STOCK MARKET WATCH, Monday 25 July

[ozymandius]

Monday July 25, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 180 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 217 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 281 DAYS
DAYS SINCE ENRON COLLAPSE = 1338
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 22, 2005

Dow... 10,651.18 +23.41 (+0.22%)
Nasdaq... 2,179.74 UNCH (UNCH)
S&P 500... 1,233.68 +6.64 (+0.54%)
10-Yr Bond... 4.22% -0.06 (-1.38%)
Gold future... 425.00 -0.70 (-0.16%)

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 Jim & Chris Puplava

UNLOVED AND UNDEROWNED


INTRODUCTION
by Jim Puplava

At a time when asset markets appear to be overpriced and value is hard to find, opportunities still exist in the financial markets. Three areas stand out in our opinion: healthcare, in particular pharmaceuticals, energy in all forms, and lastly telecommunications. All value is relative, but when compared to existing markets these markets look relatively cheap. The S&P 500 is selling at 20 times current earnings and 16 times forward earnings. At 45 times this year's profits, the NASDAQ is selling at nosebleed levels. Dividend yields are still nonexistent with yields at 2% for the S&P 500 and 1.5% for the Nasdaq. Given these high valuations and deteriorating fundamentals for most sectors of the market it is refreshing to find sectors like those listed above where valuations look relatively attractive and fundamentals look promising.

Despite the attractiveness of these sectors they remain largely unloved and underowned. Energy carries an 8% weighting within the S&P 500 and telecom is down to under 3%. Only healthcare, which is a broad sector, has a weighting comparable to S&P heavyweights such as technology (16.6%) and financial (22.2%). Looking at institutional holdings you will find that fund managers and large institutions have been sellers of pharmaceuticals throughout the first and second quarters. They have also been big sellers of energy. Yet the demand for energy keeps growing, the population keeps aging and the demand and uses for telecommunications keeps expanding. Despite predictions for lower oil prices over the last three years they have never arrived. For the first time in decades oil demand has reached parity with supply. The IEA keeps increasing its estimates for the demand for oil, Chinese car sales are up 24% this year, and everywhere you look outside Russia and the Canadian oil sands, production keeps falling. To me this spells opportunity. If I’m wrong in the near-term investors will still have attractive dividends that they can count on rather than rest their hopes on the promise of future growth estimates that may or may not materialize.

-cut-

SECTOR REVIEW
by Chris Puplava
Health Care Sector

With the Fed consistently raising interest rates (9 straight interest rate hikes), energy prices at record levels, and many S&P companies reporting earnings estimates below analyst expectations, a possible economic slowdown and sector rotation bodes well for the health care sector, which is improving profitability and poses attractive valuations. In periods of weak equity markets, the health care sector consistently outperforms the overall market

-cut-

Energy: Oil & Refining

The International Energy Agency (IEA) report said oil demand will rise 2.1% next year, with consumption increasing by 1.75 million barrels per day (bpd) and China’s demand growth is expected to rise 7.2%. On the supply side, OPEC decreased crude oil production by 60,000 bpd to 29.3 million bpd produced in June, with higher supplies from Iraq and Nigeria being offset by lower production from Iran, Saudi Arabia, Kuwait and United Arab Emirates. World production of crude oil in June totaled 84.6 million bpd, a decline of 155,000 bpd over last month.

more...

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

[punpirate]

2. Is there any wonder about reticence in these three sectors?

Health care: Health South takes a header and Richard Scrushy does his best impression of Sgt. Schulz with a Southern accent, and Columbia HCA pays a billion and a half dollars in fines for their less-than-honest billing practices.

Telecommunications: Global Crossing. Bernie Ebbers and WorldCom. Jail. `Nuff said.

Energy: Rape of the West Coast while FERC looks the other way. Enron. First Energy. El Paso. And with Congress set to repeal PUHCA (the last vestige of regulation standing between conglomerates and rape and/or plunder)?

No wonder people are twitchy about those sectors. Some of the biggest boondoggles in the corporate world are happening in them. If a broker told me these were great buy sectors, I'd probably react as if he told me he thought UAL was going to go stratospheric any day now. :)

[UpInArms]

3. daily dollar watch

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

Last trade 89.62 Change -0.02 (-0.02%)

Yuan only one factor in rates

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2005/07/24/BUGVBDSILT1.DTL&type=business

Will China's move to loosen its currency's link to the dollar be the pin that pricks the U.S. bond bubble -- and perhaps the housing bubble along with it?

That depends on whether you think China's announcement on Thursday that it would no longer maintain a fixed exchange rate between its currency -- called the yuan, or renminbi -- and the dollar was a symbolic gesture or the start of something big.

On Thursday, the markets were convinced China was taking a big first step toward a free-floating currency, which would require it to buy fewer U.S. Treasuries. That would probably lead to higher U.S. interest rates. In anticipation of such a trend, the yield on the 10-year Treasury bond leaped 0. 12 percentage point to 4.28 percent.

On Friday, investor sentiment shifted. Rather than a major shift in policy, traders decided the revaluation was probably a political move designed to head off protectionist sentiment in Congress and make Chinese President Hu Jintao's visit to Washington in September more pleasant. The yield on the 10- year Treasury bond lost half of Thursday's climb, falling to 4.22 percent.

The reality: Chinese intervention in the currency markets is only one of many factors that affect U.S. interest rates. In isolation, China's decision probably would lead to higher rates. How high would depend on how quickly it moves toward a free-floating currency and whether other Asian countries let their currencies appreciate along with the yuan.

"The Chinese are going to tie the yuan a little bit less to the dollar," says Jim Grant, editor of Grant's Interest Rate Observer. "They will be acquiring fewer dollars with which to manipulate or control their exchange rates. They will be investing less in U.S. Treasuries. All things being the same, and they never are, this could be a bad thing for U.S. bond prices and could tend to push interest rates higher."

...more...

Have a Great Day Marketeers!

[UpInArms]

8. Easing deflation seen spurring BOJ policy debate

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-25T053900Z_01_T284744_RTRIDST_0_ECONOMY-JAPAN-BOJ.XML

TOKYO, July 25 (Reuters) - Easing deflation may add a new twist to the debate at a Bank of Japan board meeting this week as the focus in financial markets shifts to when the central bank may abandon its easy policy, rather than merely adjusting it.

The BOJ has promised not to end its four year old policy of flooding the financial system with cash until year-on-year price rises stabilises, and the nine-member board has been split over whether the policy should be tweaked before that condition is met.

<snip>

BOJ officials have also insisted that any cut in the 30-35 trillion yen ($269 billion-$314 billion) target would not amount to monetary tightening, but markets are not convinced.

<snip>

"Some board members are worried about the side-effects of forcing money into banks, but this may be seen as a necessary evil for now," he said.

...more...

[converted_democrat]

17. Good morning UIA!!!

:hi: Hope you are having a good day!

[UpInArms]

18. Hiya c_d!

:hi:

Heat prostration may play a factor here soon!

Computer has been going on the blink lately - overheating and shutting down :(

M-i-L coming tomorrow -

Hope all is well with you and yours :)

:pals:

[UpInArms]

4. Today's Report:

http://biz.yahoo.com/c/e.html

Jul 25	10:00 AM	Existing Home Sales	Jun	-	7.15M	7.13M	7.13M	-

[UpInArms]

26. Housing Bubble continues to inflate

10:01am 07/25/05 U.S. EXISTING HOME MEDIAN SALES PRICE UP 14.7% YR ON YR

10:00am 07/25/05 U.S. JUNE EXISTING HOME SALES UP 2.7% TO RECORD 7.33M

(edited to add Median Sales Price line item)

[54anickel]

41. More shocking developments

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

snip>

That’s why, according to the Economist and their dandy graphic, the faster home prices rose in a particular country over the last four years, the bigger that country’s jump in consumer spending. No wonder then that the U.S. is way up near the top right hand corner of the chart (i.e. rapidly rising home prices and red hot consumer spending) along with Britain, Spain and Australia, while Japan and Germany sit and stew in the lower left hand corner, doing things Americans wouldn’t dream of – like saving.

It’s that relationship between residential real estate and the economy that makes some worriers wonder if the U.S. economy can handle declining – or even flat – home prices. After all, the Economist notes that when housing price gains in Britain recently slowed from 20% to 4%, retail sales growth dipped from 7.5% to 1.3%. Because Americans are more leveraged than those homeowners across the ocean, the magazine figures that the inevitable housing slowdown will hit Americans harder.

They could be right. Money online quotes Paul Ashworth, an economist for Capital Economics, who calculates that 38% of new jobs created these days are real estate related (which he figures to be construction, real estate, architecture, building supply, home furnishing retailers and building services). Yet those sectors account for less than 12% of nonfarm payrolls.

Still there are those who can’t see the housing bubble for the granite countertops. They just figure that booming housing prices are a reflection of a darn fine economy and good hygiene. But a recent paper by Fannie Mae (of all entities) does a great job of showing just how different the housing environment is today compared to normal times, like those when people had hobbies collecting Major League Baseball bobble-head dolls instead of flipping condos.

Fannie Mae’s expertly crafted Flip Chart of Doom by Thomas Lawler puts into pictures some of the more worrisome aspects of the housing bubble, and it shares some housing bubble trivia along the way. For convenience (or sheer laziness), we’ll divide the “pro bubble” arguments into the following categories:

a. Above average housing price increases
b. Deteriorating credit standards
c. Unusual investor interest
d. Disregard for poor cash flow returns, focus on appreciation

more...

[UpInArms]

5. American workers distrust brass, survey says

http://www.azcentral.com/arizonarepublic/business/articles/0725distrust25.html

U.S. workers are leery of the top managers at their companies, with only 40 percent saying they trust their bosses to communicate honestly, according to a survey by Mercer Human Resource Consulting.

Of respondents, 38 percent said their leaders do a good job of communicating important business decisions. Less than half, 49 percent, said their companies are well-managed.

<snip>

"A number of top executives have been at the center of high- visibility corporate scandals in recent years, and you can tie those developments to some of the cynicism and lack of trust," Fralicx said.

<snip>

Layoffs and a short-term mentality among top executives also contribute to worker distrust, Fralicx said.

...more...

[UpInArms]

6. Greater Southeast cuts 200; doctors, nurses let go

http://msnbc.msn.com/id/8696150/

Financially strapped Greater Southeast Community Hospital has laid off a quarter of its staff.

Greater Southeast, the only D.C. acute-care hospital east of the Anacostia River, has cut about 200 full- and part-time workers in its latest attempt to save money. The layoffs, which were not publicly announced, should save the hospital about $6.5 million a year.

<snip>

Greater Southeast (www.greatersoutheast.org) had more than 1,500 employees at one time and is now down to a staff of 650 after the new cuts, which took effect July 1. Hospital officials say they don't foresee more layoffs, but that doesn't mean cuts won't happen, given the hospital's long history of financial troubles. "We're pretty thin," Graham says.

After emerging from Chapter 11 bankruptcy protection in spring 2004, Greater Southeast has tried to regain its financial footing. It cut 62 jobs last year.

<snip>

Tuft made similar comments last year when Greater Southeast emerged from Chapter 11, saying to Washington Business Journal that he did not expect any major layoffs at the D.C. hospital, which was crushed in late 2002 when its main lender, National Century Financial Enterprises of Dublin, Ohio, collapsed. This forced Greater Southeast into financial turmoil, and it resulted in the hospital losing its prime contract to run the D.C. Healthcare Alliance.

Greater Southeast also had been thinking of growth several months ago, when it partnered with Tennessee-based HCCA International, a recruiting firm, to bring more than 50 nurses from foreign countries to work at the hospital, a move that was designed to save Greater Southeast money on labor.

...more...

[UpInArms]

7. Bisys to restate accounts for '02, '03 and '04

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38558.3335502778-839074741&siteID=mktw&scid=0&doctype=806&

LONDON (MarketWatch) -- Outsourcing company The Bisys Group PLC (BSG) said it has concluded that it will restate its financial accounts for the fiscal years 2002, 2003 and 2004. It will also restate the quarters ended Sep. 30 and Dec. 31 in 2003 and 2004. The transactions are estimated to cut consolidated stockholders' equity as of Dec. 31, 2004 by less than 5%, it said. Bisys said the company has reported the items at issue to the Securities and Exchange Commission, and these matters will now be included in the ongoing and previously-disclosed SEC investigation into Bisys' financial and accounting issues.

[UpInArms]

33. Bisys may settle with SEC in fund-services probe

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38558.4210712384-839079552&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

BOSTON (MarketWatch) -- Bisys Group Inc. (BSG) said in a regulatory filing Monday that it is in settlement talks with the Securities and Exchange Commission over a previously-disclosed probe of the firm's mutual-fund services business. Last year Bisys said the SEC was investigating the some of the firm's revenue-sharing agreements with fund companies. Bisys said it believes the settlement may require the firm to pay as much as $25 million in total costs.

Sounds like this is a bit more than just "restating profits".

[UpInArms]

9. The Doubtful Deals Driving CAFTA

http://www.businessweek.com/magazine/content/05_31/c3945055_mz013.htm

What's the connection between a $2.5 billion plan to construct a series of dams and locks along the Mississippi River and a trade agreement between the U.S. and six Central American countries? Answer: It's the price the Bush Administration paid for the vote of Senator Christopher Bond (R-Mo.) in favor of the Central American Free Trade Agreement.

In the end, CAFTA passed the Senate 54-45 on June 30 after Bond told the White House he'd be "more comfortable" voting for the trade deal holding a chit for his dams and locks. It headed to the House for what's likely to be a closer -- and more expensive -- vote. With the outcome still in doubt, the capital has become eBay on the Potomac as even some historically pro-trade House Republicans are acting suddenly coy. For legislators, the opportunity is a solid two-fer. "They can go back to their districts and say, 'Look what I got for you,' at the same time they can demonstrate to voters that the President is not a lame duck and Congress isn't paralyzed," says Norman Ornstein, a congressional analyst at the American Enterprise Institute.

<snip>

That hasn't stopped lawmakers from lining up to collect IOUs from the White House. "Obviously we're working very hard to address their concerns," says Assistant Trade Representative Matt Niemeyer. But an examination of the deals by BusinessWeek shows they aren't exactly being etched in stone. Take an elaborate bargain offered by the Administration to win the votes of Senators Norm Coleman (R-Minn.) and Senate Agricultural Committee Chairman Saxby Chambliss (R-Ga.). Because CAFTA would relax the import quota on sugar, it's unpopular with America's sugar beet and cane farmers. So Agriculture Secretary Mike Johanns offered up a smorgasbord of sweeteners: The government would either buy up the offending sugar coming from Central America and turn it into ethanol, pay sugar cane farmers in CAFTA countries not to ship their product to America, or ship surplus U.S. crops to Central America free of charge if producers there would refrain from exporting additional sugar to the U.S.

<snip>

Another source of CAFTA resistance: textile-state Republicans worried that the deal will hurt America's 600,000 remaining clothing workers. To lure a handful of holdouts from the Southern textile belt, U.S. Trade Representative Rob Portman offered to require Central American clothing makers to buy linings and pockets from the U.S. in order to receive a full tariff reduction. That didn't cheer every North Carolina clothing worker, but Senator Elizabeth Dole announced that it was good enough to win her vote. One hitch: The pockets-and-linings promise must be approved by all CAFTA countries, including the three that have already ratified the treaty.

...more...

[54anickel]

15. This is freakin' ridiculous. How can any of this BS be labeled as

"Free Trade"? And these bastards that are selling the country out for their little crumbs to take back home to gain "points" with the voters, when the hell will America wake the f-up?

[UpInArms]

16. "wake up"???

they can't!

THEY'RE DRUNK!

:rofl:

G'morning 54anickel!

:hi:

[54anickel]

19. Heh-heh, I guess the stupor goes reaches beyond the 44% that

give old BeezleBush their "approval" in the polls.

[UpInArms]

20. maybe all that spew about "who do you want to have a beer with"

was really something else?

Was it a subliminal signal to go and get drunk so that they could show their support for the dimson?

Gotta wonder :eyes:

[54anickel]

22. Ahhh, Good morning UIA. See your wit is sharp as ever despite

the heat-wave!

Hey, you don't suppose they're messin' with the weather to get 'em all drinkin' even more beer do ya? Seems the temps have been climbing since his polls have been dropping. :evilgrin: :hi:

[WhiteTara]

52. LOL

and a very pointed thought. Somewhere in the world it must be noon.

[punpirate]

31. Hmmm. Chris Bond is from Missouri...

... and when there are terrible floods of the Mississippi, Missouri seems to have more than its share. So, to minimize that flooding, those dams and locks would have to be north of Missouri. Wonder what all those people in northern Illinois, eastern Iowa, western Wisconsin and southern Minnesota think of this plan?

And, sweet Elizabeth Dole thinks it's a grand idea. NC clothing corporations get to move their operations to Guatemala and El Salvador and they will be very busy lining their pockets from this deal....

Hope North Carolinians manage to figure it all out.

[UpInArms]

35. did you notice that all those "supportive" senators

were GOPpiggers?

They obviously don't support this mal-administration unless they are BRIBED.

More "culture of corruption" crap.

:argh:

[UpInArms]

10. Treasurys drift lower; key yield at 4.23%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38558.3649196065-839076523&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

CHICAGO (MarketWatch) -- Friday's rebound in the U.S. bond market didn't stretch to Monday, with the benchmark 10-year Treasury note down 4/32 at 99 5/32 in morning trading. Price declines lifted the note's yield ($TNX) to 4.23% from 4.21% at Friday's close. Despite Friday's rally, the 10-year note finished out its fourth consecutive losing week and yields on the benchmark note remain within striking distance of two-month highs. Traders said the market continued to mull how Chinese currency revaluation will impact its purchases of U.S. Treasurys. The market was preparing to take on new 20-year inflation-protected bonds to be auctioned Tuesday.

[UpInArms]

11. Wal-Mart ratchets up China battle

(WHEE! Now they can legally pay those folks $2.00 a day to sell the stuff that they pay 2 cents for!)

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-07-25T083149Z_01_SP248271_RTRIDST_0_BUSINESS-RETAIL-CHINA-WALMART-DC.XML

SHANGHAI (Reuters) - Wal-Mart Stores Inc. hopes to post double-digit sales growth in China this year and to double outlets by the end of 2006 as it aims to narrow a gap with Carrefour and others that dominate the $240 billion market.

Wal-Mart, like Carrefour S.A. and Metro A.G., has been quickly erecting stores across Asia's largest retail market after Japan, a process that accelerated after Beijing dropped a requirement last year that foreign firms find local partners.

Lawrence Lee, regional operations director for eastern China, told Reuters in an interview that the Arkansas-based giant expected to post revenue growth in excess of 10 percent in 2005, though he declined to give specifics.

Chinese government data shows Wal-Mart posted a 31 percent leap in sales in the country to 7.6 billion yuan ($940 million) in 2004 -- less that half of what Carrefour raked up that year.

The Hong Kong-born executive added that Wal-Mart did not intend for now to take advantage of new freedoms accorded to foreign players.

...more...

[UpInArms]

12. GM expands small-car offerings in China

http://www.marketwatch.com/news/story.asp?guid=%7B0DE72BE2%2DB5C9%2D42C9%2DBEFE%2D3F02B406AB58%7D

SHANGHAI (MarketWatch) -- General Motors Corp. (GM) Monday expanded its line of small cars sold in China with the introduction of the Chevrolet Aveo hatchback.

The hatchback Aveo, which will be priced in three different levels ranging from CNY84,900 to CNY102,900, will be aimed at consumers in their mid-to-late 20s, GM said.

"It will enable GM to further capitalize on China's high-growth small-car segment, which has been boosted by the shift of the domestic market away from institutional buyers toward private buyers," Dale Sullivan, Chevrolet Brand Director at Shanghai GM, said in a statement. Analysts have noted the increasing popularity of small cars in China.

...more...

When will GM introduce China to the gas guzzlers and sell them on their "rugged individuality"?

[UpInArms]

13. "Carefully Selected" audience embraces *Co's thievery of SS Funds

Bush Urges Retirees to Get Behind His 'Senior Security Package'

http://www.nytimes.com/2005/07/23/politics/23bush.html?adxnnl=1&adxnnlx=1122296832-g6xoyBzo6cQ3DfXd4S11Lg&oref=login

{free registration or try www.bugmenot.com)

ATLANTA, July 22 - With his Social Security legislation stymied in Congress and millions of eligible people apparently reluctant to sign up for the Medicare drug benefit that was the main domestic policy accomplishment of his first term, President Bush had a rally here on Friday to advance what he called his "senior security package."

Speaking to several hundred carefully screened supporters, Mr. Bush made essentially the same points he has been making for months. He spoke of how Social Security would not be around for today's young people unless it was changed, about a need for private investment accounts linked to the program and about the advantages of enrolling in Medicare prescription drug coverage that will be available to people 65 and older beginning Jan. 1.

<snip>

At one point, the president turned to Frances Heverly, a retiree who was sitting with him onstage at the Atlanta Civic Center, and asked her whether she expected someone to do something about Social Security.

"I expect you to do something about it," she replied, smiling.

...more...

I do believe I'm going to throw up :puke::puke::puke::puke::puke::puke::puke::puke:

[54anickel]

30. Oh for cripes sake! Babs, the old hag, worried about her 17 grand kids

not getting any SS. Like they'd freaking need it! What about the debt your grandkids are inheriting you old bag? Oh, that's right, they probably won't end up paying that much in taxes since they won't end up in the "working" class.

Oh, and catch the Shrub's reply to Frances Heverly expecting him to do something about SS:

"We have three branches of government." :puke: :puke: :puke:

[UpInArms]

14. pre-opening blather

09:00 ET Market is Closed
S&P futures vs fair value: -0.4. Nasdaq futures vs fair value: +0.5. Stage remains set for the cash market to open with little fanfare as futures indications continue to trade near fair value... While over 70% of the S&P companies out with results so far this quarter have exceeded forecasts, mixed results from a select few this morning, coupled with the absence of notable economic data before the bell, have provided little direction to pre-market trading
08:30 ET Market is Closed
S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: -0.5. Still shaping up to be a lackluster start for stocks... While confirmation about Teva Pharmaceutical's (TEVA) plans to acquire Ivax (IVX) for $7.4 bln provides some support, the lure to lock in some profits following four straight week's of market gains appears to be stalling follow-through buying efforts

08:00 ET Market is Closed
S&P futures vs fair value: -0.6. Nasdaq futures vs fair value: +0.5. Futures market versus fair value suggesting a neutral open for the cash market as investors mull over the start of another busy week of earnings reports... Of the notable names reporting so far this morning, Xerox (XRX) has missed Q2 forecasts by $0.03 and issued downside Q3 guidance while Quest Diagnostics (DGX) has matched expectations and reaffirmed its FY05 outlook

[UpInArms]

21. 9:49 EST dice are in play

Dow 10,659.54 +8.36 (+0.08%)
Nasdaq 2,179.56 -0.18 (-0.01%)
S&P 500 1,234.03 +0.35 (+0.03%)
10-Yr Bond 4.236 +0.13 (+0.31%)

NYSE Volume 137,316,000
Nasdaq Volume 151,082,000

[54anickel]

23. China Central Banker Says Hedge Funds Delay Yuan Convertibility

http://www.bloomberg.com/apps/news?pid=10000087&sid=a5mvfBkBFZ5I&refer=top_world_news

July 25 (Bloomberg) -- China won't make its currency fully convertible for at least five years because it worries hedge funds may force the yuan to plunge, much as happened to the Korean won and Thai baht during the 1997 Asian financial crisis, said Li Deshui, a member of the central bank's monetary committee.

``There's more than $800 billion to $1 trillion of hedge funds in the world and the Chinese financial system is relatively weak,'' Li said in an interview. ``If the (yuan) becomes fully convertible it would be attacked by these hedge funds.''

snip>

Li, who is also commissioner of China's National Bureau of Statistics, said the state of the country's banks is a key reason why the government won't allow the yuan, also known as the renminbi, to become a fully tradable currency anytime soon.

``Over the next five years, I do not foresee the renminbi becoming fully convertible,'' Li said in Beijing on July 22. ``Our banks are not good enough and the monetary system is not quite up to international standards.''

snip>

The lack of full convertibility of the yuan is ``China's last economic and financial defense,'' Li said, adding that the government will ``not easily allow'' the move.

more...

[54anickel]

28. An Awesome Move by China (Roach)

http://www.morganstanley.com/GEFdata/digests/20050722-fri.html#anchor0

snip>

This is also a plus for the rest of the world -- but with a potentially painful twist. By moving to a currency basket, China will need to diversify its enormous portfolio of foreign exchange reserves, which totalled some $660 billion at the end of 1Q05. Other Asian central banks -- also massively overweight dollars -- should follow China’s lead. The near-simultaneous announcement by Malaysia to abandon the Ringgit peg in favor of a managed basket float confirms such a possibility. Other central banks, such as the Bank of Korea, have been itching to diversify out of dollars.

Consequently, a more flexible RMB mechanism raises the odds of an Asian shift out of dollars, in effect removing the artificial bid for dollar-denominated assets that has provided a subsidy for US interest rates. This will undoubtedly put pressure on the interest rate support to US asset markets -- especially property. Asset-dependent American consumers will certainly be challenged by such a development. This could result in a reduced impetus from US consumption support -- in the end, the only real hope for a US current account adjustment. This is a plus for a long overdue global rebalancing but will be admittedly painful. Unfortunately, that’s probably the only way for the US and the rest of the world to come to grips with its most glaring excesses.

The financial market implications of this shift in Chinese currency policy cannot be minimized. At the most basic level, the FX reserve diversification play is likely to be negative for the dollar and bearish for US interest rates -- mirroring the classic trappings of a current-account adjustment. That, however, is not the only consideration bearing on the US interest rate outlook. The combination of persistently low inflation and a still-likely China slowdown remain important prospective developments on the bullish side of the interest rate equation. Over the near term, I suspect that the balance will now tip more toward the bearish outcome than I had previously thought. Over the medium term, however, I still believe that pressures on longer-term US interest rates will be contained by subdued inflationary expectations and the likelihood of a China-led shortfall in pan-Asian economic growth.

This was not an easy move for China. The nation’s leadership agonized long and hard over both the nature and the timing of an adjustment in its foreign exchange mechanism. External pressures from the US undoubtedly played an important role in underscoring the urgency for action. But in the end, it was China’s choice. The Chinese leadership has made a wise and prudent adjustment, in my view. The best news in all of this is that a flexible RMB is a big plus for global rebalancing. The peg was a major impediment to this process. By moving gingerly on the currency front, China minimizes the risk of overkill that a larger move might have triggered. There is nothing wrong with a China that goes slowly in feeling its way down the road to currency flexibility. This favors the gradual-adjustment scenario of global rebalancing. A large move could have tipped the scales toward the more disruptive option -- always a risk for a global economy with such massive imbalances. That could have led to a precipitous decline in the dollar, a spike in US interest rates, a collapse in the US property market, a severe adjustment by the American consumer, and a sharp global recession. The odds of such a hard landing in a US-centric global economy have been reduced by China’s shift in its currency policy.

more...

[54anickel]

38. Who's Afraid of China Inc.?

http://www.nytimes.com/2005/07/24/business/yourmoney/24oil.html?

WILLIAM A. REINSCH, an avowed free trader, welcomes China's rising stature in the international economy. After all, he is the president of the National Foreign Trade Council, an organization founded in 1914 to promote an "open world trading system." Indeed, when he was a senior trade official in the Clinton administration, Mr. Reinsch was chided by some security analysts who said he was being soft on China by placing matters of commerce ahead of national security.

But even Mr. Reinsch is uneasy about China's attempt to buy Unocal, a midsize American oil company. The outcome of the takeover contest for Unocal is uncertain, and last week its board embraced an improved offer from Chevron. Yet Cnooc, a government-backed Chinese oil company, still has the higher offer - and it could up the ante.

snip>

In China, there are also two camps - the security hawks and the economic modernists, according to China analysts. The modernists see China joining the United States as the second great economic power of the 21st century, and the two nations sharing the gains from increased trade ties and global growth. The hawks regard that view as naïve, and fret that American policy is to remain the world's only superpower and to curb China's rise. So China's response, the hawks say, is to try to erode United States hegemony and reduce America's power to hold China down.

Both faces of China have been evident recently. Two weeks ago, a senior Chinese military official, Maj. Gen. Zhu Chenghu, said China should use nuclear weapons against the United States if the American military intervenes in any conflict over Taiwan. Then, bowing to pressure from the United States and other trading partners, China announced last Thursday that it would no longer peg its currency tightly to the dollar. It is a measured step, and it will not do much to moderate China's huge trade surplus with the United States anytime soon. But the move is a sign of flexibility and accommodation.

"Do we see each other inevitably as antagonists, or do we see a world of globalization from which both sides benefit? That is the big issue," said Kenneth Lieberthal, a senior official in the National Security Council during the Clinton administration.

more...

Sheesh, with Bushco in charge, it's pretty easy to answer that antagonist/partner question.

[54anickel]

39. With Yuan Move, China Shows It's Got Game

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_pesek&sid=a5toMPaOWUPk

snip>

Imagine that! Investors in Toyota, the world's most valuable automaker, found themselves at the mercy of the central bank of a communist state. Ditto for the U.S., which saw its bond yields rise amid fears yuan revaluation might reduce demand for dollar- denominated debt.

Playing the Game

Yet if China has shown the world anything, it's that it knows how to play the global finance game as well as anyone. China showed it's got game, and offered some reassurances that officials in Beijing know what they're doing as they try to engineer what's arguably the most important economic project anywhere.

China didn't alter its currency because the U.S. demanded it; the move had everything to do with an acceleration in second- quarter growth to 9.5 percent.

Consider the sheer brilliance of Beijing's tactics. It took a baby step toward cooling its own economy and de-pegging the yuan, while also convincing the world it was making an accommodation. In reality, China gave the world little but a lesson in obfuscation Federal Reserve Chairman Alan Greenspan could learn from.

more...

[UpInArms]

40. Newsletters react to Beijing's currency action

(could be re-titled: Dumbo strikes again)

http://www.marketwatch.com/news/story.asp?guid=%7B9AD95E6A%2D5D7C%2D4E21%2DA70A%2D4F1EB6E91C76%7D&siteid=mktw

excerpt:

"...obviously a move designed to pacify China's critics, including politicians in Washington. But the move is not large enough to disrupt trade of China's dollar reserves. ...

"American consumers are not going to see much change in the prices we pay for good made in China. I expect to see currency markets calm down and gravitate back to the levels that prevailed prior to China's move."

Dessauer is something of a dollar-and-Wall Street triumphalist. He seems to think markets will appreciate because the U.S. is simply the best. Oddly, this view has often been linked with rejection of any idea that China should revalue its massively undervalued currency -- possibly because Wall Street (and the U.S. Treasury) have benefited from China's policy of reinvesting in U.S. paper. It's Main Street that pays the price.

Curiously, one of Dessauer's arguments against pressing the Chinese to revalue was "the Chinese banking mess" -- the Chinese banking system was too fragile to take the strain, he claimed.

...more circular logic...

[UpInArms]

24. Renaissance exec gets Wells notice, financials mixed

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38558.4103631366-839078955&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Shares of RenaissanceRe (RNR) fell 4.7% Monday morning after the company said a Securities and Exchange Commission panel has recommended civil proceedings against its CEO related to the company's earnings restatement. The shares fell $2.24 to $44.99. Stocks were mixed in the broader financial sector, as the Amex Securities Broker/Dealer Index ($XBD) fell 0.3%, the Philadelphia Bank Sector Index ($BKX) fell 0.1% and the S&P Insurance Index (IUX) added a fraction

Is this another one of those "no impact" things?

:rofl:

Cooking books, rigging deals, investigations, resignations, restatements - and on and on and on....

[UpInArms]

37. SEC plans to sue Stanard (RenaissanceRe CEO) over accounting restatement

http://www.marketwatch.com/news/story.asp?guid=%7B6D0B926D%2D64BB%2D45FD%2D85EA%2D8D82BF14783B%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) -- The Securities and Exchange Commission plans to sue RenaissanceRe Holdings Chief Executive James Stanard as part of the agency's investigation into an earnings restatement by the reinsurer earlier this year.

Staff of the SEC sent Stanard a "Wells Notice" indicating that they plan to recommend civil enforcement action against him for breaking federal securities laws, the Bermuda-based insurance and reinsurance company said on Monday.

Michael Cash, a senior vice president in the company's specialty reinsurance division who resigned earlier in July after refusing to testify to the SEC, also received a "Wells Notice," the company added.

<snip>

A finite risk reinsurance agreement between American International Group (AIG: news, chart, profile) and Berkshire Hathaway's (BRKA: news, chart, profile) (BRKB: news, chart, profile) General Re division sparked an investigation into AIG's accounting that toppled the insurer's longtime Chief Executive Maurice "Hank" Greenberg in March and forced the company to restate five years of earnings to correct a series of errors in its books.

...more...

This one is starting smell a lot like AIG :eyes:

[54anickel]

25. Investors choose global over US funds

http://news.yahoo.com/s/ft/20050724/bs_ft/fto072420051613594000;_ylt=AubiPAlogpCylSCp7dlIpir2ULEF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

For the first time in 15 years, US retail investors put more money into international equity funds than in domestic funds as they track the shift in returns arising from the falling dollar.

More than $51bn flowed into international funds in the six months to June four times the $12.4bn the home funds attracted, according to fund tracker Lipper. This was a sharp turnround from last year's first half, when $51bn went into US funds and $35bn into international funds.

Andrew Clark, senior research analyst at Lipper, said: "This is very much a US dollar-related phenomenon. Investors are not specifically tracking currency markets but they are following returns. The last time the dollar fell like this was around 1990."

As the US dollar began to fall after its decade-long rise, funds investing outside the US began to show higher returns, making them more attractive to investors, who historically have tended to follow performance.

more...

[UpInArms]

27. Moody's finds link between high (CEO) pay and credit risk

http://www.marketwatch.com/news/story.asp?guid=%7B25C5616B%2D7FD2%2D4A6C%2D9DF4%2D62B9FCBE9FB8%7D

NEW YORK (MarketWatch) -- Investors may want to take a hard look at stock options and bonuses going into top executives' pockets before spending their own bucks to buy a company's bonds.

Corporations doling out super-sized incentive compensation packages to chief executives appear to face a greater risk of potential default or a significant downgrade, a new study by Moody's Investors Service suggests.

Believed by the credit agency's analysts to be the first empirical examination of a link between excessive compensation and credit risk, the report may provide new ammunition to a growing chorus of critics taking issue with escalating pay packages.

The study "is confirming that there is a relationship between high pay and extra risk for the company," said Christopher Mann, a Moody's senior vice president and author of the report. "It's been seen in other ways, and now we are showing that for the debt markets it's apparently a significant factor."

While routine variations in salaries do not appear to be predictive of credit risk, "large, positive, unexplained bonus and option awards are predictive of both default and large rating downgrades," the firm said in the report. "Unexplained" awards are those that deviate substantially from expected pay based on a company's size, past performance and other variables.

<snip>

The firm found that of the 43 companies that defaulted during that time period, 22 offered their CEOs much larger-than-expected bonuses or stock option grants, or both, at least once. Of the 214 companies that experienced large downgrades, CEO compensation was higher than expected in 140 cases, with 50 of those finishing in the top 10% in terms of the plans' generosity.

...more...

[54anickel]

34. Well DUH! CEO pay has been based purely on profits, not how the

company is run, how it treats it's workforce and the community at large, what it's growth potential and market share is, just the bottom line - NOTHING else matters.

So of course they are going to take more risks, cook more books, get more "creative". It's not THEIR money they are gambling with, it the investor's buck. They just get to take home a large percentage of the winnings - it costs them nothing if they lose. Should they lose their job, they just move on to another company and try again.

[WhiteTara]

53. once those CEOs get the money

they little incentive to make the company work over the long haul. Short term profits are all they care about.

[UpInArms]

29. 10:08 EST numbers (all red now)

Dow 10,646.81 -4.37 (-0.04%)
Nasdaq 2,176.32 -3.42 (-0.16%)
S&P 500 1,232.56 -1.12 (-0.09%)
10-Yr Bond 4.231 +0.08 (+0.19%)

NYSE Volume 236,176,000
Nasdaq Volume 246,371,000

[UpInArms]

36. 10:28 EST sharp spikes upward

Dow 10,663.60 +12.42 (+0.12%)
Nasdaq 2,181.78 +2.04 (+0.09%)
S&P 500 1,234.74 +1.06 (+0.09%)
10-Yr Bond 4.235 +0.12 (+0.28%)

NYSE Volume 329,690,000
Nasdaq Volume 335,788,000

10:00AM: Major indices now trade in split fashion as sector leadership remains mixed... Despite falling oil prices, Energy has shown relative strength, getting a boost from Ashland Oil's strong Q3 report, while modest gains in retail and autos have provided a lift to Consumer Discretionary... Reports suggest private equity firms may be interested in bidding for Ford's (F 10.80 +0.08) Hertz unit...

Technology, however, has recently inched below the flat line, as Xerox's disappointing quarter and consolidation in chip stocks offset a 3.3% surge in Motorola (MOT 20.66 +0.66), which was discussed favorably in Barron's... Consumer Staples has also lost ground while weakness in Brokerage has stalled recent gains in Financial... DJTA +0.1, DJUA +0.1, SOX -0.4, XOI +0.1, NYSE Adv/Dec 1273/1286, Nasdaq Adv/Dec 1148/1282

9:40AM: Market idles at the open as investors sift through a mixed batch of earnings reports... BellSouth (BLS 26.63 -0.09) has beaten analysts' forecasts by $0.03 and Ashland's (ASH 64.43 +2.44) Q3 report has handily exceeded expectations, but a Q2 earnings miss and downside Q3 guidance from Xerox (XRX 13.06 -0.99) may be underpinning a sense of caution ahead of more notable earnings reports (i.e. AXP and TXN), preventing the major indices - which have closed on an upbeat note for four consecutive weeks - from more aggressively moving higher...

Separately, June existing home sales (consensus 7.15 mln) will be released at 10:00 ET...

[UpInArms]

32. World Acceptance shares tumble on slow loan growth

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38558.427813669-839079790&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- Shares of World Acceptance Corp. (WRLD) lost almost 15% to $27.34 early Monday after the Greenville, S.C., consumer finance company reported fiscal first-quarter earnings of $7.3 million, or 38 cents a share, roughly flat with its year-ago profit. Revenue rose 9% in the latest three months to $51.8 million from $47.5 million in the same period a year earlier. The company said the earnings were less than expected due to a slowdown in loan growth. Two analysts polled by Thomson First Call were looking for a profit of 41 cents a share in the June period, on average.

I wonder if the unemployed are running out of things to use as collateral for new loans? :eyes:

[54anickel]

42. Surfing the Tsunami

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=45014

snip>

However, as we look below the happy talk about “how the Dow has held strong above the 10,000 level since late 2003” or “how resilient the American markets are”, we begin to notice that long term investing records are still tarnished by the “downturn” of 2000 - 2002. When we consider that the S&P500 is still down 10.64% over the 6-year period ending June 30, 2005, or that the Dow is down 3.17% during the same timeframe, then the first signs of concern start to creep into our thinking.

snip>

If, on the other hand, the information presented is from various U.S. government sources, then we must take the data over the rhetoric and prepare for the wave that is coming. Let us leave the surface statistics and look beneath to see if we can better understand our current situation. We need not look too far. All we need is to go to the trouble of downloading a few government documents.

The pressure point that we will review first is the American consumer. Since June of 1999, national income has increased from $8,161 billion to $ 10,913 billion (as of March 2005).1 While an increase of 34% in 6 years may sound like a good thing, we need to examine this information in light of inflation and debt. During this same period, consumer credit went from $1,347 billion to $2,129 billion, an increase of 58%. 2 I’m sure we can all share numerous stories of the telemarketer or the credit card applications in the mail. We have everything under the sun bought on credit. When we run up our credit card, if we are having trouble paying it off, we can always roll the balance to another credit card that has a zero percent interest for a period of time. Sure, the interest rate may be higher, but there always seems to be another sub-prime lender who would love to get our business. If the credit gets too far out of hand, we’ll just start over by taking a home equity loan to pay them all off. Our homes have turned into another major source of cash flow. What could be better: our house value goes up, we take out another loan, pay off our revolving debts, and in no time our home price has climbed enough again to withdraw even more cash from the ATM machine. In regards to the perpetual upward motion of housing prices, the LA Times shows how deluded the minds of LA homeowners have become. Many actually believe that home prices will continue to move up by 22% a year for the next ten years. 3

snip>

In June of 1999, total mortgages in the USA stood at $6,021 billion. At the end of March 2005, the number is $10,774. 4 This is a 79% increase. Keep in mind our incomes have only risen 34% while our credit card bill has grown by 58%. So, what have we, as a nation, done? The answer is painful, if not obvious. We have borrowed the money with our homes as collateral for the loan. As our credit has gotten increasingly splotchy and our cash flow needs have increased, institutions have lowered their lending standards and moved toward riskier finance products. In a May 5th 2005 report issued by Fannie Mae, we see that the share of interest only Adjustable Rate Mortgages (ARMs) “A” paper selling in the Mortgage Backed Securities (MBS) market has grown from 3% in 2001 to 50.9% in 2004, while ARMs for the same class and timeframe have grown from 18% to 72.1%. The Jumbo MBS market has grown from 5.4% to 52.5% during the same period. In addition to this we learn that the sub-prime MBS finished 2004 with 66% of their loans as 2 year ARMs. In other words 66% of these notes face a likely upward adjustment in payments as early as 2006. 5 These are astonishing numbers.

snip>

We started the year 2001 with a Fed Funds rate of 6.5%. By the end of the year it was 1.75%. 7 History has revealed multiple times that when credit is cheap and accessible, the floodgates to spending are opened. From June 1999 until June 2005 we have seen the amount of money, as measured by M3, in our country increase from $6,237 billion to $9,727 billion. 8 This is an increase of 55% in 6 years. The dictionary definition of inflation is “an increase in the volume of money or credit relative to available goods, resulting in a substantial rise in the general price level.” This makes it plain to see why assets have gone up in value and why it has been hard to keep up with the cost of living. Oddly enough, the Consumer Price Index (CPI) has gone up only 17%, from 497.9 in June 1999 to 582.6 in June 2005. 9 So, according to these numbers, inflation has only gone up 17% while the money supply has grown by 55%. Imagine listening to an investment advisor try to explain to you two investment statements. One reveals a 17% gain and the other a 55% gain, just a slight discrepancy.

more...

[54anickel]

43. 12:19 Luinch break check

Dow 10,649.35 -1.83 (-0.02%)
Nasdaq 2,177.66 -2.08 (-0.10%)
S&P 500 1,234.47 +0.79 (+0.06%)
10-Yr Bond 4.219% -0.00
NYSE Volume 760,369,000
Nasdaq Volume 713,406,000

12:00PM : Market struggles to find direction midday as investors weigh mixed earnings reports against falling oil prices, new M&A activity and strong housing data... While over 70% of the S&P companies out with results so far this quarter have beaten analysts' expectations, mixed results this morning have left investors somewhat wary ahead of more notable earnings reports (i.e. AXP and TXN)... BellSouth (BLS 27.03 +0.31) and Ashland (ASH 63.81 +1.82) have both exceeded forecasts but Xerox (XRX 13.00 -1.05) has missed Q2 expectations and issued downside Q3 guidance...
Even though crude oil prices ($58.30/bbl -$0.35) have consolidated following Friday's 2.7% surge, Energy has paced the way higher, following Ashland's strong Q3 report and a 3.0% surge in Halliburton (HAL 54.89 +1.60) after analysts raised price targets... Interest-rate sensitive sectors like Financial and Utilities have also shown relative strength following a reversal in the Treasury market, as the 10-year note is now up 1 tick to yield 4.21%...

Health Care, however, has traded lower amid consolidation in biotech stocks (i.e. BIIB, GILD and GENZ) and a 3.4% selloff in Hospira (HSP 37.74 -1.33), after Barron's highlighted valuation concerns... Perhaps offsetting some of the sector's losses has been confirmation about Teva Pharmaceutical's (TEVA 31.51 +0.35) $7.4 bln bid for Ivax (IVX 25.43 +2.55)... Consumer Discretionary has also lost ground, as weakness in homebuilding overshadows decent follow-through buying in retail... A 2.7% rise in June existing-home to a record 7.33 mln units and an upward revision to May's figures (to 7.14 mln from 7.13 mln) have underpinned strong housing demand, but the majority of homebuilders have consolidated after recently hitting new highs...DJTA -0.1, DJUA +0.7, DOT -0.2, Nasdaq 100 -0.1, Russell 2000 -0.1, SOX -0.3, S&P Midcap 400 -0.1, XOI +1.1, NYSE Adv/Dec 1525/1531, Nasdaq Adv/Dec 1409/1463

11:30AM : Market off its highs but new merger activity continues to lend some early support... The day's largest deal has been Teva Pharmaceutical's (TEVA 31.51 +0.35) $7.4 bln offer for Ivax (IVX 25.43 +2.55) - a deal which would make Teva the world's largest generic drug maker... Also improving overall sentiment, as market breadth has recently turned positive, have been reports that Maytag (MYG 17.16 +0.96) will consider Whirlpool's (WHR 81.63 +4.45) sweetened $1.4 bln buyout... NYSE Adv/Dec 1642/1352, Nasdaq Adv/Dec 1457/1380

11:00AM : Stocks extend their reach to the upside as oil prices slip to session lows... Crude oil futures, which have consolidated all morning after surging 2.7% on Friday, have recently hit $57.80/bbl (-$0.85), providing some early relief for investors with little else in the way of more bullish data to provide even more upside momentum... NYSE Adv/Dec 1406/1502, Nasdaq Adv/Dec 1398/1355

10:30AM : Major averages improve their stance following strong housing data but market gains remain modest at best... At the top of the hour, June existing-home sales checked in at a record 7.33 mln units, as median sales price rose 14.7% - the fastest price appreciation since Nov. 1980 - while May's sales were revised higher to 7.14 mln (from 7.13 mln), reinforcing continued demand in the housing market... The PHLX Housing Sector Index (HGX 577.19 -2.41), however, which hit historic highs last Wednesday (583.35), continues to consolidate... NYSE Adv/Dec 1220/1600, Nasdaq Adv/Dec 1191/1462

[UpInArms]

44. 12:59 EST numbers (redder) and blather

Dow 10,628.97 -22.21 (-0.21%)
Nasdaq 2,172.04 -7.70 (-0.35%)
S&P 500 1,232.51 -1.17 (-0.09%)
10-Yr Bond 4.232 +0.09 (+0.21%)

NYSE Volume 875,576,000
Nasdaq Volume 817,850,000

1:00PM: Market continues to weaken as oil prices turn positive for the first time today... Even though the recovery effort in oil prices ($58.80/bbl +$0.15) has been minimal, concerns of higher energy costs crimping corporate earnings ahead of another wave of earnings reports has only added to the market's nervousness... NYSE Adv/Dec 1373/1772, Nasdaq Adv/Dec 1287/1643

12:30PM: Blue chip indices retrace early lows, slipping back into the red, amid a lack of more noteworthy earnings data... Perhaps providing a more definitive tone to trading during the week will be reports from Dow components like DuPont (DD 44.37 +0.17), Boeing (BA 66.51 +0.31) and ExxonMobil (XOM 60.11 +0.61), which are scheduled to post earnings on Tuesday, Wednesday and Thursday, respectively...NYSE Adv/Dec 1573/1535, Nasdaq Adv/Dec 1436/1459

(edited to update blather)

[Roland99]

54. Ah...2.7% jump in oil prices on Friday leads to $0.18 jump in gas today.

[54anickel]

45. Waging war on payday lenders

I wonder what effect the new bankruptcy law will have on pay day loan business? Will it increase the need? :shrug:

http://www.freep.com/money/business/tompor25e_20050725.htm

snip>

Under a bill that passed the state House last month, the most a lender could charge would be $76 for a $600 short-term payday loan. Some lenders charge $108 or more for such loans now.

Michigan doesn't regulate payday lenders. But consumers could see protections if the bill becomes law. House Bill 4834 will now go to the Senate.

Gov. Jennifer Granholm, who vetoed a bill on payday lending last year, is expected to approve the current bill. But it isn't without critics -- notably small lenders who are putting up a fight.

snip>

State Rep. Bill McConico, D-Detroit, another bill sponsor, said some bad actors are charging as much as $40 for a $100 payday loan.

"It's an unconscionable amount," McConico said.

But he doesn't believe the state should ban such lending. Too many people run into emergencies.

more...

[UpInArms]

46. Millennium Pharma sees job cuts on Schering-Plough pact

http://www.wpri.com/Global/story.asp?S=3636109

WASHINGTON A Cambridge-based biotechnology has disclosed plans to eliminate 200 jobs.

Millennium Pharmaceuticals says the cuts will result from the restructuring of the company's collaboration agreement with Schering-Plough Corporation. That deal gives Schering-Plough exclusive development and marketing rights for a cardiovascular drug called Integrilin.In a filing with the Securities and Exchange Commission, Millennium says the modified agreement will lead to a 15 percent reduction in its overall costs.The 200 job cuts will include the sales force, medical science liaisons and other positions. Many of those workers will be invited to apply for jobs with Schering-Plough.

...very short newsblurb...

[54anickel]

47. The Pension Crisis Is Upon Us

http://www.gold-eagle.com/editorials_05/chapmand072205.html

snip>

In the US the situation is even worse. It is no surprise that the bankrupt airlines such as Continental and United have major under funded problems. Indeed United Airlines passed their pension plan over to the government's Pension Benefit Guarantee Corporation (PBGC) which itself is $23 billion in deficit. The airline sector alone is under funded by $31 billion on a termination basis but so are many of American's largest corporations. Some include General Motors (GM) $47 billion, Ford Motor (F) $22 billion, (both these numbers are worst case assumptions - Executive Intelligence Review May 27, 2005) while others include Lockheed Martin (LMT) $4.88 billion, DuPont (DD) $3.5 billion, Pfizer (PFE) $2.98 billion, IBM (IBM) $7.38 billion, Exxon Mobil (XOM) $11.5 billion and many more (GMLSRC Pension Shortfalls - June 23, 2005).

Of course the under funding is not just corporations. The Canada Pension Plan has noted problems but recent adjustments to it should ensure that Canadians would receive at least a minimum payout. Possibly not so lucky are Americans where President Bush has said it is full of worthless IOU's (no kidding as if US Treasuries are worthless IOU's or maybe he is signalling the biggest default in history) as he pushed reform of Social Security and wanted to hand over a portion to the stock market through the investment dealers.

But pushing some amount of Social Security onto the stock market is not necessarily the solution. Indeed it could make it worse. President's Bush's privatization of social security is going no where in congress and has proven to be a hard sell with the people.

snip>

If the current funding shortfall is pensions the future funding shortfalls will soon be on Medicare and Medicaid. And here in Canada the pressure has been on health care for years and never seems to go away despite the fact that Canadians spend far less of a percentage of GDP on health care (roughly 10% vs. 15% in the USA). You combine all the above - tax cuts, pension shortfalls, health care under siege on both sides of the border plus add in sluggish employment with pressure to cut unemployment and welfare benefits and tightened rules for bankruptcy in the US and add back in the huge deficits in budget and trade plus growing costs for Homeland Security and the war and you have the potential for the complete unravelling of the society that was built following the Great Depression and WW2.

Jim Sinclair (www.jsmineset.com) calls it the growth of Authoritarian Free Enterprise. Think of China with the military state and millions of compliant workers who do not have health care plans, pension plans or unemployment insurance. And if you get out of line well jail (or worse) awaits you. Globalization is bringing the results it desired for the corporations of the world. The dismantling of the welfare state. As Sinclair says the in the Authoritarian Free Enterprise system the corporations profit while the workers are set back to the 19th century and North America (and Europe?) becomes a state centered on defence against terrorism and involved in forever wars.

more...

[54anickel]

48. Lawmakers Drop MTBE Proposal From Energy Legislation

http://quote.bloomberg.com/apps/news?pid=10000103&sid=aAGehGZBv9mI&refer=news_index

July 24 (Bloomberg) -- A proposal to shield producers of the gasoline additive MTBE such as Lyondell Chemical Co. from product liability lawsuits and create a federal cleanup fund was dropped from energy legislation being debated in Congress.

The proposal would have required producers, refiners and gas station owners to contribute $4 billion to a fund to pay for cleaning up environmental damage. In return, more than 100 lawsuits from municipal water systems and individuals who allege that MTBE spoiled their water supplies would have been stopped.

The deal collapsed as lawmakers from the House and Senate were meeting to work out differences between their two versions of the energy legislation. The MTBE compromise was intended to smooth passage of the bill, which failed in 2003 when Senators from states that have the worst MTBE contamination, such as New Hampshire, declined to support it. President George W. Bush has made the legislation one of his top domestic priorities.

snip>

Bush said in a June 22 speech that U.S. economic security will be enhanced by passage of energy legislation. Barton has said he wants to deliver an energy bill to Bush by Friday.

The MTBE proposal would have called on Congress to put $4.3 billion of taxpayer money in the MTBE fund, bringing it to a total of more than $8 billion. States were required to match every dollar they use from the fund with 25 cents.

Estimates of the cost of a nationwide cleanup range from $1.5 billion by the American Petroleum Institute to $33 billion from a group that represents municipal water agencies.

more...

[54anickel]

49. 2:57 numbers & yada

Dow 10,610.26 -40.92 (-0.38%)
Nasdaq 2,168.71 -11.03 (-0.51%)
S&P 500 1,230.52 -3.16 (-0.26%)
10-Yr Bond 4.254% +0.03
NYSE Volume 1,260,006,000
Nasdaq Volume 1,145,461,000


2:30PM : Range-bound trading persists in stocks as sellers remain an active bunch... Recently slipping to session lows, however, have been bonds, as the benchmark 10-year note is now down 8 ticks to yield 4.25%... The Treasury market, which virtually ignored the record housing data, has been weak all day as the market looks ahead to more influential data (i.e. durable orders, Fed's Beige Book, Chicago PMI) and upcoming bond auctions... NYSE Adv/Dec 1412/1784, Nasdaq Adv/Dec 1269/1721
2:00PM : Little changed since the last update as the latest recovery effort seems to have stalled... Acting as the most recent catalyst behind stocks regaining some upside traction has been American Express (AXP 55.11 +0.54), which has just beaten analysts' Q2 expectations by $0.03... However, not even a 1.0% surge in AXP shares has been enough to eclipse that of ExxonMobil (XOM 60.22 +0.72)...

Other Dow components offsetting some of the index's weakness include SBC Communications (SBC 24.05 +0.33), benefiting from BellSouth's strong Q2 report, and Hewlett-Packard (HPQ 24.32 +0.14), which has climbed at the expense of Xerox's quarterly disappointment...NYSE Adv/Dec 1447/1735, Nasdaq Adv/Dec 1428/1531

1:30PM : Major indices bounce off their lows but market internals still suggest a modestly bearish bias... Decliners on the NYSE hold a 17 to 13 advantage over advancers while declining issues on the Nasdaq hold a 16 to 13 margin over advancing issues... Meanwhile, the Dow, S&P and Nasdaq continue to trade above initial support levels but limited participation still questions whether or not resistance levels of 10670, 1236 and 2186, respectively, can be breached...NYSE Adv/Dec 1362/1798, Nasdaq Adv/Dec 1303/1630

1:00PM : Market continues to weaken as oil prices turn positive for the first time today... Even though the recovery effort in oil prices ($58.80/bbl +$0.15) has been minimal, concerns of higher energy costs crimping corporate profits ahead of another wave of earnings reports has only added to the market's recent nervousness...NYSE Adv/Dec 1373/1772, Nasdaq Adv/Dec 1287/1643

[54anickel]

51. 3:06 and what just happened? Piehole?

Dow 10,592.03 -59.15 (-0.56%)
Nasdaq 2,166.24 -13.50 (-0.62%)
S&P 500 1,228.40 -5.28 (-0.43%)
10-Yr Bond 4.252% +0.03
NYSE Volume 1,313,005,000
Nasdaq Volume 1,192,521,000

[UpInArms]

55. U.S. stocks close near lows after crude resumes rise

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38558.6681068519-839088838&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) - U.S. stocks closed near their weakest levels of the day Monday, after crude oil futures resumed their upward rise to close above $59 a barrel. The Dow Jones Industrial Average ($INDU) was down 54.3 points at 10,596 at its unofficial close. The S&P 500 (SPX) ended down 5 points at 1,229 and the Nasdaq composite (COMPX) down 12.98 at 2,166.

[54anickel]

50. Lawmakers pitch import drug group

http://www.freep.com/money/business/drugs25e_20050725.htm

LANSING -- State House Democrats say Michigan residents could save big on prescription drugs if the state joins a program letting them buy medicines from Canada and other countries.

Democrats planned to announce legislation today that would allow Michigan to get into the I-SaveRx program, which helps individuals buy about 150 brand-name drugs at a lower price because they are shipped from outside the United States.

snip>

The drug-import program I-SaveRx was launched by Illinois and Wisconsin last year and now includes Kansas, Missouri and Vermont. Those states contract with a Canadian clearinghouse that connects residents with pharmacies in that country, Ireland, Britain, Australia and New Zealand.

The program allows consumers to buy drugs online or by phone that are 25% to 50% less expensive than those sold in the United States. The process is known as reimportation because many of the drugs are made in this country.

snip>

There is no cost to join I-SaveRx, but residents pay a 1.5% fee that is included in the total price of a prescription. The money -- along with fees owed by international pharmacies -- pays for safety inspections and other administrative costs.

more...

[54anickel]

56. Price of gems and solid demand help De Beers to sparkle

http://www.iht.com/articles/2005/07/25/business/debeers.php

De Beers, the biggest diamond company in the world, said Monday that it expected its full-year sales to rise to a record of at least $6.4 billion after it increased prices and amid increased global demand for the precious stones.

Diamond sales rose 8 percent to $3.2 billion in the first half and will "at least" match that in the second half, De Beers said. The median from a survey of analysts forecast sales of $3.25 billion. Full-year sales last year were a record $5.7 billion.

De Beers, which sells three-fifths of the world's rough diamonds, is 45 percent owned by Anglo American.

Prices in the $8.2 billion annual market for uncut, unpolished diamonds have jumped by more than a third since 2003 as discoveries have failed to keep pace with demand, according to Rapaport Research, a U.S. consulting company. Jewelry sales have risen in China as well as in traditional markets like the United States. De Beers has raised prices twice this year.

snip>

De Beers faces challenges in South Africa, where it was founded 117 years ago. The rand's 80 percent gain against the dollar since the end of 2001 has made five out of its seven mines in the country unprofitable, Jonathan Oppenheimer, head of the company's mines in the country, said this month.

more...

[54anickel]

57. Uh-oh, someone catch the close - gotta run. Another storm brewing here.

Just got my computer cleaned up from the trashed files from the last power outage...:hi:

[thoughtanarchist]

58. closing numbers and blather

Dow 10,596.48 -54.70 (-0.51%)
Nasdaq 2,166.74 -13.00 (-0.60%)
S&P 500 1,229.03 -4.65 (-0.38%)
10-yr Bond +0.057% (4.247%)


Stocks had trouble settling on a direction Monday, opening at nearly flat levels in a continuation of the edgy trading seen after last week's revaluation of the Chinese yuan and further terrorism concerns in London.

The nervousness was compounded by the deadly attacks at an Egyptian resort over the weekend.

Stocks moved decisively higher at mid-morning, following news of record existing house sales last month. Lower crude futures also lent support to the stock market.

But the gains later faded as crude futures turned higher. There were mixed views as to whether a summer rally is likely to continue.

Al Goldman, chief market strategist at A.G. Edwards, characterized Monday's declines as "a pause to refresh after four strong weeks in a row."

"The market for the last few weeks has tended to bend, but not to break. And that's' the sign of a good market," Goldman said.

:rofl:

It's good to know the sign of a good market n'est pas?

[54anickel]

59. Bit more blather....

Stocks closed lower as a mixed batch of earnings reports, rising oil prices and benchmark yields near two-month highs prompted broad-based consolidation following another week of market gains... Blue chips like American Express (AXP 54.64 +0.07) and BellSouth (BLS 26.89 +0.17) both beat analysts' Q2 expectations by $0.03 but Xerox (XRX 13.15 -0.90) missed Q2 forecasts by $0.03 and issued downside Q3 guidance...

While overall indications remain good for Q2 earnings to check in above initial expectations of 7.5%, as the blended aggregate of reported actuals with remaining forecasts is a bit over 9%, a lack of more influential earnings reports also added to the market's overall cautious stance... Further weighing on sentiment was a rebound in crude oil prices ($59/bbl +$0.37) midday that extended last Friday's 2.7% surge and closed the commodity near a one-week high... Of the nine economic sectors finishing in negative territory, Consumer Discretionary was one of the day's worst performing sectors, losing ground amid weakness in retail (-0.8%) and homebuilding (-2.6%)...

The latter was in focus throughout the session following a 2.7% rise in June existing-home sales to a record 7.33 mln units (consensus 7.15 mln) and an upward revision to May's figures (to 7.14 mln from 7.13 mln)... Even though the report lent further proof to the understanding that job growth and low mortgage rates continue to underpin strong buying demand, which provided some early support for stocks, new home sales, which will be released on Wednesday (10:00 ET), could have a more influential economic impact on the market since they typically carry more weight...

The fact that the majority of homebuilders have recently hit historic highs, coupled with rising borrowing costs - as the 10-year note closed down 7 ticks to yield 4.24% - also left the window open for widespread profit-taking... A more influential interest-rate sensitive area also impacted by a flattening yield curve was Financial... The Treasury market lost ground as traders consolidated some of Friday's gains ahead of a busy week of economic data and upcoming bond auctions...

The Industrials sector was weighed down by weakness from conglomerates (i.e. GE, TYC and UTX) and transportation (i.e. FDX and BNI) while Health Care, which was in focus following Teva Pharmaceutical's (TEVA 31.23 +0.07) confirmed $7.4 bln bid for Ivax (IVX 25.17 +2.29) also traded lower... Providing the bulk of sector weakness was consolidation in biotech stocks (i.e. GILD and GENZ), losses from large-cap drug names like JNJ (-1.5%) and MRK (-1.3%) and a Q2 report from Quest Diagnostics (DGX 51.11 -0.51) which merely matched expectations... Technology was also under pressure amid weakness in the hardware and semiconductor...

Chip stocks, which were under the microscope ahead of Q2 reports after the bell from Texas Instruments (TXN 30.60 -0.16) and Altera (ALTR 22.53 +0.33), lost ground after Merrill Lynch downgraded LSI Logic (LSI 9.89 -0.33) on valuation concerns... Energy, however, paced a day of limited gains, getting a boost from rising oil prices as well as more positive analyst commentary on Halliburton (HAL 54.86 +1.57) and Schlumberger (SLB 84.88 +2.60)...DJTA -1.3, DJUA -0.2, DOT -0.7, Nasdaq 100 -0.5, Russell 2000 -1.0, SOX -0.6, S&P Midcap 400 -0.6, XOI +0.3, NYSE Adv/Dec 1231/2062, Nasdaq Adv/Dec 1169/1902

3:30PM : Indices continue to languish near their lows of the session as selling remains widespread across the board... With regard to the major averages, the Nasdaq continues to pace the way lower, but a lack of liquidity and more erratic price movements today in the absence of more notable catalysts to extend the market's four-week rally has spurred even more aggressive profit-taking on the small-cap Russell 2000, which closed at historic highs on Friday... Russell 2000 -1.0, NYSE Adv/Dec 1130/2124, Nasdaq Adv/Dec 1155/1876

[54anickel]

60. Hey UIA and Ozy (and anyone else of course). If you're still out there

check this out. I overlooked this one, or somehow it didn't register.

http://www.commondreams.org/views05/0725-22.htm

Why are the Dems Caving in on Cox?
by Jamie Court

In a better world, next week's Senate confirmation hearings on the nomination of Rep. Christopher Cox (R-Newport Beach) to lead the Securities and Exchange Commission would be the Democratic Party's finest hour. The hearings offer a perfect opportunity to decry Wall Street's looting of Main Street and to put the GOP on trial for creating the conditions under which corporate criminals flourished.

Instead, Democrats have been eerily silent on Cox, a right-wing Republican who wrote a 1995 law making it harder for investors to take corporate swindlers to court. Cox's Private Securities Litigation Reform Act, which became law over President Clinton's veto, has been blamed for allowing some of the nation's worst financial scandals — including those at Enron and WorldCom — to proceed unchecked. The law let corporate executives off the hook for exactly the kind of utterly misleading statements Enron Chief Executive Kenneth Lay made to keep his company's stock price artificially high.

Indeed, Cox — who President Bush has tapped as the best possible choice to be Wall Street's top cop — is the poster child for how laissez faire, country club Republicanism took trillions out of the pockets of Americans. If the Democratic Party can't find it within itself to stand against putting Americans' life savings in Cox's hands, the party doesn't stand for anything.

Consider his record: As a congressman, Cox voted repeatedly in the interests of Wall Street investment houses to undermine conflict-of-interest standards protecting investors and pension plans. He has voted against post-Enron proposals that would require executives to certify financial statements, strip bonuses from CEOs who falsify statements, and stop stock analysts from holding shares in the companies they cover (although he did ultimately vote for the Sarbanes-Oxley corporate reform bill when it became a fait accompli).

None of this is particularly surprising given that Cox's campaigns have collected more than a quarter of a million dollars from the securities and investment industry he soon may be regulating.....

more...

[mojavekid]

61. This, and the likely repeal of PUHCA,

...and hardly a sound from our representatives...most days, it's just more of the same::puke:

Ugh.


Thanks for posting on this very important issue!