STOCK MARKET WATCH, Friday April 27

[ozymandius]

Source: DU

Friday April 27, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 633 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2308 DAYS
WHERE'S OSAMA BIN-LADEN? 2018 DAYS
DAYS SINCE ENRON COLLAPSE = 1978
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 9
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 April 26, 2007

Dow... 13,105.50 +15.61 (+0.12%)
Nasdaq... 2,554.46 +6.57 (+0.26%)
S&P 500... 1,494.25 -1.17 (-0.08%)
Gold future... 678.00 -9.40 (-1.39%)
30-Year Bond 4.87% +0.04 (+0.79%)
10-Yr Bond... 4.68% +0.04 (+0.82%)






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

---

more radfringe here


Read more: DU

[ozymandius]

1. Today's Market WrapUp

Nasdaq 100 to S&P 500 Ratio Approaches Critical Juncture
BY MARTIN GOLDBERG, CMT

In this week of technology celebration, the relationship between technology stocks and all stocks is nearing a critical technical juncture. Why is this important? This relationship has been a useful tool with regard to picking important tops and bottoms in the stock market. Bull markets and rallies have been accompanied by out performance of technology stocks. This trend has reversed for bear markets and corrections against the bull trend. Yet in the last couple of months, something seems to have changed where the latest bull run is accompanied by underperformance of tech stocks.

The long term relationship is shown in the 10-year weekly chart below. The late 1990’s bull run in the US stock market was accompanied by the Nasdaq bubble - a multi-year timeframe where the Nasdaq 100 outperformed the general market by a factor of over 300 percent. As the market topped in 2000, and then went into a bear market, exactly 100 percent of the Nasdaq out-performance was retraced. Following the October of 2002 bottom, as the market raced up, the Nasdaq 100 raced even faster. But from January 2004 to the present, the Nasdaq 100 has underperformed the general market as represented by the S&P 500. Still the year-end and pre-election rallies have been met with relatively brief periods of Nasdaq out-performance, although the longer term trend has been neutral at best or bearish.

-cut-

Considering 1993 as our “baseline,” today’s Nasdaq 100 to S&P 500 ratio is a full 50% higher today than it was in 1993. Since it is a ratio chart, it represents market participants’ relative preference for Nasdaq 100 stocks versus S&P 500 stocks over a long period of time. It is my opinion that the market is still placing an unreasonable premium on tech stocks. An example of how this can be seen is by the negligible dividends available from Nasdaq 100 stocks. The price to earnings ratio (P/E) is also way higher what one would expect for an index of 100 stocks with so high a market capitalization. This price to earnings ratio is one of Wall Street’s dirty little secrets as you will not find it in Barron’s stock lab or any other such household data source.

-cut-

Today’s Market

The market finished neutral today and this can be interpreted as a well deserved rest for a surging market. Volume has picked up again this week thereby confirming the positive trend. If the market were to maintain or increase upon today’s relatively high trading volume and there was little or no upside in price action, that would be bearish. The last 20 trading days has seen the Dow up 18 days and down only 2. This is a tremendously overbought condition that would not provide a low risk entry point in which to buy stocks. If the late February drop put the stock market in the spotlight of the public, the subsequent rally has kept the public positively focused on the stock market. While a correction is perhaps overdue, a good case can be made for a parabolic bullish run. Such behavior gripped the Nasdaq market in late 1999 as the public capitulated with a plea to “just get me in,” and the bull market went a lot further. How much resistance to this reckless behavior was offered in professional circles at that time? It couldn’t have been very much resistance as you can see the results below and remember the psychology and mood. One does not have to look very far to see that some of the staunchest contrarians are even paying homage to Dow 13,000. While stock market wives’ tales and seasonality are being followed as if they were gospel, this analyst has not heard a peep about “13” being a bad luck number. It is my suspicion that seasonality will fail at the height of its popularity. So may be this year’s year-end rally will be the time? Who is to say; seasonality could even sustain itself until the next Presidential Election Rally.

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

[ozymandius]

2. Today's Reports

8:30 AM GDP-Adv. Q1
Briefing Forecast 1.5%
Market Expects 1.8%
Prior 2.5%

8:30 AM Chain Deflator-Adv. Q1
Briefing Forecast 3.0%
Market Expects 3.2%
Prior 1.7%

8:30 AM Employment Cost Index Q1
Briefing Forecast 0.9%
Market Expects 0.9%
Prior 0.9%

10:00 AM Mich Sentiment-Rev. Apr
Briefing Forecast 85.3
Market Expects 85.5
Prior 85.3

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

[UpInArms]

25. 8:30 reports (and they are not pretty)

13. U.S. 1Q final sales up 1.6%, weakest in 5 quarters
8:30 AM ET, Apr 27, 2007 - 4 minutes ago

14. U.S. GDP up 2.1% in past year, 4-year low
8:30 AM ET, Apr 27, 2007 - 4 minutes ago

15. U.S. 1Q core PCE price index up 2.2% annualized
8:30 AM ET, Apr 27, 2007 - 4 minutes ago

16. U.S. 1Q business investments up 2.0%
8:30 AM ET, Apr 27, 2007 - 4 minutes ago

17. U.S. 1Q residential investments down 17%
8:30 AM ET, Apr 27, 2007 - 4 minutes ago

18. U.S. 1Q consumer spending up 3.8%
8:30 AM ET, Apr 27, 2007 - 4 minutes ago

19. U.S. 1Q GDP price index up 4%, highest since 1991
8:30 AM ET, Apr 27, 2007 - 4 minutes ago

20. U.S. Q1 12-month ECI gain largest since March '05
8:30 AM ET, Apr 27, 2007 - 4 minutes ago

21. U.S. 1Q GDP weakest since 1Q 2003
8:30 AM ET, Apr 27, 2007 - 5 minutes ago

22. U.S. Q1 employment costs index up 3.5% yr-on-yr vs 3.3% Q4
8:30 AM ET, Apr 27, 2007 - 5 minutes ago

23. U.S. 1Q GDP up 1.3% annualized vs. 1.7% expected
8:30 AM ET, Apr 27, 2007 - 5 minutes ago

24. U.S. Q1 employment cost index up 0.8% vs 0.9% expected
8:30 AM ET, Apr 27, 2007 - 5 minutes ago

[KayLaw]

28. I watched CNBC just now.

They're trying to do their cheer-leading best but had to mention stagflation. One person said the Consumer Spending was a plus but I don't agree. We have to spend more because everything costs so much more. It's not like we're all so happy and confident and rolling in the dough, for Pete's sake.

[Roland99]

31. And shifting from Mortgage Equity Withdrawal to Credit Card Debt.

Hope everyone has airbags on their ass.

[Roland99]

32. did it again...replied to wrong post

:)

[UpInArms]

34. UMich at 87.1 (we're better!)

26. UMich April consumer sentiment said 87.1 vs. 85.0 expected
10:01 AM ET, Apr 27, 2007 - 39 minutes ago

[Roland99]

39. Depends on the perspective: - U.S. April consumer sentiment at 7-month low-UMich

http://www.reuters.com/article/economicNews/idUSN2723812520070427

NEW YORK, April 27 (Reuters) - U.S. consumer sentiment fell in April to its lowest in seven months but was better than first estimated this month and above forecasts, due to optimism over the recent stock market rally, a survey showed on Friday.

The Reuters/University of Michigan Surveys of Consumers said the final April reading of its consumer sentiment index slipped to 87.1 from from 88.4 in March. It was the third straight monthly fall in the index.

April's final result was the lowest since 85.4 in September 2006 but was up from the 85.3 preliminary April reading. The median forecast among analysts polled by Reuters was 85.2. The 54 forecasts ranged from 84.0 to 88.8.

The survey showed increased inflation expectations among consumers, who also fretted over rising gasoline prices and troubles in the housing market. However, the stock market's recent stellar performance did cheer some.

[UpInArms]

35. Rental Vacancy Rates Rising - Homeowner Vacancy Rises to Record

19. U.S. 1Q rental vacancy rate rises to 10.1%
10:09 AM ET, Apr 27, 2007 - 30 minutes ago

20. U.S. 1Q homeowner vacancy rate rises to record 2.8% vs. 2.7%
10:09 AM ET, Apr 27, 2007 - 30 minutes ago

[ozymandius]

3. Oil prices climb above $65 a barrel

VIENNA, Austria - Oil prices looked for direction Friday, as traders weighed concerns of tight U.S. gasoline supplies against increased crude stocks in America. Signs that tensions might be easing over
Iran's nuclear program also kept a relatively low ceiling on markets.

Light, sweet crude for June delivery rose 40 cents to $65.46 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract fell 78 cents to settle at $65.06 a barrel Thursday.

Brent crude for June slipped 7 cents to $67.64 a barrel on the ICE Futures exchange in London.

-cut-

Wednesday's U.S. Energy Department report showed a large, unexpected drop in U.S. gasoline stockpiles of 2.8 million barrels last week — when analysts had expected a gain of 200,000 barrels. The report also said U.S. refinery use in the same period declined 2.6 percentage points to 87.8 percent of capacity.

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

[ozymandius]

5. Exxon Mobil 1Q profit up 10 percent

NEW YORK - Oil giant Exxon Mobil Corp. kicked off 2007 with a 10 percent rise in profits, its best-ever first quarter, as higher margins on refining and chemical operations offset lower prices for crude oil and natural gas.

Exxon Mobil, the world's largest publicly traded oil company, said Thursday it earned $9.3 billion in the January-March period, beating Wall Street expectations, even as revenue slipped and fell well short of analysts' forecasts.

The Irving, Texas-based company was the third major oil company to report earnings in as many days. BP PLC, Europe's second-largest oil company, on Tuesday reported a 17 percent drop in first-quarter earnings on lower oil prices and declining production. On Wednesday, ConocoPhillips said its first-quarter profit rose 7.7 percent as a result of asset sales that offset lower year-over-year commodity prices.

Also Thursday, Valero Energy Corp., the nation's largest independent oil refiner, said its first-quarter profit jumped 35 percent on the back of stronger gasoline and distillate margins.

http://news.yahoo.com/s/ap/20070427/ap_on_bi_ge/earns_oil_12

[Roland99]

17. Gas in Middle America hits $3/gal. $2.999 in Louisville, KY

[Ghost Dog]

21. Statoil in $2bn oil sands deal

http://www.ft.com/cms/s/d74905cc-f495-11db-b748-000b5df10621.html

Statoil, Norway’s largest oil and gas company, on Friday made a US$2bn cash offer to acquire North American Oil Sands Corporation, its third significant acquisition in the Americas in less than a year.

The state-controlled oil giant has received approvals from shareholders representing 69 per cent of the Calgary-based company, which operates 257,000 acres of oil sands containing so-called extra heavy oil (EHO).

The deal highlights Statoil’s long-term aim of diversifying its operations geographically to avoid being too reliant on oil and gas deposits in Norway, which will decline over time.

It also comes as the company has been forced out of the heavy oil joint ventures it operates in Venezuela with Exxon Mobil, Chevron, BP, and Total by the Venezuelan government. Hugo Chavez, Venezuelan president, announced in January that state-oil company Petroleos de Venezuela would seize a majority stake in heavy-oil joint ventures by May 1.

“This deal allows us to build large resources in a stable Organisation for Economic Development and Co-operation country,” Helge Lund, chief executive, told the Financial Times.

“We have made significant investments in North America and the stability of the political regimes is part of the investment criteria,” he added.

/...

[54anickel]

62. Where you'll see $4 gasoline

http://biz.yahoo.com/cnnm/070426/042607_gas_prices.html?.v=3&.pf=loans

Gasoline prices, already above $3 a gallon in some states, could charge higher this summer and hit $4 a gallon in some locations, according to one industry expert.
Pump prices were supposed to peak below $3 a gallon this May, then drop off before the summer driving season got into full swing, according to the Energy Department's price forecast.

Well, we're not even out of April yet, and the nationwide average price for a gallon of unleaded regular has hit $2.87.

One big factor driving prices: gasoline inventories continue to fall. After a promising one-week boost in refining activity, the latest report Wednesday actually shows refining activity falling. And demand is already soaring, before the summer driving season is in full swing.

What this means for prices is obvious, and to most drivers it is not good news.

"More and more communities are going to see gasoline that approaches or exceeds $4 a gallon," said John Kilduff, an energy analyst at Man Financial in New York. "Where we're currently at with prices, that's a given."

While geopolitical tensions have driven up the cost of crude oil, which accounts for about half the cost of a gallon of gas, refinery problems here in the United States are also to blame for the price jump.

snip>

In 1980, the average American had to work 105 minutes to buy enough gas to drive the average car 100 miles, David Wyss, chief economist at Standard & Poor's, said in a study last year. By 2006, the average American needed to work only 52 minutes, thanks in part to better fuel efficiency but mostly due to higher wages.

Up, up and ...

Retail gas prices have been climbing steadily as one refinery outage after another crimped production and U.S. drivers consumed ever more in spite of rising prices.

more...

[Ghost Dog]

4. Asian Stocks Decline, Led by Mitsubishi UFJ; BHP, Cipla Drop

http://www.bloomberg.com/apps/news?pid=20601080&sid=abD2FzWyzMYM&refer=asia

April 27 (Bloomberg) -- Asian stocks fell, set for the first weekly drop this month, after Japanese government reports showed industrial output unexpectedly fell and electrical parts inventories rose in the region's biggest economy.

...

``The economic numbers came in a little below expectations and the bottom line is that the Bank of Japan has absolutely no reason to raise rates,'' said Hans Goetti, Singapore-based managing director at Citigroup Private Bank, which oversees $1.5 billion in Asia. ``We still have an underweight on banks.''

BHP Billiton Ltd., the world's biggest mining company, posted its steepest slide in a month after copper prices slumped. Cipla Ltd., India's second-largest drugmaker, plunged by the most in 13 years after its earnings missed estimates. China Citic Bank Corp. almost doubled on its debut in Shanghai.

Nine of the 10 industry groups included in the Morgan Stanley Capital International Asia-Pacific Index declined, dragging the benchmark down 0.5 percent to 146.46 as of 5:13 p.m. in Tokyo. The measure has lost 0.7 percent this week. Japan's Nikkei 225 Stock Average fell 0.2 percent to 17,400.41.

Bank of China Ltd. paced declines in China, where the CSI 300 Index slipped from a high, and Hong Kong after the Financial Times reported the state pension fund is cutting its holdings of equities. Key indexes in Indonesia and South Korea also dropped from records.

...

Copper for July delivery dropped 2.7 percent on the Comex division of the New York Mercantile Exchange, its biggest percentage decline since Feb. 2. Zinc, lead and aluminum also declined.

...

