STOCK MARKET WATCH, Monday 11 April

[ozymandius]

Monday April 11, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 284 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 119 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 175 DAYS
DAYS SINCE ENRON COLLAPSE = 1233
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90

AT THE CLOSING BELL ON April 8, 2005

Dow... 10,461.34 -84.98 (-0.81%)
Nasdaq... 1,999.35 -19.44 (-0.96%)
S&P 500... 1,181.20 -9.94 (-0.83%)
10-Yr Bond... 4.49% +0.02 (+0.42%)
Gold future... 428.80 +0.40 (+0.09%)

GOLD, EURO, YEN, Dollars and Loonie




PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Tim W. Wood

THE DOW REPORT
A Quick Look at Key Indexes

The first chart below is of the Dow Jones Industrial Average and the Dow Jones Transportation Average. The January 2005 low marks the last Secondary reactionary low point according to Dow theory. As you can see each of the retests of this low have thus far held and this has resulted in a series of higher lows. But, with today’s price action seen in the Transports this may be about to change. From a Dow theory perspective this Secondary reaction separating Phase I from Phase II of the secular bear market remains intact, but on increasingly thinner ice. I also want to make it perfectly clear that this Secondary reaction is subordinate to the existing Primary Dow theory sell signal and non-confirmation.



The fact that the short-term rally, which began out of the April 4, 2005 low, was not confirmed by the weaker price action of the Transports was cause for concern. But, now we have today’s break in the Transports. This is becoming increasingly more negative and is suggestive that we are now seeing the development of a small scale non-confirmation that could be occurring at a very critical time for the markets. We will be monitoring this price action for further developments as this Secondary reaction continues to unwind.

-cut past more charts and commentary-

These charts are telling me that from a Dow theory perspective the rally separating Phase I from Phase II remains intact. But, when I look at these other indexes there are indeed cracks beginning to appear that could well be telegraphing even broader market weakness in the weeks ahead.

more...

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

[UpInArms]

2. daily dollar watch

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

Last trade 84.24 Change -0.23 (-0.27%)

Dollar Eases Against Euro and Yen

http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20050408&ID=4357484

NEW YORK (Reuters) - The dollar eased against the euro and the yen on Friday reversing early gains, as traders sold the U.S. currency as it broke through a key technical barrier and investors squared positions before the weekend.

With trading winding down, dealers said the market's focus is also shifting to U.S. economic data next week, including trade numbers for February, due on Tuesday.

``Once we traded through that $1.2860 level, we went 80 points in 20 minutes and it was relentless,'' said Michael Jansen, strategist at National Australia Bank in New York. Trading was ``mostly technical with some squaring of long dollar positions ahead of the weekend,'' he said.

<snip>

The gap between imports and exports widened to $59 billion in February compared with $58.27 billion in January, according to the median forecast from a Reuters poll of 35 economists.

U.S. asset flows data for February will be released on Friday. The latest Reuters poll shows the median estimate for February U.S. net capital inflows of $65 billion compared with $91 billion in January.

...more...

All heat no light but Trade and TIC next week could generate movement

http://www.dailyfx.com/index.php?option=com_content&task=view&id=667&Itemid=46

"I recognize the risk involved and I think that, should we see evidence that we're really getting into a more fundamental inflation problem, which is not my best guess, then you're going to see the Federal Reserve react more vigorously."

William Poole, St Louis Federal Reserve President.
Friday, April 8, 2005 11:32 GMT

Ending Where We Start

In a week that saw one of the sparsest economic calendars of the year, trading was driven mainly by technical factors as the pair bounced between the 1.2800 and the 1.2900 figures ending on Friday pretty much where it started last Monday. The oil market, stayed choppy most of the week and EUR/USD moved in tandem with crude until on Friday the pair "veritcalized" 80 pips in 1 hour after it broke the 1.2860 barrier. Trading was thin and driven mainly by euro shorts scurrying to cover their positions ahead of the week-end.

The central tug of war in the EUR/USD remains between the dollar bulls who see 4.50% fed funds rate in the near future and thus heavy carry premium for the greenback and the dollar bears who question the inevitability of rate hikes amidst higher oil prices and slowing economy.

Next week the bears may get support from the Trade data which is expected to show little improvement over the record setting deficit pace of the past 6 months, In fact a strong possibility exists that high oil prices may have pushed imports even higher than the market expects generating a nasty downside surprise. Coupled with Friday's TICs report and Advanced Retail Sales release and we may follow the same script of choppiness and broader volatility, Having tagged the lower end of its 1.2800-1.3400 range several times last week, the pair may now move the other way if the US eco data prints materially worse than last month.

<snip>

The best that could be said of the Euro-zone last week was that the news stopped being horrible. In fact the EZ retail PMI actually firmed a bit from last month buoyed by an increase of consumer spending from Germany. One positive side effect of a strong currency for Europeans is the increase in purchasing power and that benefit appears to be translating into stronger consumer demand on the Continent. The increase in Retail numbers was not universal; as France was the only one of the three majors to report lower month to month comparisons.

The discouraging economic situation in France remains the primary weight around euro's neck as fears grow daily that the French, dismayed by the poor economic conditions in the country, will reject the referendum on the EU Constitution, sending the whole concept of a unified Europe in to disarray. Although the vote is still more than a month away, if the situation does not improve as the date nears, the worries in the FX market will intensify.

...more...

Majors Stage a Counter Offensive Against the Dollar

http://www.dailyfx.com/index.php?option=com_content&task=view&id=661&Itemid=39

EUR/USD - Euro came roaring back in the latest attempt to push the pair back towards the psychologically important 1.3000 level. As the euro bulls continue to press with their attack they will encounter a minor resistance at 1.2941, a double top created by the Apr 7-10 trading range.

In case the euro longs manage to push their way higher they will have to contend with an intermediate resistance at 1.2984, a Mar 30 daily spike high. A major resistance can be seen at 1.3015,a 61.8 Fib of the Feb-Mar euro rally, with the 20-day SMA reinforcing the resistance further. If the euro longs fail to hold the 1.2900 figure they mat rely on a minor support at 1.2864, a 10-day SMA, which currently defends an intermediate support at 1.2797, a double bottom created by the Apr 5 and Apr 8 daily lows. In case the dollar bulls breakthrough the lesser defenses, euro longs may rely on the 1.2729, a 2005 low, for a major support. Oscillators are mixed, with Stochastic extremely oversold on daily chart at 12.09 and is overbought at 89.13 on the dealer (4HR) chart. RSI at 40.01 is slopping upward toward the overbought level on the daily and is neutral at 58.26 on the 4-hour chart. MACD remains below the zero line on the daily chart and continues to skim the zero line on the dealer (4HR) chart.

<snip>

USD/JPY - Yen continues to consolidate within an upward sloping channel as the pair continues to drift sideways toward the channel's lower boundary. As USDJPY continues to consolidate within a tight trading range, dollar longs continue to find minor support at 107.90, a 10-day SMA. An intermediate support at can be seen at 107.50, a Mar 29-Apr 1 consolidation range high. A major support at 106.64, a 20-day SMA continues to defend the dollar held territory. As the dollar longs push deeper into the yen held territory they will encounter a minor resistance at 108.52, Apr 5-10 consolidation high, with an intermediate resistance at 109.14 an Oct 11 daily low establishing the next level of the yen's defenses. A major resistance at 109.14 an Oct 11 daily low, remains a prime target for the dollar longs as a breakout above may see the greenback retest the resistance around the 111.48, a beginning of the Nov-Dec yen rally. Indicators remain mixed, with Stochastic extremely overbought on daily chart at 91.01 and is slopping upward above the oversold line at 32.82 on the dealer (4HR) chart. RSI remains above the overbought line on the daily at 75.11 and is neutral at 52.23 on the 4-hour chart. MACD continues to travel above the zero line on both daily and the dealer (4HR) charts.

...more...

No Reports today.

Spot on 'toon today, Ozy! :hi:

Have a Great Day Marketeers!

[UpInArms]

11. Fresh News May Weaken the Dollar

http://www.nytimes.com/2005/04/10/business/yourmoney/10mark_.html

WILL this be the week that tests the dollar?

Through Friday, the dollar is up 4.8 percent this year against the euro and 5.5 percent against the Japanese yen. The Federal Reserve's broad trade-weighted dollar is up 2.1 percent. While many forecasters still say the dollar will fall again, the rebound has lasted much longer than many people expected.

But with new reports due this week on the United States trade deficit and foreign inflows into American stocks and bonds, there is a chance for news that could weaken the dollar.

The report on the trade deficit, on Tuesday, is expected to show that it grew in February, to $59 billion from $58.3 billion in January, according to Bloomberg News. But the report due Friday on foreign inflows could show a sharp slowdown for February, after a near-record net inflow of $91.5 billion in January.

<snip>

A bigger-than-expected jump in the trade deficit with a decline in foreign inflows could be worse, because a growing trade deficit means that flows from abroad have to increase to cover it.

...more...

[UpInArms]

13. No plans to shift reserves from dollar, says bank chief (S Korea)

http://joongangdaily.joins.com/200504/10/200504102254309109900090509052.html

April 11, 2005 ㅡ Following the weakening of the U.S. dollar and speculation that Asian central banks may diversify their holdings out of the currency, Park Seung, the governor of the Bank of Korea, said the country will not shift its foreign currency reserves out of the dollar for now, Yonhap news agency reported yesterday.
Mr. Park also said that the heads of the central banks of Korea, China and Japan will meet in Seoul next month, primarily to discuss foreign exchange issues.

"The Bank of Korea will host the first international conference of central banks , and at that time, the three heads will have a separate meeting," Mr. Park said in Okinawa, where he was attending the annual meeting of the Inter-American Development Bank. "We didn't set a specific agenda for the meeting, but instead will discuss how to cooperate in general."

The exchange rate and foreign currency reserve issues are expected to be high on the agenda, however, since the three nations have huge dollar reserves and are significantly affected by the weak dollar.
Japan has the world's largest foreign reserves, at $840 billion. China has the second-largest reserves, at $600 billion, and Korea the fourth largest, at $200 billion.

"The won-dollar exchange rate has seemingly dropped excessively this year," Mr. Park said.
The Japanese yen and the euro have depreciated by about 5 percent against the dollar in 2005, while the won has appreciated by 2 percent, he added.

...more...

[UpInArms]

15. How to make the slumping dollar count

http://www.indystar.com/articles/1/235637-2391-051.html

Remember when . . . you could buy a multicourse Italian dinner in Venice for the same price as a meal at Olive Garden? You could purchase your spring wardrobe in Paris, without having to pawn your wedding ring? You could stay at a top hotel in Vienna and still have money left over for the opera -- balcony seats?

Remember when . . . the dollar was robust and the euro was weak?

"When the euro was first introduced (in 2002), it (the dollar) was extremely strong, at about 85 cents to the dollar. Then about two years ago, the tide really turned," said Steve Loucks, spokesman for Carlson Wagonlit Travel Associates, a travel group with a number of agencies nationwide. "In the past 15 months, the dollar has really taken a beating against the euro."

That hammering translates to about $1.34 to one euro.

For Americans visiting any of the dozen euro countries -- or such alternative currency destinations as England, where U.S. cash also seems as flimsy as Monopoly money -- the sticker shock can be jarring. Those who once traveled in bourgeois comfort now find themselves booking two-star hotels and eating appetizers for dinner. Meanwhile, frugal visitors are watching their shoestring budgets fray, and downgrading to hostels or pensiones and visiting A-list museums during their discounted hours.

...more...

[UpInArms]

3. There's a really big car crash taking place in Detroit

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/04/10/ccluke10.xml&menuId=242&sSheet=/money/2005/04/10/ixcoms.html

The tragedy unfolding at MG Rover is not the only crisis in the automotive industry. There is a slow-motion car crash taking place in Detroit that is symbolic of the profound decay of US manufacturing. I am talking about the frightening collapse of General Motors Corporation (GM), the biggest carmaker in the world, and by certain measures, still the biggest business in the world.

This is no ordinary disaster. It could have deep effects on employees, pensioners, suppliers, dealers, investors, bond holders - and the world's confidence in American capitalism. It is an extreme example of Schumpeter's "creative destruction" which lies at the heart of the West's economic system.

For more than 60 years, every other car sold in the US was made by GM. No longer. This year its market share has slumped to a record low of 25 per cent. It owns weak brands such as Buick, Cadillac, Chevrolet, Saab and Pontiac, which tend to have poor resale values. It has relied for years on sales of highly profitable, gas-guzzling sports utility vehicles and pick-ups. But in an era when oil fetches more than $50 a barrel, such vehicles are losing their appeal - and, anyway, ferocious Japanese competitors such as Toyota, Nissan and Honda make them better - and cheaper.

GM is a prisoner of its past. It has unionised plants and armies of retirees - almost two and half pensioners for every active worker - 420,000 of them in all. And its workers enjoy generous healthcare benefits that are crippling the business. Right across the US there has been a ruinous increase in such costs, so that in 2005 GM will incur health care spending of $5.6bn (£2.95bn). It covers 1.1m Americans, and has become the largest medical provider in the country.

<snip>

This has become a vast bank, providing not just car loans but also mortgages and business lending. GM uses its creditworthiness to raise cheap money at wholesale rates to fund its banking activities. But, thanks to a recent profit warning, its bonds have been downgraded - almost to junk level. Further setbacks could make its entire financing operation un-economic. For the fixed interest market, a default of GM bonds would be apocalyptic.

...more...

[punpirate]

47. Does this mean, however that GM would...

... happily embrace a single payer health care system? Certainly not. Would GM willingly put its own money into the R&D of fuel-efficient cars? Not until it's almost too late... and then would flood their market with the contemporary equivalent of a Chevette.

I guess what Charles E. Wilson said wasn't exactly true.

[UpInArms]

50. sent me looking for what Charles E. Wilson said

:D

During the hearings, when asked if as secretary of defense he could make a decision adverse to the interests of General Motors, Wilson answered affirmatively but added that he could not conceive of such a situation "because for years I thought what was good for the country was good for General Motors and vice versa." Later this statement was often garbled when quoted, suggesting that Wilson had said simply, "What's good for General Motors is good for the country." Although finally approved by a Senate vote of 77 to 6, Wilson began his duties in the Pentagon with his standing somewhat diminished by the confirmation debate.

http://www.nndb.com/people/098/000057924/

thanks! :hi:

[UpInArms]

4. US not facing national housing "bubble" - Greenspan

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8130727

WASHINGTON, April 8 (Reuters) - Most U.S. homeowners do not need to fear an abrupt collapse in home prices despite sharp increases in recent years, Federal Reserve Chairman Alan Greenspan said in a letter released on Friday.

"For the nation as a whole, I do not believe that a 'bubble' has developed, but the extraordinary gains in some local markets may not be sustainable," Greenspan said in written responses dated April 6 to questions raised by Sen. Jim Bunning, a Kentucky Republican, at a Feb. 16 Senate Banking Committee hearing.

Greenspan noted the "housing market is quite strong at the moment, buoyed by mortgage interest rates that are still low by historical standards and solid growth in real disposable income."

...more...

[54anickel]

43. WTF is he talking about? "Solid growth in real disposable income" My A$$

Workers Can’t Afford Bush’s “Ownership Society”

http://www.politicalaffairs.net/article/articleview/901/1/87/

snip>

With consumer debt at record highs and real wages and income falling for most workers, the prospects for savings are grim. Over the past 12 months, average hourly earnings rose 2.2 percent, less than the 3.0 percent increase in the CPI. :eyes: And we all know how accurate the CPI numbers are!

Consumer debt now stands at $2.4 trillion, the highest level ever recorded. As interest rates continue to rise, the debt burden will consume ever-larger portions of workers’ incomes.

snip>

The original attempt to build an “ownership society” occurred after World War II when the government created the GI Bill and the FHA and VA home mortgage guarantee programs to promote home ownership. Strong economic growth and high levels of unionization in key industries allowed families to build economic security and win employer-sponsored retirement and health benefits.

Expanding the “ownership society” will take more pro-worker policies and more federal assistance to reach the working poor and minority families, not the tax incentives that Bush offers to those who can afford to save. The Bush plan abandons decades of federal programs designed to pool the risks that workers face and provide financial protection for all.

Under Bush, earnings for households with incomes above the median are growing twice as fast as earnings for households with incomes below the median. High-income households have also amassed greater wealth from Bush’s tax cuts. The “ownership society” simply rewards the wealthy with another round of tax breaks and opens the door to dismantling the social programs that aid working families.

more...

[UpInArms]

45. Meanspin talks out of his ass

and is a freakin' shill from this corrupt maladministration.

:argh:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1385107

Higher Prices, Stagnant Wages Produce Pay Cut for U.S. Workers -LAT

For the first time in 14 years, the American work force has in effect gotten an across-the-board pay cut.

The growth in wages in 2004 and the first two months of this year trailed the growth in prices, compounding the squeeze from higher housing, energy and other costs.
....
"There's no such thing as raises anymore," Romero said. This is the first time that salaries have increased more slowly than inflation since the 1990-91 recession. While salary growth has been relatively sluggish since the 2001 downturn, inflation had stayed relatively subdued until last year, when the consumer price index rose 2.7 percent. But average hourly wages rose only 2.5 percent.

The effective 0.2-percentage-point erosion in workers' living standards occurred while the economy expanded at a healthy 4 percent, better than the 3 percent historical average.

At the same time, corporate profits hit record highs as companies got more productivity out of workers while keeping pay raises down.

.....MORE......

http://www.latimes.com/business/la-fi-wages11apr11,0,5092199.story?coll=la-home-headlines

[54anickel]

73. Oil prices pinch other spending

http://www.csmonitor.com/2005/0407/p01s01-usec.htm

NEW YORK - The price of gasoline has begun a springtime surge that experts believe will push it to a national average of $2.50 a gallon by Memorial Day.

At that level, many Americans will find it costs about $65 - or more - to tank up the Sequoia or Suburban. In California, which usually has some of the highest prices in the nation, forget about expensive self-indulgences because gasoline could average close to $3 a gallon.

If prices were to remain at these higher levels by the summer driving season, it would mean Americans would spend $5 billion more a month than they did last summer on gasoline. Economists estimate this will reduce economic activity as Americans have less money to buy ice cream or go to the movies. In fact, consumer polls now indicate confidence in the economy is eroding as fast as gasoline prices are rising.

"Consumers are now responding differently this year than they did last year when prices were high. They are fundamentally changing their spending," says Mark Zandi, chief economist at Economy.com. "I think we'll begin to see the effects on spending in the second quarter."

Last week, an analysis by the investment banking firm Goldman Sachs looked at how high gasoline prices would have to go to induce Americans to change their SUV lifestyle. The analysis said, "Super spike may be upon us." If so, it predicted the price of a barrel of oil could reach $135 by 2008. At that point, the analysis concluded that gasoline will average about $4.30 a gallon - a price high enough to "meaningfully reduce consumption" and reduce oil prices.

more...

[UpInArms]

75. I don't think that we'll have to wait until gas hits $4.50/gal

to see consumer spending (on everything else) plummet.

[54anickel]

80. Difference between Wall & Main Streets again. This guy thinks it has

to get to $4.50/gallon to start hurting? Sheesh, maybe at HIS income. :eyes:

[54anickel]

56. Greenspan: More credit is a good thing

http://money.cnn.com/2005/04/08/news/economy/fed_greenspan.reut/index.htm

snip>

"Home ownership is at a record high, and the number of home mortgage loans to low- and moderate-income and minority families has risen rapidly over the last five years," Greenspan said in prepared remarks for delivery to a conference on community affairs sponsored by the Fed.

"Credit cards and installment loans also are available to the vast majority of households," the Fed chief noted, adding that carried with it an obligation to acquire the education needed to use them wisely.

Greenspan said that policy-makers, bankers and consumer advocates must remain open to the idea of innovation and restructuring within financial services businesses to ensure they remain flexible enough to benefit consumers and foster market demand.

Greenspan made no comment on current U.S. economic conditions nor on prospects for future interest-rate changes.

bit more...

[UpInArms]

58. wish we could put sound into our posts

this one would carry the tune:

I'm forever blowing bubbles
pretty bubbles in the air

[54anickel]

67. Heh-heh, I was thinking more like a simple sound effect -

Raspberries comes to mind. :P

[UpInArms]

5. Criminals: Do tell IRS your income

http://www.indystar.com/articles/1/235674-3881-047.html

excerpt:

This year he has thoughtfully directed me to the section of the instruction booklet titled "Other Income." In the middle column of page 27, you will find, in bold print, BRIBES. "If you receive a bribe, include it in your income."

There's more. In addition to bribes, the IRS would also like you to report kickbacks. "You must include kickbacks, side commissions, push money or similar payments you receive in your income. . . ." So I guess you go to H&R Block, hand over the W-2s and say, "Oh, by the way, add in 15 grand under other income for a construction contract I threw to my brother-in-law."

Maybe if you pay your 23 percent in taxes, nobody bats an eye or asks for an explanation.

The IRS also would like you to report (are you ready?) -- illegal income. "Illegal income, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040)."

My question is this: Do you just write the amount of income from illegal drugs on line 21, or do you also draw an arrow into the margin and scribble, "Meth lab good this yr., pls don't tell Momma, her heart ain't that strong."

...more amusement at link...

[UpInArms]

6. I.R.S. to Close Walk-In Centers as Agency Faces Tighter Budget

http://www.nytimes.com/2005/04/10/politics/10irs.html

After widely publicized hearings seven years ago, Congress passed a law ordering the Internal Revenue Service to enhance services to taxpayers, improvements that were financed by cutting enforcement of the tax laws to make sure telephones were answered and forms were readily available. That era is now ending.

The I.R.S. will close up to 105 of its 367 walk-in centers, which dispense forms and advice, said Mark W. Everson, the agency's commissioner. Hours when the I.R.S. answers telephone calls will also be reduced, he said. After the current tax return filing season ends on Friday, people with simple tax returns will no longer be able to file using a touch-tone telephone. Last year 3.8 million taxpayers, most of them with low incomes, used this Tele-File system.

President Bush, in his budget for the fiscal year that starts Oct. 1, wants to cut money to respond to taxpayer requests for help by 1.3 percent and money to reach out to taxpayers by 6.8 percent compared with the current fiscal year. The $57 million in proposed cuts is about one-half of 1 percent of the I.R.S. budget of 10.2 billion.

The walk-in center closings and related cuts will save $17 million to $21 million annually, Mr. Everson said.

...more...

[Zynx]

17. They do that only so that they can charge people who don't report with

tax evasion.

[UpInArms]

20. thanks Zynx -

the two IRS articles made an interesting visual for me - the crook shaking his/her head at the tax return questions, yet unable to go to an IRS center and ask "now how do I account for the loss of property 'cause my meth house burned down?"

:D

[spotbird]

22. All income is taxable. nt

[UpInArms]

27. IRS challenges audit study

http://www.kansascity.com/mld/kansascity/news/nation/11362556.htm

WASHINGTON — The Internal Revenue Service audits far fewer of the biggest financial companies — banks, brokerages and accountants — than it does other large corporations, according to an analysis of government data.

The IRS disputed the findings by Syracuse University's Transactional Records Access Clearinghouse and emphasized that the agency audits returns with a high risk of tax evasion, regardless of the industry.

“The conclusions drawn by the TRAC analysis are not accurate,” said Deborah Nolan, IRS commissioner for the large and midsize business division.

Using information provided by the IRS, the researchers measured disparities in audit rates of corporations with $250 million or more in assets.

...more...

[UpInArms]

7. Charity Begins at the Board. Just Ask A.I.G.

http://www.nytimes.com/2005/04/10/business/yourmoney/10gret.html

excerpt:

The Starr Foundation was created by C. V. Starr, the founder of A.I.G., in his will. According to the most recent filing, it had roughly $3.6 billion in assets, mostly in A.I.G. shares. It is a major contributor to education: 34 percent of the $190 million it distributed in 2003 went to academic scholarships. The rest went to cultural and charitable institutions like Carnegie Hall, the Children's Aid Society and Memorial Sloan-Kettering Cancer Center. It also made donations to New York Times Company Foundation projects.

Florence A. Davis is president of the Starr foundation, but Mr. Greenberg is its chairman and, according to the filing, devotes 200 hours a year to its business. Ms. Davis did not return a phone call seeking comment. Mr. Greenberg, through his lawyer, declined to comment.

One of the biggest recipients of Starr funds is the Asia Society, which aims to educate Americans about Asia. In 2003, Starr paid $2.6 million to the society, of which Mr. Greenberg is a trustee. Mr. Holbrooke is both a trustee and the chairman of the society's executive committee.

<snip>

A.I.G., in its most recent proxy statement, says directors can be considered independent as long as contributions to the nonprofit organization they run do not exceed $1 million or 2 percent of the charitable organization's gross revenues for the most recent year.

...more...

[UpInArms]

21. Greenberg likely to take Fifth in AIG probe

http://www.marketwatch.com/news/story.asp?guid=%7B23C16370%2D7D15%2D4CB3%2D82C1%2D7D154BAA91B0%7D&siteid=mktw

NEW YORK (MarketWatch) -- Maurice R. Greenberg, former chairman and chief executive of American International Group, is likely to invoke his Fifth Amendment rights to avoid testifying in an inquiry by New York state Attorney General Eliot Spitzer, people familiar with the situation told The Wall Street Journal Online. See story.

Greenberg's lawyers had sought a delay or an agreement to limit the scope of the questioning, a move Spitzer rejected.

One of Greenberg's lawyers called unfair the prospect of questioning Greenberg before he or his attorneys could review the material that government investigators and AIG's lawyer have put together, the Wall Street Journal reported.

...more...

"unfair" :nopity:

"no impact" :rofl:

[UpInArms]

89. Greenberg won't testify before regulators - lawyer (spinning like a top)

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8146322

NEW YORK, April 11 (Reuters) - Former American International Group Inc. (AIG.N: Quote, Profile, Research) Chairman and Chief Executive Maurice "Hank" Greenberg will decline to offer testimony when he is questioned by regulators on Tuesday, Greenberg's lawyer David Boies said in a statement Monday.

Boies said Greenberg needed more time to prepare for the questioning by the U.S. Securities and Exchange Commission and the New York State Attorney General, citing a "great number" of transactions under investigation, the "thousands of documents" and the fact that some transactions took place five to 20 years ago. Boies added that requests to postpone the Tuesday subpoena date were denied.

...very short newsblurb...

"decline to offer testimony" = taking the Fifth - or refusing to incriminate oneself

the man that had the iron reins and control of AIG for 40+ years needs more time to get his lies sorted out - because he has told so many for so long that he has forgotten what the truth looked, smelled and acted like.

[UpInArms]

92. Greenberg spewing nonsense

3:51pm 04/11/05 GREENBERG SAYS HE WASN'T FAMILIAR WITH SOME AIG DEALS

3:48pm 04/11/05 GREENBERG HASN'T TIME TO PREPARE FOR APRIL 12 TESTIMONY

3:43pm 04/11/05 EX-AIG CEO GREENBERG WON'T TESTIFY YET TO SEC, SPITZER

[cosmicdot]

96. being chairman at the Nixon Center ... I expect he's getting a lot of help

... from the good ol'boy network ... and, son, Evan G. Greenberg, is on the Nixon Center's Advisory Council ...


Board of Directors

Honorary Chairman: Henry A. Kissinger

Chairman: Maurice R. Greenberg
http://www.nixoncenter.org/boardac.htm


must be nice to be able to buy only the best legal, like medical, help available

[UpInArms]

48. Spitzer on AIG: We Call It ''Fraud''

http://www.cfo.com/article.cfm/3858370?f=home_breakingnews

New York Attorney General Eliot Spitzer has turned up the heat on American International Group and its former chairman Maurice "Hank" Greenberg.

Speaking on the Sunday television show "This Week," Spitzer accused the executive who had built the largest insurance company of committing fraud. "That company was a black box run with an iron fist by a CEO who did not tell the public the truth," said Spitzer, according to Reuters. "That is the problem."

"We have powerful evidence, we will proceed with it," Spitzer added, referring to the probe of Greenberg. Spitzer did not say whether the investigations would result in indictments, according to accounts of the interview. And he dismissed suggestions from Greenberg's lawyer that the key issues in the investigations were the result of accounting errors.

"The evidence is overwhelming that these were transactions created for the purpose of deceiving the market. We call that fraud," Spitzer reportedly asserted. "It is deceptive. It is wrong. It is illegal."

...more...

[cosmicdot]

97. Spitzer for President

his career might need expediting imo

unless he can do battle better at the state level


the last para. of that article: looks like Greenberg's network is a'foot trying its best to discredit Eliot ... how sad it is when the 4th estate turns against us ...

"The New York Post, meanwhile, reported today that Spitzer received $18,500 in campaign contributions from 16 different attorneys from the law firm of Paul, Weiss, Rifkind, Wharton & Garrison, which is currently representing AIG and where Spitzer once worked as an associate."

yeah, well, that's nice ... what's the problem?

[UpInArms]

98. thanks for bringing that paragraph out cosmicdot

my thought was

and that means what to me?

don't you just love that "librul" media - attacking anyone who tries to make the rules apply to all - even the big fatpocketed top of the ladder crooks and cheats?

[UpInArms]

8. Willis to pay $51M to clients

Hatch, Spitzer led settlement

http://www.twincities.com/mld/twincities/11349720.htm

The world's third-largest insurance broker on Friday agreed to pay $51 million in restitution to policyholders and change its business practices in Minnesota and across the nation. Willis Group Holdings Ltd., a London-based broker, settled allegations of fraud and the use of contingent commissions to steer business to certain insurers at the expense of clients.

Minnesota Attorney General Mike Hatch and New York Attorney General Eliot Spitzer led the settlement with Willis.

Hatch's office estimates that about 300 Willis business clients in Minnesota will share about $4.5 million in cash payments under the agreement. Some of Willis' largest customers in the state include 3M Co., Allina Hospitals & Clinics and St. Jude Medical Inc.

<snip>

Minnesota and dozens of other states have expanded an industry-wide probe initiated by Spitzer last year. On Oct. 14, Spitzer sued Marsh & McLennan Cos. Inc., accusing it of bid rigging and using incentive fees to control the sale of commercial insurance. Marsh and Aon, the world's top two insurance brokers, reached $850 million and $190 million settlements, respectively.

...more...

[UpInArms]

9. Ford Lowers Its Earnings Forecast for Year

http://www.nytimes.com/2005/04/09/automobiles/09ford.html

DETROIT, April 8 - The Ford Motor Company lowered its earnings forecast for the year on Friday, citing higher gas prices and rising health care costs. The company said it would also abandon its goal of $7 billion in pretax profit by 2006, a cornerstone of the turnaround plan that its chief executive, William Clay Ford Jr., put in place after he took control in 2001.

Ford, the nation's second-largest automaker, now expects to earn $1.25 to $1.50 a share for the year, down from its previous guidance of $1.75 to $1.90 a share.

In addition, Ford warned that pretax profit at its automotive division would "break even at best," down from an earlier forecast of at least $1.5 billion, an indication that it would have to again rely on its financing division, Ford Credit, to turn a profit.

Friday's announcement was the second from a Detroit automaker in recent weeks that reinforces the dim outlook for American automakers. Last month, General Motors cut its earnings forecast for the year to a range of $1 to $2 a share, down from $4 to $5 and said it would lose close to $850 million in the first quarter alone. That announcement put G.M.'s already tenuous investment-grade rating in further peril as Standard & Poor's put the automaker on negative outlook, indicating it could cut G.M.'s rating to junk status.

...more...

Didn't Ford just pay their top execs MILLIONS????

What's up with that?

[UpInArms]

37. Ford corporate bonds fall sharply as S&P cuts outlook

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38453.4113915509-834046333&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- Ford Motor Co. (F) corporate bonds fell sharply Monday after Standard & Poor's cuts it outlook on the company's ratings to negative from stable, following the car giant's profit warning for 2005. Ford's 7.45% bond due 2031 was last yielding 9.257%. It's spread, or difference in yield to a comparable, lower-risk Treasury, widened 35 basis ponts to 4.65% and is up 90 basis points on the month. Ford's 7.0% note due 2013 was yielding 8.722%. Its spread widened 32 basis points to 4.24%, and is up 1.3% on the month. General Motors Corp. (GM) 5.11% bond due 2033 was also sharply lower, yielding 10.2%. Its spread widened 10 basis points to 5.31%.

[UpInArms]

40. Hertz outlook "cut" along with Ford

10:16am 04/11/05 FITCH REVISES FORD CREDIT, HERTZ OUTLOOK TO 'NEGATIVE'

10:16am 04/11/05 FITCH REVISES FORD OUTLOOK TO 'NEGATIVE' FROM 'STABLE'

[UpInArms]

42. Auto parts makers slammed after Ford warning

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38453.4341003241-834047271&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

SAN FRANCISCO (MarketWatch) -- Major auto parts makers saw their shares retreat Monday after one of their biggest customers, Ford Motor (F) , capped last week with a profit warning. Ford spinoff Visteon Corp. (VC) led the decline, off 5.1% at $5.22 while General Motors spinoff Delphi Corp (DPH) shed 2.4% at $4. Other decliners included Dana Corp. (DCN) , Borg-Warner (BWA) , American Axle & Manufacturing Holdings (AXL) and Lear Corp. (LEA) , all trading off about 3%. Ford Motor shares lost 6.7% to $10.30 while General Motors (GM) fell 2.6% at $28.74

[UpInArms]

51. Carmaker debt mixed for banks (look out below!)

http://www.marketwatch.com/news/story.asp?guid=%7B0063F5E8%2D0411%2D40F1%2DB4EB%2DB130FCD56E82%7D&siteid=mktw

NEW YORK (MarketWatch) - Some large banks, particularly those in the Midwest, could see some negative effects from their debtholding in Ford Motor Co Inc and General Motors Corp amid growing concern about credit ratings, J.P. Morgan analysts said Monday.

"The troubles at GM and Ford should continue to widen credit default swap spreads (as they have since mid-March) which should benefit Bank of America and Wachovia, who had both bought credit default swaps when spreads had tightened - our sense is that the benefit is likely to be greater at Bank of America," the analysts wrote.

Credit default swaps are a way for bondholders to insure themselves against big losses if a firm to whom they are a creditor defaults.

Rating agency Standard & Poor's cut Ford Motor Co.'s (F: news, chart, profile) debt rating outlook to negative from stable due to "heightened concerns" regarding Ford's profit potential after its significantly revised earnings and cash flow guidance for 2005. See full story.

<snip>

Fifth Third Bancorp (FITB: news, chart, profile) , on the other hand, which Morgan said has been the most aggressive bank in growing its commercial loan portfolio in the Midwestern region, is likely to be more exposed to continuing debt woes at Ford and GM.

...more...

[UpInArms]

10. Retailer Sharper Image to restate earnings

Retailer Sharper Image to restate earnings

http://www.mercurynews.com/mld/mercurynews/business/11353150.htm

San Francisco retailer Sharper Image, which sells products including robotic vacuum cleaners and massage chairs, said it will restate earnings lower by about $4.5 million because of accounting errors.

Net income for the first three quarters of last year will be reduced by about $500,000, while prior year's restatements will total about $4 million, the company said Friday in a statement. Profit for the year ended Jan. 31 will be at the low end of its forecast of 90 to 95 cents a share.

The restatement stems from an evaluation of its lease-accounting practices and the discovery of an error in its accounts-payable calculations, the company said. McDonald's, Borders Group and other companies have reduced reported pretax earnings by more than $1.5 billion after regulators urged a review of lease accounting.

...more...

[UpInArms]

12. US will block Brown campaign to beat poverty with gold sale

http://politics.guardian.co.uk/election/story/0,15803,1456397,00.html

Gordon Brown's year-long anti-poverty crusade is in jeopardy this week, as the US prepares to block his plans for a sale of International Monetary Fund gold reserves to raise cash for debt relief.

Striking a deal to sell or revalue some of the IMF's $9 billion of gold reserves in Washington, at the spring gathering of the IMF and World Bank, was meant to be the first victory in Brown's campaign to increase spending on aid, and offer debt relief to the poorest countries. But the Treasury is playing down prospects for a deal, and it is thought Brown could even give Washington a miss this week, to concentrate on the election campaign.

'Clearly, the US is the blockage on this,' said Jonathan Glennie, senior policy adviser at Christian Aid. But he accused the Chancellor of overplaying the chance of a debt deal in February, after he chaired a fractious meeting of G7 finance ministers.

An IMF feasibility study, commissioned by G7 finance ministers, has given the thumbs-up to gold sales. But the US Treasury has been urged to oppose the idea by gold-mining firms who fear that a sell-off could depress global prices for the metal.

...more...

[54anickel]

81. Heh-heh, we are suppose to believe the US Treasury is looking out for

the gold-mining firms? BWAHAHAHA!

I think the US Treasury has that ear-marked once again for some shenanigans with the ESF.

The Secretary is responsible for the formulation and implementation of U.S. international monetary and financial policy, including exchange market intervention policy. The ESF helps the Secretary to carry out these responsibilities. By law, the Secretary has considerable discretion in the use of ESF resources.

The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s, the Act provides in part that "the Department of the Treasury has a stabilization fund …Consistent with the obligations of the Government in the International Monetary Fund (IMF) on orderly exchange arrangements and an orderly system of exchange rates, the Secretary …, with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities."

http://www.treas.gov/offices/international-affairs/esf/


I gotta try and find that old article on how they misused it during the Asian currency crisis....I'm on a different system right now so can't get to my old bookmarks!


On edit: Here it is. (Wrong currency crisis, it was Mexico)

http://www.atimes.com/atimes/China/FK06Ad01.html

snip>

The ESF was established by Section 20 of the Gold Reserve Act of January 1934, with a $2-billion initial appropriation. Its resources have been subsequently augmented by special drawing rights (SDR) allocations by the IMF and through its income over the years from interest on short-term investments and loans, and net gains on foreign currencies. The ESF engages in monetary transactions in which one asset is exchanged for another, such as foreign currencies for dollars, and can also be used to provide direct loans and guarantees to other countries. ESF operations are under the control of the secretary of the treasury, subject to the approval of the president.

ESF operations include providing resources for exchange-market intervention. The ESF has also been used to provide short-term swaps and guarantees to foreign countries needing financial assistance for short-term currency stabilization. The short-term nature of these transactions has been emphasized by amendments to the ESF statute requiring the president to notify Congress if a loan or credit guarantee is made to a country for more than six months in any 12-month period. Short-term currency swaps are repurchase-type agreements through which currencies are exchanged. Mexico purchased dollars in exchange for pesos and simultaneously agreed to sell dollars against pesos three months hence. The US earned interest on its Mexican pesos at a specified rate.

It was Bear Stearns chief economist Wayne Angell, a former Fed governor and advisor to then Senate majority leader Bob Dole, who first came up with the idea of using the ESF to prop up the collapsing Mexican peso. Bear Stearns, a Wall Street giant, had significant exposure to peso debts. Senator Robert Bennett, a freshman Republican from Utah, took Angell's proposal to Greenspan and Rubin. Both rejected the idea at first, shocked at the blatant circumvention of constitutional procedures that this strategy represented, which would invite certain reprisal from Congress.

Congress had implicitly rejected a rescue package that January when the initial administration proposal of extending Mexico $40 billion in loan guarantees could not pass. The chairman of the Fed advised Bennett that the idea would only work if Congress's silence could be guaranteed. Bennett went to Dole and convinced him that the whole scam would work if the majority leader would simply block all efforts to bring this use of taxpayers' money to a vote. It would all happen by executive fiat. The next step was to persuade Dole and his counterpart in the House, Speaker Newt Gingrich. They consulted several state governors, notably then Texas governor George W Bush, who enthusiastically endorsed the idea of a bailout to subsidize the border region in his state. Greenspan, who historically opposed bailouts of the private sector for fear of incurring moral hazard, was clearly in a position to stop this one. Instead, he used his considerable power and influence to help the process along when key players balked. Moral hazard infected not only the banking system, but also the political system making a mockery of the constitution. Few in Washington were prepared to be reminded that it was this kind of systemic corruption in the name of the common good that had brought down the Roman Empire.

