STOCK MARKET WATCH, Thursday September 28

[ozymandius]

Thursday September 28, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 846 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2101 DAYS
WHERE'S OSAMA BIN-LADEN? 1807 DAYS
DAYS SINCE ENRON COLLAPSE = 1768
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 27, 2006

Dow... 11,689.24 +19.85 (+0.17%)
Nasdaq... 2,263.39 +2.05 (+0.09%)
S&P 500... 1,336.59 +0.25 (+0.02%)
Gold future... 603.30 +6.20 (+1.04%)
30-Year Bond 4.73% +0.02 (+0.45%)
10-Yr Bond... 4.59% +0.01 (+0.20%)






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

[HereSince1628]

1. Oh, today's editorial cartoon!! n/t

[ozymandius]

9. A stunningly callous comment from our tin horn dictator. n/t

[Danascot]

73. How do you ask a soldier

to die for a comma?

[ozymandius]

2. WrapUp by Chris Sumner

FUNDAMENTAL REVIEW: SUPPLY/DEMAND

"Gold is money, and nothing else." ~ J.P. Morgan

The recent downturn in many tangible asset areas has made many question their investment thesis. As I stand in place for Mike Hartman on today's Market Wrap-Up, I'd like to take the time to review the big picture before commenting on today's market actions. The amount of financial and economic commentary out in the world today is amazing! Within the resource investment sector alone we see hundreds of newsletters, articles, shows and commentary filled with technical and fundamental comments, many aimed at the short term. While I do believe many commodities or hard assets may overextend themselves and require one to take gains (we've heard a lot of negativity towards the base metals and logically so after such a run), we all might be better served if we occasionally clear our heads of some of the noise and focus on the larger picture.

-cut-

Inflating any fiat (paper) currency transfers wealth from the creditor to the debtor. As central banks continue to inflate currencies (i.e., increase the supply of credit and money supply) to finance debtor governments, the inflation can manifest itself in various asset classes. In this "complex series of steps-the banks accept (government bonds) in place of tangible assets and treat (them) as if they were an actual deposit". <2> This increase in "liquidity" is happening, has been happening and it will continue to happen as best said by our current Federal Reserve Chairman in 2002. <3> The booming equity markets and housing markets in the 80's and 90's obviously benefited from this "liquidity" (again, increased money and credit). However, in the past 8 years the US stock indexes have remained flat with low yields while the investor in "things" has done very well. An objective person should note the move of liquidity into tangible asset-related companies and commodities obviously as a hedge against inflation and because the supply/demand relationships for many "things" point to higher prices.

So here is the rub. The biggest supply of any asset today (bubble) is obviously United States denominated debt instruments (this includes the dollar and the creation of many dollar denominated derivatives). Somewhere, another United States denominated bond holder is going to learn the fact that their AAA rated bond does have one form of a credit risk (the default buy inflation/debasement). It's like my poor friends in the military; they will get their pensions (they lent their time, not their money to the United States Defense Department) but it's unknown whether their future pension payments will keep up with the devaluation of the currency. While I honor technical analysis and enjoy the insight of those who consult with us (such as the very bright Frank Barbera) I think we would all be best served by also reviewing the fundamentals.

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

[liberal N proud]

3. .

[ozymandius]

4. Today's reports

8:30 AM Chain Deflator-Final Q2
Briefing Forecast 3.3%
Market Expects 3.3%
Prior 3.3%

8:30 AM GDP-Final Q2
Briefing Forecast 2.9%
Market Expects 2.9%
Prior 2.9%

8:30 AM Initial Claims 09/23
Briefing Forecast 315K
Market Expects 315K
Prior 318K

10:00 AM Help-Wanted Index Aug
Briefing Forecast 32
Market Expects 32
Prior 32

[UpInArms]

27. 8:30 Reports:

8:30 AM ET 9/28/06 U.S. Q2 GDP DOWNWARD REVISION DUE TO INVENTORY, TRADE

8:30 AM ET 9/28/06 U.S. Q2 CORPORATE PROFITS UP REVISED 1.4% VS 3.2% PREV EST

8:30 AM ET 9/28/06 U.S. Q2 CORE PCE PRICE INDEX REVISED TO 2.7% VS 2.8% PREV

8:30 AM ET 9/28/06 U.S. Q2 GDP BELOW 2.9% FORECAST

8:30 AM ET 9/28/06 U.S. Q2 GDP UP 2.6% VS 2.9% PREV EST.

8:30 AM ET 9/28/06 U.S. CONTINUING JOBLESS CLAIMS 4-WEEK AVERAGE 2.46 MILLION

8:30 AM ET 9/28/06 U.S. CONTINUING JOBLESS CLAIMS FALL BY 8,000 TO 2.44 MILLION

8:30 AM ET 9/28/06 U.S. WEEKLY INITIAL JOBLESS CLAIMS 4-WEEK AVERAGE 315,500

8:30 AM ET 9/28/06 U.S. WEEKLY INITIAL JOBLESS CLAIMS FALL 6,000 TO 316,000

[UpInArms]

28. Initial Claims @ 316,000 - last wk rev'd up 4k to 322k

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B07C4D3CF%2DAD6C%2D4DDA%2D8A87%2DD31F26D846DD%7D&symbol=

WASHINGTON (MarketWatch) -- First-time claims for state unemployment benefits fell by 6,000 in the latest week, sinking to 316,000, the Labor Department said Thursday.

Continuing jobless claims, meanwhile, fell by 8,000 to stand at 2.44 million, the lowest level seen since July 22.

Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.

First-time claims for the week ended Sept. 16 were revised to 322,000 from 318,000. Read the report.

The four-week moving average of new claims fell by 500, to 315,500, for the week ended Sept. 23.

...more...

[UpInArms]

29. U.S. Q2 GDP revised down to 2.6% rate vs 2.9% prev est

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BD819F1A4%2D5904%2D4434%2DB641%2D28D85EFD0480%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - U.S. real gross domestic product for the second quarter was revised to a gain of 2.6% annualized from the earlier estimate of 2.9%, the Commerce Department said Thursday. Economists surveyed by MarketWatch expected Q2 growth to be unrevised at a 2.9% rate. The revision to second-quarter GDP was largely due to a downward revision to inventory investment and a worsening trade balance. A key measure of inflation was revised lower. Core prices increased 2.7%, down from 2.8% reported earlier. Corporate profits were revised lower. Corporate profits increased 1.4% quarter-to-quarter, down from the 3.2% gain reported earlier. This is the smallest increase in quarterly profits since the third quarter of 2005.

[Ghost Dog]

41. Jobless claims fell by 6,000 last week

http://news.yahoo.com/s/nm/20060928/bs_nm/economy_jobless_dc;_ylt=A0SOwl_H.RtFyBEAtAayBhIF;_ylu=X3oDMTA0cDJlYmhvBHNlYwM-

WASHINGTON (Reuters) - New claims for U.S. jobless aid fell by a slightly more-than-expected 6,000 last week, Labor Department data showed on Thursday, and remained at levels suggesting a stable jobs market.

First-time claims for state unemployment insurance benefits declined to a seasonally adjusted 316,000 in the week ended Sept 23, compared with an upwardly revised 322,000 the prior week.

Analysts polled by Reuters had expected 315,000 new claims last week, after an initially reported 318,000 the week before. New claims have remained in a narrow range for much of the year, indicating the layoff pace has steadied.

The four-week moving average of new claims, which irons out volatile weekly data to provide a better picture of underlying labor market trends, nudged down 500 last week to 315,500.

The number of people who continued to collect jobless benefits after drawing an initial week of aid declined by 8,000 to 2.444 million in the week ended Sept 16, the latest for which figures are available. The fall compared with a forecast for 2.485 million continued claims.

Financial markets will look closely at the claims data for signs of labor market tightness ahead of September's payroll report, due on October 6.

Analysts polled by Reuters forecast 123,000 new jobs were created last month, compared with 128,000 in August, while they see the unemployment rate unchanged at 4.7 percent.

/...

Uh huh...

[ozymandius]

5. Oil prices hover near $63 a barrel

SINGAPORE - Oil prices rose Thursday in Asian trading to hover near $63 a barrel after jumping nearly $2 overnight amid concerns OPEC will cut production if futures prices fell too low.

Analysts said trading was thin, and many market participants were having difficulty finding an explanation for Wednesday's surge, which came despite figures that showed higher-than-expected increases in gasoline and distillate inventories in the U.S. Energy Department's weekly data.

"The rise was too strong if it was purely technical. There's no factor to boost prices above $63 a barrel," said Yoshihiko Inoo, an analyst with brokerage Tokyo Comwealth Inc.

Light, sweet crude for November delivery added 6 cents to $63.02 a barrel in electronic trading on the New York Mercantile Exchange, midmorning in Singapore. The contract settled Wednesday at $62.96 on the New York Mercantile Exchange, a gain of $1.95 for the day.

more

[ozymandius]

6. 7-Eleven, Citgo deny fuel move tied to Chavez jab

HOUSTON (Reuters) - A week after Venezuelan President Hugo Chavez called George W. Bush "the devil," convenience store chain 7-Eleven Inc. said on Wednesday it will stop selling gasoline from Venezuelan-controlled Citgo Petroleum, but both companies denied the actions were linked.

The Dallas, Texas-based company said in a statement it disapproved of Chavez' comments, but a spokeswoman insisted politics were not part of the decision to end its 20-year agreement with Houston-based Citgo Petroleum Corp., a position supported by Venezuelan and Citgo officials.

Chavez angered the White House and its supporters when he called President Bush "the devil" in a September 20 speech at the United Nations and said the podium still reeked of sulfur after a Bush appearance there.

-cut-

The decision to drop Citgo, a subsidiary of Venezuelan national oil company PDVSA, was made well before the speech, she said, and based on 7-Eleven's desire to sell its own branded gasoline.

more

[wakeme2008]

11. CYA now...

"The company said in a statement, "Regardless of politics, we sympathize with many Americans' concern over derogatory comments about our country and its leadership."

http://www.npr.org/templates/story/story.php?storyId=6154806

Certainly Chavez's position and statements over the past year or so didn't tempt us to stay with Citgo," she added. <7-Eleven spokeswoman Margaret Chabris>

http://www.iht.com/articles/ap/2006/09/27/business/NA_FIN_US_7_Eleven_Citgo.php

[trogdor]

26. Idiots.

I don't care what anyone thinks about Chavez (he's got a big mouth, but that's not a crime); I'd rather deal with him than with most of these nutcases in the Middle East. Buying Citgo gas is "keeping it in the family," so to speak.

[ozymandius]

7. Oil steady after surge, eyes OPEC output debate

SINGAPORE (Reuters) - Oil steadied at a seven-day high of just under $63 a barrel on Thursday, following the previous day's $2 leap as traders awaited clearer signs from
OPEC on whether it would cut output to counter swelling U.S. stocks.

U.S. crude shed 4 cents to $62.92 a barrel at 0630 GMT, after having bounced back from a brief slump to Wednesday's $60.10 low on a large build in fuel stocks in the United States.

-cut-

"Prices have gone up because the market was oversold. People are getting worried about prices looking too cheap and that OPEC could step in," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.

