STOCK MARKET WATCH, Monday 19 September

[ozymandius]

Monday September 19, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 124 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 273 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 337 DAYS
DAYS SINCE ENRON COLLAPSE = 1394
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 September 16, 2005

Dow... 10,641.94 +83.19 (+0.79%)
Nasdaq... 2,160.35 +14.20 (+0.66%)
S&P 500... 1,237.91 +10.18 (+0.83%)
10-Yr Bond... 4.26% +0.05 (+1.14%)
Gold future... 463.30 +4.00 (+0.86%)

GOLD, EURO, YEN, Dollars and Loonie




PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Tim W. Wood

THE DOW REPORT
Confirmations

Yes, according to the Dow theory the Secondary Trend may be bullish, but the recent non-confirmation is warning that this secondary bullishness is on shaky ground. From the short-term low that formed on August 26, 2005 at 10,384 the Industrials have rallied. All the while, the Transports have not only lagged, but have actually moved below their corresponding short-term low. This has in turn created a short-term non-confirmation. When these non-confirmations occur, they are not sell signals per se as we use very specific indicators and rules that trigger the actual signals. But, these non-confirmations do serve as warnings, and unless corrected, they usually lead to a trend change. Another way to think about these non-confirmations is that they are high-probability windows of opportunity for a change in trend to occur.

I have also found the Retail Holders to be a good index to watch as well. In the chart below we have the Industrials in the upper window and the Retailers in the lower window. Notice that with the decline into the late August short-term lows the Industrials held above the short-term low that occurred in early July. Yet, the decline into the corresponding short-term low by the Retailers in early September carried price below the late June short-term low. This in effect has created a non-confirmation between the Retailers and the Industrials. Note that the rally out of the early September lows by the Retailers has thus far been very weak and has already given up most of the advance. Failure of the Retailers to hold above the early September lows would indeed spell more trouble for that sector, and any such weakness should also begin to bleed over into the Industrials as well.

-cut-

Notice that as the Industrials were trending down into the October lows last year that the Financials were not confirming these lower lows. With the Industrials moving down at that time and the Financials not confirming, this created positive non-confirmations, which lead to the rally into December. At the highs in December these two indexes were in gear. But then look what happened as the Industrials rallied into their March high. The Financials lagged and since the market was then trending up, this created a bearish non-confirmation which lead to the decline into the April lows. I also want to point out that the Retailers did not confirm the March highs in the Industrials and that non-confirmation was also telegraphing the decline into the April lows.

more...

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

[UpInArms]

2. daily dollar watch

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

Last trade 88.52 Change +0.47 (+0.53%)

Dollar Rallies on Expectations that Fed will Deliver Another Quarter Point Rate Hike

http://www.dailyfx.com/index.php?option=com_content&task=view&id=3550&Itemid=39

US Dollar


It has been an exceptionally strong week for the dollar. The greenback has managed to gain strength against most of the major currency pairs despite a batch of mixed economic data. Over the past week, we learned that inflation, particularly core inflation for the month of August was much softer than expected, suggesting that the rise in energy prices may actually have a deflationary affect on the prices of other products. Headline retail sales, industrial production, jobless claims, consumer confidence, and the manufacturing sector surveys from the Philadelphia and NY region all pointed to weaker conditions in August and September. It was the more backward looking or delayed releases such as the trade (July) and current account balance (Q2) as well as the Treasury International Capital flow report (July) that exhibited signs of strength. The market however has chosen to focus on the older data this week rather than the more current ones, leading to a 210-pip rally in the dollar against the Euro. With no significant data releases due out of the US on Monday, the FOMC rate decision on Tuesday afternoon has the market’s undivided attention. At this point, a quarter point rate hike to 3.75% is a near certainty. Of the 1130 people who participated in the DailyFX interest rate poll, only 10% of the respondents expect interest rates to remain at 3.50% at year end, while 40% expect interest rates to be increased only 2 more times this year. As we have previously mentioned, the Federal Reserve is probably in “information-gathering” mode as they assess how much of an impact Katrina has on US jobs and the economy as a whole. Meanwhile, the economic data released this morning was very mixed. The current account deficit and the University of Michigan consumer confidence number both came in worse than expected. Yet the sharp rise in net foreign purchases of US assets negated any pessimism. The market had anticipated foreign purchases of US assets to increase by $60 billion in the month of July but instead; it increased by a whopping $87.4 billion. This is more than enough to fund the same month's trade deficit of $57.9 billion and should relieve any fears that foreign demand is waning. It is important to note that the strong inflows were primarily from the private sector and public.

...more...

[54anickel]

8. Whoa, was there a lot of pent up demand over the weekend? Quite

the spike on Sunday at 6pm. :shrug:

[UpInArms]

11. and check out gold: Gold futures rally $5 Monday

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38614.3641738426-842816543&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Gold futures rallied $5.10 to $468.40 an ounce on the New York Mercantile Exchange Monday morning. Trading in the precious metal has sent prices to a 17-year high with the rise stemming from ongoing worries about inflation and high demand.

[54anickel]

14. So how come none of this "stuff" happened during OUR "election" or

any of the other BS that's been going on with this mal-admin?
Someone tell me our markets aren't "fixed" - I won't believe it.

[UpInArms]

16. I'm also having a bit of trouble (understatement?) with one of

the fallacial statements that keeps being circulated:

"The markets are a reflection of the economy."

When they say this with a straight face and then in the next breath say that Katrina will not affect the markets, you have to know that one of those statements is incorrect.

Guess which one?

[UpInArms]

23. seems the German election won't be decided until Oct 2

http://www.marketwatch.com/news/story.asp?guid=%7BA6AC3CB1%2D4789%2D4EFA%2DA6DB%2DBCFDBAC2F1F2%7D&siteid=mktw

excerpt:

The perceived stalemate is seen limiting passage of pro-growth reforms that some see necessary to revive the German economy, Europe's largest. German GDP was flat in the second quarter.

Merkel and Schroeder are both now claiming the right to be Chancellor. The race was proving to be the most closely contested since World War II.

The final outcome is waiting on one district in Dresden where a candidate died ahead of the election, delaying the vote there until Oct. 2.

...more...

[JNelson6563]

18. heh heh

No surprise here.

Your long-on-gold friend--

Julie

[UpInArms]

52. Gold futures top $472, levels not seen since 1988

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38614.4702063542-842828121&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

SAN FRANCISCO (MarketWatch) -- Gold futures climbed to a high of $472.40 an ounce, a level not seen since 1988, according to monthly charts. December gold was last at $471.10, up $7.80, or 1.7%. Prices found support as rallying energy prices sparked worries over inflation.

[Roland99]

79. Of course...right when my daughter is looking to buy her H.S. ring

[54anickel]

27. Barrick plans to restore reputation (Did they hire Rove?)

http://www.theglobeandmail.com/servlet/story/RTGAM.20050917.wxrbarrick17/BNStory/Business/

Vancouver — When Greg Wilkins became chief executive officer of Barrick Gold Corp. in February, 2003, the company was not exactly having its finest hour.

Under fire for its controversial hedging strategy, suffering from a credibility problem after issuing a surprise profit warning in 2002, Barrick was losing ground to competitors considered to have more reliable operations and more room to profit from rising gold prices.

For Mr. Wilkins, who started his career at Barrick in 1981 and spent the dozen years before he became CEO as a director, the challenge was simple: Restore Barrick's status in the gold sector and the company's reputation for living up to its commitments.

The first item on his list: Visit Barrick's far-flung operations and talk to employees.

more...

[UpInArms]

30. the Barrick Barracudas strike again

http://www.davidicke.net/tellthetruth/reststory/bronfmangold.html

excerpt:

Barrick's Barracudas

In announcing the creation of Barrick Gold Corp.'s international advisory board on May 3, 1995, Barrick Chairman Peter Munk said, "They will be providing strategic advice on geopolitical issues affecting Barrick.'' In fact, they are components of the geopolitical dirty tricks apparatus centered around former President George Bush. The following is a brief profile of key members of Barrick's international advisory board and its board of directors:

George Bush:
serves as "Honorary Senior Adviser.''

Brian Mulroney:
prime minister of Canada from 1984 to 1993. Mulroney became prime minister after backers of the Nicaraguan Contras helped knock out his competitor, Joe Clark. There were no serious investigations of the `Iran-Contra' Canadian connection. Mulroney sacrificed his political career by talking Canadians into accepting Bush's North American Free Trade Agreement (NAFTA). Though Canadian banks benefitted, 350,000 industrial jobs were lost, and Mulroney became the most hated man in Canada. In the 1993 elections, Canadians voted out all but 2 of his party's 169 members of Parliament.

In 1994, Mulroney's phone calls to the Presidents of Chile and Argentina, and the prime minister of China, helped Barrick move into gold mines in those nations. His "advice'' was rewarded with $1.2 million in stock options and $300,000 in fees. Rev. Sun Myung Moon rewarded Mulroney and Bush for their vouching for him in Ibero-America in November 1996. Mulroney, a board member of Archer Daniels Midland, ran ADM's internal "investigation'' of its price-fixing scandal.

...more...

http://64.233.167.104/search?q=cache:bt6t5sfVPJgJ:www.afrocentricnews.com/html/georgebushgiveaway.html+munk%2Bbarrick%2Bgeorge%2Bbush&hl=en&client=opera

George Bush's $10 billion giveaway to Barrick Gold

In 1985-86, Barrick Gold Corp. paid two other mining companies $63 million for a small working Nevada mine, called Goldstrike. Within a few years, it was found to contain 24.6 million ounces of gold, worth about $10 billion. Goldstrike was on federal property. Under existing legislation, designed in 1872 to populate and bring development to the West, miners could operate on federal land for free, once they had filed a claim. They could obtain full legal title to the land at $5 an acre, upon completion of a long and expensive process called ``patenting.''

In 1992, however, pressure was building for a new mining law to require that those given federal properties pay a royalty, a certain percentage of what they mine each year. As expected, when the Clinton administration took office in 1993, it sought a 12.5% royalty. At that rate, the 25 major mine claims then in the process of being privatized, would eventually yield an estimated $10.75 billion to the U.S. Treasury.

Mining companies caused a major jam-up at the Bureau of Land Management, as they rushed to obtain patents before Congress applied royalties. By 1992, the long waiting line at the BLM Nevada office made it doubtful that many mines would get over the critical hurdle in the patent process in time. It would normally take several years for a mine of Goldstrike's size and complexity to complete the process, a BLM source commented, and the average during the previous four-year period was 10.3 months. But, Barrick made it in only 4.8 months.
Barrick filed its applications for 1,144 acres of land in March and April 1992. That summer, a pilot program for ``expedited processing'' of Nevada patents was instituted by BLM chief Delos Cy Jamison, a Republican who had been appointed to that post by President George Bush in 1989. Jamison concocted this speed-up procedure with the BLM Nevada state director, without informing his own staff. ``Bells went off in my head when I heard about it,'' a former BLM staffer told {EIR.}

...more...

[54anickel]

70. I figured you'd have a few tidbits to pull out regarding Barricks and BFEE

[54anickel]

69. Gold Prices Rise, Extends Rally to 17-Year High, on Inflation Concerns

Edit to replace dupe

http://www.bloomberg.com/news/markets/commodities.html

Sept. 19 (Bloomberg) -- Gold rose in New York for a fourth straight session, extending a rally to a 17-year high, as a surge in energy costs renewed concern the pace of inflation is accelerating.

