STOCK MARKET WATCH, Wednesday 15 September

[ozymandius]

Wednesday September 15, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 127
DAYS UNTIL W* GETS HIS PINK SLIP 48
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 278 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 332 DAYS
WHERE ARE SADDAM'S WMD? - DAY 545
DAYS SINCE ENRON COLLAPSE = 1028
Number of Enron Execs in handcuffs = 19
Recent Acquisitions: Ken Lay
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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

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AT THE CLOSING BELL ON September 14, 2004

Dow... 10,318.16 +3.40 (+0.03%)
Nasdaq... 1,915.40 +5.02 (+0.26%)
S&P 500... 1,128.33 +2.51 (+0.22%)
10-Yr Bond... 4.13% -0.02 (-0.43%)
Gold future... 407.50 +1.50 (+0.37%)





GOLD, EURO, YEN and Dollars

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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

---

[54anickel]

1. Good morning Ozy, my those futures are looking glum today. n/t

[ozymandius]

3. Good morning 54anickel and all.

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

It looks like the markets have hit a wall. The Dow up one point two days ago, three points yesterday - it looks like we're driving without air in our tires.

At FSO Ike Iosif posted the monthly charts yesterday with this commnentary:

DJIA: It's been confined for nine months between resistance at 10750 and support at 9750. Although another run up to resistance can't be ruled out, one has to wonder whether it makes sense to expect a break-out, considering the plethora of signs pointing to an economic slowdown, and the strong correlation of cyclical issues to the performance of the economy.

-cut-

Those of you who follow me regularly probably recall that on 7-5-04, I concluded my interview with Dan Bistline by saying:

"The real question is whether the distribution process has been completed. We don't think so. The reason is this; it has been our experience over the years that when the distribution phase is over, we have a negative cross-over between inflows and outflows. Notice that at the moment, inflows exceed outflows. We need to have a sustainable reversal in order to conclude that the distributive phase is over, and the only option for the market is to go down, as it did following the cross-over in 2002. We don't have that yet. Given the plethora of negative divergences, we must conclude that in the short term the greater risk at this point is on the downside, but the fat lady hasn't sang, yet."

Since then the markets did decline, and after reaching a bottom in mid-August they have staged a spirited rally. I view the current rally as the part where "the fat lady sings." However, she is not completely done yet. I expect a pullback, but the evidence suggests that the overall move has not been concluded. For example, if we look at the RYDEX cash flow ratio, it just turned up. In the absence of an exogenous event, I can't see how the market can go down precipitously when the RYDEX cash flow ration is at such low levels. We see the same thing across the board. The short term indicators point to a top, but the intermediate-term ones suggest that the markets ought to be able to hold on for a bit longer (see Buy/Sell Equilibrium Indexes).

So this is one confirmation that we are almost out of air. I read a story yesterday about how this season's hurricanes can poke a big hole in any economic progress. Insurance companies sure look to get ravaged. One thing about insurance companies is that they have their monied interests spread far and wide. In a clinical sense, it will be interesting to see how huge insurance liabilities will affect certain sectors of the economy. The first sector that comes to mind is real estate.

[trogdor]

8. We haven't seen 10,750 in quite a while.

I'd put the resistance point at 10,350 - no higher. Nevertheless, it's time to sell, if you haven't done so already.

[54anickel]

2. Treasuries Down, One Eye on Looming Data

http://biz.yahoo.com/rb/040915/markets_bonds_treasuries_2.html

LONDON (Reuters) - U.S. Treasury prices drifted lower on Wednesday in largely subdued trade, with some focus on the day's economic numbers.
The New York Federal Reserve's Empire State manufacturing survey for September is released at 8:30 a.m. EDT, while U.S. August industrial production numbers are due at 9:15 a.m. EDT.

"The Empire State survey is the one that could move the markets but there is nothing really today that will set the scene for bonds," said one Treasury trader in London. "The CPI (consumer price index) tomorrow could be of more value."

snip>

"There is an underlying bid to the market and a lot of short positions have been squeezed out but the feeling is that there is no desire to go long either," the trader said.

snip>

The Empire State index was forecast by a Reuters poll of economists to be 18.80 in September, up from 12.60 in August.

U.S. industrial output in August was forecast to grow by 0.5 percent month-on-month, compared with 0.4 percent growth in July.

more...

[54anickel]

4. Not implausible: 25 bps from here to 2005

Greenspin vs the bond vigilantes.

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=35979

Come high water, low water or underwater, anything but hell, Greenspan will raise interest rates by 25 basis points at every meeting for this year - 2004. Then, he’ll stop, survey the price deflation his policies have wrought, shrug his shoulders and keep raising rates until the Fed Funds rates are around 4%. Worse, if the economy begins to slow (which it clearly seems to be), expect him not to move slower but faster.

This is heresy to the conventional bond/stock portfolio manager. He/she has been trained to think (based on the last 10 years) that interest rates rise only due to rising inflationary pressures. He/she associates low interest rates with weak economic growth rates and higher interest rates with higher economic growth rates.

snip>

Investors continue to doubt Greenspan. Greenspan has been unequivocal. He’s consistently said that rates are too low. They must go up. He has not associated levels of economic growth with the increase in rates. The only ponderous question he’s offered us is: At what speed do I raise interest rates? Quickly? In some "measured" fashion?

The financial markets have chosen to ignore his unequivocal statements that interest rates are headed higher. Instead, they continue to interpret interest rate moves based on the strong economy/high interest rate weak economy/low interest rate heuristic.

more...

[ozymandius]

7. Summary

I infer that Greenspan is operating under the influence of rosy rhetoric rather than having any basis in comprehensive economic data.

[54anickel]

11. Ya know Ozy, sometimes I wonder what Greenspin's been taking and

how I can get me some of that happy happy firewater.

I just have a lot of rhetorical questions running around in the back of my head.

Does he think that rates need to be higher in order to maintain foreign investment interest? Will higher rates alone be enough if the US is considered a risky investment due to the fundamentals of high deficits & consumer debt, low savings, slow economy, etc, etc,? Will foreigners be lured into investing into a declining buck just because the rates are higher - what's that gonna net out for you?

Have we somehow eliminated the idea of risk aversion over the years as evidenced by the growing popularity of hedgefunds and speculation?

What's really behind all this yacking of the central banks, especially Japan and China? Japan is talking about keep rates low until 2008 - is that with some sort of wink, wink to the Fed? China is again talking about floating the Yuan - is that with some sort of wink, wink to Pootie-Poot? China says now is not the time - are they waiting until such a move can do even more damage to the US?

Keeping in mind the world economy runs on oil, what's really going on here? All these competing oil pipeline routes buried in the news get me thinking - they each serve different interests. Looks like the world is in the process of picking teams and siding up. Meanwhile the US is playing catch-up by trying to acquire the oil needed to play the game at all.

Guess I've rambled long enough......

[ozymandius]

33. You gotta be a mega-millionaire to afford that fire water.

These are all great questions and each to which I can only suppose either rudimentary answers or lengthy rhetorical questions myself.

I believe that we cansafely assume that Russia is trying to counterbalance China by establishing some oxymoronic form of a centrally planned free market system.

This paragraph:

Keeping in mind the world economy runs on oil, what's really going on here? All these competing oil pipeline routes buried in the news get me thinking - they each serve different interests. Looks like the world is in the process of picking teams and siding up. Meanwhile the US is playing catch-up by trying to acquire the oil needed to play the game at all.

I suggest one start looking at Unocal. How that company behaves and the strings it pulls to protect its interests outwardly reflects discussions at the highest levels of U.S. Government. Unocal has its interests and former employees everywhere American troops are deployed or where troops will be deployed.

[54anickel]

39. Unocal - yes I remember when 9/11 awakened me from my happy, happy,

joy, joy stupor. I'd never heard of the Taliban before that day. So I and a buddy at work started Googling (man was the Internet slow that day). I came across an article that was mainly about human rights and how the Taliban treated women. That article also went into depth about Unocal working with this folks, with the admins blessings, on some important pipeline. I was so disgusted, that was when I woke up and decided it was time to drop that "My President and country can do no wrong" simple view of life.

Hey, what can I say. I was naive and fat and happy. That's when I got interested in world politics and economics. I swore I would never go back to being so un/ill-informed and blindly trusting our leaders again - no matter what party is in charge.

[UpInArms]

42. John Maresca - Unocal testimony before Congress Feb 1998

http://www.sumeria.net/politics/maresca.html

Testimony By
John J. Maresca
Vice President, International Relations,
UNOCAL Corporation

To House Committee On International Relations,
Submmittee On Asia And The Pacific
February 12, 1998
Washington, D.C.

Mr. Chairman, I am John Maresca, Vice President, International Relations, of Unocal Corporation. Unocal is one of the world's leading energy resource and project development companies. Our activities are focused on three major regions — Asia, Latin America and the U.S. Gulf of Mexico. In Asia and the U.S. Gulf of Mexico, we are a major oil and gas producer. I appreciate your invitation to speak here today. I believe these hearings are important and timely, and I congratulate you for focusing on Central Asia oil and gas reserves and the role they play in shaping U.S. policy.

Today we would like to focus on three issues concerning this region, its resources and U.S. policy:

The need for multiple pipeline routes for Central Asian oil and gas.

The need for U.S. support for international and regional efforts to achieve balanced and lasting political settlements within Russia, other newly independent states and in Afghanistan.

The need for structured assistance to encourage economic reforms and the development of appropriate investment climates in the region. In this regard, we specifically support repeal or removal of Section 907 of the Freedom Support Act.

<snip>

One obvious potential route south would be across Iran. However, this option is foreclosed for American companies because of U.S. sanctions legislation. The only other possible route option is across Afghanistan, which has its own unique challenges.

The country has been involved in bitter warfare for almost two decades. The territory across which the pipeline would extend is controlled by the Taliban, an Islamic movement that is not recognized as a government by most other nations. From the outset, we have made it clear that construction of our proposed pipeline cannot begin until a recognized government is in place that has the confidence of governments, lenders and our company.

In spite of this, a route through Afghanistan appears to be the best option with the fewest technical obstacles. It is the shortest route to the sea and has relatively favorable terrain for a pipeline. The route through Afghanistan is the one that would bring Central Asian oil closest to Asian markets and thus would be the cheapest in terms of transporting the oil.

Unocal envisions the creation of a Central Asian Oil Pipeline Consortium. The pipeline would become an integral part of a regional oil pipeline system that will utilize and gather oil from existing pipeline infrastructure in Turkmenistan, Uzbekistan, Kazakhstan and Russia.

The 1,040-mile-long oil pipeline would begin near the town of Chardzhou, in northern Turkmenistan, and extend southeasterly through Afghanistan to an export terminal that would be constructed on the Pakistan coast on the Arabian Sea. Only about 440 miles of the pipeline would be in Afghanistan.

...more...

[54anickel]

48. Supports Ozy's statement nicely. Makes you wonder why Shrub didn't

finish the job in Afghanistan first - was it a matter of trying to get 2 for 1? Over-reaching a bit?

[UpInArms]

49. well, that pipeline was to supply the power for the

Enron plant in Dahbol - that plant is now paid by the Indian government not to produce power as it is cheaper to pay them not to produce than buy the power that it would produce because the cost of production is too high (crazy, huh?)

therefore, that pipeline lost its appeal

here's some background:

http://www.cooperativeresearch.org/timeline.jsp?timeline=complete_911_timeline&theme=oil

November 1993


The Indian government gives


The Dabhol power plant.
approval for Enron's Dabhol power plant, located near Bombay on the west coast of India. Enron has invested $3 billion, the largest single foreign investment in India's history. Enron owns 65 percent of Dabhol. This liquefied natural gas powered plant is supposed to provide one-fifth of India's energy needs by 1997 It is the largest gas-fired power plant in the world. Earlier in the year, the World Bank concludes that the plant is “not economically viable” and refuses to invest in it. Enron apparently tries to make the plant financially viable by investing in gas fields in nearby Uzbekistan (see June 24, 1996), but it cannot get that gas to Dabhol without a gas pipeline through Afghanistan (see June 24, 1996 and June 1998 (B)). Construction of the plant is abandoned just before completion (see June 2001 (J)).

October 21, 1995


The oil company Unocal signs a contract with Turkmenistan to export $8
billion worth of natural gas through a $3 billion pipeline which would go from Turkmenistan through Afghanistan to Pakistan. Political considerations and pressures allow Unocal to edge out a more experienced Argentinean company for the contract. Henry Kissinger, a Unocal consultant, calls it “the triumph of hope over experience.”


This map shows how Enron planned to connect its gas fields in Turkmenistan to its Dabhol power plant. The pipelines in blue are preexisting; the rest needed to be built.

...lots more...

the construction on that pipeline began in Jan 2002

http://www.usatoday.com/news/opinion/2002/01/14/ncguest2.htm

Build pipeline to Afghans' future

By Peter Schweizer

Now that the war in Afghanistan is essentially over, pulling off the country's reconstruction will not be easy. But, as Secretary of State Colin Powell has said, the USA has "an enormous obligation to not leave the Afghan people in a lurch."

One potential solution could give the United States an opportunity to help Afghanistan, help our friends and boost our own economy, all at the same time.

For two centuries, Afghanistan has been a victim of its geography, wrangled over by others because of its strategic location. Now, as the United States looks toward rebuilding Afghanistan, geography may prove to be the country's best asset.

North and west of Afghanistan are enormous oil and natural gas reserves in countries such as Turkmenistan, Kazakhstan, Uzbekistan and Azerbaijan. The region's available but untapped energy resources are second only to those of the Middle East.

Production in this area now is about 1 million barrels a day. But daily production could rise to 3.4 million barrels or more by 2010 if a way is found to get the energy onto world markets.

That's where Afghanistan becomes an intriguing option.

During the 1990s, several groups of international energy companies considered building a massive pipeline from Central Asia to the sea, where ships could transport the oil to the world. One option was a pipeline to Turkey via Azerbaijan. Another was a pipeline across Iran to the Persian Gulf. A third option, considered by Unocal and others, was to construct a 1,040-mile pipeline that would cross Afghanistan to the Pakistani coast.

Taliban hindered development.

...more...

[54anickel]

50. Thanks UIA! This is what I love about DU the most!!! Sharing that

wealth of info that's available out there.

[UpInArms]

53. here are a couple of other tidbits for you

http://www.halliburton.com/news/archive/2001/esgnws_051501.jsp

2001 Press Releases

FOR IMMEDIATE RELEASE: May 15, 2001

HALLIBURTON SUBSEA OPENS CASPIAN MARINE BASE

ABERDEEN, Scotland - Halliburton International Inc. and KASPMORNEFTELOT (KMNF), the marine division of the State Oil Company of Azerbaijan Republic (SOCAR), have entered into a 12-year contract for a marine base and associated services to support Halliburton Subsea offshore construction activity in the Caspian region. Halliburton Subsea is a business unit of Halliburton Company's (NYSE: HAL) Energy Services Group.

The base, with a 6,000-square metre lay down area, is located at KMNF's Southern Basin adjacent to Caspian Shipyard. The base will be primarily utilized to support Halliburton Subsea's catamaran crane vessel Qurban Abbasov (previously known as the Titan 4) during the restoration and upgrade of the vessel and during the forthcoming offshore construction, pipelay and subsea activities. The site will also be developed to provide warehouse, office and training facilities that will include advanced diver and life support technician training, utilizing the company’s 16-man modular saturation system.

The Qurban Abbasov is operated by Halliburton Subsea in an alliance agreement with SOCAR for a period of 12 years. It will provide an advanced, stable, dynamically positioned construction platform for saturation and remote vehicle diving; flexible and bundle pipeline installation with trenching; emergency pipeline repair, subsurface well intervention with wire line; and coiled tubing. It also will be used in flotel configuration for hook-up and commissioning work.

"The acquisition of the marine base is a further indication of our commitment to the Caspian region and to the success of the partnership arrangements with SOCAR," said Edgar Ortiz, president and chief executive officer, Halliburton’s Energy Services Group.

...more...

http://aztlan.net/judwatch.htm



http://www.wrmea.com/archives/april03/0304012.html

excerpt:

Oil Credentials

Khalilzad’s oil credentials are no less impeccable than those of President Bush, Vice President Cheney, or National Security Adviser Condoleezza Rice, who served on Chevron’s board of directors. Like current Deputy Secretary of State Richard Armitage, Khalilzad was a paid adviser to UNOCAL Corp., a U.S. oil company that was competing for Taliban approval to construct a $2 billion gas and oil pipeline across Afghanistan. While Khalilzad worked at the for- profit Cambridge Energy Associates, he conducted a risk analysis for UNOCAL. By 1997 he was a participant in UNOCAL’s negotiations with the Taliban. Moreover, as a paid lobbyist for UNOCAL, he urged the Clinton administration to take a softer line on the Taliban.

Khalilzad’s attitude to the Taliban seems to have correlated well with UNOCAL’s efforts to build the pipeline. At the time, he defended the Taliban in an opinion piece published in The Washington Post. “The Taliban do not practice the anti-U.S. style of fundamentalism practiced by Iran,” he wrote in 1996. “We should…be willing to offer recognition and humanitarian assistance and to promote international economic reconstruction. It is time for the United States to re-engage,” he concluded.

In 1998, however, when the Taliban were implicated in the attack on the U.S. embassies in East Africa, UNOCAL ended its contact with the Taliban, and Khalilzad changed his tune. In the Winter 2000 issue of the Washington Quarterly, he co-authored “Afghanistan: Consolidation of a Rogue State” (<www.twq.comwinter00/231bayman.htm). In that article he proposed the following six-step strategy for transforming Afghanistan: 1) Change the balance of power by supporting anti-Taliban forces; 2) Oppose the Taliban ideology by strengthening Voice of America broadcasts; 3) Press Pakistan to withdraw its support for the Taliban; 4) Aid the victims of the Taliban to bolster their position; 5) Support moderate Afghans through funding those who are anti-Taliban in their diaspora; and 6) Elevate the importance of Afghanistan at home by raising the profile of the conflict with the Taliban in the U.S.—a strategy that has materialized into the administration’s post-9/11 policy.

...more...

http://www.globalsecurity.org/military/world/afghanistan/karzai.htm

Hamid Karzai

Hamid Karzai (born December 24, 1957) is the interim president of the Afghan Transitional Administration. He was named Chairman of the Afghan Transitional Administration during the Bonn Agreement, December 5, 2001, and his inauguration took place on December 22, 2001. He was named President at the Loya Jirga session on June 19, 2002. Official elections are scheduled to take place in Afghanistan on October 9, 2004.

<snip>

Several sources, most notably the documentary film Fahrenheit 9/11, have reported that Karzai once worked as a consultant for the oil company Unocal. Spokesmen for both Unocal and Karzai have denied any such relationship. The claim appears to have originated in the December 9, 2001 issue of the French newspaper Le Monde. Some have suggested that Karzai was confused with U.S. ambassador to Afghanistan Zalmay Khalilzad.

...more...

[54anickel]

54. Sheesh! Call me a CT but it sure seems like everthing that's been

happening as been by design. The culmination of some master plan.

[UpInArms]

57. wouldn't you like to see Cheney's energy papers

that were drafted and paid for by taxpayer dollars outlining what the plan actually is?

I have heard that it does include maps of the Iraqi oilfields - remember that was done in May 2001.

[54anickel]

63. Yes, but alas those papers have been hidden away in secrecy just

like everything else of importance in this admin. Then again, they did say something about Shrub being a father figure to the nation. Can't you just hear him saying, "Now, you hush there child. It's OK, nothing for you to be concerned with. Daddy will take care of it. Trust me." :puke:

[ozymandius]

5. WrapUp by Jim Willie

Jim Willie recommends this site.

TECHNICAL ANALYSIS: CONTINUATION PATTERNS

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 product offerings, cost structure, array of customers, trend for product demand, debt burden, and financial balance sheet all contribute toward its fundamentals. Likewise, the study of a commodity or currency involves numerous key factors intimately related to their supply and demand. On the other side of the analytic workshop is the chart room, where price movement over time is examined for defined patterns. It is my opinion that the best of forecasts employ both methods. Two weeks ago several reversal patterns were displayed and discussed. Such patterns can be dramatic. Here, let’s review continuation patterns. What makes chart analysis more of a challenge is the integration of reversals, continuations, and even hesitations into a steady stream of patterns in need of identification and recognition.

-cut-

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. Many advocates of technical analysis believe that imminent fundamental dynamics, such as changes to profitability or dilution to shares or introduction of new products, are all factored into the chart pattern. Correspondingly, advocates believe the commodity charts incorporate the dynamics behind changes to supply, either from discoveries of materials or from government inflation, and the dynamics behind changes to demand, either from industrial growth or from economic expansion. This describes my view. Too often, a chart will indicate changes which are not evident in the underlying fundamentals until a few weeks pass. Then what the chart told seems obvious, but after the fact. My main shtick criticism of critics to chart analysis is that they dismiss the correct early warnings and their methods, then later, they say “it was obvious” in a truly unethical manner which brings their personal integrity into question. In other words, they did not understand or appreciate the methods before or after some sense of proof was offered.

-cut-

NEWS TIDBITS

World oil prices shot higher as companies operating in the Gulf of Mexico braced for output disruptions in the face of powerful Hurricane Ivan. Light crude jumped over a dollar per barrel. Ivan, a rare category 5 hurricane, is expected to cross the western edge of Cuba on Monday and enter the Gulf of Mexico on Tuesday. It has veered west from its previous path toward Florida, and is now forecasted to hit the US coast near Biloxi and Mobile. The Gulf is home to about 25% of US oil & gas output. Shell Oil said it had shut 270,000 bpd of oil production in the eastern Gulf and would evacuate workers from the central Gulf by Wednesday. OPEC ministers may resist calls to raise oil output quotas much, if at all, when they meet this week for fear of turning a decline from record prices into a rout. Cartel delegates say the assumption of legitimized moves in existing quotas to higher official supply limits by a hefty 6% at Wednesday's meeting could prove wide of the mark. Some expectations had been for OPEC to lift formal production quotas from 26 million barrels a day to match actual supply now that is running at least 1.5 million bpd higher, to help drag prices below $40 a barrel. The average US retail price of gasoline fell two cents over the last two weeks to about $1.86 a gallon, restoring a trend of declines after a modest increase late last month, according to the nationwide Lundberg survey of about 7000 gas stations released on Sunday.

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

[54anickel]

9. Jim Willie does not speak very highly of the US$ again in this article

snip>

The mega-question in the gold camp these days focuses upon whether, as is typical of Elliott Waves, a double impulse correction will take place now that wave #3 has completed. Typically, three legs down and two counter-trend legs back up. We have seen the first correction high in May. The 50-week moving average has been penetrated, although hardly in convincing fashion. The second upleg cannot seem to find enough strength to surpass the 92 May high. The double Elliott upward impulse has not reached completion, usually to a level not to exceed the second correction, and might not occur at all. A US Economic recovery would surely justify a second sizeable bounce in the USDollar currency. The lack of job creation makes a lie out of government GDP growth figures. Claimed growth derives from understated price inflation and hedonic adjustments, to make a flat economy appear growing. The arrival of widespread price inflation, horrendous trade gaps, and uncontrolled federal deficits all work to limit any upward movement in our crippled currency. These nagging negatives are the backbone behind the US $ weakness, and have not been rectified in any way whatsoever.

We await the outcome. Resolution might be taking so long partly because the typical pattern has been disrupted, and upward progress from technically (chart) driven demand must be neutralized over time. Both fundamental weakness and technical weakness point to upcoming declines in the DXY index. See the Adam Hamilton article on “The USDollar Bear Intact” for a fine overall analysis. The USDollar has no business rising here. If it does, a combination of economic reporting deception (phony recovery), hedge fund repayment of US$-based loans (cash margin calls), and sheer desire by central banks (interventions) for world reserve currency health will rule the day.

[54anickel]

6. US loses 400,000 IT jobs

http://www.theregister.co.uk/2004/09/15/silicon_valley_jobs_shrink/

America saw 403, 300 hi-tech jobs disappear between April 2001 and April 2004. More than half the jobs lost were lost after the recession was pronounced officially over, by the National Bureau of Economic Research, in November 2001. San Francisco and San Jose were the worst-hit places, according to the survey from the University of Illinois-Chicago.

The fall represents 18.8 per cent of America's technology jobs - researchers estimate there are 1,743,500 hi-tech jobs in total. The survey looked at jobs in six areas and was paid for by the Washington Alliance of Technology Workers - a Seattle group which wants to unionise Microsoft workers.

Marcus Courtney, president of WashTech, said: "It is stunning to think that in every region of the country, we have fewer high-tech jobs today than we did three years ago. We must focus on exporting our products instead of our jobs to turn this critical situation around."

bit more...


Study Details Three Year U.S. High-Tech Job Bust

http://www.washtech.org/news/industry/display.php?ID_Content=4685

Seattle, Wash--- A new report by the Center for Urban Economic Development at the University of Illinois, Chicago, shows that U.S. high-technology workers are still facing chronic unemployment and a serious jobs deficit despite an economic recovery being declared three years ago.

The report, entitled "America's High-Tech Bust," found that the U.S. high-tech economy continued to lose a whopping 200,000 jobs after the recession was declared over in November 2001 by the National Bureau of Economic Research.

This is the first time a report has tried to tackle the impact of the economic bust for high-tech workers at a national level.

The report found that high-tech workers have seen a doubling of unemployment rates in the past three years. The University of Illinois at Chicago conducted the research for the Washington Alliance of Technology Workers, a local of the Communications Workers of America.

snip>

Marcus Courtney, president of WashTech, noted that only a few years ago, the high-tech economy in the U.S. was the most dynamic sector and touted as the new economy that was going to be the backbone of job creation for the future as the nation moved away from its manufacturing roots. "It is stunning to think that in every region of the country, we have fewer high-tech jobs today than we did three years ago........

more...

[UpInArms]

20. not just IT - the layoffs keep coming

and for so many reasons :(

http://www.freep.com/news/statewire/sw104200_20040914.htm

MGM lays off 150, joining Greektown in blaming casino tax increase

DETROIT (AP) -- The MGM Grand Detroit Casino said Tuesday that it is laying off 150 workers because of an increase in Michigan's casino tax from 18 to 24 percent.

The casino tax increase was part of a state effort to close a gap in Michigan's budget for fiscal 2005, which begins Oct. 1. The increase took effect Sept. 1.

MGM Grand Detroit employs 2,250 people.

Greektown Casino eliminated 182 jobs last month, citing the tax. The city's third casino, MotorCity, has not decided what steps to take, said spokesman Tom Shields.

"The 33 percent tax increase is the only reason for the layoffs," MGM Grand spokesman Bob Berg told The Detroit News. "When costs suddenly go up, something has to go. The layoffs are in all areas of the casino operation."

...more...

http://www.nytimes.com/2004/09/15/nyregion/15newark.html

Amid Job Cuts, Housing Chief Added Luxuries

When the Newark Housing Authority announced that it would lay off 99 employees this month, Harold Lucas, the agency's executive director, blamed the federal government for cutting the agency's subsidy by 10 percent over the past three years.

"We were able to hold off on the layoffs for two years and we boiled it down to the bare minimum, but we're down to nothing," Mr. Lucas said in an interview with The Star-Ledger, published on Sept. 3. "Now it's people."


Advertisement


Yet in the past 18 months, the agency - which handles housing for 32,000 residents - has spent more than $400,000 for new cubicles, carpets and other renovations to offices and conference rooms at the authority's six-story headquarters on Broad Street, according to documents obtained by The New York Times and interviews with employees and vendors.

The purchases included a $2,850, 42-inch plasma television that was installed in Mr. Lucas's office in early July, a new $215 vanity for Mr. Lucas's private bathroom and more than $14,000 worth of other audio-visual equipment - from projectors to wireless microphones and televisions - for the headquarters building, according to agency invoices and interviews with employees and vendors.

The authority also spent more than $42,000 on two new sedan cars, bought in July and August and driven by top officials. One of the cars, a black Mercury Marquis, has leather seats. The cars are at a parking lot next to the headquarters building.

...more...

[54anickel]

24. Well hey, you gotta admit Newark Housing Authority is doing it's

part to take the spending baton in hand and do a little capital investing. Isn't that what we have been expecting of corporations for 2-3 years now?

Oh wait, that was assumed to be capital investments to grow the company, to employ more folks and create more products and services, wasn't it? So, with all high profits we've seen companies sit on it, dole it out to CEOs in some recently reported outrageous pay increases and bonuses, or pissed away on items to keep the Lucas' of the world happy and entertained.
:puke:

[UpInArms]

10. daily dollar watch

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

Last trade 88.66 Change +0.20 (+0.23%)

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=MTFH81505_2004-09-15_11-54-48_L15652227

FOREX-Dollar stalls as ranges dwindle, awaits data push

LONDON, Sept 15 (Reuters) - The dollar stalled against the euro on Wednesday, with markets mesmerised by the prospect of a U.S. rate rise next week, but recovered against the yen after tipping lower on speculation about a Chinese revaluation.

Most investors expect the Federal Reserve to raise rates by a quarter point at its September 21 policy meeting, to 1.75 percent, but the focus will be on the accompanying Fed statement and any clues it may give on further rate rises.

After Tuesday's data showed a record U.S. current account deficit, the market was looking ahead to industrial production numbers which were expected to show an increase in August, keeping September rate rise expectations on track.

"Exchange rates are settling into ranges. Yesterday we had disappointing news out of the U.S. but today we're looking for a bit of relief for the dollar from the U.S. numbers," said Kristjan Kasikov, currency strategist at Calyon in London.

<snip>

U.S. industrial production is due at 1315 GMT and is forecast to rise 0.5 percent on the month in August from 0.4 percent in July, while capacity utilisation is seen rising to 77.4 percent from 77.1 in July.

The Federal Reserve Bank of New York's regional survey of factory activity, due at 1230 GMT, is expected to show a jump to 18.8 in September from 12.6 in August.

...more...

8:30am 09/15/04 U.S. JUNE INVENTORIES REVISED TO 1.1% FROM 0.9%

8:30am 09/15/04 U.S. JULY INVENTORIES UP 0.9% VS. 0.8% EXPECTED

8:30am 09/15/04 U.S. JULY RETAIL INVENTORIES RISE 0.6 PERCENT

8:30am 09/15/04 STRONGEST TWO-MONTH GAIN IN INVENTORIES IN 4 YEARS

8:30am 09/15/04 U.S. JULY INVENTORY-SALES RATIO RISES TO 1.32

8:38am 09/15/04 U.S. SEPT. EMPIRE STATE INDEX 28.3 VS 13.2 IN AUG.

http://cbs.marketwatch.com/news/story.asp?guid=%7B14C5F916%2DA274%2D419C%2D8809%2DF4E6A212092F%7D&siteid=mktw

U.S. July inventories rise 0.9%

WASHINGTON (CBS.MW) - Inventories at U.S. businesses grew 0.9 percent in July, outpacing the 0.6 percent increase in sales, the Commerce Department estimated Wednesday.

The inventory-to-sales ratio rose to 1.32 from 1.31 in June and a record low 1.30 in May.

Economists were expecting inventories to rise 0.8 percent, according to a survey conducted by CBS MarketWatch.

Inventories increased a revised 1.1 percent in June, up from the 0.9 percent originally estimated. It's the strongest two-month increase since late 1999.

The growth in inventories will add to third- quarter gross domestic product growth, but its long-range effect on the economy is ambiguous.

Businesses could be purposely building up their inventories to meet anticipated growing demand, which would be very bullish for growth. Or they could be accidentally ordering more goods than they can sell, which would ultimately lead to falling orders, production and employment.

There is no indication that inventories are extremely overbuilt as yet.

...more...

Have a Great Day Marketeers!

[54anickel]

12. So, which do you think it is?

Businesses could be purposely building up their inventories to meet anticipated growing demand, which would be very bullish for growth. Or they could be accidentally ordering more goods than they can sell, which would ultimately lead to falling orders, production and employment.

Could it be that oops reason? They were lead, by the Wizard himself, to belief we were headed to a strong recovery just a few months ago before we hit this little "bump in the road".

Guess time will tell. I know I won't be participating in that consumer driven economy for quite a while yet. When I do get a job, those paychecks are spoken for by debts to myself and others for quite a while.

[UpInArms]

15. I'm so glad that you asked that question, 54anickel

it made me go and look back at this timeline:

http://www.huppi.com/kangaroo/Timeline.htm

specifically this part:

1929

Herbert Hoover becomes President. Hoover is a staunch individualist but not as committed to laissez-faire ideology as Coolidge.

More than half of all Americans are living below a minimum subsistence level.

Annual per-capita income is $750; for farm people, it is only $273.

Backlog of business inventories grows three times larger than the year before. Public consumption markedly down.

Freight carloads and manufacturing fall.

Automobile sales decline by a third in the nine months before the crash.

Construction down $2 billion since 1926.

Recession begins in August, two months before the stock market crash. During this two month period, production will decline at an annual rate of 20 percent, wholesale prices at 7.5 percent, and personal income at 5 percent.

Stock market crash begins October 24. Investors call October 29 "Black Tuesday." Losses for the month will total $16 billion, an astronomical sum in those days.

Congress passes Agricultural Marketing Act to support farmers until they can get back on their feet.

[54anickel]

17. ACK!!! Sorry I asked! n/t

[ozymandius]

36. One marker

Clearance stores like Big Lots have been jammed full of merchandise. They were already putting Christmas kitsch on the shelves at the end of August. Is this indicative of where the manufacturing surpluses are going?

[UpInArms]

13. more reports

9:15am 09/15/04 U.S. AUG. INDUSTRIAL PRODUCTION UP 0.1% V FORECAST 0.4%

9:15am 09/15/04 U.S. AUG. CAPACITY UTILIZATION 77.3%, SAME AS FORECAST

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38245.3857175926-820670568&siteID=mktw&scid=0&doctype=806&

U.S. Aug industrial production up 0.1%, cap use 77.3%

WASHINGTON (CBS.MW) -- Output of U.S. factories, mines and utilities rose modestly in August after July's gains were revised upward, the Federal Reserve said Wednesday. Industrial output rose 0.1 percent last month to 116.6 on the Fed's index, surpassing the pre-recession peak of 116.4 recorded in June, 2000. Capacity utilization remained unchanged at 77.3 percent in August after July's initial estimate was revised upward from 77.1 percent. Economists had been expecting industrial production to rise 0.4 percent and capacity utilization to reach 77.3 percent, according to a survey conducted by CBS MarketWatch.

[54anickel]

14. Investors choose to ignore warnings

http://cbs.marketwatch.com/news/story.asp?guid=%7B788519B1%2DF65E%2D411E%2DAC62%2DB4133BFE28A1%7D&siteid=mktw

SAN DIEGO (CBS.MW) -- Has information that used to make investors sit up and take notice become irrelevant?

Yes, and it's a sad commentary on the state of mind of investors who now greet SEC investigations, critical news stories and deteriorating fundamentals with little more than a yawn.

It's almost as if Enron (ECSPQ: news, chart, profile) and Worldcom never happened.

Issues of importance, such as earnings quality, are now pretty much ignored until confirmed by an out-and-out earnings debacle.

The complacency is most evident with investors in companies whose sky-high dividend yields made them an investment of choice for individuals looking for alternatives to single-digit money market funds. Their popularity, despite the complexities and often arcane nature of their accounting and business models, has created a mockery of the old notion that the higher the return, the higher the risk. (Multiply that about 10 times for companies whose financial statements can be difficult to decipher.)

more...

[UpInArms]

16. pre-opening blather

briefing.com

09:19 ET S&P futures vs fair value: -0.4. Nasdaq futures vs fair value: - 9.5. A weaker than expected Industrial Production figure for August (+0.1% vs consensus +0.5%) hasn't helped the futures market, which continues to point to a relatively flat start for the broader market and a weak beginning for the Nasdaq, and specifically, the tech sector... latter being impacted by the earnings warnings from XLNX and CLS and a Goldman Sachs downgrade of both the Software and IT Hardware/Systems groups

08:54 ET S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: - 10.0.

08:41 ET S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: - 9.0. Reports for Business Inventories (+0.9%) and the NY Empire State Index (28.3) both surprised on the upside, offering some hope with respect to improved levels of economic activity... Futures market improved slightly on the releases, but thus far continues to point to a modestly lower start for the cash market as several earnings warnings from notable companies like Coca-Cola (KO), Celstica (CLS) and Tribune Co. (TRB) are acting as a countervailing force

ino.com

The December NASDAQ 100 was lower overnight due to light profit taking as it consolidates some of this week's gains but remains poised to test the 62% retracement level of the June-August decline crossing at 1446.99. Stochastics and the RSI are overbought hinting that a short- term top might be near. Closes below the 10-day moving average crossing at 1406.60 would signal that the rebound off August's low has come to an end. The December NASDAQ 100 was down 4.50 pt. at 1434 as of 5:54 AM ET. Overnight action sets the stage for a steady to weaker opening by the NASDAQ composite index later this morning.

The December S&P 500 index was slightly lower overnight as it consolidates above the 75% retracement level of the July-August decline crossing at 1125.15. If the rally continues, a test of gap resistance crossing at 1131.19 is December's next upside target. Stochastics and the RSI are bullish but overbought hinting that a short-term top might be in or is near. Closes below the 10-day moving average crossing at 1121.24 would signal that a short-term top has likely been posted. Overnight action sets the stage for a steady to weaker opening when the day session begins later this morning.

[UpInArms]

18. 9:33 markets are open

Dow 10,294.71 -23.45 (-0.23%)
Nasdaq 1,906.80 -8.60 (-0.45%)
S&P 500 1,125.98 -2.35 (-0.21%)
10-Yr Bond 4.162% +0.029

[54anickel]

19. China's Confounding Contradictions

http://www.washingtonpost.com/wp-dyn/articles/A21989-2004Sep14.html

snip>

And yet it is precisely because this isn't really a market economy that there is some hope that the heavy-handed "administrative measures" taken by the government might actually succeed in recapitalizing the banking system, restructuring money-losing state-owned enterprises and engineering a "soft landing" for the overheated economy.

snip>

This is the China that has learned well the lessons of the last Asian economic crisis and now insists on having strong institutions in place before it fully opens its economy and deregulates its financial system.

It is the China whose officials made clear this week that they are open to managing and limiting the growth in textile exports to the United States after the expiration of quotas later this year.

And it is the China that is offering to reduce its massive trade surplus with the United States by purchasing all manner of high-tech capital equipment, if the United States would only ease Cold War-era restrictions on technology transfers.

snip>

It is the China that wants all the respect that comes with being a superpower, along with the concessions accorded a poor, developing country.

And it is the China that is quick to see in every clash of interests or critical comment a proof of some long-term U.S. strategy to keep China from taking its rightful place as a leading political, military and economic power.

more...

[54anickel]

21. Carmakers Face Huge Retiree Health Care Costs

http://www.nytimes.com/2004/09/15/business/15retire.html

snip>

While soaring medical costs are an issue for all employers in the United States, for older domestic manufacturers the nation's health care system is a competitive double whammy. That is particularly true for G.M., the world's largest - but far from the most profitable - automaker.

G.M. covers the health care costs of 1.1 million Americans, or close to half a percent of the total population, though fewer than 200,000 are active workers while the rest are retirees, children or spouses. Not only are such costs escalating rapidly, but G.M.'s rivals, based in Japan and Germany, have virtually no retirees from their newer operations in the United States and, at home, the expenses are largely assumed by taxpayers through nationalized health care systems.

Toyota, the industry's most profitable automaker, employs 31,000 Americans and also faces rising health care costs, but not to any great extent for its retirees. So while G.M. faces a $63 billion bill for retiree health care in the coming decades based on its projections for its current and future retirees, Toyota said in its latest annual report that its retiree health care obligation was not even large enough to affect its profits significantly.

"To saddle the cash flow of American businesses with an obligation that other competitors do not have creates serious long-run disadvantages," said Uwe Reinhardt, a Princeton University economist specializing in health issues.

"They are basically social insurance systems," he said of the Big Three domestic automakers: G.M., Ford and the Chrysler division of DaimlerChrysler. "Detroit is like a bunch of countries with older populations."

snip>

"We're spending more on health care and less on the auto business, and frankly that does not work," said John Devine, G.M.'s chief financial officer. "A system that has it solely on the back of U.S. business I don't think is going to be sustainable."


Yet everyone pooh-poohed Clinton's warning that we were facing a looming healthcare crisis in this country, and Shrub's answer is again to put the rising costs on the back of the workers. Oh, but you'll get a tax break on the money you manage to sock away to cover such expenses.:eyes:

[UpInArms]

22. Lawmaker Warns Companies Not to Dump Pensions

http://www.reuters.com/newsArticle.jhtml?type=domesticNews&storyID=6236138

WASHINGTON (Reuters) - Struggling U.S. companies must not use the federal pension agency as a "dumping ground" for their pension plans in order to survive, a key lawmaker working on pension reform legislation warned on Tuesday.

With some U.S. airlines skipping pension payments and considering defaulting on their retirement obligations, Ohio Republican Rep. John Boehner said such moves could lead to a taxpayer bailout of the pension agency, or higher insurance premiums from healthy companies to keep the agency going.

He asked the business community to pressure companies not to deepen the crisis by shedding their retirement plans on the insurer, the Pension Benefit Guaranty Corp. (PBGC).

"I'm concerned about the possibility of a company using the PBGC as a pension dumping ground to boost their economic prospects and get a leg up on the competition," Boehner, chairman of the House Education and Workforce Committee, said in a speech at the U.S. Chamber of Commerce.

Making the PBGC take over the pensions "isn't fair to the workers or taxpayers," Boehner said. He is working on a bill to reform the system of traditional "defined benefit" pensions insured by the agency, but said he did not expect it to start moving through Congress until next year.

...more...

[54anickel]

26. Oh Sh*t! Let's face it UIA, we've returned to the old robber barron

days. An economic crisis looms everywhere you turn, pensions, SS & Medicare, health care & insurance, deficit spending gone made, hedge-funds and whatever else you can think of. The pyramid-scheme is coming to a close. The deck of cards we've made the foundation of is ready to collapse. The tax-payer can't possibly bail all this sh*t out of the dingy at the same time, yet that's just what we are expected to do. A cleansing collapse is looking good right now. Let's just get the damn thing over with.

Gee, am I sounding a bit pessimstic today?

[UpInArms]

28. you sound no more pessimistic

than I feel.

It really doesn't look very promising. But the buck is up today!

[ozymandius]

34. Just look at all of our government's obligations.

Is it any wonder why private funding of the deficit has faltered? Only central banks have been stepping up their purchase of the U.S. government - because that's in their economic best interest.

Has anything changed in the past week among the lineup of buyers at bond auctions?

Is our canoe full of over-obligated mud yet? Who is going to bail us out when we are better than waist deep in the stuff?

[UpInArms]

37. we have about run into the ceiling on the debt

http://www.ombwatch.org/article/articleview/2320/1/259/

National Debt Limit Countdown

On August 2, Treasury Secretary John Snow urged Congress to raise the federal debt limit without delay, and warned that the limit will be reached by late September or early October.

Others have speculated that gimmicks can be used to keep from reaching the limit until mid- or late November. One way that has been used in the past is not making scheduled payments into the Federal Employee Retirement System pension fund and after the ceiling is raised, repaying the "borrowed" amounts (with interest). This would allow action on the debt limit to be postponed until after the election.

Following is a brief Q & A about the debt limit.

What is the debt limit?
The debt limit or ceiling is the legal amount -- set by statute -- up to which the government can go into debt. Currently it is set at $7.384 trillion. Increasing debt over this limit is illegal.

What causes the national debt to grow?
Every time the government runs a annual deficit, meaning revenue is not sufficient to cover spending, it must borrow money, which increases the national debt. Record deficits have become the norm under this administration, because of a combination of factors: the economic downturn following 9/11, the war on terrorism, the Iraq war, and, perhaps most significant, the huge tax cuts in 2001 and 2003 that dramatically reduced revenue. The Office of Management and Budget recently estimated the deficit for fiscal year 2004 at $445 billion, adding $445 billion more to the national debt.

What happens if the debt limit is surpassed?
It is considered unthinkable that the U.S. Government would default on its debt. The catastrophic results would include chaotic bond markets and soaring interest rates. Thus, the debt ceiling will be raised. The only question is when, since raising the debt limit is a political hornet's nest, especially in an election year.

When was the last time the debt ceiling was raised?
It was last raised in May 2003 by a record $984 billion. Since Bush entered office in January 2001, the debt limit has been increased by more than $1.4 trillion.

[UpInArms]

41. sneaky move that raised the debt limit without debate

http://washingtontimes.com/upi-breaking/20040623-021308-6453r.htm

excerpt:

House Republicans used a procedural move Tuesday to place language in the body's 2005 defense appropriations bill that allows the GOP to avoid a potentially embarrassing vote on raising the federal government's allowed debt limit.

The move, derided by deficit and budget hawks, allows House and Senate Republican leaders to insert an increase of the current $7.34 trillion debt limit to $8.074 trillion without approval of the original vehicle for the move, the 2005 budget resolution, which remained stalled in the Senate.

It is a smart political move as it avoids a debate on C-Span regarding the increases in federal spending in the last several years as the GOP has controlled both houses of Congress and the White House.

With a nearly half-trillion-dollar federal deficit expected this year, placing the procedural language in a $417 billion defense bill few Democrats would be willing to oppose in an election year for fear of looking soft on defense guaranteed House approval with little fuss.

...more...

[54anickel]

43. So is Kerry talking about any of this BS or is it considered over the

heads of most of the public? :shrug:

[UpInArms]

44. here's a start

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x828633

"He chose and he chose and he chose and every single time it was middle-class Americans who paid the price," Kerry said. "George Bush (news - web sites) accomplished all this in only four years. Imagine what he could do in another four years."

Kerry cited a litany of statistics -- job losses, 8 million Americans looking for work, 45 million without health insurance, 4.3 million more at the poverty level, 220,000 who could not afford to go to college last year, and a $1,500 decline in the average family's income.

"We know the truth," he said. "Nearly every choice has made it worse. You can even say that George Bush is proud of the fact that not even failure can cause him to change his mind."

http://story.news.yahoo.com/news?tmpl=story&cid=615&nci...

[54anickel]

56. Love that last line of your snip! Ain't that the truth!

"Nearly every choice has made it worse. You can even say that George Bush is proud of the fact that not even failure can cause him to change his mind."

[54anickel]

23. Guess Your Liability!

http://www.forbes.com/home/free_forbes/2004/0726/046.html

In these days of corporate scandal, who can argue against full disclosure on financial statements? But now comes one cockeyed movement that pushes the concept to extremes. It would require executives to guess potential liabilities from environmental and social problems that just might affect their companies, and list them on balance sheets.

I can envision, for instance, that an oil company like Royal Dutch/Shell, as supplier of fuels that supposedly contribute to global warming, would have to report the potential environmental liabilities. How much? A ready estimate can be derived from the movie The Day After Tomorrow. As the film ends, half the U.S. population lies frozen beneath a gigantic ice sheet. So let's say $100 billion. Or maybe $10 trillion is a better number.

See how ludicrous this gets? Remarkably, this movement is drawing support from Wall Street. In June Goldman Sachs and Morgan Stanley endorsed a report of the United Nations Global Compact that calls upon regulators to "require a minimum degree of disclosure and accountability on environmental, social and governance issues from companies, as this will support financial analysis."

The Rockefeller Family Fund, the Turner Foundation and the United Steelworkers have also signed on to the balance-sheet responsibility movement. California Treasurer Phil Angelides wants his state's public pension funds to push for "accurate corporate environmental accounting." The Rose Foundation for Communities & the Environment, in Oakland, Calif., has already asked the SEC to mandate disclosure of "financially significant environmental liabilities." These activists aren't trying to improve the reliability of Moody's bond ratings. They are out to influence corporate behavior.

more...

Hmmm, interesting set of players named there. I am all for attempting to influence corporate responsible behavior. But that list of players makes me suspicious. Is this a backdoor way of attempting to limit corporate liabilities? They could use the reasoning that each type of liability risk will need a realistic dollar amount for the balance sheet. I'm suspicious here....

[UpInArms]

25. 10:24 EST numbers and blather

Dow 10,249.57 -68.59 (-0.66%)
Nasdaq 1,899.16 -16.24 (-0.85%)
S&P 500 1,121.27 -7.06 (-0.63%)
10-Yr Bond 4.168% +0.035

10:00AM: Equities remain underwater, pressured by a downbeat tech sector... Semiconductor, networking, disk drive, computer hardware, and software have all dropped noticeably and sent the Nasdaq 0.7% lower... Warnings from several key players within their sectors (Celestica, Xilinx), combined with a Goldman Sachs downgrade of the IT Hardware/Systems and Software groups to Neutral, have acted as a drag on the space... The blue chips have fared a bit better, but their indices (Dow and S&P 500) are still down 0.4%...

Losses in telecom service, oil service, beverage, publishing, and brokerage have offset gains in retail and managed care... SOX -1.9, NYSE Adv/Dec 891/1565, Nasdaq Adv/Dec 682/1551

9:45AM: Sellers make their presence known in the opening action, sending the indices moderately lower... Economic and earnings news have been a bit of a disappointment as both have generally missed consensus estimates... August Industrial Production & Capacity Utilization showed slower rates of growth as both were impacted by the rise in energy prices... July Business Inventories did top market expectations, but that report is generally considered out of date given its late release...

Corporate news has also missed the mark, with notables Celestica (CLS 12.99 -1.58), Coca-Cola (KO 40.65 -2.25), Tribune Co (TRB 39.50 -0.85), and Xilinx (XLNX 27.85 - 1.19) cutting their outlooks...

[54anickel]

27. Mortgage demand dips, refinancings up (Lovely)

http://money.cnn.com/2004/09/15/real_estate/mortgage_apps.reut/index.htm

snip>

The Mortgage Bankers Association said its seasonally adjusted market index, a measure of mortgage activity, fell for the week ended Sept. 10 by 2 percent to 678.2 from the previous week's 692.0.

Thirty-year mortgage rates, excluding fees, averaged 5.68 percent, down 0.11 percentage point from the previous week and down 0.23 percentage point from a year ago, the Washington trade group said.

The Washington trade group's purchase index, a gauge of new loan requests for home purchases, fell last week by 4.3 percent to 455.7 from 476.0 in the prior week.

However, the Mortgage Bankers Association's seasonally adjusted index on new refinancing applications rose for a second week, by 1.2 percent to 1,972.5 for last week from the previous week's 1,948.9.

[UpInArms]

29. Job Security Still Elusive

http://www.thestreet.com/_tscana/markets/rebeccabyrne/10182898.html

A recent string of high-profile layoffs offers anecdotal evidence that the job market isn't getting any better, and might even be getting slightly worse. But how much this affects Federal Reserve officials, or the upcoming election, still isn't clear.

Over the past few weeks, a slew of companies have announced plans to slash jobs. Employees in the airline sector have been particularly hard hit, with Delta (DAL:NYSE - news - research) saying it will cut 7,000 positions, Alaska Air (ALK:NYSE - news - research) announcing 900 layoffs, and Continental (CAL:NYSE - news - research) slashing 425 jobs.

But other sectors are hurting, too. In the technology space, Electronic Data Systems (EDS:NYSE - news - research) recently said it will cut up to 20,000 jobs over the next 2 1/2 years, and Belden (BDC:NYSE - news - research), a maker of high-speed electronic cables, said it will slash more than 500 jobs. Ford (F:NYSE - news - research), Goodyear Tire & Rubber (GT:NYSE - news - research) and drugmaker Bayer (BAY:NYSE - news - research) also are among those recently announcing sizable job cuts.

"There seems to be an increase in the most visible layoffs," said Ethan Harris, senior economist at Lehman Brothers. "But I think there's a longer trend here where we've seen some pickup in the labor market but the pace of layoffs has been much higher than it was during the 1990s."

According to John Challenger, president of outplacement firm Challenger, Gray & Christmas, layoffs have recently stabilized at between 65,000 and 75,000 a month, down from the last couple of years but well above the roughly 50,000 a month seen in the 1990s.

<snip>

And things are going to get only worse over the next few months, according to Challenger. "September through January is usually the busiest time of the year for job cuts," he said. In August, layoffs rose to a six-month high.

The latest survey by Manpower Inc. found that the percentage of employers intending to reduce payrolls in the fourth quarter was up to 7% from 6% in the third quarter. Meanwhile, the percentage of employers planning to add to their payrolls in the October-to-December period fell to 28% from 30% in the July-to-September period. The pace of hiring has risen from last year, however, and the pace of job cuts has fallen.

...more...

[54anickel]

30. Hedge Funds Bet on Catastrophe Reinsurance

This is from the Wall St Journal. Saw the title at Prudent Bear so went digging for it in the school library. Being a student does have its perks.

HEDGE FUNDS once confined their wagers to stocks, bonds and interest rates. Now that their latest investment craze is betting on hurricanes, are the hedge funds straying too far from their expertise?

Hedge funds are sitting on mountains of cash, facing subpar gains in stocks, bonds and other markets, and are eager for an investment that isn't tied to other markets. That is why, as previously reported, a number of hedge funds have begun to enter into privately negotiated transactions that allow reinsurance companies -- those that insure other insurers -- and others to hedge their exposure to losses from natural catastrophes, including Hurricane Ivan, which was barreling toward the Florida Panhandle and southern Alabama last night.

snip>

The returns for the hedge funds can be juicy. In a typical deal, a hedge fund will agree to make a $10 million payout to a reinsurance company if the reinsurer faces losses topping a certain threshold. The hedge fund could charge as much as a $3 million premium for such a one-year contract or even a lesser amount to protect the reinsurer from a single event such as Hurricane Ivan.

With Ivan threatening the U.S., the hedge funds are crossing their fingers that the damage won't be too costly. But as long as things aren't too bad, the hedge funds can do well. Generally, some hedge funds are allocating 5% or so of their overall capital to such deals, trying to keep a cap on any possible losses and allowing them to generate big gains by reducing the amount of money they have to set aside to pay off possible claims.

But some worry that the trend is a sign that too much money has come into the hedge-fund world, forcing managers to come up with a new way to make money. This strategy could lead to losses in the event of a serious catastrophe such as a hurricane that is worse than expected. And funds that specialize in the business have been allocating more than 5% of their funds to one type of catastrophe, such as Florida hurricanes.

Moreover, the risks are higher than with so-called catastrophe bonds, which pay slightly above comparable corporate bonds and usually sustain losses only if a rare, very damaging event occurs. Now hedge funds are getting involved in offering protection from events that could have a 5% to 20% chance of happening in a year, but provide a much higher payoff.



snip>

[UpInArms]

31. Crude tops $45; Energy Dept posts hefty supply drop

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38245.443125-820676702&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (CBS.MW) -- Crude futures in New York topped $45 a barrel after the Energy Department said crude supplies were down 7.1 million barrels at 278.6 million barrels for the week ended Sept. 10. Gasoline stocks fell by 1.6 million barrels to total 202.5 million barrels. Distillate inventories were up 1.7 million barrels at 128.3 million barrels. October crude is up 61 cents at $45 per barrel after climbing as high as $45.10. October unleaded gasoline is up 1.2 percent at $1.255 a gallon and October heating oil is up 1.8 percent at $1.25 a gallon.

[54anickel]

32. Foreign investment into China up 18.8 percent in first eight months

http://story.news.yahoo.com/news?tmpl=story&cid=1518&ncid=1518&e=9&u=/afp/20040915/bs_afp/china_economy_investment_040915085908

BEIJING (AFP) - China remained an attractive destination for foreign investors who poured in 43.6 billion dollars during the first eight months of the year, 18.8 percent more than the same period last year, the government said.

Contracted foreign direct investment, a measure of future business, surged 38.9 percent to 93.8 billion dollars in the same period, the Ministry of Commerce said in a statement on its website on Wednesday.

While no figure for August alone was immediately available, the ministry's data seemed to complete a picture of an economy that stayed dangerously close to overheating last month.

Inflation, one of the most reliable indicators of economic activity in China, rose 5.3 percent in August, remaining above the five-percent danger line previously identified by policy makers.

[UpInArms]

35. MGM Staffers, Producers Face Uncertain Future

http://www.reuters.com/newsArticle.jhtml?type=industryNews&storyID=6239539

LOS ANGELES (Hollywood Reporter) - Since Hollywood abhors uncertainty, MGM's film executives are in the difficult position of conducting business -- attracting projects, putting films into production and releasing movies -- even though they could all be out of a job in six months.

A group headed by Sony Corp. on Monday agreed to buy the studio for $5 billion, including $2.85 billion in cash. The deal is expected to be approved when the MGM board meets Sept. 27. It also requires approvals from the U.S. Department of Justice and the European Union.

According to several top executives, the deal could take nine to 12 months to close, so next year's production and release schedule should not be affected. But most outside observers are betting the acquisition could be put into effect in just six months, which would have serious implications for the MGM pipeline.

Neither MGM or Sony would comment on how Sony is likely to absorb MGM's operations.

...more...

[54anickel]

38. Anwar Is Free (Is He Free From The Prison Of Imf Ideology?)

Ahhh, my "buddy" Mahathir get's a wee-bit recognition for standing up to the IMF

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

Anwar Ibrahim, the former Malaysian deputy prime minister, is a free man. In fact, if his recent statements are anything to go by, he plans to return to national politics if the remaining conviction against him is overturned in a Malaysian federal court, albeit not to rejoin his old colleagues in the government, but to help build a “responsible opposition”.

The release of Anwar completes the process of bringing Malaysia back into the ranks of the civilised world. It is also confirmation that the new Prime Minister, Abdullah Badawi, is an increasingly self-confident leader, which points to further political liberalisation in the country. Indeed, it is surprising that for all the talk about proper democratic models for the Islamic world, a conspicuous beacon of success like Malaysia – a predominantly Muslim, but secular polity – is seldom highlighted. Perhaps this is a function of Dr. Mahathir’s increasingly arbitrary and dictatorial manner during his tenure as Prime Minister for most of the past quarter century.

A return to political “normalcy” in Malaysia, therefore, is to be welcomed, and Anwar’s stated commitment to a “reform agenda…effectively expressed in a functioning democracy” is laudable. But we hope that Anwar’s embrace of reform does not lead to a slavish adherence to the IMF-mandated policies which characterised his tenure as Finance Minister’s during the Asian financial crisis of 1997/98. Before the historical revisionists get hold of this period, it is important to note that Malaysia’s initial response to the crisis (promoted eagerly by the very same Anwar Ibrahim) was a textbook illustration of how to exacerbate, not alleviate, a financial crisis. It was only when the Deputy PM/Finance Minister was ousted from the Cabinet and his pro-IMF policies completely repudiated, that Malaysia’s economy began its long road back to successful recovery.

There is little question that former PM Mahathir Mohammed was a political thug, but not an economic illiterate. But his sacking of Anwar from the Cabinet and decision to press ludicrous sodomy and abuse of power charges against his former heir apparent foolishly undermined his economic legacy. It is certainly wrong, however, to criticise his response to the Asian financial crisis of 1997/98. Vindicated now with the benefit of hindsight, at the time his embrace of exchange controls, and a 180-degree reversal away from the policies of austerity advocated by the Fund, were viewed as dangerously anti-free market, destined to render Malaysia an investment pariah.

more...

[KoKo]

40. Martha Stewart asks judge to let her serve her time. Five months in

prison and five under house arrest. She said she wants to go on with her life.

Meanwhile hundreds of Wall St. Crooks are free, having settled for fines
and Ken Lay and Jeff Skilling delay and delay. Pretty soon folks will forget about Enron, but Martha will pay for them and serve time.

[54anickel]

45. Tulips of Stone

http://www.321gold.com/editorials/maund_nigel/maund_nigel091404.html

snip>

The real estate market has produced "year upon year" increases in home valuations of anywhere from 8% to 20% or more, dependent on local factors. These increases have outstripped rental increases in most countries by a factor of several hundred percent, and the highly tampered with and thoroughly debased CPI by a factor of between 5 and 10. However, this happy state of affairs (for house owners and real estate agents) cannot go on ad infinitum. The economic distortions created in societies around the world are immense, as the increasing misallocation of human, financial and economic resources becomes more acute, and the cost of housing goes completely out of reach for workers in essential services. Furthermore, high property and rental prices spill over through the entire monetary system, generating huge inflationary pressures throughout the entire economy. This may be fine for the haves, but for those on middle and lower incomes life is going to get tougher by the day. The "Illusion of Wealth" thus created is little other than a poisoned chalice when prices inevitably head south and one's personal equity versus the loan is the declining factor . One's home is, after all, an abode and nothing more unless you are rich enough to afford more than one in which case you should be looking at cashing in your winnings now.

Given the immense scale of debts: Government, State, Municipal, Corporate and Personal, and rising liabilities in such essential services as medical care and education as inflation starts to make a serious impact, it would be prudent to expect cash-strapped governments and states to raise taxes. Some idea of the real rate of inflation may be gained from a perusal of top executives pay awards in such countries as the US and UK where these have been averaging between 11% and 13%, and by looking at increases in utility prices. Of course, to control the ignorant masses at the bottom or even middle pay scales, industry and government cynically wave around the "doctored" CPI, claiming that wage rises must be kept in line with inflation. This piece of amazing claptrap is perpetuated by the syndicated media in order to successively reduce labor costs whilst maximizing profits. Many people realize that they are being duped, but scarcely understand the full extent and pernicious nature of this complicated little game. The inevitable outcome of inflation and reduced real wages will be to further impoverish the middle and lower wage and salaried employees, whilst their liabilities increase in line with real inflation, interest rates and additional debt servicing costs. Any serious correction to the world economy will result in an increase in unemployment particularly in service related industries. Many of those affected will most probably lose their homes.

The world's largest economy, comprising more than 25% of the global economy, is now utterly dependent upon Chinese and Japanese support for the very first time in its history. The entire lopsided global economy is dependent upon the credit "maxed out" US and European consumers and Asian trade surpluses buying US Equities and Bonds. The longer this bizarre situation is sustained, the greater will be the resultant adjustment, or bust. A collapse of the mighty US economy would create a global economic tsunami of epic proportions from which none will survive without serious economic and social damage. Indeed, it would be folly to regard the remaining worlds' currencies as having any more real worth than the intrinsically worthless greenback. When the collapse of the entire FIAT exercise finally eventuates, the entire house of cards will come crashing down with the dollar. Already the precious metals are responding, albeit painfully, due to massive intervention and market manipulation to control their now inexorable rise, to the colossal inflationary pressures now making their way through the pipeline. As the Aden sisters and Jim Puplava so correctly pointed out some months ago, when inflation really takes off then there will be no stopping the precious metals. AD 2005 promises to be a very interesting year for gold and silver. Gold will indeed have the last laugh. Nothing on this earth can stop it. No one in history has succeeded in ultimately supplanting the yellow metal as a basis for money. Those that try, live to regret their hubris and folly.

As with all human manias, this one, like all the others, will end in disillusionment and impoverishment when reality brings the mass psyche back to earth with an appalling crash. Often such manias start off on some rational basis, but very soon enterprising individuals see a wonderful opportunity for personal or collective enrichment, and, as the greed of the masses knows no bounds their psyche can be readily whipped up to a state of mind where rational analysis completely escapes them. Such opportunists as Adolf Hitler fully understood this weakness of the mass of humanity, and tuned into the collective psyche in organized rallies to capitalize on it, much to everyone's eventual loss. So it is with real estate, shares and other forms of ephemeral financial investments.

[ozymandius]

68. Aspen, Colorado

Real estate prices in Aspen, Colorado became so inflated that the proletariat, the essential service personnel who provide the luxurious comforts that Aspen's wealthy inhabitants enjoy, have left. They can no longer afford to live where they work. Transportation to work from affordable outlying areas became too daunting and expensive that the worker class settled into employment away from Aspen and near their new neighborhoods.

This has thrown Aspen's luxury businesses into a briar patch. No one to clean the hotel rooms, no one to tend bar, no one to serve food. No one who makes a middle class living can afford live there, much less work there.

[UpInArms]

46. 12:18 EST numbers and blather

Dow 10,246.41 -71.75 (-0.70%)
Nasdaq 1,895.27 -20.13 (-1.05%)
S&P 500 1,121.45 -6.88 (-0.61%)
10-Yr Bond 4.170% +0.037

12:00PM: Stock market has been awash in sellers today as crude oil, economic data, corporate news, and brokerage firm commentary have not been of a conciliatory nature... Crude oil has climbed 1% higher to $44.82/bbl as Hurricane Ivan's approach and another decline in weekly oil inventories have renewed fears about meeting demand...

Economic data have largely been a mixed bag - with the September NY Empire State Index (a regional manufacturing report) and July Business Inventories releases topping expectations, and the August Industrial Production & Capacity Utilization reports missing estimates - contributing to the sense that the economy is not strengthening at the rate investors would like... Finally, several notable companies - such as Xilinx (XLN 27.14 -0.90), Tribune Co (TRB 40.19 -0.16), Coca-Cola (KO 41.10 -1.77), and Celestica (CLS 12.80 -1.77) - issued weaker than expected guidance... Analysts have followed up those disappointing updates with a round of downgrades - including Goldman Sachs' downgrade of the IT Hardware/Systems and Software groups to Neutral...

Despite Oracle's (ORCL 11.27 +0.72) well-received Q1 (Aug) report, the brokerage firm believes IT spending plans for the balance of 2004 and for 2005 will decrease significantly according to its August IT Spending survey... As a result, most of tech (semiconductor, computer hardware, networking, disk drive) has turned lower and kept the market on the defensive... Beverage, publishing, brokerage, airline, and telecom service have also demonstrated relative weakness... Only areas like managed care and energy (off the jump in oil prices) have attracted buyers at mid-day...

[antigop]

47. Geesh! What is a person to do?

Where are you supposed to put your money (what little you may have)-- in a CD?

Can we count on FDIC if there is a massive meltdown?

[ozymandius]

66. Hi antigop.

While advice on this thread as to where you put your money remains taboo, the second part of your question is interesting.

FDIC is still a viable entity. The question is: Are the dollars they issue to cover losses a viable currency? The Federal Reserve has the most powerful printing presses in the world. They can keep churning out dollars as long as there is foreign currency to buoy the $ value and that oil is predominantly traded in petro dollars across the globe.

Inflationary pressures among categories like food and energy have driven down the purchase power of our money.

So we can count on the FDIC to cover your losses should the bank go belly-up. But I would not count on your dollars holding their value of four years ago.

[antigop]

69. thanks for the reply

I wasn't expecting an answer to question #1. It was more of a sarcastic remark than a real question.

Thanks for the reply to the second question. Kind of what I thought.
Just print more money if they have to. But the money might not be worth much.

[54anickel]

71. "But the money might not be worth much" - Heh-heh! That's why I

bought me a light-weight wheelbarrow! Easier to carry get that cash down to the grocery store for a loaf of bread that way.
:evilgrin:

[antigop]

75. I have got to stop reading these threads

I won't be able to sleep at night.

[UpInArms]

51. 1:00 EST numbers and blather

Dow 10,244.20 -73.96 (-0.72%)
Nasdaq 1,893.70 -21.70 (-1.13%)
S&P 500 1,120.73 -7.60 (-0.67%)
10-Yr Bond 4.153% +0.020

12:30PM: The indices edge slightly lower with the Nasdaq hitting a new worst level... The Nasdaq itself has fallen through its latest support area - at 1897/1895 - but is holding above its next support level of 1886 - as identified by Briefing.com's The Technical Take (a Platinum product)... Volume has been much stronger today, in contrast with other sessions... Totals at the NYSE and Nasdaq might come in above average levels - the first in a number of months... This suggests conviction on the part of sellers is strong, which is not an encouraging for market bulls in the near-term...NYSE Adv/Dec 1124/1953, Nasdaq Adv/Dec 888/1992

12:00PM: Stock market has been awash in sellers today as crude oil, economic data, corporate news, and brokerage firm commentary have not been of a conciliatory nature... Crude oil has climbed 1% higher to $44.82/bbl as Hurricane Ivan's approach and another decline in weekly oil inventories have renewed fears about meeting demand...

Economic data have largely been a mixed bag - with the September NY Empire State Index (a regional manufacturing report) and July Business Inventories releases topping expectations, and the August Industrial Production & Capacity Utilization reports missing estimates - contributing to the sense that the economy is not strengthening at the rate investors would like... Finally, several notable companies - such as Xilinx (XLN 27.14 - 0.90), Tribune Co (TRB 40.19 -0.16), Coca-Cola (KO 41.10 -1.77), and Celestica (CLS 12.80 -1.77) - issued weaker than expected guidance... Analysts have followed up those disappointing updates with a round of downgrades - including Goldman Sachs' downgrade of the IT Hardware/Systems and Software groups to Neutral...

[54anickel]

58. "Volume has been much stronger today..." Yeah like that's saying much

Still looks pretty anemic to me and the majority of that volume is headed DOWN

NYSE Volume 720,956,000
Nasdaq Volume 963,203,000

Advances & Declines
NYSE Nasdaq
Advances 1160 (34%) 931 (30%)
Declines 1979 (59%) 2003 (64%)
Unchanged 179 (5%) 162 (5%)

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

Up Vol* 175 (25%) 261 (28%)
Down Vol* 495 (73%) 666 (71%)
Unch. Vol* 6 (0%) 5 (0%)

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

New Hi's 72 44
New Lo's 11 24

[54anickel]

52. Time Inconsistency

You'll have to ignore the fact that he's pushing a particular fund. His statements about the market in general are worth reading about though. Sorry if parts of it read like an advertisment.

http://www.hussmanfunds.com/wmc/wmc040913.htm

snip>

In general, buy-and-hold isn't a bad strategy, and is surely better than the strategy of constantly leaping from hot fund to hot fund on the basis of short-term performance. At present, however, buy-and-hold strikes me as a decidedly suboptimal solution to the time inconsistency problem. I emphatically believe that the S&P 500 is priced to deliver very disappointing long-term returns from current levels, for as long as 5-14 years. That view doesn't rely on unusual assumptions about future valuations or earnings growth rates, and doesn't even require the assumption that stocks will ever become significantly undervalued on historical benchmarks.

In any event, it's clear that constant short-term optimization and comfort-seeking is a very different objective than long-term optimization. Probably the closest you can get to pure short-term comfort-seeking in the financial markets is active trend-following – buy the rallies, sell the declines, buy the rallies again. It isn't any coincidence that especially in this year's market, investment systems that follow that sort of approach (e.g. managed futures) have been decimated by whipsaws in which rallies failed just after being bought, and declines reversed just after being sold.

snip>

As of last week, the Market Climate for stocks remained characterized by unusually unfavorable valuations and tenuously favorable market action. Earnings for the S&P 500 have increased substantially over the past year, taking the reported figure on the index to just over $56, and resulting in a price/peak earnings multiple of about 20. That's the same level as the market reached at the 1929, 1972 and 1987 peaks, but we certainly saw a much higher peak in 2000 (near 34) before the subsequent plunge. Suffice it to say that valuations aren't cheap, and that even the considerations of interest rates and inflation are not sufficient to change that conclusion. Earnings for the S&P 500 remain well ensconced in their long-term peak-to-peak growth channel of 6% annually. On the basis of the price/peak earnings multiple, the historical average is about 14, and the historical median is 11.

snip>

In bonds, the Market Climate continues to be characterized by modestly unfavorable valuations and market action. Despite the recent softening of oil prices and an accompanying pullback in the PPI, the potential for further economic weakness is largely offset by the potential for further core inflation pressures and U.S. dollar weakness. At present, our duration remains fairly modest at just 2.3 years, mostly in TIPS, with about 14% of assets in the Strategic Total Return Fund allocated to precious metals shares.

[54anickel]

55. The US economy is the next 9/11

http://www.ameinfo.com/news/Detailed/45122.html

There are several reasons why it is likely that the US economy will weaken far more than is expected by the bullish Wall Street crowd, whose only interest is to get as many investors to invest in the stock market and then to churn the accounts in order to earn high commissions.

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

So how weak will the US economy become? First of all one has to be concerned about the recent sharp money supply growth deceleration. The 12-months rate of growth in M2, at 3,6%, year-over-year, is at the lowest level since 1995 and the 13 week percentage change of MZM has now just turned negative.

As a result of the decline in the rate of growth of money supply, 'excess money', as defined by the growth in money supply in excess of nominal GDP, has over the last 18 months also plunged. Usually, when money supply growth slows down so rapidly and when 'excess money' plunges, the economy follows with a brief time lag.

The second reason, I have strong reservations about a sustainable recovery is that employment gains are still dismal and most unlikely to improve much. The problem, now, compared to previous recoveries in the US is that China in the manufacturing sector and that India for tradable services will continue to gain employment market share at the cost of US employment and also lead to a worsening of America's trade and current account deficit.

The more China gains of the US import market, the more jobs the US is losing. This trend has become particularly worrisome since year 2000. Moreover, what weak employment gains mean is that the US labor force has no bargaining power and, therefore, has declining real (inflation adjusted) incomes.

more...

[54anickel]

59. Will GM Pay You To Take A Car?

http://www.gold-eagle.com/editorials_04/kasriel091404.html

snip>

Current Account Deficit Largest On Record

The U.S. current account deficit increased to $166.2 billion in the second quarter from $147.2 billion in the first quarter. The deficit on goods and services was $150.3 billion, up from $138.6 billion in the first quarter. In the financial account, foreign owned assets in the U.S. increased $256.2 billion in the second quarter, representing a smaller increase vs. the $445.3 billion gain in the first quarter. There was also a smaller increase in foreign official assets in the U.S. during the second quarter -- $73.9 billion vs. $127.9 billion in the first quarter.

It is also a new record when measured as a percentage of nominal GDP (see chart below). The current deficit balance as a percentage of nominal GDP was 5.7% in the second quarter vs. 5.13% in the first quarter.

A measure of this magnitude is typically identified as a danger zone for a nation's currency. Not surprisingly, the dollar has recorded a significant decline after the late-2000 peak. The dollar's swoon is somewhat more contained now compared with the sharp decline in 2003. On a year-to-year basis, the dollar has dropped 7.3% during the week ended September 10.

The current account deficit is the mirror image of how much the U.S. is borrowing from foreigners. Based on the current account deficit in the second quarter, foreigners are willing lenders of about $1.8 billion per day. If financial markets doubt the return on their investment a run on the dollar is a possible scenario.

[JNelson6563]

60. Hi Everybody!

Zowie! This thread is one informative read, as always!

So, let me get this straight, all three major indices are down and Treasury yields are up. So, where's the money going?

1:44 and there is no sign of it here:

Dow 10,247.73 -70.43 (-0.68%)
Nasdaq 1,896.43 -18.97 (-0.99%)
S&P 500 1,121.86 -6.47 (-0.57%)
10-Yr Bond 4.157% +0.024


Thanks all for posting all the great stuff today and every day. I am happy to report that the over-throw is going swimmingly in the north. Money and volunteers flowing in like crazy. I can't wait to see the precinct numbers for this year compare to 2000. I think we will finally be able to kill off the mantra "Traverse City is a Rethug stronghold".


Cheers to all you hard-working, information sharing Marketeers! Your work here is invaluable to me and many others, no doubt.

:toast:

Julie

[54anickel]

61. Good to hear from you Julie! Glad to hear all that hard work is starting

to pay off! Miss ya here on the thread though. Keep up the great work!

[UpInArms]

64. it's always great to have you come see us here Julie!

:hi:

I'm so glad that you're changing the mantra in Traverse City :D

Drop by again soon :grouphug:

[ozymandius]

67. Hi there Julie.

Thanks for checking in! And congratulations on all the good work you're doing in a formerly Republican stronghold! :toast: We are all proud of you.

Just a thought: Do you find that formerly inactive participants in the political process have awakened to the great menace we face? Have you witnessed former Republicans learning about their misguided leadership?

My son is down for a nap - giving me time to spend with my friends here at DU.

[JNelson6563]

76. Thanks for the encouragement all

Yes, Ozy, we've had lots of moderate Rethugs in who can't stand Bush. Most interesting have been the many who claim they are independent and usually vote R but not this time. So glad we are there when these indies and disgruntled Rs come looking for an alternative. I don't think this region was actually as Rethug as we have thought all along. Local R party has 125 members and we just passed the 500 mark. One year ago we had 106. :-)

I'm currently trying to raise $12,000 in the next month so we can rent our store-front all year. We've helped carry the entire region this season and I think we need to establish a permanent HQ in order to realize long term benefits of our tremendous effort thus far. I am tapping into new sources and developing new relationships with all kinds of helpful people.

Will keep you all posted. Thanks for all your work here. I read it and take it with me. I share this great stuff with countless folks who come strolling into the office every day. It is exciting to report that the HQ is so hopping the day flies by and I am shocked at the time that passed. Revolutions are very exciting!

Hope it's all good in your world everyone, Ozy, hope all is well with your little family--who I always picture as adorable.

Cheers--
Julie

[54anickel]

62. Is Inflation Truly a Threat? (Interesting take on the CPI)

http://www.gold-eagle.com/editorials_04/mauldin091404.html

A revival in inflation in the U.S. has been a major concern of investors. Until recently, the spotlight was on employment, but the recent pickup in payroll jobs, spotty as it may be, has convinced many that more stable job increases are ahead. So inflation worries have risen, along with the Consumer Price Index, in recent months.

The Fed professes to not be overly concerned, despite the congenital fear of rising goods and services prices by central bankers around the globe. Chairman Alan Greenspan weighed in on the matter recently when he said the Fed's "general view is that inflationary pressures are not likely to be a serious concern in the period ahead." Of course, this statement may have been in response to future markets, which anticipate a rapid rise in the federal funds rate. Still, on Sept. 8, he went further and said, "despite the rise in oil prices through mid August, inflation, and inflation expectations, has eased in recent months."

Still, many Americans, including lots of investors, think inflation is on the rise, and that the Fed is behind the curve. In fact, many never believed that consumer inflation rates were running close to 1%, as reported recently, even after volatile food and energy components are removed (Chart 1). They also didn't believe that producer prices for finished goods were actually declining (Chart 2).

They also worry that the recent leap in commodity prices (Chart 3) will soon feed through to finished goods producer prices and then consumer prices. These worriers aren't aware that there is so much value added between raw materials and finished goods by labor, transportation, packaging, capital equipment, etc. that a 1% rise in raw materials prices only increases finished goods prices by 0.07% and less for consumer prices. A loaf of bread contains only a few pennies worth of wheat. And this effect is falling as goods contain less in materials and more in intellectual content. A century ago, steel was a major good; producing it takes lots of iron ore, coking coal and limestone. Today, semiconductor chips are important but require a little silicon and fine wire. The rest of their value is brain power.

The widespread fears of inflation are understandable. As we've discussed many times in past reports, historically inflation is a wartime phenomenon when government spending is huge, while deflation reigns in peacetime. Still, the nation suffered a uniquely long 60 years of war, which started with rearmament in the late 1930s, was followed by World War II, which promptly gave way to the Cold War that was augmented by the War on Poverty. So, most Americans have never experienced anything but inflation, which they believe is the way God made the world.

more...

[54anickel]

65. 2:48 numbers and Yada

Dow 10,257.32 -60.84 (-0.59%)
Nasdaq 1,901.04 -14.36 (-0.75%)
S&P 500 1,123.16 -5.17 (-0.46%)
10-yr Bond 4.168% +0.035
30-yr Bond 4.959% +0.026
NYSE Volume 924,368,000
Nasdaq Volume 1,190,297,000

2:25PM: The averages retraced their losses around the bottom of last hour, and have continued to do so as the price of crude oil declines... The commodity has reversed course - giving up its 1% move higher and turning lower over the course of the last half hour... The catalyst has been OPEC president Yusgiantoro's remark that 2005 demand should be lower than 2004... As a result, the oil service groups have backed off their recent gains and are nearing the flat line... The speed of the overall market's turnaround effort, however, has slowed in recent minutes as the Nasdaq has paused at the 1900 level...
NYSE Adv/Dec 1377/1815, Nasdaq Adv/Dec 1093/1886

2:00PM: The market remains held down by what has become widespread sector losses... With the exception of most energy shares (benefiting from the crude oil gain) and managed care stocks (with the exception of PacifiCare Health and American Medical's announced deal), every industry has headed lower... Tech, biotech, brokerage, drug, industrial, telecom, utility, and consumer staple are among the largest losers in today's downtrodden trade... Safe-haven groups (like beverage or gold) - which would normally found bids on a weak day - have not found buying interest this session...

Coca-cola's (KO 41.04 -0.83) warning and gold's decline on the dollar's rise have weighed heavily on those areas...NYSE Adv/Dec 1245/1920, Nasdaq Adv/Dec 970/1997

1:35PM: Little change in the overall trend, as stocks retain a bearish bias across the board... Down volume is leading up volume by a 3-to-1 margin at both the NYSE and Nasdaq... Market internals also favor decliners by a large margin at both exchanges... Buyers remain unwilling to step into this market that has been yet to stage a recovery effort...Aside from the initial retreat in the first hour of trading, the indices have barely budged from their lows... Several weeks of gains, combined with what was a slate of poor economic and earnings news, have prompted the pullback...

The action was similar in Japan this morning, where the Nikkei plunged 1.2%...NYSE Adv/Dec 1184/1966, Nasdaq Adv/Dec 917/2014

1:00PM : Buyers remain a scarce commodity as the indices continue to trade along their lows... Tech maintains its losing stance well below the unchanged mark, with semiconductor pacing the way to the downside... Today's action can largely be viewed as a profit-taking move as (1) the group has rallied substantially in the past week and (2) selling did not ensue when peers Broadcom (BRCM 28.28 -1.59) and Texas Instrument (TXN 21.73 -0.63) cut their outlooks... Still, it's hard to make the case for a quick semiconductor recovery when inventories remain high and orders have moderated...

The current slowdown could, according to some analysts, last throughout the remainder of the year...SOX -3.3, NYSE Adv/Dec 1134/1981, Nasdaq Adv/Dec 901/2029

[ozymandius]

70. closing numbers

Dow 10,231.36 -86.80 (-0.84%)
Nasdaq 1,896.52 -18.88 (-0.99%)
S&P 500 1,120.32 -8.01 (-0.71%)
10-Yr Bond 4.17% +0.037

[54anickel]

72. YIPES! I didn't think it would go down that low. Must have really hit

the skids in that last hour. Stocks, bonds, gold all down. Where'd everybody go today?

[ozymandius]

73. Here's a clue.

Stocks Slump on Gloomy Economic Forecasts

NEW YORK (AP) -- Stocks sagged Wednesday after Coca-Cola Co. and several other companies issued gloomy forecasts, and a lower-than-expected reading on industrial production for August threw the nation's broader economic outlook into question.

Adding pressure to technology shares, the Goldman Sachs Group lowered its rating on both hardware and software stocks based on its latest survey of corporate officers who oversee high-tech spending. With corporate forecasts falling short of expectations and a number of signals pointing to more modest capital spending, worries about a slower second half were intensifying, but analysts say it's really too soon to tell what lies ahead.

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Energy costs have also been a persistent worry for investors, and already uncomfortably high oil prices headed skyward this week as Hurricane Ivan menaced rigs, threw tankers off course and significantly cut daily production in the Gulf of Mexico. Prices fell back as the storm took aim at the Alabama and Mississippi coasts late Wednesday, and light, sweet crude for October delivery declined 81 cents to settle at $43.58 per barrel.

http://biz.yahoo.com/ap/040915/wall_street_16.html

[54anickel]

77. HA! Looks like it was just time for a break - Love this part

The Federal Reserve reported only a 0.1 percent rise in industrial production in August, surprising economists who had forecast a 0.5 percent gain. The feeble rise, which follows a robust 0.6 percent advance in July, suggests the economy may still be working through the "soft patch" Federal Reserve Alan Greenspan referred to in remarks before Congress last week.

In addition to disheartening news on both the economic and corporate fronts, light trading ahead of Rosh Hashanah, the Jewish New Year, contributed to the downward pressure on stocks. Still, after more than a month of decent gains, analysts said it made sense for equities to take a pause on less-than-encouraging news.

"These pre-announcements, which are abundant and quite negative compared to what we saw in the second quarter, are off-putting, of course. There's trouble in paradise, so to speak," said Larry Wachtel, market analyst at Wachovia Securities. "But the major factor is you've come a long way and you need a rest."


Isn't there a difference between a pause that refreshes versus rolling back down hill? Guess we'll have to see what tomorrow brings.

[54anickel]

74. Inflation's Impact on Americans - "You're Fired!!"

http://www.kitco.com/ind/Downs/sept32004.html

The great American inflation, long in the tooth, has been a very insidious process whereby most people, busy tending to their personal lives, haven't truly realized the impact on their finances and future. Inflated real estate prices and periods of Federal Reserve induced bull markets in stocks, followed by bear markets, have served as a smoke screen hiding the ongoing decline in purchasing power of the dollar which amounts to a confiscation of wealth.

Inflation aside, a key to the managed economy and seemingly endless American prosperity has been the ability of the system to generate and maintain better and better paying jobs to underpin the economy and consumer spending. Consumer spending has become the crucial underpinning aspect of the economy. However, in the last several years, there has appeared an undermining aspect of the economy which stems from the very inflation so many have grown to accept or ignore. Society has now become aware that good jobs are being lost to foreigners, but there is no indication the problem is thoroughly understood.

Make no mistake about it; there is a relentless move by US corporations to outsource American jobs. Banking giant Citigroup opened its first India-based outsourced operation twenty years ago, but since then over 50% of Fortune 500 companies have moved jobs offshore. The actual figure for the number of jobs lost overseas is difficult to nail down. Estimates are that well over 1 million financial and service-oriented jobs have already been outsourced and outsourcing study groups estimate that between 14 million and 21 million more American jobs are seriously at risk. American jobs estimated to be lost over the next ten years alone are already as high as 2% of the entire workforce or 3.3 million jobs, which would involve hundreds of millions of dollars in wages.

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The US is suddenly finding itself being sucked into the center of the perfect storm: a globalized and fiercely competitive economy; an American economy where living costs demand wage levels far exceeding foreign competition, resulting in outsourcing of good paying mainstay American jobs; and a society leveraged to the hilt and unable to cope with a future decelerating economy.

What is the likely economic scenario facing Americans for many years to come? It is one of being caught up in a degenerating economy contending with both deflationary and inflationary forces (the worst of all worlds) and dealing with a long, protracted decline in living standards. Perhaps the worst problem will be the highly-leveraged state of the economy and the dislocations the US debt burden will have on a whole cross section of the economy, as the decades of cumulative distortions and imbalances are corrected by market forces.