-cut-

But Kuwaiti Oil Minister Sheikh Ali al-Jarrah al-Sabah said on Wednesday, that with U.S. crude above $61, most OPEC ministers were content with prices and not inclined now to reduce output.

more

[Ghost Dog]

51. OPEC agrees informal oil output cut: source

http://today.reuters.com/news/articlenews.aspx?type=newsOne&storyID=2006-09-28T163152Z_01_L28469961_RTRUKOC_0_US-ENERGY-OPEC-CUT.xml&WTmodLoc=%22Home-R2-%5bFeed%5d-4
Thu Sep 28, 2006 12:33pm ET

LAGOS (Reuters) - Several key OPEC producers including Saudi Arabia, Kuwait and Nigeria have agreed to trim oil supply from October 1 under an unofficial deal to stem falling prices, a Nigerian oil industry source said on Thursday.

"Nigeria will cut by five percent from October 1 because of the unofficial discussions between OPEC members," the source said, asking not to be named.

/...

[ozymandius]

8. Profit taking drives European stocks lower

European equities turned positive by mid morning on Thursday having opened lower, as M&A activity continued to enthrall the market.

The FTSE Eurofirst 300 gained 0.1 per cent to 1,398.32, while Frankfurt's Xetra Dax added 0.1 per cent to 5,995.08 and the CAC 40 in Paris climbed 0.2 per cent to 5,253.89. London's FTSE 100 gained 0.5 per cent to 5,957.2.

A lacklustre session on Wall Street ended with the Dow Jones Industrial Average just 34 points shy of its record high. The blue-chip indicator gained just 0.2 per cent on the session to 11,689.24, while the Nasdaq Composite added 0.1 per cent to 2,263.39.

German truckmaker MAN gained 3.6 per cent to EU65.55 on rumours that Volkswagen, the German carmaker, was poised to make a bid for the company. MAN has been trying to buy Scania, its Swedish rival in which VW has a major stake. On Tuesday, VW appeared to favour a three-way deal between its own truckmaking division and MAN and Scania.

http://news.yahoo.com/s/ft/20060928/bs_ft/fto092820060546338905

[Ghost Dog]

34. ASIA MARKETS: Tokyo and Sydney advance, paced by Honda, BHP

http://www.marketwatch.com/News/Story/21NCxvThQB3wZ6KMPK6s8Gh?siteid=mktw&dist=TNMostRead

HONG KONG (MarketWatch) -- Asian markets were broadly higher Thursday, with Japan and Australia posting gains for a second day as investors piled into Honda Motor Corp., BHP Billiton Ltd. and energy-related shares after crude-oil prices rebounded.
Japan's Nikkei 225 Average (JP:1804610: news, chart, profile) ended the session 0.5% higher to 16,024.9. The Tokyo Stock Price Index, or Topix, was up 0.7% to 1,602.6.
Elsewhere around the region, Australia's S&P ASX/200 rose 0.4% to 5,115.2, as the mining sector gained for a second day following recent weakness in the commodity sector.
Shares listed in India traded flat. Singapore's Straits Times Index was up 0.1%. Indonesia's Jakarta Composite Index rose 0.3%. New Zealand's leading share index rose 0.4%.
In Taipei, the Weighted Index fell 0.9% to 6,885.1, to rank as the lead declining market. Malaysia's KLSE Composite was up 0.3%. South Korea's Kospi Index was up 0.8%, while the Shanghai Composite Index advanced 0.7%.
Hong Kong's Hang Seng Index gained 0.2% to 17,551.5. The China Enterprises Index, or Hong Kong-listed shares in mainland-incorporated companies, was up 0.6% at 7,113.8.

/more...

[Ghost Dog]

35. China shares end up, boosted by metal stocks

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=urn:newsml:reuters.com:20060928:MTFH64251_2006-09-28_09-18-28_SHA139193&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=HybArt-C1-ArticlePage2

SHANGHAI, Sept 28 (Reuters) - Chinese shares ended up 0.69 percent on Thursday as metal stocks rose in response to strong global gold and copper prices, and property stocks recovered some losses after Shanghai's corruption scandal sent them lower early this week. The benchmark Shanghai composite index closed at 1,736.963 points. Turnover in Shanghai A-shares was a moderate 19.5 billion yuan ($2.5 billion), up from 16.0 billion yuan on Wednesday.

Jiangxi Copper Co. (600362.SS: Quote, Profile, Research), China's top copper producer, rose 0.9 percent to 10.04 yuan. Rival Yunnan Copper (000878.SZ: Quote, Profile, Research) rose 1.94 percent to 10.50 yuan. In Thursday's Asia trade, copper for delivery in three months on the London Metal Exchange <MCU3> rose 0.7 percent to $7,660 a tonne, after a posting a small decline on Wednesday.

Zhongjin Gold Co. (600489.SS: Quote, Profile, Research) climbed 2.76 percent to 17.49 yuan, after gold traded around $600 for the first time in more than two weeks on Thursday.

Some analysts expect the index to linger below 1,750 points, the early July high, on Friday, the last trading day before next week's long national holiday. "The index will edge up right after the long holiday, but it will face quite strong resistance at 1,850 points in the coming two months," said analyst Luo Xiaoming at Ping An Securities.

Sinopec Corp. (600028.SS: Quote, Profile, Research) (0386.HK: Quote, Profile, Research) (SNP.N: Quote, Profile, Research), Asia's largest refiner, will resume trading on Oct. 10 after a suspension for state share reform, and its performance will guide the post-holiday market, traders said.

China Vanke (000002.SZ: Quote, Profile, Research), the biggest listed property stock, climbed 1.37 percent to 7.40 yuan on Thursday, continuing a recovery that began on Wednesday. Analysts believe property stocks have now largely digested the short-term impact of the dismissal of Shanghai Communist Party chief Chen Liangyu. Vanke was suspended for an hour in the morning, as it announced that it expected its net profit for the first three quarters of 2006 to be 50-60 percent higher than last year.

China Merchants Bank (600036.SS: Quote, Profile, Research) (3968.HK: Quote, Profile, Research) A-shares jumped 3.48 percent to 9.8 yuan, after climbing 3.84 percent on Wednesday. The shares had dropped for three straight days on profit-taking after a big run-up before the bank's Hong Kong listing on Friday.

/more...

[Ghost Dog]

37. Yuan continues gains vs dlr, consolidation looms

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=urn:newsml:reuters.com:20060928:MTFH62635_2006-09-28_08-01-45_SHA353586&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=HybArt-C1-ArticlePage2

SHANGHAI, Sept 28 (Reuters) - China's yuan continued its recent strong uptrend and hit a post-revaluation high against the dollar on Thursday, propelled by expectations that Beijing will allow the Chinese currency to rise at a faster pace.

But dealers said a powerful correction is now looming large due in part to the yuan's <CNY=CFXS> recent gains and the dollar's strength on global markets.

"The market appears to be convinced the central bank is willing to allow the yuan to rise at a faster pace," said a dealer at a major domestic commercial bank. "But the market also believes the central bank will reach the goal by widening the yuan's trading band instead of straight-line gains."

Dealers said the yuan could see a powerful correction right after the week-long national holiday next week, and could retreat to 7.94/7.95 to the dollar if the central bank wants to impress the market of its encouragement of two-way trading.

On Thursday, the yuan traded at a post-revaluation high of 7.8954 to the dollar at 0740 GMT, breaching the psychologically important level of 7.9000 for the first time.

/more...

[Ghost Dog]

36. Nikkei tops 16,000 on property, oil stocks

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=urn:newsml:reuters.com:20060928:MTFH62384_2006-09-28_07-51-32_T206625&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=HybArt-C1-ArticlePage3

TOKYO, Sept 28 (Reuters) - The Nikkei average closed above 16,000 for the first time in almost three weeks on Thursday, rising 0.48 percent as property firms continued to recover from a recent slide, while INPEX Holdings Inc. (1605.T: Quote, NEWS, Research) and other energy firms gained after a jump in crude oil prices.

Shares of consumer lenders such as Acom Co. Ltd. (8572.T: Quote, NEWS, Research) rose after Japan's newly appointed financial services minister made comments suggesting he may be opposed to tighter regulation of the industry.

"Shares of real estate firms, banks and trading companies -- stocks that are sensitive to economic cycles -- have rebounded ... as investors have become more positive about the outlook for the U.S. economy," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

An unexpected rise in U.S. August new homes sales data out on Wednesday renewed optimism about consumer spending in the world's largest economy, a key market for Japanese goods.

The Nikkei <.N225> finished 76.98 points higher at 16,024.85, the average's first close above 16,000 since Sept. 8.

The broader TOPIX index <.TOPX> gained 0.72 percent to 1,602.57.

/more...

[Ghost Dog]

47. Typhoon hits power supply in Philippines

http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A280034

(Sapa-AFP) MANILA - More than 40-million people were without electricity today after all power plants on the Philippines’ main island of Luzon were shut down in the wake of damage caused by Typhoon Xangsane, officials said.

Manila lost its electricity supply late morning as Xangsane hammered Luzon with gale force winds and torrential rain, which also closed schools, financial markets and transport services.

Manila Electric, which distributes power to Luzon’s heartland, was advised by the state-run National Transmission Company (Transco) that a "systems blackout" was in place "throughout Luzon," its spokeswoman Dina Lomotan announced on local radio.

She said the shutdown was precautionary as strong winds had toppled transmission pylons and snapped power lines across a wide area of the island.

The shutdown has affected an estimated 43-million people, just less than half the national population of 85-million people.

/...

[Ghost Dog]

40. FTSE extends rally on takeover speculation

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060928:MTFH75897_2006-09-28_16-11-05_L28728542&type=comktNews&rpc=44

LONDON, Sept 28 (Reuters) - Britain's FTSE 100 (.FTSE: Quote, Profile, Research) extended its rebound on Thursday on takeover intrigue, strength in commodity prices and as the index tracked Wall Street shares, which are around record highs.

With oil consolidating around $63 a barrel and gold and base metals rising in its wake, the resources-weighted FTSE index added 41.2 points, or 0.69 percent, to close at 5,971.3 points, extending Wednesday's rally.

As speculation swirled that OPEC could cut output to support crude prices, heavyweights BP (BP.L: Quote, Profile, Research) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research) climbed 1.4 percent while BG Group (BG.L: Quote, Profile, Research) ended 2.6 percent higher.

And with gold breaching $600 an ounce, it was also a good day for miners with Antofagasta (ANTO.L: Quote, Profile, Research) up 1.6 percent, Xstrata (XTA.L: Quote, Profile, Research) up 2.3 percent, and Anglo American (AAL.L: Quote, Profile, Research) and Rio Tinto (RIO.L: Quote, Profile, Research) both gaining around 2 percent. Only Kazakhmys (KAZ.L: Quote, Profile, Research) eased after UBS cut its price target on the stock.

Continuing a recent theme, the index responded to strength in U.S. stocks.

/...

[Ghost Dog]

44. Britain becomes 'never, never land' as personal debt runs out of control

http://money.independent.co.uk/personal_finance/loans_credit/article1768829.ece

UK borrowers account for one third of unsecured debt in western Europe
On average, a Briton has twice the debt of a European
Total consumer debt in the UK is at a record £1.3 trillion
New debt last year came to an unprecedented £215bn
Citizens Advice faced 1.25 million new debt cases last year - the figure is rising

Britain's "buy now, pay later" consumer culture has led to unprecedented levels of personal debt. The average Briton now has more than twice as much unsecured borrowing - including overdrafts, personal loans and credit card debt - as the typical European, according to a report published by Datamonitor.

The market research analysts said yesterday that even before mortgage borrowing was considered, the average Briton owes £3,175, compared to the average debt in Europe of £1,588. Datamonitor said Britons had "an insatiable appetite for credit", taking on new unsecured loans of £215bn last year alone.

Borrowers from the UK now account for a third of all unsecured debt in western Europe, Datamonitor added. Paul Marsh, author of the report, said: "While the UK enjoys a buy-now pay-later culture ... many major European countries have a culture of saving and frugality. Countries such as France and Germany are particularly debt adverse."

The boom in unsecured lending has boosted total consumer debt, including mortgages, to almost £1.3trn, close to three times the level of borrowing in 1997, when Labour came to power.

The consumer borrowing crisis is set to become the most pressing concern for Gordon Brown's successor as Chancellor of the Exchequer. George Osborne, the shadow Chancellor, said: "Gordon Brown is presiding over an economy increasingly built on debt. This has left many families vulnerable to the triple blow of rising mortgage rates, taxes and energy bills."

/article continues...

[Ghost Dog]

54. Sterling dives on inflation calculation error

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B63C559D9%2D740E%2D432C%2D9D7C%2D2B588C6E71FE%7D&siteid=mktw&dist=

NEW YORK (MarketWatch) - The news that the U.K. Office for National Statistics has made a serious error in its inflation data dampened expectations for further interest rate hikes in the U.K. and pushed sterling to two-week lows versus the dollar and euro Thursday.

The ONS admitted Wednesday that it had found a mistake in its computer models. As a result, it cut its estimate for overall inflation for goods and services produced by local companies and government, the so-called GDP deflator, to 2.2% from 3.4% in the second-quarter. It also lowered its estimate for annual inflation in export prices to 0.6% from the original 3.8%.

The revisions showed that "actual U.K. inflationary pressures are far tamer than originally thought," said Boris Schlossberg, senior currency strategist at FXCM. "Expectations of additional rate hikes from the Bank of England have been pared back significantly."

The British pound last changed hands at $1.8734, down 0.9%, after touching $1.8722, the lowest level since Sept. 13. Sterling also touched a two-week low versus the euro, according to Thomson Financial.

ONS officials explained that an error occurred when they were trying to correct the impact of value-added tax (VAT) fraud on trade statistics. "This activity has long bedeviled the monthly goods trade figures but an attempt to correct the problem in the national accounts made it look like exporters had easily raised their prices in the global marketplace," said Paul Guest, senior economist at Moody's Economy.com in London. "The end result was lower nominal GDP growth than everyone, including the Bank of England, initially thought."

The ONS lowered its estimate for growth in national income to 4.8% from a prior 6.0%.

The Bank of England highlighted fast growth in national income as a serious concern in the minutes of its latest monetary-policy meeting. "Annual growth in nominal GDP had been increasing and was now estimated to be 6%, a level consistent with average inflation a little higher than its target," it said. Today's news "fully reverses that view," said Schlossberg.

/...

[Ghost Dog]

49. Europe stocks end little changed after U.S. data

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=eurMktRpt&storyID=2006-09-28T165847Z_01_L28750214_RTRIDST_0_MARKETS-EUROPE-STOCKS-UPDATE-4.XML

PARIS, Sept 28 (Reuters) - European shares ended little changed on Thursday, within 10 points of a new five-year high, as weaker-than-expected U.S. economic growth offset gains spurred by takeover talk and firm energy stocks.

Bid rumours whipped up buying in Spanish construction and services group Sacyr-Vallehermoso (SVO.MC: Quote, Profile, Research), German industrial conglomerate MAN (MANG.DE: Quote, Profile, Research), British insurer Royal & Sun Alliance (RSA.L: Quote, Profile, Research) and UK building materials company Hanson (HNS.L: Quote, Profile, Research).

But weighing on the European equity market was a small sell-off in U.S. shares, after a brief rise of the 110-year-old Dow Jones <.DJI> Industrial Average above its all-time record closing high attracted sellers seeking to lock in profits. The pan-European FTSEurofirst index <.FTEU3> of 300 leading shares ended 0.06 percent higher at 1,398 points, just shy of a near-five-year intraday high of 1,407.52 struck in May. The index has gained 2 percent in the past two days and is up nearly 10 percent so far this year.

A report showing that the cooling U.S. housing market had helped slow growth in the world's biggest economy more steeply than expected in the second quarter, capped sentiment -- even though market players noted the data were backward looking.

<snip>

In Europe, individual stock markets were mixed, with London's FTSE 100 (.FTSE: Quote, Profile, Research) up 0.7 percent as firm oil and metals prices boosted heavily weighted energy <.SXEP> and mining <.SXPP> stocks.

Anglo American (AAL.L: Quote, Profile, Research) gained 2.2 percent. A fund manager at Merrill Lynch Investment Managers said miners were "staggeringly cheap" after shares dropped while metals stayed strong, adding some of their earnings may beat expectations.

But the rest of Europe was weaker, with Paris's CAC 40 <.FCHI> and the Swiss Market Index <.SSMI> up 0.1 percent and 0.04 percent, respectively, while Frankfurt's DAX <.GDAXI> ended 0.01 percent lower, weighed by a 5.6 percent dip in Infineon (IFXGn.DE: Quote, Profile, Research) shares.

The German chipmaker said the planned turnaround of its telecoms chips unit could be delayed after its main customer, BenQ Mobile (2352.TW: Quote, Profile, Research) announced on Thursday that it would file for insolvency in Germany.

/more...

[Ghost Dog]

67. Growth spurt for French economy

http://newsvote.bbc.co.uk/1/hi/business/5388330.stm

The French economy grew at 1.2% during the second quarter - its fastest pace in five and half years - revised official figures have shown.

Growth in the quarter was helped by a strong increase in business investment and consumer spending.

The growth spurt is the latest evidence of the current revival trend in Europe's biggest economies.

Elsewhere, Germany's modest recovery continued, with unemployment dipping by 134,000 to 4.24 million in September.

Insee, the French national statistics office, revised its previous estimate for growth between April and June up to 1.2% from 1.1%. However, first-quarter growth was revised down to 0.4% from 0.5%.

/...

[ozymandius]

10. The Short View: Dow's relevance

By John Authers, Investment Editor

With the Dow Jones Industrial Average passing 11,700 yesterday to close in on its first all-time high in seven years, there is rejoicing on Wall Street. With the world's most recognised index back to form, it is as though Christmas has come early. The best response, with apologies to Charles Dickens, is: "Bah, humbug."

With the advent of index-tracking mutual funds and exchange-traded funds, as well as benchmarking by institutions, far more money is running on the S&P 500. The same is true of the Nasdaq 100, and of the Russell 2000 index of US smaller companies, and many non-US indices. The amount of money devoted to replicating the Dow is minimal.

And with good reason. The Dow consists of only 30 stocks, picked by a committee. It is not a good proxy for large-caps (the Russell Top 50, or the S&P 100, are better) or for any particular sector, or for the US as a whole because it is overweight in "old economy" industrial stocks.

This last factor helps explain its out-performance of the S&P since both indices peaked in early 2000. Another factor is the absurdity that the Dow is weighted according to share price, rather than market capitalisation. This means that stocks which happen to have a higher nominal share price have a greater impact than "cheap" stocks. The number of shares outstanding is irrelevant.

more

[ozymandius]

12. See you later folks.

:donut: :donut: :donut:
Have a great day at the Casino! Doesn't it seem as though there is a huge amount of pricing pressure keeping the Dow short of 11,700?

all things good,
Ozy :hi:

[wordpix]

13. My guess: HP scandal is about $5 billion Army contract not pretexting!

In light of the Congressional probe coming up today, we should discuss this. Congress is awfully quick to investigate HP for pretexting and not a word about the $5 billion contract. I call bullshit!

http://www.wpxi.com/money/9886963/detail.html

HP Awarded $5 Billion Army Contract
Army Will Get Computers, Printers, Scanners

POSTED: 4:04 pm EDT September 19, 2006
UPDATED: 4:11 pm EDT September 19, 2006

SAN FRANCISCO -- Hewlett-Packard Co. said Tuesday it has been awarded a multiyear contract by the Army to provide desktop and notebook personal computers, printers, scanners and displays.

The overall deal is valued at $5 billion over 10 years, Palo Alto, Calif.-based HP said.

The contract allows the Army, the Department of Defense's Foreign Military Sales program, and all federal agencies and authorized government contractors supporting the agencies to order directly from HP. Ordering is expected to open Oct. 1.

Shares of HP slipped 14 cents to $36.26 in afternoon trading Tuesday on the New York Stock Exchange.

Copyright 2006 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

http://www.wpxi.com/money/9886963/detail.html

[UpInArms]

16. Hurd says internal probe turned into 'rogue investigation'

http://www.marketwatch.com/News/Story/Story.aspx?guid={347FA154-515A-4E70-A133-D3ED28526AEA}&siteId=mktw

SAN FRANCISCO (MarketWatch) -- Hewlett-Packard Co. Chief Executive Mark Hurd said a company probe into boardroom leaks began with the best of intentions, but soon turned into a "rogue investigation" that violated the technology giant's core principles, and he vowed to ensure that such an incident would never happen again.

Hurd's comments came in testimony that is set to be delivered Thursday before the House Committee on Energy and Commerce's subcommittee on oversight and investigations. The committee made public the testimony of Hurd and the company's former chairwoman, Patricia Dunn.

Hurd said that the initial investigation into boardroom leaks to the press "began as a proper and serious inquiry," but that certain steps taken by investigators, such as misrepresenting themselves and using board members' Social Security numbers to obtain private phone records, ended up flying in the face of H-P's values.

"It's an age-old story," Hurd said in his statement. "The ends came to justify the means. The investigation team became so focused on finding the source of the leaks that they lost sight of the values of this company.

"There is no excuse for this aberration. ... It happened; it will never happen again."

In separate testimony also released by the committee, Dunn said that the questionable tactics used by the company's board in its leak investigation do not diminish the importance of the board's intent.

...more...

lessons learned at Dimson's tutelage :eyes:

[wordpix]

31. blah, blah, they'd love to hide real reasons for leaks, spying & Congress

ional probe.

A $5 billion Army contract could explain the reason; otherwise, why would board members spy on each other if there weren't a lot of money involved?

[wordpix]

33. the "rogues" are in Congress, I'll bet getting HP's campaign contributions

[UpInArms]

17. Hewlett-Packard general counsel Ann Baskins resigns

Check out the river of denial running through this page

http://www.marketwatch.com/tools/quotes/news.asp?symb=hpq&siteid=mktw&doctype=2006

1:32am 09/28/06 Ex-H.P. Officer to Say She Knew of No Illegality -

1:15am 09/28/06 Key to HP's credibility in hands of new lawyers -

12:01am 09/28/06 $ Dunn Suggests She Was Unaware of Tactics -

11:26pm 09/27/06 $ H-P Stock Sloughs Off Scandal -

...more...

[wordpix]

32. the question is: WHY were they spying on each other? No one's talking

about THAT. And WHY is Congress involved instead of SEC or some other financial-stock market oversight group?

Follow the money and that leads to Congress and its giving a $5 billion Army contract to HP. I wonder which Congressmen got large HP campaign contributions?

[cosmicdot]

72. HP

you got me curious ...

first off, and non-HP related, I found it interesting that Bill Nelson (D-FL)'s Top Contributor is Greenberg Traurig LLP ... isn't that the firm associated with Jack Abramoff???

secondly, the Carlyle Group has given Evan Bayh $31,750
ranking #15 in his top 20 contributors

Murdoch's News Corp ranks #16 on 2006 $ to John Kerry $17,300

the things one learns at opensecrets.org
`````````````````````````````````````````````````````````````````````````

2006

Hewlett-Packard

$216,077

34% to Democrats
62% to GOP
http://www.opensecrets.org/industries/contrib.asp?Ind=B12&cycle=2006


starting from this page
http://www.opensecrets.org/industries/recips.asp?Ind=B12&cycle=2006
and, linking to each of the Top 20 Computers/Internet Recipients
and checking their Top Contributors and PAC donations


George Allen PAC contributions
Hewlett-Packard $3,500


Coming in at #7 in Top Contributors to Orrin Hatch
Hewlett-Packard $25,050

HP PAC $ to Hatch $10,000

basically, looking at top recipients of computer industry $

HP PAC $ to Feinstein $10,000

HP PAC $ to Tom Davis (R-VA) $1,000

HP PAC $ to DeWine $3,000

HP PAC $ to John Ensign (R-NV) $5,500

HP PAC $ to Jim Moran (D-VA) $1,000

HP PAC $ to Zoe Lofgren (D-CA) $2,000

HP PAC $ to Conrad Burns (R-MT) $2,000

HP PAC $ to Joe Lieberman $9,000

HP PAC $ to Lamar Smith (R-TX) $2,000

HP PAC $ to Jerry Lewis (R-CA) $2,000

HP PAC $ to Michael McCaul (R-TX) $2,500

HP PAC $ to Joe Barton (R-TX) $2,500

HP PAC $ to Dennis Hastert (R-IL) $4,500

HP PAC $ to Tom Delay $6,000

HP PAC $ to Rick Larsen (D-WA) $5,000

HP PAC $ to Jeff Bingaman (D-NM) $1,000

HP PAC $ to Ben Nelson (D-NE) $3,500

[wordpix]

74. Thanks! Don't forget, these repukes love to play stock market insider---

There's no one more inside than Congress when you're giving HP a $5 billion contract. Wonder who bought and sold stock in the time frame of that deal???

Hmmm, no wonder no one at HP is talking on Capitol Hill. Patricia Dunn said she was told by many people she "trusted" that it was OK to pretext and spy. I wonder who those "trusted" people could be? US Congress, maybe?

[UpInArms]

14. daily dollar watch

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

Last trade 85.67 Change -0.02 (-0.02%)

Dollar Weakens Slightly After Disappointing Durable Goods and New Homes Sales

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/Dollar_Weakens_Slightly_After_Disappointing_1159392164073.html

US Dollar



This morning’s US economic releases were mostly bearish for the US dollar, yet the greenback sold off only against the Euro and Canadian dollar. This price action is a clear representation of the dull range bound trading that we been trapped in but for those looking for excitement, we want to point out that breakouts and reversals are beginning to happen in currency pairs such as EUR/JPY, NZD/USD, AUD/NZD and AUD/CAD. Most of these are currency crosses and they are usually the more interesting ones to trade when the direction for the US dollar is unclear. Even though orders for durable goods dropped in the month of August, new home sales were revised down to the worst levels since March 2003 in July and mortgage applications fell 4.9 percent over the past week, we still do not have a good enough reason to expect the Federal Reserve to begin cutting interest rates. Tomorrow’s GDP report could shed more like on how the economy is doing, but only if we see a revision to the second quarter release. Unfortunately, more range trading seems to be in the fate of the dollar until October when we receive the latest non-farm payrolls and retail sales reports. On top of that, regional banks are set to announce third quarter earnings beginning in October. We are watching the earnings of regional banks because it will give us a first look at how consumers may be affected by the increase in interest rates. If we see weaker profitability and higher defaults, it will lean the Federal Reserve closer to cutting rates. Part of the Fed’s job is to maintain stability in economic growth and prices, but the other part is to ensure stability in the banking sector. We cover the importance of watching the banking sector in more detail in our special report titled “Watch What the Fed Watches – Banking Sector Update” on www.dailyfx.com.

...more...

Watch What the Fed Watches - Banking Sector Update

http://www.dailyfx.com/story/special_report/special_reports/Watch_What_the_Fed_Watches_1159382522488.html

The big worry in the financial markets right now is housing, but only as it pertains to consumer spending. However, there is a bigger worry that the members of the Federal Reserve are watching very closely and we want you to tune into it as well.

Downgrades of Regional Banks - Housing Bubbles Can Spark Banking Crises

Last month we published a special report highlighting the importance of monitoring the banking sector as a leading indicator of where the Federal Reserve will take interest rates. Bubbles in the housing markets have often led to painful banking crises in many different countries around the world and the fear is that the current bubble will cause the same effect as well. This past Monday, banking regulators have already reported that the number of problematic loans held byU.S. banks is on the rise. Compared to a year ago, loans that have a high risk of being defaulted on increased from 5.1 percent to 4.8 percent a year ago. The biggest concentration of these loans is in the automobile industry, hedge funds, brokerages and insurance companies. As defaults on loans worsen, we will see the impact on the profitability of regional banks, but loans to corporations are not the only problem.

Loans to individuals are also at risk of being defaulted on. The most common new mortgage held by millions of households in the United States is the payment option ARM (Adjustable Rate Mortgage) that allows borrowers to pick from a menu of selections. They can choose to fully amortize the loan, pay interest only or opt for the most dangerous choice of all by paying only a portion of the interest payments due each month - known as a negative amortization loan. In plain English this means that the size of the borrower’s mortgage actually increases over time because the unpaid interest payments continue to compound and accrue as liabilities. However, faced with escalating housing prices and stagnant wages, many US consumers have opted for the negative amortization option as a means of buying a home. Until now, most neg- amortization purchasers have enjoyed the benefit of rising house prices which allowed then to extract mortgage equity from their homes and in effect “grow out of their debts” yet, with housing market cooling rapidly as days of double digit year on year gains clearly over, this strategy is no longer a viable solution.

<snip>

Another serious concern that the Federal Reserve is watching is the extreme speculative nature of the financial industry. News of the Amaranth loss brings painful reminders of LTCM. In order to bail LTCM out, Greenspan surprised the market with an interest rate cut and followed the reduction with 2 more rate cuts. Federal Reserve President Tim Geithner has already expressed the Fed’s concern about the large holdings of hedge funds in financial and commodity markets and how these positions are primarily financed by the banking system. The fear is that if these positions move against the hedge fund, it can cause a big credit risk for the financial sector as a whole and hurt not only the hedge fund, but also the banks that lend to it. The Federal Reserve is regularly in touch with the nation’s banks and given that this speech came shortly before the announcement of the Amaranth loss, we are sure that they are keenly aware of the problems brewing. The sharp rise in oil was far too attractive for hedge funds to ignore. We suspect that many more funds have leveraged bets on oil and are facing similar problems, albeit on a smaller and less newsworthy scale. If defaults begin to become more widespread, the Federal Reserve may have to step in to stimulate the economy and increase liquidity, just like they did in 1998.

...more...

[Ghost Dog]

38. FOREX-Euro firm on hawkish ECB, trims gains on (Japan) MOF remarks

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060928:MTFH68525_2006-09-28_12-02-26_L28661364&type=comktNews&rpc=44

LONDON, Sept 28 (Reuters) - The euro hit one-week highs versus the yen on Thursday after hawkish comments from European Central Bank policymakers cemented expectations of two more euro zone interest rate increases this year.

The single currency briefly trimmed gains after Japanese Vice Finance Minister Hideto Fujii said recent movements in the euro/yen exchange rate had been "a bit rough".

European Central Bank Governing Council member Axel Weber said in remarks published on Wednesday that falling oil prices do not give the all-clear on inflation risks in the 12-nation bloc, and further rate rises from the current 3.0 percent are still needed. Another Council member, Nicholas Garganas, said further interest rate increases are needed if the euro zone economy continues growing at full tilt, with inflation above 2 percent.

"Both are singing from the same hymn sheet. It's not sensible for rates to remain on hold purely because of the recent decrease in oil prices," said Adrian Hughes, currency strategist at Societe Generale. "Central bankers are not worried about inflation today, but the future inflation profile. We see softer-than-expected CPI data but as M3 showed there are still loose credit conditions."

The euro hit a one-week high of 149.76 yen <EURJPY=> before trimming gains to 149.41 by 1140 GMT, up 0.15 percent on the day. It was up 0.15 percent at $1.2717 <EUR=>. The dollar was steady at 117.50 yen

<snip>

ECB Executive Board member Jose Manuel Gonzalez-Paramo speaks at 1500 GMT in London.

M3 data on Wednesday showed lending to business in August matched record peaks and money supply also rose unexpectedly, bolstering the case for further interest rate rises.

/more...

[Ghost Dog]

43. Dollar, Gold Up in Europe

http://asia.news.yahoo.com/060928/ap/d8kdupvo0.html

The U.S. dollar was higher against most other major currencies in European trading Thursday. Gold rose.

The euro bought $1.2684, down from $1.2704 late Wednesday in New York. Later, in midday trading in New York, the euro fetched $1.2694.

Other dollar rates in Europe, compared with late Wednesday, included 117.88 Japanese yen, up from 117.45; 1.2482 Swiss francs, up from 1.2437; and 1.1112 Canadian dollars, up from 1.1104.

The British pound traded at $1.8732, down from $1.8885.

In midday New York trading, the dollar bought 117.81 yen and 1.2474 Swiss francs, while the pound was worth $1.8739.

Gold traded in London at $604.40, up from $591.30 late Wednesday.

<snip>

Silver traded in London at $11.60 per troy ounce, up from $11.40.

/...

[UpInArms]

15. Denial Report: No recession from Calif. housing slowdown-report

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-09-28T075745Z_01_N27348147_RTRIDST_0_ECONOMY-CALIFORNIA-FORECAST.XML

SAN FRANCISCO, Sept 28 (Reuters) - The slowdown of California's housing market has become a drag on the state's economy as home building and financing payrolls thin, but the most populous U.S. state will avoid recession through 2008, according to a UCLA Anderson Forecast report.

The report, released on Thursday, projected California will through 2008 post overall payroll growth of around 1 percent, a rate similar to that in the first half of this year.

"The housing market has continued to soften and real estate-related employment has moved from a major engine of growth in 2005 to a drag on growth in 2006," the report said.

