STOCK MARKET WATCH, Monday 16 August

[ozymandius]

Monday August 16, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 157
DAYS UNTIL W* GETS HIS PINK SLIP 78
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 248 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 302 DAYS
WHERE ARE SADDAM'S WMD? - DAY 515
DAYS SINCE ENRON COLLAPSE = 998
Number of Enron Execs in handcuffs = 19
Recent Acquisitions: Ken Lay
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL ON August 13, 2004

Dow... 9,825.35 +10.76 (+0.11%)
Nasdaq... 1,757.22 +4.73 (+0.27%)
S&P 500... 1,064.80 +1.57 (+0.15%)
10-Yr Bond... 4.21% -0.04 (-0.87%)
Gold future... 401.20 +4.90 (+1.22%)


|||


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

---

[Frodo]

1. Empire State Index - Oooof!

That'll let the wind out of your sails.

Expected to fall modestly from 36.5 to 32.3 after an unexpected climb the previous month.

Fell to 12.6

[UpInArms]

17. you were way faster than I was on that report :)

:thumbsup:

[Frodo]

18. I just figured you had me on "ignore"

:hi:

[UpInArms]

20. nope - just hadn't reloaded the page

while I was trying to get the dollar index to load.

:hi:

[UpInArms]

2. U.S. Empire State index plunges to 12.6 in August

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?guid={FC130EBA-A727-4F7D-A63F-903743E41449}&siteid=mktw

WASHINGTON (CBS.MW) -- Manufacturing activity in the New York area slowed dramatically in August, the New York Federal Reserve Bank said Monday. The bank's Empire State Manufacturing index plunged to 12.6 in August from 35.6 in July. This index is at its lowest level since May 2003. But the index is still above zero, which indicate expansion. Aside from a slight dip in March, the Empire State index has been above 30 since last October. Economists were expecting the index to slip only to about 31.8 in August. The new orders index fell to 14.9 from 28.6 in July, while shipments fell to 11.9 from 34.0.

OUCH!

Aug 16 8:30 AM
NY Empire State Index Aug
reported 12.6
briefing.com anticipated 33.0
market anticipated 32.3
last report 36.5
revised from 36.5

Now that is going to leave a welt.

dollar index not working - will give the numbers as soon as it is up.

[UpInArms]

15. fleshing out that report a bit

NY factory activity ebbed in August
Empire State index dropped to 12.6 from 35.6 in July

http://cbs.marketwatch.com/news/story.asp?guid=%7B4D615329%2DA4B0%2D4974%2DA0B2%2D85742BC28D68%7D&siteid=mktw

excerpt:

The new-orders index fell to 14.9 from 28.6 in July, while shipments fell to 11.9 from 34.

The unfilled orders index fell to -4.6 from 14.3 in the previous month. This is the first negative reading since last September.

Despite the decline in the overall index, the number of employees rose to 17 in August from 13.1 in July.

But the average employee workweek fell to 6.8 in August from 22.5 in the previous month.

The price indexes remained elevated.

The prices-paid index fell to 50 in August from 56.4 in July.

The prices-received index fell to 16.3 in August from 18 in the previous month.

The full report can be found here:

http://www.newyorkfed.org/research/regional_economy/mfg_survey/8_2004.pdf

[dixielib]

3. why aren't your graphics refreshing?? NT

[Frodo]

4. Inadequate refrigeration?

No ice?

[ozymandius]

8. I am looking into this.

It seems like last week they started freezing in mid-afternoon. I may have to find new graphics that auto update.

[UpInArms]

5. Cadillac to Make Luxury Sedans in China

http://www.forbes.com/business/commerce/feeds/ap/2004/08/16/ap1505540.html

General Motors said Monday it will start making Cadillacs in China this year, joining a race by foreign luxury car brands to sell to the country's newly rich elite.

The first Cadillac CTS sedans are to roll into showrooms by spring, GM said Monday. It said Cadillac will sell imported models while it prepares to assemble cars at the company's Shanghai factory using imported components.

The announcement marks a milestone in China's evolution into a luxury car market. European brands such as BMW and Mercedes Benz already operate assembly lines in the country, while Ferrari, Bently and others have set up nationwide sales networks.

...more...

[UpInArms]

6. U.S. net foreign capital flows rise 1st time since Jan

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38215.3752546296-817772835&siteID=mktw&scid=0&doctype=806&

WASHINGTON (CBS.MW) -- Foreign long-term net capital flows into the United States increased to $71.8 billion in June from $65.2 billion in May, the Treasury Department said Monday. It's the first increase in net flows since January. Gross asset purchases by foreigners of U.S. stocks and bonds increased to $85.5 billion from $62.4 billion, while U.S. residents sold a net $13.7 billion of foreign assets compared with a net gain of $2.8 billion in May. Foreign central banks bought $18.3 billion of U.S. assets in June compared with $14.5 billion in May. Japanese residents added $1.2 billion, while Chinese residences bought $700 million on net. British residents added $1.2 billion, while Caribbean banking centers added $17 billion.

[ozymandius]

7. I want to say "thank you" for your support.

Friday, I wrote a fist-pounding screed railing against the troubled economic times in which we live. Specific to the situation is my inability to find a job that utilizes my education, expertise and peripheral experience. Relative to my own situation are those haunting friends and acquaintences who find themselves in a similar pickle. We have also read parallel human interest stories in the news so much in the past few years.

Bush's economic lies evoke the most viceral rage and disgust. Trickle-down economic theory did not work in 1924. It did not work in 1980. It certainly does not work today. Anyone on the front lines of the Bush economic miracle knows what a mess we are in. Like the aftermath of the dot-com bust, too many people profiting from tragedy are those who are either left standing or stand to profit from cleaning up messes. Ah! What a mess, indeed.

Though I author this thread each morning, I do not feel that this permits me to be autobiographical whenever I feel like it. So I say "thank you" for for making room for me to express these sentiments. The outpouring of moral support on this thread warmed my heart. Thank you all for your uncommon kindness.

Ozy

[llmart]

64. I read this thread on an almost daily basis.....

but seldom write anything because sometimes it's way over my head, even though I have a business degree and consider myself pretty knowledgeable. I deal with the public on a daily basis and get into conversations with them quite often and I want you to know that I have heard many, many stories of unemployment by people who are very qualified and can't find a decent job. They are disheartening and I don't think that most people are fooled by the lies that this administration puts out there and the media spouts. Bottom line is, people talk to other people and they know what's really going on. Ozy, don't ever think that it's your fault or that you have a problem because you can't find a job. There are plenty in your boat. Keep your chin up. You sound like a good person.

[UpInArms]

9. pre-opening blather

briefing.com

9:09AM: S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +6.5. Little change in the pre-market tone, and as such, the cash market should open on a positive note... Some selling can be found, though, in the treasury market - where the yield on the 10-year note is still close to multi-month lows at 4.23%.

8:56AM: S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +6.0. Expectations remain intact for a higher start to the day as the futures trade retains nearly all of its gains... A lack of disturbing geopolitical events at the Olympics this weekend, along with a decline in the price of crude oil, has helped draw more buyers in.

8:32AM: S&P futures vs fair value: +1.8. Nasdaq futures vs fair value: +6.0. Futures indications slip off the much weaker than expected August Empire State Index... Recognition, however, that the report is relatively young and prone to wide swings, has kept the futures from falling very far... As such, the cash market is still set for a higher open.

8:00AM: S&P futures vs fair value: +1.6. Nasdaq futures vs fair value: +7.0. Futures trade points to a higher open for the cash market as crude oil drops from recent highs after Venezuelan President Chavez wins a referendum that might have removed him from office... Last week's lackluster trade has also provided some incentive for buyers.

[UpInArms]

32. thowing in the ino.com pre-opening blather

The September NASDAQ 100 was slightly higher overnight due to short covering and is working on an inside day as it consolidates some of last week's decline. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near-term. If the decline continues, a test of weekly support crossing at 1267.54 is possible later this year. Closes above the 10-day moving average crossing at 1333.90 are needed to temper the near-term bearish outlook in the market. The September NASDAQ 100 was up 1.50 pt. at 1313 as of 6:46 AM ET. Overnight action sets the stage for a steady to firmer opening by the NASDAQ composite index later this morning.

The September S&P 500 index was slightly lower overnight as it consolidates below broken support marked by May's low crossing at 1097.50. The door remains open for a possible test of weekly support crossing at 1049.20 later this summer. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near- term. Closes above the 10-day moving average crossing at 1074.83 are needed to temper the near-term bearish outlook in the market. The September S&P 500 Index was down 0.50 pts. at 1065.70 as of 6:47 AM ET. Overnight action sets the stage for a steady to weaker opening when the day session begins later this morning.

[UpInArms]

10. Sysco Feels Bite of Inflation

(didn't they say that food prices dropped last week?)

http://www.thestreet.com/_tsclsii/stocks/food/10178390.html

Sysco Corp. (SYY:NYSE - news - research) Monday said its profit rose more than 15% in the fourth quarter, as the food distributor coped with higher costs and slowing sales.

The Houston-based company had net income of $280.6 million, or 43 cents a share in the quarter ended July 3, vs. $242.7 million, or 37 cents a share, in the year-ago period. Sales increased 16.7% to $8.14 billion, including sales from acquisitions. The 2004 quarter contained one more week than the year-ago one. The consensus estimate was for 45 cents a share, according to Thomson First Call.

The company said it was "able to generate solid sales and earnings numbers during the fourth quarter while competing in a market that can best be described as challenging." Sysco cited inflationary pressures, saying higher costs for dairy and meat products contributed to a sales slowdown during the quarter.

...more...

[ozymandius]

11. NEW CHART TEST

Let's see if this is any better.

[ozymandius]

12. New CNN charts

[UpInArms]

13. 9:36 EST and markets are open

Dow 9,843.21 +17.86 (+0.18%)
Nasdaq 1,765.62 +8.40 (+0.48%)
S&P 500 1,066.98 +2.18 (+0.20%)
10-Yr Bond 4.243% +0.030

markets love that NY index report! /sarcasm

[Zynx]

14. Here's the official link to the Empire State Report

http://www.newyorkfed.org/research/regional_economy/mfg_survey/8_2004.pdf

[UpInArms]

16. 9:46 EST numbers and blather (happy happy joy joy)

Dow 9,863.34 +37.99 (+0.39%)
Nasdaq 1,772.30 +15.08 (+0.86%)
S&P 500 1,069.93 +5.13 (+0.48%)
10-Yr Bond 4.258% +0.045

9:40AM: Stock market gets off to a positive start for the day, although widespread buying interest is held back by the recent uptick in the price of crude oil... After falling earlier this morning on Venezuelan President Hugo Chavez's win in a recall referendum, the commodity has crept higher (by $0.07) to new record highs (at $46.65/bbl)... Reports that a Shi'ite militia set an oil well on fire in Southern Iraq has once again raised supply concerns in this high- demand summer season... Most industry groups are showing slight gains, although tech has leaped ahead on account of strength in semiconductor...

[UpInArms]

19. oil is up this morning (again)

10:01am 08/16/04

SEPT CRUDE UP 17C AT $46.75/BRL IN EARLY NY TRADE

the news stories have definitely been waffling on that one - on Friday they were predicting higher prices if Chavez beat the recall because the oil workers in Venezuela would "strike" - then this morning they were saying that because Chavez beat the recall that oil prices would stabilize - now there's a story about the oil fields in Iraq being threatened and one of Yukos' shippers is going to cease shipping because Yukos is about to file bankruptcy.

hmmmmm....

hard to get a handle on the spin flying around

[UpInArms]

21. Crude climbs even as Venezuela's Chavez wins recall

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38215.4214930556-817777780&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (CBS.MW) -- Crude futures climbed closer to $47 a barrel in early New York trading to fresh record highs with traders wary of the possibility of violence in Venezuela despite the victory of Venezuela's President Hugo Chavez in the recall referendum Sunday. "If violence and unrest aren't seen in the coming 24 hours, we doubt that energy prices will see a sustained impact off the Venezuelan situation," said Michael Fitzpatrick, an analyst at Fimat USA. "The Venezuela impact might wane, leaving the Russian and Iraqi issue as the focal point," he said in a note to clients. September crude is up 17 cents at $46.75 a barrel, after reaching a high of $46.80 -- both are uncharted territory for the exchange.

[UpInArms]

22. 10:12 Numbers (straight up spike!)

Dow 9,909.20 +83.85 (+0.85%)
Nasdaq 1,777.00 +19.78 (+1.13%)
S&P 500 1,074.40 +9.60 (+0.90%)
10-Yr Bond 4.259% +0.046

http://finance.yahoo.com/mo

wish I could paste those charts :shrug:

[Zynx]

23. What in the hell was the reason for that spike? There is no good reason to

buy.

[UpInArms]

29. here's the spinner's explanation for that spike

The cautious tone of trading over the past 5 months - due, in part, to geopolitical concerns surrounding the active summer (DNC/RNC and Summer Olympics) - has prompted bargain-hunters to come in and take advantage of the weakness

see 10:30 blather :shrug:

[UpInArms]

24. Dollar stabilizes on foreign investment

Gains may be curbed by anxiety about oil, U.S. economy

http://cbs.marketwatch.com/news/story.asp?guid=%7BC425EC3B%2DD3E4%2D40FB%2D8D9E%2DE825EC00D69B%7D&siteid=mktw

CHICAGO (CBS.MW) -- The U.S. dollar firmed against its key rivals Monday after the Treasury Department reported increased foreign investment in U.S. financial assets in June.

The dollar was recently 0.2 percent ahead of the euro, which was quoted at $1.234, and also held a 0.2 percent advantage against the yen, with the Japanese currency at 110.92.

But the dollar's gains were expected to be limited, with Friday's record U.S. deficit still fresh in the market's mind. And some analysts cited oil-price stability as helping the dollar regroup following its drop last week.

"Concern that the U.S. economy is becoming increasingly vulnerable on the back of high oil prices has pushed the greenback out of favor in recent trade," said Paul Jackson, a senior foreign exchange dealer with CMC Group.

International investors purchased a net $71.8 billion of U.S. stocks, bonds and other securities in June, up from a revised $65.2 billion in May, the Treasury Department said. Read the full story.

Early on in U.S. trade, the dollar moved modestly lower after a gauge of New York manufacturing came in far weaker than forecast.

...more...

http://cbs.marketwatch.com/news/story.asp?guid=%7B7BB42C45%2DBD14%2D4702%2DAF4F%2DF9F0C0202E81%7D&siteid=mktw

Foreign capital flows higher in June

WASHINGTON (CBS.MW) -- Foreign long-term net capital flows into the United States increased to $71.8 billion in June from $65.2 billion in May, the Treasury Department said Monday.

It's the first increase in net flows since January.

Gross asset purchases by foreigners of U.S. stocks and bonds increased to $85.5 billion from $62.4 billion, while U.S. residents sold a net $13.7 billion of foreign assets compared with a net gain of $2.8 billion in May.

Foreigners bought $26.5 billion in U.S. corporate bonds, $23 billion in Treasurys, $15.3 billion in agency bonds and $2.4 billion in corporate equities.

Foreign central banks bought $18.3 billion of U.S. assets in June, up from $14.5 billion in May. The central banks bought $17.5 billion of Treasurys during June.

...more...

Wasn't the Bank of Japan intervening heavily in January?

Will look for that information.

[UpInArms]

25. Japan Buys Dollars and Braces for Higher Yen

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_derosa&sid=acy1t8NIz7_U

Jan. 11 (Bloomberg) -- It's nice to know someone likes to buy the dollar these days. That someone happens to be Japan, though the reason for this dollar gluttony is really a fear of the yen's strength more than a love of the dollar.

Japan's central bank was at it again last week selling huge quantities of yen to buy dollars. By one industry estimate, the Bank of Japan bought between $3 billion and $5 billion dollars against the yen on Friday alone.

Japan sold 20.1 trillion yen in 2003 through Dec. 26 to stem the currency's appreciation. Nevertheless, the yen rose almost 12 percent against the dollar in the same time period.

Japan means business about stopping the yen's rise. And if it can't totally succeed, officials believe they can at least make the currency rise slower.

The central question for Japan is why its officials think the rest of the world should tolerate their foreign exchange market shenanigans. While many nations talk about exchange rates, Japan stands out as the only country so vitally concerned that it's willing to take extraordinary steps to manipulate currencies.

He's Back

Friday's intervention sent the dollar up more than 2 yen above 108.00 -- and then it promptly fell to around its starting levels (around 106.50). This is proof positive that Japan's central bank is inducing unnecessary and dangerous volatility in exchange rates.

If anyone else did such a stunt, the Bank of Japan and Ministry of Finance would be screaming. Yet the Japanese officials seem to think these measure are doing the world some good.

Friday was a double dose of foreign exchange madness courtesy of Japan. Not only were there the BOJ's market maneuvers, but also the reappearance of Eisuke Sakakibara, a former vice finance minister for International Affairs who directed Japan's foreign- exchange policy from 1997 to 1999, and now a professor at Keio University.

...lots more about Japan at link...

[UpInArms]

26. more info from back in January 2004 regarding US monetary policy

http://www.iht.com/articles/123915.htm

IMF alarmed by U.S. foreign debt

Washington With its rising budget deficit and ballooning trade imbalance, the United States is running up a foreign debt of such record-breaking proportions that it threatens the financial stability of the global economy, the International Monetary Fund said in a report released Wednesday. The report — nearly 60 pages of carefully worded analysis — was unusually harsh, raising a loud alarm about the shaky fiscal foundation of the United States and the rapid decline of the dollar. It also questioned the wisdom of Bush’s tax cuts and warned that large budget deficits pose ‘‘significant risks,’’ not just for the United States but for the rest of the world. The report warned that the United States’ net financial obligations to the rest of the world could be equal to 40 percent of its total economy within a few years, creating ‘‘an unprecedented level of external debt for a large industrial country’’ that the Fund said could play havoc with the value of the dollar and international exchange rates. The dangers, according to the report, are that the United States’ voracious appetite for borrowing could push up global interest rates and slow global investment and economic growth.

...more...

Well, if the IMF was "alarmed" then, what in the world do they think now?

[UpInArms]

27. 10:30 EST numbers and blather (YEEHAW!)

Dow 9,921.95 +96.60 (+0.98%)
Nasdaq 1,779.44 +22.22 (+1.26%)
S&P 500 1,075.57 +10.77 (+1.01%)
10-Yr Bond 4.264% +0.051

10:30AM: Equities continue to climb in the first hour of trading, aided by the nearly 1% move lower in the price of crude oil as traders continue to sort out the morning's positive (Venezuelan President Chavez's win in a recall referendum) and negative (an oil well fire in Iraq) developments... The cautious tone of trading over the past 5 months - due, in part, to geopolitical concerns surrounding the active summer (DNC/RNC and Summer Olympics) - has prompted bargain-hunters to come in and take advantage of the weakness...

The Nasdaq itself has been on a course of new yearly lows over recent weeks - with last Thursday marking the latest worst level...NYSE Adv/ Dec 2123/628, Nasdaq Adv/Dec 1942/729

10:00AM: After a tepid open, the major indices lift higher, boosted by buying in nearly every sector... Tech, biotech, brokerage, transportation, homebuilding, and cyclical have all advanced 1% or more as investors have been relieved by the lack of terrorist activity at the Summer Olympics... The weak nature of trade last week, and the leveling off in the price of crude oil, has also lured more buyers off the sidelines... The only economic report of the morning - the New York Empire State Index - proved to be a bit of a disappointment as the August reading plunged 23 points to 12.8 (consensus of 32.3)...

However, this regional manufacturing report is relatively young and not widely followed, so most investors have dismissed its results in favor of the Philly Fed Index on Thursday...NYSE Adv/Dec 1693/803, Nasdaq Adv/Dec 1656/772

pay no attention to that man behind the curtain :eyes:

(edited to add 10:30 blather)

[nolabels]

30. I like hay rides

http://www.retiredtractors.com/Implements/haying.html

[UpInArms]

31. with the price of oil, looks like we'll need hayburners instead

[nolabels]

40. Horses are beautiful people too

http://filebox.vt.edu/users/jnierenb/draftwood/

Our neighbors have a couple of them big monsters, they love to frolic around, out in the open field

[UpInArms]

41. one of my best friends ever looked a lot like this

[UpInArms]

28. daily dollar watch (ino.com now up)

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

Last trade 88.04 Change +0.14 (+0.16%)

Last tick: 2004-08-16 10:02:29 ET
30-min delayed quote

[UpInArms]

33. 11:00 EST numbers and blather

Dow 9,926.60 +101.25 (+1.03%)
Nasdaq 1,780.18 +22.96 (+1.31%)
S&P 500 1,075.91 +11.11 (+1.04%)
10-Yr Bond 4.264% +0.051

10:55AM: The market holds around its best levels as trading screens remain awash in green... Financial, consumer discretionary, health care, industrial, basic material, and tech are among the largest gainers as buyers have found favor in just about every stock... Food distributor is the only real laggard following Sysco's (SYY 31.36 -2.08) Q4 (June) earnings miss on largely higher food costs (see Briefing.com's Earnings Briefing for more color)...

Other than that, traders have picked up equities in mass, and especially directed their efforts at underperforming areas like retail, semiconductor, and biotech (i.e. areas hard hit over the past couple of months)...The latter two can explain the Nasdaq's (+1.3%) outperformance of the S&P 500 (+1.1%)NYSE Adv/Dec 2260/612, Nasdaq Adv/Dec 1979/782

[Zynx]

34. I'm still having trouble understanding why anyone would buy today.

[UpInArms]

35. volume low - that way the numbers are easier to push up

NYSE Volume
368,493,000

Nasdaq Volume
404,021,000

[Zynx]

38. That would explain a lot. Thanks.

[htuttle]

36. People buy stocks because they think everyone else is buying

People sell stocks because they think everyone else is selling.

THAT is all that it takes to understand the market. Fundamentals, earnings, and reports matter little. My brother the broker clued me into this. I think he's right from what I can see.

I still prefer to spend my money at the Ho Chunk Casino instead of the stock market. At least it's regulated. Sevens and Elevens, baby! Papa needs a new pair of shoes!

[Zynx]

37. I've been around long enough to know about what I call "buying panics"

However, I meant a fundemental or technical reason for why stocks are rising today. Did I miss something?

[ozymandius]

39. Lemmings at the BUY window - see these charts!

[UpInArms]

42. 12:54 EST numbers and blather (still flying high)

(wonder what they're smokin'?)

Dow 9,938.77 +113.42 (+1.15%)
Nasdaq 1,781.90 +24.68 (+1.40%)
S&P 500 1,077.36 +12.56 (+1.18%)
10-Yr Bond 4.279% +0.066

12:30PM: Major indices retain nearly all of their gains from the morning as trading enters the lunch hour... All of the Dow's 30 components are sporting gains in what has been a winning session for the bulls... The move is all the more meaningful for Caterpillar (CAT 72.45 +0.70), whose main union voted late Sunday night to reject management's contract proposal for a second time this year... United Auto Worker (UAW) workers have still reported to work, although they have made clear they remain unhappy with Caterpillar's health care provisions, and will continue to work for a new contract... NYSE Adv/Dec 2367/748, Nasdaq Adv/Dec 2037/909

12:00PM: Buyers have flocked to the stock market, relieved by both the lack of terrorist activity at the start of the Summer Olympics and the drop in the price of crude oil... The commodity (which has jumped over 50% this year alone) actually fell somewhat to $45.92/bbl as Venezuelan President Hugo Chavez won a referendum recall - easing supply concerns about oil production in the fifth largest exporting country... Other factors that have supported the morning's rally include the lackluster performance of equities over the past two months...

The Nasdaq itself finished at new yearly lows in last Thursday's session, and the Dow and S&P 500 weren't far from them... Tech, biotech, brokerage, transportation, cyclical, and retail have all been exceptionally strong (gains of 2% or more) and spearheaded the market's advance... In fact, every major industry group has edged higher amidst the bullish breadth figures...

[KoKo]

45. No "terra alerts" and the start of the Olympics brought in buyers....

:eyes: they also are pleased about Chavez.... More :eyes:

[KoKo]

46. "Market Timer Astrologer" Ray Merriman's view on market..pre-election.

On top of the falling polls for the President Bush, the market may have also been concerned about the Treasury report that a larger than expected revenue shortfall for July pushed the Federal deficit in fiscal 2004 to a record 395.8 billion. Or the markets may been shaken by the fact that oil prices soared to a record level of $46.00/barrel, or the earnings reports by tech companies like Cisco were weaker than expected. With all of this, the NASDAQ Composite fell to 1750 on Friday, its lowest level since August of the prior year. The Dow Jones Industrial Average fell to 9783.90 on Friday, lower than last week’s 9793 low, and much lower than the 9850 double bottom lows of May 12 and 17, which were the 50-week and “Pre-Presidential Election Year (PPEY)” cycle troughs.

It is this market data fact that has us concerned, because once that PPEY trough is taken out before an election, it turns the odds sharply in favor of the challenger running for president. The only thing that can help George Bush now, as indicated by market behavior, is for the DJIA to stage a 10+% rally before early October. In fact, I would say the DJIA must get back to at least 10,450 before a Bush re-election possibility gets back on the radar screen. He needs to pull the proverbial rabbit out of the hat, or “famous terrorist out of the cave.” He needs to do something dramatic to counter the disastrous effect of the negative campaign ads aired by his “friends” last week. And lo and behold, the Bush White House announces such a plan last week. The plan is to abolish the national income tax and replace it with a national sales tax. Perhaps the only thing despised more than the lingering American military and political troubles in Iraq is the income tax. But, as John Kerry correctly questions, such a sales tax would likely be yet another initiative to benefit the wealthy and cause far more hardship on the middle class and poor of the United States. At least it would get rid of all those government jobs, at taxpayers’ expense, related to the IRS. At the same time, it would also eliminate a lot accountant jobs, which is not so good (unless you happen to despise your accountant and his/her fees).



Astrologically, I have stated before that this is potentially the most dangerous period of the year, August 6-September 15, and especially August 6-18. As stated in prior reports, I thought the stock market could fall—and fall hard—into this period, which it has. I expected, and still do, a bounce up as we enter the period immediately before and during the Republican National Convention, to take place at the end of this month. The Sun will conjunct Mars on September 15, and as reported in The Ultimate Book on Stock Market Timing Volume 3: Geocosmic Correlations to Short Term Trading Cycles, this signature has perhaps the highest correction to 10% or greater reversals in U.S. stocks within 27 trading days. We are in that time band now, but will be through mid-October. If Bush is going to win, he needs the stock market to bottom now and rally into late September, early October. And the rally has to be big—back above 10,450 in the DJIA in my opinion. It can happen, especially as we are falling right into the middle of this August 6-18 time frame. If it does, Bush still has a chance. But if this rally doesn’t get legs soon, then neither will Bush’s re-election efforts.

http://www.stariq.com/MarketWeek.HTM

[UpInArms]

43. More Gateway Job Cuts

http://www.kcautv.com/Global/story.asp?S=2179248&nav=1kglPuAe

A major Siouxland employer is announcing more job cuts. Gateway confirms it plans on laying off hundreds of workers in Kansas City and North Sioux City, South Dakota.

The personal computer and consumer electronics company won't say exactly how many jobs are being cut.

But Gateway Spokesman Bob Sherbin says it's above 100 and significantly below 500.

Those jobs will be eliminated by September 30.

...very short newsblurb...

[ozymandius]

47. Who's left at Gateway?

Will Ted soon work the assembly lines?

[loudsue]

44. Looks to me like someone is drinking Recovery flavored Kool-Aid

Truly....Who ARE these fools that believe the drop in the markets last week was some kind of "low" bottoming-out/"buy" signal??

The Lowbottomy syndrome????

:kick::kick:

[UpInArms]

48. Kiss low gasoline prices goodbye

http://money.cnn.com/2004/08/16/news/economy/pump_prices/

NEW YORK (CNN/Money) - Americans enjoying lower gas prices may be driving on borrowed time, according to industry analysts who see gasoline rising soon to reflect the recent jump in crude oil.

Prices at the pump have tumbled 20 cents since May 21, when they peaked at $2.07 a gallon for self-serve regular nationwide, according to Trilby Lundberg, whose Lundberg Survey tracks prices at about 7,000 gas stations every few weeks.

Over the last three weeks, prices at the pump dropped nearly a nickel to $1.87 a gallon, on average.

But industry analysts say low gas prices may have run their course, with crude oil for September hovering near a record high above $46 a gallon on the New York Mercantile Exchange midday Monday.

"It can't last," Lundberg said over the weekend, attributing the fall in gasoline prices to increased supply. "Wholesale gasoline prices are already responding to the crude oil price hikes, and are on the way up, so a turnaround at the pump can be expected fairly quickly."

Phil Flynn, an energy analyst with Alaron Trading, agreed, adding that ample gasoline supplies may be able to keep prices at the pump down for another couple of weeks.

...more...

(and there's a little poll regarding the price of gas at the link)

[KoKo]

49. 2:20 numbers..they say it's due to oil stability....What stability, I ask?

Dow 9,954.03 +128.68 (+1.31%)
Nasdaq 1,787.28 +30.06 (+1.71%)
S&P 500 1,079.32 +14.52 (+1.36%)
10-Yr Bond 4.268% +0.055
NYSE Volume 790,292,000
Nasdaq Volume 860,937,000

[Zynx]

50. They're stable, but high. ;-)

[54anickel]

51. Tail wags dog. Film at eleven

Last entry on the page

http://www.prudentbear.com/randomwalk.asp

snip>

Speaking of motivation, there are those motivated to believe that stocks are in a new bull market, in part, because they figure valuations aren’t that steep. According to the Bloomberg, the S&P 500 is trading in the ballpark of 24 times earnings. Some figure it’s more, some figure less. But Warren Pollock, who writes "The Macroeconomic Newsletter" thinks that there should be a footnote to whatever valuation you put on the index. The ever-vigilant Pollock notes that financials play an unusually large role in the index these days. And generally, valuations of financial stocks are well below that of the overall market. In fact, if a person were so infatuated with this topic that that person found the S&P 500 sectors on the Bloomberg and put them on a spreadsheet, then that person would know that financial sectors now account for about 20% of the S&P 500. That 20% jives with the 20.4% that Robert Blumen found in a New York Times story. (The financial sector weighting was part of Blumen’s much longer article on how the Fed’s ultra-low interest rates created “synthetic” demand for long maturity bonds that drove long interest rates artificially low, thereby covering up the Fed’s inflationary tracks, among other topics.) Of course, there’s nothing special about 20% except that ten years ago the financial weighting in the S&P 500 was more like 13%.

That person finagling with the spreadsheet would also know that the PE on the financial sector alone comes to about 13. Thirteen!. Of course, financial stock bulls figure this makes them the best deal since the 99 cent Whopper. Bears, however, figure that earnings of financials are at once-in-a-lifetime levels, and have nowhere to go but down. Way down. And as financial earnings go down, the overall market PE goes up. But even without such a bold prediction, and even without acknowledging that mortgage lending can’t forever and always be the economy’s tooth fairy, and even without conceding that high gas prices could keep credit card companies from dropping credit cards out of helicopters, the bottom line is, if you take the financials out, the remaining stocks in the S&P 500 have a PE of about 27. That doesn’t sound so cheap, especially with a dividend yield of about zilch and earnings about as trustworthy as the carnival barker at the softball throw.

A person who reads Chapter 2 of Michael Panzner’s “The New Laws of the Stock Market Jungle” might wonder why PEs aren’t unusually low, rather than unusually high, given their personality makeover of the last several years. Panzner, who has seen a stock trade or two, says right there on page 62 that stocks are “taking on more of the ‘look and feel’ of physical commodities.” He goes on to say that many stock market players are more concerned with baskets of stocks than the stocks themselves.

Well, what sort of sinister mind-control plot would persuade investors that stocks are more and more like pork bellies and less and less like big lemonade stands run by people in suits? Is it the bottled water? The imported beer? Harmful cellphone microwaves that can also cause short-term memory loss?

No. Right there on page 61, Mr. Panzner tells you that there has been a “dramatic” increase in equity-linked derivatives. And the trading of these derivatives, like indexes and index futures, are having an effect on the cash market rather than the other way around. In fact, Mr. Panzner has been nice enough to provide the following fancy chart that shows how the interest in one kind of derivative, Exchange Traded Funds, has proliferated like those little gray flying insects that seem to materialize in our kitchen by way of voodoo but actually are reproducing at the rate of six a minute inside a year-old bag of pecans in the nether regions of the pantry:

more...

[54anickel]

52. Global: Razor’s Edge (Stephen Roach)

http://www.morganstanley.com/GEFdata/digests/20040813-fri.html#anchor0

An unbalanced global economy is back on the razor’s edge. High oil prices are taking a toll on the US growth dynamic at precisely the point when a Fed tightening cycle has begun -- a risky combination by any standards. At the same time, a shift to policy austerity in China has led to a modest slowing of that overheated economy, with a good deal more to come. That puts a two-engine world -- driven by the American consumer on the demand side and the Chinese producer on the supply side -- in a zone of heightened vulnerability. As I see it, the risks on the downside outweigh those on the upside by a factor of three to one. I would now assign a 40% probability to a recessionary relapse in the global economy in 2005.

The Federal Reserve is in an excruciatingly difficult place. It’s hard to remember a time when the US central bank last tightened in the face of weakening data flow. But tighten it did, with a measured increase of another 25 basis points on August 10. Far be it for me to be overly critical of this action. After all, earlier this year, I publicly urged the Fed to be bold in executing a normalization of monetary policy by taking the federal funds rate from 1% to 3% in one fell swoop (see “An Open Letter to Alan Greenspan” originally published in the March 1 issue of Newsweek International). Alas, circumstances were very different six months ago. Oil prices were $10 lower and the US had an ample growth cushion. From my point of view, it was important for the US central bank to seize that moment and rebuild its depleted arsenal of policy weapons. Such an “opportunistic normalization” also would have served the useful purpose of unwinding carry trades and the multiple asset bubbles they spawn.

That was then. Suddenly, the US economy looks exceedingly vulnerable. An income- and saving-short American consumer, burdened by record debt levels, has been prompt to respond to sharply rising oil prices. Personal consumption expenditures rose at just a 1% annual rate (in real terms) in 2Q03 -- equaling the weakest increase since early 1995. The quick-trigger nature of this response is ample testament, in my view, to the underlying precariousness of consumer fundamentals. While the just-released July retail sales report points to a rebound in the third quarter, further increases in oil prices in the face of anemic job growth should temper any optimism. Moreover, I am starting to get worried about rapid inventory building in the face of this oil shock; in the three months ending June 2004, total stocks of manufacturing and trade establishments have risen at about a 9% average annual rate -- triple the growth rate of business sales over this same period. This borrows a page right out of the script of the summer of 1974, when the first OPEC shock led to an unwanted inventory overhang that blindsided the Fed and set the stage for severe recession in 1974-75. In short, the window has closed quickly on opportunistic normalization -- the growth cushion has all but vanished into thin air.

The Fed, of course, doesn’t see it that way. Its August 10 policy statement contained a very explicit forecast of better times ahead. Despite recent energy-related weakness, the FOMC maintained that “(t)he economy nevertheless appears poised to resume a stronger pace of expansion going forward.” It is very rare for America’s normally reticent monetary authorities to make such an explicit forecast of the future. Just out of curiosity, we combed the archives back to 1994 (when the Fed first began to release such policy statements) and came up with only one earlier instance when the FOMC was equally explicit in articulating a forecast. It was in June 2002, when America’s post-bubble recovery was flagging once again. The Fed’s press release after the June 26 meeting stated very clearly that “(t)he Committee expects the rate of increase of final demand to pick up over coming quarters.” Unfortunately, that was not one of the Fed’s better calls. Final demand growth averaged an anemic 1.3% (annualized) in the second half of 2002, and a year later the federal funds rate had been lowered from 1.75% to 1.0%. Oops.

more...

[54anickel]

53. A good excuse

http://www.jpost.com/servlet/Satellite?pagename=JPost/JPArticle/Printer&cid=1092280015910&p=1062388728912

Faced with serious erosion in his key asset, namely credibility, the chairman of the US Federal Reserve found a convenient scapegoat. Only 10 days after Alan Greenspan had assured both Houses of Congress, in separate testimonies on succeeding days, that the recovery in the American economy was proceeding well and that the weak data relating to the second quarter of 2004 were no more than a transient "soft patch," his optimism was blown out of the water.

The labor market data for July, published last Friday (August 6), confirmed the indications arising from several earlier pieces of data, that the weakness was continuing into the third quarter. Indeed, the jobs data for July were so bad – "beyond the wildest imaginings of the most confirmed pessimist," in the memorable words of one stunned analyst – that they called into question all the existing assumptions regarding the expected rate of growth in the US and, by extension, every other economy in the world.

On Tuesday, Greenspan was forced to respond to this unwonted development – because the Fed's Open Market Committee was holding a scheduled meeting to decide about interest rates. Since there was a universal expectation that the Fed would raise rates by one-quarter point, for the second successive time, not doing so would have been seen as an admission that things were going badly wrong. Furthermore, rates are so low that they have to be raised, come what may.

However, in its announcement that accompanied the rate rise, the Fed noted the slowdown in the economy – it could hardly do otherwise – and also pointed its finger at the cause: the high price of oil.

There are actually two issues here, both of which have been raised in this column over recent months. One is the state of the US economy, even without the problems raised by the rise in the price of oil and the factors responsible for it. Greenspan is the cheerleader of the "everything's great" camp, which believes that the economy will continue to expand – thanks to rising productivity, increased corporate investment and a generally benign state of affairs, both at home and abroad.

more...

[ozymandius]

54. Averages! Is it just me or do the markets seem to have low activity?

Dow 9,957.05 +131.70 (+1.34%)
Nasdaq 1,786.77 +29.55 (+1.68%)
S&P 500 1,079.46 +14.66 (+1.38%)
10-Yr Bond 4.259% +0.046

NYSE Volume 933,208,000
Nasdaq Volume 1,014,237,000

[KoKo]

56. I was going to ask the same thing when I posted the 2:20 numbers...

but it looks like there's more volume now than there was then. The update will usually mention volume but it's mum so far,it seems.

Here's the 2:20 numbers...but it does seem low :shrug:

Dow 9,954.03 +128.68 (+1.31%)
Nasdaq 1,787.28 +30.06 (+1.71%)
S&P 500 1,079.32 +14.52 (+1.36%)
10-Yr Bond 4.268% +0.055
NYSE Volume 790,292,000
Nasdaq Volume 860,937,000

[54anickel]

58. How many plan to pull a bit of money off the tables before closing? Not

enough volume for a good fleecing, is there?

[54anickel]

55. Bank Mergers Worry Business Owners

http://www.thestreet.com/smallbiz/inc/10165772.html

snip>

According to a recent survey by Greenwich Associates, 30% of small businesses (those with annual revenues between $1 and $10 million) and 23 percent of midsize businesses (annual revenue of $10 to $500 million) said that merger rumors concerning the banks where they do business would cause them to consider reducing future levels of banking business with them. The reason generally given was an expected decline in service quality.

Among their quality concerns, 53% of the small businesses surveyed believed a merger would have a negative impact on their established relationship manager performance, making it the most cited area.

The area midsize companies felt would be most affected was their banks' responsiveness to information requests, with 50% saying they felt this area of performance would be hurt.

When Bank of America completed its acquisition of FleetBoston in April, it gained 18 million new customers, including more than 500,000 small business accounts. With that came the headache of new ATM cards, account numbers and possibly new people handling those accounts.

These inconveniences can add up and, rather than dealing with them, some businesses would rather move their business elsewhere.

[54anickel]

57. Former S.D homeowners find real estate profits go a long way(GACK!)

http://www.signonsandiego.com/news/business/20040815-9999-1n15goldpot.html

For some San Diego County homeowners, the idea of cashing out has become too enticing to resist.

They are selling their homes and moving to relatively inexpensive places such as Wisconsin, Tennessee and Idaho, where they can pay cash for new houses, get out of debt and squirrel away money for their childrens' college funds.

These transplants are making plenty of sacrifices along the way. They are leaving behind jobs, friends and family. They are encountering lifestyle challenges, along with snow, humidity and mosquitos. They are moving to places where their Southern California sensibilities are distinctly out of place, where finding a good restaurant requires the skills of a detective, where the only professional sporting event is the local rodeo. And they are making a decision that financial experts warn could close the door permanently on a return to San Diego.

snip>

The Byrnes bought their 2,250-square-foot Mira Mesa house for $298,000 in 2001, sold it for twice that much in July and decided to move to a town 18 miles south of Nashville, Tenn. They chose Franklin, population 45,000, after researching areas of the country on the Internet. They liked the climate, the proximity to an urban area – and, of course, the price of real estate. Their new home, which is 2,900 square feet, has four bedrooms and sits on an acre. The cost? Only $229,000, paid in cash.

more....


No offense to those in CA, but we are getting way too many McMansions around my area in WI! HUGE, fancy homes. Nice for them, but I hope they plan on living in them a long, long time. Not too many folks here with the type of income needed to take it off their hands if they would want to sell in the future. Not to mention what these subdivisions are doing to surrounding property values and taxes!

[54anickel]

59. Intel seeks massive bond: Plant wants $16 billion for possible upgrades

http://www.abqtrib.com/archives/news04/081304_news_intel.shtml

Intel Corp. in Rio Rancho has asked the Sandoval County Commission for a $16 billion industrial revenue bond it says will help attract new Intel projects to the plant over the next 15 years.

snip>

"What this does is provide a framework for investment in new technologies Intel may bring to market over the next 15 years should market conditions warrant," McDermott said.

"The market will dictate how, and how much, of the $16 billion we utilize. There's no way of knowing now how much we're going to spend at any given time during the next 15 years."

snip>

Intel would get abatements on property and gross receipts taxes as part of the deal. McDermott said Intel would pay the county up to $95 million over 15 years in payments in lieu of taxes. He said the county would be guaranteed $80 million regardless of how much Intel spends. If it spends the entire $16 billion, the county would get the total $95 million.

snip>

McDermott said that unlike Intel's $8 billion bond deal approved by Sandoval County in 1995 - which updated two plants and built two new ones at the facility - there are no specific projects on the drawing board for this bond issue. And there are no job guarantees attached to the proposal.

snip>

"It would keep manufacturing jobs in New Mexico, in the United States," he said. HUH?

[54anickel]

60. Should You Be Selling Your Vacation Home Right Now?

Thankfully, I don't have this issue to have to deal with.

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_wasik&sid=arHZf6l.F7yk

snip>

You'll have to go against conventional wisdom to decide whether to sell in this market. The mantra of upward mobility dictates that you buy as much house as you can afford, then buy that second residence. Often a move in the opposite direction may ensure financial security.

snip>

The Market

Second homes may make a smooth retirement more difficult if they short-circuit your long-term financial goals.

Yet it's hard to argue why a vacation home might not be a good idea as the 77 million-strong baby boomer generation propels first- and second-home sales and prices to new heights. As the post-World War II generation gets older and more prosperous, it's buying country homes en masse.

In 2003, a record 445,000 vacation homes sold, according to the National Association of Realtors, a real-estate trade association. That was up 24 percent from the previous record high in 2001.

The association also says vacation-home prices will probably increase at a pace double that for first homes, which are projected to rise about 6.7 percent this year. Overall, median existing-home prices were up 9.1 percent in the second quarter over the same period in 2003, with 49 markets showing gains of at least 10 percent, the association reported last week.

more...

[54anickel]

61. Global: Twin Deficits at the Flashpoint?

http://www.morganstanley.com/GEFdata/digests/20040816-mon.html#anchor0

June’s enormous US trade deficit should be a wake-up call to America and the rest of the world. It is a direct manifestation of a lopsided global economy that remains biased toward unprecedented external imbalances. As long as the US continues to live well beyond its means and as long as the rest of the world fails to live up to its means, this seemingly chronic condition will only get worse. The imperatives of global rebalancing are reaching a flashpoint.

America’s record $55.8 billion trade deficit in June was a shocker. Annualized, it is equivalent to a $670 billion shortfall, or 5.75% of nominal GDP. Nor can this deterioration be explained away by surging oil prices. Excluding petroleum products, the trade deficit for goods still widened by $2.7 billion in June -- an enormous swing by any standards. The plain fact of the matter is that America has never come close to running such an outsize external deficit before. By way of comparison, the last time the US had a “foreign trade problem” was in the latter half of the 1980s; back then, the trade deficit (as measured on a national income accounts basis) peaked out at 3.2% of GDP in the second quarter of 1987. Needless to say, that was not the most tranquil of times in financial markets. As America’s external imbalance widened in mid-1987, the dollar came under sharp downward pressure and US interest rates were pushed higher. Those were the classic manifestations of a current account adjustment that many (myself included) believe were at the heart of the stock market crash of October 1987. Today’s external imbalances dwarf those of 17 years ago.

It’s easy to point the finger at others in diagnosing the problem. In the political season, the blame game always intensifies. US Treasury Secretary John Snow blames it on new weakness in the global economy. The Democrats tie America’s trade and jobs problems to the pressures of outsourcing and unfair foreign competition. As usual, there are some elements of truth in both explanations. The global economy does, in fact, appear to be sputtering. Goods exports plunged by 5.9% in June (in real terms), the largest monthly decline on record. While month-to-month fluctuations can never be taken too seriously, I don’t think it’s a coincidence that such a sharp decline in overseas shipments of American made goods occurred as slowdowns became increasingly evident in China and Japan and sluggishness persisted in Europe. On the other side of the trade ledger, renewed sluggishness on the US job front and a 1.8% surge in non-petroleum imports in June (sequential monthly rate) certainly speak to the unrelenting pressures of foreign penetration into US markets.

Yet this finger pointing misses the basic problem -- that of a saving-short US economy that is locked into the destructive spiral of ever-widening twin deficits. Lost in all the shuffle was the latest monthly update on that “other deficit” -- a $69.2 billion shortfall in the July federal budget deficit reported last week by the US Treasury. Not only was that about $7 billion worse than expected, but it puts America easily on track to break the $400 billion threshold on the budget deficit for the first time ever. While America’s budget deficit has been larger as a share of GDP -- the estimated 3.6% gap in the current fiscal year falls well short of the 6% peak hit in 1983 -- the sheer volume of financing is obviously of critical importance for the capital markets. Nor has the US ever experienced such a massive turnaround in its budget position -- with the deficit for the current fiscal year representing a swing of 7% of GDP relative to the 2.4% budget surplus recorded in 2000.

Moreover, there’s another key aspect of this problem: Unlike the deficits of the 1980s, America is lacking in any backstop in private saving. Net of depreciation, the private saving rate of households and businesses, combined, stood at just 4.5% of national income in 2003; that’s only a little more than half the 8.3% average recorded in the latter half of the 1980s -- the last time the US had a deficit problem. In addition, the personal saving rate fell back to just 1.2% in June 2004 -- underscoring the asset-dependent US consumer’s seemingly chronic aversion to income-based saving. This deficiency of private saving means that outsize government budget deficits are now putting a greater strain on the US economy and financial markets than was the case during the latter half of the 1980s.

more...

[KoKo]

62. Closing numbers...and confirmation of "light volume."

Dow 9,954.55 +129.20 (+1.31%)
Nasdaq 1,782.84 +25.62 (+1.46%)
S&P 500 1,079.34 +14.54 (+1.37%)
10-Yr Bond 4.258% +0.045
NYSE Volume 1,206,377,000
Nasdaq Volume 1,289,723,000


New York Stock Exchange volume was a relatively light 741 million shares, with advancers outrunning decliners by more than 3 to 1.

"Business capital spending, especially energy-intensive investments, is likely to be postponed or canceled until the energy picture becomes clearer, dampening economic growth," said Sung Won Sohn, chief economist at Wells Fargo & Co., in Minneapolis.

"A concern is that the terror premium won't go away soon, building in the expectation of high oil prices for a considerable period."

[daleo]

63. Who would have guessed capitalists loved Chavez so much?

I can't think of any other "good news" worth a 130 point jump.

[54anickel]

65. CYBER FEARS ON FED'S WEB PLAN (Oh great!!!)

http://www.nypost.com/business/18671.htm

August 15, 2004 -- With little fanfare, the Federal Reserve will begin transferring the nation's money supply over an Internet-based system this month — a move critics say could open the U.S.'s banking system to cyber threats.
The Fed moves about $1.8 trillion a day on a closed, stand-alone computer network. But soon it will switch to a system called FedLine Advantage, a Web-based technology.

Proponents say the system is more efficient and flexible. The current system is outdated, using DOS — Microsoft's predecessor to the Windows operating system.

But security experts say the threat of outside access is too big a risk.

"The Fed is now going to be vulnerable in two distinct ways. A hacker could break in to the Fed's network and have full access to the system, or a hacker might not have complete access but enough to cause a denial or disruptions of service," said George Kurtz, co-author of "Hacking Exposed" and CEO of Foundstone, an Internet security company.

snip>

The biggest concern isn't the 13-year-old who hacks into the Fedwire and sends himself some money — it's terrorism. :scared:

On July 22, the Department of Homeland Security released an internal report saying a cyber attack could result in "widespread disruption of essential services ... damag(ing) our economy and put(ting) public safety at risk."

But the Fed's undertaking of this massive overhaul is considered a necessity.

"Our strategy is to move to Web-based technology because there are inherent limitations with DOS based technology and our goal is to provide better and robust product offerings to meet our customers' needs," said Laura Hughes, vice president of national marketing at the Chicago Fed, which has spearheaded this program.

:eyes: Great, the Nations wealth and bloodline in the hands of the VP of MARKETING!!!

[UpInArms]

66. not to knock the marketing people, but...

this is not a real swell idea :crazy: