STOCK MARKET WATCH, Friday March 30

[ozymandius]

Source: DU

Friday March 30, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 661 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2286 DAYS
WHERE'S OSAMA BIN-LADEN? 1990 DAYS
DAYS SINCE ENRON COLLAPSE = 1950
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 9
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 March 29, 2007

Dow... 12,348.75 +48.39 (+0.39%)
Nasdaq... 2,417.88 +0.78 (+0.03%)
S&P 500... 1,422.53 +5.30 (+0.37%)
Gold future... 667.60 -5.30 (-0.79%)
30-Year Bond 4.83% -0.00 (-0.04%)
10-Yr Bond... 4.63% +0.01 (+0.26%)






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

---

Read more: DU

[ozymandius]

1. Today's Market WrapUp

Price and Volume Provides Clues
BY MARTIN GOLDBERG, CMT

In an ever more sophisticated and complicated universe of technical analysis indicators and models, it sometimes pays to take a step back and utilize the oldest and most effective method of technically analyzing the market. Simply stated, this is an analysis of price and volume. Such an analysis can keep the analyst firmly planted with their mind focused on the cold reality of what is actually taking place in the market. The cold reality of the present is that there is deteriorating action in the S&P 500 in recent weeks and for this reason, traders should probably look for selling opportunities until and unless the current price and volume relationships change.

Weekly time frames are often effective time frames to use for an intermediate term price and volume analysis. While daily volumes can be affected by stray events such as a Fed meeting or Bernanke speech, it is more difficult to “hide” weekly volume trending. For example, the “follow through” day referenced last week, didn’t hide the fact that in spite of bullish weekly price action, the corresponding volume for the week was completely unremarkable. This was a divergence.

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

[Roland99]

11. Careful lest ye be labeled as overly pessimistic

:)

[ozymandius]

2. Today's Reports

8:30 AM Personal Income Feb
Briefing Forecast 0.3%
Market Expects 0.3%
Prior 1.0%

8:30 AM Personal Spending Feb
Briefing Forecast 0.3%
Market Expects 0.3%
Prior 0.5%

9:45 AM Chicago PMI Mar
Briefing Forecast 49.5
Market Expects 49.5
Prior 47.9

10:00 AM Construction Spending Feb
Briefing Forecast -0.3%
Market Expects -0.6%
Prior -0.8%

10:00 AM Mich Sentiment-Rev. Mar
Briefing Forecast 88.8
Market Expects 88.8
Prior 88.8

http://biz.yahoo.com/c/e.html

[UpInArms]

12. 8:30 reports:

01. U.S. Feb. real disposable incomes up 0.1%
8:30 AM ET, Mar 30, 2007 - 1 minute ago

02. U.S. Feb. savings rate steady at negative 1.2%
8:30 AM ET, Mar 30, 2007 - 1 minute ago

03. U.S. Feb. wages, salaries up 0.4%
8:30 AM ET, Mar 30, 2007 - 1 minute ago

04. U.S. Feb. real consumer spending up 0.2%
8:30 AM ET, Mar 30, 2007 - 1 minute ago

05. U.S. Feb. consumer spending up 0.6% vs. 0.3% expected
8:30 AM ET, Mar 30, 2007 - 1 minute ago

06. U.S. Feb. personal incomes up 0.6% vs. 0.4% expected
8:30 AM ET, Mar 30, 2007 - 1 minute ago

07. U.S. core PCE price index up 2.4% year-over-year
8:30 AM ET, Mar 30, 2007 - 1 minute ago

08. U.S. Feb. core PCE price index up 0.3% as expected
8:30 AM ET, Mar 30, 2007 - 1 minute ago

[UpInArms]

13. Higher inflation, slower spending in February - Negative Savings Rate

http://www.marketwatch.com/news/story/consumer-spending-weakens-february-inflation/story.aspx?guid=%7B99B4972D%2D138B%2D49EA%2D86CB%2DEBD5B97DBB14%7D&dist=bnb

WASHINGTON (MarketWatch) - Core consumer prices increased at the fastest pace in six months during February, even as consumer spending slowed to the weakest in six months, according to government data released Friday. The core personal consumption price index rose 0.3% in February, the biggest gain since August, the Commerce Department reported Friday. Core inflation matched economists' expectations. On a year-over-year basis, core inflation ticked up to 2.4% from 2.2%, moving further away from the Fed's comfort zone of around 2%. Real (inflation-adjusted) consumer spending growth slowed to 0.2%, the weakest gain since August. In February, personal incomes rose 0.6% in nominal terms after a 1% gain in January.

[Roland99]

25. But some stronger factory data puts the markets back on a Bull Run

Wheeeee!!!

[AnneD]

29. Were those manufacturing jobs and orders....

making hamburgers? I figure the higher consumer spending is due to inflation, but that's just me looking at my grocery list/per unit price analysis.

[Roland99]

30. U.S. stocks rise after strong manufacturing data

http://www.marketwatch.com/news/story/us-stocks-rise-after-strong/story.aspx?guid=%7B2C9FCB95%2D1B92%2D4789%2D8815%2D0E45614526E4%7D

Stocks turned firmly higher following news that the Chicago Purchasing Managers Index, a regional manufacturing report, was a much stronger than expected 61.7% in March. Wall Street economists expectaed a reading of 50.0%.

Well, the Dow's down 17 right now.

Must not have had as much power behind as desired by the writers.

[bilgewaterbill]

61. The bull run is artificially supported by real estate investors

who have nowhere else to put their money.

[Roland99]

39. Consumer sentiment at 6-month low in March

http://money.cnn.com/2007/03/30/news/economy/bc.usa.economy.sentiment.reut/index.htm?postversion=2007033010

The Reuters/University of Michigan Surveys of Consumers said the final March reading of its consumer sentiment index slid to 88.4 from 91.3 in February.

The final March reading was the lowest since 85.4 in September 2006. The preliminary March reading released earlier this month was 88.8.

...

The survey's gauge of current economic conditions fell to 103.5 in March from 106.7 in February. Its final measure on consumer expectations also fell to a six-month low of 78.7 from 81.5 at the end of February.

The survey's one-year inflation index held steady at 3.0 percent for a third straight month in March, and its five-year inflation index remained unchanged at 2.9 percent for the second month in a row.

[ozymandius]

3. Oil prices climb amid U.K.-Iran tension

SINGAPORE - Oil prices kept soaring Friday as a standoff between Britain and
Iran was taken to the United Nations and a jittery market worried that oil exports could be affected by the crisis.

After settling at a six-month high a day earlier, light, sweet crude futures rose another 45 cents to $66.48 a barrel in Asian electronic trading on the New York Mercantile Exchange.

Trading settled Thursday at $66.03 a barrel on the New York Mercantile Exchange — the highest settlement price since Sept. 8, 2006, when crude finished at $66.25.

-cut-

Traders are not saying they believe war with Iran is likely, but in an environment of high demand and falling domestic supplies, they maintain that the effects of a large-scale conflict on the energy markets could be huge.

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

[ozymandius]

5. 3 firms announce petrochemical venture

BEIJING - ExxonMobil, Saudi Aramco and China's No. 2 oil company announced two joint ventures worth a total of $5 billion on Friday to expand a Chinese petrochemical refinery and operate a chain of 750 filling stations.

The announcement comes as foreign oil companies step up investment in China's petrochemical industry to supply plastics and other chemicals to export-driven manufacturers.

The ventures will expand the foothold for ExxonMobil Corp. and Saudi Aramco, the Saudi government oil company, in China's state-dominated oil industry. The third partner is government-owned China Petroleum & Chemical Co., better known as Sinopec.

The petrochemical project will triple capacity at a refinery in the southeastern city of Quanzhou to 240,000 barrels per day, the companies announced. They said it would be completed by 2009.

http://news.yahoo.com/s/ap/20070330/ap_on_bi_ge/china_exxon_joint_ventures

[Roland99]

17. Oil spikes above $69 on week-old Iran standoff

http://news.yahoo.com/s/afp/20070330/bs_afp/iranbritainmilitarycommoditiesenergyoilprice_070330124239

In London trade, the price of Brent North Sea crude for May delivery reached 69.14 dollars a barrel -- the highest level since September 4 last year.

It later Friday stood at 68.91 dollars in electronic trading, up 1.03 dollars.

New York's main oil futures contract, light sweet crude for delivery in May, climbed 63 cents to 66.66 dollars in electronic deals before the official opening of the US market.

New York crude had Tuesday soared to 68.09 dollars -- a level last seen in early September -- on rumours of military conflict with Iran.

"It wouldn't surprise me if we saw 70 (dollars a barrel) quite easily or beyond," said Simon Hayley, senior international economist at Capital Economics.

[Roland99]

26. Crude futures retreat after seven-session climb

http://www.marketwatch.com/news/story/crude-gains-tensions-between-iran/story.aspx?guid=%7B3D2C1810%2D01F0%2D42F8%2D83CA%2D176B4F1672B2%7D

Crude-oil futures headed lower Friday morning, poised to mark their first loss in eight sessions with prices retreating from a three-month high as traders continued to assess the tensions between the U.K. and Iran.

"There's $5-$6 worth of purely speculative premium in oil prices today, which needs to be unwound," said Rakesh Shankar, an economist at Moody's Economy.com.

...

Overall, "fundamentals do not support oil above $61, and all signs suggest that the current escalation in Iran will be solved without any direct impact on oil supply," he said. So, "barring any new developments, oil prices should drift down."

Crude for May delivery was last down 33 cents at $65.70 a barrel on the New York Mercantile Exchange. The contract rallied above $66 Thursday to their highest close of the year as traders nervously eyed the situation in the Gulf.

Ya think?!

[UpInArms]

4. dollar watch

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

Last trade 83.13 Change +0.04 (+0.05%)

Its Not Just about Pro Dollar or Anti Dollar These Days

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/Its_Not_Just_about_Pro_1175204645583.html

US Dollar – In the past few years, determining the theme in the currency markets was simple – the prevailing sentiment was either pro dollar or anti dollar. If the dollar sold off, it would do so against every major currency and if it rallied, dollar strength would also be universal. In the past month however, pro dollar or anti dollar sentiment would only be reflected in USD/JPY and USD/CHF. For the other currencies, their performance against the dollar would be based upon which country had the more promising interest rate prospects. Today was no different as the new market dynamics continued to drive market activity. Even though fourth quarter GDP and core PCE were revised higher, the US dollar sold off against the Euro, British Pound, Australian, New Zealand and Canadian dollars. The only currencies that it managed to strengthen against were the Japanese Yen and the Swiss Franc. Although it can be argued that the reaction to the US data suggests that traders may not believe that the improvement in US growth will continue, this is not really the reason why dollar strength was only limited to the Yen. Admittedly, GDP is backward looking and recent reports on consumer spending, consumer confidence, the housing market and durable goods indicate that the economy is still very vulnerable. However the real explanation for the movements is oil. Oil prices have increased once again to settle above $65 a barrel. The more than 15 percent rise in crude prices has forced the US Federal Reserve to keep interest rates at 5.25 percent and warn that inflation risks will prevent them from cutting interest rates anytime soon. However the rise in oil prices also has the same impact on inflationary pressures in the Eurozone and other countries like Canada, Australia, and New Zealand. Unlike the US, their economic growth is not faltering as much as the US. They do not have the same problems in their housing markets and for the most part, aside from the Eurozone, the labor markets for these countries are very tight. This means that while the Federal Reserve’s only choice is to cut rates or not, the options that these central banks have are either to keep their rates unchanged or to raise them. This discrepancy has led to the underperformance of the US dollar against everything except for the Japanese Yen and Swiss Franc. This dynamic will only change if oil prices reverse course. In the meantime, we are expecting personal income, personal spending, Chicago PMI and construction spending tomorrow. The previous disappointments in the Philadelphia Fed and Empire State manufacturing surveys will limit the impact of Chicago PMI while spending and income could be hurt by the recent slowdown in the housing market and the sharp drop in the stock prices last month.

...more...

Trading the News: U.S. Personal Income

http://www.dailyfx.com/story/special_report/special_reports/Trading_the_News__U_S__Personal_1175244123021.html

How To Trade This?

Personal Income and Spending data has produced mix results through the past three releases, as surprises have frequently been overshadowed by data from other economic figures. Upcoming news will also include key Core PCE numbers, leaving the News Trader to gauge the relative importance of each report.

Looking at price levels alone, the EURUSD stands to challenge significant price levels on a surprise in any economic numbers. A very recent run on a rising trendline near 1.3320 may leave immediate risks to the downside, as a break below will likely challenge the key 1.3302. Subsequent profit targets are seen at the following swing lows of 1.3254.

If US economic figures prove largely disappointing, however, we could just as easily see a run up to resistance near 1.3360. A break of a downward sloping trendline and swing-highs could challenge significant highs above 1.3400.

...more...

[Ghost Dog]

43. Dollar Slips On US Targeting Of China With Anti-Subsidy Laws

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=a1da4b44-6b95-4ced-a232-c4e9f59c1ad5
Fri, Mar 30 2007, 15:50 GMT

NEW YORK (Dow Jones)--The dollar dropped midday in New York Friday following news that the Bush administration said it would no longer exempt Chinese companies from U.S. anti-subsidy laws.

After climbing higher throughout the morning on the back of a stronger-than-expected U.S. inflation report, the dollar fully reversed course on the back of the news, hitting a more than one-week low against the euro.

The report "suggests increased potential for higher inflation and lower demand for U.S. assets," T.J. Marta, fixed-income strategist at RBC Capital Markets said. Higher inflation would stem from higher prices consumers would have to pay due to the tariffs, he pointed out. "This is not a positive development for the U.S. economy," Marta said, particularly as higher inflation would put pressure on the Federal Reserve to refrain from accommodating any potential U.S. economic weakness due to the housing downturn.

Clearly currency traders agreed, pushing the euro to an intra-session high of $1.3395 and the dollar to Y117.41 before allowing the greenback to begin reversing course.

/..

[ozymandius]

6. Milk prices expected to rise 9 percent

STATE COLLEGE, Pa. - Dairy economists predict the retail price of milk could rise as much as 30 cents per gallon — a 9 percent jump — by fall. The reasons include rising fuel and feed costs for farmers and increasing demand for milk products around the globe.

The average retail price of whole milk could rise to $3.35 per gallon by October, up from $3.07 in January, said Ken Bailey, an agricultural economist at Penn State University who specializes in the dairy industry.

A U.S. Department of Agriculture forecast also predicts an increase in the price that processors pay to farmers for raw milk. That is typically an indicator that the retail price of milk also will rise.

http://news.yahoo.com/s/ap/20070330/ap_on_bi_ge/farm_scene

[burf]

14. The price paid to

the farmer is now not covering the cost of production. Fuel prices increased about a year ago and feed about six months ago. However the price of milk has not increased. The Repub controlled 109th Congress failed to pass an ag authorization which did not help farmers either.

Just another "Heck of a job Bushie" moment.

[AnneD]

32. This is part of the...

hidden cost of ethanol and high corn prices.
Frankly, I've had family grow corn and cane. I can't for the life of me understand why we don't get ethanol from sugar cane. It is easier than corn to grow from what I remember. I don't understand why we don't use hemp either-but that was shut down by Standard Oil years ago.

[Danascot]

41. AnneD, Can hemp be made into fuel

or are you talking about other uses for it?

[burf]

47. If I may reply

Yes it can. Switchgrass is another alternative. The method for distilling fuel from hemp differs from that in corn. But the advantage is there is much less input cost (in fuel and fertilizer) and less tillage in using hemp. It would also allow nesting cover for wildlife in that chemicals such as Roundup are not used and the hemp would be harvested after the nesting season of birds.

I don't want to get off topic too badly here. Perhaps you may checkout with some folks over at the farm or environmental forums.

[AnneD]

48. Absolutley.....

and the vote to ban it came at the behest of Standard Oil.
I remember having a talk with my daughter about drugs. Now mind you, I am against many drugs, but marijuana is not one of them. I came to this pov after a discussion with my dear grandfather. He was laughing at me one day and saying 'you young folks think you invented everything....'and proceeded to tell me the story of hemp (this was in the late 60's). It was poor folks tobacco back then. Farmers in earlier centuries were required to grow hemp because as anyone that knows rope (remember, my family raises horses and cows),knows that hemp is some of the strongest rope around and was essential to the economy of the time.

I relayed this story to my daughter (she's so smart) as we were having our talk. She went on the computer and dug up all kinds of facts: the seeds can be pressed for oil, used in medicines, used in making clothing. Now....what do we use petroleum for: oil, medicines, making clothing.:dilemma: One doesn't need to go far to connect the dots.

Back when they discovered Spindle Top, the only thing they knew to do with oil was oil, and kerosene. Natural gas which accompanies oil was considered a nuisance. Remember you need to create a market (uses) for your product. It was like the auto companies buying cable cars across the USA and pulling up the tracks and destroying mass transit. Strangle the competition before they gain a foothold.

Maybe the Indian in me is too strong but I don't trust the government period. They are too easily influenced by special interest that can pay to advance their own agenda. And stories from my elders have not improved my opinion.

edited to add just one of the sites that my industrious daughter came up with...

http://www.equalrights4all.org/bach/Fuel.html

http://www.globalresearch.ca/index.php?context=viewArticle&code=20050828&articleId=872

[ozymandius]

7. S&P futures flat before data

NEW YORK (Reuters) - S&P stock futures suggested a flat market opening on Friday, with investors cautious before data on inflation and economic activity, while computer maker Dell Inc.'s (Nasdaq:DELL - news) delaying of its securities filing could hurt tech shares.

Among the data are reports on personal income and consumption, inflation, manufacturing activity and consumer sentiment.

Dell said it would delay its annual 10-K securities filing after an internal financial audit said it found accounting errors and evidence of misconduct, which caused its shares to fall 6 percent after Thursday's market close.

-cut-

S&P 500 futures were down 0.20 point, even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

http://news.yahoo.com/s/nm/20070330/bs_nm/markets_stocks_dc

[UpInArms]

8. Irresponsible Mortgages Have Opened Doors to Many of the Excluded

http://www.nytimes.com/2007/03/29/business/29scene.html?ex=1332820800&en=e09a15f9b118d649&ei=5088&partner=rssnyt&emc=rss

“We are sitting on a time bomb,” the mortgage analyst said — a huge increase in unconventional home loans like balloon mortgages taken out by consumers who cannot qualify for regular mortgages. The high payments, he continued, “are just beginning to come due and a lot of people who were betting interest rates would come down by now risk losing their homes because they can’t pay the debt.”

He would have given great testimony at the current Senate hearings on subprime mortgage lending. The only problem is, he said it in 1981 — when soon after several of the alternative mortgage products like those with adjustable rates and balloons first became popular.

When Senator Christopher J. Dodd, Democrat of Connecticut, gave his opening statement last week at the hearings lambasting the rise of “risky exotic and subprime mortgages,” he was actually tapping into a very old vein of suspicion against innovations in the mortgage market.

Almost every new form of mortgage lending — from adjustable-rate mortgages to home equity lines of credit to no-money-down mortgages — has tended to expand the pool of people who qualify but has also been greeted by a large number of people saying that it harms consumers and will fool people into thinking they can afford homes that they cannot.

...more...

[Roland99]

46. IndyMac's top lawyer Hughes leaving lender

http://www.marketwatch.com/News/Story/indymacs-top-lawyer-terrence-hughes/story.aspx?guid=%7B240D6601%2DB0E8%2D4E97%2D9BBE%2D3E96B2F084BD%7D&dist=RNPullDown

IndyMac Bancorp's top lawyer Terrence Hughes is leaving the mortgage lender in the midst of a downturn in the industry.

Hughes, who joined the company as general counsel in July 2005, made a decision several months ago that he would be leaving, Grove Nichols, an executive vice president at IndyMac, said in an e-mailed statement.

...

IndyMac shares fell 2.3% to $31.99 during morning trading on Friday. The stock has lost more than a quarter of its value this year on concern about rising delinquencies in so-called Alt-A mortgages. IndyMac is one of the largest originators of such loans.

...

Still, on Thursday IndyMac disclosed loss and delinquency data on its loans to show that its business is withstanding the shakeout. One analyst questioned the announcement though, arguing that the company used "somewhat misleading" data and was more interested in "hyping the stock."

[PassingFair]

60. What a BS article!

"He would have given great testimony at the current Senate hearings on subprime mortgage lending. The only problem is, he said it in 1981 — when soon after several of the alternative mortgage products like those with adjustable rates and balloons first became popular. "

Nothing to see here, move along, just business as usual.

Making loans more "perfect", not precarious....! What CRAP!

When did we bail out the Savings & Loan Industry?

[UpInArms]

9. Subpoena Issued to Beazer Homes on Mortgage Loans

http://www.nytimes.com/2007/03/30/business/30lend.html?ex=1332907200&en=ff081fec248b8796&ei=5088&partner=rssnyt&emc=rss

Beazer Homes USA, one of the largest home builders in the country, said yesterday that it had received a grand jury subpoena from a United States attorney’s office, which is seeking documents related to its mortgage origination business.

The company said in a filing with the Securities and Exchange Commission that the subpoena came from the United States attorney’s office in the Western District of North Carolina. Beazer said it was cooperating with the investigation.

A representative at the F.B.I. office in Charlotte, N.C., said this week that the agency was “conducting a potential fraud investigation” into Beazer, a company that builds houses for many first-time buyers.

The company, based in Atlanta, said it had not received a request for information or documents from the F.B.I. or the Internal Revenue Service.

...more...

[texpatriot2004]

10. K & R nm

[Ghost Dog]

15. Asian Stocks Rise on Japanese Economic Reports; Mizuho Gains

http://www.bloomberg.com/apps/news?pid=20601080&sid=a.S4I0qEtiyE&refer=asia

March 30 (Bloomberg) -- Asian stocks rose, led by Mizuho Financial Group Inc., after industrial production and household spending reports in Japan boosted confidence in the growth outlook for the region's biggest economy.

``There's a sense of recovery there and that's providing support to the market,'' said Hideyuki Ookoshi, who oversees $365 million at Chiba-Gin Asset Management Co. in Tokyo. ``If production recovers, the Japanese economy could take off from its current plateau around mid-year.''

The Morgan Stanley Capital International Asia-Pacific Index climbed 0.3 percent to 144.91 as of 3:07 p.m. in Tokyo. The benchmark has gained 3.2 percent this year, set for its third straight quarterly advance.

Japan's Nikkei 225 Stock Average rose 0.1 percent to 17,287.65, while the broader Topix index added 0.2 percent. Markets advanced, except in Hong Kong, China and New Zealand.

/...

[Ghost Dog]

16. Tokyo stocks slightly higher on optimism over Japan's economy

http://asia.news.yahoo.com/070330/kyodo/d8o6b9lo0.html

(Kyodo) Tokyo stocks posted gains Friday on optimism over the course of the Japanese economy, but the gains were limited on the final trading day of the fiscal year.

The 225-issue Nikkei Stock Average rose 23.71 points, or 0.14 percent, to close at 17,287.65. The broader Topix index of all First Section issues on the Tokyo Stock Exchange moved up 2.93 points, or 0.17 percent, to 1,713.61.

The key Nikkei index rose mildly after the government released a series of economic data shortly before the opening with all the data either within or better than market expectations.

"The readings triggered optimistic views over the Japanese economy and encouraged investors to buy issues broadly," said Kazuhiro Takahashi, general manager of the equity marketing department of Daiwa Securities SMBC Co.

Japan's industrial production fell a seasonally adjusted 0.2 percent in February from the previous month, but manufacturers forecast a 1.5 percent increase in industrial output in March and a 1.3 percent rise in April, the Ministry of Economy, Trade and Industry said.

/...

[Ghost Dog]

18. Japan's Household Spending Jumps; Production Falls

http://www.bloomberg.com/apps/news?pid=20601080&sid=a81xBfmgwZao&refer=asia

March 30 (Bloomberg) -- Japan's household spending rose at double the pace forecast by analysts last month and industrial production fell less than expected, suggesting the world's second-largest economy can weather a U.S. slowdown.

Spending jumped 1.3 percent in February, the statistics bureau said today in Tokyo, more than the 0.6 percent median estimate of 29 economists surveyed by Bloomberg News. Output slipped 0.2 percent from January, less than the projected 0.7 percent decline.

The jobless rate held at an eight-year low of 4 percent for a fourth month, a separate report showed, suggesting companies are confident enough to keep hiring. A recovery in consumer spending from last year's lull may cushion the economy from slowing growth in the U.S., Japan's biggest export market.

``We're seeing more evidence that consumer spending is regaining ground,'' said Naoki Iizuka, a senior economist at Mizuho Securities Co. in Tokyo. ``With exports and production set to slow, consumer spending will support growth and prevent the economy from stalling.''

Japan's consumer prices fell for the first time in 10 months, the statistics bureau said separately. Finance Minister Koji Omi said he doubts the report indicates the economy is still experiencing deflation. Bank of Japan Governor Toshihiko Fukui said this week he expects prices to rise in the long term even if they ``hover around zero'' in coming months.

/...

[Ghost Dog]

19. US set to clear way for punitive tariffs on China

http://asia.news.yahoo.com/070330/afp/070330042921eco.html

BEIJING (AFP) - Washington is set to announce a new policy that will allow American companies to appeal for punitive tariffs on state-subsidised goods made in China, the Financial Times reported Friday.

The George W. Bush administration is expected to rule Friday that duties can be applied to products that benefit from state subsidies in non-market economies, the newspaper cited an unnamed official as saying.

The decision is likely to prompt a barrage of tariffs slapped on a wide range of imports from China.

Industries as varied as steel and consumer goods could initiate action for punitive duties to be levied on products supported by government grants, bailouts and low-interest loans, the paper said.

...

Washington's expected move follows accusation made Thursday by a senior US official that Beijing had made "little to no progress" in opening key market sectors, warning that the United States was losing patience with China.

/...

[Ghost Dog]

20. U.S. May Impose Sanctions on China

http://asia.news.yahoo.com/070330/ap/d8o6brdg2.html

(AP) The Bush administration, facing heavy pressure to deal with soaring trade deficits, is considering imposing economic sanctions on China in a dispute over government subsidies.

If the administration decides to take action, it would open up a new area in which American companies being battered by a flood of Chinese imports could seek protection and would reverse 20 years of U.S. trade precedent.

Commerce Secretary Carlos Gutierrez was to announce the government's decision on Friday in a case brought by NewPage Corp., which contends that imports of high-gloss paper from China represent unfair competition to U.S.-made paper.

The government could impose penalty tariffs on Chinese paper imports on a preliminary basis subject to a final determination by Commerce later this year.

The government of China suffered an initial defeat on Thursday when a U.S. court ruled against its effort to stop Gutierrez from going forward with the case.

For two decades, the U.S. government has held that American companies did not have a right to challenge government subsidies granted to their foreign competitors if those companies were in "nonmarket economies" such as China.

However, last year, the administration let it be known that it was ready to consider reversing that policy.

President Bush is facing heavy political pressure from Congress, now in the hands of Democrats, to deal with soaring U.S. trade deficits, including a record $232.5 billion imbalance with China.

/...

[Danascot]

44. Methinks it would be a big mistake

for the US to poke the dragon with a stick.

[Ghost Dog]

53. Stephen Roach agrees with you:

http://www.morganstanley.com/views/gef/index.html#anchor4653

...

Emboldened by that response and empowered by the results of last November’s mid-term elections, Schumer and Graham have now embarked on a far more serious course of action. They have joined forces with Senators Max Baucus (Democrat from Montana and Chairman of the Senate Finance Committee) and Charles Grassley (Republican from Iowa and ranking minority member on Senate Finance) with a united pledge to present a new China currency bill by midyear. Unlike the tariff bill, which the senators now admit was not “WTO compliant,” they have promised to make their new proposal fully compliant with WTO rules and provisions. The Senate Finance Committee hearings of March 27-28 were the first step in what I believe will be a methodical and very deliberate legislative process. In the end, Senator Graham said it all: “We are in the middle of a defining moment right now. This is one issue where Republicans and Democrats are together, and we are going to act.” I’m afraid it doesn’t get any clearer than that.

There were four of us on the panel of so-called expert witnesses that followed Senators Schumer and Graham – myself, Cornell Professor Eswar Prasad, Morris Goldstein of the Petersen Institute, and John Makin of the American Enterprise Institute. I went first and was quick to criticize the Schumer-Graham approach (see my 28 March statement, “The China Fix”). The others, however, were far more sympathetic to the anti-China sentiment expressed by the senators. My comments essentially rang hollow in this two-hour hearing. I attempted to make three basic points: One, America’s extraordinary saving shortfall sets us up for chronic trade deficits with China and a host of our other trading partners. Two, China is focused on a major rebalancing of its own economy that, over time, will provide structural relief to its trade surplus. And three, America’s middle-class angst – which is driving the politics of China bashing – reflects a US economy that failed to prepare its workforce for the pressures of an IT-enabled globalization. There was little or no response to anything I said.

Don’t get me wrong. I am not naïve enough to believe that my arguments would bring the senators to their senses and turn this debate on a dime. After all, this is politics – not analytics. But I took the opportunity to underscore what I believe are several serious inconsistencies in the very structure of the China debate. I reminded the senators that by boring in on the currency angle, they were framing the debate on the relative price between two nations – an approach that needed to consider strengths and weaknesses of both the US and China. Yet, apart from my testimony, no one made the slightest mention of America’s saving problem and the key role it plays in driving current account and trade deficits. I also warned of the hypocrisy of the “asymmetrical phasing” implicit in the Congressional fix – putting pressure on the Chinese to move immediately on the currency front while allowing the United States ample time to address its saving shortfall. I concluded by asking the senators if they really thought that an adjustment in the bilateral exchange rate between the US and China would improve America’s saving position, redress US income disparities, or accelerate the pace of structural change in China? My answer was “no” on all three counts. The senators never even answered the questions.

Over the past two years, 27 separate pieces of anti-China legislation were introduced in the 109th Congress. None of them passed. This year, it’s likely to be different. In just the first three months of the 110th Congress, at least another dozen such actions have been introduced. But the big one has yet to come. Senators Baucus, Grassley, Schumer, and Graham are about to swing into joint action and come up with what I believe will be a very serious piece of WTO-compliant legislation. Despite the political acrimony that pervades Washington these days, these four senators are united on this one issue – as are most of their colleagues in the upper chamber of the US legislature. Chairman Baucus closed the hearing with a very clear statement on where the four-senator collation is headed on the China currency bill over the next couple of months. In his words, “We want to do it right. We want to be effective. We want to be firm. And we want to act.”

Sadly, I am not all that surprised by this turn of events. I have been warning of a rising backlash against globalization for the past couple of years, and now the moment of truth finally seems to be at hand. Ironically, this is all playing out when the US unemployment rate is hovering near its cycle low of 4.5%. Yet with downside risks to the economy building by the day, the jobless rate has nowhere to go but up – a development that will only further inflame the bipartisan politics of trade protectionism.

/...

[wordpix]

55. my thoughts, too---China might say, "I want my loans paid back, with interest."

What would BushCo do then as our economy hits the skids?

[Ghost Dog]

21. Carlyle buys 49 percent of Chinese steel tube maker

http://asia.news.yahoo.com/070330/afp/070330063851business.html

BEIJING (AFP) - US equity firm Carlyle Group said Friday it had bought a 49 percent stake in China's Yangzhou Chengde Steel Tube Co Ltd for 80 million dollars.

The deal, which was completed Thursday, has received all necessary regulatory approvals, Carlyle said in a statement.

The acquisition will support Yangzhou Chengde's further growth in domestic and overseas markets, it said.

Yangzhou Chengde, based in Yangzhou city in east China's Jiangsu province, is a private manufacturer of large-diameter seamless steel pipes, used in the chemical and power industries.

Carlyle has invested in industrial companies throughout the world, including John Maneely Co, North America's largest steel tube manufacturer.

The investment was made via Carlyle's 1.8-billion-dollar Carlyle Asia Partners II fund, the statement said.

The US company has made a slew of investments in Chinese industrial and financial firms over past years, not always without courting controversy.

Last week, Carlyle agreed to pay 1.8 billion yuan (233 million dollars) for a reduced 45 percent stake in Chinese machinery maker Xugong Construction Machinery, a deal still subject to regulatory approval.

/...

[Ghost Dog]

23. Exxon Says 12-Year Wait on China Venture Will Pay Off

http://www.bloomberg.com/apps/news?pid=20601089&sid=a5I3UdzozBZM&refer=china

March 30 (Bloomberg) -- Exxon Mobil Corp. said a 12-year wait to start a $5 billion refining and chemicals venture in China will pay off because the Communist government will free the world's fastest-growing gasoline market and ensure profits.

The project, first mooted in 1995, combines Exxon, the world's biggest publicly traded oil company, Saudi Aramco, the largest oil producer, and China's top refiner. It will tap a fuel market growing at 2.7 times the global pace, Exxon Director Steve Simon said yesterday. The company expects China to use a quarter of the world's petrochemicals by 2015.

``This is one of the few places in the world where you see that a grass-root facility or major expansion is warranted,'' Simon, head of global refining, marketing and petrochemicals at Irving, Texas-based Exxon, said in an interview in Beijing.

China's oil demand has doubled since Exxon started negotiations to build a so-called ``fully integrated'' fuel and chemicals factory. Rivals Royal Dutch Shell Plc and BP Plc started petrochemical ventures and stayed out of straight oil refining. Last year, government caps on fuel prices handed China's state refiners more than $7.5 billion of losses.

Selling both transportation fuels and petrochemicals will help ``ride out some of the tough periods in one area or another,'' Simon said. While China's control on retail fuel prices is ``a concern,'' he said ``it's going to be in China's long-term best interests to transition into a free market'' as the nation increases its dependence on oil product imports.

/...

[Ghost Dog]

22. European bourses fall as profits taken

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7Ba17ad605%2D8f94%2D47a3%2D8fb6%2De3de91ba7d16%7D

European equity markets were lower on Friday, weighed largely by banks and telecom stocks, while concerns over escalating tensions between Britain and Iran pushed up oil prices, overshadowing takeover talk. The banking sector was largely lower as investors took profits after recent gains. Germany’s financial stocks however, were higher on takeover speculation following comments from Citigroup earlier in the week that hinted the US bank was looking possible targets in Germany. Commerzbank gained 3.3 per cent to €33.48, while Deutsche Bank added 1 per cent to €101, and Deutsche Postbank climbed 1.9 per cent to €65.07. By midday, the FTSE Eurofirst 300 was down 0.3 per cent to 1,511.96, Frankfurt’s Xetra Dax was 0.1 per cent lower at 6,902.25, the CAC 40 in Paris fell 0.2 per cent to 5,617.72 and London’s FTSE 100 shed 0.4 per cent to 6,298.1.

[Ghost Dog]

40. Strong economic data helps bourses recover

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7Ba89e2614%2D1ed7%2D4419%2Db6bc%2D3086565ceaef%7D

Robust economic data from the US lifted sentiment on European equities markets on Friday, helping continental bourses back over the flatline after intraday losses. The CAC 40 in Paris rose 0.1 per cent to 5,634.2 and the Xetra Dax 30 in Frankfurt 0.3 per cent stronger at 6,917.0. Across the Atlantic, the US Commerce Department said that both personal consumption and personal income were 0.6 per cent higher, almost double estimates. This eased concerns that weakness in the housing market would put consumer spending under pressure in the world’s largest economy. London’s FTSE 100 underperfomed, however, losing 0.3 per cent to 6,308.0 after Vodafone issued a bearish outlook on growth prospects in its Eastern European region. Resolution, the London-listed insurer also fell back after four-month old bid talks bid talks collapsed.

[AnneD]

24. Morning Marketeers......

:donut: and lurkers. Today is a happy day for me-I get to retire another debt (actually 2 debts). I wanted to do it last year but because of the move to our RV-it got postponed. Sadly it will be replaced by an IRS debt (ouch) but hey, I'm on a roll today. I would rather pay my friend first. I haven't even started the summer work season yet. I couldn't work last season because on the move and injuring my knee. Hopefully that will not be a problem this summer. Brother in Colorado says I can come up and work for him at his concession stand (sadly he pays more than my Nursing job). He really can't take his kids to the Harley Rally at Surges, so I may end up doing that. I'm game for that. I can cross one more thing on my list to do and see and the money will help pay off a few more debts. But best of all, I get to be out in my beloved south west, in the mountains and deserts. Gee, I really miss those wide open vistas. Must be the Indian in me.

Happy hunting and watch out for the bears.

[Theres-a]

27. Sounds wonderful!

Have a great time!

[NC_Nurse]

59. Hey AnneD!

I have been working so much that I haven't been on this thread in AGES!
Glad to hear your paying off your debts! I've started that process too. How do you like RV life?
I've thought about doing that and doing some travel nursing....I could use some real life experience!

Love your stance on hemp too. Us nurses know what'll kill ya, and it ain't MJ or having hemp clothes or ethanol.
Alcohol and cigarettes are so much worse for you - and they're LEGAL! You gotta wonder what the deal is.
;)

[AnneD]

28. UH student investigates ORIX

Tuesday, March 28, 2006, 7 a.m. Cyrus Rafizadeh, 17, wakes up and heads downstairs. The Rafizadeh house is full this morning; his parents, younger twin brother and sister, and older cousin are all there.

Skinny, with short, thick, black hair, Cyrus is still shaking the sleep out of his system when someone says, "They're back again." Instantly, he knows who they are. Looking out the window, Cyrus can see the teal Geo Prizm parked in the little patch of woods right across the street. Tinted windows, with a reflective silver sun-visor spread across the windshield.

Cyrus asks his cousin, Mike Arjmandi, if he feels like using his video camera. Then he heads upstairs to get ready for school at the University of Houston. He throws on a polo shirt and jeans, and the two head outside. It's about 8:30 a.m. They walk casually across the street and Mike aims the camera on the license plate. When they get close, the driver's side window rolls down to reveal a young white guy with short dark brown hair, black V-neck shirt and gold chain. He's got a cell phone pressed to his right ear, and his eyes are fixed on something off in the distance.

<snip>
It had been like this for months, ever since Cyrus sued Wells Fargo and its loan servicer, Dallas-based ORIX, for fraud in a Dallas federal court, a filing Cyrus calls "the mother of all lawsuits for criminal violations of SEC (U.S. Securities and Exchange Commission) regulations." The strange cars had disappeared for a while, but now it looked like round two.

Around noon, Cyrus uploads the video clip to www.predatorix.com, the Web site through which he gives Wells Fargo and ORIX the finger. But the site, launched the day after Cyrus filed suit, goes beyond a simple f-you. Started in February 2006, it contains hundreds of pages from court cases, videos, PowerPoint presentations and newspaper articles detailing what Cyrus believes is a multimillion-dollar fraud the nation's fifth-largest bank and its loan servicer are pulling off on investors throughout the country. The logo is a wolf in sheep's clothing. Wells Fargo and ORIX are not pleased. Last December, the companies filed suit in a Dallas court to shut the site down. They deposed Cyrus, his father and his 14-year-old brother, who appeared not to understand the questions asked of him. But the companies lost round one — a preliminary injunction that would've pulled the plug posthaste.

<snip-much more>

I have some weekend read for you Marketeers. Let me preface this recommendation with the fact that bar none-the Houston Press did the best report of the Savings and Loan scandal. That is where I started tracking the BFEE. They put out good work. This can out yesterday and I want to bring it to your attention. It is a long read, but well worth your time.

Edited to add-silly me , forgot the link.

http://www.houstonpress.com/2007-03-29/news/uh-student-investigates-orix/

[DemReadingDU]

62. and he's only 17!

Wow, this is interesting, I need to thouroughly read this article, thanks!

[Roland99]

31. 11:34am - Heading into lunch on the down side (time for a 3-Martini lunch?)

DJIA 12,331.12 -17.63 -0.14%
Nasdaq 2,418.03 +0.15 +0.01%
S&P 500 1,419.15 -3.38 -0.24%
Dow Util 497.12 -6.25 -1.24%
NYSE 9,266.81 -12.27 -0.13%
AMEX 2,170.93 -1.27 -0.06%
Russell 2000 799.47 +0.53 +0.07%
Semcond 467.58 +2.87 +0.62%
Gold future 669.00 +1.40 +0.21%
30-Year Bond 4.84% +0.01 +0.21%
10-Year Bond 4.65% +0.02 +0.43%

[AnneD]

33. Too early here for 3 martinis...

but it's noon somewhere.... :toast::beer::toast::beer::toast::beer:

[Roland99]

34. Too early? It's Friday, by gosh! Can't be too early!

[Roland99]

35. 11:46am - Stocks freefalling??? "China sanctions hit stocks"

DJIA 12,289.22 -59.53 -0.48%
Nasdaq 2,409.73 -8.15 -0.34%
S&P 500 1,414.13 -8.40 -0.59%
Dow Util 495.36 -8.01 -1.59%
NYSE 9,244.78 -34.30 -0.37%
AMEX 2,168.10 -4.10 -0.19%
Russell 2000 796.63 -2.31 -0.29%
Semcond 466.41 +1.72 +0.37%
Gold future 669.00 +1.40 +0.21%
30-Year Bond 4.83% +0.00 +0.02%
10-Year Bond 4.64% +0.01 +0.13%



HOLY CRAP!!


a few min later:

DJIA 12,253.89 -94.86 -0.77%
Nasdaq 2,403.89 -13.99 -0.58%
S&P 500 1,409.85 -12.68 -0.89%
Dow Util 494.03 -9.34 -1.86%
NYSE 9,233.90 -45.18 -0.49%
AMEX 2,167.56 -4.64 -0.21%
Russell 2000 794.63 -4.31 -0.54%
Semcond 466.26 +1.55 +0.33%
Gold future 670.00 +2.40 +0.36%
30-Year Bond 4.81% -0.02 -0.33%
10-Year Bond 4.60% -0.03 -0.71%




The DOW fell triple digits in intraday trading Friday, as the U.S. Commerce Department's move to sanction China spooked investors. The Dow was last down 71 points at 12,278, but had been down as much as 106.15 points at a low of 12,242.60 in intraday trading. Commerce Secretary Carlos Gutierrez said Chinese producers and exporters of coated free sheet paper received subsidies ranging from 10.9% to 20.3%, putting U.S. producers at a disadvantage. "It is critical that companies compete on a level playing field," Gutierrez said. The blue chip barometer completely reversed earlier gains of as much as 67.93 points, which were made on the back of data showing strong business activity in the Chicago region.

[Roland99]

36. Will be interesting to see the volume during that drop.

At 11:33am we were at:

Total: (NYSE) 453,906,000 (NASDAQ) 772,925,000

3/30/2007 11:33:00 AM

[Roland99]

37. Down only down -70. PPT jumped in FAST

[Hugin]

42. Now at -43.0 (11:30 CT) ...

• DJIA 12305.48 -43.27 -0.35%
• NASDAQ 2410.59 -7.29 -0.30%
• S&P 500 1415.72 -6.81 -0.48%

[Roland99]

45. Seems to be in a bit of a range now.

[AnneD]

38. Penalty possible if trucks don't roll

The U.S. government may have to pay a penalty of more than $2 billion if it doesn't open its roads to Mexican trucks, the chief of a U.S. trucking agency said Thursday.

The estimate is based on a 2000 penalty figure from a board overseeing the 1995 NAFTA trade treaty, John Hill, chief of the Federal Motor Carrier Safety Administration, told a House subcommittee in Washington. He said in an interview that a penalty isn't imminent.

<snip>
"We are in Mexico with our inspectors doing audits of the carriers," Hill said in the interview during a break in his comments to a House Appropriations Committee panel. The Transportation Department plans to grant the first Mexican truckers authority to operate in the U.S. by the end of April.

<snip>
"The supervision of the government of Mexico is no substitution for the supervision of the U.S. government," Hunter said. His bill is co-sponsored by Rep. Marcy Kaptur, D-Ohio. Their planned legislation comes a week after a Senate committee put language in a spending bill that would require the Transportation Department to hold off on allowing Mexican trucks in the country until U.S. trucks have equal access to Mexico.


<snip>


http://www.chron.com/disp/story.mpl/business/4673220.html

I honestly can't tell you the name of an American trucker that wan't to haul to Mexico. Two sets of papers, etc. And just wait til the drug lord get their hands on transportation. Oh did I mention the grief of the Mexican legal system.....

[mojavekid]

49. The Daily Pfennig 3/30/07: (Sort of) Good News for the U.S.

http://www.kitcocasey.com/displayArticle.php?id=1308

Good day... The dollar finally got a little love yesterday as the GDP numbers came in slightly better than expected. The nation's economy grew at a 2.5% annual pace in the final three months of 2006, a little better than the previous estimate of 2.2%. But after analyzing the data, it was discovered that the higher growth figure was mainly due to an increase in inventories, which put a damper on the dollar party. A build-up of inventories just puts more downward pressure on this quarter's growth estimates, which are already expected to drop to near 1%. For all of 2006, the economy grew 3.3%, nearly the same as the 3.2% growth in 2005.

In a separate report, the Labor Department reported initial jobless claims fell by 10,000 last week to 308k, an indication that the labor markets remain tight. Another report yesterday showed quarterly corporate profits declined for the first time in five quarters. It seems I am in the right business during the past quarter as profits for financial corporations (EverBank included) rose $20.5 billion, while nonfinancial corporate profits fell $62.6 billion. Given the weak growth prospects for 2007, I would expect profits to continue to fall. With less profits, corporations will have less to put into capital spending, which will have a further drag on our economy. As readers will recall, former Fed Chairman Alan Greenspan, citing concern about slowing profit margins, said earlier this month there's a "one-third probability" of a recession this year and the current expansion won't have the staying power of its decade-long predecessor.

snip..

There are signs the housing market problems are spilling over into investments and consumer confidence, but the Fed isn't willing to accept that yet. Just yesterday outspoken Fed hawk Jeffery Lacker stated this when asked about subprime mortgage problems: "I don't see it as a big risk to growth for housing." As you all know by now, I disagree with the Richmond Fed president and still look for the subprime meltdown to continue to have an impact on the entire housing bubble. I understand the Fed is looking to maintain credibility by keeping their eye squarely on inflation, and they should. But I also believe our economy has started down a slippery slope, putting the FOMC in a very difficult position.

more at link...

[mojavekid]

50. Jim Willie: Cross Currents for UST Bonds

http://www.kitco.com/ind/Willie/mar302007.html

Volatility for US Treasury Bonds has risen markedly in the last several months. A rise in such bond yields creates a favorable background for gold prices. A fall in such bond yields leads to strong competition for gold as safe haven, in a manner which actually supports the USDollar. Gold takes great advantage of rising bond yields. Cross currents point to both higher yields and lower yields, thus more volatility. Uncertainty abounds.

Numerous factors have contributed to this increase in volatility. From summer 2004 to winter 2006, the US government bond market had been sleepy at best, and comatose at worst. Much changed in 2006, possibly in response to Hurricanes Katrina and Rita, but also a rise in MidEast tensions with the US Military unable to follow the Shock & Awe with much more than civil war and instability in the Persian Gulf region. Now the TNX chart shows the early signs of a W-shaped reversal pattern, which could take long-term interest rates up toward 5.0%, unless the domestic spread trade unravels further. That domestic unravel in my opinion is the predominant factor in recent weeks. The many bond factors act as cross currents for USTBonds. Some factors are bullish, others being bearish. Some are more important now, but just a few months ago, they were critical.

UNWIND OF DOMESTIC BOND SPREADS (bullish for bonds)

As US-based bond spreads unwind, USTBonds are bought back. The typical trade has been to grab the higher yield from a mortgage bond, and sell short the USTreasury. If not the higher yielding mortgage bond, then the object has been the corporate bond. For high risk appetites, the object has been the junk bond for companies with troublesome past histories. As these domestic bond spreads fail, lose money, and are liquidated, as seen in the past few weeks, the USTreasury is bought back just like a short covering of a stock. At that same time, the object bonds lose value and rise in yield, as they should in an environment of poor credit conditions. During the entire duration that the spread trade has been on the books, the trader has been long a high yield bond and short the USTBond. The unwind produces demand for USTBonds, thus a bond rally, a rise in principal value, and a falling bond yield.

more at link...

[mojavekid]

51. Puru Saxena: Engines of Inflation!

http://www.kitco.com/ind/Saxena/mar282007.html

INFLATION – Central banks are the engines of inflation. Whether it is the Federal Reserve in the US or the Bank of England in the UK, the sole purpose of these institutions is to inflate. At the same time, they understate the ongoing inflation problem and manage the public’s fears. Therefore, in order to protect your wealth in this era of constant inflation, it is absolutely essential that you properly define and understand inflation. In other words, you need to distinguish between “cause” and “effect”.

Today, most people have been conditioned to believe that inflation is an increase in prices as captured by the official “Consumer Price Index”. However, the truth is that inflation is an increase in the quantity of money and credit. As the supply of money and credit are inflated (the cause), prices of goods, services and assets rise within an economy (the effect). Allow me to explain:

An over-supply of an item causes its value to diminish due to abundance. For example, a bumper crop of wheat will cause its market value to decline. On the other hand, a shortage of an item causes its value to appreciate due to scarcity. For example, a poor harvest of wheat will cause its market value to rise. Similarly, when you have a constantly increasing quantity of money and credit available within an economy, its value will continue to diminish. In other words, the purchasing power of each unit of money will dilute requiring more and more quantities of money to purchase the same amount of goods, services and assets within an economy. This “confiscation” of purchasing power is the biggest consequence of inflation.

more at link...

[mojavekid]

52. Paul van Eeden: Pay Attention to China

http://www.kitco.com/ind/VanEeden/mar262007.html

As usual, the market is over-thinking and over-analyzing the US Federal Reserve Open Market Committee Statement released Wednesday where the Fed conveyed its decision to keep the overnight interest rate steady at 5.25%. It appeared that the Fed’s hawkish tone towards inflation was easing and even though the Fed expects the economy to continue to expand at a moderate pace over coming quarters, one has to wonder how much of the change in the Fed’s tone is due to the current problems in the real estate sector.

While the dollar exchange rate showed little reaction to the Fed’s statement, the equity markets in the US rallied, as did gold. That both gold and equities had the same response is to be expected: if the Fed is less likely than before to raise interest rates it may be more inclined to lower interest rates in the event economic activity takes a bigger hit from the real estate sector. Lower interest rates are good for stocks, lowering the borrowing costs of corporations and making bonds (which compete with stocks for capital) less attractive. Lower interest rates are also positive for the gold price since lower interest rates would most likely cause the dollar exchange rate to weaken, thereby increasing the gold price in US dollars.

But by Friday the market had changed its mind. According to interviews by Wall Street Journal journalists the market now thinks that Wednesday’s Statement was not a move towards a dovish stance, but merely a move towards neutrality. In response to the change in sentiment the dollar rallied and the gold price fell.

more at link...

[Roland99]

54. 3:44pm - Heading to the close as a carpenter's dream: flat as a board

DJIA 12,348.66 -0.09 -0.00%
Nasdaq 2,418.62 +0.74 +0.03%
S&P 500 1,420.67 -1.86 -0.13%
Dow Util 499.95 -3.42 -0.68%
NYSE 9,259.17 -19.91 -0.21%
AMEX 2,170.63 -1.57 -0.07%
Russell 2000 798.14 -0.80 -0.10%
Semcond 466.10 +1.38 +0.30%
Gold future 669.00 +1.40 +0.21%
30-Year Bond 4.85% +0.02 +0.39%
10-Year Bond 4.65% +0.02 +0.35%



;)

[UpInArms]

56. closing numbers and blather

Dow 12,354.35 5.60 (0.05%)
Nasdaq 2,421.64 3.76 (0.16%)
S&P 500 1,420.86 1.67 (0.12%)
10-Yr Bond 4.648% 0.016

NYSE Volume 2,821,042,000
Nasdaq Volume 2,090,959,000

4:20 pm : The market had its share of trading triggers on Friday, the bulk of which were bearish in Briefing.com's estimation.

Granted there was encouraging news from an economic growth standpoint, as personal income and spending were both reported to be up 0.6% in February, versus expectations for a 0.3% increase for each, while the Chicago Purchasing Manager's Index printed with a 61.7 reading versus the 49.5 consensus estimate. A number above 50 reflects growth.

Those items, in fact, proved to be early buying catalysts. However, they weren't enough to sustain a strong bullish bias as there were some overriding factors that effectively canceled them out.

The biggest factor in that respect was the core-PCE component of the Personal Income and Spending report, which is the Fed's favorite inflation gauge. It was up 0.3% (consensus +0.2%) which pushed the annual rate up to 2.4% from 2.2% in January. The Fed's target range for core-PCE is 1.0% to 2.0%.

To be sure, the combination of stronger than expected growth and higher than expected inflation not only squashed the idea that a Fed rate cut will happen soon, it also raised the potential that the Fed might raise rates again.

Despite that negative implication and an admission from Dell (DELL 23.21, -0.18) that it found accounting errors and evidence of misconduct, stocks managed to hold their ground fairly well before a late-morning report that the Commerce Department approved duties on Chinese paper imports knocked them back in noticeable fashion.

At their lows for the session, which were established just before noon eastern time, the Dow, Nasdaq and S&P were down approximately 105, 15 and 14 points, respectively.

The impetus for the broad-based sell-off was the supposition that the Commerce Department's action reflected a protectionist agenda. Whether one agrees with that view or not, protectionism never plays out well on Wall Street given its detrimental effect on overall earnings prospects.

Compounding the market's concerns mid-day were worries about the tension in the Persian Gulf between Iran and Western powers. Those concerns pushed oil prices as high as $66.78 on an intra-day basis before they rolled over on a burgeoning hope that there will be a peaceful resolution over the weekend with respect to Iran's capture of 15 British sailors.

The pullback in oil prices helped drive an afternoon recovery effort that saw each of the major indices make their way back into positive territory before ending the day mixed and little changed.

On a related note, the latter characterization sums up the first quarter for the major indices. While the Dow declined 0.87%, the Nasdaq and S&P 500 managed to eke out gains of 0.26% and 0.18%, respectively, for the first three months of the year.DJ30 +5.60 NASDAQ +3.76 SP500 -1.67 NASDAQ Dec/Adv/Vol 1477/1558/1.88 bln NYSE Dec/Adv/Vol 1540/1720/1.27 bln

3:25 pm : The first quarter is on the verge of being completed for the market and it will be a close finish to see if the S&P can remain on positive ground. While it is showing a negligible loss today, it is up just 0.24% for the year.

The Dow has more work to do. It needs a closing rally of some note to record a gain for the quarter as it is down 0.80%. The Nasdaq, meanwhile is running neck-and-neck with the S&P and is clinging to a 0.25% gain.DJ30 +11.21 NASDAQ +3.36 SP500 -0.63 NASDAQ Dec/Adv/Vol 1470/1531/1.59 bln NYSE Dec/Adv/Vol 1478/1742/1.07 bln

3:00 pm : The major indices all succeeded in making their way back into positive territory in the past half hour with the technoloogy sector playing a leading role.

Most sectors, though, participated in the recovery effort. That point notwithstanding, there hasn't been a rush to buy stocks as the rebound effort has proceded at a deliberate pace without any real strong semblance of leadership from a sector standpoint.

Accordingly, the S&P hasn't been able to kep its head above water.DJ30 +5.44 NASDAQ +3.09 SP500 -1.28 NASDAQ Dec/Adv/Vol 1427/1543/1.49 bln NYSE Dec/Adv/Vol 1469/1746/987 mln

2:30 pm : It is a mixed market at the moment with little change in the indices; however, that standing belies what was an otherwise volatile session during the morning trade.

It is fitting, in turn, that the S&P 500 is relatively flat for the session (-0.15%) as that mirrors its quarterly performance.

While recent trading action hasn't rated high on the excitement scale, we wouldn't rule out some late-day volatility on position squaring ahead of the quarter's end.DJ30 -3.53 NASDAQ +1.40 SP500 -2.15 NASDAQ Dec/Adv/Vol 1512/1442/1.38 bln NYSE Dec/Adv/Vol 1566/1629/918 mln

2:00 pm : Indices are fighting to claw their way back to the unchanged mark, but buyers have been deliberate with their efforts.

The S&P is basically flat for the quarter, but the following are the top five industry groups year-to-date: tires & rubber (+48.59%); construction materials (+29.14%); oil & gas refining (+24.22%); steel (+23.53%); and diversified metals & mining (+16.64%).

The five worst-performing S&P industry groups have been: homebuilding (-20.04%); motorcycle manufacturing (-16.81%); distillers & vintners (-15.45%); photo products (-12.45%); and thrifts & mortgage (-11.04%).DJ30 -19.79 NASDAQ -1.35 SP500 -4.02 NASDAQ Dec/Adv/Vol 1558/1360/1.28 bln NYSE Dec/Adv/Vol 1614/1537/845 mln

Have a great weekend!

:hi:

[AnneD]

57. Good to see you pop in...

have a great one.

[UpInArms]

58. Hiya AnneD!

it's been a really busy week and next week promises to be more of the same.

:shrug:

:D

:hi: