STOCK MARKET WATCH, Thursday 26 August

[ozymandius]

Thursday August 26, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 147
DAYS UNTIL W* GETS HIS PINK SLIP 68
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 258 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 312 DAYS
WHERE ARE SADDAM'S WMD? - DAY 525
DAYS SINCE ENRON COLLAPSE = 1008
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

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AT THE CLOSING BELL ON August 25, 2004

Dow... 10,181.74 +83.11 (+0.82%)
Nasdaq... 1,860.72 +23.83 (+1.30%)
S&P 500... 1,104.96 +8.77 (+0.80%)
10-Yr Bond... 4.26% -0.02 (-0.51%)
Gold future... 410.00 +5.00 (+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

---

[UpInArms]

1. daily dollar watch

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

Last trade 89.39 Change -0.03 (-0.03%)

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=MTFH25217_2004-08-26_09-19-38_L26475895

GLOBAL MARKETS-European stocks, dollar rally as oil prices drop

LONDON, Aug 26 (Reuters) - European stocks and the dollar rallied on Thursday as tumbling oil prices relieved investor fears about economic and earnings growth, while debt yields rose after stronger-than-expected German economic data.

U.S. oil prices fell nearly 4 percent on Wednesday as supply concerns eased after data showed unchanged stocks of gasoline in the United States last week against expectations of a hefty drawdown during the peak summer driving season.

But crude traders are watching Iraq, where hopes of an end to violence in Najaf with the impending visit of the top Shi'ite leader to the holy city on Thursday and a resumption of most oil flows are mixed with concerns over sabotage attacks.

U.S. crude <CLc1> was up 25 cents at $43.72 a barrel, but nearly $6 a barrel below last Friday's record high of $49.40. London Brent <LCOc1> was up 19 cents at $40.87 per barrel.

"Over the next year, the latest spike in spot oil prices probably will slow economic growth and lift headline inflation moderately," said Kermit Schoenholtz at Citigroup.

"Oil shocks are less disruptive than in the 1970s because well-anchored inflation expectations reduce the need for monetary policy restraint, energy efficiency is higher and the inflation adjusted price of oil remains much lower."

...more...

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1093515660-9e32d306-22043

Eight oil pipelines sabotaged in southern Iraq, says South Oil Co

BASRA, Iraq (AFX) - Eight oil pipelines in southern Iraq were sabotaged in an overnight explosion, an official at the South Oil Company said. "At 9.00 pm (1700 GMT), a device exploded under a bridge, which collapsed. Eight parallel pipelines, feeding the Zubeir 1 and Zubeir 2 oilfields were damaged," the official said, speaking on condition of anonymity

The oilfields in question lie 20 km southwest of Iraq's main southern city of Basra, the official said

Traders said the news helped to lift prices

World oil prices rebounded slightly in the wake the attacks, London traders said

The price of benchmark Brent North Sea crude oil for delivery in October climbed 22 cents to 40.90 usd/barrel in opening deals, having shed 1.64 usd/ barrel the day before

New York's main contract, light sweet crude for October delivery, gained 31 cents to 44.78 usd/barrel in pre-opening electronic trading, having plunged 1.74 usd/barrel yesterday

"There's been headlines about problems in the south of Iraq, sabotage to crude oil pipelines overnight," Prudential Bache trader Christopher Bellew said. "That caused the market to rally by about half a dollar at one point, but it came back down a bit. It is not exactly clear what's going on. It seemed earlier that it was causing exports to be interrupted, but, it seems now maybe not." Oil prices plunged yesterday as a modest improvement in the supply outlook encouraged speculators to bank their profits

...more...

http://business.bostonherald.com/businessNews/view.bg?articleid=41421

Layoffs on new CMGI chief's agenda

Layoffs are coming at Charlestown-based CMGI, the new chief executive warned yesterday.

``There are certainly layoffs to come,'' said Joseph Lawler, who took
over at the former high-flyer from George McMillan.

The cuts follow CMGI's acquisition of global rival Modus Media, which
completed this month. Plenty of jobs are being done by two people.

But Lawler told the Herald he hopes to minimize the pain.

``There is about $20 million in savings to come out of the business,

but a great deal can come simply from better procurement. You can buy things more cheaply as a bigger company,'' he said.

CMGI employs more than 3,600 worldwide, but barely 100 in
Massachusetts.

<snip>

Lawler says the biggest challenge ahead is integrating CMGI and Modus. At Chicago-based printer R. R. Donnelly & Sons, he built up Donnelly's operations in Asia, Latin America and Eastern Europe and helped lead expansion into services.

...more at link...

http://www.reed-electronics.com/electronicnews/article/CA447831

Cirrus Plans Layoffs

Consumer electronics chipmaker Cirrus Logic will lay off 7 percent of its workforce as part of a plan to reduce expenses.

The plan calls for the company cut expenses by $2 million to $3 million per quarter beginning in its Q3, which ends Dec. 25.

The layoffs will primarily affect employees at the company's Texas and California facilities, the company said in a statement. At the end of June, the Austin, Texas-based company's workforce stood at 768 employees, with about 75 percent based in the United States.

The restructuring will mean a charge to operating expenses in Q2 of about $1.5 million, primarily for severance and facility consolidation, and will be paid over the rest of the calendar year.

...more...

It's MaeveDay!

Aug 26 8:30 AM
Initial Claims 08/21
report -
briefing.com anticipates 335K
market anticipates 335K
last report 331K
revised -

Aug 26 10:00 AM
Help-Wanted Index Jul
report -
briefing.com anticipates 39
market anticipates 38
last report 38
revised -

Love the 'toon, Ozy - wish that had added one more item to the heist - democracy

Have a Great Day Marketeers!

[UpInArms]

2. initial claims numbers

8:30am 08/26/04

U.S. WEEKLY JOBLESS CLAIMS UP 10,000 TO 343,000

8:30am 08/26/04

U.S. 4-WEEK AVG. JOBLESS CLAIMS DIP TO 336,750

8:30am 08/26/04

U.S. CONTINUING CLAIMS UP 5,000 AT 2.897 MILLION

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38225.3543518518-818720790&siteID=mktw&scid=0&doctype=806&

U.S. jobless claims rise 10,000 on storm damage

WASHINGTON (CBS.MW) - First-time claims for state unemployment benefits rose by 10,000 in the week ending Aug. 21 to 343,000, the Labor Department reported Thursday. It's the highest level in four weeks. About half the gain was due to the impact of Hurricane Charley, which battered Florida and other Southeastern states on Aug. 13 and 14, a government official said. Despite the increase, the more reliable four-week average of new claims dipped by 750 to 336,750, the lowest in four weeks. Meanwhile, the number of people collecting state unemployment checks rose by 5,000 to 2.897 million in the week ending Aug. 14. The insured unemployment rate remained at 2.3 percent.

(edited to add text)

[UpInArms]

3. interesting note on the Economic Calendar page

they do not show that they "revised" last week's number

Aug 26 8:30 AM
Initial Claims 08/21
reported 343K
briefing.com anticipated 335K
market anticipated 335K
last report 333K
revised from - (huh?)

[54anickel]

4. Looks like that should be revised from 331K, from last weeks post -

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=761634#761700

[UpInArms]

13. U.S. JULY HELP WANTED INDEX FALLS TO 37 VS. 38

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38225.4169212963-818727327&siteID=mktw&scid=0&doctype=806&

U.S. help wanted index falls 1 point in July By Rex Nutting
WASHINGTON (CBS.MW)-- U.S. firms are reducing their help-wanted advertising in major newspapers, the Conference Board said Thursday. The board's help wanted index dipped to 37 in July from 38 in June. The index was at 38 a year ago after hitting a 42-year low of 36 earlier in 2003. Ad volumes declined in six of nine regions over the past three months. "The latest data show essentially no change," said Ken Goldstein, chief economist at the board. "Overall economic momentum is no longer firiing on all cylinders," he said. "And hiring intentions this summer are suggestive that companies may not increase hiring until the economy regains more solid footing."

[UpInArms]

5. pre-opening blather

briefing.com

09:13 ET S&P futures vs fair value: -1.5. Nasdaq futures vs fair value: - 4.5. No change to the pre-market bias, which implies a slightly lower open for the cash market

08:39 ET S&P futures vs fair value: -1.2. Nasdaq futures vs fair value: - 3.0. Initial claims data, which were a bit higher than expected (343K vs 335K consensus), didn't do anything to improve the mood of the futures market... Accordingly, the cash market remains poised for a relatively flat to slightly lower open

08:12 ET S&P futures vs fair value: -0.4. Nasdaq futures vs fair value: - 1.5. Cash market appears ready for a relatively flat opening as the S&P and Nasdaq 100 futures trade just a touch below fair value... profit taking expectations and a lack of any decidedly positive catalysts are keeping enthusiasm in check for the time being

ino.com

The September NASDAQ 100 was slightly lower overnight as it consolidates some of Wednesday's rally but is challenging the 40-day moving average crossing at 1387.11. If this resistance level is cleared, the 38% retracement level of the July-August decline crossing at 1388.75 is the next upside target. However, stochastics and the RSI are bullish but becoming overbought hinting that a short-term might be near. The September NASDAQ 100 was down 1.50 pt. at 1389 as of 6:36 AM ET. Overnight action sets the stage for a steady to weaker opening by the NASDAQ composite index later this morning.

The September S&P 500 index was slightly lower overnight as it consolidates above the 38% retracement level of the June-August decline crossing at 1093. If this month's rally continues, the 50% retracement level of the June- August decline crossing at 1103.05 is the next upside target. Stochastics and the RSI are bullish but becoming overbought hinting that a short-term top might be in or is near. Closes below the 10-day moving average crossing at 1091.45 would signal that a short-term top has likely been posted. The September S&P 500 Index was down 0.40 pts. at 1103.40 as of 6:45 AM ET. Overnight action sets the stage for a steady to weaker opening when the day session begins later this morning.

[UpInArms]

6. Oil falls to $40 (huh?)

http://www.reuters.co.uk/newsPackageArticle.jhtml?type=businessNews&storyID=572059§ion=finance

LONDON (Reuters)

- London Brent crude has fallen briefly through $40 for the first time in three weeks, extending heavy losses to a fifth session as renewed exports from Iraq and higher-than-expected U.S. gasoline inventories encourage big-money funds to take profits.

London Brent crude fell 59 cents to $40.09 a barrel, having briefly touched a three-week low of $39.80.

U.S. light crude dropped 48 cents to $42.99 a barrel, after slumping $1.74, nearly four percent, on the New York Mercantile Exchange on Wednesday to its lowest close since August 4.

U.S. prices are now nearly $6.50, or 13 percent, below last week's record $49.40 high.

Prices have been helped lower by profit-taking by hedge funds, dealers said, following Wednesday's U.S. government oil supply report showing refiners producing enough gasoline to meet summer vacation driving demand.

"There's a mixture of trade and fund selling," said Prudential Bache broker Tony Machacek.

<snip>

On Wednesday, the U.S. government Energy Information Administration EIA.L latest stock report showed commercial gasoline stocks were steady at 205.7 million barrels in the week ended August 20, near the upper end of their 5-year average.

...more...

Didn't they just say yesterday that stocks decreased?

[54anickel]

8. Ha, notice is says "briefly". Earlier this AM it was reported up. I'm

thinking they just like to get those profit taking dips out in the press so folks continue to hold hope that they could easily drop back down to "normal". From what I've been reading the normal range will have to move up to around $35, figure higher if the buck continues to drop.

Crude Oil Futures Rise on Iraq Fighting, Reduced Export Flows
http://quote.bloomberg.com/apps/news?pid=10000103&sid=anoiKbdcQoEc&refer=us

Aug. 26 (Bloomberg) -- Crude oil futures rose in London, rebounding from the biggest four-day drop in nine months, as fighting in Iraq, attacks on pipelines and reduced exports revived concern about cuts in supply.

Oil flows to tankers at Iraq's southern export terminals slowed today, just four days after returning to normal, local shipping agents told Bloomberg. Several backup pipelines were attacked in southern Iraq, Reuters reported. Military action in central and southern Iraq, including Najaf, killed 29 people in the past 24 hours, a government spokesman said.

``Oil prices had been trickling down in the last few days as Iraqi exports returned, but any interference with pipelines will send prices back up,'' said Veronica Smart, an analyst at Energy Information Centre, a consulting company in Newmarket, England.

Brent crude for October settlement was up 27 cents at $40.95 a barrel on London's International Petroleum Exchange at 10:11 a.m. local time. Oil dropped $3.65, or 8.2 percent, during the previous four days as Iraq's oil exports recovered and as a report yesterday showed U.S. gasoline inventories were unchanged last week, contrary to expectations for a decline.

snip>

``The fact that we did not see inventory levels diminish at all is very telling,'' said David Aleman, managing director of Axis Trading Co. in Beverly Hills, California. ``The higher prices have taken some of the demand out of the market.''

[54anickel]

14. Meanwhile - Eight oil pipelines sabotaged in southern Iraq

http://www.middle-east-online.com/english/?id=11082

Eight parallel pipelines, feeding Zubeir 1 and Zubeir 2 oilfields damaged, affecting Iraq's oil exports.


BASRA, Iraq - Eight pipelines feeding two southern oilfields were sabotaged in an overnight explosion, affecting exports and dealing a blow to the country's vital but beleaguered oil industry, officials said Thursday.

Threats against oil infrastructure amid fighting between US troops and Shiite Muslim fighters in the holy city of Najaf, had seen world oil prices reach record highs before southern Iraqi exports resumed to normal levels at the weekend.

"At 9:00 pm (1700 GMT), a device exploded under a bridge, which collapsed. Eight parallel pipelines, feeding the Zubeir 1 and Zubeir 2 oilfields were damaged," said a source at the South Oil Company on condition of anonymity.

Part of a cluster of 20 pipelines at Al-Barjassiya, only eight were damaged in the explosion, said an official at the oil ministry in Baghdad.

"The fire still had not been put out Thursday morning. This sabotage will affect exports," he said, refusing to elaborate.

[UpInArms]

7. 9:34 EST markets are open

Dow 10,161.83 -19.91 (-0.20%)
Nasdaq 1,853.26 -7.46 (-0.40%)
S&P 500 1,102.68 -2.28 (-0.21%)
10-Yr Bond 4.254% -0.007

[UpInArms]

9. 9:51 EST numbers and blather (getting so much better!)

Dow 10,186.24 +4.50 (+0.04%)
Nasdaq 1,858.30 -2.42 (-0.13%)
S&P 500 1,104.75 -0.21 (-0.02%)
10-Yr Bond 4.248% -0.013

9:40AM: Consistent with the pre-open futures trade, the cash market has started the session on a modestly weaker note... The initial downtick is being attributed to profit taking from the recent rebound effort... Separately, crude futures are falling again today (-$0.56 at $42.91) as a cease- fire in Najaf and a statement from OPEC that it wants a swifter oil price drop are easing supply concerns... This decline could ultimately come back around as a source of support for the stock market that encourages renewed buying interest later in the session...

that straight up spike means that all is well!

