STOCK MARKET WATCH, Thursday 25 August

[ozymandius]

Thursday August 25, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 149 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 248 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 312 DAYS
DAYS SINCE ENRON COLLAPSE = 1369
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 23, 2005

Dow... 10,434.87 -84.71 (-0.81%)
Nasdaq... 2,128.91 -8.34 (-0.39%)
S&P 500... 1,209.59 -7.98 (-0.66%)
10-Yr Bond... 4.18% -0.01 (-0.19%)
Gold future... 442.20 -2.10 (-0.47%)

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

[praxiz]

1. Too much info, way too early, I think :)

At least in the US, I mean.

[ozymandius]

2. WrapUp by Mike Hartman

Stocks Tumble, Record Oil Price, Gold in Lock-down

Stock index futures were pounded lower in pre-market trading when the Commerce Department announced U.S. July Durable Goods Orders fell a whopping 4.9%, following consensus expectations for a decline of 1.5%. The dollar moved lower with the announcement Treasuries caught a bid to move interest rates lower with the weak economic news. When stocks opened for trading, the Dow Industrials fell 35 points in the first ten minutes, but the sell-off sure didn’t last long. Within an hour the Dow turned positive and the NASDAQ posted double-digit gains.

Similarly, when the weak durable goods numbers came out, gold popped higher by two dollars and silver was up a few pennies, while the dollar began to sink. Gold was given the “brick wall treatment” with the spot price threatening to break above the $440 mark. Have a look at the Kitco 24-hour chart to see the five dollar take-down in gold.

-cut past chart-

Also on the housing front, the Mortgage Bankers Association said its applications index fell 0.7% with the purchase index falling 2.2% and the re-finance index gaining 1.2%. The 30-year fixed mortgage rate dropped one basis point to 5.78% and the average one-year ARM also dropped one basis point to 4.84%. It is noteworthy to see the share of ARMS dropped to 28% after reaching a high of 37% back in March. The “measured” rate increases by the Fed are working to push ARMS higher with little effect on longer-term rates. There is now less incentive to take on the more risky variable rate mortgages, and I believe that was one of the desires of the Federal Reserve. Higher rates for ARMS should help to cool some of the red-hot speculative areas such as California, Nevada and Florida.

more on the value of holding metals....

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

[54anickel]

40. Why Your Family Needs Gold

http://www.kitco.com/ind/vaughn/aug252005.html

Gold is often equated with greed. In the past ten years we have read many articles in USA Today talking about the evil greed that gold brings out in those who lust after the yellow metal & that the wealth it brings is bad…bad. And we have all heard that old saying that he who holds the gold makes the rules - & the rulers are often bad, bad. But as I continue to witness the seeds being planted for financial mischief I am reminded that gold really is just another tool to apply within the confines of one’s financial plan. And is it just a myth that gold can protect ones finances in economic uncertain times? Well, consider the research below & answer that question yourself.

“…Bullion Marketing Services commissioned a report by Ibbotson Associates on the "significance of 7 major asset classes on the returns of conservative, moderate & aggressive investment portfolios." “This study by Ibbottson Associates was reviewed by Rob Kirby on FreeMarketNews.com, & they found "THAT PRECIOUS METALS PERFORMED BEST WHEN THEY WERE NEEDED THE MOST BY PROVIDING POSITIVE RETURNS DURING THE YEARS THAT TRADITIONAL ASSET CLASSES HAD NEGATIVE RETURNS." “Anyway, Mr. Kirby reports that "Ibbotson determined that investors can potentially improve the risk-to-reward ratio in conservative, moderate and aggressive portfolios by including precious metals bullion with allocations of 7.1%, 12.5% and 15.7% respectively." “To sum up, in the words of Mr. Kirby himself, it was "clearly demonstrating that ALL PORTFOLIOS ON THE RISK SPECTRUM BENEFIT FROM THE INCLUSION OF PRECIOUS METALS OVER TIME." Richard Daughty, 8-17-2005

I personally like to think of gold as “good.” As a financial tool it just may be the very component that saves us from the poor house as this decade progresses with so many uncertainties. The following bit of news about war games between Russia & China is interesting news. Does gold have a position in your future? It is quite obvious that the major powers of the world are preparing militarily to push forward the “resource wars” that are now in the planning stages as the world quickly runs dry of resources.

“Nearly 9,000 Russian and Chinese troops began a mock assault on the beaches of northern China Tuesday in the final stage of UNPRECEDENTED joint war games between the two former Cold War rivals.” “Chinese participants included three destroyers, three frigates and one submarine, along with naval aircraft, Xinhua said. They were joined by an anti-submarine vessel, missile destroyer, helicopters and a surveillance plane from the Russian navy, it said.” “THE WAR GAMES REFLECT STRENGTHENING TIES BETWEEN RUSSIA AND CHINA OVER SHARED CONCERNS ABOUT U.S. DOMINANCE OF WORLD AFFAIRS.” “Russia is also seeking to sell more arms to China, one of its leading customers, including long-range strategic bombers able to carry nuclear weapons.” “The exercises are the first major drills solely involving Russian and Chinese forces…” “TIES HAVE STRENGTHENED FOLLOWING THE RISE OF RUSSIAN LEADER VLADIMIR PUTIN, AIDED BY CHINA'S HUNGER FOR RUSSIAN OIL AND GAS AND MUTUAL CONCERNS OVER U.S. MILITARY DEPLOYMENTS ON THE COUNTRIES' BORDERS IN CENTRAL ASIA.”
http://news.yahoo.com/news?tmpl=story&u=/ap/20050823/ap_on_re_as/china_russia _1

Why do you find us constantly harping on gold week after week? Because insurance is important & ultimately that is what an investment in gold represents – insurance. It is a proven fact that a small percentage of your portfolio in gold equities can make up for significant losses during a general economic crises or a market crash. And this is why you will hear gold & gold equities referred to as “insurance” time & time again. A refusal to consider gold as an investment really amounts to complacency about today’s current economic events & developing “trends.” Yes, let’s consider complacency for a moment.

more...

[ozymandius]

3. Crude Oil Prices Jump to $68 a Barrel

BUDAPEST, Hungary - Crude-oil prices hit a record $68 a barrel Thursday before easing back a bit, as markets were kept on edge by concerns that storms near the Gulf of Mexico could threaten production facilities along the U.S. coastline.

Tropical storm Katrina, with maximum sustained winds near 50 mph, was expected to reach hurricane strength Thursday as it slowly approached the Florida coastline, the U.S.
National Hurricane Center said.

Upward momentum was also supported by a U.S. inventory report showing a decline in gasoline stocks and by China saying its crude imports spiked in July.

"Gasoline continues to take the market higher and the overall technical picture suggests that at some stage we are going to hit $70 a barrel," said Orin Middleton, an energy analyst at Barclays Capital in London.

more

[ClintonTyree]

5. When Oil prices jump that much.........

because of 50 mph winds you just KNOW the end of ANY sort of control is near. What would happen if there was a REAL threat to Oil production? $100 a barrel of Oil, here we come, sooner, rather than later. bush's buddies have found yet another way to redistribute the country's wealth. When Social Security "reform" didn't fly, they had to come up with something else, and quickly. Voila, the Oil "nervousness".

[54anickel]

35. Venezuela's Chavez Squeezes Oil Companies With Taxes

http://www.bloomberg.com/apps/news?pid=10000086&sid=a9uZ.y.Nzfy4&refer=latin_america

Aug. 24 (Bloomberg) -- On July 14 in the western city of Maracaibo, Venezuelan government tax auditors and a prosecutor went to the offices of Chevron Corp., the second-largest U.S. oil company.

They seized boxes of records to build a case that San Ramon, California-based Chevron and 21 other energy companies owe Venezuela $3 billion in back taxes. The raid is part of President Hugo Chavez's push to squeeze more money out of foreign companies that want to pump oil from the world's fifth- largest petroleum exporter.

Since October 2004, he has raised heavy-oil royalty fees to as high as 30 percent from 1 percent, begun paying for some services in nonconvertible bolivares instead of U.S. dollars, and ordered oil well contracts converted into government- controlled joint ventures.

Chavez, 51, wants to use the revenue to pay for homes, clinics and schools for the 58 percent of Venezuelan families who live on less than $200 a month.

big snip>

His approval rating was 61 percent in the second quarter :evilgrin:

more...

[54anickel]

44. Crude Oil Falls From Record $68 as Storm May Miss Gulf Fields

http://www.bloomberg.com/apps/news?pid=10000086&sid=afgdjzGfJZQM&refer=latin_america

Aug. 25 (Bloomberg) -- Crude oil fell from a record $68 a barrel in New York on forecasts that Tropical Storm Katrina will probably miss oil and gas fields in the Gulf of Mexico.

Katrina's maximum sustained winds were near 50 miles (80 kilometers) per hour and are likely to intensify late today or early tomorrow to hurricane force, the National Hurricane Center in Miami said. The storm is expected to enter the Gulf after crossing Florida tomorrow and may make landfall in the state's panhandle in four days.

``Prices rose on concern that the storm would veer to the west, but that doesn't look likely,'' said Joe Allman, an analyst at RBC Capital Markets in Houston. ``It doesn't look like Katrina will hit the main oil and gas producing regions in the Gulf.''

Crude oil for October delivery fell 40 cents, or 0.6 percent, to $66.92 a barrel at 10:01 a.m. on the New York Mercantile Exchange. Futures began trading in 1983. Prices are up 54 percent from a year ago.

bit more...

[ozymandius]

4. Winter forecast for heating homes: costly

NEW YORK – It appears that Americans will be walloped by energy sticker shock right through this winter.

With the price of both oil and natural gas significantly higher than last year, the cost of heating a home will take yet more money out of wallets. Early estimates are that it will cost at least 30 percent more than last year for homeowners in the Midwest who use natural gas to heat their homes, and as much as 20 percent higher for those in the Northeast using heating oil. Those are conservative estimates, however, and expenses could be higher, depending on the weather.

-cut-

"With gas going to meet cooling demand, there was a slowdown in recent weeks in filling the gas storage for the winter," says Dave Costello, an energy analyst at the Energy Information Administration in Washington.

Storage is important because daily production meets only about 60 percent of the nation's winter requirements for natural gas.

more...

http://www.csmonitor.com/2005/0823/p03s01-usec.html

[JNelson6563]

6. Yes, we're really in for it

If we think we have troubles now with fueling our cars, wait till winter hits. We won't be able to drive anywhere because we'll be paying to heat our homes.

Here's a prediction for you: A flood of used SUVs on the market for bargain basement prices.

Bonus prediction: Big upsurge in sales of warm stuff like sweaters and cuddle-duds this winter.

Wincing in antipation of what the day may bring...

Julie

[UpInArms]

7. daily dollar watch

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

Last trade 87.70 Change -0.21 (-0.23%)

Dollar Takes a Nose-dive on Durable Goods and Oil

http://www.dailyfx.com/index.php?option=com_content&task=view&id=3012&Itemid=39

The market had been waiting for the US durable goods orders all week and today’s release confirmed our suspicion that things aren’t that rosy here in the US. The dollar took a nose-dive when orders for durable goods plummeted -4.9% in the month of July, with orders excluding the transportation component also falling an equally disappointing -3.20%. This was actually the worst fall in durable goods orders since January of 2004. The weaker number should definitely push back growth expectations and notch lower estimates for third quarter GDP growth. The other big news in the market today was the fresh high in crude oil prices. Storms brewing down in the Gulf and the eighth consecutive week of falling petrol supplies has traders worried. Even though the storm is only being classified as a Tropical Storm, August and September tend to be the heaviest hurricane season, which means the worse may have yet to come. The pinch of higher oil prices is becoming more and more widespread. We already know that gas prices are hitting roadside restaurants, sales at Wal-Mart, airline profitability, but on an even more grass roots level, we are seeing a lot more local businesses add surcharges for deliveries or use more foot or biked based alternatives. Even though drivers are treating the rise in oil that we have seen so far as temporary, businesses are not taking as much risk and are actually coming up with other options in case oil prices hit $80 or $100 a barrel. The one sliver of good news that we received today was new homes sales, which rose 6.5% in the month of July. Even though we continue to caution about a possible slowdown in the housing market, the data is indicating otherwise. However, the longer the housing market continues to return such impressive numbers, the deeper the potential slide - affordability will eventually become an issue.

...more...

Currency Focus: Dollar Markets are Volatile on Mixed Economic Data

http://www.dailyfx.com/index.php?option=com_content&task=view&id=3007&Itemid=62

Positive data from Europe and disappointing US durable goods cost the dollar 125-pip and 118-pip losses against the pound and euro, respectively, from the highs it reached in overnight trading. Later on, some ground was regained after a better-than-expected new home sales number and the dollar was trading at $1.7993 and $1.2255 against the pound and euro, respectively, at 14:30 GMT.

Orders for durable goods fell 4.9% in July—well below expectations of a 1.5 percent drop. Excluding transportation, the figure was 3.2% lower. Not only was there a further decline in civilian aircraft, there were decreases seen in almost every other category after strong gains in June. Overall, this month’s data should be treated as a correction rather than a damper on the economy. Orders of non-defense capital goods excluding aircraft, as a proxy for business investment, remain 11.2 percent higher in the first seven months of 2005 compared to the same period last year.

In later news, new home sales soared to 1.41 million in July from a revised 1.324 million in June. The sales didn’t come without a caveat, however, as the median house price dropped for the third consecutive month to $203,800. This adds up to a 13.8% loss in price in just these past three months showing that house price inflation is certainly drying up.

...more...

Have a Great Day Marketeers!

It's Maeveday!

[54anickel]

28. Indonesia's rupiah falls to new 3 1/2 low against US$

http://business-times.asia1.com.sg/sub/latest/story/0,4574,167354,00.html?

JAKARTA - Indonesia's rupiah fell to a new 3 1/2-year low against the dollar on Thursday, a day after President Susilo Bambang Yudhoyono said the government and central bank were working together to try to stem its decline.

The Indonesian currency peaked at 10,420 to the dollar in early trading, dealers said, blaming surging world oil prices and difficulties in attracting foreign investment.

If the currency keeps falling, they warned, it could affect economic growth and push up inflation.

Traders said the rupiah received modest psychological support from President Yudhoyono's blunt appeal on Wednesday for speculators to cease attacks on the rupiah.

more...

[UpInArms]

34. Gold resumes rise as dollar weakens

http://www.marketwatch.com/news/story.asp?guid=%7BB46C4094%2D7734%2D49C9%2DA095%2D85A75388B0C0%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) -- Gold futures climbed Thursday morning as a $2 loss in the previous session and a weaker U.S. dollar spurred fresh interest in the yellow metal.

With slightly higher action in gold, the dollar weakening and "the oil markets fanning the flames of uncertainty, it seems as if gold has effectively shifted its track away from the downside," said Nell Sloane, an analyst at NSFutures.com in daily commentary.

Gold for December delivery climbed $1.50 to $4432.70 an ounce on the New York Mercantile Exchange.

At last check, the dollar lost ground against both the Japanese yen and the euro. See Currencies.

"The dollar has been hammered vs. the euro this week but the precious metals are marching to a different drummer so far," said Dale Doelling, chief market technician at Trends In Commodities.

...more...

[UpInArms]

36. Dollar dips against leading currencies

http://www.marketwatch.com/news/story.asp?guid=%7B6DA1F290%2D5CB3%2D4B10%2DA429%2D52EBE3F28F57%7D&siteid=mktw

High oil, U.S. interest-rate prospects feature in trading

CHICAGO (MarketWatch) - The dollar churned at a narrow disadvantage to most of the world's leading currencies Thursday, with the same themes tugging at the greenback - expensive oil and expectations for higher U.S. interest rates.

The dollar showed only a fleeting reaction to mixed U.S. jobless benefits claims data, the only report on Thursday. A Friday speech from Federal Reserve Chairman Alan Greenspan could offer more insight on the future course of interest-rate policy. Higher interest rates would make the dollar more attractive to foreign investors. See the Economics and Politics page.

At last check, the dollar had slipped 0.1% on the day against Europe's shared currency; the euro was changing hands at $1.2287.

The dollar also fell 0.1% against its U.K. counterpart; one pound would buy $1.8012.

The greenback fell 0.3% to 109.91 yen.

Currency markets were eyeing comments from Chicago Fed President Michael Moskow, who said Wednesday evening that inflation risks have increased over the past year as the U.S. economy has taken up slack. He said the Fed isn't yet done raising interest rates and is prepared to turn more aggressive if inflation signals warrant such a response. See full story.

...more...

[UpInArms]

51. a peek at the falling dollar

Last trade 87.63 Change -0.28 (-0.32%)

Settle 87.91 Settle Time 23:36

Open 87.64 Previous Close 87.91

High 87.99 Low 87.54

Last tick: 2005-08-25 11:33:11 ET
30-min delayed quote.

[UpInArms]

8. Today's Reports:

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

Aug 25	8:30 AM		Initial Claims		08/20	-	310K	315K	316K	-	
Aug 25	10:00 AM	Help-Wanted Index	Jul	-	39	38	38	-

[UpInArms]

11. Initial Claims report of 315,000

U.S. initial jobless claims fall by 4,000 (last week revised up to 319,000) to 315,000

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38589.3542731482-840863597&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- First-time filings for state unemployment benefits fell by 4,000 to a seasonally adjusted 315,000 last week, the Labor Department said Thursday. This is the lowest level since the week ended August 6. The increase in claims was in line with economists' expectations. The four-week average of new claims rose by 1,250 to 315,000, the highest since July 30. Continuing jobless claims fell by 9,000 to 2.58 million in the week ended Aug. 13.

8:30am 08/25/05 U.S. CONTINUING JOBLESS CLAIMS DOWN 9,000 TO 2.58 MLN

8:30am 08/25/05 U.S. 4-WK AVG. JOBLESS CLAIMS UP 1,250 TO 315,000

8:30am 08/25/05 U.S. INITIAL JOBLESS CLAIMS IN LINE WITH EXPECTATIONS

8:30am 08/25/05 U.S. INITIAL JOBLESS CLAIMS FALL 4,000 TO 315,000

Wow! That's a bigger revision than usual - normally they try to slide in an extra 1-2,000 claims.

[UpInArms]

27. U.S. July help-wanted index rise to 39

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38589.4174144676-840866428&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The volume of help-wanted advertising in major U.S. newspapers increased in July, the Conference Board said Thursday. The July help-wanted index rose to 39 from 38 in June. The index was at 38 a year ago. "The labor market indicators turned a little more positive this summer," said Ken Goldstein, chief economist for the private research group. In the past three months, help-wanted ads increased in five of nine U.S. regions, led by the East South Central and Pacific regions. In a separate survey released earlier, the Conference Board said the number of online help-wanted ads declined in July to 1.33 per 100 workers from 1.39 in June.

guess those "work at home" ads have made a big jump :eyes:

10:00am 08/25/05 HELP-WANTED ADS INCREASED IN 5 OF 9 U.S. REGIONS

10:00am 08/25/05 U.S. JULY HELP-WANTED INDEX RISES TO 39 VS. 38 JUNE

[UpInArms]

9. It's Your Money:

Armor Holdings wins $291M contract with U.S. Army

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38589.3201423264-840862094&siteID=mktw&scid=0&doctype=806&

LONDON (MarketWatch) -- Security products and vehicle armor systems manufacturer Armor Holdings, Inc. (AH) said it has won a five-year, $291 million contract with the U.S. Army.

[54anickel]

49. Lockheed deal offers security blueprint

http://business.timesonline.co.uk/article/0,,13129-1748687,00.html

Security measures on the New York public transportation system, part of a $212 million (£117m) contract awarded to Lockheed Martin announced today, could provide the blueprint for improved surveillance on London's Tube, bus and railway network, following the bombings in the capital on July 7.

The Lockheed contract is the largest counter-terrorism deal yet awarded in New York since the 9/11 attacks in 2001. New York has a $500 million budget granted for security measures since the attacks on the Twin Towers nearly four years ago.

This agreement will see 1,000 video cameras and 3,000 motion sensors installed on the subway network, and will enable mobile phone services in New York's 277 underground stations.

The lack of mobile phone signal on the London Underground was today being blamed for the failure in communication that led a police firearms unit to shoot Jean Charles de Menezes, a Brazilian electrician, in Stockwell Tube station last month.

New York's Metropolitan Transportation Authority made the move to award a three-year contract to a group of contractors led by the Lockheed Martin, which is best known for making military hardware like fighter planes, missiles and anti-tank systems, following the bombings in London, where more than 50 people died.

more...

[UpInArms]

10. Eastman Kodak to cut 900 jobs

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38589.3422258333-840863129&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Eastman Kodak (EK) said Thursday it would cut about 900 jobs as the result of shuttering some facilities and expects to take charges worth $153 million. About half the job cuts will take place in Rochester, N.Y., where Kodak is based. "These actions are regrettable because they impact our Kodak people whose performance has been outstanding, but they are necessary in light of the accelerated declines in consumer film and paper," said Daniel Meek, director of Global Manufacturing & Logistics, in a statement.

8:05am 08/25/05 KODAK TO CLOSE SECOND ROCHESTER OPERATION BY YEAR END

8:05am 08/25/05 KODAK TO REDUCE CAPACITY AT CHINA PLANT

8:04am 08/25/05 EASTMAN KODAK TO CONSOLIDATE GLOBAL MANUFACTURING OPS

8:04am 08/25/05 STANDEX Q4 NET INCOME 50C VS LOSS 6C

8:05am 08/25/05 KODAK TO CLOSE ONE OPERATION IN ROCHESTER BY END OCT

(added link and blurb)

[ozymandius]

45. update: Kodak Trims Operations, 1,000 Jobs Cut

ROCHESTER, N.Y. - Eastman Kodak Co., battling a steep drop in demand for photographic film and paper, is scaling back film manufacturing in China and closing various businesses in Rochester and West Virginia, eliminating about 1,000 jobs.

Kodak, which is navigating a tough transition to digital photography, said Thursday it will consolidate North American color photographic paper manufacturing at factories in Windsor, Colo., and Harrow, England, by shutting down an operation in Rochester by the end of October.

It said manufacturing of consumer film products will be cut back in Xiamen, China.

-cut-

The moves are part of a dramatic overhaul begun by the world's biggest film manufacturer 20 months ago to eliminate up to 25,000 jobs by mid-2007.

more

[UpInArms]

12. Moody's cuts GM, Ford debt ratings to junk status

(posted blurbs after the bell yesterday)

http://today.reuters.com/business/newsarticle.aspx?type=tnBusinessNews&storyID=nN24637460&imageid=&cap=

NEW YORK, Aug 24 (Reuters) - Moody's Investors Service cut its ratings on Ford Motor Co. (F.N: Quote, Profile, Research) and General Motors Corp. (GM.N: Quote, Profile, Research) to junk status on Wednesday, the latest blow to the automakers as they battle global competition and rising costs.

The downgrades reflect challenges the automakers face in trimming their high fixed costs to become competitive over the long term, Moody's said.

Ford and General Motors have been battling fierce competition from foreign automakers and have had to offer costly discounts as surging oil prices eat into demand for their high-profit sports utility vehicles.

"I think the worst is yet to come," said Peter Morici, business professor at the University of Maryland in College Park. "I expect their market share to continue to shrink and their balance sheets to become more troubled."

Ford's downgrade will cement its status as a junk-rated credit, hampering its access to funding as it prepares a restructuring plan to return its North American vehicle operations to profitability. Standard & Poor's had cut Ford's rating to junk in May.

...more...

[54anickel]

26. GM to Extend Employee Discount Program to Sept. 30 (Update2)

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aqXdRyfuAHr8&refer=home

Aug. 25 (Bloomberg) -- General Motors Corp., the world's biggest automaker, will extend its offer of employee discounts to all U.S. buyers until the end of September as it tries to boost sales of its cars and trucks.

The discounts apply to most 2005 models, GM spokeswoman Deborah Silverman said today. Some large 2006 sport-utility vehicles and pickup trucks will be added to the program for the first time, she said. The promotion was to end Sept. 6.

``Adding 2006 SUVs is like the kiss of death,'' said Rebecca Lindland, analyst for Lexington, Massachusetts-based Global Insight Inc. ``Where do they stop it?''

The program, which began in June, helped boost Detroit- based GM's U.S. sales by 47 percent that month and 15 percent in July. Ford Motor Co. and DaimlerChrysler AG's Chrysler followed by a month, helping slow Asian automakers' gains in U.S. market share. June and July were the first consecutive months that Asian companies failed to increase share since 2002.

[UpInArms]

39. Auto sales seen slowing after hot summer

Wall Street forecasts steep decline from June and July

http://www.marketwatch.com/news/story.asp?guid=%7BAD7F5463%2DBF4F%2D4E3B%2D8CB5%2D95DDCEAC15E8%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) -- For new car buyers previously intoxicated by the lure of the inside deal in recent months, the ho-hum factor appears to have finally taken its toll in August.

And for domestic automakers, that means U.S. sales, which will be reported next week, are tracking well below the torrid pace set in the first two months of the summer.

"Inevitably, the employee pricing program is losing its effectiveness, as eventually happened to 0%- financing, hot-button bonus cash programs, talk show host car giveaways and other promotions," said Merrill Lynch analyst John Casesa in a note.

He pegged the closely-watched seasonally-adjusted annual sales rate (SAAR) to come in at around 16.9 million units, down from 20.7 million last month, but up slightly from a year ago.

Lehman Brothers analyst Darren Kimball set the same SAAR target, adding that this month is just the beginning of what's shaping up to be a steep decline in sales through the fall.

"The real weakness will come in the next few months with shift to model year 2006 vehicles, the expiration of employee price programs, experimentation with value pricing and lack of pent up demand," he said.

...more...

[UpInArms]

48. S&P Junks GM, Ford

(thanks to Dover for the LBN post at http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1726847 )

http://www.thestreet.com/markets/natworden/10221988.html

In moves that were seen by many as inevitable, Standard & Poor's on Thursday lowered its ratings on the debt of General Motors (GM:NYSE - news - research) and Ford (F:NYSE - news - research) to speculative grade, or junk, status.

Shares of both companies slid more than 5% in the wake of the cuts, one day after rallying when a private investor offered a rich price for a big slug of GM stock. The S&P downgrades also sent broader stock averages down as much as 1% and roiled corporate bond markets, where many fund managers will now be prohibited from owning GM and Ford.

"This is the beginning of the end of the U.S. auto industry as most people have come to know it," said Sean Egan, managing director of Egan-Jones Rating Co., an independent firm. "In another two years, we're likely to see substantial layoffs and bankruptcy filings by possibly one or both of these companies and massive restructurings of most of the U.S. auto manufacturers."

S&P lowered its long- and short-term corporate credit ratings on GM and its finance affiliate, General Motors Acceptance Corp., to BB/B-1 from BBB-/A-3; a rating below BBB is considered junk. In addition to the two-notch downgrade, S&P maintained a negative outlook on GM and GMAC.

...more...

[UpInArms]

13. Fraud Dept Report: Attorney: Radler planning guilty plea

http://www.chicagotribune.com/business/chi-0508250122aug25,1,3016639.story?coll=chi-business-hed

An attorney for former Chicago Sun-Times Publisher David Radler said Wednesday in federal court that Radler plans to plead guilty in connection with a multimillion-dollar fraud from the newspaper's parent company.

Radler's lawyer, Anton Valukas, confirmed what prosecutors had disclosed in announcing the charges last week: Radler expects to plead guilty.

U.S. District Judge Amy St. Eve scheduled Radler's plea for Sept. 15.

Co-defendant Mark Kipnis, 58, former head corporate lawyer for Hollinger International Inc., the media holding company that owns the Sun-Times, pleaded not guilty Wednesday at his arraignment.

While selling various newspaper publishing groups in the United States, Radler funneled more than $32 million in payments disguised as "non-compete fees" to a company he controlled, federal prosecutors allege. The buyer of a newspaper sometimes asks the seller to agree not to open a competing paper in the same market and pays the seller a non-compete fee to close the deal.

But Radler, Kipnis and Ravelston Corp. were accused in a federal indictment Aug. 18 of diverting payments that belonged to Hollinger International to themselves.

<snip>

The criminal charges are similar to allegations Hollinger International has brought against Black, Radler and associates in a civil lawsuit that seeks to recover more than $425 million that the company says they stole from it.

...more...

[UpInArms]

19. Ex-Hollinger lawyer Kipnis pleads not guilty

http://www.suntimes.com/output/business/cst-fin-kipnis25.html

A former lawyer for Hollinger International, which owns the Chicago Sun-Times, pleaded not guilty Wednesday to charges he helped bilk more than $32 million from the company. But the newspaper's former publisher plans to plead guilty on Sept. 15, according to his lawyer.

Mark Kipnis, 58, entered the not-guilty plea at his arraignment -- the first court appearance in a criminal investigation of former Hollinger executives. The U.S. government indicted Kipnis and former Sun-Times Publisher David Radler last week, along with a company partly owned by Radler. Some lawyers involved speculate prosecutors' ultimate target is former Hollinger Chairman Conrad Black.

Black has not been charged to date. But Radler is cooperating with prosecutors, U.S. Attorney Patrick Fitzgerald said last week. On Sept. 15, Radler will appear before Judge Amy St. Eve and admit to specific criminal acts, sources said. Prosecutors and Radler's defense team appear still to be negotiating what he will admit to.

"We are in the process of discussions with the U.S. Attorney's office," Radler's lawyer Anton Valukas told St. Eve.

Also on Sept. 15, lawyers will reveal Radler's proposed sentence. Though Radler, 63, faces decades in prison, a lawyer close to the case said the ex-publisher could receive as little as two years for cooperating.

Last week's indictment charged Radler and Kipnis with funneling illegal payments to other companies controlled by Radler and Black. Kipnis allegedly facilitated the deals by preparing documents and arranging wire transfers.

...more...

Wonder what Radler has to say about the neocons, Conrad Black and Richard Perle? :eyes:

[UpInArms]

14. News Corp.'s Chernin Receives $31.6 Million in 2005

http://www.bloomberg.com/apps/news?pid=10000081&sid=aBf9vpI5XMDs&refer=australia

Aug. 24 (Bloomberg) -- News Corp., the media company run by Rupert Murdoch, paid Chief Operating Officer Peter Chernin $31.6 million, or about 34 percent more than his boss, in the year ended June 30.

Murdoch's compensation was $23.6 million, New York-based News Corp. said today in a filing with the U.S. Securities and Exchange Commission.

Chernin's pay soared from the $17.6 million he collected in 2004 as his bonus jumped $18.9 from $8 million under a new employment agreement that took effect in August 2004. The contract enables Chernin, 54, to qualify for bonuses of as much as $25 million based on earnings per share. His 2005 compensation included a salary of $8.32 million and $3.88 million in stock, the filing said.

<snip>

Chernin's salary included $3.80 million in ``base'' pay and plus a monthly payment of $358,334 into a vested savings account that will be paid out when he leaves News Corp., the filing said.

Murdoch's pay included a salary of $4.51 million and a bonus of $18.9 million. Murdoch, 74, was paid $17 million last year, including salary and bonus.

Compensation for Murdoch's son Lachlan, 33, who plans to leave his job as the company's deputy chief operating officer at the end of the month, rose to $9.43 million from $7.50 million last year, the filing said. Lachlan Murdoch's bonus more than doubled to $5.78 million from $2.35 million.

...more at link...

[UpInArms]

15. NY Fed calls derivatives meeting

Newspaper reports concern that financial services firms don't appreciate credit derivatives risks.

http://money.cnn.com/2005/08/25/markets/derivatives_meeting/

NEW YORK (CNN/Money) - The Federal Reserve Bank of New York has called a meeting with certain Wall Street firms to discuss the credit derivatives markets, The New York Times reported.

The meeting, set for Sept. 15, comes three months after global stock and bond markets were hit by concerns that banks had been caught up in the risk associated with the credit derivatives market. While a downgrade of General Motors debt originally sparked convulsions in the markets, the concerns were later found to be overblown.

But the scare did make the industry realize there needs to be more clarity for participants in the credit derivatives market regarding associated risks. Credit derivatives are linked to the probability of a company paying its debts, and it's a booming business with $8.4 trillion outstanding contracts at the end of 2004, up dramatically from $919 billion three years earlier, according to the International Swaps and Derivatives Association.

A July report by the Counterparty Risk Management Group focused on the sharp growth in the credit derivatives market and stated that the financial services industry "has very limited experience with settling large numbers of transactions following a credit event" such as a corporate default or bankruptcy.

...more...

[54anickel]

16. Consumers under pressure

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

snip>

The two factors that account for the higher debt burden residents of Collin County carry, beside the propensity to overspend, are a lagging housing market and a weak employment market. As housing prices have soared across the nation, some areas have been left out. Dallas housing prices have lagged. In Collin County the median home price has increased 17% from 1999 to 2004, while it has increased 45% for the overall country. Collin County was also home of “Telecom Corridor.” There was a large influx of telecommunications companies that moved to the North Dallas suburbs during the late 90s. After the telecom bubble popped there were a lot of people without jobs and when they gained employment, it was at a reduced salary. Too many people were not able to adjust their lifestyle to match their new income and unlike other parts of the county, homeowners were not able to extract equity out of their house to help make ends meet.

It seems obvious that housing inflation has boosted consumer spending. Housing inflation has either allowed homeowners to borrow against their inflated home value or used the inflated value to ward off financial duress due to a job loss or other financial calamity. When housing inflation stops, a large source of consumption will be lost. Since the savings rate is already close to zero it will be impossible for current income to make up the difference.

In keeping with the tradition of the Dallas Federal Reserve Bank, Richard Fisher, the new Dallas Federal Reserve President, was quoted saying, “Americans will buy anything that walks, moves, looks good, reads well, has a fancy color. We’re the greatest consumers God ever put on Earth. It’s what we do better than anybody else.” It is apparent that he learned the ropes under Robert McTeer who was quoted saying “everything would be OK if we'd all just hold hands and buy SUVs.”

snip>

One theme that we have discussed this year is the weakness in the central portion of the country and the lower income consumers have cut back their spending. Applebee’s cited both these trends on Wednesday when it lowered it guidance for the second time this year. Energy prices have continued to escalate and will further crimp lower income consumers and if the record inventory of homes relieves the inflationary pressures in housing, the stimulus that has boosted consumption will erode and leave retailers in a precarious position.

more...

[UpInArms]

17. S&P makes changes to indexes

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38589.3856074537-840865094&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- Standard & Poor's said Thursday that Mercury General Corp. (MCY) would replace Hibernia Corp. (HIB) in the S&P MidCap 400 after the close of trading on Wednesday. Capital One Financial Corp. (COF) is acquiring Hibernia. Comtech Telecommunications Corp. (CMTL) will replace BEI Technologies Inc. (BEIQ) , which is being acquired by Schneider Electric SA, in the S&P SmallCap 600 after the close on Tuesday. Also, Hansen Natural Corp. (HANS) will replace Argosy Gaming Co. (AGY) in the S&P SmallCap 600 on a yet-to-be-announced date. Penn National Gaming (PENN) is acquiring Argosy.

[54anickel]

18. U.S. Treasuries Fall After Fed's Moskow Says Rates Need to Rise

http://www.bloomberg.com/apps/news?pid=10000103&sid=aqkbfVpoAPb0&refer=us

Aug. 25 (Bloomberg) -- U.S. Treasuries maturing in 10 years or more declined after Federal Reserve Bank of Chicago President Michael Moskow said the central bank needs to keep increasing interest rates to fight inflation.

Moskow said late yesterday in a Rosemont, Illinois speech that not raising rates would risk ``significantly higher inflation.'' The pace of gains in core consumer prices, excluding food and energy, are at the upper end of the Fed's range, he said. Ten-year and 30-year bonds are among the most sensitive to inflation, which erodes the fixed payments on bonds.

``Moskow's comments were pretty hawkish on inflation so there's no stopping the Fed's rate increases for now,'' said Michael Markovic, a fixed-income strategist at Credit Suisse Group in Zurich. ``The market will soon realize that yields are going to have to go much higher.''

snip>

``Moskow was more hawkish than the markets were looking for on the inflation outlook,'' sending notes down, said Prashant Newnaha, a bond strategist at Australia & New Zealand Banking Group Ltd. in Sydney ``We would not be buying them right now.''

Moskow votes on interest rates at the Fed this year.

more...

[UpInArms]

20. 9:34 EST wheels spinning and pre-opening blather

Dow 10,448.88 +14.01 (+0.13%)
Nasdaq 2,133.63 +4.72 (+0.22%)
S&P 500 1,211.26 +1.67 (+0.14%)
10-Yr Bond 4.169 -0.10 (-0.24%)

NYSE Volume 32,915,000
Nasdaq Volume 45,036,000

9:00AM: S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +4.5. Futures indications at their best levels of the morning, now suggesting a slightly higher open for the cash market... Aside from a modest pullback in oil prices alleviating some of the market's uneasiness, better than expected earnings from Dollar General (DG), Toll Brothers (TOL) and Tech Data (TECD) may also be helping investors look for buying opportunities follow yesterday's widespread sell-off

8:32AM: S&P futures vs fair value: +0.5. Nasdaq futures vs fair value: +2.5. Futures trade holds relatively steady following the latest read on initial claims, still indicating a lackluster open for the indices... Initial claims fell 4K to 315K, matching forecasts and marking the sixth straight week of fewer than 320K benefits... Bonds, which were slightly lower after Chicago Fed President Moskow said the central bank will continue to hike rates, have also held firm, as the 10-yr note is down 2 ticks to yield 4.17%

8:00AM: S&P futures vs fair value: +0.4. Nasdaq futures vs fair value: +1.0. Futures market versus fair value suggesting a steady open for the cash market... After hitting $68/bbl earlier on hurricane worries, oil prices pulling back to below $67/bbl, following yesterday's 2.5% surge to record highs, has provided some relief, as investors digest Johnson Controls' (JCI) $2.4 bln bid for York International (YRK) and await a report at 8:30 ET that may show jobless claims fell to 315K last week

[54anickel]

21. Connecticut Investigates Hedge Fund for Solvency

http://www.nytimes.com/2005/08/25/business/25hedge.html

State and federal officials in Connecticut are investigating the possible collapse of the Bayou Group, a hedge fund and brokerage firm in Stamford that managed an estimated $400 million for its investors, according to two people briefed on the investigation.

Clients of the Bayou Group apparently grew concerned about the firm's status in recent days, when refund checks it had sent to customers could not be drawn upon for lack of funds, one of the two people briefed on the investigation said. In addition, telephones at Bayou went unanswered.

"We are aware that there is a situation with people not being able to be in contact with the company," said James Heckman, a spokesman for the Connecticut Department of Banking. "We are looking into it. Beyond that, I can't comment."

Christine Sciarrino, an assistant United States attorney for Connecticut, who leads the financial litigation unit of that office's civil division, declined to comment on the matter. A spokesman for the United States attorney's office did not return a phone call seeking comment.

snip>

According to documents filed with the Securities and Exchange Commission, Bayou started four hedge funds in January 2003, expecting to raise more than $250 million from wealthy individuals. The minimum investment in each fund was $250,000. They were called Bayou Superfund, Bayou No Leverage Fund, Bayou Affiliates and Bayou Accredited Fund.

more...

[UpInArms]

22. aren't there clauses in those hedge funds that you cannot

obtain funds for somewhere between 60 and 90 (and up) days from the date of request?

I do expect a lot more funds to go belly-up in the coming months :eyes:

[54anickel]

24. I remember reading that - it was a "new" strategy implemented by

hedge funds to mitigate some of the problems of everyone wanting to find the exit at the same time.

[54anickel]

47. Here's an article on lock-ups from a while back - still looking for that

one on the waiting period from the date of request.

http://www.forbes.com/home/work/2005/07/14/hedge-funds-lockups-cx_lm_0714hedgefunds.html

NEW YORK - Hedge fund investors are copping an attitude when it comes to the terms they will accept for sinking money into these popular investment pools.

A survey by Deutsche Bank (nyse: DB - news - people ) shows 77% of some 1,000 hedge fund investors said they would only accept investment lockups of one year or less. That is up from the 68% who responded similarly in last year's survey.

Lockups can be a bone of contention because they prevent investors from yanking money out of poorly performing funds before a set date. Of course for fund managers, the lockups are critical to maintaining stability in a fund, especially through rough patches.

Throughout the hedge fund industry, fund performance has faltered this year after the heady returns of two and three years ago, weighed by poor market conditions. Many funds, particularly those focused on convertible bond investments, posted sharp declines during the spring after downgrades of General Motors (nyse: GBM - news - people ) and Ford Motor (nyse: F - news - people ) roiled the bond market. Investors got a chance to exit from their investments at the end of June, a traditional breakwater for fund redemptions, and analysts said several funds had to liquidate.

more...

[54anickel]

23. Thirty Years of Reasons to Fear Housing Market

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_gilbert&sid=aMwsXqQeEr5I

Aug. 25 (Bloomberg) -- David Rosenberg, the chief economist for North America at Merrill Lynch & Co. in New York, is ``convinced that the housing market is ripe for a price correction.'' If he's right, 30 years of history suggests any collapse would imperil the outlook for global economic growth.

Thomas Helbling, deputy chief of the world economic studies division at the International Monetary Fund in Washington, tracked the housing market histories of 14 industrialized nations for the period from 1970 to 2002, finding 75 home-price cycles.

snip>

In boom times, defined by Helbling as the top 25 percent of periods of rising prices, prices climbed for about four years with an average increase in house values of 32 percent. Housing market busts also persisted for about four years, with prices declining by an average of 27 percent.

snip>

The IMF economist found that the U.S. had no booms and no busts from 1970 to 2002 based on his methodology, though he said the analysis only covered completed cycles and would miss any bull markets still under way since the 1990s. Helbling's definition means a quarter of all housing-market cycles are either booms or busts, a necessarily ``arbitrary'' classification, he wrote.

Now that gets ya thinkin'...No booms/busts in the US? :freak:

more...

[54anickel]

25. CIBC Posts Biggest Loss in 138-Year History on Enron

http://www.bloomberg.com/apps/news?pid=10000087&sid=a375ra1t.JO8&refer=top_world_news

Aug. 24 (Bloomberg) -- Canadian Imperial Bank of Commerce posted the biggest quarterly loss in its 138-year history after it agreed to pay $2.4 billion to resolve claims by Enron Corp. shareholders.

CIBC's net loss was C$1.91 billion ($1.5 billion), or C$5.77 a share in the fiscal third quarter, compared with a profit of C$596 million, or C$1.60 a share a year ago, Canada's fifth- biggest bank said today. Excluding some one-time items including the Enron costs, profit was C$1.62 a share.

``This is a black mark on the Canadian financial sector,'' said Pat McHugh, who helps manage the equivalent of $3.3 billion in assets at MFC Global Investment Management in Toronto, including CIBC shares. ``CIBC has a spotty history of betting big and sometimes losing big.''

Canadian banks will probably pay about $3.3 billion to settle claims by Enron investors and securities regulators that they helped finance the bankrupt energy trader. Toronto-Dominion Bank, which reports earnings tomorrow, will say profit was cut by C$238 million for potential Enron settlements, and Royal Bank of Canada's earnings will be reduced by $25 million.

more...

[UpInArms]

32. Beware Enron's Spreading Pain

http://www.businessweek.com/investor/content/aug2005/pi20050825_5864_pi036.htm

Noting that big banks' payouts due to the energy giant's collapse are steadily climbing, S&P warns investors to watch these cases closely

Just how much will big banks ultimately have to shell out to settle Enron-related lawsuits? The costs are certainly climbing. The latest example: Toronto-Dominion Bank's (TD ) mid-August announcement that it had added $300 million to its reserves to cover potential liability from a series of suits arising from the Enron collapse. Toronto-Dominion's move brings to seven the number of financial institutions that have announced that they're boosting legal reserves related to those suits.

<snip>

NO CRYSTAL BALL. S&P has stated that on the whole, there should be no ratings consequences for financial institutions involved in the Enron suits as long as any settlement, penalty, or reserve addition remains at about one-fourth of annual earnings. That has so far proven to be the case for all but CIBC, whose outlook we changed to negative.

However, S&P says it cannot project that the same will hold true at institutions that haven't yet settled, for two principal reasons: It's impossible to know the size of any future settlement or penalty, and without knowing that, it's impossible to know how any given resolution -- representing a one-time charge to earnings -- will affect the balance sheet.

While each of the remaining banks in unresolved situations continues to contest the case, the fact is that each bank that has settled in the Newby suit has done so for a progressively larger amount. Moreover, plaintiffs' attorneys have stated that it's their intent to seek increasingly larger settlements. If this pattern holds, that would mean that the next banks to settle could do so in excess of the $2.4 billion that CIBC agreed in early August to pay. That seems to give those institutions whose cases are unresolved an incentive to settle.

...more...

[54anickel]

43. Banks aren't looking too good in the near future. With so much of our

economy based on finance, this could get ugly.

Good Reasons To Be Bearish

snip>

Shrinking Assets

Few people understand that the minimum monthly payment required by banks kept the borrower in debt for over two decades. Now, that's a loan that pays and pays and pays! The borrowers, not understanding compound interest and paying attention only to the monthly payment's effect on their budgets, willingly locked themselves into a long-term debt contract.

This was a bonanza for the banks, which was why American banks since 1965 have dramatically increased the assets on their books attributable to credit card loans. On October 17, the new bankruptcy law will go into effect. That is the day that the banks will see their cash cow wander off into the field toward the butcher's. The new law cuts those juicy 20-year loans to 10 years. Monthly payments will jump accordingly. Also, the new law requires borrowers to repay these loans even after bankruptcy.

The banks asked Congress to intervene and make things less risky for the banks. Congress did as it was told, but there will be a cost: the doubling of the minimum-balance monthly payoff. That will hit borrowers like any unexpected bill does. They will have to adjust their monthly budgets. This will come at a time when gasoline price increases are already forcing major budget readjustments.

So, it will become more difficult for banks to increase the number of takers when they advertise their "low, low, low" rates. An asset that had been ideally suited for growth -- a long-term loan based on low monthly payback -- will now find new market resistance. Here is the assessment of business journalist Dana Blankenhorn, who has been in the field for 25 years.

Faster write-downs of credits by borrowers means

fewer assets for credit card banks. Forcing

borrowers to pay back their loans, even after

bankruptcy, means those assets can't be

written-off, and those bankrupt borrowers can't

be extended new credit. It's a squeeze on bank

assets, from both sides of the ledger.

So two things happen, even in the best of all

possible worlds. Assets decline, while new assets

become harder to generate.

more...

[UpInArms]

29. 10:06 EST numbers (waterline) and some blather

Dow 10,435.51 +0.64 (+0.01%)
Nasdaq 2,131.10 +2.19 (+0.10%)
S&P 500 1,210.29 +0.70 (+0.06%)
10-Yr Bond 4.169 -0.10 (-0.24%)

NYSE Volume 228,626,000
Nasdaq Volume 219,634,000

10:00AM: Major indices now trade in split fashion as sector leadership remains mixed... Consumer Discretionary has paced the way higher, as strength in Homebuilding, Retail and Auto Equipment offset weakness in Autos... Johnson Controls (JCI 59.89 +3.12) has surged 5.5% on reports that it will acquire York International (YRK 56.85 +15.10) for $2.4 bln while Ford Motor (F 9.83 -0.09) has been weak after Moody's cut Ford's debt rating to junk...

Health Care has also shown relative strength after the European Commission approved Johnson & Johnson's (JNJ 63.17 +0.92) $22 bln takeover of Guidant (GDT 71.11 -0.54)... Technology has been mixed, as modest gains in Semiconductor and Hardware offset losses in Software... Energy, however, has been under pressure in response to falling oil prices... DJUA +0.4, DOT -0.7, Nasdaq 100 +0.1, Russell 2000 +0.3, SOX +0.4, S&P Midcap 400 +0.1, XOI -0.4, NYSE Adv/Dec 1598/1028, Nasdaq Adv/Dec 1447/933

9:40AM: Market rebounds from yesterday's broad-based pullback as oil prices easing from record highs improves sentiment... While daily spikes in oil will continue to be a risk for stocks, as higher energy costs cut into corporate profits and curb consumer spending, the fact that crude oil futures ($66.92/bbl -$0.40) have consolidated after briefing touching a record $68/bbl earlier (on hurricane concerns) has provided some relief for investors looking for bargains...

As of yesterday's close, the S&P 500 had relinquished more than half (-2.0%) of the strong 3.5% gain realized in July - the broader market's best performing month this year...

(updated blather on edit)

[UpInArms]

30. FHLB-Pittsburgh to restate financial results

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-25T140148Z_01_N25353207_RTRIDST_0_FINANCIAL-FHLB-PITTSBURGH.XML

NEW YORK, Aug 25 (Reuters) - The Federal Home Loan Bank of Pittsburgh said on Thursday it will restate over four years of financial results, mainly due to derivatives accounting errors, reducing earnings by an expected $21 million.

Half of the 12 FHLB regional member banks are now restating earnings for similar reasons.

FHLB-Pittsburgh will restate results for 2001 through 2004 and the first quarter of 2005. The bank's review of derivatives accounting is ongoing and "could result in a material change" to its estimated earnings drop, the bank said in a statement.

"The need for this restatement came about through the SEC registration process. The purpose of the restatement is to correct errors and ensure that we have properly and precisely applied the 'FAS 133' accounting rules, which are exceedingly complex," James D. Roy, FHLB-Pittsburgh president and CEO, said in a statement released by the bank.

The bank is withdrawing its registration statement with the Securities and Exchange Commission. It will move toward completing the process after its restatement, which it seen taking at least three months.

<snip>

FHLB-Pittsburgh said it misapplied FAS 133 accounting rules for certain derivatives used to hedge its mortgage portfolio and incorrectly used the "short-cut" accounting method for certain hedges. The bank said it plans to rely more heavily on traditional, non-derivative-based hedging and funding strategies for its mortgage portfolio.

...more...

[54anickel]

31. Wanna Bet? Hedging for Dummies

Firm offers "hedgelets" that let small investors take positions on gas prices, mortgages, etc.

http://money.cnn.com/2005/08/24/markets/hedge_street/index.htm

NEW YORK (CNN/Money) - An online trading platform wants you to stop griping about skyrocketing gas prices and start trading.

HedgeStreet operates a kind of futures exchange in which customers can take a position on where they believe gas prices, mortgage rates and inflation, and other indicators are headed by buying contracts called "hedgelets."

As its name suggests, San Mateo, Calif.-based HedgeStreet aims to provide tools for investors to hedge, or reduce risk, in their portfolios.

For instance, if your daily commute requires you to fill up at the pump often and you want to reduce your exposure to rising gas prices, you can take a "yes" or "no" position on whether gas will exceed, say $2.32 a gallon by the end of the month. If you make the right call, you take home a fixed payout of $10 for each hedgelet you own; if you make the wrong call, you lose your original investment.

Some experts say such contracts can be dangerous for those who don't understand the principles of investing.

more...

[UpInArms]

33. PMC-Sierra adds $5.3M to workforce restructuring bill

(I wonder how many jobs will disappear down the rabbithole on this one?)

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38589.4368735301-840867294&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- PMC-Sierra Inc. (PMCS) said it incur an additional charge of $5.3 million tied to its workforce restructuring, according to an updated filing Thursday with the Securities and Exchange Commission. The cash charge, to be taken in the third quarter, relates to the consolidation of its facilities. Santa Clara, Calif.-based PMC-Sierra makes chips that help power networking gear and consumer electronics.

[UpInArms]

37. Treasurys drift ahead of Greenspan

http://www.marketwatch.com/news/story.asp?guid=%7B4B88030E%2DD6B2%2D4795%2D843B%2DC4154CDC2FA5%7D&siteid=mktw

CHICAGO (MarketWatch) - Benchmark Treasurys roamed between slim price gains and a narrow decline Thursday, with the bond market playing it conservatively ahead of a Friday speech from Federal Reserve Chairman Alan Greenspan.

The closely tracked 10-year note was last trading unchanged at 100 21/32, leaving its yield ($TNX: news, chart, profile) , a reference for mortgage and corporate borrowing rates, at 4.17%.

The 30-year bond was up 6/32 at 115 3/32 in recent trading. It was yielding 4.39% compared to 4.4% Wednesday.

Expectations for even higher Fed interest rates were reinforced by Chicago Fed chief Michael Moskow in a speech Wednesday night.

He said the risk of higher input prices seeping into the broader economy has increased because there's less slack in the economy than a year ago.

The Fed's measured approach in returning interest rates to neutral is still appropriate, he said, but the Fed is ready to turn more aggressive if it has to. See full story.

...more...

[54anickel]

38. So they ain't quite buying into Moskow's latest jaw-bonin' yet?..n/t

[Theres-a]

56. I reckon not.

[UpInArms]

41. 11:14 EST numbers and blather

Dow 10,457.40 +22.53 (+0.22%)
Nasdaq 2,137.76 +8.85 (+0.42%)
S&P 500 1,212.68 +3.09 (+0.26%)
10-Yr Bond 4.177 -0.02 (-0.05%)

NYSE Volume 529,812,000
Nasdaq Volume 473,498,000

11:00AM: Market extends its reach to the upside as oil prices continue to slide... Crude oil futures, which have been weak most of the morning amid reports that Tropical Storm Katrina is now expected to miss oil rigs in the Gulf, have recently hit session lows ($66.75/bbl -$0.57) following a stronger than expected build in natural gas inventories... NYSE Adv/Dec 1734/1179, Nasdaq Adv/Dec 1497/1152

10:30AM: Stocks still struggle to gain much traction as investors look for reasons other than a dip in oil prices to more aggressively jump back into the market... Even though weekly jobless benefits merely matched economists' forecasts, falling 4K to 315K, the fact that claims checked in below 320K for the sixth consecutive week, suggesting steady gains in nonfarm payrolls of about 185K per month, has perhaps lent some early support... The August employment report will be released one week from tomorrow, with economists currently forecasting payroll growth of 200K... NYSE Adv/Dec 1481/1310, Nasdaq Adv/Dec 1378/1155

[Maeve]

46. Ummm...hasn't there been a pattern in oil prices?

They slide in the morning, rise in the afternoon and the traders all seem surprised? :shrug:

On a related note, #2 Son passed his driving test, so we now have 4 drivers in the family. Murphey's Law sez--time for gas prices to rise!

[UpInArms]

42. Rents Head Up as Home Prices Put Off Buyers

http://www.nytimes.com/2005/08/25/realestate/25rent.html?hp&ex=1125028800&en=451e679a25895db1&ei=5094&partner=homepage

The turnaround appears to be another sign that the boom in house prices and sales is finally slowing, as homes have become so expensive in many metropolitan areas that some people have decided to rent instead.

A government report yesterday also offered new evidence that the housing boom could be reaching a peak. The median price of a newly built home fell to $203,800 in July from $219,500 in June, after having risen in the winter and spring, the Commerce Department said.

Still, the number of new homes that were sold continued to grow, and economists cautioned that the recent housing slowdown could turn out to be a pause.

But rents have clearly changed direction, even if the increases have been relatively small. With the economy growing and mortgage rates inching up, more people are looking to rent apartments and homes rather than buy them. At the same time, many buildings are being turned into condominiums, reducing the supply of rental property.

"It seems like the tide has finally turned," said Michael H. Zaransky, co-chief executive of Prime Property Investors, which owns 15 buildings in Chicago.

Rents in about 85 percent of large metropolitan areas have climbed in the last year, according to Global Real Analytics, a research company in San Francisco. Late in 2003, rents were falling in 85 percent of markets.

...more...

[54anickel]

50. The 5 most outrageously overpaid CEOs

http://moneycentral.msn.com/content/P125120.asp

snip>

Fat pay, thin performance
Rather than focus on single-year offenders, we rounded up -- with help from Standard & Poor's -- the worst performing stocks in the S&P 1,500 over the past several years.

Then we looked for the CEOs with the fattest compensation packages -- including base pay, stock grants and the value of options awarded the chiefs, as calculated using the Black-Scholes model, a common tool for valuing options.

We also asked S&P to help us find the CEOs who collect the least pay in exchange for the best performance.

snip>

It’s getting worse, by some measures. The ratio of CEO compensation to pay for the rank and file was roughly 200-to-1 in the early 1990s. Now it's more than 450-to-1, says David Lewin, a professor at the UCLA Anderson School of Management. Worse, many average workers are now paid partly through bonus systems and stock options, meaning their livelihoods are tied to often-volatile company stocks. Many executives have similar incentives, but at a vastly greater scale. They win almost regardless of how their stocks fare.

more...

[UpInArms]

52. naming names and looking at the numbers

Top honors go to Gary Smith at Ciena (CIEN, news, msgs). His shareholders have been virtually wiped out -- losing 93% in the past four years. His compensation over that period: $41.2 million.


Jure Sola, the CEO and chairman at Sanmina-SCI (SANM, news, msgs) collected $26.4 million during the past four years while Sanmina shares fell 78%. The bulk of Sola's pay came in the form of a performance bonus of $19.9 million, paid for hitting one recent quarter's targets.


Sun Microsystems (SUNW, news, msgs) paid Scott McNealy, its CEO, chairman and founder, $13.1 million a year over the past four years, even as Sun's shareholders lost 76% of their money.


Shares of supermarket chain Albertson's (ABS, news, msgs) fell 39% over the past four years. Despite this dismal record, Albertson’s CEO and Chairman Larry Johnston collected a total of $76.2 million in that time.


Under CEO Peter Dolan’s watch at Bristol-Myers Squibb (BMY, news, msgs), shareholders have seen the stock decline by 48% over the past four years. Dolan took home $41 million.

:nuke:

[54anickel]

55. And who REALLY did the work to hit that one quarter's target? Surely

it wasn't Sola. But hey, let's give old Jure $20 mil for cracking the whip and most likely fudging the figures a bit. :eyes:

[54anickel]

53. Working harder in tough times

http://www.eetimes.com/news/latest/showArticle.jhtml?articleID=169400372

snip>

Martin ticks off statistics that inform the bleaker moods rising up from Silicon Valley's cubicles. Employment rates are stuck at 1995 levels, commercial realtors report vacancy rates from 33 to 53 percent. And Bay Area icons Hewlett-Packard Co. and Oracle Corp. last month announced layoffs totaling 20,000 souls.

Martin mines the Web for those kinds of hard figures for his sideline-publishing a blog (www.viewfromsiliconvalley.com) that has suggested the Valley could be the next Rust Belt. The work is "mainly a way to vent and counter the cheerleading that goes on in the press, and part of it is a backup-in case I lose my job," said the 46-year-old rep for a major semiconductor maker.

"I operate as though I could lose my job tomorrow. I have no debt, my money is invested conservatively and I am renting on a six-month lease," said Martin. "My view is the segment of people getting rich in Silicon Valley will keep getting more and more narrow."

Keeping a balance
Indeed, job security crumbled in the dot-com bust of 2001. Now the balance between work and personal life is swinging in the breeze for cell phone- and laptop-wielding engineers tied to colleagues and customers spread across the United States, Asia and Europe.

more...

[MARALE]

62. as an engineer I agree

In the 90s we had the freedom to move around and dictate our salaries. I just got a new job and make less than I did before. Prices have gone up and they still expect you to work 60 hrs a week. plus there is always the outsourcing issues, engineering is getting easier and easier to outsource. I think that this is one of the main reasons that computer and other electronic devices have gone down, no geek can afford them anymore!

[54anickel]

67. Yep, that's why I didn't bother going back - seemed the wages keep

going lower and lower while the demands kept rising. For what they wanted to pay it wasn't worth the headache - a regular, "mindless" 40 hour week job only meant a meager amount less than in my field.

[UpInArms]

54. 12:10 EST numbers and blather

Dow 10,451.91 +17.04 (+0.16%)
Nasdaq 2,135.32 +6.41 (+0.30%)
S&P 500 1,212.21 +2.62 (+0.22%)
10-Yr Bond 4.170 -0.09 (-0.22%)

NYSE Volume 711,590,000
Nasdaq Volume 634,454,000

12:00PM: Major averages hold onto modest gains midday, as a pullback in oil prices from record highs provides some relief... After briefly touching another new record of $68/bbl earlier, amid concerns Tropical storm Katrina would disrupt production in the Gulf, consolidation in the commodity ($66.80/bbl -$0.52) has offered investors some solace following a 2.5% surge in oil that weighed heavily on stocks yesterday... As a result, investors have viewed yesterday's weakness as a buying opportunity, cautiously stepping back into the market to lift eight out of ten sectors into positive territory...

Weekly jobless claims falling to 315K, matching forecasts and suggesting steady gains in nonfarm payrolls of about 185K per month, has also offered some comfort ahead of next week's influential job report... Despite a modest rise in bond yields slightly diminishing the appeal of owning dividend-paying stocks, the Utilities sector has turned in the best performance, getting a boost after AG Edwards initiated coverage of Exelon (EXC 52.51 +0.58) with a Buy based on EPS growth potential of its merger with Public Service Enterprise Group (PEG 62.66 +0.95)...

Another interest-rate sensitive sector shrugging off lackluster action from the bond market ahead of Fed Chairman Greenspan's speech at the annual Fed outing tomorrow has been Financial, as strength in Banks has offset weakness in Brokerage... Online brokers like Charles Schwab (SCH 13.49 -0.18) and E*TRADE Financial (ET 16.38 -0.29) have consolidated after recently hitting 52-week highs... Technology has also been an influential leader to the upside, benefiting from rebounds in Semiconductor, Hardware and an analyst upgrade on Solectron (SLR 4.23 +0.08)...

[ozymandius]

57. a nose above water

12:56
Dow 10,444.97 +10.10 (+0.10%)
Nasdaq 2,134.06 +5.15 (+0.24%)
S&P 500 1,211.55 +1.96 (+0.16%)
10-Yr Bond 41.58 -0.21 (-0.50%)
NYSE Volume 839,317,000
Nasdaq Volume 742,804,000

12:30PM: Equities continue to run in place just above the flat line with few catalysts to send them noticeably higher... Sure oil prices falling for the first time in six sessions has offered some encouragement, but limited participation, as total volume on the NYSE and Nasdaq remains well below 1.0 bln shares, has provided little conviction behind the market's rebound... NYSE Adv/Dec 1838/1238, Nasdaq Adv/Dec 1584/1251

[ozymandius]

58. an eyelash above water

1:22
Dow 10,435.91 +1.04 (+0.01%)
Nasdaq 2,132.63 +3.72 (+0.17%)
S&P 500 1,210.66 +1.07 (+0.09%)
10-Yr Bond 41.67 -0.12 (-0.29%)
NYSE Volume 906,778,000
Nasdaq Volume 796,820,000

1:00PM: Little changed since the last update as the major averages continue to vacillate in roughly the same ranges... The Materials sector, however, has recently turned negative, amid further deterioration in shares of Dow Chemical (DOW 44.58 -1.06)... While weakness in the greenback typically makes dollar-denominated commodities more attractive, a 2.3% sell-off in the sector's most influential component (DOW), after Citigroup downgraded it to Hold from Buy on ethylene margin concerns, has offset rebounds in Gold, Steel and Aluminum...NYSE Adv/Dec 1779/1335, Nasdaq Adv/Dec 1507/1339

[UpInArms]

59. GM: Doraville (GA) plant set for layoffs, slowdown of four minivans

http://www.miami.com/mld/miamiherald/business/national/12474515.htm

DORAVILLE, Ga. - The General Motors Doraville Plant expects an unspecified number of layoffs due to an assembly line slowdown beginning next month on four models of minivans.

Starting Sept. 6, production will decrease from 60 to 54 vehicles per hour on the Buick Terraza, Saturn Relay, Pontiac Montana SV6 and the Chevy Uplander, said plant spokesman Michael Merrick.

In addition to layoffs, reduction in staff will also be achieved by attrition, including retirements, Merrick said, adding the plant does not yet know how many people will be affected.

"This was directed by Detroit," Merrick said, adding that Doraville is not the only assembly plant affected by the line slowdown. "Sales numbers dictate production; a planning committee meets each month and they decide the production for all GM assembly plants."

...more...

[UpInArms]

60. Smithfield Foods posts lower profit, announces (570) layoffs

http://www.wavy.com/Global/story.asp?S=3765195

SMITHFIELD, Va. Smithfield Foods Incorporated says its profit fell eleven percent in the fiscal first quarter due to weakness in the pork market and in its overseas division.

The company also said today it will lay off about 570 workers as it shuts down fresh pork processing operations at its Smithfield South plant by the end of October and converts the space for other functions.Smithfield says it hopes to rehire all 570 affected employees at one of its four Virginia operations over the next nine months, based on expansion plans and current attrition.The world's largest pork processor says most of the volume will be absorbed by other fresh pork plants on the East Coast that have NOT been operating at full capacity.

...more...

[hatrack]

63. Guess they can't blame THIS one on low-carb diets!

:shrug:

[UpInArms]

61. TIMKEN (BIG *Co Supporter) Torrington Firm To Cut 190 Jobs

http://www.zwire.com/site/news.cfm?newsid=15095924&BRD=2303&PAG=461&dept_id=478976&rfi=6

TORRINGTON-The third largest source of city tax revenue, the Timken Company, announced Tuesday that it is moving 190 Torrington jobs out of state.

The positions are all in Timken's automotive division, company spokesman Denise Bowler said. Timken specializes in precision-machined materials. The layoffs are to be phased in over time from Oct. 1 to June 31, 2006. Workers will have a chance to relocate, and those who choose not to will be offered severance packages.

Before this week's announcement, Timken had 350 salaried and hourly employees in Torrington, and contributed $242,567 in taxes to the city last year, according to documents in the tax assessor's office. The job cuts are not expected to affect Timken's 650 employees in Watertown.

The layoffs mark a second round of cutbacks since Timken's acquisition of the Torrington Company from Ingersoll-Rand in February 2003 for $840 million. Layoffs began in 2003 with 190 reductions when the company leased its fixed-wing aircraft production line to Fairfield-based Roller Bearing Company of America.

...more...

William and Mary Timken Canton OH Timken Co

$100,000

http://www.opensecrets.org/2000elect/other/bush/inaugural.asp

and

http://www.opensecrets.org/bush/ambassadors/timken.asp

William Timken, Jr.
$561,995 to the GOP*

President Bush nominated Ohio industrialist and major GOP contributor William Timken, Jr. in July 2005 to serve as ambassador to Germany. The post had previously been held by former Republican Sen. Daniel Coats.

The long-time head of the Timken Company, an automotive and industrial parts manufacturer, Timken was previously nominated by President Bush to serve as chairman of the Securities Investor Protection Corporation. Timken’s decision to shutter three Canton-area factories and cut nearly 1,300 jobs became fodder for Democrats during the 2004 campaign. One year before the layoffs, Bush visited a Timken plant to tout his job creation plan. Although Timken is of German descent, he has no diplomatic experience and does not speak German. According to a White House spokesperson, the president chose Timken because of his reputation as an “experienced executive.”

Timken and his immediate family made $568,239 in federal political contributions during the 2000, 2002 and 2004 election cycles. Of that total, $12,000 went directly to the Bush campaigns and another $100,000 went to the first Bush inaugural committee. Separately, Timken’s company directed $250,000 to the president’s second inaugural committee. None of the family's contributions went to Democrats. Timken also served as finance co-chair of the president’s re-election effort in Ohio and was listed as a Bush Ranger for the 2004 campaign, a title given to those who raised more than $200,000 for the president.

*Figures represent contributions from the individual and his/her immediate family from 1999-2004. Total includes donations made to Republican candidates and party committees, as well as the Bush-Cheney recount fund formed after the 2000 election and Bush's two inaugural committees.

[punpirate]

66. Timken was, I believe...

... also on the Board of Directors of Diebold.

Here a fascist, there a fascist, everywhere a fascist....

[ozymandius]

64. 3:24 snapshot

Dow 10,450.30 +15.43 (+0.15%)
Nasdaq 2,134.44 +5.53 (+0.26%)
S&P 500 1,212.27 +2.68 (+0.22%)
10-Yr Bond 41.60 -0.19 (-0.45%)
NYSE Volume 1,302,485,000
Nasdaq Volume 1,111,831,000

2:30PM: Market rebounds somewhat in the last 15 minutes, but not nearly enough to make a significant change in the standings... Showing the biggest improvement has been the Dow, as positive analyst comments about tobacco stocks has helped Altria (MO 70.17 +0.56) turn positive... Other components posting respectable gains include C, HPQ, JNJ, MCD and MSFT while DIS, IBM KO and PFE continue to falter, keeping the Dow negative on the year... NYSE Adv/Dec 1858/1333, Nasdaq Adv/Dec 1549/1372

[ozymandius]

65. at the close

Dow 10,450.63 +15.76 (+0.15%)
Nasdaq 2,134.37 +5.46 (+0.26%)
S&P 500 1,212.37 +2.78 (+0.23%)
10-Yr Bond 41.60 -0.19 (-0.45%)
NYSE Volume 1,570,797,000
Nasdaq Volume 1,337,323,000

closing blather yet to come

3:30PM: Major indices off their highs but continue to find modest support from the important Financial sector... Aside from strength in Insurance stocks (i.e. ALL, PRU, UNM), renewed buying interest in three of the sectors four most influential components (banks) - Citigroup (C 43.43 +0.38), Bank of America (BAC 43.10 +0.19) and JP Morgan (JPM 34.10 +0.25), which are off 9.0%, 7.0%, and 12.3%, respectively, on the year have more noticeably contributed to the sector's recovery efforts...NYSE Adv/Dec 1915/1321, Nasdaq Adv/Dec 1613/1359