STOCK MARKET WATCH, Wednesday 19 October

[ozymandius]

Wednesday October 19, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 95 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1763 DAYS
WHERE'S OSAMA BIN-LADEN? 1462 DAYS
DAYS SINCE ENRON COLLAPSE = 1424
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
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON October 18, 2005

Dow... 10,285.26 -62.84 (-0.61%)
Nasdaq... 2,056.00 -14.30 (-0.69%)
S&P 500... 1,178.14 -11.96 (-1.00%)
10-Yr Bond... 4.48% -0.01 (-0.18%)
Gold future... 474.60 -2.00 (-0.42%)






GOLD, EURO, YEN, Dollars and Loonie


PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Ike Iossif - WEEKLY CHARTS

Summary

Last week we said:

"As we had expected, the previous week's attempt to rally failed miserably. The indices declined further reaching price support levels, while most technical indicators reached oversold levels. Consequently, a "bounce" is quite natural at this point. However, the real importance of the current combination of price levels and market internals suggest that we are once again at the demarcation point between the end of a bull market and the beginning of a bear market. In bull markets, under the current circumstances, one can expect the bounce to carry a bit further, to be followed by another decline during which the internals improve, thus providing non-confirmation of the decline, resulting in an upside reversal and the bull cycle goes on. On the other hand, at the beginning of bear markets, the bounce that comes as a result of the current combination of price levels and market internals is either quite sharp and violent, exceeding even the expectations of the bulls, which is followed by an abrupt and even sharper and more violent decline, exceeding even the expectations of the bears, OR, the bounce fails almost immediately and it is followed by a another decline during which the internals deteriorate even further, thus, providing confirmation of the price action and forewarning of more to come."

The human temptation is to try to get ahead of the market and determine in advance what the ultimate outcome is going to be, thereby, proving to ourselves and to others our "superior" understanding of the markets and its inner workings! Although we do have our own beliefs and suspicions, our approach has been to act on what the market is telling us, opposed to what we think it is telling us. Right now all it is telling us is to watch out for a possible change in character, but there is NO evidence that such change has taken place. According to our indicators, (see table below) we have suggested that the preferable position is in cash, and thus at this point we can afford the luxury of waiting on the market to show us its true colors!

In summary, for next week we have got to expect the bounce to carry a bit further and then another decline. It is that decline that will give us important information about the character of the market, and whether the bull cycle that started in March of 2003 is still in effect, or if it has come to an end.

more...

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

[ozymandius]

2. Oil slips as traders watch storm

SINGAPORE (Reuters) - Oil eased to $63 on Wednesday after the previous day's sharp losses, as a new deadly hurricane was expected to miss Gulf of Mexico oil facilities and traders weighed signs of weakening fuel demand.

-cut-

Hurricane Wilma was upgraded to a maximum strength Category 5 storm, but its expected path toward southern Florida by Saturday should miss Gulf of Mexico oil rigs and U.S. coastal refineries.

Traders had worried that Wilma could delay recovering U.S. output, battered by hurricanes Katrina and Rita, ahead of peak winter fuel demand in the northern hemisphere.

Further direction on stock levels and demand will come from U.S. government data due at 1430 GMT, forecast to show a 2.0 million-barrel build in crude stocks but a 1.7 million-barrel drop in distillates, including heating oil.

more

[UpInArms]

50. Nov Crude @ $63.05 bbl - NatGas @ $13.575 mln btus

10:02am 10/19/05 NOV CRUDE FALLS 15C TO $63.05/BRL AHEAD OF U.S. SUPPLY DATA

10:02am 10/19/05 NOV NATURAL GAS UP 15.4C AT $13.575/MLN BTUS IN EARLY TRADE

[UpInArms]

96. Nov Crude closes @ $62.41 bbl - NatGas @ $13.549 mln btus

3:01pm 10/19/05 NOV CRUDE CLOSES AT $62.41/BRL, DOWN 79C, OR 1.3%

2:52pm 10/19/05 NOV NATURAL GAS CLOSES AT $13.549/MLN BTUS, UP 12.8C, OR 1%

[UpInArms]

52. Gas Deliveries Log largest drop in decade - is it supply or demand?

http://www.marketwatch.com/news/story.asp?guid=%7BAF037...

SAN FRANCISCO (MarketWatch) -- U.S. gasoline deliveries, a key measure of demand, fell almost 4% in September to log their biggest year-to-year decline in more than a decade, the American Petroleum Institute reported Wednesday morning.

"Motorists apparently found ways to manage fuel use and travel more efficiently in the face of higher September gasoline prices following Hurricanes Katrina and Rita striking along the U.S. Gulf Cost," the API said in a monthly report.

At the same time, September domestic crude output fell 22% from a year ago to 3.95 million barrels per day -- its lowest level since 1943, the API said.

For the third quarter, crude output averaged 4.8 million barrels per day, "the lowest quarter in more than 50 years," it said.

...more...

10:00am 10/19/05 GAS DELIVERIES LOG BIGGEST YR-TO-YR FALL IN A DECADE: API

10:00am 10/19/05 SEPT GASOLINE DELIVERIES DOWN 4% VS YR AGO: API

[ozymandius]

3. Intel-a-sell looms

NEW YORK (CNN/Money) - Stocks were poised to run into trouble Wednesday following a disappointing sales outlook from No. 1 chipmaker Intel.

U.S. stock futures were down sharply, indicating a lower opening for stocks, after Intel beat third quarter sales and earnings forecasts after the market close Tuesday, but issued weaker than hoped for fourth quarter sales guidance.

-cut-

Another tech bellwether, Internet company Yahoo! (Research), also reported better-than-forecast earnings and sales Tuesday after the bell. But despite the strong report its shares fell in after-hours trading.

-cut-

Economic reports include the latest readings on housing starts and building permits. Economists surveyed by Briefing.com forecast that housing starts slipped to an annual rate of 1.98 million in September from 2.01 million in August. Permits are seen slipping to an annual rate of 2.1 million.

more

[ozymandius]

4. Yahoo! shines, Wall Street shrugs

NEW YORK (CNN/Money) - Internet stocks can hardly be called boring and predictable. But when Yahoo! reported better-than-expected third-quarter sales and earnings on Tuesday afternoon, Wall Street just shrugged.

Yahoo! posted sales of $932 million, excluding traffic acquisition costs or TAC, which is advertising revenue it shares with affiliate partners. That was 42 percent higher than a year ago and ahead of analysts' expectations of $917 million.

And earnings, excluding a one-time gain from the sale of investments, were 16 cents a share, nearly 80 percent higher than the same period last year and two pennies per share better than consensus estimates.

What's more, the Sunnyvale, Calif.-based online search and media company said that sales for the fourth quarter, excluding TAC, would be between $1.032 billion and $1.082 billion. That's roughly in line with Wall Street's forecasts of $1.06 billion. If Yahoo! hit the midpoint of its sales guidance, it would represent growth of 35 percent from a year ago.

more

[UpInArms]

11. Linens N' Things 3Q earns $1M vs $17.2M

http://www.marketwatch.com/news/newsfinder/pulseone.asp...

NEW YORK (MarketWatch) -- Linens N' Things (LIN) Wednesday reported third-quarter earnings of $1 million, or 2 cents a share, down from a year-ago profit of $17.2 million, or 38 cents a share. Sales fell 3.8% in the latest three months to $629.3 million from $654.2 million in the same period a year earlier. Same-store sales dropped 10.2% in the period. The average estimate of analysts polled by Thomson FIrst Call was for a profit of a penny a share in the September period. The Clifton, N.J. home textiles retailer doesn't plan to provide an outlook for the fourth quarter. The stock closed Tuesday at $23.84, down 16 cents.

[UpInArms]

12. Kodak posts loss of $1.03 billion

http://today.reuters.com/investing/FinanceArticle.aspx?...

NEW YORK (Reuters) - Eastman Kodak Co. (EK.N: Quote, Profile, Research), the troubled camera and film maker, on Wednesday posted a quarterly loss of $1.03 billion, largely due to a one-time non-cash charge of $900 million for taxes.

The world's top maker of photographic film, which is shifting to digital cameras and printing and away from film, said the loss amounted to $3.58 a share. A year earlier, it reported a profit of $458 million, or $1.60 a share.

Sales rose 5 percent to $3.55 billion, fueled by gains in its digital business, where revenue increased 47 percent. Sales of traditional products such as photographic film fell 20 percent.

...more...

[UpInArms]

13. MBNA 3rd-quarter profit falls 1 pct

http://today.reuters.com/investing/financeArticle.aspx?...

NEW YORK, Oct 19 (Reuters) - MBNA Corp. (KRB.N: Quote, Profile, Research), a credit card company being acquired by Bank of America Corp. (BAC.N: Quote, Profile, Research) for $35 billion, on Wednesday said third-quarter profit fell 1 percent, as revenue fell slightly faster than expenses.

Net income for the Wilmington, Delaware-based company fell to $717.9 million from $728.3 million a year earlier.

Profit was 56 cents per share in both periods. Analysts polled by Reuters Estimates on average had forecast 53 cents.

<snip>

MBNA shares closed on Tuesday at $24.50 on the New York Stock Exchange. Through Tuesday, they have fallen 13 percent this year, compared with a 7 percent drop in the Standard & Poor's Consumer Finance index.

...more at link...

[jamesinca]

18. They will make that up

Not to worry, bankruptcy laws will help the 4th Q forecast nicely I think, just in time for Christmas. I have no empathy, or sorrow of any kind for the credit card companies.

[UpInArms]

23. Here's where BoA just made it up in "fees"

Bank of America profit up 10 pct on fees, trading

http://today.reuters.com/investing/financeArticle.aspx?...

NEW YORK, Oct 19 (Reuters) - Bank of America Corp. (BAC.N: Quote, Profile, Research), the No. 2 U.S. bank, on Wednesday said third-quarter profit rose 10 percent, helped by surging credit card fees, investment gains and trading revenue.

Net income for the Charlotte, North Carolina-based company increased to $4.13 billion, or $1.02 per share, from $3.76 billion, or 91 cents, a year earlier.

...more...

[UpInArms]

14. CKE Restaurants Sept total same-store sales fell 3.2%

http://www.marketwatch.com/news/newsfinder/pulseone.asp...

NEW YORK (MarketWatch) -- CKE Restaurants Inc. (CKR) said Wednesday its same-store sales fell 3.2% in the four weeks ended Oct. 10. The Carpinteria, Calif., company said sales at Hardee's restaurants open at least a year fell 4.5% in September. Same-store sales at Carl's Jr. fell 1.8% from a year earlier.

[UpInArms]

19. The New York Times Co. net income falls 52%

(that's what happens when credibility disappears - the propagandist paper of the BFEE cabal)

http://www.marketwatch.com/news/newsfinder/pulseone.asp...

NEW YORK (MarketWatch) -- The New York Times Co. (NYT) on Wednesday said third-quarter net income fell 52% to $23 million, or 16 cents a share, compared with $48.3 million, or 33 cents a share, in the year-ago period. The latest quarter included a charge of 5 cents a share for costs associated with staff reductions. Revenues rose 2.2% to $791.1 million. A survey of analysts by Thomson First Call forecast earnings of 17 cents a share and revenue of $788 million. The newspaper publisher reported a 2.7% rise in September revenue to $278.3 million. The New York Times estimated 2005 ad growth in the low single digits. Shares fell 23 cents to $27.75 on Tuesday.

[ozymandius]

31. This should teach them a lesson. (snark warning)

You cannot out-whore NewsMax. If people want real swank, they'll go to where cheap swank is not disguised.

[UpInArms]

33. LOL!

You cannot out-whore NewsMax

Oh, Ozy, they have tried to do that so much!

[UpInArms]

66. Ryan's 3rd-quarter profit drops by more than half (no $$ to eat out)

http://today.reuters.com/investing/financeArticle.aspx?...

NEW YORK, Oct 19 (Reuters) - Ryan's Restaurant Group Inc. (RYAN.O: Quote, Profile, Research) on Wednesday said quarterly profit fell by more than half as high energy costs cut into spending by its customers and hurricanes forced it to close restaurants for a period.

The company also said it did not meet financial requirements in its debt covenants for the second consecutive quarter and is in discussion with lenders to amend its debt agreements.

Ryan's earned $4.2 million, or 10 cents a share, in the third quarter, ended Sept. 28, compared with $9.2 million, or 22 cents a share, a year earlier.

Analysts on average had forecast 10 cents a share, according to Reuters Estimates.

Shares of Ryan's were halted ahead of the company's announcement. After they began trading on Wednesday, were down more than 7 percent at a 52-week low of $10.27.

...more...

[UpInArms]

67. American Airlines to see "significant loss" due to fuel costs

11:34am 10/19/05 AMR SEES 'SIGNIFICANT' Q4 LOSS AT CURRENT FUEL PRICES LEVEL

11:33am 10/19/05 AMR PAID $525M MORE FOR FUEL IN Q3 VS YEAR-AGO PRICES

11:33am 10/19/05 AMR Q3 MAINLINE LOAD FACTOR 81.2%, UP 3.3 PERCENTAGE POINTS

11:31am 10/19/05 AMR Q3 LOSS 58C, EX-SPECIAL ITEMS

11:31am 10/19/05 AMR CORP Q3 TOTAL OP REV $5.49B VS $4.76B

11:29am 10/19/05 AMR Q3 NET LOSS 93C VS $1.33

[ozymandius]

5. Europe markets drop sharply

LONDON (MarketWatch) - European markets dropped sharply in mid-morning trade Wednesday, following the late-session slide on Wall Street, poorly-received results at chip giant Intel Corp. and a decline in Japan and Hong Kong stocks.

-cut-

Further read-across from the U.S. came in energy stocks like Royal Dutch Shell (RDS.A59.57, -2.21, -3.6%), which lost 2% following the $1.4 billion sale of Exxon Mobil shares in a block trade on Tuesday, and from the food and beverage sector, which has faced growing concerns over inflation of late.

much technical data in story

[ozymandius]

6. Refco speeds from IPO to bankruptcy

Shareholders in newly public brokerage left with nothing

Refco, which has been spiraling into disarray in the past week, said on Monday evening that it has filed for Chapter 11 bankruptcy protection. The beleaguered company also said it reached a preliminary agreement to sell its futures-trading division for $768 million to an investor group led by a former partner of Goldman Sachs.

"The stock is toast," Kevin Starke, a securities analyst at Weeden & Co., said. "There's probably not going to be anything left for shareholders."

After trading over $30 in the month after the IPO in August, Refco shares lost almost two-thirds of their value over the course of two days last week. By the time the stock was halted, they last traded at $7.90.

Weeden's Starke said there'll be few assets left after Refco's businesses are either sold off or closed down. As a result, the only remaining recourse for shareholders probably will be to sue the underwriters of the company's IPO, he said.

more

[UpInArms]

30. Here comes their replacement: IPO for the Chicago Board of Trade

http://www.marketwatch.com/news/story.asp?guid=%7BAEB4C...

NEW YORK (MarketWatch) - The Chicago Board of Trade priced at $54 a share as the 157-year-old futures and options exchange saw its IPO draw strong support for its stock market debut Wednesday.

CBOT Holdings Inc. (BOT) raised $172.3 million by offering 3.19 million shares with underwriters CS First Boston and JPMorgan.

Citigroup, Keefe Bruyette and Sandler O'Neill also acted as underwriters on the deal.

Shares of the world's third largest derivative exchange are due to start trading on the New York Stock Exchange.

...more...

[UpInArms]

53. The insanity of hedge funds and derivatives continues

9:58am 10/19/05 CHICAGO BOARD OF TRADE IPO OPENS AT $80.75

9:59am 10/19/05 CHICAGO BOARD OF TRADE IPO TRADES AT $80.75

9:59am 10/19/05 CHICAGO BOARD OF TRADE IPO TRADES WELL ABOVE $54 PRICE

[54anickel]

77. Should get a lot of money flowing in from those who were lucky enough

to get out of Refco.

[UpInArms]

95. Refco just another deal among friends

http://www.marketwatch.com/news/story.asp?guid=%7B4F882...

NEW YORK (MarketWatch) -- The small investor has a message for all the banks, private equity firms, accountants, underwriters and everyone else who stood by and watched as Refco Inc. took the keys and drove off the cliff: welcome to the party.

As long as there have been investors, markets and taxes, it always seemed as if the joke was on the little guy. The widow who invested in WorldCom. The retirees locked into Enron Corp. The suckers who laid down hard-earned cash for Henry Blodgett's P.O.S.s.

In August, Refco (RFXCQ) became a public company. But make no mistake, this is a Wall Street insider vehicle of the highest order. Specializing in futures contracts, commodities and other complicated instruments, Refco was as recognizable to the average investor as Phillip Bennett in a clown suit.

But on Wall Street, Refco was an institution. For nearly four decades, the firm and its traders were a common sight on trading floors especially the Chicago Mercantile Exchange. They were as common there as the golden arches, the green siren and the color brown are to you and me.

In an industry that extols the virtues of the relationship, Refco was family. And when family comes to you with a favor to ask, it's only natural to help first, ask questions later. To do otherwise is taboo. What? You don't love your baby brother?

...more...

[UpInArms]

98. Refco and lawyers appear in court

How does a company "appear" in court?

http://today.reuters.com/investing/FinanceArticle.aspx?...

NEW YORK (Reuters) - Refco Inc. (RFX.N: Quote, Profile, Research) and its lawyers appeared in bankruptcy court on Wednesday as they awaited the start of the restructuring process seeking to rescue parts of the nearly-collapsed futures and commodities brokerage.

Also on Wednesday, Refco Inc.'s (RFX.N: Quote, Profile, Research) made a new bankruptcy filing shows assets of $16.5 billion through the end of August -- considerably less than the $48.8 billion as of February 28 listed in its initial petition filed on October 17.

The new filing also shows Bank of America Corp. (BAC.N: Quote, Profile, Research) holds the largest secured claim, with debt of approximately $651 million.

In lower Manhattan, Refco's bankruptcy lawyer J. Gregory Milmoe and a team of other lawyers gathered in the packed courtroom of Judge Robert Drain and waited for him to appear for a hearing that had been originally scheduled for 11:00 a.m. EDT (1500 GMT) in the U.S. Bankruptcy Court for the Southern District of New York.

The courtroom was filled with creditors' attorneys and other affected parties in the bankruptcy proceeding.

...more...

If "it" appeared in court, can we put "it" in jail???



Just love those corporations as individuals thing!

[UpInArms]

108. Refco Reverb (and conflicts of interest)

http://msnbc.msn.com/id/9753706/site/newsweek /

Is the financial implosion of the futures broker another sign that investors cannot trust Wall Street to fully vet the companies that they underwrite?

It's tough being Goldman Sachs these days. The premier white-shoe investment bank, as it is known on Wall Street, has been taking a terrific beating of late. First it was for playing all sides of the controversial Archipelago-New York Stock Exchange deal. Goldman made a few bucks serving as investment banker on the merger between the computer trading firm and the exchange but scored big time thanks to its 15 percent stake in Archipelago, which has shot up in value. More recently, the firm has been getting flack for its multiple roles in the continuing controversy surrounding the collapse of commodities and futures broker Refco Inc.

Any investor who doesn't pay attention to the Refco mess is making a huge mistake. The company, which made money speculating in futures contracts, recently filed for bankruptcy after its chief executive, Phillip R. Bennett, was discovered to have taken close to a half billion dollars in undisclosed loans from the outfit. Last week, Bennett was charged with securities fraud by the U.S. Attorney's Office for the Southern District of New York. And on Thursday, the New York Stock Exchange halted trading in Refco stock, which had plummeted to $7.80 from a high of $30.55 on Sept. 7.

<snip>

Just two months ago, Refco was brought public, with a lot of fanfare, by Credit Suisse First Boston, Banc of America Securities and, yes, Goldman Sachs. There was a fantastic television shot of top Refco officials ringing the opening bell at the New York Stock Exchange with NYSE chief executive, John Thain—himself a former top Goldman exec. Presumably, all the big names involved put Refco to the test before earning their underwriting fees; Wall Street firms are supposed to perform rigorous "due diligence" when selling shares to the public. Moreover, the New York Stock Exchange, which listed the stock for trading, was supposed to do its own background check on the company, as was Refco's auditor, Grant Thornton LLP of Chicago.
It's bad enough that some of the financial industry's biggest players seemed to be totally unaware of the issues on Refco's books while they were cashing their underwriting checks. Goldman, Banc of America and Credit Suisse declined to comment about how they missed Refco's problems. Grant Thornton says it continues to investigate the matter, but the company's problems "appear to be a purposeful deception that required the participation of senior management."

<snip>

And what are Goldman's connections with J. C. Flowers? Does it have an interest in the private equity fund, a la Archipelago, and if it does, how much negotiating did it do with Christopher Flowers before he signaled his intention to buy Refco's main business? I'm certainly not the only one raising these issues. "I think Goldman is potentially responsible for not doing due diligence on the IPO, and there could be rampant conflicts of interest involving the sale to someone who used to work at the firm," says securities-law attorney Jacob Zamansky, who sues Wall Street firms for a living. "Why were they involved in this deal?"

...more...

[UpInArms]

7. daily dollar watch

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

Last trade 90.08 Change -0.21 (-0.23%)

Talk of 5.5% Neutral Rates Pushes Dollar Higher

http://www.dailyfx.com/index.php?option=com_content&tas...

US Dollar
With both momentum and economic fundamentals on its side, dollar bulls had the confidence to take yet another stab at its 3 month high against the euro. As we warned yesterday, surging inflation especially on the producer price level will give the Fed a good reason to pump up the need for higher interest rates, which is the primary driver of dollar strength these days. Producer prices surged 1.9% on a monthly basis and a whopping 6.9% on an annualized basis. Even though the rise in the ex food and energy component was far more tempered on a monthly basis, the annualized increase was still a respectable 2.6%. This has given the Fed even more ammo to talk up interest rates – Fed President Yellen, who is a non-voter threw out some numbers today. She said that the “neutral rate” that everyone seems to believe that the Fed is aiming for is anywhere between 3.5%-5.5%. This is the first time that the market has even considered the possibility of 5.5% rates. The 5% level that the experts have been parading around already seemed a bit far-fetched, let alone 5.5%. If 5.5% rates is a really a possibility, then it’s the market that is behind the curve and not the Fed. Either way, the trajectory for rates is higher and for as long as the market thinks that rates are going up, so will the dollar. However we continue to warn that the higher rates go, the bigger the risk to the housing market, US growth and consumer spending. Higher interest rates mean not only higher mortgage payments, but also higher credit card payments, and it is already a known fact that US consumers have a tremendous amount of credit card debt. It also doesn’t help that new rules taking effect at the end of the year will require most consumers to pay 4%, up from 2% of their outstanding balances each month. Yet of course, the markets have yet to consider this a potential risk and chosen to focus more on the short-term factors that are impacting the dollar at the moment. For the time being, the combination of higher interest rates and stronger capital flows is being very supportive of the dollar. Just today, the Treasury reported that foreign purchases of US securities hit $91.3B in August, which is the strongest inflow in 15 months. Increasing appetite for dollar denominated assets were seen across the globe with US citizens even dumping foreign securities to snap up US securities (part of this is of course probably related to the Homeland Investment Act repatriation flows).

...more...

Currency Focus: Dollar Gains On Highest Price Increases In 15 Years

http://www.dailyfx.com/index.php?option=com_content&tas...

Moving higher on the session once again, the USDCHF pair rocketed past resistance ceilings at 1.2950 and 1.3000 before settling at its current price of 1.3020. Spurring the greenback strength on the session was a better than expected net foreign security purchases figure and further suggestions of continued tightening measures by the Federal Reserve. According to the U.S. Labor Department, prices at the producer level rose the most in 15 years, spurred on by higher energy costs, to 1.9 percent in the month of September. However, what was especially notable on the release was the climb in the core figure. Excluding the volatile food and energy component, core inflation rose 0.3 percent against an unchanged level seen last month. Raising some eyebrows, the figure suggests that inflationary levels may finally be creeping into subsequent consumer goods rather than simply attributed to higher crude prices, confirming the need for further interest rate hike considerations. Subsequently on the session, net foreign purchases rose more than the consensus $60 billion expected for the month. Soaring to $91.3 billion, Japanese and Chinese investment increased as investors saw potential in rising interest rates and growth prospects in the world’s largest economy.

...more...

[54anickel]

87. BoJ calls the end of deflation (From Tuesday)

http://news.yahoo.com/s/ft/20051018/bs_ft/fto1018200516... ;_ylt=Ag8m2qw4VOlKasuww8wAmpj2ULEF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

Japan's deflation will be conquered by the end of this year, parliament was told on Tuesday.

Kazumasa Iwata, deputy governor of the Bank of Japan, said the central bank believed monthly year-on-year changes in consumer prices would be zero or rise slightly by the year-end for the first time in seven years.

In the bank's twice-yearly address to politicians, he said: "As a trend, year-on-year rises in the CPI (consumer price index) will move higher."

The development will mark one of the most significant turning points in the country's recent economic history.

snip>

The onset of inflationary expectations should trigger a revival in consumer spending as Japanese start buying before prices go up. This would have important macroeconomic consequences, as about 55 per cent of Japan's gross domestic product is attributable to consumer spending.

Any sustained increase in prices in Japan could also lead to a transfer of Japanese household assets, from non-risk assets such as bank accounts and into risk assets such as investment trusts.

more...

[54anickel]

89. Japanese Stocks Decline for Sixth Day

http://www.nytimes.com/aponline/business/AP-Japan-Marke...

TOKYO (AP)-- Japanese stocks fell for a sixth day Wednesday as investors took a wait-and-see attitude ahead of the upcoming third-quarter earnings season. The dollar hovered at a two-year high versus the yen.

The Nikkei 225 index fell 222.75 points, or 1.67 percent, to finish at 13,129.49 points on the Tokyo Stock Exchange. The broader TOPIX index, which includes all issues on the exchange's first section, slipped 12.91 points, or 0.93 percent, to 1,379.78.

Traders cited lack of foreign investor interest before companies announce third-quarter earnings over the next two weeks.

snip>

Stocks have fallen as investors have sold shares that have put in healthy gains in the market's rally earlier this month to four-year highs.

snip>

Traders said sentiment toward the dollar remains bullish on expectations of steady interest rate hikes by the Federal Reserve and the resulting widening of the rate differential between the U.S. and Japan.

more...

[UpInArms]

8. China bank lashes out at U.S. regulator's comments

http://today.reuters.com/investing/financeArticle.aspx?...

BEIJING, Oct 19 (Reuters) - China Construction Bank, one of the country's biggest banks on the brink of a massive share flotation, lashed out at the U.S. securities regulator for his remarks on its listing preparations.

Construction Bank , which will start trading on Oct. 27 in the largest share offering globally so far this year, said that comments by chairman of the U.S. Securities and Exchange Commission Christopher Cox were "inappropriate" and "irresponsible".

Cox said on the sidelines of a Group of 20 meeting that the reason why the bank did not list on the New York Stock Exchange was because "it couldn't meet the NYSE regulatory requirements."

"As a result, some of the questions that are being asked ... about the health of CCB's balance sheet, about management, about what percentage of its loans will become non-performing loom large and the question is where will it be in a year," he said.

Construction Bank said on its Web site it had never applied to list in the United States.

"Whether or not we met regulatory standards of another country is irrelevant as we chose to list in Hong Kong," it said.

...more...

[54anickel]

86. Well, Cox is certainly living up to my expectations as a cocky lil' sucker

Sheesh Cox, look at th scandals all around you! I'm, thinkin' the NYSE regulatory requirements don't mean sh*t these days, and they mean even LESS with you at the helm!

[AnneD]

113. Kinda makes you look foreward to his selection

of Federal Reserve Chief.........

[UpInArms]

9. US bank profits feel pinch from strapped consumers

http://today.reuters.com/PrinterFriendlyPopup.aspx?type...

CHICAGO, Oct 18 (Reuters) - This year's surge in consumer bankruptcy filings is taking a predictable bite out of bank profits.

But will the spike in charge-offs at Citigroup Inc. <C.N>, Wells Fargo & Co. <WFC.N> and others be the temporary blip many investors assume? Or could it be a longer-term trend that will weigh on banks and credit-card issuers' earnings into 2006 and beyond?

Analysts aren't sure.

The big uncertainty isn't the new bankruptcy law itself, which is widely expected to reduce the number of consumers who successfully wipe out their debts to credit-card issuers and other creditors.

Instead, the question mark centers on unrelated new rules that require card issuers to be more honest about the cost of credit and to ensure that the minimum payments consumers make each month cover not only finance charges and penalty fees, but some principal as well.

Analysts believe the minimum payment rule in particular, which has received far less publicity than the change in the bankruptcy law, could wind up forcing more cardholders into the courts for protection and keep charge-offs near or at current levels.

<snip>

"Banks lowered minimum payments because the less you paid off, the more you paid out in interest," Hammer said. "If you do the reverse of that -- raise minimum payments -- it's going to have the opposite effect."

...more...

[UpInArms]

10. Fed's Ferguson says Fed must maintain credibility

http://today.reuters.com/investing/financeArticle.aspx?...

NEW YORK, Oct 18 (Reuters) - The Federal Reserve must maintain its credibility in the face of inflationary pressures, Federal Reserve Vice Chairman Roger Ferguson said on Tuesday.

"The issue of keeping inflationary expectations well anchored is an extraordinarily important part of what we need to do," Ferguson told an African American business group in Trenton, New Jersey. His comments were monitored in New York.

Ferguson said inflation was as much as source of pain to lower and middle-income Americans as to those with higher incomes, noting that it ultimately affected economic growth and employment.

Ferguson said contained inflationary expectations were at last partly responsible for low long-term interest rates.

"We all get the benefit in that the belief that inflation is contained has allowed the long end of the curve to be lower than it would have been otherwise," he said.

He also said there were a number of hypotheses for the slow pace of business investment in equipment and software in the United States, among them higher energy costs, excess capital and corporate scandals.

...more...

[UpInArms]

15. Today's Reports:

Oct 19	8:30 AM		Building Permits	Sep	-	2075K	2075K	2138K	-	
Oct 19	8:30 AM		Housing Starts		Sep	-	1975K	1975K	2009K	-	
Oct 19	10:30 AM	Crude Inventories	10/14	-	-	-	NA	-	
Oct 19	2:00 PM		Fed's Beige Book	-	-	-	-	-	-

[UpInArms]

16. 8:30 reports tumbling in

8:30am 10/19/05 U.S. SEPT. SINGLE-FAMILY PERMITS RECORD 1.749 MILLION PACE

8:30am 10/19/05 U.S. SEPT. SINGLE-FAMILY STARTS UP 2.6% TO 1.747 MILLION

8:30am 10/19/05 U.S. SEPT. BUILDING PERMITS HIGHEST IN 32 YEARS

8:30am 10/19/05 U.S. SEPT. BUILDING PERMITS UP 2.4% TO 2.189 MILLION PACE

8:30am 10/19/05 U.S. SEPT. HOUSING STARTS EXCEED 1.97 MILLION EXPECTED

8:30am 10/19/05 U.S. SEPT. HOUSING STARTS RISE 3.4% TO 2.108 MILLION PACE

http://www.marketwatch.com/news/newsfinder/pulseone.asp...

WASHINGTON (MarketWatch) - Construction of new homes in the United States reaccelerated in September, climbing 3.4% to seasonally adjusted annualized rate of 2.108 million, the Commerce Department estimated Tuesday. Housing starts were at the highest level since February, and exceeded the 1.970 million annual pace expected by economists surveyed by MarketWatch. Building permits issued by local jurisdictions increased 2.4% in September to a seasonally adjusted annual rate of 2.189 million, the highest in 32 years. Starts of single-family homes rose 2.6% to 1.747 million, while single-family building permits increased 4.4% to a record 1.749 million.

[OrangeCountyDemocrat]

17. You Can Build It.....But Will They Come?

I've always wondered about housing starts. Isn't that like a store amassing a large inventory of some "fad" item, and then discovering that the intrigue has faded. Only to then be left with an abundent inventory of an item that won't sell?

So, they're building lots of new houses. The only question remaining is whether people will actually rush to buy them. With the continued rise in interest rates, something has got to give. But what do I know?

[Maeve]

24. The devil's in the details--where are they building these houses?

Starts of single-family homes rose 2.6% to 1.747 million, while single-family building permits increased 4.4% to a record 1.749 million.

Despite the disruption of two massive hurricanes, housing starts grew 6.9% in the South to 981,000. Starts increased by 1.9% in the Midwest and were flat in the Northeast and West.

http://www.marketwatch.com/news/story.asp?guid=%7BFE1B2...

Maybe not DESPITE the hurricanes---how about BECAUSE of the hurricanes??? D'ya think? Where are houses needed right now?

[UpInArms]

26. do you think they counted the FEMA prefabs? ...... eom

[Maeve]

29. I have no doubt there is a building boom in the south

Sorta has to be....whether they count FEMA's stuff or not. If you were a housing contractor in the Gulf area and you hadn't gotten hit really hard, wouldn't you take out building permits on spec?

"Windfall" is the term that comes to mind.

[UpInArms]

32. Permits, yes - Starts??

where are the Starts? Don't those stats have to be where actual construction has begun?

then, there is this line item on the marketwatch:

9:08am 10/19/05 BANC OF AMERICA CUTS HOMEBUILDING SECTOR TO CAUTIOUS

[Maeve]

44. There are starts-- you start those houses ASAP

They are needed yesterday, so get the building going NOW!

Yes, I know a lot of people can't afford to buy yet; but there are many speculators willing to bet on the recovery of the area by the time the houses are ready for move-in. They may be selling to other speculators, but I have no doubt that the market will be there, one way or another.

[AnneD]

38. But think on this Maeve...

You lost your home. Your insurance company fights with you and you go to court. The mortgage company still want to be paid and you have no home. If you get a loan via FEMA, you still owe on that loan plus your old loan and you're still haggling with the insurance company. The only people with the windfall seems to be the attorneys whether they file bankruptcy claims or insurance claims.

[Maeve]

46. I know, AnneD...but I am looking at the speculators

The ones for whom "disaster" is a synonym for "opportunity". I may be cynical as all get-out, but I can see putting up houses fast and expecting the market to be there--the NEED is there and someone will provide the money. It may be loans at rates Scrooge would salivate for, there may be lots of foreclosures down the road, but the ones who build and sell will not be the ones who suffer.

And I'm depressing myself thinking like a Republican...

[UpInArms]

48. but..but..but... I thought those houses were to be built by

xtian organizations or Habitat for Humanity!

[Maeve]

51. Isn't that sweet?

But it's wrong! (old memories of Ren & Stimpy resurfacing, sorry)

I think I'll go watch a nice movie now and get this bad taste out of my mind...

[UpInArms]

54. just don't try to watch anything

on the news that covers those folks in Biloxi!

http://news.yahoo.com/s/ap/biloxi_s_forgotten ;_ylt=AlKChnRAikuP13GVqVHhnAsDW7oF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

BILOXI, Miss. - In the poorest of neighborhoods here, people sleep outside with no running water or power. They live among starving cats, rotting heaps of garbage and constant, buzzing flies. The bathroom is anywhere and everywhere. The filth is inescapable.

Weeks after Hurricane Katrina destroyed their homes and jobs, many people in east Biloxi are living amid the rubble of their own houses, waiting for the
Federal Emergency Management Agency to deliver the trailers they have applied for — or for other federal assistance.

"We just wait and pray," said Kenneth Albus, 45, who has spent weeks in the wreckage of his rented house, taking care of friend Margaret Nevels, a 65-year-old woman with swollen ankles and a heart condition.

People subsisting in similar, squalid conditions can be found all over east Biloxi, this city's version of the lower Ninth Ward in New Orleans and only blocks behind the wealthy casinos that line the coast.

...more...

[AnneD]

57. Welcome to the New World Order...

If we continue on the path we are on...Biloxi will be our old age and our children and grandchildren's future. I guess once we are a third world country, we can finally compete with the third world.

[AnneD]

34. Morning Marketeers,

We went into a local housing boom/bust combined with an increase in unemployement lasting from the mid to late 80's. Many builders went under because they couldn't sell what they built. Banks were afraid to loan because they were having too many foreclosures and savings and loans went under, many people were having to walk away from their homes because they were unemployed and the unemployement insurance was running out. It didn't happen overnight but you'd see a couple of for sale signs that would stay up for a while, than more and more. There was such a glut of office space that banks would not even loan for it. It was some really rough times. People went back to school and took out loans to survive and retool.
That was how I went from working in the oil patch to working as a nurse. I figure even if we go to a barter system (in the absolute worst case) I have a valuable skill.
Happy Hunting and watch out for the bears.

[UpInArms]

63. Broker sees weakening housing market, rising inventories

http://www.marketwatch.com/news/story.asp?guid=%7BD9971...

BOSTON (MarketWatch) -- Analysts at Banc of America Securities on Wednesday morning sent out downgrades on several key home-building companies, saying their research points to cooling demand for housing and growing inventories.

"Early responses to our October survey point to traffic levels that are well below expectations, a meaningful slowdown in home price appreciation, and a build-up of inventory of homes for sale, which likely indicates further weakness in pricing trends in the months to come," BofA analysts Daniel Oppenheim and Michael Wood wrote in a research note to clients.

As a result, they cut shares of Hovnanian Enterprises Inc. (HOV), Ryland Group Inc. (RYL) and Toll Brothers Inc. (TOL) to neutral from buy. Additionally, M.D.C. Holdings Inc. (MDC) was lowered to sell from neutral, while NVR Inc. (NVR) was downgraded to sell from a previous buy rating.

The analysts noted the demographical and geographical differences of the markets each builder serves in their examination of the individual companies.

For example, BofA said it sees particular weakness in the high-end market on a national level, and a softening of demand in Washington, D.C. -- two of the markets that Toll Bros. focuses on. The analysts lowered their 12-month price target to $40 from $52. Still, they expect earnings-per-share growth of 77% in 2005 and 20% in 2006 for Toll.

...more...

[UpInArms]

100. Economists see US housing near peak, eye slowdown

http://today.reuters.com/investing/financeArticle.aspx?...

WASHINGTON, Oct 19 (Reuters) - Rebuilding after Hurricane Katrina should boost an already hot U.S. housing market, but it will only delay an eventual cooling that could bring a significant slowdown in the rate of home price appreciation and dent consumer spending, economists said on Wednesday.

"The housing market is peaking," said Mark Zandi, economist at Economy.com. "We haven't seen it yet but I do think the market is peaking."

Zandi and other economists at a National Association of Home Builders conference said the five-year run in the housing sector should start to taper off as long-term interest rates rise and homes in the priciest areas become more unaffordable.

Already, affordability is at its lowest since 1991, said David Berson, Fannie Mae's <FNM.N> chief economist. In fact, recent data showing weeks of declining mortgage applications could indicate a housing slowdown has begun, Berson said.

"The basic problem is you have huge bubbles, great big bubbles, on the coasts," said David Wyss, chief economist for Standard & Poor's.

Homes in California, Florida and along the East Coast are overvalued, Zandi said. Prices there have climbed annually by double-digit percentages, according to government data. Almost one-third of the top 100 metro areas posted price appreciation of more than 20 percent over the 12 months to June.

...more...

[Birthmark]

21. Deleted to hide my idiocy.

Teach me to read more carefully, that will.

[UpInArms]

25. maybe they are counting all those FEMA pre-fab dwellings

in this report??

Here's what Reuters says:

The Commerce Department said housing starts increased to a 2.108 million unit annual rate in September, as construction on both single-family and multifamily units rose. That outpaced August's upwardly revised 2.038 million unit rate, which was originally reported at 2.009 million units.

Economists had expected starts to slow to a 1.970 million unit annual pace, saying activity likely fell after the storms disrupted construction in the Gulf Coast region.

http://today.reuters.com/investing/financeArticle.aspx?...

[Birthmark]

27. Eeep! I see my glaring hideous mistake.

2 million *annual*, not monthly. Please disregard my earlier post.

[UpInArms]

60. DOE Petroleum Inventories Report

U.S. crude stocks climb a second week: Energy Dept

http://www.marketwatch.com/news/newsfinder/pulseone.asp...

SAN FRANCISCO (MarketWatch) -- The Energy Department said crude inventories rose 5.6 million barrels for the week ended Oct. 14 to total 312 million. Motor gasoline stocks were up 2.9 million barrels at 195.7 million barrels. Distillate supplies fell 1.9 million barrels to 122.7 million. November crude is down 90 cents at $62.30 a barrel. November unleaded gas is down 4.52 cents at a two-month low of $1.69 a gallon. November heating oil is down 1.92 cents at $1.9175 a gallon.

10:30am 10/19/05 U.S. CRUDE STKS UP 5.6 MLN BRLS LAST WK: ENERGY DEPT

10:30am 10/19/05 U.S. GAS STKS UP 2.9 MLN BRLS: ENERGY DEPT

10:30am 10/19/05 U.S. DISTILLATE STKS DOWN 1.9 MLN BRLS: ENERGY DEPT

[UpInArms]

61. API: Petroleum Inventories Report

Crude stocks up over 11 mln barrels: API

http://www.marketwatch.com/news/newsfinder/pulseone.asp...

SAN FRANCISCO (MarketWatch) -- The American Petroleum Institute said crude inventories climbed by 11.3 million barrels for the week ended Oct. 14. That follows an over 7 million-barrel climb in the prior week. The latest government data showed only a 5.6 million-barrel rise. Motor gasoline inventories rose 2.8 million barrels. Distillate stocks were down 871,000 barrels, the API said.

[UpInArms]

88. Beige Book report

2:00pm 10/19/05 RETAIL SALES WEAKER IN SOME REGIONS: BEIGE BOOK

2:00pm 10/19/05 SCATTERED REPORTS INDICATE GROWING PRICING POWER: BEIGE BOOK

2:00pm 10/19/05 LABOR MARKETS TIGHTENING: BEIGE BOOK

2:00pm 10/19/05 HOUSING MARKETS SLOWING IN SOME REGIONS: BEIGE BOOK

2:00pm 10/19/05 WAGE, PRICE PRESSURES GROWING: FED'S BEIGE BOOK

2:00pm 10/19/05 U.S. ECONOMY CONTINUES MODERATE GROWTH: BEIGE BOOK

http://www.marketwatch.com/news/newsfinder/pulseone.asp...

WASHINGTON (MarketWatch) - The economy continued to grow at a moderate pace in most U.S. regions after Hurricanes Katrina and Rita, the Federal Reserve said Wednesday. In the Beige Book account of current economic conditions, Fed banks across the nation reported inflationary pressures were growing and higher wages were reported in a number of industries. Mining, financial services, commercial real estate and manufacturing were solid in most regions, while retail sales and housing were weakening in some areas. "Economic activity continued to expand in September," the Beige Book said.

[54anickel]

111. Link to Fed's report

http://www.federalreserve.gov/fomc/beigebook/2005/20051...

[UpInArms]

20. Treasurys take cues from stocks, data ignored

http://www.marketwatch.com/news/newsfinder/pulseone.asp...

CHICAGO (MarketWatch) -- Benchmark Treasury notes remained firmer Wednesday morning because of stock futures weakness. The bond market largely shrugged off what typically would have been negative news for traders in a report that showed a jump in housing starts and building permits. Construction of new homes surged 3.4% to an annualized rate of 2.108 million, the highest level since February and exceeding the 1.970 million expected. At last check, the 10-year note was up 9/32, or a little more than $2.50 per each $1,000 of securities, at 98 15/32. Its yield fell to 4.44% compared to 4.48% Tuesday.

[UpInArms]

40. Printing Press Report: Fed adds temporary reserves via overnight RPs

http://today.reuters.com/investing/financeArticle.aspx?...

NEW YORK, Oct 19 (Reuters) - The Federal Reserve said on Wednesday it was adding temporary reserves to the banking system through overnight system repurchase agreements.

The benchmark federal funds rate last traded at 3.75 percent, the Fed's 3.75 percent target for the overnight lending rate.

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

See for recent Fed open market operations.

[AnneD]

58. Quick....

buy more stock in paper companies Between Wall St and the Gov. we'll be rich I tell you rich.

[UpInArms]

73. US Treasuries rise, helped by flows out of stocks

http://today.reuters.com/PrinterFriendlyPopup.aspx?type...

NEW YORK, Oct 19 (Reuters) - U.S. Treasury debt prices rose on Wednesday, lifted by concerns about a dimming corporate profit outlook that led investors to move money out of stocks and into the bond market.

Traders and strategists also said the bond market is in an oversold condition after about two months of nearly relentless selling that has brought two-year yields to 4-1/2-year highs and 10-year yields to six-month highs.

But many cautioned that players were merely canceling out selling positions, or short-covering, and not committing to new buying, or long, positions -- a reflection of uncertainty around energy-related inflation and the interest rate outlook.

"The market has been somewhat oversold for a couple of sessions," said one Wall Street bond trader. "And the equity market stuff is a catalyst for some of the short-covering," he added, referring to fears that companies' inability to pass on higher energy-related costs to consumers could hurt profits.

...more...

[UpInArms]

74. Markets worry loyalty to guide Bush in Fed choice

http://today.reuters.com/PrinterFriendlyPopup.aspx?type...

WASHINGTON, Oct 19 (Reuters) - Controversy over the pick of Harriet Miers -- the White House counsel and President George W. Bush's onetime personal lawyer -- for the Supreme Court has stirred concerns on Wall Street that loyalty may trump expertise in the pick of a new Federal Reserve chief.

With Fed Chairman Alan Greenspan due to to step down at the end of January, cartoonist Tom Toles captured the angst by showing a cleaning lady bursting through the Fed's door: "Now who's this Alan Greenspan fellow who I'm replacing?" And bloggers joke about headlines saying, "Bush picks own accountant to replace Fed's Greenspan."

<snip>

Wall Street has focused most of its attention on three names: White House economist and former Fed Governor Ben Bernanke, Harvard economist Martin Feldstein and former Bush adviser Glenn Hubbard.

<snip>

Hubbard, a fiscal expert and architect of Bush's 2003 tax cut, has the closest ties to Bush, although Feldstein advised the president's 2000 campaign.

...more...

[AnneD]

82. Oh, like it's ok for him to put incompetent business friends

in Education, Labor, FEMA, or NYSE etc but when it comes to THEIR self interests...it's a worry.....
good, now those numb nuts will be able to feel our pain too.(Sort of like the rx from the conservative right with the Miers nomination). Thanks for the laugh UIA, I'll be chortling all day about that one.

[UpInArms]

78. Fed's Pianalto Spews: Inflation spike "temporary"

12:27pm 10/19/05 PIANALTO: CORE CPI 'VERY TAME'

12:26pm 10/19/05 PIANALTO FOCUSED ON CORE RATES OF INFLATION

12:24pm 10/19/05 PIANALTO SEES RISKS OF INFLATION AND WEAKNESS

12:24pm 10/19/05 FED'S PINALTO: RATE HIKES WILL DEPEND ON DATA

12:22pm 10/19/05 FED'S PIANALTO EXPECTS TEMPORARY INFLATION SPIKE FROM STORMS

[UpInArms]

80. Fed's Kohn calls for Stopping of Rate Hikes

12:45pm 10/19/05 KOHN: COOLING OF HOUSING MARKET WOULD BE BENEFICIAL

12:45pm 10/19/05 KOHN: LABOR MARKETS ARE NOT TOO TIGHT

12:45pm 10/19/05 KOHN: HURRICANES SHOULD ONLY SLOW GROWTH MODESTLY

12:45pm 10/19/05 KOHN: BALANCE OF RISKS TILTED A BIT TOWARD HIGHER INFLATION

12:45pm 10/19/05 KOHN: OUTLOOK FAVORABLE FOR SOLID GROWTH, LOW INFLATION

12:45pm 10/19/05 KOHN: PAUSING WOULD NOT REDUCE UNCERTAINTY OVER OUTLOOK

12:45pm 10/19/05 FED'S KOHN: NOW IS NOT THE TIME FOR FED TO PAUSE RATE HIKES

[UpInArms]

106. FLIP-FLOP ALERT: Kohn: Now is not the time to pause

http://www.marketwatch.com/news/story.asp?guid=%7B1A42B...

WASHINGTON (MarketWatch) -- There is no benefit for the economy from the Federal Reserve pausing in its gradual path toward higher interest rates, according to Fed Gov. Donald Kohn.

"Obviously, we are considerably closer to where policy needs to be that we were 16 months ago, but we are not yet at a point where we can stop and watch the economy evolve for a while," Kohn said Wednesday in a speech prepared for delivery at Carnegie-Mellon University.

Continued, measured rate hikes would guard against fast growth and could keep inflation contained, he added. Read full text of Kohn's remarks.

Treasury prices did not move much on Kohn's remarks or from speeches by other Fed officials. The market has not been anticipating a pause by the central bank since the last FOMC meeting on Sept. 20. See Bond Report.

The stock market also shrugged off the comments. See Market Snapshot.

Kohn said his best guess was that economic activity will slow modestly over the next year, leaving the economy growing around at its trend rate, which economists generally put at about 3.5%.

The risks to the outlook "may be skewed a little toward the upside on inflation," he added. "Overall, the outlook remains favorable for continued solid growth in real activity and low underlying inflation."

...more...

[UpInArms]

22. Buying on the Margin: Tracinda pledges GM stock as collateral for loan

http://today.reuters.com/investing/financeArticle.aspx?...

WASHINGTON, Oct 19 (Reuters) - Billionaire investor Kirk Kerkorian's Tracinda Corp. said in a regulatory filing on Wednesday that it is pledging its common shares of General Motors Corp. (GM.N: Quote, Profile, Research) as collateral to secure loans of $200 million or more.

Tracinda recently disclosed that it had boosted its stake in GM to 9.9 percent, after U.S. antitrust authorities said they would not oppose a plan by Tracinda, Kerkorian's investment arm, to increase its stake to that level. The plans also include the possibility of Tracinda seeking a seat on the automaker's board.

Tracinda said in a filing with the U.S. Securities and Exchange Commission on Wednesday that it entered into the pledge agreement with Bank of America on Oct. 14.

...more...

[ret5hd]

36. So, BOA is now taking monopoly money as collateral for loans?

am i understanding this correctly? i have a great collection of monopoly money, and i would be more than willing to pledge it as collateral.

[UpInArms]

37. It reminds me of the 80s in OKC

Penn Square Bank - was the object of ridicule later - but would loan lots of dollars to speculative oilies - taking stupid things as collateral - I remember in particular then taking a 10 year old Cadillac as collateral for a couple of million dollars

here's a bit of history for you:

http://www2.sjsu.edu/faculty/watkins/mon.htm

EPISODES OF FINANCIAL FRAUD AND SPECULATION
A CASE OF PERFECT COUNTERFEITING

<snip>

Penn Square Bank of Oklahoma City

Notes on Funny Money by Mark Singer

Funny Money is the story of Penn Square Bank of Oklahoma City, Oklahoma. Penn Square Bank was the bank in Penn Square shopping center. It was a small, neighborhood bank until control of it was acquired by William "Beep" Jennings in 1972. Jennings proceeded to promote a more agressive style of operations. For example, he created a special department to make loans to the oil-and-gas industry in Oklahoma. The OPEC oil price increases which started in 1973 had made energy exploration a much more lucrative venture than it had been before. But there was an adverse selection problem in the energy exploration field. As a bankruptcy lawyer acquaintance of Mark Singer, the author of Funny Money, expressed it, "You've got thirteen thousand oil and gas companies in Oklahoma; maybe fifteen hundred are looking for oil and gas, the rest are looking for investors." (p.12)

At the start Penn Square had capital of four million dollars. Under the rules for national banks, of which Penn Square was one, the largest loan that Penn Square could make to a single customer was ten percent of its capital; i.e., $400,000. This meant that if a borrower wanted a million dollars, Penn Square would have to find another bank to provide the other $600,000. Very soon Penn Square was making loans in excess of its limits and quickly selling the "overline" to other banks. There were some banks, notably Continental Illinois and Seattle First National, that were eager to buy such "overlines." It was a way that they could participate in the higher interest rates on oil-and-gas lending in Oklahoma without having banking operations in Oklahoma. Buying loans made by Penn Square not only gave such banks a way around the restrictions on interstate banking but they were counting on banks like Penn Square to have expertise about local conditions that it would be impossible for them to acquire.

Penn Square began to market most of their loans to "upstream" banks like Continental Illinois and Chase Manhattan. These large U.S. banks were presuming Penn Square was doing all of its homework and only making good loans. Penn Square was focusing more on the one percent fees it earned for making the loans and on the service fees it received for servicing the loans for the upstream banks which purchased the loans. Servicing meant collecting the interest and principal payments and forwarding them to the loan buyer.

This situation of Penn Square receiving fees for writing the loan but not shouldering the risk associated with the loan was dangerous. Penn Square had an incentive to ignore negative factors in the loan applications and soon many of the loans were made with incomplete documentation. Jennings developed the notion of character banking; i.e., lending on the basis of his perception of the character of the borrower rather than the financial fundamentals of the loan project. Jennings often made verbal committments to the borrower without formal applications being completed. The paperwork was to be handled later. But this made it difficult for Penn Square's loan officers to do a proper job on the paperwork for the loan. If the committment on a loan had already been made and the funds withdrawn, how could the loan officer include negative aspects in the paperwork. To do so would have created an embarassing situation in a bank audit or jeopardized the sale of the loan in the secondary market.

...more...

[54anickel]

75. Well, that ought to get him about a dollar, ninety-five!...n/t

[UpInArms]

28. JP Morgan makes a fortune on Oil Future Trading - you lose and they win

http://www.marketwatch.com/news/story.asp?guid=%7B664BB...

NEW YORK (MarketWatch) -- J.P. Morgan Chase said Wednesday that strong investment banking results and profitable trading, particularly in the energy markets, lifted third quarter net income 78% from a year ago.

Also Wednesday, J.P. Morgan said it promoted Jamie Dimon to chief executive, six months early. He succeeds William Harrison, who will remain chairman. See full story.

J. P. Morgan (JPM), which ranked second to Citigroup (C) in terms of underwriting volume in the quarter, said third-quarter net income rose to $2.5 billion, or 71 cents a share, from $1.42 billion, or 39 cents a share, in the year-ago period.

Excluding Bank One merger charges of $221 million, or 4 cents a share, operating earnings would have been $2.7 billion, or 75 cents a share.

...more...

[UpInArms]

35. pre-opening blather

9:01AM: S&P futures vs fair value: -5.5. Nasdaq futures vs fair value: -9.5. Still headed for a lower start, the market's early sentiment has not been helped by rising crude oil ($63.45/bbl) and gasoline prices. Traders await the EIA's latest energy inventory report, which will be released at 10:30 ET. In terms of the session's economic calendar, the Fed's Beige Book is the last item featured, and is slated for 2:00 PM.

8:33AM: S&P futures vs fair value: -5.2. Nasdaq futures vs fair value: -9.0. Futures trade has held steady and continues to set the stage for a lower open today. Although traders' focus rests upon Intel's relatively disappointing Q4 sales outlook, a host of upside Q3 earnings reports may serve as a measure of support today. Early earnings-induced rises in Yahoo (YHOO), Motorola (MOT), EMC Corp. (EMC), and Teradyne (TER) may help counter Intel's effect within the Tech sector, while upside reports from the likes of Altria (MO), Bank of America (BAC), Honywell (HON), and JP Morgan (JPM) could help support the broader market. Separately, housing starts in Sept. checked in at 2108K (consensus 1975K), while building permits came in at 2189K (consensus 2075K).

8:01AM: S&P futures vs fair value: -5.6. Nasdaq futures vs fair value: -9.5. The cash market is set to start the day on the downside. While Intel beat third quarter EPS estimates by a penny, the Q4 guidance it issued after yesterday's close has agitated traders and extended yesterday's bearish sentiment. Next quarter, the world's largest chip maker estimates revenues between $10.2 and $10.8 bln, which translates to sequential revenue growth of 3.0-9.1%; analysts expect sales of $10.65 bln.

[UpInArms]

39. 9:36 EST spinning into the red

Dow 10,264.45 -20.81 (-0.20%)
Nasdaq 2,046.66 -9.34 (-0.45%)
S&P 500 1,174.90 -3.24 (-0.28%)
10-Yr Bond 4.449 -0.32 (-0.71%)

NYSE Volume 74,686,000
Nasdaq Volume 71,859,000

[Tace]

41. MOGAMBO GURU: Things Are Getting Spookier And Spookier

Richard Daughty, the angriest guy in economics
email: [e-mail]

-- The big news, I guess, is that required bank reserves dropped to $42.2 billion, even as bank deposits climbed and new loans/leases dropped. Of course, the Treasury printing up $3.8 billion in actual cash last week was pretty exciting, too. This amount of cash comes to about $27 for everybody in America who has a job. And though it is obviously being used to pay off Iraqis and Halliburton and all kinds of people who would not take a check, it still adds to the world supply of dollars, and after just a couple of transactions will imbed itself in the world economy, ballooning the money supply a little bit more, and the dollar will get just that little bit much weaker.

Of course, it was not just the bankers and the Treasury acting like slimy little toads, as we can usually count on foreigners who have trade surpluses to keep buying our debt, and the other idiotic central banks of the world to keep buying our debt, too. Sure enough, they sank another $3.3 billion into that particular depreciating asset in the last week. What dorks! Imagine going home and explaining to your wife that, thanks to your supreme incompetence, you have lost a LOT of money in nominal terms, and when you adjust those losses for the loss of buying power of the dollar (inflation), then the real losses become so big, so large, so overwhelmingly huge that we are wiped out, and we have to either sell her car or one of the kids, and you know which one I'd pick.

But it is the breadth of the NYSE (cumulative advancing issues less declining issues) versus price which is interesting, as the former spent most of the year rising, and is now falling, while price ain't done squat, and is actually down, too. Hahaha! The dark and deserted hallways of the Mogambo Mansion echo with the eerie Mogambo laugh of contempt (EMLOC) at those who kept buying stocks, kept buying stocks, kept buying stocks in the face of zero gains! And now they are actually down on the year, too! Hahahaha!

-- The new bankruptcy laws took effect Jan 17, and so now if you need to declare bankruptcy, then you first have to pay for "credit counseling." Why? So that there will be a lot of people being put to work as credit counselors, doofus! Perhaps this is the fabled "re-education" that everyone, including the current chairman of the loathsome Federal Reserve, thinks is the answer to everything. American jobs being sent overseas? "Retrain the workers!" they all say. But they never answer the question "Retrain them to do what?" Now you know!

And if the housing boom is actually bursting at last, as is indicated by lots of anecdotal evidence and some odd statistical facts, then all those brokers and dealers and banks and intermediaries of every stripe and kind are going to need something to do with their considerable time, too! See how it all fits together? Hahahaha!

more

http://worldnewstrust.org/modules/AMS/article.php?story...

[UpInArms]

42. Gold futures drop to their lowest level in two weeks

http://www.marketwatch.com/news/newsfinder/pulseone.asp...

SAN FRANCISCO (MarketWatch) -- December gold fell Wednesday morning to trade at a two-week low of $467 an ounce in New York. The contract was last at $468, down $6.60, or 1.4%. December silver also lost 12 cents to stand at $7.715 an ounce and December copper fell 1.85 cents to $1.807 a pound. "Gold is being pressured by overblown concerns about the historically high level of long fund/short commercials positions on the Comex," said Peter Grandich, editor of the Grandich Letter. "Any significant selling should be contained in the $460-$465 area and the surprise is likely to be a quick reversal to the upside."

[ret5hd]

49. looks like a classic 'buying opportunity' to me...

but i'm no pro.

[54anickel]

97. Gold Tumbles Most in Three Months in New York as Speculators Shed Holdings

http://www.bloomberg.com/news/markets/commodities.html

Oct. 19 (Bloomberg) -- Gold in New York fell the most in more than three months on speculation that hedge funds are reducing their holdings of the precious metal, halting a rally since mid- July that sent prices to a 17-year high.

Gold had risen as much as 14 percent since July 19 as speculators and investors bought gold as a hedge against inflation. Speculative long positions, or bets prices will rise, exceeded short positions by 177,410 contracts in New York on Oct. 11, the U.S. Commodity Futures Trading Commission said Oct. 14. The net- long position was the biggest since at least 1983.

``Open-interest has been sky high,'' said Michael Guido, director of hedge-fund marketing and commodity strategy for Societe Generale SA in New York. ``Record long positions were bound to have a little liquidation.''

snip>

``There are some who feel that inflation is a temporary spike that we saw'' in the aftermath of Hurricanes Katrina and Rita, said Frank Lesh, a trader and analyst at Rand Financial Services Inc. in Chicago. ``Now that energy's come off, gold really doesn't like that.''

snip>

A drop in prices may attract physical buyers, traders said. Jewelers bought a record $38 billion of gold in the 12 months ended in June as the global economy grew, the producer-funded World Gold Council said Sept. 7.

``There'll be physical demand probably around $462,'' Guido said.

[RUMMYisFROSTED]

43. Cue Bob Seger: Like a rock....

[UpInArms]

45. 9:54 EST numbers and blather

Dow 10,241.08 -44.18 (-0.43%)
Nasdaq 2,044.26 -11.74 (-0.57%)
S&P 500 1,171.92 -6.22 (-0.53%)
10-Yr Bond 4.445 -0.36 (-0.80%)

NYSE Volume 231,498,000
Nasdaq Volume 202,878,000

9:45AM: As expected, the equity market has started the session in the red. Despite a round of solid Q3 earnings reports, relatively disappointing Q4 sales guidance issued by Intel (INTC) last night - the company forecasts $10.2 to $10.8 bln vs. the $10.65 bln consensus estimate - has given traders a reason to extend selling action today. This morning is one of the heaviest day for earnings reports, and, as usual, about two-thirds of companies are exceeding Wall Street's expectations. Amongst the upside reporters are Honeywell (HON), Alria (MO), EMC Corp. (EMC), Teradyne (TER), JP Morgan (JPM), and Bank of America (BAC); last night, Yahoo (YHOO) and Motorola (MOT) each beat estimates by $0.02. While the data is good and as fundamentals remain much better than recognized, the underlying market tone remains poor and dominated by inflation and interest rate concerns.

9:15AM: S&P futures vs fair value: -4.2. Nasdaq futures vs fair value: -8.0.

[UpInArms]

47. Joe Cocker now playing "With a Little Help from my Friends"

10:03 EST

Dow 10,260.69 -24.57 (-0.24%)
Nasdaq 2,047.95 -8.05 (-0.39%)
S&P 500 1,173.73 -4.41 (-0.37%)
10-Yr Bond 4.439 -0.42 (-0.94%)

NYSE Volume 316,677,000
Nasdaq Volume 264,471,000

adding blather on edit:

10:00AM: While inching off their opening level, each of the indices remain submerged. Leadership is altogether absent, with all ten of the economic sectors sitting well below the flat line. In the early going, it's the Utilities sector (-1.6%) that occupies the laggard seat. Yet again the target of profit-taking, each of the S&P's 33 utility issues are trending negative and helping to erase the sector's 9.8% year-to-date gain. Although Consumer Staples (-0.3%) currently trades on negative turf, relative strength in Altria (MO 72.85 +0.37) helps limit the sector's decline and leaves it as the best performer thus far. For its part, Altria beat Q3 EPS estimates by a nickel this morning, reporting $1.38 per share on stronger than expected revenues. NYSE Adv/Dec 625/1977, Nasdaq Adv/Dec 632/1742

[AnneD]

59. How about...

the Beatles....Get back (to where you once belonged). I think the Joe Cocker tune is reserved for the Oval Office

[RUMMYisFROSTED]

127. Argh. Alas, Sondheim is the last song in the rotation.

Everything's Coming Up Roses

[UpInArms]

55. HNI Corp. (office furniture maker) closing 2 plants (Wash and Cal)

http://today.reuters.com/investing/financeArticle.aspx?...

excerpt:

HNI also said it has begun the shutdown of two office furniture facilities in Kent, Washington, and Van Nuys, California, to simplify its business and reduce costs. Production will be consolidated in other U.S. manufacturing plants, and the company took a third-quarter pre-tax charge of $1.3 million, or 2 cents a diluted share related to the shutdowns.

It expects to take another $2.2 million pre-tax charge in the fourth quarter related to the restructuring and that the restructuring will be completed in the first quarter.

...more...

[UpInArms]

56. Lyondell sees charge for plant closure (Louisiana)

http://today.reuters.com/investing/financeArticle.aspx?...

NEW YORK, Oct 19 (Reuters) - Lyondell Chemical Co. (LYO.N: Quote, Profile, Research) on Wednesday said it will take a third-quarter pretax charge of $195 million, or 49 cents per share, after it decided to stop production of the chemical TDI at its plant in Lake Charles, Louisiana.

Shares of the Houston-based refiner and chemicals producer fell more than 3 percent early Wednesday after the announcement.

Lyondell said the third quarter also included pretax charges of $30 million, or 8 cents per share, as part of insurance claims, from its membership in a consortium, related to Hurricanes Katrina and Rita

The company also estimated the pretax value of lost production from Hurricane Rita at $75 million to $100 million, or 19 to 25 cents per share after tax.

<snip>

Over subsequent quarters, Lyondell said, it expects to incur costs of $65 million for employee termination benefits, plant demolition and contract terminations.

...more...

[UpInArms]

62. 11:10 EST riding the seesaw

Dow 10,290.31 +5.05 (+0.05%)
Nasdaq 2,048.38 -7.62 (-0.37%)
S&P 500 1,175.52 -2.62 (-0.22%)
10-Yr Bond 4.441 -0.40 (-0.89%)

NYSE Volume 799,930,000
Nasdaq Volume 617,002,000

11:00AM: On the back of the Financial sector (+0.3%), the market has modestly advanced. While each of the indices recently rose to positive ground, the S&P and Nasdaq have since slid back to just below the unchanged mark. The trend of strong earnings reports from the banking industry continued this morning, with JP Morgan (JPM 34.50 +0.73), Bank of America (BAC 41.99 +0.42), and Northern Trust (NTRS 50.49 -0.32) all delivering earnings ahead of analysts' estimates. In particular, JP Morgan's 2.0% jump leads both the sector and the Dow, while Bank of America's 1.0% gain lends further support. With Q3 EPS of $0.75, JMP beat expectations by $0.03; BAC's earnings of $1.04 per share came in $0.02 ahead of estimates, as did NTRS's $0.67 per share. While investors remain concerned over the flattening yield curve, solid third quarter reports from banking bellwethers may help to somewhat counter fears today.NYSE Adv/Dec 1004/1934, Nasdaq Adv/Dec 987/1675

10:30AM: The market's major averages have stood still over the past half hour, trending solidly negative amid the losses each sector extends. Materials (-1.1%) has slid into last place, pushed particularly by Phelps Dodge (PD 114.81 -5.15). This morning, Friedman Billings downgraded PD shares to Market Perform from Outperform and sparked a 4.3% decline. Separately, the EIA has delivered its latest inventory report. Last week, crude oil inventories rose 5.55 mln barrels (vs. an expected rise of 2.3 mln barrels), while gasoline inventories rose 2.91 mln barrels (the consensus estimated a 1.5 mln barrel decline) and distillate inventories fell 1.92 mln barrels (vs. the estimated 2.3 mln barrel draw).NYSE Adv/Dec 702/2146, Nasdaq Adv/Dec 713/1836

[UpInArms]

64. CIBC closes U.S. municipal bond desk

http://today.reuters.com/investing/financeArticle.aspx?...

TORONTO, Oct 19 (Reuters) - Canadian Imperial Bank of Commerce (CM.TO: Quote, Profile, Research) has shut its New York-based municipal bond desk and laid off about 20 brokers and traders, saying on Wednesday it was not a core operation for the bank.

"It was really a business that wasn't key to our operations," said CIBC spokeswoman Susan McDougall. "It contributed a very small percentage of revenue."

McDougall said the closure had nothing to do with the bank's trimming-down of its U.S. brokerage operations in recent years.

...more...

[UpInArms]

65. US Biz Investment Report: Cisco To Invest $1.1B in India

How 'bout that "job creation"!

http://www.redherring.com/Article.aspx?a=14055&hed=Cisc...

Network equipment maker will invest $100 million in Indian startups and may set up a manufacturing plant.
October 19, 2005

Cisco Systems said Wednesday that it plans to invest $1.1 billion in India over the next three years in its largest investment yet outside the United States.

Cisco also plans to double its Indian staff from 1,400 to 2,800 over the next three years and will consider setting up a manufacturing plant.

Cisco CEO John Chambers is on a three-day visit to India, meeting prominent government officials, large customers, and staff members.

Shares of Cisco were down a penny to $16.97 in recent trading.

The $1.1 billion will be spent on several initiatives, including $750 million on research and development. Another $150 million will be dedicated to Cisco Systems Capital, a division of Cisco Systems that provides leasing and other financial services to Cisco customers and partners.

Another $100 million will be set aside for investments in Indian startups. Customer support activities will be allocated $100 million as well.

...more...

[ozymandius]

68. 11:40 numbers and blather

Dow 10,269.02 -16.24 (-0.16%)
Nasdaq 2,049.57 -6.43 (-0.31%)
S&P 500 1,173.59 -4.55 (-0.39%)
10-Yr Bond 44.39 -0.42 (-0.94%)
NYSE Volume 969,691,000
Nasdaq Volume 722,137,000

11:30AM: Dropping back below the flat line, the Dow gives back its recent gain as the Financial sector (-0.1%) returns to the red. Traders have shaved 1.8% off of the price of crude ($62.05/bbl) - a decline that comes after the EIA's energy supply report and that has catalyzed a 1.4% loss in the Energy sector. Refiners are faring worst, down 4.5% today and occuping the last place position amid the S&P's 139 subgroups while paring more of its 60.5% year-to-date gain. With respect to the recently released energy inventory data, crude supply rose more than expected, gasoline rose versus an expected decline, and the draw in distillates was less than estimated. NYSE Adv/Dec 841/2166, Nasdaq Adv/Dec 850/1889

[UpInArms]

76. 12:18 EST rangebound and blather

Dow 10,272.70 -12.56 (-0.12%)
Nasdaq 2,048.93 -7.07 (-0.34%)
S&P 500 1,174.51 -3.63 (-0.31%)
10-Yr Bond 4.441 -0.40 (-0.89%)

NYSE Volume 1,152,328,000
Nasdaq Volume 842,125,000

12:00PM: Traders have retained a downbeat sentiment today, shrugging off another round of solid third quarter earnings reports and instead focusing upon a relatively disappointing Q4 revenue forecast from Intel (INTC 23.11 -0.61). Keeping with the trend, about two-thirds of companies have thus far beaten analysts' Q3 EPS estimates - including Intel - but coupled inflation concerns and interest rate worries remain the market's backdrop, against which earnings growth and attractive fundamentals have been muted. A lack of leadership persists today; each sector currently trends lower while each of the major averages remain solidly negative. The Financials sector's fleeting rise led to an advance across the broader market, but its return to the red brought each of the indices back to a similar status. JP Morgan (JPM 34.27 +0.50) stands as the sector's brightest spot, on the rise after reporting EPS $0.03 ahead of expectations. Bank of America (BAC 41.70 +0.13) and Northern Trust (NTRS 50.39 -0.42) beat respective consensus estimates by $0.02, further evidencing the solid earnings trend within the banking sector, but their reports have not been able to counter broad-based selling and the market's attention to the flattening yield curve. Upside EPS announcements from Yahoo (YHOO 35.64 +1.94) and Motorola (MOT 20.77 +0.60) after yesterday's bell and from Teradyne (TER 13.64 -0.29) and EMC Corp. (EMC 13.36 +1.12) have helped to somewhat counter the Intel effect within the Tech sector, but semiconductors' 2.6% plunge keeps the sector on negative turf. Although Honeywell (HON 34.76 -1.17) surpassed EPS expectations by $0.02, the company's downside revenue guidance for FY05 has spurred selling pressure that keeps the Industrials sector (0.2%) below the flat line, and that helps to further stunt the broader market. Consumer Staples, while off 0.2%, has been supported by relative strength in Altria's (MO) earnings-induced rise. The morning's leading laggard has been the Energy sector, which extends a 1.7% loss that crude's 2.4% decline has spurred. Behind the action was the latest energy inventory report. The EIA disclosed a higher than expected build in crude last week (+5.55 mln barrels vs. the expected 2.3 mln barrel rise), while gasoline supply rose (+2.91 mln barrels vs. an expected 1.5 mln barrel decline) and distillates fell less than estimated (-1.92 mln barrels vs. the -2.3 mln barrel forecast). Crude's shaved pricetag has not, however, managed to stimulate much enthusiasm across the broader market today. Separately, the morning's economic calendar featured Sept. reads on housing starts - which rose a strong 2.4% to 2108K (consensus 1975K) - and building permits - which checked in at 2189K (consensus 2075K). At 2:00 ET, the Fed's Beige Book is slated for release.NYSE Adv/Dec 843/2234, Nasdaq Adv/Dec 838/1965

[UpInArms]

69. shiny coin headbump

[54anickel]

70. When it Rains It Pours (Stagflation in the air?)

Edit to replace Mogambo dupe

http://www.prudentbear.com/archive_comm_article.asp?cat...

No, I am not talking about the Northeastern US in October, although I noticed that we got better than a foot of rain in the middle of October- who could have missed that? I am referring to the macroeconomic and inflation data that has been pouring in and is beginning to strain the dams of the “all positive all the time” macroeconomic outlook. Stagflationary dynamics are starting to show up in the data. This is no minor matter for two reasons. Firstly, economic policy- never a precision instrument- is particularly inept at handling the confluence of inflationary and recessionary conditions simultaneously. Second, investors tend to feel about inflation, rising interest and softening profits the way New Yorkers feel about heavy rain. These undeserved and unreasonable perils detract from life and should never have to be tolerated.

The effects of persistently high energy costs and the growing, begrudging discovery that energy prices are not just going to fall and stay low soon, have started to show up as upward price pressures. Rising consumer goods prices, producer goods prices and import prices are getting difficult to ignore. The CPI-U, consumer price measure of all urban consumers, stood 4.7% higher in September 2005 than it did in September 2004. PPI, Producer Price Index, data makes clear that over the last year unadjusted producer prices rose 6.9%. Both CPI and PPI increases have been accelerating across the course of 2005. Import prices advanced 2.3% in August 2005, about 200% of their average increase in months past. The price index that tracks imported industrial non-petroleum materials and supplies has now increased more than 11% in last 12 months. To complicate matters, interest rates are rising, across the curve. I don’t need to remind you that we are a debt fueled consumer driven economy. And our macroeconomic gas - consumer debt - is rising in price, and home price appreciation looks to be cooling.

The above jiffy tour of inflation pressures has a corollary as a recession indicator. The debt bonanza is looking a little peaked. This is true in the corporate debt world and the housing world. S&P analysts are reporting a record 618 corporations poised for debt downgrade consideration as against 318 positioned for possible upgrade. The number of firms and dollars in or nearing below investment grade status looks to be at, or approaching, record levels these days. GM, Ford and Delphi are only one part of this story. The distressed auto parts and manufacture spaces are hugely overweight in the bond markets and their debt figures into a frighteningly high number of structured products. We have recently seen prices flattening or declining in some leading hot housing markets. These developments, rising rates, flat personal earnings and increasing pension and benefit concerns among working Americans begin to hint at a rising probability of a growth recession. This has to be considered alongside a growing likelihood that profit growth will decelerate from recent stellar highs. These are the standard bearers of growth recession risk.

If considered together, the above dynamics suggest a rising probability of stagflationary dynamics. This would deserve real concern absent the fact that economic policy performs poorly in such circumstances. Given this fact, the specter is particularly haunting.

more...

[donkeyotay]

71. Thanks UIA for keeping this thread

You, and the other regulars like Ozy, provide a real service to DU. Every time I see a biz news item that makes me go "hmmm...," I know I can find the dirt here. I especially appreciated your early coverage on Refco, and that itsy-bitsy sleeper story about AIG that mentions Azerbaijan. Thanks.

[UpInArms]

72. you're welcome donkeyotay

just glad that other people don't think that this finance geek news junky is really insane

[54anickel]

79. Waiting for the lights to go out (Ugh!)

Lots to think about in this one. It brings to mind my former employer's complete acceptance and adoration of Moore's Law as universal. Maybe I should send him this article.

http://www.timesonline.co.uk/article/0,,2099-1813695_1,...

We've taken the past 200 years of prosperity for granted. Humanity's progress is stalling, we are facing a new era of decay, and nobody is clever enough to fix it. Is the future really that black, asks Bryan Appleyard



The greatest getting-and-spending spree in the history of the world is about to end. The 200-year boom that gave citizens of the industrial world levels of wealth, health and longevity beyond anything previously known to humanity is threatened on every side. Oil is running out; the climate is changing at a potentially catastrophic rate; wars over scarce resources are brewing; finally, most shocking of all, we don't seem to be having enough ideas about how to fix any of these things.



It's been said before, of course: people are always saying the world will end and it never does. Maybe it won't this time, either. But, frankly, it's not looking good. Almost daily, new evidence is emerging that progress can no longer be taken for granted, that a new Dark Age is lying in wait for ourselves and our children.

To understand how this could happen, it is necessary to grasp just how extraordinary, how utterly unprecedented are the privileges we in the developed world enjoy now. Born today, you could expect to live 25 to 30 years longer than your Victorian forebears, up to 45 years longer than your medieval ancestors and at least 55 years longer than your Stone Age precursors. It is highly unlikely that your birth will kill you or your mother or that, in later life, you will suffer typhoid, plague, smallpox, dysentery, polio, or dentistry without anaesthetic. You will enjoy a standard of living that would have glazed the eyes of the Emperor Nero, thanks to the 2% annual economic growth rate sustained by the developed world since the industrial revolution. You will have access to greater knowledge than Aristotle could begin to imagine, and to technical resources that would stupefy Leonardo da Vinci. You will know a world whose scale and variety would induce agoraphobia in Alexander the Great. You should experience relative peace thanks to the absolute technological superiority of the industrialised world over its enemies and, with luck and within reason, you should be able to write and say anything you like, a luxury denied to almost all other human beings, dead or alive. Finally, as this artificially extended sojourn in paradise comes to a close, you will attain oblivion in the certain knowledge that, for your children, things can only get better.

Such staggering developments have convinced us that progress is a new law of nature, something that happens to everything all the time. Microsoft is always working on a better version of Windows. Today's Nokia renders yesterday's obsolete, as does today's Apple, Nike or Gillette. Life expectancy continues to rise. Cars go faster, planes fly further, and one day, we are assured, cancer must yield. Whatever goes wrong in our lives or the world, the march of progress continues regardless. Doesn't it?

much more...

[54anickel]

81. Fed replacement means high stakes for Bush

http://www.msnbc.msn.com/id/9740665 /

snip>

"This is not just a job about monetary policy anymore," says anti-tax activist Grover Norquist. "Whoever Bush picks will be seen as a great economic spokesperson, period."

Non-partisan appearance vital
A Fed chief's credibility depends upon his or her not being perceived as conventionally political or tied to the White House. Responding to that question in the Rose Garden, Bush himself observed, "It's this independence of the Fed that gives people not only here in America, but the world, confidence." Yet the process of replacing the most recognized authority on U.S. economic policy may be unprecedentedly political.

snip>

Bold initiatives planned for this first year of his second term are either doomed or in trouble. Bush lacks the public support -- and among his own party, the political will -- to win private accounts for Social Security, and his tax-reform panel is recommending changes to the tax code that are politically risky and -- so far, at least -- uninspiring to conservatives. His ability to pass controversial domestic legislation arguably wanes with every passing week and every lost point of job approval.

snip>

The White House may be downplaying its search, but Norquist claims that the lead role being played by Vice President Cheney, confirmed by NBC News, implies "the level of their understanding of how important it is."

[AnneD]

84. oh no...

last time Cheney helped with a job search...he became VP....Cue the heavy breathing..."and thus THE EMPIRE WAS BORN..." da da da da du ta da du ta da.

[54anickel]

83. Credit Quality Lagging in North America

Things aren't looking any better in the coming months; the region has more issuers on review for downgrade than for upgrade.

http://www.cfo.com/article.cfm/5052575/c_5052657?f=home...

snip>

By region, however, Moody's reported just 1.09 upgrades for every downgrade in North America. By comparison, that figure stands at 1.97 in Europe, the Middle East, and Africa; 4.50 in the Asia-Pacific region, and 6.33 in Latin America.

Looking ahead, according to vice president Praveen Varma, Moody's anticipates that the upward trend in credit quality should moderate. The reason? More issuers are on review for downgrade or have negative outlooks than are on review for upgrade or have positive outlooks.

This forecast, too, varies by region. North America has more issuers on review for downgrade than for upgrade, indicating that credit quality will most likely deteriorate, explained Moody's. Asia-Pacific and Latin America, on the other hand, each have more issuers on review for upgrade than downgrade.

In the most recent quarter, Moody's found that downgrades were concentrated in the airline, automotive, and chemical industries. Benefiting from a disproportionately large share of upgrades were the aerospace and defense, packaging, mining and metals, and telecom industries.

[54anickel]

85. Tech recovers, but where are the jobs?

http://money.cnn.com/2005/10/18/news/economy/challenger...

NEW YORK (CNN/Money) - A recovery may be underway in the tech industry, but the sector lags the rest of the economy when it comes to adding jobs, a new survey said Tuesday.

In the first three quarters of the year, technology companies cut 140,696 jobs, up 18.8 percent from the three-quarter total in 2004, according to a report by job placement firm Challenger, Gray & Christmas.

The pace of job cuts in the tech industry has risen nearly 20 percent in the last year, but there are signs that employers in the technology sector are slowing down their pace of job reductions, the survey said, adding that the number of cuts announced in the third quarter was down 24 percent from the same period last year.

However, the sector hasn't managed to consistently add jobs in the last year.

"The gradual slowdown in job cuts would be more encouraging if it were complemented by a rise in hiring, but job creation simply has not materialized. The industry may indeed be recovering when it comes to revenue, profits and earnings, but certainly not when it comes to employment," said John A. Challenger, CEO of the company that conducted the survey.

more...

[UpInArms]

90. 2:25 EST Fed's Beige Colored Pap does its job!

Dow 10,322.24 +36.98 (+0.36%)
Nasdaq 2,064.72 +8.72 (+0.42%)
S&P 500 1,182.75 +4.61 (+0.39%)
10-Yr Bond 4.455 -0.26 (-0.58%)

NYSE Volume 1,780,147,000
Nasdaq Volume 1,289,534,00

2:00PM: Standing steady over the past half an hour, the market's majors hang on to their gains. Meanwhile, Treasuries have risen or the second straight session. In a speech after the market's close yesterday, Federal Reserve Vice Chairman Roger Ferguson indicated that higher energy costs will slow the economy. Specifically, Ferguson said he expected high oil prices would be "quite long lasting'' and shave 1% from growth this year and another 0.5% in 2006. His comments came after Fed Chairman Greenspan said in a speech that "although the global economic expansion appears to have been on a reasonably firm path through the summer months, the recent surge in energy prices will undoubtedly be a drag from now on.'' Following the latest Fed-speak, bond traders appear to have breathed a slight sigh of relief with respect to concerns and uncertainty over the Fed's tightening policy.NYSE Adv/Dec 1359/1834, Nasdaq Adv/Dec 1285/1627

[54anickel]

93. Heh, when it rains it pours

From the article in post #70...

Stagflationary dynamics occur when a growth recession - or worse - occurs alongside upward price pressure, inflation. Policy markers face unique challenges and enhanced prospects of failure in such an environment. Given the normally poor record of policy makers this is scary. As price pressures persist alongside rising trade and federal spending imbalances into 2006, stagflation lurks. Keep your eyes out for data that suggests cooling growth and rising prices. When it rains it pours.


http://www.prudentbear.com/archive_comm_article.asp?cat...

[54anickel]

91. Health insurance imploding

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/1...

snip>

We have reached a critical turning point in the decline of health care in the United States, one almost certain to expand the already appalling figure of 45 million people lacking health coverage nationwide.

"It's not just a breaching of the social contract that's existed between companies and workers," said David Autor, an associate professor of economics at the Massachusetts Institute of Technology. "It's a reflection of how health care costs are out of control.

"Hopefully this will be an opportunity for government and companies to rethink how health care is provided," he added. "The old system is clearly breaking down."

Since World War II, the old system has been predicated on the notion that employers will bear the primary cost of insuring U.S. workers and their families.

more...

[54anickel]

92. Program Trades Dominate NYSE 18 Years After Crash: Taking Stock

http://www.bloomberg.com/apps/news?pid=10000103&sid=aYW...

Oct. 19 (Bloomberg) -- Computer-guided trading, cited for accentuating the U.S. stock market's ``Black Monday'' crash 18 years ago today, now accounts for more than half of the shares changing hands on the New York Stock Exchange.

So-called program trading -- defined by the NYSE as the purchase or sale of a basket of at least 15 stocks valued at a minimum of $1 million -- has grown because of automation in the securities industry, the emergence of exchange-traded funds and the growth of derivatives.

Rather than making the market vulnerable to another plunge, programs help expedite routine transactions, traders said. They may play a larger role once the Big Board lifts restrictions on electronic trades next year.

``This is not your father's program trading,'' said Daniel Mathisson, head of electronic trading at Credit Suisse First Boston in New York. ``We are now seeing that grouping stock trades has become the norm.''

Programs account for 57 percent of the NYSE's trading this year, according to exchange data. The peak of 71 percent was set in the week ended Sept. 16, when the calculation of the Standard & Poor's 500 Index was altered and options and futures contracts on stocks and stock indexes expired.

more...

[UpInArms]

94. AOL to eliminate 700 jobs

http://www.marketwatch.com/news/story.asp?guid=%7B3DED7...

SAN FRANCISCO (MarketWatch) -- Time Warner Inc.'s America Online unit is cutting more than 700 jobs, mostly at its member-service call centers, the company said Wednesday.

AOL spokesman Nicholas Graham said that the cuts represent just more than 4% of the unit's 20,000-employee workforce.

The layoffs come in conjunction with the closing of its call center in Orlando, Fla. Pink slips also will be handed out at AOL's Dulles, Va. headquarters, as well as at centers in Tucson, Ariz. and Jacksonville, Fla.

With these staff reductions, AOL will be "better positioned to remain flexible, nimble and competitive" in a changing market, according to Graham.

AOL's membership has become "more savvy," he said, demonstrating an increasing willingness to seek solutions to computer or access problems online rather than by calling AOL for tech support.

...more...

[TrogL]

122. Maybe "less stupid"

AOL's membership has become "more savvy," he said, demonstrating an increasing willingness to seek solutions to computer or access problems online rather than by calling AOL for tech support.

"more savvy" people would choose a real ISP.

[54anickel]

99. Competitive Devaluations Coming

http://www.gold-eagle.com/editorials_05/laird101805.htm...

snip>

We are in the pre stages of a US recession and the Japanese know that. (if the US consumer does not)... and they are laying out yards of territory ahead of the Yen for the anticipated currency devaluations to mitigate the effects of the US consumer losing their steam.....

The whole objective here is that the world is looking for the last gasps of the US consumer money machine, and anticipating it by allowing their currencies to weaken. Japan of course, the originators of the zero interest rate policies since the early 1990's are doing their game again. They can't really lower rates more, but they can deflate the Yen and thus encourage both exports, and the purchases of US treasuries to boot, killing two birds with one stone. That is a lot easier than buying US Treasuries directly themselves, ie, make it much more attractive for their private entities to purchase US T's and dollar assets, thus relieving themselves of the burden of direct UST purchases, and underpinning the US stock markets because the USD is strengthening..... (Tho I kind of doubt the continued meager strength of the US stock market anyway.)

Once again, if the USD strengthens, and we have inflation in the US and EU, and Japan supports the USD though zero interest rates combined with a weakening Yen, then we will see both gold rise and the USD rise into 2006.... barring a US currency crisis or stock collapse.... I believe the Japanese are banking on this.

Now China, once again is going to be looking very closely at this trend of EURO and YEN weakening... and will be resistant to any further devaluations of their YUAN.....

Trade frictions will begin to rise feverishly, and will not be helped by either competitive currency devaluations in the non US economic sphere, nor the impending currency war VS the US and China.....

more...

[UpInArms]

101. 3:12 EST Irrational Exuberance Continues - Rah Rah!

Dow 10,365.71 +80.45 (+0.78%)
Nasdaq 2,078.80 +22.80 (+1.11%)
S&P 500 1,189.26 +11.12 (+0.94%)
10-Yr Bond 4.461 -0.20 (-0.45%)

NYSE Volume 2,114,605,000
Nasdaq Volume 1,521,861,000

2:35PM: Stocks run higher and traders push all ten economic of the sectors higher and onto positive territory... The release of the Fed's Beige Book may have helped sentiment; here is a synopsis of the context... Economic expansion is moderate as costs pressures rose from energy prices which sent consumer confidence lower.... All Districts reported cost increases for energy, petroleum-based products, building materials, and shipping. Several Districts indicated that input cost increases are being passed through to retail prices...

Employment has been rising, and Federal Reserve Districts reported some tightening in labor markets, which warns of wage based price pressures ahead, but recent wage gains have been moderate. "Widespread" price increases for building materials add to the inflation concern... Manufacturing advanced in all Districts except St. Louis and Atlanta... Separately, the next FOMC meeting is scheduled for Nov. 1.NYSE Adv/Dec 1568/1652, Nasdaq Adv/Dec 1421/1510

[ozymandius]

102. I can understand why the markets are rising so far, so fast.

If the contents of the Fed beige book are enough to push prices higher, then these folks will buy just about anything.

"Hey there, turnip truck fella, wanna buy the Brooklyn Bridge? Uncle Greenscam says that everything's okee dokee."

[UpInArms]

110. It's absolutely astounding that when all the world's markets

fell pretty hard yesterday (this morning), the good ole USoA can just outshine them all.

http://www.democraticunderground.com/discuss/duboard.ph...

[54anickel]

114. Go USA!! Go USA!! RAH-RAH! ZISS-BOOM-BAH....Humbug!

[54anickel]

104. So inflation and rising interest rates are now a good thing for the

stock market? Just when I think I'm starting to understand this Ponzi sheme, stuff like this come around and has me asking

on edit, check out the article by Jim Wille in the post down thread - sounding pretty scary....

[UpInArms]

105. 3:45 EST and riding 'em high!

Dow 10,397.01 +111.75 (+1.09%)
Nasdaq 2,085.80 +29.80 (+1.45%)
S&P 500 1,193.32 +15.18 (+1.29%)
10-Yr Bond 4.463 -0.18 (-0.40%)

NYSE Volume 2,386,930,000
Nasdaq Volume 1,707,621,000

3:30PM: Approaching the closing bell, the major averages continue to move further north and again reach new levels. Presently, 22 of the Dow's 30 components are trending higher, and, of the balance, only three post declines in excess of 1.0%. While all but one sector extend gains, it's the 1.6% offered by the Financial sector that pushes the market higher. Banks are the specific area of strength, attracting buyers following another round of earnings reports from the industry. Today's reporters included JP Morgan (JPM 34.55 +0.78), Bank of America (BAC 42.21 +0.64), and Northern Trust (NTRS 52.26 +1.45) - all of which are on the rise - but virtually every issue within the segment and the sector currently trend positive. Brokers, in addition, have fueled the rise with a 2.2% late-day jump.NYSE Adv/Dec 1866/1393, Nasdaq Adv/Dec 1722/1276

3:00PM: Heading higher, each of the indices establish new session highs. While the Dow has outperformed both the S&P and Nasdaq over the course of the session, it has recently been outpaced by the tech-heavy Nasdaq. Technology has jumped 0.7%, driven by earnings-spurred surges in Yahoo (YHOO 35.69 +1.99) and Motorola (MOT 21.05 +0.88), as well on account of solid standing amid most of the sector's bellwethers. Intel (INTC 23.54 -0.18), still suffering the effect of its disappointing Q4 sales guidance, has pared much of its early loss and currently presents less of a drag on the sector than has been the case throughout the day. Still, though, semiconductors are off 0.6% and somewhat limit Tech's overall advance. NYSE Adv/Dec 1813/1431, Nasdaq Adv/Dec 1683/1284

[54anickel]

107. Imagine that, being led by the financial sector, and with JP Morgan

in the lead.

[UpInArms]

109. do I detect a bit of skepticism on your part, 54anickel?

If so, may I join you?

[54anickel]

112. ..

[54anickel]

103. BANKERS VERSUS USFED !!! (Willie)

http://www.gold-eagle.com/editorials_05/willie101805.ht...

A battle of the titans is shaping up. The BKX bankers index is in the process of breaking down. It represents some of the largest and most powerful money center banks in the United States. Just two weeks ago, a warning was given that the BKX was in danger of breaking below critical support at 95. That level was broken last week. It was quickly rescued. The hint of a banker breakdown should generate enormous political pressure on the USFed to stop hiking rates!!!

Despite fealty bestowed to the banking community from the US Federal Reserve, the measured pace of extremely unwise and reckless interest rate hikes puts the profit margins for bankers at risk. The hikes put the Treasury yield curve and bond speculation profits at risk, as the spread trades do not look so easy anymore. Pressures upcoming on household credit card holders to double their minimal payments will likely result in more defaults, and "setasides" to loan loss reserves for bankers. It is all bad.

THE CHART
A HORRIBLY DANGEROUS BEARISH CHART PATTERN IS EVIDENT. It hits me in the face, unmistakable, and dire on the BKX bankers index. Check for yourself the bearish inverted Head & Shoulders pattern having taken form over the course of this entire 2005 year. No chart fits a textbook version, but this BKX inverted H&S comes close. It spells deep trouble for bankers, who can be expected to take it in the shorts soon. We see a head with peak value in the end of Dec2004. We see a left shoulder high in March2004, and a right shoulder high in July2005. The neckline stands in a ribbon of support at 93 to 95. The upper end of that critical support gave way last week, only to spring back with new energy. Could we have seen the invisible hand of Mr Govt, rather than Mr Market? Methinks yes.

snip>

INTERFERENCE
My personal conjecture is the Plunge Protection Team was busy late last week, and rescued this all important index. Good past earnings for the major banks like JPMorgan et al helped the process. However, continued USFed tightening will surely place monumental stress on these big banks. They must find profits, when the lending operations are under strain, when credit card operations are soon to squeeze the vise, when Treasury spread trades are harder to pull a profit from. One cannot find a more important stock index (outside the S&P500 itself) to control, in order to paint a picture of health, in order to avert a loud gong warning signal. What the SOX is to the technology sector, the BKX is to the financial sector. Yes, sports fans, the Working Group for Financial Markets, whose raison d'être is to serve as the Wizard's signal controller for the increasingly complex train station switch & signal billboard, has entered the fray to control the bankers index.

more...

[Capn Sunshine]

126. as a banker, I'm more worried about Wal-Mart

If they let those guys in, things will get really ugly. I can deal with the index banks breaking down, most of us non money-center ops are fleet on our feet and adequately hedged; the risk for most is taking the wrong side of a bond trade, as tempting as it looks; because there is a LOT that can go wrong exterraneously besides the FED raising; there is a lot of equity downside worldwide which would spike treasury prices despite all the "interest rates are going up" talk.

Hey, that's what makes a market............

[ozymandius]

115. closing numbers

Dow 10,414.13 +128.87 (+1.25%)
Nasdaq 2,091.24 +35.24 (+1.71%)
S&P 500 1,195.76 +17.62 (+1.50%)
10-Yr Bond 44.63 -0.18 (-0.40%)
NYSE Volume 2,674,503,000
Nasdaq Volume 1,893,303,000

At this rate, we cannot afford NOT to have anymore mediocre economic news.

[54anickel]

116. Yee-haw!!! Look at em!!! Hey Ozy, you don't suppose someone's

trying to build up a cushion before the next sh*t storm hits (Wilma or indictments), do ya?

Zoom-boom, to the moon!!! They can almost taste 10,500 again.

[ozymandius]

117. I looked at some penny stocks today for fun.

They were up nearly 50%. A pump and dump setup would not surprise me. But then my youthful countenance belies a soul all too surly and metaphorically hoary with age.

Stash dollars where you can. Get 'em while you can. Plenty of suckers want the go-go '90s to return, if not in substance then only in style.

[AnneD]

119. I always have this vague feeling...

that this game has several levels but it is rigged so most of us stay at the lower level. Oh yah, you might get lucky now and then but the odds are in favour of the house. Makes you go hummmmmm.




Ozy, talking about reaching for the same penny, I initially edited out a pump and dump comment. I think the carnival barker is trying to get us into the tent. I'll pay off my debts and hold on to my dollars and look for the great bargins. And at the rate some of these companies are crashing, you can pick up blue chip penny stocks.

[ozymandius]

120. Well, it is legalized gambling after all.

What skews the normal cause-and effect logic of the gamble is assymetrical data that influences the outcome. It's the asymmetry that digs at my analytical thought process, weighing individual sectors' actions and overall influence on everything else. That's why today's surge in banking stocks led by JP Morgan's profits (the supposed saving grace of the Dow) make me say wtf?. Remember yesterday's disappointing drop in profits among Citibank and Wachovia?

Am I to believe that declining profit ratio among Citibank and Wachovia bled 62 points from the Dow but JP Morgan Chase's et al's okay growth fueled a 128 point boon? Meanwhile the Beige Book says that inflation is tame? Hardly logical. Even healthy cognitive dissonance brought on by the chaos of assymetry cannot will these results into a believable package.

[54anickel]

121. Will they send in the clowns when it falls apart?

Don't you love farce?
My fault, I fear.
I thought that you'd want what I want -
Sorry, my dear.
But where are the clowns?
There ought to be clowns.
Quick, send in the clowns.

....

Isn't it rich?
Isn't it queer?
Losing my timing this late
In my career?
And where are the clowns?
Quick, send in the clowns.
Don't bother - they're here.




Welcome back my friends to the show that never ends
We're so glad you could attend, come inside, come inside
There behind a glass stands a greenback of the U.S.
Be careful as you pass, move along, move along

Come inside, the show's about to start
Guaranteed to blow your head apart
Rest assured you'll get your money's worth
The greatest show in Heaven, Hell or Earth
You've got to see the show, it's a dynamo
You've got to see the show, it's rock and roll, oh

[ozymandius]

118. nonsensical blather

Beginning the day bearishly, the market reversed its tone during the final hour and a half of trading, pushing the indices to their best levels of the session - and of the quarter. While initially disregarding another round of solid third quarter earnings reports, traders perhaps looked back late in the day after declining energy prices and an uneventful Beige Book from the Fed provided relief. Thus far, about two-thirds of reporting companies have exceeded analysts' estimates, a trend that may turn traders' attention towards earnings growth and attractive fundamentals. While Intel (INTC 23.70 -0.02) is on that list, its relatively disappointing Q4 sales outlook issued last night captured the market's focus and teamed with prolonged inflation and interest rate concerns to overshadow the solid earnings delivered across the market's spectrum. The morning was crippled by a lack of leadership, but broad-based buying interest drove each sector to a gain by the session's close. The Financials sector spearheaded the advance, surging 2.0% on account of soaring brokers and banks. Today continued the trend of strong reports from the banking industry - with JP Morgan (JPM 34.76 +0.99), Bank of America (BAC 42.64+1.07), and Northern Trust (NTRS 52.34 +1.53) each beating consensus estimates. The reports were somewhat overlooked in the early going, but, after the Beige Book dropped no inflation bombshells that would stir even further rate-hike anxiety, traders looked upon the sector with delayed optimism. Matching Financials' gain was the Energy sector, fully erasing its decline that left it as the laggard throughout the session. The EIA's latest energy inventory report - which showed a better than expected build in crude alongside a surprise rise in gasoline and a less than expected draw in distillates - induced a sharp pullback in the price of oil, and a subsequent decline in the Energy sector. While the commodity closed 1.6% lower, traders sent all but one the S&P's energy issues higher after the late-day bullish tone took over. At the same time, the crude action helped drive the gas-price sensitive Consumer Discretionary sector to a 2.0% gain; anticipation of eBay's (EBAY 42.01 +1.59) Q3 report, slated for post-bell delivery, also contributed to the advance. Sept. reads on housing starts - which rose 2.4% to 2108K (consensus 1975K) - were announced this morning, and perhaps helped homebuilders lend the sector a 3.1% gain. Upside reports from Yahoo (YHOO 25.91 +2.21) and Motorola (MOT 21.02 +0.85) yesterday evening, as well as from Teradyne (TER 14.29 +0.36) and EMC Corp. (EMC 13.76 +0.52) today, helped support the Tech sector, and Intel's near-full erasure of its intraday decline fostered semiconductors' recovery and the sector's 1.4% rise. Although Honeywell (HON 34.05 -1.88) exceeded EPS expectations by $0.02, its downside FY05 revenue guidance sparked selling pressure; despite its plunge, the Industrial's sector muscled a 1.4% rise. Consumer Staples gained 1.0%, bolstered by earning-induced strength in Altria (MO 73.85 +1.37). Even the Utilities (+0.4%) sector, which again suffered profit-taking attempts today, recovered.NYSE Adv/Dec 2118/1157, Nasdaq Adv/Dec 1969/1060

[Roland99]

123. Perfect graphic for today's bull market >>>>

[AnneD]

124. Don't tell me...

another moran for Bush??? Great pic....

[Roland99]

128. Shaky props holding up the market

[dweller]

125. what's he welding?

that slow gas tank leak?



dp