STOCK MARKET WATCH, Monday 14 February

[ozymandius]

Monday February 14, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 340 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 63 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 119 DAYS
DAYS SINCE ENRON COLLAPSE = 1177
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL ON February 11, 2005

Dow... 10,796.01+46.40 (+0.43)
Nasdaq... 2,076.66 +23.56 (+1.15)
S&P 500... 1,205.30 +8.29 (+0.69)
10-Yr Bond... 4.10% +0.02(+0.54)
Gold future... 422.00 +3.30 (+0.78)





GOLD, EURO, YEN, Dollars and Loonie

---

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

---

[54anickel]

1. Good Morning Ozy and all, and happy Valentines Day!...n/t

[54anickel]

2. More from Mr. Otmar Issing

Last entry at the Credit Bubble Bulletin (check out the money supply increases in the intro section on the way down the page!)

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

snip>

It is refreshing to read central banking philosophy from the well-grounded ECB perspective. What a contrast to that espoused by the Greenspan Federal Reserve. The ECB recognizes the necessity for adopting a long-term focus, while the Fed’s realm is the short-term and zealous activism. Mr. Issing exhorts that “central banks should certainly avoid contributing to unsustainable collective euphoria.” Mr. Greenspan has over recent years become a proponent of “the New Economy,” derivatives, structured finance, and even the liquidity and “flexibility” benefits of an expansive hedge fund community. Indeed, the activist Fed specifically targeted leveraged speculation and mortgage borrowings as the key reflating mechanisms in the post-technology Bubble environment. With short-term expedients come long-term costs and uncertainties.

There is today – in The Intoxicating Global Liquidity Bubble World – little appreciation that Mr. Greenspan’s short-term activism is coming home to roost. Back in November he made a remarkable comment: “Rising interest rates have been advertised for so long and in so many places that anyone who has not appropriately hedged this position by now obviously is desirous of losing money.” If only the world’s marketable securities-based Credit systems and the massive global pool of speculative finance could be managed so easily. I would argue that the essence of Mr. Greenspan’s comments resides at the very heart of failed Fed policymaking - and attendant Monetary Disorder.

Ponder for a moment a scenario where, let’s say, the Fed had warned in 1999 that NASDAQ was poised to decline. Duly warned, investors, day-traders, Wall Street proprietary trading desks, hedge funds and others would surely have simply gone out and purchased put options and locked in bull market gains (choosing to buy insurance while playing the hot game for all it’s worth!). In theory, life in the markets would have been just swell.

But the reality of the situation was quite to the contrary. NASDAQ was in a powerful yet unsustainable Bubble. When the Bubble eventually burst, those that wrote NASDAQ derivative exposure were on the hook for major losses. And it is important to appreciate that those writing put options and other derivative protection are generally thinly capitalized financial institutions and speculators. Such players must rely on “dynamic trading” hedging strategies that entail selling/shorting, in this case, NASDAQ stocks and instruments to offset the “insurance” exposure that escalates when a market commences a major decline. And when a large portion of the (fully-invested) marketplace acquires put options to “lock in a bull market,” this assures massive “dynamic” selling into a declining market with few willing and able buyers. The inevitable outcome is a collapse in marketplace liquidity.

Yet, there is more to this basic NASDAQ/”market hedging” example that may offer some insight into the current peculiar bond market environment. Let’s say the Fed warned of the coming NASDAQ decline in mid-1999. And, over the following few months, participants aggressively shorted tech stocks and NDX futures, while loading up on puts. The writers/sellers of these derivatives would then partially hedge their exposure by shorting individual stocks and/or indices. Hedges and bearish bets, rational ones at that, would be put on in size.


snip>

So if reflation retains its vigor; economies their resiliency; and the Global Liquidity Bubble its tenacity; what the devil is the 10-year Treasury yield doing at 4.09%? Has the recent drop in yields (and yield curve gyrations) been fundamentally or technically driven? Are we in the midst of the best of times for the bond market or, instead, an environment characterized by instability and dislocation? How exposed has the marketplace become to an abrupt reversal of fortunes? I suspect that short covering and the unwinding of derivative hedges is placing the marketplace in an increasingly vulnerable position. And it’s always these abrupt market “Vs” that cause the derivative players the most grief. As was the case with NASDAQ, one day derivative traders can be panic buyers only to have a market reversal hastily transform them into aggressive sellers.

more...

[54anickel]

3. U.S. Stocks May Falter as 2005 Profit Outlook Fails to Improve

http://www.bloomberg.com/apps/news?pid=10000103&sid=aAlqqMSqKAe0&refer=us

Feb. 14 (Bloomberg) -- Faster-than-expected growth in U.S. companies' fourth-quarter earnings failed to trigger increases in profit estimates for this year. To investors such as Lester Rich, that's a sign any rally in share prices may falter.

``We no longer have a market that has hyper growth in earnings,'' said Rich, who helps manage $660 million in Malvern, Pennsylvania, for StoneRidge Investment Partners. ``We're likely to see a year without the market making a lot of progress.''

Standard & Poor's 500 earnings probably rose 20 percent, above the 15.2 percent that analysts expected on average when the quarter ended, according to Thomson Financial.

This year, S&P 500 profits will total $73.73 a share, according to the average estimate of analysts in a survey by Thomson. Before the fourth-quarter results were released, the average was $73.79. The figures reflect each company's earnings or loss per share and its weight within the index.

Slowing revenue growth and higher costs for raw materials, such as oil, may crimp profits.

more...

[54anickel]

4. Betting on a sound retirement

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

snip>

Unfortunately, the Myth Busters don’t take on any investment myths, like “Stocks always go up over the long term” or “A stock always goes up when the CEO makes a TV deal from prison.” Nor do they test the old saw, “How a portfolio performs is largely determined by asset allocation.” In other words, no matter how much time you spend taking down tips from CNBC, what really matters is how you divvy up the assets between stocks and bonds. At least that’s the theory.

As an article in the February issue of Financial Planning magazine points out, this myth originated from an academic study of investment returns generated by pension plans over a ten-year period.

snip>

Another financial myth is that the stock market must do well if earnings are moving higher. Well of course that’s a widespread belief. That’s what stocks do. They go up because earnings go up, at least over the long term. And sometimes they go up because people like to pay more and more for those earnings, even if a big chunk of said earnings is made up out of thin air. But that’s not the point here. The point here is that during a particular quarter, stocks (overall) perform best when earnings are showing negative year-over-year comparisons. That’s according to Mark Hulbert’s recent New York Times article which is artfully illustrated with a complex, but colorful graph. That’s because when corporate profits are generally rising, interest rates are percolating higher too.

M.I.T. professor Jonathan W. Lewellen, a co-author of the study cited in the article, says that this relationship hasn’t held true the last couple of years because the Fed has kept rates artificially low. To see just what an anomalous situation the Fed has instigated, consider the professor’s findings that since 1927, stocks have advanced at triple their long term average during quarters when earnings were 10-25% lower year-over-year.

But with the Fed feeling less generous, at least when it comes to short term rates, and with earnings expected to increase at double digit rates this year, investors may get a chance to see history repeated.

Higher earnings and lower stock prices? That’s one myth investors hope gets busted.

more...

[MARALE]

5. S&P futures vs fair value:

http://www.reuters.com/financeBriefing.jhtml?type=inPlay

+0.8. Nasdaq futures vs fair value: flat.
13 min ago
Futures market versus fair value still exhibiting a neutral tone this morning and a relatively steady open for the cash market... Google (GOOG) should be in focus now that the lock-up period for 176 mln shares held by insiders has expired and the stock has been upgraded to Sector Outperform at CIBC... Other notable ratings changes include upgrades on GTW, COP, DUK and AMTD and downgrades on WB, WFC, BC, AH and NE

Rambus Antitrust case moves forward; Rambus wins venue dispute (RMBS)

[MARALE]

6. HUD: Regulation Hurts Affordable Housing

http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=7621057

The U.S. Housing and Urban Development Department said regulatory barriers -- from fees levied on developers to environmental regulations used to oppose development -- can boost building costs by as much as 35 percent.

Such obstacles to development have become more widespread in suburban and some rural areas since HUD's first report in 1991 on barriers to affordable housing, the department said.

...

Fees charged to developers, for example, can exceed $10,000 per unit in some communities, and more than $45,000 per unit in some California communities, HUD said.

These fees are politically more palatable than property tax increases, HUD said.

A "not-in-my-backyard" attitude that HUD said was common in suburban areas also leads local governments to pass affordable housing restrictions.

[54anickel]

7. Carly may get $42 million

http://money.cnn.com/2005/02/12/news/newsmakers/fiorina_severance/index.htm

Severance of $21.4M excludes another $21M in options, restricted stock and pension: report.
February 12, 2005: 4:16 PM EST

NEW YORK (CNN/Money) - Ex-Hewlett-Packard CEO Carly Fiorina will get a severance package worth about $21.4 million, but stands to reap another $21 million after she was forced out by the computer maker's board last week, a newspaper reported Saturday.

The additional amount reflects the estimated value of her Hewlett stock and options as well as her pension, which were not included in her severance package, the New York Times reported.

Fiorina was forced to resign Tuesday after the computer maker's board concluded she hadn't boosted Hewlett's (Research) sagging stock or its fortunes after the company's merger with Compaq Computer.

She will receive $14 million in severance pay and a $7.4 million bonus for 2004, according to terms of the agreement submitted Friday in regulatory filings -- even though Wednesday the board singled out her failure to accelerate the company's strategy, the newspaper reported.

more...

[54anickel]

34. Is HP chief's demise setback for women?

http://www.iht.com/articles/2005/02/14/business/women.html

The question was bound to come up: If Carly Fiorina were a man, would the outcome of her turbulent tenure as chief executive of Hewlett-Packard have been different?
.
Most management specialists say no. They contend that the company's misguided acquisition of Compaq and sluggish performance would have taken down any chief executive, of either sex.
.
And many note that Hewlett-Packard has tried hard to avoid any taint of sex discrimination; one woman, Ann Livermore, a respected Hewlett executive, is a possible candidate to replace Fiorina, and another, Patricia Dunn, is the nonexecutive chairman of Hewlett's board.
.
Still, the specialists say, it is naïve to pretend that Fiorina's downfall will not have an impact on women's aspirations. Her sex, they say, has intensified the spotlight on the event and appeared to give those who look skeptically at women in high places more arguments for their position.
.
"Failure is not a contagious disease, but this is a minor setback for women nonetheless," said Walter Scott, a professor at the Kellogg School of Management at Northwestern University. "There are still a lot of people who do not feel women are as accomplished as men, and they will simply shake their heads and say, 'I told you so."'

more...

[ozymandius]

8. Good morning everyone. Here's the wrapup.

WrapUp by Tim W. Wood

THE DOW REPORT
A Dow Theory Overview of the Current Setup, Part I


Today I want to do a brief recap of the current market setup as it relates to the Dow theory. In doing so, we must begin with the big picture and then narrow our focus from there.

Below is a chart of the Dow Jones Industrial Average and the Dow Jones Transportation Average from back in 1999 and 2000. As the Industrials moved into July and August of 1999 they were unconfirmed by the Transports. This non-confirmation is marked with a red trend line on the chart below. The upper chart is the Industrials. Then, in September 1999, both averages moved below their previous secondary reaction low points, which are marked in blue below. This in turn produced a Dow theory sell signal.

-cut-

However, from the October 1999 low, the Industrials were able to make another new high as they advanced into January 2000. This new high was also unconfirmed by the Transports. From this unconfirmed high, both averagesbroke once again below their previous secondary low points, which is marked in pink. This served to reconfirm the 1999 sell signal as well as to mark the beginning of the first leg down of the Phase I of this great bear market. The 1999 sell signal is a Primary Dow theory sell signal. In simple terms this means that any price action, occurring after the Primary sell signal, is subordinate to that signal, until/unless the Primary signal is corrected. To date this has not occurred and this Primary Dow theory sell signal still stands as a “Master” signal, if you will.

more...

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

[54anickel]

9. Dollar Watch

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

Last trade 83.81 Change -0.76 (-0.90%)

Settle 84.57 Settle Time 23:37

Open 84.10 Previous Close 84.57

High 84.53 Low 83.78


The March Dollar was lower overnight and is breaking out below the 20- day moving average crossing at .8398. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off last week's low, a test of this month's low crossing at .8327 is the next downside target. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

The March Euro was higher overnight and is breaking out above this year's downtrend line, which coincides with the 20-day moving average crossing at 129.683. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Multiple closes above the 20-day moving average would confirm that a short-term low has been posted. If March extends last week's rebound, the reaction high crossing at 131.320 is the next upside target. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

snip>

The March Canadian Dollar was higher overnight as it extends last week's short covering rally and has broken out above the 20-day moving average crossing at .8081. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Multiple closes above the 20-day moving average crossing at .8081 would confirm that a short-term low has been posted while opening the door for a test of the reaction high crossing at .8206 later this winter. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

The March Japanese Yen was sharply higher overnight as it rebounds off the 50% retracement level of last year's rally crossing at .9374. Stochastics and the RSI are turning bullish signaling that a low is in or is near. Closes above the 10-day moving average crossing at .9558 would signal that a short-term low has been posted. If March renews this winter's decline, the 62% retracement level of last year's rally crossing at .9254 is the next downside target. Overnight action sets the stage for a steady to firmer tone in early-day session trading.


Europe gold, silver move higher as dollar slides
http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH72154_2005-02-14_12-01-25_L14711650

LONDON, Feb 14 (Reuters) - Gold and silver prices were firm in Europe on Monday, underpinned by a sliding dollar as Japanese data threw up imbalances between Asian trade surpluses and U.S. deficits, dealers said.

snip>

The dollar dropped almost one percent against the yen and euro -- making dollar-priced gold more attractive for non-U.S. investors -- as Japan's current account surplus rose 35.1 percent in December to a record 1.616 trillion yen.

Dealers said, however, that investors might be reluctant to sell the dollar more aggressively before a much-awaited speech by U.S. Federal Reserve Chairman Alan Greenspan later in the week.

Greenspan will give twice-yearly testimony on monetary policy to the U.S. Senate on Wednesday and the House of Representatives on Thursday.

Dealers said the market would also focus on Tuesday's release of U.S. capital flows in December to see how well the country was funding its current account deficit.

more...


Dollar Slides as Oil Price Gains
http://biz.yahoo.com/rb/050214/markets_global_2.html

LONDON (Reuters) - The dollar slid about one percent against major currencies on Monday after robust Japanese trade data, but European shares clung to 32-month highs despite the stronger euro and a rise in U.S. crude oil above $47 a barrel.

Hawkish comments from ECB Vice President Lucas Papademos in the Handelsblatt newspaper gave investors an excuse to book profits on a recent rally in 10-year Bunds with yields rising 2 basis points on the day to 3.48 percent.

snip>

U.S. stock index futures point to a steady opening on Wall Street later on Monday after the Dow hit 2005 highs on Friday as the mood toward tech stocks brightened, helped by Apple Computer's announcement of a stock split. But European exporters suffered as the dollar fell against the yen, euro and Swiss franc after Japan posted a bigger-than-expected rise in its current account surplus, highlighting the continued imbalance between Asian trade surpluses and U.S. deficits.

The surplus rose by 35.1 percent in December from a year earlier to a record 1.616 trillion yen.

"The Japanese current account data undercut the dollar," said Adrian Foster, head of currency strategy at Dresdner Kleinwort Wasserstein.

snip>

HAWKISH ECB COMMENTS

Comments from the ECB's Papademos boosted the single currency after he said risks to price stability had increased recently and that the bank was ready to act if economic recovery added to these pressures.

more...

Dollar’s Woes Continue

No Key Data

The dollar extended its losses in early Monday trading against the majors, still reeling from last week’s US trade deficit figure. The week ahead will see several key economic events likely to drive currency moves, including Fed Chairman Greenspan’s congressional testimony, US capital flow data, US retail sale, the Philadelphia Fed index and US PPI.

Yen Jumps on Data

The yen received a shot in the arm at the start of trading today following earlier releases of upbeat economic data. Japan’s December current account surplus sharply exceeded economists’ forecasts, surging 35.1% compared to estimates for a 4.5% increase. The unadjusted current account surplus spiked up to 1.6160 trillion yen. Furthermore, the 2004 current account surplus hit a record high at 18.59 trillion yen. Also released today was December industrial production, which was upwardly revised to –0.8% m/m, versus a preliminary –1.9% m/m. Japan’s January consumer confidence improved to 47.4, up from December’s 44.0.

USDJPY broke beneath the 105-level to 104.66. Support starts at 104.60, followed by 104.20 and 104. Additional floors will emerge at 103.80, followed by 103.50 and 103. Meanwhile, gains will target resistance at 105, backed by 105.40 and 105.80. Subsequent ceilings will emerge at 106, followed by 106.30 and 106.70.


Euro Edges Near 1.30

The euro climbed just shy of the 1.30-level overnight to hit a session high at 1.2989. Speaking earlier in the session, the ECB’s Papademos said that risks to price stability have increased stronger recently. He said liquidity, M3 money supply, and credit growth were showing inflation risk of further acceleration given further economic recovery. Papademos added that the ECB remains vigilant, would is ready to act if the probability of rising inflation increases.

more...

[54anickel]

10. 10:00 EST numbers and blather

edit to update with 10:00 blather

Dow 10,785.52 -10.49 (-0.10%)
Nasdaq 2,080.17 +3.51 (+0.17%)
S&P 500 1,204.78 -0.52 (-0.04%)
10-yr Bond 4.088% -0.01
30-yr Bond 4.468% -0.02
NYSE Volume 159,680,000
Nasdaq Volume 273,156,000

10:00AM: Stocks continue to trade in split fashion as there isn't a strong sense of conviction on either the bullish or bearish side of the aisle... Technology, however, has found some broad-based buying interest early on, with computer hardware (+1.4%) accounting for most of the momentum following positive comments from UBS about on Apple Computer (AAPL 83.02 +1.81)... Telecom services have also shown some strength on the heels of the proposed VZ/MCI merger while modest gains have also been realized in utility, drug and energy...
Showing weakness early on has been transportation, homebuilding, health care, retail and financial... NYSE Adv/Dec 1377/1191, Nasdaq Adv/Dec 1417/1125


9:40AM : Market opens with little enthusiasm, exhibiting caution in the wake of three straight weeks of gains for the Dow and S&P 500... Meanwhile, Verizon Communications (VZ 36.90 +0.59) has formally agreed to buy MCI Inc. (MCIP 19.40 -1.35) for $6.75 bln, bringing the total value of announced U.S. M&A deals in 2005 to almost $160.0 bln... But even though Verizon's confirmation provides optimism to the overall stock market, VZ's offer came in $0.55 bln less than Qwest's (Q 3.94 -0.21) $7.3 bln bid, offering no premium for MCI shares...

9:15AM : S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: flat.

9:00AM : S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: flat. Futures market versus fair value still exhibiting a neutral tone this morning and a relatively steady open for the cash market... Google (GOOG) should be in focus now that the lock-up period for 176 mln shares held by insiders has expired and the stock has been upgraded to Sector Outperform at CIBC... Other notable ratings changes include upgrades on GTW, COP, DUK and AMTD and downgrades on WB, WFC, BC, AH and NE

8:30AM : S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: +1.0. Still shaping up to be a modestly flat open for the indices... Financial stocks should be in focus after AIG received subpoenas from the NY Attorney General Spitzer and the SEC while Citigroup (C) plans to reduce its investment-banking work force by about 1,000 people... Aerospace / defense could also garner attention following news that the Air Force denied Lockheed Martin's (LMT) challenges to two classified contracts it initially awarded to Boeing (BA)

8:00AM : S&P futures vs fair value: +1.4. Nasdaq futures vs fair value: +1.5. Futures market suggesting a lackluster open for the cash market as investors show little follow through after Friday's solid gains... Verizon (VZ) has confirmed plans to acquire MCI for $6.7 bln and General Motors (GM) has agreed to pay $1.99 bln to Fiat SpA to prevent the forced buyout of Fiat's struggling auto unit, but there are no notable earnings reports or economic data to digest in the early going

[MARALE]

11. Oil Prices Climb Amid Thin Trading Volumes

http://www.forbes.com/home/feeds/ap/2005/02/14/ap1823673.html

Crude oil prices rose Monday amid thin trading volumes as the market looked for new direction.

Light, sweet crude rose 19 cents to $47.35 a barrel on the New York Mercantile Exchange in European trade. Heating oil prices also rose, by less than a cent, to $1.3122 a gallon.

...

OPEC did not make any production cuts at its last meeting in Vienna on Jan. 30, but said changes were possible before its next meeting on March 16.

On Friday, the International Energy Agency, which advises industrialized nations on energy policy, released its monthly report estimating that global oil usage for this year would rise by about 80,000 barrels daily - primarily on increasing demand from China.

[54anickel]

12. Tax Reform Looks for a Passing Lane

http://www.nytimes.com/2005/02/13/business/yourtaxes/13admi.html?pagewanted=1&adxnnl=0&adxnnlx=1108392619-p7+IvGKwokAfhIs1w946eg

FOR months, President Bush has pursued a two-step domestic strategy. Overhauling Social Security would come first, and only later would he try to revamp the federal tax code.

But with resistance to the Social Security plan growing almost daily in Congress, lawmakers may force Mr. Bush to revise his strategy and pursue his tax agenda faster than he anticipated. Many House Republicans are more interested in dealing with the tax code than with Social Security, but the political difficulties inherent in tax reform make the risks high.

So far, Mr. Bush has studiously avoided articulating a specific vision for tax overhaul. Instead, he has called vaguely for making the system "simpler" and "fairer" and appointed a bipartisan advisory panel to come up with actual proposals by July 31.

Republican allies of Mr. Bush have long said that the aim was always clear: a sweeping change from a system that taxes the money people earn to one that taxes the money they spend. There were multiple paths to that goal, but the bottom line would essentially be some sort of consumption tax.

But a growing number of Republicans, anxious about plans to partially privatize Social Security, are now pushing Mr. Bush to combine that goal with tax overhaul.

"We can deal with Social Security and taxes simultaneously," said Representative Bill Thomas, Republican of California and chairman of the House Ways and Means Committee, in a speech last month. "Sometimes, the more you include in a piece of legislation, the easier it is to pass."

more...

[54anickel]

13. Senate Republicans are ready to make it more difficult to use bankruptcy l

Senate Republicans are ready to make it more difficult to use bankruptcy laws to erase debt

http://www.chron.com/cs/CDA/ssistory.mpl/business/3037709

snip>

After nine years of failed attempts to rewrite the nation's bankruptcy laws by making it harder for people to escape their debts, Senate Republican leaders confidently predict they now will succeed, citing their new majority of 55 Republicans, 44 Democrats and one independent.

Banks and credit card companies, which have poured millions into lobbying for the bill, say it would stop abuse by debtors who shirk their debts.

But opponents of tightening bankruptcy laws say the bill is a reward for the financial institutions that shower Congress with campaign contributions. They say the bill won't stop unscrupulous lenders who seduce consumers into irresponsible spending with high-interest credit cards and loans.

Sen. Arlen Specter, R-Pa., chairman of the Senate Judiciary Committee, which could approve the bankruptcy measure this week, said Republicans are "going to press ahead on it" and Senate Majority Leader Bill Frist, R-Tenn., has pledged to bring it to the floor soon.


more...

[donkeyotay]

33. And half of bankruptcies are caused by medical expenses

And having health insurance is no guarantee of protection from bankruptcy. This was just out of a Harvard U study released 2/2/05 and online in the journal Health Affairs.

Bastards. No accountability for Republican crime, financial crime, the corporate crime wave in Iraq... but let's kick the working class in the teeth, again. Steal their SS and accuse them of class warfare if they complain.

Republican Bastards.

[54anickel]

14. Verizon Agrees to Buy MCI for About $6.7 Billion (Update1)

http://www.bloomberg.com/apps/news?pid=10000087&sid=aF.Z6NT2duy4&refer=top_world_news

Feb. 14 (Bloomberg) -- MCI Inc., the second-largest U.S. long- distance telephone company, agreed to be bought by Verizon Communications Inc. for about $6.7 billion, rejecting a higher offer from Qwest Communications International Inc.

The cash and stock offer from New York-based Verizon values Ashburn, Virginia-based MCI at $20.75 a share, where it closed Feb. 11, the companies said in a PR Newswire statement today. Qwest had raised a prior offer to $7.3 billion.

By choosing Verizon, MCI Chief Executive Officer Michael Capellas will combine with the largest U.S. telephone company, with a market capitalization of more than $100 billion. Qwest, with a value of $7.5 billion, is the smallest of four regional phone companies and has $17.2 billion in debt. Verizon will gain a 98,000-mile network and clients such as Hewlett-Packard Co.

``Verizon is in a position to maximize the value of MCI more than Qwest is,'' said Ivan Feinseth, a New York-based analyst at Matrix USA LLC, who has a ``buy'' on Verizon and a ``strong buy'' on MCI. ``Verizon has significantly more resources.''

MCI rose 29 cents in Nasdaq Stock Market composite trading Feb. 11. Shares of Verizon rose 27 cents to $36.31 in New York Stock Exchange composite trading.

more...


edit to add - so much for Qwest

http://www.bloomberg.com/apps/news?pid=10000103&sid=aBlS4Kn1ybZc&refer=us
Qwest Raises Offer for MCI to More Than $7 Billion, People Say

Feb. 13 (Bloomberg) -- Qwest Communications International Inc. raised its takeover offer for MCI Inc. to more than $7 billion, topping a bid by Verizon Communications Inc., people familiar with the matter said.

The offer from Denver-based Qwest, the No. 4 local-telephone carrier, was delivered Friday to Ashburn, Virginia-based MCI, the people said yesterday. Verizon, the largest U.S. phone company, earlier this week offered about $6.3 billion, matching Qwest's previous bid, people familiar with that offer have said.

Owning MCI would help Qwest manage debt of $17.2 billion and sell more services to large customers as demand for local calling slumps. MCI brings cash flow that may reach about $2 billion this year, a 98,000-mile network that carries Internet traffic in six continents and business clients including Hewlett-Packard Co.

``For Qwest, a bid for MCI is a matter of extended survival,'' said Thomas Friedberg, an independent Denver-based telecommunications analyst who owns Qwest shares.

more...

[RawMaterials]

15. U.S. Treasury Notes May Decline; Retail Sales May Have Gained Last Month

Feb. 14 (Bloomberg) -- U.S. 10-year Treasury notes may fall amid speculation a government report on retail sales will add to evidence the economy is expanding at a pace that will encourage the Federal Reserve to raise its benchmark interest rate further.

The Commerce Department may say tomorrow that sales excluding autos rose 0.5 percent last month, according to the median forecast of 63 economists surveyed by Bloomberg, after gaining 0.3 percent in December. The Fed has raised its target rate for overnight loans between banks six times since June.

``The way the U.S. consumer is spending is absolutely key for the bond market,'' said Christoph Rieger, a fixed-income strategist in Frankfurt at Dresdner Kleinwort Wasserstein. ``The Fed has said its policy will be driven by the incoming data.''

The 4 percent note maturing February 2015 was little changed at 99 7/32 to yield 4.09 percent at 8:40 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The yield, which moves inversely to the note's price, is up from 3.98 percent on Feb. 9. The 3 1/2 percent note due in February 2010, dropped almost 1/8, or $1.25 per $1,000 face amount, to 99 1/32, as the yield rose 2 basis points to 3.71 percent. A basis points is 0.01 percentage poinmt.

Treasuries also may fall on speculation Fed Chairman Alan Greenspan will offer an optimistic assessment of the economy when he presents his semiannual forecasts for inflation and economic growth to Congress Feb. 16

snip..

`More Hawkish'

``If Greenspan does signal that the Fed is about to remove the `measured' pace reference, the market will probably interpret that, short-term, as more hawkish,'' said Jan Lambregts, head of Asia Pacific research in the treasury department of Rabobank Singapore. ``There are some selling risks on Treasuries.''

Yields on 10-year Treasury notes may stay near 4 percent this year as inflation in the world's largest economy slows, according to Commerzbank AG.

Consumer price inflation in the U.S. may slow to about 2 percent this year, from 3.3 percent last year, said Peter Mueller, a fixed-income strategist in Frankfurt at Commerzbank. The median forecast among 71 economists surveyed by Bloomberg is for consumer prices to gain 2.5 percent this year. Inflation erodes the value of bonds' fixed-income payments.







http://www.bloomberg.com/news/markets/bonds.html

[54anickel]

37. Treasurys drift lower ahead of Greenspan

http://www.investors.com/breakingnews.asp?journalid=25930211&brk=1

CHICAGO (MarketWatch) - Prices on U.S. government securities drifted lower Monday, with most bond market participants unwilling to stick out their necks ahead of Federal Reserve Chairman Alan Greenspan's appearances later this week.

The "market tenor is defensive, as it should be into Chairman Greenspan's testimony," said Peter McTeague, interest-rate strategist with RBS Greenwich Capital.

Greenspan will go before a Senate panel on Wednesday morning and return to the House on Thursday to deliver the Fed's semiannual report on the economy and monetary policy.

snip>

Given recent gains for the 10-year note, inflation-wary bondholders are nervous that Greenspan might say something that could be the tipping point to a bond sell-off.

Despite the steady increases in short-term rates by the Fed, long-term rates have actually fallen since the first rate hike in June, partly on some skepticism that the economy is braking at least slightly and on expectations the Fed is still a step ahead of inflation. Low inflation allows bond investments, particularly those with longer maturities, to retain more of their value.

"Whether or not expansion remains on a stable track depends importantly on the inflation outlook," added DiClemente. "The Fed's sharp point/counterpoint recounting of the inflation discussion at its December FOMC meeting illustrates that the uncertainties here suggest caution, not overconfidence."

more...

[54anickel]

16. Greenspan's Whopper

http://www.321gold.com/editorials/bonner/bonner021405.html

snip>

The background: The U.S. economy faced a major recession in 2001 and had a minor one. The necessary slump he held off by a dramatic resort to central planning. The "invisible hand" is fine for lumber and poultry prices. But at the short end of the market in debt, Alan Greenspan's paw presses down, like a butcher's thumb on the meat scale. The Fed quickly cut rates to head off the recession. Indeed, never before had rates been cut so much, so fast. George W. Bush, meanwhile, boosted spending. The resultant shock of renewed, ersatz demand not only postponed the recession; it misled consumers, investors and businessmen to make even more egregious errors. Investors bought stock with low earnings yields. Consumers went further into debt. Government liabilities rose. The trade deficit grew larger. Even on the other side of the globe, foreign businessmen geared up to meet the phony new demand; China enjoyed a capital spending boom as excessive as any the world has ever seen.

What the Greenspan Fed had accomplished was to put off a natural, cyclical correction and transmogrify an entire economy into a monstrous ECONOMIC bubble. A bubble in stock prices may do little real economic damage. Eventually, the bubble pops and the phony money people thought they had disappears like a puff of marijuana smoke. There are winners and losers. But in the end, the economy is about where it began - unharmed and unhelped. The households are still there... and still spending money as they did before... hand the companies still in business. Only those that leveraged themselves too highly in the bubble years are in any trouble - and they probably deserve to go out of business.

Even a property bubble may come and go with little effect on the overall economy. House prices have been running up in France, for example, at nearly the same rates as in America. But in France there is very little mortgage refinancing... or "taking out" of equity. The European Central Bank was repeatedly urged to lower rates in line with those in America. It refused to budge. Without falling rates, there was no "refi boom." Nor were European banks offering "home equity lines of credit." Property could run up... and run down... and the only people who cared would be the actual buyers or sellers, who either cursed themselves or felt like geniuses, depending on their luck.

But in Greenspan's bubble economy something remarkably awful happened. Householders were lured to "take out" the equity in their homes. They believed that the bubble in real estate priced created "wealth" that they could spend. Many did not hesitate. Mortgage debt ballooned in the early years of the 21st century - from about $6 trillion in 1999 to nearly $9 trillion at the end of 2004. Three trillion dollars may not seem like much to you, dear reader. But it increased the average household's debt by $30,000. Americans still lived in more or less the same houses. But they owed far more on them.

We had given up all hope of ever getting an honest word out of the Fed chairman on this subject when, in early February, in the year of our Lord 2005, the maestro slipped up. His speech was entitled "Current Account." Jet lagged, his defenses down, the poor man seems to have committed truth.

more...

[RawMaterials]

17. SUSAN TOMPOR: World funds are latest bubbly bet

I started getting edgy about international funds when a young grandmother told me she wanted to set aside money for her girl's baby girl. The spot? Well, she's thinking about going international.

Oh, brother.

snip..

Cash flying overseas

"We're seeing signs of a possible mania," said Carl Wittnebert, director of research for TrimTabs.com, a Web site that tracks money flows in and out of the market.

Me too: Out of the blue, two people started chatting with me about international mutual funds this year. It's not a topic that crops up often -- or frankly at all -- in everyday yapping.

Wittnebert's evidence: Lots of cash has been flying off to international funds.

The money flowing into international funds, after withdrawals, set a record in 2004. It hit $48.3 billion.

It's a little less than half of what went into U.S. domestic stock funds last year.

But the amount is shocking when you consider the money invested in domestic stock funds is huge next to international funds. Domestic stock funds had $3.7 trillion in assets last year vs. international funds with $452 billion.

And the popularity of international funds is continuing.

Last month, about $3 billion went into international funds. And about $1.3 billion went out of domestic stock funds.

Why the rush to invest overseas? Why else?

Look at past returns.

World equity funds, which include gold funds, were up 17.82 percent in 2004, Lipper reports. By contrast, U.S. diversified equities did well but not nearly as well. They were up on average 11.96 percent.

Latin America was super hot. Mutual funds that invest mainly in Latin American companies were up 38.39 percent.

Over two years, world equity funds gained an average 28.42 percent. Latin American funds were up 49.92 percent in two years.

And you're seeing plenty of ads for value-oriented, international stock funds. They were up 40 percent or so in 2003 and up 20 percent in 2004.

Falling dollar

We're also hearing talk about how the falling dollar makes foreign stocks tempting.

This month's Money magazine notes that investing in foreign stocks is one way to make sure investors, as the headline says, "Don't Get Crushed by the Falling Buck."

The reason? When the dollar drops in value, an American investor who holds a foreign stock could make money just on the currency swings.

snip...

Some international funds that invest in growth-oriented stocks lost roughly 20 percent in 2001 and again in 2002.

"When you start hearing everybody say 'It's the place you ought to be,' the warning lights should come on," said Tom Roseen, senior research analyst for Lipper.

Consider this a warning.





http://www.freep.com/money/business/tompor14e_20050214.htm

[54anickel]

19. I read this one earlier this morning, to me she seems like such an

alarmist on foreign investing, ignoring the importance of diversification in general. Sure, you'd be a fool to bet the farm on foreign investments only and the fall of the dollar. But wouldn't you also be a fool for putting all your eggs into US equities as well?

I think the point she misses is that people are taking on more and more risk in general in search of a decent return. It's that decent return with low risk which has become more elusive in today's environment that should be the real story. JMHO.

[RawMaterials]

24. how can anyone think that having all of your investments

in American asset's is diversification. I think your right about how she is an alarmist, but it seams that we might be chasing the bubbles around for awhile. till everyones money is in the hands of just a few.

[idealista]

31. she's talking down and skimming the surface. Typical.

Her article seems to me rather chatty and unreasoned. Of course, foreign stocks sometimes do poorly. Of course there is currency risk both ways. Seems typically aimed at the unsophsticated, the foolish and the fearful.

She implies all these small investors look only at past returns and have no inkling of fundamentals (maybe for the most part she's right.)

She seems to imply that if alot of people are investing in any one way, it will artificially inflate the market, leading to almost guarantteed losses.

What she ignors is that its not just Americans buying foreign stock - we are probably a fairly small part of the world market of foreign stock buyers. I doubt if American buying is driving that market higher, particularly. Anyone have any facts and figures about this?

I have invested heavily in foreign stock and bond funds as financial insurance. My largest asset is my home. My work is in a recession-prone industry. I am self-employed, and single. So even with most of my liquid investments non-dollar, I am predominantly invested in the U.S.

[54anickel]

18. U.S. debt: Watch out for the domino effect

http://www.iht.com/bin/print_ipub.php?file=/articles/2005/02/11/business/wbmarket12.html

snip>

Well, a very influential name has just joined that crowd. Olivier Blanchard, a professor of economics at the Massachusetts Institute of Technology, released a draft paper last month that foresees trouble ahead. Written with his colleague, Filipa Sa, and Francesco Giavazzi of the Luigi Bocconi Commercial University in Milan, the paper argues that bigger inflows of foreign money are in the interest of neither Asian central banks nor the American economy itself.

"A further shift in investors' preferences towards dollar assets would provide only temporary relief for the dollar," the economists wrote. "It would lead to an initial appreciation, but the accompanying loss of competitiveness would speed up the accumulation of foreign debt. The long run value of the dollar would be even lower."

The three authors also foresaw an adjustment of central banks' portfolios sooner rather than later. "The longer the Chinese wait to diversify their reserves, the larger the eventual appreciation of the renminbi," they wrote. As a higher value for the renminbi, also known as the yuan, could hurt Chinese exports, the benefits of quick action are clear.

China seems to have picked up on this. Fan Gang, the director of the National Economic Research Institute, China Reform Foundation, said at the World Economic Forum in Davos, Switzerland, that his government viewed the dollar as "no longer a stable currency" and expected its decline to continue.

No one is willing to say precisely when these things will happen, of course. At the moment, the American economy is growing steadily, and the dollar's recent gains against the euro and other currencies have allayed some traders' fears. Yardeni attributed those gains to private investors showing confidence in the economy.

Rising short-term interest rates, care of the Federal Reserve, could also be behind the gains. Yet Blanchard and his collaborators asserted that rates in general needed to fall, not rise, to stabilize the dollar.

more...

[54anickel]

20. China, India and Japan Duke It Out in Asia

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

snip>

The biggest industrialized nations haven't exactly said India will play second fiddle to China; they invited Asia's No. 4 and No. 2 economies to their Feb. 4 meeting. Yet the G-7's almost linear focus on China and its currency policy leave little doubt about which one it's betting on. Ditto for the policy-making elite attending this year's World Economic Forum in Davos, Switzerland.

All this matters because the G-7 is realizing Asian nations' economic might will one day rival or even eclipse its own. This region, after all, is home to many of the world's most vibrant economies, ones that will increasingly alter the G-7's clubby way of viewing the global financial system.

Markets also are being titillated by recent investment bank reports arguing that China and India will become the world's second- and third-biggest economies sooner, rather than later. In the age of globalization, size matters more than ever; the bigger your economy, the more long-term investment you seem to attract.

snip>

Remember how everyone assumed Japan would lead the so-called ``Pacific Century.'' Now, investors and businesspeople are eyeing a China-centric one. The decline of Japan's economic might, China's rise since 1994 and the collapse of the Asian tiger economies in 1997 altered the dynamics for this century. China morphed from poor economy into the world's top investment destination, and many observers expect that to continue.

It's not all good, perhaps. It's still unclear how much the rest of Asia will be able to compete with China's low wages and growing market share. It's not unlike how Wal-Mart Stores Inc. is shaking up the U.S. economy -- only China will do it on a much larger scale.

Makes you wonder if the collapse of the Asian tiger in 1997 wasn't actually a well engineered move in advancing China and it's promise of a long run of cheap labor :tinfoilat:

more...

[54anickel]

21. IMF Gold Sales - 24 reasons why it will be a non event

http://www.321gold.com/editorials/gerbino/gerbino021405.html

snip>

The highest portion of the IMF gold is from the U.S. and belongs to the U.S. taxpayer. This argument is a powerful point to be made. It brings up the question of why should the U.S. taxpayer pay for all these bad loans made by a non-U.S. organization? One would think that if the loans were properly structured they would create wealth, aid in poverty reduction in these poor countries and be paid off. The fact that an abnormally large percentage of IMF loans did not work shows that assets from U.S. citizens should be used in more efficient ways. A Joint Economic Committee Study in 1999 stated that " the central IMF budget is treated as a classified document and IMF finances are very difficult to evaluate because of the obscurity of IMF financial statements". The U.S. Congress and the gentlemen mentioned above will surely have the upper hand in any hearings on this subject and they will use it to beat back the gold sales scheme.

IMF Gold was supposed to be used for foreign exchange stability in the past. Since the IMF is now a global lending institution and fixed exchange rates are no longer a responsibility of the IMF, it should not be selling gold assets to pay off bad loans. It should return the gold to member nations or at least use the gold as a reserve asset as it was meant to be. Maybe the IMF should actually be buying gold to shore up its balance sheet.

The political and social pressure on the U.S. Congress from citizens that own gold and gold mining companies as an investment will be very strong as we go forward. Since many times congressional elections are decided by only 500-1,000 votes in many districts, Congressmen do not upset apple carts that are bi-partisan and since gold is owned by liberals and conservatives, republicans and democrats the best possible and potent political force in America will be at work against the IMF gold sales..and that force is unstoppable. The force is a coalition. When the right and left get together in this country on any issue it is all over but the shouting. Since the IMF gold sales will harm the pocketbooks of Democrats as well as Republicans, it would seem the IMF votes needed to sell gold will not happen.

Central bankers will most likely continue, as usual, to scare the price of gold down from time to time by statements of gold sales. But they are all too keenly aware of the growing number of people who realize that the gold not paper and ink is the real stable monetary element. They also realize that the gold market should not be manipulated when it effects the global mining industry (not just gold), dozens of poor countries that rely on mining for the livelihood of it's people and tens of millions of retirement and investment accounts of ordinary people the world over.

more...

[MARALE]

22. More natural gas could mean savings

http://cbs.marketwatch.com/news/story.asp?guid=%7B7984F2A3%2D827D%2D48E8%2DBD0E%2DCFAAB434D268%7D&siteid=google

Prices would drop as much as 33 percent if U.S. policy makers reverse a moratorium on drilling in the eastern Gulf of Mexico and off the East coast and ease restrictions on access to reserves in the Intermountain West, the Washington, D.C.-based industry group said.

Other actions that would help ease continued high prices for the fuel include building a pipeline to move natural gas from Alaska's resource rich North Slope to the lower 48-states, boosting imports of liquefied natural gas to 23 billion cubic feet a day by 2020, and reducing the electricity sector's reliance on natural gas to fuel generation by 20 percent over the same period.

...

"Failure to act swiftly, decisively and positively on issues such as constructing liquefied natural gas receiving terminals and an Alaskan gas pipeline, diversifying our electricity mix and increasing access to domestic supplies of natural gas would prolong and exacerbate problems affecting natural gas markets," the report said.

...

If none of these policies is achieved, natural gas could rise to a nominal price of $13.75 per million British thermal units by 2020 or an average of $9.43 over the next 15 years, according to the report.

[54anickel]

23. Control all 'tyrannical' world oil chokepoints?

A Peek Behind Bush II's 'War on Tyranny'

http://www.321energy.com/editorials/engdahl/engdahl021305.html

In recent public speeches, George W. Bush and others in the Administration, including Condi Rice, have begun to make a significant shift in the rhetoric of war. A new 'War on Tyranny' is being groomed to replace the outmoded War on Terror. Far from being a semantic nuance, the shift is highly revealing of the next phase of Washington's global agenda.

In his 20 January inaugural speech, Bush declared, "It is the policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world." Bush repeated the last formulation, 'ending tyranny in our world' in the State of the Union. (author's emphasis). In 1917 it was a "war to make the world safe for democracy," and in 1941 it was a "war to end all wars."

The use of tyranny as justification for US military intervention marks a dramatic new step on the road to Washington's quest for global domination. Washington of course today is shorthand for the policy domination by a private group of military and energy conglomerates, from Halliburton to McDonnell Douglas, from Bechtel to ExxonMobil and ChevronTexaco, not unlike that foreseen in Eisenhower's 1961 speech warning of excessive control of government by a military-industrial complex.

Congress declared World War II following a Japanese aggressive attack on the US fleet at Pearl Harbor. While Washington stretched the limits of deception and fakery in Vietnam and elsewhere to justify its wars, up to now it has always at least justified the effort with the claim that another power had initiated aggression or hostile military acts against the USA. Tyranny has to do with the internal affairs of a nation: it has to do with how a leader and a people interact, not with its foreign policy. It has nothing to do with aggression against the United States or others.

Historically Washington has had no problem befriending some of the world's all-time tyrants, as long as they were 'pro-Washington' tyrants, such as the military dictatorship Pervez Musharraf in Pakistan, a paragon of oppression. We might name other befriended tyrants-- Aliyev's Azerbaijan, or Karimov's Uzbekistan, or the Al-Sabah's Kuwait, or Oman. Maybe Morocco, or Uribe's Colombia. There is a long list of pro-Washington tyrants.

more...

[RawMaterials]

25. China to maintain 'basically stable' yuan rate in 2005

BEIJING (AFP) - China's central bank will maintain a "basically stable" exchange rate for its currency, the yuan, in 2005, amid foreign pressure to raise its value. The People's Bank of China will "maintain the basic stability of the yuan exchange rate at a reasonable, balanced level," state radio reported Saturday.

The United States in particular has often complained about the value of the yuan, which has been pegged at 8.28 to the dollar for a decade.

The Bush administration contends that the yuan is grossly undervalued, keeping China's exports artificially cheap, undermining US exports and ultimately putting Americans out of work.

But at a Group of Seven meeting last weekend, China's representatives failed to make any specific commitments on the exchange rate.



http://story.news.yahoo.com/news?tmpl=story&cid=1518&ncid=1518&e=6&u=/afp/20050212/bs_afp/chinaeconomyforex_050212135043

[54anickel]

26. Everybody needs money. That's why they call it money!

http://www.321gold.com/editorials/chapman_d/chapman_d_021405.html

snip>

The excess liquidity finds itself poured into a host of assets including houses, stocks and other speculative ventures. Inflation does not have to mean that prices are rising (which clearly they are not as inflation remains low and even artificially low in the US in particular) but instead it is asset inflation. But ultimately it is a complete misallocation of resources as The Economist notes. As the asset prices rise consumers think they have even more to spend and rush out to fill the void by buying even more consumer goods. Personal Spending on the whole has exceeded personal income. In December personal income rose 0.6% not counting the Microsoft dividend but personal spending rose .8%. Most every month that is the situation as consumers spend more than they earn. The savings rate meanwhile continues to hover at extremely low levels barely above zero both in Canada and the US. Who needs to save when foreigners are providing all the savings to protect their currencies and all you have to do is go click click to get what you want now.

Despite the high level of consumer debt it is not consumer debt per se that causes the ongoing record level of bankruptcies. Surprisingly in America it is getting sick (researchers say 50% of US bankruptcies are caused by soaring medical bills) even though apparently 75% of those going bankrupt have medical insurance. Just not enough it seems and if medical bills pile up bankruptcy looms (Note: In Canada because of public health insurance you can not go bankrupt if you get sick). But all that being said, if a financial accident were to happen and there was a sharp downturn in the economy, then the level of debt could cause a credit collapse and defaults would rise.

To date we have not had a credit crunch in this particular cycle. What we are doing is putting off the inevitable because at some point in time in the future the ability to play this game runs out. And none of this is being helped by the easy fiscal policy of the Bush administration. Easy spending by the Federal Government just adds to the culture of spend today and worry about the debts tomorrow. US budget deficits are now projected to exceed $400 billion and some numbers show it could already be as high $600 billion.

Even the recent budget presentation showing that they plan to cut the deficit in half by the end of the Bush term appears to be in trouble even before it starts. The budget assumes that all spending will be frozen or cut except for homeland security and the military where expenditures will go up. But the new budget does not include spending for the wars in Iraq and Afghanistan nor anything in the event another war started such as Iran. The war in Iraq costs upwards of $5 billion a month. There is no allowance for the cost of the Social Security plan that could be as high as $1.5 trillion over the next decade nor the new Medicaid at a cost of about $750 billion over ten years. Even the administration admits Social Security could cost $754 billion over the next decade. Many of the cuts are in areas that have entrenched interests including in congress and the senate such as farmers, veterans and education programs. Slash the farmers and veterans and up the expenditures on security and foreign wars. This won't fly.

While the announcement that the budget might be cut was initially positive for the US$ the trade deficit numbers announced earlier this week ended the recent US$ rally. The massive deficits and debts of the US hang over them like a sword. If they were a third world country the IMF would already be calling. And massive deficits hang over the world. We can't help but notice that Alan Greenspan, effectively the Chairman of the Central Bank of the World will retire next year. Given that his successor may very well face an economic hangover as The Economist says "Does anybody really want the job." In the interim use those special cheques sent to you by your bank. The babysitter will appreciate it. After all she/he like everybody needs money.

more...

[RawMaterials]

27. 11:40 Market Update and 12:00 blather

Dow 10,786.04 -9.97 (-0.09%)
Nasdaq 2,080.43 +3.77 (+0.18%)
S&P 500 1,204.85 -0.45 (-0.04%)
10-Yr Bond 40.93 -0.02 (-0.05%)
NYSE Volume 515,286,000
Nasdaq Volume 729,471,000



12:00PM : Stocks still trade with little fanfare midday as investors find few catalysts to sway equities in either direction... Verizon's (VZ 36.78 +0.47) confirmed $6.75 bln bid for MCI Inc. (MCIP 19.76 -0.99) has provided some support to the overall stock market, but with no notable earnings reports and the absence of influential economic data, most of the news has remained rather company specific... Financial (-0.3%) remains weak after AIG (71.07 -2.05) received subpoenas from Spitzer and the SEC while homebuilding (-0.8%) has extended weakness from Friday's sell off...

Also under pressure have been health care, transportation and retail while computer hardware (+1.1%), following upwardly revised estimates from UBS on shares of Apple Computer (AAPL 83.15 +1.94), has paced the way in technology... Internet has been in focus amid the expiration of Google's (GOOG 186.35 -1.05) lock-up period while auto stocks have garnered attention in the wake of General Motors (GM 37.64 +0.50) $2.0 bln settlement with Fiat SpA...

Energy has held decent gains, despite weakness in crude oil futures ($46.60/bbl -$0.56), following an upgrade on ConocoPhillips (COP 101.37 +2.33) while an Smith Barney upgrade on Duke Energy (DUK 27.30 +0.51) has prompted modest buying interest in utility stocks... Meanwhile, treasuries remain relatively unchanged, with the benchmark 10-year note up 1 tick to yield 4.08%...NYSE Adv/Dec 1613/1494, Nasdaq Adv/Dec 1483/1485

11:30AM : Stocks still show little vigor, having barely budged in the past hour, as market internals hold a relatively neutral bias... Decliners on the NYSE are still basically even with decliners while declining issues on the Nasdaq hold a slim 15 to 14 margin over advancing issues... Even the ratio of up to down volumes has been uninspiring, as up volumes hold a very slim edge on both the Big Board and the Composite... Meanwhile, the major indices continue to trade just above initial support levels but are still failing to show much follow through from Friday...NYSE Adv/Dec 1526/1542, Nasdaq Adv/Dec 1407/1503

11:00AM : Buyers and sellers remain virtually deadlocked as the major averages hold their own around the unchanged mark... Financial stocks remain a focal point early on after American International Group (AIG 71.07 -2.05) received subpoenas from NY Attorney General Eliot Spitzer and the SEC... The world's largest insurer has said regulators queries relate to non-traditional insurance products, assumed reinsurance transactions and AIG's accounting for such transactions...

Wachovia (WB 55.29 -0.72) has also been under pressure following a pair of downgrades from UBS and Banc of America Securities on valuation concerns... NYSE Adv/Dec 1572/1421, Nasdaq Adv/Dec 1484/1354

10:30AM : Little change in the past half hour as the indices still fluctuate around the flat line... With more than 26 of the Dow 30 components and 80% of the S&P 500 constituents having already reported quarterly results, there have been no notable earnings reports for investors to sift through this morning... The absence of potentially market moving economic data has also contributed to the subdued action in both equities and bonds...NYSE Adv/Dec 1455/1428, Nasdaq Adv/Dec 1330/1405

10:00AM : Stocks continue to trade in split fashion as there isn't a strong sense of conviction on either the bullish or bearish side of the aisle... Technology, however, has found some broad-based buying interest early on, with computer hardware (+1.4%) accounting for most of the momentum following positive comments from UBS about on Apple Computer (AAPL 83.02 +1.81)... Telecom services have also shown some strength on the heels of the proposed VZ/MCI merger while modest gains have also been realized in utility, drug and energy...

Showing weakness early on has been transportation, homebuilding, health care, retail and financial... NYSE Adv/Dec 1377/1191, Nasdaq Adv/Dec 1417/1125

9:40AM : Market opens with little enthusiasm, exhibiting caution in the wake of three straight weeks of gains for the Dow and S&P 500... Meanwhile, Verizon Communications (VZ 36.90 +0.59) has formally agreed to buy MCI Inc. (MCIP 19.40 -1.35) for $6.75 bln, bringing the total value of announced U.S. M&A deals in 2005 to almost $160.0 bln... But even though Verizon's confirmation provides optimism to the overall stock market, VZ's offer came in $0.55 bln less than Qwest's (Q 3.94 -0.21) $7.3 bln bid, offering no premium for MCI shares...

9:15AM : S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: flat.

9:00AM : S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: flat. Futures market versus fair value still exhibiting a neutral tone this morning and a relatively steady open for the cash market... Google (GOOG) should be in focus now that the lock-up period for 176 mln shares held by insiders has expired and the stock has been upgraded to Sector Outperform at CIBC... Other notable ratings changes include upgrades on GTW, COP, DUK and AMTD and downgrades on WB, WFC, BC, AH and NE

8:30AM : S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: +1.0. Still shaping up to be a modestly flat open for the indices... Financial stocks should be in focus after AIG received subpoenas from the NY Attorney General Spitzer and the SEC while Citigroup (C) plans to reduce its investment-banking work force by about 1,000 people... Aerospace / defense could also garner attention following news that the Air Force denied Lockheed Martin's (LMT) challenges to two classified contracts it initially awarded to Boeing (BA)

8:00AM : S&P futures vs fair value: +1.4. Nasdaq futures vs fair value: +1.5. Futures market suggesting a lackluster open for the cash market as investors show little follow through after Friday's solid gains... Verizon (VZ) has confirmed plans to acquire MCI for $6.7 bln and General Motors (GM) has agreed to pay $1.99 bln to Fiat SpA to prevent the forced buyout of Fiat's struggling auto unit, but there are no notable earnings reports or economic data to digest in the early going

6:34AM : S&P futures vs fair value: +0.6. Nasdaq futures vs fair value: -1.5.

6:34AM : FTSE...5041.80...-2.40...-0.1%. DAX...4385.76...-2.04...-0.1%.

6:34AM : Nikkei...11632.20...+78.64...+0.7%. Hang Seng...14017.23...+171.60...+1.2%.

[54anickel]

28. Fundamentals Do They Really Matter; You Be The Judge

http://www.gold-eagle.com/editorials_05/tacinv021205.html

We are going to list several stories and then some stocks below to illustrate our point that in reality fundamentals matter very little at all. The only reason we are listing some of our past plays is to illustrate that we practice what we preach. We have also listed some other examples and illustrate roughly when one could have taken positions based on TA and mass psychology. It seems that markets mostly go up and down based on people's perceptions and usually tend to ignore fundamentals. We just need to look back at the Internet era for a clear-cut example and how fundamentals did not seem to matter at all. Yes in the end there was a massive correction but the smart players were able to work away with boatloads of money; the masses as usual were fleeced.

snip>

Budget Office Sees Deficit at $368 Billion

WASHINGTON (Reuters) - The U.S. budget deficit will reach $368 billion this year before any war costs are added in, the Congressional Budget Office (news - web sites) said on Tuesday, according to a source familiar with the worse-than-expected numbers. The previous CBO forecast called for a $348 billion shortfall for the 2005 fiscal year that began on Oct. 1. Due to a technical quirk, the latest number does not include billions of dollars needed to fund military operations in Iraq (news - web sites) and Afghanistan (news - web sites), and analysts said these must be added in to get a true picture of the red ink. The previous forecast assumed $115 billion of war costs. "As a result of this technicality, we think it would be prudent to add roughly $100 billion to the CBO's fiscal year 2005 budget deficit estimate," Lehman Brothers said in a research note. The White House is shortly expected to ask for about $80 billion to pay for war costs. Full story

One would have expected the dollar to plunge on this news and for Gold to rally. However exactly the opposite occurred. The dollar rallied and continues to rally while the dollar plunged on the very day this news was released and has fallen considerably more since then. Hum what happened to fundamentals?

Rates on 30-Year Mortgages Fall

WASHINGTON - Rates on 30-year mortgages fell for a fifth straight week, but other shorter-term rates edged up a bit, influenced by the Federal Reserve (news - web sites)'s decision to raise a key rate it controls for the sixth time since last June. Freddie Mac's weekly survey of mortgage rates released Thursday showed that rates on 30-year, fixed rate mortgages averaged 5.63 percent for the week ending Feb. 3, down from 5.66 percent last week. Low mortgage rates powered sales of both new and existing homes to all-time highs in 2004, the fourth straight year that sales in both categories have set records. Analysts are forecasting housing will enjoy another good year in 2005 with sales dipping by around 3 percent, a decline that would still give the country the second-highest levels for sales of new and existing homes.

snip>

The Fed is aggressively pumping short-term rates, this is the sixth increase to date and long-term rates continue to fall. One would assume that long-term rates would increase in sync, but that does not seem to be the case. Also given the fact that we had loose money policies in place now for several years on would expect rates to rise due to the rising default and bankruptcies rates across the nation.

more...

[54anickel]

29. Dollar weakness and higher interest rates: how it works

http://www.kitco.com/weekly/paulvaneeden/feb112005.html

For more than a year now I have been commenting that the dollar has to decline in the face of rising interest rates for the gold price (in US dollars) to sustain a meaningful rally. Every time I make that comment, someone points out that rising interest rates typically result in stronger currencies. Therefore, why would the dollar fall if interest rates are rising?

History repeats, but never exactly. While there are often precedents for current situations the circumstances are rarely identical, so we have to be careful when we make assumptions based on past experiences or events.

It is true that higher interest rates typically lead to stronger currencies, but the US balance sheet, income statement and dollar are in uncharted waters and never has globalization been as prevalent as it is now. Japan owns roughly seven hundred billion dollars worth of US Treasury securities and China has in the order of two hundred billion dollars.

Were it not for Japan and China, the US dollar would be trading a lot lower than where it is today. During the past decade the United States has racked up enormous trade deficits with those two countries. Under normal circumstances the net amount of dollars (trade deficit) paid to foreign corporations would be sold on foreign exchange markets. As the trade deficit widens, ever more dollars are sold, putting pressure on the dollar to decline. Eventually the weakening dollar would cause the prices of imported goods to rise and the rising costs of imports would ameliorate the trade deficit. This is the free market’s natural balancing system.

more...

[54anickel]

30. China and the Final War for Resources

This article sounds familiar, like I've read and posted it before. But it is dated today. Perhaps Kitco thought it was worth reposting, or maybe just the intro is a repeat. :shrug:

http://www.kitco.com/ind/Ridley/feb142005.html

snip>

Writing in the Los Angeles Times, Gal Luft, executive director of the Institute for the Analysis of Global Security, said: "Without a comprehensive strategy designed to prevent China from becoming an oil consumer on par with the U.S., a superpower collision is in the cards." The New York Times has also weighed in stating that China's actions threaten "the very stability of the global economy."

The final war for the planet's resources has already started. You name the commodity and China's buying it and consuming it in HUGE quantities. Last year they consumed nearly half of the world's cement, twice the world's consumption of copper, and nearly a third of the world's coal, 90% of the world's steel plus nearly every other commodity you can think of has been in greater demand by China.

However in order to propel such furious economic growth, there is one key commodity you need above all the others. And if you can't get enough of it, having all the other resources won't matter. The most prized and sought after commodity which makes the world tick is oil. With out it, you have nothing. Your economy would be frozen and your military would be left inept.

As China's Master Plan to Destroy America manifesto outlines, the multifaceted battle plan recommended by the Chinese military has taken shape..…

more...

[54anickel]

38. India, China vie for share Yukos spoils

http://www.theage.com.au/news/Business/India-China-vie-for-share-Yukos-spoils/2005/02/14/1108229928350.html?oneclick=true

India is fighting China for Russian oil by angling for a supply deal and a stake in Yuganskneftegaz, the oil unit seized from Yukos and now owned by Rosneft, the state oil company.

India's Petroleum Minister, Mani Shankar Aiyar, will visit Russia on February 21 to discuss India taking a 15-20 per cent stake in the oil unit, which is still the focus of legal action in the US.

"There are no full stops and the dialogue is continuing, Mr Aiyar said.

The fact that Yukos has threatened to sue anyone who interferes with its former unit has not put India or China off. China has offered $US6 billion ($A7.65 billion) to fund the purchase of Yugansk, in return for a guaranteed 360 million barrels of oil over the next five years. India has been offered a similar quota but wants a slice of equity for its national oil company, ONGC.

more...

[RawMaterials]

50. In the final war for resources there are no clear winners

Zhu Min, general manager and advisor to the President for the Bank of China was quoted in the China Daily last year saying that: "The United States is benefiting from China using its trade surplus to buy U.S. Treasury paper as a reserve currency, along with other Asian nations. But in the long run, this is not sustainable.... China will focus more and more on domestic demand, which is growing fast. Then we won't be able to finance the U.S. deficit."

So the multi billion dollar question is what happens when China starts selling U.S. dollars to help expand their infrastructure and secure their supply of global resources?

All Beijing has to do is to mention the possibility of a sell order going down the wires. It would devastate the U.S. economy more than any nuclear strike."
Asia Times, Jan. 23, 2004

A year ago, the Wall Street Journal reported that a sell off of U.S. treasuries has already started. If a small country like Vietnam or Thailand started selling it may not be the end of the world but if China started selling, the U.S. economy would be in a tail spin. Long term interest rates would climb and bond yields would sky rocket. This could start a stampede of selling which would devastate the stock market. This is the treasury trap America is in.
Though a major sell off hasn't happened, it's clear the U.S. dollar is losing ground to the euro and other major currencies. Consequently we have seen rising interest rates, a falling dollar and an upward flight of gold as well as upward pressure on oil, gas, coal, copper and other key commodities.

The implications of this fact are staggering. As the demand for commodities increases, insightful investors who can see this trend and position themselves now in growth oriented equities holding gold, oil, copper and other key commodities will be sitting pretty if a few years time and will have weathered the U.S. dollar collapse better then most.

In the final war for resources there are no clear winners. Everyone on the globe will feel the pinch. Some countries will fair better then others. The question remains, how will the United States come out of this? This is after all the hugest threat to the national security that the country faces yet it's hardly ever mentioned by the mainstream media.

Given the strong economic growth of China and the uncertain purse strings it holds on U.S. dollars and treasury bonds, I can't help but wonder how this might tie in with their aggressive militaristic actions lately.

[54anickel]

32. GATA To Replace World Gold Council (Gold-buggy, but some interesting

comments on Greenspin in this one) :evilgrin:

http://www.kitco.com/ind/Murphy/feb142005.html

snip>

We presume that Chairman Greenspan is aware of this as well. We conclude that Chairman Greenspan's explanation of his statement that "central banks stand ready to lease gold in increasing quantities should the gold price rise" is close to a ruse.

b) There is no evidence we know of which suggests that central banks stand ready to lease gold in increasing quantities should the gold price rise. Central banks who admit to leasing gold indicate they do so to earn interest on an otherwise barren asset. Earning interest is their avowed motivation. The lease rate on gold has always fallen on gold price rallies. Therefore, the propensity of central banks to lease gold should fall, not rise, on such rallies. The Chairman says that he was not referring to the Fed but only to "more than one central bank" other than the Fed that stand ready to lease gold. Since September of 1999, this statement no longer applies to the fifteen European signatories to the Washington Accord. How does Greenspan know that other such central banks stand ready to lease gold in "increasing quantities should the price rise"?

c) In his congressional testimony regarding possible CFTC regulation of OTC derivatives markets, Greenspan was apparently referring to the possible manipulation of commodity markets by "private counter parties" who might "restrict supplies". Greenspan appeared to be arguing that there was no need to extend CFTC powers to the OTC gold market since a Hunt-type manipulation of the gold market could be prevented by the authorities through the leasing of gold. However, even if central banks stand ready to lease gold in increasing quantities should the price rise, this will not in and of itself curb any rise in the gold price due to a restriction of supplies by private counter parties. Though central banks might be willing to lease gold on a price rise, there must be willing parties to borrow that gold if the increased propensity to lease of these central banks it is to matter in any way to the gold market.

The historical record suggests that, when the gold price rises, private market participants in aggregate do not add to short positions. Producers sometimes do add to short positions on a scale up, but speculators almost always cover short positions and go long. The fact that lease rates fall on price rallies suggests that private market participants, taken in the aggregate, reduce rather than increase short positions when the gold price rises. Therefore, the increased propensity of "more than one" central bank to lease gold in increasing quantities would not tend to curb a Hunt-like manipulation of the gold market. Only if another central bank was willing to borrow such gold and sell it into the market would increased lending frustrate a Hunt-type manipulation.

It seems to us that there is a hidden implication in Greenspan's remarks that some central banks stand ready to borrow gold leased by other central banks should the gold price rise. Greenspan is arguing that CFTC regulation of the OTC gold market is not necessary because central banks can handle possible manipulations. How would Greenspan know about such official short selling of increased gold available for lease? Is there an implication here that the Fed knows of such contingency measures to preserve gold price stability that the market is unaware of? Is there an implication that the US need not extend CFTC supervision to the OTC gold market because other US government bodies (the Fed, the Treasury?) stand willing to sell leased official gold should the gold price rise?

more....

[54anickel]

35. More Air Force Contracts to Be Probed

http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2005/02/14/national/w083416S75.DTL

The Pentagon is investigating eight additional Air Force contracts to determine whether they were manipulated or influenced illegally by Darleen Druyun, a former Air Force official who was convicted last year of giving Boeing Co. special treatment on a tanker lease deal.

The eight contracts range in value from $42 million to $1.5 billion and their total value is about $3 billion, according to a summary provided by the Pentagon on Monday.

Michael Wynne, the acting chief of Pentagon acquisition programs, told reporters that the eight contracts were identified as suspicious from among 407 reviewed by a team of military and civilian contracting experts. They referred the eight to the Pentagon's inspector general.

The eight are in addition to seven others that already are being investigated.

Wynne stressed that it is not yet clear that any of the additional eight have been tainted. They were picked for further investigation because they "seemed to be out of the normal process."

more...

[54anickel]

36. OfficeMax to restate earnings; CEO quits

http://cbs.marketwatch.com/news/story.asp?guid=%7BC1FDE658-5551-4E25-BDD2-FB5A2889C181%7D&siteid=google&dist=google&dist=

NEW YORK (MarketWatch) -- OfficeMax Inc.'s Christopher Milliken resigned as CEO, president and director and the company will restate earnings for the first three quarters of fiscal 2004, the troubled office products retailer said Monday.

OfficeMax (OMX: news, chart, profile) shares plummeted more than 6 percent, or $1.95, to $29.80, after the opening bell.

Executive director George Harad is serving as interim CEO until the board finds a replacement, the Itasca, Ill. company said.

OfficeMax spokesman Bill Bonner said Milliken's resignation was a mutual decision between the former CEO and the board and was related to the company's performance as well as the investigation.

OfficeMax said it will release financial results on March 14, after delaying the report due to its ongoing investigation of accounting fraud.

more...

:eyes: Wonder what his serverance package will look like

[MARALE]

39. UPDATE 1-DPL to sell buyout funds for about $850 mln

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=7623363

DPL, the parent of Dayton Power & Light, said the buyer is a joint venture of New York-based Lexington Partners and AlpInvest, a private equity fund owned by Dutch pension funds ABP and PGGM. Both funds are leading buyers of "secondary" private equity investments that their primary investors want to exit.

Dayton, Ohio-based DPL said last November it was considering options for its financial asset portfolio, which has investments in funds managed by leading buyout firms including Kohlberg Kravis Roberts & Co., Warburg Pincus LLC, CVC Capital Partners and 24 others.

DPL said it would use the proceeds to pay down debt and possibly make acquisitions. Shares in DPL rose 5.2 percent by noon trading, up $1.32 to $26.32 on the New York Stock Exchange.

Private equity firms typically agree to buy assets and exercise a call option on funds from investors. Under the agreement, Lexington and AlpInvest will take over these funding obligations, assuming the buyout funds agree to the transaction, said DPL.

[54anickel]

40. 1:25 numbers, blather and buck

Dow 10,787.22 -8.79 (-0.08%)
Nasdaq 2,078.77 +2.11 (+0.10%)
S&P 500 1,205.19 -0.11 (-0.01%)
10-yr Bond 4.073% -0.02
30-yr Bond 4.445% -0.04
NYSE Volume 745,681,000
Nasdaq Volume 998,043,000

1:00PM: Little changed since the last update as equities continue to vacillate in roughly the same ranges... Treasuries, however, have inched slightly higher despite having no economic data or influential Fed-speak to digest... Bond traders have traded with a cautious tone most of the morning, which will likely dominate into tomorrow's retail sales report, but the long-end of the curve has recently bounced higher as speculators come in either out-right or with a flattening slant... The benchmark 10-year note has climbed 3 ticks to yield 4.07%...NYSE Adv/Dec 1668/1512, Nasdaq Adv/Dec 1485/1551
12:30PM: More of the same for the averages as the blue chips and Nasdaq continue to trade in opposing directions... On the Dow, AIG (AIG 70.62 -2.50) continues to weigh on blue chips after getting subpoenaed while Hewlett-Packard (HPQ 20.66 -0.64) has also succumbed to selling pressure after reports highlighted the difficulty and/or likely improbability of HPQ breaking up its operations...

Other components in focus have been Verizon (VZ 36.77 +0.46), after confirming its bid for MCI, McDonald's (MCD 32.45 +0.20), after settling a lawsuit over trans fats, and Boeing (BA 53.82 -0.32), amid further Pentagon investigations into additional weapons contracts... NYSE Adv/Dec 1628/1520, Nasdaq Adv/Dec 1454/1546


and the buck -

Last trade 83.88 Change -0.69 (-0.82%)

Settle 84.57 Settle Time 23:37

Open 84.10 Previous Close 84.57

High 84.53 Low 83.78

[54anickel]

41. Bush budget seen as time bomb for successor

http://www.palmbeachpost.com/news/content/news/epaper/2005/02/14/a4a_deficit_0214.html

WASHINGTON — For President Bush, the budget sent to Congress last week outlines a painful path to meeting his promise to bring down the federal budget deficit by the time he leaves office in 2009. But for the senators and governors already jockeying to succeed him, the numbers add up to a budgetary land mine that could blow up just as the next president moves into the Oval Office.

Congress and the White House have become adept at passing legislation with hidden long-term price tags, but those huge costs began coming into view in Bush's latest spending plan. Even if Bush succeeds in slashing the deficit in half in four years, as he has pledged, his major policy prescriptions would leave his successor with massive financial commitments that begin rising dramatically the year he relinquishes the White House, according to an analysis of new budget figures.

Bush's extensive tax cuts, the new Medicare prescription drug benefit and, if it passes, his plan to redesign Social Security all balloon in cost several years from now. His plan to partially privatize Social Security, for instance, would cost a total of $79.5 billion in the last two budgets that Bush will propose as president and an additional $675 billion in the five years that follow. New Medicare figures likewise show the cost almost twice as high as originally estimated, largely because it mushrooms long after the Bush presidency.

"It's almost like you've got a budget, and you've got a shadow budget coming in behind that's a whole lot more expensive," said Philip G. Joyce, professor of public policy at George Washington University.

By the time the next president comes along, some analysts said, not only will there be little if any flexibility for any new initiatives, but the entire four-year term could be spent figuring out how to accommodate the long-range cost of Bush's policies.

more...

Hmmm, is this "by design"? Another vast right-wing conspiracy theory? :shrug:

[54anickel]

42. From Some Bush Supporters, Anger Over Budget

http://www.washingtonpost.com/wp-dyn/articles/A21552-2005Feb13.html

:nopity: See what happens when those red state BeezleBush zealots are conned into voting against their own best interests in favor of some special interest? They'll never learn. But hey, at least gays can't marry. :eyes:


snip>

"We expected to fight cuts to rural programs under the Clinton administration," he said. "But those who are currently advocating these draconian cuts would not be in office today if it weren't for rural America. These cuts disproportionately target essential programs in rural communities while turning a blind eye to the wasteful spending that is rampant in many big cities across the country."

Peterson is no bleeding heart. The Pennsylvania Republican has a 91 percent lifetime rating from the American Conservative Union. But he realized quickly that the budget Bush proposed would hit hardest some of his most loyal supporters: the red states that voted GOP last year and other conservative constituencies across the country.

Agricultural programs would be cut 17 percent by 2010. Cuts in farm subsidies would hit solidly Republican southern states that produce cotton and rice. Veterans' programs would be cut 16 percent. Help for rural airports would be cut in half. Money for first responders would shift to urban areas.

According to an analysis of Bush's budget proposals, red states won by Bush in 2004 would experience cuts in federal grants in 2006 equal to 2.33 percent of their budgets on average. But blue states won by the Democratic nominee, Sen. John F. Kerry (Mass.), in 2004 would lose federal grant money equal to only 1.74 percent of their budgets on average. The averages were compiled using an analysis of Bush's budget proposal by the Center on Budget and Policy Priorities, a liberal advocacy group, which looked at aid payments, other than Medicaid, to states.

snip>

Peterson, the rural caucus co-chair, cites several program cuts that would hit particularly hard in Bush country: elimination of rural hospital flexibility grants for critical access hospitals; cuts in Rural Health Outreach grants to $11 million, from $39 million; eliminating the $1.2 billion Perkins vocational education program; cutting the Essential Air Service program to $50 million, from $102 million; reducing the Manufacturing Extension Partnerships for small and mid-size businesses to $47 million, from $109 million; cutting the Agriculture Department's rural development program to $13.5 billion, from $15.5 billion; reductions in first-responder funds for rural areas; and cuts in payments to counties with large amounts of federal land.

more...

[54anickel]

43. Bush budget cuts everything but war

All out March 19 to demand 'Money for people's needs, not Pentagon'

http://www.workers.org/us/2005/budget_0217/

After all the triumphalism, all the grandiose boasts about U.S. finance capital bringing "democracy" to the world on the tips of bayonets, here comes the bill. And it's a whopper.

Bush's proposed $2.57 trillion--yes, trillion--fiscal 2006 budget is no "guns and butter" financial plan, aimed at appeasing the home-front population while waging war for empire abroad. This even cuts out the bread.

"These budget cuts are a declaration of war on the cities of the U.S.--on the lives of working and oppressed peoples," Sara Flounders, co-director of the International Action Center, stressed to Workers World newspaper. "And they underscore the importance of mobilizing for protests on March 19--the second anniversary of the Pentagon-led war against the Iraqi people."

More than 150 government programs are on the chopping block. Those who will suffer the greatest are not in the Bush administration's conservative political base, although some of them may feel it, too.

big snip>

That is what makes March 19 all the more important. More than 20 organizing centers, from the East Coast to the Midwest, are mobilizing to bring people to the protests--particularly the rally in Central Park in Manhattan. Car caravans and feeder marches are in the works. The list of endorsers is growing.

For national information contact the Out Now Coalition at [phone].

more...

[54anickel]

45. Bush Wants $82B More for Iraq, Afghan Costs

http://story.news.yahoo.com/news?tmpl=story&cid=544&ncid=703&e=4&u=/ap/20050214/ap_on_go_pr_wh/bush_iraq_afghanistan

WASHINGTON - President Bush (news - web sites) was poised to officially ask Congress Monday for an estimated $82 billion to cover the costs of continuing military operations in Iraq (news - web sites) and Afghanistan (news - web sites) and a myriad of other internationally related expenses, including training Iraqi security forces and aiding victims of the tsunami.

The White House was to send the supplemental budget request to Capitol Hill late Monday, White House press secretary Scott McClellan told reporters.

Included in the request is $74.9 billion for the Defense Department, including $5 billion for transforming Army divisions and brigades and $5.7 billion for training and equipping Iraqi military and police, according to a federal official familiar with the supplemental.

The remaining money in the supplemental request includes $950 million to help areas affected by the recent tsunami in the Indian Ocean; $350 million to aid the Palestinians; $400 million to reward nations that have taken political and economic risks to join U.S.-led coalitions in Iraq and Afghanistan; money to help build a U.S. embassy in Baghdad; reconstruction funds for Afghanistan; and money for the Darfur region of western Sudan where a 2-year-old civil conflict has left tens of thousands off people killed and more than 2 million displaced.

snip>

Still, the Blue Dog Coalition, a group of 35 moderate and conservative Democrats, known as fiscal and defense hawks, are criticizing the administration for using the supplemental budget request to ask Congress for more money to finance the war. Supplemental budget requests often don't receive as much scrutiny and often don't include the same amount of detail as regular budget requests.

Another blank check :eyes:

more...

[54anickel]

46. Budget Bloodbath

http://www.inthesetimes.com/site/main/article/1957/

“It’s not something we’ve done with a meat axe,” Vice President Dick Cheney told Fox News in defense of the administration’s FY 2006 budget. Cheney’s words bring to mind the first rule in deciphering the Bush code of conduct: Reverse what they say to divine what they’ll do.

This budget goes straight for the jugular, proposing $212 billion in cuts to domestic discretionary programs over the next five years, coupled with tax cuts for the rich that aim to radically shrink government and anger middle- and low-income voters. Grover Norquist, president of Americans for Tax Reform, described the doctrine to U.S. News & World Report: “The goal is reducing the size and scope of government by draining its lifeblood.”

The audacity of these cuts lays bare yet another Republican strategy: Overshoot the mark, call anyone who questions you partisan and then look “compassionate” by offering a small concession. To wit, as happened in early January: Have your party’s right flank propose to dramatically weaken House ethics rules, and then appear reasonable when this proposal is scaled back to a seemingly minor rule change that still effectively protects Rep. Tom DeLay (R-Texas).

snip>

Of course, this budget won’t pass without a fight—but that’s the point. Democrats—estranged from and ashamed of their progressive flank—wear themselves out to retain gains gruelingly won through nearly a century of grassroots action. Weak protests about the White House’s “wrong priorities” make little headway against Republicans who shamelessly trumpet their ill-founded and contradictory creed.

snip>

Some signs are hopeful. A few brave members of Congress, like Sen. Barbara Boxer (D-Calif.), continue to boldly speak out against Republican tactics. Howard Dean is a lock for the Democratic National Committee chairmanship. And his popular 2004 campaign, along with the election efforts of grassroots groups like Rainbow/PUSH, have spurred the formation of the Progressive Democrats of America, a group dedicated to retaking the Democratic Party from corporate influence, state by state.

more...

[MARALE]

44. Taser stock zapped again

http://www.eastvalleytribune.com/index.php?sty=36286

A series of critical reports, including the latest from Chicago police, saw the stock steadily drop to $33.45 in December and move swiftly downward last month to $14.10 a share.

The stock rose slightly, but then dropped again to $14.42 Thursday after CBS reported that an Air Force study found multiple shocks from a Taser stun gun led to heart damage in pigs.

The latest downward spin came Friday when stock dropped 6.5 percent to close at $13.48 following news reports that Chicago Police Superintendent Philip Cline ordered the halt in distributing 100 Tasers to city police following the death of man shot by police with a Taser stun gun.

The stun guns were to be distributed in the next few weeks.

[54anickel]

47. Investors hold their ground

Major stock gauges hold to tight trading range despite multi-billion telecom deal, AIG's woes.

http://money.cnn.com/2005/02/14/markets/markets_newyork/

NEW YORK (CNN/Money) - Stocks were little changed Monday afternoon, as investors showed little response to the day's biggest deal -- a multi-million merger in telecom -- and kept an eye on AIG, facing new regulatory scrutiny.

snip>

Typically, a deal of that size might have fired up a rally in the telecom sector, but investors seemed to show little reaction to the news, a response that has followed other big merger news in recent weeks.

"I think the market is saying generally regarding these mergers, 'OK, great, you're doing a merger, but let's see how these play out, let's see how you're growing the top line,'" said Sarat Sethi, portfolio manager at Douglas C. Lane & Associates.

snip>

Stocks rallied Friday, with the Dow closing at a new high for the year. However, stocks showed little positive momentum Monday, struggling amid some investor lethargy in the face of a slew of big deals and developments.

snip>

"I think we're looking at sideways trading over the next few months, because I don't see any big catalyst to move us one way or the other," he added.

more...

[54anickel]

48. 2:38 update

Dow 10,787.14 -8.87 (-0.08%)
Nasdaq 2,078.27 +1.61 (+0.08%)
S&P 500 1,205.27 -0.03 (-0.00%)
10-yr Bond 4.071% -0.02
30-yr Bond 4.443% -0.04
NYSE Volume 929,154,000
Nasdaq Volume 1,214,236,000

2:30PM : Still a basically unchanged market with not much to move the indices in the late afternoon... Offsetting some of the financial sector's weakness today has been strength in online brokers... Shares of Charles Schwab (SCH 10.95 +0.18), despite posting a slight decline in Jan daily trading revenue, have surged after it brought in net new assets of $4 bln, while Ameritrade (AMTD 11.60 +0.08) has climbed after it was upgraded to Neutral from Sell at Banc of America Securities due to valuation...
Buying interest in Fannie Mae (FNM 63.35 +0.93) has also helped minimize losses in the sector (-0.3%) following reports that Citigroup (C 49.24 -0.16) and Capital Research & Management both own sizable stakes in the mortgage-finance giant...NYSE Adv/Dec 1598/1663, Nasdaq Adv/Dec 1336/1746

2:00PM : Major indices continue to trade in mixed fashion, showing little direction, despite increased M&A activity... While the day's largest deal involves talks between Verizon and MCI, investors have received an update on a smaller yet also encouraging deal... Movie Gallery (MOVI 21.45 +0.03) has received antitrust clearance to proceed with its a lower-priced, friendly $900 mln takeover of video rental chain Hollywood Entertainment Corp. (HLYW 14.11 -0.16)...

Last week rival Blockbuster (BBI 9.27 -0.13) launched a hostile $1.0 bln cash and stock bid for HLYW, but reports suggest that BBI is facing increasing opposition from antitrust enforcers...NYSE Adv/Dec 1689/1547, Nasdaq Adv/Dec 1455/1607

1:30PM : Market continues to trade with a tinge of caution as the major averages remain range bound... Volumes continue to run far below average at both the Big Board and Composite, as the latter has yet to surpass 1.0 bln shares... Computer hardware (+0.9%) remains a leader to the upside as do steel (+1.4%), utility (+0.9%) and networking (+0.4%)... Software has recovered some of last week's losses after reports suggest the sell off of anti-virus makers following Microsoft's acquisition has been overdone...

Trading lower, however, have been oil & gas drillers (-2.0%), following a CSFB downgrade on Noble Corp (NE 55.21 -1.10), insurance brokers (-1.6%), biotech (-0.9%) and homebuilding (-0.6%)... NYSE Adv/Dec 1674/1543, Nasdaq Adv/Dec 1451/1602

Advances & Declines
NYSE Nasdaq
Advances 1639 (47%) 1373 (42%)
Declines 1638 (47%) 1713 (53%)
Unchanged 158 (4%) 136 (4%)

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

Up Vol* 434 (49%) 731 (62%)
Down Vol* 433 (49%) 417 (35%)
Unch. Vol* 9 (1%) 19 (1%)

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

New Hi's 260 124
New Lo's 10 29

[RawMaterials]

49. 3:30 Market Update and Blather

Dow 10,791.13 -4.88 (-0.05%)
Nasdaq 2,080.59 +3.93 (+0.19%)
S&P 500 1,206.13 +0.83 (+0.07%)
10-Yr Bond 40.75 -0.20 (-0.49%)
NYSE Volume 1,111,132,000
Nasdaq Volume 1,419,866,000

3:00PM: Stocks still mired in relatively tight trading ranges as the major averages continue to drift sideways... Meanwhile, the dollar remains under pressure against both the euro (1.2963) and the yen (105.16) following an increase in Japan's current account surplus and potential concerns over Euro Zone inflationary issues... Embracing weakness in the greenback, however, were gold futures, which recently closed up 1.3% at $427.30/ounce... NYSE Adv/Dec 1627/1638, Nasdaq Adv/Dec 1338/1754

2:30PM : Still a basically unchanged market with not much to move the indices in the late afternoon... Offsetting some of the financial sector's weakness today has been strength in online brokers... Shares of Charles Schwab (SCH 10.95 +0.18), despite posting a slight decline in Jan daily trading revenue, have surged after it brought in net new assets of $4 bln, while Ameritrade (AMTD 11.60 +0.08) has climbed after it was upgraded to Neutral from Sell at Banc of America Securities due to valuation...

Buying interest in Fannie Mae (FNM 63.35 +0.93) has also helped minimize losses in the sector (-0.3%) following reports that Citigroup (C 49.24 -0.16) and Capital Research & Management both own sizable stakes in the mortgage-finance giant...NYSE Adv/Dec 1598/1663, Nasdaq Adv/Dec 1336/1746

2:00PM : Major indices continue to trade in mixed fashion, showing little direction, despite increased M&A activity... While the day's largest deal involves talks between Verizon and MCI, investors have received an update on a smaller yet also encouraging deal... Movie Gallery (MOVI 21.45 +0.03) has received antitrust clearance to proceed with its a lower-priced, friendly $900 mln takeover of video rental chain Hollywood Entertainment Corp. (HLYW 14.11 -0.16)...

Last week rival Blockbuster (BBI 9.27 -0.13) launched a hostile $1.0 bln cash and stock bid for HLYW, but reports suggest that BBI is facing increasing opposition from antitrust enforcers...NYSE Adv/Dec 1689/1547, Nasdaq Adv/Dec 1455/1607

1:30PM : Market continues to trade with a tinge of caution as the major averages remain range bound... Volumes continue to run far below average at both the Big Board and Composite, as the latter has yet to surpass 1.0 bln shares... Computer hardware (+0.9%) remains a leader to the upside as do steel (+1.4%), utility (+0.9%) and networking (+0.4%)... Software has recovered some of last week's losses after reports suggest the sell off of anti-virus makers following Microsoft's acquisition has been overdone...

Trading lower, however, have been oil & gas drillers (-2.0%), following a CSFB downgrade on Noble Corp (NE 55.21 -1.10), insurance brokers (-1.6%), biotech (-0.9%) and homebuilding (-0.6%)... NYSE Adv/Dec 1674/1543, Nasdaq Adv/Dec 1451/1602

[RawMaterials]

51. Closing Numbers and blather

Dow 10,791.13 -4.88 (-0.05%)
Nasdaq 2,082.91 +6.25 (+0.30%)
S&P 500 1,206.14 +0.84 (+0.07%)
10-Yr Bond 40.75 -0.20 (-0.49%)

NYSE Volume 1,288,926,000
Nasdaq Volume 1,632,045,000


Close: Market showed little enthusiasm as split industry leadership, mixed breadth figures, very light trading volumes and a lack of market moving news left the indices relatively unchanged all day and closed the major averages in split fashion... Even confirmation that Verizon Communications (VZ 36.17 -0.14) will acquire MCI Inc. (MCIP 19.93 -0.82) for $6.75 bln in cash and stock - a formal bid that brought the total M&A activity in 2005 to nearly $160.0 bln and would on most days provide stronger support to the overall stock market - did little to spur broad-based buying interest...

Investors were also left with little in the way of notable earnings reports and economic data to provide enough conviction to extend Friday's solid gains, as lower volume consolidation implied only minimal selling pressure and most of the day's news items were company specific... Computer hardware (+1.1%) surged after UBS upwardly revised their FY05 and FY06 EPS estimates on Apple Computer (AAPL 84.63 +3.42), helped negate weakness in Hewlett-Packard (HPQ 20.75 -0.55), which announced a $21 mln severance package for recently ousted CEO Carly Fiorina...

Utility (+0.9%) was also strong following a Smith Barney upgrade on Duke Energy (DUK 27.39 +0.60) while pharmaceutical (+0.5%) got a healthy lift from Pfizer (PFE 25.48 +0.33) after a study showed its epilepsy drug Lyrica reduced seizures by more than 53%... Energy, following an upgrade on ConocoPhillips (COP 100.75 +1.71) and slightly higher crude oil prices ($47.44/bbl +$0.28) also posted modest gains while materials also closed modestly higher at the expense of a weak dollar and subsequent strength in gold futures ($427.30/ounce; +1.3%)...

The greenback sold off against both the euro (1.2963) and the yen (105.16) following a jump in Japan's trade surplus and possible concerns over Euro Zone inflationary issues... Homebuilding (-0.7%) extended Friday's sell off while modest weakness was also seen in transportation, disk drive and financial... The latter was weak after American International Group (AIG 71.46 -1.66) received subpoenas from NY Attorney General Eliot Spitzer and the SEC... Internet was also a focal point as the lock-up period on nearly 177 mln shares of Google (GOOG 192.99 +5.59) expired while General Motors' (GM 37.25 +0.11) $2.0 bln settlement with Fiat SpA kept auto stocks in focus...

Meanwhile, treasuries also traded with a cautious tone all day as traders had no economic data or influential Fed-speak to aggressively push bonds in either direction... The benchmark 10-year note closed up 3 ticks to yield 4.07%...DJTA -0.7, DOT +0.7, Nasdaq 100 +0.5, SOX +0.2, XOI +0.3, NYSE Adv/Dec 1791/1500, Nasdaq Adv/Dec 1534/1592