Bernanke (leaders of our financial “Dream Team”) went to China to work on trade and currency reform. On face value it appears they came back empty-handed, except for whatever they may have agreed to behind closed doors. When the Dream Team returned, the headlines on Monday stated, “U.S. Current Account Deficit Widens to Record $225.6 Bln.” Then on Tuesday we got a surprise with higher than expected inflation in the Producer Price Index. Yesterday Mr. Paulson said China is not a currency manipulator, and now some of the Democrats in Congress and labor unions are threatening to enact punitive measures designed to pressure China.

-cut-

Upcoming Economic Calendar

Between now and the end of the year there are really only four more days that will have much in the way of economic reports. Thin trading and year-end window dressing should get us through the next week or so. The upcoming reports are as follows:

Thursday 12/21 GDP Report, Jobless Claims, Leading Indicators
Friday 12/22 Durable Goods Orders, Personal Income, Consumer Sentiment
Wednesday 12/27 MBA Application, Energy Report, New Home Sales
Thursday 12/28 Jobless Claims, Chicago Purchasing Managers, Consumer Confidence, Existing Home Sales

Very little has changed in the markets since my opening comments. The broad stock indexes are still a few points to the positive side and bond prices haven’t moved at all. The markets are quiet, and now is the time to make any final preparations for the long weekend ahead.

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

[ozymandius]

2. Today's Reports

8:30 AM Chain Deflator-Final Q3
Briefing Forecast 1.8%
Market Expects 1.8%
Prior 1.8%

8:30 AM GDP-Final Q3
Briefing Forecast 2.2%
Market Expects 2.2%
Prior 2.2%

8:30 AM Initial Claims 12/16
Briefing Forecast 315K
Market Expects 315K
Prior 304K

10:00 AM Leading Indicators Nov
Briefing Forecast 0.0%
Market Expects 0.1%
Prior 0.2%

12:00 PM Philadelphia Fed Dec
Briefing Forecast 3.0
Market Expects 4.0
Prior 5.1

http://biz.yahoo.com/c/e.html

[UpInArms]

22. 8:30 reports:

U.S. 3Q capital spending revised to 7.7% vs. 7.0% - 8:30 AM ET, Dec 21, 2006 - 40 seconds ago

U.S. 3Q corporate profits revised to 3.9% vs. 4.2% - 8:30 AM ET, Dec 21, 2006 - 40 seconds ago

U.S. 3Q disposable personal income revised 4.1% vs. 3.7% - 8:30 AM ET, Dec 21, 2006 - 40 seconds ago

U.S. 3Q residential investment revised to -18.7% vs. 18% - 8:30 AM ET, Dec 21, 2006 - 40 seconds ago

U.S. 3Q consumer spending revised to 2.8% vs. 2.9% - 8:30 AM ET, Dec 21, 2006 - 40 seconds ago

U.S. 3Q final sales revised to 1.9% vs. 2.1% - 8:30 AM ET, Dec 21, 2006 - 40 seconds ago

U.S. 3Q core consumer inflation unrevised at 2.2% - 8:30 AM ET, Dec 21, 2006 - 40 seconds ago

U.S. 3Q GDP revised to 2.0% annualized vs. 2.2% expected - 8:30 AM ET, Dec 21, 2006 - 40 seconds ago

U.S. 4-week avg. continuing jobless claims rise to 2.5 mln - 8:30 AM ET, Dec 21, 2006 - 40 seconds ago

U.S. continuing jobless claims rise 45,000 to 2.5 million - 8:30 AM ET, Dec 21, 2006 - 40 seconds ago

U.S. 4-week avg. initial jobless claims fall to 325,750 - 8:30 AM ET, Dec 21, 2006 - 40 seconds ago

U.S. weekly initial jobless claims rise 9,000 to 315,000 - 8:30 AM ET, Dec 21, 2006 - 40 seconds ago

[54anickel]

23. Economic Growth Slows to 2 Percent Pace

Economic Growth Slows to 2 Percent Pace in Late Summer Held Back by Housing Slump

http://biz.yahoo.com/ap/061221/economy.html?.v=8

WASHINGTON (AP) -- Economic growth slowed to a 2 percent pace in the late summer, more sluggish than previously thought, as the real-estate bust weighed on overall business activity.

The new reading on gross domestic product for the July-to-September quarter marked a slight downgrade from the 2.2 percent annual rate estimated a month ago, the Commerce Department reported Thursday.

The economy has been losing momentum all this year. The main culprit behind the third quarter's slowdown was the deepening housing slump.

Investment in home building was slashed at a 18.7 percent rate -- even more than previously estimated -- and the largest cut in 15 years. That shaved 1.2 percentage points off third-quarter growth, the most in nearly 25 years.

Economists were expecting the goverment's old GDP estimate of 2.2 percent growth for the third quarter to hold.

more...

[UpInArms]

26. Nov Leading Indicators

U.S. leading indicators up 0.2% in past 6 months - 10:00 AM ET, Dec 21, 2006 - 11 minutes ago

Slow growth likely to continue: Conference Board - 10:00 AM ET, Dec 21, 2006 - 11 minutes ago

U.S. Nov. leading indicators rise 0.1% as expected - 10:00 AM ET, Dec 21, 2006 - 11 minutes ago

[54anickel]

3. Mornin' Ozy. Great toon - I'm sure the ass-wipe will claim executive

privilege on everything again. SSDD :eyes:

[ozymandius]

7. Good morning 54anickel.

:donut: :donut: :donut:

SSDD, indeed. Just from checking the headlines about that elusive "executive priviledge" - the defensive dance has already begun.

[54anickel]

4. Just Before Christmas I'm as Good as I Can Be (Mogambo)

http://www.kitco.com/ind/Daughty/dec202006.html

snip>

Luckily for me, Tony Cherniawski, of the Practical Investor newsletter, is not anything like me, and is not (as my supervisor laconically described me in my last Annual Employee Evaluation) a "Lazy, worthless piece of human garbage." Mr. Cherniawski, without being forced to examine the actual report by a sadistic, slave-driving, nit-picking boss ("Is it done yet? Is it done yet? Is it freaking done yet, you stupid Mogambo moron (SMM)?" until I am sick of hearing it), sums it up with a good amount of appropriate snide sarcasm when he writes "Look, folks, there’s no inflation! Can you believe it? What’s even better is that the cost of energy went down 3.8% in the past 12 months! Now we can really tool around in our gas guzzlers."

He cleverly catches them in a lie when he gets more into the specifics. "By the way," he coolly starts out (so as not to tip his hand to the BLS that he is onto them and their slimy shenanigans), "if you can access the table in the BLS report, you can see just how much the cost of fuel has (supposedly) gone down in the last 3 months. (-7.2% in September, -7.0% in October and -.2% in November). Now, let me see…gasoline cost about $2.35 per gallon in August, so if we use the BLS calculations, we should be paying less than $2.00 a gallon now. Hmmm. The price of gasoline next door is, umm, err, …drumroll, please…$2.35 a gallon."

The new Producer Price Index came out, and sure enough, plenty of inflation, as the PPI was up 2 percent last month, the biggest monthly rise since (so they say) November 1974. In typical government response, George L. sent the news that on page six of the report we read that the BLS must "feel our pain", and they are going to, again, re-jigger inflation calculations of the PPI by removing those pesky items that go up in price, but include more of those prices that don't, so everybody will feel better.

In actual government-ese, "The Bureau of Labor Statistics will soon update the value weights used to calculate Producer Price Indexes to more accurately reflect recent production and marketing patterns. The new weights, which will be introduced in February 2007 with the release of January 2007 index data, will be based on shipment values from the year 2002. All indexes will be affected by this weight update, including all the industry net output indexes, as well as those calculated for traditional commodity groupings." Hahaha!

more...

[ozymandius]

5. Oil prices fall in Asia

SINGAPORE - Oil futures declined Thursday following the release of a U.S. weekly petroleum supply snapshot that showed an increase in inventories of gasoline and distillate fuels, which include heating oil, but a bigger-than-expected drop in crude stocks.

Light, sweet crude for February delivery fell 41 cents to $63.31 a barrel in Asian electronic trading on the New York Mercantile Exchange mid-afternoon in Singapore.

February Brent crude at London's ICE Futures exchange slipped 35 cents to $62.88 a barrel.

The Nymex crude contract rose 26 cents Wednesday to settle at $63.72 a barrel — a three-month closing high — after the U.S. Department of Energy said that crude inventories plunged by 6.3 million barrels last week from the previous week.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

8. BP plans boardroom shake-up

BP is examining ways to change its boardroom structure and composition to ensure that power is shared more evenly among its senior executive directors.

The oil company is already planning to name a chief operating officer - recreating a post last used almost 15 years ago - as it seeks a successor for the long-standing and powerful chief executive Lord Browne.

Investors believe this may be only the beginning of an attempt by BP to change the dynamics of its boardroom once Lord Browne retires at the end of 2008.

-cut-

The investigation panel, chaired by former US secretary of state, James Baker, is expected to report on BP's safety management and corporate culture at its US refineries next month.

http://business.guardian.co.uk/story/0,,1976367,00.html

The Bush family Consigliere is everywhere these days.

[54anickel]

6. Banks want new rules to exclude 'hybrid' loans

http://www.latimes.com/business/la-fi-hybrids21dec21,1,7064087.story?coll=la-headlines-business

Banking industry representatives urged regulators Wednesday not to expand recent guidelines on risky mortgages to include a type of sub-prime loan that has become increasingly popular in recent years.

A coalition of nine banking and housing groups, including the American Bankers Assn., asked six federal and state bank regulators to abandon the idea of adding so-called hybrid adjustable-rate mortgages, or hybrid ARMs, to guidelines they put forward in September.

"Reducing the availability of these products by precipitously imposing new underwriting requirements risks denying many borrowers the opportunity for homeownership or needed credit options," the groups wrote in a letter to the regulators.

Those mortgages, which represent about a quarter of the mortgage market, have been criticized by consumer groups for offering a "teaser" fixed interest rate that rises after an introductory period, resulting in "payment shock" to borrowers.

Lawmakers and consumer groups have called on regulators to incorporate the mortgages in the guidelines, which banks use to set underwriting and disclosure standards. The guidelines currently apply to interest-only and payment-option adjustable- rate loans.

more...

[54anickel]

14. Study Predicts Foreclosure for 1 in 5 Subprime Loans

http://www.stevequayle.com/News.alert/06_Money/061220.foreclosures.html

About one in five subprime mortgages made in the last two years are likely to go into foreclosure, according to a report released yesterday, ending the dream of homeownership for millions of Americans.

At that rate, about 1.1 million homeowners who took out subprime loans in the last two years will lose their houses in the next few years, the report said. The foreclosures will cost those homeowners an estimated $74.6 billion, primarily in equity.

The report, written by the Center for Responsible Lending, a research group in Durham, N.C., was based on data supplied by Moody’s Economy.com. Researchers examined more than six million mortgages made from 1998 until the third quarter of 2006; the report is the first nationwide study on the performance of subprime mortgages. It includes projected foreclosure data for all major metropolitan statistical areas. The highest default rates are expected to be in cities in California, Nevada, Michigan and New Jersey as well as Washington, D.C.

The report offers a somber assessment of loans that had helped millions of Americans with blemished credit attain homeownership. About 2.2 million borrowers who took subprime loans from 1998 to 2006 are likely to lose their homes.

Subprime loans are made to borrowers with unfavorable credit.

more...

[ozymandius]

9. Unfortunately, the end of the line for me this morning.

My workdays have been starting earlier than usual lately. I miss you folks something awful.

Have a wonderful day at the Casino!

Ozy :hi:

[54anickel]

10. Catch you later Ozy! Thanks for getting us started everyday. My time

has also been short lately. I've got to cut out early again today for another Dr appointment with my sister.

Have a good one!!!

[54anickel]

11. Thailand's Currency Curbs to Go When Baht Stabilizes

http://www.bloomberg.com/apps/news?pid=20601080&sid=ac3K.Wlgvu5g&refer=asia

Dec. 21 (Bloomberg) -- Bank of Thailand Governor Tarisa Watanagase defended measures to control the appreciation of the baht that wiped $23 billion from the value of Thai stocks, and said the rules will be removed once the currency stabilizes.

``As soon as the volatility reduces, we will lift the requirement,'' Tarisa said in an interview in Bangkok today. ``This is temporary.'' The baht fell by the most in more than three years.

Tarisa announced currency controls on Dec. 18 to stem a 16 percent rise in the baht. The measures prompted investors to dump Thai stocks and forced Finance Minister Pridiyathorn Devakula who preceded Tarisa as governor until October, to intervene by exempting equities from the rules, spurring a rebound in the benchmark SET Index.

``When it became a blunder, Pridiyathorn came to the rescue,'' said Thitinan Ponsudhirak, a political scientist at Chulalongkorn University in Bangkok. ``This puts Tarisa in a tight spot. The stock market lobby will want some blood.''

The finance ministry was informed the central bank would issue ``a measure on the baht, but I didn't look into the details,'' Pridiyathorn told a press conference on Dec. 19. The stock market slump was ``a side effect of the central bank's measure, but we have fixed it already.'' Tarisa said today the finance minister helped plan the steps.

Thailand's military on Sept. 19 ousted Prime Minister Thaksin Shinawatra's caretaker government in the nation's 18th coup since 1932, citing corruption and cronyism. Pridiyathorn was picked to run the Southeast Asian nation's economic policies.

more...

[54anickel]

12. Iceland Unexpectedly Raises Benchmark Rate to 14.25% (Update4)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aitFWlCQIe90&refer=home

Dec. 21 (Bloomberg) -- Iceland's central bank unexpectedly raised its benchmark interest rate to a record 14.25 percent after a widening current account deficit threatened to weaken the krona and push up inflation.

Sedlabanki opted to raise the repurchase rate from 14 percent, the 18th increase since May 2004, the Reykjavik-based bank said on its Web site today. Six out of eight economists surveyed by Bloomberg had forecast rates would be left unchanged.

They ``needed to do this to maintain their credibility,'' said Lars Christensen, a senior strategist at Danske Bank A/S in Copenhagen, one of two analysts to predict today's move. ``They're watching the krona. If it remains stable until the next meeting, then this is the peak, but they're not out of the woods yet.''

Higher borrowing costs may spark a recession in an economy that was one of Europe's fastest growing last year, expanding 7.5 percent. Investment in aluminum smelters, which fueled growth, has sucked in imports, pushing the current account deficit to 27 percent of gross domestic product in the third quarter.

The krona dropped 4.7 percent against the euro last month on concern Iceland will struggle to finance the current account gap. Declines in the krona have fueled inflation, which at 7 percent in December was almost triple the 2.5 percent target.

more...

[54anickel]

13. Ride the Right Bull!

http://www.321gold.com/editorials/saxena/saxena122006.html

CURRENT SITUATION - The financial markets continue to power ahead. Stocks are rising, commodities have begun the next advance in their bull-market and even the bond-market is strong! It seems that investors in every asset-class are convinced about the soundness of their judgement, but history reminds us that someone will be very wrong!

So, are the bond investors being fooled into believing that inflation isn't a problem? Or are the equity punters wrong about the coming interest-rate cuts and a soft landing in the US? Perhaps, the commodities camp is naïve and we are in fact witnessing a gigantic bubble in natural resources.

Amidst all these diverse views, my own money lies in the inflationary camp (commodities and emerging-market equities) and I suspect that the bond-investors will be the ones who get badly hurt. After all, central banks around the world continue to churn out a ridiculous amount of paper, otherwise known as money. Inflation (money-supply and credit growth) is spiralling out of control and all this excess liquidity is causing prices to rise all around us, thereby diminishing the purchasing power of our savings. So far, central banks (through their propaganda and skewed inflation figures) have managed to keep the public's inflationary fears under check. However, once the masses wake up to the inflation menace, there will be a stampede out of "paper" causing interest-rates to soar and the bond-market will sink like a rock. The same drama unfolded during the 1970's and I suspect history will repeat itself over the coming years.

Those who believe in a deflationary collapse don't understand our monetary system. Today, central banks have the freedom, the ability and the motive to print an endless amount of money, which will avoid any deflationary bust-ups at least in the immediate future. A more likely outcome is that thanks to the money-printing prowess of Mr. Bernanke and his counterparts elsewhere in the world, the purchasing power of all the "paper" currencies will continue to fall against tangible assets and eventually the entire monetary-system may come into question.

You must understand that banks are in the business of lending money and inflation benefits them immensely. The higher the rate of inflation (money-supply and credit growth), the bigger their profits from collecting interest on the issued loans. Moreover, inflation also keeps a segment of the public happy (at least those who have the ability to invest) as their assets continue to rise, thereby giving the illusion of prosperity. So, the hidden agenda of the central banks and politicians is to create and encourage inflation, whilst telling the public that they are in fact fighting inflation! I may add that during highly inflationary times, it is always the majority of the public which suffers badly as their savings, incomes and pensions continue to erode in value. So, in order to protect your wealth, you must avoid the "safe haven" of cash and invest in assets that are likely to benefit from the ongoing monetary insanity.

more...

[54anickel]

15. OT - It Floats

http://fredoneverything.net/BushPuppy.shtml

It’s all but official: The war in Iraq is lost. Report after leaked report says so. Everybody in Washington knows it except that draft-dodging ferret in the White House. Politicians scurry to avoid the blame. One day soon people will ask aloud: How did we let 3000 GIs die for the weak ego of a pampered liar and his desperate need to prove he's half the man his father was?

The troops from now on will die for a war that they already know is over. They are dying for politicians. They are dying for nothing. By now they must know it. It happened to us, too, long ago.

The talk among pols now is about finding an “exit strategy.” This means a way of pulling out without risking too many seats in Congress. Screw the troops. We must look to the elections. Do we really want an exit strategy? A friend of mine, with two tours in heavy combat in another war, has devised a splendid exit strategy. It consists of five words: “OK. On the plane. Now.” Bring your toothbrush. Everything else stays. We’re outa here.

It is a workable exit strategy, one with teeth, and comprehensible to all. But we won’t use it. We will continue killing our men, calculatedly, cynically, for the benefit of politicians. The important thing, you see, is the place in history of Bush Puppy. Screw the troops.

Face it. The soldiers are being used. They are being suckered. This isn’t new. It happened to my generation. Long after we knew that the war in Vietnam was lost, Lyndon Johnson kept it going to fertilize his vanity, and then Nixon spoke of the need to “save face”—at two hundred dead GIs a week. But of course Johnson and Nixon weren’t among the dead, or among the GIs.

more...

[54anickel]

16. Desperation in the White House

http://www.miami.com/mld/miamiherald/news/opinion/16250266.htm

The power brokers in Washington spent the week carefully arranging fig leaves and tasteful screens to cover the emperor's nakedness while he was busy pretending to listen hard to everyone with an opinion about Iraq while hearing nothing.

Sometime early in the new year, President Bush will go on national television to tell a disgruntled American public what he has decided should be done to salvage ''victory'' from the jaws of certain defeat in the war he started.

The word on the street, or in the Pentagon rings, is that he'll choose to beef up U.S. forces on the ground in Iraq by 20,000 to 30,000 troops by various sleight-of-hand maneuvers -- extending the combat tours of soldiers and Marines who are nearing an end to their second or third year in hell and accelerating the shipment of others into that hell -- and send them into the bloody streets of Baghdad.

These additional troops are expected to restore order and calm the bombers and murderers when 9,000 Americans already in the sprawling capital couldn't. They're expected to do this even when Bush's favorite (for now) Iraqi politician, Prime Minister Nouri Kamel al-Maliki, refuses to allow them to act against his primary benefactor, the anti-American cleric Moqtada al Sadr and his Shiite Muslim Mahdi Army militiamen who kill both Americans and Sunni Arabs.

This hardly amounts to a ''new way forward'' unless that definition includes a new path deeper into the quicksand of a tribal and religious civil war where whatever Bush eventually decides is already inadequate and immaterial.

more...

[54anickel]

17. USD - 07 a final year?

http://www.321gold.com/editorials/laird/laird122106.html

This article is going to discuss the growing world discontent with the USD. Previously, although the US fiscal and trade deficits were in danger territory, the US trade partners were willing to continue to accumulate USD foreign reserves as they sold masses of everything under the Sun to the US.

They benefited from massive economic growth, and let the USD hot money circulate in their economies as washed hot money (hot money comes in as USD and then is changed into local currency or lent out in local currency - this causes lending and asset bubbles locally, creating a seeming endless prosperity bubble until that comes to the inevitable end and they have massive inflation or asset bubble collapses). Ultimately this hot money issue will decide the USD fate anyway, but there are sinister looking issues, particularly with China, that may cause a USD crisis in 07.

Effect of a serious USD drop on your savings

As far as the USD is concerned, there is a growing consensus that our trade partners are getting tired of accumulating the USD. If this becomes severe enough, the USD will experience a rapid fall in value on the order of over 30% in a year. The US stock and bond markets would collapse, and US interest rates rise into the teens at the least. The value of your 401k savings and other cash type accounts would drop 30% in USD terms based on the rising prices of everything, and another 30 to 50% in nominal USD value as well as the stock and bond markets collapsed. Net USD/real value of losses to your 401ks? Very possibly over 60% - in one year.

If the USD devalues heavily in 07, we could be talking losses on the order of 60% net real value of USD financial assets. I get the impression that most people only think their dollar accounts would devalue modestly - perhaps 10% if the USD were to devalue heavily in 07. They are mistaken. The value would drop more on the order of what I just calculated in real terms - in any case probably over 50%. The losses would be from a lower USD value combined with dropping stock and bond market values - things which every 401k and other retirement account is based on.

The US and every trade partner is hoping the USD could gradually devalue. They will work together for that end. That may happen. However, there is a serious level of risk the USD decline could get out of control. Central banks don't have all the cards. Markets can panic and outrun central bank efforts to stabilize things.

That exact same calculus is understood by our trade partners and will affect their USD holdings in the same exact way. The only reason why the USD has held up so far is because our trade partners do indeed understand this calculus, and have been so far able to stem any serious USD mini crises. The problem is, at some point there will be one mini crisis that is not stemmed, then we look over the edge of the precipice. It would not all happen in one fell swoop, but, at the end of a year, we could easily see a net 50% loss of real value of any USD holding.

more...

[54anickel]

18. Bulls believe in Santa rally

Stocks look to continue December strength as futures point up ahead of new economic readings.

http://money.cnn.com/2006/12/21/markets/stockswatch/index.htm

NEW YORK (CNNMoney.com) -- Stocks looked poised to get back on track Thursday ahead of some new economic readings, another sign of the strength seen in the markets most of this month.

Stock futures, which predict the direction of stocks, were up in early trading. Stocks have been seeing the so-called end of the year Santa Clause rally with a number of record highs for the Dow Jones industrial average. But after trading in record high territory much of the day Wednesday, a late sell-off caused them to close slightly lower on the day.

At 8:30 a.m. ET the Commerce Department will give its final reading on gross domestic product in the third quarter. Economists surveyed by Briefing.com forecast that broad measure of the nation's economic activity grew at an annual 2.2 percent percent, unchanged from its previous reading. The Labor Department also will report initial jobless claims at 8:30 a.m.

At 10 a.m. ET research firm The Conference Board will release its report on leading economic indicators, which economists are forecasting rose at 0.1 percent for November, down from a 0.2 percent rise in October. And the Philadelphia Federal Reserve will report on business conditions in its region in December at noon.

In corporate news, Nike (Charts) said Wednesday that quarterly net profit rose nearly 8 percent, beating Wall Street estimates. But shares slipped 1.5 percent in after-hours trading after gaining 3.7 percent before the bell on hopes of an even stronger report.

more...

[UpInArms]

19. dollar watch (sort of)

ino.com is not working this a.m. so - here's the blather:

US Dollar Gains on Further Profit Taking Ahead of Holiday

http://www.dailyfx.com/story/currency/eur_news/US_Dollar_Gains_on_Further_1166643238823.html

The US Dollar regained ground for the first day since Friday, as relatively thin market conditions allowed profit-taking to produce a large move. Despite reaching intraday highs of 1.3248, the EURUSD saw continued offers bring it down to lows of 1.3160 through afternoon trade. In similar form, the GBPUSD moved to three-week highs at 1.9751 before selling interest found a floor at 1.9619.

With no new US data on the agenda, it seems that the majority of price action was a result of pure capital flows. Dealers cite thinning liquidity ahead of the Christmas holiday as the primary driver of larger-than-usual moves, especially as traders book dollar-short profits ahead of the end of the year. This was especially evident ahead of the London fix, with the Pound losing nearly 70 points ahead of the de facto European market close.

In terms of changed fundamentals, the only relatively significant economic data through the US session was Canadian Wholesale Sales and US DOE Crude Oil Inventories. Canadian wholesale numbers disappointed for the second straight month, with the previous month’s change being revised lower and the current result falling in below expectations. The poor figures were not enough to slow the broader Loonie rally, however, as strong crude oil prices underpinned demand. This continued through 15:30 GMT, when the US Department of Energy reported on energy stockpiles for the world’s largest economy. With a sharper than expected drop in Crude Oil inventories, commodity prices continued higher through the moments that followed—further lending to a USDCAD decline. As initially volatile reactions slowed, however, we saw both commodity and currency markets retrace some of the day’s earlier moves.

Global equities were slightly stronger through the afternoon, but relatively thin trade gave little legitimacy to the minute advances. Indeed, US indices shed earlier gains when higher oil prices cut into broader market bullishness. At time of writing, the S&P 500 was unchanged at 1425.88, while the Dow Jones Industrial Average was a mere 0.1 percent higher to 12,484.94. A downgrade in outlook for FedEx earnings dragged Transport stocks lower, while small-scale takeovers led other sectors higher.

...more...

[54anickel]

20. Promoting Goldman on Govt Tab (Willie)

http://www.321gold.com/editorials/willie/willie121406.html

snip>

THE REAL PURPOSES
So now why are Paulson and Bernanke visiting Beijing this time? We hear the official reasons. What events or statements have been made in recent weeks? To be sure, a few important public statements have been made to change the landscape and tense relationship. The Peoples Bank of China deputy governor Wu Xiaoling stated in late November: "Firstly, long-term interest rates are falling, reducing returns on bond investments. Secondly, the exchange rate of the dollar, which is the major reserve currency, is going lower, increasing the depreciation risk for East Asian reserve assets." In addition, an anonymous source was quoted: "These low rates can easily lead to an asset price bubble, and this is what we are paying attention to." The details are that since summertime, the yuan exchange rate has fallen from 8.0 to 7.82 for over a 2% decline. Also, the paid yield on long-term USTBonds to them has fallen from 5.0% months ago to 4.5% now, which is 10% less income. On this trip, Bernanke joins the team. We are not told of who or how many Wall Street investment bankers are included in the entourage. My opinion, pure conjecture, is that the current trip has two purposes.

First, the Chinese have threatened to withdraw from USTreasury Bond purchases, and possibly to sell some of their vast $1000 billion horde. The "diversification" word sends shock waves in the currency world. Their leaders harp and threaten on a regular basis about diversification, a dreaded word in the FOREX trader pits. Bernanke is there most likely to convince the Chinese not to diversify, since doing so would harm the USEconomy. Their export business would suffer, while their foreign reserves (national savings account) would decline in value. Important jobs within China would be lost, putting their leadership at risk. The dynamic duo have made the journey for the purpose of urging China not to diversify, at least not until after several more lucrative deals are brokered. Independent control of our nation is slowly eroding, not just with energy security but with industrial security. Precious few seem to notice, until perhaps now.

Secondly, Paulson will act once more as the Wall Street investment banker ambassador, to strike secret deals on stock issuance and public offerings. The pressure to open up their financial sector comes with unspoken mega-million$ in fees for the Manhattan insiders, who will surely not share their booty with small fry Wall Street firms, not with Paulson at guard. Paulson repeatedly has referred to the path of reforms, which is the euphemism for opening up their banks to US partnerships and competition. It is more than banks though. Numerous other US corporations across numerous industries, from construction firms to car makers to telecommunications, they wish to enter China, which has concrete roadblocks in place to obstruct. They must remember all too well the days of colonialism early in the 20th century. Chairman Mao fought the foreign devils, and the memory lingers.

Wall Street lusts and drools over the prospect of investment banker fees. This is the immediate opportunity, with many zeros on pay checks and coveted bonuses. In addition, major Manhattan firms are putting their initial positions in place BEFORE the initial public offerings to sell the stock. The deals will profit not only US princes of government service, but Chinese communist captains. Chinese leaders, like their US counterparts, have vested interests for personal gain in the sale or capitalization of some trophy corporations (mostly big banks) with enormous future prospects as the Middle Kingdom continues to emerge as a world leader. The losers are the US workers and investors. Systemically, global village forces continue to exert pressures, both to level the wage playing field and to provide exploitation opportunities for those in power. The trend of outsourcing jobs to Asia has both assisted US businesses and wrecked US worker lives.

GROWING VULNERABILITY, DESPERATION
The degree of US vulnerability is difficult to quantify, off the scale of available adjectives. China could shut down the entire USEconomy if a concerted program were embarked upon to dump USTBonds. They could permit US shopping retail centers to perform a vanishing act where the majority of electronics, clothing, housewares, and furniture would be halted in supply.

Few Americans fully appreciate and consider the vast problems facing China. They have several demographic classes which migrate step by step from rural to urban centers. Large tracts of farm lands are being taken for industrial purposes, offering a higher wage in factory jobs. People are demonstrating openly against displacement, pollution, and forced compensation. The number of violent events from such demonstrations is on an alarming rise. Beijing leaders are highly suspicious of Western business. So far they have managed the Westerners brilliantly, by permitting technology and fixed investment to enter, and finished products to leave. But they have blocked competition directly from outsiders in key industries. Where they have opened a segment to competition, Chinese firms have fared poorly. Now Beijing leaders are slow to permit foreign competition and partnerships. They want the next piece, more total control of the technology, greater independence to expand beyond original partnerships. The US firms are reluctant, and for good reason.

[54anickel]

21. The United States is Insolvent

http://drmss.com/wordpress/?p=17

Prepare to be shocked.

The US is insolvent. There is simply no way for our national bills to be paid under current levels of taxation and promised benefits. Our combined federal deficits now total more than 400% of GDP.

That is the conclusion of a recent Treasury/OMB report entitled Financial Report of the United States Government that was quietly slipped out on a Friday (12/15/06), deep in the holiday season, with little fanfare. Sometimes I wonder why the Treasury Department doesn’t just pay somebody to come in at 4:30 am Christmas morning to release the report. Additionally, I’ve yet to read a single account of this report in any of the major news media outlets but that is another matter.

But, hey, I understand. A report is this bad requires all the muffling it can get.

In his accompanying statement to the report, David Walker, Comptroller of the US, warmed up his audience by stating that the GAO had found so many significant material deficiencies in the government’s accounting systems that the GAO was “unable to express an opinion” on the financial statements. Ha ha! He really knows how to play an audience!

In accounting parlance, that’s the same as telling your spouse “Our checkbook is such an out of control mess I can’t tell if we’re broke or rich!” The next time you have an unexplained rash of checking withdrawals from that fishing trip with your buddies, just tell her that you are “unable to express an opinion” and see how that flies. Let us know how it goes!

Then Walker went on to deliver the really bad news:

more...

[54anickel]

24. Ford expects Toyota to overtake it in U.S.: paper

http://today.reuters.com/news/articlebusiness.aspx?type=ousiv&storyID=2006-12-21T091825Z_01_N21450861_RTRIDST_0_BUSINESSPRO-FORD-DC.XML&from=business

NEW YORK (Reuters) - Ford Motor Co. (F.N: Quote, Profile , Research) expects Japan's Toyota Motor Corp. (7203.T: Quote, NEWS , Research) to unseat it next year as the second biggest company behind General Motors Corp. (GM.N: Quote, Profile , Research) in the American car market, a position Ford has held since the 1920s, the New York Times said on its Web site on Thursday.

Citing internal Ford projections, the paper says the projections show that company officers believe Ford will permanently fall to third place as soon as January.

Ford, which is struggling to restructure itself under a plan called The Way Forward, predicted in September that its market share within two years would bottom out at 14 to 15 percent of the market, making it smaller than Toyota is now, the paper said.

While it had not specifically predicted that it would end up behind Toyota, the implication was clear, the New York Times said.

more...

[54anickel]

25. Streets ahead of the rest

http://www.economist.com/finance/displaystory.cfm?story_id=8458255

Humility? Forget it


IT HAS been a year to make even Croesus blush for the big Wall Street securities firms. Goldman Sachs, Bear Stearns and Lehman Brothers have all announced record profits and beaten analysts' expectations in the process. Morgan Stanley, which was due to report on December 19th, has also had an enviable year. Bloomberg, a financial-information firm, calculates that the industry will make $29.1 billion after tax in fiscal 2006, a 43% rise on last year, which was itself a bumper one. New York's tabloids have had a field day, splashing headlines like “Sachs of Loot” and fantasising about all the things outsized bonuses could buy.

Goldman, the best performer, is setting aside an unprecedented $16.5 billion to reward its talent, equal to $620,000 per employee across the firm. But it is now so profitable that the ratio of pay to revenue has actually fallen, to 43.7%, well below the 50% seen as a ceiling in the industry.

This is all good news for purveyors of luxury goods and fancy homes, who hope to pick up more than a few crumbs from Wall Street's table. Orders for bespoke suits are up on last year, says Jack Mitchell, who kits out some of the financial bigwigs. New York officials are delighted, too. They have slashed the city's budget-deficit forecast, in part because of the sharp rise in tax receipts from investment banks.

The banks can thank near-perfect markets for their good fortune. Mergers and private equity are booming, as are stockmarkets (the Dow hit another high last week). Volatility is low, credit still plentiful. Hedge funds and others are trading derivatives at a furious pace, providing a further lift to the banks' prime-brokerage businesses. In these conditions, the banks have (so far) profited handsomely from ratcheting up their own risk-taking. Across the industry, value-at-risk—a measure of potential losses on a bad trading day—has risen steadily. Some 70% of Goldman's net revenues now come from trading and investing on its own account.

Everyone knows this cannot last forever. The banks are hoping that their scope will help them when markets turn. Growth prospects look good in Asia and Europe, and all of the leading firms apart from Bear Stearns now do a big chunk of their business outside America. They are also beefing up their distressed-debt and bankruptcy teams, a source of profit that should mitigate any pain from a rise in defaults and tougher debt markets.

more...

[Roland99]

27. 12:14pm - Flatness abounds

DJIA 12,448.89 -14.98 -0.12%
Nasdaq 2,427.60 -0.01 -0.00%
S&P 500 1,421.86 -1.67 -0.12%
Dow Util 457.10 -0.51 -0.11%
NYSE 9,118.65 -10.23 -0.11%
AMEX 2,040.04 -17.22 -0.84%
Russell 2000 788.44 +2.88 +0.37%
Semcond 471.09 -1.79 -0.38%
Gold future 623.00 -1.30 -0.21%
30-Year Bond 4.73% +0.00 +0.08%
10-Year Bond 4.60% UNCH UNCH

[Roland99]

28. Philly Fed index shows factory sector contracting

http://www.marketwatch.com/news/story/philly-fed-index-shows-factory/story.aspx?guid=%7B4192E6A6%2D2D28%2D4899%2D81EC%2DFFA7A6AA9424%7D

WASHINGTON (MarketWatch) -- Manufacturing activity contracted in the Philadelphia region in December, the Federal Reserve Bank of Philadelphia reported Thursday. The Philly Fed index fell to negative 4.3 in December from 5.1 in November. Readings below zero indicate contraction. Economists expected sentiment to remain relatively weak at 5.3. Indicators for new orders and unfilled orders also fell below zero. Shipments remained healthy.

More surprised economists.

[UpInArms]

30. Chicago Fed natl activity index still weak in Nov - Below Zero (Isn't that a Recession?)

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=2006-12-21T150016Z_01_CHB000242_RTRIDST_0_USA-ECONOMY-ACTIVITY-URGENT.XML

CHICAGO, Dec 21 (Reuters) - The Federal Reserve Bank of Chicago said on Thursday its gauge of the national economy rose in November, although it indicated growth remained below the historical trend.

The Chicago Fed said its National Activity Index rose to -0.26 in November from an upwardly revised -0.30 (from -0.31) in October.

The three-month moving average of the index fell to its lowest point since June 2003 at -0.32, weakening from a downwardly revised -0.22 (from -0.19) in October.

Any reading below zero for the three-month average suggests economic growth is below its historical trend, and the Chicago Fed said the current value indicates little inflationary pressure over the coming year.

<snip>

Employment indicators had a bigger negative impact on the month as the jobless rate edged up and weekly hours worked in manufacturing slipped.

...more...

[Roland99]

31. Must be a fluke. Will someone give the Econ-O-Meter a whack?

[hatrack]

32. But . . . but . . . but . . . the economy is strong and getting stronger!

That's what our Great and Wise Leader said yesterday!

[ozymandius]

34. He's a stupid bastard. Pay no attention to that idiot.

:hi:

[UpInArms]

29. 1:21 EST hit and run numbers and blather posting

Dow 12,408.91 54.96 (0.44%)
Nasdaq 2,413.86 13.75 (0.57%)
S&P 500 1,417.16 6.37 (0.45%)
10-Yr Bond 4.571% 0.024

NYSE Volume 1,325,991,000
Nasdaq Volume 1,048,573,000

1:00 pm : The indices extend their reach to the downside as sellers take control of this afternoon's trading. As reflected in the A/D line, decliners now outpace advancers on the NYSE and the Nasdaq for the first time today. The inability by the Dow, S&P 500 and Nasdaq to find support above key technical levels of 12425, 1420 and 2420, respectively, has exacerbated the recent move to new lows.DJ30 -50.71 NASDAQ -11.34 SP500 -5.36 NASDAQ Dec/Adv/Vol 1652/1285/938 mln NYSE Dec/Adv/Vol 1858/1321/680 mln

12:30 pm : As presaged in the last comment, the latest read on regional manufacturing activity has influenced today's trading action. At the top of the hour, the Philadelphia Fed index checked in with a negative reading for the third time in four months, showing a decline of 4.3 (consensus +4.0) to indicate contraction. Since the report joins the industrial heavy Chicago PMI and the national ISM index at contractionary sub-50 levels in November, stocks have sold off on the news.

On a positive note, the prices paid component fell to 20.7, the lowest since March, easing inflation concerns and perhaps preventing a larger market pullback since inflation risk remains the Fed's main focus. Be that as it may, with the market more concerned about the pace of economic growth than potential pricing pressures for the time being, the disappointing Philly Fed survey leaves all three major averages at session lows.DJ30 -35.10 NASDAQ -5.12 SP500 -4.08 NASDAQ Dec/Adv/Vol 1360/1549/778 mln NYSE Dec/Adv/Vol 1455/1684/570 mln

12:00 pm : Stocks continue to trade sideways midday as split industry leadership dictates the lackluster action of a market that looks tired. As a reminder, the Dow, S&P 500 and Nasdaq have rallied virtually unabated over the last five months and are up 6.7%, 6.5%, and 7.5%, respectively, in Q4, leaving many on Wall Street questioning the sustainability of such a run-up.

With the housing effect bottoming and manufacturing activity becoming the largest risk in 2007 given the recent drop in demand and production, today's Philly Fed report, which will be out momentarily, will be closely watched and may act as the catalyst to set a more definitive tone for trading. Investors may also be waiting for Richmond Fed President Jeffrey Lacker's speech at 1:00 ET to shed some more light on the economic outlook.

With regard to this morning's economic data, the Commerce Dept. showed at 8:30 ET that the U.S. economy grew at a slower pace (2.0%) than previously estimated (2.2%), marking the weakest quarter since Q4 of last year when the economy expanded at a 1.8% annual rate. Fortunately for the bulls, the dated nature of the report and the forward-thinking of the market have so far left investors more interested in the current pace of economic growth and a focus on forecasts for 2007.

While oil prices near session lows bode well for consumers, especially in the midst of the holiday-shopping season, subsequent consolidation throughout the profit engine that is the Energy sector raises concerns about its earnings potential heading into the new year. Crude for February delivery is down 1.8% near $62.60/bbl amid speculation mild weather forecasts will diminish demand for heating oil. The absence of leadership from even more influential sectors like Technology and Industrials is also acting as a constraining factor.

Of the five sectors trading higher, Telecom is noticeably pacing the way higher, as the pending AT&T (T 35.37 +0.42) and BellSouth (BLS 46.24 +0.69) merger comes closer to winning approval; but as one of the least influential among the 10 S&P 500 sectors, its 1.0% advance extending its year-to-date gain to more than 30% is having little impact on the overall market.

Consumer Staples is the other sector in focus, getting a lift following better than expected earnings. Upside surprises have come from the likes of ConAgra (CAG 27.56 +0.71) and General Mills (GIS 58.87 +0.88), both of which are at new 52-week highs. Albeit not a sector component, Rite Aid (RAD 5.48 +0.11) swinging to a profit in Q3 is providing a floor of support for Drug Retail (e.g. CVS +1.9%, WAG +1.1%). BTK +0.1% DJ30 -3.77 DJTA -0.3% DJUA -0.2% DOT +0.1% NASDAQ +3.21 R2K +0.4% SOX -0.4% SP500 +0.29 XOI -0.6% NASDAQ Dec/Adv/Vol 1227/1663/686 mln NYSE Dec/Adv/Vol 1341/1770/500 mln

[ozymandius]

33. Good night and good luck.

Dow 12,421.25 Down 42.62 (0.34%)
Nasdaq 2,415.85 Down 11.76 (0.48%)
S&P 500 1,418.30 Down 5.23 (0.37%)
10-Yr Bond 4.549% Down 0.046
NYSE Volume 2,322,421,000
Nasdaq Volume 1,819,138,000

4:20 pm : Not surprisingly following the market's run-up of late, renewed concerns of weakness in areas that were thought to be stabilizing exacerbated worries about the pace of economic growth, prompting investors to take some more money off the table.

Out of the gate, stocks were showing their resilience to more evidence of a slowing U.S. economy. Before the bell, the Commerce Dept. showed at 8:30 ET that the U.S. economy grew at a slower pace (2.0%) than previously estimated (2.2%), marking the weakest quarter since Q4 of last year when the economy expanded at a 1.8% annual rate. Fortunately for the bulls, the dated nature of the report and the forward-thinking of the market have so far left investors more interested in the current pace of economic growth and a focus on forecasts for 2007.

However, with the Dow, S&P 500 and Nasdaq running virtually uncontested over the last five months, posting respective gains of 6.7%, 6.5%, and 7.5% in Q4 so far, investors were already exhibiting a cautious tone midday ahead of a potentially market-moving piece of economic data. Then, as traders worked their way through the New York lunch hour, the Philadelphia Federal Reserve reported the biggest drop (-4.3%) in manufacturing activity in more than three years. That was the third negative reading in four months.

Since the report joins the industrial heavy Chicago PMI and the national ISM index at contractionary sub-50 levels in November, economically-sensitive stocks like Alcoa (AA 29.26 -0.78) got hit hard. As today's worst performing Dow component, Alcoa's 2.6% decline contributed to the Materials sector pacing the way lower among the eight sectors losing ground. Richmond Fed President Lacker saying that housing weakness will continue to be a drag on economic growth in first half of 2007, which runs counter to a growing belief that housing sales seem to be bottoming, also weighed on sentiment.

A more influential area of weakness, though, was Technology. PMC-Sierra (PMCS 6.60 -0.29) cutting its Q4 sales targets renewed concerns about growth prospects within the influential semiconductor space. Jabil Circuit (JBL 24.18 -2.38) plunging 9% after also issuing downside revenue guidance last night added insult to injury to the tech sector, leaving Electronic Manufacturing Services (-4.2%) as the day's worst performing S&P industry group.

On a positive note, oil prices plunged 1.7% and closed near session lows, which bodes well for consumers especially in the midst of the holiday-shopping season. However, subsequent consolidation throughout the profit engine that is the Energy sector raised concerns about its earnings potential heading into the New Year. Crude for February delivery finished at $62.66/bbl amid speculation mild weather forecasts will diminish demand for heating oil.

Telecom was among the only bright spots, as the pending AT&T (T 35.22 +0.27) and BellSouth (BLS 46.28 +0.73) merger came closer to winning approval; but as one of the least influential among the 10 S&P 500 sectors, its 0.6% advance had little impact on the broader market.

Consumer Staples was the only other sector to finish in the green, getting a lift following better than expected earnings. Upside surprises came from the likes of ConAgra (CAG 27.38 +0.53) and General Mills (GIS 59.07 +1.08), both of which closed at new 52-week highs. DJ30 -42.62 NASDAQ -11.76 SP500 -5.22 NASDAQ Dec/Adv/Vol 1700/1346/1.75 bln NYSE Dec/Adv/Vol 1967/1336/1.28 bln