Elsewhere, China Citic, which raised $5.4 billion in the world's biggest initial share offering this year, jumped 96 percent to 11.37 yuan on its first day of trading in Shanghai. Its Hong Kong-traded stock jumped 14 percent to HK$6.68.

...

`Defying Gravity'

China's CSI 300 slid 0.7 percent, ending a five-day, 11 percent jump. Gao Xiqing, vice chairman of the National Council for Social Security Fund, said at a conference in Beijing that China's stock prices are ``defying gravity,'' the newspaper said.

/...

[Ghost Dog]

8. BOJ Slashes Inflation Forecast, Keeps Rates at 0.5%

http://www.bloomberg.com/apps/news?pid=20601080&sid=al36VYwsQal8&refer=asia

April 27 (Bloomberg) -- The Bank of Japan slashed its inflation forecast close to zero and kept the benchmark interest rate unchanged, saying prices will take another year to accelerate.

Core consumer prices will rise 0.1 percent in the 12 months ending March 2008 and 0.5 percent the following year, the central bank said in Tokyo today in its semi-annual outlook. Policy makers had previously predicted a 0.5 percent inflation rate this year.

Stalling consumer prices will make it harder for the Bank of Japan to raise its 0.5 percent overnight lending rate to prevent excessive business investment. The cheapest official borrowing cost among major economies has driven the yen to a record low against the euro and high-yielding currencies.

``Consumer price data damped any speculation the Bank of Japan will bring forward an interest-rate increase,'' said Koji Fukaya, senior currency strategist in Tokyo at Deutsche Securities, adding that rates will be on hold until August. ``That's a bad development for the yen.''

Core consumer prices, which exclude fresh food, declined 0.3 percent in March from a year earlier, the government statistics bureau said today, the second straight monthly drop.

Other government reports today showed factory output unexpectedly slumped 0.6 percent, retail sales declined for a sixth month, this time by 0.7 percent, and household spending rose a less-than-expected 0.1 percent. The unemployment rate held at a nine-year low of 4 percent.

/...

[54anickel]

60. The carry-trade must go on!!!!!

And to think they were calling for an end last year....this is from March '06

http://www.moneyweek.com/file/9351/what-is-the-carry-trade.html

The end of of the “yen-carry trade” could be devastating for capital markets throughout the world. Experts estimate that there are several hundred billion dollars of positions in the carry trade to be unwound. David Bloom, currency analyst at HSBC, says that it has pervaded “every single instrument imaginable”, so that when it comes to an end later this year it’s going to be “ugly”.

snip>

Something similar has happened before. Eight years ago, panic in the global financial markets sent the yen surging 20% in less than two months and other markets collapsed, particularly emerging markets, as investors rushed to repay their yen. Then, as Japan’s economy worsened, the trade became popular once again.

This time, an announcement by the Japanese central bank governor that Japan’s growth rate was an annualised 5.5% in the fourth quarter of 2005 indicates that the country is finally coming to the end of seven years of deflation. Hence the central bank will act “immediately’’ to tighten its monetary policy, preparing the way for rate rises “above zero” in coming months.

So, seven years of cheap credit for speculators and investors is coming to an end. And as Jonathan Allum, strategist at broker KBC, says, the fallout is “potentially endless”. It could lead to the serial collapse of speculative bubbles all over the world, including high-yielding and second-tier currencies, trophy real estate, high-yielding bonds, art and possibly even gold. Are there any beneficiaries in this scenario? While there is undoubtedly some speculative money in them, Allum believes that the fundamental, economic case for commodities remains “intact”.

more...


And from Forbes just last month....

Carry Trade Will Carry On
http://www.forbes.com/markets/2007/03/02/rising-yen-scare-markets-equity-cx_er_0302markets09.html

snip>

What seems to be happening is that investors are selling some foreign assets to raise money to repay their yen loans. One place where this showed up was the gold market, where the precious metal fell 5% over the week to $648 per troy ounce. Similarly, the South African rand, which reflects in part the value of gold and other metals produced by that country, fell 8.5% against the yen this week. The rand ended the week at 15.77 yen, down from 17.11.

Japanese officials assured investors Friday that the carry trade is alive and well. “The carry trade will continue for some time, and this weak-yen tendency is not going to be reversed quickly,” Eisuke Sakakibara, a former Japanese former vice finance minister for international affairs, told reporters in Japan.

Analysts agreed that the yen carry trade was not about to disappear. Once the tempest subsides, still-low yen interest rates will prove alluring to speculators.

“Even though the bank has raised interest rates, there is still a huge spread between Japan and other countries,” said Kathleen Stephansen, the head of global economics at Credit Suisse. “There is still room to invest.”

However, some analysts cautioned that the situation will get worse before it gets better. Many of the factors that led up to China's correction and the yen's rise are still in place. "We're not completely out of the water," said Kathy Lien, chief strategist for DailyFx.com. She predicted China's slide will continue for a few more weeks because troubling factors linger in China, the United States and Japan.

The Chinese government is concerned that investors are not taking into account the risks of equity investments and wants to cool the market off. In America, rates on $600 billion worth of adjustable-rate mortages are due to rise, raising the risk of defaults and delinquencies. And in Japan, with the fiscal year-end of March 31 approaching, companies with operations overseas are repatriating profits, putting upward pressure on the yen.

more...

[Ghost Dog]

66. Hot Damn. And we thought nobody would notice.

(Except Nobody himself, of course).

But, not much gets past the eagle eye around here. Hey! :nuke:

[Ghost Dog]

11. South Korean March Production Unexpectedly Falls 0.4%

http://www.bloomberg.com/apps/news?pid=20601080&sid=aIcjjMUcf0To&refer=asia

April 27 (Bloomberg) -- South Korea's industrial output unexpectedly slid in March as production of mobile phones, computers and cars dropped.

Manufacturing production fell 0.4 percent from February, when it climbed 0.3 percent, the National Statistical Office said today in Gwacheon, South Korea. That compares with the median estimate of a 0.9 percent gain in a Bloomberg News survey of eight economists. Output rose 3.1 percent from a year ago.

The output decline suggests companies could be concerned a slowing U.S. economy may curb demand for goods including Hyundai Motor Co.'s cars and LG Electronics Inc.'s home appliances in South Korea's second-largest export market. Japan's industrial production also fell in March, figures today showed, adding to concern Asian nations will suffer from a U.S. slump.

``The drop in production isn't big but there are some cautionary signs for exports, consumption and investment,'' said Lim Jiwon, an economist at JPMorgan Chase & Co. in Seoul. ``The high-tech sector is seeing some correction.''

The Kospi index fell 0.7 percent to 1542.52 at 3 p.m. close in Seoul. The won was little changed at 929.15 versus the dollar. The yield on the three-year government bonds rose 1 basis point at 5.03 percent. A basis point is 0.01 percentage point.

/...

[Ghost Dog]

12. Top China investor in alert on market

http://www.ft.com/cms/s/ad0963a0-f41e-11db-88aa-000b5df10621.html

By Sundeep Tucker in Beijing and Geoff Dyer in Shanghai
Published: April 26 2007 18:59 | Last updated: April 26 2007 18:59

One of China’s most influential investors on Thursday said the Chinese stock market was “defying gravity”, highlighting growing concerns that the rapid rise in mainland share prices is unsustainable.

Gao Xiqing, vice-chairman of the National Council for Social Security Fund, also said that the fund was selling stocks to trim its exposure to the rapidly rising market.

The benchmark Shanghai index has risen 41 per cent this year, having jumped 130 per cent in 2006.

“This market seems to be defying gravity. It’s got to come down at some point. We can’t risk that, especially given the nature of our fund,” Mr Gao told a JPMorgan conference in Beijing.

“The market is making me nervous.”

/...

[Ghost Dog]

22. China Citic Bank shares soar on debut

http://www.ft.com/cms/s/5ce2467c-f477-11db-88aa-000b5df10621.html

Shares in China Citic Bank nearly doubled in their first day of trading in Shanghai on Friday and also rose strongly in Hong Kong after the biggest initial public offering of the year do far.

Citic Bank raised US$5.4bn from the flotation, which was only the second the be conducted simultaneously on the Hong Kong and Shanghai exchanges, following the US$21.9bn listing by Industrial and Commercial Bank of China last year, the largest IPO ever.

Despite concerns about the high valuations for Chinese stocks, especially in the financial sector, shares in China’s seventh-largest bank surged 96 per cent in Shanghai, rising from an IPO price of Rmb5.80 to Rmb11.37, making it the latest in a series of mainland flotations to increase dramatically on the first day of trading. In Hong Kong the shares rose from HK$5.86 to HK$6.68, an increase of 14 per cent.

Chen Xiaoxian, president of Citic Bank, said that the debut in Shanghai had been stronger than expected, although some analysts put this down to the relatively small size of the mainland tranche, which was less than half the size of the Hong Kong allotment.

Mainland shares are trading at considerable premiums to those of Chinese companies listed in Hong Kong at the moment, boosted by the flood of new money coming into the market from retail investors and the relative scarcity of high-quality companies on the Shanghai and Shenzhen exchanges.

However, mainland shares have risen so sharply in recent months that many investors and analysts have started to predict an imminent correction. On Thursday, the vice chairman of the country’s social security fund and one of the most influential investors in China warned that the market was “defying gravity”.

/...

[Ghost Dog]

16. India set for private sector boost

http://www.ft.com/cms/s/72d5b6e2-f415-11db-88aa-000b5df10621.html

Indian companies have plans to invest $500bn over the next three years in infrastructure and manufacturing projects, according to one of the country’s foremost bankers.

K.V. Kamath, chief executive of ICICI Bank, the country’s biggest private sector lender, said the average profitability of the country’s corporates had been more than 25 per cent for several years, creating the conditions for a massive increase in capital spending.

“If you look at the pipeline of investment, this exceeds the investment done in the country today, in the history of the country,” Mr Kamath said.

“It’s like we are doubling investments or doubling the number of projects’ productive capacity in the span of three years compared with what we had.”

The splurge in investment cannot come too soon for India’s economy, which is struggling with bottlenecks in infrastructure that are driving up inflation.

The economy has been growing at more than 8 per cent, with a strengthening of the rupee on Wednesday pushing India’s gross domestic product over the $1,000bn (€736bn, £502bn) mark for the first time.

/...

[ozymandius]

6. Stocks point to lower start ahead of GDP

NEW YORK - Wall Street was poised to open lower Thursday ahead of the government's estimate of first-quarter gross domestic product and more earnings reports.

Economists are anticipating that the Commerce Department will report that GDP growth was about 2.0 percent in the first quarter, down from 2.5 percent in the fourth quarter last year. Wall Street is hoping for slow, steady growth — a climate in which the Federal Reserve is unlikely to hike interest rates, a move that would limit inflation but also curb spending.

Investors were cautious about driving the Dow Jones industrials higher Friday, after pushing it up about 800 points over the past 20 trading sessions. However, the blue-chip index did not look likely to drop back below the 13,000 mark, first breached Wednesday, especially after strong earnings late Thursday from Microsoft Corp., one of the 30 Dow components. The software maker reported a 65 percent surge in profit, thanks to strong sales of Windows Vista and Office 2007.

On Friday, major companies reporting first-quarter earnings include Chevron Corp., Alltel Corp., Burger King Holdings Inc. and Goodyear Tire & Rubber Co.

http://news.yahoo.com/s/ap/20070427/ap_on_bi_st_ma_re/wall_street

[Ghost Dog]

7. European equities slide on oil stocks

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B5fd8b2dc%2D1f75%2D4ed8%2Dba34%2D37f32068d751%7D

European equities were lower on Friday, dragged down by falling oil stocks, however bid activity and strong earnings helped keep a lid on the losses. By late morning in London, the FTSE Eurofirst 300 was down 0.4 per cent at 1,571.14, Frankfurt’s Xetra Dax slipped 0.1 per cent to 7,380.67, the CAC 40 in Paris shed 0.1 per cent to 5,941.14 and London’s FTSE 100 lost 0.5 per cent to 6,440.1. Oil stocks contributed to the decline after crude prices eased overnight. Norway’s Statoil fell 1.3 per cent to NKr168.50, Spain’s Repsol shed 1.5 per cent to €24.64 and Finnish refiner Neste Oil lost 2.4 per cent to €26.45. At the top of the leaderboard was Norwegian solar panel group Renewable Energy, which rose 5.1 per cent to NKr163 after reporting forecast-beating first-quarter results thanks to higher pricing and improved productivity. The company also presented upbeat guidance on 2007 trading.

/...

[Ghost Dog]

67. BTW: European equities slide on oil stocks; US GDP

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B3451ec5c%2D38e9%2D4de2%2Db02b%2Df5fc1aa5a20d%7D

European equities were lower on Friday, dragged down by falling oil stocks and losses in the US markets after the dollar fell to a record low of $1.3682 against the euro following weaker-than-expected US GDP growth in the first quarter. By the close of trade in London, the FTSE Eurofirst 300 was down 0.6 per cent at 1,567.72, Frankfurt’s Xetra Dax slipped 0.1 per cent to 7,378.12, the CAC 40 in Paris shed 0.2 per cent to 5,930.77 and London’s FTSE 100 lost 0.8 per cent to 6,418.7.

[Ghost Dog]

68. FTSE extends losses after US data

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7Ba160c1da%2D6035%2D478a%2D95d7%2Dca3565ff4220%7D

London equities closed lower on Friday after Royal Bank of Scotland confirmed it would make a counterbid for Dutch bank ABN Amro while markets were also hit by US data. Wall Street stocks fell and the dollar fell to an all time low against the euro as weak gross domestic product data aggravated investors’ concerns about the health of the US economy. Gross domestic product rose at a seasonally adjusted annual rate of 1.3 per cent during the first quarter, well below a forecast rise of 1.8 per cent. Back in London, Royal Bank of Scotland fell 1.5 per cent to 1940p after it announced that it was considering making a €72bn break-up bid for ABN Amro. The Dutch bank is recommending a €66bn bid from Barclays which would keep ABN intact, but includes the sale of LaSalle, the US bank. This a move has been opposed by the RBS-led consortium who would seek to break-up the Dutch bank. Barclays shares rose 1 per cent to 725.5p on continued betting that it could become a target itself if the bid for ABN failed. The FTSE 100 lost 50.7 points or 0.8 per cent to 6,418.7, with much of the decline accounted for by the mining sector. The FTSE 250 fell by 37.4 points, or 0.3 per cent, to 11,903.5. with weakness in mid-cap telecom and engineering stocks.

[UpInArms]

9. dollar watch

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

Last trade 81.523 Change -0.234 (-0.29%)

Will The Dollar Finally Turn On US GDP?

http://www.dailyfx.com/story/dailyfx_reports/cross_markets_data_reaction/Will_The_Dollar_Finally_Turn_1177633270161.html

GDP Annualized (YoY) (1Q A) (12:30GMT)
Expected: 1.8%
Previous: 2.5%

Personal Consumption (YoY) (1Q A) (12:30GMT)
Expected: 3.5%
Previous: 4.2%

How Will The Markets React?

Not long ago, Forex traders were disappointed when UK released a first quarter gross domestic product number that was largely in line with expectations. Though the lofty rate of growth in the United Kingdom was good on a fundamental basis, traders were more interested in the rush of an unexpected print to fuel short-term breakouts. The same sentiment is likely surrounding the US GDP report due Friday morning. For confirmation that something unusual is brewing in the markets we need only to look back at this past week’s economic calendar and the lack of a reaction from the dollar. Tuesday’s data flow brought the biggest drop in existing home sales in 18 years while Wednesday’s docket printed a better than expected durable goods report. Despite these numbers though, the dollar hardly broke its steady pace. To ignore top tier indicators so blatantly like that, there clearly has to be something looming over the market. Looking ahead to tomorrow’s GDP report, economists have put in an official consensus of a 1.8 percent annual pace. This would be the slowest rate of growth in over four years and put a very large crimp in growth projections for the world’s largest economy. While the official forecast is already a depressed estimate, the trading masses may actually be holding out for an even lower number. Since so many indicators have crossed the wires with disappointing numbers over the past few weeks, there is a tangible air of pessimism. Therefore, should the GDP come in modestly below the official consensus, the greenback and treasuries may be somewhat insulated. At the same time, should it more or less hit its mark, the heavy handed bears may let up. While there are high expectations of a short-term reaction to the key indicator, it effects could easily carry through in the weeks ahead. In fact, the growth report could have considerable implications for next Friday’s NFPs if consumer spending failed to prop up growth in the first quarter.

...more...

US Dollar: Jobless Claims Signal Potential for Weak Non-Farm Payrolls (Due Next Week)

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar__Jobless_Claims_Signal_1177624431488.html

US Dollar- In the foreign exchange market, there are times when politics can trump economics. Even though we did not have any breaking developments, the lack of meaningful US economic data turned the market’s focus today to the potential for political change. Foreign investors were never happy with the US’ presence in Iraq or with Iran’s progress on nuclear development. Although neither has been resolved by today’s news, the Senate’s approval of legislation that outlined a timetable for withdrawal and reports that Iran may be reaching agreeable points with the EU have given foreign exchange traders a reason to rally the US dollar. The only economic data released today were jobless claims and the help wanted index. Both are minor reports but in the context of next week’s non-farm payrolls release, we cannot help but pay attention to them. The help wanted index slipped from 31 to 30 in the month of March while jobless claims dropped from 341k to 321k, leaving the 4 week moving average at 332k. This represents a significant jump from the 317k average that we saw last month as well as a return to February levels. Taking that information into context, we can estimate that non-farm payrolls will be much closer to the 113k reading that we saw in February than the 180k print in March. The current consensus estimate for April payrolls is 100k. However as long as we have triple digit job growth, the Federal Reserve is probably happy to continue sitting on their hands. What does this mean for the US dollar? That even if the dollar manages to recover more losses the EUR/USD could still have a shot at 1.40. Don’t forget that the European Central Bank and the Bank of England are still on track to raise interest rates next month. We have two weeks before the rate decision and there are a lot of data between now and then. In the meantime, our primary focus is tomorrow’s first quarter GDP report. Growth is expected to have slowed from 2.5 percent to 1.8 percent. We actually think the data could be a bit better since consumer spending, which accounts for 70 percent of GDP only worsened slightly in the first quarter. Retail sales in the first three months of the year averaged 0.6 percent, compared to average sales of 0.7 percent in the last three months of 2006.

...more...

[burf]

14. But weren't we told

yesterday the dollar was making a comeback?

[UpInArms]

19. you must be part of that "reality based" society

that was yesterday's truth. We are now looking for today's truth.

:hi:

[burf]

29. Must be that

Colbert quote as to the facts having a liberal bias!

BTW, Good Morning everyone. I am playing hit and miss with SMW here lately with work and the fencing project. (And yes, my ass is dragging). Have a great day everybody.

[AnneD]

49. Hey burf...

fencing is never 'done'. I don't miss that part. My Bro welds iron fences. Costs a bit but a real labour saver.

[Ghost Dog]

15. Yen slips to record low against euro

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7Bb045710e%2D9b64%2D4922%2Db940%2Dbec5538ab363%7D

The yen fell to a record low against the euro on Friday after Japanese economic data disappointed. March consumer price inflation came in weaker than expected while consumer spending also fell back from the previous month. The yen dropped to a low of Y162.84 against the euro and Y119.74 against the dollar. However, the Japanese currency regained some poise after the Bank of Japan, which as expected left interest rates unchanged at 0.5 per cent after its monthly meeting, said the economy was still on track to deliver expansion and normalisation in prices. Ian Gunner, currencies strategist at Mellon Financial, said the BoJ was putting a brave face on it, but ultimately this was not a suitable backdrop for the building of rate hike expectations and in such an environment the yen would remain extremely vulnerable. “More broad based yen weakness looks likely over the coming week or so,” he said. Nevertheless, the yen came back to stand flat at Y119.50 against the dollar and down just 0.1 per cent at Y162.60 against the euro.Meanwhile, the dollar edged 0.1 lower against the euro to $1.3610 and eased 0.2 per cent to $1.9940 against the pound as traders awaited US GDP data, due at 12.30GMT, for clues as to the future path of US interest rates. On Wednesday, the dollar dropped to $1.3665 against the euro, just shy of the record low of $1.3670 it hit in December 2004.

[54anickel]

36. Broken Greenbacks and Foreign Aches

http://www.prudentbear.com/articles/show/2002

snip>

American equity indexes have soared. Europe’s indexes have done better in percentage terms, and much better if adjusted for currency performance. Emerging market bonds have done well and swoons have proved buying opportunities of late. Here too, non-US indexes are out performers and would be more dramatically so with true floating currencies. China’s voracious demand places a rising floor under the many commodities it imports, not least metals and oil. This can be seen in China’s trade deficit with many primary exporters. We are still the consumption end of the line for too much of what emerging market raw materials and industrial exporters offer. They must lend to sell, and they have. Their cost to lending is measured in sub-par absolute returns, and their assumption of increasingly painful US dollar currency risk. Thus, the cost of subsidizing America is rising. This is occurring as the American economy slows.

One must begin to fear that the rest of the world will realize what leading American firms already have; future growth and opportunity is offshore. Adjustment risks are growing. This occurs not because we are more integrated, but because of how we have been integrating and specializing. Protectionism is not the answer and would result in real pain, real fast. System risk arises from specialization between borrowers/lenders, makers/buyers. This is not the efficiency enhancing specialization that Adam Smith and David Ricardo espoused! The 2007 IMF Global Financial Stability Report details the world’s 2006 exporters and importers of capital. Four leading exporters (China, Japan, Germany and Singapore) export 37% of the globe’s capital. Six leading oil exporters (Russia, Saudi Arabia, Kuwait, UAE, Algeria and Venezuela) exported 29.3% of the world’s capital in 2006. The US accounted for 64% of the capital imported in 2006! The US was 4.7% of world population and 20% of world GDP in 2006. America’s $856.7billion 2006 deficit in balance of payments on current account represented 152% of the total shortfall of the world’s “advanced” economies. Our $765.3 billion negative balance on goods and service trade lies at the heart of the present global specialization problem. This system of integration and specialization is dangerous and long-term inefficient.

Attention has shifted away from the structural problems as market performance has been strong and corporate earnings robust. Record breaking corporate profits, strong consumer spending and asset appreciation have produced GDP growth and a sense of things on track. These developments are largely fueled by the global structural imbalance and speak to US macroeconomic dependence on our specialized place in the global economy. This is long term unhealthy. Corporate earnings, decelerating, are strong on lower than average wage and tax bills. This has not produced the usual problems as consumers and government agencies are happy to borrow and spend. The world lends. Falling dollars and growing opportunities to manufacture, design, sell and invest offshore are helping many firms. Falling dollars increase the value of foreign earnings. Private Equity binge buying and massive stock repurchasing is reducing the supply of equities. This lifts indexes. Of course much of these shares will be sold back to the public and buybacks float with decelerating earnings. Foreign buying and easy low cost leverage also assist in the process. This, and the lowered cost of US assets in foreign currency terms, attracts buyers to our equity markets.

Taken together, all this suggests that our proofs of economic strength are largely pleasant symptoms of an unsustainable global economic position. This has been true for some time and does not have to unwind soon or violently.

The relatively smooth recent period could have been used to improve our structural economic health. Instead we have been euphoric about the most beneficial symptoms of our ailing global economic position. So far broken greenbacks and policies have mostly caused foreign aches and pains.

more...

[54anickel]

37. Gold rises, as dollar falls to a record low vs. euro

http://www.marketwatch.com/news/story/gold-edges-up-dollar-touches/story.aspx?guid=%7BF0877E71%2DE7DC%2D409F%2D9919%2DFB4122536C65%7D&siteid=yhoof

NEW YORK (MarketWatch) -- Gold futures rose Friday, boosted by the euro's record high against the dollar after data showed that the U.S. economy slowed to 1.3% real annualized growth in the first quarter, the weakest expansion in four years.

snip>

Hit by rising energy prices and a weak housing market, the U.S. economy slowed to 1.3% real annualized growth in the first quarter, below the 1.7% expected economists polled by MarketWatch. See full story.

Following the news, the dollar fell to a record low against the euro, which traded above $1.3680. The previous record for the euro was $1.3666, reached in December 2004. See Currencies.

"Today's GDP reading will be the likely key to short-term direction," said James Moore, metals analyst at TheBullionDesk.com. Indications of slowing growth will pressure the dollar and trigger a rebound in gold, he said.

On Thursday, gold futures closed down $9.40, or 1.4%, at $678 an ounce, their weakest closing level since April 9.

"Despite the corrections yesterday, gold is still looking poor on the charts and may have to weather further weakness before stabilizing, particularly as further institutional sales are expected," Moore said.

more....

[Ghost Dog]

43. Euro soars to record against dollar

http://www.afp.com/english/news/stories/070427132425.8li94cue.html
27/04/2007 13h27

LONDON (AFP) - The European single currency jumped to a historic high of 1.3682 dollars in afternoon trade here on Friday after new data revealed a marked slowdown in US economic growth.

The record -- which beat the previous pinnacle of 1.3666 dollars that was set on December 30, 2004 -- was caused by expectations of higher interest rates in the eurozone as the European economy outpaces the United States, analysts said.

The United States economy expanded at a worse-than-expected 1.3 percent rate in the first quarter, marking the slowest period of growth in four years, the US government announced Friday.

Growth in the world's biggest economy weakened notably, amid a widespread housing slump, following expansion of 2.5 percent in the prior quarter.

The first snapshot of 2007 growth disappointed most Wall Street analysts who had anticipated growth of at least 1.8 percent.

"Overall, this is clearly a disappointing data which will most likely trigger fresh weakness in the dollar," said Audrey Childe-Freeman, currency analyst at the Canadian Imperial Bank of Commerce in London.

The European single currency also struck a new record peak against its Japanese counterpart, hitting 162.88 yen following the US data.

Both high points were based on expectations that strong European growth would lead to further interest rate rises for the 13-nation eurozone.

"With global growth signals continuing to signal strong momentum building in Europe and Asia while the US lags, the dollar continues to struggle," said ABN Amro currency analyst Peter Frank.

/...

[54anickel]

53. Hmmm, some haunting words from the past....

http://findarticles.com/p/articles/mi_m0JQP/is_374/ai_n8579639

The world trading system is corrupt and unjust. And free trade is compounding the problem. It's time to change the rules, argues Wayne Ellwood
New Internationalist, Dec, 2004 by Wayne Ellwood

snip>

It's an attractive theory but one which has lost all credibility: As ex-World Bank economist Herman Daly argues, the world has changed completely in 200 years. The notion of patient, rooted capital has vanished in an age of 'hot money' where speculators shift billions of dollars daily seeking instant profits. Says Daly: 'Academic economists have become so enamoured of the logical argument for comparative advantage and find it so ideologically in tune with their unrelenting celebration of the free market that they are loathe to re-examine it. They have suppressed the fact that the empirical cornerstone of the whole classical free-trade argument, capital immobility, has crumbled into loose gravel.' (1)

Talk of 'level playing fields' and 'pure competition' obscures the evidence that poor countries are severely disadvantaged to begin with. Centuries of colonialism put in place a system of extreme dependency on a narrow range of commodity exports which remains to this day. According to the UN Conference on Trade and Development (UNCTAD), just three commodities account for 75 per cent of total exports in each of the 48 poorest nations. This might be tolerable if nations like Honduras, Kenya and Zambia earned a decent income from their sugar, tea and copper. Sadly, the opposite is true. Due to plunging 'terms of trade' commodity-dependent nations need to export more and more every year just to stay in the same place. In the short span of 1997 to 2001 the combined price index of all commodities fell by 53 per cent--raw exports lost half their purchasing power in terms of manufactured goods. It's what the late Jamaican Prime Minister Michael Manley referred to as 'running up the downward escalator'--exhausting, and you never seem to get anywhere.

Trade liberalization just makes matters worse. Farmers are encouraged to grow more for export, which leads to over-production and lower prices, to which farmers respond rationally by again increasing their production. Added to this desperate cycle is the black hole of debt: countries in hock have been forced by World Bank and IMF structural adjustment edicts to ratchet up primary exports to service their debts. There's even a new term circulating among critical economists to describe the phenomenon: 'immiserating trade'. (2) The more you trade, the poorer you get.

Rich nations preach free trade while hypocritically rigging the rules in their favour. Poor countries looking to export their rice or textiles frequently find the door barred--on average they face tariffs four times the size of those faced by industrialized nations.

snip>

Countries like the US and Britain also spread the myth that free trade was the recipe for their own prosperity. It's a case of 'do what we say, not what we do'. They conveniently forget that their economic success was built by protecting domestic industry.

Wiping out Western trade barriers, and increasing 'market access' for Southern producers, would be an enormous step in the right direction. But it would not solve the problem of an unjust global trading system. Even if subsidies vanished tomorrow the dynamic of cut-throat competition plays into the hands of those with most power and greatest access to resources. This is what researcher Gerald Greenfield calls the 'social violence of the market--the constantly escalating pressure on farmers and workers to produce more for less.' (4) This is especially true in agriculture where small players are crushed by the implacable logic of 'efficiency'. In Brazil, the amount of land devoted to large-scale soy production has jumped from 200,000 hectares to 12 million over the past 30 years. In the US and Canada, corporate agribusiness is expanding aggressively, eviscerating rural communities and poisoning the land with agrochemicals. In the United States, 500 small farmers go bankrupt every week.

Corporate control of the food sector is a huge barrier to reforming the rules of global trade. Just two companies, Philip Morris (Altria) and Nestle, control more than half the world market in roasted and instant coffee. Four companies, Cargill, Tyson, ConAgra and Farmland National, control 81 per cent of the global beef market. What sort of 'competition' is embodied in a free trade agreement that pits massive integrated corporations like Cargill and Nestle against a Mexican campesino with a few hectares of land, a mule and a sharp hoe?

A decade after the signing of NAFTA the answer is clear. The economies of Mexico, Canada and the US are more intertwined than ever. Yet corporate and government elites are pushing for 'deeper integration'.

more...



Then there's this one from back in 2000. Never heard of this before. At first glance it makes a lot of sense. :shrug:

http://findarticles.com/p/articles/mi_m0JQP/is_320/ai_30166575

Ousting the oligarchs: … a Global Central Bank was proposed … as a way of managing both capital flows and trade balances between countries …

How much of your proposal for a global central bank, what you call an International Clearing Bank (ICB), is rooted in Keynes's original vision from the 1940s?

The roots are there, definitely. If you study the Bretton Woods proposals you see that what got left out was the `clearing house' idea and that's what my proposal would reintroduce. An International Clearing Bank wouldn't print its own currency but Keynes's proposal didn't endorse that either. Instead it would issue an `international reserve asset', That would make it possible for countries to engage in trade and financial transactions in their own currencies. At the moment the US dollar is effectively used as the international reserve currency,

Why Is that such a serious problem?

The dollar has become the main currency of the global economy. And that is fraught with danger. As the central trade currency the dollar helps reinforce a model of neocolonialism that's already in place. Take debt for example. Nations create wealth internally but they have to service their external debts in another currency. That means relying on exports to bring in the foreign exchange necessary to service this debt. Which is why debt is such a burden in the global economy. An ICB would allow each country to pay for cross-border transactions in its own currency and so bar speculators from raiding the world's currency reserves. People could then create wealth in their own currencies within their national economy and be able to have equality of interaction with the rest of the world.

What Is it that makes this Idea so appealing right now?

Export-led growth has come to dominate the global economy. Heavily indebted countries that can't make payments in their own currencies -- and that is the overwhelming majority -- have no choice but to focus on exports. Even if they're successful and build their foreign-exchange reserves they often exhaust them defending their currency against speculators.


Not everyone likes this idea, especially the US financial sector whose institutions are the main beneficiaries of the current global system. The whole point is to put the global payments system back in the hands of public institutions, to cut out the international banks and powerful speculators who've been in charge of foreign-currency markets. It's a lucrative game and fortunes have been made. But money games don't do much to promote trade or facilitate long-term investments. Foreign-exchange investment is axiomatically short term. That instability is part of the current system which is so wrong and so devastating for so many countries. A stable regime of currency relations is the key to reversing the downward spiral of lower wages and the export of goods and capital on ruinous terms.

You've also mentioned the ICB acting as a `lender of last resort'. How would that differ from the current role of the IMF?

The problem with the IMF is that it finances bailouts with taxpayer funds. The ICB could fight balance-of-payments problems in several ways. One would be to enforce Keynes's very strong belief that countries with surplus reserves also have a responsibility to revalue their currency. It's not just a question of the weak to the wall. Let's assume that ICB members agreed that a month should pass before reviewing trade imbalances. That's fine. At the end of the month, if my reserves are five-per-cent less than yours and yours are five-per-cent higher than they were before, then we need to revalue and change the currencies. This one month, given that the values of currencies now are shifting on a second-by-second basis, gives the export sectors of all countries a breathing space. They don't have to have such large derivatives contracts and futures contracts on currencies,

more...

[54anickel]

69. Dollar Myths

http://www.kitcocasey.com/displayArticle.php?id=1350

Myth I: The dollar is safe because the U.S. has ample assets

Some say the current account deficit that requires foreigners to arrange for over $3 billion of capital inflows every business day just to keep the dollar from falling does not matter. These pundits say a deficit of 6.5% of Gross Domestic Product (GDP) is sustainable because the deficit is only about 1% of all private assets held in the U.S.; as a result, deficits could be carried a long, long time.

This argument is one about the dollar going to zero, an extreme case of the dollar losing relative to other currencies. However, the current account deficit and its affect on the dollar is about cash flow: by putting it in the context of a GDP is reasonable, as GDP is a cash flow measure of production. Comparing it to private savings is mixing apples with oranges.

Myth II: The dollar is doomed because of our large budget deficit

Just as dollar optimists are wrong to say the dollar is safe because of our tremendous wealth, dollar pessimists are mistaken to put too much emphasis on the budget deficit. By issuing debt, the direct impact of the budget deficit can be mitigated to the burden of interest payments. Of course, as interest payments become excessively large, they will weigh on the dollar eventually. However, the linkage to the dollar is indirect. While it is correct that large budget deficits structurally weaken the U.S. in the long run, it is not appropriate to link short-term dollar movements to the budget deficit.

Myth III: A lower dollar will cure the trade deficit

All too often we hear how much more competitive we would be if we only allowed the dollar to fall. While a weaker dollar may be a short-term boost to earnings and make exports a tad more competitive, it will not bring back industries that have been outsourced. It is most unlikely that the U.S. will thrive on exporting sneakers to China, no matter how low the dollar will fall.

What a weaker dollar may do is provide temporary relief. But unless the U.S. turns into a society of savers and investors, a weaker dollar will only be a pause to an even weaker dollar as imbalances are built up yet again.

Myth IV: A lower trade deficit will save the dollar

Odds are that the current account deficit may be close to its peak. However, that does not mean the dollar is out of the woods: if an abatement in the rate at which the current account deficit deepens were due to a sustained improvement in savings and investments, it may have long term positive implications for the dollar. But it looks like the driver behind any ‘improvement’ (if one can talk of such as the deficit continues to widen) will be due to a drop in domestic consumption due to a slowing economy. Rather than being good news for the dollar, this discourages foreign investors to invest in the U.S. American CEOs focus their investments abroad, so why should foreigners invest in the U.S.?

As the economy slows and consumers can no longer extract equity from their homes, the savings rate ought to go up. Famous for having dipped into negative territory, consumers have to pare back their spending as access to easy money dries up.

more...

[54anickel]

70. Death of Bretton Woods II (Willie) Seems myths are the topic for the day

http://www.321gold.com/editorials/willie/willie042707.html

snip>

(CURRENT) MACRO ECONOMY MYTH
The Bretton Woods II myth has been shattered, decimated, and laid to waste, without much reporting. The dominant myth from 2002 to 2006 promoted the belief that the global financial system operated as a macro economy which moves together, is supplied together, is coordinated by central bank decisions, and enjoys the free brisk flow of capital. What a crock! Its agenda and purpose is to sustain the USEconomy and US financial system desperate for imported capital, whereby the world's savings will be shipped for voracious US usage, all without much interest yield paid out. What colossal nonsense! The myth emerged from the ethos crucible without much substance. It has vanished into the ethos dustbin as quietly as its vacant value.

Last week, a past article (on the PetroDollar abused in a protection racket) was resurrected. This week another past article "Economic Mythology" (click here) from September 2004 is resurrected, highly relevant again. It painted a reasonable description of the current myth in force. The principle argument was that in order to sustain a fallacious economic system, whose foundation is but shifting sands whipped by the ebb & flow of monetary inflation, that system needs an utterly absurd sequence of myths to be widely accepted as ideology, promoted by a trusted harlot. The result is like a crowd of mindless zombies uttering mantras like people devoid of brains, but whose bodies move enough to cast their next order to purchase stocks or bonds. FOREX traders do not qualify as zombies, and therein lies a problem.

The bankrupt dogma of this Macro Economy Myth contains many ludicrous belief constructs, uttered widely, containing no substance or validity, each totally heretical, worth mentioning. We hear childlike nonsense like 'debt is good' for the explosive credit crack, like 'to spend is vital' for the anti-investment consumer crack, like 'low-cost solution' for the outsourced job betrayal, like 'house is home not investment' for the unproductive housing crack, like 'service sector is cleaner' for the manufacturing demise crack, like 'risk is offloaded' for the uncontrolled derivative crack, like 'military spending benefits the economy' for the destructive drain crack, like 'USGovt bonds offer true value' for the absent high volume highly liquid alternative, like 'foreigners are partners' for the credit supply hemorrhage crack, like 'Asian finished products fairly traded for US assets' for the fraudulent payment with bad debt paper masquerading as money, and like 'US is the global engine' for the gross global imbalances. My viewpoint is that the current system manifests a national liquidation of capital that is endemic to the USEconomy.

Someday we will be living downstream from a sewage treatment plant, and told the offensive odor is the 'scent of a new flower species' for more nonsense explained as a new fecal orchid. Worse still is the likelihood that we will hear 'Work Makes You Free' in the face of rampant unemployment. That phrase has vivid meaning only to perhaps 5% of the US population, maybe less. The next myth in your face will be 'a lower dollar is good for the US' which fails to consider how the entire cost structure within the USEconomy will rise in a manner to cripple both businesses and households.

SHATTERED MYTH PILLARS
The tougher questions are 'Why did anyone believe such empty concepts?' along with 'How stupid must the masses be?' and lastly 'How compromised must pundits be?' in my book. The tragedy lies in admission that the concepts were empty, but newer better concepts have replaced them, each from a new empty mythology. Here are some of the major points made over 30 months ago, each more clearly discarded to the dustbin as having no value. The concepts were at the time considered immutable truths, since spoken by Greenspan, and since repeated by trusted Wall Street titans, and echoed by talking heads in the financial press & media. These shattered myths were mainstay dogmas to the silly Bretton Woods II belief system, now rubble.

more...

[ozymandius]

10. No charges against Frist in stock sale

WASHINGTON - The Securities and Exchange Commission has decided not to file insider-trading charges against former Senate Majority Leader Bill Frist in connection with the sales of stock in the hospital chain his family owns, The Washington Post reported Friday.

An 18-month investigation by the SEC staff and the U.S. attorney in the Southern District of New York ended without action against the Tennessee Republican, the Post reported.

Frist had a formal interview with Justice Department and SEC lawyers to address the stock sales in late January, the Post reported, citing unidentified sources.

In a statement, Frist said he had "acted properly" and that his only reason for selling HCA Inc. stock in his trust accounts was to "eliminate the appearance of a conflict of interest."

http://news.yahoo.com/s/ap/20070427/ap_on_go_co/frist_stock

[loudsue]

30. So....does this mean Frist will enter the presidential race after all?

Now he could do his stump speeches, like junior has done, saying he has been "shown to be innocent of any wrong doing"???

:puke: Look for the repukes to enter him in their desperate race.

:kick::kick::kick:

[AnneD]

50. I can't wait...

til he put's on his spandex suit and cape, and starts diagnosing folks with his ex ray vision. We will once again have the best health care in the world.

[ozymandius]

13. Economic growth worries Wall St.

NEW YORK (CNNMoney.com) -- Investors were being cautious early Friday awaiting the latest reading on the state of the U.S. economy, even after strong results from technology bellwether Microsoft.

Stock futures were down in early trading, but a comparison to fair value, which predicts the direction of stocks at the open, pointed to a flat open. But that direction could change at 8:30 a.m. ET with the release of the gross domestic product report, the government's broadest measure of the nation's economic activity.

Economists surveyed by Briefing.com forecast that the report will show first quarter GDP was up at an annual rate of 1.8 percent, down from the 2.5 percent growth rate in the fourth quarter. That would be the slowest rate of growth since the wake of Hurricane Katrina in late 2005.

-cut-

But overseas markets also appeared cautious awaiting the U.S. GDP report. Stocks in Asia closed lower, while major indexes in Europe were slightly lower in early trading.

http://money.cnn.com/2007/04/27/markets/stockswatch/index.htm?postversion=2007042706

[ozymandius]

18. Good morning everyone.

:donut: :donut: :donut:

For a change of pace, I am announcing my departure from the computer instead of disappearing altogether. Much work for school and actual -work- needs to get done. I'll drop by later today for thread maintenance and participation. Maybe some snark if my brain is firing on all cylinders.

Ozy :hi:

[UpInArms]

20. have a great Friday, Ozy!

I still don't know what my schedule is for today (much less any other day of the week anymore).

:hi:

[Ghost Dog]

23. Back sometime later myself.

Jeez, 90 minutes on dial-up obtaining and relaying information.

:hi:

[AnneD]

45. Morning Marketeers....

:donut:and lurkers. There has been a lot of good news in the papers today and I had some good family news so I am declaring it "REAL" Good News Friday.

Stephen Hawkings got to experience zero g. He is one of my fav famous people in the world. I tend to love the theoretical physicists. Once you get past the math it is all theory and philosophy. I never got past the math but I give then a run for the money in theory and philosophy. Any way, it was the thrill of a lifetime for Mr Hawking and an honour for everyone connected I am sure. The photo on the front page was priceless.

In Israel, an entire forest was named for Coretta Scott King. A tree named after you in the honour of a lifetime so that may give you some perspective. The article was just and inch and a half, but it speaks columns.

My little baby (OK she's 17, but she is my only) is on her first trip sans family in Boston. I guess this is God's way of preparing me for next year. The good news is that she remembered she has a mom and called. Before she left, I told her of a few things to check out. When I told her to look for a pewter shop, it's a regional specialty. I got this:eyes:
She called me from a pewter shop and she was so excited. She and her friends were amazed. She is having such a wonderful time and she hasn't hit the historical sites yet. I was and still am a history junkie. I would drag her to some sites, but she just didn't get it. That is until she watched to movie 'National Treasure'. Now, she can't get enough. When they had the Franklin exhibit here-she begged to go. I made her go to the Trinity Church when we were in NY (it was in the movie). She kicks herself in the pants that we didn't see more-but she wasn't interested at the time. The good news is she is now a soon to be voting, history aware, Constitution, DOI, Bill of Rights loving, blue to the blood DEM.

Happy hunting and watch out for the bears.

[Dogmudgeon]

24. Looks like a ba-a-ad day for the US Dollar

Does anyone remember that SNL skit from a couple seasons ago, with Amy Poehler playing the role of the Dollar, in a Bowery Boys voice? (Or have a link?)

--p!

[OrangeCountyDemocrat]

38. And As Usual Gold Does Nothing

You would think with the dollar collapsing, that Gold would be comfortably above $700 by now.

[Dogmudgeon]

64. Is someone dumping gold?

:shrug:

--p!

[ret5hd]

98. ECB

[UpInArms]

26. Barclays may face SEC action over debt trading

http://www.reuters.com/article/bondsNews/idUSN2740746820070427

NEW YORK (Reuters) - The U.S. securities regulator is considering legal action against Barclays Plc over trading done while the bank's employees were serving on bankruptcy committees, according to a regulatory filing.

The Securities and Exchange Commission (SEC) investigation looks into trading activity between 2002 and 2003 by a proprietary trading desk at Barclays, the bank said in a March SEC filing.

A separate lawsuit filed against the bank in March by a former employee alleges that Barclays' U.S. distressed debt desk, which deals in bankrupt company bonds, traded debt after "potentially gaining nonpublic information" through bankruptcy creditor committees.

The suit was filed in March by former Barclays analyst Michael Econn in the Manhattan federal court. Econn is seeking damages for alleged

...more...

[UpInArms]

27. GM cuts work at 2 plants after talks fail: WSJ (Kansas and Ohio)

http://www.reuters.com/article/bondsNews/idUSN2744239720070427

NEW YORK (Reuters) - General Motors (GM.N: Quote, Profile, Research suspended development work at two U.S. plants after talks between the union and management on cost cutting ended, the Wall Street Journal reported on its Web site on Friday.

United Auto Workers leaders ended talks at facilities in Fairfax, Kansas and Lordstown, Ohio after disagreements with the company, the Journal reported, citing unnamed sources.

The paper cited sources as saying GM told UAW that it was suspending work related to two new-vehicle programs.

...more...

[Roland99]

33. 10:27am - Stagflation among us and markets yawn

DJIA 13,109.32 +3.82 +0.03%
Nasdaq 2,558.00 +3.54 +0.14%
S&P 500 1,492.32 -1.93 -0.13%
Dow Util 523.90 -3.43 -0.65%
NYSE 9,696.06 -19.43 -0.20%
AMEX 2,204.74 +7.49 +0.34%
Russell 2000 830.05 -3.75 -0.45%
Semcond 503.15 -3.33 -0.66%
Gold future 680.70 +2.70 +0.40%
30-Year Bond 4.88% +0.01 +0.23%
10-Year Bond 4.69% +0.01 +0.13%

NYSE
Advancing 1,084
Declining 1,779
Unchanged 178

Nasdaq
Advancing 1,109
Declining 1,592
Unchanged 130

[Ghost Dog]

40. Murmurs of stagflation hint at challenge for Fed

http://www.msnbc.msn.com/id/7602530/
By Martin Wolk
Chief economics correspondent
MSNBC
Updated: 4:21 p.m. ET April 22, 2005

The word “stagflation” conjures up some pretty frightening memories. Long lines at gas stations. Unemployment over 10 percent. Double-digit mortgage rates.

So let’s specify at the start that what is going on in the economy right now is nothing like your father’s stagflation — a nasty combination of hyperinflation, high unemployment and persistently sluggish growth that foiled policy-makers a generation ago. (Remember President Ford’s ineffective “Whip Inflation Now” buttons?)

Still, economic growth is clearly slowing at the same time inflation is rising, an unpleasant alignment of factors that could pose a tough puzzle for the Federal Reserve in the near future as central bankers consider whether to continue raising interest rates.

Princeton economist Paul Krugman wrote in his New York Times column this week that stagflation fears were behind last week’s sharp drop in stock prices, which was partly reversed in a big rebound Thursday.

“What few seem to have noticed, however, is that a mild form of stagflation — rising inflation in an economy still well short of full employment — has already arrived,” he wrote. Other economists took issue with the description, noting that the term stagflation was coined to describe far different conditions.

/...

See also Wikipedia: http://en.wikipedia.org/wiki/Stagflation

Stagflation, a portmanteau of the words stagnation and inflation, is a term in general use within modern macroeconomics used to describe a period of out-of-control price inflation combined with slow-to-no output growth, rising unemployment, and eventually recession. The term Stagflation was first used by the outspoken and ultimately quite controversial former general counsel of the Export-Import Bank of the United States who was appointed by President John F. Kennedy, Dr Peter Beter. "Stag" is drawn from the first syllable of "stagnation", a reference to a sluggish economy, while "flation" is drawn from the second syllable of "inflation" -- a reference to an upward spiral in consumer prices. Economists associate the presence of both factors as unit costs increase because fixed costs are spread over smaller output.

Stagflation is a problem because the two principal tools for directing the economy, fiscal policy and monetary policy, offer only trade offs between growth and inflation. A central bank can either slow growth to reduce inflationary pressures, or it can allow general increases in price to occur in order to stimulate growth. Stagflation creates a policy bind in which efforts to correct one problem can worsen the other. The dilemma in monetary policy is instructive. The central bank can make one of two choices, each with negative outcomes. First, the bank can choose to stimulate the economy and create jobs by increasing the money supply (by purchasing government debt), but this risks boosting the pace of inflation. The other choice is to pursue a tight monetary policy (reducting government debt purchases in order to raise interest rates) to reduce inflation, at the risk of higher unemployment and slower output growth.

The problem for fiscal policy is far less clear. Both revenues and expenditures tend to rise with inflation, all else equal, while they fall as growth slows. Unless there is a differential impact on either revenues or spending due to stagflation, the impact of stagflation on the budget balance is not altogether clear. As a policy matter, there is one school of thought that the best policy mix is one in which government stimulates growth through increased spending or reduced taxes while the central bank fights inflation through higher interest rates. In reality coordinating fiscal and monetary policy is not an easy task.

[Roland99]

41. And now a few words from Howard Jones:

We're not scared to lose it all
Security throw through the wall
Future dreams we have to realize
A thousand sceptic hands
Wont keep us from the things we plan
Unless were clinging to the things we prize

And do you feel scared - I do
But I won't stop and falter
And if we threw it all away
Things can only get better
Wow wow wow oh, wow wow wow oh oh oh oh

Treating today as though it was
The last, the final show
Get to sixty and feel no regret
It may take a little time
A lonely path, an uphill climb
Success or failure will not alter it

And do you feel
Wow wow wow oh...

And do you feel...


:scared:

[54anickel]

44. And yet, no one ever is to blame....

I love Howard Jones - now I've gotta go break out that CD!

Appropriate, with a few lyric changes

You can look at the menu but you just cant eat
You can feel the cushions but you cant have a seat
You can dip your foot in the pool but you cant have a swim
You can feel the punishment but you cant commit the sin

And you want work, but no one wants you
No work for anyone
And you want work, yet no one wants you
No one, no one, no one ever is to blame

You can build a mansion but you just cant live in it
Youre the fastest runner but youre not allowed to win
Some break the rules
And never pay the cost
The insecurity is the thing that wont get lost

And you want her and she wants you
She wants everyone
And you want her and she wants you
No one, no one, no one ever is to blame

You can see the summit but you cant reach it
Its the last piece of the puzzle but you just cant make it fit
Doctor says you're uninsured, just live with the pain
Aspirations in the clouds but your hopes go down the drain

And you want her and she wants you
But Bush hates everyone
And you want her and she wants you
No one, no one, no one ever is to blame
No one ever is to blame
No one ever is to blame


Of course, the original lyrics work fine if you think of her as:

[Roland99]

47. Well done.

:applause:

[Ghost Dog]

55. If only we could just have President Kennedy, and most of his advisors,

back.

You b*stards.

edit. And I speak, I think, with respect, for most of the world. Including Cuba.

[54anickel]

42. Baby boomers going bankrupt at faster rate

Americans over 55 squeezed by mortgage debt, higher health care costs

http://www.msnbc.msn.com/id/18335371/

NEW YORK - Americans over the age of 55 are filing for bankruptcy at a faster rate than the general population as growing mortgage debt and higher health care costs make them more vulnerable, a new study shows.

The trend of rising bankruptcies among older Americans is likely to continue for the foreseeable future, according to the study’s authors, John Golmant and Tom Ulrich, researchers at the Administrative Office of the U.S. Courts.

They found that the aging of the population alone does not account for the rise in older filers and that “bankruptcy courts can anticipate an influx of new bankruptcy petitions as the baby boom generation continues to age.”

Senior researcher Jose Garcia, who examines consumer finance trends at New York-based Demos, said rising costs for housing and health care, especially prescription drugs, have made older Americans more dependent on credit. This, in turn, makes them more vulnerable to financial rough spots.

snip>

The ABI Journal study used data from the courts and public records to track how filing rates among different age groups have changed over time. In 2002, the percentage of Americans older than 45 who entered bankruptcy reached 39 percent, up from 27 percent in 1994, the study found.

more...

What, no mention of the loss of good jobs being replaced by burger flipping and greeter positions? Speaking as "an old fart" it's been pretty tough to get considered for a decent tech job at this age...and I'm not all THAT old.

[AnneD]

52. I thank my lucky stars every day...

I was hit badly during the 80's. I lost my job, my car, my retirement. I was lucky to have my Mom's trailer so I had a roof over the head. And on top of everything else-the economy was sucky. While trying to figure things out I did some research into what jobs would be growth in the future, looked at my college credits and come up with Nursing as a quick and dirty way to recover. At 32, I had to rebuild my life in a way I never imagine. I know that it is hard but can be done. I went through a storm at 32 so I would know how to handle a hurricane later in life. I am grateful I did not have a child then, it would have been harder. I had loads of good friend and family and a lot of faith that I could survive.

I hope I never have to use these skills, but I am prepared. It is not easy for older folks, but you can survive. You have to create your own job after a point because, as we learn here on a daily basis, corporate America is pretty stupid.

[54anickel]

56. Yeah, I've "retooled" several times in my lifetime, as I've shared here

before. Now I'm old and tired, cost of education has sky-rocketed and at my age it just doesn't seem worth the 20-30K to finish a BA that corporate America seems to be demanding. If I add up all the years of "re-tooling schooling" I could have had a friggen "piled higher and deeper" by now and then some. Ahhh, hind-sight!

I'm an old and bitter curmudgeon now. Started going for a BA at University of Phoenix, since it was the most affordable and found it to be a joke - certainly not worth $20K to have my head filled with RW Conservative talking points and business strategies! (I can't believe that place is considered an accredited University - my apologies to anyone attending or an alumni - JMHO - like I said, I'm a bitter, old curmudgeon).

I'm surviving alright for now with side jobs and what-not. Thank Bob hubby still has a decent job with bennies, but I do need to get off-a-my-ass and get a "real" job. Sure, we're pretty secure for now, but the future ain't lookin real bright at this point in time.

[AnneD]

102. I face the push for education all the time....

I did the quick and dirty and got an ADN. Everyone refers to it as a 2 yr degree. It takes 3-4 yrs to complete. A bachelors takes 4-5 due to the lab classes. I have resisted the push to get my bachelors. It is just not cost effective. I did a double major (biology and chemistry) the first time and had to drop out. I have to take continuing courses all the time to keep abreast. My background and experiences make me a hell of a lot more educated than most of my supervisors and I know I am a damn bit smarter. If I had to retool again it would be business and just enough to start my own business (reading ledgers etc-the nuts and bolts, write a business plan, and grant writing).

I had an older student (that didn't graduate). I would bug him to finish up. One day he told me a truism. "There comes a point when they (college) can't teach you anything else. You learn to teach yourself". I have reached that point, and I  think  you have too.

I have pondered University of Phoenix too.They wanted me to get the Bachelors. I told them I wouldn't-I already have my RN license. That BSN will get me $.50 an hour more. But an RN+ a BS in Business makes me your boss. I have noticed that in the real world, they make exceptions if you know your stuff.

Chin up to those that are having to retool, esp older workers. We may fast become a nation of small business men-like we were before the Industrial Revolution.

[kineneb]

78. been there

went through Chapter 7 last summer. Hubby (now 60) lost his job (WorldCom, 2002 layoffs) and then his health (diabetes leading to kidney failure, 2005). My condition is not too much better- I have applied for mental health disability at the urging of my case worker. (Don't worry, I am harmless; my favorite weapon is my wit.)

[54anickel]

80. Hi Kineneb, hugs to you. This globalization shit wouldn't be quite so

bad if we had any kind of safety net (along with fair trade of course). Seems the global working class has been set up by the multinationals to eat their own, while we all are butt-fuc exploited by the "kleptocracy", "oligarchy", "plutocracy", "greedy selfish filthy rich bastards" (as opposed to generous filthy rich bastards).

:hug:

[54anickel]

46. All the World's a Bubble

http://www.thestreet.com/_tscs/funds/followmoney/10353243.html

snip>

While euphoria sweeps stock markets here and worldwide, there are at least a few voices of dissent.

One, unsurprisingly, is legendary value investor Jeremy Grantham -- the man Dick Cheney, plus a lot of other rich people, trusts with his money. Grantham, chairman of Boston firm Grantham Mayo Van Otterloo, has been a voice of caution for years. But he has upped his concerns in his latest letter to shareholders. Grantham says we are now seeing the first worldwide bubble in history covering all asset classes.

Everything is in bubble territory, he says.

snip>

As Grantham points out, a bubble needs two things: excellent fundamentals and easy money.

"The mechanism is surprisingly simple," he wrote. "Perfect conditions create very strong 'animal spirits,' reflected statistically in a low risk premium. Widely available cheap credit offers investors the opportunity to act on their optimism."

And it becomes self-sustaining. "The more leverage you take, the better you do; the better you do, the more leverage you take. A critical part of a bubble is the reinforcement you get for your very optimistic view from those around you."

It's something to think about the next time you hear someone tell you that the stock market will keep rising simply because the world economy is doing so well. That would make sense only if we were paying a constant price for each unit of world GDP, instead of higher and higher prices for one slice of that GDP -- equity.

more...as he goes on to tell you it's a good time to buy :eyes:

[54anickel]

48. Suddenly, Hedge Fund Fees Seem High

http://news.yahoo.com/s/bw/20070426/bs_bw/apr2007db20070425965639;_ylt=Al5Si95zRwHEBKEcVk.5ZCy1v0gC

The top-performing hedge funds and private equity firms have generated annual returns in excess of 50% during the last few years, easily beating the public markets. Pension funds and other large institutions that put their money into these "alternative investments" pay a steep price to share in those profits. The funds typically charge a management fee as high as 2% of the funds that their limited partners--customers--invest. For top players in the hedge fund game, that means hundreds of millions of dollars in fee income from each new fund.

Now some institutional investors have started to complain, noting that the average hedge fund failed to keep pace with the market in 2006. In February, a senior manager at the $225 billion California Public Employees' Retirement System (CalPERS) said at the Institutional Fund Management conference that hedge fund fees have gotten too steep.

While hedge funds are commonly perceived as more risky than the stock market, they're actually supposed to carry less risk, producing relatively consistent results in both bull and bear markets. CalPERS Chief Investment Officer Russell Read said many hedge funds charge too much without delivering high enough returns or low enough risk. "We have no problem paying high-performance fees for a manager's selection, but we find taking on average market risk inherently unsatisfying," Read told attendees at the Geneva conference. CalPERS, the largest U.S. pension fund, said Read wasn't available for further comment on the issue.

snip>

Despite the fact that the average hedge fund lagged the broad market, the top funds remain wildly profitable for their investors. Senior managers of the top 25 funds took home an average of $363 million in 2006, according to a study by Institutional Investor. James Simons, the head of Renaissance Technologies, earned $1.5 billion last year.

Different Rules for Top Performers

snip>

Once regarded as useful supplements to mainstream investments, private equity firms and hedge funds now sit in the mainstream of institutional investing. But success always comes with a price. :eyes:

[54anickel]

58. Private equity joins hedge funds on EU risk radar

http://business.scotsman.com/latest.cfm?id=617042007

BERLIN (Reuters) - European Union finance ministers may target private equity funds as well as hedge funds in their drive to tighten regulations to shore up the financial system against financial crises, a document showed on Saturday.

"There is a need for great vigilance in enforcing existing provisions on market abuse in order to sustain market integrity and confidence in (the) private equity business," the document, discussed by ministers at meetings in Berlin, said.

Noting the recent rapid growth of private equity funds and the broad benefits they had brought to the financial system, the document detailed key risks posed by their involvement in complex and highly-leveraged transactions and the difficulty of identifying who bears the final economic risks of buyouts.

"Although recent evidence in the EU suggests that banks' exposures to the LBO sector are not large relative to their capital buffers, the current competitive environment entails risks that warrant close monitoring so as to better identify the spreading of the economic risk," it said.

Measures to shed light on how much risk hedge funds pose to the stability of markets appear inevitable.

more...

Heh, may have something to do with this....too bad it requires a subscription

http://www.ft.com/cms/s/0ea2a698-f31c-11db-9845-000b5df10621,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0ea2a698-f31c-11db-9845-000b5df10621.html&_i_referer=

Capital markets: Funds are ousting the banks
By Gillian Tett

Published: April 27 2007 04:16 | Last updated: April 27 2007 04:16

This month a striking new statistic tumbled out of Europe’s vast – but somewhat shadowy – leveraged loan sector. For the first time, banks account for less that half of activity in the primary leveraged finance market, acording to Standard & Poor’s Leveraged Commentary Data.

That compares to 90 per cent at the start of the decade – and an even higher proportion in previous decades, when banks controlled the loan space in Europe.

more....


Calls for a little Stealers Wheel....

....

Yes I'm stuck in the middle with you,
And I'm wondering what it is I should do,
It's so hard to keep this smile on my face,
Losing control, yeah, I'm all over the place,
Clowns to the left of me, Jokers to the right,
Here I am, stuck in the middle with you.

Well you started out with nothing,
And you're proud that you're a self made man,
And your friends, they all come crawlin,
Slap you on the back and say,
Please.... Please.....

Trying to make some sense of it all,
But I can see that it makes no sense at all,
Is it cool to go to sleep on the floor,
'Cause I don't think that I can take anymore
Clowns to the left of me, Jokers to the right,
Here I am, stuck in the middle with you.

......

[54anickel]

51. Baker Hughes ends bribe case with $44 million penalty

Houston firm brings probe of its alleged corruption violations to close

http://www.chron.com/disp/story.mpl/business/4754124.html

A unit of oil-field services company Baker Hughes has agreed to pay $44 million to end federal investigations into alleged violations of the Foreign Corrupt Practices Act.

This marks the largest penalty agreed to in a series of recent cases brought under the act, according to the Securities and Exchange Commission and the Department of Justice.

The company, the world's third-largest oil-field services firm, had disclosed in 2002 and 2003 that it was in talks with government officials about settling cases related to the investigations.

The commission claimed Baker Hughes Services International paid money to middlemen in Kazakhstan knowing that it would be used as bribes to win business.

It also alleged violations of the act in other countries.

snip>

The fine was especially high, commission officials said, because the company violated a related 2001 cease-and-desist order.

snip>

In the Vetco deal, the companies agreed to pay a combined $26 million to settle charges of bribing Nigerian officials.

"Although these fines are high, this is really consistent with the trends we've seen recently," said Lucinda Low, a partner with law firm Steptoe & Johnson in Washington, D.C., who specializes in Foreign Corrupt Practices Act cases. "It stands for a record fine for now, but I think we should expect to see the trend continue."

Bribery investigations involving U.S. energy companies are nothing new, since the nation has had some of the toughest anti-bribery laws for years. :eyes:

snip>

The news should not affect the company's earnings, Flaharty said, because the company had about $46 million in reserves set aside in anticipation of a settlement.

more...

[hang a left]

54. I'm no market analyst...

but wth is everyone so excited about??

Great toon as always!

[54anickel]

57. Whatcha mean by "everyone" and "excited"?...n/t

[hang a left]

59. Sorry 54

I was referring to the happy stock buyers.

Definitely not you or anyone in this thread.

I read here everyday, but never post, well, because I am stupid.

I learn a lot from you DSMW posters.

I was just real curious as to all the glee in the markets.

[54anickel]

61. No need to aplogize, I just didn't get your question. And please feel free

to post here anytime. Trust me you're not stupid - we ALL feel that way. Probably because none of what's been going on makes any sense.
I'm feeling like one of the prisoners in Plato's Allegory of The Cave. These markets certainly don't resemble the ones I grew up with! But surely, my reality must be all wrong cuz all I'm hearing is "it's different this time". :crazy:

[54anickel]

63. Flush with oil cash, Gulf states step up foreign buying

http://www.iht.com/articles/2007/04/26/business/spree.php

DUBAI: A handful of state-owned Gulf companies are picking up the pace of overseas buying activity, focusing on high-profile companies like Dow Chemical in a search for sound investments in which to place profits from high oil prices.

Investment by Gulf countries in the United States appears to have picked up after a chill last year when Congress, citing national security concerns, forced Dubai Ports World to sell off U.S. ports operations that it had acquired as part of a larger deal.

After saturating their home market with about $1 trillion in project investments, state-owned companies in the United Arab Emirates, Saudi Arabia, Kuwait and Qatar have increasingly looked overseas for companies and trophy real estate to acquire.

Last year, Dubai International Capital, an investment company owned by Dubai's ruler, Sheik Mohammed bin Rashid al-Maktoum, bought a British defense company, Doncasters, which makes parts for U.S. fighter jets and tanks. This year, Dubai International bought and then sold most of Madame Tussauds, the wax museum chain.

Another Dubai investment firm, Istithmar, paid $340 million for a string of six well-known buildings in New York, including the Knickerbocker and W Hotels, as well as the Mandarin Oriental, a five-star hotel in Manhattan. Istithmar also holds 2.4 percent of Time Warner shares and options and in July acquired the New York specialty retailer Loehmann's for $300 million.

Dubai Aerospace Enterprise is expected to finalize a $1.8 billion deal to buy Standard Aero Holdings, which is owned by Carlyle Group and overhauls engines and turbines used in small jets. Dubai Aerospace is also expected to seal a deal with Landmark Aviation, an aircraft maintenance company.

more...

Rummage-o-rama, baby!!!!

[54anickel]

65. Harman deal puts spotlight on stub equity

http://www.reuters.com/article/mergersNews/idUSN2617942920070426

PHILADELPHIA/NEW YORK, April 26 (Reuters) - The $8 billion takeover deal on Thursday for Harman International Industries Inc. (HAR.N: Quote, Profile, Research gives shareholders the chance to keep a stake in the audio-equipment maker and marks a novel move by private equity firms to appease growing resistance from public investors.

Although several private equity deals in Europe have offered shareholders the chance to co-invest alongside private investors, the stub equity concept has rarely been seen in the buyout frenzy in the United States.

Stub equity holdings could become more popular as companies try to negotiate better deals with cash-rich private equity buyers and investors become more demanding in their right to benefit from the future growth of their companies, experts said.

snip>

Kohlberg Kravis Roberts (KKR.UL: Quote, Profile, Research and Goldman Sachs Group Inc.'s (GS.N: Quote, Profile, Research private equity arm agreed to buy Harman for $120 a share in cash. Harman shareholders can elect to receive some of that compensation in the form of stock in the new privately held company. Harman shareholders would own a maximum of 27 percent of the new private corporation.

"Either they (the buyers) want to give shareholders a stake in the upside, or they want to gain an accounting benefit," said Michael Ryan, a partner specializing in private equity at law firm Cleary Gottlieb Steen & Hamilton LLP.

snip>

"But it's not good for a public shareholder," he said.

"You're taking entities that have wonderful characteristics and growth prospects -- or folks like KKR would not be interested in buying them -- and you're trading the long-term value for cash and small piece of the growth. Public shareholders won't be enjoying the majority of the benefits down the road," Asher said.

snip>

Many institutional investors are unable to own illiquid stocks that do not trade on a major exchanges. As a result, many of the stub owners may be company officers and hedge funds, rather than mutual funds or the average small investor.

"It may not be as democratic as it sounds. Not everyone will be able to own a stub entity and the stub owners typically have minimal power or say in how the company is run," said one lawyer who specializes in mergers and acquisitions.

more...

[54anickel]

71. Eww, missed this one - Fascist America, in 10 easy steps

http://www.guardian.co.uk/usa/story/0,,2064157,00.html

From Hitler to Pinochet and beyond, history shows there are certain steps that any would-be dictator must take to destroy constitutional freedoms. And, argues Naomi Wolf, George Bush and his administration seem to be taking them all

Tuesday April 24, 2007
The Guardian


Last autumn, there was a military coup in Thailand. The leaders of the coup took a number of steps, rather systematically, as if they had a shopping list. In a sense, they did. Within a matter of days, democracy had been closed down: the coup leaders declared martial law, sent armed soldiers into residential areas, took over radio and TV stations, issued restrictions on the press, tightened some limits on travel, and took certain activists into custody.

They were not figuring these things out as they went along. If you look at history, you can see that there is essentially a blueprint for turning an open society into a dictatorship. That blueprint has been used again and again in more and less bloody, more and less terrifying ways. But it is always effective. It is very difficult and arduous to create and sustain a democracy - but history shows that closing one down is much simpler. You simply have to be willing to take the 10 steps.
As difficult as this is to contemplate, it is clear, if you are willing to look, that each of these 10 steps has already been initiated today in the United States by the Bush administration.

Because Americans like me were born in freedom, we have a hard time even considering that it is possible for us to become as unfree - domestically - as many other nations. Because we no longer learn much about our rights or our system of government - the task of being aware of the constitution has been outsourced from citizens' ownership to being the domain of professionals such as lawyers and professors - we scarcely recognise the checks and balances that the founders put in place, even as they are being systematically dismantled. Because we don't learn much about European history, the setting up of a department of "homeland" security - remember who else was keen on the word "homeland" - didn't raise the alarm bells it might have.

It is my argument that, beneath our very noses, George Bush and his administration are using time-tested tactics to close down an open society. It is time for us to be willing to think the unthinkable - as the author and political journalist Joe Conason, has put it, that it can happen here. And that we are further along than we realise.

more...

[54anickel]

72. 3:30 and heading into the close

Dow 13,125.90 20.40 (0.16%)
Nasdaq 2,558.04 3.58 (0.14%)
S&P 500 1,494.41 0.16 (0.01%)
10-yr Bond 4.6980% 0.0140
30-yr Bond 4.8850% 0.0170
NYSE Volume 2,283,385,000
Nasdaq Volume 1,785,443,000

3:00 pm : Stocks have lost some of their momentum over the last 30 minutes but are still holding on to the bulk of their gains. The Financials sector bouncing in and out of positive territory is among the more noticeable reasons for the market's inability to press even higher.

Nonetheless, the market's resilience in the face of early profit taking, during what is shaping up to be the best monthly performances for the Dow and S&P 500 since December and October of 2003, respectively, remains commendable. Today's gains also suggest that investors may be anticipating another round of supportive M&A news come Monday. With one more day of trading before April comes to a close, the Dow is up 6.4% for the month while the S&P 500 has climbed 5.3%. DJ30 +34.50 NASDAQ +4.68 SP500 +1.97 NASDAQ Dec/Adv/Vol 1698/1272/1.61 bln NYSE Dec/Adv/Vol 1759/1443/1.06 bln

2:30 pm : Even though market gains remain modest in scope, the indices are extending their reach to the upside. The economically-sensitive Industrials sector's (+1.6%) ability to keep shrugging off this morning's weaker than expected GDP report and a 2.0% surge in oil prices remains very noteworthy. Sector gainers include: GE +3.3%, MMM 1.9%, CAT +1.0%, HON +2.1%, LMT +3.1%, WMI +7.4%, and CMI +15.4%.

Another noticeable reason behind the market's continued advance has been a turnaround in the more influential Financials sector. After languishing in the red all morning, the AMEX Securities Broker/Dealer Index (XBD +0.4%) recently turning the corner is providing notable leadership. DJ30 +37.52 NASDAQ +5.05 SP500 +2.34 NASDAQ Dec/Adv/Vol 1779/1199/1.49 bln NYSE Dec/Adv/Vol 1831/1363/986 mln

2:00 pm : Absent a catalyst throughout most of the sessions, the indices have finally broken out of their very tight trading ranges, getting a boost from, of all things, higher oil prices. Crude for June delivery is hitting fresh session highs, surging 1.9% to $66.32/bbl amid more short covering.

While oil's uptick itself is bearish for consumers, it has prompted a turnaround in the Energy sector (+0.3%) and provided another leg of support. Drillers (+2.0%) as well as Oil & Gas Equipment (+1.9%) now rank among today's top ten performing S&P industry groups. Regrettably for the bulls, though, the move higher has merely inched the S&P 500 into the green for the first time today and market gains remain minimal. DJ30 +26.9 NASDAQ +0.96 SP500 +0.67 NASDAQ Dec/Adv/Vol 1737/1208/1.39 bln NYSE Dec/Adv/Vol 1799/1359/902 mln

1:30 pm : More of the same for stocks as the indices remain mixed but market internals still exhibit a negative underlying tone. As reflected in the A/D line, decliners on the NYSE hold a nearly 19-to-12 edge over advancers while those on the Nasdaq hold an 18-to-11 margin.

Down volume outpacing up volume further dictates the sense of reserve on the part of buyers as the sustainability of this month's rally remains in question given more evidence that slowing economic growth may lead to downward revisions to Q2 and Q3 EPS forecasts. DJ30 +18.39 NASDAQ +0.38 SP500 -0.20 NASDAQ Dec/Adv/Vol 1814/1113/1.26 bln NYSE Dec/Adv/Vol 1905/1229/806 mln

1:00 pm : Stocks continue to trade with little fanfare as investors still lack a catalyst to set a more definitive tone to today's action. Be that as it may, the Dow at current levels is not only on track to close higher for the 19th time in 21 sessions, a feat that hasn't happened since the 1920s, but it is at record levels yet again.

It is worth noting, though, that 18 of the Dow 30 are posting losses and, while it would seem Microsoft's (MSFT 30.26 +1.16) 4.0% surge is the biggest reason for the Dow clinging to gains, it is actually getting more of a boost from follow-through momentum in 3M Co (MMM 82.20 +1.75). The latter's intraday advance is only half that of Microsoft but since 3M is among the price-weighted index's more expensive components, its 3M's 14-point contribution beats out MSFT's 9-point backing. DJ30 +13.00 NASDAQ -0.17 SP500 -0.82 NASDAQ Dec/Adv/Vol 1806/1099/1.18 bln NYSE Dec/Adv/Vol 1927/1203/736 mln

12:30 pm : No real change in the proceedings as the afternoon session gets underway. Eight of 10 sectors are still under pressure; but the Energy sector's (-0.3%)inability to take advantage of oil prices spiking to their highest levels of the day is among the more noteworthy developments within the last 30 minutes.

Crude for June delivery is up 1.3% and now hovering near the $66/bbl level as concerns about potential supply disruptions in the Middle East prompt traders to cover their shorts going into the weekend. Saudi Arabian authorities arrested 172 Islamic militants suspected of plotting attacks on the country's oil fields.DJ30 +3.49 NASDAQ +1.29 SP500 -2.20 XOI -0.7% NASDAQ Dec/Adv/Vol 1813/1077/1.09 bln NYSE Dec/Adv/Vol 1926/1185/674 mln

12:00 pm : Directionless trading is the best way to describe the way stocks are languishing midday as weak economic data and mixed earnings reports leave investors questioning the sustainability of the market's recent run-up.

Such fatigue isn't all that surprising, though, given the market's sizable gains this month. During the last 20 sessions the Dow has only closed lower twice, hitting a fresh record high yesterday and logging an impressive 6.5% over that duration as blue chips continue to post better than expected earnings.

The price-weighted index's latest surprise has come from Microsoft (MSFT 30.30 +1.20), which reported a 65% jump in record Q3 profits amid strong Vista sales and provided reassuring guidance last night. In fact, Microsoft's 4.4% gain is the biggest reason why Technology (+0.4%) is among only two sectors trading higher.

Industrials (+1.0%) is the only other bright spot today from a leadership standpoint, as the sector accounts for six of today's top ten winning S&P industry groups. Environmental Services is pacing the way after Waste Management (WMI 37.93 +2.58) followed up a 19% rise in Q1 profits by raising its full-year forecasts. Industrial Conglomerates ranks in the top five after a Citigroup analyst said General Electric (GE 36.56 +0.72) should spin off its NBC and GE Money units while Construction & Farming is getting a huge lift from Cummins Inc. (CMI 99.82 +13.83). The stock is currently up nearly 16% at an all-time high after it handily beat expectations and boosted its FY07 profit outlook.

Be that as it may, an advance read on GDP showing that the U.S. economy grew at a weaker than expected 1.3% pace in Q1 (consensus 1.8%) has cast a pall over a market viewed by many as ripe for a pullback. The data have served as a reminder that the decent earnings trends for Q1 may not continue into Q2 and Q3. Even though a slowdown was widely anticipated, continued sluggish growth dampens the earnings outlook, which makes it very difficult for the market to sustain the pace of a rally that has lifted several indices to record levels of late. BTK -0.6% DJ30 +4.14 DJTA -1.1% DJUA -0.6% DOT +0.4% NASDAQ +1.11 NQ100 -0.3% SOX -1.6% SP400 -0.6% SP500 -2.34 XOI -0.5% NASDAQ Dec/Adv/Vol 1853/1043/976 mln NYSE Dec/Adv/Vol 2007/1066/590 mln

[loudsue]

74. Thanks for the numbers, Nickel!!

:hi: I appreciate that!! :applause:

:kick:

[mojavekid]

77. Peter Schiff: What Record High?

http://www.kitco.com/ind/Schiff/apr272007.html

As the Dow burst through the 13,000 milestone this week, few understood the hollowness of the achievement. Measured against the rising dollar-denominated prices of just about everything else on the planet, the Dow has actually lost value over the past seven years. Measured against the truest benchmark, the price of gold, the record high for the Dow was set back in January of 2000 when its price equaled approximately 43 ounces of gold. Today it is only worth about 19 ounces.

To better appreciate just how much of stock gains can be attributed to inflation, consider that the record high for the Dow in 1929 of approximately 380 also equated to 19 ounces of gold. So despite all of the hoopla and a thirty-fold increase in stock prices, the Dow has actually gained no real value during the past eighty years. The entire rise from 360 to 13,000 has been an illusion made possible by the magic of inflation. So much for the concept of stocks being a “can’t lose” long term investment -- unless you feel that eighty years is not quite a long enough time horizon!

Now that is not to imply that the Dow has not generated returns during those years: it has. However, those returns have been a function of dividends and not appreciation. But its not yields that Wall Street celebrates, its prices. By dazzling investors with higher prices, they distract their attention from the unpleasant reality that they are actually treading water. What difference does it make if you have more dollars if the dollars themselves have less purchasing power?

more...

[54anickel]

79. Heh, did someone say purchasing power?

http://www.measuringworth.com/ppowerus/#

[54anickel]

73. Apple Pie, Economic Growth & Fatal Stock Market Flaws

http://the-great-retirement-experiment.com/Products/Apple%20Pie.htm

snip>

Pie Problems

I think you can see our pie problem. Which is the difference between looking at pies, and actually eating pies. Around fifty million Baby Boomers are planning on eating nice slices of a really big investment pie at some point down the road. Not just all the people who buy stocks and other investments directly, but all those who buy through their retirement accounts, and indeed, anyone who is planning on getting a pension as part of their retirement.

The problem is that when we add up all the different expectations for our future pieces of Investment Pie, and compare them to what the total Economic Pie is likely to be – there just isn’t enough pie to go around. An individual can certainly earn a particularly fat slice of the pie, so long as they follow an investment strategy that works out very well indeed. As many investors have in the past. However, how can everybody who follows the conventional investment strategies all earn those big slices simultaneously? How can one sixth of the entire population simultaneously have their real worth increase 18 times faster (1,645/92) than the real per capita worth of the nation itself?

It looks like we have a problem. The amount of real wealth in terms of resources, is growing far, far slower than people’s perceptions of their current and future wealth, as valued by their investment portfolios. We have a huge group of people planning on actually selling those investment portfolios to get real resources, at the same time, year after year. How do we make it all add up?

The simple answer is: they can earn that wealth on paper, but when it comes to real resources, they can’t cash it out. A pie, or an economy, is made up of the sum of its slices. When most of the people are all expecting their own slices to grow far faster than we know the overall pie is growing – an awful lot of people are likely to be very disappointed.

snip>

Missing Years

The corporate and government officials making theseplans are quite confident, because they do have history on their side. They (or really their financial advisers) can selectively pull out their exponential compounding equation. They can plug that equation into their hypothetical models and say, yes, our magic money machine should have worked this decade, and yes, it should have worked that decade. They can show that it in fact works, by pointing to those years when massive amounts of money were pulled out of the markets and used for real resource consumption, without slowing down the steady rise of the markets, years like, you know… well… um…

That’s the problem. There aren’t any years like that. Years where extraordinary amounts of money were pulled out of the markets and converted into real goods and services in order to meet widespread societal needs that are so great that they are otherwise unaffordable for corporations and governments. There are no years like that – because we’ve never actually tried this before, on anything like this scale.

About as close as we can come is a few years where substantially more investors have tried to take money of the markets than putting money in. Nothing like the thirty plus consecutive years that the Baby Boom has in mind for their strategy, just an individual year here and there. 2001 would be the most recent of the years, 1929 is another well known one. You know, it was the strangest thing too, because real goods and services didn’t spontaneously arise from the earth to cash out all those millions of investors selling their symbols at the same time. Instead, much or most of the symbolic value of the markets just disappeared in those years instead. “Poof”, went away, almost like it was never there at all.

[mojavekid]

75. The Mogambo Guru: Economic Nirvana

http://www.kitco.com/ind/Daughty/apr262007.html

Total Fed Credit was finally up a little bit last week - but only $1.8 billion. And considering the staggering loads of existing debt that everyone is currently saddled with, this ain't diddly-squat. TFC still, as they say, "ain't going nowhere fast."

Now, there may be a lot of reasons why TFC is down below where it started the year, but not one of them is a good one. In fact, it is tantamount to saying, "An economy based on constantly-expanding money and credit was saved from the predictable and inevitable recession/depression at the end of the long boom, and everything was fine from then on, by cleverly creating less money and credit"! Hahaha! Too much!

And this is tantamount to saying, "The Mogambo's mounting outrage is partially controlled with powerful medications that are normally used to tranquilize angry, rabid rhinos; but now giving him less drugs will make him even calmer."

Plenty more at link...

[mojavekid]

76. Daily Pfennig 4/27/07: Eurozone Retail Sales Soar!

http://www.kitcocasey.com/displayArticle.php?id=1352

Chris tells me that we saw a lot of traders and participants take profits off the table yesterday, allowing the dollar to breathe a sigh of relief. That shouldn't take too long, and from what I'm seeing this morning, it has already ended! The euro is ticking upward, and why not? This morning we saw April's Eurozone Retail Sales, which just happened to increase the most in the last 10 months!

This report really illustrates a theme that I started about two years ago and that Chris has brought to everyone's attention again... The Tale of Two Cycles... The U.S. economy is spent... But Europe is up and coming and seeing Retail Sales kick some tail and take names later is really spraying proof all over that theme!

And don't look now... That sound of something falling past you is the Federal Reserve's Trade-Weighted Dollar Index. This is different than the "dollar index" that you normally hear about... The Fed's Trade-Weighted Dollar Index (FTWDI) fell to its lowest level since its inception in 1971. If you are old enough, or have even listened to one of my presentations, you know that the dollar was bounced from the Bretton Woods Agreement in 1971... So, since the beginning of "float time," the FTWDI has not been this low...

more...

[54anickel]

81. Closin' time

Dow 13,120.94 15.44 (0.12%)
Nasdaq 2,557.21 2.75 (0.11%)
S&P 500 1,494.07 0.18 (0.01%)
10-yr Bond 4.6980% 0.0140
30-yr Bond 4.8850% 0.0170
NYSE Volume 2,732,881,000
Nasdaq Volume 2,143,609,000

4:20 pm : The major averages finished mixed and relatively flat Friday as investors looked lethargic closing out another impressive week of sizable gains fueled by this quarter's busiest week of earnings. Nonetheless, sellers armed with a weak GDP report, a mixed batch of earnings, and surging oil prices tried to fight the market's underlying bullish trend only to come up short, again.

As has been the case throughout the Dow's virtually unabated month-long run into record territory, gains from just a handful of blue chips were just enough to help the average finish higher for the 19th time in 21 tries.

Follow-through momentum in 3M Co (MMM 81.72 +1.27), and Honeywell (HON 54.87 +1.18) soaring 2.2% to a multi-year high, accounted for the bulk of the price-weighted index's advance; but fellow component Microsoft (MSFT 30.08 +0.98) was the day's headliner and Dow's best performer.

Last night, the tech bellwether posted a 65% jump in Q3 profits that were a record amid strong Vista sales and provided reassuring guidance.

A quiet 1.7% surge in shares of Cisco Systems (CSCO 26.99 +0.44), a suggested holding in the Briefing.com Active Portfolio, provided additional sector support. Dell (DELL 25.21 +0.30) was another tech winner, jumping 1.2% after CEO Michael Dell sent an email to the company's employees outlining steps to "re-ignite" growth.

Minimizing the tech sector's performance, though, was weakness across the board from chip stocks after Broadcom (BRCM 33.40 -1.46) said it has limited visibility into near-term results. That news ran counter to what larger competitor Texas Instruments (TXN 34.79 -0.37) said earlier in the week. The PHLX Semiconductor Sector Index surged 3.1% on Tuesday after TXN cited improved demand predicated on the end to last year's inventory correction.

The biggest surprise of the day was the economically-sensitive Industrial sector's ability to shrug off a weaker than expected advance read of 1.3% on Q1 GDP. While the data served as a reminder that the decent earnings trends for Q1 may not continue into Q2 and Q3, investors already anticipating signs of a slowdown and perhaps another round of supportive M&A news come Monday found just enough momentum to look past the dated nature of the GDP data.

The Industrial sector got its biggest lift from a 2.7% surge in Dow component General Electric (GE 36.79 +0.95), which moved after a Citigroup analyst said GE should spin off its NBC and GE Money units.

Environmental Services was the day's best performing S&P industry group (+7.6%) after Waste Management (WMI 38.21 +2.86) followed up a 19% rise in Q1 profits by raising its full-year forecasts. Construction & Farming was another source of sector support, getting a huge lift from Cummins Inc. (CMI 96.15 +10.16). The stock soared 12% to an all-time high after it handily beat expectations and boosted its FY07 profit outlook. DJ30 +15.44 NASDAQ +2.75 SP500 -0.18 NASDAQ Dec/Adv/Vol 1836/1166/2.11 bln NYSE Dec/Adv/Vol 1854/1392/1.40 bln

3:30 pm : The indices are off their best levels going into the close, but the Dow is still on track to close at a new all-time high for a third straight day. Even though 16 of its 30 components are still in the red, solid gains from just five blue chips (e.g. CAT +1.2%, GE +3.5%, HON +2.2%, MMM +1.6%, and MSFT +4.1%) are providing enough of an offset. They account for 47 Dow points.

Further underscoring the market's focus on large-cap names today are declines on the S&P 400 MidCap Index and Russell 2000 small-cap index; but with both closing in record territory yesterday and posting respective April gains of 4.6% and 3.8%, it hasn't been surprising to see them succumb to some modest profit taking. DJ30 +20.23 NASDAQ +4.12 R2K -0.5% SP400 -0.3% SP500 +0.30 NASDAQ Dec/Adv/Vol 1812/1180/1.76 bln NYSE Dec/Adv/Vol 1814/1406/1.17 bln



Have a great weekend :hi:

[citizen snips]

82. FDA Rejects Merck's Vioxx Successor

TRENTON, N.J. (AP) -- The Food and Drug Administration rejected Merck & Co.'s request to market a successor to its withdrawn arthritis drug Vioxx in the United States, the drugmaker said Friday.

The decision was widely expected, after a panel of FDA advisers two weeks ago voted 20-1 against approving the drug, Arcoxia.

Arcoxia is in the class of anti-inflammatory drugs called Cox-2 inhibitors, which are touted as less likely to cause stomach bleeding or have other dangers, but they have been linked to heart risks. It is the same class of drugs as Vioxx, which has become a poster child for drug safety problems.

Merck pulled Vioxx from the market in September 2004 after research showed it doubled risk of heart attacks and strokes. That triggered an avalanche of lawsuits -- more than 27,000 so far -- and a nosedive for Merck's stock price, which has since rebounded.

more...
http://biz.yahoo.com/ap/070427/merck_vioxx_successor.html?.v=17

[citizen snips]

83. Burger King Swings to 3Q Profit

MIAMI (AP) -- Burger King Holdings Inc. said Friday it swung to a profit in the third-quarter, fueled by sales of new sandwiches at the second-largest hamburger chain.

Net income for the quarter ended March 31 totaled $34 million, or 25 cents per share, versus a loss of $12 million, or 11 cents per share during the year-ago period.

Revenue at the Miami-based company grew 9 percent to $539 million, from $495 million a year ago.

Analysts polled by Thomson Financial expected net income of 22 cents on revenue of $535 million.

more...
http://biz.yahoo.com/ap/070427/earns_burger_king.html?.v=14

[citizen snips]

84. Chevron 1Q Profit Surges 18 Percent

SAN RAMON, Calif. (AP) -- Coming off three straight years of record profits, Chevron Corp. on Friday reported its earnings surged yet again to start 2007 as the oil company cashed out of a Netherlands venture and cashed in on lucrative refining margins that have contributed to high gasoline prices.

The 18 percent increase in Chevron's first-quarter profit delivered another reminder of the oil industry's moneymaking prowess while motorists dig deeper into their pocketbooks to fuel their cars. The economic disparity has renewed calls for a windfall tax on the industry to help raise money for alternative energy.

Chevron earned $4.7 billion, or $2.18 per share, during the first three months of the year, compared with net income of $4 billion, or $1.80 per share, at the same time last year.

The San Ramon-based company turned a higher profit despite a 12 percent decline in revenue, to $48.2 billion during the period.

more...
http://biz.yahoo.com/ap/070427/earns_chevron.html?.v=23

[citizen snips]

85. Waste Management 1Q Profit Rises 19 Pct

HOUSTON (AP) -- Waste Management Inc., the nation's largest garbage hauler, said Friday its first-quarter profit rose 19 percent, helped by revenue growth at its commercial collection and landfill businesses and improved cost controls. Its share price rose sharply.

Profit rose to $222 million, or 42 cents per share, from $186 million, or 34 cents per share, a year ago, even as revenue fell slightly to $3.19 billion from $3.23 billion a year earlier.

The company said it incurred an after-tax charge of $6 million, or 1 cent per share, in the most recent quarter related to restructuring.

Results topped Wall Street projections for earnings of 36 cents per share on $3.16 billion of revenue, according to analysts polled by Thomson Financial.

more...
http://biz.yahoo.com/ap/070427/earns_waste_management.html?.v=72

[citizen snips]

86. Hot Stocks of the Week: MedImmune, IBM

NEW YORK (AP) -- MedImmune Inc. started the trading week on a strong note as Wall Street absorbed news that AstraZeneca PLC will buy the drug maker for $15.6 billion.

MedImmune's stock spiked $8.56, or 17.8 percent, to end at $56.57 on the Nasdaq Stock Market Monday, after hitting $58.85, their highest point since December 2000, during the session. Volume shot up to around 148 million shares, more than 18 times its average.

Shares added a penny to the high Tuesday as volume remained heavy, but edged slightly lower during the week, when a number of analysts said the British drug maker overpaid for the biotechnology company.

They once again peaked on Friday, at $56.92, before edging back to close at $56.81, up 18.3 percent for the week.

more...
http://biz.yahoo.com/ap/070427/hot_stocks_of_the_week_mover.html?.v=1

[citizen snips]

87. Alltel 1Q Profit Falls

LITTLE ROCK, Ark. (AP) -- Wireless voice and data communications company Alltel Corp. said Friday its first-quarter profit fell 23 percent from year-ago results that were boosted by income from company's traditional phone business which has since been spun off.

Its income from continuing operations rose, however, but still missed Wall Street expectations.

Quarterly earnings after paying preferred dividends decreased to $230.1 million, or 64 cents per share, from $297.4 million, or 77 cents per share, during the same period last year.

Year-ago results included income of $163.2 million from the company's traditional phone operations, which were spun off in July 2006 to form Windstream Corp.

more...
http://biz.yahoo.com/ap/070427/earns_alltel.html?.v=6

[citizen snips]

88. Sector Glance: Internet Search

NEW YORK (AP) -- Shares of Internet Search stocks traded mixed Friday, as shares of Chinese search engine operator Baidu.com Inc. surged after the company said its first-quarter profit more than doubled due to increased advertising sales and traffic growth.

The company also forecast stronger-than-expected second-quarter sales after the closing bell Thursday.

On Friday, Baidu.com was upgraded by a host of analysts, while others increased their earnings estimates on the company.

The company's American depositary shares gained as much as $23.43, or 21.4 percent, to $132.80 on the Nasdaq Stock Market in Friday trading. During the past year the stock has traded between $57 and $134.10.

more...
http://biz.yahoo.com/ap/070427/sector_glance_internet.html?.v=1

[citizen snips]

89. Microsoft Among Stock Market's Movers

NEW YORK (AP) -- Stocks that were moving substantially or trading heavily Friday on the New York Stock Exchange and Nasdaq Stock Market:

NYSE

Waste Management Inc., up $2.78 at $38.13.

The nation's largest garbage hauler reported a 19 percent increase in its first-quarter earnings in part because of growth at its commercial collection and landfill businesses.

Goodyear Tire & Rubber Co., up $1.91 at $34.41.

more...
http://biz.yahoo.com/ap/070427/wall_street_stocks.html?.v=2

[citizen snips]

90. Sector Glance: Drug Store Chains

NEW YORK (AP) -- Drug store stocks mainly slipped Friday, but a SunTrust Robinson Humphrey analyst gave a boost to Longs Drug Stores Corp. when he upped his rating on the Walnut Creek, Calif.-based chain.

Analyst David Magee revised his rating to "Buy" from "Neutral," based his expectation the company's turnaround will continue to be successful. Magee said he believes the company can now compete better in a more competitive marketplace, as same-store sales -- or sales at stores open at least a year -- continue to improve. Longs Drug Stores shares reached an all-time high of $56.97 during the session, surpassing the prior high of $54.99. Shares closed up $2.24, or 4.2 percent, at $56.11 on the New York Stock Exchange.

Here is how some other key drug store stocks did Friday in NYSE trading:

CVS/Caremark Corp., down 13 cents to close at $36.73.

more...
http://biz.yahoo.com/ap/070427/sector_glance_drug_stores.html?.v=1

[citizen snips]

91. Sector Glance: Chip Stocks Slip

NEW YORK (AP) -- Semiconductor stocks edged down in Friday's session, dragged lower by disappointing earnings results from a handful of companies such as silicon wafer maker MEMC Electronic Materials Inc. and Broadcom Corp.

Shares of chip maker Advanced Micro Devices Inc. closed down modestly after the company, which has been strapped for cash since its acquisition of ATI Technologies, completed a $2.2 billion offering of convertible notes. The company expects to reap $2.17 billion in proceeds from the offering, after fees, discounts, and offering expenses.

Elsewhere in the sector, Broadcom Corp. shares took a hit after the company posted a 48 percent decline in first quarter income. The company also said it had limited visibility due to mixed forecasts from a few large customers.

The Philadelphia Semiconductor Sector Index closed down 7.8 points, or 1.5 percent, to 498.67. Still, the index closed up 2.3 percent over the course of the week.

more...
http://biz.yahoo.com/ap/070427/sector_glance_semiconductors.html?.v=1

[citizen snips]

92. Sector Glance: Big Retailers Fall

NEW YORK (AP) -- Shares of many of the nation's big-format stores, including department stores and discounters, closed lower Friday, amid weaker-than-expected estimates for first-quarter economic growth and disappointing consumer sentiment.

The Commerce Department reported that U.S. gross domestic product, the broadest barometer of the economy, grew at an annual rate of 1.3 percent in the first quarter, its slowest pace in four years. The government data also showed that pricing pressures were rising -- fueling worries that U.S. consumers may pull back on spending.

Meanwhile, the Reuters/University of Michigan consumer sentiment index rose to 87.1 in April from a preliminary reading of 85.3, but was still down from 88.4 in March.

Here is how some key large-format stores closed on Friday:

Wal-Mart Stores Inc., down 36 cents at $48.34

more...
http://biz.yahoo.com/ap/070427/sector_glance_big_stores.html?.v=1

[citizen snips]

93. Sector Glance:Oilfield Service Providers

NEW YORK (AP) -- Oilfield service provider stocks rose Friday, as National Oilwell Varco said its first-quarter profit more than doubled.

National Oilwell Varco credited greater demand for its drilling rig products for the better-than-expected earnings and revenue. The overall Philadelphia Oil Service Sector Index gained 1.84 to close at 235.08.

Also helping the sector was a barrel of crude pushing up $1.40 to settle at $66.46 per barrel, and natural gas gaining 22.9 cents to settle at $7.831 per 1,000 cubic feet, both on the New York Mercantile Exchange. Higher oil and gas prices makes drilling more attractive.

Here is how some key oilfield service providers closed on Friday:

National Oilwell Varco, up $3.84, or 4.6 percent, at $86.65

more...
http://biz.yahoo.com/ap/070427/sector_glance_oilfield_services.html?.v=1

[citizen snips]

94. Sector Glance: Fast Food Stocks Mixed

NEW YORK (AP) -- Fast food stocks were mixed Friday after Burger King Corp., the world's second-largest burger chain, said it swung to a profit in its fiscal third quarter.

Boosted by sales of new sandwiches, revenue at the fast food chain operator rose 9 percent. The company said a new breakfast value menu helped add to the final sales numbers.

Rival Wendy's International Inc. has said it plans to launch its own breakfast value menu in most of its North American restaurants by next year.

Here is how some key fast food stocks did on Friday:

McDonald's Corp., down 28 cents at $48.95.

more...
http://biz.yahoo.com/ap/070427/sector_glance_fast_food.html?.v=1

[citizen snips]

95. Sector Glance: Telecom

NEW YORK (AP) -- Some of the largest telecom carriers saw their shares inch lower on Friday, after Alltel Corp. posted first-quarter results below Wall Street's expectations.

The company, which is the subject of takeover speculation, was tight-lipped about its ongoing "strategic review." Bear Stearns analyst Philip Cusick thinks Verizon and AT&T "would rather let AT remain a stand-alone company than buy it above current prices."

Alaska Communications Systems Group Inc., meanwhile, saw its stock jump to a record high thanks to solid first-quarter results.

Verizon Communications Inc. reports its quarterly results on Monday.

Here is how some shares in the sector performed on Friday:

AT&T Inc., down 32 cents at $38.64.

more...
http://biz.yahoo.com/ap/070427/sector_glance_telecom.html?.v=1

[citizen snips]

96. Sector Glance: Apparel Retailers Fall

NEW YORK (AP) -- Shares of apparel retailers fell on Friday after the Commerce Department reported that the U.S. gross domestic product, the broadest measure of the economy, grew at an annual rate of 1.3 percent in the first quarter, its slowest pace in four years.

The figure was below the average economist forecast and down sharply from 2.5 percent in the previous quarter.

Here is how some apparel retailers closed Friday:

American Eagle Outfitters Inc., down 53 cents at $29.93

more...
http://biz.yahoo.com/ap/070427/sector_glance_apparel_retailers.html?.v=1

[citizen snips]

97. Soybeans Rise, Grains Mostly Lower

CHICAGO (AP) -- Soybean futures advanced and grains mostly fell Friday on the Chicago Board of Trade.

Wheat for May delivery fell 6 1/2 cents to $5.00 1/2 a bushel; May corn fell 1/2 cent to $3.64 1/4 a bushel; and May oats rose 1 1/2 cent to $2.65 a bushel. May soybeans rose 4 3/4 cents to $7.23 a bushel.

Beef futures increased while pork declined on the Chicago Mercantile Exchange.

June live cattle rose .57 cent to 93.27 cents a pound; May feeder cattle rose .40 cent to $1.0855 a pound; May lean hogs fell .62 cent to 74.45 cents a pound; May pork bellies fell 2.20 cents to $1.0095 a pound.

http://biz.yahoo.com/ap/070427/board_of_trade.html?.v=2

[citizen snips]

99. S&P 500 Leaders & Laggards: UIS,CMI

NEW YORK (AP) -- Unisys Corp. helped drag the Standard & Poor's 500 lower Friday, as the stock fell for the second consecutive session following its company's first-quarter report.

Unisys shares were down 39 cents, or 4.7 percent, to close at $7.90 on the New York Stock Exchange.

The S&P 500 Index declined 18 cents to 1,494.07.

OfficeMax Inc. also slipped after a Bear Stearns analyst cut his rating on the office supplies retailer, saying the stock price is too high.

more...
http://biz.yahoo.com/ap/070427/s_p_500_laggards.html?.v=1

[citizen snips]

100. Treasury Bond Prices End Lower

NEW YORK (AP) -- Weaker-than-expected first-quarter growth proved to be little help to the Treasury market Friday, which closed the session modestly lower after a volatile morning.

At 5 p.m. EDT, the 10-year Treasury note was up 31 cents per $1,000 in face value, or 1/32 point, from its level at 5 p.m. Thursday. Its yield was unchanged at 4.70 percent.

The 30-year bond fell 1/32 point. Its yield was unchanged at 4.88 percent.

The 2-year note rose 1/32 point. Its yield, which moves in the opposite direction, fell to 4.66 percent from 4.68 percent.

more...
http://biz.yahoo.com/ap/070427/bonds.html?.v=4

[citizen snips]

101. DJIA Leaders & Laggards: MSFT,GM

NEW YORK (AP) -- Microsoft Corp.'s strong third-quarter report helped lift the Dow Jones industrial average to a higher close Friday.

The 30-stock index rose 15.44, to 13,120.94.

Shares rose $1.02, or 3.5 percent, to end at $30.12 on the Nasdaq Stock Market, as sales of Microsoft's new Windows Vista operating system and Office 2007 suite lifted quarterly earnings.

General Electric Co. rose $1, or 2.8 percent, to close at $36.84 on the New York Stock Exchange. A Citigroup analyst suggested the conglomerate should address its stagnant share price by selling its entertainment, real estate and financial segments.

more...
http://biz.yahoo.com/ap/070427/djia_laggards.html?.v=1