STOCK MARKET WATCH, Wednesday 13 September

[ozymandius]

Wednesday September 13, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 861 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2086 DAYS
WHERE'S OSAMA BIN-LADEN? 1792 DAYS
DAYS SINCE ENRON COLLAPSE = 1753
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 6
Enron execs conveniently deceased = 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 September 12, 2006

Dow... 11,498.09 +101.25 (+0.89%)
Nasdaq... 2,215.82 +42.57 (+1.96%)
S&P 500... 1,313.11 +13.57 (+1.04%)
Gold future... 594.30 -3.00 (-0.50%)
30-Year Bond 4.91% -0.04 (-0.71%)
10-Yr Bond... 4.77% -0.03 (-0.54%)






GOLD, EURO, YEN, Loonie and Silver


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 Ike Iossif - WEEKLY CHARTS

SUMMARY

For the week of 9-11-06, the divergences in almost all the indicators we follow suggest that the advance of the last few days in all likelihood will mark the "end of something" instead of the "beginning of something." Notice in the charts below the divergence in the McClellan Oscillator, in the New Highs/New Lows ratio, and also notice that the VIX is at the bottom of its range. Readings like these have never accompanied the beginning of a major up-leg. There is always "a first time" for everything, but would you like to bet on that "first time" with your money? Probably not! (Also, please read "The 4 year cycle low.")

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

[ozymandius]

2. Today's Reports

10:30 AM Crude Inventories 09/08
Briefing Forecast NA
Market Expects NA
Prior -2212K

2:00 PM Treasury Budget Aug
Briefing Forecast -$67.0B
Market Expects -$67.0B
Prior -$51.3B

[54anickel]

32. Oil Prices Rise on Drop in Inventories

http://customwire.ap.org/dynamic/stories/O/OIL_PRICES?SITE=NDBIS&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2006-09-13-11-21-13

NEW YORK (AP) -- Oil prices rose slightly on Wednesday, gaining some ground after seven straight days of drops as the U.S. government reported a decrease in the nation's crude inventories.

U.S. crude inventories fell 2.6 million barrels to 327.7 million barrels last week, according to the Energy Information Administration. They're still 5.6 percent above year-ago levels, though, and above the upper end of the average range for this time of year.

snip>

The drop in crude stocks was larger than expected, but the increase in distillate fuels - which include heating oil, a key commodity as the winter approaches - was bigger than most analysts had forecast.

Distillate inventories climbed 4.7 million barrels to 144.6 million barrels. That's 5.8 percent above last year, thanks to increased production to nearly 4.5 million barrels a day, which is the second-highest weekly average ever, the EIA said. Just a couple of weeks ago, distillate inventories were below year-ago levels.

According to a Dow Jones Newswires survey of analysts, U.S. crude oil inventories were expected to fall 1.5 million barrels, while distillates stocks were expected to gain 1.6 million barrels.

Meanwhile, gasoline inventories rose 100,000 barrels to 207.0 million barrels - 6.4 percent above last year, the EIA said.

more...

[54anickel]

44. U.S. posts budget deficit of $64.61 billion

http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyID=2006-09-13T180949Z_01_WAT006239_RTRUKOC_0_US-ECONOMY-BUDGET.xml&archived=False

WASHINGTON (Reuters) - The U.S. government posted a larger-than-expected $64.61 billion federal budget deficit in August as outlays for the month were at a record high, a Treasury Department report showed on Wednesday.

The August deficit compared with a $51.33 billion deficit in August 2005.

Wall Street economists polled by Reuters were expecting a $61.15 billion deficit for the month.

The cumulative deficit for the first 11 months of fiscal 2006, which began October 1, was $304.31 billion, below the $354.12 billion deficit in the first 11 months of fiscal 2005.

more...

[ozymandius]

3. Oil prices rise after plunging 3 percent

KUALA LUMPUR, Malaysia - Oil prices rose marginally Wednesday — a day after plunging 3 percent — as traders awaited the outcome of the atomic energy agency's meeting on
Iran's enrichment program.

U.S. oil stockpile data, another market mover, was due out later Wednesday. A Dow Jones Newswires poll of analysts predicted that commercially-available crude oil inventories were likely to fall, while distillate stocks, which include heating oil and diesel, would rise.

"People are not likely to take fresh positions" before the release of the data, said Tokyo-based Mitsui Bussan Futures trader Tetsu Emori. Emori said any bearish news could give the market its next nudge — toward the psychologically important $60 a barrel mark.

Benchmark crude oil prices on the New York Mercantile Exchange was up 11 cents to $63.87 a barrel for the October contract in electronic trading after earlier rising as high as $64.22 a barrel. The contract fell $1.85 to settle at $63.76 a barrel in Tuesday's floor trade, the lowest front-month closing price since March 22.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

4. Refinery bottlenecks to dog oil industry until 2010

VIENNA (AFP) - High oil prices are still being propped up by a shortage of refinery capacity and there is little sign of the bottleneck easing until 2010, industry executives and officials discussing OPEC's future have warned.

That potential respite relies on the unlikely prospect all 66 refineries planned by oil companies and producers being built, as well as a total of about 300 billion dollars in investment by 2015, they added.

"The need for downstream capacity is just as important as other issues," said Claude Mandil, executive director of the International Energy Agency at a two-day conference which was continuing Wednesday.

"There is a general recognition now that no spare capacity in refining together with no spare capacity in crude production are the key factors we have to manage on high prices," he added.

http://news.yahoo.com/s/afp/20060913/bs_afp/opecenergycommodities_060913091351

[ozymandius]

5. Oil's rout deepest in 16 years

SINGAPORE (Reuters) - Oil prices have fallen as much as $16 from their peaks, their steepest reversal in 16 years, in a correction that traders say may be harder to shake off than past setbacks over the market's four-year rally.

In real terms Brent has fallen $16.02 since it hit a high of $78.65 on August 8 -- its biggest decline from peak to trough since prices fell just ahead of the first
Gulf War in late 1990. Brent is down more than 20 percent from its peak, meeting the technical criteria for the start of a bear market.

U.S. crude has dropped nearly $15 to hit a near six-month low of $63.53 a barrel on Wednesday, a fall only a hair smaller than those in August-November 2005 and October-December 2004. In those cases, oil recovered to make new highs within five and eight months, respectively.

In percentage terms there have been bigger stumbles on oil's recent ascent, propelled steadily higher since 2002 by the war in Iraq, soaring Chinese demand, constrained oilfield and refinery production, devastating U.S. Gulf Coast hurricanes, and most recently fears of a disruption to Iran's exports.

-cut-

While many analysts say the worst may not be over yet in the latest shake-out, most also agree that there remains scope for another attempt at surpassing the previous summit.

http://news.yahoo.com/s/nm/20060913/bs_nm/markets_oil_fall_dc_1

[AnneD]

16. Around the world: Attack on boat leaves worker dead...

http://www.chron.com/disp/story.mpl/business/4182834.html


PORT HARCOURT — Gunmen on Tuesday attacked a boat carrying oil workers in Nigeria, leaving one worker dead and underscoring dangers for energy firms in Africa's oil giant as unions prepared to strike over growing insecurity.

The gunmen attacked a boat carrying Chevron-affiliated workers in the waterways of the oil-rich southern Niger Delta, and one worker, reportedly Nigerian, died in what a white-collar union called an act of banditry.

The country's two biggest petroleum unions called a three-day action starting today to protest the death of a member killed in a recent shootout between government forces and militants.

Nigeria is a shutdown waiting to happen folks.....

[AnneD]

18. Cleanup under way in California

http://www.chron.com/disp/story.mpl/business/4182740.html

BP is cleaning up about 1,000 barrels of fuel that spilled from a pipeline in an industrial area of Long Beach, Calif.

About 900 barrels of the spill, which was detected Friday, has been recovered and pumped into tanks, BP spokesman Scott Dean said Tuesday. None of the fuel spilled into any nearby waterways, and there was no "significant impact" on the environment, BP said.

"We will continue to work until we're satisfied with the cleanup," Dean said. BP hadn't determined what caused the spill, from a four-mile underground line carrying gas oil from Long Beach to BP's Carson, Calif., refinery.

BP is cleaning up about 1,000 barrels of fuel that spilled from a pipeline in an industrial area of Long Beach, Calif.

It's not called British Patch for nothing....:eyes:

[54anickel]

31. Oil companies may avoid royalty payments

http://www.chron.com/disp/story.mpl/ap/business/4181876.html

WASHINGTON — Oil companies are under pressure to resolve flawed drilling leases that allow them to avoid federal royalty payments, including on oil from a major discovery in the Gulf of Mexico.

The issue stems from a mistake eight years ago that omitted a provision in more than a thousand drilling leases that would have required royalty payments but only if the price of oil went above $36 a barrel.

At the time oil was much cheaper and Congress had allowed the royalty break to spur deep-water exploration.

With oil now costing almost double the trigger level, most of those leases would be subject to royalty payments had the provision not been omitted in leases issued in 1998-99.

Chevron Corp., acknowledged that two of the eight lease areas involved in the new oil discovery it and two other companies announced last week were among those issued in 1998-99 without the royalty threshold.

snip>

Interior officials have told the panel they were not aware of the problem until 2000 or later. The department's inspector general has been investigating the circumstances surrounding the leases but no one has come up with an explanation for the mistake.

more...

[Eugene]

33. Iran Says It Will Keep Supplies Flowing

September 13, 2006 10:59 AM ET
Iran Says It Will Keep Supplies Flowing

VIENNA, Austria (AP) - Iran's oil minister on Wednesday said
suggestions that his country might use oil as an economic weapon
are baseless, reaffirming Tehran's commitment to supplying crude
markets despite its standoff with the West over its nuclear program.

Kazem Vaziri Hamaneh told an OPEC conference in Vienna that Iran
-- the 11-nation cartel's No. 2 producer behind Saudi Arabia -- kept
its crude exports flowing even during its long war with Iraq in the
1980s and would not use its oil as a political lever now.

"OPEC and Iran are committed to ensuring oil supplies," he said
during a panel discussion.

http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=AP&Date=20060913&ID=6018313

[AnneD]

39. Iraq joining Iran to develop oil fields.....

(You just knew this would eventually happen)

Iraq and Iran plan to develop oil fields that straddle their border, and Iraq will pump crude to its neighbor's refineries, deepening commercial ties between the two oil producers, Iraq's oil minister, Hussain al-Shahristani, said Tuesday.

http://www.chron.com/disp/story.mpl/business/4182731.html

This was just a short announcement no details. My guess is that it won't be the Kurdish fields (they won't give up control willingly). The longer we are in there the more tangled the mess, the deeper the hatred of the US, and the more bitter the Moslem partisanship. I suggest we all start backing alternative fuel sources asap...but I'm sure I preach to the choir on this thread.

[ozymandius]

6. Next leads London higher

The London market moved higher on Wednesday lifted by Wall Street's strong overnight performance and gains for clothing retailers Next and Marks & Spencer.

Next shares leapt to the top of the FTSE 100 leaderboard, rising 6.4 per cent to £18.15 as better-than-expected half-year figures forced short sellers to buy back their positions.

The update on current trading from Next was also good, with like-for-like sales improving 0.3 per cent between July 30 and September 9, which was better than the City expected

All of which, helped the FTSE 100 advance 13.7 points, or 0.2 per cent, to 5,909.3. Lower down the market, the FTSE 250 rose 28.4 points, or 0.3 per cent, to 9,633.9.

That news saw Marks & Spencer shares marked 3.6 per cent higher at 617p, with the stock also finding support from rumours that management are set to announce a re-valuation of its substantial property portfolio.

http://news.yahoo.com/s/ft/20060913/bs_ft/fto091320060613377040

[Nimrod2005]

7. I like opening this thread every morning, just to watch the number of days

left for the current regime declining...Everyday is one less day we have to live with evil.

[ozymandius]

9. With all those days left - it does make me wonder how this regime

could get any stinkier. It's all downhill from here.

[AnneD]

19. Morning Marketeers...

:donut: and lurkers. Yeah. Who needs an alarm clock to wake up any more. Just the stench that emenates from D.C. is enough to wake me up every morning.

Last night hubby and I went out for dinner. After the meal, we were discussing the tip. I explained that he had left far too little and that here in Texas as in most of the nation, wait staff were paid less than minimum ($2.15 the last time I ever waited tables). He was shocked and didn't believe me. We asked our waiter and sure enough-still little change). A good tip is at least 20% and I always give at least that.

I found a juicy website that you might want to check out. I can go on and on about the worst tippers, but sufice it to say Sunday morning shifts were never my favorite. Our manager finally had to start adding a 15% gratuity to tables over 6 because the waitress' refused to work. Check out how some of the politicians were rated...

http://www.bitterwaitress.com/

Happy hunting and watch out for the bears.....

[ozymandius]

8. Profit Down at Goldman, but Estimates Are Beaten

Despite a summer slump in trading up and down Wall Street and expectations of a significant decline in investment banking, Goldman Sachs reported strong third-quarter earnings yesterday.

For Goldman, after stellar performances in recent quarters, the results still represented a substantial comedown.

As the first major Wall Street bank to report on the third quarter, Goldman provided a proxy for how its competitors might fare under tough conditions. Lehman Brothers reports results today, and Bear Stearns reports tomorrow.

Goldman’s earnings surpassed estimates, and its stock surged. Goldman shares rose $7.29, or 4.8 percent, to $158.29. Goldman’s board also authorized the repurchase of an additional 60 million shares, worth nearly $9.5 billion at yesterday’s closing price. Shares of Lehman climbed 4.2 percent, and Bear Stearns shares gained 2.9 percent.

http://www.nytimes.com/2006/09/13/business/13place.html?_r=1&ref=business&oref=slogin

[ozymandius]

10. Thanks everyone for your suggestions re: yesterday's query.

Looks like we'll be router shopping. I have not been a hardware guy since my years in broadcasting - mostly a software guy since then. So this will be a new adventure. It will also be my first time as a sys admin. Hoo-wee.

Have a great day everyone! :donut:

Ozy :hi:

[fascismsucks]

11. Nasdaq & Dow

Thanks for posting those stats.
This ain't 1999, that's for sure.
If you're not in OIL or Halliburton ... you're not making money.

[Buttercup McToots]

12. Sooooo

The Repukes are manipulating the gold and oil markets, I gather..
Bloody bastards...I had to sell off half my gold stocks 2 days ago.
:grr:

I've been reading about the green river foundation/formation...Anybody have any thoughts?

[displacedtexan]

13. Housing news

Finally, a hearing on the hill today, plus:

HOME FIRES DYING, FUND BETS ON BUST 09/12/06

Homebuilders adding incentives 09/12/06

Slippery slope for San Fernando Valley home sales continues 09/12/06

San Diego house prices drop for first time in years 09/12/06

Greed, speculation helped overheat housing market: Toll CEO 09/12/06

D.R. Horton CEO says 2007 will be worse than 2006 09/12/06

International Monetary Fund concerned about oil, U.S. housing 09/12/06

It's a 'candy store' for Oregon homebuyers 09/12/06

A wave of housing foreclosures set for this fall 09/12/06

Real Estate Recession Coming 09/12/06

Arizona home prices in Valley continue to fall 09/12/06

Arizona August home sales are weakest in 4 years 09/12/06

Florida's oversupply of condo-hotels could spell big trouble 09/12/06

Help! Home for sale 09/11/06

Five Ways to Recession-proof Your Portfolio 09/11/06

Why NAR Expects Home Sales To Lift From Temporary Dip 09/11/06

Housing Market's Landing Will Get Rougher 09/11/06

An Investors' Dream or Just a Mirage? 09/11/06

Futures Signal Housing Losses 09/11/06

5 ways to assess risk of your option ARM 09/11/06

The housing boom is over, but creative investors still make profits 09/11/06

Home buying decisions can be overwhelming in a buyer's market 09/10/06

Housing market may be on ice, but the blame market is red hot 09/10/06

Planned Condo Complex Flips to Rentals and Gets a New Name 09/10/06

Homeowners Have Trouble With Market 09/10/06

Builders sweeten the deal 09/10/06

Krugman Video on Housing Bubble -- "This Is Scary" 09/09/06

Incentives for resale homes? Sellers get creative 09/09/06

A Humbling Lesson for Realtors' President 09/09/06

Shift to buyer's market stymies house sellers in Baltimore 09/09/06

Hawaii Home Sales Fall 09/09/06

Des Moines Home Sales in a Slump 09/09/06

Homeowners Have Trouble With Market 09/09/06

Learning To Landlord 09/09/06

St. Joe to stop building houses 09/09/06

Builders Brace for a Housing Downturn 09/08/06

Lennar Says Profit Dropped on Incentives to Buyers (Update5) 09/08/06

A Ripple Effect? 09/08/06

Free gift with purchase -- of home 09/08/06

Incentives heat up as home sales cool 09/08/06

Slowdown forecast for San Diego's economy 09/08/06

More homes set for auction in Los Angeles 09/08/06

Silicon Valley Homes Lose $50,000 In Two Months 09/08/06

If They Build It, Will Buyers Come? 09/08/06

1 in 6 homes in San Luis Obispo County pure investments 09/08/06

Housing decline: How 'temporary'? 09/08/06

America's unreal estate problem 09/08/06

Real Estate - Odd Todd (Video) 09/08/06

Buyers' housing hopes improve 09/07/06

U.S. Home Prices May Fall as Inventories Favor Buyers (Update1) 09/07/06

[plasticsundance]

14. Ford to seek 30% cut in salaried, other costs: WSJ

SAN FRANCISCO (MarketWatch) -- Ford Motor Co. (F :
will try to cut white-collar staffing, benefits and other costs by 30% as part of a larger restructuring plan, according to a media report late Tuesday. The Detroit-based automaker's board is expected to begin reviewing the restructuring effort tomorrow, the Wall Street Journal reported in its Web site, citing sources. Ford will aim to cut back mostly on managers and supervisors, and the cuts will take place through the rest of this year and into 2007, the report said. The company has about 35,000 salaried workers in the U.S. Details of the cost-cutting efforts could be disclosed as soon as Friday. Ford's board is also expected to hear details about a new vehicle pricing strategy, the Journal reported

[UpInArms]

15. daily dollar watch

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

Last trade 86.00 Change +0.06 (+0.07%)

Record Trade Deficit Doesn't Hold Dollar Down

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/Record_Trade_Deficit_Doesn_t_Hold_1158100327280.html

US Dollar

Trade in the US dollar was not what initial fundamentals would suggest. Though the day was sprinkled with a number of smaller indicators, the real event risk fell to July’s trade balance. Against expectations of a modest increase to a $65.5 billion shortfall, the deficit instead printed a record $68.0 billion. The minutes after the release colored the dollar with volatility though, when all was said and down, the dollar ended the day higher in most of the majors. How can the dollar find a bid on record imports at $188 billion and the first contraction in exports in five months? Largely because of expectations. It is common knowledge that the monthly trade report is a lagging indicator, and if the major components weighing in on the old read are already known to have alleviated in the succeeding months, then expectations for an improvement will already be factored in. This temporary burden for July was obviously petroleum imports, which left the specific category with a $28.4 billion shortfall as crude oil soared to an all-time high above $78. Since then, market participants have seen oil prices drop markedly from that high and positioning has been adjusted to reflect this. Elsewhere, San Francisco Fed President stuck to her claim that policy “must have a bias toward further firming,” which was very similar to her comments last week. Official remarks will meet its pinnacle tomorrow when Treasury Secretary Paulson speaks about the international economy in Washington. This could offer clues into what he will say when he travels to China in the weeks ahead to discuss trade imbalances.

...more...

Where The Dollar's Concerns Lie

http://www.dailyfx.com/story/dailyfx_financial_markets_headlines/Where_The_Dollar_s_Concerns_Lie_1158079985900.html

Dollar bulls seemed unfazed by today’s record-setting trade deficit as the currency produced a modest spat of volatility though no direction was forged. This left fundamentalists wondering if the trade imbalance is still one of the principal concerns in the broader currency market, or whether it was merely special circumstances buffering this month’s report.

Action was consistent throughout the dollar-backed majors, as the basket index passed the New York session with little movement. The EURUSD contained in a range between 1.2700 and 1.2730, though the data release forced fluctuations and pegged a new 1.2670 low. Yen weakness helped the greenback stay on its steady path in the USDJPY pairing as the 117.40 – 117.70 overnight band slowly gave way to a 117.85 high by mid-day in North America. A pound rebound seemed little affected by dollar-side fluctuation as the GBPUSD pushed 110 from the morning’s low to 1.8770. Finally, the made yet another 95 point run on its resistance around 1.2500, and once again it held.

No longer were market participants concerning themselves solely on the basis of non-voting Fed presidents, as they instead positioned themselves in the run up today’s trade report. According to the Commerce Department’s numbers, the long-held shortfall in trade of goods and services ballooned to a record $68 billion in the month of July. An immediately recognizable number to the masses, the deficit was initially taken for a very bearish sign for the world’s largest economy. This reaction was reasonable given economic growth is already struggling with internal issues of expansion such as housing and consumer spending. However, after the shock of the headline number wore out, traders actually looked to push the dollar higher. While it could be inferred that this reaction was proof that US trade accounts are no longer market moving, the more prudent explanation is the data was digested with a grain of salt as expectations for August’s balance were already targeting a contraction. Breaking the July balance into its components, imports rose 1.0 percent to a record $188 billion while shipments abroad dropped for the first time in five months by 1.1 percent to $120 billion. Both sides were largely influenced by only a few transitory subcomponents. For imports, record crude oil prices pressed the petroleum product group to a weighty $28.4 billion shortfall. Conversely, an 18 percent drop in aircraft and 3.7 percent drop in capital goods shipments were the leading elements for the contraction in the export group. Looking ahead, the market is already privy to the large sell off in crude oil prices through August and so far into September. Also, a drop in US consumer confidence and renewed optimism in global growth found over the month should help to right the trade figure somewhat for August and beyond. For the afternoon, Fed watchers will tune into voting San-Francisco Fed President Janet Yellen who will give her economic outlook at a 19:35 GMT speech. Given her colleagues comments yesterday, the market is expecting a soft bias for the economy with a well-placed warning covering the high level of core inflation.

...more...

So - the "dollar" now looks to Friday's CPI number - why? So "it" can ignore that, too?

These people just crack me up. When will they realize that there is absolutely nothing that means anything in the financial world any longer. It is all hinged on faking everyone out - manipulating the markets; stocks, commodities and forex - so badly that pretty soon, we all shall believe that up is down, black is white and war is peace.

My time is short once again - have to go away for the day - will be back in after the dust has settled.

Have a great day everyone! :hi:

[UpInArms]

17. Treasuries up as cheaper oil seen curbing inflation

What inflation!?! Weren't we shown report after report that emphatically stated there was no inflation!?!

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-09-13T130534Z_01_N13181056_RTRIDST_0_MARKETS-BONDS.XML

NEW YORK, Sept 13 (Reuters) - U.S. Treasury debt prices mostly rose on Wednesday as recent declines in oil prices helped alleviate bond investors' inflation concerns.

Buying and selling of Treasuries associated with a heavy calendar of corporate bond issuance is expected to be another catalyst for the market in a light economic data session, strategists said.

U.S. crude was trading modestly higher Wednesday morning, but was still below $64 per barrel <CLc1>, off nearly 19 percent from a record peak above $78 per barrel in mid-July.

"We continue to see good demand in the long end of the curve from both the U.S. players and overseas," wrote Andrew Brenner, head of global fixed-income at Hapoalim Securities in New York. "Lower oil prices are forcing inflation down ... gas at the pumps is off 14 percent in the last month ... this will pressure all the inflation numbers lower this fall," Brenner added.

Long maturities respond particularly closely to inflation expectations, which erode a bond's value over time.

...more...

Now I really really really do have to run!

:hi:

[Dogmudgeon]

20. Suppose this oil price drop is temporary?

I am not particularly gladdened by volatile economic conditions. Cheaper oil is nice, but in the context of a high-volatility economy, it's just another signal that the feces are starting to hit the fan.

So, what do I consider to be "good"? Stable market conditions without massive fluctuations of any kind. I realize that it's an impossible situation, but by the same token, short-term spikes and valleys should not fool anyone who's keeping an eye on the long view.

--p!

[54anickel]

28. OPEC: High and volatile prices may be new norm

http://www.boston.com/business/globe/articles/2006/09/13/opec_high_and_volatile_prices_may_be_new_norm/

VIENNA -- High and volatile crude costs may signal ``a new price era," a senior OPEC official said yesterday, insisting that the 11-nation cartel is doing all it can to bring prices down to more reasonable levels.

The comments came as oil prices fell almost 3 percent yesterday, dropping below $64 a barrel as worldwide demand and supply threats ease. After a seven-day sell-off, crude futures are at their lowest since late March.

Mohammed Barkindo, acting secretary-general of the Organization of Petroleum Exporting Countries, defended the group's Monday decision to keep its production target steady at 28 million barrels a day.

OPEC made clear that it would keep close tabs on prices, which have recently fallen to five-month lows, and consider a cut in output quotas this year.

Barkindo said a key reason was high commercial inventories, which he said totaled 1.2 billion barrels -- the largest stocks since 1997. Although crude has dropped by about $12 a barrel since midsummer, prices overall have increased fourfold since 2001, he said.

``It is the volatility that should most concern the industry," Barkindo told a post-meeting conference in Vienna, cautioning that the fluctuations could herald ``a new price era."

more...


World economies face risks from oil and housing, IMF says
http://www.iht.com/articles/2006/09/12/business/imf.php

VIENNA A slowing U.S. housing market and the possibility of a major oil supply disruption are two of the biggest risks to economies worldwide, the head of the International Monetary Fund, Rodrigo Rato, said Tuesday.

In a speech here underscoring the importance of stable oil flows to economic growth, he also said moves by some oil-producing countries to raise taxes on international oil companies or change contract terms could result in investment cuts by the companies.

snip>

Iran's disagreement with the United Nations Security Council over its uranium enrichment program has raised concerns about a cut in oil supplies. Elsewhere, militants have shut a quarter of oil output in Africa's biggest oil producer, Nigeria. Iraq's exports also remain vulnerable to sabotage.

Rato called on governments of oil- producing countries to ensure that their polices encouraged investment and spread risk between themselves and the companies drilling for oil.

A trend to resource nationalism is gathering pace in Venezuela, Bolivia, Chad, Algeria and Russia. Emboldened by high oil prices, governments are seeking more cash and control from multinationals that drill in their oil and gas fields.

more...


edit to add links to a couple more articles on the IMF warnings

IMF: risk of global crash is increasing
http://news.independent.co.uk/business/analysis_and_features/article1523194.ece

snip>

The GFSR report showed that while long-run inflation expectations in the US have picked up, the inflation-related risk premium that investors are forced to pay has declined. "Should these gains erode and risk premiums for unexpected inflation increase, asset markets could come under pressure with potentially negative consequences for the real economy," it said.

Meanwhile, oil prices jumped more than a dollar a barrel yesterday, ending a run of recent declines. US oil prices broke back through $66 a barrel after a foiled attack on the US embassy in Damascus.

Unsurprisingly, the IMF did not give estimates for the financial implications of a dollar crash. But last month it published research by a leading economist that found, with a 10 per cent fall in the dollar, US stocks and bonds would wipe out $1.2 trillion of wealth held for foreigners.

The research found that UK investors held $471bn of US assets, the second largest in the world behind Japan. However, a national 10 per cent slump in asset prices would wipe out the equivalent of 5 per cent of GDP compared with almost 15 per cent in Italy.

The IMF did highlight consensus forecasts yesterday showing even an orderly decline in the dollar would not be shared equally across the world. The forecasts showed the fall would be absorbed entirely by a rise in the currencies of Japan, China, Korea, Taiwan, Singapore and Malaysia. On a general note, the IMF said the financial system had withstood a fall in prices and a rise in volatility in May after an unexpectedly large rise in inflation.

more...


IMF Identifies Risk of `Disorderly' U.S. Dollar Drop (Update1)
http://www.bloomberg.com/apps/news?pid=20601085&sid=aYXu7ScpRXC4&refer=europe

Sept. 12 (Bloomberg) -- A ``disorderly'' drop in the dollar is the biggest risk to world financial markets, the International Monetary Fund said, urging policy makers to prepare and act quickly when asset prices slump.

Investors are buying U.S. bonds under the assumption that the dollar won't slide, and a drop in the currency might turn into a rout as foreign investors and central banks move to cut losses, the global financial watchdog said.

``A low-probability but potentially high-cost risk to the global financial system is that a dollar decline could become self-reinforcing and hence disorderly,'' the IMF said in its Global Financial Stability Report today.

Last week, IMF Managing Director Rodrigo De Rato singled out lopsided global trade and investment flows, protectionist sentiment and high energy prices as sources of concern to an otherwise benign outlook for the global economy. The IMF says the U.S. current account deficit, running at a record rate, needs to narrow.

more...

[54anickel]

34. A Strange Inverse Relationship

http://www.321gold.com/editorials/saville/saville091206.html

During much of the period between August of 2001 and July of 2003 one of the major concerns in the financial world was that deflation had become a legitimate threat. In fact, the fear of deflation became so pronounced during 2002 that Greenspan felt the need to wheel-out Ben Bernanke to discuss, in very blunt terms, the Fed's ability to devalue the currency by creating unlimited amounts of the stuff. Furthermore, the Fed, which has often attempted to paint itself as an inflation-fighter, began publicly worrying about an unwelcome FALL in inflation. Interestingly, however, and as reflected by the following chart of year-over-year M2 growth, the TROUGH in inflation fears coincided with the PEAK in actual inflation (money supply growth).

Around the middle of 2003 the fear of deflation quickly began to evaporate and prices began to rise. In fact, there was such a turnaround in sentiment that by the second quarter of 2004 inflation was once again viewed to be 'public enemy number one'. Sentiment had done a 180-degree turn due to surges in the prices of commodities, equities and houses, as well as signs that the labour market was becoming quite strong. However, with reference again to the following M2 chart notice that the re-emergence of the inflation bogey in the minds of market participants occurred after actual inflation had fallen to a relatively low level.

The inverse correlation between actual inflation and fear of inflation that's been evident over the past several years is not as strange as it might appear to be at first glance. It arises due to four main reasons: First, because there is usually a substantial time delay between the cause (growth in the money supply, a.k.a. inflation) and the effect (an increase in prices). Second, because the effects of inflation are almost always non-uniform (different prices are affected in different ways at different times). Third, because most people have been conditioned to view rising prices as the problem rather than as an effect of the problem. And fourth, because the Fed and all other modern central banks react to what's happening with prices (they frame their monetary policies in response to the lagged effects of the inflation rather than to the inflation itself)*.

So, what we end up getting is the following cycle:

snip>

In a world where counter-cyclical monetary policy dominates and where "Keynesian economists" are well respected, more inflation will always be the prescribed remedy for the problems caused by inflation. This is partly because so few people recognise the underlying cause of the problem and partly because many of the ones who do perceive the true cause think that it's better to implement a 'bandaid solution' that allows the game to continue for a while than to implement a long-term fix.

At the current time the financial world appears to have just entered Stage 5 in the above cycle, although things are precariously balanced. In particular, if the gold price were to break above its May high over the next 2 months -- not something we expect but certainly not something we can rule out -- then the markets and the Fed would likely shift back to Stage 4 (the Fed would resume its rate-hiking to prevent inflation fears from getting out of hand).

more...

[AnneD]

21. Bristol-Myers fires its CEO

http://www.chron.com/disp/story.mpl/business/4182836.html

NEW YORK — Bristol-Myers Squibb Co. on Tuesday ousted Peter Dolan as chief executive at the urging of a federal monitor, who found that the drug maker's patent deal with a generic competitor violated an agreement with prosecutors. In an apparent move to reassure investors, it also decided to maintain its high-profile dividend.

Several analysts and investors had speculated whether the board would keep its 28-cents-a-share dividend given its recent lowered earnings forecast as sales of Plavix, its best-selling drug, tumbled because of earlier-than-expected competition from a cheaper generic pill.

<snip>

Earlier in the day, Bristol-Myers ousted Dolan, 50, after five years as CEO and said its general counsel, Richard Willard, would leave the company.

<snip>

The apparent last straw was Dolan and Willard's conduct stemming from a failed agreement between Sanofi-Aventis, Bristol-Myers' partner for the drug Plavix, and Canadian drug maker Apotex to keep a lower-priced generic version of the best-selling blood thinner off the market. The agreement soured when state attorneys general refused to sign off on it.

I guess all that money from their Medicare drug sales was not enough......:eyes:

[Tace]

22. Welcome To The Insane Hell Of Fractional-Reserve Banking! (Mogambo Guru)

Richard Daughty, the angriest guy in economics -- World News Trust

Sept. 12, 2006 -- My sense of humor is gone, joining my hair and youth in Mogambo Heaven, replaced by a sense of panic, and I'm really, really, really starting to get freaked out here. Today, for example, I am freaked because this housing bubble has stopped expanding, because that means less profits are being made, just like all the other times when all the other bubbles deflated.

But perhaps you will understand my Mogambo Screeching Hysteria (MSH) when Richard Russell, of the Dow Theory Letters, writes, "The latest Economist magazine includes an article entitled, 'What's That Hissing Sound?' A paragraph from the article runs as follows; 'The boom has lifted the (U.S.) economy in three ways: it has boosted residential construction: it has made people feel wealthier and so encouraged them to spend more; and it has allowed home-owners to use their property as a gigantic cash machine, taking out money by borrowing against their capital gains. Merrill Lynch estimates that the three together accounted for more than half of America's total GDP growth since last year.'" Half! Half!! Half!!!

And a Reuters article sports the headline, "Risk of U.S. recession growing: HSBC." The article reveals that, "Investment bank HSBC has revised downward its forecast for 2007 economic growth and cautioned that the risk of an outright recession is growing as a retreat in housing threatens household balance sheets."

Then, I guess to "leave 'em laughing," they quote two economists named Stephen King and Ian Morris. While these guys may be real hotshots about modern economics as they know it, they don't know squat about modern economics as I know it, as they prove when the article continues, "In the last recession, a massive round of tax cuts and a super-loose monetary policy helped the economy get a second wind. Americans will have no such luck this time around, King and Morris warn." Hahahaha! The American government can't have another round of tax cuts and super-loose monetary policy to juice the economy? Hahaha! Who's going to stop them? You? Hahahaha!

This is also probably pretty funny to Chris Laird, of the Prudent Squirrel newsletter, who writes, "As financial markets start to show big stress, the central banks and plunge protection teams are going to spend a gigantic sum of money trying to support them. Previous economic collapses have not had the present battery of coordinated central banks and programs such as plunge protection teams to manage their crashes. We now are in a situation where, the next time we have major stock drops, these CB's and PPT's are going to pull out all stops to try and stop a stock panic."

more

http://www.worldnewstrust.com/content/view/134/lang,en/

[54anickel]

23. From Know-How to Nowhere

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=58130

A weakened U.S. economy shouldn't surprise anyone. It is a direct result of the questionable nature of the so-called economic recovery. Any other country faced with these many imbalances would have collapsed long ago. But the U.S. dollar was spared this fate when Asian central banks began accumulating the dollars needed to avoid rises in their currencies.

Both the United States and China practice credit excess, but with a crucial difference: In the United States, the credit excesses went into higher asset prices and, more notably, into personal consumption.

In Asia, credit excesses went into capital investment and production. The result is an odd disparity between the two economies: Americans borrow and consume, and the Asians produce. This symbiosis plays out in the trade gap. Ironically, this ever growing problem is ignored on the national level and plays virtually no role in U.S. economic policy or analysis. In the second quarter of 2004, the increase in the trade gap subtracted 1.37 percentage points from GDP (based on domestic demand growth). In comparison, during the 1980s, policy makers and economists worried about the harm that trade deficits were causing in U.S. manufacturing.

In a September 1985 move orchestrated by James Baker, the U.S. Treasury secretary, the finance ministers of the G-5 nations agreed to drive the dollar sharply down in concerted action. By the mid-1990s U.S. policy makers decided that trade deficits were beneficial for the U.S. economy and its financial markets.

Cheap imports were playing an important role in preventing inflation and, as a result, higher interest rates. Had the decision been to allow interest rates to rise, it would have had the effect of slowing down consumer spending. Instead, spending is out of control and the trade gap is the consequence. Ultimately, the victim in all of this is going to be the U.S. dollar.

more...

[54anickel]

24. 11:15 numbers and yada

Dow 11,504.33 +6.24 (+0.05%)
Nasdaq 2,219.33 +3.51 (+0.16%)
S&P 500 1,313.88 +0.77 (+0.06%)
10-yr Bond 4.757 -0.016 (-0.34%)
30-yr Bond 4.89 -0.015 (-0.31%)
NYSE Volume 863,816,000
Nasdaq Volume 708,090,000

11:00 am : Market is still struggling to find its footing as mixed weekly oil data don't leave investors convinced that a seven-day downturn in crude futures to five-month lows will be enough to prompt policy makers to remain on hold with their tightening efforts when they meet again one week from today. Even though the larger than expected build in distillates is bearish for oil and bullish for stocks, especially as the focus switches to heating oil heading into the winter months and away from having summer-sufficient gasoline supplies, a sense that the commodity is oversold at current levels has kept a slight bid in oil futures. DJ30 +2.56 NASDAQ +0.09 SP500 -0.54 NASDAQ Dec/Adv/Vol 1279/1380/550 mln NYSE Dec/Adv/Vol 1244/1727/380 mln

10:30 am : Not much has changed since the last update as the indices remain in a holding pattern heading into the EIA's oil report. With no notable economic data to sift through, leaving the stock market overly sensitive to commodity price swings, investors are waiting for any movement in crude oil futures ($64.25 a barrel +$0.49) to set a more definitive tone to this morning's action. DJ30 +4.65 NASDAQ +5.87 SP500 +070 NASDAQ Dec/Adv/Vol 1134/1410/378 mln NYSE Dec/Adv/Vol 1127/1758/254 mln

10:00 am : Major averages inch into the green but industry leadership remains mixed. Providing most of what little support the blue chip indices are getting has been a 0.9% gain in Energy, which accounts for three of this morning's top five performers (e.g. Oil & Gas Equipment +2.3%, Explorers +1.8% and Drillers +1.6%). The Nasdaq is turning in a slightly better performance but gains are also modest at best and most of that support is coming from a few mid-cap stocks (e.g. FLEX +3.1%, JNPR +3.1%, MNST +1.8%) following positive analyst commentary. DJ30 +3.28 NASDAQ +6.28 SP500 +0.98 XOI +0.5% NASDAQ Dec/Adv/Vol 1096/1192/240 mln NYSE Dec/Adv/Vol 1151/1319/146 mln

09:40 am : Given the scope of yesterday's broad-based rally, a sense that stocks are overbought at current levels has prompted some early profit-taking and left stocks struggling to gain much momentum at the onset of trading. To wit, the Dow is coming off a 101-point performance while the Nasdaq's 2.0% surge yesterday to a three-month high also invites some early consolidation as investors wait to see if this morning's weekly oil inventories data (10:30 ET) can push the commodity lower for an eighth straight day. Crude oil futures are currently up 0.8% at $64.24 a barrel, which is also sidelining buyers in the early going.DJ30 -12.17 NASDAQ -2.01 SP500 -0.71 NASDAQ Vol 82 mln NYSE Vol 66 mln

09:15 am : S&P futures vs fair value: -1.0. Nasdaq futures vs fair value: flat.

09:00 am : S&P futures vs fair value: -0.6. Nasdaq futures vs fair value: +0.5. Expectations for a relatively flat start for the cash market remain intact as the absence of notable economic data and no earnings reports other than Lehman's better than expected results leave the door open for commodity price swings to set a more definitive tone for trading today. On the corporate news front, Ford Motor (F) is climbing in pre-market action amid reports it will cut white-collar salary costs by as much as 30%; but Dow components Merck (MRK) and Hewlett-Packard (HPQ) are under modest pressure after two medical studies found that Vioxx poses increased kidney and arrhythmia risks while California's Attorney General said he has enough evidence to indict H-P officials.

08:30 am : S&P futures vs fair value: -0.6. Nasdaq futures vs fair value: flat. Still shaping up to be a sluggish start for stocks as the futures market languishes around the unchanged mark. However, Lehman Brothers Holdings (LEH) topping analysts' expectations, along with follow-through buying in Treasuries pushing yields lower, do bode well for the influential Financials sector. Leadership within Energy, as oil prices rebound from seven days of losses ahead of the Energy Dept.'s weekly inventories report (10:30 ET), may also offer some early market support that has been absent all week.

08:00 am : S&P futures vs fair value: -1.0. Nasdaq futures vs fair value: -1.0. With the Dow rallying more than 100 points to its best level since mid May yesterday and the Nasdaq soaring 2.0% to three-month highs and into positive territory for the year, it isn't all that surprising to see early indications pointing to some early profit taking. However, with the S&P 500 and Nasdaq 100 futures just slightly below fair value, pre-market losses offer little conviction that such consolidation will carry into the close since the futures market has signaled a lower start for stocks over the last two days only to have the bulls eventually take control and close the indices higher each time.

06:28 am : S&P futures vs fair value: -1.0. Nasdaq futures vs fair value: -1.0.

06:28 am : FTSE...5905.10...+9.60...+0.2%. DAX...5894.29...+20.44...+0.3%.

06:28 am : Nikkei...15750.05...+30.71...+0.2%. Hang Seng...17210.04...+134.64...+0.8%.

[54anickel]

25. Credit-Card Users, Hurt at U.S. Gas Pump, May Sap Retail Sales

http://www.bloomberg.com/apps/news?pid=20601103&sid=aNhBDjda.awQ&refer=us

snip>

As energy costs and interest rates mount and the real estate market weakens, U.S. retailers may have to worry about shoppers like Cuevas. Average monthly credit-card payments stayed at about $175 in the four months through July, yet balances surged by a third to $1,600, the most in at least seven years, according to America's Research Group. Consumers were paying more for gasoline and groceries, the survey firm found.

That may hurt retailers during the pivotal holiday season, probably leaving holiday sales unchanged from last year or even leading to a decline, said Ryan Larson, head trader at Chicago- based Voyageur Asset Management, which manages $9 billion.

``Consumers have been spending beyond their means,'' said economist Bill Hampel at Credit Union National Association, a trade group in Madison, Wisconsin. ``Retailers will be sailing into the wind.''

While the average retail price of regular gasoline has dropped 14 percent to $2.62 a gallon in the week ended Sept. 11 since reaching a record of $3.04 in the week ended Aug. 7, pump prices still are about 42 percent higher than the average price of $1.85 in 2004, according to U.S. Energy Department data.

America's Research, based in Charleston, South Carolina, surveyed 1,000 adults each in March, May and July. It found that the percentage of shoppers who said they feel pressure from credit card bills doubled to 43 percent in July, from March.

more...

[54anickel]

26. Flush With Jobs, Wyoming Woos Rust Belt Labor

http://www.nytimes.com/2006/09/13/us/13rust.html?_r=2&ref=business&oref=slogin&oref=slogin

snip>

Labor-starved Wyoming, with its energy boom in coal, oil and natural gas, is vigorously courting the workers of the Rust Belt — in particular, those in Michigan’s struggling auto industry. And the workers are responding, and adjusting to a very different life in the West.

Wyoming economic development officials and company representatives are planning their third recruiting trip this year, visiting job fairs next month in Flint, Lansing and Grand Rapids. A billboard depicting a lush Wyoming will go up on the highway outside Flint later this month and be seen by an estimated 65,000 people a day.

“Michigan has been very good for us,” said Ruth Benson, the director of the Campbell County Economic Development Corporation, who has twice led recruiting expeditions to depressed cities in Michigan.

So far, about 1,500 Michigan residents have signed up to receive job postings through the Wyoming work force Web site, and at least several hundred, employers and recruiters say, have moved to the state.

more...

[AnneD]

40. You should see the deals they give for key workers....

4 years ago, they were so hurting for Nurses, an LVN got a sweetheart relocation deal. They paid for his move from NM, he got a loan for a down payment on a house that would be forgiven after a few years (10K ttl,2k forgiven each year). The down side....you have to live in Wyoming. Apologies to folks that like to live there. I don't mind living in the rural areas and I don't mind deserts (heck I lived in NM and loved it), but Wyo. is just not my cup of tea. I guess it's the Cheney factor.:rofl:

[54anickel]

27. Imports at U.S. Ports Hit Record High

http://www.latimes.com/business/la-fi-port13sep13,1,677189.story?coll=la-headlines-business

Los Angeles, Long Beach and seven other top U.S. ports handled a record amount of inbound cargo in July, eclipsing the high-water mark set in October, traditionally the busiest month because retailers are bringing in goods for the holiday season.

"The system is handling volumes that have never been seen before, thanks mainly to continued growth in the demand for Asian imports," said Paul Bingham, an economist at Global Insight Inc., a Boston-based economic forecaster that tracks port performance for the nation's largest retailers.

The nine ports in July received the equivalent of 1.38 million 20-foot cargo containers, breaking the record of 1.37 million boxes, according to a report released Tuesday. Despite the growing volume of incoming containers, shippers aren't running into much congestion, Global Insight reported.

Nowhere is the surge more evident than in Los Angeles, the nation's largest port, where overall cargo traffic is running more than 10% ahead of last year's record pace. At Long Beach, the No. 2 U.S. port, container traffic is up nearly 9% from year-earlier levels. July imports reached 404,665 containers in Los Angeles and 305,117 in Long Beach, the report said.

"These figures reflect continuing strength in the consumer market," said Jim MacLellan, marketing director for the Los Angeles port. The port also is seeing a surge in exports such as wastepaper, metal scrap and animal feed.

more...

[54anickel]

29. Paulson backs Sarbox study

http://www.ft.com/cms/s/5ce2b324-4274-11db-8dc3-0000779e2340.html

US treasury secretary Hank Paulson on Tuesday threw his weight behind a new group of US businessmen and academics formed to study why US capital markets are losing ground to foreign rivals amid concern over the effects of Sarbanes-Oxley legislation.

The 17-member Committee on Capital Markets Regulation is the second such high-profile group to be formed since the US Chamber of Commerce launched a similar initiative last year.

They are a sign of increasing clamour in the US business community for a re-examination of SOX, whose Section 404 internal audit control provisions have been widely criticised as being too onerous.

The new committee will be directed by Hal Scott, Nomura Professor at Harvard Law School, and co-chaired by Glenn Hubbard, dean of Columbia Business School, and John Thornton, chairman of the board of the Brookings Institution.

It will “assess the degree to which US public markets are losing ground to foreign and private markets, the causes of this decline, and its impact on the financial industry and the economy”.

Its brief reflects concerns that the ability of foreign jurisdictions to attract capital by offering “lighter touch” regulatory environments may permanently erode America’s lead in “capital formation” – a phrase that encompasses stock market listings to derivatives trading.

more...


Paulson Calls for China Economic Reforms
http://biz.yahoo.com/ap/060913/paulson_china.html?.v=7

WASHINGTON (AP) -- Treasury Secretary Henry Paulson said Wednesday that he will urge the Chinese to move more quickly to adopt economic reforms, including a more flexible currency.
But in his first speech on the international economy since joining the Bush Cabinet in July, Paulson stressed that the administration will oppose efforts in Congress to punish China for a soaring trade gap with the United States.

"Protectionist policies do not work and the collateral damage from these policies is high," he said. "We will not heed the siren songs of protectionism and isolationism."

Paulson sought to lower expectations that he will achieve any major breakthroughs when he visits Beijing for two days of talks with Chinese officials next week. He stressed, instead, that he would discuss economic reforms that the Chinese need to pursue that would benefit the Chinese economy.

snip>

He mentioned the currency issue only as one of a number of economic reforms that China needed to pursue. He said that China also needed to modernize its rural economy, overhaul its capital markets and promote more domestic-led growth by getting Chinese families to reduce extremely high savings rates by spending more.

And Paulson specifically said that the administration would oppose any efforts to erect trade barriers in this country to deal with America's soaring trade deficit, which is on track to set a fifth consecutive record this year.

snip>

Paulson said both the United States and China needed to guard against wrong-headed policies that would seek to backtrack on globalization.

"Both in China and in the United States, we must not allow ourselves to be captured by harmful political rhetoric or those who engage in political demagoguery," Paulson said.

He said the United States has nothing to fear from China's emergence as a global economic power, one that is expected to overtake the United States as the world's largest economy at some point in the coming decades.

more...

[54anickel]

30. Regulator urges new rules for Fannie and Freddie

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B7EC9F3E5%2D6911%2D4CD4%2DA3D2%2DCC94A3263B38%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

WASHINGTON (MarketWatch) -- Uncertainty about the future of government sponsored mortgage finance companies Fannie Mae and Freddie Mac will continue if Congress does not enact new rules for the companies, a federal regulator said Wednesday.

The Office of Federal Housing Enterprise Oversight needs broader powers over the companies, director James Lockhart said in prepared remarks to the American Enterprise Institute.

snip>

Lawmakers have been trying for months to craft a stronger regulator for the companies, which both weathered accounting scandals and are trying to get back to regular financial reporting.

But with few days left in the legislative calendar before elections in November, getting a bill out of Congress this year is looking increasingly unlikely.

Lockhart has previously said reforming the two big companies will take years.

more...

[54anickel]

35. Global Speed Trap (Roach)

http://www.morganstanley.com/GEFdata/digests/20060911-mon.html

The hyper-speed of IT enabled globalization remains one of the most powerful, but least understood, forces at work in today’s world economy. It drives accelerated cross-border linkages through trade flows of goods and now services. It also drives an increasingly vigorous global labor arbitrage. With this speed come equally powerful implications -- both for financial markets in the form of inflationary headwinds and for the global body politic in the form of a political backlash and protectionist risks. Those who blindly extol the supposed win-win virtues of globalization risk overlooking the pitfalls of the global speed trap.

This globalization is different. A century ago, the world was also in the midst of a flourishing globalization -- a Golden Age of accelerated cross-border capital mobility and rapidly expanding international trade. It was brought to an end by a hugely disruptive confluence of geopolitical and internal shocks -- two world wars, the Great Depression, and a virulent protectionism. While it lasted -- roughly from 1880 to 1914 -- the global economy went through a dramatic transformation. But there are three critical differences that distinguish this globalization from its antecedent of a century ago -- its financing, breadth, and speed. Understanding these distinctions is essential if we are to succeed in making this globalization work.

The financial dimension of the current globalization is the mirror image of that which occurred 100 years ago. Back then, the great power -- Britain -- was a lender to the developing world, with current account surpluses that averaged about 4.5% of GDP over the 1880 to 1914 period. By contrast, today’s great power -- the United States -- is a net borrower from the developing world, with a current account deficit that hit a record of nearly 6.5% of GDP in 2005. The notion of poor countries saving to support excess consumption of the rich is antithetical to everything we have been taught about the long history of economic development and globalization.

The “breadth factor” is also very different today than it was in the first globalization. Back then, cross-border integration on the real side of the global economy was concentrated in the exchange of tangible manufactured products. Today, there is an added and very important twist: The current wave of globalization does not just involve tradable goods but also includes once nontradable intangibles -- largely knowledge-based services of white-collar workers.

The speed factor continues to impress me as the most unique characteristic of this globalization. It is an outgrowth of a revolutionary IT-enabled connectivity that has brought the world together as never before. That’s certainly true of tradable goods, where IT capabilities have revolutionized global price discovery and the logistics of supply chain management that sit at the center of global manufacturing platforms. Ironically, the IT-enabled upgrading of port security that occurred in the aftermath of 9-11 appears to have led to faster processing and delivery (see the World Bank’s Doing Business 2007: How to Reform). Moreover, many knowledge-based services can now be delivered on a real-time basis through IT-enabled pipelines to desktops anywhere in the world. Five years ago, such services offshoring was concentrated in the low-value functions of call centers and data processing; today, it involves much higher-valued functionality in engineering, design, software programming, accounting, medical expertise, legal assistance, financial analysis, as well as a broad array of consulting activities. In essence, the globalization of 100 years ago was a physical integration of the global economy -- with cross-border delivery of manufactured products flowing through a costly infrastructure of ships, railroads, and eventually roads. Today’s globalization is both physical and knowledge-based -- augmented by the new infrastructure of a ubiquitous and relatively inexpensive e-based delivery system.

more....

[54anickel]

36. Magnifying the Trivial (Hussman)

http://www.hussmanfunds.com/wmc/wmc060910.htm

During my years in academia, there was a line that went “why are the disputes in academia so fierce?” The answer – “because the stakes are so low.”

It's not unusual for people to magnify trivial differences when the stakes themselves are trivial. Call it a scarcity mentality. My impression is that this sort of mentality is present in the financial markets here.

Over the past two-and-a-half years, returns to both Treasury bonds and the S&P 500 have been well below-average. Interest rate levels are still muted despite wage pressures and other inflationary indications. With no persistent benefit from capital gains, fixed income investors have been stretching for yield, allowing risky corporate bonds to trade at nearly the same yields as default-free Treasuries. In effect, investors are taking higher risks precisely because the stakes are so low. Of course, the potential negative outcomes could substantially exceed the extra interest margin these investors are receiving, but it's historically been the nature of junk bond investors to stand around in smoky rooms until they actually see the fire.

