STOCK MARKET WATCH, Tuesday 28 March

[ozymandius]

Tuesday March 28, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 1028 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1923 DAYS
WHERE'S OSAMA BIN-LADEN? 1623 DAYS
DAYS SINCE ENRON COLLAPSE = 1584
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 27, 2006

Dow... 11,250.11 -29.86 (-0.26%)
Nasdaq... 2,315.58 +2.76 (+0.12%)
S&P 500... 1,301.61 -1.34 (-0.10%)
30-Year Bond 4.73% +0.03 (+0.68%)
10-Yr Bond... 4.70% +0.03 (+0.56%)
Gold future... 567.40 +6.90 (+1.22%)






GOLD, EURO, YEN, Dollars and Loonie


PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Rob Kirby

GETTING CARRIED AWAY

The Federal Reserve’s interest rate setting policy group, the Federal Open Market Committee (FOMC), is set to meet this week amid expectations that they will raise the Fed Funds Rate for a 15th straight time from 4.50% to 4.75%. Tuesday’s meeting will be the first such chaired by Ben Bernanke.

As Bloomberg’s Caroline Baum points out in last Monday’s (March 20/06) address before the Economic Club of New York, Mr. Bernanke might have been appalled at how major news outlets received “mixed messages” as to his intent where interest rates are concerned.

-cut-

POSITIVE CARRY: NORMAL YIELD CURVE

With short term rates having risen 14 times already and long term rates (10 yr.) having remained more or less range bound between 4.00% and 4.70%, there’s been a good deal of speculation in the financial press that a flattening/inverted yield curve would bring an end to the bond carry trade. For those who may not be aware, the bond carry trade involves “lending long” and funding short. Jim Puplava has written extensively about the bond carry trade in The 'Carry Trade' Economy from his Storm Watch Series of articles. But the reality is - many people think of the Carry Trade strictly in terms of “Bonds” or interest rates. But they come in other ‘flavors.’ I would like to take a moment to highlight a couple of other identifiable “Carry Trades” that institutions and hedge funds dabble in that investors should remain cognizant of also.

more...

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

[ozymandius]

2. Today's Reports

10:00 AM Consumer Confidence Mar
Briefing Forecast 101.0
Market Expects 102.0
Prior 101.7

2:15 PM FOMC policy statement

[UpInArms]

40. WHEE! Consumer Confidence at 4 yr high!

10:00 AM ET 3/28/06 U.S. CONSUMER CONFIDENCE HIGHEST SINCE MAY 2002

10:00 AM ET 3/28/06 U.S. FEB. CONSUMER CONFIDENCE INDEX REVISED 102.7 VS. 101.7

10:00 AM ET 3/28/06 U.S. MARCH EXPECTATIONS INDEX 89.9 VS. 84.2

10:00 AM ET 3/28/06 U.S. MARCH PRESENT SITUATION INDEX 133.3 VS. 130.3

10:00 AM ET 3/28/06 U.S. MARCH CONSUMER CONFIDENCE UP TO 107.2 VS 101.8 EXPECTED

What damp rocks are these people living under?

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B3EDFAFD8%2D377A%2D447C%2DB6DE%2D0DAF5F9DEE30%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- U.S. consumer attitudes brightened in March, rising to the most optimistic since May 2002, the Conference Board said Tuesday. The consumer confidence index rose to 107.2 from an upwardly revised 102.7 in February. Economists expected a reading of 101.8. The present situation index rose to 133.3 from 130.3, the highest since August 2001. The expectations index rose to 89.9 from 84.2. The strength of the present situation index suggests the economy "gained steam in early 2006," said Lynn Franco, head of cosumer research for the private group. But the still-low level of expectations suggests "a cooling in activity" later this year.

[54anickel]

45. Now THAT is just too unfreakinbelievable. I mean - wtf? Didn't I read

somewhere that they are finding traces of Prozac in the drinking water supply? :crazy:

[Roland99]

58. Cut off date was March 21. Since then we've learned more dire news

re: the housing market and oil/gas prices.

Somethings smells of a fickle populace.

[AnneD]

60. I really have to question those stats......

'cause it sure as hell isn't cheery here. Weekdays and evenings there are few folks about. Are they prescreening the sampleing.

[bain_sidhe]

117. Where ARE all these confident people?

Because I can't find any of them around here.

Of course, living in the heart of auto industry could have something to do with that.

[OrangeCountyDemocrat]

79. Fed Statement

For immediate release

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 4-3/4 percent.

The slowing of the growth of real GDP in the fourth quarter of 2005 seems largely to have reflected temporary or special factors. Economic growth has rebounded strongly in the current quarter but appears likely to moderate to a more sustainable pace. As yet, the run-up in the prices of energy and other commodities appears to have had only a modest effect on core inflation, ongoing productivity gains have helped to hold the growth of unit labor costs in check, and inflation expectations remain contained. Still, possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures.

The Committee judges that some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance. In any event, the Committee will respond to changes in economic prospects as needed to foster these objectives.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Jack Guynn; Donald L. Kohn; Randall S. Kroszner; Jeffrey M. Lacker; Mark W. Olson; Sandra Pianalto; Kevin M. Warsh; and Janet L. Yellen.

In a related action, the Board of Governors approved a 25-basis-point increase in the discount rate to 5-3/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Dallas, and San Francisco.

[UpInArms]

80. FOMC - SSDD - meet the new boss - just like the old boss

2:17 PM ET 3/28/06 FOMC VOTE WAS UNANIMOUS

2:17 PM ET 3/28/06 FOMC SEES RISK TO INFLATION TO ENERGY, RESOURCE UTILIZATION

2:17 PM ET 3/28/06 FOMC: HIGH ENERGY PRICES ONLY MODEST IMPACT ON CORE PRICES

2:17 PM ET 3/28/06 FOMC SAYS ECONOMY LIKELY TO MODERATE IN Q2

2:17 PM ET 3/28/06 FOMC REPEATS SOME FURTHER TIGHTENING MAY BE NEEDED

2:17 PM ET 3/28/06 FOMC ONLY TWEAKS JAN. 31 STATEMENT

2:17 PM ET 3/28/06 FOMC HIKES RATES BY QUARTER POINT TO 4.75%

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B67DDBE70%2D692E%2D4D12%2D8420%2DA3749AF92CC5%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- The Federal Open Market Committee, under the new leadership of Fed chairman Ben Bernanke, increased its target for overnight interest rates by a quarter percentage point to 4.75% Tuesday. This is the 15th straight meeting with a quarter-point rate hike. The increase in the federal funds rate was expected by traders and economists on Wall Street. Rates are at their highest level in five years. The vote was unanimous. The FOMC kept its Jan. 31 language that "some further policy firming may be needed."

[ozymandius]

3. Oil holds above $64

LONDON (Reuters) - Oil held above $64 on Tuesday ahead of a meeting of U.N. Security Council nations on the nuclear issue stalemate with Iran, OPEC's second biggest oil exporter.

Threats of more attacks on Nigeria's pipelines and export terminals also kept consumers on edge over deeper supply outages.

-cut-

Foreign ministers from the United States, Russia, China, Britain, France and Germany are due to meet in Berlin on Thursday to try to break the deadlock on how best to deal with Tehran.

Oil dealers fear the Islamic Republic could retaliate to any potential sanctions by choking off oil supplies of more than two million barrels a day.

more...

[Roland99]

30. Gas went up $0.25 this morning...$2.34 ---> $2.59.

[AnneD]

35. Morning Marketeers,

:donut: GACK :spray: Sounds like Houston. Of course the increase is blamed on the fuel mix changeover.
Say 54anickle, I hear tell that they have developed a way to extract ethanol from whey (they have a way with whey in the dairy lands). They were also able to make a high quality protein feed and only water was left at the end of the process. Seems really promising. Between the methane from cow pies here and pig farms, and the ethanol from whey, we may have the fuel problem almost licked.


Happy hunting and watch out for the bears.

[Roland99]

36. No way!

:)

[AnneD]

39. yes whey

;)

[quaoar]

89. How about energy from curds

as opposed to Kurds.

[AnneD]

94. It sounds like a

Gouda idea but Edam government won't fund research.

[54anickel]

42. Heh-heh, "Behold the power of cheese". There was a local guy

back in the 70's that made heating fuel for his home and shop from chicken and mink pooh (we had a lot of those farms around back then). The story goes that some oil company bought him out for big bucks - not sure how true that is but it's one of the local legends. Anyway, the place was bull-dozed down shortly after and the land sat vacant for over 15 years. There are a couple of small horse farms there now. :shrug:

[UpInArms]

66. Crude @ $65.95 bbl - markets soar (these people are nuts)

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-03-28T174204Z_01_N2856178_RTRIDST_0_MARKETS-STOCKS-UPDATE-6.XML

excerpt:

In the energy markets, U.S. crude oil <CLK6> jumped $1.79 to $65.95 barrel. ConocoPhillips <COP.N> shares advanced 2.7 percent to $64.79, ranking second only to Exxon Mobil among the biggest contributors to the S&P 500's gain..

[UpInArms]

70. Crude futures climb near $66 in afternoon trading

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B7F4FEB28%2DAF96%2D465A%2DB87E%2D4E5DE0640CAB%7D&dist=newsfinder&symbol=&siteid=mktw

SAN FRANCISCO (MarketWatch) -- May crude climbed as high as $65.95 a barrel in New York, with traders concerned about petroleum-product supplies after reports that repairs to Hovensa's St. Croix refinery will take longer than expected. The contract was last up $1.64, or 2.6%, at $65.80. Traders also awaited a report due Wednesday from the Energy Department that's expected to show an increase in last week's crude supplies, along with declines in gasoline and distillate stocks. Elsewhere, April natural gas added 12.3 cents, or 1.7%, to $7.19 per million British thermal units.

[UpInArms]

69. CEO group on Capitol Hill seeking more gas drilling areas

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B0F7B8944%2D95A5%2D4BD5%2DB12C%2D181CD91D02C5%7D&dist=newsfinder&symbol=&siteid=mktw&print=true&dist=printTop

WASHINGTON (MarketWatch) -- Chief executives of several companies that either produce natural gas, deliver it to consumers, or use the fossil fuel as a feedstock are in Washington on Tuesday, urging government officials to open more federal areas to exploration and production.

The coalition includes the top executives of oil and gas producer Anadarko Petroleum (APC), independent oil and gas producer Devon Energy Corp. (DVN), gas utility New Jersey Resources Corp. (NJR), steel manufacturer Nucor Corp. (NUE) fertilizer manufacturer CF Industries Holding Inc. (CF).

All are planning to meet with key senators Tuesday, including Senate Majority Leader Bill Frist, R-Tenn., and Senate Energy and Natural Resources Committee Chairman Pete Domenici, R-N.M., to talk about actions they think the government must take to help bring down gas prices and address concerns about demand destruction.

Speaking to reporters before heading over to Capitol Hill, the executives said they're pressuring Congress and the Bush administration to open the East Coast, West Coast and offshore Alaska to exploration, speed up the government's ability to process onshore drilling applications, and expedite the approvals of liquefied natural gas facilities.

Steve Wilson, chairman and CEO of CF Industries Holdings, which depends on natural gas to make ammonia and produce fertilizers, said rising gas prices are forcing farmers to rely on nitrogen fertilizer imports from Russia and Venezuela.

...more...

[UpInArms]

78. May Crude @ $65.93 bbl (down from $66.20) - April NatGas @ $7.25 mln btus

2:12 PM ET 3/28/06 MAY CRUDE TAPS A SEVEN-WEEK HIGH OF $66.20/BRL

2:12 PM ET 3/28/06 MAY CRUDE LAST UP $1.77, OR 2.8%, AT $65.93/BRL

2:12 PM ET 3/28/06 APRIL NATURAL GAS UP 17.3C, OR 2.5%, AT $7.25/MLN BTUS

[UpInArms]

96. May Crude closes @ $66.07 bbl - April NatGas @ $7.214 mln btus

3:03 PM ET 3/28/06 MAY CRUDE CLOSES AT $66.07/BRL, UP $1.91, OR 3%

3:03 PM ET 3/28/06 APRIL NATURAL GAS GAINS 2.1% TO END AT $7.214/MLN BTUS

[Nickster]

103. Any bets on when it breaks 70 bucks again? I say no later than the mid

April.

[ozymandius]

4. Vital Signs: Are Consumers Less Confident?

Consumers may not be feeling so hot these days. New home sales plummeted 10.5% in February with the annualized sales pace hitting a nearly three-year low. Gasoline prices at $2.49 a gallon were up 6% over the week ended Mar. 20 and 17% from the recent low of $2.12 in mid December. The upward trend could persist as geopolitical uncertainties linger and with the start of the summer driving season not too far off.

