STOCK MARKET WATCH, Monday 13 December

[ozymandius]

Monday December 13, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 4 YEARS, 38 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 2 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 56 DAYS
DAYS SINCE ENRON COLLAPSE = 1117
Number of Enron Execs in handcuffs = 19
Recent Acquisitions: Ken Lay
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

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AT THE CLOSING BELL ON December 10, 2004

Dow... 10,543.22 -9.60 (-0.09%)
Nasdaq... 2,128.07 -0.94 (-0.04%)
S&P 500... 1,188.00 -1.24 (-0.10%)
10-Yr Bond... 4.16% -0.01 (-0.12%)
Gold future... 435.30 -1.90 (-0.44%)





GOLD, EURO, YEN, Dollars and Loonie

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PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

---

[ozymandius]

1. WrapUp by Tim W. Wood THE DOW REPORT- The Kondratieff Wave

Today, let’s review some of the items that commonly unfold as the K-wave winter sets in. The K- wave is an economic cycle of sorts that is said to be 56 years in duration but has varied from 47 to 60+ years. In November 1935 N.D. Kondratieff wrote in The Review of Economic Statistics, an article titled “The Long Waves in Economic Life.” In this article Mr. Kondratieff states, “The waves are not exactly the same length, their duration varying between 47 and 60 years.” The K-wave can be thought of as having an upside leg, a plateau and a downside leg. In the article by Mr. Kondratieff, he clearly ties the topping of the inflationary leg of the wave to the peaking of interest rates and commodity prices and the bottoming of the wave to the bottoming of interest rates and commodity prices. The upside or inflationary leg of the K-wave can be further divided into two phases. The first phase is marked by mild or beneficial inflation and is also often referred to as K-wave Spring. This was the period from the late 1940’s to 1966. The second phase of the inflationary leg is marked by runaway inflation and this was the period from 1966 to 1981. This period is also known as K-wave Summer.

The third phase, or the “plateau” of the K-wave, is then marked by a stabilization of prices. This was the period of the very early 1980’s. Then comes the downside piece of the K-wave, which is marked by deflationary forces. This downside leg of the K-wave can also be divided into two phases. The first phase is marked by beneficial deflation while the second phase is marked by runaway deflation. History shows us that the trend for stocks is up as we move into the beneficial deflationary phase of the K-wave. This is the period known as K-wave Fall, which began in approximately 1982 and concluded in 2000. We are now in the last phase of the K-wave. This phase will conclude with runaway deflation and is known as K-wave Winter. This Winter season should bottom around 2010. Coincidentally, this also coincides closely with my timing for the Bear market bottom. From David Knox Barker’s book The K- Wave, is a brief list of the events that have historically marked the Winter season:

-cut-

This is only beginning as the average consumer is now holding record high levels of debt. Since the great liquidity infusion that Greenie introduced, debt levels have continued to swell. This debt will be purged from the system at some point in the future. You do not go through K-wave winter without purging the debt.

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

Much more - including definitions of the various aspects of K-wave theory.

[54anickel]

4. I read this yesterday - it's quite chilling.

I find the K-wave theory fascinating, as I have stated here before. There are so many "unknowns" out there. I still think it would be a hoot if all these "money managers" with their planning and theories were found to be meaningless and there is a larger, more natural force at work in the economy that eventually over-rides their plans. Then again, I doubt the K-wave would be looked at by any of the pundits as the reason.

His reminder of the bull market sentiment from Nov 1929 to Apr of 1930 is troublesome to me, as I've been thinking that we'd have the usual year-end rally, followed by higher profits being reported (thanks to the declining dollar) in the first quarter after which reality starts to sink in. Just a guess on my part though. Who knows, this bull could last forever. :shrug:

[ozymandius]

2. Good morning!

:donut: :donut: :donut:

I have had some heavy duty deadlines on little projects over the past week. My tardiness on completing some projects has been spurred by two job interviews. Not complaining.

Today is going to be like last week. I have to deliver to products today and follow up on last week's interviews. So I wish you all an entertaining day at the races.

I'll check in when time is available.

Best to you,

Ozy :hi:

[54anickel]

3. Good morning Ozy and all. Wishing you the best on those interview

follow ups! I'll keep you in my thoughts, may good things come your way soon. :hi:

[54anickel]

5. Dollar Ends 3-Day Rally; Trade, Current Account Gaps May Widen

http://www.bloomberg.com/apps/news?pid=10000103&sid=aKTgK1Y5e8S8&refer=us

Dec. 13 (Bloomberg) -- The dollar ended a three-day advance as some traders took advantage of last week's rally, the first in two months, to renew bets on the currency's decline.

Speculation that government reports this week will show the U.S. trade and current-account deficits widened are undermining support for the U.S. currency, said Niels Christensen, a foreign- exchange strategist in Paris at Societe Generale SA.

``The data should be negative for the dollar,'' said Christensen. ``Last week's correction for the dollar after a two- month drop was inevitable, but it definitely won't last.''

snip>

The trade shortfall widened to $53 billion in October from $51.6 billion in September, a report tomorrow may show, based on the median forecast of 50 economists surveyed by Bloomberg News. The U.S. current-account shortfall grew to $171 billion in the third quarter from $166.2 billion in the prior three months, a report Dec. 16 will show, based on a separate poll.

more...

[UpInArms]

6. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 82.40 Change -0.15 (-0.18%)

U.S. in precarious spot over weak dollar

http://www.mercurynews.com/mld/mercurynews/news/editorial/10399568.htm?1c

(free registration or try www.bugmenot.com)

Since the election, the value of the dollar has declined more than 3 percent against the euro to an all-time low -- and it continues to fall. Today's dollar jitters are no surprise; the few Keynesians left in the economics profession have long thought them overdue. Here's why:

We have worn down our trade position in the global economy, becoming dependent for our living standard on the willingness of the rest of the world to accept dollar assets -- stocks, bonds and cash -- in return for real goods and services.

In the late 1990s, the U.S. position was held up by the glamour of the information-technology boom, which brought capital flooding in from more precarious perches in Russia, Asia and other parts of the world. But that too has turned to dust and ashes.

The concentration of our manufactured-goods trade on China and Japan means that those two countries now hold preposterous dollar reserves, and their actions substantially determine the dollar's value.

Chinese and Japanese behavior is constrained by creditors' risk. If they sell too many dollars, the value of the remainder of their portfolio plummets and they inflict losses on themselves. This consideration prompts caution. But if one major player gets wind that others may dump, caution could end. This is exactly analogous to an old-fashioned run on the bank.

Reducing the budget deficit will not save the dollar, contrary to what many Democrats may think. A bank, hit by a panic, cannot save itself by cutting its advertising budget, raising its fees or firing its staff. And once a rush gets going, jacking up interest rates won't stop it, either.

<snip>

The most stunning aspect of these events has been President Bush's insouciance about them. It's almost as if he realizes the awful truth: that the dollar's decline is mainly good for his friends, and bad for those about whom he couldn't care less.

...more...

Talk of debt and taxes and Social (in)Security

http://www.masslive.com/editorials/republican/index.ssf?/base/news-1/1102754887325610.xml

While he didn't say "read my lips," President Bush's statements on Thursday about the chances of increasing payroll taxes to pay for planned reforms in the Social Security system could hardly have been clearer.

"We will not raise payroll taxes to solve this problem," Bush said in the Oval Office following a meeting with the Social Security trustees, who had submitted their annual report on the system's finances.

<snip>

There has been a bit of talk inside Washington of late about trying to find creative ways to borrow a couple of trillion dollars without adding to the government's debt. Some have even suggested - quietly, of course - that the government simply keep it off the books. Their argument is that the trillions are an existing obligation that is being moved from the distant future to the present - and is therefore not new debt.

That's a position they'll try to hold, but it is untenable. Floating a couple trillion dollars in government bonds today creates added real debt. It doesn't matter if it is used to build rocketships to Mars or to pay existing Social Security obligations.

...more...

Sorry I'm late this am - sick kid :(

Have a Great Day Marketeers!

[54anickel]

7. Global: Debating the Dollar (Part I)

http://www.morganstanley.com/GEFdata/digests/20041210-fri.html#anchor0

snip>...Morgan Stanley’s Global Economics team has been actively debating the currency issue and its implications for the world economy. Below are excerpts from a recent roundtable discussion we conducted on the dollar.

Stephen Roach: A $40 trillion world economy is woefully out of balance. This shows up in many forms, but the most glaring sign is an unprecedented disparity between the world’s current account deficits (America) and surpluses (mainly Asia and, to a lesser extent, Europe). The key to a successful global rebalancing hinges critically on tempering the risks of the world’s most serious excesses. For me, that speaks of a shift in the world’s relative price structure — namely, currencies — in order to re-establish a more sustainable equilibrium. That’s where the dollar comes into play. But currency adjustments can’t do it alone. A weaker dollar could also be key in forcing the interest rate adjustments that address the asset-driven excesses of the American consumer — quite possibly the biggest risk factor in today’s US and global economy. If the depreciation of the dollar implies tough adjustments elsewhere in the world — like forcing export-led Asian and European economies to stimulate domestic demand — then that's not such a bad thing either. Global rebalancing is a shared responsibility.

Stephen Li Jen: I think everyone is too sanguine about this de facto competitive devaluation by the US. To me, this is very serious, and a very dangerous policy pursued by the US. I've never heard any central bank telling the world not to buy their assets. But this was essentially what Alan Greenspan said in his Frankfurt speech on November 19. We are now talking about a gradual sell-off in US Treasuries that would take yields on 10-year notes to 5.0%. But if the world really were convinced by Greenspan, why would bond yields stop at 5%? Why should US equities be spared?

Richard Berner: I certainly agree with Stephen Li Jen that it can be a dangerous and risky game for Fed officials even implicitly to talk down the dollar. Chairman Greenspan, himself, is often guilty of believing that he can wave his magic wand to manipulate markets to produce the desired result. History shows that even he is sometimes humbled by the collective wisdom of millions of investors.

I believe that Fed officials would like to promote — if they can pull it off — a shift in the mix of financial conditions that will facilitate rebalancing. That shift entails higher US rates, an associated compression of equity multiples, a tightening of domestic borrowing costs, and a weaker dollar. Officials must have decided that the risks of the current mix of financial conditions, with all of its potential consequences for growing imbalances and prospective abrupt asset price adjustments, were greater than those entailed in a strategy aimed at letting the air out of the dollar in a more orderly way.

By the way, while I agree that having a central banker talk down his/her own currency can be dangerous, I think we’d all agree that it is broadly appropriate — nay, essential — for central bankers to signal their policy intentions. So Greenspan's related comment that market participants should expect rising interest rates is certainly an integral part of today’s Fedspeak.

more...

[54anickel]

15. China Nov. Retail Sales Rise 13.9% From Year Earlier

http://www.bloomberg.com/apps/news?pid=10000080&sid=awFBxYuYkzJo&refer=asia

Dec. 13 (Bloomberg) -- China's retail sales grew 13.9 percent to the second-highest level on record in November as rising incomes spurred consumers to spend more on eating out and decorating their homes.

