STOCK MARKET WATCH, Monday 1 July

[ozymandius]

Monday July 11, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 194 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 205 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 267 DAYS
DAYS SINCE ENRON COLLAPSE = 1324
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 WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90

AT THE CLOSING BELL ON July 8, 2005

Dow... 10,449.14 +146.85 (+1.43%)
Nasdaq... 2,112.88 +37.22 (+1.79%)
S&P 500... 1,211.86 +13.99 (+1.17%)
10-Yr Bond... 4.11% +0.08 (+1.94%)
Gold future... 424.20 -0.30 (-0.07%)

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

[ozymandius]

1. WrapUp by Tim W. Wood

THE DOW REPORT
A Look at a Few Current Non-Confirmations

The first chart below is of the Dow Jones Industrial Average and the Dow Jones Transportation Average. As I have explained many times before, but just for clarification I’ll say it again, both bull and bear markets unfold in three phases. The decline into the 2002 low on the Industrials was only Phase I. The rally out of that low was the ever so common rally that serves to separate Phase I from Phase II. The blue line marks the Primary non-confirmation that has occurred with the advance out of Phase I lows.

It may be a little hard to see in this chart, but the Industrials made a higher high in June than the Transports did. This in turn created a Secondary non-confirmation and is marked in red on the chart below.


This Secondary non-confirmation is warning us that the stock market barometer is seeing trouble on a shorter term horizon as well. Like Robert Rhea said “When the averages disagree they are shouting ‘be careful.'” The averages are shouting at two levels now. When this occurs it pays to listen to the warnings, because the market is beginning to discount bad news in spite of the fact that all we hear from the mainstream is that the economy is good and that everything is going to be fine.

Next I want to take a look at the Industrials, shown in the upper chart below, vs. the Retailer Holders Index shown in the lower chart. I have found that non-confirmations between the Industrials and the Retailers are also warnings that should be taken to heart. As an example, the Retailers made a price high last November while the Industrials topped out in March. Therefore, the Retailers did not confirm the March high seen by the Industrials. This non-confirmation lead to the decline into the April lows. Now, once again we are seeing another non-confirmation developing between these two averages. The Industrials topped out in June, while the Retailers continued higher into early July. This non-conformation is also a “secondary” non-confirmation if you will, in that it has occurred at a level that is subordinate to the November/March non-confirmation. Therefore, we have non-confirmations at multiple levels and this simply serves as warnings because the indexes are not all “in gear.”

more...

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

[54anickel]

2. Great toon Ozy. Those future charts are even a bigger laugh this

morning! It's another SALE!!!!

[54anickel]

3. Back to the Drawing Board (Roach)

http://www.morganstanley.com/GEFdata/digests/20050708-fri.html#anchor0

snip>

A few times every year, I get the opportunity to present my view to the academic community. The challenge is very different with this group. Unlike investors, where accountability takes place on a mark-to-market basis, in the academic world, it is the rigor of the analytical framework that is tested. Recently, I sung for my supper in front of a group of superstars at Stanford University. Predictably, they went right for the jugular -- challenging one of the major building blocks of my macro framework. Nobel laureate Kenneth Arrow politely suggested that I might want to consider reworking a key assumption. That stopped me dead in my tracks. For a moment, I felt like I was in graduate school again. It was back to the drawing board.

The debate was over my core premise of the income-short American consumer. For some time, I have argued that consumers were being squeezed by an unprecedented stagnation in real wages and an equally profound shortfall in the wage earnings component of personal income. I have stressed that this development is all the more extraordinary in the context of America’s high-productivity-growth economy. After all, one of the time-honored axioms of a free-market capitalist system is that workers are paid in accordance with their marginal productivity contribution. The Stanford crowd hardly quibbled with this basic point. They suggested, however, that I was wrong to test this hypothesis by scrutinizing trends in real wages and wage and salary income. The theoretically correct construct, they argued, was the linkage between productivity and the broader measure of real compensation -- wages plus benefits. They were right, of course. And so I have redone the analysis from the standpoint of compensation. Interestingly enough, my earlier conclusions hold: The extraordinary stagnation of earned labor income in the past four years reflects a fundamental breakdown of the relationship between worker pay and productivity. The saga of the income-short American consumer remains very much intact.

Here’s what the recalculations show: The story still starts with the combination of the weakest hiring recovery on record and an extraordinary outbreak of real wage stagnation. Not only has private sector job growth fallen nearly 10 percentage points short of the typical recovery path, but fully 42 months into this recovery, the inflation-adjusted hourly wage rate is fractionally below the level prevailing at the trough of the last recession in November 2001. Adding in the benefits piece of worker compensation does not change the bottom line of an unprecedented shortfall in labor income generation. According to our new calculations, the private sector compensation component of personal income -- direct wage payments plus benefits -- is up only 11% in real terms so far in this recovery; this is well below the 17% average increase recorded over comparable 42-month intervals of the preceding five business cycles. (Note: Including rapidly growing benefit outlays narrows the wage and salary gap that we originally stressed by only about 12%). This shortfall of organic labor income generation is all the more unusual in a period of rapid productivity growth. In the first 13 quarters of this recovery, total hourly compensation in the nonfarm business sector increased only 7.5% in real terms -- far short of the 13.0% cumulative gain in productivity over this same interval. American workers, long accustomed to receiving their “just reward” as defined by their marginal productivity contribution, are facing the most profound disappointment of the modern era.

snip>

Needless to say, the implications of this development are profound. Three big conclusions jump off the page: One, American consumers are, indeed, as income-constrained as I had previously thought. Broadening the focus to compensation only underscores the key point that labor earnings are behaving very differently than might be expected of a high-productivity growth economy. Two, US policymakers -- especially the Fed -- have responded by providing stimulus to asset markets in order to provide a substitute for lagging organic income generation. Increasingly wealth-dependent consumers then drive their income-based saving rates lower -- leading to an ever-wider current-account deficit and ever-mounting global imbalances. Meanwhile, asset markets go to excess and bubbles become the rule, not the exception. Three, as the angst of economic insecurity has spread from concerns over jobs to wages, and as the US trade deficit mounts, the risks of politically inspired protectionism rise. Washington’s focus on China bashing is in fashion these days for precisely these reasons.

more...

[geckosfeet]

28. From the trenches, I can say you are fairly accurate in your analysis.

But,, here is my ground level view anyway!

Although in a practical in the trenches sort of way I am not sure what the academic community is seeing or even means in terms of "real compensation". Not only do lower income workers have few if any "benefits" from their jobs, but neither does this well educated formerly well employed poster. I think about a tiered employment system to provide some granularity to the analysis. It is the lower tiers that I feel deserve the most attention.

Consider seasonal jobs, high school and college students, migrants farm workers, super market part timers, coffee shop part timers, department store, Wal Mart employees, gas station attendants and so on. We see and interact with most of these occupational positions every day. Their labors help our country run. Do they uniformly have health insurance and benefits? These people are treated as consumable commodities. Culturally, as a nation, we accept this exploitation. To me, this seems like it would merit being factored into any analysis of "real compensation".

The next tier of employment may enjoy a more significant contribution to their "real compensation" from employer provided benefits. Here, wage stagnation is undeniable and is perhaps easily documented, although I have not done so but simply site my experience and published hearsay. Anyway, to include health and other insurance benefits would be more sensible in a "real compensation" analysis if these benefits were equally distributed across this employment tier. For example, national insurance or employer provided benefits that were similar from one workplace to the next would make this a far more effective and measurable argument.

I would further suggest that the effort to broadly put forward the notion that "real compensation" generally includes benefits is a national fraud. Its an academically correct way of saying "Be thankful you have a job". One effect of this is to legitimize the exploitation of the "workforce". This in turn creates an underclass of consumable laborers.

I would add that there are also many, like myself, who have lost good paying jobs and find themselves as less desirable job candidates due to age, health or other forms of workplace discrimination. In my case, now working on my own, making perhaps minimum wage on a hourly basis with NO benefits I find the concept of "real compensation" laughable.

Consider: Property taxes up: WAY UP. Home and vehicle maintenance, business expenses are way up as well. I would factor this into any analysis of "real compensation".

For me, what all this points to is national and government supported exploitation of the "workforce". We are, very effectively, being transformed into consumable commodities. Eliminating insurance, health care, pension plans etc. makes business more profitable and allows management to reward themselves with more extravagance. Bushco's attempt to take a portion of our national retirement program and put it into the hands of investment firms is to me, another awe inspiring attempt at giving to the already profitable corporate entities at the expense of the American citizen.

What further de-humanizations will we endure when the bill for our misguided international exploits comes due.

[54anickel]

37. The bill will not come due until the "wealth illusion" finally pops and

the American people wake from their slumber. The "re-edumacation" runs deep. Many still believe what's good for the corporation is good for them as an employee and shareholder. Their "re-education" omitted the awareness of their larger role in a greater society. Rugged individualism, I got mine - go get your own, selfishness and greed are today's virtues thanks to the corporatists take over of our media, entertainment and educational systems.

They are slowly seeing the wealth illusion erode as an employee, but they will awaken too late to save the hard earned gains made by their forefathers in the old labor movement of the 30's and 40's. They will call for protectionism which will do nothing to save them from the plight. The global wage arbitrage that Roach discusses has but one remedy - the US standard of living must decline while the developing world we have exploited for the past 2-3 decades plays catch up.

The US will loose it's grip on being the world leader and superpower as that rebalancing takes place. The Neo-cons in charge seem to think that forever war will be the answer, after all isn't war good for the economy? We will not be able to maintain our leadership role on an economy that has been allowed to become based consumerism and financial hedging.

[54anickel]

4. Dollar's strength weakens overseas earnings

http://biz.yahoo.com/ft/050710/fto071020051746172571.html?.v=1

Corporate America will have to do without one of its largest sources of growth this earnings season as the rapidly strengthening dollar reverses its flattering effect on overseas profits.

Year-on-year comparisons for multinational companies had been inflated for 12 quarters in a row by a weakening dollar.

Its steep rise against the euro and other currencies since January means second quarter figures out soon will instead see foreign profits translated at roughly the same rate as this time last year.

But the currency volatility means more than just an end to the quarterly supercharging of reported earnings.

It also threatens to disrupt the repatriation of hundreds of billions of dollars of foreign earnings built up over several years.
Uh-oh

more...

[54anickel]

5. Goodbye Middle Class; Hello House Poor

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=44644

There’s no question that home building, home sales with large capital gains, and record mortgage financing drives the economy, creating millions of jobs and generating billions of dollars in wages and tax revenues each year. Nothing plays a more crucial role in providing individual financial security for millions of Americans than homeownership. Obviously, the drivers of homeownership are a good steady income and cheap and readily available mortgage credit. Indeed, looking at housing prices rocketing up, our government tells us we have never had it better!

For many households, however, who have not stepped onto the first rung of the housing ladder, affordability conditions have deteriorated, especially among lower income households. The homeowner rate is less than 50 percent for households in the lowest income bracket, while it surpasses 90 percent for those in the top income bracket. Higher income clearly widens the choice of available homes for purchase and increases the likelihood that a household will qualify for a mortgage. Around 1980, when asked what level of personal income would qualify as middle-class, George H.W. Bush replied: $50,000. Only 5 percent of the U.S. population made that amount of money at that time. With inflation, that’s over $100,000 today.

While the United States has traditional values of hard work, entrepreneurship, and individualism, we have a large and growing number of people in our country who live hand to mouth and paycheck to paycheck. Since factories are no longer built in our country and the cost of living is increasing at an astounding pace, it’s likely that the lower-middle class will struggle to own a home for generations to come. The working poor are dreaming about white picket fences and becoming middle-middle, while the middle-middle aspire to become upper-middle and beyond so they can afford to build one of those Mc-Mansions we’ve all seen that absolutely dwarfs the older, split-level homes the baby boomers grew up in.

There are five separate social classes in American society. They are the Upper, Professional Upper-Middle, Middle-Middle, Lower-Middle or “working poor”, and the Lower. America used to be a land with a few upper class, some lower middle class and the rest were somewhere in the professional upper-middle and middle-middle category. Factory workers were middle-middle. Now when a worker loses their job at the factory and takes a job at Wal-Mart for one-third of his previous wage, are they still in the middle?

snip>

A growing number of homeowners are realizing they can no longer afford to live in their home even though they’re “mortgage free”! The conservative sane homeowner who purchased a home over five years ago and refinanced a 30-year mortgage – without taking money out - is now stuck paying higher inflated taxes. Indeed, the home’s value hasn’t really gone up because the price and the cost of everything associated with maintaining it is spiraling out of control. In a very real sense, as the house price rises, the value is forced down because it becomes so much more expensive to pay for the darn thing!

more...

[UpInArms]

16. Luxury home buying, improvement rising - Coldwell

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-11T100017Z_01_N10234732_RTRIDST_0_ECONOMY-HOMES-LUXURY.XML

NEW YORK, July 11 (Reuters) - Demand for high-end homes is ballooning even as prices reach skyward and owners are still pouring money into home improvements, according to Coldwell Banker's 2005 Luxury Index.

Sales of homes priced $3 million or more jumped 35 percent in the first three months of this year compared with a year earlier, the survey found. Moreover, heavy spending on home renovations and additions in the luxury market is heating up an already steamy housing economy.

"You've got favorable interest rates, the economy is continuing to improve, jobs are being created, there are bigger bonuses out there for the top level executives that are pretty much the buyers of these homes, and baby boomers purchasing the majority of them are still in their prime," said Jim Gellespie, chief executive officer of Coldwell Banker Real Estate Corp. in Parsippany, New Jersey.

Prices in this category are surging with double-digit annual gains in some regions.

"In many cases these affluent homeowners have more than one trophy property for either recreational, entertainment or investment purposes," said Gillespie. "The continuing home improvement craze is a boon for the real estate market and a major reason for rapid appreciation."

Rising interest rates do not appear to be crushing buying or spending.

...more...

[54anickel]

22. Glad to see some folks are doing well in these seemingly difficult

times. Surely my predicament must be a self-induced fluke of some sort. We un/under-employed must be a very small minority. Maybe if we go a wee bit more in debt and fix-up our homes we can partake in this great US asset-wealth based economy. :eyes:

[54anickel]

21. U.K./U.S. Housing and the Upcoming Liquidity Trap

http://www.321gold.com/editorials/shedlock/shedlock071105.html

snip>

"Earlier this month, official data showed the number of people in the country out of work and claiming benefits rose for a fourth month in May, the longest stretch of increases in almost 13 years."

This is interesting, because just a few weeks ago, I proposed the theory that housing would not lead the decline in jobs, but other job losses would lead the decline in housing.

Eventually, replacing manufacturing jobs, telecom jobs, banking jobs, and all sorts of other jobs with more real estate broker jobs (all fighting to sell the same house) and "greeting" jobs at your friendly Wal-Mart store is just not going to cut it.

What's happening in the United Kingdom right now is a harbinger of what is going to take place in the United States, with some unknown lag time. It's no secret that employment in this "recovery" is both unprecedented and amazingly weak. Yet Greenspan remains in a conundrum about long-term interest rates. Is he really that stupid, or is he trying to talk the economy up, or both? In my opinion, the long bond can spot the upcoming debacle. I do not accept the theory that yields are low solely because of Chinese and Japanese intervention.

The yield curve is now as flat as a pancake. A flat yield curve is hardly conducive for tremendous profits at financial institutions. To "make up" for declining carry trades, it seems banks and other lenders keep taking on riskier and riskier housing loans with lower and lower credit standards in the face of higher and higher prices. No risk is too great to keep the party going.

Indeed, BusinessWeek is reporting on this phenomenon in an article entitled, "Mortgage Bankers: Desperate to Lend":

snip>

It now seems that all the bulls are counting on Greenspan to "save the day" with a pause in interest rates at the appropriate time. If that does not work, so the theory goes, Greenspan will "save the day" by cutting interest rates.

Here is a prediction for you: Once Greenspan pauses, the party will be over. Perhaps long over. I have another prediction for you: The next big conundrum question on the minds of economists and stock bulls will be, Why is the economy not picking up with the Fed cutting rates?

Here is my answer, in advance: Just as a interest rates rising at a "measured pace" indicated the party was still alive, falling interest rates will be a signal that the economy is falling apart faster than anyone thought it could. After all, the market rose along with interest rate hikes; is it supposed to rally when they fall, too? Is everything good for stocks? Thinking about this right now, I am wondering if we'll get some enormous gap and crap as soon as Greenspan pauses.

Meanwhile, there is little sign of significant job pickup in the United States. Let's take a look at June layoffs, in a list I compiled on my Silicon Investor stock message board. (If anyone is interested in day-to-day macroeconomic chat, feel free to join me there.)

more...

Holy Sh*t - check out that layoff list!
http://www.siliconinvestor.com/readmsg.aspx?msgid=21454208

[54anickel]

6. Oil Falls a Third Day as Hurricane Dennis Misses U.S. Gulf Rigs

http://www.bloomberg.com/apps/news?pid=10000087&sid=ao3mLb8lVgYc&refer=top_world_news

July 11 (Bloomberg) -- Crude oil fell for a third day after Hurricane Dennis missed rigs and platforms in the Gulf of Mexico, easing concern about disruption to U.S. supplies.

snip>

``The realization this morning is that the storm has had minimal impact, so we are out of the danger zone for oil and gas supplies,'' said Tim Noest, a broker at ADM Investor Services International in London. ``Some people had already got out of the market on Friday, rather than wait over the weekend.''

snip>

Separately, Chinese customs statistics showed that the nation's imports of oil products, including diesel, in the January through June period fell 21 percent from a year earlier to 15.7 million metric tons.

China's imports of crude oil in the first half of the year rose by 3.9 percent to 63.4 million metric tons, the official Xinhua News Agency reported today.

snip>

```The effects of Cindy, and then Dennis, are likely to be felt in the next few Department of Energy reports'' on inventories, Peter Beutel, president of Cameron Hanover Inc., a New Canaan, Connecticut-based energy consultant, said in an e-mailed note. ``Crude oil production and imports will drop and refinery utilization and crude inputs will also decline.''

more...

[Roland99]

7. Guess that'll shoot the Dow over 10,500 today

[54anickel]

8. That appears to be this mornings target from the Futures page

June 2005 Change Price Last updated
DOW JONES† +28.00 10500.00 7/11 7:59

http://money.cnn.com/markets/morning_call/

[Roland99]

9. I just fear a crash well below 10k is coming...and not far off

I can't quite put my finger on it, just a gut feel. But, there feels, to me, to be some artificial supports that have market rather stable between 10,250 and 10,600 while oil and CPI have been rising. If oil starts settling back down and nears $50 (or even below), I feel that will give inappropriate justification for more of a bull market and it may hit upwards of 11,000 if that happens.

But, what's behind all of that? Corporate profits and executive pay are up but what's the average American looking at:

1) Wage increases at or below the rate of inflation
2) Homes mortgaged to 100% and beyond or even mortgaged with interest-only loans (they'll be screwed when prices drop and they have to cover the negative equity)
3) Those making, say, $50,000 and below are paying a higher % of their net monthly income on gas and utilities
4) Healthcare costs are going up as premiums are rising, co-pays are increasing along with deductibles and those are hitting people with lower incomes even harder.


The rich are getting richer and the middle-class are turning poor.

[UpInArms]

20. it's almost there

9:50 EST

Dow 10,496.48 +47.34 (+0.45%)
Nasdaq 2,122.82 +9.94 (+0.47%)
S&P 500 1,215.94 +4.08 (+0.34%)
10-Yr Bond 4.134 +0.25 (+0.61%)

NYSE Volume 170,106,000
Nasdaq Volume 206,342,000

[54anickel]

10. China's Trade Surplus Swells as Exports Reach Record

July 11 (Bloomberg) -- China had its third-highest monthly trade surplus on record in June as exports surged to an all-time high, suggesting trade disputes and calls for the nation to revalue its currency won't ease.

The trade surplus widened to $9.7 billion from $1.63 billion a year earlier and $8.99 billion in May, according to figures released by the customs bureau. Exports jumped 30.6 percent form a year earlier to $66 billion, while imports rose 15.1 percent to $56.3 billion, the Beijing-based bureau said on its Web site.

snip>

Foreign Investment

For the first half, exports rose 32.7 percent to $342.3 billion and imports increased 14 percent to $302.7 billion, the customs bureau said. June exports were expected to rise 25 percent, according to the median forecast of seven economists surveyed by Bloomberg News, and imports were expected to climb 11 percent.

Exports are booming as companies including Hon Hai Precision Industry Co. move production to China to take advantage of wages the Asian Development Bank estimates are less than a 20th of those in the U.S. Chinese companies including Anshan Iron & Steel Group are also tapping overseas markets as government investment curbs slow domestic demand.

Hon Hai, Taiwan's largest electronics components maker was China's biggest exporter last year, shipping $8.35 billion worth of goods and accounting for 1.4 pct of the country's export value according to the Ministry of Commerce. The company said July 1 it will invest $19.8 million in a factory near Beijing to make wireless communication products.

snip>

A decade ago, China's exports were mostly low-end products including toys, electrical goods and textiles. Now, the country is moving up the value chain.

Sounds familiar

more...

[UpInArms]

11. daily dollar watch

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

Last trade 89.89 Change -0.36 (-0.40%)

NFP - Satisfies Neither Bulls Nor Bears

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2087&Itemid=39

June’s Non Farm Payrolls reported at 145K vs. expectations of 200K while the unemployment rate declined to 5.0% from 5.1%. Last month’s weak results were revised upward to 104K from initial report of only 78K jobs. Overall the number was mixed with manufacturing losing 24K jobs, a fourth monthly decline in a row and average workweek hours declining to 33.7 from 33.8 the month prior. Average hourly earnings increased as expected to 0.2% barely keeping pace with inflation which is projected to increase by 0.3% for the same period. Given the high expectations that had some analysts predicting US job growth in excess of 200K, the number must be taken as a disappointment by the market. The NFP result shows a steady albeit far from robust US job picture and the market reflected the confusion of the results as the EUR/USD first tumbled below 1.1900 then raced higher above the figure. As we wrote earlier this morning, “With the dollar rally quite overextended, each new positive surprise will have to pack more punch in order to move price further in the same direction.” So far the NFP has failed to achieve that for greenback bulls.

Dollar Traders Cast Aside Rise In Non-Farm Payrolls

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2098&Itemid=39

US Dollar

Everything is coming up roses for the world’s largest economy, or is it? Today’s unemployment report showed 146,000 strong were newly employed in the month of June, contributing to a long string of six figure labor force additions for the report. Even last month’s paltry 78,000 was revised higher to 104,000. Wages even increased for a second month leading many economists to believe that consumer spending prospects remain strong for the second half of the year. However, underneath the brighter picture, manufacturing fell by 24,000 almost 5 times the consensus estimate with automaker layoffs constituting 17,900 of the overall change. Additionally, today’s report remains well shy of the average 181,000 since the beginning of the year and far below the 198,000 average experienced through the expansionary push ending in 2001. Surprisingly, the unemployment rate improved to 5 percent from 5.1 in the previous period. Although positive, low unemployment is characteristic of an expansionary economy, the figure may be skewed and not fully reflective of current labor market conditions. Employment rate calculations, do not consider individuals who have recently given up hope of finding employment opportunities. Ultimately, all things considered, the country looks to be well on its way in 2005. However, at the current pace, the debate on the necessity for further interest rate hike considerations may still occupy the minds of many a market player. Most notably on the day, Governor Bernanke stated that he is not involved in any Greenspan successor searches. This is surprising considering overall sentiment was in favor of the new chairman of the president’s Council of Economic Advisors to succeed the current Fed chairman.

Euro

Today’s economic releases bucked earlier more positive trends that we have been seeing recently in the euro zone, specifically Germany. Against rising factory orders and retail sales earlier in the week, industrial production in the region’s largest economy fell 0.2 percent in the month. Although slightly better than the expected 0.4 percent estimate, the figure is the third negative reading in four months, suggestive that things may not be as good as they seem. Given the fact that a depreciated euro has lent some strength to lowly exporters, it seems as though consumers, like their American counterparts, may have a penchant for goods and services abroad. Imports outpaced exports this month rising 5.9 percent and contributing to lower than expected trade balance and current account reports. As a result, many experts now question the sustainability of the recent suggestions of nascent expansion that have popped up. With consumer demand accounting for over 50 percent of the region’s overall productivity this may not be a good harbinger of times to come. Separately, European Central Bank council member Axel Weber commented on current inflationary risks in the region following the central bank’s June 2 meeting. Since then, higher crude oil prices and a depreciated euro have added to rising price level risk, cutting the probability of a near term rate cut. Although the risks are considered to be nascent, if at all, it raises potential future concerns over the longer term.

...more...

Have a Great Day Marketeers!

(no Reports 'til Wednesday)

[54anickel]

43. Heh-heh, look at the 1 year chart and we've almost come full circle

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=d12

[UpInArms]

12. Dollar falls; trade data awaited

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-07-11T124919Z_01_L11674720_RTRIDST_0_BUSINESS-MARKETS-FOREX-DC.XML

LONDON (Reuters) - The dollar fell from a recent 14-month high versus the euro and 19-month highs versus sterling on Monday after weak U.S. jobs data on Friday hurt the dollar's rally and investors waited for U.S. trade data later this week.

The euro gained some ground after Luxembourg approved the European Union constitution by a solid majority in a referendum over the weekend, while sterling benefited as the market saw a limited economic impact from last week's bombings in London.

U.S. employers added just 146,000 new jobs in June, fewer than expected, although the increase was seen enough to let the Federal Reserve extend its year-long credit tightening campaign.

"There is still a bit of a hangover from the jobs data," said Ian Stannard, currency strategist at BNP Paribas in London.

"And the market is switching its focus from growth to economic imbalances."

...more...

[UpInArms]

13. China June trade surplus swells five-fold

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-07-11T124311Z_01_PEK292938_RTRIDST_0_BUSINESS-ECONOMY-CHINA-TRADE-DC.XML

BEIJING (Reuters) - China's trade surplus for June swelled five-fold from a year earlier as exports grew much faster than imports, offering more ammunition for foreign critics who argue that Beijing should let the yuan rise in value.

The June surplus grew to $9.68 billion, exceeding forecasts of $8.0 billion and towering above the $1.8 billion surplus recorded for June 2004.

"The very large trade surplus will give the U.S. and Europe more excuse to put pressure on China to revalue the yuan," said Toshikatsu Kimura, greater China economist with Daiwa Securities in Shanghai.

"China needs to import more goods and services to avoid a trade war, but it will be very difficult to import more if it doesn't want to change its macroeconomic policy," he said.

<snip>

Chinese exports remained buoyant in June, rising 30.6 percent on the year, while imports growth grew just 15.1 percent, which was also far slower than the growth seen for much of last year, according to Customs data seen by Reuters and later confirmed by official media.

...more...

[54anickel]

15. If a foreign based company sets up shop in China, and sells the product

in China wouldn't that reduce China's import numbers? Aren't goods accounted for based on where they are produced - not where the corporation is based? How is floating the Yuan really going to help this situation again?

From the Bloomberg article in a previous post:

snip>
China, the world's largest steel producer and consumer, became a net exporter of the alloy for the first time this year, with overseas shipments rising more than three fold to 6.7 million tons in the first four months of the year. Asian steelmakers including South Korea's INI Steel Co. and Tokyo Steel Manufacturing Co. said they are cutting prices because of rising Chinese imports.

Import growth is slowing as increasing production in China has curbed demand from overseas. BASF AG, the world's biggest chemicals maker, said June 28 it has started production at a $2.9 billion plant in southern China capable of producing 1.7 million metric tons of chemicals and polymers a year.

Imports of some commodities including oil are also slowing as the government boosts efforts to conserve energy and rising prices curbs demand. China's imports of oil products fell 21 percent to 15.7 million tons in the first half, customs figures show.


http://www.bloomberg.com/apps/news?pid=10000080&sid=aenVQh3vHyHM&refer=asia

[geckosfeet]

14. This thread is of particular interest to me, and I suspect many others.

Thanks for being so diligent and making the effort to compile and post!

[UpInArms]

17. 8:39 EST numbers and pre-opening blather

Dow 10,478.75 +29.61 (+0.28%)
Nasdaq 2,118.54 +5.66 (+0.27%)
S&P 500 1,213.70 +1.84 (+0.15%)
10-Yr Bond 4.133 +0.24 (+0.58%)

NYSE Volume 81,071,000
Nasdaq Volume 109,431,000

9:15AM: S&P futures vs fair value: +1.3. Nasdaq futures vs fair value: +6.0.

9:00AM: S&P futures vs fair value: +1.3. Nasdaq futures vs fair value: +5.5. Still shaping up to be modestly higher open for the cash market as futures indications continue to trade above fair value... Meanwhile, blue chips have gotten a lift from Walt Disney (DIS), after two ex directors agreed to a truce, and Procter & Gamble Co. (PG), which has been upgraded at Prudential to Overweight from Neutral Weight... Stocks may also be taking a cue from market gains overseas, as the Nikkei closed up 0.9% and strength remains widespread throughout Europe

8:30AM: S&P futures vs fair value: +1.7. Nasdaq futures vs fair value: +5.5. Futures indications off earlier highs but still pointing to a slightly higher open for the indices... With no notable economic data hitting the wires until Wed. and earnings season finally underway, investors may be placing more emphasis on earnings/guidance - the likelihood Q2 results will check in better than the widely estimated 7% aggregate EPS growth for the S&P... 27 S&P companies are expected to report this week

8:00AM: S&P futures vs fair value: +2.7. Nasdaq futures vs fair value: +7.5. Futures market versus fair value suggesting a higher open for the cash market as falling oil prices and new M&A activity provide a floor of early buying support... Crude oil futures ($58.58/bbl -$1.05) have fallen amid reports that Hurricane Dennis has caused less damage and fewer supply disruptions than anticipated...

[UpInArms]

18. U.S. Treasuries slip at start of data-heavy week

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-11T133416Z_01_N11330978_RTRIDST_0_MARKETS-BONDS.XML

NEW YORK, July 11 (Reuters) - U.S. Treasury debt prices fell on Monday, extending Friday's slide, after jobs data suggested the Federal Reserve would not slow down or end its cycle of interest rate rises any time soon.

Traders also said technical factors were pushing the market lower as they began turning their attention toward the heavy release of economic data this week.

Yields on benchmark 10-year notes were pushed up through 4.12 percent -- the level last seen in February when Federal Reserve Chairman Alan Greenspan signaled concern about low long-term yields with his "conundrum" comment. Prices were 9/32 lower to yield 4.13 percent after ending the day on Friday at 4.09 percent.

"The market seems like it wants to move lower," said Marty Mitchell, head of government bond trading at Legg Mason in Baltimore. Mitchell said the market staged a technical reversal on Thursday when virtually all the gains related to the bomb attacks in London dissipated by the end of the day.

Mitchell, echoing others in the market, said this week's inflation data at both the consumer and producer levels would probably make the biggest splash in the market, given the influence inflation has on Fed interest rate policy.

...more...

[54anickel]

25. U.S. 2-Year Treasuries May Fall as Fed Fights Housing `Froth'

http://www.bloomberg.com/apps/news?pid=10000087&sid=aeoHpCpm2eAw&refer=top_world_news

snip>

Surging Prices

The median price of a home topped $200,000 for the first time in April, and is up 8.38 percent this year through May, compared with a gain of 9.14 percent for all of 2004 and 8.02 percent the year before. The figures are according to the National Association of Realtors, a Washington-based trade group.

By comparison, consumer prices rose at a 3.7 percent annual rate this year through May, compared with a 5 percent increase at the same time last year, according to the Commerce Department.

``It's gotten to the point where there's no paradigm to explain why a house costs what it does,'' said John Cerra, lead manager on a team that oversees $10.5 billion of fixed-income investments at TIAA-CREF Investment Management LLC in New York. The Fed's ``view is that they have to do something about it'' by continuing to raise short-term rates, he said.

snip>

`Uncomfortable' Fed

Housing accounted for about one in every four of the 146,000 jobs created in June, according to a July 8 government report. Housing contributed 0.64 percentage point to the economy's first quarter growth rate of 3.8 percent.

Central bankers including Fed Governor Donald Kohn have said the same low rates that helped create economic growth also contributed to risks such as home-price bubbles that higher rates may correct. Atlanta Fed President Jack Guynn said May 25 he was ``uncomfortable'' with residential speculation in some markets.

snip>

Fed policy markets probably believe that continuing to push rates higher and talking about the ``froth'' in housing is the only way to cool the real estate market, said James Pagano, a debt investor at Merrill Lynch & Co.' asset management arm.

more...

[UpInArms]

36. Treasury trims size of 5-year note, 10-year TIP auction

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38544.4708615162-838223099&siteID=mktw&scid=0&doctype=806&

CHICAGO (MarketWatch) -- The Treasury Department announced slightly smaller auctions of 5-year notes and 10-year inflation-protected notes Monday, as some bond market analysts had anticipated. The agency will sell $13 billion in 5-year notes Wednesday and $9 billion 10-year TIPs on Thursday. Both issues were cut by $1 billion from previous sales. "The cuts to the notes reflect more good news on the fiscal budget outlook, and are consistent with our view that the deficit could be in the low $300 billion area, a far cry from the administration's initial estimate over $400 billion," said analysts at Action Economics.

[54anickel]

19. Firms pile up earnings warnings

http://www.usatoday.com/money/companies/earnings/2005-07-10-warnings-usat_x.htm

Earnings season has barely started, and companies already are sending out warning signs.

So far, for every Standard & Poor's 500 company that has told investors to boost expectations for their second-quarter earnings, 2.5 have said their results will disappoint, says Thomson Financial. That's worse than the typical 2-to-1 ratio and the highest since the first quarter of 2003, says Thomson Financial's John Butters.

It's coming from a range of industries. Craft seller A.C. Moore (ACMR), restaurant Applebee's (APPB), business software makers Altiris (ATRS) and Vitria (VITR), and motorcycle maker Harley-Davidson (HDI) all told investors to lower their expectations for quarterly earnings.

This isn't exactly an opportune time for a warnings pileup. Earnings growth already was expected to fall to just 7.8% in the second quarter, S&P says, after averaging 20% growth the previous 13 quarters and 13.4% growth in the first quarter. The second quarter would be the first quarter in three years with single-digit growth.

Yet investors don't seem worried, as was clear Friday when the Dow Jones industrials capped the week with a 147-point gain to 10,449. They are calm because:

:eyes: The list doesn't seem to include the notion that gov't stats have become a joke!

more...

[ozymandius]

23. Good morning 54anickel and everyone.

:donut:

And wasn't it the Commerce Department, complicit in the foul meowing of John Snowjob that said next quarter's earnings and overall growth will beat last quarter's numbers?

Just like madeup, cherry-picked WMD evidence, they're picking and fabricating their economic data too.

[54anickel]

24. Good morning Ozy! Yes, it seems their goal is to put on the "This is

good news" spin to every stat they can get away with it on. And where that won't fly, they confuse and frustrate the issue by calling it a "conundrum" or blaming China. Gotta give them credit though - it's working....so far. :scared:

[UpInArms]

26. morning Ozy (and all)!

This spin (next month, next quarter, just around the corner, any day now, on the cusp) has been going on since this mal-administration took over all the branches, offices and reports.

When will the sheeple wake up to the lies? Looks like far too many are still drinking the kool-aid.

[Roland99]

32. Warnings don't mean squat anymore.

Any good news in any industry or some jobs report that shows some gains is all the market needs.

If an independent auditing team and ethics investigation was performed on all of the major brokers, I'd be willing to bet my last dollar that all kinds of abuses and unethical practices are being waged. And, I'd also be willing to wager there is collusion with the gov't to keep the markets artificially bolstered.

O'Neill was fired not just for speaking the truth rather easily. He wanted to give the SEC some *teeth* and that didn't sit well with the Propagandist and his business buddies.

[54anickel]

27. PCAOB Probing Deloitte Audit

First formal investigation of a Big Four firm by the accounting regulator is inadvertently disclosed by the SEC.

http://www.cfo.com/article.cfm/4168789/c_4169119?f=homex_todayinfinance

The Public Company Accounting Oversight Board is investigating Deloitte & Touche LLP's 2003 audit of Navistar International Corp., according to Bloomberg, citing a document it says authorizes the probe.

This is the PCAOB's first formal probe of a Big Four firm, the wire service pointed out. Bloomberg also noted that the two-page order, issued in May, was inadvertently disclosed by the Securities and Exchange Commission.

The accounting regulator stated in its order that Deloitte may have failed to comply with at least five auditing standards. The PCAOB added that the firm's actions, if true, would be "in possible violation of , the rules of the board, the provisions of the securities laws relating to the preparation of and issuance of audit reports and the obligations and liabilities of accountants," according to the report.

Bloomberg stressed that the document does not detail Deloitte's alleged transgressions. The wire service noted, however, that in January Navistar disclosed in a regulatory filing that it would need to restate its results for fiscal 2002 and 2003 and the first three quarters of 2004. The restatement stemmed from errors in its financial statements relating to the securitization of assets at its finance subsidiary, Navistar Financial Corp.

snip>

As for the SEC's inadvertent disclosure of the order: Deloitte spokeswoman Deborah Harrington told the wire service that "if there were a PCAOB investigation, it would be confidential.'' PCAOB spokesman Michael Shokouhi told Bloomberg he couldn't confirm or deny whether an investigation were under way.

more...

[UpInArms]

29. Fed's Lacker-too early to foresee Fed pause

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-11T141345Z_01_WAT003503_RTRIDST_0_ECONOMY-FED-LACKER-URGENT.XML

RICHMOND, July 11 (Reuters) - Richmond Federal Reserve President Jeffrey Lacker said on Monday it was too soon to say when the U.S. central bank would halt a year-long campaign of interest-rate rises and indicated more increases were likely.

"I think it is still too early to be foreseeing a pause," Lacker told reporters after speaking to a community development event at the Richmond Fed. "It's going to be data-driven and depend on how things unfold."

Lacker said that he believed the U.S. economy was on a solid growth path and that inflation expectations were well-contained. He declined to put a timeframe on when that view might change but signaled more rises were probable.

...more...

More verbal intervention?

[54anickel]

31. Jaw-bonin' it's about all they've got left aside from Ben's printing

press which is useless against the Fed-called "froth" in the housing markets.

[54anickel]

30. G-8 Meet To `Manage' Hedge-Fund Crisis

Some interesting points to ponder from the LaRouche perspective.

http://www.larouchepub.com/other/2005/3227g8_hedge_funds.html

The meeting of the Group of Eight industrialized nations, to be held in Scotland July 6 to 8, is reported as dealing with issues like debt forgiveness for the world's poorest nations, and global warming. But just a week before the scheduled meeting, the Bank for International Settlements (BIS) released its annual report, indicating that a very different set of topics is likely to be on the agenda: how to manage the barrage of risks that could devastate the global financial system. The BIS report summarized the discussions ongoing among governments and international banking circles about whether the world needs a new "international macro-financial stabilization framework," and said that three approaches to this question are being discussed:

1. The establishment of a single international currency;

2. Reverting to "a system more like that of Bretton Woods"; and

3. "Informal cooperative solutions," that is, crisis management.

A highly placed U.S. intelligence source has informed EIR that the discussions on returning to a Bretton Woods system, indeed reflect debate about Lyndon LaRouche's proposals, but, as the BIS report indicated, the bankers will be pushing hard to get a crisis-management arrangement, with structures defined by the bankers, who are desperately trying to preserve their control under conditions of impending meltdown.

Among the largest risk factors, according to the BIS report, is "the widening current account deficit of the United States," which "could eventually lead to a disorderly decline of the dollar, associated turmoil in other financial markets, and even recession. Equally of concern, and perhaps closer at hand, it could lead to a resurgence of protectionist pressure."

Another area of grave concern is the credit derivatives market. The "explosive growth" of CDS and other credit derivatives contracts belongs to "the most significant developments in finance in recent years." "The notional amount outstanding on CDS contracts globally reached $4.5 trillion at end-June 2004, up sixfold from end-June 2001

snip>

And then, there are the hedge funds, whose corpses are beginning to float to the surface. The hedge funds and derivatives trade divisions of the major banks are currently in a near panic, desperately trying to limit the shock waves of derviatives and hedge-fund losses that were apparently triggered by the collapse of General Motors. They are trying to avoid even the hint of danger for the system, but it's not working.

It's not unusual for one out of ten hedge funds to collapse in the course of a year, without fanfare. Almost always these are small or medium-sized funds. But now, suddenly, and for the first time since the LTCM drama in Fall 1998, the large hedge funds are coming onto the radar screen. Three of them have recently acknowledged their dissolution:

more...

[54anickel]

33. Bride of Frankenmarket

http://www.321gold.com/editorials/tanashian/tanashian071005.html

snip>

I don't see why there cannot be a recycled strong dollar policy, and an illusion that the US is again the safe haven for the world's money. "Invest in our asset markets just because" could be the pitch. "Deflation is GOOD for the market because the US dollar, the world's reserve currency, is gaining in price (I would never use the words value and US dollar in the same sentence) and you want to be denominated in dollars" might go another testament to pure idiocy. The shelf-life of such foolishness would be incredibly short, which is why I tend to lean to the other end of the spectrum, inflation.

I have been keeping an eye on the ongoing inflation/deflation debate which seems to have made a lightning rod of Jim Puplava at Financial Sense. There is much "sense" to be made from Mr. Puplava's views along with other "inflationists", as there are from various "deflationists". But all I know for sure is that the Bride of Frankenmarket needs an angle, and with real estate starting to concern even the most greedy and denial-ridden, we need some asset (or debt) class to come forward to be monetized. I simply do not believe this country, nor the interrelated global system is ready for what the bears have in mind. Nor will we ever be ready, given that an unwinding would be total and ultimately destructive given the debt and derivative levels that have contributed to ponzi-ing up the economy to this point.

The bears and deflationists apply ultimate logic and right-headed thinking. Where they make their mistake is in unquestioningly following their well thought out analysis. Since when has anything macroeconomic been based in the "right-headed" and gone by the book? Watching the Bride of Frankenmarket smash them in the chops on Friday only served to remind us that today's markets do not need sound fundamentals or an economy based on real productivity to rise. They merely need a bit of spin. Witness the London terror tragedy, which was not enough to hurt our markets (was there really any doubt in your gut that this would ignite a rally?). If that's not enough, how about those job statistics? Manufacturing down, no problem. Hospitality jobs made a nice gain! Oil ticked down below 60. Alcoa found a way to goose the numbers through a Russian labor arbitrage, and of course, Jim Cramer has got his Rally Cap on. If you can't laugh at this stuff, you might find yourself crying.

The bears are right, but they weren't right yesterday, and they may not be right for a long time. How can you be right and not right? Our furry friends, the perma-bears may have found a way. They will of course be right in the end. We WILL have deflation. We must. I believe that deflation is the only secular natural trend. It is called progress and productivity. There is no natural inflation, only man made efforts to raid a pure wellspring of progress by finding ways to increase liquidity for growth at all costs. That spring is of course polluted now, hence the idea that man-made inflation is a good thing, when it is couched in such a way that casts it as a savior. Bride of Frankenmarket knows this and has lived off of this dynamic for years now. Why should today be any different? The bears are right and they have been right for a long time. Has that stopped the powers of public denial and inflationary policies in the past? No, it has not.

So, the game is this; we have a market searching for juice. We have a Fed doing what they should do in raising rates, we have gold smacked down (a subject for a later date), we have a society wildly unprepared for what the deflationists envision, oil ready to jump to the 70's or tank to 45 (by our charts), a stronger dollar, and a sleepy bond market. Throw in a real estate bubble and Mr. Greenspan's "conundrum" and it's just a ball of confusion. The kind of confusion that only decades of INFLATION can create. I don't blame only Greenspan for this. I blame us all, collectively. Had he delivered the real medicine years ago, we'd have formed an angry mob of our own and demanded the demise of Frankenchief. Somewhere, something changed from REAL growth and REAL productivity, to faux growth and faux productivity. Hence the Frankenstein metaphors.

more...

[54anickel]

34. Trust Fund & Step-Father (Jim Wille)

http://www.321gold.com/editorials/willie/willie071105.html

These truly strange times motivate an allegory. The parties should be clear before the end.

Imagine a smart struggling kid coming of age, frustrated by years under the thumb. He has a trust fund, supplied regularly by a new caretaker. The kid is energetic, hustles small deals, works hard, makes friends effectively, is a fast learner, learns from history, employs stubbornness to his advantage, and exhibits more patience than seems humanly possible. He is rough with those who cross his path and interfere. He remembers all too well his forefathers being oppressed in centuries past. Some call him unscrupulous. He has a strong new sense of what capitalism is in raw form. He has noticed how to exploit situations and catch the lazy and corrupt at their own game. The kid at times is like an impudent young pickpocket, akin to the Artful Dodger in Oliver Twist, the classic by Charles Dickens. Months ago, he stole the last of Sam's heirlooms left carelessly on the mantle. The youngster has made a most unlikely friend in "Sam." His new step-father has fostered his growth, even as the more experienced elder has given too many long-held secrets away in return for his chores being done on the cheap by the young firebrand. The elder hears the name of the youngster, but being a man of little culture, mistakenly calls the kid "Joe" over time. Older Sam still reminisces about the old glory days, and believes in things which no longer apply in a day and age which no longer exists. The younger sees this misplaced nostalgia, but plays along like a shark does toward an aging, and once sleek bluefin tuna. All in time.

snip>

BACK TO REALITY

The Hat Trick Letter details a vast new alliance which has been in progress for two years among China, Russia, and Iran. The United States has been slowly isolated on the Asian frontier. The new triangular alliance includes Chinese oil purchases from Russia, Chinese gas purchases from Iran, and Chinese energy project investment in both Russia and Iran. Toss in an oil pipeline across Siberia to a Russian port on the Pacific Ocean, funded almost fully by Japan. The alliance also includes Russian nuclear weapon technology for Iran, Russian conventional armaments for China, Chinese missiles to Iran.

Iran lies at the focal point for Persian Gulf expansion of thinly disguised democratic reform which would provide cover for any attempt to tighten control of this critical energy producing region. Russia and China offer clear deep military support for Iran. THAT IN MY OPINION IS PRECISELY WHY THE USA HAS BACKED OFF IRAN. Last March, Iran was the new threat, suddenly dropped from the evening news. We live in dangerous times. The Unocal deal is on the table. The conflict is growing between the USA and China. Chevron and the Chinese National Offshore Oil Company (CNOOC) are in competition. Finally, national security concerns have been raised by the US Congress, to complement a threat of trade tariff against Chinese imports. A Chinese corporation, subsidized by a communist government, is competing to acquire a private sector oil company. Unocal is the ninth largest oil refiner belonging to the USA. It owns rights to several prime offshore oilfields in southeast Asia. Things are heating up. There is no going back. For five years, the United States has been fostering growth in our new global competitor. China is coming of age. The lower labor costs are something the USA cannot compete against, and never will be able to. Two hundred million Chinese will enter their manufacturing workforce in the next decade, something the USA cannot defend against.

China wants a seat at the geopolitical stage, where the USA has long dominated. China should be granted a seat at the G-10 Meetings of finance ministers. Anything less is an insult and injustice. Sooner or later, the colossal mountain of debt will be used as hostage against the USA. The current Bretton Woods II quasi-agreement is an utter farce, a disaster in the making. Market interference has been the order of the day for too long, which has invited political friction into the fray. Currency changes to the Chinese yuan will unleash disorder. The old world order is not going to cut it any longer. Asia is banding together, not without some friction and harsh old memories. That is their wall of worry to climb. My main objection is that the Chinese should not be permitted to own names with four letters or less. With 1.5 billion people, they should be granted much longer names, and more liberal use of hyphens. There are more Chinese with names as variants to Chen than there are US citizens. This cannot stand. Names like Wu, Li, Fu need at least eight more letters after them if confusion is to be averted. Let this be on the agenda for the next G-10 Meeting. Time is ticking until the Summer Olympics in 2008, to be held in Beijing. That event is their showcase, an event as important as "Y2K" was at the turn of the millennium for the Western world.

more...

[UpInArms]

35. 11:21 EST numbers and blather (no fear of flying)

Dow 10,532.91 +83.77 (+0.80%)
Nasdaq 2,134.56 +21.68 (+1.03%)
S&P 500 1,219.99 +8.13 (+0.67%)
10-Yr Bond 4.135 +0.26 (+0.63%)

NYSE Volume 631,481,000
Nasdaq Volume 698,475,000

11:00AM: Major indices extend their reach into positive territory, getting a recent lift from a turnaround in the Energy sector... Even though the Energy sector only accounts for about 9% of the total weighting on the S&P and oil prices still trade near session lows, investors continue to find comfort in the fact that the sector may again lead all other S&P economic sectors with Q2 earnings growth of about 33% (up from 27% last week)...

Notable energy names recently turning positive include bellwethers like XOM and CVX, oil & gas equipment stocks (i.e. HAL, SLB and BHI) and exploration companies like DVN, BR, APA, EOG and UCL...XOI +0.4, NYSE Adv/Dec 2031/913, Nasdaq Adv/Dec 1899/857

10:30AM: Market holding onto modest gains early on as investors embrace a slew of M&A activity... Despite paling in comparison to Bank of America's (BAC 45.20 +0.05) $35 bln bid for MBNA (KRB 25.80 +0.01) announced on June 30 and Proctor & Gamble's (PG 53.98 +1.02) planned $57 bln takeover of Gillette (G 51.72 +1.03), which is expected to get shareholder approval tomorrow, a $7 bln offer from VNU for IMS Health (RX 26.46 +0.57) has also provided a floor of early buying support...

Other M&A news validating confidence of future growth include Pogo Producing's (PPP 54.34 -0.44) $1.8 bln bid for Unocal's (UCL 65.89 +0.15) Northrock Resources and a potential $2.5 bln bid for Agilent Technologies' (A 25.85 +1.51) chip unit from KKR and Silver Lake Partners...NYSE Adv/Dec 1904/955, Nasdaq Adv/Dec 1699/971

10:00AM: Equities still on the offensive as the bulk of sector leadership remains positive... Materials has paced the way higher, as dollar weakness has made dollar-denominated commodities like chemicals and steel more attractive...

and a peek at the buck

Last trade 89.66 Change -0.59 (-0.65%)

Settle 90.25 Settle Time 23:36

Open 89.97 Previous Close 90.25

High 90.24 Low 89.62

Last tick: 2005-07-11 10:49:20 ET
30-min delayed quote.

[54anickel]

38. Decoupling the gold price

http://www.kitco.com/weekly/paulvaneeden/jul082005.html

After the bomb attacks in London the gold price rallied from $423.76 (where it closed the previous day) to $428.90. But by the end of day the gold price closed at $422.58, giving up the entire gain, and lower than the day before.

Albeit brief, it was a bull market in gold. Like all bull markets it was caused by capital flows that pushed the gold price beyond its natural trading range and like all bull markets the price retracted back to its natural trading range again. Gold’s 1.2% deviation from its trading range was small enough to correct in less than a day.

In contrast, the bull market that coincided with uncertainty regarding the European Union and the euro caused the gold price to rise more than 5% above its trading range and those gains have not completely been eliminated yet. Gold was around $420 at the end of May and rose to $440 before the end of June. However, during the same time the US dollar rose almost 4%, on average, against the G10 currencies not included in the euro. Without any distortions to the gold price from capital flows reacting to European developments, the gold price should have fallen from $420 to $403. It now stands at $423.

Clearly the gold price is in the process of giving up the gains it made in response to the euro mini-crisis and barring anything else that elicits an emotional reaction from investors, it will either continue to fall towards $403, or the dollar will fall.

snip>

So why is the gold price higher now than it was a hundred years ago? Because we measure the gold price in terms of fiat currencies, like US dollars, and fiat currencies lose value much faster than gold.

snip>

We are currently in a mini bear market in gold as the price corrects after it was pushed up in response to capital flows reacting to uncertainty in Europe. The downward trend in gold will most likely continue until the dollar starts falling again, or until we see another emotional reaction from investors. But the gold price will not sustain higher levels (in US dollars) without a decline in the US dollar exchange rate.

more...

[54anickel]

39. KKR, Blackstone Fuel Record Buyout Fees for Investment Bankers

http://www.bloomberg.com/apps/news?pid=10000103&sid=aeWAdL80OSBM&refer=us

July 11 (Bloomberg) -- Kohlberg Kravis Roberts & Co. and Blackstone Group LP, the world's two biggest buyout firms, are making 2005 an unprecedented year for leveraged buyouts, generating more than $4 billion of fees for investment bankers.

LBO specialists, which borrow about two-thirds of the purchase price to finance acquisitions, disclosed $148 billion of takeovers during the past six months, putting the industry almost 65 percent ahead of 2004's record pace, data compiled by Bloomberg show. The combination of stagnant stock markets and relatively low interest rates are enabling New York-based KKR, Blackstone and at least a dozen other firms to arrange another $100 billion, including LBOs for Grupo Auna, owner of Spain's No. 3 mobile phone company, and the Dutch bank NIB Capital NV.

``You're in the era of the mega-buyout,'' said Maurice Tchenio, 62, co-founder of London-based Apax Partners Worldwide LLP, which has raised a new $5.2 billion takeover fund.

KKR and Blackstone -- now completing the $10.6 billion purchase of SunGard Data Systems Inc., whose software handles most Nasdaq Stock Market trades -- helped the industry to increase its share of the $1.3 trillion global mergers market by 15 percent this year to 11 percent, Bloomberg data show. SunGard will be the biggest LBO since 1989 when KKR acquired RJR Nabisco Inc. for $31 billion.

LBOs are booming because stock markets are down more than 20 percent from the 2000 peak while borrowing costs are almost half what they were a decade ago. Fees from LBO firms are so important to bankers, who get paid for arranging the deals and providing the credit needed to finance them, that JPMorgan Chase & Co., the third-biggest U.S. bank, decided in March to spin off its own takeover unit to avoid losing LBO firms as clients.

more...

[54anickel]

40. 12:17 lunchtime check-in

Dow 10,515.60 +66.46 (+0.64%)
Nasdaq 2,130.88 +18.00 (+0.85%)
S&P 500 1,218.38 +6.52 (+0.54%)
10-Yr Bond 41.40 +0.31 (+0.75%)
NYSE Volume 846,332,000
Nasdaq Volume 916,386,000


12:00PM : Market holding steady at sharply higher levels midday, as falling oil prices, fresh M&A news and growing optimism about upcoming earnings reports lift virtually every sector... Ongoing weakness in crude oil futures ($58.35/bbl -$1.28), amid reports that Hurricane Dennis caused less damage and fewer supply disruptions than initially anticipated, has helped calm investors' nerves about high energy prices weighing on corporate profit margins, as Q2 earnings season gets underway...

Current estimates have Q2 aggregate EPS growth for the S&P checking in around 7%, but final EPS growth rates every quarter come in about 2-5% above the forecast at the start of the earnings reports, which could leave Q2 EPS growth around 9-12% when it's all said and done, much closer to the 13% growth realized in Q1... Several new M&A deals, such as VNU's $7 bln bid for IMS Health (RX 26.46 +0.57) and Pogo Producing's (PPP 54.34 -0.44) $1.8 bln bid for Unocal's (UCL 65.89 +0.15) Northrock Resources, have also helped improve sentiment across the board...

Meanwhile, The Materials sector, benefiting in part from dollar weakness, continues to lead the charge to the upside, after Deutsche Bank reiterated their Buy rating on DuPont (DD 44..26 +0.76) and a CSFB upgraded the Metals/Mining industry on valuation... Technology, however, has been a more influential leader to the upside, benfiting in part from positive comments from Bear Stearns about DRAM pricing (i.e. MU)... Health Care has traded higher, getting a boost from an analyst upgrade on Schering-Plough (SGP 19.31 +0.34) and upside Q1earnings guidance from Mylan Labs (MYL 19.94 +0.53)...

Even though benchmark yields have hit their highest levels since mid June, interest-rate sensitive areas like Financial and Utilities have shown relative strength, with the former taking advantage of strength in brokerage, banks and a relief rally in insurance following the downgrade of Hurricane Dennis to a tropical depression... The Treasury market has been weak across the board, as investors rotate out of fixed income products and into stocks... The 10-year note is off 10 ticks to yield 4.13%... A recent turnaround in Energy, which opened lower amid falling oil prices, has also provided some early support, as analysts' expectations of Q2 EPS growth for the sector have been raised to about 33% (from 27% last week)... DJTA +1.1, DJUA +0.8, DOT +1.3, Nasdaq 100 +0.7, Russell 2000 +1.4, SOX +1.5, S&P Midcap 400 +0.7, XOI +0.2, NYSE Adv/Dec 2241/855, Nasdaq Adv/Dec 2083/804

11:30AM : Market continues to climb at the expense of ongoing deterioration in oil prices... Crude oil futures recently falling to fresh session lows around $58.10/bbl (-$1.53) has helped pave the way for strong follow-through buying interest in equities... Despite hitting record levels last week, declines in the commodity on Thursday and Friday, coupled with encouraging employment data, helped the Dow, S&P and Nasdaq record strong gains of 1.4%, 1.5% and 2.7%, respectively, heading into the weekend... NYSE Adv/Dec 2215/828, Nasdaq Adv/Dec 2031/818

[54anickel]

41. Sprint To Acquire US Unwired For $1.3 Billion

http://informationweek.com/story/showArticle.jhtml?articleID=165701260

Sprint announced Monday that it plans to acquire its mobile phone affiliate, US Unwired, for $1.3 billion.
In addition to expanding Sprint's direct mobile service by some 500,000 subscribers, the acquisition will halt US Unwired's attempt to block Sprint's merger with Nextel Communications.

The deal covers a sweeping subscriber area covering nine states and some 8 million people. The US Unwired units involved in the acquisition are Gulf Coast Wireless, Georgia PCS, and Louisiana and Texas Unwired. US Unwired's coverage includes portions of Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee, and Texas.

"We began our Sprint relationship with a handful of customers and a service territory of 1.8 million residents," said US Unwired president and CEO Robert Piper in a statement. "Our market now covers 8.1 million people and serves more than a half-million subscribers." US Unwired employs some 600 persons and had $408 million in revenues in 2004.

In announcing the acquisition Monday, the firms noted that they will immediately seek to stay litigation filed in U.S. District Court in Louisiana by US Unwired that sought to block the Sprint-Nextel merger.

more...

[54anickel]

42. UPDATE 4-Unocal to sell Canada assets to Pogo for $1.8 bln

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-11T151844Z_01_N11189057_RTRIDST_0_ENERGY-UNOCAL-POGO-UPDATE-4.XML

NEW YORK, July 11 (Reuters) - Unocal Corp. (UCL.N: Quote, Profile, Research) on Monday said it agreed to sell virtually its entire Canadian oil and gas exploration and production portfolio to Pogo Producing Co. (PPP.N: Quote, Profile, Research) for $1.8 billion in cash.

The move is unrelated to Unocal's pending $16 billion-plus acquisition by Chevron Corp. (CVX.N: Quote, Profile, Research) and comes after it had announced in early May that it would sell Northrock Resources.

Unocal said it would realize after-tax proceeds of $1.5 billion from the sale of Northrock Resources, a plan that was pending before the Chevron deal.

Though Pogo emphasized how the deal would boost reserves and add to earnings starting next year, at least one analyst suggested that the price paid for them may have been too high.

"We do not believe that these assets have the demonstrated reinvestment opportunities to justify the premium paid," Lehman analyst Thomas Driscoll said in a research note. "The plus for Pogo is that the acquisition provides some clarity related to Pogo's strategic direction."

more...

[54anickel]

44. Mitsubishi Heavy says may bid for Westinghouse

http://today.reuters.co.uk/news/newsArticle.aspx?type=businessNews&storyID=2005-07-11T043743Z_01_YUE100908_RTRUKOC_0_MANUFACTURING-JAPAN-MITSUBISHI.xml

TOKYO (Reuters) - Japan's Mitsubishi Heavy Industries Ltd. (7011.T: Quote, Profile, Research) said on Monday it planned to offer to buy U.S. nuclear power plant builder Westinghouse Electric Co. from BNFL in a deal estimated at $1.78 billion.

A deal would mark the first major acquisition by Japan's biggest heavy industrial equipment maker, which has long relied on domestic public works projects and has been looking for new income sources as such spending has slowed sharply.

The move could boost Mitsubishi's position in overseas nuclear power plant markets, particularly those of the United States and energy-hungry China, which are embarking on new rounds of nuclear plant construction.

"It's an appropriate decision," said Shigeki Okazaki, analyst at Nomura Securities Co. "An acquisition will help Mitsubishi secure its market in the United States, though whether it could effectively manage such a large U.S. company is one of the risk factors involved."

U.S. President George W. Bush has proposed jump-starting the construction of new nuclear power plants to help make the United States less dependent on foreign energy sources.

more...

[54anickel]

45. UPDATE 2-GE, Canadian firm to buy U.S. gas pipeline system

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-11T155540Z_01_N11469453_RTRIDST_0_MANUFACTURING-GE-PIPELINE-UPDATE-2.XML

NEW YORK, July 11 (Reuters) - General Electric Co. (GE.N: Quote, Profile, Research) and Canada's biggest institutional investor agreed to buy the Southern Star natural gas pipeline system from AIG Highstar Capital for $362 million, plus the assumption of $476 million in debt and preferred stock, GE and its partner said on Monday.

The purchase by GE and Canada's Caisse de depot et placement du Quebec is part of General Electric's efforts to increase its $10 billion energy assets portfolio at its commercial finance arm.

The acquired assets include compressor stations and gas storage fields serving local gas distribution companies in Missouri and Kansas, the two companies said. The deal is expected close in the third quarter.

The natural gas pipeline spans 6,000 miles in seven Midwestern and Southern U.S. states.

GE said the deal, its second joint investment with the Canadian partner, nearly doubles its pipeline assets. It will hold a 60 percent stake in Southern Star, and its partner will own 40 percent.

more...

[ozymandius]

46. 12:53 numbers and blather

Woe be unto the bond traders.

Dow 10,502.02 +52.88 (+0.51%)
Nasdaq 2,128.44 +15.56 (+0.74%)
S&P 500 1,216.77 +4.91 (+0.41%)
10-Yr Bond 4.135 +0.26 (+0.63%)
NYSE Volume 948,720,000
Nasdaq Volume 1,012,069,000

12:30PM: Stocks are off their highs but a bullish bias remains intact... Advancers on both the NYSE and Nasdaq hold a more than 2 to 1 edge over decliners while a more than 3-to-1 ratio of up to down volumes suggests an even more positive tone to trading... Meanwhile, the Dow, S&P and Nasdaq continue to trade well above initial support levels of 10433, 1209 and 2102, respectively, amid stronger than usual volume... NYSE Adv/Dec 2242/882, Nasdaq Adv/Dec 2038/872

[ozymandius]

47. Stocks Extend Advance As Oil Prices Dip

NEW YORK - Stocks extended their advance Monday as oil prices dropped, falling more than $1 a barrel after Hurricane Dennis missed key Gulf of Mexico refineries and oil companies averted a disruption in fuel supplies.

Wall Street has been nervously watching oil prices, worried that further increases would curb consumer spending and chip away at corporate profits.

Crude prices climbed last week on fears of a repeat of last year's Hurricane Ivan, which damaged oil platforms and caused months of lost production in the Gulf. But on Monday, light, sweet crude contracts fell $1.28 to $58.35 a barrel on New York Mercantile Exchange.

Investors are also buying for fundamental reasons, said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee. "People are underinvested and interest rates are relatively low," he said.

more...

[54anickel]

49. PHFFT! In other words, people have no place else to go...

People are underinvested and interest rates are relatively low :eyes:

[54anickel]

59. Stocks Rise on News of Corporate Deals

http://www.casperstartribune.net/articles/2005/07/11/ap/business/d8b9aso80.txt

NEW YORK - Stocks extended their advance Monday on news of dropping oil prices and a bevy of corporate mergers.

snip>

News of corporate deals in telecom, banking and pharmaceuticals boosted stocks, too, stoking investors' hopes that second-quarter earnings might be stronger than expected. Investors welcomed the deals as a sign that companies feel secure enough to spend some of the piles of cash they accumulated during the earnings run-up of the past two years. Standard & Poor's 500 companies, for instance, have the largest cash reserve in the S&P's history.

In early afternoon trading, the Dow Jones industrial average rose 45.88, or 0.4 percent, to 10,495.02. The Dow rose 146.85, or 1.43 percent, on Friday.

Broader stock indicators also rose. The S&P 500 index rose 4.13, or 0.3 percent, to 1,215.99, and the Nasdaq composite index rose 14.66, or 0.7 percent, to 2,127.54.

Monday's deals included a report that Goldman Sachs Group Inc. and German financial firm Allianz are in talks to buy a $1 billion-plus stake in one of China's largest state-owned commercial banks. Drug distributor McKesson Corp. said it would buy a smaller regional distributor and Dutch media company VNU NV said it would buy U.S.-based health care data provider IMS Health Inc. in a $7 billion cash and stock deal.

While the merger activity lifted the market's mood, investors are also buying for fundamental reasons, said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee. "People are underinvested and interest rates are relatively low," he said. :eyes:

more...

[54anickel]

48. Payrolls’ Reality Check

http://www.forexnews.com/AI/default.asp

US non-farm payrolls rose by 146,000 in June from a revised 104,000 reading in May, while the unemployment rate fell to 5.0% and average hourly earnings grew by another 0.2%. The upward revisions for the April and May payrolls totaled 34,000, while the June unemployment rate was the lowest since September 2001.

The report paints a bright story on the US jobs market showing the 3-month average remaining in its upward trend over the past year. Net creation of confirm employment has not shown a negative figure since May 2003, while continuing above the 100K figure since July 2004.


On the bright side, the headline unemployment rate fell to nearly a 4-year low of 5.0% as the number of unemployed continued to drop, reaching 7.49 mln, from 9.20 two years ago.

Services deliver jobs gains

The bulk of the job gains in services emerged from professional and business services industries as well as heath care jobs. Professional and business services made up more than a third of the rise in total services jobs, with archictectural/engineering jobs and employment services leading the pack. Heath care was the second biggest producing services industry. Also helping services was a 19K rise in leisure and hospitality jobs, which recovered after faring flat in May. Despite the volatility of this particular industry, we could see continued strength into the summer season. More interestingly is the volatility of the overall services industry as seen through the 3-month average, which rose to 167K. And since services are an integral part of the overall payrolls report, once should expect this inherent volatility to remain part of the overall establishment survey.

Manufacturing erosion worst since January


snip>

Yet the week’s most important data figure for FX will be the May trade report, which could well surpass the $60 billon figure to a new record courtesy of rising oil prices. The report will be especially important given that the last TICS reports showed net-US bound foreign capital flows to have failed in covering for the monthly trade deficit. Thus, a lackluster retail sales and industrial production figures could be lead to a stricter punishment of the dollar given that it is a trade-data week.

[54anickel]

52. Check out Papau's latest look at the birth/death figures over in the

Econ forum if you haven't yet. It just gets deeper and deeper.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x16780

[ozymandius]

50. Whoa. Slipping a bit there.

1:13
Dow 10,491.34 +42.20 (+0.40%)
Nasdaq 2,127.22 +14.34 (+0.68%)
S&P 500 1,215.81 +3.95 (+0.33%)
10-Yr Bond 4.122% +0.01
NYSE Volume 1,014,248,000
Nasdaq Volume 1,070,884,000

1:00PM: Little changed since the last update as the major averages continue to vacillate in roughly the same ranges... The Telecom Services sector, however, has recently turned negative... Sprint (FON 25.29 -0.09), which is already in talks to acquire Nextel (NXTL 32.71 -0.22) for $36 bln, has agreed to buy U.S. Unwired (UNWR 6.17 +0.01) for $1.3 bln... While today's deal allows Sprint to terminate a lawsuit filed by UNWR to block FON's merger with NXTL, investors appear to be less than enthused about the proposed acquisition... NYSE Adv/Dec 2237/931, Nasdaq Adv/Dec 2018/911

[54anickel]

51. WTF is up with bonds again?...n/t

[ozymandius]

54. Perhaps today's 2-year auction is hammering the 10-year too.

:shrug:

[54anickel]

53. Sceptical US reports some progress in China talks

http://news.ft.com/cms/s/27e8b00e-f22c-11d9-8e69-00000e2511c8.html

The US has made what it described as “measured progress” in annual talks with China over contentious trade and market access issue but said it would take many months to establish whether Chinese commitments had been met.

Ministerial talks in Beijing on Monday took place against a background of rising alarm and anger in Washington at China's large and growing bilateral trade surplus, which last year was the highest ever recorded by the US with another country.

The US side, led by Carlos Gutierrez, commerce secretary; Rob Portman, US trade representative; and Mike Johanns, agriculture secretary, met Wen Jiabao, prime minister, and Wu Yi, vice-premier.

In a statement after the meeting the US said China had given commitments to tighten the policing and enforcement of intellectual property laws, by increasing criminal prosecutions at home and limiting exports of pirated products abroad.

The end use of pirated software would also be punished and “subject to criminal penalties in appropriate circumstances,” the US statement said.

more...

[Roland99]

55. 2:23pm numbers

Market Summary
DJIA 10,495.90 46.80
Nasdaq 2,128.42 15.54
S&P 500 1,216.11 4.25
Russell 2000 669.87 7.73
CBOE Volatility 11.37 -0.08
30 Yr Bond 4.36 0.00
10 Yr Bond 4.12 0.01

[UpInArms]

57. another twin!

:toast:

[Roland99]

58. Woo hoo!

:pals:


Yours was prettier, though. ;)

[UpInArms]

56. 2:23 EST numbers and blather

Dow 10,496.08 +46.94 (+0.45%)
Nasdaq 2,128.48 +15.60 (+0.74%)
S&P 500 1,216.15 +4.29 (+0.35%)
10-Yr Bond 4.116 +0.07 (+0.17%)

NYSE Volume 1,228,523,000
Nasdaq Volume 1,254,618,000

2:00PM: Stocks continue to hold their own as sellers remain a reluctant bunch... One area under modest pressure, however, has been Biotech... While in focus all day ahead of Genentech's (DNA 83.61 +0.44) Q2 report after the bell, a 4.4% sell-off in shares of Affymetrix (AFFX 56.63 -2.62) has weighed heavily on the group...

Earlier, shares of DNA shares, which are up roughly 50% on the year, touched a new all-time high of $85.00, while AFFX shares, which hit their best levels in over four years on Friday, have lost ground after after Baird downgraded the stock to Underperform from Neutral based on valuation concerns... NYSE Adv/Dec 2241/977, Nasdaq Adv/Dec 1996/987

1:30PM: More of the same for stocks as buying remains widespread across areas... While strong follow-through has lifted the Dow (+0.5%) more than 350 points above Thursday's lows, pushed the S&P (+0.4%) back into positive territory for the year and the Nasdaq (+0.8%) even further beyond the 2100 mark - a closing level only reached four other times this year, the Russell 2000 (+1.2%), which has hit another historic high, continues to outpace the major averages...

Even with oil prices off more than 2.0% on the day, investors continue to favor small-cap issues that are far less dependent on energy to grow than some of their blue-chip counterparts...NYSE Adv/Dec 2152/1052, Nasdaq Adv/Dec 1973/982

[54anickel]

61. 10,500 still just out of reach? Thought for sure they'd jump that hurdle

early on in the day. :shrug:

[Roland99]

65. They're pacing themselves now.

[54anickel]

60. Pollution case against US miner

http://www.thestandard.com.hk/stdn/std/World/GG12Wd09.html

Indonesian prosecutors Monday filed pollution charges against an Indonesian unit of United States-based Newmont Mining and its American chief executive in a case that has raised concern among foreign investors.

Newmont has denied it caused the pollution blamed for sickness among villagers near a gold mine on Sulawesi island's Buyat Bay, about 2,200 kilometers northeast of Jakarta.

The trial will be held in Manado in North Sulawesi. North Sulawesi prosecutor Robert Ilat said the charges related to ``illegal waste dumping that caused pollution by negligence or deliberate '' and had been laid against the firm and its president director, Richard Ness.

snip>

The case has alarmed foreign investors worried about the difficulty of doing business in Indonesia and raised fears about the risks for foreign company employees.

snip>

Many investors also say Indonesia is one of the toughest places in the region to do business because of corruption, excessive red tape and tough labor laws. :eyes:

[UpInArms]

62. Retail gasoline price reaches new record: AAA

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38544.6047402662-838229048&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- The average U.S. price for a gallon of regular unleaded gasoline reached a new record Monday of $2.291, surpassing the previous record of $2.276 from April 11 of this year, according to AAA's Daily Fuel Gauge Report. Friday's average was at $2.234 and a year ago, it was at $1.894, according to AAA's data.

http://www.thesting.org/display_article.asp?id=1334

excerpt:

It was Jan. 26th, 2000, at a GOP debate on a cold winter’s night in Manchester, New Hampshire. Heating oil prices were up, and the debate moderator decided to put a question to the governor from Texas.

“The Energy Secretary said he would not tap US strategic petroleum reserves in order to drive down prices saying those reserves are for emergencies,” said the moderator. Then he asked, “But given the shortages that exist, do you consider this an appropriate time to tap those reserves?”

“No, I don’t,” responded George W. Bush. “I agree with the energy secretary that the strategic petroleum reserve is meant for a national wartime emergency.”

Bush then stated, “What I think the president ought to do is get on the phone with the OPEC cartel and say we expect you to open your spigots. One reason why the price is so high is because the price of crude oil has been driven up. OPEC has gotten its supply act together and it’s driving the price, like it did in the past. And the president must jawbone OPEC members to lower the price.”

“And if in fact there is collusion amongst Big Oil, he ought to intercede there as well,” Bush added.

...more...

The price of a gallon of gasoline in January 2001:

http://www.iags.org/gaspricetable.htm

U.S. $1.52

[54anickel]

63. Well, he's been on the horn with OPEC and his Saudi friends, of course

it didn't do much good. So exactly when and how will he intercede with Big Oil? Or does he only do that when their profits are down?

[UpInArms]

64. when he made that spigot statement

gas was at $1.35 per gallon - oil was at $30 barrel

:banghead:

http://www.pbs.org/newshour/bb/economy/jan-june00/oil_2-17.html

GWEN IFILL: Americans have come to count on cheap oil. No longer. Energy prices are soaring. A gallon of gasoline, which cost an average of 92 cents a gallon a year ago, now goes for $1.35 a gallon and higher, up more than 30 percent.

CONSUMER: Well, there's not too much you can do about it. You have to have the gas, so you have to pay the price.

GWEN IFILL: The cost of heating oil in the Northeast has doubled as well, driven in part by the cost of crude oil. The barrel of oil that cost just $11 only a year ago now costs about $30. The last time oil was this expensive was during the Persian Gulf crisis in 1991. The impact has been felt at gas pumps, in homes heated by oil and at airline ticket counters, where $20 fuel surcharges have been added to ticket prices. Federal

Reserve Chairman Alan Greenspan and other inflation watchers are taking notice, worried that energy costs could also drive up the prices of other goods. Particularly hard-hit is New England, where three-quarters of the homes are heated by oil. Some low-income residents say they have been forced to choose between paying for food or paying for oil to heat their homes. At a news conference Wednesday, President Clinton announced that he had released $125 million in federal funds to help poor families pay energy bills.

...more...

Notice also that Meanspin doesn't give a rat's ass that gas is almost double that now :eyes:

[54anickel]

66. Federal Deficit Reality: An Update (Ugh!)

U.S. Treasury Shows Actual 2004 Budget Deficit at $11.1 Trillion

Ultimate Crisis for Dollar Moves Beyond Possible Remedies

Hyperinflation and New Gold-Based Currency
System Are Likely Consequences

http://www.kitco.com/ind/williams/jul072005.html

Foreword

From time to time, the U.S. financial markets manifest some concern about the nation's twin deficits -- the federal budget and the current account shortfalls. These episodes have been short-lived, however. Generally, the markets have been very sanguine about these problems -- much too sanguine, in our view! We believe there is a great deal about which to be concerned in both areas, and that longer run, the U.S. markets will indeed reflect it -- negatively, of course. This article updates our thoughts, etc. on the federal budget deficit.



When the U.S. Treasury reported the official 2004 federal budget deficit at a record $413 billion last October, the hisses and boos in the financial media were unrelenting. Two months later, the Treasury reported the actual 2004 deficit -- using generally accepted accounting principles (GAAP) -- was really an incredulous $11.1 trillion <1>, up from $3.7 trillion in 2003, yet nary a word was heard in the financial media, from Wall Street or from any political denizen of that former malarial swamp on the Potomac. An exception, of course, was Treasury Secretary John Snow, who signed the government's financial statements, but the data release was as low key as physically possible.

The silence partially reflects the financial-market terror that would accompany an effective national bankruptcy. Such is the risk when a government's fiscal ills spin so wildly out of control that they no longer are containable within the existing system.

Consider the traditional solution of raising taxes. Putting the $11.1 trillion deficit in perspective, if the government raised individual and corporate income taxes to 100%, seizing all salaries, wages and profits, the government's 2004 operations still would have been in deficit by trillions of dollars. The deficit has moved beyond practical fiscal control! Many in government and the markets are aware of the underlying deficit reality, but few dare to sound the alarm, for the ultimate resolutions to the situation all are political or financial nightmares.

The government's GAAP-based accounting generally is as used by Corporate America. It includes accrual accounting for money not yet physically disbursed or received but that otherwise is committed. The largest differences come from the bookkeeping related to Social Security and Medicare, where year-to-year changes in the net present value (discounted for the time value of money) of any unfunded liabilities are counted. In contrast, traditional deficit accounting is on a cash basis. It counts the cash received from payroll taxes (social Security, etc.) as income, but it does not reflect any offsetting obligations to the Social Security system.

For nearly four decades, officially sanctioned accounting gimmicks have masked federal deficit reality. Surpluses in trust accounts, such as Social Security, have been used to obscure the true shortfall in government spending. With less than one tenth of the actual deficit being reported each year, a cumulative negative net worth for the U.S. government has built up in stealth to a level that now tops $45 trillion, with total obligations of $47.3 trillion (more than four times annual GDP). The problem has moved beyond crisis to an uncontrollable disaster that threatens the existence of the U.S. dollar and global financial stability.

more...

[54anickel]

67. Cripes, check the 3:30 blather

3:30PM: Major averages consolidate somewhat heading into the close, but gains still remain prevalent across most areas... Since the last update, it appears investors may be locking in some profits following two days of strong gains; however, an 18.8 P/E multiple for the S&P, representing an earnings yield of 5.3% compared to benchmark yields of about 4.1%, continues to make stocks more attractive relative to bonds...NYSE Adv/Dec 2254/1028, Nasdaq Adv/Dec 2016/1024


Like I said earlier, there's no place else to go....

[ozymandius]

69. This would suggest an impending selloff.

Otherwise, where is there to go except for cash if your stock is threatening no dividend on a profit warning?

[ozymandius]

68. close with blather

Dow 10,519.72 +70.58 (+0.68%)
Nasdaq 2,135.43 +22.55 (+1.07%)
S&P 500 1,219.44 +7.58 (+0.63%)
10-Yr Bond 4.102 -0.07 (-0.17%)
NYSE Volume 1,810,617,000
Nasdaq Volume 1,731,009,000

Close: Strong follow-through buying efforts - fueled by falling oil prices, new M&A activity and increasing confidence that upcoming earnings reports may exceed expectations - extended Friday's rally and closed virtually every sector to the upside... The Dow ended the session above 10500 for the first time this month, the S&P inched back into positive territory for the year, the Nasdaq inked its fifth finish above 2100 in 2005 and the Russell 2000 hit another historic high...

Crude oil futures ($58.92/bbl -$0.71) closed down (-1.2%) for the third consecutive session amid reports that Hurricane Dennis missed key oil rigs and platforms in the Gulf of Mexico... The news eased concerns of further supply disruptions and provided investors with some relief about high energy prices weighing on corporate profit margins, as the first full week of earnings began in earnest...

Analysts are currently forecasting Q2 aggregate EPS growth for the S&P of about 7.5%, below the 8.8% growth estimated at the start of the quarter; but, based on the growing understanding that final EPS growth rates every quarter come in about 2-5% above initial forecasts, the realization that Q2 earnings may check in closer to 9-12% helped underpin a floor of widespread support for stocks... Several corporate deals - from VNU's $7 bln bid for IMS Health (RX 26.50 +0.61) and Pogo Producing's (PPP 54.10 -0.68) $1.8 bln bid for Unocal's (UCL 65.97 +0.23) Northrock Resources to a potential $2.5 bln offer for Agilent Technologies' (A 25.67 +1.33) chip products unit from KKR and Silver Lake Partners, also helped improve sentiment across the board...

[54anickel]

70. WTF is that about?

...EPS growth for the S&P of about 7.5%, below the 8.8% growth estimated...but, based on the growing understanding that final EPS growth rates every quarter come in about 2-5% above initial forecasts, the realization that Q2 earnings may check in closer to 9-12%....

That's just crazy talk! :crazy:

[54anickel]

71. Oil reclaims lost ground in after hours (Cripessake!)

Prices rebound from regular session's one-week low

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B347040AC%2D8446%2D478E%2DB273%2D4E27CAC7EE24%7D

SAN FRANCISCO (MarketWatch) -- Crude futures climbed in after-hours trading Monday, rebounding from earlier declines as traders attempted to gauge how quickly oil and natural-gas facilities in the Gulf of Mexico cane resume operations in the Gulf of Mexico following Hurricane Dennis.

Crude futures for August delivery traded recently at $59.30 a barrel, up 38 cents in evening trade. It closed out the regular New York Mercantile Exchange session at $58.92 -- it's lowest since July 1 -- down 71 cents after touching a low of $58.02.

Hurricane Dennis forced the evacuation of a total of 445 rigs and platforms, according to a Monday report from the U.S. Minerals Management Service, which was released a few minutes before the end of the regular trading session.

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The update was the main reason for the rally, said Phil Flynn, a senior analyst at Alaron Trading. "People were surprised that Dennis shut in 1.4 million barrels of daily oil production ," he said, emphasizing that that was a bigger loss of oil than many expected.

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$60 comfort level

There may be "$3 to $4 of sway to either side of $60 depending on market conditions," said Kerr, pointing out that the "crude-oil market is extremely volatile right now and any sign of something out of place could jolt it right back above $60."

He also said that "we are only at the start of hurricane season, so the worst may be yet to come for the Gulf Coast" and the "potential for a catastrophic hurricane is very high."

For now, "with relative calm at hand, oil prices could dip back toward $55, but are more likely to firm on weak supply numbers and edge back up towards $60," predicted Kerr.

If prices do move back up toward $60 and the market sees another more devastating hurricane, crude will "jump to new highs quite quickly," he said. "All in all, crude seems to be holding its own up here at the once unheard of level of $60 -- suddenly $70 or higher crude doesn't seem that unreasonable at all."

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