STOCK MARKET WATCH, Monday 14 June

[ozymandius]

Monday June 14, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 224
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 185 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 239 DAYS
WHERE ARE SADDAM'S WMD? - DAY 452
DAYS SINCE ENRON COLLAPSE = 935
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Jeff Skilling
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

---

U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

---

AT THE CLOSING BELL ON June 10, 2004

Dow... 10,410.10 +41.66 (+0.40%)
Nasdaq... 1,999.87 +9.26 (+0.47%)
S&P 500... 1,136.47 +5.14 (+0.45%)
10-Yr Bond... 4.79% -0.02 (-0.44%)
Gold future... 386.60 +1.40 (+0.36%)


|||


GOLD, EURO, YEN and Dollars

---

PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

[ozymandius]

1. WrapUp by Tim W. Wood - THE DOW REPORT

A Lesson in Dow Theory

On March 10, 2004 a Dow theory sell signal was triggered. I began receiving e-mails at that time from people asking about my interpretation of the signal. For this week’s wrap-up I want to share with you a piece from my April newsletter in which I explained this sell signal in detail. Here it is.

In this issue I want to address some of the confusion that I have seen surrounding Dow’s theory. I recently received e-mails asking about my interpretation of Dow theory and if a Dow theory sell signal has been given as a result of the recent market action. I have been asked, “How can one theory be interpreted so differently in that some “Dow theorists” are bullish while others are bearish? I will attempt to answer this question in the commentary portion of this issue.

-cut-

The great Dow theorist, Robert Rhea, described the three phases of the bear market in a very similar way. More importantly, Rhea goes on and states, “Each of theses phases seems to be divided by a secondary reaction which is often erroneously assumed to be the beginning of a bull market. Such secondary movements seldom prove perplexing to those who understand the Dow theory.”

So, I hope that you are now beginning to see the Big Picture. The decline into March 2003 was only Phase I of the bear market. As you all should know, I have maintained that the rally, which began in March 2003, was indeed a Bear Market rally and specifically a rally that should prove to separate Phase I from Phase II of this great Bear Market. (more...)

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

[54anickel]

2. Sheesh Ozy, what's up (down) with those futures today? Look rather

nasty this morning, don't they?

S&P -5.70
NASDAQ -12.50
DOW -37.00

[ze_dscherman]

6. US interest rates worries, European bourses slipping as well

Bourses slip on US rate worries

European markets were weaker on Monday as worries heightened that the predicted June increase in US interest rates may be by as much as 50 basis points.

The US dollar rose to a three-week high against the euro, after Minneapolis Federal Reserve president Gary Stern became the latest committee member to hint action may be needed to tackle US inflation.

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1086940191420&p=1012571727092

[ozymandius]

7. Thanks ze_dscherman for answering this question.

Dang! They do look dank. It looks like the numbers went off a cliff as soon as the first coffee was poured.

[54anickel]

3. Gold Drops in London on Prospect of Higher U.S. Interest Rates

Here we go again :eyes:

http://quote.bloomberg.com/apps/news?pid=10000086&sid=amQbGZuUW26c

June 14 (Bloomberg) -- Gold fell in London after the dollar rose against most major currencies on speculation a report tomorrow will show U.S. inflation is accelerating, prompting the Federal Reserve to be more aggressive in raising interest rates.

U.S. consumer prices may have risen 0.5 percent in May, according to the median of 65 forecasts in a Bloomberg News survey, up from 0.2 in April. Rising rates would strengthen the dollar, and a stronger dollar reduces gold's appeal as a hedge against declines in U.S. assets and also makes it more expensive to buy with other currencies.

``Going into this week, U.S. economic data will determine the next move to a large extent,'' Alexander Zumpfe, a precious- metals analyst at Dresdner Kleinwort Wasserstein in Frankfurt, said in an e-mailed report. ``Ongoing 'tighter interest rates are imminent' signals might weigh on gold.''

snip>

The dollar advanced against 15 of 16 major currencies tracked by Bloomberg data, including the euro, against which it reached a three-week high of $1.1955.

[UpInArms]

4. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 90.16 Change +0.15 (+0.17%)

http://www.boston.com/business/articles/2004/06/13/greenspan_to_reassure_congress_on_economy/

Greenspan to Reassure Congress on Economy

WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan will display his inflation- fighting credentials on Capitol Hill this week even as he seeks to assure lawmakers the central bank wants a vigorous expansion, analysts say.

Greenspan goes before the Senate Banking Committee on Tuesday as it considers the 78-year-old central banker's nomination for a fifth, and final, term at the Fed's helm.

The panel is expected to vote on the nomination within days of the hearing, paving the way for full Senate approval before Greenspan's current term expires on June 20.

As always, financial markets will examine the Fed chief's comments closely for any hints on the interest- rate outlook. A quickening of inflation has investors on alert for signals on how fast and how far rates will rise.

Fed officials seemed keen last week to ease any worries the central bank was behind the inflation curve.

Greenspan said early in the week that while the Fed should be able to be "measured" in raising borrowing costs, it will do what it must to keep inflation from spinning out of control.

He is likely to deliver a similar message on Tuesday.

The Fed is expected to push up short-term interest rates from their current 1958 low of 1 percent after a meeting on June 29-30. It would be the first rate hike in four years and analysts expect it will be the first of many.

"He'll probably get pressed on inflation and, I think, how aggressively they'll tighten up," said former Fed governor Susan Phillips. She noted that many investors wonder if they should brace for a repeat of 1994 when rates shot up from 3 percent to 6 percent during the year.

<snip>

But the word on almost every Fed official's lips last week was credibility -- essential for keeping inflation expectations from taking hold.

"The market is not going to respond favorably and you're not going to help the situation if the market comes to believe that we are moving too slowly and we're letting the situation get out of control," Poole told Reuters.

Wall Street and Main Street must have faith in the Fed's ability to keep prices stable to prevent a self-reinforcing spiral where expectations for higher costs lead to rising wage demands and business price rises.

...more...

http://www.technewsworld.com/story/34460.html

FCC Chairman Says He'll Try To Temper Rise in Phone Rates

The local phone rivals, led by long-distance giants AT&T and MCI, have lured about 20 million residential customers from the Bells by offering packages of unlimited local and long-distance calling for about $49 a month. The Bells say the monthly wholesale prices, averaging $20 per line, are below cost and squash their incentive to make, maintain and improve local networks.

The chairman of the Federal Communications Commission suggested Thursday that he'll try to avoid sharp price spikes and a loss of choice in local phone service as a court decision throwing out the agency's wholesale price rules takes effect.

"My goal will be to do something that will limit disruption," Michael Powell, a Republican, told reporters after an FCC meeting. He said he wants to write new rules this year that would phase in expected price increases.

Powell made the comments Thursday after the Bush administration's decision the day before not to challenge an Appeals Court ruling that struck down FCC rules requiring the regional Bell companies to lease their networks at deep discounts to companies that want to offer competing local phone service.

The FCC also dropped plans to appeal.

...more...

http://seattlepi.nwsource.com/local/177753_broker14.asp

Complaints against unscrupulous brokers on the rise

In 47 years of working a low-wage job, taking the bus and resisting the urge to buy anything she couldn't eat or wear, Joan Merryweather saved nearly $700,000.

But over the course of a few years, a fast-talking securities dealer helped her lose hundreds of thousands by tossing the 70-year-old retiree from Leschi into unsuitable, high-risk investments, transactions that generated hefty commissions for him.

Joan Merryweather of Seattle trusted her stockbroker and lost -- but later recovered -- a large portion of her $700,000 nest egg.
Last month, Merryweather got most of her money back through an under-used clause in the fine print of nearly all securities contracts. The clause requires investors and brokers to submit to binding arbitration by the self-regulated industry.

Although she says she can breathe easy now, from the time she met the broker in 1997 to 2003, when she realized she could do something about it, Merryweather felt sick that she could be taken so easily.

"It's very humiliating thinking you've been made a fool of," she said. "That's how I felt, 'Oh you stupid.' "

<snip>

The state Department of Financial Institutions and the Office of the Insurance Commissioner consistently receive complaints about aggressive sales tactics when agents or brokers are pushing annuities. DFI has put variable annuities on its list of "investment scams," and tries to warn consumers against high- pressure sales by brokers and insurance agents who stand to make large commissions.

After she signed the paperwork -- on the hood of his car -- Merryweather's broker made $40,000 in commissions.



...more...

http://www.washingtonpost.com/wp-dyn/articles/A33998-2004Jun11.html

What Outsourcing Problem?

The gist of a new layoff study by the Labor Department is that very few U.S. job losses can be blamed on "offshoring" -- a finding that is already being slammed by critics who say the government dramatically undercounted the number of jobs heading overseas to cheaper labor markets.