From its intermediate peak on March 5, 2004, the S&P 500 has earned scarcely more than the 3-month Treasury bill yield (on any given day, the exact figure ranges between 2-3% annualized, depending on whether the market is at a short-term peak or trough). Yet every trivial advance to a temporary peak is hailed by analysts and floor reporters as if the stock market is “breaking out” and soaring without bounds.

snip>

The recent inflation data is another area in which investors are magnifying the trivial. For the most part, the excitement about “moderating inflation” in recent weeks has been based on the thinnest “positive” surprises, generally on the order of rounding error. Last week's upward revision in 2 nd quarter unit labor costs threw a bit of cold water on that excitement, as year-over-year figures exceeded 5%.

Given that initial disappointment in the “inflation is going away” thesis, Friday's CPI data will be interesting. Yield curve inversions, as we have at present, have historically been associated with much higher short-term inflation pressures than normal yield curves. The consensus estimate is for a 0.2% increase in the August CPI. My guess (which we don't invest on and neither should you) is that the actual figure will come in well above that. In any case, despite the fact that monthly CPI data is fairly noisy, a favorable surprise may be harder to come by this time around.

more...

[54anickel]

37. OT - Top soldier quits as blundering campaign turns into 'pointless' war

http://www.timesonline.co.uk/article/0,,2087-2350795,00.html

THE former aide-de-camp to the commander of the British taskforce in southern Afghanistan has described the campaign in Helmand province as “a textbook case of how to screw up a counter-insurgency”.

“Having a big old fight is pointless and just making things worse,” said Captain Leo Docherty, of the Scots Guards, who became so disillusioned that he quit the army last month.

“All those people whose homes have been destroyed and sons killed are going to turn against the British,” he said. “It’s a pretty clear equation — if people are losing homes and poppy fields, they will go and fight. I certainly would.

“We’ve been grotesquely clumsy — we’ve said we’ll be different to the Americans who were bombing and strafing villages, then behaved exactly like them.”

Docherty’s criticisms, the first from an officer who has served in Helmand, came during the worst week so far for British troops in Afghanistan, with the loss of 18 men.

more...

[54anickel]

38. 12:34 lunchtime check

Dow 11,530.99 +32.90 (+0.29%)
Nasdaq 2,224.98 +9.16 (+0.41%)
S&P 500 1,317.05 +3.94 (+0.30%)
10-yr Bond 4.747 -0.026 (-0.54%)
30-yr Bond 4.88 -0.025 (-0.51%)
NYSE Volume 1,305,829,000
Nasdaq Volume 1,009,264,000

12:30 pm : Stocks kick off the afternoon session making another push to intraday highs, spearheaded in part by a turnaround in Technology. Google (GOOG 404.30 +12.40) surging 3.2% to its best levels since mid July is among the most notable movers helping the Nasdaq break through its 200-day moving average (2223). Continued momentum in Energy, as oil prices trade near the upper end of today's range ($63.50 to $64.50), is also behind the broader market's recent advance to its best levels of the day. DJ30 +34.65 DOT +0.5% NASDAQ +9.28 SP500 +4.10 XOI +1.7% NASDAQ Dec/Adv/Vol 1166/1639/970 mln NYSE Dec/Adv/Vol 1096/2044/756 mln

12:00 pm : Market is clinging to modest gains midday as investors weigh another strong earnings report against a rebound in oil prices.

Before the bell, Lehman Brothers (LEH 69.18 +1.16) became the second brokerage firm in as many days to top analysts' expectations which, in addition to another decline in borrowing costs, has provided some support for the S&P 500's most influential sector -- Financials. The 10-year note (+05/32) yield is down to 4.74% as bonds.

Providing most of what little buying interest the blue chip indices are getting, though, can be attributed to renewed enthusiasm for the beaten-down Energy sector, which accounts for three of this morning's top five performers (e.g. Oil & Gas Equipment +3.0%, Explorers +2.7% and Drillers +2.5%). Oil prices have been volatile all morning but are currently up 0.8% at $64.24 a barrel, as a sense that the commodity is oversold following seven straight down days overshadows a larger than expected build in weekly distillate inventories. The Industrials sector is also an influential leader to the upside as transportation stocks shrug off the rebound in oil and tack a 2.0% gain onto yesterday's 3.3% surge (e.g. Railroads +2.8%).

Be that as it may, given the scope of yesterday's broad-based rally, some profit-taking in notable areas like Consumer Staples (e.g. Drug Retail -2.2%) and Technology, as well as weakness in Health Care after two medical studies found that Merck's (MRK 41.19 -0.96) Vioxx poses increased kidney and arrhythmia risks, have kept market gains at a minimum. Technology is under modest pressure amid consolidation in chip stocks (e.g. TXN -2.1%) and weakness from Dow component Hewlett-Packard (HPQ 36.22 -0.70) after California's attorney general said he has sufficient evidence to indict company officials while investigating whether or not H-P illegally obtained private phone records.DJ30 +12.97 DJTA +2.0% NASDAQ +6.39 SOX -0.7% SP500 +2.05 XOI +1.9% NASDAQ Dec/Adv/Vol 1260/1509/846 mln NYSE Dec/Adv/Vol 1153/1956/634 mln

11:30 am : Indices regain some upward momentum but there still isn't a strong sense of conviction on the part of buyers. Oil prices briefly turning negative and the Energy sector maintaining the bulk of its gains (+1.6%) is offering some notable support. Couple that with a turnaround in Financials, which has been fueled by another solid report from the brokerage space -- Lehman Brothers (LEH 69.16 +1.14) beat forecasts earlier and is extending yesterday's 4.2% advance -- as well as falling bond yields, and stocks are flirting with fresh session highs. DJ30 +11.85 NASDAQ +6.58 SP500 +1.81 XOI +1.5% NASDAQ Dec/Adv/Vol 1257/1456/710 mln NYSE Dec/Adv/Vol 1251/1785/514 mln

[54anickel]

41. Moral Hazard (Gold-buggy and tin foil recommended)

http://www.kitco.com/ind/Murphy/sep112006.html

"Well, what I just want to talk about for a few minutes is the various efforts that are going on in public and behind the scenes by the Fed and other government officials to guard against a free-fall in the markets...perhaps most important, there's been--the Fed in 1989 created what is called a plunge protection team, which is the Federal Reserve, big major banks, representatives of the New York Stock Exchange and the other exchanges, and there--they have been meeting informally so far, and they have kind of an informal agreement among major banks to come in and start to buy stock if there appears to be a problem. They have, in the past, acted more formally" ... former Clinton adviser George Stephanopoulos, September 17, 2001 on ABC Good Morning America

GO GATA!

The entire US financial market system has become a total joke. While US interest rates dropped again, the dollar soared and gold and silver were trashed. Naturally, after two down days, the US stock market came in a fair amount higher and stayed that way.

The only solace on a day such as this is that if you are watching CNBC, or listening to other Planet Wall Street apologists, you have no clue as to what is really happening here. Fortunately, I received this email last evening re a web posting which says it all. It is so Planet GATA and detailed that I am making it the feature of this MIDAS commentary. It says it all about what is going on, what lies ahead, and supports EVERYTHING brought your way over the last 7 years by the GATA camp:

snip>

Recently I started reading Robert Rubin's book, 'In an Uncertain World'. As Secretary of the Treasury during the Clinton Administration, I thought I would try to get in the mind of one of the principals of the group we call the Plunge Protection Team (PPT). In the book he writes about his service at the White House. The book starts off with the Mexican Bailout and discusses that bailout and those that followed from the perspective of Mr. Rubin. After the first few pages he uses the term and defines 'moral hazard'.

MORAL HAZARD - A problem whereas investors, after being insulated from the consequences of risk by intervention, might pay insufficient attention to similar risk the next time, or operate on the expectation of official intervention.

We traders know this government intervention more as the 'Greenspan Put'.

more...

[54anickel]

42. 1:58 update

Dow 11,528.91 +30.82 (+0.27%)
Nasdaq 2,223.84 +8.02 (+0.36%)
S&P 500 1,317.29 +4.18 (+0.32%)
10-yr Bond 4.757 -0.016 (-0.34%)
30-yr Bond 4.886 -0.019 (-0.39%)
NYSE Volume 1,700,038,000
Nasdaq Volume 1,266,367,000

1:30 pm : Major averages settle into a relatively tight trading range as investors lack any catalysts outside of oil prices and action in the bond market to more aggressively move stocks in either direction. Meanwhile, investors will have a monthly Treasury Budget report to digest at the top of the hour, but since the data can be predicted with reasonable accuracy, the market rarely pays any attention to this report. DJ30 +21.45 NASDAQ +5.03 SP500 +2.71 NASDAQ Dec/Adv/Vol 1207/1666/1.14 bln NYSE Dec/Adv/Vol 1074/2116/918 mln

1:00 pm : Indices back off their best levels as the tech sector's recent recovery is short-lived. The PHLX Semiconductor Sector Index retracing earlier lows remains Technology's (-0.2%) biggest hurdle. Further deterioration in Consumer Staples, as Drug Retail (-2.8%) and Household Products (-1.9%) become the day's two worst performing S&P industry groups, is also responsible for taking some steam of the market's attempts to extend yesterday's impressive run-up. Tobacco (-1.0%) and Soft Drinks (-0.8%) are also among the session's ten worst performers.DJ30 +22.41 NASDAQ +5.87 SOX -0.7% SP500 +2.93 NASDAQ Dec/Adv/Vol 1181/1675/1.06 bln NYSE Dec/Adv/Vol 1040/2114/848 mln

[54anickel]

43. 3:35 update

Dow 11,546.84 +48.75 (+0.42%)
Nasdaq 2,225.06 +9.24 (+0.42%)
S&P 500 1,317.95 +4.84 (+0.37%)
10-yr Bond 4.765 -0.008 (-0.17%)
30-yr Bond 4.899 -0.006 (-0.12%)
NYSE Volume 2,278,898,000
Nasdaq Volume 1,660,012,000

3:30 pm : Sellers return from the sidelines going into the close, but buyers still have the upper hand as the major averages maintain modest gains. Among the most noticeable reason for the recent pullback has been a reversal in Technology, led by further consolidation on the PHLX Semiconductor Sector Index (e.g. BRCM -1.9%, MRVL -2.4%, MU -2.9%, and TER -2.5%), which is up more than 6% since Monday, and the AMEX Computer Hardware recently inching into negative territory (e.g. HPQ -1.9%).DJ30 +42.67 NASDAQ +7.56 SOX -1.0% SP500 +4.11 NASDAQ Dec/Adv/Vol 1223/1745/1.57 bln NYSE Dec/Adv/Vol 1104/2150/1.32 bln

3:00 pm : Having recently broken through key resistance levels of 11,535 and 1318, the Dow and S&P 500, respectively, are now matching the Nasdaq's 0.5% intraday performance, which suggests that program trading is behind some of today's follow-through buying interest. Continued enthusiasm for equities is further reflected in the A/D line, as advancers on the NYSE outpace decliners by a more than 2-to-1 margin while those on the Nasdaq hold a 17-to-11 edge. DJ30 +61.56 NASDAQ +11.47 SP500 +6.08 NASDAQ Dec/Adv/Vol 1164/1785/1.43 bln NYSE Dec/Adv/Vol 1064/2165/1.21 bln

2:30 pm : Buyers remain in control of the action as the market continues to put together a solid advance, especially after such an impressive performance yesterday. Aside from the strong rebound in Energy, Financials (+0.7%) trading near its best levels of the day and extending yesterday's 1.2% advance is also providing notable leadership. The AMEX Securities Broker/Dealer Index, fueled by Lehman Brothers' (LEH 70.45 +2.43) better than expected report, continues to break out to new three-month highs, so far tacking a 2.7% gain onto Tuesday's 3.2% surge. DJ30 +37.14 NASDAQ +9.22 SP500 +4.11 NASDAQ Dec/Adv/Vol 1131/1791/1.33 bln NYSE Dec/Adv/Vol 1044/2168/1.10 bln

2:00 pm : More of the same for stocks as the indices hold onto the bulk of intraday gains which have been inspired in part by renewed leadership in Energy. Even though higher oil prices still pose a threat to overall inflation, the commodity merely recouping some of the 2.8% sell-off yesterday that led to oil's seventh straight decline and fueling an impressive 2.3% gain in the profit engine that is the Energy sector further underscores the more optimistic tone in the market which supports our newly-revised market view on U.S. equities to Moderately Bullish. Crude oil futures are now up 1.4% at $64.66 a barrel, near their best levels of the day.DJ30 +30.02 NASDAQ +7.81 SP500 +4.12 XOI +2.0% NASDAQ Dec/Adv/Vol 1168/1710/1.25 bln NYSE Dec/Adv/Vol 1051/2152/1.0 bln

[mojavekid]

45. Kelantan to launch Gold Dinar coin

http://www.btimes.com.my/Thursday/Corporate/BT586346.txt

The Kelantan State Goverment will launch its Kelantan Gold Dinar (DEK) coin, a savings and investment instrument which it hopes would one day be accepted by the local business community as a legal tender.

snip..

After its launch, the gold coins, which were once widely used as currency during the Islamic Empire in the Middle

East, will be priced according to the global price of gold.

State Public Administration, Economic Planning, Finance and Community Development committee chairman Datuk Husam Musa stressed that the coins are not a form of alternative currency.

"But if the local business community decides to accept it as a form of legal tender, then there is nothing we can do about it," Husam told reporters in Kota Baru yesterday, adding that two local hotels and a supermarket have agreed to accept the coins as a form of legal tender in emergencies.

more at link..

[54anickel]

46. Where is that gold dinar?

Hi Mojavekid :hi:

Wednesday 24 November 2004

When Malaysian prime minister Mahathir Muhamad last November retired from his 22 years in power at age 77, I had hoped he would devote his energies to a monetary reform of the Islamic world built around a gold dinar.

But after a few speeches and press releases on this subject, he has disappeared, practically dropping out of sight.

With the dollar price of gold now soaring and the US dollar sinking against the euro, the whole world could now make good use of Mahathir's idea, but what happened to it?

US Federal Reserve Chairman Alan Greenspan last week shook the financial and commodity markets with his comments at a banking conference in Frankfurt, saying the dollar would continue to fall against other currencies because of US trade deficits.

But if the United States had a gold dollar, this could not happen, and Greenspan, who I have known personally for 32 years, knows this.

Because the dollar "floats", with no gold anchor, it has been launched into a new inflationary cycle, one that threatens to drag all of Asia into another inflation through the dollar's links to the Chinese and Hong Kong currencies.

It is worthwhile thinking about Mahathir's inspiration as well as his failure, and how another run at a gold dinar might work with a different design.

more...

[54anickel]

47. Closing...(started this post 3 hours ago - got called away)

Dow 11,543.32 +45.23 (+0.39%)
Nasdaq 2,227.67 +11.85 (+0.53%)
S&P 500 1,318.07 +4.96 (+0.38%)
10-yr Bond 4.765 -0.008 (-0.17%)
30-yr Bond 4.899 -0.006 (-0.12%)
NYSE Volume 2,667,616,000
Nasdaq Volume 1,941,515,000


4:20 pm : For a fourth straight day, investors continued to see the value of owning equities as more confidence in corporate profitability helped offset a rebound in oil prices.

Before the market opened, Lehman Brothers Holdings (LEH 70.10 +2.08) became the latest brokerage firm to beat analysts' expectations, as surprising equity trading gains in a seasonally weak third quarter and management saying Lehman's pipeline of new deals remains at record levels overshadowed a slowdown in investment banking activity. That news, in addition to another decline in borrowing costs, provided some notable support for the S&P 500's most influential sector -- Financials -- which we recently upgraded to Overweight from Market Weight. The 10-year yield closed at 4.76% as the absence of any economic data to potentially disrupt the ongoing belief that the Fed will remain on hold when it meets again one week from today kept bond traders in buying mode.

As has been the case over the last several weeks, with money rotating out of oil stocks and into underperforming areas like semiconductors, the bulls most aggressively revisited the Energy sector (+1.7%), which paced the way higher Wednesday as a sense that oil was oversold offset a larger than expected build in weekly distillate inventories.

Fortunately for the bulls, oil's rebound was merely a technical bounce following seven straight days of declines including yesterday's 2.8% sell-off. Also, such maneuvering back into beaten-down Drillers (+3.1%) and Explorers (+2.4%) -- two of today's top ten performers -- did not result in the Technology sector sacrificing much in the way of leadership. The latter sector finished flat but that was largely due to a 1.5% pullback in Dow component Hewlett-Packard (HPQ 36.37 -0.55) after California's attorney general said he has sufficient evidence to indict company officials while investigating whether or not H-P illegally obtained private phone records.

The Industrials sector was another influential leader to the upside as transportation stocks shrugged off the rebound in oil and tacked a 1.9% gain onto Tuesday's 3.3% surge. Railroads turned in the day's best performance (+3.4%).

Among the only two sectors losing ground Wednesday, Consumer Staples paced the way lower as its defensive characteristics became less favorable in light of the market's more optimistic underlying tone. Health Care was also weak as drug stocks came under pressure after two medical studies found that Merck's (MRK 41.08 -1.07) Vioxx poses increased kidney and arrhythmia risks. BTK +0.4% DJ30 +45.23 DJTA +1.9% DJUA +0.4% DOT +0.6% NASDAQ +11.85 NQ100 +0.5% R2K +0.7% SOX -0.8% SP400 +0.9% SP500 +4.96 XOI +1.4% NASDAQ Dec/Adv/Vol 1120/1870/1.87 bln NYSE Dec/Adv/Vol 1078/2191/1.56 bln


Good night all :hi: