STOCK MARKET WATCH, Monday May 21

[ozymandius]

Source: DU

Monday May 21, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 609 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2329 DAYS
WHERE'S OSAMA BIN-LADEN? 2041 DAYS
DAYS SINCE ENRON COLLAPSE = 2002
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 9
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 May 18, 2007

Dow... 13,556.53 +79.81 (+0.59%)
Nasdaq... 2,558.45 +19.07 (+0.75%)
S&P 500... 1,522.75 +10.00 (+0.66%)
Gold future... 662.00 +4.80 (+0.73%)
30-Year Bond 4.96% +0.04 (+0.90%)
10-Yr Bond... 4.80% +0.05 (+1.01%)






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

---

Read more: DU

[rfranklin]

1. That's an insult to all skunks!

I would call him scum but that would be an insult to pond scum everywhere.

[ozymandius]

5. Maybe she was aiming for the skunk aroma metaphor.

Can you imagine the furor among our Danish friends if Gonzales was pictured as the rotten thing in Denmark?

[Roland99]

6. Dickie Le Pew?

[ozymandius]

2. Today's Market WrapUp

The Dow Theory... Did It Fail?
BY TIM W. WOOD

no it didn't if one decides to change the definition of 'cycles'...

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

[Roland99]

17. Redefine the meaning of success. Just keep lower that bar of expectation!

[ozymandius]

3. Oil prices rise above $65 a barrel

VIENNA, Austria - Oil prices climbed Monday on continued concerns that U.S. refiners are not producing enough gasoline to meet peak summer demand.

The upward trend was held in check, however, with news from Nigeria that a key pipeline hub that had been taken over by protesters for nearly a week had started pumping again.

Light, sweet crude for June delivery gained 34 cents to $65.28 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe.

The contract rose 8 cents to settle at $64.94 Friday after jumping $2.31 in the previous session.

-cut-

With the Northern Hemisphere's summer driving season set to begin in just over a week, energy traders have been concerned that gasoline supplies won't meet demand. A string of planned and unexpected refinery shutdowns have fueled such worries.

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

It's infuriating to see how the game is rigged.

[ozymandius]

4. U.S. gas prices jump more than 11 cents

CAMARILLO, Calif. - The average price of self-serve regular gasoline hit a record high of $3.18, rising more than 11 cents over the past two weeks, according to a nationwide survey released Sunday.

The latest figure topped the record of $3.07 set two weeks ago, which had been the highest price since the average cost of a gallon of gas hit $3.03 on Aug. 11, 2006, according to the Lundberg Survey of 7,000 gas stations across the country.

very short

[Roland99]

7. I finally paid over $3/gal for gas ($3.25). $39 to fill it from a 1/4 tank

[UpInArms]

10. gas hit $3.30/gal in my little backwater community

last Friday.

[ozymandius]

12. Is this going to crimp your travel plans this festival season? n/t

[UpInArms]

14. we have decided to scale down the display

so that it all fits into our aging Subaru wagon - and only one person (ouch during setup and breakdown! - and fewer personal breaks during the show - sigh - but we will persevere) will go to the shows, which we only do regionally now. We quit travelling more than 150 miles to any show about 2 years ago.

Thanks for asking! :hug:

[AnneD]

63. Morning Marketeers....

:donut: and lurkers. I did a bad thing this weekend.

I was scheduled to work at the hospital this weekend. I really wanted to work so badly that I made arrangements not to take my daughter on my weekend. This would be a shocker to those that know me. My daughter is my number one priority. I apologized to her and promised to pick her and her friend up for dinner after she got off work. Well, Saturday morning rolls around. I am dressed, keys in hand, on my way out to the car when they call to cancel me (at 5 in the am, it takes an hour to get ready-you do the math). OK, I am a bit pissed because I could have at least spent Friday night out with my daughter.

Sunday morning, a little after 4, I call the Nursing Supervisor and get a recording. I don't leave a message because I want to talk to a person. I call at a quarter after 4 and leave a message. At about 4:30, I get a call saying I am canceled again. I am too livid to back to sleep. A perfectly beautiful weekend, when I would have had my daughter, has been lost for nothing. I wait til the neighbourhood laundry opens at 6:30 and throw in my clothes. I can still go to church so it won't be a total loss. And hey, at least I didn't have the 80 mile round trip.

Well, 6:56 rolls around and I get a call from my friend at the hospital calling to ask where I was. I told her that I was called off by the Nursing Supervisor. The Nurse told me that I was scheduled to be there and says she will call the NS. Now I am doing the mental math. It will take me over an hour to get there punching the gas. They will not pay me for the full 8 hrs. It will be less than 7 and the floor will be in chaos. It will be one Nurse for 8-11 pts. The math doesn't doesn't add up. The NS calls up and is all kissy face to me and says they made a mistake and called me off when they meant to call the other Ann off (hey, I gave my last name) and oh could I please come in. I told them I did not live around the corner and the quickest I could get there was 2 hours and the pay for working for 6 hours was not worth it, they were better off getting someone that lived closer. They tried to say something about me being scheduled (imagine Vesuvius).I mentioned something about frequent call offs and having a busy schedule and once I was called off....well (I was biting my tongue)and hung up.

I don't know what happened, but I know most of the Nurses on the floor understand where I am coming from. I sent a e-mail to my wonderful boss but told her they had some serious problems in how they treated their supplemental folks. I have 3 job offers and their is no sense in my committing to a job that treats me that way. And at the price of gas, it has to be worth it for me to put the key in the ignition. That won't happen to me again.

I still have 3/4th a tank of that 2.79 gas, but I am looking for the now 2.87 gas. It is 3 and over in most places.

Happy hunting and watch out for the bears.

[54anickel]

16. $3.51 in my neck of the woods, though it's two cents less a bit up the road. n/t

[DemReadingDU]

29. Wow, that is getting high! Gas here was 3.29 last week

now down to 3.09, but inching upwards again

:mad:

[54anickel]

45. Haven't seen any downward movement here for the past 3 weeks. Always

headed up. The last 2 jumps were a dime or better...3.29 to 3.39 to 3.51. Most in the area are at 3.49 - not sure why Mr corner BP thinks he's worth 2 cents more, he does that every so often until he sees his sales drop off. He takes advantage of the locals who tend to fill up there out of habit, then the go around the curve and see it 2 cents less. Hubby used to be one of those "out of habit" customers - now he won't buy there at all.

I dropped my jaw when I saw the national average at 3.119. I know WI has a pretty high gas tax, but what else is making such a huge difference? Summer blends? :shrug:

[Ghost Dog]

56. Peak Oil and the Inflation Lie

http://www.globalresearch.ca/index.php?context=viewArticle&code=CHI20070519&articleId=5697
US government, Wall Street hide energy shortage and crisis with deceptive indicator

In the past few days, news headlines have trumpeted and repeated what is a non sequitur, and a physical and logical impossibility:

Overall Inflation Eases, Gas Prices Up (Associated Press)

Despite Gas Prices, Inflation Eases (Boston Globe)

These nonsensensical statements have already become the basis for economic, political and financial decision-making across the country, as well as internationally.

It is a lie. Here is why.

Rising energy costs are inflation. You cannot have one without the other. Energy, and energy-related material, is the lifeblood of modern industrial life. When the cost of energy (including oil, natural gas, electricity, and the products made with petroleum, such as plastic) goes up, the cost of everything goes up. This is inflation. When energy is depleted, while the use and demand for energy continues to increase, the price of energy skyrockets. Inflation, again.

It is a fact that the world is in the early stages of Peak Oil and Gas---permanent shortage, and permanent depletion. The world oil peak occurred in November 2005, according to renowned scientists, geologists and industry experts.

It is therefore a fact, with permanent shortage with high, rising and insatiable world energy demand, that rising inflation is not only a problem now, but also a permanent condition.

Why are the authorities hiding this?

/continues...

[Ghost Dog]

57. The Peak Oil Crisis: Alarms Are Sounding

http://www.fcnp.com/index.php?option=com_content&task=view&id=1284&Itemid=35
(inked from the above)

Across the world alarm bells are starting to clang. Above every gas station, a large sign is proclaiming that prices are on an unstoppable climb towards un-affordability. In Paris, the International Energy Agency has announced that the demand for oil is likely to exceed the supply later this year, unless, of course, OPEC steps up production. In the Middle East OPEC spokesmen reiterate time after time that all is well, there is plenty of oil, and there is no need to increase production.

In Ottawa, a parliamentary hearing on energy security broke up in turmoil last week when a distinguished professor pointed out that, unless Canada stopped selling 60 percent of its oil to the US, Canadians would soon be “freezing in the dark.” In Nigeria, Chevron is evacuating hundreds of employees to forestall the possibility that they too will be hauled off to the swamps as hostages in an increasingly bitter insurgency. The Chinese just announced that their April oil imports were 23 percent higher than last April’s. Iraq, Saudi Arabia, Venezuela -- everywhere you look – there are unmistakable warnings of troubles to come.

These, however, are issues for later. Right now, on the top of every American’s agenda should be the question of whether we are going to get through the summer without shortages and gas lines— opinions are mixed.

First, all seem to agree that gasoline prices, which set new highs last week, will continue to rise. Even the Director of the Energy Information Agency, whose job it is to put a rosy spin on adverse developments, told a Senate Committee earlier this week that retail prices will go higher heading into the vacation season because not all of the recent rise in wholesale costs has been reflected in what consumers pay at the pump. So far high prices, which are approaching $4 a gallon in some places on the West Coast, seem to have done little to dampen demand although they may be cutting into WalMart sales.

Since significant cuts in US gasoline consumption don’t seem to be in the cards, at current price levels, then we are back to refinery output, gasoline imports, and our stockpiles to see us through.

/more...

[TrogL]

74. Dubya has made it perfectly clear

If Canada does not sell to the US, he will declare economic warfare (remember the timber dispute) or invade. Given Canada's close relationship with China, life could get very interesting indeed.

[Viva_La_Revolution]

88. because the sheeple will freak?

(this is my Rebub. bosses's opinion) He claims you need to lie to the populace because if they think the economy is dropping, they stop spending... and then it really does drop.

I tend to think that if everyone tightened their belts now we could avert some of the severity of the crash (cause it is coming), instead of ignoring it and hoping it goes away.

[Ghost Dog]

58. China and USA in New Cold War over Africa’s Oil Riches

http://www.globalresearch.ca/index.php?context=viewArticle&code=20070520&articleId=5714
Darfur? It’s the Oil, Stupid...

<snip>...

In recent months, Beijing has embarked on a series of initiatives designed to secure long-term raw materials sources from one of the planet’s most endowed regions—the African subcontinent. No raw material has higher priority in Beijing at present than the securing of long term oil sources.

Today China draws an estimated 30% of its crude oil from Africa. That explains an extraordinary series of diplomatic initiatives which have left Washington furious. China is using no-strings-attached dollar credits to gain access to Africa’s vast raw material wealth, leaving Washington’s typical control game via the World Bank and IMF out in the cold. Who needs the painful medicine of the IMF when China gives easy terms and builds roads and schools to boot?

In November last year Beijing hosted an extraordinary summit of 40 African heads of state. They literally rolled out the red carpet for the heads of among others Algeria, Nigeria, Mali, Angola, Central African Republic, Zambia, South Africa.

China has just done an oil deal, linking the Peoples Republic of China with the continent's two largest nations - Nigeria and South Africa. China's CNOC will lift the oil in Nigeria, via a consortium that also includes South African Petroleum Co. giving China access to what could be 175,000 barrels a day by 2008. It’s a $2.27 billion deal that gives state-controlled CNOC a 45% stake in a large off-shore Nigeria oil field. Previously, Nigeria had been considered in Washington to be an asset of the Anglo-American oil majors, ExxonMobil, Shell and Chevron.

China has been generous in dispensing its soft loans, with no interest or outright grants to some of the poorest debtor states of Africa. The loans have gone to infrastructure including highways, hospitals, and schools, a stark contrast to the brutal austerity demands of the IMF and World Bank. In 2006 China committed more than $8 billion to Nigeria, Angola and Mozambique, versus $2.3 billion to all sub-Saharan Africa from the World Bank. Ghana is negotiating a $1.2 billion Chinese electrification loan. Unlike the World Bank, a de facto arm of US foreign economic policy, China shrewdly attaches no strings to its loans.

This oil-related Chinese diplomacy has led to the bizarre accusation from Washington that Beijing is trying to “secure oil at the sources,” something Washington foreign policy has itself been preoccupied with for at least a Century.

No source of oil has been more the focus of China-US oil conflict of late than Sudan, home of Darfur.

/...

[54anickel]

77. Hey GD, Ya notice how we rarely hear any of this stuff from the regular

media and their cheering squads?

:thumbsup: :hi:

[Viva_La_Revolution]

89. Completely explains why the shrub refuses to even discuss helping in Darfur

He wants them killing each other off so he can sweep in like a carnivore and claim the spoils. they're all fucking evil. :mad:

[DemReadingDU]

85. Gas is up to $3.29 now in most places where I live

but did find a station for $3.17 while running errands. I'm sure it will be increased to $3.29 by tomorrow, arrgh

[54anickel]

78. $3.59 in Chicago - highest in the nation.

http://www.chicagotribune.com/business/chi-070521gas-prices,1,7481438.story?coll=chi-news-hed&ctrack=2&cset=true

Chicago now has the highest gasoline prices in the nation, according to a nationwide survey released Sunday.

The average price of self-serve regular gasoline hit a record high of $3.18, rising more than 11 cents over the past two weeks, according to the survey. But Chicago came out tops at $3.59 a gallon.

The latest national average figure topped the record of $3.07 set two weeks ago, which had been the highest price since the average cost of a gallon of gas hit $3.03 on Aug. 11, 2006, according to the Lundberg Survey of 7,000 gas stations across the country.

The latest price also beat the previous inflation-adjusted record of $3.15 per gallon in March 1981.

snip>

The lowest average price for regular fuel was $2.87 in Charleston, S.C.

[ozymandius]

11. I paid $50 to fill my tank yesterday.

The cheapest gas I knew where to find sold regular for $3.09/gal. My tank was almost empty. Thankfully, I average 32mpg - according to the car's computer. This fillup should last me two weeks.

[Roland99]

13. I managed 33.3333 mpg on that tank. Not bad at all!!

Granted it was mostly hwy driving but the last 1/4 tank was almost purely city driving w/AC on. My methods for saving gas are paying off!

[ozymandius]

20. My gas saving methods are helpful too.

I was happily surprised at the immediate benefits of maintaining the recommended tire pressure and cleaning the fuel injectors.

[Roland99]

26. I should probably have those two checked.

I eyeball my tires each day and they look ok but ya never know. I'm due for an oil change, too.

But, the biggest effects I've seen come from turning off the engine at stop lights and coasting to slow down offramps and approaching stoplights/stop signs.

And slowing from 68mph to 62mph.

[ozymandius]

32. Slowing down makes a huge difference.

I drove to Montgomery, AL yesterday to fetch a family member. The difference in gas consumption when traveling 70mph versus 65mph is quite stark in my 1994 Volvo.

[54anickel]

33. I picked up about 5mpg after getting mine back up to snuff. I don't

commute regularly anymore, so I tend to forget about proper maintenance of my old "garbage scow". My tires looked a bit low (they were quite low - I think about 10 -15 psi). I was surprised to get my mileage back up to around 38 mpg. I gotta remember to check them again because I noticed it's been dropping again - way behind for an oil change too.

[TrogL]

75. Lose some weight

I drive a van with removable seats and I only put enough seats in for the load I'm carrying. I haven't had the big rear seat installed in ages.

I also used to carry extra jacks and big cannisters of gasoline, oil, antifreeze and washer fluids but I'm leaving them at home.

I'm surprised the difference its making.

With everything pulled, it drives like a sports car (except for corners).

[Roland99]

76. Getting personal, eh?

:P


I do have some junk in the trunk. :rofl:


No, seriously!

I have a spare tire/wheel I keep there just in case (in addition to the donut). I could lose that.

I've also thought of just filling to 3/4 tank whenever it drops to a 1/4 tank. That extra gas is another weight penalty.

[AnneD]

80. I started cleaning the car out last week...

the car looked good. I noticed how much better the mileage was (ok, I do live in my car). When school is out-the trunk gets cleaned. It really does run better without the junk in the trunk. Time for me to work on the other trunk too.

[Roland99]

81. Well, I'm back on my diet in full-force today!

The pools open this weekend so I figured it's finally time to lose the winter insulation!

And, I'll get better gas mileage to boot(y)!! ;)

[trogdor]

36. I'm sure if there's any $3.09 gas out there.

...my son will find it. He's good like that. I figure at that rate, it will cost around $30 to fill my tiny little Scion xA. Sad.

[ozymandius]

43. 3.09/gal has become an endangered species.

While driving I-85 through Chambers County in western Alabama yesterday - I found gas for 2.99/gal. Nothing less. One can forget about finding that price anymore here in Atlanta's downtown area.

[modrepub]

59. $2.859 this morning

Most other stations are @ ~$3 in my area. Got real lucky, don't suspect I'll be filling my tank for under $30 for the rest of the summer.

[ozymandius]

44. Gas prices: Worse than '81 oil shock

Gas now at highest level, even adjusted for inflation; AAA's reading of nearly $3.20 a gallon marks ninth straight record high in current dollars.

-cut-

While gasoline had already been in record territory in current dollars, Trilby Lundberg, publisher of the survey, said this is the first time that her survey topped her 1981 record high when adjusted for inflation. The price of $1.35 in 1981 works out to $3.15 in current dollars, she said. The Iran-Iraq war, which started the year before, choked off oil supplies to the global market, causing that spike in prices.

The motorist group AAA does a daily survey of up to 85,000 gas stations, but that reading does not go back to the 1981 spike. It's survey has been showing a series of record high prices in current dollars since May 13, and Monday the average price for a gallon of self-serve unleaded hit $3.196, the ninth straight record high and up from Sunday's record of $3.178.

-cut-

Topping post-Katrina records

Before this recent run of record-high gas prices, the highest price ever recorded in current dollars was $3.057 in the AAA survey, which was set Sept. 4 and Sept. 5, 2005, in the wake of Hurricane Katrina. That storm disrupted refinery operations and pipelines and caused a temporary spike, sending prices above the $3 mark for eight days.

http://money.cnn.com/2007/05/21/news/economy/record_gas_monday/index.htm?postversion=2007052108

[54anickel]

61. Meanwhile - Federal highway fund could run dry in two years

http://seattletimes.nwsource.com/html/nationworld/2003715483_gastax21.html

WASHINGTON -- A cash crunch is fast approaching for the government trust fund that pays to build and repair highways and bridges.

The federal tax on a gallon of gas has not risen in 14 years, and Congress is reluctant to increase it. People are demanding more fuel-efficient vehicles -- less gasoline used, fewer dollars for the fund.

States already are looking for other places for road-building money -- toll-road and consumption-based sales taxes, for example. They worry that the fund's looming shortage could hurt their efforts to address traffic congestion, as well as environmental and safety problems caused by inadequate roads.

The situation can only get worse in 2009, when revenues for the Federal Highway Trust Fund are expected to begin falling short of planned federal spending.

snip>

Turning elsewhere

About 45 percent of all highway spending comes from the trust fund. With less money available from the fund, states must turn elsewhere for money to expand their highways and fill their potholes. That prospect is making lots of people unhappy.

• Indiana, facing a $1.8 billion gap in money needed for road improvements, negotiated a $3.85 billion deal with an Australian-Spanish consortium to lease and operate the Indiana Turnpike for 75 years. Voters expressed their displeasure, electing Democrats to replace a Republican-run House that signed off on the deal.

more...

[UpInArms]

8. dollar watch

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

Last trade 82.458 Change +0.283 (+0.34%)

Dollar Weakens as Chinese Yuan Revaluation Reduces the Need for Buying

http://www.dailyfx.com/story/bio1/Dollar_Weakens_as_Chinese_Yuan_1179523426091.html

The world turned its focus to the currency market today as China made its second most significant revaluation move in two years. The central bank of China announced this morning that they were widening the trading band for the Yuan, increasing reserve requirements and raising interest rates. The last time China revalued its currency was in July 2005 and just as that move came a week after the US imposed a timetable for Chinese revaluation, this move comes in the midst of the G8 meeting and a week before a Chinese delegation arrives in the US for talks with Treasury Secretary Paulson. This politically well timed move is characteristic of most moves made by China. As a proxy for Asian strength or weakness, the latest announcement has sent the Japanese Yen rallying. It has also sent the US dollar lower since a wider trading band means that China will need to buy less US dollars. The stock markets around the world have yet to react and they may be looking to the Chinese market for clues. The announcement was made after the close of trading in Shanghai, which means that we will need to wait until Sunday night to see how Chinese investors really feel about this triple blow. In the meantime, the US dollar still ends the week stronger against most of the major currencies. The more promising outlook on the labor market has helped to offset the burden of higher gasoline prices and concerns about housing. The US economic calendar next week is light especially in the front end of the week. The only potentially market moving data are durable goods, new home sales and existing home sales on Thursday and Friday.

...more...

Dollar Holds Its Ground

http://www.dailyfx.com/story/strategy_pieces/trade_or_fade/Dollar_Holds_Its_Ground__Will_1179724855958.html

On Wednesday we wrote,” The EURUSD continues to range trade between 1.3450 and 1.3650 and will likely remain contained within that zone unless one or the other of the following factors becomes clear to the market – 1). ECB willing to raise rates beyond the 4% level or 2). US economy tipping into a recession. Neither one of those scenarios can be forecast with any degree of certainty just yet which explains the meandering price action in the pair this week.”

Indeed much to the dismay of dollar bears US data was surprisingly strong, led by a very healthy rebound in Industrial Production which increased 0.7% vs. -0.2% the month prior. The second consecutive sub-300K print in weekly jobless claims also served as a strong counterargument to the doomsday scenarios of massive unemployment caused by the housing slowdown. In short, the news of dollar’s death has been greatly exaggerated. The unit continues to hold its ground as US economic data is not nearly as dour as the market expected.

Next week the calendar is sparse but it contains key data from the housing sector. In order for dollar bulls to make more progress the housing data must show some signs of stabilization. Last weeks very low reading from the NAHB which dipped to 30 from 33 expected provides little positive news for greenback bulls. Nevertheless if sales of New and Existing homes show even a slight improvement, the dollar could see further strength as the recession hypothesis becomes less and less likely.– BS



...more...

and it appears that after Kuwait untied from US dollar, a little "help" showed up on the horizon :eyes:

[54anickel]

21. Kuwait abandons US dollar currency peg

http://news.yahoo.com/s/ft/20070520/bs_ft/fto052020071356196889;_ylt=AhbaY7RpH0u2ofpwIcZMksf2ULEF

Kuwait on Sunday removed its currency peg to the US dollar, throwing plans for a Gulf currency union by 2010 into doubt and raising the prospect that other oil-producing states might abandon long-held dollar pegs.

Sheikh Salem Abdelaziz Al Sabah, governor of the Central Bank of Kuwait, told the official Kuwait news agency that the decision had been made owing to the "detrimental effects of the pegging system to the national economy".

Since late last year, Kuwaiti officials have hinted that the country would revert to a basket of currencies to prevent the sliding dollar increasing the cost of imports, which has stoked inflation to more than 4 per cent, double the historic average. This has encouraged speculators to plough billions of dollars into the dinar over the past few months, betting that the central bank would allow the dinar to appreciate.

On Sunday, the dinar traded up 0.4 per cent as the central bank replaced the peg with a basket of undisclosed currencies. The central bank had allowed the currency to vary up to 3.5 per cent from the peg, but the dinar had been at the top end of the approved trading band for a year owing to the continuing weakness of the dollar and the strength of Kuwait's oil-driven economy.

The dollar is expected to make up about 75-80 per cent of the new basket, reducing the third largest Arab oil exporter's exposure to the weakening dollar.

Kuwait dropped its currency basket in 2003, adopting a dollar peg as part of the Gulf Co-operation Council countries' drive to create a unified economic block with a single currency by 2010. But doubts over the ability of the GCC economies to harmonise have arisen, with one member of the six-nation council, Oman, saying it would not meet the convergence criteria.

more...

I wonder if there was more behind that 2003 move to a peg? :freak:

[ozymandius]

35. 2003 was a pivotal year for the dollar and U.S. hegemony.

Back then America's Big Brother status seemed invincible. I'm sure Kuwait's abandonment of the peg has something to do with neocons defecating all over everything they touch.

[54anickel]

49. Invincible. Yep, while we were beating the war drums, followed by Dimson's

Mission Accomplished photo-op. I'll bet they figured "freedom and democracy" were about to march all across the ME as Iraq became the next Puerto Rico.

[ozymandius]

37. An Ugly Chart from the WSJ via Bonddad's blog

Here is a long-term dollar chart from the Wall Street Journal. The article dealt with a different topic. I simply wanted to put up this chart to show what the dollar chart looks like right now. It's not a pretty picture.

[54anickel]

46. OECD says policy to blame for buy-outs

http://news.yahoo.com/s/ft/20070520/bs_ft/fto052020071740486919;_ylt=AuX0b3HMY7UXPp7sfMoakyX2ULEF

Lax monetary policy in countries such as China and Japan is fuelling the boom in private equity buy-outs that is worrying regulators and unions across the world, according to a report published on Monday.

It is pointless for policymakers and the media to "shoot the messenger" by blaming record buy-out activity on private equity groups or the investment banks that supply them with debt, says the Organisation for Economic Co-operation and Development.

The report says "distortions" in the global financial system - similar to those created by the Louvre Accord to shore up the US dollar in the late 1980s - are being exploited by the use of new derivatives products.

The resulting excess liquidity is pushing up asset prices, increasing the risk of over-leveraged deals.

"It is a basic proposition that if one fixes the price of money in parts of the world economy, one will not be able to control its supply," says Adrian Blundell-Wignall, deputy director of financial and enterprise affairs at the OECD, who wrote the report.

"The recycling of this money is an integral part of the arbitrage opportunity that is driving the private equity boom," says Mr Blundell-Wignall, a former Citigroup analyst in Australia.

more...

[54anickel]

54. Rank Order - Current account balance (check out the top 20)

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2187rank.html

Rank Country Current account balance Date of Information
1 China $ 179,100,000,000 2006 est.
2 Japan $ 174,400,000,000 2006 est.
3 Germany $ 134,800,000,000 2006 est.
4 Russia $ 105,300,000,000 2006 est.
5 Saudi Arabia $ 103,800,000,000 2006 est.
6 Norway $ 63,330,000,000 2006 est.
7 Switzerland $ 50,440,000,000 2006 est.
8 Netherlands $ 50,170,000,000 2006 est.
9 Kuwait $ 40,750,000,000 2006 est.
10 Singapore $ 35,580,000,000 2006 est.
11 Venezuela $ 31,820,000,000 2006 est.
12 Sweden $ 28,610,000,000 2006 est.
13 United Arab Emirates $ 26,890,000,000 2006 est.
14 Algeria $ 25,800,000,000 2006 est.
15 Hong Kong $ 20,900,000,000 2006 est.
16 Canada $ 20,560,000,000 2006 est.
17 Malaysia $ 17,860,000,000 2006 est.
18 Libya $ 14,500,000,000 2006 est.
19 Brazil $ 13,500,000,000 2006 est.
20 Iran $ 13,130,000,000 2006 est.


Just a drop in the bucket though... :eyes:

163 United States $ -862,300,000,000 2006 est.

[Gregorian]

62. Will banks fail if the dollar continues to fall?

I've been wondering about this for ages. Any insight would be appreciated.

[mojavekid]

87. Daily Pfennig 5/21/07: Loonie Hits 92 Cents!

http://www.kitcocasey.com/displayArticle.php?id=1395

Friday was a real bummer with regards to currency movements... Negligent at best, would describe any currency movements on Friday. Except that Canadian dollar/loonie! (More in a minute.) We did have a country drop the dollar peg over the weekend... But no big shakes... Kuwait dropped their dollar peg, which had been in place since 2003, and replaced it with a basket peg... Sort of like China's... Of course we have no idea what the basket consists of, but given the fact that imports from Europe have become quite expensive for Kuwait with the euro so strong, I would suspect the euro to be a main entry in the basket.

On Friday, I wrote about the Canadian dollar/loonie, and how it was performing quite nicely along side a stronger-than-expected economy. A Canadian reader sent along a note to cool my enthusiasm, but just this morning I read a note that a tech/charts guy at Goldman Sachs is saying that his charts tell him that the loonie could reach 96 cents! Ok... You know me and charts guys... Fundamentals are more important to me... But since I had already talked about the fundamentals on Friday, I thought the charts information would assist here... And oh by the way... Loonies hit 92 cents this morning!

Also on Friday, we saw the U. of Michigan Consumer Confidence rise... What? Oh well... I guess people are feeling pretty good about paying over $3 a gallon of gas, eh? I wonder what they will say when it gets to $4 a gallon? Or... When all their savings, that is, if they have any, is spent on filling their gas tank... Don't you wonder just what the heck is going through anyone's mind that is confident right now? Well... I'm confident... I'm confident that things are going to get a lot worse in the coming months... But then, they don't ask me!

more...

[ozymandius]

9. Alltel agrees to $27.5 billion buyout

LITTLE ROCK, Ark. - A pair of investment firms have agreed to acquire Alltel Corp., the fifth-biggest U.S. wireless company and owner of the nation's largest geographic network, in a deal worth $27.5 billion.

The telecommunications company announced Sunday that it had signed an agreement to be acquired by TPG Capital, formerly Texas Pacific Group, and GS Capital Partners, a subsidiary of Goldman Sachs.

-cut-

The deal, if approved by shareholders and regulators, is expected to close during the fourth quarter of this year or the first three months of 2008, Alltel said.

Alltel has about 12 million cell-phone customers, mainly in the South, West and Midwest. That ranks it fifth in number of customers, after Cingular, Verizon, Sprint and T-Mobile, but the company's service "footprint" is larger than any of those rivals, Ford said.

The agreement calls for the two investment firms to acquire all of the outstanding common stock of Alltel for $71.50 per share in cash. According to Alltel, that represents a 23 percent premium over Alltel's share price before word of a possible buyout first appeared in the media on Dec. 29.

http://news.yahoo.com/s/ap/20070521/ap_on_bi_ge/alltel_buyout

[Robbien]

60. An M&A for $27 billion and it barely gets a mention

Not only that, one of the two partners buying Alltel is only a subsidiary of Goldman Sachs.

Heady business.

[cosmicdot]

90. wonder how Warren and Jackson Stephens made out?

Warren was made an Alltel Director in 2002, and owns over 9 million shares of stock.

those Arkansas good ol'boys at work - they own Senator Blanche Lincoln


from the recent proxy:

Warren A. Stephens 9,091,314 shares 2.5%


Alltel's Board of Directors
`````````````````````````````

Scott T. Ford, President and Chief Executive Officer of Alltel; prior to July 1, 2002, President and Chief Operating Officer of Alltel. Director of Tyson Foods, Inc. Director of Alltel since 1996. Chairman of Executive Committee. Age 44.

Lawrence L. Gellerstedt, III, President of the Office/Multi-Family Division of Cousins Properties, Inc., Atlanta, Georgia (real estate investment firm and property management services provider); prior to July 1, 2005 Chairman and Chief Executive Officer of The Gellerstedt Group, LLC (real estate investment firm and construction and property management services provider); prior to June 1, 2003, President and Chief Operating Officer of The Integral Group. Director of Advisory Board of SunTrust Bank, Atlanta, and Rock Tenn Company. Director of Alltel since 1994. Chairman of Governance Committee and member of Executive Committee. Age 50.

Emon A. Mahony, Jr., President and Director of Mahony Corporation, El Dorado, Arkansas (family investment company); Managing Partner in EAM Company, LLC, El Dorado, Arkansas (family investment company). Director of Alltel since 1980. Member of Executive Committee. Age 65.

Ronald Townsend, Communications Consultant, Jacksonville, Florida. Director of Rayonier Inc. Director of Alltel since 1992. Member of Executive and Audit Committees. Age 65.

John R. Belk, President and Chief Operating Officer of Belk, Inc., Charlotte, North Carolina (department store retailer). Director of Ruddick Corporation and Belk, Inc. Director of Alltel since 1996. Member of Compensation and Governance Committees. Age 48.

Peter A. Bridgman, Senior Vice President and Controller of PepsiCo, Inc., Purchase, New York (global snack and beverage company). Director of Alltel since 2006. Chairman of Audit Committee and member of Compensation Committee. Age 54.

John W. Stanton, Managing Director, Trilogy Equity Partners, Bellevue, Washington (private investment company); prior to August 1, 2005, Chairman of the Board and Chief Executive Officer of Western Wireless Corporation (telecommunications company). Director of Hutchison Telecommunications International and Columbia Sportswear. Trustee of Whitman College. Director of Alltel since 2006. Age 51.

Warren A. Stephens, President, Chief Executive Officer, and Director of Stephens Inc. and President and Manager of Stephens Investment Holdings, LLC, each of Little Rock, Arkansas (investment banking firm and diversified investment company, respectively). Director of Dillards Inc. and ACA Capital Holdings, Inc. Director of Alltel since 2002. Member of Executive Committee. Age 50.

William H. Crown, President and Chief Executive Officer of CC Industries, Inc., Chicago, Illinois (diversified investment company); Vice President of Henry Crown and Company, Chicago, Illinois (diversified investment company); Vice President of Dane Acquisition Corp., Chicago, Illinois (semi-truck trailers and accessories manufacturer). Director of Alltel since 2004. Member of Audit and Governance Committees. Age 44.

Joe T. Ford, Chairman of the Board of Alltel; prior to July 1, 2002, Chairman and Chief Executive Officer of Alltel. Director of Textron Inc. and EnPro Industries, Inc. Director of Alltel since 1960. Age 69.

John P. McConnell, Chairman, Chief Executive Officer and Director of Worthington Industries, Inc., Columbus, Ohio (metal processor and manufacturer). Director of Alltel since 1994. Chairman of Compensation Committee and member of Audit Committee. Age 53.

Josie C. Natori, President and Chief Executive Officer of The Natori Company, New York, New York (upscale fashion house). Director of The Philippine American Foundation. Trustee of Asian Cultural Council. Director of Alltel since 1995. Member of Compensation and Governance Committees. Age 59.

http://www.sec.gov/Archives/edgar/data/65873/000119312507081656/ddef14a.htm

3 players involved contributed to her: Stephens, Goldman Sachs and Alltel - a trifecta!

BLANCHE LINCOLN (D-AR)
Top Contributors

1 Stephens Group $31,000
2 Wal-Mart Stores $29,100
3 DaVita Inc $27,000
4 Goldman Sachs $25,000
4 Hartford Financial Services $25,000
6 Connell Co $24,000
7 Alltel Corp $23,000

[54anickel]

15. Worries grow over pension investments in hedge funds (Bout Time!)

http://www.chicagotribune.com/business/chi-0ret4ljmay20,0,3494056.story?coll=chi-business-hed

When the hedge fund Amaranth Advisors LLC flamed out last year after disastrous bets on energy prices, San Diego County's retirement fund was among those burned. Losses to its portfolio were estimated at $100 million.

The episode is unlikely to stem the rising tide of pension dollars into hedge funds. It has, however, raised concerns about the safety of retirement money and stirred debate on whether more oversight is needed.

"Amaranth is a glaring example of the loss that can take place and the risk that exists when public pension systems invest in hedge funds," said Lani Lutar, president of the San Diego Taxpayers Association."At the end of the day taxpayers could be left holding the bag."

Hedge funds utilize an array of trading techniques to pursue lucrative returns, sometimes shifting strategies with dizzying speed and often using debt to enhance the payoff. Retirement plans, facing burdensome financial obligations in the future, will have nearly $200 billion in these funds by 2010, said Daniel Celeghin, associate director of consulting firm Casey, Quirk & Associates.

This may prod some retirees to keep an eye on how their pension money is being invested and to examine whether new risks are entering the picture. Getting the information may take effort -- and some funds make it easier than others.

snip>

"For many of these funds, lack of transparency is part of the business model -- and this is ridiculous," said Stephen Brown, a finance professor at New York University's Stern School of Business.

In February, a Bush administration working group concluded that discipline of the marketplace was sufficient to safeguard investors. Still, the lack of oversight and transparency means hedge fund investors have a particular burden to learn about the risks they are taking on, many observers say.

more...

It felt so lonely for a while, being among the handful of worriers while most articles claimed hedge funds were great for pensions. Wonder if it was Bush's green light that's got them second guessing. Seems everything he's behind turns out to become a shit storm.

[54anickel]

18. World Bank crisis bares chasm between Europeans, Americans

http://news.yahoo.com/s/afp/20070520/ts_afp/worldbankwolfowitzuseurope_070520110441;_ylt=AsN_qU2PcrIQ_i2DQjsdauemOrgF

snip>

"Wolfowitz's departure may have been justified, but his leaving had more to do with the bureaucracy's resentment of his role in the Iraq war and his internal reform initiatives than about his lapse of ethics," said Ian Vasquez, director of the Center for Global Liberty and Prosperity at Cato Institute, a Washington think tank.

Wolfowitz himself felt he was a victim of an urge for revenge that fired up some of his opponents.

As early as April 12, when the crisis sparked by charges of favoritism first erupted, he declared to his critics that he did not work for the US government any more and represented only the bank and its 185 members.

Wolfowitz announced Thursday he would resign on June 30 after a bank panel found he had violated the organization's code of conduct by arranging a hefty pay and promotion deal for his girlfriend, a fellow bank employee.

"I think a lot of agendas converged in taking down Paul Wolfowitz," argued Steve Clemons, an expert with the New America Foundation.

"I think there was residual resentment of Wolfowitz's treatment of Europeans and the whole kind of international process that lay just beneath the surface of much of this. But it wasn't the determining factor," he said.

By tradition, the president of the World Bank is chosen by Americans while the head of the International Monetary Funds (IMF), the sister institution, is selected by Europeans.

A number of voices, including those coming from non-governmental organizations and some governments, rose in favor of abandoning that unwritten rule.

Dutch Development and Cooperation Minister Bert Koenders pointed out Friday that qualifications criteria should prevail in the selection of a future bank president over nationality.

But that approach would probably mean that Americans would ask Europeans to renounce their claim to leadership at the IMF, a request the latter would most likely find "unpalatable," insisted Devesh Kapur, author of a history of the IMF.

more...

Notice how all that rigging of security clearance that was done has completely dropped from this story. That's the real crime that being committed by this mal-administration. National Security is nothing more than a tool to control the masses and a cover for their immoral, unethical, if not illegal shenanigans.

[54anickel]

19. Blackstone boosts IPO after Beijing takes $3bn stake

http://www.ft.com/cms/s/4b717f78-06fd-11dc-93e1-000b5df10621.html

The Chinese government is to use $3bn of its vast foreign exchange reserves to buy a 9.9 per cent stake in Blackstone, the US buy-out fund, in an unprecedented move that underlines Beijing’s desire to tap into the private equity boom.

The investment will coincide with Blackstone’s landmark $40bn-plus stock market listing, expected in the next few months, and will allow the private equity group to nearly double its original target of raising $4bn.

News of the deal came as Blackstone unveiled details of initial public offering. The group said on Monday that it would raise up to $4.75bn – higher than the previously expected $4bn – through the issue of 133.3m common units at $29-$31 apiece.

Blackstone said it will China sell $3bn of non-voting common units at a 4.5 per cent discount to the IPO price. The number of non-voting common units purchased by the Beijing investment vehicle will be reduced if necessary so that its equity interest in Blackstone remains under 10 per cent, Blackstone said in a filing with the Securities and Exchange Commission.

Beijing has also agreed to keep the stake for at least four years.

Stephen Schwarzman, Blackstone’s chief executive, hailed the Chinese deal – the first time Beijing has invested its foreign reserve in a commercial transaction – as an “historic event that changes the paradigm in global capital flows”.

more...

On edit - sorry, this is in the wrong spot, meant to reply to the OP. :blush:

[Rose Siding]

48. This seems significant

Blackstone is a Carlyle Group rival. Are they as politically "connected"? (read: mobbed up)

[Robbien]

83. The head of Blackstone is Steve Schwarzman

Then again, given that Steve Schwarzman raised $1.2 million last month for Republicans during a New York fund-raiser at his 34 room apartment featuring his Yale dorm mate -- George W. Bush -- maybe China's investment in Blackstone is Bush's payback for Schwarzman's fund-raising.

http://www.bloggingstocks.com/2007/05/20/is-chinas-investment-in-blackstone-a-bush-payback-to-schwarzman/

So Blackstone's Schwarzman was Junior's dorm roomie. Heh.

I wouldn't say Blackstone and Carlyle are rivals so much as they are friendly competitors. In fact they often partner up on many acquistions. The elite just doing business with the elite.

[54anickel]

51. Tax fears over Blackstone IPO

http://www.ft.com/cms/s/3681305c-fbfb-11db-93a4-000b5df10621.html

Published: May 6 2007

Blackstone’s plans for a $40bn stock exchange listing as a tax-favoured private equity partnership could be undermined by a new initiative in the US Congress.

Both Republicans and Democrats on the lead tax-writing committees in Congress have been pushing for several weeks to tighten the general taxation treatment of private equity and hedge funds as they seek fresh revenues to fund spending.

But the US buy-out group’s announcement in March that it will list as an entity that is not currently liable to corporation tax has prompted congressional aides on both sides of the political divide to launch a new front in the assault. In particular, say people familiar with the discussions, there is a drive to tighten a loophole in the law to prevent listed private equity funds claiming partnership status.

Senate finance committee aides will meet privately on Monday with the US Treasury, the Internal Revenue Service and independent experts to discuss changing tax laws to make these groups – and their highly paid partners – pay more tax.

The principal focus of Monday’s discussions will be a suggestion to treat carried interest – the 20 per cent share of the profit generated by the funds’ investments – as ordinary income rather than capital gains. This would more than double the tax rate paid by private equity partners on their main source of income.

The review is still at an early stage and no formal proposals have been put forward. But the increasing likelihood of a change in carried interest tax is motivating other buy-out groups to consider following Blackstone’s lead and attempt initial public offerings. Blackstone’s proposed structure is similar to other listed partnerships and would create subsidiaries that would pay tax on income that does not qualify for partnership status. The IPO prospectus warns potential investors of the possibility that its bid to be treated as a partnership could fail.

more...

[54anickel]

22. Credit-Default Swaps Spur Fastest Derivatives Growth in 9 Years

http://www.bloomberg.com/apps/news?pid=20601103&sid=aYNwwkZ3PLdQ&refer=us

May 21 (Bloomberg) -- The global derivatives market grew at the fastest pace in at least nine years during 2006 as the amount of contracts based on bonds more than doubled to $29 trillion, the Bank for International Settlements said today.

Derivatives covering bonds and loans rose by $15 trillion last year, the Basel, Switzerland-based bank said on its Web site. The total amount of over-the-counter contracts whose value is derived from price changes of bonds, currencies, commodities and stocks, or events like interest rates or the weather rose 39.5 percent to $415 trillion, the biggest jump since the BIS began compiling the data.

Morgan Stanley, Bear Stearns Cos. and Deutsche Bank AG depended on credit derivatives to report first-quarter profits that beat analyst forecasts. Federal Reserve Chairman Ben S. Bernanke said last week that the contracts ``increased the resilience'' of financial markets, while warning that they may be exploited by investors to profit from insider trading.

``Derivatives are now a major contributor to investment bank earnings,'' said Jerry Del Missier, co-president of Barclays Capital in London, the biggest underwriter of European bonds last year. ``Credit derivatives will continue their high growth path for a long time yet, and that growth rate will be higher than any other market.''

The actual money at risk through credit derivatives increased 93 percent to $470 billion last year, the BIS said. The amount at stake in the entire derivatives market is $9.7 trillion, according to the BIS, which was formed in 1930 to monitor financial markets and regulate banks.

more...

[54anickel]

24. The effect of collateralised debt should not be underplayed

http://www.ft.com/cms/s/43249db8-04dd-11dc-80ed-000b5df10621.html

Once upon a time, it was presumed that the actions of central bankers controlled behaviour in the risky lending world. For if central banks jacked up rates, the argument went, the cost of borrowing would rise - making it harder for highly leveraged groups, such as buy-out funds, to snap up deals.

Now, however, this argument is looking a touch quaint. In the last couple of years, Western central banks have indeed been raising rates. Meanwhile, investors have had to contend with minor matters such as surging oil prices, Middle East turmoil, and now subprime woes. Yet, the credit party has continued, seemingly oblivious - triggering a buy-out frenzy.

So could anything else take the punchbowl away? Some bankers are now starting to mutter quietly about one risk that is not often discussed - the collateralised debt obligation world. For though the CDOs certainly do not have the debating glamour of a small war or central bank, they have helped power the credit bubble. Thus the question now is whether trends in this sector could also now deliver a jolt.

First, however, a quick finance recap: a CDO essentially is a pool of debt assets, in which investors take stakes with different levels of risk, a little like the way mutual funds operate in the equity world. They have existed for many years, particularly in the US. However, in the last couple of years the sector has exploded, particularly in Europe, where collateralised loan obligations - which buy risky loans -- have spread like wildfire.

This, unsurprisingly, has roiled credit markets. After all, if a hundred new well-funded mutual funds suddenly appeared, it would not be hard to imagine the impact on stock markets. So, too, the sudden proliferation of asset-hungry CDOs has raised debt prices, making borrowing increasingly cheaper for buy-out groups. Last week alone, for example, another $4.5bn new CDOs came on tap wanting to buy assets - and another $57.7bn are now in the pipeline, according to JPMorgan.

But now there are ominous rumblings from CDO land. Rumours are circulating that some funds have suffered losses from the recent subprime debacle. While no funds have folded as a result, this has the potential to dent iconfidence (or at least prompt them to demand a higher price when they invest in these funds). Indeed, I am told some smart money is already furtively creating vehicles designed to feed on sickly CLOs. This week in London, Park Square Capital created a new credit fund which publicly declared that it expects to see a CLO shakeout - and prey on this.

more...

[54anickel]

65. Hedge funds seen untrimmed by regulation after G8 meet

http://news.yahoo.com/s/afp/20070520/bs_wl_afp/g8bisbankeconomyinvestmentregulator_070520055938;_ylt=AiVI9mmJN5Q7PZtDPiv3fdSmOrgF

GENEVA (AFP) - Hedge funds look set to retain their dynamic role in the financial markets without fear of external regulation, though international central bankers urged the industry to do more to ensure discipline and transparency.

G8 finance ministers meeting this weekend rejected calls from their host, Germany, to move towards a voluntary code of conduct for the booming industry.

Instead, the ministers spoke only of the need for "vigilance" in monitoring hedge funds.

"Given the strong growth of the hedge fund industry and the increasing complexity of the instruments they trade, we reaffirmed the need to be vigilant," the finance ministers of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States said in a joint statement on Saturday.

This tallies with comments by the Bank for International Settlements -- the Basel, Switzerland-based 'central bank of central bankers' -- which said hedge funds were an important source of market dynamism.

Hedge funds "have generally been a spur to continuing financial innovation, and, by absorbing risk, have provided greater depth and liquidity to financial markets," the bank said in its first report on the industry since 2000.

Hedge funds now account for a significant share of turnover in many markets and of core financial institutions' dealing volume and trading revenues, it said.

more...

[54anickel]

66. The alchemists of finance

http://www.economist.com/surveys/displaystory.cfm?story_id=9141486

AT LEAST since 1823, when Byron's Don Juan described “Jew Rothschild, and his fellow Christian Baring” as the “true Lords of Europe”, investment bankers have inspired awe, envy and, rightly or wrongly, a measure of disdain. Exactly 100 years ago the undisputed patriarch of the modern industry, J. Pierpont Morgan, stemmed the Panic of 1907, a financial crisis caused by unregulated trusts (the hedge funds of their day). Acting, in effect, as lender of last resort from his Wall Street office, he was briefly feted before Americans realised the danger of having such power vested in one man. Cartoonists then mercilessly mocked him. After his death in 1913 the Federal Reserve was set up.

The investment-banking industry was further constrained during the Depression of the 1930s, when Wall Street firms such as that founded by Morgan were split into commercial banks and securities houses. The latter—today's investment banks—underwrite stocks and bonds and advise companies on mergers and acquisitions, rather than collect deposits and make loans. In the 1980s and 1990s they developed a reputation for gluttonous excess. But a lot has changed since then.

Intensely private partnerships have become publicly traded companies. Commercial banks such as Citigroup and JPMorgan Chase have muscled back into investment banking. And European warhorses such as Deutsche Bank, UBS and Credit Suisse have joined the race for global supremacy. The bets, and the profits, have got bigger, though investment banks are trying to keep quiet about that, for several reasons.

First, they are under more scrutiny. Wall Street firms had their wings clipped by Eliot Spitzer, New York's former attorney-general, for plugging worthless shares during the dotcom era. Being publicly traded companies has tamed some egos, too. Star traders do not enjoy the same headroom on salaries (albeit very large salaries) as they did when they were partners in the business. At UBS, a Swiss bank which in 2000 moved into the American equity markets by merging with PaineWebber, a brokerage, “fiefs” are explicitly banned. Richard Fuld, boss of Lehman Brothers, a fast-growing Wall Street firm, imposed a “one-firm culture” when it was spun off from American Express in 1994. Now, says Scott Freidheim, a top executive, Mr Fuld uses “culture” in speeches more often than any other word except “the”.

Meanwhile another group has overtaken the investment banks in the excess stakes: their money-spinning clients in the private-equity and hedge-fund industries. Already they throw the biggest parties, do the boldest deals and launch the most celebrated initial public offerings. The IPO of part of Blackstone, a private-equity group, might well raise more money than Goldman Sachs's did in 1999, when even the company's doormen and drivers became extremely rich.

more...

[ozymandius]

23. Economists foresee sluggish 2007 growth

WASHINGTON - Weighed down by a housing slump, the economy in 2007 will log its most sluggish growth in five years. But that showing should not cause businesses to really clamp down on hiring, economic forecasters say.

A forecast released Monday by the National Association for Business Economics puts the growth of the gross domestic product at 2.2 percent for this year. The rate was 2.7 percent in the group's previous survey, in February.

If the latest prediction proves correct, the growth rate would be the weakest since 2002. Back then, the fragile economy was emerging from a recession and grew by just 1.6 percent.

http://news.yahoo.com/s/ap/20070521/ap_on_bi_ge/economic_outlook

Look out! These could be the word from those perpetually surprised economists.

[54anickel]

31. But calling for record IPOs -

New York sees flurry of listings

http://www.ft.com/cms/s/ac68d01e-04bf-11dc-80ed-000b5df10621.html

Stock market flotations in the US during the traditionally quiet first quarter hit a seven-year high, with 64 deals raising a combined $12.1bn, led by a resurgence in activity from the financial services sector.

The surge came as initial public offerings on the Nasdaq stock market surpassed the New York Stock Exchange in amount raised for the first time in at least three years, according to a new report from PwC.

Nasdaq raised $6bn from 39 IPOs, compared with $4.7bn raised from 11 IPOs on NYSE in the first quarter. However, NYSE IPOs were far larger, averaging $430m compared with $154m on the Nasdaq.

The brisk start to this year follows on from a record fourth quarter last year when 89 IPOs raised raised $19.7bn, and beats the $11.6bn raised in the first quarter last year according to PwC.

snip>

”We continue to believe 2007 will be a better year for IPOs than 2006, and possibly the best year of this decade. A strong IPO pipeline, continued activity by financial sponsors, and the resurgence in financial services and technology sectors are very positive signs,” said Mr Gehsmann.

more...

[54anickel]

67. Surge in emerging-market IPOs

http://www.ft.com/cms/s/7c2fbe10-06f1-11dc-93e1-000b5df10621.html

Global markets have seen a dramatic increase in initial public offerings by emerging-market companies this year, with $53.7bn raised so far in such deals.

Already representing half of the volume raised for all of 2006, the funds raised are the highest level on record for the first five months of the year, according to data from Dealogic.

The spree of new issues in the developing world has been fuelled by the ample liquidity in the financial system, a strong appetite for risk among investors and growing demand for new equity from fast-growing companies.

In the last two weeks alone, investors have backed the $8bn IPO in London and Moscow by Russia’s second largest bank, VTB; the $1.85bn offering by Halkbank, Turkey’s state lender; and the $1.4bn flotation of Russia’s AFI Development, a real estate company. All three issues were priced in just nine days.

“There has been a significant amount of M&A (mergers and acquisitions) and buy-out activity across emerging markets which has returned a lot of cash into the market,” said Alasdair Warren, a managing director at Goldman Sachs who worked on all three new issues.

snip>

The boom in emerging market IPOs has pushed up the salaries for those bankers arranging corporate mergers and stock and bond sales. According to a recent survey by Napier Scott, the executive search firm, bankers in Moscow, for example, can earn between $2m and $3m.

more...

[ozymandius]

25. Lowe's profit falls 12.1 percent

CHARLOTTE, N.C. - Lowe's Cos., the No. 2 U.S. home improvement chain, said Monday that its first-quarter profit fell 12.1 percent due to a slowing home improvement market amid a continued slump in the housing sector.

The Mooresville, N.C.-based retailer said it earned $739 million, or 48 cents a share, for the three months ended May 4, down from $841 million, or 53 cents a share, a year earlier.

Revenue rose to $12.2 billion from $11.9 billion a year earlier. Same-store sales, or sales in stores open at least one year, a key measure of industry performance, fell 6.3 percent.

Analysts surveyed by Thomson Financial had been looking for net income of 49 cents a share on revenue of $12.4 billion.

http://news.yahoo.com/s/ap/20070521/ap_on_bi_ge/earns_lowe_s

[UpInArms]

27. Wealth Gap cited in Rise in Street Crime

http://www.reuters.com/article/bondsNews/idUSN1429795920070521

BOSTON (Reuters) - After a night of dancing, Chiara Levin was shot in the head by a stray bullet from a gunfight as she sat in a Cadillac sport utility vehicle. Hours later she was dead.

The killing of the 22-year-old Kentucky native, who recently graduated university with honors, in a tough neighborhood in Boston's Dorchester district on March 24 sparked weeks of outcry in a city where the murder rate neared a 10-year high last year.

Like Boston, many U.S. cities are struggling to stem a wave of violent crime and murder that has raised questions of whether police are fighting terrorism at the expense of street crime, and whether a widening wealth gap feeds the problem.

"We're at a tipping point in violent crime in many cities," said Chuck Wexler, executive director of the Police Executive Research Forum, a Washington-based law enforcement think tank that released data in March showing the murder rate rising by more than 10 percent in dozens of big U.S. cities since 2004.

...more...

[Viva_La_Revolution]

55. duh...

just look at history :shrug: this ain't rocket science!

[54anickel]

64. The end of the classless society

http://www.prudentbear.com/articles/show/2020

Makes some good points, though he ignores the outsourcing trend that is also at play in favor of putting all the blame on immigration and damned leftie, commie, liberal, socialists. :eyes:

snip>

Traditionally, the United States has been economically unequal, but without a sharp divide between rich and poor in the political arena. Democrats represented the South, minorities and unionized labor, while Republicans represented small business and the professional classes. The truly rich have always been more or less evenly divided between the parties. Thus, except for a brief period in 1932-46, the U.S. never had a real class-based politics.

One economic force was always likely to change this; the steady increase in inequality seen in the United States since about 1969. The household Gini coefficient of income inequality has risen from 39.7 in that year to 46.9 in 2005 – extrapolating that trend would suggest a figure of 47.3 by today.

At around 40, the Gini coefficient was close to the optimal level. Unlike in egalitarian Scandinavia it left enough incentive in the society to ensure that entrepreneurship and hard work were fostered, but yet it did not cause divisions between classes. At 47, it is approaching the level prevalent in Latin America, (Argentina 52, Mexico 55, Brazil 60) which has historically exhibited a politics characterized by deep alienation between classes, producing as rulers an unpleasant collection of corrupt oligarchs and irresponsible leftists.

snip>

In the United States, one would expect political activity to begin showing Latin American characteristics, including a breakdown in social cohesion, as Gini rises towards Latin American levels. This appears to be happening. One example is the doubling since 2000 of the number of Washington lobbyists, whose objective is primarily to divert public resources to private uses. A second is the growth of earmarking in legislation, up 10-fold in the decade to 2005; earmarks are generally inserted in order to benefit some private interest at the expense of the general good. U.S. politics has always been corrupt, and was especially so during the 1870-96 Gilded Age, the previous high point for inequality, but the increase in the proportion of Gross Domestic Product spent on lobbyists, the proportion of GDP spent on corrupt government spending and indeed the proportion of GDP spent on elections themselves suggests that systemic corruption is rapidly increasing.

snip>

Whatever the economic effect of moderate amounts of skilled immigrant labor, almost certainly positive, the economic effect of large amounts of unskilled immigrant labor is very clear: it drives wage rates down to rock bottom levels, particularly in personal service sectors where training is minimal and employment informal. That’s why a haircut costs less in real terms now than it did 30 years ago, it’s why even modest middle class households now have a cleaner and a gardener, which they usually didn’t 30 years ago and it’s why enormous numbers of dubiously constructed houses appeared when finance became available in 2002-06.

For the elite, the eloi of the HG Wells future we appear to be entering, this is all very attractive. The servant problem, butt of jokes ever since equality began to increase after World War I, has suddenly gone away – the rich can and do have as many servants as they want, provided they speak Spanish. Chicken processors, construction firms, retailers, hotels and meat packers who employ low skill labor no longer need make any pretence of paying union wage rates; they can simply hire illegal immigrants to fill any gaps that may appear. Corporate profits are at record high levels and service sector inflation, a bane in the 1970s and 1980s, has more or less disappeared.

The claim by eloi pro-immigration forces that the US economy has a massive new “need” for unskilled labor is of course pure bunkum. If there are 12 million illegal immigrant workers in the economy, about 8% of the working population, then since we know the value of output, productivity is in reality about 8% lower than we thought it was. That means that productivity growth, far from accelerating in the mid 1990s as Wall Street fatuously claimed, in fact slowed, as more and more bodies were required to achieve the same output. GDP may have continued to increase, but GDP per capita is also 8% less than we thought, and hence has shown little growth. It is this that has caused the curious phenomenon of an apparent rapid increase in GDP that in practice makes nobody any better off.

more...

[AnneD]

69. This will be the end product...

of doing away with the middle class.

Before the well to do in this country walk off with even more of the wealth, consider the environment both physical and social and think-is it really worth it.
People just want to live in peace, provide for themselves and raise their families. If they continually have to work several honest jobs and can't raise their kids, if their kids see a drug dealer doing nothing, having no education, and walking around with a bank roll-how encouraging is that. We are on the verge of losing our Utopia.

I have been to countries where there is just the rich and poor. You really don't want this in your future.

[UpInArms]

28. In Break with Past: CIA briefing SEC monthly on terrorists: Barron's

http://www.reuters.com/article/topNews/idUSN2043267020070521

NEW YORK (Reuters) - The U.S. Securities and Exchange Commission is being briefed monthly by the Central Intelligence Agency about terrorists and other criminals active in global stock markets, Barron's said in its latest edition.

Barron's said SEC Chairman Christopher Cox told the publication he and four other commissioners are briefed each month and that the CIA reports offer the SEC a "somewhat sharper focus" to an "underworld of murky, illegal dealings that threaten the world capital markets."

They are the first regular intelligence briefings for the SEC in history, Barron's said in its May 21 edition.

<snip>

The SEC recently asked the CIA for higher security clearances that would provide its commissioners even more highly classified information than they are now receiving in their regular intelligence briefings, the publication said.

...more...

[ozymandius]

30. Saks Profit Falls but Sales Rise

NEW YORK (AP) -- Upscale department store retailer Saks Inc. said Monday that profit slid 86 percent in the first quarter from a year-ago period that included hefty gains on the sale of its Saks Department Store Group businesses.

The company currently operates Saks Fifth Avenue, which is comprised of 54 Saks Fifth Avenue stores, 49 Saks Off 5th stores, and saks.com. The company also operates Club Libby Lu specialty stores.

Net income for the three months ended May 5 declined to $11 million, or 7 cents per share, from $77.9 million, or 57 cents per share, in the year-ago period, which included a gain of $66.2 million on the sale of certain department stores, among other items.

http://biz.yahoo.com/ap/070521/earns_saks.html?.v=3

[ozymandius]

34. U.S. Stocks Tilt Higher Ahead of Open

NEW YORK (AP) -- Stocks pointed toward a slightly higher open Monday after a fresh round of deal activity encouraged investors that acquisitions will continue this year at a record pace.

General Electric Co. said before the opening bell that it has agreed to sell its plastics division to Saudi Arabia's largest industrial company, Saudi Basic Industries Corp. The $11.6 billion deal is part of a broader restructuring at the conglomerate, and has been widely anticipated since last week.

-cut-

Acquisitions have been one of the catalysts behind the advance in stocks, and have been driven during the past year by a large push by private equity firms. Buyout shops have racked up more than $370 billion in global buyouts this year -- and are on pace to surpass last year's record of $730 billion, according to financial data provider Dealogic.

http://biz.yahoo.com/ap/070521/wall_street.html?.v=6

[ozymandius]

40. Pushing into uncharted waters

Stock futures point to a higher open after deal for Alltel, as Dow starts at record level and S&P nears its zenith.

NEW YORK (CNNMoney.com) -- Stocks were poised to make another run at record highs Monday, helped by news of a major telecom deal and the sale of GE's plastics division.

Stock futures rose slightly in early trading, pointing to a higher open for both the blue chip S&P 500 and the tech-heavy Nasdaq.

The S&P starts the day only five points away from what would be a record high close, while the Dow Jones industrial averaged ended at yet another record high in Friday trading.

GE (Charts, Fortune 500) says it has sold its plastics division for $11.6 billion to Saudi-owned Sabic.

The buyout unit of Wall Street investment bank Goldman Sachs (Charts, Fortune 500) and private equity firm TPG Capital announced early Monday they are buying wireless telecom Alltel (Charts, Fortune 500) for $25 billion, or $71.50 a share, a premium of nearly 10 percent from Friday's close. Shares of Alltel are up 9.4 percent in Frankfurt trading early Monday.

http://money.cnn.com/2007/05/21/markets/stockswatch/index.htm?postversion=2007052106

[Ghost Dog]

38. Asian Stocks Rise After U.S. Confidence Picks Up

http://www.bloomberg.com/apps/news?pid=20601080&sid=ayy3YF6KHktM&refer=asia

May 21 (Bloomberg) -- Asian stocks advanced after U.S. consumer confidence unexpectedly improved and shares in China rallied on speculation higher interest rates won't deter investors in the world's fastest-growing major economy.

Sony Corp. and Hyundai Motor Corp., both of which count the U.S. as their biggest overseas market, rose after analyst rating upgrades. Ping An Insurance (Group) Co. led China's insurers higher on expectations increased rates will boost returns on their investments.

``U.S. consumer confidence is providing some support to the market,'' said Shigemi Nonaka, who oversees $218 million of assets at Polestar Investment Management Co. in Tokyo. ``China is doing the right thing by applying the brakes gradually and its economy will continue to grow at a rapid pace.''

Nine out of 10 industry groups included in the Morgan Stanley Capital International Asia-Pacific Index advanced and benchmarks in Australia, China, South Korea, Indonesia and the Philippines rose to records. Malaysia, Pakistan and Thailand were only markets that declined in the region. The MSCI index added 0.8 percent to 148.46 at 6:45 p.m. in Tokyo, after losing 1.4 percent in the previous four trading sessions.

Japan's Nikkei 225 Stock Average rose 0.9 percent to 17,556.87. Mitsui OSK Lines Ltd. paced gains among shipping lines after it signed a long-term contract with Baoshan Iron & Steel Co., China's biggest steelmaker, and Nomura Securities Co. said it expects shipping rates to climb this year.

BHP Billiton Ltd. led gains in Australia after prices of metals including copper and zinc increased. China's CSI 300 Index added 1.5 percent, recovering losses of as much as 3.5 percent.

`Good News'

Rising stocks in the U.S., Asia's biggest export market, brought the Standard & Poor's 500 Index to within 0.4 percent of a record high on May 18. The Reuters/University of Michigan preliminary index of sentiment rose to 88.7 from 87.1 in April. Economists surveyed by Bloomberg News predicted the gauge would fall to 86.2.

/...

[Ghost Dog]

42. China's stock market becomes a proxy for risk

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=stocksNews&storyid=2007-05-21T065413Z_01_NOA124684_RTRUKOC_0_CHINA-PROXY.xml&WTmodLoc=InvArt-R5-QuotesBox-2

NEW YORK (Reuters) - Investors hunting for a bellwether for risk appetites are increasingly looking to China, whose frothy stock market has become a canary in a coal mine of sorts.

Investors fear a blow-up in Chinese stocks could again roil world markets and cause a global pullback like the one sparked by a plunge on the Shanghai stock market on February 27.

China is "both a proxy for risk appetites, which are relatively robust ..., and as a proxy for global economic growth," said strategist David Joy of RiverSource Investments, a unit of Ameriprise Financial Inc. "And maybe that equity market movement straight upward is a little bit of concern that bares watching."

Chinese authorities moved on Friday to take some pressure off its roaring stock market, raising benchmark lending and deposit rates, lifting bank reserve ratios and widening the trading band of its currency, the yuan. The move could spark a market correction, investors said.

The question for many investors is how much weight to give the Chinese stock market, where few foreign investors own shares, and how much of an impact on global markets would a disruption in China cause.

/more...

[Ghost Dog]

39. FTSE hits new 6½ year high

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B1a752a4f%2D624b%2D4a84%2Dbdd7%2D354b89716d65%7D

The FTSE hit a new six-and-a-half year high on Monday as the heavyweight oil and mining stocks moved higher. Oil stocks continued recent strength as some took the view that the sector could move higher. Royal Dutch Shell gained 2.3 per cent to £19.47 and BP rose 1.2 per cent to 589p. BG Group was the leading gainer, rising 3.9 per cent to 810½p. Talk was it could be in the sights of Exxon, the US oil giant. Mining stocks also rose on the back of another rise in base metal prices. Lonmin gained 2.2 per cent at £39.30, Anglo American firmed 2.3 per cent to £29.42 and Xstrata moved up 2.3 per cent to £27.75. By midday, the blue-chip index was up 22.9 points to 6,663.8, its highest level since September 2000, while the mid-cap FTSE 250 gained 43 points to 12,245.1.

[Ghost Dog]

41. Banks in spotlight as Eurostocks hit 6-1/2-yr high

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=eurMktRpt&storyID=2007-05-21T113438Z_01_L21285940_RTRIDST_0_MARKETS-EUROPE-STOCKS-UPDATE-3.XML&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage3

LONDON, May 21 (Reuters) - Banking stocks were in focus on Monday as European shares hit their highest since late 2000 for the second day running, with Societe Generale (SOGN.PA: Quote, Profile , Research) gaining on talk of a tie-up with UniCredit (CRDI.MI: Quote, Profile , Research), which fell.

At 1116 GMT, the FTSEurofirst 300 index <.FTEU3> of top European shares was up 0.4 percent at 1,603.62 points, its highest level since Dec. 13, 2000.

...

The FTSEurofirst 300 has gained nearly 8 percent so far this year, putting it well on track to match the 16 percent gain last year that was fuelled by strong economic growth, robust earnings and rampant merger and acquisition activity.

Lenhoff said it was strange that risk premiums were narrowing across markets given that earnings growth was slowing and interest rates were broadly moving upwards.

"If you look back, it's unusual to find a collapse in risk premiums when interest rates are on a rising trend," said Lenhoff.

"The assumption seems to be that the pressure on inflation will not lead central banks to really step on it, to raise rates so much that it leads to a recession."

Across Europe, Britain's FTSE 100 .FTSE, Germany's DAX <.GDAXI> and France's CAC 40 <.FCHI> were all up around 0.35 percent.

/...

[54anickel]

47. CIA briefing SEC monthly on terrorists: Barron's

http://www.reuters.com/article/ousiv/idUSN2043267020070520

NEW YORK (Reuters) - The U.S. Securities and Exchange Commission is being briefed monthly by the Central Intelligence Agency about terrorists and other criminals active in global stock markets, Barron's said in its latest edition.

Barron's said SEC Chairman Christopher Cox told the publication he and four other commissioners are briefed each month and that the CIA reports offer the SEC a "somewhat sharper focus" to an "underworld of murky, illegal dealings that threaten the world capital markets."

They are the first regular intelligence briefings for the SEC in history, Barron's said in its May 21 edition.

"The U.S. government's focus on money laundering and terrorist financing and other criminal activities in the capital markets has laid bare a good deal of activity of that sort," said Cox, who would not confirm whether terrorists were active or present in U.S. markets.

snip>

Criminals now intentionally disperse operations across different countries to avoid detection, Barron's said. For instance, residents of Hong Kong, Malaysia, Estonia and Latvia have hacked into U.S. online brokerage accounts and used the proceeds to bid up the price of their own stocks.

more...

[54anickel]

50. The new railway barons

http://www.economist.com/finance/displaystory.cfm?story_id=9201722

Thought this part was of interest....

snip>

But they are not the only ones climbing aboard. The Children's Investment Fund (TCI), a London-based hedge fund better known for agitating for change at ABN AMRO, a Dutch bank, and Deutsche Börse, the German stock exchange, has recently poured over $1 billion into American railway companies, including those held by Berkshire Hathaway and Mr Icahn. According to Snehal Amin, a TCI partner, the rationale is simple: railways could use more gearing. Most carry debt on the balance sheet of about two times earnings before interest, tax, depreciation and amortisation. He thinks they could bear more than five times.

This comes when big railways are already using their spare cashflow to raise dividends and buy back shares. Last week CSX, an operator whose shares are held by Mr Icahn and TCI, announced a $1 billion buy-back and a 25% rise in its quarterly dividend. TCI may well encourage it to use debt to finance more such manoeuvres in the future.

If railway executives fail to gear up, private-equity firms may well do it for them. Although most railways are quite large—CSX has a stockmarket value of $20 billion—almost no deal is out of reach for buy-out firms. And if they come sniffing, share prices will rise even more.

Judged against the long boom-and-bust history of the railways, it is not clear how long the good times will last. Demand for freight shipped to and from China may extend the cycle. That would need to happen for a great deal of extra debt to make sense in such a volatile industry.

more...

[ozymandius]

52. 10:14 update

Dow 13,553.93 Down 2.60 (0.02%)
Nasdaq 2,569.61 Up 11.16 (0.44%)
S&P 500 1,524.87 Up 2.12 (0.14%)
10-Yr Bond 4.816% Up 0.012
NYSE Volume 502,831,000
Nasdaq Volume 294,737,000

10:00 am : The major averages remain mixed as split industry leadership dictates this morning's lackluster performance. Of the six sectors trading higher, Energy (+0.8%) is pacing the way for a third straight session even though oil prices are relatively flat near $65/bbl. Telecom is a close second, fueled by Alltel's (AT 70.21 +5.00) takeover; but since it also ranks among the least influential sectors on the S&P 500, a 0.7% advance is having little impact on overall trading.

The remaining four sectors in positive territory are averaging a gain of only 0.1% while the absence of leadership from Financials, Health Care, and Consumer Staples also remains a headwind for the bulls. DJ30 -13.25 NASDAQ +4.45 SP500 +0.76 NASDAQ Dec/Adv/Vol 1157/1355/136 mln NYSE Dec/Adv/Vol 1260/1240/72 mln

[54anickel]

53. Lipstick on a Pig (Schiff)

http://www.321gold.com/editorials/schiff/schiff051807.html

As Treasury Secretary Henry Paulson continues to drum up interest in direct investment in the United States, he will rely on a set of skills that only a long-time Wall Street pro can truly master. It is part of the investment banker's playbook to perform financial makeovers on questionable companies that they are engaged to sell, a process commonly known as "putting lipstick on a pig."

As the U.S. economy continues to slow, and non-U.S. markets consistently produce much better returns on invested capital, Paulson will need to pull off an unprecedented act of porcine cosmetology to keep the foreign funds flowing. In addition, the persistent weakness in the U.S. dollar practically assures that any takers will likely find that they are the ones being led to the slaughterhouse.

The Treasury Secretary has consistently extolled the importance of foreign investment to our economy. Paulson recently underscored these sentiments with a visit to a UK-based company that employs 1,500 Americans at several manufacturing and distribution facilities in several states. However, while investment of this sort is badly needed, it represents just a small fraction of the money that Americans borrow. Because the vast majority of foreign "investments" come to us in the form of consumer loans, a more appropriate venue for Paulson's comments would have been a local Wal-Mart, Best Buy, or condo project. Whether in Treasury bills, mortgage-backed securities, or collateralized consumer debt, such loans do nothing to improve the long-term health of our economy. They merely serve to keep our necks above water until the financial tide eventually overwhelms us.

Legitimate foreign investment, in profitable businesses such as the one Paulson visited, are increasingly less attractive as other nations have superior infrastructures, better trained and educated workforces, lower taxes, and fewer regulations. If the Bush administration really wanted to attract more of this type of investment it would offer more than mere lip service. Serious reforms to both capital and labor regulation, and efforts to shore up the sagging greenback would be required for such an effort to bear fruit. Today's announcement from the Bank of China that they will allow greater flexibility in the Yuan will only make Paulson's job that much more difficult.

On Thursday, Ben Bernanke came to Paulson's aid with a can of hairspray and some mascara. Speaking in Chicago, the Fed chairman gave his assurances that the meltdown in the sub-prime mortgage market would not affect the broad U.S. economy. Bernanke's pronouncements come despite continued evidence of slowing retail sales, record high gasoline prices, escalating food prices, mounting inventories of unsold homes, and real estate auctions in which foreclosed homes sell for 30% -50% below their "appraised" values.

more...

[54anickel]

68. Couple Learn the High Price of Easy Credit

http://www.nytimes.com/2007/05/19/us/19debt.html?_r=2&ref=business&oref=slogin&oref=slogin

snip>

Ms. Moellering, and her husband, Mark, 39, earn average salaries for their age (together about $66,000 a year), live in an average-priced home and have an average cost of living. But like many other households these days, they have found that their day-to-day economic life has come to depend not just on how much they earn or spend, but also on how well they shuffle what they owe among a broad array of credit cards, home equity loans and other lines of credit.

Americans spent one in seven of their take-home dollars on debt payments last year, up from one in nine in 1980. Experts say few consumers are able to calculate the true costs of such payments.

snip>

Their credit card debt came to $22,228, including $380 in monthly finance charges. Interest varied from 12.1 percent to 32.24 percent. The Moellerings also have a mortgage of $93,000 and a home equity loan balance of $68,574, at 8 percent interest.

snip>

Just a generation ago, financial profiles like the Moellerings’ would have been unusual. But changes in federal regulations since the 1980s, along with consolidation in the banking industry and changed consumer attitudes toward borrowing and saving, have made credit more widespread, more heavily marketed and more confusing, with offers of more credit — at low rates — extending to even the least reliable risk. In 2006, the industry mailed out nearly 8 billion credit card offers, up from 3.5 billion in 2000.

Credit card debt, less than $8 billion in 1968 (in current dollars), now exceeds $880 billion, more than tripling since 1988, adjusting for inflation, according to the Federal Reserve Bank. Penalty fees alone cost consumers $17.1 billion in 2006 — up from $12.8 billion in 2003, adjusted for inflation, according to R. K. Hammer, a bank card advisory firm. In part because of the debt burden, the consumer savings rate fell below zero percent in 2005 and has stayed there.

more...

Gotta admit these people made some pretty unwise financial decisions, but I still can't believe their circumstances exemplify the majority of people who are in debt up to their eyeballs. Of the 4 couples I know deep in hock, one made foolish decisions while the others were all due to accidents or illnesses while uninsured.

[AnneD]

84. The scope of financial ignorance

blows me away.

I am at the point in repaying my debt that the amount of money I save by paying cash and not accruing interest is now noticeable. Thank God I am down to my 5 most onerous bills. I have been able to maintain an emergency fund of 1K for 4 years now and that has met all my emergencies and I have been without a credit card during this time. My debit card and the overdraft to my savings are better than a credit card-no interest fees. Those interest rate fees are like death by a thousand cuts-bleeding your money from you.

By negotiating fees, making a budget, and paying attention to their money, they could be on a better track than they are now. They need to cut up the cards and pay in check or or cash. That will help prevent those spending over fees.

I go to bed every night knowing that-our cars are paid for-our little 5th wheel is paid for, I have a holiday account that will be a paid for Christmas for us this year, our vacation fund will give us a paid couple of local trips this summer and at Christmas, and a savings account for my daughter that will be a nice little nest egg graduation gift next year. My child support obligations will be over 12 months from now but I am so use to living on half of my income that it will be a blessing to me. That my friends is what is known as financial peace

[54anickel]

70. What a Week: Bears Bloodied (Summary of last week)

http://www.thestreet.com/pf/markets/marketfeatures/10357838.html

It's hard out here for a pimp, according to Three 6 Mafia. They should try short-selling.

This week provided another reminder of why it's tough to be a bear. Deal activity, share buybacks and benign economic news sent the Dow Jones Industrial Average deeper into record territory, while the S&P 500 came within a hair of its March 2000 peak.

For the week, the Dow rose 1.6% and the S&P 500 gained 1.1%, the seventh straight weekly gain for each. The Nasdaq Composite dipped 0.2% for the week, its second straight weekly decline.

The Comp suffered from Applied Materials' (AMAT) weak guidance and setbacks for biotechs Amgen (AMGN) , ImClone (IMCL) and Sepracor (SEPR) . Strength in energy stocks such as Exxon Mobil (XOM) , amid a surge in crude and another round of deal-making, helped the blue-chip averages push ahead.

On Friday, the Dow was up 0.6% to 13,556.53, its 24th record high of 2007, while the S&P gained 0.7% to 1522.75, less than 5 points below its all-time closing high of 1527.46. The Nasdaq rose 0.75% to 2558.45.

snip>

"There's absurd amounts of cash on corporate balance sheets, and private equity has become a huge force in this marketplace," says Noah Blackstein, portfolio manager at Dynamic Funds in Toronto. "That can provide liquidity for the stock market. Plus, because of Sarbanes-Oxley, the U.S. has had no real IPOs of any magnitude."

The combination of M&A and limited new offers has shrunk the supply of stock available to trade and is very bullish, says Blackstein -- although this week did see big secondary offerings from Micron Technology (MU) and Goodyear Tire (GT).

more...

[54anickel]

71. 12:43 check in, then I've gotta run and get some chores done

Dow 13,578.31 21.78 (0.16%)
Nasdaq 2,584.01 25.56 (1.00%)
S&P 500 1,528.61 5.86 (0.38%)
10-yr Bond 4.8100% 0.0060
30-yr Bond 4.9630% 0.0060
NYSE Volume 2,159,785,000
Nasdaq Volume 1,002,967,000

12:30 pm : Finally, the S&P 500 garners enough buying interest to climb above its record closing high of 1527.46, which was reached on March 24, 2000. Nine out of 10 sectors are now trading higher, led by a 1.1% advance in Energy. The S&P 500's all-time intraday high is 1553.11.

Even though the index's gain remains modest in scope, headlines tonight and tomorrow, should the S&P 500 close at current levels, will again tout another new record for the stock market. This time around, however, the emphasis will be placed more on the S&P 500, since it offers a much broader market perspective than the Dow, even though the latter is on pace to log its 25th record this year. DJ30 +18.45 NASDAQ +26.67 SP500 +5.87 NASDAQ Dec/Adv/Vol 824/2111/930 mln NYSE Dec/Adv/Vol 1086/2075/632 mln

12:00 pm : The major averages are trading higher midday, paced by a 0.9% advance on the Nasdaq, as investors juggle more M&A news with some concerns that large-cap stocks are looking overbought on a near-term basis.

Per usual for a Monday morning, M&A activity is making the rounds and providing more proof of the liquidity factor that continues to lend support for this market. The biggest deal this morning involves Alltel (AT 69.57 4.36), which agreed to be taken private for $27.5 bln, while General Electric (GE 37.26 +0.30) confirmed the sale of its plastics division for $11.6 bln.

However, since last Friday's rally was fueled in part by anticipation that Monday would again bring another round of supportive M&A activity, today's deals aren't having as much of an impact on blue chips as one might think. The S&P 500 is within two points of hitting its record closing high; but its intraday gain is modest at best as the index shows signs of fatigue after posting its seventh straight weekly advance.

Also, since Alltel has been on the block since December, its 10% premium isn't that large relative to other deals of late, and speculation surrounding GE's divestiture surfaced last week, investors are also contending with a market that looks increasingly overbought given deteriorating fundamentals. As a reminder, the economic outlook is merely stable and earnings growth is decelerating, neither of which are particularly bullish factors for stocks.

Nonetheless, a continued large number of acquisitions, as well as share buybacks, remain the basis of the liquidity argument for stocks to keep climbing. That is why we at Briefing.com continue to reiterate our Market View rating at Moderately Bullish. DJ30 +4.91 NASDAQ +24.00 SP500 +3.60 NASDAQ Dec/Adv/Vol 975/1932/780 mln NYSE Dec/Adv/Vol 1228/1859/530 mln

11:30 am : So much for the bulls trying to regain much momentum over the last hour as the Dow makes another visit below the flat line. While the price-weighted index has almost as quickly climbed back into positive territory, it is clinging to the smallest of gains.

The Nasdaq remains the morning's biggest winner among the majors while the Russell 2000 is faring even better. The small-cap index is up 0.9% so far and continues to make fresh session highs amid evidence that upside uncertainty for large cap names over the near term has sparked a rotation into smaller, growth-oriented stocks. DJ30 +1.38 NASDAQ +19.71 SP500 +3.34 NASDAQ Dec/Adv/Vol 942/1936/660 mln NYSE Dec/Adv/Vol 1147/1901/436 mln

11:00 am : As evidenced by the Nasdaq noticeably outperforming its blue-chip counterparts, Technology is spearheading the market's recent improvement. Its 0.7% advance, led by gains in everything from Software (GSO +0.9%) to Semiconductors (SOX +0.6%), now earmarks it as today's best performer.

As a reminder, the tech-heavy Composite's year-to-date advance of 5.9% lags 2007 gains of 8.8% and 7.4% for the Dow and S&P 500, respectively, and the Nasdaq recently turned in its second consecutive weekly decline. With the Dow and S&P 500 logging their seventh straight week of gains, today's performance on the Nasdaq is likely being exacerbated by some bargain-hunting activity as blue chips take a bit of a breather. Turnarounds in Financials and Health Care are also acting as sources of support, as reflected by the Dow inching into positive territory. The three sectors combined account for nearly 50% of the total weighting on the S&P 500. DJ30 +11.86 NASDAQ +21.21 SP500 +4.05 NASDAQ Dec/Adv/Vol 1002/1790/480 mln NYSE Dec/Adv/Vol 1208/1781/326 mln

10:30 am : Within the last 30 minutes, the Dow briefly turned positive and the S&P 500 got to within two points of hitting its record closing high. Oil prices turning negative and falling below $65/bbl has contributed to the renewed wave of buying interest.

However, the Energy sector (+0.3%) subsequently seeing its early advance more than halved removes some of what little leadership today's market was exhibiting during the first hour of trading. Overall, the market simply looks tired after several weeks of gains as investors struggle to find overwhelming evidence to keep the rally intact. DJ30 -12.11 NASDAQ +8.49 SP500 +0.96 NASDAQ Dec/Adv/Vol 1067/1631/314 mln NYSE Dec/Adv/Vol 1169/1712/200 mln

10:00 am : The major averages remain mixed as split industry leadership dictates this morning's lackluster performance. Of the six sectors trading higher, Energy (+0.8%) is pacing the way for a third straight session even though oil prices are relatively flat near $65/bbl. An analyst upgrade on Valero Energy (VLO 75.60 +1.63) earmarks Refiners as one of today's best performing S&P industry groups.

Telecom is a close second, fueled by Alltel's (AT 70.21 +5.00) takeover; but since Telecom ranks among the least influential sectors on the S&P 500, its 0.7% advance is having little impact on overall trading. The remaining four sectors in positive territory are averaging a gain of only 0.1% while the absence of leadership from Financials, Health Care, and Consumer Staples also remains a headwind for the bulls. DJ30 -13.25 NASDAQ +4.45 SP500 +0.76 NASDAQ Dec/Adv/Vol 1157/1355/136 mln NYSE Dec/Adv/Vol 1260/1240/72 mln

[54anickel]

72. Saudi Firm Buys GE Plastics for $11.6B

http://biz.yahoo.com/ap/070521/ge_saudis_plastic.html?.v=8

GE's $11.6 Billion Sale of Plastics Division to Go to Stock Buyback


NEW HAVEN, Conn. (AP) -- General Electric Co. said Monday it will sell its GE Plastics division to petrochemicals manufacturer Saudi Basic Industries Corp. for about $11.6 billion.

GE said it would use the proceeds primarily to increase its planned 2007 stock buyback program. It now expects to buy back $7 billion to $8 billion in stock, up from the previous plan of $6 billion. The deal is expected to create a net gain, after taxes, of $1.5 billion for the conglomerate.

GE Chairman and Chief Executive Jeff Immelt called the long-expected divestiture "another important step" in the company's strategy to dispose of some businesses and invest in high-growth, high-technology businesses.

"This sale is the right move at the right time for GE shareowners," Immelt said. "We received a good price from a respected global company in a highly competitive bidding process. We will use the proceeds to fund the stock buyback and strengthen the company through restructuring."

more...

[TrogL]

73. Loonie Watch

(Today's a National Holiday (Victoria Day). I normally post this from the office so I don't have access to my template files so the formatting may be a bit rough.)

Highlights

Current:



30-day and 90-day vs.greenback:



30-day vs. Euro, Yen, UK Pound and Swiss Franc







Currency Comparison: http://members.shaw.ca/trogl/looniewatch.html

Detailed analysis: http://quotes.ino.com/exchanges/?r=CME_CD

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.H06&v=s

Historical values http://www.x-rates.com/d/USD/CAD/data30.html

2007-04-18 Wednesday, April 18 0.885897 USD
2007-04-19 Thursday, April 19 0.886054 USD
2007-04-20 Friday, April 20 0.89071 USD
2007-04-23 Monday, April 23 0.890869 USD
2007-04-24 Tuesday, April 24 0.890631 USD
2007-04-25 Wednesday, April 25 0.897183 USD
2007-04-26 Thursday, April 26 0.892698 USD
2007-04-27 Friday, April 27 0.8967 USD
2007-04-30 Monday, April 30 0.903506 USD
2007-05-01 Tuesday, May 1 0.901876 USD
2007-05-02 Wednesday, May 2 0.901957 USD
2007-05-03 Thursday, May 3 0.903424 USD
2007-05-04 Friday, May 4 0.903424 USD
2007-05-07 Monday, May 7 0.907112 USD
2007-05-08 Tuesday, May 8 0.905141 USD
2007-05-09 Wednesday, May 9 0.903914 USD
2007-05-10 Thursday, May 10 0.903098 USD
2007-05-11 Friday, May 11 0.897989 USD
2007-05-14 Monday, May 14 0.903587 USD
2007-05-15 Tuesday, May 15 0.911079 USD
2007-05-16 Wednesday, May 16 0.906783 USD
2007-05-17 Thursday, May 17 0.911079 USD
2007-05-18 Friday, May 18 0.918864 USD


Current values

Last trade 0.9230 Change +0.0047 (+0.51%)
Previous Close 0.9186 Open 0.9209
Low 0.9204 High 0.9240

Blather

The June Canadian Dollar was higher overnight as it extends last week's rally and is trading above last May's high crossing at .9200. Stochastics and the RSI are overbought, diverging but are neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends the rally off February's low, weekly resistance crossing at .9312 is the next upside target. Closes below the reaction low crossing at .9047 are needed to confirm that a top has been posted. Overnight action sets the stage for a higher opening in early-day session trading.

Analysis

Commentators on Friday's thread noted (links there):

..a roaring economy and a looming interest rate hike, economists said Friday.

This level has not been seen since October 1977, said Marc Levesque, chief economist at TD Securities. If the trend continues, analysts predict parity with the US dollar by September.

...

Statistics Canada said on Friday that retail sales jumped by 1.9 percent from February, a much bigger increase than the 0.8 percent expected by analysts. The news pushed the Canadian dollar to an almost 30-year high against its U.S. counterpart.

...

"The Canadian consumer is obviously quite alive, and quite well, thank you very much," said Douglas Porter, deputy chief economist at BMO Capital Markets.

"This robust result, along with a wave of other strong reports earlier this week, points to gross domestic product growth of 3.5 percent or better in the first quarter, further stoking (Bank of Canada) rate hike expectations in the second half of the year."

A lot of this has to do with the oil boom. Several Provinces have oil and are developing like mad. It's actually becoming a bit of a problem. I'm lucky I've got a mortgage 'cause rents are going through the roof. Stores are closing because they can't find retail staff. Everybody who can breathe has moved to the oil patch. The other day I saw a beggar in the middle of the street with a big sign "need work boots". I stopped but he didn't wear my size, I didn't have any cash on me and stores were closed otherwise I would have got him a pair.

Because the rents are going up, I'm seeing a lot more homeless. These were people who had dingy, cheap little apartments they could barely afford on welfare, then the rents went up and they got forced out. Now some construction worker is living there and there's another guy trying to sleep on the couch out in the alley or fighting over the big cardboard box at the end of the street. Anyplace you see what looks like a random pile of boards and construction material it's probably somebody's "house". My ex-wife is making a killing in overtime guarding construction sites.

Parity loonie is now a very real possibility. This may have a negative impact on businesses who import from the States, but if those businesses can re-tool to find something, anything needed by the oil patch or supporting industries, they'll do just fine. Many of those other importers may simply switch to importing from China (if they haven't already) or Cuba. Oil magnates love cigars. Be that as it may, many businesses may get left out in the cold and I have no idea what those on fixed incomes are supposed to do other than buy a new refrigerator on credit so they can live in the box.

[54anickel]

79. Pfizer CFO, Research Head to Leave

http://www.forbes.com/feeds/ap/2007/05/21/ap3742033.html

Pfizer Chief Executive Jeffrey Kindler proved even those at the top aren't immune to an ongoing company-wide transformation late Sunday in announcing the departure of Research and Development President John LaMattina and Chief Financial Officer Alan Levin.

The news comes as the world's largest drug maker seeks to cut 10,000 jobs, or 10 percent of its work force, amid a tepid sales outlook in the near term. Kindler, the architect of the company's transformation, became Pfizer Inc.'s CEO and chairman last year. The 10,000 job cuts were first announced in January.

Andy McCormick, a Pfizer spokesman, said the company is not disclosing how many jobs have already been cut but that the company is "making progress" on that front. In April, the company said it had "completed a significant reduction and redeployment of the U.S. field force and began the elimination of large numbers of positions in other parts of the company."

LaMattina, 57, will retire from the company by the end of the year, Pfizer said. He has been with the company since 1977, and was tasked with keeping Pfizer's product line vital as head of R&D.

snip>

Levin, 45, resigned from his position, and said in a statement that after 20 years of service with Pfizer it was the "appropriate time for me to explore career opportunities outside of the company." He took over as chief of finance in 2005.

more...

[Roland99]

82. 3:11pm - Whoops. What happened?

Dow 13,544.26 -12.27
Nasdaq 2,575.39 16.94
S&P 500 1,524.74 1.99
10 YR 4.79% -0.02
Oil $66.28 $1.34
Gold $663.80 $1.80

[ozymandius]

86. end of story

Dow 13,542.88 Down 13.65 (0.10%)
Nasdaq 2,578.79 Up 20.34 (0.80%)
S&P 500 1,525.10 Up 2.35 (0.15%)
10-Yr Bond 4.788% Down 0.016
NYSE Volume 3,465,355,000
Nasdaq Volume 2,006,744,000

4:20 pm : After seven long years, which included a 2 1/2-year period from March 2000 to October 2002 that saw nearly 50% of the broader market's value evaporate, the S&P 500 finally eclipsed its record closing high intraday.

Unfortunately for the bulls, a growing sense that stocks are overbought at current levels resurfaced late in the day in the form of a sell program to take most of the steam out of what was initially shaping up to be a momentous day for equities.

Stocks opened with little fanfare but inched their way higher for most of the session as investors embraced another round of healthy M&A activity. The biggest news came from Alltel (AT 69.58 +4.37), which agreed to be taken private for $27.5 bln. The acquisition played into our Overweight rating on the Telecom sector.

General Electric (GE 37.10 +0.14), meanwhile, confirmed the sale of its plastics division for $11.6 bln.

However, speculation surrounding GE's divestiture that surfaced last week, and Alltel being rumored for several months as a takeover target, didn't exactly provide investors with overwhelming evidence to build on seven straight weeks of gains for the Dow and S&P 500.

From an industry leadership standpoint, Energy paced the way for a third consecutive session; but that was due largely to a rally in oil prices. Crude for June delivery surged 2.1% to $66.27/bbl, its highest level this month, which left investors questioning the impact of higher energy prices on the consumer.

Of the remaining six sectors finishing higher, Technology was the only other area staging a notable advance, which was also evident in the Nasdaq noticeably outperforming its blue-chip counterparts. The tech-heavy Composite's year-to-date advance was just 5.9% as of Friday's close, lagging year-to-date gains of 8.8% and 7.4%, respectively, for the Dow and S&P 500.

The Nasdaq, as well as the Russell 2000, were also coming off their second consecutive weekly declines, suggesting that today's buying efforts on both indexes might have simply reflected a rotation out of large-cap stocks into a batch of beaten-down names with potentially more upside for growth. BTK +0.6% DJ30 -13.65 DJTA -0.2% DJUA +0.4% DOT +0.7% NASDAQ +20.34 NQ100 +0.8% R2K +1.2% SOX -0.3% SP400 +0.8% SP500 +2.35 XOI +0.9% NASDAQ Dec/Adv/Vol 1056/2007/1.89 bln NYSE Dec/Adv/Vol 1331/1930/1.38 bln