STOCK MARKET WATCH, Thursday 10 June

[ozymandius]

Thursday June 10, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 228
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 181 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 234 DAYS
WHERE ARE SADDAM'S WMD? - DAY 448
DAYS SINCE ENRON COLLAPSE = 931
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Jeff Skilling
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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

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AT THE CLOSING BELL ON June 9, 2004

Dow... 10,368.44 -64.08 (-0.61%)
Nasdaq... 1,990.61 -32.92 (-1.63%)
S&P 500... 1,131.33 -10.85 (-0.95%)
10-Yr Bond... 4.81% +0.04 (+0.86%)
Gold future... 385.20 -6.60 (-1.68%)


|||


GOLD, EURO, YEN and Dollars

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PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

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[ozymandius]

1. WrapUp by Mike Hartman - Over-Reaction to a Non-Event

Over-Reaction to a Non-Event

The big story for today has to be the sudden strengthening of the U.S. dollar. The market activity throughout the day has been a continuation of the knee-jerk reactions to Alan Greenspan’s comments yesterday. The bond market has been selling-off in anticipation of interest rates moving higher much sooner than expected. Investors are speculating that the Fed’s “measured” rate increases can now mean an increase of 50 basis points rather than the originally expected increases of a quarter-percent at each Fed meeting. The expectation of higher interest rates lit the fuse and the dollar took off like a rocket today closing at 89.7 on the U.S. Dollar Index, a gain of 1.38%. Of the major currencies, the euro took the biggest hit by dropping 1.79% to 1.2023, the yen fell 0.73% to 0.9084 and the Canadian dollar also fell 0.73% to close at 0.7351. I have to sit back and wonder how much the threat of higher interest rates and the subsequent dollar strength has to do with window dressing for the G-8 Summit (a strong display of power) currently underway along with Treasury auctions worth $25 billion today and tomorrow.

After Mr. Greenspan was done talking, the media was out in force saying, “Greenspan says Fed ready to raise rates as warranted” and “U.S. Treasury prices ease on Fed inflation concern” and “Fed ready to do what is required.” Remember they didn’t really DO anything; they just TALKED about doing something should it become necessary. They are moving the market with their words, not their actions, and they have certainly moved the market! The quote I used last week is worth repeating. From the renowned trader, Victor Sperandeo, “The market was head-faked by Alan Greenspan talking about a bias toward higher interest rates…and believes the Fed is creating a purposeful inflation because that is the way to resolve several economic and social conundrums. Until the Fed stops pumping up the money supply (+14% last quarter) the threatened rate increases are camouflage.”

-cut-

Treasuries and Mortgage Rates

The bond market’s over-reaction to the threat of higher interest rates worked to push bond prices lower thereby making the new issue of government debt more attractive to prospective buyers. The U.S. Treasury auctioned $15 billion of five-year notes today and intends to sell an additional $10 billion of 10-year debt tomorrow. The lower prices should help the overall demand for the Treasury auctions. To confirm my theory that words are used to lower Treasury prices before an auction, I will be watching to see bond prices move higher next week with the intended over-reaction out of the way.

-cut-

Employment and Future Employment

In an interview last week Vice President Dick Cheney said the U.S. economy is “in good shape” as the government reported that 248,000 jobs were created last month. The King Report said, “Of the 947,000 jobs counted by the BLS the past three months, 618,000 representing 65% of the ‘job creation’ are due solely to the Birth/Death Rate. Without going into much detail, it has to do with statistically created jobs, not real jobs where people get pay checks. I am wondering if that is part of the reason Alan Greenspan suggested to watch the inflation data more closely than the job numbers. Maybe they have exhausted all the gimmicks possible to create more jobs. At the same time, they just might have another answer.

The Universal National Service Act of 2003

[Media_Lies_Daily]

2. "Statistically created jobs"?? What next?

[Maeve]

3. That looks like a lead-in for the Initial Claims Report

Jobless Claims Increase
NEW YORK (CNN/Money) - Jobless claims rose last week, the government said Thursday, with the number of people filing for initial unemployment benefits above Wall Street expectations.
The Labor Department report showed 352,000 filed for first-time benefits in the week ended June 5, compared with a revised 340,000 the previous week.
<more>

For the record, last week's report was only revised up 1,000. And the expectation for this week was 335K.
Again, these numbers are within the "norm" for job turnover(over 400K is a contracting job market)

Not around much today--have a contractor coming to give an estimate on some work and a meeting with my editor later.

[54anickel]

42. Hmmm, sort of a new fancy-schmancy draft coming about? That should

help the UE numbers. There has been all that talk lately about young folks loosing thier summer jobs to laid-off workers. Those pending bills in front of Congress might help put those youngsters to "work".

Scary stuff going on. Do you feel a draft?

[54anickel]

4. Fed Will at Least Double Rate Target This Year, Bond Firms Say

http://quote.bloomberg.com/apps/news?pid=10000103&sid=a7i14oxMLjqY&refer=us

June 10 (Bloomberg) -- The Federal Reserve will at least double its 1 percent interest-rate target for overnight loans between banks by year-end, a majority of economists at Wall Street's largest bond-trading firms said.

The addition of 1.2 million jobs this year, at a monthly average of 316,000 since March, has some economists doubting the central bank can keep its May 4 pledge to raise interest rates at a ``measured'' pace without risking faster inflation.

``You're going to see `measured' disappear from their rhetoric within the next few months,'' said Larry Kantor, 51, head of economics and market strategy in New York at Barclays Capital Inc. and a former Fed economist. ``The Fed actually needs to slow things down.''

snip>

After the fastest five-month period of job growth since 2000, the 10-year U.S. Treasury note's yield reached 4.84 percent yesterday, up from 3.65 percent three months ago. The yield is a base for corporate bond and residential mortgage rates. The two- year note's yield, which is more sensitive to changes in monetary policy, rose to 2.80 percent yesterday, the highest since July 2002.

more...

[ozymandius]

5. Stocks Edge Higher on Unemployment Report

My alternate headline: Stocks Edge Higher as Chronically Unemployed Lose Benefits, Statistical Significance

NEW YORK - A steady unemployment picture cheered investors, sending stocks slightly higher in early trading Thursday.

A slight rise in first-time unemployment claims did not alarm Wall Street, given that claims are still far lower than a year ago, and the number of people currently receiving unemployment insurance is at a three-year low.

The news was enough for Wall Street to resume buying after Wednesday's selloff, prompted by concerns over the Federal Reserve (news - web sites)'s interest rate policy.

story

[ozymandius]

6. Jobless Claims Rise Unexpectedly

WASHINGTON (Reuters) - The number of Americans filing initial claims for jobless aid rose unexpectedly last week, government data showed on Thursday, and the rolling average rose to its highest level since late April.

-cut-

Wall Street analysts had forecast a fall in claims to 335,000 from a revised 340,000 the previous week. This was originally reported as 339,000.

story

This dovetails nicely with the story about "statistically created jobs" through the birth and death rates.

[54anickel]

7. The Dollar Is Probably Nearing Its Peak

http://www.thestreet.com/_tscana/markets/rebeccabyrne/10165384.html

When the Federal Reserve raises interest rates, the U.S. dollar usually rallies. But this time around, some analysts say, that's not likely to happen.

In fact, they believe the greenback will weaken over the next six months after a generally strong performance year to date. For investors, this is a double-edged sword, resulting in potentially stronger earnings but also higher inflation.

While rising interest rates are positive for the dollar, many analysts believe that the currency market has fully priced in a 25-basis-point hike in June. J.P. Morgan chief currency strategist Tohru Sasaki said the dollar is already reflecting a federal funds rate of 2.25% by year-end. The funds rate is currently at 1%.

Since the start of the year, the U.S. dollar index has climbed 3.3% as expectations for a rate hike have increased. The dollar usually climbs when rates go up, because higher interest rates make U.S. bonds more attractive to overseas investors. In order to buy these bonds, foreigners have to buy dollars and sell their own currency.

In recent days, the greenback has popped higher after Fed Chief Alan Greenspan said the central bank was "prepared to do what is required" to keep inflation low. Still, the U.S. dollar index is down about 2.4% from its high on May 13.

Michael Hartnett, global macro strategist at Merrill Lynch, said he expects the dollar to fall between 5% and 10% over the next six to 10 months, in part because he believes it is factoring in too much tightening.

snip>

So what does all this mean for investors? Joe Cooper, research manager at Thomson First Call, said a 10% decline in the dollar from current levels could add about 2 percentage points to corporate earnings. In the first three months of this year, the dollar was well below levels recorded in the first quarter of 2003, adding just over 3 percentage points to corporate profits, he said.

snip>

He added that a renewed downtrend in the dollar could prompt Asian central banks to buy more Treasuries in order to halt an unwanted appreciation in their currencies. This would send bond prices higher and yields lower.

Although analysts say inflows probably moderated in April, the government's $15 billion auction of five-year notes on Wednesday drew an impressive 56% participation from indirect bidders, which are a proxy for central banks. This was far greater than the average 35% from previous auctions, according to Laidi.

more...

:wtf: Just which central banks would that be? Is Bernanke in that buy back mode again?

[UpInArms]

22. that article pretty much spells out the disaster of this

mal-administration's fiscal policies:

"The bottom line for us is ... we don't think the Fed will or the economy will withstand aggressive rate hikes over the next six to 12 months, and that's what's priced in," he said. "Once those expectations are disappointed, some of the strength we saw in the first half of the year will be unwound."

and

Analysts also note that despite a fall in the dollar over the past two years, the current account deficit, which is the trade gap plus incoming and outgoing debt payments, remains extremely wide. In order to correct this imbalance, a further drop in the dollar might be necessary. A drop in the dollar tends to boost exports and reduce imports over time. The April trade deficit, which will be released Monday, is expected to be the second-widest on record, as high energy prices boosted the value of imports.

It also appears that the "economists" are expecting the BoJ to continue to intervene. Fools.

Why would "investors" want our devalued and devaluing dollar assets when the rest of the world is doing this:

http://www.accountancyage.com/News/1137364

Bank pushes up rates to 4.5%

The Bank of England's monetary policy committee today voted to raise interest rates by a quarter percentage point to 4.5%.

Link: Bank pushes up interest rates

As widely predicted by economists, the quarter point rise is the monetary policy committee's fourth increase since November last year.

Analysts predict rates could rise to 5% by the end of the year.

The move will mean that millions of homeowners face higher mortgage bills from today if lenders pass on the full hike in rates.

Despite the monetary policy committee's gradualist approach, economists suspect that booming house prices are a major factor in the decision.

But in a statement from the BoE, the decision was put down to inflationary pressures.

...more...

and our "bank" is doing this:

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5393440

Fed adds reserves through four-day system repos

NEW YORK, June 10 (Reuters) - The Federal Reserve said on Thursday it added temporary reserves to the banking system through four-day system repurchase agreements.

Earlier, the Fed added $8.0 billion in temporary reserves to the system through 14-day system repurchase agreements.

The Fed funds rate was trading at 1.0 percent, the Fed's target for the rate, at the time of the operation.

Further details of the operations are available at: http://www.ny.frb.org/markets/omo/dmm/temp.cfm

[54anickel]

8. Gold Maven Unbowed by Fed Speak

http://www.thestreet.com/markets/aarontaskfree/10165400.html

For investors frazzled by the recent decline in gold and related shares, John Hathaway, portfolio manager for Tocqueville Asset Management, has some encouraging words. Chief among them: Don't fear the Federal Reserve, a particularly contrarian viewpoint these days.

"The correction is over," Hathaway declared Tuesday at the Denver Gold Group's San Francisco gold forum. "I see clear sailing -- new highs this year."

Hathaway, who manages about $700 million in gold-related assets, including the Tocqueville Gold fund, referred to a roughly 25% drop in gold shares since early December, as measured by the Amex Gold Bugs Index, and the yellow metal's apparent double top this spring at just under $430 per ounce. (Full disclosure: I am long Hathaway's fund, which is down 16.5% year to date but up 35.2% in the past three years and 25.2% in the past five.)

Ironically, his comments came on the same day Alan Greenspan said the Fed is "prepared to do what is required" to restrain inflation, and prior to Wednesday's declines amid concerns about the potential for more aggressive Fed tightening.

snip>

Not coincidentally, equities (particularly higher beta names), gold and speculative assets such as high-yield bonds have struggled this year as the Fed has gradually changed its public stance from concern about deflation to worry about inflationary pressures. If the Fed is going to actively combat inflation, rather than try to foster it, gold (and financial assets) become less attractive.

But the often painful unwinding of such leveraged bets gives the Fed too much credit, according to Hathaway, who views the central bank as feckless to aggressively combat inflation and dishonest about its intentions to do so.

"Now that inflation is knocking on the door, the Fed has been forced to blow the whistle," Hathaway opined in a report accompanying his presentation. "However, it cannot go beyond issuing warnings without sabotaging investors and borrowers alike."

Furthermore, "the only way to deal with entitlements is to devalue those claims in real terms" via a weaker dollar, he said, declaring the Fed's rhetoric about defending the dollar an empty promise. The greenback's recent advance, which accelerated Wednesday, is a "countertrend rally" in a long-term bear market, according to the fund manager.

Faulty Measures, Faulty Policy

more...

[CaptainClark23]

11. Frazzled investors?

I wonder if buyers of physical PM's are considered to be "investors" as well? I imagine the only PM investors who are frazzled are those that tried to jump on PM as a short profit turn. Which, to me, is a patently stupid reason to invest in PM's in the first place.

The underlying reasons for sitting on a supply of physical PM's is just as valid and sound now as they were when prices were peaking not so long ago.

Has anyone here who was buying PM's during the climb stopped buying? If so, why?

[54anickel]

40. Should read frazzled speculators, IMHO...

I don't believe physical buyers fall into the same category as the investor group. They are the same types that were chasing big wins in the tech bubble days - going for easy money.

Physical buyers are more like collectors, hoaders if you will.

Sort of like buying art, you believe it will appreciate but not betting the farm on it. You know it will always have some value, since it's real & tangible. I like to watch for the blue-light specials to hit.

Sort of like buying insurance, you hope to hell you don't need to claim on it, but know you'll get more than those monthly premiums back in return should the SHTF.

[54anickel]

9. Plunge in govt bond price signals Tokyo policy dilemma

http://business-times.asia1.com.sg/sub/premiumstory/0,4574,119263,00.html?


JAPANESE government bond prices plunged yesterday after revised data showed that the nation's economic growth was revised up to 1.5 per cent in real terms for the first quarter, or an annualised rate of 6.1 per cent.

This is the eighth consecutive quarter of expansion for the economy.

The bond market move, which drove yields to their highest in three-and-a-half years, underlined the serious dilemma facing Japanese authorities as economic recovery appears to gain ground.

snip>

Until a few months ago, the yield had languished for a long time at around 0.5 per cent, which allowed the government to be comfortable even with its massive and still rising burden of outstanding debt which is now equal to around 150 per cent of GDP.

But with long term rates trending up rapidly - JGB yields have risen by 30 basis points over the past 10 days alone - fears of a financing crunch for the government are mounting.

As a result, the BoJ is expected not just to delay ending its current easy money policy but to steer away even from the slightest hint of any future pre-emptive monetary tightening.

The Japanese central bank is anxious to avoid doing anything that could exacerbate inflation expectations and drive interests and JGB yield up even higher as this could mean that the BoJ becomes a 'buyer of last resort' of government bonds.

more...

[TrogL]

10. You should have heard the paen to Raygun on the CBC this morning

I just about threw up.

Near as I could understand, Raygun's contribution to the economy was as a cheerleader to mutual funds. Not a word about supply-side economics - hmmm.

Apparently the stock market went up 100+ points in celebration of Raygun's life. Seems to me more like "the wicked witch is dead".

[54anickel]

12. Here's one of those "Way out there" type of articles to get the right side

of the brain cooking. I loved the final paragraph!

http://www.gold-eagle.com/editorials_04/bloom060904.html

snip>

The picture above recently came to my attention as the first of the apparently random occurrences to which I referred above. It appeared in a book that I happened to be reading, entitled "The Mayan Calendar and the Transformation of Consciousness", by Carl Johan Calleman, PhD, Bear & Co, 2004; at page 46, and it got me thinking.

The author of the book was putting forward the argument that the planet Earth is essentially an organism, and it may be thought of in terms of the model of the human brain. I have long held the former view, but this latter argument came as a new thought to me. Calleman was putting forward the view that the Western hemisphere of the planet has evolved - since the emergence of the industrial revolution in around 1755 - to become the overwhelmingly dominant hemisphere. He was also arguing that the logically oriented "West" has acquired such dominance that it has started to stifle the natural thought processes of those who inhabit the intuitively oriented (if you'll excuse the expression) Eastern hemisphere of the planet, and it is essentially this dominance which is causing a backlash that, in turn, has been causing the disharmony that we are now witnessing in the form of terrorism and conflicts that have been emerging with increasing frequency from/with the Middle East and other Islamic countries.

In simplistic terms his argument was that the organism pulsates with a rhythm that causes an ebb and flow of energy from East to West and back again, and that the timing of the rhythm of the pulse is measurable by an exceptionally accurate measuring device known as the Mayan Calendar.

snip>

As everyone knows, the "cycles" of life are influenced by Circadian and Gregorian rhythms that are, in turn, a function of the way our solar system is put together. The earth turns on its axis once every twenty four hours, the moon waxes and wanes in a lunar cycle of 30 days or so, and the seasons emerge like clockwork in a manner that is predictable in terms of the Gregorian calendar of roughly 365 days a year.

It is this "observability" that is so compelling, and using these observable facts as a point of departure, Economists and Sociologists have tried to "fit" behavioural cycles into models that are defined in terms of our solar system model. For example, the Kodrat'eff Long Wave repeats every 55-60 years.

But, asked Calleman, what if? What if the "real" ryhthm is not a function of the way the solar system is constructed but rather of some other Universal energy pulse?

snip>

But the above would explain why the Dow is rising even though there is no underlying value. Our brains are turning into scrambled eggs.

[loudsue]

15. Great post, Nickel....

I love the studies of the Mayan calendar.....it's incredibly accurate on so many dimensions.

Also....I wanted to thank you for posting the closing #'s for yesterday when you got back in!

All you Marketeers are ....well, you guys are the best! Thanks! :yourock:

:kick::kick::kick:

[54anickel]

18. Actually, UIA posted the closing #s for yesterday. I simply checked in

rather late to check them out myself.

On behalf of all the Marketeers, thanks for the praise. We all try to do our part to post articles in an attempt to figure out what this feckless mal-admin is up to these days.

[KoKo]

19. A very interesting read. I think some folks in "MR" Forum here would like

it, as they are very interested in Mayan Calendar and Right Brain operations and the implications for our Earth Society.! "Scrambled Eggs" is about right for now. :D

[54anickel]

13. RUSSELL ON GREENSPAN

http://www.gold-eagle.com/gold_digest_04/russell060904.html

snip>

Here Are the Hopes -- The UN says OK to the US's sovereignty plan for Iraq. The "hope" -- the administration hopes that the US can get the hell out of Iraq by election time -- and hopefully before.

Greenspan babbles that he's ready to hike interest rates at a faster than expected rate if inflation flares up. As usual, Greenspan talks the talk -- but he "hopes" he doesn't have to walk the walk, which would mean doing any rapid boosting of interest rates. In fact, Greenspan hopes that he won't have to boost rates at all (however, the market's forcing his hand).

Nevertheless, the market isn't listening to Greenie. It's upping short rates on its own, as shown in this chart of the 91-day T-bill. Ah well, markets will be markets, and they go where they want -- without the permission of the Fed or anyone else.

At this point, I view the world economy as an inflated balloon that is slowly losing air. This is dangerously deflationary. Every central bank in the world is fighting the deflationary forces. They're fighting deflation through the wholesale production of paper money.

The Question is -- can corporations and individuals work off their debt, can they get their "balance sheets" in order while the world economies are still is good shape -- or is the air going to "whoosh" out of the global balloon too fast for the central banks to control -- and is the world going to sink into recession?

This is the question which the stock market is now struggling with. The widely-followed S&P recovered exactly 50 percent of its bear market losses, and now the S&P is perched literally "on the edge." Can the S&P move up above the 50% level -- or is this "it," is this the best that the S&P can do? If so, after an extended period of wiggling and waffling (which has been the case so far in 2004) is the S&P and the rest of the market going to head down again?

Probably everything I write for the rest of this year will, one way or another, deal with this question. Are the forces of world deflation going to win out? Or can the central banks keep the balloon inflated -- or at least deflating slowly?

more...

[54anickel]

14. Money Matters & Gold

A bit "gold-buggy" but makes some more interesting points on the money supply growth that has been a hot topic the past couple of months.

http://www.gold-eagle.com/editorials_04/schmidt060904.html

snip>

The investment world seems willing to accept an increase in interest rates by the Federal Reserve when the Board meets later this month. In large part the reason for this attitude is that the Federal Reserve is expected to take a moderate approach to the process of raising rates. Translating these thoughts and Federal Reserve policy announcements is rather easy. The Federal Reserve is going to do little to change the rate of increase in the U.S. money supply.

Monetary economics is really a rather simple subject. If the central bank, the Federal Reserve, allows the money supply to increase faster than the production of goods and service increases, prices will rise. If a country has more money than goods, the prices of those goods will go up. The same is true for the price of Gold in that country's currency.

snip>

The historical pattern of the U.S. money supply is probably somewhat different than many would have expected. In the middle of the 1990's the U.S. money supply peaked, and then fell. The money supply did not recover till the new century arrived. Many forces contributed to this pattern. In part the collapse of the Japanese banks was a factor in this development.

The consequences of fewer dollars existing meant that the value of dollars went up and inflation fell.

In the late 1990s the U.S. money supply bottomed. As is apparent from the graph, the money supply has been growing since then. In the past couple of years the rate of growth in the U.S. money supply has been accelerating...

snip>

As an aid in justifying the growth rates used in this graph we have included one more graph on the growth rate of M-1. As you can see, the Federal Reserve has adopted policies creating some of the highest growth rates experienced in about a decade. Second, policy has been a little erratic. As the monetarists say, monetary instability leads to economic instability.

Recently Chairman Greenspan has suggested that the Federal Reserve's actions would be "measured" but prepared to act against any signs of inflation. Only when the economy seems to be expanding does it tend to have this view. One gets the impression that the Fed is ready to change its stripes to spots on a moment's notice. We doubt that.

The Federal Reserve ignored the price action during the Stock Market Bubble and has ignored the dangerous repercussions of the current Housing Bubble. Clearly the signs are pointing toward a higher level of price inflation as measured by the Fed's favorite index of the day. Will the Federal Reserve put the Housing Bubble at risk, or simply find another favorite measure on which to focus?

Should the Federal Reserve actually act like a real central bank by pushing interest rates higher, the Housing Bubble will collapse. With plummeting housings prices and mortgage default rates skyrocketing, what will be the Fed's response? What will be the response of foreign exchange markets when the U.S. plunges into a near bottomless recession under collapsing housing prices?

more...

[UpInArms]

16. daily dollar watch (better late than never :)

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

Last trade 89.30 Change -0.43 (-0.48%)

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1086877031-9e32d306-28234

U.S. import prices up 1.6% on higher oil prices

WASHINGTON (AFX) - Driven by higher oil prices, prices of imports to the United States jumped 1.6 percent in May, the biggest increase in 16 months, the Labor Department estimated Thursday

Prices of imports are up 7 percent in the past 12 months, the fastest year- over-year gain since February 2003

Prices of exports rose 0.3 percent in May and are up 4.3 percent in the past year, the biggest gain in 10 years. The government had been encouraging a weaker dollar for most of the past year to help exporters and fight the threat of deflation. A weaker dollar boosts the competitiveness of U.S. exports, allowing producers to raise their prices in dollar terms while keeping them constant in local currencies

The weaker dollar also boosts the prices of imports, unless foreign producers were willing to cut prices measured in their own currencies. The ensuing imported inflation was an explicit goal of the Federal Reserve

Bond prices were little changed on the data. The yield on the benchmark 10- year note remained at 4.82 percent. See

"This report provides further evidence that core inflation pressures are building due to the weaker dollar," said John Ryding, chief market economist for Bear Stearns. The rise in import prices "bears close watching, as it has the potential to add to the existing price pressures that seem to be increasingly catching the Fed's attention these days," said Anthony Karydakis, chief economist for Banc One Capital Markets

"With the real trade weighted dollar now little changed on a year-over-year basis, it appears as if the acceleration in core import prices has probably just about run its course," said Joshua Shapiro, chief economist for MFR

Petroleum was the big story in May, with the price of imports rising 10.3 percent, the largest gain in 16 months. Natural gas prices rose 4.9 percent

Excluding petroleum, import prices rose a more modest 0.4 percent in May and 3 percent over the year, the fastest growth in nine years

Sharply higher prices were seen in industrial materials and supplies, especially building materials such as steel and lumber, but prices of imported finished capital and consumer goods barely budged

Excluding fuels, imported industrial materials and supplies prices rose 1.8 percent in May, including an 8.7 percent rise in steel and iron prices. Chemical prices fell

With fuel prices soaring, prices of imports from Canada rose 1.6 percent while imports from Latin American increased 1.9 percent

Prices of imports from Japan rose 0.2 percent, bringing the year-over-year gain to 1.4 percent, the most in four years

Imports from the European Union were unchanged, but the year-over-year gain was 6.4 percent, the most in nine years

On the export side, agricultural export prices 0.5 percent, putting the year- over-year change at 20.9 percent. Exports excluding agricultural products rose 0.2 percent. Prices of exported capital goods, autos and consumer goods were unchanged.

...more...

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1086874286-9e32d306-26391

Yen's rise vs dollar supported by U.S. jobless claims

CHICAGO (AFX) -- The yen's strength vs. the dollar and other key currency rivals continued Thursday, with the Japanese currency boosted by gains in Japan's stock market and signs of improvement in Japan's economy. The yen was up 0.8 percent on the dollar at 109.39 yen per dollar after the U.S. government reported a rise in jobless claims to 352,000 for the four weeks ending June 5.

...more...

[UpInArms]

17. In Pivotal Case, Bush Backs Off Rule That Eased Phone Line Fees

http://www.nytimes.com/2004/06/10/business/10PHON.html?ex=1087444800&?en=4e7155c0a048e491&?ei=5062&?partner=GOOGLE

WASHINGTON, June 9 — In a move that critics say could lead to higher telephone rates, the Bush administration on Wednesday sided with the four regional Bell companies in a court case over the fees they charge their rivals for access to their networks.

The administration's decision, which could affect the phone bills of nearly 50 million customers across the country, was a significant policy reversal in a case making its way to the Supreme Court.

Justices are being asked to review an appeals court decision that struck down a set of regulations requiring the Bell companies — Verizon, SBC Communications, BellSouth and Qwest Communications — to make their networks available to rivals at heavy discounts. The appeals court decision will take effect next week unless the Supreme Court intervenes.

The solicitor general, on instructions from the White House, dropped out of the case on Wednesday after unsuccessfully trying to defend the regulations in the appeals court. The decision substantially reduces the chances that the Supreme Court will accept the appeal, particularly because the Federal Communications Commission, which had been pressured by the administration, also reversed course and said it had decided not to pursue an appeal either.

Both sides in the matter agree that if the Supreme Court does not alter the appeals decision, a central element of the landmark Telecommunications Act of 1996 will effectively be repealed. The act requires the Bell companies, which have long been criticized for holding near- monopoly positions in local markets, to make valuable pieces of their networks available at low rates to both small and large rivals, enabling them to offer cheaper service than they otherwise might.

...more...

[54anickel]

21. WTF? We've become a nation of the people, by the lobbiest, for the

mega-corporations!

The mal-admin extolls the virtues of increased productivity due to tech advances and lower wages due to competition in the labor market, but heaven forbid these same "virtues" effect the incomes of mega-corporations!

It is a matter of debate how much the decision will affect phone rates in a rapidly changing market where prices have fallen sharply in recent years, in part because of increased competition but also because of new technology that allows cheaper phone service.

And you just gotta love this line:

The administration's announcement followed fierce lobbying and aggressive tactics; each side has raised millions of dollars in campaign contributions for the president and the Republican Party. Before the decision, rivals of the Bells said they had told the administration that if it did not side with them in the dispute they intended to run television advertisements in swing political states accusing the White House of being responsible for higher telephone rates. For their part, the Bell companies pledged not to raise rates before the election in November.

Then there's the carrot at the end of the stick, with the old trust us to do the "right" thing:

The regional Bell companies, which for years have fought in the courts and Congress to repeal the rules, said that the elimination of what they consider an onerous pricing structure will prompt them to pour additional capital investments into their networks, which could improve service and extend it to underserved areas.

"In addition, we have offered our wholesale customers an opportunity to lock in today's rates until the end of the year and set stable rates through 2007 by negotiating and signing a new long-term agreement with us," said Herschel Abbott, a top lobbyist at BellSouth.

[UpInArms]

23. it gets even better!

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5394470

FCC Chief to Draft New Phone Share Rules

WASHINGTON (Reuters) - U.S. Federal Communications Commission Chairman Michael Powell said on Thursday he plans to draft new rules for leasing access to the four local telephone carriers' networks after the Bush administration said it would not defend old regulations.

The administration on Wednesday said it would not challenge an appeals court ruling that struck down FCC rules that forced the big local carriers, known as the Baby Bells, to lease access to their networks at government-set rates.

"We will begin immediately," Powell told reporters after the agency's monthly open meeting. "I'm quite optimistic with the new guidance and understanding what our limits are, we'll be relatively expeditious at this."

Michael (I don't have an understanding of "public service") Powell - son of the misbegotten My Lai cover-up Staff Officer Powell - the lying scumbag family patriarch - is going to suckerpunch the common good one more time.

[54anickel]

25. Sort of looks like a set up from the get-go to re-write the regulations -

That might explain this rather confusing part (confusing to me anyway) in the first article. So, who's on first? Who's the good cop/bad cop? Seems like a big farce and game to me.

Government officials and industry executives with close ties to the administration said that President Bush received sharply conflicting advice from his aides on the issue. They said that senior White House economic advisers had urged Mr. Bush to drop the case because the local markets were adequately competitive, while the political advisers, including Karl Rove, had recommended that the administration file an appeal to the Supreme Court.

A few hours after the announcement, the F.C.C. indicated that it would not appeal the decision either. In March, three of its five commissioners said that they would vote to instruct the agency's general counsel to file an appeal with the Supreme Court.

But the lone Republican in the majority, Kevin J. Martin, issued a statement late Wednesday afternoon saying he had changed his mind.

"Because the solicitor general decided not to support the F.C.C.'s appeal, I no longer support appealing the D.C. Circuit's decision," Mr. Martin said.

Mr. Martin, a Republican who is a former White House official and whose wife works for Vice President Dick Cheney, did not return a telephone call Wednesday seeking comment....

[UpInArms]

27. imho (worth what you pay for it :)

it appears that the political Rove was goosing for public support (showing that they would fight the higher rates that would come from not appealing the case) and that was what the media would trumpet - dimson would "do" the right thing by working for the consumer - now that they have "dropped" the appeal, both through the Solicitor General and the FCC - and rates won't go up until after the election in November - the short attention span of the public will not notice that they have been sabotaged once again and the FCC can continue to fail to be the government watchdog agency that it is supposed to be.

[54anickel]

29. Excellent analysis! As usual. Thanks!

[KoKo]

50. Sorry to interject a personal note, but Michael and Colin remind me of

the relationship between Poppy and Shrub. Both fathers and sons have some disturbed parasitical relationship where the son inherited the worst of the Father who was himself lacking in any moral values.

Michael Powell and the McClellan Boys (FCC and Press Spokesman) and their Dad who writes the Repug books are another example of this incestuous destructive nepotistic mal-Administration! :nuke:

(sorry about that...no self control...Reagan stress)

[UpInArms]

51. another nasty father and son set

is Irving Kristol and William Kristol

the sins of the father are magnified in the son

:puke:

(interject with your personal views at any time!)

[54anickel]

54. Thanks for pointing that out KoKo and UIA. I seem to overlook just

how much nepotism there is in this mal-admin. Perhaps if we look further back nto the family trees we'd find a lot of in-breeding as well. THAT would go far in explaining a lot. :evilgrin:

[UpInArms]

20. Market Numbers and blather at 12:15 EST

Dow 10,388.60 +20.16 (+0.19%)
Nasdaq 1,993.98 +3.37 (+0.17%)
S&P 500 1,134.31 +2.98 (+0.26%)
10-Yr Bond 4.830% +0.018

12:00PM: Choppy trade for the major averages, which opened higher, but haven't managed to make much headway one way or another... The favorable bias is a reversal of yesterday's losses that ranged 0.6-1.6% for the major averages, supported by generally favorable corporate commentary, which included FedEx (FDX 76.31 +0.30), Procter & Gamble (PG 110.15 - 0.61), and Cree (CREE 20.13 +0.10) raising or confirming guidance...

Despite the market's ability to maintain its standing in positive territory, gains have been limited by the Nasdaq's failure to lift above the psychologically-significant 2000 mark in a convincing fashion... Weighing on the Nasdaq is the biotech sector, which continues to decline in the aftermath of the ASCO... Other laggards of note include the iron & steel, casino & gaming, and airline sectors... Among the leaders to the upside are gold, oil services, and coal groups... As expected, volume levels are rather unimpressive ahead of tomorrow's day off in remembrance of former President Reagan... This morning's economic reports included the Export Prices (ex-agriculture) and Import Prices (ex-oil) reports, which rose 0.3% and 1.6%, respectively...

The Initial Claims report came in at 352K (consensus 335K), but continuous claims dropped 106K... Elsewhere, the bond market remains on the defensive, as participants continue to look for a sooner and greater rate hike than previously anticipated on the heels of Fed Chairman Greenspan's and other Fed presidents' comments... Currently, the 10-year note is down 4/32, bringing its yield up to 4.82%...

[54anickel]

24. U.S. Treasury Notes Decline; May Import-Price Index Surges 1.6%

http://quote.bloomberg.com/apps/news?pid=10000103&sid=aiIwV45yGQbA&refer=us

June 10 (Bloomberg) -- U.S. Treasury notes dropped after an index measuring prices of goods imported to the U.S. rose more than forecast in May, adding to concerns about faster inflation.

Federal Reserve Chairman Alan Greenspan led central bank officials this week in signaling the Fed is prepared to increase its target interest rate at a faster than ``measured'' to keep consumer prices from rising too fast and stalling the economic recovery. Inflation erodes the value of fixed-income payments.

``Fed officials have put the markets on guard for higher inflation,'' said Martin Mitchell, head of government bond trading at Legg Mason Wood Walker Inc. in Baltimore. ``The market is starting to reading into the commentary that they may be more aggressive later in the year.''

snip>

Debt Auction

Declines in Treasuries comes before the government auctions $10 billion more of 10-year notes today that it first issued last month. Its sale of $15 billion of five-year notes yesterday garnered a yield of 4.01 percent, the highest since May 2002. Bids are due by 1 p.m., New York time.

snip>

More Inflation

Next week, investors will get more readings on inflation when the government releases its index of producer and consumer prices. Both likely rose in may for a sixth straight month, according to the median estimate of economists polled by Bloomberg News.

Consumer prices minus food and energy were 1.8 percent higher in April than a year ago, the biggest year-over-year increase since January 2003, the Labor Department said last month.

Thomas Hoenig, presidet of the Kansas City Fed said last night that while he's ``not worried about inflation at 1.8 percent'' and ``inflation numbers remain very modest,'' he ``wouldn't want to see them rise consistently above 2 percent.''

Hoenig votes on monetary policy.

[54anickel]

26. Fed adds reserves through four-day system repos (Again)

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5393440

NEW YORK, June 10 (Reuters) - The Federal Reserve said on Thursday it added temporary reserves to the banking system through four-day system repurchase agreements.

Earlier, the Fed added $8.0 billion in temporary reserves to the system through 14-day system repurchase agreements.


So, what does that make for the month so far? Glad you asked!

http://www.321gold.com/fed/temp_bank_res.html

After all, there was a slight drop in the debt yesterday. Gotta keep priming that pump! :evilgrin:

http://www.publicdebt.treas.gov/opd/opdpenny.htm

[UpInArms]

28. shades of Harken at Swift

http://www.fool.com/News/mft/2004/mft04061007.htm

Shifty Trades at Swift

Late last month (May 25, to be exact) shares of regional trucking firm Swift Transportation (Nasdaq: SWFT) jumped 20% after the company issued a press release that dramatically lifted second-quarter earnings guidance and outlined plans for an extended $40-million stock buyback. I covered the story, noting among other things, CEO Jerry Moyes' purchase of a large block of Swift stock during the quarter.

Thanks to the open dialogue and exchange of ideas we enjoy here at the Fool, it wasn't long before a reader pointed out the suspicious timing of Moyes' purchase (more on this later) in relation to the formal announcement. I've never been one to implicate somebody without due cause, and wrote the timing off as a circumstantial, isolated incident. Unfortunately, new evidence has surfaced that has all the earmarks of being incriminating.

Swift has a "blackout period" that prevents insiders from trading company stock up to three weeks before a scheduled quarterly earnings release. Apparently, the policy does not apply to mere earnings revisions. Swift's board met on May 20. According to an SEC filing, Moyes then purchased 187,000 shares between May 21 and May 24. You'll recall the press release raising guidance and the subsequent 20% rise in Swift's stock occurred on May 25. Moyes' profit on these trades (excluding 7,000 purchased on May 19 that were omitted from the SEC filing) was well in excess of half a million dollars. It gets worse.

Earlier in the year, Moyes made a similar move with the purchase of 150,000 shares on March 22. Within 24 hours, Swift announced significant progress toward its $100-million stock repurchase commitment (the company had purchased 3.5 million shares for $65 million) lifting the stock enough to generate a $132,000 gain for Moyes. It still gets worse.

...more...

[54anickel]

30. Surely just a coincidence!!!

:puke: :grr: :nuke:

[54anickel]

31. Household Wealth Reaches Record $45.153 Trillion

See, it's all in how you define "Wealth". We are all on Easy Street now! Ya-hoo!!!

http://biz.yahoo.com/rb/040610/economy_fed_debt_2.html

WASHINGTON (Reuters) - U.S. household wealth grew to a record-high $45.153 trillion in the first quarter of 2004, boosted by rising real estate and mutual fund values, the Federal Reserve said on Thursday.

In its quarterly "Flow of Funds" report, the Fed said household balance sheets rose $665.5 billion over an upwardly revised $44.488 trillion figure for the fourth quarter of 2003, despite a dip in the value of corporate equities. The net worth data is not adjusted for seasonal variations.

Total U.S. borrowing, excluding the financial sector, rose at a seasonally adjusted 8.6 percent annual rate in the first quarter, up from a revised 6.4 percent rise in 2003's final quarter.

The Fed said the pickup in domestic nonfinancial debt mainly reflected faster borrowing by the household sector as well as federal, state and local governments.

bit more...

[UpInArms]

32. Market Numbers and blather at 1:07 EST

Dow 10,389.37 +20.93 (+0.20%)
Nasdaq 1,991.58 +0.97 (+0.05%)
S&P 500 1,133.84 +2.51 (+0.22%)
10-Yr Bond 4.830% +0.018

1:00PM: Little changed since the last update, the major averages continue to vacillate in roughly the same ranges in which they have spent the entirety of the session thus far... Encouragingly, the market has been able to maintain its standing in positive territory... However, more of its sectors are trading with slight losses, rather than slight gains now... To that effect, the internet, semiconductor, disk drive, REIT, drug, transportation, consumer staples and broker/dealer sectors are among the groups posting losses...

Notable, the biotech sector has come off its worst levels of the session and is now down only 0.3%, as indicated by the BTK index...NYSE Adv/Dec 1755/1363, Nasdaq Adv/Dec 1507/1427

12:30PM: The major averages stick to the same trading ranges in which they have spent the bulk of the session thus far... Accordingly, while managing to maintain their standing in positive territory, the major averages' gains are only mild... In contrast to recent actions, the market is not particularly sensitive to movements in crude oil... To that effect, stocks are maintaining their gains, despite the 2.0% in the price of crude oil to $38.30/bbl... The oil services sector, for its part, is among the session's leaders to the upside...

This morning, UBS reported more upbeat tones than anticipated from the recent Global Oil & Gas Conference, particularly in regard to activity levels and pricing in the near-term... The firm upgrades SLB, NBR, NE, SII, BJS, ESV to Buy from Neutral...NYSE Adv/Dec 1720/ 1348, Nasdaq Adv/Dec 1496/1391

[54anickel]

33. Straight Talk from Greenspan

http://business.newsfactor.com/story.xhtml?story_id=24525

Federal Reserve Chairman Alan Greenspan stuck to his recent script in a presentation before the International Monetary Conference in London on June 8. In prepared remarks, he reiterated the central bank's current mantra of "measured" interest rate hikes based on the current economic outlook. So far, so good.

But then came a hawkish bolt from the blue: The chief went on to say that if the Fed's inflation forecast is wrong -- as in, too low -- policymakers "will do what is required to achieve price stability."

snip>

After his small shocker, the Fed chairman went on to address the potential impact of higher rates on the housing sector. Greenspan sees little risk of any secondary concussions from the mortgage-debt market, which has "largely adjusted" to the prospect of rate increases. He indicated he doesn't foresee any financial grenades going off in the mortgage sector as rates continue to rise, and that he remains comfortable with the positive outlook on the housing sector.

During the panel discussion in London, the chairman struck a slightly more-confident tone on the overall prognosis for inflation than he did during his prepared remarks. He noted that globalization, competition and productivity have helped dampen price pressures -- macro trends he expects to remain in place. In contrast, he warned that protectionism would have the opposite effect.

snip>

He also responded that the short-run impact on monetary policy from the budget deficit was "benign," but that the long-term effects were due to the retiring baby-boom generation -- a considerable concern from 2015 and beyond.

snip>

Second, Greenspan referred to the unwinding of "carry trades" -- popular leveraged trades in the bond market, in which speculators borrow at short-term rates to invest in longer-dated, higher-yielding bonds. The trade is quite profitable until short-term rates begin to rise. The Fed chief seemed to be signaling in an unusually public fashion that he's paying attention to this activity.

Greenspan can be quite direct when he wants to be.... :eyes:

[UpInArms]

34. Stocks Rise on Earnings Anticipation

http://biz.yahoo.com/rb/040610/markets_stocks_7.html

NEW YORK (Reuters) - U.S. stocks rose on Thursday, as investors set aside worries about budding inflation and a looming interest hike and embraced a positive forecast from Fedex Corp. (NYSE:FDX - News), which bolstered anticipation of a strong earnings season.

<snip>

However, two economic reports before the open stirred worries about the economy.

U.S. jobless claims rose unexpectedly last week, while import prices rose more than anticipated in May as oil costs surged, the government said.

The jump in import prices added to fears that the Federal Reserve, which is expected to raise interest rates at a meeting June 30, will have to act more aggressively than expected.

<snip>

"The (weekly) jobless claims number doesn't carry as much weight as before, since everyone is now more focused on the monthly payrolls report," said Owen Fitzpatrick, managing director at Deutsche Bank Private Wealth Management.

<snip>

First-time jobless claims rose 12,000 to 352,000, defying forecasts of a decline to 335,000 from a revised 340,000 the previous week. The four-week moving average of filings, which provides a better picture of underlying trends, rose 4,750 to 346,000, the highest level since April.

...more...

[54anickel]

35. Everything is too expensive now

http://afr.com/articles/2004/06/09/1086749779976.html

Risk has its price, and the price is rising. Thanks to lax monetary policy in the US, blind orangutans could have managed money last year but investors and companies are ill-prepared for the emerging risks.

Here is one well-aired but nevertheless astonishing statistic: 92per cent of the stocks in the S&P500 index rose last year. That was the biggest percentage of gainers in any year since 1980, which is as far back as S&P goes.

The riskiest - the most indebted, most vulnerable companies - paid off the best.

That was fun. It was like the best of the '80s and '90s, rolled into one: junk bonds and tech stocks boomed. Treasuries rose and commodities skyrocketed. Wall Street was cool again.

But too much capital is chasing too few good ideas. It isn't just stocks. There is no asset class that now looks attractive: mainstream stocks, small-cap stocks, treasuries, corporate bonds, junk bonds, real estate, cash, emerging-market assets, commodities all are either expensive or yield little.

snip>

"It's an all-asset mild bubble, instead of one super-bubble," said Cliff Asness, managing principal at AQR Capital Management, a money management firm with $US11.5 billion ($16.4 billion) under management.

snip>

If the world truly becomes a less-volatile place, then levering up to turn a small, safe return into a larger one is rational. It would be nice to think the markets have taken into account all the changes that a new Fed posture will wreak.

But such an assumption is, well, risky.

[KoKo]

46. Now if I had just been into "war profiteering" I could have made some $$$

11:18AM CACI Intl rejects lawsuit as 'slanderous' and 'malicious' (CAI) 37.87 -0.69: -- Update -- In reaction to lawsuit filed by Bew York-based human rights group co states: "CACI rejects and denies the allegations of the suit as being a malicious recitation of false statements and intentional distortions. CACI does not have and has never had any agreement with Titan Corp or anyone else pertaining to conspiring with the government, or to perpetrate abuses of any kind on anyone. CACI has never entered into a conspiracy with the government,or anyone else, to perpetrate abuses of any kind.... The company has not, nor have any of its employees, been charged with any wrongdoing or illegal acts relating to any work in Iraq. The lawsuit filed against CACI falsely alleges that CACI had contracts for interrogation work in Guantanamo Bay, Cuba. Similarly, named defendant John Israel is not, and has never been, an employee of CACI. These falsehoods and inaccuracies simply demonstrate the utter lack of investigation prior to filing suit by the entities ultimately behind this lawsuit... In light of the frivolous and malicious nature of this lawsuit, as well as the apparent lack of any pre-filing investigation of the facts, the company stated it is examining its options for sanctions against the lawyers who participated in the filing of this lawsuit".

[UpInArms]

48. check out that spike in early 2002!

Wowie Zowie!

[KoKo]

53. hmmm and did you notice they went public in 2000. Interesting isn't it?

:eyes: What was that old song? "An-ti-ci-pation..."

[KoKo]

55. Actually that chart mirrors Bush's War Mongering now that I look at it for

awhile, it's fascinating. September 11th...UN Discussions, It bounces around on War Sentiment as it works it's way up. It even has a "euphoric split!" This would have been a good one to buy if you had the Prescott Bush mindframe.

[UpInArms]

61. looks like that first real move upward

was when dickboy was shaking his thang at DPNK in March 2001 - remember when he castigated SK for its "Sunshine Policy" and called Kim Jong Il a "pigmy"?

[KoKo]

65. Does lead one to believe "THEY KNEW" doesn't it.....interesting.

Well, I'll leave this off now. :D What's that old expression "The Charts don't lie."

[54anickel]

67. ARRRRRRRRRRRGH! to both of you!!! You bring back so many

things about the boy king that I have forgotten about. That pygmy comment, and all this war profiteering crap.

Damn it, I want my country back!

[54anickel]

56. ARRRRRRGH!

[UpInArms]

36. Rockville facility continues layoffs

http://www.tribstar.com/articles/2004/06/10/news/news04.txt

Rockville residents already are noticing a difference.

"We've already seen a decline in sales," said Tari Stewart, assistant manager at the retail store Pamida.

Stewart expects the drop in sales to continue in the town of 2,700 if the jobs at Saia-Burgess aren't replaced.

Saia-Burgess, an employer of about 115, has faced declining business in the last few years. It began laying off workers last week and will continue the layoffs until the plant's expected closing in July, employees say.

The factory, formerly a Dormeyer facility, is a parts manufacturer for the automotive, industrial and building markets.

<snip>

"For a community this size to absorb a loss like this, I don't think we'll ever recover," he said.

Stewart said many employed at the company live in the immediate community.

...more...

[UpInArms]

37. Foreign outsourcing costs 4,633 jobs

http://cbs.marketwatch.com/news/story.asp?guid=%7B65859158-B0EA-4852-B7C2-7AF68657E0F8%7D&siteid=google&dist=google

In its first-ever estimate of outsourcing, the Labor Department said moving jobs overseas accounted for about 2.5 percent of the 182,456 workers who lost their jobs for longer than a month for nonseasonal factors in the first three months of the year.

Moving jobs within the United States accounted for 9,985 layoffs, or 5.5 percent of nonseasonal mass layoffs.

About two-thirds of the jobs moved were in the manufacturing sector. Manufacturing accounted for about one fourth of all mass layoffs.

Seventy-six percent of the jobs moved stayed in the same company, although 36 percent of jobs moved overseas were with a different company.

<snip>

The department's mass layoff data covers companies that had more than 50 workers filing for unemployment benefits for a month or more. The data don't measure outsourcing at smaller companies or outsourcing that did not involve mass layoffs.

Outsourcing became a hot political issue in February after White House economic adviser Greg Mankiw said outsourcing was just another form of foreign trade that tended to increase U.S. living standards.

...more...

[54anickel]

38. Thousands rally for pay, pensions across Russia

Ain't progress grand....

http://story.news.yahoo.com/news?tmpl=story&cid=1518&ncid=1518&e=1&u=/afp/20040610/bs_afp/russia_social_demo_040610075637

MOSCOW (AFP) - Thousands of Russians took to the streets across the vast country to condemn controversial social reforms that were launched by President Vladimir Putin (news - web sites) and now see his government facing discontent.

snip>

It was a rare display of resistance in an era dominated by overwhelming support for Putin's policies and was meant to coincide with a government decision on how pensioners and others who receive help from the state are to be compensated.

The old system was dominated by subsidies -- from free travel on public transport to low prices on medicines. The new program would see this system done away with and replaced by higher single monetary payments.

snip>

One of the largest protests was held in the central region of Yekaterinburg in which 500 people showed for an early morning rally up before quietly dispursing and going back to work.

The protests came against the backdrop of a week-long hunger strike by mine workers in Russia's southern Rostov region that has spread and now includes up to 66 people demanding more than a year of back pay.

They also hit several government buildings in Moscow -- including the parliament building and the government White House where nearly 1,500 banner-waving protesters demanded better treatment of doctors, teachers and pensioners alike.

"Poverty stricken doctors are a disgrace for Russia," one banner read.

Another demanded that "salaries for doctors be doubled by January 2005."

Scary in a way, isn't it? They'd rather turn down cold hard cash for actual services? How "Un-American". Perhaps they are predicting the declining value of the currency? :shrug:

[54anickel]

39. A silver lining in home appliances

Might be a bit off for SMW, but cool technology!

http://www.manilatimes.net/national/2004/jun/05/yehey/life/20040605lif1.html

THAT old chestnut about silver being a potent weapon against monsters has just received a 21st Century update.

Samsung’s new line of home appliances uses nano-sized silver ions—positively charged silver particles 75,000 times smaller than the width of a human hair—to zap disease-causing molds, germs and bacteria. Not only does the nano size (nanotechnology deals with atomic particles measured in billionths of a meter) allow the silver ions to easily penetrate the cells of microorganisms, but the positive charge increases surface area and draws negatively charged elements toward them to greater effect.

This “Silver Nano” technology is available in four Samsung’s home appliances launched last week: the HA-1435A washing machine, the AS-24S6GB air conditioner, and two side-by-side refrigerators, namely the stainless steel RS-23JGRS and the mirror finish RS-21DLMR.

The nano-sized silver ions are used to coat refrigerator interiors, air-conditioner filters and washing machine tubs. The silver coating keeps food fresh 15 days longer than average and makes the refrigerator resistant to odor-causing bacteria. Air-conditioner filters treated with silver ions stop the growth of fungi and bacteria inside the air-conditioner, as well as reduce the presence of bacteria in the air within five minutes of operation. In washing machine tubs, meanwhile, the silver ion coating kills bacteria and fungi in soiled laundry.

more...

[KoKo]

62. PM investing in Silver might get a boost from something like this. And,

I have a friend who worked with a Canadian Mining company a few years ago in developing a "silver impregnated" wound dressing for burn patients. What was great about is that the silver did stop bacteria from growing in wounds and for burn patients who have horrific problems with infections this product worked incredibly well. It also cut the amount of anti-biotics patients had to take for the recurring infections and would be valuable for use in other medical products.

Unfortunately mis-management and the stock market bubble caused the company to struggle and they couldn't get enough funding to get it on the market in US. I think it was sold off and is only being sold in small markets.

But think of the possibilities for silver use in cases where antibiotics
are seeing limited effectiveness because of overuse. My friend said silver has been used since ancient times because of the "anti-germ" properties. One of those things we forget about in our high tech world.

[54anickel]

66. Interesting, thanks KoKo. I didn't realize it was so beneficial in the

medical field. Too bad the company didn't make it. Perhaps the pharmacueticals that have big bucks in anti-biotics did not want to see this ancient remedy revived. Bad for profits ya know.

[54anickel]

41. 2:15 numbers - Not really worth a look aside from the blather

Dow 10,386.61 +18.17 (+0.18%)
Nasdaq 1,993.27 +2.66 (+0.13%)
S&P 500 1,133.75 +2.42 (+0.21%)
10-yr Bond 4.811% -0.001
30-yr Bond 5.479% -0.007

2:00PM: Watching paint dry would arguably be more exciting than following today's market, as the major averages continue to trend sideways in the same trading ranges in which they have been in through the entirety of the session... The blue-chip averages are continuing to outperform the Nasdaq on a relative basis, although their gains are only mild... As anticipated, volume levels leave a lot to be desired, particularly on the Nasdaq, where they're at their lowest level this week... Breadth figures are mixed...
On the NYSE, advancers and up volume are outpacing decliners and down volume by a small degree... On the Nasdaq, the opposite is true... The ratio of new 52-week highs to lows remains disappointing, with 38 and 33 new highs on the NYSE and Nasdaq, respectively, juxtaposed with 17 and 36 new lows...NYSE Adv/Dec 1665/1477, Nasdaq Adv/Dec 1445/1524

1:30PM: Buyers and sellers alike have been happy enough to leave the market alone... Accordingly, the major averages are drifting sideways, not making much headway in either direction... The bond market is also little changed, with the 10-year note down 2/32, bringing its yield up to 4.82%... Kansas City Fed President Thomas Hoenig said yesterday that the central bank would act decisively if needed, although he also said he saw current rise in core CPI as temporary...

Given Fed Chairman Greenspan's comments on Tuesday that the Fed is prepared to do what it takes, participants have continued to worry about a sooner and bigger rate hike than previously anticipated... To that effect, federal funds futures are now predicting a 22% likelihood of a 50 basis points hike at the June 30 meeting, up from yesterday's 19% probability...

[54anickel]

43. Exchange Sets a Record for Overnight Futures Trading

For what it's worth....What do you suppose it was all about? :shrug:

NEW YORK, N.Y., June 9, 2004 — An overnight record of 54,913 energy and metals futures contracts traded on the New York Mercantile Exchange ACCESS® electronic trading platform last night, exceeding the previous record of 52,812 contracts traded during the May 10 session.

The only time more volume traded on NYMEX ACCESS® was during the two–hour special daytime session on September 14, 2001, when 69,790 contracts were traded, the first time the market was open after the September 11 attack on the World Trade Center.

[UpInArms]

44. Market Numbers and blather at 3:11 EST

Dow 10,384.90 +16.46 (+0.16%)
Nasdaq 1,993.68 +3.07 (+0.15%)
S&P 500 1,133.86 +2.53 (+0.22%)
10-Yr Bond 4.795% -0.017

3:00PM: Buyers and sellers alike remain a hesitant bunch, as the major averages continue to trade with only slight losses... The Dow is underperforming the S&P 500 and the Nasdaq on a relative basis, although only fractionally so... In the Dow, 20 of its 30 components are trading in positive territory, with leaders to the upside including 3M (MMM 86.14 +0.73), General Motors (GM 48.01 +0.67), and ExxonMobile (XOM 44.06 +0.61)... The biggest laggards of note are Coca-Cola (KO 51.37 -0.39), American Intl Group (AIG 73.00 -0.38), and Procter & Gamble (PG 110.43 -0.33)...

PG is struggling despite saying it was comfortable with analysts' increased Q4 guidance of $0.97 (penny above guidance)... Contributing to the sell-off are comments by JP Morgan suggesting the company has limited upside over the next several quarters...NYSE Adv/Dec 1764/1424, Nasdaq Adv/Dec 1529/1508

2:30PM: More of the same, with the major averages drifting sideways... The airline sector, which has been quite volatile in the past week, is among the few groups posting losses in excess of 1.0% today... Specifically, the group is down 3.3%, as indicated by the XAL index... The group tends to trade in an inverse relationship to the price of crude oil and today's 2.2% increase to $38.35/bbl is playing its part in the sector's pullback... Also contributing is negative analyst commentary...

With respect to the latter, JP Morgan cut estimates for Frontier Airlines (FRNT 9.49 -0.21) well below the consensus, while saying that industry fundamentals no longer support profits... JetBlue (JBLU 27.10 -0.91) is lower despite announcing the launch of its 2 daily nonstop flights from New York City's JFK to the Dominican Republic...

[54anickel]

45. 3:13 numbers & blather

Dow 10,389.94 +21.50 (+0.21%)
Nasdaq 1,994.93 +4.32 (+0.22%)
S&P 500 1,134.33 +3.00 (+0.27%)
10-yr Bond 4.793% -0.019
30-yr Bond 5.465% -0.021

NYSE Volume 922,079,000
Nasdaq Volume 1,010,747,000

3:00PM: Buyers and sellers alike remain a hesitant bunch, as the major averages continue to trade with only slight losses... The Dow is underperforming the S&P 500 and the Nasdaq on a relative basis, although only fractionally so... In the Dow, 20 of its 30 components are trading in positive territory, with leaders to the upside including 3M (MMM 86.14 +0.73), General Motors (GM 48.01 +0.67), and ExxonMobile (XOM 44.06 +0.61)... The biggest laggards of note are Coca-Cola (KO 51.37 -0.39), American Intl Group (AIG 73.00 -0.38), and Procter & Gamble (PG 110.43 -0.33)...
PG is struggling despite saying it was comfortable with analysts' increased Q4 guidance of $0.97 (penny above guidance)... Contributing to the sell-off are comments by JP Morgan suggesting the company has limited upside over the next several quarters...NYSE Adv/Dec 1764/1424, Nasdaq Adv/Dec 1529/1508

2:30PM: More of the same, with the major averages drifting sideways... The airline sector, which has been quite volatile in the past week, is among the few groups posting losses in excess of 1.0% today... Specifically, the group is down 3.3%, as indicated by the XAL index... The group tends to trade in an inverse relationship to the price of crude oil and today's 2.2% increase to $38.35/bbl is playing its part in the sector's pullback... Also contributing is negative analyst commentary...

With respect to the latter, JP Morgan cut estimates for Frontier Airlines (FRNT 9.49 -0.21) well below the consensus, while saying that industry fundamentals no longer support profits... JetBlue (JBLU 27.10 -0.91) is lower despite announcing the launch of its 2 daily nonstop flights from New York City's JFK to the Dominican Republic...

[UpInArms]

47. Fed Banking on Anti-Inflation Reputation

http://www.reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=5395554

WASHINGTON (Reuters) - The Federal Reserve is hoping its inflation-fighting credibility keeps expectations of future inflation at bay long enough to see if a recent price surge is temporary, analysts and Fed officials say.

Tough talk from Fed chief Alan Greenspan this week was seen partly as an effort to keep a self-fulfilling inflationary psychology from taking root.

By tamping down expectations of growing price pressures, Greenspan's vow on Tuesday to "do what is required" to keep inflation in check could buy Fed officials time to see if price gains subside after a surprise acceleration, as they expect.

Inflation worries alone can put upward pressure on costs by fueling worker wage demands and encouraging businesses to raise prices.

"They want to make sure people don't expect a significant and long-lasting acceleration in inflation," said Stephen Stanley, chief economist at RBS Greenwich Capital Markets. "Greenspan wants to get out ahead of that psychology."

The core Consumer Price Index, which removes volatile food and energy prices, has risen at a 3 percent annual pace since the start of the year, a big pickup from last year's 38-year low 1.1 percent gain.

<snip>

"If inflation expectations become unanchored, that's a sign that credibility isn't what it should be," Fed Governor Ben Bernanke told Reuters in a recent interview. "All else being equal, that would mean the Fed would have to be more aggressive in order to restore that asset."

<snip>

"By explaining to people their analysis of what is most likely -- and also by underscoring their awareness of the possibility of being wrong and their willingness to respond to surprises -- they are hoping to create a more constructive expectational environment," Prell said.

Some economists think the Fed is wrong on the outlook for inflation and say the central bank will likely need a less-measured tack on rate rises than officials now think.

"I think ultimately you can talk until you're blue in the face," Stanley said. "What really matters is action."

...more...

Anchors Away!

[54anickel]

52. Oh, puh-leeez!!!

Fed credibility - somewhat of an oxymoron isn't it?

By tamping down expectations of growing price pressures, Greenspan's vow on Tuesday to "do what is required" to keep inflation in check could buy Fed officials time to see if price gains subside after a surprise acceleration, as they expect.

Ya think? Sure it's temporary, yet they've been priming the money supply like there's no tomorrow, seems when they stop priming the pump, everything starts to slow waaaay down. They have no choice but to continue the "re-flation" policies these days. Meantime, they make matters worse by putting out rosy reports (lies and fudged numbers) of a recovering economy in a feckless attempt to get the boy king re-elected.

Well just which is it, Al? Is the economy humming along on the recovery track? If so, why all the pump priming?

You know, I just don't think the Fed would be so reckless with the priming if they believed their own lies for one second that the economy is in recovery mode. It's taking all they've got to get enough inflation going to keep this economy's head above the waterline of that deflation whirlpool just waiting to suck us all in.

Sorry, seems my complete frustration and anger at these idiots is boiling over. Edited for clarity of my ranting. My God, I'm starting to sound like that Mogambo nut!

[54anickel]

49. Making Sure Your Money Lasts

I find these types of articles rather depressing. Ah, yeah, like I'm going to have a $700,000 nest egg. Maybe if I was younger and had 40+ years to save up....Love the part where they tell you to figure in the $$$ from selling your home. :eyes:

http://planning.yahoo.com/egg7.html

The key question for most retirees is, "Will my money last as long as I do?" This table from Taking Charge of Your Retirement, by Deena Katz, will help you with the answer by showing you how long a pool of assets will last depending on the earnings rate of the pool and how much you withdraw each year. The table assumes that your initial withdrawal increases each year to keep up with an inflation rate of 3%, the historical average.
Here is how to get ready to use the table:

Calculate your annual income shortfall. Begin by adding up annual expenses. The table does not take taxes into account, so factor them in by adding the estimated amount you'll owe -- on interest, dividends and taxable withdrawals from retirement plans -- to your expenses.

Now subtract social security and pension benefits and other steady income you receive. A married couple can combine data. (If you're still on the job, estimate what you'll receive when you retire.) The difference is your shortfall.

Add up your nest egg. This is the total you have (or expect to have) in IRAs and Keogh, 401(k) and other company plans. Add any other savings designated for retirement, including any cash you expect to pocket if you sell the family home.

more, along with a handy little chart.....

[KoKo]

58. Be glad that "experience" gives us the edge to realize how faulty these

little charts can be when a "Rogue Administration" takes over the financial markets and knocks the rosy predicitions down in a street fight. :-(

These things are good as a guide in stable times...and if you are 20 something...but after that reality sets in. Unfortunately reality today is wondering how one can hold onto one's pocket change, imho.

[54anickel]

69. Yep, they always base them on that assumption of a 6 - 7% rate of

return. Wasn't there something posted earlier this week or last week that charted the real rate of return on stocks have been pretty stinking low to negative? Then there's the old "any 10 year period" the rate of return has averaged 10% - but you've got to sort of pick the right beginning and end to that 10 year period. And suppose you just happen to be one of the lucky duckies that retired just before the big bust?

[UpInArms]

57. U.S. posts $62.47 bln budget deficit in May

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5395872

WASHINGTON, June 10 (Reuters) - The U.S. government posted a narrower shortfall between receipts and outlays of $62.47 billion in the month of May, but remains on track for a record annual deficit, the Treasury Department said on Thursday.

The May deficit, reported in Treasury's monthly budget statement, was well below the $88.87 billion budget gap seen in May 2003.

It was also smaller than the $67.50 billion expected by Wall Street. The nonpartisan Congressional Budget Office had estimated a $65 billion budget deficit for May.

In its monthly budget review, the CBO attributed the smaller May gap to calendar differences that affected the timing of both receipts and outlays in the month.

The United States remains on track for a record annual deficit in fiscal 2004, which ends Sept. 30. The cumulative budget gap so far this budget year reached $344.32 billion in May, up from $290.93 billion in the first eight months of fiscal 2003.

The final 2003 deficit, $374.25 billion, was the largest on record.

While the budget gap has been a political vulnerability for the Bush administration, Treasury Secretary John Snow has been saying the situation is improving.

"With a growing, expanding economy the government gets more tax receipts and we're seeing that borne out in the numbers right now," he said in a interview with the C-SPAN television network on Wednesday.

Treasury said the government took in $501.98 billion in individual income taxes so far this budget year, $15.84 billion less than in the first eight months of fiscal 2003. Corporate income taxes, however, were sharply higher, at $96.03 billion compared to $65.50 billion in the same period last year.

...a bit more...

and a two-fer!

http://www.govexec.com/dailyfed/0604/060704cdpm2.htm

Budget deficit up $56 billion over last year

The Cungressional Budget Office has reported that budget deficit estimates totaled about $347 billion for the first eight months of fiscal 2004, which is $56 billion more than the deficit reported for the same time period last year.

The reason for the increase, CBO said late last week, was that while revenues have increased by about 2 percent, outlays have increased by 6 percent. Revenues increased by about $24 billion; outlays increased by $80 billion.

Corporate income tax receipts were up about $30 billion, while social insurance taxes were higher by about $12 billion than over the same period last year. Individual income tax receipts were down about $16 billion.

In May, the deficit was about $65 billion, or $24 billion less than last May's deficit. Tax receipts were about $10 billion higher than last May because refunds were about $10 billion lower, CBO reported -- primarily because refunds are mostly reported on Fridays and this May had one fewer Friday than last year.

...a bit more...

[UpInArms]

59. Phone Rates Going UP!! article: Network charges spark warning

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1086445578881

US long distance telephone carriers warned on Thursday they may be forced to raise consumer prices or withdraw from local phone services after the US government decided not to challenge a ruling freeing local phone companies to charge higher rates for access to their local networks.

The decision may also hasten the deployment and adoption of consumer broadband voice over IP (VoIP) services, posing a new threat to local phone companies that are already seeing their local line revenues eroded by wireless services.

On Wednesday, the solicitor general decided not to appeal against a lower court ruling, siding with four regional phone companies after their eight-year battle with long distance rivals.

Under rules authorised by Congress in 1996 that were designed to foster competition, local phone companies were forced to lease access to their networks to rivals at discounted rates set by the Federal Communications Commission.

Those rules, dubbed unbundled network element provisions, or UNEp, were struck down for the third time in March by a district court judge at the behest of the local phone companies.

...more...

Wow! That was fast!

[54anickel]

63. Heh-heh!

Don't want to pass up that dime by wastin' time.
Make hay while the sunshines.
A stitch in time saves nine.
Can't be lettin' the grass grow under their feet, ya know.

[UpInArms]

60. Outsourcing Causes 9 Pct. of U.S. Layoffs - Govt.

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5395803

WASHINGTON (Reuters) - The bulk of outsourced jobs never leave U.S. shores, the government said on Thursday in a new report suggesting concerns over American workers losing jobs to cheaper foreign labor may be exaggerated.

Nine percent of non-seasonal U.S. layoffs in the first quarter were due to outsourcing, but less than a third of the work was sent overseas, the U.S. Labor Department said in releasing new figures on mass layoffs and outsourcing.

"In more than seven out of 10 cases, the work activities were reassigned to places elsewhere in the U.S.," the Bureau of Labor Statistics said in its report on mass layoffs for the January-to-March period.

<snip>

However, the report showed outsourcing had a huge impact on whether work sites were permanently shut-down or just temporarily closed. Fifty-one percent of mass layoffs caused by outsourcing were permanent closures of the work site, compared to just 17 percent of total layoffs.

...more...

[54anickel]

71. See, nothing to worry about. Lou Dobbs is just a worry-wart!!! /sarcasm

Like I'm just gonna take this "new" report from the gubberment as the gospel truth?

So, are they moving to lower wage southern states with weaker unions, possibly more illegal immigrant workers, lower corporate taxes, what?

[54anickel]

64. Stewart seeks new trial

I say go for it girl, whatcha got to loose. Grasso is still off the hook.

http://money.cnn.com/2004/06/10/news/newsmakers/martha_trial/

NEW YORK (CNN/Money) - Martha Stewart Thursday asked a federal judge for a new trial, citing charges that a key government witness lied on the stand.

The request comes about a month before Stewart and her ex-broker at Merrill Lynch are to be sentenced for lying about a well-timed stock sale by Stewart in late 2001.

The motion follows perjury charges filed late last month against Larry Stewart, a U.S. Secret Service laboratory director, accusing him of falsely testifying that he carried out tests on a key document in the trial. Martha and Larry Stewart are not related.

In their motion for a new trial, Martha Stewart's lawyers called it "sadly ironic" that the recent perjury charges against Larry Stewart prompted their request.

They noted this was the second time they've asked for a new trial which, they argue, "conclusively demonstrates that the trial process was marred by dishonesty and perjury."

more...

[KoKo]

68. I had "Free Martha, America's Grandma" in my signature line here on DU

for awhile. It didn't seem to go over very well.

When one thinks of the Crime, Corruption, Greed, Lies, Manipulation, Robbery which has gone on in our financial markets, Martha is such a miniscule particle it boggles the mind that she couldn't get a new trial.

And, the Chimp himself did worse with his Arbusto/Harken whatever the hell the names of his shell companies were, and no one says a word.

Martha was a Democrat. Says it all.

[54anickel]

70. Yep, I hear ya. I'm not one for giving folks a get out of jail card, but

come on, until there is some consistency in the judicial system on how these "criminals" are treated she deserves a re-trial. Seemed they were out to make an example out of her to the petty criminal. Meanwhile the real crooks buy their way out with just a slap on the wrist or get selected to serve as Resident of the USofA.

[54anickel]

72. Hmmm, that 8 billion 14 day repurchase earlier wasn't quite enough

so the Fed just added a bit more

http://www.321gold.com/fed/temp_bank_res.html

3.500 billion on a 4 day and another .200 billion tacked on thru the daily securities lending.

[UpInArms]

73. Closing Numbers and blather

Dow 10,410.10 +41.66 (+0.40%)
Nasdaq 1,999.87 +9.26 (+0.47%)
S&P 500 1,136.47 +5.14 (+0.45%)
10-Yr Bond 4.791% -0.021

Close: Behind the market's slight gains lies a perfectly uneventful session, which saw the major averages trading in relatively tight trading ranges on anemic volume... That fact notwithstanding, it's notable that all of the major averages closed higher for the week, with the blue- chip averages posting their third consecutive winning week... Today's favorable bias was a reversal of yesterday's 0.6-1.6% pullback for the major averages and was supported by encouraging guidance from the likes of FedEx (FDX 77.01 +1.00), Procter & Gamble (PG 110.39 -0.37), and Cree (CREE 20.48 +0.45), to name a few...

Although the market managed to close in positive territory and at its best levels of the day, its gains were limited by the Nasdaq's failure to trade above the psychologically-significant 2000 mark... Like the market, the bulk of the sectors were little changed, with laggards of note including the airline, iron & steel, and gaming & casino groups... Leadership to the upside was also limited, but included the gold, oil services, and coal sectors... This morning's economic reports included the Export Prices report (ex-agriculture) at 0.3% and Import Prices report (ex-oil) at 0.6%...

The Initial Claims report came in at 352K (consensus 335K), but continuous claims dropped 106K... Elsewhere, the bond market was on the defensive for most of the session, but closed mixed, with the 10-year note up 2/32, bringing its yield down to 4.80%... Remember that the market is closed tomorrow in remembrance of former President Ronald Reagan...

Dollar

Last trade 89.20 Change -0.48 (-0.53%)

[54anickel]

75. Nasdaq - so close and yet so far.

[54anickel]

74. The euro's big chance (Tick-tock, tick-tock, tick-tock)

http://www.prospect-magazine.co.uk/start.asp?P_Article=12667

The dollar's reign as the world's undisputed reserve currency could be drawing to a close

"The convention whereby the dollar is given a transcendent value as an international currency no longer rests on its initial base... The fact that many states accept dollars in order to make up for the deficits of the American balance of payments has enabled the US to be indebted to foreign countries free of charge. Indeed, what they owe those countries, they pay in dollars that they themselves issue as they wish.

This unilateral facility attributed to America has helped spread the idea that the dollar is an impartial, international means of exchange, whereas it is a means of credit appropriated to one state."

Thus spoke Charles De Gaulle in 1965, from a press conference often cited by historians as the beginning of the end of postwar international monetary stability. De Gaulle's argument was that the US was deriving unfair advantages from being the principal international reserve currency. To be precise, it was financing its own balance of payments deficit by selling foreigners dollars that were likely to depreciate in value.

The striking thing about De Gaulle's analysis is how very aptly it describes the role of the dollar in 2004. That is itself ironic, since the general's intention was, if possible, to topple the dollar from its role as the world's number one currency. True, pressure on the dollar grew steadily in the wake of De Gaulle's remarks. By 1973, if not before, the system of more or less fixed exchange rates, devised at Bretton Woods in 1944, was dead, and the world entered an era of floating exchange rates and high inflation. Yet, even in the darkest days of the 1970s, the dollar did not come close to losing its status as a reserve currency. Indeed, so successfully has it continued to perform this role that in the past decade some economists have begun speaking of Bretton Woods II - with the dollar, once again, as the key currency. The question is: how long can this new dollar standard last?

more...