STOCK MARKET WATCH, Thursday 20 January

[ozymandius]

Thursday January 20, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 4 YEARS, 0 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 40 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 94 DAYS
DAYS SINCE ENRON COLLAPSE = 1155
Number of Enron Execs in handcuffs = 19
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 January 19, 2005

Dow... 10,539.97 -88.82 (-0.84%)
Nasdaq... 2,073.59 -32.45 (-1.54%)
S&P 500... 1,184.63 -11.35 (-0.95%)
10-Yr Bond... 4.19% -0.01 (-0.19%)
Gold future... 423.30 -0.20 (-0.05%)





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

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[Tace]

1. Futures Commentary From Ino.com

The March S&P 500 index gapped below the 25% retracement level of the August-January rally crossing at 1181.85 overnight as it extends Tuesday's breakout below the 10-day moving average crossing at 1185.64. Stochastics and the RSI are bullish signaling that a short-term low might be near. However, it will take closes above the 20-day moving average crossing at 1195.35 to confirm that a short-term low has been posted. Multiple closes below the 25% retracement level would open the door for a test of December's low crossing at 1175.70 then the November 22 reaction low at 1171. The March S&P 500 Index was down 2.40 pts. at 1181.10 as of 5:51 AM ET. Overnight action sets the stage for a steady to lower opening when the day session begins later this morning.

http://quotes.ino.com/analysis/markets/

[54anickel]

2. Good Morning Ozy, hope you and yours are feeling better...n/t

[ozymandius]

4. Thanks 54anickel.

I am feeling a little better. Wife is not. Our son still has a racking cough which will take him back to the doctor this morning. I hope everything's well with you and yours.

Ozy

[54anickel]

5. We're hangin' in there...

F-i-L is now under home hospice care. He has a good outlook and attitude. Once he made the decision to forego additional treatment (would only buy a bit more time) he started making plans for all he wants to do before he gets too sick or weak to do it.

Number one was to get back to the bowling lanes and use the new ball he just got the week before we took him into the hospital. He did that on Tuesday and bowled his brains out with that lighter new ball! He wants to get to the Casino a couple of times - loves those slots. He was also looking forward to getting back on the golf course this year after last years surgery. Now that he knows he has little time left, he'll settle for an indoor driving range. He still has his card club once a week (usually cleans house in Uecker sp?) and his group of buddies do a breakfast out once or twice a month. So, all in all, he'll be a pretty busy guy for a while. The nurses are great about working around his busy schedule.

So much different than when my dad went through this. He wouldn't sign up for hospice until the very end - didn't want to admit he'd lost his 20+ year battle with his cancer. Man, those were difficult times with him.

[ozymandius]

8. It's wonderful to hear about his bright attitude.

At the same time, I am very sorry that your family is going through this. My thoughts are with you all.

[54anickel]

10. Thanks Ozy. It's never easy to face the inevitable, but hey - we're

all going to go sometime. The foreknowledge is in some ways a blessing as you are a bit more conscious of that fact. So you spend each visit together as if it may be the last, being ever more thankful when you get to have another.

I think we all have intentions to live as though today may be your last - but it seems life causes us to cheat ourselves and others out of that blessing. Dealing with terminal illness puts it all back into perspective, at least for a while.

[ewagner]

19. Well said Sir,

I'm sorry your family is going through this but I admire your FIL's attitude and outlook........

Best to you and yours :toast:

[54anickel]

21. Thank you Ewagner.

Yep, "Dad" is pretty special that way - we can always learn an awful lot from our elders. :hi:

[54anickel]

3. Will The Economy Continue to Drive Earnings?

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

Investors are focused on fourth quarter earning this week, but the release of the Federal Reserve’s Beige Book and CPI report on Wednesday offered brief recesses from the countless conference calls. As of Wednesday night, 85 companies in the S&P 500 Index reported fourth quarter results. Fifty-four (63.5%) have exceeded Wall Street’s estimates, with 17 (20.0%) falling short. This is worse than last year at this point. After 90 companies had reported last year, only 11% had missed analysts projections. Investors are realizing that growth is slowing and have become more skeptical. IBM’s stock price sold off after beating analysts estimates by a nickel because sales were boosted by a weak dollar that might not contribute to growth if the dollar stabilizes.

snip>

We have discussed how retailers have conditioned consumers to wait for sales. The Beige Report reiterated that shoppers were more active later in the shopping season when sales were more prevalent. This is an ominous for retailers since margins will obviously be compressed if retailers are unable to get full price for their merchandise. It is also appears to be affecting retailers that use the “everyday low price” strategy. Ethan Allen switched to an everyday pricing strategy last June so it does not offer sales anymore. During the conference call, management said that it is having to educated its consumers and if difficult when the competition “is selling their products as a commodity and on sales.” The company forecasts that once it gets past the anniversary of the transition, results will be much better for a host of reasons. The company guided analysts to expect 5% same store sales growth and 8% earnings growth. Wall Street is not buying it. Piper Jaffrey lowered its earnings estimate to reflect 5% earnings growth and 3% same store sales growth and said it, “would not be surprised to see guidance revised lower in the coming months if business conditions do not improve materially from current levels.

snip>

“It is hard to take a global view and see tailwind. I think there is decent momentum in the United States, still not great, but there is still air flowing over the wings. I think in Europe you see a group of economies that never got off the ground and show no promise of doing it, really. And I think you see a modest slowdown in Asia. So when you add that all up, it leads to caution at the macroeconomic level.”

Stock prices have been zigzagging this year without any direction. The S&P 500 has not experienced two consecutive up or down days in the past two weeks and Wednesday’s eleven point drop only erased Tuesday eleven point gain. As investors determine the prospects for earning this year, its likely that the market will breakout of its trading range. It currently appears that earnings growth will be below the estimated growth at the beginning of the quarter. This has not happened since the fourth quarter 2002. The last time earnings growth shifted from beating estimates to coming in below forecasts was the third quarter of 2000 and continued for ten consecutive quarters. These periods were also the turning points in the market.

more...

[54anickel]

7. U.S. Stock-Index Futures Fall; EBay, Qualcomm Shares Decline

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

Jan. 20 (Bloomberg) -- U.S. stock-index futures fell after EBay Inc. and Qualcomm Inc. said profit may miss some analyst estimates. Intel Corp. and Hewlett-Packard Co. slid in Europe.

``The outlook for a lot of these companies is going to be tough,'' said Andy Brough, who helps oversee $6.5 billion at Schroder Investment Management in London.

Standard & Poor's 500 Index futures expiring in March declined 3.3 to 1180.20 at 10.21 a.m. in London. Nasdaq-100 Index futures lost 9 to 1533.5, while Dow Jones Industrial Average futures slipped 23 to 10,510. Twenty-five of the 27 Dow stocks trading in Europe fell.

EBay trades at 64 times estimated full-year earnings, according to Bloomberg data. That compares with 17 times estimated earnings for the S&P 500.

``You see some of the valuations in the U.S., the EBays and all, and you may see a bit of a correction,'' said Brough.

more...

[ozymandius]

6. WrapUp by Mike Hartman

CHECK THE "BIG MONEY" DONORS!

Overall, economic reports were positive today showing tame inflation, strong housing starts and a big drop in initial claims for unemployment benefits. The reports helped to bolster the dollar, bonds were basically unchanged, and stock prices struggled in negative territory throughout the session. Mixed earnings reports and disappointing forecasts for the balance of 2005 outweighed the positive economic news and pushed stock prices lower for the day.

A drop in energy costs pulled the Consumer Price Index down 0.1% in December, however, excluding food and energy, core consumer prices moved up 0.2% for the third straight month. For the year as a whole, consumer prices have moved higher by 3.3% (please note two-year Treasury Notes only yield 3.25%, a loss against inflation) and the core-rate is higher by 2.2%. Though the core-rate appears low, the gains in the core-rate of inflation are the biggest since 2001 and double the rate in 2003. The trend favors an increasing rate of inflation.

-cut-

Though the Fed is determined to raise short-term interest rates, long rates remain stubbornly low. In the face of the Fed talking about continued increases for the target Fed Funds Rate, the Mortgage Bankers Association reported the 30-year fixed mortgage rate fell six basis points to 5.64%. (This can only happen because they say there is no inflation.) The MBA also said its application index rose 16.2%, with the purchase index higher by 14.0% and the refinance index higher by a larger 19.1%. Refinancing is starting to show some signs of life! I would guess that many consumers ran up their credit cards to pay for Christmas, so now it’s time to re-fi the house to pay off the credit cards…again! These low interest rates seem to be getting more and more people in trouble with their debts…debtors will have to pay the piper at some point! What happens when there is no equity left in home prices to help facilitate consumption?

more...

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

[54anickel]

29. Ewww, not happy news for GM in that article - or BeezleBush for that

matter.

snip>

I said earlier that stocks struggled in the red throughout the day, but they really got hammered in the last hour of trading. The NASDAQ Composite was down 15 points with an hour to go, and the index ended up losing 32 points for the session to close at 2,073. In similar fashion, the Dow Industrials dropped 88 points to 10,539 and the S&P 500 fell 11 points to close at 1,184. Motorola tumbled 7% after saying first-quarter earnings would be lower than analyst’s estimates, J.P. Morgan missed the target for fourth-quarter earnings, and General Motors net income fell to $630 million ($1.11/share) from $1 billion ($2.13/share) for the same quarter a year ago. Net income fell by $370 million while top line revenue rose 5.1% to $51.3 billion. They attribute the lower bottom line to health-care costs, losses in Europe, Asian competition and other unidentified cost increases. The way I see it they are simply not competitive with their high overhead structure. Toyota has been taking market share from GM, but just wait ‘till China starts selling their cars here in the U.S. To make matters worse for GM, Standard and Poor’s Rating Service, which cut the automaker’s debt rating to one step above junk bonds (BBB) on October 14, is now saying they need to review the “appropriateness” of the outlook as competitive pressures increase. Would you have ever thought GM’s debt paper would be reduced to “junk” status? Something to think about…

On the eve of President Bush’s inauguration for a second term I would like to make a few comments via the BBC World News. I don’t want to get real heavy-handed on political issues, but it sure looks like Mr. Bush and America as a whole have lost face with the international community. You probably won’t hear these things in the mainstream U.S. media, so here’s a few snippets from the first BBC article:

Global Poll Slams Bush Leadership

snip>

You can draw your own conclusions based on the info from the BBC. There is untold human suffering happening all around the world and we end up spending $40 million to swear in the president for another four years. It is no wonder why we are losing respect from our foreign neighbors. Me thinks we as Americans need to devote some serious time to pray for our country and pray that our leaders get some wisdom in a big hurry!

[54anickel]

9. Oil Falls After U.S. Stockpiles Increase Eases Supply Concern

I'm really beginning to wonder about these inventory numbers. It seems they tend to move up just in the knick of time. :shrug:

http://www.bloomberg.com/apps/news?pid=10000086&sid=aCw8Krw_zRJA&refer=latin_america

Jan. 20 (Bloomberg) -- Crude oil futures prices fell to a one- week low after a report showing U.S. stockpiles rose more than expected last week eased concern about heating-fuel supplies.

U.S. crude inventories were 10 percent higher in the week ended Jan. 14 than a year earlier, after gaining the most since October, the Energy Department said yesterday. Supplies of heating fuels also rose and the National Weather Service forecasts that a freeze in the U.S. Northeast will subside next week.

``Looking at inventory numbers, they are at a relatively healthy position,'' said Craig Pennington, head energy analyst at Schroders Plc in London. ``A warmer-than-average beginning of the winter really helped rebuild stockpiles and I don't think we'll see prices going above $50 without sustained cold weather or supply disruptions.''

snip>

Fears

``The big picture is one of fears of more OPEC cuts, fears of the violence escalating in Iraq, and there's a lot of talk about renewed Chinese demand in 2005 and the under-estimation of that demand last year,'' Mennis said.

Oil demand from China, the world's second-largest oil consumer, rose almost 16 percent to a record in November, the International Energy Agency said two days ago.

more...

[54anickel]

11. Warren Buffett sees no way but down for US dollar

http://sg.news.yahoo.com/050119/1/3pyjn.html

The dollar cannot avoid further declines against other major currencies unless the US trade and current account deficits improve, legendary investor and businessman Warren Buffett said.

"I think, over time, unless we have a major change in trade policies, I don't see how the dollar avoids going down," the world's second-richest individual told CNBC television.

"I don't know when it happens. I don't have any idea whether it will be this month or this year or next year, but we are force-feeding dollars on to the rest of the world at the rate of close to a couple billion dollars a day, and that's going to weigh on the dollar."

snip>

"I'm having a hard time finding things to buy, if that says anything about the market," he said.

bit more...

[54anickel]

12. Bankers flag hedge funds

http://www.theglobeandmail.com/servlet/story/RTGAM.20050120.r-banks-conf20/BNStory/Business/

snip>

Canadian-sponsored hedge funds held $14.1-billion in assets as of last June, compared with just $2.5-billion in 1999, according to Investor Economics, a Toronto consulting firm that is releasing a report on the hedge fund sector this week. Although the industry is dwarfed by the mutual fund business, it is gaining ground at a fast clip: The 46-per-cent compound annual growth rate for hedge funds is 10 times the 4.6-per-cent rate for mutual funds.

snip>

The funds — recently referred to as the "dark corner" of Wall Street by a top U.S. securities regulator — have traditionally catered to wealthy individuals and required minimum investments of hundreds of thousands of dollars. Part of the reason for these limits is that they rely on arbitrage, short selling and other complicated investment techniques. But recent alternatives such as hedge fund "funds of funds" and "principal protected" products have provided regular investors with a more affordable way into the sector.

Hedge funds have been large buyers of corporate loans and other derivative instruments from banks, which have been mopping up their balance sheets after getting scorched by a credit flameout a few years ago. This raises another concern: The same retail investors who are scurrying to get into the hedge fund game could end up shouldering some of the risk that banks are looking to unload.

snip>

The purchasing appetite of hedge funds, coupled with their buying clout, has provided much needed liquidity for banks intent on cleaning up their loan books. At the same time, the size of these funds is unprecedented, and bankers worry what sort of consequences there may be in the derivatives markets when financial conditions sour.

"We just haven't seen this asset class behave at the size it is when the markets turn," noted Richard Waugh, CEO of Bank of Nova Scotia. "It's worrisome, but I don't know how you can quantify it."

more...

[54anickel]

13. Flow of Capital Soars To 'Emerging' Nations

http://www.washingtonpost.com/wp-dyn/articles/A22604-2005Jan19.html

Private investment is pouring into developing countries at the fastest rate since just before the Asian financial crisis of the late 1990s, according to a report released yesterday by the leading international association of financial institutions.

The trend has some of the features of a "bubble" that could lead to market turmoil in the future, the group's director acknowledged.

The Institute of International Finance Inc., which represents more than 300 banks, investment firms and other major financial companies, said the flow of private money to 29 "emerging market" nations reached $279 billion last year. That is more than double the 2002 level, and close to the $287 billion posted in 1997, the year that Thailand's currency collapsed, sparking a flight of capital from Asia. The record was in 1996, when $322 billion flowed into emerging markets.

The flow of capital has been especially strong in recent months to China and Russia, but was also up last year in Latin America, Eastern Europe, Asia and the Pacific, and Africa and the Middle East.

snip>

The figures are the latest evidence suggesting to some economists that global financial markets have been pumped up to dangerous heights thanks in part to the low-interest rate policy pursued by the U.S. Federal Reserve and other major central banks. The enormous amount of capital flooding into developing countries has stirred concern that the boom could turn to bust if market conditions change and investors prove as panic-prone as they did during the late 1990s. The flight of investors that began in Thailand spread through much of the developing world, and triggered recessions or sharp economic slowdowns in such countries as South Korea, Russia and Brazil.

more...

[54anickel]

14. Three More Reasons to Doubt Bond Market's Sanity

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_gilbert&sid=a4NBNwykeJJ8

Jan. 20 (Bloomberg) -- Investors are lending free money to junk-rated companies. Argentina is blackmailing its lenders three years after taking the prize for the biggest default ever. And the Federal Reserve says there's evidence of ``excessive risk-taking'' in the low yields investors are accepting on corporate bonds.

These three examples should chill fixed-income money managers. Fear and greed are omnipresent in financial markets; they also seem to be achieving omnipotence in the current bond market environment, with fear of unemployment prompting investors to make greedy bets they'd typically run a million miles from.

In the past four months, bond buyers have made more than $2 billion of ``borrow now, pay much later'' loans to non-investment grade borrowers including Inmarsat Ventures Plc, a London-based satellite operator, and New York-based Warner Music Group, the fourth-biggest record label.

The loans are in the form of so-called discount notes. In November, for example, Inmarsat sold $450 million of bonds that are interest-free for the first four years, after which the issuer starts paying 10.375 percent. Investors pay just $668.94 for $1,000 of the notes, which boosts the return when they're due for repayment in November 2012.

Provided Inmarsat meets its obligations, buyers will make 635 basis points more than if they'd bought a U.S. Treasury note of similar maturity. A basis point is 0.01 percentage point.

Big Risk, Scant Reward

more...

[54anickel]

15. Mahathir calls for review of ringgit peg

http://business-times.asia1.com.sg/sub/news/story/0,4574,142610,00.html?



(KUALA LUMPUR) Former Malaysian prime minister Mahathir Mohamad, who fixed the country's exchange rate in 1998, yesterday called for a review of the peg as the weak dollar has caused the ringgit to depreciate against other major currencies.

'I feel the time has come for us to review because we have lost a lot as the value of our currency has fallen,' Dr Mahathir was quoted by the official Bernama news agency as telling reporters.

He said that while the depreciation of the dollar had little impact on Malaysia's imports from the United States, it was now costlier to buy goods from Japan and Europe.

Malaysia fixed its currency at RM3.80 to the US dollar in September 1998 as part of a series of capital controls to protect the economy from the turmoil of the Asian financial crisis.

'From the onset, we have said that although we have a fixed exchange rate, we can fix it at any level we want. That is the most important thing... the freedom to fix the exchange rate,' said Dr Mahathir, who stepped down as premier in 2003.

more...

[54anickel]

16. Pension fund sues Fannie Mae over pay-offs

http://news.ft.com/cms/s/e47b88ba-6a76-11d9-858c-00000e2511c8.html

A Michigan pension fund on Wednesday filed a lawsuit against Fannie Mae asking that the courts stop the company's former executives from receiving millions of dollars in severance payments.


The suit adds to class action lawsuits pending against the company alleging it manipulated earnings and deceived investors after its regulator, the Office of Federal Housing Enterprise Oversight, found it had misapplied accounting rules.

Wayne County, a shareholder of Fannie, filed a request for a temporary restraining order stopping Mr Raines's and Mr Howard's severance payments.

The fund alleges that Fannie's board made an "unconscionable decision" to accept the executives' resignations rather than firing them, and that the company's financial position is suffering as a result of the executives' generous severance payments.

It argues that payment of the benefits will exacerbate Fannie's financial difficulties as it looks for ways to raise additional cash to meet new capital requirements.

more...

[54anickel]

17. Talk of Changing Pension Math Raises Concern on Benefit Cuts

http://www.nytimes.com/2005/01/20/business/20pension.html?oref=login

AT&T, the once-mighty phone giant, has a pension plan with obligations of about $10 billion, according to its annual report for 2003. Yet the company paints a somewhat rosier picture for employees: an extrapolation from workers' individual statements indicates that the plan owes them roughly $10.6 billion, or 6 percent more.

There is nothing improper or unusual in AT&T's approach. Like many other companies, it uses two methods to calculate the value of its pensions: one to tell employees how much they have earned, the other to tell investors how large the company's pension liability is.

But that may soon change. The seeming discrepancy in accounting, which has been an accepted business practice for two decades, has begun to bother accounting rule makers, who say the practice allows companies to understate to investors the extent of their pension liabilities.

The panel that sets accounting standards is now preparing a proposal that would require many big American companies to give a more accurate financial picture of their pension plans. As a result, a number of them will have to increase the pension liabilities on their books, in essence telling investors that they owe their employees more than they have disclosed in the past.

snip>

There is precedent for such a cutback. When a change in accounting rules forced companies in 1990 to report the value of the health insurance they had promised to retirees, companies began to reduce the coverage.

Indeed, the accounting board's proposal comes as the pension system itself is under pressure. Many companies, citing the burden of providing retirement benefits, have cut back, converted or closed their plans. At the same time, the Bush administration is proposing changes in both the way companies set aside money to pay for future benefits, and the way they pay to support the federal system of insuring traditional pensions. Business groups have warned that if companies are pushed too hard, they may stop offering pensions altogether.

more...

[54anickel]

18. Dollar Watch

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

Last trade 83.80 Change +0.20 (+0.24%)

Settle 83.60 Settle Time 23:38

Open 83.50 Previous Close 83.60

High 83.99 Low 83.40


The March Dollar was higher overnight and is breaking out above the 25% retracement level of the May-December decline crossing at 83.71. Stochastics and the RSI are diverging but bullish signaling that sideways to higher prices are possible near-term. Closes above the 25% retracement level of the May-December decline crossing at 83.71 are needed to extend the short covering rebound off December's low. Closes below the 20-day moving average crossing at 82.30 would confirm that a short-term top has been posted while opening the door for a larger- degree decline into the last half of January. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

The March Euro was lower overnight as it extends this month's decline and is testing the 38% retracement level of the April-December rally crossing at 129.550. Stochastics and the RSI are bearish but oversold hinting that a short-term low might be near. Closes above last week's high crossing at 133.020 are needed to confirm that the correction off December's high has come to an end. If March extends this month's decline, the 50% retracement level of the April-December rally crossing at 127.290 is the next downside target. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

The March British Pound was lower overnight as it consolidates below the 10-day moving average crossing at 1.8658 and above the 38% retracement level of the May-December rally crossing at 1.8564. Stochastics and the RSI are oversold, diverging and are turning bullish hinting that a short-term is in or is near. Closes above the 20-day moving average crossing at 1.8827 are needed to confirm that the correction off December's high has come to an end. If March extends this year's decline, the 50% retracement level crossing at 1.8292 is the next downside target. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

The March Swiss Franc was lower overnight and is breaking out below the 38% retracement level of last year's rally crossing at .8421. At the same time stochastics and the RSI are bearish but oversold hinting that a short-term low might be near. Closes above last week's high crossing at .8627 are needed to confirm that a short-term low has been posted. If March extends its decline off December's high, the 50% retracement level of last year's rally crossing at .8276 is the next downside target. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

The March Canadian Dollar was lower overnight as it extends this week's breakout below the 25% retracement level of the May-November rally crossing at .8174. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible into the last half of January. If March extends this week's decline, the reaction low crossing at .8062 then .8018 are the next downside targets. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

The March Japanese Yen was lower overnight as it extends this week's decline and is breaking out below the 10-day moving average crossing at .9752. Stochastics and the RSI are overbought and turning bearish signaling that a short-term top might be in or is near. Closes below the 20-day moving average crossing at .9727 would confirm that a double top with December's high has been posted. If March extends last week's rally, a test of December's high crossing at .9885 is the next upside target. Overnight action sets the stage for a steady to weaker tone in early-day session trading.


Dollar in Firm Territory

http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=749&e=3&u=/nm/20050120/bs_nm/markets_forex_dc

LONDON (Reuters) - The dollar traded near its highest level in two months against the euro on Thursday as investors bet interest rate rises in the United States would bolster the U.S. currency's yield appeal in the future.

Wednesday's economic data releases showed sturdy core inflation, surging housing starts and plummeting jobless aid claims, which underlined expectations for steady increases in borrowing costs.

Many investors were also waiting for news on the U.S. government's fiscal plans, which could help the dollar if solid deficit tightening measures are introduced. :eyes: They'll be waiting for a looooong time.

snip>

"Interest rates are an issue. Also, investors are wondering whether there could be a temporary respite in the dollar's structural negatives if there are cuts in the fiscal deficit."

more...

[54anickel]

20. Futures blather - YIKES! NASDAQ -20.00?!?!?!!!!

9:15AM : S&P futures vs fair value: -6.6. Nasdaq futures vs fair value: -20.0.
9:00AM : S&P futures vs fair value: -6.6. Nasdaq futures vs fair value: -20.0. Still shaping up to be a lower open for the indices as futures indications hold a negative tone... Aside from earnings concerns this morning, and in the absence of any market-moving economic data, M&A activity has resurfaced... Reports suggest that Federated Department Stores (FD) is in preliminary discussions to acquire rival May Department Stores (MAY) while Pfizer (PFE) could be in focus regarding a potential $527 mln acquisition of biotech Angiosyn Inc.

8:30AM : S&P futures vs fair value: -6.8. Nasdaq futures vs fair value: -19.5. Cash market still poised for a weaker start as a bearish bias remains intact and investors continue to sift through a plethora of earnings reports... AT&T (T) appears to have beaten expectations, but it guided FY05 revenues below estimates, while Ford (F), which beat forecasts by a penny, turned in earnings three cents shy from a year ago... Continental Airlines (CAL), which beat analysts' estimates by $0.60 still turned in a Q4 loss of $2.62 per share versus a loss of only $0.58 last year

8:06AM : S&P futures vs fair value: -6.5. Nasdaq futures vs fair value: -20.5. Futures market versus fair value suggesting a lower open for the cash market... Lower than expected results and guidance from several industry leaders has overshadowed solid reports from others... In that regard, EBAY missed the Q4 consensus EPS forecast by a penny and warned for Q1, QCOM beat forecasts by a penny but also issued earnings guidance below consensus, COF handily missed Q4 expectations, and WM missed by a penny

6:22AM : S&P futures vs fair value: -5.2. Nasdaq futures vs fair value: -16.5.

[54anickel]

22. 9:35 and we're off to the races - check the volume on the NAS already

Dow 10,510.63 -29.34 (-0.28%)
Nasdaq 2,056.95 -16.64 (-0.80%)
S&P 500 1,179.87 -4.76 (-0.40%)
10-yr Bond 4.198% +0.011
30-yr Bond 4.693% +0.024
NYSE Volume 41,701,000
Nasdaq Volume 135,684,000

[54anickel]

23. Morgan Stanley Subpoenaed Over Annuity Sales

http://www.forbes.com/home/personalfinance/2005/01/19/cz_nw_0119ms.html

NEW YORK - Morgan Stanley was served with a subpoena by the state of Massachusetts earlier today seeking information about its sales of variable annuities. The subpoena was served by Secretary of the Commonwealth William Galvin and seeks information about whether the leading Wall Street firm received secret payments from insurance companies to sell their variable annuity products.

"There have been ongoing issues regarding pay-to-play and undisclosed compensation for some time," Galvin says. "We are eager to make sure whether there is further evidence of this practice."

The subpoena comes amid increasing scrutiny of whether large brokerages have received secret payments from insurance companies to sell variable annuities, which offer both a death benefit and a financial return based on how well the investments inside them perform. Variable annuities can be particularly profitable because of high upfront fees and ongoing revenue from the securities.

A Morgan Stanley (nyse: MWD - news - people ) spokesman said, "We are confident that our practices in this area are appropriate and have been properly disclosed."

San Diego securities attorney Ronald Marron has filed a complaint over Morgan Stanley's variable annuity sales practices with the National Association of Securities Dealers. Marron says he plans later this week to file a class suit against the firm making similar claims. Marron has likewise filed complaints against AIG (nyse: AIG - news - people ) and Charles Schwab (nyse: SCH - news - people ) for wrongfully selling variable annuities to senior citizens. He may also file additional class suits against brokers over their variable annuity sales practices, he said.

more...

[RawMaterials]

24. 11:00 EST Market Update

10:30AM: Market lifts off its worst levels but remains in negative territory as investors shrug off the latest piece of economic data... At the top of the hour, the Conference Board released a December Leading Indicators figure of 0.2%, matching economists' forecasts, while November's reading has been revised to a stronger 0.3%... While the report is designed to signal turning points in the business cycle and is back on the upside after five consecutive months of declines, the dated nature of the release has had little impact on either bonds or equities...NYSE Adv/Dec 734/2069, Nasdaq Adv/Dec 850/1824

10:00AM: Major indices continue to sport widespread losses as the bulk of sector leadership remains negative... Retail, energy and consumer discretionary have all lost more than 1.0% early on, while technology has been weak across the board despite early gains in semiconductor... Homebuilding, transportation, telecom services, financial, materials and utility have also lost ground while relative strength has been seen in biotech and managed health...NYSE Adv/Dec 744 /1811, Nasdaq Adv/Dec 676/1818

9:40AM: The market opens lower, in line with futures indications, as investors maintain a cautious outlook on equities... A mixed batch of earnings reports and guidance from a handful of industry leaders, in particular eBay's (EBAY 86.65 -16.40) Q4 disappointment and discouraging outlook, has again been the catalyst keeping buyers at bay and invoking an underlying sense of nervousness over the short term, despite fundamentals remaining fine for long-term investors... Separately, December Leading Indicators (consensus +0.2%) will be out at 10:00 ET...

anyone else having problems with DU last night and today some times i cant get in i wonder if its something to do with the party in dc?

http://finance.yahoo.com/mo

[RawMaterials]

25. General Dynamics unit awarded $5.5M Navy sub deal

General Dynamics unit awarded $5.5M Navy sub deal (GD) By Heather Wilson
SAN FRANCISCO (CBS.MW) -- General Dynamics (GD) said Thursday that its General Dynamics Electric Boat unit has been awarded a $5.5 million contract modification by the U.S. Navy. Under the terms of the deal, General Dynamics will continue to perform nuclear-maintenance work on Navy submarines at a Naval submarine base in Groton, Conn. The initial contract was awarded in 2001 with a total potential value of $89 million over 5 years.

More Free money for the war profiters

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7B6566B046-875F-4AEE-ACF6-F34EB195BD4C%7D&

[RawMaterials]

26. Nasdaq leads retreat on eBay results

NEW YORK (CBS.MW) -- U.S. stocks traded lower Thursday after eBay's fourth quarter earnings miss and disappointing outlook raised fresh concern about slowing growth in corporate profits for 2005.

More positive data

After a flurry of upbeat economic reports in the prior session, investors were offered fresh evidence that the U.S. economy is in good shape.

The index of U.S. leading economic indicators for December rose by 0.2 percent, the second straight gain after five months of decline, the Conference Board reported. The increase was in line with forecasts.

Oil, dollar, gold, bonds

As investors grapple with a fresh round of mixed earnings reports, they can take some comfort from a drop in crude-oil prices
Crude for February delivery was down 10 cents, at $47.45 in morning trading on the New York Mercantile Exchange.

The euro was down 0.5 percent, at $1.2940. Against the Japanese yen, the greenback edged up 0.2 percent, at 102.92. Read currency report

Gold futures traded lower as strength in the dollar sapped investor interest in the precious metal.

Gavel comes down on eBay

EBay Inc. shares tumbled in morning trading after the online auction company's fourth quarter earnings came up a penny short of analyst estimates, due to higher advertising costs and increased investment. The company also cut its first quarter outlook.

The earnings miss prompted broker downgrades from Deutsche Bank, Piper Jaffray, Friedman Billings Ramsey and American Technology Research

Planes

The latest batch of airline results confirms the industry is struggling with rising energy prices and intense competition.

Delta Air Lines (DAL: news, chart, profile) said its loss expanded to more than $2 billion in the fourth quarter, mostly on write-down of holdings in other airlines and the spike in fuel costs. In thin pre-open trading, the airline's shares tumbled 4.7 percent to $5.67.

http://cbs.marketwatch.com/news/story.asp?page=2&guid={1308AC51-40B2-40C6-B763-CE999B365340}&siteid=mktw

[RawMaterials]

27. 1156 EST market update

11:30AM: Equities still on the defensive as buyers remain a reluctant bunch in the early going... Bucking the bearish trend, however, has been semiconductor (+0.7%), which may be finding renewed buying interest from many funds looking to reduce their positions in the Internet space following eBay's (EBAY 84.44 -18.61) quarterly disappointment... Underpinning the sector's unusual strength in a down market have been ALTR (+2.7%), XLNX (+2.3%), NVLS (+1.7%), BRCM (+1.7%) and AMAT (+1.6%)...

Meanwhile, investors will get their last piece of scheduled economic data today around 12:00 ET, when the January Philadelphia Fed manufacturing index (consensus 25.0) is released... NYSE Adv/Dec 1041/1942, Nasdaq Adv/Dec 1022/1798

11:00AM: Little changed since the last update despite continued weakness in crude oil prices... The commodity ($47.25/bbl -$0.30) has traded lower following a bigger than expected rise in weekly oil inventories last night... Crude inventories rose by 3.4 mln barrels (consensus +1.0 mln) while distillate stockpiles rose 800K (consensus +500K)... Analysts had expected supplies to increase due to arrivals from a backlog of imports that refiners delayed until after the first of the year in order to reduce tax bills...NYSE Adv/Dec 757/2178, Nasdaq Adv/Dec 844/1946

[54anickel]

28. 12:05 number and yada - you'll put an eye out on them charts!

Dow 10,513.96 -26.01 (-0.25%)
Nasdaq 2,061.92 -11.67 (-0.56%)
S&P 500 1,179.53 -5.10 (-0.43%)
10-yr Bond 41.93 +0.06 (+0.14%)
30-yr Bond 46.87 +0.18 (+0.39%)
NYSE Volume 745,562,000
Nasdaq Volume 1,082,183,000

12:00PM : The indices close in on their best levels midday but remain under pressure as the underlying sentiment remains cautious following a mixed batch of earnings reports... A Q4 earnings miss and meager outlook from eBay (EBAY 84.13 -18.92) has fueled the overall apprehension on the part of buyers while mixed earnings results and guidance from Ford (F 13.75 -0.18), Citigroup (C 47.87 -0.17), United Healthcare (UNH 86.60 -1.68) and AT&T (T 18.30 -0.21), to name just a few, has also prompted broad-based weakness...
Not even lower crude oil prices ($46.60/bbl -$0.95) following the largest increase in weekly oil inventories - crude inventories rose by 3.4 mln barrels (consensus +1.0 mln) while distillates climbed 800K (consensus +500K) - in almost three months has been enough to reignite buying interest... Losses in excess of 1.0% have been witnessed in retail, airline, homebuilding and consumer discretionary while financial, energy, materials and utility have also shown weakness... Technology, however, has recovered some ground midday due to strength in semiconductor (+0.9%) and hardware (+0.6%) while software and biotech have also seen modest gains...

Treasuries have remained relatively stable all morning in quiet trade, as the 10-year note is still off 5 ticks to yield 4.19%, while the dollar has strengthened against the euro (1.2947) and yen (103.36) following Fed official Poole's forecast for continued economic growth... Separately, Dec leading indicators came in at 0.2%, in line with forecasts, but while much of the report's data is rather predictable, the market has viewed the release as a nonevent...NYSE Adv/Dec 1076/1981, Nasdaq Adv/Dec 1075/1805

11:30AM : Equities still on the defensive as buyers remain a reluctant bunch in the early going... Bucking the bearish trend, however, has been semiconductor (+0.7%), which may be finding renewed buying interest from many funds looking to reduce their positions in the Internet space following eBay's (EBAY 84.44 -18.61) quarterly disappointment... Underpinning the sector's unusual strength in a down market have been ALTR (+2.7%), XLNX (+2.3%), NVLS (+1.7%), BRCM (+1.7%) and AMAT (+1.6%)...

Meanwhile, investors will get their last piece of scheduled economic data today around 12:00 ET, when the January Philadelphia Fed manufacturing index (consensus 25.0) is released... NYSE Adv/Dec 1041/1942, Nasdaq Adv/Dec 1022/1798


Advances & Declines
NYSE Nasdaq
Advances 1190 (36%) 1123 (36%)
Declines 1873 (57%) 1780 (58%)
Unchanged 201 (6%) 146 (4%)

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

Up Vol* 252 (37%) 445 (43%)
Down Vol* 409 (60%) 562 (55%)
Unch. Vol* 12 (1%) 11 (1%)

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

New Hi's 42 38
New Lo's 29 36


And the buck:

Last trade 83.87 Change +0.27 (+0.32%)

Settle 83.60 Settle Time 23:38

Open 83.50 Previous Close 83.60

High 83.99 Low 83.40

[54anickel]

30. Another Wal-Mart to be a union shop

Retail chain may challenge quick certification by Quebec board

http://www.chron.com/cs/CDA/ssistory.mpl/business/3000229

TORONTO - A second Wal-Mart store in Quebec received union certification after a majority of the store's employees signed cards indicating the Canadian arm of the United Food and Commercial Workers Union was their official agent for collective bargaining, the union said Wednesday.

The union and Wal-Mart Canada, a unit of Wal-Mart Stores, already are negotiating a contract for another store in Jonquiere, Quebec. That store, which Wal-Mart revealed hasn't been profitable since it opened a few years ago, was automatically certified in August.

Wal-Mart Canada spokesman Andrew Pelletier said the company is reviewing all its options, including a legal challenge to the decision by the Quebec Labour Relations Commission that certified the union after the majority of the 200 store employees in Saint Hyacinthe signed union cards.

Pelletier said that while Wal-Mart respects the laws and legal process in Quebec, he called the decision to automatically certify the store "undemocratic."

more...

Now I've got that stupid "Blame Canada" song from South Park stuck in my noodle. :evilgrin:

[54anickel]

31. Nation's Retailers Face Challenging 2005

http://story.news.yahoo.com/news?tmpl=story&cid=509&ncid=749&e=10&u=/ap/20050119/ap_on_bi_ge/retail_sales_outlook

NEW YORK - After frustrating the nation's retailers throughout the holiday shopping season by waiting until the last minute to buy gifts, consumers are not expected to give merchants much relief in 2005.


With gasoline prices still high and the job market still volatile, consumers — particularly those that shop at discounters and mid-tier department stores — are expected to remain frugal. Rising interest rates will also add to consumers' expenses.


"Gasoline prices certainly have impacted middle-income and lower-income shoppers. It is causing them to reconsider discretionary items and big ticket purchases," said C. Britt Beemer, chairman of America's Research Group, based in Charleston, S.C. "On the job market side, there are new jobs being added, but employees are not seeing the kind of pay rises they used to make. And they're not as willing to go out and spend those extra dollars."

snip>

The bright spot remains well-heeled consumers, who have been buying mink ponchos and bangles as well as status handbags and jeans, translating into robust sales for stores like Neiman Marcus Group Inc. and Nordstrom Inc. But these upscale merchants need to keep up with trends and offer new enticements to shop and buy if they want sales to continue to hum. Coach Inc., for example, is stepping up its offerings in high-end tote bags, which are replacing women's briefcases.

snip>

Beemer also suggested that the political debate over overhauling Social Security (news - web sites) is fueling consumers' concerns about retirement, which could cause them to pull back further.

Good move Shrub! Seems the demon seed just spreads shit where ever he goes.

[54anickel]

32. It Just Doesn't Matter

http://www.gold-eagle.com/editorials_05/rostenko011705.html

snip>

The dollar has been in decline for years. But we're told it doesn't matter. A weaker dollar, according to any Econ 101 textbook "makes domestic goods more competitive in overseas markets." Interesting then, that our trade deficit stands at yet another record high, the gap wider than ever. Apparently foreigners aren't as much in the market for Britney Spears action figures and "Oprah" magazine as we'd like to think.

The economic brainiacs at CNN/Money, that bastion of cutting edge economic thought and financial insight, stated last November that "manufacturers such as U.S. automakers typically cheer a weaker dollar..."

Tell that to the 8,000 GM workers which will be losing their jobs this year, and joining the tens of thousands who have been canned over the past three years. Four consecutive years of job cuts while the weakening dollar was supposed to sell more cars. Reuter's reports: "Weak dollar hanging over U.S. automakers." And they DON'T mean that there's an abundance of dollars falling from the sky in Detroit.

snip>

But we're told it doesn't matter. Treasury Secretary John Snow informs that the huge gaping chasm between imports and exports simply demonstrates that foreigners just plain love us and can't wait to invest more money in the U.S. Oh, that and the fact that "The economy is growing at such a fast rate that it is generating lots of disposable income... some of which is used to buy goods from our trading partners."

That must be all the disposable income left after the average American family banks its average $80 of savings for the year. I find it fascinating that with all the disposable income this steamy fireball of a recovery is generating, household debt stood at 115.3% of disposable personal income in the third quarter of 2004. That's an all-time high for that figure. Funny that Americans, with a hyper-abundance of disposable income are borrowing to make ends meet.

Never mind, folks. Snow says it's ok. It doesn't matter. In the land of milk and honey, debt is wealth, war means peace and a dollar sailing towards hell in the proverbial hand basket is a good thing. Who says George Orwell's dead?

more...

[54anickel]

33. EFFECTS OF CHINESE ACQUISITIONS (Willie)

http://www.gold-eagle.com/editorials_05/willie011805.html

This summer marked an historical development in the commodity arena, which can only be characterized as "guerrilla trade war." A pre-emptive attack on North American properties has begun. China has tendered an offer to purchase Noranda Copper. They submitted an offer to purchase undeveloped land in the vast energy fields of Alberta. They have approached Silver Standard for equity ownership. They have also approached Australia and Brazil to secure supplies of minerals. Their tactics have become more clever, with humanitarian goals as well as strong-arm methods in the bidding process. This is a huge sequence of events which strongly indicates intention by China to secure their supply chain. In early January, China tendered their boldest offer of all. They have submitted a bid to acquire the US energy firm Unocal, their first offer of a US company. This might actually awaken the US Sleeping Dog. Energy supply assurance strikes at the heart of national security. Danger is rising that when it comes to not only energy supplies, but also industrial metals and more, the US Economy might find itself on the outside looking in. Risks are rising that the USA might someday find itself locked out.

China has begun its bold attempt to execute an end run around the commodity market, to secure their future supply, and in effect to gradually lock out American customers. This is a brilliant pre-emptive attack, which US leaders do not recognize yet. To the untrained eye, this appears to be a positive development. It is, but mainly to investors and producers of gold, silver, copper, oil, gas, and other commodities. To all others, it is an utter curse yet to be acknowledged, and a precursor to trade war. The captured booty will be mineral and energy properties, which will elevate the tone of the commodity bull market and eventually trigger a bidding war on mining and energy stocks in the coming years. Political fallout is certain. Tensions will heighten.

This spring the US Economy suffered interruption to large Florida construction projects, due to unavailable cement supply. Such disruption will become commonplace across North America. Due to its size and authoritarian government, China will be better able to manage any new disruption as they secure future supply, whereas the USA is preoccupied by its inflationary machinery, financial speculation, housing bubble building, profligate consumption, general pervasive omnipresent waste, and war initiatives. China can also handle economic pullback and internal chaos far more capably than the USA. They can both subdue social disorder more easily, and absorb bank portfolio losses with less interruption. A recession in either nation would affect the world, since they are the factory workshop and the US is the debt-driven consumer behemoth. If more copper is gobbled up by Chinese interests across North and South America, a day will come when shortages rage acutely inside the US Economy while China hums along. China also has grown to become a large silver refiner. As they secure silver in raw commodity form, they will eventually release less and less refined silver to markets. They will keep it in China for their own usage in electronics and other applications. Karl Marx warned that a capitalist will sell you the rope to hang another capitalist. In this case, the USA will supply the shipping vessels to send commodity supply to China, as our nation suffers from lack of supply and we are cornered out. Some people such as former Treasury Secretary Robert Rubin (under President Clinton), US House Representative Ron Paul, and PIMCO bond king Bill Gross, have begun to sense our vulnerability, but to date, we have not executed on a single defensive action in response. US leaders are clueless economically, and asleep at the wheel when it comes to commodity supply.

The other purpose for Chinese acquisitions is to purchase expertise, intellectual capital if you will. The secondary benefit is worth far more than can be estimated. So far in the technology arena, the US has given away its principal comparative advantage as it has put into place enormous foreign direct investment within China. US corporations do this with open eyes willingly, as they seek the low-cost advantages. When Noranda Copper is purchased, active professionals come with the deal. China needs expertise to carry out its plans. They have educated workers, but they will need experience. Each acquisition offers additions to their expanding professional expert working class. Asia is educating over four times as many scientists and engineers as the United States and Canada, but they are way short in workers with strong experience and training in business.

THE NEW BATTLEGROUND OF SUPPLY CHAINS

more...

[spotbird]

34. There will be an end of day rally, but down for now.

DJIA 1/20/2005 12:52:11 PM 10,503.32 -36.65
-0.35%

The stock market cannot fall on the day of the coronation of the greatest leader for all markets in history.

[rkc3]

48. Wrong. Sorry, but it never came. Another day without hope in Amerika.

[54anickel]

35. Ritual Slaughter?

The cost of saving the dollar is to sacrifice U.S. asset bubbles

http://www.gold-eagle.com/editorials_05/willettalway011805.html

Peter Eliades, editor of the newsletter Stockmarket Cycles, noted in early 2005, “We have seen the worst opening three days of a new year in breadth in the history of the markets going back to '26”. Last week Bloomberg pointed out that the S&P 500 is off to its worst 10-day new year start since 1991 (Gulf War), and Trimtabs recently said that equity funds could see outflows in January for only second time in the last 15-years. Keeping in mind that interest rate/oil fears have recently been rekindled and uncertainty surrounding the Iraq election looms, will Mr. Eliades and others soon be telling us that January 2005 was one of the worst open months to a new year in the history of the markets?

Notwithstanding the limitations of short term forecasts, the speculator cannot help but deduce that these are not ordinary times. Indeed, the sharp reversal in equity market and U.S. dollar trends to begin 2005 are screaming that a change in investor sentiment is afoot. This may be the case not only because oil fears have quickly been rekindled, but also because of the viewpoint that ‘old’ White House and Federal Reserve Board policies have been exhausted. For example, Greenspan and the Fed are no longer anxious to keep interest rates low to stimulate the economy, but instead growing increasingly concerned about inflation. This outlook sharply contrasts the outlook leading into 2004, or when the Fed was promising to keep interest rates low for a ‘considerable period’ of time.

As for President Bush, he is still trying to concoct schemes to temporarily strengthen the U.S. economy and stock markets – the latest being to privatize Social Security – but he is also hinting that government spending will remain in check. If Bush is serious about attacking government spending this would not only contrast sharply the supply-side policies he has pushed through during his tenure, but also throw into question the unstated policy of ‘benign neglect’ with regards to the U.S. dollar.

The implications that rising interest rates and greater fiscal discipline pose to the U.S. financial markets cannot be overstated. Quite frankly, the emergence of ‘new’ policy mandates from Bush and Greenspan not only threaten to negatively impact economic growth, but also threaten to deflate the asset bubbles the ‘old’ policy goals helped create. With this in mind, what investors may continue to discover is that what is good for the U.S. dollar is not necessarily good for the U.S. financial markets.

Bulls Ignore Turning Point Speculations

more...

[54anickel]

36. 3 Dollar Collapse Scenarios

http://www.gold-eagle.com/editorials_05/laird011805.html

Well with all the dialog now about the foreign holders of US Treasuries and their Catch-22 scenario of holding and recycling US dollars, I have come to a conclusion.

No major holder of US dollars will willingly send the dollar into dollar hell. Because if they do that they go too. Its that simple. They are damned if they do and damned if they don't. So we can dispense with the notion of 1. Japan dumping US dollars. 2. China dumping US dollars, 3. China depeging the Yuan (renminbi). The MIDDLE EAST just might pull the pin though...

Aside from the Middle East grenade pin, what will happen is this rather:

Scenario 1: some simple small thing will compound into a crisis. It may be this year, or next year or the year after.

No one will deliberately mess with this dollar time bomb as far as the Asians and western economies are concerned. Ok it will be something like this: some smaller entity will dump some dollars. And some unforeseen chain will occur that is not in the financial models, or will have some unforeseen amplification, just like in the Asian currency crisis which started small and grew and spread all over Asia till once again the FED got involved and stopped it. One of these days....we won't be able to stop this event, it will happen in some UNFORSEEN MANNER.

Scenario 2: US consumer collapse ( most likely scenario of the three here)

big snip>

Scenario 3: **** Middle East retaliation for US democracy policy

more...

[54anickel]

37. Pay attention to how much debt is being created (Mogambo)

http://www.kitco.com/ind/Daughty/jan1902005.html

Marshall Auerback, one of the big dogs at the PrudentBear.com website, handily explodes the conceited stupidity that The Mogambo knows what he is talking about when, oops! Sorry! On re-reading the piece, he did NOT expose The Mogambo for the pretentious little twerp that he really is. What Mr. Auerback REALLY did is to explode the overarching stupidity that constantly lowering interest rates will always produce economic growth. This is important because this idiotic idea is the bedrock from which all of modern central bank theory springs. He writes, "It is generally assumed that increases in credit stimulate aggregate demand. In the short run that is always true. But in the long run it need not be true. The expansion of credit is an increase in debt. When debt levels are low, a credit expansion which increases debt does not leave a legacy which later suffocates demand, since the resulting still low level of debt is not yet a problem. But when debt levels are very high, the increases in debt created by credit expansion soon act as a burden on demand. It follows from the above that, as the level of debt relative to income rises, it should take larger expansions of credit to achieve any given percentage increase in demand, since the now high, and climbing, debt burden acts as a countervailing force to depress demand." As is proved by stopping by my house on almost any day, as I try and explain to my wife that what we really NEED around here is another mortar emplacement down at the end of the backyard, and she explains that we owe so much on the OTHER mortar emplacements that we simply can't afford another one.

But as long as the credit keeps expanding, which you can measure by total debt, then that means that people are still borrowing and spending money, and as it winds through the system there will be money flowing into everything, and that includes the stock market and the bond market and the housing market. So far so good.

In a related note, Total Fed Credit, which is the ultimate measure of "money out of thin air," went down by a whopping, and surprising, $11 billion last week. I am not sure what this means, but it is unusual, after all these years and years of the damnable Federal Reserve creating more and more money and credit, day and night. But if it continues long enough, then the money supply will start contracting. And while I am again not sure exactly what THAT means, either, the steel-trap mind of The Mogambo (STMOTM) notices that there are no economic theories that start out with "To get economic growth, first you need a shrinking money supply." Hahahaha!

That new lack of borrowing is why the chance of Congress authorizing the use of Social Security contributions to be invested in private accounts is almost sure to pass. And if it does NOT pass, then I will have this really surprised look on my face and people will say "Is something wrong with The Mogambo? I mean, look at his face!" and somebody else will say "Yes, by golly! It DOES look like something is ailing him. I wonder what we can do to help him?" and I tell them that giving me twenty bucks would go a long way towards making me feel better. But then they just stare at me and get all huffy and make some rude comment, and I never get the twenty bucks, which shows you just how deep their compassion runs, the little bastards.

But the subject was not my problems with things surprising me, and how I never get the twenty bucks, dammit. No, the subject was that if you really want to see the beginning of the Great Bear Market Which Signaled The End Of The World, then pay attention to how much debt is being created, because if credit is going up, then that means, as I never seem to tire of saying, that people are borrowing and spending. But when it starts going down, then people are not spending, and economic and financial things will start going down, too.

more...

[54anickel]

38. 1:15 sudden drop, and I've got to run for the afternoon

Dow 10,478.63 -61.34 (-0.58%)
Nasdaq 2,051.81 -21.78 (-1.05%)
S&P 500 1,175.49 -9.14 (-0.77%)
10-yr Bond 4.167% -0.02
30-yr Bond 4.662% -0.007
NYSE Volume 931,963,000
Nasdaq Volume 1,307,749,000

1:00PM: More of the same as the major averages continue to vacillate in roughly the same ranges... Extending yesterday's drubbing in the wake of more varied quarterly results has been the airline sector (-1.5%)... Delta Air Lines (DAL 5.47 -0.48), which will face significant pension funding obligations in 2005, has paced the way after losing $5.88 per share in Q4, more than the ($5.51) analysts had anticipated, due to higher fuel costs...
Continental Airlines (CAL 9.68 +0.23), however, has caught a bid as its Q4 loss of $2.62, albeit much larger than a loss of $0.58 a year ago, was much narrower than expected... NYSE Adv/Dec 1103/1997, Nasdaq Adv/Dec 1052/1897

12:30PM: Market still struggling to offset broad-based weakness as sellers remain an active group... Meanwhile, investors have received an update on regional manufacturing activity as the volatile Jan Philadelphia Fed index checked in at 13.2 (consensus 25.0)... With 0 as a breakeven point, marking the difference between expanding or contracting activity, today's measure continues to show strong growth, albeit at a slower pace than seen in late 2004...

The Philly decline, combined with the lower level for the Jan NY manufacturing index, argues for a decline in the national ISM manufacturing index following back to back gains...NYSE Adv/Dec 1104/1989, Nasdaq Adv/Dec 1145/1767

[Pegleg Thd]

39. What did the royal

fumducker say in his diatribe about us that is making the rich angry.

[loudsue]

40. I think it has to do with the end of the facade. They've held him aloft

as long as possible to get him inaugurated, and now, those bubbly little props come out from under him.

:tinfoilhat:

Ok, prolly not. But I've wondered all along how this market has been holding itself up.

Once again, :loveya: Thanks, Marketeers! :yourock:

:kick::kick:

[spotbird]

41. A wee bit of a rally, -41.46

DJIA 1/20/2005
3:11:27 PM 10,498.51 -41.46
-0.39%

[spotbird]

42. I'm glad I didn't bet the farm today'd be black, -52.17

Will the close be above 10,500? Not looking good, but stranger things have happened.
DJIA 1/20/2005
3:37:14 PM 10,487.80 -52.17
-0.49%

[spotbird]

43. Nasdaq down 1% -20.73

NASDAQ 1/20/2005
3:40:25 PM 2,052.86 -20.73
-1.00%

[spotbird]

44. A close below 10,500, four more years of prosperity.

DJIA 1/20/2005
4:03:30 PM 10,471.47 -68.50
-0.65%

Congratulations Mr.President, you have the confidence of the world.

[DoBotherMe]

45. Closing numbers and blather

Dow 10,471.47 -68.50 (-0.65%)
Nasdaq 2,045.88 -27.71 (-1.34%)
S&P 500 1,175.41 -9.22 (-0.78%)
10-Yr Bond 41.65 -0.22 (-0.53%)
NYSE Volume 1,691,951,000
Nasdaq Volume 2,228,167,000

Close: The market opened lower, adversely influenced again by respectable but not excellent earnings, as an overall negative sentiment remained intact, extended yesterday's thrashing and pushed the major indices to new lows for the year... The Dow and S&P have both lost roughly 3.0% so far in 2005 while the Nasdaq has nearly doubled those declines (-5.9%)...
eBay's (EBAY 83.49 -19.56) Q4 earnings disappointment and discouraging FY05 outlook set the underlying cautious tone as investors continued to digest a mixed batch of earnings reports and guidance from blue chips like AT&T (T 18.12 -0.39), Citigroup (C 47.79 -0.25), Ford (F 13.45 -0.48) and United Healthcare (UNH 86.75 -1.53)... Even though operating earnings on the S&P overall continue to come in well ahead of forecasts, and on pace to post at least 17% growth this quarter, the market remains frustrated with the lack of follow through for buyers... Also out with results, Continental Airlines (CAL 9.34 -0.11) reported a narrower than expected Q4 loss but it was not enough to offset enormous losses from Delta Air Lines (DAL 5.35 -0.60) and keep the airline sector (-2.9%) from plunging...
Virtually every sector extended Wednesday's weakness, with losses of more than 1.0% realized in Internet, retail, homebuilding, managed health care, transportation, communications equipment, telecom services, disk drive, consumer discretionary and energy... Even a 1.3% decline in crude oil prices ($46.91/bbl -$0.64), under pressure following the biggest increase in weekly oil inventories in nearly three months, failed to keep sellers on the sidelines... In economic news, two releases hit the wires today...
...

[54anickel]

46. Heh-heh, Ya-hoo playing games with the decimal point on the bonds

today?

Here's a bit more o' the blather:

First was the fairly dated Dec leading indicators, which matched forecasts of 0.2%, followed by the volatile Jan Philadelphia Fed index, which came in at 13.2 (consensus 25.0), showing a slower pace of manufacturing expansion than in 2004 but still exhibiting respectable growth... While neither had much of an impact on equities, bonds embraced the larger than expected decline in the Philly Fed report, as the treasuries turned positive and closed the 10-year note up 3 ticks to yield 4.15%...DJTA -1.1, DJUA -0.5, DOT -0.4, SOX -0.8, XOI -1.1, NYSE Adv/Dec 1006/2276, Nasdaq Adv/Dec 956/2141

[durablend]

47. Poor wittle Ebay...

That's what they get for raising fees through the roof and selling out to China.

"Hurts, don't it!"

[54anickel]

49. Stocks end at new lows for the year

EBay tumbles on profit miss, lackluster outlook

http://cbs.marketwatch.com/news/story.asp?guid=%7B1308AC51%2D40B2%2D40C6%2DB763%2DCE999B365340%7D&siteid=mktw&dist=

NEW YORK (CBS.MW) -- U.S. stocks sank to new lows for the year Thursday as eBay's fourth-quarter earnings shortfall and disappointing outlook raised concern about a slowdown in corporate profit growth in an environment of rising interest rates.

The Dow Jones Industrial Average ($INDU: news, chart, profile) fell to a six-week low, sliding 68.50 points, or 0.7 percent, at 10,471.47.

snip>

The Nasdaq Composite Index ($COMPQ: news, chart, profile) fell 27.71 points, or 1.3 percent, to 2,045.88. A sharp drop in the Internet sector ($GIN: news, chart, profile) , tied to eBay's results, sent the tech-rich index to a more than two-and-a-half month low.

Ebay (EBAY: news, chart, profile) ended down $19.72, or 19.1 percent, at $83.33 amid a handful of analyst downgrades.

The S&P 500 Index ($SPX: news, chart, profile) fell 9.22 points, or 0.8 percent, to 1,175.41, taking the broad gauge to its lowest point since November 30.

"People are very concerned about the rate of growth of profits going forward vis-à-vis the rate of growth we saw in the last quarter and all of last year," said Mark Bryant, senior vice-president, at Brean Murray.

snip>

Most notably, manufacturing in the Philadelphia region expanded at its slowest pace in 18 months in January, the Federal Reserve Bank of Philadelphia reported. The Philly Fed's activity index fell to a reading of 13.2 in January from 25.4 in December.

The decline was much larger than expected. Economists had been projecting that the index would inch down to 25.3, according to a MarketWatch survey.

But there was some comfort to be had from the latest reading of the index of U.S. leading economic indicators, which the Conference Board said rose by 0.2 percent in December -- the second straight gain after five months of decline. The increase was in line with forecasts.

The behavior of the index, designed to forecast economic trends six to nine months ahead, "is consistent with the economy continuing to expand in the near term, but more slowly than its long-term trend line," the Conference Board said. :eyes:

more...

[54anickel]

50. Plunge in prices hits Sony profits

http://news.ft.com/cms/s/613f26aa-6abc-11d9-9357-00000e2511c8.html

Sony on Thursday warned that operating profits this year would be much lower than forecast, amid plunging prices across the consumer electronics industry and rapid shifts in the markets for television and audio equipment.


The Japanese consumer electronics and entertainment group startled investors when it said operating profits in the year to the end of March would be 31 per cent lower than it had expected at the end of the first half. The news comes after similar warnings from Samsung and Pioneer.

Together they are a sign that the new generation of digital consumer electronics products has not necessarily led to higher profits, as the industry had hoped. It also throws into doubt Sony's Y335bn ($3.26bn) restructuring plan announced in October 2003 in response to another earnings disappointment which was designed to ensure a recovery in its electronics business.

The group is now forecasting operating profits this year of Y110bn (instead of Y160bn), on sales of Y7,150bn (instead of Y7,350bn) an operating-profit margin of just 1.5 per cent.

Sony said 80 per cent of the downward revision was due to price declines, particularly in televisions, DVD recorders, personal audio products and semiconductors and other devices.

more...

[54anickel]

51. Is a Secular Bear Market Inevitable? (Long, but a good read)

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=39765

The United States faces a high probability of "Economic Armageddon" according to Stephen Roach, chief economist at Morgan Stanley. "Balance the budget? Fugitaboutit" says PIMCO's Bill Gross. Meanwhile Warren Buffett has described financial derivatives, with contracts totaling $84 trillion in notional value concentrated among a handful of large US commercial banks, as "financial weapons of mass destruction" (2002 letter, p.15) while moving $20 billion out of the US dollar into foreign currencies.

Put mildly, some marquee names in the financial realm are sounding cautious regarding our financial future. At the same time today's business news carries a ready stream of articles and commentary from experienced financial professionals which generally suggest that although there may be room for concern regarding oil prices, dollar weakness and debt levels the economy can be expected to continue expanding at a moderate rate and financial asset prices, although not at historically low levels, offer reasonable value for the patient investor.

The diligent investor, having taken the time to follow what these professionals have to say, might be excused for feeling concerned, confused and frustrated. What hope do they have of untangling contradictory views from some of the best in the business? And, importantly, if the long lasting financial devastation of a secular bear market (Dr. Roach's economic Armageddon) is a possibility what chance do they stand of determining the likelihood of such an event? Fortunately our financial future can be considered in a fundamental and readily understandable yet widely overlooked manner, as will be evidenced within this article.

Two secular bear markets have occurred during the past 100 years of US history. 1929 saw the beginning of a 90% decline in equity values which transpired over the subsequent three year period. During the 1930's the US economy experienced the failure of thousands of banks and unemployment over 25% with grinding depression lasting until world war displaced depression as the overwhelming economic force. The Dow industrial index didn't regain its 1929 peak until 1954, 25 years later. The second secular bear growled its way through the 1970's, and it was truly secular in nature. Contrary to a common belief equities didn't simply move sideways through the 1970's before moving to new highs with the great bull market starting in 1982. This illusion is caused by the inflation which plagued the period. Deflating the S&P 500 with the CPI (see Chart 1) reveals that the market peaked in 1969, not 1973, before falling 64% over the subsequent 13 years, ultimately bottoming in 1982. Stock prices failed to exceed the 1969 peak until 1993, 24 years later, and didn't move convincingly through the 1969 level until 1995. At this point the weary, and rather aged, investor still faced capital gains taxes on a phantom 300% gain wholly due to inflation. Covering this tax liability likely extended the true recovery period to within shouting distance of the bear market in stocks beginning in 2000, the most recent peak in equity markets.

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