STOCK MARKET WATCH, Tuesday 3 January

[ozymandius]

Tuesday January 3, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 19 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1839 DAYS
WHERE'S OSAMA BIN-LADEN? 1538 DAYS
DAYS SINCE ENRON COLLAPSE = 1500
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 3
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 December 30, 2005

Dow... 10,717.50 -67.32 (-0.62%)
Nasdaq... 2,205.32 -12.84 (-0.58%)
S&P 500... 1,248.29 -6.13 (-0.49%)
10-Yr Bond... 4.40% +0.02 (+0.43%)
Gold future... 518.90 +1.40 (+0.27%)






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 Tim W. Wood

THE DOW REPORT
Non-Confirmations Continue

Over the last several weeks we have been watching a few of the non-confirmations that have developed. Non-confirmations can be corrected, in which case the two averages will get “in gear” together and the previous trend is then reconfirmed. But, when these non-confirmations continue, the averages are shouting “be careful.”

For the benefit of newer readers and as a review, we have two non-confirmations between the Industrials and the Transports shown on the longer-term chart below. One is a Primary non-confirmation and the other is a Secondary non-confirmation. The Primary non-confirmation is shown in green and the Secondary is shown in blue.



The next non-confirmation that we have been watching has nothing to do with Dow theory. However, I have found this to be an interesting and noteworthy relationship to monitor. Below we have a chart of the Industrials in the upper window and the Retail Holders in the lower window. The non-confirmations that have occurred at market tops since 2004 are marked in blue. The most recent non-confirmation that we have been watching occurred when the Industrials moved above their summer highs, but the Retailers lagged in spite of the fact that we have just finished the Christmas shopping season. In fact, we are now seeing the Retailers begin to break down. Note that the Retailers have now violated their early December lows. This break is marked in red. The fact that the Industrials have not also violated their corresponding December low, this “break” is not yet actually confirmed, but will be if the Industrials follow suit.



more...

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

[ozymandius]

2. Today's Reports

10:00 AM Construction Spending Nov
Briefing Forecast 0.2%
Market Expects 0.5%
Prior 0.7%

10:00 AM ISM Index Dec
Briefing Forecast 57.5
Market Expects 57.0
Prior 58.1

2:00 PM FOMC Minutes Dec 13

[UpInArms]

30. 10:00 Reports in --- WHOOPSIE!

10:02am 01/03/06 U.S. DEC. ISM PRICES 63.0% VS 74.0% IN NOV.

10:01am 01/03/06 U.S. DEC. ISM NEW ORDERS 55.5% VS 59.8% IN NOV.

10:02am 01/03/06 U.S. DEC. ISM JOB INDEX 52.7% VS 56.6% IN NOV.

10:00am 01/03/06 U.S. DEC. ISM MANUFACTURING INDEX BELOW 57.6% CONSENSUS

10:00am 01/03/06 U.S. DEC. ISM MANUFACTURING INDEX 54.2% VS 58.1% IN NOV.

10:00am 01/03/06 U.S. NOV. RESIDENTIAL CONSTRUCTION SPENDING FLAT

10:00am 01/03/06 U.S. NOV. PUBLIC CONSTRUCTION OUTLAYS RISE 0.3%

10:00am 01/03/06 U.S. NOV. PRIVATE-SECTOR CONSTRUCTION OUTLAYS RISE 0.2%

10:00am 01/03/06 U.S. NOV. CONSTRUCTION SPENDING RISES 0.2% VS. 1% EXPECTED

http://www.marketwatch.com/news/story.asp?guid=%7B2E46684A%2DB9AF%2D46CF%2D9798%2D70B483EF1794%7D&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - Outlays on U.S. construction projects increased 0.2% in November, the smallest gain since June, the Commerce Department estimated Tuesday.

Spending on private nonresidential projects paced the gains, increasing 0.6%. Private residential spending was unchanged, the weakest since June. Spending by the public sector increased 0.3%.

The figures are seasonally adjusted, but are not adjusted for price changes. The monthly data are subject to large sampling errors and other statistical distortions.

The 0.2% increase in total construction spending was weaker than the 1% gain expected by economists surveyed by MarketWatch.

...more...

[UpInArms]

31. U.S. Dec. ISM manufacturing index 54.2% vs 58.1% in Nov.

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38720.4198092708-856093349&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- Factory activity in the United States decelerated in December, the Institute for Supply Management reported Tuesday. The ISM index fell to 54.2% in December from 58.1% in November. The decline was larger than expected. The consensus forecast of estimates collected by Marketwatch was for the index to slip to 57.6%. Readings above 50 indicate expansion. New orders fell to 55.5% in December from 59.8% in November. The employment index fell to 52.7% from 56.6%. The price index fell to 63.0% from 74.0%.

[UpInArms]

36. ISM factory index down in Dec.

http://www.marketwatch.com/news/story.asp?guid=%7B566EB642%2D07FD%2D4E59%2DB631%2D9C6FCB6C60E2%7D&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- Factory activity in the United States decelerated in December after strong showings in the past three months, the Institute for Supply Management reported Tuesday.

The ISM index fell to 54.2% in December from 58.1% in November.

The decline was larger than expected. The consensus of estimates collected by MarketWatch called for a modest decline in the index to 57.6 in December. See Economic Calendar.

Norbert J. Ore, chair of the ISM manufacturing business survey committee, said the decline was natural after three strong months and that the factory sector has significant momentum going into 2006.

In December, most of the major sub-indexes declined.

...more...

[UpInArms]

58. Fed in Dec. sought to signal rate cycle near end

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-03T190105Z_01_TRT000084_RTRIDST_0_ECONOMY-FED-URGENT.XML

WASHINGTON, Jan 3 (Reuters) - U.S. Federal Reserve policy-makers in December aimed to signal that a 1-1/2 year rate rise campaign was likely near its end, minutes of the central bank's mid-month meeting released on Tuesday showed.

The Fed raised the benchmark federal funds overnight lending rate by a quarter-percentage point to 4.25 percent at its Dec. 13 meeting, the 13th straight gathering at which it nudged credit costs higher.

In a post-meeting statement that day, Fed officials said "some further measured policy firming" was likely.

The minutes of the meeting showed officials believed that language would suggest to financial markets that only a few more rates hikes would likely follow.

"Although future action would depend on the incoming data, this characterization of the outlook for policy was seen by most members as indicating that, given the information now in hand, the number of additional firming steps required probably would not be large," the minutes said.

[ozymandius]

3. Bailing out near the end

NEW YORK (CNNMoney.com) - Stocks slumped Friday morning, the last trading session of the year, as investors kept an eye on the yield curve and cashed out of a number of recent market winners.

The Dow Jones industrial average (down 11.44 to 10,784.82, Charts), the S&P 500 (down 4.04 to 1,250.38, Charts) index and the Nasdaq composite (down 9.62 to 2,208.54, Charts) all retreated in the early going.

Equities slipped Thursday in a late-day selloff, with investors consolidating at the end of a choppy year. That consolidation continued Friday morning.

Stock declines were broad based, with 28 out of 30 Dow issues falling at the open Friday.

more...

http://money.cnn.com/2005/12/30/markets/markets_nyopen/?cnn=yes

[ozymandius]

4. Natural Gas Prices Decline

SINGAPORE - Natural gas prices dropped Tuesday, seemingly unaffected by a pricing dispute between Russia's Gazprom and Ukraine that threatened European gas supplies, though the Russian monopoly has promised to maintain deliveries.

Natural gas was down 46.5 cents to $10.76 on the New York Mercantile Exchange in Asian electronic trading, early afternoon in Singapore.

One analyst said Russian state-controlled OAO Gazprom's efforts to restore gas flow had helped ease upward pressure on prices.

"The price that Gazprom wants is more or less the price today, it's just that all the former Soviet surrogate states have been receiving reduced prices over the years," said Victor Shum, a Singapore-based analyst at energy consultants Purvin & Gertz. "So that's why in the interim, you don't see too much price movement."

more...

[UpInArms]

34. Feb Crude @ $61.90 bbl - Feb NatGas @ $10.84 mln btus

10:10am 01/03/06 FEB CRUDE CLIMBS 86C, OR 1.4%, TO $61.90/BRL IN EARLY TRADE

10:10am 01/03/06 FEB NATURAL GAS DROPS 3.4% TO 4-MO LOW OF $10.84/MLN BTUS

[ozymandius]

5. U.S. stock futures jump, Fed minutes eyed

LONDON, Jan 3 (Reuters) - U.S. stock futures jumped on Tuesday, indicating an opening rise on Wall Street, as the dollar fell on expectations of an early end to the Federal Reserve's rate-hiking cycle ahead of Fed minutes later.

-cut-

U.S. energy stocks could also climb, with February light crude up 0.3 percent at $61.23 a barrel.

-cut-

"There is a feeling that sentiment (in the Fed minutes) will change almost to dovish."

Fed minutes from its Dec. 13 meeting are due at 1900 GMT, with any adjustment set to suggest that a peak in rates is close ahead of Ben Bernanke's arrival as Fed chairman.

more...

[54anickel]

7. Holy cripes, look at those futures climb! Dow 73, S&P 7, NAS 9!!!

Just because the Fed might turn "dovish"? Meanwhile there are all those "not so hot" reports looming for the week.

A bully new year?
Stock futures suggest strong start to 2006 as investors look ahead to busy week for econ readings.

snip>

The first economic report of the week is due at 10 a.m. ET when the Institute of Supply Management's releases its take on growth in manufacturing. Economists surveyed by Briefing.com forecast that the closely watched ISM index slipped to 57 for December from 58.1 reading in November. But any reading above 50 indicates continued growth in the sector.

snip>

At 2 p.m. ET comes the minutes of the December meeting of the Federal Reserve's Open Market Meeting, when policy makers at the central bank signaled they may be getting close to ending their series of interest rate hikes. Investors and economists are both in agreement that at least one more quarter-percentage point rate hike is likely at the Jan. 30 meeting, but they'll be looking to the minutes for clues as to whether the Fed will keep hiking rates past that meeting.

On Wednesday comes the reports on December auto sales, closing out what was a disastrous year for General Motors (Research) and Ford Motor (Research), the nation's two largest automakers.

Thursday, major retail chains report their sales for the all-important holiday shopping period. No. 1 retailer Wal-Mart Stores (Research) has already warned that its sales will be at the low end of its forecast range.

Friday brings the closely watched December employment report.

more...

http://money.cnn.com/2006/01/03/markets/stockswatch/index.htm

[AnneD]

18. Morning Marketeers,

:donut: Happy New Year:party: :toast:
I think these reports will make for an interesting 1Q. I have been watching all the end of the year predictions on MSM and have been laughing my butt off.
I got a bit of happy news over the break. I belong to the Teachers Retirement System of Texas. I will be able to buy back my time and retire in 7 more years with full benefits. My final benefit will be based on my 3 highest salaries (they changed that to 5 this year but I was grandfathered in). I am thinking about switching in the last 3 years to a job over to a teaching hospital where I will get a higher salary. I really hate to leave the wee ones but I do have to think of my retirement benefits. Hubby also took advantage of a loophole and is buying some time in so he will be retiring at about the same time. What a blessing to be able to retire early. I have always wanted to start my own business and this will afford me the opportunity to do what I love to do when I want too.
Happy hunting and watch out for the bears.

[54anickel]

21. Morning AnneD and congrats! I hope everything works out as you

plan, an early retirement is indeed a blessing, especially under our current economic circumstances.
:toast:

[AnneD]

26. The best part is the defined benefit pension....

It is increasingly rare. I am glad that I had the foresight to appreciate the benefit when I was first hired and had some good advice from HR. I have changed jobs but have worked with the state in some form or fashion for that reason. I would not have a deferred compensation....what a shell game. I have a DC 403b on top of, but it has never done as well as I feel it should have and certainly not well enough to base a retirement on. Thanks 54anickle :hi:

[ozymandius]

37. Congratulations and Happy New Year to you too

What a ray of light to this story!

:hi:

Ozy

[AnneD]

47. Thank you Ozy...

my inner Eyore tends to view rays of light as oncoming moving vehicles though. You guys just rock. Your work does so much to inform and enlighten. Just by tuning in to this thread I have been able to not only make wiser choices, but feel better about the choices I make. I was up this year (better than the market)and the big difference has been this thread. Now THAT is the real ray of light.:grouphug:

[ozymandius]

19. Well, the markets are definitely sending a "buy" signal.

SUCKER, come hither

or something like that

[ozymandius]

6. Most overvalued housing markets

NEW YORK (CNNMoney.com) - Sixty-five of the nation's 299 biggest real estate markets are severely overpriced and subject to possible price corrections.

-cut-

The report named Naples, Florida as the most overvalued of all housing markets in the United States. A single-family, median-priced home there sells for $329,970, 84 percent more than what it should cost -- $180,956 -- according to the analysis.

National City arrives at its estimates of what the typical house in these markets should cost by examining the town's population densities, local interest rates, and income levels. It also factors in historical premiums and discounts for each area.

-cut-

Undervalued markets were College Station (-23 percent), El Paso (-18 percent), and Killeen (-16 percent), all in Texas. That state dominated the discounted markets list with nine of the 10 most undervalued housing markets. Montgomery, Alabama was No. 8 among the undervalued markets.

more...

[AnneD]

23. Our RE market....

was very slow to recover from the last RE bubble. We were hit really hard. I will clue you in...those three Texas towns have small economies and the big employer is the military (Ft Bliss and Ft Hood)so you are talking about a group of people that don't earn enough money and or live on the post. Most of Texas has recovered and we were starting to see increases, but the current slow down will put the breaks on the housing market here. We have a good gap between apartment rent and home notes, so there is not much incentive to leave the apartment just yet. I am betting on the 'froth' in our market to be shaken out shortly and am willing to wait up to 3 years before we make moves.

[wordpix2]

75. add overinflated Litchfield County, CT to crazy RE market. $325K buys you

a shack on a piece of poison ivy and rocks

[54anickel]

8. Real Estate Game Theory

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=50038

Market Top!?!?

Year-end stock market rally? Well, no. Not yet anyway. Perhaps it was the New York Transit strike and the traders were simply too wiped out to trade after they finished walking to work? There has to be some reason.

Alternatively, perhaps it’s simply that the market has topped out.

Perhaps, deficits really do matter when one considers the enormous government debt, moreover, the current account deficit which continues to break high ground and swelled to a percentage of GDP unprecedented in history.

snip>

Perhaps it’s a bubble bond market top ready for a serious correction as spreads diminish and there is just no darn good and safe place to put the nearly free money provided to them by Greenspan and the Japanese Central Bank. Heck, the Hedge Funds are over being about a safe place. It’s damn the torpedoes, and full speed ahead into Risk. After all it is merely other people’s money. Like pension funds. Too big to fail? They may let the pensions go south. But, Citibank will be saved. Heck they own 6.7% of Fannie Mae.

We heard a good one on interest rates recently. The Japanese Central Bank indicated it might raise rates after virtually being at 0% for years. The nerve!!! The Prime Minister immediately and publicly reprimanded them. Don’t even think about it. He also indicated that perhaps (because it’s a market top?) the Government might rework the Central Bank’s charter, and they wouldn’t be allowed to set monetary policy anymore. That was a big deal, not widely reported, because the investing public shouldn’t know about everything. They might get smart. We wonder who on our side of the Pacific Ocean called the Japanese Prime Minister and said, stop ‘em from raising interest rates, or shut ‘em down? Would such a call be possible, well yes, particularly if it’s a market top.

more...

[54anickel]

9. The Wisdom of Wall St.? Sometimes It's Wrong

A new way of saying, "it's different this time". Sure does make one wonder how "conventional wisdom" has been so wrong under Bushco....:shrug:

http://www.nytimes.com/2006/01/03/business/03stox.html?pagewanted=1&adxnnl=1&adxnnlx=1136293370-qtmyGEmzjGhlAeLu3fcXng

As 2006 begins, the great American housing boom is going to weaken, if not collapse. But that will not hurt the economy very much, and growth will continue at a good pace.
Or so goes the conventional wisdom.

Mortgage applications are down, and surely home sales will follow. Homes in many markets are far less affordable than they were a few years ago. There is a lively argument as to whether prices will fall sharply in some markets or simply level off for a few years, but another record year for the housing industry seems out of the question.

Sometimes, conventional wisdom proves correct, and a year from now that may be exactly what has occurred. But lately Wall Street's consensus forecast has seemed more likely to miss than to hit, a fact that investors may want to take into account before they sell their homes and await the bargains that will inevitably follow in the great housing bust.

A year ago, the one verity in market commentary was that the decline of the dollar was real and was going to continue. The United States was running a huge and unsustainable trade deficit, and the dollar's 2004 decline was likely to accelerate.

So what happened? China did grudgingly allow a small devaluation of the dollar against the Chinese currency, albeit one so small that it made no difference at all. But the dollar rallied against the other major currencies. It ended 2005 up 14 percent against the euro and up 15 percent against the Japanese yen.

more....

Interesting graphics linked to the article - The 2005 Numbers and A Bumpy Year
Both are rather large.....

[54anickel]

10. Risks Ahead as Policies (and Money) Tighten in '06

http://www.nytimes.com/2006/01/03/business/worldbusiness/03global.html

FRANKFURT, Jan. 2 - This is the year that the world's major economies will have learn to live without easy money.

The Federal Reserve has already significantly tightened monetary policy in the United States. The European Central Bank raised interest rates last month for the first time since 2000, and will probably lift them again. And after nearly five years of zero percent interest rates, the Bank of Japan is expected to embark on a cautious tightening of policy - not necessarily by lifting rates, but by cutting back on its purchase of government bonds from Japanese banks, which pumps yen into the market.

These moves will have far-reaching consequences for the world economy, as well as for financial markets. Economic activity in the United States, Europe and Asia has been lubricated by loose credit since 2001, when the collapse of technology stocks led to an easing of monetary policy.

Removing this stimulus without choking off growth in Europe and Japan or taking the wind out of the housing market in the United States will be an exceedingly delicate, if not risky, task.

"This is a high-wire act," said Thomas Mayer, the chief European economist at Deutsche Bank in London. "The global economy has been propped up by huge liquidity. The question is, How do you take this liquidity out of the economy without the whole thing crashing down?"

more...

[54anickel]

11. States Take Lead in Push to Raise Minimum Wages

http://www.nytimes.com/2006/01/02/national/02wage.html?pagewanted=1

Despite Congressional refusal for almost a decade to raise the federal minimum wage, nearly half of the civilian labor force lives in states where the pay is higher than the rate set by the federal government.

Seventeen states and the District of Columbia have acted on their own to set minimum wages that exceed the $5.15 an hour rate set by the federal government, and this year lawmakers in dozens of the remaining states will debate raising the minimum wage. Some states that already have a higher minimum wage than the federal rate will be debating further increases and adjustments for inflation.

The last time the federal minimum wage was raised was in 1997 - when it was increased from $4.75 an hour. Since then, efforts in Congress to increase the amount have been stymied largely by Republican lawmakers and business groups who argued that a higher minimum wage would drive away jobs.

Thwarted by Congress, labor unions and community groups have increasingly focused their efforts at raising the minimum wage on the states, where the issue has received more attention than in Republican-dominated Washington, said Bill Samuel, the legislative director of the national A.F.L.-C.I.O.

Opinion polls show wide public support for an increase in the federal minimum wage, which falls far short of the income needed to place a family at the federal poverty level. Even the chairman of Wal-Mart has endorsed an increase, saying that a worker earning the minimum wage cannot afford to shop at his stores.

more...

[54anickel]

12. 2005 Wrap-Up:

At the end of last weeks Credit Bubble Bulletin
http://www.prudentbear.com/creditbubblebulletin.asp

2005 Wrap-Up:

The Dow ended the year down 0.6%, with the S&P500 up 3.0%. Ten-year Treasury yields rose only 14 basis points over the past year, with benchmark 30-year mortgage rates up about 40 basis points. U.S. and global growth was solid - not too hot, not too cold. Core inflation was sanguine. It is, then, tempting to view the year as relatively uneventful and benign. It was anything but.

The story of 2005 is one of an unrelenting and expansive U.S.-based Credit Bubble and the Prolific Global Liquidity Glut. The inflationary benefits to the U.S. economy and markets notably waned, especially relative to others. Coming into the year, a dollar crisis and/or spike in U.S. market yields appeared leading candidates to finally force a reining in of excesses and the commencement of long-overdue adjustment. The global leveraged speculating community seemed poised to disappoint. There was palpable vulnerability with respect to the Mortgage Finance Bubble. But financial crisis was not in the cards, not with the Fed’s pre-ordained interest rates and a financial sector determined to expand U.S. Credit at unprecedented levels. At the same time, global central bankers remained acquiescent to rampant asset inflation and leveraged speculation, and very much still content to balloon their balance sheets with American securities.

Rather than one of tightening financial conditions and the risk of dislocation, the financial backdrop developed into only greater – manifestly unprecedented - accommodation. The emboldened and now firmly Global Wall Street Finance Liquidity Machine was left to its own devices, and the results were spectacular. Unparalleled global Credit inflation provided a powerful allure of easy profits for speculators, dealmakers, lenders, investors and businesses the world over. Credit and speculative excess ran to new extremes and enveloped markets across the globe.

snip>

Yet nowhere is the Global Liquidity Glut more conspicuous than with this year’s global equities performance. Leading European equity indices enjoyed a stellar year. The major UK index (FTSE100) was up 16.7%, Germany (DAX) 27.1%, France (CAC40) 23.4%, Switzerland (Swiss Mkt) 33.2%, Spain (IBEX35) 18.2%, Italy (Milan MIB30) 13.3%, Netherlands 25.5%, Portugal (PSI) 17.2%, Ireland 18.8%, Sweden (OMX 30) 29.4%, Norway (OBX Stock) 35.5%, Finland (OMX Helsinki) 31.1%, Denmark (Copenhagen 20) 37.3%, Belgium (BEL20) 21.0%, Luxembourg 26.7%, and Iceland (ICEX15) 64.7%.

snip>

U.S. equities badly lagged the global boom. Our stocks clearly suffered from the heated competition from scores of hot asset markets overseas. Moreover, the U.S. services-based economy is relatively underexposed to companies and industries benefiting from the world-wide inflationary boom in energy and commodities. At the same time, we have some key industries – autos and airlines, to name two – that are on the losing end of newfound inflationary manifestations. The enormous American mortgage-lending and banking super-industries are also losing relative appeal in the unfolding environment. Additionally, U.S. equity valuations increasingly suffer from the nature of intransigent Credit Bubble financial excess. Not only does it today require higher interest-rates to impose necessary financial conditions tightening, Credit and asset Bubbles must inevitably pop. U.S. stocks may appear cheap relative to ballooning earnings, but certainly not on a risk-adjusted basis.

more...

[54anickel]

13. The Many Faces Of Liquidity

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

I Really Wanna Care. I Wanna Feel Somethin’. Let Me Dig A Little Deeper. Nope, Nothin’. My Give A Damn’s Busted…If there’s one issue that probably all market participants, whether bull or bear, can agree upon, it's that the global economy and financial markets have been very big beneficiaries of significant liquidity creation since the turn of the millennium at the very least. As we look back over the events of 2005 and ponder just how the financial markets seem to have so easily shook off the real world implications of crude above $60, natural gas prices in double digits, the economic ramifications of the destruction left in the paths of Katrina and Rita, the almost out of nowhere bankruptcy of one of the largest futures trading outfits in the country, and what appears to be the all but impending financial implosion of the US auto industry, we can only come up with one answer as to why - market participant perceptions of liquidity. We thought we’d kick off 2006 with a bit of varied look at the many faces of liquidity. After all, we believe it’s undeniable that the greater force of liquidity will continue to exert an important influence on the markets in 2006, as it has really in a very meaningful manner since the equity market lows of late 2002/early 2003. Is there really going to be any hard driving conclusion to this discussion? Not really. What we hope is important is to get a feel for the character of what we’re dealing with in terms of how liquidity conditions can shape economic and financial market outcomes, as well as try to develop a sense of what to watch for in terms of ultimate change in the nature of global liquidity somewhere ahead. After all, as Ray DeVoe opined many years ago, in the endgame "liquidity is a coward, there's always too much when it's least needed and it's nowhere to be found when needed the most".

It also seems a bit fitting to have a quick look at the greater concept of liquidity now that we’re a month away from Bernanke assuming the position of grand poobah at the Fed. As you know, Bernanke is the academician who appears convinced that the Holy Grail of real world financial and economic cycle longevity is the L word itself – liquidity. And more of it, baby. In the much broader sense, we’re convinced that the financial markets have very importantly convinced themselves over the past few years that liquidity, per se, will always and everywhere be available and will always and everywhere be low cost. In fact, from a longer-term contrarian standpoint, this is probably the most widespread and most important consensus viewpoint in the financial markets of the moment. A viewpoint that we believe will ultimately be shattered. But as always, the question is when and how? As you’d imagine, we only wish we had the answers to those questions, as does everyone else. Very quickly, we do have two guesses as to when and how. We believe the “shattering”, so to speak, will occur when market expectations regarding the significant influence of monetary inflation change. For now, those expectations are completely benign; soothed by heavily massaged government statistics that make current CPI numbers a good bit incomparable with data from prior periods. We believe gold is hinting directly at this issue, but it's only the few that are listening for now. Secondly, we expect the shattering to at some point be accompanied by the conceptual realization that ongoing liquidity expansion equals credit expansion. Liquidity equals debt. As hard as it may seem to comprehend, we’re not sure that has completely sunk in to both the domestic and global financial markets in the true sense. We’re still living in the period where excess liquidity is a rush to the brain, a new high, if you will. We’ve just needed more and more of it in the current cycle to continue the endorphin release or modification of the brain synapse messaging function. For now, it appears to us that the markets have convinced themselves they have an infinitely renewable prescription courtesy of the monetary physicians at the Fed. And this is how we enter 2006.

One of the most important aspects of excess liquidity is its influence on how we as a greater investment community and global economy perceive risk. Or more correctly, how those perceptions influence the "price" of risk in a multiplicity of asset values. For example, in the world of the moment, we are seeing cap rates (very simply rental cash flow relative to market values) on real estate of all types, commercial and residential, literally at the lows of our careers. We’ve never seen anything like it. It’s as if real estate investors are implicitly assuming vacancy rates will trend toward zero in short order and rent prices will exceed the general rate of inflation for many moons to come with complicit tenants absolutely more than happy to pay ever higher rental prices. In our eyes, what global excess liquidity generation of the recent past has done is to distort the traditional concept of market risk across the broad spectrum of investment assets. And when you get right down to the very heart and soul of it, what is the very reason for being of an efficient public/global financial marketplace other than to correctly price in investment risk? Isn’t this the very basis for the efficient market hypothesis? If not, then you can throw Bill Sharpe’s capital asset pricing model in the nearest trashcan. From our vantage point, what the Fed and their global central bank compardes have done over the last half decade at least is to create a financial market, and in part real economy, whose traditional and very important sense of “give a damn” is busted.

And we suggest this lack of “give a damn” has only heightened over the last three years. It’s not just seen in real estate cap rates; we can see it very simply and directly in generic fixed income risk premiums. Have a quick look at the following chart.



We already know that in the world of today, yield spreads between many classes of fixed income assets and risk free yields, that are supposedly exemplified by US Treasuries, are tight. Very tight. A highly levered fixed income market, a low overall rate of return environment, and the significant growth of the hedge fund community since 9/11 are key rationales as to why at the moment. Above is a look at the relationship between the Moody's Baa yield and the 10 year UST yield. In the immediate post 9/11 financial marketplace, yield spreads widened meaningfully over a short number of months, prior to a subsequent bit of spread reversion on the back of a Fed that acted to open the flood gates of monetary accommodation in a split second. We already know that at the market lows of late 2002-early 2003, many a yield spread hit their apex in what was a market pricing in meaningful real world investment risk. But the Fed and Administration really swung into action in 2003 and brought the definition of accommodation to a whole new level. Being quick learners, market participants from that point forward finally figured out that anything deleterious to the US economy for even a brief period would be accommodated away by the Fed and Administration. Hence, yield spreads collapsed from late 2002 straight through to the present. Moreover, and as you can see, financial market participants in 2005 have clearly learned to simply not "give a damn" in the wake events such as the significant GM and Ford financial deterioration (or the realization of just how big the problems really are), accounting scandals at FRE and FNM, Katrina, Rita and REFCO, as well a meaningful upward change in the commodity and energy markets . Lesson well learned about the Fed and liquidity? It sure looks that way. For now, in the wake of what should have been eye-opening and market moving events in 2005, the risk premium being assigned in the example above is virtually non-existent. It just confirms our thought that the markets are more than knee-deep in discounting the characteristics of modern day liquidity (continual availability and cheap cost) well into the future, more so than perhaps at any time in the current cycle. As we said above, this is how we enter 2006.

more...

[UpInArms]

62. "credit bubble"

http://today.reuters.com/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-01-03T184036Z_01_N03180609_RTRIDST_0_COLUMN-PROFILE-SCHEDULED-WEEKLY-COLUMN-PICTURE.XML

excerpt:

The head of the $411 million Prudent Bear Fund <BEARX.O> raised eyebrows in 1999 when he was among the first to suspect accounting fraud at Tyco International Inc. <TYC.N>, then a darling on Wall Street.

<snip>

Tice, 51, cemented his reputation in the small club of short sellers by calling Tyco's accounting into question when all 26 Wall Street analysts following the manufacturing conglomerate had a "buy" recommendation on the stock.

<snip>

Tice, who moved his firm from Dallas to the Virgin Islands a few years ago, now sees trouble ahead for the U.S. housing market. This in turn poses the risk of a long-term bear market for equities, he believes.

<snip>

His bearish views on the housing market investing are rooted in the notion that the Federal Reserve has left the economy too dependent on easy financing, which has led to a "credit bubble."

"We place great fault on our Federal Reserve system for being a perpetrator of this bubble," Tice said. "If you continue to goose the economy with more debt, more debt, it's almost like keeping your 8-year-old on a sugar high."

...more...

[54anickel]

72. Shorting Fannie and GM, sounds reasonable to me if you're gonna

short something, which I've always considered way to risky to begin with. But hey, just about everything out there these days seems risky.

[UpInArms]

14. daily dollar watch

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

Last trade 90.87 Change -0.20 (-0.22%)

Dollar to recoil in 2006 as rate hikes stop: analysts

http://www.dailytimes.com.pk/default.asp?page=2006%5C01%5C03%5Cstory_3-1-2006_pg5_24

LONDON: The dollar, after climbing about 13-14 percent against the euro and the yen in 2005, can expect a weaker run in 2006 when analysts see the US Federal Reserve easing the pace of interest rate hikes.

Higher US borrowing costs in 2005 handed the euro its first annual loss against the dollar in four years. The euro on Friday was trading here at 1.1839 dollars while the dollar was at 117.88 yen.

At the start of the year the single European currency was trading close to an all-time high of 1.36 dollars, while the dollar languishing around 104 yen.

But in the closing days of 2005, some economists were forecasting tougher times ahead for the greenback.

“It is our strong belief that the dollar rally is gradually coming to an end and that we will eventually see renewed dollar weakness in 2006,” Standard Chartered economist Callum Henderson said.

...more...

Currency big three caught off guard by dollar's march in 2005

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/01/02/cndoll02.xml&menuId=242&sSheet=/money/2006/01/02/ixcitytop.html

Citigroup, Deutsche Bank, and UBS, the three giants of global currency trading, were all wildly wrong about the foreign exchange markets in 2005, predicting a dollar slide as America's chickens came home to roost after years of borrow and spend.

Undaunted, the trio insist they were just early, not wrong, awaiting vindication this year.

None of them is yet willing to call the top of the dollar's rally, anticipating further resilience in the first quarter of 2006.

But all predict a dire second half for the greenback. Citigroup expects a fall to $1.36 against the euro by the end of the year, with $1.30 for UBS, and $1.27 for Deutsche Bank.

...more...

Dollar Drops; Fed May Stop Lifting Rates in 2006 as ECB Raises

http://www.bloomberg.com/apps/news?pid=10000103&sid=a2Cvuz1knnK8&refer=us

Jan. 3 (Bloomberg) -- The dollar declined on speculation the Federal Reserve will stop raising interest rates this year as the European Central Bank adds to December's first increase since 2000.

Higher rates in Europe would help narrow the yield gap with the U.S. that helped push the dollar up 14 percent versus the euro last year. The Fed issues minutes today for a Dec. 13 meeting at which it stopped saying rates were at a level that would stimulate growth, suggesting it may halt further increases.

``We are looking forward to the weaker U.S. dollar over the course of 2006,'' said Stephen Halmarick, co-head of economic and market analysis in Sydney at Citigroup Global Markets Australia Ltd. After one more Fed rate increase ``that's probably going to be the peak of the U.S. interest rates this year.''

...more...

[UpInArms]

35. Weaker dollar extends decline to lows of the day

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38720.4277606366-856093920&siteID=mktw&scid=0&doctype=806&

CHICAGO (MarketWatch) -- The U.S. dollar fell to the lows of the day after a U.S. report on the manufacturing sector showed a slower rate of expansion in December, including for a key measure on prices. The euro was last changing hands at $1.1947 compared to $1.1870 ahead of the report. It's up 0.9% on the day. The dollar stood at 116.83 yen, down from 117.49 ahead of the report, and down 0.7% from late Friday.

Last trade 90.52 Change -0.55 (-0.60%)

Open 90.72 Previous Close 91.07

High 90.94 Low 90.51

2006-01-03 09:49:27, 30 min delay

[UpInArms]

57. Dollar extends decline on Fed meeting minutes

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38720.5940572917-856109111&siteID=mktw&scid=0&doctype=806&

CHICAGO (MarketWatch) -- An already weaker dollar fell after the release of what many currency market participants called dovish Federal Reserve meeting minutes. The report could be a signal that dollar-boosting rate hikes in the United States are nearing an end. A majority of members said the outlook for policy at the moment was "the number of additional firming steps required probably would not be large." Fed officials did agree that decisions going forward would depend more on incoming economic data. The euro improved to $1.2002 after the report, up from $1.1980 ahead of the release. The euro is up a sharp 1.4% on the day. The dollar stood at 116.24 yen vs. 116.41 yen before the report. Dollar-yen is down 1.2% from Friday.

Last trade 89.95 Change -1.12 (-1.23%)

Open 90.72 Previous Close 91.07

High 90.94 Low 89.94

2006-01-03 14:02:26, 30 min delay

[UpInArms]

70. dollar is definitely in dumpster dive mode

Last trade 89.78 Change -1.29 (-1.42%)

Open 90.72 Previous Close 91.07

High 90.94 Low 89.75

2006-01-03 15:28:48, 30 min delay

[UpInArms]

15. Bonds: A leading forecaster warns about Treasury yields

http://www.iht.com/articles/2006/01/01/news/bxbond.php#

NEW YORK The U.S. bond market's most accurate forecaster, who plies his trade a long way from Wall Street, says yields are sending ominous signs about the economy.

While economists at the biggest bond-trading firms wrongly predicted that the benchmark U.S. 10-year Treasury yield would end last year at 5 percent, this forecaster, a professor at the University of North Carolina, came a lot closer to getting it right.

<snip>

Beyond 2006, Smith said, the bond market is waving a caution flag on the economy. Two-year Treasury yields last week rose above those on 10-year notes, creating an inverted curve for the first time since December 2000. Such an inversion preceded the last four U.S. recessions.

"When the curve inverts, run for the exits," said Smith, who served as an economist for the Fed from 1975 to 1977. "It will stay that way until the Fed realizes it caused a recession in 2007. Investors should start planning for a recession."

...more...

[UpInArms]

22. Treasurys ease, yield curve flat ahead of Fed

http://www.marketwatch.com/news/story.asp?guid=%7B2CDF224C%2DC214%2D4F97%2D89A8%2D15692B4CA989%7D&symbol=&siteid=mktw

CHICAGO (MarketWatch) - The Treasury market began the new year on the defensive Tuesday ahead of a manufacturing report expected to show another month of expansion and the release of Federal Reserve meeting minutes that may provide more details on the scope for interest rates in 2006.

In morning trading, the benchmark 10-year Treasury note is down 7/32 at 100 21/32. That shaves not quite $2.50 per each $1,000 worth of securities.

The drop in price pushed its yield ($TNX), a reference for mortgage and corporate borrowing, up to 4.42% compared to 4.39% Friday.

The 2-year note was unchanged at 99 30/32, also yielding 4.42%.

The 2-year to 10-year portion of the yield curve inverted last week for the first time since 2000. The accuracy of the yield curve this time in foretelling economic downturn continues to be debated.

"While the curve has moved to flat as a pancake to a bit inverted and yields open the year near 4.38%, we are not excited about further inversion just yet," said David Ader, fixed-income market strategist at RBS Greenwich Capital.

...more...

[UpInArms]

25. Printing Press Report:Fed adds reserves via overnight system repurchases

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-03T143550Z_01_N03344064_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, Jan 3 (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 fed funds rate last traded at 4.313 percent, above the Fed's current 4.25 percent target for the overnight lending rate.

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

[54anickel]

44. 13.25 BILLION!?!?! And above the Fed's target? What's it mean?

Bit of a liquidity crunch to start the year? :shrug:

[UpInArms]

49. M3 Money Stock Chart for past 5 yrs

[Roland99]

74. What did it look like in, say, the 10 years before?

[UpInArms]

76. here's your long-term chart on that

it was leveling off until the GOP took over Congress and really took off under dimson :eyes:

[Roland99]

78. Started rising like mad at the start of the dot-com boom

I guess to help fund all those VCs?

[UpInArms]

81. Was it the Washed-Up Has-Been Partisan Hack's "irrational exuberance"?

:shrug:

[UpInArms]

48. Printing Press Report: U.S. to sell $8 bln bills 4-wk bills on Wednesday

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-03T160058Z_01_WBT004480_RTRIDST_0_ECONOMY-BILLS-ANNOUNCEMENT-URGENT.XML

WASHINGTON, Jan 3 (Reuters) - The U.S. Treasury Department on Tuesday said it will sell $8 billion four-week bills on Wednesday, Jan. 4.

The four-week bills will be issued on Jan. 5.

The bills mature on Feb. 2. Treasury said the net long position reporting threshold is $2.8 billion.

Noncompetitive bids must be received before noon EST (1700 GMT) and competitive bids by 1:00 p.m. EST (1800 GMT) on the auction day.

...more...

[UpInArms]

51. U.S. Treasuries jump after surprisingly weak ISM

http://today.reuters.com/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-01-03T170731Z_01_N03391639_RTRIDST_0_MARKETS-BONDS-UPDATE-1.XML

CHICAGO, Jan 3 (Reuters) - U.S. Treasury debt prices reversed early weakness on Tuesday to trade higher after a closely watched measure of U.S. factory activity fell unexpectedly to a four-month low.

The Institute for Supply Management's factory index dropped to 54.2 in December from 58.1 in November and was below Wall Street's median estimate of 57.5. A reading above 50 still shows expansion.

The result was a surprise after regional indicators had shown faster growth, and stirred fears that a combination of rising interest rates and high energy prices could cool off the U.S. economy faster than expected.

"We can't see any good reason why this should mark the start of a sustained softening in the ISM, but another softish report next month would be worrying," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

...more...

[UpInArms]

61. Treasuries rally as Fed minutes vindicate bulls

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-03T191324Z_01_N03302307_RTRIDST_0_MARKETS-BONDS-MINUTES-URGENT.XML

NEW YORK, Jan 3 (Reuters) - U.S. Treasury debt prices climbed further on Tuesday after minutes from the Federal Reserve's December meeting suggested the central bank was almost done raising interest rates.

The minutes showed most members of the Fed's policy-setting committee thought the number of further interest rate moves would not be large.

Coupled with a soft reading on a key manufacturing reported earlier, the news helped send benchmark 10-year notes 12/32 higher for a yield of 4.36 percent, down from 4.40 percent on Friday.

Two-year notes jumped sharply, and were 4/32 higher for a yield of 4.33 percent, down from 4.41 percent.

[54anickel]

16. Forces In Yield Curve Inversion (Willie)

http://www.321gold.com/editorials/willie/willie123005.html

The US Treasury yield curve has finally inverted. The actual point of inversion is the 5-year TNote, which at this moment is 4.31% versus the other barbell endpoints. The 2-yr and 10-yr TNote yields are near 4.36% and almost equal to each other. Remarkably, the entire maturity curve has come down in yields, as the long end and short end and belly have declined in the last month. A great debate has been sparked on its meaning. Initial debate is on calling the curve as "flat" and not "inverted" yet, nothing but a minimization of the unfavorable signal indicated. No single answer seems adequate. This holiday memorandum touches on a few key relevant points. To my surprise, the media has succeeded in putting before us several major issues toward the debate. The surprise owes to the competent coverage. Little has been overlooked, however, the denial of economic distress seems almost totally dismissed. The real economy is hurting, even as the bubblicious financial sector is showing fatigue. The debate will be covered more comprehensively in the January Hat Trick Letter.

FOMC RATE HIKE REACTION
Two weeks ago, the US Federal Reserve hiked the Fed Funds short-term interest rate target to 4.25%, up 25 basis points. Since that time, the bond market has seen fit to signal slower weaker economic activity, a slap in the USFed face, a contradiction to the "all is well" mantra promoted. The 10-year Treasury Note yield has fallen from the 4.5+% range to the 4.3+% range. Is Greenspan watching? Are USFed governors aware? Will these clown hack economists continue the tightening process? The futures market thinks YES. With each mindless rate hike comes another wet blanket atop the fragile USEconomy, hidden from view. While oldline pundits and professionals laud the USFed for its measured pace and prudent management, it is hard to conclude the monetary tightening which has taken us from 1.0% to 4.25% so far is anything but restrictive. Our financial sphere depends upon bond arbitrage, speculation, and spread trades so heavily. Our commerce centers require cheap credit, if not vendor financing. We all are taught of a significantly detrimental lagged effect from numerous rate hikes. Well, the time is here & now.

RATE-SENSITIVE COMMERCE
This is not the 1970 decade or the 1980 decade or the 1990 decade. Low interest rates power commerce throughout the system in a highly perverse fashion. In past decades, nowhere was 0% financing available to purchase an automobile, an expensive home entertainment system, a jacuzzi, large furniture items, or home improvement projects. Nowhere were ongoing assaults, nay bombardments, delivered in the daily mailbox for 0% credit card loans and low "life of loan" similar revolving credit loans. The explosion of home equity extractions, bill consolidation loans, and other sizeable borrowings depend on cheap money. That money is getting more costly. The USEconomy depends heavily upon it, more than so-called experts gauge.

FED VALUATION MODEL
Never expect Wall Street to regard signals as anything but positive, promising, optimistic, and bullish. These whore charlatan carnival barkers have never spotted a signal clear in its negative tone. They now point to lower long-term bond yields and the high valuations (price earnings ratios) they justify. Wow! So severe economic slowdown and correspondingly low long-term interest rates would be a good signal then, right? Well, we have strong robust vibrant Gross Domestic Product data to counter any hint of slowdown, right? Sure, if you accept the falsified GDP, permit price inflation to be labeled as growth via suppressed deflator series, and compound the error propagated in the chain weighting technique. This has been a theme repeated frequently, vigorously, loudly, and emphatically for the last few months. The United States economy is in a stall, fully masked by the housing boom, which itself is stalling.

snip>

What Wall Street and CNBC seems unwilling to acknowledge is that China and Japan have added to USTBond holdings almost nothing since May2005. We are fully capable to warn of dire times if Asia withdraws from our Treasury support. They have done just that in the last seven months. So has OPEC pulled back in Treasury support. This is hardly mentioned by our intrepid lapdog press & media, undoubtedly the worst and least competent in the Western world. In fact, the biggest recent TBond support comes from the Royal Bank of Canada, which is avidly trying to forestall a quick dangerous rise in the most powerful currency on earth, the CANADIAN DOLLAR. For four years, rampant USTBond monetization has been indirect in its path from USDollar creation. New money was hatched in big banks, hedge funds, and mortgage agencies. That money originated in its funding from Asia. Since the summertime, that money might be more directly funded by the US Federal Reserve in more secretive purchases, monetization which bypasses Asia, since they have halted direct subsidy support.

more...

[UpInArms]

24. Best Line:

These whore charlatan carnival barkers have never spotted a signal clear in its negative tone.

[AnneD]

39. Hey UIA,

seriously, I think they are holding back...how do they really feel.:spray: you need a spew alert. Say, want some popcorn, I think the fun is starting.....:popcorn:

[UpInArms]

52. here's an interesting chart

[UpInArms]

17. Pilgrim's Pride cuts outlook, 300 jobs

http://www.mlive.com/newsflash/business/index.ssf?/base/business-54/1136296458292410.xml&storylist=mibusiness

PITTSBURG, Texas (AP) — Pilgrim's Pride Corp., the second-largest poultry producer in the United States and Mexico, said Tuesday its first-quarter earnings will fall more than 50 percent short of its prior expectations.

The Pittsburg, Texas-based poultry producer also said it was withdrawing its earnings outlook for the full fiscal 2006 and will cut about 300 jobs at a Pennsylvania plant.

The company blamed worse-than-expected performance by its operations in Mexico and lower prices received on chicken leg quarters in its U.S. operations.

"We are extremely disappointed with the results realized this quarter by our Mexico operations," said O.B. Goolsby, Pilgrim's Pride president and chief executive officer, in a prepared statement.

Goolsby also blamed public fears over avian flu for reduced demand and "disruptions caused by having to reroute product in transit to locations other than those intended as these concerns materialized."

...more...

[ozymandius]

20. suckers came hither

9:34
Dow 10,757.52 +40.02 (+0.37%)
Nasdaq 2,215.93 +10.61 (+0.48%)
S&P 500 1,253.91 +5.62 (+0.45%)
10-Yr Bond 44.19 +0.24 (+0.55%)
NYSE Volume 78,335,000
Nasdaq Volume 83,456,000

[UpInArms]

28. 9:55 EST and heading for the exits

Dow 10,729.75 +12.25 (+0.11%)
Nasdaq 2,210.13 +4.81 (+0.22%)
S&P 500 1,251.72 +3.43 (+0.27%)
10-Yr Bond 4.417 +0.22 (+0.50%)

NYSE Volume 267,645,000
Nasdaq Volume 240,243,000

09:40 am : As futures trade had presaged, the equity market started 2006 well above the flat line. Following a lackluster end to the year, buyers dominate this morning - perhaps in hopes of inciting a Santa Claus rally during this year's first two sessions. There is little corporate news to dictate early action, and traders' focus rests upon the upcoming (2:00 ET) release of minutes from the FOMC's December 13 meeting. Both the stock and bond markets will attempt to glean further insight into just how far away the end of the Fed's tightening cycle is, and will scrutinize the minutes for indication of rate hikes beyond the two more that are widely expected. At the top of the hour, the session's first two economic items, November construction spending and the December ISM Index, are slated for release; economists expect respective reads of 0.7% and 57.5. On the corporate front, some items of note include Viacom's completion of the CBS spin-off, Walgreen's solid fiscal Q1 earnings report, and Piper Jaffray's upped price target (to $600) on Google (GOOG) shares. DJ30 +26.42 NASDAQ +6.56 SP500 +4.58

[54anickel]

27. Bush Says, Bring It On; The Critics Will

http://www.truthout.org/docs_2005/010206D.shtml

Up until a couple of weeks ago, George W. Bush's script to put the misery of 2005 behind him had seemed destined for a smooth rollout. Buoyed by the apparent success of the Iraqi elections, the President would score a quick confirmation victory with Supreme Court nominee Samuel Alito, follow it up with a soaring State of the Union address and then return to full campaign mode with a sweep around the country, talking about big issues like immigration and Medicare and throwing the spotlight on a resurgent economy. But the revelation that his Administration has been spying in this country without warrants-illegally, critics say-may have put a crimp in Bush's plan to climb back on top of the agenda as the new legislative session begins. "When Congress comes back," warns a top G.O.P. congressional aide, "domestic surveillance and privacy issues will be all over the front pages."

To which the President and his strategists seem to be saying, Bring it on. From practically the moment news of the domestic-surveillance program hit the front page of the New York Times, the White House decided its strategy would be to "overwhelm the skeptics, not back off, not change anything about the program and really home in very strongly on the fact that this is a legitimate part of presidential warmaking power," says an adviser. Bush launched a ferocious defense in his Dec. 17 weekly radio address, inviting in a network camera to capture the rare live delivery of the speech as he declared that the no-longer-secret surveillance program makes it "more likely that killers like these 9/11 hijackers will be identified and located in time." G.O.P. strategists argue that Democrats have little leeway to attack on the issue because it could make them look weak on national security and because some of their leaders were briefed about the the National Security Agency (NSA) no-warrant surveillance before it becae public knowledge. Some key Democrats even defend it. Says California's Jane Harman, ranking Democrat on the House Intelligence Committee: "I believe the program is essential to U.S. national security and that its disclosure has damaged critical intelligence capabilities."

But the NSA operation-and particularly Bush's decision to bypass the generally amenable Foreign Intelligence Surveillance Court for authorization-has drawn fire not only from liberal Democrats but also from some of the most conservative in Bush's party, in which government restraint is a fundamental precept. "There is a test of Republicans on this," says activist Grover Norquist, normally a White House ally. "The country will let you get away with this in the wake of 9/11, but that doesn't make it right." And even if Republicans are prepared to bless Bush's program, they know it theoretically would have to mean extending such sweeping Executive power to, say, a President Hillary Clinton.

snip>

The Alito nomination is not the only issue on which the Administration will have to confront the controversy. It will add to Bush's already difficult struggle to renew the most controversial provisions of the USA Patriot Act, which was passed after 9/11 and gave law enforcement broad new powers that have since unsettled some on both the left and the right. Congress last month disappointed the White House by giving the provisions only a five-week extension, setting a new expiration date of Feb. 3. And some kind of congressional investigation into the NSA spying program seems certain. Specter, for one, has promised hearings early in the year-a move, sources tell TIME, that the White House is hoping to head off by convincing the Senator to defer to the Intelligence Committee, whose hearings would be behind closed doors and classified. "They're going to lean on Specter very hard not to hold hearings," says a Republican official. Bush has warned that any public hearings on programs would simply tip off terroriss and invite them to adjust their tactics, and he says, "This is a war."

That's a theme Americans will hear again and again leading up to the State of the Union address, which officials say will position Bush as a "strong and decisive leader," prosecuting the war on terrorism as he reins in spending at home and spreads democracy around the world. "It's Bush as Churchill, Bush as Reagan and Goldwater and Bush as Woodrow Wilson," says a presidential adviser. But when civil liberties are involved, inviting historic comparisons can be a dangerous business. "This is an Administration," says Leahy, "that has tried to bypass courts and the legal procedures more than any since Richard Nixon."

more...

Anyone catch Timmy on Meet the Press this past weekend? I missed it but my Repuke B-i-L was raving about it. Guess they talked about how history will prove BeelzeBush correct. He asked which former president he would be most likely compared to, my answer was Hoover or Nixon. He said they claimed it would be Truman. :crazy: Wish I would have caught that program. My B-i-L is deaf - he must have misunderstood!

[54anickel]

40. Bwahaha, just caught what the B-i-L was talking about.

It's 30 and one-half minutes into the program and just a couple of minutes long. What a bunch of horseshit! It was regarding a Wm. Safire piece in the NYTimes based on one of his Office Pools. The choices were: Truman, Eisenhower, LBJ, Reagan or Clinton. :eyes:

http://video.msn.com/v/us/v.htm?f=00&t=m5&g=e10461f7-89e1-415c-aa58-80d1b6f8066e&p=angietest

[UpInArms]

29. Gold futures climbs as much as $8 to start the year

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38720.410118669-856092554&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- February gold climbed as much as $8 an ounce to trade at $527.50 -- its highest level in three weeks. The contract was last at $526.40, up $7.50. "There's a lot of upside left in the entire metals complex, and as some of the financial uncertainties become more clear as we head into 2006, gold is going to take the lead and achieve exceptional returns for traders who continue to focus on the long-term trends in these markets," said Dale Doelling, chief market technician at Trends In Commodities.

[54anickel]

32. Alas, the days of the Blue Light specials in gold are long gone. It's

beyond my reach these days. I see silver has become quite volatile again too. Look at the high low spread for the day, one big move on the chart. Looks like another hedge dump. :shrug:

Last trade 9.0537 Change +0.1437 (+1.61%)

Open 8.9100 Previous Close 8.91

High 9.0600 Low 7.9700

[54anickel]

45. Gold up for seventh straight day Metal adds as much as $11 to tap 3 week

high

http://www.marketwatch.com/news/story.asp?siteid=bigcharts&dist=news&guid=%7B8679FF41%2D34DB%2D4627%2D8B9C%2D310539AA8A79%7D

SAN FRANCISCO (MarketWatch) -- Gold futures climbed for a seventh session in a row Tuesday, tacking on as much as $11 an ounce to start the year at their highest level in three weeks.

Gold for February delivery climbed to a high of $530.40 an ounce on the New York Mercantile Exchange, level not seen since Dec. 13. The contract, which reached a nearly 25-year high of $543 on Dec. 12, was last up $11.40 at $530.30 an ounce.

March silver also added 25 cents to $9.14 an ounce after a $9.145 high, its highest level since Dec. 12.

"There's a lot of upside left in the entire metals complex," said Dale Doelling, chief market technician at Trends In Commodities. And "as some of the financial uncertainties become more clear as we head into 2006, gold is going to take the lead and achieve exceptional returns for traders who continue to focus on the long-term trends in these markets."

Indeed, the factors that drove gold up more than $80 an ounce in 2005 remain intact in 2006, said Peter Grandich, editor of The Grandich Letter. The foremost of these, physical and investment demand, shows no sign of cooling down.

more...

[OrangeCountyDemocrat]

56. Got Gold?

A little birdie told me it's going to be a Berry Berry Good 2006! :-)

Happy New Year to my fellow Democratic skeptics.

[Tempest]

63. Gold has been berry, berry good to me

I bought in at $272.30 four and a half years ago.

My retirement fund is looking more secure every day.

[54anickel]

33. Whistling Past Graveyards

http://www.kitco.com/ind/Schiff/dec282005.html

To their credit, Wall Street pundits have noted the proliferation of signs warning financial danger; to their peril most have chosen to ignore them. Four examples of such cognitive dissonance relate to General Motors, gold, pensions, and the housing bubble.

Shares of General Motors, once the world‘s largest company, the icon of America’s industrial might, at one time close to being declared a monopoly by a 1950's Congressional investigation, this week plunged to a new 80 year low. Years ago, my prediction that the company would ultimately face bankruptcy seemed radical. Today that assertion no longer seems so far-fetched. The truth is that GM sold too many gas guzzling SUV’s to too many people without making any profits, saturating its market and piling up debt and pension liabilities in the process. The fact that Wall Street can shrug-off the possibility of a General Motors bankruptcy is mind-boggling. It is not as if automobiles are buggy whips. How can the demise of this industry, once the envy of the world and the driving force behind Roosevelt’s “arsenal of democracy,” be dismissed so easily? Could a warning bell possibly sound any louder?

When it comes to gold, Wall Street continues tuning out the inflation warning, its current strength is so clearly sounding. All too common is the routine way in which stock investors cavalierly take comfort from the bond market. Since long-term yields are still low they conclude inflation must not be a threat. Gold’s warning must therefore be false, or its rise in price reflective of factors other than inflation. This equates to stock investors not worrying about inflation merely because bond investors have made the same mistake.

But by far the most comical example I have witnessed thus far was an exchange on CNBC’s “Kudlow & Company,” where Larry Kudlow asked his guest if she was worried that rising gold prices might signify higher inflation. She replied that she was not worried at all. In her opinion, it made perfect sense that some of the dollars created to fund our trade deficit would go into gold. Not only did such a ridiculous answer reveal that she knew nothing about inflation, but Mr. Kudlow’s response revealed that he knew even less. Besides agreeing with his guest, he added that while rising gold prices in the 1970’s were problematic as they reflected higher inflation, today they were actually a positive sign, as they reflected strong economic growth! No wonder they call him Lawrence of America.

This week’s New York City transit strike underscored another of the biggest time bombs in the U.S. economy, pension liabilities. Though many private sector employees are already dealing with the grim realities of under-funded pensions, public sector workers are just beginning to face the unpleasant reality. For decades, it was easy for politicians to appease unions without angering current voters by committing to highly generous, but completely unfunded pension benefits. Now that these contingent liabilities are coming due, workers in both sectors are in for rather rude awakenings. With personal savings at an all-time low, rising interest rates, and falling real incomes, retirement in America will soon be as passé as the single income household.

more...

[54anickel]

38. Middle-Class Job Losses Batter Workforce

http://news.yahoo.com/s/ap/20060102/ap_on_bi_ge/chasing_prosperity;_ylt=A9FJqaC2nrhDW_YAWAGyBhIF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA

LANSING, Mich. - Thirty years ago, Dan Fairbanks looked at the jobs he could get with his college degree and what he could make working the line at General Motors Corp., and decided the GM job looked better.

He still thinks he made the right choice. But with GM planning to end production of the Chevrolet SSR and shut down the Lansing Craft Centre where he works sometime in mid-2006, Fairbanks faces an uncertain future.

"Back when I hired in at General Motors 30 years ago, it seemed like a good, secure job," said Fairbanks, president since June of UAW Local 1618. Since then, "I've seen good times and I've seen bad times. This qualifies as a bad time, in more ways than one."

Many of the country's manufacturing workers are caught in a worldwide economic shift that is forcing companies to slash payrolls or send jobs elsewhere, leaving workers to wonder if their way of life is disappearing.

snip>

"They're destroying the working class. Why can't people see this?" asked the 38-year veteran. "Anybody who works in manufacturing has no future in this country, unless you want to work for wages they get in China."

more...

[54anickel]

41. 10:47 and somebody flushed

Dow 10,695.98 -21.52 (-0.20%)
Nasdaq 2,194.49 -10.83 (-0.49%)
S&P 500 1,247.53 -0.76 (-0.06%)
10-yr Bond 4.377% -0.02
30-yr Bond 4.534% -0.01
NYSE Volume 637,462,000
Nasdaq Volume 546,941,000


10:30 am : Turning south, the indices now trade on red turf. Along with with continued weakness in General Motors (GM 18.58 -0.84), a sharp decline in fellow Dow component Wal-Mart (WMT 45.83 -0.97) shares can be partially credited for the broader market's shift. The world's largest retailer today announced that it expects December same-store sales of +2.2% - the low end of its previously-forecasted +2-4% range. As a result, retail industry is off about 1%. Separately contributing to the market's move was the December ISM index, which fell a stronger than expected 3.9 points to 54.2 (consensus 57.5) - a four-month low as both demand and production fell off more than expected. As the read is above 50, the index still reflects growth, though. Construction spending, meanwhile, rose a lower than expected 0.2% (consensus 0.7%) in November.DJ30 -25.60 NASDAQ -10.84 SP500 -1.02 NASDAQ Dec/Adv/Vol 1492/1238/453.2 mln NYSE Dec/Adv/Vol 1239/1793/303.8 mln

10:00 am : The indices hold steadily higher, garnering support from seven of the ten economic sectors. Alongside a 1.1% jump in the price of crude, to $61.72 per barrel, the Energy sector (+1.7%) starts as the year's front-runner. Refiners spearhead the advance, but gains are broad-based and have taken each of the S&P's 29 energy issues north. Largely due to extended weakness in General Motors (GM 18.62 -0.80), the Discretionary sector trends lower, and is joined by the Industrial (-0.2%) and Telecom (-0.2%) sectors on losing ground. DJ30 +20.74 NASDAQ +7.01 SP500 +4.31 NASDAQ Dec/Adv/Vol 991/1568/253.2 mln NYSE Dec/Adv/Vol 718/1805/117.6 mln

[bill]

42. Will Abramoff steepen the slide?

n/t

[Roland99]

73. Looks like he triggered some buy orders. WHEEEEE!!!

[54anickel]

43. U.S.'s Rival in 2006 Isn't China, But Japan

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_pesek&sid=a3XzjBV8o__k

Jan. 2 (Bloomberg) -- If you think the Bush administration does a poor job sizing up politics overseas, check out its flawed intelligence on the global economy.

Judging by the administration's comments, 2006 is the year of China. It's a year in which the U.S. will step up calls for a stronger yuan, fairer trade and improved human rights in Asia's No. 2 economy. In other words, remind officials in Beijing who's the boss.

The focus may seem understandable considering the future; China's economy may well surpass that of the U.S. in a few decades. Yet the Bush administration's focus on China ignores the U.S.'s real competitor in 2006: Japan.

snip>

Here are four reasons why Japan's recovery should be a far bigger blip on the U.S.'s radar screen in 2006.

One, more competition for global capital. At a time when stock markets are playing unprecedented roles in economies, attracting foreign capital has never been more important.

Few investors will miss how Japan's Nikkei 225 Stock Average closed out 2005 with its biggest annual gain -- 40 percent -- since 1986. Nor will it escape them that the Dow Jones Industrial Average ended 2005 little changed. The upshot is that U.S. financial assets now have to work even harder for attention thanks to Japan.

more....

[54anickel]

46. 11:36, attempting to come up for air before lunch

Dow 10,711.10 -6.40 (-0.06%)
Nasdaq 2,199.86 -5.46 (-0.25%)
S&P 500 1,249.91 +1.62 (+0.13%)
10-yr Bond 43.60 -0.35 (-0.80%)
30-yr Bond 45.24 -0.23 (-0.51%)
NYSE Volume 898,930,000
Nasdaq Volume 736,092,000

11:00 am : While modestly improving, the indices remain below the unchanged mark. Crude continues its run, and has hit a fresh session-high of $62.65 per barrel. Combined with relative weakness in retailers - the dual effect of declining GM and WMT shares - that price action has pushed the Discretionary sector 1.0% lower. On the flip-side, the Energy sector continues to benefit from the crude climb, but its 2.5% rise is not enough to fully offset declines across seven sectors. Second to the Discretionary sector on the laggard list, Industrials extend a weighty 0.8% loss. Transportation issues are a particular sore spot, as rising oil has also sparked some selling there. To that end, the Dow Jones Transportation Average is currently off 2.0%. DJ30 -17.51 NASDAQ -9.99 SP500 -0.37 NASDAQ Dec/Adv/Vol 1816/1029/577.3 mln NYSE Dec/Adv/Vol 1633/1475/465.0 mln

Gotta run and try to get some chores done around here. Will try to check back later. :hi:

[UpInArms]

50. 12:08 EST bobbing at the surface

Dow 10,717.92 +0.42 (+0.00%)
Nasdaq 2,206.09 +0.77 (+0.03%)
S&P 500 1,251.13 +2.84 (+0.23%)
10-Yr Bond 4.354 -0.41 (-0.93%)

NYSE Volume 1,056,639,000
Nasdaq Volume 851,967,000

12:00 pm : Despite strong futures indications and an upside start to 2006, the indices took a mid-morning turn south and continue to struggle as afternoon trading gets underway. A pair of lower than expected economic reads helped to dampen the early bullish sentiment, and a 3.5% surge in the price of crude oil futures weighs heavily.

The crude action has incited buying interest across the Energy sector, and its 3.0% gain offers some leadership. Ultimately, though, that sector's support is not enough to counter losses levied by six of the ten economic sectors. With relative weakness in the retail industry, due largely to a pair of sharply declining Dow components, teamed with crude-induced selling pressure, the Discretionary sector (-0.6%) fares worst. General Motors (GM 18.75 -0.67) extends its suffering into the new year after Bank of America cut its target price on the stock. Meanwhile, Wal-Mart (WMT 45.98 -0.82) asserted that December same-store sales should rise 2.2% -- the low end of its previously-forecasted +2-4% range. This has made for some bearish anticipation of this week's stream of same-store sales data that will reflect sales during the industry's most crucial period. WMT's decline has simultaneously taken the Consumer Staples sector (-0.4%) lower. Industrials (-0.7%), facing relative crude-induced weakness in transportation issues, also contributes a weighty decline.

Financial's 0.2% slide, while modest, has lent some muscle to the market's downturn. Investment banks and brokers stand as the sorest spot, despite a somewhat improved Treasury market. Following last week's inversion and long-flattening curve, the spread between the two-year and ten-year notes has slightly steepened. The former presently yields 4.35%, while the latter offers 4.36%. Traders' attention remains focused upon the afternoon release of the minutes from the FOMC's December 13 meeting; the stock and bond markets alike will scrutinize the minutes for insight into just how far away the end of the Fed's current tightening cycle lies, and hope for indication of whether or not rates will be hiked in excess of the two additional times that are widely anticipated. Further to today's economic front, the December ISM Index checked in at a four month low. At the same time, however, the 54.2 read still reflects growth. Construction spending rose a lower than expected 0.2% in November, but that data is essentially "old news" that has a lesser effect on today's trading.

On the other side of the aisle, the Materials (+0.5%), Technology (+0.3%), and Healthcare (+0.2%) sectors contribute some modest gains. With respect to the latter, strength in pharmaceuticals - driven by an analyst upgrade on Johnson & Johnson (JNJ 61.23 +1.13) shares - serves as its best source of support. DJ30 -1.69 NASDAQ -0.25 SP500 +2.76 NASDAQ Dec/Adv/Vol 1764/1188/830.9 mln NYSE Dec/Adv/Vol 1484/1705/734.0 mln

[54anickel]

53. Inverted yield curve means short-term bonds, CDs your best bet

http://seattletimes.nwsource.com/html/businesstechnology/2002717313_yieldcurveadvice03.html

You may have seen the yield curve inverted last week, as short-term interest rates became higher than long-term ones for the first time in five years. What's that mean to us?

Historically, it's been a sign to get ready to tighten our belts, as the lower long-term rates signal a coming recession. This time it's not so clear the economy is poised to slow down.

But the inverted yield curve does dictate changes in some savings and investing strategies. And it makes one curious: Why do so many investors continue buying long-term bonds when short-term ones pay more and carry less risk?

The yield curve is a line showing interest rates on a graph, with short-term rates on the left and long-term ones on the right. Long-term rates typically are higher to pay investors for tying their money up longer.

more...

[54anickel]

54. Countdown (Heh-heh)

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

[54anickel]

55. 2:18 and wtf? A rally in the pits! Must be happy with the FOMC

Dow 10,762.25 +44.75 (+0.42%)
Nasdaq 2,221.48 +16.16 (+0.73%)
S&P 500 1,257.15 +8.86 (+0.71%)
10-yr Bond 4.379% -0.02
30-yr Bond 4.541% -0.01
NYSE Volume 1,611,636,000
Nasdaq Volume 1,284,888,000

2:00 pm : Stocks continue to hover around the unchanged mark as traders await the FOMC minutes that are due out momentarily. In anticipation, the bond market has pulled back to some degree. The benchmark 10-year note is now up three ticks and yielding 4.38%; at the front end of the curve, the five-year (+02/32) offers 4.33%, while, at the back end, the 30-year (-02/32) has fallen into the red and yields 4.54%. Within the equity market, sector standing remains split down the middle: The Consumer Discretionary (-0.4%), Consumer Staples (-0.4%), Financial (-0.1%), Industrials (-0.7%), and Telecom (-0.5%) levy losses, while Energy (+3.4%), Healthcare (+0.2%), Tech (+0.3%), Materials (+0.9%), and Utilities (+0.5%) provide support. DJ30 -3.20 NASDAQ +1.49 SP500 +2.84 NASDAQ Dec/Adv/Vol 1772/1248/1.16 bln NYSE Dec/Adv/Vol 1436/1841/1.07 bln

1:30 pm : Hovering around the flat line, the indices' stances reflect traders' caution ahead of the FOMC minutes scheduled for release at the top of the hour. The Treasury market, meanwhile, appears somewhat more optimistic and continues to show improvement today. The benchmark 10-year note has risen eight ticks and presently yields 4.36%. Gold has also started the year off on the right foot -- with February futures 2.3% higher. A subsequent 5% surge in Newmont Mining (NEM 55.99 +2.59), the S&P's gold issue, has helped take the Materials sector 0.8% higher. Crude's now 4.4% rise, to $63.75 per barrel, maintains the commodity spotlight, though. DJ30 -2.72 NASDAQ -0.58 SP500 +2.24 NASDAQ Dec/Adv/Vol 1775/1239/1.08 bln NYSE Dec/Adv/Vol 1423/1840/992.2 mln

1:30 pm : Hovering around the flat line, the indices' stances reflect traders' caution ahead of the FOMC minutes scheduled for release at the top of the hour. The Treasury market, meanwhile, appears somewhat more optimistic and continues to show improvement today. The benchmark 10-year note has risen eight ticks and presently yields 4.36%. Gold has also started the year off on the right foot -- with February futures 2.3% higher. A subsequent 5% surge in Newmont Mining (NEM 55.99 +2.59), the S&P's gold issue, has helped take the Materials sector 0.8% higher. Crude's now 4.4% rise, to $63.75 per barrel, maintains the commodity spotlight, though. DJ30 -2.72 NASDAQ -0.58 SP500 +2.24 NASDAQ Dec/Adv/Vol 1775/1239/1.08 bln NYSE Dec/Adv/Vol 1423/1840/992.2 mln

[UpInArms]

60. 2:40 EST everybody's happy with "rah-rah sis boom bah" blather

Dow 10,788.99 +71.49 (+0.67%)
Nasdaq 2,231.45 +26.13 (+1.18%)
S&P 500 1,261.39 +13.10 (+1.05%)
10-Yr Bond 4.372 -0.23 (-0.52%)

NYSE Volume 1,754,344,000
Nasdaq Volume 1,412,407,000

2:30 pm : Stocks have spiked higher over the last 30 minutes following the recent release of the FOMC minutes. While the Committee differed on the degree of further rate tightening at their most recent December 13 meeting, the Fed noted a "significant" reduction in rate "accommodation," that the number of rate rises "probably would not be large," and that inflation "remained contained" -- positive catalysts that have helped market participants take a bullish cue from action in Treasuries. The 10-yr note was up as much as 10 ticks to yield 4.34%, helping the rate-sensitive Financial sector provide some much needed leadership. DJ30 +52.19 NASDAQ +19.42 SP500 +10.69 NASDAQ Dec/Adv/Vol 1679/1356/1.30 bln NYSE Dec/Adv/Vol 1309/1981/1.17 bln

[54anickel]

64. Oh brother! Nothing they weren't expecting, all they talked about

regarding the futures and early trading for the day. But hey, let's just forget about those unexpected drops in this morning's reports, that's so, so, so...morningish.

Attention span of a gnat. :eyes:

[UpInArms]

65. nano-pico attention span

more like the size of those no-see-ums that are smaller than a pinhead.

:hi:

[UpInArms]

59. US lobbyist Abramoff pleads guilty

http://today.reuters.com/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-01-03T183019Z_01_N03325085_RTRIDST_0_CRIME-ABRAMOFF-UPDATE-3-PICTURE.XML

WASHINGTON, Jan 3 (Reuters) - Embattled U.S. lobbyist Jack Abramoff pleaded guilty on Tuesday to federal charges after agreeing to cooperate in a corruption probe that could involve several top Republican lawmakers, including former House Majority Leader Tom DeLay.

Abramoff pleaded guilty to conspiracy, fraud and tax evasion before a federal judge in Washington. His lawyer said Abramoff would plead guilty to other charges in Miami on Wednesday.

The long-expected plea will give prosecutors extra ammunition as they seek to link the activities of DeLay of Texas, Republican Rep. Bob Ney of Ohio, and other top lawmakers to favors paid for by Abramoff's lobbying clients.

Abramoff's plea was sure to send shockwaves through Congress, where many Republicans and Democrats have benefited from campaign contributions from him or his clients. Lawmakers seeking to distance themselves from him have returned more than $200,000 in recent weeks.

<snip>

"It was a purpose of the conspiracy for defendant Abramoff, Scanlon and others to enrich themselves by obtaining substantial funds from their clients through fraud and concealment," the charges said.

...more...

[UpInArms]

66. Abramoff's Republican History

http://www.chron.com/disp/story.mpl/nation/3562137.html

excerpt:

Born in New Jersey, Abramoff attended high school in Beverly Hills and served as national chairman of college Republicans in the early 1980s, working with compatriots such as Grover Norquist and Ralph Reed, who became champions of the conservative movement.

As head of the college Republicans, he helped coordinate a "national student liberation day" to celebrate the first anniversary of the U.S. invasion of Grenada. Although it was supposedly a nonpartisan event, Abramoff wrote to campus Republicans: "I don't need to tell you how important this project is to our efforts as CR's (College Republicans)."

Later he worked for the conservative advocacy group Citizens for America until he was fired over questions about mismanaged money.

Then he became chairman of the conservative International Freedom Foundation, later revealed to be financed by the white South African government, according to the South African truth commission.

In 1986, Abramoff headed to Hollywood, where he produced Red Scorpion, an anti-communist movie that allegedly got money from the South African military. It was the Republican takeover of Congress that brought Abramoff back to Washington.

...more...

[54anickel]

69. Sheesh, I feel the need to take a shower after reading that piece

Love the ending:

"Many other Reagan conservatives came to Washington with the stars of the revolution in their eyes and they ended up with very fat wallets in their back pockets," he said. "They came to do good and they ended up doing very, very well."

[UpInArms]

67. Abramoff engaged in a conspiracy involving "corruption of public officials

http://www.chron.com/disp/story.mpl/nation/3561791.html

excerpt:

Abramoff agreed with U.S. District Court Judge Ellen Huvelle when she said that he had engaged in a conspiracy involving "corruption of public officials." The lobbyist also agreed when she said he and others had engaged in a scheme to provide campaign contributions, trips and other items "in exchange for certain official acts."

Court papers said Abramoff corruptly gave "money, meals, trips and entertainment to public officials and their relatives with the intent to influence and in return for agreements to perform official acts" benefiting Abramoff, former business partner Michael Scanlon and their clients. The papers said Abramoff caused former congressional aides to lobby their former bosses within a one-year window of employment, during which they are barred from such activities.

Scanlon, DeLay's former press secretary, pleaded guilty in November.

...more...

[wordpix2]

77. "just don't tie me to the murder in Florida that Kidan is tied to"

[OrangeCountyDemocrat]

68. Dow Up 135....Looks Like I Picked Wrong Week To Quit Sniffing Glue nt

[UpInArms]

71. SEC: Six charged in Putnam pension fund fraud case

http://www.marketwatch.com/news/print_story.asp?print=1&guid={29BD4473-2CC0-4038-AA30-1434FA5C360F}&siteid=mktw

BOSTON (MarketWatch) -- The Securities and Exchange Commission said Tuesday that it has charged six former officers of a unit of mutual-fund giant Putnam Investments for defrauding a defined-contribution plan client and several Putnam funds.

The agency's complaint, filed on Dec. 30, alleges that the defendants delayed investing assets of a defined-contribution client, Cardinal Health Inc. (CAH), by one day, causing the company's plan to miss out on about $4 million in market gains.

Instead of informing Cardinal Health about the delay or offering compensation, the complaint alleges that the former Putnam Fiduciary Trust Co. (PFTC) officials "decided to improperly shift approximately $3 million of the costs of the delay to shareholders of certain Putnam mutual funds through deception, illegal trade reversals, and accounting machinations."

The SEC alleges the defendants improperly allowed Cardinal Health's plan to absorb about $1 million in losses without informing the company.

<snip>

The complaint alleges that Durgarian, Papa, Childs and Crain took steps to cover up the misconduct. According to the complaint, Durgarian was "principal executive officer" of several Putnam funds including Putnam Research (PNRAX), George Putnam Fund of Boston (PGEOX), and three asset allocation funds: Growth (PAEAX); and Balanced (PABAX).

...more...

[UpInArms]

79. Wal-Mart's holiday not terribly cheery

Retailing giant's 'no longer invincible,' analyst says

http://www.marketwatch.com/news/story.asp?guid=%7B872CF40F%2DF515%2D4312%2D9397%2D77697A68BC0E%7D&symbol=&siteid=mktw

CHICAGO (MarketWatch) -- The verdict's in: Wal-Mart Stores Inc. had a disappointing showing during December as consumers tightened their pocketbooks and waited for deeper discounts -- and gift cards -- before picking up merchandise.

Wal-Mart (WMT) saw its shares drop 57 cents, or 1.2%, to $46.23 by Tuesday's close, with the Dow Jones Industrial Average thus retracing to levels it hasn't seen since late October.

The much-touted promotional stance that Wal-Mart made at the beginning of November fizzled into December as competitors stepped up their own marketing plans, analysts said.

As a result, December's sales at its U.S. stores open long than a year, a crucial industry measure, inched up 2.2%, Bentonville, Ark-.based Wal-Mart said Saturday. That's scraping the low end of a 2%-to-4% forecast the company clung to throughout the month and is the worst growth performance in five years.

Food sales mostly trumped general merchandise sales throughout both November and December, suggesting that consumers were shopping the stores for basics more so than gifts and me-too items.

Likewise, a rush for general merchandise in the last week of December implies that consumers were using their Christmas gift cards to buy apparel and appliances. It helped that Wal-Mart stocked up on new spring items and outerwear to boost full-price purchases.

...more...

[54anickel]

80. Dow Closes Up 130, Nasdaq Finishes Up 38 (Rah-rah!)

http://biz.yahoo.com/ap/060103/wall_street.html?.v=20

Dow Ends Up 130 at 10,847, Nasdaq Ends Up 38 at 2,244 As Investors Overcome Jump in Oil Prices


NEW YORK (AP) -- Wall Street had a bullish start to the new year Tuesday, with the Dow Jones industrials surging more than 129 points after the Federal Reserve signaled a willingness to stop its campaign of interest rate hikes in the near future.

snip>

Investors ended 2005 with the fear that the Fed would go too far in raising rates, choking off economic growth in its effort to stem inflation. That concern had kept stocks volatile for much of the year and stymied Wall Street's typical year-end rally. But the news of a possible policy shift was greeted with enthusiastic buying Tuesday.

"Given the rise we saw, it shows you the importance of interest rates and what the Fed thinks," said Jay Suskind, head trader at Ryan Beck & Co. "This gives us hope that the Fed will be sensitive to the economy and we can get back to that nice 'Goldilocks' economy where growth is just right."

[UpInArms]

82. Will housing, hedge fund, debt crisis test next Fed chief?

http://money.cnn.com/2006/01/03/news/economy/fed_bernanke_challenges/?cnn=yes

NEW YORK (CNNMoney.com) - Alan Greenspan was Fed chairman less than 10 weeks when he faced his first major test -- the stock market crash of 1987.

<snip>

Anthony Chan, senior economist for JPMorgan Asset Management, said that potential problems in the housing and energy markets, and with the nation's growing dependence on foreign capital, were unlikely to turn into full blown crises in 2006. And he added that Bernanke's ability to deal with them shouldn't be underestimated.

<snip>

"I would attach a reasonably high probability that there will be a problem in the housing or finance markets that will test the next Fed chairman," said Zandi.

<snip>

Today hedge funds, which use highly leveraged investments, are much bigger players in the financial markets than they were in 1998. Some are concerned that the largely unregulated entities could have another stumble, due to housing, or wild swings in commodity prices or other markets.

<snip>

If that happened, China could slow or halt its purchases of U.S. debt, or even sell some of the debt it now holds. And that could cause a crisis in world financial markets.

...more...

[ozymandius]

83. and closing this rah-rah session

See you in the morning folks!

Ozy :hi:

Dow 10,847.41 +129.91 (+1.21%)
Nasdaq 2,243.74 +38.42 (+1.74%)
S&P 500 1,268.80 +20.51 (+1.64%)
10-Yr Bond 43.70 -0.25 (-0.57%)
NYSE Volume 2,526,687,000
Nasdaq Volume 2,047,877,000

4:20 pm : A bullish interpretation of minutes from the FOMC's most recent meeting helped the market's major averages breach the trading range that had left them encircling the flat line for most of the year's first session. While a lower than expected manufacturing read extinguished early buying action, investors chose to focus upon the Fed's assertion that the number of rate rises "probably would not be large" and that inflation remains contained.

From 2:00 ET (the time at which the minutes were released) until the bell, buying was broad-based and took all ten of the economic sectors higher. Alongside a 3.1% surge in the price of crude, Energy (+4.5%) occupied the leadership seat all day. While its gain had not been sufficient in countering selling pressure in the early going, a 1.7% jump in the Financial sector and a 2.0% rise in Technology lent muscle to the broader market's advance. Banks had exerted a market-dragging decline intra-day, but clues from the Fed that the end to its current monetary tightening cycle is nearing helped the industry fully erase its loss and rise to a market-leading gain. The Treasury market similarly took a bullish cue, and the yield curve's slight steepening, following last week's inversion, further helped to underpin a sense of bullishness from which rate-sensitive pockets of the market benefited.

Despite crude's run, the Consumer Discretionary sector managed to post a 1.0% gain. Retail had presented a particular challenge, but similarly rose with the afternoon rally. In particular, General Motors (GM 18.94 -0.48) and Wal-Mart (WMT 46.22 -0.58) challenged that industry. Bank of America's target price cut took the former issue south, while the world's largest retailer's assertion that December same-store sales should rise 2.2% -- the low end of its previously-forecasted +2-4% range for the vital holiday period -- sent it to a two-month low. While WMT's decline also weighed heavily upon the Consumer Staples sector (+0.6%), broad-based buying and earnings-induced strength in Walgreen's (WAG 45.41 +1.15) helped it climb. Such wide-spread buying action helped even transportation issues, which had languished on account of the energy price action, and enabled the Industrials (+0.6%) sector to clear the flat line.

Surges across the Technology board can be largely credited with today's advance, and, particularly, with the Nasdaq's outperformance. Healthcare, which spent the session on positive turf, further contributed to the indices' stances. The Dow's pharmaceutical trio - Johnson & Johnson (JNJ 61.51 +1.41), Merck (MRK 32.75 +0.94), and Pfizer (PFE 23.72 +0.40) - demonstrated relative strength on the heels of JNJ's analyst upgrade. That industry teamed with particular strength in biotechs and healthcare distributors in driving the sector's solid 1.3% rise.

With respect to the December ISM Index, the four-month low reading of 54.2 (consensus 57.5) still reflects growth, but at a decelerated rate that dampened the early bullishness with which 2006 launched. However, the extent to which the Fed hikes interest rates remains this year's stock market's biggest concern; hope gleaned from the FOMC's minutes that the tightening end is near stole the afternoon spotlight and eclipsed the effect of suggested economic slowing.DJ30 +129.91 NASDAQ +38.42 SP500 +20.51 NASDAQ Dec/Adv/Vol 1209/1906/2.01 bln NYSE Dec/Adv/Vol 833/2529/1.91 bln

[OrangeCountyDemocrat]

84. So Now.....According To CNBC.....It Will Be A GREAT 2006!!!

This morning they stated....."When the first Day of January trading is Up, the first Week of January is usually Up as well. And when the first Week of January is Up, then January is often Up also. Finally, when January is Up, the entire Year is usually Up."

Given the market's performance today, it looks like a good year for stocks. Whew....for a second there I was worried.

[AnneD]

85. What twits...

might as well sacrifice a chicken and read the entrails (disclaimer: I do not own stock in Pilgrims Pride Chicken nor was my statement an endorsement of chicken sacrifice or to be construed as a derogatory statement about those persons that practice ritualized slaughter of poultry).