STOCK MARKET WATCH, Wednesday 3 August

[ozymandius]

Wednesday August 3, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 171 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 226 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 290 DAYS
DAYS SINCE ENRON COLLAPSE = 1347
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


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




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

AT THE CLOSING BELL ON August 2, 2005

Dow... 10,683.74 +60.59 (+0.57%)
Nasdaq... 2,218.15 +22.77 (+1.04%)
S&P 500... 1,244.12 +8.77 (+0.71%)
10-Yr Bond... 4.34% +0.02 (+0.39%)
Gold future... 0.00 UNCH (UNCH)

GOLD, EURO, YEN, Dollars and Loonie




PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Ike Iossif - WEEKLY CHARTS

Summary

Last week we said,

"We got half of the indicators implying that a pullback is to be expected next week, while the other half are implying that further price strength ought to be expected. When you put it all together it means that we ought to expect a choppy and difficult market to trade going forward. This type of market condition precedes market tops of significance, but we do not believe that such top is completed. It has a bit more to go. Nevertheless, we do believe that we ought to expect a pullback sometime this week, and depending upon how deep the pullback turns out to be, we will draw further conclusions with regards to how far we are into the topping process."

(7-29-05) All the indicators have formed patterns that are identical to the ones we observed in early and mid-June which resulted in the current rally. Therefore, it is quite possible that we will get a similar bullish outcome the second time around. However, these types of patterns tend to be a bit reliable the first time they occur, because the second time everybody is aware of them expecting the same results, and that is when the markets get "cute" and decide to fool the majority by doing exactly the opposite thing! In any case, given where we are at this point we must seriously consider both outcomes. Either the market is consolidating in a bullish manner like it did previously, or it is building a top of significance and instead of a bullish resolution, we'll get a break-down. If the SP can stay above 1230-1220 over the next 5 trading days, the odds favoring a bullish resolution that will take the SP up to the 1280-1290 zone will increase dramatically (see scenario#1 directly below). On the other hand, if the SP closes below 1220 for two consecutive days sometime over the next 5-7 trading days, the odds favoring a bearish resolution that will take the SP down to the 1200 zone, will increase dramatically (see scenario#2 directly below). Furthermore, a close below 1200 can result in a full scale retreat back down to channel support in the 1170-1165 zone (see scenario#3 directly below).

more...

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

[ozymandius]

2. THE DAY AFTER TOMORROW - Part 3: The Great Unraveling

J. Gordon Grecko Flies Home

The plane flight home from Positano was long and fretful. Grecko was unable to concentrate and that was starting to bother him. He could not afford to lose his nerve just now. He needed to focus and keep his wits about him. He had been in similar straights before and had always managed to pull himself out of a jam.

The fund’s Achilles heel was leverage. Over the last two years leverage in the fund had increased substantially as spreads narrowed. With financing so accessible it had been easy to leverage up. Leverage enabled Grecko to trade on a larger scale, squeezing nickels and pennies long after others had abandoned the field.

However, debt is a two-edged sword. Debt enhances returns when things are going your way in the markets. It becomes a deadly force when markets turn against you. The key to being a player in this market was to cut your losses short and maintain liquidity, but many of the fund’s positions were illiquid. There is nothing wrong with being illiquid—unless you are forced to sell in a hurry. That is when you find out the real price of things.

-cut-

The source of any trouble can seem insignificant when it begins. But small beginnings can amount to big consequences. That is the way history is written. A source of irritation—dismissed by leaders or market participants—often ends up becoming the turning point, the fulcrum upon which the balance of power changes or market trends reverse. An archduke is shot, a harbor is bombed, the stock market crashes, and a chain of events is ignited. Suddenly a tinderbox is lit. The focus of observation changes, crises erupt and the world becomes a different place. Without warning, there comes that day when an event catches the experts off guard. This is when the unexpected emerges out of nowhere, through an event or events that nobody anticipated and the experts didn’t foresee. The experts call them "standard deviations," which appear at the tail of the bell-shaped curve. Although often dismissed as unlikely, far too many incidents at the extremes fill market history. As it turns out, the tails are more swollen than is commonly believed.

more...pretty long too

http://www.financialsense.com/stormwatch/2005/0729.html

[ozymandius]

3. ugly sentiments this morning

9:00AM: S&P futures vs fair value: -4.1. Nasdaq futures vs fair value: -8.0. Futures market weakens, indicating an even lower open for stocks, as five consecutive weekly gains for the broader market continues to invite some early consolidation... So far, not even a modest rebound in bonds, ahead of the Treasury Dept.'s expected affirmation of the 30-year bond's return, coupled with a proposed $3.8 bln offer from Adidas-Salomon to buy Reebok (RBK), have provided much relief

8:30AM: S&P futures vs fair value: -2.5. Nasdaq futures vs fair value: -5.5. Still shaping up for the major averages to open lower as futures indications continue to hover below fair value... The absence of any notable economic data - until July ISM services (consensus 61.0) is released at 10:00 ET and the EIA's weekly oil report at 10:30 ET - to provide a more definitive tone to pre-market trading have also underpinned a more cautious stance

8:00AM: S&P futures vs fair value: -2.3. Nasdaq futures vs fair value: -5.5. Futures market versus fair value suggesting a lower open for the cash market as oil prices above $62/bbl and mixed earnings reports ignite some early profit-taking on the heels of four-year highs for the S&P and Nasdaq... Blue chips like CVS Corp (CVS) and Cigna (CI) have beaten forecasts while Time Warner (TWX) and Duke Energy (DUK) have missed analysts' expectations

[54anickel]

4. "Real" Nervous Indigestion

lotsa charts and tables

http://www.contraryinvestor.com/moprinter.htm

Hey Fella With The Million Smackers, And Nervous Indigestion. Rich Fella Eatin’ Milk And Crackers, I'll Ask You One Question…As was completely expected, fully discounted and widely anticipated by the markets, we now have Fed Funds rate increase number nine under our belts for this cycle. Don't you worry, number ten is just days away at this point. And as of now, the Fed Funds futures market is "telling" us there's a near 100% probability of another hike to come on September 20. Mark your calendars! Very quickly, we thought we’d provide a bit of broader perspective on just how monetarily “tight” the Fed really is at this point. As we’ve discussed many a time lately, we need to remember that credit being created outside of the US banking system, over which the Fed has little to no control, is still very substantial, regardless of what happens with the Funds rate at any point in time. In fact, this is really one of the first Fed tightening cycles where the credit markets have completely overridden Fed actions by voting and acting to keep long rates low, fueling the housing bubble. It's absolutely a clear sign that the Fed is much less in control of the broader credit markets than may be widely believed.

snip>

Is it really all doom and gloom? No, but what stands out like a sore thumb is that households in general have really not improved their balance sheet lot as it applies to household real estate over the last decade of phenomenal gains in prices. In other words, the asset inflation in real estate has been monetized to a great extent. We’ve prepared a table below that looks at the percentage of equity in household holdings of residential real estate over the last ten years. Alongside is the year over year change in residential real estate prices from the OFHEO (government agency regulatory body) data. As you can see, over the whole US since 1996, prices of homes have doubled on a compounded rate of return basis. Now clearly this is aggregate data. We know that many areas have probably tripled. But over the ten year period where nationwide prices have doubled in aggregate, the average US household today still has roughly 56% real estate equity relative to market value. There has been no improvement in this measurement at all over the last ten years.

Is this necessarily a terrible thing? Of course not. But what it does embody is a bit of a dichotomy. Certainly there are a number of folks who have never borrowed another nickel of mortgage debt over the last 10 years that probably have equity of 60,70,80%+ or more in their homes based on current market values. And, in like manner, there are plenty of folks who probably have equity ratios of 10% or less, even at this point. It’s all a blend. If homes in aggregate were worth $1 in 1996, the numbers tell us that today they are worth $2. Debt in 1996 was 43.4 cents and equity 56.6 cents. At today’s $2 value and 56.3% equity ratio, debt is now 87.4 cents and equity is $1.126. Dollars and cents equity and debt have both doubled over this period. Simple. In aggregate, no one is worse off or better off in terms of percentages of debt and equity in household real estate. So just where is the "wealth effect", so to speak? Yes, absolute dollar equity has doubled. That's great. But so has absolute dollar debt relative to market values. These numbers also suggest it was the debt acceleration that fueled price acceleration. They literally went hand in hand in percentage growth terms. As you know, the debt is now chiseled in marble. But the equity portion of the equation will either benefit or be beheaded by always moving market values ahead. It’s simply the nature and character of any balance sheet interplay.

snip>

So, where to from here? We'll give you a quick hint, if it's not higher, that wouldn't be a good thing for the consumption and housing driven US economy. In the 2Q GDP report last Friday, quarter over quarter real GDP grew $92.7 billion. Of that, consumption increased $63.4 billion and fixed residential investment (housing) increased $13.8 billion, collectively accounting for 83% of the net quarter over quarter increase in real GDP. Moreover, fixed residential investment as a percentage of GDP rose to 6%. For you history buffs, that's a new fifty year high. How about one last historical marker before we part company? Along with the GDP report last week came the Employment Cost Index for 2Q. The year over year change in wages and salaries recorded it's lowest level EVER. Let's see, new lows on wage growth and new highs in housing as a percentage of GDP. Now do you know why we're so hung up on monitoring the rate of change in household credit acceleration? Just as long as we're clear on what's really driving the US economy at the margin.

more...

[UpInArms]

5. daily dollar watch

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

Last trade 88.03 Change -0.73 (-0.82%)

Dollar Fortress Proves To Be A House Of Cards

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2645&Itemid=39

EUR/USD – Euro longs continued to assault the 1.2200 figure despite the initial rebuff from the dollar bulls with the pair falling back toward the 1.2150 mark. As euro found active bids around the 1.2150, the next assault on the 1.2200 handle will most likely see the pair take on the dollar offers around the 1.2280 as the level is marked by the dark cloud cover reversal pattern. A move above will most likely see the euros advance toward the 1.2483, a key 38.2 Fib of the 1.3477-1.1869. Indicators remain supportive of the move to the upside with momentum indicator above the zero line, MACD sloping upward toward the zero line and neutral oscillators giving the single currency bulls enough room to maneuver before the pair becomes oversold and vulnerable to the countermove by the greenback bulls.

<snip>

USD/JPY – Japanese Yen traders were on the receiving end of the greenback counterattack, but managed to hold the pair below the 112.00 handle, as convergence of the MA’s created additional resistance around the 112.00 level. As the pair head lower, yen longs will most likely encounter active dollar bids around the psychologically important 110.00 figure, as the level stopped previous yen rally, which is marked by the 38.2 Fib of the 104.20-113.74 USD rally. A break below the Fib will most likely open the 107.00-109.00 zone as the next target for the yen bulls, but the 107.84 level, marked by the 61.8 Fib might give the yen bulls a tough time. Indicators continue to favor a move to the downside with ADX falling below the 25, thus signaling the end of the dollar dominated trend and additionally both MACD and momentum indicator continue sloping downward toward the zero line with both oscillators remaining in a neutral territory.

...more...

Have a Great Day Marketeers!

[UpInArms]

6. U.S. Treasury to bring back 30-year bond next year

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38567.3751420255-839835991&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) - In a concession to the new era of deficits, the U.S. Treasury said Wednesday it would reintroduce the 30-year bond with semiannual auctions beginning early next year. The first 30-year bond will be auctioned in the first quarter and will mature on Feb. 15, 2036. Also Wednesday, the Treasury said it will offer $44 billion of Treasury notes next week. The government will auction $18 billion in 3-year notes on Monday, $13 billion in 5-year notes on Wednesday and $13 billion in 10-year notes on Thursday to refund about $18.6 billion in maturing notes and raise about $25.4 billion in new funds.

9:00am 08/03/05 TREASURY TO AUCTION $18 BILLION IN 3-YEAR NOTES

9:00am 08/03/05 TREASURY TO AUCTION $13 BILLION IN 5-YEAR NOTES

9:00am 08/03/05 TREASURY TO AUCTION $13 BILLION IN 10-YEAR NOTES

9:00am 08/03/05 TREASURY TO SELL $44 BILLION IN NEXT WEEK'S REFUNDING

[UpInArms]

13. Bargain hunters lift Treasuries, refunding awaited

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-03T125445Z_01_N03309620_RTRIDST_0_MARKETS-BONDS.XML

NEW YORK, Aug 3 (Reuters) - U.S. Treasury debt prices rose on Wednesday as buyers stepped in after three days of declines which were prompted by a rash of strong economic data that all pointed to further U.S. official interest rate hikes.

"I don't call it bargain hunting. This stuff is not cheap. I call it bottom picking," said one trader, who said he expected prices to chop around in a fairly tight range due to position-squaring ahead of Friday's non-farm payrolls data.

More immediately, the market is looking ahead to the Treasury Department's refunding announcement at 9 a.m. (1300 GMT). New debt issuance was expected to be $44 billion, down from the $51 billion seen last quarter, as increased tax receipts reduce the need for government borrowing.

Benchmark 10-year notes were 5/32 higher to yield 4.32 percent, after ending the day Tuesday at 4.34 percent, 1 basis point under a technical barrier at 4.35 percent.

...more...

[UpInArms]

14. Fed adds reserves via overnight system repurchases

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-03T133222Z_01_N03342384_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, Aug 3 (Reuters) - The Federal Reserve said on Wednesday it was adding temporary reserves to the banking system through overnight system repurchase agreements.

Fed funds last traded at 3.25 percent, the Fed's current target for the rate on overnight loans between banks.

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

[UpInArms]

16. Snow- 30-year bond sales to lengthen debt maturity

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-03T134325Z_01_WBT003620_RTRIDST_0_ECONOMY-SNOW-BONDS-URGENT.XML

VITORIA, Brasil, Aug 3 (Reuters) - U.S. Treasury Secretary John Snow said on Wednesday that the reintroduction of 30-year U.S. Treasury bond sales will counter a trend toward a shrinking average maturity in outstanding government debt.

"The issuance of the 30-year bond will help stabilize the average maturity going forward," said Snow, during a visit to Brazil. He said sales of the 30-year bond, which begin early next year, will be "of relatively modest size" but gave no dollar estimate.

...very short blurb...

Vitoria, Brazil???

[UpInArms]

28. US Treasury sees $20-30 bln/year in 30-year sales

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-03T142350Z_01_WBT003621_RTRIDST_0_ECONOMY-TREASURY-REFUNDING-SIZE.XML

WASHINGTON, Aug 3 (Reuters) - The U.S. Treasury anticipates selling $20 billion to $30 billion in 30-year bonds each year when it resumes long bond sales in 2006, a Treasury official said on Wednesday.

"We feel that our 20 to 30 billion (dollars) in guidance ... (gives) market participants a pretty good feel for how we plan to proceed," Treasury Assistant Secretary Timothy Bitsberger told reporters, noting that specific auction sizes would not be announced until closer to each auction.

Bitsberger also told reporters the Treasury would likely bump into the statutory debt limit in the first quarter of 2006. He said plans for a 50-year bond are "not on the table."

...more...



The estimated population of the United States is 296,671,577
so each citizen's share of this debt is $26,572.73.

The National Debt has continued to increase an average of
$1.64 billion per day since September 30, 2004

[54anickel]

20. .."raise about $25.4 billion in new funds" Uhhh, don't they really mean

BORROW? Doesn't that just end up being tacked onto the deficit?

Guess they can't use the word earn (that would mean an exchange of goods or services - something tangible). Sure don't want to use the word borrow since that brings up the notion of debt. So they use RAISE. Like in a fund raising event. Of course that makes ME think of a telethon - really not much of a better term if you give it enough thought and let you mind wonder.

[UpInArms]

23. Fannie Mae joins the "fund raising" bandwagon

New Issue - Fannie Mae sells $6.5 billion in bills

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-03T141634Z_01_N03531854_RTRIDST_0_FINANCIAL-FANNIEMAE-BILLS-URGENT.XML

WHITE PLAINS, N.Y., August 3 (Reuters) - Fannie Mae (FNM.N: Quote, Profile, Research), the No. 1 U.S. home funding company, said on Wednesday it sold $4 billion of three-month benchmark bills due Nov. 2, 2005 at a stop-out rate of 3.540 percent, $1.5 billion of six-month benchmark bills due Feb. 1, 2006 at a stop-out rate of 3.768 percent and $1.0 billion of one-year bills due July 28, 2006 at a stop-out rate of 3.920 percent.

The three-month bills were priced at 99.105 and have a money market yield of 3.572 percent, the six-month bills were priced at 98.095 and have a money market yield of 3.841 percent and the one-year bills were priced at 96.091 and have a money market yield of 4.079 percent.

Settlement is August 3-4.

[UpInArms]

31. Auctions Shy of Forecast

9:05am 08/03/05 <$TNX> 10-YEAR TREASURY HOLDS GAIN AS AUCTIONS SHY OF FORECAST

[UpInArms]

56. US revives 30-year bond, sees better budget outlook

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-03T174856Z_01_N03691302_RTRIDST_0_ECONOMY-TREASURY-REFUNDING-UPDATE-4.XML

WASHINGTON, Aug 3 (Reuters) - The U.S. Treasury Department said on Wednesday it would resume selling 30-year bonds in early 2006 after a hiatus of more than four years, and scaled back its debt offerings this quarter to reflect an improved government budget outlook.

The Bush administration ended 30-year bond sales in October 2001 in anticipation of low borrowing costs and continued fiscal surpluses. Bond markets have since clamored for its return to provide a benchmark for long-term debt like mortgage-backed securities.

In a nod to Wall Street, and facing budget deficits that followed a recession, stock market collapse, tax cuts and war costs, Treasury said it would reinstate sales of 'long bonds' to give the government more borrowing options.

...more...

Not to diminish the recession and stock market collapse (caused by the failed fiscal policies of these cretins, the TAX CUTS and WAR COSTS could have been avoided entirely.

[UpInArms]

7. Today's Report:

http://biz.yahoo.com/c/e.html

Aug 3	10:00 AM	ISM Services	Jul	-	61.0	61.0	62.2	-

also the petroleum inventory reports will be released by the DOE and the API

[UpInArms]

19. July ISM DOWN to 60.5% from 62.2% in June

10:00am 08/03/05 U.S. JULY ISM SERVICES BELOW CONSENSUS 61.4%

10:00am 08/03/05 U.S. JULY ISM SERVICES 60.5% VS 62.2% IN JUNE

10:03am 08/03/05 U.S. JULY ISM SERVICES EMPLOYMENT 56.2% VS 57.4% JUNE

U.S. July ISM services index slows to 60.5%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38567.420786169-839839246&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- Nonmanufacturing sectors of the U.S. economy expanded at a slower pace during July, the Institute for Supply Management reported Wednesday. The ISM nonmanufacturing index fell to 60.5% from 62.2% in June. The drop was more than expected. Economists were looking the index to slip to 61.4%. New orders rose to 61.9% from 59.5%. The employment index slipped to 56.2% from 57.4%.

[UpInArms]

29. Price index jumps to highest level this year

http://www.marketwatch.com/news/story.asp?guid=%7BBB9FBC61%2D272A%2D4877%2D96A4%2DAC26E55526F3%7D&siteid=mktw

The ISM nonmanufacturing index slipped to 60.5% from 62.2% in June. Read full survey.

The drop was more than expected. Economists expected the index to slip to 61.4%, according to a survey conducted by MarketWatch. See Economic Calendar

Readings over 50% in the diffusion index indicate expansion in the nonmanufacturing sectors of the economy, including services, agriculture, mining and construction.

The index has been above 50% for 28 months.

In July, new orders rose to 61.9% from 59.5%.

The prices-paid index jumped to 70.3% from 59.8%. It is the highest level since December. Ralph Kaufman, chairman of the ISM's nonmanufacturing survey committee, said survey participants blamed the increase entirely on higher oil prices.

...more...

Didn't Meanspin say that high oil prices were NOT A PROBLEM??

:banghead:

[UpInArms]

27. U.S. GASOLINE INVENTORIES PLUNGE; CRUDE SUPPLY RISES

10:32am 08/03/05 SEPT CRUDE UP 46C AT $62.35/BRL

10:32am 08/03/05 SEPT GASOLINE UP 1.3% AT $1.805/GAL

10:30am 08/03/05 U.S. CRUDE STKS UP 200,000 BRLS LAST WK: ENERGY DEPT

10:30am 08/03/05 U.S. GASOLINE STKS DOWN 4 MLN BRLS: ENERGY DEPT

10:30am 08/03/05 U.S. DISTILLATE STKS UP 1.5 MLN BRLS: ENERGY DEPT

[UpInArms]

33. API posts fall in crude stocks

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7BB8F31194-0FD9-4678-815A-2281EB5BC8AD%7D&

SAN FRANCISCO (MarketWatch) -- The American Petroleum Institute said crude inventories for the week ended July 29 fell by 4.9 million barrels. In contrast, the Energy Department posted a 200,000-barrel climb. Motor gasoline inventories were up 55,000 barrels, according to the API. The Energy Department reported a 4 million-barrel drop. The API said distillate stocks were up 1.7 million barrels, nearly in line with the 1.5 million-barrel climb reported by the government. September crude is down 9 cents at $61.80 a barrel in New York.

[54anickel]

8. Greenspan’s Watershed

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/FF/2005/FF+August.htm

snip>

It should also be a watershed because his testimony should show us what Greenspan’s current feelings are about the economy versus the property market.

Versus? Is there antagonism there?
Theoretically, they have been tightening monetary policy over the last year to do two things: One, to normalize back from accommodation towards neutral, and two, to pre-empt any incipient cyclical inflationary pressures. Well, if you look at the data for recent months, you clearly see that the incipient inflationary pressures have dissipated, with commodity prices down, with the PPI pipeline rolling over in response to the commodity prices being down, and with the purchasing managers price index falling to 50. Or with the very sturdy dollar. So when you look at all your traditional inflationary indicators, the natural response is, "Where is the beef now?" There just ain’t no beef to inflation now. They can say there were incipient pressures six months ago, but those inflationary pressures have dissipated. So the Fed no longer has the inflation justification for continuing to beat us about the head and shoulders with rates. Besides, they’ve moved short rates up from 1% to 3.25% and that is a very material increase in short-term interest rates. Therefore, the putative problem of inflation pressures has been pounded down-that’s pretty good alliteration!

And tripped so lightly across your silver tongue—
Okay. They’ve materially increased both nominal and real short-term interest rates. And, what’s more, you have had a very material flattening of the yield curve. So when you put all that together, logic would suggest that a reasonable man would conclude enough is enough. As a matter of fact, that would be a very reasonable thing for Mr. Greenspan to do next week. The tricky thing is that in recent months he has been given to talking about froth in the property market-though he walks all around the whole issue. The man has difficulty actually mouthing the word "bubble," I think.

It is just not part of his lexicon.
It is really difficult for him to form that word. It is kind of like a Baptist ordering a beer. He just can’t utter the word. But he has been talking about the issue. He is saying it is not a national bubble. But then again, he has also been talking about his "conundrum" ever since February. So the key issue is whether, notwithstanding all of the traditional indicators saying enough is enough on the tightening, he is going to articulate that "I am going to override those signals and tighten some more." If that’s what he says , this will be taken by the marketplace as an indication that he is actually targeting asset prices, longer-term bond prices and property prices.

That is why this testimony will be intensely watched; it could mark a watershed. Fundamentally, it should reveal if the man has changed his stripes from targeting the traditional business cycle indicators of inflationary pressures (which are flashing everything is okay) to implicitly or, (even more of a watershed) explicitly targeting these two asset prices. That is the key issue for Humphrey-Hawkins.

As a sidebar, our elected representatives don’t tend to ask about long-term bond prices. They ask about long-term interest rates, which actually leaves me bemused more than anything else, given that the reality is that long-term interest rates and long-term bond prices are one and the same. You can’t talk about puzzlingly low long-term interest rates without talking about puzzlingly high long-term bond prices. Which means that if Greenspan says, "I am going to tighten monetary policy more to get those long-term interest rates up," he is effectively saying, "I am going to tighten monetary policy more to push down long-term bond prices." And that is called asset price targeting.

more...

[54anickel]

15. Had to add this tidbit on labor vs corporate profit

...And even more importantly, the year-over-year change in annual wages looks like a dead man’s electrocardiograph.

Utterly flat.
And going nowhere fast. At the same time, we have the reality that corporate profits as a share of GDP are as high as they have been in over three decades. Which is telling you that capital is getting a disproportionate share of productivity gains. That is axiomatic. We have had strong productivity gains. Meanwhile wages are going nowhere at the speed of light and corporate profits as a share of GDP are at the highest level in thirty years.

snip>

...But that is a really hard case to make, fundamentally, when corporate profits are at a multi-decade high as a share of GDP and while you are also arguing about the glories of this positive structural shock to productivity. Now, if anybody can make that case, it is Greenspan, because he is that clever. I take my hat off to him. That is not a criticism but a compliment. Or rather, it is a criticism as a citizen but a compliment as a fellow analyst. When you can convince somebody that Cold Duck is actually Dom Perignon, you are good.

on edit add

...the whole public policy issue of shares of GDP to labor versus capital is philosophically important in a democracy. And on a more practical level, the shifting of shares of GDP from labor to the corporate sector has real macroeconomic import, because the corporate sector is showing an amazingly muted propensity to spend its cash. Which therefore raises the issue of a shortage of aggregate demand. Because if you are shifting share of GDP to someone with a low propensity to spend, that makes it more difficult to get the self-sustaining properties of the economy to work....

[ozymandius]

64. bubbles, man, bubbles

[54anickel]

69. HA! Is that Greenspin doin' the whistlin"? Seems he's got hot air comin'

outta both ends these days.

[54anickel]

68. Fed sees bond market diluting interest-rate boosts

Damn those bond vigilantes!!! :evilgrin:

http://www.post-gazette.com/pg/05215/547984.stm

WASHINGTON -- As the Federal Reserve prepares to raise short-term interest rates again next week, officials there increasingly believe the bond market, which sets long-term rates, is diluting their efforts to tighten credit and contain inflation.

The result: The longer the bond market keeps long-term rates unusually low, the further the Fed is likely to raise the short-term rates it controls in an effort to keep the economy from overheating. Conversely, sharply higher bond yields would encourage the Fed to stop raising short-term rates.

This dynamic marks a striking break from the past when the Fed typically saw sharply higher bond yields as a reason to lift short-term rates further and low yields as a reason to worry about the economy.

Fed officials say future rate moves mostly depend on what data indicate about growth and inflation. With inflation low but the economy steadily using up unused capacity, officials plan to keep raising short-term rates to "neutral," a level thought to be between 3 percent and 5 percent that neither stimulates nor restrains economic growth. The bond market's unusual behavior is complicating that strategy by making it harder to know where neutral is.

more...

[UpInArms]

9. Oil hits new high on world supply worries ($62.47 bbl)

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-08-03T115829Z_01_L03544278_RTRIDST_0_BUSINESS-MARKETS-OIL-DC.XML

LONDON (Reuters) - Oil climbed to a new high on Wednesday on expectations that U.S. data would show another fall in the crude stocks of the world's biggest consumer and as big U.S. refiners struggled with unplanned shutdowns.

There were also fears of further disruption to U.S. Gulf of Mexico output as the government warned of a severe hurricane season, and worry over the long-term stability of the world's biggest oil producer Saudi Arabia after the death of King Fahd.

U.S. light sweet crude for September delivery hit a record high of $62.47 a barrel, up 58 cents, breaking through the front-month contract high of $62.30 set on Monday after Fahd's death.

London Brent crude rose to a peak of $61.25 a barrel, up 63 cents from Tuesday and also above its previous record high of $60.98.

...more...

[UpInArms]

10. US mortgage applications fall as rates climb - MBA

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-08-03T115902Z_01_N03487968_RTRIDST_0_ECONOMY-MORTGAGES-UPDATE-2.XML

NEW YORK, Aug 3 (Reuters) - Applications for U.S. home mortgages fell last week as interest rates on 30-year loans rose more than in any week since March, industry group figures showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity fell 0.3 percent to 752.1 in the week ending July 29, adding to the previous week's 5.8 percent loss. The four-week moving average is down 3.2 percent to 774.9 from 800.2.

Fixed 30-year mortgage rates, the benchmark for the mortgage industry, averaged 5.83 percent last week, excluding fees, up 11 basis points, or 0.11 of a percentage point, from 5.72 percent the previous week.

The last biggest one-week jump in the 30-year rate was in the week ending March 25, when it rose 13 basis points to 6.08 percent, its highest level this year.

Last week's slide in mortgage applications was in the refinancing sector. The MBA's seasonally adjusted index of refinancing applications dropped 3.0 percent to 2,250.3 after falling 11.4 percent the prior week.

...more...

[UpInArms]

11. red numbers at 9:43

Dow 10,651.34 -32.40 (-0.30%)
Nasdaq 2,211.24 -6.91 (-0.31%)
S&P 500 1,241.50 -2.62 (-0.21%)
10-Yr Bond 4.319 -0.17 (-0.39%)

NYSE Volume 117,581,000
Nasdaq Volume 136,149,000

[ozymandius]

12. Looks like the people who bought yesterday are being given "the business".

Stocks Open Lower Ahead of Economic Data

Stocks Open Lower on Some Profit-Taking Ahead of Economic Data

EW YORK (AP) -- U.S. stocks open lower Wednesday as some profit-taking is projected and investors wait for non-manufacturing and oil inventory reports later in the day.

-cut-

In U.S. corporate news, Time Warner Inc. reported a second-quarter loss of 7 cents a share, compared with earnings of 17 cents a share a year earlier. The company's revenue fell 1 percent in the quarter to $10.7 billion, with declines at the filmed entertainment and AOL units offset by growth in cable, networks and publishing. The company had charges of 25 cents a share in the quarter, bringing its operating income to 18 cents a share, a penny shy of analysts' estimates.

Time Warner also announced that it has reached an agreement in principle to resolve its primary securities class action litigation and established reserves of $3 billion related to this and other related securities litigation matters.

-cut-

Economists look for a minimal falloff to a reading of 62.0 in ISM's July non-manufacturing business activity index from 62.2 in June. ISM is expected to release its non-manufacturing report at 10:00 a.m. EDT on Wednesday.

more...

http://biz.yahoo.com/ap/050803/wall_street.html?.v=5

[UpInArms]

17. AIG sued by 17 insurers over reinsurance - WSJ

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-03T113910Z_01_N03682356_RTRIDST_0_FINANCIAL-AIG-LAWSUIT.XML

NEW YORK, Aug 3 (Reuters) - Seventeen insurers sued American International Group Inc. (AIG.N: Quote, Profile, Research), accusing the big insurer of trying to collect too much money on reinsurance coverage it bought from them, the Wall Street Journal said on Wednesday.

The lawsuit, filed in state court in Boston, was brought by members of three reinsurance pools, the newspaper said. These include American Reinsurance Co., a unit of Germany's Munich Re (MUVGn.DE: Quote, Profile, Research); and units of Hartford Financial Services Group Inc. (HIG.N: Quote, Profile, Research), Canada's Manulife Financial Corp. (MFC.TO: Quote, Profile, Research) and Swiss Re (RUKN.VX: Quote, Profile, Research).

AIG did not immediately return a call seeking comment. Spokesman Chris Winans told the newspaper the company denies all allegations of wrongdoing and said the dispute should be resolved in arbitration.

According to the newspaper, the insurers accused AIG and Trenwick America Reinsurance Corp. of fraud and conspiracy. The plaintiffs alleged that the two companies "colluded" to try to collect too much money, in part by submitting "suspicious" and "manufactured" claims.

...more...

"no impact" :rofl:

[UpInArms]

18. US Layoff Plans up 18% Year to Date

10:00am 08/03/05 U.S. LAYOFF PLANS UP 18% YEAR-TO-DATE: CHALLENGER

10:00am 08/03/05 U.S. JULY LAYOFFS UP 48% FROM JULY 2004

10:00am 08/03/05 U.S. JULY LAYOFF PLANS DOWN 7% TO 102,971: CHALLENGER

[UpInArms]

54. U.S. planned job cuts stay high

http://www.theglobeandmail.com/servlet/story/RTGAM.20050803.wchallenger0803/BNStory/Business/

Planned job cuts in the U.S. topped the 100,000 mark for a second straight month in July and are on track to surpass a million layoffs this year, outplacement firm Challenger, Gray & Christmas Inc. said Wednesday.

For the month, U.S. employers announced plans to cut 102,971 jobs, after 110,996 job-cut announcements in June, the Chicago-based company said. July's job cuts were 48 per cent higher than the same month a year ago.

So far this year, 641,245 job cuts have been announced, 18 per cent or almost 100,000 more than last year. July marked the third consecutive month and the fifth time this year that the monthly total was higher than last year.

If job cuts continue at their current pace, the year-end total will surpass last year's 1,039,935 level and mark the fifth straight year that 1 million job cuts were announced, the report said.

<snip>

“One would expect employers in the consumer products, financial and computer sectors to be adding workers by the boatload in an expanding economy,” he added.

...more...

So when will the mutants figure out there is no "expanding economy"?

[54anickel]

60. Guess we're entering an entirely new paradigm again. You don't

need a job anymore! Live off the wealth effect of you ASSets! It's a new economy.

Remember when Cheney made the comment regarding e-bay? We can all be self-employed - "Sanford & Son" on the internets. :crazy:

[UpInArms]

21. US home affordability drops in 2nd qtr - Realtors

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-08-03T140012Z_01_N02AFFORD_RTRIDST_0_ECONOMY-HOUSING-AFFORDABILITY-EMBARGO.XML

WASHINGTON, Aug 3 (Reuters) - U.S. home affordability in the second quarter of 2005 fell from the prior quarter and also was down from the second quarter of 2004, an industry group said on Wednesday.

The National Association of Realtors said its housing affordability index dropped to 120.8 in the second quarter from 133.2 in the first quarter. It marked a sharp decline from the second quarter of 2004 when the index stood at 132.3.

The housing affordability index measures the ability of a family earning the median income to buy a home at the median price.

Even with this drop in purchasing power, the country's home-buying stampede hasn't slowed. Last week, the NAR reported sales of existing U.S. homes reached a seasonally adjusted annual rate of 7.33 million in June and home prices jumped 14.7 percent, the largest increase since 1980. The Commerce Department also said sales of new U.S. homes rose 4 percent in June to an annual pace of 1.374 million.

When the index measures 100, a family earning the median income -- the level at which there are an equal number of families both above and below -- has exactly the amount needed to buy a single-family home at the median price, using conventional financing and a 20 percent down payment.

...more...

[UpInArms]

22. 10:12 EST numbers and blather

Dow 10,648.87 -34.87 (-0.33%)
Nasdaq 2,212.28 -5.87 (-0.26%)
S&P 500 1,241.60 -2.52 (-0.20%)
10-Yr Bond 4.314 -0.22 (-0.51%)

NYSE Volume 319,878,000
Nasdaq Volume 336,140,000

10:00AM: Equities still on the defensive as the bulk of sector leadership remains negative... Health Care has been weak, as selling pressure in the drug group overshadows a strong Q2 report and upside FY05 guidance from CIGNA Corp (CI 113. 29 +4.89), while a Q2 disappointment from Time Warner (TWX 17.10 -0.32) has weighed on Consumer Discretionary...

Consolidation throughout the brokerage and banking industries has kept the Financial sector underwater while Technology has also shown relative weakness, as modest strength in software fails to offset profit-taking in chip stocks after the PHLX Semi Index hit a new 52-week high yesterday... Energy, however, has extended yesterday's gains as oil prices trade at record levels ahead of weekly inventories data (10:30 ET)... The EIA is expected to show a 1.3 mln barrel decline in crude supplies, an 800K barrel draw in gasoline supplies and a 2.0 mln barrel build in distillates...DJTA -0.6, DJUA -0.1, DOT -0.6, Nasdaq 100 -0.4, Russell 2000 -0.5, SOX -1.0, S&P Midcap 400 -0.4, XOI +0.4, NYSE Adv/Dec 1021/1498, Nasdaq Adv/Dec 881/1535

9:40AM: Market opens to the downside as oil prices at record highs provide investors with an excuse to lock in recent market gains... Crude oil futures ($62.40/bbl +$0.51) setting another intraday high, amid concerns of hurricane-related disruptions, ongoing refinery problems and an expected fifth consecutive weekly decline in crude supplies, have incited early profit-taking a day after the S&P and Nasdaq hit new four-year highs...

However, it is worth noting that even in the face of a 44% surge in oil (from $35/bbl to 62/bbl) over the last year, real GDP is up about 4% and the S&P 500 index has climbed 12%, demonstrating incredible resilience...

[UpInArms]

24. Moody's cuts Toys R Us debt rating, may cut again (Good Junk?)

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-03T142224Z_01_WNA5761_RTRIDST_0_RETAIL-TOYSRUS-MOODY-S-URGENT.XML

NEW YORK, Aug 3 (Reuters) - Moody's Investors Service on Wednesday cut its debt ratings on Toys R Us and said it may cut them again, citing an increase in leverage after the company's buyout by an investment group.

The acquisition, by Bain Capital Partners LLC, Kohlberg Kravis Roberts & Co. LP and Vornado Realty Trust, was completed last month.

Moody's cut the corporate family rating on Toys R Us to "B1," the fourth-highest junk rating, and the senior unsecured notes rating to "B3," two notches lower.

[UpInArms]

25. Hedge Fund Growth Slowest since 4Q 2001

10:26am 08/03/05 HEDGE FUND ASSETS REACH ABOUT $1 TRILLION - TREMONT

10:23am 08/03/05 HEDGE FUNDS ATTRACT $11.6B IN ASSETS IN 2Q - TREMONT

10:24am 08/03/05 HEDGE FUND ASSET GROWTH SLOWEST SINCE 4Q 2001 - TREMONT

[UpInArms]

26. Former Prudential broker charged with FRAUD

http://www.marketwatch.com/news/story.asp?guid=%7B5B3BD963%2D5493%2D4799%2DA4CD%2DA5FE987AC8BE%7D&siteid=mktw

BOSTON (MarketWatch) -- Federal prosecutors have filed charges against a former broker at Prudential Securities in connection with fraudulent trading in mutual funds.

U.S. Attorney Michael Sullivan said late Tuesday that Skifter Ajro, 37, was charged in an "information" with two counts of wire fraud and two counts of securities fraud.

An information is not a formal indictment, and often signals a plea agreement may be in the works.

In a statement, federal prosecutors alleged Ajro and other brokers at Prudential securities engaged in deceptive and fraudulent behavior to execute "market timing" trades on behalf of seven hedge-fund clients.

Market timing is the rapid buying and selling of mutual-fund shares, a practice that can erode the returns of long-term shareholders.

The prosecutors allege Ajro made over $700,000 in gross commissions for himself and over $200,000 in net commissions as a result of the market-timing trades.

...more...

[UpInArms]

30. 10:46 EST numbers (looking better?) and blather (What? Me? Worry?)

Dow 10,664.47 -19.27 (-0.18%)
Nasdaq 2,214.01 -4.14 (-0.19%)
S&P 500 1,243.21 -0.91 (-0.07%)
10-Yr Bond 4.297 -0.39 (-0.90%)

NYSE Volume 514,881,000
Nasdaq Volume 513,972,000

10:30AM: Major indices continue to chalk up losses as the day's only scheduled economic report fails to offer much excitement... The July ISM services index fell to 60.5, checking in just shy of an expected read of 61.0 and down from a strong 62.2 in June... While the strength of the non-manufacturing sector is not in question and the data have little economic implication, investors have basically shrugged off the report in anticipation of Friday's widely watched July employment report to provide a more significant update on the health of the economy...NYSE Adv/Dec 1145/1701, Nasdaq Adv/Dec 937/1699

[UpInArms]

32. Cinergy, Duke planning (1,500) job cuts

http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050803/BIZ/508030340/1001

When their proposed merger is complete, Cinergy Corp. and Duke Energy Corp. expect to cut 1,500 jobs and share 30 percent of the cost savings with their customers in Southwest Ohio and Northern Kentucky, according to testimony filed this week with regulators.

Job cuts will be "equitable across the two companies," according to the merger agreement, but a specific allocation hasn't been determined, said Cinergy spokesman Steve Brash.

"We are not there yet," he said.

Of the 1,500 estimated job reductions, the companies have projected that 574 will come from corporate functions, 432 from their regulated utilities, and the rest from non-regulated businesses, Brash said.

...more...

[54anickel]

34. Go make a fortune in commodities and make us all proud of you (Mogambo)

http://www.kitco.com/ind/Daughty/aug032005.html

snip>

"As credit contracts and interest rates surge, home prices will plunge, wiping out trillions of dollars of paper equity for millions of American homeowners. However, while the equity will vanish, the mortgage debt will not only remain, but be that much more costly to service. Imagine the implications for the U.S. economy and dollar-denominated financial assets, should this financial nightmare become a reality."

Perhaps this has something to do with Dan Denning, with Strategic Alliance, writing "Good-paying, white-collar, 'Ward Cleaver' jobs disappear." But it is not only jobs, but everything else is in danger of disappearing, too! For example, he postulates that we will also see where "Soaring health care expenses go unpaid. Property prices plunge in the wake of panic selling. Rampant price inflation sends the cost of food and energy soaring to new highs. Police, fire, and highway crews shut down services in strapped states and cities. Countless schools close for lack of funding. City and state governments default on their bonds. One 'safe' pension fund after another goes the way of Enron."

snip>

Mr. Denning thinks I am not being forceful enough, and so he shoulders me aside, and takes over the microphone and says "Please understand that these are not alternatives. As Peter Peterson, former White House economic adviser, says, 'Absent a colliding comet or an alien invasion, this will surely happen.' There is no way for American investors to avoid this event. They can only choose how to protect themselves from the outcome."

snip>

And the gains in corn are sown (cute pun, huh?) by Congress, as part of the new energy bill, which contains all kinds of gigantic tax credits and deductions for all kinds of things, including ethanol, which is made from the sugar in some foods. Ergo, corn will do well for three reasons. 1) The Chinese have a stronger yuan, making corn cheaper for them to buy, 2) there is a drought all over the damned place, 3) and now Congress has made it financially advantageous to also compete for corn. So, the Mogambo Tip o' The Day (MTOTD) is relayed when I reach out and place my hand on your shoulders, look into your eyes, and say "Buy corn." Fade out, and you are left with an indelible memory, so that years and years later it will pop into your mind as you are scratching around in the dirt looking for bugs to eat, and you will wail in woe because you did not follow the path of the Mogambo (POTM).


snip>

- John Crudele of The New York Post reports that “American Auto Association calculates that gasoline prices have risen 21.5% since this same time last year. But the government swears gas prices are only 6.9% higher over the year." What a discrepancy! The upshot is “That little trick alone saved the CPI from being 0.53% points higher."

And it is not just about gas, as he goes on to write, “Despite all you’ve read, the government thinks housing is only 2.2% higher over the past year. Others, including the National Association of Realtors, calculate that housing is up at least 12.5%.”

more...

[54anickel]

35. Ewww, missed this part....

In short, your government has screwed things up royally, but instead of fixing the problems they caused, they prefer to lie about it.

But they don't have to lie about it if they can keep it secret. Paul K. McMasters, who is the "First Amendment ombudsman at the Freedom Forum's First Amendment Center" says that the "latest figures released by the federal Information Security Oversight Office show that government workers are manufacturing secrets at the rate of 125 a minute, or 15.6 million a year. At the same time, they are declassifying fewer secrets, and the president is extending classification authority to more departments and agencies. Layered on top of those secrets are an even greater number of pseudo-secrets labeled 'sensitive but unclassified' that, too, are beyond the reach of the public."

What makes this so bad is that "The problem with excessive government secrecy is that it is a refuge for incompetence -- or worse. It is a policy reeking of desperation -- or worse. It is reflexive rather than deliberate, defeatist rather than courageous. And in the end it hides not only what our leaders know but, more important, what they don't know."

[UpInArms]

37. It hides their CORRUPTION AND INCOMPETENCE

:argh:

[UpInArms]

36. Coming Soon: Adid-Bok Shoes

Adidas to buy Reebok for $3.8 billion

http://www.marketwatch.com/news/story.asp?guid=%7BC5319E75%2D252D%2D4950%2D869D%2DBC1FBB99B546%7D&siteid=mktw

LONDON (MarketWatch) -- Adidas-Salomon AG, the German athletic-apparel maker, reached an agreement Wednesday to buy U.S. rival Reebok International Ltd. for $3.8 billion in a bid to boost its presence in North America and better compete with Nike Inc.

Adidas (DE:500340: news, chart, profile) is paying $59 a share for Reebok (RBK: news, chart, profile) , a 34% premium over Reebok's $43.95 close Tuesday.

Reebok shares climbed 29.6% to $56.96 in early U.S. trade, and Adidas-Salomon shares rose 6.3% in Germany after early declines.

"This is a once-in-a-lifetime opportunity to combine two of the most respected and well-known companies in the worldwide sporting goods industry," said Herbert Hainer, chairman and chief executive of Adidas-Salomon.

...more...

[UpInArms]

38. 11:17 EST numbers (closer to waterline) and blather

Dow 10,671.88 -11.86 (-0.11%)
Nasdaq 2,213.73 -4.42 (-0.20%)
S&P 500 1,243.65 -0.47 (-0.04%)
10-Yr Bond 4.300 -0.36 (-0.83%)

NYSE Volume 670,581,000
Nasdaq Volume 663,219,000

11:00AM: Market rebounds somewhat as oil prices turn negative following an unexpected build in weekly crude inventories... Even though distillates rose a less than expected 1.49 mln (consensus +2.0 mln) and gasoline inventories fell 4.02 mln barrels (consensus -800K), which sent gas futures ($1.81/gal) to their highest levels ever, an unforeseen build of 196K barrels in crude oil supplies (consensus -1.3 mln) has pushed oil futures ($61.72/bbl -$0.17) below yesterday's record close, modestly improving overall sentiment... NYSE Adv/Dec 1180/1763, Nasdaq Adv/Dec 973/1775

[ozymandius]

41. This is very selective reasoning.

The DOE and the API offer differing views on crude inventory. Yet numbers rise on the more optimistic number. Gods! it must be great to have that level of optimism. They must have happy chemicals flowing through their veins.

[54anickel]

39. Japan PM seeks to reassure opponents of post reform (privatization)

&cap=Japan's%20Prime%20Minister%20Junichiro%20Koizumi%20answers%20an%20opposition%20party%20member's%20questions%20during%20a%20plenary%20session%20at%20the%20Upper%20House%20in%20Tokyo%20July%2013,%202005.%20%20REUTERS/Yuriko%20Nakao

snip>

"I think that the post office network is an asset of the people," Koizumi told a special upper house panel.

"I realise there are concerns whether financial services such as savings and insurance can be retained in sparsely populated areas ... but we have provided the means so that such services will be provided as they are now," Koizumi said.

Koizumi was speaking one day after the battle with LDP rivals took a nasty turn when a lower house lawmaker committed suicide, apparently because he had been torn over whether to vote for or against the controversial legislation.

Koizumi has made the legislation to privatise the postal delivery, savings and insurance system, including the world's biggest bank, the centrepiece of his reform platform.

snip>

Boasting a network of almost 25,000 post offices and $3 trillion in assets, Japan Post does more than just deliver mail. Japanese savers have made it the world's biggest deposit-taking institution and its life insurance business equals that of Japan's four biggest private insurers combined.

more...

[UpInArms]

40. Time Warner to Pay $2.4 Billion to Settle AOL Suits

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aZCplPXFatFo&refer=home

Aug. 3 (Bloomberg) -- Time Warner Inc., the world's largest media company, agreed to pay $2.4 billion to end shareholder lawsuits stemming from its 2001 merger with America Online. The settlement caused the company's first loss in almost three years.

New York-based Time Warner took a $3 billion second-quarter expense related to the lawsuits, resulting in a net loss of $321 million, or 7 cents a share. Revenue fell 1.1 percent to $10.7 billion, the company said in a statement today. Excluding the payment, profit and sales missed analysts' estimates.

Settling the cases ends the bulk of the litigation brought after AOL bought Time Warner for $124 billion in 2001. The stock plunged after the deal as growth slumped, prompting shareholder suits that claimed AOL inflated sales to help close the transaction. Chief Executive Richard Parsons can now focus on bolstering sales, which fell in the quarter for the first time since 2003.

<snip>

Time Warner agreed to pay $2.4 billion into a fund for plaintiffs who claimed AOL improperly recorded advertising revenue. The company set aside another $600 million to resolve additional shareholder suits. The reserve is higher than a $2 billion estimated by Banc of America Securities LLC analyst Doug Shapiro.

<snip>

Time Warner's results were worse than Anthony Noto, an analyst at Goldman, Sachs & Co., had predicted.

``AOL trends are deteriorating faster than expected,'' Noto, who is based in New York and rates the stock ``in-line,'' wrote in a note to clients today. There is ``not a lot of reason to buy today.''

...more...

[54anickel]

42. CHINA'S REVALUATION: "BIG JOURNEYS BEGIN WITH SMALL STEPS"

http://www.kitco.com/ind/benson/aug032005.html

snip>

China has a long way to go to complete its revaluation. The realization of an ever-rising Yuan, will rock the status quo. China can now go to Iran, Venezuela, and Nigeria and exchange renminbi for oil – and these countries will be better off than if they took dollars – because the Yuan is guaranteed to rise against the dollar! Besides, if any central banks in the Middle Eastern oil producing countries accepted Yuan over dollars for oil, and they suddenly needed dollars sometime in the future, the central bank of China now has $700 billion of dollars to swap. Clearly, over the long term, the Yuan has the potential to become a great currency.

What about other countries with resources to sell China (like the rest of Africa, South America and Australia)? Wouldn’t it be in their interests to exchange Yuan for their raw materials? Why take dollars when you can take Yuan that will appreciate against the dollar! Again, if these countries ever needed dollars or even Euros in the future, they would be able to swap for them later – no problem!

So, what is China really up to? Not only is China looking at energy deals in Sudan, Zimbabwe, Algeria, Angola, Kazakhstan, Turkmenistan (and any other “oil-stans”), they seem to be everywhere, particularly showing up in places that need a big powerful friend to protect them from America, or the rest of the civilized world. Countries, such as Iran and Venezuela, clearly need protection from the United States. (Iran breeds terrorists and wants the bomb, while Hugo Chavez in Venezuela is a caricature of Castro with oil.) The world is full of petty dictators that need friends. You may recall when Iraq wanted to shift from being paid for oil in dollars, to being paid in euros; the move did not win many friends at the White House.

China has a one party rule and dictatorship by committee and they know how to cut deals with strong men. With China showing up wherever there is oil and resources, rulers of the less than democratic countries must see a “win win” situation with China. If they accept the Yuan in exchange for their resources, not only do they get money that is better than the dollar, they shake hands with a very powerful friend that can sell them arms and keep them in power! Letting China have a reserve currency has major geo-political implications, and they are not all good for the United States.
The textbook definition of a reserve currency is “a foreign currency held by a central bank or monetary authority for the purposes of exchange intervention and the settlement of intergovernmental claims”. To put it more simply, the national joy of having a reserve currency means if a country wants to buy something, all it has to do is print up some money. Just like in America, China will be able to purchase any goods and services it wants, simply by printing up some Yuan.

So, now what happens? We believe that central banks worldwide are going to be eager to take the Yuan as a reserve currency because it is guaranteed to go up in relative value. Indeed, with the U.S. running massive federal and trade deficits, central banks around the globe remain eager to diversify away from the dollar.

more...

[UpInArms]

51. Yuan may not be so lucrative for hedge funds

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-08-03T130504Z_01_L03708643_RTRIDST_0_PICKS-MARKETS-HEDGE-YUAN-DC.XML

LONDON (Reuters) - Betting that Asian currencies will rise against the dollar over coming months as China further revalues the yuan is unlikely to be as profitable as many hedge funds expect, analysts said.

Sceptics say China is determined to keep a lid on speculative activity to prevent any destabilization of the country's economy and that it is likely to move slowly on revaluation and probably only when the market least expects it.

Asian currencies, which tend to move in the same direction, are often used as proxies for the yuan because it is not possible to buy the Chinese currency outright.

That is why a surprise 2.1 percent revaluation of the yuan to 8.11 per dollar on July 21 caught out many hedge funds, which lost money on their long dollar positions against the yen.

U.S. and European funds have bought either Asian currencies against the dollar or yuan derivatives known as non-deliverable forwards on the premise that another move is likely soon.

...more...

[54anickel]

55. Heh-heh, I do remember a few articles on that when it happened. China

will continue to try and chase off the hot money. Perhaps if the hedge funds get burned often enough they'll back off.

Long-term the Yuan might be a decent bet, but that's not the objective of speculators and speculators are one of the biggest threats to China's plan. Though I do think China has a strategy for dealing with them - they did learn a lot from what happened during the Asian crisis.

[54anickel]

43. Seven Reasons For A Bull market

http://biz.yahoo.com/ifunds/050802/20050802_sevenreasonsforbull_com_etf_jb.html

After the market failed to advance last week, there have been many calls that the market is overbought and headed lower. Here are seven reasons why the bull might continue.

snip>

Sheesh, it's all so great I can't decide which of the 7 to post. :eyes:

[ozymandius]

48. I suspect that a "me too" psychology has infected the markets.

The numbers versus the fundamentals thing again: as numbers tend to rise, people want to ride the wave.

[54anickel]

44. Not Everyone Lives in Dollars

http://www.321gold.com/editorials/schmidt/schmidt080305.html

snip>

How will the dollar's demise affect others nations?

This question is one on which our thinking has changed. Gray(2004) writes of concern over how the U.S. cumulative current account deficit might impact the global economy. In particular, that concern comes from the length of time it has persisted and the size of that annual deficit. One way of thinking about this is to imagine a rectangle with one side the length of time that the U.S. has experienced a current account deficit. The second side is the dollar amount of the annual deficit. Remember, area equals length times height.

This imaginary rectangle gives a picture of the size of the problem. Now picture that rectangle sitting on top of the world's economy, or being held in the hand of Atlas. In 1995, that rectangle would have been far smaller than at the present. The magnitude of the problem was such that remedies would have been easier. Any necessary adjustment in global economic activity then would not have been as large as now required. Global demand would not have been seriously reduced in correcting the situation. However, the debt rectangle is expanding by the product of time and size.

This imaginary debt rectangle is 10-11 times larger, and still growing. The U.S. annual current account deficit is now much larger and has gone on far a long time. The magnitude of the problem is far greater. To rectify the situation, which can not persist indefinitely, will require a massive reduction in U.S. consumer spending. The elimination of this giant "debt rectangle" would require U.S. consumers to reduced their buying of global goods by a tremendous amount, perhaps as much as $700-800 billion a year.

Had action been taken in 1995, the global economy would have experienced a mild case of indigestion. Today, the remedy requires a Great Recession in the U.S. which will then flow around the world in epidemic proportion. No vaccine exists, and those contracting the disease will feel their economic livelihoods threatened. Those nations that have made a living off U.S. consumers will discover the meaning of "contagion effect." The U.S. Great Recession will spread internationally, causing serious hardship in many countries.

Countries like Canada, where trade with the United States is the lifeblood of the economy, could discover the meaning of economic diarrhea. Island nations dependent on U.S. tourism should be deeply concerned. Nations with little or no trade with the U.S. may also feel the effects. If a nation does a lot of business with a nation that relies on the U.S. for business, the ripple effect will be felt. No place to run, no place to hide; as the song goes.

more...

[54anickel]

45. Former KPMG Partners May Be Charged

http://www.washingtonpost.com/wp-dyn/content/article/2005/08/02/AR2005080201975.html

Federal prosecutors have notified as many as 20 former partners at the accounting firm KPMG LLP, including some who were members of its senior management team, that they could face criminal charges for their role in selling tax shelters in the 1990s, according to people familiar with the case.

Government lawyers have not yet decided whether to bring criminal charges against the firm, but they are asking for tough concessions from KPMG as the price of any potential settlement. At the same time they also are focusing on individual executives involved in the tax shelters, according to sources, who spoke on condition of anonymity because of the delicate stage of the investigation.


Earlier this year, federal prosecutors in New York had recommended that KPMG face criminal charges, but senior Justice Department officials in Washington expressed concerns about the prospect of another accounting firm collapse after the 2002 demise of Arthur Andersen LLP and the Supreme Court's reversal in May of Andersen's criminal conviction, according to the sources. Instead, both prosecutors and the firm continue to negotiate. :eyes:

The KPMG probe, which dates back several years, could be the next major case in a string of business fraud prosecutions that surfaced after the collapses of Enron Corp. and WorldCom Inc. KPMG was one of several firms that sold questionable tax shelters to wealthy clients, creating lucrative sources of revenue.

more...

[54anickel]

46. Inflation and the Pyramid Builders

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=45289

Like waves on the seashore, an incessant drip of a faucet, or the perpetual nag of the proverbial mother-in- law, your dollars as a store of value and labor are continually clipped and filed down by the Central Bankers’ silent tax.



From the pyramids to the billion dollar-a-copy gee whiz warplanes we get to see once in a while at an air show or parade, everyone below plutocrat status will pay for the symbols of empire. The treadmill runs faster, the crack of the whip grows more severe. Get ready to sweat, work harder, longer, and perhaps even die at your grinding stone. Your masters have a lot of bricks to pound into dust, and the grinding of the masses into dust is par for the course.



Occasionally you get a real deflation. Like a perfect red heifer, or an albino alligator, or perhaps that elusive blue moon. We all acknowledge it can happen. Sure, a great plague can wipe out a medieval population center, and put the laboring classes in the cat birds’ seat for a little while. But short of a mass extinction event where you’re still standing, the chances of you hitting a moment in history where you will experience anything other than the steady din of your purchasing power ground down into dust is so remote as to make it a practical irrelevancy.



Perhaps my little rant on the plague of inflation and the destruction of our currency as a store of value and labor should start at the beginning….the very beginning! Quoting God, Genesis 3:17 states “Cursed is the ground because of you: through painful toil you will eat of it all the days of your life. It will produce thorns and thistles for you and you will eat the plants of the field. By the sweat of your brow you will eat your food until you return to the ground, since from it you were taken; for dust you are and to dust you will return.”



Ok, it’s back to that dust thing we’ve been talking so much about. Bottom line of our little Sunday school lesson is that life was once pretty good, Adam and Eve blew it, and we’ve been paying for it ever since. Hence the curse. In other words, life is hard, difficult, and full of sweat because the earth isn’t paradise anymore. Ok, fair enough. Most of us don’t mind a little sweat and tears along life’s journey. But not everyone wants to take a turn at the oars. Some humans, the Pharaohs and modern equivalents, figured out a long time ago that one does not have to sweat if you can get someone else to sweat for you. Voila! No curse for me! Too bad you have to work so hard! We all know slavery is really all about some people wanting to evade the curse of work at the expense of others. Chains and nose rings are considered a little too crass, too vulgar, and just a little too messy. What would our friends in polite society think? Perhaps there’s another way?

more...

[UpInArms]

47. 1:14 EST is the devil in the DOW?

Dow 10,677.08 -6.66 (-0.06%)
Nasdaq 2,217.56 -0.59 (-0.03%)
S&P 500 1,243.99 -0.13 (-0.01%)
10-Yr Bond 4.305 -0.31 (-0.71%)

NYSE Volume 1,136,754,000
Nasdaq Volume 1,052,621,000

1:00PM: Stocks continue to trade at improved levels although the recent recovery effort seems to have stalled... It is worth noting, however, that new fund inflows filtering into the market during the first few days of the trading month have resulted in stronger than usual volumes (e.g. volume on the Nasdaq has already surpassed 1.0 bln shares), providing a bit more conviction behind overall market action...

One stock in particular has been Microsoft (MSFT 27.26 +0.45), as shares surged 3.3% yesterday, amid more than double its average volume (137 mln versus 63 mln), and have tacked on another 1.7% so far today on volume of 90 mln shares... NYSE Adv/Dec 1561/1572, Nasdaq Adv/Dec 1255/1697

12:30PM: Renewed buying interest, perhaps spurred by oil prices slipping to fresh session lows, lifts all three of the major averages above the flat line for the first time this afternoon... Providing much of the support has been continued momentum in Technology and a turnaround in Industrials... Notable blue chips inching into positive territory within the last half hour include AA, AXP, DD, HPQ, MCD, MO and MRK...NYSE Adv/Dec 1469/1637, Nasdaq Adv/Dec 1147/1753

[ozymandius]

49. It's doing His bidding.

[ozymandius]

50. Only now its -6.69

1:22
Dow 10,677.05 -6.69 (-0.06%)
Nasdaq 2,217.15 -1.00 (-0.05%)
S&P 500 1,243.98 -0.14 (-0.01%)
10-Yr Bond 4.302% -0.03
NYSE Volume 1,163,014,000
Nasdaq Volume 1,071,580,000

[UpInArms]

52. Eating your house: Improved reverse mortgages find takers

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-08-03T144023Z_01_N03519781_RTRIDST_0_PICKS-COLUMN-FINANCE-DC.XML

WASHINGTON (Reuters) - Reverse mortgages have been getting better and better, and older homeowners have taken notice, signing up for these loans in rapidly increasing numbers.

The number of reverse mortgages taken out in fiscal year 2004, though small compared to the total number of mortgages, was more than double the number of the previous year. And the 2005 pace is about 15 percent higher than last year's, according to the National Reverse Mortgage Lenders Association.

In a reverse mortgage, a homeowner age 62 or older borrows against his or her home, and gets a line of credit, a lump sum, or regular monthly payments from the lender. But the homeowner doesn't have to make any payments on the loan until the home is sold or settled as part of his estate.

Older homeowners can use reverse mortgages to stay in their home while they live off of its value, sort of like having their cake and eating it, too.

Reverse mortgages have improved. Older versions of these loans required homeowners to turn over some portion of their home equity to the lender; those don't exist anymore. The interest rates that these loans are based on have come down, too.

Big increases in real estate prices have opened the way for bigger loans. And with the federal department of Housing and Urban Development underwriting about 90 percent of these loans, their terms have become somewhat standardized.

<snip>

A reverse mortgage can pull as much as $12,000 in funding out of the house for the lender before the homeowner sees a dime, Scholen said. New retirees facing long life expectancies may find they are too young to take full advantage of these loans. And older folks who take out reverse mortgages and then get profligate with the proceeds can really hurt themselves.

...more...

[54anickel]

53. Earnings Surprises Mask Negative Growth

Quarterly net-income figures are coming in higher than many analysts predicted. But almost half of the S&P 500 companies reporting positive surprises so far have seen slowdowns in profit increases, a Merrill Lynch strategist notes.

Stephen Taub, CFO.com
August 03, 2005

The second quarter is shaping up to be pretty good for corporate earnings. Or so it seems at first glance.

Profits at the Standard & Poor's 500 companies that have reported their quarterly results thus far came in 13.6 percent higher than they did in the comparable period last year, according to the Associated Press, which cited data from Thomson Financial. As of Monday, 378, or 76 percent, had reported their second-quarter earnings.

That works out to 3.9 percent higher than analysts' average forecasts, says the report. What's more, 256 — or more than 69 percent — of the S&P 500 companies that have reported their results have exceeded analyst expectations. The portion of companies beating the Street is the highest percentage since the first quarter of 2004, according to Bloomberg, which noted that typically 59 percent of companies beat their consensus forecasts.

One explanation for the proliferation of positive surprises is that companies set themselves up to easily beat those projections by indicating low expectations to Wall Street. Even so, the data underlying such maneuvers isn't as rosy as it seems. The moves "seem designed to obscure the fact that fundamentals are eroding," Richard Bernstein, U.S. strategist at Merrill Lynch & Co., said in a report fired off earlier this week in which he noted that S&P 500 earnings growth has been cut sixfold in the past 12 months.

more...

[54anickel]

57. Bankruptcy can help to reward poor managers

http://www.chron.com/cs/CDA/ssistory.mpl/business/3293836

snip>

Top executives at both Delta and Northwest have acknowledged bankruptcy is a possibility. The airlines may slip into court after the summer travel season ends on Labor Day and before the new bankruptcy rules take effect on Oct. 17, according to a report this week in the Washington Post.

The move would allow the carriers to dodge changes to federal bankruptcy law that, among other things, restrict so-called retention bonuses for key employees.

In other words, the timing of the filings may have less to do with the financial fallout from 9/11 than it does with Project 911.

Project 911 was an Enron plan to pay executives $105 million worth of bonuses prior to the company's bankruptcy filing in December 2001.

The new bankruptcy law, which President Bush signed in April, stipulates that executives can receive retention bonuses only if they have another job offer. In other words, they won't get paid to stay until they show proof they intend to leave. Call it the Project 911 clause.

more...

[ozymandius]

58. still vacillating at the waterline

2:21
Dow 10,676.65 -7.09 (-0.07%)
Nasdaq 2,218.03 -0.12 (-0.01%)
S&P 500 1,243.92 -0.20 (-0.02%)
10-Yr Bond 43.02 -0.34 (-0.78%)
NYSE Volume 1,373,837,000
Nasdaq Volume 1,242,295,000

1:30PM: Major indices continue to vacillate around the unchanged mark as investors find few catalysts to push them in either direction... One index more decidedly under pressure today has been the Russell 2000 (-0.5%), which has consolidated after closing at an all-time high of 688.51 (+0.8%) last night... The small-cap index has surged more than 19% from its April lows and is up over 5.0% in 2005, versus gains on the S&P and Nasdaq of 2.6% and 1.8%, respectively... The Dow, meanwhile, continues to languish with a year-to-date decline of 1.0%... NYSE Adv/Dec 1562/1588, Nasdaq Adv/Dec 1241/1713

[54anickel]

59. Beijing May Have Lost Battle, but Not War

http://www.rednova.com/news/science/195632/beijing_may_have_lost_battle_but_not_war/

Just as a tactical retreat is sometimes useful in winning broader battles, as Sun Tzu wrote 2,500 years ago, the withdrawal of Cnooc's bid for Unocal seems unlikely to stop "China Inc." from pursuing its economic expansion overseas, and may hold lessons. The sight of a Chinese company trying to buy a company once known for the 76 brand made the proposed deal a lightning rod for American worries about everything from manufacturing job losses to high oil prices to the security of energy supplies. But while U.S. congressional resistance appears to have torpedoed the Chinese bid, the economic fundamentals behind that bid remain in place, from China's vast foreign currency reserves to its ravenous appetite for imported oil.

The most immediate effect from the failed bid may be on Chinese public opinion toward the United States. China's state-controlled media had devoted extensive coverage to the Cnooc bid and presented it to the public as an exclusively commercial arrangement.

"This is a very symbolic deal that made Chinese people proud of themselves," said Jin Canrong, associate dean of the School of International Studies at People's University. "Definitely they will feel some kind of disappointment." But Jin and other experts said Tuesday that Chinese policy makers were likely to react pragmatically, with no effort to dump the central government's huge holdings of U.S. securities and with little deviation from a long- term effort to acquire foreign brands, technology and energy assets.

Christopher Stephens, a senior partner at Coudert Brothers specializing in mergers and acquisitions in China, said that China's leadership was most likely to opt for a narrowly commercial retaliation against the United States. "You may see a large aircraft order go to Airbus, or a large oil concession go to BP or Shell," he said.

The withdrawal of the Cnooc bid may even help less politicized deals move forward, like the agreement last Friday by Nanjing Automobile of China to buy an engine factory and other assets from the bankrupt MG Rover Group of Britain. Nanjing Automobile will box up the engine factory equipment and ship it to east-central China for use in engine production there. That deal represented a step by China's auto industry to address one of its big weaknesses, the design and manufacture of reliable engines. China's ability to become an internationally competitive automaker may be more important to the country's economic success in the long run than its ability to buy oil and gas reserves overseas. Many experts question whether China even needs to own such assets.

more...

[ozymandius]

61. Dow sinking precipitously

3:06
Dow 10,662.96 -20.78 (-0.19%)
Nasdaq 2,212.13 -6.02 (-0.27%)
S&P 500 1,241.37 -2.75 (-0.22%)
10-Yr Bond 42.99 -0.37 (-0.85%)
NYSE Volume 1,578,144,000
Nasdaq Volume 1,419,808,000

2:30PM: Stocks lose what little footing they had, extending their reach into negative territory, despite oil prices ($60.80/bbl -$1.09) closing at their lowest levels of the session... While the pullback has not been enough to make a significant change in the standings, further deterioration in a relatively influential sector of late (Energy) - in particular, large-cap names like XOM (-1.0%), COP (-0.9%), SLB (-0.5%), DVN (-0.6%), OXY (-0.6%) and APA (-1.6%) - has been just enough to push the blue chip averages a bit lower... ..OSX -0.5%... ..OIH -0.8%...XOI -0.1, NYSE Adv/Dec 1558/1618, Nasdaq Adv/Dec 1327/1680

[ozymandius]

62. now is the time of day for motion sickness

3:25
Dow 10,683.66 -0.08 (-0.00%)
Nasdaq 2,214.45 -3.70 (-0.17%)
S&P 500 1,243.50 -0.62 (-0.05%)
10-Yr Bond 43.00 -0.36 (-0.83%)
NYSE Volume 1,670,123,000
Nasdaq Volume 1,493,007,000

[54anickel]

63. DANG! I never know whether to go red or black on days like this

[UpInArms]

66. closing numbers and blather (mixed - DOW up)

Dow 10,697.59 +13.85 (+0.13%)
Nasdaq 2,216.81 -1.34 (-0.06%)
S&P 500 1,245.04 +0.92 (+0.07%)
10-Yr Bond 4.300 -0.36 (-0.83%)

NYSE Volume 1,999,092,000
Nasdaq Volume 1,806,974,000

Close: Stocks closed in lackluster fashion as a mixed batch of earnings reports and volatile oil prices near record highs hindered more aggressive follow-through buying efforts... Blue chips were the most resilient, getting a huge boost from a second consecutive surge in shares of Microsoft (MSFT 27.25 +0.44), while the Nasdaq, fresh off a new four-year high and gains in 14 out of the last 20 sessions, finished just below the flat line...

Of the six economic sectors trading higher, Telecom Services paced the way, due in part to reports that the FCC may change a current set of rules which would provide Baby Bells (i.e. SBC, VZ, BLS) an incentive to expand their broadband networks... Despite the Nasdaq's inability to post a third straight gain, Technology again provided some solid leadership, as Microsoft closed at its best levels of the year (up nearly 5% in two days) amid more "special dividend" rumors...

A late-day surge in shares of First Data (FDC 42.46 +1.46), amid restructuring speculation, as well as better than expected Q1 (Jun) earnings and upside FY06 guidance from BMC Software (BMC 20.35 +1.53), also helped offset consolidation in chip stocks after PHLX Semi Index hit a new 52-week high yesterday... Semiconductor was also weak after Analog Devices (ADI 38.83 -1.89) lowered its Q3 revenue outlook... Financial showed relative strength, as shares of Aon Corp (AOC 29.91 +4.35) soared 17% following a strong Q2 report, prompting an upgrade from Legg Mason, and benchmark yields on the 10-year note (+10/32) closed near session lows at 4.29% provided some reprieve...

[54anickel]

67. Heh, and here yesterday I was betting on 10,700 for today. What

reports, besides Mauve Day, are on deck for tomorrow?

[UpInArms]

70. Initial Claims are the only report tomorrow - but on Friday....

that is a different story:

Aug 5	8:30 AM	Average Workweek	Jul	-	33.7	33.7	33.7	-	
Aug 5	8:30 AM	Hourly Earnings		Jul	-	0.3%	0.2%	0.2%	-	
Aug 5	8:30 AM	Nonfarm Payrolls	Jul	-	175K	180K	146K	-	
Aug 5	8:30 AM	Unemployment Rate	Jul	-	5.0%	5.0%	5.0%	-	
Aug 5	3:00 PM	Consumer Credit		Jun	-	$4.0B	$6.0B	-$3.0B	-

Most eyes will be on the NFP - Non-Farm Payroll report due out at 8:30 on Friday.

[54anickel]

71. Hmm, expecting 180K or better for July after only 146K for June

I suppose anything is possible with that birth/death adjustment. Seems pretty optimistic though.

Wonder if there will be lots of surprised economists again.

I'll have to remember the :popcorn: for Friday.

[54anickel]

65. CAFTA’s passage not an exercise in democracy

http://www.theunionleader.com/articles_showa.html?article=58545

snip>

While supporters argued that CAFTA would help promote democracy, The Washington Post reported, “The last-minute negotiations for Republican votes resembled the wheeling and dealing on a car lot.”

snip>

Big business cheered. For example, the National Pork Producers Council said, “when this agreement is fully implemented, pork producer profits will increase by almost five percent annually.” The prospect for Central America’s markets to be flooded with pork from industrial hog farms, along with feed grains, wheat, rice, soybeans, poultry, beef, tobacco and other products of U.S. agri-business, is the sort of thing that has had small farmers in Central America worried from the beginning of the CAFTA debate.

In what may have been the most twisted element of the lobbying, CAFTA backers said the United States should reward the Central American countries for supporting the U.S. invasion of Iraq, as if the Central Americans had approved CAFTA without an intense degree of manipulation and coercion by the Bush administration to begin with. (For example, a significant proportion of U.S. aid to Central America in recent years has been for “trade facilitation,” i.e. training trade negotiators to go along with the U.S.-driven agenda.)

Likewise, arguments that CAFTA is good for democracy and stability ignore the facts that the agreement was negotiated in secret, that it empowers unelected trade bureaucrats to second-guess laws adopted by democratic governments, and that it threatens to throw millions of small farmers off their land into the ranks of the urban unemployed.

snip>

That the trade debate has shifted from bipartisan support for new “free trade” agreements to high levels of skepticism is apparent. A poll cited by The Wall Street Journal finds 79 percent of the U.S. public dissatisfied with the government’s approach to trade or against increased trade altogether, compared to only 16 percent who favor more agreements along the lines of NAFTA and CAFTA. Those are numbers stark enough even to sink in on Capitol Hill, albeit slowly. The Bush administration would do well to rethink its plans for new trade agreements with Southern African and Andean countries, as well as its ambitions to expand WTO authority and create the hemispheric “free trade” zone, FTAA.

more...