The latest news could raise the attention the markets give to this week's consumer confidence data. Both the Conference Board and the University of Michigan come out with their latest March numbers. In February, consumers seemed to think the economy was doing well at the time but did not show the same level of conviction about the future. This time around, the markets will be looking to see if the gloomy figures on housing and gasoline might be canceling out the seemingly positive effects from an improving labor market.

The uptick in hiring should be a major contributor to increased personal income in February. The consensus view expects personal income to have increased by 0.4% after a healthy 0.7% rise in January. Wages and salaries, as well as other sources of income, will need to keep growing at a healthy clip in order to offset the potential drag from housing this year. Wages and salaries were up 5.1% from a year ago in January, but the yearly pace is off a little from mid-2005.

more...

[ozymandius]

5. U.S. calls for better market policies

CHONGQING, China - U.S. Commerce Secretary Carlos Gutierrez on Monday called on China to open its markets to foreign goods and settle currency disputes, warning it could face protectionist sentiment in the United States if its record trade surplus keeps growing.

Gutierrez visited this industrial center in China's southwest en route to Beijing for talks ahead of a possible Senate vote this week on proposed sanctions to punish China for manipulating its currency.

In a speech to university students, Gutierrez said Washington wants to see China give foreign competitors the same market access that its companies enjoy abroad, to adopt a more flexible currency and to stop piracy of intellectual property.

The U.S trade deficit with China hit $202 billion last year, the highest amount ever recorded with a single country.

more...

www.miami.com/mld/miamiherald/business/international/14200890.htm

[ozymandius]

6. Bernanke's Push for Price Goal May Take Years, Economists Say

March 28 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke's campaign to introduce an inflation goal won't find a consensus at the central bank and may take months, even years, to achieve, economists say.

Bernanke is presiding over his first meeting of the Fed's interest-rate committee, which traders predict will today raise its main rate for a 15th time in a row. His signature anti- inflation policy -- setting a price target to make the Fed more transparent -- won't come as easily.

``Some concrete judgments have to be made,'' said Michael Prell, the Fed Board's director of research and statistics from 1987 to 2000. ``There is a long list of practical questions that need to be addressed, starting with which price index they should use, what the specific number or range should be, and to what time period it should apply.''

more...

www.bloomberg.com/apps/news?pid=10000103&sid=aB1fv_ypeUkU&refer=us

[54anickel]

7. Morning Ozy and all. Great toon, Snowjob at his finest! So what's got

the futures looking down in the dumps today? Where's all that happy talk today?

[54anickel]

8. Credit investors ponder GM-sized hole in universe

http://biz.yahoo.com/rb/060328/markets_autos_gm.html?.v=1

LONDON (Reuters) - Like the elephant in the living room, the decline of General Motors is a problem that investors don't want to think about but can't ignore.
The world's largest automaker, whose debt is close to the gross domestic product (GDP) of Belgium, lost more than $10 billion last year and is facing a bankruptcy that would reap devastation in the financial markets.

GM's share price has halved in the past year, while its $100 billion of bonds have been cut to junk, confronting investors with the prospect of never getting their money back. Others in the highly-leveraged derivatives market face incalculable losses should a bankruptcy occur.

"A GM default would be absolutely huge," said Jonathan Loredo, of credit manager Cairn Capital. "It would be the biggest thing to hit the market in terms of losses and operational stress."

There is no understating the scale of GM's problems. It is losing market share in the United States, has $300 billion of long-term debt, provides health benefits to 1.1 million people (at the rate of about $1,500 per car produced), is threatened with a strike by its largest supplier, which is bankrupt, and is being investigated by the Securities and Exchange Commission.

more nasty news but ends with cheerleading....

[specimenfred1984]

67. We Have One Really Nasty Scenerio Here

and if several banks go under it'll be even worse. Greenspan said his worst nightmare was several credit emergencies at once and this could be it.

Not to mention that we're just reading about the legal and known financial transactions. Imagine how big this whole thing is if crime is taken into consideration.

[Zynx]

114. Banks are very well insulated from these problems.

Most of GM's debt is in bonds and most banks cannot hold bonds that are not investment grade. Our banking system is generally rock solid. Loan losses are relatively low and reserves are plentiful. It would take an economic collapse of epic proportions to bring under any singificant bank.

[54anickel]

9. Guide to make Treasury ‘fails’ safer

http://news.ft.com/cms/s/37a84aa6-bdb3-11da-a998-0000779e2340.html

Guidelines will be released on Tuesday that aim to increase the flexibility of the repo – or repurchase – markets in the US and that may help to stem the rising incidence of bond shortages that have occasionally threatened to undermine the market’s liquidity.

The Bond Market Association will on Tuesday announce final procedures to clarify “negative repo” transactions for the first time, adding them to its industry standard trading practice guidelines.

The repo market is the engine of liquidity for the broader US Treasury market, with about $1,900bn changing hands daily. Repo agreements consist of linked sale and repurchase deals by which participants can borrow securities for short periods in return for collateral, usually cash. In effect, it helps those selling bonds short to borrow the notes they need to do so; it also allows traders to raise short-term funds using bonds as collateral.

When securities are not delivered or returned on time, this constitutes a “fail.” While some level of fails is a normal part of the market, there have been several sharp, prolonged spikes in the fail rate in recent years as particular securities became scarce.

That has worried market participants and the Treasury, which fears further episodes could damage confidence in the wider Treasury market and raise government borrowing costs.

more..."lender of last resort" BS. Sheesh, oh yeah - let's help people game the GD system some more. :eyes:

[UpInArms]

10. daily dollar watch

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

Last trade 89.65 Change -0.48 (-0.53%)

Dollar Bulls Retreat As Majors Retaliate

http://www.dailyfx.com/story/dailyfx-reports/daily-technicals/7615-dollar-bulls-retreat-as-majors.html

EUR/USD – Euro bulls managed to push back the advancing greenback longs as pair once again headed above the psychologically important 1.2000 handle, a level created by the 38.2 Fib of the 1.2588-1.1639 USD rally and is further reinforced by the combination of the 20-day and 50-day SMA’s. A further advance by the dollar longs will most likely see the pair head lower target euro offers around 1.1932, a level marked by the December 28 daily high and with further advance on the part of the dollar trader seeing the pair head below 1.1900 figure and target bids around 1.1864, a level defended by the 23.6 Fib of the 1.2588-1.1639 USD rally. However in case euro bulls manage to push the pair higher, a move above 1.2100 figure will most likely see the pair advance above 1.2115, a level defended by the 50.0 Fib of the 1.2588-1.1639 USD rally. Indicators are favoring Euro longs with both positive momentum indicator and MACD treading above the zero line, while neutral oscillators give either side enough room to maneuver.

<snip>

USD/JPY – Japanese Yen longs managed to recapture some of the recently lost territory as USD/JPY staged a sharp rally sell off below 117.35, a level established by the 23.6 Fib of the 104.16-121.46 USD rally. A further move to the downside will most likely see the pair head lower and with a break below 116.00, a level defended by the January 17 daily high at 115.93, most likely seeing USD/JPY extending its decline toward the psychologically important 115.00 handle, a level protected by the 38.2 Fib of the 104.16-121.46 USD rally and 200-day SMA at 114.80. However in case yen longs fail to push the pair below 116.00, a reversal will most likely see the pair head above 117.35 and target yen offers around 118.17, a level marked by the December 30 daily high. A further move to the upside will most likely see the pair extend its gains above 119.00 figure and target offers around 119.39, a level established by the February 3 daily high. Indicators are favoring yen bulls with both negative momentum indicator and negative MACD treading below the zero line, while neutral oscillators give either side enough room to maneuver.

...more...

Dollar Mixed Ahead of Bernanke’s First FOMC Meeting as Chairman

http://www.dailyfx.com/story/dailyfx-reports/daily-fundamentals/7602-dollar-mixed-ahead-of-bernankes-first-fomc-meeting.html

US Dollar

All is quiet in US trading ahead of tomorrow’s Federal Reserve rate decision. The dollar’s performance against the majors has been mixed, as it gained strength against the Euro, Canadian, Australian and New Zealand dollars, but weakened against the British pound, Swiss Franc, and Japanese Yen. Such divergent price action suggests that the market is jittery ahead of Ben Bernanke’s first meeting as Chairman of the Federal Reserve. In previous meetings over the past decade, it was frequently rumored that Alan Greenspan would pen the statement before the committee would actually meet. We doubt that the committee would allow Bernanke to get away with same, particularly since it is his very first meeting. As for the Fed funds target rate itself, the market has fully priced in another quarter point rate hike to 4.75 percent and in fact, has even already discounted a 80 percent likelihood of 5 percent rates in May. However what happens after that is up in the air since no one has a clear grasp on where the Fed stands after 5 percent. Yet if the Fed were to really stop at 5 percent, it is logical to assume that they would give some sort of signal to the market of their intention to first slow down their pace of rate hikes. If they were to do so, this would be one of the rare opportunities for the Fed to inject a more neutral tone into the FOMC statement. With the Fed raising interest rates continuously by 375bp, a clear sign that the end is near could cause a great deal of volatility in the currency market. Tomorrow’s release is therefore extremely important and could set the tone for the weeks to come. There is one more wrinkle, which is that regardless of whether the statement is changed significantly or not, there are five central bankers scheduled to speak this week. This means that the Fed has ample opportunity to explain or clarify their decision. Furthermore, the economic calendar is extremely busy, which means that if the statement was left unchanged, the dollar could still respond to the releases in the following days as traders feel the need to rely even more heavily on the data reports to predict the Fed’s next step.

...more...

[54anickel]

20. China should tap FX reserves to buy gold - banker

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-27T022935Z_01_PEK157569_RTRIDST_0_ECONOMY-CHINA-RESERVES.XML

BEIJING, March 27 (Reuters) - China should use part of its fast-growing foreign exchange reserves to buy gold as it seeks to adjust the asset mix to hedge against risk, a Bank of China official was quoted on Monday as saying.

Analysts say China has been gradually diversifying away from the dollar -- although fears of a collapse in the U.S. currency will prevent any dramatic shift. Chinese officials have denied reports they plan to sell current dollar assets in the reserves.

"China should appropriately reduce the proportion of dollars in its foreign exchange reserves while increasing the proportion of currencies such as the euro," the Financial News quoted Wang Yuanlong, a director at Bank of China's Australian operations, as saying.

"We can use part of the foreign exchange reserves to buy gold, which would help make the reserves more diversified and help guarantee and increase their value," said Wang, former economist at Bank of China, the country's largest foreign exchange bank.

more...

[TrogL]

71. Maybe we could get China to buy GM

and prop it up like they're propping up the US economy.

[UpInArms]

49. Senators propose new forex report from US Treasury

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-28T161738Z_01_WBT005044_RTRIDST_0_TRADE-CHINA-CONGRESS-REPORT-URGENT.XML

WASHINGTON, March 28 (Reuters) - One proposal from two senior senators on Tuesday for toughening trade dealings with China and others would replace an existing semiannual report on currency practices with a new version.

Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, and Sen. Max Baucus, a Montana Democrat, said their proposal would "require the Secretary of the Treasury to identify fundamentally misaligned currencies that adversely affect the U.S. economy" as a step toward stiffer enforcement.

Currently, the Treasury sends a report to Congress twice a year that outlines currency practices of key trade partners, like China, and says whether they are manipulating their currencies for trade advantage.

It is a significant step to call a country a currency manipulator, and the designation is so rarely applied that many lawmakers are frustrated about its effectiveness as a tool.

...more...

Never using the tool definitely makes it useless :eyes:

[54anickel]

11. New Rise in Number of Millionaire Families

http://www.nytimes.com/2006/03/28/business/28rich.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1143552097-BP3w5IyDrYmwMgSgcLlv7Q

The number of American households with a net worth of $1 million or more, excluding their principal residence, grew to a record 8.9 million last year, the British market research firm TNS Financial Services said in a report to be released today.

Counties With the Most Millionaires More than one in seven of the households were in just 13 of the nation's 3,140 counties, TNS said.

The number of millionaire families rose to 7.1 million in 1999, said Jeanette Luhr, a TNS manager who directed the survey, and then, after the Internet bubble burst, dropped steadily to 5.5 million by 2002. The ranks of millionaire households rose to 6.2 million in 2003 and 8.2 million in 2004, she said.

snip>

The households had an average net worth, excluding principal residence, of nearly $2.2 million, of which more than $1.4 million was in liquid, or investable, assets. The survey counted some tax-deferred retirement savings but did not include individual retirement accounts in the liquid assets.

Despite a rising stock market, Ms. Luhr said that more than half of those surveyed said they had "become much more conservative in their investment approach over the past year."

The survey found that 29 percent of the millionaire households did not own stocks or bonds and 32 percent did not own mutual funds. One in four had a second mortgage on a home.

more...

[54anickel]

12. US bill may prompt tough action on renminbi

http://news.ft.com/cms/s/63a56aa0-bdfc-11da-a998-0000779e2340.html

The administration of President George W. Bush will face mounting pressure to take tougher action against China over the value of its currency with the introduction on Tuesday of legislation that would all but force the US Treasury to brand China as a currency manipulator.

The proposal, drafted by Senator Charles Grassley, the chairman of the powerful Senate Finance Committee, and Max Baucus, the committee’s leading Democrat, would threaten new sanctions against countries that are found to have “currency misalignments” with the US, according to people with knowledge of the proposal.

If a country were found to have a “misalignment”, it would be given six months to move towards a resolution of the problem. If it failed to act, the administration would be required to use a range of sanctions that would include blocking any increase in the country’s voting rights at the International Monetary Fund, and barring the country from receiving insurance and guarantees for US investors offered by the Overseas Private Investment Corporation, a US government agency that supports US companies investing abroad.

The Grassley-Baucus legislation is likely to receive wide support in Congress and is intended in part to draw away support from more draconian legislation that would impose 27.5 per cent tariffs on all Chinese imports to the US.

more...

[54anickel]

15. China, with record reserves, to gradually free yuan

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2006-03-28T100020Z_01_PEK178925_RTRUKOC_0_US-ECONOMY-CHINA.xml

BEIJING (Reuters) - China, fresh from overtaking Japan as the world's biggest holder of foreign exchange reserves, raised the prospect on Tuesday of letting market forces play a greater role in setting the value of the yuan.

The comments by central bank chief Zhou Xiaochuan, though a restatement of existing policy, follow intense U.S. pressure on Beijing to cut its big trade surplus with the United States.

The yuan is the focus of U.S. pressure because China has not allowed the currency to rise far since revaluing it by 2.1 percent last July and cutting it loose from a decade-old dollar peg to float within managed bands.

"Half a year after the foreign exchange reform, we can see that most Chinese companies have weathered this reform thanks to hard efforts, though a small number of industries has been greatly affected," Zhou said in a March 20 speech posted on the central bank's Web site (www.pbc.gov.cn) on Tuesday.

"Based on this, we think we can let market supply and demand gradually play a bigger role in the currency float," Zhou, the governor of the People's Bank of China (PBOC), said.

more...

[UpInArms]

13. Testimony at Enron trial turns to Skilling selling stock after 9/11

Testimony at Enron trial turns to Jeffrey Skilling selling stock after 9/11 terrorist attacks

http://ap.cjonline.com/pstories/business/20060327/3746850.shtml

But prosecutors in his fraud and conspiracy trial allege he sold 500,000 Enron shares on Sept. 17 that year because he had inside information that the energy company was in serious trouble — not because he was a panicked shareholder in a roiled market.

On Monday, testimony turned to that specific trade, which raked in $15.5 million and is among 10 improper insider trades Skilling is alleged to have made. Skilling is on trial for charges including fraud and conspiracy alongside company founder Kenneth Lay, but only Skilling faces charges of improper stock sales.

<snip>

Regarding Skilling's trade, stockbroker Glenn Ray testified that the former CEO called him on Sept. 17, 2001 and said he wanted to sell 500,000 shares.

However, Skilling had called Ray on Sept. 6 — before the attacks — and said he wanted to sell 200,000 Enron shares. That sale wasn't executed because Skilling told Ray he was no longer an officer at Enron, and therefore didn't have to report trades to the Securities and Exchange Commission. The broker wanted a letter from Enron verifying that, and Skilling said he would get one.

<snip>

Skilling told the SEC in December 2001 that he ordered the September trade in light of the skittish market after the attacks — but he didn't tell the agency he had tried to sell the 200,000 shares earlier that month.

[UpInArms]

64. Judge Dismisses 3 counts against Skilling; 1 count against Lay

12:43 PM ET 3/28/06 JUDGE DISMISSES 3 COUNTS VS. EX-ENRON CEO SKILLING: AP

12:43 PM ET 3/28/06 JUDGE DISMISSES 1 COUNT VS. ENRON FOUNDER LAY: AP

[UpInArms]

86. U.S. Says It Found Problems in Enron Bankruptcy Billing

http://www.nytimes.com/2006/03/28/business/28trustee.html?ex=1301202000&en=0e4c1e0526c2bdfd&ei=5088&partner=rssnyt&emc=rss

WASHINGTON, March 27 (AP) — The turnaround specialist who led the Enron Corporation through its bankruptcy engaged in unacceptable billing practices and has agreed to cut in half the $25 million he has been seeking as a "success fee," the Justice Department said on Monday.

The department's Trustee Program, which monitors the administration of bankruptcy cases, said it uncovered the billing problems after the turnaround specialist, Stephen Forbes Cooper L.L.C., and its principal, Stephen Cooper, asked the Federal Bankruptcy Court in New York for $25 million as the fee for guiding Enron through its Chapter 11 bankruptcy case.

The firm denied any billing irregularities, but agreed to reduce its request to $12.5 million after the trustee's office shared the results of its investigation with the bankruptcy court, according to papers filed with the bankruptcy court.

<snip>

Also on Monday, a former Enron accountant and lawyer each agreed to pay a $30,000 fine to settle fraud charges filed Monday in Federal District Court in Houston, the Securities and Exchange Commission announced.

David Leboe, a certified public accountant and former Enron employee, and Dale Rasmussen, a former Enron lawyer, settled without admitting or denying accusations that they took part in a plan to inflate Enron's earnings.

The S.E.C. said the two men negotiated side deals that allowed Enron to accelerate revenue recognized from the 2000 sale of an Oregon power plant, in violation of accounting rules. The men reportedly concealed the deals from Enron's outside auditor, Arthur Andersen.

...more...

[UpInArms]

14. GM says to cut hundreds of salaried jobs Tuesday

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-28T133253Z_01_N28370683_RTRIDST_0_AUTOS-GM-UPDATE-1.XML

DETROIT, March 28 (Reuters) - General Motors Corp. (GM.N: Quote, Profile, Research) said it will cut a few hundred salaried jobs on Tuesday in its initial effort to reduce its U.S. white-collar work force by 7 percent this year.

The first cuts will be announced at 30 locations, according to a GM spokesman. Employees will be given continued compensation and benefits for a period of time, depending on their length of service, he said.

The employees being let go on Tuesday will be asked to leave the company immediately.

"Our aim is to treat the employees being separated with dignity and respect," GM spokesman Robert Herta said.

GM said it will offer the laid-off employees placement assistance to find jobs outside the company.

The cuts, part of GM's sweeping restructuring aimed at stemming losses, come a week after the automaker reached a deal with the United Auto Workers union to offer early retirement packages to more than 100,000 hourly workers as part of a plan to eliminate 30,000 jobs and close 12 plants through 2008.

...more...

More "Disposable American Workers" that will go through "re-training" and learn how to write resumes for door greeting positions that aren't there.

[54anickel]

37. G.M.'s Jobs Bank Looms as Major Obstacle on Road to Survival

http://www.nytimes.com/2006/03/28/business/28jobsbank.html?_r=1&oref=slogin

At the General Motors assembly plant on the barren outskirts of Oklahoma City there are 2,300 reminders of why the company needs to persuade tens of thousands of workers to take the buyouts it offered last week.

Each day, workers report for duty at the plant and pass their time reading, watching television, playing dominoes or chatting. Since G.M. shut down production there last month, these workers have entered the Jobs Bank, industry's best form of job insurance. It pays idled workers a full salary and benefits even when there is no work for them to do.

The Jobs Bank is one critical burden that G.M. has to carry as it embarks on one of the biggest challenges — and biggest balancing acts — of its corporate survival. To become a leaner, more profitable company, it needs to persuade the right number of workers to take the buyouts, without chasing away its best people. If not enough people leave, G.M. is stuck with excess workers, who will swell the ranks of the Jobs Bank.

But in factories like the one in Oklahoma City, where workers were first interviewed on a visit last month and over the next several weeks, the buyouts could be a hard sell.

At least it looks that way for Garland Pruitt, who inspected vehicles on the assembly line before they were painted at the Oklahoma City plant. "Why would I walk out the door with $2,000 less per month and have to go find a job when I can sit in the bank, get my 30 years and retire?" asked Mr. Pruitt, who at 53 has 27 years' seniority and qualifies for a buyout that would pay him roughly half his hourly wage for three years if he leaves the company now. "It's really to my advantage to ride the bank out as long as it goes."

more...

[54anickel]

16. Summers Wants IMF to Run $500 Bln Hedge Fund

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_mukherjee&sid=aZAfdUSJt.4c

March 28 (Bloomberg) -- Larry Summers has a radical idea.

The way I interpret it, the former U.S. treasury secretary and the outgoing president of Harvard University, is suggesting that the International Monetary Fund should stop being just a lender of last resort and become the world's biggest hedge fund administrator.

It's no secret that developing nations -- especially those in Asia -- have foreign-exchange reserves far in excess of what may be required to repay overseas creditors and dispel currency speculation.

What if, as Summers asked in a speech in Mumbai last week, they could turn over a part of this surplus -- he used a figure of $500 billion -- to a ``facility'' managed by the IMF and the World Bank?

snip>

According to a rule of thumb named after Pablo Guidotti, a former treasury secretary of Argentina, and Alan Greenspan, the recently retired U.S. Federal Reserve chairman, countries should hold reserves equal to foreign liabilities coming due within a year.

Excess Reserves

Between 1990 and 1996, emerging-market economies were following the Guidotti-Greenspan rule quite closely. However, after the Asian financial crisis of 1997-98, they became much more conservative. In the third quarter of 2005, developing countries had foreign exchange reserves that exceeded their short-term overseas borrowings by as much as $1.5 trillion.

more...

[hatrack]

28. And does he want it to be "too big to fail"?

Have you been smoking banana peels again, Larry? :eyes:

[54anickel]

47. Heh-heh, you don't suppose Larry foresees a major liquidity crisis

on the horizon, do you?

[54anickel]

51. Liquidity/Rollover Risk on US Assets? (From 2004)

Liquidity/Rollover Risk on US Assets? A Nightmare Hard Landing Scenario for the US $ and the US Bond Market..

http://www.rgemonitor.com/blog/roubini/91179/

One of the most typical and common features of currency and financial crises in emerging market economies is "liquidity" or "rollover" risk. If a country has a large amount of short term debt that is coming to maturity and investors are unwilling to roll over (refinance) such debt, then a liquidity or debt rollover crisis may occur. The debt coming to maturity is usually the foreign currency (or foreign currency-linked) debt of the government (as the infamous Mexican Tesobonos in 1994) or the short-term foreign currency liabilities of the banking system (as the $20 billion plus of short-term cross-border inter-bank lines in Korea in 1997). Similar liquidity or rollover crises (also referred to as roll-off crises as investors roll off rather than roll over their claims) have been observed in every emerging market economy crisis in the last decade (see Chapter two of my new book with Brad Setser).

Thus, as the US economy currently looks like the biggest and most leveraged emerging market of all, the legitimate question emerges of whether the US could be subject to such a liquidity run or rollover crisis.

At first, the answer to such a question would appear to be negative for the following reasons: rollover risk is high if the short term liabilities are in a foreign currency and the country has limited short-term foreign assets to service such liabilities in case the foreign investors are unwilling to rollover their claims. In the case of the US instead, its domestic government debt is in local currency; thus, even if the US were to be subject to a roll-off crisis (investors rolling off rather than rolling over maturing Treasuries), it would not need to use scarce forex reserves to service its foreign debt; it could just print dollars to do that (and/or sharply increase interest rates). And indeed, it is highly beneficial to be a country not subject to "original sin" and the ensuing "liability dollarization"; lucky those who can borrow in their own currency and who are also reserve currencies.

But things get a little more complicated when one scratches the surface of the issue. Even if a pure rollover crisis can be averted if the short-term claims of the government are in local currency as the country can always print local currency to finance such a run, the consequence of such monetary financing of a roll-off crisis would be a surge of liquidity that would lead to a sharp fall in the currency value. So, you can avoid a rollover crisis by printing money but you then exacerbate the currency crisis.

Avoiding a severe currency crisis then becomes unfeasible for two reasons: first, the US does not have much forex reserves and thus could not deal with a free fall of the dollar via unsterilized forex intervention. Second, in this roll-off scenario an attempt to increase domestic interest rates to stem the currency run would not work as it would require a Fed open market sale of treasury bills: but given the roll-off crisis, foreign investors in US Treasuries are exactly wanting cash (and exiting $ assets) rather than T-bills and thus such a open market operation is effectively unfeasible (unless one spikes massively interest rates, something we will discuss later). Thus, a rollover crisis would take the form of a very sharp dollar fall as little could be done to stop it.

Now, you may wonder what are the chances of a rollover crisis in the US? Again, one of the lessons of past financial crises is that once investors start to lose faith in a country's currency and its assets, they want to keep the maturity of their holdings of local assets as short as possible to be able to run if a crisis is incipient (see again the case of the Mexican Tesobonos or the Turkish case where foreign investors placed funds in very short dated local currency government bonds). It is indeed the deadly combination of fiscal deficits, large short-term debt and low forex reserves that triggers a currency run and/or a rollover run.

more...

[54anickel]

17. US debt clock running out of time, space

http://news.yahoo.com/s/afp/20060328/ts_afp/afplifestyleusbudgetclock_060327114411;_ylt=Aks0j84fEY4yuBiVNEgAYrqmOrgF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--

snip>

Sometime in the next two years, the total amount of US government borrowing is going to break through the 10-trillion-dollar mark and, lacking space for the extra digit such a figure would require, the clock is in danger of running itself into obsolescence.

The clock's owner, real estate developer Douglas Durst, knew such a problem could arise but hadn't counted on it so soon.

"We really expected it to be quite some time," Durst told AFP. "But now, with the pace of debt growth only increasing, we're looking at maybe two years and certainly before President (George W.) Bush leaves office in 2009."

snip>

Toward the close of the millennium, with a booming economy fuelling annual budget surpluses, the clock began to slow and finally ran into its first mechanical problem.

"It wasn't designed to run backwards," Douglas Durst explained.

snip>

He only had to wait two years as the Bush presidency coincided with an upsurge in borrowing. The curtain was raised in 2002 and the digital readout flickered back to life showing a national debt of 6.1 trillion dollars with the numerals whizzing round faster than ever.

more...

[AnneD]

72. I am afraid that ....

the folks they expect to pay for all of this-the middle class and poor, will never be able to pay it off because we are sinking further into poverty. The congress is dragging their feet on ATM reform and made a lot of tax cuts to the wealthy have been made permanent. The burden of this debt needs to be spread around and some cuts to some big ticket budget items (war in Iraq, contracters) needs to be done.

[54anickel]

18. Literary honour for Baghdad blogger

http://www.timesonline.co.uk/article/0,,2-2105068,00.html

THE 18th-century man of letters Samuel Johnson famously remarked that a woman’s preaching was like a dog walking on its hind legs. “It is not done well,” he told James Boswell. “But you are surprised to find it done at all.”

So he would be doubly shocked to learn that a contender for a £30,000 book prize in his name is not only female, but a diarist who publishes her writing on a device known as the internet.

Baghdad Burning is a visceral first-hand account of how the war has destroyed the lives of ordinary Iraqi citizens.

The author, a twenty-something university graduate who writes under the pseudonym Riverbend, chronicles the “three years of occupation and bloodshed” the city has endured and calls on the US to withdraw.

It has been published in book form, but a spokeswoman for the prize said that there was nothing in the rules to disqualify non-fiction writing published solely online, provided it was in English.

more...

[Roland99]

29. Good to hear! I actually bought that book last year.

[UpInArms]

19. Ex-KPMG partner to help in tax-shelter prosecution

http://www.topix.net/content/gci/0818721994339680096028734191043820133984

NEW YORK - A former KPMG LLP tax partner pleaded guilty Monday, admitting that the accounting firm enabled wealthy investors to dodge millions of dollars in taxes with fraudulent documents, sham companies and phony tax shelters.

<snip>

He was among 19 defendants charged with conspiracy last year in a tax scheme that the government alleges helped affluent KPMG clients escape $2.5 billion in taxes.

Rivkin said nothing to diminish the scope of the fraud as he described how the company, which serves some of the world's largest corporations, helped people hide millions of dollars in profits from the Internal Revenue Service.

'The object of the conspiracy was to help wealthy taxpayers significantly and illegally reduce their tax liability to the United States Internal Revenue Service so that they could keep the money for themselves instead of paying the taxes they owed,' said Rivkin, who worked at the firm's San Diego office as a member of KPMG LLP's Innovative Strategies Group.

<snip>

Rivkin admitted that he conspired with others between January 1999 and May 2004 to prepare and execute false documents so that clients could file false tax returns.

...more...

[UpInArms]

21. TV Advertisers Running Scared - ads not effective

http://keyetv.com/business/finance_story_087005344.html

(AP) NEW YORK Nearly four in five marketers surveyed believe that television advertising is less effective than it was just two years ago, according to a study released Wednesday.

That's bad news for a nervous TV industry, which is worried about what the growth in digital video recorder usage and video on demand will mean for the economic underpinnings of the business.

The joint survey by the Association of National Advertisers and Forrester Research found marketers increasingly interested in exploring new ways of getting their messages across. Marketers from Johnson & Johnson, Pfizer, Verizon and Colgate were among the 133 people surveyed.

<snip>

Advertisers are looking at other approaches, such as product placement, program sponsorship, interactive ads within programs and online video ads.

...more...

[rfranklin]

23. There is also the fact that nobody has any money to spend...

I have noticed that in my business. You can advertise yourself into poverty--people are strapped. I am located in one of the richest areas of NJ and I have noticed the difference from three years ago when we could grow sales by 30-40% a year. Now we are treading water trying to keep afloat. Bushonomics at work here!

[54anickel]

24. Uh, geez, what shows are they buying ad time on? That might have

a little something to do with it as well. I'm one of those people that don't catch many of their ads, but then again I rarely watch TV other than a couple of news programs at jammie time. Just "ain't nuttin worth watchin" these days.

[UpInArms]

52. From the UK: Ofcom mulls total ban on food advertising to children

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B24F08E2B%2DDF26%2D453E%2D8B8D%2D668EA25E05F6%7D&dist=newsfinder&symbol=&siteid=mktw&print=true&dist=printTop

LONDON (MarketWatch) -- U.K. media regulator Ofcom Tuesday said it is considering a total ban on TV advertising or sponsorship of high fat, salt or sugar foods in programs at children.

A report by the regulator into the advertising of high fat, salt or sugar - HFSS - products to children, recommends four options, ranging from a full ban on advertising or sponsorship in children's programs to volume-based restrictions on how many food advertisements can be shown and at what times.

In addition to buying air time space in program breaks, advertisers can also sponsor programs. Under the toughest proposals, sponsorship agreements - such as Cadbury Schweppes PLC (CBRY.LN) ongoing sponsorship of Coronation Street, could be outlawed.

Ofcom's proposals follow growing concern about the rise in childhood obesity in the U.K. Some pressure groups have argued that advertising by food, drinks and consumer goods manufacturers targeted at children are contributing to the problem.

Option one recommends that no HFSS products should be advertised during programs specifically made for children or in programs of particular appeal to children under nine years old.

...more...

hmmm...

Cadbury Schweppes -

CADBURY SCHWEPPES AND THE CARLYLE GROUP COMPLETE ACQUISITION OF BEVERAGE AMERICA AND SELECT BEVERAGES

01 May 98

Cadbury Schweppes plc confirmed today that, in conjunction with its joint venture partner, The Carlyle Group of Washington DC, it has concluded the acquisition of the two leading independent bottling groups in the US MidWest, Beverage America and Select Beverages, for a total cash consideration of 724m (£433m*) for the debt free businesses subject to closing adjustments. The new joint venture company will be known as The American Bottling Company.

The American Bottling Company will bottle and distribute approximately 30% of Dr Pepper/Seven Up (DPSU) volume in the Independent Bottling System (IBS). Key brands include 7 Up, Dr Pepper, Canada Dry, Sunkist, Schweppes, A&W and Squirt. Other important brands bottled and distributed by these bottlers include Royal Crown, Mistic, Snapple, Hawaiian Punch and Evian.

Richard A Beardon, formerly President of Cadbury Schweppes' Latin America/Mexico Beverages operations, is appointed President and Chief Operating Officer. Richard has considerable experience in bottling having held the position of Operations Director of CCSB in the UK from 1989 - 1994. Further details of management appointments reporting to Richard Beardon will be announced shortly.

Both shareholders are represented equally on the Board of The American Bottling Company, which will be managed separately from Cadbury Schweppes' existing soft drinks operations in the US. The Chairman of the Board will be John F Brock, Managing Director of Cadbury Schweppes' Beverages Stream.

[54anickel]

22. The Perils of Economic Ignorance (Ron Paul)

http://www.house.gov/paul/tst/tst2006/tst032706.htm

Last week in this column I wrote of a perfect economic storm facing America, caused by a federal government that spends, borrows, and prints so much money that our dollars are eroding in value at an alarming rate. Year after year our federal government spends beyond its revenues, prints new money to pay its debts, and borrows hundreds of billions abroad in the form of Treasury obligations that someday must be paid. With too many dollars and debt instruments in circulation, and no political will in Washington to cut spending, we've created a monster. Our perceived prosperity depends on keeping the great debt and credit engine pumping, but the only way to attract new lenders to fuel the engine is higher interest rates. At some point one of two things must happen: either the party in Washington ends, or the supremacy of the dollar as the world's reserve currency ends. It's a sobering thought, but a choice must be made.

How did this happen? How did we get to such a state? The answer is found in the nature of politics itself. The truth is that many politicians and voters essentially believe in a free lunch. They believe in a free lunch because they don't understand basic economics, and therefore assume government can spend us into prosperity. This is the fallacy that pervades American politics today.

I believe one of the greatest threats facing this nation is the willful economic ignorance of the political class. Many of our elected officials at every level have no understanding of economics whatsoever, yet they wield tremendous power over our economy through taxes, regulations, and countless other costs associated with government. They spend your money with little or no thought given to the economic consequences of their actions. It is indeed a tribute to the American entrepreneurial spirit that we have enjoyed such prosperity over the decades; clearly it is in spite of government policies rather than because of them.

I certainly have seen firsthand a great deal of economic ignorance in Congress over the years. Few members pay any attention whatsoever to the Federal Reserve Bank, despite the tremendous impact Fed policy has on their constituents. Even many members of the banking and finance committees have little or no knowledge of monetary policy. Perhaps this is why so many in Congress seem to believe we can all become rich by printing new dollars, or that we can make 2+2=5 by taking money from some people and giving it to others.

more...

[ramapo]

54. Perhaps the only responsible Member of Congress?

It is truly amazing at the delusional thinking that is rife among both the general population and politicians. I suppose the people demand it of their politicians since talk of taxes and/or spending cuts is generally free fodder for the opposition with the result being political suicide.

Politicians and the people have knee-jerk reactions against taxes but how else to pay for our extravagances of war and unfettered spending? There is the child-like delusion that we can just keep creating money endlessly with no unpleasant ramifications.

To me there is a very basic rule, don't spend more than you take in. This goes for government as well as individuals. Both groups have gotten away with violating this rule and there seems to be the belief that there needs to be no end to this behavior.

Simple logic and commonsense say otherwise. These basic qualities are sorely lacking in most individuals.

[54anickel]

65. My tax advise during the high-flying Clinton days was to always be

sure to write "I am happy to" above the "Pay to the Order" line on your check to the IRS. Obviously I revoke that sentiment now that NONE of the money is invested into anything for the betterment of the society I partake in. Perhaps I should thank Bushco for my long-term unemployment - at least I don't have to support this mal-admins destruction of the US with my tax dollars. :evilgrin:

[54anickel]

74. You know it's bad when the Libertarians point out the fact that Repubs

expand the government more than Dems do. This is from 2003 during the non-recession when we were "on the cusp", "right around the corner" yada, yada, yada. Wonder if Ron Paul has thought about changing party affiliation?

http://www.pbs.org/now/transcript/transcript_rockwell.html

snip>

MOYERS: Is this however, what free market libertarian conservatives have been wanting to put the government so much in debt that it can't possibly raise more money to support more government spending? I mean, the conservative activist Grover Norquist was here where you're sitting not long ago. And he says he wants to shrink the government until it can be drowned in the bathtub. And the best way to do that is just to strangle the source of money.

ROCKWELL: You know, I think this is a Republican fib as great a guy as Grover Norquist is. Because of course the government keeps growing. President Bush has expanded the federal budget by 30 percent. I mean, this is the biggest spending administration since Mr. Johnson. And it may be…

MOYERS: You wrote somewhere that Lyndon Johnson and George W. Bush have a lot in common, they like to spend money.

ROCKWELL: Yeah, they do.

If we look at the facts and not the rhetoric, Republicans expand the government much more than Democrats do. If you look at the Reagan administration, the Nixon administration, both Bush administrations, there all big government operation. The smallest government guy in recent times, Jimmy Carter. Even Clinton was a smaller government guy than George Bush.

snip>

MOYERS: But with all due respect, you didn't answer my question. Are you going to enroll as a Democrat?

more...

[AnneD]

91. Ron cherishes his independence......

he would never affilliate. He may be a nut, but he is our nut. He is a great go to guy for the people in his district-no matter what your affiliation. He is always writing recommendation letters etc. He proves every election cycle that if you do your job and explain yourself honestly, you can get re-elected even with out a party.

[UpInArms]

25. Arrest warrant issued for Refco's Bennett

http://www.myrtlebeachonline.com/mld/myrtlebeachonline/business/14204356.htm

VIENNA, Austria - Vienna's public prosecutor issued arrest warrants Tuesday for Phillip Bennett, the former head of the troubled New York commodities brokerage Refco Inc., and the son of a former president of the bank that lent Bennett hundreds of millions of dollars.

The move came one day after the prosecutor's office announced it was investigating Bennett and Wolfgang Floettl Jr. on fraud and other charges. Floettl Jr. is implicated in highly speculative dealings while his father was head of the Bank Fuer Arbeit und Wirtschaft AG that led to bank losses of just under 1 billion euros ($1.2 billion).

Although neither man is in Austria, the Austria Press Agency quoted prosecutor's spokesman Walter Geyer as saying the warrants were issued on formal grounds when there is concern that suspects might flee or conspire to hide wrongdoing.

The legal moves came four days after the bank said it incurred losses of just under 1 billion euros ($1.2 billion) through the financing of investment companies mainly engaged in interest rate and currency transactions in the Caribbean. Floettl Jr. is implicated in those transactions.

...more...

[54anickel]

26. The Big Chair (Hussman)

http://www.hussmanfunds.com/wmc/wmc060327.htm

On a street in a little town in Canada, there's a chair that's about twice the size of a normal adult, which as you can see, makes your normal adult look fairly small.

Presently, S&P 500 earnings are a lot like that chair.

Specifically, the price/earnings ratio on the S&P 500 is about 18.2, which as noted in last week's comment, doesn't look particularly bad. On closer evaluation, however, it's a starkly misleading figure. Put a couple of adults in a really big chair, and they'll look small anyway. Divide the S&P 500 index by a very elevated earnings number, and it'll look reasonably valued.

As noted last week, S&P 500 earnings are currently at the peak of a long-term 6% growth line that has connected cyclical peaks in S&P earnings going back as many decades as one cares to look (this doesn't mean that the growth rate from every single peak to the next one is 6%, but as you can quickly observe from last week's chart, a simple 6% peak-to-peak trend does a good job of describing the entire growth history of earnings). What's important here is that excluding the late-1990's bubble peak, if you examine other periods when S&P 500 earnings have even been close to that trendline (say, within 20%), the average price/earnings ratio for the S&P 500 index has averaged just 9 or 10 – about half current levels. As usual, that's NOT to imply that stocks are about to drop in half, but investors should certainly not look carelessly at a market trading at 18.2 times top-of-channel earnings.

It's interesting that the current P/E is about double its “normal” level based on the current position of earnings. If you look at the price/book ratio on the S&P 500, at 3.1, it's also about double the historical norm of about 1.5. The price/dividend ratio on the S&P 500, at 54, is about double the historical norm of about 26. The price/revenue ratio on the S&P 500, at 1.5, is nearly double the historical norm of 0.8. This market isn't cheap.

more...

[UpInArms]

27. 8:32 EST opening numbers and pre-opening blather

Dow 11,241.23 -8.88 (-0.08%)
Nasdaq 2,315.09 -0.49 (-0.02%)
S&P 500 1,301.13 -0.48 (-0.04%)
10-Yr Bond 4.735 +0.34 (+0.72%)

NYSE Volume 32,369,000
Nasdaq Volume 54,412,000

09:15 am : S&P futures vs fair value: -0.4. Nasdaq futures vs fair value: +3.0.

09:00 am : S&P futures vs fair value: -0.5. Nasdaq futures vs fair value: +1.5. The cash market remains poised for a flattish start today. The economic front continues to occupy traders' attention, and a relatively light corporate front has brought little diversion. Some of the early news includes better than expected earnings reports from Lennar Corp. (LEN) and Tiffany's (TIF); more job cuts from GM; reports that Citigroup (C) may bid for some or all of Turkey's Finansbank; and a Wall Street Journal article that raises concerns over Hewlett-Packard's (HPQ) valuation.

08:30 am : S&P futures vs fair value: +0.6. Nasdaq futures vs fair value: +1.0. Futures trade is continuing to signal a rather subdued start for stocks. Anticipation ahead of the FOMC decision and policy directive is dictating trading action within both the stock and bond markets, and it may do so until 2:15, the approximate time of the release. At this point, Treasuries are under some pressure. The benchmark 10-year note is down five ticks and up to a 4.72% yield. There's one other item on today's economic calendar. At 10:00 ET, the March Consumer Confidence report will hit the wires (consensus 102.0).

07:57 am : S&P futures vs fair value: -0.1. Nasdaq futures vs fair value: flat. Futures trade is suggesting a flattish open for the cash market. Traders are adopting a cautious stance ahead of today's FOMC event. It's a foregone conclusion by the market that the fed funds rate will be increased 25 basis points to 4.75%. What is fostering anxiety is the accompanying policy statement, as the market is anxious to see whether it provides a clear signal that the Fed will be done raising rates at its May meeting. For our part, we do not expect a significant change in the wording, and we believe that it is unlikely that the directive will suggest that there is a definitive end in sight.

[UpInArms]

31. Head of Hyuandai Unit Detained in Bribery Probe

http://kutv.com/business/finance_story_086142453.html

(AP) SEOUL, South Korea Prosecutors on Monday detained the top executive of an affiliate of South Korea's largest automaker, Hyundai Motor Co., as they widened a probe into suspicions that the company used its subsidiaries to create slush funds to bribe government officials.

Lee Ju-eun — the head of Glovis, the shipping and distribution arm of Hyundai Motor that also owns Kia Motors Corp., the country's second-largest automaker — was taken into custody a day after investigators carried out an extensive raid of Hyundai Motor headquarters and other offices to seize evidence.

"We're questioning him on how slush funds were created and spent," said Kang Chan-woo, a prosecutor acting as spokesman for the Supreme Public Prosecutor's Office.

The investigation grew out of a scandal surrounding a jailed lobbyist, Kim Jae-rok, who was arrested last week on charges of receiving money from businesses in exchange for promises he would use his connections with government officials to win favors.

...more...

[UpInArms]

32. Treasury Investors turn bearish before Fed decision - poll

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-28T143817Z_01_N28339357_RTRIDST_0_FINANCIAL-TREASURIES-JPMORGAN.XML

NEW YORK, March 28 (Reuters) - Investors turned bearish on Treasuries ahead of a widely expected decision by the Federal Reserve to lift short-term U.S. interest rates for the 15th time since June 2004, according to a poll released on Tuesday.

Investor sentiment returned to levels seen two weeks ago, J.P. Morgan Securities said. Those surveyed on Monday who said they were "short" Treasuries, holding fewer U.S. government securities than their portfolio benchmarks, rebounded to 42 percent from 35 percent the prior week, the bank said.

"The survey returned to its results from March 13, when 2-year yields were at similar levels," it said in a statement.

Early Tuesday, two-year Treasury yields <US2YT=RR>, the most sensitive to changes in Fed policy, were quoted at 4.74 percent, roughly the same as a week earlier and two weeks ago.

Fed policymakers started a two-day policy meeting late Monday, Ben Bernanke's first since replacing Alan Greenspan as head of the U.S. central bank in February.

...more...

[UpInArms]

43. Treasuries extend losses after consumer confidence

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-28T151356Z_01_N28295624_RTRIDST_0_MARKETS-BONDS-URGENT-UPDATE-1.XML

NEW YORK, March 28 (Reuters) - U.S. Treasury debt prices extended losses on Tuesday after March data on consumer confidence came in stronger than expected, suggesting the Fed may have further to go in raising interest rates.

The Conference Board's U.S. consumer confidence index rose to 107.2 in March, the highest in almost four years, from an upwardly revised 102.7 in February. Economists polled by Reuters on average looked for a March reading of 102.0.

Benchmark 10-year notes <US10YT=RR> fell 12/32 for a yield of 4.76 percent versus 4.71 percent late on Monday.

Two-year notes <US2YT=RR> were unchanged to yield 4.75 percent.

[UpInArms]

85. Treasurys fall further as FOMC lifts rates; more hikes seen

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B28AB761C%2D4D9E%2D4F28%2DBA04%2DD69480B0B6FA%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) - Treasury prices weakened further Tuesday afternoon, sending yields higher, after the Federal Reserve put in place a widely expected quarter-point increase in the Fed funds target and issued a statement perceived as signaling more rate hikes ahead. The target is now 4.75%. The benchmark 10-year note last was down 13/32 at 97-31/32 with a yield ($TNX) of 4.759%, up from 4.746% immediately before the news. "Some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance," the Fed said, repeating language from the January statement. Matthew Smith, portfolio managed at Smith Affiliated Capital, said the language in the policy statement was nearly unchanged from the January communique, indicating the Fed is likely to raise rates again at its May policy meeeting.

[UpInArms]

88. FOMC statement sparks selling of long-term Treasurys

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B27939B3B%2D5C58%2D4F54%2D9DA1%2DE569CC8DF15E%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) - The Federal Reserve's decision Tuesday to hike the Fed funds target by a quarter-point to 4.75% and an accompanying policy statement pointing toward another rate increase sparked selling of long-term maturities. The 30-year Treasury long bond last was down 1-3/32 at 95-8/32 with a yield of 4.801% while the benchmark 10-year note fell 18/32 to 97-26/32 with a yield ($TNX) of 4.784%. "The rate hike was pretty much assumed in the market," said Brant Carter, managing director of fixed income trading at Morgan Keegan. "But the long end of the curve sold off because the statement said further tightening may be needed. The committee made clear that their mission statement is the containment of economic growth with price stability."

[54anickel]

33. Ex-KPMG partner pleads guilty in tax shelter case

http://abcnews.go.com/Business/wireStory?id=1772959

Mar 27, 2006 — NEW YORK (Reuters) - A former partner at accounting firm KPMG <KPMG.UL> pleaded guilty to conspiracy and tax evasion charges on Monday for his role in creating and marketing fraudulent tax shelters meant to help wealthy clients avoid paying taxes.

David Rivkin, 42, pleaded guilty to one count of conspiracy and one count of tax evasion at a hearing in U.S. District Court in Manhattan. As part of his plea, Rivkin has agreed to cooperate in the government's investigation of the shelters it says cost the U.S. $2.5 billion in lost taxes.

Rivkin told Judge Lewis Kaplan that he conspired with others to market the shelters that were meant "to allow wealthy tax payers to claim phony losses."

He faces up to 10 years in prison, but federal prosecutors can recommend a more lenient sentence in exchange for his cooperation.

more...

[54anickel]

34. 'Alternative tax' hits wallets hard

http://www.msnbc.msn.com/id/12033487/

You didn't hit the lottery, get much of a raise or see impressive returns in 2005, but the federal government might consider you among the wealthiest Americans this tax season.

About 15 million more taxpayers with incomes ranging from $75,000 to $500,000 are expected to get hit with the alternative minimum tax, created nearly 40 years ago to ensure that the richest pay their fair share of income tax.

snip>

The tax will be a reality for more Americans for two main reasons. One is that the AMT has not been adjusted for inflation since its inception in 1969. Another factor is that the 2001 income-tax cuts didn't affect the AMT, which often makes it the higher of the two taxes.

CPA Gary Wojciechowski, partner at Gaines Kriner Elliott LLP, said the government's lopsided adjustments to the overall tax scheme have treated the taxpayers unfairly.

"They're being dishonest," he said. "Either they didn't understand it or they knew it was going to raise funds and they were not going tell anyone. It has gone far beyond what it was intended to do."

more...

[UpInArms]

38. More foreclosures may come as Western home prices flatten

http://www.centralvalleybusinesstimes.com/stories/001/?ID=1644

Flattening price appreciation, rising interest rates, and slowing sales could lead to an increase in mortgage defaults later in 2006 and beyond, according to Foreclosures.com, a Sacramento-based distressed property investment advisory firm and nationwide publisher of foreclosure property information.

Northern California markets are cooling down, with San Francisco Bay area home sales volume declining in all nine Bay Area counties and the price appreciation slowing, the company says. The picture was the same in southern California.

"In San Diego, for example, year over year price appreciation has dropped to 6.4 percent, and sales volume is down throughout our Southland,” says Alexis McGee, president of Foreclosures.com in a written statement. “There is no crash coming because the excess inventory just isn't there. We're just getting back to normal."

<snip>

"In San Diego County 50 percent of mortgages issued between 2003 and 2005 were either interest only, or so-called option adjustable rate mortgages with start rates as low as 1 percent,” she adds.

...more...

[UpInArms]

41. June Gold @ $573.40 oz (hit $575 earlier)

9:51 AM ET 3/28/06 JUNE GOLD TAPS A MORE THAN 3-WEEK HIGH OF $575/OZ

9:51 AM ET 3/28/06 JUNE GOLD LAST UP 80C AT $573.40/OZ IN MORNING TRADING

[UpInArms]

55. April Gold @ $568.40 oz - May Silver @ $10.885 oz

11:41 AM ET 3/28/06 JUNE GOLD CLIMBS 70C TO $573.30/OZ IN NY

11:41 AM ET 3/28/06 APRIL GOLD UP $1 TO TRADE AT $568.40/OZ

11:41 AM ET 3/28/06 MAY SILVER FALLS 1C TO $10.885/OZ AFTER $10.94 HIGH

[54anickel]

44. US Has Two Achilles Heels: The Dollar And Real Estate

http://www.gold-eagle.com/gold_digest_05/russell032606.html

The Dollar -- So far, the action in the dollar has been counter intuitive. In the face of huge current account deficits which now amount to 6.5% of the US Gross Domestic Product, the dollar holds up. The stubborn "holding together" action of the dollar has cost many currency traders major portions of their bank accounts. When you play with the currencies, you're asking for difficulties and frustrations -- they're tough to trade and even harder to figure. Yeah, I know the dollar is going to fall apart -- but when? So far it's not happening. But it will fall -- it will, it will.

Real estate -- Does the same frustration regarding the dollar apply to the real estate bears? So far, the answer seems to be "Looks like it." A recent study shows that as of last September, 9.4% of all mortgage borrowers had either no equity or actual negative equity in their homes. That increased to 29% of all owners who took out first mortgages in 2005. This amounts to the following -- borrowers with $800 billion in mortgages now owe more on their homes than their homes are worth.

Home prices have declined in selected areas of the US, but in general prices are still above those of a year ago. However, home insurer First America states that if prices were to fall just 10%, the share of 2005 owners with no equity or negative equity would surge to nearly 48%.

Thus, keeping home prices up is a "must" for Ben Bernanke and the Fed. For this reason, I expect liquidity to continue to surge -- it has to. The slowly deflating real estate bubble may be Mr. Bernanke's first priority. He's got to keep homes prices from caving in. Therefore, nevermind the interest rates, it's the liquidity that is crucial here. And liquidity is coming in at the rate of almost a trillion dollars a year (the M-3 statistics have now ended).

snip>

Comment -- Both oil and gold have made major moves to the upside, and they should be correcting. Yet, both are holding well and both were up and impressive today. I get the feeling that there's something negative in the wind which both oil and gold are discounting.

more...

[clar8130]

53. educate me on this...

Why has the real estate problem gone under the radar for Congress? Why have they not curtailed the aggressive mortgage lending practices that will greatly exacerbate the problem in the next few years? Or, on the other hand, since Fannie Mae seems to be having financial problems already, has Fannie Mae been pushing and supporting the i/o & sub-prime loans? More mortgages mean the ability to sell more MBSes, which means more cash coming in to cover their current obligations, right? It can't continue like this for long.

[UpInArms]

56. simple answer: Greenspan aka WUHBPH

(Washed Up Has Been Partisan Hack) aka "Bubbles" aka Meanspin

[clar8130]

57. about Meanspin

Did he keep interest rates artifically low to keep the house of cards together a little longer? Wasn't the Fed scrambling to get NewBank in place in case of major currency problems? "Slyspin" may be more apt than Meanspin.

[54anickel]

46. Warning! Fiscal Hurricane Approaching!

Follow-up to "The Ominous Warnings and Dire Predictions of World's Financial Experts - Part 1 and Part 2" previously posted from another source (they are linked in this article again)

http://www.gold-eagle.com/editorials_05/bakerd032706.html

In a previous article entitled "The Ominous Warnings and Dire Predictions of World's Financial Experts - Part 1 and Part 2", we learned what was probably in store for us short-term and in the next few years. These experts used words like 'Economic Armageddon', "Financial Apocalypse', 'Financial Disaster', 'Financial Train Wreck', 'Deep Funk', 'Great Disruption', 'Category 6 Fiscal Storm', 'Economic Earthquake', 'Serious Collapse', 'God-Awful Fiscal Storm', 'Debt-Driven Meltdown', 'Major Upheaval', 'Demographic Tsunami', 'Rude Awakening', 'Economic Pain', ' Systemic Banking Crisis', 'An Accident Waiting to Happen', etc. to describe what we are in for. It begs the question "How should we position our assets given the dire predictions of these imminent economists and analysts who are all much of the same mind as to what may well be in store for the U.S and, indeed, the global economy very soon?" Again, we have compiled a detailed and comprehensive summary of what many of these very same individuals, and others, have to say. It is so extensive and informative we have taken the liberty to divide it into 4 parts.


Warning! Fiscal Hurricane Approaching! Is Your Portfolio Secure? Part 2

Charles Carlson, CEO of Horizon Investment Services and author of a number of books including 'Eight Steps to Seven Figures,' 'Buying Stocks Without a Broker' and 'No-Load Stocks' offers hands-on advice on how to survive - and thrive - in a wildly fluctuating market in his latest book 'The Smart Investor's Survival Guide.' As he says "The storm's eye is an excellent metaphor for what investors must do during stormy market periods. Find the eye. Get to the calm. Play in the space where you won't get hurt.

What kind of investments?

big snip>

Richard Benson, President of Specialty Finance Group, LLC, is of the opinion that "the financial markets are leveraged for a crash. The capital markets have become one massive casino. Very few people believe they are gambling with their own money because borrowing with other people's money to place the bets has become so easy. Money is being made in the leveraged carry trade or in speculating on margin. Even the patriotic homeowner with a variable rate mortgage is borrowing short-term to buy stocks, and to pay bills. What happens when investors want to reduce their risk and need to sell but can't find a buyer? They would be trapped because the markets are just not that liquid, especially when everyone wants to sell! That's why it is important to be in cash before the crash! Short-term Treasuries, bank CD's (but only up to $100,000 per institution), TIPS (Treasury Inflation-Protected Security), I-bonds, and gold coins are all wonderful places to sit out any potential storm. For the average investor who is risk adverse and for any investor who considers losing a dollar worse than making a dollar our advice is to get into cash and be prepared to wait. Good hunters know how to wait and good things happen to those who are patient, like buying what they like at half price!"

more...

[UpInArms]

48. Arbitrator rules for Big Tobacco, against states

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-28T154519Z_01_N27283520_RTRIDST_0_TOBACCO-STATES-URGENT.XML

NEW YORK, March 28 (Reuters) - An arbitrator ruled that cigarette-makers lost market share as a result of a settlement they reached with U.S. states, boosting their chances of reducing the $6.5 billion payment they owe next month, according to a copy of the decision provided by a source.

The U.S. states, however, have said they would fight in court if they lost. They argue they met another requirement under the settlement because they collected funds from tobacco companies that did not sign it.

Connecticut Attorney General Richard Blumenthal, in a statement on Tuesday, vowed to force the cigarette-makers to pay in full. "I will stop Big Tobacco from shamelessly shirking its obligations under the settlement agreement," he said.

[54anickel]

50. Brazil's Bonds and Currency Decline on New Minister

http://quote.bloomberg.com/apps/news?pid=10000006&sid=a_ww4hszQH4A&refer=home

March 28 (Bloomberg) -- Brazil's bonds and currency declined on concern the nation's new finance minister, Guido Mantega, will abandon his predecessor's policies of spending restraint and cause inflation to accelerate.

Mantega, 56, a former budget minister and state development bank president, may have difficulty building up the same credibility as Finance Minister Antonio Palocci, Merrill Lynch said in a report today. Palocci helped cut the inflation rate by more than half, control government spending and curb the budget deficit since 2003.

``Mantega has had a different attitude in terms of government spending, inflation controls,'' said Joao Medeiros, a partner at Sao Paulo-based Pioneer Corretora de Cambio, which handles about a third of Brazil's daily foreign exchange trading. ``We may have a loosening of all the controls we've seen implemented successfully so far.''

snip>

The central bank's interest rate policy has limited economic growth, Mantega said this morning. He used his first remarks as finance minister last night and this morning to signal he will seek to push down rates further and faster.

``The naming of Guido Mantega as replacement for Finance Minister Palocci may impact Brazilian asset prices negatively today,'' Merrill Lynch's Tulio Vera wrote in a note to clients today. ``While Mantega reaffirmed the administration's commitment to unchanged economic policy, the market may see this as only as a first step in building the policy management credibility that Palocci enjoyed.''

more...

[UpInArms]

59. 12:15 EST numbers and blather (all better now!)

Dow 11,256.13 +6.02 (+0.05%)
Nasdaq 2,320.57 +4.99 (+0.22%)
S&P 500 1,303.47 +1.86 (+0.14%)
10-Yr Bond 4.743 +0.42 (+0.89%)

NYSE Volume 873,917,000
Nasdaq Volume 815,641,000

12:00 pm : The equity market is trading within a tight holding pattern ahead of this afternoon's FOMC event. The major averages are hovering around the unchanged mark, and may continue to do so until the latest Fed decision and policy directive hit the wires at approximately 2:15 ET.

A 25 basis point increase in the fed funds rate, which will mark the fifteenth consecutive rate hike, is a foregone conclusion. Today's tightening will bring the overnight lending rate to 4.75%. It's the accompanying statement that has investors tense. There is hope among participants that the Fed will modify the wording of its directive to signal that its monetary tightening cycle is near finished. While it is possible that new Fed Chairman Bernanke may prefer slightly different diction, it's not likely that the statement will be significantly changed - or that it will suggest a definitive end is in sight. As the Fed has asserted, its policy decisions will depend on the economic data. In our view, the recent data has not given the Fed a reason to halt its monetary tightening after today. We expect another increase at the next FOMC meeting in May, and we do not think that the possibility of another should be dismissed.

While stock trading is reflecting traders' wait-and-see mentality, Treasury trading is reflecting a relatively greater degree of caution. The bond market has been on the defensive all morning, with the benchmark 10-year (-10/32) up to a 4.74% yield. At the back end of the curve, which is the most inflation-sensitive, the 30-year note is down 21 ticks and yielding 4.77%. Over the course of the morning, rising bond yields have had a muted effect on the equity market. Similarly, a spike in energy prices has been more or less overlooked. Crude is now up 2.3% on the day and pushing $66 per barrel, but it's done little other than spur some buying across the Energy sector.

Metal prices are also rising, and the Materials sector has benefited. Aside from Energy's 1.2% gain and Materials' 0.5% advance, though, leadership lacks. At the same time, losses are being kept in check as the market waits for the FOMC announcement to serve as its catalyst.

Light corporate news has brought little diversion from the economic front. Some of the more noteworthy items include better than expected earnings reports from Lennar Corp. (LEN 60.76 +0.44) and Tiffany's (TIF 38.04 -0.47); more job cuts from General Motors (GM 23.18 +0.25); a ruling in favor of tobacco firms; reports that Citigroup (C 47.60 -0.04) may bid for Turkey's Finansbank; and a Wall Street Journal article that that raises concerns over Hewlett-Packard's (HPQ 32.77 -0.34) valuation. Overall, though, respective areas of the market have not been much affected.

In addition to the FOMC event, today's economic calendar featured one other item. For March, Consumer Confidence checked in at 107.2 - stronger than the expected 102.0 and reflecting the highest reading since May 2002. In addition, the prior month's reading was revised upward to 102.7 from 101.7. Although we have maintained that consumer spending is better previewed through the level of interest rates and income growth than sentiment readings, this strong number will contribute to concerns that the Fed will remain inclined to stay on its tightening path. With the FOMC decision and accompanying directive due this afternoon, however, the stock market had a muted response to the data, in part taking its cue from the Treasury market's similar reaction.DJ30 -2.48 NASDAQ +3.50 SP500 +0.59 NASDAQ Dec/Adv/Vol 1483/1362/774.3 mln NYSE Dec/Adv/Vol 1657/1432/565.8 mln

11:30 am : The Dow has moved to its lowest level of the morning. Overall, though, the market continues to tread near the flat line. Within the blue chip average, Pfizer (PFE 25.51 -0.30) and Hewlett-Packard (HPQ 32.80 -0.31) are exerting the most pressure. The former is behind the Healthcare sector's 0.5% decline. That area remains the market's weakest. Eli Lilly (LLY 56.18 -2.49) is another particularly sore spot, following two analyst downgrades this morning. Getting back to the Dow, Hewlett-Packard has lost about 1% after the Wall Street Journal featured an article that raised valuation concerns. A decline in the hardware industry is teaming with relative weakness in semiconductors in stunting the Tech sector's advance.DJ30 -13.36 NASDAQ +1.28 SP500 -1.02 NASDAQ Dec/Adv/Vol 1482/1294/659.4 mln NYSE Dec/Adv/Vol 1675/1358/474.8 mln

[UpInArms]

61. 12:37 EST Look at that joy in mudville!

Dow 11,274.05 +23.94 (+0.21%)
Nasdaq 2,325.89 +10.31 (+0.45%)
S&P 500 1,305.32 +3.71 (+0.29%)
10-Yr Bond 4.747 +0.46 (+0.98%)

NYSE Volume 963,247,000
Nasdaq Volume 915,376,000

[specimenfred1984]

62. Fed Speaking, Fed Pumping

Well golly gee-willikers, whodda ever thought our corrupt system of gov't and corporate fraud would conspire to pump up the stock market?

I'm just being sarcastic, I know most everyone here knows what's going on.

[54anickel]

63. A Collapsing Presidency

http://www.counterpunch.org/roberts03202006.html

The latest national survey by the Pew Research Center finds that President Bush's support among the American people has fallen to 33%. Even more devastatingly, the survey finds that people's most frequently used one-word description of President Bush is "incompetent."

The chief chaplain for the New York City Corrections Department told a Tucson audience that "the greatest terrorists in the world occupy the White House." Two years ago when New York Mayor Michael Bloomberg was suppressing demonstrations at the Republican National Convention, the chief chaplain would have been fired for his remarks, but not today.

Abroad among peoples who formerly looked to America for leadership, American atrocities in Iraq have created sympathy and support for the Iraqi resistance.

When the Bush administration gets in trouble, it turns to war, which has worked for it in the past. Thus, this past week there was live coverage of "Operation Swarmer," which occupied a solid day on CNN and Fox "News." The venerable Washington Monthly reports that the hyped "assault on Samarra" was nothing but a Potemkin operation--a set propaganda piece to demonstrate US military prowess and the battle-ready "new Iraqi army," only there were no insurgents in Samarra to battle. The much-hyped "Operation Swarmer" was a photo op for TV cameras as troops fired into empty desert.

more...

[KoKo]

68. Rep. Louise Slaughter needs help from "Day Traders" in investigating

Delay's guy Tony Rudy's trading while a house staff member. Here's from her post in a diary on Daily Kos. Don't know if there is anyone who reads here who can help her, but throwing it out...just in case.

----------------------------------------

Insider-Trading by a Top DeLay Staffer in Congress?

Insider-Trading by a Top DeLay Staffer in Congress?
by Rep Louise Slaughter
Tue Mar 28, 2006 at 09:19:12 AM PDT

Hi folks. I wanted to come here and follow-up on the story of possible insider-trading in Congress. Remember a few weeks ago I mentioned that I was hearing stories about possible insider trading by Tom DeLay's top leadership aide in Congress? Well today I am going to introduce legislation with my colleague Rep. Brian Baird of Washington that will block Members of Congress and their aides from engaging in insider trading. We can't let Members and their staffers making profits through day-trading using non public, sensitive information they become privy to because of their special access.

-snip-

This is why we are introducing this bill today, which will bring those standards in line and give the SEC the power to enforce insider trading in Congress. It will also require reporting by members and staff on the trades they make, infusing some accountability into the process. Rep. Baird and I are going to file this legislation today. I will come on here and share the text of the legislation after we have filed it in the House. I sure hope my colleagues from the other side of isle will join this effort to end insider trading in the People's House.

Also, if there are any of you in this community who are expert day-traders or know a lot about this kind of market activity, we would be really interested to hear your thoughts and feedback on this. What other avenues can we pursue to get more information on Mr. Rudy's day-trading activities on the Hill?

Thank you again for making me a part of this wonderful community.

More about this and what Tony Rudy was doing here:

http://www.dailykos.com/storyonly/2006/3/28/111912/415

[ozymandius]

73. 1:25 update

Dow 11,262.84 +12.73 (+0.11%)
Nasdaq 2,323.91 +8.33 (+0.36%)
S&P 500 1,304.43 +2.82 (+0.22%)
10-Yr Bond 47.41 +0.40 (+0.85%)
NYSE Volume 1,113,159,000
Nasdaq Volume 1,050,341,000

12:55 pm : Some increased buying interest has helped the major averages inch higher. At this point, eight of the ten economic sectors are trading on positive ground. Outside of commodity-driven advances in the Energy (+1.5%) and Materials (+0.8%) sectors, though, gains remain modest. The equity market continues to await the impending FOMC decision and policy directive. A 1/4% increase to the fed funds rate is entirely expected, and the catalyst will rest within the policy statement. Meanwhile, Treasuries are holding steady. That market remains on the defensive, but is similarly awaiting the FOMC announcement. The yield on the 10-year has been vacillating between about 4.73% and 4.75% today; currently, it's at 4.74%.DJ30 +26.10 NASDAQ +10.31 SP500 +3.81 NASDAQ Dec/Adv/Vol 1344/1561/969.4 mln NYSE Dec/Adv/Vol 1399/1730/705.9 mln

[54anickel]

75. Jobs uses half his Apple shares to pay taxes

http://news.com.com/Jobs+uses+half+his+Apple+shares+to+pay+taxes/2100-1047_3-6054749.html

Apple Computer CEO Steve Jobs is walking away this month with slightly more than half of the 10 million shares of restricted stock that the computer maker granted him.

The other chunk, which represents 4.57 million shares, or nearly $296 million, was withheld by Apple to pay for income taxes relating to the vested shares, according to filings with the Securities and Exchange Commission.

Uncle Sam walks away with millions and Jobs doesn't do too bad either.

snip>

Jobs was initially awarded the 10 million shares of restricted stock back in 2003, which had a three-year vesting cycle. The millions that he could potentially reap from selling his vested stock would help to cushion the $1 annual salary he has volunteered to accept as the company's CEO.

more...

[corporate_mike]

87. At that level, people pay 50% taxes

why is this unusual?

[54anickel]

76. Kevin Phillips: Time to Recall Bush?

http://news.yahoo.com/s/huffpost/20060328/cm_huffpost/018036;_ylt=A86.I0MsdSlEY64AIwD9wxIF;_ylu=X3oDMTBjMHVqMTQ4BHNlYwN5bnN1YmNhdA--

Two years ago in American Dynasty, I suggested that George W. Bush, if re-elected, might well face impeachment in his second term as the debacle in Iraq deepened. This has come to pass, and not surprisingly because American presidents since World War Two -- Truman over Korea and Johnson and Nixon over Vietnam -- faced similar rumblings when wars went poorly or were clearly mismanaged.

Still, the talk did not become action, and even Nixon's 1974 impeachment did not extend to the Vietnam war. The odds, then, are that the talk of impeaching George W. Bush over mismanagement in Iraq or national security excesses at home won't go anywhere either. The Democrats in Congress are right to suspect that such a move could open a political version of Pandora's box.

Back in 1998, the GOP-led crusade to impeach Bill Clinton certainly did. The clumsiness of the GOP effort also wound up focusing attention on the moral hypocrisy of certain Republican leaders in the House of Representatives whose peccadilloes were on a par with Clinton's. It is all too easy to imagine a clumsy Democratic-led impeachment efflort creating a backlash in which that party's own war and national security-related skills become a GOP target and wind up distracting the public from George W. Bush's own incompetence.

This raises another critical point. For all that opinion polls show that incompetence is the word voters most often associate with Bush, incompetence is not a high crime or misdemeanor of the sort generally considered grounds for impeachment. Should Bush become incompetent for causes not existing at the time of his election -- a series of strokes damaging his memory, for example -- that would probably be covered under the disability provisions of the 25th Amendment to the U.S. Constitution. But that is not the kind of incompetence perceived in the current polls.

more...

[Roland99]

77. 2:15pm and little changed

DJIA 11,266.30 +16.20
Nasdaq 2,322.94 +7.36
S&P 500 1,304.74 +3.13
Russell 2000 756.87 +2.84
CBOE Volatility 11.50 +0.04
30 Yr Bond 4.77 +0.04
10 Yr Bond 4.75 +0.04

[Zynx]

82. Fed tightens by another 25 bps:

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B67DDBE70%2D692E%2D4D12%2D8420%2DA3749AF92CC5%7D&siteid=mktw

Signals more to come.


Thanks a lot Ben.

[OrangeCountyDemocrat]

81. Federal Reserve Releases Statement

For immediate release

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 4-3/4 percent.

The slowing of the growth of real GDP in the fourth quarter of 2005 seems largely to have reflected temporary or special factors. Economic growth has rebounded strongly in the current quarter but appears likely to moderate to a more sustainable pace. As yet, the run-up in the prices of energy and other commodities appears to have had only a modest effect on core inflation, ongoing productivity gains have helped to hold the growth of unit labor costs in check, and inflation expectations remain contained. Still, possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures.

The Committee judges that some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance. In any event, the Committee will respond to changes in economic prospects as needed to foster these objectives.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Jack Guynn; Donald L. Kohn; Randall S. Kroszner; Jeffrey M. Lacker; Mark W. Olson; Sandra Pianalto; Kevin M. Warsh; and Janet L. Yellen.

In a related action, the Board of Governors approved a 25-basis-point increase in the discount rate to 5-3/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Dallas, and San Francisco.

[UpInArms]

83. 2:22 EST immediate market reaction to "Chopper" Ben? - looks like hate

Dow 11,226.98 -23.13 (-0.21%)
Nasdaq 2,317.99 +2.41 (+0.10%)
S&P 500 1,301.02 -0.59 (-0.05%)
10-Yr Bond 4.745 +0.44 (+0.94%)

NYSE Volume 1,349,090,000
Nasdaq Volume 1,270,498,000

2:00 pm : In the 15 minutes ahead of the FOMC announcement, the market has moved back towards unchanged territory. The 10-year note's yield, meanwhile, is standing at 4.74%. The Nasdaq continues to outperform the blue chip averages. A 0.2% gain in the Technology sector is lending a measure, albeit a modest measure, of support. Biotechs' recovery to the flat line has also helped enable the Composite's rise. Some pockets of weakness, in areas like semiconductors and hardware, are capping its advance. Its gain is equal to those of the S&P 400 Mid Cap and Russell 2000 Small Cap indices today. DJ30 +9.05 NASDAQ +7.55 SP500 +2.66 NASDAQ Dec/Adv/Vol 1436/1507/1.16 bln NYSE Dec/Adv/Vol 1479/1712/859.9 mln

[UpInArms]

84. 2:25 EST DIVE! DIVE! DIVE! - Look Out Below!

Dow 11,194.80 -55.31 (-0.49%)
Nasdaq 2,311.82 -3.76 (-0.16%)
S&P 500 1,297.26 -4.35 (-0.33%)
10-Yr Bond 4.743 +0.42 (+0.89%)

NYSE Volume 1,371,636,000
Nasdaq Volume 1,294,039,000

[UpInArms]

90. Banks now are raising their "prime" to 7.75 percent - pop goes housing

KeyCorp raises prime rate to 7.75 percent

[UpInArms]

95. Wachovia and Wells Fargo jump on the 7.75 percent train

Wachovia raises prime rate to 7.75 percent

Wells Fargo raises prime rate to 7.75 percent

[ozymandius]

92. Mommy make the BAD MAN STOP!

3:04
Dow 11,171.91 -78.20 (-0.70%)
Nasdaq 2,306.23 -9.35 (-0.40%)
S&P 500 1,294.97 -6.64 (-0.51%)
10-Yr Bond 47.68 +0.67 (+1.43%)
NYSE Volume 1,627,436,000
Nasdaq Volume 1,542,938,000

[UpInArms]

97. 3:17 EST DOW drops 100+

Dow 11,148.86 -101.25 (-0.90%)
Nasdaq 2,301.33 -14.25 (-0.62%)
S&P 500 1,292.36 -9.25 (-0.71%)
10-Yr Bond 4.778 +0.77 (+1.64%)

NYSE Volume 1,722,647,000
Nasdaq Volume 1,637,906,000

[Roland99]

102. Look at that yield zoom!

[UpInArms]

93. 3:03 EST still dropping like a rock

Dow 11,177.91 -72.20 (-0.64%)
Nasdaq 2,307.08 -8.50 (-0.37%)
S&P 500 1,295.56 -6.05 (-0.46%)
10-Yr Bond 4.770 +0.69 (+1.47%)

NYSE Volume 1,621,905,000
Nasdaq Volume 1,537,161,000

All that happy happy joy joy has gone away - that think tank report was a smoke screen to lure the suckers in deeper and reality is slowly sinking in - rate hikes are here to stay.

[AnneD]

98. Perhaps this article can help......

How to kill a bear with your feet.

http://www.thetoiletonline.com/writings2005/30/killbear

But seriously....

http://www.fool.com/fribble/2001/fribble010516.htm

Well what would an expert do? Oh, to have an Inuit guide now. Let's look at what such a guide would do.

Sacrifice the Dogs
When coming upon a bear, an Inuit would select a number of dogs and let them loose. This keeps the bear busy
<snip>

Look for a Weapon
The Inuit now has time to look in his komatik for a weapon. A gun would be nice but there are no silver bullets, so he must make do with something sturdy.
<snip>

Strike a Firm Blow
Now that he has a weapon, the Inuit will sneak up from behind the bear and strike a firm blow.
<snip>

Stand Back and Wait
Once the death blow has been struck, the Inuit stands back and waits for the bear to die. After it dies, he loads it aboard his komatik and takes his trophy home. After striking the firm blow, there is nothing to do but to sit back and wait. The bear will eventually die -- of old age if nothing else.



Happy Hunting......

[54anickel]

99. And you're once, twice, three times a raising, I don't looooove youuuu

I don't looooove yoooooo-uuuuu.

This statement is a disappointment to those looking for hopeful signs, and forecasts that the Fed will raise rates at least two more times may get more exposure.

[UpInArms]

100. All those folks with ARMs are going to get to hate "Chopper" Ben, too. eom

[AnneD]

104. Awh jeeze...

I had a TIA and forgot those folks for a sec...Looks like the screws are about to be squeezed.

[clar8130]

105. those with ARMs

might be getting what they deserve with Ben.

[54anickel]

107. I don't think they "deserve" anything. Sure they were not the brightest

bulbs when they trusted Greenspin when he was out whoring for ARMs, but they certainly don't "deserve" what's about to happen to them. Hopefully they can get out from under in some way that leaves them somewhat in tact. We'll all pay the cost and feel their pain as the repercussions trickle through the housing markets.

Welcome to the SMW thread. :hi:

[UpInArms]

109. U.S. consumer borrowing costs follow Fed higher

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-28T204544Z_01_N28329004_RTRIDST_0_FINANCIAL-PRIMERATE.XML

NEW YORK, March 28 (Reuters) - Millions of U.S. consumers and businesses will have to dig a little deeper to make loan payments now that the Federal Reserve has raised interest rates a 15th straight time in less than two years.

Wachovia Corp. (WB.N: Quote, Profile, Research), Wells Fargo & Co. (WFC.N: Quote, Profile, Research), U.S. Bancorp (USB.N: Quote, Profile, Research) and KeyCorp (KEY.N: Quote, Profile, Research) were among the first banks on Tuesday to raise their prime rate, which they charge their best customers, to a nearly five-year high of 7.75 percent from 7.50 percent. Most if not all major banks will follow.

"The extended low-rate holiday that consumers have enjoyed is a thing of the past," said Greg McBride, senior financial analyst at Bankrate.com, a North Palm Beach, Florida provider of financial services information.

Most lending institutions use the prime rate as a baseline for rates on all kinds of loans, including credit cards and home loans.

Tuesday's increases came after the Federal Open Market Committee, the policymaking body of the U.S. Federal Reserve, raised its key overnight rate on loans between banks by 0.25 of a percentage point to 4.75 percent.

More increases in that rate "may be needed" to keep the economy growing at a healthy clip without triggering excessive inflation, the central bank said.

...more...

[54anickel]

106. Check the Yahoo poll on rates

http://biz.yahoo.com/special/fedwatch032806.html

Will the Fed raise the fed funds rate to 5% or higher this year?

Yes 87 %
No 13 %

[Zynx]

116. That doesn't take a genius to figure that out.

However, it remains clear that it is the wrong move. They continue to raise without considering the fact that core inflation is quite low, the housing market is clearly becoming undone, and economic data has been getting fairly spotty of late.

The idea that you put the economy into a slow down to crimp energy prices is absurd. People spend money on energy regardless of the circumstances. I suppose if you put the economy into an 81-82 style recession you might crimp energy consumption a little as many fewer people would be driving to wrok, but that's a very blunt instrument and only compounds the pain of high energy prices.

[Roland99]

121. Well, they need to do something to prop up the dollar and make US debt

attractive to China and Japan.

[Zynx]

123. A weak dollar makes bonds cheaper and US assets more attractive.

The problem we have now is that we have our standard of living being propped up by an artificially high currency that must fall in order to correct our record trade imbalance. There isn't a happy ending to this current economic situation.

[AnneD]

101. I am thinking.....

our theme for today and for the near future shoud be....
Won't Get Fooled Again...

We'll be fighting in the streets
With our children at our feet
And the morals that they worship will be gone
And the men who spurred us on
Sit in judgment of all wrong
They decide and the shotgun sings the song

I'll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around
Pick up my guitar and play
Just like yesterday
Then I'll get on my knees and pray
We don't get fooled again

The change, it had to come
We knew it all along
We were liberated from the fold, that's all
And the world looks just the same
And history ain't changed
'Cause the banners, they are flown in the next war

<snip>
I'll move myself and my family aside
If we happen to be left half alive
I'll get all my papers and smile at the sky
Though I know that the hypnotized never lie
Do ya?

There's nothing in the streets
Looks any different to me
And the slogans are replaced, by-the-bye
And the parting on the left
Are now parting on the right
And the beards have all grown longer overnight

<snip>

[Zynx]

112. Bernanke is insane to continue raising rates at this point.

This is just as bad as when they continued to hike right into the new year and beyond in 2000 without waiting for data to guide their way.

[OrangeCountyDemocrat]

120. No Win Scenario

If rates don't rise, then nobody will buy our bonds, and the economy will suffer, the dollar collapse.

If rates do rise, then housing will get hit hard, home values will decline, home equity loans will strap people, and the economy will suffer.

We're screwed either way.

[ozymandius]

108. before the bell

3:52
Dow 11,152.06 -98.05 (-0.87%)
Nasdaq 2,302.06 -13.52 (-0.58%)
S&P 500 1,292.49 -9.12 (-0.70%)
10-Yr Bond 4.778 +0.77 (+1.64%)
NYSE Volume 1,979,140,000
Nasdaq Volume 1,885,842,000

dang at the yield!

[ozymandius]

110. I didn't expect to see bonds go this way.

30-Year Bond 4.79% +0.07 +1.40%
10-Year Bond 4.78% +0.08 +1.64%

I was certain that we'd see an inversion with this jolt in activity.

[UpInArms]

111. After the Bell: GM Shares Halted - News Pending

4:09 PM ET 3/28/06 GM SHARES HALTED, NEWS PENDING

[OrangeCountyDemocrat]

115. GMAC to restate results due to accounting errors

GMAC to restate results due to accounting errors
Tuesday March 28, 4:49 pm ET


DETROIT (Reuters) - General Motors Acceptance Corp., the finance arm of General Motors Corp. (NYSE:GM - News), on Tuesday said it has misclassified cash outflows related to mortgage loan originations and purchases.
GMAC said in a filing with the Securities and Exchange Commission that it has to restate financial results for periods ended March 31, 2005 and 2004, June 30, 2005 and 2004 and September 30, 2005 and 2004.

The restatement will have no impact on previously reported total cash and cash equivalents, GMAC said.

[UpInArms]

119. urther credit downgrades "jeopardize our ability to continue operations."

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B99909652%2DACCD%2D4F44%2D96A8%2DB5591E7B9A9A%7D&siteid=mktw&dist=bnb

SAN FRANCISCO (MarketWatch) -- General Motors (GM 22.75, -0.18, -0.8% ) , after halting trade of its shares, said late Tuesday it will restate financial results for its financing arm, GMAC, from 2003 through the third quarter of 2005. The restatement relates to the improper classification and presentation of cash flows for certain mortgage loans. The company said the restatement won't impact previously reported total cash and cash equivalents and it will have no effect on GMAC's income. In a 10-K filing for GMAC, the company warned that further credit downgrades "jeopardize our ability to continue operations."

[ozymandius]

113. at the close

Dow 11,154.54 -95.57 (-0.85%)
Nasdaq 2,304.46 -11.12 (-0.48%)
S&P 500 1,293.23 -8.38 (-0.64%)
10-Yr Bond 47.78 +0.77 (+1.64%)
NYSE Volume 2,148,716,000
Nasdaq Volume 2,035,264,000

4:20 pm : It was anticipation of, and then digestion of, today's FOMC event that dictated trade. For the fifteenth consecutive time, the Fed raised the fed funds rate by 25 basis points. As had been expected, it wasn't today's tightening that sparked selling. The rate hike, to 4.75%, had been fully expected. The catalyst was instead the accompanying policy statement. Some participants had been hoping that the Fed would signal an imminent end to the current monetary tightening cycle. The directive's diction was little changed, though, and provided no signal that rate hikes are coming to an end.

Specifically, the statement kept intact the wording that "some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance." Furthermore, the statement also maintained the statement about the concern that "possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures." This does not mean that several more rate hikes are certain, but the lack of any change in the statement suggests that the FOMC is currently anticipating raising rates at least one more time, and possibly more. As the Fed has asserted, policy decisions will depend on the data.

Ahead of the afternoon release, the stock market was locked within a very tight trading range that lied close to the unchanged mark. Treasuries, on the other hand, had been on the defensive all day. Following the announcement, bonds came under increased pressure. At the time of the equity market's close, the benchmark 10-year note had fallen 18 ticks and risen to a 4.78% yield. At the back end of the curve, which is most inflation-sensitive, the 30-year note had dropped 31 ticks and jumped to a 4.79% yield. Rising yields had had a muted effect on stock trade this morning, but exacerbated conditions served as a bearish backdrop for equities. Rate-sensitive areas were especially affected. The Financial sector's 1.0% decline was driven by banks and weighed heavily. Other particularly rate-sensitive pockets, like the Utilities sector (-0.4%) and the homebuilding industry, also fell.

The FOMC event largely overshadowed surging energy prices. Crude led the advance, and closed over $66 per barrel. That move reflected an approximate 3% gain. One area that had taken notice, though, was the Energy sector. Its intra-day gain of about 1.1% had supported the indices, but the late-day, directive-driven selling took virtually all areas of the market lower. The sector maintained a gain, but it was more than halved and unable to lend much support.

Healthcare and Technology were additional areas of the market that weighed heavily. Pharmaceuticals were an especial sore spot for the former. Due to two analysts' downgrades, Eli Lilly (LLY 56.41 -2.26) was the most significant drag. Selling across the tech board was wide-spread, but semiconductors and hardware levied two of the most substantial losses. Hewlett-Packard (HPQ 32.07 -1.04) suffered from an article in The Wall Street Journal that raised valuation concerns, and that stock was the force behind the latter industry's decline.

Other than those items, today's corporate front was a light one, and it offered little deviation from the economic stage. There were reports of more job cuts at General Motors (GM 22.75 -0.18), better than expected earnings from Lennar (LEN 60.95 +0.63) and Tiffany's (TIF 38.91 +0.40), a court ruling in favor of tobacco firms, and Citigroup's (C 74.60 -0.04) expected bid for a Turkish bank, but, overall, respective areas of the market were not very much affected.

Consumer Confidence data was the other item on today's economic calendar. In March, the series checked stronger than expected and reflected the highest reading since May 2002. Additionally, the prior month's reading was revised upward. Although we have maintained that consumer spending is better previewed through the level of interest rates and income growth than sentiment readings, this strong number did not help concerns that the Fed will remain inclined to stay on its tightening path.DJ30 -95.57 NASDAQ -11.12 SP500 -8.38 NASDAQ Dec/Adv/Vol 1844/1199/1.97 bln NYSE Dec/Adv/Vol 2124/1141/1.54 bln

[AnneD]

118. I am thinking.....

we can kiss those consumer confidence numbers good bye once the notices of mortgage payments increases hit the mail boxes...whachyathink...

[KoKo]

122. Yeah I think so...but can't do an argument about it...........

Brain Dead.........