STOCK MARKET WATCH, Tuesday 31 August

[ozymandius]

Tuesday August 31, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 142
DAYS UNTIL W* GETS HIS PINK SLIP 63
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 263 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 317 DAYS
WHERE ARE SADDAM'S WMD? - DAY 530
DAYS SINCE ENRON COLLAPSE = 1013
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 30, 2004

Dow... 10,122.52 -72.49 (-0.71%)
Nasdaq... 1,836.49 -25.60 (-1.37%)
S&P 500... 1,099.15 -8.62 (-0.78%)
10-Yr Bond... 4.19% -0.04 (-0.92%)
Gold future... 410.00 +4.50 (+1.10%)





GOLD, EURO, YEN and Dollars

---

PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

[ozymandius]

1. Good morning all.

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

Thanks to everyone who has been stable participants during the doldrums of the stock trading season. The giants of trading are away for the convention and outside NYC for the sweltering summer days. So it would come as no surprise that not much happens during the mid- to late-summer season. But yesterday suggests differently.

Let's see if the big players tell the minders to cool it. There's nothing more annoying than having your house refurbished by a care-taker.

It is time for me to get to work (for the last day). I am supposed to turn in my keys this afternoon unless the landlord is willing to grant an extension to sweep and mop.

Have a great day Marketeers!

Ozy :hi:

[54anickel]

5. Have a great day Ozy. Hope you get the chance to do something

nice for yourself after turning in your keys to the shop. A sense of closure in one chapter of your life is best followed by a positive experience as the opening to the next chapter.
:hi:

[trogdor]

2. My prediction - another down day.

I just pulled this out of my ass.

Dow -40 pts., NASDAQ -12 pts. S&P -6 pts. The whackos are talking today at the RNC (I think), so we may see the piehole effect in action.

[54anickel]

6. Wonder what gave the futures a bit of a bump up? I see the reports

won't be released until 10:00 instead of 8:30 (according to the blather). Wonder if they got a sneak-peek? :shrug:

[UpInArms]

3. daily dollar watch

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

Last trade 89.36 Change -0.33 (-0.37%)

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=1093941577-9e32d306-15800

Dollar steady as market awaits this week´s key US data

Dollar steady as market awaits this week's key US data LONDON (AFX) - The dollar was little changed as trading remained cautious ahead of key US data this week, with particular focus on August jobs figures due on Friday

Also important will be tomorrow's national ISM survey of US purchasing and supply managers. The recent Empire State and Philly Fed surveys have already indicated that the ISM number is likely to be weak, though today's Chicago PMI data will provide further clues

"For the US dollar to rally this week both the ISM manufacturing survey and Friday's Employment Report need to allay investor fears that the US economy has lost significant momentum (and the oil price needs to keep falling)," said Steve Pearson, currency analyst at HBOS

Today's US consumer confidence figures will also be watched, though the market is likely to hang on until August non-farm payrolls figures on Friday provide direction, with trading expected to remain rangebound until then

The data is expected to be the main influence on the US Federal Reserve's interest rate decision on Sept 21, and will confirm whether or not the labour market has entered a weakening trend, CALYON analysts said

Non-farm payrolls data for July were hugely below the market's forecast and caused a heavy sell-off in the dollar. The numbers are viewed as notoriously difficult to predict, leaving investors unwilling to risk gambling on their outcome by taking positions ahead of their release

...more...

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=1093955190-9e32d306-25115

Forex - Dollar drifts lower ahead of key US data

LONDON (AFX) - The dollar drifted lower ahead of some key US data which may shed light on the outlook for the crucial labour market report on Friday

The slide lower comes amid some nervousness ahead of data this afternoon -- namely US consumer confidence and Chicago Purchasing Managers Index -- both for August, said Kamal Sharma at Dresdner Kleinwort Wasserstein

The risk is "assymetric" -- where lower-than-expected data is likely to weigh on the dollar heavily while stronger-than-predicted numbers only have a muted impact, he explained

The recent Empire State and Philly Fed surveys have already indicated weakness and today's Chicago PMI, in particular, will provide further clues

"The employment component of both data today will be closely watched for indications of how the non-farm payrolls turn out," he added

Marc Chandler, chief currency strategist at HSBC Bank USA, concurred, saying that the afternoon's data will help markets "fine tune" expectations for the the employment data on Friday

"After the recent string of disappointments, the market is well aware that the risks lie to the downside and this will likely ensure that the greenback will struggle to sustain even modest up-ticks," he added

Dismal job creation in data for the previous two months pushed the dollar lower against other major currencies

...more...

http://www.forbes.com/technology/ebusiness/feeds/ap/2004/08/31/ap1524159.html

Tokyo Stocks Close Lower, Dollar Down

Tokyo stocks fell Tuesday after disappointing industrial output data raised concerns that Japan's economy wasn't performing as well as investors had hoped. The U.S. dollar was down against the Japanese yen.

The Nikkei Stock Average of 225 issues closed down 102.74 points, or 0.92 percent, to 11,081.79 points. On Monday, the benchmark fell 25.06 points, or 0.22 percent.

The dollar was quoted at 109.61 yen at 3 p.m. Tuesday, down 0.53 yen from late Monday in Tokyo and below the 109.93 yen it bought in New York later that day.

High-technology and automobile shares led the market lower after the Trade Ministry said industrial production was flat in July compared to June. The result was less than the 1.1 percent increase forecast on average by economists surveyed by Dow Jones Newswires.

...more...

Reports due today:

Aug 31 10:00 AM
Chicago PMI Aug
report -
briefing.com anticipates 60.0
market anticipates 60.0
last report 64.7
revised -

Aug 31 10:00 AM
Consumer Confidence Aug
report -
briefing.com anticipates 103.5
market anticipates 103.4
last report 106.1
revised -

Tomorrow brings the auto sales numbers - so we will see how much that drop in Japan's production tells us.

Have a Great Day Marketeers!

[UpInArms]

4. Housing experts sound note of caution

Prices that exceed incomes could hurt Bay Area market

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/08/31/BUGAK8GVNO1.DTL

excerpt:

But in some high-priced regions, including the Bay Area, home prices have far outstripped household incomes, raising yellow flags that the market here might decelerate more markedly than the overall sector in the next few years.

Although U.S. sales and prices will remain robust next year, they probably will drop from their expected peaks this year, the fourth record year in a row, said the housing and mortgage economists. They offered their forecasts for the rest of 2004 and early 2005 in a teleconference sponsored by the Homeownership Alliance, a Washington coalition of 19 housing groups.

<snip>

"In San Francisco, the median home price is $648,000. That tells the story right there," said David Lereah, chief economist at the National Association of Realtors. "You need a very high median income to qualify for that mortgage. At some point, the cup has runneth over, and something has to give, and that may be prices."

<snip>

Complicating matters, the Bay Area has a large number of buyers who are taking out adjustable-rate mortgages, especially interest-only loans. While such loans are attractive because their monthly payments are lower than those for fixed loans at first, borrowers can be slammed with higher payments later if interest rates rise after the initial fixed period.

...more...

[54anickel]

8. "something has to give" Well it certainly can't be wages!!! We're in

that global "race to the bottom".

[Frodo]

10. SIX HUNDRED FIFTY THOUSAND DOLLARS!

And HALF of all the homes sold there go for MORE!?!?


Stunning.

[UpInArms]

12. and here is what you can have for $650K

SOLD!

202 Kings Road

"A hilltop retreat from the everyday stress of the city!"

Offered at $579,000

Sold For $650,000



but if you want to spend a little less:

SOLD!

300 Monterey Street

Brisbane

Two Bedroom One Bath

Zoned R-2

Two Car Detached Garage With Unfinished Room Above

Offered at $479,000

Sold For $455,000



or:

SOLD!

Two Bedrooms, One Bath with Spa Tub, Dining Room, Newer Roof, Remodeled Kitchen, Large Garage, Flat Yard with Views to San Bruno Mountain!

Offered at $489,000

Sold For $518,000

[54anickel]

15. HA! I was just starting to do the same search! n/t

[Frodo]

20. Yeah, I pulled up a bit of MLS information too

We're talking apartment-style condos for seven figures!

I thought that only New York had that? I knew the bay area had gotten bad, but not that bad.

Anyone who has lived there (and owned a home) for more than a decade or so should probably sell NOW and move east. They can probably retire.

[54anickel]

24. There was an article a couple of weeks ago that stated many were

doing pretty much just that. Selling and moving to the Midwest or Tennessee areas.

KoKo had brought up the question of what are they doing about a job when they make that move.

[Frodo]

29. Who would need a job?

With that kind of profit you can just retire in some cases.

I certainly can't see staying there for the job though I would certainly send around feelers before putting the house on the market. That's one of the reasons I moved away from a market that was not quite as "hot" as the one in question.

[54anickel]

32. Needing a job would depend on an individuals circumstances.

Even if you were to net out 500K after buying another home to live in, if you're not 65 there's medical, home and car insurance, property taxes, ever increasing living expenses in general, maybe the kids college tuition, etc. Where could you invest that principal that would give you a decent enough return to cover all those living expenses without having to chew up so much of that principal to the point that you outlive it? :shrug:

[Frodo]

37. Not "gold", that's for sure.

Just bringing up an old topic... :-)

I guess it wold depend on how old you were. 500k wouldn't get me there unless I was already in my mid 50s.

[Frodo]

16. All I can say is...

... people there must make a BUNCH of money!

I sure couldn't qualify for much more than a bungalow.

I love some of the sales terminology on the listings... "newer roof"

[KoKo]

42. I think both of the houses pictured needed some better landscaping.

Didn't look like the owners had put much time into the yard care and beautification of the property one is urged to do by the real estate folks who give tips to those looking to sell. :silly:

I guess in that kind of overheated market, one doesn't need to bother with that stuff anymore. :shrug: Part of the "new economy."

[54anickel]

28. The boom goes on

http://cbs.marketwatch.com/news/story.asp?guid=%7BD6D4F7BE-8E43-4590-9A8F-CA1A00A46C36%7D&siteid=google&dist=google

Following up on a first half of the year in which "anything that smacked of homeownership has done extremely well," the housing market should continue its four-year record run right through the end of the year, said David Seiders, chief economist of the National Association of Home Builders.

snip>

"The fundamentals are good. The reason interest rates are slightly higher is that we are in a growing economy rather than dealing with inflationary pressures," he added. "This is good news, because corporate profits are up 40 percent from two years ago, so companies are spending and jobs are being created. In the housing markets, this is largely neutralizing the effects of modestly higher interest rates."

snip>

In general, the markets where prices have risen substantially reflect areas where demand has far outpaced supply and are not indicative of a price "bubble," the economists said. But a handful of markets, where prices have soared and job growth has remained stagnant, may be due for a correction, they agreed.

snip>

Credit quality

Despite concerns that consumers are overleveraged on housing, Paul Merski, chief economist for the Independent Community Bankers of America, said the balance sheets for homeowners are strong.

"Credit quality continues to improve," he added.

The NAR's Lereah pointed out that while incomes have not necessarily kept pace with home prices, the percentage of income that homeowners devote to mortgage payments is actually near a historic low, at about 17 percent. In the 1980s, the figure was closer to 30 percent.

snip>

If there is trouble in the making, it could be in the form of the number of interest-only mortgages that are being underwritten today, according to Frank Nothaft, chief economist for mortgage agency Freddie Mac. (FRE: news, chart, profile)

more...

[54anickel]

7. Are we living in a fool's paradise?

http://finance.news.com.au/common/printpage/0,6093,10607487,00.html

Just when you thought it was safe to go back into the markets ... Robin Bromby takes a closer look

August 28, 2004

OIL down several days in a row, the stock markets in robust shape, interest rates low, the dividends keep lobbing in your bank account, the sun is shining and the living is easy.

Hold that thought - then consider a few less palatable ones. And hope that the US economy doesn't fall over - if that happens, China will find its exports piling up in warehouses, and we will find that Chinese factories don't need so many of our mineral exports.
Warren Buffett thinks the US economy is heading for a fall. This month his Berkshire Hathaway investment group lifted its foreign currency holdings to $US19 billion ($26.9 billion). Buffett is betting that the US dollar will plummet.

China is doing fine now, but this week the International Monetary Fund warned that the Chinese economy was at risk from a potential banking crisis.

Debt is everywhere. In the week to last Monday, the US public debt reached $US7,342,335,234,298.49. Nearly $US7 billion was added in one week, according to the Bureau of Public Debt. At another level, 22per cent of people in Shanghai, Beijing and Guangdong have credit cards. The global personal debt mountain just keeps growing.

But underpinning this mountain are foundations of questionable strength.

At the end of 2003, according to the Bank of International Settlements, world derivative contracts totalled more than $US234 trillion. Those derivatives represent many enormous bets and nothing more.

Add to this the fact that currencies, commodities, debt and stocks are heavily influenced by more than 19,000 secretive hedge funds and you start to sniff a hint of trouble waiting to happen.

more...

[The_Casual_Observer]

45. If you go on gambling and drinking, staying out all night

you're just living in a fool's paradise.

There is going to be one big ass hangover after the the dust settles on this bush madness. Everybody will be saying "I told you so".

[UpInArms]

9. pre-opening blather

briefing.com

8:28AM: S&P futures vs fair value: +0.9. Nasdaq futures vs fair value: -2.0. Still looks like a split open for the cash market as the futures trade hugs fair value... The day is shaping up as another day of lackluster trade with little on the earnings docket and volume light for the past week (yesterday marked the lowest volume of the year for the Nasdaq).

8:04AM: S&P futures vs fair value: +0.5. Nasdaq futures vs fair value: -3.0. Cash market set for a flat to slightly lower open in an extension of yesterday's slow slide lower, and this morning's losses in Asia (Nikkei -0.9%) and Europe (DAX Index -0.8%)... Economic data today will be released at 10 ET (as opposed to 8:30 ET) and both reports (August Consumer Confidence and the Chicago PMI Index) should prove influential in moving the market.

ino.com

The September NASDAQ 100 was slightly higher overnight as it consolidates below the 10-day moving average crossing at 1373.40. Stochastics and the RSI are overbought and are turning bearish signaling that a short-term is in or is near. Multiple closes below the 10-day moving average crossing at 1373.40 would confirm that a short-term top has been posted. If extends this month's rally, the 50% retracement level of the June-August decline crossing at 1415.25 is the next upside target. The September NASDAQ 100 was up 1.00 pt. at 1368 as of 5:46 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 higher due to light short covering overnight as it consolidates below the 50% retracement level of the June-August decline crossing at 1103.05 and is breaking out below the 10-day moving average crossing at 1099.51. Stochastics and the RSI are overbought and are turning neutral hinting that a short- term top might be in or is near. Multiple closes below the 10-day moving average crossing at 1099.51 would signal that a short-term top has likely been posted. If this month's rally resumes, the 62% retracement level of the June- August decline crossing at 1113.16 is the next upside target. The September S&P 500 Index was up 0.30 pts. at 1099.30 as of 5:50 AM ET. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

[54anickel]

11. Oil Falls as Hedge Funds Rush to Exit

http://www.reuters.com/newsArticle.jhtml?jsessionid=I1GSYB4PO5T3KCRBAEOCFEY?type=businessNews&storyID=6111587

LONDON (Reuters) - World oil prices fell again on Tuesday as Iraq restored oil exports and hedge funds continued the rush to take profits from record highs.

snip>

"Funds are being forced out but many of them still have deep long positions," said brokers Refco of the investment funds who helped spur U.S. crude to a record high of $49.40 on Aug. 20.

Exports of southern Iraqi Basra crude ran near full capacity at 1.7 million barrels a day after repairs following sabotage attacks and the first shipment for three months of northern Iraqi Kirkuk crude was loading at Turkey's export terminal Ceyhan.

An Iraqi official said Baghdad aimed to sell up to 300,000 barrels per day of Kirkuk crude via term contract deals. That was read as a sign Iraq is having some success in thwarting attacks that have all but idled exports from its northern pipeline since the U.S.-led war began in March last year.
:eyes: Didn't I just read there have been 101 attacks to date? Why is he only mentioning the northern pipeline?

snip>

Weekly U.S. government inventory data due on Wednesday is forecast in a Reuters poll to show an average increase of 1.2 million barrels in crude stocks in the week to Aug. 20 on heavy imports.

Predictions for inventories of distillates, including winter heating oil, were for a 800,000-barrel stockbuild.

more...

[KoKo]

44. Had the same reaction you did. I heard all the pipelines were out, just

yesterday! :eyes: Did it strike you that this article might be hinting that "hedge funds" are controlling the prices? Sort of like Enron did in California. And, to be even more :tinfoilhat: Could this be hedge funds sparring with each other to take some of the "players out" so that bigger profits are made by those who remain.

One of the articles posted here said their are "19,000 secret hedge funds." Sounds like there might be some efforts being made to winnow out the small fry by having them be eaten by the sharks...(another Enron type tactic) Ugh..

All this going on and the average American can't even make a decent interest rate in an old-fashioned savings account. And, they want to take away the SS benefits from folks who have no place that's safe or convenient to put their few dollars left. I think we will all be forced into the "hedge funds" at some point just to "prop them up." CNBC will be running ads like the kind they used to run for "Penny Stocks, Drip Programs and Spiders, Diamonds and QQQ." (anyone remember all those ads?)

Now it will be a hype about "How you to can join the big guys with {{{Hedge Fund Investing.}}} Just call Charles Schwab, Alex Brown or better yet let your local Bank America or City Bank do your investing for you and you will be in business. :nuke:

[UpInArms]

13. WTO Allows Sanctions Against U.S. in 'Byrd' Row

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=6113208

GENEVA (Reuters) - The World Trade Organization on Tuesday gave the European Union and its allies the right to hit the United States with potentially hundreds of millions of dollars in sanctions over an illegal trade law, diplomats said.

Arbitrators at the Geneva-based trade body said that the EU, which was joined in the anti-dumping case by seven other members, including Canada, Japan and India, could set their punitive levies at some 70 percent of the amounts raised by the disputed regulation and handed out to U.S. companies.

The so-called Byrd amendment, which enjoys strong political backing in the U.S. Congress but which has been repeatedly judged to violate trade rules by the WTO, has so far distributed some $700 million to U.S. corporations.

...a bit more...

[54anickel]

22. A bit of background on that Byrd amendment

http://www.freetrade.org/pubs/FTBs/FTB-005.pdf

How a Bill Became a Law—Redux
The Continued Dumping and Subsidy Offset Act was originally introduced by Sen. Mike DeWine (R-OH) during the first session of the 106th Congress as S.61. When introducing the bill on January 19, 1999, Sen. DeWine remarked: “It’s time we impose a heavier price on dumping and subsidization. The Continued Dumping and Subsidization Offset Act would accomplish this goal. It would transfer the duties and fines imposed on foreign producers directly to their U.S. competitors. Under our bill, foreign steel producers would get a double hit from dumping: they would have to pay a duty, and in turn,
see that duty go directly to aid U.S. steel producers.”1

Although the bill had 26 cosponsors, it never garnered enough support in the Senate Finance Committee to make it to the floor for a vote. Perhaps the Finance Committee—the committee with expertise and jurisdiction on trade matters— was aware that the “heavier price” and “double hit” nature of the bill about which Sen. DeWine boasted constituted violations of the WTO’s Antidumping Agreement and Agreement on Subsidies and Countervailing Measures.

Despite the known opposition—or more likely because of it—Sen. Robert Byrd (D-WV) surreptitiously inserted the language from S.61 into a 2001 appropriations bill for agriculture and related programs at the last minute without any debate on the amendment. Hence, it became known as the Byrd amendment.

Since it would have required a vote against the entire appropriations bill to defeat the Byrd amendment, Congress passed the legislation and sent it to the president for his signature. In October 2000 President Clinton signed the bill into law but noted the WTO-inconsistent nature of the Byrd amendment, calling on the Congress “to override this provision, or amend it to be acceptable, before they adjourn.” That never happened.2

more...

[KoKo]

48. I'm getting a "timed out" notice when I try to get to the site for rest of

the article, so I'm only going by snip you have posted in wondering if this was Senator Byrd's way of protesting against WTO? I know he wanted to stop the steel dumping, but why did he sneakily insert language in that would leave us open to WTO sanctions. :shrug:

Just to qualify, I'm a Byrd fan, so looking for the reasoning here which would be favorable to him. I will still keep hitting the link to see if I can get the PDF file.

[54anickel]

53. Strange, seems their site is down now. I can't get to the site, much less

the article now. May have to try again later KoKo.

edit to add:

That article was put out by the CATO folks. I have to admit I didn't read the entire article, it was just the best one I could dig up giving the background on the amendment.

[54anickel]

54. Here's a link to the html version KoKo

http://64.233.167.104/search?q=cache:L4EUBIcf4_MJ:www.freetrade.org/pubs/FTBs/FTB-005.pdf+byrd+amendment&hl=en

[KoKo]

59. Thanks, got it. After reading it though, I still can't figure out if the

Byrd amendment is a good thing or detrimental, though. Lots of talk about trade that's over my head there. Seems Dems want to keep though.
:shrug:

[UpInArms]

14. 9:54 EST numbers

Dow 10,152.74 +30.22 (+0.30%)
Nasdaq 1,841.85 +5.36 (+0.29%)
S&P 500 1,102.36 +3.21 (+0.29%)
10-Yr Bond 4.174% -0.014

[54anickel]

17. Hedge funds change bond investors’ world

http://news.ft.com/cms/s/434242f8-faba-11d8-9a71-00000e2511c8.html

The growth of hedge funds is changing the way traditional bond investors operate. They can no longer afford to take a leisurely view of bond market prices.

A good example came in May when Marks and Spencer, the UK retailer, received a bid approach from entrepreneur Philip Green. At a stroke, M&S's most liquid bond plummeted from 95p to 81p in the pound.

“Previously, investors might have waited for more information,” says Paul Mingay, head of credit strategy at Morley Fund Management. “Hedge funds have certainly speeded up investors' time horizons.”

With more than 7,000 hedge funds now in existence, they can exert a major impact on markets.

The hedge funds often operate through derivatives, including credit derivatives, with their activities showing up in the cash bond market through the effects ofarbitrage.

more...

[UpInArms]

18. disappointing reports are in

10:00am 08/31/04 U.S. AUG. CONSUMER CONFIDENCE FALLS TO 98.2 VS 105.7

10:00am 08/31/04 U.S. AUG. CHICAGO PMI 57.3% VS. 60.8% EXPECTED

10:00am 08/31/04 U.S. AUG.CONSUMER CONFIDENCE WELL BELOW CONSENSUS 103.6

10:00am 08/31/04 U.S. AUG. CONSUMER CONFIDENCE LOWEST SINCE MAY

[UpInArms]

19. U.S. Aug. consumer confidence falls sharply

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38230.4168981481-819220147&siteID=mktw&scid=0&doctype=806&

WASHINGTON (CBS.MW) -- U.S. consumer confidence fell sharply in August, the Conference Board said Tuesday. The consumer confidence index declined to 98.2 in August from a revised 105.7 in July. This is the largest drop in the index since February. The level of confidence is the lowest since May. The decline in the index was below expectations. Economists expected the index to fall slightly to 103.6. The July confidence index was revised down from the initial estimate of 106.1. The present situation index fell to 100.7 from 106.4, while the expectations index dropped to 96.6 from 105.3. Lynn Franco, the director of the Conference Board's Consumer Research Center said the slowdown in job growth in the past two months has curbed confidence.

[54anickel]

23. Slowdown in job growth? That's a bit off script, isn't it? n/t

[UpInArms]

21. U.S. Aug. Chicago PMI falls to 57.3 percent

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38230.4200694444-819220475&siteID=mktw&scid=0&doctype=806&

CHICAGO (CBS.MW) -- Business conditions improved at a slower pace in the Chicago region in August, according to the Chicago purchasing managers index released Tuesday. The Chicago PMI sank to 57.3 percent in August from 64.7 percent in July. Readings over 50 percent indicate expansion. Economists were expecting the index to fall to 60.8 percent. It was the 16th straight month of expansion in the region. The prices paid index surged to 86.6 percent, a 16-year high, from 77.6 percent in July. The employment index rose to 51.1 percent from 45.6 percent. The new orders index fell to 58.0 percent from 68.7 percent.

[UpInArms]

25. 10:17 EST numbers and blather

Dow 10,119.94 -2.58 (-0.03%)
Nasdaq 1,832.17 -4.32 (-0.24%)
S&P 500 1,099.09 -0.06 (-0.01%)
10-Yr Bond 4.170% -0.018

10:00 ET Major indices maintain their positive stance, led by a strong biotech and oil service groups... Just about every sector has traded in the green and supported the market's mild gains... The only notable area, though, to trail behind is semiconductor... Intel (INTC 21.27 -0.33) has been a major drag on chatter the chip maker's Q3 (Sept) mid-quarter update would be disappointing... Analysts like SG Cowen are calling for the Thursday night conference call to include a downward revision to the mid-point of the revenue range... Meanwhile, August Consumer Confidence and Chicago PMI were just released and came in at 98.2 (consensus of 103.4) and 57.3 (consensus of 60.0) respectively... As a result, the indices have backed off their best levels... ..SOX -0.4%. ..NYSE Adv/Dec 1640/823. ..NASDAQ Adv/Dec 1528/683.

09:40 ET Stocks get off to a higher start following yesterday's broad retreat across the indices... The fall in the price of crude oil - this time to below $42/bbl - has been a relief to investors and brought about some modest buying... The commodity has eased as Iraq has begun exporting oil again (near normal levels) and insurgents have agreed to cease-fire agreements... The market will get its two economic reports of the day at 10 ET this morning: August Consumer Confidence (consensus of 103.4) and the Chicago PMI Index (consensus of 60.0)... Both should give the market more direction in the early action... ..NYSE Adv/Dec /. ..NASDAQ Adv/Dec /.

[54anickel]

26. Cash-rich companies steer clear of risk (still not taking that baton that

is beginning to seem like more of a hot-potato)

http://news.ft.com/cms/s/a5b75836-fab2-11d8-9a71-00000e2511c8.html

US companies are sitting on large stockpiles of cash they have accumulated from rebounding profits rather than spending it, reflecting a cautious business outlook and reluctance to take risk, credit analysts have warned.


The amount of liquid assets held by non-financial US corporations has almost doubled over the past seven years to $1,165bn at the end of the first quarter, according to Federal Reserve data.

The increase in assets relative to debt is in sharp contrast to the late 1990s, when companies issued large amounts of debt to fund capital investments.

“ are generally more cautious now, perhaps more cautious than they need to be,” said Kamalesh Rao, economist at Moody's Investors Service, adding that cash-to-debt ratios for non-financial companies are at their highest levels in almost 35 years.

Corporate credit liabilities were $5,030bn in the first quarter, putting the cash-to-debt ratio at 23 per cent.

Further evidence of cash accumulation is found in Fed data on non-financial companies' “financing gap” - the difference between capital spending and cashflow.

more...

[54anickel]

46. CIOs Cheerier About Future Spending

http://www.informationweek.com/story/showArticle.jhtml?articleID=46200119

CIOs in the United States are surprisingly optimistic about the future and think IT spending will climb nearly 7% in 2005, a research firm said Monday.
Forrester Research, which polls North American CIOs each quarter, cited numbers that indicate enterprise IT leaders are more confident than earlier in 2004. For the first time in the past three quarters, said Forrester research director Tom Pohlmann, a majority of the surveyed CIOs (52%) said that their industry's business climate was at "strong" or "very strong." In the first quarter, that number was only 36%.

"That's a surprising jump," said Pohlmann. "Pretty much everyone is optimistic about the future. For these IT pros, the future's not as bad as all the negative media news, about, say, oil prices, or some software vendors posting poor earnings."

Conversely, only 17% of the CIOs polled said that the business climate was "challenging" in the third quarter, down by almost half from the 31% who saw doom and gloom in the first quarter.

On average, the CIOs surveyed thought that their IT spending would climb 6.4% in 2005, on pace with Forrester's own earlier estimate of a 7% increase in spending next year.

snip>

"If you look at new investments, the future is even brighter," said Pohlmann, who highlighted computer hardware spending as the one category that will hit double digits next year. Other spending classifications, such as IT consulting and software, will see much lower growth rates in 2005 of just 3% each, he said.


Duh! The hardware is getting old, they went gung-ho replacing it all for the Y2K FUD. The profit margins on hardware systems are extremely small now. IT consulting and software, part of the wonderful US Service economy looks to be getting a pretty small piece of that IT pie again.

[54anickel]

47. Wall Street turns bearish on Intel, chip stocks

http://www.reuters.com/aitoolkit/aitArticle.jhtml?type=hotStocksNews&storyID=6115969

SAN FRANCISCO, Aug 31 (Reuters) - Shares of Intel Corp. (INTC.O: Quote, Profile, Research) and other semiconductor makers fell on Tuesday after several Wall Street firms predicted that the world's largest chip maker would lower its revenue forecast in a mid-quarter business update later this week.

Analysts cited signs of weakness in demand for Intel's microprocessors and memory chips. Intel last month forecast revenue of $8.6 billion to $9.2 billion for the third quarter.

snip>


SG Cowen's Jack Romaine said he expects Intel to have only $8.6 billion in revenue in the third quarter as contacts with Taiwanese component makers suggest demand for notebook PCs has been "unusually tepid."

Romaine advised investors to steer clear of chip stocks.

"We recommend that investors avoid the shares of all semiconductor stocks in the near-term because of...slowing end market demand and...increased supply in late '04/early '05," Romaine wrote to clients.

Morgan Stanley cut its price target on Intel shares to $28 from $32, ahead of the mid-quarter business update. The company's note, dated Aug. 30, said, "sluggish demand trends and the need to reduce inventories suggest that the company's fixed cost absorption will be less than ideal, which may lead to negative gross margin surprises during some or all of the next few quarters." (Additional reporting by Lincoln Feast in London)

[UpInArms]

27. Outsourcing CEOs Get Big Pay Hikes

http://www.forbes.com/work/management/2004/08/31/cx_da_0831topnews.html

NEW YORK - U.S. companies that outsourced the most jobs in 2003 also offered well-above average pay increases to their chief executives, according to a new study released this morning. Companies that made outsized political contributions to either the Democratic or the Republican parties also paid their CEOs unusually well, the study finds.

The average CEO compensation at the 50 firms outsourcing the most service jobs increased by 46% in 2003. That increase compares to an average hike of 9% for CEOs at 365 of the largest U.S. companies, according to a report by the Institute for Policy Studies, a non-profit that focuses on progressive research, and United for a Fair Economy, best known for its opposition to the repeal of the federal estate tax.

The study says that CEOs of the top outsourcing companies earned an average of $10.4 million in 2003, 28% more than the average CEO compensation of $8.1 million. These companies tended to be banks with call centers--such as Citigroup (nyse: C - news - people ), Bank of America (nyse: BAC - news - people ) and Morgan Stanley (nyse: MWD - news - people )--or technology companies with research facilities or call centers outside the U.S.--such as Oracle (nasdaq: ORCL - news - people ), Cognizant Technology Solutions and Intuit (nasdaq: INTU - news - people ).

<snip>

The overall 9% pay increase is itself far in excess of pay increases enjoyed by Americans in general. For Americans overall, personal incomes rose by 3.2% between 2002 and 2003, according to the U.S. Commerce Department. After two years of narrowing, the CEO-to- worker wage gap is rising again. The CEO-pay-to-worker-pay ratio reached 301:1 in 2003, up from 282:1 in 2002, the study says.

Companies that gave large sums to political parties also tended to give outsize rewards to the boss. CEOs of the 69 companies that sponsored this summer's Democratic and Republican National Conventions saw their pay rise by 52% in 2003, far outpacing their fellow CEOs. (Elections laws generally bar corporations from giving money to candidates, though they may sponsor conventions.) Similarly, the 38 CEOs who have personally raised at least $100,000 for either the George W. Bush or John Kerry presidential campaigns (the list is heavily weighted for Bush) earned an average of $15.2 million in 2003, 88% more than the average large company CEO, the study says.

...more...

[54anickel]

31. Isn't that special. Wake up America - hear that sucking sound? That's

the huge transfer of wealth moving your livelihood out of your pocket and into those of the "already well-off". You too can soon work at the same friggin job for an employment agency that skims your pay and benefits into their pockets, unless of course they decide to move your job off-shore completely.

Your livelihood - SLURP!
That little nest-egg deal that's been set up between parents and their kids for generations known as Social Security -SLURPPED UP by Shrub's tax-cuts!
That big return you thought you'd get socking away $$$ in that 401K - SLURP AGAIN, if you're lucky and young enough you may be able to keep your principal and a very small return that will end up as negative when adjusted for the real rate of inflation left at the bottom of the cup as you suddenly realize your standard of living has dropped 10-fold.

That bit on the political contributions is what drives me nuts! What's up? What's going on here? Kleptocracy by the Plutocracy?

[KoKo]

51. Exactly! And what's this deal about corporations raising $100,000!!

Who are they raising it from? I thought that was illegal in McCain/Feingold?

Seems to me that McCain/Feingold has been a boondoogle for the fat cats! $100,000!!!!

[UpInArms]

30. layoffs in the news

http://www.galvnews.com/story.lasso?wcd=23546

First Wave blames layoffs on lack of work

GALVESTON — About 50 employees arrived at First Wave Marine’s Pelican Island repair yard ready for work Monday morning, only to be told their jobs were gone.

Blaming an offshore industry that isn’t generating enough work, First Wave said it laid off 50 of its 80 local employees.

The company depends on offshore activity, which has been slow, said Grady Walker, company president.

First Wave provides repair, conversion, new construction and other services for offshore rigs, barges, boats and other vessels.

“It’s been very difficult all up and down the Gulf Coast,” he said.

...more...

Miners in Indiana, Illinois Face Layoffs

http://www.insideindianabusiness.com/newsitem.asp?id=11701

More than 400 Indiana and Illinois miners with Kindill Mining Inc. could face unemployment by the end of September, but the mines are just pieces of a bankruptcy puzzle.

Horizon Natural Resources owns 42 mines, 27 surface and 15 underground, including Kindill Mining Inc.’s Sullivan and Petersburg surface mines and an underground location in southern Illinois.

AEI Resources owned the mines but filed for Chapter 11 reorganization in 2002, citing declining coal sales. The company re-emerged as Horizon later in the year before declaring bankruptcy again six months later. A judge in U.S. Bankruptcy Court in Kentucky ruled Horizon does not have to honor union labor contracts protecting health care benefits. The final bankruptcy hearing is Tuesday, a Horizon representative said. New York billionaire Wilbur L. Ross bid on a bulk of the company’s assets.

The bankruptcy judge is expected to grant the request this week, said Joseph Angleton, president of the district of United Mine Workers over the Kindill mines. Present Horizon workers and those retired after Oct. 1, 1994 will lose their health care, but not retirement benefits, Angleton said. The Kindill mines are scheduled to close between Sept. 25 and Oct. 8.

A new owner could try then to run the mine without liability or union contracts, he said. “I don’t know how you would describe that. I don’t know if you would describe that as lose-lose or what,” Angleton said.

Jerry McKinnon of Elnora has mined for 34 years. He was laid off at the Sullivan mine in 1995 and at 59, is three years away from retirement. “Like a bunch of us, we’re just going to take what comes along,” he said. “I will not work at minimum wage. I won’t slap hamburgers.” The average machinery job in the Kindill mines pays about $20 an hour. McKinnon said he plans to collect unemployment but is not ready to retire. “What people would do to find employment is anyone’s guess,” Angleton said, adding southern Illinois’ economy will have fewer opportunities for the miners than Indiana.

...more...

[54anickel]

33. NW regional bank eyes turf of Fannie, Freddie

http://seattletimes.nwsource.com/html/businesstechnology/2002020758_mortgage31.html

WASHINGTON — The Federal Home Loan Bank of Seattle, one of 12 regional institutions that provide money to home lenders, is seeking to branch into the turf of mortgage-finance giants Fannie Mae and Freddie Mac.

The bank said yesterday it has asked federal regulators for permission to begin buying mortgage-backed securities from the Northwest banks and thrifts that collectively own it, and then selling them to those financial institutions and other investors.

If approved, the plan would put the Seattle bank in competition with Fannie Mae and Freddie Mac, the huge government-sponsored companies that buy home loans from banks and other lenders and bundle them into securities for sale on Wall Street. Unlike them, however, the Seattle bank would not guarantee payments on the securities.

The plan, called MortgageChoice, would help home buyers by lowering interest rates through enhanced competition and would enable the Seattle bank to more effectively manage its financial risk, the bank said.

"The Federal Home Loan Banks are always looking for ways to provide more opportunities for consumers, who are working with member community banks, to afford a home of their own," Norm Rice, president and CEO of the Seattle bank, said in a statement.

more...

[54anickel]

34. Homeowners Come Up Short on Insurance

http://www.nytimes.com/2004/08/31/business/31insure.html

snip>

Their woeful shortfall in insurance coverage, experts say, is a plight shared unknowingly by millions of American homeowners. It has been fed largely by a shift in the way property insurance has been sold in recent years.

In a move to cut costs from claims, insurance companies began in the late 1990's to phase out coverage that guaranteed the replacement of a destroyed home, regardless of the expense to the insurer. In place of that unlimited coverage, which had become nearly universal, insurers substituted a similar-sounding policy with a crucial difference: it pays only the amount stated on the policy plus, typically, an additional 20 percent to 25 percent.

For their part, insurers insist that it is the consumer's responsibility to acquire adequate coverage.

The old policy was called a guaranteed replacement policy. The new one, which most Americans now have, is called an extended replacement policy.

"People look at this and it says 'replacement' and they think, 'That's good, I get my house replaced,' " said John Garamendi, the insurance commissioner in California. "But they don't get their house replaced. They get money up to the set limits plus the extended 20 percent or 25 percent."

Marshall & Swift/Boeckh, a Los Angeles company that most insurers rely on for help in calculating the value of houses, estimates that 64 percent of American homes are underinsured by an average of 27 percent, with some homes underinsured by 60 percent or more.

more...

[54anickel]

35. OPEC's Purnomo Says Demand, Not Speculators, Driving Oil Market

http://quote.bloomberg.com/apps/news?pid=10000086&sid=ahqEIoir3bKA&refer=latin_america

Aug. 31 (Bloomberg) -- OPEC President Purnomo Yusgiantoro said oil prices are now being driven by fundamental factors rather than speculators.

Hedge funds and other large speculators last week cut their bets that the price of New York oil would rise, according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets prices will rise, fell by 34 percent as of Tuesday on the New York Mercantile Exchange from a week earlier.

``There are still speculators in the market, but fundamental factors -- mainly demand from China and India -- are stronger now,'' Purnomo told reporters in Jakarta.

Crude oil futures were little changed at $42.30 at 1:33 p.m. in Singapore. The contract fell to a one-month low yesterday as fighting eased in Iraq, reducing concern that supplies from the fifth-largest Middle East producer will be disrupted.

snip>

Long positions still outnumbered shorts by 31,434 contracts.

[KoKo]

56. Thanks! An excellent read.....I snipped a little more from the end, here.

Consequently, time appears to be on the side of Moscow, not Washington, which appears to have overreached again. America’s foreign policy makers predicated their strategy in Central Asia on a weak Russia. At $40/barrel, however, Russia is not weak, and is inevitably destined to become stronger, particularly in light of the country’s growing role as a crucial swing petroleum producer, whilst the US has become the world’s largest oil supplicant. Although the mobilization against Iraq and Afghanistan has ostensibly given the US a renewed opportunity to expand its influence and power in the respective regions, Mr Putin’s confident assertions of his country’s own strategic interests in the “great game” of crude oil exploration and transport suggest an outcome that might very well be the opposite of what America has sought. In any event, the geopolitics of oil today suggest a backdrop looking less like a benign, happily globalised “one world economy” dominated by America Inc and its assorted “branch plants”, and more a massive, overextended military power fighting a dangerous, and ultimately losing, battle against an angry, resistant globe, of which Russia is but one more growing manifestation.

This article really makes so much sense. I'm printing it out to keep.
I've often wondered, though, about Babs and Poppy's trip visiting Putin which was just before Yukos was seized by Putin. We here on DU speculated that it was about the oil. Was Poppy over there trying to "buy" Putin off? Or, was there some underhand deal with Carlyle to help finance something that Poppy wanted done. Could Putin be a sly fox who wouldn't budge and went on with his deal inspite of Poppy's intereference? :shrug:

[54anickel]

36. Putin And The Geopolitics Of Oil

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

“When the Afghan conflict is over, we will not leave Central Asia. We have long-term plans and interests in this region.”
– Elizabeth Jones, US Assistant Secretary of State for European and Eurasian affairs

Vladimir Putin’s image in the West as a “stand up guy” (to use a favourite “Bushism”) has taken a pounding over the past year. Who is the Russian President? Is he a visceral KGB nationalist, violently opposed to American economic and political interests? Is he a recidivist Soviet-style communist only now revealing his true colours by launching an all-out attack on Russia’s most Western-investor friendly oil company, Yukos? Or can his actions be explained as essentially defensive and reactive in response to growing American meddling in areas of traditional Russian spheres of influence?

Although Russia has experienced unprecedented liberal economic reform and stability under Putin, this has been more recently offset by concerns that his actions against Yukos, the embattled oil group, could spread to threaten private business more broadly. Whilst there is a danger that President Putin has unleashed a veritable Pandora’s Box of extreme Russian nationalist forces of which he may ultimately lose control, it seems more rational to regard recent measures taken in respect of Russia’s oil sector as a purely defensive counterthrust to the foreign policy posture of the Bush Administration (a corollary of the latter’s increasingly unsustainable economic adventurism). Distilled to its bare essentials, the United States no longer produces enough of what the world wants (goods and services), so it going to war to monopolize control of what the world needs (i.e., the supply of oil). If true, this is a formula for perpetual war; the Russian President’s actions, therefore, take on a much less arbitrary and offensive character.

However benignly George Bush appears to regard Mr Putin since his famous gaze into the latter’s eyes (and, by extension, his soul, according to the US President), things look a bit different from the Kremlin. As Chalmers Johnson has effectively explained in his book The Sorrows of Empire, from 1945 on, the United States pursued an imperial policy based on the military base rather than the colony. The US has set up its bases around the globe -- little Americas -- in other countries, got extraterritorial rights for its troops, and with its economic power at its back and close ties with local elites, gone about its global business. This method of operating has clearly become less constrained since the break-up of the old Soviet Union and the concomitant diminution of Cold War tensions.

Clearly, one hugely important aspect of this imperial impulse has been oil. For all of the varying rationales provided to justify its increasing militarism – the search for weapons of mass destruction, the Cold War and, more recently, the global “war against terror”, regime change and the spread of liberal democracy – the one consistent thread in American foreign policy during the entire post-World War II period is the politics of crude. The Bush Administration’s conduct reflects a variant on this theme: it has chosen to address the problem that it does not make enough of what the rest of the world wants essentially by going to war to monopolise control of the supply and distribution of what the world needs, petroleum. There are other war aims, of course, but control of the global hydrocarbon net is certainly of paramount importance. As SRA strategist Chris Sanders notes: “Control of oil is essential to enforcing that acceptance since, the conceit of the financial markets notwithstanding, economic growth is first a function of energy availability, not interest rates.”

more...

edit to add:

Ewww, the last paragraph in this article is an eye opener!

[54anickel]

38. 12:02 lunch break check

Dow 10,093.19 -29.33 (-0.29%)
Nasdaq 1,821.71 -14.78 (-0.80%)
S&P 500 1,095.66 -3.49 (-0.32%)
10-yr Bond 4.119% -0.069
30-yr Bond 4.934% -0.055
NYSE Volume 404,444,000
Nasdaq Volume 524,228,000

11:30AM: The market continues to trade underwater as buyers remain a skittish bunch... Previews for Intel's (INTC 20.95 -0.65) mid-quarter update on Thursday have not been encouraging - with some firms cutting estimates and price targets (FTN Midwest even downgraded INTC to Neutral from Buy) - and investors are worried about Friday's employment report... July's nonfarm payrolls number (32K - less than one-eighth of the consensus estimate) suggested the jobs recovery had slowed in the summer, and cast doubt over the speed of the economic pick-up...
The August employment report will need to hit the market's expectation of +150K for nonfarm payrolls to put such concerns to rest...NYSE Adv/Dec 1663/1328, Nasdaq Adv/Dec 1103/1585

11:05AM: A negative bias continues to prevail in the morning trade with sellers dominating the action... Down volume is outpacing up volume at the Nasdaq, where the semiconductor shares are being the hardest hit... The blue chips have so far disproportionately outperformed the Composite, thanks to gains in specialized finance and energy... Shares have actually traded higher, despite the 2% fall in the price of crude oil to $41.57/bbl now...
The group has suffered from profit-taking over the past two weeks (when crude oil was approaching $50/bbl - as traders reasoned prices would have to dip at some point) and the same inverse relationship seems to be holding now...NYSE Adv/Dec 1836/1113, Nasdaq Adv/Dec 1319/1282

10:30AM: Equities slip below the unchanged mark following the dual set of disappointing economic data... Both August Consumer Confidence and Chicago PMI came in under consensus expectations, at 98.2 and 57.3, respectively... Specifically, Consumer Confidence fell 7.5 points from a downwardly revised two year high in July for its first decline since February... Chicago PMI also dropped 7.4 points as growth slowed from its 16-year high set in May... Prices paid rose as new orders decreased - suggesting inflation was starting to impact new business activity...

The industrial shares - like the rest of the market - have approached the flat line as a result...NYSE Adv/Dec 1869/925, Nasdaq Adv/Dec 1373/1077

Advances & Declines
NYSE Nasdaq
Advances 1713 (52%) 1191 (40%)
Declines 1362 (41%) 1598 (54%)
Unchanged 196 (5%) 163 (5%)

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

Up Vol* 158 (42%) 135 (27%)
Down Vol* 208 (55%) 353 (71%)
Unch. Vol* 6 (1%) 9 (1%)

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

New Hi's 65 23
New Lo's 19 30

[54anickel]

39. Fund Managers Now More Prone to Risk

http://www.cfo.com/article.cfm/3148478/c_3148521?f=home_todayinfinance

The latest word from the Street is that investment-fund money is “generally leaving safer assets and flowing into riskier investments,” observed Merrill Lynch high-yield analyst Oleg Melentyev, in his weekly “Know the Flow” report.

Citing a report from AMG Data Services, Melentyev, observed that $14 billion left money market funds in the week ended Aug. 25, extending “the zigzag flow pattern this group is experiencing to 13 consecutive weeks.” This figure represents 0.75 percent of assets under management of money market funds.

The prior week—the one ending August 18—saw a net inflow of $7.4 billion into money-market funds, according to AMG So far this year, investors have withdrawn $111.6 billion from this group of funds.

Municipal debt funds added week 22 to the count of their consecutive weekly outflows. So far this year, the negative attitude toward munis cost them $9.8 billion in cash withdrawals (2.9 percent of assets).

If safe havens became less popular for investments during the period, gains were seen in just about every category of investment containing more risk than money markets and munis. “High-yield bond mutual funds broke the string of four consecutive (although relatively insignificant) outflows with a $264.0 million,” Melentyev reports. The inflow represented a 0.31 percent addition to their assets and brought the year-to-date total to a negative $7.8 billion (5.7 percent).

more...

[54anickel]

40. The Big Fallacy

Keep Shrub's push for the "ownership society" as you read this article.

http://www.gold-eagle.com/editorials_04/tacinv083004.html

snip>

Let's start off by looking at a predator in the wild, a Jaguar. When there is plenty of food, all the Jaguars can feed well and relax as there is plenty to go around. If one looks at the situation from the prey’s side, it seems unfair. The poor deer is just trying to get a drink of water or eat some grass, but each time it has to play Russian roulette with its life. If the jaguar were eliminated from the equation, then you would have too many deer and this would result in over grazing and a severe constriction of the existing food supplies. So the Jaguar is needed to maintain the equilibrium. If suddenly the number of jaguars goes up, then we have another imbalance and the existing food supply is now threatened (not enough deer to feed all the jaguars). Once again nature intervenes and the weakest jaguars start to die off; only the strong ones remain.

Applying the above analogy to the markets, we get the following:

The masses are the Deer; they just want to find a way to grow fat without doing much. Even worse, they want to build lots of money for a time in their lives when they least need it. This period is called retirement. What is extremely amusing is that everything is sacrificed, good health, youth, pleasures etc. to put money aside for a time when practically nothing works as well as it once used to. If the masses are so happy to kill themselves slowly, why should it be terrible when the predators come in and do the same job but 100 times faster?

The Jaguars represent a few sophisticated investors, big brokerage firm’s etc. Their function is to wait and watch the deer (masses) get nice and fat; then they strike their fatal blow. In this case, the markets crash when the masses are net long or suddenly take off when the masses are net short.

Then you get times when the food supply is thin and so even the jaguars are now threatened as they start to turn on each other to survive. (By the way, this is what has been going on in the markets for the last few months). This is when you see big companies go down (Long Term Investment Capital is an example.) and many big investors suddenly find themselves penniless. The jaguars that survive this period of hardship emerge even stronger, leaner and will feed 10 times as much as soon as the supply of food is replenished to equilibrium levels.

more...

[54anickel]

41. 1:17 update

Dow 10,089.61 -32.91 (-0.33%)
Nasdaq 1,820.48 -16.01 (-0.87%)
S&P 500 1,095.70 -3.45 (-0.31%)
10-yr Bond 4.099% -0.089
30-yr Bond 4.918% -0.071
NYSE Volume 540,539,000
Nasdaq Volume 675,661,000

1:00PM: Equities continue to trade at improved levels although the indices have yet to make a decisive move to the upside... Breadth figures continue to favor decliners at the Nasdaq, and advancers only claim a slight lead over decliners at the NYSE... Volume has trended higher today than yesterday's session (which marked the lowest level of the year for the Nasdaq) but can still be described as light against normal conditions... Institutional players remain on vacation in mass and will probably remain that way until after Labor Day next Monday (in which the market is closed)... NYSE Adv/Dec 1782/1365, Nasdaq Adv/Dec 1262/1587

12:30PM: Indices pare some of their losses but continue to trade near their lows of the day... Tech continues to keep stocks on the defensive as semiconductor holds near its worst levels... Right now, the group is just 6 points from its lows of the year as investors continue to have doubts as to whether this upturn is sustainable, or whether we have reached the peak... All of tech has been punished by the implications, with networking, disk drive, computer hardware, software, and internet posting sizable losses...SOX -2.0, NYSE Adv/Dec 1680/1439, Nasdaq Adv/Dec 1173/1641

12:00PM: Stock market began the day with modest gains, but soon reversed itself for modest losses in response to a batch of disappointing economic data... August Consumer Confidence and Chicago PMI both posted month/month declines of more than 7 points and came in below consensus estimates... Regional manufacturing in the Chicago region showed signs of slowing as prices paid rose noticeably, and Consumer Confidence dipped after gasoline prices reached near record levels in August...This had the effect of cooling the major indices' slight advance and restoring the same negative bias that was evident in yesterday's trade... The European (DAX -1.4%) and Asian (Nikkei -0.9%) indices have had a similarly bearish response and contributed to the US's weakness... Worries about Friday's August employment report and Thursday's mid-quarter update from Intel (INTC 20.95 -0.65) have also held equities down... Firms such as Morgan Stanley expect the chip maker narrow its prior revenue guidance so that the new midpoint of the range will decline from the previous midpoint of $8.9 bln...

Semiconductor has thus been the largest loser this morning and is responsible for the Composite's underperformance of the blue chips... The latter has enjoyed buying in energy (despite the fall in crude oil to $41.85/bbl on Iraq's resumption of oil exports) and homebuilding, which has helped balance selling in retail, material, and airline... Homebuilding itself has been strong off the rally in the bond market - the 10-year note up 16 ticks and bringing its yield (at 4.11%) to its lowest levels since early spring...SOX -2.2, NYSE Adv/Dec 1739/1339, Nasdaq Adv/Dec 1198/1582

[54anickel]

43. WrapUp by Jim Willie CB 08.30.2004

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

Technical chart analysis has a widely debated reputation as a forecast tool for price behavior. Many, including this writer, believe it can serve as a critically important tool in combination with fundamental analysis. The study of a company’s array of product offerings, growing customer base, trend for product demand, cost structure, debt burden, equity offerings, and financial balance sheet all contribute toward its fundamentals. On the other side of the analytic workshop is the chart room, where price movement over time is examined for its chart patterns. It is my opinion that the best of forecasts employ both methods.

At this late summer stage, let us kick back and review some commonly recognized chart patterns, and bone up on our toolbag of reversal types. Each can be valuable to spot in the assessment of buy points, sell points, and setting expectations. Each pattern is evident in a major index or commodity in recent weeks or years. It will be assumed that support and resistance is understood. One should note that when resistance is broken on the upside, the old ceiling serves as the new floor. And when support is broken on the downside, the old floor serves as the new ceiling. The dynamic behind this phenomenon is forced short covering for a rising item, and forced liquidation sale for a falling item.

Many people have asked over the years, “What statistical models explain stock price changes?” Prices meander, according to some statistical theories, in such a way as to obey certain random laws. Nothing properly explains all stock movement, but one distribution has been shown by scholars to adequately explain movement in many situations. For those with some interest and deeper math abilities, read what follows. For others, skip to the next paragraph if you wish. Brownian Motion provides some workable models. It dictates that in very short term movements, prices change according to normal bell-shaped random distributions. For instance, the price change over a length of time Ät might obey the normal law with mean zero and variance kÄt, where k is some constant. In other words, the change in price varies proportionally with the length of time involved. The normal curve dictates a central tendency. In this model, over a small interval of time, in two thirds of the cases the price change will be within plus or minus the square root of kÄt. The movement of cigarette smoke particles in a still room tends to follow Brownian Motion over three dimensions.

Regardless of the precise laws governing motion, the paths of price behavior over time reveal much. When you step back and observe the pattern, it can reveal much. If a short-term chart is not clear, back off to a weekly chart for more clarity. A review of some frequently appearing chart patterns might be valuable. For now in this essay let us cover reversal patterns. Many advocates of technical analysis believe that imminent fundamental dynamics, such as changes to profitability or introduction of new products or the win of new contracts or dilution to shares, are all factored into the chart pattern. Nothing is foolproof. Certain events are not easily factored into charts, like court rulings, product failures (e.g. FDA product rejection), and retirement/death of executives. For certain, chart analysis can be a valuable tool for investors, both professional and individual. Almost every major mutual fund house employs a highly revered, highly respected, and highly paid staff of shared technical analysts who work “the chart room.” Fidelity surely did during a brief consulting stay of mine. In all charts which follow, the logarithmic scale is shown. So what? Well, that means a price rise of a constant growth rate (or a trend rise) will appear as a straight line. The moving averages displayed are 50-week and 50-day types, visible in blue.

more...

[54anickel]

49. Protests Greet IMF Chief in Argentina

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=6115873

snip>

Riot police protecting the pink presidential palace fired tear gas at the mix of protesters, from radical political groups to militant unemployed workers.

Federal police arrested at least 20 people and reported four injured policemen in some of the worst street violence since President Nestor Kirchner took office 15 months ago.

Across the street, Rato met with Economy Minister Roberto Lavagna to discuss Argentina's decision to drop out of its year-old $13 billion loan program with the International Monetary Fund. Together they went to meet Kirchner in the presidential palace.

The seven-hour visit is the first since Rato assumed the IMF helm in June and follows Argentina's decision to suspend the program and its economic reform requirements so it could concentrate on reaching an agreement with private creditors on $100 billion in debt on which it defaulted in January 2002.

Bands of protesters seized the opportunity to voice their opposition to the IMF, which many Argentines blame for their country's economic collapse in 2001 and 2002 that sent millions into poverty. The IMF recently admitted to faulty policy toward Argentina leading up to the crisis and the largest sovereign default in history.

Office workers in downtown Buenos Aires scurried down the street to escape the violence and the tear gas at lunchtime.

more...

[54anickel]

50. Gwalia likely to vanish as hedges fall

http://www.nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3588274&thesection=business&thesubsection=general&thesecondsubsection=&thetickercode=

snip>

On Monday, Gwalia said it faced bankruptcy after discovering its mines might not have enough gold to meet its gold hedge commitments and finance its foreign exchange exposure.

Gwalia's assets include its outback Australia gold mines that together yielded 500,000 ounces a year, and its tantalum mines - the world's largest - the profitability of which is linked to computer manufacturing.

"Our understanding is that ... all counterparties have, or will have closed out their positions with SGW and thus the total market value of the gold and forex books becomes a liability to SGW," Goldman Sachs JBWere said in a research advisory.

Citigroup and Goldman Sachs faced the greatest exposure to Gwalia's undervalued hedges, estimated to be A$348 million in the red, with a further A$75 million in foreign exchange hedging exposure owing to a number of banks, UBS said.

more...

[KoKo]

52. Good Grief! Overselling gold and titanium on speculation that there's

enough in the ground before it's even dug out? How much of this is going on out there? So,I own a mine, and the geologists speculate on how much metal there is in the mine and I start selling shares based on the speculation. Then after awhile it seems that there's not as much there as was speculated, so I tell investors...sorry..there just isn't what we thought there was down there...

Reminds me of some stories I read about the "Great Gold Rush of the 1890's" back in high school where you'd sell shares to some guy from back East and he'd come with his pick axe and when he started to dig it out...there wasn't much there. He'd paid for his "stake" and the guy who sold it to him was long gone and he ended up busted or crazy just digging in that whole figuring something had to be there eventually!

Is this what's going on now? Only it's the "Big Guys" left holding the bag with their little investors paying the price for a bail out.

[54anickel]

55. It's not just interest rates that matter

http://www.kitco.com/weekly/paulvaneeden/aug272004.html

snip>

But if you look at the relationship between the dollar’s exchange rate and the Federal Funds rate some interesting observations can be made. The Federal Funds rate increased by more than three hundred percent from 1972 to 1974 with only a minor impact on the dollar, if any. The Federal Funds rate started soaring in 1977 but it wasn’t until about 1981 that the dollar responded. It seems then, that the Federal Funds rate can increase without causing a strengthening in the dollar. And when the dollar does respond to significantly higher interest rates, it may do so only after a lag of several years.

So could interest rates rise in the current environment without leading to a stronger dollar?

Many people make light of the trade and budget deficits of the United States. It’s understandable: their repercussions may not be felt for decades, or years, or months, so why worry?

But the dual deficits are not to be ignored; they are already influencing our investments.

The US government is running a four hundred billion dollar annual deficit that has to be financed by issuing more US Treasury bonds. An increase in bond issuances causes bond prices to fall, thereby increasing bond yields and raising interest rates. But the economy is in no shape to absorb higher interest rates.

According to the Census Bureau the number of Americans living in poverty increased by 1.3 million last year and the number of Americans without health insurance increased by 1.4 million. It was the third annual increase for both categories. There are now 35.8 million people living under the poverty line (12.5% of the population) and 45 million people without health insurance (15.6%).

If the percentage of people living in poverty increases, the number of consumers who can spend us out of a recession diminishes. And ditto for those without health insurance. Do you really think that a family without health insurance is going to buy a new SUV every couple of years?

more...

[54anickel]

57. Mr. Sandman, Bring Me Some Oil

http://www.nytimes.com/2004/08/31/business/31tar.html

snip>

Both sides of the equation have now changed. North America's crude oil resources have been so thoroughly explored and developed that experts say there is hardly any left to find, except perhaps in the deep waters of the Gulf of Mexico. In the rest of the world, most of the best places to drill for new oil are off limits to the Western energy industry for political reasons, and existing fields are already pumping every barrel they can.

So, with roaring global demand driving energy prices up to record levels over the last few years and fresh supplies of crude oil so hard to find, Suncor and more than a dozen other energy companies, including Exxon Mobil, ChevronTexaco and Royal Dutch/Shell, are pursuing projects here.

Their output is already crucial to the United States' energy supply. The flow of oil extracted from Alberta's tar sands, also called oil sands, surpassed one million barrels a day at the end of 2003, and it is expected to double to two million barrels by 2010, matching the output of significant members of the Organization of the Petroleum Exporting Countries like Libya and Indonesia. Much of the oil goes south across the American border.

Yet while the United States deepens its reliance on Canadian energy - Canada is already the country's largest supplier of both oil and natural gas, ahead of Saudi Arabia, Mexico and Venezuela - the frenzy of tar sands development in Alberta highlights an uncomfortable fact about the search for unconventional sources of oil to replace dwindling conventional supplies: it depends on petroleum prices staying high for decades to come.

Energy economists in Calgary, the freewheeling commercial capital of this sparsely populated but energy-rich province of three million, say that most tar sands projects are viable only when oil is selling for more than $30 a barrel.

more...

[54anickel]

58. 2:51 and that mysterious post 2pm rally is happening again

Dow 10,124.88 +2.36 (+0.02%)
Nasdaq 1,829.86 -6.63 (-0.36%)
S&P 500 1,099.43 +0.28 (+0.03%)
10-yr Bond 4.115% -0.073
30-yr Bond 4.927% -0.062
NYSE Volume 739,200,000
Nasdaq Volume 897,179,000


2:30PM: Over the last few hours the indices have established a series of slightly lower lows but neither follow through interest nor bargain hunting has been evident. Modest strength has been noted in a few sectors today (energy, utility, health and housing) but more buy side interest has developed in Treasuries. Talk has been that traders are ratcheting down expectation for the jobs data on Friday with some month end buying also suggested. NYSE Adv/Dec 1761/1466, Nasdaq Adv/Dec 1218/1739

2:00PM: The push to fresh session lows this afternoon did not elicit much interest as little follow through was noted with minor upticks noted in recent trade. Crude oil has not had much impact despite the modest losses with the front month contract stabilizing over the last two sessions in the $42.00 area. It may boil down simply to the fact that after two weeks of a low volume bounce, participants are taking some profits in front of the INTC mid-quarter update and more importantly the jobs data which could help set the tone for the month of Sep. NYSE Adv/Dec 1722/1450, Nasdaq Adv/Dec 1159/1738

1:30PM: New session lows for the market averages in recent trade. Whether it was related to the reports of a subway station bombing in Russia on the heels of the airline explosions is unclear but the fact remains that buyers have yet to display much fortitude in the face of weaker data and cautious comments on INTC (-3.1%, set new 52-wk low). The extension of yesterday's reversal has come amid heavier volume but it is still running far below average. Market internals at the NYSE are still holding on to a slightly favorable bias thanks to gains in the energy, utility, tobacco, housing and health sectors. NYSE Adv/Dec 1748/1413, Nasdaq Adv/Dec 1138/1734

[54anickel]

60. 3:30, check the blather- riders will be changing horses after today's race

Dow 10,131.96 +9.44 (+0.09%)
Nasdaq 1,830.73 -5.76 (-0.31%)
S&P 500 1,100.35 +1.20 (+0.11%)
10-yr Bond 4.132% -0.056
30-yr Bond 4.938% -0.051
NYSE Volume 863,728,000
Nasdaq Volume 1,032,264,000


3:00PM: The market averages have finally been able break out of their narrow afternoon ranges (five point three hour range for Nasdaq Comp). Traders have cited buy programs as well as short covering ahead of index changes that will be seen at the close of today's trade. The upticks have lifted the Dow and S&P 500 into positive territory but have been noted across all sectors including the beleaguered semi index (SOX) which rallied roughly 1.7% off its session low (still down 1%). Top performers have not changed (energy, utility, housing, health). Internals are now bullish at the NYSE. NYSE Adv/Dec 1955/1306, Nasdaq Adv/Dec 1447/1523

2:30PM: Over the last few hours the indices have established a series of slightly lower lows but neither follow through interest nor bargain hunting has been evident. Modest strength has been noted in a few sectors today (energy, utility, health and housing) but more buy side interest has developed in Treasuries. Talk has been that traders are ratcheting down expectation for the jobs data on Friday with some month end buying also suggested. NYSE Adv/Dec 1761/1466, Nasdaq Adv/Dec 1218/1739

[54anickel]

61. Closin' time

Dow 10,173.92 +51.40 (+0.51%)
Nasdaq 1,838.10 +1.61 (+0.09%)
S&P 500 1,104.24 +5.09 (+0.46%)
10-yr Bond 4.132% -0.056
30-yr Bond 4.938% -0.051
NYSE Volume 1,138,384,000
Nasdaq Volume 1,284,813,000

Close: Mild but broad based strength was noted in the early going with energy and biotech sectors helping to pace the way (semi on defensive) but this proved short lived in the wake of the today's economic reports. August Consumer Confidence came in at 98.2 vs the consensus of 103.4 while Chicago PMI was reported at 57.3 vs the consensus of 60.0. Although the data did disappoint, keep in mind that today market the first time confidence has fallen since February with the regional PMI report slowing from its 16-year high set in May. Other factors weighing on the market today were cautious comments ahead of INTC's (-1.7%) mid-quarter update on Thursday (potential downward revision to revenue range, price target/estimate cuts) and a cautious stance ahead of Friday's employment data. The weaker tone remained dominant into the afternoon but minor fresh session lows did not elicit much interest suggesting that the two session pullback was running out of steam. Over the last 90 minutes the averages staged a solid rebound with traders citing buy programs, end of month interest as well as short covering ahead of index changes that will be seen at the close of today's trade. Although volume did improve from Monday's anemic levels it remained far below average with the thinner trading conditions also likely playing a role in afternoon bounce. Treasuries performed well with a safe-haven bid, month end buying and lowered economic expectations underpinning. Russell 2000 +0.6%, SOX -0.7%, S&P Midcap 400 +0.7%, XOI +1.4%, NYSE Adv/Dec 2308/1005, Nasdaq Adv/Dec 1813/1242

3:30PM : The recent modest strength has dissipated to some extent with the averages edging back off of their intraday recovery highs (Dow and S&P 500 slightly positive, Nasdaq Comp never reached unchanged). This type of trade reflects a lack of interest on the long side that hampered the market thus far this week. Volume/volatility have improved vs yesterday which marked the lowest volume of the year for the Nasdaq exchange. A safe-haven bid, month end buying and lowered economic expectations have underpinned Treasuries but the long bond has worked off its best level of the day in afternoon trade. NYSE Adv/Dec 2125/1166, Nasdaq Adv/Dec 1548/1452


Have a great evening :hi:

[KoKo]

62. Kick! for our "Economy is in Peril Crowd" who might check in tonight...

Just so everyone knows who has 401-K's and wants their "Granny's" kicked off SS and think the "livin' is easy."

George Gershwin: "Porgy and Bess."