STOCK MARKET WATCH, Wednesday December 27

[ozymandius]

Wednesday December 27, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 754 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2192 DAYS
WHERE'S OSAMA BIN-LADEN? 1897 DAYS
DAYS SINCE ENRON COLLAPSE = 1858
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 7
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 December 26, 2006

Dow... 12,407.63 +64.41 (+0.52%)
Nasdaq... 2,413.51 +12.33 (+0.51%)
S&P 500... 1,416.90 +6.14 (+0.44%)
Gold future... 626.90 +4.60 (+0.73%)
30-Year Bond 4.73% -0.03 (-0.63%)
10-Yr Bond... 4.60% -0.02 (-0.45%)






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 Chris Puplava

FALLING OIL PRICES LIFTS MARKET

The markets rose in early morning trading as oil fell due to mild winter conditions, with oil prices falling more than a dollar a barrel. Brent crude fell $1.32 (-2.12%) to $61.10 a barrel while Henry Hub spot natural gas fell below $6/mbtu and was down 3.29%, falling to $5.88/mbtu.

The drop in oil came despite U.N. sanctions against Iran that were approved over the weekend and the announcement by OPEC of plans to reduce output by an additional 500,000 barrels a day beginning in February after a 1.2 million barrels/day previously announced cut. In response to the U.N. sanctions, Iranian nuclear negotiator Ali Larijani said that Iran would begin work at the Natanz nuclear plant on Sunday in response to the sanctions.

The warmer weather and drop in energy prices is spurring consumer spending during the holiday shopping season as the weekly chain store sales numbers are rising since the drop in the week after Thanksgiving.

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

[54anickel]

2. Morning Ozy and all. I can hear the chants on Wall Street this week -

Twelve-five! Twelve-five!!!

Futures are bright and shiny again this morning too.

[ozymandius]

5. Manufacturing is strong at this time of year.

Traders, brokers and bankers get to use other people's money to manufacture their year-end bonuses.

And good morning to you too 54anickel. :donut:

[54anickel]

12. Did you catch Bernie Schaeffer on NBR last night? Unbelievable!

He's calling for a high of 14,400 for the Dow in '07. His reasoning seemed pretty "far out" to me.

http://www.pbs.org/nbr/site/onair/gharib/061226_gharib/

SUSIE GHARIB: Our guest tonight is the most bullish market strategist for 2007, according to a recent survey of 80 Wall Street pros. He's predicting the Dow will close next year at 14,400. That would be a gain of 16 percent. He's also forecasting an all- time record for the S&P 500 at 1,580. Joining us now, Bernie Schaeffer, chairman of his own investment firm, Schaeffer's Investment Research. Hi, Bernie.

snip>

GHARIB: Nice to have you on the program. You know, it's interesting to see your turnaround in thinking. In the same survey last year at this time, you were one of the most bearish, predicting that the Dow would close 2000 at 10,000 and now you're the most optimistic about 2007. So why the switch?

SCHAEFFER: Well, I think the market really showed tremendous resiliency this year in the face of sort of the tail end of the Fed rate tightening, this boom in commodities that we had in the first half of the year where copper doubled in price just over the course of the second quarter. Continued double-digit earnings growth despite some of these head winds that the market was facing and I think we're in an environment right now where there's a tremendous amount of concern for 2007, whether it be soaring energy prices or a plummeting dollar or a severe recession in the economy. Yet basically we're in pretty good shape earnings growth wise, valuation wise. The market has put on a nice gain in the second half of the year. I think it's about expectations. I was concerned that expectations were too high going into 2006. And amazingly given how well we've performed particularly in the second half of the year, expectations as I see them right now in the options market, among short sellers, among analysts, among Wall Street strategists are actually more bearish now than they were at the end of 2005. That amazes me and that juxtaposition indicates to me there's sideline cash that can be committed to this market as the year -- as we move into the New Year.

GHARIB: As you know, for some time people have been very worried about the disappearance of the consumer. If that were to happen in 2007, that would certainly impact earnings and that would also impact stocks, wouldn't it?

SCHAEFFER: It would, but again, just thinking in terms of the backdrop, I mean, the old expression, it's already in there, basically this is a market that's positioned for surprises to the upside. There is a lot of concern about the consumer. There is a lot of concern about recession. This is why the forecast -- I'm amazed that my 15 percent forecast for the Dow, for example, was the most aggressive forecast in that survey. I mean, basically that's where the market averages are finishing in 2006. So it's not such a stretch to imagine that we're going to put in a year in 2007 like we did in 2006. Another factor which you don't really hear about is that third year of the presidential cycle, which we're going into in 2007. We haven't had a down year in a third year of the presidential cycle since 1960, and very often we get a gain from the lows like the low in 2006, second year of term, we get a 50 percent gain from second year of term to third year of term. If in fact, this would happen this year, that would make my forecast look very, very conservative.

more...

[ozymandius]

15. How Schaeffer's opinion is rooted in reality befuddles me.

I did not see the broadcast - but the transcript says it all. Sure, the Dow might climb to new highs. But why? Because of statistical projections say so? This has no more credibility that Tim Wood looking at natural cycle trends - yet conceding the existence of the 'invisible hand', undermining his grand thesis.

Yet I digress. Schaeffer seems to enamor himself with a dazzling array of numbers. That's bad journalistic presentation. How many times have we heard opinions like his prove to be bunk?

[54anickel]

16. Well, he is one of those guys that relies on other people's money for

his livelihood. Though I can't see any "reasonable" people knocking down his door for investment advice after that interview.

[Demeter]

32. Why New Highs? It's Called Inflation

The excess money that should have been sucked up and recycled as taxes and public spending is sloshing around in the stock market, since the real estate bubble burst.

[ozymandius]

3. Today's Reports

10:00 AM New Home Sales Nov
Briefing Forecast 1020K
Market Expects 1015K
Prior 1004K

10:30 AM Crude Inventories 12/22
Briefing Forecast NA
Market Expects NA
Prior -6323K

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

[54anickel]

39. U.S. November New-Home Sales Rise More Than Forecast (Update2)

http://www.bloomberg.com/apps/news?pid=20601087&sid=af0FVOUlbqhQ&refer=home

Dec. 27 (Bloomberg) -- Sales of new homes in the U.S. rose more than forecast last month as lower mortgage rates and more incentives helped builders reduce inventory.

The 3.4 percent increase to an annual pace of 1.047 million in November followed a 1.013 million rate the prior month, the Commerce Department said today in Washington. Economists had forecast a 1.6 percent rise. The supply of unsold homes at the current sales pace fell to the lowest since May.

The figures add to evidence that the slowdown in construction may take less of toll on the economy early next year than it did last quarter. Even with the decline last month, the number of unsold homes remains near a record high, making it less likely homebuilding will strengthen outright, limiting economic growth, economists said.

``Builders continue to provide incentives, which is really helping the demand side, and affordability is stabilizing thanks to some relatively low mortgage rates,'' said Phil Neuhart, an economist at Wachovia Corp. in Charlotte, North Carolina. ``We're going to continue to see some weakness in sales well into next year but we may have seen some of the lows.''

Economists had expected sales to rise to a 1.018 million rate in November from a previously reported 1.004 million, according to the median of 50 estimates in a Bloomberg News survey. Estimates ranged from 960,000 to 1.115 million.

more...

[54anickel]

4. Bulls to continue year-end run

Stock futures sharply higher after gains in overseas markets ahead of latest report on new home sales.

http://money.cnn.com/2006/12/27/markets/stockswatch/index.htm

NEW YORK (CNNMoney.com) -- U.S. stocks looked poised to follow overseas markets sharply higher at the start of trading Wednesday as the end-of-the year rally shows no sign of ending early.

Stock futures, which predict the direction of U.S. markets at the open, were sharply higher in early trading, after several markets in Asia closed at record highs. Major markets in Europe also were up as traders there returned after the four-day market holiday.

Shares of Toyota (Charts) rose in Tokyo trading after reports that its chairman Fujio Cho met last week with Ford Motor (Charts) CEO Alan Mulally about possible partnership that could lower research and development costs and the price of auto parts for the competitors. Shares of Ford gained nearly 1 percent in New York trading after the early-afternoon report Tuesday.

snip>

U.S. markets are likely to observe two minutes of silence Wednesday in memory of former president Gerald Ford, who died Tuesday evening at age 93. The markets traditionally close the day of the funeral of a president or former president. Those plans were yet to be announced early Wednesday.

more...

[ozymandius]

6. Oil prices fall more than $1 on weather

WASHINGTON - Oil and natural gas prices fell Tuesday amid mild winter weather that depressed demand for home-heating fuels.

U.N. sanctions against Iran that were approved over the weekend could raise concerns about supplies in 2007, though traders so far appear to have shrugged off the continuing dispute over Tehran's nuclear ambitions.

Light sweet crude for February delivery declined $1.11 to $61.30 a barrel on the New York Mercantile Exchange, which reopened Tuesday after a three-day closure for the Christmas weekend.

In London, Brent crude futures declined $1.30 to $61.12 a barrel on the ICE Futures exchange.

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

[ozymandius]

7. Belarus warns Russia over gas transit to Europe

MINSK/MOSCOW (Reuters) - Belarus issued an implicit threat that it could stop Russian gas deliveries through its pipelines to western Europe unless Russia's gas monopoly Gazprom relented on demands Minsk pay steep price increases in 2007.

The threat is likely to revive unpleasant memories of gas cuts to Europe last year when Russia was locked in a similar pricing row with Ukraine. But Belarus ships smaller volumes of gas to Europe via its territory and Russia said Europe was safe as Gazprom (GAZP.MM) had stockpiled extra gas in Germany.

-cut-

About 80 percent of Russian exports to Europe are pumped via Ukraine, with the rest going through Belarus. Russia supplies a quarter of Europe's gas to more than 20 countries.

Belarus, whose President Alexander Lukashenko is accused in the West of crushing human rights, has long been a Russian ally.

Relations have soured due to what analysts say is Kremlin leader Vladimir Putin's distaste for Belarus's Soviet-style economic policy and reluctance to share enterprises with Moscow.

http://news.yahoo.com/s/nm/20061227/bs_nm/russia_gas_belarus_dc_2

[ozymandius]

8. Nigerian health workers disinfect pipeline blaze site, search for victims

LAGOS (AFP) - Nigerian health officials have sprayed chemicals to disinfect the site of an oil pipeline explosion that killed more than 260 people and injured dozens, according to the Nigerian Red Cross, while volunteers searched for more victims.

The state-run Nigerian National Petroleum Corporation (NNPC), the owner of the vandalised pipeline that burst into flames Tuesday in the northern Abule Egba district of Lagos, said the latest toll for the blaze was "between 200 and 250".

"As at the last count, between 200 and 250 people have died in the disaster," NNPC spokesman Levi Ajuonuma said in a television interview Wednesday, describing the victims as "criminals" who vandalised pipelines to steal petrol and sell it.

Nigerian Red Cross Executive Secretary Abiodun Orebiyi said the fire left at least 269 people dead but warned that some survivors might yet succumb to their burn wounds.

http://news.yahoo.com/s/afp/20061227/wl_afp/nigeriaoilpipeline_061227123052

[54anickel]

9. Enslaved to a Debt Prison - spooky

http://www.funnymoneyreport.com/article_view.php?id=21

What really bothers me about our current economic system is how technology has been used to efficiently turn this country into a debt prison powered by computer databases that track purchases and credit worthiness. Through the use of our debt based fiat currency, most wealth exists as binary digits on a computer hard drive. It is nothing more than an illusion as binary digits on a computer hard drive have no real value. This illusion has allowed banks and credit card companies to build databases that contain information on where you shop and how much you spend. It has turned the average American into an economic slave.

In the 1970’s credit cards were primarily reserved for the wealthy. In addition, obtaining mortgage loans were difficult unless you had the ability to put down a huge down payment. Fast forward to the 21st century and we see first year students at colleges and universities get bombarded with credit card offers. We see banks giving away home loans using all sorts of creative financing packages. There are a couple of key reasons why I believe these things have changed so quickly.

The first reason is because the system needs people to become a slave to the fiat debt prison as early in life as possible. The U.S. educational system leads students to believe that unless they get a college education that they won’t be able to succeed. This is of course a lie, but it is a good way to get people into debt at a very early age. The higher educational system in this country is ripping people off with tuition and housing fees just for the privilege of earning an undergraduate degree. Most students end up majoring in something that is of little to no value in the marketplace. In fact most of the undergraduate degree programs fail to provide students with any desirable job skill. The grade point average system actually discourages students from pursuing challenging degree programs with difficult courses. A class in sports management is given the same weight as a class in chemistry which is simply not a fair comparison. The chemistry class is obviously more difficult but someone earning an A in the sports management class is considered to have a higher GPA as opposed to someone earning a B in the chemistry class. This is one of the reasons why we see the science and engineering programs in this country filled with students from India and China. It is a common practice that schools base scholarships contingent upon a student maintaining a certain GPA. Additionally there are many parents in this country who expect good grades from their kids even if it discourages them from taking more difficult classes. As a result, the science and engineering programs which would give students truly desirable job skills are simply not being pursued by those born in this country. These distortions leave many graduates swimming in debt with a degree that has little value.

Already in debt with student loans, many graduates are burdened with finding a job that will enable them to find a place to live and pay for the basic necessities of life. On top of that, they have to deal with the Internal Revenue Service stealing their money through the communist inspired income tax system. They also have to deal with the Federal Reserve which devalues the purchasing power of the little money that they are able to save. This forces them to take on additional credit card debt and loans in order to maintain a decent standard of living. This brings me back to the main point. The whole system is designed to put people into debt at an early age. By bombarding students with credit card offers and making student loans readily available it puts them into debt right away. Credit card companies know that the average student will not be able to make a sufficient income while they pursue their degree so they become a perfect target. The more people who are in debt, the more people there are that are forced to provide labor to the debt prison.

more...

[ozymandius]

10. US STOCKS-Futures climb after Toyota, Ford meeting

NEW YORK, Dec 27 (Reuters) - U.S. stock index futures rose on Wednesday, a day after the chairman of Toyota Motor Corp. met with the chief executive of Ford Motor Co., sparking hopes about a potential alliance between the two automakers.

Although the executives from Ford and Japan's top automaker did not discuss the possibility of forming an alliance, Toyota shares rose more than 2.5 percent to a record high in Tokyo. Shares of Ford were up 1.5 percent at $7.60 in early electronic trading. For details, see

Investors were also keeping an eye on key housing data for clues on the health of the U.S. economy and watching oil prices, which impact corporate profits. Trading volume is expected to be light as many traders were away in the holiday week.

"There's not much going on in oil, the year-end rally effect is on, and there doesn't appear to be any news that's going to derail the market train," said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey.

http://today.reuters.co.uk/news/articleinvesting.aspx?type=usMktRpt&storyId=2006-12-27T124823Z_01_N27429998_RTRIDST_0_MARKETS-STOCKS-UPDATE-1.XML&WTmodLoc=HP-R4-MarketPane-2

[ozymandius]

11. Workers Wrestle With the Future at Ford

DETROIT (AP) - Scott Swiercz smoked a cigarette and drank a beer at The Final Score lounge, mulling the biggest gamble of his life.

Ford Motor Co. had offered him and its 75,000 other U.S. hourly workers a choice of buyout packages. One option: A $100,000 lump sum payment to completely sever his relationship with Ford. Taking the money would mean no job and no health care. For Swiercz, 40, who has two ex-wives and pays $157.50 each week in child support for his 14-year-old son, taking the buyout would be the equivalent of a third divorce. The math just didn't work.

-cut-

For hourly workers at Ford, making a decision on the buyout offers required a combination of economic calculations and soul searching. Some 38,000 Ford workers -- roughly half of Ford's U.S. hourly work force -- said they would take one of Ford's eight buyout packages. Workers can rescind their acceptance until their last day of work. Those who do go will start leaving the company in January, the rest will be gone by September.

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&Date=20061226&ID=6302074

[ozymandius]

13. U.S. Retailers' Holiday Gains May Trail 2005 on Housing, Energy

Dec. 27 (Bloomberg) -- Retailers' sales growth during the holiday season may fall short of last year's because a slowing housing market and higher energy costs curbed consumer spending.

Holiday revenue grew 3 percent from 2005, when sales rose 5.2 percent, according to MasterCard Advisors, which measures purchases made by cash, checks and MasterCards. The National Retail Federation has estimated that sales will rise 5 percent in November and December, below the 6.1 percent gain last year.

The fourth quarter is critical to retailers' profitability, with companies such as Wal-Mart Stores Inc., Target Corp. and Federated Department Stores Inc. earning the largest portion of their net income in the period. About 32 percent of the industry's profit came in the last quarter of 2005, according to the New York-based International Council of Shopping Centers.

``In terms of real dollar spending, I think that we've got some problems,'' said Richard Hastings, New York-based analyst with Smyth-Bernard Sands. Retailers' earnings in the fourth quarter ``are going to be a problem,'' he said.

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

[texpatriot2004]

14. K & R nm

[54anickel]

17. U.S. expects soft landing for economy

http://calsun.canoe.ca/Business/2006/12/27/3021302-sun.html

WASHINGTON -- A trade group representing U.S. manufacturers yesterday predicted a soft landing for the U.S. economy in 2007.

In its annual forecast, the National Association of Manufacturers forecast industrial output would decelerate to a growth rate of 2.8%, or slightly below the 2.9% rate of expansion it expects for the overall economy.

The manufacturing sector grew by 4.5%, on average, in 2006, while the U.S. economy expanded by 3.1%, according to the association.

The association's chief economist, David Heuther said manufacturers in general will benefit from rising exports and increased business investment, though he cautioned producers of wood and textile products, among others, would suffer from the slowdown in the housing sector.

bit more...



Slower economic growth forecast
A manufacturers group says falling house prices and rising energy costs are partly to blame.
http://www.kansascity.com/mld/kansascity/business/16324208.htm

The National Association of Manufacturers, in its annual forecast, said Tuesday that industrial output would slow to a growth rate of 2.8 percent.

That was slightly below the 2.9 percent rate of expansion the group expects for the overall economy.

The association said the country’s manufacturing expansion during the last four quarters was likely to be “a cyclical peak in the pace of growth.” Falling housing prices, rising interest rates and high energy prices also will dampen consumer spending, the report said.

snip>

Heuther predicted that the nation’s slower economic growth would prompt the Federal Reserve to lower interest rates 50 basis points by the middle of next year.

bit more...

[54anickel]

18. Tyson Cuts Executives' Pay After 1st Loss Since 1994

http://www.bloomberg.com/apps/news?pid=20601087&sid=auLaataUp2MY&refer=home

Dec. 26 (Bloomberg) -- Tyson Foods Inc. slashed the pay of Chairman John Tyson and Chief Executive Officer Richard Bond by withholding bonuses after the world's biggest meat company suffered its first yearly loss since 1994.

John Tyson, 53, who stepped down as CEO in May after serving in that position since 2001, was paid $2.13 million for the year ended Sept. 30. That's down 62 percent from the previous year when the company had net income of $372 million and Tyson received a $3.24 million bonus.

Bond's pay was cut 68 percent to $1.88 million, according to a company filing today with the U.S. Securities and Exchange Commission. Bond received a $1.38 million bonus in fiscal 2005. Tyson spokesman Gary Mickelson was not available to comment.

Springdale, Arkansas-based Tyson Foods reported a net loss of $196 million last year, its first yearly loss in 12 years. The company cited lower chicken and beef prices stemming from a glut of meat caused by concerns about avian flu and export bans related to mad-cow disease. Bond, 59, said in November that Tyson would be profitable in fiscal 2007.

John Tyson's pay for fiscal 2006 included $1.17 million in salary, $323,659 worth of personal use of company aircraft, $203,536 in taxes paid by the company, and $57,359 in insurance premium reimbursements. Bond's salary was $1.14 million and his compensation included $244,587 worth of company aircraft time and $169,072 in compensation from the company for payment of taxes.

more...

I still don't buy their product. They suck as an employer - though I bet this will make them even worse in that area (if that's even possible).

[54anickel]

19. Gold finds post-holiday luster, gains on dollar

http://today.reuters.com/news/articleinvesting.aspx?type=hotStocksNews&storyID=2006-12-27T125617Z_01_SYD143988_RTRUKOC_0_US-MARKETS-PRECIOUS.xml&WTmodLoc=NewsHome-C3-hotStocksNews-3

LONDON (Reuters) - Gold gained on Wednesday as a drop in the dollar on continued talk of possible U.S. interest rate cuts next year encouraged bullion investors to buy the metal.

But the gold market was prone to wide fluctuations because of low trading volumes ahead of the new year, dealers said.

Spot gold <XAU=> was at $627.50/628.50 an ounce at 1023 GMT, against $624.20/625.20 late in New York on Tuesday, when it rose as high as $629.50.

"Conditions are set to remain thin over the next few days, which could lead to some interesting movements, particularly if the war of words between Iran and the West intensifies," said James Moore, precious metals analyst at TheBullionDesk.com.

more...

[54anickel]

27. Gold May Rise as Investors Seek Alternative to Dollar (Update2)

http://www.bloomberg.com/apps/news?pid=20601102&sid=aMRjHW2GtVn8&refer=uk

Dec. 26 (Bloomberg) -- Gold may climb for the second-straight week as investors avoid dollar-denominated assets and purchase the precious metal.

Thirteen of 34 traders, investors and analysts surveyed by Bloomberg from Sydney to Chicago on Dec. 21 and Dec. 22 advised buying gold, which rose 0.5 percent last week in New York to $622.30 an ounce, the first gain in three weeks. Nine respondents said to sell the metal, and 12 were neutral.

Investment in the StreetTracks Gold Trust, a $9 billion exchange-traded fund linked to the price of the metal, has more than doubled in value this year and the number of shares outstanding jumped 78 percent. Gold is up 20 percent and heading for its sixth straight annual gain, while the dollar has fallen 8 percent against a basket of six major currencies.

``There is too much capital chasing not enough goods,'' said Friedrich Kernstock, a director at Vienna-based Kernco Metal Trading GmbH, a metals trading and investment company, who expects gold to average $700 in 2007. ``More instruments have been developed for the small investor to take part in the bull-run for commodities. Gold should go up.''

more...

[54anickel]

45. Gold Takeovers Reach Record on Lack of New Supplies (Update1)

http://www.bloomberg.com/apps/news?pid=20601109&sid=aB3a0HjsLcYI&refer=news

Dec. 27 (Bloomberg) -- Gold-company acquisitions this year surged to the highest level in at least a decade, and the industry may continue its buying spree in 2007 as producers struggle to find new deposits.

Goldcorp Inc.'s $8.5 billion acquisition of Glamis Gold Ltd. was the biggest of 357 deals valued at a total of $24.3 billion this year, data compiled by Bloomberg shows. That eclipsed the $16.2 billion spent last year on 341 transactions, including Barrick Gold Corp.'s $10 billion purchase of Placer Dome Inc.

Producers are rushing to boost supply because mines are being depleted faster than new reserves are being found, and a six-year rally in gold prices is providing cash to buy assets. The number of discoveries of at least 2.5 million ounces has declined for eight straight years, according to Metals Economics Group in Halifax, Nova Scotia.

``The driving force behind the M&A is that you have difficulty finding new gold mines,'' said Graham Birch, who helps manage $27 billion at BlackRock Investment Management in London. ``It's all about trying to get access to reserves.''

From 1992 to 2005, the world produced 1.1 billion ounces of gold, or 1.8 times more than the new resources discovered among deposits of at least 2.5 million ounces, Metals Economics Group said.

The drop in new reserves followed years of reduced spending on exploration as gold fell to a 20-year low of $253.20 an ounce in 1999. Worldwide exploration budgets fell to a 12-year low of about $780 million in 2002, said Jason Goulden, director of corporate exploration strategy at Metals Economics.

more...

[54anickel]

52. Gold futures close higher on dollar weakness -Worries about Iran's nuclear strategy continue to stir

Worries about Iran's nuclear strategy continue to stir safe-haven demand

http://www.marketwatch.com/news/story/gold-capitalizes-dollars-fall-iran/story.aspx?guid=%7B3F545F4B%2DC6DB%2D4560%2D9838%2DCCE4708AA0F2%7D&dist=news

NEW YORK (MarketWatch) -- A weaker dollar and concerns about Iran's nuclear strategy helped gold futures to make some headway, as the market got back into full gear with the return of European traders after their extended Christmas holiday.

Gold for February delivery closed up $3.40 at $630.30 an ounce, adding to gains made on Tuesday when the contract added nearly $5 an ounce on the New York Mercantile Exchange,.

Political tensions around the world -- notably relating to Iran and its nuclear aspirations -- boosted safe-haven demand for the metal during both sessions.
"Conditions are set to remain thin over the next few days, which could lead to some interesting movements, particularly if the war of words between Iran and the west intensifies," said James Moore, analyst at TheBullionDesk.com in London. "Good support continues to be found ahead of $620."

However, Moore noted that from a technical standpoint, gold remains vulnerable to testing its 100-day moving average at $611.75 an ounce.

Early Wednesday, the Iranian parliament passed a bill allowing the government to review its cooperation with the International Atomic Energy Agency, the United Nations' nuclear watchdog, according to reports.

more...

[54anickel]

20. Foreign exploitation or good negotiations?

http://www.chron.com/disp/story.mpl/business/4427323.html

SANTIAGO, CHILE - The mountainous terrain of northern Chile is studded with precious metals, a natural cache that for years has had investors angling for land rights.

So when the world's largest gold mining company targeted about 20,000 acres owned by Rodolfo Villar, a mineral speculator, he signed a contract. Only later, he said, did he realize how much the company had agreed to pay him: about $19.

Villar, who regularly grabs local land rights if he thinks they might be worth something, said he thought the deal was worth $1 million. Also, the fine print of the contract stipulated he would be fined $95,000 if he tried to obtain rights to other parcels in the surrounding area.

Villar sued the company, Canada's Barrick Gold Corp., arguing that he had been deceived. This year, a Chilean judge ruled in his favor, saying that the company had essentially swindled Villar, and ordered the lands returned to him.

Barrick officials say the ruling, which they have appealed, is unlikely to derail the mining project. But the case has angered some Chileans who complain that foreign companies are exploiting local landholders.

more...

[54anickel]

21. Sub-Prime Disaster In The Making

http://www.kitco.com/ind/schiff/dec262006.html

A report released this week by the Center for Responsible Lending, a Durham, N.C. based research group, predicted that 1 in 5 sub-prime mortgages originated in the past two years would end in foreclosure. While most on Wall Street dismissed this survey as overly pessimistic, it actually represents a rather rosy outlook.

One of the report's deficiencies is that it fails to account for how the foreclosures it does expect will impact those loans that it regards as safe. A 20% default rate would put millions of homes back on the market, and would also inflict severe losses on sub-prime lenders, causing them to pull in their horns and tighten their lending standards. More inventory and higher rates will put more downward pressure on home prices. Many over-stretched borrowers, who made little or no down payment, will find themselves struggling to make mortgage payments on properties with negative equity. Higher rates and lower prices will also remove the cash out options that many borrowers expected would bail them out of ballooning adjustable rate payments.

Therefore, the secondary effects of the 1 in 5 sub-prime default rate will be a chain reaction of rising interest rates and falling home prices engendering still more defaults, with the added foreclosures causing the cycle to repeat. In my opinion, when the cycle is fully played out we are more likely to see an 80% default rate rather than 20%.

The main problem is that the majority of these loans were made to people who really cannot afford to repay them and were collateralized by properties whose true values were but a fraction of the loan amounts. Once the music stops and prices return to earth, borrowers who put little or no money down may decide to simply mail in their house keys rather than make additional mortgage payments. Why would anyone stretch to spend 40% of his or her monthly income to service a $700,000 mortgage on a condo valued at $500,000, especially when there are plenty of comparable rentals that are far more affordable?

more...

[54anickel]

22. Pre-market blather

09:00 am : S&P futures vs fair value: +4.3. Nasdaq futures vs fair value: +7.5. Still shaping up to be a strong start for equities as the futures market continues to trade above fair value. As evidenced by the resurfacing of seasonal factors yesterday, today looks to be no exception, as another day absent any real market-moving news still leaves the bulls wanting more and the bears reluctant to fight historical trends. According to the Stock Trader's Almanac, the last five days of the year and first two days of January have resulted in an average return of 1.5% for the S&P 500 since 1950.

08:34 am : S&P futures vs fair value: +4.1. Nasdaq futures vs fair value: +7.3.

08:32 am : S&P futures vs fair value: +4.2. Nasdaq futures vs fair value: +15007.8.

08:30 am : S&P futures vs fair value: +4.3. Nasdaq futures vs fair value: +7.0. Bullish bias persists in pre-market trading, setting the stage for stocks to open sharply higher. Both the S&P 500 and Nasdaq 100 futures are off their best levels, however, as tech bellwether Apple Computer (AAPL) extends early losses to nearly 3% following reports that it falsified stock option documents.

08:00 am : S&P futures vs fair value: +4.7. Nasdaq futures vs fair value: +8.5. Early indications suggest yesterday's recovery efforts may carry over into this morning's opening bell. With no companies scheduled to report earnings today and concerns still lingering about whether weakness in housing will adversely impact consumer spending, investors appear to be pricing in a report at 10:00 ET that may show new home sales edged higher last month. With new home sales hovering near three-year lows, more evidence that the housing market has bottomed out could give market participants the green light to keep the year-end rally intact.

06:18 am : S&P futures vs fair value: +6.2. Nasdaq futures vs fair value: +12.8.

06:17 am : FTSE...6223...+32.90...+0.5%. DAX...6584.16...+81.93...+1.3%.

06:17 am : Nikkei...17223.15...+53.96...+0.3%. Hang Seng...19606.97...+286.45...+1.5%.

Can you hear the chants? Twelve-five! Twelve-five!!!

[54anickel]

23. Dollar Slides; U.A.E. Says Selling U.S. Currency, Buying Euros

http://www.bloomberg.com/apps/news?pid=20601087&sid=a6wQSxMRkoec&refer=home

Dec. 27 (Bloomberg) -- The dollar dropped the most in a week against the euro as the United Arab Emirates said it will convert some of its reserves of U.S. assets into the European currency.

The dollar also had its biggest decline versus the yen this month before a U.S. report that may show consumer confidence fell for a third straight month, fueling bets the Federal Reserve will lower interest rates next year. The U.S. currency has slipped 9.9 percent versus the euro this year, its first slide since 2004.

``The U.A.E.'s decision to relocate its reserves is part of a theme that means that U.S. dollar holdings in global currency reserves are decreasing,'' said Hans Guenter Redeker, head of currency strategy in London at BNP Paribas SA. ``The dollar is going to lose support as we see Fed rate cuts next year.''

snip>

The U.A.E. will switch 8 percent of its reserves from dollars into euros before September, Sultan Bin Nasser al-Suwaidi said in a Dec. 24 interview in Abu Dhabi. The U.A.E. has started ``in a limited way'' to sell its dollar reserves, he said.

The Gulf state is among oil exporters including Iran, Venezuela and Indonesia that are looking to shift their currency reserves into euros or price their oil products in the 12-nation currency.

more...

[54anickel]

24. Egilmez recommends a currency basket

http://www.turkishdailynews.com.tr/article.php?enewsid=62181

The claim that US Dollar will lose its position as the international reserve currency is an unrealistic speculation, says Mahfi Eğilmez, but “it is always good to use a currency basket” for Turkey, too.

Eğilmez, a political economy lecturer in Istanbul Bilgi University, and a columnist for daily Radikal, reminded that FED ex-chairman Alan Greenspan also counted the potential reserve currency weaknesses as a problem for US economy: “Greenspan pointed out two problems: The current account deficit and OPEC countries' tendency to quit the dollar as reserve currency. He said that these will result in further devaluation of the dollar, and we are now experiencing this.”

As a result of the fall in the value of USD, people are slowly moving to the Euro, but “not as fast as speculated”, said Eğilmez to the TDN. He further noted that the European economy is not that strong – except the UK, which is not in the Eurozone – and a sharp downfall of the US Dollar will also hurt them.

Still, instead of an “all-dollar approach” for the Turkish Central Bank, using a basket would be wise. “The dollar will not lose its reserve currency status, thus there is no need to panic,” he said. “But slowly moving to euro, like 20-30 percent, would be helpful.”

bit more...

[54anickel]

25. Could the Dollar's Collapse Prompt a New Currency?

My apologies for the source:

http://www.humanevents.com/article.php?id=18564

A large and growing trade deficit with China under NAFTA threatens a dollar decline that could well set the stage for the emergence of the Amero as a unified North American currency.

In 2005, the U.S. balance of trade deficit with China was $201 billion, a 25% increase over 2004. In 2006, China’s foreign exchange reserves topped $1 trillion, a staggering amount considering that before 1979 China’s foreign exchange reserves had never surpassed $1 billion. Approximately 70% of China’s foreign exchange reserves, some $700 billion, are held in U.S. dollars, about half of which are invested in long-term Treasury bonds that in turn fund our federal budget deficits. Prior to Thanksgiving 2006, China’s central banks suggested a possible move to diversify foreign exchange holdings away from the dollar. As a consequence, the dollar sold off on world currency markets, hitting a new 20-month low against the Euro, a currency which is beginning to compete with the dollar as an international foreign reserve currency.

In the recent top-level cabinet officer meeting held in Beijing, U.S. Treasury Secretary Henry Paulson said that China had pledged to allow a greater extent of rate flexibility on the Chinese RMB (the Yuan), but refused to give a timetable for achieving that objective. Since July 1, 2005, China has allowed the Yuan to fluctuate within a narrow range, pegged to a basket of international currencies. Still, China has consistently refused to allow its currency to float freely on international currency markets. In his Beijing speech, Federal Reserve Chairman Ben Bernanke’s prepared text accused China of maintaining an undervalued currency on purpose, in order to provide an effective subsidy to Chinese firms that export their goods. In delivering the speech, Bernanke decided to moderate this criticism, noting only that a stronger Yuan would reduce “the incentive for Chinese firms to focus on exporting.” The December 2006 cabinet-level meetings in China showed progress, but no definite results.

Meanwhile, on December 15, while Paulson was in China, the Treasury issued the 2006 Financial Report of the United States as released by the U.S. Department of Treasury, which reported that the 2006 federal budget deficit was $4.6 trillion, not a previously reported $248.2 billion. The difference is that the typical Treasury Department report of the federal budget deficit is on a cash basis where all tax receipts are applied when received to current liabilities, whereas the Financial Report of the United States is calculated on a GAAP basis (“Generally Accepted Accounting Practices”) accruals are made for current year changes in the net present value of unfunded liabilities in social insurance programs such as Social Security and Medicare. The report also showed that the GAAP accounted negative net worth of the federal government has increased to $53.1 trillion, while the total federal obligations under GAAP accounting now total $54.6 trillion, taking into account the present value of future Social Security and Medicare liabilities. Put simply, the 2006 Financial Report of the United States shows that arguments that the U.S. government is bankrupt have increasing merit.

Currently, we are experiencing an inverted yield curve in which long-term interest rates are lower than short-term interest rates, a condition that many economists feel predicts slower economic growth in the first half of 2007. The U.S. GDP grew at a rate of 2.2% in the third quarter 2006, the weakest pace since late 2005. If the housing market bubble bursts in 2007, the U.S. could experience an economic slowdown in 2007. Facing continuing trade and budget deficits in 2007, the task before Treasury Secretary Paulson is how to engineer a gradual dollar decline rather that an abrupt drop in value that could signal a dollar collapse.

Meanwhile, Robert Pastor of American University gave an interview in Spanish in October 2006 in which he suggested that a 9/11 crisis might be just the type of catastrophe needed to overcome governmental inertia in advancing the type of economic integration necessary to form a North American Community. In a subsequent interview, Pastor affirmed that the Spanish interview did represent his thinking. “What I’m saying is that a crisis is an event which can force democratic governments to make difficult decisions like those that will be required to create a North American Community,” Pastor said. “It’s not that I want another 9/11 crisis, but having a crisis would force decisions that otherwise might not get made.” As we have previously documented, Robert Pastor, who we have called “The Father of the North American Union,” has provided much of the intellectual justification behind the push toward a merger between the U.S., Mexico, and Canada.

more...

[citizen snips]

26. Wall Street mourns, then stocks move up

NEW YORK (CNNMoney.com) -- Stocks moved higher Wednesday after the New York Stock Exchange observed a moment of silence for President Gerald Ford, who died Tuesday night at age 93.

The Dow Jones industrial average, Nasdaq composite and S&P 500 index all jumped posted modest gains in the early going. The NYSE delayed the start of trading by two minutes in honor of Ford.

In corporate news, Apple stock (Charts) tumbled more than 5 percent in early trade after The Recorder, an online publication of legal news Web site Law.com, reported stock option documents at the company were apparently falsified by company officials.

Also, the chairman of Toyota met with the chief executive of Ford but Japan's top automaker said they did not discuss the possibility of forming any alliance.

The Nasdaq will observe a moment of silence at 11 a.m. ET for Ford, who was the oldest surviving ex-U.S. president and the only president and vice president who was never elected to office.

Oil prices fell 22 cents to $60.88 a barrel.

more...
http://money.cnn.com/2006/12/27/markets/markets_nyopen/index.htm?postversion=2006122709

[54anickel]

28. I'm still wondering if they'll honor the tradition and close for the day of

his funeral. Guess that's going to depend on what day the funeral is scheduled for. The newbies holding down the fort seem to be on a mission this week.

[Hugin]

35. Anyone remember the W.I.N. buttons?

Whip Inflation Now.

Wasn't Ford President then?

[54anickel]

37. Yeah, but I thought Greenspin was behind it.

http://www.etherzone.com/2003/stang011003.shtml

snip>

Next, we heard that Gerry Ford, appointed to the Presidency by the departing Richard "We are all Keynesians now" Nixon, had appointed Greenspan as Chairman of the Council of Economic Advisers. Need I add that there was considerable chortling among the Objectivists. Greenspan’s new job obviously meant that infinitely superior Objectivist ideas had won a foothold in Washington and now would begin to permeate the government. Ayn Herself was present in the unholy city when Greenspan was inducted, reveling at the sight. It was all happening as she had foretold.

Indeed, word now arrived that new Chairman Alan Greenspan had concocted a cure for inflation. Objectivists had expected no less and were generally enthralled. After all, how far wrong could you go if you subscribed to Ayn’s ideas? At the time, inflation was nowhere near as bad as it is today, but it was already a troubling problem. What was Greenspan’s cure for inflation?

It was called Whip Inflation Now (WIN). We would wear large buttons that said "Whip Inflation Now," or simply WIN. Those buttons would help combat Old Mr. Inflation, because he would see them and be afraid. The more buttons we wore, and the bigger they were, the more afraid he would be. The buttons would create public awareness that would shut inflation down. WIN kits turned up everywhere.

Another aspect of the Greenspan plan called for Americans to finish everything on their dinner plates. Because we were not doing that, inflation was getting worse. Indeed, there was even talk of teaching American women how to buy groceries. Your Intrepid Correspondent clearly recalls being unaware at the time, along with innumerable others, that American women are too stupid to buy groceries by themselves; the basis of the Greenspan scheme was that they are. According to Greenspanthink, they routinely buy the worst deals, the most expensive items on the shelves, with the predictable result that inflation is encouraged. In short, according to Greenspanthink, ignorant housewives cause inflation.

[54anickel]

29. 9:51 and look at them turkeys fly!!!

Dow 12,483.97 76.34 (0.62%)
Nasdaq 2,429.84 16.33 (0.68%)
S&P 500 1,424.95 8.05 (0.57%)
10-yr Bond 4.6070% 0.0040
30-yr Bond 4.7360% 0.0030
NYSE Volume 153,608,000
Nasdaq Volume 130,219,000


09:40 am : As expected, stocks pick up where they left off yesterday, posting gains. Even though there though is little in the way of specific news catalysts to account for the market's bullish disposition right out of the gate, this time of the year being seasonally strong for stocks is helping to underpin what is shaping up to be another victory for the bulls. As an aside, the market opened two minutes later than usual, observing a moment of silence at 9:30 ET in honor of the passing of former U.S. President Gerald Ford.DJ30 +60.42 NASDAQ +12.55 SP500 +5.36 NASDAQ Vol 65 mln NYSE Vol 32 mln

[modrepub]

41. Turkeys Away (from WKRP)

I laughed at your line and thought immediately of the WKRP episode. Here's Les Nessman's quote

Les: It's a helicopter, and it's coming this way. It's flying something behind it, I can't quite make it out, it's a large banner and it says, uh - Happy... Thaaaaanksss... giving! ... From ... W ... K ... R... P!! No parachutes yet. Can't be skydivers... I can't tell just yet what they are, but - Oh my God, they're turkeys!! Johnny, can you get this? Oh, they're plunging to the earth right in front of our eyes! One just went through the windshield of a parked car! Oh, the humanity! The turkeys are hitting the ground like sacks of wet cement! Not since the Hindenburg tragedy has there been anything like this!

Link: http://www.tv.com/wkrp-in-cincinnati/turkeys-away/episode/18540/summary.html?tag=reviews;episode;7

[54anickel]

43. Bwahahaha!! I remember that one now!!! Thanks for the memories -

I liked that show. Johnny Fever was my hero.

[54anickel]

30. Terror Mixed With Laughter (Mogambo)

http://www.kitco.com/ind/Daughty/dec272006.html

snip>

Well, Total Fed Credit was up $7.6 billion, foreign central banks stashed another $11.8 billion at the Fed, the Treasury printed up another $2.4 billion in actual cash, repo activity in the banks last Thursday alone was a staggering $32 billion, and the nation's current-account deficit went through the $880 billion per year mark. Gahhh!

snip>

Then I remember that they are the same dolts who consistently elected and re-elected collectivist bozos to erect a suffocating, huge, expensive system of governments that not only looked the other way, but encouraged the Federal Reserve to create all that money because everyone wanted inflation in stocks, bonds, the size of government, and (later in the cycle) houses! There was just too much money to be made!

snip>

And why is all of this happening? Well, in his essay "Monetary Anarchy", Dr. Kurt Richebächer quotes Jean-Baptiste Say from his 1803 "A Treatise on Political Economy." The quote is "The encouragement of mere consumption is no benefit to commerce because the difficulty lies in supplying the means, not in stimulating the desire for consumption; and production alone furnishes those means. Thus, it is the aim of good government to stimulate production, of bad government to encourage consumption."

snip>

They say that consumer spending is what is keeping us afloat, which doesn't explain where the consumer got the money in the first place. In truth, government spending is now so huge that the money (earned or borrowed) came, originally, from the government deficit-spending the money that the Federal Reserve created just for the purpose, year after year, until the debt thus created now totals $8.6 trillion (roughly, a stack of $1,000 bills 540 miles high), which merely means that the government borrowed, and spent, and owes one enormously humongous load of money. The consumer merely ended up with it, just in time to be credited with keeping the economy afloat by spending it.

To show you what I mean, the government budgeted $2.6 trillion, and they spent another $600 billion on top of that, to the tune of $3.2 trillion in cash outlays last year! The GDP of the United States is only $13 trillion, for crying out loud! And the actual, real-life deficit last fiscal year, as reported by the Treasury itself, was $4.6 trillion! 35% of GDP! In one year!

And speaking of the federal budget, if you like your terror mixed with laughter and a huge pile of lying and deceit (and who doesn't?), then I suggest that you visit the gpoaccess.gov/usbudget site to get to "Overview of the President's 2007 Budget", which is the biggest stinking pile of misleading, distorted, delusional self-congratulatory crap that I ever read, and it embarrasses me to think that foreigners are going to read it and say to their wives "Honey, you should come in here and read the economic stupidity and brazen lies of the United States! These doofus Yank bastards are corrupt to the core! What did The Mogambo say about this? Something about it being a big stinking pile of delusional self-congratulatory crap?" and his wife will answer (if she is anything like my wife or daughters), "Plus the adjectives 'misleading and distorted', you moron! Now, shut up! We're having fun planning your funeral, ya creep!"

more...

[54anickel]

31. S.E.C. Changes Reporting Rule on Bosses’ Pay (Merry Christmas again!)

First the court ruling reducing Exxon's fines and now this... What other corporate give-aways did I miss during my absence?

http://www.nytimes.com/2006/12/27/business/27place.html?_r=2&oref=slogin&oref=slogin

The Securities and Exchange Commission, in a move announced late on the last business day before Christmas, reversed a decision it had made in July and adopted a rule that would allow many companies to report significantly lower total compensation for top executives.

The change in the way grants of stock options are to be explained to investors is a victory for corporations that had opposed the rule when it was issued in July, and a defeat for institutional investors that had backed the S.E.C.’s original rule.

“It was a holiday present to corporate America,” Ann Yerger, the executive director of the Council of Institutional Investors, said yesterday. “It will certainly make the numbers look smaller in 2007 than they would otherwise have looked.”

Christopher Cox, the commission chairman, said yesterday that he viewed the decision as “a relative technicality” that improved the rule. When the rule was adopted in July, Mr. Cox said it was aimed at providing information that would allow shareholders to “make better decisions about the appropriate amount to pay the men and women entrusted with running their companies.”

more...



Appeals court slashes damages payable by Exxon for oil spill
http://www.earthtimes.org/articles/show/16002.html

SAN FRANCISCO: A federal appeals court in the U.S. has further cut down the compensation that Exxon Mobile will be required to pay for the 1989 oil spill in Alaska. San Francisco's 9th Circuit Court of Appeals, in a ruling Friday, reduced the fine from an earlier $4.5 billion to $2.5 billion, saying the company's actions were not intentional and did not warrant the maximum financial penalty imposed by a lower court.

This is the third time that the damages have been brought down in one of the longest litigations. The company was first ordered to pay damages worth $5 billion.

In a 2-1 majority decision, the court said the prompt action initiated by the company in cleaning up the mess and in compensating fishermen and other affected by the spill, lowered the reprehensibility of its conduct. It said the substantial costs it had already borne in clean-up and loss of cargo lessen the need for deterrence in the future.

Exxon Mobil issued a statement saying it is studying the ruling. It said it believes the fine is too high as the plaintiffs were compensated for damages and most were paid within one year of the spill.

The ruling is based on a U.S. Supreme Court verdict in another suit in April 2003, which said punitive damages should be reasonable and proportionate to the harm that was suffered. :eyes: Setting precedence?

more...

[54anickel]

33. Will the dollar capitulate in 2007?

http://en.rian.ru/analysis/20061226/57853223.html

Moscow. (Anatoly Gorev, RIA Novosti) - The year 2006 has been very unlucky for the U.S. dollar. In mid-December, the American currency hit a 20-month low against the euro.

The dollar's supporters were all the more disappointed because they expected different things from this year, which began quite optimistically.

In late 2005 and early 2006, the euro seemed to have lost all of its advantages against the dollar and began falling. Its decline was encouraged by accelerated economic growth in the United States and the Federal Reserve's move to increase interest rates. Many analysts started predicting that the unlucky period for the dollar would end in 2006. The dollar's slump to $1.33 per one euro by mid-December is unlikely to live up to the hopes and optimistic forecasts expressed at the beginning of this year.

Perhaps, it is these lost illusions that are making analysts of leading investment banks voice rather pessimistic forecasts for 2007. Currency experts maintain that the dollar's dynamics will still be influenced by the same factors, notably the economic growth pace in the U.S. and the EU, changes in interest rates in developed economies, and, of course, energy prices, which, despite a certain decline, still remain high enough to put pressure on the dollar.

Experts differ only in their estimates of how far the dollar may drop. Some say that it will fluctuate between $1.35 and $1.40 per one euro, while others predict far less pleasant figures for dollar owners, such as $1.50 or even $1.70 per one euro. Even more optimistic analysts do not fully rule out the possibility of a dollar apocalypse. "Given the risks associated with the dollar, investors who have put their money into dollar-denominated bonds might want to diversify their investment," said David Brown, chief economist at Bear Stearns, a leading U.S. bank. "Does that mean that the euro could rise to $1.40 or $1.50, or will it demonstrate only a "frying-pan jump" ? We are inclined to believe the latter. We hate the very thought that the dollar is close to capitulating and that this capitulation, given the weakness of the American currency and the persistent pressure on it, may result in a collapse."

snip>

The dollar's prospects for 2007 may be partially determined by the behavior of Russian borrowers and Russian banks. The former increasingly often prefer to take out loans in dollars because they are cheaper to service, since the U.S. currency is falling and the ruble is strengthening. Banks have responded to this demand by increasing interest rates for these loans. As a result, the average interest rate for short-term dollar loans reached 13.6% in October, according to the Central Bank. This is the highest level in the last few years. Experts say that such a high rate was seen only after the 1998 financial crisis. At that time banks wanted to protect themselves against non-payment, while now they are hedging against currency risks, primarily those posed by the U.S. dollar.

more...

[54anickel]

34. Institutions can't cope with a crisis

http://www.theaustralian.news.com.au/story/0,20867,20973156-643,00.html

NATIONAL Australia Bank chief executive Michael Chaney put Reserve Bank governor Glenn Stevens on the spot at his recent speech to Committee for Economic Development of Australia.
"If you think about the international interdependence of financial institutions now, of the counter-parties all over the world in all sorts of transactions, I wondered whether you could tell us about the international institutional structures that exist to be able to react that quickly in the event of a crisis?" he asked.
Glenn Stevens could not.

"As far as I know, I'm not sure there is a terribly well developed set of protocols that we know that's in the top drawer and we get it out and just follow it."

"We know who to call and who are our opposite numbers," he added hopefully, but he conceded there was much more work to be done.

Chaney identified a problem that is troubling finance leaders around the world. Institutions designed to manage the demands of globalisation do not exist.

When Long Term Capital Management (LTCM) got into trouble in 1998 and threatened to bring the world financial system down with it, the governor of the New York Federal Reserve Bank brought together half a dozen leading investment bankers, bashed their heads together, and worked out who would take losses where.

more...

[54anickel]

36. OT - 2007: A Year of Accountability?

http://www.middle-east-online.com/english/opinion/?id=18936

As the new year unfolds, there are no guarantees that the Bush Administration will be held accountable for its abuse of executive power or for the war crimes it has committed. But the forces of accountability - nationally and internationally - are assembling, say Jeremy Brecher and Brendan Smith.


The year 2006 will be remembered as one in which the American people and the world rose up to challenge the criminal actions and deceit of the Bush Administration.

Despite massive evidence that top Administration officials have been complicit in systematic violations of national and international law through aggressive war, illegal occupation, rendition and detention of terror suspects without trial, secret prisons and torture, so far they have not been held accountable. Now a diverse array of forces is contesting Bush Administration impunity for war crimes and trying to reassert the rule of law over the executive branch. Each is operating in different arenas and pursuing different kinds of accountability -- from public shaming and political disempowerment to international isolation and even criminal prosecution. While all of these initiatives have been reported in the press, their convergence is one of the great underreported stories of 2006. For example:

• A court in Italy will decide in January whether to try twenty-six suspected American intelligence agents for abducting an Egyptian cleric off the streets of Milan.

• The U.S. Supreme Court issued key decisions that declared Administration actions in Guantánamo in violation of national and international law.

• A U.S. Army lieutenant refused to go to Iraq on the grounds that the war is illegal under U.S. and international law and made plans to use his court-martial to "put the war on trial."

• An international team of lawyers brought a criminal complaint in a German court alleging that former Defense Secretary Donald Rumsfeld and eleven other top U.S. government officials are guilty of war crimes.

• Senator Patrick Leahy, incoming Senate Judiciary Committee chairman, said he will issue subpoenas if necessary to secure Bush Administration documents that may have authorized torture.

Here are some of the arenas in which accountability for Bush Administration war crimes is being pursued:

more...

[54anickel]

38. 11:35 and all is well

Dow 12,483.57 75.94 (0.61%)
Nasdaq 2,426.98 13.47 (0.56%)
S&P 500 1,423.65 6.75 (0.48%)
10-yr Bond 4.6520% 0.0490
30-yr Bond 4.7800% 0.0470
NYSE Volume 620,279,000
Nasdaq Volume 486,504,000

11:30 am : Onward and upward remains a driving mantra this morning as the bulk of industry leadership remains positive. While the market continues to see today's biggest gains in its most influential areas -- Financials, Tech, Health Care and Industrials -- the Energy sector recently climbing back into positive territory and retracing early highs has given the broader market an added boost. After falling as low as $60.45/bbl (-1.1%) earlier, crude for February delivery is now down just 0.3%, evidently enough of a decline to keep the commodity's inflationary characteristics in check but not down too much to concern investors with the sector's ability to keep generating strong earnings for the S&P 500. DJ30 +81.79 NASDAQ +13.64 SP500 +7.30 NASDAQ Dec/Adv/Vol 862/1984/430 mln NYSE Dec/Adv/Vol 645/2437/300 mln

11:00 am : Stocks are still on the offensive as buying remains widespread across most areas. Bonds, however, continue to trade in the opposite direction. Just a day removed from recovering some of last Friday's sell-off, Treasuries are trading lower across the yield curve after today's only economic report showed that the U.S. economy is withstanding the "substantial correction" seen in the housing market this year. In fact, the possibility that housing has bottomed out and may start to recover from its largest downturn in 15 years has pushed the 10-year note down as much 11 ticks to yield 4.64%, a five-week high. Fortunately for the bulls, the rate-sensitive Financials sector is barely taking notice and continues to provide the bulk of support behind today's rally. DJ30 +76.26 NASDAQ +11.08 SP500 +6.27 NASDAQ Dec/Adv/Vol 944/1819/336 mln NYSE Dec/Adv/Vol 718/2291/226 mln

10:30 am : The market is off its best levels, in part due to a recent reversal in the Energy sector, but is holding onto respectable gains as investors digest more confirmation that the housing market is stabilizing. At the top of the hour, the Commerce Dept. showed that sales of new homes rose 3.5% in November to a seasonally adjusted annual rate of 1.047 mln (consensus 1.015 mln) while median sales prices rose 5.8% from a year ago. Even though not too much emphasis should be placed on median sales prices, the fact that they rose for a second straight month (and/or did not decline) helps to alleviate worries that the downshift in house price appreciation may spill over into consumer spending. Also, while new homes are a much smaller component (about 15%) of the housing picture than existing home sales, which are expected to check in relatively flat when released tomorrow (10:00 ET), it is worth noting that existing home sales also appear to be bottoming. DJ30 +66.17 NASDAQ +9.40 SP500 +5.42 NASDAQ Dec/Adv/Vol 756/1917/234 mln NYSE Dec/Adv/Vol 612/2302/144 mln

10:00 am : The indices extend their reach to the upside as all 10 economic sectors are trading higher. Oil prices recently touching fresh session lows below $61/bbl, without the Energy sector sacrificing too much in the way of leadership, has contributed to the market's latest push to morning highs. Leading the charge from a sector standpoint is Financials (+0.7%), which holds the heaviest weighting on the S&P 500. Technology, which ranks second in terms of influence, is not far behind with a 0.6% advance while Health Care (+0.5%), this year's worst performing sector, is also attracting some bargain-hunting interest. BTK +0.6% DJ30 +76.60 NASDAQ +16.10 SOX +0.8% SP500 +7.87 NASDAQ Dec/Adv/Vol 591/1871/104 mln NYSE Dec/Adv/Vol 501/1915/44 mln

[Roland99]

40. Pretty much been sitting there all day.

[54anickel]

42. Yeah, I keep hitting the refresh when I go to the Yahoo page as it seems

stuck on the same numbers. Sort of in suspended animation mode today.

[54anickel]

44. 12:40 update, then I've gotta run for the day

Dow 12,481.73 74.10 (0.60%)
Nasdaq 2,428.05 14.54 (0.60%)
S&P 500 1,424.14 7.24 (0.51%)
10-yr Bond 4.6460% 0.0430
30-yr Bond 4.7730% 0.0400
NYSE Volume 816,784,000
Nasdaq Volume 636,848,000

12:30 pm : Not much has changed since the last update as a limited number of traders make their way through the New York lunch hour. As a reminder, volume today is expected to be lighter than usual since many on Wall Street are still vacationing. Thus, no matter how substantial a move the market makes to the upside today, barring an influx of volume attributed to program trading and assuming the indices hold onto current gains, another session of limited participation is likely to lend less conviction behind stocks extending their winning streak to two days.DJ30 +74.98 NASDAQ +13.54 SP500 +7.10 NASDAQ Dec/Adv/Vol 953/1987/588 mln NYSE Dec/Adv/Vol 754/2414/422 mln

12:00 pm : Stocks are trading near session highs midday as seasonal factors and more confirmation that the housing market is stabilizing keep the year-end rally intact.

With only three trading days left until 2006 comes to a close, and typically strong upward momentum seen in stocks at the end of the year as investors add this year's winners to their portfolios, today is shaping up to be no exception. After all, outside of today's encouraging housing data, there has been little else in the way of specific news catalysts to account for the market's bullish disposition.

Just after the market opened, the Commerce Dept. showed that sales of new homes rose 3.5% in November to a seasonally adjusted annual rate of 1.047 mln (consensus 1.015 mln) while median sales prices rose 5.8% from a year ago. The data have helped mitigate the worst of fears that the downshift in house price appreciation may spill over into consumer spending.

Even though more proof that the U.S. economy is withstanding the "substantial correction" in housing has taken a toll on Treasuries, perhaps the most notable surprise has been the rate-sensitive Financials sector's resilience in the face of higher borrowing costs. The 10-year note is down 11 ticks to yield 4.64%, a five-week high. In fact, helping to lift the Dow above its all-time closing high intraday has been Citigroup (C 56.12 +1.00), which is up 1.8% at record levels, and JP Morgan Chase (JPM 48.98 +0.67), which is up 1.4% at a new 52-week high.

Another notable sector shrugging off weakness in the an instrument directly tied to the ability to generate earnings is Energy. Despite oil prices extending yesterday's 2.1% sell-off and languishing below $61/bbl, Energy (+0.7%) is only being outpaced, both today and for the year, by Telecom (+0.8%).

Technology (+0.6%) is another bright spot today, getting a big lift from a 1.2% surge in Intel Corp (INTC 20.40 +0.25), this year's worst performing Dow component (-17%). Gains of more than 1.0% in 6 more of the PHLX Semiconductor Sector Index's 18 components are also helping to offset a 2% decline in Apple Computer (AAPL 79.84 -1.67). The bellwether was off nearly 6% earlier following reports that prosecutors are investigating whether Apple falsified stock option documents. BTK +0.2% DJ30 +77.49 DJTA +0.7% DJUA +0.1% DOT +1.0% NASDAQ +13.29 NQ100 +0.5% R2K +0.9% SOX +0.7% SP400 +0.6% SP500 +6.80 XOI +1.0% NASDAQ Dec/Adv/Vol 908/1991/524 mln NYSE Dec/Adv/Vol 711/2424/370 mln

[54anickel]

46. 2:17, the magical hour and they're screaming it now. 12,500!!!!

Dow 12,499.36 91.73 (0.74%)
Nasdaq 2,430.78 17.27 (0.72%)
S&P 500 1,425.98 9.08 (0.64%)
10-yr Bond 4.6660% 0.0630
30-yr Bond 4.7900% 0.0570
NYSE Volume 1,107,351,000
Nasdaq Volume 851,953,000

2:00 pm : The indices are holding steady at sharply higher levels as the fear of missing out on a year-end rally continues to act as today's biggest source of market support. All three majors are now averaging gains of 0.6%. While the Dow Jones Transportation Average is turning in a similar performance, the fact that it is not hitting a historic high alongside its larger cousin -- the Dow Jones Industrial Average (which is 15 points above its all-time closing high of 12471) still leaves the bears some breathing room to make their case that this so-called "bull" market is not yet deserving of such a moniker. Be that as it may, the Dow and Nasdaq are on pace for their best quarterly performances since 2004, which speaks to the underlying bullish tone seen in stocks over the last several months. DJ30 +78.99 NASDAQ +14.34 SP500 +7.42 NASDAQ Dec/Adv/Vol 994/2000/784 mln NYSE Dec/Adv/Vol 814/2408/560 mln

1:30 pm : Equities remain in a relatively narrow trading range, but bonds have recently taken a turn for the worse. Already under pressure across the yield curve in the wake of today's rebound in new home sales, a tepid bond auction has recently contributed to further deterioration in Treasuries. At the top of the hour, $20 bln in new 2-year Treasury notes garnered weak demand from foreign central banks, as evidenced by indirect bidder participation of only 34.7%. That was well below the 56% witnessed in November while a bid-to-cover of 2.46 was the lowest since August. The yield on the 10-year note (-14/32) now stands at 4.65%, which is 25 basis points higher than where it was at the beginning of the month. DJ30 +75.58 NASDAQ +14.90 SP500 +7.11 NASDAQ Dec/Adv/Vol 959/2011/736 mln NYSE Dec/Adv/Vol 811/2395/522 mln

1:00 pm : Buyers remain in control of the action as the indices are holding steady at sharply higher levels. Within the last 30 minutes, buying interest has even returned to crude, lifting the February contract into positive territory. However, the commodity's brief stint into the green merely provided an extra lift to the Energy sector and has had minimal effect on stocks.DJ30 +73.94 NASDAQ +15.24 SP500 +7.29 NASDAQ Dec/Adv/Vol 972/1971/646 mln NYSE Dec/Adv/Vol 774/2415/460 mln

edit for html and to add 1:00 yada

[Roland99]

47. The rich, the fund managers, and brokerages are the only ones benefitting.

If I had a sizeable sum in a 401(k), you can bet your ass I'd be moving most or all of it to bonds.

[DemReadingDU]

48. I moved to bonds last month

Stock market is way too high. What goes up, will come back down. I didn't want to get bit again like I did in 2001, so last month, I moved out of the stock funds and into what I think are safer funds - a bond index fund, and a money market fund.

[Roland99]

49. I was warning people back in 2000 about the coming NASDAQ bust.

That was a no-brainer but greed drives too many people.

[54anickel]

50. Closing - did you hear the crowd roar with delight? Ca-ching!!!!

Dow 12,510.57 102.94 (0.83%)
Nasdaq 2,431.22 17.71 (0.73%)
S&P 500 1,426.84 9.94 (0.70%)
10-yr Bond 4.6540% 0.0510
30-yr Bond 4.7830% 0.0500
NYSE Volume 1,667,374,000
Nasdaq Volume 1,258,115,000

4:20 pm : Stocks rallied Wednesday as year-end seasonality, oil prices hitting one-month lows and more confirmation that the housing market is stabilizing kept the Santa Claus rally intact. Six of the Dow 30 finishing at new 52-week highs, with only three trading days left until 2006 comes to a close, also helped power the Dow to a new record close. The S&P 500 closed at a fresh six-year high, getting help from gains in virtually every (138 of 147) industry group.

With no companies scheduled to report earnings today and concerns still lingering about whether weakness in the housing market will adversely impact consumer spending, investors keyed in on today's only scheduled report to see just how well the U.S. economy is holding up. Then, with yesterday's recovery efforts already carrying over into this morning's opening bell, encouraging housing data provided an additional spark for the bulls wanting more and exacerbated the bears' reluctance to fight historical trends.

At 10:00 ET, the Commerce Dept. showed that sales of new homes rose 3.5% in November to a seasonally adjusted annual rate of 1.047 mln (consensus 1.015 mln) while median sales prices rose 5.8% from a year ago. Even though not too much emphasis should be placed on median sales prices, the fact that they rose for a second straight month (and/or did not decline) helped to alleviate worries that the downshift in house price appreciation may spill over into consumer spending.

While more proof that the U.S. economy is withstanding the "substantial correction" in housing took a toll on Treasuries, the most notable surprise was the rate-sensitive Financials sector's resilience in the face of higher borrowing costs. The yield on the 10-year note (-13/32) rose to 4.65%, a five-week high. Examples of strength were Citigroup (C 56.42 +1.30), which surged 2.4% to a new record, while fellow Dow component JP Morgan Chase (JPM 48.95 +0.64) climbed 1.3% to an intraday 52-week high.

Another notable sector shrugging off weakness in an instrument directly tied to the ability to generate earnings was Energy. Despite oil prices tacking a 1.2% decline onto yesterday's 2.1% sell-off, Energy eventually surpassed Telecom to log the day's best performance among the 10 sectors closing higher. Telecom is up nearly 31% for the year while Energy ranks second with a 23% year-to-date advance.

Technology, which ranks second in terms of influence behind Financials, was another bright spot today. IBM (IBM 97.20 +1.54) climbing 1.6% to its best levels of the year and fellow Dow component Hewlett-Packard (HPQ 41.60 +0.67) also surging 1.6% to a multi-year high provided some notable leadership. Some bargain-hunting interest in Intel Corp (INTC 20.40 +0.25), this year's worst performing Dow component (-17%), and Apple Computer (AAPL 81.52 +0.01) erasing an intraday decline of nearly 6% Apple offered additional sources of sector support.

As was the case yesterday, though, thin volumes offered little conviction behind another day of broad-based buying efforts. BTK +0.3% DJ30 +102.94 DJTA +1.1% DJUA +0.3% DOT +1.0% NASDAQ +17.71 NQ100 +0.6% R2K +1.2% SOX +0.5% SP400 +0.9% SP500 +9.94 XOI +1.2% NASDAQ Dec/Adv/Vol 900/2175/1.23 bln NYSE Dec/Adv/Vol 727/2593/924 mln

3:30 pm : The market is showing no signs of slowing heading into the final stretch as a bullish bias remains firmly intact. As reflected in the A/D line, advancers outpace decliners on the NYSE by a more than 3-to-1 margin while those on the Nasdaq hold a more than 2-to-1 edge. Exacerbating today's rally has been the indices' ability to break through key technical levels of 12,500, 1424 and 2426 on the Dow, S&P 500 and Nasdaq, respectively. However, as was the case yesterday and expected to be the case throughout the week, below average volume lends less conviction on the part of today's broad-based buying efforts. In fact, the Nasdaq just now surpassed the 1.0 bln share mark it normally reaches midday.DJ30 +102.18 NASDAQ +18.34 SP500 +9.91 NASDAQ Dec/Adv/Vol 939/2099/1.0 bln NYSE Dec/Adv/Vol 747/2541/744 mln

3:00 pm : Stocks continue to trade at improved levels, benefiting largely from spirited leadership from a number of blue chips. In fact, of the 27 Dow components trading higher and helping the price-weighted index hit its best levels ever, six (e.g. C, HON, HPQ, IBM, JPM, and MCD) are hitting new 52-week highs. Gains of at least 1.0% from fellow components AA, CAT, GM, HD, INTC, MCD, MRK, T, VZ, and XOM are also keeping the Dow on pace to close at a new record. DJ30 +93.89 NASDAQ +17.80 SP500 +9.20 NASDAQ Dec/Adv/Vol 941/2085/928 mln NYSE Dec/Adv/Vol 769/2518/680 mln

2:30 pm : The major averages are now trading at fresh session highs. Fueling the latest round of buying interest has been a renewed wave of selling pressure in crude oil futures. The February contract is now down more than 1.0% near $60.40/bbl as trading on the NYMEX comes to a close. The fact that energy stocks have barely noticed at all, as the Energy sector enjoys a 0.9% intraday advance, lends further support behind the upbeat tone that has helped lift stocks virtually unabated since bottoming out in July. As a reminder, oil topped out at a record price of $78.40/bbl on July 13.DJ30 +92.39 NASDAQ +17.32 SP500 +9.13 NASDAQ Dec/Adv/Vol 948/2061/856 mln NYSE Dec/Adv/Vol 802/2466/614 mln

2:00 pm : The indices are holding steady at sharply higher levels as the fear of missing out on a year-end rally continues to act as today's biggest source of market support. All three majors are now averaging gains of 0.6%. While the Dow Jones Transportation Average is turning in a similar performance, the fact that it is not hitting a historic high alongside its larger cousin -- the Dow Jones Industrial Average (which is 15 points above its all-time closing high of 12471) still leaves the bears some breathing room to make their case that this so-called "bull" market is not yet deserving of such a moniker. Be that as it may, the Dow and Nasdaq are on pace for their best quarterly performances since 2004, which speaks to the underlying bullishness seen in stocks over the last several months. The Dow Jones Transportation Average is up nearly 9% on the year but is trading 9% below the all-time high it reached in May.DJ30 +78.99 DJTA +0.6% NASDAQ +14.34 SP500 +7.42 NASDAQ Dec/Adv/Vol 994/2000/784 mln NYSE Dec/Adv/Vol 814/2408/560 mln

[54anickel]

51. Dow tops 12,500 - a record

Major gauges rally, sending blue-chip index into uncharted territory, on solid home sales, falling oil.

http://money.cnn.com/2006/12/27/markets/markets_0445/index.htm

NEW YORK (CNNMoney.com) -- Stocks rallied Wednesday, with the Dow Jones industrial average closing above 12,500 for the first time, on falling oil prices, a surprisingly bullish report on home sales and a fresh burst of end-of-year buying.

The Dow Jones industrial average (up 102.94 to 12,510.57, Charts) jumped more than 100 points to end above 12,500 - its highest close ever.

The Nasdaq (up 17.71 to 2,431.22, Charts) composite and the broader S&P 500 (up 9.94 to 1,426.84, Charts) index both rose about 0.7 percent. The Russell 2000 (up 9.56 to 797.73, Charts) small-cap index jumped about 1.2 percent.

Treasury bond prices slumped, boosting yields, while the dollar fell. Oil dipped and gold surged.

"We're seeing some end of the year good cheer," said John Forelli, portfolio manager at Independence Investments.

He said that the Dow hitting a new record was important for the psychology of the market, adding to hopes that the more than four-year old bull market can continue next year.

more...

[citizen snips]

53. Airlines Eye First Post-9/11 Profit

NEW YORK (AP) -- The resurgent airline industry is poised for its first profitable year since before the 2001 terrorist attacks, and analysts are expecting even healthier earnings next year

Higher fares, continued demand for seats and lower operating costs have helped to revive the once-moribund industry. Calyon Securities analyst Ray Neidl said in a recent research report he's looking for a $2.3 billion industry profit this year and $5.6 billion in 2007 earnings.

It's a stark turnaround for an industry that has burned many investors over the years. U.S. passenger and cargo airlines lost a total of $34.97 billion between 2001 and 2005, with losses peaking at $11.01 billion in 2002, according to the Air Transport Association of America.

In recent years, against the backdrop of high fuel prices and aggressive low-cost carrier growth, network airlines lined up to seek shelter in bankruptcy court. There, carriers took advantage of Chapter 11 protection by slashing employees' wages and returning planes to lessors.

more...
http://biz.yahoo.com/ap/061227/airlines_yearender.html?.v=1

[citizen snips]

54. Video Gamers Poised for Upswing

NEW YORK (AP) -- Some of the largest video game publishers are trading at record highs, as the year that saw this industry shift to the next generation of gaming consoles draws to a close.

While some also see 2007 as a transition year for video game makers -- as the new consoles gain traction -- the worst of the industry's cyclical slump is over. Overall investor sentiment has been very positive even on companies like Take-Two Interactive Software Inc., which is facing a slew of legal and financial troubles ranging from a stock options probe to a lawsuit blaming its flagship "Grand Theft Auto" game for real-life killings.

Video game stocks have made tremendous gains since this summer's slump, and most are trading near historical highs. The question is, are they still worth buying?

The stocks have had a "huge run" in the past few months, said Todd Mitchell, an analyst with Kaufman Brothers. But he sees them fully priced in for this holiday season, and predicts they are due for a short-term pullback.

more...
http://biz.yahoo.com/ap/061226/video_games_yearender.html?.v=1