STOCK MARKET WATCH, Monday 29 January 2007

[UpInArms]

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 721 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2225 DAYS
WHERE'S OSAMA BIN-LADEN? 1930 DAYS
DAYS SINCE ENRON COLLAPSE = 1891
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 3
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 - $554.80/oz.

AT THE CLOSING BELL ON January 26, 2007

Dow 12,487.02 15.54 (0.12%)
Nasdaq 2,435.49 1.25 (0.05%)
S&P 500 1,422.18 1.72 (0.12%)
10-yr Bond 4.8790% 0.0120
30-yr Bond 4.9800% 0.0180
NYSE Volume 2,626,622,000
Nasdaq Volume 2,082,335,000
Gold future... 644.60





GOLD, EURO, YEN, Dollars and Loonie



PIEHOLE ALERT

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

For information on protests and other actions

(UIA - just filling in for Ozy!)

[UpInArms]

1. dollar watch

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

Last trade 85.27 Change -0.04 (-0.05%)

US Dollar Strengthens as Market Anticipates Hawkish FOMC Statement

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Strengthens_as_Market_1169850845878.html

US Dollar - The US dollar staged quite a turnaround this week despite the lack of any significant data. Over the past few weeks, other central banks have proven to be less hawkish than the market had anticipated while upside surprises in US data continues to give traders confidence that the Federal Reserve will keep interest rates at 5.25 percent throughout the first half of the year. This is especially important going into next week’s FOMC meeting. The Federal Reserve has good reason to remain hawkish and will continue to warn of upside inflation risks. Even though oil prices have been falling, the labor market and wage growth have been strong, which should boost inflationary pressures. The two sectors of the economy that use to be a problem are now showing signs of stabilization. Durable goods orders increased by 3.1 percent in the month of December. This was only slightly stronger than expected but we had a big surprise in orders excluding transportation. Originally a large Boeing order was expected to skew the report to the upside but today’s release actually showed that demand was more broad based. As for the housing market, the growth in new home sales completely blew past expectations. Sales increased by 4.8 percent last month while November sales were revised from 3.4 percent to 7.4 percent. In the week ahead the US economy has many opportunities to prove its strength. The calendar is packed with important releases including Consumer Confidence, GDP, FOMC, Chicago PMI, Construction Spending, ISM, Personal Income, Personal Consumption Expenditures, and Non-farm payrolls. If we get overwhelmingly positive news, the market could even begin to talk about the slim chances of an interest rate hike over a cut this year.

...more...

US Dollar on A Roll

http://www.dailyfx.com/story/strategy_pieces/trade_or_fade/US_Dollar_on_A_Roll1170067812715.html

Still mostly green for the greenback as economic data continued to impress with New Housing printing a surprisingly strong 4.8% jump while Durable Goods ex-transport beat expectations by a factor of four registering a gain of 2.4% versus 0.5% forecast. The economic news demonstrated the resiliency of theUS economy with the data taking many dollar bears by surprise as the projections of a housing led slowdown were clearly off the mark. Talk of any Fed rate cuts was completely erased from traders’ minds, and instead the focus was on the possible resurgence of tightening policy from the Fed. Terri Belkas’s mid week report focused on the incoming new voting members of the FOMC most of who expressed rather hawkish views on the economy. Little wonder then that by the end of the week with long term rates inching to 6 month highs, the dollar was trading near two month highs against the euro.

Next week the calendar contains one of the busiest schedules of the year with FOMC, ISM and NFP all on the docket. The fed is of course expected to stay pat, but the market will examine the language of the communiqué very carefully and if there is any hint of a hawkish bias the greenback may get a further boost as traders consider the notion that US monetary policy makers may not be finished with the rate hikes just yet. Following FOMC, comes the monthly ISM data which is expected to show a marginal decline but remain above the critical boom/bust level. Finally the week ends with NFPs – an although the report is expected to print mildly lower than the month before, as long as it stays near the 150K level the downside risk to the dollar should be minimal. All in all a very busy week that could explode in volatility if we hit some surprises. – BS



...more...

[UpInArms]

2. I have to run off now - it's up to all of the rest of the marketeers and lurkers!

:donut::donut::donut::donut::donut::donut::donut:

:hi:

[AnneD]

4. Morning Marketeers....

:donut: and lurkers. Thanks UIA for giving us a place to hang our hat and chew the fat. Well, any true son and daughter of the state of Texas are saying some powerful prayers for one of our fav. lady of letters-Molly Ivins. It's a sad day for us when we can't start the day off with Molly. It's like eating eggs without salsa or Tabasco. If you've never heard her speak-she is just like her column, as true as plumb. There was never a politician she skewered that didn't deserve it. It was tough losing Ann Richards, but Molly...it's like losing your Mom, and then seeing your sis go too. Our prayers and thoughts are with her and her family.

[Lucky Luciano]

3. ABY and BOW have agreed to a merger.

If anytone trades credit, they are in awe of the ABY 5 yr CDS (Credit Default Swap) tightening by 180 bps! WOW!

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0c66S9lsrjs&refer=home

Jan. 29 (Bloomberg) -- Abitibi-Consolidated Inc., North America's biggest newsprint maker, and rival Bowater Inc. agreed to merge in a stock transaction to create the continent's third- biggest paper and forest-products company.

The combined company, AbitibiBowater Inc. will have annual revenue of $7.9 billion, the companies said today in a statement. The new company will be owned 52 percent by Bowater shareholders and 48 percent by Abitibi investors.

Plunging demand for newsprint has generated two straight years of losses for Montreal-based Abitibi, and Greenville, South Carolina-based Bowater hasn't made a profit since 2001. Creating AbitibiBowater will result in about $250 million of cost savings, the companies said.

``It seems like there are signs of life in the forestry sector after all -- it's been beaten up for so long,'' said Peter Hodson, senior portfolio manager at Sprott Asset Management Inc., which manages $3.52 billion in Toronto. ``Time will tell whether this deal works out. The timing certainly looks pretty good.''

Each Abitibi share will be exchanged for 0.06261 share of the new company, and each Bowater share will be exchanged for 0.52 share of AbitibiBowater.

Management

John W. Weaver, chief executive officer and president of Abitibi, will be executive chairman of the combined company, and David J. Paterson, CEO and president of Bowater, will hold those titles at AbitibiBowater.

--SNIP--

[AnneD]

5. Oil prices rise as cold weather grips eastern U.S.

SINGAPORE — Oil prices rose in Asian trading today amid expectations that heating fuel demand will increase amid forecasts of continued cold weather across the U.S. East Coast, a major market for heating oil.

"The continuation of cold weather in the United States — after a pretty warm start of the winter — helps shore up prices because if there was no cold weather at all, there would be huge inventories," said Tobin Gorey, a commodity strategist with the Commonwealth Bank of Australia in Sydney. "The market's not worried about that any longer."

An unusually warm winter in the U.S. drove crude oil below $50 a barrel earlier this month, but the price has since risen about 10 percent as cold weather returned. Forecasters predicted below-normal temperatures gripping the East Coast to continue into at least the first week of February.

Light, sweet crude for March delivery gained 31 cents to $55.73 a barrel in electronic trading on the New York Mercantile Exchange, mid-afternoon in Singapore. The contract rose $1.19 to settle at $55.42 a barrel on Friday.

http://www.chron.com/disp/story.mpl/business/4506827.html

I don't know about you all, but we didn't get much of a price break here.:eyes:

[54anickel]

20. Bernanke, Trichet May Find Cheaper Oil Raises Inflation Risks

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1_S1akbqdqA&refer=worldwide

Jan. 29 (Bloomberg) -- Plunging oil prices are relieving one inflation headache for central bankers Ben S. Bernanke and Jean- Claude Trichet, only to give them another.

The same lower energy bills that are removing a source of inflation are also stoking the world economy at a time when it is already growing briskly. That may be enough to force interest rates higher in Europe, and keep them from coming down in the U.S.

``It's a special challenge,'' says Laurence Meyer, a former Federal Reserve governor who is now the Washington-based vice chairman of Macroeconomic Advisers LLC. ``Lower inflation might tell you to ease, higher growth might tell you to tighten. What do you do?''

For Federal Reserve Chairman Bernanke and his fellow policy makers in Washington, the answer for now is ``nothing at all.'' The Federal Open Market Committee, meeting Jan. 30 and 31, is expected to leave its overnight interest-rate target at 5.25 percent, where it has stood since June.

Lower oil prices are ``worth three interest-rate cuts,'' says David A. Rosenberg, chief North American economist with Merrill Lynch & Co. in New York. ``Who needs the Fed, really, in this environment?''

Futures trading shows investors see only a 4 percent chance of a rate cut in the first half of this year, down from 72 percent a month ago. Investors have been reducing their bets as evidence accumulates that the U.S. economy is rebounding on the strength of an improving housing market, higher wages and less expensive gasoline. Consumer confidence reached a three-year high in January, according to the Reuters/University of Michigan's monthly index.

Windfall

Rosenberg says Americans are enjoying ``the lowest heating bills in two years,'' a windfall that could add 0.4 percent to consumer spending growth this quarter.

more...:eyes:

[Roland99]

51. Gas is up as much as $0.40 in the last 4-5 days in parts of the city.

[JNelson6563]

6. Thanks for the kick-off UIA!

Not sure what I'd do if there were suddenly no more SMW!

:hi: Julie

[UpInArms]

44. You're welcome, Julie!

I feel the same way - and when the SMW wasn't up and I didn't know .... well, okay, I bit the big one and threw one up before I had to run away and face my day.

I do so miss my long days (and believe me they weren't "long" in a bad way) - days at DU when I could read every piece of news and dissect(sp?) it for all its many and varied meanings.

Oh well, life changes and moves us along the streams of time.

I hope everyone is well and knows how very much I miss spending my days here.

:grouphug:

:hi:

[pushycat]

50. Hey UIA. Thanks for all the great info for us laymen. YTB!!! eom

[AnneD]

7. Local governments: FCC not playing fair

WASHINGTON — The nation's chief telecommunications regulator stands accused of misrepresenting the facts while pushing through rules that will make it easier for big phone companies to get into cable television.

The policy change won approval by the Federal Communications Commission on a 3-2 vote Dec. 20. That angered local government officials who claim the agency overstepped its authority and now promise a legal challenge. The vote also drew the threat of a "legislative fix" from a powerful congressman.

The new rules are meant to spur more competition for cable television providers. They require local governments to speed up the approval process for new competitors, cap the fees paid by new entrants and ease requirements that competitors build systems that reach every home.

Consumer groups long have complained about rising cable rates and poor service, blaming the problems on a lack of competition.

<big snip>

http://www.chron.com/disp/story.mpl/ap/business/4506427.html

The GOP want to make it easier for their friends and contributers and are SHOCKED,SHOCKED I tell you to realize that DEM's are in the majority now. This is a good general info piece.

[54anickel]

8. Thanks UIA.

Anyone hear from Ozy yet? Now I am getting concerned.

Thoughts and good vibes again Ozy...

[54anickel]

9. Nevermind...I should have checked my PMs first.

He's OK, but his ISP messed up his account. He won't be back online until after 11:00 tomorrow.

Thanks to all for the thoughts, well-wishes, prayers, good vibes, etc.

I can set my alarm and cover for tomorrow morning.

[UpInArms]

46. thanks 54anickel!

I'll be happy to join in with the somewhat daily dollar watch.

:D

[54anickel]

48. No problem, if you happen to get up before me, by all means feel free!

I've got the code sheet ready to go, who knows maybe I'll have another insomnia attack and end up tossing it out there at 3am! I was so worried about Ozy Friday AM when there was no SMW thread. I got one started, though rather late in the morning for most Marketeers these days.

Hoping life settles down for all of us one of these days....I miss our old bantering days so much. :hi:

[Egnever]

10. For stocks, earnings may trump Fed and jobs

http://biz.yahoo.com/rb/070127/column_stocks_outlook_scheduled_weekly_co.html?.v=1
Saturday January 27, 7:45 am ET
By Cal Mankowski


NEW YORK (Reuters) - Earnings reports from hundreds of U.S. companies, including some of the biggest such as Boeing Co. (NYSE:BA - News) and Procter & Gamble Co. (NYSE:PG - News), are likely to drive stock investors' decisions next week, barring any surprises from a mid-week Federal Reserve meeting or Friday's data on January jobs.
ADVERTISEMENT


There is widespread agreement that there are signs of a slowdown in the robust earnings growth that has helped stocks move higher since 2002.

[54anickel]

11. Market Wrapup - Tim Woods

http://www.financialsense.com/Market/daily/friday.htm

The positive for the market is obviously that it continues to move higher and higher as the advance out of the June/July lows remains intact. According to Dow theory, the Secondary Trend also remains intact and as I read the Dow theory, I also believe that the Primary Trend is also positive. Cyclically, the longer-term trend remains positive as well. So, let me make it clear that until a confirmed downturn according to Dow theory and/or a cyclical breakdown of at least intermediate degree occurs, this advance cannot be called done.

Now, I want to talk about a few of the problems and reasons for concern about the ongoing advance. First and contrary to popular opinion, the long-term data continues to suggest that the 4-year cycle low is still ahead of us. I am totally aware of the fact that most people are of the opinion that the 4-year cycle low occurred at the June/July 2006 lows. The problem with such opinion is that it is a convenient answer and not based on any of the historical “DNA” markers that have occurred at other 4-year cycles in over 100 years of market data. By saying this I am not trying to fight the trend, because again I agree that as of this writing the trend is still up in accordance with both the Dow theory and my cyclical based work. What I am saying here is that the 110 years of market data available on the Industrials continues to suggest that this advance is carrying the market into the 4-year cycle top rather than the move out of the summer lows being the 4-year cycle low as most of the rest of the world believes. The full details and ongoing developments surrounding this opinion are far beyond the scope of this brief article.

snip>

To the contrary, the decline into the summer lows of 2006 did not meet any of the historical “DNA” markers that have been present at all of the previous 27 4-year cycle lows since 1896. Sure, the market can do anything and there is a first time for everything. But at present, there still is no hardcore supportive data that the 4-year cycle low occurred last summer. As a result, the odds simply suggest that this advance is still pushing up into the 4-year cycle top and that the low still lies ahead. I know this may be hard to believe, but this conclusion is not some shallow opinion. My opinion is based on substantial quantitative analysis. Think of it like a blood test from the doctor. Just because you don’t feel bad isn’t justification that his lab work is invalid. By the same token, just because the rest of the world believes that the summer low marked the 4-year cycle low and the market has continued to hold does not mean that they are correct. I can promise you, they don’t have the statistical quantification surrounding the 4-year cycle that I have.

Next, I want to talk about the Dow theory piece of the equation, and first let me say that cycles are not a part of Dow theory. But, it is an historical fact that the vast majority of all 4-year cycle tops have also occurred in conjunction with a Dow theory non-confirmation. Such non-confirmation is marked in red and can be seen in red on the chart below as the market moved into the 2000 top. The current non-confirmation is noted in green and has been ongoing since May 2006.

I have said this before, but let me say it again. Non-confirmations are not buy and sell signals. Rather, they are warnings that a possible trend change is in the making. So as long as this non-confirmation is in place, it must be respected as the warning that it is.

more...

[specimenfred1984]

32. Sorry, Tim Woods has zero credibility

He denies the reality of big trading houses having a huge inpact on the markets and prefers to live in a fantasy of theories.

He's as delusional as chimp is.

[54anickel]

12. Expanding on El-Erian (Last entry of the Credit Bubble Bulletin)

http://www.prudentbear.com/articles/show/298

Bloomberg’s Tom Keene: “Your op-ed piece in today’s Financial Times - it certainly got my attention and many others here at Davos, and you do lead it with much of the discussion at these meetings on a changed global economy. The headline is classic El-Erian – “Complex Finance in a Brave New World Economy.” First, what’s new now that’s different, say, five or ten years from now?”

Mohamed El-Erian, CEO Harvard Management Co.: “I think what’s new is you’ve got a group of countries that have become systemically important in influencing growth, trade and, critically, capital flows. And they behave differently from what we’ve been used to. So the result is we’re coming across all these aberrations in markets – in economic behavior – that we’re all trying to explain. And unless we recognize that there are structural changes, we tend to get stuck on a debate between what is sustainable and what is less than sustainable, as opposed to what are the underlying factors that are now in play...”

“What we are in right now is bit of a journey; a journey where global growth is being supported by the coming on stream of these new economies. And where the decisions to allocate their wealth is helping countries maintain relatively low interest rates and relatively low borrowing costs overall. This is the journey and the journey feels better than most people expected. But the jury is still out as to what the destination looks like. And there are risks there both of the economic and geopolitical perspectives...”

“We’ve had a dramatic revolution in financial instruments. The proliferation of derivative-based instruments - that tend to decouple trading from the underlying market- has allowed many investors to get involved in markets that otherwise would have been difficult to access. You see this here in the United States in terms of the exotic mortgage, which allows people to buy homes that they couldn’t otherwise afford. You also see it in terms of capital flows, in terms of Credit default swaps, etc. If you step back and ask, “What is the major change?” - is that the barriers to entry to these markets have come down, with the result that liquidity and velocity has gone up.”

Bloomberg’s Tom Keene: “Are you concerned about the complacency that we see here looking out this window – this gorgeous valley filled with CEO and executive complacency? Is it remarkable where spreads are?”

Mr. El-Erian: “It’s totally remarkable where spreads are. I think that it would be wrong to think that spreads reflect the level of risk. They don’t – they underestimate the level of risk. But they’re there because of technical influences. So, the big message – and that’s what I tried to emphasize in the article today – is that what we normally are used to looking at in terms of market signals – the shape of the yield curve, the level of volatility, the level of risk spreads – all that is being distorted during this transition. So, risks are not as low as risk spreads would suggest – volatility is not as low as volatility measures would suggest. But there is a good reason why these measures are distorted right now.”

more...

[54anickel]

13. The Highway Men (Bonner)

http://www.prudentbear.com/articles/show/301

snip>

The rich got their money honestly back then...or, at least most of it. They put their family names on their products and spent their loot grandly. Silk shirts, top hats, spats...great limousines with chauffeurs...grand balls with orchestras...and servants dressed in proper outfits.

But now, what’s this? A new bunch of kings have taken its place in Greenwich, dressed in perma-pressed khaki pants with blue, open-collared shirts. They are richer and busier than any group of bees the honey-pot nation has every produced. Still, don’t bother to look for their last names on your refrigerator...or on your armchair...or even on your liquor bottles.

Paul Tudor Jones, who lives in a house in Greenwich that resembles the mansion in ‘Gone with the Wind’, is a very rich man. But what did he do for the money? He is not a king of industry. He does not bring milk to the masses; nor does he provide copper pipes for their water systems...nor mattresses to rest their weary bones. Mr. Jones is a Bubble King, who manages a $15 billion hedge fund.

In another little town favored by the new moneyed classes, Norwalk, the granite mansion of steamship magnate and head of U.S. Steel, James Augustus Farrell, has fallen into the hands of another Bubble King - Graham Capital Management, a hedge fund with $5 billion in assets and only 150 employees.

snip>

How is it that - in a free market system, where people are supposed to be rewarded according to how much they provide to others - today’s biggest prizes go to those who provide so little? Mr. Jenkins and Mr. Blankfein do not add in any appreciable way to the world’s wealth. Instead, they merely move it around - from middle and lower class taxpayers to the super-rich...from householders to speculators...and, by loading up the world with debt, from the future to the present.

The answer is to be found in the details of modern finance.

more...

[54anickel]

21. Trichet warns of 'unstable' financial markets

http://biz.yahoo.com/ft/070128/fto012820071709102492.html?.v=1

snip>

The recent explosion of structured financial products and derivatives had made it more difficult for regulators and investors to judge current risks in the financial system, Mr Trichet said. "We are currently seeing elements in global financial markets which are not necessarily stable," Mr Trichet said, pointing to the "low level of rates, spreads and risk premiums" as factors that could trigger a repricing.

"There is now such creativity of new and very sophisticated financial instruments ... that we don't know fully where the risks are located." He added: "We are trying to understand what is going on but it is a big, big challenge."

Mr Trichet's comments reflect a debate in policymaking circles about the implications of the growth in derivatives.

Many investment bankers and some regulators and economists argued at last week's World Economic Forum in Davos that the growth of the $450,000bn (EU350,000bn, £230,000bn) derivatives sector had helped reduce market volatility and made the system more resilient to shocks by spreading credit risk. But other officials fear these instruments may be raising leverage and risk-taking to dangerous levels and keeping the cost of borrowing artificially low, potentially increasing the chance of financial crises.

more...

Any guesses on who those "Many investment bankers and some regulators and economists" are? :eyes:

[54anickel]

27. Prepare for asset repricing, warns Trichet

Pretty much the same article with a bit added toward the end

http://www.ft.com/cms/s/4f5d6b28-af3d-11db-a446-0000779e2340.html

snip>

Malcolm Knight, managing director of the Bank for International Settlements, said: "Financial innovation has produced vehicles for leverage which are very hard to measure . . . liquidity is increasing very rapidly and this is affecting asset prices."

Central banks were scrambling to address the problem by intensifying their joint discussions via forums linked to the BIS, he said, but he warned that international co-operation and data gathering efforts "need to be deepened".

Stanley Fisher, governor of Israel's central bank, pointed out that it remained unclear "who takes responsibility for the system" at a time of crisis, particularly given that the "hegemony of the US is diminishing".

[JNelson6563]

14. 11:56 update

Dow 12,507.05 +20.03 (0.16%)
Nasdaq 2,439.04 +3.55 (0.15%)
S&P 500 1,422.88 +0.70 (0.05%)
10-Yr Bond 4.8750% -0.0040

Quick snap-shot of the day's market action at half-time (+/-). Pretty dull at the moment.....

Julie

[54anickel]

15. Inflation in the U.K.

http://www.iaconoresearch.com/PublicArticles/07-01-25_public_article.html

In many ways, the United Kingdom is a miniature version of the U.S. They too are one of the few Anglo Saxon countries having an outsized trade deficit and budget deficit, they are graced by an enormous housing bubble, they are one of the world's great financial centers, and their population is accustomed to a position near the top of the heap of world powers.

Another very important similarity between the two countries is a festering inflation problem that no longer seems to be quelled by cheap imported goods from Asia and moderate energy prices.

In many ways, rising prices are much more acute in the U.K. than in America.

With a rapidly growing world financial center in London, the country has been a popular destination for those with petro-dollars to spare. And what appeared to be a bursting housing bubble a year ago has been reinvigorated - with home prices again rising at double-digit rates (closer to triple-digit rates in tonier areas), it now looks more dangerous than ever.

In recent years, the government agencies charged with maintaining confidence in the currency have been successful in continuing to report low single digit price increases. Aided by excluding or reweighting one thing or another and by undergoing ever more severe contortions in the actual calculations, reported inflation has remained tame.

In 2006, Everything Changed

Earlier this month, prompted by continuing concern from many corners that the government's inflation statistics are not consistent with real-world experiences, the Office on National Statistics (ONS) made available a personal inflation calculator.

It was a big hit.

more....

[Ghost Dog]

17. ECB's Trichet Says Money Supply Growth Validates Rate Increases

http://www.bloomberg.com/apps/news?pid=20601083&sid=amdy2jtRQnXc&refer=currency

Jan. 28 (Bloomberg) -- European Central Bank President Jean- Claude Trichet said the fastest money supply growth in 17 years validated recent interest rate increases.

``Economic indicators justify the steps we have taken in the past,'' Trichet said in an interview with France's RTL Radio and LCI Television. He said central bankers were ``closely'' monitoring data on loans, real estate prices and energy costs.

Trichet's comments complete a week in which ECB governing council members have cemented investor expectations that it will raise the benchmark 3.5 percent interest rate another quarter point in March. It would be the seventh increase since late 2005 and financial markets are betting it won't be the last.

M3 growth, the ECB's preferred measure of money supply accelerated 9.7 percent in December, the fastest in 17 years, a Jan. 26 report showed. Data due for release this week will show unemployment holding at a record of 7.6 percent in December and inflation returning to above the ECB's target of just below 2 percent, according to median forecasts in Bloomberg News surveys of economists.

/...

[54anickel]

16. Protectionist Threats: Then and Now (Roach)

http://www.morganstanley.com/views/gef/archive/2007/20070126-Fri.html

America has been down this road before. In many respects, the Japan bashing of the late 1980s has an eerie, but encouraging, similarity with the China bashing of today. Most believe that the outcome of nearly 20 years ago is emblematic of what can be expected today -- a lot of bluster, but trade frictions that stopped far short of protectionism. That may be giving rise to a false sense of security. Unfortunately, some important complicating factors may draw this conclusion into serious question.

snip>

Notwithstanding a more careful assessment of the China factor that puts the US deficit concentration ratio in perspective, there can be no mistaking the intensity of the angst bearing down on the American workforce. I suspect something else may be at work here. As I have noted previously, at present, there is an extraordinary disparity between the capital and labor shares of US national income (see my 8 January dispatch, “The Power Shift”). The profits share currently stands at a 50-year high of 12.4%, whereas the labor compensation is just 56.3% -- back to levels last seen on a sustained basis in the late 1960s. It turns out that’s a very different juxtaposition of economic power relative to that which prevailed during the Japan bashing of the late 1980s. Back then, the shares of both capital and labor were under pressure: The profits share of about 7% was well below the 10% reading hit a decade earlier whereas the labor compensation share of about 58% was down markedly from the 60% reading hit in the early 1980s.

In my view, this underscores a key element of tension in America’s current backlash against globalization that was not evident in the late 1980s. Today, the pressures are being borne disproportionately by labor, whereas 20 years ago, capital and labor were in the struggle together. In the late 1980s, many of the once proud icons of Corporate America were fighting for competitive survival at the same time that US workers were feeling the heat of global competition. The pain was, in effect, balanced. Today, US companies, as seen through the lens of corporate profitability, are thriving as never before while the American workforce is increasingly isolated in its competitive squeeze. In essence, capital and labor are working very much at cross purposes in the current climate, whereas back in the late 1980s they were both in the same boat.

There are other differences between then and now that could also be intensifying the angst of the American worker today. Back in the late 1980s, the perceived adversary, Japan, was a wealthy developed country that paid its workers wage rates comparable to those in the US. Today, the fixation is over a poor developing country, China, where manufacturing workers are paid at about 3% the hourly rate of those in America. Moreover, the competitive pressures of the 1980s were the slow-moving variety bearing down on the manufacturing sector. Today, courtesy of IT-enabled outsourcing, the threat is intensifying at hyper-speed, while at the same time, spreading from manufacturing to once nontradable services. In other words, it is really not that difficult to understand why the fear factor of US workers is far more exaggerated today than it was during the late 1980s.

more...

[54anickel]

26. China tells yuan critics to back off

http://www.iht.com/articles/2007/01/28/news/dyuan.php

DAVOS, Switzerland: China wants the rest of the world to respect its gradual pace of economic reform, a senior Chinese central banker said here, telling critics to "clean your own house first."

Wu Xiaoling, deputy governor of the People's Bank of China, avoided naming names but handed out the advice only a few weeks after top U.S. financial policy makers visited Beijing to press China to act faster on liberalizing the yuan.

"There is a Chinese saying that you should put yourself in others' shoes; you need to respect others," she said at the World Economic Forum in Davos. "We respect other people's policies. The Chinese say, 'clean your own house first.'

"We should be very careful how we proceed, and I compare it to walking on ice," she added.

The U.S. Treasury secretary, Henry Paulson, after meeting the Chinese president, Hu Jintao and the prime minister, Wen Jiabao, last month, said the Chinese reluctance to let the yuan quickly appreciate remained a core bilateral issue.

more...

[Ghost Dog]

18. Ahmadinejad’s Achilles Heel: The Iranian Economy

http://www.scoop.co.nz/stories/HL0701/S00336.htm
By Dr. Abbas Bakhtiar
24 January 2007

Titus Livius (59 B.C.–A.D. 17) the Roman historian once said that men are only too clever at shifting blame from their own shoulders to those of others. These days Mr. Ahmadinejad, the man the West loves to hate, is in hot waters in Iran. He is blamed for almost everything that has gone wrong with Iran. Iranian newspapers and politicians of all colours are lining-up to criticize his leadership and economic policies. He is blamed for everything from shortage of dialysis machines in some clinics to high inflation and provocative speeches. Some politicians are even talking about impeaching not only some of his ministers, but also the president himself.

What a difference a year makes. It was in mid 2005 that Ahmadinejad won a land-slide victory (62%) in the presidential election. As a presidential candidate he had promised to improve the lives of the poor and the lower classes by “putting petroleum income on people’s tables”. His campaign motto was “it is possible and we can do it”.

Son of a blacksmith, Ahmadinejad was the fourth child of a working class family with seven children. He was brought up in the rough and poor neighbourhoods of south Tehran. He is therefore familiar with the problems facing the poor families and has tried to fulfil his election promises to them by increasing the minimum wage (under pressure was later reversed), the pensions, consumer loans for low-income families, loans for small enterprises in underdeveloped regions, and other popular projects. He has also been travelling around the country approving construction projects and distributing largesse.

This lavish spending has increased the double digit inflation rate even more and has caused concerns among politicians and economists that his economic policies coupled with his hard-line stance on nuclear dispute and approach to foreign policy may damage the country. Some economists argue that while the country’s economy is being pressured externally (sanctions), the government is spending money as though there were abundance of resources.
ADVERTISEMENT

The Iranian senior economist Dr. Masoud Nili of Iran International points to an ever expanding government budget and increasing dependence on the oil revenues as a serious problem for the country. He argues that:

“in 1998, average oil price stood at 10.8 dollars per barrel and oil revenues grew fourfold in about 7 years. Meanwhile, state budget in 1998 was less than 71,000 billion rials, but Iran’s budget for 2006 has been estimated at 600,000 billion rials; that is, while oil revenues have quadrupled over a 7-year period, state budget has increased eightfold during the same period.
Before 2002, government spent an average of 15 billion dollars in foreign exchange. The figure increased to 21 billion dollars in 2003, to 30 billion dollars in 2004, and to 36 billion dollars in 2005. It seems that the figure will reach 45 billion dollars in 2006, which is indicative of serious budgetary dependence on petrodollars.
The Third Economic Development Plan aimed at reducing government’s dependence on oil revenues to less than 12 billion dollars, but it actually soared to more than 40 billion dollars in 2006. Therefore, the government’s budget experienced such a great leap in 14 months from January 2005 to march 2006, when the government was determined to offer Majlis with a budget supplement. Considering this reality, one can conclude that the country witnessed one of its biggest financial developments in the Iranian year, 1385.”<1 >

As inflation is rapidly approaching critical levels, economists and politicians have began to sound the alarms. There are now open calls for impeachment of several government ministers and although not openly mentioned, the moderates and some conservatives would like nothing more than impeaching the president himself. The rallying cry for the opposition is “the economy”; a clever point of attack since they know that no president no matter how wise or prudent, can solve the existing economic problems of Iran without a comprehensive restructuring of the economy; something that many special interest groups and powerful economic entities are against. The following are some of the problems facing Iran.

/read on...

[54anickel]

19. Let me save Doha, Bush begs Congress

http://www.telegraph.co.uk/money/main.jhtml;jsessionid=0LFPUNRNDFVC1QFIQMFSFGGAVCBQ0IV0?xml=/money/2007/01/29/cndavos29.xml

snip>

The stage is set for a frantic few months of talks between the world's main trade representatives. Mr Mandelson is to meet Brazilian foreign minister Celso Amorim in Geneva today and the hopes are that, if the US offers to make further cuts to its agricultural support, a deal could be struck soon.

If the round is to be successful, insiders think it essential Mr Bush extends his fast-track negotiating authority. This allows him to speed through a deal without the specific approval of Congress, and is thought essential to the talks, but it is due to expire in July.

In his speech tomorrow, Mr Bush will warn the Democrat-controlled Congress that, unless they agree to extend this effective deadline, they would be responsible for causing economic paralysis in the US and around the world.

The developing nations want rich countries to give them more access to their agriculture markets by cutting subsidies and tariffs which support farmers. The developed world wants more access to poorer countries' lucrative industrial and services markets. The talks broke down last summer as negotiators failed to agree how to structure a deal. While the talks have resumed, the barriers left to surmount are still significant. At the weekend, European Trade Commissioner Peter Mandelson formally promised to make further cuts to agriculture support, though the US is yet to match it.

snip>

But Mr Lamy said the "window of opportunity" created when Mr Bush calls for the extension would be small. "It's a question of months, rather than quarters," he said, adding: "Time is running out."

Mr Mandelson said: "The alternative to what's on the table is not the perfect deal, but no deal at all."

more...

Deal/No deal

[54anickel]

22. It's just no use trashing junk bonds

Investors' appetite for high-yield debt trumps concern about risk, for now. Takeover artists appreciate the favor.

http://www.latimes.com/business/la-fi-petruno28jan28,1,5477471.column?coll=la-headlines-business

Tired of being on the outside looking in at the scads of money being made by corporate takeover artists and hedge funds?

It's easy enough to be part of those booms. By buying into mutual funds that own either high-yield bonds or high-yield bank loans, you can invest with the new movers and shakers in finance, who are ravenous for cash to bankroll their escapades.

But to jump in today is to ignore the advice of Wall Street veterans who say the risks are too worrisome, and the potential investment returns too low, to justify joining the big-money crowd.

The problem with those warnings is that they were out there a year ago too — and you would have been better off paying no attention to them.

"Last year we were all wrong" in advising caution, says King Penniman, head of high-yield bond research at KDP Investment Advisors in Montpelier, Vt.

The average high-yield (or "junk") bond mutual fund in 2006 had a 10.1% total return, according to Morningstar Inc. That gain, which counts interest earnings plus capital appreciation, was more than twice the return on ultra-low-risk money market funds.

We're in the thick of a period when debt is a good thing rather than a bad thing, at least in the corporate world. And the riskier the debt, the more investors want it.

more...

[Lucky Luciano]

34. There is no doubt about that!

Credit spreads are as tight as they have ever been...and still the market is not fully tapped....They could go tighter.

Credit Spread roughly means the difference between a corporate bond yield and the risk free US Treasury rate - or people use LIBOR more often that the Treasuries. There is an index of High Yield bonds which is priced in terms of their credit spreads. Spreads blew out hardcore in 2002-3 - they were super wide due to bankruptcies and corporate accounting scandals. Anyone who went long credit since then made a killing.

A CDS (Credit Default Swap) is like insurance against the bonds. If you have insurance, then in theory, owning the bonds and the CDS is risk free (up to the creditworthiness of the insurer of course). Therefore, the CDS insurance payment (twice a year of accruing payments) should roughly equal the credit spread over LIBOR. So one often buys a CDS without the bonds hoping the bonds default (HUGE SCORE) or the ysell the CDS collecting the insurance payments and hoping the bonds do not default. More often, the price of that insurance changes. So you might buy 5 yr protection for 300 bps on $10M worth of bonds. If bad news for credit comes out and the spread widens to 400 bps, then you make 100 bps profit on payments over 5 years on $10M notional. Discounted to today 5 years is like 4 years (do the math). So one would make $10,000,000 * 4 * .01 = $400K - accrued payments for insurance.

I know a prop desk on the street that went long $1.5B GM with credit spreads of roughly 950 bps (not by buying bonds, but by selling CDS instead.

They sold buttloads of the 5 yr CDS for around 950 bps of GM the early summer and that CDS now trades at about 325 bps. They made 625 bps - over 5 years of payments discounted to their present value this becomes 625 bps * 4 = 2500 bps profit on $1.5B notional (discounting to present value is why we multiply by 4 instead of 5 - rough approximation). That is $375M (I am not even including the accrued payments of insurance). Traders on prop desks often take 10% of the winnings they make each year too...Took some stones to throw on a position of that size. Big score....It was half of their PnL for the year.

[54anickel]

23. U.S. plans stronger oversight of 401(k)s

http://www.latimes.com/business/la-fi-401fees29jan29,1,6692594.story?coll=la-headlines-business

WASHINGTON — Congress and government regulators are planning an array of moves to strengthen oversight of 401(k) accounts, which have become the linchpin of retirement savings for millions of Americans but are often burdened by hidden fees that chip away at their value.

Rep. George Miller (D-Martinez), a member of the Democratic leadership and the new chairman of a committee that has authority on retirement matters, said he planned to hold hearings on 401(k) fees this year as part of a broader effort to examine issues that undermine the financial security of older Americans.

"All of these fees and commissions, all of these charges at some point end up coming out of the 401(k) owner's account," said Miller, chairman of the House Committee on Education and Labor. "I think we have an obligation to make sure that those costs are proper."

Separately, the Labor Department is moving forward with three initiatives to make the expenses of 401(k) plans more transparent to workers, employers and regulators. The Government Accountability Office recently concluded that employees get information about their plan's expenses in a "piecemeal" fashion, and that regulators need more details about those charges to conduct effective oversight.

snip>

Retirement savings plans, such as 401(k)s, were once an afterthought in policy circles, where attention focused overwhelmingly on traditional pensions that paid retirees a guaranteed amount. Although many companies have backed away from pensions, 401(k) plans have spread rapidly, and they now cover 47 million Americans — more than double the number in the traditional plans.

At the same time, critics contend it is often difficult for the public to assess and compare 401(k) investment options, in large part because costs may be hard or even impossible to track. Although such fees may be a fraction of 1%, they can compound to tens of thousands of dollars over the long term.

snip>

"For whatever reason, retirement security is just far too tenuous for many American families," said Miller, whose panel will be exploring not only the issue of hidden 401(k) fees but ways to encourage employers to retain traditional pensions.

"Why that is I don't know, but I'm sure as hell going to find out."

more...

[54anickel]

24. Retirement tax will hit US executives

http://www.ft.com/cms/s/19d34990-aefd-11db-a446-0000779e2340.html

US corporate executives face drastic reductions in their retirement nest-eggs under proposed tax legislation that would also hit Wall Street banks and other large companies.

The measures, likely to be approved by the Senate on Tuesday 30 January and expected to become law in the next few months, are part of a drive by the new Democratic Congress to fund promised tax relief for the middle class and businesses by closing loopholes and increasing the costs of corporate wrongdoing.

The new tax legislation, which could add more than $800m to the collective tax bill of US executives in the next decade, is also the first attack by the new Congress leadership on excessive executive compensation. The issue has risen to the top of the corporate governance agenda following investor protests at pay awards for US chief executives.

The new rules to be considered by the Senate are part of the measures aimed at offsetting the costs of more than $8bn of tax relief for small businesses hit by a proposed rise in the minimum wage. For the bill to become law, it will have to be approved by the House of Representatives.

The proposals, which were approved by the Senate finance committee last week, would cap the amount of compensation that executives can defer until retirement – a common method used to minimise taxes.

more...

[54anickel]

25. The Hard Rain That’s Falling on Capitalism

http://www.nytimes.com/2007/01/28/business/yourmoney/28every.html?_r=2&adxnnl=1&oref=slogin&ref=business&adxnnlx=1170092945-+79vjc7Jcdsd+dYUib6GAw

snip>

When I see what the top dogs at all too many corporations are now doing to that trust, I feel queasy. Outrageous — yes, obscene — pay. Greedy backdating of stock options, which in my opinion is straight-up theft. Managers buying assets from their trustors, the stockholders, at pennies on the dollar, then forestalling competing bids with lockups and insane breakup fees.

These misdeeds and many, many more are hammer blows at the granite foundation of trust we built in the 1940s and ’50s. How long democratic capitalism can survive these blows before it gives in and gives birth to revolution or to an out-and-out aristocracy, I am not sure.

Empires come and go. Economic systems come and go. There is no heavenly guarantee that capitalism will last forever as we know it.

It’s built on man’s notion that he can trust his neighbor with his money, and that if the neighbor misbehaves, the law will chase him and catch him, and that the ladder of law has no top and no bottom, that even the nobles get properly handled (Bob Dylan again) once they have been caught.

If that trust disappears — if the system is no longer a system for the ordinary citizen but only for the tough guys — how much longer can the miracle last?

EACH day’s newspaper, it seems, brings more tidings of unrestrained selfishness and self-dealing and rafts of powerful people saying it’s good for us to be robbed if only we truly understood the system.

The problem is, we’re getting to understand it all too well.

[PassingFair]

36. Too little, too late, Ben Stein.

They will come for your money, too.

They always do.

[54anickel]

37. That's the scary part, when you see old name capitalists speaking

up against what's going on, you know there's bound to be trouble ahead. The status qou that protected their wealth is being threatened. The new breed of capitalists don't understand the importance of tossing crumbs to the "fodder units" to keep the peace - their greed is too great and threatens the pyramid scheme that has worked so well since the last depression.

[AnneD]

39. Where is it written.....

that we go into an aristocracy....We were a hare's breath away from either communism or socialism during the Great Depression. I don't think the modern day upper class seem smart enough to back down and take a smaller piece of that pie they are holding. We will really live in interesting time when this house of cards they have the nerve to call an economy collapses.
If they don't start leveling the field a bit on their own-it will be leveled for them. These folks won't be the first people to lose it all in a revolution.

[54anickel]

28. Indian market 'correction' looms

http://news.yahoo.com/s/ft/20070128/bs_ft/fto012820071709082479;_ylt=AhnlGG_0KMBHSwGupHTGUor2ULEF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--

India's real estate and stock markets are heading for a correction, with a liquidity crunch in the banking sector likely to accelerate the trend, according to one of the country's most influential bankers.

Indian stock valuations are inflated and property prices in many areas are beginning to exceed what people can afford to pay, said Deepak Parekh, chairman of Housing Development Finance Corporation, which controls India's second largest private-sector bank.

"I'm concerned about overheating real estate prices, I'm concerned about overheating of stock markets, that some of the valuations are not justifiable," Mr Parekh said in an interview. "The kind of returns people got in the last two to three years, they would be foolish to expect this year. The Indian story is fully priced."

Foreign investors eager to tap into India's rapid economic growth of above 8 per cent have been pouring funds into stocks and specialist private equity funds investing in property and other sectors.

snip>

"The government keeps talking of a benign interest rate policy but with demand for funds in excess of the liquidity available, something has to break somewhere."

He said he expected a correction rather than a crash, with the stock market likely to settle 10-20 per cent below its current levels and real estate price rises to stall rather than collapse.

more...

[AnneD]

40. If you think our real estate market is overheated...

India's RE and entire economy is just awash with liquidity. If I had the bucks (and the mean spiritedness), I'd be aquireing some companies overther and extracting some liquidity.

[54anickel]

29. Merrill Lynch to buy First Republic

http://www.chron.com/disp/story.mpl/ap/business/4507363.html

NEW YORK — Merrill Lynch & Co., the biggest U.S. retail brokerage, said Monday it will buy San Francisco-based wealth manager First Republic Bank for $1.8 billion in cash and stock.

The transaction allows Merrill Lynch to tap into $10.7 billion of assets held by First Republic, which provides investment services including trust banking and luxury home lending. Because it caters to the wealthy, First Republic attracts hefty deposits and has few credit problems, the companies said.

This marks Merrill's biggest takeover in about a decade, and is part of a wider strategy to offer banking services for its more affluent customers. The New York-based company last year took a 50 percent stake in money manager BlackRock, and also bought mortgage bank First Franklin Financial Corp. last year.

"First Republic will enable Merrill Lynch to accelerate its strategic objective of growing its high net worth business," said Robert J. McCann, president of Merrill Lynch's private client business, in a statement.

He said last year the company was in talks with a number of smaller money management firms around the world to bolster the unit's reach. Among deals secured overseas has been a joint venture with Mitsubishi Tokyo Financial Group Inc. to target wealthy customers in Japan.

more...

[54anickel]

30. Boomers' big inheritance: Is it enough?

http://www.csmonitor.com/2007/0123/p01s01-usec.html

The coming cycle of inheritances is billed as the greatest wealth transfer in US history. But don't expect it to finance the retirement of baby boomers or their children.

The reality, according to one new survey, is that when people do receive an inheritance, it's typically well under $100,000. And most people will receive no inheritance at all.

It's true that US households are richer than ever. Thanks largely to a boom in home prices, net worth has been rising for families across the income spectrum.

But even as the pool of wealth has risen, the cost of retirement has been rising. Longer life spans, coupled with the rising cost of medical care, mean that many older Americans will use their wealth rather than pass it on to children.

"In many cases, because of increasing longevity ... it goes the other way.

Instead of inheriting wealth the children wind up having to spend considerable wealth taking care of their parents," says Zvi Bodie, an expert on personal finance at Boston University.

more...

[AnneD]

42. As I research more and more....

about the benefits of Indian ancestory.....the more valuable Granddad's and Grandmother's legacy becomes. He always felt badly that he was so poor and could never give us much...and his legacy has come to be the greatest posession we have. I just keep shaking my head in amazement. He blessed us with more wealth than he could ever know. All I can say is Wado, Wado (Thank you).

[54anickel]

31. 1:19 check in

Dow 12,533.56 46.54 (0.37%)
Nasdaq 2,447.33 11.84 (0.49%)
S&P 500 1,425.56 3.38 (0.24%)
10-yr Bond 4.8900% 0.0110
30-yr Bond 4.99% 0.01
NYSE Volume 1,427,621,000
Nasdaq Volume 1,090,027,000

1:00 pm : The market is extending its reach to the upside, leaving nine out of 10 sectors in positive territory. There are now four sectors -- Staples, Discretionary, Tech and Industrials -- posting gains of at least 0.5%. Also noteworthy is the Energy sector's ability to not sacrifice much in the way of leadership even in the face of falling oil prices. DJ30 +53.35 NASDAQ +14.21 SP500 +4.38 XOI +0.5% NASDAQ Dec/Adv/Vol 1126/1784/958 mln NYSE Dec/Adv/Vol 1165/2020/734 mln

12:30 pm : The afternoon session kicks off on a high note as further deterioration in oil prices sparks a renewed wave of buying interest in equities. Crude for March delivery is down 1.7% and now near $54.50/bbl, slipping lower amid a recent reversal in natural gas futures further. The extended pullback in both commodities suggests there are adequate fuel supplies to meet an anticipated increase in heating demand as temperatures remain below normal over the next two weeks.

No where has oil's latest pullback been more evident than in the Industrials and Consumer Discretionary sectors, as lower oil makes transportation and retail stocks more attractive. DJ30 +46.54 DJTA +1.0% NASDAQ +8.08 SP500 +3.15 NASDAQ Dec/Adv/Vol 1150/1746/866 mln NYSE Dec/Adv/Vol 1146/2003/660 mln

12:00 pm : All three indices are holding steady in positive territory midday, getting some assistance from upbeat analyst commentary and M&A activity. However, gains remain modest at best as investors anxiously await more clarity on the earnings front and, more notably, what Wednesday's Fed policy directive will imply about further rate hikes.

Of the seven sectors now trading higher, Consumer Staples is providing the bulk of early support. Food Retail (+1.6%) ranks among today's best performing S&P industry groups following an analyst upgrade on Kroger (KR 24.90 +0.39) while Tobacco (+1.5%) is getting a lift after the pending Altria (MO 89.12 +1.12) breakup was mentioned positively in Barron's. Be that as it may, the sector's modest 0.4% advance and defensive nature also play into the limited participation on the part of buyers.

Health Care has been in focus after a French newspaper indicated that Sanofi-Aventis (SNY 44.63 -0.71) and Bristol-Myers (BMY 27.75 +1.54) may announce a friendly deal in the next few weeks. However, BMY's nearly 6% surge is being minimized by follow-through selling in Amgen (AMGN 70.33 -1.17), which is tacking a 1.6% decline onto Friday's 4.5% sell-off.

Technology is also clinging to a small gain. Intel (INTC 20.95 +0.42) is up 2.1% after revealing a new breakthrough chip technology while Hewlett-Packard (HPQ 42.59 +0.90) is the Dow's best performer (+2.2%) after Prudential raised its estimates and price target.

However, the Financials sector earmarked as today's worst performing sector removes some influential leadership. Investment Banks are under pressure as investors question the 46% premium Merrill Lynch (MER 93.17 -1.36) is paying for First Republic (FRC 53.69 +15.39).DJ30 +25.23 DJTA +0.9% DJUA -0.2% DOT +0.1% NASDAQ +4.26 NQ100 +0.1% R2K +0.6% SOX -0.2% SP400 +0.6% SP500 +1.19 XOI +0.3% NASDAQ Dec/Adv/Vol 1175/1688/764 mln NYSE Dec/Adv/Vol 1162/1947/572 mln

11:30 am : The market is trading at improved levels but the indices for the most part remain mired in relatively narrow trading ranges. One stock, in particular, having a positive impact on all three of the major averages is Intel (INTC 20.97 +0.44). The stock is up 2.1% after revealing a new technology to make smaller and faster chips. Fellow Dow component IBM (IBM 98.14 +0.69) is also posting a respectable gain following a similar technological breakthrough while Hewlett-Packard (HPQ 42.66 +0.97) is the best performer (+2.3%) on the Dow after Prudential raised estimates and their price target (to $36 from $33) on HPQ. DJ30 +28.12 NASDAQ +4.67 SP500 +1.58 NASDAQ Dec/Adv/Vol 1125/1694/640 mln NYSE Dec/Adv/Vol 1126/1954/460 mln

11:00 am : More of the same for stocks as the major averages cling to small gains. With oil prices climbing nearly 7% last week, a nearly 1.0% pullback this morning in the price of crude is adding to the market’s slightly positive disposition. Perhaps more noteworthy is the Energy sector’s ability to hold onto a gain that, albeit modest (+0.4%), ranks second among the six sectors currently trading higher. Refiners (+1.2%) is among today's best performing S&P industry groups, getting a lift after Tesoro Petroleum (TSO 78.84 +5.02) topped Wall Street expectations.DJ30 +20.71 NASDAQ +3.85 SP500 +1.12 XOI +0.3% NASDAQ Dec/Adv/Vol 1157/1620/506 mln NYSE Dec/Adv/Vol 1157/1896/350 mln

http://finance.yahoo.com/marketupdate/update

[54anickel]

33. IMF gold trading rule changes set to boost the gold price

http://www.ameinfo.com/108894.html

The International Monetary Fund is in the process of revising the laws that govern the trading of gold by the world's central banks which will radically change the ability of central bankers to suppress the gold price, a major factor depressing the price of the yellow metal that has been an open secret for years.

snip>

IMF review
The IMF has been reviewing all aspects of the gold trade by central banks for the fifth edition of its Balance of Payments Manual which includes the regulations governing gold swaps and loans. IMF officials told ResourceInvestor.com that a draft edition will be posted for worldwide comment within two months.

It remains to be seen whether the central banks now manage to sabotage this attempt to control their alleged gold market manipulation. But the very publication of the draft rules, which have clearly been endorsed internally by the IMF, throws down a major challenge to the banks.

For gold traders, and even the general public, the suppression of the gold market is pretty obvious. Market news that should move the gold price up is often anticipated by the central banks which appear to shuffle a few transactions between themselves to send the price in the opposite direction.


Gold cartel to fall?
But such is the growing size and interest in the gold market that participants are increasingly ganging up in protest at such blatant manipulation that would not be tolerated in any other financial market. It looks as though the IMF has decided that enough is enough and decided to call it a day.



IMF to Tackle Central Bank Gold Manipulation, MAYBE
http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=6B6884AA-17A4-1130-F5526DFA6E227459

Can't cut and paste from this site


Blanchard Lauds IMF Central Bank Gold Lending Accounting Change as Industry Landmark
Precious Metals Economic Research Entity Has Championed This Issue as Key to Adding Even More Transparency, Price Growth to Gold Market

http://sev.prnewswire.com/mining-metals/20070122/DAM00822012007-1.html

NEW ORLEANS, Jan. 22 /PRNewswire/ -- After months of inquiries and a hotly debated, in-depth position paper by its economic research unit, Blanchard and Company has learned that the International Monetary Fund has adopted a landmark accounting change to the way Central Banks account for their gold loans, giving this sector of the commodities market more transparency than it has ever had, the precious metals market leader announced today.

"This is a huge step forward for the precious metals market and a major victory for the gold market investor," said Blanchard Chairman and CEO Donald W. Doyle, Jr. "Not since the Washington Agreement on gold in 1999 and the legalization of gold ownership for Chinese citizens in 2004 has there been such an important event in the advancement of the gold market."

Blanchard and Company has long stated that the IMF's accounting guidelines have allowed Central Banks and bullion banks to inaccurately account for their gold loans, and the newly adopted accounting change means that Central Banks will no longer include the amount of gold they have loaned and sold into the market as part of their reserve total assets, Doyle said.

"Transparency has always been a central issue in the gold market for investors and analysts alike, but this decision by the IMF will greatly redress that issue as these accounting changes are implemented," Doyle said. "It also only adds more credence to our analysis that the precious metals markets are now poised to make long-term, steady price growth."

more...


Not sure what to make of it....seems like a rumor started somewhere....sounds like wishful thinking.

One more that actually has some quotes from the IMF

IMF Has Not Adopted Accounting Changes to Gold Loans
http://www.resourceinvestor.com/pebble.asp?relid=28416

snip>

In response to press queries about a January 22 press release from Blanchard, claiming the IMF made accounting changes for recording gold loans, IMF spokeswoman Conny Lotze sent the following statement to RI:




“At this time the IMF has not adopted any new accounting changes for the recording of gold loans. A review is taking place in the context of the update of the fifth edition of the IMF's Balance of Payments Manual and has involved experts from the Fund, other international agencies, and a number of member countries,” said Lotze.

The IMF’s Balance of Payments Manual governs the accounting and reporting functions of central banks through a set of rules and regulations. The manual regulates how reporting should be handled across a large spectrum of issues, which includes gold swaps and loans.

Blanchard’s statement was a follow-up to a paper by the company published on December 14, 2006, entitled “Gold Market Lending,” which prompted a debate with Kitco’s Jon Nadler. Within the paper, Blanchard’s Director of Economic Research Neal Ryan alleged that unaccounted amounts of gold loaned into the market had a direct impact on the price.

He said the IMF had been reviewing all aspects of their Balance of Payments Manual so that proper updates to the Manual can be implemented in the near future. This week’s statement by Blanchard said that the IMF had indeed made the decision to go ahead with changes to the way central banks account for gold loaned in the market.

Blanchard Chairman and CEO Donald W. Doyle, Jr. said the newly adopted accounting change means that central banks will no longer include the amount of gold they have loaned and sold into the market as part of their reserve total assets.

more...

[54anickel]

35. 3:05 pretty flat for the home stretch here....

Dow 12,493.11 6.09 (0.05%)
Nasdaq 2,435.81 0.32 (0.01%)
S&P 500 1,420.09 2.09 (0.15%)
10-yr Bond 4.8900% 0.0110
30-yr Bond 4.98% 0.00
NYSE Volume 2,032,109,000
Nasdaq Volume 1,553,053,000

3:00 pm : Not much has changed since the last update as the indices continue to fluctuate around the unchanged mark. The market's holding pattern has been further evidenced in the A/D line, as advancers and decliners on the NYSE remain evenly matched while advancing issues cling to a small 15-to-14 edge over declining issues on the Nasdaq. A narrow ratio of down to up volumes paints a similarly neutral picture at the Big Board and the Composite.DJ30 +9.82 NASDAQ +0.20 SP500 -1.61 NASDAQ Dec/Adv/Vol 1408/1585/1.47 bln NYSE Dec/Adv/Vol 1602/1648/1.10 bln

2:30 pm : Buyers remain a reluctant bunch as the indices now languish near afternoon lows. At its highs, the Nasdaq was up as much as 0.7% but is now relatively unchanged. It is worth noting, though, that the volume behind lifting the indices to session highs, as traders worked their way through the New York lunch hour, came on below average volume. The NYSE still has not seen 1.0 bln shares trade hands; but the spike in volume within the hour to the downside actually lends more conviction behind the lack of enthusiasm to own equities than did this morning's limited participation to the upside.DJ30 +9.45 NASDAQ -0.36 SP500 -1.81 NASDAQ Dec/Adv/Vol 1383/1591/1.34 bln NYSE Dec/Adv/Vol 1572/1642/986 mln

2:00 pm : Sellers continue to show their resolve as the three major averages now trade in split fashion. The Dow and Nasdaq are struggling to stay positive as their recent gains have been more than halved within the last 15 minutes. Oil prices have continued to plummet (-2.1%), but the Energy sector's inability to stay positive has removed a notable floor of support for the market.

Recent reversals in Technology and Health Care are also taking a toll on the proceedings while further weakness in Treasuries lifting bond yields to session highs pushes the rate-sensitive Financials sector further into negative territory and into the red for the year. The yield on the 10-year note is back at five-month highs (4.89%) while the yield on the 30-year note is closing in on 5.0% as bond traders exhibit a growing sense of apprehension across the curve ahead of a two-day FOMC meeting that begins tomorrow.

DJ30 +16.08 NASDAQ +1.43 SP500 -0.87 NASDAQ Dec/Adv/Vol 1159/1813/1.19 bln NYSE Dec/Adv/Vol 1188/2015/886 mln

1:30 pm : The indices are off their best levels but still hover close to session highs. While the Dow and Nasdaq were recently successful in breaking through key technical levels of 12520 and 2445, respectively, the S&P 500 has had difficulties attracting enough buying interest to convincingly push through initial resistance near the 1426 level. DJ30 +43.10 NASDAQ +11.09 SP500 +3.03 NASDAQ Dec/Adv/Vol 1137/1831/1.09 bln NYSE Dec/Adv/Vol 1135/2060/810 mln

[54anickel]

38. Senate targets credit card practices

http://biz.yahoo.com/cnnm/070126/012507_credit_card_senate_hearing.html?.v=1&.pf=banking-budgeting

In most instances today, it would be silly to pay an annual fee for a credit card simply because most cards don't have them anymore.
But in a Senate Banking Committee hearing examining credit card practices this week, one consumer advocate suggested those who pay their balances in full every month (about half of all cardholders) should pay a small annual fee to credit card companies.

Why? To pay their fair share.

Say you charge $1,000 at the beginning of every billing period and pay it off in full by its due date a month or so later. That's essentially an interest-free loan from the credit card company to you.

The affectionate term of art for those of us who do this is "deadbeat" because we're not that profitable for the credit card companies. Sure, issuers make money off of you through fees paid by merchants whenever you charge a purchase. And you're deemed a "valued customer" because you make an issuer's portfolio look better when they show it to the securities markets.

But let's face it, such model behavior on your part isn't going to plow record profits into an issuer's pockets.

snip>

Those who carry balances on which they pay interest and fees are subsidizing cardholders with no revolving balance who may even be in rewards programs, said lawyer Michael Donavan of Philadelphia-based Donavan and Searles. He represents those who have unwittingly fallen into many of the sandtrap fees and penalties embedded in hard-to-understand credit card agreements.

Restoring small annual fees on cards used by "non-revolvers" would bolster revenues for card issuers, who then in turn might not make life so expensive for those with revolving balances. :spray: :rofl: :wtf:

[AnneD]

43. Oh yeah...

well I'm still a virgin even though my kid is 16 yo, I have a bridge,lake front property in Az, and a few tickets to the Irish Sweepstakes to sell you. That's rich:eyes: That goes in file "We're from the Government" file. :spray:

[54anickel]

45. Bwahaha! Did you catch the irony of the last paragraph? Does Dodd really

expect these vultures to have some sort of ethical morals or something after reading all the crap they pull in the bulk of the article? Surely he can't be that naive!

But Dodd did issue a warning to credit card companies during the hearing: "If you currently engage in any business practice that you would be ashamed to discuss before this Committee, I would strongly encourage you to cease and desist that practice. Irrespective of the current legality of such practices, you should take a long, hard look at how you treat your customers."

[UpInArms]

47. reminds me

of when they were attempting to deregulate energy in Missouri - rates would drop when GM paid less for their electricity because they would charge less for the end price of vehicle.



Restoring small annual fees on cards used by "non-revolvers" would bolster revenues for card issuers, who then in turn might not make life so expensive for those with revolving balances.

[54anickel]

49. You can't make this stuff up. These guys are priceless. n/t

[AnneD]

52. So true...

the jokes just write themselves.

[54anickel]

41. Closing time - hardly worth gettin outta bed this am for the traders today

Dow 12,490.78 3.76 (0.03%)
Nasdaq 2,441.09 5.60 (0.23%)
S&P 500 1,420.62 1.56 (0.11%)
10-yr Bond 4.8920% 0.0130
30-yr Bond 4.98% 0.00
NYSE Volume 2,666,101,000
Nasdaq Volume 1,915,422,000

4:20 pm : Stocks finished in similar fashion to the way they opened, relatively flat, as investors weighed positive developments like plunging oil prices and M&A activity against mixed earnings news and uncertainty heading into a two-day FOMC meeting. On Wednesday, policy makers are likely to keep rates unchanged again but underlying nervousness suggests the policy directive may exhibit a more hawkish stance than previously thought.

With another 25% of the S&P 500 reporting results this week, earnings were a focal point Tuesday. However, Dow component Verizon (VZ 38.04 +0.21) merely beating estimates by a penny also served as a reminder that there have been very few blowout numbers.

A batch of M&A news was also noteworthy; but the lack of any blockbuster deals left the market redirecting some of its focus to a slew of economic data out later in the week, especially the upcoming Fed policy statement. Laureate Education (LAUR 60.80 +6.39) going private was the biggest deal today. However, its proposed $3.8 bln management-led takeover was overshadowed by Merrill Lynch's (MER 92.44 -2.09) smaller $1.8 bln deal for First Republic (FRC 53.69 +15.39), but a 46% premium that drew criticism from MER shareholders. Ensuing weakness throughout the brokerage group removed some notable leadership from the most influential of all S&P sectors -- Financials.

Posting a similar 0.5% decline was Energy. Albeit holding up rather well early on, even as oil prices were down about 1.5%, the commodity slipping to as low as $53.75/bbl (-3.0%) in afternoon trade eventually took a toll on the sector. Crude for March delivery plunged 2.6% and closed below $54/bbl after a Saudi Official said current oil prices are adequate for consumers and producers. Oil's sell-off removed notable Energy leadership that exacerbated the afternoon downturn.

Among the five sectors attracting buyers, Industrials turned in the best performance as several transportation components reaped the benefits of lower energy prices. Dow component Caterpillar (CAT 61.77 +0.68), which got a boost after competitor Cummins (CMI 127.47 +2.40) issued upside 2007 earnings guidance, provided additional sector support.

Technology was also in focus, but the sector's gain was modest at best as strength came primarily from three components. Intel (INTC 20.89 +0.36) surged 1.8% after revealing a new technology to make smaller and faster chips. Fellow Dow component IBM (IBM 98.60 +1.15) advanced 1.2% following a similar technological breakthrough while Hewlett-Packard (HPQ 42.48 +0.79) was the Dow's best performer (+1.9%) after Prudential raised estimates and their price target on HPQ to $36 from $33. BTK +0.2% DJ30 +3.76 DJTA +1.1% DJUA -0.1% DOT +0.3% NASDAQ +5.60 NQ100 +0.1% R2K +0.6% SOX -0.6% SP400 +0.4% SP500 -1.56 XOI -0.5% NASDAQ Dec/Adv/Vol 1255/1779/1.94 bln NYSE Dec/Adv/Vol 1476/1816/1.50 bln

3:30 pm : Stocks are still struggling to gain traction going into the close as split industry leadership still dictates late-day action. Of the five sectors trading higher, Industrials is pacing the way with a modest 0.3% advance. The sector is getting its biggest boost UPS (UPS 73.48 +0.99), one of 17 Dow Transports taking full advantage of a 2.6% slide in oil prices. Dow Industrial Caterpillar (CAT 61.86 +0.77) is getting a lift after competitor Cummins (CMI 127.20 +2.13) guided 2007 profits above consensus estimates while an analyst upgraded on WW Grainger (GWW 76.28 +3.55) earmarks Trading Companies & Distributors (+4.9%) as today's best performing S&P industry group. DJ30 +7.61 DJTA +1.1% NASDAQ +0.71 SP500 -1.83 NASDAQ Dec/Adv/Vol 1349/1651/1.62 bln NYSE Dec/Adv/Vol 1563/1689/1.22 bln