STOCK MARKET WATCH, Thursday 11 August

[ozymandius]

Thursday August 11, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 163 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 234 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 298 DAYS
DAYS SINCE ENRON COLLAPSE = 1355
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 August 10, 2005

Dow... 10,594.41 -21.26 (-0.20%)
Nasdaq... 2,157.81 -16.38 (-0.75%)
S&P 500... 1,229.13 -2.25 (-0.18%)
10-Yr Bond... 4.40% +0.01 (+0.23%)
Gold future... 442.00 +2.20 (+0.50%)

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 Willie CB

RETORT TO A GOOD ECONOMIST

Most economists whose opinions are promoted, or are used to defend public policy, are very shallow, faulty, suspect, and compromised. That has been my opinion for years. Here my usual fare of harsh criticism will soften into mixed criticism. Instead, take the opportunity to give credit to two economists whose work has been made available and is refreshingly adept. Lakshman Achuthan and Paul Kasriel are two excellent economists. Achuthan comes from the Economic Cycle Research Institute. He makes only a few contributions to the websites, most of which reflect solid theory, but with an occasional defense of some mainstream traditional theoretical heresy. Recently he put forth an article to describe “An Unusual Recovery” with numerous factors and relevant effects. Paul Kasriel hails from The Northern Trust Company. He makes more frequent contributions to the websites, full of graphics, which permit readers to learn for themselves and see the proof. Recently, he and colleague Asha Bangalore questioned the US Federal Reserve wisdom under Chairman Greenspan. He believes they might be “Bent on Inducing a 2006 Recession” with not one, but two statements to that effect. This pair of Northern Trust economists makes sound arguments to dispute the Greenspan policy, thought process, and risks from error. They take him to task, and cite downright fallacious claims made by the Good Chairman inflationist before the US Congress. It is my view that Greenspan is a second rate economist, improperly raised to godlike icon status.

-cut-

Achuthan stands out among others in pointing out how the explosion known as “globalization” produced price deflation in “tradable goods and services” despite another explosion, that being of monetary expansion. Most economists focus entirely on low-cost solutions, and the benefit to consumers in money saved. I might add that the monetary and fiscal (federal) stimulus has been gargantuan, not cited by Achuthan, so large in volume that a great many good analysts have incorrectly expected for price inflation to result. It has in every past episode, first the flood occurs, then the entry into pipelines, finally end product prices all rise along with worker wages. This time is indeed different, and Achuthan implies that Asian manufacturing in a “tsunami” is responsible for engulfing the monetary effect. One should take a lesson as a student from this point. The human response on monetary inflation is overwhelmed by the natural economic force of Asian industrial overcapacity! Asian factories snuff out the domestic inflation attempt, since the US system has exported that inflation. The US inflation succeeded mainly in the housing market, which could not be exported. It is like most of the US monetary surge was sent to Asia, where it passed through an industrial filter, and returned transformed to the US Economy in the form of cheap finished products. This entire concept was explained in “Export Inflation, Import Deflation.”

Achuthan makes a fine parallel with the dotcom boom in 1999 and the housing boom today, something I have referred to in the past (with my 19 itemized parallels). The mild recession was due in his opinion to that dotcom boom lessening the impact of the 2001 recession. He talks of importing deflation. He recognizes the simultaneous monetary influence (he calls it “cyclical upswing”) upward in prices, countered by imported price deflation to bring about a tranquil pricing structure. What he overlooks is what I call “cost inflation” whereby most materials, supplies, commodities, energy products, and foodstuffs have risen in price. On the opposite side, the prices which producers are able to sell the finished products are massively influenced by the imported deflation. A profit margin squeeze has occurred, unaddressed by Achuthan, which might be responsible for some of the flattening in the Treasury bond yield curve. Tranquil? Since when is a profit squeeze evidence of tranquility? Add rising health care costs and payroll tax contributions paid by employers, and you have a toxic environment for job growth. This factor is far more prominent to “checking growth in both jobs and wages” than his cited productivity factor.

more...

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

[ozymandius]

2. Giving thanks for this thread.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x4305599

For 54anickel, UpInArms, Maeve, Julie, others unnamed, and yours truly - fellow DUers have built an appreciation thread. Go there an be awed.

Remember radfringe who started the ball of wax rolling with daily regularity.

Ozymandius :hi:

[jamesinca]

3. It is well deserved

.

[54anickel]

17. I "met" UIA's sister there today. Learned a lot about our US$ guru

and UIA's extremely wise family.

[Maeve]

4. Today's reports

Retail sales up less than expected (boosted by "same as we get" car deals), Initial Claims down to 308,000 (last week's revised up by 2K, so reports say "down 6K") and continuing claims fell by 8,000 to 2.57 million.

Decent enough numbers, but the oil prices are where the indicators are right now.

[54anickel]

19. U.S. Jobless Claims Fell 6,000 to 308,000 Last Week (Update1)

http://www.bloomberg.com/apps/news?pid=10000103&sid=aQP2cH5MOsBc&refer=us

Aug. 11 (Bloomberg) -- The number of Americans filing first- time claims for jobless benefits unexpectedly fell last week to 308,000 as companies retained workers to meet rising demand in construction and manufacturing.

Initial jobless claims declined 6,000 in the week ended Aug. 6 from 314,000 the prior week, the Labor Department said today in Washington. The four-week moving average, a less volatile measure, fell to 309,250, the lowest level since February, from 316,500.

Faster economic growth, fueled by rising incomes and low long- term interest rates, is prompting companies such as Smithfield Foods Inc. to increase hiring. Employers may also be holding on to more experienced workers to compensate for slower growth in productivity, economists said.

snip>

Companies in recent years have relied on new equipment and rising efficiency, not on more workers, to meet demand for goods and services, Ahmed said. Productivity growth slowed to a 2.2 percent annual rate in the second quarter from 3.2 percent in the first three months of the year, the Labor Department reported Aug. 9.

``With the deceleration in productivity, firms are more cautious about letting people go,'' said Anthony Chan, a senior economist at JP Morgan Asset Management in Columbus, Ohio.

more...

[54anickel]

5. Daily dollar watch

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

Last trade 87.37 Change -0.24 (-0.27%)

Settle 87.61 Settle Time 23:36

Open 87.37 Previous Close 87.61

High 87.61 Low 87.24


The September Dollar was lower overnight as it extends the decline off July’s high and is challenging the 38% retracement level of the March- July rally crossing at 87.16. Stochastics and the RSI are oversold but are neutral to bearish signaling that sideways to lower prices are possible near-term. If the Dollar extends the decline off July’s high, the 50% retracement level of the March-July rally crossing at 86.08 is the next downside target. Closes above the 10-day moving average crossing at 88.05 would temper the near-term bearish outlook in the market. Overnight action sets the stage for a lower opening in early-day session trading.

The September Euro was steady to higher overnight as it extends last week’s breakout above July’s high crossing at 122.87. Stochastics and the RSI are overbought and are turning neutral hinting that a short-term top might be in or is near. If September extends the rally off July’s low, the 38% retracement level of the March-July decline crossing at 125.299 is the next upside target. Closes below the 20-day moving average crossing at 122.208 would temper the near-term friendly outlook in the market. Overnight action sets the stage for a steady to higher opening in early-day session trading.



http://www.forexnews.com/NA/default.asp
Can US Consumers Slow Dollar Decline?

Dollar weakness remains the theme of the week as all major currencies continue to gain ground on the greenback. Dollar selling, however, has mitigated somewhat this morning as the market awaits the release of July retail sales figures for the US. Although the headline number is expected to show an increase of 2.0% (M/M) – which would be the highest level since May 2004 – much of this improvement in sales comes from the recent incentives by car manufacturers such as GM, Ford and Chrysler, which practically gave cars away by offering deep discounts. Therefore, the market will instead be focused on retail sales excluding automobiles. This number is projected to be more subdued and show an increase of 0.7%. It should be noted, however, that there is a possibility this will surprise on the upside due to the recent increase in jobs (as evidenced by last week’s payroll figures of 207K) and wage growth (which doubled to 0.4%). With more jobs available and more money in their wallets, US consumers may not have limited their purchases to simply buying cars.

Any boost the dollar receives today from the possibility that retail sales surprise on the upside, will not only be subdued ahead of tomorrow’s US trade numbers, but will also be tempered by the fact that crude oil prices continue to hit record highs – breaking above $65/barrel yesterday for the first time. Ironically, filling up their newly purchased cars with gas may leave the US consumer with little left over to purchase additional retail goods the following month.

This morning also sees the release of June business inventory data, which is expected to show minimal growth of 0.1% (M/M). Throughout this year, monthly increases in inventories have been steadily declining and the Inventory-to-Sales ratio also remains near historic lows, indicating the need for further economic expansion as additional inventory will need to be purchased to replenish existing supplies.

Japanese stocks keep the rally going

The yen rally continues as foreigner investors flock to Japanese shares, purchasing a net total of Y495 billion worth of Japanese stock during the week ending August 5 – the most in five months. With the Nikkei topping 12,263 – its highest level since August 2001 – there should continue to be strong demand for Japanese assets and thus for Japanese yen.

more...

edit to add reports due today -

2:00 GER Q2 GDP q/q (exp. 0.0%, prev. 1.0%), 5:00 E-12 European Commission Q3 & Q4 GDP forecasts (exp. NA, prev. NA), 5:00 E-12 Q2 GDP estimate q/q (exp. 0.3%, prev. 0.5%), 8:30 US June Business Inventories (exp. 0.1%, prev. 0.1%), 8:30 US July Retail Sales ex autos (exp. 0.7%, prev. 0.7%), 8:30 US Weekly Jobless Claims (exp. 315K, prev. 312K), 8:30 US July Retail Sales (exp. 2.0%, prev. 1.7%), 19:50 JPN Q2 GDP q/q- pelim (exp. 0.5%, prev. 1.2%), 20:00 AUD Reserve Bank of Australia Governor Macfarlane Testifies to Parliament.

[54anickel]

6. 4.25% by year-end?

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

On Tuesday, the Federal Reserve raised rates by 25 basis points for the tenth consecutive time to 3.5%. The Fed watchers noted that there were two major changes in its communiqué. First, the Fed said that, “aggregate spending, despite high energy prices, appears to have strengthened since last winter.” Previously, the Fed said that “expansion remains firm.” The other significant change was adding, “Core inflation has been relatively low in recent months.” It would appear that the Fed does not think that higher energy prices are restraining consumer spending. Additionally, some economists have argued that higher energy prices act like a rate increase by curbing spending, thus the Fed does not need to raise rates as high as otherwise would without high energy prices. It appears that the Fed does not agree with this reasoning.

Fed fund futures are pricing in the possibility of three more increases this year. Fed fund futures are now pricing in the possibility of fed funds reaching 4.25% by the end of the year. Traders are now forecasting another 25 basis points in the next two meetings, pausing in December, than raising rate to 4.25% in February 2006. This week, Goldman Sachs raised its target for mid-2006 fed funds to 5% from 4.5%.

In conjunction with increasing estimates for when the Fed will stop raising rates, economists are also boosting their forecasts for economic growth. According to the monthly survey conducted by Bloomberg, the median forecast for third quarter GDP growth has jumped to 4.1% from 3.5% last month. This would be the fastest pace of growth since the first quarter of 2004. Estimates for fourth quarter growth were also revised higher by 10 basis points to 3.5%.

snip>

Each of the ten S&P sectors has reported earnings growth higher than was expected at the beginning of the July, but three sectors have reported earnings growth lower than anticipated at the beginning of the quarter. Consumer discretionary stocks and financial stocks have underperformed the expectations set at the beginning of the quarter the most. Earnings for consumer discretionary companies declined 3% in the second quarter compared to the positive 2% expected on April 1. The auto and auto parts companies account for the decline and excluding the six automotive related companies, earnings for the consumer discretionary sector would have been up double-digits. The flattening yield curve caused financial stocks to post 2% earnings growth instead of 7% growth expected at the beginning of the quarter. Not surprisingly, energy and materials companies have posted the strongest earnings growth. The energy sector grew earnings by 41% in the second quarter and earnings in the materials sector were up 26% from last year.

snip>

Last week, Freddie Mac released a report detailing its mortgage refinance activity for the second quarter. The report confirms that the hot housing market has helped boost consumer spending. Most homeowners that refinanced during the second quarter did so to cash-out equity rather than lower their monthly payment. Of the mortgages that were refinanced during the second quarter, 74% resulted in a higher loan balance of at least 5%. The average interest rate declined by 67 basis points. The report gave further evidence that housing prices have accelerated recently. It said that the median appreciation for homes that were refinanced was 23% since the original mortgage was written. It also said that the average age was 2.6 years. Since Freddie Mac has provided this data quarter for several years, we can see that the 8.3% annualized appreciation for the home refinanced during the second quarter experienced that highest annualized appreciation since at least 1996. The average annualized increase has been only 4.4% over the past nine years. Freddie Mac estimates that homeowners cashed out $102 billion worth of equity during the first-half of the year. This is expected to decline to $60 billion for the second-half and only $69 billion for 2006.

more...

Ugh, read earlier this week that refis are down again. We're what - 70% consumer driven? And how much of our service economy is in the banking/financial sector?

Looks like Greenspin is targeting the housing "froth" with interest rates (again the only tool he seems to know) :eyes: He's shutting down the consumer's ATM, flatten if not invert the yield curve to squeeze the banks even harder and yet ecomomists are forecasting higher growth?

Let's hope the wealthy and corporations finally take over the baton from the "regular" consumers.

[54anickel]

7. Treasuries Rise After Retail Sales Increase Less Than Forecast

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aY2YSX4OBwk0&refer=home

Aug. 11 (Bloomberg) -- U.S. Treasuries rose after a government report showed retail sales in July increased less than forecast, a sign that record-high energy prices may be damping consumer spending.

The report may temper speculation that faster economic growth will cause inflation to accelerate. Such views sparked a drop in Treasuries that has sent 10-year yields to the highest since April. The Treasury today is auctioning $13 billion of the notes in the last of $44 billion in debt sales this week.

This would give ``the market reason to rally a little bit going into the auction,'' said Sharon Lee Stark, chief fixed- income strategist at securities firm Legg Mason Wood Walker Inc. in Baltimore. Today's number ``gives the market a foundation,'' she said.

The benchmark 10-year note's yield fell 1 basis point, or 0.01 percentage point, to 4.38 percent at 9 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The yield has risen from 3.92 percent at the end of June, reaching a high of 4.44 percent on Aug. 9. Stark, who a month ago forecast the yield would rise above 4.35 percent, said she now expects it to reach 4.5 percent next quarter.

The price of the 4 1/8 percent security due in May 2015 increased 1/8, or $1.25 per $1,000 face amount, to 98. Yields move inversely to bond prices. The 30-year bond, a 5 3/8 percent security maturing in February 2031, gained about 1/4 to 112 5/32, as the yield declined1 basis point to 4.57 percent.

more...

[54anickel]

8. Dollar falls vs. euro, yen

CHICAGO (AFX) -- The dollar slipped against its European and Japanese counterparts as lackluster U.S. retail sales data pressured a greenback that's already been receiving little boost from positive economic data and expectations for continued U.S. interest-rate hikes. "Overall, dollar sentiment continues to lean to the negative side of the ledger, with the path of least resistance still apparently to the downside," wrote analysts at Action Economics in a note. The dollar was changing hands at 110.34 yen, down 0.2% from Wednesday. The greenback fell 0.2% against the euro, with the common currency valued at $1.2408

[54anickel]

10. Peek at the buck - achieving new lows

Last trade 87.09 Change -0.52 (-0.59%)

Settle 87.61 Settle Time 23:36

Open 87.37 Previous Close 87.61

High 87.61 Low 87.08

Last tick: 2005-08-11 09:44:11 ET
30-min delayed quote.

[54anickel]

9. Pump isn't only spot high gas prices to hit

http://seattletimes.nwsource.com/html/businesstechnology/2002432991_gaspriceeffect11.html

WASHINGTON — Skyrocketing crude-oil prices are hitting Americans in the wallet in ways they might not imagine, increasing the price of everything from pizza delivery to patching a leaky roof.

This week gasoline costs about $2.37 a gallon on average, reflecting global crude-oil prices that soared past $64 a barrel. A year ago, oil cost $44 a barrel and gasoline $1.89 per gallon.

Many U.S. companies are passing on their rising fuel costs to their customers. Most large airlines charge per-ticket fuel surcharges of $20 to $87 for international travel, and many domestic fares have jumped more than $100.

snip>

"The price is going up due not only to the price of asphalt; even the costs of aggregates (such as crushed stone and gravel) are going up," said Kent Hansen, the director of engineering for the National Asphalt Pavement Association in Lanham, Md. "The price of everything is going up: the cost to transport it and the cost to make it."

For state and local governments, pricier asphalt forces an unpleasant choice: Scale back road building and repairs, or raise taxes.

more...

[54anickel]

37. Jet fuel runs low at busy airports; supplies strained

http://www.freep.com/money/business/jetfuel11e_20050811.htm

WASHINGTON -- WASHINGTON -- Lost luggage, bad weather and now no fuel?


While fliers haven't yet had to add that problem to the list of headaches associated with air travel, it might not be far away. Airports in Arizona, California, Florida and Nevada recently came within a few days -- and at times within hours -- of running out of jet fuel.


Because of supply bottlenecks, airlines were forced to fly in extra fuel from other markets and scramble for deliveries by truck. But these are expensive, short-term fixes that do not address what airline executives consider to be the underlying problem: With passenger traffic rising above pre-9/11 levels, the nation's aviation business is slowly outgrowing the infrastructure that fuels it.


What started as routine supply tightness in these markets quickly snowballed following disruptive events that included a hurricane, a canceled fuel shipment and, ironically, the airlines' own efforts to prevent shortages, according to several airline executives.


Late July and early August were "unprecedented for Southwest for the number of cities where we've had to manage supply problems," said Glenn Hipp, director of fuel purchasing and inventory management at Dallas-based Southwest Airlines Co. AMR Corp.'s American Airlines, UAL Corp.'s United Airlines and America West Holdings Corp. also said there has been recent supply trouble.

more....

Let's hope the don't start to read that "E" on the fuel gauge as meaning "enough". Can't exactly get out and push, can ya.

[54anickel]

11. 10:17 and happy happy all around

Dow 10,641.87 +47.46 (+0.45%)
Nasdaq 2,165.80 +7.99 (+0.37%)
S&P 500 1,234.53 +5.40 (+0.44%)
10-yr Bond 4.378% -0.03
30-yr Bond 4.554% -0.03
NYSE Volume 286,881,000
Nasdaq Volume 272,293,000

10:00AM : Equities are still on the offensive as the bulk of sector leadership remains positive... Pacing the way higher has been Energy, taking full advantage of new highs in oil prices, while a weaker dollar, in addition to a UBS upgrade on Alcoa (AA 29.51 +0.64), has also made the Materials sector more attractive... Health Care has been an influential leader to the upside, benefiting from a rebound in biotech, solid follow-through in HMOs and a 4.4% surge in Hospira (HSP 39.45 +1.65), which has beaten analysts' Q2 forecasts and issued upside FY05 guidance...
Consumer Discretionary has benefited from Target's (TGT 56.44 +0.90) strong Q2 report while interest-rate sensitive areas like Financial and Utilities have shown relative strength amid a recovery in bonds... Technology, however, has recently inched into the red, as analyst downgrades on Intel (INTC 26.40 -0.48) and Novellus Systems (NVLS 26.47 -0.66) offset a 2.0% surge in Qualcomm (QCOM 40.05 +0.84), which is acquiring Flarion Technologies for $600 mln... DJTA +0.5, DJUA +0.3, DOT +0.1, Nasdaq 100 +0.3, SOX -0.3, S&P Midcap 400 +0.5, XOI +0.9, NYSE Adv/Dec 1556/959, Nasdaq Adv/Dec 1155/1161

9:40AM : Market opens modestly higher, finding some support from encouraging economic data... July retail sales surged 1.8%, slightly less than the expected 2.0% increase but above June's strong 1.7% gain, due in large part to the auto companies' "employee discount pricing" programs...

Excluding auto sales, which turned in the strongest growth in almost four years, a July sales increase of 0.3% also missed forecasts (consensus +0.6%); but June's gain was upwardly revised to +0.9% (from +0.7%), as the overall data reflect very strong trends with regard to consumption patterns and should set the stage for a big Q3 GDP gain... Separately, June business inventories (consensus +0.1%) will be released at 10:00 ET...

9:15AM : S&P futures vs fair value: +1.8. Nasdaq futures vs fair value: +2.0.

9:00AM : S&P futures vs fair value: +1.8. Nasdaq futures vs fair value: +2.5. Futures trade still off early highs, as oil prices creep back above $65/bbl, but continue to trade above fair value, indicating a slightly higher open for the cash market... Meanwhile, chip stocks could be under pressure after Goldman Sachs lowered their rating on Intel (INTC) and Freescale Semi (FSL) and JP Morgan downgraded Novellus Systems (NVLS) while a UBS upgrade on Alcoa (AA) and better than expected Q2 earnings from Target (TGT) may provide support for blue chips

8:34AM : S&P futures vs fair value: +1.7. Nasdaq futures vs fair value: +2.0. Futures trade pulls back a bit following economic data, now suggesting a more subdued start for the indices... July retail sales rose 1.8%, below expectations of 2.0% but above last month's 1.7% rise, while sales ex-auto rose 0.3%, below forecasts of +0.6% while June's figure was revised upward to 0.9% from 0.7%... Initials claims fell 6K to 308K (consensus 315K)... Bonds, which were under modest pressure ahead of the data, have reversed course, as the 10-yr note is now up 2 ticks to yield 4.38%

8:00AM : S&P futures vs fair value: +4.0. Nasdaq futures vs fair value: +6.5. Futures market versus fair value suggesting a higher open for the cash market as investors await a report that may show retail sales rose the most in a year... At 8:30 ET, July retail sales (consensus +2.0%), ex-auto (consensus +0.6%) and initial claims (consensus 315K) will be released... Perhaps also providing some early support may be the opportunity to find better entry points for stocks following yesterday's oil-influenced reversal that spoiled an early market rally

[54anickel]

12. As Hedge Funds Go Mainstream, Risk Is Magnified

http://www.washingtonpost.com/wp-dyn/content/article/2005/08/10/AR2005081002092.html

NEW YORK -- Hedge funds used to reek of exclusivity. They were run by the most cunning traders on Wall Street, who employed exotic trading techniques designed to make money regardless of whether markets rose, fell or stayed flat. Their clients included only the super-rich.

Those days are over.

Hedge funds are now a $1 trillion industry. Millions of middle-class people invest in them through pension funds or mutual funds.

The Virginia Retirement System, for example, recently increased its investments in hedge funds to $1.6 billion, or close to 4 percent of its assets. The Baltimore City Fire & Police Employees' Retirement System put $80 million into hedge funds last year, while the City of Baltimore Employees' Retirement System invested about $55 million, or 5 percent of its assets.

Some experts say pension funds and university endowments are plowing money into the high-fee funds at the worst possible time. Investment returns have dropped, inexperienced managers are piling in and some sophisticated investors appear to be pulling money out. Hedge funds make -- and risk -- big money by making big bets, mostly with borrowed money. They bet on movements in multiple markets, whether it be in stocks, bonds, currencies, commodities, options, derivatives or any combination of the above.

more...


Greenspin starting to worry a bit about his once darling hedge funds and derivatives? Seems to have changed his tune this year.

http://www.washingtonpost.com/wp-dyn/content/article/2005/06/09/AR2005060902077.html

snip>

With a trillion dollars in assets leveraged up to the hilt, hedge fund capital has become the x-factor in virtually every market you can think of -- stocks, bonds, commodities, currencies, futures, options, derivatives and swaps. These unregulated pools of global capital now account for an enormous portion of daily trading volumes, a sizable percentage of the profits of Wall Street investment houses, and a worrisome share of the credit exposure of major banks. The people who run these funds take home annual compensation that makes corporate chief executives look like pikers -- $1 billion last year in the case of Edward Lampert of ESL Investments, according to Institutional Investor.

But to hear it from Mr. Greenspan -- who has lavishly praised them for making global financial markets more liquid, more efficient and more shock-resistant -- hedge funds are headed for a fall.

When they were small and new, Greenspan explained, hedge funds could achieve above-average returns by finding small inefficiencies in the markets, buying up financial risk that was priced too low or selling short risk that was priced too high. To identify these anomalies, hedge fund traders relied on sophisticated computer models and historical data to calculate probabilities and correlations out to the second decimal point. And to fully leverage this knowledge, they relied increasingly on complex derivative instruments to slice and dice and repackage various kinds of risks.

But, in time, as more money poured into more funds, all looking to profit from the same anomalies, the chance to make above-average returns began to disappear. As a result, "significant numbers of trading strategies are already destined to prove disappointing," according to Greenspan. So far this year, the average return has been nil.

"Consequently, after its recent very rapid advance, the hedge fund industry could temporarily shrink, and many wealthy fund managers and investors could become less wealthy," Greenspan explained to his Beijing audience via satellite hookup. "But so long as banks and other lenders to these ventures are managing their credit risks effectively, this necessary adjustment should not pose a threat to financial stability."

Greenspan's message was clear: Don't look to the Fed to ride to the rescue with arms full of cheap money and implicit guarantees when hedge fund investors start rushing for the exits. We may have erred in that direction in 1998 by nudging Wall Street to prevent the collapse of Long-Term Capital Management, an early hedge fund. But this time, you're on your own.

more...


http://www.federalreserve.gov/boarddocs/speeches/2005/20050505/default.htm

snip>

The Growing Role of Hedge Funds in Derivatives Markets and the Financial System Generally
Of course, much of the unease about credit risk transfer outside the banking system reflects the growing role that hedge funds play in those markets and in the financial system generally. Although comprehensive data on the size of the hedge fund sector do not exist, total assets under management are estimated to be around $1 trillion. Inflows to hedge funds have been especially heavy since 2001, as investors have sought alternatives to long-only investment strategies in the wake of the bursting of the equity bubble. By some estimates, the size of the hedge fund sector doubled between 2001 and 2004. A substantial portion of the inflows to hedge funds in recent years reportedly has come from pension funds, endowments, and other institutional investors rather than from wealthy individuals.

Hedge funds have become increasingly valuable in our financial markets. They actively pursue arbitrage opportunities across markets and in the process often reduce or eliminate mispricing of financial assets. Their willingness to take short positions can act as an antidote to the sometimes-excessive enthusiasm of long-only investors. Perhaps most important, they often provide valuable liquidity to financial markets, both in normal market conditions and especially during periods of stress. They can ordinarily perform these functions more effectively than other types of financial intermediaries because their investors often have a greater appetite for risk and because they are largely free from regulatory constraints on investment strategies.

But some legitimate concerns have been expressed about the possible adverse effect of hedge funds' activities on market liquidity in some circumstances. One such concern is the potential for rapid outflows from the sector in the event that returns prove disappointing. Disappointments seem highly likely given the number of recent investors in this sector, all seeking arbitrage opportunities that of necessity will diminish as more capital is directed to exploiting them. Furthermore, some (perhaps many) hedge fund managers are likely to prove incapable of delivering the returns that investors apparently expect. Indeed, investors have already forced many hedge funds to fold after producing disappointing returns. Provided that investors do not force exiting funds to suddenly liquidate their assets, such exits contribute to the efficiency of the financial system and do not adversely affect market liquidity. Historically, investors have not been able to force the sudden liquidation of a hedge fund because investments have been subject to lengthy redemption or "lock up" requirements. However, there are reports that institutional investors have been able to negotiate much shorter redemption periods. If institutional money proves to be "hot money," hedge funds could become subject to funding pressures that would impair their ability to supply liquidity to markets and might cause them to add to demands on market liquidity.

Another circumstance in which hedge funds could negatively affect market liquidity is if they became so leveraged that adverse market movements could lead to their failure and force their counterparties to close out their positions and liquidate their collateral. For example, the fear of the market effects of closeout and liquidation of LTCM's very large net positions motivated its counterparties to recapitalize the hedge fund in 1998. LTCM was able to become so large and so highly leveraged because its derivatives and repo market counterparties, perhaps awed by the reputations of its principals, failed to effectively manage their credit risk to LTCM.

In the wake of the LTCM episode, the large banks and securities firms that were counterparties to hedge funds strengthened their management of hedge fund risk very significantly. Those improvements were motivated by their self-interest, which was reinforced by recommendations from their prudential supervisors and from the Counterparty Risk Management Policy Group (CRMPG), a group of twelve banks and securities firms that were among the most significant counterparties to hedge funds.4 However, recently there have been reports that competitive pressures have resulted in some weakening of risk-management practices.

more...

[54anickel]

14. Make my investment riskier, please

http://money.cnn.com/2005/08/10/markets/investor_risk/index.htm

Hedge fund managers say investors want them to take more risk -- but at what price?
August 10, 2005: 4:44 PM EDT
by Amanda Cantrell, CNN/Money staff writer

NEW YORK (CNN/Money) - What goes up must come down ... but some hedge fund investors have forgotten that.

Though returns are improving, especially after July's gains, many indexes that track hedge funds are still hovering in the 2-3 percent range per year. Some investors are growing impatient, particularly in light of the fees they're paying, and are starting to demand that managers take on a little more risk to boost their returns.

Some managers, particularly those who run smaller funds, are beginning to field requests from investors for more concentrated portfolios, which are riskier by nature because they are less diversified, and for more leverage, or borrowing money to invest.

But that has managers worried. As one industry vet pointed out, investors who want their managers to take on more risk are obviously looking for bigger gains and are not thinking about the losses they could incur.

"There is a huge set of investors out there that think that hedge funds' return patterns will skew to the positive, regardless of volatility, and that's just not the case," said a hedge fund professional who asked not to be identified. "The other reason is, there are a lot of investors who think that under all circumstances, higher risk equals higher return, and that's not always the case."

more...

[loudsue]

32. What ever happened to PRUDENT fund managers?

Now it's just a crap shoot, and they're gambling with everyone's retirement!

Geeez! It's like mass hysteria under this greed-happy neocon rulership by the republican party.

Thanks to the Marketeers for another great thread!! :applause:

:kick::kick::kick:

[ozymandius]

13. good morning again

We had a delay coming into work.... Nonetheless here's some numbers...


10:56
Dow 10,654.51 +60.10 (+0.57%)
Nasdaq 2,170.36 +12.55 (+0.58%)
S&P 500 1,236.18 +7.05 (+0.57%)
10-Yr Bond 43.83 -0.21 (-0.48%)
NYSE Volume 483,428,000
Nasdaq Volume 459,507,000

10:30AM: Indices spike to session highs, spearhead by a turnaround in Technology... Since the last update, a rebound in Semiconductor as well as strong momentum in Software (i.e. MSFT, ADBE) and Hardware (i.e. IBM, HPQ) has given the market a boost...

Perhaps providing some additional support behind the market's recovery efforts following yesterday's oil-induced reversal, has been a modest pullback in oil prices to below $65/bbl...

The commodity hit a new record of $65.30/bbl in overnight trading even as the IEA lowered China's 2005 oil demand forecast to 4.9% from earlier (Apr)estimates of 7.9% growth and well below last year's 14% surge in China oil demand...SOX +0.5, NYSE Adv/Dec 1894/934, Nasdaq Adv/Dec 1483/1119

10:00AM: Equities are still on the offensive as the bulk of sector leadership remains positive... Pacing the way higher has been Energy, taking full advantage of new highs in oil prices, while a weaker dollar, in addition to a UBS upgrade on Alcoa (AA 29.51 +0.64), has also made the Materials sector more attractive... Health Care has been an influential leader to the upside, benefiting from a rebound in biotech, solid follow-through in HMOs and a 4.4% surge in Hospira (HSP 39.45 +1.65), which has beaten analysts' Q2 forecasts and issued upside FY05 guidance...

Consumer Discretionary has benefited from Target's (TGT 56.44 +0.90) strong Q2 report while interest-rate sensitive areas like Financial and Utilities have shown relative strength amid a recovery in bonds... Technology, however, has recently inched into the red, as analyst downgrades on Intel (INTC 26.40 -0.48) and Novellus Systems (NVLS 26.47 -0.66) offset a 2.0% surge in Qualcomm (QCOM 40.05 +0.84), which is acquiring Flarion Technologies for $600 mln...

[54anickel]

15. Inflationists missing the big picture

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=45539

snip>

Now, back to the future. There are basically two camps on how the sharp end of the Great Recession will play out over the next ten or so years. The inflationists argue for a surge in inflation. Like that 1970’s show, irresponsible government and quasi-government institutions will print vast quantities of valueless fiat currency in the vain attempt to anesthetize the voting populace from any and all economic pain. On the other hand, the deflationists contend that the next decade will feel more like the desperate 1930’s. A few well-placed mortals cannot overcome the Kondratieff cycle of market economies, they say. The inevitable aftermath of the feel-good 1982-2000 “autumn” can only be a dark, deflationary winter.

Gross domestic product, trade deficits, trillions in debt, central banks, international asset, labor, and goods markets--what can be bigger than the global economy? Here the inflationists miss the boat on one important point. The crux of their argument stems in their contention that central banks, most notably the US Federal Reserve Bank, one of the most powerful quasi-government institutions in the world, will never let deflation occur. Everybody knows that deflation renders central banks powerless. Their most potent weapon, the level of short-term interest rates, then become ineffective because zero is as low as they can go. When prices are falling, and people cannot earn money in a bank account, they will just withdraw it and stuff it in their safe deposit boxes. Thus, the “fed” will just create money out of thin air in their own bank account. Computers are much faster than printing presses to this end.

The implied omnipotence of central banks is an incorrect characterization. Central banks, including the USA’s and China’s, do not hold the commanding heights over their own economies, let alone over the global economy. There are other, bigger players, ready to overrule the central bank. Most correctly take it for granted that the Communist Party has this power in China. To forget or dismiss that the same power exists in the USA is a serious mistake. Right now, the USA is the world’s only superpower, and its money is the world’s reserve currency. A volatile dollar, suffering from chronic trade deficits, and stoking fears of (but not quite the quantity of) 1970’s style inflation, would jeopardize the dollar’s reserve status, and thus undermine political and military global primacy. You cannot be a world power if your highly visible currency loses value and drags down your economy with it. Germany, with its hyperinflation in the early 1920’s, is an extreme example. Also, recall the American “malaise” versus Soviet-style totalitarianism in the stagflationary 1970’s. If there were a currency crisis in the next decade, which could involve the mere threat of sudden devaluation, let alone an actual one like Argentina had just a few years ago, do you think the US government would stand idly by and let the dollar crash in the currency markets? Elected government officials like and will continue to jealously guard their positions of power in Washington, DC. As they feel that power dropping with the dollar’s value, are they going to delegate economy fixing authority to a recession–phobic federal reserve? Not a chance. The US federal reserve does not operate in a political vacuum.

How would the US government fight a dollar crisis? Like backward looking generals, it would fight the last war. There was a dollar crisis in the 1970s, with the US going off the gold standard, oil embargos, soaring inflation, mobbed gasoline stations, recessions, stagflation, exponential precious metals prices, and WIN (Whip Inflation Now) buttons. Eventually the elected politicians in the US were forced to act strongly. Along came Paul Volcker, appointed to chairmanship of the federal reserve, armed with a single mindedness to destroy inflation, and determined to increase interest rates regardless of the economic cost. He provided a spectacular economic discontinuity in 1979-80. The resulting high real interest rates created benign disinflation from the mid 1980s to the late 1990s. A 2010 (to guess on a year) administration would see that paradigm, and think that we could do it again. The heat would be turned on the federal reserve to increase short term interest rates to save the dollar. While an outright seizure of the federal reserve might not be politically feasible, more subtle pressures might be applied. Executive and legislative big shots could “make happen” forced resignations and appointments of more aggressive federal reserve board members. What could do the trick is a simple “nudge nudge, wink wink, if you don’t go along with us or resign, we’ve heard of many hellacious IRS audits recently.” Regardless of the actual power mechanism, the US federal reserve board members ultimately serve elected politicians.

The result might not be the same next time, since all other things will not be equal to the 1970s USA. A scenario of downsized wages and benefits, unsustainably high consumer, corporate, and government debt loads, and the subsequent cascade of bankruptcies and credit destruction could mean that inflation drops below zero for an extended period of time—even ten months, let alone 10 years, would feel like a long time—but that’s another article. Even now, the more I hear protests that the US is not like the deflationary Japan of the 1990s, the more we’re turning Japanese. I have read that elected politicians would have no stomach to risk serious recession(s) by creating an environment in which real interest rates surge. I’m not confident that the logic would match political reality. Interest rate hawks might have a strong political ally. I see the huge baby boomer segment of the population increasingly demand investment income, as opposed to capital appreciation. To those millions of registered voters with nonzero portfolios, increasing real interest rates would be a GOOD thing. The inflation busters could also be cheered by an impatient citizenry wanting the government to do something NOW about an inflation scare (but not reality) highlighted by volatile gasoline prices. The inflationists counter that the US government would not want to raise taxes, and instead inflate away, its debt. Oh, really? Rather than risk superpower status, why not raise taxes in a politically palatable way? You think politicians are not clever enough to pull it off? “It’s all China’s fault that we’re in such a mess! And India! And everyone else! Let’s do right for homegrown American products. An across the board tariff on all imported goods and services! Let’s help American workers! Let’s get America back on its feet again.” This is one scenario out of many that I can envision in which an inflation and deflation combine to devastate the standard of living in the US, thus confounding both the inflationists and deflationists. Markets enjoy maximizing investor frustration.

more...

[54anickel]

16. Crude Oil Rises as IEA Says High Prices Aren't Slowing Demand

http://www.bloomberg.com/apps/news?pid=10000087&sid=aipT9OJUq12o&refer=top_world_news

Aug. 11 (Bloomberg) -- Crude oil rose, trading near a record $65.30 a barrel in New York, after the International Energy Agency said surging prices have done little to restrain demand.

The IEA said consumption this year will increase 2 percent, or 1.6 million barrels a day. High prices ``haven't completely choked off oil demand growth,'' the Paris-based adviser to 26 industrialized nations said in a monthly report today. Iran, the second-largest producer in OPEC, resumed uranium enrichment yesterday, risking sanctions by the United Nations.

``As long as the market can't see that high prices are biting, it will try'' to rise further, said Tor Kartevold, an oil analyst at Statoil ASA, Norway's largest oil company. ``With geopolitical uncertainty in the Middle East, it's an extremely dangerous combination.''

Crude oil for September delivery gained 32 cents to $65.22 a barrel after earlier touching $65.30 a barrel, the highest price since the contract debuted on the New York Mercantile Exchange in 1983. Prices have almost doubled from the end of 2003. Prices averaged less than $19 from 1995 through 1999.

more...

[54anickel]

29. Oil surges to $66

http://biz.yahoo.com/rb/050811/markets_oil.html?.v=7

LONDON (Reuters) - Oil charged to $66 to a new high on Thursday as Iran's nuclear work put it at odds with the United Nation's atomic watchdog and more U.S. refinery snags threatened gasoline supplies to the world's biggest consumer.

Earlier the International Energy Agency said non-OPEC output was falling short of expectations, compounding supply concerns.

U.S. light sweet crude was up $1 at $65.90 at 1540 GMT after hitting a record-high of $66.00. London Brent was up $1.55 at $65.54 after touching $65.66.

"The presence of significant headline risk, most particularly from Iran's international relations, the Atlantic hurricane season and from tightness in refining, is continuing to support prices at higher levels," said Barclays Capital.

In Vienna, the board of governors of the International Atomic Energy Agency approved a resolution demanding that Iran suspend all nuclear activities, a diplomat said.

EU diplomats said if OPEC's second biggest producer failed to comply with the resolution they would push for Iran to be referred to the UN Security Council for punitive action.

REFINERY STRAIN

more...

[54anickel]

18. COMEX gold rallies early on fund, dealer buying

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=MTFH30455_2005-08-11_14-35-44_N11377126

NEW YORK, Aug 11 (Reuters) - Gold futures in New York raced to a six-week high on Thursday morning, breaking through key short-term resistance, as a weak dollar and soaring crude oil attracted investors to hard assets like the precious metals.

At 10:13 a.m. EDT, gold for December delivery <GCZ5> on the New York Mercantile Exchange was up $4.60 at $446.60 an ounce. The session range by midmorning ran from $442.10 to $446.80 -- a level not seen since June 28.

Widespread fund and dealer buying shoved gold through the $445 mark and prices then stretched higher before commission-house selling capped the rise.

"This is a classic breakout," said one floor broker. "It's a lot of hedge buying -- you look at crude at $65 a barrel, and if that isn't inflationary, I don't know what is."

more...

[54anickel]

20. Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse

I don't know if I've "officially" posted this one to the SMW or not. I've posted it in a few other discussions on DU. Posted it late last night to yesterday's thread in a reply to LoudSue who hadn't seen it. So just in case I didn't post it to SMW, here it is. Sorry if it's redundant, but it's important with all that's been going on in the news these days.

http://usa.mediamonitors.net/content/view/full/17450

snip>

In 2003 the global community witnessed a combination of petrodollar warfare and oil depletion warfare. The majority of the world's governments – especially the E.U., Russia and China – were not amused – and neither are the U.S. soldiers who are currently stationed inside a hostile Iraq. In 2002 I wrote an award-winning online essay that asserted Saddam Hussein sealed his fate when he announced on September 2000 that Iraq was no longer going to accept dollars for oil being sold under the UN's Oil-for-Food program, and decided to switch to the euro as Iraq's oil export currency.<4> Indeed, my original pre-war hypothesis was validated in a Financial Times article dated June 5, 2003, which confirmed Iraqi oil sales returning to the international markets were once again denominated in U.S. dollars – not euros.

The tender, for which bids are due by June 10, switches the transaction back to dollars -- the international currency of oil sales - despite the greenback's recent fall in value. Saddam Hussein in 2000 insisted Iraq's oil be sold for euros, a political move, but one that improved Iraq's recent earnings thanks to the rise in the value of the euro against the dollar. <5>

The Bush administration implemented this currency transition despite the adverse impact on profits from Iraqi's export oil sales.<6> (In mid-2003 the euro was valued approx. 13% higher than the dollar, and thus significantly impacted the ability of future oil proceeds to rebuild Iraq's infrastructure). Not surprisingly, this detail has never been mentioned in the five U.S. major media conglomerates who control 90% of information flow in the U.S., but confirmation of this vital fact provides insight into one of the crucial – yet overlooked – rationales for 2003 the Iraq war.

snip>

Indeed, there are good reasons for U.S. military commanders to be 'horrified' at the prospects of attacking Iran. In the December 2004 issue of the Atlantic Monthly, James Fallows reported that numerous high-level war-gaming sessions had recently been completed by Sam Gardiner, a retired Air Force colonel who has run war games at the National War College for the past two decades.<9> Col. Gardiner summarized the outcome of these war games with this statement, "After all this effort, I am left with two simple sentences for policymakers: You have no military solution for the issues of Iran. And you have to make diplomacy work." Despite Col. Gardiner's warnings, yet another story appeared in early 2005 that reiterated this administration's intentions towards Iran. Investigative reporter Seymour Hersh's article in The New Yorker included interviews with various high-level U.S. intelligence sources. Hersh wrote:

In my interviews , I was repeatedly told that the next strategic target was Iran. Everyone is saying, 'You can't be serious about targeting Iran. Look at Iraq,' the former intelligence official told me. But the say, 'We've got some lessons learned – not militarily, but how we did it politically. We're not going to rely on agency pissants.' No loose ends, and that's why the C.I.A. is out of there. <10>

The most recent, and by far the most troubling, was an article in The American Conservative by intelligence analyst Philip Giraldi. His article, "In Case of Emergency, Nuke Iran," suggested the resurrection of active U.S. military planning against Iran – but with the shocking disclosure that in the event of another 9/11-type terrorist attack on U.S. soil, Vice President Dick Cheney's office wants the Pentagon to be prepared to launch a potential tactical nuclear attack on Iran – even if the Iranian government was not involved with any such terrorist attack against the U.S.:

more...

[loudsue]

33. THIS IS A MUST READ ARTICLE!! Thanks, 54anickel!!

:hi: I read it last night, and I've forwarded the thing to numerous loved ones -- who I HOPE will be wise enough to take notice!

:kick::kick::kick:

[54anickel]

38. Thank you for pointing out the fact that I must have missed posting it

here. :hi:

[ramapo]

52. Petrodollar Warfare is one of our own

The article is an excerpt from his book. He posts some in the Energy forum and was formerly GoreN4.

When I checked a few weeks ago the book wasn;t available but I bet it is now. I'll be ordering it to add to my pile.

[54anickel]

68. Thanks for pointing that out ramapo. I remember GoreN4 - should

have known. I remember reading some of his posts about the book in the econ forum quite a while ago. Another DUer way ahead of the games - that's what I love about this place.

[54anickel]

21. China's Trade Surplus Widened to $10.4 Bln in July (Update4)

http://www.bloomberg.com/apps/news?pid=10000080&sid=aVagmx2gWeIw&refer=asia

Aug. 11 (Bloomberg) -- China had its second-highest trade surplus on record in July, reflecting a surge in exports that has led the U.S. and Europe to threaten sanctions.

The surplus widened to $10.4 billion from $1.97 billion a year earlier and $9.68 billion in June, the Beijing-based customs bureau said on its Web site today. Overseas sales rose 28.7 percent to $65.6 billion from a year earlier, more than double the 12.7 percent gain in imports.

Lawmakers in the U.S., China's biggest export market, say the Chinese government's July 21 revaluation of the yuan doesn't go far enough and the nation's exporters continue to benefit from an artificially weak currency. Rising overseas sales of computers, cell phones and clothing helped China's economy, Asia's biggest after Japan, triple in size in the past decade.

``The political pressure on China to keep moving is going to be very strong,'' said Brad Setser, a former economist with the U.S. Treasury who now works for Roubini Global Economics in New York. ``No country can export and just export. Economic forces or political forces will emerge to slow that down.''

China's exports rose 32 percent from a year earlier to $407.9 billion in the first seven months, the customs bureau said today, and Setser predicts they could reach $750 billion this year. Imports in the same period increased 13.8 percent to $358 billion and the trade surplus was $49.9 billion, surpassing the $32 billion reported for the whole of 2004.

more...

[54anickel]

23. Japan June Current Account Surplus Unexpectedly Rose (Update4)

http://www.bloomberg.com/apps/news?pid=10000101&sid=aXNuqa87qc2Y&refer=japan

Aug. 11 (Bloomberg) -- Japan's current account surplus unexpectedly rose in June as exports climbed, adding to evidence of strength in the world's second-largest economy.

The surplus increased 4.4 percent to 1.5 trillion yen ($13.6 billion), seasonally adjusted, from May, the Ministry of Finance said today in Tokyo. Exports climbed 3.9 percent, the biggest gain in more than a year, and imports rose 1.9 percent.

Demand for goods such as Toshiba Corp.'s memory chips, used in consumer electronics, is helping Japan overcome rising costs of oil and raw materials. A government report tomorrow may show that the economy expanded for a third straight quarter in the period to June 30, according to a Bloomberg survey of economists.

``Oil prices remain high and imports are rising, but Japan's exports in June showed a revival,'' said Yoshimasa Maruyama, a senior economist at BNP Paribas Securities in Tokyo.

Today's report adds to signs that Japan is overcoming the slowdown in exports that curbed growth in the first quarter of this year. The economy ``is expected to undergo a sustainable recovery,'' central bank Governor Toshihiko Fukui told reporters this week.

more...

[54anickel]

24. S Korean central bank upbeat on recovery

http://news.ft.com/cms/s/a4ab7630-0a4b-11da-aa9b-00000e2511c8.html

South Korea's central bank said Thursday it would consider raising interest rates if the economy fully recovered, hinting that a policy shift may be closer.


The comments, which came after the Bank of Korea left interest rates at a record-low 3.25 per cent for a ninth straight month, reflected growing optimism about the long-awaited recovery in domestic consumption.

Park Seung, the BoK governor, said at a briefing that a gradual recovery was under way, citing improved economic indicators. “If we are convinced the economy has entered a full-fledged recovery, we will immediately consider adjusting monetary policy.”

Government officials have become increasingly upbeat about the economic outlook, after annual gross domestic product growth exceeded expectations at 3.3 per cent in the second quarter, driven by a 2.7 per cent expansion in private consumption. “We expect the recovery to gather pace in the second half, as rising domestic spending offsets slowing export growth,” said Mr Park.

Export growth slowed to 11.4 per cent in the year to the end of July, sharply lower than the 31 per cent growth in 2004, as record oil prices take their toll on the world's fourth-largest crude importer.

more...

[54anickel]

22. Stock investors pour billions into Asia in bet that yuan will rise

http://www.iht.com/articles/2005/08/11/business/flow.php

International investors have been betting big that Asia's economies will get a lift from China's move last month to revalue its currency, the yuan, perplexing those analysts and economists who had argued that China's move would not have much effect.

In the past month, foreign investors have poured almost $6 billion into Asia's stock markets, with $1.2 billion entering last week, according to Nomura International, which tracks foreign trading data from Taiwan, South Korea, India, Thailand, Indonesia and the Philippines. That does not include the deluge of funds analysts say is flowing into Hong Kong, Singapore and Malaysia, which do not disclose data on foreign trading.

According to Emerging Portfolio Fund Research in Cambridge, Massachusetts, equity funds dedicated to Asia outside Japan received $370 million in new investments the week following China's revaluation and another $471 million the week after that.

That money is being spread far and wide. Last week, foreign fund mangers bought $519 million worth of stock in China's next-door neighbor, Taiwan, according to Nomura. They bought $244 million worth of stock farther away in Indonesia, a market roughly one-sixth the size of Taiwan's.

more...

[54anickel]

25. Soaring interest in Greenspan portraits (Puke alert)

Hey, I'd buy one for a dart board if they were cheap enuff!

http://money.cnn.com/2005/08/11/news/funny/fed_greenspan_art/index.htm

Erin Crowe, a 24-year-old University of Virginia graduate, has spent the better part of two years working on unauthorized portraits of Greenspan, The Washington Post said Thursday, with titles like "If You Say So," "I Gotta Tell Ya" and "Humpf."

"I've never had people respond so positively to my work," Crowe told the Post, whose paintings of the Federal Reserve boss have made a stir in Sag Harbor, Long Island, vacation home to many Greenspan-worshipping Wall Streeters.

Interest rates in the paintings are high and rising higher, the report said.

Gallery owner Sally Breen has sold all 18 paintings on display for prices ranging from $1,000 to $4,000, said the newspaper, and one prospective buyer toyed with the idea of commissioning Crowe to create a Greenspan portrait for an office lobby.

"I've never experienced anything like it," Breen told the newspaper. "I had one woman call, I don't know what she did for a living, but said Greenspan was her hero, and she had to have a painting."

more...

Hero?!?!?

[loudsue]

34. Snort! LOL! Great pic!

:rofl: Too funny!

[54anickel]

26. U.S. firms fear revenge after China's lost oil bid

http://www.iht.com/articles/2005/08/11/business/unocal.php

When China National Offshore Oil Corp., the Chinese-government-owned oil company, dropped its bid to buy Unocal earlier this month, it said that political opposition in Washington had scuttled the plan. The question that U.S. oil companies now face is whether they might someday suffer similar political retribution in their own dealings with foreign governments.

The fate of Unocal was finally settled on Wednesday when a majority of the company's shareholders approved a takeover offer of about $18 billion by Chevron. The battle has left a bitter taste among many in the oil and gas industry because of the hostility displayed by lawmakers and the consequences this might have for U.S. oil companies worldwide.

Unocal's vote ends months of uncertainty after Cnooc's takeover attempt sparked a fierce lobbying and political battle in Washington led by Chevron's allies in Congress. The struggle surrounding the takeover highlights how the question of access to oil and gas reserves remains one of the most sensitive and pressing that the industry is facing. On Wednesday, the same day as the vote, crude oil prices touched a new high of $65 a barrel in New York.

"It's a tremendous precedent-setter for a government to interfere and declare that national security is at stake," said Daniel Yergin, the president of Cambridge Energy Research Associates, an oil consultancy. "What is this going to mean for American oil companies from Algeria to Zanzibar?"

more...

[54anickel]

27. New yuan mechanism discloses China's mix of politics, economics

No Taiwanese or Hong Kong currency, but loonie and ruble are in the second tier

http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050811/RYUAN11/TPBusiness/MoneyMarkets

The People's Bank of China yesterday may have delivered a political statement within an economic disclosure.

snip>

The message Beijing sent yesterday may be more political than economic, however. Chinese officials, agitated that many media outlets viewed July's revaluation as a result of U.S. pressure, may be out to prove China is its own economic boss.

"They're infuriated that the media painted as a victory for the U.S.," Mr. Gunner said.

Notably absent from the basket are the currencies of Hong Kong and Taiwan, which China's government counts as its fourth- and seventh-largest trading partners, respectively. This is likely a result of the fact China doesn't recognize either as a separate country.

"These are obviously political issues," said Jeremy Friesen, senior currency strategist at RBC Dominion Securities Inc.

more...

[ozymandius]

28. Jeez. That didn't last long. What a pawltry rally.

12:19
Dow 10,601.58 +7.17 (+0.07%)
Nasdaq 2,160.78 +2.97 (+0.14%)
S&P 500 1,230.61 +1.48 (+0.12%)
10-Yr Bond 43.91 -0.13 (-0.30%)
NYSE Volume 827,231,000
Nasdaq Volume 737,915,000

11:30AM: Major averages off their best levels as oil prices again flirt with new record highs, but buyers remain in control of the early action... To that end, the market may be finding some support from the Energy sector... Even though it only accounts for about 8.8% of the total weighting on the S&P, expected Q2 earnings growth of 41% is by far the largest contribution to the S&P 500's overall growth rate, as the remaining nine economic sectors are only expected to combine for 8.0% growth...

The AMEX Oil Index (XOI 1003.15 +10.28), CBOE Oil Index (OIX 548.87 +4.90) and the PHLX Oil Service Sector Index (OSX 170.28 +1.03) have all hit historic highs this morning...NYSE Adv/Dec 2010/1010, Nasdaq Adv/Dec 1647/1126

[54anickel]

30. Heh, but oil's up and I guess it can go up higher cuz we ain't hurtin'

enuff to cut back on the demand! :crazy: Gonna squeeze til we bleeds!

[54anickel]

31. Gold futures climb to a 7-week high

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1123773530-e04f0f08-37074

SAN FRANCISCO (AFX) -- December gold gained more ground in New York to trade above $448 an ounce. Gold is at its highest since June 24 when prices climbed as high as $450. December gold was last at $448, up $6, or 1.4%. It climbed $2.20 on Wednesday. A decline in the U.S. dollar as well as record prices for oil, both of which point to a weaker economy, have provided support to the precious metals, which are often seen as a hedge against financial loss

Hey, don't they usually say "as a hedge against inflation"? Gold's up, bonds up, buck down, stocks flat (or being artificially supported). If it weren't for the flat markets I'd be quoting Julie - "Flight to quality".

[54anickel]

35. ChoicePoint investigation may widen

http://www.chron.com/cs/CDA/ssistory.mpl/business/3305395

ATLANTA - An informal Securities and Exchange Commission inquiry into stock trading by the two top executives at ChoicePoint appears to have turned into a full-blown investigation.

Evidence of that shift hinges on a subtle wording change used in an SEC filing this week by the Alpharetta, Ga.-based data warehousing company.

In earlier filings, ChoicePoint used the term "informal inquiry" when discussing the SEC probe of stock sales after an identity theft scam involving the firm's consumer database. But in a filing this week the company called it "an investigation."

snip>

The SEC has been looking into stock sales by Derek Smith, the company's chief executive, and Doug Curling, its president. The sales took place after an identity theft scam at the company was discovered last fall, but before it became public.

The two executives made a $17 million profit.

more...

[KoKo]

36. Consumers probably won't pull back spending until Oil hits $100 a barrel

Heard on CNBC from "PNC Financial Analyst" in a segment on how Oil is not affecting the consumer because their incomes are up so much in the last year and he doesn't expect any consumer pullback "until we get to the $100 a barrel range."

The CNBC anchor didn't bat an eye at that statement. But, my eyes started :crazy: I don't know what consumer's incomes are "up" except perhaps the outrageous salaries being paid to the financial analysts, bankers, VC's and Corporate Executives and Board Members. I guess they don't have to worry about heating and cooling their Mansions and vacation homes, but it's hard to think that this isn't going to hurt the pensioners and average person like you and I. And, you can only re-fi so many times to pay heating and health bills so there really is some big disconnect out there. Just an amazing disconnect out there with these stock pumpers.

[54anickel]

39. Heh, and wasn't the price of pain quoted last year $70 /bbl? Where

the heck are they getting this "incomes are up so much" BS from anyway. Last I heard real wages were down. CNBC are such freakin' whores.

[KayLaw]

55. Yep

I did a Google search for and found this from CNN/Money from last year. Notice what was said about $70 oil and increased interest rates:

October 12, 2004: 8:02 AM EDT

NEW YORK (CNN/Money) - Economists agree that oil prices have already spiked enough to take a bite out of the nation's economic growth. But what they can't agree on is whether this downswing could spiral into a full-blown recession.
- - - - -- - -


Oil futures on Tuesday moved above $54 a barrel for U.S. light crude, up from the fifth straight record close it hit Monday.
- - - - - -- - - - -

John Silvia, chief economist at Wachovia Securities, is another economist who believes it will take a combination of high oil prices and other factors, such as significantly higher interest rates, to actually spark a recession. But he says some of the worst-case scenarios for oil prices do worry him.

"I think if you had $70 oil, and the Fed were to continue to raise interest rates to fight inflation, that could cause a problem," Silvia said. "I think there's a certain breaking point where that the price of energy alone is so high that it changes the psychology of both businesses and consumers. I think $80 would probably break the back."

[54anickel]

70. My how quickly things change. But hey, Chopper Ben says we're

doin' fine! Nothing to worry about.

So, where are all those economists who last year were saying this was temporary and that oil would be back down to $35 -40/bbl anyway?

They will milk the higher prices for all their worth for as long as they can.
Demand hasn't susided? - Raise the price!
Consumers still spending like there's no tomorrow - Raise it again!

They are raking in profits hand over fist and when the recession does finally hit to slow down demand they've got all that extra funding coming in Shrub's Energy Bill. See, they can't loose.

[ozymandius]

46. Well, you know, Bill Gates made more money last year.

You need to use the most popular equation to determine income averages: Bill Gates' income (huge) + my income (ha ha)/2=two billionaires. Simple enough eh?

[54anickel]

40. DON'T FALL FOR OIL/GAS HYPE

http://www.nypost.com/business/26815.htm

August 11, 2005 -- BLAME the media for gasoline hitting a record $2.37 a gallon this week and crude oil peaking at an unprecedented $65.01 yesterday.
Why? Because instead of being a watchdog, the press has become a lapdog and dupe of the speculators and oil companies that want gasoline prices to stay high.

Here are some facts and some fiction about the current state of the oil market.

Hype: There's a shortage of oil, and that's why we are paying so much at the pump.

Fact: A government report released yesterday said the U.S. now has 320.8 million barrels of oil in stockpiles.

more...

[trogdor]

44. Told y'all.

Speculators are responsible for a big chunk of the runup in crude prices. When it peaks, watch out. Anybody who's telling you to buy oil futures now is either an idiot or a crook - or both.

[54anickel]

41. IEA Cuts Oil Supply Estimates, Puts Strain on OPEC (Update1)

http://www.bloomberg.com/apps/news?pid=10000103&sid=aTfeNgZhS5Xg&refer=us

Aug. 11 (Bloomberg) -- The International Energy Agency, an adviser to 26 oil-consuming countries, cut its forecasts for supply from Russia and other non-OPEC countries, placing further strain on supplies from the producer group.

The agency lowered its 2005 non-OPEC supply forecast by about 200,000 barrels a day, prompted by unscheduled shutdowns in the U.S. Gulf of Mexico, Norway and U.K., and the 2006 estimate by 400,000 barrels a day. It also cut a projection for world demand this year, in part because of revisions to historical U.S. data.

snip>

This year's world oil demand growth was left intact at 2 percent, or 1.6 million barrels a day. The level of consumption this year was lowered by 150,000 barrels a day from a month ago, to 83.7 million barrels a day, mainly because of historical changes to U.S. demand, the IEA said.

snip>

Swelled by rising oil profits, Exxon Mobil Corp., BP Plc and Royal Dutch Shell Plc are now three of the world's five largest publicly traded companies, when ranked by market value. General Electric Co. and Microsoft Corp. are the other two.

Saudi Arabia, the biggest oil-exporting nation, will generate some $150 billion in oil sales this year, a third more than last year, according to a U.S. government forecast.

An energy bill signed by U.S. President George W. Bush this week failed to raise fuel economy standards for cars and light trucks. The bill, passed after four years wrangling, includes $14.5 billion in tax breaks for energy producers over 10 years and a tax credit for people who buy fuel-efficient vehicles.

more...

[54anickel]

42. Watching the Economy Crumble - Ugh

http://www.vdare.com/asp/printPage.asp?url=http://www.vdare.com/roberts/050808_crumble.htm

The US continues its descent into the Third World, but you would never know it from news reports of the Bureau of Labor Statistics’ July payroll jobs release.

The media gives a bare bones jobs report that is misleading. The public heard that 207,000 jobs were created in July. If not a reassuring figure, at least it is not a disturbing one. On the surface things look to be pretty much OK. It is when you look into the composition of these jobs that the concern arises.

Of the new jobs, 26,000 (about 13%) are tax-supported government jobs. That leaves 181,000 private sector jobs. Of these private sector jobs, 177,000, or 98%, are in the domestic service sector.

Here is the breakdown of the major categories: 30,000 food servers and bartenders, 28,000 health care and social assistance, 12,000 real estate, 6,000 credit intermediation, 8,000 transit and ground passenger transportation, 50,000 retail trade and 8,000 wholesale trade.

(There were 7,000 construction jobs, most of which were filled by Mexicans.)

more...

[54anickel]

43. Greenspan Delivers Housing Bust (Sorry about the source)

http://www.newsmax.com/archives/ic/2005/8/9/170207.shtml

Even before the Federal Reserve announced its 10th recent increase in interest rates Tuesday, key financial players already knew that the housing bust had arrived.

Home prices continue to rise, and new building is frenetic – but that's typical of the last gasps of a bubble.

At the same time, those on the inside at major home-building companies are selling shares of their companies' stock – and at a brisk pace.

snip>

For the first half of this year, executives at home-building companies – those with market caps exceeding $500 million – sold off a total of $671 million worth of stock, compared to $189 million for the same period last year, according to Forbes magazine.

more...

[54anickel]

45. 1:11 numbers and yada then I gotta run. Will be out in the morning

tomorrow - hope to be back for the post lunch check in :hi:

Dow 10,626.74 +32.33 (+0.31%)
Nasdaq 2,162.75 +4.94 (+0.23%)
S&P 500 1,232.13 +3.00 (+0.24%)
10-yr Bond 4.382% -0.02
30-yr Bond 4.574% -0.01
NYSE Volume 1,000,141,000
Nasdaq Volume 888,752,000

1:00PM : More of the same for stocks as modest buying efforts struggle to keep the major averages trading above the flat line... Aside from high oil prices preventing equities from gaining more aggressive upside traction, lackluster performances from three of the most influential sectors - Financial (-0.1%), Technology (+0.1%) and Consumer Discretionary (-0.2%) - continue to underpin a sense of nervousness in the wake of yesterday's afternoon sell-off... NYSE Adv/Dec 1744/1406, Nasdaq Adv/Dec 1470/1384

12:30PM : Sellers show some resolve, sending the indices to levels not seen since around the open, as the market now clings to modest gains... In somewhat similar fashion to yesterday's action, which ran out of gas in afternoon trading amid ongoing momentum in crude oil futures (65.60/bbl +$0.70), early buying interest is finding it difficult to fight off delayed consolidation efforts... NYSE Adv/Dec 1881/1242, Nasdaq Adv/Dec 1544/1298

12:00PM : Market showing good resilience midday, as encouraging economic data and some upbeat corporate news helps investors find bargains across the board, even in the face of record oil prices... Sure, crude oil futures continue to hit new highs everyday, most recently flirting with $66/bbl (+1.5%) amid strength in natural gas prices and extending yesterday's 2.9% surge that took the momentum out of an early rally... To that end, investors appear to be focusing more at inflation trends and other economic data, as the economy continues to expand despite higher energy costs...:eyes:

Even though headline reads in July retail sales appeared to disappoint, the overall data reflect very strong trends with regard to consumption patterns and should set the stage for a big Q3 GDP gain... July retail sales surged 1.8% (consensus +2.0%), above June's strong 1.7% gain due in large part to the auto companies' "employee discount pricing" programs... Excluding autos, July sales increased 0.3% (consensus +0.6%), but June's gain was upwardly revised to +0.9% from +0.7%...

A low level of initial claims, which fell 6K to 314K (consensus 315K), reflecting continued improvement in the job market, has also helped validate the ongoing stream of upbeat economic data, as Q3 real GDP appears headed for an increase of 5% or more... Speaking of GDP, June business inventories, which were flat versus an expected 0.1% rise, could provide the basis for any revisions to Q2 GDP, which lost 2.3% in growth due to larger than expected inventory reductions... With regard to sector strength and weakness, Energy continues to pace the way to the upside, benefiting largely from record oil...

The Materials sector has turned in a strong performance, taking advantage of a UBS upgrade on Alcoa (AA 29.64 +0.77) and dollar weakness... Also benefiting from a declining greenback has been the Industrials sector while Consumer Discretionary has benefited from Target's (TGT 55.61 +0.07) strong Q2 report and a rebound in shares of Walt Disney (DIS 25.73 +0.26)... Technology has also traded higher, as strength in Software, Hardware and a 3.2% surge in Qualcomm (QCOM 40.45 +1.24), which is acquiring Flarion Technologies for $600 mln, have overshadowed analyst downgrades on Intel (INTC 26.58 -0.30) and Novellus Systems (NVLS 27.10 -0.03)...

Health Care also has been an influential leader, getting a boost from a rebound in biotech, follow-through buying interest in HMOs and strength in Hospira (HSP 39.45 +1.65), which beat analysts' Q2 expectations and issued upside FY05 guidance...DJTA +0.3, DJUA +0.7, DOT +0.6, Nasdaq 100 +0.8, Russell 2000 +0.3, SOX +0.5, S&P Midcap 400 +0.4, XOI +0.7, NYSE Adv/Dec 1881/1199, Nasdaq Adv/Dec 1601/1203

[ozymandius]

47. 2:02 rollercoaster update

Dow 10,616.63 +22.22 (+0.21%)
Nasdaq 2,161.63 +3.82 (+0.18%)
S&P 500 1,230.94 +1.81 (+0.15%)
10-Yr Bond 43.38 -0.66 (-1.50%)
NYSE Volume 1,148,772,000
Nasdaq Volume 1,013,967,000

[ozymandius]

48. Stocks Hold Gains As Market Watches Oil

Stocks Hold Gains As Market Watches Oil, Studies Smaller-Than-Expected Rise in Retail Sales

NEW YORK (AP) -- Stocks stayed in positive territory Thursday as investors kept a close watch on surging oil prices and studied a new report showing a smaller-than-expected rise in retail sales.

The market gave up some of its early gains in afternoon trading, as the price of oil momentarily crossed $66 a barrel. But analysts said that after a selloff triggered by a similar spike Wednesday, stocks had at least temporarily regained their footing.

While investors remain concerned about fuel prices, their return to buying reflects general optimism about the economy that has seen some stocks near record highs in recent weeks.

"For the markets, I think it's more of a nimble environment here, where stocks will be supported on minor pullbacks," said Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn. "Basically there are a lot of stocks that have been acting quite well, punching out to new highs. It's an indication of a market that has strong underpinnings."

more...

http://biz.yahoo.com/ap/050811/wall_street.html?.v=18

[ozymandius]

49. Oil Prices Briefly Touch $66 a Barrel

BUDAPEST, Hungary (AP) -- Oil prices rose briefly to $66 a barrel Thursday on concerns about gasoline supplies.

With inventory levels down, "gasoline will remain a key concern over the coming weeks," said Orrin Middleton, energy analyst at Barclays Capital in London.

The U.S. inventories report Wednesday showed a decline in gasoline stocks, triggering heightened concerns that a string of refinery shutdowns in the U.S. will make it difficult for gasoline supplies to meet peak summer demand.

Market sentiment was cooled by a report from the International Energy Agency forecasting slower global oil demand growth in 2005.

more...

http://biz.yahoo.com/ap/050811/oil_prices.html?.v=19

[ozymandius]

50. Traders must have heard about $66 oil.

2:16
Dow 10,595.53 +1.12 (+0.01%)
Nasdaq 2,157.82 +0.01 (0.00%)
S&P 500 1,228.53 -0.60 (-0.05%)
10-Yr Bond 4.339% -0.07
NYSE Volume 1,197,018,000
Nasdaq Volume 1,052,732,000

[ozymandius]

51. side of blather

2:00PM: Little changed since the last update, as investors keep there eyes on the price of oil heading into the close of commodities trading... Speaking of, commodities-related stocks continue to lead the way behind the market's lackluster performance... And strangely, of the 139 S&P groups, gold (+3.4%) and aluminum (+3.0%) have been the best performing groups, not oil, benefiting largely from weakness in the dollar...

The greenback has fallen to a 10-week low against the euro (1.2436) and a 6-week low against the yen*** (109.88) amid solid euro-zone growth figures, a disappointing headline read on July retail sales and strong follow-through buying in Japanese equities, which lifted the Nikkei 225 (+1.4%) to another new 52-week high... Diversified Metals and Mining stocks (+1.2%) have also surged as copper prices have hit all-time highs while gold futures have surpassed $450/ounce for the first time since mid March... NYSE Adv/Dec 1871/1330, Nasdaq Adv/Dec 1547/1349

***This would have been unthinkable for Japan to allow the yen to get so strong against the dollar just one year ago. I wonder what Japan has on its agenda?

[ozymandius]

53. 2:40 and back above the waterline

Dow 10,611.45 +17.04 (+0.16%)
Nasdaq 2,161.61 +3.80 (+0.18%)
S&P 500 1,230.72 +1.59 (+0.13%)
10-Yr Bond 43.42 -0.62 (-1.41%)
NYSE Volume 1,300,286,000
Nasdaq Volume 1,133,059,000

2:30PM: Indices holding onto slim gains as market internals still suggest a modestly positive tone to trading... Advancers on the NYSE outpace decliners by a 19 to 12 margin while advancing issues on the Nasdaq hold a 15 to 13 edge over declining issues... Meanwhile, the Dow, S&P and Nasdaq continue to trade above initial support levels but reserved buying efforts amid slower volume has not been enough to push the major averages through initial resistance levels of 10630, 1232 and 2165, respectively...NYSE Adv/Dec 1929/1285, Nasdaq Adv/Dec 1522/1395

[ozymandius]

54. into the witching hour

3:04
Dow 10,616.63 +22.22 (+0.21%)
Nasdaq 2,163.35 +5.54 (+0.26%)
S&P 500 1,231.28 +2.15 (+0.17%)
10-Yr Bond 4.342% -0.06
NYSE Volume 1,390,871,000
Nasdaq Volume 1,208,814,000

[ozymandius]

56. This is why it's called "The Witching Hour".

Anything can happen - and did.

3:32
Dow 10,665.21 +70.80 (+0.67%)
Nasdaq 2,171.36 +13.55 (+0.63%)
S&P 500 1,236.22 +7.09 (+0.58%)
10-Yr Bond 4.334% -0.07
NYSE Volume 1,559,045,000
Nasdaq Volume 1,338,476,000

[hatrack]

57. Let me guess - oil just plummeted to $9.00?

Oh, never mind . . .

[ozymandius]

58. $70/bbl here we come!!

The world wants America to hurt. So if we're not hurting at $66/bbl - they'll tighten the screws a little more.

[ozymandius]

59. Pixies go up-up-up.

3:39
Dow 10,674.42 +80.01 (+0.76%)
Nasdaq 2,172.44 +14.63 (+0.68%)
S&P 500 1,236.90 +7.77 (+0.63%)
10-Yr Bond 43.34 -0.70 (-1.59%)
NYSE Volume 1,603,300,000
Nasdaq Volume 1,375,118,000

[ozymandius]

60. and up

3:45
Dow 10,680.48 +86.07 (+0.81%)
Nasdaq 2,172.81 +15.00 (+0.70%)
S&P 500 1,236.93 +7.80 (+0.63%)
10-Yr Bond 43.34 -0.70 (-1.59%)
NYSE Volume 1,646,223,000
Nasdaq Volume 1,408,509,000

3:30PM: Market spikes higher going into the close, as renewed buying interest pushes the indices toward session highs... With oil playing havoc with equities again, the fact that crude oil futures closed off their best levels, albeit still up 1.4% at $65.82/bbl (+$0.92), coupled with benchmark yields recently closing near session lows at 4.33%, it appears investors have found some solace now that yesterday's main catalysts behind the market's reversal have stopped trading...

The broad-based moves to the upside have been further validated by strong leadership from influential sectors like Financial, Technology, Industrials and Health Care, which combined account for about 60% of the weighting on the S&P... NYSE Adv/Dec 1959/1316, Nasdaq Adv/Dec 1715/1263

[Mojorabbit]

61. Are there types

of mutual funds that are in foreign currency other than US that one can buy into? There does not seem to be anywhere to put ones money these days that will not devalue as the dollar falls in relation to other currencies. I have a fund that is in foreign bonds but that does not seem to be doing that great.

From what most economists seem to say and how "surprised" they seem to be when events occur that even I a novice can see coming I am not to keen on looking to have one guide me on where to put my cash. But truly, is there a type of fund in foreign currency and if so what would be the name of this type of fund so I can do some research. Yikes!What a news day! LOL

Thanks again for this thread. I never miss a day of it.

[Tace]

63. Foreign Sovereign Bonds Can Have A Double Benefit...

A higher return than Treasuries, in a currency that is appreciating vs. the dollar. This can lead to some pretty impressive returns.

[Mojorabbit]

74. Thank you both

I looked at all the links Ozy posted and looked up a bit on the foreign bonds and it is all over my head. I guess I need to talk to a professional broker before I go that route. Thanks for giving me something to go on! It is much appreciated.

[ozymandius]

64. Similar question yesterday.

The question regarded how one could open a bank account deniminated in euros. Some resources I found online offered banking and investment brokerage. Here's the relevant material from my post yesterday:

http://www.offshore.hsbc.com/1/2/international/current-accounts/cheque-deposit-account

http://www.swiss-bank-account-24.com/

http://www.aib.ie/servlet/ContentServer?pagename=AIB_Ireland/IHPHomepage

http://www.aibusa.com/servlet/ContentServer?pagename=AIB_USA/USA_Homepage

I can only offer hearsay - but I have heard from a reliable source that it is possible to purchase euro denominated assets over the net.

[ozymandius]

62. coming up to the close

3:52
Dow 10,672.67 +78.26 (+0.74%)
Nasdaq 2,173.19 +15.38 (+0.71%)
S&P 500 1,236.63 +7.50 (+0.61%)
10-Yr Bond 43.34 -0.70 (-1.59%)
NYSE Volume 1,701,211,000
Nasdaq Volume 1,452,756,000

[ozymandius]

65. closing numbers

Dow 10,685.89 +91.48 (+0.86%)
Nasdaq 2,174.55 +16.74 (+0.78%)
S&P 500 1,237.81 +8.68 (+0.71%)
10-Yr Bond 43.34 -0.70 (-1.59%)
NYSE Volume 1,865,990,000
Nasdaq Volume 1,535,278,000

blather to come...

[ozymandius]

66. blather

Close: Surprise, surprise, oil prices hit another new record; however, another round of encouraging economic data and plunging bond yields were enough to incite a broad-based rally that closed every sector in positive territory... Unlike yesterday, when the absence of economic data had bond traders looking for catalysts and left the door wide open for surging oil prices to take the steam out of an early market rally, the market had just enough reasons (e.g. lower borrowing costs, strong industry leadership) late today to keep sellers on the sidelines... Some short-covering probably didn't hurt either...

Before the bell, investors sifted through a report that showed retail sales in July checked in less than expected - news that initially weighed on sentiment... But upon further analysis of the data, participants realized that the overall report reflected very strong trends with regard to consumption patterns, which should set the stage for a larger Q3 GDP gain... Total July retail sales rose 1.8%m, below forecasts of +2.0% but above June's strong 1.7% gain, due largely to an extension of the auto companies' "employee discount pricing" programs...

Sales ex-autos rose 0.3%, also below economists' expectations (consensus +0.6%), but there was an upward revision to June's gain of 0.7% to 0.9%... Further validating that Q3 real GDP appears headed for an increase of 5% or more was a decline in initial claims, which fell 6K to 314K (consensus 315K) to suggest continued improvement in the job market, while June business inventories came in flat versus an expected 0.1% rise...

[54anickel]

67. Oh for cryin' out loud! Strong trends with regard to consumption patterns

Ummm, that was July - how much has gas gone up since then? Do they think the pattern will continue?

Meanwhile once again - oil up, buck down. The world is gonna try to bleed us to death slowly. Hopefully we won't be able to afford striking Iran. I'll take the economic pain over another senseless war anytime.

Last trade 86.90 Change -0.51 (-0.58%)

Settle 87.10 Settle Time 16:35

Open 87.37 Previous Close 87.61

High 87.61 Low 86.87

[ozymandius]

69. That's right.

We're gong to consume tons of Wal-Mart junk to jump start this economy. Meanwhile, a person working for minimum wage will be required to spend a day's wages just to drive to work that week.

[54anickel]

71. I did read in one of today's articles that the upscale shops are doing

fairly good business. :eyes:

I'm thinkin Wal-Mart's loosing it's customer base to rummage sales and flea markets now. :-(

[ozymandius]

72. or people just digging in the trash

Personally, I am careful never to allow my shadow to fall on Wal-Mart's doorstep. My mother, however, still shops here. (Slightly understandable since Wal-Mart ran their local competitors into the ground.) Mom tells me that she sees these impoverished sad sacks just sleepwalking through the aisles at Wal-Mart, buggies may or may not have anything in them. They cannot afford much - mostly food stuffs. Wal-Mart does have really low prices which is a major convenience for those who earn nothing yet must spend something to drive, privide housing and eat.

It really is a lowest-common-denominator store.

[54anickel]

73. Ewww, the trade deficit numbers are due out tomorrow. With all this

"robust" consumerism and the high price of oil I'd be willing to bet that baby's gappin' pretty wide. Wonder if that's what had folks bailing out of the buck today? Tomorrow may be another bad day for the buck.