"Looking forward, the forecast calls for a similar picture," the report said. "Real estate sectors will continue to decline, but without significant declines in another sector, the net result will be a slowdown, not a recession."

Building permits in California will continue to decline, hitting bottom in 2008, the report noted.

A separate report by the economic forecasting group predicted that while home sales in California fall, home prices will not.

...more...

Wow! These spinners really must have some tasty kool-aid! First there was no housing slowdown and now there will be no recession :eyes:

Also, if sales fall, prices are likely to follow that trend. Unless... black is white, up is down and war is peace.

[UpInArms]

18. China's Geely may make cars in U.S. -chairman

http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyid=2006-09-28T095709Z_01_SHA304327_RTRUKOC_0_US-AUTOS-CHINA-GEELY.xml&src=rss

SHANGHAI (Reuters) - Chinese car maker Geely Automobile Holdings Ltd. (0175.HK: Quote, Profile, Research) is considering whether to make cars in the United States, its chairman and founder said on Thursday.

Geely had previously announced a plan to sell cars in the United States as early as 2008.

"We could do that in several ways, and (U.S. production) is an option," Li Shufu told Reuters in an interview. Geely may also ship cars to the U.S. market from China, Li added without elaborating.

He said Geely aimed to export nearly 20,000 cars this year, mostly to developing countries, and that exports could double in 2007. Previously, the company had set an export target for this year of 10,000 cars.

[UpInArms]

19. S.E.C Accuses 3 Ex-Officers at Reinsurer of Fraud

http://www.nytimes.com/2006/09/28/business/28insure.html?ex=1317096000&en=c753455be8e94b10&ei=5088&partner=rssnyt&emc=rss

The Securities and Exchange Commission has accused three former executives of RenaissanceRe Holdings, a reinsurance company based in Bermuda, of practicing fraudulent accounting to improve earnings reports.

The three former executives are James Stanard, the former chief executive; Martin Merritt, the former controller; and Michael Cash, who had been senior vice president for specialty reinsurance at a subsidiary.

They were accused of abusing reinsurance accounting to defer more than $26 million of earnings from 2001 to later years, the S.E.C. said in a lawsuit filed yesterday in United States District Court in New York.

“The defendants enabled RenRe to take excess revenue from one good year and, in effect, ‘park’ it with a counterparty so it would be available to bring back in a future year when the company’s financial picture was not as bright,” said Mark Schonfeld, director of the Northeast regional office of the S.E.C.

RenaissanceRe restated earnings for 2001 to 2004 last year, and Mr. Stanard, Mr. Cash and the company had been warned of possible S.E.C. suits against them as state and federal regulators expanded an industrywide investigation of reinsurance, which is coverage of one insurer by another.

...more...

One of the most interesting things to contemplate is the years of the infractions. Most of the cases brought forth are for these years - compliance definitely dropped as soon as Dimson and his minions destroyed the oversight abilities of every office in our government.

[UpInArms]

20. Bank of America Acknowledges Illicit Funds Moved Through a Manhattan Branc

http://www.nytimes.com/2006/09/28/business/28bank.html?ei=5088&en=f95822009c591a31&ex=1317096000&adxnnl=1&partner=rssnyt&emc=rss&adxnnlx=1159444861-fro7sf7SVZGL6xRgz9tz6g

Bank of America acknowledged yesterday that its lax operations allowed South American money launderers to illegally move $3 billion through a single Midtown Manhattan branch, closing the latest illicit-finance investigation brought by Robert M. Morgenthau, the Manhattan district attorney.

Mr. Morgenthau said he hoped the settlement would encourage the federal government to do more to track illicit money transfers, including terrorist financing.

No indictment was sought “because we don’t want to put banks out of business,” Mr. Morgenthau said.

Bank of America, in a statement, said that it “takes seriously its anti-money laundering obligations” and that it “never knowingly does business with persons, organizations or businesses engaged in illegal activities and did not in this case.”

Most of the funds came from Brazil via a licensed money transmitter in Uruguay and then to the Bank of America branch, which allowed funds to reach unlicensed money transfer firms in the area, Mr. Morgenthau said. He noted that the area where Brazil borders Uruguay has been identified by federal authorities as a hot spot of suspected terrorist financing.

Mr. Morgenthau said he could not tie any of the $19 billion in laundered money directly to terrorists and he said that fact should be a cause for alarm.\

...more...

Morenthau was the investigating prosecutor during the BCCI scandal

http://www.washingtonmonthly.com/features/2004/0409.sirota.html

[UpInArms]

21. Former Chief of Comverse Is Arrested in Namibia

http://www.nytimes.com/2006/09/28/business/28fugitive.html?ex=1317096000&en=53a1ed25642c64b0&ei=5088&partner=rssnyt&emc=rss

Life on the run ended early yesterday for Jacob Alexander, the former chief executive of Comverse Technology, after he was arrested by local authorities in Windhoek, the capital of Namibia in southwestern Africa.

Mr. Alexander, also known as Kobi, is expected to be brought before a court in Namibia, possibly as soon as today, and the United States intends to seek his extradition to face charges stemming from a scheme to backdate stock option grants at Comverse, according to the United States attorney’s office in Brooklyn.

Once back in the United States, Mr. Alexander, 54, will face conspiracy, securities fraud and money-laundering charges, according to a 32-count indictment against him that was unsealed yesterday. Prosecutors are also seeking forfeiture of $138 million in bank accounts or other assets held by Mr. Alexander.

<snip>

Mr. Alexander’s fortunes had turned earlier this spring, when Comverse began an internal investigation into the altering of dates of options granted to him and other executives and employees of the company. The investigation prompted Mr. Alexander to resign as chief executive of the company and chairman of the board in April.

In August, federal prosecutors described a brazen scheme that involved backdating every companywide option grant between 1998 and 2001 to days when Comverse’s stock was trading at lower prices, hence creating the potential for bigger profits. Mr. Alexander and two other former Comverse executives were charged in a criminal complaint with securities, mail and wire fraud.

...more...

[UpInArms]

22. U.S. pursuing questionable bond trades-official

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=2006-09-27T205726Z_01_N27206506_RTRIDST_0_ECONOMY-TREASURIES-UPDATE-2.XML

NEW YORK/WASHINGTON , Sept 27 (Reuters) - Bond traders will face the wrath of regulators if they continue to engage in questionable trading practices and government agencies are already pursuing cases in this area, a Treasury official said on Wednesday.

Deputy Assistant Treasury Secretary James Clouse, in a speech to the Bond Market Association in New York, renewed the Treasury Department's warnings about an increase in manipulative trading practices in Treasury securities.

Clouse said such trading behavior could ultimately drive investors out the Treasury market and raise the government's borrowing costs. He said the Commodities Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) were looking into particular instances.

"As you know, the wheels of enforcement take considerable amounts of time to operate but the CFTC and SEC are pursuing these cases," Clouse said in answer to a question after delivering his speech.

<snip>

A series of incidents in late 2003, in which traders were unable to deliver securities as promised in Treasury markets, gave rise to a Treasury Department proposal this year to create a lender of last resort to prevent market disruptions in such instances.

...more...

[UpInArms]

23. Electronic trading of credit derivatives doubles

they say that like it's a good thing :eyes:

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-09-27T193800Z_01_N27294986_RTRIDST_0_MARKETS-DERIVATIVES-FED.XML

NEW YORK, Sept 27 (Reuters) - U.S. credit derivative dealers have doubled the number of trades that are processed electronically and further reduced a backlog in processing trades, the Federal Reserve Bank of New York said on Wednesday.

The Fed met with 16 of the largest dealers on Wednesday to discuss progress in back office lags, and other trade processing problems.

Credit derivative dealers have doubled the volume of shares that are processed electronically to 80 percent, the New York Fed said in a release.

Dealers have also reduced lags in processing trades by 85 percent since Sept. 30 last year, the Fed said. This is an increase from an 80 percent reduction announced in July. For details, see

...more...

[Ghost Dog]

39. 'Borderless' regulation needed to tackle derivatives trading

http://www.afp.com/english/news/stories/060928084518.tigdv1gx.html

LONDON (AFP) - Leading officials from three of the world's most powerful financial regulators have warned in a joint letter that countries must join forces to help contain risks posed by the explosive growth of derivatives trading, the Financial Times reported.

Progress has been made during the past year, but "there is still work to do", officials from the UK Financial Services Authority, the Federal Reserve Bank of New York and the US Securities and Exchange Commission wrote in the business daily. "Weaknesses remain and, apart from operational risk, the market faces formidable challenges in measuring and managing financial risks."

A derivative is a tradable financial instrument whose value is determined by the value of one or more underlying financial assets, such as stocks, bonds, commodities and currencies. Derivatives are bought or sold to tackle risk linked to the underlying security.

In the FT on Thursday, Timothy Geithner, president of the New York Fed; Callum McCarthy, chairman of the FSA; and Annette Nazareth, a commissioner at the SEC wrote: "In a more integrated global market, we will increasingly find ourselves compelled to pursue borderless solutions."

Their joint letter came after leading global investment banks, institutional investors and international regulators met at the New York Fed on Wednesday to discuss industry initiatives to improve back-office systems for derivatives trading.

The move followed concerns last year that back-office backlogs were so serious they could create systemic problems if not addressed, the FT said.

/...

[UpInArms]

24. Chicago Fed Midwest factory activity falls in Aug

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=2006-09-27T155737Z_01_NYD000030_RTRIDST_0_ECONOMY-MANUFACTURING-MIDWEST-URGENT.XML

NEW YORK, Sept 27 (Reuters) - The Chicago Federal Reserve
Bank said on Wednesday its Midwest manufacturing index fell in
August, in contrast with steady production activity in the rest
of the country.

The index slipped 0.6 percent to a seasonally adjusted
107.3 from an upwardly revised 107.9 in July, originally
reported at 107.6.

Output from all four regional subsectors -- auto, steel,
machinery and resources -- fell last month.

Compared with a year earlier, Midwest output was up 5.5
percent, a tad below the 5.6 percent national increase.

Auto sector production shed 0.8 percent in August, lagging
the nation's overall auto expansion of 0.4 percent. Midwest
automotive output was up 2.3 percent from a year earlier.

...more...

[UpInArms]

25. Countrywide stuck with defaults in mortgage fraud: WSJ

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B31CB1CB1%2D1083%2D4249%2D8B7A%2D4D467ADFF213%7D&dist=newsfinder&symbol=&siteid=mktw

BOSTON (MarketWatch) -- Mortgage lender Countrywide Financial Corp. (CFC : 34.82, -1.13, -3.1% ) may be stuck with defaulting loans in an alleged elaborate mortgage fraud, The Wall Street Journal reported Thursday. Borrowers say they were duped into taking out loans to buy houses at inflated prices in Indiana, according to the report. The total value of the loans involved could be as high as $80 million, and Countrywide has filed a lawsuit accusing the organizers of the fraud of acquiring homes and fraudulently selling them for a quick profit to borrowers in Virginia, the newspaper said.

[UpInArms]

30. early pre-opening blather and bye!

<08:32 am : S&P futures vs fair value: +1.3. Nasdaq futures vs fair value: +3.8. Still shaping up for the cash market to open modestly higher as investors sift through today's batch of economic data. The final read on Q2 GDP unexpectedly fell to 2.6% (consensus 2.9%) while the accompanying chain deflator -- a key measure on inflation -- was left unchanged at 3.3%, matching economists' forecasts. Initial claims fell 6K to 316K (consensus 315K). However, given the dated nature of the GDP data and today's claims data not coinciding with next week’s Sep. payrolls data, neither report has had much influence on trading so far. The 10-yr note is still down 1 tick at 4.60%. [br />
08:00 am : S&P futures vs fair value: +1.9. Nasdaq futures vs fair value: +4.0. Early indications suggest stocks will extend this week's winning streak to four days. However, since there isn't much corporate news of note to account for the positive bias and today's upcoming economic reports expected to check in essentially unchanged from prior levels, it appears much of the motivation on the part of buyers will again be centered around pushing the Dow up at least 34 points to a new record.

gotta run!

:hi:

[Ghost Dog]

42. Stock prices fall after Dow milestone

http://news.yahoo.com/s/ap/20060928/ap_on_bi_st_ma_re/wall_street;_ylt=A0SOwl_H.RtFyBEAngayBhIF;_ylu=X3oDMTA2Z2szazkxBHNlYwN0bQ--

By ELLEN SIMON, AP Business Writer 18 minutes ago

NEW YORK - The Dow Jones industrial average topped its record-high close this morning, reaching a milestone in Wall Street's recovery from nearly seven years of corporate upheaval, economic recession and the impact of terrorism. The high close was 11,722.98 set on Jan. 14, 2000.

Shortly after the index of 30 blue chip stocks surpassed its record, rising to 11,724.86 in early morning trading, stocks dropped amid a dearth of news that could motivate investors.

"These numbers sometimes tend to act as magnets and the market it sometimes pulled up toward it," said Russ Koesterich, senior portfolio manager at Barclays Global Investments in San Francisco.

In midday trading, the Dow was down 26.74, or 0.23 percent, at 11,662.50. It has yet to reach its all-time trading high of 11,750.28, also set Jan. 14, 2000.

The broader Standard & Poor's 500 and Nasdaq composite indexes are far off their highs, although their records were reached around the same time.

The S&P, down 2.37, or 0.01 percent, at 1,334.22, is still about 193 points below its closing high of 1,527.46, although it is at a 5 1/2-year high. The Nasdaq, down 9.35, or 0.04 percent, at 2,254.04, is not expected to approach its high close of 5,048.62 any time soon.

/...

[Ghost Dog]

45. Brazil Real Rises After Polls Show Lula Victory in First Round

http://www.bloomberg.com/apps/news?pid=20601086&sid=aAubd6S7zEGk&refer=news

Sept. 28 (Bloomberg) -- Brazil's real rose after two opinion polls showed President Luiz Inacio Lula da Silva will likely win the presidential election in the first-round vote on Oct. 1.

The poll results released yesterday boosted investor confidence that Lula, 60, can start his second mandate with enough support in Congress to pass legislation to cut taxes and spur investment, said Hideaki Iha at Fair Corretora de Cambio.

``A victory in the first round is better because it means less volatility and possibly a stronger Lula going into his second mandate, with more support in Congress to start reforms right away,'' Iha said in a phone interview from Sao Paulo.

The real rose 0.1 percent to 2.1867 per dollar at 8:37 a.m. New York time from 2.1891 per dollar yesterday.

/...

[Ghost Dog]

46. Brazil to scrap rules on buying securites abroad

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-09-27T173502Z_01_N27285962_RTRIDST_0_ECONOMY-BRAZIL-COUNCIL-UPDATE-1.XML

BRASILIA, Brazil, Sept 27 (Reuters) - Brazil will scrap restrictions on local investors buying securities abroad, the national monetary council said on Wednesday, in a move that could prompt capital outflows from Latin America's largest country.

"This is one more step in the sense of creating more flexibility in the foreign exchange market," the central bank, which carries out decisions of the national monetary council, said in a statement.

Brazil's currency, the real <BRBY>, is trading near a five-year high. Exporters favor a weaker currency to boost foreign sales.

/...

[Ghost Dog]

48. EU and Iran fail to reach nuclear deal

http://today.reuters.co.uk/news/articlenews.aspx?type=worldNews&storyID=2006-09-28T165543Z_01_L28601745_RTRUKOC_0_UK-NUCLEAR-IRAN.xml
Thu Sep 28, 2006 5:39 PM BST

BERLIN (Reuters) - European Union foreign policy chief Javier Solana said on Thursday he had failed to reach a deal with the chief Iranian negotiator on Tehran's nuclear ambitions, but said they would hold another round of talks soon.

Several Western diplomats who were briefed on Solana's talks with Larijani said the Iranians were still refusing to commit to suspending their uranium enrichment programme and said Larijani appeared to be trying to drag out talks with Solana.

"We have been progressing," Solana told reporters after discussions with Iranian negotiator Ali Larijani.

"We still have some issues that have not been closed," he added without elaborating. Solana said he hoped to renew contact with the Iranians by the middle of next week.

Solana's comments appeared to indicate that prospects of a swift resolution were fading, a day after the U.S. State Department had said time was running out for a deal.

/...

Looks like an international news kind of day today. Sorry I won't be around much for several weeks now: first I'll be heading somewhere thoroughly offline, then, a bit later, I'll be where I only have a noisy dial-up connection/conexion available.

:hi: all and especially AnneD (missed you today)!

[Ghost Dog]

58. Iran-EU nuclear talks 'positive' but no accord

http://www.afp.com/english/news/stories/060928180844.o0a4hcsi.html

BERLIN (AFP) - Talks between Iran's top nuclear negotiator Ali Larijani and European Union foreign policy chief Javier Solana failed to produce an accord but were positive and constructive, both men said.

"It has been a long, constructive negotiation," Larijani told reporters at the end of two days of meetings in the German capital.

"We have been able to arrive at some positive conclusions.

"Today we have discussed modalities with the aim of coming back to the main negotiations as soon as possible."

In a businesslike press conference, Solana told reporters: "We have been progressing. We will have a new contact in the middle of next week."

Sources close to the talks said the contact could take place over the phone and did not necessarily mean they would be meeting face to face.

Meanwhile a defiant President Mahmoud Ahmadinejad vowed that Iran would not yield on its nuclear programme.

"The Iranian nation will not bend one inch against any (international) force and pressure," he told supporters in a speech in the city of Karaj just outside Tehran broadcast on state television.

/...

[Ghost Dog]

50. U.S. stocks fall as early bounce fades

http://today.reuters.co.uk/news/articlebusiness.aspx?type=businessNews&storyID=2006-09-28T160714Z_01_BRY828523_RTRUKOC_0_UK-MARKETS-STOCKS-DOW.xml
Thu Sep 28, 2006 5:07 PM BST ed: = 12:07 ET

NEW YORK (Reuters) - U.S. stocks slipped on Thursday as a rally that briefly sent the blue-chip Dow above its record closing high faded, with some investors choosing to lock in profits.

<snip>

The Dow Jones industrial average <.DJI> was down 5.29 points, or 0.05 percent, at 11,683.95. The Standard & Poor's 500 Index <.SPX> was down 0.73 of a point, or 0.05 percent, at 1,335.86. The Nasdaq Composite Index <.IXIC> was down 1.76 points, or 0.08 percent, at 2,261.63.

/...

[mnhtnbb]

52. Just entered sell orders across my portfolio

In May, when the market started to tank, I sold all individual equities
across our portfolio, retaining all mutual funds. I have just finished entering sell orders for all the remaining mutual funds, keeping $5K of each fund in each account. I hold several mutual funds that are closed, so I thought I'd keep a balance in each fund to keep options open should I want to put money back in.

Who sees this market going higher from here? What's going to drive it?
I'm to the point where I'm going to keep cash and give myself a small budget for playing options--and I don't call that "investing".

[Ghost Dog]

55. You're calling a peak!

That may be sensible. I did something similar late April-May, Europe/Japan-oriented (and had long since shifted out of dollars (except Canadian - wink)).

ed: On the other hand, there's an election coming up, right?

Does anyone out there know how to post something like the usual US market data/blurb, while neither UIA nor 54an are around?

[mnhtnbb]

57. This market makes me VERY nervous. I'm doing what I wish I'd done 2000

[54anickel]

There's a link in the opening post under the

"AT THE CLOSING BELL ON....."

Takes you to:
http://finance.yahoo.com/?u

On that page the blather is at the

Market Overview: (Time) ET Briefing.com

Takes you to:
http://finance.yahoo.com/marketupdate/overview


:hi: Sorry, I've not been able to be around much again....thought this week would get better. Maybe next week. Busy, busy, busy......

[Ghost Dog]

68. Cool, thanks.

I'll be mostly away, but watching, myself for a while from next week (taking a breather), see above.

[TrogL]

53. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



30-day vs. Euro, Yen, UK Pound and Swiss Franc




Currency Comparison: http://members.shaw.ca/trogl/looniewatch.html

Detailed analysis: http://quotes.ino.com/exchanges/?r=CME_CD

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.H06&v=s

Historical values http://www.x-rates.com/d/USD/CAD/data30.html

2006-08-28 Monday, August 28 0.899281 USD
2006-08-29 Tuesday, August 29 0.90009 USD
2006-08-30 Wednesday, August 30 0.900982 USD
2006-08-31 Thursday, August 31 0.903669 USD
2006-09-01 Friday, September 1 0.904486 USD
2006-09-04 Monday, September 4 0.904486 USD
2006-09-05 Tuesday, September 5 0.900009 USD
2006-09-06 Wednesday, September 6 0.904814 USD
2006-09-07 Thursday, September 7 0.900982 USD
2006-09-08 Friday, September 8 0.893575 USD
2006-09-11 Monday, September 11 0.891583 USD
2006-09-12 Tuesday, September 12 0.893975 USD
2006-09-13 Wednesday, September 13 0.893575 USD
2006-09-14 Thursday, September 14 0.896218 USD
2006-09-15 Friday, September 15 0.893495 USD
2006-09-18 Monday, September 18 0.895335 USD
2006-09-19 Tuesday, September 19 0.890551 USD
2006-09-20 Wednesday, September 20 0.887154 USD
2006-09-21 Thursday, September 21 0.892857 USD
2006-09-22 Friday, September 22 0.895175 USD
2006-09-25 Monday, September 25 0.895817 USD
2006-09-26 Tuesday, September 26 0.896138 USD
2006-09-27 Wednesday, September 27 0.896861 USD


Current values

Last trade 0.9035 Change +0.0005 (+0.06%)
Previous Close 0.9034 Open 0.9022
Low 0.9010 High 0.9040


Blather (from http://quotes.ino.com/exchanges/?r=CME_CD)

The December Canadian Dollar was lower overnight as consolidates some of this week's rally but remains above the 20-day moving average crossing at .8985. Stochastics and the RSI remain bullish signaling that a short-term low might be in or is near. If December extends this week's rally, the reaction high crossing at .9092 is the next upside target. Overnight action sets the stage for a lower opening in early-day session trading.




Analysis

The Conservative government announced CAN$1bn in spending cuts - all to social programs. Guess economists don't care.

[Ghost Dog]

56. Report: Canada's housing market showing vigour

http://money.canoe.ca/News/Economy/2006/09/28/1911608-cp.html

TORONTO (CP) - Canada's housing market exhibited moderate price increases and stable sales levels during the third quarter amid wide regional variances, says Royal LePage Real Estate Services.

Variances were exemplified by "frenzied levels of activity and double-digit price gains" in the energy and commodity-rich western provinces, and more reasonable sales volumes and moderate price appreciation in Ontario, Quebec and Atlantic Canada, Royal LePage (TSX:RSF.UN) said in a report Thursday.

"Nationally, market trends established through the first three quarters are forecast to continue for the remainder of the year. Robust economic conditions, low unemployment rates, modestly growing salaries and wages, and sound consumer confidence contributed to the overall strength of the residential real estate sector."

Of the housing types surveyed, the highest average price appreciation occurred in detached bungalows, which rose to $300,365, up 16.3 per cent year-over-year, followed by standard condominiums, which rose to $211,562, up 14.2 per cent, and standard two-storey properties, which increased to $365,380 up 13.2 per cent.

"For all but the West, we have moved on from the frenzied expansion that characterized the first half of this decade, and are poised to show continued growth at a more moderate pace," said Phil Soper, CEO of Royal LePage Real Estate Services.

/...

[Ghost Dog]

59. Dow takes fresh aim at record high

Stocks turn higher in late trading; GM shares gain on alliance hopes
http://www.marketwatch.com/News/Story/Story.aspx?column=Market+Snapshot&siteid=mktw&dist=

NEW YORK (MarketWatch) -- U.S. stocks turned higher Thursday, extending a three-session run of gains that has put the Dow Jones Industrial Average back on track to end at a new all-time closing high.

The Dow industrials rose 18 points to 11,707, off a low of 11,660.42. The benchmark index briefly climbed to a session high of 11,724.86, surpassing its record-high close of 11,722.98, hit Jan. 14, 2000. The Dow's intraday record is 11,750.28, reached that same day.

The Nasdaq Composite Index was up 3 points at 2,266 while the S&P 500 Index added 2 points to 1,339.

The market's gains have come on the back of "lower energy prices and a refocus on the fact that earnings growth has been much stronger than expected," according to John Caldwell, investment strategist at McDonald's Investments.

Caldwell said it is likely 2006 will produce four quarters of double-digit earnings growth, an improbable scenario for many investors making their forecasts at the beginning of the year. The Dow's performance, he said, reflects the facts that earnings growth has been driven, to a large extent, by industrial companies.
"This has been a market led by Caterpillar, not by Intel," he said.

Thursday's early gains came even as the latest estimate on second-quarter growth raised questions about the strength of the economy.

/blah...

[Ghost Dog]

60. Going down? Why the housing slump may spell recession

Sep 28th 2006 | WASHINGTON, DC
From The Economist print edition
http://economist.com/world/na/displaystory.cfm?story_id=7971153

THREE years ago Rose Hill estates was a dairy farm in Loudoun County. Now it is in the front line of America's housing slump. The rolling fields are dotted with cut-price McMansions. The asking price for new houses, complete with gourmet kitchens and “extended libraries”, has been slashed by 20%. But business is slow. The pace of home sales in the county has halved since last year while the stock of unsold homes has doubled. “The region is glutted with new houses,” says Lenn Harley, an estate agent. “The market is dead.”

Loudoun County, an exurb of Washington, DC, is an extreme example. But there is no longer any doubt that America's housing bust is both bigger and more abrupt than many expected. Nationally, new home sales are down 17% from a year ago, and sales of existing homes have slumped 12%. By some measures, prices are now officially falling. New numbers released this week by the National Association of Realtors (NAR) suggest that the median price for existing homes fell by 1.7% in the year to August, the first such national drop since 1993. The median price of new houses fell by 1.3%.

And although August's figures were less grim than expected, there is clearly more to come. The supply of existing homes for sale is up 60% from a year ago, is at a 13-year high and is still rising. Builders are at their glummest in 15 years. Even the NAR, long the chief cheerleader of the housing boom, now admits that prices will drop further.

Today's debate is less about the scale of the housing slump than its consequences. Will America be dragged into recession or will lower oil prices help the economy shake off the property bust? Most Wall Street economists put the odds against a recession, but a noisy minority claim it is virtually inevitable.

Who is right?

/read on...

[Ghost Dog]

63. Bond investors are probably right to fear an American slowdown

Sep 28th 2006
From The Economist print edition
http://economist.com/finance/displaystory.cfm?story_id=7975153

WHEN asset classes diverge, investors should take note. Bond yields have fallen sharply in recent weeks, with the ten-year treasury bond yielding 4.53% on September 25th, compared with 5.24% in June. That, and the recent weakness in commodity prices, might seem to indicate an imminent economic downturn.

But investors in shares do not seem overly concerned. The Dow Jones Industrial Average has been flirting with its record high of 11,722, set back in January 2000. The Belgian and Spanish stockmarkets have recently scaled new peaks. And emerging-market bond spreads, a good indicator of investors' attitude to risk, are around their lowest levels of the past 14 years.

The stockmarket bulls feel there is little to worry about. Profits growth has far outstripped share prices in recent years, bringing price/earnings ratios down significantly. And company cashflows are so strong that, according to James Montier of Dresdner Kleinwort, American share buy-backs are adding three percentage points to the dividend yield.

Profits look high as a proportion of GDP, in historical terms, but the bulls feel there is little sign of an imminent reversion to the mean. The global economic outlook may have moved in favour of companies because globalisation has reduced wage pressures.

/continues...

[Ghost Dog]

61. Banks and hedge funds: Blank cheques and balances

Sep 28th 2006 | NEW YORK
From The Economist print edition
http://economist.com/finance/displaystory.cfm?story_id=7975169
Lenders to hedge funds need to think harder about the risks

EIGHT years ago, when Long-Term Capital Management (LTCM), a fabulously well-connected Connecticut hedge fund, was holed by an explosive mix of bad bets and borrowed money, the Federal Reserve was forced to bail it out. Its brokers, who had virtually written it a blank cheque, were in a panic: of LTCM's $125 billion in investments, $120 billion was backed by borrowing.

In September, news that Amaranth, another Connecticut hedge fund, lost $6 billion, 65% of its value, in less than a month caused barely a ripple in financial markets. Whether due to good luck or judgment, its brokers managed to recoup the money they had lent the hedge fund without losing a penny.

This, say prime brokers, shows how their risk-management systems have improved since LTCM. Hedge-fund managers, with one eye on a proposal winding through Congress that would compel federal agencies to look into the need for hedge-fund regulation, claim they, too, have improved checks and balances.

Banking supervisors aren't so sure. Increasingly, they are urging regulated banks, which lend to hedge funds through prime-brokerage units, to be more vigilant about the risks being taken with the banks' money. The problem is, managing risk is as much art as science.

When lending to hedge funds, prime brokers must decide how much to lend against a borrower's collateral. Then they must monitor this collateral so that, should it deteriorate, brokers can demand more of it or call in loans.

Both tasks are tricky. For one, hedge funds routinely use several prime brokers—and each broker sees only the securities he lends against. Hedge funds also increasingly invest in esoteric derivatives that are often illiquid and difficult to value. Moreover, the “quality” of collateral is not static. It deteriorates—and lending must be reduced—if, say, a trade or strategy is popular with other investors (a “crowded trade”); liquidating such trades in times of market stress is exceedingly difficult.

/continues...

[54anickel]

62. 3:49 and pushing for the all time high....so close and yet so far

Dow 11,720.53 + 31.29 (0.27%)
Nasdaq 2,269.82 + 6.43 (0.28%)
S&P 500 1,339.74 + 3.15 (0.24%)
10-yr Bond 4.6260% + 0.0320
30-yr Bond 4.7670% + 0.0340
NYSE Volume 2,101,154,000
Nasdaq Volume 1,672,750,000


3:30 pm : Buyers are still taking the reins and have kept the indices in positive territory for the last couple of hours. However, it remains to be seen if the Dow can revisit its all-time closing high of 11,722.98 before it's all said and done. Actually finishing the day at a new record is noteworthy from a psychological standpoint, as it bodes well for investor confidence especially during what is historically the worst month of the year for stocks; but if it fails to do so, today's intraday high (11,724.86) will still trail the all-time intraday high of 11,750.28, which was also reached on the day the Dow closed at its highest level ever (January 14, 2000). DJ30 +24.89 NASDAQ +4.81 SP500 +2.25 NASDAQ Dec/Adv/Vol 1444/1547/1.49 bln NYSE Dec/Adv/Vol 1531/1690/1.14 bln

3:00 pm : Market is still retracing its morning highs heading into the final hour of trading. However, unlike the last few days when end-of-the quarter window dressing was being cited as contributing to the upside bias, it appears as though the last-minute adjustments being made to some fund managers' portfolios today is tied more to profit taking. After all, blue chips like T, MCD, MRK, MSFT and PFE, which were among five of the best performing Dow components in Q3, are among today's worst. Likewise, AA, CAT and UTX, labeled as three of this quarter's biggest disappointments, are all posting gains. General Motors (GM 33.11 +0.83) and Intel (INTC 20.73 +0.34), though, are two exceptions as their leadership today pushes their quarter-to-date gains to 12% and 10%, respectively. DJ30 +24.81 NASDAQ +4.43 SP500 +2.63 NASDAQ Dec/Adv/Vol 1358/1592/1.37 bln NYSE Dec/Adv/Vol 1456/1747/1.04 bln

2:30 pm : Stocks continue to inch their way higher, again using a pullback in oil prices as a catalyst to keep this week's rally intact. Crude oil futures going into the close of trading on the NYMEX look as though they'll settle near $62.75 a barrel (-0.3%). However, with the major indices still trading close to unchanged amid below average volume, as the NYSE has yet to surpass 1.0 bln shares, there's little conviction behind the limited number of buyers trying to extend the market's winning streak to four days.DJ30 +14.25 NASDAQ +2.95 SP500 +1.31 NASDAQ Dec/Adv/Vol 1443/1469/1.26 bln NYSE Dec/Adv/Vol 1540/1642/954 mln

2:00 pm : Little changed since the last update as the major averages continue to vacillate in roughly the same ranges. Fortunately for the bulls, four of the five sectors trading higher -- Financials, Technology, Industrials and Energy -- are also among the most influential areas on the S&P 500, accounting for a combined 58% of the total weighting on the broader market. Health Care is the most influential of the five sectors trading lower, but its loss is also the smallest and largely tied to weakness in three of its four biggest components (e.g. PFE -0.9%, MRK -0.9%, AMGN -0.7%). DJ30 +7.52 NASDAQ +0.94 SP500 +1.01 NASDAQ Dec/Adv/Vol 1568/1333/1.16 bln NYSE Dec/Adv/Vol 1609/1555/874 mln

1:30 pm : The major indices continue to improve their stance and are all back in the green, albeit modestly, as some notable sector leadership returns. Industrials has recently turned the corner, as Human Resources (+2.2%) remains the day's best performing S&P industry group, while Tech and Financials inching back above the flat line also lend some support. DJ30 +6.92 NASDAQ +1.19 SP500 +0.98 NASDAQ Dec/Adv/Vol 1669/1213/1.05 bln NYSE Dec/Adv/Vol 1774/1383/798 mln

1:00 pm : Stocks bounce off their worst levels of the day, but not nearly enough to make a significant change in the standings. Oil turning negative is acting as the biggest reason behind the improvement in sentiment. However, oil's decline has also resulted in a noticeable pullback in Energy, removing what little leadership the sector was offering earlier as the only influential area garnering any buying interest. DJ30 -10.73 NASDAQ -4.85 SP500 -1.16 NASDAQ Dec/Adv/Vol 1712/1158/964 mln NYSE Dec/Adv/Vol 1776/1355/716 mln

12:30 pm : Indices extend their reach to the downside as nine out of 10 sectors now trade in negative territory. Not surprisingly, this year's best performer -- Telecom Services (-0.6%) -- is turning in today's worst performance while the rebound in oil prices and rising bond yields respectively take a toll on the retail and homebuilding groups within the Consumer Discretionary sector. Energy is the only sector posting a gain, but even it has seen some consolidation as its recent advance has been nearly halved. DJ30 -20.41 NASDAQ -8.02 SP500 -2.11 NASDAQ Dec/Adv/Vol 1677/1155/878 mln NYSE Dec/Adv/Vol 1823/1286/638 mln

12:00 pm : Within the first seven minutes of trading, the bulls finally got what they wanted -- the Dow briefly eclipsing its all-time closing high of 11,722.98. However, such an intraday milestone having finally been reached, coupled with another surge in oil prices, has taken some of the momentum out of recent market gains and left investors looking for reasons to lock in some of those profits.

The bulk of early blue-chip leadership came from General Motors (GM 32.87 +0.59), which hit an intraday 52-week high following reports that billionaire investor Kirk Kerkorian's Tracinda Corp said it may acquire an additional 12 mln GM shares. Follow-through buying in fellow Dow component Intel (INTC 20.69 +0.30), which is now up 8.5% this week alone, also offered some earlier support; but the absence of more convincing sector leadership outside of Energy (+1.1%) remains the biggest hurdle for the indices to currently overcome. Recently beaten-down oil stocks are attracting some bargain hunting interest as more short covering in crude oil futures tack a 1.2% gain on to yesterday's surprising 3.2% surge -- the biggest one-day move in oil since March, renewing concerns about the commodity's ability to put upward pressure on inflation.

Separately, Q2 real GDP was revised slightly lower to a 2.6% annual rate of growth from a previously reported 2.9%. Even though much of the GDP data is easily predicted and today's unexpected downward revision won't alter expectations for continued growth in the 2-3% range for Q3 and Q4 which fits the definition of a so-called soft landing, today's report does anything but excite a stock market already extremely sensitive to signs of economic weakness. DJ30 -16.81 NASDAQ -4.80 SP500 -1.12 NASDAQ Dec/Adv/Vol 1536/1252/754 mln NYSE Dec/Adv/Vol 1609/1463/548 mln

11:30 am : Market remains stuck in neutral as this week's impressive run-up appears to have left investors exhausted. Sure, the indices are back in the green but market internals continue to reflect the market's indecisiveness. To wit, advancing and declining issues on the NYSE remain evenly matched while decliners on the Nasdaq hold a slim 7-to-6 advantage over advancers. The lack of conviction on either the bullish or bearish side of the aisle is even more pronounced when looking at a ratio of up to down volume on both exchanges that is split right down the middle. DJ30 +4.24 NASDAQ +1.03 SP500 +0.32 NASDAQ Dec/Adv/Vol 1449/1288/626 mln NYSE Dec/Adv/Vol 1546/1471/440 mln

11:00 am : Sellers regain a slight edge within the last 30 minutes, pushing all three majors to session lows; but market losses remain modest at best. Reversals in Financials and Tech are partly to blame while the absence of leadership from influential sectors like Health Care and Consumer Discretionary has also left the door open for some early profit taking following three straight days of gains.DJ30 -4.17 NASDAQ -2.28 SP500 -1.01 NASDAQ Dec/Adv/Vol 1405/1259/498 mln NYSE Dec/Adv/Vol 1464/1496/338 mln

10:30 am : Equities are back on the offensive but market gains are minimal as spilt industry leadership dictates this morning's action. The Financials sector's resilience to further consolidation in Treasuries lifting yields across the curve is offering some support as is modest strength in Technology. Providing the biggest lift to tech has been follow-through buying in Intel (INTC 20.73 +0.34), whose 1.7% advance today leaves the stock up 8.3% this week. DJ30 +16.37 NASDAQ +2.56 SP500 +0.61 NASDAQ Dec/Adv/Vol 1166/1392/356 mln NYSE Dec/Adv/Vol 1248/1610/226 mln

10:00 am : Early enthusiasm tied to the Dow crossing into record territory is short-lived, as stocks run into a wall of resistance and leave investors looking for reasons to lock in recent profits. To wit, Telecom Services, this year's best performing S&P sector (+22%), is today's biggest laggard. Throw in the fact that the major indices are already up 1.8% on average in just three days, and up 4.7% on average for the third quarter, and the belief that stocks are overbought at current levels is tempting participants to take some money off the table.DJ30 +3.04 NASDAQ +0.86 SP500 -0.86 NASDAQ Dec/Adv/Vol 916/1427/182 mln NYSE Dec/Adv/Vol 778/1882/90 mln

09:40 am : Stocks open on an upbeat note as investors remain fixated on witnessing a milestone for the Dow, which occurred about three minutes ago as the blue-chip index briefly breached its all-time closing high of 11,722.98. General Motors (GM 33.01 +0.73) surging 2.4% amid reports that Tracinda Corp is eyeing an additional 12 mln share stake in the auto maker is lending some notable support for the Dow as is some last-minute adjustments to portfolios with Q3 coming to a close tomorrow. DJ30 +29.29 NASDAQ +7.02 SP500 +2.27 NASDAQ Vol 98 mln NYSE Vol 60 mln

[Ghost Dog]

64. Ah, Hi! Amazing blurb:

"3:30 pm : Buyers (what buyers, the big boys on your/their behalf?) are still taking the reins and have kept the indices in positive territory for the last couple of hours. However, it remains to be seen if the Dow can revisit its all-time closing high of 11,722.98 before it's all said and done. Actually finishing the day at a new record is noteworthy from a psychological standpoint, as it bodes well for investor confidence (not time to cash in anytime soon, then, type of psychology?)" :eyes:

[54anickel]

66. End of quarter window dressing? Isn't that what they were claiming

earlier this week?

[specimenfred1984]

65. Excuse my language but what a blatent fcking pump in the S&P

At 3:46, buy volume in a 2 minute period of 19,862 after volume has been about 6000 all day long in 2 minute increments.

That's just fcking blatent market manipulation. Then 12 minutes later, sell volume of 17,902 in a 2 minute increment.

What a disgrace our markets have become and our torture-supporting country as a whole.

[Ghost Dog]

71. Thanks for the observation, specimenfred1984.

Keep 'em coming :hi:

[Ghost Dog]

69. So I make this 'provisional' close, still working on the final blurb:

Dow 11,718.45 Up 29.21 (0.25%)
Nasdaq 2,270.02 Up 6.63 (0.29%)
S&P 500 1,339.15 Up 2.56 (0.19%)
10-Yr Bond 4.6260% Up 0.0320
NYSE Volume 2,287,647,000
Nasdaq Volume 1,864,507,000

4:20 pm : Stocks extended their winning streak to four sessions Thursday, but market gains were again modest at best as investors grappled with volatile oil prices and some resistance after the Dow charged out of the gate and briefly surpassed its all-time closing high of 11,722.98.

Within seven minutes of the opening bell, the bulls finally got what they wished for, the 34 points needed by the Dow to make history for the first time in 6 1/2 years. Be that as it may, with so much hype tied to the blue-chip index reaching such a milestone being priced into equities throughout the week, the Dow's gain also left the door open for some selective consolidation following the market's recent run-up.

In fact, had it not been for continued momentum in this month's best performing Dow components -- General Motors (GM 33.02 +0.74) and Intel (INTC 20.77 +0.38) -- coupled with some bargain hunting interest in Caterpillar (CAT 66.53 +0.85) -- one of the worst performing components in Q3 -- there's a good chance the major averages would have closed relatively unchanged. General Motors hit an intraday 52-week high following reports that billionaire investor Kirk Kerkorian's Tracinda Corp said it may acquire an additional 12 mln GM shares and after GM CEO Rick Wagoner reassured shareholders it can survive even without an alliance. Hewlett-Packard (HPQ 35.96 +0.57) shrugging off the surprise resignation of general counsel Ann Baskins just hours before its Congressional hearing, and turning in an impressive 1.6% performance, provided additional market support.

Meanwhile, with investors already extremely sensitive to signs of economic weakness, the Commerce dept. reporting that Q2 real GDP was unexpectedly revised lower to a 2.6% annual rate of growth

[Ghost Dog]

70. Dow Ends Up 29 After Reaching Milestone

http://biz.yahoo.com/ap/060928/wall_street.html?.v=34
Thursday September 28, 4:32 pm ET

NEW YORK (AP) -- The Dow Jones industrial average reached a milestone Thursday in Wall Street's nearly seven-year recovery from corporate upheaval, economic recession and terrorism, briefly trading above its record high close of 11,722.98 set on Jan. 14, 2000.

The index of 30 blue chip stocks surpassed its record, rising to 11,724.86 in early morning trading. Stocks closed only modestly higher amid a dearth of news that could motivate investors; still, it was the market's fourth straight advance.

"These numbers sometimes tend to act as magnets and the market it sometimes pulled up toward it," said Russ Koesterich, senior portfolio manager at Barclays Global Investments in San Francisco.

According to preliminary calculations, the Dow rose 29.21, or 0.25 percent, to 11,718.45. It has yet to reach its all-time trading high of 11,750.28, also set Jan. 14, 2000.

The broader Standard & Poor's 500 and Nasdaq composite indexes are far off their all-time highs, although their records were reached around the same time.

The S&P, which gained 2.56, or 0.19 percent, to close at 1,339.15, is still about 188 points below its closing high of 1,527.46, but is at a 5 1/2-year high. The Nasdaq, which rose 6.63, or 0.29 percent, to 2,270.02, is not expected to approach its high close of 5,048.62 any time soon.

The Dow, whose large-cap stocks range from aluminum producer Alcoa Inc. to discount retailer Wal-Mart Stores Inc., was the first big index to recover because it did not rise as much in value as the S&P 500 and the Nasdaq in 2000.

The last time the Dow stood at these levels, Wall Street was propelled by wide-eyed investors eager for a slice of the wealth being generated by the dot-com and housing booms. Traders raced to buy any stocks that looked remotely promising, catapulting the major indexes sharply higher.

But after early 2000, the market began to crumble, slowly at first as doubts about the high-tech boom set in. Signs of recession accelerated the decline, and then the Sept. 11, 2001, terror attacks and their aftermath, including earnings declines and losses in many industries, sent stocks plunging.

It didn't stop there -- corporate scandals including the collapse of Enron Corp. and WorldCom Inc. also shook Wall Street. The combination of all these factors devastated stocks, sending the Dow to a five-year closing low of 7,286.27 on Oct. 9, 2002, nearly 38 percent off its record high close.

/...