STOCK MARKET WATCH, Wednesday 19 July

[ozymandius]

Tuesday July 19, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 186 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 211 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 275 DAYS
DAYS SINCE ENRON COLLAPSE = 1332
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 18, 2005

Dow... 10,574.99 -65.84 (-0.62%)
Nasdaq... 2,144.87 -11.91 (-0.55%)
S&P 500... 1,221.13 -6.79 ( -0.55%)
10-Yr Bond... 4.22% +0.05 (+1.15%)
Gold future... 421.00 -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 Rob Kirby

MID SUMMER REPORT CARD

I wanted to take a moment and revisit a wonderful essay written April 3, 2005 by Professor Robert Bell titled The Invisible Hand (of the US Government) in Financial Markets. In this essay, Bell outlines the significance of The American Jobs Creation Act signed into law on Oct. 22/04. In his paper, Bell explains that the law provides American companies with monies "off shore" to repatriate it for a one year period and have their effective tax rates on these repatriated funds lowered from 35% to 5.25%. He predicted that this would result in a substantial flow of homeward bound funds. He concluded as a result of his analysis, that bearish sentiment toward the U.S. dollar (particularly negative at the time) would not likely be manifested with the dollar making new lows. In fact, Bell was one of the only prognosticators that I remember reading who had a fundamentally credible thesis as to why the dollar would do better in spite of the burdening twin deficits – even if only temporarily.

-cut-

Bell further speculated that this torrent of repatriated cash would fuel a wave of mergers and acquisitions – which would likely result in the loss of jobs – all in the name of synergy creating redundancies. If we use the Birth/Death model chart from the BLS (Bureau of Labor Statistics) as a proxy for where/if any “likely” jobs are being created, we can clearly see that even the BLS does not seem to put much stock in the notion that jobs are being created in many areas - save leisure, financial services and house construction.

-cut-

While scheduled tax breaks continue next yr. under the American Jobs Creation Act, the tax savings are not nearly as big – so it’s perhaps a good bet that any repatriation of funds that happens is likely going to be ‘front loaded’ into this calendar year. According to Bank of America's (B of A) assessment of the situation, there is perhaps a potential pool of about 700 billion held off shore by U.S. based multi nationals. They anticipate that 300 or so billion might be repatriated under the Jobs Act.

-cut-

In light of what has already occurred, I would suggest that in the absence of a “new” stimulus package - it might be a logical speculation that the U.S. dollar will come under renewed selling pressure or resume its downward trajectory soon after the stimulating effects of the Jobs Act conclude on Oct. 22 of 05. Flowing from that, another logical speculation might perhaps be a decline in M & A activity late this fall along with an accompanying disincentive to own or hold equities who earn their keep from fees in this and associated activity.

more...

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

[ozymandius]

2. lotsa mergers: something to do with repatriated cash

BENTON HARBOR, Mich. - Whirlpool Corp.'s top executive fired the first salvo in a possible three-way bidding war for rival Maytag Corp., saying Monday his company's $1.37 billion offer provides the "best opportunity to address Maytag's needs."

Whirlpool Offers to Buy Maytag for $1.37B

WILMINGTON, Del./CINCINNATI (Reuters) - Procter & Gamble Co. (NYSE:PG - news) and Gillette shareholders on Tuesday overwhelmingly approved the plan for P&G to buy Gillette in a $52.9 billion deal that would combine Gillette razors and Duracell batteries with Crest toothpaste and Pampers diapers.

P&G shareholders approve buy of Gillette

OVERLAND PARK, Kan. - With shareholders' blessing in hand, Sprint Corp. and Nextel Communications Inc. are pressing forward to have their unified brand in stores in time for the holidays.

Shareholders Approve Sprint, Nextel Merger

[54anickel]

10. Job destruction bill hard at work again. Sheesh, ya ever notice how

everything this maladmin has put out has the exact opposite outcome from what it's name implies. Guess they really count on Merikuns being so over burdened (or just same stupid in some cases) to take the time to read the details. Sad part is, it's been working pretty well for them so far.

[UpInArms]

26. Wachovia Q2 Profit Climbs on Acquisition

http://www.forbes.com/feeds/ap/2005/07/19/ap2145011.html

Wachovia Corp., the fourth-largest bank in the country, said Tuesday second-quarter earnings rose 32 percent from last year, helped by its acquisition of SouthTrust Corp. and expense reductions.

The company, which became one of the South's biggest banks after the SouthTrust acquisition last year, said net income grew to $1.65 billion, or $1.04 per share, from $1.25 billion, or 95 cents per share, a year ago. Excluding merger-related expenses, the company said latest-quarter results would have equaled $1.7 billion, or $1.07 per share.

Revenue totaled $6.39 billion, up 16 percent from $5.51 billion last year. The company said results were boosted by the successful integration of SouthTrust, "expense discipline," good credit quality and strong sales activity.

The adjusted results outpaced Wall Street expectations for earnings of $1.05 per share on revenue of $6.52 billion, as provided by a Thomson Financial survey.

...more...

[UpInArms]

48. Fitch places Whirlpool on rating watch 'negative' (M&A bad)

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38552.4486579977-838891408&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Fitch Ratings on Tuesday placed Whirlpool Corp.'s (WHR) ratings on watch negative, which includes its BBB+ senior unsecured debt, F2 commercial paper program and BBB+ $1.2 billion revolving credit facility. The move follows the appliance maker's proposal to acquire Maytag Corp. (MYG) for $2.3 billion, and reflects the potential expected large increase in leverage, as well as the difficulties inherent in integrating a sizeable but struggling competitor that had exhibited negative operating trends. Fitch also said if Whirlpool's bid is successful, the deal presents an opportunity to increase scale and combined profitability, drive efficiency and increase market share.

[54anickel]

74. Whirlpool offer for Maytag seen as bid to block Chinese

http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050719/IBMAYTAG19/TPBusiness/International

snip>

But some observers yesterday suggested Whirlpool's move, which would give it almost 50 per cent of the U.S. appliance market, is a defensive tactic.

Analysts see Whirlpool trying to keep Haier from increasing its share in North America by buying the strong Maytag name and combining it with low-wage manufacturing.

"I don't think that they'd like Maytag to fall into the hands of a Chinese competitor, said Eric Bosshard, an analyst at FTN Midwest Research in Cleveland.

Haier, China's largest refrigerator maker based in Qingdao, can produce good, low-cost appliances, but it doesn't have a name in North America, and Maytag "would give them the brand with which to compete," Mr. Bosshard said.

David Silver, an analyst at New York-based Wall Street Strategies, agrees that the Whirlpool bid is a "defensive offer," and expects Haier to outbid Whirlpool. "I think it is going to be upwards to $19 a share.," he said.

"Haier can definitely afford to do so," Mr. Silver said. "They are the largest producer of appliances in China, and the Chinese are not as demanding as American investors in that it doesn't have to be every quarter that they see a profit. They are willing to take a loss in one or two quarters to see a large gain in the future."

more...

Don't ya love the smell of burnin' money? Heh-heh, and China's got lotsa dollars to burn

[UpInArms]

3. daily dollar watch

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

Last trade 90.30 Change +0.66 (+0.74%)

Forex: Yen declines amid possible US rate hikes

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2323&Itemid=62

The Yen weakened against the dollar on carry trade momentum as traders speculated that recent US economic strength would lead to further rate hikes. The USD/JPY rose 85 points to finish at 112.74 as of 11:04 GMT. The EUR/JPY was bounded between 134.80 and 135.10 finishing at 135.01 as of 11:10 GMT.


The Japanese Leading Economic Indicator came in line at 36.4% just as predicted by economic surveys. The Leading Economic Indicator was 40.0% the previous period. The Coincident Index was 60%, which is just as expected as well. It was 55.60% the previous period. Looking ahead, Convenience Store Sales will be released at 07:00 GMT tomorrow, they were –1.9% the previous period.

In the first trading day after Monday’s national holiday, the benchmark Nikkei 225 Index edged up 0.05 per cent to 11,764.84, while the broader Topix average slipped 0.15 per cent to 1,191.53. Honda gained 1.1% to finish at 5,650 Yen. Fuji Electric Holdings rose 6.7% to end at 380 Yen. Fuji Electric recently announced it would raise production for hard disks used in mobile phones. Sumitomo Mitsui Financial Group declined 1.7% to 734,000 Yen. Goldman Sachs recently downgraded Sumitomo Mitsui.

...more...

Forex: Dollar Remains Mixed In Light Of Higher TIC report

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2291&Itemid=62

It was a battle between US TIC data and European CPI in economic activity today driving the U.S. dollar activity against the euro. Both pieces of data were mildly positive and created a difficult environment for any strong directional movements. The pair rose about 30 pips prior to the open of the NY session, but dipped back to almost 1.2040 before rising again to nearly 1.2090. At 19:25 GMT, the EUR USD was trading at 1.2050.
Euro zone CPI data was released first and showed an increase in the annual inflation to 2.1% over the 12 months ending in June 2005, above the ECB’s inflation target of 2 percent and subsequently worked to further quell any remaining short term rate cut concerns. Rooting for the dollar side was May’s net foreign security purchases of $60.0B. This is the first time in 3 months that the balance was greater than the monthly trade deficit, showing strong foreign interest in US denominated assets.

After the IEA lowered oil demand forecasts for the rest of the year, OPEC followed today with a similar assessment. This relieved some tropical storm concerns and brought oil down $.99, or 1.7%, to $57.10 at 16:53 GMT. In equity market action, all of the major indexes were down today as earnings and expectations continued to fall. At 19:30 GMT, the Dow Jones Industrial Average was down 54.77, or 0.51%, to 10,586.06. NASDAQ was down 8.30, or 0.38%, to 2,148.48. Lastly, the S&P 500 was down 4.89, or 0.40%, to 1,223.03.

Stocks in the financial sector led losses today with shares of the largest US bank, Citigroup Inc., falling $1.45 or 3.12%, to $44.97 on earnings of 97 cents a share. The quarter’s earnings were 5 cents less than the average analyst’s estimate. Most of the shortfall came from a decline in revenues from fixed-income trading due to the shrinking differential between short and long-term interest rates. The No. 2 bank, Bank of America Corp., experienced the same troubles with fixed-income trading revenues falling nearly 77% since a year ago. Even with a 12% increase in overall second-quarter profits, shares were still down $0.75, or 1.63%, to $45.23 at 19:11 GMT.

...more...

Dollar rising on air :shrug:

Have a Great Day Marketeers!

[UpInArms]

12. Dollar gains fresh strength ahead of Greenspan

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38552.362682338-838883896&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) - The dollar gained fresh strength against its major counterparts Tuesday morning as the market is anticipating Fed Chairman Greenspan to reiterate the central bank's policy of measured tightening and an upbeat outlook on the economy in his semiannual testimony Wednesday. In a possible preview of his testimony to Congress, Fed Chief Alan Greenspan said "the U.S. economy seems to be coping pretty well with the run-up in crude-oil prices." His comments came in a series of written answers to questions released by the Joint Economic Committee of Congress on Monday. In early U.S. trading, the euro fell 0.7% to $1.1971, while the dollar stood at 112.83 yen, up 0.9%.

[UpInArms]

13. Fed Seeks Clues to Stop Increases as Rates Approach `Neutral'

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aghsSKhqyxgM&refer=home

July 19 (Bloomberg) -- The Federal Reserve is entering a new phase in its drive to bring interest rates back up to normal: While the central bank will continue to push rates higher, policy makers also will watch for signs that it may be time to stop.

Former Fed Governor Laurence Meyer says the Fed is approaching the ``lower boundary'' of the so-called ``neutral'' zone where it hopes to leave the benchmark overnight lending rate -- a point at which monetary policy neither slows economic growth nor stimulates it, intensifying inflationary pressures.

Fed Chairman Alan Greenspan is expected to say tomorrow in his semi-annual report to the House Financial Services Committee that the Fed will continue to raise rates at a ``measured'' pace. Greenspan gave no hint of any pause in the central bank's rate- raising push when he testified before Congress June 9.

``They are feeling their way toward neutral,'' said Brian Sack, a senior economist in Washington at Macroeconomic Advisers, the St. Louis-based forecasting firm co-founded by Meyer. ``They are willing to let the data tell them whether they have removed accommodation.''

<snip>

``We are coming into the third quarter with a lot of momentum and a low unemployment rate that will compel the Fed to raise the overnight rate to 4 percent by year-end,'' said Sack of Macroeconomic Advisers.

...more...

We really need a new smilie of a brain imploding.

[54anickel]

25. Coming up on that 3rd bowl of porridge?...eom

[54anickel]

29. Inflation Convergence (Roach)

http://www.morganstanley.com/GEFdata/digests/20050719-tue.html#anchor0

Is inflation global or local? That is a key aspect of the macro debate, which is now moving to center stage in financial markets. Generations of economists, policymakers, and investors are trained to look at inflation as a closed-economy phenomenon, driven by the “cost mark-up” models of yesteryear. However, as an unmistakably powerful convergence of inflation rates around the world suggests, globalization argues for a different approach. Country-specific inflation calls are increasingly becoming global inflation calls.

The evidence on geographic inflation convergence is compelling. As recently as 1990, CPI-based inflation in the so-called advanced economies was running at a 5% rate, whereas the median inflation rate for developing countries was slightly above 15%. According to the IMF’s latest estimates, inflation in the developed world is likely to average around 2% in 2005 and 4.8% in the developing world. That means over this 15-year time period, annualized inflation differentials between these two categories have narrowed from slightly over ten percentage points to just under three percentage points.

Powerful convergence trends are evident within virtually every major subset of the mix of global inflation. With the notable exception of Japan’s protracted deflation, inflation rates throughout the developed world have converged uniformly toward 2-2.5% over the past five years. Country-specific inflation differentials have all but vanished in the Euro area: For example, over the 1987-96 period, inflation in Italy and Spain averaged 5.3%, double the 2.6% average for Germany and France; our 2005 estimates point to approximately 2.5% in the once high-inflation economies of economies of Italy and Spain, only slightly faster than our estimates of 1.8% in Germany and France. Convergence is even evident in inflation-prone Latin America: For example, over the 1987-96 period, inflation surged at a 656% average annual rate in Brazil -- about 18 times Mexico’s 37% average; for 2005, our latest estimates put inflation at 5.9% in Brazil and 4% in Mexico.

This is hardly a statistical accident. Equally compelling is the global breakdown of the linkage between labor costs and inflation in recent years. According to calculations by the BIS (the Basel-based Bank for International Settlements), the correlations between annualized changes in the CPI and unit labor costs have dropped sharply in every major region of the developed world in the last 15 years (see Chapter IV of the 75th Annual Report published by the BIS in June 2005). In the US, the BIS calculates that the so-called wage-inflation correlation fell from 0.76 over the 1965-79 period to 0.28 over the 1991-2004 interval. Moreover, significant reductions in the wage-inflation correlation were evident over the same timeframe in Japan, Germany, France, Italy, and the UK. Within this sample of six major developed economies, the sharpest reduction in this correlation was evident in France (0.75 over the 1965-79 period versus 0.11 during 1991-2004) whereas the smallest reduction occurred in the UK (0.71 over the 1965-79 period versus 0.56 during 1991-2004). These results drive a stake into the heart of the classic cost-mark-up models that have long played a central role in explaining country-specific inflation trends. Throughout the developed world, the wage-price linkage has lost its power in explaining the ups and downs of inflation cycles in individual economies.

more...

[54anickel]

56. It Costs a lot to fight a War on Terror

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

snip>

Much has been made of the improvement sustained in the May trade figures. But let’s keep this in context. As William Greider, national affairs columnist for The Nation, noted: “The United States is heading for yet another record trade deficit in 2005, possibly 25 percent larger than last year's. Our economy's international debt position - accumulated from many years of tolerating larger and larger trade deficits - began compounding ferociously in the last five years. Our net foreign indebtedness is now more than 25 percent of gross domestic product and at the current pace will reach 50 percent in four or five years .”

What about the fiscal position? Last year, talk of rising `twin deficits' was widespread at the height of dollar pessimism. Markets generally tend to be less tolerant of external deficits when they are seen as being driven by the public sector. However, in recent months the Federal deficit appears to be showing signs some dramatic improvement (a point that CEA head Ben Bernanke made last Wednesday). In the past three months, the 12 month running deficit has contracted by a $109bn to `just' $D335bn. In 3 month moving average terms, net tax receipts have risen a striking 21% year over year whilst net outlays have risen just a little over 6% year over year.

On the other hand, it is worth considering this “improvement” in the context of the overall 2004 Financial Report of the United States Government (the full document being available as a PDF file at www.fms.treas.gov/fr/04frusg/04frusg.pdf). The table published in the Overall Perspective on page 11 shows an $11.1 trillion annual deterioration in the government's net worth. As an aside, it is worthwhile noting the GAO's auditor's letter as to why they will not certify the statements. Explaining the discrepancy, financial analyst John Williams notes the following:

snip>

The dollar’s recent strength perversely has undermined another significant potentially significant prop for support in the future. The Financial Times reported last week that Corporate America would 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, which will not just mean an end to the quarterly supercharging of earnings, but also threatens to disrupt the repatriation of hundreds of billions of dollars of foreign earnings built up over several years. These real flows of money stem from a one-year tax amnesty granted by the US Congress to encourage US multinationals to reinvest money earned overseas in their businesses back home. Since the amnesty began in January, large companies have announced plans to repatriate more than $100bn and earmarked up to another $150bn. But the dollar’s recent strength may put a halt to this repatriation process.

So in many respects, the dollar’s current “success” on the foreign exchange markets appears to contain the seeds of its own destruction. Improved revenues appear largely a product of debt financed activity, which in turn are generating revenue gains that are probably unsustainable in the longer run. The strains of military overstretch is likely to exacerbate the problem and appear set to get worse as the “coalition of the willing” gradually becomes the “coalition” of the one. The dollar’s strength, therefore, appears no more than a summer respite. By the autumn, things may well look different to the forex markets again.

lots more....

[54anickel]

58. CASUALTY OF WAR: THE U.S. ECONOMY

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/07/17/MNG5GDPEK31.DTL

The wars in Iraq and Afghanistan have already cost taxpayers $314 billion, and the Congressional Budget Office projects additional expenses of perhaps $450 billion over the next 10 years.

That could make the combined campaigns, especially the war in Iraq, the most expensive military effort in the last 60 years, causing even some conservative experts to criticize the open-ended commitment to an elusive goal. The concern is that the soaring costs, given little weight before now, could play a growing role in U.S. strategic decisions because of the fiscal impact.

"Osama (bin Laden) doesn't have to win; he will just bleed us to death," said Michael Scheuer, a former counterterrorism official at the CIA who led the pursuit of bin Laden and recently retired after writing two books critical of the Clinton and Bush administrations. "He's well on his way to doing it."

snip>

Put simply, critics say, the war is not making the United States safer and is harming U.S. taxpayers by saddling them with an enormous debt burden, since the war is being financed with deficit spending.

snip>

The objective has always been to install a friendly government," said Charles V. Peña, director of defense policy studies at the Cato Institute in Washington, a libertarian think tank. "Are the costs worth that? No, because it's not something we can accomplish for the long term. It's just going to continue to drain the American taxpayer. I don't see how it's going to get better. It's only going to get worse."

James Jay Carafano, a senior fellow for national security and homeland security at the Heritage Foundation, which supports the president on most matters, warned that the war's costs would only rise because of the growing need to repair and replace battered military equipment, from helicopters to Humvees. In addition, the rising death toll is making it harder for the military to recruit new soldiers, and long deployments are hurting the morale of National Guard and reserve units sent to Iraq.

more...

[UpInArms]

4. Today's Reports:

http://biz.yahoo.com/c/ec/200529.html

Jul 19	8:30 AM	Building Permits	Jun	-	2100K	NA	2062K	-	
Jul 19	8:30 AM	Housing Starts		Jun	-	2075K	NA	2009K	-

[UpInArms]

5. Housing Starts fall - Last Month Revised Lower

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38552.3542145255-838883043&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

(here's the spin - they're only "flat" because of the revision)

WASHINGTON (MarketWatch) - Construction of new homes was unchanged in June at a seasonally adjusted annual rate of 2.004 million, the Commerce Department estimated Tuesday. The June figures, while weaker than the 2.07 million expected by economists, show the housing market continues to sizzle. Building permits for new housing -- a signal of future activity -- increased by 2.4% to a 2.111 million rate in June from 2.062 million in May. Housing starts in May were revised slightly lower to a 2.004 million rate from 2.009 million estimated last month.

8:30am 07/19/05 U.S. MAY HOUSING STARTS REVISED LOWER TO 2.004M

8:30am 07/19/05 U.S. JUNE HOUSING STARTS IN WEST AT 7-MONTH LOW

8:30am 07/19/05 U.S. JUNE SINGLE-FAMILY STARTS FALL 2.5 TO 1.667M

8:30am 07/19/05 U.S. JUNE BUILDING PERIMTS UP 2.4% TO 2.111M RATE

8:30am 07/19/05 U.S. JUNE HOUSING STARTS FLAT AT 2.004M ANNUAL RATE

[ozymandius]

21. Land Speculation: What Is It Bad For?

by Fred E. Foldvary, Senior Editor

-excerpt-

Some land speculators buy raw or underdeveloped land and just let it sit until they think the time is ripe for development. When many speculators are doing this in some area at the fringe of a city, often developers skip around them to areas further away from the city. That creates land-wasting urban sprawl, which then requires more roads and longer water pipers and makes it uneconomical to have public transportation. In other cases, when speculators are buying land within a city they expect to be developed soon, development instead shifts to other, less expensive, areas, and the speculators lose out. Society also loses, since that area can stay relatively undeveloped even though it is within the city.

Other land speculators buy land in order to develop, expecting the rise in land value to be a big chunk of their profits. That works out well for the first ones to do it, but at the end of the land boom, when many developers are building and hoping to cash in on the land bonanza, the land value stops rising. Those who bought near the top don't get the land gain profit, and even worse, when the real-estate market crashes, the developers end up with empty houses and office buildings, and shopping centers they where they built but folks aren't coming. The go broke, can't pay back their loans, and the banks fail, making the economy fall even more.

-cut-

So what causes the depression is the reduction in investment in real estate and other capital goods, caused by rising interest rates and land prices. When the economy falls into the depression, real estate prices and interest rates fall, and now investment becomes profitable, and the recovery starts. For this to happen, the old bad debts have to be cleared, otherwise the financial system is clogged with bad debts, as it is now in Japan, and the new enterprises can't get the credit they need to get going. It also helps a lot if the barriers to new investment are taken down - that means eliminating restrictions and taxes on enterprise.

What makes land speculation dysfunctional - a cause of economic trouble - is not really the speculation itself, but the tax system in which it takes place. The tax systems in the world today mainly tax labor and profits. Some of the tax money goes to build public works, such as subways, freeways, streets, roads, public utilities, parks, security, fire protection, and schooling. These push up land values. So landowners get a government subsidy in the form of increased rent due to infrastructure that workers and businesses, not the landowners, are paying for. So land speculators profit from this forced transfer of wealth from workers to landowners, if they guess right on where new development will go.

more...

http://www.progress.org/archive/fold43.htm

[54anickel]

44. U.K. House Prices Declined for an 11th Month in June, RICS Says

http://www.bloomberg.com/apps/news?pid=10000102&sid=aNzrHGV38Z3I&refer=uk

July 19 (Bloomberg) -- U.K. house prices fell for an 11th month in June, a gauge of the Royal Institution of Chartered Surveyors showed, threatening to damp household confidence in Europe's second-largest economy.

The balance between estate agents and surveyors reporting home values rose and those saying they fell in the three months through June was a seasonally adjusted minus 42 percent, compared with minus 46 percent in the quarter through May, the Royal Institution of Chartered Surveyors said today in London. It was the longest period the measure has been negative since 1995.

snip>

Evidence of a slowdown in the $5.7 trillion property market reduces homeowners's scope to invest in their houses or spend on other things. Consumer spending, which makes up two thirds of the U.K. economy and helped fuel 51 quarters of growth, is struggling to pick up after barely increasing in the first quarter.

``RICS believes a modest interest-rate cut is now warranted to prevent any further deterioration,'' said Ian Perry, a spokesman at the institute.

The Bank of England raised interest rates five times in the 10 months through August last year, partly to cool a property boom that saw prices double in five years. The bank's benchmark interest rate, at 4.75 percent, is the highest among the Group of Seven industrialized nations.

Consumer Slowdown

more...

[UpInArms]

47. FACTBOX-Data to watch for US housing market strength

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-07-19T142309Z_01_N19342283_RTRIDST_0_ECONOMY-HOUSING-USA-FACTBOX.XML

WASHINGTON, July 19 (Reuters) - Surging home prices have led some analysts
to wonder whether the U.S. housing market is a bubble set to burst. Economists
say they are most worried about the priciest markets, such as parts of
California and Florida as well as Las Vegas and cities in the U.S. Northeast.


The following are the national economic indicators that government and
private-sector economists have said they track closely for signs a slowdown in
housing may be on the horizon.


Where state-specific data are broken out, states are listed according to
the one-year home price appreciation rate as judged by benchmarks developed by
the International Monetary Fund and using data from the U.S. Office of Federal
Housing Enterprise Oversight.

<snip>

Metro Area Prices(NSA) Q1 (from yr-ago) Aug 15/1000
Nevada:


Las Vegas +29.4%
California:


Los Angeles area +21.1%


San Francisco Bay Area +14.8%


San Diego +20.9%


Sacramento +26.9%
Hawaii:


Honolulu +26.0%
District of Columbia:


Washington, DC/MD/VA +22.7%
Florida:


Miami/Hialeah +28.4%


Orlando +28.7%


Daytona Beach +18.6%
Maryland:


Baltimore-Towson +6.9%
Arizona:


Phoenix +24.4%

...more...

[UpInArms]

6. SunTrust profit rises, bad loans increase

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-07-19T113611Z_01_N19314867_RTRIDST_0_BUSINESS-FINANCIAL-SUNTRUST-EARNS-DC.XML

NEW YORK (Reuters) - SunTrust Banks Inc. (STI.N: Quote, Profile, Research), the No. 7 U.S. bank, on Tuesday said second-quarter profit rose 20 percent, as lending and deposit growth and the acquisition of National Commerce Financial Corp. helped offset an increase in bad loans.

Net income for Atlanta-based SunTrust rose to $465.7 million from $386.6 million a year earlier. Earnings per share fell to $1.28 from $1.36, reflecting an increase in the number of shares outstanding.

Excluding merger costs, operating profit rose 29 percent to $499.3 million, or $1.37 per share. On that basis, profit matched the average analyst forecast according to Reuters Estimates.

Chief Executive L. Phillip Humann said significant loan and deposit growth and excellent credit quality helped offset an increase in the amount the bank set aside for bad loans.

SunTrust set aside $47.8 million for bad loans, up from $2.8 million a year earlier. Nonperforming assets rose 17 percent to $380.3 million, and net charge-offs fell 6 percent to $35.4 million.

...more...

[UpInArms]

7. U.S. chain stores sales up in latest week

http://today.reuters.com/investing/FinanceArticle.aspx?type=economicNews&storyID=URI:urn:newsml:reuters.com:20050719:MTFH84846_2005-07-19_11-46-26_NAT001699:1

NEW YORK, July 19 (Reuters) - U.S. chain store retail sales rose in the latest week, as sales of summer-related goods continued to underpin strength, a retail report said on Tuesday.

Sales rose 0.3 percent in the week ended July 16, compared with a 0.1 percent rise the previous week, the International Council of Shopping Centers and UBS said in a joint report.

Compared with the same week a year ago, sales momentum also improved 4.0 percent compared with a 3.9 percent rise the preceding week.

"It's a transition time for retailers as summer goods and summer clearance are certainly still driving the consumer, but back-to-school shopping has not yet kicked into gear," said Michael Niemira, ICSS's chief economist and director of research.

...more...

[UpInArms]

8. Ford profit drops 19 pct, beats forecast

When you lower the expectations to failure and call it success, how can you not win?

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-07-19T121916Z_01_N13639155_RTRIDST_0_BUSINESS-AUTOS-FORD-EARNS-DC.XML

DETROIT (Reuters) - Ford Motor Co. on Tuesday reported a 19 percent drop in second-quarter profit as it continued to lose vital U.S. market share, but earnings were substantially higher than analysts expected.

The second-largest U.S. automaker, which has warned that its automotive operations may not be profitable this year, reported a loss for its automotive operations for the quarter as its credit arm continued to drive results. Ford affirmed its full-year earnings outlook.

Ford's second-quarter net income fell to $946 million, or 47 cents a share, from $1.17 billion, or 57 cents a share, a year earlier.

Excluding special charges too, earnings were also 47 cents a share. On that basis, Wall Street analysts on average were expecting second-quarter earnings of 33 cents a share, according to Reuters Estimates.

Ford said charges related to a bailout of former parts subsidiary Visteon Corp. and job reduction programs reduced earnings per share by 18 cents. But the charges were fully offset by a one-time adjustment in the company's taxes.

The lower earnings follow a 13-month decline in the company's U.S. vehicle sales, including a dramatic slowdown in sales of its profitable mid- and large-size sport utility vehicles amid high gasoline prices.

...more...

[UpInArms]

31. Ford profit drops as market share dips

http://www.marketwatch.com/news/story.asp?guid=%7BD34F13BF%2D43AD%2D4F6B%2D9C10%2DA72000ED30DB%7D&siteid=mktw

excerpt:

Ford's automotive group turned in a loss of $245 million, down from a profit of $97 million a year ago, with North America weighing heavily on the bottom line amid higher costs and lower sales.

The North America division, facing higher costs and lower volume, reported a loss of $907 million. In the year-ago period the unit reported a profit of $454 million.

Land Rover led a rebound in the Premier Auto Group, which posted a profit of $17 million vs. a lost of $347 million last year.

Ford's financial unit, key to the company's profits in recent years, posted earnings of $740 million, down from $897 million a year ago amid higher borrowing costs.

...more...

[UpInArms]

35. Ford says will not give quarterly outlook

http://today.reuters.com/investing/financeArticle.aspx?type=marketsNews&storyID=2005-07-19T133224Z_01_N19336270_RTRIDST_0_AUTOS-FORD-FORECAST-URGENT.XML

DETROIT, July 19 (Reuters) - Ford Motor Co. (F.N: Quote, Profile, Research) said on Tuesday it will no longer give quarterly forecasts.

"We're not going to be giving quarterly guidance," Chief Financial Officer Don Leclair told analysts and reporters on a conference call. "The high volatility in many elements of the business ... makes it increasingly difficult to provide accurate short-term forecasts."

He also said Ford's automotive operations will post a loss for the year.

...more...

[UpInArms]

9. H-P to cut 14,500 jobs, 10% of force

(See? It's not so bad - it could have been 25,000! :sarcasm: )

http://www.marketwatch.com/news/story.asp?guid=%7B94C4E2B8%2D438B%2D40E8%2D8D6A%2DCA92C9D92CE8%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) - Hewlett-Packard on Tuesday said it would cut 14,500 jobs, or roughly 10% of its workforce, as part of a major restructuring that Chief Executive Mark Hurd said is necessary for the printer and computer giant to reach its "full potential."

The company (HPQ: news, chart, profile) is looking to simplify its business by placing sales and marketing efforts directly within business units.

"After a thorough review of our business, we have formulated a plan that will enable HP to begin delivering its full potential," said Hurd. "We can perform better -- for our customers and partners, our employees and our shareholders -- and we will."

The job cuts will come over the next six quarters as part of a plan designed to yield $1.9 billion in annual savings. H-P expects about half the savings will be used to "offset market forces or be reinvested in its business" while the rest is expected to "flow through to operating profit."

The Palo Alto, Calif.-based company expects to record charges of about $1.1 billion related to the restructuring over six quarters, starting in the fourth quarter.

H-P also plans to modify its U.S. retirement programs, freezing pension and retiree medical-program benefits of current employees who do not meet certain defined criteria. Yet the company will also increase its matching contribution for 401(k) plans to 6% from 4%.

...more...

[UpInArms]

45. HP's job cuts: a false economy?

http://business.timesonline.co.uk/article/0,,9075-1700325,00.html

excerpt:

"The majority of staff reductions will come in support functions, such as information technology, human resources and finance," says HP. "The remainder will be made inside business units, in areas where work can be reduced by improving processes and re-prioritising existing tasks."

There we have it. IT and support staff jobs will go and remaining staff will take on extra tasks. Is HP, which may have perfectly laudable ambitions to streamline itself and cut costs - falling into just the "austerity trap" highlighted by Accenture?

How soon will it be before the technology starts to feel outdated and need time-consuming and costly repair work? How long will it be before a stretched staff start to become overstretched?

It may be that HP is reacting to some other intelligence, in the form of a Datamonitor survey, which is predicting that IT spend by leading corporations in Britain could be halved in 2005-2006.

...more...

[UpInArms]

11. (Westinghouse) SRS tells 400 workers of pending layoffs

http://www.thestate.com/mld/thestate/news/local/12165653.htm

Westinghouse Savannah River Co. began notifying 400 employees that they would be laid off as part of a previously announced restructuring program, according to a company e-mail.

In December, the company that runs the Savannah River Site for the U.S. Energy Department said up to 2,000 people would be laid off by Oct. 1, 2006. More than half of those jobs were to be eliminated by the end of this September.

...very short blurb... (why give it a bigger mention - it's only a few hundred jobs :sarcasm: )

[UpInArms]

14. Treasury prices drop on news of steady housing starts

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38552.3613093403-838883831&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) - Treasury prices fell, sending yields higher, early Tuesday after the Commerce Department released new data indicating the housing market remains one of the stalwarts of the economy. Construction of new homes was unchanged in June at a seasonally adjusted annual rate of 2.004 million, weaker than the 2.07 new starts expected by economists polled by MarketWatch, but still pointing towards an exuberant housing sector. The yield on the benchmark 10-year Treasury note fell 2/32 to 99-5/32 with a yield ($TNX) of 4.230%.

[UpInArms]

15. International Paper plans massive realignment with $8B-$10B in proceeds

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&dateid=38552.3638861574-838883930&

NEW YORK (MarketWatch) - International Paper Co. (IP) said Tuesday it would concentrate on just two areas of its business with more than 70% of its sales -- uncoated papers and industrial and consumer packaging -- selling or spinning off its stakes in various wood products and other units to return $8 billion to $10 billion to the company as debt repayment and shareholder payouts. International Paper also said it would sell a 50.5% stake in a New Zealand forest products subsidiary, convert some paper mills and close some packaging plants in a realignment expected to be complete by 2007. IP currently based in Stamford, Conn., said it would evaluate in the next 30 days the possibility of moving its corporate headquarters to Memphis, Tenn. Shares of IP fell 20 cents Monday to $30.66.

[UpInArms]

78. Shares leap on plans to sell, spin off units and repay debt

http://www.marketwatch.com/news/story.asp?guid=%7B1AAD1A19%2DD39E%2D4112%2DBF94%2DB3E167F57DC4%7D&siteid=mktw

NEW YORK (MarketWatch) -- International Paper Co. said Tuesday it would restructure to focus on just two businesses -- uncoated papers and industrial and consumer packaging -- by selling or spinning off stakes in various units to generate returns of $8 billion to $10 billion.

Concentrating on the two areas, which represent more than 70% of Stamford, Conn.-based IP's sales, would generate annual savings of $400 million, helping IP (IP: news, chart, profile) repay debt and return proceeds to shareholders, the company said.



What's now a diversified North American paper and lumber company with exposure to sometimes-volatile commodity prices would become a slimmer, global paper and packaging company, with IP moving to capitalize on the potential for growing demand in Eastern Europe, Latin American and Asia, the company said.

IP follows a path traced in recent years by its major competitors, jettisoning a diverse mix of assets to play to perceived strengths and align itself with future consumer demand. Georgia-Pacific Corp. (GP: news, chart, profile) and MeadWestvaco Corp. (MWV: news, chart, profile) in recent years have focused on consumer goods and packaging, while Weyerhaeuser Co. (WY: news, chart, profile) has expanded its market share in lumber, plywood and other forest products.



"We are not going to wait for the market cycle here in North America to improve. We are going to take steps now," said John Faraci, IP's chief executive, during a conference call with analysts.

...more...

[UpInArms]

16. Able Labs plunges; co. files for bankruptcy protection

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7B4CF69E91-0B1A-470E-BE42-FA1A06A4E92B%7D&

NEW YORK (MarketWatch) -- Shares of Able Laboratories (ABRX) dropped 33.5% to 93 cents in pre-market action Tuesday. The move comes after the company filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code after Monday's closing bell. The company noted that it suspended manufacturing operations and recalled its product line on May 23 due to concerns about laboratory practices, and so it's not generating income or revenue at this time.

No quality control - had to recall every product made :shakeshead:

[UpInArms]

17. US consumers seen curbing back-to-school spending

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-07-19T130003Z_01_N19SRV666_RTRIDST_0_RETAIL-SURVEY.XML

CHICAGO, July 19 (Reuters) - U.S. families plan to spend 8 percent less on back-to-school merchandise than they did a year ago, with the biggest cuts coming in electronics, according to a survey released on Tuesday.

The National Retail Federation's poll of 6,487 people with school-aged children found that parents, on average, expect to spend $443.77 on back-to-school items this year, down from $483.28 last year.

Overall, U.S. consumers are expected to ring up $13.4 billion in back-to-school sales, down from $14.8 billion last year. Most of that drop is expected to come from electronics.

Shoppers planned to spend 33 percent less on electronics, or about $68.08 on average, down from $101.03 last year.

"It is understandable that, after several years of strong gains and record-breaking sales, demand may cool slightly for electronics merchandise this year," said Tracy Mullin, NRF president and chief executive officer.

...more...

[UpInArms]

18. Wells Fargo Home mortgage revenue down 42%

http://www.marketwatch.com/news/story.asp?guid=%7BDF1B863D%2DFA22%2D4A4B%2DBBDC%2D686913B6E195%7D&siteid=mktw

NEW YORK (MarketWatch) - Wells Fargo & Co., one of the nation's largest home mortgage lenders, reported a 42% decline in revenue from that business in the second quarter on Tuesday, but said net income reached a record.

The San Francisco-based bank (WFC: news, chart, profile) reported a 12% increase in second-quarter net income of $1.91 billion, or $1.12 a share, compared with $1.71 billion, or $1 a share, earned in the year-ago period.

The per-share earnings were a penny shy of the average analyst estimate of $1.13 a share, as compiled by Thomson First Call.

Overall revenue of $7.9 billion grew 6% from a year ago, the company said.

Home mortgage revenue fell to $774 million from $1.3 billion in the second quarter of 2004. Chief Financial Officer Howard Atkins attributed the decline to "normal servicing revaluation." Revenue from businesses other than home mortgages rose 16%.

...more...

[UpInArms]

19. Hedge funds may exacerbate credit risk -Fitch

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-19T130737Z_01_L1981939_RTRIDST_0_MARKETS-RATINGS-HEDGE.XML

LONDON, July 19 (Reuters) - The rise of hedge funds in the credit markets has forged links between previously unrelated segments, creating a risk that trouble in one area of the market could spread faster to others, Fitch Ratings warned on Tuesday. The credit ratings agency said hedge funds were an important source of capital to the market and could promote liquidity and diffuse credit risk, but it was concerned that the behaviour of these investment vehicles may exacerbate risks.

A particular source of concern would be if several hedge funds were forced simultaneously to sell their holdings to reduce exposure to the market and meet margin calls.

"A far-reaching liquidity squeeze and price dislocation across multiple, interlocking credit markets could ensue simply due to hedge funds' presence in most, if not all, of the major segments of the credit markets," Fitch said.

Fears over hedge fund losses flooded through the credit markets early in May after U.S. auto giants General Motors Corp. (GM.N: Quote, Profile, Research) and Ford Motor Co. (F.N: Quote, Profile, Research) were downgraded to "junk" status more quickly than many expected.

Concerns centred on hedge funds' involvement in complex credit derivatives and the possible need for forced sales to return cash to investors.

...more...

[UpInArms]

30. digging for details

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-19T134602Z_01_N19321352_RTRIDST_0_FINANCIAL-MERRILLLYNCH-EARNS-UPDATE-3.XML

excerpt:

Investment and commercial banks have both said that the small gap between short-term and long-term rates, combined with concerns about hedge fund liquidations in May, made trading conditions tough last quarter.

Hedge fund liquidation rumors hit credit instruments, like corporate bonds and credit derivatives, during the quarter, but those areas improved dramatically in June.

The fact that Merrill's quarter included the month of June probably helped the company's trading revenue, said Kent Forkner, senior research analyst at Boston Co. Asset Management, which owns Merrill shares.

Improving conditions in June may have also helped JPMorgan Chase & Co., (JPM.N: Quote, Profile, Research) which said on June 1 that its second-quarter trading results may be the weakest in some time, Forkner said.

...more...

[54anickel]

52. Investors turn on hedge funds (Huh? didn't we just read earlier this

week that they had too much money flowing in and no place to put it?)

http://money.cnn.com/2005/07/18/markets/hedgefunds_2Q/index.htm

NEW YORK (CNN/Money) - Hedge funds have struggled to make money this year, which means that for the first time in recent memory, it's getting tough for them to attract new money as well.

While the firms that track hedge fund asset flows do not expect to have complete information for a few more weeks, some industry watchers think that the second quarter net asset flows were flat or even negative – meaning that more money went out of hedge funds than into them.

If so, it would be the first time in recent memory that hedge funds did not gain new money.

snip>

Big losses in arbitrage strategies
The majority of outflows has come from funds that employ the battered convertible arbitrage strategy. In that strategy, managers buy convertible bonds -- those that can be exchanged for a certain amount of a company's common stock -- and short the underlying stock of the issuing company. The goal is to profit from the difference in price between the two securities.

The strategy has taken a well-documented drubbing, largely due to a vicious cycle that began late last year when investors in these hedge funds, unimpressed with lackluster returns, began asking for their money back. The redemptions forced managers to sell into a market with no buyers, driving returns even lower.

more...

They go on to say that it's no big deal, folks will come back because they've got to put their money somewhere. Just part of the cyclical nature like the telecom bubble and LTCM before that. Sometime you win, sometimes you lose...no big deal. :banghead:

[UpInArms]

54. But hey! If you're a CEO making $10,300 a day for the rest of your life

where are you going to put your money?

:puke:

[ozymandius]

20. pre-open blather

8:32AM: S&P futures vs fair value: +5.1. Nasdaq futures vs fair value: +9.5. Futures trade holds relatively steady following housing data, still indicating a higher open for the indices, as earnings data continues to hold precedence... June housing starts were unchanged at 2.004 mln units, slightly below expectations of 2.050 mln, while June building permits rose 2.4% to 2.111 mln units, above forecasts of 2.085 mln... Bonds have also held relatively steady, as the 10-yr note is unchanged to yield 4.21%

8:00AM: S&P futures vs fair value: +4.8. Nasdaq futures vs fair value: +10.0. Futures market versus fair value suggesting a higher open for the cash market after IBM beat analysts' Q2 expectations by $0.08 last night... Better than expected earnings from the likes of F, LU, MER, MYL, USB and WB this morning have also helped stocks regain some upside traction in the wake of yesterday's consolidation efforts...

[UpInArms]

22. The Devil in the Detail on IBM

http://quote.bloomberg.com/apps/news?pid=10000103&sid=a508Xiik3sv8&refer=news_index

excerpt:

IBM said profit from continuing operations increased to $1.85 billion, or $1.14 a share, from $1.74 billion, or $1.01, a year earlier. Sales fell 3.6 percent to $22.3 billion. Excluding gains from sale of the personal-computer business and a lawsuit settlement and costs from cutting jobs, profit was $1.12, beating estimates of $1.03.

Chief Executive Officer Sam Palmisano is now reaping the rewards of his decision to jettison the personal-computer unit, sold to China's Lenovo Group, to focus on services and software.

IBM said it plans to cut 14,500 jobs, up from 13,000 previously forecast, as part of efforts to boost profit.

Analysts' estimates for the rest of the year are ``reasonable,'' Chief Financial Officer Mark Loughridge said yesterday on a conference call with analysts. Analysts expect full- year profit of $4.83 a share.

``We have a good second-half pipeline,'' Loughridge said. ``We see growth in signings.''

Global services revenue gained 6.3 percent to $12 billion, more than the 5.2 percent expected by Banc of America analyst Keith Bachman in New York. Customers put off signing orders in the last two weeks of the first quarter, and IBM worked to get those deals signed this time.

Hardware sales fell 25 percent to $5.56 billion, less than the 29 percent drop predicted by Bachman.

...more...

[UpInArms]

80. IBM to cut 4,350 jobs in US - 10,150 in Europe

IBM now sees 14,500 job cuts, 70 pct of them in Europe

http://www.forbes.com/home/feeds/afx/2005/07/19/afx2145888.html

NEW YORK (AFX) - International Business Machines Corp said it now expects to cut 14,500 jobs, 70 pct of them in Europe, under the wide-ranging restructuring it announced in May.

The world's biggest computer and high-tech firm had previously said it was cutting 13,000 positions.

'We will eliminate approximately 14,500 positions, in addition to the normal level of workforce reductions,' chief financial officer Mark Loughridge said.

'About 70 pct will be in Europe. This is slightly higher than the range we provided in early May, due to good acceptance of the voluntary programs in Europe. Separations started at the end of June, and as of July 15, we've had about 8,000 people leave the business.'

...more...

[UpInArms]

23. Tyson announces plant closures, workforce reductions

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38552.3941894213-838886612&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Tyson Foods (TSN) said it was closing its processed chicken plant in Bentonville, Ark., which employs 320 people, and combining its operations with its plant in Russelville, Ark., which will be expanded to accommodate the increased production. The Russelville plant's production capacity will be increased by 60% and its workforce will grow by 165 employees. The company is also closing one poultry plant in Forest, Miss., and shifting production to another upgraded plant in Forest, resulting in the elimination of 300 employees. Tyson expects to record charges of $10 million, or 2 cents a share in its fiscal third quarter as a result of the plant closings. The stock closed Monday down 44 cents at $19.03.

[UpInArms]

24. 9:33 markets are thrilled!

Dow 10,661.21 +86.22 (+0.82%)
Nasdaq 2,158.82 +13.95 (+0.65%)
S&P 500 1,227.51 +6.38 (+0.52%)
10-Yr Bond 4.248 +0.25 (+0.59%)

NYSE Volume 42,550,000
Nasdaq Volume 64,578,000

[UpInArms]

27. Citigroup blames ‘tough’ markets for poor figures

:nopity:

http://business.timesonline.co.uk/article/0,,9063-1699213,00.html

CITIGROUP, America’s largest bank, has blamed “challenging” bond markets and an interest-rate squeeze for a disappointing set of second-quarter figures that missed Wall Street estimates by more than 5 cents a share.

Charles “Chuck” Prince, chief executive, said yesterday that the trading period in the capital markets was “one of the worst we have seen in years”. He blamed rising interest rates and falling long-term yields for a 28 per cent slump in fixed-income trading revenues. He said that the markets were particularly tough in April and May, after Standard & Poor’s cut the credit ratings on both General Motors and Ford to junk status. The resulting turmoil in capital markets had dampened client activity, he said.

Trading revenues from interest-rate products fell 55 per cent, while revenues from credit derivatives fell 57 per cent. In total, revenues from the bank’s debt and derivatives trading operations were $710 million (£405 million) lower against $1.8 billion last time. The bank was wrong-footed by a shift in borrowing costs that saw a dramatic reduction in the gap between short-term and long-term interest rates.

Revenues at Citigroup’s bond arranging unit declined 6 per cent. The unit is struggling to move past last August’s controversial trade in the European government bond markets.

...more...

[UpInArms]

28. Re-Designing GM (hahahahahaha)

A top Wall Streeter to advise GM execs

http://www.freep.com/money/autonews/gm19e_20050719.htm

Yes, in fact, Rick Wagoner can handle the truth -- and GM just hired a top analyst away from Wall Street to ensure that he gets it.

General Motors Corp. announced Monday it has hired Stephen Girsky from brokerage Morgan Stanley as a senior adviser to CEO Wagoner and Chief Financial Officer John Devine.

Girsky, 43, is a highly regarded analyst GM hired for his outside perspective, said spokeswoman Toni Simonetti, who disputed the notion that Wagoner needs input from outside GM's hierarchy.

"The candidness of perspective is not the issue," she said. "But the diversity of perspectives is exactly the point."

Still, it can be difficult for people who have spent their whole career in one company to give the CEO some brutal truth, said Brett Hoselton, a Cleveland-based analyst at KeyBanc Capital Markets who previously worked at GM and at Ford Motor Co.

<snip>

Wagoner is known for seeking feedback from outside the GM information chain, probing reporters, analysts and dealers for helpful criticism that might be missed by GM insiders.

...more...

Here's some "outside advice": Make a better more fuel efficient vehicle, you stupid freak.

[54anickel]

32. FEDS ARE JUST LIKE BERNIE

free subscription or try www.bugmenot.com

http://www.nypost.com/business/50347.htm

snip>

Last week's consumer price index was downright Ebbers-like.

The Labor Department said — presumably without a single bureaucrat snickering — that consumer prices didn't budge in June. And that followed a decline — yep, I said a decline — of 0.1 percent in May.

snip>

For instance, my friends John Williams of ShadowStats.com and Bill King of Ramsey King Securities point out that the American Auto Association calculates that gasoline prices have risen 21.5 percent since this same time last year.

But the government swears gas prices are only 6.9 percent higher over the year and actually down 1.2 percent for the month.

That little trick alone saved the CPI from being 0.53 percentage points higher, and it kept the politically sensitive gross domestic product from being lower by an equal amount.

more...

[UpInArms]

39. the smell test

:rofl:

Hold your noses because those numbers just don't pass the smell test.

Housing prices are soaring, gas stations can't get the higher prices posted fast enough, and education costs are jumping faster than IQs are falling — and the government actually wants us to believe that inflation doesn't exist.

I've explained extensively in the past how the government makes inflation disappear through statistical gimmicks. But the torture inflicted upon last week's CPI was cruel if all too usual.

Thanks, 54anickel!

I needed to laugh a bit this morning - everything else has just hit my cynical buttons too hard.

:hi:

[54anickel]

42. I like the sound of the new economic term --- Bernie-ing

If you receive Social Security or an inflation-adjusted cost of living increase, the government is Bernie-ing you

[UpInArms]

41. Higher Housing Prices equals lower inflation

Housing surge's surprising impact on Inflation

http://www.marketwatch.com/news/story.asp?guid=%7BE202A003%2D65E2%2D445C%2DAAA0%2D68510C5712B6%7D&siteid=mktw

HEMPSTEAD, N.Y. (MarketWatch) -- The faster the increase in home prices, the slower the rise in the consumer price index.

That's right, the CPI is being held down by the method that the Bureau of Labor Statistics uses to calculate the housing component of this key index.

Rather than include the price of a new or an existing home the way it includes prices of cars, computers and clothing, the government instead uses what it calls the rental equivalent. And nowadays, the more housing prices go up, the more rents hold steady or decline.

Since this sector makes up almost a quarter of the CPI, its trend has a major influence on the overall measure of what many would call the cost of living. Rather than accelerating in response to the jump in home prices, the rise in the CPI has actually moderated.

If this does not make sense to you, let me explain.

...more...

[UpInArms]

33. Lucent's quarterly profit falls 4%

http://www.marketwatch.com/news/story.asp?guid=%7BD27A78A0%2D7A4A%2D4520%2D86B8%2D0A3243214DBA%7D&siteid=mktw

WASHINGTON (MarketWatch) -- Lucent Technologies Inc. on Tuesday posted a 4% decline in third-quarter profit, as costs rose and sales of traditional networking equipment fell sharply.

In the period ended June 30, the Murray Hill, N.J.-based company said it earned $372 million, or 7 cents a share, down from $387 million, or 8 cents a share, a year ago.

Revenue totaled $2.34 billion - the same as in the prior quarter - but it was up 6.8% from $2.19 billion in the comparable 2004 period. Most of the year-over-year increase derived from higher revenue in the U.S. Sales in overseas markets were weaker.

...more...

[UpInArms]

34. RadioShack quarterly profit slides

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-19T135928Z_01_N19336669_RTRIDST_0_RETAIL-RADIOSHACK-EARNS-UPDATE-1.XML

NEW YORK, July 19 (Reuters) - RadioShack Corp. (RSH.N: Quote, Profile, Research), the No. 3 U.S. electronics retailer, on Tuesday reported a lower quarterly profit due to sluggish wireless sales and rising expenses.

The company's profit shrank to $52.3 million, or 33 cents a share, in the quarter ended June 30, from $68.3 million, or 42 cents a share, a year earlier. According to Reuters Estimates, analysts had expected a profit of 34 cents a share.

Total sales in the quarter rose 4 percent to $1.09 billion from the year-ago period, but sales at stores open at least a year fell 1 percent.

...more...

[UpInArms]

36. Temporary Jobs are the winner - permanent jobs are losers

Manpower earnings beat Wall St views; shares jump

http://today.reuters.com/investing/financeArticle.aspx?type=marketsNews&storyID=2005-07-19T140523Z_01_N19318697_RTRIDST_0_SERVICES-MANPOWER-EARNS-UPDATE-2.XML

NEW YORK, July 19 (Reuters) - Manpower Inc. (MAN.N: Quote, Profile, Research), the world's No. 2 staffing company, on Tuesday said second-quarter profit rose more than Wall Street expected, sending its shares up more than 10 percent in early trading.

Helped by better operating margins and strong foreign currencies, the company posted earnings of $62.5 million, or 70 cents a share, compared with $53.1 million, or 56 cents a share, a year earlier.

Analysts on average were expecting 64 cents a share, according to Reuters Estimates, and some had lowered their forecasts over the last few weeks as they expected a soft market in Europe and relatively flat economic growth in North America.

"For the most part, what we're hearing from the customers is things aren't bad," Manpower Chief Executive Jeff Joerres said in a conference call with investors on Tuesday. "What they are is just very measured."

...more...

[54anickel]

37. China's Currency May Float a Little

http://www.washingtonpost.com/wp-dyn/content/article/2005/07/18/AR2005071801597.html

snip>

But most analysts also said the move would almost certainly be too small to assuage those demanding change. Congressional critics claim China's currency would need to rise by as much as 40 percent against the dollar to reach a fair level. Most economists assume China will merely widen the band within which it allows the yuan to trade, while abandoning a fixed value to the dollar in favor of a basket of currencies that would include the euro and the Japanese yen.

"China may widen the trading band but it will be a very small widening, maybe 3 percent," said He Fan, an economist at the Chinese Academy of Social Sciences in Beijing. "It's not likely for China to go for a big adjustment at one time."

snip>

But many economists assert that even if such a move did cool tensions with the Bush administration, it would not carve into China's $162 billion trade surplus with the United States. Most economists say the value of the yuan bears little connection to U.S. jobs and wages because much of China's export growth is in goods that have not been made in large quantities in the United States for years, such as textiles, toys, furniture and home appliances.

"Revaluing the currency would hardly make a dent in U.S. economic trends," said Jonathan Anderson, chief economist at UBS Investment Research in Hong Kong. "Does anyone in the U.S. really care whether Chinese manufacturing workers make $100 or $120 per month?"

For China, however, a large move could be fraught with risk. Even if a higher-valued currency didn't help U.S. manufacturers, it could make China's goods less competitive than those produced in other low-cost countries such as the Philippines and Mexico. China's surging exports have been a key source of factory labor in a country that needs to create tens of millions of new jobs for farmers whose incomes are falling.

more...

[UpInArms]

38. 10:17 EST numbers and blather

Dow 10,652.45 +77.46 (+0.73%)
Nasdaq 2,163.03 +18.16 (+0.85%)
S&P 500 1,227.68 +6.55 (+0.54%)
10-Yr Bond 4.205 -0.18 (-0.43%)

NYSE Volume 368,211,000
Nasdaq Volume 321,981,000

10:00AM: Equities remain on the offensive, as virtually every sector trades in positive territory... Materials has paced the way higher, getting a huge boost from International Paper's (IP 33.88 +3.22) planned restructuring... Technology has also been strong as better than expected Q2 earnings from IBM (IBM 84.25 +2.44) reinforce expectations of strong reports from Intel (INTC 28.44 +0.21) and Yahoo (YHOO 37.26 +0.68) after the close... Financial has also provided leadership to the upside, benefiting from a 20% jump in revenues which led to strong Q2 earnings at Merrill Lynch (MER 58.08 +1.41)...

Consumer Staples, however, has recently turned negative, led lower amid disappointing Q3 and FY05 guidance from Avon Products (AVP 32.80 -3.80)... DJTA +0.1, DJUA +0.1, DOT +1.1, Nasdaq 100 +0.6, Russell 2000 +0.6, SOX +0.7, S&P Midcap 400 +0.3, XOI +0.1, NYSE Adv/Dec 1798/741, Nasdaq Adv/Dec 1624/816

9:40AM: Stocks open sharply higher as a plethora of upbeat earnings reports offer investors further evidence that yesterday's disappointment from Citigroup may have been an aberration... Providing an initial boost has been IBM (IBM 84.94 +3.13), which posted better than expected Q2 earnings last night and said estimates for the second half of the year "remain reasonable"...

Of the 21 S&P constituents out with results this morning, 14 (i.e. MER, JNJ, F) have beaten forecasts compared to just three misses, lending further credence that Q2 earnings growth may check in better than analysts' initial estimates of 7-8%...

[54anickel]

40. U.S. accountant shortage drives salaries up sharply (deja vu?)

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-07-18T194319Z_01_N18267873_RTRIDST_0_PICKS-SERVICES-ACCOUNTANTS-JOBS-DC.XML

Recruiters say the United States is facing a shortage of accountants, which is pushing annual salaries up sharply -- up over 30 percent in the past three years for an accountant with five years of experience at the top four U.S. public accounting firms.

Three years into a regime of tough accounting and corporate governance rules, American businesses, including large accounting firms, are scrambling to recruit new accountants, struggling to retain their staff, and digging much deeper into their pockets to come up with attractive compensation packages.

"The demand is increasing dramatically with Sarbanes-Oxley and all the requirements and the supply is decreasing ... you're really seeing a mild panic," said Neil Lebovits, a certified public accountant, or CPA, who also is president and chief operating officer of Ajilon Finance, a financial services staffing unit of Adecco SA (ADEN.VX: Quote, Profile, Research) (ADO.N: Quote, Profile, Research), the world's largest employment company.

snip>

On-the-job stress is contributing to the accountant shortage. Long hours and grueling audits have taken their toll on accountants this past year and many are simply burned out, recruiters say.

About one in five U.S. accountants have quit recently, Lebovits said.

more...

[UpInArms]

43. Oil edges up as funds rebuild positions

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-07-19T135707Z_01_L19461257_RTRIDST_0_BUSINESS-MARKETS-OIL-DC.XML

LONDON (Reuters) - Oil prices rose on Tuesday as investment funds bought crude following a dip on Monday when Hurricane Emily weakened.

An expected fall in U.S. crude stocks in government data to be released on Wednesday also supported prices.

U.S. light, sweet crude oil futures rose 38 cents to $57.70 a barrel after a fall of 77 cents on Monday.

London Brent crude rose 38 cents to $57.37 a barrel.

"After the correction when we heard Emily would have little effect on Gulf output, some funds thought it was a good buying level to rebuild positions," said Frederic Lasserre of SG Commodities.

Investment funds with the long term view that oil markets will become increasingly tight have frequently bought this year when the price has dipped. U.S. light crude is over $4 below the record high of $62.10 hit on July 7.

...more...

[54anickel]

64. Oil won't kill growth this year, Fed says

Families affected, but not overall economy, Bush economic adviser says

http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20050719/BIZ/507190330/1005

WASHINGTON — High oil prices could crimp — but not derail — economic growth this year, Federal Reserve Chairman Alan Greenspan suggests.

Greenspan, in a letter to lawmakers released Monday, said the rise in oil prices since the end of 2003 probably shaved economic growth by around three-fourths of a percentage point this year after having reduced growth by about one-half point last year.

The economy grew by 4.4 percent last year, the strongest performance since 1999. Private economists believe this year could clock in around 3.5 percent, a slower but still healthy pace.
Referring to the drag from the higher oil prices, Greenspan said, "Aside from these 'headwinds,' the U.S. economy seems to be coping pretty well with the run-up in crude oil prices."

Greenspan's thoughts on oil were contained in a letter to Congress' Joint Economic Committee. The letter provided Greenspan's written responses to questions that were submitted to him after his June 9 appearance before the panel.

more...

Sheesh, was that a green light?

[54anickel]

46. Homeowners place faith in 'exotic' mortgages (UGH!)

http://www.msnbc.msn.com/id/8574006/

It’s called the Stress Free Mortgage. The interest rate is advertised as a rock-bottom 0.99 percent. Better still, initial monthly payments are almost a dream, nearly half what a traditional mortgage holder would pay. With the Stress Free Mortgage, offered by Great Financial Mortgage in Fullerton, Calif., a buyer looking at a $310,000 loan would pay only about $995 a month. For the first year.

The stress could come later.

Minimum payments rise each year, so in five years the minimum is $1,330 a month. Even at that, borrowers have not even begun paying for the house. In fact, they haven’t even paid all the interest they owe the bank. After five years of rising payments, the mortgage balance is actually higher, closer to $329,000.

At that point, the real stress begins. When the loan payment is reset, because of the rising outstanding balance, the new minimum payment is $2,015 — more than double the initial payment. And that assumes interest rates are flat. Were interest rates to rise slowly – say from the current 5.5 percent to 6.4 percent — the new minimum monthly payment would be a knee-buckling $2,243.

Welcome to the high-stakes world of the negative-amortization loan. With skyrocketing home prices in America’s hottest markets, lenders have become increasingly creative in their efforts to stretch consumers into pricier homes.

snip>
Offered 'alongside Viagra ads'
Few financial experts or even mortgage brokers see these loans as a sound borrowing technique for most consumers. Yet according to UBS analyst David Liu, 40 percent of mortgages over $360,000 that have closed so far this year are “neg-am” loans. And the Internet is crawling with all manner of come-ons, offering products with names like “Name Your Payment” loans.

more...

[UpInArms]

51. Welcome to the 80s!

The return to the bad old days of RayGun stupidity!

[UpInArms]

49. Health-Care Provider Announces Layoffs

http://www.wjla.com/news/stories/0705/244634.html

Rockville, Md. (AP) - A regional health-care provider has announced it will lay off some of its 2,700 employees.

A company spokeswoman says Mid Atlantic Medical Services will lay off one percent of its total work force.


MAMSI offers health-care coverage in Maryland and Virginia. Its main office is in Rockville, with satellite offices throughout the region. It is owned by UnitedHealthcare.

According to the Frederick County Office of Economic Development, MAMSI employed 1,600 people in the county last year. The company already cut 12 managerial positions in Frederick in April.

...more...

[UpInArms]

50. Union Pension Fund challenges Morgan Stanley CEO payouts

http://www.marketwatch.com/news/story.asp?guid=%7B9E37DBCD%2DC182%2D40B8%2D9B62%2D78D161260AF4%7D&siteid=mktw

NEW YORK (MarketWatch) -- A union pension fund on Tuesday said it is suing Morgan Stanley over the company's performance and hundreds of millions in payouts to former executives.

The suit, filed by William Lerach on behalf of the Central Laborers Pension Fund, seeks damages for Morgan Stanley's (MWD: news, chart, profile) court defeat in which investor Ron Perelman was awarded $1.5 billion.

The lawsuit was filed Tuesday in U.S. District Court for the Southern District of New York, according to a spokeswoman. She declined to say how much of Morgan Stanley the pension fund owns.

Five days ago, the American Federation of State, County and Municipal Employees, whose pension plan owns a 4% stake in Morgan Stanley, sent a letter to compensation committee chairman Miles Marsh.

<snip>

Former chief executive Philip Purcell will receive about $44 million in fiscal 2005 and 2006 combined, depending on the company's earning results those years, according to a regulatory filing. Purcell also has been granted equity awards of $48.1 million, $3.2 million in employee stock plans and $11 million in accrued pension entitlements.

Former president Stephen Crawford was entitled to receive his full compensation of roughly $16 million per year for each of the years 2005 and 2006, for a total of about $32 million, if he resigned by Aug. 3. Crawford resigned on July 11.

...more...

[UpInArms]

53. State Cuts in Medicaid taking toll on Corporate Profits

Amerigroup cuts 2005 outlook, issues weak forecast

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-19T144321Z_01_N19340734_RTRIDST_0_HEALTH-AMERIGROUP-UPDATE-1.XML

CHICAGO, July 19 (Reuters) - Amerigroup Corp. (AGP.N: Quote, Profile, Research), which sells Medicaid health insurance, on Tuesday cut its 2005 earnings outlook, blaming medical costs and expenses for entering new markets, pushing its shares down 6 percent.

Shares of other health maintenance organizations that work with Medicaid, the government health insurance program for the needy, also fell.

<snip>

Investors have been bullish on Medicaid HMOs as more states turn to private health plans to help contain rising medical costs.

But Amerigroup said it faces challenges dealing with medical costs.

Looking to 2005, it cited cost pressures in New Jersey and Florida and higher use of services in Texas. It also blamed the cut in outlook in part on Illinois' decision to cut spending for Medicaid.

...more...

[loudsue]

69. Whaaa. Quit whining you scum buckets!

YOU GUYS are in a position to help "buy" congresscritters, just like the rest of the scum buckets!

When $$ is NOT in the hands of the citizens, there's no money to be spent! Dontcha get it?

:kick::kick::kick:

[54anickel]

75. So, is this somehow tied to the crap Bushco pushed through? If so,

looks it's not working out the way they planned. Only folks with high costs signing up? Or is this not related to the Medicare reform fiasco? :shrug:

[UpInArms]

55. Investment firms Bernie-ing the little guy

Two ex-AIM executives settle market timing case

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-19T142039Z_01_N18289573_RTRIDST_0_FINANCIAL-AIMMARKETTIMING-SEC-UPDATE-1-CORRECTED.XML

WASHINGTON, July 18 (Reuters) - A former executive of AIM Advisors Inc. and a former executive at AIM Distributors Inc. agreed to settle accusations that they allowed market timing trades in its mutual funds and will pay a total of $225,000 in civil penalties, regulators said on Monday.

The U.S. Securities and Exchange Commission had accused former AIM Distributors President and CEO Michael Cemo and former AIM Advisors Chief Investment Officer Edgar Larsen of authorizing 10 market timing agreements in which favored investors were allowed to make "excessive exchanges and redemptions in select AIM Funds portfolios," an SEC statement said.

Last September, Amvescap Plc (AVZ.L: Quote, Profile, Research), the parent of Denver, Colorado-based AIM Advisors Inc. and Invesco Funds Group Inc., agreed to pay $450 million to settle SEC civil market timing charges pending against the companies.

Cemo will pay $125,000 and agreed to a nine-month suspension from working with a registered investment firm while Larsen will pay $100,000 with a six-month suspension, the SEC said.

...more...

Economic Terrorists Strike Again!

[54anickel]

57. CAFTA and Dietary Supplements

http://www.house.gov/paul/tst/tst2005/tst071805.htm

snip>

Unquestionably there has been a slow but sustained effort to regulate dietary supplements on an international level. WTO and CAFTA are part of this effort. Passage of CAFTA does not mean your supplements will be outlawed immediately, but it will mean that another international trade body will have a say over whether American supplement regulations meet international standards. And make no mistake about it, those international standards are moving steadily toward the Codex regime and its draconian restrictions on health freedom. So the question is this: Does CAFTA, with its link to Codex, make it more likely or less likely that someday you will need a doctor’s prescription to buy even simple supplements like Vitamin C? The answer is clear. CAFTA means less freedom for you, and more control for bureaucrats who do not answer to American voters.

Pharmaceutical companies have spent billions of dollars trying to get Washington to regulate your dietary supplements like European governments do. So far, that effort has failed in America, in part because of a 1994 law called the Dietary Supplement Health and Education Act. Big Pharma and the medical establishment hate this Act, because it allows consumers some measure of freedom to buy the supplements they want. Americans like this freedom, however-- especially the health conscious Baby Boomers.

This is why the drug companies support WTO and CAFTA. They see international trade agreements as a way to do an end run around American law and restrict supplements through international regulations.

The largely government-run health care establishment, including the nominally private pharmaceutical companies, want government to control the dietary supplement industry-- so that only they can manufacture and distribute supplements. If that happens, as it already is happening in Europe, the supplements you now take will be available only by prescription and at a much higher cost-- if they are available at all. This alone is sufficient reason for Congress to oppose the unconstitutional, sovereignty-destroying CAFTA bill.

:eyes: Gov't by the corporations, for the corporations I suppose.

[54anickel]

59. Bush negative on some GOP pension plans

http://news.webindia123.com/news/showdetails.asp?id=98742&n_date=20050719&cat=Business

The White House is unlikely to support Social Security reform proposals that create private accounts but don't address long-term funding woes.

Ben Bernanke, the new chairman of the White House Council of Economic Advisers, said President Bush would only support a reform proposal that addressed the U.S. pension system's solvency, as well as creating individual investment accounts, the Financial Times reported Tuesday.

The legislative process is a long and complicated one, and we will be working with Congress to see what comes out. But we would want to see both of those elements in a final program, he said.

The comments dim prospects for a measure, pushed by several Republicans, to use current Social Security surpluses to fund private accounts, without accompanying benefit cuts or tax increases to the system.

[UpInArms]

60. PIEHOLE ALERT

12:05pm 07/19/05 BUSH SAYS HE'LL LET US KNOW WHEN SC NOMINATION IS READY

[UpInArms]

65. GACK! There's more nonsense spewing

12:13pm 07/19/05 BUSH: U.S.-CHINA RELATIONSHIP IS COMPLEX, GOOD

[54anickel]

73. Oh yeah, BeelzeBush LOVES it when folks shake their nukes at us. Affirms

his "war president" delusion. :eyes:

http://www.wpherald.com/storyview.php?StoryID=20050716-075730-5828r

[54anickel]

61. Bernanke: I won't advise on Fed pick

http://money.cnn.com/2005/07/19/news/economy/bush_bernanke.reut/

WASHINGTON (Reuters) - White House economist Ben Bernanke said Monday he will not be involved in advising President George W. Bush on whom he should pick to succeed Federal Reserve Chairman Alan Greenspan.

The comment by Bernanke, chairman of Bush's Council of Economic Advisers, bolsters the widely held view in financial markets that he is on the president's short list of candidates to succeed Greenspan, 79, who is expected to depart the Fed next January after 18 years in the post.

Former White House economist Glenn Hubbard, now at Columbia University, and Harvard University economist Martin Feldstein are also thought to be in the running for the job.

"I don't expect to be involved in the discussion of the chairmanship," Bernanke, a former Fed governor, told a roundtable with journalists.

Bernanke said he will provide advice on candidates for the two open seats on the Fed's Board of Governors "if I am asked my views on particular individuals or characteristics." But he said the decision itself on those two positions would be made elsewhere in the White House.

more...

Oh great, Chopper Ben taking over the controls

[UpInArms]

63. Will Chopper Ben pull a Cheney?

and declare that of all the candidates only he fits the bill?

:puke:

[54anickel]

71. To quote Tigger, "I'm the only one!" But Tigger was not a delusion,

egotistical maniac.

[ozymandius]

68. Surely the fool has an opinion.

And I'm sure the fool has an opinion with an agenda.

[UpInArms]

62. 12:14 EST numbers and blather (luster fading - revealing brass ring)

Dow 10,624.12 +49.13 (+0.46%)
Nasdaq 2,164.23 +19.36 (+0.90%)
S&P 500 1,225.37 +4.24 (+0.35%)
10-Yr Bond 4.208 -0.15 (-0.36%)

NYSE Volume 921,248,000
Nasdaq Volume 761,068,000

12:00PM: Market holding onto widespread gains midday, as positive earnings from several blue chips provide further validation that EPS growth remains solid... Aside from IBM's (IBM 84.35 +2.54) stronger than expected quarter helping stocks rebound from yesterday's pullback, 14 of the 21 S&P 500 components posting results this morning have also beaten analysts' forecasts, has lent additional buying support...

Despite a strengthening greenback making dollar-denominated commodities less attractive, investors have taken a bullish cue a planned restructuring at International Paper (IP 33.88 +3.22), which has helped Materials pace sector gains... Technology has also surged as IBM's strong report reinforces expectations of strong reports after the bell from Intel Corp (INTC 28.64 +0.41), which has hit a new 52-week high, as well as Motorola (MOT 19.64 +0.18) and Yahoo (YHOO 37.53 +0.95)... Financial has found relief from Merrill Lynch (MER 57.99 +1.32), as better than expected Q2 earnings of $1.14 per share amid strong 20% revenue growth have helped reverse the negative sentiment underpinned by Citigroup's (C 44.59 -0.41) disappointing results...

Modest weakness in bonds, sparked by short covering ahead of upcoming Greenspan commentary, has perhaps also improved sentiment, as benchmark yields on the 10-year note (+3/32) have fallen to 4.20%... Consumer Discretionary has posted a gain, benefiting from continued momentum in retail... Modest strength in Homebuilding, following respectable housing data, has also provided some support... June housing starts were unchanged at a strong 2.004 mln (consensus 2.050 mln) while building permits rose 2.4% to 2.111 mln (consensus 2.085 mln), topping starts for a fourth month...

[UpInArms]

66. Mellon 2nd-Qtr net plunges

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38552.5107186343-838896410&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

BOSTON (MarketWatch) - Mellon Financial Corp., a Pittsburgh-based financial services firm, Tuesday said second-quarter net income totaled $125 million, or 30 cents a share, versus $176 million, or 42 cents, in the year-earlier quarter. Shares of Mellon (MEL) fell 27 cents to $29.78 in late morning trade Tuesday.

Awwwww - that's so sad - since they were one of the firms that was supposed to profit by being an approved vendor those those misappropriated Social Security funds from their friend, GWB.

[54anickel]

67. Mattel profits hurt by Barbie sales

http://money.cnn.com/2005/07/18/news/fortune500/mattel.reut/

NEW YORK (Reuters) - No. 1 toy maker Mattel Inc. said Monday that slipping Barbie sales pulled down second-quarter earnings and that the rest of the year would be challenging.

Mattel (up $0.31 to $19.45, Research), whose brands also include American Girl dolls and Rescue Heroes figures, posted profit of $18.9 million, or 5 cents per share, down from $23.5 million, or 6 cents per share, a year earlier.

With a tax expense for repatriating foreign earnings, the company posted a loss of $94 million, or 23 cents per share.

Analysts, on average, had been expecting earnings of 7 cents per share, according to Reuters Estimates.

more...

[ozymandius]

70. 12:44 numbers and blather

Dow 10,631.43 +56.44 (+0.53%)
Nasdaq 2,165.16 +20.29 (+0.95%)
S&P 500 1,225.93 +4.80 (+0.39%)
10-Yr Bond 41.96 -0.27 (-0.64%)
NYSE Volume 1,021,791,000
Nasdaq Volume 837,486,000

12:30PM: Little changed within the last 30 minutes as the major averages trade in roughly the same ranges...Recently spiking higher and turning positive, however, has been Mellon Financial (MEL 30.55 +0.50), which just reported better than expected Q2 earnings of $0.49 a share... While not a very influential component within the S&P Financial sector, the recent reversal in MEL shares, which were off more than 1.0% ahead of its quarterly results, has helped the Bank Sector Index (BKX 100.72 -0.03) pare early losses and inch closer to the unchanged mark... NYSE Adv/Dec 2008/1112, Nasdaq Adv/Dec 1837/1070

12:00PM: Market holding onto widespread gains midday, as positive earnings from several blue chips provide further validation that EPS growth remains solid... Aside from IBM's (IBM 84.35 +2.54) stronger than expected Q2 report, lifted by strong demand for its services, helping stocks rebound from yesterday's pullback, 14 of the 20 S&P 500 components posting results this morning have also beaten analysts' forecasts, has lent additional buying support...

Despite a strengthening greenback making dollar-denominated commodities less attractive, investors have taken a bullish cue a planned restructuring at International Paper (IP 33.88 +3.22), which has helped Materials pace sector gains... Technology has also surged as IBM's strong report reinforces expectations of strong reports after the bell from Intel Corp (INTC 28.64 +0.41), which has hit a new 52-week high, as well as Motorola (MOT 19.64 +0.18) and Yahoo (YHOO 37.53 +0.95)...

[54anickel]

72. New money flocks to VC funds

Investors' $6.1 billion in 2nd quarter marks 88% increase from year ago

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2005/07/19/BUG3LDPTQ21.DTL&type=business

snip>

"You'll see a lot of earlier-stage companies being funded over the next six months to a year," said Mark Heesen, president of the National Venture Capital Association in Arlington, Va. "At the beginning of a fund, you invest in earlier-stage companies which you want to shepherd through the next couple of years as they move through the food chain and get bigger and bigger."

Heesen predicted that more money will go into such energy sectors as clean technologies, efficient energy and fuel cells, as well as into consumer technology products in the wake of wildly popular devices like Apple's iPod.

snip>

The amount of money flowing into buyout (purchase) and mezzanine (just before going public) funds also increased, with $22.1 billion raised by 38 funds. That was 32.5 percent more than last year's second quarter and 63.7 percent more than the first quarter of this year.

The combined amount invested in venture capital, buyout and mezzanine funds was $28.2 billion, the best quarterly showing since the second quarter of 2001.

About half of the money invested comes from public and private pension funds. The rest comes from banks, insurance companies, colleges and endowments.

more...

[ozymandius]

76. 1:42 numbers and blather

Dow 10,639.16 +64.17 (+0.61%)
Nasdaq 2,169.19 +24.32 (+1.13%)
S&P 500 1,227.51 +6.38 (+0.52%)
10-Yr Bond 4.187 -0.36 (-0.85%)
NYSE Volume 1,218,891,000
Nasdaq Volume 1,001,186,000

1:00PM: Renewed buying interest in stocks, perhaps buoyed by a rally in bonds, lifts the indices to their best levels of the afternoon... The benchmark 10-year note is now up 11 ticks, knocking benchmark yields down to 4.17%, as traders continue square positions in advance of the week's headliner event - Fed Chief Greenspan's general commentaryNYSE Adv/Dec 2043/1087, Nasdaq Adv/Dec 1879/1039

[54anickel]

77. The Great Debt

http://www.321gold.com/editorials/fritsch/fritsch071905.html

The next financial horror to hit the world probably won't go down in history as The Great Depression Part II, but it very well could be called The Great Debt. Oh we may have a depression, and we may experience both inflation and deflation, but the memorable thing about the crisis will be the debt. Government and private debt piled so high it defies comprehension. How high will it go? That's impossible to say. We are living on borrowed time - - time generously donated by foreigners who for some unfathomable reason are willing to continue purchasing our worthless IOUs.

Just how bad is it? As of July 7, 2005 the public debt as reported by the government 1 is $7,838,410,800,630.51. This does not include private debts such as mortgages, home equity loans, car loans, "personal" loans, credit card accounts, layaway plans or any other type of personal debt. Nor does this number include corporate debt, or even your state or local government debts - - it is purely a measure of how much debt the federal government alone has taken on. Considering that this total has increased by more than $242 billion in just the first 7 months of this calendar year, I think it is safe to assume we will crack $8 trillion by the end of the year. With a population of 300 million here in the United States, this means that every man, woman and child in the country owes approximately $26,600. You owe twenty-six thousand dollars. So does your spouse. If you are married with three children, your combined household debt, courtesy of runaway government officials, is about $133,000. But let's stick with $26,600 for now - - it's easier to wrap your head around. Let's say you owe $26,600 and there is no such thing as interest - - the amount owed remains static. If you decide to make payments of $100/month, it will take you roughly 22 years to pay it off. Even if you pour money on this debt at the rate of $1000/month, it will still take you more than two years to pay it off. Can you afford a $100/month increase on your taxes? How about $1000?

Perhaps you are thinking that this does not apply to you - - after all, you didn't spend the money, so why should you have to pay it back, right? Wrong. The government has spent this money in your name, and in the name of your children. The only source of income the government has is taxes - - therefore, if the government needs to pay a debt, it will raise your taxes. But hey, they'll only raise taxes for the rich, right? It still won't be enough - - the combined net worth of the 25 richest Americans as of September 24, 2004 was roughly $358 billion 2. This means that if the 25 richest people in the richest country in the world cashed in everything they own and donated it towards the federal debt, it would pay off 4.57% of what we owe.

Let us not forget about all the other debts we face. We have more than $2.13 trillion in outstanding consumer credit, such as car loans and credit card accounts 3. We have another $2.29 trillion in mortgage debt 4. If we take a wild guess that the combined state debt comes to a mere third of the federal debt, we have an additional $2.65 trillion to account for. This brings the grand total of all debt to a staggering 15 trillion dollars. That's $50 thousand owed by each and every American. At $100/month it would take you more than 40 years to pay off.

Some may argue that the burden of debt does not lie solely on individual taxpayers. After all, businesses pay taxes as well. However, those taxes come from the sale of goods and services. Who do you think purchases those goods and services? The money comes out of the individual citizens' pocket one way or another. Corporations aren't going to provide debt relief; in fact, they're a huge contributor to the problem. General Motors alone has almost $300 billion in debt and less than $16 billion in cash 5. Sure, they'll tell you that they have a "market value" of almost $300 billion, but this essentially means they have a net value of zero. This precarious situation can be found in many "blue-chip" companies as well as on a personal level. If you, as an individual, save $10,000, yet you accumulate $10,000 in debt of any type, then you have nothing saved - - your debt will consume your savings. Because debt incurs interest (probably at a higher rate than your savings) you will constantly be chasing the balance. While you're pulling in a slim 2-3% in a savings account, your credit cards likely are hitting you up for double-digit interest. In this type of race you cannot win.

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[UpInArms]

79. (3,000) Job Cuts Expected At PNC

http://www.wpxi.com/money/4741764/detail.html

PITTSBURGH -- Job cuts could be on the way for workers at PNC Financial Services Group.

According to published reports, the cuts are designed to slash overhead and increase revenue.

The company is also expected to eliminate 3,000 jobs nationwide.

This is part of a comprehensive review of its businesses.

The company employs more than 7,000 people in western Pennsylvania and more than 24,000 workers across 36 states.

...more...

[ozymandius]

82. I misread. Thought it said "(3,000) job cuts at PNAC".

It got me a little excited there for a moment.

[54anickel]

81. Greenspan Opens in New Haven to Negative Reviews

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_baum&sid=a4rGTfRAi6NI

July 19 (Bloomberg) -- It's not often we get a sneak preview of Federal Reserve Chairman Alan Greenspan's semi-annual monetary policy report to Congress.

Yesterday, we did. More transparency? :shrug:

big snip>


Double Bubblemeister

While the guidance ``was not aimed at affecting asset prices directly, it may nevertheless affect market conditions through changes in the availability of credit,'' Greenspan said.

Greenspan is obviously sensitive to accusations of presiding over two asset bubbles when most Fed chairman never get to experience one.

Still, he seems determined to take his chances that the pop, if it happens, won't be big. And he's not going to let some market-based leading indicator like the yield spread stay him from his chosen course.

[ozymandius]

83. At the close

Dow 10,646.56 +71.57 (+0.68%)
Nasdaq 2,173.18 +28.31 (+1.32%)
S&P 500 1,229.35 +8.22 (+0.67%)
10-Yr Bond 4.189 -0.34 (-0.81%)
NYSE Volume 2,025,512,000
Nasdaq Volume 1,632,465,000

blather to come

[ozymandius]

84. In lieu of the usual blather -

They are taking too stinking long to post our daily blather roundup.

Dow Ends Up 72 on IBM, Merrill Earnings

NEW YORK (AP) -- Wall Street regained its composure Tuesday, marching higher after companies including Merrill Lynch & Co. and International Business Machines Corp. beat earnings expectations.

The Nasdaq composite index hit a high for the year as the market anticipated after-the-close earnings reports from Yahoo Inc. and Juniper Networks Inc. But it was the earnings reports from IBM and Merrill that reassured investors Tuesday after disappointing earnings from Citigroup Inc. on Monday halted three weeks of stock market gains.

-cut-

IBM's earnings helped get the market started this morning," said Steven Goldman, chief market strategist, Weeden & Co. in Greenwich, Conn.

Stocks maintained their momentum on the expectation of strong earnings reports by Intel Corp., Amgen Inc. and Motorola Inc., which reported after the close of regular trading.

You can read more about the "tired market" here.

[ozymandius]

85. Oil Prices Fall on Easing Supply Concerns

VIENNA, Austria (AP) -- Oil prices drifted higher Tuesday despite only limited supply disruptions caused by Hurricane Emily in the Gulf of Mexico.

Analysts said traders appeared comfortable with price levels that are relatively high, given the potential for storm-related output losses throughout the summer.

-cut-

Light, sweet crude for August delivery rose 14 cents to settle at $57.46 a barrel on the New York Mercantile Exchange.

Gasoline futures rose 2.62 cents to $1.6735 per gallon on Nymex, where heating oil declined by less than two-tenths of a penny to $1.6301 per gallon.

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