Sales rose to 496.6 billion yuan ($60 billion) from a year earlier, the Beijing-based National Bureau of Statistics said in a statement on its Web site today. Sales in October rose 14.2 percent to a record 498.3 billion yuan.

Spending at KFC restaurants and B&Q home improvement stores is helping sustain the world's fastest-growing major economy as the government curbs investment in manufacturing to ease shortages of raw materials. President Hu Jintao last month predicted economic growth will slow to 9 percent in 2004 from 9.3 percent last year, avoiding a sudden slowdown in the world's largest consumer of cement and steel.

``Steady growth in consumption will essentially reduce the risk of a hard landing for the whole economy even if investment is slowing down,'' said Qu Hongbin, senior economist at HSBC Holdings Plc in Hong Kong. ``That's why policymakers like to see retail sales picking up.''

Retailers including Yum! Brands Inc., Wal-Mart Stores Inc. and Carrefour SA are opening stores to take advantage of growing affluence in the world's most populous nation. Disposable incomes in urban areas, home to a third of China's 1.3 billion people, rose 7 percent in the first nine months of this year to 7,072 yuan per capita, according to government figures.

more...

[UpInArms]

8. Today's Reports

Dec 13 8:30 AM
Retail Sales Nov
report 0.1%
briefing.com 0.2%
market 0.0%
last report 0.8%
revised 0.2%

Dec 13 8:30 AM
Retail Sales ex-auto Nov
report 0.5%
briefing.com 0.6%
market 0.3%
last report 1.1%
revised 0.9%

Dec 13 10:00 AM
Business Inventories Oct
report -
briefing.com 0.8%
market 0.5%
last report 0.1%
revised -

[UpInArms]

10. U.S. Nov. retail sales up 0.1%; Oct. sales revised up

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38334.3542832639-829638885&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (CBS.MW) -- U.S. retail sales rose 0.1 percent in November, Commerce Department figures show Monday. Excluding autos, retail sales rose 0.5 percent. The gains are slightly firmer than expected. The consensus forecast of Wall Street economists was for November retail sales to be flat and for ex-auto sales to increase 0.3 percent. Sales for October were revised higher than initially forecast. Sales rose a revised 0.8 percent in October, much stronger than the initial estimate of a 0.2 percent increase.

8:30am 12/13/04 U.S. OCT. RETAIL SALES REVISED TO UP 0.8% VS 0.2 PREV.

8:30am 12/13/04 U.S. NOV RETAIL SALES EX-AUTOS UP 0.5% VS 0.3% FORECAST

8:30am 12/13/04 U.S. NOV RETAIL SALES UP 0.1% VS. FORECAST OF NO CHANGE

[UpInArms]

23. Oct. business inventories, sales rise

http://cbs.marketwatch.com/news/story.asp?guid=%7B836293AF%2D58F1%2D4D53%2D896A%2D9A7B310C467B%7D&siteid=mktw

WASHINGTON (CBS.MW - U.S. business inventories rose 0.2 percent in October, well below the strong 1.2 percent gain in sales, a Commerce Department report showed Monday.

The inventory-to-sale ratio, a key measure of intended inventories, slipped to 1.30 in October, matching a record low set in May.

Economists had been expecting inventories to rise 0.5 percent, according to a survey conducted by CBS MarketWatch.

Retail inventories fell 0.6 percent in October, offsetting gains in factory and wholesale inventories. This was the largest decline in retail inventories since August 2003.

October's retail sales rose 0.7 percent, bringing down the retail inventory-to-sales ratio to 1.52 from 1.54 in the prior month.

Excluding autos, retail inventories rose 0.3 percent after rising 0.1 percent in September.

...more...

[54anickel]

9. Central Banks Short-Circuit U.S. Savings?

http://www.reuters.com/newsArticle.jhtml?jsessionid=WIEFLN5DLSYCCCRBAE0CFEY?type=businessNews&storyID=7071360

WASHINGTON (Reuters) - Have Asia's central banks lulled Americans into a false sense of security?

While the collapse in U.S. household savings rates over the past decade to near zero make it appear at first as if American consumers have discarded all caution, economists reckon they are responding rationally to increased wealth.

Housing and equity markets have done workers' saving for them, many argue, freeing families to spend all their income.

But some experts fret that households have not yet rediscovered prudence after what will likely prove an exceptional decade of asset price gains, particularly given looming economic strains from an aging population.

The problem now, they say, is the traditional economic mechanisms -- such as rising borrowing costs -- that would encourage a healthy and gradual normalization of savings behavior have been neutered.

more...

[UpInArms]

12. question for you, 54anickel

If our savings rate is so low, does that not mean that the majority of the people in this country are living paycheck-to-paycheck?

Also, have you looked at the dollar chart at ino this am? Does it look strange to you?

:hi:

[54anickel]

14. Good morning UIA.

Yes, I think many are living check to check, others are making ends meet using credit cards (see the article in post 13), which may be contributing to that check to check issue (making minimum payments).

I know quite a few people in that boat, gotta have it now, easy credit terms, before you know it their check is spoken for, nothing left over to save. Those that make enough to pay might pay cash instead, but still gotta have it and gotta have it now.
Edit to add: They figure their house and equities are doing the building of a savings for them.

As for INO, yeah, looks like a scatter chart, bouncing all over. Looks like someone/something is trying hard to go against the trend to get closes over 82.4, but it just slides right back on down. The bids up just aren't stickin' today.

[54anickel]

21. For Savings, Nowhere to Go but Up?

http://www.latimes.com/business/la-fi-petruno12dec12,1,7054909.column?coll=la-headlines-business

snip>

Start with the Federal Reserve Board. Apparently petrified about the risk of a Japanese-style deflationary bust in the United States after the stock market cracked in 2000, the central bank slashed short-term interest rates in 2001 to the lowest levels in a generation.

By mid-2003, still unsatisfied that deflation risks had dissipated, the Fed cut yet again, leaving its benchmark short-term rate at 1% — the lowest since 1958.

For many Americans, saving money has primarily meant putting it in a government-insured bank account. But by hacking rates so low in recent years, the Fed sent a clear message: Go ahead and spend, because saving (at least in the classic sense) would earn you little.

In mid-2001, the average yield on one-year savings certificates at banks and thrifts was 4.09%. By mid-2003, that average was 1.16%. What kind of savings incentive was that?

snip>

Immediately after the attacks, the overriding concern for the economy was that Americans would stop spending and instead squirrel away whatever they could to buffer themselves and their families in a world suddenly turned dark with fear.

They did retreat from spending — for a few weeks. But the popular refrain then became that people should get on with their lives, because by cowering the nation would hand victory to the terrorists.

more...

[UpInArms]

11. pre-opening blather

briefing.com

9:16AM: S&P futures vs fair value: +7.2. Nasdaq futures vs fair value: +14.0. Futures market continues to tick higher ever so slightly, suggesting a higher open for equities, as a positive bias remains intact following strong Retail Sales figures and corporate merger news

9:00AM: S&P futures vs fair value: +7.0. Nasdaq futures vs fair value: +13.0. Futures market versus fair value (Mar05 contract) continues to indicate a higher open for the indices... The slight increase in November retail sales data, signaling a strong holiday season, have acted as a stabilizing influence for traders in pre-market action

8:33AM: S&P futures vs fair value: +5.3. Nasdaq futures vs fair value: +10.5. Futures market moves slightly higher following better than expected November retail sales data (+0.1% overall and +0.5% ex-auto versus consensus of 0.0% and +0.3%, respectively)... Current indications still suggest gains for the cash market at the start of trading

8:20AM: S&P futures vs fair value: +4.3. Nasdaq futures vs fair value: +9.5. Still shaping up to be a modestly higher open for the cash market... Other merger news includes Dow component Honeywell's (HON) $2.4 bln offer for Novar... HON also confirms Q4 & FY04 guidance and issues FY05 outlook in line with expectations... At 8:30 ET, the Department of Commerce will release November Retail Sales (0.0% consensus) and Retail Sales ex-auto (0.3% consensus)

8:00AM: S&P futures vs fair value: +4.2. Nasdaq futures vs fair value: +9.0. Futures market suggesting a higher open for the cash market... Factors contributing to the positive bias include a slew of corporate merger activity...

ino.com

The March NASDAQ 100 was higher overnight as it continues to consolidate above initial support marked by the 10-day moving average crossing at 1612.70. Stochastics and the RSI are turning neutral hinting that sideways prices are possible near-term. If March renews this fall's rally, weekly resistance crossing at 1717 is the next upside target. Closes below the 20-day moving average crossing at 1597.40 are needed to confirm that a short-term top has been posted. The March NASDAQ 100 was up 5.00 pts. at 1622 as of 5:47 AM ET. Overnight action sets the stage for a steady to firmer opening by the NASDAQ composite index later this morning.

The March S&P 500 index was higher overnight as it consolidates above initial support marked by the 10-day moving average crossing at 1188.60. Stochastics and the RSI have turned bullish again hinting that sideways to higher prices are possible near-term. If March renews this fall's rally, weekly resistance crossing at 1265 is the next upside target. Multiple closes below last Thursday's low crossing at 1175.70 would confirm that a short-term top has been posted. The March S&P 500 Index was up 1.60 pts. at 1193.40 as of 5:50 AM ET. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

[54anickel]

13. The Poor Have More Things Today -- Including Wild Income Swings

http://www.latimes.com/business/la-fi-poor12dec12,1,5929236.story?coll=la-headlines-business

snip>

The family struggles to meet its monthly bills but has taken on a mountain of credit card debt. They have used plastic to buy a large-screen TV and other luxuries but have also relied on it to cover bare necessities such as rent and emergency-room visits.

"That's why I'm really poor even though I work so hard," Rojas said with a rueful laugh.

Some see circumstances like Rojas' as testament to the economic strides that America has made over the last generation, rather than a reflection of its failures.

"We've won the War on Poverty," asserted Robert Rector, an influential analyst with the Heritage Foundation, a conservative Washington think tank. "We've basically eliminated widespread material deprivation." :eyes:

snip>

Indeed, today's working poor are experiencing an extreme version of the economic turbulence that is rocking families across the income spectrum. And the cause, no matter people's means, is the same: a quarter-century-long shift of economic risk by business and government onto working families.

Protections that Americans, especially poor ones, once relied on to buffer them from economic setbacks — affordable housing, stable jobs with good benefits, union membership and the backstop of cash welfare — have shriveled or been eliminated. These losses have been only partially offset by an expansion of programs such as the earned-income tax credit for the working poor and publicly provided healthcare.

more...

[UpInArms]

16. 10:02 EST market numbers

Dow 10,573.15 +29.93 (+0.28%)
Nasdaq 2,142.87 +14.80 (+0.70%)
S&P 500 1,191.85 +3.85 (+0.32%)
10-Yr Bond 4.168% +0.012

NYSE Volume 15,146,000
Nasdaq Volume 68,318,000

[54anickel]

17. US chief executives stem increases in pay

HA!, sure I bet their hurting real bad now - NOT! Sheesh, their still getting a freakin raise - of "just" 5%! Poor babies.

http://news.ft.com/cms/s/05dd7564-4c80-11d9-835a-00000e2511c8.html

Criticism of high levels of executive pay is prompting restraint in US boardrooms, according to the first glimpse of compensation data for 2004.

The preliminary findings show salary and bonuses paid to chief executives of large US companies rose just 5 per cent this year, compared with an increase of 7.2 per cent in 2003 and 10 per cent in 2002.

Full analysis is not possible until companies publish proxy statements in the spring, but early numbers are shared privately among many companies to help compensation committees determine pay rates for 2005.

Compensation consultant Pearl Meyer, which gathered the confidential data from 70 large companies, concludes that pay awards have tended to be less generous in 2004 than before.

It calculates that base salaries fell 2 per cent to an average of $1.2m while annual bonuses rose 8 per cent to $2.8m. Total remuneration, including shares, options and grants, rose 5 per cent, in spite of a continued switch away from controversial option schemes in favour of restricted stock awards.

more...

[54anickel]

18. A New Way to Hedge Your Home's Paper Profit

http://www.nytimes.com/2004/12/12/business/yourmoney/12real.html?adxnnl=1&oref=login&adxnnlx=1102950607-ebMaDMD4gTxhze+ErOmAYQ

IF you have owned a home for several years, you may be sitting on a sizable increase in equity. And if you are worried that the run-up in housing prices can't last much longer, you may think the only choice is to call a broker, rent a moving van and head for the (less expensive) hills.

But through an increasing number of new investments, you may be able to limit future erosion of your home's value.

Macro Securities Research, a company affiliated with Robert J. Shiller, the Yale economist, has reached an agreement with the Chicago Mercantile Exchange to list pairs of derivative instruments that are essentially index funds linked to home prices in certain markets. One instrument in each pair will rise as its market index rises; the other will rise as the same index falls. That will let investors bet on the direction of housing prices. Similar, but less sensitive, vehicles are being offered by HedgeStreet, a firm in San Mateo, Calif., that offers small-scale derivatives speculation online.

For homeowners looking for alternatives to the risks and complications of derivatives trading, there are also insurance policies that pay out if home prices fall, but they are only available in certain areas, and the conditions for collecting are highly restrictive.

In fact, none of these approaches are likely to provide anything close to a perfect hedge, eliminating all risk of loss. And while the options available to nervous homeowners are growing in number and sophistication, some advisers warn that they may provide minimal protection from the vicissitudes of the real estate market.

more...

[54anickel]

19. Lenders get creative, again

http://www.latimes.com/business/la-re-lew12dec12,1,5734873.story?coll=la-headlines-business

snip>

According to Venezia, these kinds of transactions are gaining in popularity. But there are drawbacks. For one thing, your relative's money could be tied up for a long time, which means he or she could miss out on an even more lucrative investment. Or you could pay off the loan at a time when the market is paying less than it is now. And what happens if there's a family spat?

Then there's the paperwork. But that's where a firm like CircleLending comes in. The company draws up standard mortgage documents, records the deed, structures a payment schedule, manages the payment process and provides summary reports to both parties for tax purposes — all for a fee, of course.

The intra-family mortgage is a private version of pledged-asset mortgages offered by several big brokerage houses. These loans allow well-heeled borrowers to use their stock portfolios as collateral for buying a home. Instead of selling off some or all of their holdings to get cash for a down payment and closing costs, clients are permitted to leverage their investment portfolios as a guarantee for a loan.

snip>

Another loan type is a delayed-payment mortgage that's structured like this: For the initial six months, pay nothing. For the next 9 1/2 years, pay only the interest. Then, for the final 20 years, the loan is fully amortized — that is, payments are based on the entire loan balance — until maturity.

snip>

Pay-option loans are not new, either. For some time now, Countrywide Home Loans has been offering loans in which borrowers have four different choices every month. The company has seen "tremendous consumer interest" in increased payment flexibility, said Country- wide's Vijay Lala, executive vice president of product development.

Yes, the mortgage business is nothing if not innovative. Lenders have come up with loans for police officers, firefighters, teachers, soldiers, nurses and people with disabilities. One firm even has loan options aimed at pilots, flight attendants and airline service staff who have agreed to take major wage cuts or have lost their jobs altogether.

more...

[54anickel]

20. 'Haves' have even more, so luxury sales booming

http://www.chron.com/cs/CDA/ssistory.mpl/business/2942700

snip>

Michael Niemira, chief economist for the International Council of Shopping Centers, said the luxury sector is expected to be the big winner during the holidays for several reasons.

"People in the middle have moved to higher price points, better-quality goods. In a sense, there is a lopsided demand toward the top end," he said. "The highest income strata spends four times what the lowest strata does. So if you want to err on a side, you want to err on the side that has the money."

Total retail sales for November rose by 1.7 percent, on a year-over-year basis, according to figures released Dec. 2 by the ICSC.

But in the luxury segment, sales increased by 5.2 percent compared with 1 percent for discount retailers and 2 percent for department stores.

Top-end retailers are moving away from the entry-point merchandise and more toward the one-of-a-kind items with price tags that rebuff all but the well-heeled.

snip>

Nonwage income up

Those consumers also have been helped by a rise in nonwage income from interest and dividends in the past year. In October, dividend income rose 9.2 percent, he said, and interest income was up 2.4 percent.

more...

[54anickel]

22. Princely finance and taxation

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=38673

One would have hoped that financial rip-offs committed by medieval princes would have been permanently shelved when liberal enlightenment ended the divine right of kings.

Recent imperious announcements by Messrs. Greenspan and Bernanke to use the "printing press" to inflate anything they can should be considered startling only in the resort to honesty. Euphemisms for currency depreciations started with the original promoters of the Fed and the tout was that a "flexible" currency would prevent serious financial contractions.

Regrettably, since 1914 there have been many financial crises and the dollar has lost 90% of its purchasing power. This is particularly ironical as the key regular ones have not been prevented. These would be the 1920-1921 and 1990-1991 examples that ended a long period of vigorous economic expansion and the post-1929 and post-2000 crises that ended, in such a costly fashion, a "perfectly" managed new financial era. Recall the "Goldilocks" pitch.

Nineteenth Century liberals, so rational and principled in their views, could not have imagined the greedy craft developed by many modern governments in confiscating private savings earned by productively working citizens. Are we seeing medieval financial tyranny replicated by today's proponents of the divine right of bureaucrats? A look at history provides perspective.

more...

[UpInArms]

24. 11:25 EST numbers and blather

Dow 10,559.77 +16.55 (+0.16%)
Nasdaq 2,132.49 +4.42 (+0.21%)
S&P 500 1,190.35 +2.35 (+0.20%)
10-Yr Bond 4.150% -0.006

NYSE Volume 495,712,000
Nasdaq Volume 845,478,000

11:00AM: Indices are off their highs, but spirited leadership among several industry groups have kept a positive bias intact... Virtually every sector showed gains in the early going, following positive Retail Sales data and encouraging M&A activity, but some early profit taking has knocked a couple of groups lower... Still showing strength, however, are software (+2.8%), hardware (+1.0%) and semiconductor (+0.8%) while telecom service, energy, materials and financial have also seen modest buying interest...

Areas under pressure early on have been airline, networking, biotech, retail, and consumer staples...NYSE Adv/Dec 1725/1239, Nasdaq Adv/Dec 1523/1301

10:30AM: Stocks continue to hold their own and sport solid gains, as investors shrug off dated inventories data... October Business Inventories came in at the top of the hour, posting a 0.2% increase versus expectations of +0.5%... While a 15th consecutive monthly gain was realized, growth was weaker than average growth of 0.6% over the last three months... However, as a somewhat lagging indicator of the manufacturing process, the data has had little influence over the market's overall direction...NYSE Adv/Dec 1774/1103, Nasdaq Adv/Dec 1622/1103

10:00AM: Major indices holding steady in positive territory as ongoing merger uncertainty finally becomes clearer... Oracle's (ORCL 14.44 +1.16) 18-month long merger negotiations to acquire rival PeopleSoft (PSFT 26.42 +2.47) have finally culminated in a mutual agreement... ORCL, which also reported better-than-expected Q2 earnings of $0.16 (consensus was $0.13) earlier and guided Q3 EPS of $0.14-0.15, in line with analysts' expectations, will pay $26.50 for each PSFT share, or about $2.50-a-share more than its previous "best and final" offer...

[54anickel]

25. Sheesh, what's with gold? n/t

[UpInArms]

27. it looks like the dollar is sinking

but the ino.com chart is stuck (weirdest looking chart I have witnessed) - if you look on the kitco.com page, it shows the dollar down .34 which would put it at 82.21 - gold is definitely pushing higher this morning - along with crude

[54anickel]

28. Huh, INO has the buck stuck at 82.35, but kitco is already back up to

82.42. Sure is seeing some extreme movement in both directions. :shrug:

[UpInArms]

29. the kitco number is a "futures"

to get the "current" reading, use the "change" number and add or subtract from the "settle" number

today's "settle" number is 82.55

"change" at kitco is -.30

making the "current" number 82.25

Was that confusing enough for you?

[54anickel]

31. Ahh, thanks. Guess I should read what I'm looking at more carefully.

INO chart appears to have "died" around 9:00 am. Though it does say last trade 82.25

Anyway, yes, that was confusing enough for me. Please no more! Things are confusing enough as it is.

[UpInArms]

26. Battle between Oracle and Peoplesoft Ends (6,000 jobs to go?)

http://abclocal.go.com/kabc/news/121304_nwAP_oracle.html

REDWOOD SHORES — After months of bitter wrangling, a sweeter offer by Oracle has ended its 18-month hostile takeover attempt of PeopleSoft.

Redwood Shores-based Oracle brought an end to the hostilities by improving its all-cash offer by ten percent to 26-dollars-and-50 cents per share.

<snip>

In finally taking over PeopleSoft, Oracle will become the world's second largest maker of business applications software.

<snip>

But the fate of PeopleSoft's roughly 12,000 employees remains unclear.

Oracle at one point drew up plans to layoff more than 6,000 PeopleSoft workers.

...more...

[UpInArms]

30. Motorola realigns into four business groups

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38334.5056539236-829655700&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (CBS.MW) -- Motorola Inc. (MOT) said Monday that it will realign into four distinct business groups effective Jan. 1. The company said the new groups -- personal devices, networks, connected home and government and enterprise -- will help improve operating efficiency. There will be no change in reporting relationships, the company said.

Whee! Realignment and improving efficiency! We all know what that means :eyes:

[steely]

40. Look how much better they got when they realigned in Nov-2002!

that's when they realigned me out of a job - ha ha

don' worry - I'm the better for it.

[UpInArms]

32. 2:09 EST numbers and blather (damn we're happy!)

Dow 10,611.87 +68.65 (+0.65%)
Nasdaq 2,140.55 +12.48 (+0.59%)
S&P 500 1,195.98 +7.98 (+0.67%)
10-Yr Bond 4.138% -0.018

NYSE Volume 933,234,000
Nasdaq Volume 1,417,745,000

1:30PM: Equities pick up some steam but continue to trade in a relatively narrow range... Consolidation within the computer software space, on the heels of the Oracle (ORCL 14.51 +1.23) and PeopleSoft (PSFT 26.42 +2.47) combination, has heightened speculation that more software deals are on the way... Shares of competitor SAP AG (SAP 44.57 +0.91) have surged more than 2% while other software companies catching a bid have included ERTS, TTWO and THQI... However, the latter three have gained 5%, 4% and 3%, respectively, after JP Morgan upgraded all three to Overweight from Neutral...

The firm believes the stocks could provide significant upside over the next 2-3 years, as the market for video games heads into the next console cycle...NYSE Adv/Dec 1904/1288, Nasdaq Adv/Dec 1579/1438

1:00PM: Little change in the last half hour as the indices trade sideways in positive territory... Meanwhile, light volumes in treasuries ahead of tomorrow's FOMC meeting have left bonds bouncing around midday... The 10-year note, which spent much of the morning lower following better than expected November retail sales data, has gotten a modest boost after oil prices jumped more than 1%... Despite crude oil ($40.60/bbl -$0.11) selling off over the last hour, the benchmark treasury has continued to rally, up 5 ticks yielding 4.12%...

The market still expects the Fed, which hasn't tightened policy in December in at least 15 years, to raise the fed funds rate 25 basis point to 2.25% tomorrow afternoon...NYSE Adv/Dec 1865/1296, Nasdaq Adv/Dec 1567/1431

12:30PM: Market continues to show resilience as buyers remain an active bunch...

dollar in the doldrums:

settled at 82.55 down -.43

current 82.12

[UpInArms]

33. Dollar falls ahead of Fed meeting

http://cbs.marketwatch.com/news/story.asp?guid=%7B8D2CD4DB%2D1411%2D4523%2DA80E%2D319DDF30E0E6%7D&siteid=mktw

CHICAGO (CBS.MW) - The dollar lost ground on Monday for the first day in four, as ongoing worries about U.S. deficits overshadowed expectations for rising interest rates.

The dollar did trim its losses modestly as a report that showed stronger-than-expected U.S. retail sales results bolstered the view for even higher interest rates over coming months, perhaps driving up foreign demand for dollar-denominated assets.

The dollar was quoted at 104.45 yen in midday U.S. trading. That's down 0.5 percent against its Japanese counterpart compared to late U.S. trading on Friday.

The greenback hit a one-month high of 106.20 yen at one point on Friday, after reaching its lowest yen level in nearly five years to start the week.

<snip>

With this week only just underway, "the market's theme is returning to the daunting U.S. deficit, just as I was beginning to think it was the interest-rate spread" between the United States and its rivals, said Ryohei Muramatsu, manager of group treasury Asia at Commerzbank AG in Tokyo.

The U.S. Federal Reserve meets Tuesday and is widely expected to nudge its target interest rate up to 2.25 percent, the fifth time it will have tightened lending conditions this year. The U.S. interest-rate futures market also sees a relatively strong chance for additional Fed rate hikes in the first half of 2005. See Economic Preview.

The current account deficit, a broad measure of trade that includes investment flows, stands at nearly 6 percent of U.S. gross domestic product, its largest share ever. Record fiscal red ink in Washington is only aggravating the deficit situation, which has driven the dollar to multiyear lows against a range of currencies.

...more...

[UpInArms]

34. CEOs: Reform entitlements first

http://cbs.marketwatch.com/news/story.asp?guid=%7B91E89E58%2D7F53%2D4D8C%2DB2BA%2DF76AAAFA0632%7D&siteid=mktw

WASHINGTON (CBS.MW) -- The White House and Congress should focus on reforming Social Security and other entitlement programs before looking at a broad overhaul of the tax code, a group representing the chief executives of America's largest corporations urged Monday.

"We are very concerned that unless action is begun now, future growth in spending -- especially in the three significant entitlement programs of Social Security, Medicare and Medicaid -- will overwhelm the federal budget and the economy," wrote Delphi Chief Executive J.T. Battenberg III, head of the Business Roundtable's fiscal-policy task force, in a letter to President Bush.

In a position paper, the group didn't endorse any specific policy proposals to rein in entitlement spending.

Bush has vowed to press forward with his campaign pledge to allow many workers to divert some of their payroll taxes into private Social Security accounts, and has ruled out hiking payroll taxes or cutting benefits to fund transition costs, estimated to run as high as $2 trillion over the next decade.

...more...

To these freaking cheating overpaid bags of flotsam, I say STFU!

:argh:

[54anickel]

35. Heh-heh, yep, saw this related article in FT this morning (check the pic)

http://news.ft.com/cms/s/5084a758-4c86-11d9-835a-00000e2511c8.html

Business hopes Bush will forgo tax reform

US business has little appetite for fundamental tax reform, seeing deficit reduction and government entitlement programmes as priorities for President George W Bush's second-term agenda.


Changes to the tax code, fiscal policy and regulation of entitlements, such as those offered by Social Security and Medicare, have been tabled for discussion at a White House economic summit this week.

Mr Bush has made it clear that the introduction of personal accounts, as part of Social Security reform, and an overhaul of the tax code are high on what is seen as an unusually ambitious domestic policy agenda for a second-term president.

But John Castellani, president of the Business Round Table, the association of chief executive officers of leading US companies, said: “While tax reform is important, we see it as subordinate to entitlement reform and getting the fiscal deficit down.”

Lawsuit abuse and making healthcare more affordable will also be discussed at the two-day summit held by the president, vice-president and cabinet secretaries, to which 35 chief executives and economists have been invited.

more...

[54anickel]

36. 3:17 update

Dow 10,624.58 +81.36 (+0.77%)
Nasdaq 2,144.37 +16.30 (+0.77%)
S&P 500 1,197.31 +9.31 (+0.78%)
10-yr Bond 4.144% -0.012
30-yr Bond 4.802% -0.02
NYSE Volume 1,161,474,000
Nasdaq Volume 1,706,158,000

3:00PM: The blue chip indices surge to new session highs heading into the last hour of trading... Short covering has been a contributing factor helping the Dow and S&P break through last week's highs and surpass the ranges they have held for the last several weeks... Separately, the dollar held rather tight ranges against the euro ($1.3323) and yen ($104.59) most of the day, ahead of tomorrow's FOMC meeting and Trade Balance data as well as Current Account data out on Thursday... Gold ($440.30/ounce), at the expense of the weaker dollar, gained more than 1%...NYSE Adv/Dec 2107/1144, Nasdaq Adv/Dec 1772/1306

2:35PM: Indices are off their highs, but are holding on to the bulk of today's gains... Meanwhile, the market has advanced in the face of higher oil prices, higher bond yields and a weaker dollar, suggesting that the year-end rally still has legs as buyers demonstrate conviction... The S&P 500 recently hit a new session high (1196.47) and is nearing a 52-week high (1197.11)...NYSE Adv/Dec 2088/1162, Nasdaq Adv/Dec 1736/1323

[54anickel]

37. NY gold ends atop $440/oz, boosted by lower dollar

http://www.reuters.com/financeMarketReportArticle.jhtml?O22P4YPIIEFROCRBAEOCFFA?type=goldMktRpt

NEW YORK, Dec 13 (Reuters) - U.S. gold futures closed higher on Monday, snapping back from a previous one-month low as the dollar fell and traders turned an eye to U.S. economic data and events over the next few days.
As precious metals stabilized after a sell-off last week fueled by a dollar rally, gold regained the $440 level in thin trading near the year-end holidays.

Metals such as gold often move in opposition to the dollar as it is seen as an alternative investment to the currency.

"Today, we saw a nice upward move. You had a number of things coming into play: foreign exchange moves, how the funds are reacting to that, and we're coming into a rather illiquid time of the year," said Andy Montano, a director at ScotiaMocatta in Toronto.

A third day in a row with a fall in COMEX open interest alleviated pressure on futures as well, as more room opened up for speculative money to return to the market, dealers said.

more...

[TrogL]

38. Loonie Watch

http://members.shaw.ca/trogl/looniewatch.html

Highlights.



http://www.x-rates.com/d/USD/CAD/data30.html

Detailed analysis (http://quotes.ino.com/chart/?s=CME_CDT4&v=s)


2004-11-15 Monday, November 15 0.831117 USD
2004-11-16 Tuesday, November 16 0.838082 USD
2004-11-17 Wednesday, November 17 0.838574 USD
2004-11-18 Thursday, November 18 0.8285 USD
2004-11-19 Friday, November 19 0.838364 USD
2004-11-23 Tuesday, November 23 0.842815 USD
2004-11-24 Wednesday, November 24 0.846525 USD
2004-11-26 Friday, November 26 0.849257 USD
2004-11-29 Monday, November 29 0.844167 USD
2004-11-30 Tuesday, November 30 0.840195 USD
2004-12-01 Wednesday, December 1 0.843455 USD
2004-12-02 Thursday, December 2 0.840407 USD
2004-12-03 Friday, December 3 0.835003 USD
2004-12-06 Monday, December 6 0.832501 USD
2004-12-07 Tuesday, December 7 0.827267 USD
2004-12-08 Wednesday, December 8 0.81646 USD
2004-12-09 Thursday, December 9 0.816127 USD
2004-12-10 Friday, December 10 0.814797 USD
2004-12-13 Monday, December 13




The loonie lost against everything, pretty much as usual these days. It's not just that it's falling against the greenback, it's down against everything.

Go to the main site to see the damage.

[UpInArms]

39. closing numbers and blather

Dow 10,638.32 +95.10 (+0.90%)
Nasdaq 2,148.50 +20.43 (+0.96%)
S&P 500 1,198.68 +10.68 (+0.90%)
10-Yr Bond 4.151% -0.005

NYSE Volume 1,463,049,000
Nasdaq Volume 2,091,645,000

Close: Encouraging M&A activity and better than expected retail sales data ignited buying interest that pushed the S&P 500 to three-year highs and left every major index in positive territory... PeopleSoft's (PSFT 26.42 +2.47) approval of Oracle's (ORCL 14.69 +1.41) revised $10.3 bln acquisition offer paved the way for the bulls early on, as a pick up in consolidation activity spurred broad-based buying efforts...

Meanwhile, ORCL beat Q2 (Nov) expectations by three cents, issued in line Q3 (Feb) guidance, and stated the PSFT deal would bring earnings accretion as early as fiscal Q4 (May) of FY05... Signs that a very good holiday retail season remained intact added further conviction on the part of buyers... Improved consumer spending patterns were validated by November retail sales of +0.1% (consensus 0.0%) and retail sales, ex-auto, of +0.5% (consensus +0.3%), as well as noteworthy upward adjustments to the October data... Lower crude oil prices early on also kept a lid on selling interest and, even when the commodity rebounded ($41.19/bbl +$0.18) midday, market internals remained positive as in the indices continued to climb...

Recording the largest gains on the day were software (+2.8%) and telecom service (+1.6%)... The latter surged after merger talks regarding the pending $35 bln deal between wireless carriers Sprint (FON 24.44 +0.30) and Nextel (NXTL 29.99 +0.23) left many speculating a deal could be finalized this week... Hardware, energy, biotech, utility, materials, semiconductor, financial, healthcare and retail also traded higher while networking showed the most weakness... Airline, which was underwater most of day, bounced into positive territory in the closing minutes...