STOCK MARKET WATCH, Monday 2 August

[ozymandius]

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 171
DAYS UNTIL W* GETS HIS PINK SLIP 92
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 234 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 288 DAYS
WHERE ARE SADDAM'S WMD? - DAY 501
DAYS SINCE ENRON COLLAPSE = 984
Number of Enron Execs in handcuffs = 19
Recent Acquisitions: Ken Lay
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL ON July 30, 2004

Dow... 10,139.71 +10.47 (+0.10%)
Nasdaq... 1,887.36 +6.30 (+0.33%)
S&P 500... 1,101.72 +1.29 (+0.12%)
10-Yr Bond... 4.48% -0.10 (-2.19%)
Gold future... 391.00 +4.20 (+1.07%)


|||


GOLD, EURO, YEN and Dollars

---

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

---

[Maeve]

1. Ridge--Be very afraid, but go to work!

Ridge: U.S. Ought 'Go to Work' Despite Security Fears
WASHINGTON (Reuters) - Americans must accept their nation is a target and get on with business as usual, U.S. Homeland Security Secretary Tom Ridge said Monday after raising the threat levels in Washington and New York to high.
"The reality of living in America after September 11 is that we have to accept the fact that from time to time that we're going to get information about attacks," he told ABC's "Good Morning America" breakfast television show.

more

This will get the blame for depressing the markets, but anyone watching oil prices?

[ozymandius]

4. Going to work....

I wonder if Ridge is afraid to go to work. He seems to trumpet danger every time he sneezes.

[Maeve]

5. Um...I don't think that was a sneeze!

A bit lower in tone, if you get my meaning....

Glad the move went okay--and unpacking is usually less hassle than packing; not the time pressure.

[54anickel]

6. Hmmm, we may need to coin a new phrase -

"Thwarted attack bounce". Greenspin may just have yet another tool at his disposal. :evilgrin:

[ozymandius]

2. Good morning all.

:donut: :donut: :donut: :donut: :donut: :donut:

We are living out of boxes at the new Chez Ozymandius. The computer was the only piece that I moved without the mover's help. (Not that I don't trust them - I just didn't want to feel angry at them in case something happened to one of my prized antiques.) The move went well, just costlier than expected.

I will not be around hardly at all today and tonight as our lives make the transition from box-totin' nomads to domesticated house dwellers.

Who would've thought that we could fill 38 boxes just with stuff?

Have a wonderful day at the Casino!

best,

Ozy :hi:

[54anickel]

3. Good morning Ozy and all. Boy, those futures are looking pretty

undecided today - all below the waterline. Could be an interesting day.

Stock Futures Fall on Al Qaeda Threat
http://biz.yahoo.com/rb/040802/markets_stocks_1.html

NEW YORK (Reuters) - U.S. stocks are seen falling at Monday's open as intelligence warnings of al Qaeda threats to attack key U.S. financial institutions and record oil prices stoke concerns that holding equities involves greater risk.

Citigroup Inc. (NYSE:C - News), Prudential Financial (NYSE:PRU - News), the International Monetary Fund, the New York Stock Exchange and the World Bank were included in a "high" level threat alert issued by the U.S. Department of Homeland Security on Sunday.

Cox Communications (NYSE:COX - News) may be one of the few bright spots after a move to take the company private.

"Although the market snapped a 6-week decline and appears to be an attempt to stabilize and bottom, the overriding theme that I see governing the market's mind-set is terrorism," said Andre Bakhos, president of Princeton Financial Group. "That is the greatest unknown factor the market is facing."

snip>

U.S. light crude futures for September (CLc1) changed hands at $43.56 a barrel in electronic trading. Oil prices were already pushed higher in recent weeks on concerns over possible interruptions from major Russian oil firm YUKOS. Al Qaeda concerns have only added to investor woes.

Whenever the price of crude oil soars profits at most companies are hurt and the effect ripples through the economy as it is a vital ingredient in the production of most goods and services as well as transport.

[ClintonTyree]

7. Chuck Shummer.........

"The terrorists want to scare us"........... No Chuck, the Bush administration wants to scare us!

The financial sector must be getting pretty pissed about Bush's constant "terra" warnings. It's obviously depressing the markets (along with oil prices) and the Stock Market mavens are getting hammered, and pissed.

Joe and Jane Sixpack aren't going anywhere near the Stock Market until things quiet down. Until that time, their and a lot more money is going to stay on the sidelines thus depressing prices even more.

I know it's keeping me out. At this time I have a grand total of around $3,000 in the market. For me that's next to nothing. I will not commit another penny until Bush is out of the White House.

[54anickel]

8. Trouble at the Core

The article is the last entry on the page. Check out this little bit from the China Watch section on the way down.

snip>

China Watch:

July 26 – Bloomberg (Samuel Shen): “China’s home prices rose 10.4 percent in the second quarter from a year ago, more than double the 4.8 percent pace in the first three months, as the government curbed real estate loans and usage, cutting supply. Shanghai led the increase, with home prices climbing 21.4 percent from April through June, followed by the neighboring city of Ningbo, where prices expanded 19.9 percent…”

July 28 – Bloomberg (Jianguo Jiang): “China predicts retail sales growth will pick up this year as incomes climb in the world’s fastest-growing major economy. Sales will probably rise 10.5 percent to more than 5 trillion yuan ($604 billion) after increasing 9.1 percent in 2003, the Beijing-based commerce ministry said…”

snip>

July 29 – Bloomberg (Ravil Shirodkar): “China imported 2.08 million tons of flat steel products in June, or 35 percent less than a year ago, Tex Report said, citing data from China’s General Administration of Customs. China’s steel imports fell 7.5 percent to 15.5 million in the January-to-June period from a year ago…”


Trouble at the Core

This is an exceptionally challenging analytical environment. The U.S. economy has somewhat decelerated. But what was the impact – and will it prove temporary - of virtually the entire country fearing a spike in mortgage borrowing costs as the Fed raised rates for the first time in awhile back in June? There are specific reasons to be extra cautious when it comes to forecasting an imminent economic downturn. It would be quite unusual for a Bubble Economy to falter with housing sales and prices at record levels, record mortgage Credit creation, robust federal and state spending, strong (inflation-induced) profits and income growth, a booming export sector, a generally robust global economy, low global interest rates and generally profligate Credit Availability and liquidity conditions. It would not, however, be unusual for such conditions to hasten financial crisis.



For some time now, I have read analysis attempting to call the top in the housing market. Some ascribe recent housing strength to a final rush by buyers to beat higher mortgage rates. Perhaps there is merit to such a view, but it nonetheless disregards key dynamics that are in play. Over the past six years, historic inflation has re-priced virtually the entire nation’s housing stock. Price gains have accelerated significantly (“blow-off”) during the past two years of Fed-orchestrated reflation. And the bottom line is that we now have tens of millions of homeowners with substantial and growing “equity” in their residences. Tens of thousands are regularly extracting record amounts through home-equity borrowings. Meanwhile, untold millions have and will continue to use this perceived windfall to take on additional debt and purchase that larger home (in that appealing neighborhood!) they have always dreamt about. This is a very powerful dynamic, at least until the liquidity spigot falters.



When it comes to the housing markets, we must continually remind ourselves that Bubble Dynamics have taken firm grip. In these most uncertain times, housing has attained the coveted status of the perceived absolute best investment - of all-time – ensuring both safety and strong returns (not to mention tax-breaks, comfort and the status of ownership). I would argue that the all-embracing nature of this manic conviction is unparalleled. Furthermore, aggressive financial innovation has assured, to this point, an unending flow of cheap finance. Indeed – and as our Federal Reserve officials should have learned several years ago - the capacity of contemporary finance to rise to the occasion and finance run-away Asset Bubbles creates an especially dangerous environment. And I do appreciate that this line of analysis is a reiteration and obvious to many, but it is worth again recalling that NASDAQ went to unbelievable extremes and then doubled (in self-destructing excess) in less than a year.



I also read that the American consumer is “tapped out,” but does such an assertion make sense when the median home price in California is up almost $65,000 since the beginning of the year? Perceived gains in household home equity continue to rise much more quickly than surging debt levels. And I remain of the view that, with current market dynamics, any soft economic data will incite lower rates. These lower rates would then exacerbate the Mortgage Finance Bubble and stimulate the U.S. Bubble Economy.



At this point, I am not tempted to back away from my contention that the financial markets are the driving force dictating the performance of the economy. So, are there indications that the financial markets are stumbling and vulnerable? Well, I think there are. The U.S. stock market has clearly lost its momentum, with some players bloodied by the technology sell-off. Others have been stung in the interest-rate markets. And, importantly, there are indications that the tide has turned on the Leveraged Speculating Community. This is a development we must monitor closely.

more...

[Maeve]

9. Pre-opening blather

8:28AM: S&P futures vs fair value: -4.0. Nasdaq futures vs fair value: -8.0. Futures indications continue to tick lower, and point to a lower open for the cash market... The first terrorism alerts for specific sites in the US (New York financial institutions) has spooked buyers and led them to stick to the sidelines... Treasuries are finding a flight-to-safety bid off the news, the 10-year note up 9 ticks, bringing its yield to 4.44%.

8:00AM: S&P futures vs fair value: -3.6. Nasdaq futures vs fair value: -6.0. Futures trade denotes a negative bias, which should translate into a negative start for the indices... Worries after the terror alert level was raised to Orange for the financial services sector in the New York metropolitan area have continued to weigh heavily on trading... The European and Asian indices are all down considerably this morning.
http://finance.yahoo.com/mo

Here's an idea...:tinfoilhat:
If SOMEONE thought there was a real possibility that the markets were going to drop due to economic factors and they didn't want that to be the perceived cause, mightn't a decoy be tossed out like, say, a new "credible" terralert?

[richabk]

12. And the fear continues....

I work up at 57th and Lex for a trading firm. As I was going into work this morning, Lexington from 59th to at least 57th was roped off to traffic, and the block on Lex from 57th to 58th was completely shut down -- due to a suspicious package. I remember when I worked down near Wall St. after 9/11 having the constant bomb scares and having to evacuate buildings. I guess we're going to have to go through it again. But, I'd rather be safe than sorry.

[catzies]

41. Wow, thanks for they eyewitness account. Welcome to DU.

:hi: I feel bad for you people in NYC and DC who just want to go to work and be left alone.

[54anickel]

49. "Rather be safe than sorry" - Yes, it's times like these that I'm more

than happy to be a "hick from the sticks". I notice a lot of the posts here at DU tend to hit on the "terra, terra" propaganda and down play the real fear that this has to be imposing on the folks living in the middle of it.

I would imagine that "someday" this mal-admins warnings will be correct. After all, even a blind squirrel can find a nut in the forest.

Keep safe and sane richabk, and welcome to DU.

[54anickel]

13. INO blather has no mention of terra

The September NASDAQ 100 was lower overnight due to light profit taking but remains above the 10-day moving average crossing at 1392.90. Stochastics and the RSI are turning bullish signaling that a low is in or is near. Multiple closes above the 20-day moving average crossing at 1409.63 would open the door for a larger-degree rebound during the first half of August. Closes below March's low crossing at 1373 would open the door for a possible test of weekly support crossing at 1346 later this summer. The September NASDAQ 100 was down 8.50 pt. at 1394 as of 6:47 AM ET. Overnight action sets the stage for a steady to weaker opening by the NASDAQ composite index later this morning.

The September S&P 500 index was lower overnight as it consolidates some of last Friday's short covering rally but remains above the 75% retracement level of the May-June rally crossing at 1095.17. Stochastics and the RSI have turned bullish signaling that a low is in or is near. Multiple closes above the 20-day moving average crossing at 1102.49 would open the door for a larger-degree rebound during the first half of August. If September extends July's decline, a test of May's low crossing at 1079.50 is the next downside target. The September S&P 500 Index was down 3.90 pts. at 1097.20 as of 6:49 AM ET. Overnight action sets the stage for a steady to weaker opening when the day session begins later this morning.

[UpInArms]

10. daily dollar watch

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

Last trade 89.64 Change -0.32 (-0.36%)

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aAgb0odtQVxY&refer=home

Dollar Weakens After U.S. Says NYSE, IMF Are Al-Qaeda Targets

Aug. 2 (Bloomberg) -- The dollar fell against the euro and Swiss franc in Asia after the U.S. said al- Qaeda plans to attack the New York Stock Exchange, Citigroup Inc. and the International Monetary Fund.

``Terrorism means increased uncertainty and is negative for the dollar,'' said Jake Moore, currency strategist in Tokyo at Barclays Capital Inc. ``Dollar-Swiss is the classic risk aversion trade and the dollar could well extend its decline against the euro.''

Homeland Security Department Secretary Tom Ridge said the U.S. raised the terror alert level for financial institutions in Washington, New York City and northern New Jersey. The dollar weakened on concern terrorist threats will sap consumer confidence and deter international investors from U.S. assets.

Against the euro, the dollar fell as low as $1.2075, and was trading at $1.2053 at 9:08 a.m. in Tokyo from $1.2018 late Friday in New York, according to electronic foreign-exchange dealing system EBS. The dollar also dropped to 1.2746 Swiss francs, from 1.2815 francs. It may fall to $1.2120 per euro and 1.26 Swiss francs today, Moore said. It was at 111.13 yen, from 111.35 yen.

Intelligence sources point to al-Qaeda plans to use car or truck bombs against financial institutions that are ``iconic'' of the U.S. role in the global economy, Ridge said.

...more...

The constant terra terra terra is about to backfire for this maladministration - they are going to run out of chips just trying to counter their own spin. :sheesh:

[54anickel]

11. Money Created 'Out of Thin Air'

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=34679

We hope this brief essay stimulates your thoughts with respect to how money is created – a secret all investors should know.

Money is created in two ways: First, money creation comes from borrowing it and spending it. (Money is literally borrowed and spent into existence.) Second, it can simply be printed up “out of thin air” by a central bank. The U.S. economy and other modern economies have central banks and fiat currencies. Central banks have two major powers. They can 1) “peg” the nominal level of short-term interest rates, and 2) purchase assets such as government debt, with newly printed money. When the central bank pegs short-term interest rates at a low level, it greatly encourages corporate and individual borrowing and spending.

For the past decade, most money has been created through private sector borrowing and spending. However, the day is fast approaching when the private sector’s new borrowing will not create enough new money to keep servicing the already massive level of old debt. Central banks will need to step up their efforts to “print money out of thin air”. Central bank printing of new money is accomplished by purchasing government debt or other assets.

Clearly, there has been substantial money growth since 2000. Moreover, neither the crash of the NASDAQ stock market, or the last recession, has slowed down money growth. The fact that the Fed cut interest rates 13 times since 2000 – reducing them to a 46 year low – has a lot to do with the massive amount of borrowing that has taken place in the United States.

The amount of net borrowing in the United States is quite impressive, particularly when you consider the old economic model when borrowing was limited to simply recycling savings. In 2003, the savings rate was 2 percent of GDP, while net credit market borrowing was well in excess of 20 percent of GDP. There has been a whole lot of borrowing and spending of new money going on!

Certain asset classes, such as financial assets and housing, have benefited the most by this credit and money creation. For instance, because the mortgage market has been willing to finance any and all mortgages, the credit creation process has allowed both new mortgage debt and the ability to pay for higher housing prices. These higher housing prices have, in turn, allowed for the funding of larger mortgages. Money creation in the private sector tends to concentrate in certain asset classes that facilitate the creation of new credit. This new credit lends itself to new spending, leaving behind new money as the residual, and a growing mountain of debt.

To say that this process has been left to run wild is an understatement.

more...

[54anickel]

14. High Prices Prompt U.S. Oil 'Rush'

Now listen to the story about a man named Jed, poor mountaineer barely kept his family fed.....

http://www.nytimes.com/aponline/business/AP-Oil-Rush.html

NASHVILLE, Tenn. (AP) -- Prospectors have been drilling in Tennessee since the Civil War, searching for oil. While the industry has never amounted to much, this year, some big strikes and healthy prices have got the state back on wildcatters' maps.

As crude oil prices hover above $43 a barrel, new wells are being drilled in Tennessee and other unlikely states.

The number of U.S. oil rigs has increased from 750 in 2002 to more than 1,200 this summer, according to oilfield services company Baker Hughes. The industry publication World Oil said nearly every oil state is seeing more activity.

``There are fewer temporary abandoned wells than there have been in the past few years,'' said Larry Bengal, supervisor of the Illinois Oil and Gas Division. ``Some marginal wells are now active that weren't a few years ago.''

Tennessee is particularly attractive to wildcatters because there are still areas that haven't been drilled -- and it didn't hurt that news of a couple of big hits earlier this year is starting to circulate through the industry.

more...

[UpInArms]

15. Recent Layoff Rate Was Highest Since Early 1980's

http://www.nytimes.com/2004/08/02/business/02jobs.html

Layoffs occurred at the second-fastest rate on record during the first three years of the Bush administration, a government report has found.

In the government's latest survey of how frequently workers are permanently dismissed from their jobs, the layoff rate reached 8.7 percent of all adult jobholders, or 11.4 million men and women age 20 or older. That is nearly equal to the 9 percent rate for the 1981-1983 period, which included the steepest contraction in the American economy since the Great Depression.

Recession and weak economic growth characterized most of the period from 2001 to 2003, and millions of jobs disappeared. But while layoffs normally rise in hard times and fall in prosperous years, the new survey published Friday by the Labor Department's Bureau of Labor Statistics added to the statistical evidence that layoffs are more frequent now, in both good times and bad, than they were in similar cycles a decade ago.

The anecdotal evidence is abundant on this point, but the statistical evidence is only beginning to tell the same story. "It appears there is more displacement now; this latest number is quite high," said Henry S. Farber, a Princeton University labor economist who has challenged the anecdotal evidence, wondering whether it overstated the case.

The layoff rate over the last three years, for example, was greater than in the 1990-1991 recession, the displacement survey found. The rate was also higher in the late 1990's boom years than in the late 1980's, a parallel period of strong economic growth.

<snip>

Pay is another matter. In the latest survey, 56.9 percent of those who said they were re- employed also said they were earning less in their new jobs than in the jobs they had lost. That compared with 46.6 percent from 1991 through 1993, a similar period of recession followed by weak recovery, and 42.2 percent from 1997 through 1999, which were boom years.

...more...

[54anickel]

18. What recession? We didn't have no stinkin' recession! Was a "soft spot"

First it was the Clenis to blame, Shrub inherited it. Now, there never was one. If that's so, then why the emergency level of rates, tax cuts, etc?

2001 Slump May Not Have Been Recession at All :eyes:

http://www.reuters.com/newsArticle.jhtml?type=domesticNews&storyID=5828805

WASHINGTON (Reuters) - Not only was the U.S. recession in 2001 the shallowest on record, it may not have been one at all -- at least in the classic sense of two straight quarterly declines, new government data show.

In annual revisions to U.S. gross domestic product numbers released on Friday that could fuel a politically charged debate, the Commerce Department rewrote the history of the recent downturn by revising away a decline in the second quarter of 2001.

The new figures, which reflect more complete source data, show economic activity peaked in the second quarter of 2001, not the fourth quarter of 2000.

Measured from the new peak, the economy shrank just 0.4 percent, keeping the recession as measured by GDP the mildest on record. The 1969-1970 recessionary period, in which the economy contracted 0.6 percent, comes in a close second.

The National Bureau of Economic Research, the unofficial but accepted arbiter of U.S. recessions, has said the downturn began in March 2001 and ended in November of that year.

more...

[bain_sidhe]

34. YIKES!! see Wealth and Democracy - Kevin Phillips

This book is a few years old (Phillips dated his preface January, 2002, meaning that most of the writing was done in 2001), but I'm just now reading it. Have just finished the chapter about the patterns of a "superpower in decline," taken from Hapsburg Spain in the late 1500s/early 1600s, Holland in the late 1600s, and Britain in the late 1800s/early 1900s (Chapter 4). A few quotes (all emphases mine):

From the introduction:

...This book also profiles the United States as a leading world economic power at or past its zenith, and does so against the warning backdrop and decline-symptoms of its three predecessors--Britain, Holland, and Hapsburg Spain. Unfortunately, the millennial juxtaposition of shrinking prospects for U.S. manufacturing workers and the lower middle class with the golden zenith of a small elite in finance, investments, and international commerce follows the earlier Dutch and British patterns all too well. Historians freely used the term "plutocracy" in describing the similar phases in those nations' life cycles.

From Chapter 4 - "The World is Our Oyster: The Transformation of Leading World Economic Powers:

Inasmuch as the Spanish-centered Hapsburg Empire, the Dutch United Provinces, and Great Britain were the three leading world economic powers preceding the United States, the increasing economic polarization of their later stages of world leadership was an ill omen for a somewhat similarly placed successor state. As we look at the trajectories over several centuries of the four successive leading world economic powers, we will see the degree to which great individual wealth-holdings, a troubling mix of national fortunes and misfortunes, and widening internal gaps between the rich and poor often reflect a point well past the zenith.

...

What this chapter will call the financialization of the leading world economic powers has usually been a late and downward-edging stage of their international leadership. A national focus on financially generated wealth accompanied by an erosion in the relative well-being of ordinary citizens, most strikingly those in declining industrial pursuits, has been inauspicious.

...

...Developing weakness in production or older forms of commerce--the Spanish wool industry, Dutch fisheries, or British ironware--were recurring early symptoms, as were an emerging disproportion of financiers and rentiers coupled with an ever-greater inclination to invest in government bonds or send money out of the country for a better rate of return. Adverse international developments, from the fiscal burdens of a drawn-out war to foreign tariffs or trade restrictions, were another menace. At some point, incipient or relative decline gave way to the painful actuality. From each economic peak, the ebbs seem to have taken fifty to eighty years to become obvious and bring on a new leader.

There are more detailed comparisons later in that chapter, but this is the overall gist of them... This may be old news to those marketeers that follow such things, but I was floored by how exactly the stage immediately preceding the decline of those powers matched our own U.S. economic situation today. This article about layoffs, along with two of the ones above it - "Trouble At the Core" and "Money Created 'Out of Thin Air'" could have been plunked down nearly verbatim (other than the kind of manufacturing involved) in that chapter, and not seemed out of place.

[KoKo]

43. "Plutocrats" mentioned again here in "54's" post # 30....interesting...

"in conclusion, Americans are going to find out that the greatest enemy facing the United States is not the Iraqi resistance, Iran, North Korea, or Osama Bin Laden, but its own economic and political system, and this system's masters, the low profile plutocrats who own and control much of US business and society."

[54anickel]

45. Seems to be the theme of the day. Check out post 42

snip>

There are those - and it looks suspiciously like George W Bush is one of them - who will take decisions that are counter productive to the welfare of Society as a whole in order to ensure a maintenance of the vested interests of a small subset of greater Society. They rationalise that these people have superior capabilities and that they therefore "need" to be protected so that they can "get on with the job" of "saving the world". There is a word that describes such a rationalisation, and that word is "arrogance".

The real problem we are facing in the West is that we have become fat and happy, and there is no passion for improvement.

Unfortunately, the hard fact is that Life is dynamic, and unless we move forward, we will die. The "real" problem is that the political substructure of the World's developed countries is populated on BOTH sides of the political spectrum by people who will only get into power if they are seen to want to improve or maintain the lot of the voting haves, as opposed to the non-voting have nots. In short, the POLITICIANS are all effectively planning for failure.

[54anickel]

44. It does become rather alarming when one bothers to connect

the dots, doesn't it?

Thanks for joining in the connect the dots puzzle. Sure would be a lot easier if the damned things were numbered.

[bain_sidhe]

68. Yep... at least, I'M alarmed!

And thanks for the welcome... I read SMW every day - right after Progress report, just before NYT and Washington Post... yes, I'm a creature of habit (a.k.a, "in a rut"?), what can I say?) I just don't post because it's all geek to me. I do try to keep up, but with so many "experts" saying diametrically opposed things, it's hard to know who to believe. But Phillips is putting it all in a historical context that makes sense - at least to me.

Sorry I didn't respond earlier! Had some runnin'round to do after I posted.

[54anickel]

71. A google on your author, Kevin Phillips turns up some facinating

articles. I haven't gotten thru very many of them yet, but this one is quite interesting:

http://www.buzzflash.com/interviews/04/01/int04001.html

Kevin Phillips, Author of "American Dynasty: Aristocracy, Fortune and the Politics of Deceit in the House of Bush"

A BUZZFLASH INTERVIEW

"Now what I get a sense of from all of this -- and then topped obviously by spending all the money in 2000 to basically buy the election -- is that this is not a family that has a particularly strong commitment to American democracy. Its sense of how to win elections comes out of a CIA manual, not out of the Declaration of Independence or the Constitution." -- Kevin Phillips

Hey, you would expect this kind of talk from a lefty, right. But Kevin Phillips ain't no lefty. He's a former Nixon staffer and authored "The Emerging Republican Majority" back then. He hasn't had any transformation that has turned him into a -- God Forbid! -- Democrat. As he tells BuzzFlash, he voted for Reagan twice and would have eagerly voted for John McCain.

He hasn't stopped being Republican. It's just that he's appalled at what the Republican Party has become under the Bush dynasty.

In "American Dynasty," Phillips weaves evidence of the Bush family's dynastic sense of entitlement -- and corruption -- throughout this erudite book.

"Few have looked at the facts of the family's rise, but just as important, commentators have neglected the thread -- not the mere occasion -- of special interests, biases, scandals (especially those related to arms dealing), and blatant business cronyism" Phillips writes in his preface. "The evidence that accumulates over four generations is really quite damning."

"Three generations of immersion in the culture of secrecy...deceit and disinformation have become Bush political hallmarks," Phillips notes.

Entitlement, elitism, privilege, secrecy, mediocrity, corruption, financial cronyism, bailouts of family failures by the taxpayers -- these are some of the true characteristics of the Bush Dynasty, according to Phillips.

To Phillips, however, the greatest threat to America posed by the Bush dynasty is not its inherent unfitness to rule. What most offends and angers Phillips is the threat that the imposition of the Bush dynasty on America poses to democracy itself. The American rebellion in 1776 represented the creation of a nation built on the foundations of a government elected by the people, not determined by the restoration to power of corrupt bloodlines.

No book makes a stronger case against an American sitting in the White House who believes that he is in power because of hereditary entitlement and divine choice. Patriots rebelled against King George in 1776. Phillips notes that Americans have the opportunity to dethrone the Bush dynasty at the polls in 2004.

more...

[bain_sidhe]

72. I first became aware of him from his 1989 book

The Politics of Rich and Poor. I think that was the beginning of HIS alarm at the road the country was taking, and I suspect his further research on the subject is what eventually lead him to write Wealth and Democracy. I also think that, to him, Bush and BushCo represent most clearly the forces he's talking about in Wealth and Democracy.

Several more good articles, if you're interested, are found in The American Prospect at http://www.prospect.org/authors/phillips-k.html

In my opinion one of the best of these is "How Wealth Defines Power: The politics of the new Gilded Age"

Of all the great deceptions that come to surround a gathering stock-market boom -- from blather about the obsolescence of the business cycle to editorial claptrap about the United States turning into a republic of shareholders -- one of the most pernicious has been the failure to recognize the character of the money culture it creates.

The pages of American history tell different stories about enormous wealth. Sometimes it has coexisted reasonably well with democracy, as in the days of Andrew Jackson or during the two decades after World War II. But the reverse has been true of the record concentrations of wealth that have grown up around the three most important financial boom periods: the post-Civil War Gilded Age, the Roaring Twenties and the just-concluded bull market of the 1980s and '90s.

In a nutshell, these unusual wealth surges have bred unusual corruption. The moral degradation, in fact, has been multiple -- financial corruption, political corruption, and philosophic or ideological corruption. Each has reinforced the others. When money is king, politicians get bought on a truly grand scale and philosophy bows to avarice. The genesis is much the same each time. All three booms have involved at least one decade -- sometimes several -- of hot new technology, surging stock markets, innovative finance and the sense that the United States has transcended old limitations and rules. Money has fed on itself, creating a cult of railroad barons, automobile kings, hotshot CEOs and financial masters of the universe. As the boom swells, so does the culture's preoccupation with money -- and the competitive urge to ever more willingly cut corners. Human nature just can't resist. The ethical low usually becomes clear after the bull-market peak.

More: http://www.prospect.org/print/V14/5/phillips-k.html



*edit: oops, my finger slipped! I meant 89, not 79!**

[54anickel]

73. Thanks much bain_sidhe. Always looking for some good reading.

[UpInArms]

16. 9:33 EST markets are open

Dow 10,103.28 -36.43 (-0.36%)
Nasdaq 1,870.92 -16.44 (-0.87%)
S&P 500 1,097.23 -4.49 (-0.41%)
10-Yr Bond 4.437% -0.038

looks like they don't want it to slide below 10,100 - hmmmm....

we'll see where it goes :shrug:

[Maeve]

17. And to no surprise...opening in the red

Dow 10,106.10 -33.61 (-0.33%)
Nasdaq 1,872.10 -15.26 (-0.81%)
S&P 500 1,098.02 -3.70 (-0.34%)
10-Yr Bond 4.437% -0.038

[Maeve]

19. Climbing at 9:49

And :hi: to my tandem posting sis, UpInArms!

Dow 10,120.53 -19.18 (-0.19%)
Nasdaq 1,876.95 -10.41 (-0.55%)
S&P 500 1,099.20 -2.52 (-0.23%)
10-Yr Bond 4.437% -0.038

[UpInArms]

20. 9:48 EST and recovering

Dow 10,121.71 -18.00 (-0.18%)
Nasdaq 1,877.20 -10.16 (-0.54%)
S&P 500 1,100.19 -1.53 (-0.14%)
10-Yr Bond 4.437% -0.038

9:45AM: Indices open lower in response to heightened terrorism concerns, but show no panic...in fact, there has been a modest early bounce off the lows...Procter & Gamble (PG 53.95 +1.80) supports the Dow after a very good earnings report...the ISM services index is due at 10:00 ET...

[54anickel]

21. STOP IT!!! You guys are scaring me! n/t

[UpInArms]

22. U.S. June construction spending down 0.3%

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38201.4169212963-816434441&siteID=mktw&scid=0&doctype=806&

WASHINGTON (CBS.MW) -- U.S. construction spending fell for the first time in five months, the Commerce Department said Monday. After setting an all-time high in May, overall June construction spending fell 0.3 percent, falling to a $985.2 billion seasonally adjusted annual rate. Economists polled by CBS MarketWatch had forecast a 0.2 percent increase for the month. Spending in May was revised to a 0.1 percent increase to a record $987.8 billion, compared with the initial estimate of a 0.3 percent gain to $988.5 billion. Total private sector spending fell 0.4 percent in June to $746.6 billion. Within this category, residential construction spending fell 0.6 percent to $527.1 billion. This is the first decline in sixteen months. Public sector spending rose 0.2 percent to a record $238.5 billion in the month.

:hi: Maeve! Will this be another simul-post?

[UpInArms]

24. other headlines and reports

10:03am 08/02/04

TREASURY'S SNOW: ECONOMIC SYSTEM FUNCTIONING NORMALLY

10:01am 08/02/04

U.S. JULY ISM PRODUCTION 66.1% VS. 63.2%

10:02am 08/02/04

U.S. JULY ISM PRICES 77.0% VS. 81.0%

[54anickel]

23. U.S. Economy Slows Drastically in Spring

Hints to what we may see reported in the next set of job numbers and inflation index? My crystal ball is showing me big news of a thwarted major attack and great job numbers again and tame inflation to launch the markets coming up over the next week or two. All 3 seem to be well within their control. :tinfoilhat:

http://story.news.yahoo.com/news?tmpl=story&cid=668&ncid=749&e=6&u=/ap/20040801/ap_on_bi_go_ec_fi/economy

WASHINGTON - The U.S. economy slowed dramatically in the spring to an annual growth rate of 3 percent, as consumers, worried about higher gasoline prices, cut back their spending to the weakest pace in three years, the Commerce Department (news - web sites) reported Friday.

The administration, counting on a rebounding economy to bolster President Bush (news - web sites)'s re-election prospects, insisted the second-quarter slowdown was only temporary and forecast that growth would rebound in the second half of the year.

Treasury Secretary John Snow noted the upward revision of the first-quarter GDP (news - web sites) figures with the lower-than-expected second quarter figure. If the two figures were averaged together, he said, it gave evidence of an economy growing at a solid 3.75 percent rate.

"We're on a positive track, and the fundamentals are solid for the future," Snow said in a statement.

snip>

Private economists were troubled that the second-quarter slowdown could develop into something worse, especially if job growth fails to rebound after a disappointing rise of just 112,000 payroll jobs in June. The July jobs data will be released next Friday.

more...

[54anickel]

27. Firms Flush With Cash Still Wary of Spending (The rest of the story)

So much for that passing of the baton.

http://www.latimes.com/business/la-fi-earnings2aug02,1,3183725.story?coll=la-headlines-business

snip>

Business outlays for capital equipment, as opposed to new plant construction, have been particularly strong. Spending on equipment and software rose at a 10% rate in the second quarter, up from 8% in the first quarter, the government said.

But for all that, there remain signs of doubt and parsimony in executive suites.

Cash is rolling into corporate coffers by the truckload, but spending, relatively speaking, is being doled out by the capful.

According to John Lonski, senior economist for Moody's Investors Service, corporate cash flow relative to capital outlays has reached the highest level since 1959 for non-financial companies. And if being flush with cash weren't enough, corporate credit rating upgrades are outpacing downgrades, meaning that companies' balance sheets are getting cleaner and borrowing capacity is rising.

All told, not since the Eisenhower administration have business wallets been so fat — and many business leaders so determined to sit on them.

Some of the reasons for the caution are both obvious and understandable, analysts say.

snip>

Companies worry that they might finally decide to ramp up production of goods or services just as buyers head to the sidelines. Concern about the economic outlook has shown up in forecasts some companies have made for their sales and earnings in the second half.

more...

[54anickel]

25. ARMs pose risks to the uninformed (interesting stats)

http://www.latimes.com/business/la-re-update1.1aug01,1,912859.story?coll=la-headlines-business

snip>

The survey, conducted in early July, showed that the 25% of respondents who say they prefer adjustable rate mortgages, or ARMs, are younger, poorer and less educated than the two-thirds who prefer fixed-rate mortgages. Of those who favored ARMs, 32% were ages 18 to 24, 33% had annual incomes of less than $25,000 and 26% had only high school degrees. By groups, 37% of Latinos and 31% of African Americans preferred ARMs, compared with 23% of whites.

The consumer group noted that with nearly a third of home buyers taking adjustable mortgages, some lenders are aggressively marketing them to lower-income consumers and those with low credit scores. "Given the high probability of interest rate increases, an adjustable-rate loan made to a family which can barely afford the initial monthly payments represents a ticking time bomb," said executive director Stephen Brobeck.

[UpInArms]

26. 10:08 EST numbers and blather

Dow 10,131.80 -7.91 (-0.08%)
Nasdaq 1,874.68 -12.68 (-0.67%)
S&P 500 1,099.64 -2.08 (-0.19%)
10-Yr Bond 4.443% -0.032

10:00AM: The ISM manufacturing index came in at 62.0 for July, up slightly from 61.1 in June, right in line with expectations at 62.0...the indices continue to show resilience in the face of concerns about a potential terrorist attack...

Come on in - the water is fine!

[UpInArms]

28. Dollar maintains losses after construction, ISM data

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38201.423912037-816434896&siteID=mktw&scid=0&doctype=806&property=&value=&categories=&

NEW YORK (CBS.MW) -- The U.S. dollar maintained its earlier losses after data on U.S. construction spending in June came in below expectations, but was offset by slightly stronger than expected July manufacturing activity data from the Institute for Supply Management. The euro was up 0.2 percent vs. the buck at $1.2047 and the dollar dropped 0.5 percent against the yen to 110.75. The dollars weakness stems more from investor anxiety over the raised terror alert level in northern New Jersey and Washington D.C., after Homeland Security Secretary Tom Ridge warned over the weekend of "unusually specific" evidence of possible al-Qaida attacks on five key financial sector buildings.

[54anickel]

29. Market Wrap-up - The US Dollar and Gold at the Crossroads Again

Today's WrapUp by Tim W. Wood 07.30.2004

http://www.financialsense.com/Market/daily/friday.htm

snip>

Now, it’s time for the intermediate term cycle low to occur once again in the dollar. Thus far, it appears that low occurred on July 19, 2004 at 87.20. Notice how the price behavior has changed and now seems to be impulsing up rather than down. This is a positive development for the dollar as it tend to confirm the intermediate-term low. However, in order for this intermediate-term cycle to remain positive, it must clear two very important hurdles. The first one is that the July 19, 2004 short-term cycle low MUST hold. The second one is that the June 16, 2004 top MUST be exceeded.

So, as it stands today, it appears that the dollar has most likely made its very important intermediate-term cycle low. Now the question is; which force is greater, that of the bull or that of the bear? If the dollar should break below 87.20, it could result in a most serious decline for the dollar as this could very well then trigger some even longer-term cyclical failures. But, if the dollar should break above 90.56, it would be a bullish development for the dollar and would serve to further confirm even longer-term cycle lows. The jury is now out. All we can do is wait for the verdict of the market and be prepared to go with whatever that verdict may be.

snip>

The important hurdle for gold is to see a break above 409.60 as the next short-term cycle advances. Failure to do so will be a technical warning. Also, in the process of trying to advance above the July short-term cycle top, gold MUST hold above the June short-term cycle low at 382.50.

So, I hope that you can see why gold and the dollar are at such important technical crossroads. Both are facing the same dilemma. Both are trying to hold above their most recent intermediate-term cycle lows. One will succeed and the other will fail. The jury is out. As market participants we must listen to the market and the verdict should be coming soon.

[54anickel]

30. The float will soon be history

http://www.chron.com/cs/CDA/ssistory.mpl/business/2712351

snip>

People living on the financial edge make it all work by timing when and how they pay their bills.

They depend on the float, the time between when a check is written for a payment and when the money comes out of a bank account.


Cushion disappearing
Soon, that cushion will be gone. On Oct. 28, the Check Clearing for the 21st Century Act goes into effect and makes a digital picture of a paper check a legal document.

Known in the banking industry as Check 21, the new law allows the electronic image to substitute at a bank or in a court of law for the real thing.

snip>

Consumer advocates want the Fed to order banks to shrink holds on deposited checks, which can be as long as seven working days.

In its final rules issued last week, the Fed said it expected that the law would "enable a bank to offer its depositors later cutoff times for certain deposits or to make check images available to consumers online," giving faster access to deposits.

But that's not a requirement.
In fact, the law allows, not orders, banks to do electronic processing.

Another point of contention is that Check 21 will make it harder to prosecute fraud.

more...

[54anickel]

31. Yukos Woes Damage Hopes for Russian Capitalism

So,is that necessarily a "bad" thing? :shrug:

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_lynn&sid=a33OSBGf0WoI

snip>

Few believe that Yukos can survive much longer. ``The Yukos debacle is apparently spiraling out of control, heading for the sort of catastrophe outcome we had thought unlikely,'' said Eric Kraus, chief strategist at Moscow-based Sovlink Securities, in an e-mailed response to questions. ``Although there remains the possibility of a last-minute settlement, hope is fading fast.''

Last week, the government appeared to have stopped the company from pumping any more oil, an event that sent the global oil price to a two-decade high. And although that was later clarified, it suggests the government will pull no punches in its battle with the company.

This is far more than just a corporate story. Without Yukos, Russia's, and indeed Europe's, economy will be immensely poorer.

Why? Because Yukos was a force for modernization of the Russian economy. Should it disappear from view, investors will have to stop fooling themselves that Russia is ready to become a developed, Western-style capitalist country.

snip>

The attack on Yukos may be limited to that company. Or it may spread to other oligarchs, and to the whole oil industry.

Yet, two points seem beyond debate.

First, the Russian government isn't interested in placating global capital markets. It doesn't believe international investors have to be wooed. It puts its own interests first, and if that means less foreign investment, so be it.

Two, it has no intention of leaving the market alone.

more...

[UpInArms]

32. 10:40 EST numbers and blather

Dow 10,140.07 +0.36 (0.00%)
Nasdaq 1,874.61 -12.75 (-0.68%)
S&P 500 1,100.26 -1.46 (-0.13%)
10-Yr Bond 4.452% -0.023

10:30AM: Fairly narrow trading ranges persist...there are few sector moves not driven by individual stocks...cable broadcasting is up on the news that Cox Communications (COX 33.40 +5.82) may go private...household products are up on Procter & Gamble (PG 53.90 +1.75) gains after its earnings report...tech sectors are broadly lower as the SOX semiconductor index is down 0.9%, consistent with the 0.9% decline in the Nasdaq so far...oil is now down 30 cents a barrel despite the terrorist attack concerns...NYSE Adv/Dec 1027/1842, Nasdaq Adv/Dec 668 /2245

[54anickel]

33. Different Bubble, Different Outcome?

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

The Inverse Of Multiplication...In case you've forgotten grade school math, that's division. Well, there's certainly no question that there's one thing that has multiplied like wildfire over the last half decade, and that's residential real estate prices. As you know, the debate has currently appeared in the mainstream as to whether a bubble exists in household real estate asset values. A few weeks back, in a study published by the clairvoyant folks at the Fed, the emphatic declaration was "no way". (Remember, the Fedsters are currently 0 and 1 in terms of "a priori" bubble recognition. Luckily for them they still have a chance to redeem themselves if they get to work now by correctly identifying any one of the current number of other bubblicious asset classes of the moment.) In response to the documented Fed real estate appraisal, a research report put out by HSBC officially and professionally concluded "yes way", bubble conditions do exist in the land of US residential real estate prices. We're not going to debate the bubble characterization issue except to say that in our minds, bubble conditions exist in real estate finance. Although we have some pretty solid guesses, how the ultimate ebb and flow of the mortgage finance cycle plays itself out remains to be seen at this point.

snip>

Different Bubble, Different Outcome?...Without us having to say it, it's a pretty good bet that a downturn in residential real estate values would not be good for forward household confidence. But if a real estate downturn were to become serious enough to trigger meaningful financial defaults, the potential consequences become much more dark than just households feeling blue. Much more dark for the entirety of systemic credit expansion stateside, and the Fed's theoretical ability to revive and/or stimulate the broader financial and economic system. Essentially, we're referring to the popping of a price bubble. What we're leading up to here is that the very fact that asset bubbles, or potential assets bubbles, exist does not necessarily pre-determine massive fallout across the broader economy in the event of their popping, but rather it's how they are financed that just might be the key issue in terms of potential economic and financial fallout. As you know, at least so far, the popping of the NASDAQ bubble four years back did not take the US economy directly into some type of deep recession or semi-depression. At least not in terms of headline economic stats. Certainly a lot of folks lost a lot of real money, but one of the keys to economic and financial survival so far has been the fact that lending institutions of all types were about to embark on a massive interest driven lending spree. Broad potential for credit expansion was not hampered in general by the NASDAQ price pop. And it's really no secret as to why. Quite simplistically, the stock market bubble was not financed by the banks. It wasn't financed by Fannie and Freddie. At least not directly. It was financed by pension funds, mom and pop investors armed with personal, IRA and 401(k) money, and it was financed late in the game by foreign interests unable to avoid the temptation of joining the party. And, yes, in part it was financed by margin debt. But compared to mortgage debt in the system, margin debt even at its peak was an absolute dollar rounding error.

Real estate is different. At least as far as the banks are concerned. And in a severe real estate downturn, FNM and FRE would probably wind up as basket cases. At best maybe it's just their equity holders that would handle basket case duty. The big difference in the popping of the equity bubble versus the popping a potential residential real estate bubble at the moment is the financing. As we have shown you before, the US banking system is a huge player. Remember, it's not just Fannie and Freddie financing every piece of real estate in this country. The numbers simply speak for themselves. As you can see, the commercial banking system in the US is pushing toward $2.5 trillion in total loan exposure to real estate, both commercial and residential. Also critical to keep in mind is that what you see below is only lending activities. On the investment side of the equation, US commercial banks have plenty of real estate related "paper" exposure in the form of direct investments in government agency debt, CMO's, GMNA's, and other assorted real estate mortgage related investment exotica.

And, in our minds, the big difference for the US financial system if real estate values were to "pop", so to speak, is to be found in the multiplier effect inherent in fractional reserve banking. For the sake of conceptual argument, we'll keep the numbers really simple (for ourselves more than anyone else). Let's use a bank deposit "reserve requirement" of 10%. The bottom line is that every dollar deposited into the banking system can ultimately potentially "create" $10 of credit expansion. With a $1 deposit, a bank must keep 10 cents in reserves and can then lend out 90 cents. Assuming that 90 cents purchases an asset and the seller of the asset deposits the 90 cents into the banking system, 81 cents can then be lent out (90 cent deposit less the 10%, or 9 cents, reserve requirement). On the very first lending transaction, we've now created $1.71 of new credit for the $1 dollar originally deposited into the system. Extend the lending possibility example to its mathematical conclusion and $1 has the potential to create $10 in new credit. Simplistically, this is the very mechanism by which we conduct modern day "fractional reserve banking". No big mysteries. It's a wonderful life, right?

But what happens when defaults occur in the banking system? Well, the machinery is thrown into reverse, whether voluntarily or not. When a bank loses a dollar through a loan default, its original liability to depositors does not go away. At the start of a default process, the bank simply loses $1 of its own equity. It has to take money out of shareholders pockets to repay depositors if it loses their money in lending activities. But, moreover, and a bit conceptually, the $1 a bank loses in a loan loss is another $1 it cannot turn into $10 of new credit expansion. This is the double edged sword of fractional reserve banking. Very simplistically, loan losses can beget credit contraction, dependent of course on the severity of system wide loan loss experience in any asset class. Again, in our minds, a potential popping of the theoretical (for now) bubble in residential real estate prices could foster quite a different outcome for the real economy and financial markets than did the bursting of the NASDAQ bubble four short years ago. The popping of the NASDAQ bubble took mom and pop money down the drain, it blew a hole in many a corporate pension fund, and postponed the retirement dates for many an IRA dependent household in the US. But what the popping NASDAQ did not do was impede systemic credit creation. Alternatively, a severe downturn in real estate values that triggered real mortgage loan defaults would, in part, act to set into reverse the US banking system fractional reserve multiplier mechanism. A severe or prolonged enough downturn in real estate would, from our point of view, at the very least call into question the rate of change in US financial system credit expansion possibilities. In other words, different bubble, very different outcome for the real US economy. The real US economy that has become extremely dependent on credit expansion at ever accelerating rates.

more...

[54anickel]

35. Kerry - Will he win and would he make a difference?

http://www.321gold.com/editorials/thomson/thomson073104.html

snip>

With the polls showing the two candidates virtually neck and neck it is obvious that Kerry can win, but will he? The markets, as always, are one useful indicator. Kerry can take heart from the daily chart of George Bush's prospects as shown on www.tradesports.com a betting exchange. That shows Bush declining from a 75 percent probability of winning in January to a present level of 50 percent. If 'the trend is your friend' as they say in the markets, then Kerry is sitting comfortably at this point with less than 100 days till election day. History shows the undecided tend to make up their minds at the last moment and then to cast an unpopular incumbent out.

Bush lost the popular vote in 2000 by half a million votes out of 101 million cast but won the all important electoral college vote by the slimmest of margins: 270 to 268. Some 500 votes in Florida settled the deal in his favour by giving him the 25 Floridian Electoral College votes.

The westward and southern drift of the population means that if Bush wins the exact same states this time he would get 278 votes to Kerry's 260. That is the extent of Kerry's challenge, he needs one or two of the states won by Bush last time. These are the so-called swing states.

That may not be much of a challenge. Bush, after all, is the first President since Herbert Hoover to go to the polls with less Americans at work than when he was elected. The war is becoming steadily more controversial and disliked by more and more voters.

The polls indicate that New Hampshire with 4 votes could switch and support a fellow New Englander. The critical rust belt state of Ohio with 20 votes looks to be leaning towards Kerry. It is, after all, the archetypal rust belt state that has lost decently paid manufacturing jobs in the last four years, only to be partially substituted by less well-paid jobs at Wal-Mart and McDonalds.

more...

[54anickel]

36. The Case Against George W. Bush (Ron Reagan-Esquire)

This was linked to at 321gold.

http://www.esquire.com/features/articles/2004/040729_mfe_reagan_1.html

It may have been the guy in the hood teetering on the stool, electrodes clamped to his genitals. Or smirking Lynndie England and her leash. Maybe it was the smarmy memos tapped out by soft-fingered lawyers itching to justify such barbarism. The grudging, lunatic retreat of the neocons from their long-standing assertion that Saddam was in cahoots with Osama didn't hurt. Even the Enron audiotapes and their celebration of craven sociopathy likely played a part. As a result of all these displays and countless smaller ones, you could feel, a couple of months back, as summer spread across the country, the ground shifting beneath your feet. Not unlike that scene in The Day After Tomorrow, then in theaters, in which the giant ice shelf splits asunder, this was more a paradigm shift than anything strictly tectonic. No cataclysmic ice age, admittedly, yet something was in the air, and people were inhaling deeply. I began to get calls from friends whose parents had always voted Republican, "but not this time." There was the staid Zbigniew Brzezinski on the staid NewsHour with Jim Lehrer sneering at the "Orwellian language" flowing out of the Pentagon. Word spread through the usual channels that old hands from the days of Bush the Elder were quietly (but not too quietly) appalled by his son's misadventure in Iraq. Suddenly, everywhere you went, a surprising number of folks seemed to have had just about enough of what the Bush administration was dishing out. A fresh age appeared on the horizon, accompanied by the sound of scales falling from people's eyes. It felt something like a demonstration of that highest of American prerogatives and the most deeply cherished American freedom: dissent.

Oddly, even my father's funeral contributed. Throughout that long, stately, overtelevised week in early June, items would appear in the newspaper discussing the Republicans' eagerness to capitalize (subtly, tastefully) on the outpouring of affection for my father and turn it to Bush's advantage for the fall election. The familiar "Heir to Reagan" puffballs were reinflated and loosed over the proceedings like (subtle, tasteful) Mylar balloons. Predictably, this backfired. People were treated to a side-by-side comparison—Ronald W. Reagan versus George W. Bush—and it's no surprise who suffered for it. Misty-eyed with nostalgia, people set aside old political gripes for a few days and remembered what friend and foe always conceded to Ronald Reagan: He was damned impressive in the role of leader of the free world. A sign in the crowd, spotted during the slow roll to the Capitol rotunda, seemed to sum up the mood—a portrait of my father and the words NOW THERE WAS A PRESIDENT.

The comparison underscored something important. And the guy on the stool, Lynndie, and her grinning cohorts, they brought the word: The Bush administration can't be trusted. The parade of Bush officials before various commissions and committees—Paul Wolfowitz, who couldn't quite remember how many young Americans had been sacrificed on the altar of his ideology; John Ashcroft, lip quivering as, for a delicious, fleeting moment, it looked as if Senator Joe Biden might just come over the table at him—these were a continuing reminder. The Enron creeps, too—a reminder of how certain environments and particular habits of mind can erode common decency. People noticed. A tipping point had been reached. The issue of credibility was back on the table. The L-word was in circulation. Not the tired old bromide liberal. That's so 1988. No, this time something much more potent: liar.

Politicians will stretch the truth. They'll exaggerate their accomplishments, paper over their gaffes. Spin has long been the lingua franca of the political realm. But George W. Bush and his administration have taken "normal" mendacity to a startling new level far beyond lies of convenience. On top of the usual massaging of public perception, they traffic in big lies, indulge in any number of symptomatic small lies, and, ultimately, have come to embody dishonesty itself. They are a lie. And people, finally, have started catching on.

None of this, needless to say, guarantees Bush a one-term presidency. The far-right wing of the country—nearly one third of us by some estimates—continues to regard all who refuse to drink the Kool-Aid (liberals, rationalists, Europeans, et cetera) as agents of Satan. Bush could show up on video canoodling with Paris Hilton and still bank their vote. Right-wing talking heads continue painting anyone who fails to genuflect deeply enough as a "hater," and therefore a nut job, probably a crypto-Islamist car bomber. But these protestations have taken on a hysterical, almost comically desperate tone. It's one thing to get trashed by Michael Moore. But when Nobel laureates, a vast majority of the scientific community, and a host of current and former diplomats, intelligence operatives, and military officials line up against you, it becomes increasingly difficult to characterize the opposition as fringe wackos.

more...

[54anickel]

37. Update 2: Officials: U.S. Banking System Protected

http://www.forbes.com/home/feeds/ap/2004/08/02/ap1484022.html

Officials believe there are sufficient safety mechanisms to ensure that any terrorist attack on the U.S. financial system can be weathered in much the same way the system handles hurricanes and other disruptions.

Millions of dollars have been spent to develop redundant systems that could take over after a terrorist attack to make sure that bank customers are able to continue to cash checks, make deposits and withdraw money from automatic teller machines.

Many of those systems have been put in place since the Sept. 11, 2001, attacks in the heart of the financial district in New York City.

Federal Reserve Chairman Alan Greenspan told Congress recently that his agency, which oversees the country's biggest banks, continues to upgrade systems to deal with the "fortunately low but still deeply disturbing possibility" of a new terrorist attack.

more...

[54anickel]

38. A choice between Two Puppets

http://www.321gold.com/editorials/maund_nigel/maund_nigel073104.html

snip>

The fact is that the two candidates are mere "front men," selected by their faceless "lords and masters" to do nothing other than further the purposely ill-defined interests and objectives of the latter. The real economic and political issues facing America in the early 21st Century are rarely, if ever, addressed, and obfuscation is the order of the day. Therefore, the time is long overdue for US Citizens to look carefully at the real meaning of "Democratic Representation" in the light of the original US Constitution, and for all Americans to take a hand in their own, and, more importantly, their children's future.

Any intelligent and questioning mind will recognize the current political canvas of the USA for what it is; i.e., a Duopoly, in which the entire political spectrum consists of two political camps, supposedly representing a cross section of the political and economic views and aspirations of the nearly 300 million people that comprise American society. In fact, these two "parties" are just two sides of the same coin, and are flipped, according to a recipe, to give "the illusion of Democracy" to a largely unthinking populace, wholly preoccupied with day-to-day living. The huge raft of issues facing a highly complex, increasingly cosmopolitan and giant country like the USA, are not addressed. Electioneering is skillfully crafted, by the media, into a few selected narrow channels, so that the electorates' focus is similarly constrained, and "a confusion of issues" is avoided. Once this objective has been achieved, molding the public's mind is a much easier task for the media, who can then market "The (chosen) Candidate" like a consumer product.

The failure of US citizens to look carefully at their political and economic system, and to seriously question what is going on, and act, will have consequences that reach far beyond the United States of America. Freedom and Liberty, and "the greater good of mankind," are not matters to be taken for granted, as America's Founding Fathers understood all too well. Those that take such vital issues for granted, live to regret it. Once lost, getting these fundamental rights back is extremely costly and difficult, as any historian knows.

In conclusion, Americans are going to find out that the greatest enemy facing the United States is not the Iraqi resistance, Iran, North Korea, or Osama Bin Laden, but its own economic and political system, and this system's masters, the low profile plutocrats who own and control much of US business and society.

bit more...

[54anickel]

39. 11:59 check-in

Dow 10,144.94 +5.23 (+0.05%)
Nasdaq 1,877.24 -10.12 (-0.54%)
S&P 500 1,100.52 -1.20 (-0.11%)
10-yr Bond 4.462% -0.013
30-yr Bond 5.195% -0.010
NYSE Volume 496,081,000
Nasdaq Volume 644,853,000

11:25AM: Over 80% of the S&P 500 companies have now reported, and operating earnings in aggregate for those companies are on track to post 25% year-over-year growth...this marks the fourth straight quarter of above 20% growth...there was some disappointing guidance for technology companies, but overall, guidance was mixed...as a result, earnings forecasts for the third quarter remain between 14% and 15%...not much change and still a very strong growth number, especially considering that the comparison for the third quarter is much more difficult than it was for the second quarter...NYSE Adv/Dec 1093/1959, Nasdaq Adv/Dec 757/2268

11:00AM: Crude oil prices are off 30 cents this morning despite the heightened terrorist concerns...that is helping the stock market show a restrained response as well...indices have shown no tendency to break down this morning...gains over the past week have helped set a better tone...earnings reports from technology companies have pretty much finished up, and it was warnings from those companies that caused much turmoil, so that risk is also lessened...not surprisingly, volume is light on this first trading day of August...NYSE Adv/Dec 982/1992, Nasdaq Adv/Dec 682/2307


Advances & Declines
NYSE Nasdaq
Advances 1204 (37%) 904 (28%)
Declines 1866 (57%) 2147 (66%)
Unchanged 168 (5%) 159 (4%)

----------------------------------------------------------------------

Up Vol* 168 (37%) 209 (34%)
Down Vol* 268 (59%) 399 (65%)
Unch. Vol* 15 (3%) 5 (0%)

----------------------------------------------------------------------

New Hi's 31 37
New Lo's 33 73

[nothingshocksmeanymore]

40. Just a little thanks to the Stock thread regulars

from people like me that check this everyday but don't post :toast:

[54anickel]

46. Thanks nothingshocksmeanymore!

Always enjoy hearing from the "lurkers" and occasional posters out there. Nice to know we aren't babbling amongst ourselves - there are days it certainly feels that way. :hi:

[nothingshocksmeanymore]

48. I'm a dope..I have nothing to contribute

so I just read...but I'm here everyday that you are :D

[54anickel]

50. Everyone usually has something to contribute. I'm no economic

whiz, and I post a lot of stuff because I am truly baffled by it all and looking for some input or another post that validates or negates what I've found.

As for the "I'm a dope" comment all I can say is I doubt that very much - you're here at DU aren't you? And reading this and the many other threads for inquiring minds. ;-)

[54anickel]

42. Managed Markets

http://www.gold-eagle.com/editorials_04/bloom073004.html

Why am I going into this theoretical BS?

Quite simply, because the falling wedge in the US Dollar chart as drawn above would therefore imply that the US Dollar has now entered either a Primary or Secondary RISING trend.

Now, one has to stop and ask one's self: "What is the probability that the above statement is true - ie is a result of "normal" market forces?

Here are the facts:

The US Government is running its financial affairs at a deficit size that flies in the face of the word "sanity" - let alone "logic"
The US as a sovereign state is currently the largest debtor nation in the world, - with a Current Account deficit that virtually guarantees that this indebtedness can only grow larger in the foreseeable future
The US economy is founded on technologies which are oil dependent, and is now forced to import the majority of its oil requirements - in the face of an oil price that is reaching for new highs because:
No new refinery capacity has been added for decades given the clear understanding that pumping of oil has reached a peak, and that oil reserves are dwindling
The current US Government has (mind blowingly) moved to BLOCK the development of alternative energy technologies which are less dependent on oil (By its failure to ratify the Kyoto Protocols)
The two responses of the current US Government to the above have been:
To declare war on terrorism throughout the world (an admirable sentiment provided the evidence supports the base assumption that Terrorism is the most important threat being faced by Society as a whole).
To declare that it will be devoting more of its attention in future to escalating the "Space Race"
A "rational" person would look at the above facts and conclude that the US Dollar is a currency that should be avoided like the bubonic plague.

However, there are differing levels of rationality. From the perspective of an equally rational cadre of the World's Central Bankers, a collapse in the US Dollar is to be avoided like the bubonic plague.

Hence, it is quite reasonable to conclude from all of the above that the US Dollar is being "managed" by the world's Central Bankers.

Now, you might argue that NO SINGLE FORCE can manage prices against the combined forces of the market as a whole and, "normally" you would be right. But consider the following:

The World's Central Bankers have an unreasonable advantage: THEY CAN PRINT AS MUCH MONEY AS THEY LIKE. In short, they have a "bottomless pit" of financial resources with which to manage the markets.

snip>

So the above might lead to the conclusion that - despite all logic based on economic fundamentals - the Central Bankers of the World are working furiously behind the scenes to protect the world's financial infrastructure.

I want to differentiate here between the meaning of the word "Manage" and that of the words "Conspiracy" and "Manipulate". Conspiracy and Manipulate are emotive words which imply joint clandestine action or antisocial behaviour, whereas Manage implies joint overt, and legitimate action. There is no secret that the world's Central Bankers are involved in "Managing" markets. After all, it is the mandate of every country's Central Bank to protect the integrity of its own country's economy. Why would anyone be surprised if the Central Bankers were to join forces in an attempt to protect the World Economy? To the contrary, one should be surprised if they did not.

So, in simple terms, the question arises as to whether or not they will succeed.

snip>

Which brings us to focus on the real Achilles Heel of the World's Financial Infrastructure: Greed on the part of vested interests.

There are those - and it looks suspiciously like George W Bush is one of them - who will take decisions that are counter productive to the welfare of Society as a whole in order to ensure a maintenance of the vested interests of a small subset of greater Society. They rationalise that these people have superior capabilities and that they therefore "need" to be protected so that they can "get on with the job" of "saving the world". There is a word that describes such a rationalisation, and that word is "arrogance".

more...

[54anickel]

47. 12:52 numbers and blather that really makes you wonder....

what money is really out there - buy & hold 401Kers, pensions, or has the market become totally immune to the "global instability" fear trade, then again there's always the PPT to wonder about. :shrug:

Dow 10,140.15 +0.44 (0.00%)
Nasdaq 1,877.05 -10.31 (-0.55%)
S&P 500 1,100.99 -0.73 (-0.07%)
10-yr Bond 4.459% -0.016
30-yr Bond 5.195% -0.010
NYSE Volume 604,504,000
Nasdaq Volume 759,818,000

12:30PM: Volume on the NYSE is on track for only about 1.2 billion shares today...hard to say if the market has fully discounted terrorism risks or whether the market would be building on last week's gains with further gains today were it not for the terrorism issue, but stocks and commodity prices have shown little impact from the heightened risks today...oil is down 35 cents and gold is up 60 cents to $394.30...NYSE Adv/Dec 1286/1828, Nasdaq Adv/Dec 915/2162
12:00PM: Stock indices opened lower in response to the heightened terrrorist warning but have shown excellent resilience through the morning...the only major earnings was a stellar report from Procter & Gamble (PG 53.69 +1.54)...the July ISM manufacturing index came in at 62.0, up from 61.1 in June...that was in line with expectations and, as any reading above 50 reflects growth, suggests a strong industrial production recovery in July...oil prices are off about 35 cents, which is a bit surprising given the terrorist concerns and has also provided support to the stock market...

the yield on the 10-year note has dropped to 4.46% as a small flight-to-quality trade has boosted bond prices...volume is very light on the first trading session of August and decliners have a large lead on advancing issues considering the modest losses in the indices...NYSE Adv/Dec 1175/1891, Nasdaq Adv/Dec 896/2165

[UpInArms]

52. 1:41 EST market numbers and blather (almost all better now)

Dow 10,177.61 +37.90 (+0.37%)
Nasdaq 1,886.43 -0.93 (-0.05%)
S&P 500 1,104.81 +3.09 (+0.28%)
10-Yr Bond 4.465% -0.010

1:30PM: S&P pushes into positive territory and to highs of the day...there is a lot of market talk, and journalist articles, that the risks associated with terrorist attacks are now "in the market"...we'll leave that for the reader to decide, but the action today is constructive given the resilience in the face of this factor...there are no major earnings reports after the close today, but there are plenty of reports still to come on Tuesday through Thursday...Friday brings the July employment data...NYSE Adv/Dec 1410/ 1748, Nasdaq Adv/Dec 952/2171

12:55PM: Little change in the overall trend as stocks remain on the defensive... Technology, biotech, brokerage, airline, and oil service stocks continue to be big weights and curb the market's upside momentum... The post secondary education area has also been a group that has stuck out on the downside... Corinthian Colleges (COCO 10.58 -8.14) dramatically reduced its outlook for 4Q04 (June), 1Q05 (Sept), FY04, and FY05 citing higher than anticipated costs and weaker than expected revenues...

This warning has reawakened fears about the group, which is already burdened by several federal investigations into its funding and student enrollment policies... For more insight into this sector, visit Briefing.com's Story Stocks page...NYSE Adv/Dec 1327/1811, Nasdaq Adv/Dec 932/2167

:hi: to all the lurking readers!

[54anickel]

51. Punishing Savers (for KoKo!)

http://www.gold-eagle.com/editorials_04/norcini072904.html

snip>

The point is that this is the environment that the Fed in its glorious wisdom has created for American citizens. In their attempt to avert a collapse after a market bubble blow-off, Greenspan and company slashed interest rates to 45 year lows effectively removing a major source of expected income from the entire population of our senior citizens. Many of these people were born during the Great Depression and grew up with an inherent aversion to debt and to risk. They worked hard, played by the rules, avoided excessive debt and saved a goodly portion of their salaries over their lifetime. As they approached their golden years, their expectation was that they could move their life's savings into something very conservative and very safe such as a bank CD and use the interest proceeds to fund their retirement needs. Many were no doubt thinking that a million dollar nest egg yielding a safe and solid yearly yield of 6% would be more than sufficient to allow them to live comfortably while they reaped the rewards of all those years of doing without and saving. Thanks to Mr. Greenspan, those dreams have gone with the wind.

This, in my mind, is perhaps the real legacy of the Federal Reserve System foisted upon the nation nearly a hundred years ago. It is the human cost of the pain and suffering inflicted on the good citizens of this land by a system that has now come to fruition, a system that punishes those far-sighted enough to save and prepare for the future while at the same time rewarding the profligate and reckless. How many of you readers out there have parents or grandparents that are faced with the quandary I outlined in the beginning of this essay? They do not know where to put their money and are almost desperate to find a place, any place, where they can obtain a decent rate of return or yield without exposing it to excessive risk. Yet such places seem to elude them and thus they are forced into risking that money at a time in their lives when risk is the last thing they want to take on. Watching these seniors take the earnings of their lifetime out of bank savings deposits paying a pitiful 0.8% per year or one year CD's paying a trifle more and sinking it into high yield junk bonds or REIT's (Real Estate Investment Trusts) in order to actually make enough interest to survive upon personally makes my blood boil. What happens to these poor folks should those investments go south? What happens when the current speculative madness in the real estate sector comes to an end and the bubble breaks? How many more horror stories do we need to hear about people in their golden years being forced into becoming door greeters at the local Wal-mart since they have lost their nest egg?

Greenspan and company have made a deliberate and calculated decision which in effect has forced savers such as these seniors into putting their capital at excessive risk. The truth be told, the average investor upon learning that he can make a mere 1% or so a year on his money in the bank, looks to the stock market as an alternative. Whether this is sound judgment or not is not the issue right now. The issue is that he or she has no other alternative in their own mind. Most do not or cannot afford to hire the truly knowledgeable financial advisors out there and those remaining advisors are more often than not, young greenhorns who were not even born or were still in diapers during an actual bear market in stocks. Yet these novices scurry about by land and by sea giving counsel to millions of the citizens of this land to get into the stock market. So it's off to the stock market they go. Yet the stock market is currently vastly overvalued by any conventional or historical method of analysis. What's worse, the broad indexes are down for the year and technically are showing signs of rolling over and breaking hard to the downside. Were it not for the continued intervention by the PPT (Plunge Protection Team), the markets would have already begun the next leg down in this major bear market.

Then again, there are those citizens who are a bit more skillful in money matters and prefer what they perceive to be the relative safety of bonds. They will gravitate towards those feeling that at least they are avoiding risky stocks. The problem for them is that the Fed has set in motion a process which is soon to take its toll on the bond market- the creation of a level of debt that can only be described as gargantuan. The only way it can hope to see this debt repaid is to have it repaid in cheaper dollars and that can only be done by inflating. The problem is that in so doing, bond prices will sink as interest rates soar leaving bond holders with the loss of their capital. That might be considered a good thing for some who can then obtain a decent rate of return on a bank CD as a result, but a lot of good that will do if a one year CD increases at a slower pace than the real rate of inflation!

snip>

Finally, they give up in total despair and just throw in the towel and figure, "Since I can't seem to keep it, I might as well spend it on something I can enjoy before it is all gone anyway". A trip to the motor home dealer, a jaunt to the high priced restaurants, a Harley, a sports car to tool around town, etc. and Greenspan nods approvingly while he extols the resilience of the American consumer as he sits before the Congress assuring the nation and the world, that the American consumer continues to spend and thus drive the global engine of growth. Ah yes indeed -

"…and Alan spoke and it was done. And Alan looked upon that which he had created and Alan said it was good"!

more...

[54anickel]

54. Investors Struggle During a Time of No Returns

http://www.latimes.com/business/la-fi-petruno1aug01.story

This is becoming the year of no returns in financial markets.

The blue-chip Standard & Poor's 500 stock index's return is exactly flat year-to-date, counting dividend income.

The average domestic stock mutual fund is down 1%, according to Morningstar Inc.

The Pimco Total Return fund, the nation's biggest bond mutual fund, is up a mere 1.2% this year. You've earned even less than that in the typical money market fund.

Gold? It's down 6% this year.

No wonder people still are paying ridiculous prices for residential real estate. There doesn't seem to be much incentive to look anywhere else.

snip>

This could turn out to be helpful training for the patience-challenged, however. There's a school of thought that says annualized returns on financial assets, in general, will average in the low to mid single digits for many years to come.

An annual return of even 5% begins to look generous after a market environment like this year's.

For many investors, the knee-jerk reaction to the idea of single-digit gains might be to give up on markets altogether. But that would be an extreme move, and probably would turn out to be a mistake for most people who still consider themselves to be long-term investors.

Any investment return, after all, has to be judged in the context of the alternatives. :eyes:

[KoKo]

59. ROFL "54" I've been yelling "Under the Mattress" for awhile around my

house and here, so that article was written just for me! I could do my own "Mogambo" about hanging on to what one has left after the corporate globalists have ripped us off being safely stuffed under a mattress in some coin wrappers! The heck with the "1/2 percent earned being better than nothing," I want what I have left where I can grab it in case I need to flee on November 2nd. Under the mattress! Inside the mattress, under the floorboards of my house if necessary. :D

Fortunately the articles posted by the "Marketeers" here on DU have been cautionary enough that those of us who visit here every day to read are much more savy and informed than the rest of the crowd out there. :toast:

[54anickel]

62. Yes, those of us longing for the days of the "free toaster" with a new

saving account just keep getting told that's too old fashioned and not a part of the "new world economy". Just no money in it for the banks. Well, with this new economy there's just no money in it for anyone BUT the banks it seems.

[54anickel]

53. 1:44 and all in the black

Dow 10,186.68 +46.97 (+0.46%)
Nasdaq 1,889.08 +1.72 (+0.09%)
S&P 500 1,105.85 +4.13 (+0.37%)
10-yr Bond 4.465% -0.010
30-yr Bond 5.200% -0.005
NYSE Volume 731,300,000
Nasdaq Volume 903,710,000

1:30PM: S&P pushes into positive territory and to highs of the day...there is a lot of market talk, and journalist articles, that the risks associated with terrorist attacks are now "in the market"...we'll leave that for the reader to decide, but the action today is constructive given the resilience in the face of this factor...there are no major earnings reports after the close today, but there are plenty of reports still to come on Tuesday through Thursday...Friday brings the July employment data...NYSE Adv/Dec 1410/1748, Nasdaq Adv/Dec 952/2171

12:55PM: Little change in the overall trend as stocks remain on the defensive... Technology, biotech, brokerage, airline, and oil service stocks continue to be big weights and curb the market's upside momentum... The post secondary education area has also been a group that has stuck out on the downside... Corinthian Colleges (COCO 10.58 -8.14) dramatically reduced its outlook for 4Q04 (June), 1Q05 (Sept), FY04, and FY05 citing higher than anticipated costs and weaker than expected revenues...

This warning has reawakened fears about the group, which is already burdened by several federal investigations into its funding and student enrollment policies... For more insight into this sector, visit Briefing.com's Story Stocks page...NYSE Adv/Dec 1327/1811, Nasdaq Adv/Dec 932/2167

[54anickel]

55. The Jobs Question (This from NewsMax!?!)

http://www.newsmax.com/archives/articles/2004/8/2/82508.shtml

In the current economic recovery, low pay, low skill jobs account for twice the normal amount of job growth reports Stephen Roach, chief economist for Morgan Stanley (New York Times, July 22).

Mr. Roach attributes the low quality of new U.S. jobs to globalization: “Under unrelenting pressure to cut costs, American companies are now replacing high-wage workers here with like quality, low-wage workers abroad. With new information technologies allowing products and now knowledge-based services to flow more easily cross borders, global labor arbitrage is likely to be an enduring feature of the economy.”

“What are we going to do about it?,” he asks.
As long as most economists and elected officials remain in total denial, we are unlikely to do anything about it.

big snip of interesting stuff>

Morgan Stanley’s Stephen Roach is correct to differentiate between free trade and “global labor arbitrage.” U.S. employers are substituting cheaper foreign labor for U.S. labor in the goods and services that they supply to markets at home and abroad. As a result, the U.S. labor force is being redirected to nontradable services. Charles McMillion’s monthly reports (MBG Information Services) based on the Bureau of Labor Statistics payroll data show that job growth during the current recovery is concentrated in domestic services that cannot be outsourced.

A country whose work force is concentrated in nontradable domestic services is a third world country. Will economists stay in denial until the U.S. reaches this destination?

[UpInArms]

56. 3rd world country?

aka BananaRepublic?

little late in catching the wave, but at least they're in the water.

A country whose work force is concentrated in nontradable domestic services is a third world country. Will economists stay in denial until the U.S. reaches this destination?

Have to run away - life is intervening once again :hi:

[54anickel]

58. Better late than never I guess. Hope you can make it back to check

out the close, up, down or a mix in the middle?

[54anickel]

57. Stormy days lie ahead for labor

http://www.workers.org/ww/2004/economy0805.php

Will the reassuring remarks of Alan Greenspan, chairperson of the Federal Reserve Board (FRB), calm the jumpy nerves of Wall Street, Washington and Corporate America following the board's decision to raise interest rates to 1.25 percent?

Greenspan's recent semi-annual testimony to Congress described how expansion of the economy is "self-sustaining" and has become "broad-based," while "the recent softness in consumer spending ... should be short-lived." (Wall Street Journal, July 21)

Nevertheless, the stock markets are jumpy. Recently the Dow Jones Industrial Average dropped below the 10,000 level. Standard and Poor's 500 and the NASDAQ lost ground. They are all perilously close to lows for the year, a sign that the markets are on a bumpy ride.

During a go-round at the Senate Banking Committee session, Greenspan was asked to comment on a remark he had made about a "neutral" interest rate that neither provokes inflation nor slows down the economy. Greenspan responded, "You can tell whether you're below or above, but until you're there, you're not quite sure you are there. ... When we arrive at neutral, we will know it."

Greenspan needs a course in Marxism 101. In reality there is no such phenomenon as a "neutral" interest rate that neither provokes inflation nor slows down the economy. A "neutral" interest rate implies stability, balance and the ability of the Federal Reserve Bank to fine-tune the economy. Nothing could be further from the truth.

There is not even a way to measure the trillions and trillions worth of paper money in different forms--cash, bonds, promissory notes, etc.--that is utilized in the global daily exchange of commodities.

Capitalism: anything but stable

more...

[54anickel]

60. 3:14 numbers and yada

Dow 10,171.79 +32.08 (+0.32%)
Nasdaq 1,883.54 -3.82 (-0.20%)
S&P 500 1,105.02 +3.30 (+0.30%)
10-yr Bond 4.451% -0.024
30-yr Bond 5.189% -0.016
NYSE Volume 989,738,000
Nasdaq Volume 1,211,002,000

2:55PM: Volume is extremely light today...NYSE may end up near 1.2 billion shares...the advance-decline line looks good for the NYSE, but is very weak on the Nasdaq...there are about 3 declining issues for every 2 advancing issues even though the Nasdaq index is near unchanged...this suggests continued nervousness among small cap stocks...the Russell 2000 small cap index is down 0.3%...NYSE Adv/Dec 1835/1393, Nasdaq Adv/Dec 1213/1930

2:30PM: Banking stocks were originally hit by the warning that terrorists might attack financial institutions...the BKX banking stock index opened down 0.7% but has trended steadily higher through the day, providing some leadership to the market...the index is only up 0.4% now, but that is a very good move considering the circumstances...Citigroup (C), for example, opened $0.98 lower but is now up $0.30 on the day at $44.39...NYSE Adv/Dec 1797/1411, Nasdaq Adv/Dec 1212/1928

1:55PM: The impressive, albeit modest, rally continues...the Nasdaq has made it into positive territory even though the SOX semiconductor index is down 0.1% and the BTK biotech index is down 1.4%...these two volatile trading sectors have had significant influence on some recent sessions...decliners still lead advancers by a wide margin on the Nasdaq...oil prices are now down only 10 cents and the 10-year note is now up only 4/32 to yield 4.46%...NYSE Adv/Dec 1610/1556, Nasdaq Adv/Dec 1109/2037

Advances & Declines
NYSE Nasdaq
Advances 1787 (52%) 1109 (33%)
Declines 1454 (42%) 2053 (62%)
Unchanged 146 (4%) 145 (4%)

----------------------------------------------------------------------

Up Vol* 493 (53%) 428 (36%)
Down Vol* 420 (45%) 710 (61%)
Unch. Vol* 16 (1%) 21 (1%)

----------------------------------------------------------------------

New Hi's 52 55
New Lo's 37 87

[54anickel]

61. N.Y. Oil Falls From Record as Concern of Yukos Disruption Wanes

(Who didn't see that coming!)
http://quote.bloomberg.com/apps/news?pid=10000086&sid=a3lyPO2JLEI4&refer=latin_america

Aug. 2 (Bloomberg) -- Crude oil futures fell from a record in New York on reduced concern that shipments from OAO Yukos Oil Co., Russia's top oil exporter, will be disrupted.

Yukos shares jumped as much as 19 percent after a government official said the company may get more than the two months allowed by law to pay a $3.4 billion tax bill. Prices soared last week when Yukos said it might have to limit output because of the bill. The threat comes as the Organization of Petroleum Exporting Countries pumps close to capacity.

``There is less concern about Yukos because the company is being given more time,'' said Kyle Cooper, an analyst with Citigroup Inc. in Houston. ``You need new headlines to sustain an increase and we're not getting them. We also made it through a weekend with no big disruption.''

snip>

The U.S. imported a record 11.3 million barrels a day in the week ended July 23, according to the U.S. Energy Department. Americans consume about a quarter of the world's oil.

``We consider the market to be well-supplied,'' Maizar Rahman, Indonesia's OPEC governor and the acting secretary- general at OPEC's Vienna headquarters, said in a phone interview. ``The reason for current high prices doesn't come from the fundamentals.''

[Pallas180]

63. EXPLAIN pls - terra warning, market up. Huh?

.

[Maeve]

65. Marketeers give terralerts as much credence as we do

The price of oil is much, MUCH more important than any 10,000 words from Ridge and his Homeland Riders.

[54anickel]

66. Wish I could. Lots of guesses though....

Too many false terra alerts so they are loosing their punch. "Nothing to see here, we're on to them so they wouldn't dare try anything now". Sort of like the complacency in the markets in general "They'll ALWAYS come back up".

"It's already priced in" - that's always a good one. How do you price in unknown devastation to the markets? Oh, that's right, they've used a lot of time and space in the media explaining all the great back up strategies in place. :eyes:

Maybe the PPT has been busy - wouldn't take much on their part to sway the direction as there is hardly anyone left in the markets besides buy and hold mutual fund investors and pensions.

I have no idea why the markets are up, but it's not based on the old fashioned fundementals of P/E - hasn't been for a long time.

[Maeve]

67. See? We can simulpost, too!

:hi: I won't be around much this week--gearing up for my favorite weekend (www.dublinirishfestival.org)

Winding up by running around in little circles....

[54anickel]

69. Oh, that looks like a GREAT time!!! Not too far of a jaunt from WI!

[54anickel]

64. From the weekend funnies - President's Radio Address

http://www.whitehouse.gov/news/releases/2004/07/20040731.html

THE PRESIDENT: Good morning. This week we received encouraging reports that show our economy is gaining strength. Consumer confidence hit a two-year high in July. Existing home sales hit an all-time new record in June. The home ownership rate has hit a new all-time high. And since last summer, our economy has grown at a rate as fast as any in nearly 20 years.

These gains in our economy have come at a time when Americans are benefiting from the full effects of tax relief. I have traveled across America, meeting small business owners who are investing tax savings into new equipment, and I have met families who are using tax savings to pay for their children's needs. All of this added economic activity is creating opportunity. Since last August, Americans have started work at more than 1.5 million new jobs, many of them in high-growth, high-paying industries.

The impact of our growing economy is being felt in Washington, where estimates of government deficits are shrinking. My administration now forecasts that the combined deficits in 2004 and 2005 will be about $100 billion less than previously expected, and because of my policy of strengthening the economy while enforcing spending discipline in Washington, we remain on pace to reduce the deficit by half in the next five years.

snip>

We're giving individuals more control over their health care dollars through newly created health savings accounts, and we must also address the rising costs of health care by enacting common-sense reforms in our medical liability system. We must continue to open up foreign markets to American goods, because on a level playing field, American workers and farmers and entrepreneurs can compete with anybody, anytime, anywhere.

We must enact reforms to our legal system, so hardworking entrepreneurs are not run out of business by frivolous lawsuits. We must have a national energy policy so we become less dependent on foreign sources of energy. We must have sensible regulations so that America's job creators can focus on satisfying their customers and not bureaucrats in government.

And we must keep taxes low on American families and small businesses, by making the tax relief we have passed permanent. Thanks to tax relief enacted since 2001, a family of four earning 40,000 a year now pays nearly $2,000 less in federal taxes. That is enough to pay the average home electricity bill for more than a year, or fill up the gas tank of two cars for an entire year.

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Oh really?

http://www.cbpp.org/7-30-04bud.htm

DEFICITS AND THE MID-SESSION REVIEW

On July 30, the Office of Management and Budget released new projections stating that the budget deficit will grow to $445 billion in fiscal year 2004. This is $70 billion larger than the 2003 deficit, which stood at $375 billion. Despite the recovery, the deficit has continued to rise significantly.

The $445 billion projected deficit also is more than $700 billion worse than what the Administration projected for fiscal year 2004 in its first budget, submitted in February 2001. At that time, the Administration forecast a $262 billion surplus for 2004.

In the face of this dramatic fiscal deterioration, the Administration is now attempting to downplay the deficits and is citing the new figures as evidence it is making progress on the fiscal front. In spinning the new deficit numbers, the Administration and others have made several dubious claims.

* The 2004 deficit. The Administration has hailed the 2004 projected deficit as evidence that its policies are working. The Administration notes that the $445 billion deficit it now forecasts for 2004 represents a significant improvement compared with the larger, $521 billion deficit it projected last February. As the Center on Budget and Policy Priorities reported at that time, however, the Administration’s February forecast artificially inflated the projected deficit for 2004, apparently so that subsequent downward adjustments in the deficit estimate could be presented as progress rather than as being, in significant part, the substitution of more realistic estimates for overstated ones.<1> Furthermore, as noted above, the $445 billion deficit now forecast for 2004 represents a deterioration from the level of the deficit in 2003, when the deficit stood at $375 billion.

* Stronger economic growth. The Administration also is portraying the drop in the projected 2004 deficit as a sign of stronger-than-expected economic growth. Such a portrayal is not accurate. Overall economic growth has been no faster than the Administration forecast earlier this year. The economy grew at a 3.9 percent annual real rate in the first three quarters of the fiscal year, in line with what the Administration projected when it released its earlier deficit projection in February. Indeed, economic growth has been below the growth rate the Congressional Budget Office projected at the start of the year.

* Revenues coming in modestly higher than expected. Although economic growth has not been faster than expected, revenues are coming in modestly above what CBO projected in February. (At the time of CBO’s projection, we noted that there already was evidence suggesting its revenue estimate would prove too low.) Possible factors that may help to explain the higher revenues include a greater-than-expected concentration of income among high-income individuals and higher-than-expected inflation (see box on page 5). Even so, revenues remain at unusually low levels. The Administration’s new projection shows that federal revenues this year will be at their lowest level since 1959, measured as a share of the economy.

* Cutting the deficit in half by 2009. The Administration is again contending that under its proposed budget policies, the deficit would be cut in half by 2009. But, the Administration uses a further set of unrealistic budget estimates for years after 2004 to make this case; the Administration omits major costs from its projections for those years, such as the costs of continuing relief from the Alternative Minimum Tax, something that the Administration has made clear it favors. Moreover, the Administration’s budget figures are provided for five years rather than ten, leaving out the years from 2010-2014 when the baby-boom generation will begin to retire in large numbers and the deficit is expected to rise.

*Causes of the deficit. On a related front, a number of policymakers and activists with an ideological axe to grind have claimed the recent tax cuts have had little or nothing to do with the deterioration of the budget outlook. The Administration’s own data show, however, that among the deficit-increasing factors over which policymakers have had control, the tax cuts constitute the single largest cause of the shift from surpluses to deficits. Table 7 of the mid-session review shows that tax cuts account for 57 percent of the budget deterioration in 2004 that has been caused by legislation enacted since the start of 2001.
Examining overall spending and revenue as a share of the economy provides further evidence that it is the low level of revenues, not a high spending level, that is driving the deficit. As noted above, revenues will fall this year to their lowest level, measured as a share of the economy, since 1959. By contrast, spending as a share of the economy, is below its average level of the past four decades.

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[54anickel]

70. Closing

Edit for closing blather.

Here's the buck for those watching:

Last trade 89.77 Change -0.20 (-0.22%)
High 89.88 Low 89.37

Dow 10,179.16 +39.45 (+0.39%)
Nasdaq 1,892.09 +4.73 (+0.25%)
S&P 500 1,106.62 +4.90 (+0.44%)
10-yr Bond 4.452% -0.023
30-yr Bond 5.191% -0.014
NYSE Volume 1,275,651,000
Nasdaq Volume 1,524,528,000

Close: It was an impressive day for the stock market...the indices opened lower after the US government warned of a possible terrorist attack against financial institutions...there was no followthrough selling pressure, however, and from there the indices inched higher through the day to end with respectable gains...the earnings highlight was a stellar report from Procter & Gamble (PG 53.35 +1.20), which gave the Dow a boost...the economic reports had little impact...the July ISM index came in exactly as expected at 62.0, up from 61.1 in June...June construction spending was off 0.3%...
Cox Communications (COX 33.19 +5.61) advanced sharply on word it would be taken private, while Corinthian Colleges (COCO 10.29 -8.43) was sharply lower after issuing a profit warning...oil prices opened the day down about 30 cents, but the September crude oil futures contract closed up 2 cents...the 10-year note rose 6/32 to yield 4.45%...volume was very light on the first trading session of August...advancers led decliners on the NYSE, but declining issues bested advancing issues on the Nasdaq...NYSE Adv/Dec 1968/1296, Nasdaq Adv/Dec 1345/1845

3:30PM: Indices remain in narrow range heading into the final half hour of trading...after the close, insurance company Principal Financial Group (PFG) and oil services firm FMC Technology (FTI) are the two largest companies due to report earnings...neither is likely to have broad impact...tomorrow morning, Tyco (TYC) reports...NYSE Adv/Dec 1740/1499, Nasdaq Adv/Dec 1142/2025
2:55PM: Volume is extremely light today...NYSE may end up near 1.2 billion shares...the advance-decline line looks good for the NYSE, but is very weak on the Nasdaq...there are about 3 declining issues for every 2 advancing issues even though the Nasdaq index is near unchanged...this suggests continued nervousness among small cap stocks...the Russell 2000 small cap index is down 0.3%...NYSE Adv/Dec 1835/1393, Nasdaq Adv/Dec 1213/1930


U.S. stocks rise, shrug off terror threat
http://biz.yahoo.com/cbsm-top/040802/ce1697dff43bb44c0f2a6388ed350f50_1.html

NEW YORK (CBS.MW) -- Blue chips appeared headed for their five-day win streak this year amid strength in Procter & Gamble after a better-than-expected profit report even as Wall Street defied fresh terror threats targeting New York and Washington.

snip>
"I think the market is pretty much absorbing this news fairly well and everything is fairly orderly," said Todd Clark, head of listed equity trading at Wells Fargo Securities. He noted that the market has had three years to discount this kind of thing.

Clark said this week was all about economic fundamentals, with the release of manufacturing and home construction data Monday and the all-important U.S. employment report for July on Friday. See Economic Preview for more.

"There's a lot of things for the market to pay attention to away from the potential for terror, which we all know exists," he said.

snip>
Strategists were confident the threats would not have a long-term impact on stocks.

"I think the market will absorb this near-shock over a day or two and then refocus on what counts, which is the economy -- including the employment number on Friday," said Hugh Johnson, chief investment officer at First Albany Corp.

Larry Wachtel, market analyst at Wachovia Securities called the new warning "just a reminder of the problem" to Wall Street and that the realization that "there's always going to be a threat" is already reflected the market's valuation.

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