STOCK MARKET WATCH, Tuesday 15 November

[ozymandius]

Tuesday November 15, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 68 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1790 DAYS
WHERE'S OSAMA BIN-LADEN? 1489 DAYS
DAYS SINCE ENRON COLLAPSE = 1451
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 November 14, 2005

Dow... 10,697.17 +11.13 (+0.10%)
Nasdaq... 2,200.95 -1.52 (-0.07%)
S&P 500... 1,233.76 -0.96 (-0.08%)
10-Yr Bond... 4.60% +0.04 (+0.88%)
Gold future... 469.10 -0.30 (-0.06%)






GOLD, EURO, YEN, Dollars and Loonie


PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Rob Kirby

SHOW ME THE MONEY

This past week saw the Federal Reserve announce that they intend to discontinue publishing weekly M3 money supply aggregate statistics. Additionally,

The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars.

-cut-

Apparently, the Fed would have us believe that they are now worried about the costs associated with reporting M3 money supply data.

-cut-



What these charts show is just how money supply is utilized by the Fed ‘buoy the stock market’ when confronted with adverse readings or downturns in consumer sentiment. Maybe we really would be better off not knowing about such things after all – because at the end of the day - we all know the health of the stock market is paramount and an issue of national security - now isn’t it?

more...

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

[ozymandius]

2. Oil slips toward $57

LONDON (Reuters) - Oil slid toward $57 a barrel on Tuesday as unseasonably warm U.S. weather encouraged refiners to stockpile winter fuel.

With balmy weather limiting demand and OPEC pumping nearly flat out in response to devastating autumn storms in the U.S. Gulf, oil has given up most of its hurricane rally -- falling last week to its lowest point since July.

The cartel's acting Secretary General Adnan Shihab-Eldin said prices are now "more realistic" and reflect a recovering balance between demand and supply.

-cut-

U.S. crude oil inventories, already nearly 13 percent above year-ago levels, likely rose 2 million barrels in the week to November 11 while distillate stocks -- including heating oil -- probably increased by 700,000 barrels, according to a preliminary Reuters forecast of nine analysts .

more

[UpInArms]

26. Dec Crude @ $58.10 bbl - Dec Heating Oil up .1%; Dec Unleaded Gas up 1.9%

11:08am 11/15/05 DEC CRUDE CLIMBS 41C TO $58.10/BRL IN LATE MORNING TRADE

11:08am 11/15/05 DEC HEATING OIL UP 0.1%; DEC UNLEADED GAS RISES 1.9%

[ozymandius]

3. Today's Reports

8:30 AM Core PPI for Oct
Briefing Forecast 0.2%
Market Expects 0.2%
Prior 0.3%

8:30 AM NY Empire State Index for Nov -
Briefing Forecast 17.0
Market Expects 15.5
Prior 12.1

8:30 AM PPI for Oct
Briefing Forecast -0.2%
Market Expects 0.0%
Prior 1.9%

8:30 AM Retail Sales for Oct
Briefing Forecast -1.1%
Market Expects -0.7%
Prior 0.2%

8:30 AM Retail Sales ex-auto for Oct
Briefing Forecast 0.2%
Market Expects 0.3%
Prior 1.1%

[UpInArms]

9. reports tumbling in:

8:30am 11/15/05 U.S. NOV. EMPIRE STATE EMPLOYMENT INDEX 16.9 VS 9.3 IN OCT

8:30am 11/15/05 U.S. NOV. EMPIRE STATE PRICES PAID INDEX AT RECORD HIGH

8:30am 11/15/05 U.S. CORE PPI UP 1.9% IN PAST 12 MONTHS

8:30am 11/15/05 U.S. NOV. EMPIRE STATE PRICES PAID INDEX 60.6 VS 57.3 IN OCT

8:30am 11/15/05 U.S. NOV. EMPIRE STATE INDEX ABOVE CONSENSUS 15.8

8:30am 11/15/05 U.S. PPI UP 5.9% IN PAST 12 MONTHS

8:30am 11/15/05 U.S. NOV. EMPIRE STATE INDEX 22.8 VS 12.1 IN OCT.

8:30am 11/15/05 U.S. SEPT. RETAIL SALES REVISED TO RISE 0.3%

8:30am 11/15/05 U.S. OCT. PPI AUTO PRICES FALL 3.0%

8:30am 11/15/05 U.S. OCT. RETAIL SALES EX-AUTOS RISE 0.9% VS. 0.3% EXPECTED

8:30am 11/15/05 U.S. OCT. PPI ENERGY RISES 4.1%

8:30am 11/15/05 U.S. OCT. RETAIL SALES EXCLUDING GASOLINE FLAT

8:30am 11/15/05 U.S. OCT. CRUDE GOODS PPI UP 6.7%

8:30am 11/15/05 U.S. OCT. RETAIL SALES FALL 0.1% VS. EXPECTED 0.6% DROP

8:30am 11/15/05 U.S. OCT. INTERMEDIATE PPI UP 3.0%

8:30am 11/15/05 U.S. OCT. CORE PPI FALLS 0.3% VS. 0.2% GAIN EXPECTED

8:30am 11/15/05 U.S. OCT. PPI UP 0.7% VS. 0.0% EXPECTED

[UpInArms]

10. U.S. Oct. retail sales fall 0.1%

(guess that fake leak floater story yesterday was wrong :eyes: )

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7B7000E9B9-837E-4576-A26E-EB37234551D5%7D&

WASHINGTON (MarketWatch) - Falling sales of motor vehicles and gasoline dragged U.S. retail sales down in October to an overall decline of 0.1%, the Commerce Department said Tuesday. Auto sales posted a 3.6% decline in October, while consumers bought 0.8% less gasoline than in September. Excluding autos, retail sales rose 0.9%. Minus gasoline, retail sales were flat. Economists surveyed by MarketWatch were expecting retail sales to decline by 0.6%. Excluding autos, economists predicted sales would climb by 0.3%.

All that spending went to the gas pump :eyes:

[UpInArms]

11. U.S.Oct. PPI up 0.7%, core PPI falls 0.3%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38671.3542224653-850583120&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - U.S. wholesale prices increased a greater-than-expected 0.7% in October as energy prices continued to rise, the Labor Department reported Tuesday. The core rate of the producer price index, meanwhile, fell 0.3% in October, due to falling prices for autos, trucks, clothing and food. It was the largest decline in core prices in 30 months. The 0.7% gain in the PPI was much greater than the flat reading expected by economists surveyed by MarketWatch. The 0.3% decline in the core rate was lower than the 0.1% gain expected.

See! There is no inflation - so stop saying that!

[UpInArms]

13. Energy prices push Oct. PPI up 0.7%

http://www.marketwatch.com/news/story.asp?guid={1455E0FA-D43D-4032-9DEF-F51A326A2278}&siteid=mktw

WASHINGTON (MarketWatch) - U.S. wholesale prices increased a greater-than-expected 0.7% in October as energy prices continued to rise, the Labor Department reported Tuesday.

The core rate of the producer price index, meanwhile, fell 0.3% in October, due to falling prices for autos, trucks, clothing and food. It was the largest decline in core prices in 30 months.

The 0.7% gain in the PPI was much greater than the flat reading expected by economists surveyed by MarketWatch. The 0.3% decline in the core rate was lower than the 0.1% gain expected.

The PPI data will keep the heat on the Federal Reserve to maintain its "measured pace" of increases in short-term interest rates. Fed officials have said inflation remains their greatest concern. Core prices remain well behaved, despite growing pressure in earlier stages of production.

The PPI is now up 5.9% in the past 12 months, down from 6.9% last month. The core PPI has risen 1.9% in the past year, down from 2.6% last month.

<snip>

Crude goods prices increased 6.7%, despite a 1.2% decline in basic industrial materials prices. The crude PPI is up 31.5% in the past year.

Energy continued to be the story in October, despite falling gasoline prices. Finished energy prices rose 4.1% in the month.

Prices for wholesale residential electricity soared a record 2.9%, while prices for residential natural gas rose 12.7% and home heating oil prices jumped 12.3%.

...more...

[UpInArms]

19. Producer prices surge while retail slips

http://abcnews.go.com/Business/wireStory?id=1314057

WASHINGTON (Reuters) - U.S. producer prices rose unexpectedly in October as rocketing home heating costs outflanked cheaper gasoline, while retail sales fell on lower auto sales but by less than analysts had expected.

Prices received by farms, factories and refineries increased 0.7 percent last month, defying Wall Street forecasts of a flat reading after September's roaring 1.9 percent gain.

Outside of the volatile food and energy sectors, however, so-called core producer prices declined a surprise 0.3 percent in October despite economist forecasts for a 0.2 percent rise.

Economists said weak underlying inflation in the Labor Department report might prompt the Federal Reserve to soon end its interest-rate rise campaign.

"If the core rate doesn't get out of hand and growth comes in moderate, at some point fairly soon the Fed could decide … to stop raising rates," A.G. Edwards & Sons senior economist Patrick Fearon said.

...more...

[UpInArms]

12. New York factory index shows renewed strength in Nov.

(pay no attention to the inflationary information within this report!)

http://www.marketwatch.com/news/print_story.asp?print=1&guid={EA59FB8F-7FDB-4140-A861-B0169F0D7AF3}&siteid=mktw

WASHINGTON (MarketWatch) -- Manufacturing activity in the New York area rebounded in November, and a key price index rose to a record high, the New York Federal Reserve Bank said Tuesday.

The bank's Empire State Manufacturing index rose to 22.8 in November from 12.1 in October.

The prices paid index rose to a record 60.6 in November from 57.3 in October.

The increase in the overall index was larger than expected. Economists had been expecting the index to rise to 15.8 from the New York Fed's initial estimate last month of 12.1. See Economic Calendar.

The Philly Fed and Empire state indexes are seen as providing good clues about the national manufacturing index to be released in early December by the Institute for Supply Management. The ISM, in turn, is considered the best real-time gauge of the health of the economy.

...more...

[spotbird]

45. Does anyone think they make these numbers up out of thin air?

They seem impossible from my perspective.

[UpInArms]

4. daily dollar watch

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

Last trade 92.4 Change +0.32 (+0.35%)

Tomorrow's Economic Releases: Dollar Awaits Sales and Manufacturing Data

http://www.dailyfx.com/index.php?option=com_content&task=view&id=4842&Itemid=39

Advanced Retail Sales (OCT) (13:30 GMT; 08:30 EST)
Consensus: -0.7%
Previous: 0.2%

Outlook: Following the strong showing in September, retail sales are expected to have fallen 0.7 percent last month due mainly to a decline in gasoline prices and fewer purchases of cars and trucks. Auto sales over the previous month as buyer incentives ended and uncertainty in fuel prices seized potential consumers. On the same note, service station receipts fell as a decline in the cost of crude oil translated into falling gasoline prices for the further refined energy product. Sales of food, furniture and other goods probably rose in October and may accelerate as the holiday season approaches, though cold weather may cut incomes with the cost of heating homes eating into consumers’ wallets. A recent rebound in consumer confidence suggests retail spending was improving toward the end of October. Prior to this change, consumer sentiment was battered by record energy prices in the aftermath of hurricanes in late August and September which damaged oil output and operations in the U.S. Gulf.

Previous: Sales at U.S. retailers rose 0.2 percent in September as consumers spent more to fill their gas tanks and bought furniture and electronics for there homes. Rising incomes and home equity are giving consumers the means to overcome record gasoline prices and support spending on goods and services. Versus expectations of a 0.5 percent rise, the data showed that hurricane Katrina dampened spending in the gulf further than many thought. The largest jump in sales came at filling stations which reported increased 4 percent in September following a 4.6 percent rise. With drivers left with few options to reduce demand, they were forced to accept the burden with prices at the pump averaging $2.90 a gallon. Meanwhile sales at electronics and appliance stores rose 0.8 percent while furniture sales increased 1.2 percent. Sales at sporting goods, hobby, book and music outlets decrease at 0.9 percent.


Empire Manufacturing (NOV) (13:30 GMT; 08:30 EST)
Consensus: 15.5
Previous: 12.1

Outlook: The closely watched and leading measure of manufacturing in the New York area is expected to rise to 15.5 this month, putting an end to three consecutive months of softening growth. The indicator, which gives the first look at manufacturing in the United States, is likely to reflect the effects of lower prices for material costs while orders in the beginning months of the rebuilding effort in storm affected areas stirs to life. New orders will be chief on managers minds for November. Demand from U.S. consumers could be in the jeopardy with confidence falling to a two year low last month and reports for consumer spending still a ways off. Orders from abroad could pick up some of the slack, however, as the economies of many large U.S. trade partners experiencing accelerating growth. Costs for factories will be another closely watched element of the release. The prices paid component has risen four straight months to its highest level for the year after gradually falling to a low in July. With inflation-driving energy prices dropping to levels not seen since July and the component read flattening out, it is likely that prices will drop for the current month. Future prices are still difficult to predict on the other hand with the coming on of winter and cold weather. Employment and capital expenditures for the months to come is also likely to suffer. Hiring will be an issue as manufacturers try to salvage profits. Capital spending will also shore on profits, but the addition of rising borrowing costs will play a deciding factor.

Previous: Growth in general business conditions softened for the second month in a row to 12.1 according to the Empire survey, but overall, activity remains expansive after the brief dip into a contractionary environment in May. With October’s report of manufacturing over the month, the psychological factor that weighed on many factory managers who were uncertain of the environment following Hurricanes Katrina and Rita, gave way to more concrete expectations based on actual numbers. The measure of those managers expecting conditions to improve over the next six months fell to 32.6, its lowest level since September of 2001. Components for the month indicated an improving current picture while optimism for growth over the coming months dimmed. New orders for the period bounced back to 24.9, following September’s sharp decline to 11.6; while expected orders plunged to 37.0 from 45.3. The measure of prices paid and received has been another important factor for business leaders with the prices of energy and raw materials still difficult to pass onto consumers. Prices paid rose once again to 60.4 for current conditions, the fourth consecutive rise; while those received edged higher to 15.6. Looking ahead, the opposite was forecasted. Business leaders anticipate they will have to pay less over the coming months, leading the indicator to fall to 75.3 while expected received prices also narrowed to 34.4. With all-important energy prices easing off of their record levels through September and October, factories will be able to make a more focused effort of responding to weakening demand for their goods rather than conserving revenues amid rising costs.

...more...

[54anickel]

35. Recycling the petrodollars

Exporters of oil are saving more of their recent windfall than in previous price booms. It's hard to spot where the money is going

http://www.economist.com/finance/displaystory.cfm?story_id=5136281

MANY American politicians and pundits explain their country's enormous current-account deficit by pointing at the surpluses of Asian economies, especially China. Undervalued currencies and unfairly cheap labour, they complain, have undermined America's competitiveness. In fact, looking at the world as a whole, the group of countries with the biggest current-account surpluses is no longer Asia but oil exporters, on which high prices have bestowed a gigantic windfall.

This year, oil exporters could haul in $700 billion from selling oil to foreigners. This includes not only the Organisation of Petroleum Exporting Countries (OPEC) but also Russia and Norway, the world's second- and third-biggest earners (see chart 1 below). The International Monetary Fund estimates that oil exporters' current-account surplus could reach $400 billion, more than four times as much as in 2002. In real terms, this is almost double their dollar surpluses in 1974 and 1980, after the twin oil-price shocks of the 1970s—when Russia's hard-currency exports were tiny. The combined current-account surplus of China and other Asian emerging economies is put at only $188 billion this year (see chart 2 below).

Advertisement
Relative to their economies, the oil producers' current-account surpluses are far bigger than China's. Whereas the IMF forecasts China's surplus to be about 6% of GDP this year, it predicts Saudi Arabia's—not much different in money terms, at just over $100 billion this year—to be a whopping 32%. On average, Middle East oil exporters are expected to have an average surplus of 25% of GDP. Russia might record 13% and Norway 18%.

The rise in oil prices represents a big redistribution of income from those who buy oil to those who produce it. Past periods of high prices have not lasted long, but this time oil producers' extra revenues might prove to be more durable. The futures market expects oil to stay expensive, even though the price of a barrel of West Texas Intermediate, an industry benchmark, recently slipped back to around $60.

An enviable choice
What will happen to all these petrodollars? In essence, they can be either spent or saved. Either way, a lot of the money can be recycled to oil-consuming economies and thus soften the impact on them of higher oil prices. If oil exporters spend their bonanza, they import more from other countries and thus help to maintain global demand. They are unlikely to spend the lot, however, because they tend to have higher saving rates than oil consumers: saving is around 40% of GDP in the United Arab Emirates (UAE) and Kuwait, for instance. A transfer of income from oil consumers to oil producers will therefore lead to a slowdown in global demand.

more...

[54anickel]

37. Awash in Petrodollars, Russia Frets About the Paradoxes of Bounty

http://www.nytimes.com/2005/11/15/business/worldbusiness/15petrodollars.html

MOSCOW, Nov. 10 - A few years ago, Russia's finance officials could only dream of the problem Aleksei L. Kudrin described recently.

Thanks to bountiful revenue from oil exports, the Kremlin is in a position to pay $15 billion in sovereign debt ahead of schedule next year.

"We would be ready to pay the whole sum," Mr. Kudrin, Russia's finance minister, explained recently to a group of investors. Other countries, however, are not permitting Russia to accelerate repayment because of other obligations tied to the debt.

Mr. Kudrin's comments illustrate an economic challenge - and a fierce internal debate - novel for Russia, which only seven years ago defaulted on its debt.

As the world's second-largest oil exporter, behind only Saudi Arabia, Russia is taking in $500 million a day from crude oil exports and the cash is gushing faster than the nation can absorb it without causing inflation.

snip>

If it does not manage smartly, however, Russia's embarrassment of new riches can turn into a classic paradox of good times, one that economists call the Dutch disease, afflicting energy-exporting countries.

more...

[UpInArms]

5. US Treasury spokesman-No tax hikes to cut deficits

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-14T223042Z_01_N14426831_RTRIDST_0_ECONOMY-TREASURY-TAXES.XML

WASHINGTON, Nov 14 (Reuters) - A U.S. Treasury Department spokesman on Monday ruled out any tax increases to address the U.S. current account deficit, saying such a move would slow growth and do more damage to the global economy than good.

"One solution that some people have talked about is raising taxes, and that is not going to happen," Treasury spokesman Tony Fratto told reporters at a briefing.

Fratto had been asked to respond to comments last week by International Monetary Fund Managing Director Rodrigo Rato, who said the United States should consider "actions on the revenue side" in addition to spending cuts to help shrink the current account imbalance.

U.S. officials acknowledge that cutting the U.S. budget deficit would probably help reduce the gap, Fratto said.

The current account is the nation's broadest measure of international trade. The persistent and growing U.S. shortfall shows the nation consuming more than it produces and borrowing from abroad to cover the difference.

...more...

[UpInArms]

6. Treasuries brace for the worst before data deluge

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-14T215538Z_01_N14602157_RTRIDST_0_MARKETS-BONDS-UPDATE-3.XML

NEW YORK, Nov 14 (Reuters) - U.S. Treasury debt prices retreated sharply on Monday as investors worried a barrage of economic data this week could give the Federal Reserve even more reason to continue raising official interest rates.

Dealers said part of the selling was simply a retracement of sharp gains at the end of last week, and a natural aftershock to the absorption of $44 billion in new debt taken down at three quarterly refunding auctions.

"A lot of this could just be indigestion," said Adam Brown, co-head of U.S. Treasury trading at Barclays. "And then we have all this data coming up."

The market has been working under the assumption that inflation is rising steadily and consumer spending is tapering off, although a pick up in manufacturing activity is likely to keep the economy growing at an even keel.

Yet any of these premises could change this week, with key releases on retail sales, consumer prices and Mid-Atlantic factories due on Tuesday, Wednesday and Thursday respectively.

<snip>

Greenspan offered his rosy view of U.S. indebtedness on Monday, arguing that foreigners were more than willing to fund the twin budget and current account gaps for now.

...more...

[UpInArms]

20. Printing Press Report:Fed added temporary U.S. reserves via overnight RPs

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-15T145818Z_01_N15358064_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, Nov 15 (Reuters) - The Federal Reserve said on Tuesday that it added temporary reserves to the U.S. banking system through overnight system repurchase agreements.

The benchmark federal funds rate last traded at 4.063 percent, above the the Fed's 4.00 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

This report will cease as of March 23, 2006 per discontinuance of the M3 at the Fed Reserve.

[UpInArms]

7. US chain store sales fall in the latest week-ICSC (weather blamed)

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-15T124538Z_01_NAT001878_RTRIDST_0_ECONOMY-RETAIL-ICSC-URGENT.XML

NEW YORK, Nov 15 (Reuters) - U.S. chain store retail sales fell in the latest week, as warmer weather keep shoppers out of the stores and away from the Veteran's Day sales, a retail report said on Tuesday.

Sales fell 0.6 percent in the week ended Nov. 12, compared with 1.0 percent rise the previous week, the International Council of Shopping Centers and UBS said in a joint report.

Compared with the same week a year ago, sales slowed to 3.9 percent, after a 4.1 percent rise the preceding week.

"Even with retailer's Veteran's Day sales, retail sales seemed to sway with the warm breezes and overall demand for seasonal goods suffered this past week," said Michael P. Niemira, ICSC's chief economist and director of research.

...more...

[AnneD]

22. Morning Marketeers,

:donut: Yeah and I bet when the numbers are down in Nov and Dec they will blame the cold weather :eyes: I can write the copy now..."Even with the Post Thanksgiving Day sales, consumers were kept out of the stores due to the unseasonable cold weather."
And WHAT are those hairballs Greenspan keeps coughing up (didn't think he had that much hair). Anyone have an extra tube of that hairball goo. I'll administer it just so he will stop coughing up that crap.
And what is this nonsense about dropping those reports. Guess we are reaching critical mass with the tinkering. When THIS house of cards collapses-it's going to be nasty.
Happy Hunting and watch out for the bears.

[UpInArms]

8. Inflation Issue to Dominate Questioning of Fed Choice (Chopper Ben hearing

http://www.nytimes.com/2005/11/15/business/15fed.html

WASHINGTON, Nov. 14 - Ben S. Bernanke, President Bush's nominee to lead the Federal Reserve, will have to fend off two contradictory perceptions at his Senate confirmation hearing on Tuesday.

Some Democratic lawmakers worry that Mr. Bernanke, who has contended for years that the Fed should set policy according to an explicit inflation target, will be too focused on price stability and not attentive to employment.

Some bond investors, by contrast, fret that Mr. Bernanke will be soft on inflation. As a Fed governor in 2003, he raised alarms about the "jobless recovery" and the dangers of deflation. As a top adviser to Mr. Bush since June, he has been more confident than many Fed officials that inflation would remain low.

Both images are likely to prove simplistic, but the way Mr. Bernanke deals with them could provide important clues to his long-term vision for the Fed and his efforts to establish credibility.

Mr. Bernanke, a former professor at Princeton University and a Fed governor from 2002 until earlier this year, is likely to win Senate confirmation without a major fight.

...more...

[UpInArms]

14. Fed's Moskow sees higher rates

Home-price drop, resumption of oil climb risk to forecast

http://www.marketwatch.com/news/story.asp?guid=%7B654AB700%2DACB8%2D43E9%2DB2F2%2D09B6841826A7%7D&siteid=mktw

CHICAGO (MarketWatch) - The Federal Reserve will continue to raise interest rates and is prepared to turn more aggressive should expectations for higher inflation become embedded in the U.S. economy, Chicago Federal Reserve President Michael Moskow said Tuesday.

"It will take appropriate monetary policy to keep inflation and inflation expectations well contained. For me, at this time such policy likely entails further removal of policy accommodation," Moskow said at an economic outlook breakfast attended by local business leaders.

"And if inflation expectations did become unhinged, this might require a stronger response."

Moskow is among the regional bank heads who hold votes on the Fed's rotational interest-rate policy panel this year.

Other Fed policymakers have said they agree the target isn't yet at neutral -- not stimulating growth and not holding growth back.

The Fed next meets Dec. 13 and is widely seen raising its 4% lending target to 4.25% then. The course for policy from there becomes less certain, although short-term interest-rate futures markets have priced in strong odds for a quarter-point increase in late January as well.

...more...

[ozymandius]

15. pre-open blather

9:00AM: S&P futures vs fair value: -0.4. Nasdaq futures vs fair value: +1.0. Knee-jerk reaction following upbeat economic data is short-lived, as futures indications slip from recent highs to suggest a mixed open for equities. Even though retail earnings reports continue to be good, as Home Depot (HD) beat Q3 forecasts and boosted its FY05 growth outlook, reports that Nov. sales at Target (TGT) will be below their 4-6% same-store sales target has stalled early momentum.

8:34AM: S&P futures vs fair value: +0.7. Nasdaq futures vs fair value: +3.5. Futures trade gets a boost following tame inflation data, now indicating a slightly higher open for the indices. Oct. PPI rose 0.7%, (consensus 0.0%) but core-PPI fell 0.3%, much better than an expected 0.2% rise, easing inflation concerns. Oct. retail sales fell 0.1% (consensus -0.7%) but sales, ex autos, rose 0.9% (consensus +0.3%), indicative of strong consumer spending heading into the holiday shopping season; Nov. NY Empire State Index rebounded to 22.8 (consensus 15.5). Bonds, however, have held relatively firm, as the 10-yr note is still up just 2 ticks to yield 4.59%.

8:00AM: S&P futures vs fair value: -1.6. Nasdaq futures vs fair value: flat. Futures market versus fair value suggesting a lackluster open for the cash market as investors wait for key economic data and testimony from Fed Chair nominee Ben Bernanke (10:00 ET) to set the direction to early trading. First on the docket, as participants sift through earnings reports from several retailers, will be the latest reads on inflation at the producer level (PPI), Oct. retail sales and regional manufacturing activity (NY Empire State Index) out at 8:30 ET.

[UpInArms]

16. 9:37 EST open for bidness

Dow 10,705.09 +7.92 (+0.07%)
Nasdaq 2,200.75 -0.20 (-0.01%)
S&P 500 1,233.62 -0.14 (-0.01%)
10-Yr Bond 4.608 +0.04 (+0.09%)

NYSE Volume 98,711,000
Nasdaq Volume 93,778,000

[UpInArms]

17. Dec Gold @ $470 oz

9:41am 11/15/05 DEC GOLD CLIMBS 90C TO $470/OZ IN MORNING NY TRADE

9:41am 11/15/05 DEC COPPER NEAR FLAT, DOWN 0.05C AT $1.913/LB

9:41am 11/15/05 JAN PLATINUM FALLS $4 TO $972/OZ AFTER $968.50 LOW

[UpInArms]

18. 9:45 EST numbers and blather (all red now)

Dow 10,687.56 -9.61 (-0.09%)
Nasdaq 2,196.62 -4.33 (-0.20%)
S&P 500 1,231.48 -2.28 (-0.18%)
10-Yr Bond 4.612 +0.08 (+0.17%)

NYSE Volume 175,276,000
Nasdaq Volume 147,134,000

9:40AM: Market opens in lackluster fashion, as investors struggle to fully embrace tame inflation data. Oct. PPI rose 0.7%, much higher than expected as energy prices were up 4.1%; however, core-PPI, which excludes volatile food and energy costs, fell by 0.3% - the largest one-month decline in more than two years, providing no evidence of broad inflationary pressures. Even though underlying inflation trends remain very good, Ben Bernanke's testimony beginning at the top of the hour will be watched closely as the Fed Chair nominee will likely be asked about his views on Fed tightening and previous support of inflation targeting.

[ozymandius]

21. not much to bounce about at 10:09

Dow 10,698.85 +1.68 (+0.02%)
Nasdaq 2,197.50 -3.45 (-0.16%)
S&P 500 1,232.14 -1.62 (-0.13%)
10-Yr Bond 46.00 -0.04 (-0.09%)
NYSE Volume 367,491,000
Nasdaq Volume 298,327,000

[ozymandius]

23. Bernanke to fight for price stability

WASHINGTON (Reuters) - Federal Reserve Chairman nominee Ben Bernanke on Tuesday vowed to fight for U.S. price stability and said while a stated inflation goal could improve monetary policy, he would not rush to take such a step.

"If I am confirmed, I am confident that my colleagues on the Federal Open Market Committee and I will maintain the focus on long-term price stability as monetary policy's greatest contribution to general economic prosperity and maximum employment," Bernanke said in testimony prepared for his confirmation hearing before the Senate Banking Committee.

a bit more

[UpInArms]

27. Chopper Ben spews out the usual lies

11:16am 11/15/05 BERNANKE: ECONOMY BETTER ABLE TO HANDLE HIGH OIL PRICES

11:16am 11/15/05 BERNANKE: INFLATION EXPECTATIONS REMAIN WELL-ANCHORED

[UpInArms]

30. Chopper Ben offers nothing new - sounds like a vaccuum (what's that

sucking noise?)

11:20am 11/15/05 BERNANKE: U.S. CURRENT ACCOUNT GAP MUST COME DOWN OVER TIME

11:20am 11/15/05 BERNANKE: LARGE FEDERAL BUDGET DEFICITS ARE A PROBLEM

[54anickel]

49. Bernanke Tells Senators He'll Keep Fed Free From Politics

http://www.nytimes.com/2005/11/15/business/15cnd-fed.html?ei=5094&en=0e92638466344fcd&hp=&ex=1132117200&adxnnl=1&partner=homepage&adxnnlx=1132081840-vb53YWWkvTEbAliEv+QLUA

Ben S. Bernanke, President Bush's chief economic adviser, promised today to protect the independence of the Federal Reserve if he is confirmed as its chairman.

He also said he would proceed cautiously and seek consensus on his proposal that the central bank aim for a specific rate of inflation, one of the few prospective policies on which his opinion differs from that of Alan Greenspan, the Federal Reserve's current chairman.

Testifying before the Senate Banking Committee in Washington today, Mr. Bernanke described the Fed's independence as "essential to that institution's ability to function effectively and achieve its mandated objectives."

"I assure this committee that, if I am confirmed, I will be strictly independent of all political influences and will be guided solely by the Federal Reserve's mandate from Congress and by the public interest," he said during the televised hearing.

Members of the committee had repeatedly warned him against being too loyal to the White House, which has employed him since early this year and nominated him to be the Fed's chairman.

snip>

Senator Tim Johnson, Democrat of South Dakota, said that an effective Fed leader "refrains from being a cheerleader for either political party" and suggested that Mr. Greenspan, however laudable his policies, had inappropriately testified in support of some White House initiatives.

more...

[UpInArms]

24. Private equity firm sues former Refco executives

http://www.iht.com/bin/print_ipub.php?file=/articles/2005/11/15/business/refco.php

NEW YORK Thomas H. Lee Partners, the private equity firm that owns more than half of Refco, the collapsed futures and commodities brokerage firm, has sued former Refco executives, seeking to recover at least $245 million.

The lawsuit was filed on Monday in U.S. District Court in Manhattan against Phillip Bennett, the former chief executive of Refco who was indicted by a grand jury last week on charges of securities fraud and is free on $50 million bond; Tone Grant, the former president of Refco; and Santo Maggio, the former president and chief executive of Refco Securities, an unregulated subsidiary of Refco. Bennett's lawyer, Gary Naftalis, said he had not seen the Lee Partners suit but said, "Obviously we will vigorously defend the case."

Lee Partners funds bought 57 percent of Refco in 2004. The lawsuit outlines extensive due diligence efforts taken by Lee Partners before investing. Over more than 10 months, it spent more than $10 million to evaluate Refco, it says.

The lawsuit contends that Bennett and Maggio engaged in a fraud to hide bad debts to induce the Lee Partners funds to buy Refco at an inflated price. If the debts had been disclosed, the company's value would have fallen, so the Lee Partners funds would have paid less.

<snip>

Lee Partners has written off its investment in Refco. Three of its funds invested $453 million in Refco, and other investors contributed an additional $54 million. When Refco went public in August, the Lee Partners funds recouped $208 million, and the lawsuit seeks the remaining $245 million.

...more...

[UpInArms]

25. Book Review: Bogle's Beefs

http://www.forbes.com/lifestyle/vehicles/2005/11/14/bogle-vanguard-wall-street-cz_pl_1114bookreview.html

NEW YORK - Do we really need another treatise on how the American financial system went horribly wrong over the past decade? Haven’t we flogged ourselves enough already?

If penned by another author, The Battle for the Soul of Capitalism--with its grandiose title and pretentious American-flag cover art--would appear to be yet another throat-clearing treatise on how to fix the financial markets.

But when the writer is John C. Bogle, ignore the bombast and pay attention.

For years, Bogle, the 76-year-old founder of the Vanguard mutual fund group and inventor of the first index fund, has warned about deep-seated problems in corporate America, particularly the money management business. His laments date back to 1951, when he wrote his Princeton University senior thesis criticizing the fledgling mutual fund business for its high overhead and steep expenses.

<snip>

Do you need further evidence that, in the words of Stigliz, “the pursuit of self-interest does not necessarily lead to overall economic efficiency”? Look no further than Refco. Just before The Battle for the Soul of Capitalism hit bookstores, yet another financial scandal shook investors’ faith in our capital markets. After only two months as a public company, the commodities and futures broker imploded after it disclosed that Refco’s CEO hid $430 million of bad debt owed to the company. Where was the oversight? Three of the nation’s top investment banks, three of the nation’s top law firms, a prominent auditor, the SEC, and a top private equity firm (Refco’s largest shareholder) all failed to uncover the fraud.

...more...

[UpInArms]

28. Webb Furniture to close plant, lay off 309

http://www.roanoke.com/business/wb/40799

Galax-based Webb Furniture Enterprises Inc. will cease its bedroom furniture manufacturing operations in January and lay off 309 employees.

The layoffs will strip the furniture manufacturer of almost 70 percent of its work force, leaving just 160 employees in Webb's two remaining factories: a particle board plant; and a glass and mirror facility, both in Galax.

The layoffs will take effect Jan. 13.

Webb Furniture Enterprises has made wood bedroom furniture since 1925, and Monday its Web site displayed a variety of pine, poplar and oak collections.

But company president Lee Houston said competition from Chinese importers has forced Webb Furniture to stop production of its bedroom lines, which represent almost 70 percent of the company's business.

...more...

[RawMaterials]

29. Outlook sours for real estate

But from the second quarter to the third quarter, the national median home price rose to $215,900, up just 3.5 percent. That contrasts with a 10.4 percent jump in the prior quarter.

And more and more leading indicators are pointing to a slowdown.

In Boston, real-estate investor Matthew Martinez reports recently having spoken to five condo converters. "They all said the party was over," Martinez said.

snip..

Builder pessimism The builders DeKaser surveys are less optimistic than they were even a few months ago. Separately, one leading builder, Pennsylvania-based Toll Brothers, announced last week that expected demand for 2006 would be down, resulting in moderating price increases and fewer sales.

New-home sales declining DeKaser also notes that the number of new homes sold have fallen sharply since peaking in July at an annual rate of 1.3 million units.

DeKaser calls new-home sales (rather than existing-home sales) the canary in the coal mine. "Developers tend to be more sensitive to market conditions," he said. They have cash flow issues, payrolls, and loans that put more pressure on them to sell.

Ordinary home sellers are often more selective than developers, even taking properties off the market if they don't get the price they want. Developers have to drop prices to move inventory.

Inventories rising Supplies of new homes are way up, to nearly 500,000 units, from 350,000 a few months ago. "That's an all-time high for new homes," says DeKaser. The higher the inventory, the more likely prices will fall.

Sell times are up Houses are sitting on the market longer. New homes now take about 4.1 months to sell and existing homes 4.7; both figures are up substantially.

snip..

How to protect yourself

It may already be too late to cash out at the top, which some residents of hot markets have already done. About 500,000 California residents moved out of state since 2001, according to economy.com, many to take advantage of lower housing prices elsewhere.

snip..

People looking to buy right now should shop carefully. Look at a number of homes, try not to fall in love, and be realistic about prices. Don't be afraid to bid low. The days of multiple bids may be over for a while.

With interest rates rising, try to get into a fixed-rate loan.
Adjustable rate loans could adjust to a much higher level when they come due, making monthly bills much costlier. ARMs rates are so close to fixed at this point, it costs little extra to forego the risk of higher rates in the future.


http://money.cnn.com/2005/11/14/real_estate/buying_selling/prices_going_south/index.htm

[UpInArms]

31. Firm says Katrina to cut media spending by $1.13B in 2005-06

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38671.4756528009-850614776&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- The impact of Hurricane Katrina will cut media spending by $1.13 billion over the period between August 2005 to September 2006, making it the costliest natural disaster to ever hit the media industry, according to a Tuesday report from research firm PQ Media. In the 20 U.S. media markets affected by the storm, this loss is expected to account for 2.2% of all media spending, PQ Media said. "The only catastrophic event to have a greater impact on media spending than Katrina was the September 11, 2001 terrorist attacks, which were man-made and affected media spending nationwide," said Patrick Quinn, president of PQ Media, in a statement.

[RawMaterials]

32. Trade Deficits May Scare Off Foreign Cash

WASHINGTON — Federal Reserve Chairman Alan Greenspan cautioned Monday that foreign investors might sour on bankrolling America's mammoth trade deficits, but he expressed confidence that the economy's flexibility would cushion any fallout.

The huge trade deficits the U.S. has been running up each year "cannot persist indefinitely," Greenspan warned in remarks delivered via video link to a conference in Mexico. "At some point, investors will balk at further financing."

snip..

Foreigners have been willing to lend the United States money to finance its current account imbalances. The worry is that at some point foreigners will lose their appetite for holding dollar-denominated investments. That could cause them to unload investments in U.S. stocks and bonds, which would send prices plunging and interest rates soaring.

The constraints on financing the current account deficit are likely to come from "foreign investors' fears" of holding too large a share of their investment portfolios in U.S. stocks and bonds, Greenspan said.

This change in mind-set may already be underway, he suggested.

"Concentration and other risks in holding dollar balances seem to have become a consideration at least for some investors," Greenspan said.

snip..

The current account deficit this year has exceeded 6% of the total U.S. economy as measured by gross domestic product, an all-time high. In 1986, the deficit accounted for 3.5% of GDP.

The U.S. has been able to finance the yawning deficits as foreign investors have become more willing and comfortable investing outside of their respective countries, Greenspan said.

The United States also has benefited from being considered the world's reserve currency, the currency foreigners turn to first when they want to hold investments outside of their country, Greenspan said. This foreign investment has helped to keep U.S. interest rates lower than they otherwise would be.

"Although I doubt that the U.S. dollar will lose its status as the world's reserve currency anytime soon, there are in my judgment lessons to be learned from the experience of as it faded as the world's dominant currency," Greenspan said.

Britain made the mistake of trying to impose extensive regulations in an effort to support its currency's position on the world's stage, which made Britain's economy too rigid in times of financial crisis, he said.

For the U.S., the lesson to be learned from Britain is to maintain financial flexibility, Greenspan said.



http://www.latimes.com/business/la-fi-green15nov15,1,135605.story?coll=la-headlines-business&ctrack=1&cset=true

[RawMaterials]

33. Barrick, Glamis Lead Acquisition Search as Gold Output Falls

Nov. 15 (Bloomberg) -- Gold producers including Barrick Gold Corp. and Glamis Gold Corp. are stepping up their search for acquisitions after years of reduced exploration spending eroded output and sent prices to a 17-year high.

``We are not finding gold as fast as we are mining it as an industry,'' said Glamis Chief Executive Kevin McArthur, who failed last year in his $2.97 billion bid for rival Goldcorp Inc. ``This is developing into a bit of a train wreck,'' prompting companies to consider more acquisitions to boost output, McArthur said.

Global production last year fell to an eight-year low of 2,464 metric tons, the second decline in three years, London- based metals consultant GFMS Ltd. estimates. The drop reflects a plunge in exploration spending after gold reached a 20-year low in 1999 and reserve

snipp..

Scarcity of Gold

Barrick's hostile bid for Placer ``highlights to the market the scarcity of gold in the ground,'' said Evy Hambro, who helps manage $12 billion of natural-resource funds at Merrill Lynch in London, including the $3.4 billion World Mining Fund. ``The gold industry today remains one of the most fragmented of commodity industries.''

World gold production fell 5 percent last year, as fabrication demand rose 5.7 percent, GFMS said.

Buying assets is appealing for companies that want to boost output and take advantage of higher prices because ``if you drill today and found a new ore body, it's between eight to 10 years'' before a mine starts producing, Goldcorp's Telfer said.

http://www.bloomberg.com/apps/news?pid=10000082&sid=aIvnVJdvmsqk&refer=canada

[54anickel]

43. 'Global scramble for gold'

http://www.fin24.co.za/articles/economy/display_article.asp?Nav=ns&lvl2=econ&ArticleID=1518-25_1834813

Johannesburg - Global gold production is set to decline dramatically over the next four years and this is set to generate a scramble for gold ounces, DRDGold chief executive officer Mark Wellesley-Wood said in the company's latest investor newsletter released on Tuesday.
"There are 29 new gold mines in the pipeline right now and even if all these are developed, it would require a further seven projects every year to make up the deficit," he added.

"The reality is that not all these 29 mines will get the go-ahead as cost inflation, especially capital cost inflation for resources projects, has increased by a great deal more than the gold price. So where are the ounces going to come from," Wellesley-Wood wrote.

"Well, not from the traditional source - exploration. Expenditure on exploration peaked in gold mining in 1997, and has been pretty flat since then.

more...

[54anickel]

34. The Coming Disaster in the Derivatives Market

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=48574

snip>

In truth, while no one can say for certain when the day of reckoning will arrive, it seems a good bet that if some of those who are in a position to know are worried about the derivatives market and the associated systemic risks, you should be, too.

One of the difficulties people have with understanding this particular disaster-in-the making is its complexity and seeming irrelevance to their day-to-day lives. Unlike an earthquake or a car bomb, a derivatives-inspired financial meltdown won’t to lead to leveled buildings or bloodshed, at least initially. Yet, the toxic fallout will likely be as painful, long-lasting, and difficult to overcome as any of the more widely discussed scenarios.

What makes the coming debacle even more difficult to comprehend is that it stems from a long chain of seemingly benign interactions and financial relationships. Indeed, despite the fact that the modern derivatives market has flourished because of big money, complex technology, and highly-paid talent, the culprit when it all goes wrong is likely to be simple: human emotions -- fear and greed -- run amok.

For most people, the term “derivative” has little meaning. In many cases, the mere mention of the word is enough to cause eyes to glaze over. That is partly because these financial instruments are somewhat ethereal. They are, in other words, largely created out of thin air. Practically speaking, they have no value in and of themselves.

They are also hard to understand because, like many intangible concepts that occasionally involve a great deal of theory and calculation, academics have done wonders transforming the complex into the incomprehensible. As is often the case, though, if you break them down into smaller, more digestible parts, they are easier to grasp. That is also true with respect to the derivatives market.

more...

[ozymandius]

36. 12:27 and market says "hooray for us"

Dow 10,731.74 +34.57 (+0.32%)
Nasdaq 2,203.16 +2.21 (+0.10%)
S&P 500 1,237.02 +3.26 (+0.26%)
10-Yr Bond 45.53 -0.51 (-1.11%)
NYSE Volume 1,097,818,000
Nasdaq Volume 807,399,000

12:00PM : Market still fluctuating around the unchanged mark midday as mixed economic data, ongoing analysis of Bernanke's testimony and split sector leadership dictate trading. Earlier, Oct. PPI rose a much higher than expected 0.7%, as energy prices were up 4.1%; however, core-PPI, which excludes energy, fell by 0.3% - the largest one-month decline in more than two years. Oct. retail sales fell a much smaller than expected 0.1% while sales, ex autos, were up a surprisingly strong 0.9%. Even though the market has yet to completely embrace this morning's economic reports, perhaps on account of the major indices averaging a solid 4.9% advance over the last three weeks, the overall bullish data further validate Briefing.com's view that no evidence of broad inflationary pressures and otherwise strong consumer spending trends should lead to a traditional year-end rally. Fed Chair nominee Ben Bernanke pledging Fed continuity following Greenspan's departure and reducing uncertainty about the direction of interest rates during his testimony before Congress, which has knocked the yield on the 10-yr note (+14/32) to 4.54%, lends further credence behind our belief that the Fed's magical neutral level may come sooner rather than later. With regard to sector leadership, Energy remains the most influential sector as oil prices trade near session highs. Health Care has also turned in a solid performance, Johnson & Johnson's (JNJ 62.88 +2.37) revised merger proposal for Guidant Corp. (GDT 62.58 +4.83) offsets reports that Pfizer's (PFE 21.97 -0.28) Lipitor failed to beat Zocor in a recent heart study. Consumer Discretionary, though, continues to be the biggest drag on the market and overall sentiment, as reports that Nov. sales at Target (TGT 53.78 -4.65) will miss previous sales forecasts overshadows Home Depot's (HD 42.56 -0.01) strong Q3 report and boosted FY05 growth outlook.DJTA -0.6, DJUA +0.9, Nasdaq 100 +0.2, Russell 2000 -0.4, SOX +0.8, S&P Midcap 400 +0.3, XOI +1.8, NYSE Adv/Dec 1312/1769, Nasdaq Adv/Dec 1020/1841

[54anickel]

38. GAO Finds Serious Flaws in IRS Controls

http://www.cfo.com/article.cfm/5163030/c_5163088?f=home_todayinfinance

The Internal Revenue Service has had serious shortcomings in its internal controls and financial management systems that caused it to sap its resources in the preparation of its financial statements in the fiscal years of 2004 and 2005, according to a recent report by the U.S. Government Accountability Office.

As a result of the controls and systems flaws, the IRS didn't keep effective watch over its financial reporting or legal and regulatory compliance, according to the GAO. Thus, the revenue service didn't "provide reasonable assurance that losses, misstatements, and noncompliance with laws material in relation to the financial statements would be prevented or detected on a timely basis," the report concluded.

snip the "you're doin a heck of job">

"This first phase of IFS provides for improved audit trails and more timely information for such activities and transactions as travel, purchases of goods and services, and budgetary activities," the GAO report asserted. Further, the IRS continued to progress in terms of addressing its "weaknesses in controls over hard-copy taxpayer receipts and data and over property and equipment."

But the GAO still considers issues related to the IRS's controls over financial reporting, management of unpaid assessments, collection of revenue and issuance of tax refunds, and information security to be material weaknesses. What's more, the accountability office asserted that the IRS didn't always comply with a law concerning the timely release of tax liens.

more...

[54anickel]

39. U.S. fears it's losing ground to Asia in science and innovation (Well DUH)

http://www.iht.com/articles/2005/11/14/business/invent.php

snip>

"The scientific and technical building blocks of our economic leadership are eroding at a time when many other nations are gathering strength," the National Academy of Sciences observed in a report released last month. Leading U.S. scientists, corporate executives and educators oversaw the drafting of the report, "Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future," available online at NAS.edu.

"Although many people assume that the United States will always be a world leader in science and technology, this may not continue to be the case, inasmuch as great minds and ideas exist throughout the world," it said. "We fear the abruptness with which a lead in science and technology can be lost - and the difficulty of recovering a lead once lost, if indeed it can be regained at all."

To spur innovation, it recommends enhanced mathematics and science education in primary school and high school, a more hospitable environment for scientific research and training at the college and graduate levels, an increase in federal funds for basic scientific research and a mix of tax incentives and other measures to foster high-paying jobs in groundbreaking industries.

The report cites China and India among a number of economically promising countries that may be poised to usurp the United States' leadership in innovation and job growth.

"For the first time in generations, the nation's children could face poorer prospects than their parents and grandparents did," the report said. "We owe our current prosperity, security and good health to the investments of past generations, and we are obliged to renew those commitments."

The Industrial Research Institute, an organization in Arlington, Virginia, that represents some of the largest U.S. corporations, is also concerned that the academic and financial support for scientific innovation is lagging in the United States. The group's most recent data indicate that from 1986 to 2001, China, Taiwan, South Korea and Japan awarded more doctoral degrees in science and engineering than did the United States. From 1991 to 2003, research and development spending in the United States trailed that of China, Singapore, South Korea and Taiwan - in China's case by billions of dollars.

more...

[54anickel]

40. A 'fiscal hurricane' on the horizon (comptroller general of USoA!)

http://www.usatoday.com/news/washington/2005-11-14-fiscal-hurricane-cover_x.htm

WASHINGTON — The comptroller general of the United States is explaining over eggs how the nation's finances are going to hell.
"We face a demographic tsunami" that "will never recede," David Walker tells a group of reporters. He runs through a long list of fiscal challenges, led by the imminent retirement of the baby boomers, whose promised Medicare and Social Security benefits will swamp the federal budget in coming decades.

The breakfast conversation remains somber for most of an hour. Then one reporter smiles and asks, "Aren't you depressed in the morning?"

Sadly, it's no laughing matter. To hear Walker, the nation's top auditor, tell it, the United States can be likened to Rome before the fall of the empire. Its financial condition is "worse than advertised," he says. It has a "broken business model." It faces deficits in its budget, its balance of payments, its savings — and its leadership. :wow:

Walker's not the only one saying it. As Congress and the White House struggle to trim up to $50 billion from the federal budget over five years — just 3% of the $1.6 trillion in deficits projected for that period — budget experts say the nation soon could face its worst fiscal crisis since at least 1983, when Social Security bordered on bankruptcy.

Without major spending cuts, tax increases or both, the national debt will grow more than $3 trillion through 2010, to $11.2 trillion — nearly $38,000 for every man, woman and child. The interest alone would cost $561 billion in 2010, the same as the Pentagon.

more...

[RawMaterials]

44. "Social Security is Grenada," Holtz-Eakin says. "Medicare is Vietnam."

Inaction could have these consequences, experts say: Higher interest rates. Lower wages. Shrinking pensions. Slower economic growth. A lesser standard of living. Higher taxes in the future for today's younger generation. Less savings. More consumption. Plunging stock and bond prices. Recession.


:scared:

[converted_democrat]

46. I knew it was bad, but I did not realize it was this bad.....

If this guy is correct, it sounds like we are really screwed.

[54anickel]

47. Oh yeah, big time. Plenty of blame to go around, however the master

of it all....

[AnneD]

50. This guy confirms....

the gut feeling that I have had for some time. You don't need charts or graphs-just a knowledge of kitchen pantry economics. You can only use what you have in the pantry. Not only have we depleted our treasury pantry by taking out more than we put in (tax cuts while increasing spending)we have shifted our economy to favour investment income over wages. Those that actually produce something to sell-which might reduce the deficit, are penalized.

These changes are chocking the middle class where most of the economic seed corn is stored-which is bad for our economic future-but Wall Street doesn't seem to get this yet. They are so wrapped up in shaving off a few bucks of labour costs off the bottom line so they can generate a few pennies profit.

Most of these companies have not had fat to cut in years and this cost cutting is into muscle and tissue now. Many companies look great on paper but are so sick. Paper assets are just that, paper and not real wealth. This ponzi scheme is almost over and it will be a shock to many caught off guard.

[54anickel]

41. Elasticity or Complacency? (Roach)

http://www.morganstanley.com/GEFdata/digests/20051114-mon.html#anchor0

snip>

I think a lot about the so-called built-in shock absorbers of a $44 trillion global economy. And whenever I worry about the dark side of global rebalancing, I always remind myself of the countless examples of the world’s inherent resilience. That’s been especially the case in the accident-prone US over the past five and a half years. America has successfully withstood the repeated blows from a bursting of the equity bubble, a devastating terrorist attack, and an unprecedented wave of corporate accounting scandals. Of course, the examples of US resilience go back much further into time -- wars, double-digit inflation, the twin deficits of the 1980s, the hollowing out of US manufacturing, to say nothing of the stresses of social and racial tension. Time and again, a flexible US economy has proved to be extraordinarily resilient in the face of such adversity. There have been bumps in the road along the way -- recessions and bear markets for us macro folks -- but the American model has endured, taking the United States to an unparalleled position of global dominance. The rest of the world has a major stake in these accomplishments. In a US-centric global economy, America’s resilience defines the world’s resilience.

There was broad recognition at this year’s Lyford Cay conference that the US and China were likely to remain the key players on the global stage for some time to come. The US-China symbiosis was singled out for special attention in this regard. America has cut a great deal, went the argument, and so has China -- the goods-for-bonds trade was widely viewed as logical, sustainable, and in both nations’ interests. I challenged the group on this key point, underscoring the costs of this deal. From the US side, those costs are manifested in the form of record levels of household sector indebtedness, an unprecedented saving shortfall, and the mother of all current account deficits. For China, the costs of sustainability include mounting trade frictions with the US, excess credit creation (due to unsterilized currency recycling), and huge potential fiscal costs of a dollar-related depreciation of China’s official reserves. The real problem, of course, is that this co-dependency is deepening: With America’s overall national saving rate likely to fall further over the next year, the US current account deficit is likely to widen further. That means, barring a new source of capital inflows, there will be an ever-greater burden on Chinese capital to fill the void. That ups the ante on the costs of sustainability on both sides of the equation -- for the US as well as for China.

There was an interesting sidebar to this discussion -- the possibility that petro-dollars might play an increasingly important role in funding America’s ever-widening current account deficit. That could be an important twist in the global macro equation, especially since the world’s three largest surplus savers -- Japan, Germany, and China -- are making efforts to boost internal demand. Should those efforts bear fruit, the biggest current account surpluses would be shrinking at precisely the moment when the biggest deficit would be widening -- an outcome that could well put excruciating pressure on the dollar and real US interest rates. With elevated oil prices triggering roughly a $300 billion revenue windfall for the Middle East oil producers, a recycling of those flows back into dollar-denominated assets would certainly ease America’s current-account financing pressures. One of the investors present at Lyford Cay who had a good read on Middle East equity flows noted that there was little interest in the US. Another investor with a good read on the bond business suggested that there was no problem in attracting petro revenues into dollar-denominated fixed income instruments. Many viewed this as yet another example of an elastic world rising to the occasion and dealing with tough issues -- in this case, an energy shock as well as a current account financing problem.

China played a new role at this year’s Lyford Cay conference. As usual, few of the investors expressed any interest in mainland Chinese stocks. But most were confident that the Chinese growth miracle was here to stay. That’s a real switch from the sentiment expressed in years past. Since the late 1990s, my steadfast bullishness on China generally was, in fact, met with great skepticism at this conference. A banking crisis was always feared to be around the corner; the Chinese economy was always thought to be weaker than the official data indicated; and there ongoing concerns over internal stability and potential geopolitical tensions. Suddenly, those concerns have all but vanished into thin air. China is now viewed as a perma-growth story -- unlikely to succumb to any of the problems that were frequently raised in previous years.

This shift in the perception of the China factor underscored a worrisome complacency that was evident throughout most of this year’s conference. The assembled investors understood the essential requirements of today’s two-engine world economy -- that both the US and the Chinese economies had to remain in solid shape to keep the party going. Yet they were more than willing to make that leap of faith. US vulnerabilities were dismissed -- despite an energy-related slowing of personal consumption, signs of stress in housing markets, and the ever-present threat of a current-account adjustment. China’s vulnerabilities were also dismissed -- despite an export- and investment-led growth dynamic that was nearing its limit and a crack in the armor of China’s biggest source of end-market demand, the American consumer. In these respects, the Lyford Cay consensus very much mirrored the sentiment I have picked up in my recent travels around he world. Investors treat economic imbalances like pandemics -- low-probability risks that are worth worrying about but not losing sleep over. One seasoned investor went even further, welcoming the discussion of thin-tailed events as the “healthy skepticism that keeps the US strong.”

more...

[northzax]

42. Amazon replaced ATT in the SP500

no ATT, it feels strange, you know?

[54anickel]

48. 2:05 - Where'd all them buyers go?

Dow 10,695.73 -1.44 (-0.01%)
Nasdaq 2,191.57 -9.38 (-0.43%)
S&P 500 1,231.94 -1.82 (-0.15%)
10-Yr Bond 45.47 -0.57 (-1.24%)
NYSE Volume 1,498,954,000
Nasdaq Volume 1,101,522,000

2:00PM : Renewed selling interest within the last 30 minutes more than halves recent market gains and sends the S&P and Nasdaq below the flat line for the first time this afternoon. Further consolidation throughout the Financial sector, in the wake of last month's impressive 10.8% surge, and the Consumer Discretionary sector's 1.1% sell-off, continue to weigh heavily. Nonetheless, it is worth noting that the lack of conviction behind the market's early recovery efforts has been mirrored in the indices recent reversal of fortune, as losses remain modest at best. NYSE Adv/Dec 1444/1767, Nasdaq Adv/Dec 1135/1798
1:30PM : More of the same for the market as blue chips continue to outpace their Nasdaq counterparts to the upside. Helping the latter cling to a tiny gain has been Amazon.com (AMZN 45.21 +2.68), which has soared 6.3% after it was selected to replace AT&T (T 19.81 -0.10) in the S&P 500. To that end, AMZN's $18.7 bln market cap will not impact the broader market until next Monday. NYSE Adv/Dec 1509/1681, Nasdaq Adv/Dec 1270/1665

1:00PM : Range-bound trading persists but buyers remain in control of the action. The dollar, though, continues to consolidate after reaching a two-year against the euro amid an unexpected decline in German investor confidence. Taking advantage of a pullback in the greenback from session highs has been the dollar-sensitive Materials sector, as follow-through buying in paper as well as strength in chemicals and diversified metals offsets weakness in steel, which was downgraded to Cautious at Morgan Stanley. However, as the least influential sector on the S&P, a 0.6% gain still does little to offset modest weakness in the more influential Financial sector. NYSE Adv/Dec 1561/1582, Nasdaq Adv/Dec 1250/1656

12:30PM : The indices continue to sport modest gains as the afternoon session gets underway. The Dow, in fact, has recently hit session highs and trades near its best levels since August, as components like McDonald's (MCD 34.02 +0.09) and Walt Disney (DIS 26.02 +0.01) - a suggested holding in Briefing.com's portfolio for active investors - turning positive have lent additional support. Johnson & Johnson's (JNJ 62.93 +2.42) 4.0% surge continues to provide the bulk of upside momentum. NYSE Adv/Dec 1446/1682, Nasdaq Adv/Dec 1139/1742

[ozymandius]

51. 3:20 and bye

Have a great evening folks! :hi:

Ozy

Dow 10,671.88 -25.29 (-0.24%)
Nasdaq 2,184.39 -16.56 (-0.75%)
S&P 500 1,227.56 -6.20 (-0.50%)
10-Yr Bond 45.57 -0.47 (-1.02%)

NYSE Volume 1,888,881,000
Nasdaq Volume 1,401,114,000

2:30PM: Indices continue to weaken as widespread selling pressure pushes the Dow below the flat line. Just as Exxon Mobil (XOM 56.38 -0.27) was partly responsible for the Dow's late-morning turnaround, as oil prices traded near session highs, fresh session lows in oil ($56.90/bbl -$0.79) heading into the close of commodities trading have pushed XOM shares to their worst levels of the day. Of the other 19 Dow components losing ground, General Motors (GM 23.12 -0.62), which is discussing the possibility of buying out older workers at supplier Delphi, leads the way lower for a second consecutive session. NYSE Adv/Dec 1177/2052, Nasdaq Adv/Dec 959/2011

[RawMaterials]

52. Closing numbers and blather

Dow 10686.44 -10.73 (-0.10%)
Nasdaq 2186.74 -14.21 (-0.65%)
S&P 500 1229.01 -4.75 (-0.39%)
10-Yr Bond 4.557% -0.47

NYSE Volume 2,296,041,000
Nasdaq Volume 1,744,850,000


Close Dow -10.73 at 10686.44, S&P -4.75 at 1229.01, Nasdaq -14.21 at 2186.74: The market failed to hold onto modest midday gains as the absence of spirited leadership amid mixed economic data and company guidance closed the indices near their worst levels of the session. Before the bell, core-PPI unexpectedly fell 0.3% - the largest one-month decline in more than two years, easing inflation fears. Nevertheless, before investors could use a tame producer inflation read as a catalyst to justify an average three-week, 4.9% advance for the major indices and lend further support to Briefing.com's anticipation of a traditional year-end rally, the market awaited Ben Bernanke's views on Fed tightening and inflation targeting. While the Fed Chair nominee's remarks were reassuring to the Treasury market, uncertainty surrounding tomorrow's more influential consumer inflation (CPI) data acted as an overhang. Even though Oct. retail sales, ex autos, rose a stronger than expected 0.9%, and retail earnings reports continue to be good, as Home Depot (HD 42.35 -0.22) beat Q3 forecasts and boosted its FY05 growth guidance, a warning from Target (TGT 54.26 -4.17) that Nov. sales will miss previous forecasts tarnished investors expectations of a strong holiday season and weighed heavily on Consumer Discretionary. While Briefing.com expects consumer spending in Q4 to be flat, we think improved labor conditions and the fact that Americans almost always spend more than expected during the holidays will result in decent holiday spending. Signs of a more restrictive lending policy, as evidenced in the flattening of the yield curve between the 2-yr and 10-yr note to 9 basis points - the narrowest yield curve since January 2001, exacerbated consolidation efforts in Financial. The 10-yr note more than erased yesterday's pullback, finishing up 13 ticks to yield 4.55% after Bernanke pledged Fed continuity and guidance to reduce uncertainty about the direction of interest rates. Losses across the board in Technology, as evidenced in the tech-heavy Nasdaq outpacing its blue chip counterparts to the downside, and weakness in Energy, which provided early leadership when oil prices were at session highs above $58/bbl but closed down as crude oil lost 1.2%, also weighed on overall sentiment. Health Care, however, provided some support, as a 3.8% surge in Johnson & Johnson (JNJ 62.81 +2.30), after agreeing to revise its acquisition price for Guidant Corp. (GDT 62.52 +4.77), helped counter reports that Pfizer's (PFE 21.88 -0.37) Lipitor failed to beat Zocor in a recent heart study. DJTA -1.3, DJUA +0.4, DOT -0.7, Nasdaq 100 -0.5, Russell 2000 -1.2, SOX -0.3, S&P Midcap 400 -0.5, XOI -0.5, NYSE Adv/Dec 1038/2258, Nasdaq Adv/Dec 892/2136

3:30PM : Stocks extend their reach into negative territory with only a half hour left in the trading day. While a decline in borrowing costs may have helped minimize losses throughout Financial early on, the fact that 10-yr yields have fallen to a more attractive 4.55% has been overshadowed by a flattening to within 9 basis points of 2-yr note yields (4.46%) - the narrowest yield curve since January 2001 and significantly narrower than the 187 basis-point spread nearly a year and a half ago (when the Fed began the first of its 12 consecutive rate hikes) and the 116 basis-point spread at the beginning of 2005. Such narrowing raises concerns of a more restrictive lending policy and has been evidenced in the banking industry's disappointing performance of -0.8% in 2005 compared to the brokerage group's 26.6% year-to-date surge. Respective losses of 1.1% and 1.5% today have contributed to a 1.1% decline in Financial. NYSE Adv/Dec 999/2281, Nasdaq Adv/Dec 853/2142



See ya all at the casino tomorrow :bye: