STOCK MARKET WATCH, Monday 29 August

[ozymandius]

Monday August 29, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 145 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 252 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 316 DAYS
DAYS SINCE ENRON COLLAPSE = 1373
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 25, 2005

Dow... 10,397.29 -53.34 (-0.51%)
Nasdaq... 2,120.77 -13.60 (-0.64%)
S&P 500... 1,205.10 -7.29 (-0.60%)
10-Yr Bond... 4.19% +0.03 (+0.70%)
Gold future... 442.10 -1.00 (-0.23%)

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

[Dogmudgeon]

1. The Futures markets are way up -- what gives?

Are they planning on profiting from this disaster, too?

--p!

[NeoConsSuck]

2. Futures are *not* way up. They're tanking, big time.

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

[Tace]

4. Many Commodities Are Way Up

Natural gas, especially.

[Dogmudgeon]

5. The NASDAQ and S&P futures at the top of Ozy's post ...

The visual graph must be off. Thanks for catching my mistake, though -- however, I'm still not certain how I did it.

Can you, or anyone, explain the discrepancy and my error? I believe the graphs may have thrown me off.

--p!

[ozymandius]

6. The charts on this page can be misleading.

Often what you see at this time is after hours trading among individuals. The prices often have either little or no correlation to the actual share price during the day. It's like a mosh pit for traders during these hours.

Energy stocks, however, could be skewing everything.

[UpInArms]

17. U.S. Stock-Index Futures Slide as Hurricane Lifts Oil Prices

http://quote.bloomberg.com/apps/news?pid=10000103&sid=add_wj9g38bs&refer=news_index

Aug. 29 (Bloomberg) -- U.S. stock-index futures fell as Hurricane Katrina forced oil companies such as Exxon Mobil Corp. to evacuate rigs in the Gulf of Mexico and pushed oil prices above $70 a barrel.

``We might see supply interruptions'' following the hurricane, said Christian Schneider, a global fund manager at Deutscher Investment Trust in Frankfurt, which oversees the equivalent of $3.7 billion in U.S. stocks. ``We believe in higher oil prices for longer.''

Shares of insurance companies such as American International Group Inc. and Allstate Corp slid. The storm may cost U.S. insurers as much as $30 billion, making it the most expensive ever to hit the U.S., according to storm modeler Eqecat Inc.

Standard & Poor's 500 Index futures expiring in September fell 6.50 to 1199.40 at 7:56 a.m. in New York. Dow Jones Industrial Average futures lost 57 to 10,350. Nasdaq-100 Index futures declined 10 to 1553.50.

...more...

[UpInArms]

40. Latest Crude Prices:

10:02am 08/29/05 CRUDE FUTURES CLIMB TO A RECORD ABOVE $69/BRL IN EARLY TRADE

10:02am 08/29/05 OCT CRUDE LAST UP $2.67 AT $68.80/BRL AFTER $69.10 HIGH

10:02am 08/29/05 NATURAL-GAS FUTURES JUMP TO A RECORD HIGH OF $11.30/MLN BTUS

10:02am 08/29/05 SEPT NATGAS LAST UP 15%, OR $1.46, AT $11.25/BRL

[ozymandius]

3. WrapUp by Tim W. Wood

THE DOW REPORT
Manipulation

Recently, I have been receiving a few e-mails from listeners questioning me on market manipulation. We all know that the Fed has cut interest rates, pumped M3 and talked the stock market up. Sure, these are all efforts to “control” the market. We have all heard the stories of the “PPT” and how “they” are buying the market in an effort to hold it up as well. As a Dow theorist, my views on this are exactly the same as Robert Rhea’s. There have always been efforts to “control” the market and there has always been talk about how “they” do it as well. I feel that I can best address this topic by quoting our Dow theory forefathers. The following text was taken from Robert Rhea’s book, The Dow Theory.

“Manipulation is possible in the day to day movement of the averages, and secondary reactions are subject to such an influence to a more limited degree, but, the primary trend can never be manipulated.

Now, we know that this is not the early 1900’s. We also know that today the Fed has more tools available to influence the market as well. But, we also know that the markets are much, much larger than they were in these early 1900’s and therefore I have to ask, “Even though the Fed has more tools available, is this fact over ridden by the fact that the market is now many, many times larger than it was then?” “Can the Fed actually hold the market up for ever and ever and create a period of endless prosperity without the market ever experiencing Phase II or Phase III of the bear market?” “Is this time really different?” “Could we have actually seen the first one legged bear market ever and is it that easy Al and the “PPT” have changed these historical market relationships?” “Or, has all of this intervention just served to extend, but not change the inevitable?

My opinion is that this time is not different and the Fed cannot create endless prosperity, “PPT” or not. I believe that, at best, any efforts to manipulate the market only serve to postpone the inevitable and that the market is just too big for any manipulative efforts to have a permanent or long term effect.

more...

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

[54anickel]

102. Well, they've done a mighty fine job today!...eom

[ozymandius]

7. Record Gas Prices Could Keep Climbing

LOS ANGELES - Retail gas prices hit yet another record high over the past two weeks and could go even higher before the traditional post-Labor Day driving decline ends demands pressure, according to a nationwide survey.

While gas prices usually peak in August, any major disruption to oil production facilities in the Gulf of Mexico caused by Hurricane Katrina could keep prices high even longer. The storm was heading for New Orleans Sunday with 175-mph winds and a threat of a 28-foot storm surge.

The average price for all three grades rose nearly 13 cents to $2.65 in the two weeks ending Aug. 26, said Trilby Lundberg, who publishes the semimonthly Lundberg Survey of 7,000 gas stations around the country. The figures were not adjusted for inflation.

That follows an increase of nearly 20 cents in the prior three weeks. Retail gas prices as measured by the survey have risen an average of 83 cents since early January.

more

[ozymandius]

8. Oil's Economic Impact May Be Seen This Week

NEW YORK - Wall Street has been battered in recent weeks by high oil prices and mounting evidence that rising energy costs — including record gasoline prices — are starting to curtail consumer spending.

Investors will find out just how much impact oil prices have had thanks to a raft of economic data in the week ahead. But even if the news is particularly good, stocks may still have a difficult time recovering their recent losses as long as oil prices stay close to record levels.

Crude oil futures reached $68 per barrel last week before retreating slightly, and there's no indication they will fall substantially in the near term. With Wal-Mart Stores Inc. and other retailers already warning of weakness as consumers see their dollars siphoned off at the gas pump, Wall Street's fears of an economic slowdown may be justified.

The evidence will come later this week as retailers and automakers report their monthly results for August, the Conference Board releases the latest report on consumer confidence, and the Commerce Department reports on personal spending for July. The Federal Reserve will also release the minutes of the previous week's meeting, and investors will look closely for any sign that the Fed may halt its slow, steady parade of interest-rate hikes, which could slow the economy further if they continue.

more

[Dogmudgeon]

9. I filled up at 5:30 EDT

There were already about eight cars there for 12 pumps. It's almost seven now, so I can imagine the madhouse the place must be.

The boss had just been on the phone and told the attendant to get the plastic numeral set out, and he'd have the new numbers by 6.

Fortunately, I do very little driving, so a tank of gas lasts me 3-4 weeks. But I think I'll get a locking gas cap just in case.

--p!

[UpInArms]

12. Oil could push toward $75/bbl on hurricane fear: analyst

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38593.3427801852-840960927&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- Hurricane Katrina's trajectory toward New Orleans and over the center of the Gulf of Mexico's oil-producing region will have a major short- and long-term impact on energy markets, according to Agbeli Ameko, managing partner at First Enercast. The hurricane will impact production off shore and on shore, while flooding will shut-in refining and processing facilities, Ameko said in a note. "Due to the strength of this storm and the path over the major producing zones, Katrina is expected to have a greater impact on energy markets than Ivan last year," he said. Ameko said crude oil prices could trade toward the $75 a barrel level Monday, while natural gas may push toward $12 per million British thermal units. "As the shut-ins persist, increasing winter supply concerns, the potential for $80/bbl crude and $15/mmbtu natural gas are realistic," he said. Crude futures for October delivery were last trading up $3.52, or 5.3%, at $69.65 a barrel in electronic trade, having earlier touched a new record of $70.80. Natural gas was up $1.99, or 20.4%, at $11.79 per million British thermal units.

[54anickel]

63. Oil – Inflation – Silver & Gold

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=45891

snip>

A tax raises some prices, but depresses others

Higher crude oil prices selectively increase the costs of energy, food, transportation, medical, and many other essential sectors, but at the expense of the consumer having fewer remaining funds for other purchases. Consumers who are near their maximum tolerance for debt will react to higher costs for essential commuting travel to work by making fewer discretionary trips to the mall and by purchasing fewer luxuries. Although travel by automobile is essential in most parts of the USA, consumers stressed by high energy prices will tend to keep their old car longer or to replace it with a used car and to significantly delay the optional purchase of a new car. Everyone needs a place to live, but high energy prices will discourage potential home buyers from looking at new homes with a long commute to the office, and will focus their attention on the positives of renting an apartment closer to work instead. By increasing the prices of essentials, and thereby separating the consumer from a surplus of spending funds, high crude oil prices indirectly reduce the demand for non-essentials such as luxury items, new cars and houses. Just as a tax removes potential spending funds from the economy and transfers those funds to the tax agency, high crude oil prices absorb funds that the consumer would otherwise have available to spend on other purchases.

It should be obvious that a very high tax rate focused on a few essential sectors will depress the overall level of economic activity, and that the slowdown will exert downward pressure on the prices of non-essential sectors. Similarly, high crude oil prices raise the cost of essential transportation, utility, food, and comparable items, but also have a depressing effect on consumers who are left with no surplus of spending funds. The net result is that the prices of essential energy-impacted areas increase, but the slowing economy depresses the prices of non-essential areas.

Inflation adjusted crude oil prices are much higher than average

snip>

A slowing economy will moderate energy prices


While pessimists may see a glass full of inflation as the inevitable price increases caused by high energy costs work their way through the economy, the Optimist sees the glass of economic activity being drained dry by high energy costs. As consumers reduce their spending for non-essentials, discretionary sectors will lose jobs, will have falling stock prices, and will be reinforced with an array of negative news. All of those negatives will combine to persuade consumers to reduce unessential spending. The cumulative result of high real oil prices will be an economy which slips and slides toward recession. A slowing economy in the USA will reduce energy consumption both at home and in key Asian nations which will encounter a decrease in the level of their exports to us. A global reduction in the demand for energy will significantly reduce the price of crude oil in international markets. The Optimist is happy he can provide the welcome news that the inflation adjusted price of crude oil will be lower in the future, even if the reason for that good news is a world wide reduction in the rate of energy consumption due to the traumatic recession that high priced energy would impose on the USA.

The Fed will fight the deflation devil

So, do you think that maybe a brief recession would lower energy costs enough to put the USA back on track to a high level of growth and another decade of endlessly rising stock and real estate investments? If so, then you get my vote for the most optimistic person in the nation! As yet another example of This Time It Really Is Different, the Optimist concludes that the USA will not again have another simple recession which proceeds to clean out the excesses of the prior expansion, and sets the stage for solid economic growth in the future. The unimaginable levels of debt and leverage in the USA makes the economy unstable and incapable of supporting the type of normal recessionary slowdown that the nation has gone though so many times before. What would have been a simple and mild slowdown in the past would now be magnified to intense proportions by the debt and leverage. If not given a lifeline, a slowing economy would fall relentlessly into a deflationary depression much deeper that the 1930s.

Fortunately, our friendly Fed is ever alert to that danger, and they keep a lifeline always at the ready. That is the same lifeline which the Fed used to rescue the economy when stocks crashed in 1987, when LTCM defaulted in 1998, in the months preceding Y2K, and when stocks again crashed in March of 2000. That lifeline is a substantial increase in the money supply. So long as the Fed is able to sufficiently ramp up the amount of money in circulation, they can be sure to reverse a potentially disastrous slowdown into a new illusion of growth. That would be a perfect solution for the American economy, except for two small problems. First, the amount of money supply increase needed to positively affect the economy increases with each intervention cycle. Secondly, the liquidity can only be added, but it can never be removed because removing the stimulus of the added money supply would cause the very deflationary depression that the money was injected to prevent. For each crisis that is solved by increasing the money supply, there must be a correspondingly higher inflation caused by an increase in the amount of fiat paper which is chasing the same amount of purchasing opportunities.

Inflation is a rising tide that lifts all price boats

more...

[DemInDistress]

10. good infomation and eye popping charts

I love it thanks for posting..After Katrina those charts should be
swinging today...I'll bookmark your site..

[UpInArms]

11. daily dollar watch

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

Last trade 87.53 Change -0.33 (-0.38%)

A Deluge of Data

http://www.dailyfx.com/index.php?option=com_content&task=view&id=3077&Itemid=39

The dollar lost part of its gains from the week prior as Durable Goods reported a woeful -4.9% decline against expectations of only -1.5% decrease. Ex-transport the report wasn’t much better printing at -3.2% vs. consensus of only -0.9% decline. The greenback bulls tried to put a positive spin on the data by noting that backlogs rose for third straight month but the cold hard truth remained – oil is starting to exert a negative impact on demand. The evidence first appeared two week ago when Retail Sales missed expectations and next week we will find out if this dynamic persists as the US calendar is chuck full of critical data.

With Chicago PMI, ISM Manufacturing and NFPs all part of the calendar line up, next week promises to be one of the busiest event driven weeks of the year. Ironically enough it also on the final summer week-end in US with Labor day holiday scheduled for Monday the week after. This unusual combination of heavy eco calendar and holiday week-end will probably mean that most of the price action will be front week loaded.

...more...

Katrina Cools the Dollar Bulls

http://www.dailyfx.com/index.php?option=com_content&task=view&id=3094&Itemid=39

With very little economic news on the G-3 calendar, the FX market is riveted by Hurricane Katrina which is barreling towards the coast of Louisiana dead straight for the city of New Orleans.

Katrina is expected to make landfall as a category 5 hurricane with wind speed upwards of 150mph The Gulf Coast region directly in the path of the hurricane is responsible for fully 25% of US domestic oil production. Additionally the Louisiana Offshore Oil Port, the biggest U.S. oil import terminal responsible for processing 1 Million bpd, stopped making pipeline shipments to refineries from its onshore facilities because of the storm. As a result, oil futures opened above $70 bbl in electronic trading in NYMEX before retreating slightly to $69.70 bbl. The 5% spike in crude hurt the dollar in the Asian session with EUR/USD trading up to 1.2345 before option related defense of the 1.2350 barrier brought the pair back to 1.2325.

The week ahead is shaping up as one of the most unusual weeks of the year with a very busy calendar in US that includes Chicago PMI, ISM Manufacturing and Non-Farm Payrolls on Friday. At the same time the Eurozone expects reports on German Retail Sales and both German and French unemployment figures. All of this upcoming economic activity is offset by the fact most of the worlds dealing desks are at half staff as market participants enjoy their last week of summer vacation which culminates in Labor day holiday in US next Monday. This unique combination of low liquidity and a large array of market moving events could result in increased volatility as traders adjust to a variety of market moving news. Furthermore, if Katrina’s damage is as severe as the experts fear, her impact on the currency market may overwhelm the value of any regularly scheduled economic data this week as the massive destruction that it will wreak will hurt not only the US oil industry but overall US economy as well.

...more...

Have a Great Day Marketeers!

[54anickel]

23. Dumping of US dollar could trigger 'economic September 11'

http://www.theaustralian.news.com.au/common/story_page/0,5744,16416680%255E28737,00.html

THE nightmare scenario that haunts global strategist Clyde Prestowitz is an economic September 11 -- a worldwide financial panic triggered by a sudden massive sell-off of US dollars that would lead inexorably to the collapse of economies around the world.

If that happens, Prestowitz predicts: "It would make the Great Depression of the 1930s look like a walk in the park."

Australia would be sucked into the vortex of such a recession, which would cause great hardship throughout the world, he warns.

Prestowitz is not a doomsayer, neither is he alone in his views. As president of the Economic Strategy Institute, a Washington think tank, he is in regular contact with the most influential US business leaders, several of whom -- Warren Buffet and George Soros included -- have taken steps to hedge their currency positions against the possibility of a cataclysmic plunge in the greenback.

"Right now," he says, "we have a situation in which the US is running huge trade deficits -- about $US650 billion ($766 billion) in 2004 -- which are financed by borrowings from the central banks of Asia -- mainly the Chinese and the Japanese. All the world's central banks are chock-full of US dollars -- they're holding many more dollars than they really want. They're holding those dollars because at the moment there's no great alternative and also because the global economy depends on US consumption. If they dump the dollar and the dollar collapses, then the whole global economy is in trouble.

more...

[54anickel]

24. Martin Wolf: Capital flow must change course

http://news.ft.com/cms/s/7937b052-158d-11da-8085-00000e2511c8.html

Why is so much capital flowing uphill, from the poor countries to the rich ones, instead of from the rich to the poor? The question is of great practical importance. The answer should suggest both how long the present pattern of global capital flows or current account “imbalances” is likely to last and how it may end.

What, then, is happening to capital flows to and from the emerging market economies? What drives these trends? What role does policy play? Do the trends matter? How should these trends be dealt with?

To start with the trends themselves, figures from the International Monetary Fund’s latest World Economic Outlook show the scale of the flows. The foreign currency reserves of emerging markets rose by $1,556bn in 1997-2004, of which $519bn came last year and another $523bn is forecast for this year.

Those countries ran an aggregate current account surplus of $336bn last year. It is a dramatically different picture from that in 1996, when emerging market economies ran an aggregate deficit of $93bn (see chart). Last year’s current account surplus was equivalent to 3.5 per cent of their aggregate gross domestic product, at market prices. Strikingly, that is close to Japan’s ratio.

more...

[UpInArms]

26. Wall Street/Fed at odds on effect of dollar crash

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-08-26T165321Z_01_N26409411_RTRIDST_0_PICKS-MARKETS-FOREX-DOLLAR-COLLAPSE-DC.XML

NEW YORK (Reuters) - Although a dollar crash is unlikely anytime soon, a Federal Reserve study says any collapse in the value of the currency is unlikely to hurt the U.S. economy. But few analysts agree.

Instead, many economists suggest an abrupt decline in the dollar's value would cause pandemonium in both U.S. credit and equity markets.

To maintain foreign interest in U.S. financial markets and prevent large investment outflows, which would disrupt the economy, the central bank would begin raising short-term rates aggressively, analysts say.

But rising short-term rates alone would choke U.S. economic growth as American consumers would be inclined both to save more and borrow less. Since the United States buys goods from around the globe, analysts emphasize the spillover would be worldwide.

"A dollar collapse would hurt everyone -- in the U.S. and around the world," said Joe Quinlan, managing director and chief market strategist with Bank of America Capital Management.

...more...

Don't you just love those soothing words: Although a dollar crash is unlikely anytime soon? Soon?????

[54anickel]

44. Heh, I was thinking exactly the same as this Schiff guy as I was

reading the article.

Schiff, who is bearish about prospects for the dollar, says the most interesting thing about this study is not its "ridiculous conclusion," but the fact it was even done.

"If the Fed is studying the effects of a dollar collapse, they must actually believe that one is possible," he said.



How the heck can they compare today with 1985 and the Plaza Accord with a straight face?



Dollar devaluation cannot right the US economy

snip>

Recalling the agreement, an article in last Sunday’s New York Times noted that while the problems facing the Bush administration were not identical to those confronted by President Reagan in 1985 “some economists suggest that the process of policy coordination formalised at the Plaza provides a map that Mr Bush may want to follow.”

But as with generals who fight the last war, this may well be a case of economists reliving the previous economic crisis. The situation confronting the US economy is vastly different from that which prevailed in 1985. The most significant difference is the level of debt. Twenty years ago, despite the growing budget and trade deficits, the US was still a net creditor nation. Today it is the world’s biggest debtor, with external liabilities now amounting to more than $3 trillion, equivalent to about 30 percent of GDP.

Furthermore, there is some doubt about the effect of the Plaza currency realignment in bringing down the US deficit. Even after the agreement, the US trade deficit continued to expand and only started to fall towards the end of the decade as a result of slowing economic growth and a recession in 1991.

According to an analysis by economic commentator Kurt Richebacher, the source of the trade deficit was not the overvalued dollar. Rather it lay in the low levels of savings and capital investment. Richebacher noted that in the years 1989-93, when the trade deficit declined, total credit in the US grew by $819 billion per year. However, during the four years to mid-2004, it grew three times as fast—$2.4 trillion a year, with no letup in sight.

This credit growth is the result of the expansionary monetary policy pursued by the US Federal Reserve, which reduced interest rates 13 times between January 2001 and June 2003. But according to Richebacher, monetary and fiscal stimulation has now largely spent itself without producing a self-sustaining investment recovery. As a consequence, the imbalances and dislocations “make a normal, sustainable economic recovery flatly impossible” and render the US economy “highly vulnerable to a sudden downturn.”

[UpInArms]

57. Hey 54anickel! Have you looked at the

dollar chart this am?

What's up with that mysterious spike?

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

:wtf:

[54anickel]

67. Don't know - found this: "Euro option-related defense"?

http://today.reuters.co.uk/investing/financeArticle.aspx?type=usDollarRpt&storyID=URI:urn:newsml:reuters.com:20050829:MTFH65249_2005-08-29_14-29-42_N29366950:1

NEW YORK, Aug 29 (Reuters) - The yen fell broadly on Monday as the spike in oil prices stoked fears of an economic slowdown in Japan, which imports all of its crude requirements.

The dollar came under pressure during the Asian session due to the jump in crude costs. The euro traded as high as $1.2345, according to Reuters data, before option-related defense of the $1.2350 barrier brought the euro lower.

The U.S. currency has proven to be surprisingly resilient since then, although dealers said volume was thin with the London market closed due to a bank holiday.

U.S. crude oil futures soared to a record $70.80 on Monday as Hurricane Katrina strengthened into one of the fiercest storms ever seen in the United States, threatening oil production facilities in the northern Gulf of Mexico.

"With higher oil prices, markets are buying a lot of euros against the yen, and dollar/yen rose with it," said Grant Wilson, vice president of foreign exchange at Mellon Bank in Pittsburgh.

more...

Why would higher oil prices push sales of euros against yen? You need bucks to buy oil. Must be a new strategy to push the buck up without actually buying the damned thing. :shrug:

[54anickel]

74. Russia, China Consider Giving up Dollar in Bilateral Trade

http://www.mosnews.com/money/2005/08/29/chinacurrency.shtml

Russia and China might consider replacing the U.S. dollar in bilateral trade, a senior banking expert said on the eve of the Third Russian-Chinese Banking Forum which is set to open on Monday, Aug. 29.

Garegin Torsunyan, president of the Association of Russian Banks (ARB) was quoted by RIA Novosti as saying: “There are many ways to establish direct currency exchange and appropriate exchange rates with our Chinese partners.”

A certain step in this direction has already been made with Russian and Chinese banks allowing the companies to open mutual corresponding accounts. At the same time, Torsunyan said it was difficult to establish direct currency exchange because the Russian currency was not convertible abroad.

The use of the dollar in servicing Russian-Chinese trade is the result of Russia’s monetary policy, the expert said. “The fact that we have been using the dollar in our trade with a neighboring country for many years while having a more stable and undervalued domestic currency is the result of our monetary and economic policy,” he said.

more...

[UpInArms]

13. Today's Reports:

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

Aug 30	10:00 AM	Consumer Confidence	Aug	-	101.0	101.5	103.2	-	
Aug 30	10:00 AM	Factory Orders		Jul	-	-2.2%	-2.0%	1.4%	-

[UpInArms]

41. correction: No Reports Today

those will be tomorrow's reports.

Sorry.

:(

[UpInArms]

14. A Hedge Fund Falls Off the Face of the Earth

http://www.nytimes.com/2005/08/28/business/yourmoney/28gret.html

HELLO, this is Dan Marino," says a weary, raspy voice on an answering machine. Mr. Marino, the chief financial officer of the Bayou Group, a $400 million hedge-fund and brokerage firm that is under investigation by state and federal authorities in Connecticut, sounds beleaguered. "Please leave me a message," he goes on. "I am receiving lots of phone calls. I am unable to pick up every call, so if you do call, leave a message and a number. I will get back to you."

Bayou investors are dying to know why their money has not been returned as the firm promised last month. But if they're hoping for a return call, they are out of luck. "Sorry," says a chipper female voice on the tape. "You cannot leave a message now. This mailbox is full."

<snip>

The investor who declined to be identified said that, in hindsight, he should have recognized one red flag in the fact that Bayou had two accounting firms - one to oversee the brokerage unit's books and another to vet the hedge funds' financials.

"We've seen fraud in stocks, bonds and commodities," said Ross B. Intelisano, a lawyer at Rich & Intelisano in New York who represents many Bayou investors. Referring to the hedge fund industry, he said: "What we're now seeing is an increase in what could be called hedge fund fraud. It just shows that even sophisticated investors who do their due diligence can be defrauded."

...more...

[UpInArms]

15. Winnebago lays off 4.5% of workforce

http://www.qctimes.net/articles/2005/08/29/news/business/doc431297f35a3be632998805.txt

FOREST CITY, Iowa — Winnebago Industries Inc. has laid off 4.5 percent of its workforce at its four Iowa plants, blaming a softening market for recreation vehicles.

The Forest City-based motorhome marker announced the layoffs earlier this month, but officials didn’t know how many workers would be affected.

Spokeswoman Kelli Harms said 171 workers were laid off. The majority of the layoffs were at the company’s main plant in Forest City, with others at plants in Charles City, Hampton and Lorimor.

Peak employment at Winnebago reached 4,200 last summer and included almost 3,200 workers at the company’s flagship plant in Forest City.

...more...

[54anickel]

16. Ecuador activists threaten to resume oil shutdown

http://news.yahoo.com/s/afp/20050828/bs_afp/ecuadoroilprotests_050828203255;_ylt=Ah3eRzoSqtIWO01lis7TLROmOrgF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

QUITO (AFP) - Activists in Ecuador's Amazon states threatened to resume the strikes which crippled the country's oil production earlier this month if foreign oil companies do not stick to an agreement guaranteeing the region more economic investment.

The activists from oil-producing Orellana and Sucumbios provinces gave the government a 48-hour ultimatum to complete the agreement reached in principle Thursday or they would resume their strikes, they said in a statement.

"During the next 48 hours we are going to reorganize the strike; this is going to be the deadline for the government to get the foreign oil companies to sign the agreement that they ratified on August 25," the statement said.

The protestors warned that they would reject changes that the foreign oil companies have made to the agreement reached Thursday, which promised the provinces increased investment in economic and social infrastructure out of oil profits.

more...

[54anickel]

18. Yield curve on US Treasuries close to inverting

http://news.ft.com/cms/s/ab1e9f56-17fc-11da-a14b-00000e2511c8.html

The US Treasury yield curve is poised to invert for the first time in more than four years, forcing long-term borrowing costs below short-term rates.

Inverted yield curves are unusual and in the past have often signalled a recession. For borrowers, the chance to take out cheap long-term loans is attractive. But for lenders, an inverted curve means they lose money on long-term loans. That can discourage them from lending.

Yields on two-year Treasury notes currently stand at 4.06 per cent while 10-year notes yield 4.18 per cent, a spread of just 0.12 percentage points. A year ago, the difference was 1.8 percentage points.

But in spite of the flattening curve, many bond traders doubt a recession is on the horizon.

Jason Evans, co-head of Treasury trading at Deutsche Bank in New York, said: “The market is very much at ease with the idea that the link between the yield curve and the economy has in fact broken down.” :eyes:

more...

[UpInArms]

22. Treasurys pushed higher by oil-price implications

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38593.3690625347-840962023&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

CHICAGO (MarketWatch) -- The benchmark 10-year Treasury note gained in price Monday as oil near $70 a barrel was seen as a potential drag on consumer spending, boosting the allure of lower-risk bond investments. The 10-year note was recently 5/32 higher, or around $1.50 per each $1,000 in securities, at 100 23/32. The gain in price pushed its yield down to 4.16% from 4.18% Friday. The 2-year note was up 1/16 at 99 30/32, yielding 4.04% vs. 4.08% Friday. The difference between the two yields remained at its tightest since early 2001.

[UpInArms]

43. Fed adds reserves via 4-day, overnight system repos

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-29T133256Z_01_N29343299_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, Aug 29 (Reuters) - The Federal Reserve said on Monday that it added temporary reserves to the banking system through four-day and overnight system repurchase agreements.

Fed funds last traded at 3.563 percent, above the Fed's target of 3.500 percent for the rate on overnight loans between banks.

Further details of the operations are available at: http://www.ny.frb.org/markets/omo/dmm/temp.cfm

[54anickel]

85. 22.25 billion Thurs, 8.25 on Fri, 12.75 today. Lots of liquidity flowin

Meanwhile,

[UpInArms]

19. On Tap for the Next Fed Chief: Trouble

http://www.businessweek.com/bwdaily/dnflash/aug2005/nf20050829_1270_db035.htm

excerpt:

Riskier Businesses: Those serious difficulties could be compounded by an increasingly complex -- and in some ways more concentrated -- global financial system. In a paper presented to the conference, IMF Chief Economist Raghuram Rajan argued that the world economy may be more susceptible to financial turmoil because of changes in how the markets work. "There is a small but growing possibility that we could have a catastrophic meltdown," he said.

According to Rajan, market deregulation has spawned a new breed of asset managers, including hedge funds and private-equity firms that are much more prone to taking risks with their investors' money than the staid bankers who dominated the financial system in the past. That's because the compensation of these new investment managers is directly tied to how much money they make for investors.

At the same time, because their performance is frequently compared to that of their competitors, the managers have little incentive to bet against a strong uptrend in the market, instead joining in the buying frenzy and adding to the froth. That, according to Rajan's argument, increases the risk of a bubble developing that would inevitably burst, with potential catastrophic consequences.

Rajan also contended that formerly conservative bankers face some of the same competitive pressures, which could spur them to assume greater risk. That could result in banks not being able to provide the markets with liquidity if turmoil strikes because they would be exposed to big losses as well.

...more...

[UpInArms]

20. Debt load makes Americans vulnerable to rising rates

http://www.boston.com/news/local/connecticut/articles/2005/08/29/debt_load_makes_americans_vulnerable_to_rising_rates/

NEW YORK (AP) -- Buy now, pay later: It's been the mantra of American consumers for decades.

The results are obvious in the ballooning balances on credit cards and mortgage loans, and in the mushrooming U.S. trade deficit, which reflects the nation's nearly insatiable appetite for cheap, imported goods.

Low interest rates, especially since the end of the 2001 recession, have fed the debt beast at home, allowing American consumers to accumulate nearly $11 trillion in debt as they buy more homes, more cars, more clothes, more dinners out. At the same time, foreign investment in the United States is helping to keep the dollar strong, which holds down prices on those imports Americans covet.

But what would happen if interest rates suddenly weren't so benign, or if foreign governments, corporations and individuals stopped investing so heavily in America? Some analysts fear such actions could trigger doomsday scenarios in which the bills come due and Americans can't pay. The consequences could be devastating for the U.S. economy.

...more...

[UpInArms]

97. Equity Is Altering Spending Habits and View of Debt

http://news.yahoo.com/news?tmpl=story&cid=2026&e=6&u=/latimests/20050828/ts_latimes/equityisalteringspendinghabitsandviewofdebt

As they happily watch their houses swell in value, Americans are changing their attitudes toward mortgage debt. Increasingly, a home is no longer a nest egg whose equity should never be touched, but a seemingly magical ATM enabling the owner to live it up or just live.

Homeowners took $59 billion in cash out of their houses in the second quarter, double the amount in the 2004 quarter and 16 times the average rate of the mid-1990s, according to data released this month by mortgage giant Freddie Mac.

People are cashing out so quickly that the term "homeowner" may soon be inaccurate. Fifty years ago, Americans owned, on average, three-quarters of their house and the lender owned the rest. These days, it's approaching an even split.

This spend-now-rather-than-save-for-later phenomenon has produced undeniable benefits. Experts attribute much of the nation's economic growth to cash-out refinancings, home equity loans and other methods of tapping rising home values. And additional real estate investments financed by home equity have contributed to the rising home prices that bring owners such pleasure.

But the spending spree has a price. With the savings rate at zero, consumers' eagerness to tap home equity is only worsening their retirement outlook, financial advisors say.

...more...

It's rather ironic that this article's webpage is sponsored by an ad for home mortgages. :eyes:

[UpInArms]

21. Yuan change not a one-off move-c.banker

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-08-29T032828Z_01_L29293560_RTRIDST_0_BUSINESS-ECONOMY-CHINA-BANK-DC.XML

LONDON (Reuters) - Recent reforms to China's currency regime do not represent a one-off adjustment, China's central bank chief said in remarks published on Monday, repeating a commitment to gradually make the exchange rate more flexible.

Zhou Xiaochuan, the governor of the People's Bank of China, also told the Financial Times in an interview that the managed floating exchange rate Beijing put in place last month would pave the way for a market-driven system.

"I think it's very clear that China is introducing a new exchange rate mechanism. It is not a one-time adjustment," Zhou told the paper on the sidelines of the Federal Reserve's annual symposium in Jackson Hole, Wyoming.

Zhou said the initial 2.1 percent revaluation on July 21 to 8.11 per dollar might seem small, "but the important thing is that it has started to float and over time market forces will play a more and more important role."

<snip>

The central bank quashed the rumors, but traders said markets would be alert to the possibility that China would permit the yuan to rise a bit quicker in the run-up to President Hu Jintao's visit to the United States next month.

...more...

[ozymandius]

25. pre-open blather

9:00AM: S&P futures vs fair value: -4.0. Nasdaq futures vs fair value: -4.5.

8:51AM: S&P futures vs fair value: -3.6. Nasdaq futures vs fair value: -5.0. Participants still pre-occupied with assessing the ramifications of Hurricane Katrina on a number of industry groups... As such, the uncertainty has led to a negative disposition in the futures market that will translate to a lower start for the cash market... Groups that are expected to see added trading activity today include property insurers, reinsurers, casinos, home improvement retail, oil refining, oil exploration and production, and oil service/drilling

8:27AM: S&P futures vs fair value: -4.0. Nasdaq futures vs fair value: -7.0. A modest bounce in the futures market since the last update, but the current standing versus fair value suggests the cash market will start the day on the defensive... Rising prices across the energy complex have served as the focal point that is feeding concerns about consumer spending and weighing on sentiment... Home Depot (HD) and Lowe's (LOW), though, are expected to be sources of support for the broader market as recovery efforts following Katrina will drive increased traffic to their stores

[UpInArms]

27. 8:32 opening to a "perfect storm"?

Dow 10,359.40 -37.89 (-0.36%)
Nasdaq 2,113.57 -7.20 (-0.34%)
S&P 500 1,202.70 -2.40 (-0.20%)
10-Yr Bond 4.158 -0.31 (-0.74%)

NYSE Volume 29,623,000
Nasdaq Volume 48,906,000

[Roland99]

28. Time to buy some oil stocks

[54anickel]

29. Measuring the Economy May Not Be as Simple as 1, 2, 3

http://www.washingtonpost.com/wp-dyn/content/article/2005/08/28/AR2005082800730.html

The Census Bureau tomorrow will release the latest statistics on poverty in the United States, the income level of an average household and the number of Americans still lacking health insurance.

Don't believe the numbers.

A growing chorus of experts and politicians is raising questions about the data that frame Americans' understanding of their nation's well-being. From poverty levels to health insurance, inflation to personal savings, widely accepted statistics are overstating some problems and understating others, miscounting people, and sending policymakers down blind alleys.

"We're getting at best an impressionistic sense of what's going on in the economy," said Rep. Rahm Emanuel (D-Ill.), who recently introduced legislation to establish an independent commission aimed at overhauling government economic statistics. "Major policy decisions are being made based on data that is inadequate to the task."

This seemingly technical problem has real-world consequences, allocating federal assistance to some who don't need it while cutting off others who do, raising the costs of programs like Social Security, or pushing policies for problems that may not exist.

more...

[AnneD]

30. Morning Marketeers

:donut: Well, I still haven't got all the mud scrapped off my car. I managed to have 2 days off from both jobs and took the opportunity to meander to Crawford Tx and tried to give Dubya a warm Texas greeting. As per his usual habits when confronted by those seeking the Truth-he was nowhere to be seen. Now what does this have to do with an economics thread. Well, I learned that many of the news outlets can't count. Unless there was some secret gathering I didn't know about, there were 2-1, maybe even 3-1 ratio of Cindy supporters to Bush supporters. I learned gas was cheaper outside the city; now there's a switch. I learned the the Bush supporters had to pay for everything, the Cindy supporters took up donations (bet they got more too-I left town with a lighter wallet-but I was happy to give). I think we had more fun, the Bushies looked a tad constipated (mental note, look into stomach intestinal products stocks as they may be on the up swing. Also look for increased condom sales-the Dem's looked pretty happy). Overall, we had a wonderful time. My daughter loved the experience (and I suspect she has become a life long political active). Wish you could have gone-I left thinking that this was the spark we may have been looking for.

[Roland99]

31. .

:woohoo:

[UpInArms]

35. Way to go, AnneD!

:woohoo:

[AnneD]

52. Thanks guys,

really wish you could have been there-daughter rates it as one of our most fun road trips ever. It had a genuine 60's feel to it. Met some DU'ers, some Gold Star mom's (now there is an honour you don't want), some business people (they say their business doesn't reflect the rosy picture being painted), students (HUMMM, how did my daughter wind up with their numbers),a bride to be (in the afternoon), farmers in bib overalls, and veterans, tons of veterans. I worked in the medic area with a great group of mainly cool guys. I manned the hydration station-but I triaged the incoming, and occasionally treated the pediatric pts. Met folks from Washington state, San Fancisco Ca, Baltimore Md,and all points in between. The part that I had a really hard time with was the service and the placing of the roses on the crosses. Rev. Al Sharpton gave a wonderful speech, he IS a great orator. I wiped more than a few tears away when they brought out hundreds of roses to lay on the crosses. Really wish you could have been there.

[ozymandius]

42. Good for you!

That's wonderful showing your daughter what's important. And talk about a spark! The more this administration talks about "staying the course", the more outraged we the people will become over this ill-conceived war.

It makes me wonder what was the rationale-du-jour for the freeper faithful?

[AnneD]

55. Thanks Ozy...

That was one of my intents, to spark my daughter's political side. She is a caring teen but apolitical (you know how apathetic they are). I really wanted to go as this was my last opportunity, but I gave her the choice of weither to stay in town or venture to Crawford. She decided to go to Crawford. I think it will have a life long impact on her. Needless to say I could pop my buttons I so proud of her.

[54anickel]

32. Experts Warn Debt May Threaten Economy

http://www.washingtonpost.com/wp-dyn/content/article/2005/08/27/AR2005082700653.html

snip>

A new Associated Press/Ipsos poll finds that barely a third of Americans would cut spending to reduce the federal deficit and even fewer would raise taxes.

If those figures seem out of whack to you, if they seem to cut against the way you learned to handle money, if they seem like a recipe for a national economic nightmare _ well, then, at least you're not alone.

A chorus of economists, government officials and elected leaders both conservative and liberal is warning that America's nonstop borrowing has put the nation on the road to a major fiscal disaster _ one that could unleash plummeting home values, rocketing interest rates, lost jobs, stagnating wages and threats to government services ranging from health care to law enforcement.

David Walker, who audits the federal government's books as the U.S. comptroller general, put it starkly in an interview with the AP:

"I believe the country faces a critical crossroad and that the decisions that are made _ or not made _ within the next 10 years or so will have a profound effect on the future of our country, our children and our grandchildren. The problem gets bigger every day, and the tidal wave gets closer every day."

more...

10 years!!! I think he's being quite optimistic, I wouldn't give it half that long. We're talking nearly 2 billion per day!!! :crazy:

[UpInArms]

33. 9:50 EST market fairies working doubletime

Dow 10,367.46 -29.83 (-0.29%)
Nasdaq 2,114.47 -6.30 (-0.30%)
S&P 500 1,201.63 -3.47 (-0.29%)
10-Yr Bond 4.149 -0.40 (-0.95%)

NYSE Volume 144,590,000
Nasdaq Volume 130,835,000

Will they weary? How much pixie dust is in their pouches?

[UpInArms]

37. 9:58 EST market recovering nicely

:eyes:

Dow 10,386.23 -11.06 (-0.11%)
Nasdaq 2,117.96 -2.81 (-0.13%)
S&P 500 1,203.45 -1.65 (-0.14%)
10-Yr Bond 4.154 -0.35 (-0.84%)

NYSE Volume 202,615,000
Nasdaq Volume 169,854,000

[UpInArms]

45. 10:10 EST numbers and blather (just a scratch!)

Dow 10,392.44 -4.85 (-0.05%)
Nasdaq 2,117.96 -2.81 (-0.13%)
S&P 500 1,203.32 -1.78 (-0.15%)
10-Yr Bond 4.151 -0.38 (-0.91%)

NYSE Volume 270,487,000
Nasdaq Volume 223,920,000

10:00AM: TV images show that New Orleans is taking some hard shots from Katrina, but overall, the stock market is standing its ground as losses have been held in check in the early-going... The Energy Sector (+1.20%) is the crutch the market is leaning on, but pockets of strength in technology (+0.03%) are also a source of support... Software and semiconductor issues are providing some leadership in the latter arena... Software is getting a boost from the merger innuendo that was a feature in this week's Barron's while semiconductors have been propped up by some bullish analyst backing...

Specifically, Legg Mason and Thomas Weisel Partners are pushing KLA-Tencor's (KLAC 49.58, +0.68) prospects while Bernstein said now is the time to step up when it comes to Intel (INTC 25.64, +0.23)... NYSE Adv/Dec 765/1751, Nasdaq Adv/Dec 714/1733

9:40AM: The major indices have been blown over at the open by concerns related to Hurricane Katrina... Initial losses, however, have been modest in scope as the advances made by energy stocks, which are benefitting from the spike in energy prices, have been an offsetting factor... Also lending support has been the drop in long-term rates (10-yr +9/32 at 4.15%) and the gain in Dow component Home Depot (HD 40.54, +0.73), which is up on the expectation rebuilding efforts along the Gulf Coast will lead to increased sales...

[UpInArms]

46. 10:12 EST WHEEE!!! We're Rich! Rich! Rich!

Dow 10,414.25 +16.96 (+0.16%)
Nasdaq 2,121.38 +0.61 (+0.03%)
S&P 500 1,204.09 -1.01 (-0.08%)
10-Yr Bond 4.150 -0.39 (-0.93%)

NYSE Volume 281,968,000
Nasdaq Volume 231,978,000

[Roland99]

50. Well, New Orleans was SAVED BY OUR PRAYERS

or something.

[UpInArms]

54. U.S. stocks turn positive on gains in oil shares

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-29T142131Z_01_N29200790_RTRIDST_0_MARKETS-STOCKS-UPDATE-5.XML

NEW YORK, Aug 29 (Reuters) - U.S. stocks turned positive early on Monday, as investors shook off some concerns about potential damage from Hurricane Katrina and record-high oil prices.

The Dow Jones industrial average was up 17.92 points, or 0.17 percent, at 10,415.21. The Standard & Poor's 500 Index was up 0.98 points, or 0.08 percent, at 1,206.08. The technology-laced Nasdaq Composite Index was up 0.68 points, or 0.03 percent, at 2,121.45.

Oil company shares were higher, with ConocoPhillips (COP.N: Quote, Profile, Research), up 1.5 percent to $62.82. Home Depot Inc. (HD.N: Quote, Profile, Research) rose 2.3 percent to $40.74.

...more...

here are the current numbers:

Dow 10,417.36 +20.07 (+0.19%)
Nasdaq 2,124.21 +3.44 (+0.16%)
S&P 500 1,206.82 +1.72 (+0.14%)
10-Yr Bond 4.158 -0.31 (-0.74%)

NYSE Volume 370,270,000
Nasdaq Volume 297,255,000

[UpInArms]

34. Gold prices climb in morning trade

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38593.4083956597-840963863&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- December gold is up $1.40 at $443.50 an ounce in morning trading and other metals futures rallied. Prices found support as oil prices climbed above $70 a barrel overnight in New York. If Hurricane Katrina "does not cause major damage, at the least we will see gold higher as we are now entering a danger point for inflationary pressures from higher energy costs," said John Person, president of National Futures Advisory Service.

[54anickel]

36. Small companies ask, 'How about a raise instead of a medical plan?'

http://www.csmonitor.com/2005/0829/p13s01-wmgn.html

snip>

Encouraging employees not to participate in the company's healthcare plan may be a growing trend among small businesses, says Richard J. Cellini, the head of research at Salary.com Inc. in Needham, Mass., which helps companies manage employee expenditures. In a survey it released last week, Salary.com found that 14 percent of businesses with 200 or fewer employees were enticing employees to not sign up for the company medical plan in order to save the company money. As inducements, they might be offered funds for their retirement plan, for a private Health Savings Account - or just plain cash.

Owners could offer a 10 percent raise to an employee to opt out of the healthcare plan and still come out ahead, Mr. Cellini calculates. That's because his survey indicates that the cost of providing healthcare to an employee averages 14.6 percent more on top of the employee's salary.

Young healthy employees might be tempted to take the cash and do without health insurance - or find they can buy it more cheaply elsewhere and pocket the difference.

But that's not a good strategy for many, says Kathleen Stoll, director of health policy at Families USA, a nonprofit healthcare advocacy group. "For sicker or older people, that leaves you in the individual market," she says. Getting insured can be expensive and "really, really tough, if you can get coverage at all."

Cellini says most people who opt out know they can get health coverage another way, through a spouse's company, parents (if they're still a minor), or perhaps through a college or university if they're a part-time student.

more...

[UpInArms]

38. Bloated Paychecks: Willumstad to collect $18 million upon exit from Citigr

Willumstad to collect $18 million upon exit from Citigroup

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38593.4173672106-840964143&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- Robert Willumstad, who announced in July he would step down as chief operating officer from Citigroup (C) , will receive more than $18 million in stock and $583,333 in salary when he leaves at the end of the month, according to a federal filing made late Friday. Willumstad will not be allowed to work for a competitor including American Express Co. (AXP) , Bank of America (BAC) , Morgan Stanley (MWD) , J.P. Morgan Chase (JPM) , Wachovia Corp. (WB) , Goldman Sachs Group (GS) and others. Shares of Citigroup fell 3 cents to $43.07 in early trading.

How many overdraft charges will that take to cover? :eyes:

[UpInArms]

39. Retail index slips ahead of monthly sales results

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38593.414623912-840964013&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

CHICAGO (MarketWatch) -- Retail stocks turned mostly lower in early trading Monday as analysts weighed in on August's sales trends. The nation's largest retailers are expected to report results on Thursday. Hot weather stymied sales in the early part of the month, leaving many consumers to postpone back-to-school shopping, according to Lehman Brothers. The S&P Retail Index ($RLX) was flat at 451.2. Among index components, shares of Kohl's Corp. (KSS) was the leading percentage decliner, falling 74 cents, or 1.4%, to $54.10.

Blame it on the weather :eyes:

[UpInArms]

47. KPMG to admit 'criminal conspiracy' over tax shelters - report

http://www.forbes.com/business/feeds/afx/2005/08/28/afx2194128.html

WASHINGTON (AFX) - Accounting firm KPMG LLP will admit Monday to participating in a broad criminal conspiracy over tax shelters the firm sold to wealthy clients until 2002, The Washington Post said.

Citing sources familiar with the deal, the Post said lawyers for KPMG will appear in a New York courtroom Monday morning and admit to the conspiracy.

It said KPMG will pay 46 mln usd and submit its tax unit and compliance efforts to a stringent 16-month review by former Securities and Exchange Commission chairman Richard Breedon.

Despite criticism from the Internal Revenue Service for failing to produce documents during the course of an investigation, KMPG will not face criminal charges for obstructing justice, the report said.

Such a charge could have seen the firms' top clients, including General Electric Co and Citigroup, drop KPMG as an auditor, the Post said.

'KPMG will admit to developing and selling questionable tax deals to hundreds of wealthly clients from 1996 to 2002,' the report said.

...more...

[UpInArms]

48. Income Inequality Threatens Growth

http://www.forbes.com/business/2005/08/29/us-income-inequality-cx_0829oxan_usincome.html

Federal Reserve Chairman Alan Greenspan's tenure has delivered robust economic growth, low unemployment and soaring corporate profits. However, an increasing gap between the after-tax income of the wealthiest Americans and the working class may create a perception that the benefits of this prosperity have been unevenly distributed, hurting overall consumer confidence.

In the past eight quarters, U.S. economic growth has averaged an annualized rate of 3.9% per quarter. Moreover, since 1980, there have been only 15 quarters in which year-on-year gross domestic product growth has been 3.6% or higher, and in which the unemployment rate has been 5.1% or lower, as was true in the second quarter of 2005. In these 15 "economic-boom" quarters, consumer sentiment typically has been strong, with the University of Michigan's Consumer Sentiment Index averaging 104.8. However, in the second quarter of 2005, it was a mere 90.2.

Fear of terrorism may play a role in creating a disconnect between economic conditions and consumer perceptions, but a bifurcation of U.S. income distribution could be significant in explaining this unexpectedly low confidence.

There are indications that the U.S. working class may not be fully participating in the economic boom:

<snip>

President George Bush's tax cuts, which began in 2001, have helped shift the income balance in favor of wealthy citizens. Although nearly all Americans' taxes dropped in absolute terms, the cuts reduced the effective tax rates on the wealthiest Americans by more than the rest.

...more...

[Roland99]

But...but...but...the rich take that money and create jobs!

[AnneD]

61. Yeah...

well bifurcate this she said as she made an obscene gesture.
If I didn't have 2 jobs, I'd be sunk. As it now stands, I have a leaky boat.

[UpInArms]

49. Call for change in way poverty calculated

http://news.monstersandcritics.com/northamerica/article_1044490.php/Call_for_change_in_way_poverty_calculated

WASHINGTON, DC, United States (UPI) -- U.S. politicians and policy experts are calling for a change in the way the United States determines its official poverty level.

The U.S. Census Bureau is set to release reports Tuesday regarding the number of people in the country living below the poverty line and also those without health insurance.

The Washington Post reported Monday the figure about the number of uninsured is unlikely to change much from its current 45 million, but that may, in fact, be high.

Many feel, however, the poverty figure -- at 12.5 percent in 2003 -- doesn`t reflect the current state of the poor in the United States.

...more...

[Tace]

51. They'll Change The Way Poverty Is Determined -- And Claim Victory!

Standard operating procedure.

[ozymandius]

53. 10:27 - all about energy

Energy stocks climb while our energy bills soar. What vultures!

Dow 10,421.12 +23.83 (+0.23%)
Nasdaq 2,124.19 +3.42 (+0.16%)
S&P 500 1,207.07 +1.97 (+0.16%)
10-Yr Bond 41.55 -0.34 (-0.81%)
NYSE Volume 362,513,000
Nasdaq Volume 293,887,000

10:00AM: TV images show that New Orleans is taking some hard shots from Katrina, but overall, the stock market is standing its ground as losses have been held in check in the early-going... The Energy Sector (+1.20%) is the crutch the market is leaning on, but pockets of strength in technology (+0.03%) are also a source of support... Software and semiconductor issues are providing some leadership in the latter arena... Software is getting a boost from the merger innuendo that was a feature in this week's Barron's while semiconductors have been propped up by some bullish analyst backing...

Specifically, Legg Mason and Thomas Weisel Partners are pushing KLA-Tencor's (KLAC 49.58, +0.68) prospects while Bernstein said now is the time to step up when it comes to Intel (INTC 25.64, +0.23)... NYSE Adv/Dec 765/1751, Nasdaq Adv/Dec 714/1733

[ozymandius]

58. Katrina Closes Refineries; Oil Prices Up

VIENNA, Austria - Crude oil futures briefly surged above $70 a barrel for the first time as Hurricane Katrina barreled Monday toward the heart of U.S. oil and refinery operations in the Gulf of Mexico, shutting down an estimated 1 million barrels of refining capacity.

The Category 4 storm advanced on an area crucial to the U.S. energy infrastructure — offshore oil and gas production, import terminals, pipeline networks and numerous refining operations in the southern states of Louisiana and Mississippi. After slamming ashore, it advanced toward low-lying New Orleans with winds of 145 miles per hour and the threat of an extremely dangerous storm surge.

"This is the big one," said Peter Beutel, an oil analyst with Cameron Hanover. "This is unmitigated, bad news for consumers."

The Gulf of Mexico normally produces 1.5 million barrels of crude oil a day, or about a quarter of the United States' domestic output, according to the U.S. Mineral Management Service.

more

[UpInArms]

62. Stocks shake off losses; oil below $70

http://www.marketwatch.com/news/story.asp?guid=%7BA058C640%2D7FE9%2D489F%2DA6BD%2D02445FCC4C34%7D&siteid=mktw

NEW YORK (MarketWatch) - U.S. stocks shook off initial losses Monday morning, bolstered by gains for ExxonMobil and other energy stocks, as crude futures managed to stay below $70 a barrel and investors tracked Hurricane Katrina.

The Dow Jones Industrial Average ($INDU: news, chart, profile) was up 16.72 points at 10,414, the S&P 500 ($SPX: news, chart, profile) up 1.18 points at 1,206 and the Nasdaq composite ($COMPX: news, chart, profile) up 3.43 points at 2,124.

There were 293 million shares traded on the New York Stock Exchange, where decliners outnumbered advancing stocks by 16 to 12. In the Nasdaq market 314 million shares were traded; falling stocks outnumbered rising shares by 15 to 10.

Stocks Monday opened lower amid worries that Hurricane Katrina may devastate the city of New Orleans and severely curtail Gulf of Mexico oil production.

However, the market managed to move into positive territory after the first half hour of trade as crude futures opened well below the record $70.80 a barrel level struck overnight. See full story. Crude futures last were up $2.12 at $68.25.

"Stocks should be trading a lot lower," said Art Hogan, chief market strategist at Jefferies & Co. "I would not say there is a counter-balancing positive factor to what is happening with Katrina."

...more...

[UpInArms]

56. Automakers open lower with monthly sales on radar (incentives losing punch

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38593.4296394329-840964734&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Toyota Motor (TM) fell 1.5% to $80.81 early Monday, leading a broad decline in the auto group with U.S. monthly sales on tap later this week. General Motors (GM) and Ford Motor (F) dropped less than 1% ahead of what looks to be a softer month of sales as employee discount incentives seemed to have lost their punch. General Motors will also hold an analyst meeting on Tuesday morning.

[UpInArms]

59. It's Your Money: General Dynamics unit wins Army pact valued up to $191M

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38593.4415688657-840965190&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- General Dynamics Ordnance and Tactical Systems, a unit of General Dynamics Corp. (GD) , said Monday that it has won a 4-year, $30 million demilitirazation contract from the Army Field Support Command in Rock Island, Ill. The contract has four 1-year options, valuing the contract at $191 million if all options are exercised. The General Dynamics unit will undertake demilitarizing 54 different types of conventional ammunition within six munitions families, including cluster bombs, propellant charges and pyrotechnics.

[ozymandius]

60. dropping

10:43
Dow 10,403.66 +6.37 (+0.06%)
Nasdaq 2,121.76 +0.99 (+0.05%)
S&P 500 1,205.09 -0.01 (-0.00%)
10-Yr Bond 4.162% -0.03
NYSE Volume 426,978,000
Nasdaq Volume 348,698,000

[UpInArms]

64. 10:55 EST clinging to that 10,400 number

Dow 10,401.36 +4.07 (+0.04%)
Nasdaq 2,121.48 +0.71 (+0.03%)
S&P 500 1,204.66 -0.44 (-0.04%)
10-Yr Bond 4.163 -0.26 (-0.62%)

NYSE Volume 462,613,000
Nasdaq Volume 377,898,000

[ozymandius]

72. blather

10:55AM: Action has been a little choppy to this point as there hasn't been a great deal of conviction from either buyers or sellers... Market breadth reflects a negative disposition as decliners lead advancers at the NYSE and Nasdaq; however, the indices haven't suffered any noticeable damage thanks to the relative strength in large-cap issues... Mid-cap and small-cap stocks, though, aren't down to any great extent themselves as evidenced by the modest 0.2% decline in both the S&P 400 Midcap Index and the Russell 2000... NYSE Adv/Dec 1310/1620, Nasdaq Adv/Dec 1094/1600

[54anickel]

65. Settlement Splurge

http://www.forbes.com/home/business/2005/08/29/spitzer-settlement-banks_cx_lm_0829spitzer.html

NEW YORK - Two years ago, the nation's big investment banks agreed to pay $1.4 billion to regulators to settle conflict-of-interest charges in their stock research departments. But since then, little of the money made its way into the hands of jilted shareholders. And most of it never will.

Instead, federal and state regulators are engaged in an increasingly public skirmish over how best to spend the money meant for investor education.

Some $52 million earmarked for federal programs remains in legal limbo, awaiting a court ruling, as the Securities and Exchange Commission and the administrator for investor education funds step aside, leaving the states to take pot shots at one another.

Meanwhile, out of the $30 million in state investor education funds, grants have gone for things like film documentaries, lecture series and, in the case of Georgia, a $4.3 million television ad campaign that critics have said helped raise the profile of Secretary of State Cathy Cox, who is now running for governor. (See: How The Banking Settlement Got Spent In Georgia)

Sure, investor restitution probably wasn't Eliot Spitzer's main objective. In chastising the way the investment banking industry works, the New York Attorney General who led the charge against the banks, called for a cultural reform and sweeping structural changes in the way the business operates.

more... :grr:

[Roland99]

66. This won't help gas/oil prices

"jus coming across the wires.some oil rigs have remote sensor...according to these reports...they have lost comm link with 26 oil rigs - presumed lost..and 24 more are badly listing..."

[ozymandius]

68. Retail Gas Prices Set to Hit New Highs

WASHINGTON (AP) -- Retail gasoline prices are poised to jump to new highs this week as Hurricane Katrina barreled toward the heart of U.S. oil production and refining operations in the Gulf of Mexico on Monday, sending crude-oil futures briefly above $70 a barrel for the first time.

Wholesale gasoline prices in the New York and Gulf Coast markets soared by 25-35 cents a gallon on Monday following reports that about 8 percent of U.S. refining capacity had been shut down ahead of the storm. One analyst said pump prices nationwide would likely average more than $2.75 a gallon by week's end, up from about $2.60 a gallon Monday.

"Unfortunately, I don't think $3 a gallon is a hyperbolic number in some markets anymore," said analyst Tom Kloza of Wall, N.J.-based Oil Price Information Service. He emphasized that the market reaction is a reflection of supply tightness, not shortages.

The Category 4 storm advanced on an area crucial to the U.S. energy infrastructure -- offshore oil and gas production, import terminals, pipeline networks and numerous refining operations in the southern states of Louisiana and Mississippi. Oil companies evacuated workers and shut down more than 600,000 barrels of daily production in the Gulf.

more

[54anickel]

70. Bush may tap strategic oil reserve as prices soar

http://www.usatoday.com/money/industries/energy/2005-08-28-oil-katrina_x.htm?POE=NEWISVA

NEW YORK — The Bush administration said Monday that it would consider loaning crude oil from the government's emergency stockpile, IF requested by U.S. refiners facing delayed shipments due to Hurricane Katrina.

"Certainly that option is on the table and it is a possibility based on what we have done in the past with other hurricanes," an Energy Department spokesman said.

However, the Energy Department has not yet received a formal request for loans from the Strategic Petroleum Reserve (SPR), a crucial administrative step that starts the decision-making process, the spokesman said.

"There hasn't been a request yet, and we aren't going to make a decision before there is a request."

more...

[54anickel]

83. 'Too early' for SPR oil decision-W.House

:wtf: It ain't too soon for the traders to bid up the prices. What are they waiting for?


http://today.reuters.com/News/newsArticle.aspx?type=businessNews&storyID=2005-08-29T171217Z_01_N29211780_RTRIDST_0_BUSINESS-WEATHER-KATRINA-ENERGY-BUSH-DC.XML

EL MIRAGE, Ariz. (Reuters) - The White House said on Monday it was considering whether to use the government's emergency oil stockpile in response to any disruptions caused by Hurricane Katrina's rampage through the Gulf of Mexico, but that it was "too early" for a decision.

"Obviously the Strategic Petroleum Reserve is there for emergency situations, and that would include natural disasters. But it's just too early to know at this point," White House spokesman Scott McClellan told reporters aboard Air Force One.

The U.S. government loaned more than 5 million barrels of crude oil to refiners from the stockpile last year following supply disruptions caused by Hurricane Ivan. The stockpile consists of more than 700 million barrels of crude oil stored in underground salt caverns in Louisiana and Texas.

No decision on loaning oil from the stockpile was expected on Monday, according to an administration official who spoke on condition of anonymity.

"It's probably going to take some time to assess it," the official said.

more...

[UpInArms]

88. I'm certain that assessment will include how many $$$$ can be

sucked from the pockets of the average 'murkin. :eyes:

"It's probably going to take some time to assess it," the official said.

[ozymandius]

69. Stocks Up As Katrina Torments Refineries

NEW YORK (AP) -- Wall Street recovered from early losses and edger higher Monday even as Hurricane Katrina tormented U.S. refineries in the Gulf of Mexico, disrupting energy production there and catapulting oil prices to new record highs.

Stocks scattered but moved mostly higher as crude-oil futures eased after surging past $70 a barrel on news that Katrina has so far shut down an estimated 1 million barrels of refining capacity. A barrel of light crude jumped $2.52 to $68.65 on the New York Mercantile Exchange.

The supply disruption weighed on shares of oil and gas producers, while home-improvement retailers Home Depot Inc. and Lowe's Cos. got a lift as resident along the Gulf coast prepared for Katrina's approach. Concerns about losses from storm damage pulled down the insurance sector.

more...

http://biz.yahoo.com/ap/050829/wall_street.html?.v=11

[UpInArms]

71. 1:00 EST PIEHOLE ALERT: President Bush considers tapping oil reserves, rep

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38593.4845559491-840966806&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) -- President Bush is considering tapping emergency stockpiles of oil stored in the Strategic Petroleum Reserve in response to Hurricane Katrina's disruption of oil and natural gas production in the Gulf of Mexico, a report from the Associated Press said Monday. Bush is slated to speak in Arizona at 1 p.m. Eastern on Monday. The president can authorize the release of the federally owned supplies in the event of a national emergency.

[54anickel]

75. TWINS!!!

:toast:

[UpInArms]

73. From Gamblers Anonymous: Odds of December Fed rate hike back below 50%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7B9C22CF89-C7A8-44E5-9CFD-58955CE03D8B%7D&

CHICAGO (MarketWatch) -- With a fresh surge in oil prices as Hurricane Katrina shuts down Gulf of Mexico production, futures traders at the Chicago Board of Trade have scaled back their predictions for the year-end Federal Reserve interest-rate target. The futures market remains highly confident that the Fed will raise rates in quarter-point moves at both the September and November meetings, taking the target to 4%. But the likelihood for a 4.25% target after the Fed's Dec. 13 meeting has been trimmed to 48% from 55% priced into futures trading on Friday.

[UpInArms]

76. U.S. freight rails suspend New Orleans lines

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-29T145800Z_01_N29557568_RTRIDST_0_TRANSPORT-RAILS-KATRINA.XML

BOSTON, Aug 29 (Reuters) - Hurricane Katrina has forced Union Pacific Corp. (UNP.N: Quote, Profile, Research) and other major rail operators to halt freight traffic in and out of New Orleans, delaying shipments of chemicals and other cargo, officials at those companies said on Monday.

Shares of railroad companies fell on concerns about the storm -- already estimated to be the most expensive hurricane ever to hit the United States -- with the Dow Jones Railroads index falling 0.73 percent in morning trade.

Burlington Northern Santa Fe Corp. (BNI.N: Quote, Profile, Research) and Norfolk Southern Corp. (NSC.N: Quote, Profile, Research) said they halted traffic into New Orleans on Saturday and have moved supplies to the area to repair any damaged lines once the storm passes.

Burlington Northern, the No. 2 U.S. railroad operator, runs four trains a day in and out of New Orleans, while Norfolk Southern said it runs 10 to 12 trains a day in and out of the city.

...more...

[ozymandius]

77. We appear to be range bound.

12:49
Dow 10,418.01 +20.72 (+0.20%)
Nasdaq 2,124.87 +4.10 (+0.19%)
S&P 500 1,206.47 +1.37 (+0.11%)
10-Yr Bond 4.166 -0.23 (-0.55%)
NYSE Volume 785,898,000
Nasdaq Volume 625,465,000

12:30PM: After some early choppiness the market has settled into a narrow trading range... Although the majority of economic sectors (6 out of 10) are in positive territory, none are flexing their muscle to any convincing degree... Separately, the Treasury market has held a positive bid for most of the session as the spike in oil prices has fed some buying interest predicated on the notion that higher prices could restrain economic growth, and thereby, help curtail the Fed's tightening activities...

There's not a lot of conviction behind that trade, though, as volume is quite light in the Treasury market... The 10-yr note is currently +6/32 at 4.16%... NYSE Adv/Dec 1372/1709, Nasdaq Adv/Dec 1245/1614

[54anickel]

78. 1:13 and creeping up (unreal!)

Dow 10,435.68 +38.39 (+0.37%)
Nasdaq 2,130.18 +9.41 (+0.44%)
S&P 500 1,208.82 +3.72 (+0.31%)
10-yr Bond 41.54 -0.35 (-0.84%)
30-yr Bond 43.48 -0.33 (-0.75%)

NYSE Volume 853,323,000
Nasdaq Volume 687,667,000

1:00PM: Market continues to trudge along as conviction on both the buy-side and sell-side is lacking... Outside of the attention being paid to Hurricane Katrina, the lack of conviction in the equity market can be attributed to the vacation factor as many participants are either out of the office, or are thinking about being out of the office, for the upcoming Labor Day weekend.... Additionally, participants may be sitting on their wallets deliberately knowing that the influential employment report (for August) is due to be released on Friday...
Briefing.com expects to hear that 215K positions were added to nonfarm payrolls while the market is expecting an increase of 190K... NYSE Adv/Dec 1409/1707, Nasdaq Adv/Dec 1248/1623

[UpInArms]

80. twins again!

:toast:

[UpInArms]

79. 1:14 EST Warp Speed Ahead, Cap'n

Dow 10,440.28 +42.99 (+0.41%)
Nasdaq 2,131.54 +10.77 (+0.51%)
S&P 500 1,209.29 +4.19 (+0.35%)
10-Yr Bond 4.154 -0.35 (-0.84%)

NYSE Volume 855,722,000
Nasdaq Volume 690,187,000

1:00PM: Market continues to trudge along as conviction on both the buy-side and sell-side is lacking... Outside of the attention being paid to Hurricane Katrina, the lack of conviction in the equity market can be attributed to the vacation factor as many participants are either out of the office, or are thinking about being out of the office, for the upcoming Labor Day weekend.... Additionally, participants may be sitting on their wallets deliberately knowing that the influential employment report (for August) is due to be released on Friday...

Briefing.com expects to hear that 215K positions were added to nonfarm payrolls while the market is expecting an increase of 190K... NYSE Adv/Dec 1409/1707, Nasdaq Adv/Dec 1248/1623

[54anickel]

81. Heh, did ya check the buck lately? High on sumptin

Last trade 88.20 Change +0.34 (+0.39%)

Settle 87.86 Settle Time 23:36

Open 87.63 Previous Close 87.86

High 88.29 Low 87.45

[UpInArms]

82. 1:22 EST Happy Days Are Here Again!

Dow 10,450.16 +52.87 (+0.51%)
Nasdaq 2,132.84 +12.07 (+0.57%)
S&P 500 1,210.27 +5.17 (+0.43%)
10-Yr Bond 4.160 -0.29 (-0.69%)

NYSE Volume 882,422,000
Nasdaq Volume 711,536,000

Seems like the market and the dollar are getting a lot of help today :eyes:

[Roland99]

84. Very interesting. The hurricane wasn't as bad & oil hasn't spiked as much

BUT....for the markets to be this exhuberant?

[UpInArms]

86. blather (positive about the cost of energy)

:shrug:

1:30PM: The major indices have moved to their best levels of the day, driven by a further pullback in crude prices... Although crude futures are still up for the session (+$1.17 at $67.30), they are well off the high of $70.80 seen earlier in electronic trading... Other energy futures contracts, like natural gas, unleaded gas, and heating oil, are also well off their highs... The latter has contributed to the uptick in the stock market; all 10 economic sectors are in positive territory now...

Moreover, for the first time today we can write that advancers are outpacing decliners at both the NYSE and Nasdaq - albeit by a slim margin... NYSE Adv/Dec 1677/1465, Nasdaq Adv/Dec 1458/1455

[54anickel]

87. Why is there no mention of the Force Majeure in the blather?

[UpInArms]

89. 'cause the cheerleaders would hate to spook the cattle .... eom

[54anickel]

90. Nymex (Energy Markets) declares force majeure (Halt In Trading)

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1734980

[UpInArms]

92. 1:44 EST and the crowd roars !!!!

Dow 10,457.97 +60.68 (+0.58%)
Nasdaq 2,134.77 +14.00 (+0.66%)
S&P 500 1,211.36 +6.26 (+0.52%)
10-Yr Bond 4.166 -0.23 (-0.55%)

NYSE Volume 940,996,000
Nasdaq Volume 763,396,000

[ozymandius]

91. Looks like they're playing the Gong Show down on Wall Street.

1:43
Dow 10,457.82 +60.53 (+0.58%)
Nasdaq 2,134.65 +13.88 (+0.65%)
S&P 500 1,211.36 +6.26 (+0.52%)
10-Yr Bond 41.66 -0.23 (-0.55%)
NYSE Volume 940,996,000
Nasdaq Volume 763,396,000

1:30PM: The major indices have moved to their best levels of the day, driven by a further pullback in crude prices... Although crude futures are still up for the session (+$1.17 at $67.30), they are well off the high of $70.80 seen earlier in electronic trading... Other energy futures contracts, like natural gas, unleaded gas, and heating oil, are also well off their highs... The latter has contributed to the uptick in the stock market; all 10 economic sectors are in positive territory now...

Moreover, for the first time today we can write that advancers are outpacing decliners at both the NYSE and Nasdaq - albeit by a slim margin... NYSE Adv/Dec 1677/1465, Nasdaq Adv/Dec 1458/1455

[UpInArms]

93. the Street is definitely disgusting me today

looks like they just love high energy, death and destruction.

:(

(not wanting to see a crash, but a semblance of rationality would be nice)

[54anickel]

94. No fear - if a natural disaster can't push crude up nothing will! PARTEE!

The economy is strong, and getting stronger!!!

[54anickel]

95. Inflate or Die!

http://www.321gold.com/editorials/orlandini/orlandini082905.html

snip>

The Fed has managed to do this through the uncontrolled printing of dollars and it's gotten away with it, up until now, because the dollar has enjoyed the status as the world's reserve currency.

Normally, the printing press would have been enough, but 1999 saw the end of the greatest Bull Market ever in stocks as the stock bubble burst. The DJIA began a two year decline and this helped bring about a recession in the U.S. Under normal circumstances, you'd let these things run their course and you would even consider it nothing more than a healthy and much needed correction. Unfortunately, Mr. Greenspan didn't go that route. Instead, he decided to fight the Bear and began to drop interest rates to fifty year lows. Additionally, he made significant increases in the money supply. He had incredibly good luck in the perverse sense that the terrorist attack on New York provided all the justification one could want for such actions. The results were four fold:

1. The stock market bottomed in late 2002 and began a Bear Market rally that lasted until early 2005. It did so in spite of the fact that stocks never reached a reasonable value in order to justify the rally. In short, the bubble began to reinflate. 1

2. The commodities market hit new highs and we had a new bubble as people began to search for something tangible to invest in (versus a devaluating dollar).

3. We see a significant bond rally (another bubble?) against all projections, and

4. Finally, the combination of extremely low interest rates and access liquidity produced the biggest bubble of all, the real estate bubble!

The fact that we went to war in Iraq only served in increase the liquidity feast. In fact, I'll go even a step further and say that the only reason we went to war was to draw the average American's attention away from growing economic problems at home. It became a case of 'let's all rally around the flag'. And that's just what we did. Now we're mired in a situation (Iraq) that we can't get out of.

In conclusion, Greenspan decided that he didn't want any recessions, or worse yet, depressions on his watch so he took the initiative and tried to fend off the Bear. He decided to "inflate or die". This decision is directly responsible for the housing bubble which I believe has now burst. The only question is, can we deflate in a controlled manner or not? I seriously doubt it.

more...

[UpInArms]

96. RED FLAG: Homebuilder insiders on selling spree

http://www.marketwatch.com/news/story.asp?guid=%7B24A0E167%2D75D3%2D4B97%2D8623%2D96A6CFC6C5BF%7D&siteid=mktw

BOSTON (MarketWatch) -- A rash of insider selling in recent months at red-hot homebuilders appears reminiscent of a similar trend right before the technology bubble burst in 2000, Merrill Lynch said Monday.

"There has been record insider selling within the last 10 months across a broad range of homebuilding companies despite very few sell ratings by Wall Street analysts and the general perception by investors that the stocks are undervalued," Richard Bernstein, the firm's top strategist, wrote in a note to clients.

Based on data going back to 1985, Merrill found that insider net selling at eight major homebuilders -- including bellwethers such as such as KB Home (KBH: news, chart, profile) , Ryland Group Inc. (RYL: news, chart, profile) and Toll Brothers Inc. (TOL: news, chart, profile) -- has hit record levels at some point in the last 10 months.



"Such insider behavior seems to mimic that of the technology sector around the peak of the technology bubble in March 2000," Bernstein said.

In July, Toll Bros. Chief Executive Robert Toll made two large sales in July worth $57 million and $27.4 million, according to data from Thomson Financial. Meanwhile, Bruce Toll, a board member, sold $21.7 million worth of stock in late July.

...more...

[UpInArms]

98. 2:41 EST numbers and dreck

Dow 10,458.84 +61.55 (+0.59%)
Nasdaq 2,135.15 +14.38 (+0.68%)
S&P 500 1,211.59 +6.49 (+0.54%)
10-Yr Bond 4.174 -0.15 (-0.36%)

NYSE Volume 1,117,270,000
Nasdaq Volume 901,823,000

2:30PM: Buying efforts have tapered off, but the major indices remain comfortably above the unchanged line with leadership from the technology (+0.69%) and health care (+0.90%) sectors underpinning the blue chip averages...

To that end, IBM (IBM 81.54, +1.16) and Johnson & Johnson (JNJ 62.90, +0.96) are two of the Dow's top three components today - the other is Boeing (BA 67.22, +0.91), which is outperforming despite a Wall Street Journal article today that raises the possibility of a strike ensuing at the aircraft manufacturer if a proposed contract for the 18,300 member International Association of Machinists and Aerospace Workers union suggests there will be a paring of the company's defined-benefit pension plan... NYSE Adv/Dec 1847/1321, Nasdaq Adv/Dec 1554/1399

2:00PM: With energy futures slipping well off their best levels of the day (crude +$0.32 at $66.45/bbl), the market continues to advance in a broad-based campaign... The technology sector (+0.86%) has been the biggest driver of the uptick as leadership from large-cap players like Microsoft (MSFT 27.15, +0.18), Intel (INTC 25.79, +0.38), Cisco (CSCO 17.74, +0.34), Amgen (AMGN 79.84, +1.16) and Sandisk (SNDK 39.44, +2.16) is spilling over to other areas...

On a percentage basis, health care (+0.93%) is the biggest mover among the economic sectors and is lending an added source of influential support to the broader market... Nasdaq 100 +1.0, Russell 2000 +0.8, SOX +1.5, S&P Midcap 400 +0.5, NYSE Adv/Dec 1767/1402, Nasdaq Adv/Dec 1533/1395

[54anickel]

100. The market complacency is down-right scary today...eom

[ozymandius]

99. 3:15 numbers and blather

Dow 10,477.86 +80.57 (+0.77%)
Nasdaq 2,137.81 +17.04 (+0.80%)
S&P 500 1,213.43 +8.33 (+0.69%)
10-Yr Bond 41.73 -0.16 (-0.38%)
NYSE Volume 1,235,184,000
Nasdaq Volume 999,745,000

3:00PM: Indices are holding near their best levels of the day, but buying efforts have slowed somewhat with the bleeding in crude futures having been stopped for the time being.... To that end, crude futures were as high as $70.80 today, but ultimately pulled back to $66.30 before buyers re-emerged to push them to their current level of $67.25 (+$1.12)... Right now, gains in the U.S. indices are on par with what many European bourses posted today; however, they are much higher than the losses incurred by Asian indices...

Indonesia's Jakarta Composite dropped 5.16%, South Korea's Kospi Index fell 2.09%, and Japan's Nikkei slipped 1.0% as the surge in energy futures overnight weighed heavily on those markets... NYSE Adv/Dec 1845/1357, Nasdaq Adv/Dec 1568/1393

And with that... I must go. Have a good evening Marketeers!

Ozy :hi:

[54anickel]

101. Closing - hurricane? What hurricane? Me worry?

Dow 10,463.05 +65.76 (+0.63%)
Nasdaq 2,137.65 +16.88 (+0.80%)
S&P 500 1,212.28 +7.18 (+0.60%)
10-yr Bond 4.173% -0.02
30-yr Bond 4.364% -0.02
NYSE Volume 1,570,104,000
Nasdaq Volume 1,255,987,000


With Hurricane Katrina bearing down on the Gulf Coast near New Orleans, it was shaping up to be a damaging day in more ways than one for a lot of people... For stock market participants, it seemed all but certain that investment portfolios would decline in value as a spike in energy futures prompted a decline in equity futures before the open...
Taking its cue from the futures lead, the cash market slipped at the open, but the losses it suffered were just a drop in the bucket compared to what might have been expected when crude futures, propelled by supply disruption concerns, hit a record high $70.80/bbl in electronic trading... As it so happens, Asian markets suffered the brunt of that troubling sight, whereas, stock indices in Europe and the U.S. weathered that futures storm in resilient fashion.... Trading in the regular session saw the gain in crude futures nearly wiped out in the face of reports detailing Katrina's waning strength and an indication from the Dept. of Energy that oil would be released from the Strategic Petroleum Reserve if necessary following damage assessments...

To wit, shortly before the futures market closed in the afternoon, crude futures were up just $0.17 at $66.30/bbl... Late-session buying interest, though, left the October contract up $1.07 at $67.20/bbl... Nonetheless, the sharp pullback from earlier highs put a bid in the stock market that was accented by broad-based buying interest - albeit on low volume... Leading the stock market's afternoon charge was the health care sector (+1.00%) whose defensive attributes appealed to today's participants.... It was the best-performing of the economic sectors Monday and was followed by energy (+0.68%) and information technology (+0.68%)...

Leadership from the energy sector stemmed from the gains seen in the futures market, but like energy futures, the energy sector closed well off the 1.9% gain logged in its first hour of trading... As that sector's sponsorship faded, though, new sponsorship arose from most other sectors, particularly information technology... The latter was aided by merger innuendo surrounding the software industry and some bullish analyst backing for the likes of KLA-Tencor (KLAC 49.92, +1.02) and Intel (INTC 25.73, +0.32) that propped up the semiconductor group...

Not surprisingly, the consumer discretionary sector (+0.33%) underperformed as the sight of rising energy prices and an indication from Wal-Mart (WMT 45.65, -0.05) that it expects August same-store sales growth at the low end of its guidance range of 3-5% acted as an overhang... The home improvement retailers, however, were a bright spot as both Home Depot (HD 40.54, +0.73) and Lowe's (LOW 64.60, +1.42) got a boost on the notion rebuilding efforts following Katrina's passing should lead to increased sales...

On Tuesday, the consumer discretionary sector promises to be back in the spotlight as the Conference Board is set to release its Consumer Confidence report for the month of August... Added attention will also be paid to the minutes form the Aug. 9 FOMC meeting as participants will be hoping to glean some insight on how long the Fed's current tightening cycle is apt to last...Russell 2000 +1.03, SOX +1.34, S&P Midcap 400 +0.67, NYSE Adv/Dec 2040/1200, Nasdaq Adv/Dec 1765/1235

3:30PM : The market has established new session highs in the past half hour amid broad-based buying interest that has been sponsored by influential leadership groups such as technology, health care, and energy, though the latter sector is well off earlier highs... Despite the decent-sized gains in the major indices, it can still be said that there isn't a lot of conviction behind the advance as volume totals at the NYSE and Nasdaq speak to the brain drain that often occurs when a long weekend is on the near horizon...

To wit, volume at the NYSE and Nasdaq just topped 1.0 bln shares with a half hour to go... On heavy trading days, it isn't unusual to see Nasdaq volume above, or near, 1.0 bln shares around 12:00 ET... NYSE Adv/Dec 1900/1307, Nasdaq Adv/Dec 1643/1355


And one last peek at the buck

Last trade 88.21 Change +0.35 (+0.40%)

Settle 88.25 Settle Time 15:36

Open 87.63 Previous Close 87.86

High 88.29 Low 87.45


Have a great evening :hi: We're all gonna be rich!