Bullion prices have jumped 12 percent in the past three months as oil, gasoline and natural-gas soared to records. Some investors buy gold as a hedge against rising consumer prices. Hurricane Katrina, the costliest U.S. natural disaster, drove consumer confidence to the lowest since 1992 and led analysts to cut estimates of economic growth.

``A lot of people see some risk in the current financial system, and they're diversifying into gold to protect their assets,'' said Bart Kitner, president of Montreal-based Kitco Inc., a gold-coin dealer. ``We're getting a lot of new customers.''

Gold futures for December delivery rose $8.60, or 1.9 percent, to $471.90 an ounce at 12:16 p.m. on the Comex division of the New York Mercantile Exchange after reaching $472.40, the highest since June 1988. Prices first breached a 17-year high on Sept. 15.

snip>

Oil's rally has made gold cheaper relative to the historical relationship between the two commodities, analysts said. It takes about seven barrels of oil to buy an ounce of gold, compared with 10 barrels in the 1970s.

``There's just a lot of hot money that had been in the oil market looking for the action, and gold is where it's at now,'' said David Solin, a partner at Foreign Exchange Analytics in Essex, Connecticut.

more...

[54anickel]

12. Euro Falls amidst Political Chaos

http://www.forexnews.com/NA/default.asp

The US dollar is higher this morning, boosted in part by expectations that the Fed will continue to raise interest rates tomorrow as well as by the euro’s weakness in the wake of yesterday’s German election, which has unexpectedly tightened and remains a virtual dead heat with both Chancellor Schroeder and Ms. Merkel claiming victory.

Although there was much speculation that the Fed would hold off raising rates until after the damage from Hurricane Katrina could be assessed, recent rhetoric from various Fed officials indicate that yet another rate hike – the 11th straight – is in the works, bringing interest rates to 3.75%.

snip>

The current strength of the dollar is also reflected in the US dollar index, which has steadily increased for 8 of the past 10 days. Given the fact that the index has recently broken north of its 9-week downward trend line, there is strong upside potential. A sustained break above the current resistance level of 88.84 should provide enough momentum for the dollar to top 89.00 on its way to this year’s high of 90.78. :wtf: Deficits don't matter?


snip>

With both sides claiming victory, it could be quite some time before a new government is agreed upon. Although a “grand coalition” between the CDU and SPD seems like the most probably outcome, there is already a battle raging about who would lead that coalition, with Mr. Schroeder already boasting that he is the only one who can lead a stable government.

As Ms. Merkel and Mr. Schroeder scramble to gather the support of other parties such as the Greens and the FDP, strong downward pressure will continue to weigh on the euro. Tomorrow’s interest rate decision by the Fed, which is likely to be a 25 basis point increase, could also drag the euro lower towards the $1.2120-25 territory.


http://www.forexnews.com/AI/default.asp
The Latest on the Dollar’s Imbalances

Net foreign capital flows into the US rose 8% to $87.4 billion in July from a revised a $80.9 billion in June (initial reading was $71.2 bln). Capital flows stood well above the $57.9 billion deficit for the same month; covering for the trade imbalance for the second straight month.

POSITIVES

Net foreign purchases of US government and agencies soared 81% to $28.5 bln and 86% to $37.7 bln respectively. But it’s worth noting that the jump in US treasuries followed a tepid $15.8 bln in June, which was the lowest since December.

Net foreign purchases of US stocks soared 210% to $10.1 bln, the highest since January. This is crucial in broadening the destination of foreign capital across US assets rather than focusing inflows largely in fixed income securities as has been the in the past few years.

Non-official net purchases of US treasuries soared over 1,200% to $25.0 billion, making up 87% of the $28.5 bln in foreign net purchases of treasuries for the month. This more than covered for the decline in treasuries by foreign investors.

NEGATIVES

The massive increase in private purchases of US treasures shadowed the tepid rise in official purchases (which largely comprise central banks). Whether this overconcentration of private interest in US treasuries is a “positive” or a “negative” depends on the perspective adopted. Since these private accounts largely make up hedge funds, their inherent volatility seems to be controlling the extent to which the US is financing its swelling trade deficit.

Net purchases of US corporate bonds fell 54% to $25 bln.

Gross holdings of US Treasuries by the major holders appears to be on the wane (see chart below). Most significantly is the waning interest by OPEC, whose holdings have fallen by more than 20% from their $67.6 billion high attained in January. OPEC holdings may not be as significant as those by China or Japan since they rank 8th in the league of top holders. Nonetheless, the fact that the cartel may not be recycling its petrodollars back into US assets to the same extent as it was doing in the 1970s may be cause for concern. This is also inconsistent with last month’s reports from that Saudi Arabia was working to repatriate a total of $360 billion invested abroad in the last 18 months. Foreign Minister Prince Saudi al-Faisal said the government was looking into returning these "national assets" back to the oil-rich kingdom and that it has "established qualified institutions for that purpose”.



more...

[54anickel]

29. Foreign Purchases of US Treasuries and Agencies are decreasing

http://www.kitcocasey.com/displayArticle.php?id=287

As discussed in previous columns for this site, the U.S. economy relies heavily on foreigners purchasing U.S. debt to keep the economy running smoothly. Foreign central banks have been keeping dollar values high and interest rates low by buying U.S. Treasuries in huge quantities. In fact, between 70% and 90% of U.S. government Treasuries issued in recent years were purchased by foreigners.

In case you are new to this story, for several years now I have been following a weekly indicator produced by the Federal Reserve that gives a close indication of foreign purchases of Treasury and Agency debt. It is now showing that foreign central banks are dramatically slowing their purchases through the Fed. Those purchases have fallen from a peak annual rate of $400B in early 2004 to about $200B in 2005 and now to an annualized $100B over the last quarter.

snip>

With the PPI running at 7% and CPI at 5% for August, 10 year Treasuries at 4.25% are below inflation, meaning they are now providing buyers a negative yield. September inflation is expected to be even higher as Katrina’s affect on gasoline price moves through the system. If inflation remains as persistent as oil prices have been of late, the market will require increased interest rates to keep foreigners in the buying mood.

snip>

Economists have been calling our trade deficit and budget deficit "unsustainable" for years and the markets have ignored them. More recently, the importance of the foreign re-investment of the trade deficit as a source of capital has become recognized. It is counter intuitive that the trade deficit, which is the source of these foreign investments, actually helps our short term interest rate and inflation. The assumption is that foreigners will automatically reinvest whatever trade deficit we have with them. But that now looks to be changing, and with it there could be a big shift for the stability of the US dollar, inflation, and interest rates.

As a present discounted value of potential catastrophe, I am amazed at the conundrum of how low long term rates have stayed. That maybe about to change.

more...

[UpInArms]

3. Biogen details executive stock awards in wake of layoff plans

http://www.boston.com/business/technology/biotechnology/articles/2005/09/17/biogen_details_executive_stock_awards_in_wake_of_layoff_plans/

Biogen Idec Inc. of Cambridge will award 200 top executives nearly 1.2 million shares of stock under a compensation package disclosed in a filing with federal regulators.

The restricted-stock plan was disclosed to the executives this week, just days after Biogen Idec said it would lay off 650 employees, or about 17 percent of its workforce.

Under the plan, executives who meet specific performance goals will be awarded stock in September 2006 and March 2007. The restricted-stock plan is in addition to any existing option or bonus plans.

''These are performance-based incentives to further align management with our ambitious long-term plans announced last week," said Jose Juves, a Biogen Idec spokesman. ''The performance goals are tied to pipeline development and achieving some financial objectives."

Biogen Idec's two highest officials, chairman William H. Rastetter and chief executive James C. Mullen, will not participate in the new stock awards. Based on yesterday's closing stock price, $41.24, the total award is worth about $48 million, or an average of about $241,000 for each of the 200 participants, if they meet the goals.

The timing of the new compensation package raised questions among academics who study corporate compensation.

...more...

[UpInArms]

4. Crude Oil, Gasoline Jump With Storm Headed for Gulf of Mexico

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aUBCU_4gH25w&refer=home

Sept. 19 (Bloomberg) -- Crude oil, gasoline and heating oil rose for the first day in three on forecasts Tropical Storm Rita will strengthen into a hurricane, threatening refineries and natural gas production in southern Texas by the weekend.

Four refineries along the Gulf of Mexico coast may not resume output until next year after Hurricane Katrina damaged them last month. U.S. natural gas futures jumped as Rita headed for producing areas. OPEC, meeting in Vienna today, is close to an agreement to offer customers all the crude it can pump.

``The storm situation is of concern, obviously, from the point of view of the damage that Katrina has done,'' said Kevin Blemkin, a broker with Man Financial in London. ``Going into the fourth quarter, refineries are going to be the main issue. There's no shortage of crude, so I don't think more output from OPEC is going to be necessary at this time.''

Crude for October delivery climbed $1.10, or 1.8 percent, to $64.10 a barrel on the New York Mercantile Exchange at 11:47 a.m. London time. Prices have declined 9.5 percent from a record $70.85 on Aug. 30. They have still almost doubled since the end of 2003.

Katrina forced at least eight refineries in Louisiana and Mississippi, accounting for about 10 percent of U.S. refining capacity, to close as it battered the Gulf coast on Aug. 29. Rita would be the ninth storm this year to enter the Gulf; five, including Katrina, have disrupted production or refining.

...more...

[UpInArms]

24. OPEC favoring no change in oil output

http://abcnews.go.com/Business/wireStory?id=1138925

VIENNA (Reuters) - OPEC producers on Monday looked likely to postpone action on extra crude supply, falling short of expectations among consumer countries hoping for relief from fuel price inflation.

The Organization of the Petroleum Exporting Countries started a 2-day meeting with many ministers favoring holding back reserves until needed in a world market short of refined product, rather than OPEC crude.

Oil prices have eased from a record $70.85 a barrel after Katrina. U.S. light crude rebounded $1.13 on Monday to $64.17 by 1125 GMT.

Sheikh Ahmad said support now was growing for a vow to release crude from 2 million bpd of spare capacity only when it is required. That would mean leaving official output quotas for 10 member countries unchanged at 28 million bpd.

<snip>

Several ministers said they were opposed to higher output quotas when global refining capacity is at full stretch and unable to process more crude.

"If nobody wants to buy it why should we increase the output ceiling," said Libyan Energy Minister Fathi Omar Bin Shatwan. "The problem is a shortage of refining capacity."

...more...

[ozymandius]

35. Chavez Sees 'True Crisis' Over Oil Reserves

LONDON - Dame mas gasolina, Venezuelan President Hugo Chavez may find himself humming. The sentiment of Daddy Yankee's high-octane reggaeton hit--which has been pumping out of every car stereo on the globe this summer--has uncannily caught the zeitgeist right by the tail.

Chavez, Washington's bugbear in South America, has told a U.N. summit OPEC members are in danger of sending the price of a barrel of crude over the century mark because they are pumping near capacity. "OPEC is practically already at its production ceiling," said Chavez, whose critics accuse him of using Venezuela's oil wealth to buy influence and push his socialist agenda in America's backyard. "The price of a barrel of crude is going to continue climbing," he added, by way of warning.

-cut-

Yet the problem is the oil reserves are running out, thinks Chavez. "It is a true crisis," he complained on state television. The country's oil minister, Rafael Ramirez, is also worried: He's not expecting OPEC to increase oil production because few member countries have the capacity to boost output.

more

[UpInArms]

34. Crude Oil opens at $64.70 bbl

0:04am 09/19/05 OCT CRUDE CLIMBS $1.70 TO $64.70/OZ IN EARLY NY TRADE

10:04am 09/19/05 OCT NATGAS JUMPS 7.8% TO $12.01 ON STORM CONCERNS

[UpInArms]

41. Oct NatGas hits all-time high of $12.35/mln btus

10:22am 09/19/05 OCT NATGAS TOUCHES ALL-TIME HIGH OF $12.35/MLN BTUS

[UpInArms]

42. Crude futures top $65; natural-gas prices jump 10%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38614.427660162-842823366&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Crude and natural-gas futures rallied in early trade on concerns that Tropical Storm Rita in the Atlantic may move toward the key energy-producing region in the Gulf of Mexico. October crude is up $2.15 at $65.15 a barrel in New York and October natural gas is up $1.136 at $12.29 per million British thermal units. Meanwhile, OPEC may offer the oil markets 2 mln barrels per day in additional oil if the demand is there, according to AFX, which cited comments from the cartel's President Sheikh Ahmad Fahd al-Sabah. The market had been expecting OPEC to raise its outout quota by 500,000 barrels per day. OPEC hasn't officially announced any decision as of yet.

[ozymandius]

84. Oil Prices Rebound Above $66 Per Barrel

NEW YORK - Crude-oil futures rebounded above $66 a barrel Monday amid worries that a storm gaining strength off the Bahamas could hit U.S. oil facilities in the Gulf of Mexico later this week.

The rise came as OPEC ministers met to discuss how to relieve price pressures in the oil market.

Benchmark light, sweet crude for October delivery rose $3.50, or more than 5 percent, to $66.50 a barrel in midday trading on the New York Mercantile Exchange, still more than $4 off its all-time high of $70.85 reached briefly on Aug. 30 after Hurricane Katrina hit the Gulf. Nymex crude had fallen $1.75 on Friday to its lowest closing price since Aug. 5.

Heating oil surged more than 18 cents to $2.02 per gallon, while gasoline rose more than 20 cents to $1.9870.

more

[UpInArms]

97. Crude at $67.39 bbl/NatGas at $12.663 mln btus/ unleaded gas at $2.0427

3:04pm 09/19/05 CRUDE FUTURES CLOSE AT A MORE THAN TWO-WEEK HIGH ATOP $67

3:04pm 09/19/05 OCT CRUDE CLIMBS $4.39, OR 7%, TO CLOSE AT $67.39/BRL

3:04pm 09/19/05 OCT UNLEADED GAS ENDS AT $2.0427/GAL, UP 14.4%

3:00pm 09/19/05 NATURAL-GAS FUTURES CLOSE AT AN ALL-TIME HIGH

3:00pm 09/19/05 OCT NATGAS CLOSES AT $12.663/MLN BTUS, UP 13.6%

[UpInArms]

63. U.S. stocks weaken as oil jumps over $3 a barrel

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-09-19T155613Z_01_N19294254_RTRIDST_0_MARKETS-STOCKS-UPDATE-6.XML

NEW YORK, Sept 19 (Reuters) - U.S. stocks fell on Monday as crude oil prices jumped more than $3 a barrel, raising concerns about consumer spending and corporate profits, while investors braced for another interest-rate hike by the Federal Reserve.

<snip>

"Everyone's waiting for the Fed, but the fact that the latest hurricane coming through spiked the oil prices took the rest of the market down with it," said Robert Drust, managing director of Wedbush Morgan, a listed trading regional investment bank. "If this is going to be another bad hurricane, it will definitely take some air out of the market."

U.S. crude oil futures surged more than $3 a barrel as another tropical storm headed toward Florida, and possibly the Gulf of Mexico, where oil operations are still struggling to recover after Hurricane Katrina hit late last month. Crude was up $3.60 at $66.60 on the New York Mercantile Exchange.

...more...

[UpInArms]

5. Rising cost of debt much more dangerous

http://www.suntimes.com/output/currency/cst-fin-terry19.html

For years, even through the terrorist attacks in September 2001, consumer spending has continued to rise. Interest rates remained low, and credit has been easily available. Home prices soared. Debt -- and leverage through debt -- became an accepted way of life. Savings disappeared. Soon, very soon, we're going to have to pay for our folly.

You don't need government statistics to tell you that prices are rising. In fact, for some items, prices are rising at an even faster rate than the 0.5 percent increase in the Consumer Price Index in August. Without food and energy increases, the CPI rose only 0.1 percent, but I don't know anyone who exists without food and energy for a month!

There are other components of the CPI that tend to minimize the impact of higher costs. The CPI's housing component is figured at the rental-equivalent cost. But with so many people buying homes, rental demand has eased, so rents have been held down. That puts downward pressure on a big component of the CPI, even as monthly mortgage payments get larger as home prices soar.

If you're a senior consuming health services, your cost of living is certainly rising at a more rapid rate than the index. Ditto if you're the parent of a college student. And ditto in spades if you're a first-time home buyer. If you're a cab driver or have a long commute to work, your budget is certainly strained by the rising cost of energy.

...more...

[UpInArms]

6. Contrarian Chronicles: Best Buy's message: The consumer is spent

http://moneycentral.msn.com/content/P127480.asp

Let's begin with the front of the consumer food chain -- end demand.

Last Tuesday, Best Buy (BBY, news, msgs) was forced to lower quarterly/yearly estimates, stating in its press release that the guidance was pre any effect from Hurricane Katrina. (Of particular interest to me: Same-store desktop personal computer sales declined.)

On the conference call, Best Buy also said its guidance excluded higher energy costs as well as the potential competitive fallout from the automakers' employee-discount programs (i.e., folks buying cars instead of flat-screen TVs). Management stated that since it doesn't yet know the impact of those items, it can't factor them in.

<snip>

Sell-out vs. sell-in

Contrast that with the glad tidings from Nokia (NOK, news, msgs), and you have a perfect example of what's occurring at the front end of the food chain, versus the middle of the food chain. Best Buy and CDW are examples of "sell-out" companies. They're dependent on selling out from the retail channel, i.e., they need real product sales. Nokia, a "sell-in" company, sells into the retail channel -- or into products sold into the retail channel.

Thus, Nokia and its component-suppliers, i.e., chipmakers (as well as companies like Nokia that sell into the retail channel), are all in the process of announcing wonderful quarters, while end demand has apparently started to stumble.

...more...

[UpInArms]

7. U.S. Bond Firms Cut 10-Year Forecast, Disagree on Fed

http://www.bloomberg.com/apps/news?pid=10000103&sid=akAPr56bbsKI&refer=us

Sept. 19 (Bloomberg) -- Wall Street's biggest bond-trading firms cut their forecasts for the 10-year Treasury yield after Hurricane Katrina sparked some doubt that the Federal Reserve will raise interest rates tomorrow for the 11th straight time.

The note's yield, a benchmark for company borrowing and mortgage loans, may reach 4.48 percent by year-end from 4.26 percent today, based on the median estimate of the 22 primary dealers of U.S. government debt that trade with the Fed. The median was 4.63 percent in a survey published Aug. 8.

The costliest U.S. natural disaster drove consumer confidence to the lowest since 1992 and led economists to cut their growth estimates. Economists at four firms including UBS Securities LLC said the Fed won't increase its benchmark interest rate tomorrow -- the first time since at least May when all 22 haven't agreed on higher rates.

``With Katrina the potential for rates to stay lower than they otherwise would have is greater,'' said Gerald Zukowski, deputy chief economist in New York at Nomura Securities International Inc., who forecasts the Fed will leave rates unchanged tomorrow. ``If the Fed pauses, it takes additional reasons away for yields to rise.''

...more...

[UpInArms]

9. Two Ex-Tyco Executives Face Sentencing

http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=AP&Date=20050919&ID=5120760

NEW YORK (AP) - Historically, white-collar criminals were handed long sentences only rarely. That has changed in recent years -- and two Tyco International executives may be the latest to bear the brunt.

Former CEO L. Dennis Kozlowski and Mark H. Swartz, the company's former finance chief, were to be sentenced Monday on grand larceny, securities fraud and other charges.

...short blurb...

[UpInArms]

58. Maximum Sentence Urged for Ex-Tyco CEO

http://www.forbes.com/entrepreneurs/feeds/ap/2005/09/19/ap2231593.html

A prosecutor urged a state judge Monday to sentence former Tyco International CEO L. Dennis Kozlowski to the maximum 15 to 30 years in prison for stealing hundreds of millions of dollars from the company.

Assistant District Attorney Owen Heimer told state Supreme Court Justice Michael Obus that Kozlowski, who was to be sentenced later Monday, "should not be shown any leniency."

"He stole. He committed fraud. He committed perjury," Heimer said.

Heimer said Kozlowski would still be eligible for parole after about 12 1/2 years.

He said Kozlowski had once urged the maximum sentence for an employee who stole one half of 1 percent of what Kozlowski stole.

The prosecutor was especially critical of Kozlowski's spending habits.

...more...

[UpInArms]

65. Kozlowski and Swartz to get up to 25 yrs

12:28pm 09/19/05 EX-TYCO EXECS KOZLOWSKI, SWARTZ GET UP TO 25 YRS - WSJ

edited to add link and blurb

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38614.526866331-842835094&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Former Tyco International Ltd. (TYC) Chief Executive Officer Dennis Kozlowski and former Chief Financial Officer Mark Swartz were sentenced Monday to eight and one-third to 25 years in prison for stealing hundreds of millions of dollars from the Bermuda-based conglomerate, according to report on the Wall Street Journal Web site. Kozlowski and Swartz were convicted in June on 22 counts of grand larceny, falsifying business records, securities fraud and conspiracy. The Journal also reported that the Securities and Exchange Commission's staff has recommended an accounting fraud case be brought against Tyco, citing a state prosecutor at the sentencing. The Wall Street Journal said the Associated Press contributed to its report.

[UpInArms]

10. New SEC chief to tighten hedge-fund rules - WSJ

http://today.reuters.com/investing/financeArticle.aspx?type=fundsNews2&storyID=URI:urn:newsml:reuters.com:20050919:MTFH94814_2005-09-19_05-37-14_N19253609:1

NEW YORK, Sept 19 (Reuters) - The new chairman of the Securities and Exchange Commission, Christopher Cox, plans to implement a controversial rule that would apply a stronger government hand to the trillion-dollar U.S. hedge-fund industry, the Wall Street Journal reported on Monday.

He also said he wants companies to do a better job of disclosing executive compensation, the newspaper reported.

In his first extensive interview since becoming the top U.S. market regulator, Cox struck a broadly cautious tone, suggesting he would ease up in general on issuing new rules and even reassess some existing regulations.

But while he told the Journal he would not make any radical shifts in the first few months of his tenure, he underscored the SEC's watchdog function.

Cox, a 52-year-old former California congressman and onetime securities lawyer, succeeded William Donaldson, who resigned as SEC chairman two years before his term expired after running into opposition when he proposed the rule requiring hedge-fund advisers to register with the SEC.

...more...

[UpInArms]

13. PXRE (Insurer) pegs its Katrina losses at $235 mln to $300 mln

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7B6514F117-98A3-4F46-9551-5105B374580B%7D&

NEW YORK (MarketWatch) -- Insurer PXRE Group Ltd. (PXT) said based on estimated industry losses of $35 billion to $40 billion from Hurricane Katrina-related damage, it expects the impact on its business to be $235 million to $300 million, after taxes, reinsurance and additional premiums. "Based on this updated preliminary estimate, the Company now expects to report a net loss of $85 to $165 million for 2005, assuming no additional material catastrophes occur during the rest of 2005," the company said Monday in a press release.

[UpInArms]

15. Mississippi jobless claims post Katrina hit 35,000

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-09-18T201830Z_01_N18243863_RTRIDST_0_KATRINA-JOBLESS-CORRECTED.XML

GULFPORT, Miss., Sept 18 (Reuters)- Mississippians are filing well more than 1,000 jobless claims a day in the wake of Hurricane Katrina, and that rate is expected to accelerate over the coming days, officials said Sunday.

As of Friday, Mississippi had received 35,000 claims for unemployment since Katrina hit Aug. 29. The storm killed more than 200 in Mississippi and wiped out or seriously damaged more than 100,000 homes and businesses along a string of the state's Gulf Coast communities.

"There is such shock ... some people are just now seeking assistance," said Stan McMorris, a Mississippi Department of Employment Security deputy director. "I look for our numbers to increase tremendously over the next week."

The state's jobless rate was 5.5 percent before the hurricane struck.

The state projects it will be hit with 300,000 jobless claims related to Katrina, with each eligible person paid $210 a week for six months.

"This is taxing all our resources," McMorris said. "This is over and above anything we've ever seen."

...more...

[ozymandius]

17. pre-open blather

:00AM: S&P futures vs fair value: -1.8. Nasdaq futures vs fair value: -2.5. As futures still trade below fair value, the stage remains set for the cash market's lower open, ... With crude on the rise, as Tropical Storm Rita raises concerns about supply disruptions, and potential earnings warnings on the horizon, coupled with no Monday mergers to speak of and no economic data to occupy the spotlight before tomorrow's FOMC meeting temporarily settles the rate debate, traders retain an early air of caution.

8:30AM: S&P futures vs fair value: -2.5. Nasdaq futures vs fair value: -3.0. Futures trading holds steady and continues to indicate a lower open for the cash market. The absence of economic data to set a more definitive tone to trading may be contributing to an overall sense of apprehension ahead of the Fed's first meeting since Hurricane Katrina. On a positive note, Nike (NKE 83.00 +4.54) has handily beaten analysts' Q1 (Aug) expectations by $0.19, keeping the Consumer Discretionary sector in focus; however, NKE's 6.0% surge will be challenged by a Bear Stearns downgrade on EBAY and rising gas prices ($1.84/gal +$0.549)

8:00AM: S&P futures vs fair value: -3.0. Nasdaq futures vs fair value: -4.0. The cash market is poised for a lower start, as traders lock some profits following Friday's rally and possess a wait-and-see stance ahead of tomorrow's interest rate decision at the FOMC meeting ... In addition, a nearly 2.0% surge in the price of crude (+$1.17 $64.17/bbl) may also be weighing on early sentiment.

[ozymandius]

19. Stocks Set to Open Down Ahead of Rate News

NEW YORK - U.S. stock futures are trading lower Monday, reversing gains made Friday on Wall Street. Trading is seen subdued with no economic news scheduled and investors focused on Tuesday's interest-rate decision by the Federal Reserve.

Dow Jones futures were recently down 8 points, while Nasdaq futures were off 1 point and S&P futures were down 0.60 point.

In Japan, markets are closed for a national holiday.

In London, the FTSE 100 index was recently up 0.25 percent at 5,421.6, after breaking above the 5,400 mark on Friday for the first time in four years.

more

[ozymandius]

21. Fathoming the Fed's Next Moves

Ever since Hurricane Katrina tore through the Gulf region three weeks ago, financial markets have been fixated on a single question about the Federal Reserve. Will the destruction prompt Fed policymakers to pause in their 16-month-old campaign of interest rate hikes?

With Fed Chairman Alan Greenspan and his central bank colleagues due to meet Tuesday, Sept. 20, to map monetary strategy, a growing number of analysts expect the rate-setting Federal Open Market Committee to plow ahead with another quarter percentage point rate increase in the Fed funds rate, to 3.75%. Included in that group: former Fed Governor Laurence Meyer, Goldman Sachs (NYSE:GS - News) Chief Economist Bill Dudley, and Merrill Lynch (NYSE:MER - News) Chief Economist David Rosenberg, each of whom had previously expected the Fed to take a break from raising rates.

-cut-

Here are some things to watch for:

Description of the Economy: Given the havoc wrought by Katrina, a major rewrite of this section of the Fed's statement is likely. Fed officials reckon that the economy can weather the hurricane's hit without tumbling into a recession. But they admit that the storm will cut into second-half growth, perhaps slowing it by a half to three-quarters of a percentage point. Economic growth through next year should be stronger, thanks to the tens of billions of dollars that the federal government will spend on reconstruction.

The inflation outlook is also murky. The steep rise in gasoline and other energy prices in the wake of Katrina will sharply boost inflation in the short run. But whether that proves transitory or results in a permanently higher level of inflation depends on a host of factors, including the stance of monetary policy, the amount of slack in the economy, and how consumers and companies respond to the energy shock.

more

[UpInArms]

25. 9:39 EST LaLa opens in the red

Dow 10,610.10 -31.84 (-0.30%)
Nasdaq 2,157.77 -2.58 (-0.12%)
S&P 500 1,235.59 -2.32 (-0.19%)
10-Yr Bond 4.20 +0.08 (+0.19%)

NYSE Volume 109,850,000
Nasdaq Volume 102,622,000

[ozymandius]

26. redder still

9:44Dow 10,607.39 -34.55 (-0.32%)
Nasdaq 2,156.93 -3.42 (-0.16%)
S&P 500 1,234.70 -3.21 (-0.26%)
10-Yr Bond 42.73 +0.11 (+0.26%)
NYSE Volume 142,296,000
Nasdaq Volume 127,888,000

[UpInArms]

20. U.S. asbestos fund would quickly go broke -- study

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-09-19T040150Z_01_N18267698_RTRIDST_0_CONGRESS-ASBESTOS.XML

WASHINGTON, Sept 19 (Reuters) - A $140 billion asbestos compensation fund being considered in the U.S. Senate would be swamped by more than double that amount in claims and go broke within three years, according to a study released on Monday.

The proposed fund would face claims of between $301 billion and $561 billion, as people with lung and other cancers, who historically had not been compensated by asbestos lawsuits, file for their new entitlements, the study said.

The analysis was done by Bates White, a Washington D.C. economic consulting firm, at the request of the American Legislative Exchange Council (ALEC), an association of conservative state lawmakers.

Asbestos fibers have been used in building materials, auto parts and other products for decades, but are linked to cancer and other diseases. Hundreds of thousands of injury claims have pushed many companies into bankruptcy.

Pennsylvania Republican Sen. Arlen Specter and Vermont Democrat Sen. Patrick Leahy are sponsoring a bill to take asbestos injury claims out of the courts and pay them from a fund financed by asbestos defendant companies and insurers.

...more...

a bit of info:

Halliburton Pays Dearly but Finally Escapes Cheney's Asbestos Mess

http://www.washingtonpost.com/wp-dyn/articles/A64535-2005Jan10.html

It's time for yet another Halliburton story -- but not the one you may be expecting. This isn't about the endlessly scrutinized Iraq contracting business of the big energy services company that Dick Cheney ran before he became vice president. And it's not about Halliburton's profit-boosting accounting change during Cheney's regime, or the scandals and problems currently affecting some of the firm's far-flung projects.

Instead, let's talk about Halliburton's well-executed $5 billion escape from its asbestos problems, most of which Cheney created when he orchestrated Halliburton's purchase of Dresser Industries in 1998. Few people connect this problem with Cheney, but they should, given that he was in charge at the time and got a raise as a result of buying Dresser.

Dresser's asbestos problem was only a potential one when Halliburton bought it, but rapidly metastasized into a threat to Halliburton's existence. By then, though, Cheney had gone off to Washington.

Had he still been Halliburton's chief executive, Wall Street might have forced him to take responsibility for the asbestos problem he imported to his company. But because he wasn't around -- and because his successor, Dave Lesar, was a stand-up guy -- Cheney has largely escaped scrutiny for this fiasco.

Now that Halliburton has managed to extract itself from its asbestos liability by paying a ton of cash and stock to trusts that will compensate victims and their lawyers, we can get a handle on how much Dresser's piece of the problem cost Halliburton. It turns out to be almost as much as Halliburton paid for the company.

...more...

[ozymandius]

22. Pardon me while I state the obvious angle here.

Who does not think hat the asbestos fund is not intended to go broke? When has anything crafted by Republicans not been promoted by "doing it on the cheap"?

[UpInArms]

28. off-topic post: History being removed from many schools curriculum

http://www.indystar.com/apps/pbcs.dll/article?AID=/20050917/NEWS06/50917001

excerpt:

But because of President Bush's No Child Left Behind law, which imposes sanctions on schools where students fail to make annual progress on reading and math tests, many schools are reducing the time spent on history, or eliminating it altogether, Passe said.

David McCullough, the historian, also faulted President Bush's law in testimony before a Senate Committee in June.

"Because of No Child Left Behind, sadly, history is being put on the back burner or taken off the stove altogether in many or most schools, in favor of math and reading," McCullough said.

...more...

Oh.My.God

[Ishoutandscream2]

36. Yes, school counselor from Texas here

I check up on you guys daily here because I am a total fool concerning money. I get some great info here.

As you know, NCLB is based on the Texas model of test, test, test. You would not believe how much instructional time is taken away by the number of "benchmark" tests which are given (usually in math and reading).

This year, our nine weeks assessments are TAKS based science and math. We are really hitting those two areas hard at the expense of some subjects such as World Geography and English (the literature based classes). We test these poor kids constantly; my daughter is in 4th grade and they are alway doing TAKS based work in class. Rose, I'm afraid, won't have the ability to critically think. All she seems to do is learn how to take tests.

When the real TAKS tests come in the spring, I am the campus coordinator for my ninth grade center school. And the security for it, MY GOD! Any breach in security could land me and my principal without our licenses, or worse, THROWN IN JAIL. Even our teachers have to read and sign an oath. It is beyond ridiculous.

NCLB is going to be a joke. Your students will become like ours - a bunch of robots who know more about test taking strategies than becoming well rounded students. I fear for our country. Accountability through testing is truly out of control.

[loudsue]

38. Thanks for posting, Ishoutandscream2...

What is being done to dumb-down our school children is down right embarrassing.

It seems the republicans really WANT students to be dumb...especially about history and civics. It allows the republicans to get away with so much of what they intend for this country.

They don't WANT people to know the history of the United States! One big reason is that republicans fully intend for there to be a whole new country on this soil before they're done with us...one that allows only slaves and rich people. And the rich certainly don't want any slaves with knowledge about what our country formerly stood for, or slaves seeking any kind of "rights".

Rich people HATE being held in check by the unwashed masses.

:kick::kick::kick:

[UpInArms]

39. Hiya Ishoutandscream2!

Glad to have you "drop in" and add your knowledge and insight to the SMW.

In my humble view, it does appear that this nasty mal-administration is hellbent on destroying every shred of this country, from the educational system, business sector, manufacturing, infrastructure and the true system of government.

I, too, fear for my country.

[Ishoutandscream2]

48. Thanks to all of you, too.

I've seen many good teachers throw up their hands concerning the sheer monotony of teaching to a test. I hate to be a negative person, but I do see this first hand and have been dealing with this "accountability" thing for nearly 15 years (both as a teacher and counselor).

It seems the only ones who benefit are the test makers. You should see how many materials I have to handle during a year. A tip to you guys - invest in companies who produce criterion referenced tests to the state of Texas. Wish I knew all their names, but I'm sure I could find out.

[Roland99]

50. Oh, just follow the BFEE and we'll find out who they all are.

BTW, my sister teaches exceptional needs children and she's just amazed at how these kids are supposed to be tested on the same level as other children.

[girl gone mad]

112. Those tests are one of the reasons I homeschool.

My son always had fantastic teachers, but too often they just weren't allowed to teach.

I know the long term results of those tests, because I tutored high school and college students who couldn't figure out how to solve problems unless they were taught the exact method to use. Creativity is being stifled, and creativity is one of the most important tools in math and science. Much more useful than rote memorization, if you ask me.

Another problem I would see with my high school and college studets is that they seemed aimless. They hadn't been given the opportunity to to develop their own interests. Who can stay interested in math, science and literature when the focus is on taking tests?

[54anickel]

64. More of that corporate mentality - you only need skills and knowledge

that can be used to claw your way into middle management. :eyes:

Knowledge of History, Civics and Social Studies might lead to inquiring minds and all that. Can't have people questioning the Master Plan now, can we?

[UpInArms]

31. US Treasuries rise in quiet trade a day before Fed

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-09-19T135553Z_01_N19339459_RTRIDST_0_MARKETS-BONDS.XML

NEW YORK, Sept 19 (Reuters) - U.S. Treasury debt prices rose on Monday in subdued trade as the market waited for the Federal Reserve's likely interest increase on Tuesday and its view on the post-Hurricane Katrina economy.

With no major U.S. economic data scheduled for Monday, traders said they expected limited activity because of Fed-related uncertainty, particularly regarding any change the U.S. central bank may make to the statement that accompanies its rate decision.

"I think everyone is trying to figure out the language," said one trader, adding that he, like most of the bond market, now expects a quarter-percentage-point hike from the Fed, even though Hurricane Katrina has clouded the economic outlook.

Traders said Monday's upside movement began during European trading in the wake of Germany's unclear election result.

Investors initially dumped euro zone stocks and sought the safe-haven of the region's bonds, allowing Treasuries to benefit marginally as well -- especially with U.S. debt entering a holding pattern ahead of the Fed rate decision.

...more...

[UpInArms]

44. What the Fed is considering Tuesday

http://www.washingtonpost.com/wp-dyn/content/article/2005/09/19/AR2005091900523.html

excerpt:

* Fed officials have said that monetary policy is a blunt instrument for responding to a regional natural disaster such as Hurricane Katrina, where fiscal spending can be better targeted. But they will be carefully watching energy prices, which spiked after the storm and have since eased from their peaks, for further inflationary pressure.

* The first readings on post-Katrina economic activity point to a slump in factory activity in the Philadelphia and New York Fed regions. At the same time, costs nearly doubled. fanning inflation fears. The Philadelphia Fed's index dived to 2.2 in September from 17.5.

* Consumer confidence plummeted to a 13-year low in early September, battered by Katrina, according to the University of Michigan's index, which fell to 76.9 in September from 89.1. Economists do not expected a corresponding dive in consumer spending.

* Employment growth has been steady in recent months, with 169,000 jobs added to nonfarm payrolls in August, but there is expected to be a heavy toll on jobs measured in the September report.

* Consumer price increases have accelerated, largely on the back of energy costs, although core prices remain tame. In August, the CPI rose 0.5 percent while the core showed a meek 0.1 percent rise. The bigger worry is the outlook.

...more...

[UpInArms]

45. Consumer confidence plummeted to a 13-year low

hmmmm....

did a bit of math on that one:

2005 - 13 = 1992

and just who was at the helm then?

Why, it was G. H. W. Bush!

the one that spawned the current POS in the WH.

[Roland99]

51. Yippee!

[UpInArms]

53. I got to see some of that consumer confidence

up close and in person this weekend - from Minneapolis to Des Moines - my costs were triple and my income cut in half.

[Roland99]

56. I went to a big mall in Cincinnati over the weekend...not that crowded.

And fall clothes are already 30-40% off.

[RawMaterials]

59. In town for the bengals, or Oktoberfest or both

:hi:

[Roland99]

73. Neither. Just headed up I-71 to visit a friend and his family.

But, I see the Bungles are 2-0! Wow!


;)

[RawMaterials]

86. I know isn't that one of the signs

that the world is ending :evilgrin:

[WhiteTara]

94. Yikes That's not what we want to hear!

What kind of buyers did you have? Or were there no people or just lookers? Inquiring minds want to know

[UpInArms]

96. Minneapolis could have been a number of things

but Des Moines was definitely depressed - no people - and those that did come out (lovely weather) had very little joy and no interest in spending any money.

[WhiteTara]

99. sorry about all that. Glad to see you

on the board today though. :hi:

[UpInArms]

57. Check-Kiting Continues: US Treasury to sell $8 bln 4-week bills Tuesday

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-09-19T150220Z_01_WAT003931_RTRIDST_0_ECONOMY-BILLS-ANNOUNCEMENT-URGENT.XML

WASHINGTON, Sept 19 (Reuters) - The U.S. Treasury Department said on Monday it will sell $8.00 billion of four-week bills on Tuesday, Sept. 20.

The bills will be issued on Sept. 22.

Proceeds from the sale will be used to refund approximately $16.00 billion of publicly held bills maturing on Sept. 22 and to pay down approximately $8.00 billion.

The four-week bills announced on Monday mature Oct. 20. Treasury said the net long position reporting threshold is $2.80 billion.

Noncompetitive bids must be received by noon EDT (1600 GMT) and competitive bids by 1:00 p.m. EDT (1700 GMT).

...a bit more...

So how can proceeds from a sale of $8 billion refund "approximately $16 billion and pay down "approximately $8 billion"?

Funny Fuzzy Math :crazy:

[UpInArms]

81. U.S. to issue short-term debt for Katrina-Merrill

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-09-19T164800Z_01_N19289222_RTRIDST_0_FINANCIAL-TREASURIES-MERRILL.XML

NEW YORK, Sept 19 (Reuters) - The U.S. Treasury Department
will likely issue more short-term debt to pay for the
rebuilding of the U.S. Gulf regions devastated by Hurricane
Katrina, according to Merrill Lynch analysts.


They predicted a rise in debt issuance of bills and debt
with maturities ranging up to five years.


The Treasury will rely more on short-term borrowing to fund
what is expected to be at least $200 billion in expenditures
for Katrina-related efforts because the costs are seen as
one-time outlays, the analysts wrote in a report released on
Monday.


In addition to $115 billion in net borrowing needs for
fiscal 2006, which includes expenditures for Katrina, the
Treasury has a $34 billion increase in maturing coupon debt,
they said.


Moreover, the Treasury planned to reintroduce the 30-year
bond next year.


An increase in short-term issuance will likely depress the
initial annual amount of long bond supply, which has been
estimated in a range of $20 billion to $30 billion for 2006.

...more...

[UpInArms]

106. Treasurys close with broad gains ahead of Fed meeting

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38614.6426764236-842849341&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

CHICAGO (MarketWatch) -- The benchmark 10-year Treasury note finished U.S. trading 1/4 higher, or up $2.50 per each $1,000 in securities at face value, at 100 1/32. The yield ($TNX) fell to 4.24% vs. 4.27%. Price gains snapped a string of three losing days, with gains Monday seen partly as consolidation ahead of a Federal Reserve meeting largely expected, but not certain, to end with a quarter-point increase in interest rates. Such a move is seen confirming the Fed's inflation vigilance even in the wake of Hurricane Katrina.

[ozymandius]

32. 10:04 numbers

Dow 10,598.16 -43.78 (-0.41%)
Nasdaq 2,155.04 -5.31 (-0.25%)
S&P 500 1,235.05 -2.86 (-0.23%)
10-Yr Bond 42.66 +0.04 (+0.09%)
NYSE Volume 297,175,000
Nasdaq Volume 249,084,000

[ozymandius]

33. blather

9:40AM: As futures indications had presaged, the stock market opens on the downside. With a dearth of economic and corporate news to occupy traders' focus, crude's uptick - as more storms threaten the Gulf coast and as OPEC may not increase output as had been previously speculated - has weighed on early sentiment as has some uncertainty related to the Fed's first FOMC meeting since Hurricane Katrina struck...

[ozymandius]

37. Markets make like a stone.

10:12
Dow 10,584.78 -57.16 (-0.54%)
Nasdaq 2,151.67 -8.68 (-0.40%)
S&P 500 1,232.95 -4.96 (-0.40%)
10-Yr Bond 42.70 +0.08 (+0.19%)
NYSE Volume 349,350,000
Nasdaq Volume 291,414,000

10:00AM: Major indices are still on the defensive as the bulk of sector leadership remains negative... Four of last Friday's biggest winners - Financial, Industrials, Health Care and Telecom Services - have succumbed to the most consolidation...Energy (+1.8%), however, has surpassed Friday's 1.2% surge, moving parallel with the uptick in crude and leading the session in the early going... Utilities (+0.2%), meanwhile, stands as the only sectors on positive turf...

Despite the upswing in the benchmark 10-year note, which currently yields 4.27% ahead of tomorrow's FOMC meeting, the dividend-yielding Utilities sector attracts some early buyers due largely to Citigroup's upgrade of Dominion (D 84.06 +1.46) to Buy from Hold, and the stock's subsequent 1.8% rise...NYSE Adv/Dec 1097/1478, Nasdaq Adv/Dec 1020/1442

[Roland99]

40. It'll turn into pumice before too long.

[UpInArms]

43. 10:40 EST bounce arrives with "helpful" upgrades

Dow 10,592.50 -49.44 (-0.46%)
Nasdaq 2,152.59 -7.76 (-0.36%)
S&P 500 1,234.03 -3.88 (-0.31%)
10-Yr Bond 4.259 -0.03 (-0.07%)

NYSE Volume 516,641,000
Nasdaq Volume 436,729,000

10:30AM: Market extends its reach below the flat line as sellers remain in control of the early action... While Financial (-0.8%), which accounts for about 20% of the weighting on the S&P, remains the most influential sector to the downside with only five of 84 components in the green, continued weakness in Technology (-0.5%), especially in the semiconductor group (-1.1%), has been the bigger catalyst behind the overall market's recent pullback...

Teradyne (TER 15.53 -0.75) and Advanced Micro Devices (AMD 21.97 -0.68) remain the biggest laggards among the chip stocks while AMAT, FSL.B, KLAC, MU, NVLS and XLNX have also chalked losses of more than 1.0%... NYSE Adv/Dec 1039/1827, Nasdaq Adv/Dec 1000/1611

from the CBSMarketwatch ticker:

10:38am 09/19/05 AG EDWARDS LIFTS GASCO ENERGY PRICE TARGET TO $8

10:39am 09/19/05 AG EDWARDS LIFTS DENBURY RESOURCES PRICE TARGET TO $60

10:37am 09/19/05 AG EDWARDS LIFTS ULTRA PETROLEUM PRICE TARGET TO $57

10:38am 09/19/05 AG EDWARDS LIFTS WESTERN GAS PRICE TARGET TO $59

10:36am 09/19/05 AG EDWARDS LIFTS QUICKSILVER RESOURCES PRICE TARGET TO $75

10:37am 09/19/05 AG EDWARDS LIFTS HOUSTON EXPLORATION PRICE TARGET TO $78

[UpInArms]

46. Most real estate investors bearish on outlook-survey

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-09-19T145130Z_01_N16492215_RTRIDST_0_PROPERTY-SURVEY.XML

NEW YORK, Sept 19 (Reuters) - A slight majority of real estate investors, 53 percent, described themselves as bearish about opportunities in the next 12 months, according to a survey of industry executives and investors.

But 44 percent said they were bullish about the future and 42 percent said their outlook rested on the U.S. economy and job growth, according to the 2005 DLA Piper Rudnick Gray Cary real estate survey.

Slightly more than 10 percent of those who received the survey responded. The survey was distributed at the end of August before Hurricane Katrina ravaged the U.S. Gulf Coast.

<snip>

About 71 percent of those who responded said they believe the U.S. commercial real estate investment market will flatten out, while about 27 percent said it would continue to boom.

Some 30 percent of the 258 respondents said downtown office property would be the weakest investment in the next 12 months, while 36 percent said the apartment sector would be the most attractive.

"In several markets, we have witnessed a return to 'spec' development, not in response to increasing demand, but to meet the investment needs of capital sources, resulting in a concern on the supply side," a respondent wrote.

...more...

[ozymandius]

47. 11:04

Dow 10,573.00 -68.94 (-0.65%)
Nasdaq 2,149.22 -11.13 (-0.52%)
S&P 500 1,232.34 -5.57 (-0.45%)
10-Yr Bond 42.54 -0.08 (-0.19%)
NYSE Volume 636,671,000
Nasdaq Volume 540,368,000

[ozymandius]

49. blather

11:00AM: The market's majors hold steady while nine of ten economic sectors remain in the red... Healthcare, the S&P's third weightiest sector, has lost 0.8% and effectively erased Friday's gain... The sector is almost completely underwater, led lower by a 1.8% decline in Abbott Labs (ABT 42.96 -0.78), Merck's (MRK 28.53 -0.37) 1.1% slide, and substantial dips in both Pfizer (PFE 25.55 -0.35) and Johnson & Johnson (JNJ 64.61 -0.57)...
Amgen (AMGN 85.86 +1.00), meanwhile, continues to benefit from an analyst upgrade that hit last Thursday's wires, and has helped minimize the sector's decline today as one of Healthcare's sole bright spots...NYSE Adv/Dec 1031/1906, Nasdaq Adv/Dec 1074/1627

[UpInArms]

54. Congressmen seek improved mutual fund oversight

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38614.470665706-842828175&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

BOSTON (MarketWatch) - A Government Accountability Office report released Monday said the Securities and Exchange Commission needs to improve oversight of the mutual fund industry, the Congressmen who released it said. The report raises concerns about the adequacy of the SEC's inspections of both mutual funds and sales of mutual funds by broker-dealers. In releasing the report, Congressmen Paul Kanjorski, (D-Pa.), and Barney Frank, (D-Ma.), called on the SEC to improve its oversight. "State regulators, rather than the experts at the SEC, were the first to uncover abuses in the mutual fund industry in 2003. The SEC has fortunately taken important actions since then to better protect investors," Kanjorski said in a statement. "This GAO report, however, confirms my long-held suspicions: more can be done and more should be done to protect American investors, especially when nearly half of all U.S. households now own mutual funds."

[UpInArms]

55. 11:40 EST taking a dive

Dow 10,560.90 -81.04 (-0.76%)
Nasdaq 2,144.76 -15.59 (-0.72%)
S&P 500 1,231.05 -6.86 (-0.55%)
10-Yr Bond 4.239 -0.23 (-0.54%)

NYSE Volume 805,260,000
Nasdaq Volume 681,151,000

11:30AM: The indices continue to languish near session lows as selling remains widespread across most areas... Bonds, however, continue to trade near their best levels of the morning, climbing for the first time in four sessions as fed funds futures now show a 90% chance that the Fed will raise rates for an 11th consecutive time by 25 basis points (to 3.75%) tomorrow afternoon... The yield on the 10-year note (+7/32), which had risen to 4.26% from under 4% as recently as Sept. 1, has fallen to 4.24% as the Fed's next tightening becomes a bit clearer...NYSE Adv/Dec 1060/1955, Nasdaq Adv/Dec 1043/1732

[ozymandius]

61. 12:06 - Friday's gains erased

Dow 10,555.56 -86.38 (-0.81%)
Nasdaq 2,144.27 -16.08 (-0.74%)
S&P 500 1,230.57 -7.34 (-0.59%)
10-Yr Bond 42.46 -0.16 (-0.38%)
NYSE Volume 911,897,000
Nasdaq Volume 760,292,000

[UpInArms]

62. blather

12:00PM: The stock market hits fresh session lows as it heads into the lunch hour, leaving nine of ten sectors underwater...

Soaring oil prices and an impending rate hike decision at tomorrow's FOMC meeting, coupled with a dearth of data on both the corporate and economic fronts, has prompted widespread consolidation following Friday's rally. Prices across the energy complex opened higher, but crude oil prices ($66.55/bbl +$3.65) has staged a 5.3% surge midday amid reports that Tropical Storm Rita, which is now forecast to be a level three hurricane, at minimum, could disrupt refineries along the Gulf coast. The fact that OPEC may not increase output as had been previously speculated has also prompted renewed buying interest in oil...

With respect to the ten economic sectors, a lack of leadership aside from the surging Energy sector (+2.5%) persists. Four of Friday's biggest gainers - Financial, Industrials, Health Care and Telecom Services - have been profit-taking targets and have effectively erased Friday's gains. Financials, which occupy over 20% of the S&P, have lost 0.8% today while Tech, comprising 15% of the broad market, has slid 0.9%. Declines in both sectors are broad and bellwethers within each remain in the red...

Declines of 1.1% in American Express (AXP 58.91 -0.55) and AIG (AIG 60.52 -0.78), coupled with JP Morgan's (JPM 34.64 -0.35) 0.9% fall and a 0.9% tumble in Intel (INTC 24.59 -0.22) continue to weigh on the Dow. To that end, semiconductors are down 1.5% today, the heaviest drag on the Tech sector. The hardware group, however, off just 0.2%, has been supported somewhat by relative strength in Hewlett-Packard (HPQ 28.80 +0.46) trending positive as investors cheer its latest acquisitions. Healthcare, the S&P's third heaviest sector, has lost 0.9% and has similarly taken back Friday's gains, amid weakness in drug, biotech and HMOs... The Industrial's sector sports the worst intraday loss, off 1.4% on across-the-board consolidation efforts...

Despite better than expected Q1 (Aug) earnings from Nike (NKE 83.51 +5.05) and a strong Q3 report from Carnival Corp (CCL 50.86 +1.83), soaring oil prices, a Bear Stearns downgrade on eBay (EBAY 36.50 -0.60), Canadian autoworker strike concerns at General Motors (GM 31.60 -0.88) and disappointing Q4 (Oct) guidance from Apollo Group (APOL 69.31 -4.46) have kept the Consumer Discretionary sector underwater...Treasuries, meanwhile, continue to stage somewhat of a recovery effort - climbing for the first time in four sessions as fed funds futures now show a 90% chance that the Fed will raise rates again (to 3.75%) tomorrow afternoon... The yield on the 10-year note (+7/32) has now fallen to 4.24%, as the Fed's next tightening becomes a bit clearer, but remains well above the 4.0% mark enjoyed on Sept. 1...DJTA +0.96, DJUA +0.22, DOT -0.89, Nasdaq 100 -0.98, Russell 2000 -0.52, SOX +1.44, S&P Midcap 400 -0.54, XOI +2.47, NYSE Adv/Dec 1018/2052, Nasdaq Adv/Dec 1016/1818

[UpInArms]

60. Fraud in the *Co Admin: FEMA Rife With Fraud, Study Finds

http://www.theledger.com/apps/pbcs.dll/article?AID=/20050918/NEWS/509180416/1004

FORT LAUDERDALE -- The federal government's mishandling of the Hurricane Katrina catastrophe is only the latest bungling in a national disaster response system that for years has been fraught with waste and fraud.

A South Florida Sun-Sentinel investigation has found that the Federal Emergency Management Agency in five years poured at least $330 million into communities that were spared the devastating effects of fires, hurricanes, floods and tornadoes.

In the country's poorest, innercity neighborhoods, disaster assistance is considered an entitlement. Taxpayer money meant to help victims recover from catastrophes instead has gone to thousands of people who suffered little or no damage, including:

<snipping list>

But last year's debacle wasn't the first for FEMA in Miami-Dade. In March 2003, a tornado destroyed two dozen homes in the Liberty City area but barely caused enough damage to qualify for federal aid, emergency management records show.

When the county received a federal disaster declaration about a month later, a mayor's aide wrote a congratulatory e-mail to a colleague: "Hundreds of people most in need are going to benefit."

Those hundreds turned into 6,651. Of the $14.5 million approved by the Federal Emergency Management Agency, $9 million went to residents up to 37 miles from the reported damage.

...more...

[54anickel]

66. What about that recent article regarding the 9-11 spending going to

businesses that weren't really effected at all? It was just some freakin' give-away then too. It ain't just FEMA getting "scammed". And are you really being "scammed" if you're promoting and participating in the "scamming"?

This article seems to blame the poor for playing the system, with no responsibility to FEMA for running the game. And there's no mention of the corporate raiding and fraud that takes place on a much grander scale.

I think this article is a bit of a set-up to tighten up money for individuals, while the tap to corporations involved in the rebuilding will be held wide open. JMHO, I'll have to wait and see.

[UpInArms]

67. I agree 54anickel - it does seem like a "set up"

type article - without holding accountable those that are cutting the checks -

It is as if they are saying: Gee, how would I know how to understand 37 miles away from an affected area :eyes:

[54anickel]

71. Pathetic attempt to paint a gubbermint branch as the victim. Yeah, like

THAT'S gonna fly...

Another conservative talking point being served up - big gov't is part of the problem, not the solution, blah, blah, blah. They've been trying to kill off FEMA since the usurper moved into the WH.

[54anickel]

68. Borrowing Short & Lending Short

Last entry in the Credit Bubble Bulletin - check out the charts from the beginning of this weeks bulletin though!

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

I will be the first to note the irony of Lehman Brothers reporting a 74% surge to record earnings the same day that Delta and Northwest Airlines file for bankruptcy. It certainly provided a rather salient example of the widening divide between the winners and losers of the Wall Street finance-led inflationary boom.

Lehman Brothers, a Credit-creating juggernaut these days firing on all cylinders, reported a rather remarkable quarter. Net Income ballooned to $879 million, with Total Revenues up 71% to $8.639 billion. Principle Transaction Revenues were up 71% to $2.085 billion. Investment Banking Revenues were up 55% to a record $815 million. Commissions were up 21% to $420 million. Asset Management Revenues were up 26% to a record $241 million. But the really astonishing number is the $5.078 billion of Interest & Dividends – for the quarter! Interest & Dividends were up 83% from the year earlier period, with Interest Expense up 97% to $4.787 billion. Lehman enjoyed record debt underwriting; record CMBS originations; a record $44 billion of real estate securitizations; and equity underwriting up 90%. Compensation & Benefits were up 46% to $1.906 billion. The company repurchased 9.3 million shares of stock during the quarter. Total Assets expanded at an 11.2% pace during the quarter to $381 billion. Total Assets were up 11.8% over the past year and 43.7% over three years. With Total Stockholders’ Equity of $16.3 billion, the company’s “Gross Leverage Ratio” stands at 23.3.

snip>

I should be at the point where I am not surprised by anything. I will admit, however, that I am a little struck by the notion of a Wall Street balance sheet of almost $400 billion “turn over several times a day.” Clearly, the brokerage business has evolved profoundly over the past few years, feeding and being well-fed by the booming global leveraged speculating community. Lehman’s largest Asset as of May 31 was “Collateralized Agreements” ($175bn) and its largest Liability was “Collateralized Financing” ($174bn).

snip>

As I have noted many times previously, The Moneyness of Credit – the capacity for creating Credit instruments with the perceived attributes of safety, stores of nominal value, and near-absolute liquidity – is an invaluable analytical tool, as we grasp for clearer understanding of the current peculiar inflationary boom. The “Moneyness” dynamic is especially precarious with regard to Wall Street finance. The greater the inflation of issuance, the seemingly more stable the underlying (inflated) collateral values, the more abundant general marketplace liquidity, and the more ingrained the market’s perception of the safety, soundness and liquidity of “structured finance.”

more...

[TrogL]

72. Is the greenback taking a nosedive?

No time to do a Loonie Watch today, sorry. Maybe later.

[54anickel]

74. Asymmetrical Risks of Global Rebalancing (Roach)

http://www.morganstanley.com/GEFdata/digests/20050916-fri.html#anchor2

The disparity between current account deficits and surpluses is now closing in on a record 5% of world GDP. Behind this imbalance lurks an important and potentially dangerous asymmetry: Deficits are heavily concentrated in one economy whereas surpluses are spread out widely over a large number of nations. This mismatch could well exert a very destabilizing influence on the coming rebalancing of the global economy.

The numbers speak for themselves: As can be seen in the accompanying chart, the deficit side of the global current-account equation is heavily dominated by the United States. By our reckoning, America’s record current-account shortfall should account for about 70% of the total deficit positions in the global economy in 2005. By contrast, the incidence of surpluses is far more diffused: It takes some 10 economies to account for 70% of the total global current-account surplus in 2005. While our estimates suggest that Germany and Japan should collectively account for nearly 30% of the world’s total current-account surpluses this year, the remainder of the global surplus is widely distributed into a broad cross-section of countries around the world. The “second tier” of surplus economies includes five countries that collectively account for another 33% of the total current-account surpluses in the world -- Russia (8.7%), Saudi Arabia (8.0%), China (7.8%), Norway (4.7%), and Switzerland (4.4%). The balance of the surpluses is spread out widely. Indeed, it takes another 11 economies to account for the next 25% of the world’s overall current account surpluses in 2005. (Note: Recently, we published an estimate that Japan and Germany should collectively account for 56% of the world’s total current account surplus in 2005; see my 9 September dispatch, The Shoestring Economy. That estimate was based on a much smaller sample of surplus economies that overstated the positions of Japan and Germany. The 30% figure cited above is derived from an IMF database that contains a much broader universe of some 179 economies. Apologies for any confusion).

snip>

There are no guarantees that there will be a synchronous rebalancing in the mix of global saving -- that a US saving increase will be accompanied by declining saving rates elsewhere in the world. To the contrary, there is good reason to fear a further widening of the disparity in global saving and current account positions over the next couple of years. While there is a growing and welcome possibility of some saving reduction in the major surplus economies, that constructive trend could well be more than offset by a sharp deterioration on the US saving front.

America’s national saving outlook is in the process of going from bad to worse. Deterioration is likely in all three major components of domestic saving -- for households, the government sector, and for businesses. American consumers were already running a negative personal saving rate before the energy shock intensified; to the extent that households now attempt to defend their lifestyles in the face of energy-related shortfalls of disposable income, the personal saving rate should move deeper into negative territory. At the same time, Katrina-related recovery and reconstruction costs could add at least one percentage point to the Federal budget deficit in 2006. And the business sector saving cushion seems likely to diminish as the combination of rising energy prices and mounting unit labor costs puts a dent in corporate profit margins. As a result, America’s net national saving rate -- which has averaged a record low of 1.5% of GDP since early 2002 -- could well threaten to pierce the “zero” threshold at some point over the next year. Consequently, it appears quite likely that the world’s dominant current-account deficit economy -- the saving-short US -- is about to put an even larger claim on the world’s pool of surplus saving.

snip>

This is where the asymmetries in the mix of global saving have the clear potential to become a serious problem. If the world’s dominant deficit economy -- the United States -- goes even deeper into deficit at the same time the world’s surplus economies start to absorb their domestic saving, America’s ever-mounting external financing pressures are likely to be vented in world financial markets. This, of course, is the stuff of a classic current-account adjustment -- the case for a weaker dollar and higher US interest rates. As long as the non-US world was in an excess saving position, a major re-pricing of dollar-denominated assets could be avoided. But now, with an asymmetrical shift in the mix of global saving increasingly likely, it could well become all the tougher for the United States to avoid this treacherous endgame.

more...

[JNelson6563]

75. 1:28 update

Dow 10,558.27 -83.67 (-0.79%)
Nasdaq 2,145.45 -14.90 (-0.69%)
S&P 500 1,231.09 -6.82 (-0.55%)
10-Yr Bond 4.243% -0.02


Well this is getting pretty ugly. Seems investors are waking up. But my oh my, look at gold go! ;-)

Julie

[54anickel]

76. Scrushy Campaigns for His Old Job

http://www.cfo.com/article.cfm/4419038/c_4419271?f=home_todayinfinance

HealthSouth's former CEO and chairman wants to help the company recover from its $2.7 billion accounting scandal, yet in court he admitted to having no knowledge of the company's financial workings.

Stephen Taub, CFO.com
September 19, 2005

The former chief executive of HealthSouth Corp., whose acquittal of charges related to the health care provider’s $2.7 billion accounting scandal stunned many observers, now wants to play a key role in the company's recovery. "I have the numbers, clean numbers from the day I walked out of HealthSouth," Scrushy said at a news conference at a Birmingham hotel, according to Reuters.

Scrushy, who still sits on the board despite many requests from the company that he resign, was reacting, in part, to a company announcement on Tuesday that second-quarter earnings came in below expectations due to weakness in its most important business, inpatient rehabilitation, reported the wire service.

Speaking at the press conference, Scrushy said he was appalled at the events that transpired over the past few years. "I spent 20 years at HealthSouth," he reportedly said. "I have tremendous insight. I was found not guilty. That is the past. This is the future." According to the report, Scrushy scoffed at a statement made by HealthSouth CEO Jay Grinney that it would take three to four years to turn around the company.

For its part, the company vowed not to solicit their former leader's help under any circumstances. HealthSouth spokesman Andy Brimmer told Reuters the company expects Scrushy to be removed from his directorship once the company finally holds an annual meeting.

more...

[54anickel]

77. Investment banks swoop on Gulf Arab oil boom cash

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-09-18T051633Z_01_HO818691_RTRIDST_0_PICKS-ECONOMY-EMIRATES-INVESTMENT-DC.XML

snip>

Some banks are gearing up for the launch on September 26 of the new Dubai International Financial Exchange (DIFX), trumpeted by local officials as a project that will transform the Gulf emirate into another New York or London.

Even for those who are cautious about such ambitions, there is no denying the surge in share issues, mergers, and other business for investment banks.

Bankers estimate there will be more than $150 billion in project finance alone over the next five years, if oil prices remain strong, from Gulf Arab states -- Saudi Arabia, Qatar, the United Arab Emirates, Bahrain, Kuwait and Oman.

In the UAE, trading volume soared 343 percent on the Abu Dhabi stock market in 2004 and 1,238 percent on the Dubai market.

The price of a barrel of crude has doubled in a two-year rally, driven by U.S. and Asian demand, to touch levels in real terms not seen since 1980, the year of the Iran-Iraq war.

Middle Eastern oil exporters are estimated to have netted over $1 trillion in oil revenues in the past five years.

more...

[54anickel]

78. The Fed's Wild Imagination

http://www.321gold.com/editorials/richebacher/richebacher091905.html

In his testimony to Congress on July 20, 2005, Mr. Greenspan declared it quite likely that the world is currently experiencing a global savings glut. Agreeing with Ben Bernanke, he mentioned this glut as one of the factors behind the so-called interest conundrum, i.e., declining long-term rates despite rising short-term rates.

Having read a lot from the Fed's luminaries, their inability to distinguish between rampant global credit excess and a global savings glut does not surprise us. In this view, the Federal Reserve has come to the rescue of a world where excessive saving is threatening depression by eliminating savings.

Attracted by superior rates of return on U.S. assets, investors around the world have been scrambling to pour their excessive savings into direct investments, stocks, bonds and real estate in the United States, in this way financing the resulting huge U.S. trade deficit.

While this explanation may seem to make sense, there is one big snag: Not one word of it is true. First of all, in reality, private foreign investors have drastically curbed their investments in the United States. According to the Bank for International Settlement - the international organization of the world's central banks - Asian central banks financed 75% of the U.S. current account deficit in 2004.

more...

[ozymandius]

80. losses still steep

2:01
Dow 10,560.76 -81.18 (-0.76%)
Nasdaq 2,146.42 -13.93 (-0.64%)
S&P 500 1,231.57 -6.34 (-0.51%)
10-Yr Bond 42.39 -0.23 (-0.54%)
NYSE Volume 1,297,541,000
Nasdaq Volume 1,052,902,000

1:30PM: The indices continue to fade, although not much has occurred over the past half hour... Of the Dow's 30 components, (15 of which have lost more than 1.0%) 26 currently trade in negative territory, led lower by a 3.3% decline in General Motors (GM 31.45 -1.03)... GM shares have plummeted on Canadian autoworker strike concerns and, perhaps, bond holders hedging positions amid speculation Delphi (DPH 3.47 -0.39) may file bankruptcy...

Trailing GM to the downside has been Honeywell (HON 38.36 -0.93), while Boeing (BA 63.70 -1.10) currently comes in as the third-place laggard, affected by a negative reference in Barron's...NYSE Adv/Dec 1090/2084, Nasdaq Adv/Dec 1105/1816

[54anickel]

83. Giving back Friday's "witching" gains? ...n/t

[ozymandius]

87. Pretty much giving it back - now with interest.

2:27
Dow 10,537.57 -104.37 (-0.98%)
Nasdaq 2,140.44 -19.91 (-0.92%)
S&P 500 1,228.93 -8.98 (-0.73%)
10-Yr Bond 42.35 -0.27 (-0.63%)
NYSE Volume 1,406,016,000
Nasdaq Volume 1,140,282,000

[UpInArms]

85. 2:12 EST darker red colors emerging

Dow 10,550.95 -90.99 (-0.86%)
Nasdaq 2,143.81 -16.54 (-0.77%)
S&P 500 1,230.51 -7.40 (-0.60%)
10-Yr Bond 4.239 -0.23 (-0.54%)

NYSE Volume 1,338,288,000
Nasdaq Volume 1,084,822,000

2:00PM: The stock market maintains its footing, continuing to hover around lows of the day... Downside traction within the Consumer Staples sector, which accounts for about 10% of the overall S&P 500, has been somewhat limited by relative strength in its two heftiest members, Altria (MO 73.53 +0.39) and Wal-Mart (WMT 44.04 +0.17)... Aside from defensive attributes that make tobacco-related issues like MO attractive during dismal days, Altria received some added lift after an article in Barron's highlighted the stock...

Wal-Mart, for its part, has managed a modest 0.4% rise, even in the face of surging energy prices that typically pressure its core consumer at the pump, after announcing that it's on track to post 2-4% same-store sales for September...NYSE Adv/Dec 1102/2069, Nasdaq Adv/Dec 1114/1817

[UpInArms]

88. Dow Industrials down 100 as crude futures perch above $67

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38614.6037529977-842844846&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) - The Dow Jones Industrial Average fell 104.37 points to 10,537.57 Monday afternoon, as the other major averages also compounded their prior losses, presssured by a climb of crude futures above $67 a barrel. The S&P 500 ($SPX) was down 9.13 points at 1,228.78 and the Nasdaq composite ($COMPX) down 19.94 points at 2,140.41. Crude futures last were up $4.40 at $67.40 a barrel.

[UpInArms]

89. Oil companies begin evacuations as Rita threatens US gulf

http://www.marketwatch.com/news/story.asp?guid=%7B86BC84C9%2D5D8F%2D4BC3%2D904D%2D4EE9708DCF9E%7D

HOUSTON (MarketWatch) -- Oil companies began pulling workers back out of the Gulf of Mexico on Monday, as Tropical Storm Rita threatened the Gulf Coast production and refining assets spared by Hurricane Katrina just three weeks ago.

Chevron Corp. (CVX) decided to evacuate the staff needed to keep oil and natural gas production platforms running, while Royal Dutch Shell PLC (RDSB.LN) and BP PLC (BP) began pulling nonessential staff. The Chevron evacuations also affect production facilities previously owned by Unocal Corp., which Chevron bought in August.

The U.S. National Hurricane Center expects Rita to grow into a major hurricane covering a wide area in the Gulf of Mexico before making landfall this weekend. The center has shifted its forecast path for Rita northward and now shows the storm targeting Houston and running near producing areas in the western Gulf, heightening concerns in the U.S. and global energy markets.

"You add any supply problems on top of anything we have now, we'll likely see prices spike, at least until the infrastructure gets back to where it is, which is still not back to normal," Doug MacIntyre, an analyst at the federal Energy Information Administration, said in an interview.

"We just have to see what damage the storm does and what's affected," he said. "Obviously, we were on a thin thread even before Katrina. Katrina made the situation very difficult, which is why we had the huge rise in prices."

...more...

[54anickel]

109. Did they evacuate this early for Katrina? I thought is was only 2-3

days before she made landfall, but I might be mistaken on that.

[54anickel]

82. Are We Headed for a "Credit Derivatives Event"?

http://www.321gold.com/editorials/shedlock/shedlock091905a.html

snip>

"This Special Policy Brief is an attempt to put these rumors together in order to tell a coherent story. The purpose is to show how the events posed a severe threat to the stability of our financial markets and overall economy. The narrative also should help illustrate the market problems with these nontransparent markets organized around dealers with no commitment to market participants to maintain orderly and liquid markets...

"What is the extent of the fallout? Exact amounts cannot be known with any clarity or certainty. Actual losses at hedge funds and proprietary trading desks are not reported, or at least not reported separately. The change in credit derivatives prices can be estimated from the iTraxx index for credit derivatives; however, there is no reported information on the volume of trades and value of derivative and cash positions. Thus, estimates of gains and losses to individual firms and the market cannot be determined.

"Some anecdotal information can be gleaned from announced hedge fund closings. The well-known Marin Capital hedge fund closed doors after big losses in convertible arbitrage and credit arbitrage, and Aman Capital also closed shop at the end of the midyear. GLG's Neutral Group, which has credit derivative investments similar to that of Marin Capital, lost $2.5 billion, or 17.2%, in the first half of the year. Cheyne Capital's hedge fund lost 4.8% in May alone. The huge hedge fund Bailey Coates Cromwell Fund, after being named Hedge Fund of the Year for 2004, announced in early June that it would close down."

Is LTCM on the Fed's mind once again? Given some recent near misses with derivatives, and given that no one has a clue with what might be trillions of dollars worth of derivatives at Fannie Mae, the Fed should be concerned. Actually, it should have been concerned long ago, but typically it waits until there is a big problem, and then and only then does it think about addressing it.

At any rate, I am sure LTCM and a derivatives blowup is on the Fed's mind, since the "Fed Summons 14 Banks to Discuss Credit Derivatives Controls":

more...

[spuddonna]

90. It's all a matter of time...

...before this giant credit bubble pops...

[UpInArms]

91. 2:49 EST DOW down more than 100 pts

Dow 10,535.58 -106.36 (-1.00%)
Nasdaq 2,140.40 -19.95 (-0.92%)
S&P 500 1,228.77 -9.14 (-0.74%)
10-Yr Bond 4.239 -0.23 (-0.54%)

NYSE Volume 1,495,868,000
Nasdaq Volume 1,213,089,000

2:30PM: The equity market continues to deteriorate, with the Nasdaq, in particular, touching fresh lows alongside the Tech sector's 1.1% loss... The sector's struggle continues to be broad-based, and today's decline is more than five times that of its year-to-date loss... Although Apple (AAPL) is flirting with an all-time high today, its 2.6% jump does little to offset the respective 2.0%, 1.4%, and 1.7% plunges in tech titans Cisco (CSCO 18.06 -0.36), IBM (IBM 79.21 -1.12), and Dell (DELL 34.27 -0.59)...

Biotech, which is off 1% on the day but up a respectable 19.2% on the year, has served as an additional weight on the Composite...NYSE Adv/Dec 1082/2130, Nasdaq Adv/Dec 1075/1896

[TrogL]

92. The tech bubble is over

Apple is making all its money on iPod and music. They may also be getting a boost from their announcement of the switch to Intel chipset.

Cisco's sold all the stuff they're gonna sell for the moment now that everybody's finished making the jump to IVP6. Pretty much everybody's got a computer on their desk by now and 3COM's killing them on switches anyway.

IBM's no longer a viable hardware company except for their chip department. With Macintosh going to Intel, that could change as well.

Dell sucks.

Until such time as the religious right loses their grip on the populace's imagination, biotechnology isn't going anywhere.

[UpInArms]

95. 3:08 EST fairies nowhere in sight

Dow 10,540.28 -101.66 (-0.96%)
Nasdaq 2,141.41 -18.94 (-0.88%)
S&P 500 1,229.37 -8.54 (-0.69%)
10-Yr Bond 4.242 -0.20 (-0.47%)

NYSE Volume 1,574,818,000
Nasdaq Volume 1,273,960,000

3:00PM: Selling remains the name of the game as the market's internal indications reflect a decidedly bearish tone to trading... To that end, decliners currently overshadow advancers on the NYSE by more than 2 to 1, while, on the Nasdaq, declining issues maintain an 19-to-10 edge over advancers...

Adding to today's struggles have been the indices' inability to find support near key technical levels of 10560, 1229 and 2143 on the Dow, S&P and Nasdaq, respectively, while above-average volume at both exchanges provide even further conviction behind the across-the-board consolidation that has lasted throughout the session...NYSE Adv/Dec 1008/2228, Nasdaq Adv/Dec 1000/1992

[ozymandius]

98. unless you mean the evil tooth fairy, come to yank out your gold teeth

3:15
Dow 10,534.63 -107.31 (-1.01%)
Nasdaq 2,141.53 -18.82 (-0.87%)
S&P 500 1,228.98 -8.93 (-0.72%)
10-Yr Bond 42.47 -0.15 (-0.35%)
NYSE Volume 1,608,070,000
Nasdaq Volume 1,297,595,000

[UpInArms]

100. Ewwww! That's a nasty fairy!

[UpInArms]

102. 3:28 EST more teeth missing

Dow 10,523.41 -118.53 (-1.11%)
Nasdaq 2,140.05 -20.30 (-0.94%)
S&P 500 1,227.85 -10.06 (-0.81%)
10-Yr Bond 4.247 -0.15 (-0.35%)

NYSE Volume 1,684,463,000
Nasdaq Volume 1,350,197,000

[ozymandius]

104. We're gonna see lots of folks with jack-o-lantern teefies. n/t

[UpInArms]

93. US home builder sentiment declines in Sept-report

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-09-19T180820Z_01_N19304377_RTRIDST_0_ECONOMY-HOUSING-NAHB-UPDATE-1.XML

NEW YORK, Sept 19 (Reuters) - U.S. home builder sentiment fell for a third straight month in September, the National Association of Home Builders reported on Monday, as concerns over rising interest rates and economic uncertainties led many to take a more cautious stance on the housing sector.

The NAHB/Wells Fargo Housing Market index fell to 65 in September, seasonally adjusted, its lowest since July 2003 when it also hit 65.

The index is down from a revised 67 in August, the builders' group said. It hit a cyclical high of 72 in June.

Nonetheless, the index remained at a healthy level. Readings above 50 indicate more builders view their market conditions as favorable rather than poor.

Meanwhile, the NAHB's index for current sales of new homes dipped to a 2005-low of 72 in September, down from a revised 73 in August, the group reported.

The index measuring builder sentiment for the next six months fell sharply to 69 from 77 in the previous month. The group's potential buyer traffic index also fell to a reading of 47 in September from 50 the prior month.

...more...

[ozymandius]

101. This hurts.

3:27
Dow 10,526.43 -115.51 (-1.09%)
Nasdaq 2,140.89 -19.46 (-0.90%)
S&P 500 1,228.41 -9.50 (-0.77%)
10-Yr Bond 42.47 -0.15 (-0.35%)
NYSE Volume 1,679,464,000
Nasdaq Volume 1,344,537,000

[UpInArms]

103. I do believe it will need more than just a pressure bandage ... eom

[UpInArms]

105. 3:33 EST did the calvalry show up?

Dow 10,537.89 -104.05 (-0.98%)
Nasdaq 2,142.83 -17.52 (-0.81%)
S&P 500 1,229.47 -8.44 (-0.68%)
10-Yr Bond 4.247 -0.15 (-0.35%)

NYSE Volume 1,718,829,000
Nasdaq Volume 1,377,023,000

[ozymandius]

107. Dow less than 100 pt loss

3:45
Dow 10,548.32 -93.62 (-0.88%)
Nasdaq 2,143.97 -16.38 (-0.76%)
S&P 500 1,230.39 -7.52 (-0.61%)
10-Yr Bond 42.47 -0.15 (-0.35%)
NYSE Volume 1,790,606,000
Nasdaq Volume 1,429,333,000

3:35PM: The market's slide persists, with each of the major indices re-establishing fresh lows as the closing bell approaches...Even an hour of the close of commodities trading, it appears the damage has already been done; oil's 7.0% surge, primarily on concerns of another hurricane (Rita) potentially hitting the Gulf, has weakened sentiment across the board and exacerbated an already nervous market heading into tomorrow's meeting by an FOMC struck by the damage wrought by Hurricane Katrina three weeks ago... NYSE Adv/Dec 1002/2256, Nasdaq Adv/Dec 1012/1995

[UpInArms]

108. 3:49 Papa's got a brand new bag

seems the fairies come at 3:30ish now :eyes:

Dow 10,551.98 -89.96 (-0.85%)
Nasdaq 2,144.99 -15.36 (-0.71%)
S&P 500 1,230.58 -7.33 (-0.59%)
10-Yr Bond 4.247 -0.15 (-0.35%)

NYSE Volume 1,847,715,000
Nasdaq Volume 1,467,505,000

[UpInArms]

111. closing numbers

Dow 10,557.63 -84.31 (-0.79%)
Nasdaq 2,145.26 -15.09 (-0.70%)
S&P 500 1,231.02 -6.89 (-0.56%)
10-Yr Bond 4.247 -0.15 (-0.35%)

NYSE Volume 2,008,369,000
Nasdaq Volume 1,575,028,000

[UpInArms]

110. G7 leaders to meet in Washington on Friday afternoon

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38614.6635826389-842851722&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The finance ministers and central bank governors of the G7 richest industrial countries will meet on Friday afternoon in Washington, a Treasury Department spokesman said Monday. The G7 will have a working lunch with economic leaders from five developing nations: China, India, Brazil, Russia and South Africa. The G7 is expected to release a statement following their meeting around 6:30 p.m. Eastern time. The foreign officials will be in Washington for the IMF and World Bank annual meetings over the weekend.

[daleo]

113. Dow is exactly 0.61 points less today, than when Bush took office. n/t