STOCK MARKET WATCH, Tuesday 10 August

[ozymandius]

Tuesday August 10, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 163
DAYS UNTIL W* GETS HIS PINK SLIP 84
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 242 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 296 DAYS
WHERE ARE SADDAM'S WMD? - DAY 509
DAYS SINCE ENRON COLLAPSE = 992
Number of Enron Execs in handcuffs = 19
Recent Acquisitions: Ken Lay
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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

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AT THE CLOSING BELL ON August 9, 2004

Dow... 9,814.66 -0.67 (-0.01%)
Nasdaq... 1,774.64 -2.25 (-0.13%)
S&P 500... 1,065.22 +1.25 (+0.12%)
10-Yr Bond... 4.24% +0.03 (+0.64%)
Gold future... 403.00 +0.70 (+0.17%)


|||


GOLD, EURO, YEN and Dollars

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PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

[54anickel]

1. Dollar Is Near Month's Low; Fed May Signal Fewer Rate Increases

http://quote.bloomberg.com/apps/news?pid=10000103&sid=av7VALjNTGJg&refer=us

Aug. 10 (Bloomberg) -- The dollar traded near the lowest level this month against the euro on speculation the Federal Reserve will indicate it's prepared to slow the pace of interest rate increases.

Policy makers will lift their target rate by a quarter point today to 1.5 percent, according to the median forecast of economists polled by Bloomberg. In an accompanying statement, the Fed may suggest it is ready to skip an increase next month, eroding demand for the dollar, said Marios Maratheftis, a currency strategist in London at Standard Chartered Plc.

``They will make it clear they are not going to hike in September,'' said Maratheftis. ``I don't think the statement should support the dollar.'' The U.S. currency may weaken to $1.2350 this week, he said.

Against the euro, the dollar was at $1.2278 at 11 a.m. in London, from $1.2272 late yesterday in New York, according to EBS, an electronic foreign exchange trading system. Versus the yen, the dollar was at 110.80 from 110.63. The dollar lost more than 2 cents Friday against the euro after the Labor Department said the U.S. economy added 32,000 jobs last month, the fewest this year.

Investors will weigh the Fed's statement to see ``whether or not they still think the slowdown is temporary,'' said Stephen Jen, chief currency economist in London at Morgan Stanley and a former Fed economist. ``We're going to look for that reference -- if that changes the dollar should weaken.''

more...

[Frodo]

13. How does one "slow the rate of increases" when

there has only been ONE increase?

[UpInArms]

19. easy answer

just don't have any increases and begin decreasing again :evilgrin:

[54anickel]

20. HA! Good point.

I believe they are addressing the rate that has been speculated by the markets that would include .25 at each of the remaining 4 meetings that would result in 2.25 by year-end.

Last I saw they were speculating the Fed would skip an increase in Sept.

[54anickel]

2. Bagels vs. bonds

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

snip>

Luckily, bond buyers don’t eat bagels, drive, or visit the doctor. What else can explain why these compulsively mathematical people would drive down the yield on the 10-year Treasury today by 20 basis points? (Okay, what, other than some crack in the financial system or wild hedge fund short covering?)

For the record, the 10-year at Friday’s close generated a paltry 4.21% yield to maturity, which is 40 basis points lower than the rate of inflation calculated by the government over the last three months and annualized. With all this excitement over bonds at miniscule yields, you’d think that the Treasury had started a flashy new ad campaign featuring Britney Spears, Jessica Simpson and whoever all those Idol people are. Maybe something like this:
If with stocks, you think you need a sedative
Just buy bonds, though real rates are negative.
If your coupons come in below the cost of livin’,
Rest assured, the cause is great to which you’re givin’…

But no. The official reason for today’s bond rally (and stock plunge) was the abysmal payroll numbers. According to government number crunchers, a mere 32,000 jobs were created in July. Guesstimates called for more than 200,000. The weakness was in the service side while manufacturing employment gained again.

The vigilant Warren Pollock is one of those who reads the fine print on BLS news releases, and he reports that the financial sector took a big hit in July on the employment front with 23,000 jobs lost. Mortgage banking was among the finance-related industries to shed employees as the “credit intermediation industry” lost 16,000 jobs. This sector has been a big job creator the last several years and still boasts 10% more employees today than in July 2000. That compares to a 1.3% shrinkage in total private employment.

That’s an amazing performance. Maybe we are in a New Financial Era where the mortgage banking industry will continue to grow and grow until it becomes its own sector, like Tech, and gets its own special section on stock market websites, and everyone starts calling Calabasas, California – home of Countrywide Financial - “Mortgage Valley,” and the firing of mortgage banking employees in July was just an aberration, probably due to short tempers from the summer heat.

Or maybe the mortgage bubble’s got a hole in it.

more...

[54anickel]

3. U.S. Stock-Index Futures Gain Before Fed Decision; Alcoa Rises

http://quote.bloomberg.com/apps/news?pid=10000103&sid=axp9qZCXVNsw&refer=us

Aug. 10 (Bloomberg) -- U.S. stock-index futures rose before today's predicted interest-rate increase from the Federal Reserve. Alcoa Inc. shares advanced in Europe.

``I expect the Fed to raise rates -- failure to do so would be a bad signal for the market,'' said Joan Bonet, who helps manage about $1.7 billion at Credit Suisse Gestion SGIIC in Madrid. ``It would imply that it doesn't see growth right now.''

Exxon Mobil Corp. gained as crude oil reached a record for an eighth straight day. Intel Corp. slipped after Lehman Brothers Holdings Inc. downgraded semiconductor-related shares in Europe and North America.

more...

[54anickel]

4. Economists lower growth forecasts

Couldn't resist :evilgrin:

http://www.boston.com/business/articles/2004/08/10/economists_lower_growth_forecasts/

NEW YORK -- Economists reduced their forecasts for US economic growth this quarter amid concern that record oil prices and shriveling job gains will sap consumers' ability to spend, according to a monthly Bloomberg News survey.

The economy will probably grow at a 3.9 percent annual rate from July through September, slower than the 4.2 percent estimated last month, according to the median of 54 economists surveyed. For the year, the economy is forecast to grow 4.4 percent, a tenth of a percentage point less than what was estimated in the June survey.

"The high energy prices are taking a toll on consumers and now, with less hiring, there is less income as well," said Richard DeKaser, chief economist at National City Corp. in Cleveland. DeKaser marked down his estimate for third-quarter growth to 3.7 percent from 4.8 percent

snip>

The economy grew at a 3 percent annual pace in the second quarter as consumer spending rose at the weakest rate in three years, according to the Commerce Department. The economy grew at a 4.5 rate in the first quarter.

[Frodo]

14. So they're predicting a 6% Q4 eh?

Or an adjustment to this past quarter.

[54anickel]

5. U.S. Small Business Optimism Index Rose in July, Survey Shows

http://quote.bloomberg.com/apps/news?pid=10000103&sid=a38wFllkUCT4&refer=us

Aug. 10 (Bloomberg) -- Optimism among small U.S. businesses rose to near an 18-year high in July, as expectations for the economy improved and more owners said they planned to increase spending and hiring, according to a private survey.

The National Federation of Independent Business's small- business optimism index rose to 105.9 last month from 103 in June. The index registered 106.9 in December, the highest since the group began keeping monthly figures in 1986. An index of 100 is set to a baseline year of 1986 and seasonally adjusted.

More small-business owners said they thought it's a good time to expand facilities, and a higher percentage than a month ago said they expected to create new jobs. The survey follows government reports showing a slowing economy in the second quarter and disappointing job gains last month.

snip>

The survey showed that 35 percent of the small businesses expected an increase in sales adjusted for inflation compared with 26 percent a month earlier. Some 25 percent said it was a good time to expand, compared with 21 percent in June.

[54anickel]

6. UPDATE - Soaring oil prices may lead to weaker U.S. dollar

http://biz.yahoo.com/rf/040809/markets_dollar_oil_2.html

CHICAGO, Aug 9 (Reuters) - The dollar, which rallied in recent months on expectations the Federal Reserve will raise interest rates several times in the next year or so, may fall if soaring oil prices curb economic growth.

The dollar enjoyed gains earlier this year on speculation that the Federal Reserve would begin to raise interest rates from a 46-year low at 1 percent to head off a budding inflation threat.

snip>

With crude oil prices hovering near record highs just below $45 a barrel, higher gasoline prices will soon follow. Consumers struggling to pay high gasoline prices may become increasingly inclined to keep their wallets shut to other purchases.

"Higher oil prices -- particularly record higher oil prices -- have typically been associated with economic weakness -- I mean a shock to economic growth," said Michael Woolfolk, senior currency strategist at Bank of New York. "If oil prices remain above $40 a barrel on a sustained basis, we have a problem."

He said that if oil prices remain a hurdle for the U.S. economy, the euro could return to prices near $1.25. The euro touched a record high above $1.29 in February.

snip>

There's a 50 percent chance of oil hitting $50 a barrel within the next 50 days because of tight supplies, energy analyst Daniel Yergin, chairman of Cambridge Energy Research Associates, said in a report released on Monday.

snip>

"The Fed is not going to tighten as much over the next year and a half as what's priced into the market," Daw added. "The effect it's going to have on the dollar is ... the dollar will suffer."

more...


edit to add
Sort of catch 22 ain't it? Part of the high oil price comes from the weakness in the dollar (due to petrodollar is US dollar).
Oil rises -> dollar down
Dollar down -> oil rises

Will the circle be unbroken
by and by Lord, by and by
There's the EURO on the waiting
in the sky Lord in the sky

[aneerkoinos]

9. LOL the poem n/t

[54anickel]

16. Hi Aneerkoinos

Welcome back to the SMW thread! :hi:

Don't you find it interesting that we don't hear much in the news about pricing oil in euros anymore. Used to be all over the place. Considered as one of the many reasons Shrub went after Saddam, after all Saddam was partially successful in that endeavor in the "food for oil" (or whatever that UN arrangement was called) deal wasn't he?

Venezula, Russia, OPEC wanted euros worked into the pricing in various ways when the dollar started it's long descent.

Wonder how much of a real role that has in all this hoop-a-la of tight supplies now? I'm not discounting the threat of peak oil, I believe that is very true as well. But that's been known for a long time yet kept under the radar. Seems to have come up in importance at a most opportune time.

[aneerkoinos]

30. Peak Oil

Read this (if you haven't allready at the economic issues):
http://www.abc.net.au/pm/content/2004/s1172404.htm

He's saying that we've reached the plateau and production will start to go down after three years.

So I'm guessing everybody is just too worried about the end of the world as we know it to think about petrodollars and petroeuros?

[54anickel]

40. The magician's "other hand" trick. n/t

[ozymandius]

12. Love the EURO spiritual!

I have heard (though I despise the word) "chatter" about the floated yuan effect on oil prices. Since the U.S. represents such a small market compared to the potentially gigantic market in China - oil producing nations will pay deference to new and existing markets that outweigh the U.S. China, obviously, is a huge market. But then so is the EU. Fiat currency represented by the petro-dollar will lose out to the euro and yuan - so says chattering speculators. This will cause a crisis in every U.S. market and send shudders through the U.S. economy.

So far this speculation is limited to the fringe element doom-sayers.

Has anyone seen news that might lend a splinter of support to these claims?

[54anickel]

18. Seems we are thinking the same thing Ozy. (See post above)

I haven't seen anything other than the at the gold-bug and libertarian sites. It opens doors to many theories though.

[54anickel]

31. Only "hit" that came up on a google of petrodollar + euro.

It's very long and I haven't made it to the 2nd and 3rd parts yet. Last 4 paragraphs of part 1 address the discussion quite well though.

http://www.lefthook.org/History/Kleftis072104.html

snip>

Yet, a world centered on the "American way of life" still bears a price beyond a bubbly Wall Street utopia. The non-generalizable U.S. system requires others to host it, though they will never share in its questionable benefits. A finite amount of world savings pays for U.S. debt-based consumption, and compels capital in general, the product of arduous labor, to go toward consumption instead of productive use. Everyone must hold dollars, regardless of the real economic strength of the U.S. economy, and even if dollar investments are unprofitable. Most importantly, dollar dominance pays for the U.S. military and focuses the world's social and economic life on the domestic necessities of U.S. capitalism.

Thus, despite deepening weakness and disorder, the dollar's value remains high for artificial reasons; artificial in the sense that concrete human activity crafts its value, and not simply U.S. natural advantages, divine favor, or even real economic power. Some have attempted to squeeze out from underneath the U.S. fist. Oil at least has utility, but the dollar, like all fiat currencies, contains no intrinsic value other than as a socially accepted medium of exchange for commodities. As debt mounts, trade erodes, and politics swing rightward, less and less money flows into the U.S. to offset its consumption. The euro was established as a currency to rival the dollar, and with U.S. dollars more than 2/3 of all reserve holdings and euro holdings less than 1/6, even a relatively small shift away from dollars at the world scale would seriously undermine bank and corporate positions in the overextended U.S. markets, perhaps even leading to a general U.S. market crash. There are also indications that O.P.E.C. countries have already started to calculate their profit in euros even as they continue to sell in dollars, seeking a more stable, less debt-ridden, and less aggressive unit of value. Iran has talked openly about trading oil partially in euros since the late 1990s. Libya advocates euro pricing. Venezuela sells some oil to local partners in their own currencies, thus boosting their regional economy, cutting the dollar out of the process, and inciting the U.S. to threats and coup attempts. Russia has begun selling oil in euros to Europe. And crucially, Iraq, the second largest holder of proven oil reserves and nearly matching "first-world" economies before the U.S./U.K.-led war in the early 1990s, began selling oil in euros immediately after the 2000 election. Many foolish financiers laughed at the time, but the Iraqis not only gained from the subsequent depreciation of the dollar, but also threatened directly the edifice of dollar dominance, enraging the U.S. government.

Consequently, the current set of wars must been seen in light of the interrelationships between oil dependency, bank and corporate military-related businesses, and dollar dominance. Israel has certainly played a crucial conditioning factor, but perhaps one similar to the regional role once played by South Africa, for periodically the needs of U.S. capitalism clash with Israel's priorities; moreover, the particular political relationship with Israel does not explain U.S. military and dollar-related activities in Latin America, Africa, and Asia. The politics of religious terrorism, contingently concentrated in parts of the Islamic world due to the distribution of oil supplies, initially had the support of U.S. capitalism against the greater evil of socialist and anti-colonial nationalist movements. Such terrorism has now become a shill to bully U.S. domestic opposition and justify the expansion of military bases to control dwindling oil supplies on behalf of the Almighty Dollar.

Due to the necessities of profit, U.S. capitalism does not conform to its prettified self-image, but appears instead in the light of objectivity as a disjointed brute that requires systematic militarism and imperialism to survive. Internal and external developments in capitalism proceed hand-in-hand, defying U.S. isolationist fantasies. If the inner circle of U.S. profit erodes, bound together by dollar-oil-military activities, the outer circle of world capitalism's dollar-debt-trade links will rupture. The privatized and mercenary U.S. military has consistently fought on behalf of this outer circle as well; however, more sustainable economies with less debt, stronger trade, and superior social organization of transportation, education, and health care can retain an upper hand without dollar dominance and develop regional economic zones. By contrast, the weakening U.S., in a self-created world of unbounded capitalism, must enforce its special position through violence alone. Consequently, the crisis for the U.S. is not just about oil or the military, but also the financial markets and the entire U.S. profit method; without an oil-backed currency, U.S. debt and trade problems would become immediately unsustainable, leading to a severe economic and social reckoning.1 Out of liberal capitalist hubris and avarice, U.S. rulers appear to have left themselves little room to maneuver except through intensifying and expanding their current activities.

[ozymandius]

7. WrapUp by Jim Willie CB

REASONS WHY GOLD WILL RISE (revisited)

As the slow “dog days” of summer are upon us, why not a reflection on why gold still makes sense? The first article under my pen name “25 Reasons Why Gold Will Rise” was published in November of 2002 (much gratitude to the Moriarities). The entire motivation for the compendium of justifications was disagreement and disrespect for the few shallow reasons offered by the press & media. The only reason they seemed to understand was MidEast violence. Not the Iraqi conflict, but the Israel-Palestine ongoing endless version. Do they even recall this overused reason now that the focus of MidEast violence has moved 1000 miles east and 1500 miles southeast? Probably not. They overlooked a cluster of monetary reasons and economic fundamentals behind an imminent gold rise and USDollar decline. They did not get it right then; they do not get it right now. Let’s revisit the listed reasons why gold has risen, as forecasted 20 months ago. They are still relevant for further price appreciation. Since the time of its writing, two additional reasons have been captured, worthy of addendum.

-cut- (lists 27 reasons)

NEWS TIDBITS

The Federal Reserve FOMC meets tomorrow and Wednesday. Fed Funds futures contract prices in an 94% chance of a 25 basis point hike. Wholesale inventory levels for June rose by 1.1%, with sales unchanged. We have the largest rise in computer inventories since Sept 2000. Warren Buffett increased its Berkshire Hathaway bet against the USDollar to $19 billion at the end of the first half of 2004, as stated in a regulatory filing. The estate of recently deceased Susan Buffett intends to sell 1,200 to 1,500 of company class A stock over the next two years to pay taxes, expenses and other cash bequests. The remainder of her stock holdings, which would have a value of several billion dollars, would be transferred to the Buffett Foundation charity, of which Susan Buffett had been president. German drugmaker Boehringer Ingelheim said US regulators had widened the approved use of its arthritis drug to include treatment of rheumatoid arthritis, the most common form of arthritis in which joints are damaged by wear and tear.

more...

[54anickel]

46. Beware of $400 an ounce

Following the weaker than expected payrolls report the dollar was pummeled and gold and silver rallied. Given that the Fed may not be able to raise interest rates as aggressive as previously thought, many foresee the weak dollar/strong gold trend continuing for some time. No disagreement here. However, unless - or more precisely until - the dollar collapses $400 an ounce may prove to be a formidable hurdle for gold. Why? Because the commercials have been attacking this psychologically important mark with vigor and great success.

To note: this is not to say that the commercials can somehow magically cure the pickle the Fed finds itself in. On the contrary, if Greenspan is unable to raise interest rates for fear of further economic retrenchment it is nearly universally held that the dollar will remain vulnerable. The commercials can not do much to change these facts of life.

However, what the commercials can do, and have done, is bide their time when gold rallies, and then swamp the market with short sales at the opportune moment. Case in point, when gold was nearing its January highs the commercials aggressively took their largest short position on record. The timing of this attack was, quite frankly, perfect.

more...

[54anickel]

8. Justice for 'Gold Train' Victims

http://www.nytimes.com/2004/08/09/opinion/09mon3.html?ei=5006&en=44ecff28e591214e&ex=1092715200&partner=ALTAVISTA1&pagewanted=print&position=

Over the past decade, this nation played a laudable role in helping to persuade European governments and companies, including recalcitrant Swiss banks, to live up to their moral duty to settle restitution claims by Holocaust survivors even when their legal liability was murky. Regrettably, the Justice Department has taken a much less high-minded approach to a three-year-old lawsuit by elderly survivors over America's mishandling of valuables the Nazis collected from Hungarian Jews and then loaded onto a train heading for Austria.

Instead of facing up to responsibility for the contents of the "Hungarian Gold Train," which the American Army took for safekeeping in 1945, the government has raised a host of technical legal defenses seeking to void the claims, or at least delay the moment of reckoning. This is particularly dismaying since essential facts aren't really in dispute.

They were documented five years ago in a report by a special presidential advisory commission that detailed "an unexplained departure" from America's otherwise stellar record of adhering to laws and regulations calling for the preservation of victims' assets and their return to the country from which they were seized. Some of the choicest Gold Train loot was either commandeered by high-ranking officers or sold for personal use by Army personnel. Other valuables were auctioned in New York and the proceeds given to a United Nations refugee agency. Still other property was stolen from the warehouse. Two suitcases of gold dust simply vanished. Meanwhile, emphatic calls by the Hungarian government and Hungarian Jewish groups for return of the train's contents were ignored.

more...

[ozymandius]

10. Oil prices and the Fed are headlining today's show.

Stocks Seen Little Changed; Fed Awaited

NEW YORK (Reuters) - U.S. stocks are set to open little changed on Tuesday as investors look for clues on the health of the U.S. economy and the outlook for interest rates in comments from Federal Reserve policymakers.

The Fed is widely expected to lift interest rates by a quarter point from the current 1.25 percent despite last week's dismal July employment report, if only to avoid fanning financial market jitters about stumbling growth.

-cut-

"Investors will wait until after the Fed meeting to decide whether they want to step in here and buy the market," said Barry Hyman, equity market strategist at Ehrenkrantz King Nussbaum. "The Fed decision, unlike previous meetings at this point, is not a given, though it is likely they will raise 25 basis points."

story

[54anickel]

11. Booga Booga!

http://www.321gold.com/editorials/chapman_d/chapman_d_080904.html

snip>

Curiously to date the Orange alerts have come at interesting points in time. The first one was issued around the one year anniversary of September 11, 2001 at a time when the Enron scandals were boiling over noting possible George Bush involvement; the second in February 2003 when Colin Powell was to speak to the UN urging rapid movement against Iraq; the third in March 2003 just prior to the actual invasion of Iraq; the fourth in May 2003 just following Bush's "Mission Accomplished" and following a wave of attacks in Saudi Arabia and Morocco; the fifth in December 2003/January 2004 surrounding the outbreak of Mad Cow disease; and finally the current one just as the Democratic Convention ended and the Democrats were looking for a convention boost.

snip>

Orange Alert S&P 500
September 10-24, 2002 Down 83.6 points or 9.2%
February 7-27, 2003 Down 0.85 points or 0.1%
March 17-April 16, 2003 Up 46.65 points or 5.6%
May 20-30, 2003 Up 42.85 points or 4.6%
December 21, 2003 - January 9, 2004 Up 33.2 points or 3%
August 1, 2004 - Down 37.8 points thus far or 3.4%

The mixed record on Orange Alert to date tells us that the issuance of the alert may not be all that meaningful but it certainly cannot be ignored. The current drop in the market is due as much to the recent rise in oil prices as anything else. Oil prices have been spurred by the Yukos affair and by the ongoing attacks in Iraq. Adding fuel to the fire was the non-farm payroll numbers that came out on August 6. The sharply lower numbers coupled with the downward revisions of earlier months is a very serious slap in the face to the White House Administration and even more so to the market that has been lulled into believing the economy was improving. But it had for months been the sense that there was something wrong with the employment numbers as the overall sense was that while the numbers looked good it did not match the reality being seen and heard out on Main Street.

With a mixed record for the market on orange alerts the focus maybe should be on who benefits from an Orange Alert and heightened security. Companies that may benefit from the increased security and policing are security firms, equipment suppliers to police and firms specializing in gadgetry for security such as biometrics. Here we find that over time a number of firms have definitely benefited. Some that come to mind are Armor Holdings Inc. (AH-NYSE) up 32% YTD, DHB Industries Inc. (DHB-NYSE) up 112% YTD, Mine Safety Appliances (MSA-NYSE) up 38% YTD, Lakeland Industries Inc. (LAKE-NASDAQ) up 15% YTD and Taser International (TASR-NASDAQ) down 2.3% YTD although at one point it was up 332% so it is extremely volatile and now has problems because of the deaths of a number of people after being subdued by a Taser baton.

While these firms (and others) have done exceptionally well in the era of heightened security watching their sales grow immensely and their stock price soar there is one company above all others that has benefited not so much from the heightened homeland security but overall because of the war on terror and the invasion of Iraq. That company is Halliburton Co. (HAL-NYSE). This is the company that was headed during the 1990's by now Vice President Dick Cheney.

more...

[UpInArms]

17. here's an interesting timeline on those alerts

[54anickel]

24. There seems to be so many things that correlate with the timing of

the terrorist alerts with the possible exception of terrorist movements or arrests that is. :evilgrin:

[UpInArms]

15. daily dollar watch

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

Last trade 88.47 Change +0.08 (+0.09%)

http://money.cnn.com/2004/08/09/news/newsmakers/buffett.reut/

Buffett ups bet against dollar to $19B

NEW YORK (Reuters) - Warren Buffett increased Berkshire Hathaway Inc.'s bet against the U.S. dollar to $19 billion at the end of the first half of 2004, his holding company disclosed in a regulatory filing.

The value of the Omaha, Neb.-based company's contracts in foreign currency had increased $8 billion by June 30, the company said in its quarterly filing with the U.S. Securities and Exchange Commission.

Buffett previously disclosed making investments in five foreign currencies in a belief the dollar will decline in the long run as a result of the United States' ballooning trade deficit. He has never specified which currencies he was investing in, only saying they were major.

In the second quarter, Berkshire (BRK.A: Research, Estimates) reported that net income declined 42 percent due to $172 million in investment losses, including in foreign currency investments. In second quarter 2003, the company enjoyed $905 million in investment gains, mainly from selling U.S. government bonds.

...a bit more...

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=MTFH45270_2004-08-10_11-43-24_L10564555

FOREX-Dollar near recent lows, awaits Fed move/comments

LONDON, Aug 10 (Reuters) - The dollar was stable near a recent two-week low against the euro on Tuesday as investors awaited an expected Federal Reserve interest rate rise and any new signals on future U.S. rate changes. The Fed is widely expected to raise target borrowing costs by a quarter percentage point to 1.50 percent when it announces its decision at 1815 GMT, making it the second monetary tightening in four years after it began raising rates in June.

But investors were also keen to hear more about the Fed's future pace of tightening after last week's disappointing non-farm payrolls report fanned worries about the health of U.S. economic recovery.

"People are reluctant to take any positions ahead of the Fed, waiting particularly for the statement," said Carsten Fritsch, currency strategist at Commerzbank.

"The statement will be less optimistic than (chairman Alan) Greenspan has been and the impact should be negative for the dollar because it raises questions about the magnitude of the Fed rate hikes in the coming months."

By 1130 GMT the dollar stood at $1.2278 per euro <EUR=>, steady on the day and near a two-week low of $1.2290 set on Monday. Against the yen it was also stable at 110.72 yen <JPY=>.

...more...

Have a Great Day Marketeers!

[UpInArms]

21. here's an article that shows how well

subcontracting public services to private industry is working

http://www.woai.com/news/local/story.aspx?content_id=6CAB08ED-2A8F-4DD6-A342-14D501786B15

Jail Break Prompts Big Changes

Big changes at the Frio County Jail, as hundreds of inmates are shipped out.

They were sent to another facility just one day after five convicts escaped from the jail, and more changes could be on the way.

"What are we waiting for are. Are we waiting for one of these persons to go into one of these homes and kill somebody?," said Mayor Roland Segovia.

The mayor of Pearsall is concerned about the company that runs the Frio County Jail.

Segovia says Correction Services Corporation out of Florida is a good company but, "having six breakouts in the past eight years and only catching one of the 15 that have escaped, that's pretty scary," said Segovia.

...more...

[54anickel]

23. Hmmmm, so when the IRS is privatized will revenue collection

increase or decrease?
Could a private corp employee be bought out more easily than a gubbermint one? Will there be more accountability for errors or less? Lots of questions - no answers. :shrug:

What's Shrub's new mantra again "Ownership"?

[54anickel]

22. Police State USA (linked at 321gold)

http://www.house.gov/paul/tst/tst2004/tst080904.htm

Last week’s announcement that the terrorist threat warning level has been raised in parts of New York, New Jersey, and Washington, D.C. has led to dramatic and unprecedented restrictions on the movements of citizens. Americans wishing to visit the U.S. Capitol must, for example, pass through several checkpoints and submit to police inspection of their cars and persons.

Many Americans support the new security measures because they claim to feel safer when the government issues terror alerts and fills the streets with militarized police forces. As one tourist interviewed this week said, “It makes me feel comfortable to know that everything is being checked.” It is ironic that tourists coming to Washington to celebrate the freedoms embodied in the Declaration of Independence are so eager to give up those freedoms with no questions asked.

Freedom is not defined by safety. Freedom is defined by the ability of citizens to live without government interference. Government cannot create a world without risks, nor would we really wish to live in such a fictional place. Only a totalitarian society would even claim absolute safety as a worthy ideal, because it would require total state control over its citizens’ lives. This doesn’t stop governments, including our own, from seeking more control over and intrusion into our lives. As one Member of Congress stated to the press last week, “people who don’t want to be searched don’t need to come on Capitol grounds.” What an insult! The Capitol belongs to the American people who pay for it, not to Congress or the police.

It is worth noting that the government rushes first to protect itself, devoting enormous resources to make places like the Capitol grounds safe, while just beyond lies one of the most dangerous neighborhoods in the nation. What makes Congress more worthy of protection from terrorists than ordinary citizens?

To understand the nature of our domestic response to the September 11th, 2001 attacks, we must understand the nature of government. Government naturally expands, and any crises- whether real or manufactured- serve to justify more and more government power over our lives. Bureaucrats have used the tragedy of 9-11 as an excuse to seize police powers sought for decades, such as warrantless searches, internet monitoring, and access to bank records. It should be no surprise that the recently released report of the 9-11 Commission has but one central recommendation: bigger government and more spending at home and abroad.

more...

[UpInArms]

25. pre-opening blather

briefing.com

8:56AM: S&P futures vs fair value: +2.3. Nasdaq futures vs fair value: +6.0. Futures market holding fairly steady this morning in positive territory, which is setting the stage for a modestly higher open for the cash market

8:35AM: S&P futures vs fair value: +2.5. Nasdaq futures vs fair value: +7.0. Favorable bias in pre-market action given added support with the better than expected Q2 Productivity report (+2.9% vs +2.0% consensus)... A slight dip in oil prices (-$0.14 at $44.70/bbl) and some bargain hunting expectations are also supportive factors in the early-going... The FOMC announcement at 14:15 ET and a Lehman Bros. downgrade of the Semis to Neutral from Positive are helping to keep enthusiasm in check

ino.com

The September NASDAQ 100 was slightly higher overnight due to light short covering as it consolidates some of last Friday's sharp decline, which extended last week's breakout below July's low crossing at 1360. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near-term. If the decline continues, a test of weekly support crossing at 1267.54 is possible later this year. The September NASDAQ 100 was up 1.50 pt. at 1322.00 as of 6:52 AM ET. Overnight action sets the stage for a steady to firmer opening by the NASDAQ composite index later this morning.

The September S&P 500 index was higher overnight due to short covering as it consolidates some of last Friday's loss, which extended last week's breakout below May's low crossing at 1097.50. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near-term. If September extends this summer's decline, a test of weekly support crossing at 1049.20 is the next downside target. The September S&P 500 Index was up 1.90 pts. at 1066.20 as of 6:54 AM ET. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

[UpInArms]

26. U.S. Q2 productivity grows at 2.9% annualized rate

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38209.3545717593-817188242&siteID=mktw&scid=0&doctype=806&property=&value=&categories=&

U.S. Q2 productivity grows at 2.9% annualized rate By Rex Nutting
WASHINGTON (CBS.MW) - Growth in productivity of the American workplace slowed in the second quarter but remained at an elevated annual rate of 2.9 percent, the Labor Department estimated Tuesday. Unit labor costs increased 1.9 percent annualized in the April through June period, the fastest rate in two years. Real hourly compensation - adjusted for inflation - increased 0.1 percent annualized. Economists were expecting productivity to slow to a 2.1 percent from a downwardly revised 3.7 percent in the first quarter. In the past four quarters, productivity is up 4.7 percent, a bit higher than the 2003 gain of 4.4 percent but below 2002's stellar 5 percent growth.

8:29am 08/10/04

U.S. Q2 PRODUCTIVITY 2.9% ANNUAL VS. 2.1% EXPECTED

8:29am 08/10/04

U.S. Q2 UNIT LABOR COSTS UP 1.9% ANNUALIZED

8:30am 08/10/04

U.S. Q2 MANUFACTURING PRODUCTIVITY UP 7.5%

8:30am 08/10/04

U.S. PRODUCTIVITY UP 4.7% YEAR-OVER-YEAR

here's the report page:

Aug 10 8:30 AM
Productivity-Prel Q2
reported 2.9%
briefing.com anticipated 1.5%
market anticipated 2.0%
last report 3.7%
revised from 3.8%

and here's how that report is rated:

Productivity and Costs

Importance (A-F): This release merits a D+.
Source: The Bureau of Labor Statistics of the Department of Labor.
Release Time: 8:30 ET around the 7th of the second month of the quarter (data for quarter prior).
Raw Data Available At: http://stats.bls.gov/news.release/prod2.toc.htm.

Nonfarm productivity and costs provide measures of the productivity of workers and the costs associated with producing a unit of output. During times of inflationary concern, the unit labor cost index in this report can move the market. If productivity is falling, unit labor costs may be rising faster than hourly earnings and other labor cost measures. Because productivity can be quite volatile from one quarter to the next and because the previously released GDP report will give a good indication of productivity growth, this report seldom has a significant impact on the market.

In addition to the preliminary report, a revision to the productivity data is released in the third month of each quarter. As with the preliminary report, the GDP data released prior to the productivity data provide a clear indication of the direction of the productivity revision.

[54anickel]

28. More with less!!! That was management's mantra during the big

lay-off periods.

During times of inflationary concern, the unit labor cost index in this report can move the market. If productivity is falling, unit labor costs may be rising faster than hourly earnings and other labor cost measures.

Sums it up.

[UpInArms]

27. Dollar holds negative tone after data, ahead of Fed

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38209.3670717593-817189585&siteID=mktw&scid=0&doctype=806&property=&value=&categories=&

CHICAGO (CBS.MW) -- Foreign-exchange trading showed little reaction to U.S. productivity data, leaving the dollar on the defensive. U.S. workplace efficiency expanded a stronger-than-expected 2.9 percent in the second quarter, according to a government report. The data is expected to have little impact on the Federal Reserve's likely decision to hike U.S. interest rates later Tuesday. While higher rates are dollar-supportive, the greenback has been under pressure as U.S. rates remain low relative to other countries and may stay that way amid signs the U.S. economic recovery slowed this summer. In U.S. morning trading, the dollar was down 0.1 percent against the euro, at $1.2281 per euro. The greenback was flat at 110.72 Japanese yen.

[UpInArms]

29. 9:44 EST markets are open

Dow 9,853.74 +39.08 (+0.40%)
Nasdaq 1,783.99 +9.35 (+0.53%)
S&P 500 1,069.03 +3.81 (+0.36%)
10-Yr Bond 4.235% -0.009

[54anickel]

33. Wee bit o' blather just posted out there

9:40AM: Indices open a bit stronger than expected...focus is on Fed policy announcement this afternoon, and there may be some betting that the Fed will not tighten, even though fed funds futures imply a 91% chance of tightening...the tone of the statement with the announcement will also be very important, as traders try to assess likelihood of tightening in September...

[UpInArms]

32. Yukos plunges amid rumours of Russia insider trading

http://www.channelnewsasia.com/stories/afp_world_business/view/100092/1/.html

MOSCOW : Yukos stock crashed in early trading on news that it no longer has rights to shares in its main oil subsidiary amid growing speculation of insider trading.

There is also deep concern about how the turmoil surrounding the company, the biggest Russian oil producer, is affecting world oil prices.

The price of Yukos shares has risen or fallen by at least 10 percent daily over the past week and dragged along the markets with it against a background of concern that global supplies of oil are straining to match demand.

Yukos produces about 1.7 million barrels of oil per day, equivalent for example to about one fifth of Saudi Arabia's output and nearly as much as the maximum that Iraq has pumped recently of about 2.0 million barrels per day.

"Local traders conclude that bureaucrats are playing games," said Christopher Weafer of Alfa Bank. "People are highly suspicious."

...more...

[UpInArms]

34. May Dept. Stores: Sales Down, Earnings Up

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5923824

NEW YORK (Reuters) - May Department Stores Co (MAY.N: Quote, Profile, Research) , parent of Lord & Taylor and David's Bridal retail chains, on Tuesday posted higher quarterly profit, as cost savings and better performance of accessories such as handbags and jewelry offset slack sales.

But May also said that overall sales performance did not meet its expectations, and it blamed weaker demand for casual sandals, shorts, seasonal apparel as well as home furnishings.

<snip>

Sales at stores open at least a year, a key gauge in retail known as same-store sales, decreased 2.2 percent for the quarter.

Excluding the remaining 15 stores which it previously said it would divest, same-store sales fell 1.6 percent.

...more...

[UpInArms]

35. Nicor fires 4 workers after rate-plan probe (Utility admits possible fraud

http://www.chicagotribune.com/news/local/chi-0408100267aug10,1,3559354.story?coll=chi-news-hed

Nicor Inc. said Monday that it fired four employees after an investigation turned up evidence of possible fraud in their handling of a controversial natural gas rate plan that consumer groups say overcharged customers by millions of dollars.

The acknowledgment of possible wrongdoing by midlevel managers at the company's Nicor Gas subsidiary represents a major switch for the Naperville-based utility, which provides gas service to most of Chicago's suburbs. The disclosure contradicts an earlier company investigation that had found no wrongdoing.

Even so, the company continued to assert Monday that its customers are due no refunds.

The case remains the subject of investigations by the rate-setting Illinois Commerce Commission, the Securities and Exchange Commission and federal prosecutors in Chicago.

The rate plan, in effect from 1999 to 2002, promised Nicor incentives if it found less-expensive gas for its customers.

But instead of looking for cheap gas on the open market, consumer groups have alleged, the utility simply used gas that it had kept on its books since the 1950s at much lower costs.

...more...

[UpInArms]

36. GM Jumpstarts Plant in Northeastern China

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5924082

SHANGHAI (Reuters) - General Motors Corp, the world's largest auto maker, plans to restart production from a stalled vehicle factory in northeastern China in September, freeing up space to focus on the prosperous eastern coast.

GM, closing in on Volkswagen AG's lead in the booming Chinese vehicle arena, plans to shift output of its Buick GL8 executive wagons to that factory from Shanghai, opening up capacity to make more cars at its main plant.

The once-moribund $230 million northeastern plant -- formerly called Jinbei GM -- will have capacity to make 50,000 vehicles annually, GM said in a statement seen by Reuters late on Tuesday.

The plant, in the city Shenyang city in the northeastern province of Liaoning, sold just under 3,300 units in 2003, hampered by a poor distribution network and reliance on a single product -- the Chevrolet Blazer sport utility vehicle.

Production of the SUV has been discontinued, GM said.

The new plant, called Shanghai GM (Shenyang) Norsom Motors Co. Ltd., would be effectively run 50-50 by GM and its longstanding Chinese partner, Shanghai Automotive Industry Corp., the country's largest car maker.

...more...

[UpInArms]

37. Fat Times for Four Seasons

http://www.thestreet.com/_tsclsii/markets/ericgillin/10177389.html

The economic recovery may appear rocky, but for Four Seasons (FS:NYSE - news - research) the upscale business travel recovery is picking up steam, with the company posting profits and showing 20% year-over-year revenue growth in the second quarter.

<snip>

On an adjusted basis in U.S. dollars, which is how Wall Street views the company, Four Seasons earned $14.6 million, or 39 cents a share, which is up 118% from last year and tops the 35-cent analyst estimate, according to Thomson Financial.

<snip>

The strong top-line growth was driven by rising revenue per available room, or revpar, at the company's upscale properties as well as rising average daily room rates and growth in operating margins. Revpar at the company's core hotels rose 22.7% from last year, while gross operating margins came in at 31.2%, up from 27.4% in the year-ago quarter.

...more...

[UpInArms]

38. 10:23 EST numbers and blather

Dow 9,860.97 +46.31 (+0.47%)
Nasdaq 1,784.65 +10.01 (+0.56%)
S&P 500 1,069.77 +4.55 (+0.43%)
10-Yr Bond 4.234% -0.010

10:00AM: Indices show early resilience, inching higher...volume is very light, and probably will remain so ahead of the Fed announcement, but could pick up after that...oil prices remain slightly lower... May Department Stores (MAY 26.20 +1.30) a key mover today after reporting earnings a penny ahead of Wall Street expectations.

[UpInArms]

39. dollar waffling

Last trade 88.33 Change -0.06 (-0.07%)

Last tick: 2004-08-10 09:57:12 ET
30-min delayed quote

[54anickel]

41. World oil market stands on brink

Traders expect $50-a-barrel crude, and some say $100 is one major supply disruption away

http://www.dallasnews.com/sharedcontent/dws/bus/stories/081004dnbusgasoline.4fb1.html

How high could oil and gasoline prices go?

Traders are bracing for the prospect of $50-a-barrel crude oil in the coming weeks, with fears of terrorism and other supply disruptions plaguing the world oil market.

The market is tighter than it was during the crushing 1973 oil crisis, one analyst said Monday. Other analysts are broaching the subject of $100-a-barrel oil if a major supply disruption – from Saudi Arabia, Russia or other key exporters – hits an already precarious supply situation.

snip>

Gasoline prices down

Nationwide on Monday, regular unleaded averaged $1.88 a gallon, the U.S. Energy Information Administration said Monday. But that's still about 31 cents higher than a year ago, the agency said. In the Dallas area, gasoline averaged $1.80 a gallon on Monday, according to AAA.

Analysts have long doubted that oil prices could be sustained at today's higher levels. But instability in Iraq and other countries, combined with surprising global economic growth, has surprised everyone.

"No one was predicting that we were going to have the strongest demand growth in a generation this year, but that's what happened," said James Burkhard, director for world oil analysis at Cambridge Energy Research Associates. The prominent research and consulting firm said Monday that crude oil has a 50-50 chance of hitting $50 a barrel by the end of September.

more...

[UpInArms]

42. here's the latest oil ppb and the dollar

http://quotes.ino.com/chart/?s=NYMEX_CLU4

Last trade 44.86 Change +0.02 (+0.04%)

Settle 44.84 Settle Time 14:46

Open 44.60 Previous Close 44.84

High 44.95 Low 44.55

Volume 135 Open Int. 202017

dollar

Last trade 88.25 Change -0.14 (-0.16%)

[54anickel]

45. Looking at the U.S. Dollar through the Lense of a KAGI chart

http://www.gold-eagle.com/editorials_04/norcini080804.html

Below is a long term KAGI chart of the U.S. Dollar for the gold community. This setup employs a 4% reversal which is what I use when evaluating LONG TERM trends. It is not all that good for day traders and scalpers since it responds far too slowly for their purposes, but when used as a preliminary screening tool to evaluate the MULTI YEAR trend, I have found it to be unparallel.

If you observe the chart you can see that this spring's bounce off of the support region near 85 carried only to the top of the BLUE downtrend line drawn off the 2001 peak before reversing. Also, and I think this is most important, NOT ONCE since the dollar's decline began in 2001, has a long term KAGI chart generated a BUY signal in the U. S. Dollar - NOT ONCE. In order to do that, the closing price would have to break above one of the shoulders and the price line would then change color from red to black according to the manner in which I set up my charts. Notice, it has been all red since 2001. In much the same manner, only the opposite took place - not once since 1999 -2001 did the dollar generate a long term sell signal. The accuracy of the chart speaks for itself in this regards.

I think it is also instructive to keep in mind that our Asian friends tend to employ this style of chart when viewing markets since they were originally developed in the far East. I would think that any Asian Foreign Central Bank official viewing the Dollar in this fashion would be seriously concerned. Perhaps this is a partial explanation as to why they are slowing down their rate of purchases of Treasury Debt.

I continue to marvel at those who are calling for a long term dollar bull market in the dollar to commence whether it is based on some "synthetic dollar short" talk or any other such contrived reasoning. We know that there are many factors that go into determining the value of a currency but most important is the current account deficit of the country in question as well as the inflation rate in that particular nation. A currency may be a high yielder but if the yield is below the actual rate of inflation, all holders of that currency are getting negative real rates of return. Investors will not put up with that kind of situation for long and will begin to abandon the currency.

more...

[54anickel]

43. Wrong Again, As Expected

http://www.gold-eagle.com/editorials_04/rostenko080904.html

snip>

But it's all good news. Always. Just like the "transitory" increase in crude oil prices which resulted in yet another lifetime high last week. We're up to almost $45 per barrel now in the face of a rapidly softening economy. I've repeatedly mentioned that surging crude oil prices have consistently forecasted recessions and from the looks of it, this time will be no exception.

Actually, it is good news. At least for the Fed. I've gone on official TSS record stating that, despite all their jawboning about measured this and that, the last thing the Fed wants to do is raise rates. (Hence the incessant play-down of the obvious inflation issue.)

They don't believe their own hype about recovery and the trivial increase we've seen thus far was merely a psychological ruse designed to make the recovery story appear legit. We can't afford a significant rate increase; the credit and housing bubbles depend on it. Our economy is addicted to low rates.

Last week's data gives the Fed some room to increase rates at a "super duper measured rate." As in, not raise them at all. Ten-year note yields plunged last Friday in anticipation of just such a thing, closing at a 4-month low of 4.22%. A little more economic weakness and maybe the refi bubble can be blown up once again, showering Americans with billions in debt masquerading as increased wealth. I assure you that if the Fed can't heat up the economy (and they obviously can't), they'll settle for the next "best" thing which is keeping the credit and housing bubbles inflated. Is there any other choice?

I've said it before and I'll say it again: there is no sustainable recovery in the works and the Fed is NOT going to raise rates to any appreciable degree unless and until the market forces their hand. What does that mean for the stock market? Once the weak data is digested and folks get used to higher oil, the market will once again contend with the fact that interest rates are exceptionally low. No real investment competition for stocks might just be enough to prevent new bear market lows. But a new bull in the works? Probably not for a long time.

[KoKo]

52. A good read...extend the housing bubble and maybe stocks will stay

within a trading range. Probably what will happen, unless some big shock comes but everything is so "controlled" even a big shock will be
spun away.

[UpInArms]

44. 11:04 EST numbers and blather (WHEEE!)

Dow 9,886.78 +72.12 (+0.73%)
Nasdaq 1,792.91 +18.27 (+1.03%)
S&P 500 1,072.74 +7.52 (+0.71%)
10-Yr Bond 4.230% -0.014

11:00AM: Indices continue to push higher on light volume...it might reflect optimism that the statement from the Fed policy announcement will take a softer approach to future rate increases...the Nasdaq is outperforming the other indices, as the SOX semiconductor index is up 0.6%...computer storage, security, railroads, and retail are other strong sectors, while there are no major sectors showing significant weakness...only 4 stocks in the Dow are down, and none more than 10 cents...the gains are broad- based, as reflected in the strong advance- decline line...NYSE Adv/Dec 2139/737, Nasdaq Adv/Dec 1884/828

10:30AM: Positive tone continues in light trade...no signs of any significant selling pressures yet...Cisco (CSCO 20.23 +0.18) up ahead of earnings report after the close on talk that guidance may be optimistic...Disney (DIS 22.21 +0.27) also up ahead of its report after the close...NYSE Adv/Dec 1887/823, Nasdaq Adv/Dec 1659/857

[UpInArms]

47. Countrywide's real estate loan fundings sink

http://www.inman.com/inmannews.aspx?ID=42385

Countrywide Financial Corp. today reported loan fundings of $30 billion for July, a decline of 7 percent from the previous month.

July's funding total was a 43 percent decline from July 2003, which was the single largest funding month in the company's history. Year-to-date funding volume reached $206 billion.

Monthly purchase activity rose slightly over last month's record high, reaching $18 billion. Year-over-year, monthly purchase fundings rose 31 percent. Year-to-date purchase volume was $95 billion.

<snip>

Average daily application volume grew by 5 percent over the previous month, reaching $2 billion. That was due to a greater level of home purchase activity, which fueled a 2 percent increase in the pipeline of applications-in-process to $48 billion. Because of lower refinance activity compared to July 2003, average daily application volume was down 21 percent and the pipeline of applications-in-process fell by 32 percent.

[54anickel]

48. All is not well, Mr. Greenspan…

http://www.kitco.com/weekly/paulvaneeden/aug062004.html

In his latest testimony before the Senate, Alan Greenspan gave an upbeat review of the economy, saying that the current recovery is broad-based and sustainable. Greenspan is undoubtedly one of the best-informed economists on the planet, and highly revered, so he must know what he’s talking about. But judging by their spending habits, consumers do not necessarily share his optimistic views.

Consumer spending is important because it accounts for roughly two-thirds of all the economic activity in the US. One way to gauge consumer spending is to look at same-store retail sales figures over time, and according to yesterday’s Wall Street Journal, stores catering to middle income families have reported declining sales, or meager increases at best, while those catering to lower income families had only anemic increases. Only Saks, Neiman Marcus and Nordstrom (who cater to the high-end market), showed strong increases in sales.

Are higher gasoline prices to blame? Wal-Mart has speculated that higher gasoline prices are taking $7 a week out of its average customer’s pocket. If you fill your car weekly, your gasoline expenditure should be around $1560 a year per car, and for the typical American family with two cars, the annual bill would be roughly $3,120. Using the latest US Census figures from 2002, the median household income, after state and federal taxes, is about $37,000 a year, so for a median household, gasoline represents more than 8% of income.

While we’re on the subject of household incomes, it’s worthwhile to note that incomes peaked in 1999 and have been declining ever since.

Judging from the retail sales figures, middle and lower income families are feeling the pinch of a weaker economy. The only bright light for the economy seems to be the wealthy, and that hardly makes for a broad-based recovery.

more...

[UpInArms]

49. Crude tops $45 (U.S.)

http://www.theglobeandmail.com/servlet/story/RTGAM.20040810.woil0810/BNStory/Business/

The price of oil topped $45 (U.S.) a barrel in New York Tuesday, reaching another record high amid fear that storms in the Gulf of Mexico could choke off supply.

Crude prices have risen to record highs every day since July 30 as investors fret that Russia's freezing of OAO Yukos Oil Co.'s assets could crimp exports from that country while persistent violence prompts occasional shutdowns in Iraq's oil infrastructure.

<snip>

Light crude oil futures for September delivery traded on the New York Mercantile Exchange were trading down 7 cents at $44.77 (U.S.) a barrel after earlier climbing as high as $45.05, the highest price in 21 years of trading in New York.

[UpInArms]

50. 12:32 EST numbers and blather

Dow 9,881.64 +66.98 (+0.68%)
Nasdaq 1,793.18 +18.54 (+1.04%)
S&P 500 1,072.65 +7.43 (+0.70%)
10-Yr Bond 4.238% -0.006

12:25PM: Market may be going into pre-Fed announcement lull now as the indices level off...oil prices have eased over the past hour after pushing through $45 a barrel, and are now $44.48, down 36 cents...NYSE Adv/Dec 2304/800, Nasdaq Adv/Dec 2042/873

12:00PM: Optimism that the Fed will issue an accommodative policy statement has helped spark a broad, shallow rally this morning...the indices opened higher and have steadily added to their gains in stable action...volume has been very light as traders await the Fed policy announcement at 2:15 ET...it is still widely expected that the Fed will announce a 1/4% rate hike, but there are hopes that the wording of the associated statement will imply less of a leaning towards raising rates steadily through the rest of the year...

in individual stocks, May Department Stores (MAY 26.10 +1.20) and AmeriCredit (ACF 20.40 +2.87) are up on good earnings reports, while Cisco (CSCO 20.33 +0.28) and Disney (DIS 22.23 +0.29) reflect optimism about their reports after the close...EchoStar (DISH 29.12 +1.86) is up after announcing a $1 billion share buyback program...it is a very broad-based rally as advancers lead decliners by a wide margin...in the Dow, only 4 stocks are down, and only ExxonMobil (XOM 45.35 -0.21) is down more than 10 cents...expect significantly more action this afternoon after the Fed announcement, and possibly volatile swings...

oil punched through $45 but has fallen back to $44.30 -$0.54...NYSE Adv/Dec 2336/709, Nasdaq Adv/Dec 2023/838

dollar

Last trade 88.28 Change -0.11 (-0.12%)

Last tick: 2004-08-10 12:03:13 ET
30-min delayed quote

[54anickel]

51. 1:16 and I gotta step out for a bit - Steady as she goes

Dow 9,883.09 +68.43 (+0.70%)
Nasdaq 1,793.08 +18.44 (+1.04%)
S&P 500 1,072.70 +7.48 (+0.70%)
10-yr Bond 4.240% -0.004
30-yr Bond 5.040% -0.005
NYSE Volume 624,825,000
Nasdaq Volume 730,666,000

1:00PM: Indices remain in a holding pattern ahead of Fed announcement...the 10-year note is holding with slight gains, oil remains lower, and gold is unchanged...NYSE Adv/Dec 2322/796, Nasdaq Adv/Dec 2021/923


Advances & Declines
NYSE Nasdaq
Advances 2354 (71%) 2065 (66%)
Declines 787 (23%) 905 (29%)
Unchanged 162 (4%) 139 (4%)

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

Up Vol* 485 (82%) 463 (66%)
Down Vol* 100 (16%) 214 (30%)
Unch. Vol* 6 (1%) 23 (3%)

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

New Hi's 26 11
New Lo's 40 131

[UpInArms]

53. Fed finds itself in tight spot

http://www.orlandosentinel.com/business/nationworld/chi-0408100128aug10,1,512830.story?coll=sns-business-headlines

(free registration or try www.bugmenot.com)

WASHINGTON -- The Federal Reserve is in a bind, trapped by its own optimistic words of the past and an economy suddenly not living up to expectations.

When Chairman Alan Greenspan's central bank meets Tuesday, analysts said the Fed would likely increase interest rates modestly even though economic conditions at the moment do not appear to merit it.

Increasing interest rates at a time the economy appears to have lost steam is a choice that no central bank likes to make--especially in an election year in which slow job growth is a key issue.

But with its credibility at stake, the Fed has to do what the Fed has to do.

First, analysts said, bumping up rates this week would follow the central bank's own "measured" game plan of gradually restoring rock-bottom rates to more normal levels. Second, they said, not raising rates would signal that Greenspan believes the economy is in worse shape than imagined.

<snip>

Beyond that, the Fed may be put in the unfortunate position of eating crow and momentarily abandoning its strategy of driving short-term interest rates higher by a couple of percentage points during the next year.

<snip>

"It is a difficult choice," said Nigel Gault, economist at Global Insight Inc., a consulting firm. "They are damned if they do and damned if they don't."

...more...

[Zynx]

54. Fed raises by a quarter point.

[Beetwasher]

55. Uh Oh

What will be the repercussions of raising rates while the economy is faltering?

[Langis]

56. All the gains that were made today... are going to be gone in 30 minutes

Mark my words

[JNelson6563]

57. He absolutely had to

In his statement of confidence a while back he promised raises in interest rates to back up that "it's all good" perspective of the economy. To have not done so what have appeased the money-grubbers on the Street but would have sent a horrible message to those who are more global with their investment views (i.e. "real money"),

What ever you do Al, don't concede the point things look grim. haha

Julie

[Zynx]

58. If he hadn't raised rates, the market would have panicked.

[hatrack]

59. As it is, the NYSE has dropped about 35 points since the announcement

Hi Alan, I'm Rock, and this is my personal assistant, Hard Place.

[TrogL]

60. Loonie Watch

http://www.angelfire.com/ab/trogl/looniewatch.html

Highlights.



http://www.x-rates.com/d/USD/CAD/data30.html

2004-07-12 Monday, July 12 0.758265 USD
2004-07-13 Tuesday, July 13 0.754205 USD
2004-07-14 Wednesday, July 14 0.756144 USD
2004-07-15 Thursday, July 15 0.755287 USD
2004-07-16 Friday, July 16 0.763825 USD
2004-07-19 Monday, July 19 0.764409 USD
2004-07-20 Tuesday, July 20 0.763417 USD
2004-07-21 Wednesday, July 21 0.755173 USD
2004-07-22 Thursday, July 22 0.761267 USD
2004-07-23 Friday, July 23 0.756487 USD
2004-07-26 Monday, July 26 0.750751 USD
2004-07-27 Tuesday, July 27 0.748895 USD
2004-07-28 Wednesday, July 28 0.751371 USD
2004-07-29 Thursday, July 29 0.754205 USD
2004-07-30 Friday, July 30 0.752106 USD
2004-08-02 Monday, August 2 0.751089 USD
2004-08-03 Tuesday, August 3 0.758438 USD
2004-08-04 Wednesday, August 4 0.760341 USD
2004-08-05 Thursday, August 5 0.75884 USD
2004-08-06 Friday, August 6 0.763359 USD
2004-08-09 Monday, August 9 0.75959 USD
2004-08-10 Tuesday, August 10 0.761093 USD


Sorry I've been away for awhile. Loonie's been in a bit of a slump over the last few days but is on an upswing today on everything except the Euro.

No particular financial news on the CBC this morning so perhaps no news is good news.

[54anickel]

61. 3:18 update

Had to check in and see the Fed effect between coats. And the crowd goes wild!!! Well, not Treasuries I guess.

Dow 9,918.71 +104.05 (+1.06%)
Nasdaq 1,802.47 +27.83 (+1.57%)
S&P 500 1,076.19 +10.97 (+1.03%)
10-yr Bond 4.289% +0.045
30-yr Bond 5.068% +0.023
NYSE Volume 995,498,000
Nasdaq Volume 1,157,423,000

3:00PM: After an initial sell-off on slight disappointment over the Fed statement, the stock market has quickly bounced back and indices push near highs of the day...volatile action such as this is not uncommon after a Fed policy statement...some traders suggest this indicates that today's action reflects an improved underlying tone rather than just optimism that rate hikes in upcoming months are less certain...NYSE Adv/Dec 2224/999, Nasdaq Adv/Dec 1921/1128

2:30PM: The Fed statement does not provide the indications that the market had hoped for in that it did not give any indication that the Fed is leaning against raising rates at the September...in effect, the Fed really gave no clues either way...it will depend on the data between now and then...but the stock market is expressing slight disappointment over the lack of a more accommodative signal...NYSE Adv/Dec 2366/839, Nasdaq Adv/Dec 2036/1010

[UpInArms]

62. the Gold-i-locks effect in the market and the dollar

3:27 EST

Dow 9,920.48 +105.82 (+1.08%)
Nasdaq 1,802.04 +27.40 (+1.54%)
S&P 500 1,076.32 +11.10 (+1.04%)
10-Yr Bond 4.287% +0.043

dollar

Last trade 88.72 Change +0.33 (+0.37%)

Last tick: 2004-08-10 14:54:14 ET
30-min delayed quote.

[UpInArms]

63. Text of FOMC statement

http://cbs.marketwatch.com/news/story.asp?guid=%7B0DEB90C6%2D11EE%2D4156%2D944A%2D04C7392619E0%7D&siteid=mktw

WASHINGTON (CBS.MW) -- The Federal Open Market Committee raised interest rates by quarter percentage point to 1.5 percent after Tuesday's meeting.

Following is the text of the committee's statement. See related story on analyzing the statement.

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 1-1/2 percent.

The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. In recent months, output growth has moderated and the pace of improvement in labor market conditions has slowed. This softness likely owes importantly to the substantial rise in energy prices. The economy nevertheless appears poised to resume a stronger pace of expansion going forward. Inflation has been somewhat elevated this year, though a portion of the rise in prices seems to reflect transitory factors.

The Committee perceives the upside and downside risks to the attainment of both sustainable growth and price stability for the next few quarters are roughly equal. With underlying inflation still expected to be relatively low, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.

Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Thomas M. Hoenig; Donald L. Kohn; Cathy E. Minehan; Mark W. Olson; Sandra Pianalto; and William Poole.

In a related action, the Board of Governors unanimously approved a 25 basis point increase in the discount rate to 2-1/2 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.

[UpInArms]

64. Closing numbers and blather

Dow 9,944.67 +130.01 (+1.32%)
Nasdaq 1,808.70 +34.06 (+1.92%)
S&P 500 1,079.04 +13.82 (+1.30%)
10-Yr Bond 4.287% +0.043

Close: The Fed raised the fed funds rate target 1/4% to 1 1/2%...the move, announced at 2:15 ET, was fully expected and had little impact on the day's action...stock indices opened higher, trended higher through early afternoon, and improved even more after the Fed announcement, closing at their highs of the day...the Fed statement noted that energy prices had slowed economic growth, and that labor market improvement had slowed...other than that, the statement was exactly the same as from the prior meeting...there were thus no real clues as to what the Fed might do at the September 21 meeting...

the statement reiterated that "the Committee believes that policy accommodation can be removed at a pace that is likely to be measured"...the data between now and then will determine what the Fed does...oil prices pushed through $45 a barrel today, but had little impact on stocks, and closed down $0.32 at $44.52...volume was extremely light again today...the steady, positive action today was largely seen as a bounce from oversold conditions, and was led by technology and financial services sectors...

after the close, Cisco and Disney are due to report earnings, with Wal-Mart and Dell due on Thursday...

[54anickel]

66. Oh, I took to long on mine again!

[54anickel]

65. Closing

US$ Still a ways off from pre-job numbers on Friday (89.7 +/-), but it's climbing a bit.

Last trade 88.82 Change +0.36 (+0.41%)
High 88.85 Low 88.21


Dow 9,944.67 +130.01 (+1.32%)
Nasdaq 1,808.70 +34.06 (+1.92%)
S&P 500 1,079.04 +13.82 (+1.30%)
10-yr Bond 4.287% +0.043
30-yr Bond 5.066% +0.021
NYSE Volume 1,245,555,000
Nasdaq Volume 1,472,120,000

Close: The Fed raised the fed funds rate target 1/4% to 1 1/2%...the move, announced at 2:15 ET, was fully expected and had little impact on the day's action...stock indices opened higher, trended higher through early afternoon, and improved even more after the Fed announcement, closing at their highs of the day...the Fed statement noted that energy prices had slowed economic growth, and that labor market improvement had slowed...other than that, the statement was exactly the same as from the prior meeting...there were thus no real clues as to what the Fed might do at the September 21 meeting...
the statement reiterated that "the Committee believes that policy accommodation can be removed at a pace that is likely to be measured"...the data between now and then will determine what the Fed does...oil prices pushed through $45 a barrel today, but had little impact on stocks, and closed down $0.32 at $44.52...volume was extremely light again today...the steady, positive action today was largely seen as a bounce from oversold conditions, and was led by technology and financial services sectors...

after the close, Cisco and Disney are due to report earnings, with Wal-Mart and Dell due on Thursday...NYSE Adv/Dec 2384/917, Nasdaq Adv/Dec 2210/910

3:30PM : Focus is now on Cisco, which is due to report after the close...expectations are that the company will report earnings of $0.20 per share in earnings, up signficantly from $0.15 a year ago...revenue expectations are close to $5.9 billion...of critical improtance to the tech sector will be the tone of the guidance the company gives for the upcoming quarter...volume did not pick up appreciably after the Fed announcement and it now looks like NYSE will post only about 1.2 billion shares traded today...NYSE Adv/Dec 2359/893, Nasdaq Adv/Dec 2135/949

Advances & Declines
NYSE Nasdaq
Advances 2427 (70%) 2235 (68%)
Declines 878 (25%) 883 (27%)
Unchanged 151 (4%) 133 (4%)

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

Up Vol* 1052 (84%) 1087 (73%)
Down Vol* 183 (14%) 359 (24%)
Unch. Vol* 11 (0%) 23 (1%)

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

New Hi's 31 16
New Lo's 47 178


Have a great night everyone! :hi: