STOCK MARKET WATCH, Monday 14 November

[ozymandius]

Monday November 14, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 69 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1789 DAYS
WHERE'S OSAMA BIN-LADEN? 1488 DAYS
DAYS SINCE ENRON COLLAPSE = 1450
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON November 11, 2005

Dow... 10,686.04 +45.94 (+0.43%)
Nasdaq... 2,202.47 +5.79 (+0.26%)
S&P 500... 1,234.72 +3.76 (+0.31%)
10-Yr Bond... 4.56% -0.07 (-1.53%)
Gold future... 469.40 +1.70 (+0.36%)






GOLD, EURO, YEN, Dollars and Loonie


PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Tim W. Wood

THE DOW REPORT
Questions on Dow Theory

Recently, I have received a number of questions on Dow theory. The two commonly asked questions are about the recent new highs made by the Transports and manipulation. As for the recent new highs on the Transports, this has not produced a “buy” signal. The fact that the Transports have now pushed to new highs, that have not been confirmed by the Industrials, is a warning, not a buy signal.



-cut-

In the interim, yes, the “Secondary Trend” is currently bullish. But, this non-confirmation is a serious warning that the Secondary Trend is in jeopardy. Also, think about this; the Primary Trend remains bearish and the Primary sell signal according to Dow theory still stands today. If the Dow theory was not relevant, then why is it that this giant bear market rally separating Phase I from Phase II of the bear market has not been able to carry the Industrials to new highs? Guys, we are still at the same levels on the DJIA as we were in 1999. That was 6 years ago. If this were a “new bull” market don’t you think we should have made a new high by now? I maintain that the advance out of the 2002 low was merely a Secondary Reaction separating Phase I from Phase II of the ongoing bear market. Furthermore, the sideways action that has been seen since January 2004 is part of the topping process associated with this giant bear market rally.

Now for the question of manipulation. Many argue that manipulation will skew the outcome for Dow theory or any other technical approach. This is not true. Dow theory and technical analysis is concerned with price movement. It does not matter what the underlying reason is for that price movement. After all, everything is reflected in price and since the technical approach deals with price, the reason for the price movement is not a factor because price has discounted the reason. Now, this is not to say that I do not believe in manipulative efforts to “hold the market up.” But from a technical perspective, any such efforts simply prolong the inevitable. No amount of manipulation on the planet can change the fact that the rally out of the October 2002 lows were only the Phase I lows, and no amount of manipulation can prevent the inevitable Phase II and ultimately the Phase III low from occurring. All that can be achieved by any such efforts is to prolong these inevitable declines. Again, look at the many efforts that have occurred over just the last two years to “keep the market up.” Yet, the Industrials are sitting right where they were in January 2004. All this has done is prolong the inevitable, and by doing so it has lulled the masses into actually believing that we are in a new bull market.

more...

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

[UpInArms]

2. daily dollar watch

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

Last trade 91.84 Change -0.14 (-0.15%)

Greenback Interest Remains Strong Overall Despite Bank Holiday

http://www.dailyfx.com/index.php?option=com_content&task=view&id=4809&Itemid=39

US Dollar - After dominating the market yesterday with its releases, the greenback took a rest on Veteran’s Day allowing the market to recover from the whirlwind gains from the past week. Pushed to the back of traders’ minds, further effects of yesterday’s record trade deficit figure look to be rather muted until we see the net foreign securities balance next week. Here, the market will be scrutinizing whether or not foreign interest in dollar denominations will be sufficient enough to cover the ballooning total. Nevertheless, interest rates continue to be the overwhelming focus of the market, allowing the greenback to reach a two year high against the euro, a three month high against the pound, and a 18 month high against the swissie. Notably, this recent price activity shows a change in trading themes from recent years as deficits have recently lost their scare value with interest rate differentials stealing the spotlight. Heavy trade and budget deficits caused the three year sell-off to 2004, but as was seen in recent days, the market has brushed off the staggering figures within minutes and keeping dollar strength without any new fundamental support. With the Fed expected to continue raising rates above the current 4 percent, the dollar is looking more and more attractive to outside investors, especially when compared to the low interest bearing euro and yen.

[54anickel]

49. Securitizing Reserves May Be Clever, And Risky

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_mukherjee&sid=agdlSstqrM1E

Nov. 14 (Bloomberg) -- Two economists at the International Monetary Fund have devised a plan for Asian nations that want to keep their foreign-currency reserves from further swelling while avoiding pressure to let their currencies rise too much.

According to Eswar Prasad and Raghuram Rajan, the conflicting goals can be reconciled. The trick, the researchers say, lies in securitizing of a part of the reserve assets.

Rather than paying for low-yielding U.S. Treasuries by issuing costly public debt, Asian central banks can more efficiently export excess capital by letting privately owned mutual funds pool local savings to buy foreign stocks and bonds.

snip>

The Chinese central bank wouldn't have to sell more bonds to ``sterilize'' its money supply. The currency risk on the central bank's balance sheet would get capped at the existing level. That would buy China more time to hold on to its undervalued yuan.

The dollar may slide and U.S. interest rates may rise on the news that People's Bank of China is fed up with buying Treasuries.

It's a highly improbable scenario because retail Chinese investors are unlikely to pour $20 billion of their savings every month in mutual funds that invest overseas.

Nevertheless, Prasad and Rajan might want to include a statutory warning before sending their plan to Chinese policy makers: ``Implement in moderation; excessive use can kill global economy.''

[54anickel]

54. Raghuram Rajan is turning out to be an interesting addition to the IMF

He wrote a book called "Saving Capitalism From the Capitalists". He's a free-marketer that recognizes the ill effects of the power of the elitists and their back office control of government.

I'm not sure what to make of this plan for Asia though. Seems like an effort to continue with the status-quo while removing some of the pressure on China to revaluate and calls for protectionism in the US. Seems like a band-aid to the global imbalances.

[UpInArms]

3. Discontinuance of M3 (Printing Press Reports)

http://www.federalreserve.gov/releases/h6/discm3.htm

On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.

Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

(thanks to markam for posting this and to WMliberal for making sure I saw this!)

[ozymandius]

14. Bernanke's Bumpy Road Ahead

As the apparent incoming head of the Federal Reserve Board, Dr. Ben Bernanke has a tough act to follow. Alan Greenspan has been perhaps the most successful Fed chairman in history, with inflation remaining calm and only two mild recessions during his 18-year tenure.That means the incoming chairman will inherit a stable economy, with low inflation and solid growth. Yet the problems and imbalances he must handle are big. Here's a look at some of them.

Item No. 1 on the central bank's agenda is always inflation. The sharp rise in energy prices and construction costs caused by the rebuilding of New Orleans has brought that to the fore again. In his academic work and at the Fed, Bernanke has been known as an advocate of inflation targeting (see BW Online, 10/25/05, "Bernanke on the Record"). We expect him to move gradually toward that policy as chairman.

HAWK OR DOVE? The second agenda item has to be the U.S. financial market's dependence on foreign capital to finance America's deficits. The lack of household saving (now negative for a record four months) and the rising federal deficit in the wake of Hurricane Katrina make us dependent on this massive inflow of private and official money. What happens if foreigners stop shipping us all their spare cash?

No. 3 is the heavy borrowing of the household sector and the related housing boom, which has enabled that borrowing. Household debt is at a record 124% of household aftertax income. The new bankruptcy law and Katrina created a flurry of bankruptcies, as debtors filed before the new legislation became effective on Oct. 17. As a result, charge-offs will peak in the fourth quarter.

more

[UpInArms]

17. US Consumers have suffered 400% inflation since 1974

(I posted this last week)

http://www.washingtonpost.com/wp-dyn/content/article/2005/11/09/AR2005110902236.html

excerpt:

The public is irate. Congress feels the heat. The leaders of Big Oil are summoned to hearings to explain their secretive actions. It's January 1974, the last time oil executives trudged to Capitol Hill for a famous appearance before lawmakers looking into prices and profits. Gasoline supplies are short, lines snake around stations, and prices have soared to 50 cents a gallon (adjusted for inflation, that would be $2.02).

Just do the math - this one is easy $2.02 is 4 times $.50 = $2.00 = 400% inflation

Today it requires 4 times the amount of dollars to purchase the same product as it did in 1974.

I don't care how they cover this up - it is a fact - these numbers do not lie, but statistics and politicians and our government does.

Also, last week there was a Reuters newstory where they are adjusting every report that comes from the governmental agencies where they are going to start using the "base year" of 2002 instead of 1997 - this is just another shell game to cover up the massive inflation that they are perpetrating upon the citizens of this country.

[AnneD]

35. Morning Marketeers ,

:toast: I know it is a bit early, but it is 5 o'clock somewhere. I want to raise a workingman's farewell toast to Peter F Drucker who passed away recently at a ripe old age. He is considered the founder of modern management. Why salute him? you might ask. Trust me-he got IT. He considered workers not a liability but as an asset. Here is a snip it from his obit in the business section.

"After the big stock market decline of October 1987, Drucker said he had expected it, "and not for economic reasons, but for aesthetic and moral reasons." He said: "The last two years were just too disgusting a spectacle. Pigs gorging themselves at the trough are always a disgusting spectacle, and you know it won't last long."

Drucker termed Wall Street brokers "a totally nonproductive crowd which is out for a lot of easy money."

http://www.chron.com/cs/CDA/ssistory.mpl/deaths/3456045

:toast:Here's to you Peter...what I wouldn't give to have your opinion of the current situation, but then...I think I could guess.
Happy Hunting, and watch out for the bears.

[UpInArms]

37. Hiya AnneD! I'll join you in that

raised glass for Peter Drucker

:toast:

His sanity shall be missed.

[54anickel]

52. The Green Ben Bernanke (Willie)

http://www.321gold.com/editorials/willie/willie111405.html

The named appointment of Ben Bernanke (green from inexperience) represents a promise for continued dependence upon inflation for economic growth. He might possibly be the critical agent for unbridled acceleration in money supply growth which rivals the Weimar Republic. A green light for massive monetary inflation can be obtained by an incompetent targeting of inflation using fallacious statistics. His printing press will surely be dripping green ink, once it revs up in the Fed basement. One should note that before 2003 Bernanke had no banking experience, no business experience, and no financial market experience. His apprentice post for several months and Fed Governor experience counts for something, as do his clear speaking style, friendly manner, and less craggy visage. His academic roots are a huge negative, where theory is preached and arguments offered as justification for a system gone badly awry, horribly dependent upon debt and a fiat currency. The academic arena is not the place to test reality, take my word, from a guy with a doctoral degree who has seen many a doctor totally clueless about the real world.

Is the US Federal Reserve becoming an irrelevant body? Of course not, but it might fast be lowing its power. The role of the US Federal Reserve has become overshadowed by international markets. The USFed has only a few, although powerful, weapons or devices to use. They direct interest rates, control money flow, and dictate bank reserve ratios. Increasingly in today's global economy and global financial markets, these devices are outmoded. Trade-offs must be made on inflation versus employment, on continued consumption versus debt burdens, on growth versus foreign trade gaps. A sick byproduct of outsourcing is the accumulation of trade gaps and foreign ownership of US Treasury securities. These onerous symptoms are direct byproducts of the Greenspan legacy and his inflationary dependent policies. When a nation cannot obtain wealth through legitimate means, it must resort to inflation as a tool. Then it must justify the usage of inflation and lie through its teeth in bold statistical falsehoods and murky platforms of rationalization. The distortion of the Gross Domestic Product, lifted by under-stated price inflation, is fully analyzed in the November Hat Trick Letter issue, out early next week. Conundrum? What conundrum? The flat Treasury yield curve comes from flat economic growth. At least 3% of the GDP growth is pure fiction, nonsense, distortion, and lies.

Increasingly, the USFed is bewildered by the changes in progress, yet it still clings to broken theories such as the Phillips Curve. That theory links in two dimensions employment with price inflation in a pathetic narrow-minded fashion, in a childlike attempt to hold fixed all other factors. Try not to laugh too hard about fixing items in a fast changing world, with numerous changing external relevant factors. The USFed controls less of lending operations. Increasingly, big banks are not the principal intermediaries who lend from savers to borrowers. Refer to Fanny Mae, for instance, which has spewed over a $trillion into the mortgage finance system, separate from the banks, or rather as an adjunct (counterfeiter) to banks and mortgage agencies. Refer to convertible bonds from home builders, to mortgage backed bonds, to collateralized debt obligations, which all swirl around the financial markets in the derivative casinos like pinballs on a roulette wheel, bypassing banks. Banks do not contain savings ready to loan to borrowers anyway!!! We have no savings. We do have inflation engines which provide money to borrowers. Refer to venture capitalists, hedge fund lenders, and mezzanine investors, which tend to provide seed capital for new corporations, not banks. Many credit paths trace back to Asia, and more often from China.

The USFed consequently is catching up to the realities of fast evolution in financial markets, rather than leading them. No sooner did Chairman Greenspan order the mortgage rates lower from his bully pulpit, but Fanny Mae grew out of control. Unfortunately, the USFed does not pump much anymore. They influence by altering inflation expectations, and by altering perceptions of economic growth. They also regulate, which is a nice word for directing traffic. The new Chairman Bernanke will find himself caught in a nasty web of Greenspan's making. Bernanke has experience in academia, with next to no experience with financial markets, and next to no experience with big business. Bernanke could easily become the worst central banker ever as steward for the economy, but the best monetary drug dealer ever as provider of easy money. Just think how Greenspan has presided over a big economic collapse of the manufacturing sector, huge debts, housing bubble, and bubblicious false income. Bernanke will surely be forced to learn on the job, and react to conditions beyond his control.

more...


Monetary Messiah

[UpInArms]

19. 'Make believe' at the Fed?

http://www.marketwatch.com/news/story.asp?guid=%7BE41A33BD%2D28D2%2D448C%2DB004%2D275D91CAADEB%7D&siteid=mktw

(1/2 way down the page)

Why gold went back up, though, divides the letters.

The Gartman Letter, for one, has suggested there's been some purchasing by smaller central banks. And Bill Murphy has a correspondent identifying South Korea's central bank. See Murphy's Lemetropolecafe.com here.

Those who incline to a macro view, however, had an arresting fact to consider. It was well put by gold veteran James Turk of the Free Market Gold & Money Report. Turk wants to:

"Berate the Fed for an unbelievable announcement made this past week. Without explanation, the Fed disclosed: 'On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate.' "

Not unreasonably, Turk concludes:

"Why does the Fed no longer want to report the total quantity of dollars in circulation? They know what's coming -- massive amounts of dollar creation to fund the worsening trade and federal government budget deficits. The Fed is just doing what other government agencies already do when they don't like the result of their statistical calculations. Like children, they play 'make believe.' "

The Fed might have been more discreet. But is gold watching?

...more not related at link...

[54anickel]

20. WTF?!?! Why are they going into hiding? Weren't repos going to

figure into the changes regarding Treasuries as well? Remember that little article where they were going to be meeting with the bond markets people that would make the Treasury the "borrower of last resort"? What "deal" did they strike up that they now want to hide these figures? Sounds to me like there will be some under the table bail-outs of hedge funds and derivatives coming up next year. :shrug:

edit to add:

Can't wait to read Mogambo rant away on this one!

[54anickel]

22. M3 becomes a liability for the Fed

http://members.aol.com/gparrishjr/m3_inflation.html

If an increase in the money supply is the cause of a rise in the general price level than M3 is an important measure of price inflation simply because it is considered to be the broadest measure of money and, hence, the best measure of price inflation. With M3 crossing the 10 trillion dollar level the Fed has decided to stop publication of this important data. The Fed by nature is an inflation machine built to support limitless spending by the government. Yet the Fed also enjoys the reputation of being an inflation fighter. In order to protect its image the Fed has found it necessary to cease publication of M3 data. The information provided by M3, coupled with the 1-Year Treasury Constant Maturity Rate, can allow anyone with a spreadsheet to track the rate of inflation and real interest rates. The following chart illustrates this point.

snip>

...My basic premise is that any increase in the money supply robs someone of the purchasing power of their medium of exchange (money) simply because someone else has produced more of the same medium of exchange without working for it. That is unless you consider running a printing press or pecking the keys of a computer keyboard to create money to be legitimate work.

According to the above chart real rates have been negative for almost 10 years now. One would think that price inflation would have shown up somewhere. Perhaps the stock and housing markets should be checked? One thing really bothers me though and I will share my concern with you. How has the gold price managed (or should I say been managed) not to reflect this massive increase in the money supply? I will have to leave the answer to that question to others.

more...


Free Market News Network seems to be the only place that considers this newsworthy, Google's not turning much else up on it yet.
http://www.freemarketnews.com/Feedback.asp?nid=1141



http://www.moneyweb.co.za/economy/soapbox/529731.htm
Inflation’s alive and well, though unseen

Inflation is correctly defined as the increase in money supply, which, if it outstrips output of goods and services, results in price rises. In this respect Ben Bernanke is aptly described as an inflation targeter: he and his fellow Fed partners have presided over one of the greatest inflationary episodes in history.

Mainstream economics rarely learns from its mistakes as to do so would mean throwing away the vast bulk of economics texts and theory written over the last 50 years. In the run up to the Great Depression eminent economists such as Irving Fisher were fooled into believing that the global economy had entered a new golden era. Why? Because they observed that prices were stable.

This is still the notion that lies at the heart of inflation targeters both formal (Bernanke) and informal (Greenspan). They look to a general price index - whether it be the CPI, the PCE or some other inadequate variant - to guide their policies.

Stable prices of around 1-2% are the desired policy target. The problem is that prices do not constitute inflation or deflation; money does. The chart gives us an idea of just how inflationary the Greenspan Fed has been over the last decade.

more...

[EuroObserver]

25. So, the bottom line here is that the Bernanke Fed's first step

in 'targetting inflation' is to eliminate the best measure of broad monetary inflation hitherto available to us?

ie. - 'fix' the problem (temporarily) by no longer (at least in public) properly measuring it?

[hunter]

42. Why not? They fix environmental problems that way too...

Lalalalalalalalala.... I can't hear you!

[UpInArms]

43. GOPpiggy standard response

Does anyone have the link to that splitscreen jpg where that weird woman pundit has her fingers in her ears, saying "lalalalala" while on-air with Randi Rhodes?

[54anickel]

67. The Great Debate!

http://www.321gold.com/editorials/saxena/saxena111405.html

snip>

The fact that the public does not understand inflation or deflation allows the central banks to carry on with their money printing agenda. All this while, the public remains oblivious.

snip>

Despite all the brainwashing, close inspection reveals that Japan never really had any deflation! The truth is that throughout the past 15 years, Japan's money supply has continued to grow (inflation). Figure 2 clearly shows that Japan has witnessed inflation and not deflation since 1980. Sure, Japanese asset prices have fallen since 1990 but the cause is not deflation as advertised by the establishment. In fact, a sharp rise in interest-rates was the trigger, which caused the Japanese stock and property bubbles to burst.

These days, we are being told that the Federal Reserve is raising interest-rates to "control" inflation. If the Federal Reserve was really curbing inflation, why would the American money supply continue to surge despite recent interest-rate hikes? Despite all the noise about inflation, the Federal Reserve has added roughly US$1 trillion to the system over the last year! So, on one hand the Federal Reserve continues to inflate and on the other hand it is raising rates. "But why would it do that?" you may ask. You see, the US economy is in a mess and a true contraction in the money supply (deflation) would send the whole world into a severe recession. Under this scenario, millions of companies and individuals would go bust and the entire financial system may collapse. Therefore, you can be rest assured that the Federal Reserve will continue to inflate for as long as possible. Take a look at Figure 3, which shows the relentless growth of money supply (inflation) in the US. It is shocking to note that the broad-based money supply (M3) has increased from US$ 6.5 trillion to US$10 trillion in 5 years - representing a 54% increase! Yeah, Greenspan did a fine job "managing" inflation!

As far as the current situation is concerned, I believe the Federal Reserve is raising interest-rates to prevent an outright collapse of the US dollar. A weak currency needs to offer a high yield (interest) in order to attract capital. Indonesia, Russia, Brazil and Venezuela come to mind. Today, the US is the world's largest debtor nation and its current account deficit stands at US$ 730 billion or 6.3% of GDP! Students of economic history know that no other country or its currency has ever managed to get away with such economic murder. You can be rest assured that it is obvious to both Greenspan and Bernanke that the US dollar is skating on very thin ice. In an attempt to rescue the situation, interest-rates in the US are being pulled up to increase the demand for dollars.

In my view, interest-rates in the US will rise much higher than most people expect at this time. If history is any guide, Mr. Bernanke will continue to inflate the money supply whilst increasing interest-rates over the coming months. Already, he has talked about dropping dollar bills from helicopters. Well, at least the guy is honest!

more...

[UpInArms]

26. Printing Press Report:Fed adds temporary U.S. reserves via overnight RPs

(these reports will be "discontinued" as of March 23, 2006 - so that the Fed can hide "Chopper" Ben's Printing Press Extravaganza)

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-14T143410Z_01_N14343354_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, Nov 14 (Reuters) - The Federal Reserve said on Monday that it was adding temporary reserves to the U.S. banking system through overnight system repurchase agreements.

The benchmark federal funds rate last traded at 4.00 percent, the Fed's target for the overnight lending rate.

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

Remarks by Governor Ben S. Bernanke
Before the National Economists Club, Washington, D.C.
November 21, 2002

http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/default.htm

excerpt:

What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

Of course, the U.S. government is not going to print money and distribute it willy-nilly (although as we will see later, there are practical policies that approximate this behavior).8 Normally, money is injected into the economy through asset purchases by the Federal Reserve. To stimulate aggregate spending when short-term interest rates have reached zero, the Fed must expand the scale of its asset purchases or, possibly, expand the menu of assets that it buys. Alternatively, the Fed could find other ways of injecting money into the system--for example, by making low-interest-rate loans to banks or cooperating with the fiscal authorities. Each method of adding money to the economy has advantages and drawbacks, both technical and economic. One important concern in practice is that calibrating the economic effects of nonstandard means of injecting money may be difficult, given our relative lack of experience with such policies. Thus, as I have stressed already, prevention of deflation remains preferable to having to cure it. If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation.

...more...

[EuroObserver]

32. Mogambo, last week

NECESSINFLATION
by The Mogambo Guru

The Fed actually drained a little credit last week, taking it down $3 billion. Why? Now that Ben "Bird Brain" Bernanke has been chosen to take over the Federal Reserve, they know that when the guy running the show actually wants inflation, as he manifestly does, then it is time to celebrate with a big blowout toga party, using petty cash to get some kegs of beer and some of whatever in the hell they are smoking that makes them think their stupid little New Age theories could possibly work in the real world.

.../more: http://www.dailyreckoning.com/old%20site/oldWriters/Mogambo/DREssays/DR110705.html

[KayLaw]

41. I was just about to post something similar.

Mogambo Guru is going to just love this!

:eyes:

[UpInArms]

39. Printing Press Report: US Treasury Dept to sell $24 bln bills on Tuesday

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-14T160426Z_01_WAT004361_RTRIDST_0_ECONOMY-BILLS-ANNOUNCEMENT-URGENT.XML

WASHINGTON, Nov 14 (Reuters) - The U.S. Treasury Department said on Monday it will sell $24 billion of four-week bills on Tuesday, Nov. 15. to be issued on Nov. 17.

Proceeds will go to refund about $13 billion of publicly held bills maturing Nov. 17 and raise new cash of about $11 billion. The bills mature Dec. 15.

Treasury said the net long position reporting threshold is $8.4 billion.

Noncompetitive bids must be received before 12:00 noon EST (1700 GMT) and competitive bids by 1:00 p.m. (1800 GMT).

...more...

As of March 23, 2006, this information about public money will no longer be public.

Our government is preparing to lie and obsfuscate and cover up a massive crime.


The estimated population of the United States is 297,705,673
so each citizen's share of this debt is $27,172.81.

The National Debt has continued to increase an average of
$3.48 billion per day since September 30, 2005

[54anickel]

56. U.S. money supply drops $3.4 billion

http://www.mysanantonio.com/business/stories/MYSA111405.2R.pfpbriefs.6447851.html

snip>

U.S. money supply drops $3.4 billion
One measure of the U.S. money supply fell $3.4 billion in the week that ended Oct. 31, Federal Reserve statistics showed.

That left M2 growing at an annual rate of 3.9 percent for the past 52 weeks, below the target of 5 percent the Fed once set for maximum growth. The Fed no longer has a formal target.

The Fed reports three measures of the money supply each week. M1 includes all currency held by consumers and companies for spending, money held in checking accounts and travelers checks. M2, the most widely followed of the three, adds savings and private holdings in money market mutual funds. M3 adds jumbo certificates of deposit and other time deposits in excess of $100,000.

During the latest reporting week, M1 rose $7.3 billion. M3 fell $1.4 billion during the week.

[54anickel]

58. While we're looking at the measures of money...Remember this one?

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=46829

Real Estate and the Money Supply
September 28, 2005



snip>

Household Cash Flow Model

We have restructured the information that we gathered in our previous papers to show the interaction of consumer cash flow and consumer money supply. Historically, money supply flows from left to right in this model. Consumer daily life usually produces surplus funds that can be used for consumer investing.

In 2005, money is flowing backward; or from right to left. The consumer needs to constantly replenish M-1 with funds from non-M-1 M-2 in order to avoid a liquidity crunch. This means that long-term investing is the source of the funds for daily life instead of daily life being the source of funds for long-term investing.

more...

[UpInArms]

60. ah yes, the "eat your house" theory of consumptive economics ... eom

[UpInArms]

57. Treasurys ease ahead of data influx

http://www.marketwatch.com/news/story.asp?guid=%7BC15A9B3C%2D04A3%2D44E6%2DB4FE%2DBBBCF872022A%7D&siteid=mktw

CHICAGO (MarketWatch) - Treasury prices edged lower Monday as caution crept in at the start of one of the busiest weeks for economic data this year.

The bond market ended last week on firm footing, with the success of the final leg of the government's quarterly debt refunding, 10-year notes, making up for lackluster demand for the first two installments. The 10-year note sale drew record participation from indirect bidders, the group that includes foreign central banks.

But price gains were a little harder to come by at week's start, with focus already trained on the week's key release, consumer prices on Wednesday. Most economists look for a bond friendly reading, showing moderation from the previous month, but uncertainty left the bond market on guard.

<snip>

Next week's shortened week due to the U.S. Thanksgiving holiday also put added emphasis on the reports and speeches due in coming days, beginning with New York-area factory data, the producer price index and retail sales on Tuesday; the consumer price index and inventory data Wednesday; and housing starts, national production activity from the Federal Reserve and a Philadelphia-area business gauge Thursday. See Economic Calendar and Forecasts.

...more...

[UpInArms]

72. Treasurys end lower ahead of economic data barrage

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38670.649486412-850454437&siteID=mktw&scid=0&doctype=806&

CHICAGO (MarketWatch) -- Treasurys fell Monday ahead of a flurry of U.S. economic data this week that most analysts see arguing in favor of higher Federal Reserve interest rates over coming months. Bonds held losses after Federal Reserve Chairman Alan Greenspan repeated his expectation that foreign investment won't prop up the U.S. trade deficit indefinitely. That follows record purchases by indirect bidders, including foreign central banks, at last week's auction of 10-year notes. The benchmark 10-year note finished trading down 14/32 at 99 5/32. That shaved more than $2.50 per each $1,000 from its value. The drop in price lifted its yield ($TNX) to 4.61% vs. 4.55% Friday.

[UpInArms]

4. Japan govt council urges cuts in govt workers, pay

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-14T101052Z_01_T114896_RTRIDST_0_ECONOMY-JAPAN-COUNCIL.XML

TOKYO, Nov 14 (Reuters) - Japanese ministers and policy advisers called on Monday for cuts in both the number and total salary of the country's civil servants to help limit government expenses and restore ailing state finances.

The Council on Economic and Fiscal Policy, including cabinet ministers, academics and business leaders, agreed the government should halve the total payrolls for its employees as a proportion of nominal GDP (gross domestic product) within the next decade.

"We propose drastic cuts to the government payroll, by radically cutting the total number of civil servants and enacting bold reforms in the payroll system," the council, which is the government's top economic advisory group, said in a draft report.

The report suggested cutting the number of workers on central government payrolls, currently around 687,000 excluding postal workers, by more than 5 percent in the next five years.

It also urged changes to civil servants' remuneration system to ensure salaries reflect workers' abilities rather than being automatically calculated based on the number of years served.

...more...

[UpInArms]

5. (CT) Advest (Insurance) Job Cuts To Be Sizable

http://www.courant.com/business/hc-advest1112.artnov12,0,1670653.story?coll=hc-headlines-business

Downtown Hartford will take the brunt of job cuts whenAdvest, the old-line Hartford brokerage, is acquired by investment giant Merrill Lynch & Co. at the beginning of December.

Merrill Lynch confirmed Friday that cuts in the city will be "significant," but declined to discuss the specific number of Advest employees who will lose their jobs.

Advest now employs 370, including 30 brokers, at its downtown Hartford headquarters at State House Square. Sources familiar with the plans believe at least 200 positions - mostly processing, administrative and other corporate jobs - will be eliminated.

<snip>

In a typical merger, the duties of employees at the corporate headquarters of an acquired company are often eliminated because their jobs are performed by employees at the company that is making the acquisition. By cutting jobs and reducing payroll and benefit costs, the acquiring company can save money and still get a big chunk of business to boost profits.

The prospect of more job losses in downtown Hartford comes as the city continues to struggle with corporate downsizings in the wake of financial services mergers. This spring, Hartford-based Travelers Life & Annuity employed about 1,800 downtown. Acquired on June 30 by MetLife, the combined workforce downtown shrank to 1,557 by Sept. 30.

...more...

[UpInArms]

6. Trillion-dollar query: Will buyout bubble burst?

http://www.iht.com/bin/print_ipub.php?file=/articles/2005/11/13/business/bubble.php

NEW YORK A year ago this week, Henry Kravis, the legendary buyout mogul who invented the modern-day private equity industry, gave a rare speech to a group of investors in New York. Describing how far the business had come, he recounted how difficult it had been for him to raise $355 million to buy one of his first companies, Houdaille Industries, in 1979.

"The availability of financing was our biggest challenge," he said.

Today, he has the opposite problem. Investors have been throwing money at the red-hot leveraged buyout industry, so much so that Kravis has had to turn some of them away.

Private equity, it seems, now owns everything: from Hertz to Warner Music.

In the United States, buyout firms have spent more than $130 billion this year gobbling up companies. In Britain, companies owned by buyout firms employ 18 percent of the private sector, according to the British Venture Capital Association. And with more than $100 billion in unspent money this year still swirling around the industry, there is a lot more buying to be done.

The trillion-dollar question is whether these shopaholics are setting themselves up for a giant fall. If the market begins to show even the faintest signs of strain, this bubble may pop, according to many financial analysts and private equity players.

If that happens, the leveraged buyout boom and bust that Michael Milken led in the 1980s could seem like a dress rehearsal for the mess to come. As Kravis said in his speech: "Unfortunately, there is a flip side to having access to plentiful capital. It means that too many people without experience in building businesses have too much money."

...more...

[54anickel]

23. Bit more...I was just reading this on the NYT

http://www.nytimes.com/2005/11/13/business/yourmoney/13buyout.html?pagewanted=1

But here's the rub: In the next three years, to reap returns on all those big-name investments they have been making, private equity firms are going to have to sell $500 billion worth of assets. The question is, to whom? Even in the last three years, in as big a bull market as they come, private equity has never sold more than $153.2 billion in a year, according to Freeman & Company. At the same time, the investment firms will have to keep spending. And the low-hanging fruit has already been taken.

snip>

ALREADY, there are reminders that the business can turn ugly overnight. Thomas H. Lee Partners, the Boston private equity firm famed for buying Snapple for $135 million in 1992 and selling it two years later to Quaker Oats for $1.7 billion, recently was badly burned on its investment in Refco, the commodities trader that filed for bankruptcy protection last month. While the setback has hardly sunk the Lee firm, it is an illustration of how risky these investments can be.

Firms may have a particularly tough time exiting some of their investments because investors are taking a more skeptical view of initial public offerings backed by private equity. In recent months, several high-profile quick flips have left critics wondering whether buyout firms were using such offerings simply to line their pockets, rather than using the proceeds to support companies.

snip>

In hot markets, you can sell crummy companies," Mr. James said. "In less ebullient markets, the really marginal companies take more than their disproportionate share of the pain. That's where you'll see it."

[UpInArms]

7. Former Refco chief faces eight charges

http://www.thestandard.com.hk/news_detail.asp?pp_cat=17&art_id=5493&sid=5441408&con_type=1

The former chief executive of New York-based brokerage Refco, Phillip Bennett, has been indicted on conspiracy, securities fraud and other charges.

In an eight-count indictment, Manhattan federal prosecutors also contended that Bennett should forfeit at least US$700 million (HK$5.46 billion).

The indictment charged Bennett with one count of securities fraud, one count of conspiracy, three counts of making false filings with the US Securities and Exchange Commission and three counts of wire fraud.

Bennett, 57, is accused of hiding hundreds of millions of dollars in bad debts from Refco investors that boosted the company's financial strength ahead of its initial public offering this past summer.

...more...

[UpInArms]

12. Refco's Bennett planned to pay back loan next year

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-14T132546Z_01_L14707273_RTRIDST_0_FINANCIAL-REFCO-BAWAG.XML

VIENNA, Nov 14 (Reuters) - The former chief executive of collapsed futures trader Refco Inc (RFXCQ.PK: Quote, Profile, Research), Phillip Bennett, planned to pay back the loan he received from Austria's BAWAG with proceeds from a share sale next year, BAWAG said on Monday.

A company controlled by Bennett took a 350 million-euro ($410 million) loan in October from BAWAG, Austria's fourth-largest bank, to pay off an inter-company loan at Refco Inc., just days before he was suspended and arrested for securities fraud.

A spokesman for BAWAG said the maturity for the loan was one year, and that Bennett had pledged to pay it back with the proceeds of a planned secondary public offering of his Refco shares. He had also pledged the shares as collateral.

The spokesman declined to comment on a report in Austrian newspaper Der Standard that the net profit the bank would have made on the loan was 10 million euros -- which would imply it secured a substantial risk premium for the loan.

...more...

[UpInArms]

47. BAWAG board to discuss Refco loan probe Thursday

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-14T162726Z_01_L14751046_RTRIDST_0_FINANCIAL-REFCO-BAWAG-UPDATE-1.XML

VIENNA, Nov 14 (Reuters) - The supervisory board of BAWAG P.S.K., a top creditor of collapsed futures trader Refco, will revisit on Thursday why the Austrian bank approved a loan to Refco's former head last month just before his arrest.

BAWAG, owned by Austria's trade union federation, paid a 350 million euro ($410 million) loan to Refco's then chief executive, Phillip Bennett, on Oct. 10, a day before he was arrested for securities fraud and shortly before Refco (RFXCQ.PK: Quote, Profile, Research) filed for insolvency.

Austrian banking watchdog FMA launched an in-depth investigation into the loan approval on Friday following an on-site probe by officials from the country's central bank. The investigation means it suspects the banking law was broken.

The central bank's report and the FMA investigation will be discussed at BAWAG's regular supervisory board meeting on Thursday, a spokesman for the trade union federation said on Monday. All but one board member are union officials.

The FMA can order bank officials to resign if the investigation confirms its suspicion that they broke the banking law. In past cases in Austria, banking officials often resigned before the FMA demanded that they be suspended.

...more...

[ozymandius]

8. Oil Prices Briefly Up on Weather Forecast

SINGAPORE - Crude oil futures briefly rose above $58 a barrel on Monday on a forecast that a cold snap was headed for the northeastern United States, the world's biggest winter heating fuel market.

Light, sweet crude for December delivery on the New York Mercantile Exchange rose as much as 57 cents to $58.10 a barrel in electronic trading before slipping to $57.95, up 42 cents from last Friday's close.

-cut-

Friday's close was the benchmark contract's lowest close in four months. The tumultuous oil market has been roiled in recent months from outages caused by hurricanes Katrina and Rita and speculation there wouldn't be enough supply to counter winter demand, when usage of heating oil rises.

Respected forecaster AccuWeather predicted a "big change" in the weather pattern this week, with a cold jet stream, coming from Canada, hitting the eastern U.S. by midweek and stay through the weekend, AccuWeather said.

more

[ozymandius]

9. Senate bill would let U.S. ban petroleum exports

WASHINGTON (Reuters) - The U.S. Energy Secretary would gain authority to temporarily ban exports of American-produced gasoline, heating oil and other refined petroleum products during a supply emergency, under legislation introduced in the U.S. Senate.

Under the bill, introduced on Thursday by Democrat Herb Kohl of Wisconsin, oil product exports from a specific region of the country could by banned if Energy Secretary Sam Bodman determined supplies in that area have fallen or will fall below expected demand.

Kohl and Republican Sen. Susan Collins (news, bio, voting record) of Maine had asked eight major oil companies last week not to export heating oil this winter to help keep prices down and ensure adequate supply for the American market.

"We believe that by halting such exports, your companies could significantly ease the expected burden of skyrocketing home heating prices for the coming winter," the lawmakers said in a letter to the heads of the largest producers of home heating oil in the United States.

more

[UpInArms]

10. Dec Crude @ $58.07 bbl - Dec NatGas @ $11.97 mln btus

8:24am 11/14/05 DEC UNLEADED GASOLINE UP 1.60C AT $1.5010 A GALLON

8:24am 11/14/05 DEC HEATING OIL UP 2.90C AT $1.7525 A GALLON

8:25am 11/14/05 DEC NATGAS UP 25.80C AT $11.97 PER MILLION BTUS

8:24am 11/14/05 DEC CRUDE UP 54C AT $58.07 A BARREL

[UpInArms]

70. Dec Crude closes @ $57.69 bbl - Dec NatGas @ $11.607 mln btus

2:55pm 11/14/05 DEC CRUDE CLOSES AT $57.69/BRL, UP 16C, OR 0.3%

2:50pm 11/14/05 DEC NATURAL GAS FALLS 10.5C TO CLOSE AT $11.607/MLN BTUS

[ozymandius]

11. Stock futures flat after Georgia-Pacific

NEW YORK (Reuters) - U.S. stock futures pointed to a nearly flat market opening on Monday but could receive a lift as news of paper producer Georgia-Pacific Corp.'s (NYSE:GP - news) agreement over the weekend to be bought by conglomerate Koch Industries, Inc. spurred talk of other acquisitions.

-cut-

"Georgia-Pacific has been rumored to be a buyout candidate several times over the last couple of years, and this will start people looking at companies that have the potential to be acquired," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey. "That's usually pretty bullish."

more

[ozymandius]

18. Stocks Are Set to Open Lower

Stocks Set to Open Lower; Merger and Acquisition News, Wal-Mart Earnings Look to Shape Market

LONDON (AP) -- U.S. stock futures are trading lower Monday after a $21-billion acquisition of Georgia-Pacific and Knight-Ridder Inc. put itself up for sale, with Wal-Mart Stores meeting earnings expectations for the third quarter.

Dow Jones futures were recently down 14 points, S&P 500 futures were off 1.20 points and Nasdaq 100 futures were down 0.5 of a point.

more...

http://biz.yahoo.com/ap/051114/wall_street.html?.v=4

[UpInArms]

13. US housing slowdown to hurt some mortgage bonds-PIMCO

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-14T131020Z_01_N25482471_RTRIDST_0_FINANCIAL-MORTGAGES.XML

NEW YORK, Nov 14 (Reuters) - Pacific Investment Management Company, the biggest U.S. bond mutual fund, expects a slowdown in the housing market to negatively impact the value of certain mortgage-backed securities.

The combination of home affordability and interest-rate increases from the Federal Reserve will slow the U.S. housing market in 2006, which will probably cause prepayment speeds to slow, said Scott Simon, managing director and head of the mortgage and ABS teams at PIMCO.

Prepayment speeds are a key factor for determining the value of mortgage bonds.

"It (a slowdown in housing) will be much more upsetting to subordinated pieces of private label mortgage-backed and asset-backed securities than it will be on those backed by conventional 15- and 30-year mortgages backed by Fannie Mae <FNM.N,>, Freddie Mac (FRE.N: Quote, Profile, Research) and Ginnie Mae," said Simon.

<snip>

"If housing moderates without actually going down, there will be an increase in delinquencies and losses on the underlying mortgages in these deals," said Simon, who oversees over $150 billion in mortgage-related securities.

...more...

[54anickel]

65. Softening up

http://www.kitco.com/weekly/paulvaneeden/nov122005.html

In the US, we can finance our houses with thirty, and now forty-year mortgages. But what is really neat is that homeowners can lock in the interest rate on their mortgages for the entire term of the mortgage. So today, for example, I could buy a house and get a thirty-year mortgage with a fixed interest rate for around 6.25%. That is a fantastic deal, if you think about it. What is the likelihood that interest rates will remain as low as they are for the next, oh, fifteen years? Over the course of a thirty-year mortgage a fixed interest rate loan in the low 6% level is almost free money. The limit to the benefit is, of course, that few people live in one house for more than about five years nowadays, because by then they want to move into a nicer, newer, bigger house. Over the past decade that worked out well since real estate prices were rising and interest rates were falling. But real estate prices have gone up so much that it is becoming almost impossible for homebuyers to afford the homes they want.

According the Mortgage Bankers Association there has been a significant (and alarming, depending on your point of view) increase in adjustable rate and interest only mortgages. If you want to buy a house but cannot afford a fixed rate mortgage, you can always get an adjustable rate mortgage. Because the interest rate in an adjustable rate mortgage will increase when interest rates rise, the lenders do not have to protect themselves against possible interest rate hikes. Therefore the current interest rate for adjustable rate mortgages is lower than comparable fixed rate mortgages (because the borrower takes the risk).

However, because short-term interest rates have been rising faster than long-term interest rates, the difference between fixed rate mortgages and adjustable rate mortgages has been narrowing, and that means Joe Spender just cannot afford that nice house that he just cannot afford but must have. Not to worry Joe, the banks have a solution: interest only mortgages.

As their name suggests, holders of interest only mortgages don’t have to pay back any principal during the initial term of the mortgage, only the interest. There are even optional interest only mortgages: with those you don’t have to pay all the interest; the interest that you don’t pay accrues as principal on your mortgage.

snip>

In August Freddie Mac announced that 74% of all the mortgage loans it refinanced resulted in an increase in loan amounts, which means the borrowers were cashing out the increase in their homes’ value. What do they do with the money? Harvard’s Joint Center for Housing Studies reports that Americans spent $133 billion on home improvements during the 12 months that ended on June 30, 2005. Of course, some people spent their extra cash on vacations, new cars, shopping mall excursions or to consolidate credit card debt that they could no longer pay. The nice thing about consolidating your credit card debt by refinancing your house is that you instantly have thousands of dollars of credit available again.

more...

[UpInArms]

15. Allstate says has liquidity for dividends, debt

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-14T130204Z_01_WEN4290_RTRIDST_0_FINANCIAL-ALLSTATE-URGENT.XML

NEW YORK, Nov 14 (Reuters) - Allstate Corp. (ALL.N: Quote, Profile, Research), which posted a $1.55 billion third-quarter loss because of catastrophes including Hurricanes Katrina and Rita, on Monday said it will have sufficient liquidity in 2005 and 2006 to fund shareholder dividends, debt payments and the remainder of its current stock buyback program.

Northbrook, Illinois-based Allstate, the largest publicly traded U.S. home and auto insurer, said its liquidity sources include dividends from its Allstate Insurance Co. affiliate and $2.29 billion of investments at its Kennett Capital Inc. subsidiary. Allstate said it expects Allstate Insurance to pay to it the maximum amount of ordinary dividends allowed under the Illinois insurance code.

...more...

[ozymandius]

16. Retail sales up 0.6 percent: report

5 minutes ago
NEW YORK (Reuters) - U.S. retail sales climbed in October from September on gains in clothing, household accessories and furniture, according to a report released on Monday.

The October increase was smaller than the previous month's gain due to lower gasoline prices, which had been driven up by hurricanes in the U.S. Gulf Coast region.

Consumer spending in the South Central region rebounded from a September drop in the aftermath of Hurricanes Katrina and Rita, according to SpendingPulse, a data service provided by MasterCard Advisors, an arm of MasterCard International.

October U.S. retail spending, excluding car sales, totaled $277.6 billion on a seasonally adjusted basis, up 0.6 percent from September and up 7.8 percent from a year earlier.

more

[UpInArms]

53. 0.6% increase in sales - now being called data "leak" by government

http://today.reuters.com/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2005-11-14T170842Z_01_N14411472_RTRIDST_0_MARKETS-BONDS-UPDATE-1.XML

U.S. Treasuries down amid retail sales data buzz

NEW YORK, Nov 14 (Reuters) - U.S. Treasury debt prices fell on Monday as talk of strong October retail sales data quickly worked its way through a market anxiously anticipating a heavy week of data.

The government's retail sales data, due on Tuesday at 8:30 a.m. EST (1330 GMT), was hanging over trade on Monday after a private sector report that, excluding autos, sales rose 0.6 percent -- well above economists' expectations of a 0.2 percent increase in Tuesday's separate data.

The report from SpendingPulse, a data service unit of MasterCard, filtered through a market eager for something to trade on, and was morphed into rumors that the data were leaked by the government.

"The rumor hurting the market is about a 0.6 percent gain (in retail sales) ex-autos, and is being talked up as a leak. This is not the official figure," said David Ader, U.S. government bond strategist at RBS Greenwich, who reckoned the effects would be short-lived.

...more...

[ozymandius]

21. markets are open for giving you the bidness

9:31
Dow 10,676.92 -9.12 (-0.09%)
Nasdaq 2,203.99 +1.52 (+0.07%)
S&P 500 1,234.33 -0.39 (-0.03%)
10-Yr Bond 45.59 -0.05 (-0.11%)
NYSE Volume 10,051,000
Nasdaq Volume 30,454,000

9:12AM: S&P futures vs fair value: +0.6. Nasdaq futures vs fair value: +1.0.
9:00AM: S&P futures vs fair value: +0.1. Nasdaq futures vs fair value: flat. Versus fair value, futures trade still suggests a flat open for the cash market as traders digest mixed news in the early going. Earnings-related rises in Wal-Mart (WMT) and Lowe's (LOW) continue to provide support, but rising crude ($58.15 per barrel) and several notable downgrades serve as offsetting factors. Among stocks downgraded this morning are Hewlett-Packard (HPQ), Motorola (MOT), Micron (MU), Kohl's (KSS), and State Street (STT).

[54anickel]

24. Will They Come?

http://www.washingtonpost.com/wp-dyn/content/article/2005/11/13/AR2005111300680.html

Tommy Ellis, a principal in Carlyle Group, stands in a field of grass and brush at routes 28 and 50 in Chantilly, where the worldwide investment company plans to construct two five-story office buildings, with tenants as yet unsigned. The air is heavy with confidence.

District-based Carlyle is among a handful of developers preparing to build here at Westfields Corporate Center, and while each project has its own distinctions -- Carlyle is offering high security, for example -- they incorporate a new reality about the commercial real estate market in Northern Virginia: Building on speculation is back, thanks to the boom in government contracting.

snip>

Developers expect more demand for office space in pockets of Northern Virginia, especially Westfields, as agencies and contractors hunt for sturdier walls, unbreakable glass and buildings set far enough back from the road to deter attacks. Westfields, an office park of about 1,000 acres, also houses the National Reconnaissance Office, the top-secret agency that designs, builds and operates the nation's reconnaissance satellites.

"It's the who's who of defense contractors out here," said Ellis, pointing to a building at Westfields that houses outposts of Computer Sciences Corp. and General Dynamics Corp.

A new CIA complex is being planned near Westfields, and developers expect the presence of the agency to attract even more contractors eager for office space nearby.

snip>

That construction on speculation comes as a dramatic counterpoint to recent history. The technology boom and bust of the 1990s left companies with millions of unleased square feet on their hands, causing vacancy rates to spike and rents to plummet. Caution has ruled since, at Westfields and elsewhere, with most developers signing up tenants before putting up buildings.

Hmmmph, Carlyle seems pretty damned confident though :grr:

[AnneD]

30. They should....

they have long and cozy roots with the Bush family. Just google Carlyle group and James Baker III (the Bush family lawyer). Be sure and either have a trash can or air sickness bag handy. If this doesn't convince you we have a shadow government-nothing else will. Baker is the concillaria for this mafia. Just follow him and you'll see how sordid they get. He seems to do all the dirty work. I have a ring side seat here in Houston.

[54anickel]

34. Oh yeah, here's a nice collection that's a good starting point if anyone

doubts the connections.

http://www.hereinreality.com/carlyle.html

[AnneD]

46. Good starting link 54anickle...

I heard Baker was heating up the paper shredders in Fla. just before the first Gulf war trying to get rid of the paper trail that would lead back to GHWB. I worked for Pennzoil, in the same building as Zapata Oil at one time. Many of my geologist friends could never figure out how Zapata worked. They were a decent sized producer, but they didn't have too many rigs or geologist. I referred to it as 'no visable means of support' company. They made bucks, but you could never figure it out. I had my suspicions but it wasn't until a few years later that I started figuring it out via my quirky reading on the web. The one thing I will say (actually it is an old Indian saying) the earth gives back it's secrets in it's time. This will come to light. I think Karma will continue to bless the Bush progeny-it just goes hand in hand.

[UpInArms]

27. Washed-Up Has-Been Partisan Hack obscures his responsibility for deficits

Greenspan: U.S. current account deficit cannot grow forever

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38670.4302009954-850415070&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The U.S. current account deficit, which is now above 6% of GDP, cannot continue to widen forever, said Fed chief Alan Greenspan. At some point, foreign investors will take steps to limit their dollar holdings, and there is little U.S policymakers can, or should, do to stem this natural market process, he said in a speech via video-conference to a Bank of Mexico conference. Greenspan said he did not think the U.S. dollar would lose its status as a reserve currency as a result of this adjustment, but said economic flexibility from de-regulation remains critical to allow the U.S. to adjust to any economic aftershocks from a shift in the current account.

[UpInArms]

36. Meanspin scratches head over current account gap

http://www.marketwatch.com/news/story.asp?guid=%7BA1B3E8D3%2DB8D7%2D41E1%2DBE60%2DC220BD2DD402%7D&siteid=mktw

WASHINGTON (MarketWatch) - The U.S. current account deficit has been widening steadily since 1997 and Fed chief Alan Greenspan has joined the chorus of analysts wondering when and how it will end.

"Given that we have yet to experience difficulties in funding a current account deficit that exceeds 6% of our GDP, what are the limits to the foreign markets' absorption of claims on U.S. residents?" Greenspan asked in a speech Monday delivered to a conference sponsored by the Bank of Mexico. Read full text of Greenspan's remarks.

There was little financial market reaction to his speech. See full story.

Greenspan is a past master of addressing tough economic problems in the form of questions.

<snip>

Greenspan threw some cold water on a favored solution, who argue that a cut in the U.S. federal budget deficit may help reduce the current account gap.

...more...

Whole-blackheartedly embracing RayGun's "deficits don't matter" mantra.

[54anickel]

55. Ewww, he's touched on the "it'll never happen here" scenario. He's

obviously thinking about it then.

The Fed chief noted that private international investors are using the euro more in their transactions this year. So far, central banks have not followed suit, he said.

Although the dollar will not lose its status as the world's reserve currency "any time soon," policymakers should study the experience of the British pound, which faded as the world's dominant currency after World War II.

[UpInArms]

62. "For Now" caveat - okay, when will they "balk"?

U.S. able to fund trade gap, for now - Greenspan

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-14T182341Z_01_N14444327_RTRIDST_0_ECONOMY-GREENSPAN-UPDATE-2.XML

MEXICO CITY, Nov 14 (Reuters) - The United States is having little trouble funding its big current account gap, but foreign investors will eventually "balk" at lending the money to cover it, Federal Reserve Chairman Alan Greenspan said on Monday.

Greenspan said the United States needed to keep its economy flexible to withstand the inevitable waning in overseas demand for dollar assets, which could raise U.S. interest rates.

"To date, despite a current account deficit exceeding 6 percent of our gross domestic product, we -- or more exactly the economic entities that comprise the U.S. economy -- are experiencing few difficulties in attracting the foreign saving required to finance it, as evidenced by the recent upward pressure on the dollar," he said via video hookup from Washington to a Banco de Mexico conference in Mexico City.

"Of course, deficits that cumulate to ever-increasing net external debt, with its attendant rise in servicing costs, cannot persist indefinitely," he added. "At some point investors will balk at further financing."

<snip>

Indeed, he said some signs already pointed to a dwindling overseas appetite for the U.S. dollar. But the Fed chief, who is due to step down from the helm of the central bank in January, put no time line on when he thought financing the trade shortfall would become problematic.

...more...

In answer to the "when" question: it seems to already be happening.

[54anickel]

73. Greenspan Issues Trade Deficits Warning

http://biz.yahoo.com/ap/051114/greenspan.html?.v=6

snip>

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

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

This change in mind-set could already be under way, he suggested.

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

Of the more than $30 trillion in foreign investment tracked by the Bank for International Settlements in the first three months of 2005, 42.5 percent were in dollars and 39.3 percent were in euros, Greenspan noted.

more...

[UpInArms]

28. Senate Panel readying Rubber Stamp for Bernanke approval

Bernanke goes before banking panel
Tuesday hearing should precede easy confirmation

http://www.marketwatch.com/news/print_story.asp?print=1&guid={1BF2167C-5A1B-4D48-8482-1D01331AD5DD}&siteid=mktw

WASHINGTON (MarketWatch) - Ben Bernanke appears headed for easy confirmation as Federal Reserve chairman, but not before he endures a day of tough questioning at the Senate Banking Committee.

The senators will hear from Bernanke on Tuesday about his views on the current economic situation and how he would lead the single most powerful economic institution in the world.

For financial markets, the most pressing matter is the near-term course of interest rates. The Fed has boosted its target for the short-term federal funds rate at 12 meetings in a row from 1% to 4%.

<snip>

Given his undeserved reputation as something of a softie on inflation, Bernanke could use the hearing as a forum for rebuilding his credibility as an inflation-fighter. See related story.

<snip>

Members of the committee seem disposed to approve Bernanke. "I think it will be a relatively easy confirmation," said Sen. Charles Schumer, D-N.Y. after meeting with Bernanke last week.

...more...

[UpInArms]

29. U.S. economists trim growth forecasts - Fed survey

Get ready for some "surprised" economists!

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-14T151914Z_01_N14485174_RTRIDST_0_ECONOMY-FED-PHILADELPHIA.XML

NEW YORK, Nov 14 (Reuters) - Private-sector economists trimmed forecasts for U.S. economic growth for the last quarter of this year and for 2005 compared with three months ago, a Federal Reserve Bank of Philadelphia survey said on Monday.

The 51 economists surveyed now believe real gross domestic product will grow 3.2 percent in the fourth quarter, down from their previous forecast of 3.6 percent, the bank said in its quarterly Survey of Professional Forecasters.

Growth for the full year was seen at 3.6 percent, slightly down from the 3.7 percent expected in the previous survey.

Economists expect this slowdown to be temporary, however, with the economy entering 2006 growing at an annual pace of 3.7 percent, compared with the previous forecast of 3.3 percent.

Their forecasts for the job market were little changed, with the unemployment rate seen averaging 5.1 percent in 2005 and 4.9 percent in 2006, the same as in last quarter's survey.

...more...

Well, I'm sure that they can cook those unemployment books!

[UpInArms]

31. 10:39 EST Meanspin speaks - markets rise - bonds fall

Dow 10,689.49 +3.45 (+0.03%)
Nasdaq 2,204.07 +1.60 (+0.07%)
S&P 500 1,235.36 +0.64 (+0.05%)
10-Yr Bond 4.567 +0.03 (+0.07%)

NYSE Volume 480,540,000
Nasdaq Volume 368,392,000

10:30AM: Following comments out of Alan Greenspan, who is currently discussing the current account at the Banco de Mexico conference, the market has headed slightly higher. Particularly, the Fed Chairman asserted that the US is having no trouble funding the external deficit, and doubts that the dollar will lose status as a reserve. As shown in last Thursday's data, the budget deficit as a percentage of GDP has now fallen to 2.4%, which is actually slightly below the average of the past few decades. It is Briefing.com's view that earnings growth and the degree to which the Fed raises rates will drive the stock market in 2006 - and that the trade deficit is not going to adversely impact the stock market. NYSE Adv/Dec 1255/1591, Nasdaq Adv/Dec 1304/1327

10:00AM: While still in close vicinity of the unchanged mark, each of the indices are trading on positive turf. Due to Georgia Pacific's (GP) acquisition-related rise, the Materials (+0.3%) sector has assumed early leadership. Energy, boosted by upticks in energy prices, contributes a weighty 1.1% gain. Consumer Discretionary (+0.5%) and Telecom (+0.3%) are also trending higher, with Consumer Staples, Industrials, and Technology hovering just above the flat line. Early losses are limited, and are extended by Financials (-0.3%), Utilities (-0.3%), and Healthcare (-0.2%). Separately, the 10-year is on posive ground - up two ticks and yielding 4.56%. NYSE Adv/Dec 1167/1263, Nasdaq Adv/Dec 1193/1191

[UpInArms]

33. current account deficit vs budget deficit

from the spinners:

budget deficit as a percentage of GDP has now fallen to 2.4%

and here's a different take on that:

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-14T155209Z_01_N14444327_RTRIDST_0_ECONOMY-GREENSPAN-UPDATE-1.XML

excerpt:

current account deficit exceeding 6 percent of our gross domestic product

:wtf:

[UpInArms]

38. 11:12 EST the love seems to be evaporating

Dow 10,682.28 -3.76 (-0.04%)
Nasdaq 2,201.73 -0.74 (-0.03%)
S&P 500 1,234.05 -0.67 (-0.05%)
10-Yr Bond 4.571 +0.07 (+0.15%)

NYSE Volume 641,191,000
Nasdaq Volume 481,769,000

11:00AM: Settling back towards the flat line, upward efforts are somewhat capped by Healthcare's 0.4% loss, Tech's break-even status, and a 0.2% decline in Financials. With respect to the Financial sector, it's currently up 3.2% year-to-date; over the past month, it's jumped 10.8%. Strength there is perhaps largely predicated on valuation and belief that the Fed's rate hike cycle is nearing an end - and is reflective of the broader market. Over the past three weeks, the market has registered broad-based gains that have the S&P up close to 2.0% for the year. With the price-to-earnings ratio for the S&P 500 at just 16.6 through Q3 earnings, Briefing.com believes fundamentals are in place for a modest year-end rally NYSE Adv/Dec 1300/1691, Nasdaq Adv/Dec 1278/1444

[PATRICK]

63. Our APWU union paper

FINALLY gets around to warning people about new mortgage fixes. Obviously the assault to draw more people into new schemes is intensifying to save the housing bubble?

[AnneD]

66. BINGO!!!!

give the man a cigar. I'd just as soon put my hand in a barrel of snakes before I sign some of those new mortgage 'products' they are hawking now. It won't save the bubble, only postpones the inevitable. Look for more folks losing their homes in the near future.

[ozymandius]

40. bouncing around the flat line

11:22
Dow 10,689.98 +3.94 (+0.04%)
Nasdaq 2,203.33 +0.86 (+0.04%)
S&P 500 1,234.93 +0.21 (+0.02%)
10-Yr Bond 45.75 +0.11 (+0.24%)
NYSE Volume 688,555,000
Nasdaq Volume 518,776,000

[UpInArms]

44. Dec Gold @ $469.90 oz

11:33am 11/14/05 DEC GOLD TURNS HIGHER, UP 50C AT $469.90 AFTER $467.50 LOW

[UpInArms]

45. Labor cost controls improving: Wal-Mart CFO

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-11-14T162439Z_01_ROB554349_RTRIDST_0_PICKS-RETAIL-WALMART-CFO-INTERVIEW-DC.XML

CHICAGO (Reuters) - Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) did a better job of controlling labor costs last quarter after struggling to rein in expenses during the first half of the year, the retailer's chief financial officer said on Monday.

CFO Tom Schoewe told Reuters in a telephone interview that the company is exerting more influence over store-level labor allocation from its Bentonville, Arkansas, headquarters.

"We'll get input from the field on how many hours they plan to schedule, and if we think that that's too much, we'll be dialing it back here from northwest Arkansas," he said.

The world's biggest retailer has been under pressure from Wall Street to get a tighter grip on rising costs to boost profit growth. The company aims to increase earnings at least as fast as sales, but has missed that goal in recent periods.

<snip>

Energy costs have also driven up transportation and other expenses, but Schoewe said Wal-Mart expects oil prices to stabilize roughly around $60 per barrel in the fourth quarter. Prices topped $70 a barrel earlier this year after Hurricanes Katrina and Rita hit the Gulf of Mexico.

...more...

Energy costs rise, so "get a grip" on those labor costs!

[UpInArms]

48. Wall Street weeps as the Pentagon budget fails to continue to swell

http://www.marketwatch.com/news/story.asp?guid=%7B75EFB491%2D20A1%2D43DB%2DA106%2D70B363192553%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) -- After three years of gung-ho defense spending and swelling deficits, Wall Street is resigned to the Pentagon scaling back its more than $400 billion annual budget.

But that doesn't mean anyone is beating a retreat from the lucrative defense sector.

Meanwhile, investors face months of speculation about where cutbacks might come before the fiscal 2007 Defense Department budget is submitted to Congress in early February.

"Although a slowing budget environment is arguably priced into stocks, we do not think that a zero-growth outlook is," wrote Banc of America Securities analyst Robert Stallard in a Nov. 10 note following a trip to Washington.

He expects some $10 billion will be trimmed from fiscal 2007 spending, with more cuts ahead.

Investors are well versed in the reasons why budget pressure is rising with the federal government's share of hurricane clean-up, the continued costs of the war in Iraq and other domestic spending plans all adding up.

The surprise release of a Pentagon budget document late last year, Program Budget Decision 753, detailed billions in cuts over the coming years and jolted those who'd been counting on smooth and steady increases in defense spending. See full story.

...more...

These profiteers of death and destruction are damned (imho).

[54anickel]

50. Nah, I think the spending will just be shifted from the Pentagon budget

to somewhere else, most likely the dreadful DHS and all the various institutions being rolled into that behemoth.

Check out the oraganizational chart from their site.
http://www.dhs.gov/interweb/assetlibrary/DHS_Org_Chart_2005.pdf

Or just check out some of the latest drivel spread all over on their site.
http://www.dhs.gov/dhspublic/

[EuroObserver]

71. Non-Pentagon WMD spending up?

See: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x5337185#5343908
and surrounding posts.

<snip>

The Pine Bluff Arsenal has been approved to expand its workload to include private companies and other government agencies beyond the Defense Department.

The arsenal's designation as the nation's sole Center of Industrial and Technical Excellence for Chemical and Biological Defense Equipment means an economic boost, said Larry Wright, the installation's civilian executive.

"It will help us reduce our operating cost for the arsenal, it expands our employment base here and reinforces our role as the only government-owned chemical and biological defense arsenal," Wright said.

[UpInArms]

51. 12:14 EST numbers and blather

Dow 10,682.76 -3.28 (-0.03%)
Nasdaq 2,199.68 -2.79 (-0.13%)
S&P 500 1,233.15 -1.57 (-0.13%)
10-Yr Bond 4.598 +0.34 (+0.74%)

NYSE Volume 904,776,000
Nasdaq Volume 655,540,000

12:00PM : Struggling to find solid footing, each of the market's major averages continues to vacillate around both sides of the flat line. Three weeks of broad based gains have perhaps provided some profit-locking incentive today, while anticipation ahead of this week's heavy economic calendar and a lack of real market-moving news gives traders further reasons to limit buying action. Leadership rests within the Materials sector's 1.1% gain, a result of a surge in Georgia Pacific (GP 47.37 +12.72) that follows reports of a $13.2 billion cash buyout. Telecom (+0.3%) and Consumer Discretionary (+0.1%), which has gotten a boost from Lowe's (LOW 65.01 +3.04) better than expected Q3 earnings report and full-year guidance, are the only other sectors contributing upside. Technology (-0.1%) has wavered over the course of the morning, as downgrade-induced declines in Hewlett-Packard (HPQ 27.77 -0.75) and Motorola (MOT 22.87 -0.69) challenge relative strength in semiconductors. As a side note, Briefing.com believes Motorola remains one of the preferred names across the Technology board, and includes the stock in our recommended portfolio for active investors. An in-line third quarter report from Wal-Mart (WMT 49.28 +0.28), which was accompanied by Q4 and FY05 forecasts that match analysts' expectations, has gone largely overlooked, and the Consumer Staples sector (-0.2%) remains in the red. Utilities (-0.5%), Energy (-0.2%), Industrials (-0.01%), Healthcare (-0.4%), and Financials (-0.2%) also extend losses as they head into the lunch hour. With respect to the Financials sector, it currently sports a 3.2% year-to-date gain. The market's most influential sector is presently reflective of the broader market: Over the last four weeks, it's risen 10.8% and demonstrates strength that's perhaps predicated on valuation and belief that the Fed's rate hike cycle is nearing an end. Pver the last three weeks, the S&P has risen close to 2.0%. Fundamentals are in place for a modest year-end rally; today, Briefing.com has reiterated its Moderately Bullish market view that was initiated in July. We believe the market is poised for a traditional year-end rally that should close the S&P with an approximate 5% gain for the year. At the same time, though, we aren't expecting a year-end rally to lead to something big for 2006, as concerns about profit growth deceleration and a fear the Fed will go too far with its tightening efforts will limit follow-through activity. To that end, Briefing.com believes another mid-single digit percentage increase in the S&P 500 is likely.NYSE Adv/Dec 1151/1977, Nasdaq Adv/Dec 1219/1608

[UpInArms]

59. 1:05 EST numbers and blather

Dow 10,677.38 -8.66 (-0.08%)
Nasdaq 2,197.51 -4.96 (-0.23%)
S&P 500 1,231.97 -2.75 (-0.22%)
10-Yr Bond 4.614 +0.50 (+1.10%)

NYSE Volume 1,062,510,000
Nasdaq Volume 775,782,000

1:00PM: Since the previous update, the Dow has fallen into the read while the S&P and Nasdaq slide further. Sector standing remains split, reflective of the blue chip average's stance. Of the risers, Home Depot leads the way higher - catching a bid from competitor Lowe's (LOW 65.03 +3.06) better than expected Q3 earnings report and full-year guidance. Wal-Mart (WMT 49.53 +0.53) continues to enjoy its earnings related boost, and is the only other constituent contributing a gain in excess of 1.0%. On the other side of the aisle, Hewlett-Packard (HPQ 27.82 -0.70) and General Motors (GM 24.09 -0.39), whichg has announced a new sales incentive program, exert the most pressure. NYSE Adv/Dec 1217/2002, Nasdaq Adv/Dec 1269/1626

12:30PM: Little has change for the equity market, as the indices' flat line vacillation continues. The Treasury market, meanwhile, remains under pressure after improving somewhat last week. Suffering under the weight of trade talk and technicals in the absence of any economic data, the 10-year (-13/32) has lost its momentum as the day progresses and currently yields 4.61%. Stock and bond traders alike await the week's stream of economic data that begins tomorrow. October PPI will be followed by Wednesday's CPI report - two key inflation gauges for which economists expect more benign reads than in prior months. For both, the consensus is pegged at a 0.0% read for the total rate, and a +0.2% read on the core rate.NYSE Adv/Dec 1169/2011, Nasdaq Adv/Dec 1215/1651

(updated blather on edit)

[54anickel]

61. Derivatives disaster, hedge fund monsters?

http://www.321gold.com/editorials/chapman_d/chapman_d_111405.html

The only time the general public hears about derivatives or hedge fund problems is after the fact when the blow-up has occurred. Long Term Capital Management (LTCM), Nick Leeson, Orange County and many others only became news after it was revealed that they had lost millions of dollars in a derivatives disaster (Leeson, Orange County) or that they had become a hedge fund monster (LTCM). Of course there have been stories about the huge derivatives positions of J.P. Morgan Chase (JPM-NYSE) or even Fannie Mae (FNM-NYSE). But unless they become the news they are deep in the background.

Both derivatives and hedge funds have grown sharply particularly in the past decade. Since Alan Greenspan took over as Fed Chairman in August 1987 derivatives outstanding according to the ISDA reports that international interest rate and currency derivatives outstanding grew from $865 billion in 1987 to $201.4 trillion in 2005. According to the Office of the Comptroller of the Currency Administrator of National Banks (OCC) second quarter report Commercial Banks in the US had $96.2 trillion of derivatives outstanding. Of this the largest by far and the largest in the world as well is interest rate swaps totalling some $60.9 trillion. Futures and forwards make up $11.9 trillion, options $19.3 trillion and finally the major growth area credit derivatives $4.1 trillion. Credit derivatives were barely a thought as 1998 got under way.

Hedge fund growth has been equally phenomenal. Since 1996 to 2004 hedge funds grew four times from roughly $200 billion to over $800 billion in capital. Today there are over 8000 hedge funds and they have grown to over $1 trillion. The number of hedge funds has more than doubled since 1999. LTCM was a highly leveraged hedge fund estimated to have had at its peak capital of $4.8 billion, a portfolio of $200 billion and derivatives of $1.2 trillion. Incredible leverage. Hedge funds are expected to grow even further to an estimated $3 trillion by 2010.

Hedge funds are unregulated. Numerous hedge funds are run in off-shore banking centres such as the Cayman Islands in order to avoid regulation. So why would individuals, pension funds, banks and others risk their money in hedge funds? Simple, returns that have consistently exceeded those available in the markets through traditional investments in stocks and bonds and certainly better than the returns generated by mutual funds. Unlike traditional investments hedge funds carry out any number of strategies from conservative convertible bond arbitrage to actively managed long-short funds, convergence plays and managed futures using huge leverage. Many of the largest hedge funds are run by former bank/investment bank dealers who left often with the blessing of their former employer. Many of the same funds would then be placed with the hedge funds and the banks provide the leverage capital to allow the hedge funds to grow even faster in a more unregulated environment.

snip>

Because of the huge size of the hedge funds coupled with the huge capital available to dealers like Goldman Sachs these funds are often over half the daily trading in the equity markets. These firms can if they wish move the Dow Jones 300 points if they so please using a wide array of futures, options, ETF's and other leveraged hybrids. These firms are exempt from up-tick rules and margin requirements. Front running orders are not uncommon. Many of the firms are also responsible for the huge market buy/sell programmes whether it comes intra-day or "market on close".

more...

[ozymandius]

64. 2: 05 numbers and blather update

Dow 10,699.01 +12.97 (+0.12%)
Nasdaq 2,200.88 -1.59 (-0.07%)
S&P 500 1,234.60 -0.12 (-0.01%)
10-Yr Bond 46.06 +0.42 (+0.92%)
NYSE Volume 1,250,351,000
Nasdaq Volume 917,689,000

1:30PM: Although off of their session lows, the indices have not managed to bounce back into positive territory. Selling pressure has dominated trading thus far, but there are several bright spots within the market; here is a look at the best performing groups across the S&P, in order of market influence. Financials' insurance broker index has risen 1.7%, while Technology's IT consulting and services group is up 1.5%. Healthcare facilities (+0.4%) stand as its sector's brightest spot, while home improvement retail (+2.7%) shines within Consumer Discretionary. Industrials' construction and engineering sect and Consumer Staples' super centers pocket each extend a 0.9% gain. Within Energy, refiners (+2.0%) are faring best, up 2.0%; Utilities' currently has no gaining group, but independent power producers (-0.1%) demonstrate some relative strength. In Telecom, wireless services are up 0.6%, and a 13% surge in paper products serves as Materials' strongest support. NYSE Adv/Dec 1143/2092, Nasdaq Adv/Dec 1204/1697

[54anickel]

68. DOW's toying with 10,700 - building the hopes up for a big rally later

in the week?

Wonder if we'll see the same thing play out that has been all stinkin' year. Touches 10,700, drops a bit but stays above support which incites another big rally. Then it makes it's way back down to the 10,500 area and starts the process all over again. :crazy:

[UpInArms]

69. GM Rolls Out 'Red Tag' Discount Program

Note: in the real estate business, a "red tag" means "condemned". :eyes:

http://abcnews.go.com/Business/wireStory?id=1310474

DETROIT Nov 14, 2005 — Hoping to boost sales, General Motors Corp. on Monday announced a new discount program of "Red Tag" prices that could knock from several hundred dollars to more than $4,440 off the list price of some of its 2005 and 2006 model cars and light trucks through Jan. 3.

The announcement comes as the world's largest automaker has been running up billion-dollar losses and reporting a declining North American market share.

Its shares fell 47 cents, or 1.9 percent, to $23.82 in early trading on the New York Stock Exchange. They have traded as low as $22.74 in recent days, their lowest level in about 13 years.

<snip>

GM reported a net loss of $1.6 billion in the third quarter, compared with net income of $315 million a year ago, as its North American division continued to suffer from high health care costs and falling sales of sport utility vehicles.

The automaker's North American market share fell to 25.6 percent in the third quarter from 28.5 percent a year ago. Through the first nine months of this year, GM's market share was 26.1 percent, down from 27 percent in 2004.

...more...

[54anickel]

74. You suppose Hummers weren't the only models with a "special" lot?

http://themessthatgreenspanmade.blogspot.com/2005/11/hummer-overfloweth.html

[ozymandius]

75. closing numbers with blather

Dow 10,697.17 +11.13 (+0.10%)
Nasdaq 2,200.95 -1.52 (-0.07%)
S&P 500 1,233.77 -0.95 (-0.08%)
10-Yr Bond 46.04 +0.40 (+0.88%)
NYSE Volume 1,900,101,000
Nasdaq Volume 1,422,145,000

Gains and losses alike were minimal today, and the market's major averages spent the session surrounding the flat line. Comments from Fed Chairman Greenspan, regarding the current account, provided a short-lived spark, but following three weeks of broad based gains and amid a dearth of data on the earnings or economic front, buyers stuck to the sidelines. At the same time, sellers found little catalyst and similarly kept action in check. Anticipation of the week's full economic calendar, which launches tomorrow with October PPI and retail sales data, perhaps lent further reason for a cautionary stance. Limited to a 0.8% gain in the Materials sector, which was driven by surging Georgia Pacific (GP 47.34 +12.69) shares as a result of its announced $13.2 billion buyout, the market struggled to find leadership. An uptick in energy prices helped direct some buying interest towards the Energy sector (+0.5%), and Telecom contributed a 0.3% gain. Industrials and Technology trended together in vicinity of the unchanged mark, and each closed 0.1% higher. Within the latter sector, downgrade-induced declines in Hewlett-Packard (HPQ 28.19 -0.33) and Motorola (MOT 22.86 -0.70) presented considerable pressure, but strength in semiconductors helped to offset the pair's effect. As a side note, MOT is featured within Briefing.com's suggested portfolio for active investors, as we believe the stock remains one of the preferred names across the sector. An in-line Q3 report from Wal-Mart (WMT 49.07 +0.07) went largely unnoticed today, and the retailer's modest rise could not keep the Consumer Staples sector (-0.4%) out of the red. Its gain did, however, add to relative strength amid retailers, ahead of tomorrow's data and prior to a host of Q3 reports due out from retailers this week. Coupled with Lowe's (LOW 64.83 +2.86) upbeat earnings and guidance-related run, the group's gain helped to somewhat counter the effect of sinking General Motors (GM 23.74 -0.74) shares, which were sent lower on reports of a new sales incentive program and effectively capped the Dow. The Discretionary sector (+0.01%) managed to remain just above the flat line. Perhaps attempting to secure some of the 10.8% gain registered over the last month, sellers kept the Financial sector below the unchanged mark today. Renewed weakness within the Treasury market, which left the 10-year (-09/32) yielding 4.60% for most of the session, further stunted the sector's advance. Also the target of profit-taking, Utilities finished 0.8% lower, while weakness in pharmaceuticals and medical equipment took Healthcare to a session-lagging 0.9% loss. Separately, today we reiterated our Moderately Bullish market view that was initiated in July. We believe the market is poised for a traditional year-end rally that should close the S&P with an approximate 5% gain for the year. At the same time, though, we aren't expecting a year-end rally to lead to something big for 2006, as concerns about profit growth deceleration and a fear that the Fed will go too far with its tightening cycle are apt to limit follow-through activity. To that end, Briefing.com believes another mid-single digit percentage increase in the S&P 500 is likely.NYSE Adv/Dec 1233/2075, Nasdaq Adv/Dec 1292/1741