<snip>

Plenty of experts and groups started taking pot shots at the government report yesterday. The Wall Street Journal offered up this quote: "'It doesn't seem like was picking up much of a signal from the amount of offshoring we believe is going on,' said Jared Bernstein, a senior economist at the Economic Policy Institute, a progressive Washington think tank." The newspaper noted that the "survey doesn't intend to present a comprehensive number of jobs relocated abroad. The survey tallies only larger companies that have had layoffs of 50 workers or more. Smaller companies and those that have fewer layoffs are left out of the mix."

Likewise, The Washington Post pointed out that "the figures were based on a survey of a limited sample of companies, and because of other statistical flaws it is unlikely to quell the concern that erupted last year over widely publicized cases of Americans losing their jobs to people in India and China earning a fraction of typical U.S. wages." AFL-CIO economist Thea M. Lee "called the report 'pretty lame,' arguing that the main problem with it was the way the companies were queried. 'This is a company checking a box on a survey, and having little incentive to be completely forthcoming' about why it laid off a large number of employees, Lee said."
• The Washington Post: Survey Finds Little 'Offshoring' Impact (Registration required)

The New York Times noted the discrepancy in the types of companies that were asked for offshoring statistics: "Officials acknowledged that the numbers clearly undercount the total number of jobs lost offshore. For one thing, the new data covers layoffs only at companies employing at least 50 workers where at least 50 filed for unemployment insurance and the layoffs lasted more than 30 days. Even more important, the report does not account for jobs created by American companies overseas that did not involve a direct layoff in the United States." The Times also cites Goldman Sachs estimates that "point to more outsourced jobs by American corporations: 250,000 to 350,000 a year. But even those are quite small numbers in the context of a labor market that employs more than 130 million people."

...more...

Well, my "news" is all over the board this morning. Sorry about that - too many things going on to be really focused :crazy:

Have a great day Marketeers!

[54anickel]

10. Glad to see the outsourcing report is being questioned in the media - Too

bad the original story is the one that got all of the press. Might as well toss this in with Wallenwein's article on the lies.

Figures don't lie, but liars sure figure.

I like that story on the Seattle woman too. Wow! saved up $700,000 working at low wage jobs. How'd she do that? I mean, that's like 15 grand per year over 47 years.

[Wright Patman]

15. She didn't save nearly that much

What she likely did was invest in blue-chip stocks from the late 1950s on. With dividends reinvested, even putting in a few dollars a month can add up over several decades. The DJIA was only at 776 or so even as late as 1982. Now it's at circa 10,400 and has been as high as 11,700+.

[ozymandius]

5. So, Numbers Don't Lie, Hmmm? by Alex Wallenwein

Think again.

Unfortunately, large hedge funds that are able to move gazillions of ounces of gold on paper - and thereby are able to severely affect gold's paper-price, take these numbers as ‘gospel.'

a. Payroll Numbers

Remember the last two times these magical numbers were revealed for the months of March and April? Remember the effect these revelations had on the markets? Both had the exact same effect, although the first one for March was far stronger since it was such a "surprise": The dollar shot up, bonds, the euro, and US stock markets tanked, and gold got hammered.

What happened this time?

-cut-

b. Inflation Numbers

Inflationary expectations - and actually rising prices - are being downplayed for all its worth, because the truth of the matter remains that the Fed really can't afford to raise rates at all, much less aggressively so. Inflation remains, and is increasingly becoming an even bigger factor in everyone's spending decisions, but the lies continue to pour in. Long term rates are already in a sharp uptrend. If short term rates are perceived as destined to join them, business borrowing will come to a halt, given the fact that it has been so weak all along despite an unprecedented full year of absolute emergency-level rates.

-cut-

c. ... and back to Payroll Numbers:

A very interesting observation was made by a reporter for the New York Times:

"The accelerating job growth, if it continues at or near the pace of the past three months, would save Bush from becoming the first chief executive since Herbert Hoover to preside over a decline in jobs during a four-year term. At the present pace, all of the 2.6 million jobs that were lost in the first 44 months of the Bush presidency would be recovered by August or September, barely in time for the election." DailyNews.com

Guess why the President has picked that 300,000 jobs per month figure - and guess why the figures turn out to reflect exactly that?

Can you expect this trend to continue until the election? Yep - because it's not a "trend" at all. It's a conscious decision to deceive, and as such can be carried on until both of the following happen: (a) somebody notices the lies, and (b) the press reports on it.

(more...)

http://www.financialsense.com/editorials/wallenwein/2004/0610.html

[54anickel]

8. Cash Flow for Baby Boomers

More of the "Nowhere to run to, Nowhere to hide" theme.

http://www.gold-eagle.com/editorials_04/bloom061304.html

snip>

The problem remained, however, that the Baby Boomers were ageing, and money kept flowing into Pension Funds. And so P/E multiples remained high (and this continuing wave of funds will force them to remain high for the foreseeable future), making the listed equity markets an unacceptably high risk proposition for the foreseeable future.

The Fed kept interest rates low to protect the markets from falling further and thereby "white anting" confidence levels in general and, ultimately, forcing a depression. This had a flow-on effect of screwing with investment yields, and it also caused a property boom which is an inflated balloon that no-one is focusing on with any "real" understanding. Conventional wisdom is that property is in finite supply and will therefore "always" grow in value relative to a growing population. What few people are focusing on is that population growth rates in the West are peaking and may even turn negative in some countries. Speculative development has given rise to a glut of some types of property, and this glut may or may not be addressable by population growth - in a reasonable time frame.

All of the above, in turn, presents a massive dilemma for Professional Investors because they have now run out of options to place "large" amounts of savings flowing from a large number of small (pension) savings flows.

snip>

When one contemplates the tapestry of history, one concludes that it is not "governments" that dig us out of our economic/financial problems, it is "individuals". Governments - which are populated by egotistical, self-serving politicians who are typically lacking in character (humility and integrity) - get us into trouble. On an individual level, we have to get ourselves out of trouble.

It became obvious to me that the lessons of history would begin to manifest - yet again - as people who found themselves facing tough times moved to self generate their required incomes, as opposed to continue relying on salary incomes. In any event, middle aged retrenchees or retirees would probably be unemployable and would be forced to either become consultants or go into business for their own account. Thus:

When the going gets tough, the tough get going

more...

[ze_dscherman]

9. Most Treasury bonds in foreign hands

Demand for US government bonds at foreign central banks has for the first time lifted overseas holdings to more than half the paper in circulation.
Figures from the Federal Reserve reveal that $1,653bn, or 50.6 per cent of liquid Treasuries, were held by foreign investors at the end of the first quarter.

Foreign ownership of the bonds rose by $170bn between January and March, with central banks - mainly in Asia - estimated to account for about $96bn of this.

The appetite for Treasuries has been fuelled by attempts to slow the appreciation of national currencies by buying dollars and investing the cash in Treasury bonds. The Bank of Japan, the biggest foreign investor in US Treasuries, spent Y15,200bn ($138bn) on currency interventions in the first quarter.

The surge in foreign central bank holdings has defied a sharp fall in Treasury prices, and a concomitant rise in yields, raising fears the market could fall if buying by the small number of official sector buyers slows.

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1086940179060&p=1012571727102

[54anickel]

59. Heh-heh, Sort of begs the question - Who's holding a gun to their head?

Or are they holding the gun to themselves in a simple game of "Russian Roulette"? :evilgrin:

[54anickel]

60. Tying in to the last few paragraphs of that article -

Japanese Bonds Slide for a Record 13th Day on Faster Growth

http://quote.bloomberg.com/apps/news?pid=10000080&sid=aHA7PQispneA&refer=asia

June 14 (Bloomberg) -- Japanese 10-year bonds fell for a record 13th day on speculation faster economic growth may lead the Bank of Japan to raise interest rates as early as next year.

Euroyen futures indicate the central bank may raise its target for overnight bank lending, which has been held at near zero since 2001, as early as March next year. Merrill Lynch & Co. said in a report financial institutions may decrease holdings of bonds and buy stocks because their funds are too exposed to higher interest rates.

``Investors are starting to bet that the Bank of Japan won't keep rates near zero forever,'' said Jun Fukashiro, who oversees the equivalent of $226 million at Toyota Asset Management Co. in Tokyo. ``Bond yields may have further to rise.''

snip>

Bonds haven't fallen for 13 days since Japan Bond Trading started keeping records in November 1986.

more...

[UpInArms]

11. Trade gap sets another record in April

http://cbs.marketwatch.com/news/story.asp?guid=%7BB5955CC2%2D4148%2D4BED%2D8752%2DF85553B74118%7D&siteid=mktw

WASHINGTON (CBS.MW) - Defying the predictions of economists, the U.S. trade gap surged further into record territory in April.

The U.S. trade deficit widened by 3.8 percent in April to a record $48.3 billion, the Commerce Department said Monday. This is the second straight month of a record trade gap.

The widening of the trade deficit was unexpected.

Wall Street economists had predicted that the trade deficit would not continue to expand. They forecast that the deficit would narrow to $45.1 billion.

The March trade deficit was revised to $46.7 billion from the initial estimate last month of $46.0 billion.

Imports continued to increase while exports fell in April after two impressive monthly gains.

Imports rose 0.2 percent to a record $142.3 billion.

Exports fell 1.5 percent to $93.9 billion. This is the largest decline in exports since August 2003.

...more...

http://quote.bloomberg.com/apps/news?pid=10000006&sid=alrZ4f30fEyg&refer=home

U.S. April Trade Deficit Widens to a Record $48.3 Billion

June 14 (Bloomberg) -- The U.S. trade deficit unexpectedly widened in April to an all-time high of $48.3 billion as the nation imported a record number of cars and consumer goods, the Commerce Department reported in Washington.

The gap in goods and services trade comes after a deficit of $46.6 billion in March. The April deficit exceeded all estimates. A separate report showed May retail sales increased 1.2 percent.

Employment has increased by 947,000 workers since March, the biggest three-month rise since 2000, lifting demand for cars, electronic goods and other products made outside the U.S. The wider trade gap may restrain gross domestic product in the second quarter. Exports were the second-highest on record.

``Even though exports are looking strong, imports are being boosted by strong domestic demand,'' said James O'Sullivan, a senior economist at UBS Securities in Stamford, Connecticut.

The deficit was forecast to narrow to $45 billion from an originally reported $46 billion in March, the median forecast of 67 economists in a Bloomberg News survey. Estimates ranged from a deficit of $42 billion to $46.5 billion.

The trade report was delayed from Friday after President George W. Bush closed government offices to mark former President Ronald Reagan's funeral.

Imports rose 0.2 percent for the month to $142.3 billion. Exports fell 1.5 percent to $93.9 billion.

..more...

[UpInArms]

12. U.S. debt grows at 8.6% pace

http://cbs.marketwatch.com/news/story.asp?guid={8C0C42D7-8AC0-4491-9062-2DB604024944}&siteid=mktw&dist=mktw&archive=true

WASHINGTON (CBS.MW) -- Outstanding debt in the United States grew at an 8.6 percent annual rate in the first quarter, up from a 6.4 percent pace seen in the fourth quarter, the Federal Reserve said Thursday.

Federal debt grew by 11.6 percent, while household debt expanded at a 10.9 percent clip. Debt of nonfinancial corporations increased at a 4.1 percent rate, and debt of state and local governments increased at 9.6 percent rate. Read the complete Flow of Funds report.

In all sectors, it was the fastest growth in debt since the second quarter of 2003 and the second-fastest growth during the recovery that began in November 2001.

Growth rates were all higher compared to the fourth quarter, when federal debt grew 9 percent, household debt grew 7.3 percent, corporate debt grew 3.9 percent and state and local government debt grew 7.6 percent.

In addition, the nation's debt accumulation outpaced nominal gross domestic product growth for the 14th time in the past 15 quarters. Nominal GDP increased at a 7.2 percent annual rate in the quarter.

Critics of fiscal and monetary policy say the nation's economic growth has become too reliant on the availability of cheap credit. But Fed officials have said the level of debt is not troublesome because assets have risen even faster than debt has.

The net worth of the household sector increased to $45.2 trillion as assets increased by $862 billion while liabilities increased by $197 billion. Mortgage debt grew to $6.92 trillion from $6.71 trillion. Household consumer credit increased to $2.06 trillion from $2.03 trillion.

<snip>

The federal government borrowed $466 billion at an annual rate in the first quarter, with foreign buyers increasing their holdings by $679.8 billion.

U.S. households reduced their holdings of Treasurys by $53.6 billion at an annual rate, while the nonfinancial corporate sector reduced its holdings by $10.5 billion. Brokers and dealers reduced their holdings by $202.7 billion.

...a bit more at link...

(That was from Friday when we were having the news blackout due to the salute to Reaganomics)

[UpInArms]

13. Dollar Gains; Fed May Deviate From `Measured' Pace of Increases

http://quote.bloomberg.com/apps/news?pid=10000080&sid=alGpl33kXy5w&refer=asia

June 14 (Bloomberg) -- The dollar rose against the yen to a 10-day high after remarks by Federal Reserve policy makers stoked speculation they will deviate from a ``measured'' pace of interest-rate increases should inflation accelerate.

Fed decisions aren't ``once-and-for-all'' and can be changed if they aren't aggressive enough, said Gary Stern, president of the Fed Bank of Minneapolis, late yesterday. His remarks echoed those last week by Cleveland Fed President Sandra Pianalto, Atlanta Fed President Jack Guynn, St. Louis Fed President William Poole and Chairman Alan Greenspan.

``The prospect the Fed will begin to withdraw monetary accommodation as early as this month and may do so more rapidly than the market had been anticipating'' is bolstering demand for the dollar, said Paul Chertkow, head of global currency research at the Bank of Tokyo-Mitsubishi Ltd. in London. He expects the U.S. currency to gain to 120 yen in six months.

Against the yen, the dollar climbed to 111.22 by 7:53 a.m. in New York from 110.05 late on Friday, according to EBS, an electronic foreign-exchange trading system. It earlier rose to 111.37, its strongest since June 4. Versus the euro, the dollar was at $1.2007 from $1.2010. Earlier, it strengthened to as high as $1.1955, its highest since May 24.

Japan's currency also weakened after a report Sunday in China's Economic Observer newspaper said the country's central bank, the People's Bank of China, is ready to raise interest rates to slow an economy that grew 9.8 percent in the first quarter.

...more...

[UpInArms]

14. dollar did not like that trade deficit number

Last trade 89.84 Change -0.17 (-0.19%)

[54anickel]

16. Stock Market continues to top

http://www.gold-eagle.com/editorials_04/chapmand061204.html

Everything we are looking at tells us that the market is continuing a topping process that began with the NASDAQ topping in late January. Since then the tops have been rotational with the Dow Jones Industrials topping in mid-February, the S&P 500 in March and the TSX Composite in April. All of them made at least short term lows around May 17, 2004. Not surprisingly numerous sectors have also seen rotational tops. In Canada that process started with tops in the gold and mining sectors last December. Since then only one sector, Consumer Discretionary has seen slight new highs.

snip>

Grant you not all technical indicators are negative as ones like breadth and the advance/decline line have been supportive to the recent up move. But sentiment indicators remain uncomfortably high and even in the most recent up move from the May lows the market has often shown weakness in the latter part of the day. This suggests that the smart money is exiting the market. Volume has been lagging as well and without any significant influx of volume, any rise in the market is limited. Insider selling has been evident for months and has recently run 2 to 1 in favour of sales.

Many point to the surging economy as a prime reason for the market to move higher in the coming months. The most recent job numbers have been strong on both sides of the border. But the US numbers are, in particular, strong on the quantity but weak on the quality. Fully two-thirds of the job creation has been in low wage, part time, and service industry jobs. These jobs are also quick to go if things slow down. If employment growth had been normal over the past few years we would have 8 million new jobs instead of the 1 million in the last three months. Wage growth has been essentially flat while the consumer has propped up the market by going deeper in debt whether through consumer credit or through mortgage refinancing.

But recent consumer credit growth is showing some clear signs of slowing suggesting that the consumer may be tapped out. And the mortgage market remains high risk. The Economist, June 3, 2004 pointed out the real risk in the housing market with rapid growth in prices not only in the US but globally propped up by cheap money much of it at variable rates. Borrowing against rising housing prices is another form of leverage and has allowed spending to remain at high levels outpacing income growth.

But there is now a real risk to rising interest rates. Even Alan Greenspan has indicated that he may need to increase interest rates because of inflationary risks. But we believe that this is a red herring as the real risk is not inflation but remains deflation on a massive scale because of the huge overhang of debt. Rising interest rates may be forced on Greenspan as the market is already pricing in interest rate hikes. But Greenspan knows that in an overleveraged economy that rising interest rates is the last thing the market can handle. Already rising long term rates are forcing hedge funds, investment dealers and the banks to divest themselves of the carry trade (carry trade is when one borrows short rates and reinvests the proceeds in higher yielding securities in either domestic or foreign markets).

The debt situation in the market with the consumer, corporations and government is very vulnerable to rising interest rates. At current low levels, levels, which are below the rate of inflation, would be devastating just doubling. Of course what is needed is ongoing low interest rates and pushing the money supply to even higher levels in order to stave off a problem. Over the past few months the money supply growth (M3) in the US has been rising at over 10%/annually and is on pace to increase over $1 trillion in 2004, an unheard of pace.

more....



Here's an article that puts a happier face on the markets -

http://www.gold-eagle.com/gold_digest_04/droke061204.html

Prospering In The Coming Good Years

Trading legend Larry Williams has written an answer to bear market guru Bob Prechter's best-seller, "Conquer the Crash." It's entitled "The Right Stock at the Right Time: Prospering in the Coming Good Years." Published in 2002, Williams anticipated the major stock market low later that year as well as the 2003 rally. As the title suggests, Williams believes (in contrast to Prechter) the coming years will be bullish.

Having recently read "The Coming Good Years" by Williams, I was impressed with his historical research to prove that the remainder of this decade should be positive overall. I share his vision of the stock market and economy for the most part, having weighed both the bearish and the bullish cases between the October 2002-March 2003 double bottom, deciding in favor of the latter. It was refreshing to discover that a market veteran of Williams' standing shared my longer-term view of the market.

"The Coming Good Years" is divided in sections covering Williams' various approaches to the stock market. Williams is most noted for his seasonal trading strategies, and he offers many such seasonal trading strategies for stock market traders and investors in the book...

snip>

He concludes his book with a lengthy discussion on money management and its importance to any investor, and for a final kick in the shins to the perma-bears, he shows a long-term chart of the Dow Jones Industrial Average along with the 12-month Rate of Change M3 Money Stock measurement divided by the DJIA. The chart alone is worth a million words and I believe adequately underscores his point that the years immediately ahead are more than likely to be bullish than bearish. :shrug: So market bubbles ain't a bad if you get in and out at the right times?

more...

[ozymandius]

17. With a good morning to you all...

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

My time here is short. Son and I are running late to start our day. So I bid you all farewell and happy shopping at the Casino.

I'll look forward to hearing the day's news on the radio. Plus, reading about the now-dismal futures in retrospect will provide some evening entertainment.

Best to you all,

Ozy :hi:

[54anickel]

18. Yada on the futures -

9:15AM : S&P futures vs fair value: -4.8. Nasdaq futures vs fair value: -7.0. The futures market has lifted to its best levels of the morning, but continues to point to a lower open for the cash market.
9:00AM : S&P futures vs fair value: -5.2. Nasdaq futures vs fair value: -8.5. The stage remains set for a lower open in the cash market, as fears of a sooner and greater than previously aniticipated rate hike, as well as higher inflation dominate trade. With regard to the latter, the market is looking forward to tomorrow's CPI report, as well as the possible release of the PPI report, which was originally scheduled for last week.

8:32AM : S&P futures vs fair value: -5.5. Nasdaq futures vs fair value: -9.0. Futures indications are little changed on the heels of the Retail Sales ans Trade Balance reports. S&P futures down 0.2 points; Nasdaq futures down 1 point. Accordingly, the cash market remains set for a lower open.

8:25AM : S&P futures vs fair value: -5.2. Nasdaq futures vs fair value: -8.0. The Retails Sales for May will be reported at 8:30 ET. The market looks for an incease of 1.2% on the heels of last month's 0.5% decline. Ex-auto, the consensus for Retail Sales is for an increase of 0.6% after April's 0.1% decline. The Trade Balance for April is expected to check in at -$45.0 bln versus the prior reading of -$46.0 bln.

8:00AM : S&P futures vs fair value: -5.4. Nasdaq futures vs fair value: -8.5. Futures market is lower on the heels of last week's gains and in concert with lackluster trade in overseas markets. Also weighing on the market is Fed President Poole's interview from Thursday indicating that the Fed must raise rates more quickly than the market expects if inflation speeds up, as well as OPEC's suggestion that the price of crude oil should move higher despite supply increases.

[UpInArms]

19. May Retail Sales Jump on Gasoline, Autos

http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=5414635

WASHINGTON (Reuters) - U.S. retail sales revved higher in May, led by higher gasoline prices and a jump in auto sales, the government said on Monday in a report showing consumer spending remains strong.

The Commerce Department said retail sales rose a greater-than-expected 1.2 percent in May to a seasonally adjusted $335.8 billion. Sales excluding autos were up 0.7 percent, while sales excluding autos and gasoline were only up 0.3 percent.

Wall Street economists had expected May overall sales to rise 1.0 percent and sales excluding autos to rise 0.5 percent.

The report showed gasoline sales increased 4.0 percent in May, the biggest month-to-month gain since February 2003. Sales of autos and auto parts increased 2.7 percent.

...very short newsblurb...

[UpInArms]

20. Markets are Open at 9:34 EST

Dow 10,359.21 -46.06 (-0.44%)
Nasdaq 1,983.94 -15.93 (-0.80%)
S&P 500 1,130.48 -5.99 (-0.53%)
10-Yr Bond 4.832% +0.041

[UpInArms]

21. US Treasuries pare losses after trade, sales data

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5414836

NEW YORK, June 14 (Reuters) - U.S. Treasury debt prices recouped a little of their earlier losses on Monday as the latest U.S. data suggested economic growth might not be as strong as optimists had been betting on.

Retail sales rose 1.2 percent in May when analysts had looked for a 1.0 percent gain. Excluding autos, sales increased 0.7 percent compared to forecasts of a 0.5 percent rise. However, stripping out both autos and gas, sales were up only a modest 0.3 percent.

The merchandise trade deficit widened markedly to $48.33 billion in April from a revised $46.57 billion in March. That implied net exports would take a bigger chunk out of second quarter GDP growth than first assumed.

The data slightly eased concerns that the Federal Reserve would have to tighten aggressively, though much still depends on the course of U.S inflation. Two-year Treasury notes (US2YT=RR: Quote, Profile, Research) remained 3/32 lower in price, sending yields to 2.87 percent from 2.80 percent last Thursday before the holiday. The benchmark 10-year note (US10YT=RR: Quote, Profile, Research) slipped 6/32, taking its yield to 4.83 percent from 4.81 percent.

...very short newsblurb...

So here's the scenario:

Fed's gotta say that inflation is no problem - therefore no interest rate increase is called for - but without interest rate increase, the dollar will tank.

Such a quandary...

[Maeve]

22. 9:44 figures

Beginning the day with a quick dip...

Dow 10,363.47 -41.80 (-0.40%)
Nasdaq 1,985.45 -14.42 (-0.72%)
S&P 500 1,130.47 -6.00 (-0.53%)
10-Yr Bond 4.832% +0.041

[UpInArms]

23. come on in the water is fine!

that kind of "dip"?

:D

[Maeve]

25. I think it's kinda chilly this morning

Temperature seems to be dropping...:hi:

Dow 10,353.60 -51.67 (-0.50%)
Nasdaq 1,982.09 -17.78 (-0.89%)
S&P 500 1,128.74 -7.73 (-0.68%)
10-Yr Bond 4.842% +0.051

[UpInArms]

27. you think it might not be something this graceful?

[Maeve]

28. More like...

[54anickel]

30. HA! ROFLMAO - that's a great one!

[54anickel]

24. McHugh on the markets

With the usual plethora of charts -

http://www.gold-eagle.com/editorials_04/mchugh061304.html

snip>

Money Supply, Gold, and the Dollar

I wish I could report on the latest M-3 figures, but the Federal Reserve did not post them to their website this week. Guess they have calculation problems too.

The AMEX Gold Bugs Index ($HUI) looks to be in trouble, with more downside on the way. Last week it fell impulsively, losing 4.5 percent. The next chart (courtesy of www.stockcharts.com) shows a Bearish Rounded Top pattern, with prices at the vertical descending point, due east headed south. The RSI indicator is not oversold. Prices are falling rapidly away from its descending 50 day moving average which is decisively below its 200 day MA. And the MACD is breaking down fast. The recent rally retraced a mere 50% of the crash since April, only a Fibonacci 38.2 percent of the plummet since January 2004. That spells "corrective," meaning more decline is probable. If the decline from January to February was an Elliott Wave one down, and the next decline that just started is a wave 5, and both wave one and wave five will tend to equality, then that gets us a downside target of around 142ish. The downward trend-line from the bottom of waves 1 and 3 would also take us to the low 140s. Ouch. If you look at this pattern as a Head & Shoulders top, then downside is even worse. Wave 4 may not be complete, but rather it is possible subwaves a and b of an a-b-c correction may be complete, with a wave "c" up yet to complete. Regardless, this index likely has much further to go on the downside.

Gold the metal is showing a potential Bearish Double Top and its rising long-term trend channel is at risk as the MACD is turning down, the RSI is not at oversold levels, and short-term price momentum is negative. How can Gold the metal go south in the face of all the M-3 the Fed has pumped into the economy over the past several weeks and months? Answer: Deflation. The markets must see massive deflation about to arrive. That could take the form of bubbles popping, bond prices plummeting, stock averages crashing, and real estate falling. Gold sinking in the face of massive Fed liquidity infusions is consistent with our concerns about the risks of an equity market crash....

snip>

All eyes are on the Fed and the mystery remains - will they raise short-term interest rates when they meet the end of June? Lots of numbers massaging going on to make sure whatever they decide can be backed up. Either the recovery is phony, deflation is right around the corner, and the Fed plans on keeping the M-3 spigot open wide - which means no rate increase June 29th - or they must raise rates, irregardless of the political fallout. Tough spot for the Master Planners.

My best guess, and it is strictly a guess, is that they will hold off raising rates. The massive, preemptive crisis M-3 infusions lead me to this conclusion. Gold's behavior in the face of hyperinflationary money supply growth also suggests deflation is the key risk. The inflation we see will cause the deflation we don't see. Just one man's opinion. To be honest, I hope I'm wrong. Inflation is without a doubt the lesser of the two evils.

Bottom Line

I don't doubt the recent equity rally has been helped a bit by the Master Planners. Can't prove it, but it has been a pretty strong price move on extremely low volume at a time when a vast number of technical indicators measured and monitored by a broad spectrum of respected technical analysts warn of imminent significant downside risk.

more...

[KoKo]

52. Why does McHugh quote Reagan and the Bible? And, he has an ad

for "The Passion" on his site. Second time I've noticed this reading his comments.

The article is interesting with bench technical indicators to watch according to his charts, but I wasn't sure if he was trying to "indoctrinate" me. :D

[54anickel]

61. Yep, noticed that quite a while ago too. I spent the better part of the

week-end looking for articles that gave more of the truth on the Raygun years rather than all the diefying ones. Weren't too hard to find, but you had to look for them. I just wanted something to read that would unwind my head from all the Ronnie spinning!

McHugh has always finished with Bible quotes, and has plugged "The Passion" since it came out. I don't hold it against him any more than some of the other "less progressive" types often quoted on these sites. Everyone has differing views on religion, politics, government, etc. I'm just interested in their views of the economic situation we find ourselves in these days.

[UpInArms]

26. Market Numbers and blather at 9:52 EST

Dow 10,352.75 -52.52 (-0.50%)
Nasdaq 1,981.93 -17.94 (-0.90%)
S&P 500 1,128.74 -7.73 (-0.68%)
10-Yr Bond 4.842% +0.051

9:40AM: In-line with futures expectations, the cash market is off to a lower open... The early negative bias comes on the heels of last week's gains, which represented the third consecutive up week for the blue-chip averages... Pressuring trade are concerns over a more aggressive than previously anticipated tightening cycle from the Fed, particularly if inflation proves to be more severe than forecasted... With respect to inflation, tomorrow's CPI report will be in focus, as well as the possible release of the PPI report, which was originally scheduled for last Friday...

This morning's economic releases included the Retail Sales report at 1.2% (in-line with consensus) and ex-auto at 0.7% (consensus 0.6%)... Separately, the Trade Balance report came in at -$48.3 bln versus the consensus of -$46.0 bln..

[54anickel]

29. Global: Escape Act

http://www.morganstanley.com/GEFdata/digests/20040614-mon.html#anchor0

snip>

Of course, there's always the risk that you hear what you want to hear at conferences like this. Needless to say, I have been on this kick over mounting structural imbalances for longer than I care to remember. The idea that the time is coming when macro tensions are about to be released was music to my ears. In my framework, global rebalancing is the functional equivalent of an escape act — the means by which an unbalanced world vents its structural imbalances. For investors, the escape act goes a step further — where to hide, what to avoid, and what to take advantage of.

Over the course of this conference, we focused the discussion on two key aspects of this escape act — central bank exit strategies and the coming landing of the Chinese economy. While "house views" have never been our thing at Morgan Stanley, our macro team of strategists and economists shares the view that these are likely to be among the biggest issues in 2004. The trick is in getting the timing and degree of these two adjustments right.

For the session on central banks, we were fortunate to have the legendary Hans Tietmeyer, former president of the Deutsche Bundesbank, as a special guest participant. He didn't pull any punches. In assessing the current state of monetary policy and the complications of the exit strategy, he was quick to warn of the perils of excess stimulus. In offering advice on how to remove the unusual accommodation, he stressed two preferences — "sooner rather than later" and "gradual rather than bold." And he was quite direct in expressing the view that central banks now need to take account of developments in asset markets in setting monetary policy. On that latter count, he was very much in agreement with Ottmar Issing of the ECB, who has been the leading champion of this view in the circle of active central bankers.

Hans Tietmeyer went out of his way to venture into perhaps the most delicate and important aspect of monetary policy — political independence. Fiercely independent in his own right, he maintained that central banks should not even be located in the same city as the seat of government. The monetary authorities need to be removed totally from the political debate. In this vein, he was clearly worried about the political pressures currently bearing down on America's Federal Reserve in this election year. He framed his concerns in the context of a simple but powerful counter-factual example: He was reasonably certain that if there were not an election looming in the US, the decisions to tighten would have already been made. Some of the most difficult moments in economic history have been accompanied by the politicization of central banking. As I saw it, Hans Tietmeyer was sounding the alarm in that regard.

snip>

Escaping the potential carnage of an unwinding of the carry trade was the biggest concern I detected at Eden Roc this year. Maybe that explains why cash suddenly loomed so attractive. Interestingly enough, there didn't seem to be much fear over China. The consensus of investors expressed considerable confidence in the Chinese government's ability to manage the downside in a fashion that would limit any collateral damage to the rest of Asia as well as in the broader global economy...

more...

[54anickel]

31. Many retirees find empty insurance promises

http://www.chron.com/cs/CDA/ssistory.mpl/business/2625393

ST. PAUL, Minn. -- Ed Stish is not living the carefree life he envisioned when he retired from a taconite mine in Keewatin, Minn., three years ago. He has no time for lounging in a La-Z-Boy, golfing or fishing for pleasure.

Instead, Stish rises early and sets about growing vegetables, trapping beaver for pelts and harvesting wild rice on a lake near his home in Bovey. His wife, Sue, sells the bounty at farmers' markets four days a week.

They do this to survive. Just a few months after he retired at age 50 from National Steel Corp., his employer of 30 years went bankrupt, taking with it longtime promises to provide a livable pension and cheap health insurance for life.

Even though the U.S. Pension Benefit Guaranty Corp. stepped in to protect workers' pensions, Stish's monthly payment was cut almost in half to $1,350. And the buyer of the mine, U.S. Steel, never made good on the old promise to provide retiree health insurance.

That left Stish in the same predicament as countless retirees caught in an unaffordable health insurance trap they never expected. Company-paid health insurance for retirees is becoming extinct as companies try to slash costs and increase profits.

While federal law requires companies to deliver the pensions they promised workers, no such legal obligation exists for health insurance.

more...

[ewagner]

32. Quick question

I almost never post on this thread because I am a rank amateur when it comes to economic issues, but I do scan the thread to learn as much as I can.

Last week there was some concern expressed here by the change in the "Put to Call" ratio. If I recall the index was at 1.0 or maybe higher. This is distrubing to me for a number of reasons; both economic and political. Is the short selling going on centered around any specific industries or companies? Would there be information on the CBOE that would point me in the right direction?

Thanks for tolerating my ignorance. I enjoy all the work that goes into this thread.

[54anickel]

37. I am afraid I cannot offer you much help or guidance, I too am pretty

much a rank amateur on much of this "market stuff". Perhaps one of the other more savy Marketeers or lurkers could point you in the proper direction to determine which, if any, specific industries are most involved.

I thought the ratios were spread across most of the market sectors in the particular article I posted on it last week, but I have seen the put to call ratio concerns mentioned in several other articles here at DU over the weekend. Some predicting a crisis in the markets, others a terrorist or some sort of military action. The articles that I saw tying it in with an increase in military drills around the globe were pretty scary.

[ewagner]

40. Thanks for your response

I also saw some the posts relating the ratio to military drills. I'm not wearing the tinfoilhat yet, but it is sitting next to me...

:)

[54anickel]

41. You're welcome. Please check back in if you are able to track down

any more specifics on the ratios. I think there are many inquiring minds out there on this issue. As far as the tinfoil goes, I always make sure I have an extra roll or 2 available in the pantry.

[54anickel]

33. PENNY STOCK SPINNING

http://www.nypost.com/business/25593.htm

June 14, 2004 -- A flurry of reports sprouted last week to the effect that the Se curities and Exchange Commission is at last getting serious about cleaning up the penny stock market. But is it really?
Certainly the Commission wanted investors to think so — at least if one is to judge from an SEC official's tough characterization of the move as a "pre-emptive strike" by the regulators to head off a looming onslaught of pump-and-dump frauds in the microcap market. To block it, the Commission said it plans to seek the revocation of the stock registrations of more than 30 penny stock companies that have fallen behind in their financial filings with the SEC.

Unfortunately, a closer look at what the commission is actually doing in this elbows-out gesture shows how out of touch the regulators really are when it comes to the crime-drenched penny stock market.

Not only is the SEC seeking to prevent the fraudulent hyping of a number of stocks that have long since ceased trading entirely, but in at least one case it is seeking to revoke the registration rights of a penny stock company called Holly Holdings Inc. fully four years after its controlling shareholder — a Pennsylvania businessman named Larry Berman — pleaded guilty to federal charges in connection with turning Holly into a pump-and-dump plaything of New York's Bonanno crime family.

Meanwhile, the chronic and underlying problems of the microcap market — from its shoddy merchandise to its corner-cutting and angle-playing brokers, promoters and investment bankers — continue to proliferate.

more...

[54anickel]

34. Seniors are targeted for annuity scams

http://www.freep.com/money/business/tompor14_20040614.htm

Now here's a stinky way to scam seniors. Take an elderly person who doesn't have much cash to invest but has built up thousands of dollars in the family's home.

Then, get the person to borrow against that house to buy a variable annuity -- a costly, complex deal that promises a death benefit, a tax shelter and a steady payout in retirement.

And do not explain that the investor is putting money at risk in the stock market. Or worse yet, could have to dish out thousands of dollars if something came up and the person wanted the money within the next five years or so. Gloss over the surrender charge.

Cracking down
Impossible? No broker or sales rep could be that low?

Not quite. The abuses have grown so dramatically that the NASD, the industry regulatory agency, outlined proposed rules last week for selling variable annuities.

more...

[54anickel]

35. OPEC president says oil prices likely to rise again

http://www.chron.com/cs/CDA/ssistory.mpl/business/2626022

JAKARTA - The head of the OPEC producers' cartel said today that oil prices were likely to rise again due to political events and the group stood firm in its decision to raise output for a second month in a row in August.

"I see oil prices likely to strengthen again at the moment...This is because of political developments," OPEC President Purnomo Yusgiantoro told reporters.

He did not specify which political developments he was referring to, but escalating violence in Middle East producing countries Saudi Arabia and Iraq has added a risk premium to the price of oil estimated by analysts at between $5 and $9 a barrel.

There were renewed attacks at the weekend against foreign workers in Saudi Arabia, the world's biggest oil exporter, aimed at destabilising the Saudi royal family and reinforcing fears of a sabotage strike on the kingdom's oil infrastructure.

Al Qaeda claimed responsibility for Saturday's killing of a U.S. national and the kidnapping of an American engineer the same day in what U.S. Secretary of State Colin Powell said were a direct attack on the Saudi regime.

"It's not unravelling, but it's certainly a dangerous situation," Powell said.

Sabotage has stopped Iraq's crude exports from its northern Kirkuk oilfields since May 31 through the Turkish Mediterranean port of Ceyhan. The line is expected to remain down for several more weeks.

more...

[loudsue]

55. This smells like the CIA/Al Qaeda partnership....

I fully believe the CIA-Al Qaeda connection is what is trying to destroy the Saudi government. What better reason would the USA have for "stepping in" to help the Saudi government....for a price, of course, and that price being an oil deal.

PNACers are determined to control that oil....one way or the other. I wonder if the Saudis are aware of this. SURELY they've already "talked".

:tinfoilhat: Or is it just me?

Once again, Marketeers....:yourock:
:kick::kick:

[54anickel]

62. I had similar thoughts when I read that. Sort of like, OK what does he

know that the rest of us don't. But I wasn't close enough to the tinfoil roll at the time to try and tackle the thoughts.

[54anickel]

36. Calm urged as jitters run through Russia's banking system

http://story.news.yahoo.com/news?tmpl=story&cid=1518&ncid=1518&e=3&u=/afp/20040613/bs_afp/russia_economy_banking_040613045550

MOSCOW (AFP) - Fuelled by a credit crunch and rumors of a list of banks soon to be closed, fears of a new banking crisis gripped Russia's financial markets last week as analysts hurried to assure there was no cause for panic.

A repeat of the 1998 financial crisis is unlikely, analysts say, because the central bank has plenty of reserves to provide any needed liquidity, and with no sign of retail panic, the tension will likely blow over.

snip>

After the shutdown, hundreds of irate Sodbusinessbank customers lined up outside its branches, demanding their money -- the first such scenes since the 1998 financial crisis that saw tens of thousands of Russians lose their life savings.

In an uneasy climate, the latest events have sparked furious rumors of which of Russia's estimated 1,300 banks would be next to face the central bank's wrath.

more...

[54anickel]

38. Out-of-reach housing prices called a growing national problem

http://www.signonsandiego.com/news/business/20040608-9999-1b8nation.html

The rising prices that have pushed homeownership beyond the reach of middle-wage earners in San Diego County are spreading to communities across the country, according to Harvard University's annual State of the Nation's Housing report.

Despite a record national homeownership rate of 68 percent, millions of Americans pay more than a third of their income on housing, leaving less money for such essentials as food, medicine and savings accounts, researchers reported yesterday.

"Affordability is by far the most prevalent challenge" among housing issues, the report found. Many of the jobs created in today's economy "do not provide enough income to enable workers to afford even the most modest housing."

"More than twice as many people in this country face housing problems as lack health insurance," the report said. "In addition, one in 50 households live in housing that is seriously substandard."

The types of housing generally favored by builders no longer fit into a working-class budget, said Allegra Calder, research coordinator for the study conducted by Harvard's Joint Center for Housing Studies.

more...

[UpInArms]

39. Market Numbers and blather at 11:12 EST

Dow 10,337.49 -72.61 (-0.70%)
Nasdaq 1,976.45 -23.42 (-1.17%)
S&P 500 1,126.45 -10.02 (-0.88%)
10-Yr Bond 4.840% +0.049

11:00AM: New session lows for the major averages, as the Nasdaq has slipped below its 50-day simple moving average at 1079.7... For now, the tech composite is managing to stay only slightly below the technically significant level, but its failure to move back above the 1079 area is likely to act as a limiting factor for the broader market... Also, restraining optimism in today's session is the hesitation ahead of tomorrow's CPI report...

Several Fed presidents have stated that the Fed may have to resort to more aggressive than previously anticipated rate hikes should inflation pick up in a meaningful fashion... The consensus estimate for tomorrow's CPI report is for a reading of 0.5%, with core CPI up 0.2%...NYSE Adv/Dec 611/2416, Nasdaq Adv/Dec 822/2001

10:30AM: Pressured by the lagging semiconductor, networking, and disk drive sectors, the Nasdaq is flirting with its 50-day simple moving average at 1979.7... Thus far, the tech composite has been able to maintain its standing above the technically significant level, although it hasn't traded far above it... The Nasdaq's failure at its 50-day simple moving average would be an unfavorable technical development and would likely incite additional selling pressure in the broader market... For now, the major averages are vacillating near their respective session lows...NYSE Adv/Dec 620/2296, Nasdaq Adv/Dec 791/1953

10:00AM: The market extends its losses, with the Nasdaq spearheading the decline... The market's weakness if being supported by the bulk of the sectors, which are trading in negative territory... Among the laggards of note are the disk drive, networking, semiconductor, communications services, gold, REIT, drug, metal mining, tobacco, housing, and broker/dealer sectors...

dollar

Last trade 89.78 Change -0.23 (-0.26%)

Last tick: 2004-06-14 10:42:16 ET
30-min delayed quote.

[54anickel]

42. Think they've got a typo in the blather there....

NASDAQ 50-day SMA should read 1979.7 rather than 1079.7 Perhaps a Freudian slip on where they see it headed in the next week or so?

[54anickel]

43. But, but, but, I thought all this rising interest rates yada was good for

the US buck? What's with this drop? A little concern over that trade deficit? :eyes:

[UpInArms]

44. I think McHugh in your post #24 said it well

All eyes are on the Fed and the mystery remains - will they raise short-term interest rates when they meet the end of June? Lots of numbers massaging going on to make sure whatever they decide can be backed up. Either the recovery is phony, deflation is right around the corner, and the Fed plans on keeping the M-3 spigot open wide - which means no rate increase June 29th - or they must raise rates, irregardless of the political fallout. Tough spot for the Master Planners.

My best guess, and it is strictly a guess, is that they will hold off raising rates. The massive, preemptive crisis M-3 infusions lead me to this conclusion.

There may be a bit of speculation out there that once again the Fed is attempting to "talk" the buck up without doing anything to actually support it.

[54anickel]

47. That seems to be the only play in the books these days - Yappin up the US$

[Doctor Smith]

64. I'm betting on deflation, myself, because of all the debt.

I think the housing bubble will collapse, and that there will be a huge demand for cash as people rush to sell their depreciating real estate assets, and pay back their mortgages before their equity falls below zero.

[54anickel]

45. Pinocchio’s Nose and Government Statistics

I can't remember if this was posted last week or not. If it was I apologize for the redundancy.

http://www.howestreet.com/mainartcl.php?ArticleId=458

What most investors fail to realize is that inflation and deflation are, so to speak, two sides of the same coin. Our government has sanctioned a dishonest monetary system because it is a system that encourages theft by the ruling elite. How so? First governments, by fiat, circumvent the markets and the choice of the people as to what they will use as a medium of exchange for trade with one another. The removal of this most basic freedom provides the underpinning of our emerging fascist state because by eliminating gold and silver as money, we have paved the way for our ruling elite (bankers/politicians/corporate executives) to rob the poor and average hard-working folks by creating money out of cyberspace. In the old days, they simply printed money. Now they create bookkeeping entries on computers. All these powerful thieves need to do is type higher numbers on their computers and, Bingo!—the money supply, which they control and dole out according to their own selfish needs, is multiplied.

This process results in swelling bank accounts and an illusion of wealth. With more and more of this kind of money created out of thin air, we have surging real estate prices, a still grossly overvalued stock and bond market, and a feeling, at least among those who are close to this pig-feeding trough, that all is well. Would it be that creating wealth were so easy. The Fed buys some Treasury debt and puts cash in a New York money center bank, let’s say “Bank A.” Bank A, makes a $10 million loan which in turn is deposited in “Bank B,” and then Bank B makes a $9,500,000 loan. The recipient of the loan places the proceeds of his loan on deposit with “Bank C” (it could be Bank A or Bank B as well) and Bank C now has an excuse to make a $9,025,000 loan to still another corporate client. Bingo! Out of thin air in just these three “small” corporate loans, the money supply has risen by about $28.5 million. The same process takes place with consumer loans and mortgages but on a smaller scale.

On the surface, it looks like times are good. With the proceeds of those loans, companies go out and build new buildings or develop new products and perhaps even hire some new employees. But what is seldom talked about by our ruling elite these days is the process I described above. In other words, from what is money manufactured in a fiat money system such as ours? The answer of course is DEBT. This omission is highly deceiving because any Accounting 101 student knows that wealth is measured much more accurately by net worth rather than assets. In other words, we must subtract debt from assets to find out what we really own. In my speech at the New York Institutional Gold Conference on June 2, I suggested that the two main economic theories that our university students have been indoctrinated with and continue to be indoctrinated with, namely Keynesian and monetarist theories, are both theories that lead to major economic disequilibria over time. To hide those disequilibria, policy makers begin by engaging in little “white lies.” But each white lie begets a bigger and bigger lie until finally attempts to hide the truth become so obvious that the belief system that was built on those lies breaks down.

On a macro economic scale, what we have seen is that to try to keep the markets from deflating back to equilibrium (that would be politically too painful, especially given the size of the disequilibria and the accumulation of lies over the years), fiat money which is manufactured from thin air as discussed above, has to grow faster and faster and faster just to keep the forces of deflation at bay. In other words, to disallow the natural forces of markets to work, more and more money is being created at a faster and faster pace. I equated this behavior on the part of our politicians to the fairy tale story of Pinocchio and used the following two slides to make my point.

more...

[UpInArms]

46. Market Numbers and blather at 12:04 EST

Dow 10,331.18 -78.92 (-0.76%)
Nasdaq 1,972.98 -26.89 (-1.34%)
S&P 500 1,126.11 -10.36 (-0.91%)
10-Yr Bond 4.833% +0.042

11:55AM: With last week's gains behind it, the market has elected to take a breather in today's session, spending most of the morning in a steady decline... The Nasdaq has spearheaded the way lower, sponsored by losses in influential groups such as internet, networking, semiconductor, software, telecom, and disk drive... Among the other sectors posting sizeable declines are the REIT, gold, transportation, banking, broker/dealer, housing, cyclical, and retail sectors, to name a few...

There are virtually no leaders to the upside, although the oil services and coal sectors are among the few group trading in positive territory... The market's lack of enthusiasm has been tied to concerns over a more aggressive than previously anticipated tightening cycle after several Fed Presidents have indicated that the Fed is prepared to do what it takes, especially should inflation pick up... Accordingly, with the CPI scheduled for tomorrow, and the PPI for sometime this week, the market has exhibited a degree of hesitancy in today's session... In its decline, the Nasdaq has slipped below its 50-day simple moving average at 1979.7, inciting additional selling pressure in the broader market...

This morning's economic releases did little to alter the market's somber sentiment and included the Trade Balance report at -$48.3 bln (consensus -$45.0 bln), the Retail Sales report at 1.2% (in-line with consensus), and ex-auto at 0.7% (consensus 0.6%)... Elsewhere, the bond market is on the defensive, with the 10-year note down 8/32, bringing its yield up to 4.83%...

[54anickel]

48. PPI "Sometime" this week. Wonder if Al is trying to feel out the market

before the release of a Goldilocks PPI. :eyes:

[54anickel]

49. Steel prices on Fed's radar

http://www.azcentral.com/arizonarepublic/business/articles/0614steelprices14.html

As steel prices continue to rise, Whirlpool Corp. has tried to fight back. The maker of appliances went to court and won a temporary restraining order preventing a supplier from raising prices above a contracted amount.

Whirlpool had no long-term contract covering the price of stainless steel, which also has climbed, so recently the maker of refrigerators, dishwashers and ranges raised its own prices by 1.5 percent to 2 percent on appliances containing stainless steel.

When the price of steel spiked earlier this year, many manufacturers were stuck absorbing the full impact. Steel prices have continued to run high, and demand is up, so the cost increases are beginning to creep toward the consumer.

Makers of construction materials, kitchen appliances, heating and cooling systems, and other products with high steel content are raising prices for their distributors. Some economists say that could be an early sign of inflation.

snip>

As the Federal Reserve Board considers when to raise interest rates in the coming weeks, the price of steel - and how that flows through to finished goods - is likely to factor into the equation, said James Paulsen, chief investment strategist at Wells Capital Management.

"It's starting to spook the bond market, for sure, and I think it's on the Fed's discussion table," Paulsen said.

Hmmm, the Fed looking to use steel as another "scapegoat" along with oil to denounce the idea that there is any REAL inflation?

[54anickel]

50. An Economic Legend - Krugman (Warning-more Raygun)

http://www.nytimes.com/2004/06/11/opinion/11KRUG.html?amp;ei=5062&en=badc63b85db350d5&partner=GOOGLE&ex=1087531200&pagewanted=print&position=

In the movie "The Man Who Shot Liberty Valance," a reporter defends prettifying history: "This is the West, sir. When the legend becomes fact, print the legend." That principle has informed many of this week's Reagan retrospectives. But let's not be bullied into accepting the right-wing legend about Reaganomics.

Here's a sample version of the legend: according to a recent article in The Washington Times, Ronald Reagan "crushed inflation along with left-wing Keynesian economics and launched the longest economic expansion in U.S. history." Actually, the 1982-90 economic expansion ranks third, after 1991-2001 and 1961-69 — but even that comparison overstates the degree of real economic success.

The secret of the long climb after 1982 was the economic plunge that preceded it. By the end of 1982 the U.S. economy was deeply depressed, with the worst unemployment rate since the Great Depression. So there was plenty of room to grow before the economy returned to anything like full employment.

The depressed economy in 1982 also explains "Morning in America," the economic boom of 1983 and 1984. You see, rapid growth is normal when an economy is bouncing back from a deep slump. (Last year, Argentina's economy grew more than 8 percent.)

And the economic expansion under President Reagan did not validate his economic doctrine. His supply-side advisers didn't promise a one-time growth spurt as the economy emerged from recession; they promised, but failed to deliver, a sustained acceleration in economic growth.

Inflation did come down sharply on Mr. Reagan's watch: it was running at 12 percent when he took office, but was only 4.5 percent when he left. But this victory came at a heavy price. For much of the Reagan era, the economy suffered from very high unemployment. Despite the rapid growth of 1983 and 1984, over the whole of the Reagan administration the unemployment rate averaged a very uncomfortable 7.5 percent.

In other words, it all played out just as "left-wing Keynesian economics" predicted.

more...

[UpInArms]

51. fixing link here

http://www.nytimes.com/2004/06/11/opinion/11KRUG.html?amp?ei=5062&en=badc63b85db350d5&partner=GOOGLE&ex=1087531200&pagewanted=print&position=

:hug: :D

[54anickel]

54. Whoops! Thanks UIA - Youdabest!!!

:hug:

[UpInArms]

53. The IT Worker Malaise

(these folks didn't get "the memo")

http://www.computerworld.com/careertopics/careers/story/0,10801,93244,00.html

The economy seems to be picking up a little; IT budgets are supposed to be edging upward this year. But still there's a dip in the morale of IT workers, according to Computerworld's 2004 survey of 16,968 IT employees at the 100 Best Places to Work in IT.

This year, 75% of those respondents rated employee morale at their companies as excellent, very good or good. That's a drop of four percentage points from last year. There are other warning signs of discontent in the survey:

<snip>

"Morale is low due to layoffs, high workload and pressure to meet deadlines."

"The ongoing threat of layoffs and outsourcing tends to overshadow the work environment."

"The threat of layoffs is always there. We're overworked, unappreciated and the glory goes to the managers, not the workers."

"Many of the IT positions are moving offshore. Much of the workload from layoffs has been picked up by the remaining staff, which is overburdened. The number of hours worked continues to grow."


And it's not just the malcontents. The survey comments show that even the happy campers see an erosion of morale in the past few years.

"Over the past 24 months, my company has dropped from a good/great place to work to an average/ below-average pace to work," says one respondent, who cites the now-familiar litany of factors such outsourcing, layoffs, "much tighter budgets and few new projects."

Here's another IT employee comment that sums up the situation at one of the Best Places to Work in IT: "Great company, great IT shop, great benefits. continued layoffs, continual stress and long hours have brought morale near rock-bottom."

...more...

[54anickel]

56. It's the "more with less" mantra. I'm sure it's prevalent in other areas

besides IT, but it's new to IT. IT really was the place to be! Now, they are just being treated like the majority of workers in other fields. Oh how I long for the old prima donna days again! You worked your butt off, long hours but were appreciated and well compensated. Now it's just "more with less".

[54anickel]

57. Sad that these surveys are from the Best Places to work in IT. Means

it's probably even worse out there when you include the worst and so-so places.

[54anickel]

58. 1:11 numbers and yada

Dow 10,342.69 -67.41 (-0.65%)
Nasdaq 1,972.54 -27.33 (-1.37%)
S&P 500 1,126.40 -10.07 (-0.89%)
10-yr Bond 4.831% +0.040
30-yr Bond 5.497% +0.032

NYSE Volume 623,341,000
Nasdaq Volume 765,429,000

1:00PM: Although still engulfed in negative territory, the major averages have stabilized a bit over the past half an hour... After failing at its 50-day simple moving average (1979.7), the Nasdaq successfully tested its 200-day simple moving average at 1970.8... The Nasdaq's ability to bounce off its 200-day simple moving average has relieved some off the pressure for the broader market... This level is worth watching for the rest of the session, as the tech composite's failure there would incited additional selling in the broader market...
Also, keep in mind that the semiconductor sector, which is down 2.4% as indicated by the SOX index and has a tendency to lead the Nasdaq, continues to struggle and hovers near its June low... Separately, the geopolitical backdrop is weighing on the market as a Bloomberg report has indicated that a suspect powder has been found at the UN Headquarters...NYSE Adv/Dec 587/2659, Nasdaq Adv/Dec 795/2231


Advances & Declines
NYSE Nasdaq
Advances 636 (18%) 829 (26%)
Declines 2614 (77%) 2208 (69%)
Unchanged 124 (3%) 137 (4%)

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

Up Vol* 91 (15%) 161 (21%)
Down Vol* 489 (83%) 569 (77%)
Unch. Vol* 4 (0%) 5 (0%)

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

New Hi's 37 34
New Lo's 36 48

[54anickel]

63. 2:05 update and I've gotta run! Is that the old invisible hand we're

seeing in the Nasdaq today?

Dow 10,334.16 -75.94 (-0.73%)
Nasdaq 1,971.81 -28.06 (-1.40%)
S&P 500 1,125.74 -10.73 (-0.94%)
10-yr Bond 4.852% +0.061
30-yr Bond 5.514% +0.049


2:00PM: The Nasdaq again successfully tested its 200-day simple moving average at 1967.7; setting new session lows at 1968.39, while finding support for the broader market...The major indices are vacillating near their respective session lows, as the Nasdaq continues to spearhead the decline...Losing roughly 1.5%, the Nasdaq is underperforming its blue-chip counterparts on a relative basis, while the S&P and Dow shed a more modest 1.0% and 0.8%, respectively...The 10-year note is just off its worst levels of the day as yields reached as high as 4.85% and are poised for a push higher...NYSE Adv/Dec 598/2681, Nasdaq Adv/Dec 810/2264

1:30PM: After gapping lower on the open, the major indices have been struggling unsuccessfully to find support...The mid-day uptick initiated in the past hour is showing signs of weakness, as the Nasdaq again toys with new session lows as it leads the session's declines...While there is virtually no leadership to the upside, the list of laggards continues to include influential semiconductors, gold & silver, retail, communication equipment and homebuilding...Advance/declines are roughly 1-to-4 on the NYSE and 1-to-3 on the Nasdaq...NYSE Adv/Dec 642/2626, Nasdaq Adv/Dec 838/2222

[54anickel]

65. 2:44 So much for that support from the Nasdaq's 200-day SMA

Dow 10,315.07 -95.03 (-0.91%)
Nasdaq 1,965.64 -34.23 (-1.71%)
S&P 500 1,123.51 -12.96 (-1.14%)
10-yr Bond 4.862% +0.071
30-yr Bond 5.523% +0.058

2:30PM: The market continues to stabilize near the session lows as afternoon range-bound trading persists...A large part of today's weakness is attributed to runoff from last week's Fed jitters, sparked by Greenspan's comments early in the week...Right now, inflation is the new market-driving topic replacing the heightened employment concerns present in the early part of 2004 ...The most obvious driving force behind the concerns over rising prices over the past few months has been the multi-decade high crude oil prices...Currently crude oil prices have eased $0.83 (2.0%) to $37.82/bbl...NYSE Adv/Dec 613/2684, Nasdaq Adv/Dec 863/2239

2:00PM: The Nasdaq again successfully tested its 200-day simple moving average at 1967.7; setting new session lows at 1968.39, while finding support for the broader market...

[54anickel]

66. NASA urged to make way for private industry

http://www.theaustralian.news.com.au/common/story_page/0,5744,9848768%255E29098,00.html

A WHITE House commission will recommend that NASA give private US corporations a broader role in space launches - and a greater share of the financial burden - to ensure President George W. Bush's goal of ultimately flying to Mars, according to documents obtained Monday.

NASA should overhaul its Apollo-era relationship with private industries and limit the space agency's involvement to areas "where there is irrefutable demonstration that only government can perform the proposed activity," according to a summary prepared by the president's commission. The summary was obtained by The Associated Press; the final report is expected later this week.

The commission's conclusions are aimed at easing the burden on taxpayers by increasingly commercialising the US space program.

The administration has been sensitive to questions about the enormous cost of such a plan, noting that NASA spending - which would remain largely unchanged - amounts to less than 1 percent of the overall federal budget. Some experts have said President Bush's goals could ultimately cost $US1 trillion.

The commission determined that NASA should recognise "a far larger presence of private industry in space operations with the specific goal of allowing private industry to assume the primary role of providing services to NASA, and most immediately in accessing low-earth orbit."

more...

[54anickel]

67. 3:12 and it's time for the high dive

Dow 10,307.26 -102.84 (-0.99%)
Nasdaq 1,963.48 -36.39 (-1.82%)
S&P 500 1,122.16 -14.31 (-1.26%)
10-yr Bond 4.868% +0.077
30-yr Bond 5.526% +0.061

NYSE Volume 901,923,000
Nasdaq Volume 1,084,700,000

3:00PM: After an afternoon breather, where the major averages vacillated near their respective session lows, sellers have regained control of the session, driving the indices to fresh session lows... In its decline, the Nasdaq has pulled below the 200-day simple moving average at 1967.7... If the tech composite stabilizes below the technically significant level, particularly on convincing volume, the broader market may experiences added selling pressure...

Speaking of volume, it maintains its anemic levels, speaking to participants' lack of conviction ahead of tomorrow's CPI report, which will shed more light on the inflation picture... For more perspective with regard to the CPI report, please see Briefing.com's Looking Ahead column....NYSE Adv/Dec 562/2752, Nasdaq Adv/Dec 785/2322

[Maeve]

68. Swimming toward the surface as the bell approaches

Dow 10,329.90 -80.20 (-0.77%)
Nasdaq 1,970.55 -29.32 (-1.47%)
S&P 500 1,125.22 -11.25 (-0.99%)
10-Yr Bond 4.870% +0.079

[UpInArms]

69. Closing Numbers and blather

Dow 10,334.73 -75.37 (-0.72%)
Nasdaq 1,969.99 -29.88 (-1.49%)
S&P 500 1,125.29 -11.18 (-0.98%)
10-Yr Bond 4.870% +0.079

Close: After a lower open, the market spent the bulk of the session on a track of new session lows... Coming on the heels of a winning last week - which shaped up to be the third consecutive up week for the blue-chip averages - the market spent the entirety of the session in negative territory, with the bulk of the sectors supporting the decline... To that effect, the notable laggards list was replete with influential groups such as hardware, internet, networking, software, telecom, semiconductor, banking, broker/dealer, REIT, gold, drug, retail and transportation...

The coal and grocery retailing stocks were among the few groups to close the session in positive territory, but there was no significant leadership to the upside... The market's negative sentiment was rooted in continued concerns over a more aggressive tightening cycle on the heels of hawkish commentary by Fed Chairman Greenspan and several Fed Presidents last week... In a continuation of May's and last week's trend, volume levels were anemic, speaking to participants' lack of conviction to the market...

The latter was particularly true ahead of tomorrow's CPI report, as well as the PPI report, which should be reported some time this week... The Nasdaq underperformed its blue-chip counterparts on a relative basis throughout the session... Having failed at its 50-day simple moving average (1979.7), the Nasdaq spearheaded the market's decline... Encouragingly, the tech composite was able to close above its 200-day simple moving average at 1967.7, which was tested earlier in the session...

[54anickel]

70. Not bad, they were able to get the Nasdaq back up above that 200-day

simple moving average without it looking to obvious :evilgrin: