STOCK MARKET WATCH, Monday 25 April

[ozymandius]

Monday April 25, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 271 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 133 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 189 DAYS
DAYS SINCE ENRON COLLAPSE = 1247
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 21, 2005

Dow... 10,157.71 -60.89 (-0.60%)
Nasdaq... 1,932.19 -30.22 (-1.54%)
S&P 500... 1,152.12 -7.83 (-0.68%)
10-Yr Bond... 4.26% -0.05 (-1.05%)
Gold future... 435.60 +1.20 (+0.28%)

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
The Break Down

In this week’s wrap up I want to briefly review a few of the Indices that I regularly comment on from time to time and evaluate the technical damage that has been done. To begin with we have the Dow Jones Industrial Average vs. the Dow Jones Transportation Average. In the chart below you can see that both averages have clearly violated their January lows. According to Dow theory the January lows represent the previous Secondary reaction low points. It is the violation of the Secondary reaction low points that serve to confirm the break down. Monitoring this break down is an ongoing process as there are other important developments to be aware of. But for now, the initial confirmation marking what should be the end of the mammoth secondary reaction, which began at the October 2002 low, has occurred.



The next chart below includes the Industrials and the Retail Holders. I have shown the chart of the Retailers in the past. I have found that the Retailers will often lead the Industrials. The Retailers broke down out of a 4 month consolidation period late last month. I said then that the break should have a negative impact on the rest of the market. Since then we have seen both the Industrials and the Transports confirm the weakness that was telegraphed by the Retailers. The Retailers and the Industrials are now in gear.



more...

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

[UpInArms]

2. daily dollar watch

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

Last trade 83.85 Change +0.35 (+0.42%)

Forex Update - WEEKLY DOLLAR ANALYSIS

http://www.forextv.com/FT/Text/ShowStory.jsp?id=3373

What are the dollar's prospects now?

There will be greater uncertainty over US growth trends in the short term, especially as recent data has been contradictory. The economy should remain firm in the short term, but growth risks are liable to increase further over the second half of the year as consumer spending comes under further pressure. The Fed will be concerned over inflationary pressure, but is likely to retain a measured stance on interest rates for the next 2-3 months. The dollar will still secure short-term yield support, but there is the possibility that rate increases will pause over the second half which would substantially lessen the potential for dollar buying on yield grounds. Structural vulnerability will continue and there will also be underlying Euro buying on any significant retreat as Euro reserves are increased. There is now little scope for a covering of short dollar positions and this will lessen the potential for dollar gains. The US currency will still be protected by weak Euro-zone growth and shorter-term political concerns ahead of the French referendum. Nevertheless, the dollar will struggle to make significant headway and is liable to weaken in the medium term.

The dollar weakened to a low of 1.31 against the Euro during the week and was unable to make a significant recovery.

The US economic data was mixed over the week and added to the uncertainties over the US outlook. The economic data during the first half of the week was disappointing with a decline in housing starts of 17.6% for March. The picture was the reverse over the second half with unexpectedly strong data for the Philadelphia Fed index and a sharp drop in housing starts. Leading indicators, however, recorded a 0.4% decline for March, maintaining the recent disappointing trend.

...more...

Yen posts solid gains in wake of Koizumi's apology

http://www.taipeitimes.com/News/biz/archives/2005/04/24/2003251799

The yen rose the most in two months against the dollar and surged versus the euro after Japanese Prime Minister Junichiro Koizumi's apology for wartime suffering in neighboring Asian nations eased concern that Japan will lose business in China.

"The apology is a real positive for the yen," said David Mann, a currency strategist at Standard Chartered Plc in London. "Growing tensions between the two countries and potential spill-over effects for the Japanese economy, with growing moves for a boycott, meant it was a real risk for the yen."

The yen rose to ?106 per dollar at 5:40pm in New York, from ?106.94 late Thursday, according to electronic currency-dealing system EBS. It rose to ?138.49 per euro from ?139.54. The yen also rose against the Korean won, Swiss franc and British pound after Koizumi said he will meet with Chinese President Hu Jintao (胡錦濤) today.

Japan's currency is also being buoyed after US Federal Reserve Chairman Alan Greenspan said on Thursday that China will probably end the yuan's decade-old peg to the dollar "sooner rather than later." A stronger yuan may reduce the competitiveness of China's exports compared with Japan's.

"Any probability of China revaluing will lead to stronger Asian currencies," said Mark Austin, head of global currency strategy in London at HSBC Holdings Plc. "Japan has been worried about a loss of competitiveness as China keeps its currency low, so if the Chinese currency goes higher, Japan will be happier to allow its currency to strengthen."

...more...

Will the US consumer continue to spend?

http://www.dailyfx.com/index.php?option=com_content&task=view&id=834&Itemid=39

"Under existing tax rates and reasonable assumptions about other spending ... projections make clear that the federal budget is on an unsustainable path, in which large deficits result in rising interest rates and ever-growing interest payments that augment deficits in future years."
Alan Greenspan, Federal Reserve Chairman.
Thursday, April 21, 2005 15:21 GMT

Consumer: Front and Center

The dollar is up. The dollar is down. As we noted last week the marked change in sentiment by the FX market regarding the speed and amplitude of future Fed rate hikes hurt the dollar, as the greenback sank by more than 1% against all the majors. Chairman Greenspan's typically cryptic testimony in front of Congress, also did little to boost the prospects of dollar bulls as he fretted about the size of the deficits and reminded the markets once more about the sorry state of the US Balance Sheet.

However, the key story of last week was oil. With WTIC crude now trading at $55/bbl even as we approach the seasonally slow summer months, the markets are beginning to worry about the US consumer. This week's Barron's features a reference to the latest research from Stephanie Pomboy's MacroMavens newsletter in which she notes a very disturbing trend - wages as a percentage of personal income have reached a historic low of 62% while consumer spending as percentage of wages stands a record 160%! How long can the US consumer continue spending beyond his means driving the world economy?

This week a slew of data from Housing Starts, GDP to Consumer Income and Spending will provide the market with better clues as to the health of the US consumer. With gasoline at $2.50/gallon, most expectations are subdued. If the numbers surprise to the upside, dollar longs may get a rally, but if the data demonstrates a further slowdown more pain may be in store.

...more...

No Reports today.

Spot on with the 'toon, Ozy!

Have a Great Day Marketeers!

[UpInArms]

18. Dollar mixed ahead of home sales data

http://www.marketwatch.com/news/story.asp?guid=%7B4B0DF343-DBD4-4A04-89F8-409657C0892F%7D&siteid=mktw

NEW YORK (MarketWatch) -- The dollar was mixed early Monday ahead of new monthly existing home sales data, as currencies continued to trade in response to overseas developments, with the euro pressured by an exceptionally weak German Ifo survey reading.

<snip>

Later in the session investors will receive existing home sales numbers for March. The MarketWatch forecast is for 6.76 million homes sold last month, down slightly from 6.79 million in February.

The dollar, which last week struck a one-month low against the yen, early Monday also benefited from a shift in focus towards next week's Federal Open Market Committee rate decision, according to Paul Jackson, senior forex dealer at CMC Group.

The FOMC is widely expected to increase the fed funds target rate by 25 basis points next week, as part of a series of incremental, quarter-point rate hikes under the Fed's current "measured pace" monetary policy.

...more...

The existing home sales data will be released at 10:00 EST - this report did not show up on the Yahoo Economic Calendar for today :eyes:

[UpInArms]

3. Washington's Deficit Plan? Nada

http://www.businessweek.com/bwdaily/dnflash/apr2005/nf20050425_0333.htm?campaign_id=rss_daily

Despite rising red ink, Bush and Congress are spending more and taxing less, creating even more debt. It may take a crisis to shake things up

Waiting for Washington to get the deficit under control? Pull up a chair and relax. It's going to be a while.

Despite annual deficits that are approaching $400 billion -- and that will explode as the baby boomers begin to retire over the next decade -- Washington seems unwilling to take action. There are only two solutions: raising taxes or cutting spending. Lawmakers will do neither.

<snip>

"UNSUSTAINABLE PATH." By the time Washington is finished with this year's fiscal follies, the President and Congress are likely to add $150 billion or more to the deficit over the next five years. "Deficits are back as an issue, but they are not being taken seriously," says Robert Bixby, president of the Concord Coalition, a nonpartisan group that lobbies for fiscal prudence. "They are going backward."

You don't need a green eyeshade to understand the long-range problem. Today, as a percentage of the economy, federal tax revenues are at 50-year lows -- only about 16% of gross domestic product. But spending is humming along at 20% of national output.

...more...

[UpInArms]

4. The Fed: No More "Measured"?

http://www.businessweek.com/bwdaily/dnflash/apr2005/nf20050425_4437_db035.htm?campaign_id=rss_daily

When Federal Reserve Chairman Alan Greenspan and his central bank colleagues first began talking about "measured" interest rate increases a year ago, they were sure of one thing: They didn't expect a repeat of 1994-95, when the Fed aggressively jacked up rates from 3% to 6%. This time around, with inflation ultralow and productivity superstrong, Greenspan & Co. felt the central bank could take a more gradual approach to a tighter monetary policy.

What that has meant in practice -- and what the financial markets have come to expect -- are bite-size quarter-point increases every time the rate-setting Federal Open Market Committee meets. And the group is almost universally expected to follow that course at its next meeting on May 3, raising the federal funds rate to 3% from 2.75%.

But with inflation rising at a quicker pace lately and productivity growth slowing, Fed insiders are feeling a bit hemmed in by investor expectations of continued quarter-point moves -- and could scrap their declaration of measured rate hikes at their upcoming meeting. Policymakers perceive that the risks are shifting a bit toward faster inflation, and they may prefer to be free of any constraints on moving rates up faster should that prove necessary.

<snip>

Even though economic growth has shown signs of slowing since the Fed's last meeting, with consumers in particular pulling back on their spending in response to higher gasoline prices, Fed policymakers so far have generally played down the significance of that slackening, while stressing their vigilance on inflation. "There are emerging signs of inflation," Fed Vice-Chairman Roger W. Ferguson said after a speech in North Carolina on Apr. 20. "We need to track pricing developments quite closely."

...more...

[54anickel]

11. Sheesh, are they TRYING to engineer a crisis? In reading posts 3 & 4

it sure is starting to look that way. Maybe they are trying to prove Cheney's idea that "deficits don't matter". :eyes:

[UpInArms]

5. Oil Hits $56 on U.S. Refining Problems

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8279873&src=rss/businessNews

LONDON (Reuters) - Oil made fresh gains on Monday as refinery glitches in the United States kept the market edgy about a possible squeeze on gasoline supplies this summer.

U.S. light crude (CLc1: Quote, Profile, Research) hit a session high of $56 a barrel, before easing to $55.75, up 36 cents and adding to a hefty gain of $1.19, or 2.2 percent, on Friday.

London Brent crude (LCOc1: Quote, Profile, Research) was up 33 cents to $55.30 a barrel, after hitting a session high of $55.70.

Crude oil prices have rallied for five straight sessions, notching up gains of more than $4 and within striking distance of the all-time high of $58.28 set at the start of the April as speculative funds surge back into the market.

...more...

[UpInArms]

17. Saudi oil minister says focus shifting to overseas refineries

http://www.marketwatch.com/news/story.asp?guid=%7B661C6D23%2D8275%2D4483%2D936D%2DE1C47D84B9F8%7D

DALLAS (MarketWatch) -- Despite President George W. Bush's pleas for new refinery capacity in the United States, Saudi Arabia has no plans to deliver on a proposal to build two very large refineries, Saudi Arabian oil minister Ali Naimi told Dow Jones Sunday. Rather, the Kingdom has shifted efforts to off-shore refineries.

At a conference in New York in late April, 2004, Naimi disclosed plans to build two 500,000 barrel a day refineries in the U.S. as soon as possible. The additional million barrels could have been a significant boost to U.S. processing capacity, which is currently 16.3 million barrels a day, according to the U.S. Energy Information Administration.

<snip>

Skeptics had said the 1 million barrels a day wasn't realistic, and the projects would be deterred by finance and bureaucratic requirements.

A year later, the plans have officially fallen through, with Naimi saying that Saudi Arabia has made no progress on funding two new refineries in the U.S. Naimi's comments follow President Bush's recent calls for additional refinery capacity. Both Bush and Vice President Dick Cheney have blamed high oil prices on a lack of new U.S. refining capacity.

...more...

[54anickel]

33. Bwahaha. This part had to have BeelzeBush steaming

Although Saudi Arabia's U.S. refinery projects have languished, Naimi said the country is making "plenty" of progress on refining projects overseas. He did not specify the precise capacity or location of these refining projects, but so far, Saudi Arabia has announced plans to develop a refinery in China, and has discussed the possibility of a refinery to meet India's fuel needs.

Projects To Meet Asian Demand

Seems the Saudis understand where their future customer demand and base will be originating. :evilgrin:

[UpInArms]

37. Oil Futures Rise Before Bush-Saudi Meeting

http://abcnews.go.com/Business/wireStory?id=700353

VIENNA, Austria Apr 25, 2005 — Crude futures rose Monday ahead of a meeting between President Bush and Saudi Crown Prince Abdullah that will focus in part on possible ways to bring down high oil prices.

Analysts said that a rash of refinery outages in the United States and Venezuela underpinned the bullish market, along with stronger than expected stock draws on crude and a perception that neither producers nor oil companies were willing to go beyond present measures to bring prices down.

<snip>

Bush has promised to press Abdullah during Monday's meeting in Texas to do more to help ease global oil prices. But he has acknowledged there may be little the Saudis can do in the short term.

<snip>

But other analysts suggested reassuring words from the Saudi-U.S. meeting may not be enough at a time of bullish market fundamentals.

...more...

Looks like the "analysts" are betting against Dimson's ability to jawbone his honorary family member (Bandar Bush) into "opening the spigots".

[54anickel]

39. Just another dog & pony show with a 1 trick pony at that.

[UpInArms]

32. Crude, gasoline gain at Nymex open

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38467.4270899306-834552664&siteID=mktw&scid=0&doctype=806&

DALLAS (MarketWatch) -- Crude oil futures held above $55 a barrel Monday morning at the open of the New York Mercantile Exchange, with traders continuing to key off a perception of tight gasoline supplies. Last week, the Energy Department and the American Petroleum Institute reported unexpected declines in U.S. crude and gasoline supplies. The June crude contract rose 16 cents to $55.55 per barrel, and May gasoline rose 1.37 cents to $1.666 per gallon.

Is that the sign of the devil in gasoline prices? :evilgrin:

Hi Marale! :hi:

[MARALE]

52. That number is everywhere!

I tell you, * is the anti-Christ!



Thanks UIA for keeping on top of everything, I am so tired after this weekend My daughter was in a tumbling tourney, she is going to national competition! Need to catch up on sleep today.

[UpInArms]

60. Gasoline still strong, but crude falters

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38467.5399828588-834556731&siteID=mktw&scid=0&doctype=806&

DALLAS (MarketWatch) -- May gasoline continued higher Monday on the New York Mercantile Exchange, adding 1.2%, or 1.97 cents, to $1.672 per gallon, but June crude fell 43 cents to $54.96 per barrel. Gasoline is being driven higher by concerns about U.S. supply.

Wow! That Valero merger should fix this! :sarcasm:

[UpInArms]

6. Wal-Mart: April sales flat to up 2%

http://www.marketwatch.com/news/story.asp?guid=%7B1B272C9B-FEDE-4EE7-8892-C1577FECB9CD%7D&siteid=mktw&dist=

SAN FRANCISCO (MarketWatch) -- The world's largest retailer, Wal-Mart Stores Inc., said Saturday that it expects same-store sales in April to range from flat to up 2%.

That leaves unchanged the company's April forecast for same-store sales, an industry measure that tracks the performance of stores open for a least a year.

<snip>

For the week ended April 22, Wal-Mart (WMT: news, chart, profile) said more shoppers purchased food than general merchandise items.

...more...

[UpInArms]

7. Sears workers soon will learn about jobs

http://www.chicagotribune.com/business/chi-0504250092apr25,1,3409863.story?coll=chi-business-hed&ctrack=1&cset=true

Many of the 4,200 workers at Sears Holdings Corp. headquarters in Hoffman Estates will learn this week whether they will have a future with the nation's third-biggest retailer. Hundreds, and possibly as many as 1,000, could be sent packing.

Formed by the merger of Sears, Roebuck and Co. and Kmart Holding Corp., the $55 billion company said only days after the deal's March 24 consummation that job cuts would likely be announced by the end of April.

In early April, Sears Holdings notified federal, state and local governments that 500 workers would lose their jobs as part of a "mass layoff" at the Hoffman Estates headquarters. The number reported to the state is supposed to be an accurate number of planned layoffs, but it can be adjusted by the company. As of Friday the notice was still at 500.

<snip>

Sears has declined to comment beyond the filing about how many workers will ultimately be cut from the payroll, but some expect the cuts to reach well beyond 500.

"There's still a lot of noise around the numbers," said one former executive who still has friends at Sears. "The people I talk to say hundreds and maybe it'll even get into 1,000" or more. Another former Sears executive predicts that cuts could reach as high as 800.

...more...

[UpInArms]

8. Huge Oil Merger in Works

http://www.cfra.com/headlines/index.asp?cat=3&nid=27187

If shareholders and regulators give their approval, we could soon see a merger that would create the largest crude oil refiner in North America.

Valero Energy, based in Texas, wants to acquire Premcor, of Connecticut, for $6.9-billion US in cash and stock.

That deal already has the approval of the boards of directors of both companies.

Valero purchased Ultramar Diamond Shamrock Corp. for about $4-billion US in cash and stock in 2001.

...very short one-sentence paragraph blurb...

[UpInArms]

51. S&P cuts rating on Valero debt to BBB-minus

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7BFDBF603A-3552-4A4C-AD88-4C710982C50B%7D&

DALLAS (MarketWatch) -- Standard & Poor's cut the corporate credit rating on Valero Energy (VLO) to BBB-minus from BBB following the announcement that the refiner would buy rival Premcor Inc. for $8 billion. The rating is on watch for a possible downgrade, reflecting "concerns that refining margins could weaken considerably in advance of the close, jeopardizing Valero's plans for rapid deleveraging," S&P said. S&P also placed Premcor's (PCO) corporate credit rating of BB-minus on watch for a possible upgrade.

[54anickel]

56. Shhhh! Oh ye of little faith at the S&P. Valero need not be concerned

with weakening refining margins, they've made a deal with their buddies in the "bidness"! All it will take is a little unscheduled maintenance here, a bit of a glitch there and poof margins are right back where they need to be. Ahh, the power of limited refining capabilities. So long as none of their "buddies" turn against them there's nothing to worry about!

But thanks for cutting the ratings, I'm sure this will be looked upon as a great buying opportunity!

[UpInArms]

9. GM, Delta Lobby Against Bush's Proposal to Restructure Pensions

http://www.bloomberg.com/apps/news?pid=10000103&sid=aIsjvsOI1rhc&refer=us

April 25 (Bloomberg) -- President George W. Bush and big companies, normally the best of friends, are on a collision course over pensions.

General Motors Corp., DuPont Co. and Delta Air Lines Inc. are among the companies lobbying against Bush's proposal to restructure the nation's pension-insurance program. The companies argue that the plan, if adopted, may damage or even destroy their private retirement plans and drive some employers into bankruptcy.

Bush's plan calls for employers to pay an additional $18.1 billion in premiums to the Pension Benefit Guaranty Corp., the quasi-government agency that insures companies' plans. The proposal would also force the companies to revalue their pension liabilities and to fully fund their defined-benefit retirement programs. The U.S. Labor Department says that employee pensions were underfunded by $450 billion last year.

``It would be devastating for the system to raise that much money'' in premiums, says Annette Guarisco, executive director for federal affairs at GM, which has the largest U.S. pension plan. ``For all companies, it would require an unnecessary diversion of funds from normal business operations, research and development, product development.''

...more...

[Tandalayo_Scheisskopf]

12. Now he starts on business.

With business already nervous about his affair with the fundies, this cannot be good for him and the other repukes. On the other hand, he may be doing the more correct thing with this.

May. Not is.

There is always a proviso with this guy.

[UpInArms]

14. my thoughts exactly

Tandalayo_Scheisskopf

If there's a right way and a wrong way to do something, this buffoon seems to always chose the wrong way.

[ret5hd]

21. The way i see it is...

he is "giving cover to" the companies that still have defined benefits plans that (secretly or not so secretly) desire to convert to defined contribution plans. GM, etc, may publicly raise a stink, but behind the scenes i am sure they would be pleased to convert their plans.

[ozymandius]

28. Any government fund

is fair game for this government to squander. Social Security is the most popular example. I'll wager that Bush wants their money. Just not for the purpose of spending it on its defined purpose.

[punpirate]

73. Hmmm...

... the background of this situation is that the effective corporate tax load on major corporations is at a modern all-time low, in both terms of actual taxes paid and percentage of federal tax revenues. Stock prices and volumes, while down a bit in the short term, are still up dramatically from fifteen or so years ago.

Corps have just gotten another series of tax rebate/credit/subsidy and repatriation packages from Congress with another due soon in the form of the energy bill. Anti-trust action has virtually disappeared from the vocabulary. Regulatory action, especially in environmental matters, is declining--more than half of the future costs of pollution clean-up have been pushed onto the taxpayers, rather than polluters.

Consumer debt continues to hit all-time highs, because consumers have been on a buying binge for a decade or more.

There's been a steady trend for almost fifteen years in the abandonment of defined-benefit pension plans in favor of defined-contribution plans, but, defined-benefit plans are drastically underfunded, and the costs of just making the proposed marginal increases in premiums to a government plan intended to be an emergency fallback system will drive our biggest corporations into bankruptcy....

What's wrong with this picture?

I think this is all a bit of play-acting, with the end intention of pushing the costs of defined-benefit pension systems onto the taxpayer in much the same way as were the savings and loan losses, and eventually relieving corporations of responsibility for those plans entirely.

[54anickel]

74. Thanks Punpirate, that seems like a logical assumption, and it requires

no :tinfoilhat: Taxpayers take on yet another bailout. Just another repeat of the pattern.

Although I have a gut feeling that there is more to it. Possibly too much meddling going on in their "corporate governance" by those pesky little shareholders - maybe something all together different. It just ain't passin' the smell test.

[punpirate]

75. Yeah...

... no dispute from me on them not wanting the big institutional investors on their boards and in their business... too much of a chance of CEO compensation packages being adjusted that way. :)

But, the curious thing about this is that recent history has suggested that companies are using bankruptcy proceedings as a means of forcing the guarantee system to pick up their pension costs--that's why the emergency fund is depleted. Nothing in the recent bankruptcy bill even addresses that....

So, maybe a few of the majors are planning Ch. 11s and this is just a way of putting the blame on the government: "we never would have had to do this if it wasn't for the way the pension guarantee fund works." Having deposited that pesky obligation on the government, they emerge from restructuring virtually intact, and if prior history is any indication, with the same management, but rid of their pension obligations (and in the case of GMC, absent the health care costs that they say are now eating them up).

It's yet another possibility.

[54anickel]

31. Ulterior motives? Looks like a sure-fired way to do away with defined

pension plans to me. Perhaps he is offering himself as a scapegoat to begin doing away with pensions. Big money is feeling a bit threatened these days by pension fund demands for voting rights of their shareholders. Perhaps this is a smoke-screen, sort of a loose the battle but win the war. :shrug: :tinfoilhat:

Couple of articles that lead me to believe there is more here than meets the eye. The first is about the gains being made in Public Pension Funds. The second is an interesting read about the bizarre twist in David Stockman's life and his new relationship with labor and social issues. I think big business is feeling threatened by all this meddling with their precious board of directors.

Will defined pensions be traded for 401Ks and IRAs? Perhaps pensions aren't worth looting anymore. Ah, but there could be fresh fleece in the stock and corporate bond markets....

Corporate America Pushes Back

http://www.commondreams.org/headlines05/0103-23.htm

snip>

Now, big business is saying "enough," lobbying against the pension funds and opposing a big item on the funds' agenda: their attempts to nominate directors to corporate boards.

snip>

The state pension funds, which control more than $2 trillion in assets, became more active after Enron and other businesses failed, wiping out about $300 billion in investments. The funds and the politicians associated with them, most of them Democrats, pushed for smaller executive salaries, sued the New York Stock Exchange for alleged fraudulent trading and pulled $5 billion in investments from a mutual fund accused of fraud. The funds called it a way to protect their investments by promoting better business practices.

But some analysts say the pension funds' activism is much more. It's the new face of management-labor relations, with organized labor using its ownership of companies through pension investments to regain influence it has lost through membership declines, said Jarol B. Manheim, a political science professor at George Washington University in Washington, D.C.

As funds try to redefine corporate responsibilities to focus on broader social goals, corporations feel they have to fight back, Manheim said. The push-pull between the two is "a game that's kind of in midstream," he said.

snip>

Richard Ferlauto, director of pension and benefit policy for the 1.5-million-member American Federation of State, County and Municipal Employees, said state pension funds will eventually win the rights to nominate corporate board members.

"That's an issue that corporate America doesn't want to see happen and the push back is around that," Ferlauto said.

More battles could be in the offing for 2005, as CalPERS plans to work with other public funds to fight high executive salaries. The Wall Street Journal recently offered another idea: California Gov. Arnold Schwarzenegger should promote individual retirement accounts to curb CalPERS' "increasing politicization," taking it to voters, if necessary.

more...


David Stockman, Working-Class Hero
http://slate.msn.com/id/2087957/


In 1981 the journalist William Greider laid out the economic self-deceptions of the Reagan administration, which would unbalance the federal government's books for the next two decades, in a classic Atlantic Monthly article titled, "The Education of David Stockman." David Stockman was President Reagan's budget director, a true believer in supply-side economics and the last powerful conservative to make a serious attempt at radically shrinking the size of government. His ambition to cut federal spending made him a poster child for Reaganomics and much-reviled by the left. (Click here for a representative Stockman caricature from that era.) Stockman told Greider he wanted to attack "weak claims," not "weak clients," but in the end, he couldn't prevent his budget cuts from falling disproportionately on the poor; the rich clients with weak claims proved too powerful to defeat. Ultimately, Stockman failed to achieve budget cuts of any kind sufficient to reverse a trend toward growing deficits fed by the Reagan administration's tax cuts. Greider's piece depicted Stockman as a brilliant young conservative idealist who gradually became disillusioned with the conservative movement's grand theories about how the world worked. In a memoir published five years later, Stockman expressed some disgust with the political process itself.

Greider's piece still makes for compelling reading today, not least because another White House in thrall to supply-side economics (or, more likely, cynical tax-cut politics) has once again created a huge federal budget deficit, today estimated by the Congressional Budget Office at $401 billion. Once again—remarkably, in this case, given President Bush's unwillingness to fund his much-vaunted compassion agenda—the size of government is growing. According to a new study by the Brookings Institution's Paul C. Light, the federal government employs, directly or through government contracts and grants, 12 million people, or a million more than it did under President Clinton. Surprisingly, these additional million people aren't working solely, or even largely, to fight the war on terrorism; they're divided roughly between employees working in defense- and non-defense-related areas, with slightly more in the latter category. The few conservatives who still want to shrink big government are up in arms about the fact that under Bush there's been an increase in "domestic discretionary spending" as a percentage of the nation's gross domestic product. Even Stockman managed to shrink that. To paraphrase Stockman (as quoted by Greider), the hogs are really feeding.

snip>

Greider's new book is an examination of the ways in which trends in the flow of capital have created opportunities to promote social justice. (Greider, who was a Washington Post editor when he wrote the Stockman piece, has moved leftward since then, or at least come out of the closet. He now writes for The Nation.) In some instances, Greider notes, these trends have promoted social justice themselves. Stockman, who now specializes in corporate buyouts, is apparently an example of the latter. You won't find any rhetoric on the Web site of Heartland Industrial Partners, the private equity firm Stockman founded, that sounds even vaguely socialist. But according to Greider, Heartland is one of "a handful of specialized investment firms committed to a 'worker-friendly' mode." Even its name, Greider posits, is borrowed from an investment fund started by Leo Gerard, now president of the United Steelworkers of America, called the Heartland Labor Capital Network. Gerard's fund invests labor pension funds in companies that agree to allow union organizing. So does Stockman's.

Here's how Greider tells it:

snip>

Heartland Industrial Partners' commitment to labor is sufficiently robust to have provoked a lawsuit from the anti-union National Right To Work Legal Defense Foundation objecting to what it calls "an illegal sweetheart arrangement that requires all companies acquired by the Heartland firm to help impose unionization on their employees." The lawsuit concerns Heartland's acquisition of Collins and Aikman Corp., which was nonunion when Heartland acquired it but is now being organized by the Steelworkers.

Stockman last month became CEO of Collins and Aikman. He promptly went into Reagan budget director mode, slashing payroll. But this time, there was a difference: The 750 jobs Stockman eliminated were management jobs. Chatterbox doesn't know whether these jobs represented weak claims, but they surely didn't represent weak clients. What Stockman couldn't do to the government, he appears to be achieving on Wall Street. This time, the left is applauding.

more...

edit to add second link

[antigop]

43. they want mutual funds to control shareholder proxy votes

I posted on this a while ago -- but the thread died with no responses.

You said:
>>Couple of articles that lead me to believe there is more here than meets the eye. The first is about the gains being made in Public Pension Funds. The second is an interesting read about the bizarre twist in David Stockman's life and his new relationship with labor and social issues. I think big business is feeling threatened by all this meddling with their precious board of directors.
>>


If the monied interests succeed in eliminating defined benefit pension plans, and switching to 401(k) plans, the mutual fund proxy committees get to vote the shares in those 401(k) funds on shareholder proxies. The control of those proxy votes can be shifted to a handful of mutual funds.

A handful of mutual funds already control a sizable percentage of proxy votes. Read this article

http://moneycentral.msn.com/content/P75037.asp

The article says:
>>
Investors' growing disdain for actively managed mutual funds has produced a disturbing consequence: Ownership of American public companies is increasingly concentrated in the hands of just four giant index-fund managers.

Through the end of 2003, the world's four largest index-fund firms -- Barclays (BCS, news, msgs), State Street (STT, news, msgs), Fidelity Management and Vanguard Group -- in aggregate held an average of 12.6% of the 20 largest U.S. companies on behalf of their clients. Together, for instance, this elite band owns 15% of IBM (IBM, news, msgs), 15% of Citigroup (C, news, msgs) and 14.5% of Johnson & Johnson (JNJ, news, msgs).
>>

Barclays manages the government employees TSP (Thrift Savings Plan), which is being used as the model for Social Security private accounts. How much more control would they have if Social Security was privatized and they could manage those private accounts?

Schwarzenegger has tried to reign in CALPERS by trying to push through a 401(k)-- but there has been lots of resistance and he may have already given up.

I AM CONVINCED THIS IS PART OF THE PLAN!!!!

1) Destroy defined benefit pension plans. Move to 401(k)'s (defined contribution plans).

2) Privatize social security.

TRANSFER CONTROL OF SHAREHOLDER PROXY VOTES TO A HANDFUL OF MUTUAL FUND COMPANIES.

AND NO ONE SEEMS TO BE WRITING ABOUT THIS!

[UpInArms]

45. thanks antigop for bringing that back

into the collective mind -

that would be a dreadful consequence - there is no real regulation on those fund traders and there have been numerous violations (just recently).

[antigop]

46. And any shareholder resolution that is brought forward could be shot down

Shareholder resolutions are one of the last ways to try to reign in corporations.

Take that power away and concentrate it in the hands of a few mutual fund companies and the corporations can do whatever they want as long as they get the mutual funds to go vote their way.

For the record, shareholder resolutions are not binding. Even if a shareholder resolution gets a high percentage of the vote, there is no requirement for a corporation to actually implement the resolutions. That is my understanding.

But at least CALPERS and public pension funds can make a statement by casting their votes AGAINST management on shareholder resolutions. If public pension funds and CALPERS get shifted to 401(K)'s they will lose their ability to vote against management on the yearly proxy votes.

[54anickel]

47. Interesting, thanks for posting.

The play for power makes for such interesting bedfellows. So, which is the bigger threat to the corporations, the concentrated power of a handful of mutual funds and their elite masters or the "peons" with labor and social interests.

Seems there's an interesting game going on behind the scenes. :popcorn:

Corporations may soon find themselves in the role they had us in for so long. We are all screwed in the end if big money wins.

[antigop]

48. So which is the bigger threat?

>>
So, which is the bigger threat to the corporations, the concentrated power of a handful of mutual funds and their elite masters or the "peons" with labor and social interests
>>

If a corporation doesn't like the way the mutual fund is voting its shares, then the corporation can move management of its 401(k) to another mutual fund company. Granted, there aren't many to choose from. But the corporations can move to another fund company that would be willing to vote the shares the way it wants.

I don't know if the employees would have any say-so, but my instinct tells me "probably not", unless the employees are covered by a union contract.

[54anickel]

54. Yes, I'm pretty sure they will rush to the arms of the mutual funds,

seems like the lesser of 2 evils from the perspective of a corporation. Public funds and CalPER types might cramp their style with ideas of labor rights and social responsibility. :eyes:

The elite (plutocracy) have done such a good job of "villainizing" labor and society in the eyes of corporations. Yet corps do stand to give up much more control to the elite masters behind the mutual funds. They'll still get tossed plenty of table scraps. Guess maybe they've been used as tools for so long they just don't realize it anymore.

Of course this is all based on speculation of the existence of an elite plutocracy. :tinfoilhat:

[KoKo]

50. Excellent posts and links on this....thanks to all of you for adding links

I'm bookmarking this! :toast:

:hi: DU Marketeers informing us of what's going on in the back rooms every day. Truth!

I don't have a "Mighty Mouse" graphic or I would post it. :D

[UpInArms]

38. GM to recall more than 2M vehicles

http://www.marketwatch.com/news/story.asp?guid=%7B09688F0A%2DD1A7%2D47EF%2DB047%2DAB2B12C20505%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) - General Motors said on Monday it's recalling more than 2 million vehicles, including some of its most popular cars and trucks, for safety issues ranging from seat beats to parking brakes.

Of the overall total, about 1.5 million full-size sports utility vehicles and pickup trucks, mostly sold in the U.S., are being called back to the shop to fix the seat belt positioning in the rear seat. The recall covers Chevy Silverado, Suburban, Tahoe and Avalanche as well as the Cadillac Escalade, GMC Yukon and Hummer H2 all from model years 2003-2005.

An additional 332,202 Suburban and Yukon models from 2000 to 2001 are being recalled for possible overheating of the fuel pump, which could result in engine stalling and fuel leaks.

Also, 142,585 Silverado and GMC Sierra trucks from 1999-2002 and 2500/3500 Series pickups from 2001-2004 have been tagged for recall as have more than 100,000 Buick models from 2004 and 2005 for potential brake and ignition problems.

22,115 Saturn L Series Wagons from the 2002-2004 model years are being recalled to comply with safety standards.

...more...

Oh my - that river is not only wide, it is deep.

[54anickel]

41. Guess it's not only their bonds that are striving for junk status these

days. "Bean-counter" mentality hits the production line. Efficient as hell in cutting costs and saving time. Quality has no purpose in profitability - unless of course you get caught and have to issue a recall. DOH!

[UpInArms]

10. Merrill cuts U.S. GDP growth forecast

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38467.3671354167-834550051&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Merrill Lynch lowered its U.S. economic growth forecast to 3.4% from 3.7% in 2005 and to 3.2% from 3.3% in 2006 due to a higher-than-anticipated energy price environment and a sharper-than-expected slowdown in economies abroad. The brokerage firm believes inflation concerns are overdone due to below-potential growth during a time of continued excess capacity.

[UpInArms]

13. China offers conflicting yuan signals

Officials hint at both revaluation, status quo - reports

http://www.marketwatch.com/news/story.asp?siteid=mktw&dist=mktwsnap&guid=%7B1C552EE2-145A-4631-9D0F-7B288D87C57D%7D

TOKYO (MarketWatch) -- China has no timeframe for reforming its foreign exchange system, a Chinese official was quoted as saying Monday, apparently contradicting weekend reports that China's central bank governor said international pressure could force the country to speed up reform of its exchange rate system.

The official Xinhua news agency quoted Wei Benhua, deputy director of the State Administration of Foreign Exchange, as saying that "China has no time schedule for the reform," despite increasing U.S. pressure to throw open its currency regime, according to AFX-Asia.

"I cannot decide a proper time until the basic conditions mature," Wei was quoted as saying Monday, referring to speculation, both domestic and international, that Beijing could loosen its exchange rate for the yuan in the second half of this year or early next year.

<snip>

But on Sunday, China's central bank chief Zhou Xiaochuan was quoted as saying that China might respond to international pressure.

<snip>

"But if the international pressure is strong, that's not bad because it will force us to speed up the reform," he said, according to AFX.

...more...

[54anickel]

44. Toe in the water? Certainly gave the world a glimpse of what will happen

with exchange rates (particularly against the US$) whenever they do decide to revalue.

Falling dollar suggests era of triple-digit won has arrived

April 26, 2005 ¤Ñ With China indicating that it could soon revalue its currency against the U.S. dollar, the American currency's value against the Korean won fell to below 1,000 won yesterday.
It is the first time the won has closed below 1,000 to the U.S. currency in almost eight years.

The dollar started weak on the Seoul foreign exchange market yesterday, after China's central bank governor, Zhou Xiaochuan, said on Saturday, "If there is more external pressure, it will force us to speed up our reform."

Interpreting this as China's signal that the yuan will appreciate against the dollar sooner or later, global investors unloaded the American currency on Asian markets. The dollar declined to 105.71 Japanese yen on the Tokyo market.
snip>

As the dollar broke through the 1,000-won level, the Bank of Korea jawboned in support of the dollar. "Though there has always been talk that an appreciation of the Chinese yuan is drawing near, the market is reacting too sensitively," said Rhee Gwang-ju, director general of the central bank's international department. "If we conclude that the market's move is excessive, we will take necessary measures to stabilize the market."

more...

[54anickel]

64. Wei Benhua actually had some harsher words for the US in this article

that doesn't allow me to copy and paste :grr:

http://www.businessweek.com/ap/financialnews/D89M497O0.htm?campaign_id=apn_home_down

[UpInArms]

15. Lehman sees 2005 loss for GM, cuts price target

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38467.3844602546-834550853&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Lehman Bros. believes General Motors' (GM) decision not to provide an outlook for 2005 means the company will lose money for the year, and reflects the need for more significant production cuts and pricing actions. Analyst Darren Kimball now expects the automaker to lose 70 cents a share in 2005 vs. his prior forecast of a profit of 30 cents a share. He reiterated his underweight rating, but cut his stock price target to $20 from $25. Kimball thinks the company is moving closer to acknowledging a crisis, which may lead it to cut its dividend in half. GM's stock, a component of the Dow industrials, was down 17 cents at $26.57 in Instinet pre-open trading. Kimball also cut his 2005 earnings estimate for Ford Motor (F) to $1.20 a share from $1.40 and his stock price target to $10 from $11 due to industry concerns, but kept his rating at equal weight. Ford's stock closed Friday up 7 cents at $9.89.

[UpInArms]

16. Toyota chief reportedly hints at price hikes in U.S.

http://www.marketwatch.com/news/story.asp?guid=%7B7AF3432E%2DBD9C%2D4E67%2DB729%2D798CEE9B3096%7D

TOKYO (MarketWatch) -- Toyota Motor Corp.'s (TM) chairman suggested Monday the Japanese carmaker may consider raising the prices of the cars it sells in the U.S. to help support its ailing U.S. peers, Kyodo News reported.

At a news conference as the head of the Japanese business lobby Keidanren, Hiroshi Okuda, who is also Toyota's chairman, suggested the possibility of price hikes in the U.S., after U.S. car manufacturers General Motors Corp. (GM) and Ford Motor Co. (F) reported weak earnings results last week, Kyodo reported.

Japanese daily Asahi Shimbun reported Okuda told reporters that the U.S. automakers' problems could cause a backlash for Toyota and other foreign carmakers.

"I'm concerned about the current situation surrounding GM. Although a trade conflict, like ones happened in the past, may be avoided, there may be some impact (on Japan's car industry) because the car industry is symbolic in the U.S. economy," Okuda said.

...more...

[UpInArms]

42. U.S. automakers slide while Japanese manufacturers gain

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38467.4670375463-834554312&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

SAN FRANCISCO (MarketWatch) -- Automakers turned in a mixed performance early Monday with General Motors (GM) leading the Big Three lower while Toyota (TM) paced the advance among Japanese manufacturers. General Motors fell 2.2% to $26.14 after Lehman Bros. cut its estimates and reduced its price target on the stock to $20 from $25. Ford Motor (F) also had its earnings target cut at the brokerage house and shares reacted with a nominal decline to $9.87. Toyota shares gained 1.6% to $73.57 and Honda Motor (HMC) added 1.2% to $24.85.

[UpInArms]

19. pre-opening blather

briefing.com

9:15AM: S&P futures vs fair value: +5.9. Nasdaq futures vs fair value: +11.5. Expectations for the cash market to open higher remain intact, as a slew of merger announcements underpin a positive bias to trading... In addition to aforementioned M&A deals, reports suggest that billionaire and former NYSE director Kenneth Langone may attempt to bid for the NYSE, potentially disrupting last week's proposal by the NYSE to buy Archipelago Holdings (AX)

9:00AM: S&P futures vs fair value: +5.2. Nasdaq futures vs fair value: +8.5. Futures market continues to trade above fair value, setting the stage for a higher open for the indices... Companies in focus this morning following some notable ratings changes include upgrades on AAPL, MU, ELX, FDC, SBUX, CIEN and JCI while Internet & E-Commerce could be under pressure after CIBC downgraded the group to Market Weight, citing valuation and weakening fundamentals

8:30AM: S&P futures vs fair value: +4.9. Nasdaq futures vs fair value: +7.0. Cash market still poised for a higher start as the futures market holds a positive bias... Meanwhile, SBC Communications (SBC) has beaten analysts' Q1 expectations by a penny while better than expected earnings and upside FY05 guidance from Cooper Cameron (CAM) have also helped provide a floor of support of stocks in the early going

8:00AM: S&P futures vs fair value: +2.1. Nasdaq futures vs fair value: +3.5. Futures market versus fair value suggesting a higher open for the cash market as investors digest M&A news and another batch of earnings reports... Valero Energy (VLO) has agreed to acquire Premcor (PCO) for $6.9 bln while MCI (MCIP) has tentatively accepted Qwest's (Q) $9.7 bln takeover bid...

ino.com

The June NASDAQ 100 was slightly lower overnight and is working on a possible inside day as it consolidates below weekly support crossing at 1433.06. Stochastics and the RSI are bullish signaling that a short-term low is in or is near. Closes above last week's high crossing at 1454.50 would signal that a short-term low has been posted. If June resumes this month's decline, weekly support crossing at 1387.77 is the next downside target. The June NASDAQ 100 was down 1.00 pts. at 1430.50 as of 5:48 AM ET. Overnight action sets the stage for a steady to lower opening by the NASDAQ composite index later this morning.

The June S&P 500 index was slightly lower overnight as it consolidates above the 50% retracement level of the August-April rally crossing at 1149.99 and below the 10-day moving average crossing at 1158.50. Stochastics and the RSI are bullish signaling that a low is in or is near. Closes above the 10-day moving average crossing at 1158.50 would confirm that a short-term low has been posted. If this month's decline resumes, the 62% retracement level crossing at 1130.03 is the next downside target. The June S&P 500 Index was down 0.70 pts. at 1156.50 as of 5:50 AM ET. Overnight action sets the stage for a steady to lower opening when the day session begins later this morning.

[UpInArms]

20. Today's Report:

Apr 25	10:00 AM	Existing Home Sales	Mar	-	6.90M	6.80M	6.79M	-

(my mistake, the date just looked like tomorrow :eyes: )

[UpInArms]

27. U.S. March existing home sales up 1.0% to 6.89 mln

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38467.4201242361-834552465&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) - Sales of existing U.S. homes rose 1.0% in March to a seasonally adjusted annual rate of 6.89 million, the third highest ever, the National Association of Realtors said Monday. Economists expected sales to slip to 6.76 million. Sales in February were revised to 6.82 million from 6.79 million previously reported. The inventory of unsold homes fell 0.2% to 2.33 million, a 4-month supply at the current sales pace. The median sales price rose 11.4% year-over-year to $195,000, the biggest gain in 25 years.

10:03am 04/25/05 U.S. MARCH EXISTING HOME SALES PRICE UP 11.4% TO $195K

10:01am 04/25/05 U.S. MARCH EXISTING HOME INVENTORIES DOWN 0.2% TO 2.33M

10:00am 04/25/05 U.S. MARCH EXISTING HOME SALES UP 1.0% TO 6.89 MLN

[naderzenithnow]

29. Better raise those rates faster. Unwind this bubble before it pops.

[54anickel]

35. A fantastic time to be a seller, wouldn't you say?...n/t

[UpInArms]

22. Kimberly-Clark profit in line - Price hikes planned for second quarter

http://www.marketwatch.com/news/story.asp?guid=%7B764C3204%2D9945%2D4B0A%2D90F5%2DEB9652571DA1%7D&siteid=mktw

NEW YORK (MarketWatch) -- Kimberly-Clark Corp. said Monday first-quarter earnings matched its own and Wall Street's targets, helped by higher sales of Kleenex tissues and currency benefits.

Additionally, the Dallas maker of Huggies diapers, Scott bathroom tissue and other personal paper goods (KMB: news, chart, profile) said it will raise prices on a number of brands in the second and third quarters amid significantly higher costs for raw materials.

For the latest quarter ended March 31, Kimberly-Clark said net income dipped 2% to $450.1 million, or 93 cents a share, from $459.3 million, or 91 cents a share, in the year-earlier period.

<snip>

In response to higher raw materials costs, the company said it will raise prices in the second quarter on Cottonelle toilet paper, Viva paper towels and K-C Professional products in North America.

In the third quarter, Kimberly-Clark will raises prices on Huggies diapers, Pull-Ups training pants and other brands in the U.S.

...more...

[UpInArms]

23. 9:37 EST markets are open (WHEE!)

Dow 10,209.66 +51.95 (+0.51%)
Nasdaq 1,942.81 +10.62 (+0.55%)
S&P 500 1,158.08 +5.96 (+0.52%)
10-Yr Bond 4.243 -0.12 (-0.28%)

NYSE Volume 54,826,000
Nasdaq Volume 65,238,000

[naderzenithnow]

24. Some a** covering I think. We are sooo going down. Very interesting.

[spotbird]

34. The less these rallies have to do with the news

the more the market is simple gambling. There could be another run-up followed by another sharp drop, but these as events move closer to random the less sense it makes to consider the market an investment.

[UpInArms]

25. updating and adding blather

9:48 EST

Dow 10,198.65 +40.94 (+0.40%)
Nasdaq 1,941.17 +8.98 (+0.46%)
S&P 500 1,157.32 +5.20 (+0.45%)
10-Yr Bond 4.255 0.00 (0.00%)

NYSE Volume 127,934,000
Nasdaq Volume 135,872,000

9:40AM: Market shows resilience on the heels of last Friday's sell-off and opens on an upbeat note... Providing the bulk of buying interest for equities early on has been a plethora of M&A activity... While MCI Inc.'s (MCIP 26.81 +0.12) declaration of Qwest's (Q 3.57 +0.02) $9.7 bln takeover as superior to Verizon's (VZ 34.21 +0.15) $7.6 bln offer, has marked today's largest deal, Valero Energy's (VLO 75.28 +0.24) proposed $6.9 bln bid for Premcor (PCO 71.15 +12.15) has arguably created the most noise...

The anticipated deal, which will create the country's largest refiner of crude oil, directly addresses one of the biggest issues currently weighing on consumers - high gasoline prices... Separately, Mar. Existing Home Sales (consensus 6.8 mln) will be released at 10:00 ET...

[AnneD]

26. But I thought God only talked to Bubya

:donut: Morning Marketeers. I moved this weekend and I'm trying to figure out why it hurts to type (the other aches are just out of shape). Great wrap up folks-I missed all the business reports, but thanks to you all, I am still well informed. Happy hunting and watch out for the bears.

[UpInArms]

30. 10:10 EST numbers and blather (Hurray for Stocks!)

Dow 10,243.94 +86.23 (+0.85%)
Nasdaq 1,948.80 +16.61 (+0.86%)
S&P 500 1,161.35 +9.23 (+0.80%)
10-Yr Bond 4.249 -0.06 (-0.14%)

NYSE Volume 269,661,000
Nasdaq Volume 246,500,000

10:00AM: Equities remain on the offensive as 9 out of 10 economic sectors trade in positive territory... Energy (+1.6%) - amid industry consolidation and rising oil prices - has paced the way higher while the Telecom Services sector (+0.6%) has also climbed in the wake of M&A news... Technology (+0.7%) has been strong across the board, led by a 1.3% surge in Hardware, while Financial (+0.5%) has also been an influential leader to the upside... Health Care (-0.1%), however, has been under modest pressure due to weakness in drug stocks... NYSE Adv/Dec 1752/675, Nasdaq Adv/Dec 1588/824

[UpInArms]

36. 10:35 EST numbers and blather (pay no attn to that man behind the curtain)

Dow 10,237.29 +79.58 (+0.78%)
Nasdaq 1,946.51 +14.32 (+0.74%)
S&P 500 1,161.85 +9.73 (+0.84%)
10-Yr Bond 4.263 +0.08 (+0.19%)

NYSE Volume 412,583,000
Nasdaq Volume 366,468,000

10:30AM: Buyers show some resolve, as the major indices spike to new session highs following stronger than expected housing data... March existing home sales rose 1.0% to a 6.89 mln annual rate - the third highest level ever - versus forecasts of 6.80 mln and an upwardly revised Feb. figure of 6.82 mln... While home sales have now leveled off over the past six months, the fact that they have held up and are still holding at high levels, has reassured investors that the overall economic picture remains solid and that widespread selling efforts on Friday may have been overdone... NYSE Adv/Dec 2002/836, Nasdaq Adv/Dec 1875/817

(edited for html)

[UpInArms]

40. Treasurys hit by housing data, stocks

Investors eager for inflation clues ahead of FOMC

http://www.marketwatch.com/news/story.asp?guid=%7BF7D08D76%2DC478%2D4C61%2D945C%2DDF01DC77CAB5%7D&siteid=mktw

NEW YORK (MarketWatch) - Treasury prices lost strength in midmorning Monday, pressured by a combination of gains in the equities market and evidence of unexpectedly brisk inflation in the latest monthly existing home sales report.

<snip>

In addition, the Treasury market was rattled by the latest monthly existing home sales data, although this report typically is not especially influential in the bond market, Stiles said.

<snip>

The fixed-income market was perturbed by the fact that the median sales price rose 11.4% year-over-year to $195,000, the biggest gain in 25 years, according to Stiles.

The jump in sales prices hurt Treasury prices because it is an indication of inflation, which eats into the value of bonds.

...more...

[54anickel]

49. "unexpectedly brisk inflation"? Where have these folks been living -

under a rock? Sheesh I get tired of reading about "surprised analysts" and "unexpected inflation".

[UpInArms]

53. IBM up after UBS said it expects major restructuring-watch for huge layoff

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38467.5046872222-834555651&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- Shares of IBM (IBM) rose nearly 2% after UBS said it believed the company would announce a major restructuring within the next few weeks. Analyst Benjamin Reitzes thinks the restructuring, which he feels will announced sometime after IBM's annual meeting on Tuesday and the investor day on June 9, will be similar to one initiated in mid-2002, as the technology hardware company looks to generate about $1 billion in savings. The stock, a component of the Dow industrials, was last up $1.41, or 1.9%, at $75.62 amid a 3 session win streak. Prior to the win streak, however, the stock had lost 21% amid a 14-session losing streak, which culminated in a 2 1/2-year low of $71.85 in intraday trading on Apr. 20. He noted that the stock rallied significantly by year-end after the 2002 plan was announced, after first hitting a multi-year low in October 2002. "Like in 2002, we believe that global services could be a major target of the upcoming program," Reitzes said. "While restructuring should be viewed positively, we would like IBM management to address several key concerns including the impact of the Lenova transaction on revenues in other segments, sustainability of services margins and growth in consulting."

flashing back to 2002

http://www.iseriesnetwork.com/nwn/story.cfm?ID=15158

More Layoffs Expected for IBM

September 09, 2002 — When IBM’s acquisition of PricewaterhouseCooper’s business consulting and technology services unit (PwC Consulting) is all said and done in the next month or two, thousands of IBM employees may find it’s the end of their Big Blue careers, too.

More than 4,000 employees will be laid off as a result of the acquisition, according to speculations of a Wall Street Journal article last week. That would bring total IBM layoffs this year to about 20,000. If true, the rumored layoffs could boost the operating margins of IBM Global Service’s business innovation services unit, which will absorb the PwC Consulting employees, by as much as 12 percent, predicts John Jones, managing director of SoundView Technology Group.

Meanwhile, a Forrester Research report is showing a decrease in the demand for services from both IBM and PwC Consulting. Back in March, 25 percent of companies in the market for services were considering IBM, and another 9 percent were considering PwC Consulting. Those numbers have dropped to mid-year figures of 9 percent considering IBM and 3 percent considering PwC Consulting -- a fact that backs Forrester’s insistence that the majority of services customers don’t want huge, single-vendor, end-to-end services contracts.

...more...

[UpInArms]

55. 12:30 EST numbers and blather (cheery ho!)

Dow 10,245.57 +87.86 (+0.86%)
Nasdaq 1,948.75 +16.56 (+0.86%)
S&P 500 1,161.73 +9.61 (+0.83%)
10-Yr Bond 4.259 +0.04 (+0.09%)

NYSE Volume 860,961,000
Nasdaq Volume 712,534,000

12:00PM: Market holding steady at sharply higher levels midday, as investors embrace M&A news, solid housing data, upbeat analyst actions and the prospects for improved earnings growth... Valero Energy (VLO 77.92 +2.88) has agreed to acquire Premcor (PCO 71.89 +12.89) for $6.9 bln, a deal which directly addresses the need for improved refinery capacity amid rising gasoline prices...

MCI (MCIP 26.75 +0.06) tentatively accepting Qwest's (Q 3.53 -0.02) $9.7 bln takeover bid, a $1.1 bln buyout of DoubleClick (DCLK 8.13 -0.44), a potential $2.5 bln asset sale at General Electric (GE 36.33 +0.23) and reports that former NYSE director Kenneth Langone may make an even higher offer than last week's proposed $3.3 bln merger between the NYSE and Archipelago Holdings (AX 28.55 -1.21) have also helped improve overall sentiment... Meanwhile, March existing home sales rose 1.0% to 6.89 mln (consensus 6.80 mln), versus an upwardly revised Feb. figure of 6.82 mln, reassuring market participants that economic growth remains strong... Further supporting the notion that Friday's sell-off was overdone has been the absence of a N. Korean nuclear test over the weekend...

Also, while the reality that aggregate Q1 EPS growth may now come in closer to 13%, following better than expected earnings from SBC Communications (SBC 2.44 +0.24), renewed buying interest has lifted all ten economic sectors into positive territory... Even though Energy (+1.8%) has been the best performing sector this morning, benefiting from the fifth consecutive day of rising crude oil prices ($55.50/bbl +$0.11) and the pending VLO-PCO deal, Technology and Financial - with gains of more than 1.0% - have been the most influential sectors to the upside...

[54anickel]

57. See, it's again a good day to be holding stocks. They didn't want to

be holding any over the week-end, but by golly today is a good day. Guess everything is still on sale. :eyes:

[RawMaterials]

63. Just remember Buy high and sell Low. .:) n/m

[54anickel]

58. Major Uncertainties:

Last entry in the week's Credit Bubble Bulletin

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

I have never experienced an environment with so many Major Uncertainties. Is the U.S. Bubble Economy slumping or in the midst of an intransigent inflationary boom? Are general inflationary pressures gaining critical mass, or is “deflation” waiting patiently to make its appearance? Will heightened financial stress keep the Fed at bay, or are short-term rates on a methodical march to the much higher levels required to rein in destabilizing mortgage Credit excess? Are historically low long-term U.S. (and global) rates a secular phenomenon, or is the bond market a Bubble of historic proportions? Is the resolute marketplace conviction that the Greenspan Fed would never allow a bond bust precisely the psychology that ensures its inevitability? Are emerging economies – and the global financial system, generally – vulnerable to pneumonia when U.S. markets cough; or have three years of dollar weakness and global reflation buttressed individual Credit systems? Is the dollar poised for the much anticipated rally, or have we witnessed yet another pathetic Dead Cat Bounce? The “reflation trade” and the global pricing environment hang in the balance. Is tumult in Credit default swaps (and auto bonds) the initial manifestation of Acute Financial Fragility, or is it along with attendant equity market weakness just what the system needs to keep the Fed cautious and the mortgage finance liquidity spigot wide open? Have the mushrooming derivatives markets actually dispersed risk and strengthened financial underpinnings, or are they a case of Speculative Bubbles Run Precariously Amok and ready to bust? Is a Chinese currency revaluation – breaking the dollar peg – a step toward rectifying massive global imbalances, or perhaps a blind leap forward with respect to global currency market dislocation and a U.S. inflationary shock?

snip>

Federal Reserve Governor Donald Kohn is an exceptional economist and would be an able replacement for Mr. Greenspan. He spoke this afternoon – “Imbalances in the U.S. Economy” - at the annual Hyman Minsky conference at The Levy Economics Institute of Bard College. In stark contrast to Dr. Bernake, he accurately identifies the Current Account Deficit as “the important imbalance (that) is the large and growing discrepancy between what the United States spends and what it produces.” No nonsense about excess investment and global savings here, thankfully. Yet I was most stuck by the following paragraph from his speech:

“To the extent that current spending behavior is built on realistic expectations--in particular, for future short-term interest rates, the exchange rate, rates of return on capital investments in the United States relative to those abroad, and housing price appreciation--the transition should be relatively orderly: Asset prices should adjust gradually to changing developments, as should the spending patterns of households and firms. But if current expectations are badly distorted, then the way forward may not be so smooth. Eventually, reality always asserts itself over wishful thinking, and such realignments are sometimes abrupt, as illustrated by the collapse of the high-tech bubble a few years ago. In such circumstances, asset prices can adjust sharply, and private spending may also respond quickly, making it difficult for monetary and fiscal policy actions to provide a timely enough counterweight to keep the economy continuously on track. Are expectations substantially distorted?”

While I would articulate the analysis somewhat differently, the gist of what Mr. Kohn is discussing lies at the very heart of current Major Uncertainties and consequent increasingly wild financial market volatility. Is behavior built on “realistic expectations” in relation to sustainable fundamentals, or have excesses and tainted pricing (“Monetary Disorder”) over time completely manhandled expectations and market forces?

I argue that “current expectations are badly distorted.” And that is the inescapable dilemma of asset inflation, leveraged speculation, and resulting asset price Bubbles. The longer they are accommodated, the greater the distortions to market pricing mechanisms and the more confidently price gains are extrapolated. And it is the final extrapolation by the frenzied crowd in the midst of unsustainable “blow-off” excesses that fosters the greatest financial and economic distortions. Pricing, investing, speculating and spending patterns are distorted, creating vulnerability to abrupt changes in perceptions, speculative positions, and spending behavior. Much less apparent – but of vital importance – are distortions to both marketplace liquidity and the perception of ongoing liquidity abundance. It is during the “terminal phase” of excess when speculation and leveraging wildly distort marketplace liquidity and perceptions. Furthermore, the longer this problematic “blow-off” period continues, the greater the gap between current conditions/perceptions of over-liquidity and the unavoidable collapse of liquidity associated with the reversal of speculative bets and the unwind of leveraged positions.

more...

[nolabels]

66. Managing money is different from growing or managing an economy

These people in stocks must surely understand standing knee deep in a river is not swimming. Most salmon inherently know this and don't wait for the river bed to slow to a trickle. Hanging out in a market that is going no where (but probably down) with lots of money sounds too stupid to me.

Growth adjusted to REAL inflation puts the market in a negative per value terms. It's kind of like no wonder that the market floats around in high and low points just on peoples mood swings

[54anickel]

59. Betting on inevitability

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

snip>

An editorial in Sunday’s New York Times, for example, goes on and on about how the recent stock market pull-back is a great buying opportunity. That’s because great stock market returns are inevitable over the long term, and what do you know, stock prices are down some, and PEs are down some, even though the economy is doing great things. (Never mind that Ed’s book says plenty about how long term stock market returns aren’t correlated to GDP.) Author’s conclusion: What we have here is a fire sale on stocks!

The article goes on to indicate that this is a can’t lose situation since stocks have never produced negative returns over any ten year period, except for some glitches in the wake of the 1920s stock market bubble, and that was a long, long time ago.

snip>

Speaking of the myth of the perpetually high PE, another Sunday New York Times article is a reminder that banking on as much might not be such a hot ticket, although that was not the article’s intent. The article’s intent was to assure readers than when the baby boomers start retiring and selling off stocks, all hell isn’t predestined to break loose. The article cites a study that is probably a great read when there isn’t a yard to mow. According to the NYT, the author crunched some stock market data to see if there was any correlation between poor stock market returns and periods where a large percentage of the population was retiring (and theoretically selling stocks). The professor’s conclusion was that there was no strong correlation, but did allow that stock market returns over the next 20 years might be reduced by half a percent or so due to demographics.

This is the sort of study that can make a person who’s allergic to algebraic equations wonder if past correlations of stock market performance and demographics will be relevant when retirees are refueling their RVs with proceeds from their 401(k) plans rather than monthly pension checks. That’s because with defined benefit plans virtually extinct, retirees will have to regularly sell off their 401(k) holdings. And thanks to the Investment Company Institute we know that as of year end 2002, 401(k) participants had 62% of their assets in equities of some sort. A heavy allocation to equities in a vehicle increasingly important to funding retirement, particularly a vehicle that is destined to be liquidated, might make a person wonder if half a percent is too bullish an assumption, rather than too bearish as the NYT suggests.

more...

[54anickel]

61. More retirees pay the bills with reverse mortgages

http://www.boston.com/business/personalfinance/articles/2005/04/25/more_retirees_pay_the_bills_with_reverse_mortgages/

snip>

The number of seniors nationwide who took reverse mortgages in 2004 doubled from the previous year to more than 40,000, according to the US Department of Housing and Urban Development, which insures the loans. California, with nearly a third of the mortgages, ranked first, followed by Florida, Texas, and New York. Massachusetts ranked 11th, with 922 loans last year, up from 612 in 2003.

Under the program, the amount owed can never exceed the value of the house, because only a portion of the equity can be tapped.

Housing and aging specialists say seniors who have watched their homes appreciate in value while their fixed incomes fail to keep pace with rising costs are using money from reverse mortgages to upgrade their lifestyles. Beside paying off bills and taking care of necessary expenses such as prescription drugs, they are spending the money on trips and hobbies.

About 28 million homeowners who are 62 and older are eligible for the loans. The money can be taken as a lump sum, a line of credit, or monthly payments.

Many financial analysts caution that the loan program is not risk free and can be an expensive way to borrow money.

more...

[MARALE]

68. I read this and I get very angry

This is what people do now on SS because it won't pay for everything. Now they want to base the calculations to increase the monthly payments so they will be lower. They are also passing the Paris Hilton Tax Cut. It is not the rich that are taking this type of mortgage, just those that are lucky enough to have a house. Now when they go in a nursing home, they won't have any equity to help them pay. Also, I know many older people don't understand all the repercussions of these type of loans and get taken advantage of. The scams that go on are so numerous and ignored by the government take advantage of older people so often, I really get livid!.

:mad: :mad: :mad: :mad: :mad:
:rant:

[54anickel]

62. Hong Kong's Tsang says case for single Asian currency is 'overwhelming'

http://beta.news.yahoo.com/s/afp/20050423/bs_afp/chinaforumboaoasia_050423173127;_ylt=Ar3f2_8XuNGr5lRYrK_W7zOmOrgF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

snip>

"The case for a single Asian currency is overwhelming," he told a gathering of businesspeople, officials and academics in the south Chinese resort town of Boao, but added: "We must learn to walk before we can run."

"If there is a sense of Asian unity, then a single Asian currency can either facilitate that Asian unity or become a means towards that end. But unfortunately, life is not that simple," he said.

He pointed out that the vast diversity of the Asian economies made it an extremely difficult task to bring about a single currency in the region, but that governments also needed to do more to bring the region together.

"We must first create the conditions for greater free trade in financial services before we can even begin to talk about monetary integration and cooperation," he said.

snip>

Tsang was speaking at the Boao Forum for Asia, an annual economic gathering that Beijing hopes to develop into a regional parallel to the World Economic Forum in Davos, Switzerland.

more...

[54anickel]

65. Original Sin (Roach) - He ain't buying Greenspin's spin

http://www.morganstanley.com/GEFdata/digests/20050425-mon.html#anchor0

In all my years in this business, never before have I seen a central bank attempt to spin the debate as America’s Federal Reserve has over the past six or seven years. From the New Paradigm mantra of the late 1990s to today’s new theories of the current-account adjustment, the US central bank has led the charge in attempting to rewrite conventional macroeconomics and in making an effort to convince market participants of the wisdom of its revisionist theories. The problem is that this recasting of macro is very self-serving. It is a concentrated effort on the part of the Fed to exonerate itself from the Original Sin of failing to address asset bubbles. The result is an ever-deepening moral hazard dilemma that poses grave threats to financial markets.

I am not a believer in conspiracy theories. But the Fed’s behavior since the late 1990s is starting to change my mind. It all began with Alan Greenspan’s worries over “irrational exuberance” on December 5, 1996, when a surging Dow Jones Industrial Average closed at 6437. The subsequent Fed tightening in March 1997 was aimed not only at the asset bubble itself, but at the impacts such excessive appreciation in equity markets were having on the real economy -- consumers and businesses alike. It was a classic example of the Fed playing the role of the tough guy -- the central bank that, to paraphrase the words of former Chairman William McChesney Martin, “takes away the punchbowl just when the party is getting good.” Unfortunately, the tough guys weren’t so tough after all. Predictably, there was a huge outcry on Capitol Hill as the Fed took aim on the US stock market. But rather than stay the course as an independent central bank should, the Fed ran for cover in the face of political criticism. Not only were its initial bubble-containment efforts put aside, but Alan Greenspan went on to champion the notion of a sea-change in the macro climate -- a once-in-a-century productivity miracle that would justify the stock market’s exuberance as rational. That was the Original Sin that has since been compounded in the years that have followed.

Out of that pivotal moment in the late 1990s, a New Economy actually did come into being. But it was not the new economy of ever-accelerating productivity growth that infatuated the New Paradigm Crowd and legions of equity-market speculators. Instead, it was the Asset Economy that enabled consumers and businesses to draw on the pixie dust of a new source of purchasing power -- asset appreciation -- as a means to augment what has since turned into a stunning shortfall of organic domestic income generation.

Unfortunately, the asset-based spending model has given rise to many of the distortions and imbalances evident in the US today. That’s especially true of low saving rates, the housing bubble, high debt loads, and a runaway current account deficit. When the equity bubble burst, asset-dependent American consumers barely skipped a beat. Courtesy of an extraordinary shift to monetary accommodation, the pendulum of asset depreciation quickly swung into property markets; US house-price inflation has since surged to a 25-year high. To the extent that equity extraction from ever-rising property appreciation was viewed as a substitute for organic sources of labor income generation, hard-pressed consumers went deeply into debt to monetize the windfall. As a result, household sector indebtedness surged to nearly 90% of US GDP -- an all-time record and up over 20 percentage points from levels in the mid-1990s when the Asset Economy was born. Secure in the asset-driven spending posture that resulted, consumers saw no need to save the old-fashioned way out of earned labor income. That’s why the personal saving rate has collapsed and currently stands near zero. Asset-based consumption is also at the core of America’s current-account problem. In an income-based accounting framework, the “missing saving” has to come from somewhere. In this case, that “somewhere” is the foreign saver -- giving rise to the current-account and trade deficits required to attract the foreign capital. As a result, the US current-account gap probably exceeded 6.5% of GDP in the first quarter of 2005 -- easily another record and well in excess of the 4% deficit prevailing in the mid-1990s.

more...

[54anickel]

67. The First Sale is Often the Best Sale (Hussman)

http://www.hussmanfunds.com/wmc/wmc050425.htm

The Market Climate for stocks remains characterized by unusually unfavorable valuations and unfavorable market action. Last week, we observed a good example of the kind of “fast, furious, prone-to-failure” advance that often emerges to clear an oversold condition. Given the “shelf” of prior support at about 1160 on the S&P 500, it was fitting that Thursday's explosive rally took the index to 1159.95, before failing on Friday.

Again, this isn't a market where day-to-day fluctuations are likely to provide an enormous amount of information. The current Market Climate – jointly unfavorable valuations and market action – has historically been characterized by negative average returns, but also by relatively high volatility, resulting in a very poor return/risk tradeoff. That also means, by definition, that the range of possible short-term outcomes is likely to be very wide. An unfavorable Market Climate emphatically does not translate into predictable short-term market losses. The small “predictable” component of returns in this Climate – the average daily loss – represents only a few basis points a day. That's a figure that is utterly, absolutely and completely swamped by daily volatility. The same is true for weekly, monthly, and to some extent even quarterly changes. Again, the predictable component of returns, though negative on average in this Climate, is overwhelmed by the volatility.

Historically, the current set of characteristics has occurred less than one-quarter of the time, but has contained nearly every major market plunge of note, including 1929, much of the 1973-74 decline, 1987, and of course the most brutal portions of the 2000-2002 bear market, among many other less notable losses. It would be a mistake for investors to rule out the potential for bad things to happen here. As I noted last week, if a loss of say, 30% on your unhedged stock investments (index funds and the like) would cause unacceptable harm to your financial security, you're probably taking too much risk. It's common to think that it's too late to sell with the market already 6-8% below its highs. On that note, it's a useful reminder that the market was already 14% below its highs before the crashes of 1929 and 1987, which underscores the old saying that “in a bear market, the first sale is usually the best sale.”

Again, that's not a forecast, but be honest with yourself - if you're taking too much market risk, now is a good time to shift your investment position enough that you'll be able to sleep at night regardless of what happens next.

more...

[54anickel]

69. 2:48 and leveling off

Dow 10,237.66 +79.95 (+0.79%)
Nasdaq 1,946.58 +14.39 (+0.74%)
S&P 500 1,160.82 +8.70 (+0.76%)
10-Yr Bond 42.43 -0.12 (-0.28%)
NYSE Volume 1,308,754,000
Nasdaq Volume 1,047,461,000

2:30PM : Stocks continue to trade at improved levels although the recent recovery effort seems to have stalled... While the major indices have enjoyed a respectable relief rally following Friday's jittery sell-off, total volume is running well below the pace of the last several sessions, arguably suggesting less conviction behind today's broad-based move to the upside... Both the NYSE and the Nasdaq have yet to see 1.0 bln shares exchange hands... NYSE Adv/Dec 2238/992, Nasdaq Adv/Dec 1770/1256
2:00PM : Major indices back off their best levels, but buyers remain in control of the action amid spirited leadership from a number of blue chip industry groups... On the Dow, Boeing (BA 59.55 +1.67) has paced the way higher amid a $6.0 bln order from Air Canada while American Express (AXP 50.60 +0.79) has surged ahead of its earnings report tomorrow... Shares of IBM (IBM 74.85 +0.64) have also climbed, recovering some of the 15% lost over the last two weeks, after UBS cited the possibility of a major restructuring...

Of the five components losing ground, General Motors (GM 26.38 -0.36) has paced the way lower after announcing a recall of more than 2 mln vehicles while shares of Merck (MRK 33.99 -0.21) have sold off amid reports that the drug maker overruled a possible Vioxx-related death in 2000...NYSE Adv/Dec 2325/898, Nasdaq Adv/Dec 1848/1170

1:30PM : More of the same for stocks, as the broader averages continue to trade sideways... Recently lifting to new session highs, however, has been Homebuilding... The group continues to display relative strength following a better than expected read on March existing home sales... While the PHLX Housing Sector Index (HGX 466.2) trades roughly 10% below its early March highs (516.7), continued strong demand for housing - as median sales prices ($195K) in March showed the largest gain in 25 years - has helped the index surge 2.3% today...

Notable gainers include HOV (+4.3%), MDC (+4.8%), RYL (+3.9%), SPF (+3.7%) and PHM (+3.2%)...NYSE Adv/Dec 2261/949, Nasdaq Adv/Dec 1828/1156

1:00PM : Stocks still mired in relatively tight trading ranges, showing little reaction to a slide in oil prices to session lows... Crude oil futures ($54.90/bbl -$0.49), which have traded higher all morning ahead of President Bush's meeting with Saudi Crown Prince Abdullah, have recently succumbed to modest profit taking... Last week, the commodity surged more than 6.4% - the largest weekly gain in three months - amid concerns that falling gasoline inventories and refinery outages will continue to drive gas prices higher heading into the summer driving season...

But even in the face of last week's surge in oil, the major indices still posted respectable weekly gains of between 0.7% and 1.3%...

[54anickel]

70. Greenspan's Deficits

http://www.time.com/time/magazine/printout/0,8816,1053652,00.html

After being treated like royalty for presiding over the longest economic boom in the nation's history, Alan Greenspan, 79, might well have expected his final year as Chairman of the Federal Reserve to be one triumphant victory lap. Instead, the man known as Maestro may not even get a standing ovation. The economy is showing signs of slowing growth and oil-fueled inflation, a potentially dire duality. The Dow Jones industrial average, a daily vote on prospects, is filled with undecideds. The volatile Dow plunged early last week and then rallied for its biggest one-day gain in two years, only to retreat again at week's end. Far more certain are the critics who have begun maligning Greenspan's once unimpeachable record of low inflation, low unemployment and strong growth. In the view of that small but increasingly vocal group, the U.S.'s high consumer debt, low personal-savings rates, declining dollar and potential real estate bubble can all be laid at the feet of the Fed Chairman. And those ballooning budget deficits? They are partly the product of George W. Bush's 2001 tax cuts, which Greenspan all but endorsed.

It doesn't help that Greenspan is now caught in the partisan warfare over Social Security privatization and the budget deficit. His credibility is being challenged by the likes of Senate minority leader Harry Reid, who in March called him "one of the biggest political hacks we have here in Washington." Just last week, during a Senate Budget Committee hearing, Greenspan essentially apologized for providing what Senator Paul Sarbanes called "a green light" for the 2001 tax cuts. "If that is the way it was interpreted, I missed it," Greenspan said of his support. "I did not intend it that way."

Even for Greenspan, whose sense of the pulse of the economy is legendary, the current financial environment has to be a source of concern, if not confusion. Although a key index of leading economic indicators fell in March, unemployment claims also dropped, by the biggest number in more than three years. The core index of consumer prices suffered its largest jump in nearly three years, yet the wages of most workers are not keeping pace.

snip>

Not long ago, of course, Greenspan was the one trusted oracle who Wall Street and Washington believed could steer through such choppy waters. After taking over from inflation slayer Paul Volcker in 1987, Greenspan greatly expanded the role and influence of the Fed Chairman, whose principal job is to oversee monetary policy. His economic mission creep included commenting on everything from tax cuts and the housing market to entitlement programs. In 1996 he warned investors of "irrational exuberance," only to turn around and exacerbate the stock market bubble, his critics allege, by becoming a cheerleader for the New Economy. Many Fed watchers believe that by injecting himself--usually at Congress's request--into issues outside his official domain, he could have set a dangerous precedent for his successor, who could be blamed for problems beyond the Fed's control. "If you get someone who is not as good as Greenspan, it can lead to attacks on the Fed," says Frederic Mishkin, an economics professor at Columbia Business School and a former research director at the New York City branch of the Federal Reserve.

snip>

Whoever gets the job obviously has a very tough act to follow, in more ways than one. "In the short term, he did wonders for the U.S. economy, but now we are saddled with the bill," says Ravi Batra, an economist at Southern Methodist University and author of a new polemic, Greenspan's Fraud: How Two Decades of His Policies Have Undermined the Global Economy. That's a harsh verdict... :evilgrin:
more...

[54anickel]

71. African, Asian Leaders Define Scope of New Partnership

http://allafrica.com/stories/200504250689.html

Leaders of Asia and Africa currently meeting in Jakarta have jointly declared that the New Asian-African Strategic partnership (NAASP) that they signed would speed up economic cooperation among them.

According to the details of the document released to newsmen in Jakarta today, the NAASP covers three broad areas of partnership - political solidarity, economic cooperation and socio-cultural relations.

"The partnership also provides a momentum in achieving peace, prosperity and progress" based on, among other principles, the recognition of the diversity between and within their regions and a commitment to open dialogue.

It listed other principles to include their commitment to the promotion of "non-exclusive cooperation based on comparative advantages, equal partnership, common ownership and vision as well as a firm and shared conviction to address common challenge".

more...

[54anickel]

72. Korean nuclear talk escalates as U.S. pushes talks

http://www.usatoday.com/news/world/2005-04-25-korea-nuclear_x.htm

snip>

The South Korean warning came after U.S. media reported over the weekend that Pyongyang might be preparing for its first nuclear test, and North Korea threatened to bolster its "nuclear deterrent."

The North, meanwhile, lashed out at Secretary of State Condoleezza Rice for recently saying that Washington was willing to take the nuclear issue to the United Nations.

"If the United States wants so much to drag the nuclear issue to the U.N. Security Council, it may do so," North Korea's Foreign Ministry spokesman said, according to the North's official Korean Central News Agency. "However, we want to make clear that we will regard sanctions as a declaration of war."

North Korea declared in February that it had nuclear weapons and was boycotting international disarmament talks, which also involve the United States, China, South Korea and Russia. Since then, efforts to get the North back to the bargaining table have foundered.

snip>

Washington, however, is reportedly exploring other options in stopping North Korea from building its alleged arsenal.

The New York Times reported Monday that the Bush administration is debating a plan to seek a U.N. resolution allowing countries to intercept shipments in or out of North Korea that may contain nuclear materials or components.

more...

See what the Wall Street Journal Online started last week?

[54anickel]

76. And the close - we're all gonna be rich I tell ya!

Dow 10,242.47 +84.76 (+0.83%)
Nasdaq 1,950.78 +18.59 (+0.96%)
S&P 500 1,162.10 +9.98 (+0.87%)
10-Yr Bond 4.251% -0.00
NYSE Volume 1,799,770,000
Nasdaq Volume 1,494,317,000


Close: Stocks started strong, amid robust M&A news, encouraging housing data, and the prospects for improved profit growth, and closed near session highs as virtually every sector finished to the upside... While MCI Inc.'s (MCIP 26.65 -0.04) declaration that Qwest's (Q 3.53 -0.02) latest $9.7 bln takeover was superior to Verizon's (VZ 33.91 -0.15) $7.6 bln offer marked today's largest deal, a proposed $6.9 bln bid by Valero Energy (VLO 76.10 +1.06) - the best performing stock on the S&P 500 this year - for Premcor (PCO 70.10 +11.10) arguably provided the bulk of excitement for investors...
After all, the anticipated deal, which will create North America's largest refiner of crude oil, directly addresses one of the biggest issues currently weighing on consumers - the need to improve refinery capacity amid rising gasoline prices...

A $1.1 bln buyout of DoubleClick (DCLK 8.12 -0.45), the potential $2.5 bln sale of General Electric's (GE 36.39 +0.29) self-storage business and reports that former NYSE director Kenneth Langone may negotiate a better deal than the proposed $3.3 bln merger between the NYSE and Archipelago Holdings (AX 28.55 -1.21) also contributed to an improved overall sentiment... Meanwhile, March existing home sales rose 1.0% to 6.89 mln (consensus 6.80 mln) - the third highest level ever - versus an upwardly revised Feb. figure of 6.82 mln, suggesting that the overall economic picture remains solid and that Friday's broad-based selling efforts may have been overdone... Further supporting the notion of an arguably oversold market was the fact that N. Korea did not prepare a nuclear-weapons test over the weekend...

Also providing a floor of support for stocks that helped lift all ten economic sectors into positive territory was the growing reality that aggregate Q1 EPS growth may now check in closer to 13% (about 5% above prior forecasts), following better than expected earnings from SBC Communications (SBC 23.30 +0.10)... Financial (1.3%) paced the way to the upside, led by gains from brokerage firms like Lehman Brothers (LEH 92.85 +2.38) and Morgan Stanley (MWD 51.23 +0.98), which advised VLO and PCO, respectively, on their proposed merger... Also assisted by the pending VLO-PCO combination was Energy (+1.2%), which pared even larger gains as crude oil futures ($54.57/bbl -$0.82) closed near session lows...

The commodity was on pace to close higher for the fifth consecutive session ahead of President Bush's meeting with Saudi Crown Prince Abdullah, but as Saudi Adviser Jubeir said world oil supplies remained adequate and that Saudi Arabia will provide more oil if buyers want it, the commodity reversed overnight gains... Technology (+0.9%) was strong across the board...

CSFB raising its rating on Apple Computer (AAPL 36.98 +1.48) helped Hardware surge 1.6% while Piper Jaffray's upgrade on Ciena (CIEN 1.99 +0.08), not only lifted Networking stocks (+1.5%) but helped CIEN recover some of the 60% in lost value since the stock surpassed $5 a share nearly a year ago to the day... Even Health Care (+0.1%), despite modest weakness in both Biotech and Drug, closed in positive territory... Treasurys, however, closed in lackluster fashion as traders prepared for more influential economic data to provide some upside incentive... The benchmark 10-year note finished flat yielding 4.24%...DJTA +0.9, DJUA +0.9, DOT +1.3, Nasdaq 100 +1.1, Russell 2000 +1.2, SOX +0.5, S&P Midcap 400 +1.3, XOI +1.4, NYSE Adv/Dec 2291/1041, Nasdaq Adv/Dec 1814/1277

Have a great evening everyone :hi: