STOCK MARKET WATCH, Wednesday 16 August

[ozymandius]

Wednesday August 16, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 889 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2062 DAYS
WHERE'S OSAMA BIN-LADEN? 1762 DAYS
DAYS SINCE ENRON COLLAPSE = 1723
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 6
Enron execs conveniently deceased = 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 August 14, 2006

Dow... 11,230.26 +132.39 (+1.19%)
Nasdaq... 2,115.01 +45.97 (+2.22%)
S&P 500... 1,285.58 +17.37 (+1.37%)
Gold future... 632.90 -6.40 (-1.01%)
30-Year Bond 5.05% -0.07 (-1.39%)
10-Yr Bond... 4.93% -0.07 (-1.40%)






GOLD, EURO, YEN, Loonie and Silver


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 Frank Barbera

Forward-Looking Outlook

Stocks closed sharply higher on Tuesday sparked by a better than expected reading in Core PPI, which in turn holds out hope that the Federal Reserve may be closer to the end of its interest rate hiking cycle. Of course over the last few weeks, stocks have moved up and down like ‘an elevator with a lunatic at the controls’ as virtually every piece of conflicting data has sent stocks soaring and then plunging back to earth.

Tomorrow, the market will be focused on the CPI report, where the core rate will once again be the focus. For CPI aficionados, the real impact in tomorrow’s CPI report will probably come from the oversized Owners Equivalent Rent component, which measures an obtuse variant of housing market rents. In a perverse twist of fate, Owners Equivalent Rent tends to run counter to the primary trend of the housing market, moving down when housing prices rose in recent years, and now, moving up as housing prices begin to weaken. What a crazy world we live in when this component is virtually alone in its assessment of the housing market, and where the Federal Reserve has placed itself in the awkward position of not being able to ignore this data lest they lose more of their inflation fighting credibility and put the US Dollar at risk.

As a result, the markets are likely to have more issues to contend with regarding the forward looking outlook on inflation and the real trend in Fed policy. In my view, a key indicator to be watching over the next few weeks will be the action in the NASDAQ Composite, which--as seen last week--has been losing relative strength versus the S&P 500 for some time.

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

[ozymandius]

2. Today's Reports-a-plenty

8:30 AM Building Permits Jul
Briefing Forecast 1825K
Market Expects 1840K
Prior 1869K

8:30 AM Core CPI Jul
Briefing Forecast 0.3%
Market Expects 0.3%
Prior 0.3%

8:30 AM CPI Jul
Briefing Forecast 0.4%
Market Expects 0.4%
Prior 0.2%

8:30 AM Housing Starts Jul
Briefing Forecast 1800K
Market Expects 1810K
Prior 1850K

9:15 AM Capacity Utilization Jul
Briefing Forecast 82.7%
Market Expects 82.7%
Prior 82.4%

9:15 AM Industrial Production Jul
Briefing Forecast 0.6%
Market Expects 0.6%
Prior 0.8%

10:30 AM Crude Inventories 08/11
Briefing Forecast NA
Market Expects NA
Prior -1114K

[UpInArms]

10. 8:30 reports:

8:30 AM ET 8/16/06 U.S. CORE CPI UP AT FASTEST ANNUAL PACE SINCE DEC. 2001

8:30 AM ET 8/16/06 U.S. JULY REAL WEEKLY EARNINGS DOWN 0.1% YEAR-OVER-YEAR

8:30 AM ET 8/16/06 U.S. CPI UP 4.1% YEAR-OVER-YEAR

8:30 AM ET 8/16/06 U.S. JULY OWNERS EQUIVALENT RENT UP 0.4%

8:30 AM ET 8/16/06 U.S. JULY CPI SHELTER PRICES UP 0.4%

8:30 AM ET 8/16/06 U.S. JULY CPI ENERGY PRICES UP 2.9%

8:30 AM ET 8/16/06 U.S. CORE CONSUMER PRICES UP 2.7% YEAR-OVER-YEAR

8:30 AM ET 8/16/06 U.S. JULY CORE CPI UP 0.2% VS. 0.3% EXPECTED

8:30 AM ET 8/16/06 U.S. JULY CPI UP 0.4% AS EXPECTED

8:30 AM ET 8/16/06 U.S. JULY HOUSING STARTS DOWN 13.3% YEAR-OVER-YEAR

8:30 AM ET 8/16/06 U.S. JUNE STARTS REVISED DOWN TO 1.84 MLN VS 1.85 MLN

8:30 AM ET 8/16/06 U.S. JULY BUILDING PERMITS DOWN 6.5%, BIGGEST SINCE SEPT '99

8:30 AM ET 8/16/06 U.S. JULY HOUSING STARTS AT LOWEST LEVEL SINCE NOV. 2004

8:30 AM ET 8/16/06 U.S. JULY HOUSING STARTS WEAKER THAN 1.82 MLN EXPECTED

8:30 AM ET 8/16/06 U.S. JULY HOUSING STARTS DOWN 2.5% TO 1.80 MLN

[UpInArms]

11. U.S. July housing starts down 2.5% to 1.80 mln

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B6D0CB2A0%2D6D77%2D4B5E%2D8178%2DA0EE7AD59E6F%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - New construction of U.S. houses retreated in July for the fifth decline in the last six months, the Commerce Department estimated Wednesday. Starts fell 2.5% in July to a seasonally adjusted 1.80 million annualized units, weaker than the 1.82 million pace expected by economists surveyed by MarketWatch. Starts of new single-family homes fell by 2.3% to a 1.45 million in July, while starts of large apartment units fell 3.4% to 343,000. Building permits, a leading indicator of housing construction, plunged 6.5% to a seasonally adjusted annual rate of 1.75 million. This is the biggest monthly decline since September 1999. Permits are at their lowest level since August 2002.

[UpInArms]

12. info on the CPI - Soaring energy prices push consumer price index up 0.4%

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B8084E29E%2DD222%2D4B18%2D912C%2DB0B76CC29D8A%7D&symbol=

WASHINGTON (MarketWatch) - Core consumer inflation eased back in July, rising just 0.2% after four months of 0.3% gains, the Labor Department said Wednesday.
The relatively tame 0.2% increase in core consumer price index could help keep the Federal Reserve on the sidelines at next month's policy meeting if August's inflation data do not worsen.

Core prices - which exclude food and energy costs - have risen 2.7% in the past year, the highest since late 2001. Core inflation is running about a half percentage point above the Fed's comfort zone.

So far in 2006, core prices are rising at a 3.1% annual pace, a key reason why the Fed increased overnight interest rates at 17 straight meetings over two years before pausing last week.

Meanwhile, soaring energy costs pushed the total CPI up 0.4% in July, as expected by economists surveyed by MarketWatch. The economists were expecting core prices to rise 0.3%, although a sizable number were predicting the 0.2% rise that was reported.

...more...

[UpInArms]

17. U.S. July industrial production rises 0.4% vs. 0.5% expected

9:15 AM ET 8/16/06 U.S. JULY CAPACITY UTILIZATION 82.4% VS. 82.6% EXPECTED

9:15 AM ET 8/16/06 U.S. JULY UTILITY OUTPUT RISES 2% VS. 0.9% IN JUNE

9:15 AM ET 8/16/06 U.S. JULY INDUSTRIAL PRODUCTION RISES 0.4% VS. 0.5% EXPECTED

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BB72416CA%2D412E%2D4D63%2D943C%2DB83FC21E508F%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- Unseasonably hot weather forced utilities to more than double their output in July, as power plants ran at higher capacities to keep up with demand for electricity to cool homes and businesses. Production at utilities rose by 2% compared to 0.9% in June, the Federal Reserve said Wednesday, while capacity utilization at utilities climbed by 88.2%. It's up from 86.5% in June. Overall industrial production rose by 0.4% in July, down from 0.8% in June, the Federal Reserve said Wednesday. Capacity utilization rose slightly, to 82.4% from 82.3% in June, the Fed said. Economists surveyed by MarketWatch were expecting industrial production to rise 0.8%.

[ozymandius]

3. Oil prices continue to fall

SINGAPORE - Oil prices continued to fall Wednesday as a cease-fire took hold in Lebanon and concerns eased about supply disruptions in the U.S. state of Alaska.

Light sweet crude for September delivery fell 7 cents to $72.98 a barrel in midafternoon Asian electronic trading on the New York Mercantile Exchange.

October Brent at London's ICE Futures exchange, which moves to the front month from Thursday, lost 18 cents to $73.59 a barrel. The September contract was down 4 cents at $73.76 a barrel.

-cut-

Data released Tuesday by the Organization of Petroleum Exporting Countries confirmed the downward trend in prices. OPEC's reference basket of 11 crude oils was quoted at $69.54 a barrel Monday, down 80 cents from Friday.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

4. Gasoline Ticks Up but Likely to Slide

Gasoline prices inched up in California over the last week as markets reacted to the cutback in production at BP's Alaska oil field, but a recent run of upbeat news may mean relief is in sight for motorists.

A gallon of self-serve regular gasoline cost an average of $3.211 statewide Monday, according to the federal government's latest price survey, up from $3.192 a week ago. Nationwide, the average price dropped to $3 a gallon from $3.038 a week ago.

-cut-

Further, with the summer driving season nearing its end, analysts say pump prices are poised to fall across the country. Barring new supply disruptions or other market-rattling events, Californians could see significantly lower prices over the next 10 days, industry consultant Andrew Lipow said.

-cut-

He noted that Exxon Mobil Corp. and ConocoPhillips, BP's partners at Prudhoe Bay, told customers last week that they might not be able to fulfill contracts for delivery of Alaskan crude. That notification, an instance of force majeure, "might keep prices elevated a little bit," Flynn said, although he expected relief to come soon for California drivers.

more

[ozymandius]

5. Home sales decline in 28 states, D.C.

WASHINGTON - The slowdown in the once-sizzling housing market is spreading, with 28 states and the District of Columbia reporting spring sales declines, led by big drops in former boom areas of Arizona, Florida and California.

Nationally, sales were down 7 percent in the April-June quarter this year compared with the same period in 2005, the National Association of Realtors said Tuesday in its latest state-by-state look at housing conditions around the country.

The Realtors survey showed that the biggest declines occurred in states that had been enjoying red-hot sales during the five-year housing boom.

The five biggest declines this spring compared to the April-June period of 2005 were Arizona, down 26.9 percent; Florida, down 26.7 percent; California, down 25.3 percent; Virginia, down 23.9 percent, and Nevada, down 23.5 percent.

http://news.yahoo.com/s/ap/home_sales

[54anickel]

23. Job losses lead to drop in home prices

http://www.usatoday.com/money/economy/housing/2006-08-15-q2-home-sales_x.htm

The loss of manufacturing jobs helped drive down home prices in 26 metro areas between April and June compared with the same period last year, the National Association of Realtors said Tuesday.
That's 10 more areas than in the first quarter, and it spotlights how joblessness in industrial states such as Illinois, Michigan, Ohio and Indiana is rippling through housing markets.

The hardest-hit this year: Danville, Ill., where prices at which existing homes were sold fell 11% in the second quarter after a 12% drop in the first quarter.

CHART : Prices in more than 100 metro areas

General Motors (GM), General Electric (GE) and Hyster (NC), a maker of forklifts, were among the companies to close plants in Danville, leaving behind hundreds of unemployed residents. The median price for a home has fallen to $65,200 — the cheapest in the country.

The exodus of auto, textile and other factory jobs has a direct effect on home prices. People leave town to look for work, boosting the supply of homes for sale. Others sell their homes because they can't keep up with the mortgage. At the same time, foreclosure rates in these cities are among the highest in the country, and banks are quick to cut prices to get the homes off their books.

"There were a lot of divorces, a lot of single mothers — all they could do is refinance their house or put it on the market and let it go cheap," says Jerry Urich of Century 21 Home Team Realty in Danville.

more...

[ozymandius]

6. Wal-Mart posts 1st profit fall in decade

Wal-Mart Stores Inc. posted its first profit decline in a decade Tuesday as the world's largest retailer paid a hefty price for closing its loss-making German stores while high energy prices hit its sales and costs at home.

Chief Executive Lee Scott said sales were disappointing at Wal-Mart's U.S. stores, its largest division. Customers were making fewer shopping trips to save gas, while Wal-Mart's own bills for fuel and utilities were up, he said.

"In the United States, customers tell us they are most concerned about gas prices," Scott said in a prerecorded message. "This has been consistent every month this quarter."

-cut-

"The quality of the quarter itself is kind of moderate. It does not look nearly as good as what we've seen from some of their peers as far as earnings and sales growth," said David Heupel, a portfolio manager for Minneapolis-based Thrivent Investment Management, with $67.5 billion in assets. The large-cap growth fund within Thrivent that Heupel manages sold its Wal-Mart shares this year.

http://news.yahoo.com/s/ap/20060816/ap_on_bi_ge/earns_wal_mart_17

[ozymandius]

7. Homebuilder optimism sinks

NEW YORK (Reuters) - U.S. homebuilder optimism sank for a seventh consecutive month in August to its lowest level in 15 years as potential buyers pulled back amid rising uncertainty in the housing market, an industry trade group survey showed on Tuesday.

The National Association of Home Builders said its index of sentiment among homebuilders plunged 7 points to 32 -- its lowest since February 1991 -- and less than half the level of a year ago. The result was below the 38 median forecast of 30 economists polled by Reuters.

The NAHB said its gauge of traffic of prospective buyers also fell, by 6 points to 21, suggesting a steeper decline in the number of people visiting model home units over the last month than in any other period this year.

An index reading below 50 means more builders view sales conditions as poor rather than good.

http://news.yahoo.com/s/nm/20060815/bs_nm/economy_housing_nahb_dc_4

[ozymandius]

8. Auto Parts Supplier Reports a Big Loss

DETROIT, Aug. 15 (AP) — The Delphi Corporation, the auto parts supplier, said Tuesday that it lost $2.6 billion in the first half of 2006, mostly as a result of employee buyout and early retirement packages that are part of the company’s bankruptcy reorganization.

The loss was more than three times the $741 million that Delphi lost in the first half of 2005.

The company, which filed for Chapter 11 bankruptcy protection in October, said revenue increased slightly, to $14 billion, from $13.9 billion last year.

Delphi, a former arm of General Motors, reported progress in diversifying its sales, with non-G.M. revenue increasing 9 percent, to $7.7 billion, compared with $7.1 billion in the first half of 2005.

http://www.nytimes.com/2006/08/16/business/16delphi.html?_r=1&oref=slogin

[ozymandius]

9. I must run folks.

Have a wonderful day!

Ozy :hi:

[AnneD]

34. Morning Marketeers,

:donut: Well, actually I can buy everyone an adult beverage now:beer: Hey Ozy, one out one in. I had an in service first thing this am so I am just now coming in.

The big news is the circus in in town...not Ringling Brothers...the GOP Immigration Hearing committee meeting. This is just so divisive. I am not happy with all the illegal aliens here BUT Congress hasn't been doing their job and funding Immigration and Naturalization dept. It is a mess to come here legally, our guest worker program needs to be tweaked AND most importantly, companies that hire illegals should be fined penalties (that would make INS a money generator and protect our wages. Fences and walls won't work and neither will criminalization. You need a guest worker program that is user friendly, speedier citizenship (I know folks that have had all their paperwork in for 7yrs and still no green card), and penalties that REALLY discourage companies from breaking the law. well enough of my soap box. It is just that we have been dealing with this problem for years and the gov have washed their hands of it, and worse yet, tried to force our police to become INS agents (our then police chief and mayor told them to bugger off-politely of course). So after years of ignoring the problem...it is a homeland security issue. We haven't seen any funding to help. Well, I am ready for incoming :hide:

Happy hunting and watch out for the bears.

[UpInArms]

13. daily dollar watch

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

Last trade 84.91 Change -0.28 (-0.33%)

Instant Insight - TIC Data Not Completely Dollar Bullish

http://www.dailyfx.com/story/calendar/key_events/Instant_Insight___TIC_Data_1155648148468.html

Net foreign purchases of US Securities increased by $75.1 billion in the month of June, which was much stronger than the market's forecast for a $65.0 billion increased. However the strong TIC data not completely bullish for the US dollar. Foreign central banks were net sellers of US Treasuries, confirming the overall trend of reserve diversification. Aside from the UK, no one was a major buyer. Japan, the world's largest holder of US Treasuries actually sold Treasuries for the fourth month in six. The high yield of US fixed income investments is the only thing that is keeping foreign investors here. Private demand is driving the boost with as June marked the strongest level of private inflows since November. The weakness of the equity markets in June led to an overall exodus of stocks into bonds. Although this is enough to appease those concerned about the trade deficit, it is only pushing back the concern rather than eradicating it.

Tomorrow's Economic Releases: US CPI Dollar's Main Driver

http://www.dailyfx.com/story/calendar/key_events/Tomorrow_s_Economic_Releases__US_CPI_1155676214657.html

US Consumer Price Index (JUL) (12:30 GMT; 08:30 EST)
(MoM) (YoY)
Consensus: 0.4% 4.2%
Previous: 0.2% 4.3%

Outlook: Consumer prices in the US are expected to advance another 0.4 percent in July, pressuring the Fed’s decision to lay off its steady diet of interest rates at its August 8th meeting. Among the goods putting upward pressure on the basket were gasoline prices, which fell the previous month, rose 10 cents to $2.98 in July amid summer traveling demand. Stripping energy products from the headline figure, core prices are expected to extend their multi-year streak above the Fed’s comfort zone. Higher rents, which make up around 40 percent of the core reading, are being driven up as higher borrowing costs leave many Americans seeking out the rental alternative to high mortgage rates associated with buying. Additionally, a recent report of import prices reported a 0.9 percent increase in the value of goods produced abroad. These factors aside, the Producer Price Index, which is often a leading indicator of the CPI, unexpectedly fell this morning which supports the Fed’s predictions that slowing growth would in turn tame inflation. With tomorrow’s indicator arrives the next piece of the inflationary puzzle that could be a pivotal read for the central bank in determining whether inflation will abate in the normal course of the economy’s fluctuations. If the gauge does not follow the PPI’s suggestions of less cost pass through, the Fed may need to consider another hike before the end of the year, and much of the dovish sentiment surrounding the decision to halt the rate cycle at 17 will likely disappear.

Previous: The US Consumer price index rose by 0.2 percent in June from a prior monthly reading of 0.4 percent. Last month’s inflation was the sixth straight increase in the index, suggesting the Fed faces inflationary pressures even as the economy slows. The core reading was the most threatening, up 2.6 percent from a year earlier, which was the fastest increase since 2002. On a monthly basis, core inflation rose for its fourth consecutive read, a statistic not seen since April of 1995. Key contributors to the gauge were medical care, rent and airfare. For an example in the airline industry, Southwest increased the estimate on what it will pay for jet-fuel and raised fares accordingly. June’s CPI was not enough to keep the Fed going, however, as they decided stay their hand and wait for past policy shifts to catch up to the economy.


US Housing Starts (JUL) (12:30 GMT; 08:30 EST)

Consensus: 1810K
Previous: 1850K

Outlook: July housing starts are expected to have fallen to their lowest level in two years, as demand for new homes continues its striking decline. Rising mortgage rates are suppressing home sales as continued increases in the price level eat away at consumers’ spending power. After watching housing prices rise to staggering levels over the past few years, buyers are finally beginning to hold off on purchases, leaving construction companies with growing inventories of unsold homes. In addition, the National Home Builders Association reported confidence levels fell to fourteen year lows in July, indicating a lack of confidence that the housing market will see an immediate recovery. As the housing market cools and the Federal Reserve flirts with the possibility of more rate hikes this year, housing starts are now predicted to decline by more than 2 percent from June’s, already low number.

Previous: Housing starts fell by 5.3 percent in June as rising interest rates continued to depress the US housing market. With the Federal Reserve raising the overnight interest rates to a four-year high and the consumer price level continuing to rise, potential homeowners have little reason to enter the market at this juncture. Sales of both new and existing homes fell from the month before as consumers waited for slower demand to begin to lower housing prices. With consumers adopting a “wait-and-see” attitude toward home ownership, and builders continuing to lower profit estimates for the year, housing starts are likely to extend their six-month slide.


US Industrial Production (JUL) (13:15 GMT; 09:15 EST)

Consensus: 0.6%
Previous: 0.8%

Outlook: Industrial production in the US, which accounts for output from the nation’s factories, mines and utilities, is expected to report growth for the sixth consecutive month. June’s jump in durable goods has left companies with more confidence, as indicated in jumps in Richmond’s Fed Manufacturing Index the Chicago PMI for July. ISM Manufacturing also unexpectedly jumped to 54.7 from a previous 53.8, fueled by strong sales. A critical pillar in industrial production rests with non-farm productivity, which rose more than expected in the second quarter, to offset gains in wages. Nevertheless risk to the downside for industry in the world’s largest economy is present, as higher interest rates are taking their toll on economic growth and activity.

Previous: Following a 0.1 percent increase in May, industrial production bested expectations of 0.5 in June, gaining 0.8 percent. Much of the gain was attributed to the weather, as the second-hottest June in over a century called for increased electricity output. Business equipment also rebounded, up 0.7 percent with more orders on semiconductors and communications equipment, a sign of confidence among managers. In fact, manufacturers in the New York area reporting higher optimism for the next six months as orders, shipment and employment increased. Production in autos and auto parts also rose 4.2 percent after a 0.8 percent decline. June’s reading, along with a rise in capacity utilization, added speculation that the Fed would need to continue on its tightening cycle.

...more...

[54anickel]

29. Yuan Gains Most Since Peg Ends as China Allows It to Track Asia

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1ygFxjRUuYg&refer=worldwide_news

Aug. 16 (Bloomberg) -- China permitted the biggest gain in the yuan since ending a peg to the dollar in July last year, a day after allowing the largest decline, suggesting the central bank is easing controls over the exchange rate.

The yuan rose as much as 0.24 percent against the dollar today, as 13 of 15 leading Asian currencies climbed. The central bank on Aug. 9 said it would allow more ``flexibility'' in the new system, which allows the yuan to float with reference to currencies of leading trading partners.

Allowing larger swings would help ease tensions with the U.S. and Europe as long as it results in a stronger yuan, which has advanced only 1.5 percent against the dollar since the currencies were de-linked. Lawmakers in the U.S. blame exchange- rate manipulation for a flood of cheap Chinese imports, lost manufacturing jobs and the nation's record trade deficit.

``China is indeed loosening control and allowing the yuan to move in line with other currencies,'' said Hideki Hayashi, a foreign-exchange strategist in Tokyo at Shinko Securities Co., a unit of Japan's second-largest lender by assets. ``The yuan will gradually strengthen.''

snip>

Coin Flip?

The central bank says it sets the rate each morning by averaging prices from lenders it appointed as market makers, as well as using a basket of currencies to manage the currency.

``There's some in the market who say China just flips a coin and some who say they use a trade-weighted basket to set it, but either way it's very unclear,'' said David Mann, a currency strategist at Standard Chartered Bank Plc in Hong Kong. ``There certainly seem to be bigger moves at the moment.''

more...

[Tace]

14. MOGAMBO GURU: America Being Looted By The Federal Reserve

Richard Daughty, the angriest guy in economics -- World News Trust

snip

Still, there was not a sound! Instinctively, my hand slowly started inching towards the bazooka I keep in my shoulder holster, which I admit is not only very heavy and unwieldy, but stupid, too, although it is somehow very comforting in a "raw firepower" kind of way. My fingers close around the cold steel of the trigger as I say, "Do you comprehend, even remotely, the staggering enormity of America being looted by the Federal Reserve, which is just a private bank owned by a shadowy, semi-anonymous group of people that includes a lot of foreigners, all for the obscenely profitable benefit of these selfsame mysterious foreign strangers? Do you?" I viciously snarl.

Suddenly, from behind the curio cabinet, my daughter springs out, puts her little fists on her hips, and with a booming voice says, "I, the one known as Daughter-Possessed-By-Demons, know!" I watch, dumbfounded, as she bellows, "This means that we will soon be taxing ourselves more, and imposing roaring inflation on ourselves (which is, actually, just another gigantic tax, in effect) by letting the Federal Reserve create the money to finance the government's increasing deficit-spending, which is supposed to 'offset' the government's increasing debt without resorting to the alternative of levying taxes. And this increased inflation in the money supply will be followed by horrific inflation in prices. Ain't that right, mighty magnificent Mogambo moron (MMMM)?"

I am stunned! She's exactly right! I naturally suspect a trick of some kind. So, cautiously, I test her by leaning forward, looking her right in the eye, and open-endedly asking, "And…?" She immediately answers, "To support rich foreigners who can't even speak English without some thick, stupid accent, who drive foreign cars, who marry other foreigners, and who actually live in foreign countries, too! And then, while they are living it up, having a wonderful time spending our American money and eating weird, exotic foods like, oh, I dunno, filet of marmot earlobes or something, we Americans will suffer from crippling inflation in prices as the dollar is devalued to accommodate them in their gluttony!"

For some reason, the shock of hearing my own kid saying this, and all this talk about devaluing the dollar, makes me suddenly recall the essay entitled, "Vox Populi, Vox Suckers," by Gary North of LewRockwell.com, who writes, "The history of the demise of the dollar is the history of the replacement of a gold coin standard with the Federal Reserve System. The decline began in 1914." I remember thinking to myself, "Huh? Why am I remembering this, and why right now?" Then I see the wisdom of it when I further remembered that he went on to write, "But it has come in waves of depreciation. We are on the cusp of the dollar's next great decline."

I am kind of freaking out here about what the kid and Dr. North are saying about this coming decline in the dollar, and so I was overpowered when she, again correctly, says, "And don't even get me started on Robert 'Elliott Wave' Prechter and that whole Socionomics thing, Pops, where society mirrors the economy, which both break down into a post-Apocalyptic nightmare when the buying power of the currency is destroyed!" Suddenly, the room was silent. I looked at her. She looked at me. Then she said, softly, "We're freaking doomed!"

more

http://worldnewstrust.org/modules/AMS/article.php?storyid=4021

[UpInArms]

15. The rich are worried; should you be?

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B3E03FF6C%2D503C%2D46B2%2D8584%2D66C151F08EF7%7D&symbol=

SANTA MONICA, Calif. (MarketWatch) -- Wealthy investors say this is no time to be buying a big screen TV, or to invest in the stock market. Somehow those two things are related in their minds to a poor economy.

The investment outlook by affluent investors, those with $100,000 or more in financial assets, is at an all-time low, according to Smith Barney. The Citigroup-owned brokerage says these investors have turned increasingly sour this year, as their attitudes about the investment climate have gone negative.

<snip>

Among those polled, 58% believe that the economy is in a slowdown, 12% say we're in a recession and 7% see the economy as going through an expansion.

<snip>

Smith Barney doesn't report whom these investors blame for their poor returns, so we can only imagine. However, the survey does say that most wealthy investors (77%) are dissatisfied with Congress' managing of the economy. And almost as many (61%) are dissatisfied with President Bush's handling of the economy.

The type of people surveyed, Smith Barney says, represents 25% of all U.S. households. That's a big number and what could be a giant prognosticator of the economic outlook for the U.S. Please note: Smith Barney says the poll was conducted among 574 investors.

...more...

[54anickel]

21. Should have warned me - cleaning the coffee off my monitor now!

You snipped out the spit-take lines! :spray:

So, you are dumb if you're glum? Is that the new RW talking point? :crazy:

[UpInArms]

16. Stocks may face a dreary decade ahead - MarketWatch

http://www.marketwatch.com/News/Story/Story.aspx?guid={98ABCE56-AA18-48D6-8888-464E5B32334A}&siteId=mktw

NEW YORK (MarketWatch) -- Every year or so, we chart the progress of the stock market in terms of its long-run "total return" trend. That's adding in capital gains and dividends, and adjusting for inflation.

Our charts are based on the work of Professor Jeremy Siegel of the University of Pennsylvania's Wharton School, author of the classic book, "Stocks For the Long-Run." See Siegel's Web site jeremysiegel.com for more information. (He doesn't always agree with our conclusions!)

<snip>

This may sound worrying. But of course the major market indexes we're used to watching don't literally have to fall 40%. Because the underlying total return trend rises at some 7% a year, the indexes can just move sideways.

How long? Well, adjusting just for dividends, if the Dow Jones Industrial Average (INDU : 11,230.26, +132.39, +1.2% ) moved sideways until 2019, that would be the equivalent of Siegel's broad, total-return measure of stocks getting 40% below trend.

That's a 19-year stagnation in total, quite comparable to the Dow 16-year stagnation after 1966.

On the bright side, if you assume inflation will be equal to the Dow's dividend yield, the stagnation will end in 2014. Whoopee!

...more...

[UpInArms]

18. pre-opening blather

09:16 am : S&P futures vs fair value: +4.3. Nasdaq futures vs fair value: +13.0. Stage remains set for the cash market to open higher as investors sift through the day's last piece of economic news. July Industrial Production rose 0.4% (consensus 0.6%) while Capacity Utilization checked in at 82.4% (consensus 82.7%), but investors remain more focused on today's dovish core-CPI and housing data to dictate early trading as futures indications have barely budged since the last update.

09:00 am : S&P futures vs fair value: +4.5. Nasdaq futures vs fair value: +12.8. Still shaping up to be another strong open for the indices as the futures market continues to trade at its best levels of the morning. More optimism on the inflation front, providing further proof that another rate hike may not be necessary, is again restoring investor confidence in both stocks and bonds. To wit, the yield on the 10-year note has fallen 4 basis points following the benign reading on core-CPI and is back at four-month lows (4.88%), which should provide a floor of support for rate-sensitive areas like Financials, the most influential S&P sector, as well as growth companies (e.g. Technology) dependent on borrowing costs.

08:33 am : S&P futures vs fair value: +3.0. Nasdaq futures vs fair value: +8.2. Futures indications get a big boost following another tame read on inflation, now suggesting stocks may extend their winning streak to three days. Total CPI rose 0.4% in July (consensus 0.4%) while the closely watched core rate (ex-food and energy) rose a less than expected 0.2% (consensus 0.3%), reflective of an easing in inflation at the consumer level which further strengthens the credibility of a Bernanke-led Fed which may again forgo a rate hike when it convenes in a few weeks. Separately, July Housing Starts fell 2.5% to 1.795 mln units (consensus 1.81 mln) while Building Permits fell 1.747 mln units (consensus 1.84 mln). Bonds, which were up slightly ahead of the data, have strengthened as the 10-yr note is now up 9 ticks to yield 4.89%.

08:00 am : S&P futures vs fair value: -2.2. Nasdaq futures vs fair value: -1.5. Futures versus fair value are signaling a lower start for stocks. Aside from an incentive to lock in some profits after two days of gains, especially following yesterday's broad-based rally, investors are also showing some reserve ahead of the July CPI report, which will set a more definitive tone for trading when it's released alongside Housing Starts and Building Permits at 8:30 ET. Should core CPI come in below an expected 0.3% rise for the first time in five months, and lend some confirmation to yesterday's favorable PPI data, easing inflation pressures at the consumer level as well should get buying efforts back on track.

[UpInArms]

19. Treasuries rise on contained July inflation data

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-08-16T131143Z_01_N16330938_RTRIDST_0_MARKETS-BONDS-UPDATE-1.XML

NEW YORK, Aug 16 (Reuters) - U.S. Treasury debt prices extended early gains on Wednesday after the July consumer price inflation data report suggested the Federal Reserve may not have to raise interest rates at a meeting next month.

Core consumer prices, an inflation gauge that strips out food and energy costs, rose 0.2 percent in July, ending a four-month string of 0.3 percent monthly increases. For details click on .

Including food and energy prices, consumer prices rose 0.4 percent following June's 0.2 percent rise.

"This will support (Fed Chairman Ben) Bernanke's view that inflation is about to taper off and will solidify the idea that the Fed is really on the sidelines now," said Rick Egelton, chief economist at BMO Financial Group in Toronto.

Fed funds futures were pointing to a 24 percent chance of a interest rate rise next month, down from a 30 percent chance prior to the release of the consumer price data.

...more...

[54anickel]

22. All Hail Ben!!! When do they start with the Goldilocks talk of just the

right amount of growth slowdown to tame inflation without a recession? We're headed for a soft landing. Cheers for Ben! Ruh-rah! Hurrah!

I'm still betting a hands off approach until after the November elections. They'll fiddle with the inflation numbers to get through it. Funny how the numbers suddenly start to support the Fed's decision. Quite a turn around in one week.

Here's one from August 9th - yeah I know that was then, things are different now. :eyes:


http://www.iht.com/articles/2006/08/09/business/fed.php
Will Fed manage a 'soft landing' again?

The suspension of the Federal Reserve's two-year campaign of raising interest rates is temporary, analysts said, casting doubt on the hope that a modest economic slowdown can subdue inflation on its own.

After 17 consecutive increases at each meeting since June 2004, the central bank voted Tuesday to hold its benchmark interest rate steady at 5.25 percent. Policymakers suggested that they wanted more time to see where the U.S. economy is headed before deciding if more increases are necessary.

The policy shift amounts to a bet by the Federal Reserve's new chairman, Ben Bernanke, on one of the most elusive goals in monetary policy - a "soft landing," in which the economy slows just enough to cool off spending and ease inflationary pressures but not enough to cause a big jump in unemployment.

But experts say inflation data could prompt the Fed to begin raising rates again soon, despite the risk that aggressive credit tightening could tip the economy into recession. In practice, the Fed has effectively engineered only one other "soft landing" in history - in 1994 and 1995, under the chairmanship of Alan Greenspan.

Conditions then were in many ways more benign than they are today, however. Inflation was heading down, not up; the federal budget was moving toward lower rather than higher deficits; energy prices were erratic, but far lower than they are now.

more...

[Demeter]

20. Local Gasoline Down 28 Cents in a Week

Has the world come to an end? Things must be getting REALLY bad. When do you think they will bother to let us know officially?

Since Walmart profits dropped last quarter, can we call it a Depression, now?

[54anickel]

25. What's Driving Differences in Gas Prices?

http://www.washingtonpost.com/wp-dyn/content/article/2006/08/15/AR2006081501061.html

Frustrated motorists looking for low gasoline prices in the Washington area often know the cheapest spots. What is less clear is why prices vary so much neighborhood to neighborhood and why they have risen so much faster in some places than others.

Consider the range across the region, which has among the highest gas prices in the country.

In the District, the average price of a gallon of regular gasoline last week was $3.22. In Virginia, the average was $2.95, although motorists in much of Fairfax or Arlington counties would have been lucky to pay less than $3. In Maryland, a Potomac service station posted a price of $3.49, while one on the Eastern Shore charged $2.75. Nationally, the average price of regular gasoline fell to less than $3 for the first time since mid-July, to $2.997 a gallon, according to AAA.

Often, the distance between locations with different prices is not so great. Prices can range by as much as 25 cents a gallon between gas stations on opposite ends of a city, and often those prices vary from block to block within the same neighborhoods.

So what gives?

more..... Location, location, location Zone pricing - just like real estate! BASTARDS!!!

[Trajan]

27. FYI ....

I have been buying gas in Portland for $2.75 per gallon ......

Shhhhhhhh .... last time a national news story mention Oregon's relatively 'inexpensive' gas prices, they shot up nearly a dollar .....

They HATE us for OUR freedom ....

[Demeter]

31. I Think Our Good Governor Jennifer Granholm Mentioned Gas Gouging

She made her election from prosecuting price gouging as attorney general in Michigan.

And our economy sucks big time. Even so the rents in Ann Arbor make for higher prices than down the road in Ypsi.

[Roland99]

38. Down $0.57 in the southern parts of the city here in 2 weeks' time

Filled up today on the way home for $2.62.

[54anickel]

24. Pension changes: What you need to know

http://seattletimes.nwsource.com/html/businesstechnology/2003201998_retirement16.html

DALLAS — The pension bill that President Bush is expected to sign into law Thursday represents the most sweeping changes to the country's pension laws in more than 30 years.

What does it mean to you? Basically, it's another step toward putting more responsibility on you to save for your retirement, rather than government and corporations taking care of you in your old age.

Here are the key changes:

• If you are a low- or middle-income earner, the savers credit is being made permanent. It had been set to expire at the end of this year. It gives qualifying taxpayers a credit — worth up to $2,000 — for contributions to retirement savings plans.

• If you work at a company that offers a 401(k) plan, your employer may automatically enroll you beginning in 2008. That provision of the law is intended to encourage people to save.

"That's a good thing," said Alicia Munnell, director of the Center for Retirement Research at Boston College. "It will make it easier to have automatic enrollment, and it will lead to further participation" in 401(k) plans.

• If your company offers a pension, expect the terms to change. That could mean your company may freeze your plan, thanks to the legislation's tougher funding requirements. Or your pension could be converted to what's known as a cash-balance plan, which has different implications for your retirement.

more...

That automatic enrollment is a big bonus for HCEs (highly compensated employees). Their maximum contributions are limited by overall 401K participation. I wonder at what percentage these auto enrollments are set up at?

[54anickel]

26. Zell, Zuckerman, REITs Turn to Convertible Debt as Shares Surge

http://www.bloomberg.com/apps/news?pid=20601103&sid=aYj.UwLjnrMA&refer=us

Aug. 16 (Bloomberg) -- Developers led by Sam Zell's Equity Office Properties Trust and Mortimer Zuckerman's Boston Properties Inc. are using record-high stock prices to lower their borrowing costs.

Real estate investment trusts this year have sold more than $4.1 billion of bonds convertible into stock, almost triple the amount issued in all of 2005. Six of the eight offerings from the REITs, whose properties range from strip malls to skyscrapers, have been sold in the past two months.

REITs are selling the notes at interest rates almost 2 percentage points below traditional fixed-rate debt. The surge in shares has made investors more optimistic the securities will be eligible to be exchanged for stock. Buyers accept lower yields in return for that option.

``All the planets came into alignment about nine months ago,'' said Edward Lange, chief financial officer at San Francisco-based apartment owner BRE Properties Inc., which sold $460 million of convertible bonds on Aug. 10. ``We'll have immediate interest savings.''

Proceeds of the sale of 4.125 percent securities, which was increased from $350 million, will be used to repay a 5.95 percent note due in 2007, Lange said. In return for the lower coupon, investors get the option of exchanging a $1,000 BRE bond for the cash equivalent of 14 shares. That would make the conversion profitable at $71.20 a share, 27 percent more than the share price on Aug. 10.

more...

[54anickel]

28. 11:36 numbers and yada

Dow 11,274.37 +44.11 (+0.39%)
Nasdaq 2,126.77 +11.76 (+0.56%)
S&P 500 1,290.44 +4.86 (+0.38%)
10-yr Bond 4.871 -0.06 (-1.22%)
30-yr Bond 5.00 -0.047 (-0.93%)
NYSE Volume 930,614,000
Nasdaq Volume 771,349,000

11:30 am : Indices are off their recent highs but continue to put forth a respectable advance, especially after such a strong rally yesterday. The Dow and S&P 500 are at their best levels in more than 2 months while the Nasdaq, getting a big lift from continued momentum in chip stocks, is at a one-month high. The PHLX Semiconductor Sector Index is now up 2.2% and at its best levels of the day; 16 of the index's 19 components are trading higher while Applied Materials (AMAT 15.63 -0.06), which was off as much as 2.3%, is now down only 0.4%.DJ30 +41.47 NASDAQ +11.85 SOX +2.2% SP500 +4.63 NASDAQ Dec/Adv/Vol 1069/1711/744 mln NYSE Dec/Adv/Vol 714/2343/542 mln

11:00 am : Stocks regain some momentum within the last 30 minutes as oil prices spike to session lows (-1.0%). Crude oil futures slipping below Monday's low of $72.60 a barrel following the EIA's weekly inventory report and down for a third straight day has provided an additional sense of comfort on the inflation front, especially since the Fed recently cited higher energy prices as putting upward pressure on overall inflation. The Energy sector's ability to so far shrug off oil's pullback is also worth noting as its 0.5% gain provides some added leadership. DJ30 +55.07 NASDAQ +14.08 SP500 +5.78 XOI +0.3% NASDAQ Dec/Adv/Vol 1110/1593/606 mln NYSE Dec/Adv/Vol 819/2180/430 mln

10:30 am : Market continues to hold onto modest gains but are now trading near session lows. The Nasdaq's early advance has been more than halved as Applied Materials (AMAT 15.44 -0.25) expressing a note of caution about the near-term picture and issuing Q4 EPS guidance below analysts' forecasts continues to weigh on the Semiconductor Equipment group and prevent more convincing follow-through in the influential Technology sector. The absence of leadership in Consumer Staples, as two of its industry groups -- Agricultural Products (-1.5%) and Personal Products (-1.2%) -- are turning in today's poorest performances, is also stalling a more aggressive market push to the upside.DJ30 +27.22 NASDAQ +5.59 SP500 +2.95 NASDAQ Dec/Adv/Vol 1032/1565/448 mln NYSE Dec/Adv/Vol 767/2173/312 mln

10:00 am : Major averages are still on the offensive as eight out of 10 sectors remain positive. Providing the bulk of leadership are Financials, as plunging bond yields continue to make rate-sensitive banks and brokers more attractive. On the heels of their biggest gains in nearly a month, Treasuries rallying again following more encouraging inflation data have pushed the yield on the 10-year note (+14/32) to its lowest level in four months (4.87%). The latter have also helped homebuilders catch a bid despite July housing starts falling 2.5% to a 1.795 mln annual rate, which is down 21% from the peak in January of this year, and building permits falling 6.5% to their lowest level in four years. Industrials are also acting as a source of early support as oil prices slipping below $73 a barrel ahead of the Energy Dept.'s weekly inventories data (10:30 ET) continue to renew interest in beaten-down transport stocks. The Dow Jones Transportation Average is still trading 14% below its record high of 5038 on May 10th. DJ30 +35.94 DJTA +1.0% NASDAQ +8.12 SP500 +3.70 NASDAQ Dec/Adv/Vol 738/1672/294 mln NYSE Dec/Adv/Vol 505/2264/190 mln

09:40 am : Stocks get off to another solid start following a second straight read on inflation that suggests the economy is on track for the much-desired soft landing. Total CPI matched economists' consensus estimate of 0.4% but the all-important core component rose a less than expected 0.2%, further easing the worst of inflation fears. It is worth noting though that, while the tame CPI data lowers expectations of a Fed hike next month, as fed funds futures are now pricing in only an 18% chance of a rate increase on September 20, the current year-over-year increase in the core rate notching slightly higher to 2.7% -- the highest level since Dec. 2001 and still above the Fed's target of 1.75% to 2% -- does not completely rule out more tightening from the Fed, especially with another round of inflation data scheduled before the next FOMC meeting.DJ30 +36.52 NASDAQ +10.52 SP500 +4.57 NASDAQ Vol 126 mln NYSE Vol 64 mln

[54anickel]

30. War and terror and the whole damn thing!

http://www.321gold.com/editorials/chapman_d/chapman_d_081606.html

They say the first casualty of war is truth. If that is the case then since the so-called War on Terror got underway following the events of 9/11 we have undoubtedly been fed considerable propaganda. Trouble is it is difficult to tell the lies from the truth and most people accept whatever they are told because it is the nature of people to want to believe their government and accept what they are being told as the truth. In other words they want to accept what they are being told because it is more distressing to discover that it may have been a lie.

However, we now know that numerous truths we were told were indeed lies. The most damning of course was the invasion of Iraq where it was revealed that the reasons for the invasion were a lie. There were no weapons of mass destruction; there were no direct ties between Al Qaeda and the Iraqi government. The war, as was revealed in the leaked Downing Street memo, was based on the "fixing" of information around the policy.

But starting wars based on lies is not new. The Spanish American War of 1898 was started based on an alleged mining in Havana Harbour of the USS Maine by Spain. It was later revealed that a coal bin explosion that was clearly reported by the Captain from the outset sank it. By the end of the war the US had taken control of Cuba, Puerto Rico, the Philippines and numerous islands in the Pacific, which of course were not relinquished. Hitler used it to great effect with first the burning of the Reichstag that was blamed on communists, Hitler used it as an excuse to cement his grip on power and begin an assault on numerous citizens. Later they justified the invasion of Poland to start WW2 on the basis that Poland had attacked first. Even Pearl Harbour was later revealed to have been a set up to draw the Japanese in the Pacific to facilitate the US's entry into WW2. The Gulf of Tonkin attack was based on a faulty report that was exaggerated and used to escalate the Vietnam War.

Which brings us to the most recent war between Israel and Hezbollah/Lebanon. The mantra was that Hezbollah started the war on July 12 by kidnapping two Israeli soldiers and the killing of a number of others. While it may have been a trigger for the latest Israeli attack it is merely part of a 60 year Arab-Israeli war. Israel occupied parts of Lebanon for roughly 18 years starting in 1982. It was Hezbollah guerrilla fighters that finally forced the withdrawal of Israel in 2000. Since then according to United Nations reports there has been almost daily incursions including kidnappings and targeted assassinations over the United Nations monitored blue line by Israel. And of course there has also been numerous incursions or retaliations by Hezbollah. The attack on July 12 was merely one in a string of retaliatory attacks. So what was different this time?

more...

[54anickel]

32. Israeli Gears, Why the attack on Hezbollah backfired on Israel

http://www.thepeoplesvoice.org/cgi-bin/blogs/voices.php/2006/08/15/israeli_gears_why_the_attack_on_hezbolla

snip>

It’s been suggested in many quarters that the US, in alliance with Israel, has adopted a policy of sowing as much chaos and dislocation as possible in the middle east in order to increase their hegemony over the region. For Israel, it would be survival. For the US, it would be oil, and for some god-struck types, a helping hand to God, who apparently needs severe unrest in the Middle East before he can shut the universe down and start a new project. Certainly that would explain the seeming incompetence of the American occupations of Iraq and Afghanistan, where the Americans seemed to go out of their way to antagonize the subject peoples.

It used to be that Resistances and guerrilla movements were ineffective and ineffectual. But that was before cheap, reliable communication, and portable weaponry of incredible power. Now a resistance of several hundred so equipped can stop a first-world nation in its tracks.

Political hegemony in the Middle East would doubtlessly work to the advantage of both the US and Israel. But the notion of imposing it through military might is an obsolete approach.

Maybe it’s time to consider the notion that if the Palestinians, the Lebanese, the Syrians and others have enough of an economy to breed general satisfaction, they won’t need shoulder-mounted rocket launchers.

more...

[54anickel]

33. Backsliding from conversion

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

Easy money can do a lot of things and one of them is giving people a burning desire to purchase a condominium, even folks who previously failed to show a flicker of interest in owning the innards of a building, including those who were happily renting an apartment and spending their Saturdays at Starbucks instead of Home Depot.

In the chart below, we see how the Fed’s No Renter Left Behind policy boosted the demand for condos in the last several years. For the record, existing condo sales increased 44% in just six years. And condo prices rose and kept rising, in part because new condo construction drove up the cost of materials, and because everyone wanted to participate in the American dream of owning their own interior living space. By June, prices of existing condos had jumped 87% in six years.

Easy money also gives developers the burning desire to sell condos, and lots of them. Just ask Ivana Trump whose knowledge of people who know about real estate is legendary. Ivana and her developers were all set to build a luxury condo tower billed as the tallest building in Vegas. Their estimates put their sales of inner space at more than $1 billion, making it the most expensive building ever sold, according to the AP’s Kathleen Hennessey. But even with the full support of the Federal Reserve and the real estate community’s vow to avoid the word “bubble,” only seldom say “slowdown” and never, ever, say “crash,” Ivana and friends are changing their minds about selling air in the desert.

And she’s not alone. According to Joe Gose of Investor’s Business Daily, back in 2004 developers descended upon Vegas with the zeal of Congressmen on a golf junket. They planned to construct 90,000 luxury condos even though the entire Vegas condo market totaled 2,000 units at the time. Apparently, plans to increase the Las Vegas condo market by a factor of 45 never registered as bubbly at the Fed. Nevertheless, as construction got underway, the cost of building a condo jumped 30-50%, which required higher prices for developers to maintain their margins. Prices rose and rose even as supply increased. Eventually, orders slowed and after some refiguring, developers started cancelling projects, resulting in loads of future real estate commissions being cancelled along with them.

Developers are jumping off the condo bandwagon elsewhere too. One luxury condo builder in Florida told the Associated Press that new orders fell 84% in the second quarter.

more...

[54anickel]

35. Closing numbers & yada for the record

Dow 11,327.12 +96.86 (+0.86%)
Nasdaq 2,149.54 +34.53 (+1.63%)
S&P 500 1,295.43 +9.85 (+0.77%)
10-yr Bond 4.871 -0.06 (-1.22%)
30-yr Bond 5.001 -0.046 (-0.91%)
NYSE Volume 2,554,570,000
Nasdaq Volume 2,160,457,000

4:20 pm : Stocks extended their winning streak to three days after a second consecutive read on inflation provided exactly what the market was hoping for -- further evidence that the economy is on track for the much-desired soft landing. Falling bond yields and lower oil prices also helped the blue chip averages close at their best levels in three months while the Nasdaq's 4.4% surge this week alone marked its best three-day advance since August 2004.

Before the bell, the Labor Dept. reported that the closely-watched core CPI rose 0.2% following four straight months of increases on the order of 0.3%, further easing the worst of inflation fears that were alleviated at the wholesale level yesterday in an encouraging PPI report. It is worth noting, though, that while the tame CPI data lowers expectations of a Fed hike next month, as fed funds futures now price in less than a 20% chance of a rate increase on September 20, the current year-over-year increase in the core rate edging slightly higher to 2.7% -- the highest level since Dec. 2001 and still above the Fed's target of 1.75% to 2% -- does not completely rule out more tightening from the Fed, especially with another round of inflation data scheduled before the next FOMC meeting.

Providing further proof that rising interest rates have taken some steam out of the economy, specifically the overheated housing market, was a 2.5% decline in July housing starts to a 1.795 mln annual rate, which is down 21% from the peak in January. Building permits fell 6.5% to their lowest level in four years. As a result, Treasuries built on their biggest gains in nearly a month, pushing the yield on the 10-year note (+16/32) to its lowest level in four months (4.86%) and providing a floor of support for rate-sensitive areas like banks and brokers, which helped Financials provide some respectable leadership.

With the Fed recently citing higher energy prices as putting upward pressure on overall inflation, oil prices closing lower for a third straight day provided some added relief, especially since last week's dismal performance was spurred in part by oil prices hitting record levels. Crude oil futures plunged 1.8% and closed below $72 a barrel -- a key technical level -- amid easing geopolitical concerns, weakening demand for gasoline heading into the end of the summer driving season and after OPEC cut its 2006 oil demand forecast by 80,000 bpd to 1.3 mln barrels.

Thus, ongoing consolidation in oil provided another catalyst for investors to lock in more of the Energy sector's leading year-to-date surge (16.6%) and rotate into underperforming areas like Industrials, Technology and Consumer Discretionary. Plummeting oil prices continued to renew enthusiasm for the struggling Dow Jones Transportation Average which, along with July Industrial Production at record levels, helped the Industrials sector turn in one of the day's best performances.

Also surging at least 2.1% was Technology as short sellers, thinking everything from semiconductors and software to hardware and networking had further to fall, continued to run for cover. While chip stocks posted the most impressive gain, as evidenced by the PHLX Semiconductor Sector Index soaring 4.3%, the AMEX Computer Hardware Index (+2.8%) climbing back into positive territory was also noteworthy.

Hewlett-Packard (HPQ 34.47 +0.48) hit an intraday 52-week high and Network Appliance (NTAP 32.34 +0.64) surged 2% ahead of their earnings reports after the close. Qualcomm (QCOM 37.63 +2.18) being added to the Focus List at Merrill Lynch also helped offset a cautious Q4 outlook from Applied Materials (AMAT 15.73 +0.04) and kept bargain hunters interested in beaten-down areas throughout the underperforming Tech sector. BTK +2.7% DJ30 +96.86 DJTA +3.2% DJUA -1.0% DOT +1.7% NASDAQ +34.53 NQ100 +2.3% R2K +1.4% SOX +4.3% SP400 +1.4% SP500 +9.85 XOI -0.8% NASDAQ Dec/Adv/Vol 969/2035/2.13 bln NYSE Dec/Adv/Vol 794/2488/1.60 bln

3:30 pm : Bullish bias remains firmly intact going into the close as the indices extend their reach into positive territory. Even as split industry leadership continues to dictate today's action, strong gains in the five most influential areas -- Financials (+0.7%), Technology (+2.0%), Health Care (+0.8%) and Industrials (+2.2%) -- are easily offsetting declines in areas like Utilities (-0.9%) and Telecom Services (-0.2%) -- two sectors that only combine to account for about 6.7% of the weighting on the S&P 500. Energy, albeit pacing the way lower, is consolidating some of its 16.6% year-to-date gain.DJ30 +102.70 NASDAQ +30.66 SP500 +9.65 NASDAQ Dec/Adv/Vol 1060/1897/1.77 bln NYSE Dec/Adv/Vol 808/2447/1.33 bln

3:00 pm : Stocks continue to ramp higher heading into the final hour of trading as plunging oil prices pave the way for buyers. Crude oil futures have recently closed at their lowest level since late June, falling 1.8% to $71.75 a barrel amid easing geopolitical concerns, weakening demand for gasoline heading into the end of the summer driving season and OPEC cutting its 2006 oil demand forecast by 80,000 bpd to 1.3 mln barrels. DJ30 +94.78 NASDAQ +26.21 SP500 +8.61 NASDAQ Dec/Adv/Vol 1068/1886/1.58 bln NYSE Dec/Adv/Vol 829/2399/1.19 bln

2:30 pm : A renewed wave of buying interest now has the major averages touching their best levels of the day. The Nasdaq is now up at least 1.0% intraday for a third straight day, as short sellers thinking tech stocks had further to fall continue to run for cover; Technology is now up 1.7% as is the influential Industrials sector. The Dow, S&P 500 and Nasdaq breaching key resistance levels of 11230, 1283 and 2108, respectively, lend further support behind the willingness of investors to stay on the buying track now that the interest rate outlook has improved.DJ30 +78.61 NASDAQ +22.71 SP500 +6.91 NASDAQ Dec/Adv/Vol 1093/1850/1.44 bln NYSE Dec/Adv/Vol 879/2342/1.09 bln

2:00 pm : Not much has changed since the last update as recent Fed speak does little to sway either the bulls or the bears. Within the last 30 minutes, Dallas Fed president Richard Fisher made some remarks about the economy and interest rate policy; but the absence of anything overly surprising and the fact that he is no longer a Voting Fed President has not provided much of an impetus for sellers to dampen renewed enthusiasm to own equities. DJ30 +61.54 NASDAQ +19.75 SP500 +5.84 NASDAQ Dec/Adv/Vol 1104/1808/1.31 bln NYSE Dec/Adv/Vol 890/2321/984 mln

1:30 pm : Equities continue to hold their own but investors are now juggling another push lower in oil prices against the subsequent absence of leadership from the Energy sector (-1.0%). While crude oil futures now off 1.4% and below $72 a barrel -- the lowest level in four weeks -- do provide additional relief on the inflation front, weakness in everything from Explorers (-1.0%) to Integrated Oil (-1.5%) has removed some of the momentum that has helped keep the broader market in positive territory for much of the year.DJ30 +60.16 NASDAQ +19.19 SP500 +5.36 XOI -0.9% NASDAQ Dec/Adv/Vol 1060/1841/1.21 bln NYSE Dec/Adv/Vol 814/2375/898 mln

1:00 pm : Indices extend their reach to the upside, spearheaded by continued strength throughout Technology. The sector's 1.5% surge now trims its year-to-date loss to around 5%. Hewlett-Packard (HPQ 34.57 +0.58) recently hitting a new 52-week high and Network Appliance (NTAP 32.65 +0.95) surging 3% ahead of their earnings reports tonight are lending some notable support while follow-through momentum in Dell (DELL 22.64 +0.56) and Apple Computer (AAPL 67.88 +1.43), both of which are tacking advances of at least 2% to yesterday's 4% gains, are also helping the AMEX Computer Hardware Index (+2.3%) inch closer to break even for the year. DJ30 +62.20 NASDAQ +20.46 SP500 +6.48 NASDAQ Dec/Adv/Vol 1018/1858/1.09 bln NYSE Dec/Adv/Vol 752/2415/804 mln

12:30 pm : Buyers remain in control of the action as stocks kick off the afternoon session hitting fresh session highs. The Nasdaq (+0.9%) continues to lead the way among the majors, as a sense that everything from semiconductors (+2.5%) to networking (+2.3%), which are both off 11% year to date, remain oversold. Since closing at a two-week low last Friday that left the struggling tech-heavy Composite down 6.7% for the year, the Nasdaq has since recouped 3.8% of its 2006 loss over just 2 1/2 days of trading. DJ30 +60.35 NASDAQ +19.79 SP500 +7.01 NASDAQ Dec/Adv/Vol 1117/1727/978 mln NYSE Dec/Adv/Vol 836/2308/720 mln

12:00 pm : Market is holding onto the bulk of its gains midday after another tame read on inflation suggests the economy is on track for the much-desired soft landing.

Before the bell, the Labor Dept. showed that the closely-watched core CPI rose 0.2%, matching economists' forecasts but checking in below an increase of 0.3% for the first time in five months and further easing the worst of inflation fears that were alleviated at the wholesale level yesterday in the PPI report. Lending additional credibility to a Bernanke-led Fed which may not have to raise rates again this year was further evidence that rising interest rates have taken some steam out of the overheated housing market. July housing starts fell 2.5% to a 1.795 mln annual rate, which is down 21% from the peak in January, while building permits fell 6.5% to their lowest level in four years. To wit, the funds futures market has erased expectations for further rate hikes as the implied policy rates peaking at 5.325% in January translate into just a 30% chance for a rate hike by year's end.

As a result, Treasuries are building on their biggest gains in nearly a month, pushing the yield on the 10-year note (+16/32) to its lowest level in four months (4.86%) and providing a floor of support for rate-sensitive areas like Financials -- the most influential S&P sector, as well as growth companies throughout the struggling tech sector dependent on borrowing costs. Qualcomm (QCOM 36.48 +1.03) being added to the Focus List at Merrill Lynch has also helped offset disappointing guidance from Applied Materials (AMAT 15.55 -0.14), keeping bargain hunters interested in beaten-down areas within Technology. The Industrials sector is also acting as a source of notable support after July Industrial Production checked in at record levels.

Since high energy costs may "have the potential to sustain inflation pressures," according to the Fed, follow-through selling in oil for a third straight day has also helped underpinned a much improved sentiment, especially since last week's dismal performance was spurred in part by oil prices hitting record levels. Crude oil futures have slipped below Monday's low of $72.60 a barrel -- a key technical level, after the EIA showed weakening demand for gasoline last week. Further, the Energy sector's ability to shrug off another pullback in oil is also worth noting as its 0.5% gain provides some added leadership. BTK +1.5% DJ30 +49.39 DJTA +1.4% DJUA -0.3% DOT +0.5% NASDAQ +14.54 NQ100 +1.0% R2K +0.6% SOX +2.2% SP400 +0.8% SP500 +5.47 XOI +0.5% NASDAQ Dec/Adv/Vol 1148/1665/862 mln NYSE Dec/Adv/Vol 784/2309/632 mln

[Demeter]

36. Soft Landing! What a Lovely Delusion

Unemployment in Michigan hits 7% officially=God knows what it REALLY is.

[54anickel]

37. Here's what Ben's got to work with so far, and where he might be headed

[Demeter]

39. The Links Don't Work