[54anickel]

10. Firms outpace consumers as growth engine

Wishful thinking is my call on this one. There may be some increase, I mean let's face it they've been pretty damned tight with their $$$ for quite a while. But just how much are they going to toss out there if there's not much consumer demand for their products. Consumer's do make up 2/3 of the "economy" these days.

http://www.chicagotribune.com/business/chi-0408260286aug26,1,7669707.story?coll=chi-business-hed

A resurgence in corporate capital spending might create jobs and strengthen the economy after its midyear lull, economists say.

In the second quarter, business investment added more to economic growth than consumer spending did for the first time in nine years, according to Commerce Department data.

"The economic baton has to pass from the consumer to business spending," said Sung Won Sohn, chief economist at Wells Fargo & Co. in Minneapolis. "Without it, the recovery would be in jeopardy."

A survey published last week by PricewaterhouseCoopers LLP found that investment is showing no sign of letting up: 55 percent of senior executives planned new spending, up from 41 percent a year earlier.

Investment increased starting with the second quarter of 2003 after nine straight quarters of decline. The reason for the acceleration--10 percent growth between June 2003 and June of this year--might be that executives were caught off guard by how rapidly the economy bounced back from the 2001 recession.

more...

[54anickel]

11. Is the Retail Rebound Over?

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

With substantially all of the S&P 500 reporting second quarter earnings, earnings growth will be up over 25% for the third consecutive quarter. It is very unlikely that it will be able to extend the streak as third quarter of 2003 saw 21% EPS growth, which makes four consecutive quarter of 20% + EPS growth. Revenue growth is running 12.4% above last year’s pace, which was 11.5% itself. As we have discussed before, a large part of the increase has been due to higher energy prices along with the increase in commodity prices such as steel.

While the jump in revenues is indicative of the economy doing better than a year ago, part of the increase is due to surging commodity prices such as oil and steel. But it also has jumped because of the enormous amount of “fluff” in the economy. Earlier this week the CEO of PetSmart was on CNBC discussing the company’s moving into the service side of the pet business. The company has started offering grooming and training services and is rolling out its PETsHOTEL concept that provides boarding services and day care service. In our eyes this is a perfect example of the “fluff” that appears in the economy when the money spigot has been left running full blast too long

Retailing stocks have been stuck in a trading range since late last year after rebounding about 50% off the lows set during the first quarter of 2003. Investors were betting on a recovery in the sector that transpired. However, looking forward retailers are clearly losing momentum with the lack of stimulus that propped up the consumer last year. While calling for the end of the spending binge has been hazardous, there is little doubt that consumer spending will not be able to be sustained at these level indefinitely.

snip>

Much of the confidence consumers have is derived from watching the value of their house escalate. For the overwhelming majority of Americans, their house is their largest asset. Calling the top of the housing market has been even more dangerous than trying to forecasts when consumers will retrench. This week, the National Association of Realtors reported that existing home sales dropped to a 6.72 million annualized rate in July from 6.92 million units last month. This was also lower than the 6.81 million units economists forecasted. Then on Wednesday, the Commerce Department announced that new home sales fell to 1.134 million unit pace. Additionally, June’s pace of sales was revised sharply downward to 1.211 million from the initial calculation of 1.326 million. It was also well below the 1.3 million economist expected. While both these economic indicators were declined and were below estimates, they remain stronger than any point prior to mid-2003.

more...

[54anickel]

12. Retail results for August expected to be 'very messy'

http://www.startribune.com/stories/535/4948223.html

With a week left until retailers report August sales, concern has surfaced about sluggish results in a month that has been challenging on several fronts.

The nation's largest chains have been contending with steep gas prices, the wrath of Hurricane Charley and the shift of the Labor Day holiday from this month to the September reporting period. Merchants also are facing tough comparisons with a year ago, when consumers were eager to spend their child tax credit rebate checks.

"The bottom line is these are going to be very messy numbers," Michael Niemira, chief economist and director of research at the International Council of Shopping Centers, said Wednesday.

The New York City-based trade group this week pared its industrywide forecast for August same-store sales from a 3 to 4 percent increase to 2.5 percent, which would yield the weakest showing since June 2003.

Same-store sales, or results at stores open at least a year, are a closely watched retailing indicator. After posting healthy gains early in the year, same-store sales cooled in June and have yet to bounce back.

more...

[UpInArms]

15. 10:37 EST numbers and blather

Dow 10,176.94 -4.80 (-0.05%)
Nasdaq 1,855.38 -5.34 (-0.29%)
S&P 500 1,104.61 -0.35 (-0.03%)
10-Yr Bond 4.256% -0.005

10:30AM: The early action bears some resemblance to what transpired yesterday in the early-going, which is to say the indices are little changed as conviction on the part of buyers and sellers is lacking... The Nasdaq has been tipped into negative territory by pockets of weakness in the technology sector that include the closely- followed semiconductor stocks... Although Barron's Online carried a report this morning that money managers are buying chip stocks on their recent weakness, analyst commentary on the sector's prospects continues to skew to the cautious side of things...

This morning, Banc of America Securities cut its earnings estimates and price targets for Intel (INTC 21.75, -0.20), Broadcom (BRCM 29.30, -0.51) Micron (MU 11.76, -0.27) and Texas Instruments (TXN 20.00, -0.03), adding that it believes the cyclical peak in semis has prematurely come and gone.... On a related note, leading chip equipment maker Novellus Systems (NVLS 24.88, -0.26) will be holding its mid-quarter update after the close... NYSE Adv/Dec 1330/1429, Nasdaq Adv/Dec 1027/1418

9:55AM: The opening retreat didn't gain much traction as the indices were able to fight their way back quickly to unchanged territory... Credit the continued slide in oil prices for being a source of support, as well as a lack of any disconcerting headlines to disrupt the bullish bias that has prevailed of late... As to be expected, airlines, which certainly enjoy the sight of falling oil prices, comprise a leadership group this morning... Overall, there isn't much concerted leadership on either side of the aisle, which helps explain the market's mixed and relatively flat standing at the moment...

So, I guess we are looking for an "up" day?

[54anickel]

16. Looking for another up day just like yesterday? Eww, then we'll have

to check the lunchtime trend!

[UpInArms]

17. Greenspan says banks can prevent illegal tying

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=6079041

WASHINGTON, Aug 26 (Reuters) - Federal Reserve Chairman Alan Greenspan said internal controls are usually enough to prevent banks from engaging in illegal "tying," a practice in which low-cost loans are offered to borrowers who agree to buy other high-fee services.

"Based on our supervisory experience, it appears that banking organizations generally have adequate internal controls to help prevent illegal tying," Greenspan said in a written response to a question submitted in connection with a July 20 hearing held by the Senate Banking Committee.

...a bit more...

That's the ticket! Internal controls! YeeHaw!

Who the hell needs regulatory and supervisory controls! Corporations and banks are always good!

[ProfessorGAC]

42. Actually, He's Right!

You probably know i'm no fan of Greenspan, but there are thousands and thousands of banks and branches that don't do this. The enforcement people need to branch their resources better and just go after those bankers who are violating the regulations.

Notice i don't agree with Al on regulatory needs. He's a liberterian, essentially. He honestly believes that regs are really necessary. I think that's ridiculous.

But, if 98% of all bankers can follow the rules, what we really need to regulate is the other 2%. We don't need more laws or more regulators. We need to do a better job of putting teeth into the ones we have. Put the lawbreakers in jail. And, more importantly, take the money they made away. This will hurt them more than anything else. They do it to drug dealers all the time. Confiscation of everything paid for with drug money and any cash they find, is routine. Yet, Milken, Bosky, and the Siverado guys, went to a Holiday Inn with prison bars, and came out 3 years later with $400 million dollars. Some punishment.
The Professor

[UpInArms]

18. Field Poll: Californians liking economy

(headline a bit off? a majority is unhappy, but wtf do we care!)

http://www.sacbee.com/content/politics/story/10513395p-11432403c.html

Californians are slowly growing more optimistic about the health of the economy, but a majority still feels the state is in bad economic times, according to a new Field Poll.

A survey of 602 registered voters compiled early this month shows that 53 percent felt California is in "bad times," down from 75 percent a year ago. Twenty-four percent described the current economy as "good," compared with just 11 percent a year ago.

More significantly, said poll Director Mark DiCamillo, 44 percent feel the economy will improve in the next year and 39 percent think it will stay the same, while just 14 percent think it will get worse.

A year ago, 30 percent thought the situation would get better, 35 percent thought they would stay the same, and 30 percent thought the economy would worsen.

DiCamillo said the improved outlook is important because optimism could drive consumers to spend more freely, boosting the economy.

...more...

Clap louder!

[54anickel]

20. Clapping......

[54anickel]

19. As Economy Wobbles, Fed Walks Tightrope

http://www.thestreet.com/comment/aaronpressman/10180108.html

snip>

But even with oil falling and stocks rebounding, Wednesday's economic reports contained some troubling signs, raising anew questions about the outlook for monetary policy.

First, the Commerce Department's report on durable goods showed that, save for some big aircraft orders, businesses aren't generating much demand. Orders rose 1.7% in July but only 0.1% excluding transportation. Still, it wasn't a horrendous report as the headline number bested consensus, inventories increased for the eighth straight month, and unfilled orders rose 1.2%.

Second, and perhaps more surprising, was the department's reading of new-home sales. Not only did sales in July slide 6% to an annual rate of 1.13 million, but the rates for May and June were also revised lower. Again, it was hardly a total disaster as sales are still running 4% above 2003's average rate and inventories remain at historically low levels. But the top-line decline was more than Wall Street had predicted, prompting a slide in housing and related shares.

snip>

Recent speeches by Minneapolis Federal Reserve Bank President Gary Stern, Dallas Fed President Robert McTeer and, most especially, Fed Governor Ben Bernanke, suggest "at the margin, there may be a change in tone taking place at the Fed -- one that is less hawkish," Rosenberg wrote in a report out Tuesday.

Stern trimmed his growth forecast slightly and McTeer said the economy's weak spot was extending beyond the second quarter. Bernanke, in a speech on Monday, said the Fed could "respond to the weakening of the economy associated with an oil price increase so long as we are confident that inflation will remain stable."

Those could all be signals that the Fed sees less need to raise rates, Rosenberg wrote.

He also argued that twice in recent memory the Fed abandoned its assessments of economic strength and quickly cut interest rates on the basis of weak economic data. It happened in 1997-98 and again at the beginning of 2001.

Rosenberg certainly has a point in the more recent example, as the Fed's expectation of continued robust growth was undone by the popping of the technology bubble.

more...

[54anickel]

21. Changes blow through bond holdings

http://news.ft.com/cms/s/aa5362ec-f6cd-11d8-a879-00000e2511c8.html

US property and casualty insurers might use the payouts due following Hurricane Charley to reshuffle their bond portfolios before new accountancy guidelines take effect.

snip>

Insurers' cash levels are believed to be sufficient to avoid significant financial problems from hurricane-related payouts, but analysts suggest that, combined with impending changes to accountancy guidelines, portfolio managers might tweak their bond holdings.

“It's possible that insurers might offset some of the losses expected from the hurricane with gains they take out of their investment portfolio,” said Paul Escobar, senior vice-president for insurance client strategies at Standish Mellon.

The rise in bond prices during recent years, as interest rates have fallen, has created a lot of unrealised profits which, as interest rates rise and bond prices fall, could be lost. Moreover, a change to US accounting guidelines, which came in at the end of June could see insurers writing down the portfolio value of bonds where interest rate changes mean the market value has fallen below the price paid.

snip>

A recent rise in bond yields, fuelled by the Federal Reserve's first two monetary tightening moves in four years, is believed to have led insurers to shorten the duration of the bonds they hold. Duration is a measure of how long it takes for the cashflow generated by a bond to repay its price. Higher durations imply a bond's cashflows take longer to meet its price, making the security more sensitive to rate changes. According to the Insurance Information Institute, insurers hold about two-thirds of their portfolio in bonds. Bob Hartwig, chief economist at the institute, noticed some were reducing equity exposure in favour of bonds, and municipal bonds, such as those issues by US states, were becoming more popular due to their tax-exempt status.

“When insurers were unprofitable, as in 2001, 2002, tax wasn't as significant an issue but . . . tax-free income has become more important again,” he said.

more...

[54anickel]

22. China's economy 'still at risk'

http://news.bbc.co.uk/1/hi/business/3600328.stm

China's leaders should not relax their efforts to cool the country's fast-growing economy, the International Monetary Fund has warned.

The IMF's latest health check on China's booming but unbalanced economy found that "a soft landing...is not yet assured".

It urged China to introduce a more flexible exchange rate without delay.

The IMF now expects China to grow 9% in 2004, beating an earlier forecast of 8.5%, before cooling to 7.5% in 2005.

snip>

'Tackle the yuan'

With some signs of falling foreign investment and success at lowering inflation, the IMF urged Beijing to act to loosen the yuan's peg to the US dollar, which has been criticised for unfairly cheapening China's exports.

"In view of the present favourable circumstances, it would be advantageous for China to make a move towards initial exchange rate flexibility without undue delay", the IMF said.

Inflation has been pushed up by billions of dollars of foreign investment pouring into China, bank lending to domestic firms to build new plant, and shortages of farm produce.

more...

[54anickel]

23. German Business Confidence Falls on Oil Cost Concern

http://quote.bloomberg.com/apps/news?pid=10000085&sid=aYFn1Wdz.znc&refer=europe

Aug. 26 (Bloomberg) -- German business confidence dropped for a third month in four in August as rising exports failed to revive investment or consumer demand and as record oil prices threatened to hamper a recovery in Europe's biggest economy.

The Ifo institute's confidence index, based on a survey of 7,000 companies, declined to 95.3 from 95.6 in July. Economists predicted a reading of 95.1, according to the median of 38 forecasts gathered by Bloomberg. The index has retreated from a three-year high of 97.5 in January.

Germany's domestic economy shrank in the second quarter as companies cut investment and consumer spending stagnated, leaving growth reliant on exports. The 50 percent gain in oil prices this year may reduce the chances of a rebound in consumer spending, as households postpone purchases to spend more on gasoline. Inflation accelerated to 2 percent in August.

``The pessimism that prevails among the people is also prevalent in the economy,'' Karl-Heinz Streibich, chief executive of Software AG, a German database software maker, said in a telephone interview from his office in Darmstadt. ``I wish there were more enthusiasm.''

more...

[54anickel]

24. Market WrapUp by Mike Hartman 08.25.2004

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

snip>

Consistent with slowing home sales, the Mortgage Bankers Association said its application index fell 6.3% for the week ended August 20th. The purchase index fell 5.0% and the re-finance index dropped a larger 8.0% with the 30-year fixed rate mortgage virtually unchanged at 5.78%. According to a Bloomberg article yesterday, “Federal Reserve policy makers don’t have the data to accurately tell whether U.S. home values are overheating.” In Great Britain and Australia government officials have identified rapidly rising house prices as a big reason to raise interest rates, but U.S. officials don’t seem to have the data. Mr. Greenspan says, “House price increases have outstripped gains in income and rents in recent years” and went on to say “(It) raises the possibility that real estate prices, at least in some markets, could be out of alignment with the fundamentals.” With regard to the stock market, Mr. Greenspan said they can’t identify a bubble until it pops! It sounds like he is saying the same thing about the housing market today.

By saying that real estate prices could be out of alignment with the fundamentals is just like warning of “Irrational Exuberance” prior to the NASDAQ crash. Home prices are going up much faster than incomes and jobs are being shipped overseas due to corporate outsourcing. I would bet home prices adjust lower before incomes go blasting through the roof here in the USA. With the added pressure of rising interest rates, where will the money come from to buy bigger, newer, and nicer homes? When housing truly slows down in a big way, it will be all over the newspapers with how to get rich buying foreclosed real estate. I suppose the high-flying markets like Southern California and Florida will see the greatest downside volatility when the incomes just can’t go any farther to make bigger mortgage payments. This is why the Fed will do everything in their power to keep interest rates low for as long as possible.

Dollar Rallies Ahead of Treasury Auction

One Bloomberg article that caught my attention this morning talked about the stall in the three-day dollar rally. Frankly, I’ve been wondering what external pressures have been propelling the dollar higher this week. The article says, “The U.S. currency rose Tuesday after Federal Reserve Chairman Alan Greenspan …said the global economic recovery is becoming '“stronger and more sustainable.”' Monday it was Fed Governor Ben Bernanke saying the economy is on the mend with consumer spending on the increase again. The Fed rhetoric was enough to push the dollar stronger Monday and Tuesday, but the weaker than expected durable goods orders and new home sales stopped the dollar’s run.

It seems to me all the good tidings from the Fed came in the two days prior to another $24 billion being auctioned by the U.S. Treasury, since just today they sold that boatload of 2-year notes. The auction went off with a yield of 2.49% and demand was considered weak with a bid-to-cover ratio of 2.19 to one following last month’s bid-to-cover of 2.36 to one. Indirect bidders, which include foreign central banks, bought 45.5% of the total debt sold. I have to wonder if all the good news coming from the Fed is what moved the dollar higher, or if foreign entities were actively buying dollars in the FOREX market prior to purchasing the Treasury paper at today’s auction. I suspect we will see the dollar begin to move lower again, especially with any more reports of a weakening economy.

more...

[loudsue]

25. So all the numbers look 'good'???

I'm sure glad SOMEBODY'S got some money these days! I still can't find any work to speak of....CERTAINLY nothing that pays in the range that I was previously accustomed to!

And I'm glad some consumers have money to spend....I won't be able to help out with this little 'rebound' we're experiencing. Of course, I'll still be spending one heckuvalot on gas while I'm looking for work!

<loudsue scratches head while looking at market reports>

:kick:

[54anickel]

26. Angels of Deception, Part 2

http://www.321gold.com/editorials/mackenzie/mackenzie082504.html

Derivatives square up twice a year, March and September. And by my simpleton math, the Gross value of the OTC Derivatives Market has now exceeded one-half a Quadrillion Federal Reserve Notes (FRNs, Dollars don't really exist). Of course we won't know until the Bank of International Settlements accounts for the reckless amount of speculative "Moral Hazard" insurance purchased for 2004.

Can't help but think of those poor Dutch settlers who wandered out into the bays of the West Indies to collect fish in the absence of a tide in their respective harbors, only to be drowned by the ensuing tsunami. Earthquakes were not well understood then and I find very little reason to believe the scope and scale of the existing, UNREGULATED Over the Counter Derivatives Markets are understood all too well today.

The Nobel Laureate who managed to blow up LTCM is still in business today, chilling and grilling with the rest of levered speculators, placing even larger bets on outcomes with absolute clarity. Master Chef's one and all, cooking up a dizzying array of malnourished and empty entrées, Bobby Flay condiment squirt bottles in hand. Those dishes must look appealing, but I suspect, much like the daily cheese platters served up maintain the current levels in the equities markets, too much dairy can be a bad thing.

snip>

Yesterday's scorched earth policies clearly burned a lot of brush surrounding the FED's camp as Mr. Magoo (windsurfism) clouded the sky with smoke once again:

"Greenspan sees rebound in China in second half '04"

"Greenspan says euro zone economy remains 'sluggish' "

"Greenspan says Japan growth may be 'self-sustaining' "

"Greenspan sees chance of hard landing in China"

...followed by more billowing plumes of WMDs

"Greenspan can't say if housing bubble due to poor data"

"Greenspan: More data needed to declare a housing bubble"

[54anickel]

27. Some Buyers Go for Gold as Oil Rises

http://www.thestreet.com/pf/stocks/melissadavid/10179891.html

Investors hoping to cash in on black gold might want to gamble on the shiny kind as well.

Bob Howard, a long-time energy bull, thinks so, anyway. Until recently, Howard ignored all the talk about unsustainable energy prices and pushed subscribers of his investment newsletter, Positive Patterns, toward stocks like ChevronTexaco (CVX:NYSE) and -- even better -- beaten-down Royal Dutch/Shell (SC:NYSE) .

But he found himself cooling on the sector about the same time the media started treating it as the next hot thing. So when oil prices kept setting new highs last week -- and failed to pull oil stocks up with them -- Howard was far from consumed by the development. He was contemplating the likes of Placer Dome (PDG:NYSE) and Newmont Mining (NEM:NYSE) instead.

"I think the next thing to go up is gold," explained Howard, who doesn't invest in the stocks he covers in his newsletter. "Just look at what happened when oil prices went up in the '70s. Gold followed."

Howard still tells his clients to hold onto their solid energy stocks and maybe even scoop up a little more Shell while it's down. He remains convinced that high energy prices, driven by incredibly tight supplies, are here to stay. Thus, he scoffs at common Wall Street models that rely on $30 oil -- a steep plunge from the near $50 seen last week -- to forecast future earnings. He is convinced that oil prices will "normalize" at a much higher level and, when they do, analysts will be forced to change their models and jack up both their profit estimates and their target prices for the energy stocks they follow.

more...

[54anickel]

28. The End of an Era

http://www.321gold.com/editorials/maund/maund082604.html

The title of Leo Tolstoy's epic tome "War and Peace" encapsulates in just three words, two of the great polarities of human existence. Periodically, nations or ethnic or religious groups find an excuse to go to war with other nations or ethnic or religious groups, the result of which is a reduction in the population and widespread destruction. Economic, social and technological advance, which might be thought to improve matters, and break mankind out of this cycle do not, because the primal nature of man remains the same as it has been for thousands of years - biological evolution is a slow process. The argument that technological advance makes wars less likely is demonstrated to be a fallacy by the occurrence of the 2nd World War, which happened not long after the development of the aircraft, radio and television, among other things. These new technologies were simply exploited in the war effort, the aircraft being used to bomb cities flat and even nuke them, and the radio being used to disseminate propaganda.

The great Russian economist Nikolai Kondratieff developed a theory which illustrated that the cycles of war and peace synchronize with and are related to the inevitable boom and bust cycles that occur in capitalist economies, and to the collective psychology that prevails among the population during different stages of the cycle. A graphic of the Kondratieff cycle is shown below.

On this chart we can see that the lows in the Kondratieff cycle occur about every 50 to 60 years, and are accompanied by a deflationary depression. These cyclical lows are then followed, after an interval of some years, by major wars, which, although resulting in the death of millions, appear to have a stimulating effect on the economy. As is plainly obvious on this chart, we are now due - overdue - a cyclical trough, meaning a deflationary depression.

Although we have not yet plunged into the trough of a depression, it is fascinating to observe the changes in collective psychology, particularly in the United States, associated with the down part of the cycle. The United States is already in the grip of a collective psychosis over terrorism, and, as the economy deteriorates, this promises to get a lot worse.

What's going on? Why the apparent mismatch between the economy (here we are referring specifically to the United States) and the prevailing psychology of the nation? The answer is simple. The economy is on steroids. Greenspan and the Fed have decided to attempt to override the natural economic cycles by means of an unprecedented expansion of credit and explosion of the money supply, which are already manifesting as inflation that is expected to worsen considerably, possibly developing into hyperinflation, before the inevitable deflationary implosion. There can be only one outcome resulting from such hubris - financial disaster. Since one has to assume that these people have the intelligence to realize that this is so, it begs the question "Why are they doing this - what are their motives?" The straightforward answer is that they are propping up the economy long enough to get the Republican Neocons re-elected, but even if that were true would they really want to have to be the ones to sort out the mess resulting from all this? It's an unanswered question - but I know that some writers are of the view that the reason that they are doing it is to deliberately collapse the economy, mop up all unsecured assets on the cheap, and snare an indebted population, who will thereafter effectively be indentured serfs.

more...

[54anickel]

29. Houston, we have a Yukos problem

http://www.atimes.com/atimes/Central_Asia/FH26Ag03.html

BRUSSELS - The crucial consequence of Moscow's campaign to nail Yukos, the country's leading oil producer, is the end of any possible energy alliance between Russia and the US, according to European Union diplomats and officials.

Yukos' former golden boy, chief executive Mikhail Khodorkovsky, languishing in jail since October 2003, was President George W Bush's and Vice President Dick Cheney's man. But way beyond his personal fate, it is the symbol of the fall of Yukos - no hope of cheap Russian oil for America and extra profits for ExxonMobil, ChevronTexaco and ConocoPhillips - that is really rattling markets and driving oil prices higher.

Soon after September 11, when the Bush administration seriously started looking for major oil sources other than the Saudis, a deal with Russian oligarchs might have seemed the ideal solution. In May 2002, at a summit in Moscow, Bush and Russian President Vladimir Putin forged what looked like an alliance, further developed in an "energy summit" held in a Houston steel-and-glass tower in October of that year. The deal was straightforward: Washington/Houston injects tons of dollars into the Russian oil sector, and Russia up to 2010 becomes America's number one supplier. The key Russian partner in this deal was to be Khodorkovsky - the son of a Moscow worker turned king of business and head of Yukos, producer of 1.7 million barrels of oil a day and the largest Russian oil company ahead of LUKoil.

Khodorkovsky could not but be a Western darling. His hero was Standard Oil's founder John Rockefeller. He installed five Americans on the Yukos board. The company's public relations was handled by an American firm. He created a charity, Open Russia, which boasted Henry Kissinger and Lord Rothschild as chairmen. Wall Street loved him, because he guaranteed fortunes to Yukos' shareholders, especially himself (he owns 44% of the shares).

In April 2003, as the US was taking over Iraq, Yukos was about to take over one of its rivals, Sibneft. This would have created a US$35 billion company, the fourth-largest private company in the world and the first in Russia, with oil production similar to Kuwait's (2.3 million barrels a day). But just as Khodorkovsky was entertaining the idea of selling control of Yukos to ChevronTexaco, Putin struck. In October, Yukos was billed $3.4 billion for back taxes for 2000, its assets frozen and Khodorkovsky was in jail and on trial on separate charges of tax evasion and fraud.

Russia's shock and awe

more...

[UpInArms]

30. 12:03 EST numbers and (dated) blather

Dow 10,170.09 -11.65 (-0.11%)
Nasdaq 1,852.89 -7.83 (-0.42%)
S&P 500 1,104.08 -0.88 (-0.08%)
10-Yr Bond 4.230% -0.031

11:30AM: Indices remain stuck in narrow trading ranges as participants keep to the sidelines for the most part... The current disposition of the indices is reflected in the breadth figures, which are roughly even at the NYSE and favor decliners by an 8-to-5 margin at the Nasdaq... Krispy Kreme (KKD 13.75, - 1.61) is an individual story of note as the doughnut maker is getting clobbered after missing the Q2 (Jul) consensus EPS estimate of $0.22 by ten cents and cutting its sales growth outlook for FY05 to approx. 15% from prior guidance of 20-25%... NYSE Adv/Dec 1501/1442, Nasdaq Adv/Dec 1080/1673

dunked by a donut?

[54anickel]

31. FASB’s Ineptness “Exposed”

http://www.fallstreet.com/aug2504.php

By using off-balance-sheet schemes a company can bring inert assets back to life, gain access to cheap financing, and disperse shareholder risk. However, the benefits of off-balance-sheet dealings can be overshadowed by the pitfalls -- namely Enron.

Some, namely the Fed, would argue that Enron is an isolated blow up that arrived not necessarily because of the company’s off-balance-sheet dealings but because of blatant fraud. However, this argument is akin to saying that since banks will inevitably be robbed they shouldn’t keep their doors locked. To be sure, Enron’s shady off-balance-sheet practices would not have been allowed grow so large if not for GAAP allowing them to. As former SEC Chief Accountant, Lynn Turner, previously pointed out, the issue of consolidation has been festering for some time.

“In 1982, the FASB undertook a project on consolidation. One of my sons who was born that year has since graduated from high school. In the meantime, investors are still waiting for an answer, especially for structures, such as special purpose entities (SPEs) that have been specifically designed with the aid of the accounting profession to reduce transparency to investors.” Senate Banking Committee ~ February 26, 2002.

Following Enron’s collapse the spotlight shined directly on off-balance-sheet financings, and - for a moment - it seemed like progress was finally going to be made. However, FASB’s FIN 46 (and revision last December) came and went in 2003 and companies have not been rushing to consolidate. Rather, Post-Enron, Structured Finance Addiction Hasn't Ebbed

snip>

Waiting For The Next Enron

After waiting more than 20-years to tackle the issue of consolidation FASB has failed to introduce standards rigid enough to make off-balance-sheet activities more transparent to investors. Accordingly, all that can be hoped for is that new standards – which are focused on trying to unmask “primary beneficiaries” and raising the minimum outside equity investment in an SPE to 10% from 3% - are enough to deter companies from recklessly concealing large risks.

For its part, the SEC is not impressed. Rather, the SEC is already looking into why companies “appear to be ignoring accounting rules designed to prevent Enron-style hiding of debt.” As for the Fed, it is obvious that Greenspan and company are looking the other way. After all, remember that LTCM wasn’t enough for Greenspan to back hedge fund and/or OTC regulation, and Enron barely made the Fed flinch (as a CFO article suggested earlier this year, the mandate of the Fed is starkly different than that of the SEC).

more...

[54anickel]

32. Neo-Cons Rethink Iraqi Fiasco (linked at 321gold)

http://www.truthout.org/docs_04/082604A.shtml

One of America's friskiest neo-conservatives, young Michael Rubin leads a heady life. While still in his twenties, he did his Ph.D. on Iran, Iraq, and the Middle East, sat in on meetings of the Bush transition team, and worked in the Pentagon's Office of Special Plans, which repackaged as "intelligence" the fables that Iraqi exiles like Ahmed Chalabi conjured up to draw America into war.

Dr. Rubin also served in Iraq as an adviser to Jerry Bremer's Coalition Provisional Authority, and boasts that he was the only one of his colleagues to live outside the heavily fortified American security bubble. This allowed him to know ordinary Iraqis, for whom he frequently presumes to speak.

His latest blast on their behalf might seem a shocker, coming as it does from a certified neo-con and appearing online last week in William Buckley's National Review. In an increasingly segmented media world, where we too easily hear and see only those views that reinforce our own, I regularly surf the other side of the political spectrum, testing my own ideas and hoping to learn something new. I rarely expect to agree.

"Losing the Shia," Rubin's headline screamed. "Iraqi Shia see a U.S. betrayal, and frankly, they should."

"Any semblance of a ceasefire evaporated today as fierce fighting erupted around the Shrine of Imam Ali, Shii Islam's holiest site," he wrote. "Even if Iraqi forces lead the charge into the Shrine of Imam Ali, Iraqi Shia will blame the U.S. for any damage. Even if a peaceful solution is found, the U.S. will have lost out."

more...

[54anickel]

33. How Long Will Foreign Central Banks Keep Financing Our Treasury Deficit?

http://www.gold-eagle.com/editorials_04/kasriel082504.html

In the three weeks ended August 18, holdings of U.S. government and agency securities by foreign official accounts (mostly foreign central banks) in custody accounts at the New York Fed increased by $34.7 billion. In the 52 weeks ended August 18, these custody holdings increased $328.3 billion (see Chart 1). Primarily, Asian central banks have been the buyers of these securities. Why have these Asian foreign central banks gone out of their way to mightily help finance our federal and current account deficits? Is it a vote of confidence in the management of the U.S. economy? Hardly. These Asian central banks have become the marginal buyers, or de facto buyers of last resort, of excess U.S. dollar balances in the global economy. If these Asian foreign central banks had not purchased these greenbacks and recycled them into U.S. government and agency securities, the dollar would be lower in value vs. their currencies and U.S. interest rates would be higher. The reason Asian central banks have been willing to help us out is that they have perceived that their economies would suffer if the dollar were to sink too rapidly in that their exports would be adversely affected.

snip charts>

Is there something that could diminish the willingness of foreign central banks to keep supporting the dollar and our government bond market? You bet - inflation. As shown in Chart 2, after several years of declining wholesale prices, those prices are now advancing at a 1.6% annual rate in Japan. Although Japanese consumer prices still are falling, the rate of decline has slowed. It is only a question of time before rising Japanese wholesale prices morph into rising Japanese consumer prices. A rising yen against the dollar would temper the rise in Japanese wholesale prices, especially rising crude oil prices in yen terms. My bet is that by midyear 2005, the Bank of Japan will have lost its appetite for dollar and U.S. government securities. At that point, the dollar is likely to take a dive and so, too, will U.S. Treasury prices.

[UpInArms]

34. 12:36 numbers and blather

Dow 10,179.97 -1.77 (-0.02%)
Nasdaq 1,856.07 -4.65 (-0.25%)
S&P 500 1,105.29 +0.33 (+0.03%)
10-Yr Bond 4.225% -0.036

12:25PM: With the way the market has behaved today, you could characterize the 10-point gain in the Dow since the last update as a rally... That would be overstating things, of course, yet the emerging leadership of the oil drilling/ service groups and the modest, but broad- based gains, in the financial sector have provided a bit of a boost for the broader market... NYSE Adv/Dec 1527/1548, Nasdaq Adv/Dec 1085/1770

12:00PM: Thus far the stock market has had the appearance today of being very much in vacation mode... To that end, the indices have held close to the unchanged mark since the start of trading and volume at the NYSE (currently 426 mln shares) and the Nasdaq (currently 521 mln shares) is downright anemic as neither buyers nor sellers have shown much conviction... Accordingly, industry leadership has been limited on both sides of the aisle, which is making it difficult for the indices to make a meaningful move in any direction...

The modestly negative disposition can be attributed to profit taking activity amid the recent rebound effort and a relatively weak showing from the closely-followed semiconductor stocks... The latter have slipped in the wake of Banc of America Securities cutting estimates and price targets for several names, including industry leader Intel (INTC 21.78, -0.17), and noting that it believes the cyclical peak in semis has prematurely come and gone... Separately, a sense of apprehension ahead of the mid-quarter update tonight from chip equipment maker Novellus Systems (NVLS 24.51, -0.63) may also be holding the group back...

[54anickel]

35. Investors sue Citigroup over Enron-linked securities

http://www.usatoday.com/money/industries/energy/2004-08-26-citi-sued_x.htm

NEW YORK (Reuters) — Citigroup (C) faces a lawsuit from angry investors who say they were defrauded in a "massive scheme of deception" when they bought securities tied to the credit-worthiness of bankrupt energy trader Enron (ENRNQ).

The suit, brought by Bank of New York (BK) on Monday in New York State Supreme Court on behalf of numerous investors in Enron-related securities, is the latest in a spate of actions aimed at recovering billions of dollars lost when the company collapsed into bankruptcy in 2001.

Plaintiffs include well-known distressed debt funds Angelo Gordon & Co. and Appaloosa Investment, who charge in the 77-page complaint that Citigroup concocted a fraudulent scheme to raise billions of dollars from the sale of notes called "Yosemite" securities.

Citigroup, the investors said, then used the funds to make "disguised" loans to Enron "to reduce its own Enron credit risk, prop up Enron, cover up Enron's failing financial condition and generate significant fees in the process."

more...

[54anickel]

36. Poverty spreads

http://money.cnn.com/2004/08/26/news/economy/poverty_survey/

WASHINGTON (CNN) - The number of Americans living in poverty jumped to 35.9 million last year, up by 1.3 million, while the number of those without health care insurance rose to 45 million from 43.6 million in 2002, the U.S. government said in a report Thursday.


The percentage of the U.S. population living in poverty rose to 12.5 percent from 12.1 percent -- as the poverty rate among children jumped to its highest level in 10 years, the Census Bureau said in an annual report. The rate for adults 18-to-64 and 65-and-older remained steady.

The bureau also said the share of aggregate income for the lowest 20 percent of Americans fell to 3.4 percent from 3.5 percent.

Democratic politicians were quick to seize on the new data, and none was quicker than their presidential nominee, Sen. John Kerry, D-Mass. He said the statistics "underscore the fundamental choice at stake in this election."

snip>

Sen. Judd Gregg, R-N.H., released a statement noting that the Census data covered the year 2003 and "does not include the full effect of the president's tax relief." :eyes:

[UpInArms]

37. I can hardly wait

for the full effects to kick in (NOT!)

Census data covered the year 2003 and "does not include the full effect of the president's tax relief."

We shall be scratching in the dirt like chickens looking for a grain of seed to eat - forget freakin' planting it!

These buffoons are definitely on a course to destroy this country; of that, I am convinced.

[54anickel]

38. 2:09 Yawn

Dow 10,168.83 -12.91 (-0.13%)
Nasdaq 1,850.76 -9.96 (-0.54%)
S&P 500 1,104.08 -0.88 (-0.08%)
10-yr Bond 4.227% -0.034
30-yr Bond 5.018% -0.032
NYSE Volume 660,448,000
Nasdaq Volume 785,861,000

1:30PM: Volume is extremely light again today, and it may not pick up until after Labor Day...with the Republican convention starting Monday in New York, the associated congestion may lead even more traders than normal to take the last week of summer off...today's action is heading towards barely 1.0 billion shares on the NYSE...the indices remain in very narrow ranges without even much impact from swings in the price of oil, which is now at $43.30, -$0.17 on the October futures contract...NYSE Adv/Dec 1657/1470, Nasdaq Adv/Dec 1166/1758

1:00PM: No change in the overall tone in the past half hour as the indices are moving in some of the tightest ranges seen all year... To wit, a mere 33 points is the range between the Dow's high and low today... Speaking of the Dow, Merck (MRK 44.90, -1.12) is the only component moving more than a point; its weakness is related to reports that Kaiser Permanente, one of the nation's largest HOMs, is reconsidering its use of Vioxx after a major study, led by an FDA researcher and based on data from its patients, found that the Merck drug may increase the risk of serious heart problems...

Merck, as to be expected, issued a statement saying it strongly disagrees with the observational analysis...NYSE Adv/Dec 1674/1434, Nasdaq Adv/Dec 1172/1720

[54anickel]

39. 3:02 update Sort of an...Eyore kinda day

Dow 10,174.29 -7.45 (-0.07%)
Nasdaq 1,853.56 -7.16 (-0.38%)
S&P 500 1,105.03 +0.07 (+0.01%)
10-yr Bond 4.227% -0.034
30-yr Bond 5.02% -0.03
NYSE Volume 782,274,000
Nasdaq Volume 912,943,000

No blather update since 1:30

Advances & Declines
NYSE Nasdaq
Advances 1711 (50%) 1156 (36%)
Declines 1513 (45%) 1846 (58%)
Unchanged 137 (4%) 165 (5%)

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

Up Vol* 390 (52%) 289 (32%)
Down Vol* 327 (44%) 575 (65%)
Unch. Vol* 22 (2%) 15 (1%)

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

New Hi's 92 45
New Lo's 12 33

[54anickel]

40. Boeing in $7.5 bn deal with SIA

http://www.business-standard.com/common/storypage.php?hpFlag=Y&chklogin=N&autono=165371&leftnm=lmnu0&leftindx=0&lselect=0

SIA receives offers from both Airbus (the A330-200) & Boeing (the 7E7) for its regional routes.

Singapore Airlines (SIA) yesterday said it would buy up to 31 long-range Boeing 777s in an order worth up to $7.5 billion, but rejected a seperate proposal to buy the new 7E7 Dreamliner.

SIA said it received offers from both Airbus and Boeing for the airline’s regional routes, namely the A330-200 and the 7E7 respectively.

But while SIA has said in the past it thought the 7E7 was “suitable” and it might order as many as 50 aircraft from Boeing this year, it said in a statement yesterday that “the proposals did not meet SIA’s financial criteria”.

Although SIA said yesterday that it will continue to use the 777 to serve its regional routes, the decision not to buy the 7E7 leaves the door open for Airbus to compete for SIA’s regional business. SIA is one of the launch customers for the 555-seat Airbus A380 super jumbo.

SIA, which is seen as a bellwether for procurement by other carriers, is believed to be seeking performance guarantees before signing up for the 7E7. The airline won similar guarantees from Airbus in negotiations to become a launch customer of the A380.

more...

[54anickel]

41. Nigeria hits Shell with £840m compensation claim

http://business.scotsman.com/index.cfm?id=1000072004

SHELL has been hit by an £840 million compensation claim from the Nigerian government only 24 hours after being fined in Britain and the United States.

The oil giant, which was this week fined a total of £84m for "unprecedented misconduct", has come under fire from pollution-hit communities in the oil-rich Niger Delta.

The demand from the Nigerian senate follows a petition by the Ijaw tribe in the southern Bayelsa state, claiming cash to cover health problems, economic hardship and avoidable deaths resulting from oil spillages dating back to 1956.

Shell admits that in 2002 there were 262 oil spill incidents in Nigeria, involving 2700 tonnes of crude oil. Analysts claimed the dispute would be settled in court, but added that Shell and Nigeria’s state oil company, which operate a joint venture, would be forced to increase environmental spending in the country.

more...

[54anickel]

43. Oiling the Wheels of Inflation

http://www.321gold.com/editorials/benson/benson082604.html

It's time for a paradigm shift. Just when the consensus view has begun to focus on the buying of United States' Treasuries by Asia to finance our country's trade and budget deficits (to hold their currencies down), the price of oil pops up. The financial markets are now left to try and sort out what it all means and many economists are lowering their forecasts for the United States and world economic growth.

We agree that in the very short run, rising oil prices act like a tax by allowing dollars to pile up as Saudi holdings of US Treasury securities. However, it is naive to stop there when it comes to economic consequences. If we trace the cycle of cash and the response by central banks, in a short period of time the world could see an increase in world spending and higher general inflation, with an increased likelihood of major currency realignment.

The problem for world economic order has been the Asian propensity to save. Instead of spending the dollars we give them, they sit tight on the cash and allow the funds to pile up as investments in US Treasuries. To a large extent, if oil prices remain high, this problem will go away.

If you look at countries that produce oil such as Mexico, Nigeria, Venezuela, Iraq, Iran and Indonesia, you'll realize they will want to spend every last oil dollar that comes in. Moreover, even the Saudis and small Gulf States have a propensity to spend (the motto of the 3000 Saudi princes should be "there is no amount of money that can't be pissed away"). Sure, in the short run, Russia and the Gulf oil producers will buy more of our Treasuries; however, they will gear up their spending.

The big immediate change is the trade balance for Asia, particularly China and Japan, which are massive importers of oil. If you think it's expensive to fill up at the gas pump in our country, think about China. Asia will be spending a lot more of their dollars on oil and a lot more of the cash will go to a country that immediately spends it. This will result in less excess dollars to buy US Treasury debt because cash will be needed to buy oil today. Countries holding US Treasury debt may begin to realize it would have been wiser to buy something other than dollar assets as a store of value now that the price of oil can go over $40 a barrel. Just a short time ago, when other countries were buying our Treasuries with their hard-earned dollars, they were counting on buying a barrel of oil for $25 - $30.

more...

[54anickel]

44. Closing numbers, in case anyone's interested

*crickets*

Dow 10,173.41 -8.33 (-0.08%)
Nasdaq 1,852.92 -7.80 (-0.42%)
S&P 500 1,105.09 +0.13 (+0.01%)
10-yr Bond 4.227% -0.034
30-yr Bond 5.021% -0.029
NYSE Volume 1,023,687,000
Nasdaq Volume 1,162,656,000

3:25PM: Stock market improves its stance some, but a weak technology sector keeps it from rallying much... The market has seen a bit of a reversal of the action seen over the past few sessions - in that groups like energy and retail have led the market and that semiconductor has trailed... Its weak performance can be seen in the bearish breadth figures at the Nasdaq, and the fact that down volume outpaces up volume there... Tonight, the big event is Novellus's (NVLS 24.64 -0.50) mid-quarter update... The market will be looking for $0.39 in Q3 (Sept) EPS and $406.7 mln in sales...NYSE Adv/Dec 1766/1467, Nasdaq Adv/Dec 1192/1820
2:30PM: Flat trend continues amidst low volatility...oil is back to down 32 cents, which largely balances the negative news: poor earnings from Krispy Kreme (KKD 13.75 -1.61), disappointing same-store sales from Stabucks (SBUX 43.25 -2.79), and a negative comment on the semiconductor sector from Bank of America...the SOX index is down 1.2%, which has the Nasdaq underperforming...NYSE Adv/Dec 1592/1599, Nasdaq Adv/Dec 1114/1886

2:00PM: Stocks barely budge even as oil prices rebound and are now up 16 cents...neither a decline in oil prices or an increase has had much perceptible impact on the market...with that in mind, it is hard to see the scheduled releases the rest of the week having much impact either...after the close today the only earnings report of note is Tech Data (TECD) and there are no reports tomorrow...a revision to second quarter GDP is due tomorrow morning, as it the revised August Michigan Sentiment index...

both are simply revisions, however, and probably won't vary much from the original report or generate much reaction...


Advances & Declines
NYSE Nasdaq
Advances 1777 (52%) 1229 (38%)
Declines 1485 (43%) 1837 (56%)
Unchanged 147 (4%) 159 (4%)

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Up Vol* 518 (54%) 371 (33%)
Down Vol* 390 (41%) 724 (65%)
Unch. Vol* 38 (4%) 10 (0%)

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New Hi's 101 50
New Lo's 15 35


Have a great evening :hi:

[loudsue]

45. -8.33.....Kind of a 'ho-hum' day on the street....

:hi: Thanks, Marketeers! :hi:

"Another day older and deeper in debt"

:kick::kick: