STOCK MARKET WATCH, Tuesday 7 March

[ozymandius]

Tuesday March 7, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 1049 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1902 DAYS
WHERE'S OSAMA BIN-LADEN? 1602 DAYS
DAYS SINCE ENRON COLLAPSE = 1563
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 3
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
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON March 3, 2006

Dow... 10,958.59 -63.00 (-0.57%)
Nasdaq... 2,286.03 -16.57 (-0.72%)
S&P 500... 1,278.26 -8.97 (-0.70%)
30-Year Bond 4.72% +0.06 (+1.35%)
10-Yr Bond... 4.74% +0.05 (+1.15%)
Gold future... 556.80 -11.20 (-2.01%)






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. looking at those future charts

It appears we're walking toward a cliff again. Just an observation of the graphics. I wonder what the numbers say.

And good morning everyone. :donut:

Ozy :hi:

[ozymandius]

6. numbers

06:24 am: S&P futures vs fair value: -2.5.
Nasdaq futures vs fair value: -3.5.

[JNelson6563]

11. Mornin' Ozy and all!

Hey! :hi:

Ozy, you summed up my thoughts on the futures charts. As I glanced them just now I thought "Did something bad happen?" but I thought it tongue in cheek, of course. Nothing but bad seems to be happening!

I glanced at TV briefly this morning. Seems the order to "sell" the ports deal is everytwhere. CNBC had a guy on telling us there is nothing to worry about in letting foreign countries manage large chunks of our infrastructure, nothing at all! Gosh if he's on TV he must know everything so I feel a whole lot better! I hope we increase the amount of Treasury notes we auction off to China, etc.! I say sell it all piece-meal! We could milk this deal for a generation or two and after that....who cares?!?!? Oy! :eyes:

*longsigh*

Good luck in the casino today everybody! You're gonna need it!

Julie

[EuroObserver]

15. Punters start to abandon equities worldwide???

Heading into bonds, cash and safer havens for the duration?

[EuroObserver]

20. Risks rise for U.S. stock market pullback

Tue Mar 7, 2006 11:09 AM GMT

By Ellis Mnyandu

NEW YORK (Reuters) - Risks of a sharp pullback in U.S. stocks have increased markedly as a spike in bond yields fuels concerns about the toll higher interest rates would take on corporate profits, analysts said on Monday.

Also, with key technical indicators pointing to a highly overbought market, analysts said there appeared to be ample room for U.S. stock indexes to break below key support levels in the days ahead.

Hope that the U.S. Federal Reserve was nearing the end of a long rate-increase campaign is among the chief reasons that led investors to push the stock indexes to fresh 4-1/2-year highs in recent weeks.

But that hope has fast dissipated, leaving the stock market vulnerable to a sharp pullback that could last days or even weeks, the analysts added.

...more...

[ozymandius]

2. WrapUp by Rob Kirby

A FOURTEEN-YEAR "OVERNIGHT" SUCCESS

Today’s market wrap deals with some of the pitfalls of investing in cyclical stocks and specifically the juniors, whose namesake – coincidentally – puts a fence around the vast majority of companies represented at the PDAC Convention in Toronto.

As commodities cycle in (bull) and out (bear) of favor, the fortunes of the companies who prospect and produce - all the way up the food chain to distribution and/or retailing these goods can change with the wind. In the case of a junior exploration company this becomes even more of an issue, since, by their very nature they spend money “looking for” resources. So, not only are there issues concerning whether or not an economically viable resource is found; this can also be problematic from the standpoint of lag times between discovery and such time as the project is either joint ventured or brought online by a producer. Everyone should understand that two very different skill sets differentiate exploration (geology) from mining or production.

-more to this long story-

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

[ozymandius]

3. Today's Reports

8:30 AM Productivity-Rev. Q4
Briefing Forecast -0.1%
Market Expects -0.1%
Prior -0.6%

3:00 PM Consumer Credit Jan
Briefing Forecast $10.0B
Market Expects $5.0B
Prior $3.3B

[UpInArms]

24. U.S. 4Q productivity revised higher to 0.5% decline

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B51A3F855%2DFC6D%2D4718%2D8963%2D5FED3BEFDB41%7D&dateid=38783%2E354645081%2D863100150&siteid=mktw&dist=newsfinder

WASHINGTON (MarketWatch) - Productivity in the U.S. nonfarm business sector fell at a revised annual rate of 0.5% in the fourth quarter, a slight improvement from the negative 0.6% estimate made a month ago, the Labor Department said Tuesday. It was the first decline in productivity since the first quarter of 2001, the quarter the recession began. Unit labor costs -- a key gauge of inflationary pressures - increased 3.3%, revised down from 3.5% earlier. It was the biggest increase in unit labor costs in a year. Economists were expecting a larger upward revision in productivity to negative 0.2% and expected a larger downward revision in unit labor costs to rise 3.1%.

8:30 AM ET 3/7/06 U.S. 4Q REAL HOURLY COMPENSATION FALLS 0.4%, UNREVISED

8:30 AM ET 3/7/06 REVISIONS TO 4Q PRODUCTIVITY, ULC SMALLER THAN EXPECTED

8:30 AM ET 3/7/06 U.S. 2005 UNIT LABOR COSTS REVISED 2.6% VS. 2.4%

8:30 AM ET 3/7/06 U.S. 2005 PRODUCTIVITY REVISED 2.9% VS. 2.7%

8:30 AM ET 3/7/06 U.S. 4Q NONFARM UNIT LABOR COSTS REVISED TO 3.3% VS. 3.5%

8:30 AM ET 3/7/06 U.S. 4Q NONFARM PRODUCTIVITY REVISED TO -0.5% VS. -0.6%

[UpInArms]

28. U.S. PRODUCTIVITY SLOWS FOR FIRST TIME SINCE 2001

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B60BDDD5E%2D115D%2D404E%2D9E37%2D3687C4408EC5%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - Productivity in the U.S. nonfarm business sector fell at a revised annual rate of 0.5% in the fourth quarter, a slight improvement from the negative 0.6% estimate made a month ago, the Labor Department said Tuesday.

It was the first decline in productivity since the first quarter of 2001, the quarter the recession began.

Unit labor costs -- a key gauge of inflationary pressures - increased 3.3%, revised down from 3.5% earlier. It was the biggest increase in unit labor costs in a year.

Economists were expecting a larger upward revision in productivity to negative 0.2% and expected a larger downward revision in unit labor costs to rise 3.1%, according to a survey conducted by MarketWatch.

In the past four quarters, productivity has increased 2.5% while unit labor costs have increased 1.3%.

In all of 2005 compared to 2004, productivity increased 2.9%, the slowest growth since 2001. Unit labor costs rose 2.6% in 2005, the fastest gain since 2000.

The weaker-than-expected productivity report could add to the pressures on the Federal Reserve to keep raising interest rates to keep inflation at bay. The Fed is expected to raise rates at least two more times to bring overnight lending rates to 5% by summer.

...more...

[Roland99]

49. Didn't I hear yesterday that durable goods orders dropped 10%?

[ozymandius]

4. Oil Prices Rise Ahead of OPEC Meeting

LONDON - Oil prices rose Tuesday as OPEC oil ministers were gathering to consider the effect of lower demand and world events on their production strategy.

Markets were also watching the International Atomic Energy Agency's board meeting on
Iran's nuclear ambitions, as well as the situation in Nigeria, where armed militants have vowed to cut daily oil exports by another 1 million barrels by the end of March.

Light, sweet crude for April delivery was up 24 cents to $62.65 a barrel in electronic trading on the New York Mercantile Exchange. April Brent on the ICE Futures exchange gained 43 cents to $62.77 a barrel.

-cut-

Some calm was brought to the world's jittery energy markets after oil ministers suggested that the Organization of Petroleum Exporting Countries will keep output levels intact at the cartel's meeting this week.

more...

[ozymandius]

5. US gasoline, diesel fuel retail prices soar: gov't

Looks like its time to haul the big oil CEO's before Congress again.

WASHINGTON (Reuters) - U.S. drivers saw gasoline prices soar an average 7.7 cents a gallon over the last week, while truckers paid the most for diesel fuel since November, the government said on Monday.

The national price for regular unleaded gasoline jumped to $2.33 a gallon, up 33 cents from a year ago and the highest level in a month based on the federal Energy Information Administration's survey of service stations.

-cut-

The rising pump prices arrived as the busy spring driving season gets under way. They reflect expensive crude oil based on traders concerns about potential disruptions in world crude oil supplies.

more...

[EuroObserver]

13. Oil consolidates after slide

Tue Mar 7, 2006 3:41 AM GMT (REUTERS) ...
Oil traders fear any punitive action could prompt Iran to cut supply. However, the International Energy Agency (IEA), the co-ordinator of emergency oil stocks, said on Monday it could safely fill a gap left by a possible Iranian crude embargo.

At the last OPEC meeting in January, Iran said it would continue to pump oil in any case -- but it could change its mind.

Iran has lent its backing to leaving OPEC output unchanged at its meeting in Vienna on Wednesday. Top OPEC producer Saudi Arabia, Kuwait and the United Arab Emirates have also said OPEC should not change its 28 million bpd ceiling.

Saudi Oil Minister Ali al-Naimi said supplies were "stable," but concerns about disruption was fuelling prices, while Kuwait said oversupply in the second quarter could depress prices.

The Paris-based IEA, advisor to industrialised nations, called on OPEC to hold its second-quarter output steady.

"What should happen is not changing the output," said Claude Mandil, executive director of the IEA. "Demand in crude will not be reduced in the second quarter ... It's a time when additional stocks are needed." ...more...

[UpInArms]

45. US gasoline, diesel fuel retail prices soar: gov't

http://today.reuters.com/news/ArticleBusiness.aspx?type=ousiv&storyid=2006-03-07T035647Z_01_N06298375_RTRIDST_0_BUSINESSPRO-ENERGY-GASOLINE-PRICE-DC.XML

WASHINGTON (Reuters) - U.S. drivers saw gasoline prices soar an average 7.7 cents a gallon over the last week, while truckers paid the most for diesel fuel since November, the government said on Monday.

The national price for regular unleaded gasoline jumped to $2.33 a gallon, up 33 cents from a year ago and the highest level in a month based on the federal Energy Information Administration's survey of service stations.

The price increases in many cities were much higher, skyrocketing more than 19 cents a gallon in just one week in Chicago and more than 16 cents in Cleveland.

The average diesel fuel price paid by truckers increased 7.4 cents to $2.55 a gallon, up 38 cents from a year earlier and the most expensive since November 14, the EIA said.

The rising pump prices arrived as the busy spring driving season gets under way. They reflect expensive crude oil based on traders concerns about potential disruptions in world crude oil supplies.

...more...

[UpInArms]

46. April Crude @ $62.05 bbl - April NatGas @ $6.63 mln btus

10:17 AM ET 3/7/06 APRIL CRUDE FALLS 36C TO $62.05/BRL IN EARLY NY TRADING

10:17 AM ET 3/7/06 APRIL NATURAL GAS RISES 8.3C, OR 1.3%, TO $6.63/MLN BTUS

[EuroObserver]

7. Wobbly Nikkei down 1.1%, Topix down 0.53%

Nikkei falters as Softbank declines, BOJ weighs
TOKYO (Reuters) - The Nikkei average fell for the fourth time in five sessions on Tuesday, dropping 1.1 percent as investors sold Softbank Corp. on concerns the Internet firm's finances may be shaken by its possible takeover of a mobile phone operator. The market was also capped amid widespread caution ahead of a possibly pivotal meeting of the Bank of Japan's policy board. But Suzuki Motor Corp. gained after the maker of compact cars said it would keep its operational alliance with General Motors Corp. even though the U.S. firm has sold most of its stake in Suzuki.

The Nikkei finished down 175.14 points at 15,726.02, wiping out most of its gains from the previous session. The broader TOPIX index ended down 0.53 percent at 1,617.87.

Softbank was the biggest drag on the Nikkei, falling 8.5 percent to 3,140 yen as investors focused on the financial burden if Softbank were to buy the Japanese unit of Britain's Vodafone Group Plc. News of the deal, which could cost up to 2 trillion yen ($17.01 billion), had sent Softbank's shares up nearly 4 percent in the previous session.

"Yesterday I think Softbank gained as investors saw this as part of its new growth strategy. But I think the price of the purchase is very much at a premium," said Masaki Iso, chief investment officer at Yasuda Asset Management. "Yesterday's gains were based on sentiment. If you think about this calmly, it looks expensive," he said.

Trade volume rose slightly from the previous session, when it its lowest level in seven months, with 1.64 billion shares changing hands on the Tokyo exchange's first section. Decliners beat out advancers 1,064 to 536.
...

Concerns ahead of the Bank of Japan's policy meeting that starts on Wednesday continued to weigh on the Nikkei. The meeting could result in the central bank ending its five-year-old policy of flooding financial markets with excess liquidity. But recent losses prove the market has already factored in that the BOJ will scrap its policy this week, said Kirby Daley, a strategist at Fimat. "I believe they will move this week, and I believe they should move this week," he said. "If they don't move, it has the potential to surprise the markets even more ... There's no upside to waiting." ...more..

[EuroObserver]

9. Key 10-year Japanese gov't bond yield ends at 19-month high

(Kyodo) _ The yield on the benchmark 10-year Japanese government bond ended Tuesday at its 19-month high on prospects of monetary tightening worldwide.

In interdealer trading, the yield on the No. 277 1.6 percent issue rose 0.015 percentage point from Monday's close to end the day at 1.645 percent, matching the closing yield on Aug. 12, 2004.

The price of the key March futures contract for 10-year bonds fell 0.11 point to 135.68 on the Tokyo Stock Exchange, with the yield up 0.010 percentage point to 1.792 percent. ...source...

[JNelson6563]

14. Similar story here, isn't it?

Seems our yields are climbing too. I note the 2 yr is at 4.80 and the 10 yr is at 4.79 now. A largely different picture than last week.

With money leaving markets and Treasuries, in fact, I see no increases anywhere with a cursory glance right now, my question is: Where's the money going??

I feel kind of like all the birds are safely hidden in the trees chirping like mad and I cannot see what it is that's alarming them. ;-)

Julie

[EuroObserver]

16. Uh huh. In spite of dividend season looming, too.

Will the IAEA decide today (to which we know what the reaction of a certain party will be)?

[EuroObserver]

17. Japanese Stocks Fall on Wall Street Drop (morning trade)

Japanese stocks fell Tuesday, hurt by Wall Street's earlier declines, amid speculation that the Bank of Japan could tighten its super-easy monetary policy as early as this week. The dollar rose against the yen.

The benchmark Nikkei 225 index fell 137.68 points, or 0.87 percent, to 15,763.68 points on the Tokyo Stock Exchange to end the morning session. The index rose 237.82 points, or 1.52 percent, the day before.

Japanese players were reluctant to move aggressively ahead of the central bank's meeting Wednesday and Thursday as well as machinery orders data due out Friday.

Sentiment also was affected by U.S. share prices Monday as rising bond yields triggered a sell-off amid nervousness about the economy and interest rates _ as well as Bank of Japan policy.

With Japan's economy improving, investors say the country's central bank could tighten its easy monetary policy at this week's meeting. Most likely, the BOJ would move first by stopping injections into the banking system, followed later by lifting interest rates, which now stand at zero.

U.S. investors fear that rising interest rates in other countries could contribute to more rate hikes domestically. The Dow Jones industrial average fell 63.00, or 0.57 percent, to 10,958.59.

[AnneD]

51. Morning Marketeers,

:donut: I feel odd today too. Like I was one of the last people to get to the buffet and all that is left is a bit of dry sauce crusted on the edge and a lump of mystery meat in congealed sauce. Which sums up the market I guess.

I am glad that I will start my parttime gig next week. I could use the extra money. I will work the entire Spring break so that is a good thing. At the rate the gas prices are climbing here, I am greatful for the extra bucks. We will try to sell Hubbys bike. The weather and rising gas prices will help us sell it.

Happy hunting and watch out for the bears.

[EuroObserver]

18. Koizumi's warning unlikely to avert BOJ policy shift: analysts

(Kyodo) _ Prime Minister Junichiro Koizumi's warning against an early monetary policy shift is unlikely to dissuade the Bank of Japan from scrapping its super-loose policy when a two-day meeting concludes Thursday, analysts said Tuesday.

Koizumi told the House of Councillors Budget Committee on Monday that there should be no situation in which the BOJ reinstates the quantitative easing monetary policy after seeing its departure from the policy was a mistake.

His comment apparently stems from a bitter lesson learned when the BOJ ended the so-called zero interest rate policy in August 2000 amid strong government opposition.

Only half a year later, in March 2001, the central bank was forced to adopt the current quantitative easing policy to anchor short-term interest rates close to zero as the Japanese economy was again faltering after the burst of the information technology bubble.

Koizumi's remark in parliament is widely seen aimed at hindering the central bank's ambition to depart from the super-loose policy this week.

The premier rarely makes direct comments in the Diet on monetary policy.

Some analysts said Koizumi's remark has dampened the BOJ's courage to take action this week, and they moved back their projections for the timing of the policy change from this week to April.

Speculation has been rife that the nine BOJ Policy Board members will decide to scrap the quantitative easing policy at their meeting this week, rather than in next month's meetings, one slated for April 10-11 and another April 28.

One BOJ watcher said it is now more logical for the BOJ to make a policy change April 28 as it will also release a biannual outlook report projecting economic and price conditions down the road.

Still, many see Koizumi's warning as rather counteractive in terms of stopping the BOJ from terminating the current policy. "Mr. Koizumi's remark is counteractive if the government really wants the BOJ to hold the quantitative easing policy steady," said Masaaki Kanno, chief economist at J.P. Morgan Securities Asia Pte. "His comment made the BOJ more adamant than ever to make a policy shift in March as it is highly likely that postponing a policy change to April will be seen as caving in to political pressure," Kanno said.

It will make little difference in terms of market impact whether the BOJ lifts the current policy in March or April as the financial market has factored in the policy shift and focus is now on when short-term interest rates will be raised, according to Kanno. When terminating the quantitative easing policy, the central bank is expected to go back to a conventional interest rate-based policy, using the unsecured overnight call money rate -- the rate banks charge each other for overnight loans -- as a monetary adjustment tool. Although the BOJ is expected to maintain short-term interest rates close to zero for awhile after the policy shift, market watchers are paying increased attention to when the rates will be allowed to rise, he said.

...more...

[EuroObserver]

10. Emerging Asia FX-Yen drags Asia lower, Thai baht biggest loser

SINGAPORE, March 7 (Reuters) - Asian currencies weakened on Tuesday, dragged lower by a weaker yen as investors bet the dollar's yield advantage over the yen would hold for some time yet because the Bank of Japan is unlikely to raise rates soon.

The dollar was also boosted in Asia by comments from St. Louis Federal Reserve President William Poole, who said the U.S. economy had a "great deal of momentum" and the Fed may have to raise rates further if growth exceeded expectations.

That helped drive the dollar to about 117.79 yen, its strongest since Feb. 23.

The Thai baht, with domestic political problems to contend with, was the biggest loser, dropping as much as 0.9 percent, while the Singapore dollar fell as much as half a percent to a two-week low of 1.6322 per dollar.

The South Korean won and Taiwan dollar both lost a third of a percent.

The Indonesian rupiah dropped as much as 0.6 percent to a one-week low of 9,240 per dollar after the central bank held off raising its benchmark rate for the third straight policy meeting on Tuesday despite inflation hovering above 17 percent. The baht hit a low of 39.01 on concern that the economy could slow further as infrastructure spending gets delayed due to the political problems facing Prime Minister Thaksin Shinawatra. ...more...

[EuroObserver]

12. (US) Honda unit plans 500 mln euro bond

LONDON, March 7 (Reuters) - American Honda Finance Corp., a wholly owned subsidiary of Honda Motor Co. (7267.T: Quote, Profile, Research) (HMC.N: Quote, Profile, Research), plans to sell a 500 million euro ($603 million) 5-year bond, an official at one of the banks managing the sale said on Tuesday.

Barclays Capital, Deutsche Bank and JP Morgan said in a statement that the bond would be launched in the near future.

American Honda Finance Corp. is rated A1 by Moody's Investors Service and A+ by both Standard & Poor's and Fitch Ratings.

The borrower, which provides financing for Honda's U.S. vehicle sales, held a roadshow in mid-February, but at that point had not taken a firm decision to issue a bond. ...source...

[EuroObserver]

8. Europe: financial, mining, oils, most everything falling (rate fears)...

Swiss SMI down -1.16% at 7825.26 in Zurich 12:20:49 CET
CAC 40 down -0.66% at 4,977.82 in Paris 12:37 CET
Xetra DAX down -0.73% at 5,712.22 in Frankfurt 12:37 CET
FTSE-100 down -0.87% at 5,846.70 in London 11:37 GMT

CAC 40 opens down 0.6% at 4,982.8 in Paris
Xetra Dax 30 opens down 0.7% at 5,712.6 in Frankfurt
FTSE 100 opens up 0.5% at 5,871.3 in London as oil and mining stocks lose ground (<--nb. FT publishes self-contradictory FTSE data?).

London lower as mining stocks soften
(FT) London equities eased back from 5-year highs in opening trade on Tuesday, with the mining sedtor falling furthest as metal prices softened. The FTSE 100 started the day 0.7 per cent lower at 5,857.5 and the mid-cap FTSE 250, which set a fresh all-time high at the end of the previous session, lost 0.4 per cent to 9,508.5. ... (S)ofter metal prices on commodities markets pressured the mining sector in general and Antofagasta in particular. Shares in the Chilean copper miner fell 2.1 per cent to £20.58, tracking lower for the commodity on the London Metal Exchange. Anglo American fell 2.8 per cent to £20.70 and BHP Billiton was 2.4 per cent lower at 940.5p. Banking stocks also weakened, coming off Monday’s strong run inspired by record profits at HSBC. Having closed 1.5 per cent higher on the back of the news, shares in the company were 0.9 per cent weaker at 981p in early exchanges. Barclays slipped 0.6 per cent to 650.5p and Lloyds TSB lost 0.4 per cent to 545p. ...more...

UK's FTSE 100 extends fall, led by miners and oils
Tue Mar 7, 2006 10:14 AM GMT LONDON, March 7 (Reuters) - Britain's top share index extended losses on Tuesday to trade 0.9 percent lower, with weaker metals prices triggering a sell-off in mining stocks such as Anglo American (AAL.L: Quote, Profile, Research). By 1007 GMT, the FTSE 100 <.FTSE> was down 50.6 points at 5,847.2, wiping out Monday's gains when the index closed at its highest level in nearly five years.

Concern over global interest rates is weighing on equity markets worldwide, dealers say.

Oil and gas stocks like BP (BP.L: Quote, Profile, Research) also fell, dragging the UK index down further. ...source...

European stocks fall on rate worries, miners weigh
Tue Mar 7, 2006 8:23 AM GMT LONDON, March 7 (Reuters) - European stocks slipped on Tuesday as a jump in bond yields signalled investors expect U.S. interest rates to continue rising, while miners dipped on a fall in commodity prices.

Rio Tinto (RIO.L: Quote, Profile, Research) and Anglo American (AAL.L: Quote, Profile, Research) lost around 2 percent after gold prices fell sharply in the previous session and copper was also pressured.

The FTSEurofirst 300 <.FTEU3> index of leading European shares was 0.6 percent weaker at 1,341.73 by 0815 GMT. The narrower DJ Euro Stoxx 50 <.STOXX50E> slipped 0.7 percent to 3,728.29.
...

Oil was steady around $62.49 a barrel as dealers said they expected OPEC to hold production at near-maximum levels at its meeting this week.

On the economic front, Germany has January industrial orders due out at 1100 GMT, followed by revised U.S. fourth-quarter productivity data at 1330 GMT. ...more...

[EuroObserver]

21. European bond yields rise mirroring Treasuries (Euro-UK equities sell-off)

Same story most everywhere...
http://news.ft.com/cms/s/335f1a06-add2-11da-8ffb-0000779e2340.html

By Paul J Davies in London and David Turner in Tokyo
Published: March 7 2006 12:52 | Last updated: March 7 2006 12:52

European government bond yields rose on Tuesday inspired by US Treasury yields hitting 21-month highs overnight.

The 10-year US Treasury yield hit a high on Monday not seen since June 2004, when the US Federal Reserve first began raising interest rates. This news alloyed with hawkish comments on eurozone interest rates from the European Central Bank last week to bring about a further sell-off in the European markets, particularly on shorter-dated bonds.

The yield on the two-year Schatz jumped 13.7 basis points in morning trading to 3.130 per cent while the 10-year bund yield was up 1.6bp at 3.607 per cent.

...more...

[EuroObserver]

59. Bourses closed in much the same state as at this morning's opening

Swiss SMI down -0.67% at 7864.26 in Zurich17:31:54
CAC 40 closes down -0.4% at 4,992.2 in Paris 17:47 CET
Xetra Dax 30 closes down -0.3% at 5,739.3 in Frankfurt 17:46 CET
FTSE 100 closes down -0.6% at 5,862.7 off intraday lows as media stocks rise but can’t off set weaker miners and banks 16:36

FTSE 100 to be reclassified based on tonight’s closing prices - DMGT and Cable & Wireless could face relegation, Corus and Lonmin could be promoted 16:40

European shares drop on rates despite late rally
Tue Mar 7, 2006 5:07 PM GMT PARIS, March 7 (Reuters) - European shares fell on Tuesday as investors focused on the potential for further interest rate hikes on both sides of the Atlantic, while Anglo American (AAL.L: Quote, Profile, Research) led a slump in mining stocks, outweighing gains late in the session by Linde (LING.DE: Quote, Profile, Research) and Telecom Italia (TLIT.MI: Quote, Profile, Research).

"There's been a cooling off in the U.S.," said Edmund Shing, European Strategist with Kepler Equities in Paris. "Bond markets are pricing in the danger of a bit more inflation and the Fed may have to raise rates more, and the same is true with the ECB in Europe," he said. "Consumers will be squeezed with higher interest rates, which is not good news for the market generally," Shing said.

The FTSEurofirst 300 <.FTEU3> index of leading European shares was down as much as 1 percent in mid-afternoon trade, but recouped some losses on the back of a late rally, to be down 0.5 percent at 1,343.6 by the unofficial close.

On Wall Street, the Dow Jones industrial average <.DJI> was 0.2 percent higher at 10,980 at the time of late European trade, after closing lower the previous session. "These prices have not been seen since mid-2004, when the Fed Reserves began the first of a long series of rate hikes," said Neill Pickering, head of group sales and trading at Pacific Continental Securities. "This has spooked investors -- who are biting their nails in dire straits that the magical 5 percent will not be the cut off point for the Feds and there could well be more hikes," he said.

The European Central Bank's (ECB) indication last week that rates will keep rising, along with the Bank of Japan's shift toward scrapping its loose monetary policy, has rattled Treasuries and global bond markets. "We believe the hawkish hints coming from the ECB and the potential time constraints posed by the prospect of softer fundamentals further ahead mean the race is on to get rates up as soon as possible," said David Brown, chief European economist at Bear Stearns.

...more, detail...

[EuroObserver]

19. Stronger data may mean more rate hikes: Fed's Poole

http://yahoo.reuters.com/news/articlebusiness.aspx?type=ousiv&storyID=2006-03-07T021504Z_01_N06312231_RTRUKOC_0_US-ECONOMY-FED-POOLE.xml&pageNumber=0&imageid=∩=&sz=13
Tue Mar 7, 2006 (unspecified time)am ET
ST. LOUIS (Reuters) - The U.S. economy has a "great deal of momentum" and the Federal Reserve may have to raise interest rates further, especially if growth exceeds expectations, one of its top policymakers said on Monday.

"Should we get data in the coming months that are consistently strong, particularly if there are substantial upside surprises, then that says we're going to have to step a little harder on the brake," St. Louis Federal Reserve President William Poole told Reuters in an interview.

He said the opposite would hold if the data were on the soft side. But he did not sound very convinced this was on the cards and doubted a cooling housing market could undermine the expansion, as some private sector economists have warned.

"My sense is there is a great deal of momentum in the economy. I don't think that it is momentum of the sort that is going to run us off the rails," said Poole, explaining he didn't think the growth pace would create widespread labor market shortages.

"But I think it is momentum of the sort that says we're going to keep rolling down the expansion here, and you're not going to stop this freight train easily."
...

Poole, often placed on the hawkish wing of the Federal Open Market Committee for his long-stated preference for inflation to be zero -- properly measured -- is one of the Fed's most influential leaders. A study last week of how much FOMC members moved financial markets in 2005 ranked Poole second after Fed Chairman Alan Greenspan and well ahead of Ben Bernanke, who replaced Greenspan at the central bank's helm on February 1.
...

"I don't think housing is going to be a source of a lot of growth. It may be flat to slightly down, from pretty high levels, but that doesn't mean the economy is in danger of stalling," he said.

In fact, softer housing numbers illustrate a normal hand-off in activity from the residential housing market to business investment as the economic cycle matures, said Poole.
...

"I think that if it turns out that policy-tightening has overshot the mark, then we ease off."

U.S. consumer prices were driven up to 4 percent year-on-year in January by soaring energy costs. On the other hand, core prices, which strip out food and energy, are still relatively tame.

Poole acknowledged inflation could rise further, but he did not think that there had been any deterioration in expectations for higher prices down the road.

"I think the sense from the (FOMC) minutes and my own view is that the inflation risks are tilted a bit to the upside. But that is not to say that my point-estimate is for higher inflation ... It is not my sense that we have an inflation expectations issue," he said.

...more...:eyes: :rofl:

[54anickel]

34. Bwahaha, there's that hand-off of the baton to business investment

again. They've been saying that for 5 years now! All he's done is replace the word consumer with the phrase residential housing market. When did they decide to recognize THAT hand-off?

[54anickel]

38. Does the United States Have a Handle on Inflation

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=52173

Over on RealMoney, Barry Ritholtz opined that the U.S. government is probably underestimating inflation because it is focusing on the wrong type of inflation. I would agree with that, having identified no less than five different types of inflation: commodity inflation, wage inflation, monetary inflation, fiscal inflation, and foreign exchange inflation. Before discussing “inflation,” it helps to identify which form of inflation is being talked about. Failure to do so may have caused some of the confusion that often surrounds this topic.

The inflation that most American economists remember best (from the 1960s and later) is wage inflation, otherwise known as demand-pull inflation. Workers observe rising prices and demand compensation in the form of higher wages, which creates a vicious cycle of more inflation and more wage demands. This has not been happening recently in the United States, due to the absence of labor unions, and to what Karl Marx called the “reserve army of the unemployed” in “offshore” markets. This appears to be the form of inflation that the Fed and other U.S. government authorities are focusing on, and it has indeed been benign.

A less common, but more volatile form of inflation is commodity inflation, better known as cost-push inflation. We can see it today in commodity prices such as energy and metals. Energy and food price changes are excluded from “core” inflation because of their period-to-period volatility. But over time, oil price rises have averaged 6% a year, higher than other forms of inflation, and assuming that they don’t cause inflation is really assuming away the problem. Jeremy Grantham would agree that other commodities such as timber rise at 3% a year “real” (above the rate of calculated inflation). That’s largely because such rises are (wrongly) excluded from the calculation. Another form of commodity inflation that is excluded from the official statistics is the parabolic rise in housing prices. (The government instead uses a calculation of “owner equivalent rents,” which are basically tied to the benign wage numbers.) Commodity inflation is the most obvious form of inflation today, as reflected in higher gasoline and gas bills, but is severely understated.

Monetary inflation was most famously seen in Weimar Germany during the 1920s, when the German government went crazy with the printing presses to the point where it took billions of marks to equal one dollar. This wiped out the savings of the middle class, most members of which were compensated with (worthless) “million mark” notes, and led to the rise of Hitler. Nothing of this sort has happened in the western world since, but it is a worry when the United States has a new chairman of the Federal Reserve who talks (hopefully facetiously) of dropping money out of helicopters.

more...

Looks like we've got 4/5 covered, yet the Fed continues to focus on the one we don't have.

[UpInArms]

39. in connection with the cessation of the M-3 Report - this bears repeating:

Monetary inflation was most famously seen in Weimar Germany during the 1920s, when the German government went crazy with the printing presses to the point where it took billions of marks to equal one dollar. This wiped out the savings of the middle class, most members of which were compensated with (worthless) “million mark” notes, and led to the rise of Hitler. Nothing of this sort has happened in the western world since, but it is a worry when the United States has a new chairman of the Federal Reserve who talks (hopefully facetiously) of dropping money out of helicopters.

[54anickel]

41. Got my wheelbarrow for Christmas - howzbout you? n/t

[AnneD]

53. Excellent article 54anickel

:thumbsup: good explaination of different types of inflation. Best better skedadle down to Home Depot and get my wheelbarrow. On second thought, I want a Radio Flyer wagon. I can hitch up my 2 mutts and they can haul the money AND protect it (if you saw my mutts, you'd know exactly how sarcastic I am being). Well, since dollars will be so cheap as compaired to imports let's have some yankee ingenuity. We can make paper dresses from $1 bill, use it as insulation in our homes, and of course, toilet paper. There is a bright side to every disaster.

[54anickel]

73. Make sure you get one of those really BIG ones...

[AnneD]

77. WOW....

heading out to the monster wagon rally. I would need a team of Clydsdales to haul it, but man...what a great freeway vehicle. I guess I am experiencing penis envy (well, as close to that as gals can get).

[Roland99]

50. The 1st thing that I thought of when I 1st heard of the cessation of M3

[UpInArms]

22. daily dollar watch

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

Last trade 90.54 Change +0.31 (+0.34%)

High Expectations for Friday’s Payrolls Rallies Dollar

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/7154_high_expectations_for_fridays_payrolls_rallies.html

US Dollar
The market is very much in limbo at the moment as traders try to figure out whether the majors have the momentum to extend last week’s sharp moves. There are a lot of uncertainties this week with five central bank meetings along with the US trade balance and non-farm payrolls due for release. The trade balance should not have much of an effect on the market unless it deviates from the consensus forecast significantly. A wide trade deficit is something the market has grown accustomed to and we’ll need a few more months of funding deficiencies before the concern for the trade deficit resurfaces. Non-farm payrolls on the other hand are the real wild card. Given the low level of jobless claims over the past few weeks, expectations are high for a good report. Even though the consensus is currently for 210k jobs to have been created last month, the whisper number is as high as 300k. Some argue that if jobs are strong, the Fed may be tempted to overshoot rate hikes, pushing the lending to rate to 5.25% or even 5.50%. Although we think this is highly unlikely, the market is bearish dollars at the moment, betting on an end to the Fed’s tightening cycle and any reason that casts doubt on their positions could result in some extensive position squaring. In the meantime, the focus is first on the Bank of Canada and Reserve Bank of Australia’s interest rate decisions tomorrow. The Bank of Canada is fully expected to raise interest rates by a quarter of point to 3.75%. Comments by Governor Dodge could seal the fate for the CAD for the next few weeks - hawkish comments could send the CAD back up to its 14 year highs while dovish comments could cement a near term bottom in the Loonie. The RBA’s decision is far simpler. Having left interest rates unchanged for almost a year now, the central bank is expected to remain neutral once again.

...more...

[UpInArms]

29. Dollar eased slightly after productivity data

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BF3C0D19C%2D3459%2D46AD%2DBD8B%2DB71C2270E3D2%7D&dateid=38783%2E3667523843%2D863102143&siteid=mktw&dist=newsfinder

NEW YORK (MarketWatch) - The dollar eased slightly after a Labor Department report showed productivity in the U.S. non-farm business sector fell at a revised annual rate of 0.5% in the fourth quarter, a slight improvement from the negative 0.6% estimate made a month ago. It was the first decline in productivity since the first quarter of 2001, the quarter the recession began. The dollar had picked up fresh strength overnight, buoyed by remarks from William Poole the President of the St. Louis Fed who noted that the Fed was prepared to become even more aggressive in its rate hike campaign if future US economic data proved robust. In early trade, the dollar was up 0.2% at 117.80 yen, while the euro was down 0.8% at $1.1908.

[54anickel]

64. Stomping On Dead Bugs...(Today's Pfenning)

http://www.kitcocasey.com/displayArticle.php?id=589

Good day... Well... A rotten day and overnight session for the currencies, as the talk has shifted back to the U.S. and how many arrows Big Ben has in his rate hike quiver... Why? I would have thought this discussion was akin to stomping on a dead bug! But... And that's a big But... One that probably needs a red flag on it... This is what the market is focusing on now...

snip> ... Anyway, the market is so focused on the U.S. rate hikes, it doesn't even notice that the Fed is getting near the end, while other Central Banks are just winding up the rate hike music box!

snip>

Friday will be a Jobs Jamboree Friday, and as I look ahead, the "experts" are calling for a rise in job creation for February of 210K... Of course, you know me, I really don't care about how many jobs are created, due to the fact that these numbers are basted and baked every month by the Bureau of Labor Statistics... As I've said over and over again through the years, what we should really be focusing on is the Average Hourly Earnings, which are expected to be weaker, and the Average Weekly Hours, which is expected to remain on pace with the previous month.

OK... So now we've looked at these, what do they tell us? Ahhh, grasshopper... Come sit... The Average Hourly Earnings gives us a snapshot of future wage pressures on inflation... So... If the Avg. Hourly Earnings falls, that means workers are making less, which means there will be no wage pressures... And the Average Weekly Hours? Ahhh... Again, grasshopper, this shows us just how hard workers are having to work to make the Avg. Hourly Earnings... For February, the Avg. Weekly Hours is expected to remain at 33.8... So that means that workers are working the same hours but making less...

snip>

With the yen backing off so much, the Chinese renminbi had nowhere to go but down vs. the dollar last night... No biggie, but it does prove the point I've been making since the peg to the dollar was removed on July 21st of last year. The renminbi is allowed to move more on a daily basis vs. the Asian currencies in the basket than it can vs. the dollar... So to put pressure on the renminbi to move higher vs. the dollar, the Asian currencies must get stronger faster... And that was happening, and the renminbi was getting stronger vs. the dollar every day... But now this and the reverse is happening... Just proves my point!

The Mexican peso has been seeing a lot of selling pressure lately... This has all the makings of carry trades unwinding here, too! One would think that with oil prices remaining high, the peso would be basking in the sun... But not so... And that's what makes me think of the unwinding of carry trades...

more...

[54anickel]

71. Change is upon us

http://www.kitco.com/ind/VanEeden/mar062006.html

Longtime readers of my commentaries may recall that I have been waiting for the dollar to fall while US interest rates rise at the same time. Even though it may not be intuitive that the dollar could fall while interest rates rise, I think current events in both China and Japan are setting the stage for it to happen.

To show how significant recent announcements from both China and Japan are I am going to recap the events leading up to them. If the following is too brief, I suggest you read past commentaries on my website (www.paulvaneeden.com) for more background.

snip>

It has always been clear that China and Japan will support the US dollar only as long as it is in their interest and I have made the point that it is in their interest only while US consumption of their goods continues to grow. We have seen that US economic growth is faltering and therefore I believe we are at the end of their support of the dollar.

In December a Chinese newspaper, called The Standard, printed an article that quoted Mr. Yu Yongding, a member of the monetary policy advisory committee to the People's Bank of China, as saying that China should weaken the link between the yuan (renminbi) and the US dollar to make the exchange rate more flexible and improve the Chinese government's ability to manage their economy. Yu suggested that the weighting of the US dollar in the basket of currencies against which the renminbi is set should be reduced, thereby reducing the impact that changes in the US dollar would have on the value of the renminbi.

The next day Mr. Yu Yongding was quoted by the same newspaper as saying that Chinese firms should get ready for a strengthening of the yuan (renminbi) during the next one to two years. The "fuller the preparations, the better," he said. The same article mentions a research paper obtained by Reuters, wherein Mr. Yu Yongding suggested China could reduce the growth in its foreign reserves by running expansionary fiscal policies and investing in infrastructure and research and development.

It seems to me that China is getting ready to do exactly what I expected they would do: start selling trade dollars and investing the proceeds into the Chinese economy. But if China abandons the dollar, Japan will follow, because supporting the dollar is not possible for either China or Japan alone: it requires both of them to act in concert.

And indeed, last week we learned that Japan is considering raising interest rates. For almost ten years now Japanese interest rates have been near zero in an attempt to avoid a deflationary collapse. Such low interest rates meant little demand for Japanese bonds and hence virtually no investment demand for Japanese yen. Instead it created what is called the yen carry trade. Large investors could borrow yen at very low interest rates and invest those funds in higher yielding instruments such as US Treasuries. In the process yen are sold and dollars are bought. That keeps the yen exchange rate low relative to the dollar, especially in light of the US trade deficit with Japan.

more...too hard to cut 'n paste and still get the gist of the article.

[54anickel]

81. Can the Big-3 Central Banks Derail the "Commodity Super Cycle"?

http://www.kitco.com/ind/Dorsch/mar062006.html

Shortly after climbing to its highest level in 25-years, the Reuters Jefferies Commodity index (CRB Index) went into a nosedive in early February, and lost about 8% of its value. The sell-off in the CRB index was linked to unusual movements in Japanese yen interest rate futures (Euro-yen) in Singapore, which signaled for the first time in five years, that the Bank of Japan is prepared to tighten its money policy, and allow for higher Japanese interest rates.

The Bank of Japan’s ultra-easy money policy, combined with the super-easy policies of the European Central Bank, inflated many asset bubbles worldwide, and also igniting inflation in industrialized nations. But the BOJ’s Kiyohiko Nishimura warned on February 16th, that “Japan is no longer a sick patient and the time to stop administering morphine to the economy is getting closer.”

snip>

From a technical point of view, the CRB index appeared to be ripe for profit-taking near the 350-area, with a few technical indicators flashing an overbought condition. Schizophrenic commodity day traders quickly decided to turn their enormous paper profits into hard cash at a moment’s notice.

However, the 8% sell-off in the CRB index in the first half of February, relieved the overbought technical condition, with the Relative Strength index falling from around the 75 level to the low 40’s. At that point, buyers stepped back into the CRB index, near the key upward sloping trend-line at the 320-level. After forming a double-bottom pattern near the 320-mark, the CRB rallied 3.5% to close at 331.34 on March 3rd, accompanied by rebounds in copper, crude oil, gold and silver futures contracts, the premier leaders of the “Commodity Super Cycle”.

For the first time in five years, the big-3 central banks, the Bank of Japan, the Federal Reserve, and the European Central Bank, would be tightening their monetary policies in unison. According to futures markets in Chicago, Frankfurt, and Singapore, the big-3 central banks are expected to guide their short-term Libor rates about a half-percent higher from current levels by year’s end.

more...

[54anickel]

82. Archaeologists to establish true value of Roman silver coins

http://www.eurekalert.org/pub_releases/2006-03/uol-ate030306.php

An archaeologist at the University of Liverpool is examining more than 1,000 Roman silver coins from museums around the world in order to establish their true economic value.

Dr Matthew Ponting, from the University's School of Archaeology, Classics and Egyptology, is investigating the chemical composition of the coins to further understanding of how and where they were made. Dr Ponting believes that analysis of the coins will also shed more light on the political and economic issues of the Roman Empire.

snip>

Dr Ponting added: "By measuring the isotopes of lead in the coins it is often possible to ascertain where that metal came from. This is done by comparing the isotopic 'signature' of the silver coin, with isotopic 'signatures' of known Roman silver mining regions. In this way I hope to be able to investigate where Rome was getting its silver from."

Silver coins formed the backbone of currency in the Roman Empire. Roman emperors manipulated the silver content of the coins to solve short-term financial problems frequently caused by government overspending. For the most part, this manipulation involved the reduction of the silver content of the coinage in conjunction with a drop in weight.

Dr Ponting said: "In the 1970s a study documented the silver contents of Roman Imperial silver coins by analysing their surface. Until recently this was the principal reference for economic historians on the monetary policies of the Roman Empire.

"During the 1990s, however, historians realised that many Roman silver coins were deliberately treated to remove some of the copper from their surface, giving impure coins the appearance of being pure and disguising the debasement of the currency. Analysis of the coins' surface had therefore overestimated their silver content."

more...

[UpInArms]

23. Long Delay Refused in Abramoff Sentencing

http://www.columbian.com/news/APStories/AP03062006news10600.cfm

MIAMI (AP) -- A federal judge Monday refused to allow a lengthy delay in the sentencing of lobbyist Jack Abramoff, even though lawyers for both sides said the move could jeopardize a federal corruption investigation involving Congress and the Bush administration.

Abramoff attorney Abbe Lowell warned that the defense would disclose information about the ongoing corruption investigation to demonstrate the level of Abramoff's cooperation, something that could affect Abramoff's sentence in the fraud case.

"We will name names," Lowell said by telephone at a hearing before U.S. District Judge Paul C. Huck. "That is not a good thing for law enforcement."

The judge agreed to delay sentencing from March 16 to March 29, but he rejected a joint motion by federal prosecutors and attorneys for Abramoff and co-defendant Adam Kidan to hold off for at least 90 days.

<snip>

Huck said the government can always request a reduction in Abramoff's sentence later and that he would likely allow both Abramoff and Kidan to remain free for a reasonable amount of time after they are sentenced.

...more...

[UpInArms]

25. Skilling's `they're on to us' portrayed as sarcasm

http://www.chicagotribune.com/business/chi-0603070215mar07,1,1836993.story?coll=chi-business-hed

HOUSTON -- With former Chief Financial Officer Andrew Fastow waiting in the wings to testify, a defense lawyer in the Enron Corp. fraud trial on Monday sought to cast doubt on a former executive's dramatic claim that former Chief Executive Jeffrey Skilling fretted in 2001 that "they're on to us."

Kevin Hannon, a former Enron broadband unit executive, testified last week that Skilling made the remark when analysts criticized sales Enron made to partnerships run by Fastow.

But under cross-examination Monday by Skilling lawyer Mark Holscher, Hannon conceded it was possible Skilling was just being sarcastic because he was miffed that the boutique firm catered to short-sellers--people betting that Enron stock would fall.

Holscher asked Hannon whether it was possible Skilling was "dripping with sarcasm" when he made the statement in a May 21, 2001, meeting with other top Enron executives. "Anything's possible," Hannon replied.

Using a marker and a large sketch pad Holscher listed as many as 17 other executives who might have been at the meeting. He asked Hannon whether anyone followed up on Skilling's dramatic statement.

"Not that I'm aware of, no," Hannon answered.

...more...

Ummm... right... :sarcasm:

[UpInArms]

26. Manager bonuses rankle American Airlines pilots

http://seattlepi.nwsource.com/business/261936_airlinelabor07.html?source=rss

American Airlines pilots have dropped plans to consider changes to their contract that would boost productivity because they object to the carrier's plan to pay bonuses totaling $95.8 million to some managers.

The Allied Pilots Association board revoked authorization for the talks, which were approved in November as part of a plan to further lower costs and increase efficiency at American, the world's largest airline. American, a unit of AMR Corp., shouldn't pay the cash bonuses while it continues to lose money, the union said in a message Friday to its 13,000 members.

The dispute threatens American's effort to return to profitability and continue avoiding bankruptcy by working with its unions to increase revenue and reduce expenses. Talks to settle the bonus dispute failed, and an arbitrator will begin hearings on the issue Wednesday.

"There is a considerable busting of trust," pilot union spokesman Denis Breslin said Monday in an interview. "Nobody is willing to give the company the benefit of the doubt."

<snip>

The bonuses, tied to AMR's share performance since 2003, would make payments ranging from $2,177 for some middle managers to $1.92 million for one executive, based on AMR's closing stock price of $24.88 a share Friday. The final amount won't be determined until next month.

...more...

[UpInArms]

27. In debt, forever

http://www.chicagotribune.com/news/nationworld/chi-0603050404mar05,1,2248861.story?coll=chi-business-hed

Margo Alpert is on the 30-year plan. Every month between $500 and $600 is automatically deducted from her salary to pay off college loans. By the time the 29-year-old Chicago public-interest lawyer is in her mid-50s and thinking seriously about retirement, she will finally be free of college debt.

"It's going to be part of my life forever," Alpert said. "I don't think about it at all because it's just a fact of life."

Alpert's experience with her version of debtors' prison is not unusual in the realm of recent college graduates whose unpaid loan and expense obligations have soared in the past several years, leaving them with debts that can range from double to more than triple their annual salaries.

Because of higher tuition, steady or declining grants and state aid, and a greater dependency on loans, the average student's debt has increased by more than 50 percent over the last decade, after accounting for inflation, according to the U.S. Department of Education.

And as Congress moves to cut the budget deficit, the cost pressure on college students and those preparing to enter university is about to worsen. The era of low-cost loans is ending, and interest rates on many federal education loans are poised to leap starting July 1, because of congressional cuts, adding thousands and perhaps tens of thousands of dollars in new debt onto the long-term costs of a college education.

The rate for so-called Stafford Loans, which represent the vast majority of federal education loans, will be fixed at 6.8 percent, compared with the current variable rate range of 4.75 percent to 5.38 percent. The rate for loans taken out by parents on behalf of their children will increase from 6.1 percent to 8.5 percent.

...more...

[EuroObserver]

56. So this is what Shrub meant by "targetting education"?

:silly:

[UpInArms]

30. Retail Sales Down - Blaming Weather

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyid=2006-03-07T135622Z_01_NAT002030_RTRIDST_0_ECONOMY-RETAIL-REDBOOK-URGENT.XML

NEW YORK, March 7 (Reuters) - U.S. chain stores reported slow sales in the first week of March as heavy rain hampered retail shopping, a report said on Tuesday.

Sales at major retailers were up 2.4 percent on a year-over-year basis for the week ended March 4, following a 3.0 percent rise in the prior week, said Redbook Research, an independent company.

"The week opened softly for several merchants," Redbook said.

Sales at U.S. retailers so far in March were down 2.5 percent when compared with the same period in February, Redbook said.

...more...

I guess it was raining heavily everywhere!

[UpInArms]

31. Treasurys lower after productivity report

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BF2DDC6D8%2DCFE7%2D4AD5%2DBC27%2DBA6D950F09F3%7D&dateid=38783%2E3806748843%2D863104432&siteid=mktw&dist=newsfinder

NEW YORK (MarketWatch) - Treasurys were lower early Tuesday, after the Labor Department reiterated that productivity reiterated that productivity fell in the fourth quarter for the first time since the recession began in early 2001. The department said that productivity fell at a revised annual rate of 0.5% in the last quarter, a slight improvement from the 0.6% decrease estimated a month ago. The revisions were smaller than expected by Wall Street economists and thus could put further selling pressure on the bond market, which has been pricing in more aggressive monetary policy to combat inflationary pressures. The benchmark 10-year last was down 7/32 at 97-26/32 with a yield ($TNX 47.69, +0.31, +0.7% ) of 4.779%.

[JNelson6563]

32. Yes, the 10 yr's up 4 basis points already

Ouch.

[UpInArms]

35. Treasuries extend slide on comments by Fed's Poole

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyid=2006-03-07T141542Z_01_N07324066_RTRIDST_0_MARKETS-BONDS.XML

NEW YORK, March 7 (Reuters) - U.S. Treasury debt prices marked their fifth straight day of declines on comments by St. Louis Fed Bank President William Poole, who said the economy is on a growth trajectory worthy of the central bank's inflation-fighting attention.

The market brushed aside U.S. government data showing a rise in fourth-quarter unit labor costs and a greater-than-expected slip in productivity.

"Growing angst over Friday's non-farm payrolls report, coupled with hawkish overnight comments to Reuters from St. Louis Fed President William Poole, have teamed up to pressure bonds for a fifth consecutive day," UBS Securities said in a research note.

Poole said late on Monday that the U.S. economy has a "great deal of momentum" and the Fed may have to raise interest rates further, especially if growth exceeds expectations.

Unit labor costs, an important measure of inflation in the job market, rose 3.3 percent in the final 2005 quarter, above economists' expectations of a 3.1 percent result and an initial estimate of 3.5 percent, the government reported on Tuesday.

<snip>

"The data had no real impact. The market seems to have bottomed out," said one trader at one of Wall Street's primary dealers, referring to the market of after a five-day selling streak, the longest since mid-October of last year.

...more...

[UpInArms]

36. Treasury investors turn bearish in week - poll

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyid=2006-03-07T142730Z_01_N07336043_RTRIDST_0_FINANCIAL-TREASURIES-JPMORGAN-POLL.XML

NEW YORK, March 7 (Reuters) - More investors became bearish on Treasuries after last week's sell-off spurred by fears of rising interest rates globally, according to a poll released on Tuesday.

Investors surveyed on Monday who said they were "short" Treasuries, holding less U.S. government securities than their portfolio benchmarks, rose to 40 percent from 37 percent, J.P. Morgan Securities said.

There have been growing worries that central banks in the United States, Europe and Japan will either soon end their easy monetary policy or will lift short-term interest rates higher than what the market has been expecting.

Last week, global bond prices plummeted in reaction to stronger-than-expected U.S. economic data and hawkish comments by European Central Bank President Jean-Claude Trichet suggesting more euro zone rate hikes.

Investors have been unwinding positions and booking profits on curve-flattening trades, which were partly based on the view that central banks will increase rates modestly if at all in 2006, analysts said.

...more...

[54anickel]

44. New Game (Roach)

http://www.morganstanley.com/GEFdata/digests/20060306-mon.html#anchor0

The message from the recent sell-off in global bond markets should not be ignored. The great conundrum of unusually low real long-term interest rates may now be a thing of the past. If so, that could have profound implications for the liquidity cycle and an interest-rate-dependent global economy.

I remain convinced that central banks are always in control of the liquidity spigot. And the biggest news in close to a decade is that the Bank of Japan now appears to be on the cusp of abandoning its policy of über accommodation. In doing so, the BOJ would be following the lead of the other two major central banks in the world -- the Federal Reserve and the European Central Bank. Each of these institutions abandoned standard operating procedures for extraordinary reasons. For the Fed, it was the post-bubble deflation scare of the early 2000s. For the ECB, it was in response to the near stagnation of the European economy arising form fierce structural headwinds. And for the BOJ, it was the ultimate nightmare for any central bank -- confronting the corrosive perils of an outright deflation.

snip>

Financial markets are impatient beasts. As soon as the broad consensus of investors gets a whiff of a major change brewing in the underlying macro fundamentals, they begin to re-price securities accordingly. As such, they have little tolerance for the analytical justification of slow, or glacial, adjustments such as the coming policy change of the BOJ. The fact that we and other macro teams are in the process of bringing forward our calls for the onset of monetary policy normalization in Japan is reason to suspect that we may end up doing the same thing with respect to ZIRP. With the Japanese economic recovery gathering momentum and with inflation now “breaking out” into positive territory, investors take the old adage very seriously: They move quickly -- and ask questions later.

That message has not been lost on global bond markets in the past couple of weeks. From their recent lows on 22 February, yields on 10-year Treasuries have moved up by 16 bp, whereas those on comparable-maturity Bunds and JGBs are up 17 bp and 12 bp, respectively. While yields in all three cases remain quite low in a broader historical context, the normalization of central bank policies provides good reason to ponder whether we have now seen the secular bottom for long rates. Equally important is the possibility that the BOJ -- long the low-cost source of funding in world financial markets -- is about to change the rules on the multitude of “carry trades” still popular for yield-hungry investors. If that’s the case, a normalization of spreads in what traditionally have been the more risky segments of world financial markets -- namely, high-yield corporate credit and emerging market debt -- may also be close at hand.

snip>

The bearish bond call has been met with repeated frustrations over the past several years -- and far longer than that for the so-called “JGB short.” The problem may be traceable to focusing on the wrong issue -- inflation -- and paying too little attention to the global liquidity cycle. In that latter regard, a key shift has now occurred -- the central bank anchor of cheap money has finally been hoisted out of the waters. It was one thing for the Federal Reserve to remove its extraordinary accommodation, but it’s another matter altogether for the Bank of Japan to begin implementing its exit strategy. It’s a new game for the global liquidity cycle -- and possibly a new game as well for real long-term interest rates and an asset-dependent global economy.

more...

So, Poole the tool keeps talking up rates as they close the curtain around Chopper Ben's printing press (M3)... New game indeed!

[UpInArms]

33. pre-opening blather

09:15 am : S&P futures vs fair value: -2.8. Nasdaq futures vs fair value: -3.5.

09:01 am : S&P futures vs fair value: -4.0. Nasdaq futures vs fair value: -4.0. Futures trade is still suggesting that the major indices will begin the day on negative turf. Along with rising Treasury yields and the Texas Instruments (TXN) effect, weakness in foreign markets is contributing to the early sentiment. Asian markets closed lower, with Japan's Nikkei down 1.1% and China's Hang Seng off 1.3%. European markets are also trading lower, led by a 1% decline in the British FTSE 100.

08:32 am : S&P futures vs fair value: -2.8. Nasdaq futures vs fair value: -2.0. The cash market remains poised to open lower. Interest rates and Texas Instruments (TXN) continue to be the primary factors behind the bearish bias this morning. The recently released Q4 Productivity report reflected a 0.5% decline in January, versus the 0.1% decrease that economists had estimated. The other piece of data on today's economic calendar is the January Consumer Credit report, which is due out at 3:00 ET. As both are dated, neither report is expected to have any real influence on trade today.

07:54 am : S&P futures vs fair value: -3.1. Nasdaq futures vs fair value: -2.0. Futures trade is suggesting a downside open for the cash market. Interest rates are rising on a number of fronts, and investors continue to be bothered by those increases this morning. At this point, the benchmark 10-year note is down nine ticks and up to a 4.79% yield. A good - but not great - mid-quarter update from Texas Instruments (TXN) is also helping to discourage buyers. Traders are locking in some profits after the company issued in-line Q1 EPS guidance and tightened its revenue guidance last night.

[ozymandius]

37. Markets are open for giving you the bidness.

9:42
Dow 10,936.03 -22.56 (-0.21%)
Nasdaq 2,271.50 -14.53 (-0.64%)
S&P 500 1,273.73 -4.53 (-0.35%)
10-Yr Bond 47.60 +0.22 (+0.46%)
NYSE Volume 117,183,000
Nasdaq Volume 157,729,000

09:35 am : As expected, the equity market started the day below the unchanged mark. Interest rates are rising on a number of fronts, and are in the spotlight again today. Yesterday, the market fell as the yield on the benchmark 10-year note hit 4.74%. This morning, it's at 4.76%. Our expectation that rising interest rates would keep the stock market in check prompted our market view change to Neutral last month. Rates are likely to go higher, and the market anticipates two, and possibly three, more hikes to the Fed funds rate. A separate factor behind this morning's bearish bias is Texas Instruments (TXN). The company delivered a good - but not great - mid-quarter update that disappointed the market and has catalyzed some profit-taking. DJ30 -18.81 NASDAQ -8.35 SP500 -3.01

[UpInArms]

40. April Gold @ $555.60 oz - May Silver @ $10.06 oz

9:47 AM ET 3/7/06 APRIL GOLD FALLS $1.20 TO $555.60/OZ IN MORNING TRADING

9:47 AM ET 3/7/06 MAY SILVER CLIMBS 3.5C TO $10.06/OZ IN NY

[EuroObserver]

80. Did we miss MOGAMBO this week? Here he is:

http://www.dailyreckoning.com/Issues/2006/DR022006.thml
...
Speaking of ETFs, Adam Hamilton of Zeal Intelligence implies that the recent downdraft in gold may have something to do with the gold exchange traded funds. Beyond that, he notes that there are lots of other gold ETFs around the world, and "Together all these ETFs are creating conduits for global mainstream stock investors to take a small stake in a gold-tracking asset. Small stakes times hundreds of millions of investors equals enormous amounts of capital."

And small-time guys, it seems to me, are all out to make a lot of money quickly, as they don't have much money to invest, their other stupid retirement plans (stocks, bonds, mutual funds, real estate, Social Security) don't seem to be working out, and time is getting shorter and shorter. It's "desperate times calling for desperate measures," especially now that they are drowning in oceans of debt of all kinds. And if I don't get some big money fast, then I am going to be in a lot of financial trouble.

So, we small-timers are dashing in and out of gold like crazed day-traders, trying to make that fast buck, churning up the markets and creating wild volatility. And with volatility like this, it will bring out the other small-time fish looking for an easy, fast buck, too. That will bring out the sharks, looking to eat the little fish.

In the middle of it all, are the central banks of the world that have either:
1.) Sold some or all of their gold
2.) Leased out some or all of their gold
3.) Both, and are horrified that gold is rising in price, which demonstrates, for all to see, that the investors of the world have lost faith in the management of the economy by the idiot banks.

And the central banks are in that swamp with the bullion banks, which borrowed the gold and sold the gold. They are still officially promising that they will return the gold to the central banks from which they borrowed it, good as new. But with gold soaring in price, that is turning out to be an impossibility. And because they pay less than 1% a year on the borrowed gold, which they sold and then used the money to buy interest-paying bonds, with rising interest rates, they are getting doubly killed! Hahaha!

Each time the price of gold goes up by another dollar, it increases the losses of the bullion banks, and every time that interest bonds prices fall by another fraction of a percent, it also increases their losses, and makes it evermore likely that the bullion banks are going to go bankrupt and central banks are going to get stiffed. So, both of these corrupt agencies want gold to go down in price, and you can bet your sweet patootie that they are doing everything they can to get gold back down in price, no matter how corrupt, slimy or illegal.

But the Mogambo is not worried that the price of gold will go down, and neither are the Chinese, as we read in the China Daily, "China is planning to set up a gold investment fund, hoping to capitalize on the surging price of the metal."

Even as I watch this gut-wrenching fall in the price of gold, I really have to keep myself from laughing at how cheap gold and silver are, and how people who are buying them now are going to make, probably, the biggest capital gain in the history of investing, so much so that, years from now, the stories of how much money was made by those investing in gold and silver and commodities will be urban legends.

...more...

[EuroObserver]

85. Aha! Apologies for posting old stuff

(not sure now if the mix-up was mine or Daily Reckoning's: links now otherwise (mis)lead).

...Keeping eyes peeled for the Mogambo's crazy right-wing weird way of making a hell of a lot of sense out of all this nonsense anyway...

[54anickel]

93. The nut usually comes out on Wed, sometimes he's a day late, rarely

but occassionally a day early. I don't think he's got a calendar in the bunker, so when it looks like the matta is gonna hit the fan he's rather unpredictable. :evilgrin:

Tace has been posting a link here to his own site lately. I usually watch for Mogambo at Kitco or 321gold.

[UpInArms]

42. U.S. Taps Exchange, Pension Funds as Debt Limit Looms

http://www.bloomberg.com/apps/news?pid=10000103&sid=amz.HoNLRL_0&refer=us

March 6 (Bloomberg) -- The U.S. Treasury today took steps to avoid slamming into the government's legal borrowing limit and to make sure the sale of a 10-year note goes ahead this week.

Treasury Secretary John Snow authorized the government to use the $15 billion available in the exchange stabilization fund on March 3 and issued a ``debt issuance suspension period'' to temporarily stop investments in the Civil Service Retirement and Disability Fund. The Treasury also redeemed some of the fund's current investments.

Today's actions by the Treasury provide ``only a few days of additional borrowing capacity, which we expect will be exhausted by mid-March,'' Snow said in a letter to House Speaker Dennis Hastert. ``Treasury has now taken all prudent and legal actions to avoid reaching the statutory debt limit.''

The moves were the second Treasury has taken in the last month to stay below the debt ceiling. They will ensure the Treasury can auction and settle the 10-year-notes scheduled to be sold this week and allow government operations to continue through mid-March. The Treasury said today it will auction $8 billion in 9 year-11 month 4 1/2 percent notes on March 9, and $18 billion in four-week bills at tomorrow's sale of the securities.

<snip>

This is the fourth time the administration of President George W. Bush has asked lawmakers to raise the debt limit. Congress complied with the last request, in November 2004, only after the Treasury was forced to delay auctioning bills and notes and move money among government pension funds.

Since Bush took office in 2001, the federal budget has gone from four years of surpluses, the longest such run since before the Great Depression, (here are the excuses for the complete mismanagement of our country) to deficits brought on by a recession, tax cuts, the Sept. 11 attacks, wars in Afghanistan and Iraq and Gulf Coast hurricane damage.

...more...

[UpInArms]

43. 10:06 EST No Bad News for that DOW!

Dow 10,961.72 +3.13 (+0.03%)
Nasdaq 2,275.88 -10.15 (-0.44%)
S&P 500 1,275.58 -2.68 (-0.21%)
10-Yr Bond 4.754 +0.16 (+0.34%)

NYSE Volume 307,572,000
Nasdaq Volume 343,000,000

[UpInArms]

48. 10:24 EST Faeries aim to recapture 11K

Dow 10,984.53 +25.94 (+0.24%)
Nasdaq 2,277.44 -8.59 (-0.38%)
S&P 500 1,276.96 -1.30 (-0.10%)
10-Yr Bond 4.754 +0.16 (+0.34%)

NYSE Volume 428,568,000
Nasdaq Volume 448,261,000

[UpInArms]

47. Levi Strauss to close Little Rock center - 340 jobs going "poof"

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyid=2006-03-07T151913Z_01_WEN2295_RTRIDST_0_TEXTILES-LEVISTRAUSS-URGENT.XML

NEW YORK, March 7 (Reuters) - Jeans maker Levi Strauss & Co. said on Tuesday it intends to close its distribution center in Little Rock, Arkansas, before the end of 2006.

The closure would eliminate the jobs of about 340 workers, more than a quarter of whom may be eligible for early retirement under company policy.

[OrangeCountyDemocrat]

52. Have I Become A repub?

Historically, aren't Democrats the party that likes throwing money at problems? At spending beyond their means, driving up deficits, debt, credit card bills, etc.? Aren't they supposed to be less fiscally responsible?

In a normal world, wouldn't the repubs be more "Conservative?" Concerned about exceeding the Debt Limit. Bothered that people are using their limited money buying things that are wasteful?

I get concerned about being in debt. About spending beyond my means. I think about what's going to happen in the future. I see it as unwise to overspend on buying a big house, when it would mean that I go deep into debt. I cringe at the thought of a 40-year mortgage that I wouldn't pay off until I was 80.

So....with these "conservative" habits, how can I rightly call myself a free spending liberal?

[Roland99]

54. "Fiscally Responsible"...not "Fiscally Conservative"

[AnneD]

I often reflect on this question...

I am socially liberal but fiscally conservative. Above all, I hate waste. I can justify spending money at the front of the problem as opposed to the back end because solving the problem at the back end is always more expensive. It makes sense to spend in preK for disadvantaged and premies than for tutoring and correctional facilities. I can justify paying for research and tuition to keep our technology and work force cutting edge.
I can see taxes used for infrastructure (roads, dams, levees and bridges), social security, and universal health care. I believe in a progressive tax, after all you made your money in this country, and since we provided you the opportunity, you shouldn't begrudge helping others and giving them the same chance you had.
How much more competitive could we be if health care costs were not a factor for businesses. I can see tax breaks for companies that are here in this country. It just makes sense.
What doesn't make sense is pumping tones of money into the military (what's this with Army, Marines, and Navy having their OWN air corp). We are good at the gee whiz stuff but we suck at doing the day to day things, and that is the things that gives a quality life...the day to day things.

[Spazito]

84. I totally agree, I am liberal because I believe in fiscal responsibility

Social programs can't be supported without funds to do so so being fiscally responsible allows money to go to support social programs. Canada has a surplus which allows it to add money to social programs while balancing the budget. It only makes sense to me!

[AnneD]

65. Ooops

don't know how I double posted:blush:

I liked the term fiscally responsible. I believe in being a good steward, wheither of money, enviroment, the poor.

[jwirr]

55. May be the wrong site but I have a question.

Isn't dual citizenship illegal in the United States? If that is correct then wouldn't multinational corporations be ineligible for the special rights under their corporate/citizen rights laws? Why has nobody taken this to SCOTUS?

[AnneD]

74. No

dual citizenship is allowed in some instances for a period of time (unless that was recently changed). You just couldn't serve in another country's military. Had a friend with dual American Isralie citizenship that got busted on that. Friend of mine was a military brat boen in Germany. Held dual citizenship until 18yo. India just changed their laws to allow dual citizenship and to allow ethnic Indians of foreign birth to request Indian citizenship. My friend that left Russia had to hide her pregnancy otherwise they would have charged more of an exit tax. Also, she told me Russia would claim up to her great grandchildren as citizens (still have the people are serfs mentality).

[54anickel]

86. A more important question is how did corporations get personhood

rights of the Constitution?

UpInArms has a great link for that, hopefully she'll catch this and post it. Meanwhile I'll try to find it again.


On edit:

Here's one

http://www.iiipublishing.com/afd/santaclara.html

[jwirr]

100. I think they got personhood when we thought they wanted

the same kind of country we do. How dumb we were.

[UpInArms]

57. ABSOLUTE POWER CORRUPTS ABSOLUTELY Presidential Executive Orders

They took away our liberties because we said we were afraid.

Here are just a few Executive Orders that would suspend the Constitution and the Bill of Rights. These Executive Orders can be enacted by the stroke of a Presidential pen:

EXECUTIVE ORDER 10990 allows the government to take over all modes of transportation and control of highways and seaports.

EXECUTIVE ORDER 10995 allows the government to seize and control the communication media. Additionally, the USA Patriot Act contains a Sedition Clause which prohibits anti-government speech while the nation is at war. This clause is not enforced at this time, at least publically.

EXECUTIVE ORDER 10997 allows the government to take over all electrical power, gas, petroleum, fuels and minerals.

EXECUTIVE ORDER 10998 allows the government to take over all food resources and farms.

EXECUTIVE ORDER 11000 allows the government to mobilize civilians into work brigades under government supervision.

EXECUTIVE ORDER 11001 allows the government to take over all health, education and welfare functions.

EXECUTIVE ORDER 11002 designates the Postmaster General to operate a national registration of all persons.

EXECUTIVE ORDER 11003 allows the government to take over all airports and aircraft, including commercial aircraft.

EXECUTIVE ORDER 11004 allows the Housing and Finance Authority to relocate communities, build new housing with public funds, designate areas to be abandoned, and establish new locations for populations.

EXECUTIVE ORDER 11005 allows the government to take over railroads, inland waterways and public storage facilities.

EXECUTIVE ORDER 11051 specifies the responsibility of the Office of Emergency Planning and gives authorization to put all Executive Orders into effect in times of increased international tensions and economic or financial crisis.

EXECUTIVE ORDER 11310 grants authority to the Department of Justice to enforce the plans set out in Executive Orders, to institute industrial support, to establish judicial and legislative liaison, to control all aliens, to operate penal and correctional institutions, and to advise and assist the President.

Without Congressional approval, the President has the power to transfer whole populations to any part of the country, the power to suspend the Press and to force a national registration of all persons.

The President has the power to suspend the Constitution and the Bill of Rights in a real or perceived emergency.

For an administration who worked so hard to gain complete control over both houses of Congress and all branches of government, why would they step away from that, peacefully, in 2008, when all it would take is a new "terror attack" to declare Martial Law and rule the whole country dictatorially?

God Bless America, we need it more than ever.

...more at link...

[sheelz]

69. Everybody needs to see this!

Please make a separate thread for GD. Thanks!

[UpInArms]

72. Thanks and welcome to the SMW sheelz!

I did start a thread in GD as you asked - but feel free to come and add your insights and thoughts to the SMW anytime :D

:hi:

And also, welcome to DU!

[Roland99]

78. And make sure to note the President who signed each order (JFK is on there

[54anickel]

75. Oh sh*t, times nicely with the Newt article over in LBN

Gingrich tells Rumsfeld to dig in for 70-year war

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2150265

http://feeds.bignewsnetwork.com/?sid=cb46d45dd5fc3d05

[AnneD]

79. You know....

when I try to tell folks outside the DU, they think I am the one that has gone bat shit crazy. Like I could really make this stuff up.

[UpInArms]

58. Bend Over Alert:Treasury calls for reduced claims on federal pension corp.

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B09D36C94%2D2A91%2D47BA%2DB1E0%2D8CC20F01E71F%7D&dateid=38783%2E5001620833%2D863124009&siteid=mktw&dist=newsfinder

WASHINGTON (MarketWatch) -- Congressional negotiators should reduce expected claims on the federal Pension Benefit Guaranty Corp., a top Treasury official said Tuesday. In a prepared speech, Assistant Treasury Secretary Mark Warshawsky said current congressional pension reform proposals are "inadequate." He urged lawmakers to reduce claims on the PBGC over the next 10 years and to improve disclosure about plans' status to workers. The PBGC is currently running a $23 billion deficit, he said.

[54anickel]

60. Is Antitrust No Longer the Issue?

http://www.nytimes.com/2006/03/07/politics/07policy.html?_r=2&oref=slogin&oref=slogin

WASHINGTON, March 6 — As head of the Federal Communications Commission during the Clinton administration, Reed E. Hundt killed talks about a possible merger in 1997 when he said that a proposed deal between AT&T and SBC would be "unthinkable" under antitrust laws.

Last year those two companies combined with little resistance. And on Monday Mr. Hundt said that AT&T's proposal to buy BellSouth for $67 billion was "eminently thinkable," and that if he were still at the commission, "I would bless the deal."

His statement was a sign of how far the regulatory climate, as well as the marketplace, has traveled in less than a decade, as the cable and phone industries have gotten into each other's businesses and new forms of phone service have grown.

While government officials and industry lobbyists say the AT&T-BellSouth deal faces few regulatory obstacles, those same changes in the marketplace may bring different political headwinds.

more...

[UpInArms]

61. Bayer subpoenaed by DOJ for price fixing

http://www.businessweek.com/ap/financialnews/D8G6RR900.htm?campaign_id=rss_full_topix_bwdaily&chan=db

MAR. 7 12:06 P.M. ET Bayer AG has been subpoenaed by the U.S. Justice Department seeking information about its plastics unit, MaterialScience, the company revealed in a filing with the U.S. Securities and Exchange Commission.

The company said the Justice Department sought information related to its manufacture and sale of polyurethane products called MDI and TDI, along with other products. According to the filing, made Monday in Washington, Bayer said it received the subpoena on Feb. 16.

<snip>

Bayer informed the SEC it "has been named, among others, as a defendant in multiple putative class action lawsuits which have been consolidated in federal district court in Kansas, involving allegations of price fixing of, inter alia (among other things), polyether polyols and certain other precursors for urethane end-use products."

<snip>

Bayer's MaterialScience posted sales of 10.7 billion euros ($12.75 billion) in 2005, up 24 percent from 2004. The polyurethanes division of MaterialScience, which make TDI and MDI, reported growth of 24 percent to 6.61 billion euros ($7.87 billion) in revenue last year.

...more...

[UpInArms]

62. Fmr IL GOP Gov. Ryan 'sold his office,' prosecutors tell jurors

http://www.stltoday.com/stltoday/news/stories.nsf/illinoisstatenews/story/51C25BE09E9B58408625712A001FEF42?OpenDocument

Federal prosecutors ripped into former Gov. George Ryan on Monday as "a walking conflict of interest," saying he presided over a dozen years of payoffs, fraud and cover-ups so extensive that "he might as well have put up a 'For Sale' sign over his office."

"You've heard of the 12 days of Christmas? This was 12 years of Christmas for Mr. Ryan, his family and his friends," Assistant U.S. Attorney Joel R. Levin told the jury as closing arguments got under way in Ryan's racketeering and fraud trial after five months of testimony.

Levin accused Ryan of dining out at downtown Chicago restaurants using campaign funds raised through the sale of drivers licenses when he was secretary of state, and vacationing free in Jamaica, Palm Springs and Cancun while fixing state leases and contracts for his hosts.

"He was a walking conflict of interest," Assistant U.S. Attorney Laurie J. Barsella said as Ryan, his wife, his son and daughters looked on expressionless.

<snip>

Ryan, 72, and co-defendant Larry Warner, 67, are charged in a 22-count indictment with racketeering, mail fraud and other offenses. It says that as secretary of state for eight years and governor starting in 1999 Ryan steered leases and contracts to Warner and other insiders.

Ryan was rewarded in return with lavish tropical vacations and valuables ranging from $145,000 in loans for his brother's floundering business to a free golf bag, prosecutors say.

...more...

[UpInArms]

63. 12:47 EST heading south

Dow 10,948.51 -10.08 (-0.09%)
Nasdaq 2,266.96 -19.07 (-0.83%)
S&P 500 1,273.48 -4.78 (-0.37%)
10-Yr Bond 4.744 +0.06 (+0.13%)

NYSE Volume 1,127,341,000
Nasdaq Volume 1,027,070,000

12:30 pm : Sideways trade persists. Bonds have similarly stood relatively static after recovering some ground. While bond traders are taking a selling break, the yield on the 10-year is still at 4.74% and at a 20-month high. Interestingly, the Financial sector continues to outperform in spite of the Treasury action, and despite the fact that rates are rising on a number of fronts. Additionally, the yield curve remains inverted. That sector is up 0.2% today, with banks demonstrating relative strength. That sector accounts for over a fifth of the S&P 500. As such, its positive stance is helping to limit the broader market's decline today. Getting back to the bond market, recovery efforts will likely be kept in check ahead of Bernanke's appearance tomorrow and ahead of Friday's employment report.DJ30 +2.49 NASDAQ -15.61 SP500 -3.26 NASDAQ Dec/Adv/Vol 1950/925/927.6 mln NYSE Dec/Adv/Vol 2219/889/705.2 mln

12:00 pm : Heading into the lunch hour, the equity market is trading in mixed fashion. The indices remain tightly range-bound.

There are two main factors weighing upon trade. First, interest rates are rising on a number of fronts and raising a host of concerns. The benchmark 10-year note has been the focal point, as it is creating angst about higher mortgage rates leading to a deceleration in consumer spending. Yesterday, the market dropped as that note jumped to a 4.74% yield. Treasuries have staged somewhat of a recovery today, but the fact that the 10-year's yield is still at a 20-month high remains. That market continues to face technical, supply, and economic data related issues that will support yields. Our expectation that rising interest rates would keep the stock market in check prompted our market view change to Neutral last month. Rates are likely to go higher, and the market anticipates two, and possibly three, more hikes to the Fed funds rate.

Second, Texas Instruments (TXN 31.25 -1.08) delivered a mid-quarter update that disappointed the market. The company narrowed guidance with an upward bias, and its EPS and revenue estimates were in-line with current consensus estimates. But with shares gaining almost 9.0% over the last week, expectations were running high. Traders have found reason to secure some profits across the semiconductor industry. In our view, TI's update indicates continued healthy industry trends, and the company is well-positioned to benefit from growth trends in key product areas. Qualcomm (QCOM 48.11 +0.87) further validated our Overweight rating on the Tech sector today, which is predicated on a theme of "everything digital, everything portable." Citing better than expected demand, the company raised guidance, and it also raised its quarterly dividend 33%. On a related note, Sprint Nextel (S 24.79 -0.51) reiterated its 2006 financial targets. It's not done much for the Telecom sector (-2.0%) today, though, which is facing some profit-taking after yesterday's run.

After falling more than 2% yesterday, the price of crude extends its decline ahead of what is expected to be OPEC's decision tomorrow to maintain current output levels. Oil is now down 1.7% to $61.40 per barrel. The Energy sector, as a result, levies a 1.0% loss that weighs heavily upon the broader market. Despite bullish comments from Chevron (CVX 55.43 -0.42), which is conducting an analyst meeting, the entire sector is trending lower. A UBS downgrade on the oil tanker industry isn't helping things.

On the other side of the aisle, some strength in industrial stocks is helping to support the Dow, and there are pockets of relative strength in some of the more defensive areas of the market. HMOs are helping the Healthcare sector (+0.2%) stay afloat, and food and drug retailers are supporting Consumer Staples (+0.5%). Overall, though, the stock market is finding it difficult to sustain upward momentum in light of the interest rate environment.DJ30 +15.05 NASDAQ -13.08 SP500 -1.90 NASDAQ Dec/Adv/Vol 1954/897/836.8 mln NYSE Dec/Adv/Vol 2272/785/618.9 mln

[UpInArms]

66. Housing cooling off; could chill economy

http://www.mtstandard.com/articles/2006/03/07/featuresbusiness/hjjdjgjcjcfbhi.txt

DALLAS — The five-year housing boom is indeed over, judging from growing statistical evidence and the performance of some of the nation’s leading builders, and the slowdown is already rippling through the economy.

In the last week, the Commerce Department reported that January sales of new single-family homes fell 5 percent — the fourth decline in seven months — and the backlog of unsold new homes hit a record. And the National Association of Realtors said used home sales slipped 2.8 percent in January, the fourth straight drop and 5 percent below January 2005.

Builders also reported a few hiccups. Upscale Toll Brothers Inc. said signed contracts in the November-January period fell 21 percent from a year ago, and KB Home reported more buyers backing out of contracts.

<snip>

David Seiders, chief economist for the National Association of Home Builders, said California, Las Vegas, Florida and the Washington, D.C., area ‘‘have the largest potential for a price slowdown.’’

The rising prices in those markets were fed by speculators who bought homes intending to ‘‘flip’’ or sell them for a quick profit, Seiders said. ‘‘The biggest fear I have is investor-owned units coming back on the market in large numbers,’’ he said

...more at link...

[ozymandius]

67. 12:55

Dow 10,946.27 -12.32 (-0.11%)
Nasdaq 2,266.48 -19.55 (-0.86%)
S&P 500 1,273.30 -4.96 (-0.39%)
10-Yr Bond 47.44 +0.06 (+0.13%)
NYSE Volume 1,165,527,000
Nasdaq Volume 1,061,355,000

12:30 pm : Sideways trade persists. Bonds have similarly stood relatively static after recovering some ground. While bond traders are taking a selling break, the yield on the 10-year is still at 4.74% and at a 20-month high. Interestingly, the Financial sector continues to outperform in spite of the Treasury action, and despite the fact that rates are rising on a number of fronts. Additionally, the yield curve remains inverted. That sector is up 0.2% today, with banks demonstrating relative strength. That sector accounts for over a fifth of the S&P 500. As such, its positive stance is helping to limit the broader market's decline today. Getting back to the bond market, recovery efforts will likely be kept in check ahead of Bernanke's appearance tomorrow and ahead of Friday's employment report.DJ30 +2.49 NASDAQ -15.61 SP500 -3.26 NASDAQ Dec/Adv/Vol 1950/925/927.6 mln NYSE Dec/Adv/Vol 2219/889/705.2 mln

[UpInArms]

68. Ex-Enron CFO (Fastow) says believed he was "hero"

http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-03-07T174924Z_01_N07367147_RTRIDST_0_BUSINESSPRO-ENRON-TRIAL-FASTOW-DC.XML

HOUSTON (Reuters) - Former Enron Corp. chief financial officer Andrew Fastow, the financial mastermind of the energy trader's most illicit deals, testified on Tuesday he believed he was a hero by helping the company inflate profits.

<snip>

"I thought I was being a hero for Enron," Fastow calmly said in a steady voice. "At the time, I thought I was helping myself and helping Enron to make its numbers."

<snip>

But Fastow said the pair approved the off-the-books partnerships he managed and were well aware they were used to hide billions of dollars of debt.

Fastow said a modestly sized $16 million partnership he initially created to help Enron manipulate its earnings was replicated on a much larger scale at Skilling's urging, and eventually raised $386 million from investors to buy Enron assets.

"He said to me 'Get as much of that juice as you can,"' Fastow testified. "The juice was the equity, but we were using the juice to increase earnings of Enron Corp. so we could report the numbers we wanted to report."

...more...

[Roland99]

76. Good grief! A "hero"?? And he *knew* he was hiding billions of debt!

A "hero"??


Good grief these people are batshit insane!

[EuroObserver]

70. Cheney Alert: IRAN FACES "MEANINGFUL CONSEQUENCES"

DU thread: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2150305
Reuters piece: http://today.reuters.co.uk/news/newsArticle.aspx?type=worldNews&storyID=2006-03-07T172554Z_01_N05192128_RTRUKOC_0_UK-NUCLEAR-IRAN-USA.xml

[EuroObserver]

87. Russia denies Iran atom offer

http://today.reuters.co.uk/news/newsArticle.aspx?type=worldNews&storyID=2006-03-07T195721Z_01_RON537891_RTRUKOC_0_UK-NUCLEAR-IRAN.xml

Tue Mar 7, 2006 7:57 PM GMT VIENNA (Reuters) - Russia on Tuesday backed away from what EU diplomats said was a proposal to let Iran do some atomic research if it agreed to refrain from enriching uranium on an industrial scale for 7-9 years.

Russia abandoned the informal proposal, aimed at finding a compromise to the crisis over Iran's nuclear programme, after Western rejection of the idea.

The United States and the European Union want Iran to shelve all work to enrich uranium because of suspicions that Tehran is secretly trying to make nuclear weapons.

U.S. Vice President Dick Cheney said on Tuesday that Iran would be stopped from getting atomic bombs and faced "meaningful consequences" if it persists in defying calls to stop nuclear work which could lead to weapons.

In defying calls to halt all enrichment-related work, Iran seems to be counting on divisions in the U.N. Security Council over whether to resort to sanctions mooted by the United States.

Russian Foreign Minister Sergei Lavrov denied after talks with U.S. Secretary of State Condoleezza Rice that he had made a new proposal to defuse a crisis over Iran's nuclear aspirations that the Security Council may soon tackle.

"There is no compromise new proposal," Lavrov said at a news conference with Rice, who added: "The Russians did not tell us of any new proposal ..."

EU diplomats said Russian officials informally raised the idea of a 7-9 year moratorium during consultations over the past week. U.S., British, French and German rejection came swiftly when word of the offer leaked on Tuesday.

"The Russians explored this idea with us," said a diplomat, who asked not to be identified, from one of the three EU states - Germany, France and Britain - working on the Iran issue, the so-called EU3.

The diplomat said when Lavrov "realised the EU3 and U.S. would not accept its elements, he decided to deny it to save face".

RUSSIA, WEST SHARED GOAL

In Moscow, a senior Kremlin aide said Russia shared the West's goal of keeping bomb-grade nuclear technology out of Iran but acknowledged it might be considering different approaches.

"There are divergences ... but the goal is a single one - that Iran should be a predictable partner and there is no threat of proliferation of weapons of mass destruction," Sergei Prikhodko told RIA Novosti news agency.

...more...

[54anickel]

88. Ya know, I really don't know what to make of all this crap anymore.

Seems the story changes hourly. Almost like watching the old Abbott and Costello "Who's on First" skit.

edit to add: http://www.phoenix5.org/humor/WhoOnFirst.html

[Roland99]

90. Disaster in the making (in a nutshell)

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=364&topic_id=598209&mesg_id=598209

[54anickel]

91. Thanks Roland99. I'll have to swing back to that thread a bit later

tonight when I have more time to check out all of the links. Looks like you've been busy!

[Roland99]

92. Yeah...I need to put that up on the blog (can't do that from work)

;)


Wish I had a job where all I had to do was research. I seem made for this kinda stuff. ;)

[AnneD]

95. Me too

cut my teeth on BCCI. Did the savings and loan scandle the old fashion way. One day, when I retire.......

[Roland99]

97. Retire? I wish

At my rate, I'll be greeting you at WalMart in the day and handing you your fries at night.

[UpInArms]

83. 2:25 EST Faeries have no Rah! Rah! Siss! Boom! Bah!

Dow 10,947.61 -10.98 (-0.10%)
Nasdaq 2,263.44 -22.59 (-0.99%)
S&P 500 1,272.68 -5.58 (-0.44%)
10-Yr Bond 4.740 +0.02 (+0.04%)

NYSE Volume 1,559,793,000
Nasdaq Volume 1,396,495,000

1:55 pm : Since the last update, little has changed within either the equity or Treasury markets. One of the stock market's biggest impediments continues to be the Energy sector (-1.3%). Extending yesterday's sharp pullback, futures contracts for April delivery are now 1.4% lower and trading at $61.55 per barrel. The catalyst for the sell-off has been expectations for OPEC to announce sustained output levels in Vienna tomorrow. Yesterday, several of the cartel's ministers made assertions that have led the market to believe production will not be cut. Other prices are down across the energy complex. Unleaded gas has shed about 3.5%, and heating oil is about 3.0% lower. Natural gas has rebounded from a nine-month low, however. DJ30 -4.90 NASDAQ -19.82 SP500 -4.45 NASDAQ Dec/Adv/Vol 2127/817/1.23 bln NYSE Dec/Adv/Vol 2448/712/949.1 mln

1:30 pm : The Treasury market has recently fallen back below the unchanged mark. The 10-year is now down one tick and back up to a 4.76% yield. As stock traders continue to watch the bond market, and the 10-year note in particular, selling continues. The Consumer Staples sector is the only one that has managed to maintain positive footing all day. PG, BUD, and CLX are some of its brightest spots. Another pocket of relative strength today has been the managed care industry. We have recently upped our rating on the Healthcare sector to Overweight from Market Weight, as we think investors will put a premium on higher quality, defensive stocks with predictable earnings given decelerating earnings growth and consumer spending concerns. In the sector, we prefer HMOs. DJ30 -20.01 NASDAQ -21.21 SP500 -5.62 NASDAQ Dec/Adv/Vol 2145/781/1.17 bln NYSE Dec/Adv/Vol 2459/697/895.9 mln

[Roland99]

89. Markets provide mexed missages for the ownership society

DJIA 10,980.70 +22.10
Nasdaq 2,268.38 -17.65
S&P 500 1,275.88 -2.38
Russell 2000 721.06 -10.10
CBOE Volatility 12.66 -0.08
30 Yr Bond 4.72 0.00
10 Yr Bond 4.74 0.00

[ozymandius]

94. at the close

Dow 10,980.69 +22.10 (+0.20%)
Nasdaq 2,268.38 -17.65 (-0.77%)
S&P 500 1,275.88 -2.38 (-0.19%)
10-Yr Bond 47.36 -0.02 (-0.04%)
NYSE Volume 2,268,005,000
Nasdaq Volume 1,937,654,000

4:20 pm : For most of the day, the stock market traded in mixed fashion and within a relatively narrow range. The Dow managed to close with a modest gain, but the S&P and Nasdaq did not fare as well.

There were two primary factors behind today's bearish bias. First, interest rates are rising on a number of fronts, and they are raising a host of concerns. As it's creating anxiety over higher mortgage rates causing a deceleration in consumer spending, the benchmark 10-year note has occupied the spotlight. Yesterday, the market dropped as that note jumped to a 4.74% yield. Bond sellers took somewhat of a breather and Treasuries recovered some ground today, but the fact that the 10-year's yield is still at a 20-month high remains. Due to our expectation that rising interest rates will keep the stock market's upward momentum in-check, we modified our market view to Neutral last month. Interest rates are likely to head higher, and the market now foresees two - and possibly three - more hikes to the Fed funds rate.

Texas Instruments (TXN 31.28 -1.05) was the second factor. With its mid-quarter update, the chip bellwether disappointed the market. TI narrowed its guidance with an upward bias, and its EPS and revenue estimates were in-line with current consensus estimates. But with shares gaining almost 9.0% over the last week, expectations had been running high. Its disappointment relative to expectations gave investors a reason to take profits across the tech board. Semiconductors weighed particularly heavily on the sector and on the Nasdaq. TI's update, in our view, evidenced healthy industry trends, and we feel that the company is well-positioned to benefit from growth trends in key product areas. Our Overweight rating on the Tech sector is predicated on a theme of "everything digital, everything portable," and Qualcomm (QCOM 47.86 +0.62) further validated that today. Crediting better than expected demand, the company upped its guidance. Qualcomm also hiked its quarterly dividend 33%. On a related note, Sprint Nextel (S 24.89 -0.41) reaffirmed its 2006 financial targets. That news appeared to be largely overlooked, however, as traders focused on securing some of the Telecom sector's (-1.6%) recent, sizeable gains.

In anticipation of what is expected to be OPEC's decision tomorrow to maintain current levels of production, crude extended its decline and dropped 1.5%. Prices across the energy complex were lower. On a side note, natural gas did recover from its nine-month low. As a result of supply expectations and energy price action, the Energy sector took a hit. Its 1.2% loss weighed heavily upon the broader market. Chevron's (CVX 55.32 -0.53) comments during its analyst day were generally bullish for the oil services industry, but were overshadowed by the impending OPEC meeting and weekly crude inventory report. A UBS downgrade on the oil tanker industry did not help Energy's situation today. Commodities across the board were weak, and also sparked selling across the Materials sector (-0.9%).

A jump in General Motors (GM 20.28 +0.47) helped take the Dow higher this afternoon. The company announced a restructured employee benefits plan that is expected to reduce its pre-tax pension expense by about $420 million in 2007. Despite the bearish bias, there were some other pockets of relative strength. More defensive areas of the market received some added attention. Managed care stocks helped the Healthcare sector (+0.2%) stay positive, and the Consumer Staples sector (+0.4%) also advanced. Ultimately, however, the equity market continues to struggle with sustaining upward momentum amid the current interest rate environment.DJ30 +22.10 NASDAQ -17.65 SP500 -2.38 NASDAQ Dec/Adv/Vol 2123/903/1.94 bln NYSE Dec/Adv/Vol 2378/878/1.66 bln

[54anickel]

96. The numbers behind the lies

Economist John Williams says ‘real’ unemployment and inflation numbers -- figured the old-fashioned way -- may be two or three times what the government admits. Here’s why, and what it means for Social Security.

http://moneycentral.msn.com/content/P146055.asp

Corporate America likes to play that game, the better to boost stock prices. Folks might be surprised to learn that "Governmental" America also plays the game in its compilation of macroeconomic data. Beneath the surface are undesirable, sobering consequences for us all.

Last weekend, the always-terrific Kate Welling published an interview with an economist named John Williams. It will be available on the free portion of her "pay" site via this link starting March 11. This article is the first one that I have seen in which all the flaws in the government data, pertaining to the Consumer Price Index, unemployment, Gross Domestic Product, etc., are disclosed in one piece by someone who's been following the data for a long time.

I have been aware of nearly all the statistical tricks used by the government since they were implemented. Nonetheless, seeing them collectively described in one article is incredibly sobering. Having said that, there is a bit more "black helicopter" insinuation and fewer data points than I would like to see in an article such as this. However, the main points are the math that most folks need to know, but likely do not.

Once you read it, think about it and understand it, you will see why so many thoughtful people -- like Jim Grant, Warren Buffett, Marc Faber, Bill Gross, Fred Hickey and Paul Volcker -- have grave concerns about the future of the dollar (due to the macro imbalances that exist today).

In fact, reading this article, you will conclude that there's no way out, short of running the printing presses. The problem with that end game: At some point, foreigners will revolt. One can only hope that, somehow, there will be a way out. But without an understanding of the issues, folks will have no way to react as events unfold, and adjust their assets as we get more clues as to how all this will play out.

Thus, I would encourage everyone to print out the article and read it as many times as necessary, in order to gain a full understanding of the issues. Since we don't know at what rate some of these problems will start to impact the markets, all we can do is be prepared -- by having our insurance policies (in the form of the metals and foreign currencies), and then being alert to signs that the beginning of a chain reaction may be under way. Meanwhile, to pique folks' interest in the article, I'm going to take the time to provide some "Cliffs Notes" here.

more...

[Roland99]

98. Ooooo....I'll be waiting with bated breath!

[54anickel]

99. I bookmarked that one. Just hope the "free" link works by then! eom

[Roland99]

101. Don't forget that article should be available tomorrow.