The peso bailout would lead to a series of similar situations in which influential private financial institutions knowingly got themselves into future trouble in order to maximize their short-term profit, vindicating the moral-hazard principle predicting that market participants will take undue risks in the presence of bailout guarantees. As Thailand, Indonesia, Malaysia, South Korea and Russia stumbled into financial crisis, culminating in the collapse of hedge fund giant Long-Term Capital Management (LTCM), which played key speculative roles in precipitating the crisis by achieving fantastic returns to begin with, Greenspan moved to increase dollar liquidity to support the distressed bond markets. At the helm of LTCM was yet another former member of the Fed board, former vice chairman David Mullins, to plead for help from his former Fed colleagues.

more...

[UpInArms]

14. Rule No. 1 for life after a layoff: Do not panic

http://www.chicagotribune.com/business/investing/personalfinance/chi-0504090303apr10,1,5560173.story?coll=chi-businessyourmoney-hed&ctrack=1&cset=true

(free registration or try www.bugmenot.com)

Faced with job loss, would you circle the wagons or hit the road?

Laid off in November from a professional credentialing association in a downsizing wave, Michael Herndon spent nearly a month traveling in Europe, then visited family for the holidays and took another trip to Mexico.

<snip>

For example, don't be overcome by a wave of fiscal conservatism when it comes to credit cards and home-equity lines, said Rene Nourse, a planner and broker with Citigroup's Smith Barney unit who participated in the recent conference. The free call-in session was hosted by Citigroup's Women & Co. division, which provides financial education and services. Details of other planned conferences can be found at its Web site (www.womenandco.com).

When a layoff is first announced, immediately apply for a new, low-interest credit card or equity line, Nourse said. It will secure a line of credit at rates based on your working salary and provide an emergency cushion.

...more...

[UpInArms]

60. Tech job cuts hit 5-quarter high

http://money.cnn.com/2005/04/11/news/economy/challenger_tech/

NEW YORK (CNN/Money) - Job cuts in the tech sector hit their highest quarterly total since 2003, global outplacement firm Challenger, Gray & Christmas said Monday.

Heavy job cutting in the telecommunications and computer sectors pushed first-quarter job cuts to 59,537, up 3.2 percent from the previous quarter and more than double the number of cuts in the year-ago period, the Challenger report said.

"The biggest factor pushing tech job cuts to a five-quarter high was a surge in corporate combinations in the telecom sector, which resulted in over 3,000 job cuts in February," said John Challenger, the company's chief executive.

"In fact, 92 percent of the first-quarter telecom job cuts resulted from mergers," he added.

...more...

Look! More people to "not panic - get a new credit card!"

[UpInArms]

16. Lawmakers seek accounting of push for Social Security

Bush's campaign may cost millions

http://www.boston.com/news/nation/washington/articles/2005/04/10/lawmakers_seek_accounting_of_push_for_social_security/

WASHINGTON -- The Bush administration's ongoing Social Security blitz is unusual in scale in the selling of a domestic policy, mobilizing the president and vice president, four Cabinet secretaries, and 17 lesser officials, down to an associate director of strategic planning for the White House budget office.

It also may be one of the most costly in memory, well into the millions of dollars, according to some rough, unofficial calculations.

<snip>

More than a month into the 60-day push, administration officials have held more than 120 events in about 35 states. Participants range from President Bush and Vice President Dick Cheney to Noam Neusner, associate director for strategic planning at the Office of Management and Budget, and Michel Korbey, a senior adviser to the Social Security Administration.

<snip>

In 2000, when jet fuel prices were lower, the GAO estimated that flying Air Force One cost $54,100 per hour, or $60,250 in today's dollars. So far, the president has traveled to Indiana, New Jersey, Kentucky, Alabama, Louisiana, Tennessee, Florida, Arizona, Colorado, New Mexico, Iowa, and West Virginia. That is enough, by commercial schedules, to take at least 30 hours, or $1.8 million.

...more...

[UpInArms]

18. Gas prices and the next step

http://www.nctimes.com/articles/2005/04/10/news/columnists/observer/15_47_384_9_05.txt

excerpt:

What I'm fearful of as Super Spike commences, and what many other motorists fear as well, is that any day now money won't work at these stations. The ups and downs of prices are such that dealers and gas station owners and managers may soon refuse the coin of the realm.

If that happens, I see demands for deeds to houses coming. I see, and I am not alone in this, otherwise normal station operators dropping hints that they'd be interested in owning my yacht.

<snip>

For example, they knew that Exxon Mobil, the biggest oil company in the world, had after-tax profits of $26 billion last year, up 52 percent from 2003. ChevronTexaco had $13 billion in profit, up 85 percent, and that Shell Oil had $19 billion, up 48 per cent. These are the big companies that have swallowed up smaller ones; I am not able to break down the brands.

<snip>

The others places I know about are the wallets of CEOs. Their wallets are fat, sometimes hilariously so, and the way the CEOs have kept scads of money is probably that they had inside information that Big Oil was about to corner the market.

The New York Times took notice last Sunday of the money that some of these corporate vacuums are being paid. No need to go into full details. Isn't it enough to learn that the average pay last year for a chief executive at any of 179 large companies that had filed the necessary papers in the last couple of weeks was $9.84 million, up 12 percent from 2003?

...more...

[UpInArms]

19. Layoffs prompt tax-aid inquiry

http://www.berkshireeagle.com/Stories/0,1413,101~7514~2810134,00.html

PITTSFIELD -- The city has sent a letter to J&L Fiber Services, which recently cut half its work force here, to determine if it has lived up to the terms of a special tax assessment granted in 2000.

About a dozen production workers at the J&L facility at 14 Federico Drive were told March 31 that they were being let go as of the next day. One worker, who asked to remain anonymous, said employees were presented with a letter stating that the business "has not been profitable" because of current market conditions, "necessitating an indefinite reduction in work force."

The workers were given severance packages based on their length of service. The former employee who spoke said that six production workers and five managers remain. He predicted that the company eventually will close. He said remaining workers were offered bonuses to stay on for six months.

<snip>

In May 2000, the city granted the company a special tax assessment, allowing it to pay up to its full property tax bill in stages. The company was exempted from property taxes in fiscal 2001, the first year of the agreement, and was then required to pay in 25 percent increments over the next four years up to 100 percent. It reportedly saved $168,000 in taxes the first year.

In return, J&L pledged to meet certain job-creation and capital improvement targets, and to report annually to the state, which allows a 5 percent investment tax credit in such cases, and to the city on its progress in meeting those targets. The agreement expires June 30.

<snip>

Based on what has been reported about the layoffs, Kerwood said, J&L would appear to be short of its employment target for fiscal 2005. However, the philosophy behind the tax program, he said, is not to punish a company that is adversely affected by market conditions. In such cases, the city has the discretion to decide whether a company no longer is eligible for the tax break.

...more...

[spotbird]

23. When the fed decides inflation what measurment do they use?

I was under the impression that they didn't include food or energy, but the CPI does include those factors. If food and energy aren't included what measurment is used? The answer isn't as easy to come by via Google as you'd think.

I'm out for the day, so thanks in advance to anyone who knows.

[UpInArms]

25. here's what I found

http://www.frbsf.org/education/activities/drecon/2004/0410.html

What is "core inflation," and why do economists use it instead of overall or general inflation to track changes in the overall price level? (October 2004)

The question of the correct way to measure inflation is an important one. Price stability over time, along with sustainable growth in the economy, are the Federal Reserve’s primary goals in making monetary policy. The maintenance of price stability—avoiding high inflation rates or deflation over time—is important because fluctuating prices distort the economy’s price signals and can result in the misallocation of resources. 1

The Federal Reserve carefully reviews and analyzes the available inflation measures to monitor how well it is achieving its price stability goal. One common way economists use inflation data is by looking at “core inflation,” which is generally defined as a chosen measure of inflation (e.g., the Consumer Price Index or CPI, the Personal Consumption Expenditures Price Index or PCEPI, or the Gross Domestic Product Deflator) that excludes the more volatile categories of food and energy prices.

Why are food and energy prices typically more volatile than other prices?

To understand why the categories of food and energy are more sensitive to price changes, consider environmental factors that can ravage a year’s crops, or fluctuations in the oil supply from the OPEC cartel. Each is an example of a supply shock that may affect the prices for that product. However, although the prices of those goods may frequently increase or decrease at rapid rates, the price disturbances may not be related to a trend change in the economy’s overall price level. Instead, changes in food and energy prices often are more likely related to temporary factors that may reverse themselves later.

To demonstrate just how volatile energy prices, for example, can be relative to other prices less food and energy, Chart 1 compares the fluctuations of these two measures over time.



...more...

[patcox2]

66. They make it up, no standards; check "hedonic value adjustment."

They really have the ability to just make it up, no standards at all, using the "hedonic value adjustment." For example, the price of a car has quadrupled since 1980, but the feds say it has only doubled, because cars are now twice as good as they used to be, and therefore their "hedonic value" (how good they feel to own, I guess) is twice what it was.

[UpInArms]

24. Ingram Micro to eliminate 550 associate jobs

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38453.3484452199-834043445&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Ingram Micro Inc. (IM) said Monday that it would eliminate about 550 associate jobs as part of an outsourcing and optimization plan. The company expects the plan to result in savings of about $10 million in 2005. It anticipates recording charges totaling $26 million from the plan. The stock closed Friday at $16.07, down 1.6%.

Guess there will be 550 more people to "not panic - apply for credit cards"! :sarcasm:

[UpInArms]

26. Earnings missing targets or falling

Circuit City's quarterly profit falls 13%

http://www.marketwatch.com/news/story.asp?guid=%7B8047B52F%2DCE4F%2D48D6%2DAD95%2D8C852584C0EA%7D&siteid=mktw

NEW YORK (MarketWatch) -- Circuit City Stores Inc.'s fourth-quarter earnings declined, hurt by expenses associated with store closings, promotions and other costs, the consumer-electronics retailer said Monday.

Richmond Va.-based Circuit City (CC: news, chart, profile) said net income from continuing operations declined 13% to $82.5 million, or 43 cents a share, for the three months ended Feb. 28, down from $94.7 million, or 46 cents, earned in the same period a year earlier.

The latest quarter's results included a handful of special items -- $30 million in lease termination and other costs related to the shuttering of 19 stores, $4.2 million in expenses for an accounting change, $4.4 million in stock grant expense reductions and a $1.8 million gain from a sale of assets.

Net earnings totaled $85.4 million for the latest quarter, down from $89.6 million a year earlier.

...more...

[UpInArms]

30. Resin costs cut Bemis forecast 25%

http://www.marketwatch.com/news/story.asp?guid=%7B5564C28D%2DA715%2D4BB4%2D9B07%2DECAE104A4B65%7D&siteid=mktw

NEW YORK (MarketWatch) - Bemis Co. cut is earnings forecast by 25% Monday, despite an expected rise in sales, as the packaging company said it could not stay ahead of the rapid rise in resin prices in late 2004 and early 2005.

"While operating results for the first quarter incorporated higher selling prices consistent with our normal pricing strategy, resin cost increases that occurred late in the fourth quarter of 2004 and during the first quarter of 2005 have temporarily outpaced our ability to adjust related selling prices," said Jeff Curler, president and chief executive of Bemis.

The maker of flexible packaging said profit would improve later in the year after a seasonally weak first quarter.

Bemis previously expected first-quarter income of about 40 cents per share, comparable to its 2004 first-quarter earnings. Income per share would now be 25% reduced, Bemis said, despite a 7% expected increase in flexible packaging net sales.

...more...

[UpInArms]

78. ElkCorp ups 3Q EPS view; composites unit to miss view

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38453.553362037-834051671&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- ElkCorp (ELK) on Monday increased its third-quarter earnings forecast, citing record laminated shingle shipments, production improvements and improved pricing. The Dallas-based roofing and buildings products maker said it now expects to post earnings of 72 cents to 74 cents a share for the period ended March 31, vs. its previous forecast for a per-share profit of 62 cents to 67 cents. Slower-than-expected ramp-up of new production, higher-than-expected raw material costs, and slower-than-expected ramp-up of ElkCorp's new line of products for non-decking markets, however, resulted in lower-than-expected results in its composite lumber business. As a result, ElkCorp said it doesn't expect the business to meet prior expectations for the fiscal year, thought the company said it remains confident in the platform's ability to meet its long-term goals.

[UpInArms]

28. Commerce Secretary freely trades his views

http://www.miami.com/mld/miamiherald/business/special_packages/business_monday/11349629.htm

excerpt:

Q: A big issue facing the administration regards China and its textile exports, which are creating problems both domestically -- the textile industry feels under siege -- and in Latin America. Many people who work in textiles there are very wary of China's role. Is it a problem and how do we address it if it is?

A: We've just started analyzing so we can determine, based on the facts, if it's a problem and there is market disruption going on that would violate our agreements.

So we're going to follow the facts and let the process be driven by the facts.

This is one more reason why the Dominican Republic-Central American Free Trade Agreement is so important. We export raw materials to Central America and they, in turn, export to us finished goods in the whole apparel industry.

If that agreement is not passed, then there is a risk that we will lose that business to China. So CAFTA is important for many reasons. Economically, strategically, it's important for those areas. These are young, still-fragile democracies and they clearly need our help.

Three countries in Central America have already authorized the agreement and they're waiting for us, and a lot of countries are looking to us, to see how we deal with this.

(Editor's note: Several days after this interview, the Commerce Department said it will investigate whether the U.S. should re-impose limits on fast-growing clothing imports from China. Last week the U.S. textile and clothing industry asked the government to re-impose quotas on 14 categories of clothing to protect American manufacturers from Chinese imports.)

...more...

I think that selling goods at the wholesale level and having to buy them back at the retail level is a formula for disaster (jmho)

[UpInArms]

29. Microsoft takes $550M charge for settlement reserves

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38453.3719847222-834044467&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Microsoft (MSFT) said it take a $550 million charge to reserve for anti-trust claims. The software giant also said it would record a $123 million charge related to the settlement of anti-trust claims by Gateway Inc. (GTW) and a $41 million charge related to the settlement with Burst.com. Microsoft's stock, a component of the Dow industrials, closed Friday down 16 cents at $24.94 and Gateway was unchanged at $4.08.

8:48am 04/11/05 MICROSOFT TO TAKE $123M CHARGE FOR GATEWAY SETTLEMENT

8:48am 04/11/05 MICROSOFT TO TAKE $41M CHARGE FOR BURST.COM SETTLEMENT

8:49am 04/11/05 MICROSOFT TO TAKE $550M CHARGE FOR ANTITRUST RESERVES

[UpInArms]

49. Microsoft sees over $700M in charges

http://www.marketwatch.com/news/story.asp?guid=%7B29FFB20E%2D251D%2D4C27%2D9722%2DDD8BFDA4DF9C%7D&siteid=mktw

NEW YORK (MarketWatch) -- Microsoft Corp. on Monday said it would take pretax charges of more than $700 million related to legal settlements and reached an agreement with Gateway Inc. to settle a longstanding antitrust dispute.

Microsoft (MSFT: news, chart, profile) said it would take a charge of $550 million to add to its reserves for antitrust claims. The company also said it would book $164 million in further charges for its fiscal third-quarter that ended March 31 for the settlement with Gateway and a settlement with Burst.com Inc, a maker of video and audio display software.

Microsoft reaffirmed its previously announced earnings forecast for the coming quarter, "except for the charges related to these legal matters."

<snip>

The agreement settles Gateway's claims against Redmond, Wash. - based Microsoft which arose from the U.S. government's antitrust case against Microsoft in the mid-1990s. The judge in that matter, Thomas Penfield Jackson, specifically identified Gateway as having been impacted by Microsoft's business practices when he ruled against the software giant.

...more...

[UpInArms]

31. pre-opening blather

briefing.com

9:15AM: S&P futures vs fair value: +2.1. Nasdaq futures vs fair value: +5.5.

9:00AM: S&P futures vs fair value: +2.0. Nasdaq futures vs fair value: +5.5. Expectations for the cash market to open on an upbeat note remain intact, as futures indications hold steady above fair value... It appears the positive tone established last week, due in part to the lack of earnings warnings, has carried over into today's early market action and, in turn, been strengthened by upside earnings guidance from the likes of NCR, RRD and CNF

8:30AM: S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +4.0. Still shaping up to be a higher open for the indices, as investors look for a relief rebound in stocks following Friday's disappointing finish... Anticipation of a strong earnings season, with the exception of Circuit City's (CC) Q4 earnings miss earlier this morning, could perhaps also be providing an extra lift to equities in pre-market trading, as the majority of corporate news also remains rather upbeat

8:00AM: S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: +3.5. Futures market versus fair value suggesting a slightly higher open for the cash market amid falling oil prices... Crude oil futures have fallen below $53/bbl as OPEC ponders a possible 500K output increase... Meanwhile, investors are weighing Verizon's (VZ) 13% ($1.1 bln) stake in MCI Inc. (MCIP) against lowered FY05 earnings guidance from Ford (F)

ino.com

The June NASDAQ 100 was higher overnight as it consolidates above the 20-day moving average crossing at 1492.15. Multiple closes above the downtrend line crossing near 1516.52 are needed to confirm that a short-term low has been posted. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. The June NASDAQ 100 was up 4.00 pts. at 1497.50 as of 5:40 AM ET. Overnight action sets the stage for a steady to higher opening by the NASDAQ composite index later this morning.

The June S&P 500 index was higher overnight due to short covering as it consolidates above the 10-day moving average crossing at 1183.59. Multiple closes above last week's high crossing at 1195.70 are needed to confirm that a short-term low has been posted. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near- term. If June extends the rebound off March's low, the 50% retracement level of March's decline crossing at 1200.40 is the next upside target. The June S&P 500 Index was up 2.20 pts. at 1185.80 as of 5:43 AM ET. Overnight action sets the stage for a steady to higher opening when the day session begins later this morning.

[JNelson6563]

32. Right out of the gate, it's a happy day!

Thank Bob our worries are over! 2 minutes in and things are just ducky!

Dow 10,472.57 +11.23 (+0.11%)
Nasdaq 2,005.80 +6.45 (+0.32%)
S&P 500 1,183.17 +1.97 (+0.17%)
10-Yr Bond 4.479% -0.01

Good luck at the casino today Marketeers! :hi:

Julie

[UpInArms]

33. Hi Julie!

Great to have you here :hi:

How's the revolution going?

[JNelson6563]

34. Hi UIA!!

The revolution is chugging along. Takes a lot of time but we're getting there.

Thanks for the howdy! I miss hangin' out with you all. Great to stop in and read up on happenings.

Cheers-
Julie

[UpInArms]

36. We miss your astute observations

and wit -

Hope you can spend more time with us soon :loveya:

[UpInArms]

35. 9:56 EST numbers and blather

Dow 10,464.82 +3.48 (+0.03%)
Nasdaq 2,001.04 +1.69 (+0.08%)
S&P 500 1,182.01 +0.81 (+0.07%)
10-Yr Bond 4.482 -0.09 (-0.20%)

NYSE Volume 165,641,000
Nasdaq Volume 174,035,000

9:40AM: Stocks open to the upside, as falling oil prices - in the absence of Monday M&A news and no economic releases to digest - take center stage in dictating early market action... Crude oil futures have fallen for the sixth consecutive session to $52.73/bbl (-$0.59) amid news that OPEC may again raise its official production level by 500K barrels to help meet growing summer demand... The aversion of a possible oil strike in Nigeria has also added some pressure to the commodity in the early going...

[UpInArms]

38. 10:16 EST numbers and blather

Dow 10,456.91 -4.43 (-0.04%)
Nasdaq 1,996.11 -3.24 (-0.16%)
S&P 500 1,180.50 -0.70 (-0.06%)
10-Yr Bond 4.475 -0.16 (-0.36%)

NYSE Volume 264,979,000
Nasdaq Volume 264,380,000

10:00 Equities struggle to maintain modest gains but the bulk of sector leadership remains slightly positive... Health Care (+0.3%) has been the best performing economic sector, due in part to strength in Drug (+0.5%) and Biotech (+1.2%), while Financial, Utility and Industrials have also traded higher... Technology has been mixed, with gains in Software and Networking offsetting weakness in Semiconductor and Disk Drive... Energy (-0.2%) has been weak, amid falling oil prices, while selling interest in Steel and Paper have weakened the Materials (-0.2%) sector... ..NYSE Adv/Dec 1379/1120. ..NASDAQ Adv/Dec 1191/1233.

[UpInArms]

44. 10:46 EST numbers and blather

Dow 10,452.34 -9.00 (-0.09%)
Nasdaq 1,994.63 -4.72 (-0.24%)
S&P 500 1,180.59 -0.61 (-0.05%)
10-Yr Bond 4.460 -0.31 (-0.69%)

NYSE Volume 404,607,000
Nasdaq Volume 399,021,000

10:30AM: Major indices slip below the flat line, as the lack of early conviction on the part of buyers makes way for renewed selling interest... While oil prices remain under pressure and modest buying interest in bonds has pushed yields slightly lower, it appears the rising significance of corporate earnings is taking precedence over inflationary pressures and interest rates... Arguably weighing on early sentiment has been lowered guidance from Ford (F 10.35 -0.68), which slashed its FY05 EPS outlook by about $900 mln, or 29%, and said it will not achieve an ambitious FY06 goal of earning $7 bln...

Also under pressure has been rival General Motors (GM 28.88 -0.62), which issued an even more bearish earnings warning last month...NYSE Adv/Dec 1181/1648, Nasdaq Adv/Dec 1007/1593

[54anickel]

39. The Fed’s Dilemma

Last entry on the Credit Bubble Bulletin page

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

I believe the coming weeks in the markets – and perhaps next week in particular – will be decisive. I sense a lot of “hoping” by market participants. And markets are not typically accommodative to those clinging to hopes and prayers. There is hope that a slowing U.S. and global economy will stem escalating global inflationary pressures and bail out the highly leveraged and speculative U.S. bond market. There is hope that the darkening clouds of financial scandal and systemic fragility will spook the Fed, state attorneys general, OFHEO, the regulatory community and Congress into forbearance and passivism. There’s also a lot of hope that U.S. equities will be able to muster the much anticipated rally. There is similarly much hope that the recent shallow decline in yields is not the best the bond bear has to offer. There is, as well, hope that the dollar has stabilized.



All the complacency and hopefulness has left curiously little room for fear. I’ve always appreciated the old adage, “You know you’re in a bear market when people are losing money but feeling pretty good about it.” It seems especially pertinent today in various markets. After all, acute market vulnerability manifests most forcefully from an environment where the fanatical crowd has begun to part with its money yet clutches to the notion that fundamentals are sound and the worst has passed. And when the crowd is highly leveraged with bets in myriad markets – as it is to unparalleled extremes these days - it is appropriate to think in terms of systemic fragility and instability. Sensing a high degree of concerted hoping in various markets leads me to believe that the next bout of selling may prove decisive. If a series of (seemingly vulnerable) bets falter simultaneously – say, rates rise, stocks drop, the currencies and commodities break big one way or the other, and spreads widen – the big loser would be systemic liquidity.



I am not comforted by the general perception of the underlying soundness of the U.S. economy and financial system, while the markets’ complacency with regard to the scandal unfolding throughout the U.S. financial sector is rather amazing. Yesterday’s discussion between CNBC’s Ron Insana and the astute Jim Chanos regarding the similarities of AIG to Enron should have been good enough for a few hundred points down on the Dow – at least.



Taking a step back for a moment and contemplating the financial world, one is left with a sense that “contemporary finance,” as we have come to know it, has commenced a radical shakeout. The scope of the problem is staggering. There is Fannie and Freddie, with their combined books of business of $3.8 Trillion backed (hopefully) by a little sliver of shareholder’s equity. Troubled GM and Ford have total liabilities of $740 billion, with equity stated at $45 billion and absolutely dismal prospects. AIG has total liabilities of almost $700 billion (SH Equity of $83bn). Combined, these five companies’ exposure of almost $5.3 Trillion is in the neighborhood of 30 times reported equity. In the best of times, there was no room for error or chicanery. These may be the worst. And one does not want to forget MBIA. This troubled risk guarantor has written insurance – “Net Debt Service Outstanding” - to the tune of $890 billion, with shareholder’s equity of $6.6 billion. To witness such a massive and pervasive Credit system problem at this pinnacle stage of system excess and asset inflation portends a devastating down cycle.

more...

[UpInArms]

41. Reminds me of that old saying:

Wish in one hand and spit in the other and see which one gets full first

[54anickel]

46. The Drumbeat of Protectionism (Roach)

http://www.morganstanley.com/GEFdata/digests/20050408-fri.html#anchor0

It was inevitable. With America beset by record trade- and current-account deficits, the drumbeat of protectionism is getting louder and louder in Washington. Not surprisingly, the assault is taking dead aim on China -- by far the biggest bilateral piece of a US trade gap that hit $617 billion in 2004. Is this just political saber-rattling, or a threat to be taken seriously?

The US Senate is leading the charge. In a broad-based show of bi-partisan support, on 6 April the Senate tacitly endorsed the so-called China Currency Bill (S. 295), introduced by Charles Schumer (liberal Democrat from New York) and Lindsey Graham (conservative Republican from South Carolina); this law would levy 27.5% tariffs on all Chinese products sold in the US. Schumer and Graham are as far apart on the US ideological spectrum as you could imagine. Yet they have come together, united in their conviction that blame for the US trade gap should be pinned on China. Their bill is effectively a renminbi “undervaluation tax”; if the Chinese currency is not revalued by 27.5% within 180 days of the enactment of S. 295, across-the-board tariffs of a like amount would then be imposed on Chinese imports. The bill was “attached” as an amendment to the Foreign Affairs Authorization Act (S. 600) -- the umbrella legislative authority for America’s $34 billion foreign aid program. The pro-free trade Senate leadership attempted to have the amendment struck down, but was defeated by an overwhelming margin of 67-33.

I have said from the start that the odds of passage for such legislation are low. Those odds are now increasing. In large part, that’s because of the shifting context of America’s trade dilemma -- an exploding overall deficit and an increasingly visible role played by China, which accounted for 26% of the total US trade gap in 2004. Washington has had a number of long-simmering concerns with respect to Chinese trade -- especially over furniture, semiconductors, and intellectual property rights. But the recent surge of Chinese textile imports into the US could well be the proverbial straw that breaks this camel’s back; following the expiration of the global Multi-Fiber Agreement at the end of 2004, Chinese textile exports into the US have surged some 63% from year-earlier levels in the first three months of 2005. Little wonder that anti-China sentiment in the Senate has risen to a boil.

The good news is that Senator Schumer has just agreed to withdraw his amendment from the omnibus foreign aid bill. The quid pro quo, however, is the promise of full-blown Senate Finance Committee hearings on the Chinese currency issue and the guarantee of a vote on S. 295 before the end of this summer. Meanwhile, similar bi-partisan legislation was also just introduced in the US House of Representatives by Reps. Duncan Hunter (R-CA) and Tim Ryan (D-OH). The real message in all this is not that tariffs on Chinese imports are coming. I still believe that is a very remote possibility. But the die is now cast for an open and acrimonious debate on US-China trade relationships over the next several months. And if the overwhelmingly negative anti-China sentiment expressed in the procedural vote on April 6 in the US Senate is any indication of what lies ahead, the politicians won’t stop until they exert some type of concession from China. If that fails to occur, then the low-probability tariff option would the have to be taken far more seriously.

I am concerned, but not surprised, by this unfortunate turn of events. The Senate’s strong expression of anti-China sentiment is, in fact, quite consistent with the intelligence I picked up in Washington a few weeks ago when the political pros told me that this year was shaping up to be the most intense year of US-China trade bashing in a decade (see my 11 March dispatch, “The Paradox of Stability”). While the actions are predictable, that doesn’t make them right. The macro I practice suggests that the scapegoating of China is a huge mistake.

more...

[UpInArms]

52. Treasurys aided by Ford's bad news

http://www.marketwatch.com/news/story.asp?guid=%7BDF1A37A9%2D5423%2D40E1%2D9675%2D04DCACC9263B%7D&siteid=mktw

NEW YORK (MarketWatch) - Long-term Treasurys outperformed bill and notes in late Monday morning trade, benefiting from safe-haven interest as some funds lightened their corporate bond holdings in the wake of negative news from Ford Motor Co.

In recent trades the higher prices pushed the yield on the 10-year bond down to 4.46% from 4.49% late Friday. The 30-year bond was sporting a yield of 4.74% while the two-year note was under slight pressure, pushing its yield up to 3.75%.

Liquidations of corporate bonds freed up cash for funds managers to buy 10-year and 30-year Treasuries, according to Action Economics economist Kim Rupert.

<snip>

The market in recent weeks has been very nervous about inflation, which eats away at the value of fixed-income instruments. In addition the February trade gap numbers, due for release on Tuesday, also are likely to hurt Treasurys, Rupert said.

According to a MarketWatch survey of economists, the trade gap will widen to $58.4 billion from $58.3 billion in January. That would be the second worst deficit ever. Some economists are forecasting the first $60 billion deficit.

...more...

[54anickel]

53. Profits or Pipe dreams?

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=42117

snip>

Comparing the final three months of last year with the like period in 2003, we can see that business, in general, seems to have done rather well.

Combined sales for manufacturers, miners, wholesalers, and retailers rose 16.6% - or $320 billion - boosting operating profits an impressive-looking 31.5% - equivalent to nearly $30 billion extra for options grantees, shareholders (and the state) to share among themselves.

However, we do have to ask just how much extra wealth this represents and how much is merely the result of extra money chasing much the same physical quantity of goods (inflation, in other words).

One rather revealing clue is that for every $4.50 in extra sales recorded, as much as $1 was rung up by just two sectors - “petroleum & coal” and “primary metals”. Moreover, if we assume a good part of this added to wholesalers' sales and then boosted retailer's receipts, in turn, the proportion attributable to these two activities rises even further.

Yet more striking, these two sectors accounted for more than $1 in every $2 of all the extra profits earned!

more...

[54anickel]

54. An Economy On Thin Ice (Paul Volcker)

http://www.washingtonpost.com/ac2/wp-dyn/A38725-2005Apr8?language=printer

snip>

The difficulty is that this seemingly comfortable pattern can't go on indefinitely. I don't know of any country that has managed to consume and invest 6 percent more than it produces for long. The United States is absorbing about 80 percent of the net flow of international capital. And at some point, both central banks and private institutions will have their fill of dollars.

I don't know whether change will come with a bang or a whimper, whether sooner or later. But as things stand, it is more likely than not that it will be financial crises rather than policy foresight that will force the change.

It's not that it is so difficult intellectually to set out a scenario for a "soft landing" and sustained growth. There is a wide area of agreement among establishment economists about a textbook pretty picture: China and other continental Asian economies should permit and encourage a substantial exchange rate appreciation against the dollar. Japan and Europe should work promptly and aggressively toward domestic stimulus and deal more effectively and speedily with structural obstacles to growth. And the United States, by some combination of measures, should forcibly increase its rate of internal saving, thereby reducing its import demand.

But can we, with any degree of confidence today, look forward to any one of these policies being put in place any time soon, much less a combination of all?

The answer is no. So I think we are skating on increasingly thin ice. On the present trajectory, the deficits and imbalances will increase. At some point, the sense of confidence in capital markets that today so benignly supports the flow of funds to the United States and the growing world economy could fade. Then some event, or combination of events, could come along to disturb markets, with damaging volatility in both exchange markets and interest rates. We had a taste of that in the stagflation of the 1970s -- a volatile and depressed dollar, inflationary pressures, a sudden increase in interest rates and a couple of big recessions.

more...

[UpInArms]

57. might get a real glimmer of info this week

what with the Trade (Im)Balance numbers and the capital inflows reports.

[54anickel]

63. Watch for special appearances of "Chopper" Ben & Greenspin with

those reports this week. Especially with the markets balancing so precariously on the pinnacles of their techical numbers.

One thing that might lend a bit of support to the markets this week would be a larger than normal in-flow of late IRA contributions for 2004. Get 'em every year, always seems to be such perfect timing - 2 weeks after the end of the 1st quarter. :eyes: Gotta admit, St. Ronnie and company put some fore-thought into that set-up. Then again, maybe it was just dumb luck.

[UpInArms]

55. 11:45 EST numbers and blather (red paint drying)

Dow 10,450.72 -10.62 (-0.10%)
Nasdaq 1,994.34 -5.01 (-0.25%)
S&P 500 1,180.25 -0.95 (-0.08%)
10-Yr Bond 4.448 -0.43 (-0.96%)

NYSE Volume 610,034,000
Nasdaq Volume 579,359,000

11:30AM: Little changed since the last update, as market internals still suggest a bearish bias... Decliners on the NYSE hold an 18 to 11 advantage over advancers while declining issues on the Nasdaq outpace advancing issues by a 17 to 9 margin... The ratio of down to up volumes also reflects a similarly negative tone to trading on both the Big Board and the Composite... The Dow, S&P and Nasdaq, however, continue to find modest support near key technical levels of 10435, 1178 and 1993, respectively, as total volume remains lighter than usual until reporting trends become more clear...NYSE Adv/Dec 1117/1886, Nasdaq Adv/Dec 997/1779

[54anickel]

59. GACK!!!! Bernanke Favorite for Greenspan Successor

http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=749&e=6&u=/nm/20050410/bs_nm/politics_greenspan_dc

WASHINGTON (Reuters) - Federal Reserve Governor Ben Bernanke has the edge in the latest betting over who will succeed Alan Greenspan as Federal Reserve chief, but sources close to the Bush administration say it is still early in the decision process.

President Bush's decision earlier this month to nominate Bernanke to head the White House Council of Economic Advisers prompted speculation that the top White House economics job may be an audition for Greenspan's post.

"Bernanke is a strong Washington player with good insights," said William Beach, a scholar at the Heritage Foundation, a conservative think tank in Washington. "He's a nose ahead on this."

Scott Reed, a Republican political consultant, called Bernanke "the favorite of the month."

snip>

WALL STREET'S RESPECT A FACTOR

snip>

"Bush is going to want to appoint someone who can sit down with him and speak in a language he understands," Beach said. BWAHAHAHA! :evilgrin:

[UpInArms]

61. gack indeed!!!

"Printing Press" Ben should definitely not be "underestimated".

:hide:

[54anickel]

86. Here's Ben on the savings rate - what an a$$

http://www.economist.com/finance/displayStory.cfm?story_id=3839554

These shifts raise important questions. Are people saving too little? What are the consequences of falling saving rates? Should governments try to encourage people to save more, and if so, how?

One school of thought, led by Ben Bernanke, a prominent American central banker, suggests that the world suffers from too much rather than too little saving. Mr Bernanke, who was nominated to be head of George Bush's Council of Economic Advisers on April 1st, points out that long-term interest rates are extremely low across the globe. He attributes this, in large part, to high saving by Asian economies. If this “savings glut” argument is correct, then presumably there is little need to worry about falling thrift in the rich world.

Others argue that declining thrift is a sign of economic vigour. Thanks to high returns from shares and, more recently, from house prices, people can achieve their financial goals with less discretionary saving. The sophistication of financial markets in Anglo-Saxon economies allows people to tap their wealth more easily, by refinancing their mortgages, for example. For people who live in bank-dominated systems, such as Germany, that is much harder. Higher saving rates in Germany, according to this logic, are the result of poor returns and underdeveloped financial markets.

more...

[UpInArms]

62. 12:05 EST numbers and blather

Dow 10,456.91 -4.43 (-0.04%)
Nasdaq 1,997.36 -1.99 (-0.10%)
S&P 500 1,181.05 -0.15 (-0.01%)
10-Yr Bond 4.444 -0.47 (-1.05%)

NYSE Volume 666,289,000
Nasdaq Volume 623,402,000

12:00PM: Market still under modest pressure midday as Ford's warning outweighs falling oil prices and lower bond yields... With earnings season now underway and the market's attention momentarily being diverted from inflation and interest rates, not even the sixth straight day of lower oil and yields on the 10-year note as low as 4.43% have been able to mute the negativity surrounding downside guidance from Ford (F 10.41 -0.62)...

The automaker has cast a sense of nervousness over the entire market after its slashed its FY05 EPS outlook by about $900 mln and renounced its previously ambitious FY06 goal of earning $7 bln... Crude oil futures have fallen 1.2% to $52.70/bbl (-$0.62), amid news that OPEC may again raise daily output quotas by 500K barrels to help meet summer demand, as Treasurys have continued to climb, amid safe-haven rotation out of less attractive corporate bonds and expectations that tomorrow's FOMC minutes will remain on an inflation cautionary note... Meanwhile, the Materials (-0.6%) sector, failing to benefit from weakness in the dollar, has paced the way to the downside, amid selling pressure in Steel and Paper...

Energy has also traded lower, in sympathy with declining oil prices, while Consumer Discretionary and Telecom Services have also been under pressure... Technology has also been weak across the board while not even upside Q1 guidance from CNF (CNF 42.90 +0.88) has been enough to lift Transportation... Utility, however, has attracted buyers in seek of dividends while Health Care has found strength in the Drug and Biotech groups... Meanwhile, the only notable earnings report today has come from Circuit City (CC 15.55 +0.14), which missed Reuters' Q4 (Feb) estimates by $0.04 and issued in-line FY06 revenue guidance...

[UpInArms]

64. Tuning out Greenspan

Bond investors aren't as worried about oil prices as the Fed is. Are they right...or in denial?

http://money.cnn.com/2005/04/11/news/economy/fed_bonds/?cnn=yes

NEW YORK (CNN/Money) - Federal Reserve chairman Alan Greenspan called it a "conundrum." Chicago Fed president Michael Moskow deemed it a "puzzle."

So it probably won't be long before another Fed member trots out the Winston Churchill quote about Russia and says that relatively low long-term rates are "a riddle wrapped in a mystery inside of an enigma."

The yield on the 10-year Treasury now stands at 4.46 percent. And even though that's significantly higher than two months ago, when the yield was briefly below 4 percent, long-term rates are still lower than where they were before the Fed started raising interest rates last year.

<snip>

Bond market to Fed: Wake us when the job market improves

Simply put, fixed-income investors don't appear to be buying the Fed's concerns about inflation heating up. Sure, oil prices are near record highs and the prices of other commodities such as copper and cement have also surged. But some say what's missing from the equation is the classic telltale sign of inflation: increased wages and a strong job market.

After a better-than-expected employment report for February, the number of new jobs added in March was much lower than economists had anticipated.

"The bond market is far less sanguine about the economy than the Fed is. They are essentially saying we don't see that much strength," said Barry Ritholtz, chief market strategist with Maxim Group.

...more...

[54anickel]

65. Economics Often a Bundle of Contradictions

http://biz.yahoo.com/ap/050410/economic_contradictions.html?.v=2

WASHINGTON (AP) -- Buying binges by consumers and companies can power the economy yet catapult the trade deficit. A weaker dollar can help U.S. manufacturers but hurt American shoppers. Rising home prices can give a homeowner a sense of wealth and make a house hunter feel cash-strapped. These are just a few of the apparent contradictions of economics.

How an economic development is perceived depends on who is making the assessment -- a consumer, businessman, investor or politician, for example -- and how the economy is treating him.

snip>

While economists want Americans to save more, they say the savings rate is not as bad as it seems.

The rate fails to paint an accurate picture of household finances, analysts say, because it does not capture gains from such things as higher real-estate values or financial investments.

"The low savings rate of consumers in the United States makes it sound like we are out partying all night and we have a midterm in the morning," said Erik Hurst, associate professor of economics at the University of Chicago's Graduate School of Business. But that is not necessarily the case, he said.

A better barometer is household wealth, according to Hurst and other economists. U.S. households saw their net worth last year rise to a record $48.53 trillion. Higher home values have helped propel this rise, which in turn has supported consumer spending.

:spray:

more...

[54anickel]

68. U.S. Stocks' 2 1/2-Year Rally May Soon End, Chart Watchers Say

http://www.bloomberg.com/apps/news?pid=10000103&sid=a43.6ONXw_uQ&refer=us

April 11 (Bloomberg) -- Signs are building that the bull market in U.S. stocks since October 2002 will end this year, according to analysts who rely on price charts and trading trends to make buying and selling decisions.

The number of shares reaching 52-week highs is diminishing as companies such as Intel Corp., the world's biggest chipmaker, slide as much as 20 percent from their rally peaks. The Nasdaq Composite Index is close to falling below its average for the last 200 days. The Dow Jones Industrial Average is due for a loss of 15 percent, based on moves during the past century.

``We are looking for one last piece of news that leads to panic selling, so it shakes out those who are worried,'' says Paul Desmond, president of Lowry's Reports Inc., a newsletter publisher in Palm Beach, Florida.

The catalyst may arrive as early as this week, when about 40 companies in the Standard & Poor's 500 Index will report first- quarter earnings. General Electric Co., the world's second- largest company by market value, Citigroup Inc., the world's biggest financial-services company, and Apple Computer, the maker of iPod digital-music players, are among them.

While stocks have slipped this year amid higher interest rates and record crude-oil prices, the S&P 500 has moved within a 5 percent range. On March 7, the benchmark reached a high for the year at 1225.31, up 58 percent from its October 2002 low. The index then retreated to within two points of the year's lowest level on March 29.

more...

[UpInArms]

69. Hedge funds and Midwestern Home oversupply

http://www.marketwatch.com/news/story.asp?guid=%7BECA89225%2DC532%2D4B2A%2DBCB8%2D1624905CF642%7D&siteid=mktw

When most folks think of hedge funds, they think of them as in "hedging your bets;" that is, a fund that takes short positions in stocks or otherwise takes contrarian stances designed to earn returns in any kind of market. And they think of them as vehicles for the wealthy only.

But hedge funds today are not what they were a decade ago. The industry is now about 25 times bigger than in 1990. And hedge funds are into all kinds of investing strategies these days, from arbitrage to venture capital. Plus, they aren't necessarily for the wealthy alone anymore; many investors of only modest means now have access.

In the first of a series of stories, reporter Alistair Barr details the changing landscape of the hedge-fund business. Read his Special Report, plus learn from Paul B. Farrell why dividend reinvestment programs are a fantastic way to build wealth and see why some Midwest markets are seeing a build-up in unsold new homes, on Monday's Personal Finance pages.

...more...

Unsold New Homes
Pile Up in Some Areas

http://www.realestatejournal.com/buysell/regionalnews/20050411-dunham.html?rejpartner=mktw

The housing market may be red-hot in most places, but newly constructed homes are beginning to pile up in some Midwestern and Southern cities, forcing builders to offer incentives to lure prospective buyers.

Much of the current weakness is in the market for moderately priced or entry-level homes. So far, sales are slowing mainly in areas where population and job growth have been relatively weak, such as Ohio, which has lost more jobs than any other state since 2000. Other lackluster markets include Michigan, Indiana and Kentucky. The Midwest economies have been hurt by problems in manufacturing, partly tied to the automobile industry.

Nationwide, home sales remain red-hot, and few economists expect the problems in the Midwest to spill over to the rest of the country -- at least not anytime soon. With the national job picture relatively healthy, real-estate experts expect sales to remain brisk overall.

Still, oversupply is hitting some markets with a robust employment picture. Charlotte, N.C., for instance, currently has a job growth rate of 3.5% -- higher than the national average. But so many builders moved into the Charlotte market hoping to capitalize on the expanding economy that competition for buyers has become fierce.

The recent softness has forced builders to offer an array of incentives to attract new buyers, ranging from small perks, such as swanky blinds, to ones valued at thousands of dollars. Developers are offering to pay closing costs, upgrade kitchens at no charge, subsidizing down payments, landscape the property or install air conditioning, or offer additional parking spaces in smaller subdivisions.

...more...

[54anickel]

85. Hedge-fund industry morphs, Flood of money sparks quest for new markets,

strategies.

http://www.marketwatch.com/news/story.asp?guid=%7BC5414405%2D479D%2D4735%2D87CB%2D260CB455E705%7D&siteid=mktw&dist=

SAN FRANCISCO (MarketWatch) -- The hedge-fund industry is in what many people would consider an enviable position: There's so much new money around that managers are wondering what to do with it all.

In 1990 these private investment partnerships oversaw less than $40 billion. By the end of last year, though, assets had surged to almost $1 trillion, according to Chicago-based research and data firm Hedge Fund Research Inc.

This has not been quite the boon it would first appear to be.

The weight of new money has dented the returns of some of the industry's traditional strategies in recent years. Strategies based on arbitrage -- the ironing out of price anomalies between related securities -- have suffered as more money and new managers chase a finite number of investment ideas, squeezing spreads.

snip>

So is the hedge-fund industry losing its edge as it grows?

No, say some experts. Instead, many managers are branching into new markets and strategies in search of bigger returns. Rather than facing a crisis, the industry is going through another period of evolution as it adjusts to new realities.

"This is an evolutionary process that's accentuated by several factors, one of which is the huge inflow of money into hedge funds," Charles Gradante, managing principal of Hennessee, said.

more...

:eyes: Oh great, another "new economy"

[UpInArms]

70. Michelin to invest $200 mln in Brazil tire plant (Yeah! Investing in Braz

see how well those tax incentives work for investment!

http://www.marketwatch.com/news/story.asp?guid=%7B18223176%2DCE47%2D4BBF%2DA108%2DCFD8D58E507E%7D

SAO PAULO (MarketWatch) -- French tire maker Compagnie Generale des Etablissements Michelin (12126.FR) will invest $200 million to expand production at one of its plants in Brazil, a spokesperson for the Rio de Janeiro city mayor said Monday, confirming local press reports.

Earlier, Rio city mayor Cesar Maia had told local press the investment would double production at Michelin's Campo Grande plant in the municipality of Rio de Janeiro to 50,000 tons per year, primarily in tires, to supply local and overseas markets.

A spokesman for Michelin couldn't confirm the investment when contacted Monday.

In December 2004, rival tire firm Bridgestone Corp (5108.TO) said it would spend about $160 million to build a new factory in Brazil, producing tires for passenger cars and light trucks.

At the time, Bridgestone said it wanted a bigger piece of the tire business as South America's vehicle market grows.

...more...

[UpInArms]

71. 1:04 EST numbers and blather

Dow 10,471.54 +10.20 (+0.10%)
Nasdaq 1,998.77 -0.58 (-0.03%)
S&P 500 1,182.89 +1.69 (+0.14%)
10-Yr Bond 4.440 -0.51 (-1.14%)

NYSE Volume 819,739,000
Nasdaq Volume 755,226,000

1:00PM: More of the same as the major indices still trade in split fashion... Meanwhile, Biotech has been in focus today ahead of Genentech's earnings... Shares of Human Genome Sciences (HGSI 11.35 +0.69) have surged after Lehman Brothers upgraded the stock citing positive rheumatoid arthritis results from a recent study... Sepracor (SEPR 58.12 +0.31) has also climbed, benefiting from a setback in rival Sanofi-Aventis (SNY 43.18 -0.27), which was asked by the FDA to provide more information about its extended-release Ambien CR drug...

Genentech (DNA 57.27 -0.39), however, which is expected to report Q1 earnings of $0.25 after the bell tonight, has been the only AMEX Biotechnology Index component under pressureNYSE Adv/Dec 1386/1746, Nasdaq Adv/Dec 1187/1733

12:30PM: Blue chip indices inch into positive territory, but not showing strong enough conviction for a rally... On the Dow, shares of Procter & Gamble (PG 55.46 +0.96) have surged after it increased its quarterly dividend 12% to $0.28 from $0.25 while Korean Air Lines' $1.3 bln order for up to 20 787 Dreamliners has provided a lift to Boeing (BA 59.45 +0.85)...

General Motors (GM 28.86), however, has fallen in sympathy with Ford's downside guidance while IBM (IBM 86.55 -1.05) has been under pressure amid analyst comments citing a possible revenue miss in its upcoming quarterly report, which will is scheduled to hit the wires one week from today...NYSE Adv/Dec 1279/1823, Nasdaq Adv/Dec 1114/1776

[UpInArms]

72. Edison Intl CEO 2004 total compensation $7.8 mln, less options

http://www.marketwatch.com/news/story.asp?guid=%7B0493932F%2D85FE%2D42A2%2D8034%2D6780239EA7F8%7D

WASHINGTON (MarketWatch) -- Edison International (EIX) said Monday that Chairman, President and Chief Executive John E. Bryson received salary, bonus and other benefits for 2004, excluding the grant of stock options, of $7.8 million, compared with $6.61 million in 2003.

The California-based energy holding company also granted Bryson 387,538 stock options with an exercise price of $21.88 a share, according to a proxy filed with the Securities and Exchange Commission. The options set to expire on Jan. 2, 2014, are valued at $2.55 million by the company. In 2003, Edison International granted Bryson 330,124 stock options.

Bryson's 2004 compensation included a $1.95 million bonus, up from $1.7 million in 2003, and a $1.12 million salary, compared with $1.07 million the year before.

Bryson also received long-term incentive plan payouts totaling $4.23 million for 2004, which is up from $3.1 million in 2003.

In addition, Bryson received $6,373 in other annual compensation for 2004, compared with $5,491 for 2003, and $498,985 as all other compensation, which is down from $736,524 in 2003.

According to the filing, Bryson also realized about $3.43 million in 2004 from the exercise of stock options to purchase 172,200 common shares.

...more...

[UpInArms]

77. Xerox CEO's 2004 total pay $8.2 mln before options

http://www.marketwatch.com/news/story.asp?guid=%7B867F8EDF%2DA2B5%2D4344%2D9461%2DDE78B12D6E3D%7D

WASHINGTON (MarketWatch) -- Xerox Corp. (XRX) Chief Executive Anne Mulcahy received total compensation of $8.2 million, excluding stock options, in 2004, according to the company's proxy statement filed with the Securities and Exchange Commission Monday.

The largest component of Mulcahy's pay was a restricted stock grant valued at $5 million. The previous year, she was granted restricted stock valued at $2 million.

As reported, Mulcahy's 2004 salary increased to $1.3 million from about $1.1 million in 2003. Her bonus declined to $1.58 million from $1.75 million the previous year.

According to the proxy, Mulcahy received 609,000 stock options in 2004 with an exercise price of about $13.69 each. In 2003, she received 934,600 stock options. Xerox shares closed Friday at $14.94.

All other compensation for the chief executive, including use of corporate aircraft, totaled $196,408 in 2004, the proxy said.

...more...

[UpInArms]

90. Wynn Resorts CEO's 2004 bonus $2.74 mln

http://www.marketwatch.com/news/story.asp?guid=%7BB03BA73F%2D0CD7%2D49C1%2DB1AC%2D64F695AE5A46%7D

WASHINGTON (MarketWatch) -- Wynn Resorts Ltd. (WYNN) said Monday that Chief Executive Stephen A. Wynn received a $2.74 million bonus for 2004.

Including the bonus, a $1.83 million salary and other benefits, Wynn's 2004 compensation, according to a proxy filed with the Securities and Exchange Commission, totaled about $4.8 million, which was up from $1.45 million in 2003, when Wynn didn't get a bonus and his salary was $500,000 lower.

At Wynn Resorts' annual shareholders meeting May 2 at the Wynn Las Vegas Resort and Casino, shareholders will vote on a proposal that would raise the maximum annual bonus payable under the company's incentive plan to any executive officer to $7.5 million from $2.5 million.

Wynn also received $215,283 as other annual compensation for 2004, which included $68,750 in compensation and benefits of a driver employed for Wynn's business and personal use, $83,222 for Wynn's personal use of the company's corporate aircraft, as well as $63,311 toward a vehicle provided by Wynn Resorts for Wynn's use.

...more...

[54anickel]

74. Don't rock the boat

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=42118

snip>

Setting the stage for this analysis: Creditors don’t want to see their assets lost through debtor default. Therefore, it’s not uncommon that a creditor will work with a distressed debtor. I postulate that to this end, Japan and the US have had a meeting of minds.

Under such circumstances, areas for negotiation between a creditor nation and a debtor nation could include: increasing the difference between paper currency valuations; adjusting interest rate differentials; and changing the repayment terms. Presently, the following changes are identifiable.

- Recent moves in the yen to dollar relationship could extend the life of arbitrage as practiced by the nation-states of the US and Japan, for it is the dominant factor holding the global economy together.

- It’s probable that the Federal Reserve Bank has been raising overnight lending rates not to tame inflation, but to put the profitability back in the USD/JPY arbitrage equation.

- Without question, the US has been emphasizing the issuance of short-term and variable rate Treasury debt over long-dated fixed-rate paper. This is a sign of potentially deteriorating credit quality.

In the short term, I envision an induced downturn by design. The US economy will slow, stocks will rise for distribution only to decline, layoffs will occur, demand for oil will wane, and domestic bondholders will be squeezed. In other words, the US will swallow a large dose of Japanese deflation.

The balance sheets of the US government (as borrower-spender) and the Japanese government (as lender-saver) must be protected. The only way to do this will be to extend more credit. Conditions are being set to enable this to happen. The negotiating areas I mentioned above are in play.

more...

[UpInArms]

76. this paragraph

In the short term, I envision an induced downturn by design. The US economy will slow, stocks will rise for distribution only to decline, layoffs will occur, demand for oil will wane, and domestic bondholders will be squeezed. In other words, the US will swallow a large dose of Japanese deflation.

the words: "I envision"????

open your eyes, freak and you don't have to "envision", you will see :rant:

[54anickel]

82. Well, turn around is fair play. Didn't we "export" our inflation to Asia

all those years (since Greenspin came into office)? Seems we've been playing "hot potato" over the pond for a long time now. Someone's bound to get burned. B-)

[54anickel]

79. Japan's February Current Account Surplus Widens 10%

http://www.bloomberg.com/apps/news?pid=10000101&sid=aDE73AKPx88c&refer=japan

snip>

A widening surplus may help Japan's economy, the world's second-largest, sustain a recovery from its fourth recession since 1991 as exports slow. Income from U.S. fixed-income investments may rise further as the Federal Reserve raises interest rates.

``Overseas income from investments has kept the surplus at a high level,'' said Azusa Kato of BNP Paribas Securities Japan Ltd., one of three economists who forecast a larger surplus. Investment income ``will probably stay high.''

The yen pared losses after the report. Japan's currency traded at 108.32 to the dollar at 3:36 p.m. in Tokyo from as low as 108.52. The yen was at 108.23 on April 8 in New York.

Income from overseas investments rose 6.3 percent in February from the previous month to 901.7 billion yen. Japanese investors owned $701.6 billion of U.S. Treasury notes in January, according to Bloomberg data.

Federal Reserve policy makers raised the benchmark interest rate a quarter-point to 2.75 percent on March 22, the seventh increase in as many meetings. Since then the dollar has climbed 2.6 percent against Japan's currency, boosting the yen value of returns on U.S. investments.

more...

[UpInArms]

83. 2:09 EST numbers and blather (still red)

Dow 10,452.40 -8.94 (-0.09%)
Nasdaq 1,993.87 -5.48 (-0.27%)
S&P 500 1,180.77 -0.43 (-0.04%)
10-Yr Bond 4.442 -0.49 (-1.09%)

NYSE Volume 1,001,890,000
Nasdaq Volume 908,557,000

2:00PM: Major indices still mired in relatively tight trading ranges, showing little reaction to a spike in oil prices to session highs... Crude oil futures ($53.55/bbl +$0.23) have recently turned positive, perhaps due to some short-covering, as the commodity has declined more than 9.0% from an all-time high over $58/bbl reached one week ago... However, while higher crude oil prices have held the market hostage for quite some time, action in oil prices in either direction have had little impact on equities today...NYSE Adv/Dec 1441/1746, Nasdaq Adv/Dec 1204/1769

1:30PM: Equities continue to fluctuate in lackluster fashion, as the indices still trade with a tinge of caution... Treasurys, however, have recently touched their highs of the session despite a lack of economic data to move the market in either direction... Bolstered buying interest in bonds today has primarily been spurred by diminishing demand for corporate bond issues amid Ford's disappointing FY05 outlook...

Ford's credit rating outlook has subsequently been cut to Negative from Stable at S&P while Deutsche Bank has lowered its rating on Ford bonds to Sell from Hold, prompting investors to seek safety in Treasurys... The 10-year note is up 10 ticks to yield 4.42%...NYSE Adv/Dec 1401/1751, Nasdaq Adv/Dec 1190/1747

[UpInArms]

88. 3:07 EST numbers and blather

Dow 10,461.72 +0.38 (+0.00%)
Nasdaq 1,995.09 -4.26 (-0.21%)
S&P 500 1,181.98 +0.78 (+0.07%)
10-Yr Bond 4.450 -0.41 (-0.91%)

NYSE Volume 1,191,590,000
Nasdaq Volume 1,071,482,000

3:00PM: Still a basically unchanged market with not much to move the indices in the late afternoon... Meanwhile, the dollar has been weak all day against both the euro (1.2980) and the yen (107.73) ahead of tomorrow's (8:30 ET) Feb Trade Deficit data... Economists are currently forecasting a figure of -$59.0 bln, which would equate to the country's second biggest deficit ever... Currency traders have perhaps also booked some profits, as the greenback hit multi-month highs last week, heading into Fed Governor Bernanke's speech (Thursday) about the current account gap... NYSE Adv/Dec 1455/1777, Nasdaq Adv/Dec 1164/1830

2:35PM: Stocks continue to trade with little fanfare, as the Nasdaq still trails its blue chip counterparts... Pacing the way lower in technology has been Computer Hardware (-0.8%)... Shares of Apple Computer (AAPL 42.45 -1.29), which reports earnings on Wednesday, have been under pressure after being downgraded at Caris & Company, amid doubts that it can sustain its startling success, while IBM (IBM 86.26 -1.34) has fallen amid concerns that hardware sales may come in lower than expected...

Shares of Gateway (GTW 4.14 +0.06), however, have climbed after it received a $150 mln settlement from Microsoft...NYSE Adv/Dec 1365/1858, Nasdaq Adv/Dec 1113/1856

[UpInArms]

84. May crude, gasoline futures turn higher ($53.50 bbl)

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38453.5815676968-834052403&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Crude futures turned higher in afternoon trade Monday, pushing back over the $53 a barrel level after hovering around the $52.60 level through the morning. The contract for May delivery was last up 18 cents, or 0.3% at $53.50, having earlier traded as low as $52.10 a barrel. May unleaded gasoline also reversed direction, trading up 0.8% at $1.549 a gallon, as traders continued to weigh supply against demand levels heading into the summer driving season.

[54anickel]

87. The Recovery That Isn't & The Bust That Will

http://www.financialsense.com/editorials/rostenko/2005/0406.html

I submit to you, dear reader, that most everything you’ve heard about the economic recovery is a pack of lies, a fraud, a joke, propaganda, twaddle and fiddle-faddle, sprinkled with a liberal dose of bullpucky and a pinch of hogwash for good measure.

Now that we’ve gotten the niceties and formalities out of the way, let me share with you how I REALLY feel.

Most readers already know that the official statistics are a pile of hooey, routinely manipulated to demonstrate an economic fantasy that doesn’t really exist. Basically the feds get to write their own report card every month and they’re not exactly loathe to take some liberties in compiling the numbers. (If there’s one thing feds are good at, it’s TAKING liberties.) We’ve been over this before, but let’s review a few blatant examples to lay the foundation.

First off, one of the biggest frauds: GDP. This fabrication is calculated using all manner of mumbo jumbo that I purport neither to care about nor understand. AND the official inflation data. Anyone who doesn’t sleep under a bridge and force windshield washings upon unsuspecting drivers for a living knows that official inflation data is about as out of touch with reality as Rosie O’Donnell is out of touch with the concept of stopping at just one helping. We all know that the inflation figures are routinely UNDERstated, which leads to an OVERstatement of GDP growth.

The inflation data makes ridiculous assumptions about housing costs. Those numbers are calculated utilizing rental rates and as we all know, rental rates have NOT kept pace with surging home prices. As far as the Fed is concerned, the cost of housing has only risen modestly even as they pat themselves on the back for surging home values. You can’t really reconcile the dual “successes”, but the Fed trusts that the average consumer will continue to accept the official line and never question the obvious disparity.

The employment data. Now here’s a real piece of work. These numbers fail to account for disgruntled workers who have left the job search. The actual unemployment rate is estimated as twice as high as the official figures. Never mind that the bulk of job growth is a statistical fiction based on questionable assumptions. It may surprise you to learn that the job growth is NOT measured by doing a head count of ACTUALLY created jobs.

Last but certainly not the least absurd, Alan Greenspan’s favorite “hedonic pricing method” which makes all kinds of wacky assumptions that only a bureaucrat could love. At $25,000 a piece, the Fed doesn’t consider cars to be much more expensive than $10,000 cars twenty years ago because they’re better and loaded with more features today! Oddly enough, however, computers that cost $1000 are actually worth several times that when calculating capital spending data because, well, because computers are better and loaded with more features today. Inflation down, capital spending up. Voila! Economic recovery courtesy of Fed statistamathemagics!

more...

[mhr]

99. And The Experts Agree On Employment/Unemployment

The experts:

"Overall, this level of (job) creation represents the worst job performance since the Bureau of Labor Statistics began collecting monthly jobs data in 1939 (at the end of the Great Depression)."

http://www.jobwatch.org /

"In the previous five expansionary economic cycles the average increase in employment over the first 39 months was 10.1%. In the current cycle the increase is 1.5%.

If employment had climbed by 10.1 % since November 2001, we would have added 13.2 million jobs instead of the 1.9 million actually reported. That’s a difference of 11.3 million jobs."

http://www.comstockfunds.com/screenprint.cfm?newsletterid=1165

My Conclusion: The American middle class is fast approaching demise and will need life support to survive!

[UpInArms]

91. Philly Fed chief (Santomero) sees more growth ahead

http://www.usatoday.com/money/economy/fed/2005-04-11-santomero-usat_x.htm

Anthony Santomero became president of the Federal Reserve Bank of Philadelphia in July 2000, arriving just in time for one of the steepest series of interest rate cuts in recent Fed history to battle the 2001 recession. Now, with the central bank gradually raising rates to a more neutral level, Santomero sees an economy expanding at a "robust" pace with rising business confidence and employment. While inflation bears scrutiny, price pressures are still near the Fed's desired range, he says.

<snip>

Q: Where is the economy headed?

A: Virtually everywhere I go in my (Fed) district, people are content with an expansion. They're not bubbling over with excitement, but they are seeing an economy that's growing, where they have to remain competitive, but their sales are growing, their incomes are rising.

This is an economy that is in good shape and growing at a good pace, not too fast so as to create all these imbalances and pressure on prices, but clearly moving slightly above trend. ... The last cycle lasted the longest in postwar history, it was 10 years. We're in the fourth year of this (expansion), and it's going at a pace that suggests it can continue to go at this pace for some time.

Q: What's the outlook for inflation?

A: We're in the fourth year of a recovery, and as a result of that it is natural for the dynamics of the marketplace to change a little bit. We have to be cautious that as the economy continues to grow, prices aren't increasing in response to that continued growth. ... We have to be vigilant about inflation and in so doing, allow the economy to go through an extended expansion without finding ourselves trying to react to higher inflation.

The numbers are still in the acceptable range. (Core) inflation is running at 1% or 2%. But as we talk to people around our district, they feel the pressures. They try to pass those into higher prices, and so far competitive pressures have prevented them from doing so. We must be cautious as we move forward to make sure that inflation doesn't start to accelerate, because it's much harder to stop it than it is to prevent it.

<snip>

Q: Are consumers under stress?

A: I think the consumer is in good shape. The consumer has used lower rates to refinance and reduce their payments. The consumer has been finding more jobs more easily.

...more...

:rofl:

Is this guy a wind-up?

[54anickel]

95. What's he on, and where can I get me some of that?...eom

[RawMaterials]

93. Closing Numbers and Blather

Dow 10448.56 -12.78 (-0.12%)
Nasdaq 1992.12 -7.23 (-0.36%)
S&P 500 1181.21 +0.01 (+0.00%)
10-Yr Bond 4.445% -0.46

NYSE Volume 1,509,054,000
Nasdaq Volume 1,339,673,000



Close: The market left little to be desired Monday as a warning from Ford underpinned concerns about upcoming earnings... Ford Motor Co. (F 10.44 -0.59) slashed its FY05 profit outlook by about $900 mln and abandoned its previously ambitious FY06 goal of earning $7 bln before taxes... With all eyes now focused on Q1 earnings reports over the next few weeks, not even falling oil prices and lower bond yields throughout most of the session were enough to renew buying interest following Friday's drubbing...

Crude oil futures had initially fallen for the sixth consecutive session and nearly fell below $52/bbl ($52.10), as OPEC pondered a possible 500K output increase and a likely oil strike in Nigeria had been averted, before closing at $53.71/bbl (+$0.39)... And Treasurys rallied around diminishing demand for corporate bond issues amid Ford's disappointing FY05 outlook - S&P cut Ford's credit rating to Negative from Stable while Deutsche Bank lowered its rating on Ford bonds to Sell from Hold - as investors seeking safety pushed yields on the 10-year note (+6/32) down to 4.44%...

But concerns over inflationary pressures and interest rates, for the first time in months, took a back seat to day one of the first full week of earnings, and were no match for the nervousness prompted by Ford's lowered guidance... As one might expect, Auto Manufacturers (-3.3%) was the worst performing S&P group on the day... Of the 10 more closely-watched economic sectors, however, Information Technology (-0.5%) was the most influential leader to the downside, with Computer Hardware (-0.8%) pacing the way lower following an analyst downgrade on Apple Computer (AAPL 41.92 -1.82) and concerns that IBM's (IBM 86.20 -1.40) hardware sales may come in lower than expected...

Consumer Discretionary (-0.4%) and Materials (-0.4%) were also weak, with the latter also being adversely affected by Ford's warning, as Steel came under pressure... Utility, however, surged as a flight to quality and desire for dividends lifted the interest-rate sensitive group, while Energy, in the wake of a late-day rebound in oil prices, also closed to the upside... Eking out modest gains were Financial, Industrials and Consumer Staples... Transportation, under pressure earlier in the session, eventually found strength from CNF Inc.'s (CNF 44.47 +2.45) upside Q1 guidance...

Also guiding higher on the day were NCR Corp (NCR 35.25 +0.59), which now anticipates Q1 and FY05 earnings to exceed prior guidance due to better-than-expected operating performance, and RR Donnelly & Sons (RRD 33.55 +2.19), which also raised Q1 and FY05 guidance... But the apprehension felt throughout the auto market, widely perceived as a key economic indicator, weighed on equities into the close... Meanwhile, there was one notable earnings report out this morning from Circuit City (CC 15.89 +0.48), which surged despite missing Reuters' Q4 (Feb) estimates by $0.04 and issued in-line FY06 revenue guidance...

But with the release of more influential reports from the likes of C, GE, ABT and AAPL out later this week buyers remained a reluctant bunch, perhaps until reporting trends become a bit clearer... DJTA +0.4, DJUA +1.2, DOT -0.2, Nasdaq 100 -0.5, Russell 2000 -0.6, SOX -0.8, S&P Midcap 400 -0.4, XOI +0.9, NYSE Adv/Dec 1431/1847, Nasdaq Adv/Dec 1118/1944

[Roland99]

94. FWIW...

Dow Jones Industrial Average
Bush's inauguration (2001): 10,587.60
Today: 10,448.56